USTR - United States Wins WTO Challenge Against Mexican Rice Duties
                 
The Office of the United States Trade Representative

United States Wins WTO Challenge Against Mexican Rice Duties
06/07/2005


WASHINGTON - United States Trade Representative Rob Portman announced that a WTO panel has sided with the United States in an agricultural dispute involving Mexican antidumping duties on U.S. long grain white rice. In its report issued yesterday, the WTO panel agreed with the United States that Mexico's antidumping duties on rice and various provisions of its antidumping and countervailing duty laws are contrary to WTO rules.

Mexico is an important and growing export market for U.S. rice farmers. In 2004, Mexico imported approximately $183 million of rice from the United States.

"This is a great result for American rice farmers," said USTR Rob Portman. "Trade remedy laws are an essential part of the international trading system - but those laws must be used in accordance with the rules. Mexico's laws were not applied fairly, and we believe that disadvantaged our rice farmers. We are pleased that the WTO panel agreed. Today's result is another example of how we are working day-in and day-out to enforce our trade agreements."

The panel sided with the United States on all of the major issues in dispute. The panel agreed with the United States that Mexico improperly based its injury analysis on outdated information and failed to examine half of the injury data it collected. The panel also agreed that Mexico improperly applied its antidumping measure to two U.S. exporters that were not dumping. In addition, the panel found that Mexico improperly applied an adverse "facts available" margin to a U.S. exporter that had no shipments during the period of investigation, and that Mexico improperly applied "facts available" margins to U.S. exporters and producers that it did not even investigate. Finally, the panel found that six provisions of Mexico's antidumping and countervailing duty law are inconsistent "as such" with the WTO Antidumping Agreement and the WTO Agreement on Subsidies and Countervailing Measures.

Under WTO rules, both parties will have an opportunity to appeal the panel report to the WTO Appellate Body.

Background

Mexico imposed antidumping duties on U.S. white long grain rice in June 2002. In addition, Mexico passed amendments to its antidumping and countervailing duty laws in December 2002.

The United States requested a WTO dispute settlement panel in September 2003, and the panel was established on November 7, 2003. The U.S. request challenged numerous apparent violations of Mexico's obligations under the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Antidumping Agreement), the Agreement on Subsidies and Countervailing Measures (SCM Agreement), and the General Agreement on Tariffs and Trade 1994 (GATT 1994). These violations relate to various procedures and methodologies Mexican authorities used in the rice investigation, as well as to the requirements of the Mexican legislation.

In particular, the proceeding addressed such issues as Mexico's choice of data used in the investigation, its methodology for determining whether the Mexican industries were injured by reason of dumped imports, its failure to terminate the investigation when it found that no dumping or injury was occurring, its calculations of dumping duty rates applicable to imports, and its non-transparent determinations. The challenged provisions of the Mexican law required Mexico to take such WTO-inconsistent actions as automatically applying excessively high antidumping margins on firms and denying firms the right to obtain reviews of the levels of duties assessed on their exports.