The European Communities claims that Mexico failed to invite the European Communities to consultations and failed to hold consultations, or failed at least to provide a sufficient time interval for consultations to take place, before the initiation of the olive oil investigation, contrary to Article 13.1 of the SCM Agreement.
Arguments of the Parties
The European Communities asserts that Economía initiated its investigation on 2 July 200345, that Mexico only invited the European Communities for consultations on 4 July 2003, and that the first consultations were held only on 17 July 2003. According to the European Communities, because of its failure to hold consultations before the initiation, Mexico is "in outright breach of its obligations under Article 13.1".46
Mexico argues that the date of initiation was not 2 July 2003, but 16 July 2003, as this was the date on which the Initiation Resolution was published in its Official Journal.47 Mexico states that under Mexican law, the Initiation Resolution had no legal effect until the day after its publication in the Official Journal, and that the administrative timelines relevant in the investigation were set relative to that date.48On this basis, Mexico maintains that it complied with its obligations under Article 13.1 because it issued the invitation for consultations prior to the date of initiation.49
The European Communities also argues that even if Mexico's argument were accepted that the date of initiation was 16 July 2003, Mexico still violated Article 13.1 because the invitation for consultations was not issued sufficiently before the initiation of the investigation to allow for a meaningful opportunity for consultations to be held prior to initiation.50 The European Communities relies upon Articles 13.2 and 13.3 and footnote 37 to Article 10 as contextual support for its interpretation of Article 13.1. In particular, the European Communities argues that there is an implicit requirement that, whether or not the consultations actually take place before initiation, the invitation must be issued sufficiently prior to initiation that consultations couldbe held before initiation, i.e., "more broadly" that investigating authorities should "make themselves available for consultations at a stage when those consultations could influence the decision to initiate the investigation", i.e., before initiation.51 If this were not the case, the European Communities argues, the consultations would be pointless, given that their "aim" according to Article 13.1, is to "clarify[ ] the situation as to matters referred to in paragraph 2 of Article 11 [the content of the application] and arriv[e] at a mutually agreed solution."52
In Mexico's view, the obligation in Article 13.1 is to issue the invitation to consultations prior to initiation, rather than to hold the consultations prior to initiation.53 Furthermore, Mexico argues that there is no requirement that the invitation to consultations be issued in sufficient time that consultations could be held prior to initiation.54