WORLD TRADE
ORGANIZATIONWT/DS141/AB/RW
8 April 2003
(03-1917)
Original:  English
EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
RECOURSE TO ARTICLE 21.5 OF THE DSU BY INDIA
AB-2003-1
Report of the Appellate BodyWT/DS141/AB/RW
Page i
I. Introduc tion................................................................................................................. ................1
II. Arguments of the Participants  and the Third Particip ants ..........................................................6
A. Claims of Error by India – Appellant ............................................................................6
1. Article 21.5 of the DSU ....................................................................................6
2. Paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement ...................7
3. Article 17.6 of the  Anti-Dumping Agreement   and Article 11 of the
DSU ................................................................................................................10
4. Article 3.5 of the  Anti-Dumping Agreement ..................................................11
B. Arguments of the European Communities – Appellee .................................................12
1. Article 21.5 of the DSU ..................................................................................12
2. Paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement .................14
3. Article 17.6 of the  Anti-Dumping Agreement   and Article 11 of the
DSU ................................................................................................................17
4. Article 3.5 of the  Anti-Dumping Agreement ..................................................18
C. Arguments of the Third Participants ............................................................................19
1. Japan ...............................................................................................................19
2. United States...................................................................................................20
III. Issues Raised in this Appeal ............................................................................................... ......22
IV. Article 21.5 of the DSU ..................................................................................................... .......22
A. Introduction .................................................................................................................22
B. Analysis ........................................................................................................................26
V. Paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement ...........................................37
A. Introduction .................................................................................................................37
B. Analysis ........................................................................................................................40
VI. Article 17.6 of the  Anti-Dumping Agreement   and Article 11 of the DSU ..............................59
A. Introduction .................................................................................................................59
B. Analysis ........................................................................................................................63
VII. Findings and Conclusions................................................................................................... ......73
ANNEX 1: Notification of an Appeal by India under paragraph 4 of Article 16
of the Understanding on Rules and Procedures Governing the
Settlement of DisputesWT/DS141/AB/RW
Page ii
TABLE OF CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation
Australia – Automotive
Leather II (Article 21.5 – US) Panel Report, Australia – Subsidies Provided to Producers and Exporters of
Automotive Leather – Recourse to Article 21.5 of the DSU by the United States ,
WT/DS126/RW and Corr.1, adopted 11 February 2000, DSR 2000:III, 1189
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon ,
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327
Australia – Salmon(Article 21.5 – Canada)
 Panel Report, Australia – Measures Affecting Importation of Salmon – Recourse to
Article 21.5 of the DSU by Canada , WT/DS18/RW, adopted 20 March 2000,
DSR 2000:IV, 2035
Canada – Aircraft(Article 21.5 – Brazil)
 Appellate Body Report, Canada – Measures Affecting the Export of Civilian
Aircraft – Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/AB/RW,
adopted 4 August 2000, DSR 2000:IX, 4299
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures
Relating to Certain Agricultural Products , WT/DS207/AB/R, adopted
23 October 2002
EC – Bananas III(Article 21.5 – Ecuador)
 Panel Report, European Communities – Regime for the Importation, Sale and
Distribution of Bananas – Recourse to Article 21.5 of the DSU by Ecuador ,
WT/DS27/RW/ECU, 12 April 1999, DSR 1999:II, 803
EC – Bed Linen Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India , WT/DS141/AB/R, adopted 12 March 2001
Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-
Type Bed Linen from India , WT/DS141/R, adopted 12 March 2001, as modified by
the Appellate Body Report, WT/DS141/AB/R
EC – Bed Linen(Article 21.5 – India)
 Panel 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/RW, 29 November 2002
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, 135
EC – Sardines Appellate Body Report, European Communities – Trade Description of Sardines ,
WT/DS231/AB/R, adopted 23 October 2002
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding
Portland Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998,
DSR 1998:IX, 3767
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/AB/R,
WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, 3
Mexico – Corn Syrup
(Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose
Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU
by the United States , WT/DS132/AB/RW, adopted 21 November 2001
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/AB/R,
adopted 5 April 2001
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany , WT/DS213/AB/R
and Corr.1, adopted 19 December 2002WT/DS141/AB/RW
Page iii
Short Title Full Case Title and Citation
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on
Combed Cotton Yarn from Pakistan , WT/DS192/AB/R, adopted 5 November 2001
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations" , WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619
US – FSC
(Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations" – Recourse to Article 21.5 of the DSU by the EuropeanCommunities , WT/DS108/AB/RW, adopted 29 January 2002
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-
Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 23 August 2001
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia , WT/DS177/AB/R,
WT/DS178/AB/R, adopted 16 May 2001
US – Lead and Bismuth II Appellate Body Report, United States – Imposition of Countervailing Duties on
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the
United Kingdom , WT/DS138/AB/R, adopted 7 June 2000, DSR 2000:V, 2601
US – Offset Act
(Byrd Amendment )Appellate Body Report, United States – Continued Dumping and Subsidy Offset Act
of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003
US – Shrimp
(Article 21.5 – Malaysia) Appellate Body Report, United States – Import Prohibition of Certain Shrimp and
Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia ,
WT/DS58/AB/RW, adopted 21 November 2001
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on Imports
of Wheat Gluten from the European Communities , WT/DS166/AB/R, adopted
19 January 2001
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool
Shirts and Blouses from India , WT/DS33/AB/R and Corr.1, adopted 23 May 1997,
DSR 1997:I, 323WT/DS141/AB/RW
Page 1
WORLD TRADE ORGANIZATION
APPELLATE BODY
European Communities – Anti-Dumping Duties
on Imports of Cotton-Type Bed Linen from India
Recourse to Article 21.5 of the DSU by India
India, Appellant
European Communities, Appellee
Japan, Third Participant
Korea, Third Participant
United States, Third ParticipantAB-2003-1
Present:
Abi-Saab, Presiding Member
Bacchus, Member
Taniguchi, Member
I. Introduction
1. India appeals certain issues of law and legal interpretations in the Panel Report,  European
Communities – Anti-Dumping Duties on Imports of Co tton-Type Bed Linen from India – Recourse to
Article 21.5 of the DSU by India   (the "Panel Report"). 1  The Panel was established to consider a
complaint by India with respect to the consistency with the  Agreement on Implemen tation of Article VI
of the General Agreement on Tariffs and Trade 1994   (the " Anti-Dumping Agreement ") and the
Understanding on Rules and Procedures Go verning the Settlement of Disputes  (the "DSU") of the
measures taken by the European Communities to co mply with the recommendations and rulings of the
Dispute Settlement Body (the "DSB") in  EC – Bed Linen . 2
2. The original panel found that Council Regulation (EC) No 2398/97 of 28 November 1997 3,
imposing definitive anti-dumping duties on imports of cotton-type bed linen from India, is
inconsistent with Articles 2.4.2, 3.4, and 15 of the  Anti-Dumping Agreement . 4  India and the
European Communities appealed certain issues of law and legal interpretations developed by theoriginal panel.  The Appellate Body upheld the original panel's finding that "the practice of 'zeroing'when establishing 'the existence of margins of dumping', as applied by the European Communities inthe anti-dumping investigation at issue" is inconsistent with Article 2.4.2 of the  Anti-Dumping
                                                     
1WT/DS141/RW, 29 November 2002.
2The recommendations and rulings of the DSB resulted from the adoption, by the DSB, of the
Appellate Body Report and the panel report, as modified by the Appellate Body Report, in  EC – Bed Linen.
3Council Regulation (EC) No 2398/97, 28 November 1997, imposing a definitive anti-dumping duty on
imports of cotton-type bed linen originating in Egypt, India and Pakistan, published in the Official Journal of the
European Communities, 4 December 1997, L-series, No. 332 ("EC Regulation 2398/97").
4Original Panel Report, WT/DS141/R, adopted 12 March 2001, as modified by the Appellate Body
Report, WT/DS141/AB/R.WT/DS141/AB/RW
Page 2
Agreement . 5  In addition, the Appellate Body found that "the European Communities, in calculating
amounts for administrative, selling and general costs and profits in the anti-dumping investigation atissue", had acted inconsistently with its obligations under Article 2.2.2(ii) of the  Anti-Dumping
Agreement  and, therefore, reversed the findings of the original panel to the contrary in paragraphs
6.75 and 6.87 of the original panel report.
 6
3. On 12 March 2001, the DSB adopted the Appellate Body Report and the original panel report,
as modified by the Appellate Body Report. 7  The parties to the dispute mutually agreed that the
European Communities should have until 14 August 2001 to implement the recommendations andrulings of the DSB.
 8  On 7 August 2001, the Council of the European Union adopted Council
Regulation (EC) No 1644/2001, amending the original definitive anti-dumping measure on cotton-type bed linen from India.
 9  Subsequently, on 28 January 2002 and 22 April 2002, the Council of the
European Union adopted Council Regulations (EC) No 160/2002 and No 696/2002, respectively. 10
EC Regulation 160/2002 terminated the anti-dumping proceedings against cotton-type bed linen
imports from Pakistan and established that the an ti-dumping measures against Egypt would expire on
28 February 2002, if a review were not requested by that date.  This review was not requested, and theanti-dumping measures against Egypt expired.  EC Regulation 696/2002 established that areassessment of the injury and causal link based on imports from India alone had revealed that there
was a causal link between the dumped imports from India and material injury to the EuropeanCommunities industry.  Additional factual aspects of this dispute are set out in greater detail in thePanel Report.
 11
                                                     
5Appellate Body Report, EC – Bed Linen , adopted 12 March 2001, para. 86(1).
6Ibid., para. 86(2).
7WT/DS141/9, 22 March 2001.
8WT/DS141/10, 1 May 2001.
9Council Regulation (EC) No 1644/2001, 7 August 2001, amending Regulation (EC) No 2398/97
imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt, India andPakistan and suspending its application with regard to imports originating in India, published inthe Official Journal of the European Communities, 14 August 2001, L-series, No. 219 ("EC Regulation1644/2001").
10Council Regulation (EC) No 160/2002, 28 January 2002, amending Council Regulation (EC)
No 2398/97 imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt,India and Pakistan, and terminating the proceeding with re gard to imports originating in Pakistan, published in
the Official Journal of the European Communities, 30 January 2002, L-series, No. 26 ("EC Regulation
160/2002").
Council Regulation (EC) No 696/2002, 22 April 2002, confirming the definitive anti-dumping duty
imposed on imports of cotton-type bed linen originating in India by Regulation (EC) No 2398/97, as amended
and suspended by Council Regulation (EC) No 1644/2001, published in the Official Journal of the European
Communities, 25 April 2002, L-series, No. 109 ("EC Regulation 696/2002").
11Panel Report, paras. 2.1-2.11.WT/DS141/AB/RW
Page 3
4. India was of the view that the European Communities had failed to comply with the
recommendations and rulings of the DSB, a nd that EC Regulations 1644/2001, 160/2002, and
696/2002 were inconsistent with several provisions of the  Anti-Dumping Agreement   and Article 21.2
of the DSU.  India, therefore, requested that the matter be referred to a panel pursuant to Article 21.5
of the DSU. 12  On 22 May 2002, in accordance with Article 21.5 of the DSU, the DSB referred the
matter to the original panel.  A member of the original panel was unable to participate in the
proceedings and the parties therefore agreed on a new panelist on 25 June 2002. 13  The Panel Report
was circulated to the Members of the World Trade Organization (the "WTO") on 29 November 2002.
5. Before making findings on India's claims, the Panel made the following rulings on four
preliminary matters raised by the European Communities.  The Panel:
(i) ruled that EC Regulations 160/2002 and 696/2002 are not "measures taken to
comply" with the recommendation of the DSB, within the meaning of Article 21.5 ofthe DSU.
 14  Thus, the Panel limited its examination to EC Regulation 1644/2001;
(ii) declined to assess whether the measures "taken to comply" were adopted within the
"reasonable period of time" agreed by the parties under Article 21.3 of the DSU 15;
(iii) found that India's "claim 6" was not properly before the Panel, to the extent that it
concerned the consistency of the European Communities' measure with the obligationunder Article 3.5 of the  Anti-Dumping Agreement  to ensure that injuries caused by
"other factors" not be attributed to the dumped imports, because it was disposed of bythe original panel and not appealed.
 16  The Panel, however, rejected the European
Communities' request to exclude India's "claim 5" because the Panel found that India
could not have presented that claim in the original dispute 17;  and
(iv) rejected the European Communities' request that the Panel exclude India's claims
relating to Article 4.1(i) of the  Anti-Dumping Agreement  and Article 21.3 of the
DSU, given that India itself denied making such claims. 18
                                                     
12WT/DS141/13/Rev.1, 8 May 2002.
13WT/DS141/14, 2 July 2002;  WT/DS141/14/Corr.1, 10 July 2002.
14Panel Report, para. 6.22.
15Ibid. , para. 6.27.
16Ibid. , para. 6.53.
17Ibid. , para. 6.57.  India's "claim 5" related to the assessment of whether the European Communities'
reconsideration of injury was consistent with Article 3.4.
18Panel Report ., para. 6.68.WT/DS141/AB/RW
Page 4
6. The Panel then examined India's claims and found that:
(i) India had failed to demonstrate that the European Communities' calculation of a
weighted average for administrative, selling, and general costs on the basis of salesvalue violates Article 2.2.2(ii) of the  Anti-Dumping Agreement
 19;
(ii) even assuming EC Regulations 160/2002 and 696/2002 properly formed part of the
Panel's evaluation, the European Communities had not violated paragraphs 1 and 3 ofArticle 3 or Article  5.7 of the  Anti-Dumping Agreement   in conducting a cumulative
assessment of the effects of dumped imports from India and Pakistan (and Egypt), insubsequently re-examining whether imports  from Pakistan were being dumped, and
subsequently in reassessing the effects of the dumped imports from India alone
 20;
(iii) the European Communities had not acted inconsistently with paragraphs 1 and 2 of
Article 3 of the  Anti-Dumping Agreement   in considering "dumped imports" 21;
(iv) the analysis and conclusions of the European Communities with respect to injury
are not inconsistent with paragraphs 1 and 4 of Article 3 of the  Anti-Dumping
Agreement 22;
(v) the European Communities' finding of a causal link between the dumped imports and
the injury is not inconsistent with Article 3.5 of the  Anti-Dumping Agreement 23;
(vi) the European Communities had not acted inconsistently with Article 15 of the
Anti-Dumping Agreement   by failing to explore possibilities of constructive remedies
before applying anti-dumping duties 24;  and
(vii) the European Communities had not violated Article 21.2 of the DSU. 25
7. Having excluded, as a preliminary matter, India's claim that the European Communities had
failed to ensure that injuries caused by "other  factors" was not attributed to the dumped imports
pursuant to Article 3.5 of the  Anti-Dumping Agreement ,  the Panel nevertheless made an alternative
                                                     
19Panel Report, para. 6.94.
20Ibid. , para. 6.116.
21Ibid. , para. 6.144.
22Ibid. , para. 6.217.
23Ibid. , para. 6.233.
24Ibid. , para. 6.260.
25Ibid. , para. 6.271.WT/DS141/AB/RW
Page 5
finding on this issue and determined that the Eur opean Communities had not acted inconsistently with
Article 3.5 in this regard. 26
8. For these reasons, the Panel concluded that EC Regulation 1644/2001 is not inconsistent with
the  Anti-Dumping Agreement   or the DSU. 27  Therefore, the Panel found that the European
Communities had implemented the recommendation of the DSB to bring its measure into conformity
with its obligations under the  Anti-Dumping Agreement . 28  In the light of these conclusions, the Panel
did not make any recommendations under Article 19.1 of the DSU. 29
9. On 8 January 2003, India notified the DSB of its intention to appeal certain issues of law
covered in the Panel Report and legal interpretations developed by the Panel, pursuant to paragraph 4of Article 16 of the DSU, and filed a Notice of Appeal pursuant to Rule 20 of the  Working
Procedures for Appellate Review  (the " Working Procedures ").
 30  On 20 January 2003, India filed an
appellant's submission. 31  On 3 February 2003, the European Communities filed an appellee's
submission. 32  On the same day, Japan and the United States each filed a third participant's
submission. 33  Korea notified its intention to appear at the oral hearing as a third participant. 34
10. The oral hearing in this appeal was held on 20 February 2003.  The participants and third
participants presented oral arguments and responded to questions put to them by the Members of theDivision hearing the appeal.
11. We recall that the Panel found, as a preliminary matter, that only EC Regulation 1644/2001
was a measure "taken to comply" within the meaning of Article 21.5 of the DSU, and thus the Panelexcluded EC Regulations 160/2002 and 696/2002 from the scope of its examination.
 35  India has not
appealed this finding.  During the oral hearing, India and the European Communities agreed,
moreover, that the measure at issue in this appeal is EC Regulation 1644/2001. 36  Therefore, we will
confine our analysis in this appeal to EC Regulation 1644/2001.
                                                     
26Panel Report, para. 6.246.
27Ibid. , para. 7.1.
28Ibid. , para. 7.2.
29Ibid. , para. 7.3.
30WT/DS141/16, 9 January 2003.
31Pursuant to Rule 21(1) of the Working Procedures .
32Pursuant to Rule 22(1) of the Working Procedures .
33Pursuant to Rule 24(1) of the Working Procedures .
34Pursuant to Rule 24(2) of the Working Procedures .
35Panel Report, para. 6.22.
36India's and the European Communities' responses to questioning at the oral hearing.WT/DS141/AB/RW
Page 6
II. Arguments of the Participants and the Third Participants
A. Claims of Error by India – Appellant
1. Article 21.5 of the DSU
12. India asserts that the Panel erred in finding, as a preliminary matter, that India's claim,
concerning the consistency of EC Regulation 1644/2001 with the obligation under Article 3.5 of the
Anti-Dumping Agreement   to ensure that injuries caused by "other factors" are not attributed to the
dumped imports, was not properly before the Panel.  India notes that the European Communitiesbased its request for a preliminary ruling on two ar guments:  (i) that India should not be allowed to
raise claims before the Article 21.5 Panel that it could have raised before the original panel;  and(ii) that India was acting in bad faith.  India submits that, although the Panel found that India's claimwas  raised during the original proceedings, and also that India  was  pursuing the matter in  good
faith,  the Panel nevertheless granted the European Communities' request for a preliminary ruling.
13. According to India, instead of focusing on the facts of the case, the Panel based some of its
conclusions on overarching considerations of the appropriate functioning of Article 21.5 panels and
the dispute settlement system as a whole.  For example, the Panel determined that defending Members
in Article 21.5 proceedings would  always  be prejudiced by a finding in Article 21.5 proceedings of
a violation made on the basis of a claim that could have been pursued in the original proceedings,but was not, because the defending member woul d not have a reasonable period of time for
implementation.  India submits that it had argued before the Panel that the European Communitieswould not, in this particular case, suffer any prejudice from lack of a reasonable period forimplementation, since India's claim under Article 3.5 is not the only claim in these proceedings.However, according to India, the Panel "declined to address [India's] argument".
 37
14. India contends that the Panel failed to take into account the Appellate Body Report in
US – FSC (Article 21.5 – EC) ,  where the European Communities raised a claim in the
Article 21.5 proceedings that it had not raised in the original proceedings.  The Article 21.5 paneland the Appellate Body, nevertheless, made findings with respect to that claim.  In India's view,
EC Regulation 1644/2001, like the measure before the Appellate Body in  US – FSC (Article 21.5 –
EC),  is a new and different measure from the measure subject to the original dispute.
 38
                                                     
37India's appellant's submission, para. 145.
38India's response to questioning at the oral hearing.WT/DS141/AB/RW
Page 7
15. India argues that the Panel erred in considering the situation in  US – Shrimp (Article 21.5 –
Malaysia)   to be analogous to the situation in th e present case.  India asserts that in  US – Shrimp
(Article 21.5 – Malaysia) ,  the complainant sought to challenge exactly the same measure that had been
found to be WTO-consistent in the original pro ceedings, whereas in the present case, the measure
challenged by India is a  new  measure that is separate and distinct from the original measure.
According to India, in  US – Shrimp (Article 21.5 – Malaysia) ,  the "measure" consisted of several sub-
measures, and the Appellate Body had found, in the or iginal dispute, that one of these sub-measures,
Section 609, was consistent with the  General Agreement on Tariffs and Trade 1994  (the "GATT
1994"). 39  Therefore, in those Article 21.5 proceedings , the Appellate Body declined to re-examine
Section 609 because it had already found that it was consistent with the GATT 1994.  In India's view,the issue in this appeal is  different from that in  US – Shrimp (Article 21.5 – Malaysia)   because the
"measure" cannot be divided into sub-measures.  A ccording to India, all the aspects of the original
measure have been changed—there has been a redetermination of dumping and injury, as well as a
re-examination of causation.  India notes that th e fact that the European Communities analyzed
causation anew, makes that analysis part of the ne w implementation measure.  In India's view, the
European Communities should have similarly re-ensured  that the injury caused by other factors was not
attributed to the dumped imports.
 40
16. India also submits that the Panel should ha ve followed the Appellate Body's conclusion in
Canada – Aircraft (Article 21.5 – Brazil) ,  that Article 21.5 panels are not confined to examining the
"measures taken to comply" from the perspective of the claims, arguments, and factual circumstancesrelated to the measure that was the subject of the original proceedings.
 41
2. Paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement
17. India appeals the Panel's finding that the European Communities did not act inconsistently
with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement   when determining the volume
of "dumped imports" for purposes of making a determination of injury.  According to India, theEuropean Communities mistakenly concluded that 86 percent of the total volume of imports of bed
linen from India were dumped.  India argues that the proportion of imports attributable to  sampled
producers found to be dumping (47 percent) constitutes the only  positive evidence  that could have
been used to  objectively examine   and determine the volume of  total  imports from India that are
dumped.  India contends that if the basis for determining dumped imports is the calculation ofdumping margins for sampled producers, and that calculation reveals no dumping for producers
                                                     
39India's response to questioning at the oral hearing.
40Ibid.
41Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 41.WT/DS141/AB/RW
Page 8
representing 53 percent of the imports attributable to sampled producers, one cannot objectively reach
the conclusion that 86 percent of the total volume of imports are positively dumped.
18. Second, India argues that the Panel erred in finding that Article 3 does not provide any
guidance on how to determine the volume of  dumped imports  for purposes of making a
determination of injury.  In India's view, Article 3.1 provides that an injury determination, including a
determination of the volume of dumped imports,  shall  be based on  positive evidence  and involve an
objective examination .  Thus, according to India, Article 3.1 casts an  overarching obligation  on
domestic authorities to make an objective examination of the volume of dumped imports based onpositive evidence.  India refers to the Appellate Body Report in  Thailand – H-Beams  as supporting
this interpretation.
 42
19. India asserts that the Panel mistakenly found that the European Communities had resorted to
the  second   option provided for in the second sentence of Article 6.10 of the  Anti-Dumping
Agreement ,  namely that the European Communities individually examined producers accounting for
the largest percentage of the volume of exports which could reasonably be investigated.  This finding,
according to India, is at odds with the conclusion reached by the original panel in this dispute, whichcorrectly established that the European Communities had conducted its analysis of dumping based ona statistically valid sample   of Indian producers and exporters within the meaning of the  first  option
found in the second sentence of Article 6.10.  Thus, India asserts that the Panel ignored its own factualdeterminations in the original proceedings.  India notes that the evidence it presented to the Panel
demonstrated that the European Communities sought to select a statistically valid sample.  Forexample, India points to the Notice of initiation of the investigation which provides for the use of
sampling  techniques in this investigation.  India refers  also to an exchange of letters between the
association of Indian exporters and the European  Commission which, in India's view, demonstrates
that the investigating authorities sought to select a sample representing Indian producers andexporters.
 43  India concludes that the failure of the European Communities to objectively examine the
positive evidence resulting from the sample of investigated Indian producers or exporters runs directlycounter to the overarching obligation under Article 3.1 to base the determination of the volume ofdumped imports on positive evidence and an objective examination.
                                                     
42Appellate Body Report, Thailand – H-Beams , para. 106.
43India's appellant submission, paras. 56 and 59.WT/DS141/AB/RW
Page 9
20. Third, India argues that the Panel confused two distinct stages of the investigation—the stage
of determining dumping and the stage of duty collection.  India notes that, instead of seeking guidancein the text of Article 3, the Panel looked to Article 9.4 of the  Anti-Dumping Agreement ,  which
concerns duty collection.  India contends that it cannot be inferred that the  Anti-Dumping Agreement
provides that all imports from producers or exporters that have not been individually examined may
be considered dumped for purposes of analyzing injury, from the fact that Article 9.4 permits thecollection of anti-dumping duties from non-examined producers  after  having completed a
determination of  dumping ,  injury ,  and  causality .  In other words, India asserts that the Panel was
wrong in concluding, on the basis of the premise that a duty may be collected from non-examinedproducers, that all non-examined producers have dum ped and caused injury.  According to India, the
Panel's reasoning disregards the fact that the dumping and injury findings logically  precede  the
collection of duties.  In addition, India contends that Article 9.4 expressly restricts the scope of itsapplication to the imposition of anti-dumping duties.
  Therefore, according to India, it would be
contrary to previous Appellate Body rulings regarding effective treaty interpretation to read into
Articles 2, 3, and 6 of the  Anti-Dumping Agreement   the method set forth in Article 9.4 for the
calculation of anti-dumping duties.  Moreover, India argues that extending the application of themethod set forth in Article 9.4 to other provisions of the  Anti-Dumping Agreement   would upset the
delicate balance of rights and obligations agreed to by the Uruguay Round negotiators.  Accordingly,India asserts that this finding of the Panel is contrary not only to the  Anti-Dumping Agreement ,  but
also to Articles 3.2 and 19.2 of the DSU, which provide that findings and recommendations cannotadd to or diminish the rights and obligations provided in the covered agreements.
21. Fourth, India argues that the Panel erred in concluding that India's proposed interpretation
would lead to bizarre and unacceptable results for which there are no remedial mechanisms.  ThePanel determined that these results would be a consequence of the fact that only 47 percent of the totalimports from India would be considered dumped for purposes of making a determination of injury,whereas pursuant to Article 9.4, anti-dumping duties would be applied to  all  imports from exporters
or producers not individually examined.  India notes that the Panel recognized the possibility ofrefunds and reviews as mechanisms for remedying the situation where a duty would be collected on
imports from an unexamined producer that might not have been dumped.  In India's view, thereference to Article 11.2 (review possibilities) and to Article 9.3 (refund possibilities) supports India's
interpretation rather than that of the Panel.
22. Finally, India asserts that, if the sample of European Communities producers was accepted in
this investigation to fully represent the European Communities producers, the sample of exportingproducers likewise should have been considered to fully represent the Indian exporters.WT/DS141/AB/RW
Page 10
3. Article 17.6 of the  Anti-Dumping Agreement   and Article 11 of the DSU
23. India submits that the Panel did not properly discharge its duties under Article 17.6 of the
Anti-Dumping Agreement   and Article 11 of the DSU in concluding that the European Communities
did have information before it on all relevant economic factors listed in Article 3.4 of theAnti-Dumping Agreement  when making its injury determination.
24. India contends that the Panel misapplied the rules on the allocation of the burden of proof
and, therefore, acted inconsistently with Article 11 of the DSU.  India asserts that it had made aprima facie   case before the Panel, showing that information on a number of economic factors had
never been collected by the European Communities' in vestigating authorities.  India argues that, as a
consequence, the Panel should have required the European Communities to present evidence to rebut
India's  prima facie   case.  India submits that, by not shifting the burden of proof to the European
Communities, the Panel failed to make an objective assessment of the facts as required by Article 11of the DSU.
25. India asserts, furthermore, that if the Appellate Body were to conclude that the Panel correctly
applied the rules on the allocation of the burden of proof, the Appellate Body should then find that the
Panel distorted the evidence by accepting, as constituting evidence of a fact, a mere assertion by theEuropean Communities that data was collected.  Accordingly, India maintains that the Panel actedinconsistently with Article 11 of the DSU, which requires panels to make an objective assessment ofthe matter, including an objective assessment of the facts of the case.
26. Referring to the Appellate Body Report in  US – Hot-Rolled Steel ,  India argues that
Article 17.6(i) of the  Anti-Dumping Agreement  requires panels to actively review or examine the
facts.
 44  India submits that despite the existence of this obligation, the Panel did not actively review
the assertions of the European Communities that it had collected data on all relevant economic factorslisted in Article 3.4, nor did the Panel use its investigative power under Article 13 of the DSU toinquire about the missing information on stocks and capacity utilization.  In India's view, the fact-
specific nature of this dispute  required   the Panel to use its right to seek information under Article 13
of the DSU in order to discharge its obligation, under Article 17.6(i), to actively review or examinethe facts.  India argues, furthermore, that Article 17.6(i) requires the Panel to do more than to merely
state that it was clear to it that the European Communities had the data in its record.  In India's view,
by failing to actively review the facts, the Panel acted contrary to the obligation contained inArticle 17.6(i) of the  Anti-Dumping Agreement .
                                                     
44Appellate Body Report, US – Hot-Rolled Steel , para. 55.WT/DS141/AB/RW
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4. Article 3.5 of the  Anti-Dumping Agreement
27. India submits that, if the Appellate Body were to conclude that the Panel erred in dismissing,
as not being properly before it, India's claim challenging EC Regulation 1644/2001 as inconsistentwith the obligation in Article 3.5 of the  Anti-Dumping Agreement  to ensure that injuries caused by
"other factors" are not attributed to the dumped imports, then the Appellate Body should examine the
Panel's finding, in the alternative, that the Euro pean Communities did not act inconsistently with that
provision.  First, India challenges the Panel's finding that India could not rely upon recital (50) ofEC Regulation 1644/2001 as evidence of the fact that the European Communities was aware of otherfactors simultaneously causing injury to the European Communities industry.  In India's view, thePanel was wrong to dismiss India's argument on the grounds that recital (50) of the redetermination is
included in the section entitled "Conclusion on injury", and not in the section on "Causation".  India
contends that a factual finding does not cease to be a factual finding solely because it is contained inthe preamble, conclusion, or other section of the same document.
28. Second, India contends that the conclusions of the Panel are based on a misrepresentation of
the facts and an incorrect causation analysis.  India argues that the Panel reviewed the findings of theEuropean Communities on the basis of  ex post  justifications, instead of analyzing whether the
European Communities (i) had properly examined the possible injurious effects of inflation and of theincrease in the cost of raw cotton and (ii) had separated and distinguished the injury caused by thosefactors.  Thus, India argues that the Panel erred in its analysis by relying upon explanations which are
not discernible from EC Regulation 1644/ 2001 and the record of the investigation.
29. In addition, India argues that the Panel's misrepresentation of the facts of the case is a
consequence of two other errors.  First, India asserts that the Panel erred in reading into Article 3.5 anarbitrary distinction between "independent" and "dependent" factors causing injury, and in mistakenlyassigning the authorship of this distinction to India.  India submits that it never made such adistinction.  In India's view, the effect of the Panel's distinction between independent and dependentcauses of injury is to render redundant the requireme nt to demonstrate a causal relationship between the
dumped imports and the injury to the domestic industry.  India explains that, if the Panel's theory werefollowed, investigating authorities would be able to argue (i) that the injurious effects of every other
known factor could have been remedied through an in crease in price and (ii) that this increase was not
possible due to price suppression.  As  a result, India argues, the injury  in its entirety would automatically
be attributed to the dumped imports.  According to India, this approach cannot be considered to be
consistent with the aim of Article 3.5, which is to es tablish that injury to the domestic industry is indeed
caused by the dumped imports.WT/DS141/AB/RW
Page 12
30. Second, in India's view, the Panel also erred by disregarding the guidance provided by the
Appellate Body in  US – Hot-Rolled Steel  on the interpretation of Article 3.5. 45  India submits that,
in  US – Hot-Rolled Steel ,  the Appellate Body made it clear that if an investigating authority has
come to the conclusion that a known factor, other th an the dumped imports, is causing injury to the
domestic industry, that authority must ensure that the injurious effects of this other factor are not
attributed to the dumped imports.  India argues that, although the European Communities "tried" inrecital (103) of Commission Regulation (EC) No 1069/97
 46 to follow the Appellate Body's guidance,
it failed to do so. 47
31. India argues, finally, that the Panel misunderstood India's argument with respect to inflation
and again based its conclusions on a misrepresentation of facts.  India disagrees with the Panel'sfinding that the European Communities did not identify the inability of bed linen prices to keep pacewith inflation in prices of consumer goods as a cause of injury.  India contends that, in recital (50) ofEC Regulation 1644/2001, the European Communities does identify inflation in consumer prices as a
cause of injury.  India submits that, in spite of this, the European Communities failed to mention, let
alone examine and distinguish, in its causation analysis the injurious effects of the inability ofEuropean Communities producers to keep pace with inflation.  India notes that, although the Panelinterpreted the inability of bed linen prices to  increase commensurate with inflation as an  indicator
(instead of a cause) of injury, in India's view, the inability of bed linen prices to keep pace withinflation is a factor partly responsible for declining profitability of the European Communitiesindustry.
B. Arguments of the European Communities – Appellee
1. Article 21.5 of the DSU
32. The European Communities submits that the Panel correctly dismissed India's claim that the
European Communities violated Article 3.5 of the  Anti-Dumping Agreement   by failing to ensure that
injuries caused by "other factors" not be attributed to the dumped imports, because that claim was not
properly before the Panel.  According to the Eur opean Communities, the determination on the "other
factors" is an element of the original measure that was not modified and thus cannot be regarded aspart of the implementation measure.  Consequently, that determination cannot be challenged before anArticle 21.5 panel.
                                                     
45Appellate Body Report, US – Hot-Rolled Steel , paras. 221-223.
46Commission Regulation (EC) No 1069/97, 12 June 1997, imposing a provisional anti-dumping duty
on imports of cotton-type bed linen originating in Egypt, India and Pakistan, published in the Official Journal of
the European Communities, 13 June 1997, L-series, No. 156 ("EC Regulation 1069/97").
47India's appellant's submission, para. 178.WT/DS141/AB/RW
Page 13
33. The European Communities contends that Article 21.5 of the DSU is not intended to provide
a "second service" to complainants which, by negligence or calculation, have omitted to raise or arguecertain claims during the original proceedings.
 48  In the European Communities' view, India's reading
of Article 21.5 would diminish the procedural righ ts of defending parties, altering the balance of
rights and obligations of Members that the DSU purports to maintain.
34. According to the European Communities, in  US – FSC  49,  Mexico – Corn Syrup (Article 21.5
– US) 50, and  US – Offset Act (Byrd Amendment ) 51, the Appellate Body emphasized that procedural
actions under the DSU must be taken in a timely fashion.  The European Commun ities submits that, in
a similar way, the right to make a claim must be exercised promptly.  Consequently, Article 21.5 mustbe interpreted as excluding the possibility of raising a claim for the first time before an Article 21.5panel when such claim could have been pursued before the original panel.
35. Furthermore, the European Communities contends that the decision of the original panel
rejecting India's claim "has  res judicata  effects" between the parties.
 52  Therefore, in the view of the
European Communities, India is precluded from reasserting the same claim before another panel.  The
European Communities asserts, in this regard, that the applicability of the principle of  res judicata  to
disputes under the DSU was confirmed in  US – Shrimp (Article 21.5 – Malaysia) ,  where the
Appellate Body noted that Appellate Body Reports that are adopted by the DSB must be treated by
the parties to a particular dispute as a final resolution to that dispute. 53  The same principle applies,
according to the European Communities, to adopted panel reports.
36. The European Communities argues that India's allegation that the European Communities did
not suffer prejudice is irrelevant and wrong.  According to the European Communities, the defendant
is not required to demonstrate prejudice.  In addition, the European Communities submits that
prejudice to the defending party arises whenever a claim that could have been pursued in the originalproceedings is brought before an Article 21.5 panel, because, as a result, the defending party will bedeprived of the possibility of correcting the alleged violation within a reasonable period of time, ifindeed a violation is found.
37. The European Communities argues that whether or not India acted in good faith is also
irrelevant for the interpretation of Article 21.5 of the DSU.  The European Communities contends
                                                     
48European Communities' appellee's submission, para. 140.
49Appellate Body Report, US – FSC , para. 166.
50Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 50.
51Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 314.
52European Communities' appellee's submission, para. 150.
53Appellate body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 97.WT/DS141/AB/RW
Page 14
that, as explained by the Panel, a decision on this issue does not turn on the facts of any particular
dispute.  In the European Communities' view, even though India might not, in this specific case, have
acted in bad faith, India's proposed interpretation of Article 21.5 would allow the kind of litigationtechniques that are incompatible with the good fa ith requirement set out in Article 3.10 of the DSU.
38. According to the European Communities, the Panel's ruling is consistent with earlier
decisions of the Appellate Body.  The European Communities submits that, contrary to India'sarguments, the facts of the present dispute are different from those in  Canada – Aircraft
(Article 21.5 – Brazil) ,  where Brazil raised claims against a new and different measure.
 54  In the present
case, in contrast, India's claim relates to an elemen t that is not part of the new measure, because the
findings on the "other factors" included in the or iginal determination were not affected by the
redetermination.  Furthermore, the European Comm unities asserts that the present case differs from
US – FSC (Article 21.5 – EC)   because, in the latter case, the United States did not object to the
claim raised by the European Communities under Article III:4 of the GATT 1994. 55  In that case,
moreover, the claim brought by the European Communities under Article III:4 against the measure
"taken to comply" was different from the claims that the European Communities could have broughtunder the same provision before the original panel, because the United States had repealed themeasure at issue in the original dispute and replaced it with an entirely new measure.  The EuropeanCommunities argues that, in the current appeal, India is challenging findings that were not modified inthe implementation measure and, therefore, cannot be considered as part of the measure "taken tocomply".
2. Paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement
39. The European Communities asserts that the Pane l did not err in finding that the European
Communities did not act inconsistently with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping
Agreement   when determining the volume of "dumped imports" for purposes of making a
determination of injury.
40. The European Communities first notes that the Panel's observation that the European
Communities' investigating authorities did not use a "statistically valid sample ", within the meaning
of the first option in the second sentence of Article 6.10 of the  Anti-Dumping Agreement ,  is a factual
finding beyond the scope of appellate review.  The European Communities submits that the group of
exporters selected for purposes of the dumping examination represents the largest percentage of thevolume of exports which could reasonably be investigated, within the meaning of the second option in
                                                     
54Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , paras. 8-14.
55Appellate Body Report, US – FSC (Article 21.5 – EC) , paras. 40-44.WT/DS141/AB/RW
Page 15
the second sentence of Article 6.10.  Therefore, the Panel's factual observation that the European
Communities did  not  resort to a "statistically valid sample " is correct.  According to the European
Communities, the selection of companies of different types was aimed at improving therepresentativeness of the selection, but it cannot be considered sufficient to produce a "statistically
valid sample".
41. In addition, the European Communities explains that  the fact that its investigating authorities,
on a few occasions, referred to the group of examined exporters as a "sample", does not mean that thedumping examination was based on a "statistically valid sample" within the meaning of Article 6.10.The European Communities notes that if all "samples" were by definition "statistically valid", itwould have been superfluous to add that precisi on into Article 6.10.  According to the European
Communities, the investigating authorities used the term "sample" because, in European Communities
law and practice, the terms "sampling" and "sample" are used to designate indistinctly either of thetwo options envisaged in Article 6.10 of the  Anti-Dumping Agreement .  Similarly, the references
made by the original panel and the Article 21.5 Panel to a "sample" merely reflect the European
Communities' use of that term.
42. The European Communities states that, in any event, the Panel did not attach any legal
consequences to the finding that the European Communities did not use a statistically valid sample.The Panel's conclusion that the European Communities did not act inconsistently with paragraphs 1and 2 of Article 3 would be equally valid were the Appellate Body not to agree with this finding offact.  The European Communities contends that, even if the examined exporters selected by theinvestigating authorities constituted a "statistically valid sample", there would still be no basis to
assume that the proportion of imports found to be dumped within the sample is positive evidence of
the proportion of imports outside the sample which would have been found to be dumped had all theexporters been examined individually.
43. The European Communities asserts that "dumped imports" are those imports for which a
positive determination of dumping, whether individual or collective, has been made. The EuropeanCommunities contends that, following this reasoning, its investigating authorities determined that allthe imports from the unexamined exporters (cooperating and non-cooperating) were dumped.  AsIndia has not challenged the dumping determination in these proceedings, it is illogical andcontradictory for India now to claim that some of those imports should be considered not dumped for
purposes of making a determination of injury.  According to the European Communities, the
obligation to determine dumped imports objectively and on the basis of positive evidence is satisfiedwhere the imports have been found to be dumped in accordance with the relevant provisions of theAnti-Dumping Agreement  governing the determination of dumping.WT/DS141/AB/RW
Page 16
44. The European Communities agrees with the Panel's conclusion that Article 3 of the
Anti-Dumping Agreement  contains no guidance with respect to the determination of the volume of
dumped imports.  In the European Communities' view, the general requirement to make an objectiveexamination of injury based on "positive evidence", set forth in Article 3.1, cannot be read as
imposing a new obligation with respect to the determination of dumping where none is provided in
the relevant provisions of the  Anti-Dumping Agreement .
45. In addition, the European Communities argues that India's proposed interpretation would lead
to an absurd result—where the same imports could be simultaneously considered dumped and notdumped under different provisions of the  Anti-Dumping Agreement —because Article 9.4 would
allow the application of duties to imports which have been previously found not to be dumped forpurposes of injury determinations under Article 3.
46. The European Communities contends, furtherm ore, that India's proposed interpretation
assumes that no dumping margin needs to be assi gned to unexamined exporters.  However, in the
European Communities' view, if the dumping margin of the unexamined exporters is not calculated, it
is impossible to establish whether the country-wide dumping margin is above  de minimis ,  as required
by Article 5.8.
47. The European Communities states that, although the  Anti-Dumping Agreement  does not
prescribe any specific rules for calculating the dumpi ng margin of the unexamined exporters, it is
implicit in Article 6.10 that, where the investigating authorities limit the investigation of dumping tosome exporters, they may use the data collected for those examined exporters in order to calculate thedumping margin of the unexamined exporters.  In addition, the European Communities refers to
Article 9.3, which expressly states that there is a logical link between the level of the dumping margin
and that of the dumping duty.  Therefore, it contends that if Article 9.4 allows the investigatingauthorities to apply anti-dumping duties to  all  imports from the unexamined exporters, it is because
all  such imports can be considered dumped, including for purposes of paragraphs 1 and 2 of
Article 3.  In the light of this, the European Communities asserts that its investigating authorities wereentitled to regard all imports from the unexamined exporters as dumped.
48. Finally, the European Communities argues that its investigating authorities were entitled to
treat as "dumped" all imports from non-cooperating exporters, upon calculating the correspondingdumping margin for the non-cooperating exporters in accordance with the methodology set out in
Article 6.8 and Annex II to the  Anti-Dumping Agreement .  In addition, the European Communities
contends that, even if India's interpretation were correct, the proportion of dumped imports from theexamined exporters within the sample could not be considered as representative of the proportion ofWT/DS141/AB/RW
Page 17
dumped imports from the non-cooperating exporters, because the non-cooperating exporters were not
included in the pool of exporters from which the sample was selected.
3. Article 17.6 of the  Anti-Dumping Agreement   and Article 11 of the DSU
49. The European Communities argues that the Pane l did not err in finding that the European
Communities had information before it on all relevant economic factors listed in Article 3.4 of theAnti-Dumping Agreement ,  including stocks and capacity utilization, and thus acted consistently with
Article 3.4.  According to the European Communities, the Panel correctly applied the rules regardingthe allocation of the burden of proof, did not distort the evidence before it, nor did it fail to activelyreview the facts.
50. The European Communities submits that because India did not properly establish a  prima
facie  case that no data was collected by the European Communities' investigating authorities, the
Panel did not fail to apply the rules on the allocation of the burden of proof.  Alternatively, theEuropean Communities argues that, even if India had established a  prima facie  case, this  prima
facie   case had been refuted by the European Communities.  Furthermore, the European Communities
emphasizes that the weighing of evidence is within the discretion of the Panel as the trier of facts.Consequently, the European Communities argues that the Panel was entitled to conclude that theEuropean Communities had the relevant information in its possession, and acted consistently withArticle 11 of the DSU.
51. In the European Communities' view, the Panel did not distort the evidence.  The European
Communities argues that the information contained in EC Regulation 1644/2001 is not "a mere
assertion" as claimed by India.  Rather, the regulation explains the basis of the EuropeanCommunities' conclusion that stocks and capacity utilization did not have a bearing on the state of thedomestic industry.  The European Communities refers to the statement in the Appellate Body Reportin  EC – Hormones   to the effect that a claim of distortion implies that a panel committed an egregious
error that calls into question its good faith.
 56  The European Communities then underscores that India
has explicitly admitted that it is not alleging that  the Panel in this case committed an egregious error
or acted in bad faith.
52. The European Communities submits that the Pane l did not fail to actively review the facts
as required by Article 17.6(i) of the  Anti-Dumping Agreement .  According to the European
Communities, India failed to demonstrate that the Panel's assessment of the evidence is inconsistent
with Article 11 of the DSU;  therefore, its identical claim under Article 17.6(i) is equally unfounded.
                                                     
56Appellate Body Report, EC – Hormones , para. 133.WT/DS141/AB/RW
Page 18
In addition, the European Communities argues that the Panel's decision not to use its power of
investigation under Article 13.2 of the DSU does not constitute a violation of Article 17.6(i), becausea panel's right to seek information under Article 13.2 is discretionary.  In the European Communities'view, the Appellate Body's ruling in  EC – Sardines   supports the conclusion that the Panel's decision
not to seek information does not imply that the Panel failed to make an objective assessment of the
facts.
 57
4. Article 3.5 of the  Anti-Dumping Agreement
53. The European Communities argues that the Pane l did not err in finding that the European
Communities did not act inconsistently with Article 3.5 of the  Anti-Dumping Agreement   by failing to
ensure that injuries caused by "others factors" were not attributed to the dumped imports.  In the
European Communities' view, the Panel's finding that the increase in the cost of raw cotton and
inflation were not causes of injury is a factual finding and thus beyond the scope of appellate review.
54. The European Communities submits that India's arguments misrepresent the findings of the
investigating authorities.  According to the Eu ropean Communities, the passages of EC Regulation
1644/2001 referred to by India demonstrate that the investigating authorities did not consider theincrease in the cost of raw cotton as a separate cause of injury.
55. The European Communities notes that "price suppression" is one of the possible "effects" of
dumping set forth in Article 3.2 of the  Anti-Dumping Agreement .  Accordingly, price suppression
cannot be, at the same time, one of the "other causes" of injury to be examined under Article 3.5.  The
European Communities asserts that the increase in the cost of raw cotton is not the cause of price
suppression, but rather the fact that renders necessary the price increase.  According to the EuropeanCommunities, this is in accordance with Article 3.2,  which provides that the "cause" of the "price
suppression" is the fact that "prevents" the price increase, and not the fact that renders necessary suchprice increase.  The European Communities contends, moreover, that India has not argued that anyother factor that was not examined by the investigating authorities prevented the EuropeanCommunities producers from increasing their prices to reflect the increase in the cost of raw cotton.
56. Furthermore, the European Communities argues that the injurious effects of the increase in
the cost of raw cotton cannot be separated and distinguished from the effects of the dumped imports.
In the European Communities' view, the existence of "price suppression" presupposes the existence of
two elements:  (i) a factor that renders a price increase necessary;  and (ii) a factor that "prevents"such price increase.  If either of these elements is absent, there can be no "price suppression" within
                                                     
57Appellate Body Report, EC – Sardines , para. 302.WT/DS141/AB/RW
Page 19
the meaning of Article 3.2 and, consequently, no injury.  The European Communities contends that
the injurious effects of the two constituent elements of price suppression cannot, therefore, be"separated and distinguished".
57. The European Communities argues that, contrary to India's allegation, the Panel's reasoning
does not render redundant Article 3.5, because a price increase cannot be said to remedy the injury
caused by the factors listed in that Article.  As an example, the European Communities explains that aprice increase would not remedy the injurious effects of a contraction of demand, but rather wouldaggravate them.
58. The European Communities submits that its investigating authorities did not find, as alleged
by India, that the failure of bed linen prices to keep pace with inflation in the prices of consumergoods was a cause of injury.  According to the European Communities, EC Regulation 1644/2001mentioned the failure of bed linen prices to keep pace with inflation as a further indication of theexistence of price suppression.  In any event, the European Communities contends that the failure of
bed linen prices to keep pace with inflation cannot be a  cause of injury in the form of declining and
inadequate profitability.  The European Communities notes that the profitability of bed linen is afunction   of its cost of production and of its sales price.  The inflation rate for other consumer goods
does not affect either of these two variables.  Therefore, the European Communities argues, theinflation rate cannot be the cause of the injury suffered by the European Communities industry.Rather, it is an indication or symptom of injury, as indicated by the Panel.
C. Arguments of the Third Participants
1. Japan
59. Japan submits arguments relating only to the determination of the volume of dumped imports
for purposes of making a determination of injury under Article 3 of the  Anti-Dumping Agreement .
Japan submits that an analysis of the text, the context, and the object and purpose of Article 9.4 of theAnti-Dumping Agreement  demonstrates that Article 9.4 does not apply to the determination of
dumping, injury, and causation under Articles 2 and 3 of the  Anti-Dumping Agreement .  Japan
contends that Article 9.4 provides rules applicable only to the stage where duties are collected, whichfollows the investigating authorities' affirmative determination of dumping, injury, and causation.
60. Japan argues that the use of the term "duty" or "duties" in Article 9.4 confirms the
understanding that Article 9.4 applies only to the stage of imposition of anti-dumping duties.  Inaddition, Japan contends that the use of the present perfect tense in Article 9.4 indicates thatArticle 9.4 becomes relevant only after the investigation phase has been completed and theWT/DS141/AB/RW
Page 20
investigating authorities have found dumping, injury, and causation.  In Japan's view, the title of
Article 9, as well as the principles set forth in Article 9.1, clarify that Article 9 sets forth rulesconcerning imposition and collection of duties, and that it does not affect the determinations ofdumping, injury, and causation.
61. Japan also contends that Article 9.4 contains a very narrowly-focused set of rules that apply
only in exceptional cases where an examination of all responding parties is "impracticable," as setforth in the second sentence of Article 6.10.
62. Japan finds support in the Appellate Body Report in  US – Hot-Rolled Steel   for its argument
that the European Communities' position would dilute the requirement established in Article 3.1 that adetermination of injury be based on "positive evidence" and an "objective examination."
 58  Japan
submits that the European Communities' methodology is inconsistent with the requirement that the
evidence "must be of an affirmative, objective and verifiable character, and that it must be credible." 59
In addition, Japan alleges that by using the data of the sampled producers in a biased and unfair
manner, the European Communities failed to comply  with the requirement that a determination of
injury must involve an objective examination—that is, that the " 'examination' process must conform
to the dictates of the basic principles of good faith and fundamental fairness." 60
63. Japan contends, moreover, that its interpretation is supported by Article 17.6(i) of the
Anti-Dumping Agreement .  Japan argues that although Article 17.6(i) is directed to panels, the
obligation of an unbiased and objective evaluation of facts applies equally to the investigatingauthorities, because panels review the investigating authorities' evaluation of facts in accordance withthat standard.
2. United States
64. The United States agrees with the finding of the Panel that when a party's argument is rejected
in a report adopted by the DSB, that party cannot raise new arguments on the same claim in aproceeding under Article 21.5 of the DSU.  The United States disagrees with India's view that themere inclusion of a finding in the legislative or administrative vehicle that implements a DSBrecommendation makes it a measure taken to comply subject to Article 21.5 review.  The text of thatprovision premises a panel's jurisdiction over a claim under Article 21.5 on whether that claim
challenges measures that were taken to comply with DSB recommendations and rulings.
                                                     
58Appellate Body Report, US – Hot-Rolled Steel , paras. 192-193.
59Ibid. , para. 192.
60Ibid. , para. 193.WT/DS141/AB/RW
Page 21
65. The United States submits that the Panel corr ectly concluded that investigating authorities
may treat all imports from producers or exporters for which an affirmative dumping determination hasbeen made as "dumped imports" for purposes of making a determination of injury.  The United Statessubmits that Article 2.1 of the  Anti-Dumping Agreement  defines dumped products "[f]or the purpose
of [the Anti-Dumping] Agreement", on a country-wide  basis, and that, therefore, the references to
"dumped imports" in paragraphs 1 and 2 of Article 3 and throughout Article 3 refer to all imports ofthe product from the countries subject to the investigation.
66. In the United States' view, the  Anti-Dumping Agreement  requires investigating authorities to
examine, on the one hand, the volume and price effects of the  dumped imports ,  and, on the other
hand, all relevant economic factors having a bearing on the state of the domestic industry.  The UnitedStates argues that, through this examination of both the   dumped imports   and the injury factors, the
investigating authorities examine th e "consequent impact" of those  dumped imports  on the domestic
industry, as set out in paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement .
67. The United States contends that Article 9.4 confirms this conclusion, as that provision does
not provide for any separation of imports from each non-examined producer or exporter into twocategories—dumped and not dumped.  Rather, the United  States contends that the provision provides
for a calculated duty to apply to  all  of the imports from each non-examined producer.
68. The United States believes that the Panel correctly recognized that, under the  Anti-Dumping
Agreement ,  an investigating authority may appropria tely draw a distinction between the economic
factors and indicia that indicate whether an industry's overall condition is declining, and "otherfactors" that may be causing such decline.  Only the latter are subject to the non-attribution provisions
of Article 3.5 of the  Anti-Dumping Agreement .
69. The United States agrees with the Panel's finding that the European Communities properly
found that the industry's rising raw material costs a nd inflation were not "other factors" causing injury
subject to the non-attribution provision of Article 3.5.  Even if the Appellate Body were to concludethat these factors should have been considered "other factors", subject to the provisions of Article 3.5,the United States believes that the European Communities' analysis of the effect of the factors on theindustry represents a reasoned and adequate discussion that does not attribute to imports the effects, ifany, of these two factors. The United States believes that the European Communities' analysis of theeffects of rising raw material costs and inflation would satisfy the European Communities' non-
attribution obligation under Article 3.5, as that obligation has been interpreted by the Appellate Body.WT/DS141/AB/RW
Page 22
III. Issues Raised in this Appeal
70. The following issues are raised in this appeal:
(a) (i) whether the Article 21.5 Panel 61 erred in dismissing India's claim that the
European Communities had acted inconsistently with Article 3.5 of the  Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994   (the
"Anti-Dumping Agreement ") —by failing to ensure that injuries caused by "other
factors" was not attributed to the dumped imports—because that claim was notproperly before the Panel;  and, if so
(ii) whether the Panel erred in finding, in the alternative, that the European
Communities had ensured that injuries caused by "other factors" was not attributed to
the dumped imports and, therefore, had not acted inconsistently with Article 3.5 of
the  Anti-Dumping Agreement ;
(b) whether the Panel erred in concluding that the European Communities had acted
consistently with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement   in
calculating the volume of dumped imports, for purposes of determining injury;  and
(c) whether the Panel failed to discharge its duties properly under Article 17.6 of the
Anti-Dumping Agreement   and Article 11 of the  Understanding on Rules and
Procedures Governing the Settlement of Disputes  (the "DSU"), in finding that the
European Communities had information before it on all relevant economic factors
listed in Article 3.4 of the  Anti-Dumping Agreement ,  including stocks and capacity
utilization.
IV. Article 21.5 of the DSU
A. Introduction
71. We turn first to the issue raised by India that the Panel erred in dismissing India's claim that
the European Communities had acted inconsistently with the requirement of Article 3.5 of theAnti-Dumping Agreement  by failing to ensure that injuries caused by "other factors" was not
attributed to the dumped imports.  We recall that India claimed before the  original panel  that the
European Communities had acted inconsistently with Article 3.5 of the  Anti-Dumping Agreement  by
                                                     
61Hereinafter "the Panel".WT/DS141/AB/RW
Page 23
failing to determine to what extent injuries caused  by "other factors" were responsible for the injury
allegedly suffered by the domestic industry. 62  The original panel ruled:
Finally, with respect to India's claim that the European Communities
failed to properly consider "other factors" which might have beencausing injury to the domestic industry, as required by Article 3.5 of
the AD Agreement, we note that, with the exception of the argument
concerning improper consideration of "dumped" imports, India has
made no other arguments in support of this claim.  Having rejected
India's position in that regard, we consider that India has failed to
present a  prima facie  case in this regard.
 63
India did not appeal this panel finding in the original dispute.  Thus, the panel report in the original
dispute was adopted by the Dispute Settlement Body (the "DSB") without modification of this
finding.
72. In order to comply with the recommendations an d rulings of the DSB in the original dispute,
the European Communities adopted Council Regulation (EC) No 1644/2001 64, reflecting the
investigating authorities' revised determinations of dumping and injury.  In the light of these reviseddeterminations, the European Communities also re-examined whether a causal link existed betweenthe dumped imports and injury suffered by the domestic industry.
 65  The European Communities did
not,  however, revise the analysis of "other factors" made in the original determination. 66  Rather, in
EC Regulation 1644/2001, the European Communities confirmed the findings of the originaldetermination in this respect, except for a minor change.
 67
                                                     
62Original Panel Report, para. 6.123.  India al so claimed under Article 3.5 that the European
Communities had failed to establish the existence of a causal link between dumped imports and injury sufferedby the domestic industry.  According to India, by cumulating  all  imports from the countries under
investigation, the European Communities had included in its calculation of "dumped imports" what India
considered to be  non-dumped   import transactions. ( Ibid. , paras. 6.121-6.122)  The original panel found  no
violation of Article 3.5 in relation to this particular claim. ( Ibid. , para. 6.142)  India did not appeal this finding in
the original dispute.
63Ibid. , para. 6.144.
64Council Regulation (EC) No 1644/2001, 7 August 2001, amending Council Regulation (EC)
No 2398/97, imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt,
India, and Pakistan and suspending its application with regard to imports originating in India, published inthe Official Journal of the European Communities, 14 August 2001, L-series, No. 219 ("EC Regulation1644/2001").
65Ibid. , recitals (52)-(53).
66Ibid. , recitals (59)-(64).
67The Panel noted that the European Communities expanded its findings in the redetermination with
respect to the development of consumption of bed linen in  order to take into account slightly different figures on
domestic industry sales.  The Panel stated that India's claim in the Article 21.5 proceedings did not rely on this
minor change. (Panel Report, footnote 75 to para. 6.52)WT/DS141/AB/RW
Page 24
73. Subsequently, before the  Article 21.5 Panel ,  India claimed that the European Communities
had violated Article 3.5,  inter alia ,  because it had disregarded the obligation to not attribute to the
dumped imports injuries caused by "other factors", and had failed to separate and distinguish injuriescaused by those "other factors" from the injury caused by the dumped imports.
 68  The European
Communities responded with a request for a preliminary ruling, asking the Panel to dismiss India's
claim under Article 3.5 insofar as it concerned aspects of the original determination which were thesubject of a claim before the original panel, which was not pursued before that panel.
 69  India asked
the Panel to reject the European Communities' request for a preliminary ruling. 70
74. The Panel stated that:
… a claim which, as a legal and practical matter, could have been
raised and pursued in the original dispute, but was not, cannot be
raised on the same facts and legal premises in an Article 21.5
proceeding to determine the existence or consistency of measures
taken to comply with the recomme ndation of the DSB in the original
dispute. 71
According to the Panel, neither Article 21.5 of the DSU nor any other provision entitles India to such
a "second chance". 72  The Panel concluded that:
…  with respect to India's claim 6, insofar as it concerns the
consistency of the EC's measure with the obligation in Article 3.5 to
ensure that injuries caused by "other factors" not be attributed to thedumped imports, the EC's request for preliminary ruling has merit.  We
consider that this aspect of India's claim is not properly before us,
having been disposed of by the Panel in the original Report and not
appealed, and will not make any ruling on it.
 73
                                                     
68In addition, India claimed before the Article 21.5 Panel that the European Communities had acted
inconsistently with Article 3.5 by failing to establish a causal link between dumped imports and the injuryallegedly suffered by the domestic industry. (Panel Report, para. 6.218)
69Ibid. , para. 6.30.
70Ibid. , para. 6.34.
71Ibid. , para. 6.43.  The Panel disagreed with India that the original panel's finding on India's claim
under Article 3.5 concerning "other factors" was an exercise of  judicial economy .  In the Panel's view, it was a
finding that India had failed to present a  prima facie  case of violation. ( Ibid. , para. 6.44)
72Ibid. , para. 6.43.
73Ibid. , para. 6.53.  However, the Panel did rule on the merits of another aspect of India's claim under
Article 3.5, namely the existence of a causal link between dumped imports and injury.  The Panel found that theEuropean Communities' finding of a causal link is not inconsistent with Article 3.5. ( Ibid. , para. 6.233)  India
has not appealed this finding.WT/DS141/AB/RW
Page 25
75. In this appeal, India requests that we  reverse  the Panel's finding dismissing its claim under
Article 3.5 relating to "other factors", and complete the legal analysis. 74  India argues that its claim
under Article 3.5 forms part of the matter before the Article 21.5 Panel because India identified thisclaim in its request for the establishment of that Pa nel.  In India's view, the Panel was not precluded
from examining this claim, even though the original panel had dismissed it.  Referring to our Report
in  Canada – Aircraft (Article 21.5 – Brazil) ,  India submits that the measure at issue in this
implementation dispute is a  new  measure that is legally separate and distinct from the  original
measure.
 75  India argues further that an implementati on dispute is not confined to examining the
measures taken to comply from the perspective of the claims, arguments, and factual circumstancesrelated to the measure that was the subject of the  original   proceedings.
 76  In support of this position,
India asserts that, in the  US – FSC (Article 21.5 – EC)   implementation dispute, a claim under
Article III of the  General Agreement on Tariffs and Trade 1994  (the "GATT 1994") was accepted on
appeal, even though the European Communities could have raised it during the original proceedings,
but did not. 77
76. India also contends that the Panel erred in finding the situation in these implementation
proceedings to be analogous to the situation in  US – Shrimp (Article 21.5 – Malaysia) . 78  In India's
view, the measure in  US – Shrimp (Article 21.5 – Malaysia)   was the  same  measure that had been
found to be consistent with obligations of the World Trade Organization (the "WTO") in the originalproceedings.
 79  In this dispute, India notes that the European Communities re-examined causation in
the redetermination as a consequence of revised dumping and injury findings.  Therefore, in India'sview, the causation analysis is a  new  component of the measure taken to comply that was not part of
the measure before the original panel.
 80
77. The European Communities responds that we should  uphold  the Panel's ruling dismissing
India's claim under Article 3.5 relating to "other factors". 81  The European Communities argues that it
was under no obligation to correct, in the redetermination, its findings on "other factors", because theoriginal panel had not ruled that these findings were inconsistent with Article 3.5.
 82  The European
                                                     
74India's appellant's submission, para. 154.
75Ibid. , paras. 151-152, referring to Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) ,
paras. 36 and 41.
76Ibid. , para. 136.
77Ibid. , para. 146.
78Ibid. , paras. 148 ff, referring to Panel Report, paras. 6.50 and 6.52.
79Ibid. , para. 149, referring to Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 89.
80India's statement at the oral hearing.
81European Communities' appellee's submission, para. 121.
82Ibid., para. 142.WT/DS141/AB/RW
Page 26
Communities concludes, therefore, that the aspects of the redetermination relating to "other factors"
are not part of the measure "taken to comply" with the recommendations and rulings of the DSB inthe original dispute.
 83  According to the European Commun ities, claims challenging measures  other
than those taken to comply cannot form part of Article 21.5 proceedings.  The European Communities
agrees with the Panel's reliance on our findings in  US – Shrimp (Article 21.5 – Malaysia) . 84  In the
European Communities' view, the implementation disputes in  Canada – Aircraft (Article 21.5
– Brazil)  and in  US – FSC (Article 21.5 – EC)   can be distinguished from the present Article 21.5
proceedings because those disputes concerned  new  claims challenging  modified   aspects of the
measure. 85  The European Communities emphasizes that the original panel's finding rejecting India's
claim relating to "other factors" represents the final resolution of the dispute between the parties,because it forms part of a panel report adopted by the DSB.  For this reason, the EuropeanCommunities maintains that India is precluded from reasserting this claim in these Article 21.5proceedings.
B. Analysis
78. In examining whether India's claim under Article 3.5 relating to "other factors" was properly
before the Panel, we must first establish the appropriate  subject-matter  of Article 21.5 proceedings.
Article 21.5 provides in relevant part:
Where there is disagreement as to the existence or consistency with a
covered agreement of measures taken to comply with therecommendations and rulings such dispute shall be decided through
recourse to these dispute settlement procedures, including wherever
possible resort to the original panel.
As in  original   dispute settlement proceedings, the "matter" in Article 21.5 proceedings consists of
two elements:  the specific  measures  at issue and the legal basis of the complaint (that is, the
claims ).
 86  If a  claim   challenges a  measure   which is not a "measure taken to comply", that  claim
cannot properly be raised in Article 21.5 proceedings.  We agree with the Panel  that it is, ultimately,
for an Article 21.5 panel—and not for the complainant or the respondent—to determine which of the
                                                     
83European Communities' appellee's submission, para. 134.
84Ibid., para. 149.
85Ibid., paras. 136 and 160.
86Appellate Body Report, Guatemala – Cement I , paras. 72 and 76, interpreting Article 7 of the DSU.WT/DS141/AB/RW
Page 27
measures listed in the request for its establishment are "measures taken to comply". 87  Although the
issue raised by India in this appeal relates primarily to the scope of  claims  that may be raised in
Article 21.5 proceedings, this issue is intertwined with the question of which  measures   may be
considered as "measures  taken to comply " with the DSB rulings in an original dispute.
79. We addressed the function and scope of Article 21.5 proceedings for the first time in  Canada
– Aircraft (Article 21.5 – Brazil) .  There, we found that Article 21.5 panels are not merely called upon
to assess whether "measures taken to comply" implement specific "recommendations and rulings"adopted by the DSB in the original dispute.
 88  We explained there that the mandate of Article 21.5
panels is to examine either the "existence" of "measures taken to comply" or, more frequently, the"consistency with a covered agreement " of implementing measures.
 89  This implies that an
Article 21.5 panel is not confined to examining the "measures taken to comply" from the perspectiveof the claims, arguments, and factual circumstances re lating to the measure that was the subject of the
original   proceedings.
 90  Moreover, the relevant facts bearing upon the "measure taken to comply"
may be different from the facts relevant to the measure at issue in the original proceedings.  It is to be
expected, therefore, that the claims, arguments, and factual circumstances relating to the "measuretaken to comply" will not, necessarily, be the same as those relating to the measure in the originaldispute.
 91  Indeed, a complainant in Article 21.5 proceedings may well raise  new  claims, arguments,
and factual circumstances different from those raised in the original proceedings, because a "measuretaken to comply" may be  inconsistent  with WTO obligations in ways different from the original
measure.  In our view, therefore, an Article 21.5 panel could not properly carry out its mandate to
                                                     
87The Panel stated in paragraph 6.17 of the Panel Report:
To the extent a party may have challenged, in a request for establishment of
an Article 21.5 panel, measures which were not "taken to comply" by the
implementing Member, it is our view that a Panel may decline to address
claims concerning such measures. (original boldface)
In paragraphs 6.13 ff of the Panel Report, the Panel re fers, in support of this interpretation, to the panel
reports in  Australia – Salmon (Article 21.5 – Canada)  (para. 7.10.22) and  Australia – Automotive Leather II
(Article 21.5 – US)  (para. 6.4).
88Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 40.
89Ibid. , paras. 40-41.  The panels in  EC – Bananas III (Article 21.5 – Ecuador)  (paras. 6.8-6.9) and
Australia – Salmon (Article 21.5 – Canada) (para. 7.10.9) reached essentially the same conclusion.
90Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 41.
91Ibid.WT/DS141/AB/RW
Page 28
assess whether a "measure taken to comply" is  fully consistent  with WTO obligations  if it were
precluded from examining claims additional to, and different from, the claims raised in the originalproceedings.
 92
80. This appeal, however, raises an issue different from the issue that was before us in  Canada –
Aircraft (Article 21.5 – Brazil) .  Here, India did not raise a  new  claim before the Article 21.5 Panel;
rather, India reasserted in the Article 21.5 proceedings the  same   claim that it had raised before the
original   panel in respect of a component of the implementation measure which was the same as in the
original measure.  This  same   claim was dismissed by the original  panel, and India did not appeal that
finding.
81. Despite this previous dismissal, and despite India's decision not to appeal it, India insists that
it should be entitled to reassert its claim under Article 3.5 relating to "other factors" in theseArticle 21.5 proceedings.  India argues that it should be entitled to do so because the "measure takento comply" in this dispute is "separate and distinct " from the measure subject to the original dispute.
 93
For support, India refers to our Report in  Canada – Aircraft (Article 21.5 – Brazil) ,  where we stated
that:
In principle, a measure which has been "taken to comply with the
recommendations and rulings" of the DSB will  not  be the same
measure as the measure which was the subject of the original dispute,so that, in principle, there would be two separate and distinct
measures:  the original measure which  gave rise  to the
recommendations and rulings of the DSB, and the "measures taken to
comply" which are – or should be – adopted to  implement  those
recommendations and rulings.
 94 (original italics;  footnote omitted)
                                                     
92As we put it in  Canada – Aircraft (Article 21.5 – Brazil) :
Indeed, the utility of the review envisaged under Article 21.5 of the DSU
would be seriously undermined if a panel were restricted to examining thenew measure from the perspective of the claims, arguments and factual
circumstances that related to the original measure, because an Article 21.5
panel would then be unable to examine fully the "consistency with acovered agreement of the measures taken to comply", as required byArticle 21.5 of the DSU.
(Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 41)  We defined the function
of Article 21.5 proceedings in the same vein in our Report in  US – Shrimp (Article 21.5 – Malaysia)  (para. 87).
93India's appellant's submission, para. 151.
94Appellate Body Report, Canada – Aircraft (Article 21.5 – Brazil) , para. 36.  In  US – Shrimp
(Article 21.5 – Malaysia),  we recalled our rulings on this issue, explicitly referring to our Report in  Canada –
Aircraft (Article 21.5 – Brazil) . (Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 86)WT/DS141/AB/RW
Page 29
82. Relying on this, India contends that it is  not,  in fact, challenging the same measure that was
before the original panel.  India maintains that, although some aspects of the measure remain the
same, the redetermination must be considered "as a whole new measure" because it is not capable ofbeing divided into separate elements.
 95
83. In contrast, the European Communities contends that there are  limits  to the scope of the
claims that may be raised in Article 21.5 proceedings, even where such claims challenge "measurestaken to comply" as inconsistent with WTO obligations , in contrast to measures that gave rise to the
original   proceedings.  The European Communities refers to our Report in  US – Shrimp (Article 21.5
– Malaysia) , on which the Panel also relied
 96, where we stated:
With respect to a claim that  has  been made when a matter is
referred by the DSB for an Article 21.5 proceeding, Malaysia seems
to suggest as well that a panel must re-examine, for WTO-
consistency, even those aspects of a new measure that were part of a
previous measure that was the subject of a dispute, and were foundby the Appellate Body to be  WTO–consistent  in that dispute, and
that remain unchanged as part of the new measure.
 97 (original italics)
We concluded in that appeal that:
… the [ US – Shrimp (Article 21.5 – Malaysia) ] Panel properly
examined Section 609 as part of its examination of the totality of the
new measure, correctly found that Section 609 had not been changed
since the original proceedings, and rightly concluded that our ruling
in  United States – Shrimp  with respect to the consistency of Section
609, therefore, still stands. 98
84. In the light of these considerations, we turn to  an examination of the measure taken to comply
in this implementation dispute.  In doing so, we look to the various aspects of the redeterminationcarried out by the European Communities in order to comply with the DSB rulings in the original
dispute.
85. We agree with India that the investigating authorities of the European Communities were
required to revise the original determination of du mping and injury in order to comply with the DSB
recommendations and rulings.  Towards this end, the European Communities recalculated thedumping margins  without  applying the practice of "zeroing" that had been found to be inconsistent
with WTO obligations in the original dispute.  According to the recalculation, two of the  individually
                                                     
95India's response to questioning at the oral hearing.
96Panel Report, para. 6.50.
97Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 89.
98Ibid. , para. 96.WT/DS141/AB/RW
Page 30
examined Indian producers were  not  dumping. 99  The investigating authorities deducted the imports
attributable to those two producers from the  volume   of dumped imports, and, accordingly, the
volume of dumped imports in the redetermination was  lower  than in the original determination.
According to EC Regulation 1644/2001, the investig ating authorities of the European Communities
also "re-examined" whether a causal link between the two  revised   elements—dumped imports and
the injury to the domestic industry—still existed, and the Panel reviewed that re-examination. 100
86. The  amount  of dumped imports will, of course, have an impact on the assessment of the
effects  of the "dumped imports" for the purposes of determining  injury .  It is clear, therefore, that the
revised findings on dumping and injury could have a bearing on whether a causal link exists betweendumping and injury.  But whilst a revised finding of  dumping  will, in all likelihood, have an impact
on the "effect of  dumped  imports", we see no reason to conclude as well that this revised finding
would have any impact on the "effects … of known factors  other than   the dumped imports" in this
dispute.
 101  Accordingly, we are of the view that the investigating authorities of the European
Communities were not required to change the determination as it related to the "effects of other
factors" in this particular dispute.  Moreover, we do not see why that part of the redetermination thatmerely incorporates elements of the original determination on "other factors" would constitute aninseparable element of a measure taken to comply with the DSB rulings in the original dispute.Indeed, the investigating authorities of the Europ ean Communities were able to treat this element
separately.  Therefore, we do not agree with India that the redetermination can only be considered "asa whole new measure".
 102
87. We conclude, therefore, that, in these Article 21.5 proceedings, India has raised the  same
claim under Article 3.5 relating to "other factors" as it did in the original proceedings.  In doing so,
India seeks to challenge an aspect of the original measure which has not changed, and which theEuropean Communities did not have to change, in  order to comply with the DSB recommendations
and rulings to make that measure consistent with the European Communities' WTO obligations.
                                                     
99In the original determination, the European Communities treated all  imports from India as "dumped"
because it found, in applying the practice of "zeroing" , that all of the individually-examined producers were
dumping.  The original panel ruled that all import transactions attributable to a producer found to be dumpingmay be considered as "dumped" for purposes of making a determination of injury. (Original Panel Report,para. 6.137)
100Panel Report, paras. 6.228 and 6.233.
101We do not see how a change in the volume of "dumped imports" would affect the relationship
between injury caused by "dumped imports" and injury caused by "other factors" in a situation where those
"other factors" alone do not  cause injury.  However, a change in the volume of "dumped imports" could affect
this relationship in a situation where "other factors" cause a certain amount of injury.
102India's response to questioning at the oral hearing.WT/DS141/AB/RW
Page 31
88. For these reasons, we agree with the Panel's st atement distinguishing, in this respect, the
Canada – Aircraft (Article 21.5 – Brazil )  dispute from these Article 21.5 proceedings:
In that case, Canada had implemented the recommendation of the
DSB by adopting a new and different measure.  In the Article 21.5proceeding, Brazil made claims regarding that measure that it had not
made in the original dispute.  Canada objected to claims raised by
Brazil against the new measure on the grounds that no similar claims
had been raised against the original measure.  Had Canada's objection
been upheld, Brazil would have been barred from making claims that
could not have been raised in the original proceedings.  The issue
before us is whether India should be allowed to raise, in thisArticle 21.5 proceeding, claims with respect to Article 3.5 which it
could and  did raise before the original panel, but which it did not
pursue, and which the Panel dismissed for failure to present a  prima
facie  case of violation.
 103 (original boldface)
We agree with the Panel that the  Canada – Aircraft (Article 21.5 – Brazil)  dispute involved a  new
claim challenging a  new  component of the measure taken to comply which was not part of the
original measure.  The situation in  Canada – Aircraft (Article 21.5 – Brazil)  was thus different from
the situation in this appeal.
89. Nor does our finding in  US – FSC (Article 21.5 – EC)   support India's position in this
appeal. 104  In that implementation dispute, the Article 21.5 panel ruled on a  new  claim under
Article III of the GATT 1994 that the European Communities had not raised in the originalproceedings.  We upheld that ruling on appeal.  In that dispute, the European Communities challenged
a "foreign content limit" (which is similar to a local content requirement) imposed by the "FSC
Repeal and Extraterritorial Income Exclusion Act of 2000 (ETI)"
 105 on foreign trade property eligible
for special tax treatment.  That provision established a  different  "foreign content limit" from the one
contained in the original "Foreign Sales Corporation (FSC) regime" 106, which the United States had
changed   in order to comply with the DSB recommendations and rulings in the original dispute.  In
other words, the  US – FSC (Article 21.5 – EC)  dispute involved a  new  claim challenging a
changed  component of the measure taken to comply, while this dispute, by contrast, concerns the
same   claim against an  unchanged  component of the implementation measure that was part of the
                                                     
103Panel Report, para. 6.48.
104India's appellant's submission, para. 146.
105United States Public Law 106-519, 114 Stat. 2423 (2002).
106Sections 921-927 of the Internal Revenue Code and Related Measures Establishing Special Tax
Treatment for Foreign Sales Corporations.WT/DS141/AB/RW
Page 32
original measure and that was not found to be inconsistent with WTO obligations. 107  Therefore, the
situation in  US – FSC (Article 21.5 – EC)  was different from the situation in this appeal.
90. Having distinguished the situations in these two previous implementation disputes from the
situation in this appeal, we turn next to the question of the effect of a ruling adopted by the DSB in
an original dispute for the parties to Article 21.5 proceedings.  The European Communities argues
that a ruling adopted by the DSB provides a final resolution to the dispute between the parties as itrelates to the particular claim and the specific aspect of the measure.
 108  As we have noted, the
US – Shrimp (Article 21.5 – Malaysia)   dispute involved a claim against an aspect of the
implementation measure that was the  same   as in the  original   measure, and that we had found to be
not  inconsistent  with WTO obligations in the original dispute.  In that Article 21.5 dispute, we ruled:
We wish to recall that panel proceedings under Article 21.5 of the
DSU are, as the title of Article 21 states, part of the process of the"Surveillance of Implementation of Recommendations and Rulings "
of the DSB.  This includes Appellate Body Reports.  To be sure, the
right of WTO Members to have recourse to the DSU, including under
Article 21.5, must be respected.  Even so, it must also be kept in
mind that Article 17.14 of the DSU provides not only that Reports ofthe Appellate Body "shall be" adopted by the DSB, by consensus, but
also that such Reports "shall be … unconditionally accepted by the
parties to the dispute. …"  Thus, Appellate Body Reports that are
adopted by the DSB are, as Article 17.14 provides, "…
unconditionally accepted by the parties to the dispute", and,therefore, must be treated by the parties to a particular dispute as a
final resolution to that dispute.  In this regard, we recall, too, that
Article 3.3 of the DSU states that the "prompt settlement" of disputes
"is essential to the effective functioning of the WTO". 109 (underlining
added)
91. Thus, we concluded there that an adopted Appellate Body Report must be treated as a  final
resolution   to a dispute between the parties to that dispute.  We based this conclusion on Article 17.14
of the DSU, which deals with the effect of adopted Appellate Body Reports (as opposed to  panel
reports).  Article 17.14 reads, in relevant part:
                                                     
107We also agree with the Panel's statements, in paragraphs 6.46 and 6.49 of the Panel Report, that the
claims raised in  EC – Bananas III (Article 21.5 – Ecuador) ,  as well as those raised in  Australia – Salmon
(Article 21.5 – Canada) ,  concerned aspects of the "measures taken to comply" in those disputes which were
different  from the measures subject to the respective original disputes.
108European Communities' appellee's submission, paras. 150-151.
109Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia) , para. 97.WT/DS141/AB/RW
Page 33
Adoption of Appellate Body Reports
An Appellate Body report shall be adopted by the DSB and
unconditionally accepted by the parties to the dispute unless the DSB
decides by consensus not to adopt the Appellate Body report within
30 days following its circulation to the Members. (footnote omitted)
92. The issue raised in this appeal is similar to the issue we resolved in  US – Shrimp (Article 21.5
– Malaysia) .  In this appeal, however, the original panel's finding on India's claim under Article 3.5
relating to "other factors" was  not appealed   in the original dispute.  Accordingly, the finding of the
original panel relating to that claim was adopted by the DSB as part of a  panel  report, and, therefore,
Article 17.14, which deals with the adoption of  Appellate Body   Reports, does not dispose of the issue
before us.
93. All the same, in our view, an  unappealed  finding included in a panel report that is  adopted
by the DSB must be treated as a  final resolution  to a dispute between the parties in respect of the
particular   claim and the  specific  component of a measure that is the subject of that claim.  This
conclusion is supported by Articles 16.4 and 19.1, paragraphs 1 and 3 of Article 21, and Article 22.1of the DSU.  Where a panel concludes that a measure is inconsistent with a covered agreement, thatpanel shall  recommend ,  according to Article 19.1, that the Member concerned bring that measure
into conformity with that agreemen t.  A panel report, including the  recommendations  contained
therein, shall be  adopted   by the DSB within the time period specified in Article 16.4—unless
appealed.  Members are to  comply  with recommendations and rulings  adopted  by the DSB
promptly, or within a reasonable period of time, in accordance with paragraphs 1 and 3 of Article 21of the DSU.  A Member that does not comply with the recommendations and rulings adopted by theDSB within these time periods must face the consequences set out in Article 22.1, relating tocompensation and suspension of concessions.  Thus, a reading of Articles 16.4 and 19.1, paragraphs 1and 3 of Article 21, and Article 22.1, taken together, makes it abundantly clear that a panel findingwhich is not appealed, and which is included in a panel report  adopted   by the DSB, must be accepted
by the parties as a  final  resolution to the dispute between them, in the same way and with the same
finality as a finding included in an Appellate B ody Report adopted by the DSB—with respect to the
particular claim and the specific component of the measure that is the subject of the claim.  Indeed,the European Communities and India agreed at the oral hearing that both panel reports and AppellateBody Reports would have the same effect, in this respect, once adopted by the DSB.
 110
                                                     
110India's and the European Communities' responses to questioning at the oral hearing.WT/DS141/AB/RW
Page 34
94. On this point, we recall that we resolved the question of the effect of findings adopted by the
DSB as part of a  panel  report in the same vein in  Mexico – Corn Syrup (Article 21.5 – US).   In that
implementation dispute, we relied on Article 3.2 of the DSU, which emphasizes the need for securityand predictability in the trading system, and on Article 3.3 of the DSU, which stresses the necessity
for the prompt settlement of disputes.  There, we treated certain findings of the original panel that had
not  been appealed in the original proceedings, and that had been adopted by the DSB, as a final
resolution to the dispute between the parties in respect of the particular claim and the specific
component of the measure that was the subject of the claim.  We observed there that "Mexico seemsto seek to have us revisit the original panel report"
 111, and added that:
… the original panel report, regarding the  initial measure (SECOFI's
original determination), has been adopted and that these Article 21.5
proceedings concern a  subsequent   measure (SECOFI's
redetermination).  We also note that Mexico did not appeal the
original panel's report, and that Articles 3.2 and 3.3 of the DSUreflect the importance to the multilateral trading system of security,
predictability and the prompt settlement of disputes.  We see no basis
for us to examine the original panel's treatment of the alleged
restraint agreement.
 112 (original italics)
95. We, therefore, agree with the Panel in this dispute that:
… the same principle [as that expressed in Article 17.14] applies to
those aspects of the Panel's report that are not appealed and are thus
not addressed by the Appellate Body.  Thus, the portions of theoriginal Report of the Panel that are not appealed, together with the
Appellate Body report resolving the issues appealed, must, in our
view, be considered as the final resolution of the dispute, and must be
treated as such by the parties, and by us, in this proceeding.
 113
(footnote omitted)
                                                     
111Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 78.
112Ibid. , para. 79.
113Panel Report, para. 6.51.  The Panel found support for its view in our finding in  Japan – Alcoholic
Beverages II  that "[a]dopted panel reports are an important part of the GATT  acquis .  …  They create legitimate
expectations among WTO Members, and, therefore, should  be taken into account where they are relevant to any
dispute.  However, they are not binding, except with respect to resolving th e particular dispute between the
parties to that dispute ". (Ibid. , footnote 73 to para. 6.51, quoting Appellate Body Report, Japan – Alcoholic
Beverages II , at 108) (emphasis added)WT/DS141/AB/RW
Page 35
96. We consider next whether the fact that the Panel dismissed India's claim because India had
not established a  prima facie   case has any relevance for our decision on the effect of the adoption by
the DSB of a finding of a panel report that was not appealed.  We recall that, when we ruled inUS – Shrimp (Article 21.5 – Malaysia)   that a finding adopted by the DSB should be treated as a final
resolution to a dispute, we relied on the fact that, in our original Report in  US – Shrimp ,  we had
found that the  unchanged   aspect of the measure, as such, was  consistent   with Article XX of the
GATT 1994.  Here, however, the original panel ruled that India had failed to present a  prima facie
case in respect of its claim under Article 3.5 relating to "other factors".
 114  In our view, the effect, for
the parties, of findings adopted by the DSB as part of a panel report is the same, regardless of whethera panel found that the complainant failed to establish a  prima facie   case that the measure is
inconsistent with WTO obligations, that the Panel found that the measure is fully consistent withWTO obligations, or that the Panel found that the measure is not consistent with WTO obligations.  Acomplainant that, in an original proceeding, fails to establish a  prima facie  case should not be given a
"second chance" in an Article 21.5 proceeding, and thus be treated more favourably than a
complainant that did establish a  prima facie   case but, ultimately, failed to prevail before the original
panel, with the result that the panel did not find the challenged measure to be inconsistent with WTOobligations.  Nor should a defending party be subject to a second challenge of the measure found notto be inconsistent with WTO obligations, merely  because the complainant failed to establish a  prima
facie  case, as opposed to failing ultimately to persuade the original panel.  Once adopted by the DSB,
both findings amount to a final resolution to the issue between the parties with respect to the particular
                                                     
114The Panel stated that:
Neither the Panel nor the Appellate Body in the original dispute had the
opportunity to consider arguments with respect to India's claim in theoriginal proceeding concerning the consistency of the EC's anti-dumpingduty with Article 3.5 of the AD Agreement concerning consideration of"other factors" of injury, because India did not present arguments in support
of its claim.  The Panel did, however, rule on India's claim, finding that
India had failed to present a prima facie  case on this claim, and that aspect
of the Panel's report was adopted without modification.
(Panel Report, para. 6.52) (original boldface)WT/DS141/AB/RW
Page 36
claim and the specific aspects of the measure that are the subject of the claim. 115  Moreover, here,
India decided not to appeal the panel finding at issue in the original proceedings, even though it couldhave done so, inasmuch as the issue was not of an exclusively factual nature.  Hence, India itselfseems to have accepted the finding as final.
97. Therefore, we agree with the Panel's conclusion that:
When considering the status of adopted panel reports, the Appellate
Body has indicated that they are binding on the parties "with respect
to that particular dispute".
  In our view, the Panel's ruling in the
original dispute disposed of India's claim in this regard.  Thus, we
consider that India is precluded from reasserting in this proceeding
and presenting arguments in support of a claim challenging the EC'sconsideration of "other factors" of injury.
 116 (footnotes omitted)
98. The Panel's ruling that India's claim under Article 3.5 relating to "other factors" was not
properly before it is also consistent with the object and purpose of the DSU.  Article 3.3 provides thatthe  prompt  settlement of disputes is "essential to the effective functioning of the WTO".  Article 21.5
advances the purpose of achieving a prompt settlement of disputes by providing an expeditiousprocedure to establish whether a Member has fully complied with the recommendations and rulings ofthe DSB.
 117  For that purpose, an Article 21.5 panel is to complete its work within 90 days, whereas a
panel in an original dispute is to complete its wo rk within 9 months of its establishment, or within
                                                     
115We note that, at the oral hearing, the participants agreed that a finding adopted by the DSB,
expressed in terms of WTO-consistency or the failure to present a  prima facie  case, has the same effect in
terms of providing a final resolution to a dispute, in this respect, between the parties.
We also recall that the Panel noted, in paragraph 6.44 of the Panel Report, that the original panel's
dismissal of India's claim under Article 3.5 relating to "other factors" was  not  an exercise of "judicial
economy".  The issue raised in this appeal is different from a situation where a panel, on  its  own initiative,
exercises "judicial economy" by not ruling on the substance of a claim.  In this respect, we recall our statementin  Australia – Salmon   that:
The principle of judicial economy has to be applied keeping in mind the aim
of the dispute settlement system.   This aim is to resolve the matter at issueand "to secure a positive solution to a dispute".  To provide only a partial
resolution of the matter at issue would be false judicial economy.  A panel
has to address those claims on which a finding is necessary in order toenable the DSB to make sufficiently precise recommendations and rulingsso as to allow for prompt compliance by a Member with thoserecommendations and rulings "in order to ensure effective resolution ofdisputes to the benefit of all Members."
(Appellate Body Report, Australia – Salmon , para. 223) (footnotes omitted)
We believe that in a situation where a panel, in declin ing to rule on a certain claim, has provided only a
partial resolution of the matter at issue, a complainant should not be held responsible for the panel's falseexercise of judicial economy, such that a complainant would not be prevented from raising the claim in asubsequent proceeding.
116Panel Report, para. 6.52.
117Ibid. , para. 6.45.WT/DS141/AB/RW
Page 37
6 months of its composition.  It would be incomp atible with the function and purpose of the WTO
dispute settlement system if a claim could be reasserted in Article 21.5 proceedings after the originalpanel or the Appellate Body has made a finding that the challenged aspect of the original measure isnot  inconsistent with WTO obligations, and that report has been adopted by the DSB.  At some point,
disputes must be viewed as definitely  settled  by the WTO dispute settlement system .
99. In the light of the foregoing, we conclude that the original panel's finding on India's claim
under Article 3.5 relating to "other factors" provides a "final resolution" to the dispute in thisrespect
 118 between the parties, because it was not appealed, and forms part of a panel report adopted
by the DSB.  Therefore, we  uphold  the Panel's finding, in paragraph 6.53 of the Panel Report, that
India's claim under Article 3.5 of the  Anti-Dumping Agreement ,  as far as it relates to the European
Communities' consideration of "other factors", was not properly before the Panel.
100. As a result, we do not need to rule on the issue of whether the Panel erred, in its alternative
finding, in paragraph 6.246 of the Panel Report, that the European Communities had ensured that
injuries caused by "other factors" was not attributed to the dumped imports, and thus had not acted
inconsistently with Article 3.5 of the  Anti-Dumping Agreement .  We recall that, at the oral hearing,
India confirmed that its appeal against the Panel's alternative finding is conditional on our reversingthe Panel's finding that India's claim under Article 3.5 relating to "other factors" was not properly
before the Panel, and that, therefore, we need not reach this issue if we were to rule as we, in fact,have ruled.
 119
V. Paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement
A. Introduction
101. India appeals the Panel's finding that the European Communities did not act inconsistently
with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement . 120  India contends that the
European Communities did act inconsistently with those provisions, because the investigatingauthorities of the European Communities found, fo r purposes of determining injury, that  all  imports
attributable to Indian producers or exporters for which  no individual  margin of dumping was
calculated were  dumped .  India argues that this "determination by the EC neither rested on positive
evidence, nor was objective, and, accordingly, was inconsistent with Articles 3.1 and 3.2 of the
                                                     
118By this we mean this particular claim and the specific component of the measure that was the subject
of that claim.
119India's response to questioning at the oral hearing.
120India's appellant's submission, para. 84;  Panel Report, para. 6.144.WT/DS141/AB/RW
Page 38
Anti-Dumping Agreement ." 121  According to India, the European Communities was required to
determine the volume of dumped imports attributable to producers that  were not   examined
individually  on the basis of the  proportion  of imports found to be dumped from producers that  were
examined individually. 122  In other words, India argues that, where a certain proportion of the
volume of the imports attributable to producers examined individually is found to be dumped,
paragraphs 1 and 2 of Article 3 require the investigating authorities to determine the volume ofdumped imports attributable to the producers that were  not  individually examined in the  same
proportion .
102. We begin by recalling the findings of the original panel and the Article 21.5 Panel insofar as
they are relevant for resolving this issue.  Before the  original panel ,  India claimed that, by including
import  transactions  for which there was no evidence of dumping in the volume of dumped imports
when determining injury, the European Communities violated paragraphs 1 and 2 of Article 3.  TheEuropean Communities contended that the volume of dumped imports, for purposes of Article 3,
includes  all  imports originating in the investigated  country  found to be dumping.  The original
panel disagreed with India, and concluded that dumping is a determination made with reference toimports from a particular  producer  or  exporter ,  and not with reference to individual
transactions .
 123  In the original panel's view, if a producer or exporter that is examined individually is
found to be dumping,  all  import transactions attributable to that producer or exporter may be
considered as dumped.  The original panel found no violation of Article 3 in relation to thedetermination of the volume of dumped imports.
 124  This latter finding of the original panel was  not
appealed.
103. In the  redetermination  that gave rise to this appeal, the investigating authorities of the
European Communities recalculated dumping margins for the five Indian producers and exporters thathad been examined  individually  in the original determination that led to the original measure.  They
did so without applying the practice of "zeroing", which had been found to be inconsistent withArticle 2.4.2 in the original proceedings.
 125  In this recalculation, the investigating authorities found
that three of the five Indian producers examin ed individually were dumping, and two were  not.  It is
undisputed between the parties that the two Indian producers found  not  to be dumping accounted for
                                                     
121India's appellant's submission, para. 18.
122Ibid. , para. 31.
123Original Panel Report, para. 6.136.
124Ibid. , para. 6.142.
125The original panel found that the European Communities had acted inconsistently with Article 2.4.2
by establishing the margins of dumping based on a methodology which included zeroing negative pricedifferences calculated for some models of bed linen. ( Ibid. , para. 6.119)  We upheld this finding on appeal.
(Appellate Body Report, EC – Bed Linen , para. 66)WT/DS141/AB/RW
Page 39
53 percent of all imports attributable to the five producers which were  examined individually.  Based
on this recalculation, the European Communities concluded that  all  imports attributable to  all other
Indian producers or exporters—which were  not  examined individually— were  dumped .  For purposes
of determining injury, the investigating authorities  excluded   from the volume of dumped imports the
imports from the two producers that were examined  individually  and found  not  to be dumping 126,
but included all imports from Indian producers that had not been examined individually and forwhich, therefore, there was no direct evidence from the investigation.
104. Before the  Article 21.5 Panel ,  India claimed that the European Communities violated
paragraphs 1 and 2 of Article 3 by finding, in this redetermination, that  all  imports attributable to
Indian producers or exporters that were  not  individually examined were  dumped .  In reply, the
European Communities contended that nothing in the  Anti-Dumping Agreement   prohibits Members
from including in the volume of dumped imports, the volume of all imports from producers whichwere examined individually and found to be dumping, as well as  all  imports from producers which
were  not  examined individually.
105. The Panel found that the European Communities "did not act inconsistently with Articles 3.1
and 3.2 of the [Anti-Dumping] Agreement in its consideration of 'dumped imports' in this case".
 127
The Panel's finding was premised essentially on the argument that paragraphs 1 and 2 of Article 3"contain no guidance whatsoever regarding the determination of the volume of dumped imports".
 128
In the Panel's view, the fact that "Article 9.4 allows anti-dumping duties to be collected  on imports
from producers for which an individual determination of dumping … was not made … necessarilyentails that [imports attributed to] such producers are properly considered … as 'dumped imports' for
the purposes of Articles 3.1 and 3.2".
 129  The Panel concluded "that the [Anti-Dumping] Agreement
does not require an investigating authority to determine the volume of imports from producers outside
the sample that is properly considered 'dumped imports' for purposes of injury analysis on the basis ofthe proportion of imports from sampled producers that is found to be dumped."
 130
106. On appeal, India requests that we  reverse  this finding.  In India's view, paragraphs 1 and 2 of
Article 3 do not permit a determination of injury to be based on imports from producers for which
                                                     
126Panel Report, para. 6.117.  The European Communities made alternative calculations of the volume
of dumped imports from India;  one calculation included imports attributable to the producers that were found
 not  to be dumping, while the other did not.  Under both alternative calculations, the European Communities
found that the domestic industry was suffering injury. (EC Regulation 1644/2001, recital (22))
127Panel Report, para. 6.144.
128Ibid. , para. 6.127.
129Ibid. , para. 6.137. (original boldface)
130Ibid. , para. 6.144. (original boldface)WT/DS141/AB/RW
Page 40
there is "no evidence" of dumping. 131  India notes that the evidence from the sample of  examined
producers indicated that only 47 percent of the imports attributed to those producers were dumped.Therefore, according to India, the European Commun ities' determination, on the basis of this evidence
alone, that 86 percent of the  total  imports from India were dumped, and, therefore, that this was the
percentage of the "volume of the dumped imports", under paragraphs 1 and 2 of Article 3, did not
result from an "objective examination" on the basis of  "positive evidence", as required by the first
paragraph of Article 3.
 132  In India's view, imports from producers for which an  individual
determination of dumping is  not  made must be presumed  not  to have been dumped in the  same
proportion  as imports determined  not  to have been dumped from producers for which an  individual
determination of dumping  was  made. 133
107. The European Communities requests that we  uphold  the Panel's finding.  The European
Communities argues that it is entitled, for purposes of paragraphs 1 and 2 of Article 3, to treat asdumped  all  imports attributable to producers for which it did  not  make an affirmative determination
of  no  dumping.  According to the European Commun ities, this includes all imports attributable to
producers that were examined  individually  and found to be dumping, as well as  all  imports
attributable to producers that were  not  examined individually.
 134  According to the European
Communities,  all  imports attributable to producers that were  not  examined individually may be
treated as  dumped ,  for purposes of determining injury under Article 3, because Article 9.4 permits
the imposition of the "all others" duty rate on imports attributable to  non-examined  producers. 135
B. Analysis
108. We recall at the outset that the  Anti-Dumping Agreement   permits importing Members to
counteract dumping by imposing anti-dumping measures on imports from companies of exporting
                                                     
131India's appellant's submission, para. 44.
132Ibid. , para. 47.  The figure of 86 percent was derived from deducting from the total amount of
imports the volume of imports attributable to the two Indian companies that were examined individually andfound, in the redetermination, not  to be dumping.
133India emphasizes that the results from the producers that were examined  individually  are
representative  of  all  Indian producers exporting bed linen to the European Communities, because those
examined producers constituted a "sta tistically valid sample" within the meaning of the second sentence of
Article 6.10.  We return to Article 6.10 later in this Report, infra , paras. 134 ff.
134The European Communities argues that the Indian exporters that were examined  individually  are
not  necessarily representative of the  non-examined exporters.  In other words, the five Indian exporters
examined individually were not a statistically valid sa mple, as India has claimed.  Rather, according to the
European Communities, the five exporters accounted for the largest percentage of the  export volume  that could
be reasonably investigated, within the meaning of the second sentence of Article 6.10.
135The "all others" duty rate refers to the duty applied to imports from producers or exporters for which
an individual margin of dumping is not established. (See Appellate Body Report, US – Hot-Rolled Steel ,
para. 115)WT/DS141/AB/RW
Page 41
Members when an investigation demonstrates that all the requirements of that Agreement are fulfilled.
It is useful also to recall the specific standard of review under the  Anti-Dumping Agreement   that the
Panel was required to follow in this dispute.  This standard of review is set out in Article 17.6 of the
Anti-Dumping Agreement . 136  As to the facts, under Article 17.6(i), a panel "shall" determine whether
the establishment of the facts by the investigating authorities was "proper" and whether the evaluation
of those facts was "unbiased and objective".  If the establishment of the facts was proper and theevaluation was unbiased and objective, then a panel "shall not" overturn that evaluation, even thoughit might have reached a different conclusion.  As to the law, under Article 17.6(ii), first sentence, apanel "shall interpret the relevant provisions of the Agreement in accordance with customary rules of
interpretation of public international law."  Under Article 17.6(ii), second sentence, where a panelfinds from such an interpretation that a relevant provision of the  Anti-Dumping Agreement  "admits
of more than one permissible interpretation", the panel "shall find the [investigating] authorities'measure to be in conformity with the Agreement if it rests upon one of those permissible
interpretations."  We examine the issues raised in this appeal with this standard of review in mind.
109. We begin our analysis with an examination of Article 3 of the  Anti-Dumping Agreement ,
which is entitled "Determination of Injury".  Paragraphs 1 and 2 of Article 3 read as follows:
3.1 A determination of injury  for purposes of Article VI of
GATT 1994 shall be based on positive evidence  and involve an
objective examination of both (a) the volume of the dumped imports
and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these
imports on domestic producers of such products. (emphasis added)
3.2 With regard to the volu me of the dumped imports ,  the
investigating authorities shall consider whether there has been a
significant increase in dumped imports , either in absolute terms or
relative to production or consumption in the importing Member.With regard to the effect of the dumped imports on prices, the
investigating authorities shall consider whether there has been a
significant price undercutting by the dumped imports as compared
with the price of a like product of the importing Member, or whether
the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would
have occurred, to a significant degree.  No one or several of these
factors can necessarily give decisive guidance. (emphasis added)
                                                     
136Appellate Body Report, Thailand – H-Beams , para. 114.  Article 11 of the DSU defines generally a
panel's mandate in reviewing the consistency with the covered agreements of measures taken by Members.  Inour Report in  US – Hot-Rolled Steel,  we found that there is no "conflict" between Article 11 of the DSU and
Article 17.6 of the  Anti-Dumping Agreement ;  rather, the two provisions complement each other. (Appellate
Body Report, US – Hot-Rolled Steel , para. 55)WT/DS141/AB/RW
Page 42
These obligations are absolute.  They provide for no exceptions, and they include no qualifications.
They must be met by every investigating authority in every injury determination.
110. In  Thailand – H-Beams ,  we emphasized the relevance of Article 3.1 as an "overarching
provision" that informs the more detailed obligations in the succeeding paragraphs of Article 3:
Article 3 as a whole deals with obligations of Members with respect
to the determination of injury.  Article 3.1 is an overarching
provision that sets forth a Member's fundamental, substantive
obligation in this respect.  Article 3.1 informs the more detailed
obligations in succeeding paragraphs.  These obligations concern the
determination of the volume of dumped imports, and their effect on
prices (Article 3.2) … The focus of Article 3 is thus on  substantive 
obligations that a Member must fulfill in making an injury
determination. 137 (original italics;  underlining added)
111. It is clear from the text of Article 3.1 that investigating authorities must ensure that a
"determination of injury" is made on the basis of "positive evidence" and an "objective examination"
of the volume and effect of imports that  are dumped —and to the exclusion of the volume and effect
of imports that  are not dumped .  It is clear from the text of Article 3.2 that investigating authorities
must consider whether there has been a significant increase in  dumped  imports, and that  they must
examine the effect of  dumped  imports on prices resulting from price undercutting, price depression,
or price suppression.
112. Article 3.5 continues in the same vein as the initial paragraphs of Article 3 by requiring a
demonstration that dumped imports are causing injury to the domestic industry "through the  effects of
dumping ", which, of course, depends upon there being imports from producers or exporters that  are
dumped .  In addition, Article 3.5 lists "volume and prices of imports  not  sold at dumping prices" as
an example of "known factors  other than the dumped  imports" that are injuring the domestic industry
at the same time as the dumped imports.  Article 3.5 requires that this injury  not  be attributed to the
dumped imports.  Thus, injury caused by "volume and prices of imports  not  sold at dumping prices"
must be  separated and distinguished   from injury caused by the "dumped imports".  None of these
provisions of the  Anti-Dumping Agreement  can be construed to suggest that Members may include in
the volume of  dumped   imports the imports from producers that are  not  found to be dumping.
                                                     
137Appellate Body Report, Thailand – H-Beams , para. 106.WT/DS141/AB/RW
Page 43
113. Although paragraphs 1 and 2 of Article 3 do not set out a  specific   methodology that
investigating authorities are required to follow when  calculating the volume of "dumped imports", this
does not mean that paragraphs 1 and 2 of Article 3 confer unfettered discretion on investigatingauthorities to pick and choose whatever methodol ogy they see fit for determining the volume and
effects of the dumped imports.  Paragraphs 1 and 2 of Article 3 require investigating authorities to
make a determination of injury on the basis of "positive evidence" and to ensure that the injurydetermination results from an "objective examination" of the volume of dumped imports, the effectsof the dumped imports on prices, and, ultimately, the state of the domestic industry.  Thus, whatevermethodology investigating authorities choose for determining the volume of dumped imports, if thatmethodology fails to ensure that a determination of injury is made on the basis of "positive evidence"and involves an "objective examination" of  dumped   imports—rather than imports that are found  not
to be  dumped—it is not consistent with paragraphs 1 and 2 of Article 3.
114. In  US – Hot-Rolled Steel ,  we defined "positive evidence" as follows:
The term "positive evidence" relates, in our view, to the  quality  of
the evidence that authorities may rely upon in making a
determination.  The word "positive"  means, to us, that the evidence
must be of an affirmative, objective  and  verifiable  character, and
that it must be credible .
 138  (emphasis added)
In that same appeal, we also defined an "objective examination":
The term "objective examination" aims at a different aspect of the
investigating authorities' determination.  While the term "positive
evidence" focuses on the facts underpinning and justifying the injury
determination, the term "objective examination" is concerned with
the investigative process itself.  The word "examination" relates, in
our view, to the way in which the evidence is gathered, inquired into
and, subsequently, evaluated;  that is, it relates to the conduct of the
investigation generally.  The word "objective", which qualifies theword "examination", indicates essentially that the "examination"
process must conform to the dictates of the basic principles of good
faith and fundamental fairness.
 139 (footnote omitted)
                                                     
138Appellate Body Report, US – Hot-Rolled Steel , para. 192.
139Ibid. , para. 193.WT/DS141/AB/RW
Page 44
We summed up in that appeal the requirement to conduct an "objective examination" as follows:
In short, an "objective examination" requires that the domestic
industry, and the effects of dumped imports, be investigated in anunbiased  manner, without favouring the interests of any interested
party , or group of interested parties, in the investigation.  The duty of
the investigating authorities to conduct an "objective examination"
recognizes that the determination will be influenced by the
objectivity, or any lack thereof, of the investigative process.
 140
(footnote omitted, emphasis added)
We observe that, in response to our questions at the oral hearing, both participants in this appeal
confirmed that they agree with these interpretations  of the terms "positive evidence" and an "objective
examination", as set out in  US –Hot-Rolled Steel . 141
115. Moreover, at the oral hearing, none of the participants disagreed with the findings of the
original panel and the Article 21.5 Panel relating to the treatment, for purposes of determining injury,of imports attributed to producers or exporters that were  examined individually  in an investigation.
Accordingly, if a producer or exporter is found to be dumping, all imports from that producer orexporter may be  included  in the volume of dumped imports, but, if a producer or exporter is found
not  to be dumping, all imports from that producer or exporter must be  excluded  from the volume of
dumped imports.
 142
116. The issue raised in this appeal, however, does not relate to imports from producers or
exporters that  were examined individually   in an investigation.  Rather, it relates to the appropriate
treatment of imports from producers or exporters that  were not  examined individually  in such an
investigation.  The appeal before us involves an investigation in which  individual  margins of
dumping have  not  been determined for  each  Indian producer exporting to the European
Communities.  It is, of course, not necessary under the  Anti-Dumping Agreement  for investigating
authorities to examine  each   producer and exporter.  The second sentence of Article 6.10 authorizes
investigating authorities, when determining margins of dumping, to  limit their examination  where
the number of producers or exporters of the product under investigation is so large that the
                                                     
140Appellate Body Report, US – Hot-Rolled Steel , para. 193.
141These requirements of paragraphs 1 and 2 of Article 3, as well as the requirements of Article 17.6(i),
that investigating authorities establish the facts of the matter  properly  and evaluate those facts in an  unbiased
and objective  manner, are mutually supportive and reinforcing.  In  US – Hot-Rolled Steel ,  we explained in
respect of Article 17.6(i) that:
… panels must assess if the establishment of the facts by the investigating
authorities was  proper  and if the evaluation of those facts by those
authorities was  unbiased  and  objective . (original italics)
(Ibid. , para. 56)
142Original Panel Report, paras. 6.138-6.14 0;  Panel Report, paras. 6.121 and 6.131.WT/DS141/AB/RW
Page 45
determination of an  individual   margin of dumping for  each  of them would be  impracticable .  This
limited examination may be conducted in one of two alternative ways identified in Article 6.10:  theauthorities may limit their examination "either to a reasonable number of interested parties or productsby using  samples  which are statistically valid on the basis of information available to the authorities
at the time of the selection, or to the largest percentage of the volume of the exports from the country
in question which can reasonably be investigated."
117. Thus, there is a right to conduct a limited examination in the circumstances described in the
second sentence of Article 6.10.  Paragraphs 1 and 2 of Article 3 must, accordingly, be interpreted in away that permits investigating authorities to satis fy the requirements of "positive evidence" and an
"objective examination" without having to investigate each producer or exporter individually.  Thisdoes not, however, in any way, absolve investigat ing authorities from the absolute requirements in
paragraphs 1 and 2 of Article 3 that the volume of dumped imports be determined on the basis of"positive evidence" and an "objective examination".
118. We have noted that neither paragraph 1 nor paragraph 2 of Article 3—nor any other provision
of the  Anti-Dumping Agreement —sets forth a  specific   methodology that must be followed by
investigating authorities when calculating the volume of dumped imports for purposes of determininginjury.  Still, whatever methodology investigating authorities choose for calculating the volume of"dumped imports", that calculation and, ultimately, the determination of injury under Article 3, clearly
must be made on the basis of "positive evidence" and involve an "objective examination".  Theserequirements are not ambiguous, and they do not "admit of more than one permissible interpretation"within the meaning of the second sentence of  Article 17.6(ii).  Therefore, as in  US – Hot-Rolled
Steel ,  our interpretation of these requirements is based on customary rules of interpretation of public
international law, as required by the first sentence of Article 17.6(ii).
 143  This leaves no room, in this
appeal, for recourse to the second sentence of Article 17.6(ii) in interpreting paragraphs 1 and 2 ofArticle 3.
119. India argues that the European Communities failed to determine the volume of dumped
imports attributable to  non-examined producers on the basis of "positive evidence" and an "objective
examination".  Although the Indian producers that were  examined  individually and found to be
dumping accounted for only 47 percent of imports attributable to all examined producers, theEuropean Communities determined that  all  imports attributable to  non-examined producers were
dumped.  India submits that an "objective examination" of the "positive evidence" from  examined
producers would lead to the conclusion that the same proportion, that is 47 percent, of imports
                                                     
143Appellate Body Report, US – Hot-Rolled Steel , para. 130.WT/DS141/AB/RW
Page 46
attributable to  non-examined producers were dumped.  The European Communities contends that its
conclusion, for purposes of determining injury, that  all  imports attributable to  non-examined
producers are dumped, is based on "positive evidence" and an "objective examination", as required byparagraphs 1 and 2 of Article 3, because it is justified by Article 9.4.  Article 9.4 defines the
maximum anti-dumping duty that may be applied to imports from producers for which an individual
dumping margin has  not  been separately calculated—commonly referred to as the "all others" duty
rate.
 144  The European Communities argues that, inasmuch as Article 9.4 does  not  limit the  volume
of imports from  non-examined producers to which the "all others" duty rate may be applied, the
practice of the European Communities must be permissible because the  volume  of imports subject to
anti-dumping duties under Article 9 must be the  same  as the  volume  considered to be dumped for
purposes of determining injury under Article 3. 145
120. Regarding the requirement of "positive evid ence", the European Communities maintains that
it determined the volume of dumped imports on the basis of "positive evidence" under Article 3
because its investigating authorities calculated the "all others" duty rate under Article 9.4 on the basis
of the weighted average of the dumping margins established for the three producers that wereexamined and found to be dumping.  Regarding the requirement of an "objective examination", theEuropean Communities points to the fact that Article 9.4 permits the imposition of the "all others"duty rate on  all  imports from all  non-examined producers, and argues on this basis that the
European Communities is entitled to include  all  imports from non-examined producers in the
                                                     
144Article 9.4 of the  Anti-Dumping Agreement   reads:
When the authorities  have limited  their examination in accordance with the
second sentence of paragraph 10 of Article 6, any anti-dumping  duty
applied to imports from exporters or producers not included in theexamination  shall not exceed:
(i) the weighted average margin of dumping established with respect
to the selected exporters or producers  or,
(ii) where the liability for payment of anti-dumping duties is calculated
on the basis of a prospective normal value, the difference betweenthe weighted average normal value of the selected exporters orproducers and the export prices of exporters or producers notindividually examined,
provided that the authorities shall disregard for the purpose of this paragraph
any zero and de minimis  margins and margins established under the
circumstances referred to in paragraph 8 of Article 6.  The authorities shallapply individual duties or normal values to imports from any exporter or
producer not included in the examination who has provided the necessary
information during the course of the investigation, as provided for in
subparagraph 10.2 of Article 6. (emphasis added)
145European Communities' statement at the oral hearing.WT/DS141/AB/RW
Page 47
volume of  dumped  imports, when determining injury under Article 3. 146  In the view of the European
Communities, this approach must necessarily const itute an "objective examination" for purposes of
Article 3 because, if this approach were not "objective and unbiased" 147, the drafters of the
Anti-Dumping Agreement  would not have adopted it in Article 9.4.  Accordingly, the European
Communities concludes that the approach applied in this investigation satisfies the requirements of
paragraphs 1 and 2 of Article 3 to base the determination of the volume of dumped imports and,ultimately, the determination of injury, on "positive evidence" and an "objective examination".
121. India rejects the European Communities' interpretation of the "volume of dumped imports" in
Article 3 as including the volume of imports subject to the application of the "all others" duty rateunder Article 9.4.  India submits that the determination of the dumping "margin" is separate anddistinct from the imposition and collection of anti-dumping "duties".
 148  In India's view, Article 9.4
comes into play only  after  the investigating authorities have dete rmined that all the conditions for the
imposition of anti-dumping duties (namely, dumping, injury, and causation) have been fulfilled.
According to India, Article 9.4 cannot be read to  permit a derogation from the explicit requirements of
paragraphs 1 and 2 of Article 3, namely that a determination of injury must be made on the basis of"positive evidence" and an "objective examination" of the volume and the effect of the dumpedimports.
122. We turn now to an examination of Article 9, entitled "Imposition and Collection of Anti-
Dumping Duties".  Article 9.1 confers on Members the discretion to decide whether to impose an anti-dumping duty in cases where all the requirements for such imposition " have been fulfilled
 ". 149
Where these requirements " have been fulfilled " 150, Article 9.4 defines the maximum anti-dumping
duty that may be applied to exports from producers not individually examined when the investigating
                                                     
146Consistent with Article 9.4, the investigating authorities excluded from the calculation of that
weighted average the negative or zero dumping margins established for the two examined producers that werefound  not  to be dumping.
147European Communities' statement at the oral hearing.
148India's appellant's submission, para. 32.  India also argues that the European Communities and the
Panel confuse the imposition of dumping  duties   with the calculation of dumping  margins . (See Panel Report,
paras. 6.137-6.138)
149Article 9.1 of the  Anti-Dumping Agreement   reads in relevant part:
The decision whether or not to impose an anti-dumping duty in cases where
all requirements for the imposition  have been fulfilled , and the decision
whether the amount of the anti-dumping duty to be imposed shall be the full
margin of dumping or less, are decisions to be made by the authorities of the
importing Member. (emphasis added)
150Article 9.1 also entitles Members to decide whether to impose an anti-dumping duty in the full
amount of the margin of dumping, or a "lesser duty".WT/DS141/AB/RW
Page 48
authorities " have limited " their examination in accordance with either alternative provided in the
second sentence of Article 6.10. 151
123. Japan contended in its third party submission, and also in its statement at the oral hearing, that
the use of the present perfect tense in paragraphs 1 and 4 of Article 9 ("have been fulfilled" and "have
limited") is significant. 152  In our view, too, the use by the drafters of the present perfect tense is
significant;  it indicates that the imposition and collection of anti-dumping duties under Article 9 is aseparate and distinct phase of an anti-dumping action that necessarily occurs  after  the determination
of dumping, injury, and causation under Articles 2 and 3 has been made.
 153  Members have the right
to impose and collect anti-dumping duties only  after  the completion of an investigation in which it
has been established  that the requirements of dumping, injury, and causation  " have been fulfilled ".
In other words, the right to impose anti-dumping duties under Article 9 is a  consequence  of the prior
determination of the existence of dumping margins, injury, and a causal link.  The determination, bythe investigating authorities of a Member, that there is injury caused by a certain volume of dumping
necessarily precedes and gives rise to the  consequential   right to impose and collect anti-dumping
duties.
 154
124. When examining the practice of "zeroing" in the original dispute, we noted that the
requirements of Article 9 do not have a bearing on Article 2.4.2, because the rules on thedetermination  of the margin of dumping are distinct and separate from the rules on the  imposition
and collection   of anti-dumping duties.
 155  Similarly, in this implementation dispute, we are of the
view that Article 9.4, which specifies what action may be taken only  after   certain prerequisites have
                                                     
151Appellate Body Report, US – Hot-Rolled Steel , para. 116.
152Japan's third participant's submission, paras. 4 ff.
153According to Article 33.3 of the  Vienna Convention on the Law of Treaties,  where treaties have
been authenticated in two or more languages, "[t]he te rms of the treaty are presumed to have the same meaning
in each authentic text."  The Spanish terms ("se han cumplido" and "hayan limitado"), in paragraphs 1 and 4 ofArticles 9, have the same temporal meaning as the English terms ("have been fulfilled" and "have limited").The French terms ("sont remplies" and "auront limité") can also accommodate this temporal meaning.
154Korea too rejects the European Communities' inte rpretation that all imports from non-examined
producers subject to the "all others" duty rate under Article 9.4 may be treated as dumped imports for purposesof Article 3. (Korea's statement at the oral hearing)
155In  EC – Bed Linen , we noted that:
… Article 2.4.2 is not concerned with the collection of anti-dumping duties,
but rather with the determination of "the existence of margins of dumping".Rules relating to the "prospective" and "retrospective" collection of anti-dumping duties are set forth in Article 9 of the  Anti-Dumping Agreement .
The European Communities has not shown how and to what extent these
rules on the  "prospective" and "retrospective" collection of anti-dumping
duties bear on the issue of the establishment of "the existence of dumping
margins" under Article 2.4.2.
(Appellate Body Report, EC – Bed Linen , footnote 30 to para. 62)WT/DS141/AB/RW
Page 49
been determined, is of little relevance for interpreting Article 3, which sets out those prerequisites.
We do not see how Article 9.4, which authorizes the imposition of a certain maximum anti-dumpingduty  on imports from non-examined producers, is relevant for interpreting paragraphs 1 and 2 of
Article 3, which deal with the determination of injury based on the  volume   of "dumped imports".
Paragraphs 1 and 2 of Article 3 make no reference at all to Article 9.4, or to the specific methodology
set out in Article 9.4 for calculating the "all others" duty rate, which comes into play only whenimposing and collecting anti-dumping duties.  Likewise, Article 9.4 does not mention the term"dumped imports" or the "volume" of such imports.  In our view, the right to impose a certainmaximum amount of anti-dumping  duties   on imports attributable to  non-examined producers under
Article 9.4 cannot be read as permitting a derogation from the express and unambiguous requirementsof paragraphs 1 and 2 of Article 3 to determine the  volume  of dumped imports—including dumped
import volumes attributable to  non-examined producers—on the basis of "positive evidence" and an
"objective examination".  Thus, we see no basis for the European Communities' view that Article 9.4
establishes a methodology for calculating the volume of dumped imports from  non-examined
producers for purposes of determining injury on the basis of "positive evidence" and an "objectiveexamination" under paragraphs 1 and 2 of Article 3.
125. Moreover, Article 9.4, which relates to the imposition of anti-dumping duties on imports from
non-examined producers, has, by its own terms, a limited purpose as an  exception   to the rule in
Article 9.3.  Article 9.3 provides that "[t]he amount of the anti-dumping duty shall not exceed themargin of dumping as established under Article 2."
 156  When individual dumping margins are
determined for  each  producer or exporter, the  volume  of imports attributable to producers that were
examined individually and found to be dumping will match the  volume  of imports attributable to
those producers for which anti-dumping duties are collected.  However, as noted earlier, where thedetermination of individual dumping margins for each producer is  impracticable ,  the second
sentence of Article 6.10 permits investigating author ities—as an exception to the rule in the first
sentence of Article 6.10
 157—to  limit  their examination to some—and not all—producers. In such
cases, as an  exception  to the rule in Article 9.3, Article 9.4 permits the imposition of a certain
maximum amount of anti-dumping duties on imports attributable to producers that were  not
                                                     
156As a result, the amount of the anti-dumping duty collected from the individually-examined producer
will  correspond  to the individually-calculated dumping margin.  Pursuant to Article 9.1, the investigating
authorities may decide, however, that it is sufficient to apply a duty of  less  than the dumping margin.
157The first sentence of Article 6.10 requires, "as a rule", that individual dumping margins be
established for  each  producer or exporter.WT/DS141/AB/RW
Page 50
examined individually 158, irrespective of whether those producers would have been found to be
dumping had they been examined individually.  It is likely, therefore, that this "all others" duty ratewill be imposed on imports attributable at least to some producers that, in reality, might  not  be
dumping.  Hence, the reliance by the European Communities on Article 9.4, in interpreting
paragraphs 1 and 2 of Article 3, is misplaced.
126. In sum, Article 9.4 provides no guidance for determining the volume of dumped imports from
producers that  were not  individually examined on the basis of "positive evidence" and an "objective
examination" under Article 3.  The exception in Article 9.4, which authorizes the imposition of anti-dumping  duties  on imports from producers for which  no  individual dumping margin has been
calculated,  cannot be assumed  to extend to Article 3, and, in particular, in this dispute, to
paragraphs 1 and 2 of Article 3.  For the same reasons, we do not see why the volume of imports thathas been found to be dumped by non-examined producers, for purposes of determining  injury  under
paragraphs 1 and 2 of Article 3, must be  congruent  with the volume of imports from those non-
examined producers that is subject to the  imposition of anti-dumping duties  under Article 9.4, as
contended by the European Communities and the Panel.
 159
127. Having concluded that Article 9.4 does not provide justification for considering  all  imports
from  non-examined producers as  dumped  for purposes of Article 3, we turn now to consider
whether the European Communities' determination of the volume of dumped imports and, ultimately,of injury, in this investigation, was in accordance with paragraphs 1 and 2 of Article 3.  To do so, wemust examine whether this determination was made on the basis of "positive evidence" and involvedan "objective examination" of the volume of dumped imports and their effect on prices and on
domestic producers.
128. As we have already noted, it is not in dispute between the participants that the evidence from
the five  examined  Indian producers exporting to the European Communities shows that the
producers accounting for 47 percent of all imports attributable to all examined producers were foundto be dumping;  nor is it in dispute that the evidence also shows that the producers accounting for 53percent of those imports were found  not  to be dumping.
 160  The European Communities confirmed at
                                                     
158According to Article 9.4(i), this so-called "all others" duty rate for non-examined producers may be
based on the  weighted average  of more than  de minimis   dumping margins of producers and exporters selected
for individual examination pursuant to the second sentence of Article 6.10.  Margins established under the
circumstances referred to in Article 6.8 shall also be disregarded in calculating this weighted average.Article 9.4(ii) provides for a different calculation method for cases where the liability for payment of anti-dumping duties is calculated on the basis of a prospective  normal value.
159European Communities' statement at the oral hearing;  Panel Report, para. 6.141.
160However, the European Communities believes that Article 9.4 entitles it in any event to treat all
imports subject to the "all others" duty rate as "dumped imports" for purposes of Article 3.WT/DS141/AB/RW
Page 51
the oral hearing that the evidence from the five examined producers is the entirety of the evidence on
which the determination by the European Communities of the volume of dumped imports (attributableto examined and non-examined producers) was based
 161;  thus, the participants agree that there is no
other evidence on the record of this investigation that could serve as "positive evidence" for
determining the volume of dumped imports.  Therefore, it is undisputed that the  only  available
evidence for determining which import volumes can be attributed to  non-examined producers that are
dumping is the evidence obtained from the five examined producers.
129. We observe that, in other anti-dumping investigations, there may be different and additional
types of evidence that properly could be considered as "positive evidence" and relied upon whendetermining, on the basis of an "objective examination", the volume of dumped imports.
 162  T h a t ,
however, is not the case before us.
130. In this dispute, we agree with the participants that the evidence on dumping margins
established for the producers that were examined individually is "positive" in the sense that we
defined it in  US – Hot-Rolled Steel ,  namely that it is "affirmative, objective, verifiable, and
credible". 163  We also agree with India that evidence on  dumping  margins of more than  de minimis
for examined producers is relevant as "positive evid ence" in this investigation for determining which
import volumes may be attributed to  non-examined producers that are  dumping . 164  I n  o u r  v i e w ,
both these qualities of evidence are probative of the existence of dumping in the circumstances of thisinvestigation.  Therefore, we conclude that th e European Communities met the first requirement of
paragraphs 1 and 2 of Article 3 by basing its determination on that "positive evidence".
131. Having established this, we must next assess whether the determination at issue of the
volume of dumped imports attributable to non-examined producers was based on an "objective
examination" of that positive evidence.  India argues that, in the light of the facts of this dispute,an "objective examination" could  not  have led the European Communities to conclude that  all
imports attributable to  non-examined producers were dumped;  nor, India argues, could an "objective
examination" have led to the conclusion in the redetermination that 86 percent of  total  imports from
                                                     
161European Communities' responses to questioning at the oral hearing.
162In response to questioning at the oral hearing, th e United States referred, for example, to evidence
such as witness testimony and different types of docum entary evidence about critical aspects of the market,
conditions of competition, production characteristics, and statistical data relating to the volume, prices, andeffects of imports.  In the circumstances of a specific investigation, such categories of evidence may qualify asaffirmative, objective, and verifiable, and thus form part of the "positive evidence" that an investigatingauthority may properly take into account when determining, on the basis of an "objective examination", whetheror not imports from non-examined producers are being dumped.
163India's and the European Communities' responses to questioning at the oral hearing;  Appellate Body
Report, US – Hot-Rolled Steel , para. 192.
164India's appellant's submission, para. 31.WT/DS141/AB/RW
Page 52
all examined  and non -examined  Indian producers were dumped. 165  The European Communities
contends that import volumes subject to the "all others" duty rate under Article 9.4 may be consideredas "dumped imports" under paragraphs 1 and 2 of Article 3.  As explained earlier, the EuropeanCommunities is of the view that the approach authorized under Article 9.4 meets the "objective
examination" requirement of  Article 3.1.
132. We disagree with the European Communities.  We recall our statement in  US – Hot-Rolled
Steel   that:
… the investigating authorities' evaluation of the relevant factors
must respect the fundamental obligation, in Article 3.1, of those
authorities to conduct an "objective examination".  If an examinationis to be "objective", the identification, investigation and evaluation of
the relevant factors must be  even-handed .  Thus, investigating
authorities are  not  entitled to conduct their investigation in such a
way that it becomes  more likely that, as a result of the fact-finding
or evaluation process, they will determine that the domestic industryis injured .
 166 (emphasis added)
The approach taken by the European Communities in determining the volume of dumped imports was
not based on an "objective examination".  The examination was not "objective" because its result ispredetermined by the methodology itself.  Under the approach used by the European Communities,whenever the investigating authorities decide to  limit  the examination to some, but not all,
producers—as they are entitled to do under Article 6.10— all  imports from  all non -examined
producers will  necessarily always be  included  in the volume of dumped imports under Article 3, as
long as any of the producers examined individually were found to be dumping.  This is so becauseArticle 9.4 permits the imposition of the "all others" duty rate on imports from  non-examined
producers,  regardless  of which alternative in the second sentence of Article 6.10 is applied.  In other
words, under the European Communities' approach, imports attributable to  non-examined producers
are simply  presumed ,  in all circumstances, to be  dumped ,  for purposes of Article 3, solely because
they are subject to the imposition of anti-dumping duties under Article 9.4.  This approach makes it"more likely [that the investigating authorities] will determine that the domestic industry is
                                                     
165In their alternative calculation, the European Communities' investigating authorities  deducted  from
the volume of dumped imports the imports attributable to the two Indian producers that were examinedindividually and found  not  to be dumping. (EC Regulation 1644/2001, recital (22))  According to India, the
result of this deduction was that 86 percent of  total  imports from India by examined and non-examined
producers and exporters were found to be dumped.  The European Communities has not challenged this
calculation by India.  It believes, however, that the calculation is irrelevant, because Article 9.4 entitles it to
subject all imports from non-examined producers to the "all others" duty rate and to treat the same import
volumes as dumped for purposes of determining injury under Article 3.
166Appellate Body Report, US – Hot-Rolled Steel , para. 196.WT/DS141/AB/RW
Page 53
injured" 167, and, therefore, it cannot be "objective".  Moreover, such an approach tends to favour
methodologies where  small numbers   of producers are examined individually.  This is because the
smaller  the number of individually-examined producers, the  larger  the amount of imports
attributable to  non-examined producers, and, therefore, the larger the amount of imports  presumed
to be  dumped .  Given that the  Anti-Dumping Agreement  generally requires examination of  all
producers, and only exceptionally permits examination of only  some  of them, it seems to us that the
interpretation proposed by the European Communities cannot have been intended by the drafters ofthe Agreement.
133. For these reasons, we conclude that the European Communities' determination that  all
imports attributable to  non-examined producers were dumped—even though the evidence from
examined  producers showed that producers accounting for 53 percent of imports attributed to
examined producers were not dumping—did not lead to a result that was  unbiased , even-handed ,  and
fair.
 168  Therefore, the European Communities did not satisfy the requirements of paragraphs 1 and 2
of Article 3 to determine the volume of dumped imports on the basis of an examination that is
"objective ".
134. India also challenges the Panel's finding relating to Article 6.10. 169  As we have indicated, in
this investigation, the European Communities did not determine individual dumping margins for each
Indian producer exporting bed linen to the European Communities, as permitted by Article 6.10.  ThePanel found that the European Communities chose the second alternative in Article 6.10, and limitedits examination to producers and exporters representin g the largest percentage of the volume of the
exports from India that could reasonably be investigated.
 170
135. On appeal, India asks us to find that the European Communities chose, instead, the first
option in Article 6.10, and selected for  individual  examination a "statistically valid sample"
                                                     
167Appellate Body Report, US – Hot-Rolled Steel, para. 196.
168Ibid. , paras. 193-194 and 196.
169Article 6.10 reads in relevant part:
The authorities shall, as a rule, determine an  individual  margin of dumping
for  each  known exporter or producer concerned of the product under
investigation.  In cases where the  number  of exporters, producers,
importers or types of products involved is  so large  as to make such a
determination  impracticable,  the authorities may  limit their examination
either to a reasonable number of interested parties or products by usingsamples  which are  statistically valid  on the basis of information available
to the authorities at the time of the selection, or to the  largest percentage of
the volume of the exports  from the country in question which can
reasonably be investigated. (emphasis added)
170Panel Report, para. 6.135.WT/DS141/AB/RW
Page 54
representative of all  Indian producers exporting to the European Communities. 171  In India's view,
the proportion of dumped imports attributable to  examined  producers is even more relevant for
determining, on the basis of "positive evidence" and an "objective examination", the volume ofdumped imports attributable to  non-examined producers, when the examined producers are found to
constitute a statistically valid sample representative of all Indian producers.  The European
Communities contends that the Panel's finding that the investigating authorities applied the  second
alternative in Article 6.10 is a factual finding beyond appellate review.  In the alternative, theEuropean Communities maintains that its investigat ing authorities relied upon the second alternative
and examined the largest percentage of the volume of exports which could reasonably be investigated.
136. Article 6 is entitled "Evidence", and there is no indication in Article 6—or elsewhere in the
Anti-Dumping Agreement —that Article 6 does not apply generally to matters relating to "evidence"
throughout that Agreement.  Therefore, it seems to us that the subparagraphs of Article 6 set outevidentiary rules that apply throughout the course of an anti-dumping investigation, and provide also
for due process rights that are enjoyed by "interested parties" throughout such an investigation.
137. Turning to that part of Article 6 referred to by India, we note that Article 6.10 deals
specifically with the determination of  margins   of dumping.  Clearly, it does  not stipulate  that
investigating authorities must follow a specific  methodology  when determining the  volume   of
dumped imports under paragraphs 1 and 2 of Article 3.  However, this does not mean that  evidence
emerging from the determination of margins of dumping for  individual  producers or exporters
pursuant to Article 6.10 is irrelevant for the determination of the volume of dumped imports inparagraphs 1 and 2 of Article 3.  To the contrary, such evidence may well form part of the "positive
evidence" on which an "objective examination" of the volume of dumped imports for purposes of
determining injury may be based.  Indeed, in cases where the examination has been limited to a selectnumber of producers under the authority of the second sentence of Article 6.10, it is difficult toconceive of a determination based on "positive evidence" and an "objective examination" that is madeother than through some form of  extrapolation  of the evidence .  This could be done, for example, by
extrapolating from the import volumes attributed to  examined  producers found to be dumping to the
import volumes attributed to  non-examined producers.  We recall that we considered that evidence on
dumping  margins of more than  de minimis   for  examined   producers is relevant as "positive
evidence" in this investigation for determinin g which import volumes may be attributed to  non-
examined producers that are  dumping .
                                                     
171India's appellant's submission, paras. 27-29.WT/DS141/AB/RW
Page 55
138. India's suggestion that the investigating authorities should consider the  same  proportion of
import volumes attributable to  non-examined   producers as  dumped ,  as the proportion of import
volumes attributed to  examined  producers that were found to be dumping, may be one way of
adducing "positive evidence" from the record of an investigation and of conducting an "objective
examination", especially if producers selected for individual examination constitute a statistically
valid sample representative of all producers.  Even if the producers selected for individualexamination account, instead, for the  largest percentage of exports   that could reasonably be
investigated, we do not exclude the possibility that the evidence from those  examined  producers
could, nonetheless, qualify as part of the "positive evidence" that might serve as a basis for an"objective examination" of import volumes th at can be attributed to the remaining  non-examined
producers.  There may, indeed, be other ways of making these calculations that satisfy therequirements of paragraphs 1 and 2 of Article 3.
139. Although Article 6.10 is relevant from an eviden tiary point of view, it is, nevertheless, as we
explain below, not necessary here for us to decide whether the Indian producers and exporters
selected for individual examination in this investig ation constitute a "statistically valid sample" or "the
largest percentage of the volume of exports" within the meaning of the second sentence ofArticle 6.10.  In this respect, we recall the European Communities' argument that import volumessubject to the "all others" duty rate under Article 9.4 may be considered as dumped imports whendetermining injury under Article 3.  As we have explained, Article 9.4 permits the imposition of the"all others" duty rate on imports from non-examined producers, regardless of whether those producerswere excluded from individual examination on the basis of the first, or the second, alternative in
Article 6.10.  We have already concluded that imports attributable to  non-examined producers that
are subject to the "all others" duty rate under Article 9.4 cannot simply be presumed to be dumped forpurposes of determining injury under Article 3.  Our conclusion was  not  premised on whether
producers were excluded from individual examination on the basis of the first, or the second,alternative in Article 6.10.  Therefore, our ruling that the European Communities failed to determine
the volume of dumped imports with respect to non-examined producers on the basis of "positiveevidence" and an "objective examination", as required by paragraphs 1 and 2 of Article 3, is notpremised on which of the alternatives in Article 6.10 for limiting the examination was chosen by theEuropean Communities in this investigation.  For this reason, we decline to reverse, as requested by
India, the finding of the Panel, in paragraph 6.135 of the Panel Report, that the European
Communities chose here the second alternative under the second sentence of Article 6.10, because itis not necessary to make such a finding to resolve the issue in dispute here.  Accordingly, it is notnecessary for us to decide whether that finding was exclusively a factual one and is, therefore, beyondthe scope of appellate review.WT/DS141/AB/RW
Page 56
140. Finally, we turn to the arguments of the third participants in this dispute.  Japan and Korea
agree with India that the European Communities' determination of the volume of dumped imports inthis investigation is not consistent with paragraphs 1 and 2 of Article 3.  Our earlier discussion, inparticular of Article 9, addresses in detail the arguments of Japan and Korea.
 172  In contrast to Japan
and Korea, the United States maintains, for its pa rt, that the European Communities' determination of
the volume of "dumped imports" is consistent with paragraphs 1 and 2 of Article 3.  According to theUnited States, in addition to Article 9, Articles 2.1 and 3.3 are also significant for interpreting thevolume of "dumped imports" in paragraphs 1 and 2 of Article 3.
141. The United States asserts that "Article 2.1 … defines  dumped   products '[f]or the purpose of
[the AD] Agreement', on a countrywide basis."
 173  In the view of the United States, "that phrase from
the beginning to the end refers only to countries and products.  It does not refer to producers." 174
Therefore, according to the United States, "the re ferences to 'dumped imports' in Articles 3.1 and 3.2
and throughout Article 3 refer to all  imports of the product from the countries subject to the
investigation." 175  In other words, when determining injury, "the concept of whether or not there are
dumped imports is country-specific." 176
142. We do not agree.  Article 2.1 reads:
Determination of Dumping
For the purpose of this Agreement, a product is to be considered as
being dumped, i.e. introduced into the commerce of another countryat less than its normal value, if the export price of the product
exported from one country to another is less than the comparable
price, in the ordinary course of trade, for the like product when
destined for consumption in the exporting country.
Nowhere in the text of Article 2.1 is there authority for treating all imports from  non-examined
producers as dumped for purposes of determining injury under Article 3.  The subsequent paragraphsof Article 2 set out in detail how the export price, normal value and, thus, the margins of dumping, areto be established for specific producers or exporters.  Nowhere in those paragraphs is there authorityfor treating imports from  non-examined producers as dumped for purposes of determining injury
under Article 3.
                                                     
172See  supra , paras. 123 ff.
173United States' third participant's submission, para. 2. (original italics;  underlining added)
174United States' response to questioning at the oral hearing.
175United States' third participant's submission, para. 2.
176United States' response to questioning at the oral hearing.WT/DS141/AB/RW
Page 57
143. As we have explained, under Article 6.10, dumping margins are to be established for each
producer and exporter or, if impracticable, for some of them.  We have explained that Article 9permits the imposition and collection of anti-dumping duties on imports from specific producers orexporters, or groups thereof. We also recall that the original panel confirmed that "dumping is a
determination made with reference to a product from a particular producer [or] exporter, and not with
reference to individual transactions".
 177  We see no conflict between the provisions requiring
producer-specific determinations and the need to ca lculate, for purposes of determining injury, the
total volume of dumped imports from producers or exporters originating in a particular exportingcountry as a whole.  This can be done, and has to be done, by adding up the volume of importsattributable to producers or exporters that ar e dumping, whether on the basis of an individual
examination or on the basis of an extrapolation.  Further, we see nothing in the text of Article 2.1 thatpermits a derogation from the express requirements in paragraphs 1 and 2 of Article 3 to determinethe volume of dumped imports on the basis of "positive evidence" and an "objective examination".
144. The United States also argues that the interpretation that  all  imports attributable to  non-
examined producers may be considered as "dumped" is necessary to give meaning and effect toArticle 3.3.
 178  This provision concerns situations where an importing country conducts an anti-
dumping investigation with respect to imports of a product from more than one exporting country. 179
Article 3.3 defines the circumstances where the investigating authorities may  cumulatively   assess the
volume and price effects of imports from  different  exporting countries.  The United States argues
that it would create an anomaly if, in multi-country investigations, authorities are entitled to assess theeffects of  all  imports from the subject country, "as long as each countrywide margin was more than
de minimis ", while, under India's theory, in single-country investigations, authorities, finding no
                                                     
177Original Panel Report, para. 6.136.  Thus, we agree with the United States' argument that import
transactions attributable to a particular producer or exporter need not be separated into two categories—dumped
and non-dumped transactions. (United States' third participant's submission, para. 3)
178United States' third participant's submission, para. 17.
179Article 3.3 of the  Anti-Dumping Agreement   reads:
Where imports of a product from more than one country are simultaneously
subject to anti-dumping investigations, the investigating authorities maycumulatively assess the effects of such imports only if they determine that
(a) the margin of dumping established in relation to the imports from each
country is more than  de minimis   as defined in paragraph 8 of Article 5 and
the volume of imports from each country is not negligible and(b) a cumulative assessment of the effects of the imports is appropriate in
light of the conditions of competition between the imported products and theconditions of competition between the imported products and the likedomestic product.WT/DS141/AB/RW
Page 58
dumping for an individual company, "would be requ ired to disregard some of the imports covered by
the countrywide margin". 180
145. India's appeal does not extend to the requiremen ts of Article 3.3.  We do not see, however,
how the cumulative assessment of the effects of imports from different exporting countries under
Article 3.3 implies that all imports attributable to  non-examined producers must be considered as
dumped for purposes of determining injury.  The investigation and the  cumulation  of dumped
imports from different countries for purposes of determining injury can be carried out in conformitywith the producer-specific provisions of the  Anti-Dumping Agreement ,  even when several countries
are involved.
 181  The provisions regarding the cumulative assessment of imports pursuant to
Article 3.3 must be interpreted consistently with the provisions of the  Anti-Dumping Agreement  that
deal with the determinations of dumping margins or the application of anti-dumping duties withrespect to specific producers or groups thereof.  Similarly, the right under Article 3.3 to conduct anti-dumping investigations with respect to imports from different exporting countries does not absolve
investigating authorities from the requirements of paragraphs 1 and 2 of Article 3 to determine the
volume of dumped imports on the basis of "positive evidence" and an "objective examination".
146. For these reasons, we are of the view that the Panel has not properly interpreted paragraphs 1
and 2 of Article 3 in applying those provisions in this implementation dispute.  Therefore, weconclude that, with respect to import volumes attributable to producers or exporters that were  not
examined individually   in this investigation, the European Communities has failed to determine the
"volume of dumped imports" on the basis of "positive evidence" and an "objective examination" asexplicitly required by the text of paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement .
However, we agree with the Panel "that the [Anti-Dumping] Agreement does not require an
investigating authority to determine the volume of  imports from producers outside the sample that is
properly considered 'dumped imports' for purposes of injury analysis on the basis of the proportion ofimports from sampled producers that is found to be dumped"
 182 according to the  specific
methodology  suggested by India in this appeal.  For these reasons, we  reverse  the Panel's finding, in
paragraph 6.144 of the Panel Report, and find that the European Communities has acted inconsistentlywith the requirements of paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement .
                                                     
180United States' third participant's submission, para. 18.
181Accordingly, as explained earlier, imports attributable to producers or exporters who were
individually examined  and for which, consistently with the  Anti-Dumping Agreement ,  a  positive  dumping
margin (more than  de minimis ) was found, may be  included  in the calculation of the volume of dumped
imports;  imports attributable to individually-examined producers or exporters for which  no  such dumping
margin was found must be  excluded  from that calculation.
182Panel Report, para. 6.144. (original boldface)WT/DS141/AB/RW
Page 59
VI. Article 17.6 of the  Anti-Dumping Agreement   and Article 11 of the DSU
A. Introduction
147. India claims on appeal that the Panel failed to comply with the requirements of Article 17.6 of
the  Anti-Dumping Agreement   and of Article 11 of the DSU in concluding that the European
Communities  did have  information before it on all relevant economic factors listed in Article 3.4 of
the  Anti-Dumping Agreement   when making its determination of injury. 183  India alleges, in
particular, that the European Communities did  not  have such information, because the European
Communities failed to collect data on stocks and capacity utilization.  India requests us to conclude
that the Panel did not comply with the requirements of Article 17.6 of the  Anti-Dumping Agreement
and of Article 11 of the DSU, and, consequently, to  reverse   the Panel's finding that the European
Communities acted consistently with paragraphs 1 and 4 of Article 3 of the  Anti-Dumping
Agreement . 184
148. Before examining India's arguments on appeal, we will recall briefly the findings of the
original panel and of the Article 21.5 Panel on this issue, as far as they are relevant to the issue raisedon appeal.
149. India claimed before the original panel that the European Communities did not examine all
relevant economic factors having a bearing on the state of the industry and, therefore, failed to act
consistently with its obligations under Article 3.4 of the  Anti-Dumping Agreement .
 185  The original
panel stated that it appeared from the European Communities' regulation imposing provisional anti-dumping measures that data had not been collected for all relevant economic factors listed inArticle 3.4, and that, "[w]hile some of the data collected … may have included data for the factors notmentioned, we cannot be expected to assume that this was the case without some indication to thateffect in the determination."
 186  The original panel then found that:
                                                     
183India's appellant's submission, para. 130.
184Ibid.
185Original Panel Report, para. 6.145.
186Ibid. , para. 6.167.  The Regulation which imposed provisional anti-dumping duties is Commission
Regulation (EC) No 1069/97, 12 June 1997, imposing a provisional anti-dumping duty on imports of cotton-
type bed linen originating in Egypt, India and Pakistan, published in the Official Journal of the EuropeanCommunities, 13 June 1997, L-series, No. 156 ("EC Regulation 1069/97").  Council Regulation (EC) No2398/97, 28 November 1997, imposing a definitive anti-dumping duty on imports of cotton-type bed linenoriginating in Egypt, India and Pakistan, published in the Official Journal of the European Communities, 4December 1997, L-series, No. 332 ("EC Regulation 2398/97"), refers, in part, to the findings contained inEC Regulation 1069/97.WT/DS141/AB/RW
Page 60
… where factors set forth in Article 3.4 are not even referred to in the
determination being reviewed, if there is nothing in the determination
to indicate that the authorities considered them not to be relevant, the
requirements of Article 3.4 were not satisfied. 187
150. The European Communities did not appeal this finding of the original panel.  In the
redetermination—EC Regulation 1644/2001—the European Communities addressed the relevanteconomic factors listed in Article 3.4, including stocks and capacity utilization, on the basis ofinformation that it had collected during the orig inal investigation.  It is undisputed between the
participants that the European Communities did not collect additional data for purposes of theredetermination.
 188
151. Before the Article 21.5 Panel, India alleged that the European Communities had "never"
collected data on stocks and capacity utilization, and also that the European Communities had not
properly carried out an overall re-evaluation of those factors. 189  The Panel rejected both arguments.
India has not appealed the Panel's finding with respect to the adequacy of the  evaluation .
152. In rejecting India's claim that the European Communities had not collected information on all
relevant economic factors listed in Article 3.4, the Panel found that:
It is thus apparent to us, on the face of the redetermination, that the
EC did, in fact, have information on the Article 3.4 factors, which is
specifically addressed.  Thus, we find this no basis as a matter of fact
for this aspect of India's claim. 190
                                                     
187Original Panel Report, para. 6.168.
188Panel Report, para. 6.165.
189Ibid. , paras. 6.146-6.150.
190Ibid. , para. 6.169.WT/DS141/AB/RW
Page 61
153. In reaching this conclusion, the Panel first stated that India had misunderstood the "import"
and "context" of the statement of the original panel that, in India's view, suggested that data had not
been collected. 191  The Panel then went on to clarify the meaning of that statement as follows:
Contrary to India's understanding, the original Panel did not  find, as
a matter of fact or law, that no information had been collected on
certain of the Article 3.4 factors.  Rather, as alluded to by the EC, the
Panel was making an observation as to the lack of any basis, on theface of the provisional and definitive Regulations, for a conclusion
that certain of the factors had actually been considered by the EC
authorities in making their determination.  Indeed, the Panel
specifically went on to note that, in the absence of any reference to
the relevant information in the Regulations, it was not willing toassume that such data had been considered.
 192 (original boldface;
footnote omitted)
154. The Panel concluded that it was clear that the European Communities had "in its record"
information on stocks and capacity utilization—the two factors India had focused on—and that"unlike the original determination, the EC's consideration of these factors is clearly set out on the faceof the redetermination."
 193
155. India appeals from this finding of the Panel, arguing, first, that the Panel failed to meet its
obligations under Article 11 of the DSU by incorrectly applying the rules on burden of proof that we
set out in  US – Wool Shirts and Blouses . 194  India argues that it had presented a  prima facie   case
                                                     
191Panel Report, para. 6.164.  The full paragraph containing the original panel's statement at issue is
reproduced below.  India relies on the sentence in italics:
It appears from this listing that dat a was not even collected for all the
factors listed in Article 3.4, let alone evaluated by the EC investigating
authorities .  Surely a factor cannot be evaluated without the collection of
relevant data.  While some of the data collected for the factors that arementioned in the Provisional Regulation by the EC authorities may haveincluded data for the factors not me ntioned, we cannot be expected to
assume that this was the case without some indication to that effect in the
determination.  Nor is the relevance or lack thereof, as assessed by the EC
authorities, of the factors not mentioned under the heading "Situation of the
Community industry" at all apparent from the determination.
(Original Panel Report, para. 6.167) (emphasis added)
192Panel Report, para. 6.164.
193Ibid. , para. 6.167.
194Appellate Body Report, US – Wool Shirts and Blouses , at 335.WT/DS141/AB/RW
Page 62
that data on a number of injury factors had never been collected and that, therefore, the Panel should
have shifted the burden of proof to the European Communities to rebut that  prima facie   case. 195
156. In the alternative, India submits that the Panel distorted the evidence by accepting for a fact
the "mere" assertion by the European Communities, in EC Regulation 1644/2001, that it had collected
data on all relevant economic factors, including stocks and capacity utilization. 196  India argues that
this constitutes a failure by the Panel to make an objective assessment of the matter, including anobjective assessment of the facts of the case, as required by Article 11 of the DSU.
 197
157. Regarding Article 17.6 of the  Anti-Dumping Agreement ,  India argues that the Panel failed to
"actively" review the facts, pursuant to subparagraph (i) of that provision, as we interpreted it inUS – Hot-Rolled Steel .
 198  India asserts that, by refusing India's request for the Panel to use its
investigative powers under Article 13 of the DSU, and by concluding that the European Communitieshad the data in the record of the investigation without offering any real proof or reasoning to supportsuch a conclusion, the Panel failed to comply with Article 17.6(i) of the  Anti-Dumping Agreement .
 199
158. In reply, the European Communities contends that the Panel properly discharged its duties
under Article 11 of the DSU and Article 17.6 of the  Anti-Dumping Agreement  in concluding that the
European Communities  did have  information before it on all the relevant economic factors listed in
Article 3.4 of the  Anti-Dumping Agreement ,  including stocks and capacity utilization, when making
its injury determination.  The Eu ropean Communities asserts that the Panel correctly applied the rules
on the burden of proof. 200  The European Communities denies that EC Regulation 1644/2001 contains
"mere" assertions and notes that, although India alleges that the Panel distorted the evidence, Indiaconcedes that the Panel has not committed an egregious error calling into question its good faith.
 201
The European Communities also contends that th e Panel could not have failed to comply with
                                                     
195India alleges that it had established a  prima facie   case by:  (i) pointing to the statement made by the
original panel to the effect that the panel could not as sume that data on certain injury factors was collected
where it was not mentioned in the final determination;  (ii) showing that the non-confidential replies to thequestionnaires sent by the European Communities to its domestic producers did not contain suchdata;  (iii) indicating that EC Regulation 1644/2001 does not contain  facts  or  data  concerning stocks and
capacity utilization;  and (iv) requesting that the European Communities provide this information during theArticle 21.5 proceedings and by the European Communities' failure to do so. (India's appellant's submission,paras. 112-113)
196India's appellant's submission, para. 124.
197Ibid.
198Appellate Body Report, US – Hot-Rolled Steel , para. 55.
199India's appellant's submission, paras. 128-129.
200European Communities' appellee's submission, para. 105.
201Ibid. , para. 108.WT/DS141/AB/RW
Page 63
Article 17.6 of the  Anti-Dumping Agreement   by exercising its discretion pursuant to Article 13.2 of
the DSU. 202
B. Analysis
159. India does not challenge directly the Panel's finding on Article 3.4 of the  Anti-Dumping
Agreement .  Rather, India argues on appeal that the Panel did not discharge its duties under Article 11
of the DSU and Article 17.6 of the  Anti-Dumping Agreement  in its examination of India's claim that
the European Communities did not have information before it on stocks and capacity utilization whenmaking its injury determination.  India requests that, in the event that we agree with India regardingArticle 17.6 and Article 11, we  reverse   the Panel's finding that the European Communities acted
consistently with paragraphs 1 and 4 of Article 3 of the  Anti-Dumping Agreement .
160. Article 11 of the DSU defines generally a panel's mandate in reviewing the consistency with
the covered agreements of measures taken by Members.  The provision reads, in relevant part:
The function of panels is to assist the DSB in discharging its
responsibilities under this Understanding and the covered
agreements.  Accordingly, a panel should make an objective
assessment of the matter before it, including an objective assessment
of the facts of the case  and the applicability of and conformity with
the relevant covered agreements, and make such other findings as
will assist the DSB in making the recommendations or in giving the
rulings provided for in the covered agreements. (emphasis added)
161. We recently explained that Article 11 of the DSU:
… requires panels to take account of the evidence put before them
and forbids them to wilfully disregard or distort such evidence.  Nor
may panels make affirmative findings that lack a basis in the
evidence contained in the panel record.  Provided that panels' actions
remain within these parameters, however, we have said that "it is
generally within the discretion of the Panel to decide which evidence it
chooses to utilize in making findings" , and, on appeal, we "w ill not
interfere lightly with a panel's exercise of its discretion".
 203
(footnotes omitted)
162. Article 17.6 of the  Anti-Dumping Agreement ,  for its part, "clarif[ies] the powers of review of
a panel established under the  Anti-Dumping Agreement ." 204  Subparagraph (i) of Article 17.6
                                                     
202European Communities' appellee's submission, para. 114.
203Appellate Body Report, US – Carbon Steel , para. 142.
204Appellate Body Report, Thailand – H-Beams , para. 114.WT/DS141/AB/RW
Page 64
"place[s] limiting obligations on a panel, with re spect to the review of the establishment and
evaluation of facts by the investigating authority." 205  The provision reads, in relevant part:
in its assessment of the facts of the matter, the panel shall determine
whether the authorities' establishment of the facts was proper andwhether their evaluation of those facts was unbiased and objective.  If
the establishment of the facts was proper and the evaluation was
unbiased and objective, even though the panel might have reached a
different conclusion, the evaluation shall not be overturned.
163. In  US – Hot-Rolled Steel ,  we stated that "[a]lthough the text of Article 17.6(i) is couched in
terms of an obligation on  panels … the provision, at the same time, in effect defines when
investigating authorities  can be considered to have acted inconsistently with the  Anti-Dumping
Agreement ".
 206  We further explained that the text of Article 17.6(i) of the  Anti-Dumping Agreement ,
as well as that of Article 11 of the DSU, "requires panels to 'assess' the facts and this … clearlynecessitates an active review or examination of the pertinent facts."
 207
164. Turning specifically to India's claim that the Panel did not discharge its duties under
Article 11 of the DSU and under Article 17.6(i) of the  Anti-Dumping Agreement ,  we are mindful that
we have found previously that there is no "conflict" between Article 11 of the DSU and Article 17.6of the  Anti-Dumping Agreement ;  rather, the two provisions complement each other.
 208  W e  b e g i n
our analysis here with India's argument relating to Article 17.6(i), because this provision, which setsout the standard of review that panels must fo llow in reviewing the establishment of the facts
                                                     
205Appellate Body Report, Thailand – H-Beams , para. 114.
206Appellate Body Report, US – Hot-Rolled Steel , para. 56. (original italics)
207Ibid. , para. 55.
208In our Report in US – Hot-Rolled Steel , we stated:
… Article 17.6(i) requires panels to make an " assessment  of the  facts ".
The language of this phrase reflects closely the obligation imposed onpanels under Article 11 of the DSU to make an " objective assessment  of the
facts
 ".  Thus the text of both provisions requires panels to "assess" the facts
and this, in our view, clearly necessitates an active review or examination ofthe pertinent facts.  Article 17.6(i) of the  Anti-Dumping Agreement   does
not expressly state that panels are obliged to make an assessment of the facts
which is " objective ".  However, it is inconceivable that Article 17.6(i)
should require anything other than that panels make an  objective
"assessment of the facts of the matter".  In this respect, we see no "conflict"
between Article 17.6(i) of the  Anti-Dumping Agreement   and Article 11 of
the DSU.
(Appellate Body Report, US – Hot-Rolled Steel , para. 55) (original italics;  underlining added)  Both
the European Communities and India agree with this interpretation of the relationship between Article 17.6 ofthe  Anti-Dumping Agreement   and Article 11 of the DSU. (India's and the European Communities' responses to
questioning at the oral hearing)WT/DS141/AB/RW
Page 65
by investigating authorities in anti-dumping investigations, is particularly relevant to the appeal
before us. 209
165. India asserts that the Panel failed to review the facts actively, as we required in  US – Hot-
Rolled Steel ,  because "[i]t neither used its powers under Article 13 [of the] DSU nor reviewed these
facts otherwise." 210  Although India recognizes that a pa nel's power to seek information under
Article 13 of the DSU is  discretionary ,  India argues that the Panel was required to seek information
from the European Communities as part of the Panel's obligation to " actively review or examine  the
facts" pursuant to Article 17.6 of the  Anti-Dumping Agreement . 211  Consequently, we understand
India's claim to relate to the first part of the first sentence of Article 17.6(i), namely to the Panel's task
of determining "whether the authorities' establishment of the facts was proper". 212
166. We have previously stated that a panel's right to seek information pursuant to Article 13
of the DSU is  discretionary   and not mandatory, as India itself recognizes. 213  F u r t h e r m o r e ,  i n
EC – Sardines ,  where a claim was brought under Articl e 11 of the DSU, we concluded that:
                                                     
209Appellate Body Report, US – Lead and Bismuth II , para. 47.
210India's appellant's submission, para. 128.
211Ibid. , para. 127. (original italics)
212India's claim on appeal is limited to the Panel's finding that the European Communities did in fact
collect and have information before it on stocks and capacity utilization before making its injury determination.
India's appeal does not encompass the Panel's conclusion with respect to the European Communities'
evaluation   of these factors. ( Ibid. , para. 130)
213Appellate Body Report, EC – Sardines , para. 302.  Article 13 of the DSU reads:
Right to Seek Information
1. Each panel shall have the right to seek information and technical
advice from any individual or body which it deems appropriate. However,before a panel seeks such information or advice from any individual or bodywithin the jurisdiction of a Member it shall inform the authorities of thatMember.  A Member should respond promptly and fully to any request by a
panel for such information as the panel considers necessary and appropriate.
Confidential information which is provided shall not be revealed withoutformal authorization from the individual, body, or authorities of the Memberproviding the information.
2. Panels may seek information from any relevant source and may
consult experts to obtain their opinion on certain aspects of the matter.  Withrespect to a factual issue concerning a scientific or other technical matterraised by a party to a dispute, a panel may request an advisory report inwriting from an expert review group.  Rules for the establishment of such agroup and its procedures are set forth in Appendix 4.WT/DS141/AB/RW
Page 66
[a] contravention of the duty under Article 11 of the DSU to make an
objective assessment of the facts of the case cannot result from the
due  exercise of the discretion permitted by another provision of the
DSU, in this instance Article 13.2 of the DSU. 214 (emphasis added)
167. Similarly, a panel's duty to "actively review the pertinent facts" in order to comply with
Article 17.6(i) of the  Anti-Dumping Agreement   does not, in our view, imply that a panel  must
exercise its right to seek information under Article 13 of the DSU, which explicitly states that theexercise of that right is  discretionary .  Indeed, there is nothing in the texts of Article 17.6(i) of the
Anti-Dumping  Agreement   or Article 13 of the DSU to suggest that a reading of these provisions, in
combination, would render  mandatory   the exercise of a panel's  discretionary   power under
Article 13 of the DSU.  At the oral hearing, India sought to draw a distinction between the case before
us and our ruling in  EC – Sardines   by arguing that, in the present case, the Panel's exercise of its
discretion was not "due" because "there was no exercise at all".
 215  We do not agree.  In our view, it is
for panels to decide whether it is necessary to request information from any relevant source pursuantto Article 13 of the DSU.  The mere fact that the Panel did not consider it necessary to seekinformation does not, by itself, imply that the Panel's exercise of its discretion was not "due".  We,therefore, reject India's allegation that the Panel failed to comply with the requirements of Article 17.6of the  Anti-Dumping Agreement   by not seeking information from the European Communities
pursuant to Article 13 of the DSU.
168. In addition to its argument relating to the Panel's right to seek information under Article 13 of
the DSU, India argues that the Panel failed to "review[] these facts otherwise".
 216  In support of this
argument, India asserts that the "Panel merely stated that it was 'clear' to it that the EC had the data inits record", without offering any proof or reason ing other than what was stated in EC Regulation
1644/2001 itself.
 217
                                                     
214Appellate Body Report, EC – Sardines , para. 302.
215India's response to questioning at the oral hearing.
216India's appellant's submission, para. 128.
217Ibid. (footnotes omitted)WT/DS141/AB/RW
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169. We have said previously that panels must not, under Article 17.6(i) of the  Anti-Dumping
Agreement , "engage in a new and independent fact-finding exercise". 218  Furthermore, in our view,
the discretion that panels enjoy as triers of facts under Article 11 of the DSU 219 is equally relevant to
cases governed also by Article 17.6(i) of the  Anti-Dumping Agreement .  Thus, as under Article 11 of
the DSU, we "will not interfere lightly with [a] panel's exercise of its discretion" under Article 17.6(i)
of the  Anti-Dumping Agreement . 220
170. An appellant must persuade us, with sufficiently compelling reasons, that we should disturb a
panel's assessment of the facts or interfere with a panel's discretion as the trier of facts.  As Indiapoints out, the Panel stated that it was apparent to the Panel from "the face of the redetermination"that the investigating authority  did  have information on the relevant economic factors listed in
Article 3.4.
 221  The Panel, however, also noted that "it is clear that the EC had, in its  record ,
information on stocks and utilisation of capacity". 222  In the light of this statement, we conclude that,
contrary to India's contention, the Panel did not arrive at an affirmative conclusion that information on
these two factors was before the investigating au thorities based exclusively "on the face" of the
redetermination.
171. We observe, in this regard, that the Panel also had before it explanations as to how the
European Communities had collected information on stocks and capacity utilization.  According tothe European Communities, it had collected information on both factors through the questionnairesent to the domestic industry and during the on-site verification visits.
 223  Moreover, the European
                                                     
218Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 84.  In the context of cases
brought under the  Agreement on Safeguards ,  we have also said that, in making an objective assessment of the
facts pursuant to Article 11 of the DSU, panels may not conduct a  de novo  review of the evidence nor
substitute their judgement for that of the competent authorities. (Appellate Body Report, US – Lamb , para. 106;
Appellate Body Report, US – Cotton Yarn , para. 74)
219For example, in  EC – Hormones , we stated that "it is generally within the discretion of the Panel to
decide which evidence it chooses to utilize in making findings." (Appellate Body Report, EC – Hormones ,
para. 135)
220Appellate Body Report, US – Wheat Gluten , para. 151.
221Panel Report, para. 6.169.
222Ibid. , para. 6.167. (emphasis added)
223Section VI.A of the questionnaire sent by the investigating authorities of the European Communities
to its domestic industry reads:
Please describe the effects of the imports  under consideration on your own
business of producing the types of bed linen covered by the investigation,[e.g.] on market share, sales, prices, production, capacity utilisation, stocks ,
employment, profitability, ability to invest[,] etc. (emphasis added)
(European Communities' Anti-dumping Questionnaire, a ttached to India's oral statement to the Panel)
See also, European Communities' response to Question 18 posed by the Panel during the Panel proceedings;
Panel Report, Annex E-2, p. 37, para. 8.WT/DS141/AB/RW
Page 68
Communities explained that it obtained additional information on stocks from audited accounts that
were either annexed to the questionnaire replies, or verified during the on-site visits. 224  The European
Communities added that data on stocks could also be derived by comparing verified data onproduction and sales volume.
 225  As for capacity utilization, the European Communities stated that it
had received information on production capacity from Eurocoton—the complainant in the anti-
dumping investigation. 226  In the light of these observations, we are not persuaded that we should
interfere with the Panel's finding of fact on this matte r.  Therefore, we reject India's argument that the
Panel "otherwise" failed to review the facts actively under Article 17.6(i) of the  Anti-Dumping
Agreement .
172. We turn next to the arguments submitted by India in support of its claim that the Panel failed
to meet its obligation under Article 11 of the DSU to examine the facts of the case objectively.  India'sfirst argument is that the Panel misapplied the rules on the allocation of the burden of proof that weset out in  US – Wool Shirts and  Blouses .
 227
                                                     
224European Communities' response to Question 18 posed  by the Panel during the Panel proceedings;
Panel Report, Annex E-2, p. 37, para. 8.
225Ibid. , p. 38, para. 11.
226European Communities' appellee's submission, para. 100, quoting excerpts from the European
Communities' first written submission to the Panel.
227In that case, we stated that:
… it is a generally-accepted canon of evidence in civil law, common law
and, in fact, most jurisdictions, that the burden of proof rests upon the party,whether complaining or defending, who asserts the affirmative of aparticular claim or defence. If that party adduces evidence sufficient to raise
a presumption that what is claimed is true, the burden then shifts to the other
party, who will fail unless it adduces sufficient evidence to rebut the
presumption.
(Appellate Body Report, US – Wool Shirts and Blouses , at 335) (footnote omitted)WT/DS141/AB/RW
Page 69
173. The Panel discussed the principles regarding burden of proof at the outset of the Panel Report.
The Panel stated:
We recall that the general principles applicable to burden of proof in
WTO dispute settlement require that a party claiming a violation of aprovision of the WTO Agreement by another Member must assert
and prove its claim.  In these Panel proceedings, we thus observe that
it is for India, which has challenged the consistency of the EC
measure, to bear the burden of demonstrating that the measure is not
consistent with the relevant provisions of the AD Agreement.  We
also note, however, that it is generally for each party asserting a fact,
whether complainant or respondent, to  provide proof thereof.  In this
respect, therefore, it is also for the EC to provide evidence for the
facts which it asserts.  We also recall that a  prima facie  case is one
which, in the absence of effective refutation by the other party,
requires a panel, as a matter of law, to rule in favour of the party
presenting the  prima facie  case.  In addition, we consider that both
parties generally have a duty to cooperate in the proceedings in order
to assist us in fulfilling our mandate, through the provision of
relevant information.
 228 (footnotes omitted)
174. India is not alleging that, on this particular issue, the Panel should have allocated the burden
of proof differently.  Instead, India asserts that the Panel should have  shifted  the burden to the
European Communities once India had established a  prima facie  case. 229  There is nothing in the
Panel's reasoning, however, to suggest that the Panel premised its ultimate conclusion on whether ornot India had presented a  prima facie  case.  From our perspective, the Panel assessed and weighed
all the evidence before it—which was put forward by both India and the European Communities—and, having done so, ultimately, was persuaded that the European Communities did, in fact, haveinformation before it on all relevant economic factors listed in Article 3.4 of the  Anti-Dumping
Agreement .
175. We agree, therefore, with the European Communities' assertion that India's argument is, for
all practical purposes, one related to the Panel's weighing and appreciation of the evidence.
 230  As the
European Communities pointed out, we have previously stated that the "[d]etermination of the
credibility and weight properly to be ascribed to (t hat is, the appreciation of) a given piece of evidence is
part and parcel of the fact finding pr ocess and is, in principle, left to the discretion of a panel as the trier
of facts." 231
                                                     
228Panel Report, para. 6.7.
229India's response to questioning at the oral hearing.
230European Communities' appellee's submission, para. 93.
231Appellate Body Report, EC – Hormones , para. 132.WT/DS141/AB/RW
Page 70
176. We have, furthermore, explained that:
In assessing the panel's appreciation of the evidence, we cannot base
a finding of inconsistency under Article 11 simply on the conclusionthat we might have reached a different factual finding from the one
the panel reached.  Rather, we must be satisfied that the panel has
exceeded the bounds of its discretion, as the trier of facts, in its
appreciation of the evidence.  As is clear from previous appeals, we
will not interfere lightly with the panel's exercise of its discretion.
 232
(footnote omitted)
177. India has not persuaded us that the Panel in this case exceeded its discretion as the trier of
facts.  In our view, the Panel assessed and weighed the evidence submitted by both parties, andultimately concluded that the European Communities had information on all relevant economicfactors listed in Article 3.4.  It is not "an error, let alone an egregious error"
 233, for the Panel to have
declined to accord to the evidence the weight that I ndia sought to have accorded to it.  We, therefore,
reject India's argument that, by failing to  shift  the burden of proof, the Panel did not properly
discharge its duty to assess objectively the facts of the case as required by Article 11 of the DSU.
178. We reach now India's alternative argument on this issue, which is that, even if the Panel
properly applied the rules on the burden of proof, the Panel failed to meet its obligations under
Article 11 of the DSU because it "distorted the evid ence [b]y accepting for a fact a mere assertion
contained in the EC Regulation 1644/2001 —while India had submitted  prima facie  evidence on the
absence  of data collection". 234  India contends that, in doing so, "the Panel attached greater weight to
the mere assertion" of the European Communities, while failing to explain why the Panel considered
the assertion "sufficient to rebut the  prima facie   evidence of India that the EC had not collected such
data." 235
                                                     
232Appellate Body Report, US – Wheat Gluten , para. 151.  We note, moreover, that in  Korea –
Alcoholic Beverages ,  we refused to "second-guess" the panel's appreciation of certain studies submitted into
evidence or "review the relative weight" ascrib ed to the evidence. (Appellate Body Report, Korea – Alcoholic
Beverages , para. 161)  In  Australia – Salmon ,  we concluded that "[p]anels … are not required to accord to
factual evidence of the parties the same meaning and weight as do the parties." (Appellate Body Report,Australia – Salmon , para. 267)
233Appellate Body Report, Korea – Alcoholic Beverages , para. 164.
234India's appellant's submission, para. 124. (original italics)
235Ibid.WT/DS141/AB/RW
Page 71
179. In  EC – Hormones ,  we described how a panel could fail to make an objective assessment of
the facts by "distorting" the evidence:
The deliberate disregard of, or refusal to consider, the evidence
submitted to a panel is incompatible with a panel's duty to make anobjective assessment of the facts.  The wilful distortion or
misrepresentation of the evidence put before a panel is similarly
inconsistent with an objective assessment of the facts.  "Disregard"
and "distortion" and "misrepresentation" of the evidence, in their
ordinary signification in judicial and quasi-judicial processes, imply
not simply an error of judgment in the appreciation of evidence but
rather an egregious error that calls into question the good faith of a
panel . A claim that a panel disregarded or distorted the evidence
submitted to it is, in effect, a claim that the panel, to a greater or
lesser degree, denied the party submitting the evidence fundamental
fairness , or what in many jurisdictions is known as due process of
law or natural justice.
 236 (emphasis added;  footnote omitted)
180. India expressly states that "it does not assert that the Panel committed an egregious error
calling into question its good faith." 237  At the oral hearing, India argued that, in disputes where we
have found a violation of Article 11 of the DSU, "i t has not always been the situation that the panel
had made an egregious error calling into question its good faith". 238  Indeed, we have found a
violation of Article 11 of the DSU when panels have failed to ensure that a competent authority
evaluated all relevant economic factors and that the authority's explanation of its determination isreasoned and adequate.
 239  In those instances, the error related to the evaluation conducted by the
 competent authorities .  We also found that a panel exceeded its mandate under Article 11 by
considering evidence that was not in existence at the time of a Member's determination imposing asafeguard measure on imports of textiles.
 240  In another case, we determined that the panel had not
made an objective assessment of the  matter  before it   because it examined a  claim   that had not been
raised by the complainant. 241
                                                     
236Appellate Body Report, EC – Hormones , para. 133.
237India's appellant's submission, para. 87.
238India's response to questioning at oral hearing.
239Appellate Body Report, US – Wheat Gluten , paras. 161-162;  Appellate Body Report, US – Lamb ,
para. 149.
240Appellate Body Report, US – Cotton Yarn , para. 80.
241Appellate Body Report, Chile – Price Band System , para. 177.WT/DS141/AB/RW
Page 72
181. In our view, none of these examples assists I ndia with the claim it raises on appeal.  India
does not appeal the Panel's conclusion with respect to the  evaluation  by the investigating authorities
of the European Communities of the relevant economic factors listed in Article 3.4. 242  India directs
its arguments on appeal to the Panel's assessment of the  facts of the case ,  and does not argue that the
Panel failed otherwise to make an objective assessment of the  matter   before it.  Specifically, India
argues that the Panel did not make an objective assessment of the facts of the case because the Paneldistorted  the evidence by placing greater weight on the statements made by the European
Communities than on those made by India.
 243  As we stated earlier, the weighing of the evidence is
within the discretion of the Panel as the trier of fact s, and there is no indication in this case that the
Panel exceeded the bounds of this discretion. 244  We thus reject India's argument that the Panel
distorted the evidence before it.
182. For all these reasons, we  find  that the Panel properly discharged its duties under Article 17.6
of the  Anti-Dumping Agreement  and Article 11 of the DSU.  We, therefore,  uphold   the Panel's
finding, in paragraph 6.169 of the Panel Report, that the European Communities had information
before it on the relevant economic factors listed in Article 3.4 of the  Anti-Dumping Agreement
when making its injury determination.
                                                     
242See supra , footnote 212 to para.165.
243In response to questioning at the oral hearing, In dia explained that "[i]f there is a heavy balance on
one side and nothing on the other side, and the panel nevertheless finds it is the other way around, then we feel
[it] is a distortion of the evidence".
244See supra , para. 177.WT/DS141/AB/RW
Page 73
VII. Findings and Conclusions
183. For the reasons set out in this Report, the Appellate Body:
(a) (i) upholds  the Panel's finding, in paragraph 6.53 of the Panel Report, that
India's claim under Article 3.5 of the  Anti-Dumping Agreement —that the European
Communities failed to ensure that injuries caused by other factors was not attributed
to the dumped imports—was not properly before the Panel;   and, consequently,
(ii) declines  to rule on the issue of whether the Panel erred, in its alternative
finding, in paragraph 6.246 of the Panel Report, that the European Communities actedconsistently with Article 3.5 of the  Anti-Dumping Agreement ;
(b) (i) reverses   the Panel's finding, in paragraph 6.144 of the Panel Report, that the
European Communities did not act inconsistently with paragraphs 1 and 2 of Article 3
of the  Anti-Dumping Agreement ,  and  finds   that the European Communities acted
inconsistently with paragraphs 1 and 2 of Article 3 of the  Anti-Dumping Agreement
in determining the volume of dumped imports for purposes of making adetermination of injury;  and
(ii) declines   to rule on the Panel's finding, in paragraph 6.135 of the Panel
Report, that the European Communities applied the second alternative in the secondsentence of Article 6.10 for limiting its examination in this investigation;  and
(c) finds  that the Panel properly discharged its duties under Article 17.6 of the
Anti-Dumping Agreement   and Article 11 of the DSU and, therefore,  upholds   the
Panel's finding, in paragraph 6.169 of the Panel Report, that the EuropeanCommunities had information before it on the relevant economic factors listed inArticle 3.4 of the  Anti-Dumping Agreement   when making its injury determination.
184. The Appellate Body recommends that the DSB request the European Communities to bring
its measure, found in this Report to be inconsistent with its obligations under the  Anti-Dumping
Agreement ,  into conformity with that Agreement.WT/DS141/AB/RW
Page 74
Signed in the original at Geneva this 24th day of March 2003 by:
_________________________
Georges Abi-Saab
Presiding Member
_________________________ _________________________
James Bacchus Yasuhei Taniguchi
Member MemberANNEX 1
WORLD TRADE
ORGANIZATIONWT/DS141/16
9 January 2003
(03-0095)
Original:  English
EUROPEAN COMMUNITIES – ANTI-DUMPING DUTIES ON IMPORTS
OF COTTON-TYPE BED LINEN FROM INDIA
Recourse to Article 21.5 of the DSU by India
Notification of an Appeal by India
under paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes ("DSU")
The following notification, dated 8 January 2003, sent by India to the Dispute Settlement
Body ("DSB"), is circulated to Members.  This notification also constitutes the Notice of Appeal, filed
on the same day with the Appellate Body, pursuant to the  Working Procedures for Appellate Review .
_______________
Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the  Working Procedures for Appellate Review ,  India
hereby notifies its decision to appeal to the Appellate Body certain issues of law and legal
interpretations covered in the Panel Report on  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/RW, dated 29 November 2002).
The appeal relates to the following issues of law and legal interpretations developed by the
Panel in its Report:
(a) The Panel erred in law in concluding that the EC did not act inconsistently with Articles 3.1
and 3.2 of the Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 ("Anti-Dumping Agreement") in paragraph 6.144 of the Panel Report
and reasoning leading thereto;
(b) The Panel erred in law in finding that the EC did have information before it on the injury
factors under Article 3.4 of the Anti-Dumping Agreement in paragraph 6.169 of the Panel
Report and reasoning leading thereto.  In reaching this conclusion the Panel failed in its
obligations under Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU;
and
(c) (i) The Panel erred in law in finding that India's claim 6 under Article 3.5 of the Anti-
Dumping Agreement was not properly before it in paragraph 6.53 of the Panel Report
and reasoning leading thereto;
(ii) The Panel erred in law in finding that the EC's measure is not inconsistent with
Article 3.5 of the Anti-Dumping agreement for failure to ensure that injuries caused
by other factors are not attributed to dumped imports in paragraph 6.246 of the PanelReport and reasoning leading thereto.Accordingly, India requests the Appellate Body to reverse the conclusions reached by the
Panel in paragraphs 7.1-7.3 of the Report as it considers them to be error in law and based uponerroneous findings on issues of law and related legal interpretations.
__________