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 Consultations
Date: 24 August 2006
Document codes: WT/DS282/13
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 Consultations

 The following communication, dated 21 August 2006, from the delegation of Mexico to the
delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated
pursuant to Article 21.5 of the DSU.

 Mexico hereby requests the United States to en ter into consultations under Articles 4 and 21.5
of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and
paragraph 1 of the Agreement between Mexico and the Un ited States Regarding Procedures under
Articles 21 and 22 of the Dispute Settlement Understanding
1 with respect to the disagreement as to the
existence or consistency with the covered agreem ents of the measures taken to comply with the
recommendations and rulings of the Dispute Settlement Body (DSB) in (WT/DS282).

1. Background
 On 28 November 2005, the DSB adopted the Appe llate Body Report and the Panel Report, as
modified by the Appellate Body, in this dispute. The resulting DSB rulings related to the "likelihood
of dumping" determination by the US Department of Commerce (USDOC) in the sunset review of the
anti-dumping duty order on OCTG from Mexico. The Panel found that the USDOC's likelihood of
dumping determination in the sunset review fo r OCTG from Mexico was inconsistent with
Article 11.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 (the Anti-Dumping Agreement). 2 The Panel's findings in this regard were 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 WT/DS282/12.
2 Panel Report, , WT/DS282/R, adopted on 28 November 2005, paragraph 8.2.
3 ,
Agreement under Article 21.3(b) of the DSU, 17 February 2006, WT/DS282/11.

 On 9 June 2006, subsequent to the expiration of the RPT, the USDOC issued a Determination
under Section 129(b) of the Uruguay Round Agreements Act that purported to bring the United States
into compliance with the recommendations and rulings of the DSB and with the WTO obligations of
the United States.
4

 Mexico considers that the United States h as failed to implement the recommendations and
rulings of the DSB, and is in breach of its WTO obligations, for the following reasons:

2. The United States did not implement the recommendations and rulings of the DSB
 The USDOC issued the Section 129 Determination on 9 June 2006, i.e. subsequent to
28 May 2006, the agreed expiration date of the RPT. Besides the fact that th e USDOC failed to issue
its implementation decision within the RPT a nd unduly maintained an anti-dumping order, in
Mexico's view, the USDOC's Section 129 Determ ination and the continued existence of the
anti-dumping duty order on OCTG from Mexico are inconsistent with the obligations of the
United States under the Anti-Dumping Agreement. 5 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. USDOC's conclusions are not based on positive eviden ce, and the evidence
developed does not support a WTO-consistent de termination that dumping would be likely to
continue or recur consistent with the requirements of Article 11 of the Anti-Dumping Agreement:

• The United States failed to comply with the strict conditions for the maintenance of the
anti-dumping duty order beyond five years, in violation of its obligations under
Article 11.1 and 11.3 of the Anti-Dumping Agreement;

• The USDOC's inference of likely dumping based on the decline of Mexican OCTG
imports subsequent to the entry into fo rce of the anti-dumping duty order, and the
USDOC's reliance on the Mexican OCTG vol ume decline to support the Section 129
Determination, are inconsistent with US obligations under Article 11.3 of the
Anti-Dumping Agreement;

• The USDOC failed to rely on positive evid ence and did not objectively assess the facts
in making findings and reaching 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. These violations included:

o The USDOC's failure to ascribe probativ e value to TAMSA's three consecutive
zero dumping margins for the purposes of th e Section 129 determination, which
is inconsistent with US obligations under Article 11.3 of the Anti-Dumping
Agreement;

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 Mexico notes that nearly iden tical arguments and reasoning that USDOC has used to support the
Section 129 Determination have so far been rejected three times by a NAFTA panel reviewing successive
remand determinations issued by US DOC in the context of a NAFTA pr oceeding with respect to USDOC's
sunset determination. See Panel Decision and Remand Order, Oil Country Tubular Goods from Mexico ,
USA-MEX-2001-1904-03, 11 February 2005, ("First NAFTA Panel Decision and Remand Order"); Panel
Decision and Remand Order, Oil Country Tubular Goods from Mexico , USA-MEX-2001-1904-03,
3 February 2006 ("Second NAFTA Panel Decision and Remand Order"); Panel Decision and Remand Order,
Oil Country Tubula r Goods from Mexico , USA-MEX-2001-1904-03, 28 July 2006 ("Third NAFTA Panel
Decision and Remand Order").

o The USDOC's findings regarding the "other factors" identified by TAMSA
concerning the impact that the 1994 pe so devaluation and TAMSA's long-term
US dollar denominated debt had on the margin of dumping during the original
investigation, and hence whether the original dumping margin and these two
factors could be probative of the likelihood of recurrence of dumping, which are
inconsistent with US obligations un der Article 11.3 of the Anti-Dumping
Agreement;

Other violations of the WTO obligations of the United States include:

• The USDOC's reliance as purported "evi dence of continued dumping" on the
preliminary determination that Hylsa was dumping at 1.47 per cent from the fourth
administrative review of the anti-dumping or der on OCTG from Mexico. The 1.47 per
cent margin was calculated by the USDOC using the practice known as "zeroing,"
6
which is inconsistent with the United States ' WTO obligations. In relying on a margin
calculated through a "zeroing" methodology, and by relying on a finding of "dumping"
by Hylsa after USDOC had already issued a determination that Hylsa was not dumping,
the USDOC acted inconsistently with US oblig ations under Articles 2, 9, and 11 of the
Anti-Dumping Agreement. Additionally, in relation to the pending NAFTA litigation
to which the USDOC makes reference, the Section 129 Determination does not reflect
the fact that USDOC has calculated a zero dumping margin in its redetermination on
remand in connection with that NAFTA litigation.
7

• The decision of the US Trade Representativ e not to direct the USDOC to "implement"
the Section 129 Determination, pursuant to Section 129(b)(4) of the Uruguay Round
Agreements Act, which is inconsistent w ith US obligations under Article 13 of the
Anti-Dumping Agreement. In failing to impl ement the Section 129 Determination, the
United States has denied the Mexican respondents an opportunity for judicial review in
US courts of the determination purportedly providing the basis for the United States to
continue the imposition of anti-dumping duties on OCTG from Mexico.

 As a consequence of the violations enumerated above, the United States has failed to bring its
measures into conformity with its WTO obligatio ns within the meaning of Article 18.4 of the
Anti-Dumping Agreement and Article XVI:4 of th e Marrakesh Agreement Establishing the WTO.
The United States has also breached Articles 1 and 18.1 of the Anti-Dumping Agreement.

 Mexico reserves all of its WTO rights in r espect of the purported compliance by the United
States with its obligations in this dispute. It al so reserves the right to raise additional claims during
the course of consultations and to take any other action under the DSU.

 Mexico looks forward to receiving the reply of the United States to this request and to fixing a
mutually convenient date for consultations.

USA-MEX-2001-1904-05, 27 January 2006.
7 See U.S. Department of Commerce, Redetermination on Remand, In the Matter of: Oil Country
Tubular Goods from Mexico; Final Results of Antidumpi ng Duty Review and Determination Not to Revoke ,
27 April 2006.