Document: WT/DS282/R Page A-1 ANNEX A EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSIONS OF THE PARTIES Contents Page
Document codes: WT/DS282/R
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

ANNEX A

EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSIONS
OF THE PARTIES

Contents Page
Annex A-1 First Written Submission of Mexico A-2
Annex A-2 First Written Submission of the United States A-6

ANNEX A-1

FIRST WRITTEN SUBMISSION OF MEXICO

I. EXECUTIVE SUMMARY OF MEXICO' CLAIMS

1. Mexico's claims are summarized as follows:

A. THE DEPARTMENT'S SUNSET REVIEW WAS INCONSISTENT WITH WTO OBLIGATIONS
• The statute (19 U.S.C. § 1675a(c)(1)), the SAA (pages 889-890), and the SPB (Section II.A.3)
as such violate Article 11.3. The text of the statute, the SAA, and the SPB are sufficiently
clear to demonstrate a violation of Article 11.3 for two reasons:

 o First, the statute, the SAA, and the SPB establish a presumption that termination of
the anti-dumping duty would be likely to lead to continuation or recurrence of
dumping in violation of Article 11.3. The presumption created by the statute, the
SAA, and the SPB violates Article 11.3 as such because declines in import volume
and/or the existence of historic dumping margins are given decisive weight, while the
burden is placed on exporters to convince th e Department even to consider any other
factors (see section VII.A.).

 o Second
 by permitting the use of presumptions, the statute, SAA, and SPB adopt a
meaning of "likely" that is inconsistent w ith the use of that term in Article 11.3.
Because the statute, SAA, and Section II.A.3 of the SPB require the Department to
attach decisive weight to declines in impor t volume and/or the existence of historic
dumping margins, the US legal standard is less than the "likely" or "probable"
standard required by Article 11.3 and theref ore inconsistent as such with Article 11.3
(see section VII.A.).

• The Department's consistent practice in sunset review cases demonstrates the WTO-
inconsistent presumption and itself constitutes a violation of Article 11.3 as such. To date
there have been 227 sunset reviews conducted by the Department where the domestic industry
has participated. In 100 per cent of these pr oceedings, the Department determined that
dumping would be likely to continue or recur.
1 In these cases no responde nt has been able to
overcome the criteria prescribed by the SAA and the SPB as conclusive of likely dumping 2
(see section VII.B.);

• The Department's Sunset Determination was inconsistent with Article 11.3 of the Anti-
Dumping Agreement because the Department focu sed solely on a decline in import volume,
failed to apply the disciplines of Article 2, fa iled to conduct a prospective analysis, failed to
make a determination of "likely" (or "probable") dumping, and failed to base its determination
on positive evidence. The Department's relian ce on the import volume decline in the wake of
the anti-dumping measure as the sole basis for its likelihood determina tion was inconsistent

1 US Department of Commerce Sunset Reviews (MEX-62).
2 Id.

with Article 11.3. In addition, the Department 's reporting of the original margin of dumping
of 21.70 per cent to the Commission for purposes of its likelihood decision was inconsistent
with Article 11.3 and Article 2 of the Anti-Dumping Agreement (see section VII.C.);

B. T
HE COMMISSION'S SUNSET REVIEW WAS INCONSISTENT WITH US WTO OBLIGATIONS
• The Commission's standard for determining whet her termination of the duty would be likely
to lead to continuation or recurrence of injury is inconsistent as such with Article 11.3 of the
Anti-Dumping Agreement because the Commission applies a lower standard than that
required by Article 11.3 (see section VIII.A.);

• The Commission's Sunset Determination that term ination of the duty would be likely to lead
to continuation or recurrence of injury was inconsistent with Article 11.3 of the Anti-
Dumping Agreement because the Commission app lied a lower standard for determining the
likelihood of injury than that which is requi red by Article 11.3. The Appellate Body has
confirmed that "likely" means "probable" and not something less than probable (see section
VIII.B.);

• The Commission's Sunset Determination viol ated Article 11.3 because it was not based on
"positive evidence" that termination of the duty would be likely to lead to continuation or
recurrence of injury (see section VIII.C.);

• The Commission's Sunset Determination violated Articles 3.1, 3.2, 3.4, 3.5, and 11.3 of the
Anti-Dumping Agreement because the Commission did not conduct an objective examination
of the record or base its determination on pos itive evidence. The Commission's conclusions
regarding the likely volume of imports, the likel y price effects, and the likely impact of
imports on the domestic industry can in no way be considered to be objective when those
conclusions are viewed in light of a neutral examination of the information on the record.
Moreover, the purported bases relied on by the Commission in support of its likely injury
finding simply do not constitute positive evid ence as required by Article 3.1 of the Anti-
Dumping Agreement (see sections VIII.D.1-3);

• The Commission's Sunset Determination vi olated Article 3.4 because in assessing the
likelihood of continuation or recurrence of injury to the domestic industry, the Commission
either failed to evaluate or improperly evalua ted the relevant economic factors and indices
having a bearing on the state of the industry, in cluding the mandatory factors enumerated in
Article 3.4 of Anti-Dumping Agreement (see section VIII.D.4);

• The Commission' Sunset Determination violat ed Article 3.5 because the Commission failed
to: (1) demonstrate a causal relationship between the dumped imports and likely injury to the
domestic industry; (2) separate and distinguish the effects of other factors from those of the
effects of the dumping; and (3) base its determination on the effects of the dumping on the
domestic industry (see sections VIII.D.5);

• The Commission's Sunset Determination violated Articles 3.7 and 3.8 because the
Commission based its likelihood of injury dete rmination on conjecture and remote possibility
and failed to satisfy the special requirements of Articles 3.7 and 3.8 for making prospective
injury determinations (see sections VIII.D.6);

• The Commission's application of a cumulative in jury analysis of OCTG imports from Korea,
Italy, Japan, Mexico, and Argentina to dete rmine whether termination of the anti-dumping
duty on Mexican OCTG imports would be likely to lead to continuation or recurrence of

injury was inconsistent with Articles 11.3 an d 3.3 of the Anti-Dumping Agreement, which
preclude the use of a cumulative in jury analysis in sunset reviews. Alternatively, assuming
arguendo that cumulation is permitted in sunset reviews, the Commission violated Articles
11.3 and 3.3 by failing to comply with the e xplicit restrictions on cumulation set forth in
Article 3.3. (see sections VIII.E and F);

• The US statutory requirements that the Commission determine whether injury would be likely
to continue or recur "within a reasonably foreseeable time" (19 U.S.C. § 1675a(a)(1)) and that
the Commission "shall consider that the effect s of revocation or termination may not be
imminent, but may manifest themselves only over a longer period of time" (19 U.S.C. §
1675a(a)(5)) are inconsistent with Articles 3.1, 3. 2, 3.4, 3.5, 3.7, 3.8, 11.1 and 11.3 of the
Anti-Dumping Agreement. By adding the phrase "within a reasonably foreseeable time" and
including a time frame that is not "imminent" but rather relat es to "a longer period of time,"
US law requires ("shall consider") speculation an d an open ended analysis for possible future
injury. The Commission's market forecasting and sheer speculation is inconsistent with WTO
requirements to assess whether termination of an anti-dumping duty order would be likely to
lead to recurrence of injury at the time of termination – not at some distant, undefined point in
the future. The Commission's application of these statutory provisions in the sunset review of
OCTG from Mexico also violated US WTO oblig ations as noted above (see sections VIII.G.1
and 2).

C. T
HE DEPARTMENT'S FOURTH ADMINISTRATIVE REVIEW DETERMINATION NOT TO REVOKE
THE ORDER WAS INCONSISTENT WITH US WTO OBLIGATIONS
• The Department's Fourth Administrative Revi ew Determination Not to Revoke violated
Article 11.2 of the Anti-Dumping Agreement b ecause the Department did not terminate the
anti-dumping duty immediately upon a showing that the continued application of the duty was
not "necessary to offset dumping" (see section IX.A.);

• The Department violated Articles 11.2, 2.4, and 2.4.2 of the Anti-Dumping Agreement
because the Department "zeroed" Hylsa's nega tive margins and relied on the positive margin
that resulted from this unlawful methodology as justification for not revoking the anti-
dumping duty on OCTG from Mexico with respect to Hylsa (see section IX.B.);

• The Department's Fourth Administrative Revi ew Determination Not to Revoke violated
Article 11.2 of the Anti-Dumping Agreement becau se the Department: (i) applied a standard
which required a demonstration that dumping was " not likely" in the future; (ii) arbitrarily
imposed a "commercial quantities" threshold test which has no basis in Article 11.2; and (iii)
it ignored positive evidence that demonstrated that the measure was no longer necessary to
offset dumping (see section IX.C); and

• The Department violated Article X:2 of th e GATT 1994 because the Department imposed
conditions on TAMSA for the termination of the anti-dumping duty in advance of the official
publication of such conditions (see section IX.D.).

D. V
IOLATIONS OF GATT ARTICLE X:3(A)
• Separate and apart from whether US anti-dumpi ng laws and regulations regarding sunset
reviews are found to be consistent per se with US WTO obligations, the data drawn from the
Department's sunset review determinations demonstrate th at the Department failed to
administer in an impartial and reasonabl e manner US anti-dumping laws, regulations,

decisions and rulings with respect to the Depa rtment's conduct of sunset reviews of anti-
dumping duty orders, in violation of Article X:3(a) of the GATT 1994 (see section X).

E. C
ONSEQUENTIAL VIOLATIONS OF THE ANTI-DUMPING AGREEMENT, THE GATT 1994, AND
THE WTO AGREEMENT.
 Because the United States violated its obliga tions under the Anti-Dumping Agreement, it also
violated the provisions of Article VI of the GATT 1994, Articles 1 and 18 of the Anti-Dumping
Agreement, and Article XVI:4 of the WTO Agreement (see section X.I).

ANNEX A-2

FIRST WRITTEN SUBMISSION OF THE UNITED STATES

(3 May 2004)

I. INTRODUCTION

1. This proceeding involves Mexi co's challenge to the findings of the US Department of
Commerce ("Commerce") and the US International Tr ade Commission ("ITC") in the sunset review
determinations and Commerce's fourth administ rative review of the anti-dumping duty order on oil
country tubular goods ("OCTG") from Mexico.

2. Mexico disagrees with the conclusions draw n by Commerce and the ITC in the sunset and
fourth review determinations. However, the fact that Mexico disagrees with those conclusions does
not render them inconsistent with US obliga tions under the AD Agreement. Mexico asserts
obligations that in many cases do not exist, and its claims to have iden tified breaches by the
United States are meritless.

II. THE PANEL SHOULD REJECT MEXICO'S CLAIMS CONCERNING AN
ALLEGED "PRESUMPTION" AND ITS ALLEGED INCONSISTENCY WITH
ARTICLE 11.3

3. Article 11.3 establishes the requirement that an investigating authority either terminate the
duty after five years or conduct a review to determ ine whether termination of that order "would be
likely to lead to continuation or recurrence of dumping and injury."

4. Mexico's entire claim under Article 11.3 hing es upon the existence of an alleged Commerce
"presumption" in sunset reviews that the continuati on or recurrence of dumping is likely. Mexico's
claim fails because: (1) the alleged "WTO-incons istent presumption" does not exist; (2) the
instruments that allegedly give rise to this pr esumption do not constitute challengeable measures for
purposes of the DSU; and (3) even if the instrument s and practices were subj ect to challenge, two of
them – the Sunset Policy Sunset Policy Bulletin and Commerce practice – are not "mandatory" within
the meaning of the mandatory/discretionary distinction, i.e. , they do not mandate a breach of a
WTO obligation.

III. COMMERCE FULLY CONSIDERED ALL RECORD INFORMATION IN MAKING
THE FINAL SUNSET DETERMINATION

5. Mexico claims that Commerce failed to addr ess all the record information in the sunset
review of OCTG from Mexico and, thereby, failed to determine, in accordance with Article 11.3, that
dumping was likely to continue or recur if the anti-dumping duty were removed. Specifically, Mexico
asserts that Commerce failed to address TAMSA' s explanations for the depressed state of
OCTG imports from Mexico for the period following imposition of the order. In addition, Mexico
alleges that Commerce failed to consider, in ma king the likelihood determination, information
regarding the dumping margin calculated for TAMSA in the original investigation. Mexico is wrong

because Commerce addressed TAMSA's import volume explanation and Commerce did not rely upon
the dumping margin from the original investigation (or any dumping margin) in making the
affirmative likelihood determination in the sunset review.

IV. MEXICO'S CLAIMS REGARDING COMMERCE'S IDENTIFICATION OF THE
MARGINS LIKELY TO PREVAIL IN THE EVENT OF REVOCATION ARE
EQUALLY ERRONEOUS

6. Mexico maintains that, pursuant to Article 2 and Article 11.3 the margins reported to the
ITC as the rates of dumping likely to prevail in th e event of revocation were improperly identified by
Commerce. Mexico is wrong, because there simply is no obligation under the AD Agreement to
consider the magnitude of the margin likely to pr evail in determining like lihood of continuation or
recurrence of injury in a sunset review under Artic le 11.3. In addition, as a factual matter, Commerce
did not "rely" on the margins from the original investigation in making the likelihood determination in
OCTG from Mexico as asserted by Mexico. Rather, Co mmerce relied solely on the depressed state of
OCTG imports from Mexico to make its affirma tive determination that dumping was likely to
continue or recur and simply reported the "margins likely to prevail" to the ITC. For these reasons,
the Panel should not and need not consider Mexi co's arguments concerning the manner in which
Commerce identified the margins that it reported to the ITC.

V. THE PANEL SHOULD REJECT MEXICO'S CLAIM THAT COMMERCE'S
DETERMINATION NOT TO REVOKE TAMSA AND HYLSA FROM THE ANTI-
DUMPING DUTY ORDER WAS INCONSISTENT WITH ARTICLES 11.1 AND 11.2
OF THE AD AGREEMENT

7. Article 11.2 requires a review of the continuing need for "the anti-dumping duty." The "anti-
dumping duty" refers to the anti-dumping duty or der as a whole, not as applied to individual
companies. As the Appellate Body stated in Japan Sunset, "the duty" referenced in Article 11.3 is
imposed on a product-specific (i.e., order-wide) basis, not a company-specific basis.

8. Mexico's second principal claim is that, in not revoking the order on OCTG from Mexico
based on the results of the fourth administrative review, the United States breached its obligations
under the AD Agreement and GATT 1994. The heart of Mexico's claim rests on the obligations in
Article 11.2 of the AD Agreement. An examination of the text of that Article, in context and in light
of its object and purpose, demonstrates that Mexico's claims are unfounded.

9. Article 11.2 contains no obligation for Memb ers to provide company-specific revocations.
For this reason, and because neither TAMSA nor Hy lsa sought to present info rmation substantiating
the need for the overall revocation of "the duty" dur ing the fourth administrative review, Mexico's
revocation claims based on the fourth administrative review must fail.

10. Even assuming arguendo that this Panel were to find that Article 11.2 applies to company-
specific opportunities for revocation, the terms of Article 11.2 would not compel the revocations
TAMSA and Hylsa sought in the fourth administrative review, as Mexico argues.

11. Article 11.2 of the AD Agreement provides that a reviewing authority must conduct a
revocation review "where warranted" and where an interested party requests a review in order to
determine whether continued imposition of an anti-dumping duty is necessary. However, Article 11.2
expressly limits this right to instances in which the interested party is able to ". . . submit positive
information substantiating the need for a review." In the Fourth Administrative Review, however,
TAMSA failed to substantiate the need for such a review.

12. Under US law and consiste nt with Article 11.2, Commerce will examine the need for
revocation at the request of an interested pa rty only if the interested party provides positive
information substantiating the need for a re view. This positive information includes, inter alia, that
(1) the requesting party has meaningfully participated in the US market for at least three years and (2)
the requesting party has not dumped subject merchandise during that three year period.

13. Meaningful participation in the market is necessary because without it there is no evidentiary
basis for determining whether continued imposition of the duty is necessary. Commerce examines the
sales volumes during the periods in which the expor ter did not dump both in absolute terms and in
comparison with the period of investigation and/or other review periods. If the sales volumes during
the non-dumped periods represent an extremely sm all portion of the sales during the period of
investigation and/or other review periods, Comme rce infers that these sal es are an insufficient
evidentiary basis for the need to examine whether the order continues to be necessary. If an interested
party were able to provide evid ence that the severely reduced sales volume was due to some unusual
occurrence, independent of the discipline of the or der, Commerce could find that the extremely small
sales constitute information sufficient to substantiate the need to review the duty.

14. During the fourth administrative review , TAMSA argued that it had sold OCTG in
commercial quantities during the second, third and f ourth reviews. Commerce analyzed TAMSA's
request and determined that these sales were made at volumes that constituted an extremely small
portion of the sales TAMSA made during the POI .. Commerce allowed TAMSA an opportunity to
refute the inference that its extremely small sales fail ed to substantiate the need for an examination of
whether the order remained necessary. In respon se, TAMSA argued that its extremely small sales
were probative because the small sales were caused by both the dumping order on OCTG from
Mexico as well as a cyclical downturn in the o il industry. After considering these arguments,
Commerce rejected them, fully explaining why in th e final results of the fourth review. Thus,
Commerce found that TAMSA failed to meaningfully participate in the market because it had not sold
OCTG in commercial quantities. Consistent with Article 11.2, TAMSA had failed to provide positive
information substantiating the need for a review and Commerce properly rejected its revocation
request.

15. Mexico also argues that, in reviewi ng the necessity of the OCTG order in the Final Results of
Fourth Review, Commerce improperly applied a "not likely" standard with respect to the question of
whether the order remained necessary as to TAMSA. In the Final Results of Fourth Review ,
Commerce analyzed whether TAMSA's revocation requ est provided a sufficient evidentiary basis for
consideration for revocation. Commerce found th at, as an evidentiary matter, the request was
insufficient. Because Commerce thus did not reach the question of whether the continued imposition
of the duty remained necessary to offset dumping, Mexico's arguments that Commerce improperly
applied a "not likely" standard in resolving that question should be rejected by this Panel.

VI. COMMERCE'S "IMPOSITION OF CONDITIONS" FOR REVOCATION WAS NOT
INCONSISTENT WITH ARTICLE X:2 OF THE GATT 1994

16. Through a misleading characterization of the f acts, Mexico has attempted to argue that the
commercial quantities requirement Commerce applied in the Final Results of Fourth Review was
imposed without official publication "in advance of its application," in breach of Article X:2 of the
GATT. Although Mexico implies that the comme rcial quantities requirement was imposed through a
change in practice in 1999, that requirement was set forth in the regulations published in 1997, in
section 351.222(e)(1) of Commerce's regulations, a section of the regulations Mexico studiously
deemphasizes. This regulation was effective for a ll administrative reviews initiated on the basis of
requests for reviews made on or after 1 July 1997 . Thus, the effective date of the regulations
preceded the date of request for the second, thir d, and fourth OCTG administrative reviews.
Commerce properly applied the regulation to TAMSA's request for revocation. Second, to the extent

that Mexico is challenging an alleged change in Commerce "practice," TAMSA's claim under
Article X:2 must fail because, Article X:2(a) is li mited in scope to measures of general application,
not to changes in how Commerce exercises its discretion on a case-by-case basis – its so-called
practice.

VII. THE MARGIN CALCULATION METH ODOLOGY IN THE FOURTH REVIEW
WAS CONSISTENT WITH THE AD AGREEMENT BOTH AS SUCH AND AS
APPLIED TO HYLSA

17. Mexico claims that the United States calcula ted dumping margins for OCTG with respect to
Hylsa in a manner inconsistent with Articles 11.2 and 2 of the AD Agreement, relying primarily on
the Appellate Body reports in EC – Bed Linen and Japan Sunset.

18. In the fourth review, one of the three consecutive years Hylsa needed to qualify for
revocation, Commerce calculated a weighted-avera ge margin of 0.79 for Hylsa. Because the
revocation inquiry conducted in accordance with Article 11.2 failed
 to demonstrate that the anti-
dumping duty was no longer necessary to offset injurious dumping, no obligation arose under Article
11.1 for Commerce to revoke the order as to Hylsa. Mexico argues that, had the margin been
calculated in the manner it suggests, Hylsa would not have been considered to have dumped in that
review and argues that the order should therefore ha ve been revoked as to Hylsa. However, quite
apart from the question of which methodology Commer ce used to calculate Hylsa's overall margin,
the United States was not required to revoke the order as to Hylsa.

19. First, even if Hylsa had been assigned a we ighted-average margin of zero per cent for the
fourth review, this alone would not have been su fficient for the order to have been revoked with
respect to Hylsa. Commerce would have permis sibly analyzed whether Hylsa made sales to the
United States in commercial quantities during the three years upon which the revocation claim was
based. Thus, the United States was not required to revoke the order with respect to Hylsa even if it
had received a margin of zero per cent in the fourth review.

20. Second, because Article 11.2 of the AD Agreement does not require company-specific
revocation, the Panel should reach this calculation methodology issue only if
 it finds that the
United States was required to conduct a company-sp ecific revocation analysis. Moreover, the Panel
should find that Mexico has failed to establish a prima facie violation of Article 2.4 with respect to the
challenged calculation methodology.

21. Commerce's calculation is not inconsistent w ith the AD Agreement. Article 2.4 does not
establish obligations as to the calculation of the overa ll dumping margin. Mexico merely justifies its
position with respect to "zeroing" largely by rely ing on the reasoning in the Appellate Body Reports
in EC – Bed Linen and Japan Sunset.
1 That reliance, however, is misplaced. EC – Bed Linen is not
relevant to this dispute because the finding in th at case was based on a provision that is explicitly
limited to the investigation phase and because it examined a calculation methodology distinct from
that which is before this Panel. Mexi co's reliance on the Appellate Body report in Japan Sunset is
equally inapposite.2 In Japan Sunset, the Appellate Body found that it was unable to make findings
on whether the United States acted inconsistently with Article 2.4 or Article 11.3 of the ADA by
relying on dumping margins from administrative revi ews in making its likelihood determination in a
sunset review.3 Consequently, there were no findings in that report relevant to this dispute.

1 European Communities – Anti-Dumping Duties on Im ports of Cotton-Type Bed Linen from India
("EC – Bed Linen"), WT/DS141/AB/R, Report of the Appellate Body, adopted 12 March 2001.
2 Mexico First Written Submission, paras. 293-294.
3 United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat
Products from Japan, WT/DS244/AB/R, adopted 9 January 2004, para. 138.

VII. THE UNITED STATES APPLIED ITS ANTI-DUMPING LAWS, REGULATIONS,
DECISIONS AND RULINGS WITH RESPECT TO COMMERCE'S SUNSET
REVIEWS IN A UNIFORM AND IMPARTIAL MANNER, IN ACCORDANCE WITH
ARTICLE X:3(A) OF THE GATT 1994

22. Mexico attempts to revisit its claims by turning to Article X:3(a) of the GATT 1994 in the
alternative. Taken together the terms of Article X:3(a) require that, in administering US sunset review
laws and regulations, Commerce must act in a manner that is consistent, unbiased and not irrational or
absurd. Mexico does not appear to be arguing that US administration of its laws is not consistent,
focusing instead on an alleged lack of impartiality and reasonableness.

23. However, Mexico has provided no evidence of bias or that Commerce has administered
US laws and regulations in an irrational or absu rd manner, instead merely asserting the conclusion
that the record in sunset reviews demonstrates bias. As demonstrated above, Mexico's "clear
systematic bias" does not exist, and a deconstructi on of Mexico's "analysis" of 301 Commerce sunset
reviews shows that in 88 per cent of the cases, th e issue of likelihood of dumping simply was not
contested. With respect to the 12 per cent of the cases where likelihood was contested, Mexico
provides no evidence – let alone proves – that th ose cases were not decided in an impartial and
unreasonable manner.

VIII. THE ITC APPLIED THE CORRECT STANDARD FOR DETERMINING WHETHER
TERMINATION OF THE ANTI-DUMPING DUTY ORDERS WOULD BE LIKELY
TO LEAD TO CONTINUATION OR RECURRENCE OF INJURY, AND THE ITC'S
DETERMINATION OF LIKELIHOOD IN THE SUNSET REVIEW OF OCTG FROM
MEXICO WAS CONSISTENT WITH ARTIC LE 11. 3 AND ARTICLE 3.1 OF THE
AD AGREEMENT

24. Much of Mexico's first submission is based on the incorrect and unproven premise that the
Commission's application of the "likely" standa rd was inconsistent with Article 11.3 of the
Agreement. The Commission does not, as Mexico states, take the position in this dispute that "likely"
means "possible." Rather, the United States agrees th at the term "likely" as used in Article 11.3 can
be equated with "probable" in the manner that the US courts understand the meaning of "probable"
and as "probable" has been explained by the Ap pellate Body. The views of the participating
Commissioners in the OCTG sunset review remain c onsistent with the "likely" standard as that term
has been defined by the US courts and the WTO Appellate Body.

25. The US courts charged with reviewing the in terpretation of the statute have interpreted the
meaning of "likely" as used in the US statute, gi ving due regard to the SAA, in a manner completely
consistent with the meaning ascribed to "likely" in Article 11.3. Accordingly, there is no basis for
Mexico to assert that the US statute is inconsistent as such with Article 11.3. Mexico plainly has
failed to meet its burden on this claim.

IX. THE ITC'S DETERMINATION WAS CONSISTENT WITH ARTICLE 11.3
BECAUSE THE ESTABLISHMENT OF THE FACTS WAS PROPER AND THE
EVALUATION OF THE FACTS WAS UNBIASED AND OBJECTIVE

26. Mexico argues that the ITC failed to conduct an "objective examination" based on "positive
evidence" in accordance with Article 3.1. Article 3. 1 does not apply to sunset reviews. Nonetheless,
the ITC's sunset determination was based on a proper establishment of the relevant facts and an
unbiased and objective evaluation of those facts and, accordingly, would satisfy the requirements of
Article 3.1, were that provision applicable.

X. ARTICLE 3 DOES NOT APPLY TO SUNSET REVIEWS

27. Nothing in Article 3 indicates that its require ments are intended to extend to sunset reviews,
nor does Article 11.3 indicate that sunset reviews are governed by the requirements of Article 3.
The inapplicability of Article 3 to sunset reviews under Article 11.3 is clear based on an analysis of
the text of these treaty provisions.

XI. THE ITC'S SUNSET DETERMINATION WAS CONSISTENT WITH ARTICLE 11.3

28. Mexico's claims concerning Article 3.1 are pr emised on the notion that Article 3.1 applies to
sunset reviews. As explained above, the provisions of Article 3 are not applicable to sunset reviews.
There are further textual indications in Article 3.1 as to why it specifically is not applicable to sunset
reviews. For example, in a sunset review, aut horities are required to evaluate the likelihood in the
future of a continuation or recurrence of injury if the dumping order is lifted. Imports may not even
be present in the market at the time of the sunset review, and they may not be sold at dumped prices.
Even if they are sold at dumped prices, the effect s of the dumping are offset, at least in part, by the
anti-dumping duty. As a result, an examination of "the volume of dumped imports and the effect of
dumped imports on prices" is not meaningful in the context of an Article 11.3 review.

29. The ITC's sunset determination was based on a proper establishment of the relevant facts and
an unbiased and objective evaluation of those fact s, was based on evidence gathered during the
review, and, accordingly, would sa tisfy the requirements of Artic le 3.1, were that provision
applicable. Mexico has failed to show that th e ITC's determination was biased in favour of any
interested party or that the qualit y of the evidence considered was co mpromised in any way. That the
ITC may have given a different weight or meani ng to record evidence than the Mexican respondent
would have preferred, does not go to whether the ITC conducted an "objective" examination based on
"positive" evidence. To the contrary, if the IT C's establishment of the facts was proper and its
evaluation was unbiased and objective, then its ev aluation shall not be overturned "even though the
panel might have reached a different conclusion."

30. Mexico's arguments concerning the likely volume of imports do not stand up to scrutiny.
The ITC's findings on the likely volume of impor ts are based on an objective evaluation of the
relevant facts and are supported by positive evidence. Mexico's criticisms of the ITC's findings with
respect to likely price effects likewise are without merit. The claim regarding the likely adverse
impact should be rejected because it is based on Mexico's meritless arguments concerning volume and
price effects.

XII. THE ITC SUNSET DETERMINAT ION WAS NOT INCONSISTENT WITH
ARTICLE 3.4 OF THE AD AGREEMENT

31. In addition to the general inapplicability of the provisions of Article 3 to sunset reviews, there
are also textual indications in Article 3.4 as to why it specifically is not applicable to sunset reviews.
There may be no "dumped imports" at the time of a sunset review, and consequently there may be no
"impact" for the investigating authority to examine. There also may not be any "actual and potential"
declines evident or reflected in the information befo re the investigating authority at the time of the
sunset review, by virtue of the absence of imports. In short, the obligations described in Article 3.4
cannot practicably be applied to all sunset review s, and certainly could not be applied to sunset
reviews in the same systematic and comprehensive manner that has been required in original dumping
investigations.

32. Moreover, even if Article 3.4 did apply, while all enumerated factors must be evaluated, not
all are necessarily material in any particular case. If, upon evaluation, the authority determines that a
particular factor is not material to the investigati on, the authority is not required to discuss that factor

in its notice or report. In this review, the Commission's staff report clearly addresses each of the
factors enumerated in Article 3.4.

33. The ITC considered, cited extensively to, an d appended to its published determination the
report of the ITC staff in the OCTG sunset revi ew, which presents detaile d information concerning
each of the Article 3.4 factors.

XIII. THE ITC SUNSET DETERMINATION WAS NOT INCONSISTENT WITH
ARTICLE 3.5 OF THE AD AGREEMENT

34. In addition to the general inapplicability of Article 3 to sunset reviews, there are further
textual indications in Article 3.5 that it specifically is not applicable to sunset reviews. For example,
Article 3.5 refers to the "dumped imports and speak s of such imports in th e present tense as "causing
injury." However, in a sunset review there may be no dumped imports. As a result of the order, such
imports may have decreased or exited the market alt ogether, or if they have maintained their presence
in the market, they may be priced higher than they were during the original investigation, when they
were entering the market unencumbered by any additional duties.

35. Second, Article 3.5 refers to existing "inj ury" and describes an existing causal link between
dumped imports and that injury. However, in a su nset review, with an anti-dumping order in place,
there may be no current injury or causal link; indeed, it would be surprising if there were given the
remedial effect of an anti-dumping duty order. This is implicit in the referenc e in Article 11.3 to the
"continuation or recurrence
 of injury."

36. Third, under Article 3.5, investigating au thorities are obliged only to "examine any known
factors other than the dumped imports which are at the same time injuring the domestic industry" and
ensure that the injurious effects caused by those factors are not attributed to the dumped imports
(emphasis added). If a particular factor is not known to the investigating authorities, or if that factor
is not "at the same time injuring the domestic industry," then the investigating authorities are under no
obligation to examine that factor in the course of their causality analysis.

37. In focusing on the positive performance of the domestic industry during the review period,
Mexico ignores that Article 11.3 expressly contemplates an examination of the likelihood of a
"recurrence" of injury. Such an examination plainl y recognizes that an industry that was injured prior
to the entry of the orders may not experience injury during the pendency of the orders, yet injury may
be likely to recur if the orders are revoked. Ind eed, the imposition of the orders in the first instance
may be responsible for the industry's improved performance.

38. Even if Article 3.5 were applicable, Mexico has not identified any "other causal
 factors" the
ITC failed to consider.

XIV. THE US STATUTORY PROVISIONS AS TO THE TIME FRAME IN WHICH
INJURY WOULD BE LIKELY TO CONTINUE OR RECUR ARE NOT
INCONSISTENT WITH ARTICLES 11.3 AND 3 OF THE AD AGREEMENT

39. Article 11.3 does not specify the time frame re levant to a sunset inquiry. Article 11.3 only
requires a determination of whether revocation "would be likely to lead to continuation or recurrence
of injury." The words "to lead to" affirmatively indicate that the Agreement contemplates the passage
of some period of time between the revocation of the order and the continuation or recurrence of
injury. In the absence of any specific provision in Article 11.3, Members remain free to determine
under their own laws and procedures the time frame relevant in sunset inquiries.

40. Mexico attempts to inject the "imminent" a nd "special care" terms from Articles 3.7 and 3.8
into an Article 11.3 sunset review. As previously explained, Article 3 does not apply to Article 11.3
sunset reviews.

41. Because the statutory requirements contai ned in Sections 752(a)(1) and 752(a)(5) are not
inconsistent with AD Agreement Articles 11.3 and 3, the ITC's application of those requirements is
likewise not inconsistent with those articles.

XV. THE ITC DID NOT ACT INCONSISTENTLY WITH ANY PROVISION OF THE AD
AGREEMENT BY CONDUCTING A CUMULATIVE ANALYSIS IN THE OCTG
SUNSET REVIEW

42. Mexico argues that because cumulation is not expressly permitted in Article 11.3, the ITC is
prohibited from engaging in a cumulative analysis in a sunset review. However, the genesis of any
obligation or right arising under the WTO Agreement is the text of the relevant provision. Absent a
textual basis, the rights of Members cannot be circumscribed.

43. The relevant principle of treaty interpretation goes to the object and purpose of the treaty
, and
not particular treaty provisions. To the extent th at the purpose of Article 11.3 is relevant, Mexico
simply misconstrues it. If that purpose were simply a ministerial rescission of anti-dumping duties,
there would be no need to inquire as to whether expiry of the duty would be likely to lead to
continuation or recurrence of dumping and injury.

44. Mexico seeks to bolster its argument that cumulation is not permitted in sunset reviews by
noting that there is no explicit cross-reference to cumulation or to Article 3.3 in the context of
Article 11. This argument has no merit. A cross- reference to an obligation is necessary where the
drafters seek to assert a broader obligation. Howe ver, there is no need to cross-reference to a
permissive authority where a right exists absent its limitation in the Agreement.

45. In addition to the inapplicability of the provisi ons of Article 3 to sunset reviews, Mexico's
position is directly at odds with recent panel and Appella te Body reports construing the meaning of
Article 3.3.

XVI. THE DECISIONS OF COMMERCE AND THE COMMISSION COMPLIED WITH
ARTICLE VI OF THE GATT 1994, ARTICLES 1, 18.1, AND 18.4 OF THE
AD AGREEMENT AND ARTICLE XVI:4 OF THE WTO AGREEMENT

46. These claims are consequential claims in th at they depend upon a finding that some other
provisions of the AD Agreement or GATT 1994 have been breached. None of the "measures"
identified by Mexico, however, is inconsistent any other provision of the WTO Agreement. They are
therefore not inconsistent with Article VI of th e GATT 1994, Articles 1 and 18 of the AD Agreement,
and Article XVI:4 of the WTO Agreement.

XVII. THE SPECIFIC REMEDY SOUGHT BY MEXICO IS INCONSISTENT WITH
ESTABLISHED PANEL PRACTICE AND THE DSU

47. Finally, Mexico has requested this Pa nel to recommend that the DSB request the
United States to immediately revoke the anti-dum ping duty on OCTG imports from Mexico. In so
doing, Mexico has requested a specific remedy th at is inconsistent with established GATT/WTO
practice and the DSU. Therefore, should the Panel agree with Mexico on the merits, the Panel
nonetheless should reject the requested remedy , and instead should make a recommendation,
consistent with the DSU and established GATT/WTO practice, that the United States bring its anti-
dumping measure into conformity with its obligations under the AD Agreement.

XVIII. CONCLUSION

48. Based on the foregoing, the United States respect fully requests that the Panel reject Mexico's
claims in their entirety.