. /.   WORLD TRADE  
ORGANIZATION  G/ADP/Q2/BRA/2 
9 January 2007 
 
 (07-0080) 
Committee on Anti-Dumping Practices Original:   English 
  
ANTI-DUMPING MEASURES IMPOSED ON PVC IMPORTED 
FROM MEXICO 
 
Responses to Questions Posed by MEXICO to BRAZIL
1 
  
 The following communication, dated 4 January 2007,  is being circulated at the request of the 
delegation of Mexico.  
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I. MATTER OF PROOF TO THE CHANGE OF THE DECISION 
Q1. Mexico considers that determinations by an  investigating authority should be based on 
factual evidence and on a prospective analysis in  order to substantiate the continuation or 
recurrence of dumping or injury.  However, it appears that in its disclosure of the essential 
facts, the Brazilian investigating authority did not include information on the future evolution 
or estimates of trends in the prices and vol ume of the imports under examination and neither 
did it take into account the prospective situat ion of Brazil's PVC industry if the anti-dumping 
duties were eliminated.  In this connection, inasmuch as the investigating authority decided to eliminate the anti-dumping duties, on the basis of essential facts, considering that it did not have any additional elements as a result of the admi nistrative appeal made by the Brazilian company 
and taking into account the fact that the me thodology used to determine injury had been 
confirmed, could the Government of Brazil explain what factual basis was used to change its decision to revoke the anti-dumping duties on Mexican exports? 
 
Reply
 
 
 The methodology used by Brazilian authority to verify whether the injury would be likely to 
recur if the duty were removed was confirmed in  the final report, meaning that the comparison 
between the likely export price (weight average of the prices of Brazilian imports of PVC-S) in the analysis period (US$ 781.68/ton) and the price of dom estic industry (US$ 775.43/ton) did not lead to 
the conclusion of likelihood of recur of the injury , despite the fact that there was the possibility of 
recurrence of the dumping and there was a consider able export potential of the Mexican exporter. 
 Nevertheless, it was verified, based on the data of the Mexican company, that the exports of 
that company to third countries,  excepted Argentina (where there is an anti-dumping duty imposed) 
and Chile, would enter in Brazil at a lower level th an US$ 781.68/ton, which is a lower price than the 
weight average price of Brazilian imports of the produc t.  It demonstrates that  there is an effective 
possibility of the Mexican company export at a lo wer price than the likely export price calculated. 
 In addition, taking into account the four major destinations of Mexican exports of PVC-S, the 
export prices of the Mexican company to third countries are lower than the Brazilian domestic 
                                                     
 
1 G/ADP/Q2/BRA/1. G/ADP/Q2/BRA/2 
Page 2  
 
  industry.  Even when it is considered a weight average export price of the sales of the Mexican 
exporter to third countries (US$ 704.97/ton), it is possi ble to see that this price is lower than the price 
of Brazilian domestic industry, which leads to the c onclusion of the likely recurrence of the injury if 
the imposition of the duty is terminated. 
 In sum, the factual basis that made Brazilian authorities to change their decision of terminate 
the imposition of the duty was the data of the Mexican  exporter that demonstrates that, terminated the 
imposition of the anti-dumping duty, the Mexican export price is likely to be lower than the price of Brazilian domestic industry. 
II. DISCLOSURE:  TRANSPARENCY 
Q.2 Simply as a question of transparency, it  is not clear to us whether the document 
disclosing the essential facts contains all th e factual circumstances used by the Brazilian 
investigating authority or only a part thereof.   Consequently, we would like to know how the 
arguments submitted by the Mexican exporter were evaluated. 
 
Reply
 
 
 Every fact considered as essential by Brazilia n investigating authorit y was presented on the 
report of essential facts under consideration.  Inde ed, it has been presented as relevant to the final 
analysis the points raised by the Mexican exporter,  related to the PVC-S excess of offering in the 
World and in NAFTA, as well as the equivocally cumulative analysis (export capacity of Mexico summed with export capacity of United States) made by Brazilian authority.  It is important to 
mention that the same points were repeated on th e Mexican exporter submission after the disclosure. 
 In the final report elaborated by the Braz ilian authority and fully accessible by interested 
parties there were comments about each relevant poin t raised by Mexican exporter, having all them 
been evaluated, even when having not been considered adequate. 
III. DESTINATION OF MEXICAN FREE DISPOSABLE EXPORT CAPACITY 
Q.3 Likewise, Mexico would like to know how the Brazilian investigating authority became 
certain that Mexico's freely available capacity was intended for the Brazilian market, bearing in 
mind that Mexico's major export markets have tr aditionally been the United States, the United 
Kingdom, Chile and the Dominican Republic. 
 
Reply
 
 
 The available data demonstrates that the e ffective production capacity of Mexico has grown 
over the period of analys is, representing 89 per cent of Brazilian production capacity on the last 
period.  Besides that, the Mexican exportable excess of PVC-S represented 18.4 per cent of Brazilian production and 19.4 per cent of the Brazilian market .  That excess, summed to the likelihood of 
recurrence of dumping if the duty is terminated, leads to the conclusion that there is no reason to deny 
the possibility that the export to Brazil, at dumped  prices and with the possibility to reach 19.4 per 
cent of market share, would make the country a probable destination to the Mexican exports. 
 In addition, the analysis made according to th e paragraph 6 of Article 14 of Decree 1.602, of 
1995, which repeats the Article 3.3 of AAD, cumu lating the export capacity of Mexico with the 
export capacity of United States, demonstrated th at the excess of export capacity represented almost 
twice the Brazilian market in the last period. 
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