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2. Defining/identifying the "imported product"
(a) Specificity of the imported product
7.212  The European Communities, Switzerland, Norway and Brazil recall that the Appellate Body
has made clear in US – Lamb  that "a safeguard measure can only be imposed on a specific 'product',
namely the imported product", and that the correct definition of a "specific product" is important to
ensure that a safeguard measure is only imposed "if that specific product ("such product") is having
the stated effects upon the 'domestic industry  that produces like or directly competitive products.'  The
conditions in Article 2.1, therefore, relate in several important respects to specific products".609 610
7.213  According to the European Communities, Switzerland and Norway, this notion of "specific
product" is distinct and narrower than the concept of "like or directly competitive" pr oducts referring to
domestic versus imported products.611  This requirement was already reflected in Article XIX of the
GATT 1947, entitled "emergency action on imports of particular products".612  The requirement of
specificity implies that each product be identified and treated separately with respect to increase in
imports and causality.613  It prevents investigating authoriti es from grouping together two or more
imported products for the purpose of the increased imports, causation analysis and when imposing the
safeguard measures, although they can establish an increase in imports and the effect of causing injury
only for one of them.614
7.214  According to the United States, the complainants provide no support for their allegation that
"the notion 'specific product' referring to imports is distinct and more narrow than the concept 'like ordirectly competitive product' referring to domestic versus imported products".
615  Moreover, their
rationale for defining "specific imported products" first is to require authorities to consider whether
such imports have increased, as a "filter", prior to conducting the like product analysis.  The
complainants' proposed methodology has no basis in the Agreement.  Moreover, it is ironic that the
complainants, who have alleged incorrectly that the USITC's like product definitions were made inorder to attain a desired result, actually propose that the USITC should have conducted a results-
oriented test prior to defining the domestic like product.
616
7.215  The European Communities also argues that th e Agreement on Safeguards clearly envisages
that safeguard investigations be conducted with respect to a single identified product – "a product",
not into a bundle of distinct products or a bundle of selected sub-products.617  Read in the light of the
object and purpose of the Agreement on Safeguards, which is to ensure that serious injury is not
wrongly attributed to an imported product, it prohibits a definition of the imported product that is so
                                                     
609 Appellate Body Report, US – Lamb , para. 86.
610 Brazil's first written submission, para. 87; Switzerland's first written submission, para. 170;
Norway's first written submission, para. 175.
611 European Communities' first written submission, para. 185; Switzerland's first written submission,
para. 171.
612 European Communities' first written submission, para. 186; Switzerland's first written submission,
paras. 171-172.
613 European Communities' first written submission, paras. 186, 188.
614 European Communities' first written submission, para. 186; China's written reply to Panel question
No. 35 at the first substantive meeting; Norway's first written submission, paras. 176-177; Switzerland's firstwritten submission, paras. 171-172.
615 European Communities' first written submission, paras. 184-185.
616 United States' first written submission, paras. 100-101.
617 European Communities' written reply to Panel question No. 19 at the first substantive meeting;
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"broad" as to result in injury being wrongly imputed to a product which is not imported at increased
quantities.618
7.216  The United States maintains that the Agreement on Safeguards does not establish any
parameters for defining "such product".619  The complainants' alleged requirement to subdivide or
identify separate imported products prior to defining the domestic like product has no support in the
Agreement.  The complainants urge that there is support for such requirements and narrow definitions
by reading interpretations into the Agreement that are not permitted by the text or purpose of the
Agreement on Safeguards.620  The dictionary definition affirms that the meaning of the term "product"
is quite flexible and depends on the context in which it is used.  It can apply to one particular itemsold, to a group of items, or to a class of items.  In almost every situation in which items may be
referred to as a "product", it is possible to discern both a broader "product" of which that product is a
subset, and a subset of that product that itself may be referred to as a "product".
621 622
7.217  The United States further submits that the complainants' reliance on the Appellate Body's
findings in US – Lamb  in alleging that the USITC was required to define "specific imported products"
is misplaced.  The Appellate Body rejected imposing a safeguard measure on an imported article,
lamb meat, because of the prejudicial effects that such imported article had on the domestic producers
of another wholly different domestic product, live lambs, that had not been defined as a like
product.623  This statement pertains to the process of defining a domestic industry consisting of
producers of like or directly competitive products and does not speak to separating subject importsinto categories prior to defining domestic like products as the complainants allege.
624  Furthermore, in
the paragraph following this finding, the Appellate Body  explicitly states that "the first step … is the
identification of the products which are 'like or dire ctly competitive' with the imported product", i.e.,
the first step is defining the domestic like product.625 626
7.218  The European Communities and China respond that it can be derived from the Appellate
Body Report in US – Lamb  that imports must be identified before the like domestic product.627
According to the European Communities, it can also be derived from Article 2.1 of the  Agreement on
Safeguards  as clarified by the Appellate Body Report in US – Lamb  that the bundle of domestically
produced articles may not contain products that are not even like or directly competitive with each
other.628  The United States seems to suggest that, had the imported product been defined as lamb
meat and live lambs, then the determination of the like product and domestic industry would be
different – the like and imported product would have been lamb meat and live lamb, because livelamb is an input product for lamb meat.  However, the approach taken by the United States severs
what the Appellate Body has called the logical continuum set forth by Article 2.1 of the Agreement on
Safeguards.
629  Brazil argues that the Appellate Body report in US – Lamb  made it clear that an
                                                     
618 European Communities' written reply to Panel question No. 138 at the first substantive meeting.
619 United States' written reply to Panel question No. 19 at the first substantive meeting.
620 United States' first written submission, para. 96.
621 For example, depending on context, each of the following could be considered a "product":  a
disposable, retractable blue ball point pen; all disposable  blue ball point pens together; all disposable ball point
pens together; all ball point pens together; all disposable pens together; or all pens together.
622 United States' written reply to Panel question Nos. 19 and 21 at the first substantive meeting.
623 Appellate Body Report, US – Lamb , para. 86.
624 Appellate Body Report, US – Lamb , para. 86.
625 Appellate Body Report, US – Lamb , paras. 87, 92 and 94, footnote 55.
626 United States' first written submission, para. 97.
627 China's second written submission, para. 45.
628 European Communities' second written submission, paras. 134-137.
629 European Communities' second written submission, paras. 139-140.WT/DS248/R, WT/DS249/R,
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imported product cannot be like more than a single domestic product.  For each imported product
there is a single domestic like product.630
7.219  The United States rejects the argument that Article XIX and the provisions of the Agreement
on Safeguards require that the competent authorities analyse the Article 2.1 conditions in a particular
order.631  While there is admittedly a logical order to parts of the analysis, there is no specified order
of analysis imposed by the Agreement on Safeguards.  If the Article 2.1 conditions are met, it is
irrelevant whether the competent authorities found increased imports or serious injury first.  All that is
required is that each of the conditions for imposing a safeguard measure is met.  The United States
agrees that Article XIX and the Agreement on Safeguards envision a chronological order in theevolution of an increase in imports that would meet the requirements of Article XIX:  an obligation or
tariff concession, then an unforeseen development, then an increase in imports, and finally, serious
injury. However, this does not impose an obligation on the competent authorities to follow this
chronological order in structuring their analysis.  Th ere are certainly logical first steps in the analysis.
The domestic like product must be identified before determining whether the domestic industryproducing the like product was seriously injured, and both the domestic like product and the imported
product must be defined before determining whether imports have increased relative to domestic
production.  However, there is no requirement in the Agreement on Safeguards that the imported
product must be defined before the domestic like product, or that unforeseen developments be
established before determining whether there were increased imports.  So long as the competentauthorities have made all of the requisite findings, it is largely irrelevant in what order those findings
are made.  A failure to follow the order of findings advocated by the European Communities and
Switzerland does not establish a prima facie case of a violation of the Agreement on Safeguards.
632
7.220  According to the complainants, it is true that the order of making findings does not always
matter.  However certain findings cannot properly be made in the absence of other required findings.Thus, for example, a product cannot be held to be like something that has not yet been defined.  These
complainants contend that the United States admits to having conducted this analysis the other way
round and has, therefore, done so incorrectly.
633
7.221  Korea submits that under the definition adopted by the United States in this case, if the
imported product is CCFRS, CCFRS is the domestic like product which is composed of slab, hot-
rolled, cold-rolled, corrosion-resistant, and plate.  Assuming, arguendo , that CCFRS is a separate like
product, if the industry chose instead to limit its safeguard petition to imports of slab alone, the
question is whether the domestic like product would co ntinue to be CCFRS or slab.  According to the
United States' analysis of US – Lamb , and the United States' matching-up approach634, if the only
imported product is slab then the like product would only be slabs.  In contrast, Korea takes the
position that if the United States is correct that slab is simply a part of a broader like product, then the
fact that a petition is brought against slab alone does not change the like product.  In other words, thelike product for slab imports alone would still be CC FRS.  Each imported product must be "like" each
domestic product.  Mere overlap between the imported products (i.e ., slab, hot-rolled, cold-rolled,
etc.) and the like products (i.e ., slab, hot-rolled, cold-rolled, etc.) is not sufficient to find there is a
                                                     
630 Brazil's second written submission, para. 10.
631 United States' second written submission, paras. 36-39.
632 Switzerland's written reply to Panel question No. 23 at the first substantive meeting.
633 European Communities second oral statement "Scope and Standard of Review" on behalf of the
complainants, para. 28.
634 Korea's second written submission, paras. 25-33.WT/DS248/R, WT/DS249/R,
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single like product.  Korea argues that this is their fundamental disagreement with the United States'
position.635
7.222  The European Communities reiterates that according to Article 2.1, the determination whether
"a product" fulfils certain conditions cannot be made without identifying "such product".  Thus,
although WTO Members are not obliged to regulate the scope of complaints or requests to start a
safeguard investigation, they must ensure that their competent authorities identify the imported
product concerned for the purpose of the determination. The European Communities submits that the
United States has not done so. 636
7.223  Brazil believes that the United States' position on whether investigations and measures apply
to a single imported product or whether multiple products can be grouped into a single investigation
of imports has been confused and is confusing.  On the one hand, the United States appears to imply
that multiple imported products can be bundled together in a single investigation so long as the
domestic industry is defined as including producers that produce like products which are coextensive
with the multiple imported products.637  On the other hand, the United States points out that "the
USITC identifies the subject imports (or specific imported product) that corresponds or matches up to
each of its like product definitions in order to conduct each of its analyses of whether increased
imports of the product have caused serious injury to the domestic producers of the like product".638
Thus, the United States appears to concede that authorities cannot bundle multiple imported productsand investigate whether imports of these multiple imported products have increased and causedserious injury to a domestic industry which consists of producers of multiple like products, and which
have likewise been bundled together.  According to Br azil, there must be discrete investigations and
determinations regarding each individual imported product and the corresponding domestic like
product.
639  Since an imported product must correspond to a domestic product like the imported
product, the like product criteria used to define domestic products must also be applied to theimported product.
640
7.224  According to New Zealand, the position of the United States is that it has to take the imports
as they are presented to it in the petition.  This, of course, ignores that in fact the USITC did group the
imported products differently from the way they were set out in the petition.  However, it also
misconstrues the nature of the obligation under Article 2 of the Agreement on Safeguards and the
need for some degree of specificity in the im ported product for any coherent "like" product
determination to be made.641  The term used is "product", not "products", so there is an implication at
the outset of product specificity.  That conclusion is  reinforced both by the context and the object and
purpose of Article 2 of the Agreement on Safeguards.  While a safeguard measure can be imposed
only where the domestic industry suffering serious injury produces a "like or directly competitive"
product, equally the imported product on which the safeguard measure is imposed must be "like or
directly competitive" with the domestic product.  Only such products are competitive and only injurycaused by an increase in competitive imports could be the subject of a safeguard measure.
642
Although the United States seeks to deny that there is any requirement to demonstrate likenessbetween bundled products, the USITC did, in fact, engage in an attempt to show some degree of
                                                     
635 Korea's written reply to Panel question No. 9 at the second substantive meeting.
636 European Communities' second written submission, para. 99.
637 See in this regard, the United States' arguments in para. 7.232.
638 United States' written reply to Panel question No. 19 at the first substantive meeting .
639 Brazil's second written submission, paras. 6-8.
640 Brazil's second written submission, para. 9.
641 New Zealand's second written submission, para. 3.49.
642 New Zealand's second written submission, paras. 3.50 and 3.51.WT/DS248/R, WT/DS249/R,
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likeness between them.643  The European Communities also argues that the Agreement on Safeguards
does not allow determinations (and data collection) based on "types" or "categories" of productsinstead of a specific imported product.  If the Agreement on Safeguards allowed, as argued by the
United States, determinations based on "types of products" (between which the USITC does not see
"clear dividing lines") without separating specific imported products that are not even like or directly
competitive, the Agreement on Safeguards woul d also allow a determination on T-shirts and
televisions.  In conclusion, different products may be covered by one investigation procedure, as long
as that investigation collects data and provides evidence relating to "such product" and the "domestic
industry that produces like or directly competitive products", thereby enabling the investigatingauthority to make a correct determination.
644
(b) Purpose of specific identification of the imported products
7.225  Japan and Korea consider that imported products must not necessarily be narrower than like
products.645  Rather, the boundary of the imported product should provide a reasonable basis for a
meaningful like (or directly competitive, if applicable) product analysis/comparison with the domesticlike product.  In Brazil's view
646, the grouping of products whether on the import side or the domestic
side must also permit an analysis of the competitive dynamics in the market so that it can be
determined whether imports are actually the cause of the industry's alleged injury.  If these products
are too broadly defined by bundling together products which are not like one another, the one-to-one
competitive relationship between imports and domestic products cannot be established, and wouldresult in a violation of the Agreement on Safeguards.  Brazil submits that it is difficult to see how
determinations of injury and causation could be appropriately made with respect to multiple imported
products and multiple domestic industries producing products like those imported products.
647
7.226  Japan further submits that if it is ensured that the imported products and the domestic
products have the proper competitive relationship, this boundary for the imported products iseventually narrowed down to meet the "like product" criteria, i.e., physical properties, end-use,
consumer perception, and tariff classification.  This way, the "like product" question is interrelated
with the "a product" argument.
648
7.227  Norway argues that the product must be sufficiently defined in order to allow for an adequate
evaluation of all the conditions specified in Article 2 of the Agreement on Safeguards for each and
every product.  The four criteria developed by the Appellate Body to establish likeness (physical
characteristics, end-uses, consumer preferences, customs classification) may be taken as a point ofdeparture for defining the imported product, but they must be applied even more narrowly than for the
determination of what constitutes the "like product".  Bundling of different products is not allowed, as
it would undermine the criteria set out in Article 2.1.  Norway also submits that the concept of
"likeness" is irrelevant in this respect, as that is the second test to identify the domestic industry, not
                                                     
643 New Zealand's second written submission, para. 3.55.
644 European Communities' written reply to Panel question No. 10 at the second substantive meeting.
645 Japan's written reply to the Panel question No. 33 at the first substantive meeting;  Korea's written
reply to Panel question No. 33 at the first substantive meeting.
646 Brazil's written reply to Panel question No. 138 at the first substantive meeting.
647 Brazil's written reply to Panel question No. 137 at the first substantive meeting.
648 Japan's second written submission, para. 8.WT/DS248/R, WT/DS249/R,
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the test to specify the imported product.649  Even if two selected distinct products are "like", it is not
admissible to bundle them together for the purpose of defining a separate imported product.650
7.228  Korea also submits that it is logical that the product must be sufficiently defined in order to
allow for the required evaluation as to the conditions specified in Article 2.2 and elaborated in
Article 4.2 of the Agreement on Safeguards.  The "such" product and "like" product are obviously
intrinsically linked in the Agreement on Safeguards .  According to Korea, the analysis of the
conditions specified in Article 2.1 and Article 4.2 must reveal the proper relationship between each
product, imported and like, so that the analysis of serious injury and causation is meaningful and in
compliance with the Agreement on Safeguards.  If each imported and like product is distinct from theother products investigated, then an analysis which fails to take into account that distinction cannot be
deemed sufficient.
651 652
7.229  Switzerland adds that besides not fulfilling the requirement of being "a product", bundles of
different (imported) products can also not be compared to a "like or directly competitive" product,
because products can only each be "like or directly competitive" with another product.  If each ofthese different products is imported in such increased quantities that it causes or threatens to cause
serious injury to the domestic industry, then an investigation is needed for each of the different
products.
653
(c) Grouping
7.230  China asserts that the USITC is not allowed to group domestic like products and then use
these groupings as imported products for the purpose of the determinations on increased imports.  In
doing so, the USITC uses the "bundling effects" to cover products for which the requirements of the
Agreement on Safeguards are not met.654
7.231  Brazil argues that an implication of grouping of products is that the imported product may
include products which are neither like nor directly competitive with each other and that the effects ofthese imports may be measured on domestic industries producing products that are neither like nor
directly competitive.  In this situation, it is difficu lt to see how the United States could "ensure that the
domestic industry is the appropriate industry in relation to the imported product" or avoid imposition
of safeguard measures based on the "prejudicial effects that an imported product has on domestic
producers of products that are not 'like or directly competitive products' in relation to the imported
product".
655
7.232  The United States contends that, in the present case, the USITC's definitions of like products
are coextensive with the subject imports.  The like product and domestic industry definitions in this
case correspond exactly to the imports subject to investigation.  The USITC did not define the
domestic "like products" to encompass more or different types of steel than the imported articles
identified as subject to investigation.  Moreover, the USITC considered the effects of only the subject
imports (that corresponded to each domestic like product definition) on the domestic industryconsisting of the producers of the corresponding domestic like product.  The USITC's approach is
                                                     
649 Norway's written reply to Panel question No. 22 at  the first substantive meeting; Norway's first
written submission, para. 176.
650 Norway's written reply to Panel question No. 32 at the first substantive meeting.
651 Appellate Body Report, US – Lamb , para. 90 (input and end products must be "like.").
652 Korea's second written submission, para. 23.
653 Switzerland's written reply to Panel question No. 12 at the second substantive meeting.
654 China's second written submission, para. 40.
655 Brazil's second written submission, para. 42.WT/DS248/R, WT/DS249/R,
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clearly consistent with the Agreement on Safeguards and the Appellate Body's findings in US –
Lamb .656  The United States also submits that the complainants fail to recognize that within almost
every defined like product, and the corresponding imported product, there exist a range of goods of
different sizes, grades, or stages of processing.  While goods along the continuum share similar or like
factors, individual items at the end of the continuum may not be as similar.657
7.233  In Korea's view, the argument by the United States that the USITC merely matches up the
imported product to the like product658 is nothing more than a post hoc  rationalization that should be
ignored by the Panel.  Korea submits that the USITC record, however, contradicts even this new like
product formulation: the USITC readily admits that the imported product and like product do not needto be "coextensive".
659  The United States appears to advance its post hoc  formulation of like product
("matching up") to permit a pretext for dismissing the relevance of US – Lamb660 (the imported
product did not include lambs) and to distinguish the USITC's prior precedents in the anti-dumping
and countervailing duties context.661 662
7.234  Japan considers that even when two products are "coextensive", such "coextensiveness" alone
does not assure the required relationship, as it still requires that the sub-component products within a
grouping be like the other sub-components within that grouping in order to secure the likeness
relationship between the imported and the domestic like products in their entirety.663  Bundling of
unlike products, as was done by the United States for CCFRS grouping, is absurd because it results in
comparing imports with unlike domestic products, and in allowing the wrong industry to benefit fromimposed relief.
664  Such comparisons violate Article 2.1, which requires that increased imports be
found to cause serious injury, or threat thereof, "to the domestic industry that produces like or directly
competitive products".  According to Japan, by relying on the "coextensive" excuse, the United States
has masked the true competitive dynamics between the imported and domestic products by bundling
unlike products into a single "like product".  Such bundling should also be rejected, particularly inlight of the specific warnings of the Appellate Body in US – Lamb  and US – Cotton Yarn  not to
benefit the wrong industry in safeguard cases.
665 666
7.235  Brazil further submits that the notion that competent authorities could group several domestic
like products together that do not compete with each other directly and are not like each other, so long
as they are coextensive with the imported products, would leave the issue of like product wide open.
It would mean that the only parameter in defining the domestic product like or directly competitive
with the imported product is that the domestic products must be coextensive with the importedproducts.  Thus, the interpretation being urged upon the panel by the United States could yield absurd
results such as conducting an investigation of imports of cotton shirts and televisions together, with
                                                     
656 United States' first written submission, paras. 65, 98.
657 United States' second written submission, para. 86.
658 United States' first written submission, para. 65; United States' first oral statement, para. 16.
659 Korea's second written submission, paras. 26-27.
660 Appellate Body Report, US – Lamb , para. 98.
661 Appellate Body Report, US – Lamb , paras. 105-106.
662 Korea's second written submission, para. 32.
663 Japan's written reply to Panel question No. 9 at the second substantive meeting.
664 Japan does not believe it matters when the imported product is defined, as long as it is appropriately
defined in accordance with the appropriate like product grouping.
665 Appellate Body Report, US – Lamb, para. 86;  Appellate Body Report, US – Cotton Yarn,  para. 95.
666 Japan's written reply to Panel question No. 10 at the second substantive meeting.WT/DS248/R, WT/DS249/R,
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the only constraint being that the domestic industries must be defined as those producing cotton shirts
and televisions.667
7.236  China agrees that a single determination related to increased imports and serious injury for
both cotton shirts and televisions would be absurd.  While several products can be subject to one
investigation, the specific imported products that will be subject to the determinations required by
Article 2.1 of the Agreement on Safeguards  should always be identified.  The absurdity would be to
have a single determination covering products that are not "specific", since this would fall short of the
requirement of the Agreement on Safeguards to first identify a specific imported product.  This would
be the case if a single determination would cover both cotton shirts and televisions.668
7.237  In Brazil's view, there must be separate investigations and determinations of increased
imports, serious injury and causation of each i ndividual imported product and the domestic industry
producing the corresponding domestic like product.  Competent authorities cannot collapse or bundle
multiple imported products and corresponding multiple like products into the same investigations and
determinations.669  Brazil also submits that the Appellate Body in both US – Lamb and US – Cotton
Yarn  refers to "the imported product" and not to "imported products", implying a single identifiable
imported product.  A single identifiable imported product must correspond with a single identifiable
like product not multiple like products.670
7.238  Brazil671 and New Zealand agree that the term used is "product", not the plural "products", so
there is an implication at the outset of product specificity.  It is difficult to see how one can read thislanguage as permitting inclusion in a single investigation multiple imported products which
correspond to multiple domestically produced like or directly competitive products.  When there is
bundling of different products into an imported product category, the test for determining whether that
is an appropriate "product" for the purposes of the Agreement on Safeguards must be likeness.  That
is to say, if the products within that imported product category are not "like" each other, then there hasnot been a proper identification of the imported product.  Only like products are competitive and since
"likeness" is the basis for determining the domestic product and for determining the product on which
a safeguard measure can be imposed, likeness must be the criterion for determining whether the
imported good is "a product" or a set of separate products.
672  Norway agrees that Article 2.1 of the
Agreement on Safeguards implies that an investigation is directed towards "a" (one) product and that
the grouping of products is not permitted.673  With two different products there would have to be two
investigations – which can of course be carried out in parallel.674
(d) Parameters for identifying the imported product
(i) Likeness
7.239  New Zealand submits that since "likeness" is the basis for determining the domestic product
and for determining the product on which a safeguard measure can be imposed, then likeness must be
the criterion for determining whether the imported good is a "product" or is a set of separate ordifferent products.  Thus, when there is bundling of different products into an imported product
                                                     
667 Brazil's second written submission, para. 43.
668 China's written reply to Panel question No. 12 at the first substantive meeting.
669 Brazil's written reply to Panel question No. 10 at the second substantive meeting.
670 Brazil's second written submission, para. 44.
671 Brazil's written reply to Panel question No. 19 at the first substantive meeting.
672 New Zealand's written reply to Panel question No. 19 at the first substantive meeting.
673 Norway's first written submission, para. 179.
674 Norway's written reply to Panel question No. 10 at the second substantive meeting.WT/DS248/R, WT/DS249/R,
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category, the test for determining whether that is an appropriate "product" for the purposes of the
Agreement on Safeguards must be likeness.675  Norway agrees that it will be useful to apply the four
criteria for "likeness" as a point of departure, but argues that the criteria be applied even more
narrowly than for the determination of what constitutes the "like product".676
7.240  In contrast, the European Communities argues that the question of the "likeness" of imported
products amongst themselves is not relevant.  Arti cle 2.1 of the Agreement on Safeguards employs the
term "like product" only for defining the domestic industry, a distinct step which takes place after
establishing that there are increased imports.  However, it can safely be said that bundling together
imported products which are not even "like" one another certainly does not satisfy the requirement ofincreased imports of specific products.
677  The European Communities adds that the Appellate Body
clarified in US – Cotton Yarn678 that there must be a matching between "such product" and the
domestic products so as to establish that they are like or directly competitive.  Such matching exercise
cannot, however, be undertaken, if imported (and domestic) products may be "bundled" in a way that
the components of the imported product bundle are not even like or directly competitive with all thecomponents of the domestic product bundle.
679  China further argues that it is not permissible to
justify a safeguard measure on one specific imported product based on a finding of "increased
imports" of a different specific product, even if "like or directly competitive".680
(ii) Tariff lines
7.241  The European Communities and Switzerland consid er that the primary basis for identifying
the specific imported product should be tariff codes.   According to them, tariff classification is a
conventional and generally accepted way of classifying and identifying products.  Article XIX of the
GATT 1994 establishes a clear link between imported products and the corresponding tariff
concessions, which are made for single specific products.681
7.242  In the United States' view, each tariff line generally does not correspond to a distinct or
specific product.  The process of defining the domestic like product and the corresponding specific
imported product is based on the facts in each particular case and customs treatment is just one out of
a number of criteria.682  Moreover, allegations that tariff classifications should define specific products
begs the question of the appropriate level of tariff classification (i.e ., four-digit level, six-digit level,
eight-digit level, or ten-digit level), not all of which are harmonized among countries.683 684
7.243  In response, the European Communities notes that the Harmonized Commodity Description
and Coding System (HS) provides an international product nomenclature at the six-digit level.  TheHS is commonly used by WTO members to negotiate schedules and concessions and also referred to
                                                     
675 New Zealand's second written submission, para. 3.52.
676 Norway's second written submission, para. 55.
677 European Communities' written reply to Panel question No. 21 at the first substantive meeting.
678 Appellate Body Report, US – Cotton Yarn , paras. 97 and 98.
679 European Communities' second written submission, para. 129-131.
680 China's first written submission, para. 158.
681 European Communities' written reply to Panel question Nos. 19-20 at the first substantive meeting.
682 United States' first written submission, paras. 86-89.
683 Moreover, a number of prior safeguard disputes have involved single like products covering
multiple tariff classifications. US – Line Pipe ; Korea – Dairy , Notification pursuant to Article 12.1(c),
G/SG/N/10/KOR/, dated 27 January 1997; Argentina – Footwear (EC) , Notification pursuant to Article 12.1(c)
and Article 9, G/SG/N/10/ARG/1/Suppl.3, G/SG/N/11/ARG/1/Suppl.3, dated 17 May 1999.
684 United States' written reply to Panel question No. 20 at the first substantive meeting.WT/DS248/R, WT/DS249/R,
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in the analogous provisions of the Agreement on Textiles and Clothing.  It should therefore be the
starting point for the definition of "a product".685
7.244  The United States responds that, like many of the complainants, it takes the view that while
consideration of customs treatment/tariff classification may be a relevant factor in an analysis of
whether there are clear dividing lines between products, depending on the facts of a particular case, it
is still just one of a number of criteria and not alone dispositive.686  The Appellate Body in  Japan –
Alcoholic Beverages II , albeit interpreting a different agreement with a different object and purpose,
reached the same conclusion and considered that tariff classifications of products could be relevant as
one of a series of factors in determining what are "like products", but not as the primary or decisivefactor.
687  Moreover, the United State contends, it is clear that identification by tariff lines has not
been the decisive factor in other safeguard actions, which have involved single like products covering
multiple tariff classifications.688 689  In fact, in its recent safeguard action on steel, the European
Communities also included numerous tariff classifications in each of its single imported products that
correspond to its various like or directly competitive products.690  According to the United States, the
European Communities' reference to tariff concessions  as the basis for using tariff lines to identify
products also fails to recognize that tariff concessions may include a wide range of products.  The
Appellate Body in Japan – Alcoholic Beverages II , interpreting a different agreement, warned that
while precise tariff bindings "can provide significant guidance as to the identification of 'like
products' … these determinations need to be made on a case-by case basis. … [since] tariff bindingsthat include a wide range of products are not a reliable criterion for determining or confirming product
'likeness.'"
691 692  The United States also argues that the European Communities' rationale for defining
imported products by tariff lines first is intended to require authorities to consider whether such
imports have increased, as a "filter", prior to conducting the like product analysis.  This methodology
is neither required by the Agreement on Safeguards nor apparently followed by the EuropeanCommunities in its own safeguard actions.
693  The European Communities' proposal would appear to
place the cart before the horse in that it focuses on what imports are increasing regardless of whether
there is serious injury to an industry and before the composition of the relevant domestic industry has
been defined. According to the United States, the European Communities would look at increased
                                                     
685 European Communities' second written submission, paras. 123-124.
686 Brazil's written reply to Panel question No. 20 at the first substantive meeting; Japan's written reply
to Panel questions Nos. 20 and 31 at the first substantive meeting; Korea's written reply to Panel questions Nos.
20 and 31 at the first substantive meeting; New Zealand's reply to Panel question No. 20 at the first substantivemeeting.  United States' first written submission, paras. 86-89.
687 Appellate Body Report, Japan – Alcoholic Beverages II , pp. 21-22;  Panel Report, Japan –
Alcoholic Beverages I , para. 5.6.
688 US – Line Pipe ;  Korea – Dairy , Notification pursuant to Article 12.1(c), G/SG/N/10/KOR/, dated
27 January 1997; Argentina – Footwear (EC) , Notification pursuant to Article 12.1(c) and Article 9,
G/SG/N/10/ARG/1/Suppl.3, G/SG/N/11/ARG/1/Suppl.3, dated 17 May 1999.
689 Allegations that tariff classifications should define specific products begs the question of the
appropriate level of tariff classification ( i.e., four-digit level, six-digit level, eight-digit level, or ten-digit level),
not all of which are harmonized among countries.
690 European Communities – Imposing Definitive Safeguar d Measures Against Imports of Certain Steel
Products , Commission Regulation No. 1694/2002/EC of 27 September 2002, paras. 10-15 (Exhibit US-84).
(For example, the European Communities defined hot-rolled coils as a single "product concerned", or importedproduct, consisting of numerous (11) tariff classifications and found that it corresponded to a single like ordirectly competitive product.  The European Communities made similar findings regarding other products in thisaction.).
691 Appellate Body Report, Japan – Alcoholic Beverages II , p. 22.
692 United States' second written submission, paras. 54-56.
693 See European Communities – Imposing Definitive Safeguard Measures Against Imports of Certain
Steel Products , Commission Regulation No. 1694/2002/EC of 27 September 2002 (Exhibit US-85).WT/DS248/R, WT/DS249/R,
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imports by tariff lines, without regard to whether tariff lines should be grouped together, as most
parties agree is appropriate.  The approach advanc ed by the European Communities would result in a
scrutiny of imports to determine which imports ar e showing increases in volume only then to be
followed by an investigation to determine the domestic like product corresponding to an import tariff
line or lines and then if there was an industry somewhere that was being injured as a result of such
increased imports.  Therefore, looking at increases in imports by tariff lines, as proposed by the
European Communities, before defining the domestic like product prevents any consideration of
increases in imports relative to domestic production, since the industry would not yet been have
defined, which the Agreement on Safeguards requires.694
7.245  The European Communities reiterates that tariff classifications up to the six-digit level form
an important starting point in determining what a product is.695  Internationally agreed customs
classifications are relevant for determining the "like domestic product" and reflect the "physical
properties" of products.  Against that background, it is all the more incomprehensible why the United
States continues to defend its untenable position that the term "product" in Article 2.1 of theAgreement on Safeguards is so flexible that it permits a competent authority to bundle an array of
different individual products.  According to the European Communities, although the term "product"
may differ between different legal provisions, where safeguard measures that suspend tariff
concessions are at stake, as in this case, tariff concessions form an important context.  Although the
United States agrees that tariff classifications are relevant, the USITC did not consider them in thisdetermination.  According to the European Communities, however, the key point is that the term
"product" does not depend on the industry, but rather, as the Appellate Body has clarified, the
definition of the domestic industry follows the definition of the imported product and the like or
directly competitive domestic products.
696 697
7.246  Japan, Korea, Norway and Brazil argue that tariff lines are helpful, but not determinative,
given that there is sometimes an overlap, particularly in terms of customer perceptions and end-uses,
regarding products in different tariff lines.698  Other considerations, such as end-use, consumer
perceptions, and physical properties, may be (and in this case are) more important than distinctions in
tariff classifications.699  New Zealand submits that the practice of the USITC itself confirms that in
reality, tariff classification is an important aid to product differentiation.700 Norway argues that the
six-digit level that is internationally harmonised should be seen as the outer perimeter of the
internationally agreed definition of specific product. While you will normally not have a situationwhere a distinct or specific product is divided into several tariff lines, you may have several products
under the same tariff line.
701
                                                     
694 United States' second written submission, para. 57.
695 European Communities' written reply to Panel question No. 19 at the first substantive meeting;
European Communities' second written submission, paras. 119-127.
696 Appellate Body Report, US – Lamb , para. 87.
697 European Communities' written reply to Panel question No. 9 at the second substantive meeting.
698 Japan's written reply to Panel question Nos. 20 and 31 at the first substantive meeting; Korea's
written reply to Panel question No. 20 at the first substantive meeting.
699 Japan's written reply to Panel question No. 31 at the first substantive meeting; Brazil's written reply
to Panel question No. 19 at the first substantive meeting; Norway's written reply to Panel question No. 22 at the
first substantive meeting.
700 New Zealand's written reply to Panel question No. 20 at the first substantive meeting.
701 Norway's second written submission, paras. 60-61.WT/DS248/R, WT/DS249/R,
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(iii) Consensus on parameters?
7.247  The United States asserts that the complainants have suggested a variety of definitions for
"such imports" (tariff lines, product exclusion requests, predetermined definitions that are not
universally accepted) with no clearly suggested criteria, other than like product criteria, to actually
consider the evidence collected and the facts of the case in making such a finding.  The complainants'
own arguments, therefore, show that no such cons ensus on steel product definitions exists.  The like
product criteria (i.e., physical properties, uses, consumer tastes, and tariff classifications) suggested by
the complainants do not include a market parameter or competition criteria.702
7.248  The United States responds that the complainants' varied and inconsistent arguments
regarding the appropriate definitions of like product demonstrate that no such universal definitions of
steel products exist.703  Moreover, the complainants, submits the United States, are urging the Panel to
identify a requirement for analysis in all cases, but no-one contends that such alleged universal
definitions exist and should control in all cases.  The United States also rejects the proposition that the
complainants do not have to agree on what definition would be appropriate, but rather it is enough toshow that "what the US did was too broad".
704  This begs the question of how the complainants know
that the USITC's definitions were too broad if complainants cannot reach a consensus on any
alternative definition.705
7.249  The European Communities responds that the United States exaggerates differences in the
arguments of the complainants where there are none.706  The European Communities and Switzerland
also argue that the allegation of the absence of universal product definitions is not true.  An
internationally agreed definition of products is provided under the Harmonized Commodity
Description and Coding System, (the "HS"), de veloped by the World Customs Organization (WCO)
and governed by " The International Convention on the Harmonized Commodity Description and
Coding System ".707  It provides an international product nomenclature at the six-digit level.  All
contracting parties, including the United States, undertake that "[their] tariffs and statistical
nomenclatures shall be in conformity with the HS".708  The HS is commonly used by WTO Members
to negotiate their schedules of concessions, and safeguards measures are a safety valve against
unforeseen effects of such tariff concessions.709  Norway adds that the product definitions provided for
by the HS, therefore, provide an internationally agreed basis for determining what is a specific
                                                     
702 United States' first written submission, para. 103; United States' written reply to Panel question No.
141 at the first substantive meeting.
703 The complainants' proposals for appropriate like pr oduct definitions ranges from product definitions
used in trade remedy cases under other statutes, to tariff classifications (612 classifications in all), to product
descriptions contained in requests for product exclusions.
704 Japan's first oral statement (like product), para. 23.  Japan stated in relevant part:
"First of all, it should be noted that none of the complainants intends to suggest that there is only one
possible definition of the "like product" for the products at issue in this case. . . . The Panel need not
decide which of the breakdowns presented in the complainants' submissions is most appropriate; it
merely needs to find that what the US did was too broad, which it clearly was."
705 United States' second written submission, paras. 52-53.
706 European Communities' second written submission, para. 92.
707 The International Convention on the Harmonized Commodity Description and Coding System,
Brussels, 14 June 1983.
708 Ibid., Article 3.1(a).
709 European Communities' second written submission, para. 120; Switzerland's second written
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imported product.  The six-digit level that is internationally harmonized should therefore be seen as
the outer perimeter of the internationally agreed definition of specific product.710
7.250  China submits also that it is not arguing that there should be universally accepted definitions
of steel products, although such a classification may exist.  China rather challenges the methodology
used by the competent authority to define the product categories that are the subject of the
investigation.711
3. Methodology used by the USITC in determining the "imported product"
7.251  The European Communities, China, Switzerland and Norway submit that the safeguard
measures adopted by the United States are already fundamentally flawed because of the arbitrary andunjustified manner in which the USITC considered itself entitled to group products together for the
purposes of the investigation and the determination
712, contrary to the Agreement on Safeguards.
(a) Identification of the imported product
7.252  The European Communities, China713 and Norway point out that the USITC completely
omitted the first and fundamental step of identifying the "specific imported product".  Instead ofmaking its own determination of the specific imported product, the USITC blindly accepted the
arbitrary description of "the imported product or products included within the investigation that [was]
set forth in the request or petition".
714  The USITC explicitly rejected identifying specific imported
products it investigated when it stated in its general methodology that "[t]he Commission … is not
required to consider, in the first instance, whether and how to subdivide the imported article orarticles".
715  Korea and Norway also argue that the USITC in the instant investigation failed to carry
out an analysis of the imported product, and used as its "starting point" the four general product
categories proposed by the President.716
(b) Grouping
7.253  The European Communities and Switzerland recall that the President's request grouped "a
wide array of steel products into four general categories: (1) CCFRS products, (2) certain carbon and
alloy long products, (3) certain carbon and alloy pipe and tube products, and (4) certain stainless steel
and alloy tool steel products".  The USITC then established "33 product categories" for the collection
of data.717  Again, a number of products were grouped together, and each specific imported product
was not considered separately for the purpose of showing increase in imports and causality.718
7.254  Brazil submits that the starting point was a broadly defined domestic steel industry making
products ranging from carbon steel slab and hot-rolled flat products, to long products, stainlessproducts, and tubular products.  In effect, the entire  steel making sector of the United States' economy
                                                     
710 Norway's second written submission, para. 60.
711 China's second written submission, para. 38.
712 European Communities' first written submission, para. 206; China's first written submission,
para. 154; Norway's first written submission, para. 202; Switzerland's first written submission, para. 192.
713 China's second written submission, para. 33.
714 USITC Report, Vol. I, p. 31. (Exhibit CC-6).
715 European Communities' written reply to Panel question No. 145 at the first substantive meeting;
Norway's first written submission, para. 204.
716 Korea's first written submission, para. 22; Norway's first written submission, para. 204.
717 USITC Report, Vol. I, p. 32.
718 Switzerland's first written submission, paras. 195-196.WT/DS248/R, WT/DS249/R,
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was perceived as being in crisis and the sector convinced the President that imports were to blame.
Thus, the starting point was not individual products and domestic facilities producing those productsbut, rather, the entire steel sector making virtually the entire range of steel products.  While the
President provided the USITC with an exhaustive list of products based on harmonized tariff
categories and various product descriptions, what the USITC really received was a request to figure
out how imports were injuring the steel sector and what to do about it.  Thus, the starting point was
not individual products, but an entire sector of the United States' economy and how to protect that
entire sector from import competition.
719 720
7.255  Similarly, the European Communities argues that the starting point was not an individual
product but a broadly defined domestic steel industry making products described by 612 tariff
headings.  The USTR request of 22 June 2001 was based on the perception that the entire steel sector
making virtually the entire range of steel products was in crisis.721  The request responded to immense
pressure by the Senate to impose steel safeguards to protect the domestic steel industry by referring to
"national security" considerations.722  The European Communities submits that, given the assumption
at the start – that the entire steel sector was being injured by unspecified imported products – the
approach of the USITC, by its own admission, was to protect as broad an array of productive facilities
as possible.723  According to the European Communities, this  backward approach of first identifying a
domestic industry that is allegedly being injured and then bundling a broad array of "certain imported
steel products" is contrary to the Agreement on Safeguards.  The United States agreed under theAgreement on Safeguards to a safeguard determination where the definition of the domestic industry
depends on the proper identification of such imported products and like or directly competitive
products (and not the other way round).  This was also clarified by the Appellate Body in US –
Lamb .
724  The European Communities also clarifies that it is conceivable that a request (or petition
from the industry) covers a broad array of products or even a whole industry.  However, such requestdoes not relieve a competent authority from discharging its responsibility to identify specific imported
products on the basis of which it can make its determinations.
725
7.256  The United States stresses that in defining the domestic like product, the USITC started with
the imported article (or articles) that had already been identified in the request or petition for an
investigation ("subject imports") and examined the evidence in order to determine the domestic
product(s) that are like the subject imported product(s).726  This request or petition identified the
universe of imports subject to investigation.  Second, the USITC considered whether there weredomestic products that are like the subject imports.  Third, the USITC applied its long-established
factors to the domestic products corresponding to the subject imports to consider whether there were
                                                     
719 Brazil submits that in the Bush Administration's request to the USITC to conduct a safeguards
investigation, although the investigation covered "certain" steel products, the clear intent was to investigate "theeffect of imports on the US steel industry", and not merely some component of that industry. Letter fromAmbassador  Robert Zoellick to USITC Chairman St ephen Koplan, 22 June 2001.  (Common Exhibit CC-1 to
Brazil's first written submission).
720 Brazil's written reply to Panel question No. 17 at the second substantive meeting.
721 USTR request to the USITC to initiate a safeguard  investigation under Section 201 of the Trade Act
of 1974, Exhibit CC-1, paras. 1-3.
722 Press Release by Senator Rockefeller of 22 May 2001, available at
http://www.senate.gov/~rockefeller/2001/pr052201.html (visited 5 January 2003), Exhibit CC-110. Resolutionof the Committee on Finance of the United States Senate, transmitted to the USITC by letter of 26 July 2001,paras. 2, 3 and 7, Exhibit CC-111.
723 USITC Report, Vol. I, p. 30.
724 Appellate Body Report, US – Lamb , para. 87.
725 European Communities' written reply to Panel question No. 17 at the second substantive meeting.
726 United States' first written submission, para. 95.WT/DS248/R, WT/DS249/R,
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clear dividing lines among domestic products in order to define like products.727  T h e  U S I T C
traditionally takes into account such factors as the physical properties of the product, its customstreatment, its manufacturing process (i.e, where and how it is made), its uses, and the marketing
channels through which the product is sold, and any other relevant factors.
728
7.257  The United States explains more particularly that the USITC begins with the universe of
imports subject to investigation, as identified in  the request or petition.  After determining what
domestic products are like or directly competitive with the subject imports, the USITC considers
whether the domestic products corresponding to the subject imports consist of a single domestic like
product or whether there are clear dividing lines among the products so as to constitute multipledomestic like products.  The USITC applies its like product criteria, including production or
manufacturing processes, in its analysis of whether there are such clear dividing lines as to constitute
multiple like products, or that there are no clear lines and that a single like product definition is
appropriate.
729
7.258  China responds that the USITC did more than defining or identifying the domestic product or
products like or directly competitive with the imported article or articles in the petition or request.  It
grouped these products together and used these groupings as categories of imported products.
Therefore, according to China, for these categories, none of the steps required by the Agreement on
Safeguards were followed.730  In China's view, the investigating authority was not allowed to turn
from the products identified as being subject to th e investigation (which might eventually have been
considered as "specific" enough) into broader product categories without any further justification, and
in particular when these products were not "like".  In this context, it is clear that the bundle under
investigation cannot be considered as a "specific product".  China is of the opinion that, in doing so,
the USITC is, to a large extent, reshaping the range of imported products identified as subject to the
investigation.  Therefore, the investigation was no longer conducted on specific products, but on agroup of products that are unrelated since they are not even "like".
731  The USITC conducted a
"likeness" analysis between these domestic products and grouped them into bundles. Therefore, the
USITC did not conduct an increased imports analysis on some of those products, while in the end,
they are subject to safeguard measures.  This methodology is contrary to the Agreement on
Safeguards.732
7.259  The European Communities, China, Switzerland and Norway argue that the product
"categories" created by the United States' authorities for the purposes of the safeguard investigationand imposition of measures are not justified by definitions that can allow them to be considered
specific products.
733  Where the USITC did consider arguments to the effect that its products
groupings were incorrect734, it rejected these arguments with considerations relating not to the
specificity of the products but, rather, to production processes, vertical integration and coincidence of
economic interests.  However, the very fact that the USITC itself needed to rely on 33 differentproduct categories for the purpose of data collection, demonstrates the artificial nature of the broader
product categories created for the purpose of the determination.
735  The European Communities also
                                                     
727 United States' first written submission, paras. 83-93.
728 United States' written reply to Panel question No. 19 at the first substantive meeting, paras. 46-50.
729 United States' second oral statement, paras. 18 and 28-31.
730 China's second written submission, para. 50.
731 China's second written submission, paras. 55-56.
732 China's second written submission, para. 57.
733 China's first written submission, para. 162.
734 USITC Report, Vol. I, p.  37, where the Commissi on considered whether to "analyse certain carbon
flat-rolled steel separately or as a whole".
735 Switzerland's first written submission, paras. 197-198.WT/DS248/R, WT/DS249/R,
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argues that the USITC confirmed that the imported product must be identified for the purpose of the
determination because it collected data on the basis of 33 product groups.736  In this way, a lack of
increased imports for one specific product could be, and indeed was, masked by combining it with
other products.737
7.260  Switzerland contends that the Agreement on Safegu ards and the Appellate Body require that a
safeguard measure be imposed on a specific product ("such product").  Therefore, each specific
product has to be determined at the outset of an investigation.  Because the USITC failed to do so, it
did not fulfil this first requirement of the Agreement on Safeguards.738  The European Communities
argues that the arbitrary and artificial product definitions used by the USITC in the present casevitiates the whole basis of the USITC Report.
739  Switzerland further considers that, having failed to
establish each relevant specific product that is being imported, the United States cannot determine the
domestic industry that produces the like or directly competitive product, thereby violating Article 2.1
of the Agreement on Safeguards .740
7.261  The United States points out that if there are multiple domestic like products corresponding to
the subject imports, the USITC identifies the subject imports (or specific imported product) that
corresponds or matches up to each of its like product definitions in order to conduct each of its
analyses of increased imports, serious injury and causation.741  The USITC defined 27 separate like
products that corresponded to all the subject imports.  Ten of these definitions corresponded to subject
imports on which remedies were imposed and are subject to review by this Panel.742
7.262  The European Communities responds that the United States offers two contradictory
responses to what constitutes the "imported products" or the "subject imports".  First, the United
States frankly admits that the USITC has not identified the specific imported product concerned and
denies such legal obligation.  The United States subsequently attempts to sell the USITC's domestic
industry definition as identification of the specific imported product.743  The European Communities
also notes that the term "matching" is inaccurate in  this context.  What the USITC has done to identify
the imported products is rather the "cloning" of the domestic industry definition and to re-label it as
"imported product".  The approach of the United States puts the cart before the horse, contrary to the
logical continuum of Article 2.1 of the Agreement on Safeguards.744  According to the European
Communities, the United States itself admitted that  in "cloning" the domestic like product bundles and
calling them imported product, it had not established that all components of the domestic product
bundle are like all components of the imported product bundle.745   Specifically, the European
Communities asserts that the United States admitted that, for example, imported slab and domestic
corrosion-resistant (i.e.) coated steel are both components of a single like product, CCFRS.746  The
                                                     
736 European Communities' second written submission, para. 100.
737 China's first written submission, paras. 164, 169; European Communities' first written submission,
para. 216; Norway's first written submission, paras. 205-210.
738 Switzerland's second written submission, para. 49.
739 European Communities' first written submission, paras. 218, 259.
740 Switzerland's first written submission, para. 199.
741 United States' written reply to Panel question No. 21 at the first substantive meeting, para. 40.
742 United States' first written submission, para. 114.
743 European Communities' second written submission, para. 92.
744 European Communities' second written submission, para.106.
745 United States' written reply to Japan's question No. 1, para. 19.
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United States further conceded that "individual items at the respective ends of the continuum may be
less similar to each other than those in the middle of the continuum".747 748
4. Measure-specific argumentation
(a) CCFRS
(i) Grouping
7.263  Brazil submits that the United States investigated whether imports of CCFRS had increased
and were causing serious injury to the domestic i ndustry producing CCFRS.  According to Brazil, the
United States' determinations of increased imports, the existence of serious injury and the existence of
a genuine and substantial causal link between the serious injury and increased imports were based ona single CCFRS imported product and a si ngle domestic industry producing CCFRS.
749  However,
CCFRS constitutes multiple imported products produced by industries in the United States producing
separate and distinguishable multiple like products.750  The European Communities and China argue
that by artificially aggregating slabs, plate, hot-r olled, cold-rolled and coated products as CCFRS, the
USITC attempted to disguise a sharp dive in imports of plate throughout the entire investigationperiod.
751
7.264  Japan argues that, in the case of CCFRS products, the United States has essentially decided
that slab is like corrosion resistant steel and has thus created an inappropriate, overly broad
grouping.752  According to Japan, the United States obviously failed to meet the like product
requirement when it conjoined, among others, slab with corrosion resistant steel.  Japan argues thatthese products are simply not like one another; nor are they like the plate, hot-rolled, and cold rolled
steel with which they were conjoined.  Customer pe rceptions, for instance, show a clear dividing line
between hot, cold, and coated, rather than betwee n tariff lines within each of these three products.
This is demonstrated by the industry literature that reports the broken down prices of these
products.
753 Indeed, Japan argues, the USITC itself collected data based on these delineations.754 755
7.265  Japan adds that the overarching point of th e complainants concerning the USITC's CCFRS
grouping, is that the grouping does not represent a set of products that can be logically compared with
one another.  The impact of imports on the domestic CCFRS industry cannot be assessed because the
various parts that make up those imports are not like one another and do not compete with one
another.  The effect of grouping them toge ther is to do what the Appellate Body in US – Lamb said
                                                     
747 United States' written reply to Japan's question No. 1, para. 19.
748 European Communities' second written submission, para. 132.
749 Brazil's second written submission, para. 11.
750 Brazil's second written submission, para. 12.
751 China's first written submission, para. 169; European Communities' first written submission,
para. 216.
752 Japan's written reply to Panel question No. 33 at the first substantive meeting.
753 PURCHASING MAGAZINE  (10 Oct. 2002) at 9; METAL BULLETIN  (7 Oct. 2002) ( METAL BULLETIN 'S
appraisal of prices for US steel); and American Iron and Steel Institute, Shipments of Steel Mill Products
(Carbon) (Aug. 2002); Nucor Pricing Sheets (21 Oct. 1999) (Exhibit JPN-1).
754 USITC Report; see also  questionnaires issued by USITC in this case, available at
http://info.usitc.gov (excerpted sample provided in Exhibit JPN-2) .
755 Japan's written reply to Panel question No. 20 at the first substantive meeting.WT/DS248/R, WT/DS249/R,
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should not be done – that is, to impose a safeguard measure that results in protecting an industry that
does not make like or directly competitive products.756
7.266  Korea submits that imports of CCFRS, for instance, are not a particular product but rather
several products.  They share only a basic physical similarity due to commonalties in the production
process – they are flat-rolled, made of steel and often produced in integrated facilities.  By treating all
CCFRS imports as a single like product, the USITC determined that all CCFRS domestic products are
similar in terms of physical properties, uses, production processes, and marketing channels for the
reason that each "type" ( i.e., like product) of domestic CCFRS overlapped with the same "type" of
imported product.  Such circular reasoning results in broadening the like product simply to reflect thescope of imports identified in the petition, whether or not they are "like", in a manner not consistent
with the Agreement on Safeguards.
757
7.267  Brazil also considers that when the United States grouped, among others, slab with corrosion
resistant steel, it completely dismissed any sense of a dividing line based on physical properties, end-
uses, consumer perceptions or tariff classification.  Indeed, the United States appears to have ignoredits own criteria.  Based on customer perceptions, for instance, a clear dividing line exists at least
between hot, cold, and coated flat products, rather than between tariff lines within each of these three
products.  For example, the industry literature reports prices broken down by these products.
758
Indeed, Brazil argues, the USITC itself collected data based on these delineations.759  While the tariff
schedules tend to group these products together (although with multiple tariff lines), the industrycategorization for commercial purposes would seem to be a more convincing criterion.
760  The impact
of imports on the domestic CCFRS industry cannot be assessed because the various products that
make up those imports are not like one another and do not compete directly with one another.  For
example, slab is imported exclusively by United States' steel mills producing the downstream finished
CCFRS rolled products.  Presumably, these imports benefit these mills and have an entirely differenteffect on the domestic industry than, for exam ple, imports of hot-rolled flat products.
761
7.268  The European Communities states that the USITC Report does not provide data on the
artificially aggregated product CCFRS.  There ar e no tables on increased imports, domestic industry
capacity and production and domestic industry financial performance for this product group, but only
tables for individual products (and one covering all seven products in the larger grouping CCFRS).762
New Zealand adds that several disparate imported products were grouped together and termed "theimported product" CCFRS, even though the USITC had itself determined there to be five separateproducts for certain data collation and analysis purposes.
763
                                                     
756 Japan's written reply to Panel question No. 137 at the first substantive meeting.
757 Korea's first written submission, paras. 23-24.
758 Purchasing Magazine transaction prices (Exhibit CC-65); or US Census data on steel imports,
grouped by product category (an example of this data is located at http://www.census.gov/foreign-trade/Press-Release/2002pr/09/steel/steel1cp.pdf.)(Brazil notes that the US census data groupings are the same used by theAmerican Iron and Steel Institute to track imports and domestic shipments).
759 Certain Steel Products , Inv.  No. TA-201-73, USITC Pub. 3479 (December 2001) (hereinafter "ITC
Report" ), Purchasers' Questionnaire, p. 3 ( available at http://info.us itc.gov/OINV/INVEST/OINVINVEST.
NSF/0a915ada53e192cd8525661a0073de7d/f26c82f49f2bd14685256a84004ee7d1/$FILE/Purchaser-
carbon+flat.PDF. ).
760 Brazil's written reply to Panel question Nos.19, 20 at the first substantive meeting.
761 Brazil's written reply to Panel question No. 137 at the first substantive meeting.
762 European Communities' first written submission, para. 215.
763 New Zealand's written reply to Panel question No. 19 at the first substantive meeting .WT/DS248/R, WT/DS249/R,
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7.269  The United States contends that contrary to the European Communities' allegations764, the
USITC clearly considered data for the domestic industry defined as the producers of CCFRS.  TheUSITC repeatedly referred to tables, such as FLAT-ALT-7, in its opinion in the USITC Report.
Many of these tables were not included in the published USITC Report, but were released later,
although it is apparent from the references in the USITC Report that they were considered.
765
(ii) Market and price for CCFRS
7.270  New Zealand submits that the USITC identified the subject imports as those that
corresponded to domestic products that were, themselves, identified by reference to the industries that
produced them.766  Instead of determining the domestic industry by reference to the producers of the
product that is "like" the imported product, the USITC determined the imported product by reference
to its perception of products that are produced by the United States domestic industry.767  The array of
different products included within CCFRS serves to underline that market parameters were not used
to distinguish between different products.  As a consequence, CCFRS does not represent "one sole
authentic market".768
7.271  Brazil argues that there is no such thing as a market for CCFRS.  In contrast, there are clearly
distinct markets for slab, plate, hot-rolled, cold-rolled and corrosion resistant steel.  These are
categories commonly used within the industry.769  The industry itself does not recognize the existence
of a category of CCFRS.  While there may occasionally be discussion of "sheet" products or "flat
products", these never include slab.  Furthermore, th e industry distinguishes between plate, hot-rolled,
cold rolled and corrosion resistant steel for pricing purposes, with prices of all of these products
derived from a base price for each of the individual finished flat products (e.g., a separate price list
with a distinct base price and extras applicable for each of these four products).770  Finally, the
industry trade organizations generally use distinct hot-rolled, cold-rolled, corrosion resistant and plate
categories when reporting on production, shipments, and imports, which indicates that the industryitself recognizes a clear division between these products.
771  Brazil believes that the fact that the
industry itself recognizes separate and distinct categories of a product constitutes a prima facie case
that CCFRS does not define either a product or a like product.772
7.272  Japan and Korea point out that there is no such thing as a price for CCFRS.773  Rather, there
are distinct prices for each of the distinct CCFRS products subject to investigation.  In fact, the
USITC recognized this because the USITC did not ask for pricing data for CCFRS but rather
                                                     
764 European Communities first written submission, para 215.
765 United States' first written submission, para. 141.
766 United States' written reply to Panel questions for the Parties, 12 November 2002, para 267.
767 New Zealand's second written submission, para. 3.31.
768 New Zealand's written reply to Panel question No. 141 at the first substantive meeting.
769 Brazil's written reply to Panel question No. 141 at the first substantive meeting.
770 The Nucor price list attached as an Annex to Brazil's written replies to Panel questions at the first
substantive meeting.
771 Shipments of Steel Mill Products – Carbon, American Iron and Steel Institute Statistical Release
10C, located at Exhibit JPN-1 of Japan's written replies to Panel questions at the first substantive meeting;  USCensus data on steel imports, grouped by product category (an example of this data is located at
http://www.census.gov/foreign-trade/Press-Release/2002pr/09/steel/steel1cp.pdf.)(tracking virtually identical
categories as the AISI statistical release).
772 Brazil's second written submission, para. 12.
773 Japan's written reply to Panel question No. 138 at the first substantive meeting.WT/DS248/R, WT/DS249/R,
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requested prices for hot-rolled, cold-rolled, etc.  The United States has not ever argued that hot-rolled
"competes" with corrosion-resistant steel.774
7.273  The United States affirms that the USITC appl ied its traditional factors in determining that
there was no clear dividing line between types of CCFRS and defining it as a single like product,
corresponding to a single imported product.  The USITC found that CCFRS at various stages of
processing shared certain basic physical properties, were interrelated, had common end-uses, were
generally distributed through the same marketing channels, and were essentially made by the same
production processes (at least at the initial stages).775  An important fact for the USITC in defining this
like product was that CCFRS at one stage of processing generally is feedstock for the next stage ofprocessing.
776 777  In determining that there was no clear dividing line between slab and other CCFRS,
the USITC recognized that slab is dedicated for us e in producing the next stage of steel, hot-rolled
steel.778  Moreover, slab shares common metallurgical properties with CCFRS.779
7.274  According to Japan, it is irrelevant that the production processes are the same "at least at the
initial stages", as the United States argues.  As the comparison between live lamb and lamb meatreveals, later processes can create distinguishable products in terms of physical characteristics, end-
use, and/or customer perceptions.
780
(iii) Different remedy on slab
7.275  In the European Communities' view the imposition of a different remedy on slabs confirms
that there is no such "product" as CCFRS, including sl abs.  The possibility to apply distinctly the two
remedies provided in Proclamation No. 7529 (one for slabs, one for the rest of CCFRS) rests on the
fact that the competent authorities can identify and distinguish "slabs" and the other steel products
grouped as CCFRS.781  Norway admits that it may always be possible to reduce a product to another
sub-product (e.g. red vs. blue pens), but asserts that the imposition of a different remedy is a clear
indication that the "product" (CCFRS), was not sufficiently defined.782
7.276  According to Japan, if products are like one anot her, then the competitive dynamics between
them should, by definition, be the same, thereby requiring the same remedy to address a single level
of injury.  The fact that the President felt compelled to impose a tariff rate quota for slab and a high
tariff for the other products within the CCFRS grouping demonstrates that there are different
competitive dynamics at play between slab and the finished flat products.783  Korea also argues that
the "product" satisfying the conditions of Articles 2.1 and 2.2 is the same "product" against which a
measure can be imposed.  The decision to impose a different remedy for slab is a recognition that theconditions of competition, including supply and demand, for slab are different from the conditions of
competition for the other products treated by the USITC as the same like product.  It appears that this
                                                     
774 Korea's written reply to Panel question No. 141 at the first substantive meeting.
775 United States' first written submission, paras. 116-142; USITC Report, pp. 36-45.
776 United States' first written submission, paras. 119-121, 127, and 140; USITC Report, pp. 37-42.
777 United States written reply to Panel question No. 26 at the first substantive meeting.
778 United States' first written submission, paras. 119-121; USITC Report, pp. 37-40.
779 United States written reply to Panel question No. 29 at the first substantive meeting.
780 Japan's written reply to Panel question No. 13 at the second substantive meeting.
781 European Communities' written reply to Panel question No. 22 at the first substantive meeting.
782 Norway's written reply to Panel question No. 22 at the first substantive meeting.
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is a de facto  recognition by the United States that slabs are in fact a different like product from the
other CCFRS because they are responsive to very different demand conditions.784
7.277  Likewise, Norway argues that there cannot be various measures directed at the same product.
The application of a different remedy is yet another indication that slabs (which may indeed be one or
many more distinct products) are distinct from the other products within a group or bundle.  The fact
that the United States can easily identify "slabs" as something different from the other products in the
bundle, and thus impose a different remedy, testifies to this.785
7.278  Brazil also questions why it is necessary to have a different remedy for a sub-category of the
products within the like product category if they all compete with each other.  Presumably, if slab iscompeting directly with plate, hot-rolled, cold rolled and corrosion resistant CCFRS  products, the
remedy necessary to eliminate the injury from imports of slab is no different than that necessary to
eliminate the injury from imports of these downstr eam products. The need for a different remedy for
slab demonstrates that the products within the grouping are not like one another, do not directly
compete with one another and should not be grouped together. There are different competitivedynamics at play between slab and the finished flat products, meaning that they cannot be part of the
same like product.
786
7.279  New Zealand submits that the USITC treated slab as indivisible from CCFRS for every
determination except remedy.  Thus, increased imports of CCFRS were found to have caused serious
injury to the domestic industry producing the competitor like product, CCFRS.  Logically, the sameremedy would then be applied to the whole imported product.
787
7.280  With regard to the slab remedy, the United States asserts that the Agreement on Safeguards
permits the application of a safeguard measure at different levels to different items covered by that
measure, and even the complete non-application of the measure to some items.788
(b) Tin mill products
7.281  Norway considers that there are six broad categories of tin mill products, with specified sub-
categories and very specific end-uses.  In this regard, Norway makes reference to the explanation
given of tin mill products in the USITC Report.789  Norway notes that thickness and surfaces also vary
greatly depending on the end-use of the product.790  Norway adds that distinctions between the
different products can easily be made and that examples of the different products comprised within
this group of products may be found in the later exclusions provided by the USTR, where ten different
tin mill products were excluded from the safeguard measures on 22 August 2002.791 792
                                                     
784 Korea's written reply to Panel question No. 22 at the first substantive meeting.
785 Norway's written reply to Panel question No. 22 at the first substantive meeting.
786 Brazil's written reply to Panel question No. 22 at the first substantive meeting.
787 New Zealand's reply to the Panel question No. 22 at the first substantive meeting.
788 United States written reply to Panel questions No.22-29 at the first substantive meeting.
789 USITC Report, Vol. II, at p. FLAT-4.
790 Norway's first written submission, footnote 216; Norway's reply to the Panel question No. 34 at the
first substantive meeting.
791 USTR: "List of additional products to be excluded from the Section 201 safeguards measures, as
established in Presidential Proclamation 7529 of March 5, 2002", dated 22 August 2002.  (Available from the
USTR-website, www.ustr.gov) (Exhibit CC-92).  This list shows that 10 different tin mill products, withspecific product specifi cations, are excluded.
792 Norway's written reply to Panel question No. 34 at the first substantive meeting.WT/DS248/R, WT/DS249/R,
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7.282  Brazil believes that there was a basis for the USITC to conclude that tin mill products
constitute a single imported product and that the domestic industry producing the like product is theindustry producing all tin mill products.
793
7.283  The United States contends that tin mill products consist of a wide variety of flat-rolled
carbon or alloy steel, plated or coated with tin or with chromium oxides or with chromium and
chromium oxides.794  Certain complainants would accept defining tin mill products as a single like
product and others, such as Norway, appear to suggest that tin mill should have been defined far more
narrowly as many like products corresponding to certain requests for product exclusions.795 796  Tin
mill is made of cold-rolled steel that has been coat ed with tin or chromium or chromium oxides.  The
like product, "tin mill", consists of a continuum of tin or chromium coated products that, similar to
most "like product" definitions, includes a range of varying sizes, coatings, grades, etc.  Four
Commissioners found that the continuum of tin mill shared similar physical properties or
characteristics, uses, manufacturing processes, and marketing channels.797 798
(c) FFTJ
7.284  The European Communities further argues that the lack of precise definitions of the imported
products concerned vitiates all the USITC's findings on increased imports, injury and causation, as
illustrated by the example of "carbon and alloy fittin gs".  Even the USITC itself recognized that this
"category contains a mix of products ", or diverse "pipe connection products ".799  The artificial
inflation of this product group fundamentally distorted the increased imports and causation analysisand resulted in the imposition of safeguard measures on a broad "mix of products" although the
USITC only established a price undercutting effect for one very specific product that accounts for
around 1% of all imports: "Carbon steel butt-weld pipe fitting, 6 inch nominal diameter, 90 degree
elbow, long radius, standard weight, m eeting ASTM A-234, grade WPB or equivalent
specification".
800  The European Communities further argues that the products group as "carbon and
ally fittings" are not even like or directly competitive (the relevant arguments are summarised in
section E.7(d)).  The European Communities notes that the United States did not respond to the
specific claim that the products bundled as "FFTJ" were not even like each other. Thus, all
determinations based on such imported product should be found incompatible with Article 2.1 of the
Agreement on Safeguards.
E. DEFINITION OF THE DOMESTIC INDUSTRY PRODUCING PRODUCTS THAT ARE LIKE OR DIRECTLY
COMPETITIVE WITH THE IMPORTED PRODUCT
1. Introduction
7.285  The European Communities, Japan, Norway and th e other complainants claim that the United
States acted inconsistently with its obligations under Articles 2.1 and 4.1(c) of the Agreement on
Safeguards in the definition of the "domestic industry that produces like or directly competitive
products".  Japan adds that the United States fu rther violated Articles X:3(a) and XIX:1 of GATT
                                                     
793 Brazil's written reply to Panel question No. 34 at the first substantive meeting.
794 USITC Report, p. FLAT-4.
795 Norway's first written submission, para. 223.
796 United States' first written submission, para. 104.
797 United States' first written submission, paras. 143-144; USITC Report, pp. 48-49.
798 United States' written reply to the Panel question No. 27 at the first substantive meeting.
799 USITC Report, Vol. I, pp. 175 and 179.
800 USITC Report, Vol. II, p. TUBULAR-59, Table TUBULAR-61.WT/DS248/R, WT/DS249/R,
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1994.801  In its defence, the United States contends that the complainants have not established any
basis for the Panel to conclude that any of the USITC's determinations of like product are inconsistentwith Articles 2.1 and 4.1 of the Agreement on Safe guards or Articles X:3(a) and XIX:1 of GATT
1994.
802
7.286  The United States contends that the USITC's approach regarding the definition of the like
product is consistent with the Agreement on Safeguards.803  The USITC defined 27 separate like
products that correspond to subject imports.  Ten of these definitions correspond to subject imports on
which remedies were imposed and are subject to review by this panel.804  The USITC considered the
record evidence using long established factors and looked for clear dividing lines among the varioustypes of domestic steel corresponding to the imported steel subject to this investigation.  The
methodology employed by the USITC was unbiased and objective.  The USITC's definitions of like
products were adequate, reasoned, and reasonable explanations were provided, consistent with United
States' obligations under the Agreement on Safeguards.
805  The USITC's like product determinations
were fully justified given the specific facts with respect to each of the products in question, and theUSITC's adequate and reasonable explanations of its analysis with respect to each like product
determination.
806
2. Defining/identifying the "like product"
(a) Guidance in prescribing a definition
7.287  The European Communities, Japan, Korea, China,  Switzerland and Norway consider that the
notion of "like product" in the Agreement on Safeguards should be guided by the Appellate Body's
teaching that "when construing the prerequisites for taking [safeguard] actions, their extraordinary
nature must be taken into account".  The purpose of a safeguard determination is not, as suggested by
the USITC, to provide the widest possible blanket of protection to an affected industry.  The
Appellate Body clarified that safeguard measures may only be resorted to "in an extraordinaryemergency situation".  This purpose mandates that the domestic industry is defined accurately enough
to ensure a meaningful analysis of all the conditions imposed by the Agreement on Safeguards.
807
7.288  According to the European Communities, Japan, Switzerland, New Zealand and Brazil, one
consequence is that it is not sufficient that one domestic product in a bundle is like or directly
competitive with an imported product, irrespective of how specifically or broadly this has been
defined.  The competent authorities must establish that all components of the bundle of the domestic
products are like or directly competitive with all specific imported products or all components of thebundle of imported products.  Japan emphasises that in the absence of any competition between the
                                                     
801 European Communities' first written submission, para. 222; Japan's first written submission, paras.
78-82;  and Norway's first written submission, para. 213.  For detailed discussions on the violation of GATT
1994 Article X:3(a), see, infra section VII.O.2.
802 United States' first written submission, para. 63.
803 United States' first written submission, para. 96.
804 United States' first written submission, paras. 64 and 114.
805 United States' first written submission, para. 115.
806 United States' second written submission, para. 30.
807 European Communities' first written submission, paras. 197-198; Japan's first written submission,
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imported and domestic product, there is no basis for finding a like product.808  New Zealand adds that
this means that there will be likeness between each of the products within each product bundle, andinsists that a competent authority cannot group together several unlike imported products and then
bundle the same unlike domestic products and claim that it has met the "like product" test of Article 2
of the Agreement on Safeguards.
809
7.289  Brazil argues that in the instant case, the USITC's analysis of CCFRS products only
concerned itself with an analysis of "like" products and did not concern itself with "directly
competitive" products.  In other contexts and under other agreements, the Appellate Body has found
that if an industry is defined by the "like" products it produces, the definition must be more narrowlydrawn than if that industry were defined by the broader "directly competitive" products.
810
7.290  The United States argues that neither the rationale of safeguards as an exception to other
obligations nor the statements in US – Lamb require a narrowly construed like product definition, as
complainants contend.811  First, to the extent the Agreement on Safeguards is an exception, that aspect
of it has already been comprehended in the text of the Agreement on Safeguards.  Members areneither directed or authorized to vary the balance of rights and obligations reflected in the Agreement
by appending an unstated rule of construction on the negotiated language.  Moreover, the United
States submits that these arguments ignore the facts of this investigation which are very different from
those in US – Lamb .  The like product and domestic industry definitions in this case correspond
exactly to the imports subject to investigation.  Thus, the effects of imports on domestic producers ofgoods that are not defined as like products is not at issue.  The complainants' arguments apparently are
more about the range of products within the investigation than the USITC's like product approach.
812
(b) Relevance of definition of like product under other WTO Agreements and existing
GATT/WTO jurisprudence
7.291  Norway argues that, in light of the extraordinary nature of the measures, and the fact that the
concept "like" is coupled with "or directly co mpetitive" in Article 2.1 of the Agreement on
Safeguards, "likeness" under the Agreement on Safeguards must be construed at least as narrowly as
under Article III:2 of the GATT 1994.813 814  New Zealand also points out that "like product" in the
Agreement on Safeguards stands in juxtaposition to "directly competitive product" and must, thus, be
interpreted narrowly limited, so as not to encroach on situations more appropriately dealt with as
"directly competitive".815
7.292  Korea, Japan and Brazil argue that, as the panel in US – Lamb found, there is no reason to
construe the words "like product" in the Agreement on Safeguards  any differently from their
                                                     
808 European Communities' first written submission, para. 200; Switzerland's first written submission,
para. 186; New Zealand's first written submission, para. 4.48; Brazil's first written submission, paras. 88-89;Japan's first written submission, para. 78-79.
809 New Zealand's second written submission, paras. 3.28, 3.21.
810 Appellate Body Report, US – Cotton Yarn , para. 91;  Appellate Body Report, Japan – Alcoholic
Beverages II, at 19; and US – Lamb,  para. 88, footnote 50 (implicitly recognizing this principle).
811 European Communities' first writtensubmission, paras. 197-199; Korea's first written submission,
paras. 27-28;  Japan's first written submission, paras. 88 and 95.
812 United States' first written submission, para. 99.
813 Appellate Body statements in respect of the two concepts in Article III:2 of the GATT in Appellate
Body Report, Japan – Alcoholic Beverages II , pp. 18-20
814 Norway's first written submission, para. 188.
815 New Zealand's first written submission, paras. 4.38, 4.41.WT/DS248/R, WT/DS249/R,
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definition in the Agreements disciplining anti-dumping or countervailing measures.816 817  Korea and
New Zealand also believe that the AD and SCM Agreements are useful to the interpretation of "likeproduct" in the Agreement on Safeguards because "the three Agreements' definitions of the industry
producing a like product are essentially identical".
818 819
7.293  The United States points out that the complainants' proposals for appropriate like product
definitions range from product definitions used in trade remedy cases under other statutes, to tariff
classifications (612 classifications in all), to product descriptions contained in requests for product
exclusions.  Far from universal agreement, some complainants even propose different definitions for
the same item for different purposes, based on the issue contested and their desired result.820
7.294  The United States points out that this dispute presents the Panel with the first occasion to
examine fully the interpretation and application of the term "like products" in the context of the
Agreement on Safeguards.  The Appellate Body has found that the term "like products" "must be
interpreted in light of the context, and of the object and purpose, of the provision at issue, and of the
object and purpose of the covered agreement in which the provision appears".821  The term "like or
directly competitive products", or more specifically, the term "like products" is not defined in the
Agreement on Safeguards or in the GATT 1994, nor has it been at issue in dispute settlement
proceedings involving the Agreement on Safeguards.  Where the term "like products" has been
addressed in other GATT or WTO dispute settlement proceedings, it has been in the context of
provisions of GATT 1994, or other covered agreements with distinct and different purposes fromthose of the Agreement on Safeguards.  As the Appellate Body has cautioned, the interpretation of the
term "like products" for one context cannot be automatically transposed to other provisions or
agreements where the phrase "like products" is used.
822  For instance, it is clear that the interpretation
of the term "like products" in the context of provisions of other covered agreements (e.g ., Article III
of GATT 1994), whose purpose is to avoid protectionism and protect an equal and competitiverelationship between products, will necessarily not be identical to, and perhaps not particularly
relevant for, the Agreement on Safeguards, which has the opposite purpose, i.e., permitting the
temporary protection of a domestic industry under ce rtain circumstances.  The United States argues
that the Panel should recognize the clear distinction between these purposes and reject, in accordance
with the Appellate Body's findings, the comp lainants' proposals to automatically transpose
interpretations made in another context to the Agreement on Safeguards.
823
7.295  The United States also submits that, with regard to the context of the Agreement on
Safeguards, it has not been established in other GATT 1947 or WTO dispute settlement proceedings
what factors are appropriate to be considered in determining whether a domestic product is like an
imported product.  While "general criteria, or groupings of potentially shared characteristics, provide
a framework for analysing the 'likeness' of particular products … it is well to bear in mind [that such
criteria are] simply tools to assist in the task  of sorting and examining the relevant evidence".824
                                                     
816 Panel Report , US – Lamb , para. 7.75 ("Another element of relevant context for interpreting the
'domestic industry' definition of SG Article 4.1(c) are the parallel provisions of the WTO agreements on
Subsidies and Countervailing Measures and Anti-Dumping.").
817 Brazil's first written submission, paras. 88-89; Korea's second written submission, para. 35; Japan's
first written submission, paras. 89-94.
818 Panel Report, US – Lamb , para. 7.75 (emphasis in original).
819 Korea's first written submission, para. 30; New Zealand's first written submission, paras. 4.42-4.43.
820 United States' first written submission, para. 103.
821 Appellate Body Report, EC – Asbestos , para. 88.
822 Appellate Body Report, EC – Asbestos , footnote 60 at p. 34.
823 United States' first written submission, paras. 63-82.
824 Appellate Body Report, EC – Asbestos , para. 102.WT/DS248/R, WT/DS249/R,
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Moreover, it is clear that the domestic like product analysis under the Agreement on Safeguards
should involve "'an unavoidable element of individual, discretionary judgement' … [and] be made ona case-by-case basis".
825  As the Appellate Body has stated, "the adoption of a particular framework to
aid in the examination of evidence does not dissolve the duty or the need to examine, in each case,  all
of the pertinent evidence".826 827
7.296  According to the European Communities, there are criteria to determine "like or directly
competitive products" in the Agreement on Safeguards.  The Appellate Body in interpreting the
analogous provision in US – Cotton Yarn  distinguished between the like and directly competitive
concepts for purpose of safeguard measures and confirmed that the like product relationship isnarrower than "directly competitive".
828  As to the criteria for determining likeness, the European
Communities submits that the Appellate Body in Japan – Alcoholic Beverages II  and EC – Asbestos
confirmed that no matter where in the WTO Agreement the term "like" is used, "each" of the four
border tax adjustment criteria "should be examined" as a framework829 and that all of the evidence
should be considered.  The different purposes of  Article III:2 of the GATT 1994 and the Agreement
on Safeguards are not the point.  What is relevant is that the purpose of the like product concept is the
same in both provisions, that is to analyse whether an imported product competes with a domestically
produced one.  The different purposes of the underlying obligations may be a reason for stretching the
accordion, but the accordion and its keyboard remains the same.  According to the European
Communities, the United States itself agrees that the following criteria are relevant to determine
likeness in a safeguard investigation: "physical properties of the product, its customs treatment, its
manufacturing process, its uses".  The only divergence between the United States and the European
Communities on this point relates to the relevance of the "continuous line of production between an
input and an end-product".830  Japan adds that the central teaching of US – Line Pipe  is that the
Agreement exists to prevent Members from abusing their right to protect domestic industries.831
7.297  Korea also disagrees that the protection of domestic industries is the object and purpose of the
Agreement on Safeguards.  Such reasoning also would beg the fundamental question:  "Which
domestic industries can be protected?"  The Agreement on Safeguards makes clear that only those
domestic industries producing the like product can be the basis for a safeguard measure.832 833  The
chapeau of the Agreement on Safeguards includes as its object and purpose "the need to enhance
rather than limit competition".  The entire context of Article XIX of the GATT 1994 and the
Agreement on Safeguards is to provide only a very limited exception to increased competition fromimports brought about by WTO concessions.
834
(i) Physical properties, end-uses, consumer perception and tariff classification
7.298  The European Communities, China, Switzerland, Norway, New Zealand and Brazil submit
that an examination of likeness must involve, at a minimum, consideration of the four border tax
                                                     
825 Appellate Body Report, EC – Asbestos , para. 101; see also Appellate Body Report, Japan –
Alcoholic Beverages II , at pp. 20-21.
826 Appellate Body Report, EC – Asbestos , para. 102.
827 United States' first written submission, paras. 65, 83, 88.
828 Appellate Body Report, US – Cotton Yarn , paras. 97 and 98.
829 Appellate Body Report, Japan – Alcoholic Beverages II , p. 21, Appellate Body Report, EC –
Asbestos , para. 109.
830 European Communities' second written submission, paras. 244-249.
831 Japan's second written submission, para. 27.
832 Appellate Body Report, US – Lamb , para. 94;  Appellate Body Report, US – Cotton Yarn , para. 95.
833 Korea's second written submission, para. 37.
834 Korea's second written submission, para. 41.WT/DS248/R, WT/DS249/R,
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adjustment criteria:  (i) the physical properties of the products;  (ii) the extent to which the products
are capable of serving the same or similar end-uses; (iii) the extent to which consumers perceive andtreat the products as alternative means of performing similar functions in order to satisfy a particular
need; and (iv) the international classification of the products for tariff purposes.
835  New Zealand adds
that the narrow scope of the term "like product" in the Agreement on Safeguards dictates that there
will need to be a high degree of similarity across these characteristics.836
7.299  Japan asserts that the Appellate Body has held in the context of GATT Article III (e.g., in
Japan – Alcoholic Beverages II ) that the most relevant factors are the products' physical properties,
end-uses, consumer preferences, and tariff classifications.  The point of these factors is clear:  theyhelp determine whether the products compete with each other.  Only if the products compete with
each other are they properly grouped together.  Otherwise, the analysis to be performed in the injury
investigation, as well as in choosing an appropriate remedy, is meaningless.
837
7.300  The European Communities argues that the purpose of the "like or directly competitive
products" test set out in Article 2.1 of the Agreement on Safeguards is to define the domestic industrysufficiently precisely so as to ensure that only domestic producers suffering serious injury are given
temporary breathing room to facilitate adjustment.
838  Brazil, Japan and  Switzerland submit that a
safeguard measure is not permitted unless serious injury is caused by competition with imports.  The
four factor analysis developed in the context of Article III, which is aimed at discerning the extent of
competition, therefore, is equally applicable in the safeguard context.839  Norway argues that the
purpose of defining the parameters of the "like product or directly competitive product" is similar
under Article 2.1 of the Agreement on Safeguards and under Article III:2 of the GATT 1994:  the like
or directly competitive product test is a tool to analyse the competitive relationship between imported
and domestically produced products.840 841
7.301  China agrees that the interpretation of "like products" given in the context of one specific
agreement cannot be automatically transposed in the context of other agreements.842  However, China
asserts that this can sometimes be the case and, in any case, such interpretations provide useful
guidance.843  China, therefore, reaffirms that the factors identified by the Working Party on Border
Tax Adjustments , and further used by the Appellate Body in Japan – Alcoholic Beverages II , are
relevant in this case. 844  The suggested criteria of the Working Party on Border Tax Adjustments  were
meant to be used for all the different cases occurri ng under the GATT.  It is clear that these factors
can be transposed for assessing "likeness" in  the context of the Agreement on Safeguards.845
7.302  The United States submits that all parties agree on the reasonableness of the following
criteria:  physical properties/characteristics, uses, and customs treatment/tariff classification.  Many
                                                     
835 European Communities' first written submission, para. 202; China's first written submission,
para. 150; Switzerland's first written submission, para. 188; Norway's first written submission, para. 188; NewZealand's first written submission, para. 4.45; Brazil's first written submission, para. 94.
836 New Zealand's first written submission, para. 4.44.
837 Japan's first written submission, paras. 98-101.
838 European Communities' written reply to Panel question No. 51 at the first substantive meeting.
839 Japan's, Switzerland's and Brazil's written reply to Panel question No. 51 at the first substantive
meeting.
840 Norway's written reply to Panel question No. 51 at the first substantive meeting.
841 European Communities' second written submission, paras. 244-249.
842 United States' first written submission, para. 64.
843 China's second written submission, paras. 61-62.
844 China's second written submission, para. 67.
845 China's second written submission, para. 69.WT/DS248/R, WT/DS249/R,
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parties agree that consideration of manufacturing processes may be appropriate.  While several of the
complainants maintain that consumer tastes also is an appropriate criteria, no party has objected to theUSITC's consideration of marketing channels.  The USITC's traditional like product criteria are
consistent with the Agreement on Safeguards, there is no directly related treatment of the term in
panel or Appellate Body reports to provide guidance on the issue of the appropriate criteria for the
like product analysis.  Moreover, resorting to the "ordinary" or "plain" meaning of the term "like"
provided by the dictionary "leave[s] many interpretative questions open".
846  The Appellate Body in
EC – Asbestos , interpreting Article III of the GATT, noted th at the dictionary definition of "like" does
not resolve the following three issues of interpretation:  (i) which characteristics or qualities areimportant;  (ii) the degree or extent to which products must share qualities or characteristics;  and (iii)
from whose perspective "likeness" should be judged.
847 848
7.303  According to the United States, the Appellate Body, when addressing the term "like" pursuant
to Article III of the GATT, recognized in Japan – Alcoholic Beverages II , and most recently affirmed
in EC – Asbestos , that the purpose and context of the cove red agreement is important in interpreting
the term "like products"849 and that such interpretation for one context cannot be automatically
transposed to other provisions or agreements where the phrase "like products" is used.850  I n
accordance with the Appellate Body's findings, this Panel should recognize the clear distinction
between agreements with different purposes and reject the complainants' proposals to automatically
transpose criteria established for another context, such as Article III, to the Agreement onSafeguards.
851
7.304  The United States further contends that the purpose of the Agreement on Safeguards is to
permit the temporary protection of a domestic industry under certain circumstances.852  The United
States reiterates that the focus of the analysis in a safeguards investigation is on the condition of the
domestic industry and not, as it is under Article III, on whether imports are being treated in a mannerdifferent from domestic products in the home market, i.e ., whether they are afforded national
treatment.
853  While protecting the competitive relationship between imports and domestic products
and avoiding protection to domestic production is the purpose of Article III854, affording temporary
                                                     
846 Appellate Body Report, EC – Asbestos , para. 92.
847 Appellate Body Report, EC – Asbestos , para. 92.
848 United States' second written submission, paras. 58-61.
849 Appellate Body Report, EC – Asbestos , para. 88.
850 Appellate Body Report, EC – Asbestos , footnote 60, at p. 34, referring to Appellate Body Report,
Japan – Alcoholic Beverages II , at p. 20.  Appellate Body Report, EC – Asbestos , para. 93.
851 United States' second written submission, para. 62.
852 Appellate Body Report, US – Line Pipe , para. 82; Panel Report, US – Lamb , para. 7.76 (the
Agreement's objectives of "creating a mechanism for effective, temporary protection from imports to an industrythat is experiencing serious injury. . . .").
853  The term "like products" has primarily been addressed in dispute settlement proceedings regarding
allegations that national treatment has not been afforded  regarding 1) internal taxes pursuant to Article III:2 of
GATT 1994, and 2) laws and regulations pursuant to Article III:4 of GATT 1994.  The Appellate Body has
indicated in EC – Asbestos , para. 97, regarding the purpose of Article III of GATT 1994 that:
The broad and fundamental purpose of Article III is to avoid protectionism  in the application
of internal tax and regulatory measures.  More specifically, the purpose of Article III "is toensure that internal measures 'not be applied to imported and domestic products so as to
afford protection to domestic production' " Article III protects expectations not of any
particular trade volume but rather of the equal competitive relationship between imported and
domestic products. (emphasis added)
854  Specifically, the Appellate Body in EC – Asbestos,  para. 99, stated:WT/DS248/R, WT/DS249/R,
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protection if necessary to the domestic industry is the purpose of the Agreement on Safeguards.  The
traditional like product criteria considered by the USITC focus on objective rather than subjectivefactors.  Moreover, since the focus of the analysis in a safeguard investigation is on the condition of
the domestic industry rather than the consumer or the relationship of imported and domestic products
in the market, "likeness" should be viewed from the perspective of the domestic product rather than a
consumer, consistent with the purpose of the Agreement on Safeguards.
855  Indeed, the Appellate
Body cautioned in EC – Asbestos  that it may be important to consider " from whose perspective
'likeness' should be judged.  For instance, ultimate consumers may have a view about the 'likeness' of
two products that is very different from that  of the inventors or producers of those products".856
7.305  The United States submits that, in any event, the USITC's like product factors in a safeguard
investigation include the three criteria on which all parties agree (physical properties, uses, and
customs treatment), as well as focus on such other objective factors as the product's marketing
channels and manufacturing process.857 858  These are not mandatory criteria and do not limit the
USITC from considering other factors, as appropriate, in making its findings.859  No single factor is
dispositive and the weight given to each individual factor (and other relevant factors) will depend
upon the facts in the particular case.860  The USITC traditionally has looked for clear dividing lines
among possible products and has disregarded minor variations.861
7.306  The European Communities maintains its alle gation that the United States failed to
systematically look at each of the classical criteria and all the relevant evidence.  According to theEuropean Communities and Switzerland, the USITC has nowhere considered tariff classifications.
862
The European Communities and Switzerland argue that the United States cannot defend itself byclaiming that there are too many classifications at the ten-digit level and that there is no universal
agreement on what constitutes specific steel products in general.
863  Chapters 72 and 73 of the HS
harmonize tariff classifications for steel products at the six digit level.864  Japan submits that, in fact,
the United States is not discerning the proper dividing line between products, but rather between
producers.865
                                                                                                                                                                    
... a determination of "likeness" under Article III:4 is, fundamentally, a determination about
the nature and extent of a competitive relationship between and among products.
855 Appellate Body Report, US – Line Pipe , para. 82 (purpose of Agreement on Safeguards is to permit
a WTO Member to "resort[] to an effective remedy in  an extraordinary emergency situation that ... makes it
necessary to protect a domestic industry temporarily".
856 United States' second written submission, paras. 62-64.
857 Panel Report, Japan – Alcoholic Beverages I, para. 5.7 (Panel was of the view that the likeness of
products must be examined taking into account objective criteria (such as composition and manufacturingprocesses of products)).
858 United States' first written submission, paras. 83-93.
859 Appellate Body Report, EC – Asbestos , para. 102 (general criteria "are neither a treaty-mandated
nor a closed list of criteria that will determine the legal characterization of products").
860 United States' second written submission, para. 65.
861 United States' first written submission, para. 84.
862 Switzerland's second written submission, paras. 42-43; European Communities' second written
submission, para. 263.
863 Switzerland's second written submission, para. 58; United States' first written submission, paras. 65
and 103.
864 European Communities' second written submission, para. 263.
865 Japan's second written submission, para. 20.WT/DS248/R, WT/DS249/R,
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7.307  The United States responded that while consideration of customs treatment may be a relevant
factor in such an analysis depending on the facts of a particular case, it still is one of a number ofcriteria.
866  The USITC found that consideration of customs treatment for purposes of the definition of
the like product was not a "useful factor" given the large number of classification categories (612)
applicable to this investigation.  The fact is, in this case the numerous tariff classifications did not
provide clear distinctions between products.  For instance, each of the 33 data collection categories
individually have from 2 to 65 tariff classifications.867
(ii) Production processes
7.308  All of the complainants recall that, in US – Lamb, the Appellate Body held that the degree of
integration of production processes with respect to products being considered was found to be
irrelevant for the determination of the "domestic industry".  "The focus", the Appellate Body said,
"must, therefore, be on the identification of the [domestic] products and their 'like or directly
competitive' relationship [with the imported products], and not on the processes  by which those
products are produced".868 869  China adds that it is clear from this statement that production processes
are not an element of the like or directly competitive relationship between products.870
7.309  The United States contends that, in spite of complainants' mischaracterizations, the dispute
settlement proceedings in US – Lamb  provides little guidance on the issue of defining the like product.
There was no disagreement in that dispute regarding the definition of like product.871  Rather, the
issue in US – Lamb  involved the definition of the domestic industry after the USITC had already
defined the like product.  The findings in US – Lamb spoke to which producers could be considered
members of the domestic industry producing a single  domestic like product and not to defining the
like product, as complainants have alleged.872  The United States further argues that, contrary to the
complainants' mischaracterizations, the Appellate Body has recognized that it may be appropriate to
consider the production process for a product in defining like products, particularly when the questionarises as to whether two articles are separate products.
873
7.310  New Zealand responds that it is the United States that mischaracterizes the issue in US –
Lamb .  What had been defined in US – Lamb  was the imported product, and the issue was whether the
domestic industry included the producers of a product that was not "like" the imported product.  Thus,
US – Lamb  is of direct relevance to this case.874  Japan takes the view that the United States draws a
distinction without a difference.  As specified in Article 4.1(c) of the Agreement on Safeguards, the
scope of the like (or, if applicable, directly competitive) product defines the scope of the relevantdomestic industry.  Ultimately, the inquiry is abou t defining the "like" product and domestic industry
in ways that reflect meaningful and substantial competitive interactions.  Taking the United States'
theory to its logical extreme, a competent author ity would be authorized to combine any number of
                                                     
866 United States' written reply to Panel question No. 20 at the first substantive meeting.
867 United States' first written submission, para. 86.
868 Appellate Body Report, US – Lamb , para. 94.  See also, Appellate Body Report, US – Cotton Yarn ,
para. 86.
869 European Communities' first written submission, paras. 191-193; Japan's first written submission,
paras. 103-104; Korea's first written submission, para. 32; China's first written submission, para. 140;Switzerland's first written submission, para. 179; Norway's first written submission, para. 197; Brazil's firstwritten submission, para. 96;  New Zealand's first written submission, para. 4.35.
870 China's second written submission, para. 71.
871 Appellate Body Report, US – Lamb , para. 88.
872 Appellate Body Report, US – Lamb , paras. 84, 90 and 95.
873 United States' first written submission, paras. 70, 91.
874 New Zealand's second written submission, para. 3.41.WT/DS248/R, WT/DS249/R,
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products, regardless of the extent of their likeness.  Indeed, if it were true, Japan sees no reason why
the United States would not have simply conducted an investigation and imposed a measure onimports of all "steel".  Japan argues that the fact that there must be some control on the scope of like
product definitions under the Agreement on Safeguards is evident in  US – Lamb .  The Appellate
Body clarified the overarching importance of ensu ring that the nexus between imports and their
domestic counterparts – whether like or directly competitive – is close enough to ensure that a
measure is not imposed to protect industries that do not make like or directly competitive products.
The point is that the like product and, in turn, the industry cannot be so broadly defined as to provide
protection to producers of products wi th which the imports do not compete.
875
7.311  Korea also objects to the United States' proposition and insists that the Appellate Body in US
– Lamb  discussed the issue of like products, in conjunction with the issues of imported products and
domestic industry, for the first time in the context of the Agreement on Safeguards .  The Appellate
Body clarified that the nexus between imports and their domestic counterparts should be close enough
to ensure that a measure is not imposed to protect industries that do not make like or directlycompetitive products.
876  Obviously, the definitions of like product and domestic industry are
interrelated and interdependent concepts – Article 2.1 of the Agreement on Safeguards refers to the
domestic industry that produces like or directly competitive  products while Article 4.1(c), which was
at issue in US – Lamb , defines the domestic industry  as "producers … of the like or directly
competitive  products …" ( emphasis added ).  The Appellate Body's decision in US – Lamb  turned on
the interpretation of the "like product" to determine the scope of the domestic industry.877  T h e
Appellate Body further stated, "…only when those pr oducts have been identified is it possible then to
identify the "producers" of those products".878  Whether the like product was improperly defined by
reference to the industry's production process (in this case) or the domestic industry producing the like
product was improperly defined by reference to the production process (in US – Lamb ), the result is
the same:  "in our view, it would be a clear departure from the text of Article 2.1 if a safeguard
measure could be imposed because of the prejudicial effects that an imported product has on domestic
producers of products that are not 'like or directly competitive' products in relation to the imported
product".879  This same improper "departure" would occur under the United States' definition of the
like product in this case.880
7.312  China also disagrees and stresses that the statement from the US – Lamb  case confirms that
the definition of the domestic industry, through an assessment of the "like or directly competitive"relationship, first requires the identification of the specific imported product.  In no way can the
imported product be re-defined after the domestic industry producing like or directly competitive
products has been identified.  China submits that the United States is misusing this statement and
trying to create confusion.
881
7.313  In the view of the European Communities, Japan, China, Switzerland, Norway and Brazil, the
Appellate Body in US – Lamb  also clarified which criteria are not capable of establishing likeness
between domestic and imported products.  These are, first, the existence of a "continuous line of
production from the raw to the processed product" and second, a "substantial coincidence of economic
                                                     
875 Japan's second written submission, paras. 10-13.
876 Appellate Body Report, US – Lamb , para. 86.
877 Appellate Body Report, US – Lamb , para. 87.
878 Appellate Body Report, US – Lamb , para. 87.
879 Appellate Body Report, US – Lamb , para. 86.
880 Korea's second written submission, paras. 13-17.
881 China's second written submission, para. 65.WT/DS248/R, WT/DS249/R,
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interests" between producers of both products.882 883  Japan adds that these Appellate Body statements
in US – Lamb  could not be more relevant to a case than the present one in which an authority has
conjoined, into a single like product, products that serve as feedstock for one another, but which, in
fact, have independent uses in the marketplace.884
7.314  The United States insists that the USITC's methodology for analysing like product does not
contravene the Agreement on Safeguards, as the complainants assert, because it employs factors
different than those suggested by complainants.  First, the Agreement on Safeguards does not stipulate
which factors are to be considered in the like product analysis under the Agreement on Safeguards.
Second, there is no Appellate Body or panel ruling th at provides any interpretative guidance as to the
criteria to be used in determining the like product for purposes of the Agreement on Safeguards.885
The United States insists that US – Lamb  did not address the USITC's methodology for determining
like product.  Rather, that dispute concerned the definition of the domestic industry.  Indeed, the two
factors at issue in US – Lamb that are cited repeatedly by complainants – "continuous line of
production" and "substantial coincidence of economic interests" – are factors used by the USITC toidentify who are the appropriate domestic industry members after  the like product was defined.  They
are cited nowhere by the USITC in its like product findings with regard to CCFRS products or any of
the other like products.  While the complainants try to imply that these criteria were applied in the
determinations at issue here
886, they fundamentally misstate the analysis actually performed by the
USITC.887 888
7.315  According to the United States, one of the factors considered by the USITC in defining like
products is the product's manufacturing process (i.e ., where and how it is made).  In the context of the
Agreement on Safeguards where the purpose is to allow measures to protect the domestic industry,
albeit temporarily and under certain circumstances, consideration of the manufacturing process for a
product is an appropriate and objective factor.  The Appellate Body in US – Lamb  recognized that it
may be appropriate to consider the production process for a product in defining like products,
particularly when the question arises as to whether two articles are separate products, as noted at
footnote 55.889 890 The complainants have erroneously urged application of Appellate Body findings in
US – Lamb  regarding the definition of a domestic industry to the like product definition and ignored
the Appellate Body's explicit recognition that consideration of production processes may be a relevant
factor in defining like products.891  The Appellate Body also recognized that, when faced with
products at various stages of production, a relevant factor for determining the like product definition(as opposed to the domestic industry definition) was whether products at different stages of
                                                     
882 Appellate Body Report, US – Lamb , paras. 77 and 95.
883 European Communities' first written submission, para. 201; Japan's first written submission, paras.
103-104; China's first written submission, para. 204; Switzerland's first written submission, para. 229; Norway'sfirst written submission, paras. 194-195; Brazil's first written submission, para. 96.
884 Japan's second written submission, para. 13.
885 United States' second written submission, para. 27.
886 Japan's first oral statement (like product), para. 13 ("a continuous line of production between
products – a characteristic heavily relied upon by the US in this case").
887 Panel Report, Argentina – Footwear (EC) , para. 8.124.
888 United States' second written submission, paras. 26-29.
889 Appellate Body Report, US – Lamb , para. 94, footnote 55; Panel Report, Japan – Alcoholic
Beverages I , para. 5.7 (Panel thought it was important to assess "likeness", as much as possible, on the basis of
objective criteria, including, in particular, compositio n and manufacturing processes of the product, in addition
to consumption habits.).
890 United States' second written submission, para. 66.
891 Appellate Body Report, US – Lamb , para. 94, fn. 55; Panel Report, Japan – Alcoholic Beverages I ,
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processing were different forms of a single like product or had become different products.892  T h e
United States submits that although most complainants agree that consideration of manufacturingprocesses, i.e., how a product is made, is an appropriate criteria for a safeguard investigation, they
disagree with the USITC's additional consideration of where the product is made in the manufacturing
process.
893
7.316  According to New Zealand, the United States' reliance on footnote 55 in the US – Lamb
Appellate Body report is misguided.  The interpreta tion advanced by the United States would have the
footnote contradict the plain meaning of the body of the Report.  It is clear from reading footnote 55,
that it is dealing with the question of "separate products".  It does not, as the United States suggests,deal with the issue of "like products".
894  Similarly, Korea also argues that footnote 55 of the
Appellate Body Report in US – Lamb adds nothing to its argument.  The Appellate Body was simply
affirming that the production process could be relevant to the question of whether the products
produced from that process were separate products  (e.g., the production process could confer certain
physical characteristics or could make the product adapted to certain end-uses, but the productionprocess is not a "like" product characteristic).  The inquiry is still to determine the domestically-
produced like product that is to be analysed in relation to the imported product.  For this reason, an
evaluation of the production process could illuminate, but not determine, whether the products were
"like".  The like product determination must still be based on the product produced – not on the nature
of the domestic production process itself.
895 896
7.317  Likewise, the European Communities, China, and Japan consider that the United States
misunderstands this footnote by equating the terms "production process" used in that footnote with
what has been outlawed by the Appellate Body in US – Lamb  as a criterion to establish likeness
between products which are otherwise not like:  "a  continuous line of production between an input
product and an end-product".897  The term "production process" refers to how a product is
manufactured.  The Appellate Body in the above-cited footnote clarified that the production process
may be a useful tool to further separate two products that have the same physical characteristics,
customs classifications and uses.898  The European Communities considers that in most cases, the
production process does not add to the like product determination established on the basis of the
physical properties, customs classifications and e nd-uses.  Thus, the production process may be used
to further separate products, but it can never serve as criterion to bundle products that are otherwise
not like based on the Border Tax Adjustment  criteria.899
7.318  Japan adds that, even if production process is relevant, in any event, the reliance by the
United States on this passage misses an important distinction made in US – Lamb  – the distinction, on
the one hand, between:  (i) an analysis of production processes themselves to discern the extent to
which those processes create separately identifiable products;  and (ii) the vertical integration of those
                                                     
892 Appellate Body Report, US – Lamb , paras. 90, 92 and 94;  Panel Report, US – Lamb , paras. 7.95 and
7.96.
893 United States' second written submission, para. 67, referring for example to Brazil's, Korea's,
Japan's and Norway's written reply to Panel questions Nos. 69 and 150 at the first substantive meeting.
894 New Zealand's written reply to Panel question No. 9 at the second substantive meeting.
895 Appellate Body Report, US – Lamb , para. 94.
896 Korea's second written submission, para. 17.
897 European Communities' second written submission, paras. 251-255, citing Appellate Body Report,
US – Lamb , para. 90.
898 Japan's second written submission, para. 15; China's second written submission, paras. 74-75;
European Communities' second written submission, paras. 251-255.
899 European Communities' second written submission, paras. 251-255.WT/DS248/R, WT/DS249/R,
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processes.900  The Appellate Body specifically stated in US – Lamb  that it had "reservations about the
role of an examination of the degree of integration of production processes for the products atissue".
901  By suggesting in footnote 55 that production processes might be relevant to determining
whether two articles are separate products, the Appellate Body was not endorsing an analysis of
vertical integration.  After all, vertical integration does not mean production processes are somehow
blurred; it merely means they are under the same corporate hat, and perhaps located at the same
general location.  This is particularly relevant for flat-rolled steel.  Despite vertical integration of some
(not all) CCFRS production, each separate product that the USITC chose to bundle is produced on
different machines, housed in different buildings.  Integration, therefore, determines very little aboutthe processes themselves and the extent to which those processes  create separate products.
902
7.319  Brazil also argues that the United States confuses the issue of the relevance of whether one
product is an input for another product, with the relevance of production processes in making a
determination that products are like each other.  It also confuses the issue of coincidence of economic
interests and commonality of facilities with the ability to separately identify the production processesfor the products at issue where there is a very high degree of integration of these processes.  If
anything, the Appellate Body indicated, in footnote 55 to paragraph 94, that it would not find as much
relevance as did the panel, of processing and vertical integration in the identification of products.  As
such, the panel report would seem to describe the outer limits of the relevance of processing and
vertical integration in the identification of products.
903  The relevant inquiry is not whether slab is an
input to downstream products, but rather what happens to slab in the downstream processing – for
example in hot-rolling, cold-rolling and galvanizing – and  whether the changes imparted by the
processing create a different product.904  The Appellate Body simply recognized, consistent with the
statements of the panel report it was reviewing, that  there may be situations where an inquiry into the
production processes of products may be relevant in determining whether two articles are separateproducts.  However, the language on which the United States is relying does not in any way alter the
clear findings of the Appellate Body that whether a product is an input to a downstream product is
irrelevant to the like product analysis and that vertical integration is also irrelevant to this analysis.
905
Read in context, the concern of the Appellate Body  expressed in footnote 55 is nothing more than a
common sense statement.  The fact is that a production process may or may not create a separate like
product; whether or not a separate product is created will depend on what happens to the product
during a particular stage of processing.  Therefore, one cannot assume that a further processed productis either like or unlike the prior stage product,  but rather it will depend on whether and to what extent
the processing changes the product itself.  This does not in any way, however, qualify the Appellate
Body's declaration in the same case that it is irrelevant for purposes of determining the likeness of
products whether there is a continuous line of production between an input product and an end
product.
906
7.320  The European Communities argues that the United States was not entitled to bundle domestic
(or imported) products on the sole basis of a "continuous line of production between an 'input product'
and an 'end-product'".  This has been unambiguously said by the Appellate Body in US – Lamb907 and
is in fact common sense:  a pound of flour is not like a cake, although at the initial stage both flour
                                                     
900 Japan's second written submission, para. 15.
901 Appellate Body Report, US – Lamb, para. 94.
902 Japan's second written submission, para. 16.
903 Brazil's second written submission, para. 33.
904 Brazil's second written submission, para. 35.
905 Brazil's second written submission, para. 39.
906 Brazil's written reply to Panel question No. 19 at the second substantive meeting.
907 Appellate Body Report, US – Lamb, para. 90.WT/DS248/R, WT/DS249/R,
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and a cake are made by milling grain.  Similarly, a roll of raw cotton cloth is not like a T-shirt,
although both share the initial stage of cleaning and weaving cotton.908  According to China, the fact
that two products correspond to two different steps of a continuous production line cannot be
considered as meaning that these two products share the same production process.  It is therefore not a
relevant criterion for assessing "likeness".909
7.321  According to New Zealand, the implication of  the USITC approach is that a competent
authority petitioned by a highly integrated domestic industry to investigate imports of sawn pine logs,
finished lumber, treated pine and pine furniture could conclude that a depressed "domestic industry"
that manufactures that bundle of products was seriously injured by increased imports even though theonly imports that increased were of sawn logs.  Equally, a competent authority could bundle imported
ice-cream, butter, yoghurt, cheese and skim milk powder into one "imported product", and conclude
that there was serious injury from increased imports to the whole of that "domestic industry" even
though the part of that "domestic industry" that produced ice cream was not suffering any injury at all.
Thus, bundling as the USITC has done in this case undermines the limitation in the Agreement onSafeguards that only the domestic industry that produces a product that is "like" the imported product
is entitled to the benefit of a safeguard measure.
910
7.322  The United States responds that the complainants' position is based on the erroneous assertion
that the USITC "bundled together" predefined products rather than that the USITC identified clear
dividing lines, using its long-standing analysis .  The USITC begins with the universe of imports
subject to investigation, as identified in the re quest or petition.  After determining what domestic
products are like or directly competitive with the subject imports, the USITC considers whether the
domestic products corresponding to the subject imports consist of a single domestic like product or
whether there are clear dividing lines among the products so as to constitute multiple domestic like
products.  The USITC applies its like product criteria, including production or manufacturingprocesses, in its analysis of whether there are such clear dividing lines as to constitute multiple like
products, or that there are no clear lines and that a single like product definition is appropriate.  The
complainants' position that it might be permissible to use production processes to separate  articles
into different products, but not to determine that articles are in fact one product, is illogical.  Surely
the complainants do not mean to suggest that these are in fact different exercises, requiring different
criteria.  If it is appropriate to use production processes to look for clear dividing lines, it must be
appropriate to use production processes to determine that there are no clear dividing lines and thatarticles constitute one product.  The Appellate B ody clearly differentiated between an analysis of
"domestic industry" and an analysis as to whether two articles are "separate products", and found that
production processes "may be relevant" in the latter inquiry.  In an inquiry into whether articles are
"separate products" – which the USITC performed for slabs, plate, hot-rolled steel, cold-rolled steel,
and coated steel – one possible conclusion is that they are not, and are in fact a single product.
911
Consideration of manufacturing or production processes, both how and where a product is made, is
particularly relevant where the inquiry involves a product at different stages of processing.  The
interrelationship of the manufacturing processes for a product at different stages of processing may be
informative in finding clear dividing lines between the stages of processing.  For example, since
earlier processed  CCFRS, such as slab or hot-rolled steel, is the feedstock for further processed steel,such as cold-rolled steel or coated steel, all such steel, i.e ., slab, hot-rolled steel, cold-rolled steel, and
coated-steel, is produced using essentially the same production processes in the initial manufacturing
                                                     
908 European Communities' second written submission, paras. 256-257.
909 China's second written submission, para. 76.
910 New Zealand's second written submission, paras. 3.24-3.26.
911 United States' written reply to Panel question No. 18 at the second substantive meeting.WT/DS248/R, WT/DS249/R,
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stages.912  All certain CCFRS is produced from slab, with  the majority of such steel further processed
into hot-rolled steel on hot strip or Steckel mills.913  Substantial quantities of earlier processed steel
are captively consumed by the producer in the production of further processed steel.914  This tends to
blur product distinctions until the processing reaches its final stages.915
7.323  According to the European Communities, China and Switzerland, in this case, the USITC did
not establish "likeness" on the basis of physical characteristics, end-uses, consumer-tastes and habits
and tariff classification.  The USITC "focused [its] analysis in this investigation primarily on the
degree to which the products in question are produced in common production facilities and using
similar production processes"916, although the Appellate Body in US – Lamb  had ruled out this
criterion for the like product determination.917  As a result of these flaws all of the USITC's definitions
of the domestic industry are inconsistent with Articles 2 and 4 of the Agreement on Safeguards.918
7.324  Similarly, Brazil submits that the United States defined a domestic industry based on a
continuous line of production (i.e., that each prod uct in the sequence could be an input for the next
stage product) and coincidence of economic interests (i.e., the fact of vertical integration) and thendefined the imported products based on the universe of products produced by this already defined
industry, because they were largely produced by the same manufacturers.
919
7.325  Korea submits that by focusing primarily on the production process to determine the like
product920, the USITC's analysis permitted an industry's self-definition to substitute for an analysis
and definition of the "industry producing the like product".  The Agreement on Safeguards requires
that the domestic industry be defined by the like product it produces – not the reverse.921 922
(iii) Competition
7.326  Japan submits that the "like or directly competitive" relationship that must exist between the
imported product and the product produced by the domestic industry, as required by the Agreement
on Safeguards and Article XIX:1 of the GATT 1994, should be based on the existence of competition
                                                     
912 The USITC's analysis provided a detailed discussion of the five stages of processing certain carbon
flat-rolled steel.  The manufacturing processes for carbon st eel involve three distinct stages that include: (1)
melting or refining raw steel; (2) casting molten steel in to semifinished form, such as slab; and (3) performing
various stages of finishing operations, including hot-rolling, cold-rolling, and/or coating.  USITC Report, p.OVERVIEW-7.
913 USITC Report, pp. 40-41.
914 Virtually all US-produced slab is internally co nsumed by the domestic slab producers in their
production of hot-rolled steel (sheet, strip, or plate), w ith large shares of hot-rolled and cold-rolled steel also
internally transferred.  During the year 2000, 99.4% of the quantity of domestic producers' total US shipments ofslab were internally transferred, as were 66% of the quantity of domestic producers' total US shipments of hot-rolled steel, and 58.7% of the quantity of total US shipments of domestically-produced cold-rolled steel.  USITCReport, pp. FLAT-1 and 3, nn. 4 and 5.
915 United States' second written submission, paras. 68-69.
916 USITC Report, Vol. I, p. 191.  See also pp. 30.
917 Appellate Body Report, US – Lamb , paras. 95 and 77.
918 European Communities' first written submission, paras. 233-234; China's first written submission,
para. 181; Switzerland's first written submission, paras. 205-206.
919 Brazil's written reply to Panel question No. 23 at the first substantive meeting.
920 USITC Report, Vol. I, pp. 38-39 (flat-rolled), 154-155 (welded other) (Exhibit CC-6); United States'
written reply to Panel question No. 69 at the first substantive meeting;  United States' replies to questions from
other Parties (15 November 2002), paras. 19-20.
921 Appellate Body Report, US – Lamb , para. 94.
922 Korea's second written submission, para. 18.WT/DS248/R, WT/DS249/R,
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between the imported and domestic products to justify imposition of a safeguard measure.  This
requirement exists regardless of whether domestic products are deemed "like" or "directlycompetitive" with the imported product.
923  More generally, no causal relationship can be found
between an increase in imports and a sales decline in domestic products if these products do not
compete for similar end-uses.  As an example, Japan assumes that that sales of domestically produced
semi-finished slab decline during the same period, and that sales of all (other) CCFRS products,
domestic or foreign, remain unchanged.  With all CCFRS products plus semi-finished slab chosen to
define subject imports and their "like products" for the domestic industry, some causal link may be
found between the import increase in a certain part of the subject imports ( i.e., semi-finished slab),
and a decrease in sales in that part of the domestically produced "like products" (again, i.e.,
semi-finished slab).  However, this finding cannot justify the imposition of safeguard measures on
imports of semi-finished slab plus all CCFRS products.  While safeguard measures might be justified
with respect to imports of semi-finished slab products, domestic producers of all flat-rolled steel
products would enjoy protection from import competition without justification.924
7.327  Korea argues that competition and the analysis of competition is fundamental to a proper
safeguards investigation.925  Korea submits that "competition" has been used to analyse like product
under the Agreement on Textiles and Clothing ("ATC") by the Appellate Body in US – Cotton Yarn .
Japan, Korea and New Zealand recall that the Appellate Body specifically relied on its prior findings
in the GATT 1994 Article III context when it indicated that "like" is a subset of "directlycompetitive".
926 927  Japan adds that the Appellate Body dismissed the United States' argument in that
case that the panel erroneously relied on Korea – Alcoholic Beverages , using the same "different
provision and different agreement" argument it espouses here.928 929  Given that Article 6 of the ATC
essentially has the same purpose as the Agreement on Safeguards, it is clear that the domestic industry
must be of narrower scope under the Agreement on Safeguards when an authority relies solely on thewords "like product", as the USITC did in this case.  Brazil, Japan and New Zealand stress that, more
importantly, in US – Cotton Yarn , the Appellate Body  also clearly established the importance of the
competitive relationship between imported and domestic products in discerning whether they are like
or directly competitive with one another by stating that: "[l]ike products are, necessarily, in the
highest degree of competitive relationship in the marketplace".
930 931  New Zealand submits that
excluding any consideration of competitive relations hips from a determination of likeness is plainly
absurd.  Competition is, thus, at the heart of a likeness determination under the Agreement onSafeguards, and the Appellate Body jurisprudence on the meaning of "like product" under GATT
Article III is of direct relevance.
932
7.328  Japan also submits that, as regards the existence of precedents to help discern the proper
treatment of "like product" under the Agreement on Safeguards, there is relevant jurisprudence in
US – Lamb and US – Cotton Yarn , and  the jurisprudence concerning like product delineations under
Article III of the GATT 1994 is also relevant.  The central purpose of the "like or directly
competitive" product analysis is to define appropriately the domestic industry whose performance is
                                                     
923 Japan's first written submission, para. 79.
924 Japan's first written submission, para. 81.
925 Korea's second written submission, para. 41.
926 Appellate Body Report, US – Cotton Yarn , paras. 95-97, footnote 68.
927 Korea's second written submission, para. 35; New Zealand's second written submission, para. 3.35.
928 Appellate Body Report, US – Cotton Yarn,  paras. 21, 92-94.
929 Japan's second written submission, para. 23.
930 Appellate Body Report, US – Cotton Yarn , para. 97.
931 Japan's second written submission, paras. 18-19; New Zealand's second written submission,
para. 3.35; Brazil's second written submission, paras. 41-42.
932 New Zealand's second written submission, para. 3.35.WT/DS248/R, WT/DS249/R,
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allegedly hampered by competition with imported products subject to the investigation.  This
competitive relationship between the domestic indust ry's product and imports must exist regardless of
whether the domestic product is deemed "like" or "directly competitive" with the imported product.
Absent this tight competitive nexus – which is required by both the "like" and the "directly
competitive" standards – it makes no sense to blame imports for whatever problems the domestic
industry may be experiencing.933  US – Lamb  underlines the critical importance of the competitive
dynamic that must exist between imported and domestic products, including between products that
exist along a continuum of production processes.  Regardless of whether the products are produced
using processes that happen to be vertically integr ated, if they do not compete with each other in the
market place, their combination into a single group ing renders any findings by a competent authority
regarding increased imports, serious injury, or causation null and void.  Nor could an authority, as a
result, devise a proper remedy as required under Article 5.1.  Therefore, an improper definition of the
domestic industry makes it impossible to ensure that the wrong industry is not protected.934
7.329  The United States responds that substitutability is not one of the traditional factors considered
by the USITC in conducting it analysis of whether there are clear dividing lines between domestic
products in order to define like product(s).935  Nor has substitutability been one of the criteria
suggested for the like product analysis in the c ontext of dispute settlement proceedings regarding
other covered agreements.936 The complainants' references to US – Cotton Yarn  as relevant to the like
product definition fail to recognize the Appellate Body's statement that "there is no disagreement ...that yarn imported from Pakistan and yarn produced by the producers of the United States ... are like
products.  ... It is, therefore, not necessary for us to address the meaning of the term ' like products ' for
the purposes of this appeal".
937  The issue in US – Cotton Yarn  was whether imported and domestic
products determined to be like could be determined not to be directly competitive.938  There clearly is
a competitive relationship between the imported and domestic products.  The complainants have notdisputed, and neither did the parties in the underlying investigation, that the imported and domestic
products generally consist of the same types of steel, are interchangeable and thus compete with each
other.  Moreover, within any defined like product and the corresponding specific imported product
there exists a range or continuum of goods of different sizes, grades, or stages of processing.  While
goods along the continuum share identical or similar factors, individual items at the extremes of the
continuum may not be as similar or substitutable.
939  Each like product definition must be based on the
facts of the particular case and as the Appellate Body has stated, "the adoption of a particularframework to aid in the examination of evidence doe s not dissolve the duty or the need to examine, in
each case, all of the pertinent evidence".
940  The United States argues that the methodology used by
the USITC is unbiased and objective.  Neither Article 2 nor any other provision in the Agreement on
                                                     
933 Japan's second written submission, paras. 5-6.
934 Japan's second written submission, para. 14.
935 The USITC has considered substitutability between products to be a factor it would consider if it
made its definition(s) on the basis of a directly competitive product analysis.
936 Border Tax Adjustments , para. 18; quoted in part in Appellate Body Report, Japan – Alcoholic
Beverages II , p. 20.
937 Appellate Body Report, US – Cotton Yarn , para. 89.
938 The terminology in the safeguard provision of the Agreement on Textiles and Clothing  ("ATC") is
different, i.e., "like and/or directly competitive products" rather than the "like or directly competitive products"
language in the Agreement on Safeguards.  Based on this different terminology and the findings of theunderlying investigation, the Appellate Body in US – Cotton Yarn  rejected a finding that a product could be part
of the like product definition but then defined out as not directly competitive and thus not included in the
definition of the domestic industry.  Appellate Body Report, US – Cotton Yarn , para. 105.
939  Moreover, goods within a single tariff line consist of a range of items as demonstrated most clearly
by requests by some complainants for like products to be defined more narrowly than by tariff line.
940 Appellate Body Report, EC – Asbestos , para. 102.WT/DS248/R, WT/DS249/R,
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Safeguards sets forth the factors or the order that the competent authority must consider in identifying
the imported product that is like or directly competitive with the domestic product.941
7.330  Brazil further argues that the USITC emphasized that its mandate went beyond narrow
product categories and the facilities producing those products when it talked about "serious injury to
the productive resources employed in the divisions or plants in which the article in question is
produced".942  Thus, the USITC viewed its mandate under Section 201 to protect not only against the
effects of specific imported products on the United  States' industry producing those products, but also
to protect more broadly the "divisions" and "plants" in which the imported product (and other
products) is produced.  This approach by the USITC reinforced the problems presented by the natureof the request and ultimately led to industry definitions which were facility based (i.e. taking into
account vertical integration and continuous lines of production) rather than product based.
943  Within
the CCFRS category, tin mill products and corrosion-resistant products both use a cold-rolled
substrate.944  Tin mill products are coated with tin or chromium;  corrosion-resistant products are
coated with zinc or zinc-aluminum alloys.945  Yet, they were treated as separate like products, with all
commissioners treating corrosion-resistant products as  part of the larger CCFRS product category, and
four commissioners treating tin mill products as its own separate like product.  If anything, it would
make more sense to consider tin mill and corrosion-resistant products as a single like product given
their physical characteristics, their location in the production chain, and their sometimes common
treatment in the HS.  However, the USITC made the odd leap to consider, effectively, slab and plateto be more comparable to corrosion-resistant stee l than tin mill products.  The USITC's logic led to
other bizarre results and inconsistencies similar to the tin mill product example.
946 947
7.331  In particular, the United States stresses that the complainants' arguments that the USITC
should have defined the various like products using the same factors and with the same results as it
had in anti-dumping and countervailing duty investigations involving steel fails to recognize thatthose definitions (as they are in a safeguard investigation) are dependent on the imports subject to that
particular investigation.  Contrary to the complainants' allegations, the USITC had no obligation nor
reason to explain why its like product definitions in the instant safeguard action based on a different
type of trade remedy investigation, with a very different scope of subject imports and a different
record, were not the same as the various decisions in other types of trade remedy investigations that
were based on different subject imports and different underlying facts.
948
(c) Relevance of like product definitions used in the anti-dumping and countervailing duty
contexts
7.332  Korea, Japan, New Zealand and Brazil point out that in this case, the USITC substantially
departed from the traditional like product factors it had used in the safeguards and anti-dumping or
countervailing duty context to define like products, stating that the concept of industry may be more
                                                     
941 United States' second written submission, paras. 71-73.
942 USITC Report, p. 30.
943 Brazil's written reply to Panel question 17 at the second substantive meeting.
944 USITC Report, Vol. II, at FLAT-2 (Exhibit CC-6).
945 Ibid .
946 For example, despite its determination that carbon and alloy steel slab are "like" finished carbon and
alloy flat products, the USITC elected to treat stainless st eel slab and finished stainless flat products as separate
like products.  USITC Report, Vol. I, pp. 193-194 (Exhibit CC-6).  Similarly, the USITC treated semifinished
long products – billets – as a separate like product, distinct from finished long products.  Ibid., pp. 82-83.
947 Brazil's first written submission, paras. 113-114.
948 United States' first written submission, para. 106.WT/DS248/R, WT/DS249/R,
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broadly defined than in anti-dumping and countervailing duty cases.949  In light of the stated purpose
of Section 201, the USITC expanded its like product consideration, making "both the productivefacilities and processes and the markets for these products … [a] … fundamental concern in defining
the scope of the domestic industry".
950  The result was not only inconsistent with the USITC's past
practice, it was also erroneous and inconsistent with the USITC's findings on other products
simultaneously under investigation in this case.951
7.333  The United States stresses that the complainants' arguments that the USITC should have
defined the various like products using the same factors and with the same results as it had in anti-
dumping and countervailing duty investigations involving steel fails to recognize that thosedefinitions (as they are in a safeguards investigation) are dependent on the imports subject to that
particular investigation.  Contrary to the complainants' allegations, the USITC had no obligation nor
reason to explain why its like product definitions in the instant safeguard action based on a different
type of trade remedy investigation, with a very different scope of subject imports and a different
record, were not the same as the various decisions in other types of trade remedy investigations thatwere based on different subject imports and different underlying facts.
952
3. Comparison of imported product and domestic like product
7.334  China, the European Communities, Norway and Switzerland assert that the United States has
not only acted inconsistently with the first step of properly identifying the like or directly competitive
product, but that it also acted inconsistently with its obligations under Articles 2.1 and 4.1(c) of theAgreement on Safeguards at the second step, i.e., the definition of the "domestic industry that
produces like or directly competitive products".
953
7.335  In the view of the European Communities, China and Switzerland, the USITC fails to
compare imported and domestic products to establish whether they are like or directly competitive.
Instead, the USITC endeavoured to explain at great length why its groups of domestically producedproducts form one single like domestic product.
954  For example, the USITC considered whether to
analyse specific types of CCFRS separately or as  a whole for the purpose of the domestic industry
definition.955  The USITC declined to identify specific products by essentially pointing to:  (i) physical
properties such as a common metallurgical base of those products956;  (ii) the "single common
production base"957 (iii) and the common end-use of all products in the automobile and construction
industry.958 959
                                                     
949 USITC Report, Vol. I , p. 30 (footnotes omitted) (Exhibit CC-6).
950 USITC Report, Vol. I, pp. 30-31 (ExhibitCC-6).
951 Korea's first written submission, paras. 34-36; Japan's first written submission, paras. 129-148;
New Zealand's first written submission, paras. 4.68-4.70; Brazil's first written submission, para. 99, 115.
952 United States' first written submission, para. 106.
953 European Communities' first written submission, para. 222; China's first written submission,
para. 172; Switzerland's first written submission, para. 200; Norway's first written submission, para. 213.
954 European Communities' first written submission, paras. 224-225; China's first written submission,
paras. 174-175; Switzerland's first written submission, paras. 202-203.
955 USITC Report, Vol. I, p. 37.
956 USITC Report, Vol. I, pp. 37-38.
957 USITC Report, Vol. I, pp. 30, 31, 37.
958 USITC Report, Vol. I, pp. 43-44.
959 European Communities' first written submission, para. 231; China's first written submission,
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7.336  The European Communities asserts that the comp lainants have made a prima facie case that
the USITC has only justified the bundling of certain domestic producers by arguing that the productsthey produce are like between themselves, but failed to carry out the essential comparison between
imported and domestic products.
960  Japan submits that comparing the imported and domestic
products is indeed the essential step in the analysis to ensure the proper scope of the domestic like
product.  The United States failed to do this.  This failure incidentally resulted in the fact that the
United States has also failed to justify the bundling of domestic products together.  Its only
justification for this bundling is the integration of certain production processes, which we know is
irrelevant to the question of whether products are distinct or not.  Hence, the domestic products arejust as distinct among themselves as they are when compared "across borders".
961
7.337  The United States responds that the USITC found that the evidence demonstrated that
domestic and imported steel consisted of mainly the same types of steel, and thus that imported steel
competes with corresponding domestic steel.  The European Communities does not contend that the
facts do not support the finding that imported and domestic steel are generally the same types of steel.The parties, including steel industry experts representing both domestic and foreign producers and
importers, did not dispute these findings in the underlying proceeding.  While there is no challenge to
the USITC's factual findings, the European Communities seeks to misrepresent the USITC's approach.
The USITC considers whether there are domestic products that are like the subject imports.  This
analysis considers whether subject imports and domestic products generally share similar physicalproperties, uses, production processes and marketing channels.  This comparison shows whether
domestic and imported CCFRS are similar and whether they are interchangeable, and as such whether
they compete with each other.  For example, in its CCFRS analysis, the USITC found that the
evidence showed that imported CCFRS consists main ly of the same range of carbon steel as the
domestic CCFRS.
962  The USITC found that imported and domestic CCFRS share the same basic
physical attributes and are generally interchangeable, have similar uses with the same metallurgic
composition, thickness, width, and amount of processing, generally were not produced by
significantly different production processes, and overlap in the marketing channels for domestic and
imported CCFRS.  The domestic like product, CCFRS, is like and coextensive with the imported
CCFRS used in the USITC's injury analysis.  The USITC performed this comparison between
imported and domestic products in making its like product determination, in its report.963
7.338  The European Communities and Switzerland submit that in respect of five products, i.e. hot-
rolled bar, cold-finished bar, rebar, welded pipe, as well as carbon and alloy fittings, the USITC did
not make any finding that imported and domestically produced are alike.964 965
7.339  In response to a related question of the European Communities966, the United States refers to
the passages in the USITC Report containing findings that domestic and imported products were like
                                                     
960 European Communities' second written submission, para. 239.
961 Japan's written reply to Panel question No. 18 at the second substantive meeting.
962 The complainants do not take issue with the USITC's findings regarding this comparison nor that
the evidence showed that domestic and imported CCFRS consisted mainly of the same range of carbon steel.European Communities' first written submission, paras. 223-233.
963 United States' written reply to Panel question 18 at the second substantive meeting.
964 USITC Report, Vol. I, pp. 81-83, 147-157.
965 European Communities' first written submission, para. 226; Switzerland's first written submission,
para. 204.
966 European Communities' question No. 4 to the United States at the first substantive meeting.WT/DS248/R, WT/DS249/R,
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for each of the products.967  According to the United States, the complainants have not disputed, nor
did parties to the underlying proceeding, that the imported product and domestic like productgenerally are of the same types of steel and are like.
968
7.340  The European Communities responds that for the "products" CCFRS969, tin mill products,
stainless steel bar, stainless steel rod, and stainless steel wire970, the USITC provided some cursory
assertions, e.g., that "domestic CCFRS is like the imported CCFRS", because in "terms of physical
properties, imported and domestic CCFRS share the same basic physical attributes and are generally
interchangeable".  These assertions are certainly not a sufficient analysis, in particular because there is
no comparison addressing physical characteristics, common end-uses, consumer perceptions and tariffclassifications.
971
7.341  In particular, the European Communities and China submit that the USITC did not establish
that all components of the bundle of domestic products are like or directly competitive with
components of the groups of imported articles.  For example, although the USITC explicitly
acknowledged the existence of different types of  CCFRS, it neither showed that, e.g., domestically
produced slabs are like imported cold-rolled sheets, nor that domestically produced hot-rolled steel is
like imported coated steel.  Similarly it is not shown that imported flanges are like domestically
produced fittings, although the USITC explicitly recognized the heterogeneity of FFTJ, and that this
"category contains a mix of products ".972  Instead, the USITC Report erroneously compares domestic
products within each of the product groupings between themselves. 973
7.342  Norway adds that the methodology employed by the USITC – according to which each
domestically produced article in principle is "like" at least one of the many different imported
products within the same bundle – would also have allowed it to consider "steel" to be one specific
product, and all domestically produced steel to be the "like product", and thereafter to slap a tariff on
stainless steel wire for alleged injury to slab-producers.  This methodology allows for great possibilityof "cross-fertilization" of increases in imports of one product to be counted against alleged injury to
producers of a product that is "like" an imported product not subject to increase, thus clearly
contradicting the explicit statements by the Appellate Body in  US – Lamb .
974 975
7.343  The United States contends that the complainants do not take issue with the USITC's findings
regarding the comparison nor that the evidence s howed that domestic and imported CCFRS consisted
mainly of the same range of carbon steel.976
7.344  In response, the European Communities insists that it challenges the United States' like
product determination on the basis of a vitiated comparison (or no comparison at all) between bundles
                                                     
967 USITC Report, p. 79 for hot-rolled bar, cold-finished bar and rebar; pp. 147 and 158 for certain
welded pipe; pp. 147 and 175 for carbon and alloy fittings; pp. 36-37 for certain carbon flat-rolled steel; p. 49for tin mill products; p. 190 for stainless steel ba r, stainless steel rod and stainless steel wire.
968 United States' written reply to the European Communities' question No. 4 to the United States at the
first substantive meeting.
969 USITC Report, Vol. I, p. 36.
970 USITC Report, Vol. I, pp. 49, 196, 198 and 201.
971 European Communities' first written submission, paras. 227-228.
972 USITC Report, Vol. I, pp. 175 and 179.
973 European Communities' first written submission, paras. 229-230, 261; China's first written
submission, paras. 177-179.
974 Appellate Body Report, US – Lamb , para 86.
975 Norway's second written submission, paras. 66-68.
976 United States' first written submission, para. 118, footnote 142.WT/DS248/R, WT/DS249/R,
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of imported and domestic slab, plate, hot-rolled sheet, cold-rolled sheet and coated sheet claimed to be
like.  For all products but CCFRS and tin mill, the USITC Report contains, if at all, the tautologicalassertion that "there are ten domestic industries producing articles like and corresponding to the
similar imported articles subject to investig ation within the long products category".
977  Only for
CCFRS products and tin mill, the USITC saw itself in a position to at least write a few more lines,
however, as demonstrated by the complainants these do not sufficiently establish likeness because
these only compare "types" or "ranges" of products according to a "no clear dividing line" test without
any basis in the Agreement on Safeguards.978
4. "Directly competitive" products
7.345  The United States submits in response to a question from the Panel that if, despite the United
States' analysis of like products, the Panel finds that its findings are consistent with a directly
competitive product analysis, it cannot find that the USITC's findings are inconsistent with the
Agreement on Safeguards.979
7.346  The European Communities responds that the United States cannot rescue its flawed domestic
industry definition by relying on a "directly competitive product" determination that was somewhat
implicit in its like product determination.980  A competent authority that only makes a finding on "like
product" has not given a reasoned and adequate explanation of its "like product" determination if the
country concerned later argues that the products of the domestic industry are "directly competitive"
even if not like.  The Panel cannot conduct a de novo  investigation and examine whether the
competent authority could have considered the products "directly competitive".  The Panel is,
therefore, confined to reviewing the dete rminations actually made in the report.981  J a p a n ,  K o r e a ,
China, Norway, New Zealand and Brazil agree with the European Communities.  Korea and Norway
add that the USITC did not, and could not have made, a de facto  "directly competitive" analysis
because the USITC explicitly said that it was not doing so.  The USITC stated as follows:  "Havingidentified domestic producers of an article that is like the imported article, we are not required to, and
do not in this case, look further for an industry producing articles that are directly competitive but not
like the imported article".
982 983
7.347  The United States responds that, contrary to certain allegations, the United States has not
shifted its position to urge this Panel to approach its findings on the basis of a directly competitive
product analysis.  The USITC conducted its analysis and made its findings on the basis of a like
product analysis and did not, de facto,  carry out a directly competitive product analysis.  Moreover,
the USITC applied a like product analysis in this investigation consistent with the United States'
                                                     
977 USITC Report, p. 79 for hot bar, cold bar and rebar.  The same applies to the determinations for
welded pipes, pp. 147 and 157 and f ittings, pp. 147 and 175.  The European Communities argues that for SS bar,
rod and wire, the United States' reference to USITC Report, p. 190 cuts and pastes the same meaninglesslanguage.
978 European Communities' written reply to Panel question No. 146 at the first substantive meeting (for
flat products); the European Communities refers to Norway's submission for tin mill products; European
Communities' written reply to Panel question No. 9 at the second substantive meeting.
979 United States' written reply to Panel question No. 65 at the first substantive meeting.
980 United States' written reply to Panel question No. 65 at the first substantive meeting.  See also
United States' reply to Panel's  question No. 67 at the first substantive meeting.
981 European Communities' written reply to Panel question No. 21 at the second substantive meeting.
982 USITC Report, Vol. I , p. 45, footnote 139 (flat-rolled) (Exhibit CC-6); USITC Report, Vol. I ,
p. 147, n. 893 (pipe and tube) (Exhibit CC-6).
983 Japan's, Korea's, China's, Norway's, New Zealand's and Brazil's written replies to Panel question
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obligations under the Agreement on Safeguards.  However, if the Panel finds that the USITC analysis
– which the United States considers as defining a "like product" under both the Agreement onSafeguards and United States law – actually falls within the realm of "directly competitive product"
for Agreement on Safeguards purposes, its characterization as a "like product" analysis would not
affect its consistency with WTO rules.
984
5. Identification of domestic producers
7.348  The European Communities and Norway contend that, at least for some product groups, the
USITC did not provide an explanation for how it determined the producers of the products it had
grouped together, contrary to Article 3.1 of the Agreement on Safeguards.  For example, with respectto the CCFRS group, the USITC only noted that " ***% of total production of certain carbon flat-
rolled steel [were] made by producers of at least 4 of  the 5 types of certain carbon flat-rolled steel" but
unjustifiably confidentialized the data relating to domestic producers.
985  On this basis, it is not
possible to assess the accuracy of the determination of the producers with respect to the quantitative
element.986
6. Burden of proof
7.349  The United States contends that the complainants have not met their burden of making a
prima facie case that the United States' measure is inconsistent with the Agreement on Safeguards
because of the manner in which like products were defined.987
7.350  According to the United States, the complainants do not specifically challenge six of the ten
like product determinations made by the USITC in the ten safeguards measures at issue.  The failure
of the complainants to specifically challenge the majority of the like product determinations made by
the USITC by itself suggests that the USITC's methodology is not inconsistent with the requirements
of the Agreement on Safeguards.  Indeed, those like product factors considered by the USITC are
entirely consistent with the United States' obligations under the Agreement on Safeguards.  As aresult, the only basis on which the Panel can consider whether complainants have met their burden of
proof with respect to like product is to examine whether the specific factual findings made by the
USITC with respect to each of the contested like product findings cannot support a finding of
"likeness" consistent with the ordinary meaning of  the Agreement on Safeguards, in its context and in
light of the object and purpose of the agreement.  In this regard, the United States recalls that the
Panel is not to engage in a de novo  review but, rather, to engage in a review that is limited to an
objective assessment, pursuant to Article 11 of the DSU, of whether the domestic authority hasconsidered all relevant facts, including an examination of each factor listed in Article 4.2(a), of
whether the published report on the investigation contains adequate explanation of how the facts
support the determination made, and consequently of whether the determination made is consistent
with the United States' obligations under the Agreement on Safeguards.
988 989
7.351  The European Communities submits that the United States wrongly asserts that only four of
the ten "like product determinations" have been specif ically challenged and that this suggests that the
                                                     
984 United States' written reply to Panel question No. 21 at the second substantive meeting.
985 USITC Report, Vol. I., pp. 39 and 50.
986 European Communities' first written submission, para. 256; Norway's first written submission,
paras. 233-234.
987 United States' second written submission, para. 73.
988 Panel Report,  Argentina – Footwear (EC) , para. 8.124.
989 United States' second written submission, paras. 26-29.WT/DS248/R, WT/DS249/R,
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other six are sound.990  The methodologies used were inappropriate and therefore all the
determinations are unsound.  For example, the "subject imports" were selected on the basis ofunknown criteria (relating apparently to whether there were "potential import problems")
991, and then
they were divided into bundles that waxed and waned over the course of the proceeding and according
to the Commissioner concerned.  In particular, the product bundles are too broad and contain gaps.992
For none of the product bundles, the USITC carried out the essential comparison between imported
and domestic products (see section E.3 above).
7.352  Korea asserts that if a prima facie case has been made that the United States determination
with respect to the definition of the like product is in violation of the Agreement on Safeguards, it isthe United States that has the obligation to demonstrate that its like product determination is in accord
with the requirements of the Agreement regardless of whether it agrees with the like product
formulations of complainants.
993
7. Measure-specific argumentation
(a) CCFRS
(i) General
7.353  The European Communities and China claim that the USITC's definition of the domestic
industry with respect to CCFRS is inconsistent with Articles 2.1 and 4.1(c) of the Agreement on
Safeguards.994 Japan and Brazil submit that because the USITC did not find each of the five CCFRS
products to be "like" the imports under investigation, and did not even try to establish whether theywere "directly competitive" in relation to the imports under investigation, its determination to
combine all CCFRS products into a single like product and its consequent decision to define the
domestic industry by such products is inconsistent  with Article XIX:1 of GATT 1994 and Articles 2.1
and 4.1(c) of the Agreement on Safeguards.
995
7.354  The United States asserts that the USITC found that domestic CCFRS is like the
corresponding imported CCFRS that is subject to this investigation and defined CCFRS as a single
like product.  The USITC considered the facts using long established factors and looked for clear
dividing lines among the various types of domestic CCFRS corresponding to imported CCFRS
subject to this investigation.  The methodology employed by the USITC was unbiased and objective
based on data analysed using a long-standing and transparent methodology and factors.  The USITC's
definition of certain CCFRS as a single like product is consistent with Articles 2.1 and 4.1 of the
 Agreement on Safeguards and should not be disturbed by the Panel.996
7.355  New Zealand submits that the USITC divided the request category CCFRS into three
categories, namely CCFRS, GOES, and tin mill products.  By doing this, it effectively also divided
                                                     
990 United States' second written submission, para. 28.
991 United States' written reply to the European Communities' question No. 2 at the first substantive
meeting, para. 5.
992 European Communities' second oral statement "Scope and Standard of Review" on behalf of the
complainants, para. 18.
993 Korea's second written submission, para. 64; Norway makes a similar argument with regard to the
identification of domestic producers of the "like product" in Norway's second written submission, paras. 70-71.
994 European Communities' first written submission, para. 236; China's first written submission,
para. 182.
995 Japan's first written submission, para. 124; Brazil's first written submission, para. 112.
996 United States' first written submission, para. 142.WT/DS248/R, WT/DS249/R,
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the imported "product" into three separate product categories.  It did this on the basis that there were
separate domestic industries producing these products.997  In aggregating a range of different products
into the category of CCFRS, even though the re quisite degree of likeness between these products and
the imported products could not be demonstrated, the United States incorrectly defined the "domestic
industry that produces like … products".  The "bundling" approach employed by the USITC in this
case made it impossible to apply the crucial "like product" requirement, which is essential to the
identification of the relevant domestic industry, in the way intended by the Agreement on
Safeguards.998  In effect, the United States determines "like product" by reference to the "domestic
industry", rather than determining the "domestic industry" by reference to its production of a "likeproduct".  It accepted as an imported "product" a range of different and distinguishable CCFRS and
then defined its "domestic industry" by reference to the producers of that broad range of distinct
products, notwithstanding the fact that the products within that range were not like each other.  The
result was that each of the products included within the domestic product category were equally not
like all of the products within the imported product category.
999
7.356  New Zealand further argues that, while the category of domestically produced CCFRS may
be the same as the category of imported CCFRS, each of the products within that category is very
different.  CCFRS is not a single identifiable product – it is a product category comprised of four
distinct finished products, finished flat steel plate, hot-rolled steel, cold-rolled steel, and coated steel,
together with the semi-finished product slab.  Instead of focussing on the differences or similaritiesamongst these products, the USITC focussed on commonalties within the  industry producing the
range of CCFRS products.  In effect, the USITC did exactly what the Appellate Body in US – Lamb
said should not be done – it focussed on the pr oducers rather than the product.  Although the
jurisprudence indicates that the concept of "like product" in the Agreement on Safeguards is to be
construed narrowly, the USITC argues that the appropriate policy is to provide the widest possibleblanket of protection to the relevant industry.
1000 1001  New Zealand adds that in this case, imports of
slab, a semi-finished input product, were apportioned part of the blame for alleged serious injury to
producers of a highly finished end-product, coated steel.  This result is particularly perverse since the
only increase in slab imports during the period of investigation was from 1998-19991002 which
coincided with a period of coated steel profits.1003  This illustrates the point that there can be no causal
relationship between increased imports of one product and serious injury to an industry that produces
products that are unlike the  imported products, but this is entirely concealed by the bundling
approach.  The USITC does not demonstrate what wo uld be the only relevant point, that is, whether
increased imports of slab caused serious injury to the domestic producers of the like product – slab –
because this, too, is concealed by the bundling approach.1004
7.357  In the view of the United States, the USITC found that domestic CCFRS is like the
corresponding imported CCFRS that is subject to this investigation and defined CCFRS as a single
like product.  The Agreement on Safeguards includes no definition of "like product" nor addresses
what factors to consider in determining whether to define separate like products and corresponding
domestic industries.  The USITC's methodology and de finition of CCFRS as a single like product was
adequate, reasoned and reasonable explanations were provided.  The USITC started this analysis with
                                                     
997 New Zealand's second written submission, para. 3.30.
998 New Zealand's second written submission, para. 3.21.
999 New Zealand's first written submission, paras. 4.49-4.50.
1000 USITC Report, Vol. I, p 30.
1001 New Zealand's first written submission, paras. 4.53, 4.54 and 4.58.
1002 New Zealand first written submission, para 4.92, Figures 12 and 13.
1003 USITC Report, Vol. I, p 53.
1004 New Zealand's second written submission, para. 3.23.WT/DS248/R, WT/DS249/R,
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the range of steel broadly categorized as certain ca rbon and alloy flat products, all of which had been
identified as imports subject to this investigation in the President's request (as well as the SenateCommittee on Finance's request).  After examining the evidence and conducting its analysis regarding
the corresponding domestic CCFRS products, the US ITC found clear dividing lines so as to define
three separate like products from this category.
1005  In comparing the domestic steel to the imported
steel, the evidence indicated that imported CCFRS c onsists mainly of the same range of carbon steel
as the domestic CCFRS.1006 1007
7.358  Japan insists that no one in the world, whether now or 1993, thinks of CCFRS as a single
product.  The various CCFRS products do not comprise one authentic market.  They are each distinctin their physical properties, use, customer perceptions, general tariff classifications, and even
production processes.  Japan submits that even the United States industry breaks down its marketing
and pricing materials in the manner that Japan proposes.  Plate is sold and marketed separately from
hot-rolled, which is distinct from cold rolled, which is distinct yet again from corrosion resistant
steel.
1008
7.359  The United States insists that the USITC applied its traditional factors in determining that
there was no clear dividing line between types of CC FRS and defined such steel to constitute a single
like product.  The USITC found that CCFRS at various stages of processing shared certain basic
physical properties, were interrelated, had common end-uses, were generally distributed through the
same marketing channels, and were essentially made by the same production processes (at least at theinitial stages).  The USITC also recognized that there were some differences in physical properties
and end-uses.
1009  Since CCFRS in an earlier processed form is the feedstock for further processed
CCFRS, all such steel is produced using the same production processes at the initial stages, with
downstream steel merely employing additional stages  of processing.  All CCFRS is produced from
slab, with the majority of such steel further processed into hot-rolled steel on hot strip or Steckelmills.  Substantial quantities of earlier processed steel are internally transferred for production of
further processed steel.  The USITC found that this tends to blur product distinctions until the
processing reaches its final stages since earlier stages of steel comprise feedstock for the next
stage.
1010  As part of its consideration of the manufacturing process ( i.e., where and how it is made),
the USITC also recognized that there is substantial commonality in production facilities and vertical
integration in the industry.  The USITC recognized that the interrelationship between the production
processes and integration of the producers demonstrates that the market for each type of CCFRS is notisolated, but directly affected by the markets across the spectrum of all CCFRS.
1011
                                                     
1005 Four Commissioners found clear dividing lines so as to define three separate like products from this
category and two Commissioners determined that this category was a single like product.  CommissionersOkun, Hillman, Miller, and Koplan defined the following three separate like products:  1) certain carbon flat-
rolled steel ("CCFRS"); 2) grain-oriented electrical steel ("GOES"); and 3) tin mill products.  Commissioners
Bragg and Devaney defined a single like product, carbon and alloy flat products (including slab, hot-rolled sheetand strip, cut-to-length plate, cold-rolled sheet and strip,  corrosion resistant, grain oriented electrical steel, and
tin mill products).
1006 USITC Report, pp. 36-37.
1007 United States' first written submission, paras. 116-118.
1008 Japan's second written submission, para. 36.
1009 United States' second written submission, paras. 77-78.
1010 USITC Report, pp. 38-39.
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(ii) Like product criteria
General
7.360  China argues that, contrary to the WTO standard for likeness and its own stated methodology,
the USITC did not establish the "likeness" of the fi ve distinct downstream products (slabs, plate, hot-
rolled steel, cold-rolled steel and coated steel) on the basis of their physical characteristics, end-uses,
consumer-tastes and habits and tariff classification.  The USITC essentially relied on commonalties in
the chain of production and the end-users of all five types of flat steel – the two criteria that had
already been ruled out by the Appellate Body.1012
7.361  Similarly, Japan argues that the USITC's determination to conjoin the five products into a
single "CCFRS" like product is inconsistent with Articles 2.1 and 4.1(c) of the Agreement on
Safeguards and Article XIX:1 of GATT 1994.  Ther e are wide differences between subject imports
and domestic products in terms of the factors identified by the Appellate Body for a determination on
"like products":  the products' physical properties, end-uses, consumer perceptions, and tariff
classifications.  It is evident from the USITC's own findings that semi-finished slab produced bydomestic producers is not a like product of any of the imported corrosion-resistant steel, cold-rolled,
hot-rolled, or plate products, because of the stark differences in terms of product properties and end-
uses.  Domestic corrosion-resistant steel products are not "like products" of any imported semi-
finished slab, plate, hot-rolled, or cold-rolled products.  Domestic cold-rolled products are not like
products of any flat-rolled steel products except for cold-rolled products.  The same is true for plateand hot-rolled.  In a nutshell, imports and domestic products falling within the same category – semi-
finished slab, plate, hot-rolled, cold-rolled, or corrosion-resistant steel products – might be "like
products" of each other, but imports and domestic products that fall within different categories are
definitely not "like" one another.
1013
7.362  Brazil argues that in expanding its like product consideration to "both the productive facilities
and processes and the markets for these products"1014, the USITC determined that semi-finished slab
and other major finished flat-rolled carbon and alloy steel products – plate, hot-rolled, cold-rolled, and
corrosion-resistant steel sheet – constitute a single like product.  Where the USITC had found in
previous cases that each of these products was a distinct like product, these same products were now
somehow one like product.1015  In fact, application of the USITC's own traditional like product factors
– including most of those identified by the Appellate Body as appropriate to separate products from
one another – to the information contained in its own report compels the conclusion that the variousproducts within the CCFRS category are distinct from one another.  The USITC's report admits,
without thoughtful analysis, many distinctions, and the foreign producers in the case produced even
more information that leads to the same conclusion.
1016
7.363  The United States asserts that many of the specific allegations raised by the complainants
regarding the USITC's CCFRS like product definition are based on their erroneous interpretation ofwhat factors the USITC was either "required or not permitted" to consider in making its like product
definitions.  The complainants can identify nothing in the Agreement on Safeguards addressing what
                                                     
1012 China's first written submission, para. 181.
1013 Japan's first written submission, para. 117.
1014 USITC Report Vol. I at 30-31 (Exhibit CC-6).
1015 Brazil's first written submission, paras. 99 and 115.
1016 Joint Respondents' Prehearing Framework Brief (11 September 2001) (filed by the Law Firm of
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factors may or may not be considered in determining like products.  They instead assert that the
USITC was bound to use the four factors suggested by the Working Party on Border Tax Adjustments.
These factors, which were suggested for use in border tax adjustments, were for a different purpose,
and the Appellate Body has recognized that "[n]o one approach to exercising judgement will be
appropriate for all cases".1017  Thus, the USITC was not required to consider the four factors derived
from the Working Party that are urged by the complainants.1018  The United States notes that the
USITC's like product factors in a safeguards investigation include the three criteria on which all the
parties agree (physical properties, uses, and customs treatment), and also focus on such other
objective factors as the product's marketing channels and manufacturing process.1019
7.364  New Zealand and Brazil note that three of the six factors relied upon by the USITC to support
the grouping of CCFRS related to the issue of vertical integration and commonality of facilities linked
to vertical integration.  These are, in fact, the same factors as the continuous line of production and
coincidence of economic interests at issue in US – Lamb.   Japan concurs in this argument.  The
Appellate Body could not have stated more clearly th at the fact that one product is an input to another
product, even if there is no other use for the input pr oduct, is simply not relevant to the determination
of whether products are like each other.  Similarly, the Appellate Body was clear in its statement that
a coincidence of economic interests between the producers of upstream and downstream products is
also not relevant to the determination of whether products are like each other.  That is, vertical
integration and commonality of facilities are not relevant to the like product determination.1020
According to Brazil, the discussion of physical properties relates to the physical properties resulting
from a stage prior to slab, steelmaking, and not to physical properties imparted as a result of
production of the downstream products.  Finally, end-use applications are very broadly defined,
although there is an admission that the various products are not generally substitutable between the
various products within CCFRS.  There is, of course, no mention of the fact that slab is not sold at all
to the automotive or construction industries (or, indeed, any industry other than steel) and a variety of
other factors traditional to the United States' analysis (e.g ., channels of distribution/marketing
channels) are not addressed at all.1021
7.365  The United States responds that as part of its consideration of the manufacturing process in
this particular case (i.e., how and where it is made), the USITC recognized that the interrelatedness of
CCFRS at different stages of processing resulted in substantial captive consumption, with a
concomitant commonality of production facilities and vertical integration in the industry.  Thisinterrelationship between the production processes and integration of the producers demonstrated that
distinctions in markets for each type of CCFRS were blurred, all types of CCFRS were directly
affected by the markets for the whole spectrum of CCFRS, given that each type of CCFRS constituted
the feedstock for the next processed stage of steel within the overall category.  Considering the
manufacturing processes of steel at various stages of processing, particularly the fact that they arefeedstocks, is a "product-oriented" and not "p roducer-oriented" analysis, as alleged by the
complainants.
1022  The complainants' arguments fail to recognize that within almost every defined like
product, and the corresponding imported product, there exist a range of goods of different sizes,
                                                     
1017 Appellate Body Report, EC – Asbestos , para. 101.
1018 United States' first written submission, para. 124.
1019 United States' second written submission, para. 65.
1020 New Zealand's second written submission, paras. 3.42-3.43; Brazil's second written submission,
paras. 29-30; Japan's first written submission, paras. 121-122.
1021 Brazil's second written submission, para. 16.
1022 United States' second written submission, para. 70.WT/DS248/R, WT/DS249/R,
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grades, or stages of processing.  While goods along the continuum share similar or like factors,
individual items at the end of the continuum may not be as similar.1023
7.366  Korea submits that the United States' analysis was inadequate as demonstrated by the
following table:1024
Physical Properties * Customs Treatment * Manufacturing Process * Uses* Marketing Channels *
Slabs Semi-finished form, usually 4 in. 
Slab has a rectangular cross-
section with width at least two times the thickness. Low fracture toughness and high porosity.Three distinct HTS headings:         
7207.12, 7207.20 and 7224.90Molten steel cast by continuous 
casting.  No rolling takes place.All further processed into hot-rolled 
steel or plate.  No independent use. 99.6% to end-users, 0.4% sold to 
distributors
Plate It is made from slab, and it is 
thicker and stronger than the other 
flat products.  It typically ranges 
between 3/16" to more than 1 foot in thickness. Thick gauge and superior strength.   Ten distinct HTS headings:          
7208.40 , 7208.51, 7208.52, 
7208.90,  7210.90 , 7211.13, 
7211.14 , 7225.40, 7225.50 , 
7226.91Hot-rolled on Steckel mill or 
reversing mill.Designed for heavy industry uses, 
such as bridgework, machine parts 
(body or frame), transmission 
towers and light poles, buildings, self-propelled machinery such as cranes and bulldozers, railway cars, tanks, oceangoing ships and floor 
plate or formed into pipe, oilwell rigs 
and platforms.45.2% to end-users and 54.8% to 
distributors
Hot-Rolled >2mm in thickness. The least 
refined steel sheet product.  Thinner and weaker than plate, but 
heavier and less smooth than cold-
rolled.  Lower quality than both cold
-
rolled and coated.Sixteen distinct HTS headings:         
7208.10, 7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 
7208.38, 7208.39, 7208.40 , 
7208.53, 7208.54, 7211.14 , 
7211.19, 7225.30, 7225.40, and 7226.91Hot-rolled in hot-strip mill or Steckel 
mil l. For cold-rolling/galvanizing /coatin g; 
Formed and welded to make pipe; Cut to length for sheet; HR sheet is 
sold for uses where surface finish 
and light weight are not crucial, such as structural and internal parts of autos and appliances. 60% to end users, 40% to 
distributors
Cold-Rolled 25-90 % reduction in thickness of 
hot-rolled  to under 2mm ; Special 
mechanical properties or surface 
texture. Thin-gauge, smooth 
surface and high strength to weight ratio, created by the cold-rolling process.Sixteen distinct HTS headings:         
7209.15, 7209.16, 7209.17, 
7209.18, 7209.25, 7209.26, 
7209.27, 7209.28, 7209.90, 
7211.23, 7211.29, 7211.90, 
7225.19, 7225.50 , 7226.19 and 
7226.92After being hot-rolled on strip mill 
and undergoing other processing 
similar to hot-rolled, it is finished on 
a cold-reduction mill.Feedstock for corrosion-resistant 
steel, tin mill, and GOES.  CR sheet 
sold for applications where surface 
finish and light weight are important 
consideration (panels in electrical equipment and appliances, utensils, cutting tools, cutlery, seat belt 
components).  Also sold for 
unexposed auto body parts such as automotive transmission components.71.3% to end users and 28.7% to 
distributors
Coated Has metallic or non-metallic 
coating; coated, clad or plated with metals and alloys for corrosion-
resistance and improved 
aesthetics.Nineteen distinct HTS headings:       
7210.20, 7210.30, 7210.41, 7210.49, 7210.61, 7210.69, 
7210.70, 7210.90 , 7212.20, 
7212.30, 7212.40, 7212.50, 7212.60, 7225.91, 7225.92, 7225.99, 7226.93, 7226.94 and 7226.99Electro-galvanizing or hot-dip 
galvanizing.  There are seven alternative processes fo applying 
coatings.Used mostly in applications 
requiring protection against the weather and other corroding agents 
(Auto parts such as mufflers and 
trunk lids, construction uses such 
as roofing and siding, garbage cans, storage tanks and building 
products, gasoline tanks, chemical 
containers, oil filters, television chassis, highway equipment and agricultural buildings and 
equipment.)64.3% to end-users and 35.7% to 
distributors
* Identified by the ITC as a distinguishing factor the it takes into account when determining what constitutes the "like product ."  ITC Determination, Views on Injury of the Commission, Vol. I, p. 30. ( Exhibit CC-6 )
Note : HTS classifications in bold font indicate the only 5 HTS classifications that are shared among the 55 distinct HTS classifica tions.
Sources:   ITC cites are all found in Exhibit CC-6 .
Slab: ITC at 39 and at FLAT-1 (physical characteristics),  at FLAT-1 (customs treatment), at 40 (manufacturing processes) at 40  and OVERVIEW-13  (end uses); and at 44 (marketing channels).
  Also, First Submission of Japan, at 41 (physical characteristics and end uses).Plate: ITC at 41 and at FLAT-1 (physical characteristics), at FLAT-1 (customs treatment), at 40-41(manufacturing processes), at  FLAT-I (end-uses) and at 44 (marketing c hannels).
 Also, First Submission of Japan at 40 (physical characteristics).
Hot-Rolled: ITC at 44 (physical characteristics), at FLAT-2 (customs treatment), at 40 (manufacturing processes) at 38 and FLAT -2 (end uses); and at 44 (marketing channels). 
 Also First Submission of Japan at 39 (physical characteristics and end uses), at 40 (manufacturing process) and Exhibit CC-55 (Exhibit 2) (physical characteristics and end uses).
Cold-Rolled: ITC at 41and 44 (physical characteristics), at FLAT-3 (customs treatment), at 41, OVERVIEW-13 and FLAT-2 (manufact uring process and end-uses), and at 44 (marketing channels).
Also, First Submission of Japan at 39 (phsycial characteristics and end uses) and Exhibit CC-55 (Exhibit 2) (end uses). Coated: ITC at 42 and FLAT-3 (physical characteristics and manufacturing process); at FLAT-3 (end uses); and at 44 (marketing c hannels).
 Also, First Submission of Japan at 37 (physical characteristics) and at 39 (physical characteristics and end uses) and Exhibit  CC -55 ( Exhibit 2) (m anufacturi ng pr oces s).Distinguishing Characteristics in Defining "Like Product"
Flat-Rolled Products
Physical properties
7.367  The European Communities and China submit that the USITC's finding that all five CCFRS
products share "certain basic physical properties and are interrelated to a certain degree"1025 is
                                                     
1023 United States' second written submission, para. 86.
1024 Korea's second written submission, para. 68.
1025 European Communities' second written submission, para. 275;  USITC Report, Vol. I, p. 37.WT/DS248/R, WT/DS249/R,
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untenable.  It is only based on the commonplace of "a common metallurgical base".1026  However, the
basic chemical combination of carbon and iron is not sufficient to demonstrate that these productsshare the same physical properties and may therefore be regarded as one specific product: indeed, the
very same chemical mix in metallurgy can also be found in other steel product categories that have
been classified as separate products (e.g., carbon and alloy long steel products or stainless steel).
1027
In order to establish common physical properties, the USITC would have needed, in accordance withits own stated methodology and the general definition of physical properties under WTO law
1028, to
look at size, shape and texture of the five flat products.  The USITC itself acknowledged significant
difference in "thickness" (slabs are 4 inches while cold-rolled steel is reduced to size to below 2 mm)and other qualities (corrosion resistance and surface texture).
1029 1030
7.368  New Zealand adds that a proper comparison of physical properties cannot stop at the
conclusion that CCFRS has a "common metallurgical base", a finding that the United States merely
notes rather than tries to defend.1031  The fact that ice cream and cheese share certain compositional
characteristics which mean they have more in common with each other than with a banana does notmean they are "like".  Nor are sawn pine logs, planks, fence posts and furniture all "like" because they
all started life as trees.
1032
7.369  The European Communities and China argue that the mere generalization that the five
CCFRS share certain chemical characteristics that are also common to other steel product categories
identified by the USITC was certainly not an adequate and reasoned explanation to dismiss thecontradicting information in its own Report.
1033
7.370  Japan and Brazil insist that the products each have different physical properties.  The USITC
found, for instance, that cold-rolled steel differs from hot-rolled steel in terms of thickness,
mechanical properties, and surface texture, while coated steel differs from cold-rolled steel in terms of
its coating of zinc or other materials.1034  Further, New Zealand also stresses that each of the discrete
products has very different properties in terms of their shape, thickness, degree of finishing and
physical performance1035, and that these physical differences are fundamental.  Clearly, slab is thicker
and less refined than hot-rolled steel.1036  According to the European Communities and China, the
USITC Report also explicitly concedes a lack of interchangeability between the five products where it
holds that the "vertical nature of the relationship between CCFRS at different stages limits
interchangeability between products".1037  In other words, these parties contend, the USITC admits
                                                     
1026 USITC Report, Vol. I, pp. 37 and 38.
1027 European Communities' first written submission, para. 237; China's first written submission,
para. 184.
1028 The USITC Report, Vol. I, p. 29 refers to "appearance, quality and texture". The Appellate Body in
EC – Asbestos , para. 92 considered "composition, size, shape, texture, and possibly taste and smell" as relevant
physical properties.
1029 USITC Report, Vol. I, pp. 38-42 with detailed descriptions.
1030 European Communities' first written submission, para. 238-239; China's first written submission,
para. 185-186.
1031 United States first written submission, para 119.
1032 New Zealand's second written submission, para. 3.46.
1033 European Communities' first written submission, para. 241; China's first written submission,
para. 193.
1034 Japan's first written submission, para. 117; Brazil's first written submission, para. 106.
1035 The USITC highlights some such differences in "Appendix A" at pp. 9-10 of the USITC Report,
Vol I.
1036 New Zealand's first written submission, para. 4.59-4.60.
1037 USITC Report, Vol. I, p.  44.WT/DS248/R, WT/DS249/R,
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that part of the producers it wanted to group in a single domestic industry did not produce products
interchangeable with the imported ones.1038  China submits that through the process of coating, cold-
rolled steel becomes a different product that cannot meet the definition of a "like product". Indeed, the
coating process is likely to alter the physical "properties"  of the raw product (cold-rolled steel),
through the addition of a new substance (metal or non-metallic substance). The new "properties" of
the product are, in particular, illustrated by th e fact that the coated product becomes corrosion-
resistant.1039
7.371  In the United States' view, the USITC found that imported and domestic CCFRS share the
same basic physical attributes and are generally interchangeable, have similar uses with the samemetallurgic composition, thickness, width, and amount of processing, generally do not employ
significantly different production processes, and have an overlap in the marketing channels for
domestic and imported CCFRS.  The USITC found that the domestic article, CCFRS, is like the
imported CCFRS.  The USITC then applied its long established factors
1040 in considering whether to
analyse specific types of CCFRS separately or as a whole.1041  The USITC found that CCFRS at
different stages of processing share certain basic physical properties and are interrelated to a certain
degree.1042  Specifically, the USITC found that this steel has a common metallurgical base, with
desired properties and essential characteristics embodied in the steel prior to the casting or
semifinished stage.1043  The mix in metallurgy depends on the requirements of the end-use, whether
the end-use is at the same or different stages of processing.  Thus, the chemical content of such steelessentially is determined at the melt stage of processing with some reductions in carbon content
possible through subsequent hydrogen annealing.
1044
7.372  The United States stresses that it is clear from the USITC's determination that it did not ignore
evidence of differences in physical properties and end-uses and in fact generally acknowledged such
evidence in its analysis.  Rather, it is the complainants who ignore the evidence of theinterrelationship of CCFRS at different stages of processing.  The complainants fail to acknowledge,
although they do not dispute, the fact that CCFRS at one stage of processing generally is feedstock for
the next stage of processing, which tends to blur product distinctions until the processing reaches its
final stages since earlier stages simply are feedstock for the next stage.  This interrelationship between
                                                     
1038 European Communities' first written submission, para. 240; China's first written submission,
para. 187.
1039 China's first written submission, para. 192.
1040 The USITC traditionally has taken into account such factors as the physical properties of the
product, its customs treatment, its manufacturing process ( i.e., where and how it is made), its uses, and the
marketing channels through which the product is sold in determining what constitutes the like product in asafeguards investigation.  These are not statutory criteria and do not limit what factors the USITC may considerin making its determination.  Appellate Body Report, EC – Asbestos , para. 102 (general criteria "are neither a
treaty-mandated nor a closed list of criteria that will determine the legal characterization of products.").  No
single factor is dispositive and the weight given to each individual factor (and other relevant factors) will dependupon the facts in the particular case.  The decision rega rding the like or directly competitive article is a factual
determination.  The USITC traditionally has looked for clear dividing lines among possible products and hasdisregarded minor variations.  USITC Report, p. 30.
1041 USITC Report, pp. 36-45.
1042 USITC Report, pp. 37-38.
1043 The USITC found that all certain carbon flat-rolle d steel originally is made of raw materials that
include carbon and iron.
1044 United States' second written submission, paras. 78-79.WT/DS248/R, WT/DS249/R,
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CCFRS at different stages is "product-oriented" rather than "producer-oriented" and clearly was an
important factor in the USITC's analysis and finding.1045 1046
7.373  The European Communities submits that the United States nowhere rebuts the European
Communities' argument concerning the different length, width and other qualities of the five different
CCFRS products1047, but merely insists on the "same common metallurgical base".  This analysis fails
to take account of the significant physical differences between the five CCFRS products1048 and is also
inconsistent with the investigation of the same criteria with respect to stainless steel products, where
the USITC found that the sole metallurgical composition was not a sufficient element to define one
single industry producing stainless steel products.1049 1050
End-use
7.374  Brazil submits that by making gross generalizations, the USITC found that "the primary end-
use applications for commercial shipments of CCFRS are the automotive and construction
industries".1051 1052  Japan and Brazil submit that, in fact, the products differ in terms of end-uses.  For
example, the USITC found that while hot-rolled steel and coated steel are both used in automotiveapplications, they are almost always used for different applications.
1053  The overlap at issue is not of a
type that may amount to the "likeness" of products under the Agreement on Safeguards.  For example,
the USITC found that hot-rolled and corrosion-resistant steel products are subject to similar demand
trends in the automotive industry, but that they are not used for the same end-use.  This finding
indicates that the products are not substitutable with each other, but at most complementary.  Theytherefore might not even be directly competitive, much less "like" one another.
1054
7.375  According to the European Communities, the USITC did not show that the five products have
common end-uses.  Its finding that "all types are used in the production of automobiles, albeit in
different applications" and "for end-use applications  in the construction industry" admits that the end-
uses, i.e., application of each product, are very different.  Some (e.g. coated cold rolled) is used formaking certain car parts.  Other products (e.g. slab) are used purely as an input good in the production
of downstream steel products.
7.376  The European Communities, Korea, China and New Zealand submit that, instead of showing
common end-uses (e.g., body parts for automobiles), the USITC Report relies on common ultimate
end-users of the various products in question (e.g., the automotive industry).  This is not one of the
criteria acknowledged by the Appellate Body to establish likeness.  Moreover, a focus on end-users
leads to some nonsensical results as any range of diverse input goods used by particular industries
could be grafted into a single product category.  Under the USITC's approach, also automotive leather
and windscreen would also be like products to CC FRS and should have been analysed together.
1055
                                                     
1045 Appellate Body Report, US – Cotton Yarn , para. 86.
1046 United States' first written submission, para. 127.
1047 European Communities' second written submission, para. 275.
1048 European Communities' first written submission, paras. 238 to 239.
1049 USITC Report, Vol. I, pp. 190-205.
1050 European Communities' second written submission, para. 275.
1051 USITC Report, p. 43.
1052 Japan's first written submission, paras. 119-120; Brazil's first written submission, paras. 100, 102
104, 105, 109.
1053 Japan's first written submission, para. 117; Brazil's first written submission, para. 106.
1054 Japan's first written submission, para. 120; Brazil's first written submission, para. 104.
1055 European Communities' first written submission, para. 243; Korea first written submission,
para. 54; China's first written submission, paras. 194-195; New Zealand's first written submission, para. 4.61.WT/DS248/R, WT/DS249/R,
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The European Communities also argues that the US ITC does not consistently apply its criterion of
common end-users:  had it done so, also certain tubular products that are used in the automotiveindustry (precision tubes to conduct forces) should have formed part of the CCFRS product category
or vice versa , because they share common end-users.
1056
7.377  Korea further submits that the USITC record info rmation confirms that the correct analysis –
"end-use" – demonstrates that each of the five CC FRS products had different uses, and thus, is a
separate like product.1057  Slab is internally consumed for downstream products, such as sheet, strip,
and plate;  plate is used for bridgework, machine parts (e.g., the body of the machine or its frame),
transmission towers and light poles, buildings, self-propelled machinery such as cranes andbulldozers, railway cars, oceangoing ships, and floor plate or formed into pipe and oilwell rigs and
platforms;  hot-rolled steel is internally consumed  to make cold-rolled and/or galvanized or other
coated products, formed and welded to make pipe, or cut to length to produce discrete sheet, it is also
used in the manufacture of structural parts of automobiles and appliances;  cold-rolled steel is
internally consumed to produce coated or tin products, and it is also used to make panels in electricalequipment and appliances, body parts for automobiles, where surface finish or strength-to-weight
ratio is important but corrosion-resistance is not, auto transmission and seat belt components, utensils,
cutting tools, cutlery.  Coated steel is used for corrosion-resistant auto parts, garbage cans, storage
tanks, building products, gas tanks, chemical containers, oil filters, television chassis, highway
equipment, agricultural buildings, and equipment (guardrails, bridgedeck, signs).
1058
7.378  The United States submits that the USITC recognized that the interrelationship between the
production processes and integration of the producers demonstrates that the market for each type of
CCFRS is not isolated, but directly affected by the markets across the spectrum of types of CCFRS.
The primary end-use applications for commercial shipments of CCFRS are the automotive and
construction industries.  Thus, the USITC found that all types of CCFRS are substantially affected bythe collective demand of these two markets.
1059  The USITC also found that the primary end-use
applications for commercial shipments of CCFRS are the automotive and construction industries.1060
The USITC found that all types of CCFRS are substantially affected by the collective demand of thesetwo markets.
1061  The USITC also recognized that the vertical nature of the relationship between
CCFRS at different stages may result in differences in uses between stages of CCFRS.1062
Nevertheless, the USITC found that the evidence demonstrated that in some situations, there may besome substitution for use between products from one stage to another, e.g., coated steel can beadapted for use in applications that typically use cold-rolled steel and vice versa, and hot-rolled has
                                                     
1056 European Communities' first written submission, para. 243.
1057 USITC Report, Vol. II , pp. FLAT-51-53 (Exhibit CC-6).  See also Respondents' Joint Framework
Brief , p. 22 (Exhibit CC-50).
1058 Korea's first written submission, paras. 54, 57; source:  Joint Respondents' Posthearing Brief,  Flat-
Rolled Steel, Inv. No. TA-201-73, Exhibit 2:  "Application of Like Product Factors to Flat-Rolled Products",
pp. 11-12 (Exhibit CC-55); see also USITC Report, Vol. II, pp. FLAT1-4 (Exhibit CC-6).
1059 United States' first written submission, para. 122.
1060 United States' first written submission, para. 122; USITC Report, pp. 43-44.
1061 The USITC recognized that while hot-rolled steel ma y not be used in place of, or substituted for, a
coated sheet in a car fender, all certain carbon flat-r olled steel is directly affected by the demand for
automobiles, since all types are used in the production of automobiles, albeit in different applications.  The
USITC also found that similarly, but to a lesser extent, all types of such steel are used for end-use applications
in the construction industries.  Thus, all types of certain carbon flat-rolled steel are substantially affected by the
collective demand of these two markets.  USITC Report, pp. 43-44.
1062 USITC Report, p. 44.WT/DS248/R, WT/DS249/R,
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some limited interchangeability with cold-rolled steel.1063 1064  The United States also submitted that
the complainants fail to recognize that within almost every defined like product, and thecorresponding imported product, there exist a range of good of different sizes, grades, or stages of
processing.  While goods along the continuum share sim ilar or like factors, individual items at the end
of the continuum may not be as similar.
1065
7.379  Further, in the view of the United States, and contrary to the complainants' contentions, the
USITC was not required to consider whether each type of CCFRS was substitutable with each
other.1066  The complainants fail to recognize that the substitutability or competitive relationship was
found to be relevant in the context of Article III of GATT 1994, as discussed by the Appellate Bodyin EC – Asbestos .
1067  Protecting the competitive relationship between imports and domestic products
is a purpose of Article III.  However, it is not the purpose of the Agreement on Safeguards, whose
purpose is to permit protection of a domestic industry under circumstances.1068  Thus, the competitive
relationship or substitutability of domestic and imported products is not a necessary factor regarding
the like product definition in the context of the purpose of the Agreement on Safeguards.1069  I n
considering uses for the types of CCFRS, the USITC recognized that similarity or interchangeability
in uses were limited for CCFRS, as would be expected for feedstock or input products.1070  The
complainants' attempts to construe this recognition regarding uses of feedstock as consideration of a
substitutability factor by the USITC is misplaced.1071
7.380  China responds by reaffirming that, in accord ance with the Appellate Body ruling in US –
Lamb , this fact is not relevant for the assessment of likeness.  Moreover, China considers that this
element rather underlines the fact that the different products included in the category CCFRS cannot
share common end-uses.1072  The United States only acknowledges that there are no common end-uses
for the various CCFRS products, by referring to markets and industries in general as end-uses
applications.  In particular, the fact that all types of CCFRS could be substantially affected by thecollective demand of the automotive and construction industries does not demonstrate in any way that
                                                     
1063 USITC Report, p. 44.  Specifically, several US companies produce hot-rolled sheet in thicknesses
(i.e., light-weight gauges) that have been more typically characteristic of and competitive with cold-rolled sheet.
Although the overlap between hot-rolled steel and cold-rolled steel has traditionally been considered to begin at
approximately 2 mm and thinner, improvements in hot-rolling have allowed mills to hot-roll below 2 mm.  In
addition, while cold-rolled steel generally is used as th e feedstock for coated steel, coated hot-rolled sheet is a
growing product niche.  USITC Pub. 3446, p. I-8,  and nn.18 and 19.
1064 United States' second written submission, paras. 83-84.
1065 United States' second written submission, paras. 72 and 86.
1066 Japan's first written submission, paras. 79 and 101; Korea's first written submission, paras. 38-39
and 58-59;  European Communities' first written submission, para. 240.
1067 Specifically, the Appellate Body in EC – Asbestos , para. 99, stated:
. . . a determination of "likeness" under Article III:4 is, fundamentally, a determination about the nature
and extent of a competitive relationship between and among products.  In saying this, we are mindful that there
is a spectrum of degrees of "competitiveness" or "substitutability" of products in the marketplace. . . .
1068 Appellate Body Report, US – Line Pipe , para. 82.
1069 Moreover, in this investigation the USITC made its definition on the basis of like product analyses
and not on the basis of directly competitive analyses.  Thus, while the consideration of substitutability may berelevant to the directly competitive analysis, it is not germane to, and should not be transposed to, the like
product analysis.
1070  USITC Report, p. 44.
1071 United States' first written submission, para. 136.
1072 China's second written submission, para. 77.WT/DS248/R, WT/DS249/R,
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all types of CCFRS can be used for the same purposes and applications in these industries. Once
again, the market on which a product is finally sold cannot be considered as its "end-use".1073
7.381  Korea and China also submit that substitutability is relevant in the assessment of "likeness"
since like products are necessarily also directly competitive and, therefore, substitutable.  Contrary to
what the United States asserts, substitutability is a necessary factor regarding the like product
definition in the context of the purpose of the Agreement on Safeguards, since, if imported and
domestic products were not substitutable, they could in no way be considered as being "like".1074
7.382  The United States responded that there clearl y is a competitive relationship between the
imported and domestic products.  The complainants have not disputed, and neither did the parties inthe underlying investigation, that the imported and domestic products generally consist of the same
types of steel, are interchangeable, and thus compete with each other.
1075
7.383  The European Communities submits that the United States fails to respond to the
complainants' argument that there is no similar end-use.  The United States' rebuttal on this point only
repeats the error of equating end-uses and end-us ers but does not respond to any of the arguments
attacking the validity of the substantial coincidence of economic interests argument.  What is more,
the United States exclusively focused on the "commercial market".1076  However, the European
Communities submits that the USITC itself admits that the main end-use for up-stream products is to
be a feedstock for down-stream products, out of the commercial market.  How could the USITC
conclude that coated products sold to the automotive industry have the same end-use as slabs, ofwhich 99.4% of the United States' production is internally transferred?  Second, the automotive and
construction industry identified as the main end-user for CCFRS account respectively for only 20 and
11% of the US shipments.
1077
7.384  Japan submits that the United States' argument that these products have common end-uses is
not credible.  They may be sold to the same industries, but to suggest that steel products havecommon applications because they are used in a specific industry is to suggest that steel, plastic, and
glass should be a single like product because they are all sold to the automotive industry.  End use is
not the same as end-user.  The fact is, no one woul d ever use slab to make a car; nor would hot-rolled
steel be used for the same car-part as corrosion resistant steel.  They are simply different products,
used for different purposes.  Furthermore, they each have a base price, reflected in the companies'
price sheets and in the trade literature.  There is  no such thing as a price for "CCFRS" (as the USITC
defined it).  This proves not only that the industry and customers recognize the distinctions, but alsothat any analysis of this grouping performed by the USITC is meaningless because there is no
"CCFRS" price that can be used to determine price effects in a causation analysis; rather each
individual product must be analysed and then  somehow combined with the other individual
products.
1078  Such an analysis distorts the true competitive dynamics in the marketplace.1079  The
finding that most finished CCFRS products are sold into the automotive and construction markets is
                                                     
1073 China's second written submission, para. 78.
1074 China's second written submission, para. 80; Korea's second written submission, paras. 39-40, with
reference to the Appellate Body Report, US – Cotton Yarn , paras. 91(d), 97.
1075 United States' second written submission, para. 72.
1076 United States' first written submission, para. 122.
1077 USITC Report, Vol. I,  p. 43, footnote 127.
1078 USITC Report,  Vol. I, pp. 61-62.
1079 Japan's second written submission, para. 37.WT/DS248/R, WT/DS249/R,
WT/DS251/R, WT/DS252/R,
WT/DS253/R, WT/DS254/R,
WT/DS258/R, WT/DS259/R
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analogous to its earlier finding of a "coincidence of economic interests" between producers of live
lambs and lamb meat.1080
Consumer perception
7.385  According to China and the European Communities, if "consumers" are deemed to be the auto
manufacturers and construction sites that use finished products, then the five different products
grouped into the category "CCFRS" cannot be seen as substitutable.  As the USITC acknowledged
itself, "hot-rolled steel may not be substituted for a coated sheet in a car fender"1081 and neither may a
slab be substituted for a coated sheet in a car-fender.1082
7.386  Brazil, Japan and New Zealand argue that if the USITC had considered the factor identified as
important by the Appellate Body, consumer tastes and habits1083, it would have found additional
distinguishing characteristics, such as:  slab purchases are restricted to producers of downstream
rolled products1084;  consumers regard hot-rolled steel as ideal for applications where strength is more
important than appearance – for example, in the use of automobile structural parts1085;  consumers
view cold-rolled steel as ideal for applications where appearance and thinness take precedence overstrength, and exposure to corrosive elements is not an issue
1086;  consumers view galvanized steel as
ideal in exposed applications, where corrosion-resistance is important.1087 1088  New Zealand adds that
the very fact that import trends differ amongst the products making up the category of CCFRS
indicates that consumer needs and preferences differ product by product.1089
7.387  The United States points out th at while the Working Party in Border Tax Adjustment
suggested that consumers' tastes and habits may be a criterion to be considered in finding like
products for purposes of border tax adjustments, contrary to complainants' arguments, this is not a
required factor in a safeguard investigation.  The Panel in Japan – Alcoholic Beverages  recognized
that consumer habits were variable in time and discounted consumer views in considering whether
vodka was "like" shochu and thus whether the like product should consist of vodka and shochu.1090
The consideration of consumer tastes and habits seems to conflict with the purpose of a safeguard
investigation.1091  Since the purpose of the Agreement on Safeguards is to permit protection of a
                                                     
1080 Japan's second written submission, para. 40.
1081 USITC Report, Vol. I, p. 43.
1082 European Communities' first written submission, para. 245; China's first written submission,
para. 197.
1083 In EC – Asbestos , the Appellate Body recognized the additional factor of "consumer tastes and
habits", as one of four general criteria in analysing the "likeness" of two products, the others being physical
characteristics, end uses, and tariff classification.  Appellate Body Report, EC – Asbestos , para. 101.
1084 USITC Report Vol. II at FLAT-1 (Exh. CC-6).
1085 Ibid., p. FLAT-2
1086 Ibid.
1087 Ibid., p. FLAT-3.
1088 Japan's first written submission, para. 118; New Zealand's first written submission, para. 4.64;
Brazil's first written submission, para. 107.
1089 New Zealand's first written submission, para. 4.65.
1090 Panel Report, Japan – Alcoholic Beverages I , para. 5.7 ("Panel was of the view that the 'likeness' of
products must be examined taking into account not only objective criteria (such as composition andmanufacturing processes of products) but also the more subjective consumers' viewpoint (such as consumptionand use by consumers) "but also  recognized that "consumer habits are variable in time" and "traditional
Japanese consumer habits with regard to shochu provided no reason for not considering vodka to be a 'like'
product").
1091  The Appellate Body cautioned in EC – Asbestos  that it may be important to consider " from whose
perspective  "likeness" should be judged.  For instance, ultimate consumers may have a view about the "likeness"WT/DS248/R, WT/DS249/R,
WT/DS251/R, WT/DS252/R,
WT/DS253/R, WT/DS254/R,
WT/DS258/R, WT/DS259/R
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domestic industry under certain circumstances1092, a focus on the subjective consumers' views of the
product or market rather than producers or both is one-sided and misplaced.  The USITC insteadfocused on such objective factors in its traditional analysis of like products such as the product's
physical properties, uses, marketing channels and manufacturing process.
1093
7.388  New Zealand responds that consumer perceptions must be a critical component in assessing
the "highest degree of competitive relationship" which the Appellate Body in US – Cotton Yarn has
stressed as crucially important.  It can and shou ld be supplemented by other factors, but how
purchasers behave in a market cannot be ignored.1094
Tariff classification
7.389  The European Communities, Japan, Korea, China and Brazil, submit that, while the USITC
impermissably discounted the customs treatment of the various products due to "the large number of
classification categories"1095 1096, this fact is no excuse for not considering them at all for the purpose
of the like product determination.  On the contrary, this suggests that the products concerned are not
alike.  Each CCFRS product is classified under a separate HS number, but the USITC expresslydiscounted this factor.
1097  I n  EC – Asbestos , the Appellate Body noted that "tariff classification
clearly reflects the physical properties of a product" and provided important indications for the like-
product determination which must be considered.1098  The fact that so many HS classifications have
been grouped into a single imported product and a single like product is just one more indication that
the USITC failed in its determination.  In fact, contrary to the assertion of the USITC, HSUSclassifications of CCFRS at the four-digit level (depending on the width and thickness of the product)
do provide a break-out of the various like products:  semi-finished (including slab), hot-rolled, cold-
rolled, corrosion-resistant, and plate.  Moreover, only five of the 55 distinct HSUS classifications at
the six-digit (international) level are shared between two CCFRS steel products.  The European
Communities adds that a closer look at the 55 classifications for what the USITC calls CCFRS revealsthat even the HSUS classifications distinguish at the four-digit level (depending on the width and
thickness of the product) between  "semi-finished products" including slabs, hot-rolled, cold-rolled,
corrosion resistant and plate.
1099  This is a high level of delineation and reflects fundamental product
distinctions recognized internationally for purposes of classifying imports.1100 1101
7.390  The United States noted that in this case the numerous tariff classifications did not provide
clear distinctions between products.  For instance, each of the 33 data collection categories
individually have from 2 to 65 tariff classifications.  The United States also noted that the facts did notprovide support for complainants' allegations that consideration of tariff classifications at the 4-digit
level would have provided clear product distinctions.  For example, at the 4-digit level, there are nine
                                                                                                                                                                    
of two products that is very different from that of the inventors or producers of those products."  Appellate Body
Report, EC – Asbestos , para. 92.
1092 Appellate Body Report, US – Line Pipe , para. 82; USITC Report, p. 9.
1093 United States' first written submission, para. 137.
1094 New Zealand's second written submission, para. 3.39.
1095 USITC Report, Vol. I, p. 37, footnote 71.
1096 Brazil's first written submission, para. 102; European Communities' first written submission,
para. 246.
1097 Japan's first written submission, para. 117; Brazil's first written submission, para. 106.
1098 Appellate Body Report, EC – Asbestos , paras. 102, 109 and 124.
1099 Presidential Proclamation Annex I, pp. 25 ff.
1100 "Chapter 72 Flat-Rolled HTS Descriptions at the Four and Six-Digit Level", (Exhibit CC-83).
1101 European Communities' first written submission, paras. 246-248; Korea first written submission,
paras. 51-52; China's first written submission, paras. 198-200.WT/DS248/R, WT/DS249/R,
WT/DS251/R, WT/DS252/R,
WT/DS253/R, WT/DS254/R,
WT/DS258/R, WT/DS259/R
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separate tariff classifications covering the like product defined by the USITC as CCFRS.  Of the nine
4-digit classifications, two classifications (7225 and 7226) apply to steel at four (hot-rolled steel, CTLplate, cold-rolled steel, and coated steel) of the five stages of processing defined as CCFRS; one
classification (7211) applies to three stages; two classifications (7208 and 7210) apply to two stages;
and four classifications (7207, 7209, 7212, and 7224) apply to one stage of CCFRS.  Thus, rather than
provide clear product category distinctions, tariff classifications at this level demonstrate an
interrelationship between the physical properties of steel at different stages of processing which led to
the USITC defining these types of steel collectively as CCFRS.
1102
7.391  Further, in New Zealand's view, the differences amongst the various uses to which the various
CCFRS products are put are further reflected in the differing tariff classifications attributed to each of
them.1103  The role of tariff classification in like product determinations has been well accepted in the
jurisprudence.  Tariff classifications reflect international consensus as to the degree of similarity and
difference between products.  Clearly, it is not open to a competent authority simply to ignore tariff
classification.1104 Several of the five CCFRS products do not even share the same classification to four
digits, let alone eight or ten.1105  This simply reinforces the lack of likeness between them.1106
7.392  The European Communities maintains that the HS clearly distinguished the different products
on the basis of the different stages of processing, as is demonstrated in the relevant paragraphs of
Chapter 72 of the HS in exhibits CC-105.  The United States is wrong in asserting that the distinction
between products, which are part of a different stage of the production process is not reflected at thefour digit level.  As can be discerned from the tariff heading 72.07-72.09 even at the four-digit level
there is a distinction between slabs (semi-finished) hot-rolled, cold-rolled and coated.
1107  T h e
differentiation is even clearer when considering the internationally agreed tariff classifications at the
six-digit level.1108 1109
7.393  According to Korea, the tariff numbers have aided the USITC's classification of "like" steel
products in past anti-dumping and countervailing duty investigations for over 20 years.  The USITC,
both in its determination and in its Staff Report , breaks the seven CCFRS products down into "like"
product categories traditionally used in the various anti-dumping and countervailing duty
investigations performed by the USITC:  slabs, plat e (cut-to-length and clad), hot-rolled, cold-rolled,
grain-oriented silicon steel, coated steel and tin mill products.1110 1111
                                                     
1102 United States' first written submission, paras. 86 and 89.
1103 New Zealand's first written submission, para. 4.66.
1104 United States' first written submission, paras. 86-87.
1105 USITC Report Vol I, pp. 9-10.
1106 New Zealand's second written submission, para. 3.48.
1107 For example, products under heading 72.07 which are referred to as semi-finished products of iron
or non-alloy steel (slabs) are clearly distinguished from products under 72.08, which are referred to as flat-rolled
products of iron or non-alloy steel, of a width of 600 mm or more, hot-rolled , not clad, plated or coated .
1108 At the six digit level products are further defined and separated from one another. For example,
take products that fall under paragraph 72.11, which at the four-digit level are described as "Flat-rolled productsof iron or non-alloy steel, of a width of less than 600 mm, not clad, plated or coated". At the six digit level, theseproducts are further defined on the basis of whether they are not further worked than hot-rolled (721113,721114, 721119) or whether they are not further worked than cold-rolled (cold-reduced) (721123, 721129,
721190).
1109 European Communities' second written submission, paras. 272-274.
1110 USITC Report, Vol. I : "Appendix A",  pp. 9-10 and Vol. II, pp. FLAT-1-4 (Exhibit CC-6).
1111 Korea's first written submission, para. 53.