SOURCE: King & Spalding

September 18, 2006 12:51 ET

King & Spalding Wins Long-Running Trade Dispute Against Mexico

Victory on Behalf of USA Rice Federation Has Far-Reaching Implications

WASHINGTON, DC -- (MARKET WIRE) -- September 18, 2006 -- King & Spalding, a leading international law firm, today announced that it obtained an unprecedented victory representing the USA Rice Federation in a long-running international trade dispute with the government of Mexico. The outcome will also force Mexico to amend its trade laws affecting other U.S. exports.

Mexico's Ministry of the Economy last week revoked its antidumping duty order on imports of long-grained milled rice from the United States. Mexico's action came in response to decisions by the World Trade Organization, following complaints by the United States.

"We are pleased that Mexico has finally recognized it cannot continue to apply antidumping duties on U.S. rice imports, because those duties clearly violate Mexico's WTO obligations," said King & Spalding partner Joe Dorn. "One can only hope that Mexico will learn from this experience and remove WTO-inconsistent antidumping measures that remain on other U.S. products."

Dorn and Jorge Miranda, both of King & Spalding's international trade group in Washington, D.C., represented the USA Rice Federation in this matter. Miranda is a principal international trade adviser at the firm.

Mexico's revocation of the order ends a long-running trade dispute that seriously impeded U.S. rice producers' exports to Mexico and removes a major irritant in the trade relations between the United States and Mexico.

After the government of Mexico imposed an antidumping order on imports of long-grain milled rice from the United States in June 2002, King & Spalding, acting on behalf of U.S. rice millers, asked the U.S. Trade Representative to initiate dispute settlement proceedings against Mexico in the WTO. With substantial contributions from King & Spalding, the USTR filed briefs and argued the case.

The WTO dispute settlement panel issued a report in June 2005 agreeing with the United States that the Mexican economic ministry's final determination on which the antidumping order was based was inconsistent with Mexico's WTO obligations.

The panel found that the ministry's determination that U.S. imports had injured the Mexican rice industry was inconsistent with Article 3 of the WTO Antidumping Agreement because it had failed to consider data for a period of 15 months prior to the initiation of the investigation. It also concluded that Mexico had ignored data covering six months in each of the three years of the period of investigation and had not identified precisely either the volume or the prices of the allegedly dumped imports.

The panel found that the Mexican ministry improperly had applied antidumping duties on U.S. exporters that were found not to have engaged in dumping and improperly determined dumping margins based on "facts available" calculated for U.S. exporters that had not made any export sales into Mexico during the period of investigation. The panel also found that parts of Mexico's antidumping law were inconsistent with WTO requirements.

The WTO's Appellate Body rejected Mexico's appeal and upheld the panel's findings in November 2005.

As a result of these WTO decisions, Mexico's Ministry of the Economy initiated a re-investigation. In its new determination issued on September 11, the ministry found that U.S. exporters had not engaged in dumping during the period investigated. It also concluded that the available data did not allow it to identify properly the volume of long-grain milled rice imported from the United States during the period of investigation. Therefore, Mexico lacked "positive evidence" on which to base an injury determination, as required by Article 3 of the WTO Antidumping Agreement.

The victory in the WTO proceedings in long-grain milled rice is the third consecutive win in WTO litigation by King & Spalding.

King & Spalding's international trade group, headquartered in the firm's Washington, D.C., and London offices, handles a wide range of international trade and customs matters for clients the world over. Two expanding areas of practice for the group are the representation of U.S. and non-U.S. producers in international trade proceedings outside the United States and the representation of governments in dispute settlement proceedings before the World Trade Organization in Geneva.

About King & Spalding

King & Spalding is an international law firm with more than 800 lawyers in Atlanta, Houston, London, New York and Washington, D.C. The firm represents half of the Fortune 100, and in a Corporate Counsel survey in August 2006 was ranked one of the top ten firms representing Fortune 250 companies overall. For additional information, visit http://www.kslaw.com/.

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