WORLD TRADE ORGANIZATION


WT/DS60/AB/R

2 November 1998


(98-4190)

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Original: English


GUATEMALA – ANTI-DUMPING INVESTIGATION REGARDING PORTLAND CEMENT FROM MEXICO


AB-1998-6


Report of the Appellate Body

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WORLD TRADE ORGANIZATION APPELLATE BODY


Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico


Guatemala, Appellant

Mexico, Appellee


United States, Third Participant


  1. Introduction

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    AB-1998-6


    Present:


    Lacarte-Muró, Presiding Member Beeby, Member

    El-Naggar, Member


    1. Guatemala appeals from certain issues of law and legal interpretation developed in the Panel Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico.1 That Panel was established by the Dispute Settlement Body (the "DSB") on 20 March 1997 with standard terms of reference2 based on Mexico's request for the establishment of a panel.3


    2. The relevant facts are to be found in paragraphs 2.1 to 2.4 of the Panel Report.


    3. The Panel considered claims made by Mexico concerning Guatemala's decision to initiate an investigation into allegations of dumping of portland cement from Mexico, Guatemala's conduct of that investigation by its authority leading to the preliminary determination, and its conduct of the final stages of the investigation. The Panel Report was circulated to Members of the World Trade Organization (the "WTO") on 19 June 1998. The Panel considered that its terms of reference entitled it to examine "the matters referred to in Mexico's request for establishment of a panel".4 The Panel


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      1WT/DS60/R.

      2WT/DS60/3, G/ADP/D3/3, 5 May 1997.

      3WT/DS60/2, G/ADP/D3/2, 13 February 1997.

      4Panel Report, para. 7.27.

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      made the following recommendations:


      We ... recommend that the Dispute Settlement Body request Guatemala to bring its action into conformity with its obligations under Article 5.5 of the ADP Agreement.5


      … we recommend that the Dispute Settlement Body request Guatemala to bring its action into conformity with its obligations under Article 5.3 of the Agreement.6


      It also suggested that:


      … Guatemala revoke the existing anti-dumping measure on imports of Mexican cement … .7


    4. On 4 August 1998, Guatemala notified the DSB8 of its intention to appeal certain issues of law covered in the Panel Report and legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"), and filed a Notice of Appeal with the Appellate Body, pursuant to Rule 20 of the Working Procedures for Appellate Review (the "Working Procedures"). On 14 August 1998, Guatemala filed an appellant's submission drafted in Spanish.9 On 31 August 1998, Mexico filed an appellee's submission also drafted in Spanish.10 In order to ensure that the third participant would have time to prepare its submission after receiving an English version of the appellant's submission, the Appellate Body granted the United States additional time to file its third participant's submission. The United States filed that submission on 14 September 1998.11 By our ruling of 31 August 1998, we declined Mexico's request that its appellee's submission be withheld from Guatemala and the United States until the end of the time-period allowed to the United States to file its third participant's

submission. The oral hearing, provided for in Rule 27 of the Working Procedures, was held on 2 October 1998. At the oral hearing, the participants and the third participant presented their arguments and answered questions from the Division of the Appellate Body hearing the appeal.


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5Panel Report, para. 8.4. 6Panel Report, para. 8.5. 7Panel Report, para. 8.6. 8WT/DS60/9, 4 August 1998.

9Pursuant to Rule 21(1) of the Working Procedures. 10Pursuant to Rule 22 of the Working Procedures. 11Pursuant to Rule 24 of the Working Procedures.

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II Arguments of the Participants and Third Participant


  1. Guatemala - Appellant


    1. Whether the Dispute was Properly Before the Panel


      1. Guatemala argues that the Panel erred in concluding that it could examine Mexico's claims concerning the initiation of the anti-dumping investigation. In this respect, Guatemala asserts that the Panel incorrectly interpreted the relationship between the dispute settlement procedures of the Anti- Dumping Agreement and those of the DSU. It is clear from the wording of Article 1.2 of the DSU and from the opening clause of Article 17.1 of the Anti-Dumping Agreement that the provisions of these two covered agreements are to be applied together unless there is a difference between the special or additional rules and procedures contained in Articles 17.4, 17.5, 17.6 and 17.7 of the Anti-Dumping Agreement and the provisions of the DSU. Only in that event do the special or additional provisions prevail. According to Guatemala, since Article 17.3 is not mentioned in Appendix 2 of the DSU as a special or additional rule or procedure, it cannot prevail over the provisions of the DSU and must always be read and applied consistently with the DSU, in particular Article 4.4. The Panel therefore erred in disregarding the requirements of this provision. Article 4.4 requires the complaining Member to identify the "measures" at issue.


      2. Guatemala submits that the word "difference" in Article 1.2 of the DSU means "contradiction" or "inconsistency". It is only if the special or additional rules contradict or are inconsistent with the provisions of the DSU that the special or additional rule must "prevail" over the provisions of the DSU. If the special or additional rule simply does not include one of the specific requirements of the provisions of the DSU, there is no conflict since it is possible to comply with both sets of rules at once.


      3. According to Guatemala, it therefore follows that the Panel erred in considering that Articles 17.4 and 17.5 replace12 the corresponding rules of the DSU, in particular Article 6.2, because there is no contradiction or inconsistency between them. The Panel did not explain in what way the provisions of the Anti-Dumping Agreement differ from Article 6.2 of the DSU. In Guatemala's view, although Article 17.5 is silent regarding the need to identify the measure at issue, it is not in conflict with Article 6.2 of the DSU. A better interpretation of Article 17.5 is that it is an additional rule that requires the request for the establishment of a panel to include a statement regarding nullification or



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        12Panel Report, para. 7.16

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        impairment of benefits that is not required under Article 6.2 of the DSU. Given that there is no conflict between the two provisions, the panel request must also satisfy the requirements of Article 6.2 of the DSU and must therefore identify the measure at issue and give a summary of the legal basis for the claims made.


      4. As regards the measures that may be contested in an anti-dumping dispute, Guatemala contends that Article 17.4 of the Anti-Dumping Agreement is more than a "timing provision". Rather, it limits the types of measure that may be challenged under the Anti-Dumping Agreement to the three measures that are specifically identified in Article 17.4: the provisional anti-dumping duty, the final anti-dumping duty and the acceptance of a price undertaking. Furthermore, a provisional measure can only be challenged if the "significant impact" requirement is satisfied. Guatemala asserts that this interpretation of Article 17.4 is borne out not only by its wording, but also by its context, object and purpose and the drafting history of the Anti-Dumping Agreement.


      5. Articles 1 and 18.3 of the Anti-Dumping Agreement, which form part of the context of Article 17.4, draw a distinction between an "anti-dumping measure" and "investigations". Thus, an investigation is not a measure. Furthermore, Articles 3.8, 15 and 17.6(ii) of the Anti-Dumping Agreement refer to "measures" as distinct from procedural actions or decisions taken during an investigation. Article 13 also limits the obligation to maintain a system of domestic judicial review to review of the final determination and administrative acts related to it. Guatemala considers that the importance of the word "measure" is further underlined by the fact that it appears in Articles 3.3, 3.7, 4.2, 4.4, 6.2, 10.4, 12.10, 19.1, 21.2, 21.8, 22.1, 22.2 and 22.8 of the DSU.


      6. According to Guatemala, a broad interpretation of Article 17.4 of the Anti-Dumping Agreement and of the word "measure" in this context would permit a Member to seek consultations and the establishment of panels for alleged violations arising from the hundreds of acts or decisions that are taken during the course of an anti-dumping investigation. This could lead to innumerable proceedings concerning a single investigation, and the consequence would be a waste of resources and a strain on the WTO dispute settlement system, while giving Members a way of utilizing that system to exert influence on domestic anti-dumping investigations. Guatemala argues that the true object and purpose of Article 17 is to provide a coherent set of rules for the settlement of anti-dumping disputes that strikes an appropriate balance between the rights of Members to impose anti-dumping measures and the rights of other Members to challenge those measures.

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      7. In Guatemala's view, the drafting history of the Anti-Dumping Agreement also bears out this interpretation of Article 17.4. During the negotiations leading to the conclusion of the Agreement, several countries proposed permitting a challenge to the decision to initiate itself. These proposals were, however, rejected.


      8. In addition, Guatemala believes that several Appellate Body Reports substantiate its argument that anti-dumping disputes should be limited to one of the three measures enumerated in Article 17.4. In Brazil - Measures Affecting Desiccated Coconut ("Brazil – Coconut")13, the Appellate Body seems to interpret a countervailing measure as something that results from an investigation. In United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India ("United States – Shirts and Blouses")14, the Appellate Body considered that procedural actions resulting from a measure are not in themselves "measures". Thus, steps in an investigation that either result from or lead to a "measure" are not in themselves "measures".


      9. Guatemala submits that a proper reading of Article 17.4 of the Anti-Dumping Agreement also means that the Panel's broad reading of the word "measure"15 is wrong since, in the context of the Anti-Dumping Agreement, Article 17.4 defines the types of measure that may be challenged and there is no room for such a broad reading.


      10. Guatemala adds that although Article 17.4 of the Anti-Dumping Agreement limits the types of "measure" that may be contested, there are no restrictions on the "claims" that may be made concerning such a measure. The claims may, for instance, relate to the initiation and conduct of the investigation. Guatemala considers that different considerations apply to disputes brought pursuant to Article 18.4 of the Anti-Dumping Agreement since such disputes concern anti-dumping laws, regulations or administrative procedures and not "anti-dumping measures" of the type covered by Article 17.4 of that Agreement.


      11. In conclusion, Guatemala submits that the Panel's interpretation of the dispute settlement provisions in the DSU and the Anti-Dumping Agreement is wrong in two ways: (1) the Panel erred in considering that it is not necessary for a Member to identify a specific anti-dumping measure in its request for consultations and in its request for the establishment of a panel; and (2) the Panel erred in concluding that the measure may be any of the hundreds of substantive decisions and procedural actions taken during the course of an anti-dumping investigation.



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        13Adopted 20 March 1997, WT/DS22/AB/R.

        14Adopted 23 May 1997, WT/DS33/AB/R.

        15See Panel Report, para. 7.24.

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      12. As regards the Panel's terms of reference, Guatemala submits that the Panel could not take the view that it had authority to examine claims relating to the final anti-dumping duty. First, as the Panel found, the "matter" referred to the DSB and the "matter" which was the subject of consultations must be the same "matter".16 In this case, Mexico could not have identified the final measure in its request for consultations since it had not been adopted at that time. The "matter" referred to the DSB could not therefore include that "measure". Furthermore, according to Guatemala, the request for the establishment of the Panel does not, in any event, identify the final anti-dumping duty as the measure.


      13. Guatemala observes that the Panel declined to consider whether the provisional anti-dumping duty was properly before it.17 The Appellate Body should find, therefore, that the Panel did not have jurisdiction to consider any of the claims made concerning the initiation of the investigation or the notification of that initiation. Alternatively, Guatemala refers the Appellate Body to the arguments it made to the Panel concerning "significant impact". It submits that Article 17.4 of the Anti-Dumping Agreement requires the provisional measure to have a "significant impact" and this requirement must be met before a complaining Member has the right to refer a provisional measure to the DSB. Guatemala contends that Mexico did not claim, still less prove, that the provisional measure had a significant impact on its trade interests or competitive position. The Panel did not therefore have any authority to examine either the provisional measure or claims made in relation to it.


        2. Interpretation of Article 19.1 of the DSU


      14. Guatemala submits that the Panel erred in interpreting Article 19.1 of the DSU as permitting it to recommend that Guatemala bring its "action" into conformity with its obligations under Articles 5.3 and 5.5 of the Anti-Dumping Agreement. This Panel has broadened the powers of panels by allowing recommendations to be made that refer not only to "measures" but also to any "action" taken during the course of an anti-dumping investigation. The Panel, therefore, has acted contrary to the rules of interpretation set forth in Article 31 of the Vienna Convention on the Law of Treaties (the "Vienna Convention")18, as it has imported a concept into Article 19.1 of the DSU that is not part of that provision. In Guatemala's view this reading also violates Article 19.2 of the DSU since panels could make wide-ranging recommendations concerning a variety of procedural actions that were not "measures", thereby limiting the rights of Members to conduct investigations.


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        16Panel Report, para. 7.15.

        17Panel Report, footnote 219.

        18Done at Vienna, 23 May 1969, 1155 U.N.T.S. 331; (1969), 8 International Legal Materials, 679.

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      15. Guatemala also argues that the Panel's suggestion concerning the implementation of its recommendation on the violation of Article 5.3 of the Anti-Dumping Agreement violates Article 19.1 of the DSU. According to Guatemala, "suggestions" must refer to the same measure as the one which is the subject of "recommendations". Since the final anti-dumping measure was outside its terms of reference, the Panel could not, according to Guatemala, make any "recommendations" or "suggestions" regarding it. Guatemala contends that the Panel's reading of Article 19.1 would give panels discretion to refer to measures that bear no relation to the dispute, that have not been contested and that lie outside their terms of reference.


        3. Presumption of Nullification or Impairment


      16. Guatemala believes that the Panel's reasoning on this issue starts from a mistaken premise. The Panel considers that it is not necessary for the complaining Member to prove that the failure to fulfil an obligation has particular adverse trade effects. This effectively denies Guatemala the possibility of providing evidence to the contrary and converts the rebuttable presumption of nullification or impairment that is set down in Article 3.8 of the DSU into an absolute one.


      17. Guatemala considers that since it led evidence that Mexico's rights of defence were properly safeguarded, despite the late notification under Article 5.5 of the Anti-Dumping Agreement, it was for Mexico to prove any specific adverse effects or to show how its rights of defence were in fact prejudiced. Guatemala asserts that a rebuttable presumption does not shift the burden of proof, but rather it relieves the claimant of the burden of demonstrating a prima facie case in its favour. If the other party leads evidence that casts doubt on what the presumption purports to show, then the complaining party must lead further evidence in order to satisfy the burden of proof. This is the proper interpretation of Article 3.8 of the DSU. The defending party may rebut the presumption by proving that the violation had no adverse impact. Guatemala submits that it did just that in this case.


      18. First, the Anti-Dumping Agreement, unlike the Agreement on Subsidies and Countervailing Measures (the "Subsidies Agreement"), does not impose any obligation to seek or hold consultations before initiating an investigation, so the failure to give timely notification did not deprive Mexico of any right to consult. Second, no evidence substantiates the argument that timely notification would have given Mexico any opportunity to reach a compromise prior to initiation of the investigation since Guatemala could have initiated the investigation immediately after notifying Mexico. Third, Guatemala did not undertake any concrete steps in the investigation until Mexico had been notified

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        and it then gave Cruz Azul19 a further period of two months to reply to the questionnaires. Fourth, even if Mexico had wished to reach a compromise before initiation, it had neither the power, the right nor the proper procedure for doing so, as anti-dumping cases cannot be the subject of transactions between governments. Fifth, Mexico's "acquiescence" in the initiation of the investigation over a period of six months shows that it did not have any interest in reaching a compromise.


      19. Guatemala also asserts that the Panel's references to United States – Taxes on Petroleum and Certain Imported Substances20 and Japan – Taxes on Alcoholic Beverages21 are irrelevant in this context. These cases deal with substantive breaches that might have an effect on the levels of trade of Members, whereas the present case deals with the breach of a procedural obligation that has nothing to do with levels of trade. Guatemala argues that the Panel also erred in referring to Brazil - Imposition of Provisional and Definitive Countervailing Duties on Milk Powder and Certain Types of Milk from the European Economic Community22 because this case does not concern nullification or impairment, but rather the application of the concept of "harmless error", which is, in any event, consistent with the normal rule on the burden of proof.


      20. Guatemala therefore submits that the Panel erred in its interpretation of Article 3.8 of the DSU.


        4. Article 5.3 of the Anti-Dumping Agreement


      21. As regards the obligations imposed by Article 5.3 of the Anti-Dumping Agreement, Guatemala considers that if an investigating authority determines that an application made under Article 5.2 of that Agreement complies with the requirements of that latter provision and if the authority examines the "accuracy and adequacy" of the evidence accompanying the application, then the authority has discretion to determine that there is "sufficient evidence" under Article 5.3. Furthermore, a panel may not review the authority's determination on whether that evidence is sufficient. In terms of Article 5.3, Guatemala believes that all that a panel may review is whether or not the authority actually examined the "accuracy and adequacy" of the evidence.



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        19The Mexican company which is alleged to have dumped portland cement in Guatemala.

        20Adopted 17 June 1987, BISD 34S/136.

        21Adopted 1 November 1996, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R.

        22Adopted 28 April 1994, BISD 41S/467, paras. 270 and 271.

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      22. Guatemala supports this interpretation by reference to the wording of Article 5.2 as well as its context. Guatemala makes reference in that regard to Articles 5.6 and 5.8 of the Anti-Dumping Agreement and to Article 11.2 of the Subsidies Agreement. It considers that its interpretation is also consistent with the object and purpose of Article 5.3, as defined by the Panel.23 Guatemala also derives support for its view from the drafting history of that provision.


      23. Guatemala considers that the Panel erred in concluding that Articles 2 and 3.7 of the Anti- Dumping Agreement are applicable at the initiation stage of an investigation. Article 5.2 of that Agreement lists the type of information that must be provided in an application and it does not mention Article 2. If considerations were imported into Article 5.2 from Article 2, then the specific requirements of Article 5.2 would be rendered redundant. Likewise, although Article 5.2(iv) does provide that paragraphs 2 and 4 of Article 3 are relevant at the stage of initiation, it does not mention Article 3.7. Article 5.2 does not therefore oblige authorities to take account of the factors and indices mentioned in Article 3.7.


      24. The Panel also erred in imposing an obligation on investigating authorities that is not contained in the Anti-Dumping Agreement. According to Guatemala, the Panel found that when authorities formulate a recommendation or issue the notice of initiation, they must recognize: (1) that during the course of the investigation, it will be necessary to make the adjustments provided for in Article 2 in order to make a fair comparison, or (2) that an examination has been carried out that goes beyond the evidence or information contained in the application. Guatemala contends that the Panel has erred in reaching this conclusion because the Anti-Dumping Agreement does not oblige the investigating authority either to acknowledge the need to make adjustments or to examine evidence not included in the application. The requirement to make adjustments arises under Article 2 only during the course of an investigation.


      25. The fact that Articles 2 and 3.7 are not relevant at the stage of initiation is, in Guatemala's view, borne out by Article 12 of the Anti-Dumping Agreement. According to this provision, it is only in the case of preliminary and final determinations that the public notice must include information on the comparison of prices and on the considerations relevant to the determination of injury. The notice of initiation need only provide information concerning the basis of the allegations of dumping and injury.



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        23Referring to the panel report in United States – Measures Affecting Softwood Lumber from Canada ("United States - Softwood Lumber"), adopted 27 October 1993, BISD 40S/358, the Panel considered that the purpose of Article 5.3 was to establish a balance between the competing interests of the domestic industry in the importing country and the interest of the exporting country in avoiding investigations (Panel Report, para. 7.52).

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      26. At footnote 242 of its Report the Panel declined to consider certain "additional evidence" that Guatemala alleged was taken into account by the investigating authority when it decided to initiate the investigation. The reason for the Panel's refusal was that it could find no trace of this evidence in any part of the file relating to the decision to initiate. Guatemala submits that the Panel was wrong to refuse to admit this evidence because the Anti-Dumping Agreement does not oblige the authority to reveal what additional evidence it may have taken into consideration before taking the initiation decision.


      27. Guatemala submits that the Panel's interpretation of the word "evidence" in Article 5.3 of the Anti-Dumping Agreement is also flawed. The Panel was wrong to find that "sufficient evidence" means something whose accuracy and adequacy can be "objectively evaluated".24 The Panel has, in reality, added an obligation to Article 5.2 since, as well as being all that is "reasonably available", information provided in an application must now also be capable of objective evaluation.


      28. Guatemala maintains that this interpretation of Articles 5.2 and 5.3 of the Anti-Dumping Agreement, which it argued before the Panel, was "permissible" and that the Panel, therefore, erred in rejecting it because Article 17.6(ii) of the Anti-Dumping Agreement mandates that the Panel shall find a measure to be consistent with the Agreement if it is adopted on the basis of one permissible interpretation of a provision.


      29. As regards the Panel's review of the facts, Guatemala submits that it erred in its interpretation of Article 17.6(i) of the Anti-Dumping Agreement. According to Guatemala, that provision requires a Panel to accept the authority's evaluation of the facts unless there is a finding, based on positive evidence submitted by the defending party, of bias or subjectivity. Since there was no such finding in the present case, the Panel should have accepted the Guatemalan authority's evaluation of the facts.


      30. However, even if positive evidence of bias or subjectivity were not required, Guatemala argues that the Panel improperly interpreted Article 17.6(i) as permitting it to carry out a de novo evaluation of the facts. Furthermore, the Panel was wrong to rely on the panel report in United States - Softwood Lumber25, since that panel was concerned with the provisions of a different agreement, namely the Agreement on Interpretation and Application of Articles VI, XVI and XXIII (the "Tokyo Round Subsidies Agreement")26, which has no provision like Article 17.6(i).


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      24Panel Report, para. 7.71.

      25Adopted 27 October 1993, BISD 40S/358.

      26BISD 26S/56.

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  2. Mexico - Appellee


    1. Whether the Dispute was Properly Before the Panel


      1. Mexico endorses the Panel's finding that the term "measure" is not restricted to final anti- dumping measures, provisional anti-dumping measures and acceptance of price undertakings. Since neither the Anti-Dumping Agreement nor the DSU contains a definition or a special meaning for the term "measure", it should be interpreted broadly and in accordance with its ordinary meaning. According to Mexico, that meaning includes "any action or act carried out to achieve a particular end". The text and context of the Anti-Dumping Agreement and the DSU show that Article 17 of the Anti-Dumping Agreement does not support Guatemala's argument that the only measures which may be contested are those enumerated in Article 17.4.


      2. Mexico agrees with the Panel that Article 17.4 itself is simply a "timing provision".27 The provision does not include language that would limit disputes under the Anti-Dumping Agreement to three types of measure. Indeed the English version of the provision does not mention final measures at all, but refers only to whether "final action has been taken … to levy definitive anti-dumping duties or to accept price undertakings … ". Article 17.3 also permits, as the Panel found 28, consultations about any "matter" without limit on the types of measure that may be contested. Likewise, Article 17.5 does not specifically make reference to any of the three measures Guatemala cites. It refers simply to the "matter". Mexico adds that it does not consider that the Panel found that Article 17.3 is a special or additional rule. All the Panel stated was that "if Article 17.3 requires something different from the corresponding Article 4 of the DSU, the provisions of Article 17.3 must prevail, otherwise Article 17.4 would not be given full effect".29


      3. In Mexico's view, Articles 1 and 18.3 of the Anti-Dumping Agreement show, at most, that a "measure" is different from an "investigation". But that does not mean that the only measures that may be contested are those mentioned in Article 17.4. Other provisions of the Anti-Dumping Agreement confirm the conclusion that, in that Agreement, the word "measure" means more than final anti-dumping measures, provisional anti-dumping measures and acceptance of price undertakings. Article 10.7 speaks of "such measures as the withholding of appraisement or assessment as may be necessary to collect anti-dumping duties …" (emphasis added), and Article 13 refers to "medidas administrativas" (which in the English text appears as "administrative actions").


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        27Panel Report, para. 7.18. 28Panel Report, para. 7.14. 29Panel Report, para. 7.13.

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        Article 17.6(ii) also illustrates clearly that the term "measure" is related to compliance with any of the provisions of the Anti-Dumping Agreement. Likewise, according to Mexico, Article 3.8 of the DSU and Article XXIII of the GATT 1994 indicate that the infringement of any obligation constitutes a "measure".


      4. Mexico considers that Guatemala's view of the object and purpose of the word "measure" is unrealistic. There is, as the Panel stated30, no risk of multiple panels examining a single investigative procedure since Article 17.4 of the Anti-Dumping Agreement means that a panel can only be established after specific triggering events. Guatemala's position also provides a Member with a strong incentive to initiate investigations in violation of the Anti-Dumping Agreement since, even where the initiation of the investigation is manifestly unlawful, a Member must await a final resolution before commencing dispute settlement proceedings. Mexico contends that it is precisely to avoid this that Article 17.4 permits recourse to dispute settlement to challenge a provisional measure. Guatemala's position would mean that it was, in reality, impossible to challenge a provisional measure on the grounds of unlawful initiation, because the time required for a panel to report will always exceed the maximum life of the provisional measure as set down in Article 7.4 of the Anti-Dumping Agreement.


      5. Mexico contends that any conclusion other than that reached by the Panel would, contrary to the rules of the Vienna Convention, deprive many provisions of the Anti-Dumping Agreement of their effect, including those on initiation and the special or additional rules and procedures on dispute settlement. Mexico, therefore, proposes that the Appellate Body reject Guatemala's arguments that the dispute was not properly before the Panel. The Appellate Body should also dismiss Guatemala's arguments concerning the Panel's interpretation of Article 19.1 of the DSU.


        2. Presumption of Nullification or Impairment


      6. Mexico asserts that Guatemala has not demonstrated that its violation of Article 5.5 of the Anti-Dumping Agreement did not have adverse effects for Mexico. First, the absence of obligations in the Anti-Dumping Agreement regarding the need for consultations prior to the initiation of an investigation does not mean that a Member no longer has the right to timely notification under



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        30Panel Report, footnote 212.

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        Article 5.5 of that Agreement, so as to be able to react in good time according to its best interests. Second, if Guatemala had initiated the investigation immediately after notifying Mexico, the question of adverse impact and the burden of proof would not have arisen. Third, the fact that Mexico had to request an extension of time in itself constitutes an example of the adverse impact caused by the late notification. Fourth, the fact that anti-dumping investigations are not the subject of transactions between governments has nothing to do with whether Mexico suffered adverse effects in this case. The possibility of a settlement between Guatemala and Mexico exists irrespective of when notification takes place. Finally, Mexico did not acquiesce in the late notification. Moreover, Mexico maintains that violation of Article 5.5 of the Anti-Dumping Agreement is not a harmless error because the failure to comply with that provision denied Mexico time to defend its interests. Mexico submits that Guatemala is also wrong to assert that the Panel has made the burden of proof impossible to fulfil. Guatemala simply failed to prove what it had to prove.


        3. Article 5.3 of the Anti-Dumping Agreement


      7. In Mexico's view, contrary to what Guatemala claims, Article 5.3 of the Anti-Dumping Agreement does not simply oblige an authority to examine the accuracy and adequacy of the evidence. The wording of that Article clearly indicates that the object and purpose of the examination is "to determine whether there is sufficient evidence to justify the initiation of an investigation". By revealing that the evidence is accurate and adequate, the examination does not ensure that the evidence is "sufficient", since these are different things. The authority must, therefore, examine the accuracy, adequacy and the sufficiency of the evidence. Mexico contends that Guatemala's interpretation would allow groundless investigations to be initiated and is, therefore, contrary to the purpose of Article 5.3.


      8. Mexico believes that Article 5.8 of the Anti-Dumping Agreement resolves all doubt that an authority must have sufficient evidence to initiate an investigation. It states not only that an investigation shall be terminated as soon as the authorities are satisfied that there is not sufficient evidence but also that "[a]n application … shall be rejected" if there is insufficient evidence. (emphasis added)


      9. As regards the relevance of Article 2 of the Anti-Dumping Agreement, Mexico asserts that Guatemala is trying to confuse the issue by arguing that Article 2 conflicts with Article 5.2. There is,

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        however, no conflict and the provisions are complementary. Moreover, given the opening words of Article 2.1 ("For the purpose of this Agreement … "), the definition provided in Article 2 of the term "dumping" applies to all provisions of the Agreement and to all stages of an investigation. Mexico maintains that, if this were not so, there would be no other way to define the term "dumping". Mexico argues that the definition provided in Article 3.7 of the Anti-Dumping Agreement of "threat of material injury" also applies throughout that Agreement and, therefore, at all stages of an investigation.31 Moreover, although Article 5.2 refers expressly to paragraphs 2 and 4 of Article 3, it does so purely by way of illustration. Article 5.2 of the Anti-Dumping Agreement therefore envisages that other factors, such as those listed in Article 3.7, may also be relevant under Article 5.2. Finally, as regards Guatemala's argument on Article 12 of the Anti-Dumping Agreement, Mexico submits that the Panel did not find that this Article required reference to be made in the public notice to the need to make a "fair comparison" or to the factors mentioned in Article 3.7. Rather, the Panel concluded that it could find no trace in the documentary file of the assertions Guatemala made in this respect.


      10. With respect to the information referred to in footnote 242 of the Panel Report, Mexico states that the Panel refused to take it into consideration not because, as Guatemala claims, it was not mentioned in the public notice, but because the Panel could find no trace of this information anywhere in the administrative record for the investigation. Guatemala's claim that it is not necessary for an authority to reveal what additional evidence it may have taken into consideration amounts to a flagrant violation of the principles of procedural transparency and legal security. Affected parties would not have the slightest idea of the basis on which decisions were taken, and investigations could be commenced groundlessly in the knowledge that errors and omissions could be rectified subsequently.


      11. According to Mexico, Guatemala's argument that information supplied in an application does not need to be capable of objective evaluation is also flawed in several respects. Guatemala confuses the word "evidence" used in the first sentence of Article 5.2 of the Anti-Dumping Agreement with the word "information" that is used in the third sentence. In addition, the second sentence of Article 5.2 provides that "[s]imple assertion, unsubstantiated by relevant evidence" does not satisfy the requirements of that paragraph. It would, in any event, be absurd to deny that "evidence" is something whose accuracy and adequacy can be objectively evaluated. In both the exact sciences and in law, a piece of evidence that cannot be objectively evaluated is not "evidence".


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        31See footnote 9 and the chapeau to Article 5.2 of the Anti-Dumping Agreement.

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      12. Mexico does not agree that the Panel misinterpreted Article 17.6(i) in reviewing the Guatemalan authority's evaluation of the evidence. The text of Article 17.6(i) does not require the complaining Member to show bias or subjectivity. Rather, it requires a panel to determine whether the investigating authority acted in an unbiased and objective manner. Mexico asserts that Guatemala's subsidiary argument that the Panel carried out a de novo review of the facts questions the impartiality of the Panel and is not substantiated by any evidence. Furthermore, no definition of the expression "de novo review" is given by Guatemala, nor does the Anti-Dumping Agreement offer any assistance. The Panel has, in any event, clearly explained the way in which Guatemala failed properly to establish the facts and the reasons why an unbiased and objective authority could not have acted as the Guatemalan authority did.


      13. Mexico also believes that Guatemala has confused the standard of review a panel must apply under Article 17.6(i) with the obligations of sufficiency of evidence that were addressed in United States - Softwood Lumber and that are imposed on the investigating authority.


      14. Finally, Mexico submits that the Panel's conclusion that Guatemala initiated an investigation in violation of Article 5.3 of the Anti-Dumping Agreement is irrefutably correct because the Guatemalan authority in this case acted on the basis of simple assertions by the applicant and not on the basis of accurate, adequate and sufficient evidence.


  3. United States – Third Participant


  1. The United States considers that this is a "difficult" case. On the one hand, Guatemala has violated its obligations under the Anti-Dumping Agreement by initiating the investigation without sufficient evidence, while, on the other hand, Mexico has failed to comply with the provisions of the DSU since it did not properly identify the measure challenged. The United States believes that the Panel should have found that Mexico's request for the establishment of a panel was inconsistent with Article 17.4 of the Anti-Dumping Agreement, and it should, therefore, have dismissed Mexico's complaint, leaving Mexico free to file a new and proper request with the DSB.

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    1. Whether the Dispute was Properly Before the Panel


  2. The United States submits that the Panel erred in concluding that the provisions of Article 17 of the Anti-Dumping Agreement "replace" the provisions of the DSU.32 According to Article 1.2 of the DSU, it is only in the event of a "difference" that the special or additional rules and procedures in Appendix 2 prevail over the provisions of the DSU. If, as in the case of Articles 4 and 6 of the DSU and Article 17 of the Anti-Dumping Agreement, a Member can comply with both the special or additional rules and the provisions of the DSU, there is no "difference" between them and no need for the former provisions to "prevail" over the latter. In such a situation, the special or additional provisions supplement rather than supplant the provisions of the DSU. The United States argues that the Panel also erred in according Article 17.3 of the Anti-Dumping Agreement the status of a special or additional rule or procedure because that provision is not identified as such in Appendix 2 of the DSU.


  3. According to the United States, if the rules of the Vienna Convention are applied to Article 17 of the Anti-Dumping Agreement and to the DSU it is clear that the Panel's "replacement doctrine" rests on an impermissible interpretation of the DSU and the Anti-Dumping Agreement. First, it is inconsistent with the plain text of those agreements. Second, if applied to other covered agreements (e.g., the Subsidies Agreement), it would fundamentally alter the rights and obligations under those agreements. Third, it would frustrate the object and purpose of the dispute settlement provisions of the DSU and the Anti-Dumping Agreement, thus undermining the ability of the DSU to serve as a unifying force in WTO dispute settlement.


  4. Furthermore, the United States believes that, contrary to the Panel's views, Article 17.4 of the Anti-Dumping Agreement imposes a "jurisdictional requirement" on a panel such that one of the three anti-dumping measures mentioned in Article 17.4 must be identified as part of the "matter" in dispute. The United States emphasizes that Panels may, nonetheless, examine claims directed against those measures that relate to the initiation and conduct of an anti-dumping investigation. In the view of the United States, this jurisdictional requirement serves the purpose of ensuring that all the matters which relate to a single anti-dumping measure will be heard by one panel.


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    32Panel Report, para. 7.16.

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    2. Article 5.3 of the Anti-Dumping Agreement


  5. According to the United States, the Panel did not err in rejecting Guatemala's arguments on the interpretation of Articles 5.2 and 5.3 of the Anti-Dumping Agreement. The Panel was also correct in finding that the Guatemalan investigating authority did not have before it sufficient evidence of dumping, injury and causal link to justify initiation of the investigation. The United States wishes to stress, however, that the Panel's determination on these points is stated narrowly. In particular, according to the United States, the Panel did not attempt to define either a standard of sufficiency under Article 5.3 or the precise relationship between that provision and Article 5.2 of the Anti- Dumping Agreement. The United States maintains that the Appellate Body's findings on this issue should be equally narrow.


  6. Finally, with respect to footnote 242 of the Panel Report, the United States submits that the Appellate Body should reject Guatemala's argument that Article 12.1.1 of the Anti-Dumping Agreement does not oblige an investigating authority to indicate that a decision to initiate was based on information which was not contained in the application filed pursuant to Article 5.2. Any other reading of Article 12.1.1 would allow investigating authorities to conceal the grounds upon which they decided to initiate an investigation. The Panel's refusal in footnote 242 to consider post hoc the additional information offered by Guatemala is also consistent with the findings of the panels in United States – Restrictions on Imports of Cotton and Man-Made Fibre Underwear33 and United

    States – Shirts and Blouses34, since in both of those disputes, the panels refused to consider evidence

    that was not available at the time the importing Member made its determination to impose measures.


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    33Adopted 25 February 1997, WT/DS24/R.

    34Adopted 23 May 1997, WT/DS33/R.

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    1. Issues Raised in this Appeal


  7. The appellant, Guatemala, raises the following preliminary issue in this appeal:


    Whether the Panel erred in law in finding that this dispute was properly before it, and, in particular:


    1. whether the Panel erred in finding that Article 17 of the Anti-Dumping Agreement "provides for a coherent set of rules for dispute settlement specific to anti-dumping cases … that replaces the more general approach of the DSU"; and


    2. whether the Panel erred in concluding that, in a dispute brought under the Anti- Dumping Agreement, it was not limited to examining the consistency with the Anti-Dumping Agreement of one of the three specific types of "measure" identified in Article 17.4 of that Agreement (that is, a definitive anti-dumping duty, the acceptance of a price undertaking, or a provisional measure).


  8. In the alternative, if we should find that this dispute was properly before the Panel, Guatemala raises the following issues:


    1. whether the Panel erred in making recommendations under Article 19.1 of the DSU that concerned "actions" rather than specific anti-dumping measures;


    2. whether the Panel was entitled to make a suggestion under Article 19.1 of the DSU concerning the final anti-dumping duty if that measure lay outside the Panel's terms of reference, and given that the Panel's recommendation referred to "actions", not "measures";


    3. whether the Panel correctly concluded that Guatemala had not successfully rebutted the presumption of nullification or impairment under Article 3.8 of the DSU arising from the Panel's finding that Guatemala had acted inconsistently with Article 5.5 of the Anti-Dumping Agreement; and

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    4. whether the Panel correctly interpreted and applied Article 5.3 of the Anti-Dumping Agreement in determining that Guatemala had not initiated the anti-dumping investigation consistently with its obligations under that provision.


    1. Whether This Dispute Was Properly Before the Panel


  9. With respect to the question whether this dispute was properly before it, the Panel concluded as follows:


    In view of the above, we reject the argument that a panel may only consider a specific identified "measure" in an anti-dumping dispute. Thus, we conclude that a claim that a Member has acted in a manner inconsistent with its obligations under the ADP Agreement may be presented to a Panel for consideration, and therefore that the matters referred to in Mexico's request for establishment of a panel are properly before us.35


  10. The Panel reached this conclusion on the basis of two alternative lines of reasoning. Under the first line of reasoning, it found the following:


    This interpretation of the provisions of Article 17 provides for a coherent set of rules for dispute settlement specific to anti-dumping cases, taking account of the peculiarities of challenges to anti- dumping investigations and determinations, that replaces the more general approach of the DSU. … In anti-dumping cases, the matter in dispute may not be the final measure in and of itself (or the provisional measure or any price undertaking), but may rather be an action taken, or not taken, during the course of the investigation. … 36 (emphasis added)



    Thus, we read Article 17.4 as a timing provision, establishing when a panel may be requested, rather than a provision setting forth the appropriate subject of a request for establishment of a panel … 37


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    35Panel Report, para. 7.27. 36Panel Report, para. 7.16. 37Panel Report, para. 7.18.

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  11. In its alternative line of reasoning, the Panel assumed "that the dispute settlement provisions of the ADP Agreement (Articles 17.3, 17.4, and 17.5 in particular) did not represent a coherent dispute settlement scheme which replaces the more general provisions of the DSU".38 Under this line of reasoning, it found that:


    The terms of the DSU and GATT 1994 itself, as well as past GATT practice and evolving WTO practice, support the conclusion that the DSU does not preclude a panel from examining whether a Member's initiation and conduct of an anti-dumping investigation is consistent with its WTO obligations.39



    The question then is whether the references to the term "measure" in various provisions of the DSU should be interpreted as narrowing the rights and causes of action set forth in Article XXIII by limiting the range of alleged violations of the GATT 1994 (and of other WTO Agreements) that could be subject to dispute settlement to those based on specified "measures". … [I]t seems more likely that the term "measure" should be interpreted broadly in order to give effect to the substantive provisions of the WTO Agreement. To read "measure" narrowly would mean that a variety of violations of obligations which do not involve specified or identifiable measures would be outside the scope of the dispute settlement system. This is not an approach to be taken lightly unless such an intention can be clearly ascertained from the text of the DSU. In our view, no such intention can be drawn from the text of the DSU.40



    It thus seems clear to us that the use of the term "measure" in the DSU should be understood as a shorthand reference to the many and varied situations in which obligations under the WTO Agreements might not be fulfilled by a Member, giving rise to a dispute, for which a resolution process is provided in the DSU.41


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    38Panel Report, para. 7.22.

    39Ibid.

    40Panel Report, para. 7.24.

    41Panel Report, para. 7.26.

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  12. We now turn to the provisions of the DSU and the Anti-Dumping Agreement which pertain to this issue. Article 1.1 of the DSU reads, in relevant part:


    The rules and procedures of this Understanding shall apply to disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this Understanding (referred to in this Understanding as the "covered agreements"). (emphasis added)


  13. Article 1.2 of the DSU provides, in relevant part:


    The rules and procedures of this Understanding shall apply subject to such special or additional rules and procedures on dispute settlement contained in the covered agreements as are identified in Appendix 2 to this Understanding. To the extent that there is a difference between the rules and procedures of this Understanding and the special or additional rules and procedures set forth in Appendix 2, the special or additional rules and procedures in Appendix 2 shall prevail. (emphasis added)


  14. Article 6.2 of the DSU reads, in relevant part:


    The request for the establishment of a panel shall be made in writing. It shall … identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. (emphasis added)


  15. Article 17 of the Anti-Dumping Agreement contains the consultation and dispute settlement provisions of that Agreement. Paragraphs 4 through 7 of Article 17 are listed as special or additional rules and procedures in Appendix 2 of the DSU; paragraphs 1 through 3 of Article 17 are not. Article 17.4 reads as follows:


    If the Member that requested consultations considers that the consultations pursuant to paragraph 3 have failed to achieve a mutually agreed solution, and if final action has been taken by the administering authorities of the importing Member to levy definitive anti-dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB"). When a provisional measure has a significant impact and the Member that requested consultations considers that the measure was taken contrary to the provisions of paragraph 1 of Article 7, that Member may also refer such matter to the DSB. (emphasis added)

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  16. As to the Panel's interpretation of the relationship between Article 17 of the Anti-Dumping Agreement and the rules and procedures of the DSU, Article 1.1 of the DSU establishes an integrated dispute settlement system which applies to all of the agreements listed in Appendix 1 to the DSU (the "covered agreements"). The DSU is a coherent system of rules and procedures for dispute settlement which applies to "disputes brought pursuant to the consultation and dispute settlement provisions of" the covered agreements.42 The Anti-Dumping Agreement is a covered agreement listed in Appendix 1 of the DSU; the rules and procedures of the DSU, therefore, apply to disputes brought pursuant to the consultation and dispute settlement provisions contained in Article 17 of that Agreement. Under Article 17.3 of the Anti-Dumping Agreement, consultations may be requested by a Member, if that Member "considers that any benefit accruing to it, directly or indirectly, under this Agreement is being nullified or impaired, or that the achievement of any objective is being impeded, by another Member or Members". Article 17.3 of the Anti-Dumping Agreement is not listed in Appendix 2 of the DSU as a special or additional rule and procedure. It is not listed precisely because it provides the legal basis for consultations to be requested by a complaining Member under the Anti-Dumping Agreement. Indeed, it is the equivalent provision in the Anti-Dumping Agreement to Articles XXII and XXIII of the GATT 1994, which serve as the basis for consultations and dispute settlement under the GATT 1994, under most of the other agreements in Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization43 (the "WTO Agreement"), and under the Agreement on Trade-Related Aspects of Intellectual Property Rights (the "TRIPS Agreement").


  17. Article 1.2 of the DSU provides that the "rules and procedures of this Understanding shall apply subject to such special or additional rules and procedures on dispute settlement contained in the covered agreements as are identified in Appendix 2 to this Understanding." (emphasis added) It states, furthermore, that these special or additional rules and procedures "shall prevail" over the provisions of the DSU "[t]o the extent that there is a difference between" the two sets of provisions (emphasis added) Accordingly, if there is no "difference", then the rules and procedures of the DSU apply together with the special or additional provisions of the covered agreement. In our view, it is only where the provisions of the DSU and the special or additional rules and procedures of



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    42DSU, Article 1.1.

    43Articles XXII and XXIII of the GATT 1994 are not expressly incorporated by reference into the Anti- Dumping Agreement as they are into all of the other Annex 1A agreements, with the exception of the Agreement on Textiles and Clothing and the Agreement on Implementation of Article VII of the GATT 1994. As a result, contrary to the Panel's assumptions in paras. 7.23 and 7.24 of the Panel Report, Article XXIII of the GATT 1994 does not apply to disputes brought under the Anti-Dumping Agreement. On the contrary, Articles 17.3 and 17.4 of the Anti-Dumping Agreement are the "consultation and dispute settlement provisions" pursuant to which disputes may be brought under that covered agreement.

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    a covered agreement cannot be read as complementing each other that the special or additional provisions are to prevail. A special or additional provision should only be found to prevail over a provision of the DSU in a situation where adherence to the one provision will lead to a violation of the other provision, that is, in the case of a conflict between them. An interpreter must, therefore, identify an inconsistency or a difference between a provision of the DSU and a special or additional provision of a covered agreement before concluding that the latter prevails and that the provision of the DSU does not apply.


  18. We see the special or additional rules and procedures of a particular covered agreement as fitting together with the generally applicable rules and procedures of the DSU to form a comprehensive, integrated dispute settlement system for the WTO Agreement. The special or additional provisions listed in Appendix 2 of the DSU are designed to deal with the particularities of dispute settlement relating to obligations arising under a specific covered agreement, while Article 1 of the DSU seeks to establish an integrated and comprehensive dispute settlement system for all of the covered agreements of the WTO Agreement as a whole. It is, therefore, only in the specific circumstance where a provision of the DSU and a special or additional provision of another covered agreement are mutually inconsistent that the special or additional provision may be read to prevail over the provision of the DSU.


  19. Clearly, the consultation and dispute settlement provisions of a covered agreement are not meant to replace, as a coherent system of dispute settlement for that agreement, the rules and procedures of the DSU. To read Article 17 of the Anti-Dumping Agreement as replacing the DSU system as a whole is to deny the integrated nature of the WTO dispute settlement system established by Article 1.1 of the DSU. To suggest, as the Panel has44, that Article 17 of the Anti-Dumping Agreement replaces the "more general approach of the DSU" is also to deny the application of the often more detailed provisions of the DSU to anti-dumping disputes. The Panel's conclusion is reminiscent of the fragmented dispute settlement mechanisms that characterized the previous GATT 1947 and Tokyo Round agreements; it does not reflect the integrated dispute settlement system established in the WTO.


  20. For these reasons, we conclude that the Panel erred in finding that Article 17 of the Anti- Dumping Agreement "provides for a coherent set of rules for dispute settlement specific to anti- dumping cases … that replaces the more general approach of the DSU."45



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    44Panel Report, para. 7.16.

    45Ibid.

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  21. In its alternative line of reasoning, the Panel gave the term "measure" a broad reading. It found that this term is a "shorthand reference to the many and varied situations in which obligations under the WTO Agreements might not be fulfilled."46 Given this statement and the reasoning in paragraph 7.24 of the Panel Report, it appears to us that the Panel reads the term "measure" as synonymous with allegations of violations of the GATT 1994 and the other covered agreements. As a consequence, the Panel blurs the distinction between a "measure"47 and "claims" of nullification or impairment of benefits.48 However, Article 6.2 of the DSU requires that both the "measure at issue" and the "legal basis for the complaint" (or the "claims") be identified in a request for the establishment of a panel. As we understand the Panel, it would, in effect, suffice, under Article 6.2 of the DSU, for a panel request to identify only the "legal basis for the complaint", without identifying the "specific measure at issue". This is inconsistent with the plain language of Article 6.2 of the DSU. For these

    reasons, we do not agree with the Panel's finding in the first sentence of paragraph 7.26 of the Panel Report.


  22. In view of the fact that we have reversed both of the Panel's findings that led it to conclude that this dispute was properly before it, we must now address this question ourselves.49 Article 17.4 of the Anti-Dumping Agreement allows a Member to refer a "matter" to the DSB when certain specified conditions are satisfied. The word "matter" also appears in paragraphs 2, 3, 5 and 6 of Article 17. It is the key concept in defining the scope of a dispute that may be referred to the DSB under the Anti- Dumping Agreement and, therefore, in identifying the parameters of a panel's terms of reference in an anti-dumping dispute. According to the rules of interpretation set out in Article 31 of the Vienna Convention, the meaning of a term is to be determined by reference to its ordinary meaning, read in light of its context, and the object and purpose of the treaty.


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    46Panel Report, para. 7.26.

    47In the practice established under the GATT 1947, a "measure" may be any act of a Member, whether or not legally binding, and it can include even non-binding administrative guidance by a government (see Japan – Trade in Semi-Conductors, adopted 4 May 1988, BISD 35S/116). A measure can also be an omission or a failure to act on the part of a Member (see, for example, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, complaint by the United States, WT/DS50/R and WT/DS50/AB/R, adopted 16 January 1998, and also India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, complaint by the European Communities and its Member States, WT/DS79/R, adopted 22 September 1998).

    48Infra, paras. 72 and 73.

    49We note that since the Panel's terms of reference in this case referred exclusively to only one document -- the request for the establishment of a panel submitted by Mexico to the DSB (WT/DS60/2, G/ADP/D3/2, 13 February 1997) -- there is no need for us to address the request for consultations (WT/DS60/1, G/ADP/D3/1, 24 October 1996) in this case.

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  23. The word "matter" has many ordinary meanings, the most appropriate of which in this context is "substance" or "subject-matter".50 Although the ordinary meaning is rather broad, it indicates that the "matter" is the substance or subject-matter of the dispute.


  24. The word "matter" appears in Article 7 of the DSU, which provides the standard terms of reference for panels. Under this provision, the task of a panel is to examine "the matter referred to the DSB". These words closely echo those of Article 17.4 of the Anti-Dumping Agreement and, in view of the integrated nature of the dispute settlement system, form part of the context of that provision. Article 7 of the DSU itself does not shed any further light on the meaning of the term "matter". However, when that provision is read together with Article 6.2 of the DSU, the precise meaning of the term "matter" becomes clear. Article 6.2 specifies the requirements under which a complaining Member may refer a "matter" to the DSB: in order to establish a panel to hear its complaint, a Member must make, in writing, a "request for the establishment of a panel" (a "panel request"). In addition to being the document which enables the DSB to establish a panel, the panel request is also usually identified in the panel's terms of reference as the document setting out "the matter referred to the DSB". Thus, "the matter referred to the DSB" for the purposes of Article 7 of the DSU and Article 17.4 of the Anti-Dumping Agreement must be the "matter" identified in the request for the establishment of a panel under Article 6.2 of the DSU. That provision requires the complaining Member, in a panel request, to "identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly." (emphasis added) The "matter referred to the DSB", therefore, consists of two elements: the specific measures at issue and the legal basis of the complaint (or the claims).


  25. In our Report in Brazil – Coconut, we agreed with previous panels established under the GATT 1947, as well as under the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade51, "that the 'matter' referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference." 52 Statements in two of the panel reports cited by us in that case clarify further the relationship between the "matter", the "measures" at issue and the "claims". In United States – Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway53,


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    50C.T. Onions (ed.), The Shorter Oxford English Dictionary, Vol. II, p. 1291 (Guild Publishing, 1983).

    51BISD 26S/171.

    52Adopted 20 March 1997, WT/DS22/AB/R, p. 22.

    53Adopted 27 April 1994, BISD 41S/229, para. 342.

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    the panel found that "the 'matter' consisted of the specific claims stated by Norway … with respect to the imposition of these duties".54 (emphasis added) A distinction is therefore to be drawn between the "measure" and the "claims". Taken together, the "measure" and the "claims" made concerning that measure constitute the "matter referred to the DSB", which forms the basis for a panel's terms of reference.


  26. Having said this, we are aware that the Panel found that Article 17.5 of the Anti-Dumping Agreement does not specifically require a panel request in an anti-dumping dispute to "identify the specific measures at issue".55 The Panel concluded that Article 17.5 of the Anti-Dumping Agreement prevails over Article 6.2 of the DSU.56 We consider, however, that the Panel erred in reaching this conclusion. Certainly, Article 17.5 does not expressly require the complaining Member's request for the establishment of a panel to identify the "specific measures at issue" or "to provide a brief summary of the legal basis of the complaint". Indeed, Article 17.5 contains none of the explicit, detailed procedural requirements that Article 6.2 of the DSU imposes on a request for the establishment of a

    panel. All that Article 17.5 requires is that a request by a complaining party contain:


    1. a written statement of the Member making the request indicating how a benefit accruing to it, directly or indirectly, under this Agreement has been nullified or impaired, or that the achieving of the objectives of the Agreement is being impeded, and


    2. the facts made available in conformity with appropriate domestic procedures to the authorities of the importing Member.


  27. The fact that Article 17.5 contains these additional requirements, which are not mentioned in Article 6.2 of the DSU, does not nullify, or render inapplicable, the specific requirements of Article 6.2 of the DSU in disputes brought under the Anti-Dumping Agreement. In our view, there is no inconsistency between Article 17.5 of the Anti-Dumping Agreement and the provisions of Article 6.2 of the DSU. On the contrary, they are complementary and should be applied together. A panel request made concerning a dispute brought under the Anti-Dumping Agreement must therefore comply with the relevant dispute settlement provisions of both that Agreement and the DSU. Thus,


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    54United States – Imposition of Countervailing Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, adopted 28 April 1994, BISD 41S/576, para. 212, contains an identical phrase.

    55Panel Report, para. 7.15.

    56Ibid.

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    when a "matter" is referred to the DSB by a complaining party under Article 17.4 of the Anti- Dumping Agreement, the panel request must meet the requirements of Articles 17.4 and 17.5 of the Anti-Dumping Agreement as well as Article 6.2 of the DSU.


  28. The Panel was correct in saying that the term "matter" has the same meaning in paragraphs 3, 4 and 5 of Article 17 of the Anti-Dumping Agreement.57 What is more important, however, is that the word "matter" has the same meaning in Article 17 of the Anti-Dumping Agreement as it has in Article 7 of the DSU. It consists of two elements: the specific "measure" and the "claims" relating to it, both of which must be properly identified in a panel request as required by Article 6.2 of the DSU.


  29. The Panel found that Article 17.4 of the Anti-Dumping Agreement is a "timing provision" rather than "a provision setting forth the appropriate subject of a request for establishment of a panel."58 (emphasis added) We do not agree. Where a complaining Member wishes to make any claims concerning an action taken, or not taken, in the course of an anti-dumping investigation under the provisions of the Anti-Dumping Agreement, Article 6.2 of the DSU requires "the specific measures at issue" to be identified in the panel request.


  30. For disputes brought under the Anti-Dumping Agreement, we must consider the provisions of that Agreement to determine what may constitute a "specific measure". We note, first of all, that Article 1 of the Anti-Dumping Agreement makes a distinction between an "anti-dumping measure" and "investigations". It provides, in part, that:


    An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of the GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement … (emphasis added)


  31. Furthermore, Article 17.4 of the Anti-Dumping Agreement specifies the types of "measure" which may be referred as part of a "matter" to the DSB. Three types of anti-dumping measure are specified in Article 17.4: definitive anti-dumping duties, the acceptance of price undertakings, and provisional measures. According to Article 17.4, a "matter" may be referred to the DSB only if one of the relevant three anti-dumping measures is in place. This provision, when read together with Article 6.2 of the DSU, requires a panel request in a dispute brought under the Anti-Dumping Agreement to identify, as the specific measure at issue, either a definitive anti-dumping duty, the acceptance of a price undertaking, or a provisional measure. This requirement to identify a specific anti-dumping measure at issue in a panel request in no way limits the nature of the claims that may be


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    57Panel Report, para. 7.15.

    58Panel Report, para. 7.18.

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    brought concerning alleged nullification or impairment of benefits or the impeding of the achievement of any objective in a dispute under the Anti-Dumping Agreement. As we have observed earlier, there is a difference between the specific measures at issue -- in the case of the Anti-Dumping Agreement, one of the three types of anti-dumping measure described in Article 17.4 -- and the claims or the legal basis of the complaint referred to the DSB relating to those specific measures. In coming to this conclusion, we note that the language of Article 17.4 of the Anti-Dumping Agreement is unique to that Agreement.


  32. For all of these reasons, we conclude that the Panel erred in finding that Mexico did not need to identify "specific measures at issue" in this dispute. We find that in disputes under the Anti- Dumping Agreement relating to the initiation and conduct of anti-dumping investigations, a definitive anti-dumping duty, the acceptance of a price undertaking or a provisional measure must be identified as part of the matter referred to the DSB pursuant to the provisions of Article 17.4 of the Anti- Dumping Agreement and Article 6.2 of the DSU.


    1. The Panel's Terms of Reference


  33. We now turn to consider whether the Panel's terms of reference did, in fact, entitle it to consider the claims made by Mexico concerning the initiation and subsequent conduct of the investigation by the Guatemalan authority. The Panel's terms of reference in this case59 were defined exclusively by reference to the request for establishment of a panel submitted by Mexico to the DSB.60 In light of what we have said above concerning the proper interpretation of Article 17 of the Anti-Dumping Agreement, the Panel was entitled to examine Mexico's claims concerning the initiation and conduct of the investigation in this case only if the panel request properly identified a relevant anti-dumping measure as the "specific measure at issue" in accordance with Article 6.2 of the DSU.



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    59WT/DS60/3, G/ADP/D3/3, 5 May 1997.

    60WT/DS60/2, G/ADP/D3/2, 13 February 1997.

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  34. The second and third paragraphs of Mexico's panel request state the following:


    As the consultations did not produce a satisfactory solution to the matter (as is shown by the fact that the Government of Guatemala not only did not revoke the provisional anti-dumping duties but increased them in the final resolution to a level of 89.54 per cent, well above the amount claimed by the petitioner), and taking into account that the time-period established for conducting consultations under Article 4 of the DSU has been amply exceeded, the Government of Mexico requests that at the next meeting of the Dispute Settlement Body, scheduled for 25 February 1997, a dispute settlement panel be established to examine the consistency of the anti-dumping investigation by the Government of Guatemala into Guatemalan imports of portland cement from Mexico with Guatemala's obligations under the WTO, in particular those contained in the Anti-Dumping Agreement.


    The Government of Mexico requests that the Panel examine, find and rule that the anti-dumping investigation in question is incompatible with Guatemala's obligations under the AD. Mexico considers that in the anti-dumping investigation in question actions were taken that are inconsistent with, at least, Articles VI of the General Agreement on Tariffs and Trade 1994, and 2, 3, 5, 6 and 7 of the Anti-Dumping Agreement and Annex I thereto. By way of example, the aspects of the investigation presenting the main inconsistencies with the Anti- Dumping Agreement are highlighted below.


  35. The examples Mexico then gives of the "main inconsistencies" are claims of alleged violations of certain provisions of the Anti-Dumping Agreement relating to the "initiation" of the investigation, the "preliminary resolution", and the "final stage of the proceeding".


  36. Although it is clear from its panel request that Mexico made legal claims relating to the three previously-mentioned actions in the investigation by the Guatemalan authority, it is not immediately apparent from the language of its panel request whether Mexico properly identified one of the three types of measure specified in Article 17.4 of the Anti-Dumping Agreement as the specific measure at issue in this dispute. In response to questions posed by us at the oral hearing on 2 October 1998, Mexico stated that, when it referred to the "final resolution" in parenthesis in the second paragraph of its panel request, it had in mind the final determination, and not the final anti-dumping duty. However, Mexico clarified that it did not intend to challenge what was mentioned in that paragraph, but that it was "just providing some information".61 This is confirmed by the Panel's observation62



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    61Response by Mexico to questioning at the oral hearing.

    62Panel Report, para. 7.19.

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    that Mexico had indicated that, if it wanted to challenge the final determination, it would have requested consultations and the establishment of a panel to examine that matter.63


  37. Throughout the proceedings, both before the Panel and before us, Mexico insisted repeatedly that actions taken in the course of an investigation could constitute either a measure or a matter for the purposes of a dispute brought under the Anti-Dumping Agreement.64 It maintained consistently that, in the context of an anti-dumping dispute, it is not necessary to identify one of the three types of anti-dumping measure mentioned in Article 17.4 of that Agreement.65 However, Mexico drew a distinction between the three actions relating to the conduct of the investigation that it had challenged, and what it had requested the Panel to recommend if its claims regarding those actions were established.66 In this context, Mexico requested that the Panel recommend the revocation of the final anti-dumping duty if Mexico's claims of violation were established.67 Mexico argued that the final anti-dumping duty would necessarily be vitiated if the initiation and conduct of the investigation was found to be inconsistent with Guatemala's obligations under the Anti-Dumping Agreement. Mexico, therefore, did not see any need to identify either the final, definitive anti-dumping duty or the provisional measure as the "specific measure at issue" in its panel request.


  38. In view of the terms of Mexico's panel request, read in light of Mexico's own explanation of that document, we conclude that its panel request did not identify the final anti-dumping duty as the "specific measure at issue", as is required by Article 6.2 of the DSU. Mexico's panel request refers only to the three actions taken during the course of the investigation by the Guatemalan authority as the "matters in issue", and does not specifically identify the final, definitive anti-dumping duty. The fact that Mexico requested the Panel to revoke the final duty if its claims of violation were established does not mean that the final duty was thereby identified as the "measure at issue" in terms of Article 6.2 of the DSU. Mexico's request that the Panel recommend revocation of the final duty in the event that it were to find that Mexico's claims of violation were properly established, does not, in our


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    63In addition, we note that Mexico stated, in a corrigendum to its second written submission to the Panel, that it was not challenging the final determination in these proceedings. See Panel Report, footnote 1.

    64Response by Mexico to questioning at the oral hearing; response by Mexico to questioning by the Panel; second written submission of Mexico to the Panel; and, oral statement by Mexico at the second meeting of the Panel with the parties.

    65Ibid.

    66Response by Mexico to questioning at the oral hearing; first written submission of Mexico to the Panel; response by Mexico to questioning by the Panel; second written submission of Mexico to the Panel; and, oral statement by Mexico at the second meeting of the Panel with the parties.

    67Mexico explicitly requested revocation of the final duty for the first time in its first written submission to the Panel.

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    view, overcome the fact that Mexico's panel request does not specifically identify the final anti- dumping duty as the measure at issue.


  39. After considering the terms of the panel request, and in light of Mexico's express statements at the oral hearing68, we also conclude that the provisional measure was not properly identified as the specific measure at issue in Mexico's panel request. Therefore, we find that the provisional measure was not properly before the Panel.


  40. Since this case does not involve the acceptance of a price undertaking, we must, therefore, conclude that the Panel erred in finding that it was entitled to examine Mexico's claims concerning Guatemala's three actions relating to the initiation and conduct of the anti-dumping investigation. In view of its erroneous interpretation of Article 17.4 of the Anti-Dumping Agreement and of Article 6.2 of the DSU, the Panel did not consider whether Mexico had properly identified a relevant anti- dumping measure in its panel request and, therefore, it erred in finding that this dispute was properly before it.


  41. Having found that this dispute was not properly before the Panel, we consider that the merits of Mexico's claims in this case are not properly before us. Therefore, we cannot consider any of the substantive issues raised in the alternative by Guatemala in this appeal. Accordingly, we have no choice but to come to no conclusions as to whether the Panel was right or wrong in finding that Guatemala had acted inconsistently with its obligations under Articles 5.3 and 5.5 of the Anti- Dumping Agreement or in making its recommendations and suggestion under Article 19.1 of the DSU. Our finding that the Panel was not entitled, under its terms of reference, to examine Mexico's claims in this case in no way precludes Mexico from seeking consultations with Guatemala regarding the latter's imposition of definitive anti-dumping duties on imports of portland cement from Mexico and from pursuing another dispute settlement complaint under the provisions of Article 17 of the Anti-Dumping Agreement and of the DSU.


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    68As noted above, Mexico stated, in response to questions at the oral hearing, that it was not challenging what was mentioned in parenthesis in the second paragraph of its panel request.

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    1. Findings and Conclusions


  42. For the reasons set out in this Report, the Appellate Body:


  1. reverses the Panel's finding in paragraph 7.16 of the Panel Report that Article 17 of the Anti-Dumping Agreement "provides for a coherent set of rules for dispute settlement specific to anti-dumping cases … that replaces the more general approach of the DSU";


  2. reverses the Panel's alternative finding in paragraph 7.26 of the Panel Report relating to the term "measure"; and


  3. reverses the Panel's conclusion in paragraph 7.27 of the Panel Report that "the matters referred to in Mexico's request for establishment of a panel" were properly before it.

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Signed in the original at Geneva this 15th day of October 1998 by:


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Julio Lacarte-Muró Presiding Member


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Christopher Beeby Said El-Naggar

Member Member