3. Presumption of Nullification or Impairment

20. Guatemala believes that the Panel's reasoning on this issue starts from a mistaken premise. The Panel considers that it is not necessary for the complaining Member to prove that the failure to fulfil an obligation has particular adverse trade effects. This effectively denies Guatemala the possibility of providing evidence to the contrary and converts the rebuttable presumption of nullification or impairment that is set down in Article 3.8 of the DSU into an absolute one.

21. Guatemala considers that since it led evidence that Mexico's rights of defence were properly safeguarded, despite the late notification under Article 5.5 of the Anti-Dumping Agreement, it was for Mexico to prove any specific adverse effects or to show how its rights of defence were in fact prejudiced. Guatemala asserts that a rebuttable presumption does not shift the burden of proof, but rather it relieves the claimant of the burden of demonstrating a prima facie case in its favour. If the other party leads evidence that casts doubt on what the presumption purports to show, then the complaining party must lead further evidence in order to satisfy the burden of proof. This is the proper interpretation of Article 3.8 of the DSU. The defending party may rebut the presumption by proving that the violation had no adverse impact. Guatemala submits that it did just that in this case.

22. First, the Anti-Dumping Agreement, unlike the Agreement on Subsidies and Countervailing Measures (the "Subsidies Agreement"), does not impose any obligation to seek or hold consultations before initiating an investigation, so the failure to give timely notification did not deprive Mexico of any right to consult. Second, no evidence substantiates the argument that timely notification would have given Mexico any opportunity to reach a compromise prior to initiation of the investigation since Guatemala could have initiated the investigation immediately after notifying Mexico. Third, Guatemala did not undertake any concrete steps in the investigation until Mexico had been notified and it then gave Cruz Azul¹⁹ a further period of two months to reply to the questionnaires. Fourth, even if Mexico had wished to reach a compromise before initiation, it had neither the power, the right nor the proper procedure for doing so, as anti-dumping cases cannot be the subject of transactions between governments. Fifth, Mexico's "acquiescence" in the initiation of the investigation over a period of six months shows that it did not have any interest in reaching a compromise.

23. Guatemala also asserts that the Panel's references to United States - Taxes on Petroleum and Certain Imported Substances²⁰ and Japan - Taxes on Alcoholic Beverages²¹ are irrelevant in this context. These cases deal with substantive breaches that might have an effect on the levels of trade of Members, whereas the present case deals with the breach of a procedural obligation that has nothing to do with levels of trade. Guatemala argues that the Panel also erred in referring to Brazil - Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk from the European Economic Community²² because this case does not concern nullification or impairment, but rather the application of the concept of "harmless error", which is, in any event, consistent with the normal rule on the burden of proof.

24. Guatemala therefore submits that the Panel erred in its interpretation of Article 3.8 of the DSU.

4. Article 5.3 of the Anti-Dumping Agreement

25. As regards the obligations imposed by Article 5.3 of the Anti-Dumping Agreement, Guatemala considers that if an investigating authority determines that an application made under Article 5.2 of that Agreement complies with the requirements of that latter provision and if the authority examines the "accuracy and adequacy" of the evidence accompanying the application, then the authority has discretion to determine that there is "sufficient evidence" under Article 5.3. Furthermore, a panel may not review the authority's determination on whether that evidence is sufficient. In terms of Article 5.3, Guatemala believes that all that a panel may review is whether or not the authority actually examined the "accuracy and adequacy" of the evidence.

26. Guatemala supports this interpretation by reference to the wording of Article 5.2 as well as its context. Guatemala makes reference in that regard to Articles 5.6 and 5.8 of the Anti-Dumping Agreement and to Article 11.2 of the Subsidies Agreement. It considers that its interpretation is also consistent with the object and purpose of Article 5.3, as defined by the Panel.²³ Guatemala also derives support for its view from the drafting history of that provision.

27. Guatemala considers that the Panel erred in concluding that Articles 2 and 3.7 of the Anti-Dumping Agreement are applicable at the initiation stage of an investigation. Article 5.2 of that Agreement lists the type of information that must be provided in an application and it does not mention Article 2. If considerations were imported into Article 5.2 from Article 2, then the specific requirements of Article 5.2 would be rendered redundant. Likewise, although Article 5.2(iv) does provide that paragraphs 2 and 4 of Article 3 are relevant at the stage of initiation, it does not mention Article 3.7. Article 5.2 does not therefore oblige authorities to take account of the factors and indices mentioned in Article 3.7.

28. The Panel also erred in imposing an obligation on investigating authorities that is not contained in the Anti-Dumping Agreement. According to Guatemala, the Panel found that when authorities formulate a recommendation or issue the notice of initiation, they must recognize: (1) that during the course of the investigation, it will be necessary to make the adjustments provided for in Article 2 in order to make a fair comparison, or (2) that an examination has been carried out that goes beyond the evidence or information contained in the application. Guatemala contends that the Panel has erred in reaching this conclusion because the Anti-Dumping Agreement does not oblige the investigating authority either to acknowledge the need to make adjustments or to examine evidence not included in the application. The requirement to make adjustments arises under Article 2 only during the course of an investigation.

29. The fact that Articles 2 and 3.7 are not relevant at the stage of initiation is, in Guatemala's view, borne out by Article 12 of the Anti-Dumping Agreement. According to this provision, it is only in the case of preliminary and final determinations that the public notice must include information on the comparison of prices and on the considerations relevant to the determination of injury. The notice of initiation need only provide information concerning the basis of the allegations of dumping and injury.

30. At footnote 242 of its Report the Panel declined to consider certain "additional evidence" that Guatemala alleged was taken into account by the investigating authority when it decided to initiate the investigation. The reason for the Panel's refusal was that it could find no trace of this evidence in any part of the file relating to the decision to initiate. Guatemala submits that the Panel was wrong to refuse to admit this evidence because the Anti-Dumping Agreement does not oblige the authority to reveal what additional evidence it may have taken into consideration before taking the initiation decision.

31. Guatemala submits that the Panel's interpretation of the word "evidence" in Article 5.3 of the Anti-Dumping Agreement is also flawed. The Panel was wrong to find that "sufficient evidence" means something whose accuracy and adequacy can be "objectively evaluated".²⁴ The Panel has, in reality, added an obligation to Article 5.2 since, as well as being all that is "reasonably available", information provided in an application must now also be capable of objective evaluation.

32. Guatemala maintains that this interpretation of Articles 5.2 and 5.3 of the Anti-Dumping Agreement, which it argued before the Panel, was "permissible" and that the Panel, therefore, erred in rejecting it because Article 17.6(ii) of the Anti-Dumping Agreement mandates that the Panel shall find a measure to be consistent with the Agreement if it is adopted on the basis of one permissible interpretation of a provision.

33. As regards the Panel's review of the facts, Guatemala submits that it erred in its interpretation of Article 17.6(i) of the Anti-Dumping Agreement. According to Guatemala, that provision requires a Panel to accept the authority's evaluation of the facts unless there is a finding, based on positive evidence submitted by the defending party, of bias or subjectivity. Since there was no such finding in the present case, the Panel should have accepted the Guatemalan authority's evaluation of the facts.

34. However, even if positive evidence of bias or subjectivity were not required, Guatemala argues that the Panel improperly interpreted Article 17.6(i) as permitting it to carry out a de novo evaluation of the facts. Furthermore, the Panel was wrong to rely on the panel report in United States - Softwood Lumber²⁵, since that panel was concerned with the provisions of a different agreement, namely the Agreement on Interpretation and Application of Articles VI, XVI and XXIII (the "Tokyo Round Subsidies Agreement")²⁶, which has no provision like Article 17.6(i).

B. Mexico - Appellee

1. Whether the Dispute was Properly Before the Panel

35. Mexico endorses the Panel's finding that the term "measure" is not restricted to final anti-dumping measures, provisional anti-dumping measures and acceptance of price undertakings. Since neither the Anti-Dumping Agreement nor the DSU contains a definition or a special meaning for the term "measure", it should be interpreted broadly and in accordance with its ordinary meaning. According to Mexico, that meaning includes "any action or act carried out to achieve a particular end". The text and context of the Anti-Dumping Agreement and the DSU show that Article 17 of the Anti-Dumping Agreement does not support Guatemala's argument that the only measures which may be contested are those enumerated in Article 17.4.

36. Mexico agrees with the Panel that Article 17.4 itself is simply a "timing provision".²⁷ The provision does not include language that would limit disputes under the Anti-Dumping Agreement to three types of measure. Indeed the English version of the provision does not mention final measures at all, but refers only to whether "final action has been taken ... to levy definitive anti-dumping duties or to accept price undertakings ... ". Article 17.3 also permits, as the Panel found ²⁸, consultations about any "matter" without limit on the types of measure that may be contested. Likewise, Article 17.5 does not specifically make reference to any of the three measures Guatemala cites. It refers simply to the "matter". Mexico adds that it does not consider that the Panel found that Article 17.3 is a special or additional rule. All the Panel stated was that "if Article 17.3 requires something different from the corresponding Article 4 of the DSU, the provisions of Article 17.3 must prevail, otherwise Article 17.4 would not be given full effect".²⁹

37. In Mexico's view, Articles 1 and 18.3 of the Anti-Dumping Agreement show, at most, that a "measure" is different from an "investigation". But that does not mean that the only measures that may be contested are those mentioned in Article 17.4. Other provisions of the Anti-Dumping Agreement confirm the conclusion that, in that Agreement, the word "measure" means more than final anti-dumping measures, provisional anti-dumping measures and acceptance of price undertakings. Article 10.7 speaks of "such measures as the withholding of appraisement or assessment as may be necessary to collect anti-dumping duties ..." (emphasis added), and Article 13 refers to "medidas administrativas" (which in the English text appears as "administrative actions"). Article 17.6(ii) also illustrates clearly that the term "measure" is related to compliance with any of the provisions of the Anti-Dumping Agreement. Likewise, according to Mexico, Article 3.8 of the DSU and Article XXIII of the GATT 1994 indicate that the infringement of any obligation constitutes a "measure".

38. Mexico considers that Guatemala's view of the object and purpose of the word "measure" is unrealistic. There is, as the Panel stated³⁰, no risk of multiple panels examining a single investigative procedure since Article 17.4 of the Anti-Dumping Agreement means that a panel can only be established after specific triggering events. Guatemala's position also provides a Member with a strong incentive to initiate investigations in violation of the Anti-Dumping Agreement since, even where the initiation of the investigation is manifestly unlawful, a Member must await a final resolution before commencing dispute settlement proceedings. Mexico contends that it is precisely to avoid this that Article 17.4 permits recourse to dispute settlement to challenge a provisional measure. Guatemala's position would mean that it was, in reality, impossible to challenge a provisional measure on the grounds of unlawful initiation, because the time required for a panel to report will always exceed the maximum life of the provisional measure as set down in Article 7.4 of the Anti-Dumping Agreement.

39. Mexico contends that any conclusion other than that reached by the Panel would, contrary to the rules of the Vienna Convention, deprive many provisions of the Anti-Dumping Agreement of their effect, including those on initiation and the special or additional rules and procedures on dispute settlement. Mexico, therefore, proposes that the Appellate Body reject Guatemala's arguments that the dispute was not properly before the Panel. The Appellate Body should also dismiss Guatemala's arguments concerning the Panel's interpretation of Article 19.1 of the DSU.

2. Presumption of Nullification or Impairment

40. Mexico asserts that Guatemala has not demonstrated that its violation of Article 5.5 of the Anti-Dumping Agreement did not have adverse effects for Mexico. First, the absence of obligations in the Anti-Dumping Agreement regarding the need for consultations prior to the initiation of an investigation does not mean that a Member no longer has the right to timely notification under Article 5.5 of that Agreement, so as to be able to react in good time according to its best interests. Second, if Guatemala had initiated the investigation immediately after notifying Mexico, the question of adverse impact and the burden of proof would not have arisen. Third, the fact that Mexico had to request an extension of time in itself constitutes an example of the adverse impact caused by the late notification. Fourth, the fact that anti-dumping investigations are not the subject of transactions between governments has nothing to do with whether Mexico suffered adverse effects in this case. The possibility of a settlement between Guatemala and Mexico exists irrespective of when notification takes place. Finally, Mexico did not acquiesce in the late notification. Moreover, Mexico maintains that violation of Article 5.5 of the Anti-Dumping Agreement is not a harmless error because the failure to comply with that provision denied Mexico time to defend its interests. Mexico submits that Guatemala is also wrong to assert that the Panel has made the burden of proof impossible to fulfil. Guatemala simply failed to prove what it had to prove.

To continue with Article 5.3 of the Anti-Dumping Agreement

¹⁹The Mexican company which is alleged to have dumped portland cement in Guatemala.

²⁰Adopted 17 June 1987, BISD 34S/136.

²¹Adopted 1 November 1996, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R.

²²Adopted 28 April 1994, BISD 41S/467, paras. 270 and 271.

²³Referring to the panel report in United States - Measures Affecting Softwood Lumber from Canada ("United States - Softwood Lumber"), adopted 27 October 1993, BISD 40S/358, the Panel considered that the purpose of Article 5.3 was to establish a balance between the competing interests of the domestic industry in the importing country and the interest of the exporting country in avoiding investigations (Panel Report, para. 7.52).

²⁴Panel Report, para. 7.71.

²⁵Adopted 27 October 1993, BISD 40S/358.

²⁶BISD 26S/56.

²⁷Panel Report, para. 7.18.

²⁸Panel Report, para. 7.14.

²⁹Panel Report, para. 7.13.

³⁰Panel Report, footnote 212.