4.392 Guatemala notes Mexico's claim that Cruz Azul has been denied access to the file up to May 1997. During the investigation, the Ministry provided the interested parties with individual copies of documents included in the file, and prior to the date on which the parties were to present their final arguments it reminded them that they were entitled to request copies of any other document in the administrative file. Guatemala recalls that Cruz Azul requested no copies of any document until 19 December 1996. Cruz Azul's request of 17 January 1997 for a certified copy of the entire file was not denied. The only reason why such a copy has not been supplied to Cruz Azul is because it has not paid the fee required for its dispatch in accordance with Guatemalan legislation. 

4.393 Guatemala states that the file was given page numbering (foliated), and that the Ministry did not tamper with the contents thereof. 

4.394 Mexico insists that in various stages of the proceeding pages of the file were not properly numbered. This is evidenced by certain copies of information in the file obtained by Cruz Azul, including copies of Cementos Progreso's application and the decisions of the Ministry. 

2. Confidential information 

4.395 Mexico submits that the Ministry violated Articles 6.5.1 and 6.5.2. of the ADP Agreement by accepting confidential information from Cementos Progreso without the latter providing an accompanying non-confidential summary or a justification of confidentiality, contrary to the Ministry's instructions. According to Mexico, the fact that the Ministry requested Cementos Progreso to comply with these obligations may be seen from the communication of 14 October 1996. In view of this non-compliance, Mexico suggests that the Ministry should have disregarded the information submitted by Cementos Progreso, bearing in mind that the aforementioned communication itself states that this would be the consequence of non-compliance. Cruz Azul itself informed the Ministry of this situation in its letter of 27 December 1996. Mexico notes that the Ministry nevertheless failed to renew its request to Cementos Progreso to comply with this obligation. 

4.396 Mexico asserts that the lack of access to the confidential information in issue not only seriously impaired Cruz Azul's defence of its interests, but also invalidated the procedure because, in accordance with Guatemala's obligations under the ADP Agreement, this information should have been rejected by the Ministry. Mexico suggests that it is paradoxical that the information submitted by Cruz Azul (i.e. the technical accounting evidence) was rejected, while that submitted by Cementos Progreso was admitted, despite warnings by the Ministry as to the consequences of non-compliance with the aforementioned confidentiality requirements. 

4.397 Guatemala considers that Mexico's claims regarding confidential treatment are directed at Cementos Progreso's reply to the supplementary questionnaire of 30 October 1996. Guatemala argues that the Ministry carefully specified its requirements with regard to confidential information in the supplementary questionnaire, in accordance with Articles 6.5.1 and 6.5.2 of the ADP Agreement. Paragraph 7 of the supplementary questionnaire, which was applicable to the information supplied by all interested parties, provided that: 

"If confidential data are supplied with the information, a public version of such information should be included. Otherwise, the information in question will not be taken into consideration for the issuance of the final determination and this Directorate will reach a decision based on the best information available." 

4.399 Mexico alleges that Guatemala violated Articles 6.1 and 6.2 of the ADP Agreement by failing to set a specific time-frame for the submission of information, arguments and evidence by Cruz Azul. This omission created uncertainty for Cruz Azul's defence of its interests, as the Ministry gave no assurance that information and evidence submitted subsequent to the preliminary determination would be considered. 

4.400 Guatemala denies that Articles 6.1 and 6.2 of the ADP Agreement require the investigating authority to set a specific time-frame for the exporting firm to submit relevant information and evidence. Article 5.10 of the ADP Agreement itself establishes the time-frame for the provision of information by requiring that the authorities should normally conclude anti-dumping investigations within one year after their initiation. The Ministry complied with Article 5.10 inasmuch as it initiated the investigation on 23 January 1996 and issued the final determination on 17 January 1997. 

4.401 Guatemala suggests that, without prejudice to the foregoing argument, in the course of the investigation the Ministry established specific time-limits for the presentation of information in order to ensure that it would receive information from all interested parties in sufficient time for it to be taken into consideration. For example, the Ministry set 17 May 1996 as the deadline for the reply to the original questionnaire, 30 October 1996 for the reply to the supplementary questionnaire, and 19 December 1996 for the presentation of final pleadings. Guatemala notes that in some cases, the time-limits were extended in order to give the parties additional time to prepare their replies and defend their interests. ¹¹⁶ Consequently, and in accordance with the provisions of Articles 6.1 and 6.2 of the ADP Agreement, Cruz Azul was given notice of the information required, and was afforded ample opportunity to present relevant evidence in writing for the defence of its interests at each of the critical stages of the investigation.  

G. Revocation of Anti-Dumping Duties 

4.402 Mexico requests the Panel to recommend that Guatemala revoke the anti-dumping measure imposed on imports of grey portland cement from Cruz Azul, and refund those anti-dumping duties already collected. Mexico suggests that the Panel should do so because the failure to fulfil the requirements of the ADP Agreement concerning initiation cannot be remedied by measures taken after the start of the investigation in dispute. According to Mexico, the very purpose of the submission of adequate evidence in the application, and its examination by the investigating authority, is to ensure compliance with certain minimum conditions before deciding to initiate an investigation. 

4.403 Mexico states that in accordance with Article 19.1 of the DSU, where a panel concludes that a measure is inconsistent with a covered agreement, the panel "shall recommend that the Member concerned bring the measure into conformity with that agreement". Moreover, the panel "may suggest ways in which the Member concerned could implement the recommendations". Article 19.1 of the DSU applies to the present dispute since there is nothing in Appendix 2 to the DSU to the contrary. Assuming that the Panel concludes that Guatemala did not comply with the provisions of the ADP Agreement as regards the initiation of the investigation, Mexico suggests that the only way of bringing the measure into conformity with the ADP Agreement would be to recommend the annulment of the investigation and the refunding of the corresponding anti-dumping duties. Otherwise, according to Mexico, it would mean failing to recommend that the measure (i.e. the initiation of the investigation) be brought into conformity with the provisions of the ADP Agreement. According to Mexico, any other kind of recommendation would necessarily relate to aspects of the investigation other than initiation. Mexico suggests that an inconsistency concerning the initiation of an investigation can only be resolved at source, i.e. at the initiation itself. This is because the initiation of an investigation, unlike other provisions of the ADP Agreement, is the very foundation for the remainder of the investigation. When that foundation is vitiated from the outset, the rest of the investigation is also vitiated. It is an investigation that should never have been initiated. Mexico submits that an investigation which has been initiated without fulfilling the relevant provisions of the ADP Agreement is like a building without a ground floor to stand on. 

4.404 Mexico considers that it is not possible to consider that an investigation which has been initiated without fulfilling the initiation requirements of the ADP Agreement can be remedied or corrected at subsequent stages of the procedure. This might be feasible with regard to other elements of the ADP Agreement , but not as far as initiation is concerned. Pursuing the image of a building, Mexico suggests that mistakes made on the first floor can be avoided on the second, but a first floor without a ground floor or a ground floor built only after the first floor has been completed is inconceivable. Mexico submits that a panel ruling that corrects violations concerning initiation through recommending remedial action in respect of the latter stages of the investigation would, ipso facto, render the provisions governing initiation completely inoperative, since they would no longer have any meaning. All WTO Members could initiate investigations without complying with the appropriate disciplines, in the knowledge that they can be "remedied" ex post facto. Moreover, since there would be no criteria to determine when such an ex post facto remedy could or could not be carried out, such a ruling would be generally inapplicable and, hence, inconsistent with Articles 5 and 4 of the ADP Agreement. In this connection, Mexico notes Article 19.2 of the DSU whereby, in its "findings and recommendations, the panel ... cannot add to or diminish the rights and obligations provided in the covered agreements". 

4.405 According to Mexico, the revocation and refunding of the anti-dumping duties would also be consistent with Article 1 of the ADP Agreement and Article 3.7 of the DSU. Mexico notes that Article 1 of the ADP Agreement provides that: "an anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement." Mexico asserts that the fact that it has not invoked Article 1 of the ADP Agreement directly, but rather Article 5, which refers specifically to "initiation and subsequent investigation", does not mean that Article 1 is not applicable or that Mexico loses its rights under Article 1 with respect to the initiation of the investigation. In order to invoke Article 1 of the ADP Agreement, Mexico submits that it would have had to wait until the publication of the final determination, which is illogical and would render the second sentence of Article 17.4 of the ADP Agreement ineffective. Mexico recalls that in accordance with Article 3.7 of the DSU: "the first objective of the dispute settlement mechanism is usually to secure the withdrawal of the measures concerned if these are found to be inconsistent with the provisions of any of the covered agreements". Mexico asserts that the only way to secure withdrawal of the offending measure in the present case is to annul the investigation as a whole. 

4.406 Guatemala notes that Article 19.1 of the DSU stipulates that the proper role of a panel established to settle a dispute in the WTO is to recommend that the Member concerned bring the measure into conformity with its obligations under the covered agreement. The recommendation of the panel is not the "solution" to the dispute mentioned in Articles 3.5 and 3.7 of the DSU: the solution can only be reached by the Members. Article 3.5 merely offers general guidelines according to which a solution eventually reached between the parties must be compatible with the covered agreements and must not nullify or impair the benefits accruing to any WTO Member, not just the parties to a particular dispute, or impede the attainment of any objective of those agreements. Mexico does not explain how it would be contrary to that principle for the Panel not to recommend a specific or retroactive remedy.  

4.407 Mexico submits that there is no provision in the ADP Agreement that prevents anti-dumping duties being refunded. On the contrary, refunding anti-dumping duties is consistent with and provided for in the ADP Agreement. Refunding anti-dumping duties is a logical outcome of annulling the investigation. Since anti-dumping duties may only be imposed on the basis of an investigation, if the investigation is annulled, so are the duties. Mexico argues that it is inconceivable that the duties should remain when the investigation has ceased to exist. Articles 7 1 and Article 1 of the ADP Agreement confirm this by stating that: "[p]rovisional measures may be applied only if ... an investigation has been initiated in accordance with ..." (Article 7.1) and "[a]n anti-dumping measure shall be applied only ... pursuant to investigations" in conformity with the Agreement (Article 1). Mexico submits, therefore, that anti-dumping duties cannot be applied without an anti-dumping investigation to warrant them. 

4.408 Mexico notes that refunding anti-dumping duties is not a new concept, alien to the ADP Agreement. Refunding anti-dumping duties is not only consistent with provisions of the ADP Agreement but, in particular circumstances, it is obligatory. Article 9, for example, provides for "refund ... of any duty paid in excess of the margin of dumping". In keeping with the logic of Article 9, it may be affirmed that annulment of an investigation means that there is no actual dumping margin and, consequently, all the anti-dumping duties are necessarily in excess of the actual dumping margin. Mexico suggests that the same is true of Article 10 of the ADP Agreement, which states, for instance, that "[i]f the definitive duty is lower than the provisional duty paid ... the difference shall be reimbursed", and that "[w]here a final determination is negative, any cash ... shall be refunded ... in an expeditious manner". Hence, Mexico asserts that the appropriate course in the present case is to refund all of the anti-dumping duties levied by Guatemala. 

4.409 Mexico suggests that the annulment of an investigation without the refund of duties collected would create a major incentive for WTO Members to try and prolong anti-dumping investigations - and their defence before a panel and then the Appellate Body - to the utmost because, in addition to improperly continuing to protect their domestic industry, they would also obtain income, sometimes amounting to several million dollars, every day that anti-dumping duties remain in force. 

4.410 According to Mexico, both the annulment of investigations and a corresponding refund of anti-dumping or countervailing duties have been recommended in both adopted and unadopted panel reports. Furthermore, Mexico states that there is no case in which a panel has ruled against the refund of duties. Panel reports in support of Mexico's position include New Zealand - Import of Electrical Transformers from Finland ¹¹⁷ ; Canada - Imposition of Countervailing Duties on Imports of Manufacturing Beef from the EEC ¹¹⁸ ; United States - Measures Affecting Imports of Softwood Lumber from Canada ¹¹⁹ ;United States - Anti-Dumping Duties on Grey Portland Cement and Clinker from Mexico ¹²⁰ ; and United States - Anti-Dumping Duties on Imports of Stainless Steel Plate from Sweden ¹²¹. 

4.411 Guatemala submits that if the Panel determines that a particular aspect of the investigation in the present case is inconsistent with the ADP Agreement, it may only recommend that Guatemala bring the provisional measure into conformity with the ADP Agreement. Although the Panel may suggest the way in which Guatemala should implement its recommendations, Guatemala ultimately has the sovereign right to implement the recommendation in accordance with its domestic laws. In particular, Guatemala submits that the Panel should not recommend the retroactive annulment of the provisional measure in this case. 

4.412 Guatemala notes that Mexico has requested the Panel to recommend that Guatemala revoke the anti-dumping duties imposed on imports of grey portland cement from Cruz Azul and refund any anti-dumping duties levied. Guatemala suggests that any claim by Mexico for refund of the final anti-dumping duties does not make sense since the final measure is outside the Panel's terms of reference. Since the provisional measure is the only measure that falls within the Panel's terms of reference, Mexico is essentially requesting that the provisional measure should be annulled, and that Guatemala's importers should be repaid their money deposits or released from their sureties in respect of imports from Cruz Azul. Guatemala notes that according to Article 7.1 of the ADP Agreement, a provisional measure may only be imposed if an investigation has been initiated properly. The Panel could recommend, therefore, that Guatemala bring the provisional measure into conformity with the ADP Agreement, but only if it is determined that (a) the provisional measure had a significant impact within the meaning of Article 17.4 of the ADP Agreement, and (b) the initiation of the investigation is not consistent with Guatemala's obligations under Article 7.1. Guatemala recalls that Mexico does not claim that Guatemala violated Article 7.1 in respect of the provisional measure.

4.413 Guatemala suggests that Mexico's request that the Panel should recommend a specific remedy is contrary to the explicit provisions of Article 19.1 of the DSU, is inconsistent with substantially all adopted panel reports, and runs counter to the recommendations contained in adopted reports issued by panels established under the Tokyo Round Anti-Dumping Code, the predecessor to the ADP Agreement. Guatemala submits that Article 19.1 of the DSU contains the first provision expressly designed to guide panels as to the nature of the recommendations they should issue. Instead of adopting a provision which authorized the panels to recommend specific remedies, the Contracting Parties during the Uruguay Round maintained the previous practice of respecting the sovereignty of Members in deciding how to bring a particular measure into conformity with their WTO obligations. According to Article 19.1 of the DSU, when a panel or the Appellate Body considers that a Member has imposed a measure that is inconsistent with its WTO obligations, its report will always include a recommendation to the effect that the Member in question should bring the measure into conformity with the relevant agreement. The Panel cannot make any recommendation in respect of the final measure, because the final measure is not within its terms of reference. No GATT or WTO panel has issued recommendations in respect of a measure that is not within its terms of reference. As stated by the Appellate Body in Brazil - Measures Affecting Desiccated Coconut ¹²², the terms of reference of the panel serve the purpose of establishing the jurisdiction of the panel by defining the precise claims at issue. Mexico does not explain how it is possible under Article 19.1 of the DSU for a panel to have the authority to recommend that a Member bring a measure into conformity if the measure is not the subject of the complaint that is under the jurisdiction of the panel. If Mexico's position were accepted, any panel would be free to ignore its terms of reference and to issue recommendations in respect of any measure which was challenged by the complainant after the consultations had been held and the request for the establishment of a panel submitted. Arguably, the only "measure" subject to review by the Panel in this case is the provisional measure. Thus, if the Panel finds that a particular aspect of the Ministry's investigation is inconsistent with Guatemala's obligations under the ADP Agreement, according to Article 19.1 of the DSU it may only recommend that Guatemala bring the provisional measure into conformity with its obligations. Neither the "investigation" nor the "initiation" constitute "measures" that can be brought into conformity with the ADP Agreement in the sense of Article 19 of the DSU. 

4.414 Guatemala notes that Mexico cites New Zealand - Imports of Electrical Transformers from Finland ¹²³ to support its request that the Panel should recommend a specific remedy against Guatemala. ¹²⁴ Guatemala recalls, however, that it is unusual and against the weight of GATT precedent for this type of recommendation issued in the framework of the GATT dispute settlement system to be adopted. Mexico fails to point out that New Zealand was not opposed to the adoption of the report because it apparently considered that this would best serve its sovereign interests. However, Guatemala states that in every case conducted under the Tokyo Round Anti-Dumping Code in which a specific remedy was recommended, the party against whom the complaint had been made unilaterally blocked the adoption of the recommendations, and frequently adopted that position on the grounds that the report included a recommendation for a specific remedy. ¹²⁵ According to the DSU, a Member no longer has the right to unilaterally prevent the adoption of panel recommendations that do not reflect its expectations under the covered agreements. However, Guatemala argues that this modification of the DSU does not alter the Member's expectations according to which panels do not have the authority to recommend specific remedies. According to Guatemala, Article 19.1 of the DSU now makes it clear that the authority of a panel is restricted to recommending that a Member should bring the measure into conformity with the relevant agreement. Guatemala also agrees with the reasoning of the United States in its submission as a third party that, in conformity with the DSU, the Panel should not recommend a specific or retroactive remedy. 

4.415 Guatemala submits that Mexico has not cited a single WTO panel or Appellate Body report recommending a specific remedy - such as the revocation of a measure - that goes beyond the powers granted by Article 19.1 of the DSU. Thus, Guatemala submits that even if the cases cited by Mexico provide examples of previous practice in certain cases dealt with under the GATT, they cannot serve as a precedent for the Panel to exceed its powers under the DSU. 

4.416 Guatemala submits that the second sentence of Article 19.1 of the DSU stipulates that a panel, in addition to making recommendations, may suggest ways in which the Member concerned could implement the recommendations. However, a panel should not suggest any retroactive remedies for the implementation of its recommendation. In practice, the reports adopted by panels both before and after the DSU have, with few exceptions, recommended only non-retroactive remedies. 

4.417 According to Guatemala, a retroactive remedy could wrongly imply a right of private action under the WTO. In anti-dumping cases, duties are reimbursed to the importer located in the territory of the Member against whom the complaint is made. A retroactive remedy could give rise to domestic grounds for action, particularly in countries where the WTO agreements have direct effect. Thus, if a panel were to suggest a retroactive remedy, this could interfere directly with the sovereignty of a Member by establishing a domestic right of action where there had been none previously. 

4.418 Guatemala submits that the suggestion that the provisional measure should be annulled and the money deposit reimbursed is particularly inappropriate in the present case. Unlike the case submitted for consideration by the panel in United States - Anti-Dumping Duties on Imports of Grey Portland Cement and Cement Clinker from Mexico ¹²⁶ , in the present case Mexico has not claimed that the imposition of a provisional measure (or the definitive measure) by Guatemala violates Article 1 of the ADP Agreement.¹²⁷ The panel which examined United States - Anti-Dumping Duties on Imports of Grey Portland Cement and Cement Clinker from Mexico under the Tokyo Round Anti-Dumping Code expressly based its recommendations on Article 1 to justify the retroactive remedy. ¹²⁸ Since Mexico did not submit a request under Article 1 during the consultations or when requesting the establishment of a panel, any claim relating to Article 1 is outside the terms of reference of this Panel, and the Panel does not have the authority to verify whether the initiation of the investigation or the application of an anti-dumping measure was inconsistent with Article 1. Given that Mexico has not claimed violation of Article 1 of the ADP Agreement, Guatemala asserts that the Panel should not recommend the retroactive annulment and revocation of the provisional measure (much less the definitive measure, which was not challenged). 

4.419 Mexico suggests that Guatemala acknowledges the existence of adopted panel reports recommending the revocation and subsequent refunding of anti-dumping duties. However, Mexico notes that Guatemala considers that such examples should not be the rule since in various similar cases the party which lost the dispute simply blocked the adoption of the report. In Guatemala's opinion, the impossibility of blocking panel reports under the DSU does not alter a Member's expectations that panels do not have the authority to recommend a specific remedy. According to Mexico, Guatemala never makes clear where such expectations come from, although they appear to Mexico to flow only from the possibility open to some parties to the Tokyo Round Anti-Dumping Code to block reports which did not suit them. 

4.420 Mexico refers to Guatemala's argument that a retroactive remedy could give rise to domestic grounds for action, in particular in countries where the WTO Agreements have direct effect, and that a panel suggesting a retroactive remedy could interfere directly with the sovereignty of a Member by establishing a domestic right of action where there had been none previously. According to Mexico, this argument has no basis in the ADP Agreement or in the DSU. Moreover, Mexico suggests that when Guatemala subscribed to the results of the Uruguay Round, it was aware of the domestic legal implications of its decision. According to Mexico, for Guatemala to now argue that the obligations deriving from the Uruguay Round Agreements might have domestic consequences is inconsistent with Guatemala's sovereign commitments under those Agreements, especially if Guatemala is thereby attempting to justify the maintenance of measures inconsistent with the covered agreements, in this case the ADP Agreement. 

V. Arguments Presented by Third Parties

A. Canada

5.1 Canada did not make any oral or written submissions to the Panel. 

B. El Salvador 

5.2 El Salvador considers that, given this is the first time a Central American country has carried out an anti-dumping investigation, Guatemala has done its utmost to ensure that the measures adopted are consistent with the ADP Agreement. El Salvador considers that the Panel does not have jurisdiction to examine or make recommendations concerning the final measure adopted by Guatemala since Mexico, in its request for establishment, sought the establishment of a panel solely to examine the provisional anti-dumping measure. Furthermore, it would be wrong for the Panel to consider and rule on the definitive anti-dumping measure in the absence of the prior consultations required by the ADP Agreement. 

5.3 El Salvador regards the DSB, upon which the credibility and reputation of the multilateral trading system mainly rests, as the most important organ of the WTO, and as the ultimate means of safeguarding the trade interests of all its Members. Accordingly, El Salvador suggests that the Panel should be extremely cautious in making its recommendations, since they will set a precedent in an area highly sensitive to the interests of all Members. 

5.4 El Salvador requests the Panel to take the following considerations into account: 

1. the Panel has no mandate to consider or make recommendations concerning the definitive anti-dumping measure applied by Guatemala; 

2. if there is good cause, the Panel should limit itself to recommending that Guatemala bring its provisional measure into conformity with its obligations under the ADP Agreement; and 

3. the Panel should refrain from recommending that Guatemala suspend its anti-dumping measures and refund the corresponding duties. 

5.5 Honduras submits that the Panel should reject Mexico's complaint because Mexico's request for establishment did not specify the final measure. Accordingly, the Panel does not have a mandate to examine the definitive measure adopted on 17 January 1997. According to Article 17 of the ADP Agreement, there are only three specific measures that may be examined by a panel, namely: a provisional measure imposed on the basis of Article 7, a price undertaking given in accordance with Article 8, or a definitive anti-dumping duty imposed in accordance with Article 9. According to Honduras, the ordinary meaning of Article 17.4 of the ADP Agreement leaves no doubt that no other measure may be examined. In other words, neither the anti-dumping investigation itself, nor an action or decision taken during the course of the investigation, constitutes a "measure". Honduras also notes that Article 19.1 of the DSU specifies that the competence of a panel relates to examining and making recommendations with respect to measures. According to Honduras, in anti-dumping cases this requirement must refer to Article 1 of the ADP Agreement, whereby "[a]n anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated [footnote omitted] and conducted in accordance with the provisions of this Agreement."  

Continue on to V. Arguments Presented by Third Parties, Section 5.6

Notes:

116. Guatemala notes that Cruz Azul was granted an extension of over two months to reply to the original questionnaire.

117. BISD 32S/55, adopted on 18 July 1985.

118. SCM 85, not adopted, dated 13 October 1987.

119. BISD 40S/358, adopted on 27 October 1993.

120. ADP/82, not adopted, dated 7 September 1992.

121. ADP/117, not adopted, dated 24 February 1994.

122. Report of the Appellate Body, WT/DS22/AB/R, page 22.

123. BISD 32S/55, adopted on 18 July 1985.

124. In this case, Guatemala notes that Finland challenged the anti-dumping measure imposed by New Zealand in conformity with Article VI of GATT 1947, and not with the Tokyo Round Anti-Dumping Code.

125. Guatemala refers, for example, to ADP/M/45 (17 October 1994).

126. ADP/82, not adopted, dated 7 September 1992.

127. According to Guatemala, Article 1 of the ADP Agreement contains a provision similar to Article 1 of the Tokyo Round Anti-Dumping Code:

"An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated [footnote omitted] and conducted in accordance with the provisions of this Agreement".