WORLD TRADE  
ORGANIZATION  G/ADP/Q1/MEX/10 
G/SCM/Q1/MEX/10 22 March 2004 
 
(04-1257) 
Committee on Anti-Dumping Practices 
Committee on Subsidies and Countervailing Measures Original: Spanish 
 
 
 
NOTIFICATION OF LAWS AND REGULATIONS 
UNDER ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS 
 
Compilation of Replies to the Questions Posed by CHILE1 
Regarding the Notification of MEXICO2 
   The following communication, dated 17 March 2004, is being circulated at the request of the delegation of Mexico. 
 
_______________ 
 
Comments on Mexico's Foreign Trade Act 
 1. Article 29 of the Mexican Law states that:  
 
"… Evidence of injury shall be required whenever the country of origin or source of the goods in question observes reciprocity.” 
 Questions
 
 
 (i) According to the WTO Anti-Dumping Agreement, should it not always be the 
investigating authority which determines injury, irrespective of any action another country may be understood to be taking in this connection? 
 
Reply
 
Pursuant to the Anti-Dumping Agreement, the de termination of injury should indeed comply 
with the provisions thereof. Thus, in the case of WTO Members, evidence of injury will be required in 
compliance with these rules. However, for countri es which are not WTO Members, it will be required 
on the basis of the principle of reciprocity. 
(ii) Under the Mexican Law, who is author ized to establish whether the existence of 
injury is determined in anti-dumping investigations in another country? 
 
Reply  
 
No express provision exists, but it would be the investigating authority. 
                                                      
1 G/ADP/Q1/MEX/3-G/SCM/Q1/MEX/3. 
2 G/ADP/N/1/MEX/1/Suppl.2-G/SCM/N/1/MEX/1/Suppl.1-G/SG/N/1/MEX/1/Suppl.1. G/ADP/Q1/MEX/10 
G/SCM/Q1/MEX/10 Page 2 
 
 
 2. In connection with the determination of dumping in the course of an investigation, 
Article 2.6 of the WTO Anti-Dumping Agreement provides for the possibility of investigating a like product, meaning a product which is identical,  or, in the absence of such a product, another 
product with closely resembling characteristics. The Mexican Law includes closely resembling 
products in the investigation, even where a product exists which is alike in all respects 
(identical).   Question
 
 
 Would the combined use of the terms "identical" and "like" in the Mexican Law not 
lead to the consideration of a greater number of  categories of product than those permitted by 
the WTO in an investigation? 
 
Reply  
 
 No. The Foreign Trade Act (LCE) does not  provide for separate treatme nt with regard to the 
terms "identical" and "like”. A like product will be taken into consideration in the absence of an 
identical product, as established in Artic le 2.6 of the Anti-Dumping Agreement. 
 
3. Article 31.I of the Mexican Law provides that the third-country price used as an 
alternative to the price in the country of origin for determining normal value "shall be the 
highest price, provided that it is representative".  Questions
 
 
(i) Could the above-mentioned provision artificially increase the dumping margin 
calculated? 
 
Reply  
  This provision is in no way meant to artificially increase the dumping margin calculated, 
given that the information used by the investiga ting authority corresponds to actual transaction prices. 
 
 (ii) Is this provision not inconsistent with the WTO rule requiring comparison with 
the representative price of a product exported to an appropriate
 third country, 
which does not necessarily correspond to the highest price? 
 
Reply  
 
The decision of the authority to use the highest third-country export price to determine normal 
value is not an infringement of WTO rules. Mexico considers an appropriate third country to be the 
one with the highest export price, provided that this price is representative, the aim being to reduce the 
possibility of the export price to Mexico being compared with an export price to a third country to 
which the goods could also have been exported at dumped prices.   
4. The second paragraph of Article 33 of the Mexican Law provides that: 
 
"... In the case of each sector or industr y under investigation, the Ministry may 
determine whether such sector or industry op erates according to market principles ...".  
 
In this case, the Ministry shall regard as normal value the price in a third country deemed to be 
a substitute country.  G/ADP/Q1/MEX/10 
 G/SCM/Q1/MEX/10 
 Page 3 
 
 
 Questions  
 
(i) Within what parameters may the Ministry determine whether a sector or 
industry under investigation operates according to market principles? 
 
Reply  
  It should be noted that the first paragraph of  Article 33 of the Foreign Trade Act refers in 
particular to imports from an economy which is consid ered to be centrally planned, irrespective of the 
name by which it is designated. Chile's direct quot ation of the second paragraph of this Article is 
therefore incomplete, given that this very same pa ragraph states that such determinations as to 
whether a sector or industry under investigation opera tes according to market principles will be made 
in conformity with the  Regulations under the Foreign Trade Act (RLCE), specifically Article 48 
thereof. Thus, the second paragraph of Article 33 of the Law provides for the following: 
 
“Subject to contrary evidence
, a centrally planned econom y is an economy that does 
not reflect market principles. In the case of each sector or industry under 
investigation, the Ministry may determine whether such sector or industry operates 
according to market principles. The Mini stry shall make such determinations in 
conformity with the Regulations ” (emphasis added). 
(ii) Does the fact of disregarding the price used in an industry or sector based on a 
unilateral determination by the investigating authority not constitute a violation of WTO rules?   
 
Reply
 
 
This is neither a violation of WTO rules nor a unilateral determination. Both the second 
paragraph of Article 33 of the Foreign Trade Ac t and the Regulations unde r this Act establish the 
opportunity for producers in the country of orig in to prove that the sector or industry under 
investigation reflects market principles.      
5. According to the third paragraph of Article 40 of the Mexican Law, in the event that 
producers are related to exporters or importers , they may alternatively be referred to as 
"manufacturers of the goods produced during the immediately preceding stage in the same continuous line of production".  Question
 
 
 The foregoing is not permitted by the WTO.   Would this not constitute an excessively 
broad interpretation of the concept of like product? 
 
Reply  
 
 Article 40 of the Foreign Trade Act provides that  when all of the producers are related to the 
exporters or importers, Mexico may  take into consideration the manufacturers of the goods produced 
during the immediately preceding stage in the same co ntinuous line of productio n, provided that such 
goods meet the criteria laid down in Article 2.6 of  the Anti-Dumping Agreement. This Article is 
therefore consistent with the provisions of the Anti-Dumping Agreement. 
 
6. Article 42.IV of the Mexican Law refers to the "inventory of the goods under 
investigation" as a decisive factor in determining a threat of injury. G/ADP/Q1/MEX/10 
G/SCM/Q1/MEX/10 Page 4 
 
 
  
Question
 
  Should this Article not refer to inventori es, as in Article 3.7(iv) of the WTO Anti-
Dumping Agreement?  
Reply
 
 
Article 42.IV should indeed be understood as referring to inventories, as in Article 3.7(iv) of the 
Anti-Dumping Agreement.  
7. Under Articles 54 and 55 of the Mexican Law, interested parties , in addition to 
producers, distributors and traders, are required to  provide all the information needed by the 
Ministry, otherwise the latter shall decide on  the basis of the information available. 
 
Question  
  Should these Articles not refer separatel y to anti-dumping and countervailing duty 
investigations, since the latter relate to gov ernment actions, concerning which detailed 
information should not be obtained from private companies but from the governmental 
authority?  
 
Reply
 
  The analysis conducted by the investigating aut hority in unfair practice investigations requires 
as much information as possible. This is obtained by means of forms and requirements sent to the 
parties to the investigation. In this respect, s ubsidy investigations require information both from 
governments (subsidy programmes, amounts, eligib ility requirements, domestic production involved, 
etc.) and from companies in order to dete rmine the applicable subsidy margins. 
 
8. Article 64 of the Mexican Law provides that: 
 
"The Ministry shall calculate individua l margins of price discrimination or 
subsidization for foreign producers that provide sufficient evidence to that end;  such individual margins shall serve as a basis fo r determining specific countervailing duties. 
 
The Ministry shall determine a countervailing dut y on the basis of the highest margin of 
price discrimination or subsidization obtained  from the facts available, in the following 
cases: 
  I. When the producers fail to appear at the investigation;  or   II. when the producers fail to provide the in formation in a proper and timely fashion, 
significantly impede the investigation, or  supply information or evidence that is 
incomplete, incorrect or does not derive fr om their accounts, thus preventing the 
determination of an individual margin of price discrimination or subsidization;  or 
  III. when the producers have not exported the product subject to investigation during 
the investigation period". 
  G/ADP/Q1/MEX/10 
 G/SCM/Q1/MEX/10 
 Page 5 
 
 
 Question  
  In the above cases, should not Article 6.8 and Annex II of the WTO Anti-Dumping Agreement be applied, in other words, should de terminations not be based on the facts available 
and not the highest margin? 
   The same question applies to the provisions of Article 83 of the Mexican Law concerning searches of establishments. 
 Reply
 
  Mexico considers that Articles 64 and 83 of the Foreign Trade Act are consistent with Article 
6.8 and Annex II of the Anti-Dumping Agreement.  9. Article 67 of the Mexican Law provides that:   "Final countervailing duties shall remain in effect for the length of time and to the 
extent necessary to offset the in jury to the domestic industry". 
 Question
 
 
 Is this provision not inconsistent with  Article 11.1 of the WTO Anti-Dumping 
Agreement, which requires an anti-dumping duty to remain in force only as long as and to the 
extent necessary to counteract dumping which is causing injury? 
 Reply
 
  Article 67 is consistent with the provisions  of the Anti-Dumping Agreement since injury 
caused by dumping is, in practice, taken into consideration. 
 
10. According to Article 70.B of the Mexican Law, one or more producers may request a 
review of countervailing duties. 
 Question
 
  Is this provision not inconsistent with  Article 11.3 of the WTO Anti-Dumping 
Agreement, which provides that the request for review should be made "by or on behalf of the 
domestic industry"? 
 
Reply
 
  No. Article 11.3 of the Anti-Dumping Agreement does not establish requirements for 
investigations which are self-initiated by the authorities (ex officio). 
 
11. The second paragraph of Article 80 of the Mexican Law provides that:  
  "The Ministry shall provide timely opport unities for interested parties to examine all 
information contained in the administrative dossier for the presentation of their cases. 
  Confidential information shall be made  available only to the accredited legal 
representatives of interested parties … No  interested party shall have access to 
restricted commercial or confid ential government information. G/ADP/Q1/MEX/10 
G/SCM/Q1/MEX/10 Page 6 
 
 
  
 Persons with authorized access to conf idential information may not use such 
information for their personal benefit and shall be under the obligation to take all 
measures necessary to prevent any disclosure thereof …". 
 
Questions
 
  (i) Is the act of making available to the le gal representatives of all interested parties 
confidential information provided by another party, without the latter's prior 
authorization, not a violation of Article 6.5 of the WTO Anti-Dumping 
Agreement, which provides that confidential information must
 be protected by 
confidential treatment? 
  (ii) Should access to confidential informatio n not be limited to those countries with 
which individual agreements for that purpose are in force? 
  
Replies
 
  The Anti-Dumping Agreement does not prohibit access to confidential information, rather it 
states that such information may be consulted with the permission of the party which submitted it. In 
this case, Mexican legislation establishes requi rements for safeguarding such information on 
condition that the competitive position of the party which supplied it is not affected. Moreover, the 
Mexican authority affords greater transparency a nd security, since this right is accorded both to 
domestic producers and to exporte rs and importers in order to assist with their defence. 
 12. Article 86 of the Mexican Law establis hes a link with monopolistic practices and 
authorizes the investigating authorities to "infor m" the competent authority when elements give 
it cause to suspect that any of the parties was involved in such practices.   Questions
 
 
 (i) Does this Article allow confidential in formation to be used for other purposes by 
an agency other than the one carrying out the investigation? 
 
Reply  
 
 No. Article 86 of the Foreign Trade Act does not  oblige the investigating authority to make 
confidential information available to the anti-trust au thority, only to report the possible existence of 
monopolistic practices.   
 (ii) Would not this practice give rise to an inconsistency with Article 6.5 of the Anti-
Dumping Agreement, which provides that confidential information "shall not be 
disclosed without specific permission of the party submitting it"? 
 
Reply
 
  No. The investigating authority is not
 obliged to make confidential information available to 
the anti-trust authority. 
 
13. Article 89.A of the Mexican Law states that the interested parties may request the 
Ministry to decide whether a product is subject to a countervailing duty, and that there is a time-limit for issuing the final resolution.  G/ADP/Q1/MEX/10 
 G/SCM/Q1/MEX/10 
 Page 7 
 
 
  
Questions  
  (i) During the above-mentioned time-limit, is entry of the merchandise permitted? 
 
 (ii) If not, what would happen if the merchandise is a perishable product? 
 
Replies
 
 
 The initiation and handling of a procedure to establish whether a duty applies to a product 
does not prevent the importation of merchandise of any kind. Security may be posted for the countervailing duty and if, at the end of the procedure,  it is decided that the product in question is not 
subject to payment of any countervailing duties,  the security provided will be cancelled.  
 14. Article 89.B.III of the Mexican Law provides that the importation of goods from the same country of origin as the product subject  to a countervailing duty or safeguard measure 
that have relatively slight differences from the product in question is deemed to constitute 
circumvention.  Questions
 
 
 (i) By whom and under what conditions is a determination made that a product has 
"relatively slight differences"? 
 
Reply  
 
Such determinations are made by the Mexican  investigating authority. The conditions are 
determined on a case-by-case basis, taking into consid eration the particular circumstances of each. 
(ii) Is this not a violation of Article 2.6 of the WTO Anti-Dumping Agreement which 
defines the term "like product"? 
 
Reply  
  We consider that it is not
 a violation, given that an anti-circumvention proceeding does not 
aim to amend the definition of a like product.  
 
15. Article 89.D provides an opportunity for ex porters of goods subject to a countervailing 
duty who have not been investigated to request such investigation, but this opportunity is limited to those exporters who exported no such goods during the period of investigation and 
who also export after that period.  
Questions
 
  (i) Are the above limitations not contra ry to Article 6.10.2 of the WTO Anti-
Dumping Agreement, which places no restrictions on the submission of voluntary responses? 
 G/ADP/Q1/MEX/10 
G/SCM/Q1/MEX/10 Page 8 
 
 
 Reply
 
  Mexico feels that there is some confusion inherent in this question in that it associates Article 89.D of the Foreign Trade Act, which refers to the new exporter procedure, with Article 6.10.2 
of the Anti-Dumping Agreement, which deals with samples
. 
 
 (ii) What is the situation regarding export ers seeking to export for the first time to 
Mexico or those who had exported prio r to the period under investigation? 
 
Reply  
  Exporters may request the procedure provided for in Articles 89.D of the Foreign Trade Act and 9.5 of the Anti-Dumping Agreement for the purpose of having their individual dumping margin calculated. 
 
16. Article 89.F.IV provides that the Minist ry may "decide to extend the countervailing 
duty in effect for another five years follo wing the date on which the duty lapses”. 
 Question
 
 
 Is it not arbitrary to extend a countervailing duty for five years without making the 
length of that extension subject to an estimate of the possible duration of the dumping that is 
causing the injury?  
 
Reply  
 
 No. We consider this interpretation to be inco mplete, since it fails to take into consideration 
the provisions on reviews and examinations in both the Foreign Trade Act and Article 11 of the Anti-
Dumping Agreement. It should be noted that the Foreign Trade Act and the Regulations thereunder 
(revisions) include specific procedures for modifying or eliminating, where appropriate, anti-dumping 
duties. 
 
17. Article 93.V of the Mexican Law provides for the retroactive application of a measure.  
Article 10.6 of the WTO Anti-Dumping Agreement authorizes such application, subject to proof of critical circumstances, based on a time-limit of  90 days prior to the date of the provisional 
measure.  
 
Question
 
  Inasmuch as it specifies no criteria and establishes a time-limit of five months after initiation and in relation to the final measure, is the Mexican legislation not inconsistent with 
the WTO provisions? 
 
Reply
 
  No. Pursuant to the Mexican legal system, international agreements (such as the Anti-
Dumping Agreement) take precedence over federal laws. 
  G/ADP/Q1/MEX/10 
 G/SCM/Q1/MEX/10 
 Page 9 
 
 
  We wish to clarify that we did not go into greater depth in our replies to questions 8, 15 and 
17 given that Articles 64, 89.D and 93.V of the Foreign Trade Act are at issue in the dispute "Mexico - Definitive Anti-Dumping Measures on Beef and Rice" (WT/DS295). Mexico therefore reserves the 
right to provide no information other than that in this document whilst these Articles are subject to the 
said dispute.  
  
__________