RESTRICTED
WORLD TRADE G/ADP/W/69
G/SCM/W/78
25October 1995
ORGANIZATION(95-3268)
Original: Spanish Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
REPLIES TOQUESTIONS POSED BYKOREA1CONCERNING THE
NOTIFICATION OFMEXICAN LAWS AND REGULATIONS2
Thefollowing communication, dated 15September 1995, hasbeenreceived fromthePermanent
Mission ofMexico.
_______________
KOREA
1. Market viability
Reply toquestion 1
Article 133ofthePolitical Constitution oftheUnited Mexican States establishes thatthe
Constitution andthelawsenacted bytheCongress oftheUnion, andanytreaties thatareinaccordance
withtheConstitution, concluded bythePresident oftheRepublic withtheapproval oftheSenate, shall
betheSupreme Lawthroughout theUnion. InMexico, treaties areapplied directly, i.e.once
promulgated, nofurther legislation isrequired fortheirapplication. Theybecome directly incorporated
intodomestic law. Accordingly, theForeign Trade ActandtheAnti-Dumping Code havethesame
status. However, Article 2oftheForeign Trade Actstates thattheprovisions ofinternational treaties
towhich Mexico isaparty override theprovisions oftheAct,andtherefore inthecaseofinconsistency
oromission theinvestigating authority willhavetocomply withtheprovisions oftheAnti-Dumping
andSCM Agreements. Itshould alsobementioned thattheGATT Agreements havehigher legalstatus
thantheRegulations oftheForeign Trade Actandtherefore theirprovisions override those ofthe
Regulations.
After establishing therelationship between theForeign Trade ActanditsRegulations andthe
Anti-Dumping andSCM Agreements, itisimportant topoint outthatthereasoning behind this
representativeness criterion isclear: theconcept ofnormal value itselfisrelated totheprices atwhich
theexporter normally, commonly orgenerally sells. Bydefinition, aprice cannot bedescribed as
./.
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thatwhich isnormally charged unless itconcerns alargenumber oftransactions. Inturn,thiscannot
bedefined interms oftheimporting country 'smarket, butrather withreference tothetotalmarket.
Thisissosimply because theimporting country 'smarket maybe,andfrequently is,extremely small.
Intheinvestigations initiated since theAgreement wasadopted, representativeness hastobe
evaluated inaccordance withtheruleinfootnote 2toArticle 2.2oftheAnti-Dumping Agreement.
This follows from thefactthatalltheprovisions oftheAgreement arepartofdomestic law.
Nevertheless, thetextoftheruleinquestion allows exceptions, byrecognizing thatnormally the
percentage of5percentofthesalestotheimporting country willbeapplied: itisthusclear from
footnote 2itselfthatinspecial situations representativeness maybeestablished onthebasisofafigure
other than5percent.
2. Domestic industry
Reply toquestion 2
Theinvestigating authority mustcomply withtheprovisions concerning domestic production
intheAnti-Dumping andSCM Agreements, forthereasons explained inthereply totheprevious
question.
3. Deminimis
Reply toquestion 3
Forthereasons given inthereply toquestion 1above, deminimis andnegligible volumes of
imports areunderstood torefertowhatisprovided forinArticle 5.8oftheAnti-Dumping Agreement.
4. Unclear provision
Reply toquestion 4
Wewishtopoint outthattheForeign Trade Actdoesnotcontain anArticle 46.11. Wetake
itthatyourquestion refers toArticle 46,Section XI,paragraph 2oftheRegulations oftheForeign
Trade Act,andshallreply accordingly.
TheaimofthisArticle istoensure exporters thatinthecaseofaninvestigation using acalculated
value, theprofit margin willbedetermined onthebasis oftheprofit regularly obtained bythefirm
fromthesaleofproducts which areasclose aspossible totheproduct under investigation (hence "the
same generic category"), inorder totrytoenhance thefairness andtransparency oftheinvestigations.
Theabove-mentionedArticleestablishesthatwherethemarginofpricediscriminationisestimated
bytypeofproduct, todetermine theprofit margin itisnecessary tohaverecourse tothemostsimilar
product among those found inthesame generic category. Forthispurpose, usewillbemade ofdata
obtained onthebasis ofinformation corresponding totypes ofproduct forwhich thenormal value
isdetermined bydomestic prices.