WORLD TRADE  
ORGANIZATION  G/ADP/Q1/MEX/9 
G/SCM/Q1/MEX/9 22 March 2004 
 
(04-1258) 
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 the UNITED STATES1 
Regarding the Notification of MEXICO2 
   The following communication, dated 17 March 2004, is being circulated at the request of the delegation of Mexico. 
 
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1. Article 31 of the Decree amending, supplementing and repealing various provisions of 
the Foreign Trade Act (the "Decree") addresses, among other things, the use of third-country 
prices as a basis for normal value.  Please explai n how the requirement only to use the "highest" 
such price in determining the normal value is consistent with the requirement of Article 2.2 of the Anti-Dumping Agreement (ADA) that the th ird-country price be "comparable" to the 
export price.   
Reply
 
 The price referred to in Article 31.I of the Fore ign Trade Act is consistent with the provisions 
of Article 2.2 of the Anti-Dumping Agreement, give n that this clause establis hes that the price must 
meet the following requirements: it must be of goo ds exported in the ordinary course of trade and 
must be representative, in other words, it must meet the sufficiency requirement established in 
Footnote 2 of the Agreement.  2. The term "highest" price as used in Article 31 could be read to imply that a single third-
country price will be selected as the basis for no rmal value to be compared with the weighted 
average export price.  We note in this regard that Article 40 of  Mexico’s Regulations under the 
Foreign Trade Act
3 states: 
As a general rule, both the normal value and the export price shall be calculated 
on the basis of the weighted average figures obtained for the period of the 
investigation.  When the normal value is determined on the basis of the prices to which Article 31 of the Act refers, they shall be weighted according to the 
proportion of each transaction relative to  the total volume of sales in the country 
of origin or export to a third country, as appropriate. 
If amended Article 31 calls for use of a single price: 
                                                     
 
1 G/ADP/Q1/MEX/4-G/SCM/Q1/MEX/4 an d G/ADP/Q1/MEX/7-G/SCM/Q1/MEX/7. 
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. 
3 See page 16 of document G/ADP/N/1/MEX/1. G/ADP/Q1/MEX/9 
G/SCM/Q1/MEX/9 Page 2 
 
 
 
 (a) Does this reflect a view by Mexico that an individual-to-average comparison is 
authorized whenever third-country prices are used?   
 
 (b) How is this consistent with Article 2.4.1? 
  (c) Has Article 40 of the regulations been rescinded?     (d) If amended Article 31 does not call for use of a single price as a basis for normal 
value, i.e., if the referenced "highest" price is actually an average of prices, how 
will that average be constructed? 
 
Reply
 
 
 The price referred to in Article 31.I of the Foreign Trade Act  is the weighted average price of 
the sales operations of the goods under investigati on in the third export market. This price is 
compared with the weighted average price of th e sales operations of the same goods on the Mexican 
market. In other words, the comparison is of th e weighted average normal value and the weighted 
average export price for each product code under wh ich the merchandise in question is classified. 
 
 The weighting refers to the volume of the merchandise under investigation exported from the 
country of origin to a third country.   This Article is indeed consistent, since it favours the comparison between weighted averages, 
which is the practice in Mexico and is clearly la id down in Article 40 of the Regulations of the 
Foreign Trade Act, that is to say, there is no a ttempt to go against the provisions of this Article. 
 
3. Please explain under what circumstances foreign  counsel to a respondent company in a 
Mexican anti-dumping proceeding would be considered a "legal representative" of the respondent company, within the meaning of Article 51 of the Decree.    
Reply
 
 Article 51 establishes that companies interested in taking part in an investigation of unfair 
international trade practices shall appoint a legal representative in Mexico and that this legal 
representative shall demonstrate possession of prof essional qualifications and licence to practice, 
unless he is a member of the board of directors of  a Mexican company or the equivalent thereof. 
 4. Article 51 of the Decree appears to include within the term "legal representative" 
members of the board of directors of interested parties as well as in-house counsel for those parties.  Article 80 of the Decree provides that co nfidential information shall be made available 
to "legal representatives" of interested parties.  How is this apparent requirement for interested 
parties to turn over confidential informatio n to the members of the board of directors or 
in-house counsel of their competitors co nsistent with Article 6.5 of the ADA? 
Reply
 
 A legal representative of a company who is also a member of its board of directors may have 
access to any public information submitted during th e proceedings, but may not consult confidential 
information submitted by other interested parties. Th e basis for this is Article 160 of the Regulations 
of the Foreign Trade Act which states that, in order to be a legal representative with authorization to 
review confidential information, a person must not, during the previous year, have been a partner, a 
director or acted as a salaried agent or representative of the enterprise which he purports to represent.  G/ADP/Q1/MEX/9 
 G/SCM/Q1/MEX/9 
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5. Please clarify whether interested parties will be required to furnish non-confidential 
summaries of confidential information, as required by Art. 6.5.1 of the ADA. 
Reply
 
 Yes, under Article 153 of the Regulations of the Foreign Trade Act, interested parties  who 
classify their information as confidential must submit a public summary thereof.   
6. Articles 57 and 59 of the Decree decrease the am ount of time previously available to the 
authority to complete investigations.  What provisions, if any, permit the Administering 
Authority to extend these deadlines? 
Reply
 
 The period of time allowed for the completion of  an investigation may be extended, pursuant 
to Articles 5.10 of the Anti-Dumping Agreemen t and 11.11 of the Agreement on Subsidies and 
Countervailing Measures. 
 
7. Does the revision of Article 86 of the Decree require the administering authority to 
inform the competent Mexican authority of possible "monopolistic practices" discovered during an anti-dumping investigation?  Does it require the administering authority to inform competent foreign antitrust authorities?  If so, how is this provision consistent with Art. 6.5 of the ADA, prohibiting disclosure of confidential information without the specific permission of 
the party submitting it?  What information would the administering authority be required to 
provide to the competent authority in such a case? 
Reply
 
 Article 86 also provides for subsidy investiga tions and the provision refers only to Mexican 
antitrust authorities. 
 
8. Articles 39 (II) and 42 of the Decree refer to "threat of injury".  How is this consistent 
with Footnote 9 of the ADA, which refers to "threat of material injury"? 
Reply  
 The expression "threat of injury" in Articles 39 (II) and 42 of the Foreign Trade Act should be 
taken to mean "threat of material injury ", in accordance with Footnote 9 of the  Anti-Dumping 
Agreement. It should be noted that, under the Mexican legal system, the Agreement applies 
automatically; accordingly, where WTO Members are concerned, a determination of injury (in any 
form) will be carried out in accordance with  the provisions of Footnote 9 of the  Anti-Dumping 
Agreement.  9. Article 39 (III) of the Decree refers to "[r]etardation of the establishment of a domestic 
industry".  How is this consistent with Foot note 9 of the ADA, which refers to "material 
retardation"? 
Reply
 
 The expression "retardation of the establishment of a domestic industry" in Article 39 (III) of 
the Foreign Trade Act should be taken to mean "material retardation of the establishment of a 
domestic industry", in accordance with Footnote 9 of the  Anti-Dumping Agreement. It should be G/ADP/Q1/MEX/9 
G/SCM/Q1/MEX/9 Page 4 
 
 noted that, under the Mexican legal system, the Ag reement applies automatically; accordingly, where 
WTO Members are concerned, a determination of injury (in any form) will be carried out in accordance with the provisions of Footnote 9 of the  Anti-Dumping Agreement. 
 10. How are the provisions of the third paragra ph of Article 40 of the Decree, addressing 
the situation where all producers of the domestic  like product are related parties, consistent 
with Articles 2.6 and 4.1 of the ADA? 
Reply
 
 Under Article 40 of the Foreign Trade Act, when all of the producers are related to the 
exporters or importers, Mexico may  take as the domestic industry the manufacturers of the goods 
produced during the immediately preceding stage in th e same continuous line of production, and will 
do so provided that the goods in question meet the criteria set out in Article 2.6 of the Anti-Dumping Agreement. This Article is therefore consistent with the provisions of the Anti-Dumping Agreement. 
 11. (a) With respect to cumulation, Article 3.3 of the ADA requires that the 
investigations of the different countries be simultaneous, and also requires an 
analysis by the authority as to whether cumulation is appropriate in light of the conditions of competition between the imported products and between the imported and domestic products.  Article 43 of the Decree, concerning cumulation, does not contain any such provi sions.  How will Mexico ensure that  
Article 43 is applied consistently with Article 3.3 of the ADA? 
 (b) Is the cumulation provision set out in Article 43 mandatory or discretionary? 
Replies
 
 
(a) In Mexico, international treaties, in cluding the Anti-Dumping Agreement, apply 
automatically; any determination by the investigating authority pertaining to 
cumulation must therefore comply with Article 3.3 of the Agreement. Furthermore, it is important to note that the reform of the Regulations of the Foreign Trade Act provides for more detailed require ments concerning cumulation.  
(b) Article 43 is a discretionary provision. 
 
 
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