5.48 The United States notes that the particular NAFTA decision cited by Guatemala was the panel decision on Fresh-Cut Flowers from Mexico (File No. USA-95-1904-05). The panel in question was convened under Chapter 19 of NAFTA to review a United States anti-dumping review determination. Chapter 19 panels apply and interpret domestic law of the NAFTA Parties, not international law. NAFTA Chapter 19 provides that a Party may request that a panel review an anti-dumping or countervailing duty determination to determine whether the determination was in accordance with the anti-dumping or countervailing duty law of the importing Party. Such panels are required to apply the standard of review under the domestic law of the importing Party and the general legal principles that a court of the importing Party otherwise would apply to a review of a determination of the competent investigating authority. Thus, the panel in Fresh-Cut Flowers from Mexico was applying United States domestic anti-dumping law and the United States standard of review set out in section 516A(b) of the Tariff Act of 1930, as amended, as well as the rules of procedure applicable to Chapter 19 reviews and the underlying provisions of Chapter 19 itself. The United States submits that to the extent that a NAFTA Chapter 19 panel or domestic court has based its findings on rules that are relevant solely to domestic law, its findings are not relevant in a WTO context. However, if a Chapter 19 panel or a domestic court has interpreted or applied rules of law that are common to both domestic and international law, or has addressed the meaning of a rule of international law in evaluating the validity of a domestic determination, its findings could be relevant in a WTO context. 

5.49 The United States notes that the particular finding cited by Guatemala interpreted the Rules of Procedure for panels under Chapter 19. The Department of Commerce had missed the deadline for filing a notice of appearance (a normal prerequisite to participation in a Chapter 19 review). While expressing its displeasure, the panel in Fresh-Cut Flowers from Mexico decided to permit late filing of a notice by the Department under Rule 20 of the Rules of Procedure, which expressly permits a panel to extend any time period fixed in the Rules, if adherence to the time period would result in unfairness or prejudice to a participant or the breach of a general legal principle in the country in which the final determination was made. The panel then, in obiter dicta, proceeded to analogize to precedents in United States domestic law concerning "harmless error". ¹⁵⁹ According to the United States, this finding is of limited relevance to the issues which face the present Panel. The most apposite analogy to the situation cited in Fresh-Cut Flowers from Mexico would be if a party to a DSU dispute were to miss a filing deadline for a submission and the panel in that dispute were then to extend the deadline using its discretionary authority under DSU Article 12 and Appendix 3. That is not the situation presented in the Guatemalan anti-dumping investigation at issue in the present dispute. 

5.50 The United States is aware of two instances in which the concept of "harmless error" was raised by a party before a panel, Brazil - Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk from the European Economic Community (adopted) ¹⁶⁰ and United States - Anti-Dumping Duties on Gray Portland Cement and Cement Clinker from Mexico (unadopted) ¹⁶¹. The United States recalls that in neither of these disputes did the panel address the merits of the line of "harmless error" argumentation presented to it. In Brazil - Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk from the European Economic Community, the panel considered that the concept of harmless error " . . . was inapplicable under the circumstances of the case before it." ¹⁶² In United States - Anti-Dumping Duties on Gray Portland Cement and Cement Clinker from Mexico, the panel disposed of the dispute on other grounds. Thus, in neither of the cases in which "harmless error" arguments were presented to a panel did the panels in question squarely take up the issue. ¹⁶³

5.51 In the view of the United States, Mexico requests that the Panel adopt a standard of review for purposes of consideration of the preliminary injury determination by Guatemala that would require the Panel to impermissibly substitute its judgment for that of the investigating authority in Guatemala. Article 17.6 of the ADP Agreement unmistakably instructs panels to uphold factual decisions of an investigating authority when "the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion . . ." If such conditions are satisfied, the evaluation by the national investigating authority shall not be overturned, even though the panel might have reached a different conclusion. ¹⁶⁴ According to the United States, the limited scope of review contained in Article 17.6 (i) thus means that: (1) panels are not to reweigh the evidence; and (2) a decision that considers the required factors set forth in Articles 2 and 3 of the ADP Agreement, and otherwise rests on properly established facts, and an unbiased and objective evaluation, shall be left undisturbed by a reviewing panel. 

5.52 In the view of the United States, Guatemala's preliminary determination carefully discusses the relevant factors contained in Articles 3.4 and 3.7 of the ADP Agreement regarding threat of injury and identifies the basis for its conclusions respecting causation. ¹⁶⁵ This is all that the ADP Agreement requires when the facts on which the Authority relies have been properly established and the analysis of those facts was unbiased and objective. ¹⁶⁶ More specifically, the United States recalls that the Ministry cited several specific factors in its consideration of threat of injury in its preliminary determination, coincident with the imposition of the provisional measure. Guatemala relied on increased import volume, accumulated inventories, underutilized capacity, reduced domestic sale quantities and lower domestic sales prices, lost customers, and excess capacity and depressed demand in Mexico to support its preliminary affirmative determination of threat of injury. Each of the cited factors is set forth in either Article 3.4 or 3.7 as an appropriate element for consideration respecting threat of injury determinations. Thus, the United States considers it difficult to reconcile Mexico's assertions that Guatemala failed to give consideration to the factors in Articles 3.4 and 3.7 with the explicit discussion of these factors in the preliminary determination by Guatemala. Furthermore, while Guatemala's preliminary decision did not address all of the factors in Articles 3.4 and 3.7, the United States suggests that it was not necessary to do so. Neither of those Articles requires discussion of all of the listed factors in an injury or threat of injury determination. Moreover, the United States recalls that each Article also specifically includes the proviso that the lists are not exhaustive and no single factor or group of factors is decisive, recognizing the ability of national authorities to discern the relative importance of each factor in the particular circumstances of each investigation. 

5.53 In the view of the United States, Mexico has not made the requisite showing under the pertinent standard of review that the factual findings reached by Guatemala were either not properly established or were biased. Although Mexico alleges that the factual determinations in issue were biased and not impartial, no evidence has been provided to support such claims. Nor, according to the United States, is bias indicated by the manner in which the evidence was interpreted by the authorities in Guatemala. ¹⁶⁷ The factual evidence before the Guatemalan authorities is described at length in their preliminary determination and first submission to this Panel. A review of the first submission of Mexico on these threat of injury factors reveals that Mexico has only offered an alternative reading of the evidence or, in some cases, only suggested that an alternative reading might be possible, not that an alternative finding is necessitated by the factual record. Given this situation, the United States submits that there is no basis for the Panel to substitute its interpretation of the facts for those of the authorities in Guatemala, and to do so would contravene the clear standard of review adopted for anti-dumping cases in Article 17.6(i). Thus, it is evident that Mexico is actually asking this Panel to conduct a de novo examination and to reweigh the evidence respecting each factual finding by the Guatemalan authorities. Not only is the requested exercise unjustified given the Guatemalan authorities' express discussion of the applicable threat factors and causation, but it would substitute Mexico's suggested factual determinations for those of the Guatemalan investigating authorities, a process that would be unprecedented and in direct contravention of the standard of review established by Article 17.6(i). 

5.54 The United States notes Mexico's argument that the Ministry contravened Article 6.1 and Annex II, Paragraph 1, of the ADP Agreement by extending the period of investigation in its anti-dumping investigation from June 1995 through November 1995, inclusive, to include the additional period of December 1995 through May 1996. 

5.55 The United States recalls that Article 6 contains most of the ADP Agreement's provisions pertaining to the methodology for data collection by national investigating authorities and sets forth in considerable detail the procedural requirements that shall apply in the collection of information for purposes of determinations in anti-dumping investigations. These provisions include specific procedural protections for the parties participating in an investigation, such as minimum response times for information requests, and confidentiality safeguards for the information that interested parties submit. Article 6.1 provides that "[a]ll interested parties in an anti-dumping investigation shall be given notice of the information which the authorities require and ample opportunity to present in writing all evidence which they consider relevant . . . . " According to the United States, this paragraph does not specify when investigating authorities must provide such notice, nor does it preclude the investigating authorities from seeking additional information after any specific point in an investigation. Instead, Article 6.1.1 simply requires that "[e]xporters or foreign producers receiving questionnaires . . . shall be given at least 30 days for reply." Thus, the emphasis is on ensuring a reasonable amount of time for preparation of responses to any information requests, not on when questionnaires are distributed. The United States submits that Article 6 is entirely silent on the question of when information requests shall be sent during an investigation and whether supplemental questionnaires may be sent to foreign producers and exporters. In the absence of such restrictions either in Article 6 or the other articles of the ADP Agreement, investigating authorities may issue questionnaires as frequently as necessitated by the particular circumstances of an investigation to elicit information necessary for a determination. ¹⁶⁸ According to the United States, the ADP Agreement conditions the reasonable exercise of such investigative authority solely on an investigative authority's provision of a reasonable opportunity for respondents to answer the information requests. 

5.56 The United States submits that consideration of Paragraph 1, Annex II of the ADP Agreement, does not warrant a different result. This paragraph instructs investigating authorities to advise interested parties as soon as possible after the initiation of an investigation precisely what types of information will be required and how the information should be structured. In the opinion of the United States, by stating that such guidance will be provided as soon as possible, the paragraph anticipates that there will be circumstances in which an investigating authority will be unable to provide all of the precise specifications of the information to be required as soon as the investigation is initiated. According to the United States, the entire tenor of Annex II to the ADP Agreement in this regard is to ensure, to the greatest degree, that responding exporters or foreign producers possess advance notice of the information requirements, possess a reasonable opportunity to respond, and are able to submit information in a format and medium that is compatible with the resources available to them. The United States suggests that were Paragraph 1, Annex II, read to preclude an investigating authority from seeking additional information, including information respecting a more recent time period, it would undermine such other provisions of the ADP Agreement as Articles 7.4 and 9.1 (information necessary to determine whether a duty lower than the margin of dumping would be sufficient to remove injury) and Article 10.2 (post-provisional information necessary to determine effect of imports). The United States considers that the implementation of these provisions certainly would be more difficult, if not impossible, if the investigating authorities could not seek additional information to make those determinations. ¹⁶⁹ Furthermore, the ADP Agreement, particularly with respect to the subject of threat of injury, recognizes the importance of using as much current information as possible. ¹⁷⁰ The United States submits that an interpretation of Paragraph 1, Annex II, that makes it impossible for investigating authorities to collect current data would certainly be incompatible with the intent of the Agreement. ¹⁷¹

5.57 The United States recalls that Mexico also asserts that the Ministry of the Economy in Guatemala failed to use a technical accounting study provided to it by the Mexican exporter in lieu of verification. The United States does not concur with the Government of Mexico's argument that the Ministry was required to base its final determination, in whole or in part, upon unverified "technical accounting evidence" regarding the exporting company's normal value and export prices which was limited to the original period of investigation. Similarly, the United States does not concur with Mexico's view that the Guatemalan authorities violated the ADP Agreement when the Ministry of the Economy based its final determination upon the facts available pursuant to Article 6.8. Mexico's claims incorrectly ignore the exporting firm's failure to provide the investigating authority with timely and complete information regarding its sales during the extended period of investigation. According to the United States, reasonable extensions of the investigatory period are not contrary to the ADP Agreement, especially, where as here the exporting firm was given additional time to respond. 

5.58 The United States submits that the remaining disputes concerning the procedural aspects of the investigation involve questions of fact on which the United States is generally not in a position to comment given the limited documents available to it, but which obviously the Panel must resolve. Importantly, both Mexico and Guatemala acknowledge the legal requirements in the pertinent provisions that they have identified in Article 6, and Paragraphs 2 and 7 of Annex I of the ADP Agreement relating to these matters. Moreover, Mexico and Guatemala do not appear to have different interpretations of those procedural requirements. According to the United States, their dispute is confined to whether and when certain actions occurred and, therefore, in deciding these factual disputes it is unnecessary for this Panel to address the precise legal requirements imposed by the pertinent provisions of the Agreement that the parties have identified. The United States suggests that all that the Panel need decide is whether, based on the record, the rights provided by the ADP Agreement were accorded to Mexico. 

5.59 The United States submits that the specific remedies ¹⁷² of revocation and duty refunds requested by Mexico go far beyond the types of remedies recommended by the overwhelming preponderance of prior GATT 1947 and WTO panels. In virtually every case in which a panel has found a measure to be inconsistent with a GATT obligation, panels have issued the general recommendation that the country "bring its measures . . . into conformity with GATT." ¹⁷³ The United States submits that this is true not only for GATT disputes in general, but for disputes involving the imposition of anti-dumping or countervailing duty measures. ¹⁷⁴

5.60 The United States recalls that this well-established practice is codified in Article 19.1 of the DSU, which provides:

"Where a panel or the Appellate Body concludes that a measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the measure into conformity with that agreement." (footnotes omitted).

5.61 The United States submits that the requirement that panels make general recommendations reflects the purpose and role of dispute settlement in the WTO, and before it the GATT 1947. Article 3.4 of the DSU provides that "[r]ecommendations and rulings made by the DSB shall be aimed at achieving a satisfactory settlement of the matter," and Article 3.7 provides that "[a] solution mutually acceptable to the parties to a dispute . . . is clearly to be preferred." To this end, Article 11 of the DSU directs panels to "consult regularly with the parties to the dispute and give them adequate opportunity to develop a mutually satisfactory solution." Ideally, a mutually agreed solution will be achieved before a panel issues its report. However, if this does not occur, the United States submits that a general panel recommendation that directs a party to conform with its obligations still leaves parties with the necessary room to cooperate in arriving at a mutually agreed solution. ¹⁷⁶ Indeed, a Member generally has many options available to it to bring a measure into conformity with its WTO obligations. According to the United States a panel cannot and should not prejudge by its recommendation the solution to be arrived at by the parties to the dispute after the DSB adopts the panel's report. 

5.62 The United States notes in addition that the requirement that panels issue general recommendations comports with the nature of a panel's expertise, which lies in the interpretation of covered agreements. Panels generally lack expertise in the domestic law of a defending party. ¹⁷⁷ Thus, the United States argues that while it is appropriate for a panel to determine in a particular case that a Member's legislation was applied in a manner inconsistent with that country's obligations under a WTO agreement, it is not appropriate for a panel to dictate which of the available options a party must take to bring its actions into conformity with its international obligations. The compliance process under the DSU makes the precise manner of implementation a matter to be determined in the first instance by the Member concerned, subject to limited rights to compensation or retaliation by parties that have successfully invoked the dispute settlement procedures. The United States submits that in Article 19 of the DSU, the drafters precluded a panel from prejudging the outcome of this process in their recommendations. 

5.63 According to the United States, retroactive remedies, such as a duty refund, suffer from all of the defects described above regarding specific remedies. In addition, however, retroactive remedies are inconsistent with the established practice of panels of refraining from recommending remedies that attempt somehow to restore the status quo ante or otherwise compensate the prevailing party for WTO-inconsistent actions taken by the defending party. The United States suggests that this established practice was best demonstrated in Norway - Procurement of Toll Collection Equipment for the City of Trondheim. ¹⁷⁸ This case involved a procurement conducted by Norway for electronic toll collection equipment for the city of Trondheim. The United States alleged that Norway had violated its obligations under the Tokyo Round Agreement on Government Procurement, and the panel agreed. However, the United States also requested that the panel recommend that Norway bring its practices into compliance with regard to the Trondheim procurement itself, a transaction completed prior to the panel ruling. In other words, the United States requested a retroactive remedy. The panel's rejection of the United States' request was unequivocal:

"[T]he Panel noted that all the acts of non-compliance alleged by the United States were acts that had taken place in the past. The only way mentioned during the Panel's proceedings that Norway could bring the Trondheim procurement into line with its obligations under the Agreement would be by annulling the contract and recommencing the procurement process. The Panel did not consider it appropriate to make such a recommendation. Recommendations of this nature had not been within customary practice in dispute settlement under the GATT system and the drafters of the Agreement on Government Procurement had not made specific provision that such recommendations be within the task assigned to panels under standard terms of reference." ¹⁷⁹

In addition, the panel stated that: 

"[U]nder the GATT, it was customary for panels to make findings regarding conformity with the General Agreement and to recommend that any measures found inconsistent with the General Agreement be terminated or brought into conformity from the time that the recommendation was adopted." ¹⁸⁰

5.65 According to the United States, panels have recommended specific and/or retroactive remedies in only three adopted panel reports, all involving anti-dumping or countervailing duties. However, these cases constitute aberrations from established GATT 1947 practice, as described above and as now codified in Article 19.1 of the DSU. Moreover, the reports in these cases offer no explanation as to why remedies recommended in anti-dumping and countervailing duty disputes should be different from those recommended in other types of disputes, and, in fact, the DSU itself indicates that remedies in anti-dumping and countervailing duty disputes should be no different from those recommended in other types of disputes. The United States submits that, essentially, these reports are the "exceptions that prove the rule," and this Panel should refrain from following them. ¹⁸²

5.66 The United States submits that the WTO established an integrated dispute settlement system through the DSU, which applies to all covered agreements. ¹⁸³ However, where appropriate, the negotiators included in certain covered agreements special or additional rules and procedures on dispute settlement. ¹⁸⁴ To the extent there is a difference between the rules and procedures of the DSU and the "special or additional" rules and procedures in Appendix 2, the latter are to prevail. ¹⁸⁵ Significantly for the United States, several of these special or additional rules relate to the types of recommendations that a panel or other body may recommend. For example, Article 4.7 of the SCM Agreement provides that in a dispute involving a prohibited subsidy, "the panel shall recommend that the subsidizing Member withdraw the subsidy without delay. In this regard, the Panel shall specify in its recommendation the time period within which the measure must be withdrawn." ¹⁸⁶ Article XIII:3 of the General Agreement on Trade in Services provides: "If the measure is determined by the DSB to have nullified or impaired such a benefit, the Member affected shall be entitled to a mutually satisfactory adjustment on the basis of paragraph 2 of Article XXI, which may include the modification or withdrawal of the measure." According to the United States, the DSU itself indicates that where the drafters intended a departure from the standard remedy provided for in Article 19.1, they expressed this intent clearly. Thus, Article 26.1(a) of the DSU provides that if a panel or the Appellate Body should find non-violation nullification or impairment under Article XXIII:1(b) of GATT 1994, "the panel or the Appellate Body shall recommend that the Member concerned make a mutually satisfactory adjustment." 

5.67 The United States suggests that these various provisions demonstrate that when the Uruguay Round negotiators wanted to clarify or elaborate on the types of remedies that a panel should recommend or to which a prevailing party should be entitled, they drafted a special or additional rule or otherwise expressly stated their intent. However, notwithstanding the fact that both the ADP Agreement and the SCM Agreement contain special or additional dispute settlement rules, ¹⁸⁷ the negotiators did not provide special or additional rules regarding the remedies to be recommended in anti-dumping or countervailing duty disputes. The United States submits that there can be no clearer indication that, in so far as remedies are concerned, the drafters did not intend that anti-dumping and countervailing duty disputes be treated differently from other types of disputes. Put differently, the drafters intended that Article 19.1 of the DSU apply to anti-dumping and countervailing duty disputes, and that panels refrain from recommending specific, retroactive remedies in such disputes. 

5.68 The United States submits that the DSU is dispositive of the question as to whether there should be an exception in anti-dumping and countervailing duty disputes in favour of specific or retroactive remedies. However, even if arguendo the DSU were not dispositive of this issue, the fact remains that under the pre-WTO regime, there was no consensus that retroactive remedies were appropriate in anti-dumping and countervailing duty disputes. To the contrary, the United States suggests that the issue of remedies was an extremely contentious one. The first adopted panel report to contain a specific and retroactive remedy recommendation was New Zealand - Imports of Electrical Transformers from Finland. ¹⁸⁸ In that case, the panel, as an afterthought, recommended that New Zealand revoke the anti-dumping determination in question and reimburse any anti-dumping duties paid. ¹⁸⁹ The panel offered no explanation, legal justification or discussion regarding this radical departure from established GATT practice. Indeed, according to the panel report, the complaining party had not in fact requested this remedy and the parties had not presented any arguments in this connection. Instead, the United States considers that this unprecedented remedy appears to have been an independent, and unjustified, initiative on the part of the panel. The next adopted panel report containing a specific and retroactive remedy recommendation was United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada, in which the panel recommended that the United States reimburse countervailing duties either in whole or in part. ¹⁹⁰ However, the only justifications offered by the panel for its recommendation were a citation to New Zealand - Imports of Electrical Transformers from Finland ¹⁹¹ (which, as discussed, itself provided no legal justification) and a citation to an unadopted panel report. The final adopted panel report was United States - Measures Affecting Imports of Softwood Lumber from Canada. ¹⁹³ That case involved, in part, the imposition by the United States of interim measures under section 304 of the Trade Act of 1974 in connection with a countervailing duty investigation on softwood lumber from Canada. The panel concluded that the interim measures were not justified under the Tokyo Round Subsidies Code, and recommended that the United States terminate the measures and refund any cash deposits collected. However, the United States recalls that in justifying its recommendation of a specific and retroactive remedy, the panel merely cited to New Zealand - Imports of Electrical Transformers from Finland ¹⁹⁴ (which itself contained no justification) and United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada ¹⁹⁵ (which simply cited New Zealand - Imports of Electrical Transformers from Finland). 

5.69 The United States notes that while three adopted panel reports involving anti-dumping or countervailing duties contain specific and retroactive remedy recommendations, none of these reports contains any justification (let alone a persuasive justification) for remedies that were so at odds with established GATT 1947, and now WTO, practice. Moreover, the United States submits that this Panel should not attribute significance to the fact that the reports were adopted. ¹⁹⁶ In the case of New Zealand - Imports of Electrical Transformers from Finland ¹⁹⁷, the minutes of the GATT Council meeting at which the report was adopted make clear that the United States and other countries simply did not focus on the nature of the remedy that the Panel had proposed. ¹⁹⁸ In the case of United States-Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada ¹⁹⁹, the United States made clear that it objected to the recommended remedy, and that it agreed to adoption only because United States courts already had overturned the countervailing duty order on pork and duties would be refunded in any event pursuant to domestic procedures. Therefore, as far as the United States was concerned, the case was moot, and there were no recommendations to be implemented by the United States. ²⁰⁰ Finally, in United States - Measures Affecting Imports of Softwood Lumber from Canada ²⁰¹, the United States agreed to adoption only because of the unusual circumstances presented by the case. The United States made clear that it did not accept the panel's recommended remedy, and that it did not view the panel's recommendation as having any precedential value. ²⁰²  Indeed, according to the United States, the history of unadopted panel reports recommending specific and retroactive remedies demonstrates that there was no consensus under the GATT 1947 that such remedies were ever appropriate. In this regard, the United States contends that the leading case is United States - Imposition of Anti-Dumping Duties on Imports of Seamless Stainless Steel Hollow Products from Sweden, in which the panel recommended that an anti-dumping order be revoked and anti-dumping duties refunded. ²⁰³ In this case, the United States indicated before the Tokyo Round Committee on Anti-Dumping Practices that it could not agree to the adoption of the report solely because of the specific and retroactive nature of the remedy recommended by the panel. ²⁰⁴ Moreover, the United States was not alone in objecting to the remedy put forward by the panel. The representative of the EEC stated "that the remedy suggested by the panel went too far." ²⁰⁵ In a similar vein, the representative of Australia stated that "[i]f one applied the reasoning behind the suggestion made in United States - Imposition of Anti-Dumping Duties on Imports of Seamless Stainless Steel Hollow Products from Sweden more widely, the implications would be quite considerable," and that adoption of the panel report would "not necessarily imply acceptance of [the panel's] suggestion either in the current case or as a principle to be applied in future cases." ²⁰⁶

Continue on to V. Arguments Presented by Third Parties, Section 5.70

Notes:

159. Panel decision of Dec. 16, 1996 on "In the Matter of Fresh-Cut Flowers from Mexico: Final Results of Anti-Dumping Duty Administrative Review", Secretariat File No. USA-95-1904-05, pp. 31-40.

160. Brazil - Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk from the European Economic Community, SCM/179, paras. 41-43 and para. 204, adopted 27 December 1993.

161. United States - Anti-Dumping Duties on Grey Portland Cement and Cement Clinker from Mexico, ADP/82, para. 3.5.2, not adopted, dated 7 September 1992.

162. Brazil - Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk from the European Economic Community, SCM/179, para. 271, adopted 27 December 1993.

163. According to the United States, had these panels addressed the "harmless error" arguments, the Appellate Body's findings in Japan - Taxes on Alcoholic Beverages, Report of the Appellate Body, WT/DS8/AB/R, pages 14-15, adopted 4 October 1996, regarding the relevance of GATT/WTO panel reports would have been important for the Panel's consideration here.

164. According to the United States, the panel in Korea - Anti-dumping Duties on Imports of Polyacetal Resins from the United States, BISD 40S/205, para. 227, adopted 27 April 1993, reached precisely this conclusion. That panel stated that:

"The Panel considered that a review of whether the KTC's determination was based on positive evidence did not mean that the Panel should substitute its own judgment for that of the KTC as to the relative weight to be accorded to the facts before the KTC. To do so would ignore that the task of the Panel was not to make its own independent evaluation of the facts before the KTC to determine whether there was material injury to the industry in Korea but to review the determination as made by the KTC for consistency with the Agreement, bearing in mind that in a given case reasonable minds could differ as to the significance to be attached to certain facts. The Panel considered that a proper review of the KTC's determination against requirement of positive evidence under Article 3:1 meant that it should examine whether the factual basis of the findings articulated in the determination was discernible from the text of the determination and reasonably supported those findings."

165. The United States notes that, in its first submission, Mexico concedes that: "[t]he Ministry concluded that there was a threat of injury, on the basis of the following factors: increased imports, accumulation of inventories and under-utilization of plant capacity, contracting sales, falling prices of domestic product, loss of clients and excess plant capacity in export companies and the situation of demand on the Mexican Market." Mexico, thus, apparently is not alleging that the Guatemalan authorities failed to consider the necessary factors, but that it evaluated such factors in an erroneous fashion.

166. The United States notes that in United States - Woven Wool Shirts and Blouses from India, WT/DS/33R, Report of the Panel, adopted 23 May 1997, para. 7.21, the panel declared, in a dispute settlement involving an agreement that does not contain a special standard of review, that: "DSU panels do not reinvestigate the market situation but rather limit themselves to the evidence used by the importing Member in making its determination to impose the measure."

167. In EC - Imposition of Anti-Dumping Duties on Imports of Cotton Yarn from Brazil, ADP/137, Report of the Panel, paras. 512-513, adopted 30 October 1995, the panel determined that where an investigating authority had two sets of inconsistent data before it, neither of which was necessarily more accurate than the other, the authorities' decision to base its determination on one set of data as opposed to the other did not indicate bias or lack of objectivity. In the view of the United States, a party attempting to prove that an investigating authority's determination is not "unbiased" within the meaning of Article 17.6(i) of the ADP Agreement must present positive evidence that the decision was influenced by bias or prejudice; mere allegations and conjecture cannot possibly satisfy the challenging party's burden on this issue.

168. The United States notes that, in the conduct of anti-dumping investigations, investigating authorities are routinely confronted with complex factual situations. It would be impossible to state with complete confidence at the outset of an investigation precisely all of the information that will be necessary to reach a final determination. That would presume a level of prescience that neither the investigating authorities nor the parties themselves can legitimately claim.

169. The United States recalls that Article 76 of Mexico's Regulations under the Foreign Trade Act passed on 27 July 1993 provides SECOFI with similar authority:

171. Alternatively, if the ADP Agreement were interpreted as allowing authorities to make only a single request for information, the United States suggests that authorities would make unduly broad requests for information. Such a result could not be in anyone's interests.

172. By "specific" remedy, the United States means a remedy that requires a party to take a particular, specific action in order to cure a WTO-inconsistency found by a panel. By "retroactive" remedy, the United States means a remedy that requires a party to take a particular, specific action relating to transactions that occurred prior to the adoption of a panel report. In other words, retroactive remedies are a subset of specific remedies.

In the context of this case, revocation would be a specific, but not a retroactive, remedy, because a revocation would apply prospectively to future imports. A duty refund, on the other hand, would be both a specific and a retroactive remedy, because it would apply to imports that occurred prior to the adoption of a panel report.

173. The United States refers, for example, to Canada - Measures Affecting Exports of Unprocessed Herring and Salmon, BISD 35S/98, 115, para. 5.1, adopted 22 March 1988. The United States avoids a lengthy citation of all other panel reports in which panels have made recommendations using similar language; the number of such reports is well in excess of 100.

174. The United States refers, for example, to Canadian Countervailing Duties on Grain Corn from the United States, BISD 39S/411, 432, para. 6.2, adopted 28 April 1992; Korea - Anti-Dumping Duties on Imports of Polyacetal Resins from the United States, ADP/92, adopted 2 April 1993, para. 302.

175. The United States recalls that in its report on United States - Standards for Reformulated and Conventional Gasoline, adopted 20 May 1996, WT/DS2/AB/R, the Appellate Body recommended "that the Dispute Settlement Body request the United States to bring the baseline establishment rules contained in Part 80 of Title 40 of the Code of Federal Regulations into conformity with its obligations under the General Agreement." The panel in that case issued a virtually identical recommendation. WT/DS2/R, adopted 20 May 1996, para 8.2.

The United States argues that even more noteworthy is Japan - Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, p. 34, in which the Appellate Body recommended "that the Dispute Settlement Body request Japan to bring the Liquor Tax Law into conformity with its obligations under the General Agreement on Tariffs and Trade 1994." Significantly, in that case, which involved the imposition of a tax that discriminated against imported alcoholic beverages, the Appellate Body did not recommend that Japan refund all of the taxes that it had collected in violation of its GATT 1994 obligations.

176. The United States refers to a statement by Prof. Jackson:

"One of the basic objectives of any dispute procedure in GATT has been the effective resolution of the dispute rather than "punishment" or imposing a "sanction" or obtaining "compensation." This objective has been recognized explicitly by GATT committees. The prime objective has been stated to be the "withdrawal" of a measure inconsistent with the General Agreement. "

John H. Jackson, World Trade and the Law of the GATT 184 (1969) (citations omitted).

177. The United States recalls that Article 8.3 of the DSU provides that citizens of Members whose governments are parties to a dispute normally shall not serve on a panel concerned with that dispute, absent agreement by the parties.

178. Norway - Procurement of Toll Collection Equipment for the City of Trondheim, GPR/DS2/R, adopted 13 May 1992.

179. Ibid., para. 4.17.

180. Ibid., para. 4.21 (emphasis added).

181. The United States refers, for example, to United States - US Taxes on Petroleum and Certain Imported Substances, BISD 34S/136, at para. 5.1.9., adopted 17 June 1987.

182. According to the United States, GATT panel reports are not stare decisis, panels do not legislate, and one panel is not bound by the reasoning of another. These points were underscored in Japan - Taxes on Alcoholic Beverages, WT/DS/8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, report of the Appellate Body, adopted 1 November 1996, p. 15, where the Appellate Body stated that panel reports "are not binding, except with respect to resolving the particular dispute between the parties to that dispute. In short, their character and their legal status have not been changed by the coming into force of the WTO Agreement." (Footnote omitted).

183. The United States refers to Article 1.1, DSU.

184. The United States refers to Article 1.2, DSU. These special or additional rules are listed in Appendix 2 to the DSU.

185. Ibid.

186. Similarly, the United States recalls that Article 7.8 of the SCM Agreement provides: "[w]here a panel report or an Appellate Body report is adopted in which it is determined that any subsidy has resulted in adverse effects to the interests of another Member within the meaning of Article 5, the Member granting or maintaining such subsidy shall take appropriate steps to remove the adverse effects or shall withdraw the subsidy" (emphasis added). Although not couched in terms of panel recommendations, Article 7.8 clearly deals with the question of remedies.

187. The United States refers to Annex 2, DSU.

188. New Zealand - Imports of Electrical Transformers from Finland, BISD 32S/55, adopted 18 July 1985. The United States notes that this is the only authority that Mexico cites in support of its request for the revocation and refund of anti-dumping duties.

189. Ibid., BISD 32S/70, para. 4:11.

190. United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada, BISD 38S/30, paras. 4.11, 5.2, adopted 11 July 1991.

191. New Zealand - Imports of Electrical Transformers from Finland, BISD 32S/55, adopted 18 July 1985.

192. The United States notes that the unadopted report in question was Canada - Imposition of Countervailing Duties on Imports of Manufactured Beef from the EEC, SCM/85, issued on 13 October 1987, which also contained no explanation for recommending a refund of countervailing duties.

193. United States - Measures Affecting Imports of Softwood Lumber from Canada, BISD 40S/358, adopted 27-28 October 1993.

194. New Zealand - Imports of Electrical Transformers from Finland, BISD 32S/55, adopted 18 July 1985.

195. United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada, BISD 38S/30, adopted 11 July 1991.

196. The United States suggests that adopted panel reports are not binding on subsequent panels.

197. New Zealand - Imports of Electrical Transformers from Finland, BISD 32S/55, adopted 18 July 1985.

198. The United States refers to C/M/191, p. 34-35.

199. United States - Countervailing Duties on Fresh, Chilled and Frozen Pork from Canada, BISD 38S/30, adopted 11 July 1991.

200. The United States refers to C/M/251, p. 15-16.

201. United States - Measures Affecting Imports of Softwood Lumber from Canada, BISD 40S/358, adopted 27?28 October 1993.

202. The United States refers to SCM/M/67, para. 163. According to the United States, Australia stated that it had "strong reservations about the Panel's recommendation on remedies" and "also did not regard it as being of precedential value." Ibid., para. 166.

203. United States - Imposition of Anti-Dumping Duties on Imports of Seamless Stainless Steel Hollow Products from Sweden, ADP/47, issued 20 August 1990 (unadopted). The United States suggests that, in this case, too, the panel offered no justification for its recommendation other than a reference to New Zealand - Imports of Electrical Transformers from Finland.

204. The United States refers to "Minutes of the Meeting Held on 30 April 1991," ADP/M/32 (28 June 1991), para. 105.

205. Ibid., para. 110.

206. Ibid., para. 113.