## Facts

- China challenged multiple U.S. Department of Commerce determinations imposing antidumping (AD) and countervailing duties (CVD) on certain Chinese products, including paper, steel pipe and tube, and woven sacks.
- The challenged measures treated certain Chinese state-owned enterprises (SOEs) and state-owned commercial banks (SOCBs) as “public bodies” whose conduct could constitute government “financial contributions” under the SCM Agreement.
- The United States often measured subsidy “benefit” using out-of-country benchmarks, reasoning that domestic Chinese prices and rates were distorted by government intervention.
- The United States concurrently imposed CVDs and AD duties calculated using non-market-economy (NME) methodology, creating a risk that the same subsidization would be offset twice.
- A WTO panel largely upheld U.S. approaches on “public body,” benchmarks, and concurrent AD/CVD remedies; China appealed and the United States filed a conditional appeal.
- The WTO Dispute Settlement Body adopted the Appellate Body and Panel reports on March 25, 2011.

## Issues

1. What standard determines whether an SOE or SOCB is a “public body” under SCM Agreement Article 1.1(a)(1)?
2. How should “specificity” under SCM Agreement Article 2 be assessed for the subsidies challenged?
3. When may an investigating authority rely on out-of-country benchmarks to measure benefit under SCM Agreement Article 14?
4. Whether concurrent CVDs and NME-based AD duties, without adjustment, result in impermissible “double remedies,” and what inquiry is required to prevent double counting.

## Decision

- The Appellate Body reversed the panel’s endorsement of a control-based “public body” test and held that government ownership or control alone is insufficient.
- The Appellate Body held that an entity is a “public body” only if it possesses, exercises, or is vested with governmental authority, and found U.S. determinations inconsistent where they relied primarily on ownership/control.
- The Appellate Body upheld key aspects of the panel’s findings that several challenged subsidy programs were “specific” within SCM Agreement Article 2.
- On benefit and benchmarks, the Appellate Body accepted that out-of-country benchmarks may be used in certain circumstances but found errors where the analysis did not adequately justify rejecting domestic benchmarks (including possible adjustments).
- On double remedies, the Appellate Body found that concurrent CVDs and NME-based AD duties give rise to a rebuttable presumption of double counting that authorities must address; the United States acted inconsistently by failing to investigate and avoid double remedies in the measures at issue.

## Legal Principles

- “Public body” (SCM Agreement Art. 1.1(a)(1)) requires proof that the entity is vested with, or exercises, governmental authority; ownership/control is relevant evidence but not a dispositive rule.
- Specificity (SCM Agreement Art. 2) turns on whether access to a subsidy is explicitly limited to certain enterprises/industries/regions or otherwise shown to be specific based on the scheme’s design and operation.
- Benefit measurement (SCM Agreement Art. 14) may permit out-of-country benchmarks where domestic prices/rates cannot reasonably reflect market conditions due to government intervention, but authorities must provide a reasoned explanation for rejecting domestic benchmarks and for selecting an external comparator.
- Concurrent NME AD duties and CVDs can create double remedies; investigating authorities must examine and ensure that combined remedies do not offset the same subsidization twice, consistent with SCM Agreement obligations and applicable accession commitments.

## Conclusion

The Appellate Body required a governmental-authority showing to attribute SOE and state-bank conduct as “public body” action, limited unexamined reliance on foreign benchmarks to measure benefit, and held that concurrent CVDs and NME-based AD duties presumptively risk double remedies unless investigating authorities conduct an analysis to prevent double counting.


Appellate Body Report, United States—Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R (WTO Mar. 25, 2011)