RESTRICTED
WORLD TRADE G/ADP/W/2/Suppl.1
G/SCM/W/10/Suppl.1
ORGANIZATION 13July1995
(95-1990)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED
BYTHE GOVERNMENT OFMEXICO OFLAWS AND
REGULATIONS UNDER ARTICLES 18.5AND 32.6THE AGREEMENTS
Supplement
Thefollowing communication, dated 11July,hasbeenreceived fromtheUnited States Trade
Representative.
_______________
Enclosed areadditional questions concerning theinjury aspects ofMexico 'santi-dumping and
countervailing dutylegislation which weintend topursue anextweek'smeeting.
INJURY
50.Article 29oftheForeign Trade Act("the Act") provides thataninjury testwillonlyapply to
goods from countries thatprovide areciprocal injury test. Presumably aninjury testwould apply
automatically toanyWTO signatory?
51. Article 39oftheActdefines injury as"material lossorimpairment ordeprivation ofanylawful,
normal gain" which domestic producers maysuffer. What does"material lossorimpairment or
deprivation ofanylawful, normal gain" mean? How isthislanguage consistent withthedefinition
ofmaterial injury contained inArticle 3oftheA-DAgreement andArticle 15oftheSCM Agreement?
52.Article 40oftheActandArticle 60oftheRegulations statethat"domestic industry" shallbe
understood toreferto"atleast25percentofthedomestic production ofthegoods inquestion". The
25percentthreshold inA-DArticle 5.4andSCM Article 11.4refers totheadequacy ofanapplication
foraninvestigation, notthedefinition ofdomestic industry. HowdoesArticle 40oftheMexican Act
comport withArticle 3oftheA-DAgreement andArticle 15oftheSCM Agreement?
53.Indiscussing theimpact ofimports ondomestic producers, Article 41oftheActindicates that
theMinistry mayconsider alloftherelevant economic factors andindices having abearing onthe
stateofthesector inquestion. Please explain themeaning oftheword “sector ”inthiscontext asthat
termwould normally encompass aportion ofacountry 'seconomy thatisbroader thananindividual
industry.
54.Paragraph IVofArticle 41oftheActconfers authority ontheMinistry toconsider "anyelements
which theMinistry deems appropriate". Thislanguage isextremely broad andfailstoconfine theG/ADP/W/2/Suppl.1
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Ministry toconsideration offactors suchasthose specified inArticle 3.4oftheA-DAgreement and
Article 15.4oftheSCM Agreement thataregermane tothequestion ofinjury toanindustry. How
isthislanguage consistent withtheprovisions oftheAgreements?
55.Paragraph IVofArticle 42oftheActrelating tothreat ofmaterial injury confers thesame broad
authorityontheMinistrywithoutapparentconstraint.Howisthislanguageconsistentwiththeprovisions
ofArticle 3.7oftheA-DAgreement andArticle 15.7oftheSCM Agreement?
56. Thereappeartobetwodifferentstandardswithrespecttoconsiderationofthevolumeofimports.
Article 41oftheActrequires anexamination ofwhether there hasbeena"significant" increase in
imports inrelation todomestic production orconsumption. Article 64oftheRegulations, however,
refers toa"considerable" increase inimports inabsolute terms orinrelation todomestic production
orconsumption. Which standard isapplicable? Howshould theterm"considerable" beinterpreted
inlightofArticle 3.2oftheA-DAgreement andArticle 15.2oftheSCM Agreement?
57. Article 41oftheActrequires anexamination todetermine whether thedumped prices are
"considerably lower" thanprices ofthedomestically produced product, andwhether theimported prices
haveresulted inprice depression orsuppression. SeealsoArticle 64oftheRegulations. What does
"considerably lower" mean? Howdoesitcomport withthecriteria setoutinArticle 3.2oftheA-D
Agreement andArticle 15.2oftheSCM Agreement?
58. Paragraph IIAofArticle 64oftheRegulations states thatapricereduction bythesubject imports
thatisgreater thanthatexperienced bynon-dumped products (apparently notlimited toeither thelike
product ornon-subject imports) willhavesome significance. How isthislanguage consistent with
Article 3.2oftheA-DAgreement andArticle 15.2oftheSCM Agreement which focus onprice
comparisons between thesubject imports andthedomestic producers 'likeproduct?
59. Neither theActnortheRegulations includes arequirement toconsider themagnitude ofthe
dumping margin. Intheabsence ofanexplicit provision, howwould Mexico ensure theconformity
ofitspractice withArticle 3.4oftheA-DAgreement which doesrequire consideration ofthatfactor?
60.TheMexican lawandregulations appear tolackanyreference toconsideration oftheimpact of
other factors asprovided forinArticle 3.5oftheA-DAgreement andArticle 15.5oftheSCM
Agreement. WhydotheForeign Trade Actandimplementing regulations failtoaddress thisissue?
Intheabsence ofaspecific provision, howwould Mexico ensure theconformity ofitspractice with
theAgreements?
61. Article 42oftheActandArticle 68oftheRegulations address threat ofinjury. These provisions
refertoa"well-founded probability ofasignificant increase" inimports. What doesa"well-founded
probability ..."mean? Howdoesitcomport withArticle 3.7oftheA-DAgreement andArticle 15.7
oftheSCM Agreement which speak tothe"likelihood ofsubstantially increased" importations?"
62. Article 68oftheRegulations states: "Indetermining thethreat ofinjury, thegenerally accepted
methods available shall beused". What doesthequoted sentence mean? How doesitrelate to
Article 3.7oftheA-DAgreement andArticle 15.7oftheSCM Agreement?
63. Neither theActnortheRegulations includes specific deminimis margin ornegligible volume
standards regarding individual country imports thatmaynotbecumulated. Intheabsence ofexplicit
provisions, howwould Mexico ensure theconformity ofitspractice withArticle 3.3and5.8ofthe
A-DAgreement andArticle 11.9, 15.3and27.11 oftheSCM Agreement?G/ADP/W/2/Suppl.1
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64. Article 43oftheActandArticle 67oftheRegulations provide forcumulation ofimports from
more thanonecountry. Article 67states thattheMinistry "need notcumulatively assess theeffects"
ofindividual country imports ifsuchimports are"notsignificant" anddonothave"anyidentifiable
adverse effect ondomestic production". Howdoesthiscomport withArticle 3.3oftheA-DAgreement,
which provides thattheinvestigating authorities "may" cumulate "only if"adetermination ismade
thatthedumping margin ismore thandeminimis (pursuant toArticle 5.8oftheA-DAgreement;
Article 11.9oftheSCM Agreement) andthatthevolume isnotnegligible?
65.Article 53oftheActspecifies thatinterested parties willhaveonly30dayswithin which topresent
theirdefense. Howisthisconsistent withArticle 6.2oftheA-DAgreement andArticle 12.3ofthe
SCM Agreement?
66.Article 70states thatunfair trade practice orders willsunset after5years ifnointerested party
hasrequested thatareview beconducted. Howdoesthisprovision effectuate therequirements ofA-D
Agreement Article 11.3andArticle 21.3oftheSCM Agreement thatanorder willsunset unless the
relevant authorities havedetermined thattheexpiry ofthedutywould belikely toresult incontinuation
orrecurrence ofdumping andinjury?
67.Theprovisions intheActandRegulations concerning finaldeterminations donotexpressly require
thattheexplanation ofthedetermination contain reasons fortheacceptance orrejection ofarguments
made byexporters andimporters. Istheabsence ofanexplicit provision, howwould Mexico ensure
theconformity ofitspractice withArticle 12.2.2. oftheA-DAgreement andArticle 22.5oftheSCM
Agreement?