WORLD TRADE
ORGANIZATIONWT/DS156/2
20 July 1999
(99-3020)
Original: Spanish
GUATEMALA - DEFINITIVE ANTI-DUMPING MEASURE
ON GREY PORTLAND CEMENT FROM MEXICO
Request for the Establishment of a Panel by Mexico
The following communication, dated 15 July 1999, from the Permanent Mission of Mexico to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.
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Following consultations and a dispute settlement procedure between the Governments of
Mexico and Guatemala, on 19 June 1998 the Panel in the case Guatemala - Anti-Dumping
Investigation Regarding Portland Cement From Mexi co issued its Report (WT/DS60/R) in which it
concluded, inter alia , that Guatemala had violated the provisions of the Agreement on Implementation
of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter the Anti-Dumping
Agreement):
- By failing to notify the Government of Mexico before proceeding to initiate the
investigation, as required by Article 5.5 of the Anti-Dumping Agreement;
- by initiating the investigation when there was not sufficient evidence to justify
initiation, as required by Article 5.3 of the Anti-Dumping Agreement.
The Panel therefore recommended that the Dispute Settlement Body should request
Guatemala to bring its action into conformity with its obligations under the Anti-Dumping
Agreement.
The Panel concluded that the entire investigation rested on an insufficient basis, and therefore
should never have been conducted.  It also determined that it was a violation which could not be
corrected during the course of the ensuing inve stigation.  Consequently, the Panel suggested that
Guatemala revoke the existing Anti-Dumping Measure on imports of Mexican cement as the onlyappropriate means of implementing its recommendation.
On 2 November 1998, in document WT/DS60/ AB/R, the Appellate Body reversed the
conclusion reached in paragraph 7.27 of the Report of the Panel that the matters referred to in
Mexico's request for the establishment of a panel were properly before it.  However, not havingexamined the merits of the case, the Appellate Body itself recognised Mexico's right to seek new
consultations regarding the definitive anti-dumping measure imposed by the Government of
Guatemala, and where appropriate, to pursue another complaint under the dispute settlement
mechanism.
On 5 January 1999, the Government of Mexico requested consultations with the Government
of Guatemala under Article 7.3 of the Anti-Dumping Agreement, Article 4 of the Understanding onWT/DS156/2
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Rules and Procedures Governing the Settlement of Disputes (hereinafter the DSU), and Article XXIII
of the General Agreement on Tariffs and Trade 1994 (hereinafter the GATT 1994) concerning the
definitive measure to collect definitive anti-dumping duties (definitive anti-dumping measure)
imposed on imports of grey portland cement from th e Mexican firm Cooperativa La Cruz Azul S.C.L.
(Cruz Azul) as well as the actions that preceded it.  These consultations were held on23 February 1999.
Since the consultations failed to settle the dispute, Mexico hereby challenges the definitive
anti-dumping measure imposed by Guatemala on im ports of grey portland cement from Cruz Azul
through the final resolution, "Resolution 000113", published in the Diario de Centro América  on
30 January 1997, as well as the actions that preceded it, including the provisional anti-dumping
measure and various matters relating to the initiation of the investigation and the anti-dumpingproceeding, as being contrary to Guatemala's obligations under Article VI of the GATT 1994 and
Articles 1, 2, 3, 5, 6, 7, 9, 10, 12 and 18 of the Anti -Dumping Agreement as well as Annexes I and II
of the Anti-Dumping Agreement.  Mexico's complaints are as follows:
A. The application submitted by the firm Cementos Progreso S.A. and the subsequent initiation
of the investigation by the Guatemalan authority did not comply with the requirements set forth in
Articles 1, 2, 3, 5, and 12 of the Anti-Dumping Agreement.  Mexico has the following specific
complaints with respect to this stage:
1. Contrary to the provisions of Article 5.2 of the Anti-Dumping Agreement, the
application for initiation did not include relevant evidence of dumping, threat of
injury and a causal link between the two as defined in Articles 2 and 3 of that
Agreement.
2. The Guatemalan authority violated the provisions of Article 5.3 of the Anti-Dumping
Agreement by not examining the accuracy a nd adequacy of the evidence provided in
the application.  In this respect, the Ministry of the Economy also violated Article 5.3
by initiating the investigation without sufficient evidence to justify such initiation.
3. The Guatemalan authority violated the provisions of Article 5.8 of the Anti-Dumping
Agreement by not rejecting the application submitted by Cementos Progreso S.A. and
promptly terminating the investigation when there was not sufficient evidence of
dumping or threat of injury, as defined in Articles 2 and 3 of the Anti-DumpingAgreement, to justify proceeding with the case.
4. The Government of Guatemala also failed to comply with the provisions of
Article 5.7 of the Anti-Dumping Agreement by not simultaneously considering the
evidence of both dumping and threat of injury, as defined in Articles 2 and 3 of theAnti-Dumping Agreement, in deciding whether or not to initiate the investigation.
5. Furthermore, the Ministry of the Economy violated Article 5.5. of the Anti-Dumping
Agreement by failing to notify the Government of Mexico before proceeding to
initiate the investigation through the publication of the notice of initiation on11 January 1996.
6. In addition to its failure to ensure that there was sufficient evidence under Article 5 of
the Anti-Dumping Agreement, Guatemala did not comply in a timely manner with its
obligation under Article 12.1 of the Anti-Dumping Agreement to notify theGovernment of Mexico and Cruz Azul.WT/DS156/2
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7. Similarly, the public notice of initiation fails to comply with the requirements of
Article 12.1.1 of the Anti-Dumping Agreement by not supplying adequate
information on the basis on which dumping is alleged in the application or a summary
of the factors on which the allegation of threat of injury is based.
8. Guatemala failed to comply with its obligations under Article 1 of the Anti-Dumping
Agreement by initiating an investigation in contravention of the provisions of the
Anti-Dumping Agreement, in particular those indicated in indents 1 to 7 above.
B. The Government of Guatemala acted in cont ravention of Article 6.1.3 of the Anti-Dumping
Agreement by failing to provide the full text of the written application to the exporter, Cruz  Azul, and
to the Government of Mexico as soon as the investigation had been initiated.
C. The provisional anti-dumping measure imposed by the Ministry of the Economy of
Guatemala on 28 August 1996 viol ated Articles 7 and 12 of the Anti-Dumping Agreement with
respect to Articles 2, 3 and 5 of that Agreement, as well as Articles 1 and 18 of the Anti-Dumping
Agreement and Article VI of the GATT 1994.
1. The provisional measure, which had a significant impact, was imposed in
contravention of Article 7.1 of the Anti-Dumping Agreement for the following
reasons:
(a) The investigation was not initiated in accordance with Article 5 of the
Anti-Dumping Agreement, nor was Cruz Azul given adequate opportunities
to submit information and make comments.
(b) A preliminary affirmative determination of dumping was not properly made
under Article 2 of the Anti-Dumping Agreement, inter alia  because no valid
determination had been made of normal value or of the export price.
(c) Guatemala's preliminary determination of threat of injury is contrary to
Article 3 of the Anti-Dumping Agreement, inter alia  because:  (i) it does not
comply with obligation for such determinations to be based on fact and not
merely on allegation, conjecture or remote possibility;  (ii) because theMinistry of the Economy did not properly consider the factors set forth in that
Article of the Anti-Dumping Agreement;  (iii) because there is no
demonstration of the causal relationship between the dumped imports and the
threat of injury to the domestic industry as required under Article 3.5 of the
Anti-Dumping Agreement;  (iv) because the decision to apply anti-dumpingmeasures was not examined with special care in conformity with Article 3.8
of the Anti-Dumping Agreement.  Consequently, the Guatemalan authority
could not validly judge the provisional measures necessary, under Article 7.1
of the Anti-Dumping Agreement, to prevent injury being caused to thedomestic industry of Guatemala during the investigation.
2. By applying the provisional anti-dumping measure in contravention of Article 7.1 of
the Anti-Dumping Agreement, Guatemala violated the provisions of Article VI of the
GATT 1994 and Articles 1 and 18 of the Anti-Dumping Agreement.
3. The public notice of imposition of the provisional measure of 28 August 1996 failed
to comply with the requirements of Article 12.2.1 of the Anti-Dumping Agreement
by not providing sufficiently detailed expl anations for the preliminary determination
on dumping.  In particular, it failed to provide a full explanation of the reasons for theWT/DS156/2
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methodology used in the establishment and comparison of the export price and the
normal value under Article 2 of the Anti-Dumping Agreement.  It also failed to
provide sufficiently detailed explanations of the considerations relevant to the
preliminary threat of injury determination as set out in Article 3 of the Anti-DumpingAgreement.
D. Mexico considers that many of the actions of the Guatemalan Ministry of the Economy
during the investigation, including the provisional measure, were contrary to a number of Guatemala's
obligations under different articles of the Anti-Dumping Agreement, procedural violations which had
a direct impact on the result of the investigation and ultimately on the consequent imposition of adefinitive anti-dumping measure which also violates Article VI of the GATT 1994 and the
Anti-Dumping Agreement, inter alia , for the following reasons:
1. By failing to establish a precise period of time for submitting evidence and not setting
a time-limit for admitting and receiving evidence, Guatemala violated Articles 6.1
and 6.2 of the Anti-Dumping Agreement.
2. The investigating authority of Guatemala denied Cruz Azul the opportunity to
examine the information used by the Ministry of the Economy in the course of the
investigation, violating Articles 6.1.2, 6.2 and 6.4 of the Anti-Dumping Agreement.
3. By failing to satisfy itself as to the accuracy of the information supplied by the
applicant firm Cementos Progreso S.A. on which it based its conclusions throughout
the various stages of the investigation, the Guatemalan authority failed to comply
with its obligation under Article 6.6 of the Anti-Dumping Agreement.
4. By extending the period of investigation in the ninth month following the initiation
thereof without justifying its decision, Guatemala violated Article 6.2 and
paragraph 1 of Annex II of the Anti-Dumping Agreement.
5. Guatemala wrongly asked Cruz Azul for information on costs corresponding to both
periods of investigation - the period originally indicated and the extended period -
when the anti-dumping investigation was initiated on prices.  This action violated
Article 2.4 of the Anti-Dumping Agreement.
6. By conducting a verification visit of Cruz Azul without the firm's express consent, the
Guatemalan investigating authority violated the provisions of Articles 2.4 and 6.7 and
paragraphs 3, 7 and 8 of Annex I of the Anti-Dumping Agreement.
7. By rejecting the technical accounting evidence concerning the normal value and the
export price of Cementos Cruz Azul during the period of investigation originally
established, Guatemala acted in contravention of Articles 6.1, 6.2 and 6.8 of the
Anti-Dumping Agreement.
8. The Guatemalan authority accepted confidential information from Cementos
Progreso S.A. without provision of a public version thereof, justification of the
confidential nature of the information or timely transmission to Cruz Azul of the
documentation submitted by Cementos Progreso S.A., thus violating the provisions of
Articles 6.1, 6.2, 6.3 and 6.5 of the Anti-Dumping Agreement.
9. The Guatemalan investigating authority did not inform Cruz Azul in a timely manner
of the essential facts that would be taken into consideration in imposing the definitiveWT/DS156/2
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anti-dumping measure, and therefore violated Cruz Azul's right to defend its interests
under Article 6.9 of the Anti-Dumping Agreement.
10. In the final stage of the proceeding, the Ministry of the Economy changed the
determination of threat of injury made when the investigation was initiated and whenthe provisional measure was imposed to a determination of injury.  It did so without
giving Cruz Azul any opportunity to defend its interests or to present relevant
evidence, in violation of the provisions of Articles 6.1 and 6.2 of the Anti-Dumping
Agreement.
E. By applying the definitive anti-dumping measure without properly complying with the
relevant requirements, Guatemala violated Ar ticles 1, 2, 3, 9, 12 and 18 of the Anti-Dumping
Agreement.  The application of the definitive measure in such circumstances contravenes Article VI
of the GATT 1994.  The specific complaints are as follows:
1. In making its definitive determination of dumping, the Guatemalan authority did not
make a valid determination of the normal value or of the export price, and hence ofthe margin of dumping, in conformity with Article 2 of the Anti-Dumping
Agreement.
2. The Ministry of the Economy changed, without justification, the determination of
threat of injury made when the investigation was initiated and the provisionalmeasure imposed to a definitive determination of injury.  This change was made
without an objective examination by the authority based on affirmative evidence of
the alleged threat of injury, or of injury, under Article 3 of the Anti-Dumping
Agreement.
3. The Guatemalan authority could not establish a causal relationship between the
allegedly dumped imports and the alleged injury to the Guatemalan domestic industry
in conformity with Article 3.5 of the Anti-Dumping Agreement.
4. Similarly, the public notice of conclusion by which an affirmative determination was
reached to impose a definitive duty does not comply with the requirements of Article
12 of the Anti-Dumping Agreement in that it does not contain all relevant information
on the matters of fact and law, nor does it provide sufficiently detailed explanations
of the reasons that led the Guatemalan authority to impose the definitive measure or
to make several of its determinations, for example, the unjustified change of threat of
injury to injury.
5. Since the Guatemalan authority failed to make a valid determination of dumping, of
the alleged threat of injury or the alleged injury, or to demonstrate the causal
relationship between them in conformity with Articles 2 and 3 of the Anti-Dumping
Agreement both upon initiating the investigation and upon imposing the provisional
and definitive measures,  and in view of the violations of Articles 5, 6, 7 and 12 of theAnti-Dumping Agreement committed at the initiation and in the course of the
investigation, Guatemala applied a definitive anti-dumping measure to grey portland
cement from the firm Cruz Azul without properly meeting the relevant requirements.This, in its turn, constitutes a violation of Article VI of the GATT 1994 and of
Articles 1, 9 and 18 of the Anti-Dumping Agreement.
F. The definitive anti-dumping measure impos ed by Guatemala on imports of grey portland
cement from Cruz Azul and the actions preceding the imposition during the course of the
investigation, including the provisional anti-dumping measure, nullify and impair the benefitsWT/DS156/2
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accruing to Mexico under the GATT 1994 Anti-Dumping Agreement, in particular Article VI of the
GATT 1994 and Articles 1, 2, 3, 5, 6, 7, 9, 12 and 18 of the Anti-Dumping Agreement and Annexes I
and II to that Agreement in that they involve:  (i) the initiation of an investigation without sufficient
evidence;  (ii) the imposition of a provisional anti-dumping measure and a definitive anti-dumping
measure without complying with the disciplines of the Anti-Dumping Agreement;  and (iii) a numberof procedural violations prejudicial to the righ ts of Mexico and Cruz Azul.  If Guatemala had
complied with the mentioned provisions, it would never have initiated or conducted the investigation
much less imposed provisional and definitive anti-dumping measures which affect Mexico's exports
of grey portland cement.  In this connection, it should be mentioned that the Mexican exports of grey
portland cement under investigation were severely affected.
For all of these reasons, and in conformity with Article 17 of the Anti-Dumping Agreement
and Article 6 of the DSU, Mexico respectfully requests the establishment of a panel to:
(a) Examine, in the light of Article VI of the GATT 1994 and the Anti-Dumping
Agreement, the matter referred to the DSB by Mexico on the basis of this request and
of the direct precedents to this WTO dispute as set forth in the Report of the Panel(WT/DS60/R) and of the Appellate Body (WT/DS60/AB/R);
(b) conclude that the definitive anti-dumping measure imposed by Guatemala and the
actions preceding that measure, including the provisional measure, constitute
violations of Article VI of the GATT 1994 and the articles of the Anti-Dumping
Agreement mentioned in this request;
(c) recommend that Guatemala bring its measure into conformity with Article VI of the
GATT 1994 and the Anti-Dumping Agreement;
(d) suggest that Guatemala revoke the anti-dumping measures and refund the
anti-dumping duties collected under those measures.
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