DS: Mexico — Definitive Countervailing Measures on Olive Oil from the European Communities

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Key facts

 

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Latest document

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by the European Communities. 

On 31 March 2006, the European Communities requested consultations with Mexico concerning the imposition by Mexico of definitive countervailing measures on imports of olive oil from the European Communities.

The European Communities claims that the initiation and conduct of the investigations in this case, as well as the imposition of definitive countervailing measures are inconsistent with Mexico's obligations under, inter alia,

• Article VI of GATT 1994.
   
• Articles 1, 10, 11, 12, 13, 14, 15, 16, 19, 22 and 32 of the SCM Agreement.
   
• Articles 13 and 21 of the Agreement on Agriculture.

On 7 December 2006, the European Communities requested the establishment of a panel. At its meeting on 19 December 2006, the DSB deferred the establishment of the panel.

 

Panel and Appellate Body proceedings

At its meeting on 23 January 2007, the DSB established a panel. Canada, China, Norway and the United States reserved their third party rights. Subsequently, Japan reserved its third party rights. On 13 February 2007, the European Communities requested the Director-General to compose the Panel. On 21 February 2007, the Director-General composed the Panel. On 14 November 2007, the Chair of the Panel informed the DSB that it would not be possible to issue its report within six months due to the complexity of issues presented in the case as well as the need to translate the parties' submissions. The Panel expects to issue its final report to the parties by April 2008.

On 4 September 2008, the Panel report was circulated to Members. The Panel concluded that Mexico's definitive countervailing measures on olive oil from the European Communities were inconsistent with the requirements of the SCM Agreement, in that:

(a) Mexico acted inconsistently with Article 11.11 of the SCM Agreement because Economía's investigation in this case was concluded more than 18 months after the date of its initiation, and Article 11.11 does not permit such prolongation under any circumstances;

(b) Mexico acted inconsistently with Article 12.4.1 of the SCM Agreement because Economía failed to require non-confidential summaries of confidential information in sufficient detail to permit a reasonable understanding of the information submitted in confidence, in the absence of sufficient explanations of the existence of exceptional circumstances and of the reasons why summarization was not possible; and

(c) Mexico acted inconsistently with the obligation in Article 15.1 of the SCM Agreement to base the injury determination on positive evidence and pursuant to an objective examination because Economía limited its injury analysis to the periods from April to December of 2000, 2001 and 2002.

The Panel further concluded that the European Communities did not establish that Mexico acted inconsistently with certain obligations under the SCM Agreement, the Agreement on Agriculture and the GATT 1994 in other respects.

In the light of its findings, the Panel found it unnecessary to address the European Communities' claims under Articles 15.1 and 15.4 of the SCM Agreement in respect of Economía's analysis of the volume of subsidized imports and the impact of these imports on prices in the domestic market for the like product and on the domestic industry.

Pursuant to Article 19.1 of the DSU, having found that Mexico has acted inconsistently with provisions of the SCM Agreement as set out above, the Panel recommended that Mexico bring its measures into conformity with that Agreement. The Panel declined to make a suggestion, pursuant to the second sentence of Article 19.1 of the DSU, as to how Mexico should bring its measures into conformity with its obligations.

At its meeting on 21 October 2008, the DSB adopted the Panel report.

 

Implementation of adopted reports

At the DSB meeting on 17 November 2008, Mexico stated that it would implement the DSB recommendations and rulings as soon as possible.

At the DSB meeting on 11 December 2008, Mexico informed the DSB that on 22 January 2008, a domestic court had ordered the Mexican investigating authority to remove the countervailing duties imposed on olive oil from the EC.  Consequently, on 18 November 2008, Mexico had published in the Official Journal of the Federation a resolution for the elimination of the countervailing duties that had been the subject of this dispute, thereby complying with the DSB recommendations and rulings.