WORLD TRADE
ORGANIZATIONWT/DS219/AB/R
22 July 2003
(03-3920)
Original:  English
EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON MALLEABLE CAST
IRON TUBE OR PIPE FITTINGS FROM BRAZIL
AB-2003-2
Report of the Appellate BodyWT/DS219/AB/R
Page i
I. Introduc tion................................................................................................................. ................1
II. Arguments of the Participants  and the Third Particip ants ..........................................................4
A. Claims of Error by Brazil – Appellant........................................................................... 4
1. Devaluation of the Brazilian Real During the Period of Investigation:
Article VI:2 of the GATT 1994 and Article 1 of the  Anti-Dumping
Agreement .........................................................................................................4
2. Data for SG&A and Profits:  Article 2.2.2 of the Anti-Dumping
Agreement .........................................................................................................5
3. Cumulation:  Articles 3.2 and 3.3 of the Anti-Dumping Agreement .................6
4. Exhibit EC-12:  Articles 3.1, 3.4, and 17.6(i) of the Anti-Dumping
Agreement .........................................................................................................8
5. Disclosure of Information:  Articles 6.2 and 6.4 of the  Anti-Dumping
Agreement .........................................................................................................9
6. Implicit Analysis of the "Growth" Factor:  Article 3.4 of the  Anti-
Dumping Agreement .......................................................................................10
7. Causality:  Article 3.5 of the Anti-Dumping Agreement .................................10
B. Arguments of the European Communities – Appellee ................................................. 12
1. Devaluation of the Brazilian Real During the Period of Investigation:
Article VI:2 of the GATT 1994 and Article 1 of the Anti-Dumping
Agreement .......................................................................................................12
2. Data for SG&A and Profits:  Article 2.2.2 of the Anti-Dumping
Agreement .......................................................................................................14
3. Cumulation:  Articles 3.2 and 3.3 of the Anti-Dumping Agreement ...............15
4. Exhibit EC-12:  Articles 3.1, 3.4, and 17.6(i) of the Anti-Dumping
Agreement .......................................................................................................16
5. Disclosure of Information:  Articles 6.2 and 6.4 of the  Anti-Dumping
Agreement :......................................................................................................16
6. Implicit Analysis of the "Growth" Factor:  Article 3.4 of the  Anti-
Dumping Agreement : ......................................................................................17
7. Causality:  Article 3.5 of the Anti-Dumping Agreement .................................18
C. Arguments of the Third Participants............................................................................ 19
1. Japan ...............................................................................................................19
2. United States...................................................................................................20
III. Issues Raised in this Appeal ............................................................................................... ......22
IV. Devaluation of the Brazilian Real During the Period of Investigation:  Article VI:2 of
the GATT 1994 and Article 1 of the  Anti-Dumping Agreement ..............................................24
V. Data for SG&A and Profits:  Article 2.2.2 of the Anti-Dumping Agreement ...........................34
VI. Cumulation:  Articles 3.2 and 3.3 of the  Anti-Dumping Agreement ........................................41
VII. Exhibit EC-12:  Articles 3.1, 3.4, and 17.6(i) of the  Anti-Dumping Agreement ......................48
A. Article 17.6(i) of the  Anti-Dumping Agreement.......................................................... 49
B. Articles 3.1 and 3.4 of the  Anti-Dumping Agreement................................................. 52
VIII. Disclosure of Information:  Articles 6.2 and 6.4 of the  Anti-Dumping Agreement .................54
IX. Implicit Analysis of the "Growth" Factor:  Article 3.4 of the  Anti-Dumping Agreement ........59WT/DS219/AB/R
Page ii
X. Causality:  Article 3.5 of the  Anti-Dumping Agreement ..........................................................64
A. " Known Factors Other Than the Dumped Imports Which at the Same Time are
Injuring the Domestic Industry ".................................................................................. 64
B. Non-Attribution............................................................................................................ 70
1. European Communities' Pr ocedural Objection...............................................71
2. Merits of Br azil's Claim..................................................................................72
XI. Findings and Conclusions.................................................................................................... .....78
ANNEX 1: Notification of an Appeal by Brazil under paragraph 4 of Article 16 of the
Understanding on Rules and Procedures Governing the Settlement of
DisputesWT/DS219/AB/R
Page iii
TABLE OF CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation of Case
EC – Tube and Pipe European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or
Pipe Fittings from Brazil, WT/DS219/R, 7 March 2003 (the "Panel Report")
EC – Bed Linen Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India , WT/DS141/AB/R, adopted 12 March 2001
EC – Bed Linen
(Article 21.5 – India) Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU  by
India , WT/DS141/AB/RW, adopted 24 April 2003
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from
Turkey , WT/DS211/R, adopted 1 October 2002
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey Portland
Cement from Mexico , WT/DS156/R, adopted 17 November 2000, DSR 2000:XI,
5295
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998,
DSR 1998:I, 9
India – Quantitative Restrictions Appellate Body Report, India – Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products , WT/DS90/AB/R, adopted
22 September 1999, DSR 1999:IV, 1763
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/AB/R,
WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, 3
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/AB/R,
adopted 5 April 2001
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-
Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 23 August 2001
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia , WT/DS177/AB/R,
WT/DS178/AB/R, adopted 16 May 2001
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on Imports
of Wheat Gluten from the European Communities , WT/DS166/AB/R, adopted
19 January 2001WT/DS219/AB/R
Page 1
WORLD TRADE ORGANIZATION
APPELLATE BODY
European Communities – Anti-Dumping Duties
on Malleable Cast Iron Tube or Pipe Fittings
from Brazil
Brazil,  Appellant
European Communities,  Appellee
Chile,  Third Participant
Japan,  Third Participant
Mexico,  Third Participant
United States,  Third ParticipantAB-2003-2
Present:Ganesan, Presiding Member
Baptista, Member
Sacerdoti, Member
I. Introduction
1. Brazil appeals certain issues of law and legal interpretations in the Panel Report,  European
Communities – Anti-Dumping Duties on Malleable Cast  Iron Tube or Pipe Fittings from Brazil  (the
"Panel Report").1  The Panel was established to consider a complaint by Brazil concerning the
consistency with the  Agreement on Implementation of Article VI  of the General Agreement on Tariffs
and Trade 1994  (the " Anti-Dumping Agreement ") and the General Agreement on Tariffs and
Trade 1994  (the "GATT 1994") of the imposition of anti-dumping duties by the European
Communities on imports of malleable cast iron tube or pipe fittings from Brazil.
2. On 29 May 1999, the European Communities announced the initiation of an anti-dumping
investigation on the imports of malleable cast iron tube or pipe fittings originating in Brazil and sevenother countries.  One Brazilian producer (Indústria de Fundição Tupy Ltda.) was subject to the anti-dumping investigation.
2  The European Communities imposed provisional anti-dumping duties on the
                                                     
1WT/DS219/R, 7 March 2003.
2Panel Report, para. 2.2.WT/DS219/AB/R
Page 2
imports on 28 February 20003 and definitive anti-dumping duties on 11 August 2000.4  O n
21 December 2000, Brazil requested consultations with the European Communities concerning theimposition of anti-dumping duties on its exports of malleable cast iron tube or pipe fittings to theEuropean Communities.
5  After consultations failed to resolve the dispute, Brazil requested the
establishment of a panel on 7 June 2001 to examine the matter.6  The factual aspects of this dispute
are set out in greater detail in the Panel Report.7
3. Before the Panel, Brazil claimed that the European Communities had acted inconsistently
with Article VI of the GATT 1994 and with a number of provisions of the  Anti-Dumping Agreement ,
specifically, Articles 1, 2.2, 2.4, 2.4.1, 2.4.2, 3.1, 3.2, 3.3, 3.4, 3.5, 6.2, 6.4, 6.6, 6.9, 9.3, 11.1, 11.2,12.2, 12.2.2, and 15.
8
4. In the Panel Report, circulated to Members of the World Trade Organization (the "WTO") on
7 March 2003, the Panel found that the European Communities had acted inconsistently with itsobligations under:
(a) Article 2.4.2 of the  Anti-Dumping Agreement  in "zeroing" negative dumping
margins in its dumping determination;  and
(b) Articles 12.2 and 12.2.2 of the  Anti-Dumping Agreement  in that it is not directly
discernible from the published Provisional or Definitive Regulation that the EuropeanCommunities had addressed or explained the lack of significance of certain injuryfactors listed in Article 3.4 of the  Anti-Dumping Agreement .
9
The Panel rejected all other claims raised by Brazil against the anti-dumping measure.
                                                     
3Commission Regulation (EC) No 449/2000 of 28 February 2000, imposing a provisional anti-dumping
duty on imports of malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic, Japan, thePeople's Republic of China, the Republic of Korea and Thailand and accepting an undertaking offered by anexporting producer in the Czech Republic, published in the Official Journal of the European Communities,29 February 2000, L-series, No. 55 ("Provisional Regulation").
4Council Regulation (EC) No 1784/2000 of 11 August 2000, imposing a definitive anti-dumping duty
and collecting definitively the provisional duty imposed on imports of certain malleable cast iron tube or pipefittings originating in Brazil, the Czech Republic, Japan, the People's Republic of China, the Republic of Korea
and Thailand, published in the Official Journal of the European Communities, 18 August 2000, L-series,
No. 208 ("Definitive Regulation").
5WT/DS219/1, 9 January 2001.
6WT/DS219/2, 8 June 2001.
7Panel Report, paras. 2.1-2.7.
8Ibid., para. 3.1 and footnote 15 thereto.
9Ibid., para. 8.1(a).WT/DS219/AB/R
Page 3
5. The Panel accordingly recommended that "the Dispute Settlement Body request the European
Communities to bring its measure into conformity with its obligations under the   Anti-Dumping
Agreement. "  10
6. On 23 April 2003, Brazil notified the Dispute Settlement Body of its intention to appeal
certain issues of law covered in the Panel Report and certain legal interpretations developed by the
Panel, pursuant to paragraph 4 of Article 16 of the  Understanding on Rules and Procedures
Governing the Settlement of Disputes  (the "DSU"), and filed a Notice of Appeal pursuant to Rule 20
of the  Working Procedures for Appellate Review  (the " Working Procedures ").11  On 5 May 2003,
Brazil filed an appellant's submission.12  Stated briefly, Brazil alleged on appeal that the Panel had
erred in finding that the imposition of anti-dumping duties by the European Communities was notinconsistent with Article VI:2 of the GATT 1994 and Articles 1, 2.2.2, 3.1, 3.2, 3.3, 3.4, 3.5, 6.2,or 6.4 of the  Anti-Dumping Agreement .  Brazil additionally alleged that the Panel had acted
inconsistently with Article 17.6(i) of the  Anti-Dumping Agreement , with respect to the admission of
Exhibit EC-12, by failing to assess whether the inves tigating authority's establishment of the facts was
proper.  On 19 May 2003, the European Communities filed an appellee's submission, requesting thatthe Appellate Body reject all of Brazil's claims on appeal.
13  On the same day, Japan and the United
States each filed a third participant's submission14, and Chile and Mexico notified their intention to
appear and make statements at the oral hearing as third participants.15
7. The oral hearing in this appeal was held on 10 June 2003.  The participants and third
participant Japan presented oral statements.  The participants and all the third participants alsoresponded to questions put to them by the Members of the Division hearing the appeal.
                                                     
10Panel Report, para. 8.8.
11The issues appealed by Brazil are set forth in its Notice of Appeal, WT/DS219/7, 29 April 2003,
which is attached as Annex 1 to this Report.
12Pursuant to Rule 21(1) of the  Working Procedures .
13Pursuant to Rule 22(1) of the  Working Procedures .
14Pursuant to Rule 24(1) of the  Working Procedures .
15Pursuant to Rule 24(2) of the  Working Procedures .WT/DS219/AB/R
Page 4
II. Arguments of the Participants and the Third Participants
A. Claims of Error by Brazil – Appellant
1. Devaluation of the Brazilian Real During the Period of Investigation:
Article VI:2 of the GATT 1994 and Article 1 of the Anti-Dumping Agreement
8. Brazil appeals the Panel's finding that the European Commission was neither required nor
permitted by Article VI:2 of the GATT 1994 or the  Anti-Dumping Agreement  to base its dumping
determination solely on export price data from the la st quarter of the period of investigation ("POI")—
that is, data subsequent to the devaluation of the Brazilian Real that occurred in January 1999.
9. Brazil maintains that the reason for using a POI in a dumping determination is to acquire a
finite data set relating to a recent historical period, which can be extrapolated to make a "reasonableassumption" about the future.  According to Brazil, the 42 percent devaluation of the Brazilian Real
constituted a fundamental and lasting change in the trading conditions of Brazilian exports, and the
magnitude of the devaluation was greater than the dumping margin of 34.8 percent.  The dumpingwas totally eliminated by the devaluation, and if the data subsequent to devaluation had been used, no"reasonable assumption" could be made that dumping would occur in the future.
10. According to Brazil, the Panel erred in  finding that Article 2.4.2 of the  Anti-Dumping
Agreement  requires investigating authorities to use  all  the data from throughout the POI.  Brazil
explains that the first sentence of Article 2.4.2 provides that dumping margins are  normally  to be
established using the average of prices of  all  export transactions.  However, the second sentence of
Article 2.4.2 expressly recognizes that situations  may arise where this methodology would not be
appropriate, for example, where a pattern of export prices differs significantly among different  time
periods .  Data from the POI show that, although the de valuation did not affect the normal value of
Brazilian exports, the patterns of export prices in Brazilian Real were completely different in theperiods before and after the devaluation.  Therefore, pursuant to Article 2.4.2, the EuropeanCommission was entitled to use in its dumping determination only the export price data relating to thelast three months of the POI, being the period following the devaluation.
11. Moreover, Brazil argues that the European Commission had an obligation, under Article VI:2
of the GATT 1994, to make its dumping determination in accordance with the second sentence ofArticle 2.4.2.  Article VI:2 allows a WTO Member to levy anti-dumping duties  only  "[i]n order toWT/DS219/AB/R
Page 5
offset or prevent dumping".  To satisfy this fundamental condition, Brazil argues, the European
Commission was required to make a " reasonable assumption  for the future" from data collected in
the POI in order to "anticipate the level of anti-dumping duty that [was] strictly necessary to preventdumping in the future."
 16  The European Commission was therefore required to choose the
methodology under Article 2.4.2 that best fulfilled this obligation, which is the methodology
prescribed in the second sentence of Article 2.4.2, in particular a comparison of the weighted averagenormal value (based on data from the entire POI) with  the prices of individual export transactions that
took place in the POI after the devaluation.  According to Brazil, in failing to adopt this methodologyand in imposing duties despite the impact of the devaluation, the European Communities actedinconsistently with Article VI:2 of the GATT 1994 and, consequently, Article 1 of the  Anti-Dumping
Agreement .
12. Brazil considers that this conclusion is not affected by the Panel's observation that the  Anti-
Dumping Agreement  provides mechanisms to address situations where dumping decreases or
terminates following an affirmative determination of dumping (through refunds under Article 9.3 and
reviews under Article 11), because the availability of corrective mechanisms does not justify theimposition of anti-dumping duties in excess of what is necessary to prevent dumping.  According toBrazil, corrective mechanisms are intended to take account of fundamental changes taking place after  the investigation, but as the devaluation occurred  during  the POI, the authorities were obliged
to take it into account in a proper way at the time of the initial dumping determination.
13. Brazil therefore requests the Appellate Body to reverse the Panel's findings on this issue and
to find instead that the European Communities acted inconsistently with its obligations under
Article VI:2 of the GATT 1994 and Article 1 of the  Anti-Dumping Agreement .
2. Data for SG&A and Profits:  Article 2.2.2 of the Anti-Dumping Agreement
14. Brazil appeals the Panel's finding that the chapeau of Article 2.2.2 of the  Anti-Dumping
Agreement  compels investigating authorities to use actu al administrative, selling and general costs
("SG&A") and profit data from  all  sales in the ordinary course of trade, including those sales found
under Article 2.2 to be low-volume sales.
                                                     
16Brazil's appellant's submission, para. 58. (original emphasis)WT/DS219/AB/R
Page 6
15. Brazil submits that the chapeau of Article 2.2.2 of the  Anti-Dumping Agreement  does not
expressly require that  all  actual data be used, or that only certain data be excluded from the
determination of SG&A and profits.  Brazil further argues that the Panel's reading of Article 2.2.2,which allows authorities to include sales that were found to be "unrepresentative" in constructing the
normal value, nullifies the purpose of Article 2.2.
17  According to Brazil, interpreting one treaty
provision so as to nullify the effects of another provision is inconsistent with the rules of treatyinterpretation under the  Vienna Convention on the Law of Treaties .
18  Article 2.2 imposes on
Members an obligation to construct normal value when the product concerned is sold in the domesticmarket in low volumes deemed not to "permit a proper comparison" with the export price.  The
purpose of this provision, in Brazil's view, is to avoid basing normal value on prices that may notrepresent normal trading conditions.  Brazil submits an example seeking to demonstrate that thispurpose is undermined by the Panel's interpretation of the chapeau of Article 2.2.2.  Under thisexample, according to Brazil, if data pertaining to low-volume sales are included in the calculation of
SG&A and profits under Article 2.2.2, the same result is reached as if "normal value" (that is, selling
prices in the domestic market) had been used, and there was no need for "constructing" a normalvalue.  The Panel's interpretation of the chapeau of Article 2.2.2 is thus contrary to the customaryrules of treaty interpretation.
16. Brazil therefore requests the Appellate Body to reverse the Panel's finding that the chapeau of
Article 2.2.2 compels investigating authorities to use actual  SG&A and profit data from  all  sales in
the ordinary course of trade, including those sales found under Article 2.2 to be of insufficientquantities to permit a proper comparison.  Brazil requests that the Appellate Body find instead that the
chapeau of Article 2.2.2 requires the exclusion of actual data from sales found under Article 2.2 to be
of insufficient quantities to permit a proper comparison, and therefore, that the EuropeanCommunities acted inconsistently with this obligation.
3. Cumulation:  Articles 3.2 and 3.3 of the Anti-Dumping Agreement
17. Brazil appeals the Panel's finding that country-by-country analyses of volumes and prices
under Article 3.2 of the  Anti-Dumping Agreement  are not pre-conditions to the cumulative
assessment of the effects of dumped imports under Article 3.3.
18. In Brazil's view, Article 3.2 requires investigating authorities to consider, on a country-by-
country basis , whether there has been an absolute or relative increase in dumped imports and whether
                                                     
17Brazil's appellant's submission, para. 83.
18Done at Vienna, 23 May 1969, 1155 U.N.T.S. 331;  8 International Legal Materials 679.WT/DS219/AB/R
Page 7
the prices of those imports are lower than the actual or target prices of the domestic industry.  Only
where these analyses identify the imports from a  particular  country as a likely source of negative
effects on the domestic industry is cumulation of that country's imports permitted under Article 3.3.Brazil submits that if Article 3.3 were intended to "derogate" from the obligation to analyze volumes
and prices on a country-by-country basis under Article 3.2, this would have been clearly mentioned in
Article 3.3.
 19  Moreover, according to Brazil, the requirement of a vague "conditions of competition"
analysis under Article 3.3 cannot replace the precise analyses of prices and volumes required underArticle 3.2.
19. Brazil argues that Article 3.2 requires an analysis of the "factors" that may be causing injury
(namely, the volumes and prices of the dumped imports), whereas Article 3.3 allows cumulation ofthe "effects" of the dumped imports (and not the imports themselves).  These "effects" are foundthrough recourse to Article 3.4.  Thus, according to Brazil, the logical order of Article 3 requires thatinvestigating authorities first assess the factors that  may cause injury (Article 3.2), then whether the
conditions for cumulation are fulfilled (Article 3.3), and finally the impact of the dumped imports on
the domestic industry (Article 3.4).  Interpreting Article 3.3 to allow cumulation of "factors" causinginjury would involve reading into the  Anti-Dumping Agreement  words that are not there, contrary to
the rules of interpretation under public international law.
20. Brazil submits that the Panel's interpretation of Article 3 would lead to absurd results and
would undermine the requirements of Article 3.  In particular, the Panel's interpretation would allowinjury to be attributed to sources that are not actually causing injury.  For example, where imports
from countries X and Y are being dumped, but the factors causing injury are the rapid increase in
market share and the low price of imports from c ountry Y, anti-dumping duties would be imposed on
both countries, even though the imports from country X are not causing injury.  In addition, thePanel's interpretation would undermine the requirement in Article 3.1 that the determination of injurybe based on an "objective examination", because it makes a finding of injury more likely and rendersa country liable to pay anti-dumping duties when its dumped imports cannot be said to be causinginjury.  Brazil submits that such results are contrary to "basic principles of fundamental fairness."
 20
21. Brazil therefore requests the Appellate Body to reverse the Panel's finding that country-
specific analyses of volumes and prices under Article 3.2 are not pre-conditions to cumulation underArticle 3.3, and to find that the European Communities acted inconsistently with Articles 3.2 and 3.3
of the  Anti-Dumping Agreement .
                                                     
19Brazil's appellant's submission, para. 105.
20Ibid., para. 113.WT/DS219/AB/R
Page 8
4. Exhibit EC-12:  Articles 3.1, 3.4, and 17.6(i) of the Anti-Dumping Agreement
22. Brazil appeals the Panel's finding that an internal note for the investigation file, containing an
analysis of certain of the injury factors listed in Article 3.4 and submitted by the EuropeanCommunities to the Panel as Exhibit EC-12, was properly before the Panel.  First, Brazil argues thatthis finding is based on an erroneous legal interpretation of Articles 3.1 and 3.4.  Second, Brazilargues that the Panel failed to comply with its obligations under  Article 17.6(i) of the  Anti-Dumping
Agreement  in not ensuring that Exhibit EC-12 was made  during  the investigation.
21
23. According to Brazil, Article 3.4 requires that there be a "contemporaneous and verifiable
indication that Exhibit EC-12 existed during the investigation", and this requirement was not met.22
In the absence of such a requirement, Brazil argues, Article 3.4 would be deprived of its meaning
because an investigating authority could make a finding of injury on the basis of an incomplete
analysis.  Citing Article 3.1, Brazil submits further that the "evidence contained in Exhibit EC-12"cannot be regarded as "positive evidence" because its contemporaneous character is not establishedand is "questionable"
23, and the evaluation in Exhibit EC-12 cannot be regarded as "objective"
because it is not established that it was actually made during the investigation.24
24. In relation to the Panel's alleged failure to comply with Article 17.6(i), Brazil argues that the
Panel improperly exercised its discretion in basing its findings "exclusively on a mere assertion" fromthe European Communities that Exhibit EC-12 was made during the investigation, and on anunsupported presumption of good faith, rather than on positive facts.
25  According to Brazil, the
obligation on the European Communities to present evidence could not be substituted by a
                                                     
21In its Notice of Appeal, Brazil also claimed that the Panel had breached its obligations under
Article 11 of the DSU because of its reliance on the presum ption of good faith.  (Notice of Appeal, p. 3, attached
as Annex 1 to this Report)  During the oral hearing, however, Brazil clarified that it was not pursuing its claim
under Article 11. (Brazil's response to questioning at the oral hearing)  Brazil also states that, to the extent thatthe Panel failed to examine properly the contemporaneous character of Exhibit EC-12, the Panel did notexamine the matter based upon "the facts made available in conformity with appropriate domestic procedures tothe authorities of the importing Member", in accordance with Article 17.5(ii) of the Anti-Dumping Agreement.
22Brazil's appellant's submission, para. 124.  See also, ibid., para. 125, quoting Panel Report, Egypt –
Steel Rebar , para. 7.49.
23Ibid., para. 130.
24Ibid., paras. 129-130, quoting Appellate Body Report, US – Hot-Rolled Steel , paras. 192-193.
25Ibid., para. 146.WT/DS219/AB/R
Page 9
presumption of good faith.  The principle of good faith, as mentioned in Article 3.10 of the DSU,
cannot be regarded as an evidentiary principle.  Rather, it relates to due process and requires parties tocooperate in dispute settlement proceedings, including by placing material evidence before thetribunal.  Finally, Brazil argues that the confidentiality of information cannot be an obstacle to a
proper examination of the facts as required under Article 17.6(i), especially as Article 18.2 of the
DSU provides a specific mechanism to protect such information.
25. Brazil therefore requests the Appellate Body to reverse the Panel's finding that Exhibit EC-12
was properly before it and consequently find that the European Communities acted inconsistently withArticles 3.1 and 3.4 of the  Anti-Dumping Agreement .
5. Disclosure of Information:  Articles 6.2 and 6.4 of the  Anti-Dumping
Agreement
26. Brazil appeals the Panel's finding that the European Communities was not required under
Articles 6.2 and 6.4 of the  Anti-Dumping Agreement  to disclose to the interested parties, during the
anti-dumping investigation, the information on certain injury factors contained in Exhibit EC-12,because the European Commission had determined that the data contained in Exhibit EC-12 were inline with other data (which had been disclosed) and did not add any value to its analysis of the injury
factors listed in Article 3.4 of the  Anti-Dumping Agreement .
27. According to Brazil, when making an injury  determination, investigating authorities must
assess the role, relevance, and relative weight of at least those factors listed in Article 3.4.  Therefore,the findings of investigating authorities on each of these factors are necessarily "relevant" within themeaning of Article 6.4.  Brazil submits that it cannot be left to investigating authorities to decide, ontheir own, which information is "relevant" under Article 6.4 and relates to the defence of parties'interests under Article 6.2.  Brazil further argues that Article 6 is a "fundamental due processprovision" seeking to ensure that interested parties can defend their interests  during  the investigation
process itself, rather than be informed of relevant information only  after  the investigation is
completed and its result reflected in the definitive determination, as required under Article 12.2.
26   In
Brazil's view, the obligations set out in Articles 6.2 and 12.2 are distinct obligations relating todifferent periods of an anti-dumping investigation.
                                                     
26Brazil's statement at the oral hearing.WT/DS219/AB/R
Page 10
28. Brazil therefore requests the Appellate Body to reverse the Panel's finding that the European
Communities did not have to disclose the information contained in Exhibit EC-12 relating to theevaluation of certain injury factors listed in Article 3.4, and to find that the European Communitiesacted inconsistently with Articles 6.2 and 6.4 of the  Anti-Dumping Agreement .
6. Implicit Analysis of the "Growth" Factor:  Article 3.4 of the  Anti-Dumping
Agreement
29. Brazil appeals the Panel's finding that, in evaluating other injury factors, the European
Commission had implicitly addressed the "growth" factor, and thereby did not act inconsistently with
Article 3.4 of the  Anti-Dumping Agreement .
30. According to Brazil, the evaluation of each injury  factor listed in Article 3.4 must be explicit
and it cannot simply be deduced from or found to be implicit in the evaluation of other factors.  ThePanel's contrary interpretation, in Brazil's view, is inconsistent with the principle of effectiveness asrecognized by the Appellate Body, because it nullifies the obligation under Article 3.4 to evaluateeach of the factors listed in that provision.  The interpretation is also inconsistent with the requirementthat it is the  investigating authority  (rather than the Panel) that must evaluate each factor, because
Article 17.6(i) limits the Panel's role to assessing whether the authorities properly established the facts
and evaluated them in an unbiased and objective manner.   
31. As a result, Brazil requests that the Appellate Body reverse the Panel's finding that the European
Communities did not act inconsistently with Article 3.4 of the  Anti-Dumping Agreement  in its
treatment of the factor of "growth".
7. Causality:  Article 3.5 of the Anti-Dumping Agreement
32. Brazil claims that the Panel erred in concluding that the European Communities did not act
inconsistently with Article 3.5 of the  Anti-Dumping Agreement  in conducting its causality analysis.
First, Brazil appeals the Panel's finding that a factor "known" to the European Commission in thecontext of its dumping and injury analyses was not a factor "known" to it in the context of its causalityanalysis.  Second, Brazil appeals the Panel's finding that the European Commission did notimproperly attribute to the dumped imports injury to the domestic industry caused by other factors,even though it analyzed the effects of those other factors only individually and not collectively.WT/DS219/AB/R
Page 11
33. In relation to other "known" factors under Article 3.5, Brazil argues that the relatively high
cost of production of the European Communities industry compared to that of the Brazilian industrywas a causal factor "known" to the European Commission in its causality analysis.
27  According to
Brazil, this difference in cost of production is reflected in the "margins analysis";  that is, in the fact
that the dumping margin found for the Brazilian exporter was 34.8 percent, whereas the underselling
margin was 82.06 percent of the export price.  Brazil argues that this cost disadvantage was known tothe investigating authority because the European Commission itself had calculated the dumping andunderselling margins and had full information on the production costs of the different producers.Furthermore, the Brazilian exporter had raised this issue in the context of the dumping and injurydeterminations.  As the elimination of dumping by the Brazilian producer would not havesubstantially improved the condition of the European Communities industry, Brazil submits that asignificant part, if not all, of the injury could have been caused by the domestic industry's high cost ofproduction.  The European Commission was therefore under an obligation to conduct a non-
attribution analysis with respect to this factor.
34. Brazil maintains that the European Commission was obliged to examine this factor even
though the Brazilian producer did not expressly raise it as a causal factor.  In Brazil's view, a textualinterpretation of Article 3.5 shows that an investigating authority cannot limit itself to evaluating onlythose factors that were specifically raised in the context of the causality analysis.  Article 3.5 requiresthat investigating authorities examine "all relevant  evidence before the authorities" and that they " also
examine  any known factors  other than the dumped imports".  Finally, Brazil argues that the Spanish
version of Article 3.5 requires the authorities to examine " cualesquiera  otros factores de que  tengan
conocimiento ", making it clear that the authorities must examine any factor known to them, regardless
of whether such factor was raised by an interested party.
35. In relation to the collective analysis of other known factors under Article 3.5, Brazil argues
that the European Commission's methodology in this case involved an evaluation of causal factors individually , but it did not involve an evaluation of their collective impact.  Brazil challenges the
application of this methodology to this case on the basis that it deprives Article 3.5 of its aim toensure that other causal factors are not themselves the cause of the injury found.  Although individualfactors may each have an insignificant effect on injury, multiple insignificant factors may together
                                                     
27Brazil's response to questioning at the oral hearing.  In Brazil's appellant's submission, it described
the relevant "factor" in various ways, such as "margins analysis", the Brazilian exporter's "comparative
advantage", and the Brazilian exporter's "cost efficiency". (Brazil's appellant's submission, paras. 181, 184, 198,
199, and 204)WT/DS219/AB/R
Page 12
contribute significantly to injury.  A methodology that assesses other injury factors only individually
does not address the possibility that such factors may collectively "sever the causal link between thedumping and the injury."
 28  According to Brazil, in examining each known factor only individually,
an investigating authority automati cally attributes to the dumped imports the injurious effects of all
the other known factors.  As such, the European Co mmission in this investigation failed to identify,
isolate, and analyze the effects of such factors as required by Article 3.5 and the Appellate Body'sdecision in  US – Hot-Rolled Steel .
29  Finally, Brazil claims that the individual factor analysis
employed in this case may lead to the absurd result that the greater the number of causal factors, theless likely those factors will be found to constitute a significant cause of injury, regardless of theircollective effect.
36. Brazil therefore requests the Appellate Body to reverse the Panel's findings that (a) the cost of
production differential between the European Communities industry and the Brazilian exporter wasnot a "known" factor other than dumped imports  that the European Commission was required to
examine;  and (b) the non-attribution obligation under Article 3.5 did not require in this case an
examination of the collective effects of other causal factors.  Brazil consequently requests theAppellate Body to find that the European Communities acted inconsistently with its obligations underArticle 3.5 of the  Anti-Dumping Agreement .
B. Arguments of the European Communities – Appellee
1. Devaluation of the Brazilian Real During the Period of Investigation:
Article VI:2 of the GATT 1994 and Article 1 of the Anti-Dumping Agreement
37. The European Communities agrees with the Panel that the methodologies specified in the first
sentence of Article 2.4.2 of the  Anti-Dumping Agreement  "would seem to require, in general, that
data  throughout  the entire investigation period would necessarily consistently be taken into
account."  30  According to the European Communities, the standards of objective and unbiased action
in determining the existence of dumping and the dum ping margin are implicit in the specific rules of
Article 2 of the  Anti-Dumping Agreement , because if these standards did not exist the rules would be
rendered ineffective.  The European Communities ma intains that its system assures objectivity by
                                                     
28Brazil's statement at the oral hearing.
29Appellate Body Report, US – Hot-Rolled Steel , para. 228.
30Panel Report, para. 7.104. (original emphasis)WT/DS219/AB/R
Page 13
using, in the determination of injurious dumping and in the determination of the definitive dumping
margin, all data pertaining to a sufficiently lengthy period, which is applied on a regular basis in anti-dumping investigations.
38. In contrast, according to the European Communities, Brazil's notion of a "reasonable
assumption for the future" is inherently vague and introduces into the  Anti-Dumping Agreement  an
element of subjectivity on the part of the investigating authority.  The European Communities states,furthermore, that there was no guarantee that the Brazilian producer would maintain the same pricing
policy in the immediate aftermath of the devaluation.  It also points out that the  Anti-Dumping
Agreement  has a provision for addressing exchange rate movements (Article 2.4.1), thereby
suggesting that the proper response to currency devaluation is not the exclusion of certain data fromthe POI.
39. The European Communities, citing the Appellate Body Report in  EC – Bed Linen
31, argues
that nothing in Article 2.4.2 indicates that an investigating authority may select among the export
transactions within the POI.  The second sentence of Article 2.4.2, in the European Communities'
view, specifically addresses "targeted dumping", meaning dumping concentrated in sales to certainregions, customers, or time periods.  The European Communities therefore submits that this sentencedoes not allow an investigating authority to select transactions within the POI on the basis of a"reasonable assumption for the future".  Furthermor e, investigating authorities are not required to
adopt any particular methodology under Article 2.4.2.  Rather, in the European Communities' view,investigating authorities should in principle use on e of the two methodologies in the first sentence.
They may resort to the methodology in the second sentence only when certain circumstances
mentioned therein are present, which was not the case in this anti-dumping investigation.
40. In response to Brazil's arguments that the mechanisms provided by the  Anti-Dumping
Agreement  for refunds and reviews operate only in relati on to events occurring after the POI, the
European Communities contends that the corrective mechanisms would also operate in relation tochanges of an "enduring" character that occur during the POI.
                                                     
31Appellate Body Report,  EC – Bed Linen , para. 55.WT/DS219/AB/R
Page 14
2. Data for SG&A and Profits:  Article 2.2.2 of the  Anti-Dumping Agreement
41. The European Communities argues that Brazil's interpretation of Articles 2.2 and 2.2.2 of the
 Anti-Dumping Agreement  is incorrect.  The text of Article 2.2 separately identifies "low-volume"
sales and sales not made "in the ordinary course of trade", thereby distinguishing the two types of
sales.  The chapeau of Article 2.2.2, however, expressly excludes data relating to sales not made "inthe ordinary course of trade", but makes no mention of data relating to low-volume sales, indicatingthat it places no restriction on the inclusion of such sales.  Similarly, the European Communities statesthat sub-paragraphs (i) and (ii) of Article 2.2.2, which relate to the construction of normal value, donot mention the exclusion of data relating to low-volume sales.
42. The European Communities argues that there is a rational explanation for excluding non-
representative sales from a normal value based on sale  prices , while at the same time including them
in a normal value that is  constructed .  Typically, the dumping margin for a product is calculated by
determining a weighted average of the dumping margins for different versions of the like product onthe basis of the volume and the price of  export  sales.  If the domestic sales volume for a particular
version is small, there is a greater risk of atypical prices affecting the calculation, because prices fromthose low-volume sales will be weighted according to the  export  sales of the product rather than the
domestic sales.  In contrast, the relative volume of  domestic  sales (in the exporting country) of
different versions of a like product is taken into account in the construction of normal value becauseSG&A and profit data from all versions of the like product are weight-averaged according to domestic
sales.  Thus, the fact that a small volume of one version of the product is sold at atypical prices will
have a correspondingly small effect on the profit margin used in constructing normal value.  TheEuropean Communities argues that this rationale for the different treatment of low-volume sales underArticles 2.2 and 2.2.2 is illustrated by the present case, where the effect of including the data inquestion would be to alter the profit margin, and therefore the dumping margin, by only one
hundredth of one percent.
43. The European Communities concedes that, in the particular set of circumstances of Brazil's
example, (involving only one product type that is sold almost entirely for export, with only a low-
volume quantity being sold, profitably, in the domestic market), the price resulting from a constructed
normal value, based on the Panel's interpretation, would be the same as if the price had been derived
from domestic sales originally rejected as not pe rmitting a "proper comparison".  However, the
European Communities submits that this example does not show that the Panel's interpretation rendersArticle 2.2 ineffective.  According to the European  Communities, the circumstances posited by Brazil
are somewhat unusual.  The European Communities states that, in most cases (such as the presentWT/DS219/AB/R
Page 15
case), the problem of arriving at the same price through constructed value as through reliance on low-
volume domestic sales prices would not arise.
44. Finally, the European Communities emphasizes that the inclusion of actual data from low-
volume sales entails no inherent bias either for or  against the exporter.  In fact, according to the
European Communities, Brazil's interpretation seems to imply that an investigating authority could
pick and choose among the data collected, which would introduce a subjective element into the anti-dumping procedure, contrary to the objectivity intended under the  Anti-Dumping Agreement .
3. Cumulation:  Articles 3.2 and 3.3 of the  Anti-Dumping Agreement
45. The European Communities argues that the ordinary meaning of the terms of Article 3.3 of
the  Anti-Dumping Agreement  in their context indicates that volumes and prices under Article 3.2
may be cumulatively assessed.  The requirement under Article 3.3 of a calculation of individual
countries' export volumes to establish that they are "not negligible" indicates, in the EuropeanCommunities' view, that there is no requirement that investigating authorities consider whetherimports have increased from each individual country before conducting a cumulative assessment.  TheEuropean Communities submits that the obligation to consider prices and volume in accordance with
Article 3.2 still exists, although Article 3.3 modifies this rule to permit their consideration on acumulated, rather than on a country-by-country, basis.
46. The European Communities argues that a proper consideration of the object and purpose of
Article 3.3 demonstrates that it must provide for the cumulative assessment of volume and prices
because it is precisely the cumulated effects of volume and prices with which domestic producers are
confronted on the domestic market.  If an investigating authority had to establish that imports fromeach country were causing injury, cumulation under Article 3.3 would be redundant.
32  In response to
Brazil's example demonstrating that failure to carry out a country-by-country consideration underArticle 3.2 would inappropriately attribute injury, the European Communities argues that a country(such as country X in Brazil's example) may be both a "victim" and a "cause" of injury.
33
47. The European Communities challenges Brazil's notion that "effects" and "factors" are used in
Article 3 of the  Anti-Dumping Agreement  as "terms of art", or terms having precise and different
meanings.34  The European Communities notes that the last sentence of Article 3.4 refers to the
"effects" also as "factors", and Articles 3.1 and 3.4 refer to these effects collectively as the "impact".
                                                     
32European Communities' response to questioning at the oral hearing.
33European Communities' appellee's submission, para. 90.
34Ibid., paras. 81 and 83.WT/DS219/AB/R
Page 16
Articles 3.1 and 3.2 also identify the "effect" of the dumped imports on prices as the second of two
topics for investigating authorities to consider.  The European Communities acknowledges that thefirst of these topics is described as "the volume of the dumped imports", with no explicit mention ofeffects.  However, the European Communities argues, because Article 3.5 refers to "the effects of
dumping, as set forth in paragraphs 2 and 4", it would be a "strained interpretation" of Article 3.5 to
read this as referring only to the price effects under Article 3.2.
35
4. Exhibit EC-12:  Articles 3.1, 3.4, and 17.6(i) of the Anti-Dumping Agreement
48. The European Communities contends that no rule of evidence exists in the WTO that
precludes panels from accepting as evidence a document that was produced during an anti-dumpinginvestigation unless accompanied by a "contemporaneous and verifiable written indication" that it
actually existed during the investigation.  Accordin g to the European Communities, the requirement
of "positive evidence" in Article 3.1 "is not a rule  governing the evidence that panels may take into
account."
 36
49. The European Communities maintains that no rule of law limits a panel's reliance on a
presumption of good faith, and the extent to which a panel relies on such a presumption is a matter
within the panel's discretion.  Nevertheless, the European Communities disputes Brazil's suggestionthat the sole justification given by the Panel for accepting the genuine nature of Exhibit EC-12 wasthat the European Communities had asserted that it was genuine.  The European Communities notesthat it provided responses to questions by the Panel regarding the sources of information and the
methodology on which Exhibit EC-12 was based.  The genuineness of the document was
demonstrated by the consistency between the raw data that had been collected and the considerationof that data in Exhibit EC-12, as well as the sim ilar consistency between the conclusions described in
Exhibit EC-12 and those stated in the Definitive Regulation.
5. Disclosure of Information:  Articles 6.2 and 6.4 of the  Anti-Dumping
Agreement :
50. The European Communities argues that, although the Panel was correct to reject Brazil's
claim under Articles 6.2 and 6.4 of the  Anti-Dumping Agreement , its reasoning was not appropriate
because it implicitly presumed that these provisio ns required the European Commission to inform the
                                                     
35European Communities' appellee's submission, para. 85.
36Ibid., para. 116.WT/DS219/AB/R
Page 17
Brazilian producer about the conclusions  (as opposed to information ) it had reached on the basis of
the data obtained during the investigation.37
51. The European Communities contends that the term  "information" used in Article 6.4 does not
extend to investigating authorities' conclusions from, or reasoning applied to, data obtained in the
course of their enquiries.  This view, according to the European Communities, is supported by the
ordinary meaning of the text of Article 6.4, in its context.  The European Communities submits thatwhere the  Anti-Dumping Agreement  refers to "information" with the intention of imposing an
obligation to provide notification of the authorities' reasoning, it does so explicitly (as, for example, inArticle 12.2.2).  The European Communities claims that an examination of the object and purpose ofArticle 6.4 supports this interpretation, because the disclosure requirements are intended to giveparties an opportunity to influence the conclusions of investigating authorities.  According to the
European Communities, it had no obligation to disclose Exhibit EC-12 because it contains itsinvestigating authority's conclusions with respect to some of the injury factors listed in Article 3.4;
any data published in Exhibit EC-12 had previously been disclosed to the interested parties to the
extent that it was compatible with confidentiality requirements.
52. Citing the panel report in  Guatemala – Cement II , the European Communities also argues
that the  general  nature of Article 6.2 is not such as to impose a  specific  obligation on the European
Commission to inform the Brazilian exporter in  the course of the investigation  about matters that are
specifically required to be conveyed at the  end  of the investigation by virtue of Article 12.2.
38
6. Implicit Analysis of the "Growth" Factor:  Article 3.4 of the  Anti-Dumping
Agreement :
53. The European Communities argues that the obligation under Article 3.4 of the  Anti-Dumping
Agreement  to consider each of the factors listed in that  provision is distinct from other obligations
under the  Anti-Dumping Agreement  to disclose or publish information about an investigating
authority's consideration of a particular factor.  In the present case, the Panel found that the
examination of "growth" was "implicit" in that it was carried out in the course of examining other
factors, which examination was clearly evident in th e record (including in the Provisional Regulation).
In the European Communities' view, allowing the implicit examination of a factor avoids a formalistic
                                                     
37Although the European Communities disagrees with the reasoning relied upon by the Panel, it did not
bring a cross-appeal on this point.
38Panel Report,  Guatemala – Cement II , para. 8.238.WT/DS219/AB/R
Page 18
approach to Article 3.4, without rendering ineffective the substantive requirement that each factor be
examined.  Moreover, according to the European Communities, there is no rule in Article 17.6(i) ofthe  Anti-Dumping Agreement  or elsewhere in the covered agreements that prevents panels from
determining whether a factor was properly evaluated on the basis of the evaluation of other factors.
The European Communities submits that such a determ ination is therefore within the discretion of the
Panel.
7. Causality:  Article 3.5 of the Anti-Dumping Agreement
54. The European Communities argues that the high cost of production of the European
Communities industry, relative to the Brazilian industry, was not raised as a  causal factor  before the
investigating authorities, and therefore, it was not  "known" to the investigating authorities in that
context.  The European Communities notes that the factors that the Panel described as being known to
the investigating authorities in the context of th e dumping and injury analyses were the alleged
differences in cost of production and market perception between "white" and "black heart" variants ofthe product under investigation.  As the Panel reported, the European Commission had determinedduring the investigation that the difference in cost of production was minimal and, therefore, suchdifference could not have been a causal factor.  The European Communities submits that thisdetermination by the European Commission is an issue of fact and, therefore, not within the Appellate
Body's jurisdiction.  Finally, the European Communities argues, even if the difference in cost ofproduction as described by Brazil were known to the European Commission, the investigating
authorities would not have been required to consider it in a causality determination under Article 3.5,
because a difference in cost of production of the product being examined is not a factor "other thandumped imports".
55. The European Communities asserts that Brazil's arguments regarding the European
Communities' methodology of analyzing each causal factor only individually are not properly beforethe Appellate Body because Brazil did not argue before the Panel that the European Commissionfailed to consider the collective effect of the "o ther factors".  Therefore, the European Communities
submits, in so far as the Panel's finding involved a legal interpretation of the obligations ofinvestigating authorities in regard to the collective effect of "other factors", the Appellate Body should
declare it to be of no effect as this was not an issue in dispute.  Similarly, the European Communities
argues that the Appellate Body should also declare any factual findings of the Panel on this issueirrelevant to the determination.WT/DS219/AB/R
Page 19
56. Notwithstanding its objection as to the admissibility of Brazil's claim on this issue, the
European Communities agrees with the Panel's finding that the European Commission's considerationof all the possible causal factors satisfied the requ irements of Article 3.5.  According to the European
Communities, Brazil fails to recogniz e that an injury can have two causes, each of which would have
been sufficient to cause the injury.  Therefore, the European Communities claims that the requirement
of a collective examination would serve no further purpose in ensuring that a sufficient causal linkexisted between dumped imports and injury.  The European Communities further notes thatArticle 3.5 specifies no methodology for an investigating authority's causality analysis, as theAppellate Body recognized in US – Hot-Rolled Steel .
39  In requiring an examination of the collective
impact of other factors, Brazil is extending the legal requirements of Article 3.5 beyond the limitsdetermined by the Appellate Body, and is effectively prescribing the particular methods andapproaches that investigating authorities must adopt.
C. Arguments of the Third Participants
40
1. Japan
57. Japan argues that the Panel erred in concluding that the European Communities did not act
inconsistently with Article 6.2 of the  Anti-Dumping Agreement  by not disclosing to interested parties
Exhibit EC-12 or a non-confidential summary of E xhibit EC-12.  In Japan's view, all the evidence
used by investigating authorities to evaluate the factors under Article 3.4 constitutes "essential facts"under Article 6.9, and the "full opportunity" guaranteed by Article 6.2 exists only where investigatingauthorities disclose such facts to interested parties in sufficient time to respond and defend theirinterests.  Contrary to these requirements, the European Communities based its definitivedetermination on data that were available only in Exhibit EC-12 and were not disclosed.  In Japan'sview, if the Panel's interpretation were correct, the investigating process could be "skew[ed]" andcould prevent interested parties from fully defending their interests.
41
58. Japan also disagrees with the Panel's conclusion that the European Communities did not act
inconsistently with Article 3.5 of the  Anti-Dumping Agreement  and, in particular, the Panel's finding
that the comparative advantage of foreign producers over European Communities producers was not a
                                                     
39Appellate Body Report, US – Hot-Rolled Steel , para. 224.
40Neither Chile nor Mexico filed written submissions, and they did not make oral statements at the
hearing.
41Japan's third participant's submission, para. 25.WT/DS219/AB/R
Page 20
"known" causal factor.  Japan claims that Article 3.5 requires that the causal relationship between
dumped imports and injury be established "through the effects of dumping".  Understood in thiscontext, Japan argues, "known" factors under Articl e 3.5 are not limited to factors external to the
dumped imports.  Any factor other than the magnit ude of the margin of dumping could be a "known
factor[] other than the dumped imports", in terms of Article 3.5.  Japan submits that "known" factors
also include factors that may not necessarily have been raised by a party during a certain stage of theanti-dumping investigation, particularly given Members' obligations of good faith in applying the Anti-Dumping Agreement .  In Japan's view, an exporter's comparative advantage (whether minimal or
not) is a causal factor that is "the crux" of foreign and domestic competition and domesticproductivity as listed in Article 3.5.
42  Thus, according to Japan, the comparative advantage of the
Brazilian exporter was a factor known to the European Commission, which it was consequentlyrequired to examine under Article 3.5.
2. United States
59. The United States submits that the Panel was co rrect in finding that investigating authorities
are not required to consider whether the volume and price effects of imports from each individualcountry are significant before considering whether to cumulate imports under Article 3.3 of the  Anti-
Dumping Agreement .  In the United States' view, the only prerequisites to cumulation under
Article 3.3 are as set out in the text:  first, that the dumping margin for each country is more thande minimis ;  second, that the volume of imports from each country is not negligible;  and third, that a
cumulative assessment is appropriate in the light of the conditions of competition both between the
imported products and between the imported products and the like domestic product.  According tothe United States, Brazil's contrary interpretation would render Article 3.3 "meaningless".
 43
60. The United States agrees with the Panel's conclusion that the European Communities acted
inconsistently with Articles 12.2 and 12.2.2 of the  Anti-Dumping Agreement  by failing to set forth in
a discernible manner how it evaluated certain factors listed in Article 3.4 of the  Anti-Dumping
Agreement .  In the light of this conclusion, and in view of the fact that this finding is not appealed, the
United States maintains that it is not necessary for the Appellate Body to decide whether the EuropeanCommunities also acted inconsistently with Articles 3.1 and 3.4 of the  Anti-Dumping Agreement .
                                                     
42Japan's third participant's submission, para. 15.
43United States' third participant's submission, para. 19.WT/DS219/AB/R
Page 21
61. The United States agrees with Brazil that the Panel erred in concluding that the European
Communities did not act inconsistently with Articles 6.2 and 6.4 of the  Anti-Dumping Agreement 
with respect to the information on injury factors referred to exclus ively in Exhibit EC-12.  According
to the United States, this information was relevant, was used by the investigating authority, and was
not confidential, yet the European Commission did not disclose it in any form to interested parties
during the investigation.  Nor did the European Commission give interested parties an opportunity topresent arguments or provide information in response to Exhibit EC-12.  The United States submitsthat the European Communities has provided no reasonable explanation as to why it did not do so.
62. The United States agrees with the Panel that the "margins analysis" was not a "known" causal
factor that the European Communities was required to examine as part of its causality analysis underArticle 3.5.  In the United States' view, investigating authorities are not required under Article 3.5 toexamine on their own initiative all possible factors that may be causing injury.  According to the
United States, the burden was on Brazil to establish a  prima facie  case that the margins analysis was
a "known" factor that was injuring the domestic industry, and Brazil failed to discharge this burden.
63. The United States agrees with the Pane l that the European Communities did not act
inconsistently with Article 3.5 of the  Anti-Dumping Agreement  in examining other factors
individually.  The United States submits that nothing in the text of Article 3.5 requires investigatingauthorities to determine whether other injury factors are themselves a sufficient cause of injury or todetermine that the injurious effects of the dumped imports are more significant than the combinedeffects of other factors.  Therefore, the United States argues, in the absence of such specific languagein the  Anti-Dumping Agreement , investigating authorities have discretion to determine their own
causality methodologies.WT/DS219/AB/R
Page 22
III. Issues Raised in this Appeal
64. The following issues are raised in this appeal:
(a) whether the Panel erred in finding that:
(i) the European Communities did not act inco nsistently with Article VI:2 of the
 General Agreement on Tariffs and Trade 1994  (the "GATT 1994") or
Article 1 of the  Agreement on Implemen tation of Article VI of the General
Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement ") in
imposing anti-dumping duties in this case following the devaluation of theBrazilian Real at the beginning of the fourth quarter of the period ofinvestigation ("POI");  and
(ii) under Article 2.4.2 of the Anti-Dumping Agreement , the European
Commission "could not have based its dumping analysis on the export pricesrelating to the period after the devaluation only";
(b) whether the Panel erred in finding that the European Communities did not act
inconsistently with Article 2.2.2 of the  Anti-Dumping Agreement  by including actual
data from "low-volume" sales in determin ing the amounts for administrative, selling
and general costs ("SG&A") and profits for the construction of normal value;
(c) whether the Panel erred in finding that the European Communities did not act
inconsistently with Articles 3.2 or 3.3 of the  Anti-Dumping Agreement , even though
the European Commission did not analyze the volume and prices of dumped imports
from Brazil individually, pursuant to Article 3.2, as a pre-condition to cumulativelyassessing the effects of dumped imports under Article 3.3;
(d) whether the Panel erred in finding that Exhibit EC-12 was properly before it for
purposes of assessing the European Commission's evaluation of the injury factorslisted in Article 3.4 of the  Anti-Dumping Agreement , and, in particular, whether, in
so finding, the Panel:WT/DS219/AB/R
Page 23
(i) failed to assess whether the European Commission's establishment of
the facts was proper under Article 17.6(i) of the Anti-Dumping
Agreement ;  and
(ii) incorrectly interpreted the requirements of Articles 3.1 and 3.4 of the
Anti-Dumping Agreement ;
(e) whether the Panel erred in finding that the European Communities did not act
inconsistently with Articles 6.2 or 6.4 of the  Anti-Dumping Agreement  by failing to
disclose to interested parties during the anti-dumping investigation the information onthe injury factors listed in Article 3.4 that is contained in Exhibit EC-12;
(f) whether the Panel erred in finding that the European Communities did not act
inconsistently with Article 3.4, in respec t of the injury factor "growth";  and
(g) whether the Panel erred in finding that the European Communities did not act
inconsistently with Article 3.5 of the  Anti-Dumping Agreement  in the assessment of
the causal relationship between injury and the dumped imports, and, in particular,
whether the Panel erred in finding that:
(i) the difference in the cost of production between the Brazilian exporter
and the European Communities industry was not a "known factor[
 ]
other than the dumped imports which at the same time [was] injuringthe domestic industry";  and
(ii) the causality methodology applied in this investigation, which did not
include an examination of the collective impact of other known causal
factors, did not attribute the injuries caused by those other factors to
the dumped imports.WT/DS219/AB/R
Page 24
IV. Devaluation of the Brazilian Real During the Pe riod of Investigation:  Article VI:2 of the
GATT 1994 and Article 1 of the  Anti-Dumping Agreement
65. Brazil claims that the European Communities acte d inconsistently with Article VI:2 of the
GATT 1994 and Article 1 of the  Anti-Dumping Agreement  by making its dumping determination on
the basis of the data from the entire one-year period of investigation ("POI"), including the periodprior to the devaluation of the Brazilian Real.  In resolving this claim, we will address Brazil'sarguments that:
(a) Article VI:2 of the GATT 1994 and Article 1 of the  Anti-Dumping Agreement 
compel the selection of a particular methodology under Article 2.4.2 of the  Anti-
Dumping Agreement ;  and
(b) Article 2.4.2 permits a comparison of normal value and export price based on data
solely from a subset of the POI.
44
66. We recall that, in its examination of whether there was dumping by the Brazilian exporter
under investigation, the European Commission conduct ed its examination using a POI of one year
from 1 April 1998 to 31 March 1999.45  The Brazilian Real was devalued by 42 percent towards the
end of this period in January 1999.46  Using the data from the  entire  one-year POI, and making a
comparison of weighted average normal values with weighted average export prices for the entireperiod, the European Commission found a dumping margin for the Brazilian exporter of34.8 percent.
47
67. Brazil claimed before the Panel that the European Commission's dumping determination was
based on an inappropriate comparison of normal value and export prices.  Brazil asserted that
                                                     
44Brazil appeals "the Panel's finding that the EC could not have based its dumping analysis on the
export prices relating to the period after the devaluation on ly." (Notice of Appeal, p. 2, attached as Annex 1 to
this Report)  This finding, according to Brazil, is inhere nt in the Panel's view that "an investigating authority
would generally be precluded from limiting its dumping analysis to a selective subset of that data from only atemporal sub-segment of the [POI]." (Panel Report, para. 7.104)
45Panel Report, para. 2.3.  We note that the European Commission's selection of the POI from
1 April 1998 to 31 March 1999 is not challenged by Brazil.
46Ibid., para. 2.4.
47Commission Regulation (EC) No 449/2000 of 28 February 2000, imposing a provisional anti-
dumping duty on imports of malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic,Japan, the People's Republic of China, the Republic of  Korea and Thailand and accepting an undertaking offered
by an exporting producer in the Czech Republic, published in the Official Journal of the EuropeanCommunities, 29 February 2000, L-series, No. 55 ("Provisional Regulation"), recital 31;  Council Regulation(EC) No 1784/2000 of 11 August 2000, imposing a definitive anti-dumping duty and collecting definitively the
provisional duty imposed on imports of certain malleable cast iron tube or pipe fittings originating in Brazil, the
Czech Republic, Japan, the People's Republic of China, the Republic of Korea and Thailand, published in theOfficial Journal of the European Communities, 18 August 2000, L-series, No. 208 ("Definitive Regulation"),recitals 62-63.WT/DS219/AB/R
Page 25
Article VI:2 of the GATT 1994 permits imposition of anti-dumping duties "only against and in order
to offset  present  dumping".48  According to Brazil, the "mechanical approach"  49 of the European
Commission, in using export price data from the  entire  POI to make a weighted average-to-weighted
average comparison, "however compatible with the technical requirements of the  Anti-Dumping
Agreement "50, resulted in a dumping determination that did not accurately reflect whether dumping
existed  in the present .  Because the devaluation of the Real had eliminated dumping by the Brazilian
exporter, Brazil argued, the European Commission was obligated to compare normal values withexport prices solely from the post-devaluation period.
51
68. When evaluating Brazil's claim, the Panel first examined the requirements imposed by the
 Anti-Dumping Agreement  with respect to the methodology to be employed by an investigating
authority in comparing normal value with export pric es.  The Panel noted that two methodologies are
prescribed in the first sentence of Article 2.4.2, either of which is "generally" to be used whencomparing normal value and export price.
52  The first sentence of Article 2.4.2 provides:
Subject to the provisions governing fair comparison in paragraph 4,
the existence of margins of dumping during the investigation phase
shall normally be established on the basis of a comparison of a
weighted average normal value with a weighted average of prices of
all comparable export transactions or by a comparison of normal
value and export prices on a transaction-to-transaction basis.
The Panel found as follows:
Either of these methodologies would se em to require, in general, that
data  throughout  the entire investigation period would necessarily
consistently be taken into account.  That is, an investigating authority
would generally be precluded from limiting its dumping analysis to a
selective subset of that data from only a temporal sub-segment of the
[POI].53 (original emphasis)
                                                     
48Panel Report, para. 7.87, quoting Brazil's second submission to the Panel, para. 27. (original
emphasis)  Brazil also claimed that the European Communities acted inconsistently with the Article 1 of the
 Anti-Dumping Agreement , as a consequence of its failure to fulfil its obligation under Article VI:2 of the
GATT 1994. (Request for the Establishment of a Panel, WT/DS219/2, 8 June 2001, reproduced in Panel Report,Section IX, p. 120)
49Panel Report, para. 7.103, quoting Brazil's second submission to the Panel, para. 31.
50Ibid., para. 7.106, quoting Brazil's second submission to the Panel, para. 33.
51Ibid., para. 7.103-7.104.
52Ibid., para. 7.104.  A third methodology, prescribed in the second sentence of Article 2.4.2, is put
forward by Brazil as the methodology the European Commission should have employed in this investigation.See infra , paras. 71-72.
53Panel Report, para. 7.104.WT/DS219/AB/R
Page 26
69. The Panel rejected Brazil's argument that the methodology selected by the European
Commission in this investigation "defeat[ed] the 'object and purpose'"  54 of the  Anti-Dumping
Agreement , because the Panel did not find the obligation claimed by Brazil in the text:
[W]e see no foundation in the text of the Agreement … for a
requirement that an investigating authority re-assess its own
determination made on the basis of an examination of data pertaining
to the [POI] prior to the imposition of an anti-dumping measure in thelight of an event which occurred during the [POI].  We decline to read
such a provision into the text.
55 (footnotes omitted)
70. Brazil's arguments on appeal are nuanced somewhat differently from those advanced before
the Panel.  On appeal Brazil identifies Article VI:2 of the GATT 1994, and specifically, the phrase"[i]n order to offset or prevent dumping", as the source of the obligation allegedly breached by theEuropean Communities with respect to the selection of the appropriate methodology prescribed byArticle 2.4.2 of the  Anti-Dumping Agreement .
56  Brazil emphasizes that, from the phrase "[i]n order
to offset or prevent dumping" contained in Articl e VI:2, there flows an obligation for investigating
authorities to "anticipate the level of anti-dumping duty that is strictly necessary to prevent dumping
in the future [by making] a  reasonable assumption  for the future on the basis of the data collected in
the [POI]."  57  In Brazil's view, only the export price data from the post-devaluation period within the
POI could have formed the basis for a "reasonable assumption" as to what level of duty was necessary"to prevent  future dumping" in this case.
58  The European Commission should therefore have relied
solely on the post-devaluation export prices in making its dumping determination.  By failing to do so,Brazil argues, the European Communities acted inconsistently with its obligation under Article VI:2of the GATT 1994.  Brazil acknowledges that Article 2.4.2 of the  Anti-Dumping Agreement  provides
an investigating authority with discretion to select from among the three comparison methodologies
prescribed in that provision.  Such discretion, however, is subject in Brazil's view to the basic
obligation under Article VI:2 of the GATT 1994 to impose duties only when necessary to "offset orprevent dumping".
59  Brazil argues that in order to arrive at a "reasonable assumption for the future",
                                                     
54Panel Report, para. 7.106, quoting Brazil's second submission to the Panel, para. 33.
55Ibid., para. 7.106.
56Brazil's appellant's submission, para. 54.
57Ibid., para. 58. (original emphasis)
58Ibid., para. 59. (original emphasis)
59Brazil's response to questioning at the oral hearing.WT/DS219/AB/R
Page 27
an investigating authority is  compelled  to select, among the three comparison methodologies
prescribed in Article 2.4.2, the one that is most appropriate to prevent future dumping.60  In particular,
Brazil argued during the oral hearing that Articl e VI:2 required the European Commission to "choose
among the three comparison methodologies foreseen by Article 2.4.2 [of the  Anti-Dumping
Agreement ], the one that best takes into account the disappearance of any previous dumping after the
devaluation of the Brazilian Real."  61
71. In this case, Brazil finds that methodology in the second sentence of Article 2.4.2.  The
second sentence of Article 2.4.2 provides:
A normal value established on a weighted average basis may be
compared to prices of individual export transactions if the authorities
find a pattern of export prices which differ significantly among
different purchasers, regions or time periods, and if an explanation is
provided as to why such differences cannot be taken into accountappropriately by the use of a weighted average-to-weighted average or
transaction-to-transaction comparison.
72. Brazil submits that, contrary to the Panel's legal interpretation of Article 2.4.2, this sentence
explicitly recognizes that export prices that "differ significantly" in a particular time-period within thePOI may need to be examined on their own.  Thus, in the light of the aforementioned obligation inArticle VI:2, the European Commission was  required  to perform its dumping determination in this
case by comparing weighted-average normal values (based on data from the entire one-year POI) withprices of individual export transactions from the time within the POI  subsequent  to the devaluation
of the Real.
62  Brazil submits that such a comparison, based on export price data solely from the  post-
devaluation time-period  within the POI, is specifically permitted by the second sentence of
Article 2.4.2.  Thus, according to Brazil, because the European Commission performed a weighted
average-to-weighted average comparison based on data from the entire POI (specified in the firstsentence of Article 2.4.2), instead of comparing weighted average normal value with post-devaluationexport transactions (permitted by the second sentence of Article 2.4.2), the European Communitiesacted inconsistently with the obligation, contained in Article VI:2 of the GATT 1994, to impose anti-
                                                     
60Brazil's response to questioning at the oral hearing.
61Brazil's statement at the oral hearing.
62Brazil does not object to the weighted average calculation using the data from the entire  POI for
normal values  because, according to Brazil, the devaluation ha d not affected the normal values. (Brazil's
appellant's submission, footnote 8 to para. 52)  For the purpose of export prices , however, export transactions
preceding the devaluation should have been excluded from the data set because, according to Brazil, the
devaluation constituted a "fundamental and lasting change in the trading conditions of Brazilian exports."
(Brazil's statement at the oral hearing)WT/DS219/AB/R
Page 28
dumping duties only when it is necessary "to offset or prevent dumping".63  Furthermore, in Brazil's
view, this violation of Article VI:2 of the GATT 1994 leads to a consequential violation of Article 1
of the  Anti-Dumping Agreement64, which provides that "[a]n anti-dumping measure shall be applied
only under the circumstances provided for in Article VI of GATT 1994".65  We note that Brazil does
not characterize the error of the European Communities on this issue as a violation of Article 2.4.2
 per se .
73. The European Communities rejects Brazil's challenge, under Article VI:2 of the GATT 1994,
to the European Commission's use of a weighted average-to-weighted average comparison of normalvalue and export prices on the basis of all data fr om the one-year POI.  According to the European
Communities, Article 2 of the  Anti-Dumping Agreement , rather than Article VI:2 of the GATT 1994,  
establishes the rules for an objective and unbiased dumping determination to be made by aninvestigating authority.
66  The European Communities submits that its authorities have complied with
the requirements of the  Anti-Dumping Agreement  by using all data from the POI, as contemplated by
Article 2, and have thereby ensured objectivity in arriving at the dumping determination in this
investigation.67  The European Communities further argues that, consistent with the emphasis on
objectivity rather than subjectivity in Article 2, Article 2.4.2 does not permit an investigating authorityto select among export transactions in making the margin calculation for the purposes of a dumpingdetermination.
68
74. Brazil's claim on appeal thus raises two related issues.  First, we must determine whether
Article VI:2 of the GATT 1994 imposes an  obligation  on an investigating authority to select a
particular comparison methodology under Article 2.4.2 of the  Anti-Dumping Agreement .  Second, if
we find such an obligation to exist in Article VI: 2, we must determine whether the facts of this case
required the European Commission, pursuant to Article 2.4.2, to compare weighted average normal
                                                     
63Brazil's response to questioning at the oral hearing.
64Ibid.
65Article 1 of the  Anti-Dumping Agreement  in its entirety provides:
An anti-dumping measure shall be applied only under the circumstances
provided for in Article VI of GATT 1994 and pursuant to investigations
initiated and conducted in accordance with the provisions of this Agreement.
The following provisions govern the application of Article VI of GATT 1994in so far as action is taken under anti-dumping legislation or regulations.(footnote omitted)
66European Communities' appellee's submission, paras. 10 and 12.
67Ibid., paras. 15-17.
68Ibid., paras. 21-22.WT/DS219/AB/R
Page 29
value for the entire POI with prices of individual export transactions from the post-devaluation period
of the POI.
75. We begin our analysis with the text of the provision cited as the source of the obligation
claimed by Brazil.  Article VI:2 of the GATT 1994 provides, in relevant part:
In order to offset or prevent dumping, a contracting party may levy on
any dumped product an anti-dumping duty not greater in amount than
the margin of dumping in respect of such product.
76. Brazil focuses exclusively on the phrase "[i]n order to offset or prevent dumping" to
substantiate its claimed obligation that a dumping determination must be made on the basis of whetherdumping will occur in the future.  As noted above, Brazil seeks to import a "reasonable assumptionfor the future" standard into Article VI:2 of the GATT 1994 and, consequently, into Article 2.4.2 ofthe  Anti-Dumping Agreement .  We fail to see how Article VI:2, by stating that the purpose of anti-
dumping duties is "to offset or prevent dumping", imposes upon investigating authorities anobligation to select any particular methodology for comparing normal value and export prices under
Article 2.4.2 of the  Anti-Dumping Agreement  when calculating a dumping margin.  As we see it, the
obligation that flows from the purpose of "offset[ing]  or prevent[ing] dumping" is clear from the text
of Article VI:2 itself, namely, that an anti-dumping duty shall "not [be] greater in amount than themargin of dumping in respect of [the dumped] product".
69  This limitation of anti-dumping duties to
the margin of dumping is the only requirement im posed on investigating authorities by the first
sentence of Article VI:2.  70  The precise rules relating to the determination as to whether there is
dumping and, if dumping exists, how the dumping margin is to be calculated, are set out, not inArticle VI:2 of the GATT 1994, but rather in Article 2 of the  Anti-Dumping Agreement , which is the
agreement on the implementation of Article VI of the GATT 1994.  In our view, therefore, Article 2 is
a more appropriate source than the opening phrase "[i]n order to offset or prevent dumping" ofArticle VI:2, for ascertaining specifically what is required for the proper determination of dumping by
an investigating authority.  We are unable to see an obligation flowing from the opening phrase ofArticle VI:2 of the GATT 1994 to Article 2 of the  Anti-Dumping Agreement  that the determination
                                                     
69Indeed, to accept Brazil's r eading of an obligation in Article VI :2 that limits an investigating
authority's selection of comparison methodology under Article 2.4.2 "would require us to read into the textwords which are simply not there.  Neither a panel nor the Appellate Body is allowed to do so." (Appellate BodyReport, India – Quantitative Restrictions , para. 94)
70That the amount of an anti-dumping duty shall not exceed the margin of dumping, and that it should
preferably be less than the margin of dumping if such lesser duty would be adequate to remove the injury to the
domestic industry, are further stipulated in Articles 9.1, 9.3, and 9.3.2 of the Anti-Dumping Agreement .  This
obligation to limit the amount of the anti-dumping duty is also reflected in a different manner with respect to
price undertakings in Article 8.1.WT/DS219/AB/R
Page 30
of dumping must be based on the standard of a "reasonable assumption for the future", or that this, in
turn, would require that a particular methodology be chosen under Article 2.4.2.
77. Thus, the rules for ensuring that an anti-dumping duty is imposed only on the basis of a
proper determination that there is dumping as defined in Article VI:1 of the GATT 1994 are set out in
Article 2 of the  Anti-Dumping Agreement .  Article 2 sets forth, in great detail, the rules governing
various aspects of an investigating authority's dumping determination.  That provision definesdumping, details the precise comparison to be made between prices, provides flexibility for exportersto respond in their pricing to fluctuations in exchange rates, and stipulates the data to be relied upon inperforming many of the necessary calculations in an anti-dumping investigation.  We are of the viewthat, if negotiators had intended to include in the covered agreements an obligation for aninvestigating authority to select a particular methodology when comparing normal value and export
prices, such an obligation would be found in Article 2 itself and not, as Brazil argues, in Article VI:2of the GATT 1994.
78. We also consider that certain anomalous results would flow from Brazil's assertion that when
a major change, such as in this case a steep and lasting devaluation, occurs at a late stage of the POI,the dumping determination should be confined to and based on the data following that major change.If such a change were to take place at the very end of the POI, Brazil's approach would imply that thedetermination would have to be based on the data of a very short period.
71  By the same logic, if the
major change were to occur after the end of the PO I, but before the provisional determination of the
investigating authority (in this case, for example, after 1 April 1999 but before 28 February 2000), theinvestigating authority, under Brazil's approach, should ignore the analysis based on the data of the
entire POI and review or reassess the determinatio n on the basis of post-POI data.  Indeed, this could
imply an obligation on the investigating authority to  select a new POI starting from the time of the
major change.
72
79. We can also foresee the opposite situation.  Suppose, for example, that the major change is
not devaluation, but revaluation or appreciation of the currency of the exporting country.  Supposefurther that the investigating authority finds no dumping on the basis of the data pertaining to the first
                                                     
71Although in this case Brazil asserts that the devaluation had affected only the "export price" and not
the "normal value", we can visualize situations where a devaluation may affect both the export price and thenormal value, if not immediately, after a time-lag.  This would mean that the calculation of both normal valueand export price would have to be based on data pertaining to a very short period of the POI.
72The European Communities pointed to these implications of Brazil's argument during the oral
hearing. (European Communities' statement at the oral hearing)WT/DS219/AB/R
Page 31
three quarters of the POI, but the revaluation in the last quarter has resulted in a situation where only
sales in that last quarter were made at less than normal value.  Brazil's assertion in this case couldopen up the possibility of the investigating authority making an affirmative dumping determinationbased solely on the data of the last quarter of the POI.
80. Permitting such discretionary selection of data  from a period of time within the POI would
defeat the objectives underlying investigating author ities' reliance on a POI for the purposes of a
dumping determination.
73  As the Panel correctly noted, the POI "form[s] the basis for an objective
and unbiased determination by the investigating authority."  74  Like the Panel and the parties to this
dispute, we understand a POI to provide data collected over a sustained period of time, which periodcan allow the investigating authority to make a dumping  determination that is less likely to be subject
to market fluctuations or other vagaries that may distort a proper evaluation.
75  We agree with the
Panel that the standardized reliance on a POI, although not fixed in duration by the  Anti-Dumping
Agreement , assures the investigating authority and exporters of "a consistent and reasonable
methodology for determining present dumping", which anti-dumping duties are intended to offset.76
In contrast to this consistency and reliability, Brazil's approach would introduce a significant level of
subjectivity on the part of the investigating authority to determine when data from a subset of the POImay be a reliable indicator of an exporter's future pricing behaviour.  As the European Communitiespoints out, the "broad judgmental role" accorded in vestigating authorities by Brazil's approach is not
consistent with the detailed nature of the rules and obligations of the  Anti-Dumping Agreement
governing various aspects of the dumping determination.
77
                                                     
73Numerous provisions in the  Anti-Dumping Agreement  refer to the concept of a "period of
investigation". (Panel Report, para. 7.100)  See for example, Article 2.2.1, Article 2.2.1.1, footnote 6 to
Article 2.2.1.1 and Article 2.4.1.  The  Anti-Dumping Agreement  does not establish, however, what time-period
must be utilized in every case for the selection of data to be relied upon in making a dumping determination.  Arecent recommendation adopted by the World Trade Organization Committee on Anti-Dumping Practicesrecognizes that the  Anti-Dumping Agreement  does not prescribe a specific period of investigation, but
recommends "[a]s a general rule" that "the period of data collection for dumping investigations normally should
be twelve months, and in any case no less than six months, ending as close to the date of initiation as is
practicable". (Recommendation Concerning the Periods of Data Collection for Anti-Dumping Investigations,
G/ADP/6, 16 May 2000) (footnote omitted)
74Panel Report, para. 7.101.
75Brazil states that it "does not contest the role of the [POI] for the purposes of the dumping
determination." It further "agrees with the Panel that the data relating to a historical period of investigationshould be used." (Brazil's appellant's submission, para. 46)
76Panel Report, para. 7.102.
77European Communities' statement at the oral hearing.WT/DS219/AB/R
Page 32
81. In our view, the  Anti-Dumping Agreement  takes into account the possibility of such major
changes occurring at a late stage of the POI, or even after the POI, not by allowing investigatingauthorities to pick and choose a subset of data or sub-periods of a POI according to their subjectiveconsiderations, but by review mechanisms.  Article 11.1 of the  Anti-Dumping Agreement  is
categorical that "[a]n anti-dumping duty shall remain in force only as long as and to the extent
necessary to counteract dumping which is causing injury." In furtherance of this general rule,Article 11.2 requires investigating authorities in certain circumstances, including at the request of aninterested party after a reasonable period of time, to "review the need for the continued imposition ofthe duty".  The  Anti-Dumping Agreement , in sub-paragraphs 1 through 3 of Article 9.3, also lays
down that the anti-dumping duty collected shall at  no point in time exceed the dumping margin and
that any such excess shall be refunded.  Therefore, if a major change that occurs during or after the
POI has reduced the margin of dumping or eliminated the dumping altogether, these provisions of the Anti-Dumping Agreement  ensure that the exporter's legitimate interests are safeguarded.
78
82. Brazil has also made a factual assertion that, the devaluation of January 1999 being of the
order of 42 percent, and the dumping margin found by the investigating authorities being of the orderof 34.8 percent, the devaluation had eliminated dumping altogether.  This is based on the assumptionthat the Brazilian exporter's domestic price (in Reals) and export price (in the currency of theimporting country) would remain the same after the devaluation.  Firstly, we note that neither thePanel nor the European Communities has made a factual finding that the devaluation of the BrazilianReal had eliminated dumping.  Secondly, it is not inherent or automatic that the consequence of asteep devaluation is the elimination of dumping.  The consequences of a devaluation in the short and
long terms on the normal value and export prices of an exporter depend on a number of factors,
including, in particular, the pricing behaviour of the exporter post-devaluation.  These will inevitablyvary from case to case.  The lasting impact of a devaluation will therefore have to be determined onthe basis of objective and reliable post-devaluation data and not on the basis of  a priori  assumptions.
83. Lastly, we observe that Brazil has not challenged, either before the Panel or before us, that the
European Communities acted inconsistently with Article 2.4.2 of the  Anti-Dumping Agreement  in its
                                                     
78During the oral hearing, Brazil stated that it was not contesting the Panel's statement that "the
Agreement provides mechanisms to address situations where dumping decreases or terminates following anaffirmative determination of dumping on the basis of hist orical data from a recent past [POI], for example, in
Articles 9.3 (full or partial refund of duties paid) and 11 (review)." (Panel Report, para. 7.106)  However, Brazil
contends that the availability of a review or refund mechanism cannot be a ground for allowing the impositionof an anti-dumping duty that is ab initio  inconsistent with the obligation Brazil claims to exist in Article VI:2 of
the GATT 1994. (Brazil's response to questioning at the oral hearing)WT/DS219/AB/R
Page 33
selection of the appropriate methodology to compare normal value and export prices.79  A s  n o t e d
earlier, Brazil's claim rests on the argument that there is a fundamental obligation flowing intoArticle 2.4.2 from the phrase "[i]n order to offset or prevent dumping" contained in Article VI:2 of theGATT 1994, and that this obligation compelled the European Communities to choose in this
particular case the comparison methodology contained in the second sentence of Article 2.4.2, rather
than one of the methodologies contained in the first sentence of that Article.  We are therefore notcalled upon in this appeal to express any findings on the consistency of the European Communities'methodology selection with the requirements of Article 2.4.2.  Furthermore, with respect to Brazil'schallenge to the Panel's interpretation of Article 2.4.2, our finding that the obligation claimed byBrazil does not exist in Article VI:2 of the GATT 1994 resolves Brazil's appeal with respect to the
comparison methodology employed by the European  Commission in its dumping determination.  As
such, it is not necessary for us to rule on whether, under Article 2.4.2 of the  Anti-Dumping
Agreement , the European Commission "could not have based its dumping analysis on the export
prices relating to the period after the devaluation only."
 80
84. In the light of the preceding analysis, we uphold the finding of the Panel, in paragraphs 7.106
and 7.108 of the Panel Report, that the European Communities did not act inconsistently with itsobligations under Article VI:2 of the GATT 1994 in imposing anti-dumping duties in this casefollowing the devaluation of the Brazilian Real at the beginning of the fourth quarter of the POI.Given this finding, and because Brazil's allegation as to the European Communities' failure to complywith Article 1 of the  Anti-Dumping Agreement  was premised entirely on a finding of inconsistency
with respect to Article VI:2, we also uphold the Panel's finding, in paragraphs 7.107 and 7.108 of the
Panel Report, that the European Communities did not act inconsistently with Article 1 of the  Anti-
Dumping Agreement.    
                                                     
79Brazil did claim before the Panel that the European Communities had acted inconsistently with its
obligations under Article 2.4.2 on the basis of the European Commission's "zeroing" of negative dumpingmargins calculated for certain Brazilian product types. (Panel Report, para. 7.209)  The Panel found theEuropean Commission's application of its "zeroing" methodology to be inconsistent with the obligation in thefirst sentence of Article 2.4.2 to "consider the weight ed average of 'all comparable export transactions'." ( Ibid.,
para. 7.216, quoting Article 2.4.2)  This particular Article  2.4.2 challenge before the Panel, however, did not put
in question the European Commission's selection of the methodology used in this investigation.
80Notice of Appeal, p. 2, attached as Annex 1 to this Report.  The European Communities agreed with
the Panel's interpretation of Article 2.4.2, arguing that the "specific purpose" of the second sentence of
Article 2.4.2 is "to address instances of so-called 'targeted dumping'". (European Communities' statement at the
oral hearing)WT/DS219/AB/R
Page 34
V. Data for SG&A and Profits:  Article 2.2.2 of the Anti-Dumping Agreement
85. We turn now to examine Brazil's claim that the European Communities acted inconsistently
with the chapeau of Article 2.2.2 by relying, in th e calculation of constructed normal value, on actual
data from "low-volume" sales for purposes of determining the amounts for selling, general andadministrative costs ("SG&A") and profits.
86. In the anti-dumping investigation, the European Commission determined that the normal
values of certain types of the like product could not be based on the price at which they were sold inthe domestic market because of the low quantity of sales in Brazil.
81  The European Commission
therefore resorted to constructing normal values for these products in accordance with Article 2.2.82
When calculating constructed normal value, the European Commission used actual SG&A and profit
data from the Brazilian exporter to the extent the data were based on production and sales in the
ordinary course of trade.83  As a result, the actual data relied upon by the European Commission in
constructing normal values included data from sales of those types of products deemed to be sold ininsufficient quantities for the purpose of deriving normal value.
84
87. Brazil argued before the Panel that the European Commission's reliance on data from these
low-volume sales, already deemed by the European Commission not to "permit a proper comparison"of prices under Article 2.2, was inconsistent with the European Communities' obligation underArticle 2.2.2 of the  Anti-Dumping Agreement .  According to Brazil, once the European Commission
had found the sales to be of such a low volume that their prices could not be used for determining
normal values under Article 2.2, the European Comm ission was precluded from using data from those
same sales to calculate constructed normal value in accordance with Article 2.2.2.
                                                     
81The European Commission found the Brazilian sales to be in insufficient quantities for determining
those sales prices to constitute normal value, based on its  standard that only sales in the exporting market of five
percent or more of the total sales volume exported to the European Communities would be "sufficientlyrepresentative". (Provisional Regulation, recital 22)
82Ibid., recitals 25 and 36.
83Definitive Regulation, recital 31;  Provisional Re gulation, recitals 26, 27, 36, and 39.  See also,
Council Regulation (EC) No 384/96 of 22 December 1995, on protection against dumped imports fromcountries not members of the European Community, published in the Official Journal of the EuropeanCommunities, 6 March 1996, L-series, No. 56, Article 2(6).
84Definitive Regulation, recitals 30-31.WT/DS219/AB/R
Page 35
88. The chapeau of Article 2.2.2 provides, in relevant part:
For the purpose of paragraph 2, the amounts for administrative,
selling and general costs and for profits shall be based on actual datapertaining to production and sales in the ordinary course of trade of
the like product by the exporter or producer under investigation.
89. The Panel found that this text allows investigating authorities to exclude only data from
production and sales that were not made in the ordinary course of trade.
85  The Panel then reasoned
that, because low-volume sales are included in the "ordinary course of trade", such sales had to beincluded in the actual data relied upon in the construction of normal value.
86  The Panel therefore
found that the European Communities had not acted inconsistently with its obligation underArticle 2.2.2 by including data from low-volume sales in constructing normal value.
90. On appeal, Brazil challenges the Panel's legal interpretation of the chapeau of Article 2.2.2 of
the  Anti-Dumping Agreement .  Brazil points out that the chapeau of Article 2.2.2 requires the use of
actual  data, but not  all  actual data.  Brazil claims that the text of Article 2.2.2 does not compel the
use of actual data from sales previously determined  by an investigating authority not to "permit a
proper comparison" under Article 2.2.  Emphasizing that the purpose of Article 2.2.2 is to arrive at aconstructed value where normal value could not be based on "unrepresentative" domestic sales prices,Brazil claims that using data from those previously excluded sales would result in a constructed valuethat is as "unrepresentative" as the domestic sales prices rejected for normal value determinationunder Article 2.2.
87  Interpreting Article 2.2.2 to permit such a result would render Article 2.2 a
nullity.
91. The European Communities argues that while Article 2.2 refers specifically to sales in the
ordinary course of trade as well as to  low-volume sales, the chapeau of Article 2.2.2 refers only to
sales in the ordinary course of trade.88  The omission of low-volume sales from the chapeau of
Article 2.2.2, therefore, must be considered significant and held to have meaning.89  In addition, the
European Communities observes that using actual data from low-volume sales for the construction ofnormal value, when prices from those sales were rejected for normal value determination underArticle 2.2, does not distort constructed normal values, because the sales are weighted differently in
                                                     
85Panel Report, para. 7.137.
86Ibid., para. 7.138.
87Brazil's appellant's submission, para. 89.
88European Communities's appellee's submission, para. 56.
89Ibid., para. 57.WT/DS219/AB/R
Page 36
the calculations under the respective provisions.90  Therefore, in the European Communities' view,
actual data from low-volume sales must be included in the calculation of constructed normal value inaccordance with the chapeau of Article 2.2.2.
92. The issue before us, therefore, is whether an investigating authority must exclude data from
low-volume sales when determining the amount s for SG&A and profits under the chapeau of
Article 2.2.2, having disregarded such low-volume sales for normal value determination underArticle 2.2.
93. We begin our analysis with a review of the provisions that lead to the calculation of
constructed normal value.  Article 2.1 of the  Anti-Dumping Agreement  identifies a product as
"dumped" where the product is introduced into the commerce of another country at "less than itsnormal value".  "Normal value" is understood by virtue of that provision to be the "price, in theordinary course of trade, for the like product wh en destined for consumption in the exporting
country".  Where the price of the product in the home (exporting country) market is not "comparable"
to the export price of the like product, Article 2.2 provides alternative bases for deriving "normal
value":
When there are no sales of the like product in the ordinary course of
trade in the domestic market of the exporting country or when,
because of the particular market situation or the low volume of thesales in the domestic market of the exporting country
2, such sales do
not permit a proper comparison, the margin of dumping shall be
determined by comparison with a comparable price of the like product
when exported to an appropriate third country, provided that this price
is representative, or with the cost of production in the country oforigin plus a reasonable amount for administrative, selling and general
costs and for profits.
________________
2  Sales of the like product destined for consumption in the domestic market
of the exporting country shall normally be considered a sufficient quantityfor the determination of the normal value if such sales constitute 5 per cent ormore of the sales of the product under consideration to the importingMember, provided that a lower ratio should be acceptable where the evidence
demonstrates that domestic sales at such lower ratio are nonetheless ofsufficient magnitude to provide for a proper comparison.
                                                     
90European Communities's appellee's submission, paras. 74-76.WT/DS219/AB/R
Page 37
94. Article 2.2 makes clear that an alternative basis for deriving "normal value" must be relied
upon by an investigating authority where one of three conditions exists:
(a) there are no sales in the exporting country of the like product in the ordinary course of
trade;  or
(b) sales in the exporting country's market do not "permit a proper comparison" because
of "the particular market situation";  or
(c) sales in the exporting country's market do not "permit a proper comparison" because
of their low volume.
95. Where one of these conditions exists, Article 2.2 further specifies two alternative bases for the
calculation of "normal value":
(a) third-country sales, that is, the comparable price of the like product when exported to
an "appropriate" third country, provided the price is "representative";  or
(b) constructed normal value, that is, the sum of:
(i) the cost of production in the country of origin;
(ii) a "reasonable amount" for SG&A;  and
(iii) a "reasonable amount" for profits.
96. Article 2.2.2 establishes, in the following te rms, criteria for determining "reasonable
amount[s]" for SG&A and profits when calculating constructed normal value pursuant to Article 2.2:
For the purpose of paragraph 2, the amounts for administrative,
selling and general costs and for profits shall be based on actual data
pertaining to production and sales in the ordinary course of trade of
the like product by the exporter or producer under investigation.
When such amounts cannot be determined on this basis, the amountsmay be determined on the basis of:
(i) the actual amounts incurred and realized by the
exporter or producer in question in respect of
production and sales in the domestic market of
the country of origin of the same general
category of products;
(ii) the weighted average of the actual amounts
incurred and realized by other exporters or
producers subject to investigation in respect of
production and sales of the like product in the
domestic market of the country of origin;WT/DS219/AB/R
Page 38
(iii) any other reasonable method, provided that the
amount for profit so established shall not exceed
the profit normally realized by other exporters or
producers on sales of products of the same
general category in the domestic market of thecountry of origin.
97. Examining the text of the chapeau of Article 2.2.2, we observe that this provision imposes a
general obligation ("shall") on an investigating authority to use "actual data pertaining to productionand sales in the ordinary course of trade" when determining amounts for SG&A and profits.  Only"[w]hen such amounts cannot be determined on this basis" may an investigating authority proceed toemploy one of the other three methods provided in sub-paragraphs (i)-(iii).  In our view, the languageof the chapeau indicates that an investigating authority, when determining SG&A and profits underArticle 2.2.2, must first attempt to make such a determination using the "actual data pertaining toproduction and sales in the ordinary course of trade".  If actual SG&A and profit data for sales in theordinary course of trade do exist for the exporter and the like product under investigation, an
investigating authority is obliged to use that data for purposes of constructing normal value;  it may
not calculate constructed normal value using SG&A and profit data by reference to different data orby using an alternative method.
98. As the Panel correctly observed, it is meaningful for the interpretation of Article 2.2.2 that
Article 2.2 specifically identifies low-volume sales  in addition to  sales outside the ordinary course of
trade.
91  In contrast to Article 2.2, the chapeau of Article 2.2.2 explicitly excludes only sales outside
the ordinary course of trade.  The absence of any qualifying language related to low volumes in
Article 2.2.2 implies that an exception for low-volume sales should not be read into Article 2.2.2.  As
we explained in  India – Patents (US) :
[t]he duty of a treaty interpreter is to examine the words of the treaty
to determine the intentions of the parties.  This should be done in
accordance with the principles of treaty interpretation set out in
Article 31 of the Vienna Convention .  But these principles of
interpretation neither require nor condone the imputation into a treaty
of words that are not there or the importation into a treaty of conceptsthat were not intended.
92
Accordingly, we conclude that a requirement that low-volume sales be excluded from the calculation
of SG&A and profits cannot be read into the text of Article 2.2.2.
                                                     
91Panel Report, para. 7.138.
92Appellate Body Report, India – Patents (US) , para. 45, quoted in Appellate Body Report, EC – Bed
Linen , para. 83.WT/DS219/AB/R
Page 39
99. We also observe the very detailed nature of the provisions of the  Anti-Dumping Agreement
under Article 2.2 in respect of the calculation of constructed normal value.  In comparison with thecorresponding provisions in the  Tokyo Round Anti-Dumping Code
93, the present  Anti-Dumping
Agreement  outlines with significantly greater precision the manner in which an investigating
authority is to calculate constructed normal value.  For example, Article 2.2.1.1 identifies the "records
kept by the exporter or producer under investigation" to be the preferred source for cost of productiondata.  Similarly, as discussed, Article 2.2.2 establishes that  SG&A and profit data are to bedetermined on the basis of actual data for production and sales in the ordinary course of trade, andfurther provides three alternatives (in sub-paragraphs (i)-(iii)) to be followed when such data areunavailable.  Considering that the treaty negotiators covered in great detail various aspects of theconstructed value calculation, the omission of any reference to low-volume sales in the chapeau ofArticle 2.2.2 is telling.
94
100. Brazil rejects this reading of the text, arguing instead that Article 2.2.2 only requires the use
of "actual" data in the ordinary course of trade, not  all  data in the ordinary course of trade, and that
the purpose of Article 2.2 would be nullified unless data from low-volume sales were excluded fromthe calculation of constructed normal value.
95  As the European Communities correctly observes96, we
faced a similar interpretive argument when construing another provision of the  Anti-Dumping
Agreement  on constructed value in  EC – Bed Linen .  In that case, the relevant provision to be
clarified was Article 2.2.2(ii), which provides:
… When such amounts cannot be determined on this basis, the
amounts may be determined on the basis of:
…
(ii) the weighted average of the actual amounts
incurred and realized by other exporters or
producers subject to investigation in respect of
production and sales of the like product in thedomestic market of the country of origin[.]
                                                     
93Articles 2.4-2.6 of the Tokyo Round Anti-Dumping Code  contained similarly-worded predecessor
provisions to the present Articles 2.2-2.4 of the Anti-Dumping Agreement .  The Tokyo Round Anti-Dumping
Code , however, did not contain a definition of "ordinary course of trade", or a standard for determining when
sales are of such a low volume to warrant resort to constructed normal value, or any detailed instruction on howan investigating authority should derive cost of production, SG&A, and profit data.
94Unlike the Tokyo Round Anti-Dumping Code , the present Anti-Dumping Agreement  identifies low-
volume sales as a basis for constructing normal value, including the footnote to Article 2.2 specifically defininglow-volume sales in the home market in relation to a proportion of sales made in the importing Member.(Footnote 2 to Article 2.2 of the Anti-Dumping Agreement )  This reinforces our view that a reference to "low-
volume" sales should not be implied when such reference is not expressly stated.
95Brazil's appellant's submission, paras. 81, 83, and 89.
96European Communities' appellee's submission, paras. 58-59.WT/DS219/AB/R
Page 40
It was argued in that case that the reference to "actual amounts incurred and realized" did not preclude
exclusion of sales outside the ordinary course of trade.  This reading was put forward as the properunderstanding of Article 2.2.2(ii), despite the fact that sales outside of the ordinary course of tradewere expressly excluded in the chapeau of Article 2.2.2, but not mentioned in sub-paragraph (ii).
97
We rejected that argument and found as follows:
There is no basis in Article 2.2.2(ii) for excluding  some  amounts that
were actually incurred or realized from the "actual amounts incurred
or realized".  It follows that, in the calculation of the "weighted
average",  all  of "the actual amounts incurred and realized" by other
exporters or producers must be included, regardless  of whether those
amounts are incurred and realized on production and sales made in the
ordinary course of trade or not.
…
The exclusion in the chapeau leads us to believe that, where there is
no such explicit exclusion elsewhere in the same Article of the  Anti-
Dumping Agreement , no exclusion should be implied.  And there is no
such explicit exclusion in Article  2.2.2(ii).  Article 2.2.2(ii) provides
for an  alternative  calculation method that can be employed precisely
when the method contemplated by the chapeau cannot be used.
Article 2.2.2(ii) contains its own specific requirements.  On their face,
these requirements do not call for the exclusion of sales not made in
the ordinary course of trade.  Reading into the text of Article 2.2.2(ii)
a requirement provided for  in the chapeau  of Article 2.2.2 is not
justified either by the text or by the context of Article 2.2.2(ii).98
(original italics;  underlining added).
101. We are of the view that our reasoning in  EC – Bed Linen  supports our interpretation in this
case.  We find it significant that Article 2.2.2 specifies the data to be used by an investigatingauthority when constructing normal value.  The text of that provision excludes actual data outside theordinary course of trade, but does not exclude data from low-volume sales.  The negotiators' expressreference to sales outside the ordinary course of trade  and  to low-volume sales in Article 2.2, and the
omission of a reference to low-volume sales in the chapeau of Article 2.2.2, confirms our view that
low-volume sales are not excluded from the chapeau of Article 2.2.2 for the calculation of SG&A
profits.  We therefore disagree with Brazil's argu ment that the absence of the word "all" before the
word "actual" in the chapeau of Article 2.2.2, coupled with the rationale for the construction ofnormal value under Article 2.2, implicitly incorporates an obligation to exclude data from low-volume
                                                     
97Appellate Body Report, EC – Bed Linen , paras. 33 and 44.
98Ibid., paras. 80 and 83.WT/DS219/AB/R
Page 41
sales.99  In our view, where, as in this investigation, low-volume sales are in the ordinary course of
trade, an investigating authority does not act in consistently with the chapeau of Article 2.2.2 by
including actual data from those sales to derive SG&A and profits for the construction of normalvalue.
102. For all these reasons, we uphold the Panel's finding, in paragraphs 7.138 and 7.139 of the
Panel Report, that the European Communities did not act inconsistently with Article 2.2.2 of the  Anti-
Dumping Agreement  by including actual data from "low-volume" sales in determining the amounts
for SG&A and profits for the construction of normal value.
VI. Cumulation:  Articles 3.2 and 3.3 of the  Anti-Dumping Agreement
103. We next examine Brazil's claim that the European Communities acted inconsistently with
Articles 3.2 and 3.3 of the  Anti-Dumping Agreement  by cumulatively assessing the effects of
dumped imports from several countries, including Brazil, without analyzing the volume and prices ofdumped imports from Brazil individually, pursuant to Article 3.2.
104. The Panel began its analysis by observing that the "threshold issue" it was required to
determine in addressing Brazil's claim was whether an investigating authority is permitted to conducta cumulative assessment after having concluded that the conditions of Article 3.3 are fulfilled, orwhether the investigating authority must first conduct an assessment of imports from each individualcountry in order to determine whether it may conduct a cumulative assessment at all.
100  The Panel
found, on the basis of the text in Article 3.3, and ci ting contextual support in Articles 3.4 and 3.5, that
the conditions identified in Article 3.3 are the  sole  conditions that must be satisfied by an
investigating authority in order to undertake a cumulative assessment of the effects of dumpedimports.
101  In particular, with respect to Brazil's allega tion that an investigating authority must first
consider whether country-specific import volumes have significantly increased before cumulatingthem, the Panel found as follows:
                                                     
99In this context, we note that Brazil further argues, by way of an example, that the Panel's
interpretation of the chapeau of Article 2.2.2 implies that a constructed normal value would be identical to anormal value that is based on low-volume sales prices under Article 2.2.  As a result, in Brazil's view,Article 2.2 is rendered ineffective, contrary to the principles of treaty interpretation in public international law.(Brazil's appellant's submission, paras. 89-90)  We note, as does the European Communities, that the example
posited by Brazil is premised on certain factual assump tions. (European Communities' appellee's submission,
paras. 63-65)  We are not convinced that these factual assumptions necessarily hold true for most anti-dumpinginvestigations.  We are of the view that the possibility  of the outcome suggested by Brazil, based on a certain set
of circumstances, cannot overcome the specific text of the chapeau of Article 2.2.2.
100Panel Report, para. 7.231.
101Ibid., paras. 7.234-7.235.WT/DS219/AB/R
Page 42
[T]he text of this provision [Article 3.3] contains no additional
requirement that authorities shall also consider whether there has been
a significant increase in imports country-by-country before
progressing to a cumulative assessment.102
105. Brazil argues on appeal that the volume and price analyses prescribed by Article 3.2 must first
be performed on a country-by-country basis as a pre-condition to cumulative assessment underArticle 3.3.  According to Brazil, only if such a country-specific analysis has identified the imports ofthe particular country as a likely source of negative effects on the domestic industry, is it permissibleunder Article 3.3 for an investigating authority to cumulatively assess the negative effects of allimports likely to have caused injury.
103  Because Article 3.3 does not expressly permit an
investigating authority to "derogate" from the required analyses in Article 3.2, Brazil argues that such
a derogation should not be read into the  Anti-Dumping Agreement .104  Brazil observes further that
Article 3.3 only permits cumulative assessment of the "effects" of dumped imports.  In Brazil's view,import volumes and prices cannot be considered as "effects" of imports;  on the contrary, importvolumes and prices "are precisely the factors which may cause the effects envisaged byArticle 3.4."
 105  Brazil therefore argues that import volumes and prices cannot be cumulated under
Article 3.3.106  It submits that the Panel's contrary interpretation of Articles 3.2 and 3.3 would permit
an investigating authority to impose anti-dumping duties on products from a country when thoseproducts, in contrast to those from other countries, may not be causing injury to the domesticindustry.
107
106. The European Communities submits that the text of Article 3.3 refers only to negligible
import volumes from each country and that, therefore, no further analysis of country-specific importvolumes is required before cumulation is permitted.
108  The European Communities further argues that
Brazil's alleged distinction between "factors" and "effects" cannot be reconciled with the text ofvarious provisions of Article 3.  In particular, the European Communities notes that Article 3.5 refersto the "effects" set forth in Article 3.2, which in turn prescribes analyses of volume and prices.
109  The
European Communities also explains that Article 3.4 requires an examination of the "impact" of the
                                                     
102Panel Report, para. 7.234.
103Brazil's statement at the oral hearing.
104Brazil's appellant's submission, para. 105.
105Brazil's statement at the oral hearing.
106Brazil's appellant's submission, para. 99.
107Ibid., paras. 109 and 113.
108European Communities' appellee's submission, para. 88.
109Ibid., para. 85.WT/DS219/AB/R
Page 43
dumped imports (which the European Communities considers to be synonymous with the "effects" of
the dumped imports) on the basis of an evaluation of fifteen "factors".  This shows, according to the
European Communities, that "effects" and "factors" are treated in the same way in Article 3.  110  The
European Communities asserts that the legal interpretation provided by the Panel properly recognizes
that a country-by-country examination of import volumes would be inconsistent with the object and
purpose of cumulation, which is to permit investigating authorities to impose anti-dumping duties ondumped imports from several countries if they cause injury.
111
107. The issue before us is whether an investigating authority must first analyze the volumes and
prices of dumped imports on a country-by-country basis under Article 3.2 as a pre-condition tocumulatively assessing the effects of the dumped imports under Article 3.3.
108. We begin our analysis with the text of Article 3.3, which is the only provision in the  Anti-
Dumping Agreement  that  specifically   addresses the practice of cumulation.
112  That Article provides:
Where imports of a product from more than one country are
simultaneously subject to anti-dumping investigations, the
investigating authorities may cumulatively assess the effects of such
imports only if they determine that (a) the margin of dumping
established in relation to the imports from each country is more than
de minimis   as defined in paragraph 8 of Article 5 and the volume of
imports from each country is not negligible and (b) a cumulative
assessment of the effects of the imports is appropriate in light of the
conditions of competition between the imported products and theconditions of competition between the imported products and the like
domestic product.
109. The text of Article 3.3 expressly identifies three conditions that must be satisfied before an
investigating authority is permitted under the  Anti-Dumping Agreement  to assess cumulatively the
effects of imports from several countries.  These conditions are:
(a) the dumping margin from each individual country must be more than  de minimis ;
(b) the volume of imports from each individual country must not be negligible;  and
(c) cumulation must be appropriate in the light of the conditions of competition
                                                     
110European Communities' appellee's submission, para. 83.
111European Communities' response to questioning at the oral hearing.
112The Tokyo Round Anti-Dumping Code  contained no provision regarding cumulation, and the
consistency of the practice of cumulation with the Code was an issue of disagreement.  Article 3.3 of the Anti-
Dumping Agreement  clarifies the permissibility of the practice of cumulation.WT/DS219/AB/R
Page 44
(i) between the imported products;  and
(ii) between the imported products and the like domestic product.
By the terms of Article 3.3, it is "only if" the above conditions are established that an investigating
authority "may" make a cumulative assessment of the effects of dumped imports from severalcountries.
113
110. We find no basis in the text of Article 3.3 for Brazil's assertion that a country-specific analysis
of the potential negative effects of volumes and prices of dumped imports is a pre-condition for acumulative assessment of the effects of all dumped imports.  Article 3.3 sets out expressly theconditions that must be fulfilled before the investigating authorities may cumulatively assess theeffects of dumped imports from more than one country.  There is no reference to the country-by-
country volume and price analyses that Brazil contends are pre-conditions to cumulation.  In fact,
Article 3.3 expressly requires an investigating auth ority to examine country-specific volumes, not in
the manner suggested by Brazil, but for purposes of  determining whether the "volume of imports from
each country is not negligible".
111. Nor do we find a basis for Brazil's argument in Article 3.2, which reads:
With regard to the volume of the dumped imports, the investigating
authorities shall consider whether there has been a significant
increase in dumped imports, either in absolute terms or relative to
production or consumption in the importing Member.  With regard to
the effect of the dumped imports on prices, the investigatingauthorities shall consider whether there has been a significant price
undercutting by the dumped imports as compared with the price of a
like product of the importing Member, or whether the effect of such
imports is otherwise to depress prices to a significant degree or
prevent price increases, which otherwise would have occurred, to a
significant degree.  No one or several of these factors can necessarily
give decisive guidance.
In stipulating how to undertake the analyses of volume and prices, Article 3.2 refers consistently to
the "dumped imports".  There is no indication in the text of Article 3.2 that the analyses of volume
                                                     
113Brazil does not contest the fulfilment by the European Commission in this investigation of the
Article 3.3 conditions relating to dumping margins and volume negligibility. (Panel Report, footnote 218 to
para. 7.230)  Brazil also does not appeal the findings of the Panel with regard to Brazil's challenge to the
European Commission's evaluation of the conditions of competition. ( Ibid., paras. 7.237-7.266)  Therefore, no
challenge has been made before us to the European Commission's conclusion that the conditions of Article 3.3had been met.WT/DS219/AB/R
Page 45
and prices must be performed on a country-by-count ry basis where an investigation involves imports
from several countries.114
112. Examining the general structure of Article 3, we note that the requirement to analyze volumes
and prices under Article 3.2 stems from Article 3.1, which we have said is "an overarching provision
that sets forth a Member's fundamental, substantive obligation" with respect to the determination of
injury and that "informs the more detailed obligations in [the] succeeding paragraphs" of thatprovision.
115  Article 3.1 provides:
A determination of injury for purposes of Article VI of GATT 1994
shall be based on positive evidence and involve an objective
examination of both (a) the volume of the dumped imports and the
effect of the dumped imports on prices in the domestic market for
like products, and (b) the consequent impact of these imports on
domestic producers of such products.
Here again we find that the text of this provision refers to the "dumped imports" and gives no
indication that the analyses of volume and prices of the "dumped imports" must be country-specific in
multiple-country investigations.  Article 3.4, which contains requirements also stemming from
Article 3.1 and that relate to the examination of the impact of the "dumped imports" on the domesticindustry, is equally consistent in referring broadly to the "dumped imports".  Therefore, in our view,
Brazil's argument that country-specific analyses  of volumes and prices are a pre-condition for
cumulation in multiple-country investigations, has no basis in either the text or the immediate contextof Articles 3.2 and 3.3.
113. We also believe that cumulation without a country-specific analysis does not result in a
"derog[ation]" of Article 3.2, as Brazil has asserted.
116  We wish to emphasize that Article 3.2 plays a
central role in the determination of injury and is  a necessary step in any anti-dumping investigation.117
                                                     
114Brazil's thesis is further predicated on the assumption that if no significant increase in dumped
imports (either in absolute terms or relative to production and consumption in the importing Member) werefound originating from a specific country under Article 3.2, then those imports would have to be excluded fromcumulative assessment under Article 3.3. (Brazil's response to questioning at the oral hearing)  However, wefind no support for this argument in the text of Article 3.2 itself:  significant increases in imports have to be
"consider[ed]" by investigating authorities under Article 3.2, but the text does not indicate that in the absence of
such a significant increase, these imports could not be found to be causing injury.
115Appellate Body Report, Thailand – H-Beams , para. 106.
116Brazil's appellant's submission, para. 105.
117In this regard, we recall our statement in  EC – Bed Linen (Article 21.5 – India) , that "the right under
Article 3.3 to conduct anti-dumping investigations with respect to imports from different exporting countries
does not absolve investigating authorities from the requirements of paragraphs 1 and 2 of Article 3 to determine
the volume of dumped imports on the basis of 'positive evidence' and an 'objective examination'." (Appellate
Body Report, EC – Bed Linen (Article 21.5 – India) , para. 145)WT/DS219/AB/R
Page 46
As the Panel correctly observed, it is possible for the analyses of volume and prices envisaged under
Article 3.2 to be done on a cumulative basis, as opposed to an individual country basis, when dumpedimports originate from more than one country.
118
114. We now turn to Brazil's argument based on the fi ne distinction that it sees between "factors"
and "effects".  According to Brazil, volumes and prices are "factors" that cause the "effects" envisaged
by Article 3.4, but they cannot be considered in themselves as  effects  of imports which may be
cumulatively assessed under Article 3.3.119
115. We are unable to see such a fine distinction in Article 3 of the   Anti-Dumping Agreement .
First, we cannot overlook the fact that Article 3.5 refers to the " effects  of dumping, as set forth in
paragraphs 2 and 4". (emphasis added)  This reference directly contradicts Brazil's contention thatvolumes and prices are contemplated solely as "factors" under Article 3.2.
120  In addition, Article 3.1
and the succeeding paragraphs of Article 3 clearly indicate that volume and prices, and the consequentimpact on the domestic industry, are closely interrelated for purposes of the injury determination.
These provisions, moreover, do not suggest that a strict labelling of volume and prices as "factors", as
opposed to "effects", is intended, because the terms "factors" and "effects" appear to be usedinterchangeably in Article 3.  For example, Article 3.4 uses the term "factors" when referring tovariables that must be examined in the context of the examination of the "impact" of the dumpedimports on the domestic industry, and Brazil recognizes that there is no distinction between the terms"impact" and "effects" as they are used in Article 3.
121  Therefore, the text of Article 3 does not
support Brazil's contention that volume and prices are deemed exclusively to be "factors", and not"effects", for the purposes of Article 3.3 of the  Anti-Dumping Agreement .
116. The apparent rationale behind the practice of cumulation confirms our interpretation that both
volume and prices qualify as "effects" that may be cumulatively assessed under Article 3.3.  Acumulative analysis logically is premised on a recognition that the domestic industry faces the impactof the "dumped imports" as a whole and that it may be injured by the total impact of the dumped
                                                     
118Panel Report, para. 7.231.
119Brazil's statement at the oral hearing.
120European Communities' appellee's submission, para. 85.
121We understand that the participants in this appeal do not dispute that the determination of the
"impact" of dumped imports on the domestic industry must be done on a collective basis taking the dumpedimports as a whole.  We also understand that they consider the words "impact" and "effects" occurring inArticle 3 to be synonyms or equivalents.WT/DS219/AB/R
Page 47
imports, even though those imports originate from various countries.  If, for example, the dumped
imports from some countries are low in volume or are declining, an exclusively country-specificanalysis may not identify the causal relationship between the dumped imports from those countriesand the injury suffered by the domestic industry.  The outcome may then be that, because imports
from such countries could not  individually  be identified as causing injury, the dumped imports from
these countries would not be subject to anti-dumpi ng duties, even though they are in fact causing
injury.  In our view, therefore, by expressly providing for cumulation in Article 3.3 of the  Anti-
Dumping Agreement , the negotiators appear to have recognized that a domestic industry confronted
with dumped imports originating from several countries may be injured by the cumulated effects ofthose imports, and that those effects may not be adequately taken into account in a country-specificanalysis of the injurious effects of dumped imports.  Consistent with the rationale behind cumulation,we consider that changes in import volumes from individual countries, and the effect of thosecountry-specific volumes on prices in the importing country's market, are of little significance in
determining whether injury is being caused to the domestic industry by the dumped imports as a
whole.
122
117. By seeking to place additional obligations on investigating authorities beyond those specified
in Article 3.3, namely, that investigating authorities first determine  on a country-specific basis  the
existence of significant increases in dumped imports, and their potential for causing injury to thedomestic industry, Brazil ignores the role of cumulation in ensuring that each of the multiple sourcesof "dumped imports" that cumulatively contribute to a domestic industry's material injury be subjectto anti-dumping duties.
123  We therefore agree with the Panel that Brazil's interpretation of the
relationship between Articles 3.2 and 3.3 "would undermine the very concept of a cumulative
analysis."  124
                                                     
122We do not suggest that trends in country-specific volumes are always irrelevant for an investigating
authority's consideration.  For example, such trends may be relevant in the context of an investigating authority's
evaluation of the conditions of competition between imported products, and between imported products and thedomestic like product, as provided for in Article 3.3(b).  Brazil raised the relationship between import volumesand conditions of competition as the basis for a claim under that provision before the Panel. (Panel Report,para. 7.252)  The Panel found that the divergences in volume trends between Brazilian imports and those of
other countries did not compel a finding by the European Commission that the effects of Brazilian imports could
not be appropriately assessed on a cumulated basis wi th the effects of imports from other countries. ( Ibid.,
paras. 7.253-7.256)  Brazil has not appealed the Panel's finding in this respect.
123In any event, a determination of import volumes on a country-by-country basis appears to be
necessary in the process of assessing "negligibility" of volumes from each country and in summing up thosevolumes to arrive at the total volume of dumped imports.  In fact, the European Communities claimed before thePanel that it "did effectively consider the issue of significant volume increase of imports from Brazil inisolation." (Panel Report, para. 7.222)  The Panel made no finding on this issue, however.
124Panel Report, para. 7.234.WT/DS219/AB/R
Page 48
118. For these reasons, we uphold the finding of the Panel, in paragraphs 7.234-7.236 of the Panel
Report, that the European Communities did not act inconsistently with Articles 3.2 or 3.3 of the  Anti-
Dumping Agreement , even though the European Commission did not analyze the volume and prices
of dumped imports from Brazil individually, pursuant to Article 3.2, as a pre-condition to
cumulatively assessing the effects of the dumped imports under Article 3.3.
VII. Exhibit EC-12:  Articles 3.1, 3.4, and 17.6(i) of the  Anti-Dumping Agreement
119. We turn next to Brazil's claims relating to Exhibit EC-12, an "internal 'note for the file'"
submitted by the European Communities to the Panel in the context of the Panel's assessment of theevaluation of the injury factors listed in Article 3.4 of the  Anti-Dumping Agreement .
125  Exhibit
EC-12 sets out the European Commission's consideration of certain injury factors listed in Article 3.4,
namely return on investments, wages, productivity, cash flow, ability to raise capital, and magnitude
of the margin of dumping.126  The document was not disclosed to the interested parties during the
course of the anti-dumping investigation.127
120. Brazil expressed doubts before the Panel about whether Exhibit EC-12 formed part of the
record of the underlying anti-dumping investigation and requested the Panel to find that ExhibitEC-12 was not properly before it.
128  The Panel found that:
Given the EC responses, we find no basis to question whether Exhibit
EC-12 forms part of the record of the underlying investigation and wemust consequently take its contents into account in our examination of
the relevant substantive claims made by Brazil.
129
The Panel therefore "decline[d] Brazil's request … to rule that Exhibit EC-12 [was] not properly
before [it]."  130  After examining other issues raised by Brazil in relation to the injury determination,
                                                     
125Panel Report, para. 7.42.  Exhibit EC-12 is an unsigned, two-page document, attached to which are
two pages of tables and graphs.  The document is produced on European Commission letterhead.  It is dated14 April 2000.  The  Provisional Regulation is dated 28 February 2000, and the Definitive Regulation is dated11 August 2000.
126Panel Report, para. 7.341.
127Ibid., para. 7.45.
128Ibid., para. 7.43.
129Ibid., para. 7.46.  The Panel, however, "deplore[d] the fact that this information, or an accurate non-
confidential summary of any confidential information contai ned therein, was not disclosed to interested parties
during the investigation, and that the fact of consideration of the elements discussed in EC-12 is not directly
discernible from the published documents." ( Ibid., para. 7.45) (original emphasis)
130Ibid., para. 7.47.WT/DS219/AB/R
Page 49
the Panel concluded that the European Communities did not act inconsistently with its obligations
under Articles 3.1 or 3.4 of the  Anti-Dumping Agreement   in the evaluation of the injury factors.131
121. Brazil claims that the Panel incorrectly interpreted Articles 3.1 and 3.4, and that the Panel
failed to assess whether the European Commission's establishment of the facts was proper under
Article 17.6(i) of the  Anti-Dumping Agreement . 132
A. Article 17.6(i) of the  Anti-Dumping Agreement
122. We begin our examination with Brazil's claim under Article 17.6(i) of the  Anti-Dumping
Agreement .  Brazil recognizes that, in assessing the facts of the matter, panels enjoy discretion as
triers of facts.133  Nevertheless, Brazil asserts that, in this case, the Panel did not properly exercise its
discretion because "it based its findings as to the contemporaneous nature of Exhibit EC-12
exclusively on a mere unsubstantiated assertion from the EC which was accepted by the Panel on the
basis of a presumption of good faith."  134 According to Brazil, "[n]o positive facts were available to
support such a finding."  135
123. The European Communities rejects Brazil's suggestion that the sole justification given by the
Panel for accepting the validity of Exhibit EC-12 was the European Communities' assertion that thedocument was indeed valid.
136  The European Communities also contends that it was within the
Panel's discretion to decide the extent to which it relied on the presumption of good faith.137
                                                     
131Panel Report, para. 7.342.
132In its Notice of Appeal, Brazil also included a cl aim that the Panel breached its obligations under
Article 11 of the DSU. (Notice of Appeal, p.3, attached as Annex 1 to this Report)  However, Brazil confirmedat the oral hearing that it is pursuing only its claim under Article 17.6(i) of the  Anti-Dumping Agreement.  Brazil
also raised Article 17.5(ii) of the Anti-Dumping Agreement , arguing that, to the extent that the Panel failed to
examine properly the contemporaneous character of Exhibit EC-12, the Panel did not examine the matter based
upon "the facts made available in conformity with appropriate domestic procedures to the authorities of theimporting Member".  Brazil's allegation under Article 17.5(ii)  is thus part of its claim under Article 17.6(i) that
the Panel erred in finding that Exhibit EC-12 formed part of the record of the underlying anti-dumpinginvestigation. (Brazil's appellant's submission, paras. 135 and 153)  Brazil made no separate arguments in its
pleadings regarding Article 17.5(ii).
133Brazil's appellant's submission, para. 143.
134Brazil's statement at the oral hearing.
135Ibid.
136European Communities' response to questioning at the oral hearing.
137European Communities' appellee's submission, para. 124.WT/DS219/AB/R
Page 50
124. The issue before us is whether the Panel's assessment of the facts was proper, under
Article 17.6(i) of the  Anti-Dumping Agreement , when it found that Exhibit EC-12 formed part of the
record of the underlying anti-dumping investigation.138  Article 17.6 reads, in relevant part:
In examining the matter referred to in paragraph 5:
(i) in its assessment of the facts of the matter, the
panel shall determine  whether the authorities'
establishment of the facts was proper andwhether their evaluation of those facts was
unbiased and objective.  If the establishment of
the facts was proper and the evaluation was
unbiased and objective, even though the panel
might have reached a different conclusion, theevaluation shall not be overturned[.]
125. We recently stated, in  EC – Bed Linen (Article 21.5 – India
 ), that "we 'will not interfere
lightly with [a] panel's exercise of its discretion' under Article 17.6(i) of the  Anti-Dumping
Agreement ." 139  In that appeal, we also explained that "[a]n appellant must persuade us, with
sufficiently compelling reasons, that we should disturb a panel's assessment of the facts or interferewith a panel's discretion as the trier of facts."
 140  In this appeal, Brazil has not offered sufficiently
compelling reasons to persuade us that we should disturb the Panel's finding that Exhibit EC-12 is partof the record of the underlying anti-dumping investigation.
126. Brazil's claim rests, in our view, on an incorrect characterization of the Panel's reasoning.
Brazil asserts that, in reaching its finding on this issue, the Panel relied  solely  on the European
Communities' assertion that Exhibit EC-12 was produced during the investigation.
141  We disagree.
Indeed, we find in the following excerpt from the Panel Report evidence that the Panel inquired into
the genuineness of Exhibit EC-12:
                                                     
138Brazil is not challenging on appeal the contents of Exhibit EC-12. (Brazil's response to questioning
at the oral hearing)
139Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 169, quoting Appellate Body
Report, US – Wheat Gluten , para. 151.
140Ibid., para. 170.
141Brazil's statement at the oral hearing.WT/DS219/AB/R
Page 51
We asked the European Communities to indicate in the record of the
investigation the sources of information and the methodology on
which the statements and information in Exhibit EC-12 are based.
The European Communities gave an account of the methodology and
the sources of information on the basis of which the statements inExhibit EC-12 were made.  We further asked the European
Communities to confirm and substantiate to us that Exhibit EC-12
was written within the time period of the investigation.  The European
Communities confirmed that this was the case.  Given the EC
responses, we find no basis to question whether Exhibit EC-12 forms
part of the record of the underlying investigation and we must
consequently take its contents into account in our examination of therelevant substantive claims made by Brazil.
142 (footnotes omitted)
127. This excerpt demonstrates that the Panel took into account the European Communities'
responses to its questions before reaching its finding.143  It also indicates that the Panel did not rely
exclusively on the presumption of good faith, as Brazil suggests, given that some of the Panel'squestions were directed at the  validity  of Exhibit EC-12.  If the Panel had placed total reliance on the
presumption of good faith, it would have simply accepted the European Communities' assertion thatExhibit EC-12 formed part of the record of the investigation and would not have posed questions to
assess the consistency of Exhibit EC-12 with other evidence contained in the record.  Therefore, weare satisfied that the Panel "took steps to assure [itself] of the validity of [Exhibit EC-12] and of thefact that it forms part of the contemporaneous written record of the EC investigation."
 144
128. In addition, to the extent that Brazil may be understood to be calling into question the value
placed by the Panel on the responses given by the European Communities, relative to that accorded to
Brazil's own assertions, these allegations can only be regarded as directed at the Panel's appreciationof the evidence.  In making such a claim under Article 17.6(i), it is not sufficient for Brazil simply todisagree with the Panel's weighing of the evidence, without substantiating its claim of error by thePanel.  As we have recently reiterated, "[i]t is not 'an error, let alone an egregious error', for the Panelto have declined to accord to the evidence the weig ht" that one of the parties sought to have accorded
                                                     
142Panel Report, para. 7.46.
143At the oral hearing, Brazil suggested that the Pane l had made two separate inquiries:  one related to
the "validity" of Exhibit EC-12, the other directed at wh ether the document formed part of the record of the anti-
dumping investigation.  According to Brazil, although the European Communities' responses about themethodology and sources of information that underlie Exhibit EC-12 could have been considered evidence ofthe document's validity, they do not support the European Communities' assertion that the document was
produced  during  the anti-dumping investigation. (Brazil's response to questioning at the oral hearing)  We do
not agree with Brazil's contention that the Panel made separate inquiries as to the "validity" of Exhibit EC-12,on the one hand, and when it was produced, on the other.  The Panel, in our view, conducted an overall inquiryinto the genuineness of Exhibit EC-12, including whether it formed part of the record of the anti-dumpinginvestigation, and arrived at an overall finding on the basis of the results of that inquiry.
144Panel Report, para. 7.307.WT/DS219/AB/R
Page 52
to it.145  Based on our reading of the Panel Record, Brazil did not substantiate its allegation that
Exhibit EC-12 was not contemporaneous with the in vestigation.  In these circumstances, we are
unable to conclude that the Panel's assessment was in error.  Therefore, we reject Brazil's claim thatthe Panel failed to assess whether the establishment of the facts was proper pursuant to Article 17.6(i)
of the  Anti-Dumping Agreement , when it found that Exhibit EC-12 was part of the record of the
underlying anti-dumping investigation.
B. Articles 3.1 and 3.4 of the  Anti-Dumping Agreement
129. We proceed to Brazil's claim that the Panel incorrectly interpreted the requirements of
Articles 3.1 and 3.4 of the  Anti-Dumping Agreement .  At the oral hearing, Brazil clarified that it is not
alleging that the Panel erred by relying on our Report in  Thailand – H-Beams  in reaching its finding
that it was " required " to include Exhibit EC-12 in its examinat ion, despite the fact that Exhibit EC-12
was not disclosed to the interested parties during the anti-dumping investigation.
146  Rather, Brazil
asserts that the issue here is that there was no verifiable evidence of the contemporaneous character ofExhibit EC-12
 147 and, therefore, the European Communities was not entitled to rely on that document
to evidence its compliance with Articles 3.1 and 3.4 of the  Anti-Dumping Agreement .
130. Article 3.4 of the  Anti-Dumping Agreement  provides:
The examination of the impact of the dumped imports on the
domestic industry concerned shall include an evaluation of allrelevant economic factors and indices having a bearing on the state of
the industry, including actual and potential decline in sales, profits,
output, market share, productivity, return on investments, or
utilization of capacity;  factors affecting domestic prices;  the
magnitude of the margin of dumping;  actual and potential negativeeffects on cash flow, inventories, employment, wages, growth, ability
to raise capital or investments.  This list is not exhaustive, nor can
one or several of these factors necessarily give decisive guidance.
131. This provision requires an investigating authority to evaluate all relevant economic factors in
its examination of the impact of the dumped imports.  By its terms, it does not address the manner in
which the results of this evaluation are to be set out, nor the type of evidence that may be produced
before a panel for the purpose of demonstrating that this evaluation was indeed conducted.
148  The
                                                     
145Appellate Body Report, EC – Bed Linen (Article 21.5 – India),  para. 177, quoting Appellate Body
Report, Korea – Alcoholic Beverages , para. 164. (footnote omitted)
146Panel Report, para. 7.45, citing Appellate Body Report, Thailand – H-Beams , paras. 107, 111,
and 118. (original emphasis)
147Brazil's response to questioning at the oral hearing.
148See infra , paras. 157-159.WT/DS219/AB/R
Page 53
provision simply requires Members to include an evaluation of all relevant economic factors in its
examination of the impact of the dumped imports.  In this dispute, the European Communitiessubmitted Exhibit EC-12 as the only evidence that its investigating authority evaluated certain of thefactors listed in Article 3.4.
149  Upon satisfying itself that Exhibit EC-12 formed part of the record of
the investigation—a finding that we have found to  be consistent with the Panel's obligations under
Article 17.6(i)—the Panel was entitled to rely on Exhibit EC-12 in assessing whether the EuropeanCommunities evaluated all of the injury factors listed in Article 3.4.
132. Turning to Brazil's allegations relating to Article 3.1, we fail to see any basis for Brazil's
allegations that the Panel incorrectly interpreted the requirement to determine injury on the basis of
positive evidence and involving an objective examination.  Once the Panel found that Exhibit EC-12did form part of the record of the underlying anti-dumping investigation—a finding we do notdisturb—there was no longer any reason for the Pane l to find that Exhibit EC-12 did not constitute
"positive evidence", in the sense of the evidence being of an "affirmative, objective and verifiable
character, and … credible", or to find that the evaluation in Exhibit EC-12 did not constitute an
"objective examination", in the sense of it being "unbiased".
150  Brazil has not put forward any reason
to substantiate a violation of Article 3.1 other than the rejected allegation that Exhibit EC-12 did notform part of the contemporaneous record of the anti-dumping investigation.
133. For these reasons, we find that the Panel did not fail to assess whether the European
Commission's establishment of the facts was proper under Article 17.6(i), and did not incorrectlyinterpret the requirements of Articles 3.1 and 3.4 of the  Anti-Dumping Agreement   by including
Exhibit EC-12 within its assessment of the Europ ean Commission's evaluation of the injury factors
listed in Article 3.4.  We therefore uphold the finding, in paragraphs 7.46 and 7.47 of the Panel
Report, that Exhibit EC-12 was properly before the Panel.
                                                     
149Panel Report, para. 7.42.  We recall that Brazil is not challenging on appeal the contents of Exhibit
EC-12.  See supra , footnote 138.
150Appellate Body Report, US - Hot-Rolled Steel , paras. 192-193.WT/DS219/AB/R
Page 54
VIII.  Disclosure of Information:  Articles 6.2 and 6.4 of the  Anti-Dumping Agreement
134. We examine next Brazil's claim that the Panel erred in finding that the European
Communities did not act inconsistently with Articles 6.2 and 6.4 of the  Anti-Dumping Agreement   by
failing to disclose the information contained in Exhibit EC-12.
135. The Panel found that the information in Exhibit EC-12 "was considered not relevant and was
not specifically relied upon by the EC in reaching the anti-dumping determination" and that, therefore,the Brazilian exporter was not "deprived of timely opportunities to see information relevant to its casenor of an opportunity for defence of its interests."
 151  Thus, the Panel found that "the European
Communities has not violated Articles 6.2 and 6.4 with respect to the information on injury factorsreferred to exclusively in Exhibit EC-12."
 152
136. On appeal, Brazil claims that the Panel based its finding on an incorrect interpretation of the
obligations arising from Articles 6.2 and 6.4 of the  Anti-Dumping Agreement .  Brazil asserts that
"the findings of the investigating authorities regarding each of these factors [listed in Article 3.4] arenecessarily 'relevant' within the meaning of Article 6.4."
 153  In Brazil's view, the Panel erred in finding
that the European Commission could decide whether the information contained in Exhibit EC-12 hadany "added value" for the parties and was relevant within the meaning of Article 6.4, and whether theinformation related to the defence of the parties' interests within the meaning of Article 6.2.
154
137. The European Communities agrees with the Panel's ultimate conclusion on Article 6.4, but
disagrees with the Panel's interpretation of that provision.155  According to the European
Communities, the term "information" in Article 6.4 does not include "the reasoning that the
authorities applied to the data they have collected."  156  The European Communities asserts that it had
no obligation to disclose Exhibit EC-12 because its contents do not constitute "information" in thesense of Article 6.4;  rather, Exhibit EC-12 contains its investigating authority's conclusions withrespect to the data that had been collected, and the "raw data" had been disclosed to the interested
                                                     
151Panel Report, para. 7.348.
152Ibid., para. 7.349.  The Panel, however, found a violation of Articles 12.2 and 12.2.2 of the Anti-
Dumping Agreement  because "it is not directly discernible from the published Provisional or Definitive
Determination that the European Communities addressed or explained the lack of significance of certain listedArticle 3.4 factors."  ( Ibid., para. 7.435)  This finding has not been appealed.
153Brazil's appellant's submission, para. 176. (underlining omitted)
154Ibid., para. 177.
155European Communities' appellee's submission, para. 153.  However, the European Communities has
not appealed this interpretation.
156Ibid., para. 146.WT/DS219/AB/R
Page 55
parties.157  With respect to Article 6.2, the European Communities asserts that, although the first
sentence contains a right that is "very general in nature", it does not "impose a specific obligation oninvestigating authorities to inform interested part ies of the legal basis for its final determination on
injury during the course of an investigation".
158
138. At the outset, we wish to underscore the importance of the obligations contained in Article 6
of the  Anti-Dumping Agreement .  This Article "establishes a framework of procedural and due
process obligations".159  Its provisions "set out evidentiary rules that apply  throughout  the course of
the anti-dumping investigation, and provide also for due process rights that are enjoyed by 'interestedparties'  throughout  such an investigation".
160
139. We begin our analysis of Brazil's claims with Article 6.4, which reads:
The authorities shall whenever practicable provide timely
opportunities for all interested parties to see all information that isrelevant to the presentation of their cases, that is not confidential as
defined in paragraph 5, and that is used by the authorities in an
anti-dumping investigation, and to prepare presentations on the basis
of this information.
140. At the oral hearing, the European Communities conceded that Exhibit EC-12 contains more
than the conclusions or reasoning of its investiga ting authority because the document also contains "a
summary of the raw data" on some of the injury factors listed in Article 3.4.
161  The European
Communities did not deny that the data are "information" for purposes of the disclosure requirementsof Article 6.4.
162  Instead, the European Communities asserted that, despite the fact that Exhibit EC-12
also contains data, it was under no obligation to disclose the document because the raw data used toprepare Exhibit EC-12 had been disclosed to the interested parties to the extent that it was compatible
with confidentiality requirements.
163
                                                     
157European Communities' response to questioning at the oral hearing.
158European Communities' appellee's submission, para. 149, quoting Panel Report, Guatemala –
Cement II , para. 8.238.
159Appellate Body Report, Thailand – H-Beams , para. 109.
160Appellate Body Report, EC – Bed Linen (Article 21.5 - India) , para. 136. (emphasis added)
161European Communities' response to questioning at the oral hearing.
162We note also that the Panel refers to the "information" in Exhibit EC-12.  See, for example, Panel
Report, paras. 7.45 and 7.349.
163European Communities' response to questioning at the oral hearing.WT/DS219/AB/R
Page 56
141. We observe, however, that the European Communities' contention that the data in Exhibit
EC-12 had been disclosed to the interested parties during the anti-dumping investigation cannot bereconciled with the Panel's finding of fact on this matter.  The Panel noted that "the information inExhibit EC-12 was not disclosed in  any form  to the interested parties in the course of the
investigation."
 164  This appears, to us, to be an unequivocal factual finding.165  The European
Communities has not challenged this finding on appeal and, therefore, we decline to review it, inconformity with Article 17.6 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes .
142. Thus, we turn to an examination of whether the Panel was correct in concluding that the
European Communities was under no obligation to disclose Exhibit EC-12 during the anti-dumpinginvestigation.  Article 6.4 requires that, "whenever practicable", investigating authorities providetimely opportunities for all interested parties to see and prepare presentations on the basis of "allinformation" that meets the following criteria:
(a) the information is relevant to the presentation of the interested parties' cases;
(b) the information is not confidential as defined in Article 6.5;  and
(c) the information is used by the authorities in an anti-dumping investigation.
143. The European Communities has not asserted in any of its submissions that it was not
"practicable" to disclose Exhibit EC-12.  In addition, the European Communities acknowledged at theoral hearing that Exhibit EC-12 di d not contain confidential information covered by Article 6.5 of the
 Anti-Dumping Agreement .
166  We will therefore limit our examination to determining whether the
information in Exhibit EC-12 was "relevant" to th e interested parties and "used" by the European
Commission.
144. We recall that the Panel found that the Brazilian exporter was "not deprived of timely
opportunities to see information relevant to its cas e" because the "information [in Exhibit EC-12] was
considered not relevant and was not specifically relied upon by the EC in reaching the anti-dumpingdetermination."
 167  In our view, the Panel incorrectly interpreted the requirement in Article 6.4 that
                                                     
164Panel Report, para. 7.45. (emphasis added)
165In paragraph 7.348 of the Panel Report, the Panel states that the "European Communities also
gathered and analysed data with respect to the injury  factors referred to exclusively in Exhibit EC-12, but
essentially concluded that this data was 'in line' with other data (that was disclosed)".  The use of the adjective
"other" to describe the data that were disclosed indicates, to us, that the Panel did not mean to imply that the
disclosed data were the same as the data that are contained in Exhibit EC-12.
166European Communities' response to questioning at the oral hearing.
167Panel Report, para. 7.348.WT/DS219/AB/R
Page 57
the information be "relevant", and it incorrectly applied the requirement that the information be
"used" by the investigating authorities.
145. We turn first to the requirement that the in formation be "relevant".  From the Panel's
reasoning, it is apparent that it read this requirement to mean "relevant" from the perspective of the
investigating authority .  We disagree.  Article 6.4 refers to "provid[ing] timely opportunities for all
interested parties to see all information that is relevant to the presentation of  their  cases". (emphasis
added)  The possessive pronoun "their" clearly refers to the earlier reference in that sentence to"interested parties".  The investigating authorities are not mentioned in Article 6.4 until later in thesentence, when the provision refers to the additional requirement that the information be "used by theauthorities".  Thus, whether or not the investigatin g authorities regarded the information in Exhibit
EC-12 to be relevant does not determine whether th e information would in fact have been "relevant"
for the purposes of Article 6.4.
146. This conclusion is supported by our reasoning in  US – Hot Rolled Steel ,  where we explained
that "Article 3.4 lists certain factors  which are deemed to be relevant in every investigation  and which
must always be evaluated by the investigating authorities."
 168  Thus, because Exhibit EC-12 contains
information on some of the injury factors listed in Article 3.4, and the injury factors listed in thatprovision "are deemed to be relevant in every investigation", Exhibit EC-12 must be considered tocontain information that is relevant to the investigation carried out by the European Commission.  Assuch, the information in Exhibit EC-12 was necessarily relevant to the presentation of the interestedparties' cases and is, therefore, "relevant" for purposes of Article 6.4.
147. We disagree also with the Panel's conclusion on  whether the investigating authorities "used"
the information in Exhibit EC-12.  The Panel did not expressly determine that the European
Commission did not "use" the information in E xhibit EC-12 as contemplated under Article 6.4.
Instead, the Panel stated that the information in Exhibit EC-12 "was not specifically relied upon by
the EC in reaching the anti-dumping determination".
169  It appears that the Panel arrived at this
conclusion because, in its view, the European Commission had "essentially concluded that this datawas 'in line' with other data (that was disclosed) and that there was no 'value added' to the substance oftheir investigation in the analysis of these factors."
 170  In our view, however, the Panel's reasoning
overlooks the fact that the European Commission was required to evaluate all the injury factors listed
                                                     
168Appellate Body Report, US – Hot-Rolled Steel , para. 194. (emphasis added)
169Panel Report, para. 7.348.
170Ibid.WT/DS219/AB/R
Page 58
in Article 3.4, and the evaluation of some of these factors is set out exclusively in Exhibit EC-12.171
In other words, Exhibit EC-12 relates to a requir ed step in the anti-dumping investigation.  The
European Communities relies on Exhibit EC-12 as the  sole evidence  that it performed this required
step.  As we see it, this necessarily leads to the conclusion that the information in Exhibit EC-12 was
in fact "used" by the European Commission in the anti-dumping investigation and that, therefore,
Exhibit EC-12 also satisfies this criterion of Article 6.4.  Thus, the European Communities was notentitled to exclude this information on the basis that it did not consider that it provided "value added"to the investigation.
148. Therefore, we are of the view that the information contained in Exhibit EC-12 should have
been disclosed to the interested parties, pursuant to Article 6.4, because the information was relevantto the interested parties, used by the European Commission in the investigation, and not confidential.
149. The European Communities recognized during the oral hearing that a finding of violation in
this case under Article 6.4 would necessarily entail a violation of Article 6.2.
172  We are also of the
view that, by failing to meet its legal obligation to disclose Exhibit EC-12, the European Communities
did not afford the Brazilian exporter "a full opportunity for the defence of [its] interests" as requiredunder Article 6.2 of the  Anti-Dumping Agreement .  One of the stated objectives of the disclosure of
information required under Article 6.4 is to allow interested parties "to prepare presentations on thebasis of this information".  The "presentations" referred to in Article 6.4, whether written or oral,logically are the principal mechanisms through which an exporter subject to an anti-dumpinginvestigation can defend its interests.  Thus, by failing to disclose Exhibit EC-12 and therebydepriving the Brazilian exporter of an opportunity to present its defence, the European Communities
did not act consistently with Article 6.2.
150. For all these reasons, we reverse the Panel's finding in paragraphs 7.348 and 7.349 of the
Panel Report and find, instead, that the European Communities acted inconsistently with Articles 6.2and 6.4 of the Anti-Dumping Agreement , by failing to disclose to the interested parties during the anti-
dumping investigation the information on the injury factors listed in Article 3.4 that is contained inExhibit EC-12.
                                                     
171These factors are productivity, return on investments, cash flow, wages, ability to raise capital, and
magnitude of the margin of dumping.
172European Communities' response to questioning at the oral hearing.WT/DS219/AB/R
Page 59
IX. Implicit Analysis of the "Growth" Factor:  Article 3.4 of the  Anti-Dumping Agreement
151. We turn now to Brazil's claim relating to the European Communities' evaluation of the injury
factor "growth" pursuant to Article 3.4 of the  Anti-Dumping Agreement .
152. Before the Panel, Brazil claimed that the European Communities had not explicitly addressed
"growth", one of the injury factors listed in Article 3.4.173  The European Communities admitted that
no separate record was made of the evaluation of actual and potential negative effects on "growth".174
The European Communities argued, however, that "while no separate record was made of itsevaluation of 'growth', its consideration of this factor is implicit in its analysis of the other factors."
 175
153. The Panel began its analysis of this issue by noting that, although a "formalistic 'checklist'"
approach to the evaluation of the factors listed in Article 3.4 would be "highly desirable", it found "no
such obligation in the text of the provision and consequently [did] not believe that this is a required
approach to [the] analysis under Article 3.4."  176  According to the Panel, the "provision requires
substantive, rather than purely formal, compliance",  so that the "requirements of this provision will be
satisfied where it is at least apparent that a factor has been addressed, if only implicitly."  177  The Panel
thus found that:
The facts on the record of the investigation and taken into account in
the EC injury analysis indicate to us that, in its examination of other
injury factors – in particular, sales, profits, output, market share,
productivity and capacity utilisation – satisfy us that, in addressing
developments in relation to these other factors in the manner that itdid in this particular investigation, the European Communities
implicitly addressed the factor of "growth". [sic]
We therefore find that the European Communities did not violate its
obligations under Article 3.4 in its treatment of "growth" and that it
at least addressed each of the listed Article 3.4 factors.
178
                                                     
173Panel Report, para. 7.309.
174Ibid., para. 7.310.
175Ibid., para. 7.299.
176Ibid., para. 7.310.
177Ibid.
178Ibid., paras. 7.310-7.311.  We understand that the Panel used the term "address" when referring to
the requirements to "examine" and "evaluate" in Article 3.4 of the Anti-Dumping Agreement .WT/DS219/AB/R
Page 60
154. Brazil appeals from this finding of the Panel.  It contends that Articles 3.1 and 3.4 require
"explicit" analysis of each injury factor.179  Thus, in Brazil's view:
[e]ven if a checklist is not a required approach under Article 3.4, it
must however be apparent somehow that  each  of the fifteen factors
was indeed evaluated by the investigating authority.  In other words,
that a given factor was properly evaluated by an investigating
authority cannot simply be deducted  from the evaluation of other
factors.180 (original emphasis)
Brazil also asserts that if it were sufficient to deduce from the evaluation of other factors that a certain
factor has been addressed, then the requirement that all fifteen of the injury factors listed in Article 3.4be evaluated would lose effectiveness.
181
155. The European Communities rejects Brazil's contentions because, in its view, our Report in
 Thailand – H-Beams  "established that the obligation to consider the factors in Article 3.4 was quite
distinct from the various obligations in the [An ti-Dumping] Agreement to disclose or publish
information about that consideration."  182  The European Communities further explains that, in stating
that "growth" was addressed implicitly, the Pane l established as a factual matter that European
Communities had properly considered the factor "growth".183
156. The participants in this appeal do not dispute th at it is mandatory for investigating authorities
to evaluate all of the fifteen injury factors listed in Article 3.4 of the  Anti-Dumping Agreement .184
One of the fifteen factors expressly listed in Article 3.4 is the "actual and potential negative effects on
… growth".  The issue raised by Brazil in this appeal is whether the requirements of Article 3.4 weresatisfied in this case, even though the factor "growth" was evaluated only "implicitly" and no separaterecord of its evaluation was made.
157. Looking first to the text of Article 3.4, we find that it calls for "an evaluation of all relevant
economic factors and indices having a bearing on th e state of the industry".  The text, however, does
not address the  manner  in which the results of the investigating authority's analysis of each injury
                                                     
179Brazil's response to questioning at the oral hearing.
180Brazil's appellant's submission, para. 162.
181Ibid., para. 165.
182European Communities' appellee's submission, para. 132, referring to Appellate Body Report,
Thailand – H-Beams , para. 117.
183Ibid., para. 138.
184Appellate Body Report, Thailand – H-Beams , para. 125;  Appellate Body Report, US – Hot-Rolled
Steel , para. 194.WT/DS219/AB/R
Page 61
factor are to be set out in the published documents.
158. The requirements of "positive evidence" and "o bjective examination" in Article 3.1 of the
 Anti-Dumping Agreement  similarly do not regulate the  manner  in which the results of the analysis
are to be set out.  In  Thailand – H-Beams , we examined a claim under Article 3.1, relating to the use
of a confidential document for purposes of an injury determination under Article 3.4, and found that:
… the requirement in Article 3.1 that an injury determination be based
on "positive" evidence and involve an "objective" examination of the
required elements of injury does not imply that the determination
must be based only on reasoning or facts that were disclosed to, or
discernible by, the parties to an anti-dumping investigation.185
(original emphasis)
159. Our conclusion in that case regarding the obligations 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 published documents is amatter regulated by other provisions of the  Anti-Dumping Agreement .  Thus, in that case, we
explained that:
[w]hether evidence or reasoning is disclosed or made discernible to
interested parties by the final determination is a matter of  procedure
and  due process .  These matters are very important, but they are
comprehensively dealt with in other provisions, notably Articles 6
and 12 of the Anti-Dumping Agreement.186 (original italics;
underlining added)
In our view, this same premise also indicates that Articles 3.1 and 3.4 do not regulate the  manner  in
which the results of the "evaluation" of each injury factor are to be set out in the published documents.
160. Brazil argues that the Panel's interpretation of Article 3.4 would reduce that provision to
inutility.  It explains that:
                                                     
185Appellate Body Report, Thailand – H-Beams , para. 111.
186Ibid., para. 117.WT/DS219/AB/R
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[i]f, as it is the case in the Panel's findings, it is sufficient to deduct
from the examination of some factors that a third one has been
addressed in order to comply with  Article 3.4, then the requirements
that each of the fifteen factors must be addressed loses effectiveness.
Such an interpretation would have the effect of nullifying theobligation of Article 3.4 that each  of the fifteen factors must be
evaluated.187 (original italics;  original underlining)
We disagree.  The obligation to evaluate all fifteen factors is distinct from the  manner  in which the
evaluation is to be set out in the published docume nts.  As the European Communities contends, that
the analysis of a factor is implicit in the analyses of other factors does not necessarily lead to theconclusion that such a factor was not evaluated.
188
161. Accordingly, because Articles 3.1 and 3.4 do not regulate the  manner  in which the results of
the analysis of each injury factor are to be set out in the published documents, we share the Panel's
conclusion that it is not required that in every anti-dumping investigation a separate record be made ofthe evaluation of each of the injury factors listed in Article 3.4.  Whether a panel conducting anassessment of an anti-dumping measure is able to find in the record sufficient and credible evidence tosatisfy itself that a factor has been evaluated, even though a separate record of the evaluation of thatfactor has not been made, will depend on the particular facts of each case.  Having said this, webelieve that, under the particular facts of this case, it was reasonable for the Panel to have concludedthat the European Commission addressed and evaluated the factor "growth".
162. Having regard to the nature of the factor "growth", we believe that an evaluation of that factor
necessarily entails an analysis of certain other factors listed in Article 3.4.  Consequently, the
evaluation of those factors could cover also the evaluation of the factor "growth".  This relationshipwas recognized by Brazil during the oral hearing, when we inquired about the nature of the factor"growth" and whether it may be reflected in the performance of certain other factors listed inArticle 3.4.
189
163. Moreover, we note that the Panel explained that in analyzing certain of the other factors listed
in Article 3.4—including sales, profits, output, market share, productivity, return on investment andcapacity utilization—the European Commission "traced developments from 1995 through the end ofthe [POI]" and "[t]his examination touched upon the performance and relative diminution or
expansion of the domestic industry."
 190  The Panel then went on to give the following specific
                                                     
187Brazil's appellant's submission, para. 165.
188European Communities' appellee's submission, para. 136.
189Brazil's response to questioning at the oral hearing.
190Panel Report, para. 7.310.WT/DS219/AB/R
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example:  "… the Provisional Regulation (recital 150) indicates that there was a decrease in EC
production in 1995 and 1996, and an increase between 1996 and the [POI], while EC productioncapacity, sales volume, profitability and market share decreased."
 191
164. Brazil argues that, even if the evaluation of "growth" implies examining other factors listed in
Article 3.4, an investigating authority must still put them into context, weigh them against each other
and draw an appropriate overall conclusion.192  We note that the Panel did review whether the
European Commission examined the factors "in context", as Brazil contends is required:
We have examined the injury indicators which the European
Communities found relevant and significant for its injury
determination.  The European Communities found material injuryduring the period of investigation on the basis, in particular, of
declines in production, production capacity, sales and market share.
Moreover, the European Communities stated that the Community
industry suffered a "significant loss" of employment and a decline in
investments, as well as an increase of stocks.  It also determined thatthe increase in capacity utilisation depended on reduced production
capacity.  Furthermore, it placed its evaluation of factors affecting
domestic prices in the context of developments in market share and
profitability.  We have observed that the European Communities
places its evaluation of each of these factors within the context of its
own internal evolution and in terms of its relationship with
movements in other injury factors  and that the record data with respect
to those factors deemed relevant by the European Communities
overall bears out the EC evaluation of these factors.
193 (emphasis
added;  footnote omitted)
165. Looking also at the regulation imposing provisional anti-dumping duties in this case, we find
that it supports the conclusion that the European Commission evaluated "growth":
The examination of the above mentioned injury factors shows that the
situation of the Community industry deteriorated. In particular, the
Community industry experienced a decline in production, production
capacity, sales and market share.  Moreover, the Community industrysuffered a significant loss of employment and a decline in
investments, as well as an increase of stocks. As to the capacity
utilisation, its increase depended on the reduced production
capacity.
194
                                                     
191Panel Report, para. 7.310.
192Brazil's statement at the oral hearing.
193Panel Report, para. 7.337.
194Provisional Regulation, recital 160.WT/DS219/AB/R
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From our perspective, the "declines" and "losses" observed with respect to several of the factors
examined in this particular case necessarily relate to the issue of "growth" as well.  To put it more
precisely, the negative trends in these factors point to a lack of "growth".  This, in turn, supports theconclusion that the European Commission evaluated this injury factor.
166. For all these reasons, we uphold the Panel's finding in paragraph 7.311 of the Panel Report
that the European Communities did not violate its obligations under Article 3.4 of the  Anti-Dumping
Agreement  in respect of the injury factor "growth".
X. Causality:  Article 3.5 of the  Anti-Dumping Agreement
167. We turn now to Brazil's allegations of error under Article 3.5 of the  Anti-Dumping
Agreement .  Brazil identifies two errors by the Panel related to the European Commission's causality
analysis:
(a) the finding that the relatively higher cost of production of the European Communities'
domestic industry did not constitute a "known factor [
 ]other than dumped imports"
under Article 3.5;  and
(b) the finding that the European Commissi on's methodology in this investigation of
analyzing causal factors other than dumped imports on an  individual  basis, without
consideration of the  collective  effects of these factors, did not result in the
attribution to dumped imports of injuries caused by other causal factors.
We address each of these alleged errors in turn.
A. "Known Factors Other Than the Dumped Imports Which at the Same Time are
Injuring the Domestic Industry "
168. Brazil argued before the Panel that the relative cost efficiency of the Brazilian exporter under
investigation vis-à-vis European Communities producers should have been examined by the European
Commission as a "known factor[  ] other than the dumped imports" causing injury.195  Before the
European Commission, the Brazilian exporter under investigation had asserted that the fittings the
                                                     
195The "known factor[  ] other than the dumped imports" at issue has been labelled in various ways
throughout these proceedings, including "margins anal ysis" (Panel Report, para. 7.361; Brazil's appellant's
submission, paras. 181, 192, and 198; European Commu nities' appellee's submission, paras. 156, 163, 171,
and 172), "cost efficiency" (Panel Report, para. 7.361;  Brazil's appellant's submission, paras. 184 and 191), and"comparative advantage" ( Ibid., para. 7.361;  Brazil's appellant's submission, para. 184;  Japan's third
participant's submission, paras. 12 and 15).  At the oral hearing, Brazil confirmed that when it referred to the
causal factor that the European Commission had failed to examine, Brazil was referring to "the cost ofproduction difference [between the European Communities producers and the Brazilian exporter], especially thehigh cost of production of the European industry".  (Brazil's response to questioning at the oral hearing)WT/DS219/AB/R
Page 65
exporter sold in the European Communities market ("black heart" fittings) had a lower cost of
production than those sold by European Communities producers in the European Communities market("white heart" fittings), although both were c onsidered "like products" for purposes of the
investigation.
196  The Brazilian exporter had also claimed that it was this lower cost of production that
was reflected in the products' selling prices.197  The Brazilian exporter had raised this cost efficiency
issue before the European Commission in relation to the  dumping - and  injury -related segments of the
investigation, but not with regard to the  causality  analysis.198  Nevertheless, Brazil argued before the
Panel that the European Commission should have exam ined this cost efficiency as a "known" factor in
the causality analysis in the light of the significant difference between the dumping and undersellingmargins determined during the investigation (which  difference Brazil terms the "margins analysis"),
and because the European Commission had been alerted to this advantage of the Brazilian exporter inan earlier phase of the investigation.
199
169. The Panel observed that the Brazilian exporter had identified this cost efficiency before the
European Commission in the context of the dumping and injury determinations.200  The Panel also
found that the European Commission "did investigate the alleged differences in cost of production andmarket perception between white and black heart variants of the product concerned and  made factual
findings  that the difference in cost of production was minimal and that there was no significant
difference in market perception."
 201  The Panel then went on to reject Brazil's claim:
In light of these findings , these factors, although "known" to them in
the context of the dumping and injury analysis, would not be a
"known" causal factor, that is, a factor that the European
Communities was aware would possibly be causing injury to the
domestic industry.  We therefore  find that the European Communities
did examine these factors, and, in light of its findings , did not perceive
of them as "known" causal factors.202 (emphasis added)
                                                     
196Panel Report, para. 7.361.
197Ibid.  Brazil also identified before the Panel the difference in market perception as a "known factor[  ]
other than the dumped imports" that required examination by the European Commission during theinvestigation.  ( Ibid., paras. 7.350 and 7.357)  Whether the European Commission should have examined the
difference in market perception pursuant to Article 3.5 is not an issue appealed by Brazil.
198Panel Report, para. 7.362.
199Ibid., paras. 7.350 and 7.361.
200Ibid., para. 7.362.
201Ibid. (emphasis added)
202Ibid.WT/DS219/AB/R
Page 66
170. Brazil appeals the Panel's finding that the relatively higher cost of production for European
Communities producers was not a "known" causal factor that the European Commission had toexamine under Article 3.5.  Brazil contends that the text of Article 3.5 does not support the Panel'sinterpretation that investigating authorities can limit their examination only to those factors raised by
the parties in the context of the causality analysis.
203  In any event, Brazil notes that the cost of
production data of the European Communities producers were required for a proper comparisonbetween the Brazilian and European Communities producers.  As such data was available only to theEuropean Commission and not to Brazil (for reasons of confidentiality), Brazil submits that itsexporter had sufficiently raised the cost of production difference before the European Commission onthe basis of information available to it at the time of the investigation.
204
171. Furthermore, according to Brazil, its so-called "margins analysis", which is based on data
from the European Commission's disclosure documents released before publication of the definitivedetermination, confirms that the Brazilian exporter enjoys a lower cost of production than the
European Communities domestic industry and that "a significant part" of the industry's injury was not
due to the effects of dumping.
205  Thus, Brazil argues that the relatively higher cost of production of
the European Communities industry is a "known factor" other than dumped imports, which theEuropean Commission was required to examine under Article 3.5, and that, by failing to do so, theEuropean Commission attributed to dumped imports those injuries that were caused by thisunexamined causal factor.
172. The European Communities requests us to reject Brazil's arguments on appeal.  The European
Communities explains that the Brazilian exporter did not raise during the investigation the possible
comparative advantage resulting from any difference in costs of production between the Brazilian
exporter and the European Communities industry.
206  Rather, the alleged differences in the cost of
production and market perception between the "white heart" and "black heart" variants of the productwere raised by the Brazilian exporter when requesting an adjustment to its prices for purposes of theEuropean Commission's calculation of the undercutting margin.
207  According to the European
Communities, the fact that Brazil raised this factor in one phase of the investigation does not renderthe factor "known" by the European Commission to ha ve caused injury to the domestic industry.  In
                                                     
203Brazil's appellant's submission, para. 195.
204Brazil's response to questioning at the oral hearing.
205Brazil's appellant's submission, para. 191;  Brazil's response to questioning at the oral hearing.  See
also, supra , para. 33.
206European Communities' appellee's submission, para. 166.
207European Communities' response to questioning at the oral hearing.WT/DS219/AB/R
Page 67
any event, the European Communities argues, such a difference in costs of production is not a "factor
other than the dumped imports" that the European Commission was required to "examine" in terms ofthe third sentence of Article 3.5.
208
173. The issue before us is whether, under Article 3.5, the alleged higher cost of production of the
European Communities industry, raised by the Brazilian exporter solely in the context of the
European Commission's dumping and injury determinations, was a "known factor[  ] other than the
dumped imports which at the same time [was] injuring the domestic industry", thereby requiringexamination by the European Commission.
174. We begin our examination with the text of the provision governing an investigating
authority's causality analysis.  Article 3.5 of the  Anti-Dumping Agreement  provides:
It must be demonstrated that the dumped imports are, through the
effects of dumping, as set forth in paragraphs 2 and 4, causing injurywithin the meaning of this Agreement.  The demonstration of a causal
relationship between the dumped imports and the injury to the
domestic industry shall be based on an examination of all relevant
evidence before the authorities.  The authorities shall also examine
any known factors other than the dumped imports which at the same
time are injuring the domestic industry, and the injuries caused by
these other factors must not be attributed to the dumped imports.Factors which may be relevant in this respect include,  inter alia , the
volume and prices of imports not sold at dumping prices, contraction
in demand or changes in the patterns of consumption, trade restrictivepractices of and competition between the foreign and domestic
producers, developments in technology and the export performance
and productivity of the domestic industry.  (underlining added)
175. Article 3.5 requires that an investigating authority establish a "causal relationship" between
dumped imports and the domestic industry's injury.  In the course of identifying this causal
relationship, investigating authorities are not permitted to attribute to dumped imports injuries causedby other factors.  Critical to the effective operation of the non-attribution obligation, and indeed, theentire causality analysis, is the requirement of Article 3.5 to "examine any known factors other thanthe dumped imports which at the same time are injuring the domestic industry", for it is the "injuries"of those "known factors" that must not be attributed to dumped imports.  In order for this obligation tobe triggered, Article 3.5 requires that the factor at issue:
                                                     
208European Communities' appellee's submission, paras. 171 and 174-176.WT/DS219/AB/R
Page 68
(a) be "known" to the investigating authority;
(b) be a factor "other than dumped imports";  and
(c) be injuring the domestic industry at the same time as the dumped imports.
176. We are mindful that the  Anti-Dumping Agreement  does not expressly state how such factors
should become "known" to the investigating authority, or if and in what manner they must be raised
by interested parties, in order to qualify as "known".  We also recognize that the  Anti-Dumping
Agreement  does not expressly state to what degree a factor must be unrelated to the dumped imports,
or whether it must be extrinsic to the exporter and the dumped product, in order to constitute a factor"other than the dumped imports".  We need not, howev er, resolve such questions in this appeal,  given
the factual findings of the European Commission in this investigation and the Panel in this case.
177. We note that Brazil's claim rests entirely on the assumption that there was a marked
difference in the costs of production between the Brazilian exporter and the European Communitiesproducers.  Brazil's factual allegation regarding the difference in costs of production, however, wasrejected by the European Commission.  As the Panel noted, the "European Communities did
investigate the alleged differences in cost of production and market perception … and made factual
findings that the difference in cost of production was minimal and that there was no significantdifference in market perception."
 209  These factual findings of the European Commission were
affirmed by the Panel210, and as such, we do not inquire into them on appeal.  Having rejected the
Brazilian exporter's factual premise in the context of one phase of the investigation, the EuropeanCommission, in our view, had no reason to undertake an analysis in a subsequent phase of theinvestigation that would have been predicated upon the very correctness of the same premise.  In other
                                                     
209Panel Report, para. 7.362.
210Before the Panel, Brazil challenged the European Commission's refusal to adjust the Brazilian
exporter's prices when evaluating the price effects of dumped imports.  ( Ibid., para. 7.286)  While addressing
this challenge, the Panel evaluated the factual conclusions of the European Commission with respect to thedifferences in cost of production and market perception between black heart (imported from Brazil) and whiteheart (produced by European Communities producers) variants of the product under investigation. ( Ibid.,
paras. 7.294-7.295)  The Panel rejected Brazil's challenge to the European Commission's factual findings,concluding as follows:
Thus, the European Communities gathered and evaluated facts in respect of
the alleged differences in cost of production and market perception between
black and white heart variants of the products concerned, and came to the
conclusion that differences in cost of production were not significant and thatthere was no significant difference in consumer perception.  A reasonable andobjective authority could have reached this determination on the basis of therecord of this investigation.  It is not our task to substitute our judgement forthat of the investigating authority.
(Panel Report, para. 7.296)WT/DS219/AB/R
Page 69
words, once the European Commission had determined that the allegation of the difference in cost of
production was unfounded, it had no obligation to examine its effects on the domestic industry underArticle 3.5.
178. Thus, we agree with the Panel that "the European Communities did examine these factors,
and, in light of its findings, did not perceive of them as 'known' causal factors."
 211  However, we
disagree with the Panel's apparent understanding of the term "known" in Article 3.5.  We understandthe Panel, in rejecting this aspect of Brazil's claim under Article 3.5, to have stated that the allegedcausal factor  was  "known" to the European Commission in the context of its dumping and injury
analyses, but that the factor was nevertheless  not  "known" in the context of its causality analysis.
212
In our view, a factor is either "known" to the invest igating authority, or it is not "known";  it cannot be
"known" in one stage of the investigation and unknown in a subsequent stage.  This does not,however, affect our finding, which is premised on the fact that once the cost of production differencewas found by the European Commission to be "minimal", the factor claimed by Brazil to be "injuring
the domestic industry" had effectively been found  not  to exist.
213  As such, there was no "factor" for
the European Commission to "examine" further pursuant to Article 3.5.
179. We therefore uphold the Panel's finding, in paragraph 7.362 of the Panel Report, that the
difference in cost of production between the Brazilian exporter and the European Communitiesindustry was not a "known factor[
 ] other than the dumped imports which at the same time [was]
injuring the domestic industry".
                                                     
211Panel Report, para. 7.362.
212The Panel found:
In light of these findings, these factors, although "known" to them in
the context of the dumping and injury analysis, would not be a
"known" causal factor, that is, a factor that the European Communities
was aware would possibly be causing injury to the domestic industry.
(Ibid.)
213It is of no consequence for our analysis in this case that the alleged difference in the cost of
production between the Brazilian exporter and the domestic industry was found to be "minimal" rather than
some other level, a factual issue decided by the Panel.  See  supra  footnote 210.  What is dispositive of this
issue, in our view, is that the European Commission effectively  rejected  the claim of the Brazilian exporter
(properly, in the view of the Panel) that there was a difference in the cost of production.WT/DS219/AB/R
Page 70
B. Non-Attribution
180. The Panel made the following findings regarding the non-attribution analysis undertaken by
the European Commission in this investigation:
In its determination, the European Communities identified certain
factors, other than dumped imports, that were potentially causing
injury to the domestic industry including imports from third countries
not subject [to] the investigation; decline in consumption and
substitution.  With respect to each of these factors individually , the
European Communities conducted a separate examination and found
either that it "is not such as to have contributed in any significant way
to the material injury suffered by the Community industry" (decline inconsumption);  that it made "no significant contribution" (export
performance) or that "no significant influence" could have resulted
(own imports of the product concerned), that it cannot have
significantly contributed to injury (substitution), or (in the case of
imports from the countries not subject to the investigation) "even ifimports from other third countries may have contributed to the
material injury suffered by the Community industry, it is hereby
confirmed that they are not such to have broken the causal link
between the dumping and the injury found").  The European
Communities concluded that any other factors that may havecontributed to the injury to the domestic industry were "not such as to
have broken the casual link" between dumped imports and injury.
These aspects of the EC determination indicate to us that the
European Communities  analysed individually the causal factors
concerned and identified the individual effects of each of these causalfactors .  With respect to each of the factors, the European
Communities concluded that the extent of the contribution to injury
was not significant, or, in one case, extrapolated that, even if the
effect were significant, it would not be such as to "break the causal
link" between dumped imports and material injury.  The European
Communities' overall conclusion was that none of these factors had an
effect that was such to have broken the causal link between dumpedimports and material injury.
214 (emphasis added;  footnotes omitted)
181. Based on these findings, the Panel determined that, notwithstanding the European
Commission's analysis of each causal factor solely on an individual basis, such analysis nevertheless
ensured that the effects of causal factors other than dumped imports were not improperly attributed todumped imports:
                                                     
214Panel Report, paras. 7.367-7.368.WT/DS219/AB/R
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We are certainly aware of the theoretical possibility that a causation
methodology which separates and distinguishes between individual
injury factors may not accommodate the possibility that multiple
"insignificant factors" might  collectively  constitute a significant
cause of injury such as to sever the link between dumped imports andinjury. However, the EC methodology—which we understand to
separate and distinguish between the effects of each of these causal
factors and the dumped imports including through an examination as
to whether the extent of the effects of each causal factor are such that
it is necessary to separate and distinguish its effects—does not leave
the effects of those factors entirely lumped together and
indistinguishable.
215 (original emphasis;  footnote omitted)
182. The Panel therefore determined that Article 3.5 does not  require   an evaluation of the
collective impact of other causal factors.  With respect to this particular case, the Panel found that,based on what it understood to be the operation of the European Communities' causality methodology,the effects of other causal factors were sufficiently separated and distinguished so as to avoidimproper attribution of injuries to dumped imports.
1. European Communities' Procedural Objection
183. The European Communities raises an initial objection to our consideration of Brazil's claim
regarding the European Commission's failure to examine the collective impact of other causal factors.The European Communities argues that the issue is not properly before us because it was never raiseddirectly before the Panel, stating that, "although, in the arguments it presented to the Panel, Brazilcriticized the EC authorities' handling of 'other factors', at no point did it accuse them of failing to
consider properly the collective effect  of those factors."
 216  Because this issue was not raised before
the Panel, the European Communities argues, the Panel should not have ruled on this issue, and bydoing so, the Panel denied the European Communities a "fair hearing".
217  As a result, the European
Communities requests us to declare the Panel's legal interpretation to be "of no effect"  218 and its
factual findings "irrelevant to the determination".219
                                                     
215Panel Report, para. 7.369.
216European Communities' appellee's submission, para. 181. (emphasis added)
217Ibid., para. 182.
218Ibid.
219Ibid., para. 187.WT/DS219/AB/R
Page 72
184. We disagree with the European Communities' contention that Brazil never identified the
collective effect of other causal factors as part of its Article 3.5 claim during the Panel proceedings.Before the Panel, the European Communities made the following statement:
Furthermore, Brazil effectively asks that the injuries from other
factors be cumulated  and contrasted as such with those caused by
dumped imports.  Article 3.5 indicates that this is not the correct
procedure since it requires the authorities to examine the "injuries",rather than the injury, caused by these other factors.  The
investigating authorities are therefore not obliged to identify the
cumulated effect of the individual "other" factors .
220 (emphasis
added)
We view this statement by the European Communitie s before the Panel to reflect accurately the
precise point argued on appeal by Brazil, namely, that the European Commission was required in itscausality analysis to examine the collective effe cts (what the European Communities referred to as
"cumulated effect") of other causal factors vis- à-vis those of dumped imports.  We also understand
from this statement that the European Communities had opportunity to respond to Brazil's argumenton this issue before the Panel and, in fact, did so.  In the light of its apparent understanding of andresponse to Brazil's argument regarding the requirement to examine other causal factors collectively,
the European Communities cannot be said to have had insufficient notice of this issue, or to have been
denied a "fair hearing" before the Panel.  We therefore find no due process concerns raised by ourconsideration of the merits of this issue and, consequently, we find the European Communities'objection to be without merit.
2. Merits of Brazil's Claim
185. Brazil challenges the European Communities' causality methodology, as applied in this
investigation, because it fails to ensure that injury caused by any other factor is not attributed to the
dumped imports.  According to Brazil, an investigating authority that has separated and distinguishedthe injurious effects of other causal factors  individually  from the effects of dumped imports has not
fully discharged its obligation under the non-attribution language of Article 3.5.
221  The investigating
authority must also separate and distinguish the  collective  effects of the other causal factors from the
effects of dumped imports by "evaluat[ing] the  collective  effect of those factors on the alleged causal
                                                     
220European Communities' second oral statement before the Panel, para. 146.
221Brazil's appellant's submission, para. 214.WT/DS219/AB/R
Page 73
link between the dumped imports and the injury."  222  Only by separating the  collective  effects of
these other causal factors from the effects of dumped imports can an investigating authority ensurethat factors other than dumped imports are not a su fficient cause to sever the causal link between the
dumped imports and injury.
223
186. The European Communities argues that the causality methodology employed in this
investigation is consistent with the obligations under Article 3.5.  The European Communitiesrecognizes that its investigating authority was required to separate and distinguish the injurious effectsof the various causal factors so as to ensure that injuries caused by other factors were not attributed todumped imports.
224  It points out, however, that the  Anti-Dumping Agreement  does not compel a
particular methodology to be employed when fulfilling this requirement.225  The European
Communities therefore argues that Brazil seeks to impose a legal requirement that is not specified inthe  Anti-Dumping Agreement .
226
187. The issue before us, therefore, is whether the non-attribution language of Article 3.5 requires
an investigating authority, in conducting its causal ity analysis, to examine the effects of the other
causal factors  collectively  after having examined them  individually .
188. Article 3.5 provides, in relevant part:
The authorities shall also examine any known factors other than the
dumped imports which at the same time are injuring the domestic
industry, and the injuries caused by these other factors must not be
attributed to the dumped imports . (emphasis added)
This obligates investigating authorities in their cau sality determinations not to attribute to dumped
imports the injurious effects of other causal factors, so as to ensure that dumped imports are, in fact,"causing injury" to the domestic industry.  In  US – Hot-Rolled Steel  we described the non-attribution
obligation as follows:
                                                     
222Brazil's appellant's submission, para. 211. (emphasis added)
223Brazil's response to questioning at the oral hearing.
224European Communities' appellee's submission, para. 193.
225Ibid., paras. 195-196.
226Ibid., para. 199.WT/DS219/AB/R
Page 74
… In order that investigating authorities, applying Article 3.5, are able
to ensure that the injurious effects of the other known factors are not
"attributed" to dumped imports, they must appropriately assess the
injurious effects of those other factors.  Logically, such an assessment
must involve separating and distinguishing the injurious effects of the
other factors from the injuriou s effects of the dumped imports .  If the
injurious effects of the dumped imports are not appropriately
separated and distinguished from the injurious effects of the other
factors, the authorities will be unable  to conclude that the injury they
ascribe to dumped imports is actually caused by those imports, rather
than by the other factors.  Thus, in the absence of such separation and
distinction of the different injurious effects, the investigatingauthorities would have no rational basis to conclude that the dumped
imports are indeed causing the injury which, under the  Anti-Dumping
Agreement , justifies the imposition of anti-dumping duties. (emphasis
added)
…
… [I]n order to comply with the non-attribution language in
[Article 3.5], investigating authorities must  make an appropriate
assessment of the injury caused to the domestic industry by the other
known factors, and they must separate and distinguish the injurious
effects of the dumped imports from the injurious effects of those otherfactors.
227
Non-attribution therefore requires separation and distinguishing of the effects of other causal factors
from those of the dumped imports so that injuries caused by the dumped imports and those caused byother factors are not "lumped together" and made "indistinguishable".
228
189. We underscored in  US – Hot-Rolled Steel , however, that the  Anti-Dumping Agreement  does
not prescribe the methodology  by which an investigating authority must avoid attributing the injuries
of other causal factors to dumped imports:
                                                     
227Appellate Body Report, US – Hot Rolled Steel , paras. 223 and 226.
228Ibid., para. 228.WT/DS219/AB/R
Page 75
We emphasize that the particular methods and approaches by which
WTO Members choose to carry out the process of separating and
distinguishing the injurious effects of dumped imports from the
injurious effects of the other known causal factors are not prescribed
by the  Anti-Dumping Agreement .  What the Agreement requires is
simply that the obligations in Article 3.5 be respected when a
determination of injury is made.229
Thus, provided that an investigating authority does no t attribute the injuries of other causal factors to
dumped imports, it is free to choose the methodology it will use in examining the "causalrelationship" between dumped imports and injury.
190. Turning to Brazil's arguments in this appeal, we do not read Article 3.5 as requiring, in each
and every case, an examination of the  collective  effects of other causal factors  in addition  to 
examining those factors' individual effects.  We observed in  US – Hot-Rolled Steel  that the non-
attribution language of the  Anti-Dumping Agreement  necessarily requires that an investigating
authority separate and distinguish the effects of other causal factors from the effects of dumpedimports, because only  by doing so can an investigating authority "conclude that the injury they ascribe
to dumped imports is actually caused by those imports, rather than by the other factors."
 230
191. In contrast, we do not find that an examination of  collective  effects is necessarily required by
the non-attribution language of the  Anti-Dumping Agreement .  In particular, we are of the view that
Article 3.5 does not compel,  in every case , an assessment of the  collective  effects of other causal
factors, because such an assessment is not always necessary to conclude that injuries ascribed to
dumped imports are actually caused by those imports and not by other factors.
192. We believe that, depending on the facts at issue, an investigating authority could reasonably
conclude, without further inquiry into  collective  effects, that "the injury … ascribe[d] to dumped
imports is actually caused by those imports, rather than by the other factors."  231  At the same time, we
recognize that there may be cases where, because of the specific factual circumstances therein, the
                                                     
229Appellate Body Report, US – Hot Rolled Steel , para. 224.  We made a similar observation when
discussing the non-attribution requirement under the Agreement on Safeguards :
We emphasize that the method and approach WTO Members choose to carry
out the process of separating the effects of increased imports and the effects
of the other causal factors is not specified by the Agreement on Safeguards .
(Appellate Body Report,  US – Lamb , para. 181)
230Appellate Body Report, US – Hot-Rolled Steel , para. 223.
231Ibid.WT/DS219/AB/R
Page 76
failure to undertake an examination of the collective impact of other causal factors would result in the
investigating authority improperly attributing the effects of other causal factors to dumped imports.232
We are therefore of the view that an investigating authority is not required to examine the collectiveimpact of other causal factors, provided that, under the specific factual circumstances of the case, it
fulfils its obligation not to attribute to dumped imports the injuries caused by other causal factors.
193. We now turn to the facts of this case to examine whether the European Communities has
failed to discharge its non-attribution obligation under Article 3.5 by not conducting an examinationof the collective impact of other factors.  We begin by noting that the European Commission in thisinvestigation expressly identified the proper attribution of injuries as one of the purposes of itscausality analysis, stating that it "examined whether the material injury suffered by the Communityindustry has been caused by the dumped imports and whether other factors might have caused orcontributed to that injury, in order not to attribute possible injury caused by other factors to thedumped imports."
 233  The European Commission first identified other factors that may be causing
injury to the domestic industry.234  In then evaluating each "other factor" individually, the European
Commission determined that each factor's contribution to injury was insignificant (or, for one factor,not so much as to break the causal link between dumped imports and injury).
235  As a result, the
European Commission concluded that dumped imports were causing material injury to the domesticindustry, without consideration of whether the  collective  effects of the other causal factors
                                                     
232We therefore agree with the Panel's statement that:
We are certainly aware of the theoretical possibility that a causation
methodology which separates and distinguishes between individual injuryfactors may not accommodate the possibility that multiple "insignificantfactors" might collectively  constitute a significant cause of injury such as to
sever the link between dumped imports and injury. (original emphasis)
(Panel Report, para. 7.369)
233Provisional Regulation, recital 162.
234Panel Report, para. 7.367.
235Ibid., paras. 7.367-7.368.WT/DS219/AB/R
Page 77
undermined the causal relationship be tween dumped imports and injury.236
194. On appeal, Brazil does not contest the European Communities'  individual  separating and
distinguishing of the effects of other factors.  It relies instead on its argument that an investigating
authority is also  required  under Article 3.5 to examine other causal factors collectively  in every
investigation .  Aside from this legal argument, which we have rejected, Brazil has not identified how,
under the facts of this case, the European Commission's failure to examine the collective impact of theother causal factors resulted in this case in the attribution to dumped imports of injuries resulting fromthose other factors.  If Brazil viewed the analysis of the European Commission in this case to haveattributed improperly to dumped imports the injuries caused by other factors, Brazil had theopportunity before the Panel to adduce evidence to this effect.  As far as we are aware from the PanelRecord, Brazil proffered no such evidence.  Nor has the Panel made any factual finding in this regard.
We find no basis, therefore, to find that the causality analysis of the European Commission in thisinvestigation was inconsistent with the non-attr ibution obligation of the European Communities under
Article 3.5 of the  Anti-Dumping Agreement .
195. We therefore uphold the Panel's finding, in paragraphs 7.369 and 7.370 of the Panel Report,
that the causality methodology applied by the Eur opean Commission in this investigation, which did
not include an examination of the  collective  impact of other known causal factors, did not attribute
the injuries caused by those other factors to the dumped imports.
                                                     
236The European Communities disagrees with the description by the Panel of the European
Commission's evaluation of the factors as having been undertaken solely on an individual  basis.  (European
Communities' appellee's submission, paras. 188-191)  The European Communities points to the followingparagraph as evidence of its consideration of the collective  impact of other causal factors:
It is therefore provisionally concluded that the dumped imports originating in
Brazil, the Czech Republic, Japan, China, Korea and Thailand have causedmaterial injury to the Community industry.  Any other factors that may havecontributed to the injurious situation of the Community industry, in particular
imports from third countries, are such that they cannot be considered to break
the causal link between the dumping and the material injury found in light ofthe strong increase in the imports [c]oncerned made at particularly lowprices. (emphasis added)
(Provisional Regulation, recital 177)  The European Communities, however, has not appealed the Panel's
description of the European Commission's causality methodology as applied in this case.WT/DS219/AB/R
Page 78
XI. Findings and Conclusions
196. For the reasons set out in this Report, the Appellate Body:
(a) upholds the Panel's finding, in paragraphs 7.106-7.108 of the Panel Report, that the
European Communities did not act inconsistently with its obligations under
Article VI:2 of the GATT 1994 or Article 1 of the  Anti-Dumping Agreement  in
imposing anti-dumping duties in this case following the devaluation of the BrazilianReal at the beginning of the fourth quarter of the period of investigation ("POI").  Asthe finding on this issue resolves Brazil's claim with respect to the impact of thedevaluation of the Real on the European  Commission's dumping determination, the
Appellate Body does not consider it necessary to make a finding on whether, under
Article 2.4.2 of the  Anti-Dumping Agreement , the European Commission "could not
have based its dumping analysis on the export prices relating to the period after thedevaluation only";
(b) upholds the Panel's finding, in paragraphs 7.138 and 7.139 of the Panel Report, that
the European Communities did not act inconsistently with Article 2.2.2 of the  Anti-
Dumping Agreement  by including actual data from "low-volume" sales in
determining the amounts for administrative, selling and general costs ("SG&A") and
profits for the construction of normal value;
(c) upholds the Panel's finding, in paragraphs 7.234-7.236 of the Panel Report, that the
European Communities did not act inconsistently with Articles 3.2 or 3.3 of the  Anti-
Dumping Agreement , even though the European Commission did not analyze the
volume and prices of dumped imports from Brazil individually, pursuant toArticle 3.2, as a pre-condition to cumulatively assessing the effects of the dumpedimports under Article 3.3;WT/DS219/AB/R
Page 79
(d) upholds the Panel's finding, in paragraphs 7.46 and 7.47 of the Panel Report, that
Exhibit EC-12 was properly before the Panel;
(e) reverses the Panel's finding, in paragraphs 7.348 and 7.349 of the Panel Report, and
finds, instead, that the European Communities acted inconsistently with Articles 6.2
and 6.4 of the  Anti-Dumping Agreement , by failing to disclose to the interested
parties during the anti-dumping investigation the information on the injury factorslisted in Article 3.4 that is contained in Exhibit EC-12;
(f) upholds the Panel's finding, in paragraph 7.311 of the Panel Report, that the European
Communities did not act inconsistently with its obligations under Article 3.4 of the
 Anti-Dumping Agreement  in respect of the injury factor "growth";  and
(g) upholds the Panel's findings, in paragraphs 7.362 and 7.369-7.370 of the Panel
Report, that the European Communities did not act inconsistently with Article 3.5 of
the  Anti-Dumping Agreement , and, in particular,
(i) upholds the Panel's finding, in paragraph 7.362 of the Panel Report, that the
difference in cost of production between the Brazilian exporter and the
European Communities industry was not a "known factor[  ] other than the
dumped imports which at the same time [was] injuring the domesticindustry";  and
(ii) upholds the Panel's finding, in paragraphs 7.369 and 7.370 of the Panel
Report, that the causality methodology applied in this investigation, which
did not include an examination of the collective impact of other known causal
factors, did not attribute the injuries caused by those other factors to the
dumped imports.
197. The Appellate Body therefore recommends that  the Dispute Settlement Body request the
European Communities to bring its measure, which has been found in this Report, and in the Panel
Report as modified by this Report, to be inconsistent with its obligations under the  Anti-Dumping
Agreement , into conformity with that Agreement.WT/DS219/AB/R
Page 80
Signed in the original at Geneva this 7th day of July 2003 by:
_______________________
A. V. Ganesan
Presiding Member
___________________
Luiz Olavo Baptista
Member____________________
Giorgio Sacerdoti
MemberANNEX 1
WORLD TRADE
ORGANIZATIONWT/DS219/7
29 April 2003
(03-2240)
Original:  English
EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON MALLEABLE
CAST IRON TUBE OR PIPE FITTINGS FROM BRAZIL
Notification of an Appeal by Brazil
under paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU)
The following notification, dated 23 April 2003, sent by Brazil to the Dispute Settlement
Body (DSB), is circulated to Members.  This noti fication also constitutes the Notice of Appeal, filed
on the same day with the Appellate Body, pursuant to the  Working Procedures for Appellate Review .
_______________
Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes  ("DSU") and Rule 20 of the Appellate Body's Working Procedure for
Appellate Review , the Government of Brazil hereby notifies its decision to appeal to the Appellate
Body certain issues of law covered in the panel report  European Communities – Anti-Dumping
Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil (WT/DS219/R) and certain legal
interpretations developed by the Panel.
Brazil seeks review by the Appellate Body of certain Panel conclusions which are in error,
and are based upon erroneous findings on issues of law and on related legal interpretations with
respect to various provisions of the Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (the " Anti-Dumping Agreement ") and the General Agreement
on Tariffs and Trade 1994 (" GATT 1994 ").  These conclusions are:
(1) The Panel's conclusions that the European Communities has not violated its
obligations under Article 1 of the Anti-Dumping Agreement and/or under
Article VI:2 of the GATT 1994 in imposing anti-dumping duties following thedevaluation of the Brazilian currency at the beginning of the fourth quarter of the
investigation period ("IP"). This finding is in error, and is based upon erroneous
findings on issues of law and on related legal interpretations contained in
paragraphs 7.93 to 7.108 of the Panel's report, including:a) the Panel's finding that the EC could not have based its dumping analysis on
the export prices relating to the period after the devaluation only. This
conclusion is based on an erroneous interpretation of Article 2.4.2, namely,that this Article generally requires that "data throughout the investigation
period would necessarily consistently be taken into account" and that "an
investigating authority would generally be precluded from limiting its
dumping analysis to a selective subset of that data from only a temporal sub-
segment of the IP" (at para. 7.104);  and,
b) the Panel's finding that there is no foundation in the text of the Anti-Dumping
Agreement or Article VI of the GATT 1994 for a requirement that the EC
should have re-assessed its dumping findings in the light of the devaluation
of the Brazilian Real during the IP and that, in any event, Article 9.3 provides
for a corrective mechanism.
(2) The Panel's conclusion that the European Communities did not act inconsistently with
Article 2.2 and the chapeau of Article 2.2.2 of the Anti-Dumping Agreement in
constructing normal value using SG&A and profit data from sales of product types
for which there were no representative sales in the domestic market of Brazil.  This
finding is in error, and is based upon erroneous findings on issues of law and onrelated legal interpretations contained in paragraphs 7.124 to 7.139 of the Panel's
report, including:
a) the Panel's finding that a Member is not permitted to exclude actual data – on
a basis other than not being made in the ordinary course of trade – from thecalculation under Article 2.2.2 (at para. 7.138); and,
b) the Panel's finding that the ordinary meaning of " sales in the ordinary course
of trade " of the chapeau of Article 2.2.2 " includes the SG&A actually
incurred and the profits actually realized in the category of production andsales explicitly specified in the Agreement ", and that therefore, the SG&A and
profit data of low volume sales made in the ordinary course of trade
necessarily have to be included  when constructing normal values (at para
7.138).
(3) The Panel's conclusion contained in paragraphs 7.225 to 7.236 of the Panel's report
that the European Communities has not violated Articles 3.1, 3.2 and 3.3 of the Anti-Dumping Agreement on the ground that an Article 3.2 analysis of the volume and
price of the imports from each individual country is not a necessary pre-condition for
cumulation under Article 3.3. This finding is in error and is based upon erroneous
findings on issues of law and on related legal interpretations of the obligations
regarding the determination of injury arising from Articles 3.1, 3.2 and 3.3 of theAnti-Dumping Agreement.
(4) The Panel's conclusion contained in paragraphs 7.302 to 7.345 combined with 7.42 –
7.47 of the Panel's report that the Panel is compelled to include Exhibit EC-12 in its
examination of Brazil's claims under Article 3.4 even if there is no contemporaneousand verifiable written indication that this Exhibit actually existed during the time of
the investigation. This finding is in error and is based upon erroneous findings on
issues of law and on related legal interpretations, including:
(a) the Panel's erroneous legal interpretation of Articles 3.1 and 3.4 of the Anti-
dumping Agreement and, in particular, of the notion of "positive evidence"
contained in Article 3.1. On that basis, the Panel erroneously considered that
the requirements of Article 3.1   and 3.4 were met by an internal document of
which the contemporaneous nature is questionable and not verifiable.(b) the Panel's finding that it can rely on a presumption of good faith of WTO
Members in order to conclude that Exhibit EC-12 was made within the timeperiod of the investigation thereby breaching the Panel's obligations under
Article 11 of the DSU and Articles 17.5(ii) and 17.6(i) of the Anti-Dumping
Agreement.
(5) The Panel's conclusion contained in paragraphs 7.309 to 7.311 of the Panel's report
that the EC has not violated its obligations under Article 3.4 in its treatment of the
factor 'growth' and that it at least addressed each of the listed Article 3.4 factors given
that it addressed the factor 'growth' implicitly by addressing other injury factors. This
finding is in error and is based upon erroneous findings on issues of law and on
related legal interpretations, arising from Articles 3.1 and 3.4 of the Anti-dumping
Agreement.
(6) The Panel's conclusion contained in paragraphs 7.346 and 7.349 of the Panel's report
that the European Communities has not violated Articles 6.2 and 6.4 of the Anti-
Dumping Agreement on the ground that the investigating authority can decide
without further communication with the parties that the evidence contained in aninternal document (Exhibit EC-12) does not have any "value added" to the substance
of their investigation in the analysis of the injury factors listed in Article 3.4 of the
Anti-Dumping Agreement.  This finding is in error, and is based upon erroneous
findings on issues of law and on related legal interpretations of the obligations arising
from Articles 6.2 and 6.4 of the Anti-Dumping Agreement.
(7) The Panel's conclusion that the European Communities has not violated Article 3.5 of
the Anti-Dumping Agreement.  This finding is in error, and is based upon erroneous
findings on issues of law and on related legal interpretations contained in paragraphs
7.354 to 7.416 of the Panel's report, including:
a) the Panel's finding that factors "known" to an investigating authority in the
context of the dumping and injury analysis, are not "known" factors in the
specific context of causality (at para. 7.361 and 7.362); and,
b) the Panel's finding that the methodology used by the EC which analyses each
causal factor only individually did not infringe Article 3.5 (at para. 7.368 to7.370).
Brazil respectfully requests the Appellate Body to reverse the above findings of the Panel, as
well as the reasoning leading thereto, and to modify accordingly the recommendations of the Panel.
__________