4.130 Without prejudice to its argument that Article 3 does not apply to the initiation decision, Guatemala notes that, at the time of initiating the investigation, the Ministry had the following evidence and information concerning the factors listed in Article 3.7(i) (threat of injury) and relating to a significant rate of increase of dumped imports into Guatemala which indicated the likelihood of substantially increased importation. The Ministry knew that for approximately one century Cementos Progreso had supplied virtually 100% of the Guatemalan cement market and there had been scarcely any imports. Consequently, starting from a zero base, the imports from Cruz Azul demonstrated in the two import certificates attached to the application necessarily showed "a significant rate of increase", as provided in Article 3.7(i), both in absolute terms and in relation to apparent consumption and domestic production in Guatemala. The application contained evidence that the imports had started before the application was submitted and that at least two separate importers had started to sell Cruz Azul cement in Guatemala. The applicant's assertion of "massive imports" was considered to be plausible because: (1) two fully documented import shipments are indeed massive in relation to a zero base, taking into account the relatively small size of the Guatemalan market; (2) the sales of such imports were probably concentrated in a small area of Guatemala, close to the point of entry, and were likely to take up a large share of the market in that area, replacing sales by Cementos Progreso at a time when the firm was planning to modernize and expand its production capacity; (3) the margin of dumping was very large, the margin of price undercutting was substantial, Cruz Azul's export prices were lower than Cementos Progreso's production costs, and it could reasonably be assumed that the dumped imports from Cruz Azul were likely to increase substantially (relative to a zero starting-point). 

4.131 Guatemala argues that, at the time of initiating the investigation, the Ministry had the following evidence and information concerning the factors listed in Article 3.7(ii) and relating to excess capacity in Mexico which indicated the likelihood of substantially increased dumped exports to Guatemala, taking into account the doubtful availability of other export markets to absorb any additional exports. When the investigation was initiated, it was public knowledge that the Mexican economy was going through a severe recession, particularly in the construction sector. The "Tequila" effect and its impact on the construction sector was widely publicized throughout the world, not only in Guatemala. According to Guatemala therefore, it was public knowledge that, following the devaluation of the peso in December 1994, the Mexican economy was suffering from a serious depression, that a substantial part of the capacity of Mexican producers was not being utilized because of a fall in demand for their products in Mexico, and that Mexican producers were aggressively seeking export markets, including Guatemalan markets. In January 1996 in particular, several Guatemalan companies had already ceased operating because they were unable to compete with the increase in Mexican exports. The competition caused by Mexican exports was particularly severe in western Guatemala close to the border with Mexico. It was also public knowledge that the Mexican building industry, the source of cement demand, was particularly affected by Mexico's economic recession. It could therefore be reasonably assumed that the Mexican cement industry had substantial excess capacity available for export and that Cruz Azul had started to export to Guatemala in 1995 because of the recession in Mexico. This presumption was confirmed by the evidence submitted in the application that Cruz Azul imports started in June 1995 and were massive, in two shipments alone, in August 1995. The Ministry also knew that Cruz Azul's exports were entering Guatemala by land and not by sea. Because of the high cost of transporting grey portland cement by land and the location of Cruz Azul's production facilities in the south east part of Mexico, from a practical point of view, no export market other than Guatemala was available to absorb Cruz Azul's excess capacity. Moreover, the market in the United States was not available to absorb Cruz Azul's export capacity because the United States applied anti-dumping duties of over 60% on Cruz Azul's exports. To summarize, the only potential outlet for Cruz Azul's export capacity was Guatemala due to its proximity and because Guatemala's normal import tariff was only 1%. 

(c) Article 5.2 

(i) Dumping 

4.132 Mexico submits that Cementos Progreso's application did not contain sufficient evidence of dumping to meet the requirements of Article 5.2 of the ADP Agreement. Mexico contends that the only evidence of the normal value provided by the applicant was two alleged invoices, dated 25 and 26 August 1995, each for one sack of cement. The only evidence of the export price was photocopies of two import certificates for 7,035 and 4,221 sacks respectively, dated 14 and 15 August 1995. The claimant therefore did not supply evidence of the export price, the normal value or the evolution of imports as required by Article 5.2 of the ADP Agreement. Even though Article 5.2 does not provide for evidence concerning a minimum number of transactions to be contained in the application, the number must be sufficient to determine the existence of the unfair dumping practice. Moreover, Mexico argues that the documents relied on by the applicant did not adequately identify the product in question.

4.133 Guatemala notes that Article 5.2 of the ADP Agreement stipulates that an applicant may not simply assert that dumping and consequent injury has taken place. The application must also include relevant evidence in support of the assertion according to criteria set forth in that Article provided such evidence "is reasonably available to the applicant". Evidence is "relevant" and "sufficient" within the meaning of Article 5.3 if the investigating authorities find that the application contains information that is reasonably available to the applicant in respect of the types of information and evidence described in subparagaphs (i) to (iv) of Article 5.2. During the Uruguay Round, the Parties rejected proposals by Hong Kong and the Nordic countries for applications to include "information sufficient to permit the authorities concerned to establish a prima facie case of dumping, of injury and of causality . . .". ⁶² According to Hong Kong, the intention of the proposed text was: "To clarify the circumstances under which an anti-dumping investigation shall be initiated and to introduce a more definitive requirement of evidence sufficient to establish a prima facie case. That the investigating authorities have particular responsibility in the vetting of complaints is emphasized".  ⁶³

4.134 Guatemala states that, according to Article 5.2(i), the application must contain information reasonably available to the applicant on: (1) the identity of the applicant; (2) domestic production of the like product; and (3) the domestic industry on whose behalf the application is being made. The application of 21 September 1995 identified Cementos Progreso as the applicant. The supplementary application dated 9 October 1995 stated that Cementos Progreso accounted for 100% of cement production in Guatemala, that its production capacity was 1.6 million tonnes and that it utilized 100% of its capacity. Guatemala notes that in its third party submission, the United States asserted that the application met the requirements of Article 5.2(i), and Guatemala suggests that Mexico did not contest this position. 

4.135 Guatemala notes that, according to Article 5.2(ii), the application must contain information reasonably available to the applicant on: (1) a complete description of the allegedly dumped product; (2) the name of the country of origin or export in question; (3) the identity of each known exporter or foreign producer; and (4) a list of known persons importing the product in question. In its application of 21 September 1995, Cementos Progreso identified the product investigated as grey portland cement; it explained briefly how grey portland cement was manufactured; it identified Mexico as the country of export; it identified Cruz Azul as the producer and the exporter shipping allegedly dumped products; it also identified Distribuidora De L�on and Distribuidora Comercial Molina as the known importers of the product in question. Consequently, the application met the requirements of Article 5.2(ii). Guatemala suggests that Mexico did not contest this. 

4.136 Guatemala argues that, pursuant to Article 5.2(iii), the application must contain information reasonably available to the applicant on: (1) information on prices at which the product in question is sold when destined for consumption in the domestic market of the country or countries of origin or export; and (2) export prices. Cementos Progreso's application dated 21 September 1995 provided information and evidence regarding the prices at which Cruz Azul sold grey portland cement in Mexico and the prices at which it exported cement to Guatemala. In its supplementary application dated 9 October 1995, Cementos Progreso stated that in the month of August 1995 the price in Mexico was Q 27.62 per sack and the export price to Guatemala was Q 14.77 per sack. The dumping margin was therefore Q 11.23 per sack. Cementos Progreso provided documentary evidence of these prices in its application. Evidence of the price in Mexico was substantiated by two invoices showing the prices for two separate sales in Tapachula, Mexico, in August 1995. One invoice was from Cruz Azul dated 26 August 1995, and the other dated 25 August 1995 identified the make of cement as Cruz Azul. The price for the first invoice was Mex. pes. 28; for the second it was Mex. pes. 27. The information on prices for both sales was thus consistent. The Cruz Azul invoice identified the product as grey cement. The other invoice identified it as Cruz Azul cement. Evidence of the export price was substantiated by two export sales by Cruz Azul to two different importers in Tec�n Um�n, Guatemala, in August 1995. The applicant provided import certificates, invoices and bills of lading for both sales. The product was described variously in the documentation as grey cement, grey portland cement, or Type II grey portland cement with pozzolana. This indicated that according to trade practice the words "grey cement" properly identify the product in dispute. Guatemala asserts that if the two invoices used to determine normal value had concerned a special type of cement, not generic grey portland cement, it is clear that they would have stated this. The Ministry examined the information and the evidence provided in the application concerning the prices in Mexico and the export prices and, on the basis of all the information and evidence, determined that all the documents referred to grey portland cement. Furthermore, the documentary evidence provided pursuant to Article 5.2(iii) was relevant because it showed the price of Cruz Azul cement in Mexico and its export price to Guatemala for the same month and the same places - Tapachula, Mexico, and Tec�n Um�n, Guatemala - which are not very far apart (45 kilometres). The application thus included relevant information and evidence on prices in Mexico and export prices. Guatemala considers it significant that Mexico recognizes that Article 5.2 does not require that the evidence of dumping submitted in the application should cover a minimum number of transactions in either Mexico or Guatemala. Nor does it require that the applicant should supply information on any adjustments to the gross price as stipulated in Article 2.4 of the ADP Agreement. This is logical, in that the type of information referred to in Article 2.4 is the exclusive property of the exporting company and is not available except through questionnaires issued once the investigation has been initiated. Thus, Article 5.2(iii) grants the investigating authority the discretion to decide what, with respect to the exporter's price data, is reasonably available to the domestic producer. 

4.137 In response to a question from the Panel, Guatemala stated that the Ministry had asked Cementos Progreso for more information than that provided in the applications. For that reason, although the application was received on 21 September 1995, for four months the Ministry refrained from initiating the investigation, in a genuine effort to obtain more information from Cementos Progreso. However, on more than one occasion Cementos Progreso said that there was simply no way of obtaining further information and that the information supplied was the only information reasonably available. Ultimately, the Ministry accepted this argument for two reasons. First, it was not reasonable to expect a Guatemalan firm to have access to more information on a competitor's prices in Mexico. Second, because the decision to initiate the investigation was still pending at the time, Cementos Progreso was the party with the greatest interest in providing additional information. It is therefore logical to suppose that Cementos Progreso was perfectly willing to provide additional information on Cruz Azul prices in Mexico and in Guatemala, to the extent that such information was available. In addition, the Ministry did not consider that it was appropriate - and still less required under the ADP Agreement - for the Ministry to conduct an investigation to determine whether Cementos Progreso actually did or did not have access to further information. Lastly, even if it had been possible to receive more information, the Ministry considered that the information contained in the application and the supplementary application fulfilled the minimum requirements of Article 5. 

4.138 Mexico asserted that if the Ministry considered that the information supplied by Cementos Progreso did not suffice to initiate the investigation and Cementos Progreso did not supply any further information, the Ministry must surely have continued to consider that the information did not suffice to initiate the investigation. Nor was it easy to understand why the Ministry waited until after the initiation of the investigation to request information from the Directorate-General of Customs instead of doing so during the four months during which Guatemala claimed to have been waiting for Cementos Progreso to obtain further information. In the meantime, Cementos Progreso could also have requested a study such as the one conducted by Arthur D. Little after the initiation of the investigation. Mexico further noted that Guatemala's suggestion that Mexico had accepted certain arguments by the United States or by Guatemala because it did not refute them was unacceptable. For such a claim to be valid, Mexico would have to have explicitly accepted or agreed with the said arguments. 

(ii) Threat of injury 

4.139 Mexico submits that Cementos Progreso's application did not contain sufficient, relevant evidence of threat of injury to meet the requirements of Article 5.2 of the ADP Agreement. Mexico argues that, for the Ministry to accept an application for the initiation of an investigation referring to a threat of injury, Cementos Progreso had at least to provide evidence of a significant rate of increase of imports, of sufficient freely disposable, or an imminent substantial increase in, capacity of the exporter, of the fact that the expected increase in exports from the exporting firm to the Guatemalan market would be due to that freely disposable capacity, or of the effect that the exports and inventories of the product under investigation could have on their prices, as set forth in Article 3.7 of the ADP Agreement. 

4.140 Mexico notes that on 9 October 1995 the claimant presented a supplementary application in which it argued that it was threatened by massive imports of cement from Mexico, a claim which it tried to substantiate with photocopies of the two import certificates submitted with the application, and also claiming that the threat of injury was due to the fact that the cement entering by land at prices lower than its normal value directly affected the firm's investments, essentially with respect to planned improvements and expansion of facilities. However, further on the claimant stated that it was claiming threat of injury on the grounds that it was impossible to provide evidence of the enormous volume of actual imports entering Guatemala every day, and requested the investigating authority to ask the Directorate of Customs to provide the import certificates for the last year in order to determine the volume of imports of the product under investigation. Mexico points out that the Ministry asked the Directorate of Customs for the above information only on 20 February 1996, i.e. 39 days after it had initiated the investigation, which proves that it did not possess the information before initiating the investigation as stipulated in Article 5.2, paragraph (iv) of the ADP Agreement. Mexico also notes that the applicant stated it had an installed capacity of 1.6 million metric tonnes and was using 100% of that capacity, which is inconsistent with the argument of injury or threat of injury. 

4.141 Mexico considers that, since the only evidence to accompany the application was two invoices (for one sack of cement each) and two import certificates, the rest of the application consists of simple assertions unsubstantiated by the "relevant evidence" required by Article 5.2. 

4.142 Guatemala notes that Article 5.2(iv) of the ADP Agreement provides that an application must contain information reasonably available to the applicant on: (1) the evolution of the volume of the allegedly dumped imports; (2) the effect of these imports on prices of the like product in the domestic market; and (3) the consequent impact of the imports on the domestic industry, as demonstrated by relevant factors and indices having a bearing on the state of the domestic industry, such as those listed in paragraphs 2 and 4 of Article 3. According to Guatemala, the application clearly met the requirements of Article 5.2(iv). Firstly, with respect to the evolution of imports, Cementos Progreso stated that for more than three months at least, Cruz Azul had been selling cement in Guatemala. Cementos Progreso provided import certificates to support its claim of massive imports. The documentary evidence showed that on 14 August 1995, Guatemala received substantial imports of Mexican cement from Cruz Azul through the customs post at Tec�n Um�n, Guatemala. One of the shipments was for 7,035 sacks of grey portland cement for an amount of US$18,112.54, and the other was for 4,221 sacks of grey portland cement for a value of US$10,941.25. These shipments were substantial given that the Guatemalan market is relatively small, and they represented a significant share of domestic consumption and a very large share of consumption in western Guatemala. The imports were massive in comparison with previous levels of imports from Cruz Azul, because there had been no such imports. According to the bills of lading, the product entered through Tec�n Um�n and was delivered to two consignees on 14 August 1995. The two shipments amounted to a total of 480 tonnes. In 1995, average daily consumption in Guatemala as a whole was 3,836 tonnes, so the cement imported on 14 August 1995, through a single point of entry, represented 13% of average daily consumption in Guatemala as a whole. The two shipments also represented 15% of average daily shipments by Cementos Progreso to Guatemala as a whole in 1995. 

4.143 Guatemala submits that Cruz Azul's imports represented 11% of Cementos Progreso's daily production capacity. With an annual capacity of 1,600,000 tonnes specified in the application, Cementos Progreso's daily capacity was 4,383.6 tonnes, assuming the plant was never halted for maintenance. Accordingly, the volume of imports on 14 August 1995, 480 tonnes, represented 11% of Cementos Progreso's daily capacity. Bearing in mind the Ministry's knowledge that no imports had been made in the past, such a high volume of imports on 14 August 1995 was evidence of massive imports. Guatemala does not consider that any volume of imports is necessarily "massive" simply because the previous level was zero. However, if the proportion of daily production capacity represented by imports is 11% compared with a previous proportion that was zero, that does constitute a massive volume of imports, especially in view of the fact that the imports started only three months before 14 August 1995. 

4.144 Mexico submits that it is impossible to draw these conclusions from the data contained in the application and supplementary application. Cementos Progreso did not provide any information concerning either annual cement consumption or the volume of shipments to Guatemala. Thus, at the time of initiation, the Ministry did not have the information relied on by Guatemala before the Panel. 

4.145 Guatemala notes that, because of the low value-to-weight ratio and the high cost of land transport, the two shipments reported by the applicant went to a very small area in Guatemala. During the investigation, the Ministry established that Cruz Azul had concentrated its marketing efforts on the west of Guatemala, close to the border between Mexico and Guatemala, no doubt to minimize transport costs. Consequently, the two shipments must be evaluated in comparison with consumption in the areas where they were sold and not in comparison with consumption in Guatemala as a whole. At that time, Cruz Azul's penetration of the Guatemalan market with dumped exports was incipient. Cruz Azul's sales in that period were concentrated on the border areas, owing to high transport costs. If the sales were concentrated in those areas, when it came to examine the information contained in Cementos Progreso's application, which related to a threat of injury, the Ministry had no alternative but to assess the potential impact of shipments in the areas close to the border. As confirmed in the preliminary determination, Cruz Azul's exports to Guatemala held 23% of the domestic market. 

4.146 According to Guatemala, the applicant suspected that other imports had entered through the customs posts of El Carmen and La Mesilla. The applicant requested the investigating authority to obtain import certificates for the past year in order to determine the real volume of imports of cement from Mexico that had caused injury to the domestic industry. In Guatemala, it is very difficult for a private company to obtain information on imports of a particular product. A private company needing such information would have to request that it be obtained as part of an official government investigation. Thus, when Cementos Progreso submitted its application, it did not have information relating to the total volume of imports of cement from Mexico. Guatemala accepted Cementos Progreso's claim that it had not been able to prove the huge volume of cement entering the country daily at discriminatory prices, because at that time the Ministry itself did not have access to any specific information on the evolution of the volume of imports of grey portland cement or any other product. For this reason the Ministry accepted that Cementos Progreso did not have additional information on the evolution of the volume of imports reasonably available to it. Two asesores orally requested Cementos Progreso to provide further evidence of the evolution of imports. Cementos Progreso replied that it was not possible to obtain further copies of import certificates for cement entering Guatemala, but that perhaps the asesores could obtain further information from the customs officials at the border posts. The asesores consulted the customs authorities at the border post of Tec�n Um�n, who confirmed that indeed, Cruz Azul imports were increasing, but that they still did not have any written reports confirming the volume of imports. The asesores then asked the Director-General of Customs if he had any written reports and were told that his department did not have any reports, that it would first be necessary to collect the import certificates from the customs authorities at Tec�n Um�n, La Mesilla and El Carmen, and that the data concerning imports of grey portland cement would have to be compiled manually from the relevant individual import certificates. The Director-General said that this task would take several months. Thus, the asesores concluded that there was no further information reasonably available to the applicant. 

4.147 In reply to a question from the Panel as to whether a mere suspicion that imports had also entered through the customs posts of El Carmen and La Mesilla constituted evidence for the purpose of applying Articles 3 and 5 of the ADP Agreement, Guatemala stated that the application contained evidence that the domestic producer, Cementos Progreso, had good reason to suspect that cement from Mexico was being imported through the frontier posts at El Carmen and La Mesilla. The Ministry examined the accuracy and adequacy of all the evidence submitted in the application; a presumption or inference based on circumstantial evidence is a legitimate form of proof, as is the case with the information from Cementos P rogreso that cement was coming in through other customs posts. After examining all of the information and evidence supplied, the Ministry concluded that there was sufficient evidence to initiate. In any event, Guatemala states that the Ministry did not base its decision to initiate solely on the information about imports at other customs posts, because the other evidence in the application was sufficient for initiation. 

4.148 Guatemala notes that, as regards the effect of the imports on prices of the like product in the domestic market, Cementos Progreso based its information on a list containing the prices of cement in Guatemala and two import certificates to demonstrate that the prices of the dumped imports were much lower than the prices of Cementos Progreso in Guatemala. The prices of the dumped imports averaged only Q13.96 per sack, 50% lower than the average price of Q26.00 at which Cementos Progreso sells its cement in Guatemala. Thus, the application contained irrefutable evidence of "significant price undercutting" within the meaning of Article 3.2 of the ADP Agreement, proving that there was an adverse effect on the price. 

4.149 Concerning Mexico's argument that the Ministry should have obtained information on imports from the Directorate?General of Customs before initiating the investigation, Guatemala asserts that Article 5 of the ADP Agreement does not require the investigating authority to obtain information before beginning the investigation. If the information obtained from the Directorate of Customs after the initiation of the investigation had demonstrated that imports had not increased or that import prices were higher than Cruz Azul's domestic market prices, then the Ministry would have terminated the investigation in conformity with Article 5.8. However, the information from the Directorate of Customs confirmed and strengthened the evidence of dumping and the threat of injury claimed by the applicant. 

(iii) Causal link 

4.151 According to Mexico, the absence of evidence on causal link is clearly demonstrated by the application and by the initiation of the investigation. An examination of the application and the supplementary application, submitted by the claimant on 21 September and 9 October 1995 respectively, does not reveal the slightest trace of adequate evidence on causal link, as required by Article 5.2 of the ADP Agreement. The text of the resolution for the initiation of the investigation confirms this, in that the Ministry did not include any explicit reference to causal link. 

4.152 Guatemala notes that, by virtue of Article 5.2 of the ADP Agreement, an application must contain evidence of a causal link between dumped imports and alleged injury. The second sentence states that assertions of dumping, injury and a causal link must be substantiated by "relevant evidence" that is "sufficient" to meet the requirements of Article 5.2. The concept of "relevant" evidence sufficient to meet the requirements of Article 5.2 is defined in the third sentence as "such information as is reasonably available to the applicant" with regard to the factors listed in subparagraphs (i) to (iv). Contrary to what Mexico has argued, Article 5.2 does not require that the evidence substantiating an assertion must necessarily be documentary evidence. Documentary evidence can consist of factual declarations contained in the application itself. ⁶⁴ Article 5.2 does not, however, specify any evidence of causal link other than the factors listed in subparagraphs (iii) and (iv). It makes no reference to Article 3.5, which concerns the evidence of causal link required for a preliminary or definitive determination of injury. Article 5.2 clearly indicates that there is sufficient evidence of a causal link if the application provides evidence of dumping in accordance with Article 5.2(iii) and evidence of consequent injury or threat of injury in accordance with Article 5.2(iv). Article 5.2(iv) only contains a cross-reference to paragraphs 2 and 4 of Article 3 and not to the other paragraphs of Article 3. Consequently, Article 5.2 clearly establishes that no paragraph in Article 2 and only two of the eight paragraphs in Article 3 apply to the decision to initiate an investigation. Article 5.2(iv) does not require that the application should provide information on the four factors listed in Article 3.7 relating to threat of injury . Those drafting Article 5.2(iv) only included a cross-reference to paragraphs 2 and 4 of Article 3. 

4.153 Guatemala submits that Cementos Progreso's application did contain evidence and information of the type described in paragraphs 2 and 4 of Article 3. In particular, it contained evidence of "a significant increase in dumped imports" and of "significant price undercutting" as referred to in Article 3.2. It also contained evidence of a "potential decline" in "return on investments"; "factors affecting domestic prices; the magnitude of the margin of dumping; ... potential negative effects on ... employment ... growth ... or investments", within the meaning of Article 3.4. The application contained information and evidence to the effect that massive imports at prices substantially lower than those in Mexico, substantially lower than prices in Guatemala, and substantially lower than Cementos Progreso's production costs threatened Cementos Progreso with imminent material injury, in particular by (1) having a negative effect on its market share; (2) having a negative effect on its plans for investment to allow it to modernize and improve its production facilities by expanding the raw material grinding facilities, building a third kiln at the San Miguel plant and converting the kilns to use a different fuel; (3) having a negative effect on its capacity to recruit 400 new employees, who would no longer be needed if the expansion plans were cancelled; (4) obliging it to cease production and become an importer instead of investing in additional capacity because doing so would only mean selling cement at prices below production costs; (5) obliging Cementos Progreso, if it became an importer, to dismiss 1,052 employees; and (6) causing Guatemala to lose its cement technology. The information and evidence on the significant threat to Cementos Progreso's labour force was extremely important for the Ministry because of Guatemala's high unemployment rate (42%) and the fact that these were relatively highly paid posts for skilled and semi-skilled workers. Thus, Cementos Progreso submitted evidence and information that it was planning to modernize and expand its production capacity, but that the onset of dumped imports from Cruz Azul seriously jeopardized its investment plans. Cementos Progreso described the projects to modernize and expand production capacity in its application. They included: increased grinding capacity at the same plant, optimization of the plant, construction of a third kiln at the San Miguel Sanarate plant and reconversion of the electricity system by transforming the plant that used bunker fuel. Cementos Progreso also provided information that such expansion would require at least 400 people more, who could no longer be used when the work stopped. Cement production requires a large amount of capital and fixed costs are high in comparison with variable costs. Therefore, in order to be profitable a plant must use a large part of its capacity. One essential prerequisite for Cementos Progreso's plan to expand its capacity was that it should continue to have a large share of the Guatemalan market and be able to use its additional capacity. As reflected in the application, Cementos Progreso had no economic reason to make the planned investment if Cruz Azul was allowed to sell cement in Guatemala at prices substantially lower than the normal value, substantially lower than Cementos Progreso's prices in Guatemala, and substantially lower than Cementos Progreso's production costs. The fact that Cementos Progreso was operating at full capacity in October 1995 does not contradict this statement, nor does it contradict the evidence substantiating its claim that it was facing a threat of material injury. 

Continue on to IV. Main Arguments of the Parties, Section 4.154

Notes:

62. Document MTN.GNG/NG8/W/83/Add.5 (23 July 1990). According to Guatemala sufficient evidence to establish a "prima facie case" essentially means evidence that would support a finding if proof of the contrary were not considered. However, Guatemala suggests that the standard of "sufficient evidence" establishes a much less rigid framework.

63. English version of document MTN.GNG/NG8/W/51,4 (12 September 1989)]. Guatemala notes that this "more definitive requirement" was rejected during the negotiation, and the Tokyo Round standard was maintained.

64. In response to a Panel question, Guatemala argued that this statement was intended to make it clear that the evidence substantiating mere assertions of dumping, threat of injury and causal link contained in the application can consist of factual declarations included in the application itself. For example, Cementos Progreso's assertion that it was facing a threat of material injury was substantiated by the factual declaration that, if the dumped imports continued to be sold at those prices, Cementos Progreso would have to cancel plans to expand and modernize its production plant, which were detailed in Section VI of the supplementary application, and close down its present production plant, with a consequent loss of jobs. The ADP Agreement does not require the application to include documentary evidence of the threat of injury.