GENEVA--The United States has initiated proceedings at the World Trade Organization challenging Mexico's decision to levy antidumping duties on U.S. hog imports.
In a notification dated July 10, the United States said it was requesting consultations with Mexico to discuss its decision last year to impose definitive antidumping duties on imports of live hogs for slaughter.
The Mexican government justified the decision on the grounds that its hog farmers faced the threat of damage due to an increase of U.S. hog imports at below market prices, but the United States claims the investigation that resulted in the duties was not carried out in accordance with WTO rules.
The United States said it is also seeking talks with Mexico to discuss other barriers to cross-border trade in hogs, including an alleged Mexican ban on imported hogs weighing more than 100 kilograms (220 pounds) as well as sanitary and technical regulations that are applicable only to imported swine.
If after 30 days the United States and Mexico fail to resolve their differences, Washington can proceed with a request for the establishment of a WTO dispute settlement panel to rule on its complaints.
Fixed Reference Price
Mexico imposed preliminary antidumping duties on U.S. hog imports Feb. 1, 1999, after the Ministry of Commerce and Industrial Development (Secretaria de Comercio y Fomento Industrial, or SECOFI) found that there was sufficient evidence indicating that price discrimination on the part of U.S. exporters caused damage to Mexico's domestic hog industry. SECOFI imposed the penalties in the form of compensatory duties on live hog imports from the United States that enter Mexico at below a fixed reference price of $1.08 per kilogram. The duties were equivalent to the difference between the actual price of the imported hogs and the fixed reference price.
The preliminary duties were converted into definitive duties by the Mexican government Oct. 20, 1999.
Investigation Flawed
The United States argues that the Mexican dumping investigation violated procedural requirements under Articles 3 and 12 of the WTO's Antidumping Agreement by, among other things, failing to take account of all relevant factors having an impact on the Mexican hog industry and by failing to undertake an objective evaluation of the impact the imported hogs were having on producers. Mexico also allegedly violated Article 6 of the agreement by failing to give U.S. hog exporters adequate opportunity to examine relevant information used by investigating authorities and to prepare counter-arguments based on this information, and by failing to inform U.S. exporters of all essential facts relevant to the case before proceeding to impose definitive duties.
The United States also accuses Mexico of unjustified trade discrimination by imposing a ban on certain imported hogs above 110 kg and maintaining quarantine and inspection requirements that are not applied to hogs below this weight nor to Mexican hogs. Neither of these discriminatory practices are based on a risk assessment or have sufficient scientific basis, Washington claims.
Pork Producers' Complaint
The U.S. move to initiate WTO proceedings against Mexico was taken in response to complaints from the National Pork Producers Council. The NPPC claims Mexico's decision to impose duties was due to political pressure from domestic producers rather than any injury to its producers from imports. The NPPC notes that the duties apply only to live hog imports rather than pork products and that Mexico is the second largest foreign market for U.S. pork exports. According to the council, U.S. pork exports to Mexico increased from 57,022 metric tons in 1990 to 113,994 tons in 1999, with the value of exports jumping from $69 million to $148 million over the same period.
By Daniel Pruzin
Copyright c 2000 by The Bureau of National Affairs, Inc., Washington D.C.:
