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World Trade
Organization

WT/DS60/R
19 June 1998
(98-2418)
Original: English
 

Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico

Report of the Panel


The report of the Panel on Guatemala - Anti-Dumping Investigation Regarding Portland Cement from Mexico is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 19 June 1998. pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report. An appeal shall be limited to issues of law covered in the Panel report and legal interpretations developed by the Panel. There shall be no ex parte communications with the Panel or Appellate Body concerning matters under consideration by the Panel or Appellate Body.

Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be considered for adoption by the DSB until after the completion of the appeal. Information on the current status of the Panel Report is available from the WTO Secretariat.


Table of Contents

I. Introduction
II. Factual Aspects
III. Findings and Recommendations Requested by the Parties
IV.Main Arguments of the Parties

V. Arguments Presented by the Third Parties VI. Interim Review
VII. Findings VIII. Recommendation


I. Introduction

1.1 On 15 October 1996, Mexico requested consultations with Guatemala under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") and Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("ADP Agreement") regarding the anti-dumping investigation carried out by Guatemala concerning imports of portland cement from Cooperativa Manufacturera de Cemento Portland la Cruz Azul, SCL, of Mexico ("Cruz Azul") (WT/DS60/1). Mexico's request for consultations preceded Guatemala's final determination of dumping and consequent injury and the imposition of the definitive anti-dumping duty.

1.2 Mexico and Guatemala held consultations on 9 January 1997, but failed to reach a mutually satisfactory solution.

1.3 On 4 February 1997, pursuant to Article 17.4 of the ADP Agreement, Mexico requested the establishment of a panel to examine the consistency of Guatemala's anti-dumping investigation into imports of portland cement from Mexico with Guatemala's obligations under the World Trade Organization ("WTO"), in particular those contained in the ADP Agreement (WT/DS60/2).

1.4 At the meeting of the Dispute Settlement Body ("DSB") on 25 February 1997, Guatemala stated that it could not join the consensus to establish a panel until certain domestic procedures concerning the investigation had been completed. The DSB agreed to revert to this matter at a later date.

1.5 At its meeting on 20 March 1997, the DSB established a panel in accordance with Article 6 of the DSU with standard terms of reference. The terms of reference were:

"To examine, in the light of the relevant provisions of the covered agreements cited by Mexico in document WT/DS60/2, the matter referred to the DSB by Mexico in that document and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements". (WT/DS60/3) 1.6 Canada, El Salvador, Honduras and the United States reserved their rights to participate in the Panel proceedings as third parties.

1.7 On 21 April 1997, Mexico requested the Director-General to determine the composition of the Panel, pursuant to Article 8.7 of the DSU. On 1 May 1997, the Director-General composed the following Panel:

Chairman:Mr. Klaus Kautzor-Schr÷der
Members:Mr. Christopher Norall
 Mr. Gerardo Teodoro Thielen Graterol

1.8 Mr. Christopher Norall resigned from the Panel on 27 June 1997. On 11 July 1997 the Director-General, acting on a request from Mexico, appointed a new member to the Panel. Accordingly, the composition of the panel was:

Chairman:Mr. Klaus Kautzor-Schr÷der
Members:Mr. Gerardo Teodoro Thielen Graterol
 Mr. JosÚ Antonio S. Buencamino

1.9 The Panel met with the parties on 28/29 July 1997 and 13/14/15 October 1997. It met with third parties on 28 July 1997.

1.10 On 30 July 1997, the Chairman of the Panel informed the DSB that the Panel would not be able to issue its report within six months of the agreement on the composition and terms of reference of the Panel. The reasons for the delay are set out in WT/DS60/5.

1.11 The Panel submitted its interim report to the parties on 23 March 1998. On 3 April 1998, both parties submitted written requests for the Panel to review precise aspects of the interim report. At the request of Guatemala, the Panel held a further meeting with the parties on 16 April 1998 on the issues identified in the written comments. The Panel submitted its final report to the parties on 18 May 1998.

II. Factual Aspects

2.1 This dispute concerns the initiation and subsequent conduct by Guatemala's Ministry of Economy ("Ministry") of an anti-dumping investigation against imports of grey portland cement from Cruz Azul, a Mexican producer. Cementos Progreso SA ("Cementos Progreso"), the only cement producer in Guatemala, filed a request for an anti?dumping investigation on 21 September 1995 and a supplementary request on 9 October 1995. On 11 January 1996, based on these requests, the Ministry published a notice of initiation of an anti-dumping investigation regarding allegedly dumped imports of grey portland cement from Cruz Azul of Mexico. The Ministry notified the Government of Mexico of the initiation of the investigation on 22 January 1996. The Ministry requested certain import data from Guatemala's Directorate-General of Customs by letter dated 23 January 1996. On 26 January 1996, the Ministry transmitted questionnaires to interested parties, including Cruz Azul and Cementos Progreso, with a response originally due on 11 March 1996. In answer to Cruz Azul's request, the Ministry extended the deadline for submission of the questionnaire responses until 17 May 1996. Cruz Azul filed a response on 13 May 1996. On 16 August 1996, Guatemala imposed a provisional anti-dumping duty of 38.72% on imports of type I (PM) grey portland cement from Cruz Azul of Mexico. The provisional duty was imposed on the basis of a preliminary affirmative determination of inter alia threat of injury. That provisional duty expired on 28 December 1996.

 2.2 The original investigation period set forth in the published notice of initiation ran from 1 June 1995 to 30 November 1995. On 4 October 1996, the Ministry extended the investigation period to include the period 1 December 1995 to 31 May 1996. On 14 October 1996, the Ministry issued supplemental questionnaires to Cruz Azul and Cementos Progreso, requesting, inter alia, that Cruz Azul provide cost data and provide data for the extended investigation period. 

2.3 A verification visit was scheduled to take place from 3 - 6 December 1996. This verification visit was cancelled by the Ministry shortly after it commenced on 3 December 1996. 2.4 On 17 January 1997, Guatemala imposed a definitive anti-dumping duty of 89.54% on imports of grey portland cement from Cruz Azul of Mexico. 

III. Findings and Recommendations Requested by the Parties

3.1 Mexico requests the Panel to make the following rulings, findings and recommendations: 

    (a) "reject all the preliminary objections raised by Guatemala";

    (b) "conclude that the measures adopted by Guatemala, in particular though not exclusively those relating to the initiation of the investigation, are inconsistent with the obligations of that Member country of the WTO under Article VI of GATT 1994 and, at least, Articles 2, 3, 4, 5, 6 and 7 and Annex I of the Anti-Dumping Agreement";

    (c) "also conclude that the measures adopted by Guatemala in contravention of its obligations under GATT 1994 and the Anti-Dumping Agreement nullify or impair Mexico's benefits within the meaning of Article XXIII of the GATT 1994"; and

    (d) "recommend to the Government of Guatemala that it revoke the anti-dumping duties imposed on Cruz Azul's exports of grey cement to that country and refund the corresponding anti-dumping duties".

3.2 Guatemala asks the Panel to make the following preliminary rulings:
    (a) "determine that the Panel does not have the authority to examine the final measure, as the final measure is outside the Panel's terms of reference:"

    (b) "determine that the final measure is not within the Panel's terms of reference, taking into account Mexico's recognition of this at the first substantive meeting with the Panel and in its second submission to the Panel" 1;

    (c) "reject Mexico's complaint because Mexico does not claim, much less provide evidence, that the provisional measure has had a "significant impact" in conformity with Article 17.4 and because such an impact cannot be demonstrated in this case";

    (d) "reject Mexico's complaint, because Mexico does not claim, much less provide evidence, that the provisional measure violates paragraph 1 of Article 7, as required by Article 17.4";

    (e) "alternatively, reject the claims made regarding the initiation of the investigation because Mexico failed to claim, much less provide evidence, that Guatemala had violated Article 1 or Article 7.1 by imposing an anti-dumping measure in an investigation that was not initiated properly";

    (f) "alternatively, reject all [Mexico's] claims regarding the `final stage of the investigation';

    (g) "alternatively, reject the seven individual claims made by Mexico ... [that] ... do not come within the Panel's terms of reference. Also to reject the two individual claims made by Mexico shown on page 32 of the English text of Guatemala's first written submission, which were not raised during the consultations"; and

    (h) alternatively, reject the new claims raised by Mexico during the Panel proceedings. 3.3 In the event the Panel does not reject Mexico's claims on the basis of Guatemala's preliminary objections, Guatemala requests the Panel to find that:

    (i) "Guatemala initiated the investigation in conformity with the ADP Agreement";

    (j) "without prejudice to the foregoing argument, that any alleged procedural errors committed at the time of initiating the investigation do not affect the provisional measure because (a) they do not nullify or impair Mexico's rights under the ADP Agreement; (b) Mexico gave cause for estoppel by failing to submit its arguments in the administrative file on the investigation at the proper time and in due form; and (c) they constituted a `harmless error'";

    (k) "Guatemala imposed the provisional measure in compliance with the ADP Agreement"; and

    (l) "Guatemala imposed the final measure in compliance with the ADP Agreement". 3.4 In the event the Panel finds that Guatemala acted in a manner inconsistent with the ADP Agreement, Guatemala requests that the Panel:

    (m) "recommend that Guatemala bring the allegedly incompatible measure into conformity with the ADP Agreement"; and

    (n) "not recommend or suggest any specific or retroactive remedy".

IV. Main Arguments of the Parties 4.1 Guatemala raises a number of preliminary objections to argue that the Panel has no jurisdiction to consider the present dispute. Guatemala submits that the initiation of the investigation, the provisional measure, the conduct of the final stage of the investigation, and the final measure fall outside the Panel's terms of reference. 

4.2 Mexico asserts that the dispute is properly before the Panel, and that the Panel has jurisdiction to consider all the claims identified in Mexico's request for the establishment of a panel. 

1. Whether the final measure is before the Panel 

4.3 Guatemala argues that the provisional measure adopted on 16 August 1996 is the only anti-dumping measure that was the subject of Mexico's request for consultations, dated 15 October 1996, and of its request for the establishment of a dispute settlement panel, dated 4 February 1997. Consequently, Guatemala contends that the Panel lacks a mandate or jurisdiction to consider the final anti-dumping measure adopted on 17 January 1997. By virtue of Article 17.4 of the ADP Agreement 2, only three types of measure may be the subject of recommendations by a panel, that is, a provisional measure imposed in accordance with Article 7, a price undertaking given under Article 8, or a final measure imposing an anti-dumping duty in accordance with Article 9. Anti-dumping investigations, or actions or decisions taken during the course of the investigation, do not constitute "measures" within the meaning of Article 19.1 of the DSU. According to Article 1 of the ADP Agreement, "[a]n anti-dumping measure shall be applied only ... pursuant to investigations". This shows that the "investigation" itself cannot be the "measure" in dispute. 

4.4 Guatemala submits that Article 6.2 of the DSU requires that the complainant should identify the "specific measures" at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly in its request for the establishment of a panel. In other words, the request should (a) identify the measures at issue; and (b) identify the claims relating to such measures. It does not suffice simply to identify the measures at issue or only identify the claims. Consequently, in order for a panel to have a mandate to examine claims relating to a provisional measure, a price undertaking or the final measure, the complainant must indicate in its request for the establishment of a panel whether the dispute hinges on a provisional measure or a price undertaking, or whether it relates to a final measure. When uniform terms of reference are used, the request for the establishment of a panel is the document which specifies the measure and the individual claims concerning the measure that come under a panel's terms of reference 3. According to Guatemala, only the specific measure and the individual claims concerning that measure, and which are duly identified in the request for the establishment of a panel, come within the jurisdiction of the Panel. 

4.5 Guatemala notes that, in its request for the establishment of a panel (WT/DS60/2), Mexico did not identify the final measure, nor present individual claims challenging the final measure, nor invoke Articles 1, 9 or 12.2.2 of the ADP Agreement, nor make claims regarding the imposition of the final measure by Guatemala. Thus, the Panel lacks jurisdiction to examine the final measure, because the final measure falls outside the Panel's terms of reference. The only measure covered by the Panel's terms of reference is the provisional anti-dumping measure in effect from 28 August 1996 to 28 December 1996. 

4.6 Guatemala recalls that in Brazil - Measures Affecting Desiccated Coconut 4 the WTO Appellate Body determined that "... the 'matter' referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference". 5 According to the text of Articles 4.4 and 6.2 of the DSU, the claims must refer to a particular "measure" that has allegedly been imposed in a manner inconsistent with any covered agreement. Unless the claims in the matter concern a "measure", the matter (and the individual claims) are irrelevant. According to Article 19.1 of the DSU, a panel may only make a recommendation to "bring the measure into conformity with" the Agreement. A panel is not authorized to make recommendations on a matter (nor on the individual claims therein) if it is not related to the "measure" mentioned in the panel's terms of reference. Furthermore, according to Article 17.6(ii) of the ADP Agreement, the Panel must state whether the "measure" adopted is in conformity with the Agreement.

4.7 Guatemala submits that, in an anti-dumping context, this interpretation is consistent with Articles 17.3 and 17.4 of the ADP Agreement. Appendix 2 of the DSU identifies Article 17.4 - but not Article 17.3 - as a special or additional rule for the settlement of disputes under the ADP Agreement. Article 4.4 of the DSU (applicable to consultations) must be interpreted consistently with Article 17.3 of the ADP Agreement. Article 4.4 of the DSU requires that a complaining Member identify the "measures at issue" in its request for consultations. The "matter" referred to in Article 17.3 must consist of the "claims" brought by the complainant challenging the anti-dumping measure identified in the request for consultations under Article 4.4 of the DSU. Therefore, if it is to be consistent with Article 4.4 of the DSU, the "matter" cannot include any claim that refers to a measure other than the "measures" identified in the request for consultations.

4.8 Guatemala notes that Article 17.4 imposes a special rule according to which, for the purpose of establishing the Panel's competence for the provisional measure in question, the complainant Member must prove that the provisional measure has a significant impact. The DSU, on the other hand, does not require proof of any trade effect as a condition for contesting a measure before a panel. According to Guatemala, other than the requirement to prove a trade effect in challenging a provisional anti-dumping measure, there is no other inconsistency between Article 17.4 of the ADP Agreement and Article 6.2 of the DSU. Article 17.4 of the ADP Agreement (which is a special or additional rule or procedure under the DSU) is to be read, as it can be, consistently with Article 6 of the DSU, to require that parties must refer matters to the Dispute Settlement Body (about which they have consulted) by "identify[ing] the specific measures at issue" (Article 6.2 of the DSU). Guatemala asserts that the interpretation must therefore be that the ADP Agreement and the DSU are consistent, with the exception of the "significant impact" requirement for disputes concerning provisional measures. In this light Guatemala provides an interpretation of the procedures for the settlement of anti-dumping disputes contained in Article 17 of the ADP Agreement and Articles 4 and 6 of the DSU: 

  • Informal consultations: Prior to the imposition of a provisional measure and at any other time, Members may hold informal consultations on any aspect of the anti-dumping procedures, including inter alia the initiation, gathering of evidence during the preliminary stage of the investigation, and procedural requirements

  • Formal consultations regarding the provisional measure: Once the provisional measure has been imposed, the complaining Member may request formal consultations under Article 17.3 of the ADP Agreement. According to Article 4.4 of the DSU, in its request for formal consultations the Member must identify the provisional measure as the "measure at issue". Consequently, the individual claims that constitute the "matter" that is the subject of consultations under Article 17.3 of the ADP Agreement must contest the provisional measure. A request for formal consultations gives third parties the opportunity of joining in the consultations held on the provisional measure, as required by Article 4.11 of the DSU;

  • Request for the establishment of a panel to examine the provisional measure: After expiry of the 60-day consultation period prescribed in Article 4.7 of the DSU, the complaining Member may request the establishment of a panel to examine "the matter" that was the subject of the consultations held under Article 17.3 of the ADP Agreement, provided the Member believes that it can prove to the panel that the provisional measure had a "significant impact", within the meaning of Article 17.4 of the ADP Agreement. According to Article 4.4 of the DSU, the "matter" must refer to the provisional measure. Guatemala states that pursuant to Article 6.2 of the DSU, in its request for the establishment of a panel the Member must identify the provisional measure as "the specific measure at issue". Consequently, the individual claims that constitute the "matter" - the subject of the request made under Article 17.4 - must contest the provisional measure;

  • Request for consultations on the final measure: If the complaining Member is unable to prove that the provisional measure had a significant impact, Guatemala submits that it must wait until the investigating authority has taken a final decision to impose definitive dumping duties or accepted a price undertaking. Once the final action has been taken, according to Article 17.3 of the ADP Agreement, the complaining Member may request formal consultations. In accordance with Article 4.4 of the DSU, in its request for formal consultations the Member must identify the final measure as the "measure at issue". Consequently, the individual claims that constitute the "matter" that is the subject of consultations must contest the final measure. Guatemala notes that a request for formal consultations gives third parties the opportunity of joining in the consultations held on the final measure as required by Article 4.11 of the DSU; and

  • Request for the establishment of a panel to examine the final measure: After expiry of the minimum 60-day consultation period prescribed in Article 4.7 of the DSU, the complaining Member may invoke Article 17.4 of the ADP Agreement and request the establishment of a panel to examine "the matter" that was the subject of the consultations held under Article 17.3 of the ADP Agreement. According to Article 6.2 of the DSU, in its request for the establishment of a panel, the Member must identify the final measure as the "specific measure at issue". Consequently, Guatemala asserts that the individual claims that constitute the "matter" - the subject of the request made under Article 17.4 of the ADP Agreement - must contest the final measure.
4.9 Mexico denies that the final measure is not within the Panel's terms of reference. Although Mexico acknowledges that the final determination was not included in its request for the establishment of a panel, it denies that the final measure was similarly excluded. 6 The final determination was not included in the request for the establishment of a panel since that determination had not yet been adopted when Mexico requested consultations with Guatemala under Article 17.3 of the ADP Agreement and Article 4 of the DSU. While it is true that Mexico did not challenge the final determination as such, this does not mean that the final measure, i.e. the definitive anti-dumping duties applied by Guatemala, is consistent with Guatemala's obligations under GATT 1994 and the ADP Agreement, or that those duties are not within the terms of reference of the Panel. According to Mexico, the fact that the final determination in itself is not challenged cannot and should not legitimize the violations committed in the earlier stages of the investigation. That would completely nullify the content and purpose of the second sentence of Article 17.4 of the ADP Agreement, contrary to the rules of interpretation of the Vienna Convention on the Law of Treaties ("Vienna Convention").

4.10 Mexico suggests that according to Guatemala's argument, even if the violations of the ADP Agreement were committed in the initiation of the investigation, the complainant would have to wait until the final anti-dumping duties were applied before requesting consultations with a view to establishing a panel. Otherwise, the final anti-dumping duties would remain outside the terms of reference of the panel. Alternatively, if the consultations were requested following the preliminary determination pursuant to Article 17.4 of the ADP Agreement, in the time it took to hold the consultations and establish a panel, the preliminary determination would have ceased to exist and would have been replaced by the final determination. Since, according to Guatemala, panels have no mandate to recommend specific or retroactive remedies, when the complainant finally managed to obtain a ruling that the investigation was invalid from the start and should not in fact have been initiated, that ruling would have no effect in practice since the anti-dumping duties that had been collected would wrongfully remain in the coffers of the importing country. That is to say that when the conclusions of a panel relating to a provisional measure were received, that measure would have become meaningless, because it would have been replaced by that time by a definitive measure which could not have been examined by the panel for the simple reason that it was adopted only after the panel had been established.

4.11 According to Mexico, this would create a strong incentive for WTO Members to ignore the disciplines of the ADP Agreement as regards the initiation of investigations. The worst that could result from initiating an investigation without complying with the relevant disciplines of the ADP Agreement would be to gain the time it takes to carry out the entire anti-dumping investigation from its initiation to the final determination, plus the time required to hold consultations on the final measure and, subsequently, to obtain a ruling from the panel and, where applicable, the Appellate Body. Mexico notes that, in addition to gaining that time, the violating Member would have obtained the duties collected as a result of violating its obligations under the ADP Agreement. It is clear from the actual wording of the second sentence of Article 17.4 that there is no need to wait until the importing Member has adopted a final measure. This is dealt with only in the first sentence. Mexico suggests that combining the first sentence with the second sentence distorts the paragraph as a whole and creates confusion. If the Members of the WTO had to wait until final measures were adopted before resorting to the DSB, the second sentence of Article 17.4 would simply not exist.

4.12 According to Mexico, its request for the establishment of a panel which forms part of the terms of reference of the Panel, shows that from the outset Mexico challenged: (a) the initiation, (b) the preliminary resolution, and (c) the final stage of the proceedings of the anti-dumping investigation in question. Thus, if it is to comply with its terms of reference, the Panel must rule on each one of these claims or, according to Article 7.2 of the DSU, it must address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute. Mexico submits that if the Panel were to find that the anti-dumping investigation in question was initiated and conducted in violation of the relevant provisions of the ADP Agreement, or simply that it was not initiated in conformity with the ADP Agreement, then it would have to conclude that the resulting anti-dumping duties were also inconsistent with Guatemala's obligations under the ADP Agreement. In other words, although Mexico may not have challenged the final determination as such, this does not mean that Mexico did not challenge the resulting anti-dumping duties. It did so as early as during its consultations with Guatemala by pointing out to Guatemala that the investigation should not have been initiated, and subsequently, by asking the Panel to cancel the investigation and order the refund of the corresponding anti-dumping duties.

4.13 Guatemala notes the fact that Mexico recognized in its second submission that the definitive measure was not included in the request for the establishment of a panel because "that measure had not yet been adopted when Mexico asked for consultations" 7, which means that in Mexico's view, it is indispensable that any measure to be examined should have been adopted before the request for consultations. Applying this same reasoning, for the Panel to examine Mexico's claims concerning the final stage, it is also indispensable that the events or actions in question should have taken place before the consultations were held. However, Guatemala notes that when Mexico requested formal consultations on 15 October 1996, various phases of the final stage of the investigation had not yet taken place, including the extension of the period of investigation, the use of non-governmental experts in the verification, the request for information on costs and sales during the verification, the submission of the technical accounting evidence, the information on facts essential to the investigation, the submission of confidential information and the non-establishment of deadlines for the submission of information. Applying Mexico's logic, these phases of the final stage of the investigation should also have been excluded from Mexico's request for the establishment of a panel. 

2. Whether the final stage of the investigation is before the Panel 

4.14 Guatemala claims that the Panel has no mandate to examine claims relating solely to the final stage of the investigation. Guatemala argues that, in order to be able to make claims concerning aspects of an investigation subsequent to the provisional measure, a complainant is obliged to challenge the final measure under which the anti-dumping duties were imposed. In its request for the establishment of a panel and in its first written submission, Mexico raises only the dispute regarding the provisional measure, not the final measure. Guatemala therefore claims that the Panel must disregard Mexico's claims concerning the final stage of the investigation, inasmuch as they are irrelevant to the Panel's task of reviewing the provisional measure. 

4.15 Furthermore, Guatemala asserts that the claims in question relate to a stage in the investigation process which (1) is completely different from the stage referred to in consultations, (2) had not even occurred when Mexico requested consultations, and (3) concern a measure which is totally different under the terms of the ADP Agreement. Guatemala notes that because Mexico did not put forward the whole range of claims relating to the final stage of the investigation until the last day of the consultations 8, Mexico deprived Guatemala of the right to hold consultations regarding those claims during the consultation period provided for in Article 4.5 of the DSU. Guatemala relies on United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, in which it alleges that the panel found that, in accordance with Article 15 of the special dispute settlement provisions of the Tokyo Round Anti-Dumping Code, "before a party to a dispute could request a panel concerning a matter, the parties to the dispute had to have been given an opportunity to reach a mutually satisfactory resolution of the matter. This condition would not be meaningful unless the matter had been raised in consultations and conciliation". 9 Guatemala argues that because Mexico waited until the last day of the consultations to raise the entire range of claims relating to the final stage of the investigation, it prevented the special provisions enacted for anti-dumping cases from fulfilling their function of giving the parties the opportunity to reach "a mutually satisfactory resolution" of the claims regarding the final stage as required by Article 17.3 of the ADP Agreement. For this reason, Guatemala asserts that the Panel must reject all of Mexico's claims relating to the final stage. 

4.16 Mexico states that Guatemala's argument that a complainant is obliged to challenge the final measure in order to raise claims against aspects of the investigation subsequent to the provisional measure is not supported by any provision of the ADP Agreement. Furthermore, Mexico notes that the entire range of claims relating to the final stage were dealt with in consultations. Moreover, Mexico contends that all such claims were included in the request for the establishment of a panel, and therefore form part of the Panel's terms of reference, consistent with the ADP Agreement and United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway. 10

4.17 Guatemala further argues that any claim in respect to the final stage is entirely irrelevant to the only "measure at issue" identified in the terms of reference of the Panel. Under Article 19.1 of the DSU, only measures may be brought into conformity, and consequently, even in the remote hypothesis that the Panel should conclude that there was, indeed, a violation in the final stage, the Panel could not issue any recommendation in respect of the final measure because the final measure is not within the terms of reference of this dispute. Thus, the Panel should reject Mexico's claims with respect to the final stage of the investigation. 

3. Whether the provisional measure is before the Panel 

4.18 Guatemala asserts that, according to Article 17.4 of the ADP Agreement, a Member may only refer a provisional measure to the DSB if that measure has a "significant impact". Guatemala notes that Article 17.4 provides that a Member may refer the matter that was the subject of consultations to the DSB for the establishment of a panel if such Member "considers" that consultations have failed and if final action has been taken. Article 17.4 also provides that the Member may refer a provisional measure to the DSB if such measure "has a significant impact" and the Member "considers" that the measure was taken contrary to paragraph 1 of Article 7. Because the drafters excluded the term "considers" from describing the prerequisite that the provisional measure have a significant impact, Guatemala argues that a complaining party must demonstrate such impact to the panel in its request for establishment of a panel or as a jurisdictional prerequisite in its first written submission. Guatemala states that Mexico neither contends nor demonstrates that the provisional measure actually had a "significant impact". 

Continue on to IV. Main Arguments of the Parties, Section 4.19


Notes:

1. As originally submitted, Mexico's second submission to the Panel stated that "the final measure was not included in the request for the establishment of a panel", and "the final measure in itself is not challenged". Mexico submitted a corrigendum to its second submission, correcting its argument to read "the final determination was not included in the request for the establishment of a panel", and "the final determination in itself is not challenged".

2. Article 17.4 provides that:

    "If the Member that requested consultations considers that the consultations pursuant to paragraph 3 have failed to achieve a mutually agreed solution, and if final action has been taken by the administering authorities of the importing Member to levy definitive anti-dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB"). When a provisional measure has a significant impact and the Member that requested consultations considers that the measure was taken contrary to the provisions of paragraph 1 of Article 7, that Member may also refer such matter to the DSB."

3. EC - Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil, ADP/137, paragraph 450, adopted on 30 October 1995; United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, ADP/87, paragraph 336, adopted on 27 April 1994; United States -Imposition of Countervailing Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, SCM/153, paragraph 208, adopted on 28 April 1994; EC - Anti-Dumping Duties on Audio Tapes in Cassettes Originating in Japan, ADP/136, paragraph 303, not adopted, dated 28 April 1995.

4. Report of the Appellate Body, Brazil-Measures Affecting Desiccated Coconut, DS22/AB/R, adopted 21 February 1997.

5. Ibid, page 22.

6. As originally submitted, Mexico's rebuttal stated that "the final measure was not included in the request for the establishment of a panel", and "the final measure in itself is not challenged". Mexico submitted a corrigendum to its rebuttal, correcting its argument to read "the final determination was not included in the request for the establishment of a panel", and "the final determination in itself is not challenged".

7. As originally submitted, Mexico's rebuttal stated that "the final measure was not included in the request for the establishment of a panel", and "the final measure in itself is not challenged". Mexico submitted a corrigendum to its rebuttal, correcting its argument to read "the final determination was not included in the request for the establishment of a panel", and "the final determination in itself is not challenged".

8. Guatemala asserts that the request for consultations submitted by Mexico on 15 October 1996 (WT/DS60/1) contains no claims relating to the "final stage" of the proceedings. However, on the last day of the consultations Mexico submitted a list of questions to Guatemala, which included various queries regarding the final stage of the investigation.

9. United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, ADP/87, paragraph 333, adopted on 27 April 1994.

10. Ibid.