UNITED STATES – ANTI-DUMPING MEASURES ON OIL COUNTRY TUBULAR GOODS (OCTG) FROM MEXICO
Document: Recourse to Article 21.5 of the DSU by Mexico Request for the Establishment of a Panel
Date: 13 April 2007
Document codes: WT/DS282/14
Complainant: Mexico
Respondent: U.S.
Third parties: Argentina, Canada, China, Taiwan, EU, Japan, Venezuela, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. 1, 2, 3, 6, 11, 18  Anti-dumpingArt. VI, X  GATT 1994Art. XVI:4  Agreement Establishing the World Trade Organization

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 (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 :
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).

 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 Country 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).

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 determination 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

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 determination 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 American 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.

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.