ITA Ensures Access for U.S. Pipe Producer in the Mexican Market
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 Mexico was applying an irrelevant and outdated standard that relied on design and descriptive characteristics, rather than performance requirements, and that was not incorporated in Mexican technical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.