Report of the Panel

(Continued)

7.62 We fully agree with the findings of that panel, and shall follow the same approach in the present case. In order to determine whether there is sufficient evidence of dumping, an investigating authority cannot entirely disregard the elements that configure the existence of that practice as outlined in Article 2. We do not of course mean to suggest that an investigating authority must have before it at the time it initiates an investigation evidence of dumping within the meaning of Article 2 of the quantity and quality that would be necessary to support a preliminary or final determination. However, the evidence must be such that an unbiased and objective investigating authority could determine that there was sufficient evidence of dumping within the meaning of Article 2 to justify initiation of an investigation.

7.63 With these considerations in mind, we now turn to the examination of the claims put forward by Brazil.

7.64 The primary issue raised by Claim 2 is whether or not there was sufficient evidence before the investigating authority at the time of initiation to warrant an adjustment for differences in physical characteristics between the eviscerated poultry sold in Argentina and that sold in Brazil. This issue goes to the heart of the claim that there was insufficient evidence to justify initiation, since the investigating authority would not have found dumping had it not made the adjustment for the alleged differences in physical characteristics. Brazil's claim also challenges the investigating authority's conclusion regarding the amount of the adjustment made.

7.65 We recall that, in order to determine whether there is sufficient evidence of dumping, the investigating authority cannot entirely disregard the elements that configure the existence of this practice as outlined in Article 2. In a claim concerning adjustments, paragraph 4 of Article 2 is of particular relevance. Article 2.4 provides in relevant part:

7.66 We further note that the issue before us is not whether Argentina was required to make an adjustment for differences in physical characteristics in deciding to initiate, but whether it was entitled to do so.

7.67 We turn now to the examination of Brazil's first argument. Brazil claims that the normal value data contained in the application only related to sales in S�o Paulo. According to Brazil, even if that data indicated that poultry was sold in S�o Paulo with head and feet, that did not mean that poultry was sold throughout Brazil with head and feet. Argentina asserts that S�o Paulo is a large urban centre, and that sales in S�o Paulo are therefore representative of consumption patterns throughout Brazil. Brazil does not deny that S�o Paulo is a large urban centre. We recall that, at the time of initiation, an investigating authority is not required to possess evidence of dumping of the quantity (or quality) that it would need to support a preliminary or final determination. In our view, it is sufficient for an investigating authority to base its decision to initiate on evidence concerning domestic sales in a major market of the exporting country subject to the investigation, without necessarily having data for sales throughout that country.

7.68 Brazil also argues that the investigating authority incorrectly accepted a statement by JOX (attached to the application) as evidence that poultry sold in S�o Paulo contained head and feet. We have examined the relevant statement, and find that it clearly indicates that the JOX domestic price data provided by the applicant, and relied on by the investigating authority at the time of initiation, concerned poultry sold in S�o Paulo with head and feet. Since Brazil has not disputed Argentina's assertion that JOX was a specialized publication reflecting the state of the S�o Paulo market, we see no reason why the investigating authority was not entitled to rely on the JOX statement.

7.69 Brazil further argues that the investigating authority did not have sufficient evidence that the alleged differences in physical characteristics affected price comparability. This issue is closely linked to Brazil's claim against the amount of the adjustment made by the investigating authority. In light of our finding on that claim below, we do not consider it necessary to rule on Brazil's argument concerning the lack of evidence on price comparability.

7.70 Regarding the amount of the adjustment, Brazil notes that the 9.09 per cent adjustment made by the investigating authority at the time of initiation was calculated on the basis of yield rates⁷⁸ set forth in the application. The applicant stated that the yield rate for poultry sold (with head and feet) in Brazil was 88 per cent, whereas the yield rate for poultry sold in Argentina (without head and feet) was 80 per cent. Brazil asserts that the applicant failed to submit any evidence in support of those yield rates. In response to Question 5 from the Panel, Argentina stated that the evidence supporting the use of 88 and 80 per cent yield rates was contained in a JOX report included in the application.⁷⁹ However, upon close examination we find that the relevant JOX report does not contain any such evidence. Indeed, the JOX report makes no reference to yield rates whatsoever.

7.71 In response to an additional question from the Panel, Argentina asserted that:

7.72 This suggests that, according to Argentina, the investigating authority was entitled to make an adjustment on the basis of the yield rate information included in the application simply because the information "was reasonable and � the implementing authority did not have knowledge of any elements to suggest that it should not be considered." We cannot accept this approach because, as we noted above, statements and assertions unsubstantiated by any evidence do not constitute sufficient evidence within the meaning of Article 5.3. In light of the lack of evidence to support the yield rates included in the application, and consequently the adjustment to be made, we fail to see how an unbiased and objective investigating authority could have considered the yield rate information available at the time of initiation adequate to support a 9.09 per cent adjustment to normal value.

7.73 In light of the above, we find that the investigating authority did not have adequate information at the time of initiation to make an adjustment to normal value of 9.09 per cent. Accordingly, although we have rejected Brazil's arguments regarding the adequacy of the evidence concerning the need for an adjustment to normal value to reflect differences in physical characteristics between the poultry sold in Brazil and Argentina respectively, we uphold Brazil's claim regarding the adequacy of the information concerning the amount of that adjustment. We therefore find that Argentina violated Article 5.3 of the AD Agreement by determining that it had sufficient evidence of dumping to initiate an investigation, because its determination of dumping was based on an adjustment to normal value for which it did not have adequate evidence.⁸¹

7.74 Brazil asserts that the investigating authority only took into account export prices less than normal value when calculating the margin of dumping for the purpose of initiation. Brazil submits that this methodology was not in conformity with Article 5.3, read in conjunction with Article 2.4.2 of the AD Agreement.

7.75 At the time of initiation, the APCDS calculated four margins of dumping.⁸² In its first written submission, Argentina stated that the decision to initiate was based on the second margin of dumping calculated by the APCDS, and that the three remaining margins were used for additional analysis.⁸³ In response to part of Question 18 from the Panel, Argentina stated that "[t]he period used to determine the f.o.b. export price in this case was January to June 1997 and August 1997." Since this was the period covered by the second margin of dumping calculated by the APCDS, this would confirm Argentina's statement that the decision to initiate was based on the second of the four margins calculated by the APCDS. Accordingly, for the purpose of analysing Brazil's claim, we shall focus on the second margin of dumping calculated by the APCDS, since this was the margin on which the decision to initiate the investigation was based.

7.76 The starting point for the APCDS calculation of the second margin of dumping was the totality of export transactions recorded in official import statistics for the period January to June 1997 and August 1997. As a first step, the investigating authority discarded export transactions which did not concern products "like" the product under investigation.⁸⁴ Second, the investigating authority excluded those export transactions with a price that was higher than or equal to the normal value (USD/Kg. 1.044).⁸⁵ Third, a weighted average export price was calculated using only those transactions with a price lower than the normal value. Accordingly, the weighted average export price was not based on the totality of comparable export transactions.

7.77 In examining the compatibility of this methodology with Article 5.3, read in light of Article 2.4.2, we note the following statement by the Appellate Body in EC - Bed Linen:

7.78 We agree with the Appellate Body's analysis. We note that the Appellate Body was primarily addressing the practice of "zeroing". The practice adopted by Argentina in the present case is more egregious than zeroing, because it does not merely fix the value of comparisons involving certain export transactions at zero, but totally excludes certain export prices from the weighted average, so that the weighted average export price used by the investigating authority is even lower than it would be through zeroing. We are in no doubt that, if zeroing is inconsistent with Article 2.4.2, then Argentina's practice of totally disregarding certain export transactions would also be inconsistent with Article 2.4.2 because it does not compare the weighted average normal value with the weighted average of prices of all comparable export transactions. In our view, the use of such a practice would not allow an objective and impartial investigating authority to properly conclude that there was sufficient evidence of dumping to justify the initiation of an investigation.

7.79 Argentina asserts that the methodology used by the APCDS has also been used by other WTO Members.⁸⁷ Even assuming for the sake of argument that Argentina is correct, this argument is nevertheless irrelevant. In this dispute, we must determine the conformity of Argentina's methodology (and not that of other WTO Members) in light of the relevant provisions of the AD Agreement.

7.80 Argentina also argues that "[w]hat is required [at the time of initiation] is the knowledge that there have been transactions involving dumping which justify, from that point of view, the initiation of an investigation."⁸⁸ We understand Argentina to argue that, in order to initiate, an investigating authority need only satisfy itself that there has been some dumping, in the sense that certain transactions were dumped. We disagree. We recall that, "in order to determine whether or not there is sufficient evidence of dumping for the purpose of initiation, an investigating authority cannot entirely disregard the elements that configure the existence of [dumping] outlined in Article 2".⁸⁹ A determination of dumping should be made in respect of the product as a whole, for a given period, and not for individual transactions concerning that product. An investigating authority therefore cannot disregard export transactions at the time of initiation simply because they are equal to or greater than normal value. Disregarding such transactions does not provide a proper basis for determining whether or not there is sufficient evidence of dumping to justify initiation.

7.81 In light of the above, we find that Argentina violated Article 5.3 of the AD Agreement by initiating its investigation without a proper basis to conclude that there was sufficient evidence of dumping to justify initiation.

7.82 The APCDS established the normal value on the basis of a JOX publication setting forth the prices of poultry for one day - 30 June 1997 - while the export price covered a period of several months in 1997.⁹⁰ The issue before us is whether a comparison between a normal value for one day and an export price for a period of several months constitutes a proper basis for determining whether or not there is sufficient evidence of dumping to justify the initiation of an investigation.

7.83 We recall that, in order to determine that there is sufficient evidence of dumping, the investigating authority cannot entirely disregard the elements that configure the existence of that practice as outlined in Article 2. In particular, we note that Article 2.4 requires that a fair comparison be made between the export price and the normal value in respect of sales "made at as nearly as possible the same time". In interpreting the term "made at as nearly as possible the same time" in the context of Article 2.4, we consider it useful to refer to the following finding of the US - Stainless Steel panel:

7.84 The above finding concerns a definitive determination of a margin of dumping, while the present claim concerns a pre-initiation determination of sufficient evidence of dumping. At the time of initiation an investigating authority does not need to be in possession of the same quantity and quality of evidence that would be necessary to support a preliminary or final determination of dumping. However, since evidence of the same type is required upon initiation as for a preliminary or final determination, in our view there should be a substantial degree of overlap in the periods considered in order for the comparison of normal value and export price to be fair within the meaning of Article 2.4. We consider however that Article 5.3, read in light of Article 2.4, cannot be interpreted to require that data on normal value and export price cover identical periods of time. Otherwise, the quantity of evidence of dumping required upon initiation would be the same as that required for a preliminary or final determination of dumping. Thus, we consider that an investigating authority might comply with the requirements in Article 5.3 even though the periods chosen for the comparison of a weighted average normal value and a weighted average export price are not identical.

7.85 For a product such as eviscerated poultry, in respect of which there are many transactions taking place on a daily basis, we are not persuaded that domestic sales data for one day provides sufficient overlap with export price data for several months for the purpose of Article 5.3. Argentina asserts that the domestic price for one day was indicative of the trend in prices of poultry sold in S�o Paulo over a longer period of time. If that had been true, the use of normal value for one day may well have been consistent with Article 5.3. However, Argentina has not pointed to any evidence in the record suggesting that the investigating authority actually considered normal value evidence for one day to be indicative of the trend in domestic poultry prices. Furthermore, we note that the evidence relied on by Argentina (to claim that price data for one day was indicative of a trend in prices) related to live, and not eviscerated, poultry.⁹² Although Argentina argued in these proceedings that stability in the pricing of an input (live poultry) would result in stability in the pricing of the finished product (eviscerated poultry), it has failed to identify any evidence to suggest that, at the time of initiation, the investigating authority considered that stable pricing for live poultry would lead to stable pricing for eviscerated poultry. Accordingly, Argentina's argument must be rejected.

7.86 We therefore uphold Brazil's claim that Argentina violated Article 5.3 of the AD Agreement by initiating the investigation without sufficient evidence of dumping to justify initiation.

7.87 Brazil argues that the periods used for the purpose of the dumping and injury determinations at the time of initiation did not coincide and, hence, a causal link could not have properly been established.

7.88 We are of the view that it would only be necessary for us to examine this claim if the investigating authority had had sufficient evidence of dumping and injury - the two elements needed to carry out the causal link determination - to justify the initiation of the investigation against eviscerated poultry from Brazil. However, we recall that in our view the investigating authority did not have sufficient evidence of dumping to justify the initiation of that investigation. Having reached this conclusion, it is not necessary for us to examine Brazil's claim concerning causation.

7.89 For the reasons set forth above, we find that Argentina acted inconsistently with Article 5.3 of the AD Agreement by determining that there was sufficient evidence of dumping to justify the initiation of an investigation.

7.90 Brazil asserts that Argentina violated Article 5.2 of the AD Agreement by initiating its investigation on the basis of an application that did not meet the requirements of that provision. Brazil asserts that Article 5.2 requires that an application include "evidence" of dumping, injury and the causal relationship between the dumped imports and the alleged injury. Brazil further asserts that an allegation or information provided in the application, without supporting documentation, does not qualify as evidence under Article 5.2. In the view of Brazil, the application which led to the initiation of the investigation against eviscerated poultry from Brazil did not contain evidence to support an adjustment for physical characteristics claimed by the applicant. Brazil acknowledges that the application contained a JOX report dated 30 June 1997, which allegedly supported the applicant's request for an adjustment. Brazil identifies several problems with the JOX report. Brazil argues that that report does not constitute evidence that justifies the adjustment. Brazil also asserts that no evidence was presented showing that price comparability would be affected and that the yield rate proposed by the petitioner was justified.

7.91 Argentina asserts that the applicant provided all of the necessary evidence with respect to the normal value and the export price as well as the relevant evidence for the adjustments needed in order to make a fair comparison between the normal value and the export value. Argentina also asserts that the applicant supplied, with its application, the documentation that was available to it. Argentina also contends that the applicant for the initiation of an investigation is not required to prove beyond all doubt the existence of dumping, injury and causal link, since the final determination of these elements is the responsibility of the investigating authority. With regard to the adjustment issue, Argentina asserts that the applicant submitted the JOX report with information regarding domestic prices of eviscerated poultry in Brazil. In the view of Argentina, the evidence provided is a representative value taken from a specialized publication for a given period. Bearing in mind that the JOX report mentioned that eviscerated poultry was sold in Brazil with head and feet and that poultry exported to Argentina did not contain head and feet, Argentina concluded that it was necessary to make an adjustment for physical characteristic differences.

7.92 Brazil agrees with Argentina that the quantum and quality of evidence required prior to initiation has to be necessarily less than that required for a final determination. However, Brazil asserts that relevant evidence of the "type" needed to justify initiation is the same as that needed to make a preliminary or final determination of dumping, although the quality and quantity is less.

7.93 Brazil argues that the data presented by the petitioner in the application, and used to calculate the dumping margin, was inconsistent with Article 5.2 in two ways. First, Brazil asserts that, because the normal value and the export price information provided were for transactions which were not made at as nearly as possible the same time, the application failed to include sufficient evidence of dumping as required in Article 5.2. Because in the view of Brazil the timing of the sales transactions may have implications in respect of the comparability of prices of export and home market transactions, it argues that the establishment of normal value based on one single day (30 June 1997) cannot be used as a parameter for a fair comparison with the export price determined for two periods of time with more than thirty days each (one for January through June 1997 and the other for August 1997), neither of which included the one day used to establish the normal value. Second, Brazil argues that normal value information for all of 1996 and 1997 was reasonably available to the petitioner in view of the fact that on 26 July 1999 it provided updated information on normal value for the period 1998 through January 1999.

7.94 Apart from the general comments referred to in para. 7.91 supra, Argentina asserts that Article 5.2 does not require the applicant to provide evidence of normal value in respect of the entire period for which evidence of export value was provided. In the view of Argentina, it is clear and reasonable that the quantity and quality of information available to the applicant on prices in the market of the exporting country should not be the same as for the export price.

7.95 We recall that we have concluded that the APCDS's determination that there was sufficient evidence of dumping to justify the initiation of an investigation was inconsistent with Article 5.3. For this reason, we do not consider it necessary to rule on Brazil's Article 5.2 claims regarding the sufficiency of the application.

7.96 Although we do not consider it necessary to make findings on Brazil's Article 5.2 claims, we do note that the parties' submissions raised the issue of the extent - if any - to which Article 5.2 imposes obligations on Members, as opposed to applicants. We therefore asked the parties for their views on this matter. Brazil replied:

7.97 Argentina replied:

7.98 Thus, both parties agree that Article 5.2 imposes obligations on Members. Without ruling on this matter, we do not exclude the possibility that Article 5.2 could oblige Members to verify that applications contain evidence, and not mere assertion, of dumping, injury, and causal link. In particular, in cases where applicants propose adjustments to normal value, Article 5.2 could oblige Members to verify that such adjustments are supported by evidence, rather than mere assertion. A consequence of this obligation may be that applications not meeting the requirements of Article 5.2 are rejected. Although Members may choose to correct any deficiencies in an application,⁹⁵ they are not obliged to do so.

7.99  These claims are made under Article 5.8 of the AD Agreement. Claims 3 and 7 concern the issue of whether or not the application should have been rejected for lack of sufficient evidence of dumping. Claim 31 concerns the issue of whether or not the application should have been rejected for lack of sufficient evidence of injury.

7.100 In Claims 3 and 7, Brazil contends that the application contained no substantial evidence to support the APCDS's adjustment for differences in physical characteristics, or the yield rate used to make that adjustment. Nor did it contain sufficient evidence to establish normal value. In view of that, Brazil argues that the application should have been rejected because there was insufficient evidence of dumping to justify proceeding with the investigation. According to Brazil, failure to reject the application constituted a violation of Article 5.8 of the AD Agreement.

7.101 Argentina asserts that, since the applicant had provided all of the documentation available to it and the documentation was examined for accuracy and adequacy by the investigating authority, there was no reason for the implementing authority to reject the application.

7.102 Brazil asserts that the CNCE issued a determination (Record No. 405) dated 7 January 1998 to the effect that the application contained insufficient evidence of injury to justify the initiation of an investigation. Brazil submits that, in accordance with Article 5.8 of the AD Agreement, the application should have been rejected at that time, because that was the point when the investigating authority was "satisfied" that there was not sufficient evidence of injury to justify proceeding with the case.

7.103 Argentina asserts that, following the CNCE determination contained in Record No. 405, the applicant submitted new evidence. Argentina points to Article 60 of the Regulations to the National Law on Administrative Procedures which stipulates that the competent body shall intervene once again in proceedings if any new developments occur or come to its knowledge. Argentina also points to an opinion from the Legal Department of the MEyOSP which stated that, before proceeding any further, the Secretary should ask the CNCE to intervene once again in order to rule on the sufficiency (from the perspective of injury) of the new information submitted by the applicant. In light of the above, Argentina concludes that the Argentine authorities would not have acted in conformity with internal law if they had rejected the application following the CNCE determination in Record No. 405 and, hence, had not examined the new evidence submitted by the applicant on 17 February 1998. In addition, Argentina asserts that, apart from being contrary to domestic administrative law, the rejection of the application and closing of the file in January 1998 (pursuant to the conclusions set forth in Record No. 405) would have adversely affected the individual rights of the applicant with all of the administrative consequences that such an act would entail.

7.104 We begin by analysing Claim 31.

7.105 In order to resolve Claim 31, we must determine whether, following CNCE's 7 January 1998 conclusion in Record No. 405 that there was not sufficient evidence of injury to justify the initiation of the investigation, the application should have been rejected.

7.106 Article 5.8 of the AD Agreement reads in relevant part as follows:

7.107 Argentina operates a bifurcated anti-dumping system, as explained in more detail in para. 7.122 infra. Thus, while the DCD (formerly the APCDS) investigates issues of dumping, the CNCE investigates issues of injury. This division of labour applies both at the time of the (pre-initiation) review of the application, and during any subsequent investigation. Although only the Secretary has the authority to decide whether or not to initiate an investigation,⁹⁶ the Secretary cannot decide to initiate an investigation if either the CNCE or the DCD/APCDS have found that there is insufficient evidence of injury or dumping, respectively, to justify the initiation of an investigation. In the case at hand, the CNCE issued Record No. 405 on 7 January 1998 to the effect that the application did not contain sufficient evidence of injury to justify the initiation of an investigation.⁹⁷ The CNCE's determination was received by the Secretary on 9 January 1998.⁹⁸ We recall that, faced with a negative assessment of the application by the CNCE, the Secretary is precluded from initiating an investigation. Accordingly, from the time that the Secretary received the CNCE's negative assessment of the application, the Secretary should have been satisfied that there was not sufficient evidence on injury to justify proceeding with the case.⁹⁹ Thus, in accordance with Article 5.8, the Secretary should have rejected the application "as soon as" it received CNCE Record No. 405 dated 7 January 1998. Rather than doing so, however, the Secretary kept the file open, subsequently deciding to initiate the investigation following the submission of additional information by the applicant. The Secretary therefore failed to meet the requirements of Article 5.8 of the AD Agreement.

7.108 Argentina argues that rejection of the application "as soon as" the CNCE's negative assessment was received would have been contrary to domestic administrative law, and would have adversely affected the individual rights of the applicant, with all of the administrative consequences that such an act would entail.¹⁰⁰ This does not affect our conclusion that Argentina acted inconsistently with Article 5.8 in this case. We consider that a WTO Member's domestic law does not excuse that Member from fulfilling its obligations under the WTO agreements. In acceding to the WTO, Argentina undertook to be bound by the rules contained in the AD Agreement, and our mandate is to review Argentina's compliance with those rules. Any failure to respect Article 5.8 may not be justified on the basis of inconsistent provisions of domestic law. Article XVI:4 of the WTO Agreement explicitly provides that each Member "shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements". We note that a similar view was expressed by the Guatemala - Cement II panel.¹⁰¹ Regarding Argentina's comment that rejection of the application in January 1998 would have adversely affected the individual rights of the applicant, we note that there is nothing in the AD Agreement that would have prevented the applicant from filing an additional application after rejection of its original application. For this reason, we reject the argument that the individual rights of the applicant would have been negatively affected by the rejection of the application in January 1998.

7.109 In light of the above, we find that, by failing to reject the application "as soon as" the negative assessment from the CNCE was received, the Secretary violated Article 5.8 of the AD Agreement.

7.110 Brazil's Claims 3 and 7 are dependent on a finding of violation under Claims 1, 2, 5 and 6. In other words, Brazil asserts that, if the investigating authorities' treatment of the application and decision to initiate constitute violations of Articles 5.2 and 5.3 of the AD Agreement, then it should never have initiated the investigation in the first place, and should instead have rejected the application in accordance with Article 5.8.

7.111 We recall that we have concluded in para. 7.89 supra that Argentina violated Article 5.3 of the AD Agreement by determining that there was sufficient evidence of dumping to justify the initiation of an investigation. Since the factual basis for Claims 3 and 7 is identical to that for Claims 2 and 6, and since we have already found that those factual circumstances constitute a violation of Article 5.3, it is not necessary to address Brazil's Claims 3 and 7.

7.112 In light of the above, we find that Argentina acted inconsistently with its obligations under Article 5.8 in failing to reject the application "as soon as" the Secretary received the CNCE's negative assessment (in the form of record No. 405) on 9 January 1998.

7.113 Brazil asserts that the time-periods covered by data used for the purpose of examining whether there was sufficient evidence of dumping and injury to justify the initiation of the investigation were different. Brazil alleges that while the period covered to establish sufficient evidence of dumping included portions of 1996 and 1997, the period taken into account to establish sufficient evidence of injury ended in June 1998. In the view of Brazil, the use of different data collection periods for dumping and injury in the decision to initiate the investigation was inconsistent with Article 5.7 of the AD Agreement in two ways. First, Brazil asserts that the collection period for dumping should have been extended to include all of the period considered for injury purposes, i.e., until June 1998. In the view of Brazil, the fact that different periods were considered indicates that the dumping and injury evidence was not considered simultaneously in the decision whether or not to initiate the investigation. Second, Brazil asserts that Argentina failed to comply with Article 5.7 by not considering the evidence of both dumping and injury simultaneously in the same decision to initiate the investigation. Brazil argues that the APCDS determined that there was sufficient evidence of dumping in its report of 7 January 1998. Brazil asserts that the CNCE determined that there was sufficient evidence of threat of injury to justify the initiation on 22 September 1998, following its review of additional information submitted by the applicant. In the view of Brazil, this shows that the evidence of injury was considered more than eight months after the dumping evidence, in breach of Article 5.7 of the AD Agreement. Brazil argues that, for Argentina to have met the requirement in Article 5.7, a new dumping determination taking into account the additional dumping information presented by the applicant on 17 February 1998 should have occurred on 22 September 1998, the date when the CNCE decided that there was sufficient evidence of threat of material injury.

7.114 Argentina argues that the fact that the dates of the reports in which the APCDS and the CNCE found sufficient evidence of dumping and threat of injury are different does not mean that, at the moment of deciding on the initiation of the investigation, the Argentine authorities did not consider simultaneously the evidence of dumping and injury.

7.115 The United States, as a third party, argues that Brazil's argument is based on a misinterpretation of the term "simultaneously" as this term is used in Article 5.7. In the view of the United States, when viewed in context, the term "simultaneously" in Article 5.7 is linked to the term "considered", not the term "evidence". Thus, in the view of the United States, the obligation in Article 5.7 is to consider the evidence of dumping and injury simultaneously (for example, in concurrent investigations), not to consider evidence of dumping and injury collected from simultaneous (or identical) time-periods.

7.116 The issue before us is whether Argentina violated Article 5.7 by not considering simultaneously evidence of both dumping and injury in the decision whether or not to initiate an investigation. Brazil raises two main arguments in support of its claim. First, the periods covered by data used to determine whether there was sufficient evidence of dumping and injury to justify the initiation of the anti-dumping investigation were different. Second, Brazil argues that the requirement of Article 5.7 could not have been met because the Argentine authorities considered evidence of injury and dumping at different times.

1.117 Article 5.7 provides in relevant part:

7.118 In our view, Article 5.7 imposes a procedural obligation on the investigating authority to examine the evidence before it of dumping and injury simultaneously, rather than sequentially, inter alia in the decision whether or not to initiate an investigation. We are of the view that Article 5.7 is not concerned with the substance of the decision to initiate an investigation, which is dealt with in Article 5.3 of the AD Agreement. We note that a previous panel has expressed a similar view on this matter.¹⁰²

7.119 We turn to Brazil's first argument. Brazil asserts that the periods covered by data used to determine whether there was sufficient evidence of dumping and injury to justify the initiation of the investigation were different. In other words, Brazil seems to argue that Article 5.7 requires a Member to ensure that its investigating authorities consider evidence of dumping and injury from simultaneous time-periods. We disagree with Brazil's interpretation. Consistent with our view expressed in para. 7.118 supra, we recall that Article 5.7 imposes only a procedural obligation on the part of the authorities of the importing Member. We do not consider that Article 5.7 imposes obligations of a substantive nature. In essence, Brazil argues that evidence of dumping and injury must cover simultaneous periods. We consider that this argument concerns the substantive nature of the evidence considered by the authorities in the decision whether or not to initiate an investigation, rather than the timing of the consideration itself. Brazil's argument therefore falls outside the scope of the obligation contained in Article 5.7. We therefore reject Brazil's first argument.

7.120 The second argument put forward by Brazil is that the requirement of Article 5.7 could not have been met because the Argentine authorities considered evidence of injury and dumping at different times. We recall that the CNCE initially found in January 1998 that the application did not contain sufficient evidence of injury, whereas the APCDS found that it did contain sufficient evidence of dumping. As a result of the CNCE's determination, the applicant submitted additional, updated evidence of both dumping and injury in February 1998. While the Secretary referred the additional, updated evidence of injury to the CNCE, it did not refer the additional, updated evidence of dumping to the APCDS. Thus, when the CNCE found in September 1998 that the additional, updated evidence of injury was sufficient to justify initiation, that finding was based on more recent data than the ACPDS's January 1998 determination (based on dumping data contained in the original application) that there was sufficient evidence of dumping. Since Brazil's argument concerns the timing of the consideration of evidence of dumping and injury, it is in principle covered by the scope of the procedural obligation contained in Article 5.7. We must now determine whether or not Argentina complied with that obligation. In addressing this issue, we shall first determine what constitutes "the decision whether or not to initiate an investigation", and then examine whether evidence of dumping and injury was simultaneously considered in that decision.

7.121 Brazil argues that there were in fact two decisions for the purposes of Article 5.7: one by the APCDS in January 1998, and another by the CNCE in September 1998. Argentina argues that there was only one decision whether or not to initiate the investigation, and that it was taken by the Secretary on 20 January 1999.¹⁰³ Argentina acknowledges that this decision is based on the determinations on dumping and injury received by the Secretary from the APCDS and the CNCE, respectively. At the outset, we consider that "the decision whether or not to initiate an investigation" must be a decision that occurs before, or at the same time as, the moment of initiation of an investigation, because the purpose of the decision is to determine whether or not to initiate an investigation. We further note that Article 5.7 uses the term "decision" in singular form rather than plural. We believe that this means that there is normally one decision in which the relevant authority of the importing Member determines whether or not to initiate an investigation. We consider that it is only in this decision, and not in other decisions, that the relevant investigating authority must simultaneously consider the evidence of dumping and injury.

7.122 Having said that, we must examine the relevant facts of the present dispute. Brazil's argument is that the requirement of Article 5.7 could not have been met because the Argentine authorities considered evidence of injury and dumping at different times. In order to understand how the Argentine system works, we posed various questions to Argentina.¹⁰⁴ Argentina explained that it has a bifurcated system, in which the APCDS - currently the DCD - and the CNCE examine dumping and injury, respectively. Consistent with this separation, at the pre-initiation stage those two agencies examine separately the evidence available and determine whether there is sufficient evidence of dumping and injury, respectively, to justify the initiation of an investigation. These separate determinations are sent by both agencies to the authority in charge of deciding whether or not to initiate an investigation, which is the Secretary. Taking into account the explanations received from the parties, it is clear to us that the Secretary is the authority entitled to decide whether or not to initiate an anti-dumping investigation in Argentina. In this regard, we note that Article 37 of Decree No. 2121/94 provides in relevant part "the Under-Secretariat for Foreign Trade and the National Commission for Foreign Trade (�) shall submit their conclusions to the Secretary for Foreign Trade for a decision on the opening of the investigation to be taken...".¹⁰⁵ Brazil acknowledges that "the MEOSP [is] the authority that issued the decision to initiate the investigation."¹⁰⁶ If the MEyOSP - through the Secretary - is the authority entrusted to decide whether or not to initiate an investigation, then it is with respect to the Secretary's decision whether or not to initiate an investigation against poultry from Brazil that the evidence of dumping and injury should have been considered simultaneously. Brazil's argument that the requirement of Article 5.7 could not have been met because the APCDS and the CNCE considered evidence of injury and dumping at different times must therefore be rejected, because the APCDS and CNCE's determinations were not subject to the requirements of Article 5.7. Provided the Secretary, who is the relevant authority, considered the evidence of dumping and injury simultaneously in his decision to initiate, the requirement of Article 5.7 is met. Brazil has not argued that the Secretary failed to meet this requirement.

7.123 Finally, Brazil argued that, for Argentina to have met the requirement in Article 5.7, a new dumping determination taking into account the updated information presented by the applicant in February 1998 should have been made on 22 September 1998 (which was the date on which the CNCE issued its determination regarding the additional injury data submitted by the applicant in February 1998).¹⁰⁷ We do not agree with Brazil. We recall that Article 5.7 does not impose obligations of a substantive nature. To the extent that this argument concerns the substance of the decision, it must therefore be rejected. Nevertheless, even if that argument were of a procedural nature, we recall that the Secretary is the authority entrusted to decide whether or not to initiate an investigation and hence it is the Secretary's decision - and not that of the CNCE or the APCDS - that must be considered the "decision whether or not to initiate an investigation" within the meaning of Article 5.7. In light of the above, we find that Argentina did not violate Article 5.7 of the AD Agreement simply because the APCDS and CNCE determinations on dumping and injury, respectively, were issued at different times.

7.124 For the foregoing reasons, we reject Brazil's claim that Argentina acted inconsistently with Article 5.7 by not considering, in the decision whether or not to initiate the investigation, the evidence of dumping and injury simultaneously.

65 We note that this is the same standard as that applied by the panels in United States - Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea ("US - Stainless Steel "), WT/DS179/R, adopted 1 February 2001; and Mexico - Anti-Dumping Investigation of High Fructose Corn Syrup, ("Mexico - Corn Syrup"), WT/DS132/R and Corr.1, adopted 24 February 2000.

66 Panel Report, Argentina - Definitive Anti-Dumping Measures on Imports of Ceramic Floor Tiles from Italy ("Argentina - Ceramic Tiles "), WT/DS189/R, adopted 5 November 2001, para. 6.27.

67 Appellate Body Report, United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India ("US - Wool Shirts and Blouses"), WT/DS33/AB/R and Corr.1, adopted 23 May 1997, DSR 1997:I, 323, p. 337 et seq.

68 We note the statement of the Appellate Body in Korea - Dairy that: �We find no provision in the DSU or in the Agreement on Safeguards that requires a Panel to make an explicit ruling on whether the complainant has established a prima facie case of violation before a panel may proceed to examine the respondent�s defence and evidence.� (Appellate Body Report, Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products ("Korea - Dairy"), WT/DS98/AB/R, adopted 12 January 2000, para. 145) The Appellate Body confirmed this view in Thailand - Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from Poland ("Thailand - H-Beams "), WT/DS122/AB/R, adopted 5 April 2001, para. 134: �In our view a panel is not required to make a separate and specific finding in each and every instance that a party has met its burden of proof in respect of a particular claim, or that a party has rebutted a prima facie case.�

69 See footnote 67, supra.

70 Appellate Body Report, Thailand - H-Beams, supra, note 68, para. 136.

71 Appellate Body Report, Canada - Measures Affecting the Export of Civilian Aircraft ("Canada - Aircraft"), WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, 1377, para. 190.

72 d., para. 203; Appellate Body Report, United States - Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities ("US - Wheat Gluten "), WT/DS166/AB/R, adopted 19 January 2001, paras. 173-174.

73 Panel Report, Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico ("Guatemala - Cement I "), WT/DS60/R, adopted 25 November 1998, as modified by the Appellate Body Report, WT/DS60/AB/R, DSR 1998:IX, 3797.

74 Panel Report, Mexico - Corn Syrup, supra, note 65, paras. 7.91-7.110; Panel Report, Guatemala - Cement II, supra, note 48, paras. 8.29-8.58.

75 Panel Report, Guatemala - Cement II, supra, note 48, paras. 8.51-8.53.

76 Brazil's first written submission, paras. 102-104 (Claim 4); para. 132 (Claim 6); and paras. 149 and 155 (Claim 8).

77 Panel Report, Guatemala - Cement II, supra, note 48, para. 8.35.

78 The yield rate refers to the amount of eviscerated poultry obtained from live poultry. According to the applicant, out of 1 kg of live poultry sold in Brazil (including head and feet), 880 gm of eviscerated poultry is obtained (including giblets (heart, stomach, neck and liver), head and feet). This amounts to a yield rate of 88 per cent. According to the applicant, the yield rate for poultry exported to Argentina was less, because sales to Argentina did not include head and feet. Thus, out of 1 kg of live poultry exported to Argentina, only 800 gm of eviscerated poultry (including giblets, but no head or feet) is obtained. This gives a yield rate of 80 per cent for poultry exported to Argentina.

79 It appeared from Argentina's reply to Question 6 of the Panel that supporting information for the adjustment could be found in a publication by Aves & Ovos, included in the application. However, in its reply to Question 68 of the Panel, Argentina asserts that that publication does not provide any information with respect to the 9.09 per cent adjustment carried out. We also take into account the following reply of Argentina:

"as far as normal value is concerned, the evidence considered was the JOX publication of 30 June 1997 accompanying the application, there being no additional requests by the implementing authority in that respect." (Argentina's reply to Question 9 of the Panel)