BINATIONAL PANEL REVIEW
PURSUANT TO
THE NORTH AMERICAN FREE TRADE AGREEMENT
Article 1904

IN THE MATTER OF:

Imports of Cut-to-Length Plate Products from the United States

MEMORANDUM OPINION AND ORDER

Courtesy English Translation

I. INTRODUCTION

This Binational Panel ("Panel") was constituted pursuant to Chapter Nineteen of the North American Free Trade Agreement ("NAFTA") to review the final determination of the Secretaría ¹ de Comercio y Fomento Industrial (the "Investigating Authority" or "SECOFI") in the Cut-to-Length Plate Imports Antidumping Investigation, which commenced in December 4, 1992. In this Final ^{2 3} Determination, the Investigating Authority determined that cut-to-length plate produced by various ⁴ U.S. producers and originating from the United States was being sold at less than normal value and that such dumped sales had caused injury to the domestic industry. These U.S. producers included, among others, Bethlehem Steel Corporation ("Bethlehem") and U.S. Steel Group, a unit of USX Corporation ("USX"), the complainants in this panel review ("Complainants").⁵

As a result of SECOFI’s findings, the Final Determination imposed definitive antidumping duties at the following rates on the Complainants:

USX	76.00 percent
Bethlehem	46.18 percent

The Complainants have challenged this affirmative determination on numerous specific grounds, which loosely fall into three broad categories: (1) jurisdictional and technical errors; (2) errors in the calculation of the dumping margin; and (3) errors in the findings of causation and injury.⁶

For the reasons set forth more fully below, a majority of the Panel ("Mayority") concludes ⁷ that SECOFI, in carrying out this administrative proceeding, failed to comply with basic constitutional and other applicable legal principles, and on the basis of the administrative record, the applicable law, the written submissions of the parties, and the oral argument held on May 3-4, 1994, at which all participants were heard, the Panel remands this proceeding back to SECOFI for action consistent with this Opinion.

II. PROCEDURAL HISTORY ⁸

A. Administrative Investigation Procedure

This case was begun, at the administrative level, on December 4, 1992 when Altos Hornos de México, S.A. de C.V. ("Petitioner" or "AHMSA") filed an antidumping petition against imports of cut-to-length plate originating from the United States. This petition was filed by AHMSA with ⁹ the Dirección General de Prácticas Comerciales Internacionales (DGPCI), an administrative subunit of SECOFI. On December 11, 1992, DGPCI, acting through its own administrative subunit, the Dirección de Cuotas Compensatorias (DCC), accepted receipt of said petition, which document was signed by the DCC’s Director, Mr. Miguel Angel Velázquez Elizarrarás.¹⁰ Thereafter, having determined that the antidumping petition was a sufficient basis upon which to proceed with a full investigation, the Investigating Authority issued its Provisional Determination against the U.S. producers of cut-to-length plate, including the Complainants, ¹¹ which was published in the Diario Oficial de la Federación ("D.O.") on December 24, 1992. ¹²

This Provisional Determination was ordered by the Secretary of Commerce and Industrial Development, Mr. Jaime Serra Puche, but was signed in his absence by the Undersecretary of Foreign Commerce and Investment, Mr. Pedro Noyola.¹³

On February 3, 1993, DGPCI issued a series of notifications to various domestic companies, notifying them of the Provisional Determination and requesting their response to the annexed questionnaire. These notifications were signed by Mr. Velázquez, as Director of DGPCI’s subunit, ¹⁴ the DCC.

Thereafter, on February 8, 1993, DGPCI issued a series of similar notifications to various U.S. steel producers, including the Complainants. These notifications again were signed by Mr. ¹⁵ Velázquez, as Director of the DCC. These notifications also required extensive information and documentation to be submitted in response to the annexed questionnaire and in Paragraph XIII thereof required that all correspondence be submitted to "Dr. Alvaro Baillet, Director General de Prácticas Comerciales Internacionales, Secretaría de Comercio y Fomento Industrial."

On March 8, 1993, the Complainants filed responses to the foregoing questionnaires with DGPCI, and on the same date also submitted comments regarding injury and threat of injury. ^{16 17} On April 28, 1993, SECOFI issued its Preliminary Determination, which was published in the D.O. The Preliminary Determination determined that the imports under investigation had been ¹⁸ sold at less-than-normal value and that such imports were causing or threatening to cause material injury to the Mexican cut-to-length plate industry.

The Preliminary Determination was communicated to Complainants by means of official letters issued by the Dirección General Adjunta de Técnica Jurídica (DGATJ) of the Unidad de Prácticas Comerciales Internacionales (UPCI) of SECOFI. In these letters, the Complainants ¹⁹ were granted a period of time up to May 31, 1993 to reply and comment. UPCI also issued letters notifying the Ambassador and Commercial Counselor of the American Embassy of the publication of the Preliminary Determination.²⁰

In a letter dated March 10, 1993, the Complainants requested a disclosure conference with SECOFI officials to discuss the methodologies for SECOFI’s dumping calculations and its findings of injury and threat of injury. By letter dated May 14, 1993, SECOFI fixed the date of May 24, ²¹ 1993 as the date of the disclosure conference.²² On May 18, 1993, the Complainants requested an extension of 14 days for the period in which to issue comments on the Preliminary Determination and a new date for the holding of the disclosure conference. In an official letter dated May 21, 1993, the requested 14-day extension was granted ²³ by the Dirección de Procedimientos y Proyectos (DPP), a subunit of the DGATJ, which also re-set the disclosure conference for May 31st and June 1st, 1993. ²⁴ On June 15, 1993, Complainants filed further comments regarding injury and the threat of injury with SECOFI.²⁵

By means of official letters dated July 13 and 14, 1993, the DPP notified the Complainants that verification visits would be carried out at their respective premises later that month. During ²⁶ the period from July 23-31, 1993, SECOFI carried out these verification visits. At the conclusion ²⁷ of each daily visit, SECOFI, according to normal practices, issued a daily verification certificate (Acta Circunstanciada), the collectivity of which the Panel will refer to herein as a "Verification Report."

In each Verification Report, the respective Complainant was granted a period of 7 business days in which to present in writing to SECOFI any clarifications to the content of the Verification Report, as well as to present any information requested by SECOFI during the course of the verification visit. On September 7, 1993, Complainants held a disclosure conference with SECOFI officials to discuss the manner in which SECOFI had reached its findings in the Preliminary Determination. Following that conference, on September 22, 1993 and again on October 26, 1993, ^{28 29} Complainants filed written comments with SECOFI on the disclosure conference. On August 2, 1994, SECOFI issued its Final Determination, which found both dumping by the Complainants and material injury to the Mexican cut-to-length plate industry. This Final ³⁰ Determination was ordered by the Secretary of Commerce and Industrial Development, but was signed in his absence by the Undersecretary of Foreign Commerce. The Final Determination ³¹ imposed antidumping duties for cut-to-length plate products on USX at the rate of 76 percent and on Bethlehem at the rate of 46.18 percent.

On September 1, 1994, Complainants filed Requests for Panel Review with the Mexican Section of the NAFTA Secretariat and on October 3, 1994 filed formal complaints with that ³² office. Then on October 12, 1994 Complainants filed amended complaints. Thereafter, on ^{33 34} November 2, 1994, the Investigating Authority filed the administrative record with the NAFTA Secretariat.

B. Procedure Before the Panel

Several procedural motions were made to, and considered by, the Panel during the pendency of this review. The orders made by the Panel in response to those motions are briefly summarized below:

February 24, 1995 ³⁵

In response to a motion by Complainants, the Panel unanimously ordered that the Public and Confidential Records be supplemented as to certain letters identified by Complainants and by SECOFI in their motion papers, but denied Complainants’ request that non-confidential summaries of certain confidential documents be placed in the Public Record.

February 24, 1995 ³⁶

In response to a motion by SECOFI, the Panel unanimously denied SECOFI’s request that the Complainants be compelled to file their case brief in a single volume as opposed to its filing in multiple volumes; denied SECOFI’s request that Complainants’ case brief be amended to eliminate certain references that fall outside the administrative record; denied SECOFI’s request that the Complainants be required to "clarify" their case brief in certain respects; and denied SECOFI’s request for an extension of time in which to file a response brief.

April 5, 1995 ³⁷

In response to a motion by AHMSA, the Panel unanimously denied AHMSA’s request that the Complainants be compelled to their case brief in a single volume as opposed to its filing in multiple volumes; denied AHMSA’s request that Complainants’ case brief be amended to eliminate references to U.S. producers that were not party to this particular proceeding; denied AHMSA’s request that Complainants’ case brief be amended to eliminate certain references that fall outside the administrative record; and denied AHMSA’s request that Complainants be required to "clarify" their case brief in certain respects.

April 7, 1995 ³⁸

In response to a motion by SECOFI, the Panel unanimously ordered that Lic. Luis Manuel Pérez de Acha, counsel of record for the Complainants, file powers of attorney issued by his respective clients establishing his authority to represent those clients. April 20, 1995 ³⁹ Of its own motion, the Panel unanimously ordered that the preceding order be amended in certain respects.

April 28, 1995 ⁴⁰

In response to a motion by the Complainants, the Panel unanimously ordered that SECOFI issue an authorization granting Lic. Luis Manuel Pérez de Acha, counsel of record for the Complainants, access to information contained in the Confidential Record without any requirement for the posting of a bond or financial guaranty.

May 12, 1995 ⁴¹

Of its own motion, the Panel issued a new order related to the preceding order.

III. THE STANDARD OF REVIEW⁴²

A. The Treaty Requirements

This Panel derives its authority from Chapter 19 of the NAFTA, a treaty between Mexico, Canada and the United States which came into force in all three countries on January 1, 1994. ⁴³

Pursuant to Article 133 of the Political Constitution of the United Mexican States (the "Constitution"), international treaties signed by the President of the Republic and approved by the Senate (Camara de Senadores) are the Supreme Law of Mexico. Moreover, in contrast to the ^{44 45} situation in Canada and the United States, international treaties are of direct application; they are self-executing and thus directly integrated into the corpus of Mexican law without the necessity of enabling legislation or judicial action. The Supreme Court of Justice of the Nation ("SCJN" or "Supreme Court") has confirmed this principle in a very recent ruling. Thus, this Panel derives ⁴⁶ its essential authority directly from the Treaty itself and it is permitted, indeed compelled, to apply that Treaty language.

As had been the case with respect to Chapter 19 of the Canada-U.S. Free Trade Agreement ("CFTA"), which chapter was incorporated into the NAFTA without significant change, Chapter ⁴⁷ 19 of the NAFTA provides that judicial review of final antidumping and countervailing duty determinations may be replaced with binational panel review of such determinations. In the case ⁴⁸ of Mexico, binational panel review replaces judicial review by the Tribunal Fiscal de la Federación ("Fiscal Tribunal").⁴⁹

Pursuant to Article 1904(3) of the NAFTA, each binational panel must "apply the standard of review set out in Annex 1911 and the general legal principles that a court of the importing Party otherwise would apply to a review of a determination of the competent investigating authority." (Emphases added). Therefore, in a Mexican antidumping case, binational panels must apply the standard of review and the general legal principles that the Fiscal Tribunal would have applied when reviewing a final determination by SECOFI.

As noted, the term "standard of review" is defined in the treaty itself (Annex 1911), which points to separate statutory review standards for each of the three NAFTA Parties. In the case of Mexico, Annex 1911 states that the applicable standard of review is "the standard set out in Article 238 of the Federal Fiscal Code ("Código Fiscal de la Federación"), or any successor statutes, based solely on the administrative record."⁵⁰

The phrase "general legal principles" is also defined in the Treaty. Article 1911 provides that the term "includes principles such as standing, due process, rules of statutory construction, mootness and exhaustion of administrative remedies." By its terms, this is not a wholesale adoption of local legal principles, but rather an adoption of those legal principles that have been developed by the Mexican Courts with respect to the specified (or similar) subject matters.

For its part, the term "administrative record" is defined in Article 1911 to mean generally

(a) the documentary and other information presented to or obtained by the investigating authority in the course of the administrative proceeding;

(b) a copy of the final determination;

(c) all transcripts or records of conferences or hearings; and

(d) all notices published in the official journal (e.g., the D.O.) in connection with the administrative proceeding.

In summary, therefore, this Panel is required to examine and faithfully apply the Mexican standard of review set out in the Treaty and to apply, as and when appropriate, one or more of the principles encompassed by the term "general legal principles," but to confine its review strictly to the facts and information contained in the administrative record.

With these requirements in mind, the Panel acknowledges its central task and objective to be that of determining whether the Investigating Authority’s Final Determination is or is not in accordance with the antidumping law of Mexico. The Treaty guides the Panel as to what ⁵¹ constitutes Mexican antidumping law for this purpose. Article 1904(2) of the official English version of the NAFTA states that "the antidumping ... law [of Mexico] consists of the relevant statutes, legislative history, regulations, administrative practice and judicial precedents to the extent that a court of [Mexico] would rely on such materials in reviewing a final determination of the competent investigating authority." ⁵²

Although the quoted language is unambiguous on its face, one aspect of this provision deserves further mention, and that is its technical failure to specifically mention international treaties of direct application as a source of Mexican antidumping law. Treaty law, such as Article VI of the original General Agreement on Tariffs and Trade ("GATT") and the GATT 1979 Antidumping ⁵³ Code, is, of course, a fundamentally important part of Mexican antidumping law and its potential ⁵⁴ "omission" as a source of antidumping law would be a serious distortion of the law as it actually exists in Mexico.

The Panel notes that under the official Spanish language version of NAFTA Article 1904(2), this does not appear to pose a significant issue. In that version, "leyes" is referred to as ⁵⁵ a source of antidumping law in Mexico, and the term "leyes" is well-known pursuant to the Constitution to include treaties to which Mexico is a party. However, under the official English ⁵⁶ language version of Article 1904(2), which utilizes the words "relevant statutes," the omission of a reference to treaties may be of some moment. Nevertheless, the Panel concludes that there is ⁵⁷ ample support that these treaty documents are an important source of Mexican antidumping law for purposes of Chapter 19 generally and Article 1904(2) specifically and that it is appropriate in this context to rely upon the Spanish language version of Article 1904(2). Therefore, the Panel has considered them in depth for purposes of this review. ⁵⁸ The Panel also notes the similar technical failure of Article 1904(2) to make reference to constitutional sources as a potential source of antidumping law. Again, however, to the extent ⁵⁹ that the Mexican Constitution has provisions which, expressly or by judicial interpretation, impact the scope or meaning of an antidumping statute, or which impact the scope or meaning of the defined standard of review, this Panel regards itself as compelled to take those constitutional provisions into account. No party in this review has argued to the contrary. Moreover, the Panel notes that the definition of "domestic law" contained in NAFTA Article 1911, for purposes of Article 1905(1) ⁶⁰ ("Safeguarding the Panel Review System"), would impose on an Article 1905 committee the duty ⁶¹ to consider and apply the Mexican Constitution along with statutes, regulations and judicial decisions in this safeguard context.

In summary, therefore, the Panel interprets its obligations under Article 1904(2) of the NAFTA in the Mexican context as requiring it to examine

(i) the Mexican Constitution;

(ii) treaty law;

(iii) statutes;

(iv) legislative history,

(v) regulations, (vi) administrative practice, and

(vii) ⁶² judicial precedents,

all to the extent that the Fiscal Tribunal would have relied on such sources. Of course, not all of these sources of law are of equivalent rank. Under Article 133 of the Mexican Constitution, the Constitution itself prevails over all other law, and constitutionally-mandated laws and international treaties prevail over ordinary federal or state laws , including regulations. It is ⁶³ a principle of federal law to consider the latter in time to prevail in the event of inconsistency.⁶⁴

It was noted in the discussion of Article 1904(2) above that the Panel should rely on the stipulated sources of law "to the extent that a court of the importing Party would rely on such materials in reviewing a final determination of the competent investigating authority." In order to accomplish this, the Panel thus considers it necessary to follow the legal methodologies employed by local courts (i.e., the Fiscal Tribunal) in applying these various sources of antidumping law. While binational panels are intended to "replace" judicial review of agency determinations, they are not intended to apply a different substantive law than would be applied by the local court, nor are they intended to apply a different standard of review than would be applied by the local court. Indeed, there has been broad recognition of the fact that binational panels are not to develop a separate jurisprudence in antidumping cases from the jurisprudence developed by local tribunals for such cases. The very essence of the Chapter 19 process is one of ensuring that the procedural ⁶⁵ improvements adopted in Chapter 19 by the NAFTA Parties for the review of antidumping duty cases will be faithfully implemented, but not to make substantive changes in the local antidumping law. The three governments have reserved that option for themselves. In short, it is a fundamental ⁶⁶ obligation of binational panels to attempt to construe local antidumping law as a local court would construe it, and to construe the applicable standard of review as a local court would construe it. With the foregoing in mind, the Panel now turns to an examination of the cited standard of review in Mexico, Article 238 of the Federal Fiscal Code.

Continue on to Subsection B: The Statutory Language

¹ North American Free Trade Agreement ("NAFTA"), drafted Aug. 12, 1992, revised Sept. 6, 1992, signed by the President of Mexico, Dec. 17, 1992, approved by the Mexican Senate, Nov. 22, 1993, published in the Diario Oficial de la Federación ("D.O."), December 20, 1993, entered into force January 1, 1994, and reprinted in 32 I.L.M. 605 (1994) and in Editorial Porrúa, S.A. in 1994. [In this Courtesy English Translation, all references to the text of the NAFTA are to the official English language version thereof.]

² Definitive Resolution Regarding the Antidumping Investigation into Imports of Cut-to-Length Plate from the United States, made on July 29, 1994 and published in the D.O., August 2, 1994 ("Final Determination").

³ Under Article 1906(a) of the NAFTA, the binational panel review mechanism applies prospectively to "final determinations of a competent investigating authority made after the entry into force of this Agreement." Thus, although the investigation was begun prior to the entry into force of the NAFTA, the Final Determination was issued after the NAFTA’s entry into force, satisfying the requirements of Article 1906(a). In the case of Mexico, the "competent investigating authority" is defined in Annex 1911 of the NAFTA as the designated authority within the SECOFI.

⁴ As stated in the Final Determination, the subject goods are known in Mexico as placa en hoja or plancha de acero en hoja and in the United States as cut-to-length steel plate, plate, heavy plate and medium plate. See Final Determination, at 2.

⁵ Bethlehem and USX, the complainants in this panel review proceeding, were respondents in the underlying administrative proceeding. For consistency sake, however, the Panel will refer throughout this Opinion to these two companies as the "Complainants."

⁶ A summary of the challenges by the Complainants to the Final Determination appears in Part IV of this Opinion.

⁷ Panelists Ramírez, Lutz and Endsley make up the Panel majority.

⁸ Citations to documents on the non-confidential administrative record (the public record) will be designated as "Volume ___, P.R. ____." Citations to documents on the confidential administrative record will be designated as "Volume ___, C.R. _____."

⁹ Complaint Against Unfair Trade Practices (December 4, 1992) (Volume 1, P.R. 2529).

¹⁰ Notice of Receipt of Petition (December 11, 1992) (Volume 1, P.R. DGPCI.92.1902).

¹¹ See Provisional Resolution Declaring the Opening of the Administrative Investigation of Imports of Cut-to-Length Plate from the United States ("Provisional Determination"), D.O. (December 24, 1992) (Volume 1, P.R. sn) The letters "sn)" mean no number (sin número).

¹² The merchandise covered by the Provisional Determination includes Harmonized Tariff System items 7208.32.01, 7208.33.01, 7208.42.01 and 7208.43.01.

¹³ See Article 31 of the 1989 SECOFI Internal Regulations, discussed infra.

¹⁴ See, for example, Notice of Provisional Determination issued to Aceros, R.G.C., S.A. (February 3, 1993) (Volume 1, P.R. DGPCI.93.100).

¹⁵ See Notice of Provisional Determination issued to USX (February 8, 1993) (Volume 1, P.R. DGPCI.93.124) and to Bethlehem (February 8, 1993) (Volume 1, P.R. DGPCI.93.133).

¹⁶ Responses of Bethlehem and USX to the official questionnaire (March 8, 1993) (Volume 2, P.R. 705 and 702, respectively).

¹⁷ Information about injury and threat of injury (March 8, 1993) (Volume 2, P.R. 708).

¹⁸ See Revision of the Provisional Resolution Regarding the Antidumping Investigation of Imports of Cut-to-Length Plate from the United States ("Preliminary Determination") (April 29, 1993) (Volume 3, P.R. s/n). SECOFI calculated a dumping margin of 16.42% for Bethlehem and 44.92% for USX.

¹⁹ See letter to Bethlehem (April 30, 1993) (Volume 3, P.R. UPCI.93.1414), and letter to USX (April 30, 1993) (Volume 3, P.R. UPCI.93.1404).

²⁰ See letter to Ambassador (April 29, 1993) (Volume 3, P.R. UPCI.211.93.1425) and letter to Commercial Counselor (April 29, 1993) (Volume 3, P.R. UPCI.211.93.1426).

²¹ See letter to SECOFI (March 10, 1993) (Volume 3, P.R. 1975).

²² See letter to Complainants (May 14, 1993) (Volume 3, P.R. UPCI.211.93.1571).

²³ See letter to SECOFI (May 18, 1993) (Volume 3, P.R. 2084).

²⁴ See letter to Complainants (May 21, 1993) (Volume 3, P.R. UPCI.211.93.1601).

²⁵ See letter to SECOFI (June 15, 1993) (Volume 3, P.R. 2753).

²⁶ See letter to USX (July 13, 1993) (Volume 13, C.R. UPCI.211.93.2289) and letter to Bethlehem (July 14, 1993) (Volume 13, C.R. UPCI.211.93.2344).

²⁷ The verification visits for USX were conducted on July 23-24 and 26-27, 1993 (Volume 13, C.R. s/n) and the verification visit for Bethlehem was conducted on July 28-31, 1993 (Volume 13, C.R. s/n).

²⁸ See letter to SECOFI (September 22, 1993) (Volume 15, C.R. 4297).

²⁹ See letter to SECOFI (October 26, 1993) (Volume 5, P.R. 4828).

³⁰ See Final Determination (August 2, 1994) (Volume 5, P.R. s/n).

³¹ The Final Determination was signed by Undersecretary Pedro Noyola in the absence of Secretary Jaime Serra Puche.

³² See Bethlehem Request for Panel Review (September 1, 1994) (Volume 1, S.C.R. 1) and USX Request for Panel Review (September 1, 1994) (Volume 1, S..C.R. 2). Citations to documents on the non-confidential Secretariat record will be designated as "Volume ___, S.P.R. ___." Citations to documents on the confidential Secretariat record will be designated as "Volume ___, S.C.R. ___."

³³ See USX Complaint (October 3, 1994) (Volume 2, S.P.R. 51) and Bethlehem Complaint (October 3, 1994) (Volume 2, S.P.R. 52).

³⁴ See USX Amended Complaint (October 12, 1994) (Volume 3, S.P.R. 59) and Bethlehem Amended Complaint

(October 12, 1994) (Volume 3, S.P.R. 58).

³⁵ Volume 8, S.P.R. 161.

³⁶ Volume 8, S.P.R. 169.

³⁷ Volume 14, S.P.R. 284.

³⁸ Volume 14, S.P.R. 298. In addition to signing the order of the full Panel, Panel Member Ramírez provided additional views regarding the issues addressed in that order.

³⁹ Volume 15, S.P.R. 345.

⁴⁰ Volume 15, S.P.R. 367. In addition to signing the order of the full Panel, Panel Member Ramírez provided additional views regarding the issues addressed by the Panel in that order.

⁴¹ Volume 16, S.P.R. 408.

⁴² Panelists Vega and Barton do not join in this portion of the Opinion.

⁴³ See Art. 2203 ("This Agreement shall enter into force on January 1, 1994, on an exchange of written notifications certifying the completion of necessary legal procedures.") See also Poder Ejecutivo, Secretaría de Relaciones Exteriores, D.O., Dec. 8, 1993 (declaring Mexican Senate approval of the NAFTA and accompanying agreements).

⁴⁴ Article 76, Section I, of the Mexican Constitution provides in pertinent part: "The exclusive powers of the Senate are: ...[T]o approve the international treaties and diplomatic conventions made by the Executive of the Union."

⁴⁵ Article 133 of the Mexican Constitution provides in pertinent part: Article 133.—This Constitution, the laws of the Congress of the Union which emanate therefrom, and all treaties made, or which shall be made in accordance therewith by the President of the Republic, with the approval of the Senate, shall be the Supreme Law throughout the Union.

⁴⁶ See Contradicción de Tesis 392, Pleno de la Suprema Corte de Justicia, sesión del 2 de marzo de 1994 (international treaties are to be directly applied even if inconsistent with pre-existing internal rules).

⁴⁷ Canada-U.S. Free Trade Agreement, done January 2, 1988, entered into force January 1, 1988, and reprinted in 27 I.L.M. 281 (1988).

⁴⁸ NAFTA, Article 1904(1).

⁴⁹ The Fiscal Tribunal is an administrative court, with full powers to render decisions and issue orders, and with its organization and attributes established by the Organic Law of the Federal Fiscal Tribunal (Ley Orgánica del Tribunal Fiscal de la Federación). The jurisdiction of the Fiscal Tribunal is not limited to matters of a fiscal character, but also covers other areas of administrative law. Most pertinently, Article 15(VII) of its Organic Law grants jurisdiction to the Upper Division of the Fiscal Tribunal to resolve disputes under Article 95 of the new Foreign Trade Law ("Resolver los juicios en materia de comercio exterior a que se refiere el artículo 95 de la Ley de Comercio Exterior"). The latter provision (unofficial translation) states: Art.95.- The purpose of the administrative appeal referred to in this Chapter shall be to revoke, modify, or uphold the contested administrative determination and the decisions which are rendered shall contain the joinder of the issue, the legal grounds upon which such administrative act are based, and the resolutive points.

The administrative appeal for revocation shall proceed and be resolved in accordance with the provisions of the Federal Fiscal Code, and shall be exhausted before any judicial proceedings before the Upper Division of the Fiscal Tribunal shall commence.

Administrative decisions issued to resolve the appeal for reversal and revocation, or those decisions that hold that no appeal, in effect, has been filed, shall be considered final for purposes of bringing a legal action before the Upper Division of the Fiscal Tribunal, through a judicial proceeding prosecuted pursuant to the final paragraph of article 239 bis of the Federal Fiscal Code.

The administrative determinations set forth in Article 94 not appealed within the time limit set forth in the Federal Fiscal Code shall be deemed accepted and may not be challenged before the Fiscal Tribunal.

⁵⁰ In the case of Canada, the applicable standard of review is "the grounds set out in subsection 18.1(4) of the Federal Court Act, as amended, with respect to all final determinations" and, in the case of the United States, it is, in most instances, "the standard set out in section 516A(b)(1)(B) of the Tariff Act of 1930, as tended...."

⁵¹ Article 1904(2) specifically requires the Panel to "review, based on the administrative record, a final antidumping or countervailing duty determination of a competent investigating authority of an importing Party to determine whether such determination was in accordance with the antidumping or countervailing duty law of the importing Party."

⁵² For purposes of a panel review, Article 1904(2) actually incorporates directly into the Treaty itself the local antidumping and countervailing duty statutes and does so without any substantive amendment of those statutes.

The term "statute]" is defined in Annex 1911 as, in the case of Mexico, "the relevant provisions of the Foreign Trade Act Implementing Article 131 of the Constitution of the United Mexican States (Ley Reglamentaria del Artículo 131 de la Constitución Política de los Estados Unidos Mexicanos en Materia de Comercio Exterior), as amended, and any successor statutes". See D.O., January 13, 1986. The cited statute, to be referred to herein as the "Old Mexican Trade Law," has been superseded by the new Foreign Trade Law (Ley de Comercio Exterior).

See D.O. , July 27, 1993, as amended, D.O., December 22, 1993. Nevertheless, in the instant case, Transitory Provision Fourth of the new Foreign Trade Law provides that the former law remains applicable ("The administrative proceedings referred to in this Law that are pending at the time this Law enters into force shall be governed by the terms of the Foreign Trade Act Implementing Article 131 of the Constitution of the United Mexican States").

⁵³ General Agreement on Tariffs and Trade ("GATT"), opened for signature, Oct. 30, 1947, 55-61 U.N.T.S. 104, T.I.A.S. No. 1700, IV Basic Instruments and Selected Documents ("B.I.S.D.") 1, 4 Bevans 639, as amended T.I.A.S. No. 1890. Mexico became a signatory to the GATT on August 24, 1986. See Poder Ejecutivo, Secretaría de Relaciones Exteriores, D.O., Oct. 29, 1986 (publishing decree pursuant to which Mexican Senate ratified Mexico’s Protocol of Accession to GATT). As a result of the Uruguay Round negotiations, the GATT is being superseded by the World Trade Organization ("WTO"). The WTO came into force on January 1, 1995 for each of Mexico, Canada and the United States but it has been agreed that for a period of one year GATT 1947 and the WTO (including GATT 1994) shall co-exist, principally to provide time to settle outstanding GATT disputes. Similarly, the Tokyo Round Antidumping and Subsidies Codes are to co-exist with their new Uruguay Round counterparts for a period of one year. By its terms, the Uruguay Round Antidumping Code will supersede the Tokyo Round Antidumping Code only with respect to "investigations" and reviews of existing measures" initiated after the WTO has come into effect. See Para. 18.3.

⁵⁴ Agreement on Implementation of Article VI of the GATT ("GATT 1979 Antidumping Code"), 31 U.S.T. 4919, T.I.A.S. No. 9650, 1160 U.N.T.S. 204, 26 B.I.S.D. 171-88 (1980); reprinted in 18 I.L.M. 621 (1979) (entered into force January 1, 1980). Mexico became a signatory to the GATT 1979 Antidumping Code on April 12, 1979, but it did not come into force in Mexico until 1988. See Decreto de promulgación del Acuerdo relativo a la Aplicación del Artículo VI del Acuerdo General sobre Aranceles Aduaneros y Comercio, D.O., Apr. 21, 1988 (publishing Mexican Senate ratification and text of GATT 1979 Antidumping Code); see also Decreto por el que se aprueba el Acuerdo relativo a la Aplicación del Artículo VI del Acuerdo General sobre Aranceles Aduaneros y Comercio, D.O., Dec. 4, 1987 (ratifying GATT 1979 Antidumping Code).

⁵⁵ The second sentence of the official Spanish language version of NAFTA Article 1904(2) reads: "Para este efecto, las disposiciones jurídicas en materia de cuotas antidumping y compensatorias consisten en leyes, antecedentes legislativos, reglamentos, práctica administrativa y precedentes judiciales pertinentes, en la medida en que un tribunal de la Parte importadora podría basarse en tales documentos para revisar una resolución definitiva de la autoridad investigadora competente." (Emphasis added.)

⁵⁶ See Article 133 of the Constitution.

⁵⁷ This discrepancy in language may be explained by the fact that in Canada and the United States the word "statute" would be a normal and appropriate use. In addition, in these two countries treaties almost never have direct application (i.e., they are not self-executing). Instead, they enjoy their validity through enabling legislation (i.e., a specific statute implementing the international obligations represented by the treaty). In this context, the English language version of Article 1904(2) would present no concern or difficulty. As shown above, however, in Mexico these treaty obligations are often of direct effect, not imposed through statutory enabling legislation.

⁵⁸ The Panel notes that the parties to this proceeding have themselves relied extensively on this treaty language.

⁵⁹ Regrettably, this technical failure is not "cured" by an examination of the Spanish language text of the NAFTA.

⁶⁰ Article 1911 defines "domestic law" as follows: "domestic law for purposes of Article 1905(1) means a Party´s constitution, statutes, regulations and judicial decisions to the extent they are relevant to the antidumping and countervailing duty laws." (Emphasis added.)

⁶¹ Not included in the CFTA, the NAFTA´s safeguard mechanism is designed to protect panel rulings and the panel process whenever a Party´s law impedes the effective functioning of the binational panel review process.

⁶² The Panel also notes that it would be appropriate to include the NAFTA itself as a source of antidumping law if the NAFTA included substantive provisions related to that law. As noted earlier, however, while the NAFTA has implemented important procedural changes in the antidumping arena, it has not made substantive changes in the antidumping law of any of the three NAFTA Parties. As will be noted later, the Panel also is of the view that the NAFTA did not intend to make any substantive changes in the Mexican standard of review.

⁶³ Under Article 133 of the Constitution, the Constitution prevails over all other laws. On a second level are the laws of Congress which emanate from, or are mandated by, the Constitution and international treaties. Examples of these would be the Ley Reglamentaria del Artículo 131 de la Constitución Política de los Estados Unidos Mexicanos en materia de comercio exterior and NAFTA. This body of laws, comprise the Supreme Law of the Union. On a third level are ordinary federal laws, which do not develop specific articles of the Constitution; and on a fourth level, federal regulations and all state laws and regulations. See page 32 of Estudios Constitucionales by Jorge Carpizo, Instituto de Investigaciones Jurídicas, UNAM, 1980.

⁶⁴ See the following decision: LEYES, REFORMAS O DEROGACION DE LAS. ".... Pero tratátandose de dos leyes federales, una disposición de la posterior puede derogar a la anterior.... Puede ser tácita, como cuando lo dispuesto en el precepto nuevo sea incompatible con lo dispuesto en el precepto anterior, aunque se trate de distintos cuerpos de leyes, y aunque en la ley nueva no se hable expresamente de derogación alguna." Instancia: Tribunales Colegiados de Circuito. Fuente: Semanario Judicial de la Federación. Epoca 7a, Volumen 32. Página 59. See also Article 9 of the Código Civil.

⁶⁵ This conclusion, of course, flows from the language of the Treaty itself. Articles 1901 and 1902 make it clear that each country retains its existing domestic antidumping law without change, but is free to amend that law. Under Article 1903, a procedure is established whereby any such amendment can be challenged for its consistency with the Treaty. Various statements made by the U.S. Congress also make this point indisputably clear. In the Statement of Administrative Action to the North American Free Trade Agreement Implementation Act, reprinted in H. Doc. 103-159, Vol. 1, 103d Cong., 1st Sess. at 195, for example, Congress made the following statement: "There are several advantages to having judges and former judges serve as panelists. For example, the participation of panelists with judicial experience would help to ensure that, in accordance with the requirement of Article 1904, panels review determinations of the administering authorities precisely as would a court of the importing country by applying exclusively that country’s AD and CVD law and its standard of review. In addition, the involvement of judges in the process would diminish the possibility that panels and courts will develop distinct bodies of U.S. law." (Emphases added).

⁶⁶ Article 1902.