MEXICO – ANTI-DUMPING DUTIES ON STEEL PIPES AND TUBES FROM GUATEMALA
Document: Request for the Establishment of a Panel by Guatemala
Date: 7 February 2006
Document codes: WT/DS331/2
Complainant: Guatemala
Respondent: Mexico
Third parties: China, EU, Honduras, Japan, U.S.
Dispute stage: Panel
Agreements cited: Art. 5.2, 5.3, 5.8, 2.1, 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 3.6, 4.1, 5.4, 6.4, 6.9, 9.1, 9.3, 18.1, 6.6, 6.8, 6.13, 6.7, 6.7, 2.2, 6.2, 12.2, 6.5  Anti-dumpingArt. VI  GATT 1994Art. 1, 18.1  Anti-dumping

MEXICO – ANTI-DUMPING DUTIES ON STEEL PIPES AND TUBES
FROM GUATEMALA

Request for the Establishment of a Panel by Guatemala

 The following communication, dated 6 February 2006, from the delegation of Guatemala to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 17 June 2005, Guatemala requested consultati ons with Mexico pursuant to Article 4 of the
Understanding on Rules and Procedures Governi ng the Settlement of Disputes (the "DSU"),
Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994") and
Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade 1994 (the "Anti-Dumping Agreement") regard ing the definitive anti-dumping measures
imposed by Mexico on imports of certain steel pi pes and tubes from Guatemala and the investigation
leading thereto.

 Guatemala and Mexico held consultations on 15 July, 26 August, and 28 September 2005.
These consultations unfortunately failed to resolve th e dispute. Accordingly, Guatemala respectfully
requests, pursuant to Article 6 of the DSU and Article 17.4 of the Anti-Dumping Agreement, that at
its next meeting on 17 February 2006, the Dispute Settlement Body establish a panel with the standard
terms of reference set out in Article 7.1 of the DS U to examine this matter and the claims set forth
below.

 The investigation leading to the imposition of the measures at issue was initiated by the
Mexican investigating authority, the Secretaría de Economía ("Economía"),
1 on 24 August 2001.2

 On 13 March 2002, Economía issued a preliminary resolution, in which it found that the
imports under investigation were being dumped at ma rgins of 3.41 per cent for standard galvanized
pipes and tubes and 12.82 per cent for standard "b lack" pipes and tubes from known exporters, and
25.83 per cent and 26.59 per cent, respectively, from all other exporters, and that these dumped
imports were causing injury to the Mexican industry.
3 Thus, Economía imposed provisional anti-
dumping duties on those products at the above mentioned rates.

1 The Secretaría de Economía is now known as the Ministerio de Economía.
de la República de Guatemala, independientemente del país de procedencia , 24 August 2001 (the "Initiation
Resolution").
país de procedencia, 13 March 2002 (the "Preliminary Resolution"), para. 197.

 On 13 January 2003, Economía issued its fina l resolution, in which it found dumping margins
of 29.93 per cent for standard galvanized pipes a nd tubes and 35.26 per cent for standard "black"
pipes and tubes, and that these imports were causing injury to the Mexican industry.
4 Accordingly,
using the lesser duty rule, Economía imposed defin itive anti-dumping duties at the rate of 25.87 per
cent for both galvanized and "black" pipes and tubes from all exporters.5

 Article 1 of the Anti-Dumping Agreement requi res that "[a]n anti-dumping measure shall be
applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to
investigations initiated and conducted in accordance with the provisions of [the Anti-Dumping]
Agreement." In the light of this requirement , and based on Article VI of the GATT 1994 and the
Anti-Dumping Agreement, Guatemala considers that Mexico's definitive anti-dumping duties and the
investigation leading thereto are inconsistent with Mexico's obligations under the provisions of the
Anti-Dumping Agreement hereinafter cited in the following respects:

Claims Relating to the Initiation of the Investigation

 (a) The application for the investigation fa iled to contain sufficient evidence either of
dumping, injury or a causal link to justify the initiation of an investigation. Mexico
then initiated the investigation without pr operly determining whether the application
for the investigation contained sufficient evidence of dumping, injury and a causal
link to justify the initiation, and without properly examining the accuracy and
adequacy of the evidence provided in the a pplication. These failures are inconsistent
with Articles 5.2, 5.3, and 5.8 of the Anti-Dumping Agreement.

Claims Relating to the Product under Consideration/Like Product

 (b) In the Initiation Resolution, Mexico provided a definition of the product under
consideration and the like product. During th e course of the investigation, however,
Mexico failed to adhere to and improper ly changed its definitions of the product
under consideration and the like product without any objective examination of
positive evidence regarding these definitions. As a result, Mexico failed to conduct
an unbiased and objective investigation and made findings of dumping, injury and a
causal link with respect to products that were not properly investigated. These
failures are inconsistent with Articles 2.1, 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 3.6, 4.1, 5.4, 6.4
and 6.9 of the Anti-Dumping Agreement.

 (c) As a result of the changes to the defi nitions of the product under consideration and
the like product during the course of the i nvestigation, Mexico applied its final
measure to products that were not covered by its investigation and for which it had
not made determinations of dumping, injury, and a causal link. This is inconsistent
with Articles 2.1, 2.6, 3.1, 3.2, 3.4, 3.5, 9.1, 9.3 and 18.1 of the Anti-Dumping
Agreement.

Claims Relating to the Determination of Dumping

 (d) Mexico relied on facts available to dete rmine the margin of dumping for the largest
Guatemalan exporter of the subject products. Mexico lacked a basis under Article 6.8

Ley de los Impuestos Generales de Importación y de Exportación, originarias de la República de Guatemala,
independientemente del país de procedencia, 13 January 2003 (the "Final Resolution"), paras. 115, 273.
5 Ibid., paragraph 275.

of the Anti-Dumping Agreement to resort to facts available, and did so without
properly following the procedures laid out in Article 6.8 and Annex II to the
Anti-Dumping Agreement. These failures are inconsistent with Articles 6.6, 6.8,
6.13, and Annex II of the Anti-Dumping Agre ement, as well as with the requirements
of Articles 2.1, 2.2, and 2.4 of the Anti-Dumping Agreement to conduct a fair
comparison between the export price and the normal value.

 (e) Mexico's report on the on-the-spot inves tigation of the largest Guatemalan exporter
contains no grounds to conclude that Mexico had encountered problems that justified
recourse to facts available under Article 6.8. Thus, Mexico failed to disclose to the
Guatemalan exporters that it had encountered problems at the on-the-spot
investigation that warranted the rejection of that exporters' data and the use of facts
available, contrary to Articles 6.2, 6.4, 6.6, 6.7 and 6.8 of the Anti-Dumping
Agreement. Mexico also failed to provid e any subsequent adequate explanation of
any problems it had encountered at the on-the-spot investigation or how those
problems justified its resort to facts availa ble. These failures are also inconsistent
with Articles 6.2, 6.4, 6.7, 6.8 and 6.9 of the Anti-Dumping Agreement.

 (f) Mexico made adjustments to the export price for certain categories of expenses
without making the symmetrical adjustme nts to the normal value for the same
categories of expenses that was necessary to achieve a fair comparison between the
normal value and the export price. This failu re is inconsistent with Articles 2.1, 2.2
and 2.4 of the Anti-Dumping Agreement.

Claims Relating to the Determination of Injury and a Causal Link

 (g) In its determination of injury and a causal link, Mexico relied on a period of
investigation that ended significantly befo re the initiation of the investigation and
therefore failed to take into account releva nt data relating to the period immediately
preceding its investigation, resulting in a determination of injury and a causal link
that was not based on an objective examinati on or positive evidence. This failure is
inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the Anti-Dumping Agreement.

 (h) Mexico improperly limited its injury anal ysis to data relating to six-month periods
each year within the period of investigation, resulting in a determination of injury and
causal link that was not based on an objective examination or positive evidence. This
failure is inconsistent with Articles 3. 1, 3.2, 3.4 and 3.5 of the Anti-Dumping
Agreement.

 (i) Mexico selectively and inconsistently used data relating to different domestic
producers, products and groups or ranges of products, and time periods, in its analysis
of the volume and price effects of the impor ts under investigation, of the impact of
those imports on investigation on the domes tic industry, and of the causal link,
resulting in a determination of injury and causal link that was not based on an
objective examination or positive evidence. These failures are inconsistent with
Articles 3.1, 3.2, 3.4, 3.5, 3.6 and 4.1 of the Anti-Dumping Agreement.

 (j) Mexico's analysis of both the volume of the allegedly dumped imports and the effect
of those imports on prices in the domes tic market for like products, and the
consequent impact of those imports on th e domestic producers of such products, was
not based on an objective examination or positive evidence. These failures are
inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement.

 (k) Mexico failed to evaluate properly all relevant economic factors and indices having a
bearing on the state of the domestic industry listed in Article 3.4, including, inter alia,
utilization of capacity, inventories, employme nt, wages, and growth. In addition to
its failure to consider properly particular listed factors, Mexico's overall analysis of
the factors listed in Article 3.4 did not conf orm to the standards of Article 3. These
failures are inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping Agreement.

 (l) Mexico's analysis of the causal link between dumping and injury failed to analyse
properly other known factors, including, inter alia , changes in consumption, cost
increases, differences in production methods , technology, productivity, decline in
exports, and imports from other countries, that were at the same time causing injury
to the domestic industry, and failed to ensure that injury caused by those known
factors was not attributed to the imports under investigation. This failure is
inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the Anti-Dumping Agreement.

Claims Relating to Procedural Matters

 (m) Mexico failed, before making its final determination, to inform the Guatemalan
exporters of the essential facts under consideration that formed the basis for its
decision to apply definiti ve measures, including, inter alia, the facts relating to the
decision to resort to facts available and to the definitions of the product under
consideration and the like product. This failure is inconsistent with Article 6.9 of the
Anti-Dumping Agreement.

 (n) Mexico failed to disclose in its prelimin ary and final resolutions in sufficient detail
the findings and conclusions reached on all issues of fact and law that were
considered material by the Mexican authorities, including, inter alia, the reasons for
Mexico's definition of the product under c onsideration and the like product and its
resort to facts available to calculate dumping margins for the largest Guatemalan
exporter. These failures are inconsistent with Article 12.2 of the Anti-Dumping
Agreement.

 (o) Mexico failed to require the applicants to provide non-confidential summaries and to
disclose properly information that was not shown upon good cause to be confidential
or to disclose non-confidential summaries of confidential information. These failures
are inconsistent with Article 6.5 of the Anti-Dumping Agreement.

 Guatemala considers that the foregoing methodologies, calculations, comparisons,
determinations and procedures made or used by th e Mexican authorities in their investigation and the
imposition of the measures referred to above cannot be reconciled with Article VI of the GATT 1994,
Articles 1 and 18.1 of the Anti-Dumping Agreement, or the specific provisions of the Anti-Dumping
Agreement cited above.