 WT/DS277/R 
 Page C-1 
 
 
  
 
ANNEX C 
  
THIRD PARTY RESPONSES TO QUESTIONS FROM THE PANEL 
 
 
Contents Page 
Annex C-1 European Communities Responses to Questions from the Panel and 
the United States – Third Party Session C-2 
Annex C-2 Japan's Responses to Ques tions from the Panel – Third Party 
Session C-9 
 WT/DS277/R 
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 ANNEX C-1 
 
 
EUROPEAN COMMUNITIES  RESPONSES TO 
QUESTIONS FROM THE PANEL AND THE 
UNITED STATES – THIRD PARTY SESSION 
 
24 September 2003 
  
I. QUESTION 1:................................................................................................................. ..........1 
II. QUESTION 2:................................................................................................................ ...........2 
III. QUESTI ON 3:............................................................................................................... ............3 
IV. QUESTION 4:................................................................................................................ ...........5 
V. QUESTION 5:................................................................................................................. ..........5 
VI. QUESTION 6:................................................................................................................ ...........8 
VII. ADDITIONAL QUESTION FROM  THE PANEL TO THE EUROPEAN 
COMMUNITIES: ................................................................................................................... ..9 
VIII. QUESTION FROM THE UNITED STATES TO THE EUROPEAN 
COMMUNITIES .................................................................................................................... 10  WT/DS277/R 
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 I. QUESTION 1 
 
 Could the third parties express their views regarding the proposition that Article 3.7 of 
the AD Agreement and Article 15.7 of the SCM Agreement require the identification of a 
specific event or turning-point in time as a “c hange in circumstances” in order to justify an 
affirmative determination of threat of material in jury? If they agree with this view, could they 
please comment of the import of the footnote to  this provision, which sets out as an example 
“that there is convincing reason to believe that there will be, in the near future, substantially 
increased importation of the product at dumped prices.” In addition, could the third parties 
comment on the view that the “change in ci rcumstances” could be understood to encompass 
developments in the situation of the industry a nd/or the dumped or subsidized imports, which 
lead to the conclusion that injury which ha s not yet occurred can be predicted to occur 
imminently, and need not refer to any specific event. Could the third parties comment on 
whether the relevant change in circumstances must be explicitly identified?   
RESPONSE: 
 
 The European Communities already argued in its  Third Party Submission that Article 3.7 of 
the Anti-Dumping Agreement  and Article 15.7 of the SCM Agreement do not require identification of 
a “change in circumstances” in the form of a specific event or turni ng-point in time, but rather an 
analysis of factors that would create a change in the situation.1 
  The question whether the term “change in circumstances” could be understood to encompass 
developments in the situation of the industry a nd/or the dumped or subsidised imports, can be 
answered by considering the relevant context.
2  
 
 Article 3.7 of the Anti-Dumping Agreement  and Article 15.7 of the SCM Agreement list a 
number of relevant factors which essentially rela te to the likelihood of increased imports.  The 
European Communities, therefore, considers that th e focus of the analysis should be on whether there 
is a high likelihood of substantially increased imports  (in addition to the existing “significant rate of 
increase”) as required under Article 3.7 (i) of the Anti-Dumping Agreement  and 17.7 (ii) SCM).  This 
is further corroborated by footnote 10 of the Anti-Dumping  Agreement  which cites as one example 
that there will be “in the near future, substan tially increased importation of the product at dumped 
prices” and the negligibility ru le in Article 5.8 of the Anti-Dumping Agreement  and Article 11.9 of the 
SCM Agreement  which refers to “potential” as opposed to “actual” subsidised/dum ped imports.  Thus, 
the phrase “change in circumstances” requires an an alysis of particular factors relating to the 
occurrence of facts of future dumped/subsidized imports resulting in the conclusion that domestic 
industry is on the brink of being injured.   The European Communities can also confirm its view that the relevant change in circumstances must be explicitly identified.
3  The second sentence of Article 3.7 of the Anti-Dumping 
Agreement  and Article 15.7 of the SCM Agreement  which commences “[t]he change in 
circumstances” directly relates to the “determination of a threat of material injury” required in the first 
and third sentence of these provisions and therefor e mandates an explicit finding on a “change in 
circumstances”.  
                                                     
 
1 EC Third Party Submission, paras. 38-43. 
2 Ibid. 
3 EC Third Party Submission,  para. 39. WT/DS277/R 
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 II. QUESTION 2 
  Could the third parties address their understa nding of the “special care” requirement in 
Article 3.8 of the AD Agreement and Article 15.8 of the SCM Agreement? What elements do 
they consider could demonstrate the appropriate special care? The Panel notes that Article 3.8 
of the AD Agreement and Article 15.8 of the SCM Agreement provide that: 
 
“with respect to cases where injury is threatened by dumped [subsidized] 
imports, the application of anti-dumpi ng [countervailing] measures shall be 
considered and decided with special care”. 
Could the third parties address the implications of the phrase “the application of … measures” 
in terms of the timing of the obligations provided for in this provision? Are the third parties of the view that the “special care” requirement affect s or changes the obligation in Articles 3.1 of 
the AD Agreement and 15.1 of the SCM Agreement that a determination of injury “shall be 
based on positive evidence and involve an objective examination…” If so, how?  
 
RESPONSE: 
 
 The key legal issue underlying the above question, as the EC understands it, is whether the 
"special care" requirement in Article 3.8 of the Anti-Dumping Agreement  and Article 15.8 of the SCM 
Agreement  refers to the consideration and decisi on on whether injury is threatened by 
dumped/subsidized imports or to the later app lication of anti-dumping and countervailing duty 
measures.     The term “application of measures” is very broad and might have different meaning in 
different agreements.  However, as explained by the Panel in India – Bedlinen (21.5)  in the context of 
the Anti-Dumping Agreement , an anti-dumping duty is considered to be applied when it is imposed 
with respect to imports of the product in question.
4  Thus, there is a distinction between the 
determination on injury which in itself does not have  legal effects and the application of anti-dumping 
duties.  This distinction is also reflected in Article 9 of the Anti-Dumping Agreement  (and Article 19 
of the SCM Agreement ).  
  The “special care” requirement in Article 3.8 of the Anti-Dumping Agreement  and 
Article 15.8 of the SCM Agreement  explicitly refers to the “a pplication” of anti-dumping and 
countervailing measures as opposed to the determin ation which is governed by Article 3.7 of the Anti-
Dumping Agreement  and Article 15.7 of the SCM Agreement .  It presupposes that “injury is 
threatened”, and thus, that an injury determinati on exists.  It can therefore, not relate to the 
consideration and decision on whether a threat of injury exists.   The attribute "special" suggests a more rigorous level of care than that which is normally taken in applying anti-dumping and countervailing duty measures.  With a view to the above, it could 
relate to the consideration and decision on the imposition and collection of anti-dumping and 
countervailing duties governed by Article 9 of the Anti-Dumping Agreement  and Article 19 of the 
SCM Agreement .  
 
III. QUESTION 3 
 
 The Panel understands that Canada is not arguing that a combined analysis of injury 
caused by dumped and subsidized imports is pe r se inconsistent with the cited Agreements. 
Could the third parties comment on the view that, in the event the Panel finds a violation of any 
                                                     
 
4 Panel Report, EC – Bedlinen (21.5) , para. 6.255.  WT/DS277/R 
 Page C-5 
 
 
 other provision of the relevant Agreements, the injury determination as a whole should be 
deemed inconsistent with both the AD and SCM Agreements?  
RESPONSE: 
 
 The measures at dispute, as the European  Communities understands them, are the final 
definitive anti-dumping and countervailing duties applied as a result of the final determination that the 
domestic industry was threatened by material in jury by reason of both dumped and subsidised 
products.5 
  As clarified by Article 1 of the Anti-Dumping Agreement  and Article 10 of the SCM 
Agreement , the Members must ensure that anti-dumping  and countervailing duty measures are only 
imposed in accordance with Article VI of the GATT 1994 and the further requirements under both 
Agreements. 
 
 Article VI of the GATT 1994 prohibits anti-dumping  or countervailing duties unless there is a 
determination of injury.  Article 3 of the Anti-Dumping  Agreement  and Article 15 of the SCM 
Agreement  set out further requirements for the injury  determination.  However, the injury 
determination is not in itself a measure to be f ound WTO incompatible.  If an injury determination 
does not comply with all the requirements set by Article 3 of the Anti-Dumping Agreement  and 
Article 15 of the SCM Agreement, a Member has violated its obligations under those provisions.  As a 
result, the imposition of anti-dumping  and countervailing duties is inc onsistent with both Agreements. 
  The EC does not believe that a “combined analysis of injury caused by dumped and 
subsidized imports” is consistent with the Agre ement. There are two separate requirements under two 
separate Agreements and each must be separately fulfilled. 
  As already noted by the EC in its Third Part y Submission, the ITC injury determination at 
issue in this case is mixed and consists in the st rict sense of two legally separate determinations on 
which the final countervailing and anti-dumping  duties are based, which are to be reviewed separately 
under the SCM Agreement  and the Anti-Dumping Agreement .
6 The same applies to other requirements 
of the Agreements. Non respect of a provision of one agreement cannot render an injury determination (or a duty) inconsis tent with the other agreement. 
 
IV. QUESTION 4 
 
 Could the third parties please address the di stinctions they see, if any, between 
“finding”, “evaluation” and “consideration” in the context of analysis of factors in a determination under Article 3 of the AD Agreement and/or Article 15 of the SCM Agreement.  
RESPONSE: 
 
 Article 3 of the Anti-Dumping  Agreement and Article 15 of the SCM Agreement  require a 
“determination” of injury.  The term “finding” is not used in Article 3 of the Anti-Dumping Agreement  
and Article 15 of the SCM Agreement .  However, Article 12. 2 of the Anti-Dumping Agreement  
requires that “findings and conclusions reached on all is sues of fact and law considered material by the 
investigating authorities” are notified.  Thus, findings and conclusions relate to the result  of an 
investigative process on the relevant matters of fact and law.  Findings form steps in the reaching of 
an overall determination which is th e final settlement of the matter before the adjudicator and to the 
reasoning relied on to reach that conclusion. 
                                                      
5 EC Third Party Submission, para. 1. 
6 EC Third Party Submission, para. 16. WT/DS277/R 
Page C-6  
 
  
 As already discussed in the Third Party Submission, the terms “consideration” and “evaluation” rather prescribe the process
 by which a competent authority reaches a finding and do, 
therefore, not require a separate finding/determination.7 
 V. QUESTION 5   The Panel notes that Article 3.7 of the AD Agreement and Article 15.7 of the SCM 
Agreement provide that “In making a determination regarding the existence of a threat of material injury, the authorities should consid er, inter alia, such factors as:…” (emphasis 
added). In this context, could the third parties co mment on the view that consideration of all the 
listed factors is not mandatory, and that the failure to consider at all, or to adequately consider, 
one of the listed factors, is not fatal to the determination at issue before a Panel? 
 
RESPONSE: 
 
 The European Communities considers that the te rm "should" is not decisive in qualifying the 
nature of the list of factors in Article 3.7 of the Anti-Dumping Agreement  or 15.7 of the SCM 
Agreement  as the question from the Panel seems to suggest.  Rather, the nature of the analysis to be 
conducted by the Investigating Authority must be de termined on the basis of the entirety of the above-
mentioned provisions.  In this respect, the Eur opean Communities finds the first sentence of these 
provisions to be of particular relevance.  Indeed, the requirement that a determination of a threat of 
material injury must be based on facts and not me rely on allegation, conjecture or remote possibility 
strongly suggests that the authority should conduct a comprehensive analysis of the relevant factors 
indicating the presence (or indeed the absen ce) of a threat of material injury. 
  As pointed out in our Third Party Submission
8, the competent authority must reach a 
conclusion that a threat of injury exists.  The European Communities considers that such conclusion 
may be justified by at least one threat factor pointing towards a threat of material injury.  
 
 It is correct that the third sentence of Article 3.7 of the Anti-Dumping Agreement  and in 
Article 15.7 of the SCM Agreement  does not require that the domestic authorities “shall” consider all 
those factors as Articles 3.2 of the Anti-Dumping Agreement  and 15.2 of the SCM Agreement  do, but 
only that they “should” consider, “inter alia” such  factors as enumerated.  Neither does it require an 
“examination” of factors as Article 3.4 of the Anti-Dumping Agreement  and Article 15.4 of the SCM 
Agreement do. 
  While this suggests that Article 3.7 of the  Anti-Dumping Agreement  and Article 15.7 of the 
SCM Agreement  leave a broader measure of discretion to  investigating authorities regarding the 
manner  in which they make a threat of injury determin ation, this does not mean that an investigating 
authority could content itself with arbitrarily looking at selected factors.  Indeed, it cannot be excluded 
that a consideration of other factors than those effectively addressed by the authority would cast doubt 
on the existence of threat of injury.  The obligation to consider all relevant factors is confirmed by the 
explicit requirement in the last sentence of Articles 3.7 of the Anti-Dumping Agreement  and 
Article 15.7 of the SCM Agreement  that the " totality of the factors cons idered must lead to the 
conclusion that further dumped (subsidized) exports  are imminent and that, unless protective action is 
taken, material injury would occur ".  
  Therefore, the European Communities is of the vi ew that a determination of threat of material 
injury should rely on an objective consideration of a ll the relevant factors. In that respect, the factors 
                                                     
 
7 EC Third Party Submission, paras. 49-57. 
8 EC Third Party Submission, paras. 52-53.  WT/DS277/R 
 Page C-7 
 
 
 listed in Article 3.7 of the Anti-Dumping Agreement  and Article 15.7 of the SCM Agreement  
constitute, a priori , the most relevant factors to be consid ered in a threat of material injury 
determination.  
IV. QUESTION 6 
 
 Could the third parties please address what, in their view, is required to demonstrate 
consideration of the “trade effects” arising fr om subsidies under Article 15.7(i)? What would 
the third parties consider to be relevant trade effects that should be taken into account? 
 
RESPONSE: 
 
 A subsidy may cause a number of different adverse effects, e.g., injury in the domestic market 
or serious prejudice on other markets.9  However, for the purposes of an  injury determination, only the 
effects of the subsidy relating to injury on the domestic market are relevant.    The trade effects to be analysed in a threat  determination are the same as for a injury 
determination as set out in paragra phs 2 and 4 of Article 15 of the SCM Agreement.   
 
 The additional threat analysis is prospective in  nature and must be based on facts.  In a 
situation where very few facts are available, the na ture of the subsidy can be an important piece of 
evidence.  Thus, if it is an export subsidy, there can be an absolute presumption of a threat of injury.  
On the other hand a type of subsidy as referred to in Article 6.1(c) of the SCM Agreement  as being 
presumed not to be able to cause serious prejudice, i.e., “one-time measures which are non-recurrent 
and cannot be repeated for that enterprise and which are given merely to provide time for the 
development of long-term solutions and to avoid acu te social problems” might be an important piece 
of evidence that there is a low lik elihood of a threat of injury. 
 
VII. ADDITIONAL QUESTION FROM THE PANEL TO THE EUROPEAN 
COMMUNITIES 
  Could the European Communities please clarif y and explain the statement at paragraph 
7 of the Executive Summary of the Third Part y Submission by the European Communities that 
“Article 17.5 of the Anti-Dumpi ng Agreement confirms that do mestic authorities have no 
investigative duties to obtain facts in addition to the facts submitted by the interested parties”? 
 
RESPONSE: 
 
 The European Communities made the same statement in its Third Party Submission10. where 
it noted that the text of Article 17.5 of the Anti-Dumping Agreement  states in relevant part:  
 
The DSB shall, at the request of the comp laining party, establish a panel to examine 
the matter based upon:  
(ii) the facts made available in conform ity with appropriate domestic procedures 
to the authorities of the importing Member. 
 The duties of panels in reviewing a measure pa rallel the duties of the domestic authorities.  
The domestic procedures for anti-dumping investiga tions are governed by detailed rules under the 
Anti-Dumping  Agreement .  Article 6.1 of the Anti-Dumping  Agreement  reflects the basic obligation of 
                                                      
9 See Articles 5 and 6 SCM Agreement . 
10 EC Third Party Submission, paras. 24 and 25. WT/DS277/R 
Page C-8  
 
 interested parties to submit the relevant eviden ce.  As clarified in Article 6.6 and 7 of the Anti-
Dumping  Agreement , the competent authorities are only required to “satisfy themselves as to the 
accuracy of the information supplied by interested Me mbers or interested parties”.   Finally, they may 
base their decisions on “best facts available” as provided under 6.8 of the Anti-Dumping Agreement . 
 
 Thus, other than under the  Agreement on Safeguards , domestic authorities in anti-dumping 
cases are not required to investigate on their own initia tive into the existence of facts that were not 
provided by the interested parties.     This is further corroborated through an a contrario  conclusion from Annex II, paragraph 7 of 
the Anti-Dumping  Agreement  which sets forth a limited requirement that authorities “check the 
information from other independent sources at their disposal” in case authoriti es have to base their 
findings on information from a secondary source.  
 
VIII. QUESTION FROM THE UNITED STATES TO THE EUROPEAN COMMUNITIES 
 
 In Paragraph 53 of its first written submission, the EC states: “What is more, a 
conclusion that a threat of injury exists may be justified by at least one threat factor pointing 
towards a threat of material injury.” Please co nfirm whether the United States is correct in 
understanding that by use of the word ”concl usion” the European Communities is addressing 
the issue of findings rather than “consideration” of factors. 
 
RESPONSE:  
 The EC can confirm the understanding of the United States and refers to its response to 
Questions 4 and 5 above.   WT/DS277/R 
 Page C-9 
 
 
 ANNEX C-2 
 
JAPAN'S RESPONSES TO QUESTIONS FROM 
THE PANEL – THIRD PARTY SESSION 
 
 
Q1. Could the third parties express their views re garding the proposition that Article 3.7 of 
the AD Agreement and Article 15.7 of the SCM Agreement require the identification of a 
specific event or turning-point in time as a "change in circumstances" in order to justify an affirmative determination of threat of material injury?  If they agree with this view, could they please comment of the import of the footnote to this provision, which sets  out as an example " 
that there is convincing reason to believe that there will be, in the near future, substantially increased importation of the product at dumped prices."  In addition, could the third parties 
comment on the view that the "change in ci rcumstances" could be understood to encompass 
developments in the situation of the industry, and/or the dumped or subsidized imports, which 
lead to the conclusion that injury which ha s not yet occurred can be predicted to occur 
imminently, and need not refer to any specific event. Could the third parties comment on 
whether the relevant change in circumstances must be explicitly identified? 
 Answer
 
 1. It is our view that the authorities must jus tify its affirmative determination of a threat of 
material injury based on the fact s that increased effects of dumping or subsidization because of the 
change in circumstances between the time of the de termination and an imminent future would cause 
material injury to the domestic industry.  Article 3.7 or 15.7 does not provide how the state of such 
increased effects must be reached.  It thus may be reached through either gradual or abrupt change in 
circumstances.  2. The ordinary meaning of a “circumstance” is  “something surrounding”, or “that which stands 
around or surrounds”.
1  The term “change” means “substitution of one thing or set of conditions for 
another” or “alternation in state or quality”.2  The “change in circumstances” thus means, in the 
context of the second sentence of Articles 3.7 and 15.7, a substitution or alternation of conditions 
currently surrounding the domestic industry to different conditions. 
 
3.  The second sentence in Articles 3.7 and 15.7 further provides that such substitution or 
alternation of conditions must be “clearly” foresee n and imminent and further that such conditions 
would create a situation that the dumping or subsidy causes material injury to the domestic industry.  
In other words, it must be clearly shown from the facts that the new or altered conditions will increase the effects of dumping or subsidization to the ma gnitude that will cause material injury to the 
domestic industry.  The first sentence in these Ar ticles in conjunction with the second sentence thus 
requires that the affirmative determination of a threat  of material injury must be based on facts clearly 
showing occurrence of such new or altere d conditions in an imminent future.  
 4. Footnote 10 of the AD Agreement provides a good example.  Assume that the volume of dumped imports at the time of the investigation w as 100 metric tons, and the total margin of dumping 
was US$100.  The authorities then must demonstrat e first based on the facts that the increase of 
volume of dumped imports to certain volume, for example, 300 metric tons, is clearly foreseen and imminent at the time of their determination.  The authorities also must demonstrate that the foreseen 
                                                     
 
 1 The New Shorter Oxford English Dictionary (1993) , Volume 1, p. 405  
 2 Ibid., p. 371. WT/DS277/R 
Page C-10  
 
 increase of the total margin of dumping to be, for example, US$300, and that such increased 
magnitude of the dumping would cause the material injury to the domestic industry.  
Q2. Could the third parties address their underst anding of the "special care" requirement 
in Article 3.8 of the AD Agreement and Article 15. 8 of the SCM Agreement?  What elements do 
they consider could demonstrate the appropriate special care?  The Panel notes that Article 3.8 
of the AD Agreement and Article 15.8 of the SCM Agreement provide that:  
“with respect to cases where injury is threatened by dumped [subsidized] 
imports, the application of anti-dumpi ng [countervailing] measures shall be 
considered and decided with special care”.  
Could the third parties address the implications of the phrase "the application of … measures" 
in terms of the timing of the obligations provided for in this provision?  Are the third parties of the view that the "special care" requirement affe cts or changes the obligation in Articles 3.1 of 
the AD Agreement and 15.1 of the SCM Agreement that a determination of injury "shall be 
based on positive evidence and involve an objective examination…".  If so, how? 
 
Answer
 
 5. The provision of “special care” in Articles 3.8 and 15.8 require that, upon the authorities’ affirmative determination of a threat of material injury, the authorities make additional consideration 
whether the amount of anti-dumping or countervaili ng duty or the terms of undertakings shall be 
equivalent to full amount of dumping ma rgin or subsidization or less.   
 
6. Article 11.1 of the AD Agreement and Artic le 21.1 of the SCM Agreement set forth the 
general rule on the imposition of the duty that an anti-dumping and countervailing duty must be “to 
the extent necessary to counteract” injurious dumpi ng or subsidy.  These provisions inform of all 
other provisions related to the imposition of the duty a nd to undertakings.  In case of threat of material 
injury, the domestic industry has not yet suffered materi al injury at the time of the investigation.  The 
status quo therefore would not cause the injury.  Only the foreseeable and imminent “change” would 
cause the material injury, as discussed above.  The amount of duty thus must be limited to the extent necessary to prevent from occurring ma terial injury because of such “change”.  The full amount of 
dumping margin or subsidy, which was calculated using data during the period of investigation, 
would be excessive to counteract injurious dumping or  subsidization, which has not yet occurred.   
 
7. This provision of “special care” in Article 15.8 of the SCM Agreement is especially 
important, as the SCM Agreement does not have pr ovisions corollary to Article 9.1 of the AD 
Agreement, which set forth the lesser duty rule.  
 
8. The “special care” provision would not affect to  the authorities’ obligations under Articles 3.1 
and 15.1.  The authorities must always make its determination based on the objective examination of 
positive evidence in a fair, unbiased, and even-handed manner.  The determination may not be based 
on the method or manner favoring one particular interested party. 
 
Q3. The Panel understands that Canada is not arguing that a combined analysis of injury 
caused by dumped and subsidized imports is per se  inconsistent with the cited Agreements.  
Could the third parties comment on the view that, in the event the Panel finds a violation of any other provision of the relevant Agreements, the injury determination as a whole should be 
deemed inconsistent with both the AD and SCM Agreements? 
  
Answer
 
  WT/DS277/R 
 Page C-11 
 
 
 9. The provisions of Article 3 of the AD Agreemen t are corollary to the provisions of Article 15 
of the SCM Agreement.  Thus, if the Panel finds a violation of a provision of either Article 3 of the 
AD Agreement or Article 15 of the SCM Agreement, then the rationale of the violation is equally 
applicable to the corresponding provision in the other Agreement.  Q4. Could the third parties please address the distinctions they see, if any, between 
"finding", "evaluation" and "consideration" in the context of analysis of factors in a determination under Article 3 of the AD Agreement and/or Article 15 of the SCM Agreement. 
 
Answer
 
 
10. It is our view that the term “finding” means a decision with respect to an issue of fact or law 
supported by reasoned explanation of facts, whic h was properly established and evaluated in an 
unbiased and objective manner, in the context of th e AD Agreement and the SCM Agreement.  While 
the term “finding” does not appear in these Articles,  other provisions of these Agreements clarify the 
meaning of the term.  Article 12.2 of the AD Ag reement and Article 22.3 of the SCM Agreement 
provide that “each such notice shall set forth … in sufficient detail the findings and conclusions 
reached on all issues of fact and law considered mate rial by the investigating authorities”.  In this 
context, the panel in Mexico – HFCS stated, in finding that a Mexico’s decision is inconsistent the AD 
Agreement, “there was no explanation of the fact s and conclusions underlying Mexico's decision in 
this regard in the final notice”. 3  As indicated by that Panel, the AD Agreement requires that a finding 
must be supported by reasoned explanation of facts.  Article 6.6 of the AD Agreement and 
Article 12.5 of the SCM Agreement also provide that  the authorities shall satisfy themselves as to the 
“information . . . upon which their findings are based.”   Further, Article 17.6(i) of the AD Agreement 
provides that establishment of the facts must be proper and the evaluation of those facts must be unbiased and objective.  The term “finding” s hould be interpreted in these contexts.   
 
11. The panel in EC – Bed Linen (Article 21.5 – India)  provides a good explanation, to which we 
agree, of the meaning of the term “evaluation” in the context of Articles 3 and 15 of the AD and SCM Agreement.  The panel stated it means “the analysis  of data through placing it in context in terms of 
the particular evolution of the data pertaining to each  factor individually, as well as in relation to other 
factors examined”.
4  The ordinary meaning of the term “evaluation” is “a process of analysis and 
assessment requiring the exercise of judgement on the part of the investigating authority”.5  T h i s  
ordinary meaning then must be understood in the c ontext of Articles 3.1 and 15.1, which sets forth the 
overarching provisions for determining injury, a nd Articles 3.4 and 15.4, in which the term 
“evaluation” appears, as discussed in that case.   
12. It should be noted that evaluation of each fact or under Articles 3.4 and 15.4 must be disclosed 
and explained to interested parties in the final determination or its repor t.  The Appellate Body 
confirmed in EC – Pipe Fittings , stating:   
 
Our conclusion in that case regarding the ob ligations in Article 3.1 was premised on 
the notion that the  manner  in which the analysis of the injury factors and the results 
of the injury determination are to be disclosed  to interested parties and set forth in the 
                                                     
 
3 Mexico – Anti-Dumping Investigatio n of High Fructose Corn Syrup (HFCS) from the United States , 
WT/DS132/R (28 January 2000), the Panel Report, para. 7.198 
4  European Community – Anti-dumping Duties on Imports of Cotton-Type Bed Linen from India, 
Recourse to Article 21.5 of DSU by India , WT/DS141/RW (“ EC – Bed Linen (Article 21.5 – India)”) , the Panel 
Report, para. 6.162.  
5  Ibid. WT/DS277/R 
Page C-12  
 
 published documents is a matter regulat ed by other provisions of the  Anti-Dumping 
Agreement .
6   
13.  We agree with the panel in Thailand – H-Beams  with respect to the meaning of the 
term “consider”.  The panel stated:  
The Concise Oxford Dictionary  defines "consider" as, inter alia: "contemplate 
mentally, especially in order to reach a c onclusion"; "give attention to"; and "reckon 
with; take into account" .  We therefore do not read the textual term "consider" in 
Article 3.2 to require an explicit "finding"  or "determination" by the investigating 
authorities as to whether the increase in dumped imports is "significant".  While it 
would certainly be preferable for a Memb er explicitly to characterize whether any 
increase in imports as "significant", and to give a reasoned explanation of that characterization, we believe that the word  "significant" does not necessarily need to 
appear in the text of the relevant docum ent in order for the requirements of this 
provision to be fulfilled.  Neve rtheless, we consider that it must be apparent in the 
relevant documents in the record that the investigating authorities have given 
attention to and taken into account  whether there has been a significant increase in 
dumped imports, in absolute or relative terms.
7 
Q5. The Panel notes that Article 3.7 of the AD Agreement and Article 15.7 of the SCM 
Agreement provide that "In making a determinat ion regarding the existence of a threat of 
material injury, the authorities should consider, inter alia , such factors as:.." (emphasis added).  
In this context, could the third parties comment on the view that consideration of all the listed 
factors is not mandatory, and that the failure to co nsider at all, or to ad equately consider, one of 
the listed factors, is not fatal to the determination at issue before a Panel?  
Answer
 
 
14. The authorities have a normative duty and obligation to consider all factors listed in Article 3.7 of the AD Agreement and Article 15.7 of the SCM Agreement, as discussed in our oral 
statement at the third party session of the fi rst substantive meeting with the Panel on 
5 September 2003.  Please see paragraphs 9 through 16 of our oral statement for detailed discussion 
on this issue.  
 
Q6. Could the third parties please address what , in their view, is required to demonstrate 
consideration of the "trade effects" arising from  subsidies under Article 15.7(i)?  What would 
the third parties consider to be relevant trade effects that should be taken into account? 
 Answer
 
 15. In our view, trade effects in the context of  Article 15 of the SCM Agreement encompass the 
effects, caused by the subsidies, wh ich will lead to material injury to the domestic industry of another 
Member.  Subsidized imports would give effect for the domestic market of their like products in 
another Member in terms of volume as well as price.  As a result, domestic producers of such 
products would be affected.   
 
                                                     
 
 6 European Community – Anti-Dumping Duties on Malleab le Cast Iron Tube and Pipe Fittings from 
Brazil , WT/DS219/AB/R (22 July 2003), the Appellate Body Report, para. 159 (emphasis in original).  
 7 Thailand – Anti-dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-
Beams from Poland , WT/DS122/R (28 September 2000) the Panel Report, para.7.161 (emphasis added;  
footnote omitted).  WT/DS277/R 
 Page C-13 
 
 
 16. With regard to the volume of the subsidized  imports, it should be considered whether there 
has been a significant increase in s ubsidized imports because of the s ubsidies in question, either in 
absolute terms or relative to produc tion or consumption in the importing Member.  With regard to the 
effect of the subsidized imports on prices, it should be considered whether there has been a significant 
price undercutting by the subsidized imports because of the subsidies as compared with the price of a 
like product of the importing Member, or whether the e ffect of the subsidies is otherwise to depress 
prices to a significant degree or to prevent price in creases, which otherwise would have occurred, to a 
significant degree. 
 
17. To demonstrate trade effects set forth in Article 15.7(i), the authorities must collect all 
relevant evidence to the effects caused by subsidized imports above mentioned. 
 
__________ 
  
  