World Trade Organization

• Author: International Law Group

On October 22, 2001, the World Trade Organization (WTO) Appellate Body affirmed a Panel decision finding Mexico's application of antidumping duties on U.S. imports of high fructose corn syrup (HFCS) inconsistent with WTO trading rules. HFCS sweetens soft drinks and other food products.

Mexico had imposed Anti-Dumping duties because it feared harm to its domestic sugar industry. According to the WTO Anti-Dumping Agreement, a member may impose antidumping duties only where it has proven both the dumping action and an injury to the domestic industry (or a threat thereof).

The U.S. asserted that the method by which the Mexican authority SECOFI concluded that U.S. imports constituted a threat of injury to the Mexican sugar market was flawed. The WTO Panel agreed, and so does the Appellate Body, finding that Mexico did not properly establish grounds for speculation of a future influx of U.S. products into the Mexican market. Additionally, Mexico had not properly considered the probable impact of U.S. imports on the Mexican sugar industry.

In particular, the Appellate Body: (1) Finds that the Panel correctly declined to address certain issues, such as the question of consultations between the U.S. and Mexico prior to the WTO proceedings; (2) Upholds the Panel's finding in Paragraph 6.23 of the Panel Report that SECOFI's conclusion that...