RESTRICTED
WORLD TRADE G/ADP/W/13
11July1995
ORGANIZATION(95-1929)
Original: English Committee onAnti-Dumping Practices
QUESTIONS CONCERNING THE NOTIFICATION
PROVIDED BYTHE GOVERNMENT OFMEXICO OFLAWS AND
REGULATIONS UNDER ARTICLE 18.5OFTHE AGREEMENT
Thefollowing communication, dated 5July1995, hasbeen received from thePermanent
Delegation oftheEuropean Community.
_______________
Please findenclosed written questions oftheEuropean Community concerning thedumping
legislation ofMexico which havealready beensenttotheMission.
1. Mexico 'snotification consists oftwodocuments: (1)theForeign Trade Act(theAct)and
(2)theRegulations under theForeign Trade Act(theRegulations). However, boththese documents
were adopted prior tothe1994 Agreement andareinmany areas clearly atvariance withtheWTO
Agreement, including itsArticle 18.5. These twodocuments cannot beinterpreted asaproper
implementation oftheAgreement andtheyconsequently neither allow ananalysis ofMexican legislation
asitisapparently applicable nordoesitpermit anassessment astowhether Mexico willactually apply
theAgreement.
When doesMexico intend toamend theActandtheRegulations inorder toconform tothe
above-mentioned Agreement?
2. Article 42oftheRegulations requires thatdomestic salesmustconstitute 15percentofexport
salestoMexico before theycanbeusedtoestablish normal value whereas therequirement inthenew
Agreement isfivepercent.
When isMexico going tobring itslegislation intoconformity withfootnote 2ofArticle 2.2
oftheAgreement andinthemeantime which figure willMexico useinitsinvestigation?
3. Article 46IXdeals withtheproblem ofnon-recurring expenses andplaces restrictions onthe
proper allocation ofnon-recurring costs tofuture production.
What istherationale forthistreatment andwhatisthebasis foritinthenewAgreement?
4. Article 46XIoftheRegulations deals withtheaddition forprofit inconstructed value.
Onwhatbasisunder thenewAgreement doesMexico disregard actual dataonprofits because
of"transitory effects"?G/ADP/W/13
Page2
5. Article 47oftheRegulations deals withtreatment ofpurchase prices oftraders from their
suppliers andprovides thatsuchprices maybedisregarded iftheyarenotintheordinary course of
trade.
Could Mexico explain therationale ofthistreatment andthebasisforitinthenewAgreement?
6and7. Article 50oftheRegulations deals withinstances where theexport price maybe
constructed onthebasis ofthefirstindependent salesinMexico. Oneoftherequirements forsuch
construction isthatacompensatory arrangement actually exists between theexporter andtheimporter.
Onwhatbasis doesMexico actually establish suchcompensatory arrangements?
ThenewAgreement recognizes thatconstruction ofexport prices mayaffect pricecomparability
andadvocates aleveloftrade allowance tocorrect anysuchefforts. HowwillMexico dealwithsuch
situations?
8. Articles 51to54oftheRegulations dealwithallowances toensure price comparability as
specified inArticle 2.4oftheAgreement.
What istheunderlying rationale inthewayinwhich Mexico differentiates between allowable
andnon-allowable expenses, i.e.howarecertain costsdeemed toaffect pricecomparability while others
donot?
9. Article 55oftheRegulations deals withallowances fordifferences inquantities.
How exactly arethecriteria setoutinthisArticle applied, i.e.inparticular thecriteria set
outinArticles 55IIand55IIIB?
10. Article 56oftheRegulations deals withallowances fordifferences inphysical characteristics.
Asthisisanexpense which canclearly affect price comparability toanextent which exceeds
variable costs how, under theAgreement, cantheallowance berestricted tosuchcosts?
11. Article 58deals withthetreatment ofexchange rates.
When isMexico going tobring itslegislation intolinewiththenewAgreement, inparticular
inrespect offluctuations inexchange rates?
12and13. Articles 60and62oftheRegulations deals withthequestion ofstanding butdoesnot
provide forproducers toexpress support oropposition tocomplaints.
When isMexico going tobring itslegislation onstanding intoconformity withArticle 5.4
oftheWTO Anti-Dumping Agreement?
With regard toArticle 62oftheRegulations could Mexico explain whether, andifsohow,
thisArticle willbeapplied inanti-dumping cases?G/ADP/W/13
Page3
14. Article 64IIIoftheRegulations dealswiththeeffects ofthedumped imports onthecomplaining
industry but,unlike Article 3.4oftheAgreement, doesnotcontain areference tothe"magnitude of
themargin ofdumping".
How, therefore, willMexico takethisfactor intoaccount initsdeliberations oninjury?
15. Article 67oftheRegulations deals withcumulation butdoesnotcontain specific deminimis
standards ondumping margins orvolume ofimports.
When doesMexico intend tobring itslegislation intoconformity withtheAgreement inthis
respect andinthemeantime which standards willMexico apply?
16. Article 68oftheRegulations deals withthreat ofinjury butusesdifferent terminology tothe
Code, afactwhich could mean thatitmaynotconform totheCode.
Does Mexico envisage thatthenewAgreement willleadtosignificant changes toitsexisting
practice onthreat ofinjury? What exactly does"well-founded probability" mean?
17. Article 75oftheRegulations refers tothefactthataninvestigation should notprevent clearance
ofthegoodsconcerned,areferencewhichcontrastswiththeAgreementwhichinstructsthattheexistence
ofaninvestigation shallnot"hinder" theprocedures ofcustoms clearance.
DoesMexicointendtoamenditsdomesticlegislationinordertoconformtotheWTOAgreement
andinthemeantime isitpossible thataninvestigation could delay orhinder customs clearance?
18. Article 75dealswiththecontents ofacomplaint andcertain other pre-initiation requirements.
Neither thisArticle, norArticle 53oftheActwhich deals withnotification requirements, mention
thepre-initiation notification ofgovernments asrequired byArticle 6.1.3 oftheAgreement.
IsMexico going tocomply withArticle 6.1.3 oftheAgreement and,ifso,how?
19. Article 76oftheRegulations refers totheperiod which should beinvestigated inorder to
establish whether dumping andinjury exist.
Could Mexico indicate clearly whatthelastsentence ofthisArticle means, forexample, could
adutybebased onfindings fortheextended period?
20and21. Article 80deals withthecontents ofthenotice ofinitiation ofinvestigations andit
appears nottobeinconformity withArticle 12.1.1 oftheAgreement which requires thepublication
ofdetails ofthealleged dumping margin andthealleged injury.
IsMexico going tocomply withArticle 12.1.1 oftheAgreement and,ifso,whatdetails will
begiven intheopening notice?
Also, willthenotice ofinitiation indicate whether thecomplaint hasbeenlodged "byoron
behalf" ofthedomestic industry asrequired byArticle 5.4oftheAgreement?G/ADP/W/13
Page4
22and23. Articles 84and85oftheRegulations provide fortheholding of"technical information
meetings" tosupply information tointerested parties onthemethodology forcalculating dumping and
injury.
Arethese meetings toprovide technical information which isnotsupplied inquestionnaires
andcansuchinformation beobtained afterthefive-day deadline?
Canfailure toattend suchmeetings leadtoanyadverse effects forexporters?
24and25. Articles 86to88dealwithconciliation meetings, apparently inorder toarrive ata
"solution" todumping problems.
Could Mexico indicate whether theirexisting practice onsuchmeetings willbealtered inany
waybythenewAgreement?
Inthisrespect, could Mexico giveabriefsummary oftheirexisting practice andanychanges
which might ensue from thenewAgreement?
26,27and28.Article 90oftheRegulations provides fortheimposition ofadutywhich islessthan
themargin ofdumping ifsuchlower dutywould besufficient toremove theinjury.
What aretheprecise procedures which arefollowed byMexico inapplying thisrule?
Moreover, doesMexico calculate theprecise amount ofinjury caused bythedumping and,
ifso,isthisdoneconsistently inevery case?
Ifaprecise amount ofinjury isnotcalculated howisitestablished thatadutylower thanthe
dumping would remove injury?
29,30and31.Article 96oftheRegulations, inconjunction withArticle 71oftheAct,permits the
impositionofmeasuresonpartsandcomponentsandotherpracticeswhichmightundermineanti-dumping
measures.
Could Mexico provide more details ofhowsuchinvestigations would becarried outandwhich
grounds would necessitate theextension ofduties toparts andcomponents?
Would theextension ofduties topartsandcomponents require anyinvestigation ofdumping
andinjury onsuchparts andcomponents?
What, inMexico 'sview, isthebasis inWTO rulesforaction against partsandcomponents?
32. Neither theActortheRegulations appear toprovide for"quick" reviews fornewexporters.
How isMexico going tocomply withArticle 9.5oftheAgreement inthisrespect?