. /.  WORLD TRADE  
ORGANIZATION  WT/DS311/1 
G/L/679 
G/SCM/D60/1 19 April 2004 
 
 
(04-1749) 
 Original:   English 
  
 
UNITED STATES – REVIEWS OF COUNTERVAILING DUTY 
ON SOFTWOOD LUMBER FROM CANADA 
 
Request for Consultations by Canada
 
 
 
 The following communication, dated 14 April 2004, from the delegation of Canada to the delegation of the United States and to the Chairman of the Dispute Settlement Body, is circulated in 
accordance with Article 4.4 of the DSU.  
_______________ 
 
  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 , Article XXII of the General Agreement on Tariffs and Trade 1994  
(GATT 1994), and Article 30 of the Agreement on Subsidies and Countervailing Measures  
(SCM Agreement).  These consultations concern:   (1) the failure of the United States Department of Commerce (Commerce) to complete 
expedited reviews of the countervailing duty order concerning certain softwood 
lumber products from Canada in order to promptly establish an individual 
countervailing duty rate for each requesting exporter;  and 
  (2) the refusal and failure of Commerce to conduct company-specific administrative 
reviews of the same countervailing duty orde r in order to establish a final individual 
countervailing duty rate for each requesting exporter. 
  On 22 May 2002, Commerce published an ame nded final countervaili ng duty determination 
and countervailing duty order concerning certa in softwood lumber products from Canada.
1  O n  
17 July 2002 and 20 September 2002, Commerce initia ted expedited reviews of the countervailing 
duty order.2  On 1 July 2003, Commerce initiated an ad ministrative review of the countervailing duty 
order.3  On 25 July 2003, Commerce issued a D ecision Memorandum regarding the methodology for 
                                                      
1 Notice of Amended Final Countervailing Duty De termination and Notice of Countervailing Duty 
Order: Certain Softwood Lumber Products from Canada , 67 Fed. Reg. 36070 (Department of Commerce, 
22 May 2002), corrected in 67 Fed. Reg. 37775 (Department of Commerce, 30 May 2002). 
2 Notice of Initiation of Expedited Reviews of the Countervailing Duty Order: Certain Softwood 
Lumber Products from Canada , 67 Fed. Reg. 46955 (Department of Commerce, 17 July 2002); Notice of 
Initiation of Expedited Reviews of the Countervailing Du ty Order: Certain Softwood Lumber Products from 
Canada , 67 Fed. Reg. 59252 (Department of Commerce, 20 September 2002).  
3 Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for 
Revocation in Part , 68 Fed. Reg. 39055 at 39058 (Department of Commerce, 1 July 2003).   WT/DS311/1 
G/L/679 G/SCM/D60/1 
Page 2 
  the administrative review
4 and on 15 March 2004, Commerce issued a Decision Memorandum 
regarding selection of companies for company-specific "zero/ de minimis " administrative reviews.5  
 
 The measures at issue in these consultations include, but are not necessarily limited to:  (1) 
the countervailing duty order concerning certain soft wood lumber products from Canada as applied to 
exporters that requested company-specific expedite d reviews and/or company-specific administrative 
reviews;  (2) Commerce's failure to complete expe dited reviews in order to promptly establish an 
individual countervailing duty rate for each requesting exporter;  (3) Commerce's Decision 
Memoranda of 25 July 2003 and 15 March  2004;  (4) Commerce's refusal and failure to conduct 
company-specific administrative reviews in orde r to establish a final individual countervailing duty 
rate for each requesting exporter;  and (5) the rele vant US laws and regulatio ns relating to expedited 
and administrative reviews. 
 
 In a Fact Sheet released with final exped ited review results for certain exporters on 
3 March 2004, Commerce confirmed that there are exporters for which expe dited reviews have not 
been completed6 in spite of the fact that these reviews we re initiated nearly two years ago.  Commerce 
has therefore failed to promptly establish an indi vidual countervailing duty rate for these exporters. 
  In the Decision Memoranda of 25 July 2003, and 15 March 2004, Commerce confirmed that 
the administrative review of certain softwood lumb er products from Canada  would be conducted on 
an aggregate basis, meaning that Commerce woul d establish a country-wide countervailing duty rate.
7  
Commerce also confirmed that the countervailing duty rate established in the aggregate administrative 
review will supersede all previously established c ountervailing duty rates, including those established 
in the expedited reviews.  Further, Commerce deni ed company-specific administrative reviews to all 
but 11 exporters, despite the fact many more expor ters requested such reviews to establish final 
individual countervailing duty rates.  For the selec ted 11 exporters, Commerce has characterized its 
review as a "zero/ de minimis " review with no assurances that fina l individual countervailing duty rates 
over de minimis  will be given effect.  In addition, the 11 exporters chosen include only 6 of what 
Canada understands to be 69 e xporters that requested both company-specific expedited and 
administrative reviews.  The exporters that we re not chosen for a company-specific "zero/ de minimis " 
administrative review will certainly not receive a final individual countervailing duty rate.  Instead, 
they will be subject to the country-wide count ervailing duty rate established in the aggregate 
administrative review, thereby nullifying any individual countervailing duty rates established in expedited reviews.  
 The United States has therefore acted inconsistent ly with Articles 10, 19.1, 19.3, 19.4, 21.1, 
21.2, 21.4 and 32.1 of the SCM Agreemen t and Article VI:3 of GATT 1994.   
  I look forward to receiving your reply to this request and to selecting a mutually acceptable date for holding consultations within 30 days from the date of receipt of this request.  Canada 
welcomes any suggestions that the United States ma y wish to make concerning dates on which the 
consultations could take place. 
__________ 
                                                     
 
4 First Administrative Review of the Countervailing Duty Order on Softwood Lumber Products from 
Canada – Methodology for Conducting the Review , July 25, 2003 (Case No. C-122-839).  
5 First Administrative Review of the Countervailing Duty Order: Ce rtain Softwood Lumber Products 
from Canada – Selection of Companies for Company-Specific Reviews , March 15, 2004 (Case No. C-122-839). 
6FACT SHEET – Final Results of Expedited Reviews under the Countervailing Duty Order on Certain 
Softwood Lumber Products from Canada , 3 March 2004.   
7 Products from six Canadian provinces are subject to the countervailing duty order: Québec, Ontario, 
Manitoba, Saskatchewan, Alberta and British Columbia.