5.6 Honduras states that Article 6.2 of the DSU requires a request for the establishment of a panel to be made in writing, and to identify the specific measures at issue. Thus, as Mexico failed to mention the final measure in its request for the establishment of a panel, and did not expressly invoke Articles 1 or 9 of the ADP Agreement, the definitive measure falls outside the Panel's terms of reference. The latter may neither examine the final measure, nor refer to the final measure in its report. 

5.7 Honduras submits that the Panel should take due account of the fact that the anti-dumping procedure is essentially a dynamic process and, consequently, only those stages that have already taken place can form the subject of consultations or be examined by a panel. Honduras suggests that in the present case, with complete disregard for the principle of procedural due process, which should apply in any proceedings, Mexico has incorporated stages of the investigation on which there have been no consultations, or which were not expressly challenged in its request for the establishment of a panel. 

5.8 Honduras submits that the provisional measure did not have a significant impact on Mexico's trade interests. In accordance with Article 17.4 of the ADP Agreement, when a provisional measure has had a significant impact, and the Member that requested consultations considers that the measure was taken contrary to the provisions of Article 7.1 of the ADP Agreement, that Member may refer such matter to the DSB. The WTO dispute settlement system enters into action only exceptionally in cases relating to a provisional measure, it being necessary for both the provisional measure to have had a significant impact on the trade interests of the exporting Member and for the adoption of the measure to have been contrary to the provisions of the Agreement concerning the application of provisional measures. According to Honduras, if Mexico intends to challenge the provisional measure by arguing non-fulfilment of the requirements laid down in Article 7.1 of the ADP Agreement, it must also show how that measure has had a "significant impact" on its trade interests. Honduras' analysis of the provisional measure reveals that it has the following characteristics:  

1. it was in force for only four months; 

2. it only affected one exporter of grey portland cement; and 

3. the exports affected by the provisional measure accounted for only a small percentage of Mexico's exports during that four-month period. 

5.10 According to Honduras, Cementos Progreso's application not only included evidence of dumping and threat of injury, but also satisfied the causal link condition since it contained the information required by Articles 5.2(iii) and 5.2(iv) of the ADP Agreement. The application included evidence substantiating the assertions of the domestic producer which, in the opinion of the Ministry, constituted sufficient evidence for the initiation of an investigation. 

5.11 Honduras submits that the information "reasonably available to the applicant", in accordance with Article 5.2 of the ADP Agreement, varies according to the specific case, the country and the industry concerned. As a Central American country, Honduras considers it essential that in this and future cases proper account be taken of the fact that the information reasonably available in Central America is not comparable with that available in more developed countries such as the United States, Canada or Mexico itself. Accordingly, Honduras requests that the Panel should recognize the right of Central American investigating authorities to decide whether the information provided by the applicant is that reasonably available to it, in accordance with the conditions of availability of information in each country. In support of its position Honduras relies on Article 5.3 of the ADP Agreement, according to which Honduras considers that the investigating authority alone is competent to determine whether the applicant has fulfilled the requirements of Article 5.2 of the ADP Agreement. 

5.12 Honduras recognizes that the requirements for initiating an anti-dumping investigation contained in Article 5 of the ADP Agreement were established as a safeguard to prevent a Member of the WTO from initiating frivolous and unjustified anti-dumping investigations that impose unfair costs on foreign exporters and impede free trade. However, Honduras also points out that the requirements of Article 5 are in no way intended to frustrate legitimate anti-dumping investigations. According to Honduras, it cannot be said that Guatemala resorts frequently and arbitrarily to anti-dumping measures, since this is the first and only anti-dumping investigation that Guatemala has initiated. 

5.13 Honduras submits that the ADP Agreement does not permit a panel to conduct a de novo review of an investigating authority's decision to initiate an anti-dumping investigation, especially as the investigation was initiated on the basis of evidence sufficient to have led a reasonable and impartial person to initiate. 

5.14 Honduras suggests that if Guatemala's interpretation of Article 5.5 of the ADP Agreement is correct, the investigating authority should not commence its investigation until the exporting country has received official notification of the initiation of the investigation. Honduras notes that in the present case, Guatemala refrained from carrying out any actual investigation, issuing questionnaires or taking any other measure until Mexico had been notified of the initiation. According to Honduras, one of the purposes of any notification is to make the parties aware of the existence of a legal proceeding in order that they may have a proper opportunity to defend their interests. In the present case, both Mexico and Cruz Azul had sufficient time to defend their interests. If the Panel finds that Guatemala infringed Article 5.5 of the ADP Agreement, Honduras suggests that it take account of the fact that, in any event, the alleged delay in notification did not do Mexico and Cruz Azul any harm, since during the investigation they always had sufficient time to defend their interests. According to Honduras, this is shown by the fact that Guatemala gave Cruz Azul a two-month extension to answer the questionnaire and that, without being obliged to do so, Guatemala waited more than six months before imposing a provisional measure. 

5.15 Honduras asserts that the Ministry took into account the provisions of Article 7.1 of the ADP Agreement in making a preliminary determination of threat of injury. Moreover, under the ADP Agreement the Ministry had the right to examine and assess the evidence gathered in the preliminary investigation and arrive at preliminary factual findings based on the evidence gathered up to that point. Accordingly, the Panel is not competent to review the case de novo. Honduras submits that the extent of the Panel's examination is defined by the provisions of Article 17.6 of the ADP Agreement. 

5.16 Honduras suggests that even if the Panel does conclude that Guatemala infringed certain provisions of the ADP Agreement, it should not recommend a retroactive remedy, but should simply recommend that Guatemala bring the measure into conformity with the ADP Agreement, in accordance with Article 19.1 of the DSU. Although the Panel may suggest ways in which Guatemala could implement its recommendations, it is for Guatemala to decide how the Panel's recommendations should be implemented. According to Honduras, the recommendations referred to in Article 19.1 of the DSU are prospective and not retroactive.  

5.17 Honduras requests the Panel to find that: 

1. the Panel does not have a mandate to examine the final measure because such examination lies outside its terms of reference. Moreover, for the same reason the Panel should reject the entire spectrum of claims put forward by Mexico in its first submission concerning the final stage of the investigation; 

2. Mexico has not shown how the provisional measure has had or is having any significant impact on its trade interests. Honduras points out that, in view of the special characteristics of the case, there has been no such significant impact; 

3. without prejudice to the argument put forward under 1 above, Guatemala initiated and conducted the anti-dumping investigation and imposed the provisional measure in strict compliance with the provisions of the ADP Agreement; and 

4. the Panel is only authorized to suggest ways in which Guatemala could implement its recommendations. The Panel is not authorized to recommend a retroactive remedy, since the remedy must be prospective. 

5.18 The United States submits that this dispute raises admissibility considerations that go to the core of fundamental fairness. Mexico has requested the establishment of a panel in respect of one measure, Guatemala's provisional anti-dumping measure, in order to seek findings and a panel recommendation that go to an entirely different measure, Guatemala's final action to levy definitive anti-dumping duties, on which Mexico never requested consultations with Guatemala. Mexico also did not identify Guatemala's final action as a measure in its request for the establishment of a panel. Therefore, Mexico cannot challenge Guatemala's final anti-dumping measure before this Panel. Mexico has neither claimed nor demonstrated that Guatemala's provisional measure has a "significant impact" as required by Article 17.4 of the ADP Agreement. Consequently, according to the United States, this dispute is not properly before the Panel. 

5.19 The United States asserts that Articles 4 and 6 of the DSU and Article 17 of the ADP Agreement define when a dispute can be referred to a panel to review the actions of parties under the Anti-dumping Agreement. ¹²⁹ These rules require that WTO Members adhere to particular standards when making requests for consultations and requests for panels to be established in respect of the anti-dumping measures of other Members. According to the United States, they lay out three basic tenets to be followed. First, these rules require a complainant to request consultations and the establishment of a panel in respect of an anti-dumping measure. Article 17.3 of the ADP Agreement, which provides for consultations, is not a special or additional rule or procedure identified in Annex 2 of the DSU. Therefore, Article 17.3 is subject to Article 4 of the DSU. Article 4 of the DSU requires that a complainant identify the measures at issue in its consultation request (Article 4.4), and also requires the respondent "to accord sympathetic consideration and afford adequate opportunity for consultation . . . concerning measures . . . " (Article 4.2). For the United States, it is therefore clear that a party requesting consultations under Article 17.3 of the ADP Agreement "with a view to reaching a mutually satisfactory resolution of the matter . . ." must do so by identifying the measure(s) at issue in accordance with Article 4 of the DSU. Likewise, 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 DSB about which they have consulted by "identifying the specific measures at issue" (Article 6.2 of the DSU). It can therefore be concluded that the commencement of dispute settlement under the ADP Agreement is directly dependent upon the identification by the complainant of the anti-dumping measure(s) in respect of which the complainant intends to make claims. ¹³⁰ Moreover, the United States submits that Article 17.4 of the ADP Agreement identifies three measures which can be referred to a panel: provisional measures (under limited circumstances), or a final action to levy definitive anti-dumping duties, or a final action to accept price undertakings.  ¹³¹

5.20 According to the United States, therefore, a Member alleging that the initiation of an anti-dumping investigation was improper must do so as part of a challenge to the imposition of a measure (here, either the imposition of a provisional measure or final measure or the acceptance of an undertaking). For the United States, this means that a complaining Member must wait until the measure is imposed, engage in consultations in order to seek a mutually agreed solution, and, where required, wait the necessary period of time before seeking establishment of a panel. In addition, in the case of provisional measures, the complaining Member must allege and demonstrate that the provisional measure has a "significant impact" and was taken contrary to the provisions of paragraph 1 of Article 7 of the ADP Agreement. The United States believes that "pre-measure" disputes are precluded, and that this conclusion is supported by the text of the agreements, their negotiating history, precedent, and sound legal policy considerations. 

5.21 The United States submits that under Article 31.1 of the Vienna Convention, one must begin an interpretative analysis with the actual terms of a treaty. In the case of Articles 17.3 and 17.4 of the ADP Agreement, the text of those provisions, when read in conjunction with provisions of the DSU, precludes "pre-measure" disputes. Article 17.3, which provides for consultations, is not a special or additional rule or procedure identified in Annex 2 of the DSU. Therefore, Article 17.3 is subject to the DSU, which, among other things, requires in Article 4.4 that a complainant identify "the measures at issue" in its consultation request. Thus, according to the United States, a complainant seeking consultations under Article 17.3 of the ADP Agreement "with a view to reaching a mutually satisfactory resolution of the matter" must do so by identifying the measure(s) at issue in accordance with Article 4.4 of the DSU. The United States asserts that this conclusion is not affected by the fact that Article 17.3 uses the term "matter", because a "matter" consists of two elements: (1) a measure(s); and (2) legal claims regarding the measure(s). According to the United States, this follows from several provisions of the DSU. First, Article 6.2, which spells out the requirements for requesting the establishment of a panel, requires that a complainant (1) identify the specific measures at issue; and (2) provide a brief summary of the legal basis of the complaint (i.e., the claim(s)). These two elements form the "matter" that is referred to the DSB within the meaning of Article 7.1 of the DSU, and with respect to which a panel must make an objective assessment within the meaning of Article 11 of the DSU. The United States suggests that Article 4 of the DSU takes a similar approach. Under Article 4.4, a complainant requesting consultations must (1) identify "the measures at issue"; and (2) must give "an indication of the legal basis for the complaint" (i.e., the claim(s)). Again, these two elements form the "matter" with respect to which the disputants "should attempt to obtain satisfactory adjustment" within the meaning of Article 4.5. Thus, when Articles 17.3 and 17.4 are read in harmony with the DSU (which they must be), it is clear to the United States that an anti-dumping complainant is not relieved of the obligation to challenge a "measure." Because the initiation of an anti-dumping investigation is not a "measure," a complainant making a claim that an initiation violated the ADP Agreement must wait until a challengeable measure has been imposed. 

5.22 The United States argues that in addition to the terms of a treaty, Article 31.1 of the Vienna Convention calls for a consideration of the context of treaty terms. In this case, Article 13 of the ADP Agreement supports the conclusion that the drafters did not intend to permit "pre-measure" disputes in anti-dumping cases. Article 13 obliges Members to provide for judicial or quasi-judicial review of anti-dumping actions, but only with respect to "final" anti-dumping actions. Article 13 does not require Members to provide for review of pre-final actions, such as the initiation of an investigation. According to the United States, if the drafters had thought that pre-measure review was a critical due process element of any anti-dumping regime, they would have required that Members provide for such review in their domestic systems. The fact that the drafters did not impose such a requirement reinforces the conclusion that they also did not contemplate "pre-measure" WTO dispute settlement with respect to anti-dumping cases.  ¹³²

5.23 According to the United States, the negotiating history of the ADP Agreement confirms the conclusion that "pre-measure" disputes are not permitted. Under Article 32 of the Vienna Convention, this material may be considered to confirm the meaning of a provision of a treaty. During the Uruguay Round negotiations on anti-dumping, several proposals were made that would have allowed for "pre-measure" challenges to decisions to initiate anti-dumping investigations. At a meeting of the anti-dumping negotiating group, an unnamed delegation opined that "[d]ispute settlement procedures should be available at all stages of the anti-dumping proceedings and procedures should also allow exporting countries to challenge the initiation of a proceeding." ¹³³ More specifically, the United States recalls that Hong Kong made a proposal which would have added the following new paragraph 3 to Article 15 of the Tokyo Round Anti-Dumping Code: ¹³⁴

"3. When a Party considers that there is no sufficient evidence of either dumping or of injury to justify proceeding with the case, the Party may refer such matter to the Committee for conciliation or, in derogation of paragraphs 4 and 6 of Article 15, may request for immediate establishment of a panel to examine the matter." 

"Present dispute settlement procedures provide for the exporting country to seek conciliation only after the imposition of provisional duties. However, trade damage would have already been caused and code obligations violated at the stage of initiation of the antidumping investigation. Therefore, dispute settlement procedures should be available at all stages of the antidumping proceedings."

 5.24 The United States emphasises that none of these proposals was adopted. According to the United States, no clearer evidence can be provided that the drafters of the ADP Agreement did not intend to permit "pre-measure" disputes. 

5.25 The United States submits that sound legal policy considerations support the preclusion of "pre-measure" disputes. If such disputes were permitted they would undermine the right of Members to take anti-dumping measures and would wreak havoc with the WTO dispute settlement system. It is fashionable in some quarters to view Article VI of GATT 1994 and the ADP Agreement as only imposing obligations on anti-dumping users. From this perspective, anything that hinders the use of anti-dumping measures, such as the ability of an exporting Member to bring a "pre-measure" dispute, is a desirable thing. However, the United States argues this view ignores the fact that, in addition to obligations, Article VI and the ADP Agreement also confer "rights" on anti-dumping users. Any doubt on this score was eliminated in Brazil - Measures Affecting Desiccated Coconut. ¹³⁹  In that case, which dealt with countervailing duties, the Appellate Body underscored the fact that Article VI, and the agreements interpreting it, confer "rights" as well as "obligations": ¹⁴⁰

"Article VI of GATT 1947 and the Tokyo Round SCM Code represent, as among Code signatories, a package of rights and obligations regarding the use of countervailing measures, and Article VI of GATT 1994 and the SCM Agreement represent a new and different package of rights and obligations, as among WTO Members, regarding the use of countervailing duties. Thus, Article VI and the respective SCM Agreements impose obligations on a potential user of countervailing duties, in the form of conditions that have to be fulfilled in order to impose a duty, but they also confer the right to impose a countervailing duty when those conditions are satisfied. The SCM Agreements do not merely impose additional substantive and procedural obligations on a potential user of countervailing measures. Rather, the SCM Agreements and Article VI together define, clarify and in some cases modify the whole package of rights and obligations of a potential user of countervailing measures." (Underscoring in original).

o Article 6.1 - "All interested parties in an anti-dumping investigation shall be given � ample opportunity to present in writing all evidence which they consider relevant � ."; 

o Article 6.1.1 - "Due consideration should be given to any request for an extension of the 30-day [questionnaire reply] period ... "; 

o Article 6.1.2 - "[E]vidence presented in writing by one interested party shall be made available promptly to other interested parties participating in the investigation"; 

o Article 6.1.3, note 16 - "[W]here the number of exporters involved is particularly high, the full text of the written application should instead be provided only to the authorities of the exporting Member or to the relevant trade association"; and 

o Article 6.2 - "Provision of such opportunities [to meet those parties with adverse interests] must take account of � the convenience to the parties." 

o Where an investigating authority imposes a deadline for written submissions of Day X, but an exporter requests a deadline of Day Y, has the investigating authority failed to provide "ample opportunity" within the meaning of Article 6.1? 

o Where an investigating authority denies a request for an extension, has it failed to give "due consideration" within the meaning of Article 6.1.1? 

o Where an investigating authority takes 2 days instead of 1 day to make evidence available, has it failed to make evidence available "promptly"? 

o Where, because the number of exporters is 25, an investigating authority provides a copy of the written application only to the authorities of the exporting Member, has the investigating authority complied with the "particularly high" standard of Article 6.1.3, note 16? 

o Where an investigating authority schedules a hearing on Day X and an exporter would have preferred Day Y, has the investigating authority taken account of "the convenience to the parties" within the meaning of Article 6.2? 

5.27 The United States submits that the initiation of an anti-dumping investigation does not constitute a "measure" within the meaning of Article 19.1 or of any other provision in the DSU. First, the DSU does not itself contain a definition of the term "measure." However, in the absence of such a definition, it is appropriate to look to the provisions of the WTO agreement in question. In this case, Article 1 of the ADP Agreement makes it clear that the initiation of an anti-dumping investigation does not constitute a "measure." Article 1 provides that "[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 and conducted in accordance with the provisions of this Agreement." (Footnote omitted). Thus, it is clear to the United States that under the ADP Agreement, a "measure" is something that results from an "investigation," and that an "investigation" itself cannot be a "measure." The United States suggests that a contrary interpretation (i.e., that an investigation is a "measure") would produce the absurd and circular result that "an antidumping investigation shall be applied [initiated] only . . . pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement." In addition, Article 18.3 of the ADP Agreement makes clear that an investigation is not a "measure." Article 18.3, which is a transition rule, provides that "the provisions of this Agreement shall apply to investigations, and reviews of existing measures, initiated pursuant to applications which have been made on or after the date of entry into force for a Member of the WTO Agreement." The United States suggests that, as in the case of Article 1, Article 18.3 draws a clear distinction between "investigations" and "measures." 

Continue on to V. Arguments Presented by Third Parties, Section 5.28

Notes:

129. Article 17.1 states "[e]xcept as otherwise provided herein, the Dispute Settlement Understanding is applicable to consultations and the settlement of disputes under this Agreement."

130. In this context the United States suggests that it is also relevant to note that Article 1 of the ADP Agreement does not equate an anti-dumping measure with an anti-dumping investigation. Article 1 states, "[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." Further, in 'Brazil - Measures Affecting Desiccated Coconut, the Appellate Body stated, "[w]e see a decision to impose a definitive countervailing duty as the culminating act . . . " Report of the Appellate Body, AB 1996-4 (adopted 20 March 1997), p. 11. The United States suggests that this same view should likewise be applicable to an anti-dumping duty.

131. The United States notes that, in its submission, the terms "final action to levy definitive anti?dumping duties" and "final action to accept price undertakings" are collectively referred to as "final anti?dumping measure(s)" or "final measure(s)."

132. The United States suggests that Article 13 and Article 17.4 of the ADP Agreement do differ in one respect. Article 17.4 provides for dispute settlement with respect to provisional measures, whereas Article 13 does not require Members to provide for judicial review of provisional measures. However, Article 17.4 requires that the complainant allege and prove that the provisional measure has a "significant impact" and was taken contrary to the provisions in paragraph 1 of Article 7 of the ADP Agreement as a prerequisite for dispute settlement regarding a provisional measure. Neither Article 17.4 nor Article 13 goes so far as to provide for dispute settlement or judicial review with respect to the initiation of an investigation.

133. MTN.GNG/NG8/15 (19 March 1990), page 66.

134. MTN.GNG/NG8/W/83/Add.5 (23 July 1990), page 157. The United States notes that Article 15 eventually became Article 17 of the ADP Agreement.

135. MTN.GNG/NG8/W/55, page 10.

136. Ibid., pages 10-11.

137. MTN.GNG/NG8/W/76 (11 April 1990), page 5.

138. MTN.GNG/NG8/W/64 (22 December 1989), page 10.

139. Brazil - Measures Affecting Desiccated Coconut, Report of the Appellate Body, WT/DS22/AB/R, adopted 20 March 1997.

140. Ibid., page 18, quoting with approval from Brazil - Measures Affecting Desiccated Coconut, Report of the Panel, WT/DS22/R, para. 246, adopted 20 March 1997.

141. Cf., Brazil - Measures Affecting Desiccated Coconut Report of the Appellate Body, WT/DS22/AB/R, page 11 ("[w]e see a decision to impose a definitive countervailing duty as the culminating act of a domestic legal process which starts with the filing of an application by the domestic industry, includes the initiation and conduct of an investigation by an investigating authority, and normally leads to a preliminary and a final determination.").