5.28 The United States argues that putting aside the language of the ADP Agreement, the Appellate Body already has ruled that procedural actions that result in a "measure" do not themselves constitute "measures." In United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, ¹⁴² India challenged a transitional safeguard action taken by the United States under the Agreement on Textiles and Clothing ("ATC"). The panel in that case found that the safeguard action violated the ATC because of deficiencies in the United States' determination of serious damage. Having found the measure in question (the safeguard action) to be inconsistent with certain provisions of the ATC, the panel, for reasons of judicial economy, declined to address other claims raised by India. ¹⁴³ India appealed the panel's decision to refrain from making findings on two claims, one of which was the alleged failure of the United States to specify in its request for consultations whether the proposed transitional safeguard action related to serious damage or the actual threat of serious damage. ¹⁴⁴ Under Article 6.7 of the ATC, consultations are a procedural step that must occur prior to the imposition of a transitional safeguard action. The United States notes that although the panel obviously had regarded the "measure" at issue to be the transitional safeguard action itself, and not the procedural steps leading up to the safeguard action, India argued on appeal that under the ATC, the request for consultations "must be regarded as [a] distinct measure[] that can be contested separately." ¹⁴⁵ According to India, because the request for consultations constituted a "measure," the panel could not refrain from addressing India's arguments relating to the request for consultations. The United States recalls that the Appellate Body affirmed the panel in this regard. The Appellate Body cited with approval prior GATT 1947 and WTO panel practice under which: ¹⁴⁶

"if a panel found that a measure was inconsistent with a particular provision of the GATT 1947, it generally did not go on to examine whether the measure was also inconsistent with other GATT provisions that a complaining party may have argued were violated. In recent WTO practice, panels likewise have refrained from examining each and every claim made by the complaining party and have made findings only on those claims that such panels concluded were necessary to resolve the particular matter." 

5.29 The United States argues that once a panel is established under Article 17.4 of the ADP Agreement and Article 6 of the DSU, the panel may only address claims raised in respect of the particular measure on which the corresponding consultations were requested. Thus, if consultations were requested only in respect of a provisional anti-dumping measure, the panel, once established, may make findings only in respect of claims related to the provisional measure which had been the subject of the request for consultations (i.e., claims related to any actions up to and including the provisional measure). According to the United States, this also means that when a party that requested consultations on a provisional measure, before final action has been taken, determines thereafter that it also wants to challenge the respondent's final anti-dumping measure, it must request additional consultations on that final measure - subsequent to its adoption - before requesting the establishment of a panel to review that final measure. A complainant may not rely upon the earlier consultations on the provisional anti-dumping measure as a sort of "standing-consultation-in-reserve" that entitles a complainant to request a panel with respect to a later measure, such as a final anti-dumping measure. ¹⁴⁷

5.30 According to the United States, the primary focus of Article 17.4 of the ADP Agreement is on final anti-dumping measures. Challenges to provisional measures are contemplated only in certain limited situations. Specifically, to challenge a provisional measure, a complainant must show that the provisional measure has a significant impact and was taken contrary to Article 7.1 of the ADP Agreement. ¹⁴⁸ These requirements were also contained in Article 15.3 of the Tokyo Round Anti-Dumping Code, a predecessor provision to Article 17.4 of the ADP Agreement. 

5.31 The United States submits that these strict requirements which must be met by complainants in order to challenge a provisional measure establish an important balance between the rights of complainants to bring such challenges, and the burden on respondents to defend against them. In most cases, the underlying anti-dumping investigation is near completion and, therefore, the provisional measure will be replaced with a final measure in a short number of months. ¹⁴⁹ In fact, the ADP Agreement does not even require Members to impose provisional measures at all in order ultimately to impose final measures. Moreover, in situations where the final anti-dumping measure has already been put into place and, for whatever reason, a complainant still decides to challenge the provisional measure, the United States has difficulty imagining how, in such a circumstance, it would be possible for the complainant to show that the provisional measure has a continuing significant impact. 

5.32 The United States argues that the approach taken by Mexico in this dispute is procedurally flawed. In a nutshell, Mexico seeks to have this Panel make its recommendation under Article 19 of the DSU in respect of a measure - Guatemala's final measure imposing anti-dumping duties - that Mexico itself never identified as a challenged measure and on which it never consulted, as it was required to do by Articles 4 and 6 of the DSU. The United States fundamentally disagrees with Mexico's approach. Mexico would have this Panel make findings on Guatemala's final anti-dumping measure when Mexico did not request (and could not have requested) consultations on this measure as it was not existent at that time, and when Mexico did not identify this measure in its request for the establishment of a panel. ¹⁵⁰ The United States suggests that both of these actions are mandatory prerequisites under applicable dispute settlement rules for Mexico to proceed to a panel and for a panel to make a recommendation with respect to Guatemala's final anti-dumping measure. Mexico satisfied neither. Consequently, Guatemala's final measure is not properly before the Panel and the Panel's findings should not address or affect this measure. In addition to applicable rules, the United States suggests that an important underpinning of the dispute settlement system is at stake. Mexico's failure to seek consultations on Guatemala's final anti-dumping measure, the measure on which Mexico seeks a recommendation, would result in a short-circuiting of the dispute settlement process contrary to the goal of Article 3.7 of the DSU. Based on this Article, the parties are directed to do their utmost to work toward a mutually acceptable solution. If, as is the case here, one Member elects not even to request consultations on the measure which is the true object of that Member's concern, a key objective of the DSU is wholly undermined. According to the United States, the Panel should not allow Mexico to bootstrap Guatemala's final anti-dumping measure into the Panel's terms of reference, and should conclude that Guatemala's final anti-dumping measure is not properly before it in this dispute. 

5.33 The United States considers that under Article 17.4 of the ADP Agreement, a complainant may challenge a provisional measure if it demonstrates the significant impact of the respondent's provisional measure and that such measure was taken contrary to the provisions of paragraph 1 of Article 7. Mexico failed to allege the requisite significant impact of Guatemala's provisional measure required under Article 17.4 of the ADP Agreement. Under such circumstances, the United States submits that Guatemala's provisional measure is not properly before the Panel. Furthermore, even if Mexico's panel request were not procedurally flawed in this way, Mexico has not demonstrated any significant impact of the Guatemalan provisional measure. 

5.34 In the view of the United States, the language of Article 5 of the ADP Agreement is very precise with respect to the information that must be included in an anti-dumping application. The informational requirements are plainly set forth in Article 5.2 and, more specifically, Article 5.2(i) through (iv). Article 5.2 provides that a written application submitted by or on behalf of a domestic industry shall include evidence of (a) dumping, (b) injury within the meaning of Article VI of GATT 1994 as interpreted by the ADP Agreement and (c) a causal link between the dumped imports and the alleged injury. Article 5.2 emphasizes, moreover, that simple assertions, unsubstantiated by relevant evidence cannot be considered a sufficient basis for initiation of an investigation. Instead, a domestic industry's application must contain information reasonably available to the applicant respecting the subject matter identified in subparagraphs (i) through (iv) of Article 5.2. Article 5.2(iii), for example, directs that reasonably available data relating to the existence of dumping be submitted. Article 5.2(iv) specifies that for purposes of demonstrating the consequent impact of dumped imports on the domestic industry, relevant factors having a bearing on the industry, such as those listed in paragraphs 2 and 4 of Article 3, should be offered as evidence in the application. ¹⁵¹ The United States notes that Article 5.3 then directs investigating authorities "to examine the accuracy and adequacy of the evidence provided in the application to determine whether there is sufficient evidence to justify the initiation of an investigation." ¹⁵²

5.35 The United States notes that the requirement that the application contain information on dumping, injury, and causation is not new, although the ADP Agreement now significantly states that only that information "reasonably available" to the applicant domestic industry is necessary. Otherwise, the United States recalls that Article 5.1 of the Tokyo Round Anti-Dumping Code contained very similar language regarding the three essential categories of information necessary to an application. Furthermore, the non-exhaustive list of injury factors contained in paragraphs 2 and 4 of Article 3 of the Tokyo Round Anti-Dumping Code were the precursors to the lists now contained in paragraphs 2 and 4 of Article 3 of the ADP Agreement, and are almost identically worded. The United States suggests that there are other similarities between the language contained in the ADP Agreement and that contained in the Tokyo Round Anti-Dumping Code. Most importantly, both the Tokyo Round Anti-Dumping Code and the ADP Agreement simply state that an anti-dumping application must contain sufficient evidence to justify the initiation of an investigation. What constitutes "sufficient evidence" is not further defined. However, the United States submits that logic directs that the quantum and quality of information required for the initiation of an investigation must be less than that necessary for a preliminary or final determination that is reached after a full investigation is conducted. 

5.36 According to the United States, the report of the panel in United States - Measures Affecting Imports of Softwood Lumber From Canada is instructive respecting the sufficiency of information for initiation. ¹⁵³ That panel made the following observations: ¹⁵⁴

"In analyzing further what was meant by the term "sufficient evidence," the Panel noted that the quantum and quality of evidence to be required of an investigating authority prior to initiation of an investigation would necessarily have to be less than that required of that authority at the time of making a final determination. At the same time, it appeared to the Panel that "sufficient evidence" clearly had to mean more than mere allegation or conjecture, and could not be taken to mean just "any evidence". In particular, there had to be a factual basis to the decision of the national investigative authorities and this factual basis had to be susceptible to review under the Agreement. Whereas the quantum and quality of evidence required at the time of initiation was less than that required to establish, pursuant to investigation, the required Agreement elements of subsidy, subsidized imports, injury and causal link between subsidized imports and injury, the Panel was of the view that the evidence required at the time of initiation nonetheless had to be relevant to establishing these same Agreement elements." 

"The Panel considered that in reviewing the action of the United States authorities in respect of determining the existence of sufficient evidence to initiate, the Panel was not to conduct a de novo review of the evidence relied upon by the United States authorities or otherwise to substitute its judgment as to the sufficiency of the particular evidence considered by the United States authorities. Rather, in the view of the Panel, the review to be applied in the present case required consideration of whether a reasonable, unprejudiced person could have found, based upon the evidence relied upon by the United States at the time of initiation, that sufficient evidence existed of subsidy, injury and causal link to justify initiation of the investigation." 

5.39 The United States notes that Mexico's challenge to the initiation of the investigation depends in substantial part on its argument that the limited price and volume data provided by the applicant industry was inadequate to satisfy the requirements of Article 5 of the ADP Agreement. ¹⁵⁶ The United States recalls Guatemala's response that the information supplied in the application was all that was reasonably available to the applicant industry and, therefore, all that was required by Article 5.2. The adequacy of the information provided in the application and on which the initiation was based, thus, largely depends on the meaning to be ascribed to the terms "reasonably available to the applicant." In this regard, the language in Article 5.2 directing that an "application shall contain such information as is reasonably available to the applicant" is intended to prevent the imposition of unreasonable information requirements that go beyond not only the normal capacity of a private entity to develop, but also beyond those of a particular applicant in a given case. Thus, the United States notes for example, confidential pricing, cost of production, and profitability information pertaining to foreign producers or domestic competitors are not normally obtainable by legal means and would not normally be considered to be "reasonably available" to an applicant so as to require such information for initiation. Similarly, there may be aggregate information regarding the volume and value of imports or industry production and capacity that is available in some countries, but which may be legally or simply practically unavailable in others or to other applicants. In circumstances where a practical or legal bar exists to the acquisition of information otherwise required by the ADP Agreement, such information in that instance also should not be considered to be "reasonably available" to an applicant. According to the United States, because the "reasonably available" language in Article 5.2 was not intended to excuse any inadequacy in an application that could have been avoided or cured by reasonable efforts on the part of the domestic industry, where an applicant asserts the unavailability of critical data as a reason for not fulfilling information requirements imposed by the ADP Agreement, some explanation of the basis for the unavailability may be required. The United States considers that such explanation appears particularly appropriate when missing information pertains to the domestic entities making the application and which normally would be expected to be within their possession. 

5.40 The United States suggests that the Panel must consider both (1) whether the information relied on by Guatemala in initiating its investigation of cement from Mexico was sufficient for an unprejudiced person to conclude that the initiation of an investigation was justified, and (2) whether an unprejudiced person would have reason to believe that the indicated information was not reasonably available to the applicant. The United States submits that without any explanation why the data was not reasonably available, the latter question cannot be answered. The United States submits that Article 5.3 of the ADP Agreement required Guatemala to consider these issues in examining "the accuracy and adequacy of the evidence provided in the application�" However, the United States suggests that information sufficient to prove the existence of dumping or to conclude that the domestic industry in Guatemala was threatened with injury by reason of the imports from Mexico was certainly not required for purposes of initiation. 

5.41 The United States notes that the factors considered by the Ministry in deciding whether to initiate the cement investigation are reflected in the Ministry's Recommendation Memorandum. With respect to the requirements of Article 5.2(i), the applicant stated that it accounted for 100% of cement production in Guatemala, that its production capacity equalled 1.6 million metric tonnes, and that it was operating at 100% capacity utilization. The requirements of Article 5.2(i), thus, appear to have been fully satisfied. The requirements of Article 5.2(ii) also appear to have been fulfilled as the applicant described the product to be investigated and provided the identity of the producer/exporter whose shipments were alleged to be dumped and also to threaten injury to the domestic industry in Guatemala. 

5.42 The United States recalls that Article 5.2(iii) requires that information be provided supporting the allegations of dumping. Based on the materials reviewed by the United States, it would appear that the application for initiation did not identify the type of grey portland cement upon which the Guatemalan industry based its evidence of normal value. The evidence of normal value consisted of two invoices reflecting the price of two separate sales of Mexican cement in Tapachula, Mexico in August 1995. However, both the invoices and the application for initiation merely identified the cement sold in Mexico as grey cement. According to the United States, a question is thus presented whether this information was all that was reasonably available to the applicant and whether the Guatemalan authorities, given the limited nature of the pricing information offered in the application, queried the industry applicant regarding the reasonable availability of other data. The United States suggests that there is no indication in either the notice of initiation of the investigation or the memorandum recommending initiation from the Ministry that these matters were addressed. 

5.43 The United States suggests that with respect to information on the evolution of the volume of the allegedly dumped imports required by Article 5.2(iv) of the ADP Agreement, the investigating authority relied on two shipments of cement from Mexico which occurred on consecutive days and statements that other imports were being made during a three month period. The United States recalls that these import volumes were described as massive, but were not quantified. The applicant explained that the dearth of import volume data was due to its lack of access to official import data and, therefore, requested the investigating authority to develop this information. However, no explanation was offered as to why more complete volume data was unavailable. Moreover, the United States considers that Guatemala did not fully explain precisely why the volume data was not reasonably available to the applicant and how Guatemala's domestic law prevented the applicant from obtaining the data. On the other hand, Mexico has not offered reasons why it believes that such data was reasonably available to the applicant. The basis for the assertions respecting the reasonable availability of data pertaining to both dumping and import volume are critical to the application and to the initiation and should be pursued by the Panel. With respect to injurious pricing, the information that accompanied the application indicated that the prices of the two import shipments for which volume data was available were significantly below the reported prevailing prices for domestically produced cement in Guatemala. Further, it was alleged that the cement from Mexico sold in Guatemala at prices that were below the production cost of the domestic producer in Guatemala. The applicant contended that if the massive imports of cement continued to be sold at the indicated prices, both the domestic industry's planned expansion and capital improvements would have to be cancelled and existing production facilities would be closed with a concomitant loss in employment. According to the United States, this information, while limited in scope, appears to minimally satisfy the requirements of Article 5.2(iv) relating to injurious price data and threat of injury. The United States considers it important to note, moreover, that the applicant alleged a threat of injury by virtue of the imports from Mexico, and did not assert the existence of present injury. The nature of information relevant for a threat case may be substantially different from that which is pertinent in a present injury case. Article 3.7 acknowledges this distinction in connection with determinations involving threat of injury. For the United States, it is only logical that the same distinction be recognized in terms of the information that is considered to be "reasonably available" to an applicant in requesting the initiation of an anti-dumping investigation. An applicant must still provide information, and not mere speculation, to support allegations of threat of injury. However, the United States suggests that the information may be different in kind than that which would be considered "reasonably available" in the context of an application involving present injury, if for no other reason than that threat of injury involves an incipient event. 

5.44 In the view of the United States, the question that the Panel must have answered by the parties is whether the application contained the information reasonably available to the applicant respecting dumping and import volume. While more information certainly would have been useful in the application, this is likely to always be the case, and is not the issue here. For the United States, the issue is whether the applicant provided the information reasonably available to it as required by Article 5.2 (iii) and (iv) of the ADP Agreement. 

5.45 The United States recalls that Mexico asserts as a factual matter that it was not provided with notification of the filing of an application prior to initiation of the investigation as required by Article 5.5 of the ADP Agreement. Articles 5.5 and 12.1 of the ADP Agreement contain language germane to the timing of notification to exporting Members and interested parties in respect of initiation of an investigation. 

5.46 The United States notes Guatemala's argument that its interpretation of the requirements contained in Article 5.5 of the ADP Agreement is entitled to deference pursuant to Article 17.6(ii) of the ADP Agreement as a permissible construction of the cited language. The United States agrees that the standard of review enunciated in Article 17.6(ii) requires a panel to uphold an interpretation of the ADP Agreement by an investigating authority when the language in the ADP Agreement is susceptible to more than one permissible interpretation and the challenged interpretation is a permissible construction. In the instant circumstances, however, the United States considers that the documents before the Panel suggest that the Guatemalan authorities may not have entertained their current reading of the requirements of Article 5.5 when the events at issue transpired. In fact, a memorandum from the Director for Economic Integration to the Ministry specifically states that the date of the initiation of the investigation shall be considered to be the date on which such notice is published in the Official Journal. Furthermore, in a facsimile communication between the Ministry and SECOFI, dated 26 July 1996, an official of the Ministry expresses her apologies for the belated notification to Mexico relating to initiation of the investigation. Specifically, the United States recalls that the Ministry states that the delayed notice was due to a mistake on the part of the responsible official who was said to be unfamiliar with the applicable notification provision in anti-dumping investigations. Additionally, the actual published notice makes no mention of the fact that the investigation would not commence until some later date, but instead, for example, notifies interested parties that they will have thirty days from the date of publication of the notice to submit any supplementary arguments and evidence that they may consider relevant. According to the United States, all three documents indicate that the Ministry and the Director of Economic Integration deemed the investigation to have commenced with the publication of the notice of initiation on 11 January 1996. Accordingly, there appears to be no actual dispute that, as Guatemala interpreted its own procedures, Guatemala failed to provide notice to Mexico before it initiated its investigation. The United States notes that the parties are in agreement that such a failure would violate Article 5.5. The Panel, thus, need not reach the question presented by Guatemala of whether, if a country issues a pre-initiation notice of intent to initiate an investigation, notices to affected exporting Members must precede such publication. Guatemala did not regard itself as following such procedure. 

5.47 With regard to Guatemala's arguments concerning harmless error, the United States recalls that Article 17.6 of the ADP Agreement provides that the ADP Agreement is to be interpreted "in accordance with customary rules of interpretation of public international law", a reference which has (in the context of DSU Article 3.2) been interpreted to refer to the Vienna Convention. Article 31.3 of the Vienna Convention provides that "[t]here shall be taken into account, together with the context: (c) any relevant rules of international law applicable in the relations between the parties." According to the United States, the most widely recognized list of the sources of the "rules of international law" is Article 38(1) of the Statute of the ICJ. Article 38(1) lists the sources of international law to be applied by the ICJ; one of the items on that list is "judicial decisions � as subsidiary means for the determination of rules of law." Such "judicial decisions" are generally recognized to include decisions of international arbitral tribunals, mixed claims tribunals and other tribunals which may have quite limited membership, as well as the decisions of the Court itself. ¹⁵⁷ Thus, the United States submits that decisions of NAFTA panels are not necessarily irrelevant to WTO panel proceedings simply because the NAFTA forum is one which only involves three of the Members of the WTO. The decision of a NAFTA panel may constitute a subsidiary means for the determination of the rules of international law which the NAFTA panel has interpreted or applied; it is for the Panel to evaluate whether the interpretation or application of international law by the NAFTA panel in question is relevant, useful or persuasive. For instance, since Article 301.1 of the NAFTA incorporates Article III of the GATT into the NAFTA, a NAFTA panel may interpret Article III, and a WTO panel could find that interpretation useful and relevant, just as WTO panels and the Appellate Body have found decisions of the ICJ useful and relevant. ¹⁵⁸

Continue on to V. Arguments Presented by Third Parties, Section 5.48

Notes:

142. United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India , WT/DS33/R, Report of the Panel, adopted 23 May 1997.

143. Ibid, para. 6.6.

144. United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, Report of the Appellate Body, pages 5-6, adopted 23 May 1997.

145. Ibid., page 7.

146. Ibid., page 22 (footnotes omitted).

147. According to the United States, at the actual consultations concerning a provisional anti-dumping measure specified in the complainant's consultation request, the respondent need only consult within the meaning of the DSU on claims in respect of actions that have occurred up to and including that provisional measure. Of course, that would not preclude the possibility of informal discussions between the parties on other aspects of mutual interest.

148. Article 7.1 provides the following:

"Provisional measures may be applied only if:
(1) an investigation has been initiated in accordance with the provisions of Article 5, a public notice has been given to that effect and interested parties have been given adequate opportunities to submit information and make comments;
(2) a preliminary determination has been made of dumping and consequent injury to a domestic industry; and
(3) the authorities concerned judge such measures necessary to prevent injury being caused during the investigation."

150. The United States suggests that the flaws in Mexico's approach are evident when exico states that Guatemala's preliminary determination is a measure which does not justify its imposition of anti-dumping duties. Id. Provisional measures can never justify the levying of anti-dumping duties. It is precisely for this reason that the ADP Agreement in conjunction with the DSU establishes a system that discourages Members from requesting panels prior to the imposition of final anti-dumping measures. Mexico's panel request and its first submission are carefully crafted so as not to take issue with Guatemala's final anti-dumping measure.

151. The United States recalls that Article 3.2 directs consideration to significant volume and price effects on the domestic industry, including whether there have been significant increases in import volume or significant price undercutting by dumped imports. Article 3.4 lists the following factors: "actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity, the magnitude of the dumping margin, factors affecting domestic prices, actual and negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital and investments."

152. According to the United States, the initiation requirements in Article 5 reflect a careful balancing of the interest of the domestic industry in the country of importation in securing the initiation of an anti-dumping investigation and the interest of the exporting country in avoiding the potentially burdensome consequences of an anti-dumping investigation initiated on an unmeritorious basis. The Panel in United States - Measures Affecting Softwood Lumber from Canada, BISD 40S/358, adopted 27 October 1993, para. 331, shared the same concerns and considered this delicate balance under comparable provisions of the Tokyo Round Subsidies Code. Precisely the same considerations are germane in the instant dispute and investigation.

153. BISD 40S/358, adopted 27 October 1993. According to the United States, while the panel's report analyzed the sufficiency of evidence for the initiation of a countervailing duty investigation, the aspects of the report pertinent to injury matters are equally applicable to anti-dumping investigations.

154. Ibid., para. 332.

155. Ibid., para. 335.

156. The United States notes Mexico's claims that the initiation violated the ADP Agreement because the application did not contain information pertinent to the threat of injury factors set forth in Article 3.7 and Guatemala's response that Article 5 "does not require that the application provide information on the four factors set forth in Article 3.7." The United States agrees that there is no specific reference in Article 5 to the factors enumerated in Article 3.7 regarding threat of injury. This is in contrast to the specific reference in Article 5.2(iv) to paragraphs 2 and 4 of Article 3. The United States does not understand Guatemala, however, to argue that no information regarding threat of injury was required from the applicant. Certainly neither Article 3 nor Article 5 support such an interpretation. Thus, for example, Article 3.2 is expressly referenced in Article 5.2. Article 3.2, in turn, elaborates on the consideration of possible volume and price effects associated with injury and the term "injury" is defined in Article 3, note 9, to include not only present injury, but threat of injury, as well as material retardation of the establishment of an industry. In a case such as this, where only threat of injury has been alleged, information regarding "threat" is unquestionably required for a sufficient application.

157. The United States notes that the decisions of the ICJ may involve only two States, and the ICJ has an extremely restrictive practice with respect to third party intervention.

158. The United States refers, for example, to the citations to ICJ cases at WT/DS8/AB/R pp. 10, 11, 12.