North American Free-Trade Agreement, Article 1904 NAFTA Panel Reviews; Notice of Request for an Extraordinary Challenge Committee

AGENCY:

NAFTA Secretariat, United States Section, International Trade Administration, Department of Commerce.

ACTION:

Notice of Request for an Extraordinary Challenge Committee to review issues raised by the June 18, 1999 and February 10, 2000 decisions of the binational NAFTA Panel that reviewed the final results of administrative review and the redetermination pursuant to remand by the United States Department of Commerce (the Department) in the above-captioned proceeding. This request was filed with the United States Section of the NAFTA Secretariat on March 23, 2000.

SUMMARY:

On March 23, 2000, the Office of the United States Trade Representative filed a Request for an Extraordinary Challenge Committee to review decisions dated June 18, 1999 and February 10, 2000. On June 18, 1999, the panel convened in this proceeding issued it Opinion an Order. The Panel remanded to the International Trade Administration on the grounds that the Department erred in basing its normal-value calculations on Type I cement in both bulk and bagged form, and it remanded this issue to the Department for recalculation using only sales in bulk form. On February 10, 2000 the Panel affirmed the Final Results of Redetermination pursuant to Panel Remand, without commenting on the bulk/bagged issue. The NAFTA Secretariat has assigned Case Number ECC-2000-1904-01USA to this request.

FOR FURTHER INFORMATION CONTACT:

Caratina L. Alston, United States Secretary, NAFTA Secretariat, Suite 2061, 14th and Constitution Avenue, Washington, DC 20230, (202) 482-5438.

SUPPLEMENTARY INFORMATION:

Chapter 19 of the North American Free-Trade Agreement (“Agreement”) establishes a mechanism to replace domestic judicial review of final determinations in antidumping and countervailing duty cases involving imports from a NAFTA country with review by independent binational panels. When a Request for Panel Review is filed, a panel is established to act in place of national courts to review expeditiously the final determination to determine whether it conforms with the antidumping or countervailing duty law of the country that made the determination.

Under Article 1904.13 of the Agreement, the Government of the United States, Canada and Mexico established Rules of Procedure for Article 1904 Extraordinary Challenge Committees (“ECC Rules”). These ECC Rules were published in the Federal Register on February 23, 1994 (59 FR 8702). The ECC Rules give effect to the provisions of Chapter Nineteen of the Agreement with respect to Extraordinary Challenge Committee proceedings conducted pursuant to Article 1904 of the Agreement. The ECC Rules are intended to result in decisions typically within 90 days after the establishment of an Extraordinary Challenge Committee. The Extraordinary Challenge Committee proceeding in this matter will be conducted in accordance with these ECC Rules.

Background

On April 9, 1997, the Department published the final results of the fifth administrative review of the antidumping duty order on gray portland cement and clinker from Mexico. During the period of review, respondent CEMEX, S.A. de C.V., sold Type II cement in bulk form in the United States. Because the Department found CEMEX's home-market sales of Type II cement to be outside the ordinary course of trade, the Department compared CEMEX's U.S. sales of Type II cement to its home-market sales of a similar product—Type I cement. The Department determined that the foreign like product included all Type I cement, whether or not packed in bags. CEMEX objected to the Department's finding that the “similar” foreign like products included both bulk and bagged merchandise, and it requested binational panel review pursuant to Chapter 19 of the NAFTA.

On June 18, 1999, the Panel convened in this proceeding issued its Opinion and Order. The Panel held that the Department erred in basing its normal-value calculations on Type I cement in both bulk and bagged form, and it remanded this issue to the Department for recalculation using only sales in bulk form. In reaching its decision, the Panel held that Koyo Seiko Co., Ltd. v. United States, 66F. 3d 1204 (Fed. Cir. 1995), does not mandate deference to the Department's foreign-like-product analysis in this case, and it made findings of fact relying on evidence that was not part of the administrative record. One panelist dissented from the Panel's resolution of the bulk/bagged issue with respect to the standard of review and the Panels reliance of evidence that was not part of the administrative record.

Commerce issued its determination on remand on November 15, 1999. The Department explained, “[w]e have implemented the Panel's ruling and revised our calculations to exclude home-market sales of bagged cement from the calculation of normal value.” The Panel affirmed the Department's Remand Determination, without commenting on the bulk/bagged issue.

Request for an Extraordinary Challenge Committee:

On March 23, 2000, the United States Trade Representative filed a Request for an Extraordinary Challenge Committee on behalf of the United States Government in its capacity as a Party to the North American Free Trade Agreement, with the United States Secretary of the NAFTA Secretariat. The United States alleges that the Panel manifestly exceeded its powers, authority or jurisdiction by failing to apply the appropriate standard of review in three instances: (1) When the panel declined to defer to the Department's interpretation of the model-match provisions of the statute, as required by binding precedent of the U.S. Court of Appeals for the Federal Circuit as set forth in Koyo Seiko Co., Ltd. v. United States, 66 F.3d 1204 (Fed. Cir. 1995); (2) when it did not confine its review to the administrative record developed before the investigating authority; and (3) when, upon holding that the Department did not apply the foreign-like-product statute properly, it usurped the Department's authority as investigating authority and issued its own findings of fact.

Rule 40 of the ECC Rules requires that Notices of Appearance in this proceeding must be filed with the United States Secretary within 10 days after the Request is filed (By April 3, 2000). Rule 42 of the ECC Rules, briefs must be filed with the United States Secretary within 21 days of the filing of the Request (by April 13, 2000).