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Issues covered by the WTO’s committees and agreements

REPERTORY OF APPELLATE BODY REPORTS

Accession Protocols


ON THIS PAGE:

> China’s Accession Protocol
> Relationship with other WTO agreements
> Transitional safeguard mechanism. See also Agreement on Agriculture, Article 5 — Special safeguard (A.1.14); Safeguards Agreement, Article XIX of the GATT 1994 — General (S.1.45); Textiles and Clothing Agreement, Article 6 — Transitional safeguard (T.7.1)

A.0.1 China’s Accession Protocol     back to top

A.0.1.1 China — Auto Parts, para. 214
(WT/DS339/AB/R, WT/DS340/AB/R, WT/DS342/AB/R)
 

The Panel proceeded, therefore, on the basis that the commitment made by China in paragraph 93 of its Accession Working Party Report is enforceable in WTO dispute settlement proceedings and should be interpreted in accordance with the customary rules of interpretation as codified in Articles 31 and 32 of the Vienna Convention. Neither of these propositions has been disputed at any point in these proceedings, including in this appeal.
 

A.0.1.2 China — Publications and Audiovisual Products, paras. 194–196
(WT/DS363/AB/R)
 

… [A] measure can regulate both goods and services and …, as a result, the same measure can be subject to obligations affecting trade in goods and obligations affecting trade in services. This does not necessarily mean that the same measure would also be subject to China’s trading rights commitments, because a measure regulating goods may not affect who has the right to trade those goods. In this dispute, however, it is uncontested that Article 30 of the Film Regulation restricts who may engage in the importation of films. The issue raised by China’s appeal is whether what is imported by the entity designated under Article 30 is a good. In other words, in this dispute, the applicability of China’s trading rights commitments to Article 30 of the Film Regulation depends on the issue of whether that provision regulates goods. …
 

We do not see the clear distinction drawn by China between “content” and “goods”. Neither do we consider that content and goods, and the regulation thereof, are mutually exclusive. Content can be embodied in a physical carrier, and the content and carrier together can form a good. …
 

Moreover, as the Panel properly found, China’s trading rights commitments refer to the right to trade in “all goods”. The applicability of China’s trading rights commitments to a measure is triggered when that measure concerns who may import a good. … the fact that cinematographic films are imported “simultaneously, physically in conjunction with the right to provide the service in question” shows that, where physical carriers are used for purposes of importing and licensing the content of films, Article 30 of the Film Regulation has an inevitable, rather than “incidental”, effect on who may import goods. The inevitable effect of Article 30 on the importation of goods confirms the Panel’s finding that Article 30 “would necessarily affect” who may engage in the importation of goods where relevant content is to be imported on hard-copy cinematographic films. In our view, therefore, the Panel correctly found that the mere fact that the import transaction involving hard-copy cinematographic films may not be the “‘essential feature’ of the exploitation of the relevant film” does not preclude the application of China’s trading rights commitments to the Film Regulation.
 

A.0.1.3 EC — Fasteners (China), paras. 285, 287–288
(WT/DS397/AB/R)
 

… Section 15 of China’s Accession Protocol contains a similar acknowledgment of the difficulties in determining price comparability as the one contained in the second Ad Note to Article VI:1 of the GATT 1994, in respect of imports from China. …
 

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… paragraph 15(a) of China’s Accession Protocol places the burden on the Chinese producers clearly to show that market economy conditions prevail in the industry producing the like product with respect to its manufacture, production, and sale. If such a showing is made, the importing Member shall use Chinese prices and costs in determining price comparability. Like the second Ad Note to Article VI:1 of the GATT 1994, paragraph 15(a) of China’s Accession Protocol permits importing Members to derogate from a strict comparison with domestic prices or costs in China, that is, in respect of the determination of the normal value. …
 

We do not consider that the references in paragraph 15(a)(i) and (ii) to producers having to show that “market economy conditions prevail … with regard to the manufacture, production and sale” of a product means that paragraph 15(a) permits any derogations also with respect to the determination of export prices. We reach this conclusion because, when producers are not able to show that market economy conditions prevail (including with regard to the sale of the product), paragraph 15(a) makes it clear that all an importing WTO Member is allowed to do as a consequence is to “use a methodology that is not based on a strict comparison with domestic prices or costs in China”.
 

A.0.1.4 EC — Fasteners (China), para. 289
(WT/DS397/AB/R)
 

… Since paragraph 15(d) [of China’s Accession Protocol] provides for rules on the termination of paragraph 15(a), its scope of application cannot be wider than that of paragraph 15(a). Both paragraphs concern exclusively the determination of normal value. In other words, paragraph 15(a) contains special rules for the determination of normal value in anti-dumping investigations involving China. Paragraph 15(d) in turn establishes that these special rules will expire in 2016 and sets out certain conditions that may lead to the early termination of these special rules before 2016.
 

A.0.1.5 EC — Fasteners (China), para. 290
(WT/DS397/AB/R)
 

In our view, therefore, Section 15 of China’s Accession Protocol does not authorize WTO Members to treat China differently from other Members except for the determination of price comparability in respect of domestic prices and costs in China, which relates to the determination of normal value. We consider that, while Section 15 of China’s Accession Protocol establishes special rules regarding the domestic price aspect of price comparability, it does not contain an open-ended exception that allows WTO Members to treat China differently for other purposes under the Anti-Dumping Agreement and the GATT 1994, such as the determination of export prices or individual versus country-wide margins and duties.
 

A.0.1.6 EC — Fasteners (China), para. 328
(WT/DS397/AB/R)
 

… we do not find any provision in the covered agreements that would allow importing Members to depart from the obligation to determine individual dumping margins only in respect of imports from NMEs. We have explained above that Section 15 of China’s Accession Protocol permits derogation in respect of the domestic price or normal value aspect of price comparability, but does not address the export price aspect of price comparability. It, therefore, has no entailment in respect of the obligation in Article 6.10 of the Anti-Dumping Agreement to determine individual dumping margins. In our view, therefore, Section 15 of China’s Accession Protocol does not provide a legal basis for flexibility in respect of export prices and for justifying an exception to the requirement to determine individual dumping margins in Article 6.10 of the Anti-Dumping Agreement.
 

A.0.1.7 EC — Fasteners (China), paras. 365–366
(WT/DS397/AB/R)
 

… Section 15 of China’s Accession Protocol … only permits derogations in respect of the use of domestic prices and costs — that is, normal value — but not in respect of export prices in the calculation of margins and the consequential imposition of duties.
 

It is true that paragraph 15(a) of China’s Accession Protocol places the burden on Chinese exporters to “clearly show” that market economy conditions prevail in order for the importing WTO Members to be obliged to use Chinese domestic prices and costs in determining price comparability. However, this rule concerns only the normal value aspect of price comparability, and does not permit derogation from the disciplines of the Anti-Dumping Agreement regarding export price. Paragraph 15(a) of China’s Accession Protocol does not provide a legal basis for a presumption that an exporter’s individual export prices cannot be used and that, as a consequence, country-wide export prices should be used and hence country-wide margins should be determined and country-wide duties should be imposed. Neither can paragraph 15(d) be interpreted as authorizing WTO Members to treat China as an NME for matters other than the determination of normal value. As explained above, paragraph 15(d) does not pronounce generally on China’s status as a market economy or NME. Rather, it permits an importing WTO Member to specify when the special rules regarding normal value contained in paragraph 15(a) no longer apply — that is, either in 2016 or earlier — if China establishes that it is a market economy or that market economy conditions exist in specific industries. …
 

A.0.1.8 US — Tyres (China), para. 118
(WT/DS399/AB/R)
 

Paragraph 1.2 of China’s Accession Protocol provides that the Protocol “shall be an integral part” of the WTO Agreement. As such, the customary rules of interpretation of public international law, as codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (the “Vienna Convention”), are, pursuant to Article 3.2 of the DSU, applicable in this dispute in clarifying the meaning of Paragraphs 16.1 and 16.4 of the Protocol.
 

A.0.1.9 China — Raw Materials, para. 278
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

Paragraph 1.2 of China’s Accession Protocol provides that the Protocol “shall be an integral part” of the WTO Agreement. As such, the customary rules of interpretation of public international law, as codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (the “Vienna Convention”), are, pursuant to Article 3.2 of the DSU, applicable in this dispute in clarifying the meaning of Paragraph 11.3 of the Protocol. …
 

A.0.1.10 China — Raw Materials, paras. 280, 284–285, 287
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

… Paragraph 11.3 of China’s Accession Protocol requires China to “eliminate all taxes and charges applied to exports” unless one of the following conditions is satisfied: (i) such taxes and charges are “specifically provided for in Annex 6 of [China’s Accession] Protocol”; or (ii) such taxes and charges are “applied in conformity with the provisions of Article VIII of the GATT 1994”.
 

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… Annex 6 in turn “specifically provides for” maximum export duty levels on 84 listed products. The Note to Annex 6 clarifies that the maximum rates set out in Annex 6 “will not be exceeded” and that [in the first sentence] China [confirmed “furthermore” that it would] “not increase the presently applied rates, except under exceptional circumstances”. The Note therefore indicates that China may increase the “presently applied rates” on the 84 products listed in Annex 6 to levels that remain within the maximum levels listed in the Annex. …
 

… We further note that the third sentence of the Note to Annex 6 refers to the “exceptional circumstances” described in the second sentence of that provision, stating that, “[i]f such circumstances occurred, China would consult with affected members prior to increasing applied tariffs with a view to finding a mutually acceptable solution.” This language further supports our view that the “exceptional circumstances” referred to in the Note to Annex 6 are ones that, if shown to exist, would allow China to increase applied tariffs up to the maximum tariff levels set out in Annex 6 for the products listed. …
 

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In our view, the use of the word “furthermore” in the second sentence of the Note to Annex 6 suggests that the obligations contained in the second and third sentences of the Note, including the consultation obligation, are “in addition” to China’s obligation under the first sentence not to exceed the maximum tariff levels provided for in Annex 6. We see nothing in the Note to Annex 6 that would allow China to: (i) impose export duties on products not listed in Annex 6; or (ii) increase the applied export duties on the 84 products listed in Annex 6, in a situation where “exceptional circumstances” have not “occurred”. We therefore disagree with the Panel to the extent it found that China’s failure to consult with other WTO affected Members prior to the imposition of export duties on raw materials not listed in Annex 6 is inconsistent with its obligations under Annex 6. The imposition of these export duties is inconsistent with Paragraph 11.3 of China’s Accession Protocol, and because the raw materials at issue are not listed in Annex 6, the consultation requirements contained in the Note to Annex 6 are not applicable.
 

A.0.1.11 China — Raw Materials, paras. 298–299 and Footnote 576
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

… China’s Accession Working Party Report sets out many of the concerns raised and obligations undertaken by China during its accession process. …
 

… Paragraphs 155 and 156 of China’s Accession Working Party Report576 … deal with China’s commitments with respect to the elimination of export duties. … As in the case of Paragraph 11.3, Paragraphs 155 and 156 make no reference to the availability of an Article XX defence for the commitments contained therein. This further supports our interpretation that China does not have recourse to Article XX of the GATT 1994 to justify export duties found to be inconsistent with China’s obligations under Paragraph 11.3 of China’s Accession Protocol.
 

A.0.2 Relationship with other WTO agreements     back to top

A.0.2.1 China — Publications and Audiovisual Products, paras. 218, 226–230, 233
(WT/DS363/AB/R)
 

Looking first to the overall structure of the first sentence of paragraph 5.1, we note that the sentence contains a commitment, or obligation, undertaken by China, namely, to progressively liberalize the right to trade and ensure that, within three years of accession, all enterprises in China have the right to import and export all goods. This obligation is, however, qualified by the introductory clause of the first sentence: “Without prejudice to China’s right to regulate trade in a manner consistent with the WTO Agreement”.
 

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… Under paragraph 5.1, China undertakes a commitment in respect of traders, in the form of a commitment to grant to all enterprises in China the right to import and export goods. At the same time, this commitment, or obligation, is made subject to, and may not detrimentally affect, China’s right to regulate trade in a manner consistent with the WTO Agreement. We see the obligations assumed by China in respect of trading rights, which relate to traders, and the obligations imposed on all WTO Members in respect of their regulation of trade in goods, as closely intertwined. This is particularly true of China’s trading rights commitments, on the one hand, and the obligations imposed on all WTO Members under Articles III and XI of the GATT 1994, on the other hand, as certain WTO Members expressly recognized during the negotiations on China’s accession to the WTO. Such interlinkage is also reflected in paragraph 5.1 itself. Read as a whole, this provision is clearly concerned with trade in goods. …
 

The close relationship between restrictions on entities engaged in trade and GATT obligations relating to trade in goods has also been recognized in previous GATT panel and WTO panel and Appellate Body reports, where measures that did not directly regulate goods, or the importation of goods, have nonetheless been found to contravene GATT obligations. Thus, for example, restrictions imposed on investors, wholesalers, and manufacturers, as well as on points of sale and ports of entry, have been found to be inconsistent with Article III:4 or Article XI:1 of the GATT 1947 or 1994. In addition, the Illustrative List in Annex 1 to the Agreement on Trade-Related Investment Measures (the “TRIMs Agreement”) sets out a number of requirements imposed on enterprises that are deemed to be inconsistent with either Article III:4 or Article XI:1 of the GATT 1994, and Article 3 of the TRIMs Agreement states that all exceptions under the GATT 1994 apply, as appropriate, to the provisions of the TRIMs Agreement. These considerations suggest that measures that restrict the rights of traders may violate GATT obligations with respect to trade in goods.
 

Returning to the introductory clause of paragraph 5.1, we recall our observation above that the reference to China’s power to regulate trade “in a manner consistent with the WTO Agreement” seems to us to encompass both China’s power to take regulatory action provided that its measures satisfy prescribed WTO disciplines and meet specified conditions (for example, an SPS measure that conforms to the SPS Agreement) and China’s power to take regulatory action that derogates from WTO obligations that would otherwise constrain China’s exercise of such power — that is, to relevant exceptions.
 

China’s power to regulate trade in goods is disciplined by the obligations set out in Annex 1A of the WTO Agreement. In our view, the introductory clause of paragraph 5.1 cannot be interpreted in a way that would allow a complainant to deny China access to a defence merely by asserting a claim under paragraph 5.1 and by refraining from asserting a claim under other provisions of the covered agreements relating to trade in goods that apply to the same or closely linked measures, and which set out obligations that are closely linked to China’s trading rights commitments. …
 

All of the above suggests to us that the introductory clause of paragraph 5.1 should be interpreted as follows. Any exercise of China’s right to regulate trade will be protected under the introductory clause of paragraph 5.1 only if it is consistent with the WTO Agreement. This will be the case when China’s measures regulating trade are of a type that the WTO Agreement recognizes that Members may take when they satisfy prescribed disciplines and meet specified conditions. Yet, these are not the only types of WTO-consistent measures that may be protected under the introductory clause of paragraph 5.1. Whether a measure regulating those who may engage in the import and export of goods falls within the scope of China’s right to regulate trade may also depend on whether the measure has a clearly discernable, objective link to the regulation of trade in the goods at issue. In considering whether such a link is discernable, it may be relevant whether the measure regulating who may engage in trade is clearly and intrinsically related to the objective of regulating the goods that are traded. In addition, such a link may often be discerned from the fact that the measure in question regulates the right to import and export particular goods. This is because the regulation of who may import and export specific goods will normally be objectively related to, and will often form part of, the regulation of trade in those goods. Whether the necessary objective link exists in a specific case needs to be established through careful scrutiny of the nature, design, structure, and function of the measure, often in conjunction with an examination of the regulatory context within which it is situated. When such a link exists, then China may seek to show that, because its measure complies with the conditions of a GATT 1994 exception, the measure represents an exercise of China’s power to regulate trade in a manner consistent with the WTO Agreement and, as such, may not be impaired by China’s trading rights commitments.
 

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For all these reasons, we consider that the provisions that China seeks to justify have a clearly discernable, objective link to China’s regulation of trade in the relevant products. In the light of this relationship between provisions of China’s measures that are inconsistent with China’s trading rights commitments, and China’s regulation of trade in the relevant products, we find that China may rely upon the introductory clause of paragraph 5.1 of its Accession Protocol and seek to justify these provisions as necessary to protect public morals in China, within the meaning of Article XX(a) of the GATT 1994. Successful justification of these provisions, however, requires China to have demonstrated that they comply with the requirements of Article XX of the GATT 1994 and, therefore, constitute the exercise of its right to regulate trade in a manner consistent with the WTO Agreement. …
 

A.0.2.2 US — Anti-Dumping and Countervailing Duties (China), Footnote 559 to para. 580
(WT/DS379/AB/R)
 

… We do not agree with the Panel that the fact that China’s Accession Protocol does not explicitly address the issue of double remedies suggests that Articles 19.3 and 19.4 of the SCM Agreement do not address double remedies. In our view, the fact that China’s Accession Protocol does not exclude the application of countervailing duties to China while it remained an NME may equally be read as suggesting a shared understanding that China would be protected against the imposition of double remedies by the provisions of the SCM Agreement. On balance, however, we are not persuaded that the absence of a provision addressing double remedies in China’s Accession Protocol suggests anything regarding the interpretation of Articles 19.3 and 19.4 of the SCM Agreement.
 

A.0.2.3 US — Tyres (China), paras. 120–121
(WT/DS399/AB/R)
 

Section 16 of China’s Accession Protocol sets out the conditions for the imposition of a product-specific safeguard measure on imports from China and provides that application of this transitional safeguard mechanism shall be terminated 12 years after the date of China’s accession, that is, in December 2013. The text of Section 16 of the Protocol resembles to some extent the language found in provisions of other WTO agreements, such as the Agreement on Safeguards. Yet, there are important textual and contextual differences between Section 16 of the Protocol and the relevant provisions of other WTO agreements that will inform our interpretative analysis. In the light of these differences, and as we explain further below, we view Paragraphs 16.1 and 16.4 of the Protocol as establishing a distinct standard for the imposition of safeguard measures as compared to the standards set out in other WTO agreements.
 

An analysis of the particular obligations set out under Section 16 of China’s Accession Protocol must begin with, and focus upon, the actual language used in the Protocol itself, including the phrases “increasing rapidly” and “a significant cause”. The provisions of other WTO agreements provide context, within the meaning of Article 31(1) and (2) of the Vienna Convention, to the interpretation of Paragraphs 16.1 and 16.4 of the Protocol. Such context is relevant to the extent that it sheds light on the interpretative issues to be resolved in this case.
 

A.0.2.4 China — Raw Materials, para. 285
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

… We … see nothing in the Note to Annex 6 suggesting that China could invoke Article XX of the GATT 1994 to justify the imposition of export duties that China had committed to eliminate under Paragraph 11.3 of China’s Accession Protocol.
 

A.0.2.5 China — Raw Materials, paras. 288, 290–291
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

We turn next to examine the relevance of the reference to Article VIII of the GATT 1994 in Paragraph 11.3 of China’s Accession Protocol. …
 

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Although Article VIII covers “[a]ll fees and charges of whatever character imposed by [WTO Members] on or in connection with importation or exportation”, it expressly excludes export duties, which are at issue here. In our view, as export duties are outside the scope of Article VIII, the question of conformity or consistency with this Article does not arise. Consequently, the fact that Article XX may be invoked to justify those fees and charges regulated under Article VIII does not mean that it can also be invoked to justify export duties, which are not regulated under Article VIII.
 

As noted by the Panel, “the language in Paragraph 11.3 expressly refers to Article VIII, but leaves out reference to other provisions of the GATT 1994, such as Article XX.” Moreover, there is no language in Paragraph 11.3 similar to that found in Paragraph 5.1 of China’s Accession Protocol — “[w]ithout prejudice to China’s right to regulate trade in a manner consistent with the WTO Agreement” — which was interpreted by the Appellate Body in China — Publications and Audiovisual Products. In our view, this suggests that China may not have recourse to Article XX to justify a breach of its commitment to eliminate export duties under Paragraph 11.3 of China’s Accession Protocol.
 

A.0.2.6 China — Raw Materials, para. 293
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

Paragraph 11.1 of China’s Accession Protocol provides that “China shall ensure that customs fees or charges applied or administered by national or sub-national authorities, shall be in conformity with the GATT 1994”. Paragraph 11.2 further stipulates that “China shall ensure that internal taxes and charges, including value-added taxes, applied or administered by national or sub-national authorities shall be in conformity with the GATT 1994”. Both of these provisions contain the obligation to ensure that certain fees, taxes or charges are “in conformity with the GATT 1994”. This is not the case for Paragraph 11.3. We also note that Paragraph 11.1 refers to “customs, fees and/or charges” in general and Paragraph 11.2 refers in turn to “internal taxes and charges”, while Paragraph 11.3 refers specifically to the elimination of “taxes and charges applied to exports”. Given the references to the GATT 1994 in Paragraphs 11.1 and 11.2, and the differences in the subject matter and nature of the obligations covered by these provisions, we consider that the absence of a reference to the GATT 1994 in Paragraph 11.3 further supports our interpretation that China may not have recourse to Article XX to justify a breach of its commitment to eliminate export duties under Paragraph 11.3. Moreover, as China’s obligation to eliminate export duties arises exclusively from China’s Accession Protocol, and not from the GATT 1994, we consider it reasonable to assume that, had there been a common intention to provide access to Article XX of the GATT 1994 in this respect, language to that effect would have been included in Paragraph 11.3 or elsewhere in China’s Accession Protocol.
 

A.0.2.7 China — Raw Materials, para. 299 and Footnote 576
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

… Paragraphs 155 and 156 of China’s Accession Working Party Report576 … deal with China’s commitments with respect to the elimination of export duties. … As in the case of Paragraph 11.3, Paragraphs 155 and 156 make no reference to the availability of an Article XX defence for the commitments contained therein. This further supports our interpretation that China does not have recourse to Article XX of the GATT 1994 to justify export duties found to be inconsistent with China’s obligations under Paragraph 11.3 of China’s Accession Protocol.
 

A.0.2.8 China — Raw Materials, para. 303
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

We note, as did the Panel, that WTO Members have, on occasion, “incorporated, by cross-reference, the provisions of Article XX of the GATT 1994 into other covered agreements”. … In the present case, we attach significance to the fact that Paragraph 11.3 of China’s Accession Protocol expressly refers to Article VIII of the GATT 1994, but does not contain any reference to other provisions of the GATT 1994, including Article XX.
 

A.0.2.9 China — Raw Materials, para. 304
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

In China — Publications and Audiovisual Products, … the Appellate Body found that China could invoke Article XX(a) of the GATT 1994 to justify provisions found to be inconsistent with China’s trading rights commitments under its Accession Protocol and Accession Working Party Report. In reaching this finding, the Appellate Body relied on the language contained in the introductory clause of Paragraph 5.1, which states “[w]ithout prejudice to China’s right to regulate trade in a manner consistent with the WTO Agreement”. As noted by the Panel, such language is not found in Paragraph 11.3 of China’s Accession Protocol. We therefore do not agree with China … that the Appellate Body’s findings in China — Publications and Audiovisual Products indicate that China may have recourse to Article XX of the GATT 1994 to justify export duties that are inconsistent with Paragraph 11.3.
 

A.0.2.10 China — Raw Materials, para. 306
(WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R)
 

The preamble of the WTO Agreement lists various objectives, including “raising standards of living”, “seeking both to protect and preserve the environment” and “expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development.” The preamble concludes with the resolution “to develop an integrated, more viable and durable multilateral trading system”. Based on this language, we understand the WTO Agreement, as a whole, to reflect the balance struck by WTO Members between trade- and non-trade-related concerns. However, none of the objectives listed above, nor the balance struck between them, provides specific guidance on the question of whether Article XX of the GATT 1994 is applicable to Paragraph 11.3 of China’s Accession Protocol. In the light of China’s explicit commitment contained in Paragraph 11.3 to eliminate export duties and the lack of any textual reference to Article XX of the GATT 1994 in that provision, we see no basis to find that Article XX of the GATT 1994 is applicable to export duties found to be inconsistent with Paragraph 11.3.
 

A.0.3 Transitional safeguard mechanism. See also Agreement on Agriculture, Article 5 — Special safeguard (A.1.14); Safeguards Agreement, Article XIX of the GATT 1994 — General (S.1.45); Textiles and Clothing Agreement, Article 6 — Transitional safeguard (T.7.1)     back to top

A.0.3.1 US — Tyres (China), para. 131
(WT/DS399/AB/R)
 

Paragraph 16.1 [of China’s Accession Protocol] sets forth the general conditions for the imposition of product-specific safeguard measures provided for under Section 16 of the Protocol. It establishes that such measures may be applied in cases “where products of Chinese origin are being imported into the territory of any WTO Member in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products”.
 

A.0.3.2 US — Tyres (China), paras. 133–135
(WT/DS399/AB/R)
 

The first sentence of Paragraph 16.4 … establishes that market disruption shall exist when the following three conditions are met. First, imports from China are “increasing rapidly, either absolutely or relatively”. Second, the domestic industry producing like or directly competitive products is materially injured, or threatened with material injury. Third, rapidly increasing imports are “a significant cause” of material injury to the domestic industry, or threat thereof. … the first condition … constitutes a threshold requirement for the existence of “market disruption” within the meaning of Paragraphs 16.1 and 16.4 of the Protocol.
 

We begin our analysis [of this first condition] with the ordinary meaning of the term “increasing rapidly”. The ordinary meaning of the verb “increase” is to “make or become greater in size, amount, duration or degree”. … Paragraph 16.4 uses the present continuous tense “are increasing”. In our view, the use of the present continuous tense “are increasing” connotes import increases that are still in progress at the present time. The use of the present continuous tense “are increasing” also suggests that imports follow an upward trend, in that they have increased in the past and continue to increase at present.
 

The first sentence of Paragraph 16.4 employs the adverb “rapidly” to describe the nature of increases in imports that could give rise to “market disruption”. The ordinary meaning of the term “rapid” is “with great speed, swift, developed or completed within a short time”. Therefore, the adverb “rapidly” refers both to the speed with which, and to the short period of time in which, such increase is occurring. Thus, the ordinary meaning of the term “increasing rapidly” seems to suggest that imports are presently becoming greater in amount or degree, at great speed or swiftly, and within a short period of time.
 

A.0.3.3 US — Tyres (China), para. 136
(WT/DS399/AB/R)
 

Paragraph 16.4 further provides that market disruption exists where imports are increasing rapidly “either absolutely or relatively”. This suggests that either an absolute or a relative increase may be relevant in determining whether imports are increasing “rapidly” within the meaning of that provision. In our view, a rapid increase in absolute terms occurs when the volume of imports increases significantly over a short period of time. Paragraph 16.4 provides no express guidance as to which benchmarks may be used in assessing whether imports are “increasing rapidly” in relative terms. However, to the extent that Paragraph 16.4 defines “market disruption” with reference to imports that are increasing rapidly “so as to be a significant cause of material injury … to the domestic industry”, any benchmark that compares increases in imports from China vis-à-vis relevant indicators of the domestic industry, such as consumption (that is, market share) or production, could be appropriate. Therefore, imports will be increasing “rapidly” in relative terms when the share of imports from China relative to consumption or other relevant benchmarks increases significantly over a short period of time.
 

A.0.3.4 US — Tyres (China), paras. 137–138
(WT/DS399/AB/R)
 

Paragraph 16.4 must be read together with Paragraph 16.1, which establishes that market disruption may arise where products from China “are being imported … in such increased quantities” as to cause market disruption. In our view, Paragraph 16.1 imparts two distinct elements that are relevant for the interpretation of Paragraph 16.4. First, Paragraph 16.1 requires that Chinese products “are being imported”. The fact that Paragraph 16.1, like Paragraph 16.4, employs the present continuous tense further buttresses our conclusion that the term “increasing rapidly” in Paragraph 16.4 connotes increases in imports that continue at the present time. Similar language contained in Article 2.1 of the Agreement on Safeguards (“is being imported”) was interpreted by the Appellate Body in Argentina — Footwear (EC) as implying that the increase in imports “must have been sudden and recent”.
 

Second, Paragraph 16.1 establishes that Chinese imports are being imported “in such increased quantities” as to cause market disruption. Reference to “increased quantities” suggests a comparative assessment, in that imports must have become greater than they once were. The term “such”, in turn, establishes a threshold requirement in relation to the magnitude or degree of import increases that could cause market disruption under Paragraph 16.1. Market disruption under Paragraph 16.1 arises not when Chinese products are being imported merely in “increased quantities”, but rather “in such increased quantities” as to cause market disruption. This, in our view, suggests that, in order to cause market disruption, imports must be at significantly higher levels than they once were.
 

A.0.3.5 US — Tyres (China), para. 139
(WT/DS399/AB/R)
 

Finally, the “increasing rapidly” threshold of Paragraph 16.4 must be interpreted consistently with the object and purpose of the Protocol, as reflected in Section 16 thereof. This object and purpose is to afford temporary relief to domestic industries that may be exposed to market disruption as a result of a rapid increase in Chinese imports of like or directly competitive products, subject to the terms and conditions provided for in Section 16. Viewed in this light, Paragraph 16.4 strikes a particular and distinct balance between, on the one hand, imports that are increasing significantly in a short period of time and, on the other hand, the requisite level of injury to the domestic industry (“material injury”) and the causal link between imports that are increasing rapidly and material injury to the domestic industry (rapidly increasing imports must be a “significant cause” of material injury).
 

A.0.3.6 US — Tyres (China), para. 140
(WT/DS399/AB/R)
 

In sum, imports from China will be “increasing rapidly” under Paragraph 16.4 of the Protocol when they are increasing at great speed or swiftly, either in relative or absolute terms. Such import increases must be occurring over a short and recent period of time, and must be of a sufficient absolute or relative magnitude so as to be a significant cause of material injury to the domestic industry.
 

A.0.3.7 US — Tyres (China), paras. 146–147
(WT/DS399/AB/R)
 

We are not persuaded that the use of the present continuous tense “are increasing” in Paragraph 16.4 of the Protocol requires investigating authorities to focus exclusively on import increases that occurred during the most recent past. As noted earlier, the use of the present continuous tense in both Paragraph 16.4 (“are increasing”) and Paragraph 16.1 (“are being imported”) connotes an upward trend in imports that continues at the present time. However, because investigating authorities normally do not have access to real-time import data, they have to examine the behaviour of imports during a sufficiently recent period in the past, which is used as a proxy for current imports. For this reason, the period of investigation selected by the investigating authority must be sufficiently recent to provide a reasonable indication of current trends in imports. …
 

[As the Appellate Body noted in Argentina — Footwear (EC),] the use of the present continuous tense in the phrase “is being imported” requires investigating authorities to examine “recent” import trends. For this reason, investigating authorities must select a period of investigation that is sufficiently recent to provide a reasonable indication of current trends in imports. Or, as the Appellate Body put it, “the investigation period should be the recent past”. However, once the period of investigation is selected, and is sufficiently recent to provide a reasonable indication of current trends in imports, nothing in the use of the present continuous tense “are increasing” in Paragraph 16.4 and “are being imported” in Paragraph 16.1 implies that the analysis must be limited to import data relating to the very end of the period of investigation.
 

A.0.3.8 US — Tyres (China), para. 148
(WT/DS399/AB/R)
 

Moreover, Paragraph 16.1 establishes that market disruption, as defined in Paragraph 16.4, may be caused when Chinese products “are being imported … in such increased quantities”. As noted earlier, reference to “in such increased quantities” suggests a comparative assessment, indicating that imports must be at significantly higher levels than earlier in the period of investigation. Investigating authorities would not be able to determine whether imports have increased, and whether the level of such increase in imports meets the threshold requirement implied by the terms “in such increased quantities”, if they were to focus exclusively on the most recent period.
 

A.0.3.9 US — Tyres (China), paras. 158–159
(WT/DS399/AB/R)
 

Like the Panel, we do not find that the ordinary meaning of the term “rapidly” (“with great speed” or “swiftly”) suggests an exclusive focus on the rates of increase in subject imports. In our view, the text of Paragraph 16.4 requires that imports — and not the rates of increase in imports — be increasing “rapidly”. While it might be useful for investigating authorities to review rates of increase in imports in assessing whether imports are “increasing rapidly”, we cannot agree with China that imports will only be increasing “rapidly” when they are increasing at progressively accelerating rates. To the contrary, we agree with the Panel that a decline in the yearly rate of increase does not “necessarily preclude a finding that imports are ‘increasing rapidly’”. This is particularly so because, under Paragraph 16.4, rapid absolute import increases suffice to establish that imports are “increasing rapidly”. Moreover, one might expect that the rate of increase in imports will normally decline as imports grow from an increasingly larger base. Yet this alone would not, in our view, preclude a finding that imports are “increasing rapidly” in absolute terms.
 

As noted earlier, the term “rapidly” in Paragraph 16.4 connotes both the speed with which, and the short time period in which, imports are increasing. Accordingly, imports will be “increasing rapidly” in absolute terms when the volume of imports increases significantly over a short period of time. Conversely, imports will be increasing “rapidly” in relative terms when the share of subject imports relative to production, consumption, or other appropriate benchmarks increases significantly over a short period of time. Viewed in this light, the term “rapidly” does not require that the rates of increase in either the volume or market share of subject imports progressively increase over the period of investigation. This is because the volume or market share of subject imports may still be increasing significantly over a short period of time in situations where the rate of increase in a given year decelerates in comparison to previous years. In this sense, we agree with the Panel that the relative change in either the volume or the market share of subject imports is “a step further away” from the text of Paragraph 16.4, which requires rapid increases in either the volume or market share of subject imports.
 

A.0.3.10 US — Tyres (China), paras. 175–177
(WT/DS399/AB/R)
 

… the last condition [specified in Paragraph 16.4 for when “market disruption” exists is that such rapidly increasing imports are a significant cause of material injury or threat thereof].
 

The ordinary meaning of “significant” is “important, notable, [ ] consequential”. The term “significant” qualifies the term “a cause” in Paragraph 16.4, thus suggesting that rapidly increasing imports must be a cause that is “important” or “notable”. The term “cause”, in turn, has been interpreted by the Appellate Body in other contexts as “denot[ing] a relationship between, at least, two elements, whereby the first element has, in some way, ‘brought about’, ‘produced’ or ‘induced’ the existence of the second element”. Thus, Paragraph 16.4 seems to suggest that rapidly increasing imports must be an “important” or “notable” factor in “bringing about, producing or inducing” material injury to the domestic industry.
 

In this respect, we note that Paragraph 16.4 stipulates that rapidly increasing imports from China must be “a” significant cause of material injury to the domestic industry. This, in our view, suggests that rapidly increasing imports may be one of several causes that contribute to producing or bringing about material injury to the domestic industry. To that extent, we agree with the Panel that Paragraph 16.4 must be interpreted “in a way that allows for the possibility that [rapidly increasing imports] is one of several causal factors that together produce or bring market disruption”. However, we consider that the inclusion of the term “significant” to qualify “a cause” indicates that rapidly increasing imports must be more than a mere contributing cause to the material injury of the domestic industry. Rather, the contribution made by rapidly increasing imports to the material injury of the domestic industry must be important or notable.
 

A.0.3.11 US — Tyres (China), paras. 178–179
(WT/DS399/AB/R)
 

Paragraph 16.4 further establishes that market disruption exists when imports are “increasing rapidly … so as to be a significant cause of material injury”. As implied by the meaning of the term “so as to be”, that is, “in a manner that”, imports can only be “a significant cause” of material injury when they are “increasing rapidly”. In other words, the phrase “so as to be” links the ability of subject imports to be “a significant cause” of material injury to the threshold of imports that are “increasing rapidly, absolutely or relatively”. Reference to “are being imported … in such increased quantities as to cause … market disruption” in Paragraph 16.1 also links subject imports’ ability to cause “market disruption” to subject imports being imported “in such increased quantities”.
 

The second sentence of Paragraph 16.4 further requires investigating authorities to consider “objective factors” in determining whether market disruption exists, including the “volume of imports”, the “effect of imports on [domestic] prices”, and the “effect of such imports on the domestic industry”. The volume of imports from China and their effects on prices and on the domestic industry are therefore the factors that an investigating authority is required to consider in assessing whether rapidly increasing imports are “a significant cause” of material injury to the domestic industry. The word “including” in the second sentence of Paragraph 16.4 suggests that other elements may also be relevant in determining whether rapidly increasing imports are a significant cause of market disruption.
 

A.0.3.12 US — Tyres (China), para. 180
(WT/DS399/AB/R)
 

In our view, these textual and contextual elements suggest that the term “significant” describes the causal relationship or nexus that must be found to exist between rapidly increasing imports and material injury to the domestic industry, which must be such that rapidly increasing imports make an “important” or “notable” contribution in bringing about material injury to the domestic industry. Such assessment must be carried out on the basis of the objective factors listed in the second sentence of Paragraph 16.4, such as the volume of imports, the effect of imports on prices, and the effect of imports on the domestic industry.
 

A.0.3.13 US — Tyres (China), paras. 181–183
(WT/DS399/AB/R)
 

… we do not agree with China that the inclusion of the term “significant” to qualify the term “a cause” indicates that Paragraph 16.4 of the Protocol imposes a more rigorous causation standard than other WTO agreements, which require that imports “cause” injury. We do not find China’s comparison particularly useful, given the distinct causation standard set forth in the Protocol. In any event, we note that China’s argument is premised on other WTO agreements requiring that subject imports be no more than “a cause” of injury to the domestic industry. However, the Appellate Body has interpreted the causation standard reflected in the use of the term “cause” in other WTO agreements as requiring a “genuine and substantial relationship of cause and effect” between import increases and the requisite level of injury. Such a “genuine and substantial” causal link, in our view, implies a higher degree of causality than subject imports being merely “a cause” of the requisite level of injury to the domestic industry.
 

Furthermore, the context of Paragraph 16.4 does not seem to support China’s interpretation of the requisite causation standard. We note that Paragraph 16.1 of the Protocol refers to products from China being imported in such increased quantities as to “cause or threaten to cause” market disruption. In our view, the fact that the causal link reflected in Paragraph 16.1 is not similarly qualified by the term “significant” provides contextual support for the interpretation that Paragraph 16.4 does not establish a more rigorous causation standard, because the terms “cause” in Paragraph 16.1 and a “significant cause” in Paragraph 16.4 must be interpreted harmoniously.
 

In this regard, we also note that the injury threshold provided for in Paragraph 16.4 of the Protocol is “material injury”, rather than the “serious injury” threshold contained in Article 2.1 of the Agreement on Safeguards. In US — Lamb, the Appellate Body explained that “the word ‘serious’ connotes a much higher standard of injury than the word ‘material’”. Such lower injury threshold thus seems to imply a lower degree of injurious effects caused by rapidly increasing imports to the domestic industry. This reading also appears to be consistent with the meaning of the term “disruption” in Paragraph 16.4, that is, “lack of order or regular arrangement; disarray, confused state”, which similarly suggests a lower injury threshold than “serious injury”.
 

A.0.3.14 US — Tyres (China), para. 184
(WT/DS399/AB/R)
 

The above observations militate against China’s argument that the object and purpose of the Protocol supports an interpretation of “a significant cause” that implies a “particularly strong, substantial, and important causal connection” between rapidly increasing imports and material injury to the domestic industry. China is correct that the Protocol provides for restrictive measures on “fair” trade, and permits, for a transitional period, the application of such measures on Chinese imports alone. However, as noted above, we consider that the object and purpose of the Protocol, as reflected in Section 16 thereof, is to afford temporary relief to domestic industries that are exposed to market disruption as a result of a rapid increase in Chinese imports of like or directly competitive products, subject to the conditions and requirements provided therein. Therefore, the object and purpose of the Protocol, as reflected in Section 16 thereof, seems to weigh in favour of an interpretation pursuant to which temporary relief is available whenever rapidly increasing imports are making an “important”, rather than a “particularly strong [and] substantial”, contribution to the material injury of the domestic industry.
 

A.0.3.15 US — Tyres (China), para. 185
(WT/DS399/AB/R)
 

In sum, Paragraph 16.4 of the Protocol sets forth a distinct causation standard whereby rapidly increasing imports must be “a significant cause” of material injury to the domestic industry. This causation standard requires that rapidly increasing imports from China make an important contribution in bringing about material injury to the domestic industry. Pursuant to the second sentence of Paragraph 16.4, such determination is to be made on the basis of objective criteria, including the volume of imports, the effects of rapidly increasing imports on prices, and the effects of rapidly increasing imports on the domestic industry.
 

A.0.3.16 US — Tyres (China), para. 191
(WT/DS399/AB/R)
 

… Paragraph 16.4 of the Protocol does not provide specific guidance with respect to the methodology investigating authorities may apply in determining whether rapidly increasing imports are “a significant cause” of material injury. Thus, we agree with the Panel that Paragraph 16.4 gives investigating authorities a certain degree of discretion in selecting the methodology to assess the existence of a causal link, provided that such methodology establishes that rapidly increasing imports are “a significant cause” of material injury to the domestic industry, and considers the objective factors listed in the second sentence of Paragraph 16.4. The Appellate Body recently noted that “the appropriateness of a particular method [to establish causation] may have to be determined on a case-specific basis, depending on a number of factors and factual circumstances”.
 

A.0.3.17 US — Tyres (China), paras. 192–194
(WT/DS399/AB/R)
 

We also agree with the Panel that an analysis of the conditions of competition and of correlation may prove “essential” in order properly to establish causation under Paragraph 16.4. Indeed, rapidly increasing imports from China will be capable of being “a significant cause” of material injury to the domestic industry only where they are engaged in actual or potential competition with the like or directly competitive products in the domestic industry. Similarly, a temporal coincidence between upward trends in imports and a decline in the performance indicators of the domestic industry may evidence the existence of a causal link between rapidly increasing imports and material injury to the domestic industry. However, as China itself acknowledges, the examination of the conditions of competition and the analysis of correlation between movements in imports and injury factors are merely “analytical tools” that may assist an investigating authority in determining whether rapidly increasing imports are “a significant cause” of material injury to the domestic industry. As such, neither of these analytical tools is dispositive of the question of whether rapidly increasing imports are “a significant cause” of material injury to the domestic industry under Paragraph 16.4.
 

In respect of correlation in particular, the Appellate Body agreed with the panel in Argentina — Footwear (EC) that a correlation analysis focuses on “the relationship between movements in imports (volume and market share) and the movements in injury factors”. …
 

… the Appellate Body made clear that the existence of correlation, though indicative, is by no means dispositive of the existence of a causal link. Indeed, the Appellate Body considered that the lack of correlation does not preclude a finding that a causal link exists, provided that a very compelling analysis is provided.
 

A.0.3.18 US — Tyres (China), para. 195
(WT/DS399/AB/R)
 

In our view, China’s argument that Paragraph 16.4 of the Protocol requires a more rigorous scrutiny of the conditions of competition and a stricter correlation between import increases and decreases in injury factors than other WTO agreements is predicated on Paragraph 16.4 requiring a “particularly strong, substantial, and important” causal link between rapidly increasing imports and material injury to the domestic industry. For the reasons discussed earlier, we consider that the term “a significant cause” requires that rapidly increasing imports make an important contribution in bringing about material injury to the domestic industry. This legal standard must inform the investigating authority’s analysis of causation under Paragraph 16.4 of the Protocol. As we see it, an investigating authority may choose to rely — as the USITC did in this case — on both an analysis of the conditions of competition and an analysis of correlation to show that rapidly increasing imports are “a significant cause” of material injury to the domestic industry. A careful analysis of degrees of competitive overlap and a greater coincidence in the magnitude of import increases vis-à-vis decreases in injury factors may provide a more robust basis for a finding of causation. However, investigating authorities may calibrate their analysis to the particular circumstances of the case at hand, as long as the analysis provides a sufficiently reasoned and adequate explanation for a finding that rapidly increasing imports are “a significant cause” of material injury. The causation standard set forth in Paragraph 16.4 will be satisfied where these analytical tools provide a reasoned and adequate explanation for the investigating authority’s determination that rapidly increasing imports make an important contribution in bringing about material injury to the domestic industry.
 

A.0.3.19 US — Tyres (China), paras. 199–201
(WT/DS399/AB/R)
 

For its part, the Panel began by noting that the parties agreed that some form of non-attribution analysis may be required under Section 16 of the Protocol. Based on its analysis, the Panel concluded that “the causal link between rapidly increasing imports and material injury must be assessed ‘within the context of other possible causal factors’.”
 

As the Panel noted, an analogy can be drawn with the approach in US — Upland Cotton, where, notwithstanding the absence of explicit non-attribution language in Articles 5 and 6.3 of the SCM Agreement, both the panel and the Appellate Body found that, where other possible causes are present, some form of non-attribution analysis is inherent in establishing the causal link between the subsidy and price suppression and that, if a non-attribution analysis does not occur, one cannot establish with certainty that price suppression was the effect of the challenged subsidy (as opposed to some other injurious factor). The Appellate Body further found that the absence of expressly prescribed causation requirements under Articles 5(c) and 6.3(c) suggests that “a panel has a certain degree of discretion in selecting an appropriate methodology for determining whether the ‘effect’ of a subsidy is significant price suppression”.
 

Although the reasoning of the Appellate Body in that case was based on language found in other WTO agreements, we consider it apt and instructive in this dispute. In particular, it supports the notion that some form of analysis of the injurious effects of other factors is required to demonstrate that subject imports are “a significant cause” of injury within the meaning of Paragraph 16.4 of the Protocol, despite the absence of language explicitly requiring a consideration of other possible causes of injury. As we see it, an investigating authority can make a determination as to whether subject imports are a significant cause of material injury only if it properly ensures that effects of other known causes are not improperly attributed to subject imports and do not suggest that subject imports are in fact only a “remote” or “minimal” cause, rather than a “significant” cause, of material injury to the domestic industry. For this reason, the significance of the effects of rapidly increasing imports needs to be assessed in the context of other known causal factors. The extent of the analysis that is required will depend on the impact of other causes that are alleged to be relevant and the facts and circumstances of the particular case.
 

A.0.3.20 US — Tyres (China), paras. 219–220
(WT/DS399/AB/R)
 

We agree with China that the Panel could have provided a more thorough analysis of the data concerning the level of competition in the OEM market. After noting that both Chinese and domestic tyres were “present” in the OEM sector, the Panel appears to have relied primarily on an end-point-to-end-point comparison of relative volumes and market share in coming to the conclusion that the degree of competition between domestically produced tyres and subject imports was “increasing” in the OEM market. The Panel then sought to buttress this conclusion by juxtaposing the upward trend in subject imports’ market share with downward trends in apparent consumption and market share of both domestic tyres and non-subject imports.
 

We note that the Appellate Body has expressed reservations about end-point-to-end-point analyses of the type developed by the Panel in relation to the OEM market. Leaving that aside, the Panel could have provided a more thorough analysis of the conditions of competition in the OEM market. In particular, the Panel did not discuss in detail why an “increasing degree of competition” in the OEM market supported its ultimate conclusion that the USITC was not required to dismiss competition in that market as “negligible”. …
 

A.0.3.21 US — Tyres (China), paras. 237–238
(WT/DS399/AB/R)
 

As the Appellate Body has explained, the analysis of correlation focuses on “the relationship between movements in imports (volume and market share) and the movements in injury factors”. Furthermore, although the Appellate Body has acknowledged that correlation would “normally” suggest the existence of a causal link, it has made clear that it “cannot by itself prove causation”, and that its absence does not preclude an affirmative causation finding provided a “compelling analysis is present”. Hence, a correlation analysis is merely indicative — but not dispositive — of the existence of a causal link, and may assist an investigating authority in establishing that subject imports are “a significant cause” of material injury to the domestic industry under Paragraph 16.4 of the Protocol.
 

Moreover, we agree with the Panel that correlation between increases in subject imports and decreases in injury factors “is not an exact science”, and that it would be “unrealistic” to require a strict correlation in the degree of change in subject imports and the degree of change in injury indicators, particularly where other causes of injury are at work. This is particularly so because, in economic terms, different injury indicators will respond differently to increases in subject imports, thereby making it difficult — if not impossible — to establish such a precise correlation in the degree of changes in subject imports and the degree of changes in injury indicators. We agree with the Panel that, while a more precise degree of correlation between the upward movements in subject imports and the downward movements in injury factors might result in a more robust finding of causation, a finding of “significant cause” is not excluded simply because an investigating authority relies on overall coincidence between the upward movement in subject imports and the downward movement in injury factors.
 

A.0.3.22 US — Tyres (China), paras. 246–248
(WT/DS399/AB/R)
 

… we do not consider that a single injury factor should be determinative, provided that the investigating authorities’ correlation analysis provides a reasoned and adequate explanation for a determination that subject imports are a significant cause of material injury to the domestic industry.
 

In this respect, an analogy can be drawn with the Appellate Body’s finding in Argentina — Footwear (EC) that a decline in each injury factor is not necessary to support a finding that the domestic industry is seriously injured within the meaning of Article 4.1(a) of the Agreement on Safeguards. …
 

Similarly, in this case, we consider that the improvement in discrete injury factors during the period of investigation does not per se undermine the overall coincidence found by the USITC — and upheld by the Panel — between increases in subject imports and general downward trends in prices. …
 

A.0.3.23 US — Tyres (China), para. 252 and Footnotes 566–567
(WT/DS399/AB/R)
 

[Although China’s Accession Protocol does not contain express non-attribution language, we] agree with the Panel that some form of non-attribution analysis is inherent in the establishment of a causal link between rapidly increasing imports from China and material injury to the domestic industry. As noted above, Paragraph 16.4 of the Protocol requires that rapidly increasing imports from China make an important contribution to bringing about material injury to the domestic industry. This determination can only be made if an investigating authority properly ensures that effects of other known causes are not such as to suggest that subject imports are in fact only a “remote” or “minimal” cause, rather than a “significant” cause of material injury to the domestic industry. For this reason, the significance of the effects of rapidly increasing imports from China must be assessed in the context of other known causal factors. The extent of the analysis of other causal factors that is required will depend on the impact of the other factors that are alleged to be relevant and the facts and circumstances of the particular case. As noted above, the participants do not contest that “some form of non-attribution analysis” may be required in order to establish properly that subject imports are a “significant cause” of material injury within the meaning of Paragraph 16.4 of the Protocol. In some cases, the investigating authority may need to perform a detailed analysis of other causes of injury to support adequately a conclusion that subject imports are nonetheless “a significant cause” of injury.566 In other cases, a less extensive analysis of other causal factors may suffice to support adequately a conclusion that subject imports are “a significant cause” of injury.567
 

 

576. Paragraphs 155 and 156 are not referenced in Paragraph 342 of China’s Accession Working Party Report. Nonetheless, we agree with the Panel that they are of interpretative relevance in that they articulate the concerns of WTO Members at the time with respect to China’s use of export duties.     back to text

576. Paragraphs 155 and 156 are not referenced in Paragraph 342 of China’s Accession Working Party Report. Nonetheless, we agree with the Panel that they are of interpretative relevance in that they articulate the concerns of WTO Members at the time with respect to China’s use of export duties.     back to text

566. Such analysis may be necessary, for example, where the volume of subject imports and the margins of underselling are small and the record evidence suggests that the effects of the other possible causes of injury are particularly important.     back to text

567. This may be the case, for example, where the volume of subject imports and margin of underselling are very important.     back to text


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