./.  WORLD TRADE  
ORGANIZATION  G/SCM/113 
20 July 2004 
 (04-3124) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
MEXICO – PROVISIONAL COUNTERVAILING MEASURES ON 
IMPORTS OF OLIVE OIL FROM THE EUROPEAN COMMUNITY 
 
Request for Consultations by the European Community  
under Article 13.2 of the Agreement  
   The following communication, dated 14 July 2004, is being circulated at the request of the Delegation of the European Commission. 
 
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  Please find attached a request for consultati ons with Mexico on the provisional countervailing 
measures on imports of olive oil from the EC.  Thes e consultations are requested in accordance with 
Article 13.2 of the WTO Agreement on Subsidies and Countervailing Measures. 
  We propose that the consultations take place in  Geneva as soon as possible and before the end 
of July. G/SCM/113 
Page 2  
 
  The European Communities (“EC”) request c onsultations with Mexico on the provisional 
countervailing measures imports of olive oil from the EC.  These consultations are requested in 
accordance with Article 13.2 of the WTO Agre ement on Subsidies and Countervailing Measures 
(SCM Agreement).  They concern the initiation of a countervailing duty investigation with respect to 
imports of olive oil originating in the European Un ion published in the Diario Oficial de la Federación 
on 16 July 2003 and the subsequent imposition of provisional countervailing measures published in 
the Diario Oficial de la Federación of 10 June 2004.   The purpose of the consultations is to enable th e EC to clarify a number of issues arising from 
Mexico’s decisions to initiate the investigation a nd to impose provisional countervailing measures.  
The EC is concerned about the compatibility of  these decisions with the SCM Agreement, in 
particular Articles 1, 10, 11, 16 and 17 thereof.   The issues which the EC will raise during the consultations, relate inter alia to: 
 
1.  The “standing” of the domestic industry, i.e.  whether the complainant can be considered as 
“domestic industry” within the m eaning of Article 16 of the ASCM. 
 2.  The standards for initiating the investigation, in particular whether:  (a) prima facie  evidence 
was available with respect to th e existence of a domestic industry suffering any form of injury, 
(b) Mexico respected the obligation to review the accuracy and adequacy of the evidence provided in 
the application and (c) the applicati on was supported by a domestic industry. 
 3.  The basis on which Mexico decided to initiate an investigation on “injury” including material 
injury, threat thereof or material retardation), bear ing in mind that the complaint alleged only material 
retardation. 
 
4.  The basis on which Mexico decided that oliv e oil exporters are the recipient of the benefit, 
bearing in mind that that the direct beneficiaries of the aid under investigation are the growers.  The EC maintains that the subsidy has not been shown to  pass through to producers and exporters of olive 
oil, which is the product under investigation.   
5.  The method used by Mexico to calculate th e amount of the alleged subsidy and the subsidy 
margin, in particular how the subsidy was allocated over turnover.  6.  The Mexican findings on injury and causality  
7.   How Mexico exercised “due restraint” in  initiation this investigation, in view of the 
provisions of Article 13(b)(i) of the WTO Agreement on Agriculture.   The EC reserves it right to raise additional issues during the course of the consultations.   The EC looks forward to agreeing on a suitabl e date for holding these consultations. It is 
provisionally suggested that the consultations  take place in Geneva, as soon as possible. 
 
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