It is now established in WTO case-law that, apart from certain limited situations, the existence of a Benefit arising from a financial contribution is based on the comparison between for example the terms of a loan and the market based commercial benchmark for an equivalent loan. It is implicit in this case-law that such a benchmark, when not inconsistent with the SCM, produces a uniquely determined outcome. In other words, the result of the comparison process does not depend on the ability of the investigative authorities or the panel to manipulate such a benchmark.
This is why I was surprised to read in the recent United States: Definitive Anti-dumping and Countervailing Duties on Some Products from China panel report the following passage which could open a Pandora's Box, by suggesting that the outcome of the market based commercial benchmark is not uniquely determinable.
Finally, while we have not found that the benchmark used by the USDOC was inconsistent with the provisions cited in China's claim, this certainly does not imply that this is the only possible, benchmark that could have been or could be used, and another benchmark may have led to a different outcome in the investigations.
The disturbing aspect of this passage comes from the fact that the panel did accept the USDOC benchmark as valid, but nonetheless suggested that another valid benchmark could not only exist but it may have led to a different outcome. This is tantamount to saying that two valid benchmarks could exist and provide a different outcome!
It seems that the panel considered that its job was only to evaluate the internal logic of the methodology employed by the USDOC and the soundness and appropriateness of the data relied upon by the USDOC in constructing the proxy benchmark. However, given the previous passage, the panel should have gone to the end of its logic by asking if this proxy was not arbitrarily chosen. In other words, the panel should have made sure that the resulting outcome of the comparison process was robust in the sense that another conceptually different reasonable commercial proxy (or average of reasonable proxies) would have produced nonetheless the same outcome.
Since China did not raise this topic in its appeal, the Appellate Body did not say a word about this disturbing passage and we do not even know if it noticed it. This is perhaps unfortunate.
