  
  
WT/DS471/ARB  
 
 
1 November 2019  
(19-7340) Page: 1/68 
  Original: English  
 
  
UNITED STATES – CERTAIN METHODOLOGIE S AND THEIR APPLICATION 
TO ANTI -DUMPING PROCEEDINGS  INVOLVING CHINA  
RECOURSE TO ARTICLE 22.6 OF THE DSU BY T HE UNITED  STATES  
DECISION BY THE ARBI TRATOR  
 
BCI redacted, as indicated [[***]]  
 
 
 WT/DS471/ARB  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  12 
1.1   Original proceedings  ................................ ................................ ................................ .. 12 
1.2   Request for arbitration and conduct of arbitration proceedings  ................................ ........  12 
1.3   Mandate of the Arbitrator  ................................ ................................ ...........................  13 
1.4   Findings of inconsistency in the original proceedings  ................................ ......................  14 
1.5   Structure of analysis  ................................ ................................ ................................ .. 15 
2   PROCEDURAL MATTE RS ................................ ................................ .............................  15 
2.1   Treatment of BCI  ................................ ................................ ................................ ....... 15 
2.2   United  States ' request to open the Arbitrator's meeting to public observation  ...................  16 
3   SCOPE OF THE PRE SENT ARBITRATION PRO CEEDINGS  ................................ .............  16 
3.1   General  ................................ ................................ ................................ ....................  16 
3.2   Aluminum Extru sions ................................ ................................ ................................ . 17 
3.3   OTR Tires  ................................ ................................ ................................ .................  18 
3.3.1    Assessment by the Arbitrator  ................................ ................................ ...................  18 
3.3.2    Separate opinion of one member of the Arbitrator  ................................ ......................  18 
3.4   Conclusion  ................................ ................................ ................................ ................  18 
4   REFERENCE PERIOD  ................................ ................................ ................................ .. 19 
5   ARBITRATOR'S DET ERMINATION OF THE AP PROPRIATE COUNTERFAC TUAL  .............  19 
5.1   Assessment of China's proposed counterfactual  ................................ .............................  20 
5.2   Determination of an alternative counterfactual  ................................ ..............................  21 
5.2.1    Counterfactual for t he USDOC's use of the WTO -inconsistent WA -T methodology with 
zeroing  ................................ ................................ ................................ ............................  22 
5.2.1.1    Coated Paper  ................................ ................................ ................................ ....... 22 
5.2.1.2    OCTG  ................................ ................................ ................................ .................  23 
5.2.1.3    Steel Cylinders  ................................ ................................ ................................ .... 24 
5.2.1.4    PET Film  ................................ ................................ ................................ .............  25 
5.2.2    Counterfactual for the USDOC's use of the WTO -inconsistent Single Rate Presumption  .... 26 
5.2.2.1    Assessment by the Arbitrator  ................................ ................................ ................  26 
5.2.2.2    Separate opinion of one member of the Arbitrator  ................................ ....................  32 
5.3   Conclusion  ................................ ................................ ................................ ................  34 
6   ARBITRATOR'S DET ERMINATION OF THE AP PROPRIATE METHODOLOG Y FOR 
ESTIMATING THE LEVEL  OF NULLIFICATION OR  IMPAIRMENT  ................................ ...... 34 
6.1   Assessment of China's proposed calculation methodology  ................................ ...............  34 
6.1.1    China's proposed DID tabular approach  ................................ ................................ ..... 34 
6.1.2    China's proposed adjustments to the DID tabular approach  ................................ .........  38 
6.1.3    Assessment by the Arbitrator  ................................ ................................ ...................  38 
6.2   Determination of an alternative calculation methodology  ................................ ................  42 
6.2.1    The United  States ' proposed calculation methodologies  ................................ ...............  42 
6.2.1.1    The formula -based approach  ................................ ................................ .................  43 WT/DS471/ARB  
 
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  6.2.1.2    The Armington model  ................................ ................................ ...........................  43 
6.2.2    Assessment by the Arbitrator  ................................ ................................ ...................  45 
6.2.2.1    Assessment of the United  States ' approach for choosing between the two calculation 
methodologies  ................................ ................................ ................................ ..................  45 
6.2.2.2    Assessment of the formula -based approach  ................................ .............................  46 
6.2.2.3   Assessment of the Armington model  ................................ ................................ ....... 48 
6.2.2.3.1    Level of changes in the duty rates  ................................ ................................ ....... 48 
6.2.2.3.2    Small market shares resulting from the depressing effect of the WTO -inconsistent 
anti-dumping duties  ................................ ................................ ................................ ..........  48 
6.2.2.4    Adjustments to the United  States ' proposed Armington model  ................................ ... 50 
6.2.2.4.1    Adjustments to address the small market shares resulting from the  
depressing effect of the WTO -inconsistent anti -dumping duties  ................................ ...............  50 
6.2.2.4.2    Adjustments to reflect the counterfactual determined by the Arbitrator  ....................  51 
6.2.2.5    Conclusion  ................................ ................................ ................................ ..........  53 
7   ARBITRATOR'S IMP LEMENTATION OF THE C HOSEN METHODOLOGY  .........................  53 
7.1   Data inputs  ................................ ................................ ................................ ...............  54 
7.1.1    Total market value and market shares ................................ ................................ ....... 55 
7.1.1.1    Value of US shipments  ................................ ................................ ..........................  55 
7.1.1.2    Value of US imports from China  ................................ ................................ .............  58 
7.1.1.3    Value of US imports from the rest of the world  ................................ ........................  62 
7.1.2    Elasticities  ................................ ................................ ................................ .............  64 
7.1.3    Anti-dumping duty rates  ................................ ................................ ..........................  65 
7.2   Implementation of the Armington model under the two steps ................................ ..........  66 
8   CONCLUSION ................................ ................................ ................................ .............  67 
 
 WT/DS471/ARB  
 
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  LIST OF ANNEXES  
ANNEX A  
WORKING PROCEDURES O F THE ARBITRATOR  
Contents  Page  
Annex  A-1 Working Procedures of the Arbitrator  5 
Annex  A-2 Additional Working Procedures of the Arbitrator concerning  Business Confidential 
Information  10 
ANNEX B 
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 Executive summary of the arguments of the United  States   12 
Annex  B-2 Executive summary of the arguments of China  23 
ANNEX  C 
PROCEDURAL  RULING  OF THE ARBITRATOR  
Contents  Page 
Annex  C-1 Procedu ral Ruling on the United  States ' Request to Partially Open the 
Arbitrator's Meeting to Public Observation  34 
ANNEX D 
GRAPHICAL ILLUSTRATI ONS AND FIGURES CONC ERNING THE PARTIES' PROPOSED CALCULATION  
METHODOLOGIES  
Contents  Page  
Annex  D-1 China's proposed DID tabular approach: Graphical illustrations of the failure to 
meet the parallel trends assumption provided by the United  States   38 
Annex D-2 United  States ' proposed Armington model: Relationship between the change in 
the market share of Chinese exporters within the PRC-wide entity and the 
duration of the anti -dumping orders  39 
Annex D-3 United  States ' proposed Armington model: Relationship between the change in 
the market share of Chinese exporters within the PRC -wide entity and the level 
of the WTO -inconsistent PRC-wide duty rates 40 
 ANNEX E 
DATA INPUTS AND CALCULATIONS OF THE ARBITRATOR  
Contents  Page  
Annex  E-1 Data inputs for US market values in the year prior to the imposition of the anti -
dumping orders  42 
Annex E-2 Data inputs for the share of US imports from China covered by different Chinese 
exporters in the year prior to the imposition of the anti -dumping orders  49 
Annex E-3 List of Chinese exporters outside the PRC -wide entity used to estimate the share 
of different Chinese exporte rs for six anti -dumping orders  57 
Annex E-4 List of Chinese exporters subject to the WA -T duty rates and other Chinese 
exporters outside the PRC -wide entity used to estimate the share of different 
Chinese exporters for three anti -dumping orders  70 WT/DS471/ARB  
 
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  Contents  Page  
Annex E-5 Data inputs for elasticities  74 
Annex E-6 Data inputs for the actual anti -dumping duty rates  76 
Annex E-7 List of anti -dumping duty rates used for two anti -dumping orders  81 
Annex E-8 Data inputs for US market values in 2017  85 
Annex E-9 Code and text version of the Armington model  91 
Annex E-10 Data inputs used to implement the Armington model under the two steps  96 
Annex E-11 Results of implementing the Armington model under the first step  99 
 
  WT/DS471/ARB  
 
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  CASES CITED IN THIS DECISION  
Short Title Full Case Title and Citation  
Canada – Continued 
Suspension  Appellate Body Report, Canada – Continued Suspension of Obligations in the EC 
– Hormones Dispute , WT/DS321/AB/R, adopted 14  November  2008, DSR 
2008:XIV, p.  5373 
EC – Bananas III (Ecuador) 
(Article  22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European Communities under Article  22.6 of the DSU , WT/DS27/ARB/ECU , 
24 March 2000, DSR 2000:V, p.  2237 
EC – Bananas III (US ) 
(Article  22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European  Communities under Article  22.6 of the DSU , WT/DS27/ARB , 
9 April 1999, DSR 1999:II, p.  725 
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, DSR 2003:III, p.  965 
EC – Hormones (US) 
(Article  22.6 – EC) Decision by the Arbitrator, European Communities – Measures Concerning Meat 
and Meat Products (Hormones), Original Complaint by the United  States  – 
Recourse to Arbitration by the European Communities under Article  22.6 of the 
DSU, WT/DS26/ARB , 12 July 1999, DSR 1999:III, p.  1105 
Japan – DRAMs (Korea)  Appellate Body Report, Japan – Countervailing Duties on Dynamic Random 
Access Memories f rom Korea , WT/DS336/AB/R  and Corr.1, adopted 
17 December 2007, DSR 2007:VII, p.  2703 
US – 1916 Act (EC) 
(Article  22.6 – US) Decision by the Arbitrator, United  States  – Anti-Dumping Act of 1916, Original 
Complaint by the European Communities – Recourse to Arbitration by the 
United  States under Article  22.6 of the DSU , WT/DS136/ARB , 
24 February  2004, DSR 2004:IX, p.  4269 
US – Anti-Dumping 
Methodologies (China)  Panel Report, United  States  – Certain Methodologies and Their Application to 
Anti-Dumping Proceedings Involving China , WT/DS471/R  and Add.1, adopted 
22 May 2017, as modified by Appellate Body Report WT/DS471/AB/R , DSR 
2017:IV, p.  1589 
US – Continued Suspension  Appellate Body Report, United  States  – Continued Suspension of Obligations in 
the EC – Hormones Dispute , WT/DS320/AB/R , adopted 14  November  2008, 
DSR 2008:X, p.  3507 
US – COOL (Article  22.6 – 
US) Decisions by the Arbitrator, United  States  – Certain Country of Origin Labelling 
(COOL) Requirements – Recourse to Article  22.6 of the DSU by the 
United  States , WT/DS384/ARB  and Add.1 / WT/DS386/ARB  and Add.1, 
circulated to WTO Members 7  December  2015, DSR 2015:XI, p.  5877 
US – Countervailing and 
Anti-Dumping Measures 
(China)  Appellate Body Report, United  States  – Countervailing and Anti -Dumping 
Measures on Certain Products from China , WT/DS449/AB/R  and Corr.1, adopted 
22 July 2014, DSR 2014:VIII, p.  3027 
US – Anti-Dumping 
Methodologies (China) 
(Article  21.3(c))  Award of the Arbitrator, United  States  – Certain Methodologies and Their 
Application to Anti -Dumping Proceedings Involving China  – Arbitration under 
Article  21.3(c) of the DSU , WT/DS471/RPT , 19 January  2018 
US – Gambling (Article  22.6 
– US) Decision by the Arbitrator, United  States  – Measures Affecting the Cross -Border 
Supply of Gambling and Betting Services – Recourse to Arbitration by the 
United  States  under Article  22.6 of the DSU , WT/DS285/ARB , 
21 December  2007, DSR 2007:X, p.  4163 
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, 
DSR 2001:X, p.  4697 
US – Offset Act (Byrd 
Amendment) (Brazil) 
(Article  22.6 – US) Decision by the Arbitrator, United  States  – Continued Dumping and Subsidy 
Offset Act of 2000, Original Complaint by Brazil – Recourse to Arbitration by the 
United  States  under Article  22.6 of the DSU , WT/DS217/ARB/BRA , 
31 August  2004, DSR 2004:IX, p.  4341 
US – Offset Act (Byrd 
Amendment) (Brazil) 
(Article  22.6 – US) Decision by the Arbitrator, United  States  – Continued Dumping and Subsidy 
Offset Act of 2000, Original Complaint by Brazil – Recourse to Arbitration by the 
United  States  under Article  22.6 of the DSU , WT/DS217/ARB/BRA , 
31 August  2004, DSR 2004:IX, p.  4341 
US – Offset Act (Byrd 
Amendment) (EC) 
(Article  22.6 – US) Decision by the Arbitrator, United  States  – Continued Dumping and Subsidy 
Offset Act of 2000, Original Complaint by the European Communities – 
Recourse to Arbitration by the United  States  under Article  22.6 of the DSU , 
WT/DS217/ARB/EEC , 31 August  2004, DSR 2004:IX, p.  4591 WT/DS471/ARB  
 
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  Short Title Full Case Title and Citation  
US – Stainless Steel 
(Mexico)  Appellate Body Report, United  States  – Final Anti -Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/A B/R, adopted 20  May 2008, DSR 
2008:II, p.  513 
US – Tuna II (Mexico) 
(Article  21.5 – Mexico)  Appellate Body Report, United  States  – Measures Concerning the Importation, 
Marketing and Sale of Tuna and Tuna Products – Recourse to Article  21.5 of the 
DSU by M exico, WT/DS381/AB/RW  and Add.1, adopted 3  December  2015, DSR 
2015:X, p.  5133 
US – Tuna II (Mexico) 
(Article  22.6 – US) Decision by the Arbitrator, United  States  – Measures Concerning the 
Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to 
Article  22.6 of the DSU by the United  States , WT/DS381/ARB , 25 April 2017, 
DSR 2017:VIII, p.  4129 
US – Upland Cotton 
(Article  22.6 – US I) Decision by the Arbitrator, United  States  – Subsidies on Upland Cotton – 
Recourse to Arbitration by the United  States  under Article  22.6 of the DSU and 
Article  4.11 of the SCM Agreement , WT/DS267/ARB/1 , 31 August  2009, DSR 
2009:IX, p.  3871 
US – Washing Machines  Appellate Body Report,  United  States  – Anti-Dumping and Countervailing 
Measures on Large Residential Washers from Korea , WT/DS464/AB/R  and 
Add.1, adopted 26  September  2016, DSR 2016:V, p.  2275 
US – Washing Machines 
(Article  22.6 – US) Decision by the Arbitrator, United  States  – Anti-Dumping and Countervailing 
Measures on Large Residential Washers from Korea – Recourse to Article  22.6 
of the DSU by the United  States , WT/DS46 4/ARB  and Add.1, 8  February  2019 
US – Zeroing (Japan)  Appellate Body Report, United  States  – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R , adopted 23  January  2007, DSR 2007:I, p.  3 
 
 
 WT/DS471/ARB  
 
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  MAIN EXHIBITS REFERRED TO  IN THIS DECISION  
Exhibit  Title 
Exhibit CHN -5 Difference in Difference Estimates (HS10) for 13 "As Applied" Cases  
Exhibit CHN -13 Difference in Difference Estimates (HS10) for 12 "As Such" Examples  
Exhibit CHN -21 China's Revised Estimates of N ullification or Impairment  
Exhibit CHN -31 (BCI)  Economic Discussion of Technical Issues Concerning the Armington Model Used by the 
United  States  
Exhibit CHN -48 China's Adjusted Estimates of N ullification or Impairment  to Take into Account Changing 
Anti-Dumping Duty  Rates  
Exhibit CHN -49 (BCI)  China's Adjusted Estimates of Nullification or Impairment  to Take into Account Only PRC -
Wide Entity Exports  
Exhibit CHN -53 China's Identification of Suitable Benchmarks for All Other A nti-Dumping Duty  Rates  
Exhibit CHN -55 (BCI)  Data Required for Implementing the Armington Model Under Two Steps  
Exhibit CHN -56 (BCI)  Supporting Documents for Data Required for Implementing the Armington Model Under 
Two Steps  
Exhibit USA -5 Table of Relevant Anti -Dumping Duty Rates  
Exhibit USA -7 High Pressure Steel Cylinders From the People's Republic of China : Notice of Court Decision 
Not in Harmony With Final Determination in Less Than Fair Value Investigation, Notice of 
Amended Final Determinatio n Pursuant to Court Decision, Notice of Revocation of 
Antidumping Duty Order in Part, and Discontinuation of Fifth Antidumping Duty 
Administrative Review, 82 Fed. Reg. 46,758 (6  October  2017)  
Exhibit USA -13 (BCI)  Appendices with Domestic Shipment and Imp ort Data, Elasticity Parameters, and Model 
Results for Each Modelling Scenario, sourced from the USITC  
Exhibit USA -15 R. Hallren and D. Riker, An Introduction to Partial Equilibrium Modeling of Trade Policy , 
Economics Working Paper Series (Working Paper 2017 -07-B), USITC (July 2017)  
Exhibit USA -16 Table of Elasticities  
Exhibit USA -19 Code and Text Version of the United  States ' Proposed Armington Model  
Exhibit USA -20 Presentation of Difference -in-Difference Estimation, Columbia University  
Exhibit  USA-21 (BCI)  Table of US Customs Data on US Imports from China  
Exhibit USA -23 J. Angrist, J. David, and J. Pischke, Mostly Harmless Econometrics: An Empiricist's 
Companion , (Princeton University Press, 2009)  
Exhibit USA -30 (BCI)  Updated Table of US Customs Data on US Imports from China  
Exhibit USA -31 (BCI)  Revised Appendices with Domestic Shipment and Import Data, Elasticity Parameters, and 
Model Results for Each Modelling Scenario, sourced from the US ITC (Revised Exhibit  USA-
13) 
Exhibit USA -50 US Federal Register Notices Regarding Final Determinations in Anti -Dumping Duty 
Investigations  
Exhibit USA -51 US Federal Register Notices Regarding Preliminary Determinations in Ant i-Dumping Duty 
Investigations  
Exhibit USA -52 (BCI)  Tables Presenting Armingt on Model  with Import Supply Elastic ity at 10, Inputs for the 
Armington Model, Armington Model  with Import Supply Elasticity Equal to US Domestic 
Supply Elasticity, and Armington Model  with Infinite Import Supply Elasticity  
Exhibit USA -54 (BCI)  Calculated Maximum Share Covered by the PRC -Wide Entity  
Exhibit USA -55 Information on Response Rate to US DOC Q&V Questionnaire in Anti -Dumping Duty 
Investigations  
Exhibit USA -56 (BCI)  
(revised)  Tables of the Maximum Share of the PRC -Wide Entity and Non-Response Rate  
Exhibit USA -57 Table of US Imports from China, World, and Rest of the World in Selected Years  
Exhibit USA -58 Calculations on US Shipments  
Exhibit USA -67 D. Riker, Multinational Production and Employment in an Industry -Specific Model of  Trade , 
Economics Working Paper Series (Working Paper 2018 -08-C), US ITC (August 2018)  
Exhibit USA -68 Paul S. Armington,  A Theory of Demand for Products Distinguished by Place of Production , 
Vol. 1, No.1, International Monetary Fund (March 1969)  
Exhibit USA -77 (BCI)  Anti-Dumping Duty Rates Assigned by the USDOC to Chinese Firms Subject to Anti -
Dumping Duties  
Exhibit USA -79 Table of Anti -Dumping Duty Rates for Certain Anti -Dumping Duty Orders and US Federal 
Register Notices Regarding Certain Anti -Dumping Duty Orders  
Exhibit USA -86 Approach for Estimating the Maximum Share of the PRC -Wide Entity  
Exhibit USA -92 (BCI)  Excel File with Simple Average of Duty Rates for Chinese Exporters Outside the PRC -Wide 
Entity  
Exhibit USA -94 (BCI)  
(revised)  Excel File  with Import Data in the Year Preceding the Imposition of Anti -Dumping Duties  
 
 WT/DS471/ARB  
 
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OTHER DOCUMENTS REFE RRED TO IN THIS DECISION  
Title 
A. Abadie, "Semiparametric Difference -in-Differences Estimators" (2005), Vol. 72, No. 1, The Review of Economic 
Studies  
B. Callaway and P. Sant'Anna, "Difference -in-differences with multiple time periods", Working Paper (2019)  
D. Rubin, "Assignment to Treatment Group on the Basis of a Covariate" (1977), Vol. 2, No.  1, Journal of Educational 
Statistics  
G. Philippidis, H. Resano -Ezcaray, A.I. Sanjuán -López. "Shifting Armington Trade Preferences: A re -examination of the 
Mercosur -EU negotiations" (2014), No. 40. Economic Modelling  
M. Kuiper and F. van Tongeren, "Using gravity to move Armington" (2006), Paper prepared for the Ninth Annual 
Conference on Global Economic Analysis in Addis Ababa, Ethiopia  
M. Lechner, "The estimation of causal effects by difference -in-difference methods" (2011), Vol. 4, No. 3, Foundations 
and Trends in Econometrics  
 
 WT/DS471/ARB  
 
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  ABBREVIATIONS USED I N THIS DECISION  
Abbreviation  Description  
AHAM  Association of Home Appliance Manufacturers  
Aluminum Extrusions  Aluminum Extrusions From the People 's Republic of China ( A-570-967) 
Anti-Dumping Agreement  Agreement on Implementation of Article  VI of the General Agreement on 
Tariffs and Trade 1994  
APP-China  Gold East Paper (Jiangsu) Co., Ltd., Gold Huasheng Paper Co., Ltd., Gold East 
(Hong Kong) Trading Co., Ltd., Ningbo Zhonghua Paper Co., Ltd., Ningbo Asia 
Pulp and Paper Co., Ltd.  
Armington model  Armington imperfect substitutes partial equilibrium model  
Bags Polyethylene  Retail Carrier Bags From the People's Republic of China 
(A-570-886) 
BCI Business confidential information  
BTIC Beijing Tianhai Industry Co. Ltd  
Chengde Group  Jiangsu Chengde Steel Tube Share Co., Ltd. (Jiangsu Chengde) , Taizhou 
Chengde Steel Tube Co., Ltd. (Taizhou Chengde) , and Yangzhou Chengde Steel 
Tube Co., Ltd. (Yangzhou Chengde)  
Coated Paper  Certain Coated Paper Suitable for High -Quality Print Graphics Using Sheet -Fed 
Presses From the People's Republic of China (A-570-958) 
Copper Pipe and Tube Seamless Refined Copper Pipe and Tube From the People 's Republic of China 
(A-570-964) 
Diamond Sawblades  Diamond Sawblades and Parts Thereof from the People 's Republic of China 
(A-570-900) 
DID Difference -in-difference  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
Formula -based approach  Formula -based approach on market shares  
Furniture  Wooden Bedroom Furniture From the People 's Republic of China ( A-570-890) 
GATT  1994 General Agreement on Tariffs and Trade 1994  
GDP Gross domestic product  
HS Harmonized System  
HTS Harmonized Tariff Schedule  
Iron Pipe Fittings  Non-Malleable Cast Iron Pipe Fittings from the People 's Republic of China 
(A-570-875) 
OCTG  Certain Oil Country Tubular Goods from the People's Republic of China 
(A-570-943) 
OTR Tires  Certain New Pneumatic Off -The-Road Tires from the People 's Republic of 
China ( A-570-912) 
Passenger Vehicle and Light 
Truck Tires  Certain Passenger Vehicle and Light Truck Tires from the People's Republic of 
China ( A-570-016) 
PRC People's Republic of China  
PET Film  Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic 
of China  (A-570-924) 
Q&V Quantity and value  
Ribbons  Narrow Woven Ribbons With Woven Selvedge From the People 's Republic of 
China ( A-570-952) 
Sheet and Strip  Stainless Steel Sheet and Strip from the People's Republic of China 
(A-570-042) 
Shrimp  Certain Frozen Warmwater Shrimp From the People 's Republic of China 
(A-570-893) 
Solar Panels  Crystalline Silicon Photovoltaic Cells; Whether or Not Assembled into Modules; 
from the People 's Republic of China ( A-570-979) 
Steel Cylinders  High Pressure Steel Cylinders From the People's Republic of China 
(A-570-977) 
Steel Flat Product  Certain Cold Rolled Steel Flat Products from the People's Republic of China 
(A-570-029) 
Steel Nails  Certain Steel Nails from the People 's Republic of China ( A-570-909) 
Steel Line Pipe  Certain Circular Welded Carbon Quality Steel Line Pipe from the People's 
Republic of China ( A-570-935) 
Steel Pipe  Circular Welded Carbon Quality Steel Pipe from the People's Republic of China 
(A-570-910) 
Steel Products  Certain Corrosion -Resistant Steel Products from the People's Republic of China 
(A-570-026) 
Steel Standard, Line, and 
Pressure Pipe  Certain Seamless Carbon and Alloy Steel Standard Line and Pressure Pipe 
from the People 's Republic of China ( A-570-956) 
Steel Wire Rod  Carbon and Certain Alloy Steel Wire Rod from the People's Republic of China 
(A-570-012) 
TPCO  Tianjin Pipe (Group) Co.  WT/DS471/ARB  
 
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  Abbreviation  Description  
USD United  States  dollar  
USDOC  United  States  Department of Commerce  
USITC  US International Trade Commission  
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23  May 1969, 
1155 UNTS 331; 8 International Legal Materials 679  
WA-WA Weighted average -to-weighted average  
WA-T Weighted average -to-transaction  
Residential Washers  Large Residential Washers from the People's Republic of China ( A-570-033) 
Wood Flooring  Multilayered Wood Flooring From the People 's Republic of China ( A-570-970) 
WTO World Trade Organization  
 WT/DS471/ARB  
 
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  1  INTRODUCTION  
1.1  Original  proceedings  
1.1.  The present arbitration proceedings arise in the dispute initiated by China  concerning certain 
methodologies used by the United  States  in anti -dumping  proceedings  concerning pro ducts imported 
from China.  
1.2.  On 22 May 2017, the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) 
adopted the Appellate Body report in this dispute, together with the report of the panel as modified 
by the Appellate Body. In doing so, the DSB adopted the panel's finding s, which w ere not appealed, 
that certain methodologies used by the United  States are inconsistent with Articles 2.4.2, 6.10, 9.2, 
and 9.3 of the Agreement on Implementation of Article  VI of the General Agreement on Tariffs an d 
Trade 1994 (Anti -Dumping Agreement) and Article  VI:2 of the General Agreement on Tariffs and 
Trade 1994 (GATT  1994).1 
1.3.  On 19  January  2018, following referral to arbitration  under Article  21.3(c) of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes (DSU), an arbitrator determined that 
the reasonable period of time for the United  States  to implement the DSB recommendations and 
rulings would expire on 2 2 August  2018.2 
1.2  Request for arbitration and conduct of arbitrati on proceedings  
1.4.  On 9 September  2018, China  requested authorization from the DSB to suspend concessions or 
other obligations to the United  States  with respect to trade in goods in the amount of U nited States  
dollar (USD)  7.043  billion.3 
1.5.  On 19  September  2018, the United  States  objected to China's proposed level of suspension.4 
At the DSB  meeting of 21  September  2018, the DSB took note  that the matter raised by the 
United  States had been referred to arbitration, as required by Article  22.6 of the  DSU.5 The Arbitrator 
was constituted on 5 October  2018 and was composed as follows : 
Chairperson:  Mr José Pérez Gabilondo  
 
Members:   Ms Beatriz Leycegui Gardoqui  
Ms Enie Neri de Ross6 
1.6.  An organizational meeting was held on 8  November  2018 to discuss procedural aspects of the 
arbitration proceeding s. During the organizational meeting, the United  States  requested the 
Arbitrator to open the meeting with the parties  to the public  in full or in part . On 15 November  2018, 
after consulting with the parties, the Arbitrator adopted its Working Procedures  which left open the 
issue of whether to open the meeting with the parties, pending the Arbitrator's ruling on the 
United  States ' request. At the joint request of  both parties, the Arbitrator also adopted, on 
15 November 2018, additional working procedures to protect the confidentiality of b usiness 
confidential information (BCI ). On 15 November 201 8, the Arbitrator adopted its timetable , which it 
amended on 26  November  2018 and 16  May 2019.  On 13  February 201 9, the Arbitrator issued a 
procedural ruling concerning the United  States ' request for a partially open meetin g and amended 
its Working Procedures accordingly.  
1.7.  In accordance with the timetable and Working Procedures adopted by the Arbitrator, China 
submitted a communication explaining its methodology for calculating  the proposed level of 
suspension of concessions or other obligations on 26  November 2018. The United  States  filed its 
written submission on 7  January  2019, and China filed its written submission on  13 February  2019. 
                                                
1 Panel Report, US – Anti-Dumping Methodologies (China) , para.  8.1. 
2 Award of the Arbitrator, US – Anti-Dumping Methodologies (China) (Article  21.3(c)) , para.  4.1. 
3 Recourse to Article  22.2 of the DSU by China, WT/DS471/18.  
4 Recourse to Article  22.6 of the DSU by the United  States , WT/DS471/19.  
5 WT/DSB/M/418, para.  1.11. 
6 WT/DS471/20.  WT/DS471/ARB  
 
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  The Arbitrator sent questions to the parties  for written responses  on 20  March  2019, to which  the 
parties respon ded on 1 April 2019.  
1.8.  The Arbitrator held its substantive meeting with the parties on 24  April 2019. On 27  April 2019, 
the Ar bitrator sent additional  questions to the parties  for written responses . The parties respon ded 
to these questions on 10  May 2019. In accordance with the Arbitrator's decision to grant certain 
extensions requested by both parties, the parties provided comme nts on each other's responses on 
24 May 2019, the United  States  provided certain data and explanations on 5 and 11  June 2019, and 
China provided comments on these on 13  June 2019.  
1.9.  On 30 September  2019, the Arbitrator issued to the parties a version of its Decision containing 
BCI designated as such and contained between double brackets . In accordance with the Arbitrator's 
decision to grant an extension requested by China, the parties returned, on 8 October 2019, with 
requests for further redactions as well a s requests for certain information to be unredacted. On 
14 October 2019, the parties commented on each other's requests. On 17 October 2019, the United 
States made another request for further redactions. Taking into account the parties' requests  and 
comments , the Arbitrator issued a modified version of its Decision to the parties on 17 October 2019 . 
The Decision of the Arbitrator was circulated to WTO Members on 1 November 2019 . 
1.3  Mandate of the Arbitrator  
1.10.   The United  States  objects to China's propo sed level of suspension of concessions or other 
obligations, contending that the proposed level is not equivalent to the level of nullification or 
impairment caused by the United  States ' failure to implement the DSB recommendations and rulings 
by the expir y of the reasonable period of time. Pursuant to Article  22.4 of the DSU, "[t]he level of 
the suspension of concessions or other obligations authorized by the DSB shall be equivalent to  the 
level of the nullification or impairment ." In proceeding s under Art icle 22.6 of the DSU, the mandate 
of the Arbitrator, as set out in Article  22.7 of the DSU, is as follows:  
The arbitrator acting pursuant to paragraph 6 shall not examine the nature of the 
concessions or other obligations to be suspended but shall determin e whether the level 
of such suspension is equivalent to the level of nullification or impairment . (emphasis 
added)  
1.11.   Thus, our mandate  in these proceedings is to determine whether the level of suspension that 
China propose s (USD 7.043 billion) is equivalent7 to the level of nullification or impairment caused 
by the United  States ' failure to implement the DSB recommendations and rulings by the expiry of 
the reasonable period of time . The burden of proving that the requirements of the DSU have not 
been met rest s on the party challenging the proposed level of suspension8, here the United  States . 
We also recall that, generally , "it is for each party to bring forward the elements to sustain the 
factual assertions it makes, and … each party has a duty to collaborate  in the establishment of the 
facts."9 
1.12.   Should we find that China's proposed  level of suspension of concessions or other obligations 
is not  equivalent to the level of nullification or impairment caused by the United  States' failure to 
implement the DSB recommendations and rulings by the expiry of the reasonable period of time , 
our mandate requires us to determin e the level of suspension that would be equivalent to the level 
of nullification or impairment.10 In making that determ ination , previous arbitrators developed their 
                                                
7 The term "equivalent" has  been found to "connote[] a correspondence, identity or balance between 
two related levels, i.e. between the level of the concessions to be suspended, on the one hand, and the level of 
the nullification or impairment, on the other." (Decision by the Arbitr ator, EC – Bananas III (US) (Article  22.6 –
EC), para.  4.1). 
8 See e.g. Decisions by the Arbitrators, EC – Hormones (US) (Article  22.6 – EC), para.  9; US – 1916 Act 
(EC) (Article  22.6 – US), paras.  3.2-3.3; US – Gambling (Article  22.6 – US), paras.  2.22-2.23; and US – COOL 
(Article  22.6 – US), para.  4.7. 
9 Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  2.24. See also Decisions by the 
Arbitrators, EC – Hormones (US) (Article  22.6 – EC), para.  11; US – 1916 Act (EC) (Article  22.6 – US), 
para. 3.6; and US – COOL (Article  22.6 – US), para.  4.9. 
10 See e.g. Decisions by the Arbitrators, US – Offset Act (Byrd Amendment) (EC) (Article  22.6 – US), 
para. 3.69; US – Gambling (Article  22.6 – US), paras.  3.172 -3.174;; and US – Washing Machines 
(Article  22.6 – US), para.  1.15. WT/DS471/ARB  
 
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  own appropriate methodologies11, based either on elements of methodologies the parties 
proposed12, or on an altogether differ ent approach.13 Our determination of the level of nullification 
or impairment will necessarily be a reasoned estimate, relying on certain assumptions.14 Such 
assumptions must, however, be reasonable and based on "credible, factual, and verifiable 
information ", and "not on speculation ".15 We will not accept claims that are "' too remote ', 'too 
speculative ', or 'not meaningfully quantified. '"16 
1.13.   In fulfilling our mandate, we bear in mind that, pursuant to Article  22.8 of the DSU, the 
suspension of concessions or ot her obligations shall be "temporary"  pending full implementation of 
the DSB recommendations and rulings, or a mutually agreed solution. On this basis, previous 
arbitrators considered that the suspension of concessions or other obligations is to "induce 
compliance".17 Other arbitrators also observed that the concept of equivalence in Article  22.4 of the 
DSU means that obligations cannot be suspended in a "punitive" manner.18 
1.4  Findings of inconsistency in the original proceedings  
1.14.   Since our mandate is to determin e whether China's proposed  level of suspension  of 
concessions or other obligations  is equivalent  to the level of nullification or impairment caused by 
the United  States'  failure to implement the DSB recommendations and rulings by the expiry of the 
reasonable period of time, we find it useful to begin our analysis by recalling the findings of 
inconsistency made in the original proceedings. These findings of inconsistency f all into two 
categories, which, for ease of reference, we refer to as: (a) findings of inconsistency concerning the 
United  States ' use of the weighted average -to-transaction (W A-T) methodology  with zeroing in 
calculating dumping margins; and (b) findings o f inconsistency concerning the United  States' 
treatment of multiple exporters as a single, government -wide entity under the so -called Single Rate 
Presumption.  
1.15.   With respect to the United  States ' use of the WA -T methodology with zeroing, the original 
panel m ade "as applied" findings of violation with respect to dumping calculations made for four 
exporters in four anti -dumping proceedings. More particularly, the panel found that the United  States  
Department of Commerce (USDOC) had acted inconsistently with Art icle 2.4.2 of the Anti -Dumping 
Agreement in determining that three exporters had engaged in targeted dumping, and in applying 
the W A-T methodology with zeroing to all export transactions when calculating the dumping margin s 
for these three exporters in the  Coated Paper , OCTG , and Steel Cylinders  original i nvestigations.19 
The panel also found that the USDOC had acted inconsistently with Article  9.3 of the Anti -Dumping 
Agreement and Article  VI:2 of the GATT  1994 in applying the WA -T methodology with zeroing w hen 
calculating the dumping margin for one exporter in the third administrative review in PET Film .20 
These findings of inconsistency were not appealed.  
1.16.   As for the Single Rate Presumption, the  original  panel made findings of violation with respect 
to the Si ngle Rate Presumption "as such" and  "as applied " in 38 anti -dumping proceedings  covering 
13 products .21 More particularly, the panel found that the USDOC's treatment of all exporters  that 
                                                
11 See e.g. Decision by the Arbitrator, US – Offset Act (Byrd Amendment) (EC) (Article  22.6 – US), 
para. 3.115.  
12 See e.g. Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  3.174.  
13 See e.g. Decis ion by the Arbitrator, US – Offset Act (Byrd Amendment) (EC) (Article  22.6 – US), 
paras.  3.69-3.79. 
14 Decision by the Arbitrator, EC – Hormones (US) (Article  22.6 – EC), para.  41. See also Decisions by 
the Arbitrators, US – COOL (Article  22.6 – US), para.  4.5; and US – Washing Machines (Article  22.6 – US), 
para. 1.16. 
15 Decision by the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), paras.  5.54 and 5.63. See also 
Decisions b y the Arbitrators, US – COOL (Article  22.6 – US), para.  4.5; US – Tuna II (Mexico) (Article  22.6 – 
US), para.  5.16; and US – Washing Machines (Article  22.6 – US), para.  1.16. 
16 Decision by the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), para.  5.57. 
17 Decisions by the Arbitrators, EC – Bananas III (US) (Article  22.6 – EC), para.  6.3; EC – Hormones 
(US) (Article  22.6 – EC), para.  40; and US – 1916 Act (EC) (Article  22.6 – US), para.  5.7. 
18 Decisions by the Arbitrators, EC – Bananas III (US) (Article  22.6 – EC), para.  6.3; and US – 1916 Act 
(EC) (Article  22.6 – US), para.  5.8. 
19 Panel Report, US – Anti-Dumping Methodologies (China) , para.  8.1.a.i -iv. 
20 Panel Report, US – Anti-Dumping Methodologies (China) , para.  8.1.b.  
21 (1) Aluminum Extrusions , (2) Coated Paper , (3) Shrimp , (4) OTR Tires , (5) OCTG , (6) Solar Panels , 
(7) Diamond Sawblades , (8) Steel Cylinders , (9) Wood Flooring , (10) Ribbons , (11) Bags, (12) PET Film , and 
(13) Furniture . WT/DS471/ARB  
 
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  do not pass the so-called Separate Rate Test  as a single government -wide entity in anti -dumping 
proceedings concerning non -market economy countries was a measure of general and prospective 
application that was, "as such ", inconsistent with Articles 6.10 and 9.2 of the Anti -Dumping 
Agreement. The panel also found that the USDOC had acted inconsistently with Articles 6.10 and 
9.2 of the Anti -Dumping Agreement in applying that measure to establish a People's Republic of 
China (PRC) -wide entity and in assign ing to  this entity a single PRC -wide duty rate in 13 original 
investigations and 25 administrative reviews.22 These findings of inconsistency were not appealed.  
1.5  Structure of analysis  
1.17.   Below, we first address certain procedural matters . We then address certain preliminary issues 
by setting out  the scope o f these arbitration proceedings  in terms of the products and anti -dumping 
orders at issue as well as the reference period for determining the level of nullification or impairment 
caused by the United  States ' failure to implement the DSB recommendations and  rulings . In 
accordance with our mandate, set out in section 1.3 above, w e then proceed to determine whether 
the level of suspension of concessions or other obligati ons that China propose s is equivalent to the 
level of nullification or impairment . In this regard, we will assess: (a)  the counterfactual used by 
China as the hypothetical scenario describing what would have happened had the United  States  
implemented the D SB recommendations and rulings by the expiry of the reasonable period of time,  
and (b) the calculation methodology  used by China to estimate  the level of nullification or impairment 
caused by the United  States ' failure to implement the DSB recommendations and rulings by the 
expiry of the reasonable period of time . If we do not find the counterfactual or calculation 
methodology  that China propose s appropriate,  we will make our own determination of the level of 
suspension that would be equivalent to the level of nullification or impairment.  
2  PROCEDURAL MATTERS  
2.1.  In this section, we address two procedural matters raised in these proceedings , namely, the 
treatment of BCI  and the United  States ' request for a partially open meeting . 
2.1  Treatment of BCI  
2.2.  At the Arbitrator's organizational meeting held on 8 November  2018, both parties requested 
that the Arbitrator adopt additional working procedures to protect the confidentiality of BCI 
submitted in the course of the proceedings. As indicated in the preceding section, the Arbitrator 
adopted Additional Working Procedures of the Arbitrator Concerning Business Confidential 
Information (Additional Working  Procedures) on 15 November  2018.23 
2.3.  The Additional Working Procedures  define  the scope of information covered by the Additional 
Working Procedures24, provide that each party shall clearly indicate the presence of BCI in its 
submissions25, and limit access to,  and permissible use of, BCI submitted in the course of the 
proceedings.26 
2.4.  Paragraph 8 of the Additional Working Procedures provides that "[t]he Arbitrator will not 
disclose BCI, in its decision or in any other way, to persons not authorized under these pro cedures 
to have access to BCI ." The paragraph goes on to state that the Arbitrator may " make statements 
of conclusion drawn from such information " and that t he parties shall be given an opportunity to 
ensure that all BCI has been redacted from the Arbitrat or's Decision prior to its circulation to the 
WTO membership. This paragraph forms the legal basis on which the Arbitrator has redacted BCI 
statements from the public version of this Decision.27 
2.5.  Accordingly, the text of the version of our Decision circulated to Members is identical to the 
text of the confidential version issued to the parties, with the exception of passages that disclose 
                                                
22 Panel Report, US – Anti-Dumping Methodologies (China) , para.  8.1.c.iii.  
23 See Annex A -2. 
24 Additional Working Procedures, Annex A -2, para.  1. 
25 Additional Working Procedures, Annex A -2, paras.  6 and 7.  
26 Additional Working Procedures, Annex A -2, paras.  4 and 5.  
27 See Appellate Body Report, US – Tuna I I (Mexico) (Article  21.5 – Mexico) , para.  5.4. WT/DS471/ARB  
 
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  BCI. Such passages have been  replaced by "[[ ***]]". In draft ing and redacting th e Decision, we 
have tried to ensure that the public version of our Decision is understandable.28 
2.2  United  States ' request to open the Arbitrator's meeting  to public  observation  
2.6.  At the organizational meeting held on 8  November  2018, the Uni ted States  requested that 
paragraph 10 of our draft Working Procedures be modified to open our meeting  with the parties to 
the public, in full or in part . China objected to this request. In written comments submitted on 
12 November  2018, the United  States  reiterated its request , and China  its objection . On 
14 November 2018,  each party commented on the comments submitted by the other party.  
2.7.  On 13 February  2019, we communicated to the parties our ruling  declining the United  States' 
request and confirmed that our meeting with the parties would be conducted in closed session. The 
full text of our ruling on this matter  is contained in Annex B-1. 
3  SCOPE OF THE PRESENT ARBITRATION PROCEEDI NGS 
3.1  General  
3.1.  In this section, we set out the scope of the products and anti-dumping orders that will form 
the basis of our determination of the level of nullification or impairment  caused by the United  States ' 
failure to implement the DSB recommendations and rulings by the expiry of the reasonable period 
of time.  
3.2.  In estimatin g the level of nullification or impairment, China provides calculations for both the 
"as applied" and the "as such" findings of violation made in the original proceedings. With respect 
to the "as applied" findings of violation, China initially relied on th e 13 anti-dumping orders that 
were subject to th e "as applied"  findings  of violation, namely: (1) Aluminum Extrusions , (2) Bags, 
(3) Coated Paper , (4) Diamond Sawblades , (5) Furniture , (6) OCTG , (7) OTR Tires , (8) PET Film , 
(9) Ribbons , (10) Shrimp , (11)  Solar Panels , (12) Steel Cylinders , and (13)  Wood Flooring . China  
subsequently excluded Aluminum Extrusions  from the scope and instead relies on the remaining 
12 relevant anti -dumping orders.29 With respect to the "as such" findings of violation, China argues 
that more than 100 anti -dumping orders are affected by the "as such" findings of violation,  but 
selects only 12  additional anti -dumping orders as the basis for estimating the level of nullification or 
impairment concerning  the "as such" findings of violation . These are: (14) Copper Pipe and Tube , 
(15) Iron Pipe Fittings , (16) Passenger Vehicle and Light Truck Tires , (17) Residential Washers , 
(18) Sheet and Strip , (19) Steel Flat Products , (20) Steel Line Pipe , (21) Steel Nails , (22) Steel Pipe , 
(23) Steel Products , (24) Steel Standard, Line, and Pressure Pipe , and (25) Steel Wire Rod . 
3.3.  Despite providing calculations for both the "as applied" and "as such" findings of violation, 
China bases its request for suspension in the amount of USD 7.043 billion  only on the "as applied" 
findings of violation , arguing that these alone substantiate its request.30 If the A rbitrator were to 
reject or lower China's estimated level of nullification or impairment  concerning  the "as applied" 
findings of violation , China req uests the Arbitrator to "add to the lowered estimate" the level of 
nullification or impairment concerning  the "as such" findings of violation .31 
3.4.  In estimating a lower level of nullification or impairment than that China propose s and arguing 
that China's req uest for suspension in the amount of USD 7 .043 billion does not meet the 
requirements of the DSU, the United  States  initially relied on all  13 anti-dumping orders  that were 
subject to the "as applied" findings of violation  as well as the 12 additional selected anti -dumping 
orders that were subject to the "as such" findings of violation .32 Following China's decision to exclude 
Aluminum Extrusions  from its calculation s, the United  States did so as well.33 Further, following the 
USDOC's revocation of the OTR Tires  order on 10  May 2019, the United  States  asked the Arbitrator 
                                                
28 See Appellate Body Report, Japan – DRAMS (Korea) , para.  279. 
29 China's written submission, fn 60; and response to Arbitrator question No. 1(a), para.  1. 
30 China's methodology paper, paras.  12 and 173.  
31 China's methodology paper, para.  173. 
32 See e.g. United  States ' written submission, paras.  4 and 7.  
33 United  States ' response to Arbitrator question No. 1(b), para.  2. WT/DS471/ARB  
 
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  to also exclude this order from its determination, arguing that there can be no nullification or 
impairment concerning this order.34 
3.5.  While there is no disagreement between the parties concerning 23 of the 25 anti -dumping 
orders at issue, they have differing views on whether we should include Aluminum Extrusions  and 
OTR Tires  in our determination. We add ress each of these anti -dumping orders separately below, 
and then provide an overall conclusion on the scope of these arbitration proceedings.  
3.2  Aluminum Extrusions  
3.6.  China initially provided calculations for Aluminum Extrusions  but subsequently chose to exclu de 
this anti -dumping order, because  the USDOC expanded the product scope of this anti -dumping order 
by including additional Harmonized Tariff Schedule  (HTS) numbers in the period following the initial 
WTO dispute settlement proceedings. Since China's calculation methodology for estimating  the level 
of nullification or impairment relies on public data, China considers that the expansion of the HTS 
numbers would result in "complications"35, a "disproportionate amount of work"36, and "extreme 
(but unavoidable) u ncertainty".37 China submits that it has chosen to exclude Aluminum Extrusions  
"for simplicity of presentation and in order to avoid a long, arduous debate about product scope"38, 
also noting that its estimated level of nullification or impairment "far excee ds its $7 billion request " 
even without Aluminum Extrusions .39 China, however,  argues that Aluminum Extrusions  should not 
be excluded if the Arbitrator were to use a calculation methodology other than the one China 
propose s.40 Specifically, China argues that the United  States ' proposed calculation methodology does 
not face the same complications since it does not rely on public data.41 The United  States  does not 
object to China's decision to exclude Aluminum Extrusions  from its calculations, but submits that the 
scope should not depend on the methodological approach followed by the Arbitrator, as suggested 
by China.42 In the United  States' view, this wo uld run counte r to "fundamental principles of 
procedural fairness", as it would require the United  States  to "try to argue against a constantly 
moving target".43 
3.7.  It is undisputed that the Aluminum Extrusions  order is  covered by the findings of inconsistency 
in the origin al proceedings, and that China clearly identified Aluminum Extrusions  as forming part of 
the scope of these arbitration proceedings in its methodology paper. The United  States  has not 
contested China's explanation that the exclusion of Aluminum Extrusions  from China's calculations 
is based on practical reasons related to the use of public data under China's proposed calculation 
methodology .44 We see no such  practical reasons with respect to other calculation methodologies , 
including the one that the United  States propose s. Indeed, the United  States  itself provided 
calculations for Aluminum Extrusions  without pointing to any practical difficulties.45 
3.8.  In light of this, we see no reason to prevent China from excluding Aluminum Extrusions  from 
its own calculations while requesting that the Arbitrator not exclude Aluminum Extrusions  if it were 
to use a calculation methodology  other than the one China propose s. Further, w e do not believe that 
this would deprive the United  States of any due process rights. Since Aluminum Extrusions  was 
clearly identified in China's methodology paper, the United  States had sufficient time  and opportunity 
to develop its arguments and c alculations with respect to  this anti -dumping order. Indeed, this is 
exactly what the United  States  did in its written submission  as well as in its responses to the 
Arbitrator's questions.46 
                                                
34 United  States ' comments on China's responses to Arbitrator questions, para.  2. 
35 China's written submission, fn 60.  
36 China's response to Arbitrator question No. 1(a), para.  1. 
37 China's response to Arbitrator question No. 1(a), para.  1. 
38 China's response to Arbitrator question No. 50(a), para.  2. 
39 China's opening statement at the meeting of the Arbitrator, para.  42. See also China's response to 
Arbitrator question No. 50(a), para.  4. 
40 China's opening statement at the meeting of the Arbitrator, para.  42. 
41 China's response to Arbitrator question No . 50(a), para.  3. 
42 United  States ' response to Arbitrator question No. 50(b), para.  2. 
43 United  States ' response to Arbitrator question No. 50(b), para.  2. 
44 United  States ' comments on China's response to Arbitrator question No. 50(a), para.  4. 
45 United  States' written submission, para.  86. 
46 See e.g. United  States ' written submission, paras.  60, 76 and 86; and response to Arbitrator question 
No. 62, paras.  58-73. WT/DS471/ARB  
 
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  3.3  OTR Tires  
3.3.1   Assessment by the Arbitrator  
3.9.  The United  States  provided arguments and calculations concerning OTR Tires  throughout these 
arbitration proceedings but explained, in its comments on China's responses to questions, that the 
USDOC revoked this anti -dumping order on 10 May 2019, effective as of 4  February  2019. In light 
of this, the United  States  argues that there can be no nullification or impairment concerning 
OTR Tires, and that the Arbitrator should exclude it from the scope of its determination.47 When 
given the opportunity to comment on the new information and arguments provided by the 
United  States, China objected to the United  States ' approach, requesting that the Arbitrator take 
into account this order in determining the level of nullification or impairment. In this regard, China 
points out that OTR Tires  order had not been revoked by the expiry of the reasonable period of time, 
22 August  2018, and remained effective for six additional months, covering most of the duration of 
these arbitration p roceedings. The omission of OTR Tires  would, in China's view, leave China without 
remedies for redressing the nullification or impairment suffered after the expiry of the reasonable 
period of time. China further submits that the United  States  did not revok e the OTR Tires  order with 
a view to implementing the DSB recommendations and rulings, and points to the importance of 
inducing the United  States  to withdraw or modify the additional 24 anti -dumping orders at issue.48 
3.10.   Our mandate is to determine whether the  level of suspension that China propose s is 
equivalent to  the level of nullification or impairment caused by the United  States ' failure to 
implement the DSB recommendations and rulings by the expiry of the reasonable period of time . As 
explained below, whe re relevant and appropriate, we take into account modifications to the anti -
dumping orders at issue implemented by the USDOC prior to the expiry of the reasonable period of 
time. For OTR Tires , however, it is undisputed that this anti -dumping order was in full effect by the 
expiry of the reasonable period of time. Consequently, if we were to exclude OTR Tires  from the 
scope of our determination, we would be ignoring the nullification or impairment caused by the 
failure of the United  States  to implement the DSB recommendations and rulings on OTR Tires  by the 
expiry of the reasonable period of time. Such an approach would not be consistent with our 
mandate .49 
3.3.2   Separate opinion of one member of the Arbitrator  
3.11.   The reasonable period of time for the United  States  to implement the DSB recommendations 
and rulings expired on 22 August 2018.50 The anti -dumping order on OTR Tires  was withdrawn by 
the USDOC on 4  February  2019. Thus, the DSB recommendations and rulings with respect to this 
order were fully implemented within  less than six months following the expiry of the reasonable 
period of time. In light of this, I disagree with the majority's decision to take this order fully into 
account in estimating the level of nullification or impairment. In my view, the estimat e of the level 
of nullification or impairment for this particular order should be prorated because it only remained 
in force for less than six months following the expiry of the reasonable period of time. Further, the 
DSB should authorize China to exercise its right to suspend concessions or other obligations with 
regard to this order for one year  only, in an amount corresponding to the prorated level of 
nullification or impairment.  
3.4  Conclusion  
3.12.   For the reasons  set out above , we consider the scope of these arb itration proceedings to be 
as follows:  For the purpose of assessing  the level of nullification or impairment  estimated by China , 
we will base our analysis on the 12 anti-dumping orders subject to the "as applied" findings of 
violation  other than Aluminum E xtrusions . These 12 anti -dumping orders are  (1) Bags, (2) Coated 
Paper , (3) Diamond Sawblades , (4) Furniture , (5) OCTG , (6) OTR Tires , (7) PET Film , (8) Ribbons , 
(9) Shrimp , (10)  Solar Panels , (11) Steel Cylinders , and (12)  Wood Flooring . 
                                                
47 United  States ' comments on China's responses to Arbitrator questions, para.  2. 
48 China's communication of 13  June 2019, pp.  4-5. China explains that the USDOC revoked OTR Tires  
in the context of a sunset review, due to a lack of ongoing injury to the US domestic industry. (Ibid.)  
49 For a similar approach, see Decision by the Arbitrato r, US – Tuna II (Mexico) (Article  22.6 – US), 
paras.  3.4-3.25. 
50 Award of the Arbitrator, US – Anti-Dumping Methodologies (China) (Article  21.3(c)) , para.  4.1. WT/DS471/ARB  
 
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  3.13.    If we find that the level of suspension that China propose s is not equivalent to the level of 
nullification or impairment stemming from these 12 anti -dumping orders and proceed to make our 
own determination using a different calculation methodology , we will b ase our determination on all 
13 anti -dumping orders subject to the "as applied" findings of violation as well as the 12 additional 
anti-dumping orders subject to the "as such" findings of violation .  These 25 anti -dumping orders 
are (1) Aluminum Extrusions , (2) Bags, (3) Coated Paper , (4) Diamond Sawblades , (5) Furniture , 
(6) OCTG , (7) OTR Tires , (8) PET Film , (9) Ribbons , (10) Shrimp , (11)  Solar Panels , (12) Steel 
Cylinders , (13) Wood Flooring , (14) Copper Pipe and Tube , (15) Iron Pipe Fittings , (16) Passe nger 
Vehicle and Light Truck Tires , (17) Residential Washers , (18)  Sheet and Strip , (19) Steel Flat 
Products , (20) Steel Line Pipe , (21) Steel Nails , (22) Steel Pipe , (23) Steel Products , (24) Steel 
Standard, Line, and Pressure Pipe , and (25) Steel Wire Rod . 
3.14.   All of these 25 anti -dumping orders are covered by the original panel's findings o f violation  
concerning the USDOC's use of the Single Rate Presumption . Only four of these  anti-dumping orders, 
namely Coated Paper , OCTG , Steel Cylinders , and PET F ilm, are covered by the original panel's 
findings of violation  concerning the USDOC's use of the WA -T methodology with zeroing.  
4  REFERENCE PERIOD  
4.1.  Although the reasonable period of time, for the United  States  to implement the DSB 
recommendations and rulings,  did not expire until 22 August  2018, China uses the calendar year of 
2017 as the reference period for determining the level of nullification or impairment caused by the 
United  States' failure to implement these recommendations and rulings.51 China explains that 2017 
is the most recent  year for which complete  data is available , and further argues that its exports to 
the United  States  have been seriously distorted by multiple policy shifts in the United  States  during 
the calendar year of 2018, which  resulted in additional tariffs on numerous products.52 The 
United  States also uses 2017 as the reference period since this is a recent period of time for which 
data is available.53 
4.2.  Taking into account the reasons presented by both parties, we too consi der that 2017 is a 
reasonable reference period to use for determining the level of nullification or impairment caused by 
the United  States ' failure to implement the DSB recommendations and rulings  by the expiry of the 
reasonable period of time . 
5  ARBITRATOR' S DETERMINATION OF THE  APPROPRIATE COUNTERF ACTUAL  
5.1.  In substantiating its request for suspension in the amount of USD 7.043 billion, China estimates 
the level of nullification or impairment caused by the United  States ' failure to implement the DSB 
recommenda tions and rulings by using a "counterfactual". Counterfactuals are frequently used by 
arbitrators and reflect  "a hypothetical scenario that describes what would have happened in terms 
of trade flows had the responding party implemented the DSB recommendati ons and rulings" .54  
5.2.  We see a counterfactual as an analytical tool that allows an arbitrator acting under Article  22.6 
of the DSU to determine the level of nullification or impairment caused by the WTO -inconsistent 
measures maintained by the original respon dent. It is for the original respond ent, here the 
United  States, to determine how to implement the DSB recommendations and rulings in order to 
bring its measure into compliance  with the covered agreements . Therefore, in determining a 
counterfactual, we wil l not prejudge how exactly the United  States  would have implemented the DSB 
recommendations and rulings at issue. N or will we  speculate on which compliance scenario would 
be the "most likely".55 Rather, we will evaluate whether China's  proposed counterfactu al reflects  "at 
least a plausible or 'reasonable' compliance scenario".56 This assessment is, as explained by the 
arbitrator in US – Gambling (Article  22.6 – US), connected to the specific circumstances of the 
                                                
51 China's methodology paper, para.  54. 
52 China's methodology paper, paras.  58-65. 
53 United  State s' written submission, fn 27.  
54 Decision by the Arbitrator, US – Tuna II (Mexico) (Article  22.6 – US), para.  4.4. 
55 Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  3.26. 
56 Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  3.27. See also Decisions by the 
Arbitrators, US – Tuna II (Mexico) (Article  22.6 – US), para.  4.5; and US – Washing Machines (Article  22.6 – 
US), para.  3.10. WT/DS471/ARB  
 
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  dispute and the original proceedings.57 While we will necessarily have to rely on certain assumptions 
to answer the hypothetical question of what would have happened if the United  States  had 
implemented the DSB recommendations and rulings, these assumptions must be reasonable and 
"accurately reflect the benefits … that have actually been nullified or impaired".58 
5.3.  With these overall considerations in mind , we will first assess the counterfactual that China 
propose s. If we find that this counterfactual does not reflect a reasonable or plausible  compliance 
scenario, we will proceed to determine an alternative counterfactual  for all 25 anti -dumping orders 
at issue .59 
5.1  Assessment of China's proposed counterfactual  
5.4.  China proposes to use the withdrawal of the WTO -inconsistent measures as the c ounterfactual. 
In China's view, this entails withdrawal of the entirety of the anti-dumping orders at issue, meaning 
withdrawal of the anti -dumping duties assigned to all Chinese exporters under these anti -dumping 
orders.  
5.5.  China argues, first, that withdraw al of the WTO -inconsistent measures reflects the "express 
preference" in the DSU60 and the "predominate practice" in prior Article  22.6 arbitration 
proceedings.61 Second, China points out that the United  States  has taken no action to comply with 
the DSB reco mmendations and rulings, and argues that China's proposed counterfactual would 
provide an incentive to induce compliance.62 Third, China argues that its proposed counterfactual is 
appropriate in the context of this specific dispute because it can be applied  "easily and consistently" 
to all of the anti -dumping orders at issue63 without the complexity of having to distinguish between 
the different findings of inconsistency64 or having to speculate about factual or legal aspects.65 The 
United  States  opposes China' s proposed counterfactual, arguing that it goes beyond the DSB 
recommendations and rulings66 because the findings of inconsistency in the original proceedings 
relate only to certain aspects of the anti -dumping orders at issue, whereas other aspects have not  
been found WTO -inconsistent.67 
5.6.  We recall that the counterfactual reflects a hypothetical scenario describing what would have 
happened if the United  States  had brought its WTO -inconsistent measures into compliance with the 
DSB recommendations and ruling s by the expiry of the reasonable period of time. China's proposal 
to use the withdrawal of all of the anti -dumping orders at issue as the counterfactual is premised on 
the understanding that the "WTO-inconsistent measures " comprise the entirety of the anti -dumping 
orders  at issue . However, and as described  in section 1.4 above, the findings of violation  in the 
original proceedings did not concern the entirety of the anti-dumping orders  at issue , but rather the 
USDOC's use of certain methodologies  in calculatin g the dumping margins for a subset of the Chinese 
exporters subject to the relevant anti -dumping orders . More particularly, the measures found to be 
WTO-inconsistent were the USDOC's use of the WA -T methodology with zeroing  "as applied" in 
certain anti -dumping proceedings,  and its use of the Single Rate Presumption  "as such" and "as 
applied" in certain anti -dumping proceedings. Thus, the scope of the findings of violation in the 
original proceedings covers less than the entirety of the anti -dumping orders a t issue. First , the 
findings of violation pertain only to the USDOC's determination of dumping in the proceedings 
resulting in the anti -dumping orders at issue. No other substantive aspects, such as the USDOC's 
                                                
57 Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  3.30. 
58 Decision  by the Arbitrator, US – Gambling (Article  22.6 – US), para.  3.30. 
59 We recall that, although China has excluded Aluminum Extrusions  from its calculations due to 
practical reasons relating to its calculation methodology, we have determined that it would be  appropriate to 
base our determination of the level of nullification or impairment on all 25 anti -dumping orders at issue if we 
were to reject China's estimated level of nullification or impairment. (See paras.  3.6-3.8 and 3.12-3.13 above). 
We therefore find it useful to determine an appropriate counterfactual for all 25 anti -dumping orders at issue.  
60 China's written submission, para.  8. See also ibid. paras.  11-19. 
61 China's written submission, para.  9. See also ibid. paras.  21-46; and China's response to Arbitrator 
question No. 2(a), paras.  9 and 11.  
62 China's written submission, paras.  88-94. See also China's response to Arbitrator question No. 2(a), 
para. 31. 
63 China's written submission, para.  10. 
64 China's methodology paper, pa ra. 25.  
65 China's methodology paper, para. 24; written submission, para. 86; and response to Arbitrator 
question No. 2(a), paras.  25 and 27 -29. 
66 United  States ' written submission, para. 28. See also ibid. paras.  29-36. 
67 United  States ' written submission,  para. 35. WT/DS471/ARB  
 
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  determination of injury or causality, nor any procedural aspects of the proceedings, were implicated. 
Second, the dumping determinations implicated by the findings of violation pertain to a subset of 
the Chinese exporters subject to the anti -dumping orders. More particularly, in the relevant anti -
dumping proceedings, the USDOC calculated individual duty rates for the Chinese exporters chosen 
for individual examination; assigned the so -called separate duty rate to the Chinese exporters that 
passed the Separate Rate Test but were not chosen for individu al examination; and assigned the 
PRC-wide duty rate to the Chinese exporters that did not pass the Separate Rate Test. It is 
undisputed that, in most of the anti -dumping orders, neither the dumping determinations made for 
the exporters that the USDOC  exami ned individually , nor those made for the exporters subject to 
the separate duty rate, are implicated by the findings of violation in the original proceedings. China 
also acknowledges that certain elements of the anti -dumping orders were not found to be WTO -
inconsistent.68 
5.7.  Accordingly, the counterfactual must reflect what would have happened if, by the expiry of the 
reasonable period of time,  the USDOC ceased using the WTO-inconsistent WA-T methodology with 
zeroing and the WTO-inconsistent Single Rate Presump tion in the relevant anti-dumping 
proceedings , in this limited context . In our view, it would not be reasonable to assume that, had the 
USDOC ceased using the WTO -inconsistent WA -T methodology with zeroing and the WTO-
inconsistent Single Rate Presumption, it would have withdrawn the entirety of the anti -dumping 
orders, includ ing the anti -dumping duties imposed on exporters whose dumping margins were not 
calculated using these WTO -inconsistent methodologies. We agree with the United  States that this 
would go beyond the DSB recommendations and rulings.  
5.8.  While we do not disagree w ith China's view that suspension of concessions or other obligations 
is meant to induce compliance , we do not believe that this warrants suspension of concessions or 
other obligations at a level going beyond the DSB recommendations and rulings. In our view , this 
would run the risk of suspending concessions or other obligations in a punitive manner.  Further, 
while China's proposed counterfactual is undoubtedly more straightforward and easier to implement 
for purposes of estimat ing the level of nullification and impairment, in our view, this does not 
necessarily render the counterfactual a reasonable or plausible  compliance scenario. We cannot let 
simplicity outweigh  our guiding principle  that the counterfactual must represent a reasonable or 
plausible complia nce scenario.  
5.9.  For the reasons set out above, we conclude that China's proposal to use the withdrawal of the 
entirety of the anti -dumping orders at issue as the counterfactual  does not reflect a reasonable or 
plausible compliance scenario. In order to fulfi l our mandate, we therefore proceed to determine an 
alternative counterfactual  to provide the basis for our estim ation of the level of nullification or 
impairment.  
5.2  Determination of an alternative counterfactual  
5.10.   Having found that China's proposed counterfac tual does not reflect a reasonable or plausible 
compliance scenario, we proceed to determine an alternative counterfactual. In this regard, we find 
it useful to begin with an assessment of the United  States ' proposed counterfactual and consider 
whether tha t counterfactual can provide the basis for our determination.  
5.11.   The United  States  proposes to modify the anti -dumping duty rates calculated by the USDOC 
using the WTO -inconsistent methodologies, i.e. the WA -T methodology with zeroing and the Single 
Rate Presumption. The United  States ' proposal follows a case -by-case approach, under whi ch the 
proposed counterfactual varies depending on the specific factual circumstances of each anti -dumping 
order and the types of violation it entails. In the United  States' view, this is the only way to correctly 
estimate the impact of the USDOC's continu ed application of the WTO -inconsistent methodologies 
on China's exports to the United  States .69 China criticizes the United  States ' approach for being 
overly complex and for requiring too much speculation about legal and factual aspects  and too much 
company -specific data that may not be publicly available.70 
                                                
68 China's response to Arbitrator question No. 2, para. 13. 
69 United  States ' written submission, paras.  42-47. 
70 China's written submission, paras.  68-87; and response to Arbitrator question No. 2(a), paras.  24 
and 29. WT/DS471/ARB  
 
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  5.12.   In our view,  the complexity of the United  States ' proposed counterfactual does not, in and of 
itself, render it unreasonable or implausible.  As explained above, the counterfactual must reflect 
what would have happened if , by the expiry of the reasonable period of time,  the USDOC ceased 
using the WA -T methodology with zeroing and the Single Rate Presumption in the relevant anti-
dumping proceedings. In light of this , we agree with the United  States ' overarch ing approach for 
determining the appropriate counterfactual. Specifically, we find it appropriate to determine the 
counterfactual on a case -by-case basis, taking into account the specific circumstances of each anti -
dumping order and the types of violations it entails . 
5.13.   Below, we determine the appropriate counterfactual for all 25 anti -dumping orders, starting 
with the counterfactual for the USDOC's use of the  WTO-inconsistent  WA-T methodology with zeroing 
in four anti -dumping orders and moving on t o the counterfactual for the USDOC's use of the WTO-
inconsistent Single Rate Presumption in all 25 anti -dumping orders at issue. We then provide an 
overall conclusion on the appropriate counterfactual for all 25 anti -dumping orders at issue.  
5.2.1   Counterfactua l for the USDOC's  use of the WTO -inconsistent WA-T methodology 
with zeroing  
5.14.   As mentioned above, the original panel's findings of violation concerning the USDOC's use of 
the WA -T methodology with zeroing only cover four of the anti -dumping orders at issue, namely 
Coated Paper , OCTG , Steel Cylinders , and PET Film . Due to the different factual circumstances 
surrounding these four anti -dumping orders, the United  States  proposes different counterfactuals 
for each order. We also address each anti -dumping order se parately below.  
5.2.1.1   Coated Paper  
5.15.   In the original investigation in  Coated Paper , the USDOC determined that the Chinese exporter 
APP-China had engaged in targeted dumping, and calculated two dumping margins for this exporter. 
The first dumping margin was [[ ***]]% and was calculated using the weighted average -to-weighted 
average (WA -WA) methodology, one of the two methodologies which, pursuant to Article  2.4.2 of 
the Anti -Dumping Agreement, must normally be used in calculating dumping margins. The second 
dumping m argin was 7.62% and was calculated using the exceptional WA -T methodology permitted 
under Article  2.4.2 in situations involving targeted dumping. The USDOC applied the WA -T 
methodology with zeroing to all of APP -China's export transactions. Since the WA -T dumping margin 
was higher than the WA -WA dumping margin, the USDOC determined that the WA -WA dumping 
margin would conceal APP -China's targeted dumping and therefore used the WA -T dumping margin 
to determine APP -China's individual duty rate.71 The USDOC also  used the WA -T duty rate calculated 
for APP -China as the separate duty rate assigned to the Chinese exporters that passed the Separate 
Rate Test but were not chosen for individual examination.72 
5.16.   The United  States  argues that the Arbitrator should use a 0.00 % duty rate as the 
counterfactual for APP -China since the WA -WA duty rate on record for APP -China is de minimis , 
[[***]]%. The United  States  also argues that the separate duty rate should be set to 0.00% since 
this duty rate was based solely on the individ ual duty rate calculated for APP -China using the 
WTO-inconsistent WA -T methodology with zeroing.73 China submits that the reduction of the anti -
dumping duty rate to 0.00% is not the same as withdrawal of the anti -dumping duty because, under 
the United  States' retroactive anti -dumping system, anti -dumping orders are subject to annual 
administrative reviews during which the duty rates may change.74 In China's view, the United  States ' 
proposed counterfactual ignores the chilling effect on trade of ma intaining an anti -dumping order in 
place under the United  States ' retroactive anti -dumping system.75 China , however, recognizes that 
there is insufficient information to estimate the magnitude of this chilling effect.76 
5.17.   As explained above, the  counterfactual  must reflect what would have happened if the USDOC 
had ceased using  the WTO -inconsistent WA -T methodology with zeroing  in calculating the dumping 
                                                
71 See Panel Report, US – Anti-Dumping Methodologies (China) , paras.  7.5-7.8. See also United  States ' 
written submission, para. 104.  
72 United  States ' written submission, para. 104.  
73 United  States ' written submission, paras.  104-105. 
74 China's written submission, para. 198.  
75 China's response to Arbitrator question No. 6(b), para. 42, and No. 6(c), para. 46.  
76 China's response to Arbitrator question No. 58, paras.  32-33. WT/DS471/ARB  
 
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  margin for APP -China by the expiry of the reasonable period of time. Given the factual circumstances 
describe d in paragraph 5.15, we consider it reasonable to assume that, had the USDOC not used 
the WA -T methodology with zeroing in calculating the dumping margin for APP -China, it would have 
used the de minimis WA-WA dumping margin of [[ ***]]% to determine a 0.00% individual duty 
rate for APP -China and to determine a 0.00% separate duty rate for the Chinese exporters that 
passed the Separate Rate Test but were not chosen for i ndividual examination.77 
5.18.   In particular, we note that the de minimis WA-WA dumping margin of [[ ***]]% was calculated 
for APP -China by the USDOC in the relevant anti -dumping proceedings and forms part of the record 
in Coated  Paper . We also recall that the ori ginal panel's findings of violation concerned only the 
USDOC's use of the WA -T methodology with zeroing, which was used in calculating the individual 
duty rate for APP -China and the separate duty rate. The original panel's findings of violation did not 
concern the USDOC's use of the WA -WA methodology, nor has China taken issue with the de minimis 
WA-WA dumping margin of [[ ***]]% in these arbitration proceedings or suggested that the figures 
provided by the United  States are not credible.  
5.19.   With respect to the  alleged chilling effect of a 0.00% duty rate, we recall that our task in 
these arbitration proceedings is economic in nature, and concerns the estimation  of the level of 
nullification or impairment caused by the United  States ' failure to comply with the D SB 
recommendations and rulings. This determination must be based on credible, factual, and verifiable 
information, not speculation or claims that cannot be meaningfully quantified. China itself recognizes 
that there is insufficient information to estimate the magnitude of the alleged chilling effect78, and 
explains that this should not prevent the use of a 0.00% duty rate as the counterfactual.79 In light 
of this, we do not consider that the alleged chilling effect renders a 0.00% duty rate an unreasonable 
or implausible counterfactual.  
5.20.   For these reasons, we consider that the use of a 0.00% duty rate as the counterfactual for 
APP-China's individual duty rate and the separate duty rate in Coated Paper  reflects a reasonable 
and plausible compliance scenario.  
5.2.1.2   OCTG 
5.21.   In the original investigation in  OCTG , the USDOC determined that the Chinese exporter TPCO 
had engaged in targeted dumping and calculated two dumping margins for this exporter. The first 
dumping margin was [[ ***]]% and was calculated using the WA -WA meth odology. The second 
dumping margin was 32.07% and was calculated using the exceptional WA -T methodology. The 
USDOC applied the WA -T methodology with zeroing to all of TPCO's export transactions. Since the 
WA-T dumping margin was higher than the WA -WA dumpi ng margin, the USDOC determined that 
the WA -WA dumping margin would conceal TPCO's targeted dumping, and therefore used the WA -T 
dumping margin to determine TPCO's individual duty rate.80 The USDOC also used the WA -T duty 
rate calculated for TPCO as the separate duty rate assigned to the Chinese exporters that passed 
the Separate Rate Test but were not chosen for individual examination.81 
5.22.   The United  States  argues that there is no need to us e a counterfactual and that the level of 
nullification or impairment is zero, because the individual duty rate calculated for TPCO using the 
WTO-inconsistent WA -T methodology with zeroing is 32.07% whereas the duty rate on record for 
TPCO calculated using the WA -WA methodology is [[ ***]]%. In light of the difference being less 
than [[***]]% points, the United  States  argues that it is reasonable to assume that the impact on 
trade levels would be minimal.82 China does not explicitly address the United  States ' arguments 
concerning the USDOC's use of the WA -T methodology with zeroing in OCTG .83 
                                                
77 A similar approach was followed in a previous arbitration pursua nt to Article  22.6 of the DSU. (See 
Decision by the Arbitrator, US – Washing Machines (Article  22.6 – US), paras.  3.25-3.33).  
78 China's response to Arbitrator question No. 58, paras.  32-33. 
79 China's comments on the United  States' response to Arbitrator qu estion No. 51, paras.  2-3. 
80 See Panel Report, US – Anti-Dumping Methodologies (China) , paras.  7.5-7.8. See also United  States ' 
written submission, para. 108.  
81 United  States ' written submission, para. 108.  
82 United  States ' written submission, paras.  108-109; and response to Arbitrator question No. 11(a), 
para. 35.  
83 See China's written submission, para. 193.  WT/DS471/ARB  
 
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  5.23.   As explained above, the  counterfactual must reflect what would have happened if , by the 
expiry of the reasonable period of time,  the USDOC had ceased using the WTO -inconsis tent WA -T 
methodology with zeroing  in calculating the dumping margin for TPCO. Given the factual 
circumstances described in paragraph 5.21 above, we consider it reas onable to assume that, had 
the USDOC not used the WA -T methodology with zeroing in calculating the dumping margin for 
TPCO, it would have used the WA -WA dumping margin of [[ ***]]% to determine the individual duty 
rate assigned to this exporter and to deter mine the separate duty rate assigned to the Chinese 
exporters that passed the Separate Rate Test but were not chosen for individual examination.84 
5.24.   In particular, we note that the WA -WA dumping margin of [[ ***]]% was calculated for TPCO 
by the USDOC in the r elevant anti -dumping proceedings and forms part of the record in OCTG . We 
also recall that the original panel's findings of violation concerned only the USDOC's use of the WA -
T methodology with zeroing, which was used in calculating the individual duty rat e for TPCO and the 
separate duty rate. The original panel's findings of violation did not concern the USDOC's use of the 
WA-WA methodology, nor has China taken issue with the WA -WA duty rate in these arbitration 
proceedings or suggested that the figures pr ovided by the United  States are not based on credible 
or factual information.  
5.25.   We see no basis, in the DSU or elsewhere, for setting the level of nullification or impairment 
to zero solely because the difference between the actual duty rate and the counterf actual duty rate 
is small, and the impact on trade may accordingly prove small. In support of its view, the 
United  States refers to the decision by the arbitrator in  US – 1916 Act (EC) (Article  22.6 – US), and 
argues that it is reasonable to assume that there is no nullification or impairment where "the impact 
would be so small that it cannot be 'meaningfully quantified'."85 We note that  the arbitrator in  
US – 1916 Act (EC) (Article  22.6 – US) followed an approach under which it did not accept claims 
that were "'too remote ', 'too speculative ', or 'not meaningfully quantified '"86, and on this basis did 
not include undisclosed settlement awards in its estimation  of the level of nullification or 
impairment.87 In these proceedings, the United  States  has not pointed to any comparable 
circumstances, which would cause  us to speculate or to include claims that cannot meaningfully be 
quantified.88 To the contrary, the relevant figures form part of the official record in OCTG . 
5.26.   For these reasons, we consider that the  use of a [[ ***]]% duty rate as the counterfactual for 
TPCO's individual duty rate and the separate duty rate in OCTG  reflects a reasonable and plausible 
compliance scenario.  
5.2.1.3   Steel Cylinders  
5.27.   In the Steel Cylinders  original investigation , the USDOC determined that the  Chinese  exporter 
BTIC had engaged in targeted dumping and assigned this exporter an individual duty rate of 6.62% 
calculated using the WA -T methodology with zeroing.89 The USDOC also used the WA -T duty rate of 
6.62% as the separate duty rate assigned to the Chinese exporters that passed the Separate Rate 
Test but were not chosen for individual examination.90 The USDOC revoked the duty rate for BTIC 
                                                
84 A similar approach was followed in a previous arbitration pursuant to Article  22.6 of the DSU. (See 
Decision by the Arbitrator, US – Washing Machine s (Article  22.6 – US), paras.  3.25-3.33).  
85 United  States ' response to Arbitrator question No.11(a), para. 35 (quoting Decision by the Arbitrator, 
US – 1916 Act (EC) (Article  22.6 – US), para. 6.10).  
86 Decision by the Arbitrator, US – 1916 Act (EC) (Articl e 22.6 – US), para. 5.57.  
87 Decision by the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), para. 6.10.  
88 Although the United  States  argues that there are not sufficient levels of imports from China to use its 
first proposed calculation methodology, the Armington model, to estimate the level of nullification or 
impairment concerning the USDOC's use of the WA -T methodology with zeroing in OCTG , the United  States  
does not explain why it cannot estimate the level of nullification or impairment using its second proposed 
calculation methodology, the formula -based approach, or another calculation methodology. The United  States  
initially expla ined that it did not have data on TPCO's market share prior to the imposition of the anti -dumping 
order but has subsequently provided such data for all individual Chinese exporters subject to all of the anti -
dumping orders at issue. (United  States ' written  submission, para. 109; response to Arbitrator question No. 
11(b), para.  37; and Excel File with Import Data in the Year Preceding the Imposition of Anti -Dumping Duties , 
(Exhibit USA -94 (BCI))).  
89 See Panel Report, US – Anti-Dumping Methodologies (China) , paras.  7.5-7.8. See also United  States ' 
response to Arbitrator question No. 7, para. 33.  
90 United  States ' response to Arbitrator question No. 7, para. 33.  WT/DS471/ARB  
 
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  on 27  August  201791, but continues to assign the duty rate calculated for BTIC using the WA -T 
methodology with zeroing as the separate duty rate.92 
5.28.   The United  States  argues that there is no need to use a counterfactual and that the level of 
nullification or impairment is zero, because the individual duty rate for BTIC was revoked prior to 
the expir y of the reasonable period of time.93 Although the separate duty rate continues to be based 
solely on the duty rate previously calculated for BTIC using the WTO -inconsistent WA -T methodology 
with zeroing, the United  States  argues that there is no nullificat ion or impairment because China did 
not challenge the separate duty rate in the original proceedings.94 China does not object to the 
United  States ' view that there is no nullification or impairment with respect to BTIC.95 However, 
China argues that the Arbit rator should calculate the level of nullification or impairment caused by 
the USDOC's continued use of BTIC's WA -T duty rate of 6.62% as the separate duty rate, by using 
a counterfactual duty rate of 0.00%.96 
5.29.   It is undisputed that the duty rate calculated f or BTIC using the WTO -inconsistent WA -T 
methodology with zeroing was revoked prior to the expiry of the reasonable period of time. We 
therefore agree with the view , expressed by both parties, that there is no nullification or impairment 
with respect to BTIC. We note, however, that the USDOC continues to assign the duty rate calculated 
for BTIC using the WTO-inconsistent WA-T methodology with zeroing as the separate duty rate. 
While the United  States  is correct that China, in the original proceedings, did no t challenge the 
USDOC's determination regarding the separate duty rate, our task is economic in nature and requires 
us to estimate  the level of nullification or impairment caused by the U SDOC's use of the WA -T 
methodology with zeroing in Steel Cylinders . Since the WA -T duty rate of 6.62% was assigned not 
only as the individual duty rate for BTIC but also as the separate duty rate, we consider it reasonable 
to assume that, had the USDOC  ceased using the WA -T methodology with zeroing in calculating the 
indivi dual duty rate  for BTIC, it would also not have assigned that duty rate as the separate duty 
rate in Steel Cylinders . 
5.30.   Neither party has pointed to alternative figures from the record of Steel Cylinders  that could 
be used as the counterfactual for the separate duty rate. In light of this, we cannot speculate on 
how the USDOC would have calculated the separate duty rate, had the USDOC not used the duty 
rate calculated for BTIC using the WTO-inconsistent WA-T methodology with zeroing as the separate 
duty rate. W e therefore consider that a duty rate of 0.00% is a reasonable proxy for what the 
separate duty rate would have been, had the USDOC  ceased using  the WA -T duty rate of 6.62% as 
the separate duty rate  by the expiry of the reasonable period of time . Indeed, the  United  States  
itself follows this approach in setting out its proposed counterfactual for the USDOC's use of the 
WA-T methodology with zeroing in Coated Paper . For this anti -dumping order, the Unit ed States 
acknowledges that a duty rate of 0.00% should be used as the counterfactual for both APP -China's 
individual duty rate and for the separate duty rate.97 When asked to explain the difference between 
its approach in Coated Paper  and in Steel Cylinder s, the United  States  suggests  that the  separate 
duty rate in Steel Cylinders  should be modified "in a manner consistent with the separate duty rate 
the United  States  used in Coated Paper " and that it "uses a duty rate of zero".98 
5.31.   For these reasons, we consi der that the use of a 0.00% duty rate as the counterfactual for 
the separate duty rate in Steel Cylinders  reflects a reasonable and plausible compliance scenario.  
5.2.1.4   PET Film  
5.32.   In the third administrative review in PET Film , the USDOC determined that the Chinese 
exporter DuPont Group had engaged in targeted dumping and assigned this exporter an individual 
                                                
91 United  States  written submission, para. 102 (referring to High Pressure Steel Cylinders From the 
People's Republic of China : Notice of Court Decision Not in Harmony With Final Determination in Less Than Fair 
Value Investigation, Notice of Amended Final Determination Pursuant to Court Decision, Notice of Revocation of 
Antidumping Duty Order in Part, and Discontinuation of Fifth Antidumping Duty Administrative Review, 82 Fed. 
Reg. 46,758 (6  October  2017) (Exhibit USA -7)). 
92 United  States ' response to Arbitrator question No. 7, para. 33.  
93 United  States ' written submission, para. 102.  
94 United  States ' respo nse to Arbitrator question No. 7, paras.  33-34. 
95 China's response to Arbitrator question No. 60(a), para. 34.  
96 China's response to Arbitrator question No. 60(b), para. 35.  
97 United  States ' written submission, para. 105.  
98 United  States ' response to Arbitrator question No. 59, para. 45.  WT/DS471/ARB  
 
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  duty rate of 3.49% calculated using the WTO-inconsistent WA-T methodology with zeroing.99 The 
USDOC also used the WA -T duty rate of 3.49% as the separate duty rate assigned to the Chinese 
exporters that passed the Separate Rate Test but were not chosen for individual examination.100 In 
the fourth administrative review, published on 2  July 2014, the USDOC did not choose the DuPont 
Group for individual examination and, thus, did not calculate an individual duty rate for the DuPont 
Group through either the WA -WA methodology or the WA -T methodology with zeroing. Rather, the 
DuPont Group was assigned the separate duty rate of 31.24% based on the duty rates calculated 
for two individually examined exporters, neither of which were calculated using the WA -T 
methodology with zeroing.101 
5.33.   The United  States  argues that there is no need to use a counterfactual a nd that the level of 
nullification or impairment is zero, because the individual duty rate that had been calculated for the 
DuPont Group through the WA -T methodology with zeroing was, prior to the expiry of the reasonable 
period of time, replaced by the se parate duty rate that had been calculated in a WTO -consistent 
manner. China submits that, under the United  States' retroactive anti -dumping system, the DuPont 
Group's duty rate could be subject to administrative reviews in future years. Since the United  States 
has not taken steps to implement the DSB recommendations and rulings concerning the USDOC's 
use of the WA -T methodology with zeroing, the USDOC could recalculate the DuPont Group's duty 
rate using this methodology in future proceedings.102 
5.34.   In our view, by replacing the DuPont Group's individual duty rate with a duty rate that was 
not calculated using the WTO-inconsistent WA-T methodology with zeroing, the USDOC has 
withdrawn its use of that methodology in calculating the individual duty rate for the Du Pont Group. 
China is right in arguing that the USDOC might calculate duty rates for the DuPont Group in future 
administrative reviews, using the WA -T methodology with zeroing. However, we recall that China's 
claims and the panel's findings in the original pr oceedings concerned only the USDOC's use of the 
WA-T methodology with zeroing "as applied" in the third administrative review in PET Film .103 They 
did not concern the USDOC's potential future use of this methodology in subsequent administrative 
reviews. Our mandate is, as mentioned above, to determine the level of nullification or impairment  
by comparing  the existing level of trade for China under the WTO -inconsistent measure with the 
expected level of trade for China, had the United  States  brought its WTO -inconsistent measure into 
conformity b y the expiry of the reasonable period of time.  In PET Film , the United  States  ceased its 
use of the WTO -inconsistent WA -T methodology with zeroing prior to the expiry of the reasonable 
period of time, and we therefore ha ve no basis for estimating  any level of nullification or impairment 
with respect to the USDOC's use of the WA -T methodology in this anti -dumping order. In our view, 
it would be too speculative to consider the possibility that the USDOC might reintroduce it s use of 
the WA -T methodology with zeroing in calculating the duty rate for the Du Pont Group during future 
administrative reviews.  
5.35.   For these reasons, we consider that there is no nullification or impairment caused by the 
USDOC's use of the WTO -inconsistent  WA-T methodology in PET Film . 
5.2.2   Counterfactual for the USDOC's use of the WTO -inconsistent Single Rate 
Presumption  
5.2.2.1   Assessment by the Arbitrator  
5.36.   As mentioned above, the original panel's findings of violation concerning the USDOC's use of 
the WTO-inconsistent  Single Rate Presumption cover all of the 25 anti -dumping orders at issue, 
including the four anti -dumping orders covered by the USDOC's use of the WTO-inconsistent WA-T 
methodology with zeroing. More particularly, in the proceedings resulting in the 25 an ti-dumping 
orders at issue, the USDOC presumed that all Chinese exporters comprised a single PRC -wide entity 
                                                
99 See Panel Report, US – Anti-Dumping Methodologies (China) , paras.  7.5-7.8. See also United  States ' 
written submission, para. 103; and response to Arbitrator question No. 7, para. 30.  
100 United  States ' response to Arbi trator question No. 7, para. 30.  
101 United  States ' response to Arbitrator question No. 7, para. 31.  
102 China's response to Arbitrator question No. 9, paras.  50-52. 
103 See Panel Report, US – Anti-Dumping Methodologies (China) , paras.  3.1.b, 7.239, and 8.1.b.  WT/DS471/ARB  
 
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  and assigned these exporters a single PRC -wide duty rate unless they overcame the Single Rate 
Presumption by passing the Separate Rate Test.104 
5.37.   The U nited States  argues that, for  the purpose of determining the correct counterfactual, the 
Chinese exporters within the PRC -wide entity should be divided into two groups: exporters "for which 
there is evidence that they failed to cooperate" and exporters "fo r which there is no evidence that 
they failed to cooperate".105 For the first group of exporters, the United  States  argues that there is 
no need to use a counterfactual, because these exporters' failure to cooperate renders it reasonable 
to continue assignin g them the PRC -wide duty rate, which is calculated on the basis of adverse facts 
available.106 For the second group of exporters, the United  States  proposes to use the separate duty 
rates on record as the counterfactual.107 In the United  States ' view, the orig inal panel's findings of 
violation concerning the use of the Single Rate Presumption would not necessarily require the USDOC 
to individually examine each exporter within the PRC -wide entity. Rather, they would allow the 
USDOC to limit its examination under  Article  6.10 of the Anti -Dumping Agreement and assign these 
exporters the separate duty rate, assigned to other Chinese exporters that had initially passed the 
Separate Rate Test but where not chosen for individual examination.108 
5.38.   China objects to the United  States ' proposal to continue assigning the PRC -wide duty rate to 
exporters within the PRC -wide entity for which there is evidence that they failed to cooperate. In 
this regard, China distinguishes between exporters that believed that they provided a ll necessary 
information to the USDOC and exporters that did not. For the former, China argues that the use of 
a duty rate based on facts available is WTO -inconsistent. For the latter, China recognizes that facts 
available could be used but argues that the se should have been "neutral", not "adverse", facts 
available.109 China also objects to the United  States' proposal to use the separate duty rates  on 
record  as the counterfactual for exporters within the PRC -wide entity for which there is no evidence 
that th ey failed to cooperate. In this regard, China argues that the United  States ' proposed 
counterfactual assumes that the separate duty rates on record are WTO -consistent which, in China's 
view, is not the case. In this regard, China lists a "range of likely W TO-inconsistencies"110, namely 
the USDOC's improper use of adverse facts available111; the USDOC's improper use of "double -
counting" duties from anti -dumping and countervailing duty investigations112; and the USDOC's 
improper use of differential pricing as well as the WA -T methodology with zeroing.113 
5.39.   The parties' arguments raise the issue of whether we, in our role as an arbitrator acting 
pursuant to Article  22.6 of the DSU, can take into account  the proposed counterfactual's consistency 
with WTO obligations other  than those that formed the basis of the original panel's findings of 
violation. The parties have expressed opposing views on this issue. The United  States is of the view 
that an examination of the "likely" WTO inconsistency of its proposed counterfactual would go 
                                                
104 See e.g. Panel Report, US – Anti-Dumping Methodologies (China) , para. 7.311.  
105 United  States ' written submission, para. 40.  
106 United  States ' written submission, paras.  40-41; and response to Arbitrator question No. 55(d), 
para. 41. Although, in se tting out its counterfactual, the United  States  generally distinguishes between 
exporters based on their cooperation, it only relies on that distinction when applying its proposed calculation 
methodologies to five anti -dumping orders, namely Furniture ; OCTG; OTR Tires ; Solar Cells ; and Wood 
Flooring . For the remaining 20  anti-dumping orders, the United  States  does not rely on the distinction between 
non-cooperating and cooperating exporters in applying its calculation methodologies, due to lack of data. 
Instead, the United  States estimates the level of nullification or impairment based on a counterfactual scenario 
where all exporters within the PRC -wide entity, regardless of whether they cooperated or not, are assigned the 
separate duty rate instead of the P RC-wide duty rate. The United  States  argues that, in doing so, it is 
overestimating the level of nullification or impairment. (United  States ' written submission, paras.  93-96; and 
responses to Arbitrator question No. 3(a), para. 3, and No. 55(a), para. 27) . 
107 United  States ' written submission, paras.  40-41. For three anti -dumping orders, namely Iron Pipe 
Fittings ; Steel Flat Products ; and Residential Washers , there is no separate duty rate on record and the 
United  States  therefore proposes to use a proxy of  0.00% as the counterfactual duty rate for the exporters 
within the PRC -wide entity for which there is no evidence that they failed to cooperate. (United  States' written 
submission, para.  76; and response to Arbitrator question No. 51, para. 5). For two an ti-dumping orders, 
namely Diamond Sawblades and Steel Products , the separate duty rate on record is the same as the PCR -wide 
duty rate, and the United  States therefore argues that there is no nullification or impairment. (United  States ' 
written submission,  paras.  57-59). 
108 United  States ' response to Arbitrator question No. 3(b)(i), paras.  4 and 9.  
109 China's response to Arbitrator question No. 56, paras.  26-29. 
110 China's written submission, paras.  217-218. 
111 China's written submission, paras.  220-228. 
112 China's written submission, paras.  229-230. 
113 China's written submission, paras.  231-234. WT/DS471/ARB  
 
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  beyond the DSB recommendations and rulings and thus beyond the mandate under Article  22.6 of 
the DSU.114 China, on the other hand, argues that the DSU makes it clear that a determination of 
the level of nullification or impairment under Article  22.6 of the DSU must be measured against a 
WTO-consistent benchmark. While China agrees that an arbitrator cannot make "formal" findings of 
WTO inconsistency, it argues that an arbitrator has the authority to consider the likely WTO 
consistency of a proposed c ounterfactual as a part of its determination of whether that counterfactual 
is reasonable.115 
5.40.   We recall that there is a difference between, on the one hand, assessing the WTO consistency 
of a measure or a measure taken to comply with the DSB recommendations and rulings, and, on the 
other hand, assessing whether a proposed counterfactual represents a reasonable or plausible 
compliance scenario. We agree with the view expressed by both parties that  it is not for us to make 
findings of WTO  inconsistency with res pect to a measure or a measure taken to comply with the DSB 
recommendations and rulings. This is the mandate of a panel acting pursuant to Article  11 of the 
DSU or a compliance panel acting pursuant to Article  21.5 of the DSU. Our mandate is to assess  a 
hypothetical counterfactual and determin e whether this counterfactual reflects at least a reasonable 
or plausible compliance scenario. In our view, it would be  incongruous  to assess whether a 
counterfactual reflects a reasonable or plausible compliance scena rio without considering  that 
counterfactual's WTO consistency. In this regard, we recall that compliance requires full consistency 
with WTO obligations, not just those forming part of the original proceedings.116 In considering 
whether the United  States ' proposed counterfactual reflects a reasonable or plausible compliance 
scenario, we will therefore take into account that counterfactual's WTO consistency with the covered 
agreements.117 We will not limit this assessment to the provisions that were found to have  been 
violated in the original proceedings. We see no basis for distinguishing, in fulfilling our mandate to 
determine a reasonable or plausible  compliance scenario, between WTO obligations  that were found 
to have been violated in the original proceedings and other WTO obligations . In our view, this 
distinction is  arbitrary as it would compel an arbitrator to accept a proposed counterfactual without 
any regard to its inconsistency with other relevant WTO obligations.  Such an approach would, in our 
view,  fall short of fulfilling an arbitrator's mandate under Article  22.6, and would diminish the 
effectiveness of the WTO  dispute settlement system . With this in mind, we now turn to our 
assessment of the particular elements of the counterfactual that the United  States  proposes . 
5.41.   First, we address the United  States ' proposal to divide the Chinese exporters within the 
PRC-wide entity into groups based on their cooperation, and to continue assigning the PRC -wide 
duty rate to exporters "for which there is evidence that they failed to cooperate". The United  States  
argues that these exporters' failure to cooperate entails that they  could have been assigned a duty 
rate based on adverse facts available even if they were not part of the PRC -wide entity.118 In this 
regard, we recall that Article  6.8 of the Anti -Dumping Agreement permits an investigating authority 
to base its determination s on facts available where an interested party "refuses access to, or 
otherwise does not provide, necessary information within a reasonable period or significantly 
impedes the investigation". In using facts available, an investigating authority must comply  with the 
provisions of Annex II, which provides for a process aimed at ensuring the use of the best facts 
available. In this regard, we recall that, while an interested party's failure to cooperate could lead 
to a result that is less favourable to the par ty than if it had cooperated, cooperation is "a process, 
involving  joint effort" by the relevant party and the investigating authority and "the fact of 
'cooperating'  is in itself not determinative of the end result of the cooperation ".119 
5.42.   Despite arguing tha t there are exporters within the PRC -wide entity for which there is evidence 
that they failed to cooperate, the United  States  explains that the USDOC did not make a 
determination that any individual exporter within the PRC -wide entity failed to cooperate w ithin the 
meaning of Article  6.8 and Annex II. Although the United  States  distinguishes, in these proceedings, 
between exporters within the PRC -wide entity based on their cooperation, it acknowledges that the 
USDOC made no such distinction in the actual in vestigations and administrative reviews underlying  
                                                
114 United  States ' response to Arbitrator question No. 54(b), paras.  13-14. 
115 China's response to Arbitrator question No. 54(a), paras.  11-15. 
116 See Appellate Body Report, EC – Bed Linen (Article  21.5 – India) , para. 79. See also Appellate Body 
Reports, Canada – Continued Suspension , para. 305; and US – Continued Suspension , para. 305. 
117 Previous arbitrators have also considered counterfactuals that were WTO -consistent. (See Decisions 
by the Arbitrator s, EC – Bananas III (Ecuador) (Article  22.6 – EC), para. 166; and EC – Bananas III (US) 
(Article  22.6 – EC), para. 7.1).  
118 United  States' written submission, para. 40  and fn 35 . 
119 Appellate Body Report, US – Hot-Rolled Steel , para. 99.  WT/DS471/ARB  
 
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  the anti -dumping orders at issue. More particularly, the USDOC did not make determinations of 
non-cooperation that were "specific" to individual exporters within the PRC -wide entity120, but rather 
determined  that the PRC -wide entity "as an entity" failed to cooperate.121 
5.43.   The gist of the original panel's findings of violation concerning the Single Rate Presumption is 
that the USDOC acted inconsistently with its WTO obligations in treating multiple exporters as a  
single PRC -wide entity  and assigning these exporters a single PRC -wide duty rate on the basis of a 
presumption rather than an affirmative determination that these exporters were in such a 
relationship that they could be treated as a single entity .122 No evi dence has been submitted 
indicating that the USDOC subsequently made any such affirmative determination for all or some of 
the exporters within the PRC -wide entity. Considering  this, we have difficulty understanding how the 
USDOC's determination of non -cooperation by the PRC -wide entity "as an entity" could serve as a 
basis to assign individual exporters within the PRC -wide entity a duty rate based on adverse facts 
available. In our view, assigning the PRC -wide duty rate to the group of exporters for which there is 
evidence that they failed to cooperate would perpetuate the treatment of multiple exporters as a 
PRC-wide entity,  albeit  one with fewer exporters in it. In the absence of an affirmative determination 
concerning their relationship, s uch monolithic treatment of a group of exporters would, in our view, 
contravene the original panel's findings of violation concerning the Single Rate Presumption. 
Therefore, considering that the USDOC did not determine  that any of the individual exporters with in 
the PRC -wide entity failed to cooperate, we believe it would be too speculative to assume that the 
USDOC could continue assigning individual exporters within the PRC -wide entity the PRC -wide duty 
rate. 
5.44.   Furthermore, we recall that, where an interested pa rty does not provide necessary information 
and the investigating authority decides to make its determination on the basis of facts available, it 
must follow the process set out in Annex  II in order to ensure that it uses the best facts available. 
When aske d whether the USDOC followed the process set out in Annex II for the exporters within 
the PRC -wide entity for which there is evidence that they failed to cooperate, the United  States 
reiterates its explanation that the USDOC did not make findings of non -cooperation that were specific 
                                                
120 United  States ' response to Arbitrator question No. 55(b) , para. 33. 
121 United  States ' response to Arbitrator question No. 4, para. 15. The United  States  explains that the 
USDOC's determinations of non -cooperation in some instances "identif[ied] by name certain companies in the 
China -government entity that did not cooperate", and in other instances were "more general, focusing on the 
type of non -cooperativ e behavior". (United  States ' response to Arbitrator question No. 4, para. 16). The 
United  States provides one example to demonstrate how it identifies non -cooperating exporters where the 
USDOC's determination of non -cooperation was "more general": For OTR Tires, the United  States  submits that 
90 exporters received a quantity and value (Q&V) questionnaire, but only 14 exporters provided responses to 
this questionnaire whereas 76 exporters did not. On this basis, the United  States  argues that there is evidenc e 
that 84.4% of the exporters in the PRC -wide entity failed to cooperate and that 84.4% of the PRC -wide entity's 
imports should continue to be subject to the PRC -wide duty rate of 105.31%. (See United  States ' response to 
Arbitrator question No. 55(a), para s. 30-32; US Federal Register Notices Regarding Preliminary Determinations 
in Anti -Dumping Duty Investigations , (Exhibit USA -51), pp.  9278-9279; Information on Response Rate to 
USDOC Q&V Questionnaire in Anti -Dumping Duty Investigations , (Exhibit USA -55), p. 1; and Table of Relevant 
Anti-Dumping Duty Rates , (Exhibit USA -5), p.  1). We note that there are certain issues with this approach. 
More particularly, when examining the record of OTR Tires , it appears that 94 exporters received a Q&V 
questionnaire and that 30 exporters responded. The United  States  itself quotes these figures but uses other 
figures to determine the percentage of non -cooperating exporters without further explanation. (United  States' 
response to Arbitrator question No.  55(a), para. 31 (quo ting US Federal Register Notices Regarding Preliminary 
Determinations in Anti -Dumping Duty Investigations , (Exhibit USA -51), pp.  9278-9279)). Moreover, and as 
pointed out by China, in calculating the percentage of non -cooperating exporters, the United  States does not 
identify any specific individual exporters and their volume or share of imports. (China's comments on the 
United  States ' response to Arbitrator question  No. 55(a), paras.  23-27). Rather, the United  States  calculates 
the share of non-cooperating exporters based on an assumption that all exporters within the PRC -wide entity 
account for exactly the same, average share of imports, without providing any explanation regarding the 
reasonableness of this assumption.  
122 We recall that, in t he original proceedings, China presented claims, among others, under Article  6.8 
and Annex II of the Anti -Dumping Agreement, challenging the USDOC's use of adverse facts available in 
determining the PRC -wide duty rate. The original panel applied judicial e conomy to those claims. In doing so, 
the original panel emphasized that China's claims concerned the USDOC's use of adverse facts available in 
determining the PRC -wide entity's duty rate, and that therefore it would not be appropriate for the panel to 
make  findings concerning the use of adverse facts available for individual exporters within the PRC -wide entity. 
(Panel Report, US – Anti-Dumping Methodologies (China) , paras.  7.494 -7.495). Hence, even if the original 
panel had made findings on China's claims under Article  6.8 and Annex II of the Anti -Dumping Agreement, 
such findings would not have been relevant to our assessment of the reasonableness or plausibility of the 
counterfactuals proposed in these proceedings.  WT/DS471/ARB  
 
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  to individual exporters within the PRC -wide entity.123 To us, this suggests that the USDOC did not 
follow the Annex II process in order to determine which facts available to use in calculating duty 
rates for the individual export ers within the PRC -wide entity for which there is evidence that they 
failed to cooperate. This further supports our view that it would be too speculative to assume that 
the USDOC could have continued assigning individual exporters within the PRC -entity the  PRC-wide 
duty rate, which was calculated on the basis of facts available chosen for that entity.  
5.45.   Considering that the USDOC did not make findings of non -cooperation nor follow the process 
under Article  6.8 and Annex II for individual exporters within the PRC-wide entity, we do not consider 
that the continued  use of the PRC -wide duty rate reflects a reasonable or plausible compliance 
scenario for any of the individual exporters within the PRC -wide entity . Instead, we will determine 
an appropriate counterfac tual for all exporters within the PRC -wide entity.  
5.46.   Having rejected the United  States ' proposal to divide the Chinese exporters within the 
PRC-wide entity into groups based on their cooperation, we next have to determine an appropriate 
counterfactual for al l exporters within the PRC -wide entity. That is, what duty rate would have been 
assigned to the exporters within the PRC -wide entity, had the USDOC ceased using the Single Rate 
Presumption by the expiry of the reasonable period of time, and thus not includ ed these exporters 
in the PRC -wide entity and assigned them the PRC -wide duty rate ? We recall that, in its proposed 
counterfactual, the United  States  suggests using the separate duty rates on the record of the anti -
dumping orders at issue.  
5.47.   Article  6.10 of the Anti -Dumping Agreement requires an investigating  authority to determine, 
as a rule, individual duty rates for all exporters, but permits limited examination of selected exporters 
where the number of exporters is so large that individual examination of each exporter would be 
"impracticable".124 If, however, an exporter has provided the necessary information in time, the 
investigating authority must calculate an individual duty rate, unless the number of exporters is so 
large that individual examination wou ld be "unduly burdensome" and prevent the "timely 
completion" of the investigation.125 That is, even in cases where the investigating authority limits its 
examination, it must nevertheless calculate individual duty rates for exporters that so request, 
unless  doing so would be unduly burdensome and prevent the timely completion of the investigation.  
5.48.   The United  States  explains that the USDOC limited its examination in the proceedings 
resulting in the anti -dumping orders at issue, and assigned the separate duty rate to exporters that 
passed the Separate Rate Test but were not chosen for individual examination.126 The United  States  
submits that it would also be reasonable to use the separate duty rates on record as the 
counterfactual duty rate s for the exporters wit hin the PRC -wide entity.127 We recall that, under the 
Single Rate Presumption, the USDOC treats all exporters that did not pass the Separate Rate Test 
as a single PRC -wide entity and assigns them a single PRC -wide duty rate. In doing so, the USDOC 
does not p rovide these exporters with the opportunity to request individually  calculated duty rates 
despite the USDOC's decision to limit its examination  with regard to exporters that pass the Separate 
Rate Test.  
5.49.   We consider the United  States' proposed counterfactual too speculative because it assumes 
that the exporters within the PRC -wide entity would necessarily be subject to the separate duty rate 
on record, had the USDOC ceased treating them as a single PRC -wide entity under the Single Rate 
Presumpti on. This approach ignores the fact that Article  6.10.2 of the Anti -Dumping Agreement 
provides the exporters that are not initially selected for individual examination with the right to 
request individual examination, and requires the investigating authorit y to conduct such an individual 
examination unless the authority finds that it would be unduly burdensome and prevent the timely 
completion of the investigation. In light of this provision, it would not be reasonable to assume that 
none of the exporters wi thin the PRC -wide entity would  have request ed such an individual 
examination or that the USDOC would have been permitted to reject all of them by reason of the 
burdensome impact on the investigation. We also note that, in certain  of the  anti-dumping 
                                                
123 United  States ' response to Arbitrator q uestion No. 55(b), paras.  33-35. 
124 Article  6.10 of the Anti -Dumping Agreement.  
125 Article  6.10.2 of the Anti -Dumping Agreement.  
126 As mentioned in fn 107 above, there is no separate duty rate on the record of three anti -dumping 
orders, namely Iron Pipe Fittings ; Residential Washers ; and Steel Flat Products , and the United  States  
therefore propo ses to use a proxy of 0.00% as the counterfactual duty rate. (United  States ' written 
submission, para.  76; and response to Arbitrator question No. 51, paras.  3-7). 
127 United  States ' response to Arbitrator question No. 3(b)(i), paras.  4-5 and 8 -9. WT/DS471/ARB  
 
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  procee dings at issue, the PRC -wide entity includes exporters that the USDOC initially chose for 
individual examination but subsequently included in the PRC -wide entity.128 It would not be 
reasonable to assume that the USDOC could have assigned the separate duty ra te to such exporters, 
which, initially, had been selected for individual examination. These considerations suggest that the 
use of the separate duty rates on record as the counterfactual for the exporters within the PRC -wide 
entity does not reflect a reaso nable or plausible compliance scenario.  
5.50.   We also recall that, where an investigating authority has limited its examination to selected 
exporters, Article  9.4 of the Anti -Dumping Agreement requires that the duty rate assigned to 
exporters that were not chose n for individual examination not exceed the weighted average of the 
individual duty rates calculated for selected exporters, disregarding any zero or de minimis  duty 
rates or duty rates based on facts available. We asked the United  States  to explain whethe r the 
separate duty rate in the United  States ' anti-dumping system corresponds to the duty rate set out 
in Article  9.4. We also asked the United  States to explain whether the USDOC took into account the 
provisions of Article  9.4 in calculating the separate  duty rates on the record of the anti -dumping 
orders at issue. The United  States  did not provide a clear answer to these questions but state d that 
"the USDOC generally calculates the separate duty rate based on the rates assigned to individually -
examined r espondents."129 The United  States acknowledges that the USDOC, in certain 
anti-dumping proceedings at issue, calculated the separate duty rates as an average of one or more 
individual duty rates based on adverse facts available.130 The United  States  also ackno wledges that 
the USDOC, in certain anti -dumping proceedings at issue, calculated the separate duty rates based 
on information provided by the domestic industry in the petition for initiation of an investigation, or 
based on duty rates calculated in prior a nti-dumping proceedings.131 These explanations show that 
what is called "the separate duty rate" in the United  States' anti -dumping system is not necessarily 
calculated pursuant to the provisions of Article  9.4 of the Anti -Dumping Agreement. In considering 
whether the use of the separate duty rates on record reflects a reasonable or plausible compliance 
scenario, we cannot disregard the fact that the United  States  itself does not purport that the USDOC 
calculate d the separate duty rate s pursuant to  the provis ions of Article  9.4.132 This further supports 
our view that the use of the separate duty rates on record as the counterfactual for the exporters 
within the PRC -wide entity does not reflect a reasonable or plausible compliance scenario.  
5.51.   When asked whether the re are alternative duty rates, other than the separate duty rates, 
which could serve as a reasonable or plausible counterfactual for the exporters within the PRC-wide 
entity, the United  States  generally submits that there are no such alternatives.133 China a rgues that 
it would be reasonable to use  either withdrawal of the anti -dumping order, a 0.00% duty rate, or 
"the lowest dumping margin that at least has some basis in the record of each proceeding, but the 
parties agree is reasonable."134 China provides a li st of potential alternative duty rates, which are 
based on individual duty rates calculated for selected exporters  during different time periods, 
                                                
128 See Pane l Report, US – Anti-Dumping Methodologies (China) , para. 7.503.  
129 United  States ' response to Arbitrator question No. 52, para. 9.  
130 United  States ' response to Arbitrator question No. 53(a), para. 11; and comments on China's 
response to Arbitrator question No. 53(b), paras.  5-6. Like the United  States , China also submits that the 
USDOC, in some of the anti -dumping orders at issue, calculated the separate duty rates on the basis of 
individual duty rates calculated based on adverse facts available. Ch ina further argues that the USDOC made 
improper use of adverse facts available in calculating the individual duty rates on which the separate duty rates 
were based. In support of its view, China refers to the Appellate Body Report in US – Hot-Rolled Steel . (China's 
written submission, paras.  220-228).  
131 United  States ' response to Arbitrator question No. 52, para. 9.  
132 We also note China's argument that the use of the separate duty rates on record as the 
counterfactual duty rates for the exporters within the  PRC-wide entity would not be reasonable because such 
duty rates are WTO -inconsistent for reasons in addition to those we discussed in detail in paragraph 5.50. In 
this regard, China contends that some of the separate duty rates on record are tainted because they were 
calculated in proceedings where the USDOC imposed both anti -dumping and countervailing measures and 
failed to adjust the separate duty rates for domestic  subsidies. In support of its view, China refers to the 
Appellate Body's report in US – Countervailing and Anti -Dumping Measures (China) . (China's written 
submission, paras.  229-230). China also contends that some of the separate duty rates on record are t ainted 
by the USDOC's improper use of the WA -T methodology and zeroing. In support of its view, China refers to the 
Appellate Body's reports in  US – Washing Machines , US – Zeroing (Japan) , and US – Stainless Steel (Mexico) . 
(China's written submission, par as. 231-234).  
133 United  States ' response to Arbitrator question No. 54(c), paras.  25-26. For three anti -dumping 
orders, the United  States  argues that it could increase the counterfactual duty rates by relying on either 
individual duty rates calculated for s elected exporters or the separate duty rates calculated during the most 
recent administrative reviews. (Ibid).  
134 China's comments on the United  States ' response to Arbitrator question No. 54(d), para. 14.  WT/DS471/ARB  
 
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  separate duty rates calculated during different time periods, or averages thereof.135 Each party 
criticize s the other's approach as selective and as either exaggerating or underestimating the level 
of nullification or impairment.136 We recall that, in determining the appropriate counterfactual for 
the USDOC's use of the WA -T methodology with zeroing, w e used alternative duty rates from the 
record that were specifically calculated  by the USDOC for the exporters at issue in the relevant 
anti-dumping proceedings . However, the USDOC did not calculate such alternative duty rates f or the 
exporters within the PRC-wide entity. In light of this, we cannot speculate on how the USDOC would 
have calculated the duty rates for the exporters within the PRC -wide entity, had they not been 
included in the PRC -wide entity and assigned the PRC -wide duty rate pursuant to the  Single Rate 
Presumption. W e therefore consider it reasonable to apply, as a proxy, a duty rate of 0.00%  as the 
counterfactual for the exporters within the PRC -wide entity . 
5.52.   For these reasons, we consider that the use of a 0.00% duty rate as the counterfact ual for 
the exporters within the PRC -wide entity in all anti -dumping orders at issue reflects a reasonable 
and plausible compliance scenario . 
5.2.2.2   Separate opinion of one member of the Arbitrator  
5.53.   I generally agree with the majority that, for the purpose of arbi tration proceedings under 
Article  22.6 of the DSU, a reasonable or plausible  counterfactual should be one that, at least, is 
consistent with the covered agreements. I, however, disagree with the majority on how to assess 
whether a proposed counterfactual i s consistent with the covered agreements. Specifically, in my 
view, when considering the possibil ity of taking  into account potential inconsistencies with WTO 
obligations  other than those that were found to have been violated in  the original proceedings, 
particular and extra restraint should be exercised . Otherwise, the  careful balance between, on the 
one hand, Articles  11 and 21.5 of the DSU and, on the other hand, Article  22.6 of the DSU may be 
disturbed.  This difference in views necessarily leads me to r each conclusions different from those of 
the majority on two important issues related to the counterfactual adopted in these proceedings.  
5.54.   The first issue  concerns the group of Chinese exporters within the PRC -wide entity to which 
the counterfactual duty wi ll apply. In this regard, the United  States  divides the exporters within the 
PRC-wide entity into two groups, namely those for which there is evidence that they failed to 
cooperate and those for which there is no evidence that they failed to cooperate.137 On this basis, 
the United  States  argues that the counterfactual duty should only apply to the latter group of 
exporters because the USDOC could legitimately continue assigning the former group of exporters 
duties on the basis of adverse facts available becau se they failed to cooperate.138 China disagrees, 
arguing that for some of the exporters, for which the United  States  considers  there is evidence that 
they failed to cooperate, the USDOC should not have applied facts available at all and for others it 
should have applied "neutral", as opposed to "adverse", facts available.139 
5.55.   The majority has decided to apply the counterfactual duty to all exporters within the PRC -wide 
entity, expressing the view that in assessing the reasonableness or plausibility of the counterfactual, 
its consistency with the covered agreements should be taken into account. In the majority's vie w, 
this assessment should not be limited to those provisions of the covered agreements that formed 
the basis of the original panel's findings of violation.140 
5.56.   I am fully aware that the adoption of a reasonable or plausible  counterfactual in an arbitration 
proceeding under Article  22.6 is, by its very nature, based on a hypothetical. This is because such 
an arbitration proceeding is triggered by the fact that the original respondent failed to fully comply 
with the DSB recommendations and rulings in the origina l proceedings, and that the arbitrator acting 
pursuant to Article  22.6 is left to determine what would be a reasonable or plausible  compliance 
scenario. Depending on the nature of the WTO -inconsistent measure, identifying such a 
counterfactual may not be o verly complex. In this regard, I recall that in a number of past arbitration 
                                                
135 China's response to Arbitrator question No. 54(e) , paras.  20-23; and China's Identification of 
Suitable Benchmarks for All Other Anti -Dumping Duty Rates , (Exhibit CHN -53). 
136 See China's comments on the United  States' response to Arbitrator question No. 54(e), para. 17; and 
United  States ' comments on Chin a's response to Arbitrator question No. 54(e), paras.  13-14. 
137 United  States ' written submission, paras.  40-41. 
138 United  States ' written submission, paras.  40-41. 
139 China's response to Arbitrator question No. 56, paras.  26-29. 
140 See para. 5.40 above.  WT/DS471/ARB  
 
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  proceedings, the arbitrators considered the withdrawal of the measure a reasonable or plausible  
compliance scenario, and the parties did not contest such an approach.141 The WTO -inconsistent 
measures at issue in these proceedings, however, are much more complex in nature and therefore 
the adoption of an appropriate counterfactual has proved to be more challenging compared with 
some of th e past arbitration proceedings. Indeed, a nti-dumping duties are adopted as a result of an 
investigative process involving not only strict procedural rules that have to be followed by the 
investigating authorities but also a host of rules that govern the substantive determinations. Thus, 
compared with most other measures, anti -dumping measures could potentially be inconsistent with 
many WTO obligations.   
5.57.   In the prese nt proceedings, the majority took into account violations of the provisions of the 
Anti-Dumping Agreement other than those found by the DSB in the original proceedings, in 
considering whether the proposed counterfactual was reasonable or plausible . Specifically, the 
majority considered that it would be too speculative to assume that the USDOC could, pursuant to 
Article  6.8 and Annex II of the Anti-Dumping Agreement, continue applying the duty rates calculated 
on the basis of adverse facts available vis-à-vis the exporters for which, in the view of the 
United  States , there is evidence that they failed to cooperate. On this basis, the majority co ncluded 
that the counterfactual duty rate should apply to the entirety of the exporters within the PRC -wide 
entity.142 I recall that in the original proceedings in this dispute, there was no finding of violation of 
Article  6.8 or Annex II of the Anti -Dumping  Agreement.  
5.58.   I am of the view that the majority has not applied extra and particular restraint by taking into 
account the proposed counterfactual 's inconsistency with WTO obligations other than those found to 
have been violated in the original proceedings. Therefore, I di sagree with the majority's approach 
and consider that only the provisions forming the basis of the original panel's findings of violations 
should have been taken into account. In my view, the counterfactual duty should therefore have 
applied  only to those exporters within the PRC -wide entity for which, in the view of the United  States , 
there is no evidence that they failed to cooperate in the relevant investigations.  
5.59.   I conclude by noting that applying the counterfactual duty to all exporters within the PRC -wide 
entity, in my view, affects  the level of nullification or impairment, and disregards the right of WTO 
Members, enshrined in Article  VI of the GATT  1994, to offset and prevent  injurious dumping.  
5.60.   The second issue  concerns the rate of the counterfactual duty. I recall that the United  States 
proposes to apply the separate duty rates on the record of the relevant anti -dumping orders as the 
counterfactual duty rate to the Chinese exporters within the PRC -wide entity for which, in the view 
of the United  States , there is no evidence that they failed to cooperate.143 China disagrees with this 
view, arguing that the separate duty rates are likely inconsistent with a range of WTO obligations.144 
5.61.   Having concluded that the counterfactual duty rate should apply to all exporters within the 
PRC-wide entity, the majority considered that it would not be reasonable to assume that the USDOC 
could have refused to individually examine the exporters within the PRC -wide entity and assigned 
the separate duty rates to these exporters pursuant to Article  6.10.2 of the Anti -Dumping 
Agreement, nor to assume that such duty rates would be consistent with Article  9.4 of the Anti -
Dumping Agreement.145 Here too, in the original proceedings in this dispute, there was no finding of 
violation of any of these two provisions.  
5.62.   I am of the view that the majority did not apply extra and particular restrain t by taking into 
account WTO obligations other than thos e that were found to have been violated in the original 
proceedings. Therefore , I disagree with the majority's approach and consider that only the provisions 
forming the basis of the original panel's findings of violation should have been taken into accoun t. 
The counterfactual duty rate should therefore have been the separate duty rates on the record of 
the relevant anti -dumping orders, not the proxy of 0.00% applied by the majority. Here too, 
                                                
141 See e.g. Decisions by the Arbitrators, EC – Hormones (US) (Article  22.6 – EC), para. 38; US – COOL 
(Article  22.6 – US), paras.  3.10-3.12; and US – Tuna II (Mexico) (Article  22.6 – US), paras.  4.8-4.10. 
142 See paras.  5.41-5.45 above.  
143 United  States ' written submission, paras.  40-41; and response to Arbitrator question No. 3(b)(i), 
paras.  4-5 and 8 -9. 
144 China's written submi ssion, paras.  220-238 (referring to Articles 2.4.2, 6.8, and 9.3 and Annex II of 
the Anti -Dumping Agreement and Article  19.3 of the Agreement on Subsidies and Countervailing Measures).  
145 See paras.  5.46-5.52 above.  WT/DS471/ARB  
 
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  I conclude by noting that applying a 0.00% counterfactual duty r ate, rather than the separate duty 
rates, in my view, affects  the level of nullification or impairment, and disregards the right of WTO 
Members, enshrined in Article  VI of the GATT  1994, to offset and prevent  injurious dumping.  
5.3  Conclusion  
5.63.   For the reasons s et out in the preceding sections, we will use the following counterfactual for 
the purpose of estimating  the level of nullification or impairment: With respect to Coated Paper , we 
will use a 0.00% duty rate as the counterfactual for the exporter APP -China,  for the exporters that 
receive the separate duty rate, and for the exporters within the PRC -wide entity. With respect to 
OCTG , we will use a [[ ***]]% duty rate as the counterfactual for the exporter TPCO and for the 
exporters that receive the separate dut y rate, and we will use a 0.00% duty rate as the 
counterfactual for the exporters within the PRC -wide entity. With respect to Steel Cylinders , we will 
use a 0.00% duty rate as the counterfactual for the exporters that receive the separate duty rate 
and for  the exporters within the PRC -wide duty entity. With respect to Aluminum Extrusions , Bags, 
Diamond Sawblades , Furniture , OTR Tires , PET Film , Ribbons , Shrimp , Solar Panels , Wood Flooring , 
Copper Pipe and Tube , Iron Pipe Fittings , Passenger Vehicle and Light Truck Tires , Residential 
Washers , Sheet and Strip , Steel Flat Products , Steel Line Pipe , Steel Nails , Steel Pipe , Steel Products , 
Steel Standard, Line, and Pressure Pipe , and Steel Wire Rod , we will use a 0.00% duty rate as the 
counterfactual for all  of the exporters within the PRC -wide entity. We will maintain all other duty 
rates imposed under the anti -dumping orders at issue, without any modification.  
6  ARBITRATOR'S DETERMIN ATION OF THE APPROPR IATE METHODOLOGY FOR  
ESTIMATING THE LEVEL  OF NULLIFICATIO N OR IMPAIRMENT  
6.1.   In the section above, we have determined the appropriate counterfactual for the United  States ' 
compliance with the DSB recommendations and rulings by the expiry of the reasonable period of 
time. As explained in detail in paragraph 5.63, we use, as the counterfactual, the reduction  of the 
duty rates that were based on the USDOC's WTO -inconsistent use of the WA -T methodology with 
zeroing and the Single Rate Presumption in the anti -dumping orders at issue.  
6.2.  We now turn to determine the appropriate methodology for estimating the level of nullification 
or impairment by calculating what would have happened, in terms of trade flows, had the 
United  States compl ied with the DSB recommendations and rulings by the expiry of the reasonable 
period of time, in the manner reflected in the counterfactual. In this regard, we will first assess the 
calculation methodolog y that China propose s. Should we find that this calcu lation methodology is 
not appropriate for  estimat ing the level of nullification or impairment, we will proceed to determine 
an alternative calculation methodology.  
6.1  Assessment of China's proposed calculation methodology  
6.3.  China proposes to use the difference -in-difference (DID)  tabular  approach t o estimate the value 
of imports from China that would have occurred in 2017 but for the United  States ' continued 
imposition of the anti -dumping orders at issue.146 As described in section 3 above, China has 
excluded Aluminum Extrusions  from its calculations and provides calculations concerning the 
remaining 24  anti-dumping orders  at issue .147 
6.1.1   China's proposed DID tabular approach  
6.4.  Generally , the DID tabular approach es timates the impact of an anti -dumping order by 
comparing: (i)  the evolution of US  import s from China subject to the anti -dumping order , defined  
as "the treatment group ", between the period prior to  the imposition of the order and the year 2017 
with (ii) the evolution of  US imports  from a group of countries not subject to anti -dumping orders 
on the product at issue , defined as "the comparison group ", between the period prior to the 
imposition of the order and the year 2017.148 Using the evolution of the US imp orts from the 
                                                
146 China's methodology pap er, paras.  3 and 27 -35. 
147 As explained above, China bases its request for suspension in the amount of USD 7.043 billion only 
on 12 anti -dumping orders covered by the original panel's "as applied" findings of violation, but argues that 12 
additional anti -dumping orders covered by the original panel's "as such" findings of violation should be added if 
the Arbitrator were to reject or lower China's estimated level of nullification or impairment.  
148 China's methodology paper, paras.  31-33 and 74 -75. WT/DS471/ARB  
 
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  comparison group as a proxy, the DID tabular approach then estimates the counterfactual  value of 
US imports from China  in 2017, had it not been subject to the anti -dumping order. The impact of 
the anti -dumping order on US imports from China i s the difference between the observed, actual 
2017 value of US imports from China and the estimated, counterfactual value of US imports from 
China  in 2017. This amount corresponds to the level of nullification or impairment concerning  that 
anti-dumping ord er.149 
6.5.  As shown in Table 1, to calculate the level of nullification or impairment, the DID tabular 
approach requires four data points: (i)  the value of US  imports from China  in the period  prior to the 
imposition of the anti -dumping order150; (ii) the value of US imports from China in 2017151; (iii) the 
value of US imports from the comparison group in the period prior to the imposition of the 
anti-dumping order;  and (iv)  the value of US imports from the comparison group in 2017. 
Table 1: General DID tabular approach  
 Period prior to 
the imposition of 
the anti -dumping 
order  2017  Difference  
US imports from China  subject  to 
anti-dumping  order  
(treat ment  group)  𝐶𝐻𝑁𝑝𝑟𝑒𝐴𝐷 𝐶𝐻𝑁𝐴𝐷 𝐶𝐻𝑁𝐴𝐷−𝐶𝐻𝑁𝑝𝑟𝑒𝐴𝐷 
US imports from a group of 
countries not subject to an anti-
dumping order  on the same 
product  (comparison group)  𝐶𝐺𝑝𝑟𝑒𝐴𝐷 𝐶𝐺𝐴𝐷 𝐶𝐺𝐴𝐷−𝐶𝐺𝑝𝑟𝑒𝐴𝐷 
Difference  in difference i.e. level of nullification or impairment  − (𝐶𝐻𝑁𝐴𝐷−𝐶𝐻𝑁𝑝𝑟𝑒𝐴𝐷 ) 
(𝐶𝐺𝐴𝐷−𝐶𝐺𝑝𝑟𝑒𝐴𝐷 ) 
 
6.6.  In estimating the level of nullification or impairment concerning the anti -dumping orders at 
issue, China uses the DID tabular approach to conduct several calculations under different 
assumptions, and thus provides several estimates to support its request for authorization to suspend 
concessions in the amount of USD 7.043 billion.  
6.7.  First, China acknowledges that it must apply the DID tabular approach for the anti -dumping 
orders at issue in a manner that meets the so -called parallel trend s assumption , meanin g that absent 
the imposition of the anti -dumping orders,  the evolution of US imports from China and  from the 
comparison group  would have followed the same trends.152 Given the importance of the parallel 
trends assumption for the DID tabular approach, China proposes to apply the DID tabular approach 
for the anti -dumping orders at issue using different comparison groups .153 In addition, China 
proposes to use  different metri cs of analysis.154 
6.8.  With respect to the comparison group, China uses two definitions: (i)  a "non-subject countries " 
group  comprising exporters of the product from countries not subject to anti -dumping orders; and 
(ii) an "all countries " group comprising expor ters from all countries, including China, regardless of 
whether they are subject to anti -dumping order s.155 China claims that the "all countries " group has 
the advantage of controlling for substitution among exporters from different countries . If imports  
from some  countries increase because exporters  from China or other countries are now shut out of 
the market due to the anti -dumping orders , that increase is offset by the decrease in imports from 
                                                
149 China's me thodology paper, para. 36; Difference in Difference Estimates (HS10) for 13 "As Applied" 
Cases, (Exhibit CHN -5); Difference in Difference Estimates (HS10) for 12 "As Such" Examples, (Exhibit 
CHN-13); and China's Revised Estimates of Nullification or Impair ment, (Exhibit CHN -21). 
150 Depending on the timing of the imposition of the anti -dumping order, China proposes to use, as the 
period prior to the imposition of the order, a period of either three or four years, which might or might not 
overlap with the USIT C's period of investigation. (China's methodology paper, para. 107) . Thus, China uses the 
average trade value of these three or four years. (China's methodology paper, para. 75) . 
151 As explained in section 4 above, China uses calendar year 2017 as the reference period for 
determining the level of nullification or impairment caused by the United  States ' failure to implement the DSB 
recommendations and rulings by the exp iry of the reasonable period of time.  
152 China's methodology paper, paras.  40 and 67 -68. 
153 China's methodology paper, paras.  70-71. 
154 China's methodology paper, paras.  97-98. 
155 China's methodology paper, para. 74.  WT/DS471/ARB  
 
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  China.156 China claims that none of the comparison groups can, ho wever, control for substitution 
from exporters  to domestic producers caused by the anti-dumping orders , which may depress total 
imports  from all countries below what otherwise would exist. China is of the view that the DID tabular 
approach is therefore inh erently conservative and under estim ates the true level of nullification or 
impairment.157 
6.9.  With respect to the metrics of analysis , China proposes to apply the DID tabular approach at 
two metrics  of analysis, i.e. a level of trade metric and a growth of trade  metric.158 Under the level 
of trade metric, the calculation is based on the absolute changes in the value of US imports from 
China and from the comparison group, as described in paragraph 6.4 above.159 Under the growth of 
trade metric, the percentage change in the value of US imports from the comparison group is applied 
to the  value of US imports from China, and that value is compared with the value of actual imports 
from China in 2017.160 According to Ch ina, one metric is not necessarily better than the other, 
because the level of trade and the growth of trade metrics are simply different ways to approach the 
issue. While the standard approach is to implement  the DID tabular approach using the level of tr ade 
metric , China argues that this approach has limitations when applied to longer periods of time or 
broader categories of products,  and when the level of trade or capacity of the comparison group 
differs significantly from that of China.161 Therefore, Chin a proposes to use the growth of trade 
metric as well as the level of trade metric.162 
6.10.   Accordingly, China applies the  DID tabular approach using both the level of trade metric and 
the growth of trade metric for both the "non-subject countries" comparison grou p and the "all 
countries" comparison group for  each anti -dumping order at issue. This approach yields four 
calculation results for each order. China then calculates the average of the four calculation results 
to estimate the level of nullification or impai rment for each order. China conducts all of these 
calculations at Harmonized System (HS) tariff numbers at the ten -digit level .163 All of the calculation 
results, and the average thereof, are reproduced in Table 2  below . 
6.11.   Second, to demonstrate that its estim ated level of nullification or impairment is accurate, 
China conducts robustness checks. More particularly, China applies the DID tabular approach using 
the growth of trade metric for a broader category of products, by using more aggregated data at 
HS-6, HS-4, and HS-2 levels. China also  produce s a minimum estimate for each anti-dumping order 
by picking the lowest of the four calculation results described in the preceding paragraph. China uses 
the robustness checks to demonstrate that the estimated level of nullification or impairment does 
not change significantly when the definition of the product changes, or  when using the minimum 
estimate.164 China also provide s alternative estimates that take into account  the effect of 
countervailing duties imposed on  some of the product s at issue .165 All of the calculation results 
yielded under China's robustness checks are reproduced in Table  2 below . 
 
                                                
156 China's methodology paper, para. 84.  
157 China's methodology paper, para. 85.  
158 China's methodology paper, para. 98.  
159 China's methodology paper, paras.  96-97. 
160 China notes that the growth of trade metric is the same as applying the DID tabular approach us ing 
the logarithmic value of trade. (China's methodology paper, fn 46) . 
161 China's methodology paper, para. 97.  
162 China's methodology paper, para. 98.  
163 China's methodology paper, paras.  6 and 117.  
164 China's methodology paper, paras.  138-139. 
165 China's methodology paper, paras.  124-136.  
  WT/DS471/ARB  
 
- 37 - Table 2: Results yielded under  China's proposed DID tabular approach  
 Calculation results  
(million  USD)  Robustness check s 
(million  USD)  
HS-10 HS-10 HS-6 HS-4 HS-2 
Non-Subj All Non-Subj and All  Non-Subj and All  All 
Level-DID Growth -
DID Level-DID Growth -
DID Average 
level-DID Average 
growth -
DID Average 
of level - 
and 
growth -
DID Minimum 
of level - 
and 
growth -
DID CVD 
adjusted 
average 
of level - 
and 
growth -
DID Growth -
DID Growth -
DID Growth -
DID 
 Including Aluminum Extrusions  Including Aluminum Extrusions  
13 "as applied" 
anti-dumping orders  33,025  21,843  54,445  12,329  43,734  17,087  30,410  12,092  17,226  6,013  5,967  6,631  
12 "as such" 
anti-dumping orders  9,242  9,221  5,095  4,403  7,168  6,812  6,990  3,449  5,003  4,447  4,514  4,552  
Total  42,267  31,064  59,540  16,732  50,902  23,899  37,400  15,541  22,229  10,460  10,481  11,183  
 Excluding Aluminum Extrusions  Excluding Aluminum Extrusions  
12 "as applied" 
anti-dumping orders  10,421  8,361  9,264  4,831  9,842  6,597  8,219  4,594  7,462  6,013  5,967  6,631  
12 "as such" 
anti-dumping orders  9,242  9,221  5,095  4,403  7,168  6,812  6,990  3,449  5,003  4,447  4,514  4,552  
Total  19,663  17,582  14,359  9,234  17,010  13,409  15,209  8,043  12,465  10,460  10,481  11,183  
Sources:  China's Revised Estimates of Nullification or Impairment , (Exhibit CHN -21); and China's response to Arbitrator question No. 28, para.  163. 
Notes:  "Non-subj" refers to the " non-subject countries" comparison group , while "All" refers to the "all countries" comparison group. "Level -DID" refers to the DID 
tabular ap proach based on a level of trade metric , while "Growth -DID" refers to the DID tabular approach based on a growth of trade metric . The first part of 
the table reports China's  calculation results including Aluminum Extrusions , the second part reports China' s calculation results  excluding Aluminum Extrusion s. WT/DS471/ARB  
 
- 38 - 
 
  6.12.   Based on its proposed DID tabular approach, China estimates that t he total level of 
nullification or impairment is equal to USD 8 .219 billion for the 12 of the anti-dumping orders covered 
by the "as applied" findings of violation and USD 6 .990 billion for the 12 anti -dumping orders covered 
by the "as such" findings of violation .166 As explained in section 3 above, China requests 
authori zation to suspend concessions in the amount of  USD 7 .043 billion, and bases its request only 
on 12 of the anti-dumping orders covered by the "as applied" findings of violatio n.167 China argues 
that, in case the Arbitrator lowers the amount of nullification or impairment  for the "as applied" 
findings of violations , the Arbitrator should "add to the lowered estimate" the level of nullification or 
impai rment concerning  the "as such" findings of violation .168 
6.1.2   China's proposed adjustments to the DID tabular approach  
6.13.   As explained above, China's proposed DID tabular approach estimates the value of US  imports 
from China that would have occurred in 2017, but for  the United  States ' continued imposition of the 
anti-dumping orders at issue. In other words, China's proposed calculation methodology 
presupposes the use of China's proposed counterfactual, that is the withdrawal of the entirety of the 
anti-dumping orders  at issue. We have, in section 5 above, rejected China's proposed counterfactual 
and determined an alternative counterfactual, namely, the reduction  of the anti -dump ing duties that 
were calculated using the WTO -inconsistent WA -T methodology with zeroing and the Single Rate 
Presumption.  
6.14.   In response to a question from the Arbitrator, China argues that its proposed calculation 
methodology can be used even if the Arbitrator were to choose a counterfactual  other than the one 
that China  proposes . In this context, China pr opose s two types of adjustments . 
6.15.   First, China propos es an adjustment  to account for  a counterfactual  where only the 
anti-dumping duties imposed on exporters within the PRC -wide entity are withdrawn, whereas all 
other anti -dumping duties at issue remain. In this regard, China proposes to adjus t downward the 
estimated level of nullification or impairment in proportion to the share  of the PRC -wide entity in US 
imports from China  during the original period of investigation. On this basis, China estimates a total 
adjusted level of nullification or impairment of U SD 5.6 billion  for all 24 anti -dumping orders.169 
6.16.   Second, China proposes adjustments to account for a counterfactual, under which the 
anti-dumping duties are only modified rather than withdrawn. In this regard, China proposes to 
apply a 10% reduction  to its estimated level of nullification or impairment for anti -dumping orders 
where the counterfactual duty rate is lower than 10%. For the anti -dumping orders where the 
counterfactual duty rate is higher than 10%, China proposes to adjust  downward the estimated level 
of nullification or impairment in proportion to the counterfactual duty rate. On this basis , China 
estimates a total adjusted level of nullification or impairment of USD 12.1 billion  for all 24 
anti-dumping orders .170 
6.1.3   Assessment by the Arbitrator  
6.17.   We recall that the DID tabular approach compares the evolution of US imports from China 
with the evolution of US imports from the comparison groups. It uses the latter to estimate a 
counterfactual value of US imports from China, had it not been for the continued imposition of the 
anti-dumping orders at issue, and to estimate the level of nullification or impairment. More 
particularly, the level of nullification or impairment consists of the difference between the actual 
value of US imports from C hina in 2017 and the estimated, counterfactual value of US imports from 
China in 2017. Therefore, the appropriateness of the DID tabular approach hinges on the choice of 
the comparison group s. Inherently, the DID tabular approach can only be considered a v alid 
calculation methodology if the evolution of US imports from China would have been similar to the 
                                                
166 China's written submission, para. 105. This figure excludes Aluminum Extrusions . 
167 China's methodology paper, paras.  166-168. 
168 China's methodology paper, para. 173.  
169 China's opening statement at meeting of the Arbitrator, para. 49; and response to Arbitrator 
question No.  77, paras.  103-107; and China's Adjusted Estimates of Nullification or Impairment To Take Into 
Account Only PRC -Wide Entity Exports , (Exhibit CHN -49 (BCI)).  
170 China's response to Arbitrator question No. 76, paras.  92-98; and China's Adjusted Estimates of 
Nullification or Impairment To Take Into Account Changing Anti -Dumping Duty Rates , (Exhibit CHN -48). WT/DS471/ARB  
 
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  evolution of US imports from the countries in the comparison groups, in the absence of the anti -
dumping orders.  
6.18.   As explained above, China uses two differe nt comparison groups, namely a  "non-subject 
countries " group  comprising exporters of the product from countries not subject to anti -dumping 
order s; and an  "all countries " group  comprising exporters from all countries, including China, 
regardless of whether  they are subject to anti -dumping order s.171 China estimates the level of 
nullification or impairment using an average of the calculations conducted for each comparison 
group.  The United  States  is of the view that the comparison groups used by China fail  to meet three 
key assumptions, namely (i) the parallel trends  assumption ; (ii) the stability  assumption , and 
(iii) the uniformity assumption.172 We now turn to examine whether these three assumptions are 
met. 
6.19.   The parallel trends assumption  requires that the trends in both US imports from China 
and US imports from the comparison group s would be the same in the absence of the anti-dumping 
orders.173 In the United  States ' view, neither of the two comparison groups chosen by China meets 
this assum ption.174 China argues that it cannot perform a statistical  analysis demonstrating that US 
imports from China and from the comparison groups satisfy the parallel trends assumption because 
it does not have the necessary publicly available data , due to regular changes in the US H TS 
system.175 In any event, China contends that a statistical analysis  is not necessary to conclude what 
is common sense , namely,  that the evolution of imports from  other suppliers in the market is 
informative of what the e volution of imports from China would have been but for the continued 
imposition of the anti -dumping orders at issue .176 
6.20.   Both parties agree on the relevance of the parallel trends assumption.177 We too consider that 
this assumption is the most critical assumpti on to ensure the validity  of China's DID tabular approach 
and therefore its estimated level of nullification or impairment. While China asserts that it made a 
considerable effort to demonstrate that the parallel trends assumption holds for its co mparison 
groups178, China  does not provide any evidence to prove that the parallel trends assumption holds . 
Instead, China provides calculations using  both the level of trade metric and the growth of trade 
metric for its two chosen comparison groups and uses the avera ge of these calculations, arguing 
that this renders its estimated level of nullification or impairment accurate.  Further, China points out 
that it has conducted robustness checks by applying its DID tabular approach to a broader category 
of products using data at higher aggregated HS levels; by applying its DID tabular approach to 
calculate minimum estimates; and by applying its DID tabular approach to calculate estimates which  
take into account the  effect of countervailing duties imposed on some of the pro ducts at issue.179 In 
China's view, the results obtained from its robustness check s are similar to its estimated level of 
nullification or impairment, thus confirming the reasonableness of the latter.180 According to China, 
its flexible approach provides the Arbitrator with a set of estimates  from which it can "mix and 
match " as it finds a ppropriate .181 
6.21.   The United  States  argues that China's use of an average of estimates does not provide an 
accurate level of nullification or impairment, since all of these estimates are calculated using China's 
flawed DID tabular approach .182 Similarly, the Unit ed States  argues that China did not provide valid 
robustness check s because it should not have used its own DID tabular approach, but rather a 
variety of methods to estimate the level of nullification or impairment under different but plausible 
                                                
171 China's methodology paper, para. 74.  
172 United  States ' written submission, paras.  114 and 129.  
173 United  States ' written submission, para. 132.  
174 Further, the United  States  argues that the DID tabular approach requires a definition of the 
treatment and comparison groups that closely approximates condit ions in which the treatment, i.e. the anti -
dumping duties, can be considered randomly assigned relative to a comparison group that faces identical 
conditions except for the treatment. The United  States  is of the view that it is incorrect to designate the " non-
subject countries" group as a comparison group because the treatment cannot be thought of as being applied 
randomly. (United  States ' written submission, para. 118) . 
175 China's response to Arbitrator question No. 19(c), para. 93. 
176 China's response to Ar bitrator question No. 19(c), para. 92. 
177 China's methodology paper, para. 40; and United  States ' written submission, paras.  129-130. 
178 China's written submission, para. 103  
179 China's written submission, paras.  106-108. 
180 China's response to Arbitrator question No. 21, paras.  112-121. 
181 China's response to Arbitrator question No. 21, para. 113. 
182 United  States ' written submission, para. 154.  WT/DS471/ARB  
 
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  assumptions .183 Furthermore, the United  States  asserts that many of the results yielded under 
China's robustness checks are not similar to China's estimated level of nullification or impairment, 
and that China does not follow any standard statistical procedure to  demon strate that the differences 
between the results yielded under the robustness checks and the estimated level of nullification or 
impairment are approximately zero.184 
6.22.   We are not convinced by China's approach. The use of an average of different estimates based  
on different comparison groups does not, in and of itself, demonstrate that these comparison groups 
meet the parallel trends assumption. Nor does the use of an average mean that the estimated level 
of nullification or impairment is accurate, especially wh en one or more comparison groups do not 
meet the parallel trends assumption. Similarly, since China's robustness checks are also conducted 
based on  the same comparison groups, we do not consider that these robustness checks serve to 
demonstrate that these comparison groups meet the parallel trends assumption. We further note 
that China claims that its estimated level of nullification or impairment of USD 7 .043 billion is robust 
as it is within the same range as the results yielded under the robustness check s.185 However, as 
demonstrated in Table 2, the robustness checks conducted for the anti -dumping orders underlying 
China's estimate yield results ranging from USD 4 .6 billion to USD 7 .5 billion. C hina has not  
demonstrate d that the difference s between the estimated level of nullification or impairment and 
the results yielded under  the robustness check s are insignificant. We therefore consider that these 
results vary significantly, which undermines China's claim of robustnes s. 
6.23.   Although there is no formal statistical test to assess the validity of the parallel trends 
assumption, we note suggestions from  literature to use , as a preliminary exercise, a graphical  
compar ison of  the trends in US imports from China and the trends in  US imports from the comparison 
group s before the imposition of the anti -dumping orders .186 This would provide an indication of  
whether US imports from all groups have followed similar trends  in the past. China d oes not provide 
any graphical analysis because  of "serious challenge [s] due to regular changes in the US H TS 
system" .187 Yet, th e United  States  provides  two illustrative graphical comparison example s for 
Steel Cylinders  and Coated Paper , suggesting that the parallel trends assumption does not hold for 
the level of trade metrics nor the growth of trade metrics.188 We are therefore of the view that the 
comparison groups that China propose s do not meet the parallel trends assumption . 
6.24.   The stability assumption  requires that (i) the products covered by US imports from China 
and from the comparison group s must remain the same over time; and (ii) US imports from the 
comparison group s cannot be affected by spillover effects caused by the anti -dumping orders .189 
According to the United  States , this assumption is not met because the product scope of some of 
the anti -dumping orders ha s changed between the imposition of the order and 2017, due to changes 
in the underlying set of H TS codes .190 The United  States  further claims that China's approach 
invalidates the stabil ity assumption because the anti -dumping orders have had spillover effects on 
the comparison groups by increasing US imports from countries not subject to the orders .191 China 
argues that the stability  assumption is  not relevant to its DID tabular approach192, and submits  that 
                                                
183 United  States ' written submission, para. 151. The United  States  also argues that  China's robustness 
checks are not valid because there is no evidence that US imports of a given category of products at HS -10 
level should be expected to follow the same trends as US imports of a broader category of products at HS -6, 
HS-4, or HS -2 levels.  (United  States  written submission, paras.  142-148). 
184 United  States ' written submission, para. 153.  
185 China's methodology paper, paras.  137-144. 
186 See Presentation of Difference -in-Difference Estimation, Columbia University, (Exhibit USA -20); and 
J. Angrist, J. David, and J. Pischke, Mostly Harmless Econometrics: An Empiricist's Companion , (Princeton 
University Press, 2009), (Exhibit USA -23). 
187 China's response to Arbitrator question No. 19(c), para. 93. 
188 See United  States ' written submission, figures 2 and 3 ; and Annex D -1. 
189 United  States ' written submission, para. 133; and D. Rubin, "Assignment to Treatment Group on the 
Basis of a Covariate" (197 7), Vol. 2, No. 1, Journal of Educational Statistics , pp. 1-26. 
190 United  States ' written submission, para. 133.  
191 United  States ' written submission, para. 134. The United  States  claims that violations of the parallel 
trends and stability assumptions in Chi na's DID tabular approach manifest, in part, as omitted variables bias in 
the value of estimates of nullification or impairment. (United  States ' response to Arbitrator question No. 17, 
para. 55) . 
192 China's written submission, paras.  119-120. WT/DS471/ARB  
 
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  it made a significant effort to produce a series of estimates of the level of nullification or impairment 
under different assumptions.193 
6.25.   We note that, contrary to China's assertion, the stability assumption is referenced in academic 
literat ure as a necessary requirement for using the DID tabular approach.194 We also consider this 
assumption to be relevant. As a mathematical matter, the DID tabular approach does not allow a 
valid comparison between the evolution of US imports from China and the evolution of US imports 
from the comparison groups if the scope of the imported products changes over time. Furthermore, 
if the evolution of  US imports from the comparison groups is affected by spillover effects from the 
anti-dumping orders imposed on US imports from China, then the evolution of US imports from the 
comparison groups cannot reasonably be used as a proxy to estimate  how US imports from China 
would ha ve developed, had it not been for the continued imposition of the anti -dumping orders.  
6.26.   We question whether th e stability  assumption holds under China's DID tabular approach. As 
both parties  point out , the product  scope of some anti -dumping orders in term s of HTS codes has 
changed between the initial period and 2017. More importantly, we cannot rule out that US imports 
from countries not subject to anti -dumping orders, which form part of both comparison groups 
proposed by China, are affected by the anti -dumping orders imposed on US imports from China and 
other countries. China's failure to take i nto account such indirect impact would taint the validity of 
the comparison groups and thus yield biased estimates of nullification or impairment.  
6.27.   The uniformity assumption  requires that the level of the anti -dumping duties and lack 
thereof  be the same for  US imports from China and from the comparison group, respectively .195 In 
other words, under the DID tabular approach proposed by China, all exporters within the treatment 
group must be subject to the same level of anti -dumping duties, and all exporters with in the 
comparison groups must be subject to no anti -dumping duties at all. T he United  States  argues that 
this assumption  does not hold under China' s approach because the level s of the anti-dumping duties 
vary for different  exporters .196 The United  States  is further of the view that the "all countries " group 
is an in valid comparison group because it includes US imports from China and from other countries 
subject to anti -dumping order s.197 China argues that the uniformity assumption is  not relevant to its 
DID tabular approach198, and submits  that it made a significant effort to produce a series of estimates 
of the level of nullification or impairment under different assumptions.199 
6.28.   We note that, contrary to China' s assertion, the uniformity assumption  is relevant. The DID 
tabular approach proposed by China only considers the case of a single level of anti -dumping duties 
or lack thereof. In other words, it cannot take into account the effect of different levels of anti -
dumping duties.200  
6.29.   In our view, t he unifo rmity assumption  does not hold under China's DID tabular approach 
because, for all of the anti -dumping orders at issue, different dut y rates  are applied to US imports 
from different Chinese exporters. Therefore, not all US imports from China are subject to  the same 
level of anti -dumping duties. Moreover, the uniformity assumption also requires that all export ers in 
the comparison group s be uniformly not subject to anti -dumping duties at all.  As explained above, 
the "a ll countries " comparison group includes US imports from China and other countries subject to 
anti-dumping orders. This contradicts the requirement that a valid comparison  group must not be 
                                                
193 China's writ ten submission, para. 103.  
194 M. Lechner, "The estimation of causal effects by difference -in-difference methods" (2011), Vol. 4, 
No. 3, Foundations and Trends in Econometrics , pp. 165-224. 
195 United  States ' written submission, para. 135.  
196 United  States ' written submission, para. 135.  
197 United  States ' written submission, para. 140.  
198 China's written submission, paras.  119-120. 
199 China's written submission, para. 119.  
200 The DID tabular approach can accommodate different levels of anti -dumping dutie s provided that it 
is demonstrated that the average outcomes for all exporters within the treatment group would have followed 
parallel trends in the absence of the treatment. (See A. Abadie, "Semiparametric Difference -in-Differences 
Estimators" (2005), Vol . 72, No. 1, The Review of Economic Studies , pp. 1-19; and B. Callaway and P. 
Sant'Anna, "Difference -in-differences with multiple time periods", Working Paper (2019) ). As discussed above, 
we are not convinced that the parallel trends assumption holds under  China's DID tabular approach.  WT/DS471/ARB  
 
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  affected by the treatment, i.e. the anti -dumping orders201, and we therefore do not consider the "a ll 
countries " comparison group valid.   
6.30.   As described in the preceding paragraphs, we do not consider that  the parallel trends  
assumption , the stability  assumption , or the uniformity assumption  hold for the comparison groups 
chosen by China. For these reasons , we are not convinced that the evolution of US imports from the 
chosen comparison groups would have been similar to the evolution of US imports from China, in 
the absence of the anti -dumping orders. Since the DID tabular approach estimates the level of 
nullification or impairment by estimating the evolution of US imports from China using the evolution 
of US imports from the comparison groups as a proxy, China's choice of comparison groups renders 
its use of the DID tabular approach unsuitable.  
6.31.   The United  States has advanced additional arguments against China's proposed DID tabular 
approach. First, the United  States  argues that China should not have used a DID tabular approach 
but rather a DID regression approach, which can control not just for the anti -dump ing orders but 
also for other factors that impact US imports from China differently than US imports from the 
comparison group s.202 Second, the United  States  argues that China's use of the growth of trade 
metric in the context of its DID tabular approach is inappropriate , and that the growth of trade metric 
and the level of trade metric are mutually exclusive because the parallel trends assumption can only 
hold for one metric for any given product, not both. This means that either the estimate based on 
the gro wth of trade metric or the estimate based on the level of trade metric must be biased, in turn 
rendering the average of the two biased.203 Third, the United  States  argues that the DID tabular 
approach can only estimate the level of nullification or impairmen t based on a counterfactual under 
which the entirety of the anti -dumping orders are withdrawn. According to the United  States , the 
adjustments proposed by China are seriously flawed, not consistent with China's own methodology, 
and not based on economic th eory.204 
6.32.   We note that, like the DID tabular approach itself, the United  States ' additional arguments 
hinge upon the validity of the parallel trends assumption, the stability assumption, and the uniformity 
assumption. For instance, the use of a DID regression approach rather than a DID tabular approach 
or the use of either a growth of trade metric or a level of trade metric both require that these three 
assumptions hold. We have already determined that none of these three assumptions hold for 
China's  DID tabular approach, and found, on this basis, that China's proposed calculation 
methodology is not appropriate. In light of this, we do not consider it necessary or useful to address 
the United  States ' additional arguments concerning that methodology.  
6.33.   For the reasons set out above, we conclude that China's proposed DID tabular approach is 
not an appropriate calculation methodology for estimating the level of nullification or impairment. In 
order to fulfil our mandate, we therefore proceed to determine an  alternative calculation 
methodology.  
6.2  Determination of an alternative  calculation methodology  
6.34.   Having found that China's proposed calculation methodology is not an appropriate one, we 
proceed to determine an alternative calculation methodology for estimatin g the level of nullification 
or impairment. In this regard, we find it useful to begin with an assessment of the calculation 
methodologies the United  States  has proposed and consider whether those can provide the basis for 
our estimation.  
6.2.1   The United  States ' proposed calculation methodologies  
6.35.   Unlike China, which proposes a single calculation methodology to estimate the level of 
nullification or impairment for all anti -dumping orders at issue, the United  States  proposes to use 
two different calculation method ologies to estimate the level of nullification or impairment: 
                                                
201 See M. Lechner, "The estimation of causal effects by difference -in-difference methods" (2011), 
Vol. 4, No.  3, Foundations and Trends in Econometrics , pp. 165-224. 
202 United  States ' written submission, paras.  120-121 and 148;  and response to Arbitrator question 
No. 17, paras.  66-67. 
203 United  States ' written submission, para. 127; and response to Arbitrator question No. 17, 
paras.  79-83. 
204 United  States ' comments on China's response to Arbitrator No. 76, paras.  78-87. WT/DS471/ARB  
 
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  (i) a formula -based approach on market shares (formula -based approach); and (ii) an Armington 
imperfect substitutes partial equilibrium model (Armington model) . 
6.36.   The United  States  determines whet her to apply the formula -based approach or the Armington 
model on the basis of a threshold calculation: If the share of the value of US imports from exporters 
assigned WTO -inconsistent anti -dumping duties over the total value of US imports from China in 
2017 is smaller than 1%, the United  States  uses the formula -based approach, otherwise it uses the 
Armington model.205 
6.2.1.1   The formula -based approach  
6.37.   As explained above, the United  States  proposes a formula -based approach  if the share of 
US imports from exporters a ssigned WTO -inconsistent anti -dumping duties over the total value of 
US imports from China in 2017 is smaller than 1%.206 
6.38.   The formula -based approach calculates the share of exporters subject to WTO -inconsistent 
anti-dumping duties in the total value of US im ports from China during the period of investigation, 
and applies that share to the total value of US imports of that product from China in 2017, to 
determine a counterfactual value of US imports from those exporters in 2017.207 It then subtracts 
the actual 2 017 value of imports from the counterfactual 2017 value of imports to estimate the level 
of nullification or impairment.208 
6.39.   According to the United  States , the formula -based approach overestimates the level of 
nullification or impairment because it assumes t hat exporters subject to WTO -inconsistent 
anti-dumping duties would retain the same share of the total value of US imports from China in 2017 
as in the period of investigation even though other Chinese exporters assigned a lower duty rate 
would be more com petitive and would therefore capture a higher market share.209 
6.2.1.2   The Armington model  
6.40.   The Armington model is a partial equilibrium economic model that analyses a single market 
of a given product, ignoring linkages with other markets because those linkages are presumed to be 
negligible. The Armington model that the United  States  proposes assumes that, in the US market, 
the product at issue is differentiated by source countries  and that consumers view products from 
different countries as imperfect substitutes. Imperfect substitutes are products with fairly similar but 
not identical attributes,  which consumers do not necessarily substitute with one another when their 
relative prices change.210 
6.41.   The version of the Armington model proposed by the United  States  contains  four different 
varieties of the product  at issue  originating in four different sou rces: (i) variety produced in the 
United  States  (𝑢𝑠); (ii)  variety imported from the Chinese exporters subject to WTO -inconsistent 
anti-dumping duties ( 𝑝𝑟𝑐); (iii)  variety imported from the remaining Chinese exporters ( 𝑟𝑜𝑖𝑐); and 
(iv) variety impo rted from exporters from the rest of the world ( 𝑟𝑜𝑤).211 In more technical terms, 
the Armington model is defined by a set of equations representing the supply and the demand of 
each of the four varieties (equations 1 to 4) as well as an aggregate  product demand (equation 5) 
and price index (equation 6).212 
                                                
205 United  States ' written submission, para. 78.  
206 United  States ' written submission, para. 87.  
207 United  States ' written submission, paras.  10 and 88.  
208 United  States ' response to Arbitrator question No. 40, para. 155.  
209 United  States ' written submission, para. 95.  
210 Paul S. Armington,  A Theory of Demand for Products Distinguished by Place of Production , Vol. 1, 
No.1, International Monetary Fund (March 1969), (Exhibit USA -68). 
211 United  States ' written submission, para. 63.  
212 United  States ' written submission, para. 71 . WT/DS471/ARB  
 
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  US domestic production  market 
equilibrium : 𝑎𝑢𝑠 (𝑝𝑢𝑠)𝜀𝑢𝑠=𝑄 𝑏𝑢𝑠𝜎(𝑝𝑢𝑠
𝑃)−𝜎
 (1) 
US imports from Chinese 
exporters subject to WTO -
inconsistent anti -dumping duties 
market equilibrium :  𝑎𝑝𝑟𝑐 (𝑝𝑝𝑟𝑐
𝑡𝑝𝑟𝑐)𝜀𝑠
=𝑄 𝑏𝑝𝑟𝑐𝜎(𝑝𝑝𝑟𝑐
𝑃)−𝜎
 (2) 
US imports from the rest of China  
market equilibrium : 𝑎𝑟𝑜𝑐 (𝑝𝑟𝑜𝑐)𝜀𝑟𝑜𝑐=𝑄 𝑏𝑟𝑜𝑐𝜎(𝑝𝑟𝑜𝑐
𝑃)−𝜎
 (3) 
US imports from the rest of the 
world  market equilibrium :  𝑎𝑟𝑜𝑤 (𝑝𝑟𝑜𝑤)𝜀𝑟𝑜𝑤=𝑄 𝑏𝑟𝑜𝑤𝜎(𝑝𝑟𝑜𝑤
𝑃)−𝜎
 (4) 
US aggregate market equilibrium:  𝑄=𝑌0𝑃θ (5) 
US price index  𝑃=(𝑏𝑢𝑠𝜎𝑝𝑢𝑠1−𝜎+𝑏𝑝𝑟𝑐𝜎𝑝𝑝𝑟𝑐1−𝜎+𝑏𝑟𝑜𝑐𝜎𝑝𝑟𝑜𝑐1−𝜎+𝑏𝑟𝑜𝑤𝜎𝑝𝑟𝑜𝑤1−𝜎)1
1−𝜎 (6) 
6.42.   The market equilibrium determines the prices ( 𝑝𝑢𝑠, 𝑝𝑝𝑟𝑐, 𝑝𝑟𝑜𝑐 and 𝑝𝑟𝑜𝑤) for which the quantities 
demanded are simultaneously equal to the quantities supplied in each of the four variety markets, 
subject to the constraint that the US aggregate industry output quantity  (𝑄) is equal to the US 
aggre gate demand evaluated at the price index of the product  (𝑃) and for a given initial equilibrium 
level of aggregate industry expenditure  (𝑌0). The market equilibrium can be obtained by solving the 
set of equations either through a numerical iterative solution or a linear approximation. The 
United  States solves the Armington model through numerical iterations.213 
6.43.   The United  States  proposes to use the Armington model to simulate the impact of reducing 
the duty rates applied to US imports from Chinese exporters subject to WTO -inconsistent 
anti-dumping duties  (𝑡𝑝𝑟𝑐) on the prices and quantities of the US domestic production and US imports 
from these exporters, from the remaining Chinese exporters and from the rest of the world. In other 
words, t he simulated value of US imports  represent s the value of US imports  but for the 
WTO-inconsistent anti -dumping duties . The corresponding level of nullification or impairment is 
obtained by calculating the difference between the actual value of US imports fr om China in 2017 
and the counterfactual value of US imports from China. The United  States  calculates the 
counterfactual value of US imports from China as the sum of the simulated value of US imports  from 
exporters subject to WTO -inconsistent anti -dumping d uties and the simulated value of US imports 
from the re maining  Chinese exporters  following the reduction of  the anti-dumping duties from the 
actual duty rates to the counterfactual duty rates.214 
6.44.   In order to estimate the level of nullification or impairment for a given anti -dumping order, 
the Armington model requires 13 parameter inputs : the 2017 total value of the US market ( 𝑌0), the 
2017 market shares of the four varieties of the product  origina ting in four different sources215 
(𝑚𝑢𝑠, 𝑚𝑝𝑟𝑐, 𝑚𝑟𝑜𝑐 and 𝑚𝑟𝑜𝑤), the price elasticity of total demand (total demand elasticity) ( θ), the 
elasticity of substitution ( σ), the supply elasticities of the four varieties ( 𝜀𝑢𝑠, 𝜀𝑝𝑟𝑐, 𝜀𝑟𝑜𝑐 and 𝜀𝑟𝑜𝑤), and 
the actual and counterfactual duty rates. These 13 parameter inputs determine  the calibrated values 
of the remaining parameters  of the model, namely, the supply and demand shifting factors  
(𝑎𝑢𝑠, 𝑎𝑝𝑟𝑐, 𝑎𝑟𝑜𝑐, 𝑎𝑟𝑜𝑤, 𝑏𝑢𝑠, 𝑏𝑝𝑟𝑐, 𝑏𝑟𝑜𝑐 and 𝑏𝑟𝑜𝑤). 
6.45.   The total demand elasticity measures the responsiveness of the quantity demanded of a 
product to a change in its price. It is typically defined as the percentage change in the quantity 
demanded in response to a 1% change in price.  
6.46.   The elasticity of substitution, also known as the rate of substitution or Armington elasticity, 
measures how easily US consumers switch from one variety to the other when prices change. Under 
the assumptions of the Armington model, consumers substit ute between each variety at a constant 
rate. This elasticity of substitution ranges between 0 and infinity. A 0 elasticity of substitution means 
                                                
213 Code and Text Version of the United  States ' Proposed Armington Model, (Exhibit USA -19). 
214 United  States ' written submission, para. 75.  
215 The market share for each variety of the product is defined as its share of total US consumption of 
the product, namely, 𝑚𝑢𝑠=𝑝𝑢𝑠×𝑞𝑢𝑠
𝑃×𝑄; 𝑚𝑝𝑟𝑐=𝑝𝑝𝑟𝑐×𝑞𝑝𝑟𝑐
𝑃×𝑄;𝑚𝑟𝑜𝑐=𝑝𝑟𝑜𝑐×𝑞𝑟𝑜𝑐
𝑃×𝑄; 𝑚𝑟𝑜𝑤 =𝑝𝑟𝑜𝑤 ×𝑞𝑟𝑜𝑤
𝑃×𝑄. WT/DS471/ARB  
 
- 45 - 
 
  that there is no substitutability at all between varieties, while an infinite elasticity of substitution 
means that the varieties are considered perfect substitutes by consumers.  
6.47.   The supply elasticity measures the responsiveness of the quantity supplied of a product to a 
change in its price. This supply elasticity ranges between 0 and infinity. A 0 supply elasticit y means 
that firms have constrained production capacity and cannot increase or decrease the supply of the 
product in response to price changes, while an infinite elasticity means that firms can automatically 
increase or decrease the supply of the product i n response to price changes.  
6.2.2   Assessment by the Arbitrator  
6.48.   We have described above the two different calculation methodologies  that the United  States  
proposes to estimate the level of nullification or impairment . Below, we first assess the United  States ' 
approach for choosing, for each anti -dumping order at issue, which of the two calculation 
methodologies to apply. We then assess both calculation meth odologies, beginning with the formula -
based approach and then turning to the Armington model.  
6.2.2.1   Assessment of the United  States ' approach for choosing between the two 
calculation methodologies  
6.49.   In deciding which of the two methodologies to use for estimating the level of nullification or 
impairment, the United  States  uses a threshold of 1% for the share of the value of US imports from 
exporters assigned WTO -inconsistent anti -dumping duties over the total value of US imports from 
China in 2017. If this share is  greater than 1% for a n anti-dumping order, the United  States  uses 
the Armington model to estimate the level of the nullification or impairment concerning the order. 
Conversely, if this share is less than 1%, the United  States  uses the formula -based approa ch to 
estimate the level of nullification or impairment concerning the order.216 
6.50.   The United  States  uses the 1% threshold because it contends that the Armington model 
cannot be used to produce reliable estimates where the share of US imports from exporters as signed 
WTO-inconsistent anti -dumping duties is "minimal"217 or "close to zero".218 In the United  States ' 
view, 1%  is a reasonable threshold above which  import values are sufficiently large to reveal 
underlying relative competitiveness given the prevailing conditions in the market , and thus to permit 
the use of the Armington model .219 China, on the other hand, contends that t he 1% threshold is 
arbitrary and that the United  States  has provided no academic support for using this threshold.220 
According to China, there are a number of anti -dumping orders where the share of US imports from 
exporters assigned WTO -inconsistent anti -dumping duties is so small, albeit above the 1% threshold, 
that it rend ers the use of the Armington model inapt.221 
6.51.   As further discussed in section 6.2.2.3.2  below, both parties agree that the Armington model 
is not an appropriate calcula tion methodology for estimating the level of nullification or impairment 
concerning anti -dumping orders where the 2017 market share of exporters assigned 
WTO-inconsistent anti -dumping duties is very small, although they disagree on the specific threshold 
to be used. This problem, often referred to as the "small shares" problem, is also recognized in the 
academic literature.222 More particularly, if the exporters subject to WTO -inconsistent anti -dumping 
duties have a very small market share in the reference pe riod, the Armington model will simulate a 
very small  trade impact of reducing the duty rates,  even if that reduction is very large.  This is 
because increases or decreases in market shares are expressed relative to initial market shares in 
                                                
216 United  States ' written submission, paras.  44-45 and 78.  
217 United  States ' written submission, para. 45.  
218 United  States ' written submission, para. 78.  
219 United  States ' response to Arbitrator question No. 38(b), para. 143.  
220 China's written submission, para. 165.  
221 China's written submission, para. 165 (referring to Iron Pipe Fittings , Bags, Steel Nails , and Steel 
Cylinders ). 
222 The "small shares" problem is sometimes referred to as the "small shares stay small" problem. (See 
M. Kuiper and F. van Tongeren, "Using gravity to move Armington" (2006), Paper prepared for the Ninth 
Annual Conference on Global Economic Analysis in Addis  Ababa, Ethiopia. See also G. Philippidis, H. Resano -
Ezcaray, A. I. Sanjuán -López. "Shifting Armington Trade Preferences: A re -examination of the Mercosur -EU 
negotiations" (2014), No. 40. Economic Modelling , pp. 21-32). WT/DS471/ARB  
 
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  the Armington mod el.223 In the case of a 0% market share in the reference period for exporters 
subject to WTO -inconsistent anti -dumping duties , the Armington model will always generate a 0% 
simulated market share for th ose exporters,  no matter how large the reduction  in the duty rates is. 
However, we see no basis in academic literature for using a 1% threshold, and the United  States  
has provided no such basis in order to justify its approach.224 
6.52.   We further note that, for the purpose of determining whether the 1% threshold is me t, the 
United  States  uses the share of the value of US imports from exporters subject to WTO -inconsistent 
anti-dumping duties over the total value of US imports from China in 2017 .225 For the purpose of 
estimating the level of nullification or impairment, ho wever, the Armington model uses the share of 
the value of US imports from exporters assigned WTO -inconsistent anti -dumping duties over the 
total value of the US market in 2017 .226 It is unclear why the United  States  does not define its 
threshold with the same denominator used in the Armington model. Since the total value of US 
imports from China is always smaller than the total value of the US market, using the former as the 
denominator necessarily increases the shar e and thus renders it more likely that the threshold for 
using the Armington model is met.  
6.53.   While we, in principle, see no issue with using different calculation methodologies for  the 
different anti -dumping orders, the approach for choosing between the two must not be arbitrary, 
considering  the features of these methodologies. Given that the United  States applies an arbitrary 
threshold and calculates this threshold using inputs, which are not consistent with those used in the 
Armington model and which make i t more likely that the threshold for using the Armington model is 
met, we consider that the United  States follows an arbitrary approach in choosing between the 
Armington model and the formula -based approach.  
6.54.   For these reasons, we decline to use the United  States ' approach for choosing between the 
Armington model and the formula -based approach. We turn to assess each of the two calculation 
methodologies to determine an appropriate calculation methodology for estimating the level of 
nullification or impairmen t concerning all of the anti -dumping orders at issue.  
6.2.2.2   Assessment of the formula -based approach  
6.55.   As explained above, the formula -based approach applies the historic share of US imports from 
Chinese exporters subject to WTO -inconsistent anti -dumping duties, f rom prior to their imposition, 
to the total value of US imports from China in 2017, in order to determine a counterfactual value of 
US imports from those exporters in 2017 and to estimate the level of nullification or impairment.227 
6.56.   China argues that the for mula-based approach incorrectly assumes that any increase in 
imports from Chinese exporters subject to WTO -inconsistent anti -dumping duties under the 
counterfactual scenario would occur at the expense of other Chinese exporters.228 Further, China 
argues that  this approach yields downward biased results because it uses historical shares of 
exporters subject to WTO -inconsistent anti -dumping duties, which China considers demonstrably 
wrong229, and applies these historical shares to the actual 2017 total value of U S imports from China, 
which China considers to be depressed due to the imposition of the anti -dumping duties.230 The 
United  States , on the other hand, argues that the  formula -based approach  does not "take trade 
                                                
223 In particular, the simulated marke t shares in the Armington model depend, among others, on the 
demand shifting factors, whose calibrated values depend on the initial market shares. All other things being 
equal, small initial market shares thus yield small demand shifting factors, which in turn yield small simulated 
market shares.  
224 The United  States  argues that the 1% threshold is a reasonable determination of the point at which 
observed import values are sufficiently greater than 0 to reveal underlying relative competitiveness given the 
prevailing conditions in the market. However, despite being asked for economic evidence supporting the use of 
a 1% threshold, the United  States  has not provided references to academic literature or other evidence in 
support of its argument. (United  States ' response to Arbitrator question No. 28(b), paras.  143-144).  
225 United  States ' written submission, para. 87.  
226 See R. Hallren and D. Riker, An Introduction to Partial Equilibrium Modeling of Trade Policy , 
Economics Working Paper Series (Working Paper 2017 -07-B), USITC (July 2017),  (Exhibit USA -15). 
227 United  States ' written submission, paras.  10 and 88; and response to Arbitrator question No. 40, 
para. 155.  
228 China's written submission, para. 135.  
229 China's written submission, paras.  146-148. 
230 China's written submission, para. 157.  WT/DS471/ARB  
 
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  volume or value away " from other Chinese export ers.231 The United  States  considers that the 
historical share of exporters subject to WTO -inconsistent anti -dumping duties is an appropriate 
reference point232, and that it is reasonable to scale the actual 2017 total value of US imports from 
China.233 
6.57.   By using the actual 2017 value of total US imports from China, the formula -based approach 
assumes that the total value of US imports from China would remain the same, had the United  States  
complied with the DSB recommendations and rulings by the expiry of the reaso nable period of time. 
In other words, where the value of US imports from exporters subject to WTO -inconsistent 
anti-dumping duties increases in the counterfactual scenario, the formula -based approach assumes 
that this increase is offset by a corresponding decrease in the value of US imports from other Chinese 
exporters. The United  States  provides no evidence suggesting that this assumption is reasonable. 
The United  States  simply asserts that the formula -based approach does not "take trade volume or 
value aw ay" from Chinese exporters that were not assigned WTO -inconsistent anti -dumping duties, 
but rather uses the historical import shares for all Chinese exporters.234 The basis for this assertion 
appears to relate to the United  States ' proposed counterfactual, n amely, the reduction of the 
WTO-inconsistent anti -dumping duties to the level of the anti -dumping duties assigned to "the rest 
of China".235 We recall that we have rejected the United  States ' proposed counterfactual with respect 
to several of the WTO -inconsi stent anti -dumping duties at issue.236 Further, in our view, it is not 
reasonable to assume that the value of total US imports from China would remain at the actual 2017 
value , and that any increase in US imports from Chinese exporters subject to WTO -inconsistent 
anti-dumping duties  would be offset by a corresponding decrease in US imports from other Chinese 
exporters . 
6.58.   Furthermore, by using historical shares of total US imports from China from prior to the 
imposition of the anti -dumping orders , the formula -based approach assumes that the share of the 
Chinese exporters subject to WTO -inconsistent anti -dumping duties would be the same in the year 
prior to the imposition of the anti -dumping orders and in the counterfactual scenario for 2017. In 
other words, the formula -based approach assumes that other factors occurring between the 
imposition of the anti -dumping orders and 2017 would not have any impact on US imports from 
China. Whil e the United  States  argues that the historical share is an appropriate reference point237, 
it provides no evidence demonstrating that this is a reasonable assumption.238 In light of this, we 
do not consider that it would be reasonable to assume that the share of the Chinese exporters 
subject to WTO -inconsistent anti -dumping duties would necessarily be the same in the year prior to 
the imposition of the anti -dumping orders and in the counterfactual scenario for 2017.  
6.59.   For these reasons, we do not consider that th e formula -based approach is an appropriate 
methodology for estimating the level of nullification or impairment concerning the anti -dumping 
orders at issue. We therefore proceed to assess the United  States ' second proposed calculation 
methodology, the Armin gton model.  
                                                
231 United  States ' response to Arbitrator question No. 43, para. 175.  
232 United  States ' response to Arbitrator question No. 5, para. 20.  
233 United  States ' response to Arbitrator question No. 44, para. 178.  
234 United  States ' response to Ar bitrator question No. 43, para. 175.  
235 United  States ' response to Arbitrator question No. 38(a), para. 141.  
236 See section 5.2 above. We further note that, under the counterfactual that the United  States  
proposes, not all Chinese exporters would be subject to the same level of anti -dumping duties. As explained in 
section 5.2.2 above, the United  States  proposes to reduce the anti -dumping duties for cooperating exporters 
within the PRC -wide entity from the PRC -wide duty rate to the separate duty rate, assigned to Chinese 
exporters that passed the Separate Rate Test but were not chosen for individual examination. While the duty 
rates would thus be the same for these exporters under the counterfactual that the United  States  proposes, 
they would not necessarily be the same for exporters that were chosen for individual examination or 
non-cooperating exporters within the PRC -wide entity, for which the United  States  proposes to maintain the 
PRC-wide duty rate.  
237 United  States ' response to Arbitrator question No. 5, para. 20.  
238 In fact, the United  States appears to contradict the assumption underlying its proposed formula -
based approach in arguing that China's proposed DID tabular approach is not appropriate for estimating the 
level of nullification or impairment concerning the anti -dumping orders at is sue. More particularly, in arguing 
that China's proposed DID tabular approach is not appropriate, the United  States  emphasizes that the 
evolution of US imports are impacted by factors other than simply the anti -dumping duties. (United  States ' 
written submi ssion, paras.  123, 125, and 148; and response to Arbitrator question No.  17, paras.  66-67). WT/DS471/ARB  
 
- 48 - 
 
  6.2.2.3   Assessment of the Armington model  
6.60.   As explained above, the Armington model simulates the impact , in the US market,  of reducing  
the WTO -inconsistent anti-dumping dut ies from the actual duty rates to the counterfactual duty 
rates. China argues tha t this model is not appropriate because it is not designed for the 
circumstances surrounding the anti -dumping orders at issue. More particularly, China argues that 
the accuracy of the Armington model depends, in part, on the changes between the actual 2017  
duty rates and the counterfactual duty rates being small239 and the size and duration of the 
anti-dumping duties not being such that the exporters have almost been driven out of the market.240 
We address these  arguments below.241 
6.2.2.3.1   Level of changes in the duty ra tes 
6.61.   China contends that the Armington model can only provide valid results when simulating small 
changes in duty rates, and has provided a graphical analysis to support its contention.242 In China's 
view, the changes from the actual 2017 duty rates to the co unterfactual duty rates are too large to 
yield valid results for "many of the major cases underlying this dispute".243 The United  States  argues 
that there is no reason to suggest that the estimates that the Armington model generate s are 
inaccurate when the c hange s in duty rates are large , since  the price elasticity of demand varies with 
the size of the changes in the duty rates.244 
6.62.   The graphical analysis that China provided relates to the issue of calculating elasticities, not 
to China's assertion that the Armington model cannot accurately simulate large changes in duty 
rates. We therefore consider that China has not provided evidence demonstrating the alleged 
inaccuracy of the Armington model when simulating large changes in duty rates. Furthermore, and 
as pointed out by the United  States , one can mathematically  demonstrate the accuracy of the 
Armington model when simulating large changes in duty rates, since applying the Armington model 
to simulate the impact of a large duty rate change yields the same resu lt as the cumulated result 
yielded by dividing that large duty rate change into many small steps and applying the Armington 
model to simulate the impact associated with each step.245 For these reasons, we do not consider 
that the Armington model is unsuitabl e for estimating the level of nullification or impairment 
concerning the anti -dumping orders at issue, regardless of whether the reduction of the 
WTO-inconsistent anti -dumping duties, from the actual 2017 duty rates to the counterfactual duty 
rates, is lar ge.246 
6.2.2.3.2   Small market shares resulting from the depressing effect of the 
WTO -inconsistent anti -dumping duties  
6.63.   China points out that many of the anti -dumping orders at issue have driven down imports 
from Chinese exporters subject to the WTO -inconsistent anti -dumping duties. China argues that it 
is virtually impossible for the Armington model to estimate anything but very small levels of 
nullification or impairment, where the 2017 market share of the Chinese exporters subject to the 
                                                
239 China's written submission, paras.  185-187. 
240 China's written submission, paras.  185 and 188 -190. 
241 China has also raised several points of criticism regarding th e data used by the United  States  when 
applying the Armington model to estimate the level of nullification or impairment concerning the anti -dumping 
orders at issue. We address relevant arguments regarding data in section 7.1 below.  
242 Economic Discussion of Technical Issues Concerning the Armington Model Used by the United  States , 
(Exhibit CHN -31 (BCI)). China also argues that the accuracy of measuring the economic effects depends on the 
position along the demand curve and whether it lies within the continuous "interior" segment of the demand 
curve. (Ibid) . However, China has not p rovided any empirical evidence in support of this argument.  
243 China's written submission, paras.  185-187. 
244 United  States ' response to Arbitrator question No. 37(a), para. 132.  
245 This method of dividing large changes into many small steps and calculating the adjustment in the 
market equilibrium associated with each small step is often referred to as the multi -step Euler method. (See D. 
Riker, Multinational Production and Employmen t in an Industry -Specific Model of Trade , Economics Working 
Paper Series (Working Paper 2018 -08-C), USITC (August 2018),  (Exhibit USA -67)). 
246 In addition, as explained in paragraph 6.42 above, the United  States  solves the Armington model 
through a numerical iterative algorithm. Unlike solving the Armington model through a linear approximation, 
the accuracy of the simulation using the Armington model is not affected by the size of the duty rate changes if 
the model is solved through numerical iteration. ( R. Hallren and D. Riker, An Introduction to Partial Equilibrium 
Modeling of Trade Policy , Economics Working Paper Series (Working Paper 2017 -07-B), USITC (July 2017), 
(Exhibit USA -15)). WT/DS471/ARB  
 
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  WTO-inconsistent anti -dumping duties is very small.247 The United  States  responds that, technically, 
the Armington model can be used as long as the 2017 market share of the Chinese exporters subject 
to the WTO -inconsistent anti -dumping duties is above 0%.248 At the same time, the United  States 
acknowledges that the Armington model cannot be used to produce reliable estimates where the 
share of US imports from the Chinese exporters subject to the  WTO-inconsistent anti-dumping duties  
is "minimal"249 or "close to zero"250, which, in turn, is the r eason the United  States proposes to use 
the formula -based approach for anti -dumping orders where the share of the value of US imports 
from the Chinese  exporters subject to the  WTO-inconsistent anti-dumping duties  over the total value 
of US imports from Chi na in 2017 is less than  1%.251 
6.64.   As explained above, due to its intrinsic features, the United  States ' proposed Armington model 
will necessarily simulate a small trade impact of reducing the WTO-inconsistent anti-dumping duties 
if the exporters subject to the se duties have a small market share in the reference period. We have 
rejected the United  States ' approach of using a 1% threshold for applying the Armington model 
because this threshold is arbitrary and is calculated using inputs that are not consistent wit h those 
used in the Armington model. Rather than using an arbitrary threshold, we consider it appropriate 
to focus our assessment on the intrinsic features of the Armington model and how such features 
interact with the particular circumstances of the anti -dumping orders at issue, in considering whether 
this model represents a reasonable methodology for estimating the level of nullification or 
impairment.  
6.65.   Although the United  States ' proposed Armington model will simulate a small trade impact of 
reducing the WTO -inconsistent anti -dumping duties where the market share in the reference period 
is small, this does not necessarily render such results unreasonable so long as this small mar ket 
share is not caused by the anti -dumping duties at issue. If the Chinese  exporters  subject to the 
WTO-inconsistent anti -dumping duties  have small 2017 market shares for reasons unrelated to the se 
duties – such as distance, language, cultural or politica l barriers – the small trade impact simulated 
by the Armington model may be considered reasonable.252 If, however, the exporters subject to the 
WTO-inconsistent anti -dumping duties have small 2017 market shares because of the depressing 
effect of these dutie s, the small trade impact simulated by the Armington model may be considered 
unreasonable because it understates the trade impact of reducing the anti -dumping duties . More 
particularly, if the imposition of the WTO-inconsistent anti-dumping duties had a si gnificant 
depressing effect on the 2017 market shares of the exporters, the reduction of these duties would 
normally be expected to have a similarly significant trade impact , all other factors being equal . This  
calls into question the re asonableness  of using the Armington model  under such circumstances since 
this model, as explained above, necessarily simulate s small trade impact s when the 2017 market 
shares are small . The re asonableness  of the estimated level of nullification or impairment simulated 
using the Armington model thus depends on the particular circumstances of the anti -dumping orders 
at issue.  
6.66.   Having reviewed the particular circumstances of the anti -dumping orders at issue, we note 
that the market shares of the Chinese exporters subject to the W TO-inconsistent anti -dumping 
duties have declined significantly from the year prior to the imposition of these duties to calendar 
year 2017. More particularly, and as illustrated by the  Figures in Annex es D-2 and D -3, the market 
shares of the Chinese expor ters subject to the WTO -inconsistent anti -dumping duties all declined 
sharply by 95.9% to 100%, for all of the anti -dumping orders at issue. This is so regardless of the 
duration of the anti -dumping order and the level of the WTO -inconsistent anti -dumping duties. 
Although the evolution of market shares is affected by different factors, for all of the anti -dumping 
orders at issue, the market shares of the Chinese exporters subject to the WTO -inconsistent anti -
dumping duties experienced a significant decline following the imposition of the duties, which 
suggests that the duties had significant depressing effects and resulted in the small 2017 market 
shares. In light of this, we do not consider it reasonable to use a calculation methodology where the 
depressed small 2017 market shares of the Chinese exporters subject to the WTO -inconsistent anti -
dumping duties will necessarily lead to small simulated trade impacts of reducing these duties, and 
thus to a small estimated level of nullification or impairment. As ex plained in the previous 
                                                
247 China's written submission, para. 136.  
248 United  States ' response to Arbitrator question No. 37(b), para. 136.  
249 United  States ' written submission, para. 45.  
250 United  States ' written submission, para. 78.  
251 United  States ' written submissi on, paras.  45 and 87.  
252 See M. Kuiper and F. van Tongeren, "Using gravity to move Armington" (2006), Paper prepared for 
the Ninth Annual Conference on Global Economic Analysis in Addis Ababa, Ethiopia.  WT/DS471/ARB  
 
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  paragraphs, if we apply the Armington model in the manner proposed by the United  States , it will 
yield exactly this outcome.  
6.67.   In light of these circumstances, we consider it necessary to adjust the United  States ' proposed 
Armington model in order to address the small market shares resulting from the depressing effect 
of the WTO -inconsistent anti -dumping duties  at issue.  
6.2.2.4   Adjustments to the United  States ' proposed Armington model  
6.68.   Above, we have determined that the United  States ' proposed Armington model requires 
certain adjustments to address the small market shares resulting from the depressing effects of the 
WTO-inconsistent anti -dumping duties. In this section, we consider possible adjustments to address 
this iss ue. Furthermore, we consider possible adjustments to reflect the counterfactual determined 
in section 5.3 above.  
6.2.2.4.1   Adjustments to address the small market shares result ing from the depressing 
effect of the WTO -inconsistent anti -dumping duties  
6.69.   As explained in section 6.2.2.3.2  above, we have determined that it is necessary to adjust 
the United  States' proposed Armington model in order to address the small market shares resulting 
from the depressing effect of the WTO -inconsistent anti -dumping duties. To address this issue, we 
proposed to the parties us ing the Armington model  in two steps:  
6.70.   As the first step, the Armington  model would be applied to the US market as it existed prior 
to the imposition of the anti -dumping orders  to simulate the impact of imposing the relevant anti -
dumping duties on the market shares of the Chinese exporters  (both the Chinese exporters subject 
to the WTO -inconsistent anti -dumping duties and the remaining Chinese exporters) , the exporters 
from the rest of the world, and the US producers. The market share s of the Chinese exporters 
simulated under the first step would then be applied to the actual 2017 total value of the US market  
in order to obtain the simulated  2017 total value of US imports from China . 
6.71.   As the second step, the Armington model would be app lied to the actual 2017 US market with 
the market shares simulated under the first step to simulate the impact of reducing the 
WTO-inconsistent anti -dumping duties from the actual duty rates to the counterfactual duty rates 
on the value of US imports from China  (both the Chinese exporters subject to the WTO -inconsistent 
anti-dumping duties and the remaining Chinese exporters), the exporters from the rest of the world, 
and the US producers .253 The value of US imports from China simulated under the second step 
corresponds to the counterfactual value of US imports from China.  
6.72.   The estimated level of nullification or impairment would be obtained by calculating the 
difference between the 2017 value of US imports from China,  simulated under the first step , and the 
counterfactual value of US imports from China,  simulated under the second step . 
6.73.   The United  States  submits that it would be legally incorrect for the Arbitrator to adjust the 
market shares to address China's arguments concerning the Armington model's inability to simulate 
the impact of anti -dumping duties that have had depressing effects on trade levels. Since the 
United  States was not obligated to comply with the DSB recommendations and rulings until the 
expiry of the reasonable period of time, the Un ited States  submits that the Arbitrator should estimate 
the impact of the WTO -inconsistent anti -dumping duties only as of this point in time, by using 
calendar year 2017 as the reference period.254 China reiterates its arguments that the Armington 
model cann ot accurately simulate the impact of large duty rate changes255, nor the impact of anti-
dumping duties  that have been in place for long periods of time and have had depressing effects on 
imports from Chinese exporters .256 
                                                
253 For a similar approach, see Decision by the Arbitrat or, US – Washing Machines (Article  22.6 – US), 
paras.  3.114 -3.119.  
254 United  States ' opening statement at the meeting of the Arbitrator, para. 61; and response to 
Arbitrator question No. 65, paras.  88-92. 
255 China's response to Arbitrator question No. 65, paras.  45-47. 
256 China's response to Arbitrator question No. 65, para. 48. China has also raised several arguments 
concerning the reliability and lack of data which it considers necessary for applying the Arm ington model to WT/DS471/ARB  
 
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  6.74.   We agree with the United  States  that o ur mandate is to determine the level of nullification or 
impairment caused by the United  States ' failure to implement the DSB recommendations and rulings 
as of the expiry of the reasonable period of time. Since the United  States did not implement the DSB 
recommendations and rulings by the expiry of the reasonable period of time, our mandate 
necessarily requires us to estimate what would have happened, had the United  States  done so.  In 
other words , we are required to rely on economic models or calculation me thodologies to simulate 
what would have happened in a hypothetical scenario where the United  States  implemented the DSB 
recommendations and rulings by the expiry of the reasonable period of time.  
6.75.   Such models or methodologies may have intrinsic features tha t render them more or less 
reasonable  depending on the specific circumstances. In such a case, our mandate requires us to 
make the necessary adjustments to the model or methodology at issue, to ensure that the simulated 
result represents a reasonable estim ation of the level of nullification or impairment. Above, we have 
determined that the United  States' proposed Armington model cannot produce a reasonable  estimate 
of the level of nullification or impairment concerning the anti -dumping orders at issue becau se the 
WTO-inconsistent anti -dumping duties have had significant depressing effects on the 2017 market 
shares of the Chinese exporters subject to these duties. To address this issue, we find it appropriate 
to apply the Armington model in two steps, in the manner described in paragraph s 6.69 through 
6.72 above, to take into account the depressing effect of the WTO -inconsistent anti -dumping duties. 
In our view, this approach will result in a reasonable estimat e of the level of nullification or 
impairment. We wish to underline that, by applying the Armington model in two steps, we do not 
move away from the principle that the level of nullification or impairment should be estimated as of 
the expiry of the reasonable period of time. We are making o ur estimat e as of that date, but we are 
simulating the 2017 market shares to reflect the imposition of the relevant anti -dumping duties 
while taking into account these duties' depressing effects, in order to address intrinsic features of 
the United  States ' proposed Armington model that would otherwise render the estimated level of 
nullification or impairment unreasonable.  
6.76.   Turning to China's arguments, we recall that we have already rejected the argument that the 
Armington model cannot simulate the impact of  large changes  in duty rates .257 We see no reason to 
address this argument differently in the context of our proposed approach to use the Armington 
model in two steps. Further, our proposed approach of using the Armington model in two steps is 
meant to addre ss the very concerns China raised regarding the Armington model's ability to 
accurately estimate the level of nullification or impairment concerning anti -dumping orders where 
the 2017 market shares of the Chinese exporters subject to the WTO -inconsistent a nti-dumping 
duties are small due to the depressing effect of these  duties.  
6.77.   For these reasons, we consider that it is appropriate to use the Armington model in two steps 
in order to  estimat e the level of nullification or impairment concerning the anti -dumpi ng orders at 
issue.  
6.2.2.4.2   Adjustments to reflect the counterfactual determined by the Arbitrator  
6.78.   As explained in section 5.3 above, we have determined a counterfactual tha t entails the 
reduction  of the anti -dumping duties that were calculated using the WTO -inconsistent WA -T 
methodology with zeroing and the WTO-inconsistent Single Rate Presumption.  More particularly, 
with respect to Coated Paper , we are using a 0.00% duty ra te as the counterfactual for the exporter 
APP-China, for the exporters that are subject to the separate duty rate, and for the exporters within 
the PRC -wide entity that are subject to the PRC -wide duty rate. With respect to OCTG , we are using 
a [[***]]% du ty rate as the counterfactual for the exporter TPCO and for the exporters that are 
subject to the separate duty rate, and we are using a 0.00% duty rate as the counterfactual for the 
exporters within the PRC -wide entity that are subject to the PRC -wide dut y rate. With respect to 
Steel Cylinders , we are using a 0.00% duty rate as the counterfactual for the exporters that are 
subject to the separate duty rate and for the exporters within the PRC -wide entity that are subject 
to the PRC -wide duty rate. With respect to Aluminum Extrusions ; Bags Diamo nd Sawblades ; 
Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; Solar Panels ; Wood Flooring ; Copper Pipe and 
Tube; Iron Pipe Fittings ; Passenger Vehicle and Light Truck Tires ; Residential Washers ; Sheet and 
Strip; Steel Flat Products ; Steel Line Pipe ; Steel Nails; Steel Pipe ; Steel Products ; Steel Standard, 
                                                
estimate the level of nullification or impairment concerning the anti -dumping orders at issue. We address 
relevant arguments regarding data in section 7.1 below.  
257 See section 6.2.2.3.1  above.  WT/DS471/ARB  
 
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  Line, and Pressure Pipe ; and Steel Wire Rod , we are using a 0.00% duty rate as the counterfactual 
for the exporters within the PRC -wide entity that are subject to the PRC -wide duty rate. We are 
maintainin g all other duty rates imposed under the anti -dumping orders at issue, without any 
modification.  
6.79.   As explained in paragraph  6.41 above, the United  States proposes an Armington model with 
four varieties of the product for each anti -dumping order: (i) variety produced in the United  States  
(𝑢𝑠); (ii)  variety imported fro m the Chinese exporters subject to WTO -inconsistent anti -dumping 
duties ( 𝑝𝑟𝑐); (iii)  variety imported from the remaining Chinese exporters ( 𝑟𝑜𝑐); and (iv)  variety 
imported from the rest of the world ( 𝑟𝑜𝑤). The variety of the product imported from the Chinese 
exporters subject to WTO -inconsistent anti -dumping duties only covers imports of the product from 
exporters within the PRC -wide entity that are subject to the WTO -inconsistent PRC -wide duty rate.258 
6.80.   To ensure that we estimate the level of nullifi cation or impairment concerning the USDOC's 
use of both the WTO-inconsistent WA-T methodology with zeroing and the WTO-inconsistent Single 
Rate Presumption , we need to adjust the United  States' proposed Armington model by creating a 
fifth variety of the pr oduct for the anti -dumping orders where we are reducing the duty rates 
calculated using the WA -T methodology with zeroing, that is Coated Paper , OCTG , and Steel 
Cylinders . More particularly, for these three orders, we will apply the Armington model with th e 
following five varieties of the product at issue: (i) variety produced in the United  States  (𝑢𝑠); (ii) 
variety imported from the Chinese exporters subject to the WTO -inconsistent WA -T duty rates (𝑤𝑎𝑡) 
(iii) variety imported from the Chinese exporter s subject to the WTO -inconsistent PRC -wide duty 
rates ( 𝑝𝑟𝑐); (iv)  variety imported from the remaining Chinese exporters ( 𝑟𝑜𝑐); and (v)  variety 
imported from the rest of the world ( 𝑟𝑜𝑤). In more technical terms, the Armington model with five 
varieties is specified by the following set of equations representing the supply and the demand of 
each of the five varieties of the product (equations 7 to 11) as well as an aggregate  product deman d 
(equation 12) and a price index (equation 13): 
                                                
258 United  States ' written submission, para. 63. Despite acknowledging that it should estimate the level 
of nullification o r impairment concerning the USDOC's use of the WTO -inconsistent WA -T methodology with 
zeroing in at least certain anti -dumping orders, the United  States  does not include a fifth variety of the product 
imported from the Chinese exporters subject to the WTO -inconsistent WA -T duty rates. (United  States ' written 
submission, paras.  104-107). As explained in section s 5.2.1.2  and 5.2.1.3  above, the United  States  argues 
that the level of nullification or impairment concerning the USDOC's use of the WA -T methodology with zeroing 
in OCTG and Steel Cylinders  should be estimated to be zero. Fo r Coated Paper , the United  States  calculates the 
level of nullification or impairment concerning the USDOC's use of the WA -T methodology with zeroing by 
applying the four -variety Armington model. (United  States ' written submission, paras.  102-109).  WT/DS471/ARB  
 
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  US domestic production  market 
equilibrium : 𝑎𝑢𝑠 (𝑝𝑢𝑠)𝜀𝑢𝑠=𝑄 𝑏𝑢𝑠𝜎(𝑝𝑢𝑠
𝑃)−𝜎
 (7) 
US imports from Chinese exporters 
subject to WTO -inconsistent WA -T 
duty rates market equilibrium :  𝑎𝑤𝑎𝑡 (𝑝𝑤𝑎𝑡
𝑡𝑤𝑎𝑡)𝜀𝑤𝑎𝑡
=𝑄 𝑏𝑤𝑎𝑡𝜎(𝑝𝑤𝑎𝑡
𝑃)−𝜎
 (8) 
US imports from Chinese exporters 
subject to WTO -inconsistent PRC -
wide duty rates market equilibrium :  𝑎𝑝𝑟𝑐 (𝑝𝑝𝑟𝑐
𝑡𝑝𝑟𝑐)𝜀𝑝𝑟𝑐
=𝑄 𝑏𝑝𝑟𝑐𝜎(𝑝𝑝𝑟𝑐
𝑃)−𝜎
 (9) 
US imports from the rest of China  
market equilibrium : 𝑎𝑟𝑜𝑐 (𝑝𝑟𝑜𝑐)𝜀𝑟𝑜𝑐=𝑄 𝑏𝑟𝑜𝑐𝜎(𝑝𝑟𝑜𝑐
𝑃)−𝜎
 (10) 
US imports from the rest of the world  
market equilibrium :  𝑎𝑟𝑜𝑤 (𝑝𝑟𝑜𝑤)𝜀𝑟𝑜𝑤=𝑄 𝑏𝑟𝑜𝑤𝜎(𝑝𝑟𝑜𝑤
𝑃)−𝜎
 (11) 
US aggregate market equilibrium:  𝑄=𝑌0𝑃θ (12) 
US price index  𝑃=(𝑏𝑢𝑠𝜎𝑝𝑢𝑠1−𝜎+𝑏𝑤𝑎𝑡𝜎𝑝𝑤𝑎𝑡1−𝜎+𝑏𝑝𝑟𝑐𝜎𝑝𝑝𝑟𝑐1−𝜎 
+𝑏𝑟𝑜𝑐𝜎𝑝𝑟𝑜𝑐1−𝜎+𝑏𝑟𝑜𝑤𝜎𝑝𝑟𝑜𝑤1−𝜎)1
1−𝜎 (13) 
 
6.2.2.5   Conclusion  
6.81.   For the reasons explained above, we consider that it is appropriate to apply the Armington 
model in two steps for the anti -dumping orders at issue. For 22 of the anti -dumping orders at 
issue259, we will apply the Armington model with four varietie s of the product, and for the remaining 
three  anti-dumping orders at issue260, we will apply the Armington model with five varieties of the 
product. We now turn to determine how to implement this calculation methodology with respect to 
each of the anti -dumpi ng orders at issue.  
7  ARBITRATOR'S IMPLEMEN TATION OF THE CHOSEN  METHODOLOGY  
7.1.  Above, we have determined that it is appropriate to apply the Armington model  in two steps, 
with either four or five varieties of the product, in order to estimate the level of nulli fication or 
impairment concerning the anti -dumping orders at issue.  
7.2.  As the first step, we will apply the Armington model to the US market as it existed prior to the 
imposition of the anti -dumping orders  in order to simulate, for each anti -dumping order, the impact 
of imposing the relevant anti -dumping duties on the market shares of the Chinese exporters (both 
the Chinese exporters subject to the WTO -inconsistent anti -dumping duties and the remaining 
Chinese exporters), the exporters from the rest of the world, and the US producers. We will then 
apply the market shares of the Chinese exporters simulated under the first step to the actual 2017 
total value of the US market in order to obtain the simulated 20 17 total value of US imports from 
China.  
7.3.  As the second step, we will apply the Armington model to the actual 2017 US market with the 
market shares simulated under the first step in order to simulate, for each anti -dumping order, the 
impact of reducing the WTO-inconsistent anti -dumping duties from the actual duty rates to the 
counterfactual duty rates on the value of US imports from China (both the Chinese exporters subject 
to the WTO -inconsistent anti -dumping duties and the remaining Chinese exporters), the  exporters 
                                                
259 Alumi num Extrusions ; Bags; Diamond Sawblades ; Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Washers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . 
260 Coated Paper ; OCTG ; and Steel Cylinders . WT/DS471/ARB  
 
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  from the rest of the world, and the US producers.261 The value of US imports from China simulated 
under the second step corresponds to the counterfactual value of US imports from China.  
7.4.  We will then estimate the level of nullification or impairmen t concerning the anti -dumping 
orders at issue by calculating, for each order, the difference between the 2017 value of US imports 
from China, simulated under the first step, and the counterfactual value of US imports from China, 
simulated under the second step. 
7.5.  For the 22 anti -dumping orders  that concern only the USDOC's use of the WTO -inconsistent 
Single Rate Presumption262, we will implement the Armington model with four varieties of the 
product: (i) variety produced in the United  States  (𝑢𝑠); (ii)  variet y imported from the Chinese 
exporters subject to the WTO -inconsistent PRC -wide duty rates ( 𝑝𝑟𝑐); (iii)  variety imported from the 
remaining Chinese exporters ( 𝑟𝑜𝑐); and (iv)  variety imported from the rest of the world ( 𝑟𝑜𝑤). For 
the three anti -dump ing orders that concern the USDOC's use of the WTO -inconsistent WA -T 
methodology with zeroing as well as the WTO -inconsistent Single Rate Presumption263, we will 
implement the Armington model with five varieties of the product: (i) variety produced in the 
United States  (𝑢𝑠); (ii) variety imported from the Chinese exporters subject to the WTO -inconsistent 
WA-T duty rates (𝑤𝑎𝑡); (iii) variety imported from the Chinese exporters subject to the 
WTO-inconsistent PRC -wide duty rates ( 𝑝𝑟𝑐); (iv) variety imported from the remaining Chinese 
exporters ( 𝑟𝑜𝑐); and (v)  variety imported from the rest of the world ( 𝑟𝑜𝑤). 
7.6.  Below, we determine the relevant data inputs required to implement the Armington model  in 
two steps in the manner described a bove. Then, we provide the results for the anti -dumping orders 
at issue. Finally, we provide our  estimate d level of nullification or impairment  concerning the se 
anti-dumping orders.  
7.1  Data inputs  
7.7.  In order to implement the Armington model under the first step, we need information on  the 
total value of the US market  in the year prior to the imposition of the anti -dumping order s at issue  
and the corresponding market shares of the US domestic producers, the Chinese exporters subject 
to the WTO-inconsistent anti -dumping duties, the remaining Chinese exporters, and the exporters 
from the rest of the world. We also need  the total demand elasticity, the elasticity of substitution, 
and the supply elasticities for US domestic shipments and the different sources of US im ports.  Finally, 
we need information on the actual 2017 duty rates in order to simulate the impact of imposing the 
anti-dumping duties.  
7.8.  The implementation of the Armington model under the first step will provide us with the 
simulated market shares following  the imposition of the relevant anti -dumping duties, which we, in 
turn, use as data inputs for the implementation of the Armington model under the second step . For 
the second step, we will use the same elasticities used in the first step. The only new info rmation 
required to implement the Armington model under the second step concerns the total value of the 
US market in 2017 as well as the counterfactual duty rates for the WTO -inconsistent anti -dumping 
duties.  
7.9.  Below, we explain how we have selected each of the data inputs described above. At the outset, 
we note that most of the required data inputs were not directly available, and we were required to 
rely on the best information available. In choosing what information to rely on, we have taken into 
account b oth parties' views as well as the need to rely on "credible, factual, and verifiable 
information"264, while bearing in mind practical difficulties and limits.  
                                                
261 For a similar approach, see Decision by the Arbitrator, US – Washing M achines (Article  22.6 – US), 
paras.  3.114 -3.119.  
262 Aluminum Extrusions ; Bags; Diamond Sawblades ; Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Washers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . 
263 Coated Paper ; OCTG ; and Steel Cylinders . 
264 Decision by the Arbitrator , US – 1916 Act (EC) (Article  22.6 – US), para. 5.63. See also Decisions by 
the Arbitrators, US – COOL (Article  22.6 – US), para. 4.5; US – Tuna II (Mexico) (Article  22.6 – US), para. 5.2; 
and US – Washing Machines (Article  22.6 – US), para. 1.16.  WT/DS471/ARB  
 
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  7.1.1   Total market value and market shares  
7.10.   For the 22 anti -dumping orders that only concern the USDOC's u se of the WTO -inconsistent 
Single Rate Presumption265, the total value  of the US market  (𝑌) is composed of the value of US 
shipments ( 𝑋𝑢𝑠); the value of US imports from the Chinese exporters subject to the WTO -inconsistent 
PRC-wide duty rates (𝑋𝑝𝑟𝑐); the value of  US imports from the remaining Chinese exporters ( 𝑋𝑟𝑜𝑐), 
and the value of  US imports from exporters from the rest of the world ( 𝑋𝑟𝑜𝑤): 
Total value of the US market : 
(four variety -market)  𝑌=𝑋𝑢𝑠+𝑋𝑝𝑟𝑐+𝑋𝑟𝑜𝑐+𝑋𝑟𝑜𝑤 (14) 
 
7.11.   The market share of each product  variety is determined by dividing the value of each variety 
by the total value of the US market:  
Market shares:  𝑚𝑢𝑠=𝑋𝑢𝑠
𝑌 𝑚𝑝𝑟𝑐=𝑋𝑝𝑟𝑐
𝑌 
(15) 
𝑚𝑟𝑜𝑐=𝑋𝑟𝑜𝑐
𝑌 𝑚𝑟𝑜𝑤 =𝑋𝑟𝑜𝑤
𝑌 
 
7.12.   For the three anti -dumping orders  that concern the USDOC's use of the WTO -inconsistent 
WA-T methodology with zeroing as well as the WTO -inconsistent Single Rate Presumption266, the 
total value of the US market  (𝑌) is composed of the value of US shipments ( 𝑋𝑢𝑠); the value of US 
imports from the Chinese exporters subject to the WTO -inconsistent WA -T duty rates (𝑋𝑤𝑎𝑡); the 
value of  US imports from the Chinese exporters subject to the WTO -inconsistent PRC -wide duty 
rates (𝑋𝑝𝑟𝑐); the value of US imports from the remaining Chi nese exporters ( 𝑋𝑟𝑜𝑐), and the value of 
US imports from exporters from the rest of the world ( 𝑋𝑟𝑜𝑤): 
Total value of the US market : 
(five variety -market)  𝑌=𝑋𝑢𝑠+𝑋𝑤𝑎𝑡 +𝑋𝑝𝑟𝑐+𝑋𝑟𝑜𝑐+𝑋𝑟𝑜𝑤 (16) 
 
7.13.   Again, t he market share of each product  variety is determined by dividing the value of each 
variety by the total value of the US market:  
Market shares:  𝑚𝑢𝑠=𝑋𝑢𝑠
𝑌 𝑚𝑤𝑎𝑡 =𝑋𝑤𝑎𝑡
𝑌 
(17) 𝑚𝑝𝑟𝑐=𝑋𝑝𝑟𝑐
𝑌 𝑚𝑟𝑜𝑐=𝑋𝑟𝑜𝑐
𝑌 
𝑚𝑟𝑜𝑤 =𝑋𝑟𝑜𝑤
𝑌  
7.1.1.1   Value of US shipments  
7.14.   The value of US shipments of a given product corresponds to the value of US domestic 
production of that product sold in the US market. To implement the Armington model under the first 
step, we need data on the value of US shipments in the year pr ior to the imposition of the 
anti-dumping orders  in order to construct the total value of the US market and the market shares  
in that year. To implement the Armington model under the second step, we need data on the value 
of US shipments in 2017 in order t o construct the total value of the US market in 2017. Below, we 
explain how we obtained each of these data inputs.  
7.15.   With respect to the value of US shipment s in the year prior to the imposition of the 
anti-dumping  orders , the United  States  relies on the pub lic version of the United States  
International Trade Commission 's (USITC) investigation reports, industry -specific survey data  by the 
                                                
265 Aluminum Extrusions ; Bags; Diamond Sawblades ; Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Washers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . 
266 Coated Paper ; OCTG ; and Steel Cylinders . WT/DS471/ARB  
 
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  US Census Bureau , data from the USITC DataWeb, and data provided by private companies  to 
compute the value of US shipments .267 The United  States makes further assumptions to derive the 
value of US shipments for the anti -dumping orders  at issue for which there is no information available 
for the relevant years.268 China rejects the data provided by the United  States  on the grounds that 
the data sources are questionable and that the assumptions made by the United  States are arbitrary 
and not verifiable .269 China generally proposes to use information available in USITC investigation 
reports  where such information is available270, but proposes to use information by the Association 
of Home Appliance Manufacturers  (AHAM) to infer the value of US shipments for one anti -dumping 
order, Residential Washers , because this information is confidential and not available in the relevant 
USITC r eport.271 
7.16.   We note that data on the value of US shipments often needs to be inferred  because such 
statistics are often not directly available, especially at the product -specific level. Having reviewed 
the parties' proposed data, we consider it appropriate to use the data reported in the publicly 
available USITC investigation reports for the 20 anti -dumping orders at issue where such da ta is 
available.272 For the remaining five anti -dumping orders at issue, the data on US shipments reported 
in the USITC reports is not available because the data is confidential.273 For four of these five 
anti-dumping orders, the only data on record for the va lue of US shipments is that provided by  the 
United  States.274 Although China criticizes this data for not being publicly available or verifiable275, 
China has not provided evidence that this data is unreliable, nor suggested alternative data. For this 
reason, we consider the data provided by the United  States  to be the best available , and we therefore 
use the values of US shipments estimated by the United  States on the basis of data from the relevant 
USITC investigation reports, annual surveys of manufacturers by the US Census Bureau, data from 
USITC DataWeb, and data from private companies .276 For the remaining anti -dumping order, 
                                                
267 Calculations on US Shipments, (Exhibit USA -58). 
268 United  States ' response to Arbit rator question No. 31(a), paras.  122-123. 
269 China's written submission, paras.  182-183. 
270 China's comments on the United  States ' response to Arbitrator question No. 65, paras.  77-78. China 
also proposes to apply its DID tabular approach for the anti-dumping orders  for which there is no publicly 
available information on US shipments in the USITC investigation reports. (See Data Required for 
Implementing the Armington Model Under Two Steps,  (Exhibit CHN -55 (BCI))).  
271 For Residential Washers , China proposes to estimate the value of US shipments by subtracting the 
value of US imports from the total value of the US market provided by AHAM. (China's comments on the 
United  States' respo nse to Arbitrator question No. 65, para. 80; and Supporting Documents for Data Required 
for Implementing the Armington Model Under Two Steps,  (Exhibit CHN -56 (BCI))).  
272 Aluminum Extrusions ; Bags; Coated Paper ; Furniture ; OCTG ; OTR Tires ; PET Film ; Shrimp ; Solar 
Panels ; Wood Flooring ; Copper Pipe and Tube ; Passenger Vehicle and Light Truck Tires ; Sheet and Strip ; Steel 
Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel Products ; Steel Standard, Line, and Pressure Pipe ; 
and Steel Wire Rod . (See An nex E -1, which reports the US shipment values in the year prior to the imposition 
of the anti -dumping orders and the data sources used to estimate these values). For six of these 20 anti -
dumping orders, namely OCTG ; PET Film ; Shrimp ; Sheet and Strip ; Steel Line Pipe ; and Steel Wire Rod , the 
USITC investigation reports do not provide data for the full calendar year but only for the first six or nine 
months of the year. In such cases, we annualize the relevant data to estimate the annual value of US 
shipments  by dividing the data by the corresponding number of months and multiplying the result by 12 (i.e. 
the number of months in a year). For one anti -dumping order, Solar Panels , the data from the USITC 
investigation report concerns solar modules, whereas the a nti-dumping order covers solar cells whether or not 
assembled into modules. We note the USITC's explanation that the use of US domestic shipments data 
concerning only solar modules is meant to avoid double counting, since many domestically produced solar c ells 
are used in the production of solar modules by the same firm.  (See Calculations on US Shipments,  (Exhibit 
USA-58); and USITC Publication 4360). We further note that neither party has proposed alternative data. For 
these reasons, we consider the data from the USITC investigation report on Solar Panels  to be the best 
available, and use this data to det ermine the value of US shipments in the year prior to the imposition of the 
anti-dumping order. For one anti -dumping order , Steel Wire Rod , China argues that there is no information 
available on the value of US shipments in the year prior to the imposition  of the anti -dumping order . 
(Supporting Documents for Data Required for Implementing the Armington Model Under Two Steps,  (Exhibit 
CHN-56 (BCI))). However, we note that USITC publication 4509 does provide information on the value of US 
shipments for Januar y to June 2014, the year prior to the imposition of the anti -dumping order . (See USITC 
publication 4509 ). As mentioned above, we annualize this data to estimate the total value of US shipments in 
the year prior to the imposition of the anti -dumping order.  
273 Diamond Sawblades ; Ribbons ; Steel Cylinders ; Iron Pipe Fittings ; and Residential Washers . 
274 Diamond Sawblades ; Ribbons ; Steel Cylinders ; and Iron Pipe Fittings . 
275 China's written submission, paras.  182-183. 
276 More particularly, for Diamond Sawblades , we use the value of US shipments provided by the 
United  States based on adjusted data from the relevant USITC investigation report. For Ribbons , we use the 
value of US shipments provided by the United  States  based on adjusted data from the US Census Bureau's 
Annual Survey of Manufacturers and the USITC DataWeb. For Steel Cylinders , we use the value of US WT/DS471/ARB  
 
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  Residential Washers , we estimate  the value of US shipments by subtracting the value of US imports 
from Chinese exporters and exporters  from the rest of the world from the total value of the US 
market.277 The total value of the US market of Residential Washers  is obtained  from data compiled 
by AHAM278, and the value of US imports is obtained from data compiled by US Customs and the US 
Census Bureau.279 
7.17.   With respect to the value of US shipment s in 2017 , the United  States  also relies on the 
public version of the USITC investigation reports280, industry -specific survey data  by the US Census 
Bureau, data from the USITC DataWeb , data provided by  other US agencies, and  data provided by 
private companies or industry associations .281 China rejects the data provided by the United  States  
on the grounds that the data sources are questionable and that the assumptions made by the 
United  States are arbitrar y and not verifiable.282 China has not submitted any data from 2017 and 
instead proposes  to use the values of the US market, including the value of US shipments, in the 
year prior to the imposition of the anti -dumping orders  with adjustments for inflation by  applying 
the United  States ' gross domestic product ( GDP) deflator .283 
7.18.   In our view, China's suggestion to use inflation -adjusted values from the year prior to the 
imposition of the anti -dumping orders , rather than 2017 values, is not reasonable or objective.  We 
recall that our mandate is to determine the level of nullification or impairment caused by the 
United  States' failure to implement the DSB recommendations and rulings by the expiry of the 
reasonable period of time. We also recall that the parties agree d to use calendar year 2017 as the 
reference period.284 Thus, we consider it appropriate to use the actual 2017 values of the US market, 
including the actual 2017 value of US shipments, when applying the Armington model to simulate 
the impact of reducing the  WTO-inconsistent anti -dumping duties from the actual 2017 duty rates 
to the counterfactual duty rates. If we were to use the values of the US market in the year prior to 
the imposition of the anti -dumping orders , inflation -adjusted or not, we would be sim ulating the 
impact of reducing the WTO -inconsistent anti -dumping duties at a point in time where these duties 
had not yet been imposed. In our view, this would not be in accordance with our mandate.  
7.19.   Having determined that it is not appropriate to use infla tion-adjusted values from the year 
prior to the imposition of the anti -dumping orders , as proposed by China, we note that the only data 
on record for the value of US shipments in 2017 is that provided by the United  States.285 Although 
China criticizes this data for not being publicly available or verifiable286, China has not provided 
evidence that this data is unreliable, nor suggested alternative data. For this reason, we consider 
the data provided by the United  States  to be the best available. We theref ore use the 2017 value s 
                                                
shipments provided by the United  States  based on data from the annual report by the only US producer, 
Trimas Corp oration . For Iron Pipe Fittings , we use the v alue of US shipments provided by the United  States  
based on data from the US Census Bureau's Annual Survey of Manufacturers  and the USITC DataWeb . (See 
Annex E -1, which reports the US shipment values in the year prior to the imposition of the anti -dumping orders 
and the data sources used to estimate these values ). 
277 See Annex E -1, which reports the US shipment values in the year prior to the imposition of the anti -
dumping orders and the data sources used to estimate these values.  
278 Supporting Documents for Data Required for Implementing the Armington Model Under Two Steps, 
(Exhibit CHN -56 (BCI)).  
279 In paragraph 7.22 below, we describe how we estimate the value of US imports from China in the 
year prior to the imposition of the anti -dumping orders using data from US Customs . In paragraph  7.32 below, 
we describe how we estimate the value of US imports from the rest of the world in the year prior to the 
imposition of the anti -dumping orders using data from the US Census Bureau.  
280 Data on the 2017 value of US shipments is not directl y available in USITC investigation reports for 
some anti -dumping orders, and for these orders the United  States applies assumptions based on data from the 
USITC investigation reports to derive the 2017 value of US shipments. ( Calculations on US Shipments,  (Exhibit 
USA-58)). 
281 Calculations on US Shipments, (Exhibit USA -58). 
282 China's written submission, paras.  182-183. 
283 China's response to Arbitrator question No. 65, paras.  53-55; and comments on the United  States ' 
response to Arbitrator question No. 65, pa ra. 86; Data Required for Implementing the Armington Model Under 
Two Steps, (Exhibit CHN -55 (BCI)); and Supporting Documents for Data Required for Implementing the 
Armington Model Under Two Steps,  (Exhibit CHN -56 (BCI)). For Residential Washers , China subm its an 
estimate of the 2017 total market value based on data from AHAM.  
284 See section 4 above.  
285 Calculations on US Shipments, (Exhibit USA -58). 
286 China's written sub mission, paras.  182-183. WT/DS471/ARB  
 
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  of US shipments provided by the United  States for all anti -dumping orders at issue287, except 
Residential Washer s. To ensure consistency, for Residential Washer s, we use the same data source 
that we used to construct the value of US s hipments in the year prior to the imposition of the 
anti-dumping orders , by subtracting the 2017 value of US imports from Chinese exporters and 
exporters from the rest of the world , based on data from US Customs and the US Census Bureau288, 
from the total 2017 value of the US market , based on data  from AHAM .289 
7.1.1.2   Value of US imports from China  
7.20.   To implement the Armington model under the first step, we need data on the value of 
US imports from China in the year prior to the imposition of the anti -dumping orders  in order to 
construct the total value of the US market and the market shares in that year. To implement the 
Armington model under the second step, we need data on the value of US imports from China in 
2017 in order to construct the total value of the US marke t in 2017. Below, we explain how we 
obtained each of these data inputs.  
7.21.   With respect to the value of US imports from China in the year prior to the imposition 
of the anti -dumping orders , the United  States  points out that US Customs does not track the 
value  of imports  subject to anti -dumping duties in years before the duties are impose d. The 
United  States therefore relies on aggregate d data on US imports from China  obtained from the US 
Census Bureau  and applies  the reference HTS codes used by US Customs to identify the scope of 
products  that may be subject to anti -dumping duties .290 China proposes to use the value of US 
imports from China in the year prior to the imposition of the anti -dumping orders  published in the 
relevant USITC investigation reports.291 When such information is not available for confidential ity 
reasons , China proposes to use company -specific trade data compiled by US Customs and aggregate  
this data to determine  the value of US imports from China .292 
7.22.   For consistency, we follow the same approach as we followed to obtain the value of US 
shipments and rely on the relevant USITC investigation reports to retrieve information for nine 
anti-dumping orders where such information is available.293 For the remain ing 16 anti-dumping 
                                                
287 More particularly, for 13 anti -dumping orders, Aluminum Extrusions ; Bags; Coated Paper ; Diamond 
Sawblades ; Furniture ; OTR Tires ; PET Film ; Wood Flooring ; Copper Pipe and Tube ; Passenger Vehicle and Light 
Truck Tires ; Steel Flat Products ; Steel Pipe ; and Steel Standard, Line, and Pressure Pipe , we use the value of 
US shipments provided by the United  States based on adjusted data for 2017 or earlier years from the relevant 
USITC investigation report s. For three anti -dumping or ders, OCTG ; Steel Cylinders ; and Steel Line Pipe , we use 
the value of US shipments provided by the United  States  based on data from private companies. For three 
anti-dumping orders, Ribbons ; Iron Pipe Fittings ; and Steel Nails , we use the value of US shipm ents provided 
by the United  States  based on adjusted data from the US Census Bureau's Annual Survey of Manufacturers. 
For th ree anti -dumping orders, Sheet and Strip ; Steel Products ; and Steel Wire Rod , we use the value of US 
shipments provided by the Unite d States  based on data from the USITC DataWeb and the American Iron and 
Steel Institute. For Shrimp , we use the value of US shipments provided by the United  States  based on data 
from the National Oceanic and Atmospheric Administration. For Solar Panels , we use the value of US shipments 
provided by the United  States  based on price and production quantity data from the US Department of Energy 
and the International Energy Agency. (See Annex E -8, which reports the US shipment values in 2017 and the 
data sources  used to estimate these values).  
288 In paragraph 7.29 below, we describe how we estimate the value of US imports from China in 2017 
using data from US Customs . In paragraph 7.34 below, we describe how we estimate the value of US imports 
from the rest of the world in 2017 using data from the US Census Bureau.  
289 See Annex E -8, which  reports the values of US shipments in 2017 and the data sources used to 
estimate these values.  
290 Table of US imports from China, World, and Rest of the World in Selected Years, (Exhibit USA -57). 
291 China's comments on the United  States ' response to Arbitra tor question No. 65, paras.  77-78. We 
note that China only uses the trade data reported in the USITC investigation report when the latter also 
provides information on US shipments.  
292 China's communication of 13  June 2019, pp. 2-3; Data Required for Implementing the Armington 
Model Under Two Steps,  (Exhibit CHN -55 (BCI)); and Table of US imports from China, World, and Rest of the 
World in Selected Years, (Exhibit USA -57). China initially proposed to use data on US imports from China from 
the US Census  Bureau . (Table of US imports from China, World, and Rest of the World in Selected Years, 
(Exhibit USA -57)). 
293 Aluminum Extrusions ; Coated Paper ; OTR Tires ; Wood Flooring ; Copper Pipe and Tube ; Passenger 
Vehicle and Light Truck Tires ; Steel Flat Products ; Steel Pipe ; and Steel Standard, Line and Pressure Pipe . (See 
Annex E -1, which reports the values of US imports from China in the year prior to the imposition of the anti -
dumping orders and the data sources used to estimate these values ). WT/DS471/ARB  
 
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  orders294, the information on the value of US imports from China is not available in  the USITC reports  
for the full calendar year or not available at all for confidentiality reasons . Turning to the alternative 
data sources proposed by the parties, we note that the United  States ' proposed import data from 
the US Census Bureau is aggregated using the HTS codes used by US Customs to identify the scope 
of products  that may be subject to anti -dumping duties.295 As explained by the United  States , this 
data might overestimate the value of US imports from China  since some of the  imported products  
may not be the type of product s actually  subject to anti -dumping duties.296 We further note that , 
while the United  States  initially explained t hat it did not have access to company -specific trade data 
on US imports from China  for the year prior to the imposition of anti-dumping orders  at issue297, it 
has subsequently provided confidential company -specific trade data  compiled by US Customs298, and 
China proposes to use this data.299 We also consider this company -specific information to be the 
best available, and aggregate this data to determine the value of US imports from China whenever 
the relevant USITC investigation reports do not provide the necessa ry data .300 
7.23.   To implement the first step, we further need to distinguish between  the value of US imports 
from the Chinese exporters subject to the WTO -inconsistent anti -dumping duties  and the value of 
US imports from the remaining Chinese exporters . For the 2 2 anti -dumping orders  that concern only 
the USDOC's use of the WTO -inconsistent Single Rate Presumption301, we therefore need to 
distinguish between the value of US imports from the Chinese exporters subject to the 
WTO-inconsistent PRC -wide duty rates and the value of US imports from the remaining Chinese 
exporters. For the three anti -dumping orders that concern the USDOC's use of the WTO -inconsistent 
WA-T methodology with zeroing as well as the WTO -inconsistent Single Rate Presumption302, we 
need to distingu ish between the value of US imports from the Chinese exporters subject to the 
WTO-inconsistent WA -T duty rates, the value of US imports from the Chinese exporters subject to 
the WTO -inconsistent PRC -wide duty rates, and the value of US imports from the rem aining Chinese 
exporters.  
7.24.   To determine the value of US imports from the Chinese exporters subject to the 
WTO-inconsistent PRC -wide duty rates  for all of the anti -dumping orders at issue, we apply the 
maximum share covered by the PRC-wide entity during the investigation period to the total value of 
US imports from China in the year prior to the imposition of the anti -dumping orders . This maximum 
share is calculated as the maximum share of the PRC -wide entity over total US imports from China 
during the period  of investigation . This maximum share will necessarily be an approximation because  
                                                
294 Bags; Diamond Sa wblades ; Furniture ; OCTG ; PET Film ; Ribbons ; Shrimp ; Solar Panels ; Steel 
Cylinders ; Iron Pipe Fittings ; Residential Washers ; Sheet and Strip ; Steel Line Pipe ; Steel Nails ; Steel 
Products ; and Steel Wire Rod . 
295 Table of US imports from China, World, and Res t of the World in Selected Years, (Exhibit USA -57). 
296 United  States ' response to Arbitrator question No. 71(a), para. 142.  
297 United  States ' response to Arbitrator question No. 39(b), para. 152.  
298 See Excel File with Import Data in the Year Preceding the Im position of Anti -Dumping Duties, 
(Exhibit USA -94 (BCI)).  
299 China's communication of 13  June 2019, p. 3. For Solar Panels , China initially suggested that the 
USITC investigation report contained publicly available information regarding the value of US imports from 
China and provided such data in Exhibit CHN -55 (BCI). China subsequently indicated that it had made an 
"important typographical error" in Exhibit CHN -55 (BCI). (China's communication of 13  June 2019, p. 3). 
Although China did not specify the n ature of its "important typographical error", it is clear from the USITC 
investigation report on Solar Panels  that it does not contain publicly available information on the value of 
imports of solar cells from China, only the value of imports of solar modu les from China. ( Supporting 
Documents for Data Required for Implementing the Armington Model Under Two Steps,  (Exhibit CHN -56 
(BCI))). The data proposed by China, in turn, reflects the value reported by the USITC for solar modules, not 
solar cells. It is n ot uncommon for solar cells to be imported as such, for assembly into solar modules in the 
United  States , and we therefore do not believe it would be appropriate to use the data reported for solar 
modules in the USITC investigation report and in Exhibit CH N-55 (BCI). Seeing as the data on the value of 
imports of solar cells from China is not available in the USITC investigation report, we instead aggregate the 
confidential company -specific trade data on US imports from China compiled by US Customs . (Excel F ile with 
Import Data in the Year Preceding the Imposition of Anti -Dumping Duties,  (Exhibit USA -94 (BCI))).  
300 See Annex E -1, which reports the values of US imports from China in the year prior to the imposition 
of the anti -dumping orders and the data source s used to estimate these values.  
301 Aluminum Extrusions ; Bags; Diamond Sawblades ; Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Wa shers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . 
302 Coated Paper ; OCTG ; and Steel Cylinders . WT/DS471/ARB  
 
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  US Customs does not track the value of imports  subject to anti -dumping duties before such duties 
are actually imposed .303 
7.25.   The United  States  has provided approximations of the maximum share of the PRC -wide entity 
for all anti -dumping orders at issue.304 More particularly, for each anti -dumping order, the 
United  States approximates the total value of imports from China during the period of investigation 
based on aggregated USITC Da taWeb monthly trade data for the HTS codes used by the USDOC in 
the investigation. Using company -specific trade data from the period of investigation, reported by 
the exporters themselves, the United  States  subtracts the value of US imports from exporters 
outside the PRC -wide entity from the approximated total value of imports from China, and uses the 
remaining value to calculate the maximum share of the PRC -wide entity.305 For 19 of the 
anti-dumping orders at issue306, China does not object to the maximum shar e of the PRC -wide entity 
approximated by the United  States307, and we also consider it reasonable to use this data.308 For the 
remaining six anti -dumping orders at issue309, the United  States  estimates the maximum share of 
the PRC -wide entity during the period o f investigation to be [[***]]%.310 According to the 
United  States, this is because  the combined shares calculated for exporters outside the PRC -wide 
entity  exceed [[***]]% of US imports from China during the period of investigation.311 China objects 
to the use of a [[***]]% maximum share for these six anti -dumping orders, and instead proposes 
to replace the [[***]]% maximum share with the average maximum share of the PRC -wide entity 
for the remaining anti -dumping orders.312 We are not con vinced of the accuracy of the United  States ' 
approximated [[***]]% maximum shares for the six anti -dumping orders, nor of the United  States ' 
explanation thereof. More particularly, an analysis of company -specific trade data on US imports 
                                                
303 United  States ' response to Arbitrator question No. 71(a), para. 142.  
304 Calculated Maximum Share Covered by the PRC -Wide Entity, (Exhibit USA -54 (BCI)).  
305 See United  States ' response to Arbitrator question No. 61, paras.  46-48; and Calculated Maximum 
Share Covered by the PRC -Wide Entity,  (Exhib it USA -54 (BCI)). We note that Exhibit USA -54 (BCI) states that 
it contains the maximum share of the cooperating as well as the non -cooperating Chinese exporters within the 
PRC-wide entity. We further note that the United  States has provided additional exh ibits setting out its 
approach for isolating the share of the PRC -wide entity representing only the cooperating Chinese exporters 
within the PRC -wide entity, and has suggested that Exhibit USA -54 (BCI), to some extent, excludes the shares 
of at least certa in non -cooperating exporters within the PRC -wide entity. (United  States ' response to Arbitrator 
question No. 61, para. 48; and communication of 11  June 2019, pp.  1-2; Calculated Maximum Share Covered 
by the PRC -Wide Entity,  (Exhibit USA -56 (BCI)); and Approach for Estimating the Maximum Share of the 
PRC-Wide Entity,  (Exhibit USA -86)). In its comments on the United  States ' explanations, China requests that 
Exhibits USA -56 (BCI) and USA -86 be "ignored" and that "only the percentages set forth in Exhibit USA -54 
should be utilized to calculate the PRC -entity share". (China's communication of 13  June 2019, p.  4). We recall 
that we have rejected the United  States' proposed counterfactual of distinguishing between cooperating and 
non-cooperating Chinese exporters w ithin the PRC -wide entity and reducing the WTO -inconsistent PRC -wide 
duty rates only for the cooperating Chinese exporters. Instead we have determined that the WTO -inconsistent 
PRC-wide duty rates should be reduced for all Chinese exporters within the PRC -wide entity. Bearing this, as 
well as China's comments, in mind, we use only the maximum shares of the PRC -wide entity set forth in 
Exhibit USA -54 (BCI).  
306 Aluminum Extrusions ; Bags; Coated Paper ; OCTG ; OTR Tires ; PET Film ; Solar Panels ; Wood 
Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck Tires ; Sheet and Strip ; 
Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel Products ; Steel Standard, Line, and Pressure 
Pipe; and Steel Wire Rod . (China's communication of 13  June 2019, p.  4). We note that China submits that 
Exhibit USA -54 (BCI) does not contain information concerning Aluminum Extrusions , and that the Arbitrator 
should therefore use the average of the maximum shares of the PRC -wide entity pr ovided by the United  States  
for the remaining anti -dumping orders, calculated by China to be 44%. We further note that while Exhibit 
USA-54 (BCI) does not contain the maximum share of the PRC -wide entity for Aluminum Extrusions , the 
United  States has expla ined that the maximum share of the PRC -wide entity is [[ ***]]% for Aluminum 
Extrusions . (United  States' response to Arbitrator question No. 62, para. 70). Generally, China does not object 
to the use of the maximum shares of the PRC -wide entity provided by the United  States, where such shares 
are above [[***]]%. (China's comments on the United  States ' response to Arbitrator question No. 61, 
paras.  40-41; and communication of 13  June 2019, p.  4). We therefore understand China's comment regarding 
Aluminum Extr usions  to be an inadvertent error, and consider it appropriate to use [[ ***]]% as the maximum 
share of the PRC -wide entity in Aluminum Extrusions . 
307 China's comments on the United  States ' response to Arbitrator question No. 61, para. 35.  
308 See Annex E -2, which reports the shares of Chinese exporters subject to the PRC -wide duty rate  in 
the year prior to the imposition of the anti -dumping orders and the data sources used to estimate these 
shares.  
309 Diamond Sawblades ; Furniture ; Ribbons ; Shrimp ; Steel Cylinde rs; and Residential Washers . 
310 Calculated Maximum Share Covered by the PRC -Wide Entity, (Exhibit USA -54 (BCI)).  
311 United  States ' response to Arbitrator question No. 61(b), para. 49.  
312 China's comments on the United  States ' response to Arbitrator question N o. 61, paras.  40-41; and 
Data Required for Implementing the Armington Model Under Two Steps,  (Exhibit CHN -55 (BCI)).  WT/DS471/ARB  
 
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  from China compile d by US Customs shows that some Chinese companies within the PRC -wide entity 
had shipment values of above  [[***]] US dollars  to the  United  States  in the year prior to the 
imposition of the anti -dumping orders .313 Rather than using an average pertaining to ot her anti-
dumping orders , as China propose s, we consider it more appropriate to approximate, for each of the 
six anti -dumping orders, the share of US imports from China covered by the PRC -wide entity. More 
particularly, we identify the names of all the Chin ese exporters outside the PRC -wide entity314 and 
compare these with the names and shipment values of all the Chinese companies that exported to 
the United  States in the year prior to the imposition of the anti -dumping orders .315 By subtracting 
the combined val ue of US shipments  from the Chinese exporters outside the PRC -wide entity from 
the total value of US imports from China, we determine the share covered by the PRC -wide entity 
in the year prior to the imposition of the anti -dumping orders .316 
7.26.   To determine the value of US imports from the Chinese exporters subject to the 
WTO-inconsistent WA -T duty rates  in the three anti -dumping orders where the USDOC used this 
methodology317, we first determine the value of US imports from the Chinese exporters o utside the 
PRC-wide entity by subtracting t he share of the PRC-wide entity , determined in accordance with the 
preceding paragraph,  from the total value of US imports from China in the year prior to the 
imposition of the anti -dumping orders . We then identif y the names of all the  exporters subject to 
the WTO -inconsistent WA -T duty rates318 and the names of all other Chinese exporters outside the 
PRC-wide entity319 and compare these with the names and shipment values of all the Chinese 
companies that exported to t he United  States  in the year prior to the imposition of the anti -dumping 
orders .320 Finally, w e apply the relative share of the exporters subject to the WTO -inconsistent WA -T 
duty rates to the value of US imports from the Chinese exporters outside the PRC -wide entity  to 
obtain the value of US imports from the Chinese exporters subject to the WTO -inconsistent WA -T 
duty rates .321 
7.27.   Lastly, we determine the value of US imports from the remaining Chinese exporters . For the 
22 anti -dumping orders that concern only the  USDOC's use of the WTO -inconsistent Single Rate 
Presumption322, we subtract the share of the PRC -wide entity, determined in accordance with 
paragraph 7.25 above, from the total value of US imports from China in the year prior to the 
                                                
313 The analysis is based on company -specific trade data on US imports from China compiled by US 
Customs. ( Excel File with Import Data in the Year Preceding the Imposition of Anti -Dumping Duties,  (Exhibit 
USA-94 (BCI))).  
314 See Annex E -3, which reports the names of all the Chinese exporters outside the PRC -wide entity 
and the data sources used to identify these exporters.  
315 Excel File with Im port Data in the Year Preceding the Imposition of Anti -Dumping Duties,  (Exhibit 
USA-94 (BCI)). When comparing the names and shipment values of the Chinese exporters outside the PRC -
wide entity, we have disregarded obvious typos in the company -specific data  compiled by US Customs as well 
as discrepancies between frequently used abbreviations such as Co., Ltd., etc.  
316 See Annex E -2, which reports the shares of Chinese exporters subject to the PRC -wide duty rate in 
the year prior to the imposition of the anti -dumping orders as well as the data sources used to estimate these 
shares.  
317 Coated Paper ; OCTG ; and Steel Cylinders . 
318 As explained in section 5.2.1 above, in Coated  Paper , the WTO -inconsistent WA -T duty rate was 
assigned to APP -China and to the Chinese exporters that passed the Separate Rate Test but were not chosen 
for individual examination; in OCTG , the WTO -inconsistent WA -T duty rate was assigned to TPCO and to t he 
Chinese exporters that passed the Separate Rate Test but were not chosen for individual examination; and in 
Steel Cylinders , the WTO -inconsistent WA -T duty rate was assigned to the Chinese exporters that passed the 
Separate Rate Test but were not chosen  for individual examination. (See Annex E -4, which reports the names 
of the Chinese exporters subject to  the WA -T duty rates as well as the data sources used to identify these 
exporters).  
319 See Annex E -4, which reports the names of all other Chinese export ers outside the PRC -wide entity 
as well as the data sources used to identify these exporters.  
320 Excel File with Import Data in the Year Preceding the Imposition of Anti -Dumping Duties,  (Exhibit 
USA-94 (BCI)). When comparing the names and shipment values of  the Chinese exporters subject to the WA -T 
duty rates and the remaining Chinese exporters outside the PRC -wide entity, we have disregarded obvious 
typos in the company -specific data compiled by US Customs as well as discrepancies between frequently used 
abbreviations such as Co., Ltd., etc.  
321 See Annex E -2, which reports the shares of the Chinese exporters subject to the WA -T duty rates in 
the year prior to the imposition of the anti -dumping orders as well as the data sources used to estimate these 
shares.  
322 Aluminum Extrusions ; Bags; Diamond Sawblades ; Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Washers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . WT/DS471/ARB  
 
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  imposition of the anti -dumping orders .323 For the three anti -dumping orders that concern the 
USDOC's use of the WTO -inconsistent WA -T methodology with zeroing as well as the 
WTO-inconsistent Single Rate Presumption324, we apply  the relative share of the remaining Chinese 
exporters, determined in accordance with paragraph 7.26 above, to the valu e of US imports from 
the Chinese exporters outside the PRC -wide entity in order to obtain the value of US imports from 
the remaining Chinese exporters.325 
7.28.   With respect to the value of US imports from China in 2017 , the United  States  has 
provided US Customs d ata.326 China critici zes the data provided by the United  States  on the grounds 
that the data sources are questionable and not verifiable.327 As was the case for the value of US 
shipments in 2017, China does not propose any data for the value of US imports from  China in 2017, 
instead proposing to use  inflation -adjusted values from  the year prior to the imposition of the 
anti-dumping orders .328 
7.29.   As explained above, we do not consider it appropriate to use inflation -adjusted values from 
the year prior to the impositi on of the anti -dumping orders , as China propose s. For the value of US 
imports from China in 2017, we therefore only have the data on record that is provided by 
the United  States .329 Although China criticizes this data for not being publicly available or 
verifiable330, we note that China has not provided evidence that this data is unreliable, nor suggested 
alternative data. For this reason, we consider the data provided by the United  States to be the best 
available. We therefore use the product -specific, confidential trade data reported by US Customs for 
all anti -dumping orders at issue.331 
7.1.1.3   Value of US imports from the rest of the world  
7.30.   To implement the Armington model under the first step , we need data on the value of US 
imports from the rest of the world in the year prior to the imposition of the anti -dumping orders  to 
construct the total value of the US market and the market shares in that year. To implement the 
Armington model under the  second step, we need data on the value of US imports from the rest of 
the world in 2017 in order to construct the total value of the US market in 2017. Below, we explain 
how we obtained each of these data inputs.  
7.31.   With respect to the value of US imports fr om the rest of the world in the year prior to 
the imposition of the anti -dumping order s, the United  States  proposes to use  aggregate data 
reported by the US Census Bureau  based on the reference H TS codes US Customs used to identify 
shipments that may be su bject to anti -dumping duties.332 China proposes to use information 
available in USITC investigation reports.333 When such information is not available for the relevant 
                                                
323 See Annex E -2, which reports the shares of the remaining Chinese exporters in the year prior to the 
imposition of the anti -dumping orders as well as the data sources used to estimate these shares.  
324 Coated Paper ; OCTG ; and Steel Cylinders . 
325 See Annex E -2, which reports the shares of the remaining Chinese exporters in the year prior to the 
imposition of the anti -dumpi ng orders as well as the data sources used to estimate these shares.  
326 Updated Table of US Customs Data on US Imports from China,  (Exhibit USA -30 (BCI)); and 
United  States' response to the Arbitrator question No. 62, para. 67.  
327 China contends that the United  States  fails to provide the back -up data on the US imports for 
individual Chinese exporters in 2017 in order to verify its calculation. (China's written submission, para. 245).  
328 China's response to Arbitrator question No. 6 5, paras.  53-55; and comments on the United  States ' 
response to Arbitrator question No. 65, para. 86; Data Required for Implementing the Armington Model Under 
Two Steps,  (Exhibit CHN -55 (BCI)); and Supporting Documents for Data Required for Implementing th e 
Armington Model Under Two Steps,  (Exhibit CHN -56 (BCI)). For Residential Washers , China submit s an 
estimate of the 2017 total market value based on data from AHAM.  (Supporting Documents for Data Required 
for Implementing the Armington Model Under Two Ste ps, (Exhibit CHN -56 (BCI))).  
329 Updated Table of US Customs Data on US Imports from China, (Exhibit USA -30 (BCI)).  
330 China's written submission, paras.  182-183. 
331 See Annex E -8, which reports the values of US imports from China in 2017 and the data sources 
used to estimate these values.  
332 Table of US Imports from China, World, and Rest of the World in Selected Years,  (Exhibit USA -57). 
The United  States  explains tha t the HTS aggregated data may overstate the value of shipments subject to anti -
dumping duties, since some of these shipments may not actually be subject to anti -dumping duties. 
(United  States ' response to Arbitrator question No. 71(a), para. 142) . 
333 China' s comments on the United  States ' response to Arbitrator question No. 65, paras.  77-78; and 
Data Required for Implementing the Armington Model Under Two Steps,  (Exhibit CHN -55 (BCI)).  WT/DS471/ARB  
 
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  calendar year, or is confidential, China agrees to use the HTS aggregated data from the US Census 
Bureau  proposed by the United  States .334 
7.32.   For consistency, w e follow  the same approach that we followed for data on the value of US 
imports from China , and rely on the relevant  USITC investigation reports to obtain information for 
the nine anti-dumping orders at issue where such information is available.335 For five of the 
anti-dumping orders at issue336, the value of US imports from the rest of the world in the year prior 
to the imposition of the anti -dumping orders  is not directly available from the USITC reports, and 
we construct these values by subtracting the value of US imports from China, obtained from US 
Customs data, from the total value of US imports published in the USITC investigation reports.337 
For the remaining 11 anti-dumping orders  at issue338, the information on the total value of US 
imports and the value of US imports from  the rest of the wo rld is not available in the relevant USITC 
reports for the full calendar year or not available at all for confidential ity reasons , and we therefore 
use the value of US import s from the rest of the world  based on aggregated trade  data reported by 
the US Cen sus Bureau  based on the reference H TS codes used by US Customs to identify shipments 
that may be subject to anti -dumping duties .339 
7.33.   With respect to the value of US imports from the rest of the world in 2017 , the 
United  States proposes to use aggregated trade  data reported by the US Census Bureau  based on 
the reference H TS codes used by US Customs to identify shipments that may be subject to 
anti-dumping duties.340 By subtracting the value of shipments that may be subject to anti -dumping 
duties from the total va lue of US imports, the United  States  approximates the value of US imports 
from the rest of the world.341 China rejects the data provided by the United  States  on the grounds 
that the data sources are questionable and that the assumptions made by the United  States are 
arbitrary and not verifiable.342 As was the case for the value of US shipments in 2017 and the value 
of US imports from China in 2017, China has not submitted any data on the value of US imports 
from the rest of the world in 2017 and instea d proposes to use the inflation -adjusted values from 
the year prior to the imposition of the anti -dumping orders .343 
7.34.   As explained above, we do not consider it appropriate to use inflation -adjusted values from 
the year prior to the imposition of the anti -dump ing orders , as proposed by China. For the value of 
US imports from the rest of the world in 2017, we therefore only have the data on record that is 
provided by the United  States .344 Although China criticizes this data for not being publicly available 
                                                
334 Data Required for Implementing the Armington Model Under Two Steps, (Ex hibit CHN -55 (BCI)); and 
Table of US Imports from China, World, and Rest of the World in Selected Years, (Exhibit USA -57). We note 
that for some anti -dumping orders, China estimates the value of the US imports from the rest of the world by 
subtracting the value of US imports from China, based on US Census data, from the total value of US imports 
reported in the USITC report. (Data Required for Implementing the Armington Model Under Two Steps, (Exhibit 
CHN-55 (BCI))).  
335 Aluminum Extrusions ; Coated Paper ; OTR Tires; Wood Flooring ; Copper Pipe and Tube ; Passenger 
Vehicle and Light Truck Tires ; Steel Flat Products ; Steel Pipe ; and Steel Standard, Line, and Pressure Pipe . 
(See Annex E -1, which reports the values of US imports from the rest of the world in the yea r prior to the 
imposition of the anti -dumping orders and the data sources used to estimate these values ). 
336 Bags; Furniture ; Ribbons ; Steel Nails ; and Steel Products . 
337 See Annex E -1, which reports the values of US imports from the rest of the world in the  year prior to 
the imposition of the anti -dumping orders and the data sources used to estimate these values.  
338 Diamond Sawblades ; OCTG ; PET Film ; Iron Pipe Fittings ; Shrimp ; Solar Panels ; Steel Cylinders ; 
Residential Washers ; Sheet and Strip ; Steel Line Pipe ; and Steel Wire Rod . 
339 See Annex E -1, which reports the values of US imports from the rest of the world in the year prior to 
the imposition of the anti -dumping orders and the data sources used to estimate these values.  
340 Table of US Imports from China, World, and Rest of the World in Selected Years, (Exhibit USA -57). 
341 Appendices with Domestic Shipment and Import Data, Elasticity Parameters, and Model Results for 
Each Modelling Scenario, sourced from the USITC, (Exhibit USA -13 (BCI)); Revised Appe ndices with Domestic 
Shipment and Import Data, Elasticity Parameters, and Model Results for Each Modelling Scenario, sourced from 
the USITC, (Exhibit USA -31 (BCI)); and Table of US Imports from China, World, and Rest of the World in 
Selected Years, (Exhibi t USA -57). 
342 China's written submission, paras.  182-183. 
343 China's response to Arbitrator question No. 65, paras.  53-55; and comments on the United  States ' 
response to Arbitrator question No. 65, para. 86; Data Required for Implementing the Armington Model  Under 
Two Steps,  (Exhibit CHN -55 (BCI)); and  Supporting Documents for Data Required for Implementing the 
Armington Model Under Two Steps,  (Exhibit CHN -56 (BCI)). For Residential Washers , China submit s an 
estimate of the 2017 total market value based on da ta from AHAM.  (Supporting Documents for Data Required 
for Implementing the Armington Model Under Two Steps , (Exhibit CHN -56 (BCI))).  
344 Updated Table of US Customs Data on US Imports from China, (Exhibit USA -30 (BCI)).  WT/DS471/ARB  
 
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  or veri fiable345, China has not provided evidence demonstrating that this data is unreliable, nor 
suggested alternative data. For this reason, we consider the data provided by the United  States to 
be the best available. We therefore use the value of US imports from  the rest of the world in 2017 
based on HTS aggregated data reported by the US Census Bureau .346 
7.1.2   Elasticities  
7.35.   Elasticity measures how responsive an economic variable is to a change in another variable.  
The elasticity value is not directly observable and can either be estimated empirically or inferred 
from existing estimates reported in  the literature.  As explained above, we need the total demand 
elasticity, the elasticity of substitution, and the supply elasticities for each anti -dumping order at 
issue. For s upply elasticities, we need the domestic supply elasticity as well as the supply elasticities 
for different sources of US imports.  
7.36.   With respect to the total demand  elasticity , the elasticity of substitution , and  the 
domestic supply elasticity , the United  States proposes to use, for each anti -dumping order at 
issue, the midpoint value of the range of elasticity estimates published in the relevant USITC 
investigation reports.347 Rather than using the midpoint value, China proposes  to apply the 
Armington model using the high est and low est of the elasticity estimates  published in the USITC 
investigation reports , and use the simple average of the two result s as the  estimate d level of 
nullification or impairment .348 However, China has not pr ovided any evidence to demonstrate that 
this would be a more appropriate way to apply the Armington model.349 Further, China argues that 
the elasticities proposed by the United  States  are old and thus inappropriate to use when applying 
the Armington model to  the 2017 US market under the second step.350 China has, however, not 
provided any evidence suggesting that these elasticity values are inappropriate, nor has it presented 
alternative elasticity estimates. We therefore use, for each anti -dumping order at iss ue, the midpoint 
value of the elasticity estimates published in the relevant USITC reports when applying the 
Armington model under both the first and the second step.351 
7.37.   With respect to the supply elasticities  for different sources of US imports , the 
United  States  proposes to use the same value of 10 as the supply elasticity for (i) US imports from 
the Chinese exporters subject to the WTO -inconsistent PRC -wide duty rates, (ii) US imports from 
the remaining Chinese exporters, and (iii) US imports from the rest  of the world.352 The United  States  
does not explicitly propose a value as the supply elasticity for US imports from the Chinese exporters 
subject to the WTO -inconsistent WA -T duty rates, which we need for the three anti -dumping orders 
that concern the USDOC 's use of the WTO -inconsistent WA -T methodology with zeroing as well as 
the WTO -inconsistent Single Rate Presumption.353 Although China rejects the notion of using the 
exact same value as the supply elasticity for all varieties of US imports, it has not prov ided any 
alternative estimates.354 We further note  that, as pointed out by t he United  States , import supply 
                                                
345 China's written submission, paras.  182-183. 
346 See Annex E -8, which reports the values of US imports from the rest of the world in 2017 and the 
data sources used to estimate these values. We note that for Aluminum Extrusions,  the United  States  provides 
two sets of data on the value of imports , one pertaining to the HTS reference codes active in 2011, the initial 
period following the imposition of the anti -dumping order, and the other pertaining to the HTS reference codes 
active in 2017. According to the United  States , there were no expansions of the product scope for Aluminum 
Extrusions  between the imposition of the anti -dumping order and 2017. (United  States ' response to Arbitrator 
question No. 62, paras.  59-64). For consistency, we use the data pertaining to the HTS reference codes active 
in 2011 because this value is closer to the actual value of US imports subject to anti -dumping duties reported 
by US Customs.  
347 United  States ' written submission, paras.  82-84; and Table of Elasticities, (Exhibit USA -16). 
348 China's response to Arbitrator ques tion No. 65, para. 56. 
349 We further note that the approach suggested by China would result in a lower estimated level of 
nullification or impairment compared with the approach of using the midpoint value of the elasticity estimates 
published in the relevan t USITC reports.  
350 China's opening statement at the meeting of the Arbitrator, para. 58.  
351 See Annex E -5, which reports the values for the total demand elasticity, the elasticity of substitution, 
and the domestic supply elasticity and as well as the data s ources used to estimate these values.  
352 Appendices with Domestic Shipment and Import Data, Elasticity Parameters, and Model Results for 
Each Modelling Scenario, sourced from the USITC, (Exhibit USA -13 (BCI); and Revised Appendices with 
Domestic Shipment an d Import Data, Elasticity Parameters, and Model Results for Each Modelling Scenario, 
sourced from the USITC, (Exhibit USA -31 (BCI)).  
353 Coated Paper ; OCTG ; and Steel Cylinders . 
354 China's written submission, paras.  176-177. WT/DS471/ARB  
 
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  elasticities are generally more elastic than domestic supply elasticities355 and it is common practice 
in applied econo mic modelling to assign  the value  of parameters for which formal estimates are not 
available when those parameters, such as the supply elasticities, are not central to the analysis.356 
In light of this, we consider it appropriate to use the value of 10 as the supply elasticity for all the 
varieties of US imports. We use the supply elasticity of 10 when applying the Armington model under 
both the first and the second step.  
7.1.3   Anti-dumping d uty rates  
7.38.   To implement the Armington model under the first step, we need the actual duty rates 
assigned to Chinese exporters. To implement the Armington model under the second step, we also 
need the counterfactual duty rates, which replace the WTO -inconsis tent duty rates.  
7.39.   With respect to the actual duty rates , the United  States  has provided data based on publicly 
available USDOC records from the relevant anti -dumping investigations and administrative reviews. 
More particularly, the United  States  has provided the PRC -wide duty rates assigned to the Chinese 
exporters within the PR C-wide entity and the duty rates assigned to all other Chinese exporters 
outside the PRC -wide entity.357 Based on the latter duty rates, the United  States  has also provided 
a simple average of the duty rates assigned to the Chinese exporters outside the PRC -wide entity.358 
China has not objected to this data.  
7.40.   For the 22 anti -dumping orders that concern only the USDOC's use of the WTO -inconsistent 
Single Rate Presumption359, we use the data on the PRC -wide duty rates, provided by the 
United  States , for the Chinese  exporters within the PRC -wide entity, and we use the  simple average 
of the duty rates assigned to Chinese exporters outside the PRC -wide entity, provided by the 
United  States, for the remaining Chinese exporters.360 
7.41.   For the three anti -dumping orders that co ncern the USDOC's use of the WTO -inconsistent 
WA-T methodology with zeroing as well as the WTO -inconsistent Single Rate Presumption361, we 
also use the data on the PRC -wide duty rates, provided by the United  States , for the Chinese 
exporters within the PRC -wide entity.362 We use the  data on the  WA-T duty rates , provided by the 
United  States , for the Chinese exporters  subject to these WTO -inconsistent WA -T duty rates.363 For 
                                                
355 United  States ' response to Arbitrator question No. 46(a), para. 185.  
356 In addition, as demonstrated by the United  States , applying the Armington model using the same 
values for the import supply elasticities as those used for the domestic supply elasticity, rather than the value 
of 10, would result in a lower estimated level of nullification or impairment. ( Tables Presenting Armington 
Model with Import Supply Elasticity at 10, Inputs for the Armington Model, Armington Model with Import 
Supply Elasticity Equal to US Domestic Supply Elasticity, and Armington Model with Infinite Import Supply 
Elasticity, ( Exhibit USA -52 (BCI) )). 
357 Anti-Dumping Duty Rates Assigned by the USDOC to Chinese Firms Subject to Anti -Dumping Duties, 
(Exhibit USA -77 (BCI)); and Excel File with Simple Aver age of Duty Rates for Chinese Exporters Outside the 
PRC-Wide Entity, (Exhibit USA -92 (BCI)).  
358 Excel File with Simple Average of Duty Rates for Chinese Exporters Outside the PRC -Wide Entity, 
(Exhibit USA -92 (BCI)).  
359 Aluminum Extrusions ; Bags; Diamond Sawb lades; Furniture ; OTR Tires ; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Washers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . 
360 Anti-Dumping Duty Rates Assigned by the USDOC to Chinese Firms Subject to Anti -Dumping Duties, 
(Exhibit USA -77 (BCI)); and Excel File with Simple Average of Duty Ra tes for Chinese Exporters Outside the 
PRC-Wide Entity, (Exhibit USA -92 (BCI)). See also Annex E -6. For two anti -dumping orders, Aluminum 
Extrusions and Sheet and Strip , the relevant data was missing from Exhibits USA -77 (BCI) and USA -92 (BCI). 
We have obtained the relevant data from publicly available USDOC records from the relevant anti -dumping 
investigations and administrative reviews. More particularly, we use the PR C-wide duty rate assigned in the 
most recent 2015 -2016 administrative review for Aluminum Extrusions  and the PRC -wide duty rate assigned in 
the original investigation for Sheet and Strip . For the remaining Chinese exporters, we have, for both anti -
dumping orders, calculated the simple average using the approach that the United  States  followed in 
Exhibits  USA-77 (BCI) and USA -92 (BCI).  (See Annex E -7). 
361 Coated Paper ; OCTG ; and Steel Cylinders . 
362 Anti-Dumping Duty Rates Assigned by the USDOC to Chinese Firms  Subject to Anti -Dumping Duties, 
(Exhibit USA -77 (BCI)); and Excel File with Simple Average of Duty Rates for Chinese Exporters Outside the 
PRC-Wide Entity, (Exhibit USA -92 (BCI)).  
363 As explained in section 5.2.1 above, in Coated Paper , the WTO -inconsistent WA -T duty rate was 
assigned to APP -China and to the Chinese exporters that passed the Separate Rate Test but were not chosen WT/DS471/ARB  
 
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  the remaining Chinese exporters, we recalculate the simple average of the duty rates assig ned to 
Chinese exporters outside the PRC -wide entity, provided by the United  States , in order to reflect 
only the duty rates of exporters outside the PRC -wide entity other than those subject to the WTO -
inconsistent WA -T duty rates .364 
7.42.   With respect to the cou nterfactual duty rates , we use the duty rates determined in section 
5.3 above. More particularly, for the 22 anti -dumping orders that concern only the USDOC's use of 
the WTO -inconsistent Single Rate Presumption365, we use a 0.00% counterfactual duty rate for the 
Chinese exporters subject to the WTO -inconsistent PRC -wide duty rates. For Coated Paper , which 
concerns the USDOC's use of the WTO -inconsistent WA -T methodology with zeroing as well as the 
WTO-inconsistent Single Rate Presumption, we use a 0.00% duty rate as the counterfactual duty 
rate for the Chinese exporters subject to the WA -T duty rate , namely APP -China and the exporters 
that passed the Separate Rate Test but were not chosen for individual examination, and we use a 
0.00% counterfactual duty rate for the Chinese exporters subject to the WTO -inconsistent PRC -wide 
duty rate. For OCTG , whic h concerns the USDOC's use of the WTO -inconsistent WA -T methodology 
with zeroing as well as the WTO -inconsistent Single Rate Presumption, we use a [[ ***]]% duty rate 
as the counterfactual duty rate for the Chinese exporters subject to the WA -T duty rate, n amely 
TPCO and the exporters that passed the Separate Rate Test but were not chosen for individual 
examination, and we use a 0.00% counterfactual duty rate for the Chinese exporters subject to the 
WTO-inconsistent PRC -wide duty rate. For Steel Cylinders , which concerns the USDOC's use of the 
WTO-inconsistent WA -T methodology with zeroing as well as the WTO -inconsistent Single Rate 
Presumption, we use a 0.00% duty rate as the counterfactual duty rate for the Chinese exporters 
subject to the WA -T duty rate, n amely the exporters that passed the Separate Rate Test but were 
not chosen for individual examination, and we use a 0.00% counterfactual duty rate for the Chinese 
exporters subject to the WTO -inconsistent PRC -wide duty rate.  
7.2  Implementation of the Armingto n model under the two steps  
7.43.   Having identified the required data inputs, we proceed to implement the Armington model 
under the two steps.366 
7.44.   As the first step, we apply the Armington model to the US market as it existed prior to the 
imposition of the anti -dumping orders  in order to simulate, for each anti -dumping order, the impact 
of imposing the relevant anti -dumping dut ies on the market shares of the Chinese exporters (both 
the Chinese exporters subject to the WTO -inconsistent anti -dumping duties and the rem aining 
Chinese exporters), the exporters from the rest of the world, and the US producers.367 We then 
apply the  market shares of the Chinese exporters simulated under the first step to the actual 2017 
total value of the US market in order to obtain the simul ated 2017 total value of US imports from 
China.  
7.45.   As the second step, we apply the Armington model to the actual 2017 US market with the 
market shares simulated under the first step in order to simulate , for each anti -dumping order,  the 
impact of reducing th e WTO -inconsistent anti -dumping duties from the actual duty rates to the 
counterfactual duty rates on the value of US imports from China (both the Chinese exporters subject 
to the WTO -inconsistent anti -dumping duties and the remaining Chinese exporters), t he exporters 
                                                
for individual examination; in Steel C ylinders , the WTO -inconsistent WA -T duty rate was assigned to the 
Chinese exporters that passed the Separate Rate Test but were not chosen for individual examination; in 
OCTG , the WTO -inconsistent WA -T duty rate was assigned to TPCO and the Chinese exporte rs that passed the 
separate rate test but were not chosen for individual examination. Based on publicly available USDOC records 
of the relevant anti -dumping investigations and administrative reviews, we have identified all the Chinese 
exporters that passed  the Separate Rate Test but were not chosen for individual examination.  (See 
Annex  E-4). 
364 Based on publicly available USDOC records of the relevant anti -dumping investigations and 
administrative reviews, we have identified the Chinese exporters that recei ved neither the WTO -inconsistent 
PRC-wide duty rate nor the WTO -inconsistent WA -T duty rate in Steel Cylinders  and OCTG . In Coated Paper , 
there are no such Chinese exporters.  (See Annex E -4). 
365 Aluminum Extrusions ; Bags; Diamond Sawblades ; Furniture ; OTR T ires; PET Film ; Ribbons ; Shrimp ; 
Solar Panels ; Wood Flooring ; Copper Pipe and Tube ; Iron Pipe Fittings ; Passenger Vehicle and Light Truck 
Tires; Residential Washers ; Sheet and Strip ; Steel Flat Products ; Steel Line Pipe ; Steel Nails ; Steel Pipe ; Steel 
Products ; Steel Standard, Line, and Pressure Pipe ; and Steel Wire Rod . 
366 The STATA code (do -file) used to implement the Armington model is reported in Annex E -9. The 
results were also replicated using the software Excel and R.  
367 These simulated market shar es are presented in Annex E -11. WT/DS471/ARB  
 
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  from the rest of the world, and the US producers.368 The value of US imports from China simulated 
under the second step corresponds to the counterfactual value of US imports from China.  
7.46.   We then estimate the  level of nullification or impairment concerning the anti -dumping orders 
at issue  by calculating , for each order,  the difference between the 2017 value of US imports from 
China, simulated under the first step, and the counterfactual value of US imports from China, 
simulated under the second ste p. 
7.47.   The table below presents the level of nullification or impairment estimated for each anti -
dumping order at issue by applying the Armington model in two steps, as well as the total estimated 
level of nullification or impairment.  
Table 3: Estimated level of nullification or impairment  
Anti-dumping order  Level of nullification or impairment  
(million  USD)  
Aluminum Extrusions  498.412  
Bags 82.168  
Coated Paper  48.036  
Diamond Sawblades  17.555  
Furniture  438.783  
OCTG  447.896  
OTR Tires  46.656  
PET Film  20.005  
Ribbons  7.319  
Shrimp  126.215  
Solar Panels  714.605  
Steel Cylinders  5.608  
Wood Flooring  76.192  
Copper Pipe and Tube  16.567  
Iron Pipe Fittings  28.380  
Passenger Vehicle and Light Truck Tires  45.075  
Residential Washers  85.023  
Sheet and Strip 30.167  
Steel Flat Products  321.144  
Steel Line Pipe  19.719  
Steel Nails  24.652  
Steel Pipe  90.033  
Steel Products  311.226  
Steel Standard, Line, and Pressure Pipe  72.810  
Steel Wire Rod  4.88 
Total  level of nullification or impairment  3,579.128  
8  CONCLUSION  
8.1.  For the reasons set out above, we determine that the level of nullification or impairment of 
benefits accruing to China  as a result of the WTO -inconsistent methodologies used by the 
United  States  in anti -dumping  proceedings concerning products imported from China is 3,579.128 
million USD  per annum . Therefore, in accordance with Article  22.4 of the DSU, China  may request 
                                                
368 For a similar approach, see Decision by the Arbitrator, US – Washing Machines (Article  22.6 – US), 
paras.  3.114 -3.119.  WT/DS471/ARB  
 
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  authorization from the DSB to suspend concessions or other obligations at a le vel not exceeding 
3,579.128 million USD per annum . 
 
__________  
 
 
 