The investigation by SECOFI of injury attributable to imports of rolled steel plate from Canada was based on the assumption that all such imports, with the exception of those shipped by ALGOMA to AHMSA, were dumped ¹³⁵ and, when accumulated with imports from other sources, were determined to be injurious to domestic producers. It is important to note that this investigation was concerned with actual injury caused by imports during the investigation period, i.e., 1992, and not a threat of injury. ¹³⁶

In making its determination, SECOFI proceeded on what it considered to be the best information available. This approach was adopted since the Complainants ALGOMA, STELCO and DOFASCO had not responded to the questionnaires, or provided any other relevant information, and because the information that had been received from TITAN was not taken into account. SECOFI decided that the margin for this "trading company" must be the same as that estimated for the producer of the goods. ¹³⁷ In fact, the data used to support the decision on price discrimination against Canadian producers was obtained from the domestic industry. ¹³⁸

In their brief, and at the public hearing, the Complainants argued, among other things, that SECOFI mistakenly assessed the relationship between TITAN and DOFASCO, did not adequately assess the similarity of the imported and domestic products, and omitted to take into account in their injury evaluations the increases in installed capacity and production of rolled steel plate by domestic producers, the effects of the devaluation of the peso exchange rate in 1994, the investment activities of the domestic producers, and certain developments in the domestic economy after the period of investigation.

The Panel has reviewed each of these allegations and SECOFI’s responses to them.

The Panel concurs with the view of SECOFI that the peso devaluation and the economic situation that prevailed subsequent to 1992 are not relevant to the injury decision taken in this instance. Under the law, discretion is provided to SECOFI to decide in any particular case if the facts warrant a determination of injury alone, or whether it should also include the "threat of injury". As indicated above, the decision in this case related to actual injury not a threat of injury and, as such, the injury assessment due to the dumped imports must be limited to the period of investigation, i.e., 1992.

At paragraphs 509 and 510 of the Final Determination, it is noted that more than 50% of the rolled steel plate imports from Canada were purchased by firms who were direct clients of the domestic industry. Based on this data and an examination of the tariff classifications applied to the imported goods, it was concluded by SECOFI that the imported product was similar to the domestic product, and that it was marketed through the same channels of distribution. Further, at paragraph 533, it is stated that during the 10 months of 1992, imports from Canada increased 13%, amounting to 14% of total imports and 4% of the apparent domestic consumption. As a result, SECOFI in accordance with Article 67 of the Foreign Trade Regulations determined that imports originating in Canada were significant during this period, and that they should be accumulated with imports of similar products from Brazil, USA and Venezuela for the purposes of assessing injury. ¹³⁹

Paragraphs 549 to 627 of the Final Determination provide a detailed report on the factors taken into account by SECOFI in its decision on injury. In this regard, the Panel notes that the issues of domestic production, installed capacity and inventories, employment, profits, prices together with other relevant factors were all examined by SECOFI in the process of making the Final Determination. Further, it is noted that SECOFI in its written response to the Complainants’ brief and orally at the public hearing addressed each of the points raised by the Complainants, arguing that its analysis took these points into account.

The Panel notes that the law and the regulations requires that a decision on injury must be based on an examination of the impact of a variety of factors on domestic production and, in this context, the significant requirement is that the investigating authorities evaluate all of the relevant factors. As a result of its analysis, SECOFI concluded that imports originating in the four countries caused damage to domestic production of rolled steel plate due to a considerable growth of dumped imports, in both absolute and relative terms, and substantially lower import prices than domestic prices which, in turn, caused a decrease in domestic price levels, a loss of clients and domestic industry´s participation in the market, and adverse effects on domestic industry production, income, profits and inventories during the investigation period. ¹⁴⁰

In the Panel’s view, SECOFI complied with the provisions of Article 39 of the LCE in concluding that injury was caused to domestic production due to the accumulated imports carried out under conditions of price discrimination.

The main outstanding issue raised by the Complainants in this context which, in the Panel’s view, has a direct bearing on the injury decision against Canadian exporters, relates to the position of TITAN, and the admission by SECOFI that it erred in not establishing a specific margin of price discrimination for this firm.

In this connection, the Panel sought clarification at various points in the public hearing in relation to the statistics covering imports from Canada during the investigation period. Faced with incomplete statistical data, the Panel undertook a careful examination of the figures included in the administrative record. Based on this analysis, the Panel has concluded the following:

1. There is no information in the administrative record to indicate that ALGOMA, STELCO or DOFASCO exported rolled steel plate directly to Mexico in 1992.
2. The Commercial Information System indicates that steel plate imports from Canada in 1992 amounted to approximately 14,400 tons of which 711 tons were imported by AHMSA from ALGOMA.
3. An examination of the actual invoices covering TITAN’s shipments to Mexico in 1992 revealed an amazing coincidence of volumes between its shipments and those attributed by SECOFI to Canada as a whole. Indeed, based on the administrative record, the Panel has concluded that the total volume of imports claimed by SECOFI as originating in Canada could only have been exported by Titan and not other Canadian suppliers.
4. Some of the Titan invoices clearly indicate that some of the goods shipped were "seconds" rather than first quality goods.

Accordingly, as the Panel’s examination of the administrative record indicates that the only supplier of rolled steel plate from Canada to Mexico in 1992 was TITAN, a new decision by SECOFI relating to the margin of price discrimination, if any, for TITAN may also result in a major change in the Final Determination as it relates to injury and the margin, if any, appropriate for other potential Canadian suppliers.

In this regard, it is relevant to note that a dumping/injury determination can only be made against goods which are, in fact, found to be dumped. All other imports must be ignored by the authorities in assessing this crucial causal relationship. Thus, the existence of dumping, the dumping margins involved, and the volume of dumped imports are inextricably linked in all injury determinations. In this case, SECOFI admitted an error in not establishing a price discrimination margin for TITAN in the Final Determination. Whatever margin is established for this firm must, of course, be based on the administrative record and, at this stage, the Panel has no way of knowing whether all or any of the imports from TITAN were, in fact, dumped. Some of these goods may not have been dumped, some may only have a de minimis margin, and others may require differentiated treatment because they were second quality goods. By extension, the volume of dumped goods from TITAN that was factored by SECOFI into its decisions relating to accumulation, whether the imports from Canada were significant, and the injury determination per se may well have been incorrect.

This situation is further compounded by the fact that the Panel’s review of the administrative record confirms that subject goods from Canada were only supplied by TITAN during 1992. Counsel at the public hearing implied that other Canadian producers also shipped product to Mexico during the period of investigation ¹⁴¹ and, as a result, a country-wide margin of price discrimination was established at 31.08%. Given that only exports from TITAN were involved, and as SECOFI did not establish acceptable volume and value calculations for this firm, it appears to the Panel that all calculations relating to imports of rolled steel plate from Canada are also suspect.

In the circumstances, it is the view of the Panel that any new price discrimination margin decision relating to TITAN must clearly indicate the precise volume of TITAN’s exports that were dumped in 1992, the volume of seconds involved, and the dumping margins, if any, applicable to both. Once this determination has been made, SECOFI must proceed to factor this new data into its decision as to whether the dumped imports continue to be "significant", and whether their accumulation with imports from other sources continues to be appropriate for the purpose of determining injury. Further, since TITAN was the sole supplier of these goods to Mexico in 1992, and since its margin must be recalculated, it seems obvious that the need for a country-wide determination, and the level of the margin of price discrimination appropriate to other Canadian exporters, should be reassessed.

It will be apparent from the foregoing that, in the Panel’s view, all aspects of injury during the period of investigation are open to question given the Investigating Authority’s request for a remand to determine a margin for TITAN.

1. The Request for a Remand by the Investigating Authority

With regard to the request for a remand by the Investigating Authority, the Panel notes the following:

1. The Investigating Authority in its Final Determination dated December 19, 1995, declined to establish a specific price discrimination margin for the complainant TITAN, arguing that it played a similar role to the sales department of the producer of the goods.
2. TITAN and the other three Complainants (ALGOMA, DOFASCO and STELCO each timely filed on December 28, 1995, a complaint under Rules 35 and 39 of the Rules of Procedure alleging errors of fact and law by the Investigating Authority in failing to establish a specific antidumping margin for TITAN.
3. The Complainants timely filed on May 28, 1996, a joint brief with grounds and arguments supporting the allegations in their complaints. The issue regarding the relationship between TITAN and DOFASCO was stated as follows:

"4. RELATIONSHIP BETWEEN DOFASCO AND TITAN

SECOFI mistakenly understood the facts. Since the answer to the Initial Determination filed on January 11, 1994 TITAN proved that it was a corporation incorporated in the USA and that it was independent from DOFASCO. Therefore, TITAN answered in time the questionnaire and argued (and proved) that the reconstructed value principle that respondents requested to be applied was not right, due to the provision of Article 32 of the law. All TITAN's operations were done so to "allow it to cover the cost of production and general expenses incurred during the normal course of business". Based on the above, normal value of TITAN's operations must had been determined based on the second paragraph of Article 31 of the Law, as requested by TITAN in its answer to the Initial Determination". ¹⁴²

4. SECOFI, in its brief timely filed on July 26, 1996, in reply, accepted as an issue its failure to determine a specific price discrimination (antidumping) margin for TITAN and stated:

"On the other hand, the Investigating Authority admits that it erred in the Final Determination by not assessing TITAN with a specific antidumping duty. Therefore, it respectfully requested that the Panel remand the administrative file according to Article 1904.8 of NAFTA [...] in order to analyze the information contained within the administrative file, and in due course, to determine a specific antidumping duty for TITAN". ¹⁴³

5. SECOFI also requested the following in concluding its Brief

"PART V. POINTS OF REQUEST:

[...] FIFTH. - To remand the Final Determination to the Investigating Authority in order to proceed to assess the information and evidence in the administrative file, and to determine a specific antidumping duty for TITAN.

SIXTH. - In accordance with Article 1904.8 NAFTA to uphold all other points of the Final Determination for imports of rolled plate from Canada". ¹⁴⁴

With respect to the above two points of the Request, the Panel notes that the purpose of the Rules is to secure the just, speedy and inexpensive review of Final Determinations in accordance with the objectives and provisions of Article 1904. Since July 26, 1996, SECOFI has wished to correct the Final Determination as it relates to TITAN. However, it has not told the Panel or the Complainants what its mistake was, how it would correct that mistake, and what effect the correction would have. Nevertheless, it asks that the Panel uphold all other points of the Final Determination. It would thus be allowed to change the Final Determination but leave the Complainants with no real right of reply. This would amount to a denial of due process, a fundamental rule of procedure. The Panel cannot agree to grant a remand on these terms.

Moreover, the administrative record to which SECOFI refers is defined in Article 1911 as follows:

"Article 1911. Definitions

For the Purposes of this Chapter:

administrative record means, unless otherwise agreed by the Parties and the other persons appearing before a Panel:

1. all documentary or other information presented to or obtained by the competent investigating authority in the course of the administrative proceeding, including any governmental memoranda pertaining to the case, and including any record of ex parte meetings as may be required to be kept;
2. a copy of the Final Determination of the competent investigating authority, including reasons for the determination;
3. all transcripts or record of conferences of hearings before the competent investigating authority; and
4. all notifications published in the official journal of the importing Party in connection with the administrative proceeding;"

Therefore, the administrative record is widely defined to include documents or other information from the public domain (non-confidential), documents or other information of a proprietary character (confidential), documents or other information that are privileged (privileged), and sources of which a complainant has no knowledge.

SECOFI may consult all four of these components of the administrative record in correcting its mistake. Equality of treatment entitles the Complainants to access the same sources of information.

VII. ORDER OF THE PANEL

In view of the foregoing and pursuant to the NAFTA Article 1904(8), the Final Determination is hereby remanded for action by the Investigating Authority so that it may issue a new Final Determination, within 60 days from the notification of this Order, not incompatible with the following:

1. REGARDING TITAN

In making a new Final Determination, the Investigating Authority shall:

1. Establish, based solely on the information contained in the administrative record, whether Titan was the only exporter of Canadian made rolled steel "plate" to Mexico in 1992;
2. Establish definitively the volume of rolled steel plate exports attributable to TITAN during 1992 and indicate how much, if any, were second quality goods;
3. Assess, based on the analysis resulting from (A) and (B), whether the total import from Titan were significant for the purposes of accumulation in accordance with paragraph 2 of Article 67 of the Foreign Trade Law Regulations;
4. Evaluate, based on the results of the foregoing and the administrative record including any accumulation considerations involved, the injurious impact of TITAN’s 1992 exports from Canada on producers in Mexico; and,
5. Substantiate the conclusions respecting points (A) to (D) through the identification of the relevant supporting evidence in the administrative record.

Consistent with the request received from the Investigating Authority in its brief dated July 26, 1996, the Panel remands the Final Determination to enable the Investigating Authority to assess the information and evidence in the administrative record and, taking into account the results of its examination of the points raised in points A) to E) above, to establish, if appropriate, a specific margin of price discrimination in respect of imports from TITAN.

2. REGARDING CANADIAN EXPORTERS OTHER THAN TITAN

As indicated above, except for the specific shipment of steel plate from ALGOMA to AHMSA, the Panel could find no evidence in the administrative record of exports of rolled steel plate to Mexico from these producers, or any other Canadian producers during 1992. All the evidence indicates that TITAN was the sole supplier of these goods to Mexico during the period of investigation. Accordingly, we order that the countrywide price discrimination margins against Canadian producers must be reassessed.

3. REGARDING THE COMPLAINANTS

If the Investigating Authority supplements the administrative record on remand and the Complainants’ wish to challenge the Determination on remand, pursuant to Rule 73(2)(b) of the Rules of Procedure, the Complainants may do so without re-opening their case, and by filing a written submission in accordance with Rule 73(2)(b), and for this purpose may have access to the confidential record. The Panel’s Order of May 21, 1997, is amended accordingly.

Issued on December 17, 1997.

Signed in the original by:

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¹³⁵ Mr. Uruchurtu, p. 66, Transcript of Public Hearing, English version.

¹³⁶ Mr Uruchurtu, p. 84, Transcript of Public Hearing, English version

¹³⁷ paragraph 110, Final Determination.

¹³⁸ paragraph 114, Final Determination and Mr Uruchurtu, p. 67 Transcript of Public Hearing, English version.

¹³⁹ Paragraphs 534 and 543, Final Determination

¹⁴⁰ Paragraph 633, Final Determination

¹⁴¹ P. 152, Transcript of Public Hearing, English version

¹⁴² See: Complainants’ Brief of May 28, 1996, Spanish version, p. 25.

¹⁴³ See: the Investigating Authority’s Brief of July 26, 1996, pp. 86-87.

¹⁴⁴ Ibid., p. 172.