客服中心光盘更新产品与服务用户建议指定查询服务繁体版
密码
WTO争端解决案例
  • 墨西哥诉危地马拉普通水泥反倾销调查的纠纷
  • Guatemala — Anti-dumping investigation on imports of portland cement from Mexico (Brought by Mexico)
  • 文书
    Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico - Report of the Panel
    提纲
    (Synopsis)
      ……
      (此处省略若干字,欲需查看全文请成为法意会员或购买法意检索阅读卡
    相关条款
    (Articles)
  • ADP 1994 03.05
  • ADP 1994 03.07
  • ADP 1994 05.05
  • 机构
    (Bodies)
  • 争端解决机构 (Dispute Settlement Body)
  • Panel WTO : Guatemala - Anti-dumping Investigation regarding Portland Cement from Mexico
  • 涉案国家
    (Countries)
  • 加拿大 (Canada)
  • 萨尔瓦多 (El Salvador)
  • 危地马拉 (Guatemala)
  • 洪都拉斯 (Honduras)
  • 墨西哥 (Mexico)
  • 美国 (United States)
  • 涉案产品
    (Products)
  • 水泥(波特兰) (cement (Portland))
  • 主题词与国家
    (Subject_Country)
  • 反倾销税 (ANTI-DUMPING DUTIES) - 危地马拉 (Guatemala)
  • 反倾销调查 (ANTI-DUMPING INVESTIGATIONS) - 危地马拉 (Guatemala)
  • 机密性 (CONFIDENTIALITY) - 危地马拉 (Guatemala)
  • 争端解决 (DISPUTE SETTLEMENT) - 危地马拉 (Guatemala)
  • 争端解决 (DISPUTE SETTLEMENT) - 墨西哥 (Mexico)
  • 倾销 (DUMPING) - 危地马拉 (Guatemala)
  • 伤害 (INJURY) - 危地马拉 (Guatemala)
  • 专家组 (PANEL) - 危地马拉 (Guatemala)
  • 专家组 (PANEL) - 墨西哥 (Mexico)
  • 主题
    (Subjects)
  • 争端解决 (DISPUTE SETTLEMENT)
  • 反倾销调查 (ANTI-DUMPING INVESTIGATIONS)
  • 专家组 (PANEL)
  • 伤害 (INJURY)
  • 反倾销税 (ANTI-DUMPING DUTIES)
  • 机密性 (CONFIDENTIALITY)
  • 倾销 (DUMPING)
  • 文书类别
    (Types)
  • 专家组报告 (Panel report)
  • 全文

    WORLD TRADE

    ORGANIZATION

    WT/DS60/R

    19 June 1998

    (98-2418)

    Original: English

    GUATEMALA - ANTI-DUMPING

    INVESTIGATION REGARDING PORTLAND

    CEMENT FROM MEXICO

    REPORT OF THE PANEL

    The report of the Panel on Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 19 June 1998. pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There shall be no ex parte communications with the Panel or Appellate Body concerning matters under consideration by the Panel or Appellate Body.

    Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be considered for adoption by the DSB until after the completion of the appeal. Information on the current status of the Panel Report is available from the WTO Secretariat.

    TABLE OF CONTENTS

    Page

    I. INTRODUCTION 1

    II. FACTUAL ASPECTS 2

    III. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES 2

    IV. MAIN ARGUMENTS OF THE PARTIES 4

    A. Preliminary Objections 4

    1. Whether the final measure is before the Panel 4

    2. Whether the final stage of the investigation is before the Panel 9

    3. Whether the provisional measure is before the Panel 10

    4. Whether the initiation is before the Panel 17

    5. Whether certain claims were in the request for establishment

    and are before the Panel 23

    6. Whether certain claims were raised in the request for

    consultations and are before the Panel 30

    7. Whether certain new claims were raised during the course

    of Panel proceedings and are before the Panel 31

    B. Standard of Review 33

    C. Violations Alleged Regarding the First Stage of the Investigation 36

    1. Initiation 36

    2. Failure to notify 60

    3. Full text of written application 68

    D. Violations in Connection with the Provisional Measure 70

    1. Article 3.7 70

    2. Article 3.5 87

    E. Violations Subsequent to the Preliminary Determination 89

    1. Extension of period of investigation 89

    2. Non-governmental experts 92

    3. Scope of verification 96

    Page

    4. Technical accounting evidence 99

    5. Essential facts 102

    F. Violations in the Course of the Investigation 105

    1. Access to file 105

    2. Confidential information 108

    3. Time-frame 109

    G. Revocation of Anti-Dumping Duties 109

    V. ARGUMENTS PRESENTED BY THIRD PARTIES 114

    A. Canada 114

    B. El Salvador 114

    C. Honduras 115

    D. United States 117

    VI. INTERIM REVIEW 141

    VII. FINDINGS 143

    A. Introduction 143

    B. Preliminary Issues 144

    1. Whether this dispute is properly before the Panel 144

    2. Terms of reference 150

    C. Failure to Notify the Exporting Government in Accordance

    withArticle 5.5 151

    D. Alleged Violations in the Initiation of the Investigation 156

    1. Dumping 161

    2. Threat of material injury 164

    3. Causal link 167

    4. Conclusion 168

    VIII. RECOMMENDATION 168

    I. INTRODUCTION

    1.1 On 15 October 1996, Mexico requested consultations with Guatemala under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") and Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("ADP Agreement") regarding the anti-dumping investigation carried out by Guatemala concerning imports of portland cement from Cooperativa Manufacturera de Cemento Portland la Cruz Azul, SCL, of Mexico ("Cruz Azul") (WT/DS60/1). Mexico's request for consultations preceded Guatemala's final determination of dumping and consequent injury and the imposition of the definitive anti-dumping duty.

    1.2 Mexico and Guatemala held consultations on 9 January 1997, but failed to reach a mutually satisfactory solution.

    1.3 On 4 February 1997, pursuant to Article 17.4 of the ADP Agreement, Mexico requested the establishment of a panel to examine the consistency of Guatemala's anti-dumping investigation into imports of portland cement from Mexico with Guatemala's obligations under the World Trade Organization ("WTO"), in particular those contained in the ADP Agreement (WT/DS60/2).

    1.4 At the meeting of the Dispute Settlement Body ("DSB") on 25 February 1997, Guatemala stated that it could not join the consensus to establish a panel until certain domestic procedures concerning the investigation had been completed. The DSB agreed to revert to this matter at a later date.

    1.5 At its meeting on 20 March 1997, the DSB established a panel in accordance with Article 6 of the DSU with standard terms of reference. The terms of reference were:

    "To examine, in the light of the relevant provisions of the covered agreements cited by Mexico in document WT/DS60/2, the matter referred to the DSB by Mexico in that document and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements". (WT/DS60/3)

    1.6 Canada, El Salvador, Honduras and the United States reserved their rights to participate in the Panel proceedings as third parties.

    1.7 On 21 April 1997, Mexico requested the Director-General to determine the composition of the Panel, pursuant to Article 8.7 of the DSU. On 1 May 1997, the Director-General composed the following Panel:

    Chairman: Mr. Klaus Kautzor-Schr鰀er

    Members: Mr. Christopher Norall

    Mr. Gerardo Teodoro Thielen Graterol

    1.8 Mr. Christopher Norall resigned from the Panel on 27 June 1997. On 11 July 1997 the Director-General, acting on a request from Mexico, appointed a new member to the Panel. Accordingly, the composition of the panel was:

    Chairman: Mr. Klaus Kautzor-Schr鰀er

    Members: Mr. Gerardo Teodoro Thielen Graterol

    Mr. Jos?Antonio S. Buencamino

    1.9 The Panel met with the parties on 28/29 July 1997 and 13/14/15 October 1997. It met with third parties on 28 July 1997.

    1.10 On 30 July 1997, the Chairman of the Panel informed the DSB that the Panel would not be able to issue its report within six months of the agreement on the composition and terms of reference of the Panel. The reasons for the delay are set out in WT/DS60/5.

    1.11 The Panel submitted its interim report to the parties on 23 March 1998. On 3 April 1998, both parties submitted written requests for the Panel to review precise aspects of the interim report. At the request of Guatemala, the Panel held a further meeting with the parties on 16 April 1998 on the issues identified in the written comments. The Panel submitted its final report to the parties on 18 May 1998.

    II. FACTUAL ASPECTS

    2.1 This dispute concerns the initiation and subsequent conduct by Guatemala's Ministry of Economy ("Ministry") of an anti-dumping investigation against imports of grey portland cement from Cruz Azul, a Mexican producer. Cementos Progreso SA ("Cementos Progreso"), the only cement producer in Guatemala, filed a request for an anti-dumping investigation on 21 September 1995 and a supplementary request on 9 October 1995. On 11 January 1996, based on these requests, the Ministry published a notice of initiation of an anti-dumping investigation regarding allegedly dumped imports of grey portland cement from Cruz Azul of Mexico. The Ministry notified the Government of Mexico of the initiation of the investigation on 22 January 1996. The Ministry requested certain import data from Guatemala's Directorate-General of Customs by letter dated 23 January 1996. On 26 January 1996, the Ministry transmitted questionnaires to interested parties, including Cruz Azul and Cementos Progreso, with a response originally due on 11 March 1996. In answer to Cruz Azul's request, the Ministry extended the deadline for submission of the questionnaire responses until 17 May 1996. Cruz Azul filed a response on 13 May 1996. On 16 August 1996, Guatemala imposed a provisional anti-dumping duty of 38.72% on imports of type I (PM) grey portland cement from Cruz Azul of Mexico. The provisional duty was imposed on the basis of a preliminary affirmative determination of inter alia threat of injury. That provisional duty expired on 28 December 1996.

    2.2 The original investigation period set forth in the published notice of initiation ran from 1 June 1995 to 30 November 1995. On 4 October 1996, the Ministry extended the investigation period to include the period 1 December 1995 to 31 May 1996. On 14 October 1996, the Ministry issued supplemental questionnaires to Cruz Azul and Cementos Progreso, requesting, inter alia, that Cruz Azul provide cost data and provide data for the extended investigation period.

    2.3 A verification visit was scheduled to take place from 3 - 6 December 1996. This verification visit was cancelled by the Ministry shortly after it commenced on 3 December 1996.

    2.4 On 17 January 1997, Guatemala imposed a definitive anti-dumping duty of 89.54% on imports of grey portland cement from Cruz Azul of Mexico.

    III. FINDINGS AND RECOMMENDATIONS REQUESTED BY THE PARTIES

    3.1 Mexico requests the Panel to make the following rulings, findings and recommendations:

    (a) "reject all the preliminary objections raised by Guatemala";

    (b) "conclude that the measures adopted by Guatemala, in particular though not exclusively those relating to the initiation of the investigation, are inconsistent with the obligations of that Member country of the WTO under Article VI of GATT 1994 and, at least, Articles 2, 3, 4, 5, 6 and 7 and Annex I of the Anti-Dumping Agreement";

    (c) "also conclude that the measures adopted by Guatemala in contravention of its obligations under GATT 1994 and the Anti-Dumping Agreement nullify or impair Mexico's benefits within the meaning of Article XXIII of the GATT 1994"; and

    (d) "recommend to the Government of Guatemala that it revoke the anti-dumping duties imposed on Cruz Azul's exports of grey cement to that country and refund the corresponding anti-dumping duties".

    3.2 Guatemala asks the Panel to make the following preliminary rulings:

    (a) "determine that the Panel does not have the authority to examine the final measure, as the final measure is outside the Panel's terms of reference:"

    (b) "determine that the final measure is not within the Panel's terms of reference, taking into account Mexico's recognition of this at the first substantive meeting with the Panel and in its second submission to the Panel"1;

    (c) "reject Mexico's complaint because Mexico does not claim, much less provide evidence, that the provisional measure has had a "significant impact" in conformity with Article 17.4 and because such an impact cannot be demonstrated in this case";

    (d) "reject Mexico's complaint, because Mexico does not claim, much less provide evidence, that the provisional measure violates paragraph 1 of Article 7, as required by Article 17.4";

    (e) "alternatively, reject the claims made regarding the initiation of the investigation because Mexico failed to claim, much less provide evidence, that Guatemala had violated Article 1 or Article 7.1 by imposing an anti-dumping measure in an investigation that was not initiated properly";

    (f) "alternatively, reject all [Mexico's] claims regarding the `final stage of the investigation';

    (g) "alternatively, reject the seven individual claims made by Mexico ... [that] ... do not come within the Panel's terms of reference. Also to reject the two individual claims made by Mexico shown on page 32 of the English text of Guatemala's first written submission, which were not raised during the consultations"; and

    (h) alternatively, reject the new claims raised by Mexico during the Panel proceedings.

    3.3 In the event the Panel does not reject Mexico's claims on the basis of Guatemala's preliminary objections, Guatemala requests the Panel to find that:

    (i) "Guatemala initiated the investigation in conformity with the ADP Agreement";

    (j) "without prejudice to the foregoing argument, that any alleged procedural errors committed at the time of initiating the investigation do not affect the provisional measure because (a) they do not nullify or impair Mexico's rights under the ADP Agreement; (b) Mexico gave cause for estoppel by failing to submit its arguments in the administrative file on the investigation at the proper time and in due form; and (c) they constituted a `harmless error'";

    (k) "Guatemala imposed the provisional measure in compliance with the ADP Agreement"; and

    (l) "Guatemala imposed the final measure in compliance with the ADP Agreement".

    3.4 In the event the Panel finds that Guatemala acted in a manner inconsistent with the ADP Agreement, Guatemala requests that the Panel:

    (m) "recommend that Guatemala bring the allegedly incompatible measure into conformity with the ADP Agreement"; and

    (n) "not recommend or suggest any specific or retroactive remedy".

    IV. MAIN ARGUMENTS OF THE PARTIES

    A. Preliminary Objections

    4.1 Guatemala raises a number of preliminary objections to argue that the Panel has no jurisdiction to consider the present dispute. Guatemala submits that the initiation of the investigation, the provisional measure, the conduct of the final stage of the investigation, and the final measure fall outside the Panel's terms of reference.

    4.2 Mexico asserts that the dispute is properly before the Panel, and that the Panel has jurisdiction to consider all the claims identified in Mexico's request for the establishment of a panel.

    1. Whether the final measure is before the Panel

    4.3 Guatemala argues that the provisional measure adopted on 16 August 1996 is the only anti-dumping measure that was the subject of Mexico's request for consultations, dated 15 October 1996, and of its request for the establishment of a dispute settlement panel, dated 4 February 1997. Consequently, Guatemala contends that the Panel lacks a mandate or jurisdiction to consider the final anti-dumping measure adopted on 17 January 1997. By virtue of Article 17.4 of the ADP Agreement2, only three types of measure may be the subject of recommendations by a panel, that is, a provisional measure imposed in accordance with Article 7, a price undertaking given under Article 8, or a final measure imposing an anti-dumping duty in accordance with Article 9. Anti-dumping investigations, or actions or decisions taken during the course of the investigation, do not constitute "measures" within the meaning of Article 19.1 of the DSU. According to Article 1 of the ADP Agreement, "[a]n anti-dumping measure shall be applied only ... pursuant to investigations". This shows that the "investigation" itself cannot be the "measure" in dispute.

    4.4 Guatemala submits that Article 6.2 of the DSU requires that the complainant should identify the "specific measures" at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly in its request for the establishment of a panel. In other words, the request should (a) identify the measures at issue; and (b) identify the claims relating to such measures. It does not suffice simply to identify the measures at issue or only identify the claims. Consequently, in order for a panel to have a mandate to examine claims relating to a provisional measure, a price undertaking or the final measure, the complainant must indicate in its request for the establishment of a panel whether the dispute hinges on a provisional measure or a price undertaking, or whether it relates to a final measure. When uniform terms of reference are used, the request for the establishment of a panel is the document which specifies the measure and the individual claims concerning the measure that come under a panel's terms of reference.3 According to Guatemala, only the specific measure and the individual claims concerning that measure, and which are duly identified in the request for the establishment of a panel, come within the jurisdiction of the Panel.

    4.5 Guatemala notes that, in its request for the establishment of a panel (WT/DS60/2), Mexico did not identify the final measure, nor present individual claims challenging the final measure, nor invoke Articles 1, 9 or 12.2.2 of the ADP Agreement, nor make claims regarding the imposition of the final measure by Guatemala. Thus, the Panel lacks jurisdiction to examine the final measure, because the final measure falls outside the Panel's terms of reference. The only measure covered by the Panel's terms of reference is the provisional anti-dumping measure in effect from 28 August 1996 to 28 December 1996.

    4.6 Guatemala recalls that in Brazil - Measures Affecting Desiccated Coconut4 the WTO Appellate Body determined that "... the 'matter' referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference".5 According to the text of Articles 4.4 and 6.2 of the DSU, the claims must refer to a particular "measure" that has allegedly been imposed in a manner inconsistent with any covered agreement. Unless the claims in the matter concern a "measure", the matter (and the individual claims) are irrelevant. According to Article 19.1 of the DSU, a panel may only make a recommendation to "bring the measure into conformity with" the Agreement. A panel is not authorized to make recommendations on a matter (nor on the individual claims therein) if it is not related to the "measure" mentioned in the panel's terms of reference. Furthermore, according to Article 17.6(ii) of the ADP Agreement, the Panel must state whether the "measure" adopted is in conformity with the Agreement.

    4.7 Guatemala submits that, in an anti-dumping context, this interpretation is consistent with Articles 17.3 and 17.4 of the ADP Agreement. Appendix 2 of the DSU identifies Article 17.4 - but not Article 17.3 - as a special or additional rule for the settlement of disputes under the ADP Agreement. Article 4.4 of the DSU (applicable to consultations) must be interpreted consistently with Article 17.3 of the ADP Agreement. Article 4.4 of the DSU requires that a complaining Member identify the "measures at issue" in its request for consultations. The "matter" referred to in Article 17.3 must consist of the "claims" brought by the complainant challenging the anti-dumping measure identified in the request for consultations under Article 4.4 of the DSU. Therefore, if it is to be consistent with Article 4.4 of the DSU, the "matter" cannot include any claim that refers to a measure other than the "measures" identified in the request for consultations.

    4.8 Guatemala notes that Article 17.4 imposes a special rule according to which, for the purpose of establishing the Panel's competence for the provisional measure in question, the complainant Member must prove that the provisional measure has a significant impact. The DSU, on the other hand, does not require proof of any trade effect as a condition for contesting a measure before a panel. According to Guatemala, other than the requirement to prove a trade effect in challenging a provisional anti-dumping measure, there is no other inconsistency between Article 17.4 of the ADP Agreement and Article 6.2 of the DSU. Article 17.4 of the ADP Agreement (which is a special or additional rule or procedure under the DSU) is to be read, as it can be, consistently with Article 6 of the DSU, to require that parties must refer matters to the Dispute Settlement Body (about which they have consulted) by "identify[ing] the specific measures at issue" (Article 6.2 of the DSU). Guatemala asserts that the interpretation must therefore be that the ADP Agreement and the DSU are consistent, with the exception of the "significant impact" requirement for disputes concerning provisional measures. In this light Guatemala provides an interpretation of the procedures for the settlement of anti-dumping disputes contained in Article 17 of the ADP Agreement and Articles 4 and 6 of the DSU:

    ( Informal consultations: Prior to the imposition of a provisional measure and at any other time, Members may hold informal consultations on any aspect of the anti-dumping procedures, including inter alia the initiation, gathering of evidence during the preliminary stage of the investigation, and procedural requirements;

    ( Formal consultations regarding the provisional measure: Once the provisional measure has been imposed, the complaining Member may request formal consultations under Article 17.3 of the ADP Agreement. According to Article 4.4 of the DSU, in its request for formal consultations the Member must identify the provisional measure as the "measure at issue". Consequently, the individual claims that constitute the "matter" that is the subject of consultations under Article 17.3 of the ADP Agreement must contest the provisional measure. A request for formal consultations gives third parties the opportunity of joining in the consultations held on the provisional measure, as required by Article 4.11 of the DSU;

    ( Request for the establishment of a panel to examine the provisional measure: After expiry of the 60-day consultation period prescribed in Article 4.7 of the DSU, the complaining Member may request the establishment of a panel to examine "the matter" that was the subject of the consultations held under Article 17.3 of the ADP Agreement, provided the Member believes that it can prove to the panel that the provisional measure had a "significant impact", within the meaning of Article 17.4 of the ADP Agreement. According to Article 4.4 of the DSU, the "matter" must refer to the provisional measure. Guatemala states that pursuant to Article 6.2 of the DSU, in its request for the establishment of a panel the Member must identify the provisional measure as "the specific measure at issue". Consequently, the individual claims that constitute the "matter" - the subject of the request made under Article 17.4 - must contest the provisional measure;

    ( Request for consultations on the final measure: If the complaining Member is unable to prove that the provisional measure had a significant impact, Guatemala submits that it must wait until the investigating authority has taken a final decision to impose definitive dumping duties or accepted a price undertaking. Once the final action has been taken, according to Article 17.3 of the ADP Agreement, the complaining Member may request formal consultations. In accordance with Article 4.4 of the DSU, in its request for formal consultations the Member must identify the final measure as the "measure at issue". Consequently, the individual claims that constitute the "matter" that is the subject of consultations must contest the final measure. Guatemala notes that a request for formal consultations gives third parties the opportunity of joining in the consultations held on the final measure as required by Article 4.11 of the DSU; and

    ( Request for the establishment of a panel to examine the final measure: After expiry of the minimum 60-day consultation period prescribed in Article 4.7 of the DSU, the complaining Member may invoke Article 17.4 of the ADP Agreement and request the establishment of a panel to examine "the matter" that was the subject of the consultations held under Article 17.3 of the ADP Agreement. According to Article 6.2 of the DSU, in its request for the establishment of a panel, the Member must identify the final measure as the "specific measure at issue". Consequently, Guatemala asserts that the individual claims that constitute the "matter" - the subject of the request made under Article 17.4 of the ADP Agreement - must contest the final measure.

    4.9 Mexico denies that the final measure is not within the Panel's terms of reference. Although Mexico acknowledges that the final determination was not included in its request for the establishment of a panel, it denies that the final measure was similarly excluded.6 The final determination was not included in the request for the establishment of a panel since that determination had not yet been adopted when Mexico requested consultations with Guatemala under Article 17.3 of the ADP Agreement and Article 4 of the DSU. While it is true that Mexico did not challenge the final determination as such, this does not mean that the final measure, i.e. the definitive anti-dumping duties applied by Guatemala, is consistent with Guatemala's obligations under GATT 1994 and the ADP Agreement, or that those duties are not within the terms of reference of the Panel. According to Mexico, the fact that the final determination in itself is not challenged cannot and should not legitimize the violations committed in the earlier stages of the investigation. That would completely nullify the content and purpose of the second sentence of Article 17.4 of the ADP Agreement, contrary to the rules of interpretation of the Vienna Convention on the Law of Treaties ("Vienna Convention").

    4.10 Mexico suggests that according to Guatemala's argument, even if the violations of the ADP Agreement were committed in the initiation of the investigation, the complainant would have to wait until the final anti-dumping duties were applied before requesting consultations with a view to establishing a panel. Otherwise, the final anti-dumping duties would remain outside the terms of reference of the panel. Alternatively, if the consultations were requested following the preliminary determination pursuant to Article 17.4 of the ADP Agreement, in the time it took to hold the consultations and establish a panel, the preliminary determination would have ceased to exist and would have been replaced by the final determination. Since, according to Guatemala, panels have no mandate to recommend specific or retroactive remedies, when the complainant finally managed to obtain a ruling that the investigation was invalid from the start and should not in fact have been initiated, that ruling would have no effect in practice since the anti-dumping duties that had been collected would wrongfully remain in the coffers of the importing country. That is to say that when the conclusions of a panel relating to a provisional measure were received, that measure would have become meaningless, because it would have been replaced by that time by a definitive measure which could not have been examined by the panel for the simple reason that it was adopted only after the panel had been established.

    4.11 According to Mexico, this would create a strong incentive for WTO Members to ignore the disciplines of the ADP Agreement as regards the initiation of investigations. The worst that could result from initiating an investigation without complying with the relevant disciplines of the ADP Agreement would be to gain the time it takes to carry out the entire anti-dumping investigation from its initiation to the final determination, plus the time required to hold consultations on the final measure and, subsequently, to obtain a ruling from the panel and, where applicable, the Appellate Body. Mexico notes that, in addition to gaining that time, the violating Member would have obtained the duties collected as a result of violating its obligations under the ADP Agreement. It is clear from the actual wording of the second sentence of Article 17.4 that there is no need to wait until the importing Member has adopted a final measure. This is dealt with only in the first sentence. Mexico suggests that combining the first sentence with the second sentence distorts the paragraph as a whole and creates confusion. If the Members of the WTO had to wait until final measures were adopted before resorting to the DSB, the second sentence of Article 17.4 would simply not exist.

    4.12 According to Mexico, its request for the establishment of a panel which forms part of the terms of reference of the Panel, shows that from the outset Mexico challenged: (a) the initiation, (b) the preliminary resolution, and (c) the final stage of the proceedings of the anti-dumping investigation in question. Thus, if it is to comply with its terms of reference, the Panel must rule on each one of these claims or, according to Article 7.2 of the DSU, it must address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute. Mexico submits that if the Panel were to find that the anti-dumping investigation in question was initiated and conducted in violation of the relevant provisions of the ADP Agreement, or simply that it was not initiated in conformity with the ADP Agreement, then it would have to conclude that the resulting anti-dumping duties were also inconsistent with Guatemala's obligations under the ADP Agreement. In other words, although Mexico may not have challenged the final determination as such, this does not mean that Mexico did not challenge the resulting anti-dumping duties. It did so as early as during its consultations with Guatemala by pointing out to Guatemala that the investigation should not have been initiated, and subsequently, by asking the Panel to cancel the investigation and order the refund of the corresponding anti-dumping duties.

    4.13 Guatemala notes the fact that Mexico recognized in its second submission that the definitive measure was not included in the request for the establishment of a panel because "that measure had not yet been adopted when Mexico asked for consultations", which means that in Mexico's view, it is indispensable that any measure to be examined should have been adopted before the request for consultations.7 Applying this same reasoning, for the Panel to examine Mexico's claims concerning the final stage, it is also indispensable that the events or actions in question should have taken place before the consultations were held. However, Guatemala notes that when Mexico requested formal consultations on 15 October 1996, various phases of the final stage of the investigation had not yet taken place, including the extension of the period of investigation, the use of non-governmental experts in the verification, the request for information on costs and sales during the verification, the submission of the technical accounting evidence, the information on facts essential to the investigation, the submission of confidential information and the non-establishment of deadlines for the submission of information. Applying Mexico's logic, these phases of the final stage of the investigation should also have been excluded from Mexico's request for the establishment of a panel.

    2. Whether the final stage of the investigation is before the Panel

    4.14 Guatemala claims that the Panel has no mandate to examine claims relating solely to the final stage of the investigation. Guatemala argues that, in order to be able to make claims concerning aspects of an investigation subsequent to the provisional measure, a complainant is obliged to challenge the final measure under which the anti-dumping duties were imposed. In its request for the establishment of a panel and in its first written submission, Mexico raises only the dispute regarding the provisional measure, not the final measure. Guatemala therefore claims that the Panel must disregard Mexico's claims concerning the final stage of the investigation, inasmuch as they are irrelevant to the Panel's task of reviewing the provisional measure.

    4.15 Furthermore, Guatemala asserts that the claims in question relate to a stage in the investigation process which (1) is completely different from the stage referred to in consultations, (2) had not even occurred when Mexico requested consultations, and (3) concern a measure which is totally different under the terms of the ADP Agreement. Guatemala notes that because Mexico did not put forward the whole range of claims relating to the final stage of the investigation until the last day of the consultations8, Mexico deprived Guatemala of the right to hold consultations regarding those claims during the consultation period provided for in Article 4.5 of the DSU. Guatemala relies on United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, in which it alleges that the panel found that, in accordance with Article 15 of the special dispute settlement provisions of the Tokyo Round Anti-Dumping Code, "before a party to a dispute could request a panel concerning a matter, the parties to the dispute had to have been given an opportunity to reach a mutually satisfactory resolution of the matter. This condition would not be meaningful unless the matter had been raised in consultations and conciliation".9 Guatemala argues that because Mexico waited until the last day of the consultations to raise the entire range of claims relating to the final stage of the investigation, it prevented the special provisions enacted for anti-dumping cases from fulfilling their function of giving the parties the opportunity to reach "a mutually satisfactory resolution" of the claims regarding the final stage as required by Article 17.3 of the ADP Agreement. For this reason, Guatemala asserts that the Panel must reject all of Mexico's claims relating to the final stage.

    4.16 Mexico states that Guatemala's argument that a complainant is obliged to challenge the final measure in order to raise claims against aspects of the investigation subsequent to the provisional measure is not supported by any provision of the ADP Agreement. Furthermore, Mexico notes that the entire range of claims relating to the final stage were dealt with in consultations. Moreover, Mexico contends that all such claims were included in the request for the establishment of a panel, and therefore form part of the Panel's terms of reference, consistent with the ADP Agreement and United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway.10

    4.17 Guatemala further argues that any claim in respect to the final stage is entirely irrelevant to the only "measure at issue" identified in the terms of reference of the Panel. Under Article 19.1 of the DSU, only measures may be brought into conformity, and consequently, even in the remote hypothesis that the Panel should conclude that there was, indeed, a violation in the final stage, the Panel could not issue any recommendation in respect of the final measure because the final measure is not within the terms of reference of this dispute. Thus, the Panel should reject Mexico's claims with respect to the final stage of the investigation.

    3. Whether the provisional measure is before the Panel

    4.18 Guatemala asserts that, according to Article 17.4 of the ADP Agreement, a Member may only refer a provisional measure to the DSB if that measure has a "significant impact". Guatemala notes that Article 17.4 provides that a Member may refer the matter that was the subject of consultations to the DSB for the establishment of a panel if such Member "considers" that consultations have failed and if final action has been taken. Article 17.4 also provides that the Member may refer a provisional measure to the DSB if such measure "has a significant impact" and the Member "considers" that the measure was taken contrary to paragraph 1 of Article 7. Because the drafters excluded the term "considers" from describing the prerequisite that the provisional measure have a significant impact, Guatemala argues that a complaining party must demonstrate such impact to the panel in its request for establishment of a panel or as a jurisdictional prerequisite in its first written submission. Guatemala states that Mexico neither contends nor demonstrates that the provisional measure actually had a "significant impact".

    4.19 According to Guatemala, "significant impact" is measured with regard to the impact on the Members's trading interests, and not the impact on the exporter or exporters under investigation. The complainant in a dispute before the WTO is the Member, not the exporter or exporters under investigation. According to Article 17.4 of the ADP Agreement and Article 6.2 of the DSU, the only party empowered to request the establishment of a panel is the Member. Moreover, the duties and obligations laid down in the ADP Agreement apply to Members, not to exporting firms. The drafters of the ADP Agreement could have provided in Article 17.4 that the "significant impact" applied to the exporter or exporters investigated, but they did not do so. Guatemala suggests that this was precisely the position adopted by Mexico in a previous case. In United States - Anti-Dumping Duties on Grey Portland Cement and Cement Clinker from Mexico11, Mexico had stressed that the GATT was called upon to regulate conduct between the signatory countries and that the dispute settlement mechanism was a government-to-government process. According to Guatemala, Mexico had contended that the earlier version of Article 17.4 of the ADP Agreement "expressly allowed the signatories to challenge ... final determinations, and even preliminary determinations where these had a significant impact on their trading interests".12 According to Guatemala, Mexico had not suggested that it sufficed to show a significant impact on the exporters investigated.

    4.20 Guatemala denies that the provisional measure had a significant impact on Mexico's trading interests. Guatemala also argues that, under the terms of the provisional measure, importers could choose between providing a surety or making a cash deposit to cover the estimated margin of dumping, or paying the actual provisional duty. If on the occasion of the first administrative review Cruz Azul were to demonstrate that the imports in question were not dumped imports, sureties provided by the importers in Guatemala would be released and their cash deposits would be refunded. Furthermore, Guatemala notes that the provisional measure was in force for only four months, and that the imports covered by the provisional measure accounted for only a fraction of total Mexican exports during that four-month period. According to official export data from Bancomex, during 1996 exports of grey portland cement from Mexico to Guatemala constituted only 0.016% of Mexico's exports of all products to all countries ($96 billion in total exports to all countries/$15.6 million in cement exports to Guatemala). Using data supplied by Mexico and Bancomex, Mexico's exports of grey portland cement to Guatemala in 1996 constituted only 4.3% of Mexico's exports of all products to Guatemala in 1996 ($360 million in total exports to Guatemala/$15.6 million in cement exports to Guatemala). For the period during the application of the provisional measure (September-December 1996), Mexico's exports of grey portland cement to Guatemala constituted only 3% of Mexico's exports of all products to Guatemala ($101.8 million in total exports to Guatemala from September-December 1996/$3.1 million in cement exports to Guatemala from September-December 1996). Because of its low value to weight ratio and the high cost of overland transportation, Guatemala submits that cement is not a significant export product for Mexico. In addition, Guatemala suggests that the traditional export markets for Mexican cement are the United States and other countries that have cement consumption that is many times greater than that of Guatemala. Even after the United States imposed very high anti-dumping duties against Mexican cement in August 1990, the Mexican industry did not redirect its exports to Guatemala. Instead, Mexico redirected its cement exports to Asian markets that are accessible by ocean freight, which is much less costly than overland freight. Guatemala therefore argues that the provisional measure did not have a significant impact on Mexico's trading interests.

    4.21 Guatemala also argues that Mexico failed to allege, and cannot demonstrate, that the provisional measure had a significant impact on the Mexican industry producing grey portland cement. Guatemala asserts that the provisional measure only concerned exports of cement by one Mexican producer, and that it did not involve exports by the main Mexican cement producers - CEMEX, Apasco or Cementos de Chihuahua. Guatemala notes that both CEMEX and Apasco currently export cement to Guatemala. Thus, the fact that Guatemala applied the provisional measure to a very small share of the Mexican cement industry demonstrates that the provisional measure did not have a significant impact on the Mexican cement industry, much less on Mexico's trading interests as a whole. Referring to information from the Mexican National Bank for Foreign Trade and the 1996 Global Cement Report, Guatemala argues that Mexico's exports of grey portland cement to Guatemala during 1996 (287,545 tonnes) only accounted for 0.65% of the Mexican cement industry's production capacity (44 million tonnes) and 1.1% of Mexico's total cement production forecast for 1996 (26,331,000 tonnes). Thus, with an impact of less than 1%, one can conclude that the exports from the Mexican cement industry to Guatemala, or the loss thereof, could never have a significant impact on the overall trading interests of the Mexican cement industry, much less on the overall trading interests of Mexico.

    4.22 Guatemala considers that the aim of the limitations on jurisdiction contained in Article 17.4 of the ADP Agreement is that Members should not unreasonably question any provisional measure imposed temporarily, when such measure has only a negligible impact and only affects one enterprise on the territory of the exporting Member. According to Guatemala, the logic of this approach is apparent when one considers that under Article 13 of the ADP Agreement, the right of domestic judicial review is limited to final determinations. WTO resources are intended to be used for considering disputes relating to the imposition of definitive anti-dumping duties and price undertakings, except where the imposition of the provisional measure has a significant impact on the Member's trading interests. Guatemala asserts that the provisional measure imposed by Guatemala had no significant impact on Mexico's overall trading interests. According to Guatemala, the Panel therefore lacks authority to consider the question raised by Mexico regarding the Guatemalan provisional measure, and Mexico's claim should therefore be rejected.

    4.23 Guatemala submits that it is an essential prerequisite that the Member bringing a claim in respect of a provisional measure prove to the panel that the measure has had such a negative impact on its trade interests that it is not possible to await the final determination before seeking resolution of the dispute. If the exporting Member against whom the provisional measure has been applied does not demonstrate its impact, how is the panel to know for certain whether or not a provisional measure has a significant impact? There is no way it can know unless the Member that requested establishment of the panel provides irrefutable evidence of significant impact.

    4.24 Mexico disputes Guatemala's argument that, for the Panel to have jurisdiction to deal with the provisional measure, Mexico must demonstrate that the provisional measure had a "significant impact" on its overall trading interests. Mexico states that the second sentence of Article 17.4 of the ADP Agreement nowhere contains the term "demonstrate" and hence the obligation to prove or establish the existence of a "significant impact" cannot be inferred. The omission of the term "demonstrate" contrasts with the precision with which the same term is used, for example, in the first two sentences of Article 3.5 of the ADP Agreement on determination of injury.13 If those who drafted the ADP Agreement had considered or agreed that it was necessary to demonstrate "significant impact", the text of Article 17.4 of the ADP Agreement would have contained at least one reference to the term "demonstrate".

    4.25 Mexico asserts that there is no trace of the term "overall trading interests" used by Guatemala, either in Article 17.4 or anywhere else in the ADP Agreement. Using Guatemala's definition of this term, Mexico considers that neither the United States nor other Members of the WTO with overall trading interests of several billions of dollars could make use of this provision of Article 17.4 of the ADP Agreement. Mexico submits that Guatemala's approach would render the second sentence of Article 17.4 meaningless.

    4.26 In Mexico's opinion, the reference to "significant impact" is sufficiently broad to leave the decision to invoke the second sentence of Article 17.4 of the ADP Agreement to the exporting Member affected, even before the results of the final resolution are known. In this connection, Mexico notes that Article 6.1 of the DSU begins with the words "[i]f ... the complaining party so requests ...".

    4.27 Guatemala denies that a finding of significant impact is subjective; it must refer to concrete effects which can, in fact, be assessed. Guatemala further denies that it is up to the exporting Member to decide whether to submit the case to the dispute settlement system or not. Discretion with respect to bringing a case only applies to cases in which the exporting Member is challenging the final measure, because where the final measure is concerned it is the general guidelines set forth in Article XXIII of GATT 1994 and Article 3.7 of the DSU that apply, according to which a Member wishing to bring a case may exercise its discretion in deciding whether or not to do so. On the other hand, in anti-dumping cases concerning provisional measures, Article 17.4 of the ADP Agreement, far from allowing the complaining Member to exercise its discretion with respect to the impact of the measure, expressly requires that the complainant should prove significant impact.

    4.28 Mexico states that on 4 February 1997 the DSB was asked to establish a panel at its meeting on 25 February 1997. The DSB's consideration of the request was postponed because Guatemala opposed the establishment of a panel, alleging only that two appeals by Cruz Azul and Distribuidora Comercial Molina were pending. The establishment of a panel was again submitted for consideration by the DSB at its next meeting on 20 March 1997, at which Guatemala also had ample opportunity to make whatever arguments it thought fit. However, Mexico notes that Guatemala did not advance any arguments relating to significant impact. Therefore, even if it were assumed, for argument's sake, that it was necessary to demonstrate "significant impact", Mexico considers that this is no longer the appropriate moment in the procedure for advancing that argument, since Guatemala is claiming that the Panel should examine what was a matter for examination by the DSB.

    4.29 Guatemala submits that it was not obligated under any provision of the ADP Agreement or the DSU, nor did it have any reason, to make this preliminary objection before the DSB. The Panel - and not the DSB - is the appropriate body for defining the scope of a panel's authority, including whether a measure may or may not be examined according to Article 17.4 of the ADP Agreement. According to Article 7.1 of the DSU, the uniform terms of reference are "to examine, in the light of the relevant provisions in (name of the covered agreement(s)) ... the matter ... and to make such findings ... ". Article 7.2 of the DSU confirms that "[p]anels shall address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute." Consequently, a panel established under the WTO has the authority and the obligation to examine the relevant provisions cited by the parties to the dispute. On the other hand, Article 2 of the DSU provides that the DSB shall administer the rules and procedures for the settlement of disputes, but shall only "have the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings and recommendations, and authorize suspension of concessions and other obligations under the covered agreements". Article 2 does not give the DSB the authority to issue decisions or interpret provisions of the covered Agreements cited by the parties to the dispute. A panel is established to examine a specific dispute, it is composed of three members selected in accordance with Article 8 of the DSU on the basis of their personal qualities, and is a more appropriate body than the approximately 130 members of the DSB for dealing with complex preliminary aspects. Guatemala asserts that preliminary objections by the parties have been examined by many panels established under the GATT and the WTO, particularly for the purpose of determining whether the claims or measures are properly included within the panel's scope of competence, i.e., are within the panel's terms of reference.14 A panel established to settle a dispute is thus the appropriate forum for examining preliminary objections raised under the ADP Agreement.

    4.30 Guatemala notes that the DSB only authorizes the establishment of panels with either uniform terms of reference or, if applicable, special terms of reference. The uniform terms of reference only refer to the matter brought up by the complaining Member, but do not refer to the arguments of the defending Member. The latter is therefore not obliged to submit its arguments or preliminary objections in advance to the DSB. At this stage in the proceeding, the DSB has no interest in arguments raised by the respondent Member. The latter need only raise its arguments and preliminary objections in its first submission to the panel.

    4.31 Guatemala states that Article 6.1 of the DSU was adopted to ensure that if there is a claim against a Member, the latter may not unilaterally prevent the establishment of a panel. According to Article 6.1, a panel "shall be established at the latest at the DSB meeting following that at which the request first appears as an item on the DSB's agenda, unless at that meeting the DSB decides by consensus not to establish a panel". Consequently, the reverse consensus rule did not allow Guatemala to object on the basis of Article 17.4 of the ADP Agreement, and Guatemala was thus obliged to wait and put forward its objection in its first written submission. In any event, Article 17.4 provides that proving the existence of "a significant impact" is a necessary prerequisite for determining whether a panel is competent or not to examine the provisional measure. Guatemala expected that Mexico's first submission in the procedure would try to prove the significant impact. Since Mexico did not put forward any argument much less fulfil this prerequisite, Guatemala made its objections in its first written submission to the Panel. According to Guatemala, there is no provision either in the ADP Agreement or the DSU obliging Guatemala to make its preliminary objections to the DSB. Moreover, in line with the traditional principles applicable to "waivers", there is no obligation to raise the claim in one particular forum in order to retain the right to raise it in another forum, if raising it in the first forum would have been meaningless. As already indicated, Guatemala did not raise the preliminary objection in the DSB because the DSB is not the appropriate forum for taking decisions in this respect, and because raising the objection would have served no purpose in view of the rule of reverse consensus in Article 6.1 of the DSU. Moreover, Guatemala notes that no panel has ever refused to examine a preliminary argument on the grounds that it was not brought before the DSB.

    4.32 Mexico suggests that Guatemala's arguments are contradictory. In order to justify not having challenged this matter at the two meetings of the DSB when it could have done so, Guatemala maintains that it was up to the Panel, and not the DSB, to examine the matter. Mexico suggests that if this were the case, it would be incorrect to infer, as Guatemala apparently has done, that Mexico would have had to demonstrate significant impact to the DSB in order to be entitled to the establishment of a panel. Pursuing this line of reasoning, Mexico argues that both the complainant and the respondent should have the same opportunity before the Panel, above all if one considers that the complainant cannot, by definition, submit a claim concerning lack of significant impact, while the respondent could have raised the matter before the DSB.

    4.33 Mexico asserts that the notion of significant impact usually includes effects, both qualitative and quantitative, at various levels (federal, subfederal, state) and in various sectors (public, private), according to the circumstances. Mexico submits that the dispute with Guatemala involves concerns of a systemic nature which go beyond Mexico's interests as an exporter to the Guatemalan market alone. A ruling in favour of Guatemala would create a precedent that could affect Mexican exports of any product to any market. In particular, the dispute would imperil Mexico's exports to Central America, since the other countries of the subregion, which apply the same anti-dumping regulations as Guatemala, would have noted that the initiation and conduct of an anti-dumping investigation with serious flaws could be endorsed by a WTO panel despite such flaws and that, even if a ruling were obtained against them, the worst that could happen would be for a panel to recommend a post facto adjustment of the violations committed.

    4.34 Guatemala asserts that the systemic concerns invoked by Mexico and the alleged adverse effect on Mexican exports of any product to any market are not consistent with Article 17.4 of the ADP Agreement. On the contrary, the true systemic interest lies in not allowing a complainant to justify or provide excuses for failing to observe legal requirements on the grounds of alleged systemic considerations.

    4.35 According to Mexico, Guatemala's anti-dumping investigation has affected a significant proportion of Mexico's total exports to that country. Moreover, because of the uncertainties that arose in Guatemala with respect to the enterprises and the product subject to investigation, the investigation affected the exports not only of Cruz Azul but also of all the other Mexican cement companies which were exporting or planning to export to Guatemala. Mexico submits that, as a result of practical difficulties incurred in Guatemala, sureties or cash deposits could not be used for Cruz Azul's exports, and actual provisional duties were therefore paid by the importers.

    4.36 Guatemala notes that its preliminary determination did not give rise to any "uncertainty" as to the enterprise or the product under investigation. Without conceding that there was any uncertainty, it would have been totally inappropriate for Mexico to refer to an alleged uncertainty created by the "investigation" to demonstrate significant impact as required by Article 17.4 when what is required is for Mexico to demonstrate the impact caused by the provisional measure. Nor is it right to say that the measure affected all of the other Mexican cement firms that have exported or that had planned to export to Guatemala. On the contrary, since the measure was imposed only on Cruz Azul, firms such as Apasco and even a new exporter, Cemex, are competing with Cementos Progreso in a healthy market.

    4.37 Mexico considers that, from a practical point of view, it is logical to assume that no exporting Member would seek dispute settlement involving a provisional measure under the second sentence of Article 17.4 of the ADP Agreement if the measure had no significant impact on that Member. What would be the point of initiating a dispute in the WTO if the investigation in question was not having a significant impact? No Member, least of all Mexico, would allocate economic and human resources to something which was not worth the trouble.

    4.38 Guatemala replies that if one were to accept that every claim is in itself necessarily evidence of significant impact, the second sentence of Article 17.4 of the ADP Agreement would be meaningless.

    4.39 Mexico suggests that if it were to accept - simply to illustrate the importance of anti-dumping duties on Mexico's cement exports to Guatemala - that significant impact had to be linked with the volume of the trade affected by the measure, the following figures would be worth noting: the exports affected by anti-dumping duties accounted for more than 5% of Mexico's total exports to Guatemala in 1996; Cruz Azul's exports represented almost 91% of Mexico's total cement exports to Guatemala, and Cruz Azul's cement exports to Guatemala accounted for more than 72% of the firm's total exports worldwide.

    4.40 Guatemala argues that the share of exports that Guatemala allegedly represents for Cruz Azul does not provide an appropriate or reasonable evaluation because Cruz Azul's total exports are insignificant when compared to the firm's overall operations. For example, in 1996, Cruz Azul's exports of grey portland cement to Guatemala amounted to 261,378 metric tonnes, which represents only 4.7% of its installed capacity of 5,560,000 metric tonnes. Moreover, if the same comparison is made in respect of exports of grey portland cement from Cruz Azul to all countries, Guatemala notes that they represent only 6.6% of the firm's installed capacity. In other words, Cruz Azul's exports, be it to Guatemala or to all countries, could never have a significant impact on that single firm's trading interests, much less on the Mexican cement industry or Mexico's trading interests as a whole.

    4.41 In response to a request by the Panel15, Mexico also provided data concerning the percentage of affected exports in relation to total Cruz Azul domestic production in 1995 and 1996, where "Production" refers to production by the Lagunas plant in the State of Oaxaca (which was the sole plant to export to Guatemala in the relevant period) in metric tonnes, and "Total production" refers to the total production of both of Cruz Azul's Mexican plants in metric tonnes, including the plant in the State of Hidalgo that never exported to Guatemala. Mexico suggests that, because the plant in the State of Hidalgo did not export to Guatemala, the Panel should focus on the data concerning the Lagunas plant.

    1995

    (June-Dec.)

    1996

    (Jan.-Aug.)

    1996

    (Sep.-Dec.)

    Production

    721,967 mt

    1,066,664 mt

    533,332 mt

    Total production

    1,776,153mt

    2,620,000 mt

    1,325,000 mt

    Exports

    82,385 mt

    227,903 mt

    46,195 mt

    % Exports of Production

    11.41%

    21.4%

    8.7%

    % Exports of Total Production

    4.6%

    8.6%

    3.39%

    4.42 Mexico notes that the period June-December has been included for the year 1995 because it was the period under investigation. Before that there were no imports from Mexico. The year 1996 has been broken down into two parts to highlight the fact that the preliminary determination, with anti-dumping duties of 38.72%, was made in August of that year. Mexico emphasises that the provisional determination, with the application of anti-dumping duties, produced a more than significant fall in the Cruz Azul plant's export/production percentage, i.e. 59.5%.

    4.43 Guatemala submits that according to the data provided by Mexico, Cruz Azul produced 293,077 tonnes per month during January 1995-August 1996. Its production increased to 331,250 tonnes per month during September-December 1996 when the provisional duties were in effect. In other words, based on Mexico's own data, production jumped 38,173 tonnes per month, or 13%, at the very time that Mexico claims that Cruz Azul suffered a significant impact. Furthermore, the exports of Cruz Azul to Guatemala averaged 20,686 tonnes per month during January 1995-August 1996 and decreased to 11,549 tonnes per month during September-December 1996. The alleged drop in monthly exports from 20,686 tonnes to 11,549 tonnes would suggest that Cruz Azul lost exports of only 36,548 tonnes while the provisional duties were in effect. That alleged loss equals less than 2% of the capacity of Cruz Azul to produce grey portland cement during those four months.

    4.44 Guatemala submits that, according to the annual report of Cruz Azul, the Lagunas plant produces about 37% of total production, and the Hidalgo plant produces the remaining 63%. Guatemala suggests that is why Mexico asked the Panel to discount data concerning the Hidalgo plant. Guatemala queries how a Member can claim to have suffered a significant impact on its trading interests based on data for only one minor plant of one minor producer of grey portland cement in Mexico, especially when cement is not a significant export product for Mexico in the first place.

    4.45 Guatemala objects to the untimely submission of new factual information by Mexico on the last scheduled day of the second meeting of the Panel. Guatemala submits that Mexico had an obligation to demonstrate significant impact in its request for the establishment of a panel, or at the very least, in its first written submission to the Panel. Guatemala also objects to the failure by Mexico to submit any evidence to substantiate its simple assertions of significant impact. Guatemala argues that, as the data was presented by Mexico at the second meeting with the Panel, it has had no opportunity to evaluate the accuracy of the data submitted by Mexico against any source documents and has had no opportunity to present rebuttal data for other time periods from the same sources. In other words, Mexico has been able to pick and choose from data allegedly obtained from Cruz Azul that best supports its position, but Guatemala has had no opportunity to review other data from Cruz Azul that would detract from the claims of Mexico.

    4.46 Mexico asserts that significant impact cannot be used as a condition for establishing a panel or as a determining factor in deciding whether the panel may examine a dispute under the second sentence of Article 17.4 of the ADP Agreement. The concept of significant impact cannot be a determining factor in deciding whether the dispute may be examined because the timetables set forth in the DSU and the ADP Agreement imply that the second sentence of Article 17.4 of the ADP Agreement would be rendered void, which is not possible. According to Mexico, for the complainant to be able to demonstrate significant impact (assuming that it is necessary to do so) in purely quantitative terms (a view which it does not share), it would take longer than the actual duration of the provisional measure and, in the end, the complainant would lose the right to challenge the provisional measure under the second sentence of Article 17.4 of the ADP Agreement. Indeed, according to Article 7.4 of the ADP Agreement, the application of provisional measures cannot exceed four months (with one exception that does not apply to this case), whereas the complainant would require approximately five months to demonstrate significant impact (one and a half months to obtain the export statistics, two months to hold consultations, one month for the DSB to establish a panel and one month for the panel to begin its work).

    4.47 Guatemala also submits that in order to make a claim relating to a provisional measure pursuant to Article 17.4 of the ADP Agreement, the complainant Member must claim "... that the measure was taken contrary to the provisions of paragraph 1 of Article 7 ...". In the introduction to its first written submission, Mexico states that "in the anti-dumping investigation in question actions were taken that are inconsistent with, at least, Articles 2, 3, 4, 5, 6 and 7 and Annex I of the ADP Agreement". Guatemala recalls that Mexico makes no reference to Article 7 in any other part of its submission, and does not cite paragraph 1 of Article 7 in any part of its submission. At no time did Mexico argue that Guatemala had violated paragraph 1 of Article 7. Nor did Mexico mention Article 7.1 of the ADP Agreement in its oral submission. Indeed, Guatemala notes that Mexico, in its request for the establishment of a panel, did not claim that paragraph 1 of Article 7 had been violated. In failing to invoke Article 7.1, Guatemala submits that Mexico also failed to meet the second requirement for the Panel to have competence to examine the provisional measure pursuant to Article 17.4 of the ADP Agreement.

    4.48 Mexico notes Guatemala's argument concerning Article 7.1 of the ADP Agreement, and recalls that it clearly cited Article 7 in its request for the establishment of a panel, and subsequently in its submissions to the Panel. Consequently, Guatemala's second objection with respect to the provisional measure is entirely unfounded. Furthermore, since the violations of Article 7.1 occurred at the initiation of the investigation and subsequently in the affirmative preliminary resolution, Mexico suggests that it is logical that the proof of such violations should be supplied in respect of the articles concerning the initiation and the preliminary determination and not only in respect of Article 7.1, as Guatemala apparently suggests.

    4. Whether the initiation is before the Panel

    4.49 Guatemala considers that Mexico is precluded from raising claims against the initiation of the investigation because: (1) it did not contest the final measure; (2) it did not claim that the provisional measure had been applied as a result of an investigation initiated in violation of Article 1 of the ADP Agreement; and (3) it did not claim that the provisional measure had been applied in violation of Article 7.1(i) of the ADP Agreement following the initiation of an investigation not in accordance with Article 5. According to Guatemala, to be able to bring the initiation of an investigation before the Panel, the complaining Member must either contest the final measure pursuant to Article 1 of the ADP Agreement, or contest the provisional measure pursuant to Articles 1 or 7.1 of the ADP Agreement. Initiation does not of itself constitute a "measure" within the meaning of Article 19 of the DSU. If the initiation were a "measure", Article 17.4 would indicate the necessary conditions for referring the "initiation measure" (as part of the "matter" on which the consultations were held) to the DSB.16

    4.50 With the exception of the elimination of the conciliation phase, Guatemala considers that Article 17 of the ADP Agreement is virtually identical to Article 15 of the Tokyo Round Anti-Dumping Code. Guatemala argues that a panel was never established under Article 15 of the Tokyo Round Anti-Dumping Code just to examine the initiation of an anti-dumping investigation or the investigation itself. Indeed, a panel set up under the Tokyo Round Anti-Dumping Code was never asked to restrict itself to examining a provisional measure without the complainant party also submitting a claim regarding the final measure. For example, in EC - Imposition of Anti-Dumping Duties on Cotton Yarn from Brazil17, Brazil held consultations with the EC on 11 November 1991 after it had imposed the provisional measure on 23 September 1991. Guatemala notes that the EC imposed the final measure on 23 March 1992, and that the parties held consultations on this measure on 27 October 1993. In other words, after imposition of the provisional measure, Brazil held consultations for the purpose of dealing with the claims relating to the provisional measure. When the final measure had been imposed, Brazil held consultations for the purpose of dealing with the claims relating to the final measure and, subsequently, a panel was established.

    4.51 Guatemala recalls that during the Uruguay Round negotiations, several countries proposed to amend Article 15 of the Tokyo Round Anti-Dumping Code to allow Members to contest the initiation of an investigation before a provisional or final measure was imposed. The delegation of Singapore stated that "[p]rocedures should be established which would allow the exporting country to challenge the initiation of an anti-dumping proceeding, if the initiation was frivolous and not consistent with the Code requirements."18 Singapore explained that:

    "Present dispute settlement procedures provide for the exporting country to seek conciliation only after the imposition of provisional duties. However, trade damage would already have been caused and code obligations violated at the stage of initiation of the anti-dumping investigation. Therefore dispute settlement procedures should be available at all stages of the anti-dumping proceedings."19

    4.52 Guatemala notes that the Nordic countries similarly proposed an amendment to Article 15 of the Tokyo Round Anti-Dumping Code, to allow Members " ... to invoke the dispute settlement mechanism already in the course of an anti-dumping investigation ... ."20 The Nordic countries proposed that the phrase "and final action has been taken by the administering authorities of the importing country to levy definitive duties or to accept price undertakings" should be deleted from Article 15.3.21 During the Uruguay Round, at a meeting of the Negotiating Group on anti-dumping, one delegation commented that "[d]ispute settlement procedures should be available at all stages of the anti-dumping proceedings, and procedures should also allow exporting countries to challenge the initiation of a proceeding."22

    4.53 Guatemala states that the signatories to the Uruguay Round rejected proposals that would have allowed Members to make a claim against the initiation of an investigation without contesting the provisional or final measures in their complaints. Guatemala asserts that the text eventually agreed upon, Article 17.4 of the ADP Agreement, is virtually the same as Article 15.3 of the Tokyo Round Anti-Dumping Code. According to Guatemala, under Article 17.4, in order to bring the initiation of an investigation before a panel, the Member must respect the same procedures (with the exception of conciliation) as under Article 15.3 of the Tokyo Round Anti-Dumping Code. The Member must await imposition of the final measure (unless it can show that the provisional measure was having a significant impact), hold consultations on the final measure and allow the specified time-limit to elapse before requesting the establishment of a panel to examine the final measure directly. According to Guatemala, when the Signatories rejected proposals to allow Members to make a claim against the initiation of an investigation without also contesting the provisional or final measure, they had very good reason for doing so. Firstly, for a panel to examine the decision to initiate an investigation whose final outcome might be negative would violate the fundamental GATT principle of judicial economy. Members should not be obliged to dissipate their resources in defending a decision on initiation or on the conduct of an investigation that does not lead to the imposition of a provisional or final measure. Secondly, restricting the dispute settlement procedure to claims against provisional or final measures prevents an exporting country from utilizing the dispute settlement mechanism to intimidate the investigating country or to obtain termination of the investigation or a negative preliminary or final determination. Guatemala suggests that the risk of intimidation is greater when the country conducting the investigation is much less developed and considerably less experienced in anti-dumping investigations than the exporting country.

    4.54 Guatemala notes that Article 19.1 of the DSU is consistent with Guatemala's interpretation of the words "matter" and "measure" under the ADP Agreement and the DSU. The only "measures" imposed under the ADP Agreement are provisional measures, final measures, or price undertakings. In the present procedure, Mexico has agreed that the final measure is outside the Panel's terms of reference. There has never been a price undertaking. Consequently, the provisional measure is the only measure on which the Panel may make a recommendation, in accordance with Article 19.1 of the DSU. According to Article 7.1 of the ADP Agreement, a provisional measure may only be imposed if an investigation has been initiated properly. The Panel could recommend, therefore, that Guatemala bring the provisional measure into conformity with the Agreement, but only if it is determined that (a) the provisional measure has a significant impact, in accordance with the provisions of Article 17.4, and (b) the initiation of the investigation is not consistent with Guatemala's obligations under Article 7.1. Mexico does not claim that Guatemala has violated paragraph 1 of Article 7.

    4.55 According to Guatemala, even on the remote hypothesis that the Panel concludes that Guatemala improperly initiated the investigation, it would be legally inadmissible and an open violation of its terms of reference for the Panel to recommend that Guatemala bring the final measure into conformity with the Agreement. Mexico could have made its request for consultations and for the establishment of a panel in relation to the final measure, basing its claim on Article 1 of the ADP Agreement and arguing that the final measure had been applied following an investigation that had not been initiated in accordance with the provisions of the Agreement. This was the approach adopted by Mexico in 1990 when it challenged the measure imposed by the United States against grey portland cement. In the present case, however, Mexico did not request consultations or the establishment of a panel to examine the final measure and did not allege that the final measure violated Article 1 of the ADP Agreement. Article 17 of the ADP Agreement does not regulate the question of recommendations by panels. The Panel should, therefore, interpret the ADP Agreement in light of Article 19 of the DSU. Neither the "investigation" nor the "initiation" constitutes a "measure" that can be brought into conformity with the ADP Agreement, as provided in Article 19 of the DSU.

    4.56 Guatemala submits that if a Member wishes to bring a case against the initiation of an anti-dumping investigation, it must either demonstrate that the provisional measure had a significant impact, or await the imposition of the final measure.23 If the Member considers that the provisional and final measures were not imposed in accordance with the ADP Agreement, then, during the consultations, in its request for the establishment of a panel and in its first submission, it must claim that the provisional measure was imposed in violation of Article 7.1 or Article 1 of the ADP Agreement, and that the final measure was imposed in violation of Article 1 of the ADP Agreement. According to Guatemala, Article 7.1 provides that the provisional measure may only be imposed if an investigation has been initiated in accordance with the provisions of Article 5 of the ADP Agreement. Article 1, on the other hand, states that an anti-dumping measure may only be applied pursuant to an investigation initiated and conducted in accordance with the ADP Agreement. A claim made under Article 1 may relate to the final anti-dumping measure imposed pursuant to an investigation initiated in a manner inconsistent with the Agreement. Guatemala submits that Mexico did not claim or allege violation of Article 1, did not make any claim about the final measure, did not show that the provisional measure had a significant impact, and did not claim or allege violation of Article 7.1. Consequently, Guatemala requests the Panel to reject Mexico's claims relating to the initiation of the investigation.

    4.57 Mexico notes that according to Guatemala, Article 17.4 of the ADP Agreement provides that only three types of measure may be challenged in the anti-dumping context: (a) a provisional measure; (b) a final measure; or (c) a price undertaking. Mexico submits that this assertion is based on two totally incorrect assumptions: (1) that what is referred to the DSB is the measure (not the matter) and (2) that Mexico's claim was based on the first sentence of Article 17.4 when in fact it was based on the second sentence of Article 17.4. Following the same logic as Guatemala, though on a correct basis (i.e. that Mexico lodged its claim under the second sentence of Article 17.4), Mexico submits that the initiation of an anti-dumping investigation constitutes a measure for the purposes of Article 19.1 of the DSU. In the second sentence of Article 17.4 (unlike the first sentence, which mentions two of the three measures referred to by Guatemala), it is established that when a Member "considers that the [provisional] measure was taken contrary to the provisions of paragraph 1 of Article 7, that Member may also refer such matter to the DSB". Since Article 7.1(i) of the ADP Agreement refers explicitly to the initiation of an investigation, Mexico argues that initiation constitutes a part of the matter referred to the DSB. According to Mexico, the only difference between the first and the second sentences is that, for the matter to be submitted to the DSB, the first sentence requires the application of either of the two measures stated (final measure or price undertaking), whereas the second requires only application of the provisional measure. However, in both cases the matter may include any violation of the ADP Agreement, including those related to the initiation of an investigation.

    4.58 Mexico suggests that, from a practical point of view, it is illogical to assume that the initiation of an investigation may not be the subject of the remedy provided for in Article 19.1 of the DSU. Such an assumption would imply that the initiation of any investigation would be exempt from the WTO's dispute settlement mechanism and that the second sentence of Article 17.4 of the ADP Agreement is totally inoperative. If the initiation of an investigation is not regarded as a measure, then it could never be submitted to a panel since the latter would be unable to make any recommendations thereon, even though Article 17.4 of the ADP Agreement allows any Member to refer such a matter to the DSB. Furthermore, if the second sentence of Article 17.4 referred only to provisional measures, it would be inoperative because the time needed for consultations, the establishment of a panel and the panel report would in all cases exceed the maximum period allowed between the preliminary and final determinations in an anti-dumping investigation. In other words, by the time the panel's findings on a provisional measure were issued, the measure would have been replaced by a definitive measure which could not have been examined by the panel because it was issued after the panel was established. Mexico submits that both Article 17 of the ADP Agreement and Appendix 2 and Article 7.1 of the DSU refer to the "matter", and not the "measures", as in cases other than anti-dumping. Although the initiation of an anti-dumping investigation constitutes a "measure" for the purposes of Article 19.1, it remains a "matter" for the purposes of Article 17.4 of the ADP Agreement and Article 7.1 of the DSU. "Matter" is a broader concept than "measure", and includes the latter without coming into contradiction with it. Accordingly, Mexico submits that Article 19.1 of the DSU applies to the case under examination.

    4.59 Guatemala notes that Mexico's complaint was brought by virtue of the second sentence of Article 17.4 of the ADP Agreement, because the "matter" (i.e. the "claims" referring to the measure specified in the application) mentioned in Article 17.4 is the same as the "matter" that was the subject of the request for consultations under Article 17.3. Mexico admits that the "matter" on which the consultations were held did not include the claims concerning the final measure, because at the time the final measure had not been issued. As long as the final measure had not been issued, there was no way to comply with the requirements in Article 17.4 whereby the Member that requested consultations in respect of that matter should consider that the consultations "have failed to achieve a mutually agreed solution," simply because the final measure was not part of the consultations and is not one of the claims included in the matter submitted to the Panel for examination. In short, only the claims which challenge the provisional measure constitute the matter at issue in this case, and consequently, only the second sentence of Article 17.4 is relevant to the request for the establishment of this Panel.

    4.60 Guatemala also argues that it is not true that the initiation of the investigation and the provisional measure could not be the subject of consultations or could not properly be examined by a panel. Guatemala considers both to be possible, provided the complaining Member meets the prerequisites laid down in the second sentence of Article 17.4 of the ADP Agreement. In other words, once significant impact has been established, if the complaining party invokes the violation of Article 7.1 (concerning the initiation), it is possible to hold consultations under Article 17.3 and then to request the establishment of a panel to examine the provisional measure. If the examination is favourable to the complainant, the panel may recommend that the provisional measure be brought into conformity with the Agreement; in short, this would be the means by which to remedy the significant impact claimed by the complainant. In fact, the panel may remedy the repercussion caused by a provisional measure even where a Member has not challenged the final measure, and may also do so when the Member has challenged both the provisional measure and the final measure and the panel concludes that the final measure was issued in conformity with the Agreement.

    4.61 Guatemala argues that while Mexico is concerned that the examination of the provisional measure might be inoperative when the Panel produces its report, and is therefore insisting that the initiation of the investigation should be given the status of a measure that can be challenged in itself, the fact is that the ADP Agreement does provide for the examination of a provisional measure when its trade impact so justifies. In this particular case, Mexico was somewhat hasty in bringing the dispute when the provisional measure was not causing an impact that justified such premature action, undoubtedly in an unsuccessful attempt to prevent Guatemala from imposing the final measure. Moreover, Mexico's concern confirms that the challenge of a provisional measure is exceptional and that the exporting Member should only challenge a provisional measure when its impact is such that it simply cannot await the final measure. If Mexico, in these proceedings, had invoked and demonstrated significant impact, and it did not, the way would be clear for it to invoke and demonstrate the violations allegedly committed by the investigating authority under Article 7, paragraph 1.

    4.62 Guatemala maintains that Article 17.4 of the ADP Agreement identifies in a concrete and exhaustive manner the measures that can be subject to examination: the provisional measure, the price undertaking and the final measure. Guatemala submits that Article 1 of the ADP Agreement supports its position that the initiation of the investigation is not a measure. Indeed, within the same sentence Article 1 of the ADP Agreement speaks of the "anti-dumping measure" and stipulates that the said measure shall be applied pursuant to investigations initiated. What is more, if the initiation were a "measure," Article 17.4 would clearly indicate the necessary conditions for referring the "initiation measure" (as part of the "matter" on which the consultations were held) to the DSB. The fact is, Article 17.4 does not in any way provide for the establishment of a panel to examine the initiation of an investigation.

    4.63 Mexico also notes that Article 17.3 of the Spanish version of the ADP Agreement establishes clearly that if a Member considers that an "acci髇", not a "measure", by another Member nullifies or impairs any benefit accruing to it directly or indirectly under the ADP Agreement or that the achievement of any objective is being impeded, that Member may request consultations with a view to reaching a mutually satisfactory resolution of the matter. Mexico states that it is plain from this text that nowhere does the ADP Agreement establish that only measures may be the subject of consultations. The ADP Agreement establishes that consultations may concern any action by another party which violates the rights of the exporting party, i.e. actions both at the initiation stage and in the course of the investigation. Consequently, in the present dispute and for the purposes of Article 17 of the ADP Agreement and Article 7.1 of the DSU, Mexico submits that the term "action"/"acci髇" should be used instead of the "measures" used by Guatemala. According to Mexico, to do otherwise would be to distort the intent of the authors of both these instruments in drafting the above Articles.

    4.64 Guatemala, in noting Mexico's argument concerning the word "acci髇", observes that the terminological difference pointed out by Mexico is simply a superficial difference without substantive effect. In any case, for the purposes of interpretation Guatemala refers to Article 33.1 of the Vienna Convention, which stipulates that when a treaty has been authenticated in two or more languages, the text is equally authoritative in each language, unless the treaty provides or the parties agree that, in case of divergence, a particular text shall prevail. The Marrakesh Agreement Establishing the WTO and the Multilateral Agreements in Annex thereto were produced in Spanish, French and English, with the indication that each text was equally authentic. Thus, in order to interpret the meaning, or rather the lack of meaning, of the word "acci髇", the Panel may, in its examination of Article 17.3 of the ADP Agreement, refer to the English and French versions. In this regard, Guatemala cites United States - Procurement of a Sonar Mapping System24, in which the panel used the French and Spanish texts of the Tokyo Round Code on Government Procurement to interpret the English version. Moreover, Article 33.3 of the Vienna Convention stipulates that "the terms of the Treaty are presumed to have the same meaning in each authentic text". Thus, the word "acci髇" used in the Spanish version, which does not appear in the English and French versions, is a mere anomaly without relevance to the case at issue. Without prejudice to this fact, it is possible that the translator may have included the word "acci髇" as a way of rounding out the concept without actually contradicting the other language versions since the "action" of the investigating authority will ultimately acquire concrete form or expression in the adoption of measures. According to Guatemala, the three language versions refer to measures of the ADP Agreement. This conclusion is supported by Article 33.4 of the Vienna Convention, which stipulates that the meaning which best reconciles the texts, having regard to the object and purpose of the Treaty, shall be adopted. Article 31 of the Vienna Convention also stipulates that a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. Guatemala notes that Article 17.3 of the ADP Agreement and Article 4.4 of the DSU establish that only the "measure" identified in the application and the claims relating to that measure which make up the "matter at issue" may be the subject of consultations. According to Guatemala, therefore, the word "acci髇" in the Spanish version is meaningless.

    4.65 Mexico notes Guatemala's argument that to be able to bring the initiation of an investigation before a panel, the complaining Member must either contest the final measure pursuant to Article 1, or contest the provisional measure pursuant to Articles 1 or 7.1. According to Mexico, this argument is unjustified from the point of view of both the substance and the accuracy of the reasoning. As regards substance, Mexico contends that claims concerning the initiation of an investigation must be made in respect of the provisions of the ADP Agreement concerning the initiation of investigations, and not in respect of Article 7. Article 7, paragraph 1(i) simply recalls that one of the conditions for applying provisional measures is the initiation of the investigation in accordance with the provisions of Article 5 of the Agreement. According to Mexico, Article 7.1(i) does not itself contain the substantive provisions which define a challenge to the initiation of an investigation. Mexico submits that the accuracy of Guatemala's argument is also faulty, since Mexico did indeed cite Article 7 of the ADP Agreement in the request for the establishment of a panel, as well as in the other documents submitted by Mexico to the Panel.

    4.66 Guatemala contends that Mexico's request for establishment of a panel does not cite either the first or second sentences of Article 17.4 of the ADP Agreement, and does not cite paragraph 1 of Article 7. The ordinary meaning of the text clearly indicates that in the case of a final measure or a price undertaking, the drafter is not imposing, as a prerequisite, either a trade impact or the violation of Article 7.1, while any dispute concerning a provisional measure is, by its exceptional character, subject to those two requirements. In its request for establishment of a panel, Mexico did not bring any claim based on paragraph 1 of Article 7 of the ADP Agreement, and this omission cannot be corrected in its written submissions to the Panel. Because it failed to cite these legal provisions or invoke the violation of Article 7.1 in compliance with the prerequisites laid down in Article 17.4 of the ADP Agreement, Guatemala requests that the Panel reject Mexico's complaint.

    4.67 Guatemala further states that Mexico recognized in its rebuttal that "the final measure was not included in the request for the establishment of a panel" and also recognized that the final measure "in itself is not challenged."25 Consequently, even if Mexico had invoked the violation of Article 1 on the grounds that the initiation did not comply with the legal requirements, the Panel would not have the mandate to examine the final measure. Moreover, Guatemala notes that Mexico's oral submission at the First Meeting stated that "Mexico did not in any way request that the final determination of Guatemala's anti-dumping investigation should be considered by this Panel. The reason being that the final determination was not a topic discussed in the consultations held with Guatemala." In other words, if this Panel were to rule on the final measure, it would be violating its obligation to examine only those measures in respect of which there has been an opportunity to achieve a mutually agreed solution.

    5. Whether certain claims were in the request for establishment and are before the Panel.

    4.68 Guatemala asserts that seven claims were not included in Mexico's request for the establishment of a panel, and therefore fall outside the Panel's terms of reference. Guatemala's objections relate to Mexico's claims:

    - that Guatemala failed to give adequate consideration to the increase in imports from Cruz Azul;

    - that Guatemala failed to give adequate consideration to the fall in the price of the domestic product;

    - that Guatemala failed to give adequate consideration to the loss of customers;

    - that Guatemala failed to give adequate consideration to the likelihood of an imminent increase in Mexican exports to Guatemala;

    - that Guatemala violated Articles 6.1, 6.2 and 6.8 of the ADP Agreement by not accepting the technical accounting evidence regarding the normal value and the export price charged by the exporter during the original investigation;

    - that Guatemala violated Articles 6.5.1 and 6.5.2 of the ADP Agreement by accepting confidential information from Cementos Progreso without demanding a public version thereof, or the reasons why confidential treatment was required; and

    - that Guatemala violated Articles 6.1 and 6.2 of the ADP Agreement by failing to establish specific time-limits for Cruz Azul to submit information in defence of its interests.

    4.69 According to Guatemala, the ADP Agreement contains special provisions for the settlement of disputes which are applicable solely to anti-dumping cases. The rules of the Tokyo Round Anti-Dumping Code - which preceded the ADP Agreement, and which contained similar provisions on this subject - were interpreted by panels to mean that, in the request for the establishment of a panel in a dispute concerning anti-dumping, the complainant was obliged to describe the individual claims in more specific detail than was normally required under the general provisions of the GATT dispute settlement system. Thus, Guatemala recalls that the Appellate Body relied on the following interpretation adopted by panels under the Tokyo Round Anti-Dumping Code:

    "The "matter" referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference. We agree with the approach taken in previous adopted panel reports that a matter, which includes the claims composing that matter, does not fall within a panel's terms of reference unless the claims are identified in the documents referred to or contained in the terms of reference."26

    4.70 Guatemala argues that under the Tokyo Round Anti-Dumping Code, panels established a three-step process of dispute settlement in which panel examination of a matter, and the individual claims of which a matter is composed, would be preceded by consultations concerning that same matter and conciliation concerning that same matter.27 In accordance with the decision of the Appellate Body in Brazil - Measures Affecting Desiccated Coconut28, Guatemala maintains that the "matter" referred to a panel is the sum total of all the "claims" raised in the document in which the establishment of a panel was requested.29 Moreover, Guatemala asserts that a "claim" is defined as "the specification of the particular legal and factual basis upon which it was alleged that a provision of the Agreement had been breached ... there could be more than one legal basis for alleging a breach of the same provision of the Agreement and ... a claim in respect of one of these would not also constitute a claim in respect of the other".30

    4.71 According to Guatemala, panels convened to deal with anti-dumping cases have considered that under the Tokyo Round Anti-Dumping Code, the terms of reference of a panel must satisfy two objectives: "[1] definition of the scope of a panel proceeding, and [2] provision of notice to the defending Party and other Parties that could be affected by the panel decision and the outcome of the dispute."31 In order to satisfy those objectives, each individual claim composing the matter must be identified in the written communication(s) referred to or contained in the terms of reference of the panel. In other words, individual claims would have to be specified in the document requesting the establishment of a panel.32 In support of this position, Guatemala stresses that the document defining the terms of reference is prepared by the complainant.33 Thus, in order for an individual claim to be examined by a panel, it must fall within the latter's terms of reference and to that end must have been specifically identified in the request for the establishment of a panel.

    4.72 Guatemala submits that, for a claim to be specifically identified, the complaining party "should ... have identified during conciliation and in its request for establishment of a panel the action or factual situation allegedly giving rise to an inconsistency with the Agreement and the obligation under the Agreement that allegedly was violated."34 It is not enough for a panel to say that the matter "can reasonably be interpreted" as amounting to a claim covered by the written request for consultations or the request for the establishment of a panel.35 Guatemala recalls EC - Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil, in which the panel:

    "considered that it was not sufficient that a contention simply 'can reasonably be interpreted' as amounting to a claim, as that implied that there could be indeterminacy or ambiguity regarding the ambit of a claim. This would, in the view of the Panel, run counter to the fundamental purpose of the terms of reference, which was to give advance notice to the defendant and to third parties of the claim at issue. This purpose could only be effectively served if there was no ambiguity regarding the ambit of the claim at issue. The Panel considered that, in order to ensure this, a claim had to be expressly referred to in [the document in which the establishment of a panel was requested] in order to be within its terms of reference. The Panel accordingly dismissed Brazil's argument on this point."36

    4.73 Guatemala asserts that, in EC - Imposition of Anti-Dumping Duties on Audio Tapes and Cassettes originating in Japan, the panel similarly rejected the complaining party's argument that consideration should be given to "how its interests might be affected" by the panel's failure to refer to specific claims. Guatemala notes that the panel "did not consider that such an assessment would be either appropriate or feasible", and stated that it could not understand the basis on which a panel could after the fact consider whether certain claims might have been resolved in previous stages of the dispute settlement process had those claims been raised during those stages of the process. Nor did that panel consider that, after the fact, a panel would have a basis on which to consider whether the rights of third parties to protect their interests through participation in the panel process were jeopardized by the failure of a complainant to raise a claim at the time it requested the establishment of a panel.37

    4.74 Guatemala considers that in EC - Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil, the panel found that nowhere in the request for the establishment of a panel submitted by Brazil was there any reference to the EC having made an incorrect determination that certain domestic sales were not in the ordinary course of trade, and on that basis the panel rejected Brazil's argument concerning the ordinary course of trade.38 Guatemala recalls that the panel also rejected Brazil's argument that the ordinary course of trade claim could "reasonably" be interpreted as being covered by the document in which the establishment of a panel was requested.39

    4.75 According to Guatemala, in United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, the panel considered that its terms of reference did not extend to Norway's claim that the United States was denying Norway national treatment in accordance with Article III of the GATT 1947.40 Guatemala recalls that the panel pointed out that Norway "did not refer to this claim, however characterized" in its request for the establishment of a panel.41 According to Guatemala, Norway argued that its claim was included in the request for the establishment of a panel through a reference to the denial by the United States of "equitable and open procedures".42 The panel found that, while Norway's request identified four specific aspects of the claim regarding the lack of "equitable and open procedures", these did not include denial of national treatment.43 The panel therefore considered that "the claim in question was not identified in [Norway's request for the establishment of a panel], and thus reasonable notice had not been provided to the defending party nor to third parties that the claim would be raised in this dispute".44 Guatemala notes that the panel also rejected Norway's argument that the "matter" before the panel consisted of the imposition of anti-dumping duties. On the contrary, the "matter" consisted of the specific claims stated by Norway in those documents. Consequently, Guatemala notes that the panel concluded that it could not examine the merits of Norway's claim regarding the denial of national treatment because that claim was not within its terms of reference.45

    4.76 Guatemala argues that, in EC - Anti-Dumping Duties on Audio Tapes and Cassettes Originating in Japan, the panel rejected the claim by Japan that the EC's methodology for selecting the export models to be used in performing a comparison of price undercutting was within the terms of reference of the panel46:

    "In the view of the Panel, a statement that the EC's undercutting methodology was `defective' and contained `arbitrary and prejudicial elements', without any identification of the element or elements of the EC's methodology deemed to be inconsistent with the Agreement, did not identify the action or factual situation allegedly giving rise to an inconsistency with the Agreement with sufficient particularity to allow a potential third party to decide whether its interests might be affected such that it would exercise its right to participate in the proceeding."47

    4.77 Guatemala submits that, by virtue of Article 31 of the Vienna Convention and the 1994 Marrakesh Agreement, a panel must be guided by the interpretation adopted by previous panels established under the Tokyo Round Anti-Dumping Code when interpreting the degree of specificity required in a request for the establishment of a panel under Article 17 of the ADP Agreement. Guatemala states that this is especially so given that the dispute settlement provisions of the Tokyo Round Anti-Dumping Code are virtually identical to those contained in the ADP Agreement. As was stated by the panel in EC - Regime for the Importation, Sale and Distribution of Bananas, Guatemala argues that the cases dealt with under the Tokyo Round Anti-Dumping Code are "of limited relevance in the interpretation of the terms of Article 6.2 of the DSU [because] the Tokyo Round Anti-Dumping Code had different rules for the initiation of panel procedures than were applicable in the case of GATT 1947 panels".48

    4.78 Guatemala asserts that the panel in EC - Regime for the Importation, Sale and Distribution of Bananas49, and the Appellate Body in earlier decisions found that, under Article 3.2 of the DSU, the starting point for the interpretation of the provisions of international treaties is Articles 31 and 32 of the Vienna Convention.

    4.79 Guatemala recalls in addition that Article XVI of the Marrakesh Agreement establishing the World Trade Organization provides that:

    "Except as otherwise provided under this Agreement or the Multilateral Trade Agreements, the WTO shall be guided by the decisions, procedures and customary practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies established in the framework of GATT 1947".

    4.80 According to Guatemala, the panel in EC - Regime for the Importation, Sale and Distribution of Bananas also observed that "the nature of anti-dumping cases is different from this case".50 In disputes relating to anti-dumping measures, panels are required to review the factual and legal determinations of investigations carried out by the domestic authorities as opposed to the laws or regulations implemented by the national legislative authorities or administrative bodies. Claims under the GATT 1947 (or the GATT 1994) and other covered agreements may refer to any number of measures potentially inconsistent with a Member's obligations. On the other hand, Guatemala submits that anti-dumping cases involve only three possible measures: provisional measures, price undertakings, or a final measure. In accordance with the interpretations given by panels set up under the Tokyo Round Anti-Dumping Code, when interpreting rules similar to those contained in Article 17 of the ADP Agreement, Guatemala therefore submits that a panel must require a greater degree of specificity in the identification of claims in a request for the establishment of a panel under the ADP Agreement.

    4.81 Guatemala notes that in its request for the establishment of a panel, Mexico cited the following inconsistencies with the ADP Agreement in connection with the threat of injury:

    (i) affirmative determination of the threat of injury in violation of the guidelines laid down in the ADP Agreement;

    (ii) attempt to equate the accumulation of inventories of raw material (clinker) with inventories of the product under investigation (cement) for the purpose of determining the threat of injury;

    (iii) attributing the threat of injury to the Guatemalan domestic industry to imports from Mexico when it was caused by other factors (e.g. increase in inventories, decline in sales, kiln stoppages, inter alia).

    4.82 Guatemala asserts that it might be argued that Mexico did not make any proper claim concerning these alleged inconsistencies because it did not assert the alleged violation of any specific provision or article of the ADP Agreement. If, for the sake of argument, it is assumed that the request made by Mexico for the establishment of a panel could be interpreted in the broadest sense to include an alleged violation of Article 3, Guatemala suggests that Mexico would have had to identify the following hypothetical claims relating to the preliminary determination of threat of injury in order to bring the issue before a panel:

    Claim 1: Guatemala's action is inconsistent with Article 3 because it made a preliminary affirmative determination of threat of injury after attempting to compare the accumulation of inventories of raw material (clinker) with inventories of the product investigated (cement);

    Claim 2: Guatemala's action is inconsistent with Article 3 because it made a preliminary affirmative determination of threat of injury by improperly considering that the increase in inventories was caused by imports from Mexico and not by other factors;

    Claim 3: Guatemala's action is inconsistent with Article 3 because it made a preliminary affirmative determination of threat of injury by improperly considering that the decline in sales was caused by imports from Mexico and not by other factors; and

    Claim 4: Guatemala's action is inconsistent with Article 3 because it made a preliminary affirmative determination of threat of injury by improperly considering that the stoppage of the kilns was caused by imports from Mexico and not by other factors.

    4.83 Guatemala notes that Mexico made six claims in its first submission to the Panel because, in Mexico's view, Guatemala did not consider properly the factors listed in Article 3.7 of the ADP Agreement when making a preliminary determination of threat of injury. The six claims refer to:

    Claim (a): Increase in imports;

    Claim (b): Accumulation of inventories and underutilization of plant capacity;

    Claim (c): Decrease in sales;

    Claim (d): Decrease in the domestic producer's prices;

    Claim (e): Loss of customers; and

    Claim (f): Excess plant capacity in the exporting firm and demand conditions in the Mexican market.

    4.84 Guatemala asserts that claim (b) in Mexico's first submission corresponds to hypothetical claims 1, 2 and 4 in the request for the establishment of a panel; claim (c) corresponds to hypothetical claim 3 in the request for the establishment of a panel. Thus, according to Guatemala, claims (a), (d), (e) and (f) in Mexico's first submission do not correspond to any of the claims raised directly or indirectly in its request for the establishment of a panel and should therefore be rejected because they are outside the Panel's terms of reference. The claims relating to the final stage also fall outside the Panel's terms of reference because in its request for the establishment of a panel Mexico did not directly or indirectly identify any claim concerning the utilization of the technical accounting evidence, the use of confidential information, or the failure to establish specific time-limits. Guatemala considers that the reasons for which Mexico did not identify these claims in its request for the establishment are not relevant to the determination to be made by this Panel concerning their inclusion in the terms of reference. The ADP Agreement, the DSU and the practice followed by panels established under the GATT and the WTO (including the Appellate Body) do not make any reference to reasons that might justify the examination of claims that are not duly identified in the terms of reference of a panel.

    4.85 Mexico considers that it is not possible - nor is it a requirement of the ADP Agreement or the DSU - to list the arguments of the dispute one by one in the request for establishment, and even less possible to relate each and every such argument to the provision with which it is allegedly inconsistent. That would imply going far beyond what is required by Article 6.2 of the DSU. This Article only requires the applicant to "identify the specific measures at issue", and to provide "a brief summary of the legal basis of the claim sufficient to present the problem clearly".

    4.86 Mexico argues that it submitted its request for the establishment of a panel in conformity with Article 6.2 of the DSU, since the request indicated how the benefits accruing to Mexico had been nullified and impaired by Guatemala, and that consultations had been held without reaching a mutually satisfactory resolution. At the same time, the request identified the specific matters at issue and provided a brief summary of the legal basis of the claims in order to present the problem clearly.

    4.87 Mexico submits that, in the case in question, the reference to "specific measures at issue" in Article 6.2 of the DSU does not apply since, according to Article 17.4 of the ADP Agreement and Appendix 2 of the DSU, what is important is the "matter" referred to the DSB and not the measures as such. Since Mexico's request for the establishment of a panel not only refers to all the matters at issue (initiation, preliminary determination, and final stage of the proceeding) but also includes a brief summary of the legal basis of the claim that is sufficiently clear to present the problem clearly, Mexico notes that the request was accepted and approved by the DSB.

    4.88 Guatemala suggests that Mexico's argument concerning the non-application of parts of Article 6.2 of the DSU is the result of Mexico's repeated confusion of the words "matter" and "measures", a confusion which is avoidable given the clarity of the ADP Agreement and the conclusions of the Appellate Body. Contrary to what Mexico claims, the initiation, the preliminary determination and the final stage of the proceedings mentioned in its request for the establishment of a panel are not the "matters at issue". According to Guatemala, the only "matter" at issue is the matter consisting of the individual claims addressing the provisional measure, since this was the only measure that Mexico identified in its request. Moreover, Guatemala suggests that Mexico's arguments are irrelevant for the purpose of determining whether Mexico identified the individual claims specifically enough in its request for establishment. Article 6.2 of the DSU requires the complaining Member to include in its request for the establishment of a panel the specific identification of the anti-dumping measure at issue and of the claims making up the legal basis of the challenge against that measure. In other words, the requirement for the complainant in an anti-dumping case to present its claims specifically has nothing to do with the requirement in Article 6.2, which refers to the obligation to identify the measure at issue.

    4.89 According to Mexico, it follows from the request for the establishment of a panel that Mexico's claim specifically covers the fact that the initiation and conduct of the investigation, like the preliminary determination of threat of injury, contravened the relevant provisions of the ADP Agreement (WT/DS60/2, paragraph (b)(ii)), and that in the final stage of the proceeding there were various violations of the Mexican exporter's rights of defence in contravention of Article 6 of the ADP Agreement (WT/DS60/2, paragraph (c)(i) to (iv)). Mexico argues that detailing and developing each of the paragraphs and subparagraphs of the request for the establishment of a panel would have meant going far beyond the "brief summary of the legal basis of the complaint" required by Article 6.2 of the DSU. Mexico notes that in each case details were developed in Mexico's first submission to the Panel.

    4.90 Mexico asserts that, according to Article 7 of the DSU, the Panel's terms of reference are to examine "the matter referred to the DSB", which goes beyond the limited interpretation which Guatemala is endeavouring to give to the Panel's terms of reference.

    6. Whether certain claims were raised in the request for consultations and are before the Panel

    4.91 Guatemala submits that two of Mexico's claims should be rejected by the Panel because they were not raised either directly or indirectly in Mexico's request for consultations. These claims are that:

    - Guatemala violated Article 5.2 of the ADP Agreement by initiating the investigation without having received information on imports from the Directorate-General of Customs; and

    - Guatemala violated Article 6.1.3 of the ADP Agreement by failing to provide either Cruz Azul or Mexico with a copy of the full text of the application as soon as Guatemala initiated the investigation.

    4.92 Guatemala relies on its earlier argument that panels under the Tokyo Round Anti-Dumping Code established a three-step process for the settlement of disputes in anti-dumping cases concerning "the individual claims of which a matter is composed, in which panel examination of a matter would be preceded by consultations concerning that same matter and conciliation concerning that same matter". Although the conciliation phase requirement was eliminated during the Uruguay Round, Guatemala asserts that "the justification for this approach was not limited to the conciliation issue".51

    4.93 According to Guatemala, anti-dumping cases have unique characteristics and are subject to special dispute settlement rules under Article 17 of the Agreement. In its interpretation of similar rules under Article 15 of the Tokyo Round Anti-Dumping Code, the panel in United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, observed that:

    "The parties to a dispute were required to consult and thereby provide at least an opportunity for reaching a mutually satisfactory resolution of the matter in dispute. At the conciliation phase, during the Committee's review of the matter, the parties to the dispute were required to go further and make their best efforts to reach a mutually satisfactory solution throughout the period of conciliation. The Panel therefore considered that the Agreement provided that before a party to a dispute could request a panel concerning a matter, the parties to the dispute had to have been given an opportunity to reach a mutually satisfactory resolution of the matter. This condition would not be meaningful unless the matter had been raised in consultations and conciliation."52

    Guatemala recalls that the panel stated that these conclusions:

    "were particularly appropriate in view of the nature of disputes concerning anti-dumping actions" ... The requirement to engage in consultations and conciliation served an essential purpose in clarifying the facts and arguments in dispute, and framing the dispute concerning the matter in terms which a panel would be best equipped to resolve.53

    4.94 Guatemala argues that, in accordance with the interpretations given by panels under the similar rules of the Tokyo Round Anti-Dumping Code, individual claims must be presented at the consultation stage in order to provide the prospect of "reaching a mutually satisfactory solution" in accordance with Article 17.3 of the ADP Agreement. Accordingly, the Panel should reject the two claims that Mexico failed to raise either in its request for consultations, dated 15 October 1996, or in its arguments relating to the consultations dated 30 October 1996, or in its list of questions dated 9 January 1997.

    4.95 According to Mexico, Guatemala's argument is entirely without validity since the Panel's terms of reference are determined not by the scope of the consultations but by the request for the establishment of a panel. Since both claims are contained in paragraph (a) of document WT/DS60/2, it is clear that they form an integral part of the Panel process. Furthermore, Mexico submits that the consultations with Guatemala concerned all the issues that Mexico raised in the request for the establishment of a panel. Mexico asserts that, in the consultations, it explained point by point to Guatemala why Mexico considered that the investigation should never have been initiated, and pointed out other weaknesses that had emerged in the course of the investigation up until the date of the consultations (9 January 1997).

    7. Whether certain new claims were raised during course of Panel proceedings and are before the Panel

    4.96 Guatemala asserts that only at the first substantive meeting Mexico claimed for the first time that the Ministry had improperly made the preliminary affirmative determination of threat of injury because it did not take into account the fact that from 1994 to 1995 the value of Cementos Progreso's sales increased by 21.9% and its net profits rose by 22.8% in nominal Quetzales, not adjusted for inflation. Guatemala submits that the Panel has no mandate to examine Mexico's claim concerning the increase in the value of sales and profits because it is outside the Panel's terms of reference. Mexico did not make this claim in its request for the establishment of a panel, nor in its first written submission, nor in the written text of its oral submission. Guatemala suggests that, in conformity with the practice followed in the GATT and the WTO, the complainant Member is prevented from making new claims other than those included in its first written submission. Consequently, the Panel has no mandate to consider this claim because Mexico did not include it in its first written submission.

    4.97 Guatemala surmises that Mexico may respond that its "claim" regarding the increase in the value of sales and profits could more accurately be called an "argument", and that a Member is not obliged to identify all its "arguments" in its request for the establishment of a panel or in its first submission. Nevertheless, Guatemala submits that Mexico's assertion concerning the increase in the volume of sales and profits should be considered a claim and not an argument. According to Guatemala, Mexico cannot simply "claim" in its request for establishment that Guatemala violated the ADP Agreement by making a preliminary affirmative determination of threat of injury and then put forward any plausible "argument" at any stage of the procedure in order to substantiate the alleged violation. Mexico must explain the legal and factual grounds for the alleged violation. In this particular case, Mexico claims that Guatemala violated the ADP Agreement by making a preliminary affirmative determination of threat of injury when the value of Cementos Progreso's sales and profits from 1994 to 1995 had increased. Guatemala suggests that for systemic reasons, other Members would be interested in the issue whether, according to Article 3.7 of the ADP Agreement, the investigating authority must take into account the value of sales and profits, because Article 3.7 does not make any reference to these. Mexico's failure to make its claim properly deprives interested third Members of the opportunity to examine such a claim.

    4.98 Mexico disputes Guatemala's argument that Mexico cannot simply claim a violation in the request for establishment and then put forward any plausible argument to substantiate the allegation, and that Mexico must explain the legal and factual grounds for the alleged violation in the request for the establishment of a panel. Mexico argues that according to established procedures, claims are submitted in the request for the establishment of a panel and the arguments are submitted to the panel. Mexico submits that the Report of the Appellate Body in the EC - Regime for the Importation, Sale and Distribution of Bananas is clear in this respect:

    "We accept the Panel's view that it was sufficient for the Complaining Parties to list the provisions of the specific agreements alleged to have been violated without setting out detailed arguments as to which specific aspects of the measures at issue relate to which specific provisions of those agreements. In our view, there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel's terms of reference under Article 7 of the DSU, and the arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties."54

    4.99 Guatemala claims that Mexico raised another new claim in its second submission to the Panel, i.e. that the Ministry made a preliminary determination using partial data that extended beyond the investigation period. Guatemala states that Mexico did not raise any claim regarding the extension of the period of investigation in connection with the preliminary determination in its request for establishment. The request only refers to the extension of the investigation period, investigated firms and investigated product ten months after the initiation of the investigation. According to Guatemala, the timing of this claim excludes it from the terms of reference of this Panel.

    4.100 Guatemala also notes that Mexico relies on Article 1 of the ADP Agreement in its second submission to the Panel in order to demonstrate that revocation of anti-dumping duties constitutes an appropriate remedy in the present case. Guatemala states that since Mexico did not raise a claim under Article 1 either during the consultations or when requesting the establishment of a panel, any claim relating to Article 1 is outside the Panel's terms of reference. The Panel therefore does not have the authority to verify whether the initiation of the investigation or the application of an anti-dumping measure was inconsistent with Article 1 of the ADP Agreement.

    B. Standard of Review

    4.101 Guatemala submits that the Panel's examination of the present dispute is circumscribed by the standard of review set forth in Article 17.6 of the ADP Agreement.55 Guatemala notes that during the final stages of the Uruguay Round negotiations, it was decided to include a provision in the ADP Agreement establishing a standard to be applied by panels in examining the facts of a case and interpreting the relevant legal provisions applied by the investigating authorities of the Members. This standard of review applicable to anti-dumping cases is set forth in Article 17.6 of the ADP Agreement. Guatemala notes that the ADP Agreement is the first legal instrument which provides specifically for a standard of review. Article 17.6(i) establishes the standard of review applicable to a panel's examination of the investigating authorities' evaluation of the facts in an anti-dumping investigation. Guatemala argues that, according to one commentator, Article 17.6(i):

    "encapsulates a notion developed in several panel reports that when a panel examines the factual conclusions of national investigating authorities it should act as a "review" body and should not substitute its own factual assessment for that of the authorities unless the latter is seriously flawed".56

    4.102 According to Guatemala, the same commentator considered that the standard of review of the establishment of facts as set forth in Article 17.6(i) was consistent with the panel reports delivered during the closing stages of the Uruguay Round.57 Guatemala recalls for example, that in United States - Measures Affecting Imports of Softwood Lumber from Canada the panel ruled that:

    "It was the role of the national investigating authority in the importing country, not that of the Panel, to make the necessary determinations in connection with the initiation of a countervailing duty case. ... The role of the Panel was thus not to determine whether there was sufficient evidence for initiation but to review whether the national authorities in the importing country had made the initiation determination in accordance with relevant provisions of the Agreement."58

    4.103 Guatemala considers that Article 17.6(ii) of the ADP Agreement establishes the standard of review applicable to the examination by the panel of an investigating authority's interpretation of the Agreement. According to Guatemala, Article 17.6(ii) establishes that the Panel must respect the investigating authority's interpretation of the ADP Agreement, provided such interpretation is permissible under the customary rules of interpretation of public international law.

    4.104 According to Guatemala, the main purpose of the standard of review contained in Article 17.6 is to ensure that panels do not go beyond the role assigned to them by international law of reviewing the evaluation of facts by a Member or that Member's interpretation of the provisions of the ADP Agreement, to the detriment of the sovereignty of that Member or its expectations as to conformity with the ADP Agreement. Guatemala suggests that preservation of the sovereignty of a Member and maintenance of that Member's expectations are all the more important now that the WTO dispute settlement system is effectively binding for the parties. Thus, Guatemala submits that the Panel must respect the evaluation of facts contained in the Ministry's determinations, even though the Panel might have reached a different conclusion. The Panel must also respect Guatemala's permissible interpretations of the ADP Agreement in accordance with the customary rules of interpretation of public international law.

    4.105 Guatemala notes that Mexico has alleged that Guatemala carried out "a partial and subjective" establishment of the facts relating to the factors set out in Article 3.7 of the ADP Agreement. Mexico has not, however, cited Article 17.6(i) of the ADP Agreement, and has failed to provide any proof of its allegations. Guatemala endorses the United States' argument that a party attempting to prove that an investigating authority's determination is not 'unbiased' within the meaning of Article 17.6(i) must present positive evidence showing that the decision was influenced by bias or prejudice; mere allegations and conjecture cannot discharge the challenging party's burden on this issue. Guatemala suggests that the United States' position is consistent with the findings of the panel in EC - Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil in the sense that, in the absence of other evidence, it cannot be stated that a decision to base a determination on one set of data rather than on other, different, data signifies that there is bias or lack of objectivity.59

    4.106 Guatemala endorses the United States' view that the factual evidence before the Ministry is described at length in Guatemala's preliminary determination and first submission to this Panel. According to Guatemala, Mexico's claims regarding the threat of injury factors reveal that Mexico has only offered an alternative reading of the evidence or, in some cases, only suggested that an alternative reading might be possible. Mexico has not demonstrated that an alternative finding is necessitated by the factual record.

    4.107 According to Guatemala, even assuming that Mexico had claimed that the Ministry's preliminary determination was not "unbiased and objective" as required by Article 17.6(i) of the ADP Agreement, Mexico did not provide any proof to substantiate its claim. On the contrary, it simply asked the Panel to review once again Guatemala's establishment of the facts and to arrive at a different finding, which is contrary to the text and the intention of Article 17.6(i) of the ADP Agreement.

    4.108 Guatemala submits that Mexico provides a tendentiously incorrect analysis of the matter by not drawing a proper distinction between the standard of review for the establishment of the facts (Article 17.6(i)) and the standard of review applicable to the interpretation of the legal provisions of the Agreement (Article 17.6(ii)). The standard of review applicable to the facts and the standard of review for the interpretation of the law are quite different. Guatemala suggests that Mexico tries to ignore the distinction between subparagraph (i) and subparagraph (ii), and tries to convince the Panel that the "permissible interpretations" mentioned in Article 17.6(ii) of the ADP Agreement refer to the evaluation of the evidence, when they clearly refer to the interpretation of the legal provisions. Guatemala states that the Ministry's establishment of the facts was unbiased and objective, and only facts that had been properly established were accepted; in no case was any other material used. Guatemala requests that the Panel should not invalidate Guatemala's evaluation of the facts. As regards the separate subject of the interpretation of the ADP Agreement, Guatemala submits that it complied with the provisions of the ADP Agreement, and where various interpretations were possible, it always took special care to ensure that its interpretations were permissible. Thus, Guatemala requests that the Panel applies the customary rules of public international law and, given the existence of various permissible interpretations of a legal provision, declares that Guatemala's interpretation is consistent with the ADP Agreement.

    4.109 Guatemala submits that, in a further attempt to undermine the standard of review by requesting the Panel to replace the Ministry's evaluation, Mexico infers that Article 17.6 of the ADP Agreement and Article 11 of the DSU are complimentary. Guatemala suggests that this position is in conflict with the actual text of these provisions since Appendix 2 to the DSU contains a list of rules, including Article 17.6 of the ADP Agreement, that are special or additional. In describing the ordinary terms of reference of panels, Guatemala notes that Article 7.1 of the DSU stipulates that panels must conduct their examination in the light of the relevant provisions of the covered agreement. In cases of anti-dumping, Guatemala submits that a relevant provision is Article 17.6 of the ADP Agreement. Thus, Guatemala asserts that a panel dealing with an anti-dumping case is not authorized to carry out any evaluation of the facts, since Article 17.6 reserves this function for the investigating authority.

    4.110 Mexico considers that Guatemala's anti-dumping investigation is inconsistent with the ADP Agreement on several scores, and that these inconsistencies show that the Ministry: (i) failed to establish the facts properly; (ii) did not conduct an unbiased and objective evaluation of the facts; and (iii) placed a number of inadmissible constructions on the ADP Agreement.

    4.111 Mexico argues that, with regard to the initiation of the investigation, Guatemala did not properly establish the facts because:

    (i) Guatemala accepted as valid two alleged invoices (for one load of cement each) without ensuring that the invoices were actually valid;

    (ii) Guatemala assumed, wrongly, that the volume of cement recorded in the two alleged invoices was equal to the volume of the sacks sold in Guatemala;

    (iii) Guatemala confused the submission of two import certificates for transactions that took place on two consecutive days in the same month, and that were used as evidence of the export price, with information on the trend in the volume of dumped imports;

    (iv) Guatemala considered that the investigation had been initiated when the import certificates for the preceding year were requested from the Directorate of Customs, whereas in reality it was initiated when the notice of initiation was published in the Official Journal;

    (v) Guatemala initiated the investigation without any evidence as to the volume of cement exports; and

    (vi) Guatemala did not adequately examine the causal link.

    4.112 Mexico argues that, with regard to the initiation of the investigation, Guatemala did not make an unbiased and objective evaluation of the facts because:

    (i) under Guatemalan law the Ministry must accept evidence submitted by the applicant as valid and leave it to the other interested parties to prove the contrary;

    (ii) the Ministry tried to make good the deficiencies of Cementos Progreso's initial application by requesting the submission of a supplementary application which would correct the defects of the first, particularly those relating to injury;

    (iii) the Ministry wrongly accepted the application for the initiation of an investigation despite the fact that, even taking the supplementary application into account, it contained the defects identified by Mexico, in particular a lack of evidence or information concerning threat of injury and causal link; and

    (iv) the Ministry not only assumed the role of applicant by requesting from the Directorate of Customs information on the import certificates for the last year which should have been obtained and submitted by Cementos Progreso, but also decided to initiate the investigation without waiting for the results of its request for information.

    4.113 With regard to the conduct of the investigation, Mexico submits that the Ministry conducted a biased and non-objective evaluation of the facts on which the preliminary affirmative finding of threat of injury was based. Mexico argues that Guatemala's preliminary determination of threat of injury does not fulfil the relevant requirements of the ADP Agreement. The preliminary determination, for example, does not indicate whether due account was taken of other factors which may have influenced the situation of the domestic industry; there is no causal link between the factors considered and the alleged threat of injury; data subsequent to the investigation period set by the Ministry have been used; the evolution of imports does not demonstrate any inverse correlation between the increase in imports and Cementos Progreso's sales trends (at times they both increased or fell simultaneously); inventories of a product (clinker) other than the product under investigation (grey portland cement) have been used; it is asserted, with no evidence or explanation, that the drop in Cementos Progreso's sales is due to imports; prices which, according to Guatemala, were recorded in some Guatemalan cities were used as if the investigation had been a regional one and despite the fact that the prices supplied by Cementos Progreso (which rose) were available; a loss of customers is mentioned without the accuracy of this claim having been ascertained; there was no under-utilization of installed capacity as claimed by Cementos Progreso, considering in particular that in spite of the closure of its kilns, it continued to produce cement subsequent to the investigation period at close to 100% of its real production capacity; and it is considered on the basis of a number of estimates supplied by a firm of consultants that Cruz Azul's available capacity can cause an imminent and substantial increase in its exports to Guatemala when, even if the total estimated excess capacity (360,000 tonnes per year) were directed solely at the Guatemalan market, the increase could not be more than 30,000 tonnes a month.

    C. Violations Alleged Regarding the First Stage of the Investigation

    1. Initiation

    4.114 Mexico submits that, by initiating the investigation on the basis of information contained in Cementos Progreso's application, Guatemala violated Articles 2.1, 2.4, 3.7, 5.2, 5.3 and 5.8 of the ADP Agreement. Mexico asserts that, as a result of deficiencies in the information submitted by Cementos Progreso concerning dumping, injury and causal link, the Ministry did not have sufficient evidence to justify initiation and should have rejected the application.

    4.115 Guatemala notes that the level of evidence "sufficient" to justify initiation is significantly less than the level of evidence required for a preliminary or final affirmative determination. According to the Chairman of the panel in United States - Measures Affecting Imports of Softwood Lumber from Canada:

    "A number of substantive concerns have been raised by the parties in this case. The Panel saw considerable merit in many of Canada's criticisms with respect to the United States' initiation of a countervailing duty investigation on imports of softwood lumber from Canada. In particular, the Panel recognized that the data and methodologies used by the United States contained shortcomings, in some cases of a serious nature. A number of questions arose regarding particular aspects of the evidence addressed by the US Department of Commerce. Moreover, certain facts available to the United States, for example on the impact of the recession, were, but arguably should not have been, ignored. Such information might have had an important bearing on this case, even at the initiation stage. However, the Panel had to take into account that it was not reviewing a determination of the existence of subsidy, injury and causality, but a finding that sufficient evidence of these elements existed to warrant an investigation. Moreover, in reviewing this matter, which necessarily involved a large range of issues of fact, the Panel had to take into account that the matter was not before it on a de novo basis. The Panel was also aware, despite its rigorous application of the criteria established in paragraphs 29, 30, 31, and 33 of its report, of concerns that the threshold for initiation as it applied in customary practice in several countries was relatively low. Nonetheless, the panel was of the view that the threshold required by Article 2:1 of the Agreement for initiation of a countervailing duty investigation was such that the Panel could not properly find that the United States initiation in this case was inconsistent with that Article, having regard to the standard of review."60

    4.116 Guatemala does not agree with the theory put forward to the effect that an authority can determine that an application contains sufficient information and evidence reasonably available to the applicant, thus complying with Article 5.2 of the ADP Agreement, can examine the accuracy and adequacy of the information and evidence provided in the application, thus complying with Article 5.3 of the ADP Agreement, and despite all this can reach the conclusion that there is not sufficient evidence to initiate an investigation. Such an interpretation would oblige the investigating authorities to carry out an investigation that goes beyond the examination required to determine the accuracy and adequacy of the evidence provided in the application, pursuant to Article 5.3. Article 5 of the ADP Agreement does not contain an obligation to carry out a - non-official - investigation prior to initiation and such an investigation is not governed by any of the procedural safeguards under the ADP Agreement. Consequently, the Panel should respect Guatemala's permissible interpretation of Articles 5.2 and 5.3 of the ADP Agreement.

    4.117 Guatemala also argues that Mexico ignored the new standard of review contained in Article 17.6(i) of the ADP Agreement. Mexico is urging the Panel to carry out a new examination of the evidence evaluated by the Ministry pursuant to Article 5 of the ADP Agreement. Mexico wants the Panel to reach a conclusion that differs from that reached by the Ministry concerning whether or not the application complied with Article 5.2 and whether the Ministry determined properly that the application included accurate and adequate evidence in compliance with Article 5.3. Article 17.6(i) was included in the ADP Agreement to prevent panels from casting doubt on decisions by authorities, unless the facts were established improperly or only evaluated partially. Mexico has not put forward any argument saying that the Ministry did not establish the facts properly because it did not follow the required procedures or that the Ministry evaluated the facts in a partial manner. Consequently, the Panel should respect the decision to initiate an investigation taken by the Guatemalan Ministry of the Economy, pursuant to Guatemala's obligations under Articles 5.2 and 5.3 of the ADP Agreement.

    (a) Articles 2.1/2.4

    4.118 Mexico submits that investigating authorities must apply Articles 2.1 and 2.4 of the ADP Agreement when determining whether there is sufficient evidence of dumping to justify initiation under Article 5.3 of the ADP Agreement. Article 2.1 defines the term "dumping", whereas Article 2.4 governs the comparison that must be made between normal value and export price in order to determine whether dumping exists.

    4.119 With regard to the evidence of dumping submitted by Cementos Progreso, Mexico argues that the prices recorded in the alleged invoices and used as evidence of the normal value, and those recorded in the import certificates and used as evidence of the export price, cannot be considered as comparable within the meaning of Articles 2.1 and 2.4 of the ADP Agreement unless due allowance is made in each case for differences which affect price comparability. The Ministry failed to make a fair comparison between the normal value and the export price, and failed to make due allowance for differences in levels of trade, quantities, form of payment and exchange rate. In particular, the Ministry failed to consider the following:

    (i) the transactions compared were carried out at different levels of trade, since the normal value was calculated at the retail level, while the export price was calculated at the wholesale level61;

    (ii) the conditions and terms of sale for these transactions were different in that:

    - the prices in the alleged invoices used to calculate normal value referred to 50 kg. sacks, while the prices in the import certificates used to calculate the export price referred to 42.5 kg. sacks;

    - the prices used for normal value were spot prices (including the distributor's share), while those used for the export price were credit sale prices; and

    (iii) the dollar-peso exchange rate claimed by Cementos Progreso has not been properly documented, and is based on a mere statement by the claimant for which no proper evidence has been provided.

    4.120 Mexico suggests that in a communication dated 26 July 1996, the Guatemalan authorities themselves acknowledged that they had not adjusted the prices recorded in the alleged invoices and in the import certificates to ensure that they were at a comparable level, claiming that it was up to the exporting firm to prove that there had not been any dumping.

    4.121 Guatemala rejects Mexico's reasons for considering that the prices were not comparable. Firstly, the Ministry had no reason or obligation to ask the applicant to provide evidence of the levels of trade in Mexico or in Guatemala. The identification of different levels of trade requires an investigation in which numerous facts must be obtained and depends on detailed and substantive information from the exporter, information which is not available to the applicant prior to the initiation of the investigation. Secondly, as discussed elsewhere, the Ministry did not have any reason or obligation to ask the applicant to provide evidence of the terms and conditions of sale in each market. Thirdly, if, as Mexico claims, the sales on the domestic market were cash sales and the export sales were credit sales, these facts would serve simply to increase the amount of the margin of dumping. The failure to make the adjustment for credit sale benefitted Cruz Azul in that the margin was underestimated. Moreover, Guatemala objects to the reference made by Mexico to a communication between the Ministry and Mexico on 26 July 1996. This communication is not part of the file that is being examined by the Panel, but is a communication made in the course of informal consultations preceding formal consultations. In any case, the said communication correctly states that the information needed to adjust the exporter's domestic market prices and the export prices for a fair comparison under Article 2.4 of the ADP Agreement in the preliminary or final determination is not information that is available to the applicant.

    4.122 Guatemala submits that Article 2 of the ADP Agreement does not apply to the decision to initiate an investigation. As Article 2 is entitled "Determination of Dumping", this Article applies only to the preliminary and final determinations of dumping, and not to the decision to initiate an investigation. According to Article 2.4, precise adjustments of the export price and the normal value can only be made during an investigation, when the investigating authority has access to the detailed information in the possession of the exporting firms needed to calculate the adjustments. Neither Articles 5.2 nor 5.3 refer to Article 2. In view of the express reference to specific paragraphs of Article 3 in Article 5.2(iv), the absence of references to other provisions of the ADP Agreement such as Article 2 shows that Article 2 does not apply. The first sentence of Article 5.2 does not contain any reference to Article 2. The reference is to "... within the meaning of Article VI of GATT 1994 as interpreted by this Agreement.." and applies solely to "injury" and not to dumping. The third sentence of Article 5.2 describes the evidence and information to be included in the application, provided that such information is reasonably available to the applicant. Article 5.2(iii) describes the evidence and information that must be included in the application to substantiate the allegation of dumping. Article 5.2(iii) does not contain any reference to Article 2. Article 5.2 clearly establishes that no paragraph in Article 2 applies to the decision to initiate an investigation.

    4.123 Mexico asserts that Article 2 app

      ……
      (此处省略若干字,欲需查看全文请成为法意会员或购买法意检索阅读卡
    更新列表 | 会员章程 | 法律声明 | 友情链接 | 法意介绍 | 法意招聘 | 京ICP备10009268号 版权所有©北京大学实证法务研究所
      运营维护:北京法意科技有限公司 推荐使用IE5.0以上版本 分辨率800×600
    邮箱: 客服热线:010-53109998、62758866 53109996/97-8088(传真)
    QQ在线咨询:691817899 MSN在线交流:
    严格遵守国家保密法律法规
    北京市公安局海淀分局备案编号:1101083721