WORLD TRADE  
ORGANIZATION  WT/DS282/14 
13 April 2007 
 
 (07-1511) 
 Original:   Spanish 
  
 
UNITED STATES – ANTI-DUMPING MEASURES ON OIL COUNTRY 
TUBULAR GOODS (OCTG) FROM MEXICO 
 
Recourse to Article 21.5 of the DSU by Mexico
 
 
Request for the Establishment of a Panel 
 
  The following communication, dated 12 April 2007, from the delegation of Mexico to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 21.5 of the DSU. 
 
_______________ 
   Mexico hereby requests the establishment of a Panel under Article 21.5 of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes  (DSU) and paragraph 2 of the 
Agreement between Mexico and the United States Regarding Procedures under Articles 21 and 22 of 
the Dispute Settlement Understanding  (US–Mexico Sequencing Agreement)
1 with respect to the 
failure of the United States to implement the reco mmendations and rulings of the Dispute Settlement 
Body (DSB) in United States – Anti-Dumping Measures on O il Country Tubular Goods (OCTG) from 
Mexico  (WT/DS282). 
 
I. History of the dispute 
 
 On 28 November 2005, the DSB adopted the Appe llate Body Report and the Panel Report, as 
modified by the Appellate Body, in this disput e.  The resulting DSB recommendations and rulings 
related to the "likelihood of dum ping" determination by the United States Department of Commerce 
(USDOC) in the sunset review of the anti-dumpi ng duty order on OCTG from Mexico.  The Panel 
found that the United States acted inconsistently with Article 11.3 of the Agreement on Implementation of Article VI of the General Ag reement on Tariffs and Trade 1994 ("Anti-Dumping 
Agreement") in the sunset review for OCTG fro m Mexico because the USDOC determination that 
dumping was likely to continue or recur was not supported by reasoned and adequate conclusions 
based on the facts before it.
2  This finding was not appealed by the United States. 
  The United States and Mexico mutually agreed, pursuant to Article 21.3(b) of the DSU, that 
the reasonable period of time (RPT) for the Un ited States to implement the recommendations and 
rulings of the DSB would be six months, expiring on 28 May 2006.
3 
 
                                                      
1 United States – Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico:  
Understanding between Mexico and the United States Re garding Procedures under Articles 21 and 22 of the 
DSU   (WT/DS282/12), 14 July 2006. 
2 Panel Report, United States – Anti-Dumping Measures on  Oil Country Tubular Goods from Mexico  
(WT/DS282/R), adopted on 28 November  2005, paragraph 8.2. 
3 United States – Anti-Dumping Measures on Oil Country Tubular Goods from Mexico, Agreement 
under Article 21.3(b) of the DSU, 17 February 2006 (WT/DS282/11). WT/DS282/14 
Page 2  
 
   The United States did not adopt any measure to comply with the recommendations and 
rulings of the DSB by 28 May 2006.   On 9 June 2006, subsequent to the expiration of the RPT, the USDOC issued a determination 
under Section 129 of the Uruguay Round Agreements Act  (2006 Section 129 Determination) that 
purported to bring the United States into complian ce with the recommendations and rulings of the 
DSB and with the WTO obligations of the United States.
4  On 21 August 2006, Mexico requested 
consultations with the United States pursuant to Article 21.5 of the DSU and paragraph 1 of the 
US-Mexico Sequencing Agreement.5  The Parties held consultations in Washington DC on 
31 August 2006, but the consultations failed to resolve the dispute. 
 
II. Request for the establishment of a panel 
 
 Mexico asserts that it has a prima facie  case demonstrating that the US has not satisfied the 
conditions established in Article 11.3 of the Anti-Du mping Agreement such that it can continue the 
anti-dumping measure.  This fact, however, should not be interpreted as a recognition or acceptance 
by Mexico that it has the burden of proving so.  On  the contrary, in Mexico's view, as the party 
invoking the exception, continuing the measure, and now seeking to demonstrate that it is in compliance with the requirements for invoking th e exception, the United States has the burden of 
proving that continuation of the measure complies with Articles 11.3.  
 Mexico requests the establishment of a Panel pursuant to DSU Article 21.5 and paragraph 2 
of the US–Mexico Sequencing Agreement.   Mexico's claims are enumerated below.  1. The United States violates Articles 11.3 because it maintains its anti-dumping measure 
without a legal basis under the Anti-dumping Agreement 
 
 Mexico asks the Panel to rule that the lega l basis under the Anti-dumping Agreement for the 
continuation of the anti-dumping order by the United States lapsed on 28 May 2006.  At that moment, the only basis under the Anti-Dumping Agreement for the continuation of the anti-dumping order was 
the original, WTO-inconsistent USDOC determinati on.  The United States cannot continue an anti-
dumping order on the basis of an illegal original measure.   The time-bound limits contained in Article 11.3 and 11.4 of the Anti-Dumping Agreement 
and in the DSU for continuing the measure lapsed on 28 May 2006.  Accordingly, the 2006 
Section 129 determination issued on 9 June 2006 coul d not provide a legal basis for maintaining the 
anti-dumping order in accordance with Article 11.3.   Before the Panel and the Appellate Body Mexi co requested the termination of the measure.  
The DSB found that the United States did not meet the Article 11.3 conditions.  However, under the DSU, the United States was granted a reasonable pe riod of time to bring its measure into conformity 
with its WTO obligations.  When the United States failed to adopt any implementing measures by the 
time of the expiration of the RPT on 28 May 2006, its right under Article 11.3 to maintain the duty 
lapsed.  On that date, the measure had to be term inated.  Consequently, Mexico requests the Panel to 
                                                     
 
4 Memorandum to David M. Spooner, Assist ant Secretary for Import Administration, from 
Stephen J. Claeys, Deputy Assistan t Secretary for AD/CVD Operations, Section 129 Determination:  Final 
Results of Sunset Review, Oil Co untry Tubular Goods from Mexico , A-201-817, 9 June 2006. 
5 United States – Anti-Dump ing Measures on Oil Country Tubular  Goods from Mexico, Recourse to 
Article 21.5 of the DSU, Request for Consultations, 24 August 2006 (WT/DS282/13).  WT/DS282/14 
 Page 3 
 
 
  rule that by continuing the measure beyond that date , the United States has violated Article 11.3 and 
that the 2006 Section 129 Determination cannot  retroactively "cure" that violation. 
 
2. The 2006 Section 129 Determination is inconsistent with the WTO obligations of the 
United States 
 
 The 2006 Section 129 Dete rmination was not supported by reasoned and adequate 
conclusions based on the facts before the USDOC.   The USDOC did not properly establish a factual 
basis or objectively assess the facts that were befo re it as to whether dumping would be likely to 
continue or recur.  The USDOC's conclusions are not reasoned and not based on positive evidence, 
and the evidence developed does not support a WTO-c onsistent determination that dumping would be 
likely to continue or recur.  The 2006 Section 12 9 Determination is thus inconsistent with the 
WTO obligations of the United States.  Specifically:  
• The USDOC failed to comply with the stri ct conditions for the maintenance of an 
anti-dumping duty order beyond five years, in violation of Articles 11.1 and 11.3 of 
the Anti-Dumping Agreement. 
 
• The USDOC failed to rely on positive evidence and did not evaluate the facts, in an 
unbiased and objective manner, in maki ng findings and reac hing conclusions 
regarding the Mexican exporters Tubos de Acero de Mexico S.A. (TAMSA) and Hylsa S.A. de C.V. (Hylsa), in violation of US obligations under Article 11.3 of the Anti-dumping Agreement.  The USDOC im properly determined that dumping was 
likely, despite positive evidence on the reco rd demonstrating that the only dumping 
margin ever calculated for the Mexican  exporters was not probative of likely 
dumping in this case.  This positive evidence included TAMSA's demonstrated ability to export to the United States without dumpi ng, and TAMSA's demonstration that the 
conditions that led to the only dumping marg in in the history of the case (TAMSA's 
foreign currency exposure at the time, and the significant devaluation of the Mexican 
peso) were unlikely to recur. 
 
• In the 2006 Section 129 Determination, the USDOC inferred likely dumping based on 
the decline in volume of Mexican OCTG exports to the United States after the 
imposition of the anti-dumping order.  The USDOC did not evaluate in an unbiased 
and objective manner the evidence provided by TAMSA to explain the reasons for 
the volume decline.  Nor did the USDOC est ablish that the volume decline in this 
case was not probative of likely dumping.  The USDOC's inference of likely dumping is inconsistent with Article 11.3. 
 
• As purported "evidence of continued dum ping," the 2006 Section 129 Determination 
relied on the preliminary determination in the Fourth Administrative Review that 
Hylsa was dumping at a margin of 1.47 per cent.  The USDOC's reliance on the 
alleged "continued dumping" by Hylsa is  inconsistent with the United States' 
WTO obligations for several reasons: 
 
- The dumping margin was preliminary;  it was not a final determination of 
dumping.  Therefore, it is not positive evidence of continued dumping for the 
purposes of a WTO-consistent dete rmination under Article 11.3. 
 
- The USDOC merely asserted that this preliminary determination was 
evidence of dumping, yet it failed to establish in the Section 129 
Determination any factual basis  for this assertion.  The USDOC did not WT/DS282/14 
Page 4  
 
  include in the administrative record of the case any information relating to 
the calculation of this preliminary margin. 
 
- The preliminary dumping margin in the Fourth Administrative Review was 
calculated on the basis of the WTO-inconsistent practice of "zeroing."
6  
Therefore, the preliminary dumping margin  is inconsistent with Articles 2, 
including 2.1, 2.4, 2.4.2, and 9, including 9.3, of the Anti-Dumping Agreement, and it is not positive evidence of continued dumping for the purposes of a WTO-consistent dete rmination under Article 11.3. 
 
- While the 2006 Section 129 Determination noted that the results of the 
USDOC's Fourth Administrative Revi ew were "currently subject to 
litigation," it did not reflect that the USDOC had calculated a zero dumping margin in its redetermination on rema nd in connection with that litigation 
under Chapter XIX of the North Amer ican Free Trade Agreement (NAFTA).
7  
By relying on a finding of dumping by Hylsa after the USDOC had already 
issued a determination that Hylsa was not dumping, the USDOC failed to evaluate the evidence in an unbiased a nd objective manner, in violation of 
US obligations under Article 11.3 of the Anti-Dumping Agreement. 
  For all the reasons identified above, the Un ited States also failed to comply with its 
obligations under Articles 1 and 18.1 of the An ti-Dumping Agreement and Article XVI:4 of the 
Agreement establishing the WTO.  
III. Request 
  Mexico requests the Panel to find (i) that the legal basis for continuing the anti-dumping 
measure lapsed on 28 May 2006 with the failure by the United States to adopt any measures to bring 
itself into compliance;  and (ii) that the 9 June 2006 Section 129 determination did not bring the United States into compliance with its obligations.  Mexico considers that under the circumstances, 
the only way the United States can comply with its WT O obligations is by terminating the measure.  
Therefore, Mexico requests the Panel to suggest to  the United States that it terminate the measure. 
 
__________ 
 
 
                                                     
 
6 In addition, the preliminary dumping margin wa s based on an unreasonable treatment of Hylsa's 
packing costs, and an unr easonable treatment of the cost of producing OCTG in different months. 
7 This rate was then lowered to 0.79 percent twelve  days after the sunset determination, and thereafter 
subsequently determined to be zero  percent following the remand proceeding conducted pursuant to a NAFTA 
panel ruling.  See NAFTA Panel Decision and Remand Order, Oil Country Tubular Goods from Mexico, USA-
MEX-2001-1904-05, January 27, 2006; U.S. Department of Commerce, Redetermination on Remand, In the 
Matter of: Oil Country Tubular Goods from Mexico; Final Results of Antidumping Duty Review and Determination Not to Revoke, April 27, 2006; see also Panel Decision and Remand Order, Oil Country Tubular 
Goods from Mexico, USA-MEX-2001-1904-05, August 11, 2006.