U.S. Apple Growers Win Rare Antidumping Case in Mexico
On June 7, the Mexican Ministry of the Economy (“Economía”) issued the final determination in its antidumping investigation on imports of apples from the United States, terminating such investigation on the basis of the absence of a causal link between the investigated imports and injury to the domestic industry. This is the first time Economía has issued a negative determination on injury or causation in over five years. In terminating its investigation, Economía revoked provisional duties of up to 20.82% imposed in the preliminary determination issued on January 6.
U.S. apples have been a frequent target of antidumping action by Mexican producers, mostly located in the Northern State of Chihuahua. In fact, except for a few months in 2005, from September 1997 through March 2010, imports of apples from the United States were subject to antidumping measures. Regrettably, Mexican producers seem to have visualized antidumping protection as a means to remedy market gluts brought about by their own overproduction.
The facts pertaining to the terminated investigation bear this out. In 2013, the most recent year in the period of investigation for Economía’s determination of injury and causation, Mexico’s production reached record levels of 858,608 metric tons which was nearly twice as much as the historical average of 476,229 metric tons over the period 1980-2012. Although apples stored in controlled atmosphere can last at least a year, Mexican storage capacity in controlled atmosphere is limited to only 400,000 metric tons. Thus, in 2013 Mexican producers had to unload in the market close to half a million metric tons in the four months following the harvest before the fruit became unsaleable, and for such purposes they heavily discounted their prices. Imports from the United States were in no way connected to such price declines, because in the four months following Mexico’s harvest they were largely absent from the Mexican market on account of a quarantine imposed on phyto-sanitary grounds.
Importantly, the 1997 antidumping investigation was also based on a flooding of the market brought about by domestic overproduction. It is commendable that the Mexican authorities did not ignore this time around the realities of the market and rightly declined blaming imports from the United States for problems caused by the Mexican producers themselves. In their findings, the Mexican authorities emphasized that imports from the United States had been sold at prices substantially higher than the prices of domestic apples and, therefore, could not have displaced the latter by reasons of price.
Together with Mexican law firm Rubio Villegas, King & Spalding represented the industry association (National Fruit Exporters) and 13 individual respondents.