RESTRICTED
WORLD TRADE G/ADP/W/29
G/SCM/W/36
ORGANIZATION 13July1995
(95-1999)
Original: English Committee onAnti-Dumping Practices
Committee onSubsidies andCountervailing Measures
QUESTIONS CONCERNING THE NOTIFICATIONS PROVIDED BYTHE
GOVERNMENT OFMEXICO OFLAWS AND REGULATIONS
UNDER ARTICLES 18.5AND 32.6 OFTHE AGREEMENTS
Thefollowing communication, dated 3July, hasbeenreceived from thePermanent Mission
ofCanada.
_______________
Please findattached Questions from Canada onMexico 'sNotified Laws andRegulations
Governing Countervailing andAnti-Dumping Duties.G/ADP/W/29
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With reference totheNotification ofLaws andRegulations byMexico under Article 18.5of
theAgreement onImplementation ofArticle VIandArticle 32.6oftheSubsidies andCountervailing
Measures Agreement oftheGATT 1994, documents G/ADP/N/1/MEX/1 andG/SCM/N/1/MEX/1,
submitted 2May1995, Canada would liketoaddress thefollowing general items:
1. Mexico hasnoted thattheirlawsrespecting unfair trade include, interalia,theAgreement
ontheImplementation ofArticle VIandtheAgreement onSubsidies andCountervailing
Measures oftheGATT 1994(hereafter referred toastheAgreements). Could Mexico clarify
whether theirintention istorevert totheAgreements where theirother lawsaresilent, orin
cases where other lawsmaybeinterpreted inconflict withprovisions oftheAgreements?
2. What isthelegal mechanism inMexican lawfortheimplementation ofdecisions rendered
bytheWTO?
3. Isthere anymeans bywhich domestic interests could useMexican lawsortheMexican
constitution, including thepractice ofAMPARO, tochallenge orprevent thegovernment from
implementing aWTO Dispute Settlement Body (DSB) panel decision?
Standing
1. Mexican lawandregulation doesnotappear tocontain references tothemanner inwhich "an
examination todetermine thedegree ofsupport" (SCM Article 11.4; Agreement onImplementation
ofArticle VI,Article 5.4)foracomplaint willbemade. How willMexican authorities determine
whether acomplaint isexpressly supported bydomestic producers?
2. Withrespect toArticle 75(VI) oftheRegulations, andforthepurposes ofdetermining whether
therequired level ofindustry support exists, where thecomplainant isamember ofanindustry
organization, isitassumed thattheother members oftheindustry organization alsosupport therequest
forinitiation ofaninvestigation?
Injury
1. Article 29oftheForeign Trade Actprovides that"evidence ofinjury orthreat ofinjury be
required whenever thecountry oforigin orsource ofthegoods inquestion observes reciprocity".
Could Mexico please clarify themeaning ofthisqualification asitrelates torequirement inthe
Agreements thatmaterial injury bedemonstrated tobecaused bysubsidized ordumped imports before
anydutymaybeimposed?
2. Does theexpression "notsignificant" inArticle 67oftheRegulations mean "deminimis "?
Similarly, isthephrase "identifiable adverse effects ondomestic production" intended tomean
"negligible"?
3. Inaddition, howwillMexican authorities implement therequirement to"examine anyknown
factors other thanthedumped/subsidized imports which atthesame timeareinjuring thedomestic
industry, andtheinjuries caused bytheseother factors mustnotbeattributed tothedumped/subsidized
imports" (SCM Agreement Article 15.5; Agreement onImplementation ofArticle VI,Article 3.5)?
4. What types of"other elements" would theMinistry "deem appropriate" initsconsideration
ofthequestion ofinjury under Article 41(iv)?G/ADP/W/29
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5. Thelastparagraph ofArticle 42requires theMinistry totakeintoaccount allfactors "...which
make itpossible toconclude ..."thatfuture imports willcause injury. WillMexico alsoconsider factors
thatdonotindicate injury?
Procedural time-limits
Clarification would beappreciated withrespect tothespecific procedural time-limits under
Mexican lawandregulation fortherendering ofapreliminary andfinalresolutions andrespecting
theimplementation andduration ofprovisional duties. Ofspecific interest isArticle 57.1ofMexico 's
Foreign Trade Act,which appears toallow forthefixing ofaprovisional duty45daysfollowing the
publication oftheresolution toinitiate aninvestigation, rather thanthe60dayscalled forinArticle 7.3
oftheAgreement ontheImplementation ofArticle VIand17.3oftheSCM Agreement.
Sunset provisions
1. Inregard toArticle 109oftheRegulations, istheintent thatthedeclaration ofelimination
canonlybemade afterinterested parties havebeennotified? Ifso,should notthatnotification bemade
before thetime-limit elapses, andnotafter, asisstated?
2. CanMexico clarify whether undertakings willbesubject tothesamesunset provisions asduties?
Anti-circumvention
Inlightofthespecific obligation inArticle 18.1oftheAgreement nottotakeactions against
thedumping ofexports fromanother Member except inaccordance withtheprovisions ofGATT 1994
asinterpreted bytheAgreement, could Mexico indicate thebasis intheAgreements forthedefacto
anti-circumvention provisions inArticle 71?Inasking thisquestion, Canada would liketonotethat
theissue ofcircumvention wasreferred totheCommittee onAnti-Dumping Practices through the
Marrakesh Ministerial Decision onAnti-Circumvention.
Definition ofsubsidy
Howwillthedefinition ofsubsidy contained inArticle 37oftheForeign Trade Actoperate
inconjunction withArticles 1and2oftheSCM Agreement?
Reference ismade totheMinistry issuing alistofexport subsidies. Hasthisbeendone, and
ifsowillMexico notify thislisttotheCommittee? Ifnot,onwhatbasiswillthelistbeprepared (i.e.,
Annex I,theIllustrative ListofExport Subsidies)?
Non-actionable subsidies
Isthereference to"except where suchpractices areregarded asinternationally acceptable"
(inArticle 37)intended tocover non-actionable subsidies within themeaning oftheSCM Agreement?
Arenon-actionablesubsidiesdeductedfromcalculationoftheamountofsubsidyforthepurposes
ofcountervailing dutyinvestigations andenforcement ofdeterminations?
Calculation oftheamount ofsubsidy
There donotappear tobeanyspecific guidelines inMexican laworregulations withrespect
tothemethodology forcalculating theamount ofsubsidy. How willMexican authorities dothis
calculation?G/ADP/W/29
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Developing country Members
HowwillMexicanauthoritiestreattheexportsofdevelopingcountryMembersinacountervailing
dutyinvestigation?
Massive imports ofsubsidized goods
There appears tobenoexplicit requirement under Mexican laworregulation thatimplements
therequirement ofArticle 20.6, thatincases ofmassive imports ofsubsidized goods, countervailing
duties mayonlybeapplied retroactively against prohibited subsidies. HowwillMexico administer
thisrequirement?
Specific questions regarding Annex I:theForeign Trade Act
1. Isthereference to"general costs" in,among otherplaces, Article 31,subparagraph II,intended
tomean administrative, selling andgeneral costs assetoutinArticle 2.2.2 oftheAgreement onthe
Implementation ofArticle VI?Ifthisisnotthecase,could Mexico explain whatismeant bytheterm
"general costs"?
2. Could Mexico indicate whatthepossible outcome ofaConciliation Meeting would be,and
whatbasis there isintheAgreements fortheprocess provided forinArticle 61?
3. Whydoesthesecond paragraph ofArticle 62oftheForeign Trade Actusethephrase "provided
theyaresufficient todiscourage theimports ofgoods" when referring toadutylessthanthefullmargin
ofdumping oramount ofsubsidy rather thanthewording "...ifsuchlesser dutywould beadequate
toremove theinjury tothedomestic industry," ascontained inArticle 9.1oftheAgreement on
Implementation ofArticle VIandArticle 19.2oftheSCM Agreement?
4. Article 66requires animporter toprove thatlikegoods arefrom anon-subject Member in
order tobenotassessed acountervailing duty. Could Mexico clarify whether animporter would have
todoanything inaddition totherequirements setoutinthenormal Mexican Rules ofOrigin procedures?
5. Could Mexico reconcile theapparent quantitative restriction onexporters inArticle 72where
theexporter voluntarily agrees to"cease exports" with Article 8.1oftheAgreement onthe
Implementation ofArticle VIwhich onlyallows fortheexporter to"cease exports totheareainquestion
atdumped prices"? Canada isconcerned thatanundertaking thatrestricts exports isadefactovoluntary
export restraint, asprohibited byArticle 11oftheWTO Agreements onSafeguards.
6. Could Mexico provide thetextofArticle 6ofitsForeign Trade Actwhich isreferred toin
Article 73ofthatAct?
7. CouldMexicoprovideadetailedexplanationofthedifferencebetween"confidentialinformation"
and"restricted commercial information" andanytesttodetermine whether information qualifies as
"restricted commercial information", asnoted inArticle 80,andinclude examples ofeachtypeof
information? DotheMexican authorities intend toallow fortherelease ofbothtypes ofinformation
iftheparty presenting theinformation soallows?
8. Could Mexico indicate whether there areanyspecific time-limits onthepublic hearings noted
inArticle 81?G/ADP/W/29
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9. Could Mexico indicate whyinterested parties areprohibited from providing statements by
authorities asnoted inArticle 82?Could Mexico include initsexplanation which authorities arebeing
referred toandpossible examples ofsuchprohibited statements?
10. Could Mexico indicate whether allinterested parties would benotified oftheproceedings
instituted inaccordance withthesecond paragraph ofArticle 82suchthattheywould haveadequate
timetoprepare andparticipate insuchproceedings should theysodesire? Could Mexico provide
examples ofsuchproceedings andtheapplicable procedures?
11. Thesecond paragraph ofArticle 83indicates that,intheabsence ofanexporter allowing
verification totakeplace, theMinistry "shall assume thattherequesting party'sclaims aretrue,unless
there exists element which indicate otherwise". Could Mexico indicate whether thestatement means
that,intheevent ofnon-cooperation, theMinistry willusethebestinformation available asrequired
byArticle 6.8andAnnex IIoftheAgreement ontheImplementation ofArticle VI?
12. Could Mexico provide thetextofthose portions oftheMexican Federal TaxCode applicable
totheadministrative proceedings referred toinArticle 85?
13. Could Mexico indicate howitwould takeintoaccount theinterests ofotherproduction processes
andconsumers ascontemplated byArticle 88?
14. Inrespect ofArticles 87and89,would Mexico characterize theirproposed system forthe
collection ofduties asprospective innature?
15. Article 93IIIandIVprovide forfinesasaresult oftheprovision offalseinformation orthe
failure toprovide information. Could Mexico indicate whether suchfinesareapplicable tonationals
orcorporations ofother Members and/or governments ofother members? Ifyes,under whatWTO
authority doesMexico basethisprovision?
16. Inregard totheretroactive application offinalmeasures asprovided forinArticle 93V,could
Mexico explain whytheyusedathree-month timerestriction rather thanthe90daymaximum in
Article 10.6oftheAgreement ontheImplementation ofArticle VIandArticle 20.6oftheSCM
Agreement?
17. Inrespect ofthelastparagraph inArticle 93,could Mexico indicate whether foreign nationals
would besubject topenal andcivilsanctions andwhatsuchpenal andcivilsanctions maybe,including
examples where appropriate?
18. Regarding theappeal offinalcountervailing measures noted inArticle 94,could Mexico indicate
therelationship between the"Ministry" andtheMinistry ofFinance andPublic Credit?
19. Could Mexico provide thetextofArticle 239bisoftheMexican Federal TaxCode noted in
Article 95,andexplain the"deadline" referred tointhelastparagraph andtherelated process?
Specific questions regarding Annex II:Regulations under theForeign Trade Act
1. Could Mexico explain whatisintended inthesecond sentence ofArticle 43bythereference
to"...factors ofatransitory nature ortheeconomic situation" andprovide examples ofsuchfactors
orsuchaneconomic situation?
2. Could Mexico explain theuseofthephrase "materials andcomponents" inrespect ofindirect
manufacturing costs inArticle 46IA.G/ADP/W/29
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3. Article 46Inotes thatproduction costs aretobedetermined based ontheweighted average
costincurred inallthefactories ofeachexporter whereas Article 2.2.1.1 oftheAgreement onthe
Implementation ofArticle VIprovides thatsuchcostsshallnormally bebased onrecords keptbythe
producer orexporter inaccordance withthegenerally accepted accounting principles inthecountry
ofexport aslongassuchrecords reasonably reflect those costs. Asthese costing methodologies may
notyieldthesame result, could Mexico reconcile thedifference initsregulations andtheAgreement?
4. Inrespect ofArticle 46I,andinlightofArticle 54I,could Mexico indicate whether export
packing costs would beincluded inaconstructed costofproduction?
5. Could Mexico explain whatismeant inArticle 46IIbytheinclusion in"overheads" ofthe
depreciation ofassets notrelated toproduction andprovide anexplanation ofthedifference between
assets notrelated toproduction andassets notinuse(seealsoArticle 46VI)?
6. Could Mexico reconcile itsintended useofacquisition costs asasurrogate forthecostof
production ofgoods inArticle 47withtherequirements inArticle 2.2.1.1 oftheAgreement onthe
Implementation ofArticle VI?
7. Could Mexico explain thereference tothe"Ministry forthesupplier enterprises" inthesecond
paragraph ofArticle 47:whatthisbodyisandwhatitsrelationship would betoanexporter orsupplier?
8. Thelastparagraph ofArticle 54denotes ageneral ruleregarding theallocation ofexpenses
ofageneral character, andArticle 56notes two"general rules" inrespect ofadjustments required
toaccount fordifferences inphysical characteristics. Arethese rules meant tobediscretionary or
mandatory?
9. Could Mexico elaborate onthespecific methodologies envisioned toadjust forquantitative
differences between normal value andexport price asnoted inArticle 55IIandexplain theuseofthe
term"model ofprices" inArticle 55IIIB?
10. Thelastparagraph ofArticle 55makes reference to"available information". Could Mexico
explain whyitdidnotusethephrase "best available information" asusedinArticle 6.8andAnnex 11
oftheAgreement ontheImplementation ofArticle VI?
11. Could Mexico elaborate ontheArticle 58adjustment fortheeffects ofinflation, andprovide
thebasis intheAgreements forthisprovision?
12. Article 75(I)andArticle 80(I)would suggest thatthere aremultiple competent administrative
authorities which canentertain requests, andissue resolutions fortheinitiation ofaninvestigation.
Could Mexico please clarify themeaning ofthese twoprovisions?
13. What ismeant by:
(i) TheArticle 75(VII) reference to"thelegalbasis oftherequest"? and
(ii) theArticle 75(XV) reference to"other regulatory ortrade-restrictive measures
concerning theproduct", (i.e.,dotheseinclude unilateral trademeasures tobeimposed
bytheMexican authorities)?
14. CouldMexicoprovideanexplanationofthemeaningof"summons"inthecontextofArticle81(I)
oftheRegulations? Does itrefer toaformal instrument which requires theperson served (i.e.,
summoned), toappear before therelevant authority under threat ofpenalty oflaw?G/ADP/W/29
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15. DoArticles 82(F) and83(F) mean thatMexico intends toimplement alesser dutyrule?
16. Article 89allows theMinistry tofixduties forexporters whohavebeengiven theopportunity,
butdidnotparticipate intheinvestigation. Could Mexico indicate whether suchduties willbecalculated
based onknown margins, i.e.,weighted average, orsetatthehighest known margin?
17. Article 93requires thepublication ofthereply toarequest forclarification orexplanation of
resolutions under which finalduties areimposed. Inorder toclarify theintent ofsuchanexplanation,
willtherequest alsobepublished?
18. Regarding theundertaking provisions inArticle 112,could Mexico clarify itisunderstood
thatundertakings aresubject totheprohibition ofanincrease inexport price greater thananamount
necessary toeliminate themargin ofdumping oramount ofsubsidy asprovided forinSCM Article 18.1
andtheAgreement onImplementation ofArticle VIArticle 8.1?
19. Inregard toArticle 136,doesMexico intend toinclude union inthelistoflegally constituted
organizations abletobring complaints?