. /.WORLD TRADE
ORGANIZATIONWT/DS247/1
G/L/522
G/ADP/D40/1
12 March 2002
(02-1242)
Original:  English
UNITED STATES – PROVISIONAL ANTI-DUMPING MEASURE
ON IMPORTS OF CERTAIN SOFTWOOD LUMBER FROM CANADA
Request for Consultations by Canada
The following communication, dated 6 March 2002, from the Permanent Mission of Canada
to the Permanent Mission of the United States and to the Chairman of the Dispute Settlement Body, iscirculated in accordance with Article 4.4 of the DSU.
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My authorities have asked me to request consultations with the Government of the United
States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes  (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994  (GATT 1994)
and Article 17 of the Agreement on Implementation of  Article VI of GATT 1994  (Anti-Dumping
Agreement).
On 30 April 2001, pursuant to section 732 of the Tariff Act of 1930 , the United States initiated
anti-dumping proceedings against imports of softwood lumber from Canada by publishing Notice of
Initiation of Antidumping Duty Investigation: Certain Softwood Lumber Products From Canada
(66 Fed. Reg. 21,328).  On 31 October 2001, in accordance with section 733 of the Tariff Act of 1930 ,
the United States preliminarily determined that certain softwood lumber products from Canada are
being sold, or are likely to be sold, in the United St ates at less than fair value (LTFV).  The estimated
margins of dumping varied from 5.94 to 19.24 per cent.  The Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final  Determination: Certain Softwood Lumber From
Canada made by the US Department of Commer ce on 31 October 2001 was published in the Federal
Register (66 Fed. Reg. 56,062) on 6 November 2001.  As a result of this preliminary affirmative
determination and pursuant to section 733(d) of the Tariff Act of 1930 , the United States applied
provisional measures against imports of softwood lumber from Canada in the form of suspension of
liquidation of all entries, and the requirement for a cash deposit or the posting of a bond equal to the
weighted-average amount by which the normal value exceeds the export price or the constructed
export price.
Canada considers the initiation of the anti-dumping investigation to be inconsistent with
Article 5.2 of the Anti-Dumping Agreement because the petition did not contain "evidence" regarding
the existence of dumping.  More particularly, the initiation of the anti-dumping investigation is
inconsistent with Article 5.2(iii) of the Anti-Dumping Agreement because the petition did not contain
reasonably available information on actual transaction prices at which softwood lumber is sold inCanada, although that information was reasonably available to the petitioners.  As a whole, the
petition did not contain "sufficient evidence" to justify the initiation of an investigation.  The initiation
of the anti-dumping investigation is, therefore, also inconsistent with Article 5.3 of the Anti-Dumping
Agreement.  The anti-dumping investigation not having been initiated in accordance with theWT/DS247/1
G/L/522
G/ADP/D40/1
Page 2
provisions of Article 5, the application of provisional measures by the United States is inconsistent
with Article 7.1 of the Anti-Dumping Agreement.
Canada also considers the preliminary determination of sales at less than fair value made by
the United States in accordance with sections 772 and 773 of the Tariff Act of 1930  to be inconsistent
with the United States’ obligations under Articles 2.1 and 2.2 of the Anti-Dumping Agreement.  The
United States acted inconsistently with these provisions by disregarding certain sales of like products
in the domestic market of the exporting country, which resulted in improper price comparisons and an
inflation of weighted-average margins of dumping.
Canada also requests consultations with the United States concerning its application of the
practice of "zeroing", which the United States has stated is required by sections 771(35)(A) and (B) of
the Tariff Act of 1930 .  The "zeroing" methodology is also reflected in the United States Department
of Commerce Antidumping Manual (Chapter 6, p. 9 to 10).  The application of the "zeroing"
methodology in the preliminary investigation at issue resulted in an inflation of weighted-averagemargins of dumping.  The Appellate Body ruled in European Communities – Anti-Dumping Duties on
Imports of Cotton Bed Linen from India  that the practice of "zeroing" negative dumping margins
when establishing "the existence of margins of dumping" is inconsistent with the provisions of
Article 2.4.2 of the Anti-Dumping Agreement.  Canada considers the practice of the United States to
also be inconsistent with this provision.
I look forward to receiving your reply to this request and in accordance with Article 4.8 of the
DSU, to selecting a mutually acceptable date for holding consultations within 10 days from the date of
receipt of this request.  Canada welcomes any sugge stions that the United States may wish to make
concerning dates on which the consultations could take place.
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