ITA Ensures Access for U.S. Pipe Producer in the Mexican Market
March 1, 2014
(ITA)
The Department of Commerce's International Trade Administration (ITA) helped
Ohio-based Advanced Drainage Systems (ADS) to overcome a foreign trade barrier
that limited the pipe manufacturer's market access in Mexico. ITA is making our
international trade agreements work for ADS and the United States.
Why it Matters: ITA ensured that Mexico observed its obligations under the World
Trade Organization (WTO) Agreement on Technical Barriers to Trade and
recertified plastic piping in a non-discriminatory manner. Mexico was relying on
discriminatory recertification procedures that would have excluded ADS's high
density polyethylene (HDPE) pipe from the plastic pipe market in Mexico. The
collective market for plastic pipe in Mexico at its peak was well in excess of
US $100 million.
The Problem: Despite previously issuing certifications permitting the sale of
HDPE pipe in Mexico, in 2010, Mexico refused to recertify ADS's HDPE pipes.
Mexico was applying an irrelevant and outdated standard that relied on design
and descriptive characteristics, rather than performance requirements, and that
was not incorporated in Mexican technical regulations. Further, the government
of Mexico selectively applied this standard to HDPE pipes but not PVC or other
plastic pipes, which are produced by its domestic industry, despite the fact
that HDPE and PVC pipes perform the same functions. The WTO Agreement on
Technical Barriers to Trade (TBT Agreement) requires that the conformity
assessment procedures, such as certification, used by WTO Members do not
discriminate between like products, and do not create unnecessary barriers to
trade. The TBT Agreement also urges WTO Members, in their regulations, to
specify product characteristics in terms of performance, rather than design.
Mexico's conformity assessment procedures and regulations raised concerns under
that agreement. The denial of certification by the Mexican government
essentially prohibited manufacturers from selling into this market with
substantial losses as a result.
Solution: ITA worked with other U.S. Government agencies to raise the issue at
the WTO Technical Barriers to Trade Committee, as well as bilaterally with
Mexico officials. As a result, the Mexican Government worked with ADS and ITA to
develop an appropriate and WTO consistent standard and recertified ADS's HDPE
piping, ensuring market access in the future.
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