WT/DS331/R
Page D-1
ANNEX D
ORAL STATEMENTS OF THE PARTIES
FIRST AND SECOND PANEL MEETINGS
Annex D-1Executive Summary of the Oral Statement of Guatemala – First Meeting – 20 September 2006 / D-2
Annex D-2Executive Summary of the Oral Statement of Mexico – First Meeting – 12 and 13 September 2006 / D-6
Annex D-3Oral Statement of Guatemala – Second Meeting – 7November2006 / D-13
Annex D-4Oral Statement of Mexico – Second Meeting – 7November 2006 / D-18
Annex D-5Closing Statement of Guatemala – Second Meeting – 9November2006 / D-31
ANNEX d-1
ORAL SUBMISSION BY GUATEMALA
(20 September 2006)
Initiation of the investigation
1.Mexico is wrong in stating that the information submitted was such as was reasonably available to the applicant, since this did not exempt it from meeting the adequacy, accuracy and sufficiency requirements under Article 5.2 and 5.3 of the Anti-Dumping Agreement.[1] Thus, if the investigating authority finds that the information is insufficient because it is not accurate or relevant, the application should be rejected pursuant to Article 5.8 of the Anti-Dumping Agreement.
2.Mexico fails to take account of the fact that the reliability of the information in the publication Random Lengths was not questioned by the parties to that dispute[2] and that, moreover, the information was not sourced from a single transaction but gathered on the basis of a large number of transactions. Furthermore, the information refers to "actual" sales and not, as here, to "potential sales".
3.The invoice submitted at the outset was issued by Ferretería Ferrominera, a marketing company that neither produces nor exports the product under investigation. As regards representativeness of the company, Mexico refers to the response of the exporter for the purpose of making these calculations, whereas it did not have that response at the time the investigation was initiated. Neither the invoice nor the price quotation was issued by the single exporter under investigation, both representing a small portion of the products under investigation, and moreover the price quotation refers to a "potential" sale. In any event, there is no record of the applicant having submitted data for the purpose of adjustments that would allow a comparison between the export price and normal value.
4.Nor does Mexico explain how it could ensure that the analysis of import volume under the tariff lines in question (which included products other than that under investigation) was representative of the subset of imports of the product under investigation.[3]
5.Guatemala is not contending that Mexico failed to conduct some "procedure" for examining the accuracy and adequacy of the evidence. It is challenging the substantive aspects of the examination, which are purported to have impeded the initiation of the investigation.
Product under investigation
6.Neither Guatemala nor Mexico disputes that the definition of the product under investigation was altered. Mexico asserts the "likeness" of the products included in each of the definitions, disregarding the fact the scope of Guatemala's claims is outside of that context.
7.Guatemala challenges the arbitrary "way" (forma) in which the alterations in question were made[4], which led to the imposition of duties on products that initially were expressly excluded from investigation and that were simply not investigated, i.e. products on which no information was either requested or collected.
8.Mexico states that the Article 3.1 standard of the Anti-Dumping Agreement does not apply to determinations of dumping, which is difficult to understand, because this would imply a double standard: reliance on positive evidence and an objective analysis of the "dumped" imports, and at the same time non-compliance with those requirements (reliance on positive evidence and an objective analysis) in determining whether dumping occurred. Mexico's argument is in contradiction with the case law and disregards the scope of Article 17.6(i) of the Agreement.
9.Whatever defence may have been put forward by the exporter, it does not prejudge Guatemala's right to challenge acts that breach the rules of the Anti-Dumping Agreement.
Facts available
10.Mexico fails to respond to any of Guatemala's factual questions in this connection (in particular regarding paragraphs 80 and 81 of the Final Resolution)[5], and they should therefore be taken as undisputed points. The outcome of the verification visit does not reflect the conditions invoked by Mexico to justify resorting to the facts available[6] and, even assuming the rejected hypothesis that Mexico had some factual justification for doing so, this did not exempt it from meeting various obligations deriving from Article 6.8 of, and Annex II to, the Agreement.
Most recent period under investigation
11.There is nothing in the Anti-Dumping Agreement to support Mexico's attempt to justify using a more remote period of injury investigation on the grounds of excessive administrative burdens. The case law establishes that past information may be used only insofar as it is relevant to an analysis of the current state of the domestic industry and is justified as such in the investigating authority's determinations.
12.Regarding Appellate Body jurisprudence in EC – Tube or Pipe Fittings, cited by Mexico to specify that a period of investigation that might be affected by exporters' or importers' actions may not be used, Guatemala notes that the complaint in this dispute concerned the use of information relating to events that occurred after the period of investigation for the purposes of determination of dumping and not determination of the period of investigation. Moreover, the complaint referred solely to dumping and not to injury.
13.Lastly, turning to the alleged differences between the Rice case and this dispute: (a)Guatemala considers that although the time-span between the end of the period of investigation and the initiation of the investigation is shorter in the case at issue than in the Rice case, it is still long enough to prevent an objective overall view of the current state of the domestic industry, and it was for Economía to explain why it regarded as relevant a period such as the one that was proposed; (b)the fact that an additional request for information was made to the applicant in no way distinguishes the Rice case from this dispute; (c) the question of seasonality does not arise in this dispute in relation to the end of the period under investigation but in relation to the use of six-month periods, and it is therefore immaterial to this claim of violation. In any case, Guatemala has already mentioned that Economía was aware that consumption rose in the July-December period, resulting in increased imports.
Use of half-year data in the period under investigation
14.Consideration of limited information pertaining to a limited period of each of the years selected, without proper justification, does not constitute the objective evaluation required by Article3.1 of the Agreement.[7] An investigating authority cannot simply assume that the six-month period proposed by the applicant will provide an accurate picture of the state of the domestic industry.[8] An objective determination cannot be based on an incomplete series of data unless the investigating authority provides a justified explanation for doing so.[9] Furthermore, this case involved seasonal factors – such as higher consumption in December – which led to questioning of the selection of specified six-month periods only.
Use of information by enterprise
15.Articles 4.1 and 5.4 of the Anti-Dumping Agreement refer to the "domestic industry" in different terms. Article 5.4 addresses the "legitimacy" of applying for the initiation of an investigation process, whereas under Article 4.1 the investigating authority is required to define the domestic industry "[f]or the purposes of this Agreement". In other words, once the domestic industry has been defined under Article4.1, the authority is required to limit itself and confine its analysis to that definition, and the use of partial information pertaining to a portion of the domestic industry is not admissible.
Volume and import price issue
16.According to Mexico, the import declarations (pedimentos) that it managed to identify reflected significant volumes and constituted a sufficiently valid sample.[10] Guatemala rejects this argument because it obtained an extremely limited sample averaging no more than 25 per cent (10 per cent for 1998; 17per cent for 1999; and 48 per cent for 2000). Furthermore, percentages were extrapolated from those partial volumes in order to estimate volumes of the products under investigation for countries that were not investigated. Nowhere does Mexico explain the technical grounds for considering the sample as valid and representative.[11] It is not clear to Guatemala from the text of the Final Resolution that the reference to the 17 per cent figure covers only entry costs and that prices were dealt with using a method providing far wider statistical coverage.
Causation: cost increase
17.Guatemala's position is simple: Economía made no distinction between the injury caused by increased operating costs and the injury allegedly caused by dumping, nor did it ascertain that the injury caused by increased operating costs was not attributed to the dumped imports. To Guatemala's mind, a reading of the relevant paragraphs clearly shows that sales costs and/or operating costs rose while profits declined. Cost increases obviously lead to decreasing profits. Therefore, profit loss resulting from an increase in costs cannot be attributed to the alleged dumping.
Causation: decline in exports
18.In Mexico's view, Guatemala is wrong in asserting that there was no explanation of the decline in exports as another determining factor of injury. According to Mexico, the Final Resolution in fact indicates that export behaviour could not be a determining factor of injury to the domestic industry, considering the share of exports in domestic production.[12] Mexico nevertheless provides a justification which does not emerge from its Final Resolution and in any case fails to explain why a 2per cent decrease in sales in production terms (from 7 to 3 per cent for 1999 and from 7 to 5 per cent for 2000) should be considered negligible, whereas similar decreases in domestic sales do have to be taken into account.[13]
Essential facts
19.At no stage in the administrative procedure did Economía identify the facts it regarded as essential for its final determination, in particular the problems with information from the exporter for the determination of dumping and the possibility of altering the definition of the product under investigation to include structural pipes and tubes. Because it had failed to identify the information prior to the final determination, Economía did not provide the exporter with any opportunity to comment thereon.
Confidentiality
20.The confidentiality requirement in Article 6.5 of the Anti-Dumping Agreement is not conditional upon the possibility of acceding to confidential information. The fact that there are domestic legal mechanisms for acceding to confidential information does not exempt a Member from complying with this provision of the Anti-Dumping Agreement. To quote the words of the European Communities, "it is unacceptable that a WTO Member should consider, as Mexico suggests, that its domestic legislation on access to confidential information in the hands of the administration can replace the obligations set forth in Article 6.5 of the AD Agreement".[14]
WT/DS331/R
Page D-1
AnneXD–2
oral submission by mexico
(12 and 13 November 2006)
MEXICO HAD SUFFICIENT EVIDENCE OF DUMPING AND INJURY WHEN IT INITIATED THE INVESTIGATION
1.Regarding the alleged insufficiency of evidence in the application for initiation of the investigation, we note that Article 5.2 of the Anti-Dumping Agreement provides that an application for initiation shall include such evidence as is reasonably available to the applicant. As other panels have indicated[15], such evidence does not necessarily have to be of the quality required to support a preliminary or final determination. It need not be any more than data or information, a review of which supports the conclusion of a well-founded likelihood of unfair practice.
2.The fact that the invoice and the price quotation submitted by the applicant were not issued by Tubac is not a valid reason for claiming that the application lacked information, since investigations are initiated by a country, not by an exporter. That would be tantamount to requiring the applicant to present the quantity and quality of evidence required to support a determination, which is inadmissible. Moreover, as was recognized by the Appellate Body[16], if a WTO Agreement remains silent on a particular subject, there is a reason for such silence. Thus, it is not tenable that the Anti-Dumping Agreement provides for obligations not mentioned in the text. Accordingly, even if the invoice and quotation were not issued by Tubac, they are sufficient for initiating an investigation.
3.Moreover, according to Article 5.1 of the Anti-Dumping Agreement, the subject of the investigation is alleged dumping. If it were necessary for the applicant to produce evidence of dumping – and not of alleged dumping – initiation would be impossible. A price quotation is an indication of "alleged dumping". This is supported by the final report of the Panel in US – Softwood Lumber.
4.Guatemala relies on the final report of the Panel in Argentina – Poultry Anti-Dumping Duties to argue that the invoice and quotation concern isolated transactions and that this is not enough for initiation. That case is not applicable to this dispute, since it involved a determination that the Anti-Dumping Agreement had been violated through an incorrect calculation of the margins of dumping, whereas Guatemala claims that there was not enough information to initiate the investigation.
5.Furthermore, the invoice contains data on sales prices for a volume of the investigated product almost five times greater than the average for transactions conducted in Guatemala during the investigation period. The volume recorded in the invoice is sufficient for it to be considered a solid indication of a well-founded likelihood of dumping.
6.Guatemala claims that the application contained no evidence of dumping for the investigated product as a whole. In this connection, we reiterate that the evidence produced was the information reasonably available to the applicant, comprising elements from which it was possible to infer the likelihood of dumping, in accordance with the Anti-Dumping Agreement and the applicable jurisprudence[17], whereby it was determined that the evidence submitted with the application did not need to be of the same quality and quantity that would be necessary to support a resolution. Moreover, according to the final Panel report in US – Softwood Lumber, it is not necessary to produce evidence for every category of the product investigated for purposes of initiation. That would be contrary to the "reasonableness" mentioned in Article 5.2 of the Anti-Dumping Agreement and the above-mentioned criteria relating to the sufficiency of information.
7.Concerning the trend in the volume of imports, it is understandable that the description of the product classified under a tariff line should not tally with the technical description of the product. Consequently, to require the applicant to provide accurate data on the volume of imports would be to impose an unattainable standard and would be at variance with the WTO jurisprudence referred to in paragraph 2 of this submission.
8.Mexico properly examined the accuracy and adequacy of the evidence of dumping and injury. And in fact, as a consequence of that examination, the investigating authority requested additional information from the applicant. Moreover, if the evidence produced in the application for initiation is sufficient to initiate the investigation and the investigation has been initiated, it must be inferred that the investigating authority conducted the accuracy and adequacy examination.[18]
ARGUMENT CONCERNING THE CLAIMS RELATING TO THE PRODUCT UNDER INVESTIGATION AND THE LIKE PRODUCT
9.Guatemala argues that the two clarificatory adjustments made by Mexico, during the investigation, to the definition of the product under investigation were inconsistent with the Anti-Dumping Agreement. In this connection, the Anti-Dumping Agreement contains no guidelines in support of that argument which, therefore, as was pointed out by the Appellate Body[19], is without foundation. Moreover, even if the Anti-Dumping Agreement did provide guidance for determining the product under investigation, it would be unreasonable to prevent possible adjustment to the definition of the product on the basis of evidence submitted by the interested parties or obtained by the investigating authority.
10.Regarding the first clarificatory adjustment, since the investigating authority is not an expert on the product under investigation, its product description in the initiating resolution is based on data supplied for the most part by the applicant. The reference in the preliminary resolution to pipes and tubes of up to six inches in diameter does not alter the description in the initiating resolution and is consistent with the Anti-Dumping Agreement for the following reasons: (A) the description contained in the initiating resolution is not definitive and the Anti-Dumping Agreement contains no guidelines in this respect; (B) an anti-dumping investigation is a process in which the elements necessary to support the determination are assembled gradually; (C) the initiating resolution established that the diameter of the pipes and tubes investigated was basically one half to four inches. It did not state that those diameters were the only ones that could enter the domestic market; (D) a clarificatory adjustment solely in respect of the diameter does not imply "changing" the product description. For certain uses, four inch pipes and tubes could feasibly be substituted with larger diameter pipes and tubes; (E) Tubac failed to make any comment on that adjustment, although it could have done so, thereby tacitly accepting that it was appropriate.
11.Thus, in the absence of specific guidelines for defining the product under investigation and given that the ranges indicated in the preliminary resolution were commercially interchangeable with the ranges referred to in the initiating resolution; that the exporter tacitly accepted that change; and that an analysis was made of the specifications and technical characteristics of the product in order to define it properly, Mexico requests that Guatemala's arguments be dismissed.
12.Regarding the second clarificatory adjustment, we reiterate that an anti-dumping investigation is a process in which the elements supporting the determination are assembled at gradually. Since there is nothing in the Anti-Dumping Agreement to prevent it from doing so, the final resolution described the product under investigation on the basis of the facts available, including the technical and commercial interchangeability of standard and structural pipes and tubes.