WT/DS505/ARB  
 
13 July 2022  
(22-5180) Page: 1/164 
 Original: English  
 
UNITED  STATES – COUNTERVAILING MEASURES ON  
SUPERCALENDERED PAPER FROM CANADA  
RECOURSE TO ARTICLE 22.6 OF THE DSU BY THE UNITED  STATES  
DECISION BY THE ARBITRATOR  WT/DS505/ARB  
 
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TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  12 
1.1   Original proceedings  ................................ ................................ ................................ ...12 
1.2   Referral to arbitration and arbitration proceeding  ................................ ........................... 13 
2   PROCEDURAL MATTERS  ................................ ................................ .............................  15 
2.1   Impact of the COVID -19 pandemic on the meeting with the parties  ................................ ..15 
2.2   Delayed public presentation of the meeting with the part ies ................................ ............. 17 
3   THE MANDATE OF THE ARBITRATOR  ................................ ................................ .........  18 
4   BURDEN OF PROOF  ................................ ................................ ................................ .... 19 
5   THE MEASURE AT ISSUE  ................................ ................................ ............................  19 
6   THE UNITED  STATES' GENERAL OBJECTIONS TO THE LEVEL OF NULLIFICATIO N OR 
IMPAIRMENT  ................................ ................................ ................................ .................  20 
6.1   Preliminary issues  ................................ ................................ ................................ .......20 
6.1.1    Whether the United  States has rebutted the presumption of nullification or impairment  ....20 
6.1.2    Propriety of using a prospective model approach and governing principles  ...................... 26 
6.2   Events triggering the application of the prospective model and duration of suspension  ........ 26 
6.2.1    Trigge ring events  ................................ ................................ ................................ .....29 
6.2.1.1    Legal considerations  ................................ ................................ .............................. 30 
6.2.1.2    Factual considerations  ................................ ................................ ........................... 31 
6.2.2    Duration and timing of suspension  ................................ ................................ ............. 32 
6.2.3    Conclusion  ................................ ................................ ................................ .............. 33 
6.3   The appropriate counterfactual  ................................ ................................ ..................... 33 
6.3.1    Legal standard  ................................ ................................ ................................ ........ 33 
6.3.2    General counterfactual  ................................ ................................ ............................. 34 
6.3.3    Company -specific CVD rates  ................................ ................................ ..................... 35 
6.3.4    All-others CVD rates  ................................ ................................ ................................ .39 
6.4   Reference period  ................................ ................................ ................................ ........ 47 
6.4.1    United  States' proposal  ................................ ................................ ............................. 49 
6.4.2    Canada's original proposal  ................................ ................................ ........................ 51 
6.4.3    Canada's revised proposal ................................ ................................ ......................... 51 
6.4.4    Arbitrator's proposal  ................................ ................................ ................................ 52 
6.4.5    Conclusion  ................................ ................................ ................................ .............. 53 
7   ASSESS MENT OF THE PARTIES' ECONOMIC MODELS  ................................ .................  54 
7.1   Canada's proposed model  ................................ ................................ ............................ 54 
7.1.1    Overview  ................................ ................................ ................................ ................ 54 
7.1.2    Assessment  ................................ ................................ ................................ ............ 56 
7.1.2.1    Approximation error  ................................ ................................ .............................. 57 
7.1.2.2    Extreme results under a log -linearized model  ................................ ........................... 59 
7.1.2.3    Offsetting effects  ................................ ................................ ................................ ..61 
7.1.2.4    Pre-determination of the market -share parameter  ................................ .................... 64 WT/DS505/ARB  
 
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  7.1.2.5    Implementation in two steps  ................................ ................................ .................. 66 
7.1.3    Conclusion  ................................ ................................ ................................ .............. 67 
7.2   United  States' proposed model  ................................ ................................ ..................... 68 
7.2.1    Overview  ................................ ................................ ................................ ................ 68 
7.2.2    Assessment  ................................ ................................ ................................ ............ 69 
7.2.2.1    Unknown number of varieties  ................................ ................................ ................. 70 
7.2.2.2    Determination of market shares and market size in the future  ................................ ....71 
7.2.2.3    Unpredictability of model outcomes  ................................ ................................ ......... 71 
7.2.2.4    Determination of imports from unaffected exporters  ................................ .................. 72 
7.2.3    Conclusion  ................................ ................................ ................................ .............. 72 
7.3   Selected methodology: four -varieties Armington model  ................................ ................... 72 
8   IMPLEMENTATION OF THE SELECTED ARMINGTON MODEL  ................................ ....... 74 
8.1   Data inputs  ................................ ................................ ................................ ................ 75 
8.1.1    Market shares and market size  ................................ ................................ .................. 75 
8.1.1.1    Share of US domestic shipments  ................................ ................................ ............. 76 
8.1.1.1.1    Selection of data sources  ................................ ................................ .................... 76 
8.1.1.1.1.1    Commission reports  ................................ ................................ ......................... 76 
8.1.1.1.1.2    Undefined industry/trade association data  ................................ .......................... 77 
8.1.1.1.1.3    Data underlying BEA I-O tables  ................................ ................................ ......... 77 
8.1.1.1.1.4    BEA I -O table data ................................ ................................ ........................... 80 
8.1.1.1.2    Procedures for calculating the share of US domestic shipments ( 𝒎𝑼𝑺) ...................... 81 
8.1.1.2    Value of affected and unaffected Canadian imports  ................................ ................... 84 
8.1.1.2.1    Calculating the value of imports with US Customs data  ................................ ........... 84 
8.1.1.2.1.1    Reasonableness  of using US Customs data  ................................ ......................... 85 
8.1.1.2.1.2    Initial notification by Canada to the United  States following a triggering event  ........ 87 
8.1.1.2.1.3    Search of US Customs data and provision of data to Canada  ................................ .91 
8.1.1.2.1.4    Verification of US Customs data and consultations procedures  .............................. 97 
8.1.1.2.1.5    Import data from unaffected Canadian producers  ................................ ..............  106 
8.1.1.2.2    Calculating the value of imports in the absence of US Customs data  .......................  108 
8.1.1.2.2.1    Selection of a residual category  ................................ ................................ ....... 109 
8.1.1.2.2.2    Companies subject to a factual individual CVD rate  ................................ ............  111 
8.1.1.2.2.3    Companies subject to a fac tual non -selected rate  ................................ ..............  118 
8.1.1.2.2.4    Companies subject to a factual all -others rate  ................................ ...................  119 
8.1.1.2.2.5    Time allowed for Canada to calculate the value of imports  ................................ .. 120 
8.1.1.2.2.6    Consultations procedures  ................................ ................................ ...............  121 
8.1.1.2.3    A special case: new shippers  ................................ ................................ .............  122 
8.1.1.2.3.1    New shipper reviews as triggering events  ................................ .........................  127 
8.1.1.2.3.2    Time period from which to take new shippers' values of imports  ..........................  127 
8.1.1.2.3.3    Data source for value of imports  ................................ ................................ ..... 128 
8.1.1.2.3.4    Further adjustments to the value of imports  ................................ .....................  129 WT/DS505/ARB  
 
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8.1.1.2.3.5    Incorporation of new shippers' val ues of imports in the model .............................  130 
8.1.1.2.3.6    Conclusion: new shippers  ................................ ................................ ...............  131 
8.1.1.3    Value of RoW imports  ................................ ................................ ..........................  131 
8.1.2    Duty rates  ................................ ................................ ................................ ............  131 
8.1.2.1    Duties other than CVDs  ................................ ................................ .......................  131 
8.1.2.2    Provisional CVDs  ................................ ................................ ................................ . 134 
8.1.2.3    Assignment of CVD rates to specific Canadian companies' values of imports  ...............  134 
8.1.2.3.1    Procedures common to all companies  ................................ ................................ . 135 
8.1.2.3.2    Companies subject to a factual individual CVD rate  ................................ ..............  136 
8.1.2.3.3    Companies subject to a factual  non-selected rate  ................................ .................  136 
8.1.2.3.4    Companies subject to a factual all -others rate  ................................ .....................  137 
8.1.2.3.5    New shippers  ................................ ................................ ................................ ... 138 
8.1.2.4    Assigning single duty rates to the affected and unaffected Canadian varieties  .............  138 
8.1.3    Summary of guidance for values of imports and duty rates  ................................ .........  138 
8.1.4    Armington substitution elasticity (σ)  ................................ ................................ .........  144 
8.1.5    Price elasticity of demand (ε)  ................................ ................................ ..................  150 
8.1.6    Price elasticity of supply (η)  ................................ ................................ ....................  154 
8.2   Implementation of the Armington model under the two steps ................................ .........  157 
9   PRICE -LEVEL AD JUSTMENT  ................................ ................................ .....................  158  
9.1   Reasonableness, purpose, and relevant price index ................................ .......................  159 
9.2   Measurement of change in the price level  ................................ ................................ .... 160 
9.3   Data availability  ................................ ................................ ................................ ....... 161 
9.4   Technical implementation  ................................ ................................ ..........................  162 
10   NOTIFICATIONS TO THE DSB  ................................ ................................ ................  163  
11   CONCLUSION ................................ ................................ ................................ .........  163  
 
  WT/DS505/ARB  
 
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  LIST OF ANNEXES  
ANNEX A  
WORKING PROCEDURES OF THE ARBITRATOR  
Contents  Page  
Annex  A-1 Working Procedures of the Arbitrator  4 
Annex  A-2 Additional Working Procedures of the Arbitrator Concerning Business 
Confidential Information  9 
Annex  A-3 Additional Working Procedures of the Arbitrator Concerning Meetings with 
Remote Participation  11 
Annex A -4 Additional Working Procedures of the Arbitrator regarding Open Meetings of 
the Arbitrator (Delayed Online Broadcast)  14 
ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of the United States  16 
Annex B -2 Integrated executive summary of the arguments of Canada  28 
ANNEX C  
DATA INPUTS AND CALCULATIONS OF THE ARBITRATOR  
Contents  Page  
Annex  C-1 STATA code of Arbitrator's Model  40 
Annex  C-2 Excel Input Sheet of Arbitrator's Model  44 
Annex C -3 Excel Spreadsheet Template for US Customs Data  45 
  WT/DS505/ARB  
 
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CASES CITED IN THIS DECISION  
Short Title  Full Case Title and Citation  
Argentina – Import 
Measures  Appellate Body Reports, Argentina – Measures Affecting the Importation of 
Goods , WT/DS438/AB/R  / WT/DS444/AB/R  / WT/DS445/AB/R , adopted 
26 January  2015, DSR 2015:II, p. 579  
Canada – Aircraft Credits 
and Guarantees 
(Article  22.6 – Canada)  Decision by the Arbitrator, Canada – Export Credits and Loan Guarantees for 
Regional Aircraft – Recourse to Arbitration by Canada under Article 22.6 of the 
DSU and Article 4.11 of the SCM Agreement , WT/DS222/ARB , 
17 February  2003, DSR 2003:III, p. 1187  
EC – Bananas III  Appellate Body Report, European  Communities – Regime for the Importation, 
Sale and Distribution of Bana nas, WT/DS27/AB/R , adopted 25  September  1997, 
DSR 1997:II, p. 591  
EC – Bananas III (Ecuador) 
(Article 22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European Communities under Article 22.6 of the DSU , WT/DS27/ARB/ECU , 
24 March  2000, DSR 2000:V, p. 2237  
EC – Bananas III (US ) 
(Article 22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European Communities under Article 22.6 of the DSU , WT/DS27/ARB , 
9 April 1999, DSR 1999:II, p. 725  
EC – Hormones (US) 
(Article 22.6 – EC) Decision by the Arbitrato r, European  Communities – Measures Concerning 
Meat and Meat Products (Hormones), Original Complaint by the United  States 
– Recourse to Arbitration by the European  Communities under Article 22.6 of 
the DSU , WT/DS26/ARB , 12 July 1999, DSR 1999:III, p.  1105 
EC and certain member 
States – Large Civil Aircraft 
(Article 22.6 – EU) Decision by the Arbitrator, European  Communities and Certain Member States 
– Measures Affecting Trade in Large Civil Aircraft  – Recourse to Article 22.6 of 
the DSU by the European  Union , WT/DS316/ARB  and Add.1, 2  October  2019, 
DSR 2019:XII, p. 6477  
US – 1916 Act (EC)  Panel Report, United  States – Anti-Dumping Act of 1916, Comp laint by the 
European Communities , WT/DS136/R  and Corr.1, adopted 
26 Septem ber 2000, upheld by Appellate Body Report WT/DS136/AB/R, 
WT/DS162/AB/R, DSR 2000:X, p.  4593 
US – 1916 Act (EC) (Article 
22.6 – US) Decision by the Arbitrator, United  States – Anti-Dumping Act of 1916, Original 
Complaint by the European Communities – Recou rse to Arbitration by the 
United States under Article 22.6 of the DSU , WT/DS136/ARB , 
24 February  2004, DSR 2004:IX, p.  4269 
US – Anti-Dumping 
Methodologies (China) 
(Article 22.6 – US) Decision by the Arbitrator, United  States – Certain Methodologies and Their 
Application to Anti -Dumping Proceedings Involving China – Recourse  to Article 
22.6 of the DSU by the United  States , WT/DS471/ARB  and Add.1, 
1 November  2019, DSR 2019:XII, p. 6775  
US – COOL (Article 22.6 – 
US) Decisions by the Arbitrator, United  States – Certain Country of Origin Labelling 
(COOL) Requirements – Recourse to Article 22.6 of the DSU by the 
United  States , WT/DS384/ARB  and Add.1 / WT/DS386/ARB  and Add.1, 
circulated to WTO Members 7  December  2015, DSR 2015:XI, p.  5877 
US – Corrosion -Resistant 
Steel Sunset Review  Appellate Body Report, United  States – Sunset Review of Anti -Dumping Duties 
on Corrosion -Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R , adopted 9  January  2004, DSR 2004:I, p.  3 
US – Countervailing 
Measures (China) 
(Article  22.6 – US) Decision by the Arbitrator, United  States – Countervailing Duty Measures on 
Certain Products from China – Recourse to Article 22.6 of the DSU by the 
United States , WT/DS437/ARB  and Add.1, 26 January 2022  
US – Gambling (Article 22.6 
– US) Decision by the Arbitrator, United  States – Measures Affecting the Cross -
Border Supply of Gambling and Betting Services – Recou rse to Arbitration by 
the United  States under Article 22.6 of the DSU , WT/DS285/ARB , 
21 December  2007, DSR 2007:X, p.  4163 
US – Large Civil Aircraft 
(2nd complaint) (Article 
22.6 – US) Decision by the Arbitrator, United  States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint) – Recourse to Article 22.6 of the DSU by the 
United  States , WT/DS353/ARB  and Add.1, 13  October  2020 
US – Offset Act (Byrd 
Amendment) (EC) (Article 
22.6 – US) Decision by the Arbitrator, United  States – Continued Dumping and Subsidy 
Offset Act o f 2000, Original Complaint by the European  Communities – 
Recourse to Arbitration by the United  States under Article 22.6 of the DSU , 
WT/DS217/ARB/EEC , 31 August  2004, DSR 2004:IX, p.  4591 
US – Section 110(5) 
Copyright Act (Article 25)  Award of the Arbitrator, United  States – Section 110(5) of the US Copyright 
Act – Recourse to Arbitration under Article 25 of the DSU , 
WT/DS160/ARB25/1 , 9 November  2001, DSR 2001:II, p.  667 
US – Supercalendered 
Paper  Appellate Body Report, United  States – Countervailing Measures on 
Supercalendered Paper from Canada , WT/DS505/AB/R  and Add.1, adopted 
5 March  2020 WT/DS505/ARB  
 
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  Short Title  Full Case Title and Citation  
US – Supercalendered 
Paper  Panel Report, United  States – Countervailing Measures on Supercalendered 
Paper from Canada , WT/DS505/R  and Add.1, adopted 5  March  2020, as 
upheld by Appellate Body Report WT/DS505/AB/R  
US – Tuna II (Mexico) 
(Article 22.6 – US) Decision by the Arbitrator, United  States – Measures Concerning the 
Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to 
Article 22.6 of the DSU by the United  States , WT/DS381/ARB , 25 April 2017, 
DSR 2017:VIII, p.  4129 
US – Upland Cotton (Ar ticle 
22.6 – US I) Decision by the Arbitrator, United  States – Subsidies on Upland Cotton – 
Recourse to Arbitration by the United  States under Article 22.6 of the DSU and 
Article 4.11 of the SCM Agreement , WT/DS267/ARB/1 , 31 August  2009, DSR 
2009:IX, p.  3871 
US – Washing  Machines 
(Article 22.6 – US) Decision by the Arbitrator, United  States – Anti-Dumping and Countervailing 
Measures on Large Residential Washers from Korea – Recourse to Article 22.6 
of the DSU by the United  States , WT/DS464/ARB  and Add.1, 8  February  2019, 
DSR 2019:XII, p. 6299  
  
  WT/DS505/ARB  
 
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EXHIBITS REFERRED TO IN THIS DECISION  
Exhibit  Title 
Exhibit CAN-3 World Trade Organization and United Nations Conference on Trade and Development, 
A Practical Guide to Trade Policy Analysis  (Published 2012)  
Exhibit CAN-4 Hallren and Riker, "An Introduction to Partial Equilibrium Modeling of Trade Policy", 
USITC Office o f Economics Working Paper Series (July 2017)  
Exhibit CAN-5 Head and Mayer, "Gravity Equations: Workhorse, Toolkit, and Cookbook", in Gopinath 
et al., Handbook of International Economics , Vol. 4 (2014)  
Exhibit CAN-6 Caliendo and Parro, "Estimates of the Trade and Welfare Effects of NAFTA", The Review 
of Economic Studies , Vol. 82, No. 1 (January 2015)  
Exhibit CAN-7 Source Data 1  
Exhibit CAN-8 Source Data 2  
Exhibit CAN-15 Commerce, "Issues and Decision Memorandum for  the Final Results of Administrative 
Review of the Countervailing Duty Order on Certain Softwood Lumber Products from 
Canada; 2017 – 2018" (November 23, 2020)  
Exhibit CAN-18 Commerce, "Certain Softwood Lumber Products from Canada, Amended Final 
Affirmative Countervailing Duty Determination and Countervailing Duty Order", 83 
Fed. Reg. 347 dated January 3, 2018  
Exhibit CAN-22 Commerce, "Final Scope Ruling on the Antidumping Duty and Countervailing Duty 
Orders on Softwood Lumber from Canada: Harmer  Steel Products Co." (June 29, 
2020)  
Exhibit CAN-23 Commerce, "Antidumping and Countervailing Duty Orders on Certain Softwood 
Lumber Products from Canada: Final Scope Ruling on Cedar Shakes and Shingles" 
(September 10, 2018)  
Exhibit CAN -24 Commerce, "Fin al Scope Ruling for Certain Hardwood Plywood Products from the 
People's Republic of China: Request by the Coalition for Fair Trade in Hardwood 
Plywood and Masterbrand Cabinets Inc." (September 7, 2018)  
Exhibit CAN-25 Commerce, "Certain Tool Chests and Cab inets from the People's Republic of China: 
Final Scope Ruling on Quality Craft Industries, Inc.'s Products A and B" (May 21, 2018)  
Exhibit CAN-26 Commerce, "Final Scope Ruling for Certain Steel Threaded Rod from the People's 
Republic of China: Colonial El egance Inc." (August 1, 2014)  
Exhibit CAN-31 D. Riker, "A Trade Cost Approach to Estimating the Elasticity of Substitution", USITC 
Economics Working Paper Series (2020)  
Exhibit CAN-32 Commerce, "Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investigation of Supercalendered Paper from Canada" (October 
13, 2015)  
Exhibit CAN-40 Commerce, "Certain Polyethylene Terephthalate Resin From the Sultanate of Oman: 
Final Negative Countervailing Duty Determination ", 81 Fed. Reg. 13,321 dated March 
14, 2016  
Exhibit CAN-41 Commerce, "Non -Oriented Electrical Steel From the Republic of Korea: Final Negative 
Countervailing Duty Determination and Final Negative Critical Circumstances 
Determination", 79 Fed. Reg. 61,605 dated October 14, 2014  
Exhibit CAN-42 Commerce, "Certain Fabricated Structural Steel From Canada: Final Negative 
Countervailing Duty Determination", 85 Fed. Reg. 5,387 dated January 30, 2020  
Exhibit CAN-43 19 CFR 351.311  
Exhibit CAN-44 Commerce, "Certai n Uncoated Groundwood Paper From Canada: Final Affirmative 
Countervailing Duty Determination", 83 Fed. Reg. 39,414 dated August 9, 2018  
Exhibit CAN-45 Commerce, "Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investi gation of Certain Uncoated Groundwood Paper from 
Canada" (August 1, 2018)  
Exhibit CAN-46 Commerce, "Aluminum Extrusions from the People's Republic of China: Final 
Affirmative Countervailing Duty Determination", 76 Fed. Reg. 18,521 dated April 4, 
2011 
Exhibit CAN-47 Commerce, "Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investigation of Aluminum Extrusions from the People's Republic 
of China (PRC)"  (March 28, 2011)  
Exhibit CAN-48 Commerce, "Lightweight Thermal Paper from the People's Republic of China: Final 
Affirmative Countervailing Duty Determination", 73 Fed. Reg. 57,323 dated October 
2, 2008  
Exhibit CAN-49 Commerce, "Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Inve stigation of Lightweight Thermal Paper from the People's 
Republic of China" (September 25, 2008)  
Exhibit CAN-50 Commerce, "Final Affirmative Countervailing Duty Determination: Dynamic Random 
Access Memory Semiconductors from the Republic of Korea", 68 Fed . Reg. 37,122 
dated June 23, 2003  
Exhibit CAN-51 Commerce, "Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investigation of Dynamic Random Access Memory 
Semiconductors from the Republic of Korea" (June 16, 2003)  WT/DS505/ARB  
 
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  Exhibit  Title 
Exhibit CAN-52 19 C.F.R. § 351.204(b)(2)  
Exhibit CAN-53 19 U.S.C.  § 1675 
Exhibit CAN-54 19 C.F.R. § 351.213  
Exhibit CAN-55 19 C.F.R. § 351.214  
Exhibit CAN-61 19 C.F.R. § 351.218  
Exhibit CAN-62 U.S. Census Bureau, "About USA Trade® Online", accessed March 8, 2021, 
<https://usatrade.census.gov/>  
Exhibit CAN-63 U.S. Census Bureau, "Guide to Foreign Trade Statistics: Description of the Foreign 
Trade Statistical Program", accessed March 8, 2021, 
<https://www.census.gov/foreign -trade/guide/sec2.h tml> 
Exhibit CAN-65 U.S. Census Bureau, "HTS Record Layout", accessed March 8, 2021, 
<https://www.census.gov/foreign -trade/schedules/b/2018/imp -stru.txt>  
Exhibit CAN -66 U.S. Census Bureau, "USA Trade Online – Help Section", August 22, 2014, accessed 
March 8, 2021, <https://www.census.gov/foreign -trade/statistics/dataproducts/uto -
help/uto -help.html>  
Exhibit CAN -67 USITC, "A Note on U.S. Trade Statistics", accessed March 8, 2021, 
<https://www.usitc.gov/publications/research/tradestatsnote.pdf>  
Exhibit CAN -74 Replication Files  
Exhibit CAN -88 Global Trade Analysis Project, "GTAP Resources: Frequently Asked Question Details", 
accessed March 8, 2021, 
<https://www.gtap.agecon.purdue.edu/resources/faqs/faqs_display.asp?F_ID=151>  
Exhibit CAN -93 U.S. Customs, "Entry Summary", Form 7501  
Exhibit CAN -100 19 CFR 351.213  
Exhibit CAN -102 Replication File (Adjusted)  
Exhibit CAN -103 Different Supply Elasticity  
Exhibit CAN -105 Proof of Equivalence  
Exhibit CAN -109 Statistics Canada, Concordance Between U.S. HS10 Code and Canada HS8 Code 
(2021)  
Exhibit CAN -121 Commerce, "Supercalendered Paper from Canada: Countervailing Duty Order" , 80 
Fed. Reg. 237 dated December 10, 2015  
Exhibit CAN -127 "Softwood Lumber from Canada - Countervailing Duty Rates Potentially in Place by 
The End of the Third Administrative Review"  
Exhibit CAN -132 "Calculation in Response to Question No. 190"  
Exhibit CAN -139 "FGO Dataset B"  
Exhibit CAN -140 "FGO Dataset C"  
Exhibit CAN -142 19 CFR 351.214  
Exhibit CAN -143 19 CFR 351.525  
Exhibit CAN -147 Canada's Proposed Spreadsheet Template  
Exhibit CAN -150 "Summary of Proprietary Treatments in Recent USITC Reports"  
Exhibit CAN -151 19 U.S.C.  § 1484 
Exhibit CAN -171 Signed Cover Letter and Mutually Agreed Understanding between Canada and the 
United States Concerning Procedures to Apply to Business Confidential Information to 
the Extent Necessary to Apply a DSB Authorization Consistent with the Arbitrator's 
Decision  
Exhibit USA -1 U.S. Solution and Computer Code for the Armington Partial Equilibrium Model  
Exhibit USA -4 19 U.S.C. § 1671d  
Exhibit USA -7 Calculation of the All -Others Rate for the Final Determination in the Countervailing 
Duty Investigation of Supercalendered Paper from Canada ( "Supercalendered Paper 
All Others Rate Calculation Memo "), Oct. 13, 2015  
Exhibit USA -10 Utility Scale Wind Towers from Canada, Indonesia, and the Socialist Republic of 
Vietnam: Amended Final Affirmative Countervailing Du ty Determination and 
Countervailing Duty Orders, 85 Fed. Reg. 52543 (Aug. 26, 2020)  
Exhibit USA -11 Sample U.S. Model Data File  
Exhibit USA -13 19 U.S.C. § 1671b  
Exhibit USA -15 19 U.S.C. § 1675  
Exhibit USA -16 19 U.S.C. § 1677e  
Exhibit USA -17 19 U.S.C. § 1677f  
Exhibit USA -18 19 C.F.R. § 351.212  
Exhibit USA -22 Erika Bethmann et al., "A Non -technical Guide to the PE Modeling Portal ", USITC Office 
of Economics Working Paper Series (March 2020) ( "Bethmann et al. (2020) ") 
Exhibit USA -24 Anson Soderbery, "Estimating Import Supply and Demand Elasticities: Analysis and 
Implications ", Journal of International Economics, Vol. 96, Issue 1, May 2015 
("Soderbery (2015) ") 
Exhibit USA -27 Saad Ahmad & David Riker, "A Method for Estimating the Elasticity of Substitution and 
Import Sensitivity by Industry ", USITC Office of Economics Working Paper Series (May 
2019) ( "Ahmad & Riker (2019) ") 
Exhibit USA -31 David Riker, "Approximating an Industry -Specific Global Economic Model of Trade 
Policy ", USIT C Office of  Economics Working Paper Series, November 2020 ( "Riker 
(November 2020) ") WT/DS505/ARB  
 
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Exhibit  Title 
Exhibit USA -32 Jennifer Leith et al., "Indonesia Rice Tariff ", Poverty and Social Impact Analysis, March 
2003 ( "Leith et al. (2003) ") 
Exhibit USA -33 Michael Gasiorek et al., "Which manufacturing industries and sectors are most 
vulnerable to Brexit? ", The World Economy (2019) ( "Gasiorek et al. (2019) ") 
Exhibit USA -43 19 U.S.C. § 1592 
Exhibit USA -47 Jointly Proposed Understanding between Canada and the United States Concerning 
Procedures to Apply to Business Confidential Information to the Extent Necessary to 
Apply a DSB Authorization Consistent with the Arbitrator 's Decision ( "BCI 
Understanding ") 
Exhibit USA -48 Illustrative Table: Nullification or Impairment Under V arious Models/Scenarios Using 
Data from Softwood Lumber from Canada  
Exhibit USA -51 U.S. Solution and Computer Code for N -variety model  
Exhibit USA -52 Data inputs for N -variety model  
Exhibit USA -53 U.S. Response to Question 219: Excel Spreadsheet for Customs Data  
Exhibit USA -54 Table of USITC Investigation Determinations  
Exhibit USA -55 19 C.F.R. § 351.304  
Exhibit USA -60 Jointly Agreed BCI Understanding  
 
  WT/DS505/ARB  
 
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  ABBREVIATIONS USED IN THIS DECISION  
Abbreviation  Description  
ACE United States' Cus toms' Automated Commercial Environment  
AD anti-dumping  
ADD anti-dumping duty  
AFA adverse facts available  
ASM United States' Census Bureau's Annual Survey of Manufacturers  
BEA United States Bureau of Economic Analysis  
BLS United States' Bureau of Labor Statistics  
Byrd Amendment  Continued Dumping and Subsidies Offset Act of 2000  
CVD countervailing duty  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
FGO Fontagné, Guimbard and Orefice (2021) (Exhib it CAN -139) 
GATT 1994  General Agreement on Tariffs and Trade 1994  
GTAP  Global Trade Analysis Project  
HS Harmonized Schedule  
HTS Harmonized Tariff Schedule  
HTSUS  Harmonized Tariff Schedule of the United States  
IMF International Monetary Fund  
LRW large residential washer  
NI nullification or impairment  
OFA other forms of assistance  
OFA-AFA Measure  Other Forms of Assistance – Adverse Facts Available Measure  
PoI period of investigation  
PoR period of review  
PPI producer price index  
RoW rest of the world  
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
Supercalendered Paper 
CVD Order  the CVD order in Supercalendered Paper from Canada 2015  
USDOC  United  States Department of Commerce  
USITC  United States International Trade Commis sion 
 WT/DS505/ARB  
 
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1  INTRODUCTION  
1.1  Original proceedings  
1.1.  The present arbitration proceeding arises in the dispute initiated by Canada concerning certain 
measures relating to US countervailing duty (CVD) investigations.  
1.2.  The original proceedings in this dispute commenced on 30 March 2016, when Canada requested 
consultations with the United  States pursuant to Article 4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes (DSU), Article XXII:1 of the General Agreement 
on Tariffs and Tra de 1994 (GATT  1994) and Article 30 of the Agreement on Subsidies and 
Countervailing Measures (SCM Agreement) concerning certain countervailing measures with respect 
to supercalendered paper from Canada, as well as the alleged United  States' ongoing conduct  of 
applying adverse facts available  (AFA)  to measures "discovered" during the course of a CVD 
investigation. On 9 June 2016, Canada requested the establishment of a panel pursuant to Article  6 
of the DSU and Article 30 of the SCM  Agreement.1 
1.3.  The Panel Report in this dispute was issued to the parties on 15 December 2017, and circulated 
to WTO Members on 5 July 2018.  
1.4.  The Panel found that challenged  CVD measures applied by the United  States on 
supercalendered paper from Canada were inconsistent  with provisions of the SCM Agreement and 
the GATT 1994 . These findings were not appealed.2 The Panel also found that an unwritten measure 
in the form of "ongoing conduct" attributable to the United  States was inconsistent with Article 12.7 
of the SCM Agreement . That measure consisted of the USDOC applying AFA to find countervailable 
subsidies in relation to programmes discovered during CVD proceedings that were not reported in 
response to the USDOC's "other forms of assistance" (OFA)  question (the "Other Forms of Assistance 
– Adverse Facts Available Measure"  (OFA-AFA Measure) ).3 
1.5.  On the same day that the Panel Report was circulated, i.e. 5 July 2018, the United  States 
Department of Commerce (USDOC) revoked the CVD order in Supercalendered Paper from Canada 
2015 (Supercalendered Paper CVD Order) with retroactive effect from the beginning of the CVD 
proceeding.4 Notwithstanding its revocation of the CVD order in July 2018, the United  States filed 
an appeal on 27 August 2018, challenging certain of the Panel's find ings with respect to the 
OFA-AFA Measure .5 
1.6.  The Appellate  Body rejected the United  States' submission that the Panel had improperly 
established the existence of the OFA -AFA Measure and improperly concluded that the 
OFA-AFA Measure is inconsistent with Article 12.7 of the SCM Agreement.6 The Appellate  Body 
therefore " recommend[ed] that the DSB request the United  States to bring its measures, as found 
in this Report, and in the Panel  Report as upheld by this Report, to be inconsistent w ith the 
SCM Agreement and the GATT  1994, into conformity with its obligations under those Agreements."7 
In its report, the Appellate  Body also briefly addressed the circumstances of the United  States' 
 
1 Request for the establishment of a panel by Canada, WT/DS505/2.  
2 See Appellate Body Report,  US – Supercalendered Paper  (Appellate Body Report), paras. 1.3 and 4.1.  
3 See Appellate Body Report, para. 1.2; and Panel Report,  US – Supercalendered Paper  (Pane l Report) , 
paras.  2.2 and 7.1. 
4 See Appellate Body Report, para. 5.2.  
5 Notification of an Appeal by the United  States under Article 16.4 and Article 17 of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes (DSU) and Under Rule  20(1) of the Working 
Procedures for Appellate Review (WT/DS505/6) . 
6 See Appellate Body Report, section 6. One Appellate Body Member issued a separate opinion (see 
Appellate Body Report , section 5.3). According to this Member, the Panel erred by characterizing the USDOC's 
alleged "ongoing conduct" in an unacceptably vague manner, and employed inadequate evidentiary standards 
in establishing the elements of the OFA -AFA Measure. (Appellate Body Report, paras. 5.86 and 5.89). This 
Member also conside red it relevant that the underlying CVD order had been revoked retroactively to the 
beginning of the CVD proceeding, stating that "this means that no real dispute remains to be resolved 
regarding any 'ongoing conduct' that may or may not continue with resp ect to the proceeding at issue here." 
(Appellate Body Report, para. 5.87). Consequently, this Member stated that "the Division could and should 
have mooted the relevant findings of the Panel. In lieu of that, I suggest that this decision and its 
interpreta tions should be confined to the particulars of this case." (Appellate  Body Report, para. 5.87).  
7 Appellate Body Report, para. 6.10.  WT/DS505/ARB  
 
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  appeal, i.e. that the Canadian CVD order that reflecte d the OFA -AFA Measure had already been 
revoked ab initio : 
This revocation is not addressed by either participant in its written submissions. 
Moreover, at the oral hearing, both participants confirmed that there is a dispute 
between them regarding the exist ence of "ongoing conduct" and the finding of 
inconsistency with Article 12.7 of the SCM Agreement that remains to be resolved on 
appeal. Under these circumstances, we consider the United  States' claims of error on 
appeal in light of the Panel's findings as  they are in the Panel Report.8 
1.7.  The Appellate  Body Report (WT/DS505/AB/R) was circulated to Members on 6 February 2020. 
At the DSB meeting on 5 March 2020, the United  States expressed the view that the document 
WT/DS505/AB/R was not a valid Appellate  Body report and objected to its adoption. The 
United  States offered to join a positive consensus to adopt those aspects of the Panel Report that 
had not been appealed but refused to join the consensus to adopt the Appellate  Body Report.9 
Notwithstanding the U nited States' objection, the Panel Report and the Appellate  Body Report were 
adopted by the DSB by negative consensus.10 
1.2  Referral to arbitration and arbitration proceeding  
1.8.  Article 21.3 of the DSU provides that, at a DSB meeting held within 30 days after th e adoption 
of a panel or Appellate  Body report, the Member concerned (in this dispute, the United  States) shall 
inform the DSB of its intentions with respect to the implementation of the recommendations and 
rulings of the DSB. The United  States did not provide any such statement of intentions to the DSB. 
There was thus no "reasonable period of time" determined in this dispute specifying by when the 
United  States was required to comply with the recommendations and rulings of the DSB.11 Canada, 
in a docume nt dated 18 June 2020, requested authorization from the DSB under Article  22.2 of the 
DSU to suspend concessions, in view of the United  States' failure to inform the DSB of its intention 
with respect to the implementation of the recommendations and rulings  of the DSB, or to propose a 
reasonable period of time to comply.12 The United  States, in a document dated 26 June 2020, 
objected to the level of suspension of concessions proposed by Canada and not ed that accordingly, 
as required by Article 22.6 of the DS U, the matter was referred to arbitration.13 
1.9.  Canada's request for authorization to suspend concessions was considered at the DSB meeting 
held on 29 June 2020.14 The United  States expressed the following views: (a) Canada's request to 
suspend concessions wa s based on an incorrect premise, namely, that there were valid DSB 
recommendations adopted. The United  States considered that there were no such adopted DSB 
recommendations because there was no valid Appellate  Body Report and no consensus to adopt the 
 
8 Appellate Body Report, para. 5.2.  
9 DSB, Minutes of the meetings held on 28 February and 5 March 2020, WT/DSB/M/441, para s. 7.3 -7.7 
and 7.21. Among the United  States' procedural objections to the adoption of the Appellate Body Report was 
that, according to the United  States, none of the three Appellate Body Members who comprised the Division in 
the appeal was a valid Appella te Body Member when the Appellate Body Report was circulated. See also 
Communication from the United  States (17 April 2020) (WT/DS505/12) (containing similar arguments).  
10 DSB, Minutes of the meetings held on 28 February and 5 March 2020, WT/DSB/M/441, par a. 7.20.  
11 Article 21.3 provides that, where it is impracticable to comply immediately with the recommendations 
and rulings, the Member concerned shall have a "reasonable period of time" in which to do so. The "reasonable 
period of time" can be proposed by  the Member concerned and approved by the DSB, mutually agreed by the 
parties, or determined through arbitration.  
12 Canada's communication (18 June 2020) (WT/DS505/13). We note that Canada did not specify in its 
request under Article 22.2 of the DSU in whi ch sector(s) it intended to suspend concessions. We discern, 
however, nothing in that document or Canada's actions surrounding its submission that indicates that Canada 
has requested to suspend concessions in any sector other than the goods sector. We the refore consider that 
this arbitration involves no claim under Article 22.3(c) of the DSU. (See Decision by the Arbitrator, US – Tuna 
II (Mexico) (Article 22.6 – US), para. 3.22 (noting that Article 22.3(a) of the DSU "requires, as a default rule , 
identity between the sector(s) affected by the nullification or impairment caused by a WTO -inconsistent 
measure and the sector(s) in which a Member requests to suspend concessions or other obligations") . 
(emphasis added))  
13 United  States' communication (26 June 202 0) (WT/DS505/14).  
14 The Panel Report and the Appellate Body Report were adopted at the DSB meetings of 28  February 
and 5 March 2020 (DSB, Minutes of the meeting held on 28 February and 5 March 2020, para. 7.20). The DSB 
meeting of 29  June 2020 was the next DSB meeting that wa s convened after the  aforementioned  meetings  
(DSB, Minutes of the meeting held on 29 June 2020, WT/DSB/M/442, Item 12).  WT/DS505/ARB  
 
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Panel Report and the Appellate  Body Report; (b) Canada does not  suffer nullification or impairment 
(NI) from the alleged measure, owing to the revocation of the Supercalendered Paper CVD Order , 
and Canada cannot say that the alleged measure continued to exist or that Canada would suffer NI 
in the future; (c) notwithstanding the foregoing, and without prejudice to the United  States' position 
that no recommendations had been adopted by the DSB, the United  States also objected to the level 
of suspension of concess ions or other obligations proposed by Canada; and (d) under Article  22.6 of 
the DSU, the filing of the objection by the United  States automatically resulted in the matter being 
referred to arbitration.15 
1.10.   Canada responded that the DSB had adopted the Panel Report and the Appellate  Body Report 
in this dispute at its meeting on 5 March 2020, as reflected in the minutes of the DSB meeting and 
consistent with Article 17. 14 of the DSU, which sets forth the negative consensus rule for adoption 
of reports of the Ap pellate  Body. Canada also clarified the following: (a) its request for authorization 
to suspend concessions related to "ongoing conduct" by the United  States that was not currently 
being applied to Canada, and would relate to future US CVD proceedings invo lving Canadian goods; 
and (b) Canada sought authorization to suspend concessions or other obligations at an annual level 
commensurate with the trade effects of any future countervailing duties on Canadian imports of any 
goods that were attributable to the US "ongoing conduct" that had been found to be 
WTO-inconsistent in this dispute.16 
1.11.   The DSB took note that the matter raised by the United  States had been referred to 
arbitration, as required by Article 22.6 of the DSU.17 
1.12.   The Arbitrator was constituted on 6 August 2020 and was composed of the original panelists:  
Chairperson:  Mr Paul O'Connor  
 
Members:   Mr David Evans  
   Mr Colin McCarthy18 
   
1.13.   An organizational meeting was held on 21  August 2020 to discuss procedural aspects of the 
arbitration  proceeding. On 28  August  2020, the Arbitrator adopted its timetable, in addition to its 
Working Procedures and Additional Working Procedures Concerning Business Confidential 
Information (BCI Procedures).19 Also on that date, the Arbitrator adopted Additio nal Working 
Procedures of the Arbitrator Concerning an Open Meeting. As further described in section 2.2, below, 
and after consultations with the par ties, the Arbitrator repealed these latter working procedures and 
replaced them with revised procedures.20 
1.14.   In accordance with the timetable and Working Procedures adopted by the Arbitrator, on 
18 September 2020, Canada submitted a communication explaining its methodology (Methodology 
Paper) for calculating the proposed level of suspension. The United  States filed its written submission 
on 13 November 2020. Canada filed its written submission on 11 December 2020. The Arbitrator 
sent a first set of questions to the parties for written responses on 26 January 2021, to which the 
parties responded on 9 March 2021. The Arbitrator sent a second set of questions to the parties for 
written responses on 18 May 2021, to which the parties responded on 15 June 2021. The Arbitrator 
sent questions to the parties in advance of the meeting on 25 August 2021. The parties responded 
orally to such questions at the meeting.  
1.15.   The Arbitrator held its meeting with the parties from 20 -23 September 2021. On 1 October 
2021, following th e meeting with the parties, the Arbitrator sent a third set of questions to the 
parties for written responses, to which the parties responded on 29 October 2021 and filed comments 
on the other party's responses on 19 November 2021. The Arbitrator sent an a dditional set of 
 
15 DSB, Minutes of the meeting held on 29 June 2020, WT/DSB/M/442, para. 12.3.  
16 DSB, Minutes of the meeting held on 29 June 2020, WT/DSB /M/442, para. 12.6.  
17 DSB, Minutes of the meeting held on 29 June 2020, WT/DSB/M/442, para. 12.17 (referring to 
United  States' communication (26 June 2020) (WT/DS505/14)).  
18 DSB, Note by the Secretariat (6 August 2020) (WT/DS505/15).  
19 See Working Procedur es of the Arbitrator, Annex A -1 of the Addendum to this Decision, 
WT/DS505/ARB/Add.1 ; and Additional Working Procedures of the Arbitrator Concerning Business Confidential 
Information, Annex A -2 of the Addendum to this Decision, WT/DS505/ARB/Add.1 . 
20 See Ad ditional Working Procedures of the Arbitrator Regarding Open Meetings (Delayed Online 
Broadcast), Annex A -4 of the Addendum to this Decision, WT/DS505/ARB/Add.1.  WT/DS505/ARB  
 
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  questions to the parties on 17 December 2021, to which the parties responded on 14 January 2022, 
and filed comments on each other's responses on 28 January 2022.  
1.16.   On 23 June 2022 , the Arbitrator issued to the parties a version of its Decisi on to ensure that, 
in the parties' views, the Decision contained no BCI. On 28 June 2022, the parties informed the 
Arbitrator that they had no relevant comments on the Decision.  The Decision of the Arbitrator was 
circulated to WTO Members on  13 July 2022 . 
2  PROCEDURAL MATTERS  
2.1.  In this section, the Arbitrator addresses two procedural matters: (a) the impact  of the 
COVID -19 pandemic on the meeting with the parties; and ( b) the public presentation of the audio 
recording of the meeting with the parties.  
2.1  Impact of the COVID -19 pandemic on the meeting with the parties  
2.2.  In the timetable adopted by the Arbitrator in August 2020, the meeting with the parties was 
scheduled to take place in March 2021, and it was assumed at that time that the meeting would 
occur in -person in Geneva. As March 2021 approached, it became increasingly clear to the Arbitrator 
that an in -person meeting held in Geneva, which would be customary, could not occur at that time 
due to travel restrictions associated with the COVID -19 pandemic.  
2.3.  Thus, on 14 January 2021, the Arbitrator sent a message to the parties indicating that, due to 
the COVID -19 pandemic, holding an in -person meeting in Geneva in March 2021 appeared 
impossible, and sought the parties' views on holding a virtual meeting instead using the Cisco Webex 
platform, with the possibility of at least some delegates attending from the premises of the WTO if 
they chose to do so. The Arbitrator further observed that given the disparate time zones of the 
participants, any virtual meeting would like ly have to occur over multiple days with sessions held 
each day for a limited number of hours, and that, given the technical and complex issues before the 
Arbitrator, providing questions to the parties in advance of a virtual meeting appeared beneficial. 
The Arbitrator also attached draft Additional Working Procedures of the Arbitrator Concerning 
Meetings with Remote Participation for the parties' comments.  
2.4.  On 21 and 25 January 2021, the parties responded to the Arbitrator's message and submitted 
comments o n each other's responses, respectively. Canada responded that, given the situation 
created by the COVID -19 pandemic, the meeting should be held in a virtual format, and further 
requested that the Arbitrator send questions to the parties in advance of the m eeting at least two 
weeks before the meeting. Canada also agreed with the Arbitrator that, due to relevant time -zone 
differences, a virtual meeting would likely have to occur over multiple days with sessions held each 
day for a limited number of hours. Can ada had no substantive comments on the draft Additional 
Working Procedures of the Arbitrator Concerning Meetings with Remote Participation proposed by 
the Arbitrator.  
2.5.  The United  States objected to holding a virtual meeting because such a format did not, in  the 
United  States' view, allow the parties to participate in the meeting to the full extent generally 
envisioned under the DSU, although the United  States also recognized that the DSU does not 
specifically prescribe how a meeting in an arbitration proceed ing under Article 22.6 of the DSU should 
be conducted. The United  States, in particular, stressed that a contemporaneous oral exchange 
between the parties and the Arbitrator was an important feature of such meetings. The United  States 
explained that, due to then -current technological and logistical constraints facing the United  States, 
such a contemporaneous oral exchange over a virtual platform such as Cisco Webex would be 
infeasible. The United  States also considered that if one party were able to ap pear in person before 
the Arbitrator, while the other was not, then, in the United  States' view, the latter would be at a 
disadvantage during the meeting. The United  States, however, agreed with Canada that any 
questions that the Arbitrator intended to put  to the parties at the meeting (in whatever format the 
meeting would ultimately occur) should be sent to the parties at least two weeks before the meeting. 
The United  States suggested that the Arbitrator revisit this discussion at the end of April 2021 whe n 
the situation with respect to COVID -19 vaccination efforts would be clearer, and asserted that a 
delay in holding the meeting would not prejudice Canada because no CVD rates affected by the 
OFA-AFA Measure were currently applied to Canadian companies. Th e United  States did not WT/DS505/ARB  
 
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comment on the Additional Working Procedures of the Arbitrator Concerning Meetings with Remote 
Participation at that time.  
2.6.  In response, Canada asserted that: (a) arbitration proceedings under Article 22.6 of the DSU 
are intended to proceed on expedited timelines; (b) it was entirely speculative as to when an 
in-person meeting could be held amid the uncertainties created by the pandemic and that the DSU 
does not require in -person meetings; (c) oral exchanges over a virtual meeting pla tform such as 
Cisco Webex were possible; (d) virtual meetings had been held in other WTO dispute proceedings; 
and (e)  a material delay in the completion of the arbitration proceeding could prejudice Canada since 
the OFA -AFA Measure could be used at any tim e against Canadian firms, and Canada required a 
means by which to respond to such use if and when it occurred. Canada therefore reaffirmed that 
the meeting proceed as scheduled in a virtual format, or with a modest delay to accommodate 
logistical constrain ts. 
2.7.  On 1 February 2021, the Arbitrator sent a message to the parties noting that, in particular, the 
meeting had previously been scheduled for two days although a virtually held meeting would require 
more days than that to conduct, and that the parties' joint request that the Arbitrator send advance 
questions to the parties at least two weeks before the meeting date was incompatible with respect 
to a March 2021 meeting date given the short period of time between the receipt of the parties' 
respon ses to the Arbitrator's first round of questions and that meeting date. Given these logistical 
issues, the Arbitrator therefore informed that parties that the meeting date in March 2021 was 
cancelled, and that the Arbitrator would reschedule the meeting fo llowing further consultation with 
the parties.  
2.8.  On 22 February 2021, the Arbitrator informed the parties that, in the Arbitrator's view, both 
parties had raised relevant points in their previous communications regarding the related subjects 
of when to sched ule the meeting and in what format the meeting should occur. In particular, the 
Arbitrator recognized that arbitration proceedings held under Article 22.6 of the DSU are expedited 
in nature and that Canada had a strong interest in completing the arbitratio n in a timely manner. 
The Arbitrator also recognized that holding a meeting that allowed for contemporaneous oral 
exchanges was preferable, as it enhanced the Arbitrator's ability to explore relevant issues with the 
parties. The Arbitrator considered that,  in light of the ongoing vaccination efforts at that time, holding 
either an in -person meeting in Geneva or a virtual meeting whereby the parties could gather and 
participate in groups in their respective capitals (thus making contemporaneous oral exchange s 
reasonably possible) was a reasonable possibility in the foreseeable future. The Arbitrator thus 
delayed further consideration of the issue until April 2021. In doing so, the Arbitrator, inter alia , 
stressed that it intended to hold the meeting in a mann er that would not unduly delay the ultimate 
completion of the arbitration proceeding.  
2.9.  On 23 April 2021, Canada sent a message to the Arbitrator requesting that, in light of the 
then-worsening COVID -19 situation in Canada and accompanying restrictions on mo vements of 
persons, the meeting be held in September 2021 by which point the COVID -19 situation in Canada 
would likely have improved, with the understanding that there should be no further postponement 
of the meeting beyond September 2021. On the same day,  the United  States informed the Arbitrator 
that it "notionally" agreed with Canada's proposal for a meeting date in September 2021, but stated 
that the United  States still considered an in -person meeting to be the most appropriate format. The 
United  States  suggested that the Arbitrator revisit the issue of the meeting date closer to 
September  2021.  
2.10.   On 30 April 2021, the Arbitrator informed the parties that it was considering the parties' most 
recent communications, and that it would revert to the parties in  the near future regarding when to 
schedule the meeting. The Arbitrator also affirmed that it would transmit questions to the parties in 
advance of the meeting at least two weeks before the meeting occurred. The Arbitrator further 
informed the parties that  the Arbitrator would proceed with issuing a second round of questions to 
the parties for written responses in the near term so as to continue advancing its work on the 
proceeding before the meeting was held. The Arbitrator transmitted those questions to t he parties 
on 18 May 2021.  
2.11.   Also on 18 May 2021, the Arbitrator informed the parties that, in light of the parties' previous 
communications, the Arbitrator would like to schedule the meeting with the parties for the week of 
20 September 2021. In so doing, t he Arbitrator underlined that setting such a meeting date was 
desirable, in the Arbitrator's view, because the meeting date had already been materially delayed, WT/DS505/ARB  
 
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  and setting a meeting date well in advance of the meeting would allow that all relevant partici pants 
to plan accordingly. The Arbitrator, however, deferred deciding on the specific format of the meeting 
until a later time, but at the latest by 31 July 2021. On 20 May 2021, the parties responded that 
they were available for a meeting the week of 20 S eptember 2021. On 26 May 2021, the Arbitrator 
set the meeting for the week of 20 -24 September 2021.  
2.12.    On 30 June 2021, the Arbitrator asked the parties to communicate their expectations 
regarding how their delegations would participate in a meeting during t he week of 20 September 
2021, and specifically their ability to attend a meeting in -person in Geneva or to gather in groups in 
their capitals to participate virtually over Cisco Webex. The Arbitrator also asked the parties to again 
provide comments on draf t Additional Working Procedures of the Arbitrator Concerning Meetings 
with Remote Participation, given that significant time had elapsed since the last time the Arbitrator 
transmitted those draft procedures to the parties for comment.  
2.13.   On 5 and 7 July 2021,  the parties responded to the Arbitrator's message of 30 June 2021 and 
commented on each other's responses, respectively. Both parties indicated that: (a) while an 
in-person meeting format was preferable, they could not confirm their delegations' ability t o travel 
to Geneva for such a meeting; (b) if the meeting were held virtually, the parties' delegations could 
gather in rooms equipped with Cisco Webex in their respective home countries; (c) that if either 
party could not attend an in -person meeting in Ge neva then the meeting should be held virtually for 
all participants; and (d) that the Arbitrator should consult further with the parties in August 2021 
regarding the format of the meeting. Neither party had any material comments regarding the draft 
procedu res concerning a virtual meeting.  
2.14.   On 5 August 2021, the Arbitrator informed the parties that, given relevant ongoing travel 
restrictions due to COVID -19, and the then -recent spread of certain COVID -19 variants, the 
members of the Arbitrator expected to par ticipate in the meeting from their home countries over 
the Cisco Webex platform, but would reach a final decision as to its mode of participation by 
20 August 2021. The Arbitrator also informed the parties that a room at the WTO equipped with 
Cisco Webex w ould be available for delegates who wished to attend from Geneva. The Arbitrator 
asked the parties to inform the Arbitrator of their mode of participation by 16 August 2021.  
2.15.   On 16 August 2021, the parties both informed the Arbitrator that their delegations  expected 
to participate in the meeting over the Cisco Webex platform from their respective home countries.  
2.16.   On 20 August 2021, the Arbitrator confirmed that the members of the Arbitrator would be 
participating in the meeting remotely over the Cisco Webex p latform. In the same communication, 
the Arbitrator also: (a) adopted the Additional Working Procedures of the Arbitrator Concerning 
Meetings with Remote Participation, which had previously been sent to the parties for comment  
(see Annex A -3 of the Addendum  to this Decision, WT/DS505/ARB/Add.1) ; (b) informed the parties 
that the meeting would be held starting on 20 September 2021 and continue, as necessary, up 
through 24 September 2021 in sessions lasting from 13:00 -16:00 (Geneva time) each day; and 
(c) attached the invitation to the meeting. On 25 August 2021, the Arbitrator transmitted the 
questions to the parties in advance of the meeting.  
2.17.   The Secretariat held an individual Cisco Webex test session with each party during the week 
of 13 September 2021, and the Arbitrator held a joint Cisco Webex test session with the parties on 
Friday, 17 September 2021. The meeting with the parties was held on 20 -23 September 2021  
(a session on 24 September was ultimately unnecessary) . All participants from the Canadian 
delegation participated remotely from locations in Canada. All but two members of the US delegation 
participated remotely from the United  States. The other two members of the United  States' 
delegation participated from a designated room equipped with Cisco We bex at the WTO. The 
Secretariat attended the meeting remotely from a separate room at the WTO. The members of the 
Arbitrator attended remotely with Cisco Webex from their respective home countries. The 
United  States and Canadian delegations participated in  a manner such that contemporaneous oral 
exchanges occurred as between the parties and as between the parties and the Arbitrator.  
2.2  Delayed public presentation of the meeting with the parties  
2.18.   On 28 August 2020, following the organizational meeting and at the request of the parties, 
the Arbitrator adopted Additional Working Procedures Concerning an Open Meeting. These WT/DS505/ARB  
 
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procedures assumed that the meeting with the parties would occur in an in -person format , as is 
customary , in Geneva. As explained in the sect ion immediately above, however, the meeting with 
the parties ultimately occurred in a virtual  format, with the great majority of attendees participating 
via the Cisco Webex platform from their home countries. In a communication to the parties dated 
20 Augu st 2021 (i.e. at the same time as the Arbitrator confirmed that the meeting would be held 
in a virtual format), the Arbitrator recognized that the procedures as adopted were incompatible 
with the meeting's virtual  format. The Arbitrator therefore proposed to the parties that the Arbitrator 
instead, in due course and in further consultation with the parties, adopt alternate procedures 
allowing for a delayed public presentation of the meeting. In communications dated 27 and 
31 August 2021, the parties voiced no objection to this course of action. Accordingly, on 
3 September 2021, the Arbitrator repealed the previous set of open meeting procedures, and on 
6 December 2021 the Arbitrator proposed an alternate version of open meeting procedures allowing 
for a dela yed public presentation. The parties provided comments thereon on 7 and 8 December  
2021 and comments on the other party's response on 9 December 2021. The Arbitrator adopted 
these procedures on 17 December 2021.  
2.19.   The delayed public broadcast occurred on 7-10 March 2022 . Pursuant to those procedures, 
relevant portions of the audio recording of the meeting were available for registered members of the 
public for a period of 72 hours. The audio recording was available through a dedicated page on the 
WTO website.  Also on that page, and available to registered members of the public, were written 
versions of the parties' as -delivered opening and closing statements, and written versions of the 
parties' responses to the Arbitrator questions following the meeting.  
3  THE MANDATE OF THE ARBITRATOR  
3.1.  This arbitration proceeding results from the United  States' objection to Canada's request for 
authorization to suspend concessions or other related obligations.21 Pursuant to Article 22.4 of the 
DSU, "[t]he level of the suspension  of concessions or other obligations authorized by the DSB shall 
be equivalent  to the level of the nullification or impairment".22 The mandate of the Arbitrator, as set 
out in Article  22.7 of the DSU, is as follows:  
The arbitrator acting pursuant to paragr aph 6 shall not examine the nature of the 
concessions or other obligations to be suspended but shall determine whether the level 
of such suspension is equivalent to the level of nullification or impairment .23 
3.2.  The meaning  of the word "equivalence" connotes a "correspondence, identity or balance 
between two related levels, i.e. between the level of the concessions to be suspended, on the one 
hand, and the level of the nullification or impairment, on the other".24 
3.3.  Thus, the Arbitrator's task in these proceedin gs is to examine whether the level of suspension 
proposed by Canada is equivalent to the level of NI sustained by Canada "as a result of the failure 
of the responding party to bring its WTO -inconsistent measures into compliance".25 
3.4.  The Arbitrator's assessm ent of the level of NI should be performed in an objective manner.26 
If the Arbitrator  finds that Canada's proposed level of suspension is inconsistent with the DSU, the 
Arbitrator must determine the level of suspension it considers to be equivalent to the  impairment 
suffered by Canada.27 Any determination of NI, because it is based on assumptions, is necessarily a 
 
21 Recourse to Article 22.6 of the DSU by the United  States, WT/DS505/14.  
22 Emphasis added.  
23 Emphasis added.  
24 Decision by the Arbitrator, EC – Bananas III (US) (Article 22.6 – EC), para. 4.1.  Insofar as we  refer to 
them in this section,  we agree with  previous arbitrators ' statements.  
25 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), para. 4.5.  
26 Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), para. 3.6.  
27 See, e.g. Decision by the Arbitrator,  EC – Hormones (US) (Article 22.6 – EC), para. 12. In 
determining the level of NI, previous arbitrators have developed their own appropriate methodologies, based 
either on elements of methodologies proposed by the parties, or on an altogether different appr oach. 
(Decision  by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 1.16 (referring to Decisions by 
the Arbitrators, US – Offset Act (Byrd Amendment) (EC) (Article 22.6 – US), paras. 3.115 and 3.69 -3.79; 
US – Gambling (Article 22.6 – US), para. 3.174).  WT/DS505/ARB  
 
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  reasoned estimate.28 Previous arbitrators have endeavoured to rely on the best information or data 
that is available in pursuit of formulating such a reasoned estimate29, and have declined to accept 
claims that are too remote, too speculative, or not meaningfully quantified.30 Moreover, assumptions 
relied on by the parties should be reasonable given the circumstances of the dispute an d should be 
based on credible, factual, and verifiable information.31 
3.5.  Finally, we note that the purpose of suspension of concessions or other obligations is to "induce 
compliance".32 Other  arbitrators also observed that the concept of equivalence referred to in 
Article  22.4 of the DSU means that obligations cannot be suspended in a "punitive" manner.33 
4  BURDEN OF PROOF  
4.1.  We agree with previous arbitrators that t he burden of proving that the re quirements of the 
DSU have not been met rests on the party challenging the proposed level of suspension.34 
Accordingly, in this proceeding, t he United  States bears the initial burden of establishing a 
prima  facie case that the level of suspension proposed by Canada is not equivalent to the level of 
NI. To discharge this burden, it would be insufficient for the United  States to merely propose an 
alternative methodology that it asserts is more appropriate  compared with the methodology 
advanced by Canada . Rath er, the United  States must demonstrate why Canada's methodology would  
result in a level of suspension that is not "equivalent" to the level of NI within the meaning of 
Article  22.4 of the DSU. Finally, e ach party also "has the duty to produce evidence in s upport of its 
assertions of fact and to collaborate with an Article  22.6 arbitrator in presenting evidence".35 
5  THE MEASURE AT ISSUE  
5.1.  The measure at issue in this arbitration is the so -called "Other Forms of Assistance – Adverse 
Facts Available Measure" (OFA -AFA Measure). Th is measure was challenged as, and found by the 
Panel and Appellate Body  to be , an unwritten measure in the form of "ongoing  conduct" that was 
attributable to the United  States. Concretely, that meant that the measure was found: (a) to be 
attributable to the United  States; (b) to have a precise content; (c) to have repeated application; 
and (d) to be likely to continue in the future.36 
5.2.  The Appellate  Body upheld the Panel's characterization of the precise content of the 
OFA-AFA Measure  "as the USDOC asking the OFA  question and, where the USDOC discovers 
information during verification that it deems should have been provided in response to the 
 
28 See, e.g. Decision by the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), para. 5.54 (quoting 
Decision by the Arbitrator, EC – Hormones (US) (Article 22.6 – EC), para. 41).  
29 See, e.g. Decision by the Arbitrator, EC and certain member St ates – Large Civil Aircraft (Article 22.6 
– EU), para . 6.175. See also Decisions by the Arbitrator s, US – COOL (Article 22.6 – US), paras.  1.18 and 
5.101; US – Anti-Dumping Methodologies (China) (Article 22.6 – US), paras. 7.16, 7.19, 7.22, 7.29, 7.34, and 
fn 272; and Award of the Arbitrator, US – Section 110(5) Copyright Act (Article 25) , para.  4.28. 
30 See, e.g. Decision by the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), para.  5.57 (quoting 
Decisions by the  Arbitrators, EC – Hormones (US) (Article 22.6 – EC), para. 77; Canada – Aircraft Credits and 
Guarantees (Article  22.6 – Canada) , para. 3.22) . 
31 See, e.g. Decisions by the Arbitrators, US – Countervailing Measures (China) (Article  22.6 – US), 
para. 3.40; EC and certain member States – Large Civil Aircraft (Article  22.6 – EU), para.  6.173; US – 1916 
Act (EC) (Article  22.6 – US), para.  5.54). See also Decision by the Arbitrator, US – Washing Machines 
(Article  22.6 – US), paras. 1.16 and  3.127, indicating that  "'it is necessary to rely only on credible, verifiable 
information, and not on speculation' in calculating the level of nullification or impairment" (quoting Decision by 
the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), para.  5.63).  
32 See, e.g. Deci sion by the Arbitrator,  US – 1916 Act (EC) (Article 22.6 – US), paras. 5.5 -5.6 (quoting 
Decisions by the Arbitrators, EC – Bananas III (Ecuador) (Article 22.6 – EC), para. 76; EC – Bananas III (US) 
(Article  22.6 – EC), para. 6.3).  
33 See, e.g. Decision by t he Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), para. 5.8;  US – Upland 
Cotton (Article 22.6 – US I), para. 4.109 (referring to Decision by the Arbitrator, EC – Bananas III (US) 
(Article  22.6 – EC), para. 6.3).  
34 See, e.g. Decisions by the Arbitrators, US – Countervailing Measures (China) (Article  22.6 – US), 
para. 3.2 and fn 39 thereto; US – Anti-Dumping Methodologies (China) (Article  22.6 – US), para.  1.11; 
US – Washing Machines (Article  22.6 – US), para. 1.14 ; and US – Large Civil Aircraft (2nd complaint) 
(Article  22.6 – US), para. 4.3.  
35 Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), para. 4.4.  
36 Panel  Report, paras. 7.305 and 7.316.  WT/DS505/ARB  
 
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OFA question, applying AFA to determine that such information amounts to countervailable 
subsidi es".37 
6  THE UNITED  STATES' GENERAL OBJECTIONS TO THE LEVEL OF NULLIFICATION OR 
IMPAIRMENT  
6.1  Preliminary issues  
6.1.1   Whether the United  States has rebutted the presumption of nullification or 
impairment  
6.1.  We recall that, in its request to the DSB, Canada sought autho rization to suspend concessions 
"at an annual level commensurate with the trade effects of any future  countervailing duties on 
Canadian imports of any given good that are attributable to the U.S. 'ongoing conduct' at issue in 
this dispute".38 Canada also e xplained that its request reflects the level of NI that Canada " will suffer 
if the "ongoing conduct" continues to exist and applies to exports from Canada in the future".39 
6.2.  The United  States  objects to Canada's proposed level of suspension of concessions o r other 
obligations on the basis that it is neither: (a) equivalent to the level of NI within the meaning of the 
first sentence of Article 22.7 of the DSU; nor (b) allowed under the DSU, within the meaning of the 
second sentence of Article 22.7.40 As regards both objections, the United  States notes that the only 
instance in which the OFA -AFA "ongoing conduct" measure was found to "exist and apply" to Canada 
was through the Supercalendered Paper CVD order.41 The United  States further notes that, in 
July 2018, the Supercalendered Paper CVD order was revoked with retroactive effect from the 
beginning of the CVD proceeding, such that it no longer applies to Canada. The United  States argues 
that, in these circumstances, Canada is not subject to the OFA -AFA measure; the present level of 
NI suffered by Canada is zero; consequently, there is no NI; and thus the level of NI must be set at 
zero and remain at zero.42 According to the United  States, Canada's request for suspension of 
concessions is solely concer ned with a "hypothetical, future nullification or impairment".43 In 
addition, the United  States explains that there are no benefits to Canada that "are being impaired" 
in the present, and to allow suspension of concessions with respect to solely hypothetic al, future NI 
is contrary to Articles  3.3, 22.4 and 22.7 of the DSU and unsupported by prior arbitrations.44 The 
United  States also submits that it is consistent with the DSU for an arbitrator in proceedings under 
Article 22.6 to examine whether a Member h as rebutted the presumption of NI under Article 3.8 
when assessing the level of NI under Articles 22.4 and 22.7 of the DSU.45 
 
37 Appellate Body Report, para. 5.2 4 (quoting  Panel  Report , para. 7.316). The "OFA question" essentially 
comprises of a question that the USDOC includes in questionnaires issued in CVD investigations. More 
specifically, the OFA question "'asks whether a respondent country provided the respo ndent company with 'any 
other forms of assistance', 'directly or indirectly', and to 'describe such assistance in detail, including the 
amounts, date of receipt, purpose and terms'". Appellate Body Report, para. 5.21.  
38 WT/DS505/13. (emphasis added)  
39 WT/D S505/13. (emphasis added)  
40 United  States' written submission, paras. 13 -14.  
41 United  States' written submission, para. 24.  
42 United  States' opening statement at the meeting of the Arbitrator, paras. 10-11; response to 
Arbitrator question No. 3, para. 12; No.  4, para. 16; and No. 5, para. 20; and written submission, paras. 13 -15 
and 24. The United  States clarifies that it is not asking the Arbitrator to determine that, with the revocation of 
the Supercalendered Paper CVD order the OFA -AFA "ongoing conduct" measure ceased to exist, or that t he 
measure has been withdrawn. Rather, the United  States argues that Canada suffers from no NI because there 
are no CVD determinations concerning Canadian products that involve the OFA -AFA measure, such that the 
OFA-AFA Measure does not continue to apply t o Canada (United  States' response to Arbitrator question No. 1, 
paras. 2 and 7; No. 5, para.  20; and No. 7, para. 30).  
43 United  States' opening statement at the meeting of the Arbitrator, para. 17; written submission, 
para. 31. See also United  States' resp onse to Arbitrator question No. 5, para. 21.  
44 United  States' written submission, paras. 13 -14 and 30 -31; response to Arbitrator question No. 4, 
paras. 13 and 17, No. 5, para. 21; and opening statement, paras. 17 -19.  
45 United  States' written submission, p aras. 13 (explaining that " where nullification or impairment does 
not exist, the level of suspension should be set at zero. To do otherwise would breach Articles 22.4 and 22.7 of 
the DSU") (emphasis original) and 16 -21 (arguing, based on Article 3.8 of the  DSU, that the DSU permit an 
arbitrator acting under Article 22.6 of the DSU to find that NI does not exist). See also United  States' response 
to Arbitrator question No. 2, paras. 8 and 10.  WT/DS505/ARB  
 
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  6.3.  Canada  argues that the mandate of an arbitrator under Article 22.6 of the DSU is confined to 
determining the level of NI, not its existence . Thus, the United  States is not entitled to re -litigate 
the existence of NI in the context of this arbitration proceeding.46 Canada further argues that, even 
if the Arbitrator could re -evaluate whether the OFA -AFA measure continues to nullify or impair 
benefits accruing to Canada, the United  States has not rebutted the presumption of NI because it 
has failed to produce any ev idence that the measure has been brought into conformity with the 
covered agreements, nor has the United  States provided any assurance that it will not apply the 
OFA-AFA Measure against Canada in the future.47 Canada disputes the United  States' contention 
that Canada's request is not supported by prior arbitrations.48 On the contrary, Canada contends 
that its request for authorization to suspend concessions with respect to any future application of 
the OFA -AFA Measure to Canada is similar to requests made i n prior arbitrations to suspend 
concessions for maintaining WTO -inconsistent "as such" measures that have yet to be applied 
against the WTO complainant in the future.49 Canada rejects the United  States' argument that, 
because the OFA -AFA Measure is not pre sently being applied against Canada, Canada does not have 
the opportunity to retaliate in the event that the measure is re -applied against it in the future. 
Canada notes that it only has this one opportunity to request suspension of concessions.50 
6.4.  The Arbi trator notes, at the outset, that the Arbitrator initially understood the United  States to 
be arguing that the OFA -AFA Measure itself did not exist in relation to Canada, owing to the 
revocation of the Supercalendered Paper CVD order with retroactive effec t to the beginning of the 
CVD proceeding, and that for this reason, Canada suffers no NI.51 Following questioning from the 
Arbitrator, however, the United  States clarified that its argument that Canada suffers no NI does not 
depend on the Arbitrator making  a determination regarding the existence of the OFA -AFA Measure.52 
The Arbitrator, therefore, need not make any findings regarding the continued existence of the 
OFA-AFA Measure.53 
6.5.  The United States' argument in this context, rather, is that that Canada is  not presently 
suffering NI, and that for this reason, the level of NI for the purpose of this arbitration must be set 
at zero and stay at zero. The validity of this argument depends upon the merits of following 
propositions: (a) present NI must exist in o rder for an arbitrator acting under Article  22.6 of the 
DSU to allow an original complainant to suspend concessions in a non -zero amount in the future 
that is "equivalent" to a future level of NI; (b) no present NI exists vis-à-vis Canada because there 
are currently no US CVD measures in place against Canadian firms that are affected by the 
OFA-AFA Measure; and (c) it is within the Arbitrator's jurisdiction to examine the existence of present 
NI. All three propositions must hold in order for the United  States to prevail in this context. We 
therefore first address the United  States' proposition under item (a), i.e. that present NI must exist 
in order for an arbitrator to allow for a non -zero level of NI and equivalent suspension in the future.  
As discussed be low, we find that we must ultimately reject the United States' position because it not 
only lacks support in the text of the DSU and in prior dispute settlement practice, but it could also 
 
46 Canada's written submission, paras. 21 -24; response to Arbitrato r question No. 2, para. 5. Canada 
contends that the United  States ignores that the panel's finding that the OFA -AFA measure nullifies or impairs 
benefits accruing to Canada under Article 3.8 of the DSU is predicated on the fact that the United  States faile d 
to rebut the claim of nullification or impairment (Canada's written submission, para. 37).  
47 Canada's written submission, para. 39.  
48 Canada's written submission, paras. 53 -56; response to Arbitrator question No. 3, paras. 8 -12.  
49 Canada's methodology p aper, para. 5.  
50 Canada's opening statement at the meeting of the Arbitrator, paras. 68 -69. See also Canada's written 
submission, para. 52.  
51 Canada also initially seemed to have shared this understanding of the United  States' argument 
because, in its writ ten submission, Canada submitted that any argument by the United  States that the 
OFA-AFA Measure has ceased to exist was equivalent to an assertion that the OFA -AFA Measure had been 
withdrawn, and therefore no longer nullified or impaired benefits to Canad a. See e.g. Canada's written 
submission, para. 34.  
52 United  States' response to Arbitrator question No. 1, para. 2; and No. 7, para. 30.  
53 We note that even if the United States had argued that the OFA -AFA Measure had ceased to exist , we 
discern no way that argument  could be sustained on the basis that the United States offers, i.e. the revocation 
of the Supercalendered Paper CVD order. This is so because the scope of the OFA -AFA Measure was found by 
the Panel, as upheld by the Appellate Body, to be broader  than the application of the OFA -AFA Measure in any 
one particular instance.  Indeed, we recall that the OFA -AFA Measure was found to be a measure that was 
unwritten "ongoing conduct", whose precise content nowhere mentions the Supercalendered Paper order.  
See section  5, above. WT/DS505/ARB  
 
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effectively nullify original complainants ' rights to seek redress t hrough Article 22.6 arbitrations for a 
wide variety of measures that are subject to WTO dispute settlement.  
6.6.  The United  States supports the proposition that present NI must exist in order for an arbitrator 
to allow for a non -zero level of NI and equivalent suspension in the future , with reference to 
provisions of the DSU. In particular, the United  States argues that to allow suspension of concessions 
in the circumstances of this case (i.e. where there is allegedly no present NI because the 
OFA-AFA Measure is not currently being applied to Canadian products) would be contrary to 
Article  3.3 of the DSU. The United  States submits that Article 3.3 uses the present progressive tense 
("any benefits accruing to it directly or indirectly" and "are being imp aired"), such that the prompt 
settlement of situations is only required where present benefits accruing to Canada are being 
impaired.54 We note, however, that Article 3.3 of the DSU is one of the "general provisions" of the 
DSU and expresses the principle that the prompt settlement of disputes is essential to the effective 
functioning of the WTO. It does not purport to define the parameters for the authorization of 
suspension of concessions under Article 22.7. We therefore do not consider that Article 3.3 o f the 
DSU confines the ability of Article 22.6 arbitrators to authorize suspension of concessions in the 
future only where it also establishes that benefits accruing to the complaining Member are also 
presently  being impaired.55 
6.7.  The United  States also argu es that no benefits to Canada are currently being impaired, and 
therefore, the level of NI today is zero and the level of suspension that the Arbitrator can authorize 
in accordance with Article 22.4 must reflect that level.56 We recall that Article 22.4 of  the DSU simply 
establishes that the level of suspension authorized by the DSB "shall be equivalent" to the level of 
NI. Neither party advocates that Canada should be granted the ability to suspend concessions that 
exceeds the level of NI arising from appl ications of the OFA -AFA Measure to Canadian entities in 
terms of direct trade effects. In our view, therefore, Article 22.4 lends no material support to the 
United  States' argument. We discern no other provisions of the DSU that provide material support 
for the United  States' argument in this context.  
6.8.  The United  States also discusses four prior arbitration decisions in this context57, specifically 
the same four prior arbitrations Canada referred to in its Methodology Paper.58 In each arbitration, 
authorizat ion was granted to suspend concessions in response to the continued maintenance of 
measures previously found to be "as such" WTO -inconsistent. The United  States argues that these 
arbitration decisions are irrelevant for the purpose of the present arbitrati on because they concerned 
measures that were found to be "as such" WTO -inconsistent, whereas the OFA -AFA Measure was 
found to be "ongoing conduct".59 In any case, the United  States argues that, in these past 
arbitrations, which concerned purported future N I, the DSB authorized the suspension of concessions 
because  "present day"  NI existed.60 We discuss each arbitration decision further below, in particular, 
to ascertain whether the authorization to suspend concessions with respect to future NI in each case 
depended on the existence of a present level of NI.  
6.9.  In US – 1916 Act (EC) (Article 22.6 – US), the 1916 Act was found to be "as such" 
WTO-inconsistent. At the end of the implementation period, the United  States argued that because 
there were no orders unde r the Act in place against EC products, the level of NI was zero. The 
arbitrator rejected this argument on the basis that it was inconsistent with the panel and 
Appellate  Body findings that "'the 1916 Act nullifies and impairs benefits accruing to the 
European Communities'".61 After rejecting the United  States' argument that the level of NI was zero, 
the arbitrator then determined "what could legitimately be considered to constitute nullification or 
impairment of benefits to the European Communities" in the situation in which t he 1916 Act has 
been found to be "as such" WTO -inconsistent (i.e. in the event that 1916 Act orders were put in 
 
54 United  States' response to Arbitrator question No. 4, para. 14.  
55 We note that Article 3.8 of the DSU speaks only in terms of a WTO -inconsistent measure leading to 
"a case of nullif ication or impairment" that "has an adverse impact on other Members".  
56 United  States' response to Arbitrator question No. 4, para. 15.  
57 United States' written submission, paras. 28 -34. 
58 Canada's methodology paper, para. 5. The arbitrations are: Decision s by the Arbitrators, US – 1916 
Act (EC) (Article 22.6 – US); US – Offset Act (Byrd Amendment) (EC) (Article 22.6 – US); US – Upland Cotton 
(Article 22.6 – US I); and US – Washing Machines (Article 22.6 – US). 
59 United  States' written submission, para. 29.  
60 United  States' response to Arbitrator question No. 4, para. 16; written submission, paras. 28 -31. 
61 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), paras. 5.48 and 5.50 
(quoting  Panel Report, US – 1916 Act (EC) , para. 6.227).  WT/DS505/ARB  
 
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  place against EC products in the future).62 The arbitrator concluded that NI in that situation would 
consist of any final judgments and settleme nt awards entered against EC companies or their 
subsidiaries under the 1916 Act.63 It declined to include in the NI any claim for a deterrent or "chilling 
effect" on EC companies on the basis that such a claim would be too speculative and remote (noting 
also that both parties agreed that the chilling effect could not be quantified).64 It also declined to 
include existing legal expenses related to pending US court cases because the 
European  Communities had not meaningfully quantified such costs.65 
6.10.   The United  States distinguishes the situation in the arbitration in US – 1916 Act (EC) from the 
present case on the basis that the EC companies had entered into settlement agreements under the 
1916 Act since the expiration of the reasonable period of time, and thus there was existing NI at the 
time of the European Communities' request for suspension of concessions.66 In our view, however, 
there is nothing in the arbitrator's decision that suggests that its determination of the level of NI 
that would arise from the fu ture application of the 1916 Act to EC companies was dependent on a 
finding that outstanding settlement awards gave rise to "present" NI. Indeed, the arbitrator found 
that amounts with respect to any existing settlement awards had not been quantified by th e 
European Communities and therefore did not include them in its determination of the level of NI.67 
6.11.   Rather, it appears that it was the "as such" nature of the WTO -inconsistency that led the 
arbitrator to identify the factors or events that would be eligib le for inclusion in a quantification of 
any future NI (i.e. should the 1916 Act be applied in the future). The arbitrator explains this in a 
section of the decision called "[o]ngoing nullification or impairment".68 Specifically, the arbitrator 
recalls the "as such" nature of the WTO -inconsistency, which it distinguishes from a case where the 
WTO-inconsistency is only "as applied". The arbitrator notes that, given the "as such" nature of the 
WTO-inconsistency of the 1916 Act, each application of the Act incr eases the level of NI sustained 
by the European Communities and therefore entitles the European Communities to increase 
concomitantly the level of its suspension of obligations.69 
6.12.   Following the circulation of the decision by the arbitrator in US – 1916 Act  (EC) 
(Article  22.6 – US) (2004), there were multiple arbitrations authorizi ng the suspension of 
concessions against the United  States with respect to the Continued Dumping and Subsidies Offset 
Act of 2000 (Byrd Amendment), which was found to be "as such" WTO -inconsistent. The arbitrator 
in those proceedings took the view that the disbursements made to US producers under the 
Byrd Amendment were economically equivalent to subsidies that may generate import substitution 
production. Thus, the arbitrator considered that the benefits nullified or impaired by such 
disbursements could correspond to the value of exports from each of the complainants that were 
replaced by the United  States' domestic production. Accordingly, the arbitrator determined the level 
of NI on the basis of an economic model that would measure the extent to which future  
disbursements under the Byrd Amendment affected exports from the complainant parties to the 
United  States, using a model that combined a fixed coefficient calculated on th e basis of actual, past 
disbursements over the previous three years,  with variable amounts for future disbursements.  
6.13.   The United  States argues that, in the Byrd Amendment arbitrations, the NI concerned 
"disbursements that had been made and would continue to  be made" under the legislation.70 
However, there is nothing in the reasoning or approach of the arbitrator to suggest that, had there 
not been prior applications of the Byrd Amendment (i.e. a "current" level of NI), the United  States 
could have successful ly argued that the determination of the level of NI should exclude consideration 
of any future disbursements under the Byrd Amendment.  
6.14.   US – Upland Cotton (Article 22.6 – US I) concerned Brazil's request for countermeasures with 
respect to a prohibited subs idy under Article 3.1(a) of the SCM Agreement, which the United  States 
had been required to withdraw without delay pursuant to Article 4.7 of the SCM Agreement. Brazil 
requested authorization to apply countermeasures not only in the specific amount that it  had 
 
62 Decis ion by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), para. 5.53.  
63 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), paras. 5.58 and 5.61.  
64 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), paras. 5.69-5.70. 
65 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), paras. 5.77 -5.78. 
66 United  States' written submission, para. 30.  
67 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), para. 6.10.  
68 Decision by the Arbitrator , US – 1916 Act (EC) (Article 22.6 – US), paras. 6.14 -6.17. 
69 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), para. 6.17.  
70 United  States' written submission, para. 30.  WT/DS505/ARB  
 
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calculated with reference to the period from the expiration of the implementation period, but also 
with respect to future amounts to be calculated by reference to the same formula through which the 
present amount had been calculated.71 After noting th at the United  States did not dispute that it 
would be permissible to determine the level of countermeasures through an appropriate formula, 
the arbitrator authorized countermeasures that consisted of a specific amount for the FY 2006, and 
for subsequent ye ars, an amount that would be variable on an annual basis. This amount would 
depend, among other things, on the total amount of transactions under the prohibited subsidy 
programme for the most recently concluded fiscal year.72 
6.15.   The United  States characterize s the US – Upland Cotton (Article 22.6 – US I)  arbitration as 
one involving "a measure that existed at the time and could continue to exist such that an award 
was given for a specific calendar year, as well as for future years".73 While this may be correct , it 
seems that the legally relevant factor was not that an amount of countermeasures was calculated 
for FY  2006, as well as for future years, but that the prohibited subsidy programme was maintained 
in FY 2006 and subsequently. Likewise, the OFA -AFA Measu re existed and continues to exist at all 
relevant points in time, even if it is not presently applied to Canadian products.74 There is nothing 
in the arbitrator's analysis that suggests that its decision to authorize annual countermeasures based 
on a formu la that could be applied to future transactions under the prohibited subsidy programme 
turned on the fact that transactions under the prohibited subsidy programme were made in a 
"present" period (FY  2006).  
6.16.   Finally, the United  States refers to the more rece nt arbitrator decision in 
US – Washing  Machines (Article 22.6 – US) as another instance in which the measures found to be 
"as such" WTO -inconsistent were currently applied in US anti -dumping duty  (ADD)  orders involving 
Korean goods and would continue to be  used.75 In US – Washing Machines (Article 22.6 – US), the 
measures at issue had been found to be WTO -inconsistent both "as applied" with respect to washing 
machines from Korea and "as such" with respect to exports from Korea other than washing 
machines.76 The arbitrator determined the level of NI separately for the "as applied" and "as such" 
findings of WTO -inconsistency, respectively.77 
6.17.   There is nothing in the arbitrator's specification of the model pertaining to the level of NI with 
respect to the "as su ch" finding of WTO -inconsistency that suggests it was dependent on the 
WTO-inconsistent measure currently being applied in ADD orders involving Korean goods. Indeed, 
the arbitrator states that it decided to devise a formula that Korea could use " if and whe n" the 
United  States applies the WTO -inconsistent ADD measures to exports from Korea other than washing 
machines.78 
6.18.   In sum, we do not consider that any of the four prior arbitrations offer support for the 
United  States' argument that, where the suspension of concessions concerns an "as such" violation  
– or concerns any kind of measure, for that matter, including a measure characterized as "ongoing 
conduct" – an arbitrator determining the level of NI can include future NI only where it also 
determines a leve l of "present" NI.  
6.19.   Aside from its arguments regarding the DSU and prior arbitration decisions, the United  States 
also infers from the absence of any present CVD measure applied to Canada that used the 
OFA-AFA Measure that any future NI is "hypothetical" and should therefore be discounted. This 
argument by the United  States appears to misapprehend the significance of the temporal scope of 
NI that may arise from the OFA -AFA Measure. This is so because it does not  appear self -evident 
that, merely because there are no CVD determinations applying the OFA -AFA Measure that currently 
 
71 Decision by the Arbitrator, US – Upland Cotton (Article 22.6 – US I), para. 4.5.  
72 Decision by the Arbitrator, US – Upland Cotton (Article 22.6 – US I), para. 4.279.  
73 United  States' written submission, para. 30 (referring to Decision by the Arbitrator, US – Upland 
Cotton (Article 22.6 – US I), para. 6.5(a)).  
74 Here w e see that, although the United  States argues in its responses to the Arbitrator's questions that 
the Arbitrator need not determine that the OFA -AFA Measure does not exist in relation to Canada, the alleged 
non-existence of the OFA -AFA Measure may be an im plicit element of the overall US case.  
75 United  States' written submission, para. 30.  
76 Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), paras. 1.4 -1.5. 
77 The United  States had argued, in relation to the "as applied" finding, that the  actual level of NI was 
zero, and that this argument was rejected by the arbitrator (Decision by the Arbitrator, US – Washing Machines 
(Article 22.6 – US), paras. 3.48 -3.52).  
78 Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 4. 48. WT/DS505/ARB  
 
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  affect CVD rates on Canadian products, it follows that Canada's request to suspend concessions is 
limited to a hypothetical  future NI in a  manner that is relevant for this arbitration proceeding. Indeed, 
the Arbitrator considers it more accurate to characterize Canada's request as asking for authorization 
to suspend concessions when actual  NI (in the form of effects on direct trade flows) ar ises from 
future CVD determinations concerning Canadian products and containing the OFA -AFA Measure, a 
measure which, as the Panel found, is a measure likely to continue in the future. Moreover, the 
models proposed by both parties are specifically designed  to measure NI when and as it arises in 
the future. Such NI would not be too remote or too speculative such that it should not be quantified 
in accordance with the prospective model.79 
6.20.   This line of reasoning is directly supported, in our view, by the core principles of WTO dispute 
settlement. We recall that panels and the Appellate Body have, correctly in our view, explained that 
certain measures (e.g. taking the form of rules and norms) can be found to violate the covered 
agreements independently from  their application in a particular instance, based on the reasoning 
that the disciplines of the GATT and WTO are intended to protect not only existing trade but also the 
predictability and security needed to conduct future trade.80 We therefore note that i n instances 
where such measures had not been applied at the time of a subsequent arbitration occurring under 
Article 22.6 of the DSU, the United  States' approach in this context would nullify an original 
complainant's ability to seek redress of the violati on via such an arbitration. We discern no basis 
upon which to conclude that such an extreme result was the intent of the drafters of the DSU, and 
reiterate that we find no support for such a result in the  text of the  DSU or in prior dispute settlement 
practice.81 
6.21.   Based on the for egoing , we must reject the United  States proposition that present NI must 
exist in order for an arbitrator to allow for a non -zero level of NI and equivalent suspension in the 
future. It will be recalled that the United  States' over all argument in this context, i.e. that the level 
of NI must be set and stay at zero, depends on the validity of this proposition. Accordingly, we also 
reject the United  States' argument that the level of NI must be set and zero and stay at zero.82 
 
79 The United  States' argument may also be premised more simply on the notion that the OFA -AFA 
Measure may or may not be used against Canadian exporters in the future. This is true. The nature of the 
prospective formula itself, however, accounts for thi s uncertainty because it only results in Canada suspending 
concessions if actual NI arises. There appears no reason, therefore, to conclude that this kind of uncertainty, in 
this context, materially supports the United  States' argument.  
80 Thus, the Appella te Body has explained that allowing "as such" claims against "rules or norms that 
are intended to have general and prospective application", independently of their application in any particular 
instance, serves the purpose of preventing future disputes by "allowing the root of WTO -inconsistent behaviour 
to be eliminated." (Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para. 82. See also 
Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 172:  
In our view, "as such" challenges against a Member's measures in WTO dispute settlement 
proceedings are serious challenges. By definition, an "as such" claim challenges laws, 
regulations, or other instruments of a Member that have general and prospective application, 
asser ting that a Member's conduct – not only in a particular instance that has occurred, but in 
future situations as well – will necessarily be inconsistent with that Member's WTO obligations. In 
essence, complaining parties bringing "as such" challenges seek t o prevent Members ex ante  
from engaging in certain conduct. The implications of such challenges are obviously far more 
far-reaching than "as applied" claims. ( Appellate Body Report, US – Oil Country Tubular Goods 
Sunset Reviews , para. 172).  
81 See Appellate Body Report, EC – Bananas III , paras. 251 -253 (upholding the panel's finding that the 
EC had not rebutted the presumption of nullification or impairment, even though the United  States had not 
exported bananas to the EC, because, inter alia , the United  States had an interest in its potential to export 
bananas to the EC in the future).  
82 We also note that the United States offers that the current level of NI is zero because Canada 
currently experiences no trade flow loss due to the OFA -AFA Meas ure. ( See United  States' response to 
Arbitrator question No. 1, paras. 3 and 7; No. 4, para. 16; and No. 5, para. 19 ). We note, however, that a 
previous Arbitrator has explained, correctly in our view, that it did "not agree with the United States that 
nullification or impairment is to be limited in all instances to the direct trade loss resulting from the violation". 
(Decision by the Arbitrator, US – Offset Act (Byrd Amendment) (Brazil) (Article 22.6 – US), para.  3.70. See 
also Decision s by the Arbitrator s, EC and certain member States – Large Civil Aircraft (Article 22.6 – EU), 
para. 6.110  (quoting  the Byrd Amendment  reasoning with approval); and US – 1916 Act (EC) (Article  22.6 – 
US), paras. 5.58 and 5.61 (determining the level of NI based on amounts of future settlements and judgments 
under the 1916 Act, rather than on the value of direct trade losses). Thus, we also have considerable doubts as 
to whether the United States' argument is based on a proper understanding of the substantive scope o f NI. WT/DS505/ARB  
 
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6.1.2   Proprie ty of using a prospective model approach and governing principles  
6.22.   We note that both parties advocate the selection of a prospective model in this proceeding83, 
i.e. a model that will allow Canada to calculate a level of suspension "equivalent" to the level  of NI 
resulting from the future use  of the OFA -AFA Measure against Canadian firms. We note that multiple 
prior arbitrators have determined methods of varying complexities (including formulae) through 
which the level of suspension would be determined in th e future based on the future application of 
the measure at issue.84 We discern no reason to conclude that such an approach, under the 
circumstances of this dispute, is incompatible with our mandate as described in section 3, above.  
6.23.   Canada claims that the arbitrator in US – Washing Machines  "provided guidance on the 
methodological criteria applicable to the calculation of nullification or impairment in circumstanc es 
where the WTO -inconsistent measure has not yet been applied" .85 Canada recalls that the arbitrator 
in that dispute indicated that: (a) the calculation should result in a predictable level of suspension; 
(b) the method should be practical to implement an d limit the risk of potential controversies between 
the parties ; (c) the data relied on should be, as much as possible, verifiable and available to both 
parties; and (d) given that a future WTO -inconsistent trade remedy measure may be applied against 
any g ood, the method used to determine nullification or impairment should be "sufficiently generic 
to capture any variation" in the types of product and markets.86 
6.24.   The Arbitrator finds such principles to be valid  in determining the level of NI, and the 
United  States offers no objection to such use. Indeed, we note that principles (a), (b), and (d) go to 
the selection of a model that will reliably work in the future under varying circumstances, which, of 
course, is essential if a model is to yield a reasoned esti mate of a level of NI. Principle (c), in our 
view, helps ensure that quality data is used in the calculation of the level of NI. Viewed as such, we 
consider that these principles are effectively embedded in our task of selecting a model that will 
yield a r easoned estimate of the level of NI.  
6.25.   We therefore accept Canada's proposal to select a prospective model with which Canada can 
determine future levels of NI, and further adopt the four principles discussed above to help guide 
our selection of the model.  
6.2  Events triggering the application of the prospective model and duration of suspension  
6.26.   The parties disagree regarding the events that would trigger Canada's right to determine and 
apply a given level of suspension of concessions (which this Decision will refe r to as "triggering 
events "87), and, to a limited degree, regarding the duration of any such suspension.  
6.27.   In its Methodology Paper, Canada indicates that its request under Article 22.2 of the DSU 
"reflects the nullification or impairment that Canada will su ffer if the OFA -AFA measure (i.e., the 
ongoing conduct) continues to exist and is applied by the United  States to imports from Canada in 
future countervailing duty proceedings".88 Canada attaches a footnote to this language stating: 
"[c]ountervailing duty proceedings refer to proceedings in which duties resulting from the 
OFA-AFA measure could be imposed, including final determinations in investigations, administrative 
 
83 We recall that, as discussed in the preceding section, the United  States argued that the level of NI 
must be set at zero and remain at zero if there is no present NI caused by the OFA -AFA Measure. However, the 
United  States never argues that, if th e Arbitrator rejected that argument, a prospective model would constitute 
an improper way of measuring NI in this proceeding  (see e.g. United  States ' written submission, section IV 
(raising specific objections to Canada 's methodology "in the alternative " to its earlier arguments in section III 
regarding the presence of NI), and  para. 65 (acknowledging  that "neither the DSU nor past arbitrator decisions 
preclude the possibility that an arbitrator might base the level of concessions on a formula "). 
84 Decision s by the Arbitrators, US – Washing Machines (Article 22.6 – US); US – Upland Cotton 
(Article  22.6 – US I); US – Offset Act (Byrd Amendment) (EC) (Article  22.6 – US); and US – 1916 Act (EC) 
(Article  22.6 – US). 
85 Canada's methodology paper, para. 6.  
86 Canada's methodology paper, para. 6 (quoting Decision by the Arbitrator , US – Washing Machines 
(Article 22.6 – US), paras. 4.49 -4.52).  
87 See para. 6.36, below (providing a more comprehensive definition of "triggering events") . 
88 Canada's methodology paper , para. 3.  WT/DS505/ARB  
 
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  reviews, new  shipper reviews, expedited reviews, changed circumstances reviews and sunset 
reviews".89 
6.28.   Canada subsequently confirmed that, in its view, triggering events would fall into one of two 
baskets of proceedings: (a) a proceeding resulting in "a countervailing duty order  or a final 
determination  that imposes the AFA resulting from the OFA -AFA Measure "; or (b) sunset reviews 
which could extend the application of AFA ".90 Proceedings falling under basket (a), according to 
Canada, are those that result in the issuan ce of CVD orders, determinations, or final results resulting 
from original CVD investigations91, "administrative reviews"92, "new shipper reviews"93, "expedited 
reviews"94, and "changed circumstance reviews".95 Basket (b), according to Canada, consists of 
"sunset reviews".96 Canada later clarified, however, that, in its view the OFA -AFA Measure can arise 
in any US CVD proceeding, and triggering events should not therefore be limited to the specific 
proceedings c urrently defined under US law.97 Canada also specifically indicates that, concretely, it 
is the issuance of a CVD order (in the case of an original investigation) or the final results of other 
types of CVD proceedings, which qualify as the triggering event .98 
6.29.   Regarding the duration of Canada's suspension of concessions resulting from a given 
application of the OFA -AFA Measure to a Canadian company, Canada has explained that after a 
triggering event, Canada would immediately calculate a level of NI and suspe nd concessions.99 
Canada indicates that the suspension of concessions would only remain in place for the period of 
time during which a CVD rate that was determined with the OFA -AFA Measure remains in place.100 
 
89 Canada's methodology paper, fn 6 to para 3.  
90 Canada's response to Arbitrator question No. 35, p ara. 38. 
91 Canada notes that after the issuance of an original CVD order importers pay estimated CVDs in the 
amount established under that order, but final duties will only be determined and assessed at the time of a 
subsequent administrative review (Canad a's response to Arbitrator question No. 35, para. 41). Canada also 
considers that "an aggregate CVD investigation  or administrative review ", when the USDOC calculates a single 
CVD rate for all companies in the country, could also qualify as triggering events (Canada's response to 
Arbitrator question No. 268; comments on United  States' response to Arbitrator question No. 229 , para. 97 ). 
92 See 19 U.S.C.  § 1675 (Exhibit CAN -53); 19 C.F.R. § 351.213 (Exhibit CAN -54); and 19 CFR 351.213 
(Exhibit CAN-100). Canada notes that administrative reviews occur upon the request of an interested party, 
which may occur each year following the issuance of the r elevant CVD order (Canada's response to Arbitrator 
question No. 35, paras.  42-44). See also Canada's response to Arbitrator question No. 189, fn 34 to para. 49 . 
Canada also notes that administrative reviews will examine the preceding "period of review", wh ich is normally 
the most recently completed calendar year (Canada's response to Arbitrator question No. 35, para. 42 and fn 
59 thereto). The final results of the administrative review will definitively establish the retroactive duty rate 
applied to imports  from the period of review and simultaneously establish the same estimated rate going 
forward (Canada's response to Arbitrator question No. 35, para. 44).  
93 See Exhibit CAN -53, subsection (a)(2)(B); 19 C.F.R. § 351.214 (Exhibit CAN -55). 
94 Canada claims that the USDOC conducts "expedited reviews" under Exhibit  CAN-55, although the 
validity of using this regulation for this purpose is currently the subject of litigation and thus may change in the 
future (Canada's response to Arbitrator quest ion No. 35, fn 70 to para.  48). 
95 See Exhibit CAN -53, subsection (b) . See also Canada's response to Arbitrator question No. 35 
(generally explaining USDOC proceedings that could qualify as triggering events) . Canada provides evidence 
that the USDOC may ask  the OFA -AFA question in all such proceedings and may verify the information received 
(see Canada's response to Arbitrator question No. 35, fn 53 to para. 40 (original investigations), fn 62 to 
para. 43 (administrative reviews), fns 67 and 68 to para. 46 ( new shipper reviews), and fns 71  and 72 to 
para. 48 (expedited reviews) ). Canada asserts more generally that the scope of "changed circumstances" 
reviews allows for the application of the OFA -AFA Measure (Canada's response to Arbitrator question No. 35, 
para. 50).  
96 See Exhibit CAN -53, subsection  (c) ("Five -year review"); 19 C.F.R. § 351.218  (Exhibit CAN -61) 
("Sunset reviews under section 751(c) of the Act").  
97 Canada's response to Arbitrator question No. 285, para. 25. Canada more recently  explained that , 
because the USDOC does not ask the OFA -AFA question in sunset reviews and does not conduct verification as 
part of sunset reviews , sunset reviews would not usually qualify as triggering events . (Canada's response to 
Arbitrator question No. 188, para. 46 ). 
98 Canada's comments on the United  States' response to Arbitrator question No. 185, para. 15 and fn 13  
thereto;  Canada's response to Arbitrator question No.  35, paras. 40 -50. Canada recognizes that, in an 
investigation, the final CVD determination only ta kes effect after the USDOC has issued a positive subsidization 
finding and the USITC publishes a positive determination as to injury to the domestic industry (Canada's 
response to Arbitrator question No. 124, fn 48 to para. 54). Thus, following a CVD inves tigation, it is the 
issuance of a CVD order  that would trigger the application of the model rather than the issuance of the USDOC 
subsidization findings. See also Canada's response to Arbitrator question No. 35, para. 41.  
99 Canada's response to Arbitrator question No. 79, para. 169.  
100 Canada's response to Arbitrator question No. 35, para. 55; comments on the United  States' response 
to Arbitrator question No.  285, para. 19.  WT/DS505/ARB  
 
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Canada clarifies, however, that a delay may exi st between a relevant triggering event and Canada's 
actual suspension of concessions following that triggering event (owing primarily to the time it takes 
for Canada to calculate the level of NI under the procedures the Arbitrator ultimately adopts), and 
therefore "Canada reserves the right to suspend concessions for an amount of time that is equivalent 
to the entire amount of time for which the United  States applies the AFA resulting from the 
OFA-AFA measure."101 
6.30.   The United  States  generally asserts that "Canada would be able to impose countermeasures 
if the challenged measure were applied in assigning a CVD rate in the final determination of either 
a CVD investigation or administrative review of Canadian products and a duty were, i n fact, 
assessed".102 By way of background, the United  States explains that, under the US retrospective 
system, a USDOC investigation results only in the collection of estimated duties going forward, 
referred to as "cash deposits", but it is only appropriat e to trigger Canada's calculating a level of NI 
and the suspension of concessions once duties are actually assessed.103 The United  States clarifies 
that this assessment would occur as a result of an administrative review104 if one is requested, or, 
if such a  review is not requested, then duties would be assessed based on the CVD rates most 
recently established at the time the administrative review would have occurred had it been 
requested.105 
6.31.   Specifically with respect to the USDOC proceedings that may give ris e to triggering events, 
the United  States disagrees with Canada that "new shipper reviews, expedited reviews, changed 
circumstances reviews, and sunset reviews are within the scope of this arbitration".106 In the 
United  States' view, this is so because the OFA-AFA Measure is an unwritten measure, the existence 
of which was demonstrated in the panel proceeding with instances of the measure's use in only 
investigations and administrative reviews, and thus that evidence inherently restricts the 
OFA-AFA Measure' s existence and/or WTO -inconsistency to the context of investigations and 
administrative reviews. In support of this line of reasoning, the United  States recalls the 
Appellate  Body's guidance in Argentina – Import Measures  to the effect that "'the constitu ent 
elements [of a challenged measure] that must be substantiated with evidence and arguments in 
order to prove the existence of a measure challenged will be informed by how such measure is 
described or characterized by the complainant.'"107 The United  States further asserts that only 
administrative reviews can give rise to a triggering event because Canada should not be able to start 
suspending concessions until duties are definitively assessed on the basis of a WTO -inconsistent 
duty rate.108 Finally, the Un ited States argues that verification – the occurrence of which is necessary 
 
101 Canada's response to Arbitrator question No. 35, para. 53. See also response to Arbitrator question 
No. 123.  
102 United  States' response to Arbitrator question No. 35, para. 100. (emphasis omitted) The 
United  States further notes that it would consider susp ension of concessions to be appropriate only after a CVD 
order is in place, rather than following a final determination by the USDOC, since an order would only be issued 
following an affirmative determination of injury to the domestic industry by the USITC  (United  States'  response 
to Arbitrator question No. 173, para. 89 ). 
103 United  States' response to Arbitrator question No. 35, para. 101  (also clarifying that a n 
"investigation", in this context, according to the United  States, is "a proceeding initiated by  Commerce to 
determine the existence and degree of any alleged countervailable subsidy, as contemplated by Article 11 of 
the SCM Agreement." ) 
104 An "administrative review", in this context, according to the United  States, refers to "annual 
assessment review s under the U.S. retrospective duty assessment system, as defined by 19 U.S.C. § 1675(a)." 
(United  States' response to Arbitrator question No. 35, para. 102).  
105 United  States' response to Arbitrator question No. 35, fn 162 to para. 113; No. 87 , paras. 247 -253; 
and No. 107 , para. 272 . See also 19 CFR § 351.212 (Exhibit USA -18). 
106 United  States' response to Arbitrator question No. 35, para. 103  (referring to Canada's methodology 
paper, para. 3 and fn 6 thereto) . The United  States further asserts that if origi nal investigations and 
administrative reviews cease to exist under US law, then, logically, the OFA -AFA Measure would cease to exist 
as well (United  States' response to Arbitrator question No. 285, para.  16). The United  States also considers 
that aggregate  investigations are also not within the scope of this proceeding because no aggregate 
investigations were used to demonstrate the existence of the OFA -AFA Measure before the Panel 
(United  States'  response to Arbitrator question No. 229, paras. 145 -146). 
107 United  States' response to Arbitrator question No. 35, para. 103 (quoting Appellate Body Report s, 
Argentina – Import Measures , para. 5.108). See also generally United  States' response to Arbitrator question 
No. 35(b).  
108 United  States' response to Arbitrator question No. 130 , paras. 17 -20. See also response to Arbitrator 
question No.  35, para s. 107 ("[t]he imposition of countermeasures may only occur for the duration of the 
assessment of an affected CVD duty") (emphasis omitted)  and 102; and No. 87 , paras. 247 -253. WT/DS505/ARB  
 
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  for the OFA -AFA Measure to arise – is not required in changed circumstances reviews, new shipper 
reviews, and expedited reviews.109 
6.32.   Regarding the duration of Canada's suspension of concessions resulting from a given 
application of the OFA -AFA Measure to a Canadian company, the United  States considers that 
Canada should be able to suspend concessions for the duration of the application of a 
WTO-inconsistent CVD rate, und er the caveat that Canada could only start to suspend concessions 
following the actual assessment of the duties collected pursuant to the WTO -inconsistent CVD 
rate.110 
6.33.   In response, Canada argues that neither the Panel nor the Appellate  Body found that the 
OFA-AFA Measure could arise only in investigations and administrative reviews. While Canada does 
not dispute that the evidence on which Canada relied before the Panel to prove the existence of the 
OFA-AFA Measure was limited to examples taken from investiga tions and administrative reviews, 
Canada argues that there is no reason to conclude that the precise content of the OFA -AFA Measure 
includes such a limitation.111 
6.34.   Canada further responds that the United  States' suggestion that only assessment of duties 
following an administrative review can serve to trigger Canada's right to suspend concessions "would 
produce results that bear no relationship to the actual level of nullification or impairment", and would 
"delay and even insulate the United  States from suspen sion of concessions".112 Canada underlines 
in this context that, following an investigation in which WTO -inconsistent CVDs are assigned to 
Canadian goods, the relevant Canadian goods are affected by the CVDs at that time as a practical 
matter because Canadi an companies make relevant pricing and sales decisions based on those 
assigned CVD rates, rather than waiting months or even years for the results of a subsequent 
administrative review. Canada also considers that the delay in Canada suspending concessions 
following an investigation in which WTO -inconsistent CVDs were imposed that would result from the 
United  States' proposal would be inconsistent with the principle that compliance should be prompt, 
and that the US position in this context is contrary to pos itions it has expressed in other 
arbitrations.113 
6.35.   The Arbitrator notes that the parties' arguments in this context relate to two separate but 
related issues, i.e. the US CVD proceedings that can qualify as triggering events and the duration of 
suspension with respect to any particular instance of the USDO C using the OFA -AFA Measure. We 
address each in turn below.  
6.2.1   Triggering events  
6.36.   At the outset, we will first clarify what a "triggering event " is for purposes of this Decision. A 
triggering event, as we will use that term moving forward, is any event that ei ther gives Canada the 
right to determine a level of NI  and suspend concessions, or which requires a modification to a 
previously calculated level of NI. The parties agree that these events take three general forms, 
i.e. (a) whenever at least one  unaffected  company becomes an affected company ; (b) at least one  
affected company is assigned a new CVD rate that is also affected by the OFA -AFA Measure ; or (c) at 
least one  affected company becomes an unaffected company.114 Such events must occur within the 
 
109 United  States'  comments on Canada's response to Arbitrator question No. 188, paras. 24 -28. 
110 United  States' response to Arbitrator question No. 130 , paras. 17 -20. See also response to Arbitrator 
question No.  35, para. 107 ("[t]he imposit ion of countermeasures may only occur for the duration of the 
assessment of an affected CVD duty"). (emphasis omitted)  
111 Canada's response to Arbitrator question No. 188, paras. 40 -46. 
112 Canada's response to Arbitrator question No. 124, para. 53.  
113 Canada' s response to Arbitrator question No. 124 , paras. 53 -59. 
114 See e.g. Canada's response to Arbitrator question No.  245, para. 222 ; United  States'  response to 
Arbitrator question No. 245, para. 169 ; Canada's comments on the United  States' response to Arbitrat or 
question No. 245, para. 121 ; United  States'  comments on Canada's response to Arbitrator question No.  245, 
para. 157 . We note that both parties have confirmed that Canada would be able to discern when a company 
subject to an affected all -others rate becomes an unaffected company, even though no exhaustive list of 
companies subject to the all -others rate exists in the re cord of any USDOC proceeding (Canada's response to 
Arbitrator question No. 282, paras. 10 -13; United  States'  response to Arbitrator question No.  282, 
paras.  11-12; Canada's  comments on the United  States' response to Arbitrator question No. 282, 
paras.  10-11; and United  States'  comments on Canada's response to Arbitrator question No. 282, para. 10 ). WT/DS505/ARB  
 
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context of a USDOC CVD proceeding in order to qualify as a triggering event.115 This Decision will 
refer to such events collectively as "triggering events ". All triggering events, in our view, will require 
Canada to determine what the proper level of NI is resulting from the triggering event.  
6.37.   Regarding triggering events, the parties contest two issues: (a) which US CVD proceedings 
could qualify as giving rise to a triggering  event (in the specific sense that it would give Canada the 
right to determine a level of NI  and suspend concessions if the OFA -AFA Measure were used in that 
proceeding) as a legal matter; and (b) which US CVD proceedings could qualify as giving rise to a 
triggering event (in the specific sense that it would give Canada the right to determine a le vel of NI  
and suspend concessions if the OFA -AFA Measure were used in that proceeding) as a factual matter. 
This section addresses such legal and factual considera tions in turn.  
6.2.1.1   Legal considerations  
6.38.   With respect to the USDOC proceedings that may give rise to a triggering event as a legal 
matter, we recall that Canada indicates that the OFA -AFA Measure could be used in a number of 
different USDOC CVD proceedings, and  the measure's WTO -inconsistency is not legally tied to any 
particular such proceeding. Thus, in Canada 's view, a triggering event occurs whenever the USDOC 
applies the OFA -AFA Measure and a CVD rate affected by that application is imposed on Canadian 
imports.116 The United  States argues that, as a legal matter, the OFA -AFA Measure's existence, and 
thus WTO -inconsistency, may only arise in investigations and administrative reviews because the 
evidence  that Canada used to establish the existence of the OFA -AFA Measure before the Panel was 
limited to examples taken from these two specific types of proceedings.117 
6.39.   We are not convinced by the United  States' submission on this point . In our view, the 
United  States'  position conflates the scope of evidence  the Panel relied upon to establish the 
existence of the unwritten "ongoing conduct" measure with the findings  of the Panel  on the precise 
content of that measure . It is true that a party, when attempting to establish the exi stence of an 
unwritten measure, must do so with reference to evidence adduced to a panel. However, it is for a 
panel to evaluate that evidence and determine whether the alleged measure exists, and whether 
and how that measure is WTO -inconsistent.118 Without  reference to the scope of the Panel's findings , 
therefore, the United  States' argument is necessarily lacking.  
6.40.   Further, we find no support for the United  States ' position in the adopted findings in this 
dispute. Although  the United  States is correct that the relevant evidence Canada used to 
demonstrate the existence of the OFA -AFA Measure consisted of examples of the application of the 
OFA-AFA Measure in investigations and administrative reviews119, we discern no language in either 
the Panel Report or Appel late Body Report indicating that the OFA -AFA Measure or its 
WTO-inconsistency would only arise in those two kinds of specific CVD proceedings. Rather , certain 
findings  made by the Panel  and Appellate Body  appear to contradict the United  States' position. In 
this regard, we  recall that the Panel, as upheld by the Appellate  Body, found that the 
OFA-AFA Measure was found to constitute an unwritten "measure" capable of being challenged in 
WTO dispute settlement (specifically in the form of "o ngoing conduct") because it was attributable 
to the United  States120, had a precise content, had repeated application, and was likely to continue 
 
115 The parties agree on this point (Canada's response to Arbitrator question No. 289 , para s. 38-39; 
United  States'  response to Arbitrator question No.  289, para s. 27-29. 
116 See section 6.2, above  (summarizing party arguments).  
117 See section 6.2, above  (summarizing party arguments).  
118 This observation is consistent with the statements by the Appellate Body in Argentina – Import 
Measures  that the United  States submits in support of its argument in this context. That is: "the constituent 
elements [of a challenged measure] that must be substantiated with evidence and arguments in order to prove 
the existence of a measure challenged will be informed by  how such measure is described or characterized by 
the complainant.") (Appellate Body Report s, Argentina – Import Measures , para. 5.108). (emphasis added) The 
Appellate Body never indicated, however, that a measure 's existence is necessarily limite d to the specific 
factual circumstances reflected in the evidence adduced to support that existence. Indeed, if this were the 
case, it would appear to subject the determination of the existence of a measure to an arbitrary selection of 
such factual circums tances. For example, one could argue that the OFA -AFA Measure could only exist when 
used in CVD proceedings involving the exact same products  as were involved in the CVD proceeding examples 
adduced to the Panel.  
119 See Panel Report, Tables 1 -4. 
120 Attributio n was not materially challenged by the United  States in the Panel proceedings and was not 
a major topic of discussion in either the Panel Report or the Appellate Body Report.  WT/DS505/ARB  
 
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  to be applied in the future.121 The Panel, as upheld by the Appellate  Body, then found that the 
OFA-AFA Measure was inconsistent with Article 12.7 of the SCM Agreement.122 The precise content 
of the OFA -AFA Measure has already been described in section 5, above123, and nowhere does that 
precise content indicate that the OFA -AFA Measure, or its WTO -inconsistency, may only arise in the 
context of any specific CVD proceedings.  In short, the precise content of the OFA -AFA Measure is 
silent as to the type of proceeding in which the OFA -AFA Measure may arise.  Rather, the Panel, as 
upheld by the Appellate  Body, concluded more simply and broadly that the OFA -AFA Measure, as 
defined by its precise content, was inconsistent with Article 12.7 of the SCM Agreement.124 Thus, a 
plain reading of the Panel's relevant findings leads to the conclusion that the OFA -AFA Measure is 
inconsistent with Article 12.7 of the SCM Agreement whenever the precise content of the measure 
arises.  
6.41.   The Appellate  Body, in our view,  confirm ed that underst anding in its Report. In particular, we 
note that, before the Appellate  Body, the United  States challenged the strength of certain evidence 
used to establish the precise content of the OFA -AFA Measure because, inter alia , the evidence 
consisted  of "different fact patterns, dissimilar results, and different segments of CVD 
proceedings".125 The Appellate  Body rejected this argument, stating that " the fact that the[] 
examples [provided by Canada] concern different segments of CVD proceedings is not mate rial, 
because the conduct at issue may arise at any segment where the USDOC conducts verification . In 
this regard, we note that these determinations all concern the identification of information at 
verification."126 We consider this to be a sufficiently cle ar confirmation that the OFA -AFA Measure 
and its WTO -inconsistency is not legally limited to any particular CVD proceeding, but arises 
whenever the elements of its "precise content" are present.127 
6.42.   We therefore consider that, in keeping with the adopted fin dings in this dispute, a triggering 
event occurs when the United  States applies the OFA -AFA Measure (as defined by its precise content) 
in any CVD proceeding.  
6.2.1.2   Factual considerations  
6.43.   The parties' second disagreement regarding triggering events concerns whet her original 
investigations, specifically, should qualify as triggering events for factual reasons. The United  States 
argues that original CVD investigations should not qualify as triggering events because CVDs 
imposed as a result of an investigation only give rise to the collection of estimated duties in the form 
of cash deposits which are not definitively assessed under the United  States' retrospective system 
until the time of a potential and subsequent administrative review.128 
6.44.   We first observe that, as explained by both parties, under the United  States ' retrospective 
CVD duty system, it is true that CVDs first imposed under a CVD order arising out of an original 
investigation are estimated duties that are then collected going forward in the form of cash 
 
121 Panel Report, paras. 7.304 and 7.332; Appellate Body Report, para. 6.5(a).  
122 Panel Report, para. 8.4(b); Appellate Body Report, para. 6.9(b).  
123 The Appellate  Body upheld the Panel's characterization of the precise content of the 
OFA-AFA Measure "as the US DOC asking the OFA  question and, where the USDOC discovers information during 
verification that it deems should have been provided in response to the OFA  question, applying AFA to 
determine that such information amounts to countervailable subsidies". Appel late Body Report, para. 5.24.  
124 See Panel Report, paras. 7.333 -7.334.  
125 Appellate Body Report, para. 5.22  (referring to United  States' appellant's submission, paras. 21 -22). 
See also United  States' response to Arbitrator question No. 35, para.  102 (indicat ing that administrative 
reviews are a particular "'segment'" of a CVD proceeding).  
126 Appellate Body Report, para. 5.23  (referring to Canada's appellee's submission, para. 48) . 
(emphasis  added)  We further note that the Appellate Body explained:  
[B]efore the  Panel, Canada submitted that the alleged OFA -AFA measure consists in the USDOC 
asking the OFA  question and, where the USDOC discovers information during verification that it 
deems should have been provided in response to that question, applying AFA to det ermine that 
the discovered information amounts to countervailable subsidies. As before the Panel, Canada 
contends on appeal that this alleged measure has been repeatedly applied since 2012 whenever 
the relevant circumstances arose . 
(Appellate Body Report, para. 5.30 ( emphasis added ; fn omitted )). 
127 In this context, we underline that we have no discretion to deviate from the adopted findings in this 
dispute.  
128 See section 6.2, above  (summarizing party arguments) . WT/DS505/ARB  
 
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deposits.129 The ultimate amount of duties definitively assessed for that time period, however, is 
decided upon the performance of a subsequent administrative review or at the time that such an 
administrative review could have occurred but did not. As Canad a observes, however, it appears 
wholly reasonable to assume that the imposition of CVDs on a particular good that initiates the 
collection of estimated duties (as a result of, inter alia , original  investigations) for subsequent 
assessment would cause changes in pricing decisions by relevant economic actors regarding that 
good, such that its competitiveness in the US market would be affected in a manner that, in 
particular, the parties' proposed mode ls would capture as a measurable level of NI. The 
United  States offers no rationale for why a CVD order imposing CVDs following an investigation 
would not have this effect, and we discern none. We therefore reject the United  States ' argument in 
this contex t.130 
6.2.2   Duration and timing of suspension  
6.45.   Regarding the duration of suspension, the parties agree that Canada, with respect to a given 
level of NI, should be able to suspend concessions for only the length of time during which a given 
CVD rate (or CVD rates) affected by the OFA -AFA Measure that yielded that level of NI is (or are) in 
place.131 We discern no reason to think that this approach is incompatible with the "equivalence " 
standard in Article 22.4 of the DSU, and therefore adopt this proposal.  
6.46.   We further  note that there will be a delay between the imposition of WTO -inconsistent CVD 
rates and the suspension of concessions. This is mainly so because it will take Canada time to 
calculate a level of NI with the chosen model. Additionally, we take special note  that Canada has 
expressly indicated that it should be allowed to suspend concessions as soon as Canada can calculate 
a given level of NI following a triggering event, and that Canada would do so.132 In light of such 
circumstances, we thus clarify that the duration of suspension in relation to a given application of 
the OFA -AFA Measure will begin to run from the time when Canada first suspends concessions, not 
from the time of the imposition of WTO -inconsistent CVDs.133 
 
129 See section 6.2, above (summarizing party a rguments) . 
130 We also note Canada's explanation that changes to the USDOC 's list of compan ies' cross-owned 
affiliates during a changed circumstances review could qualify as an independent triggering event, because 
such a change could affect a specific compa ny's status as affected or unaffected. (Canada's response to 
Arbitrator question No.  284, para. 23 (see paras. 8.73 to 8.76, below , discussing  "cross-owned affiliates "). 
See also United  States'  comme nts on Canada's response to Arbitrator question No.  284, para. 14 (indicating 
that a change in composition of cross -owned affiliates would typically not qualify as an independent triggering 
event, although such an event could occur). However, Canada subseq uently stated  its view that such an effect 
would likely, in fact, have a negligible effect on the level of NI and therefore it would be reasonable to exclude 
such an event as a triggering event (Canada's comments on the United  States' response to Arbitrato r question 
No. 284, para. 17 ). Canada offers no material support for its claim that such a change would have a negligible 
effect on the level of NI. We therefore repeat that we consider that any USDOC proceeding, including changed 
circumstance reviews, tha t results in a change in the composition of companies that are affected or unaffected , 
can be  a triggering event.  
131 "Both parties agree that Canada may only suspend concessions for the duration of the challenged 
measure" ( United  States'  response to Arbitrator question No.  289, para. 27 (referring to Canada's response to 
Arbitrator question No. 245 )). See also United  States' response to Arbitrator question No.  35(c), para . 107 
(explaining that the duration of suspension should last "for the duration o f the assessment of an affected CVD 
duty") (emphasis omitted) , and No.  130, paras. 17 -20; Canada's response to Arbitrator question No . 35, 
para. 55. 
132 See e.g. Canada's response to Arbitrator question No.  123, para. 52 ( "For example, if Commerce 
initiated a countervailing duty investigation in 2023 that ended with a final determination imposing duties by 
applying the OFA -AFA measure in January of 2024, Canada would start suspending concessions as soon as it 
has finished calculating NI and then suspend conce ssions a few months later in 2024. "); Canada's response to 
Arbitrator question No. 79, para. 169 ( "[I]f the United  States were to apply an OFA -AFA measure in the future, 
Canada should be in a position to immediately calculate nullification or impairment an d suspend concession or 
other obligations. "). 
133 Canada has also indicated that Canada could effectively administer suspension of concessions under 
this temporal framework (Canada's response to Arbitrator question No.  123, paras. 47 -52). Although the 
United  States has indicated that it may be beneficial to specify a time by when Canada must start to suspend 
concessions following a triggering event, we ultimately decline to set such a deadline (United  States'  response 
to Arbitrator question No. 123, paras. 14 -16; No. 185, paras. 11 -13; and No. 254, paras. 172 -174. See also 
Canada's response to Arbitrator question No.  185, paras. 30 -33; comments on the United  States' response to 
Arbitrator question No. 185, paras. 12 -15; and No.  254, paras.  125-129) ( all arguments  against such a 
deadline)) . WT/DS505/ARB  
 
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  6.47.   An example of this process may be usefu l to consider further:  Assume that a CVD rate affected 
by the OFA -AFA Measure was imposed on only one Canadian company on 1 January of Year X, and 
that CVD rate is replaced by a WTO -consistent CVD rate on 1 January of Year X+1. Further assume 
that Canada b egins to suspend concessions on 1 February of Year X. In this scenario, Canada may 
continue to suspend concessions until 1 February of Year X+1. We therefore note that the 
United  States has cited Article 22.8 of the DSU for the proposition that "when an af fected company 
becomes an unaffected company, Canada must either terminate or modify the level of nullification 
or impairment previously calculated".134 In citing this provision, insofar as the United  States implies 
that Canada, in the example earlier in this paragraph , would have to terminate suspension of 
concessions on 1 January of Year X+1, we disagree. Article 22.8 of the DSU, in contrast, addresses 
termination of suspension of concessions due to, inter alia , substantive compliance with the 
recommendati ons and rulings of the DSB.135 Such substantive compliance, in this dispute, would be 
made with reference to the OFA -AFA Measure, the existence of which is broader than any particular 
instance of its use.136 We thus consider Article 22.8 of the DSU inapposit e in this specific context.  
6.48.   Under the circumstances of this proceeding, therefore, we consider that, with respect to a 
given level of NI calculated via the methodology articulated in this Decision, Canada may suspend 
concessions for the length of time during which a given CVD rate (or CVD rates) affected by the 
OFA-AFA Measure that yielded that level of NI is (or are) in place. That durational clock will start to 
run in a given instance when Canada first suspends concessions with respect to that level o f NI. 
6.2.3   Conclusion  
6.49.   Based on the for egoing , the Arbitrator finds that a triggering event ( i.e. an event that would 
give Canada the right to determine the level of NI  and suspend concessions if the OFA -AFA Measure 
were used in that proceeding) occurs when the United  States applies the OFA -AFA Measure (as 
defined by its precise content) in any US CVD proceeding and then imposes a CVD rate to Canadian 
goods that is affected by that application. Canada will then calculate a relevant level of NI and 
suspend concess ions. Canada will thereafter modify (or remove entirely) the level of suspension 
upon the occurrence of subsequent triggering events.  Canada may, with respect to a given level of 
NI, continue to suspend concessions for a maximum period of time equal to the  period of time during 
which the relevant affected CVD rate (or rates) that yielded the relevant level of NI was (or were) 
in place.  
6.3  The appropriate counterfactual  
6.3.1   Legal standard  
6.50.   Counterfactuals are tools commonly used by arbitrators acting under Article 2 2.6 of the DSU 
to determine the level of NI caused by the WTO -inconsistent measures.137 A counterfactual relates 
to "'a hypothetical scenario that describes what would have happened in terms of trade flows had 
the responding party implemented the DSB recomm endations and rulings'".138 This hypothetical 
scenario is then "compared with the actual situation … where the Member has yet to come into 
compliance – in order to quantify the trade effect caused by that Member's failure to comply".139 It 
may be necessary t o make assumptions to answer the hypothetical question of what would happen 
if the original respondent, in this case the United  States, achieved compliance with the DSB 
recommendations and rulings.140 However,  rather than prejudging how exactly the United  States 
would have implemented the DSB recommendations and rulings at issue, or speculating on which 
 
134 United  States' response to Arbitrator question No. 289, para. 27.  
135 See Decision by the Arbitrator, EC and certain member States – Large Civil Aircraft (Article 22.6 – 
EU), para. 6.54 (explaining that cessation of su spension of concessions under Article 22.8 of the DSU pertains 
to "substantive compliance" with a Member's WTO obligations).  
136 See fn 53 to para. 6.4, above.  
137 Decision by the Arbitrator, US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 5.2.  
138 Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 3.7 (quoting Decision 
by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US), para. 4.4). See also Decision by the Arbitrator, 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 5.1 (quoting Decision by the Arbitrator, 
US – Tuna II (Mexico) (Artic le 22.6 – US), para. 4.4).  
139 Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 3.7. (fns omitted)  
140 See e.g. Decision by the Arbitrator, US – Anti-Dumping Methodologies (China) (Article 22.6 – US), 
para. 5.2.  WT/DS505/ARB  
 
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would be the "'most likely'" compliance scenario141, an Article 22.6 arbitrator should instead evaluate 
whether the original complainant, in this case Canada,  has offered a plausible or reasonable 
counterfactual scenario.142 According to the arbitrator in US – Gambling (Article  22.6 – US), the 
considerations of plausibility and reasonableness are connected to the nature and scope of benefits 
that are nullified or impaired by the measure at issue.143 We consider such previous guidance 
instructive.  
6.51.   The parties' arguments with respect to the appropriate counterfactual raise three key issues: 
(a) the appropriate general  counterfactual; (b) the calculation o f counterfactual company -specific 
CVD rates with respect to companies to which the OFA -AFA Measure is applied; and (c) the 
calculation of counterfactual "all -others" rates (and so -called "non -selected rates"144) in CVD 
investigations and administrative reviews in which the OFA -AFA Measure is applied to at least one 
company. We address each in turn.  
6.3.2   General  counterfactual  
6.52.   Canada argues that the "level of nullification or impairment should be determined in light of 
the fact that the U.S. ong oing conduct continues to exist and that WTO -inconsistent duties resulting 
from the OFA -AFA measure may be applied in the future to Canadian imports of any good that is 
subject to U.S. countervailing duty proceedings".145 Canada proposes to measure the leve l of NI to 
Canada by comparing the real -world situation "with a counterfactual scenario in which the 
OFA-AFA measure is eliminated as a practice against Canadian exporters".146 More specifically, 
Canada explains that this would entail a scenario in which th e USDOC ceases to apply AFA to 
determine that OFA discovered during verification amounts to a countervailable subsidy.147 
6.53.   The United  States agrees with Canada that the appropriate general  counterfactual is one in 
which the OFA -AFA Measure is eliminated in C VD investigations vis-à-vis Canadian firms. More 
specifically, the United  States explains that this would entail a scenario in which the USDOC ceases 
to apply AFA to determine that OFA discovered during verification amounts to a countervailable 
subsidy.148 
6.54.   The Arbitrator notes that the parties agree on the relevant general  counterfactual. That is, a 
scenario in which the USDOC, while conducting a CVD proceeding involving Canadian firms, may still 
ask the OFA question and discover OFA upon verification, but c eases to apply AFA to determine that 
the discovered OFA is a countervailable subsidy. This appears a reasonable and plausible overall 
 
141 Decision by the Ar bitrator, US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 5.2 
(quoting Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  3.26).  
142 See e.g. Decisions by the Arbitrators, US – Anti-Dumping Methodologies (China) (Article 22.6 – US) 
para. 5.2; US – Tuna II (Mexico) (Article  22.6 – US), para.  4.5; US – Washing Machines (Article  22.6 – US), 
para. 3.10); and US – Gambling (Article 22.6 – US), para. 3.27.  
143 Decision by the Arbitrator, US – Gambling (Article 22.6 – US), para. 3.30. "[T]o the extent that the 
estimation of the level of nullification or impairment requires certain assumptions to be made as to what 
benefits would have accrued, in a situation where compliance would have taken place, such assumptions 
should be reasonable, taking into account the circumstances of the dispute, in order for the proposed level of 
suspension to accurately reflect the benefits accruing to the complaining party that have actually been nullified 
or impaired." ( Decision by the Arbitrator , US – Gambling (Article 22.6 – US), para. 3.30 ). 
144 The non -selected rate arises due to the fact that the USDOC will not necessarily individually 
investigate all companies participating in an administrative review. The participating companies that are not 
individually investigated are assigned a "non -selected rate" which is calculated in the same manner as the 
all-others rate. The non -selected rates do not replace the all -others rate, which remains active and unchanged 
throughout USDOC CVD proceedings with respect to a given CVD order (United States'  respon se to Arbitrator 
question No. 207, paras. 67-97, and No. 253, para. 171; Canada's  response to Arbitrator question No. 189, 
fn 35 to para. 49). The parties have explained that  the USDOC identifies the companies subject to a 
non-selected rate. (Canada's resp onse to Arbitrator question No. 271, para. 289 ; United States' response to 
Arbitrator question No. 282, para. 11 ).  
145 Canada's methodology paper, para. 9.  
146 Canada's methodology paper, para. 10. See also Canada's response to Arbitrator question No. 8, 
para. 13. 
147 Canada's response to Arbitrator question No. 8, para. 13. Canada does not consider that the 
counterfactual entails a scenario in which the USDOC ceases to ask the OFA question (Canada's response to 
Arbitrator question No. 8, para. 13).  
148 United  States' response to Arbitrator question No. 8; and written submission, para. 45. The 
United  States does not consider that the counterfactual entails a scenario in which the USDOC ceases to ask 
the OFA question (United  States' response to Arbitrator question N o. 8, para. 40).  WT/DS505/ARB  
 
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  compliance scenario. Indeed, the OFA -AFA Measure involves "the USDOC asking the OFA  question 
and, where the USDOC discover s information during verification that it deems should have been 
provided in response to the OFA  question, applying AFA to determine that such information amounts 
to countervailable subsidies".149 However, it is in fact the application of AFA to determine t hat the 
OFA is a countervailable subsidy, specifically, that is the source of the WTO -inconsistency of the 
OFA-AFA Measure.150 
6.55.   We therefore adopt as a  general  counterfactual a scenario in which the USDOC, in CVD 
proceedings, stops using AFA to determine that discovered OFA are countervailable subsidies with 
respect to Canadian firms. The application of this general counterfactual has material implications in 
two more specific contexts, i.e. the calculation of counterfactual individual CVD rates and 
counterfactual all -others CVD rates. We address these in turn below.  
6.3.3   Company -specific CVD rates  
6.56.   Canada argues that, if the OFA -AFA Measure were to be used to calculat e a company -specific 
CVD rate, then, in the counterfactual, that company -specific CVD rate should be reduced by the 
amount attributable to the subsidies found to be countervailable by virtue of the application of the 
OFA-AFA Measure. Canada states that the  USDOC routinely has published public rates for each 
countervailable subsidy program for each individual respondent in a CVD investigation, and thus 
assumes that such information will continue to be available on the record of USDOC proceedings in 
the futur e.151 Canada further asserts that part of the precise content of the OFA -AFA Measure is 
that, upon discovering an OFA at verification, the USDOC refuses to accept new information 
regarding such OFA onto the record, instead applying AFA to determine that the  OFA is a 
countervailable subsidy.152 Canada thus argues that information required to determine whether the 
relevant OFA is in fact a countervailable subsidy will not be on the record of the relevant USDOC 
investigation, and even if certain information were  on the record regarding relevant OFA, it would 
be speculative as to whether the USDOC would have concluded, in a WTO -consistent inquiry, that 
the OFA was indeed a countervailable subsidy and, if it were, what CVD rate would result from that 
subsidy.153 In general, Canada argues that, if the relevant information with which to calculate a 
counterfactual duty rate is unavailable, then the Arbitrator may use a proxy for the information, "so 
that an appropriate duty rate can be determined".154 In this context, th erefore, Canada effectively  
argues that this rate should be a proxy of 0% for the OFA -specific CVD rate.  
6.57.   Canada further supports its approach regarding counterfactual company -specific CVD rates 
by arguing that it would be a reasonable and plausible counter factual scenario that the USDOC, upon 
discovering OFA at verification , would not investigate the OFA at all if the USDOC determined that 
it had insufficient time to properly analyse the OFA.155 In this context, Canada notes that the USDOC 
has the discretion to defer consideration of information discovered during the course of a CVD 
 
149 Appellate Body Report, para. 5.24 (referring to Panel  Report, para.  7.316). The "OFA question" 
essentially comprises of a question that the USDOC includes in questionnaires issued in CVD investigations. 
More specifically, the OFA question "'asks whether a  respondent country provided the respondent company 
with 'any other forms of assistance ', 'directly or indirectly ', and to 'describe such assistance in detail, including 
the amounts, date of receipt, purpose and terms '". Appellate Body Report, para. 5.21.  
150 Panel  Report, para.  7.181 (noting that Canada conceded that "'[t]he formulation of a question 
cannot, in and of itself, violate the requirements of the SCM  Agreement'" (quoting Canada's response to Panel 
question No.  75, para.  164)).  
151 Canada's written s ubmission, para. 68. See also Canada's methodology paper, para. 10.  
152 Canada's response to Arbitrator question No. 9, para. 18.  
153 Canada's written submission, paras. 68 -74. 
154 Canada's written submission, para. 63.  
155 Canada's response to Arbitrator question  No. 11, paras. 23-24. WT/DS505/ARB  
 
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proceeding to future administrative reviews.156 Moreover, Canada asserts that there are other 
counterfactual scenari os in which the USDOC would assign a zero CVD rate to discovered OFA, i.e.  if 
the USDOC determined that the OFA was attributable to a product outside the scope of the CVD 
investigation, or if the USDOC determined that the OFA was not a financial contributi on or was not 
specific.157 
6.58.   Canada also argues that, in the counterfactual, if a company's individually assigned CVD rate 
were to fall below a de minimis level in an original investigation, specifically, then the company 
would be excluded from the CVD order (and would further not be used to calculate the all -others 
rate).158 However, Canada asserts that such a counterfactual scenario would have no impact on the 
ability of the USDOC to calculate a WTO -consistent CVD rate vis-à-vis the relevant OFA in a 
subseque nt proceeding, such as an administrative review.159 Canada also appears to argue, 
however, that in this case the company 's entire  CVD rate should be a proxy of zero, not just the 
OFA-specific component of the company 's CVD rate.160 
6.59.   The United  States  asserts that the precise content of the OFA -AFA Measure found to be 
WTO-inconsistent is the USDOC's practice of finding that OFA discovered during verification are 
countervailable subsidies by using AFA. The United  States thus argues that, in the absence of the 
OFA-AFA Measure, there are two relevant counterfactual scenarios "to reasonably address the 
various situations that may ari se".161 The United  States asserts that the first such scenario arises 
"where information  exists on the record of the future CVD proceeding to use for the discovered 
subsidy program", with respect to which "the United  States considers it would be more approp riate 
to use such information to calculate the counterfactual company -specific CVD rate".162 In that 
counterfactual scenario, in the United  States' view, the company's CVD rate could decrease, 
increase, or stay the same.163 The United  States considers that i t is neither a reasonable nor a 
plausible counterfactual scenario that such information, if it existed on the record, would be 
ignored.164 The second such scenario, according to the United  States, occurs in instances where 
information regarding the OFA is n ot on the record of the relevant USDOC proceeding. In these 
instances the United  States agrees with Canada that the counterfactual company -specific CVD rate 
should be reduced by the amount attributable to the application of the OFA -AFA Measure.165 The 
Unite d States further indicates that "the information needed to recalculate the respondent's rate will 
be publicly available in the countervailing duty determination and the respondent's calculation 
memo".166 
 
156 Canada's response to Arbitrator question No. 11, para. 24 (referring to 19 CFR 351.311 
(Exhibit  CAN-43); Commerce, "Certain Uncoated Groundwood Paper From Canada: Final Affirmative 
Countervailing Duty Determination", 83 Fed. Reg. 3 9,414 dated August 9, 2018  (Exhibit CAN -44); Commerce, 
"Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of 
Certain Uncoated Groundwood Paper from Canada" (August 1, 2018)  (Exhibit CAN -45); Commerce, "Alum inum 
Extrusions from the People's Republic of China: Final Affirmative Countervailing Duty Determination", 76 Fed. 
Reg. 18,521 dated April 4, 2011  (Exhibit CAN -46); Commerce, "Issues and Decision Memorandum for the Final 
Determination in the Countervailing  Duty Investigation of Aluminum Extrusions from the People's Republic of 
China (PRC)"  (March 28, 2011)  (Exhibit CAN -47); Commerce, "Lightweight Thermal Paper from the People's 
Republic of China: Final Affirmative Countervailing Duty Determination", 73 Fed.  Reg. 57,323 dated October 2, 
2008 (Exhibit CAN -48); Commerce, "Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investigation of Lightweight Thermal Paper from the People's Republic of China" 
(September 25, 2008)  (Exhibit CAN -49); Commerce, "Final Affirmative Countervailing Duty Determination: 
Dynamic Random Access Memory Semiconductors from the Republic of Korea", 68 Fed. Reg. 37,122 dated 
June 23, 2003  (Exhibit CAN -50); and Commerce, "Issues and Decision Memorandum fo r the Final 
Determination in the Countervailing Duty Investigation of Dynamic Random Access Memory Semiconductors 
from the Republic of Korea" (June 16, 2003)  (Exhibit CAN -51)). 
157 Canada's response to Arbitrator question No. 12, paras. 25 -27. 
158 Canada's res ponse to Arbitrator question No. 10(b), paras. 20-21. In this same response, Canada 
explains that the USDOC would not exclude a company from the scope of a CVD order due to the company's 
CVD rate falling below the relevant de minimis  level as a result of an administrative review.  
159 Canada's response to Arbitrator question No. 10(a), para. 19.  
160 Canada's response to Arbitrator question No. 114, para. 21. 
161 United  States' response to Arbitrator question No. 12, para. 50.  
162 United  States ' written submission, para. 45.  
163 United  States' written submission, para. 45.  
164 United  States' response to Arbitrator question No. 12, para. 52.  
165 United  States' written submission, para. 46.  
166 United  States' written submission, para. 46.  WT/DS505/ARB  
 
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  6.60.   The United  States also asserts that the precise conte nt of the OFA -AFA Measure  includes 
neither the USDOC applying AFA to conclude that the relevant OFA is attributable to the product 
under investigation nor the USDOC refusing to accept information regarding the OFA onto the record 
of the investigation.167 
6.61.   The United  States further argues that, in the counterfactual, if a company's individually 
assigned rate were to fall below a de minimis level in an original  investigation, specifically, then the 
company would be excluded from the CVD order (and would furth er not be used to calculate the 
all-others rate).168 However, the United  States asserts that such a counterfactual could have no 
impact on the ability of the USDOC from calculating a WTO -consistent CVD rate vis-à-vis the relevant 
OFA in a subsequent proceed ing, such as an administrative review.169 
6.62.   At the outset, and by way of background, the Arbitrator recalls that the subject to be 
addressed here is how to calculate counterfactual CVD rates for Canadian companies that receive 
an individual CVD rate affected by the OFA -AFA Measure. We further recall that a company's 
individual CVD rate is the sum of potentially multiple rates assigned to individual subsidies, only one 
of which may be the discovered OFA that was deemed to be a subsidy by the USDOC with the 
assistance of the OFA -AFA Measure. Both parties agree that the subsidy -specific CVD rates 
comprising any individually investigated company's overall CVD rate will be discernible from the 
public USDOC record in a relevant CVD proceeding. We see no reason to que stion this shared 
position. Thus, it appears a reasonable assumption that it will be possible for Canada, with respect 
to a given Canadian company assigned an individual and overall CVD rate affected by the 
OFA-AFA Measure, to identify the OFA -specific CVD  rate component of that overall CVD rate that 
was calculated in a WTO -inconsistent manner.  
6.63.   It will further be recalled that the relevant general  counterfactual is that the USDOC, even if 
it asks the OFA question and discovers OFA upon verification, does no t apply AFA to the OFA to 
determine that the OFA is a countervailable subsidy.170 With respect to a given CVD proceeding in 
which the USDOC did in fact use the OFA -AFA Measure to determine that OFA was a countervailable 
subsidy, therefore, three main counte rfactual scenarios could arise: (a) the USDOC determines, 
without the assistance of AFA, that the relevant OFA is not a countervailable subsidy171; (b) the 
USDOC declines to investigate the OFA172; or (c) the USDOC determines, without the assistance of 
AFA, that the OFA is a countervailable subsidy. In the first two scenarios, the USDOC would apply a 
zero CVD rate to the discovered OFA. In the third, the USDOC would assign an unknown positive 
CVD rate to the discovered OFA.  
6.64.   How likely it is  that any one of the three counterfactual scenarios described immediately above 
would have occurred in a future USDOC CVD proceeding in which the OFA -AFA Measure is in fact 
used is speculative. Even in cases in which there are certain facts on the USDOC's record concerning 
the relevant OFA, it appears speculative as to: (a) whether the USDOC would consider such facts 
sufficient to analyse the OFA and, if it did not, defer analysis of the OFA to a subsequent CVD 
 
167 United  States'  response to Arbitrator question No. 9, paras. 41 -42; and No. 14, paras. 55 -57. 
168 United  States' response to Arbitrator question No. 10(b).  
169 United  States' response to Arbitrator question No. 10(a).  
170 See section 6.3.2, above.  
171 This could arise if the USDOC were to conclude that the OFA is not a financial contribution, does not 
confer a benefit, and/or is not specific. This scenario appears plausible in light of the statements of the Panel 
and Appellate Body to the effect that the OFA question is broad enough to cover forms of assistance that would 
not qualify as subsidies: "[w]hile recognizing that Canada does  not contest the USDOC's right to ask the 
OFA question, the Panel noted that the OFA  question is very broad. To the Panel, while the OFA  question might 
pertain to necessary information regarding additional subsidization of the product under investigation, it may 
also pertain to a much broader range of 'assistance'" (Appellate Body Report, para. 5.58, quoting Panel  Report, 
para. 7.181). (fns omitted)  
172 This could arise if the USDOC were to determine that there was insufficient time to properly 
investigate th e OFA in a WTO -consistent manner in the course of the proceeding at issue. The United  States 
itself noted in the panel proceedings that it may be practically difficult for the USDOC to properly investigate 
OFA at the verification stage, which may occur rel atively late in the investigation. ( Appellate Body Report, 
para. 5.57; Panel Report, paras. 7.177, 7.183, 7.185, and 7.333). See also Exhibit CAN -43 (allowing the 
USDOC to defer consideration of "a practice that appears to provide a countervailable subsidy " discovered 
during the course of a CVD investigation or review  to a subsequent administrative review if the USDOC 
determines there is insufficient time to examine that practice in the instant proceeding); Canada 's response to 
Arbitrator question No. 11, f n 33 to para. 24 (providing examples of the USDOC deferring examination of 
certain information to a subsequent proceeding).  WT/DS505/ARB  
 
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proceeding; (b) what additional facts the USDO C might have gathered regarding the OFA had it not 
applied AFA; and (c) how the USDOC would analyse any facts on the record to determine if and to 
what extent the OFA constituted a countervailable subsidy, instead of applying AFA to reach that 
conclusion.173 Thus, in a future instance in which the OFA -AFA Measure is used, we consider that 
any attempts by Canada to determine what any counterfactual OFA -specific CVD rate would be 
(i.e. zero or positive, and, if positive, of what magnitude), whether now or when  the USDOC applies 
the OFA -AFA Measure in the future, would be  a speculative exercise.  
6.65.   In this circumstance, we consider that Canada's suggestion of using a proxy of zero for 
OFA-specific CVD rates appears reasonable. This is so because it reasonably refle cts the uncertainties 
surrounding what the counterfactual OFA -specific CVD rate(s) would be. A zero value, specifically, 
appears reasonable for two main reasons. First, even the United  States agrees that, when there is 
insufficient information regarding re levant OFA on the record of a USDOC proceeding with which to 
calculate a counterfactual subsidy rate, Canada could use a counterfactual zero value for the 
OFA-specific CVD rate.174 As already explained above, we do not consider that there will ever be 
sufficient information on a USDOC record to perform that exercise in a manner that is not unduly 
speculative. Second, and also as explained above, there are circumstances under which the USDOC 
could calculate a zero OFA -specific rate.  
6.66.   We further recall, however , that there are circumstances under which the USDOC could 
calculate a positive CVD rate for discovered OFA.175 Also, we cannot determine, and we consider it 
would be unreasonable for Canada to try to determine in the future, whether, in the counterfactual,  
the USDOC would apply a zero or positive CVD rate to the relevant discovered OFA, and even if the 
CVD rate were positive, it would be difficult to determine what the CVD rate would have been.176 
Thus, we emphasize that, in these specific circumstances, a proxy of zero is most reasonably viewed 
as a placeholder for an unknown CVD rate.  We thus note that the uncertain nature of this proxy 
would be inconsistent with an assumption that , in the counterfactual, an affected and individually 
investigated company wo uld be excluded from the scope of the CVD order even if, after deducting 
the value of the OFA -specific CVD rate(s) from the company's overall CVD rate, the company's 
overall CVD rate would fall below a relevant de minimis threshold.177 Indeed, such an assumption  
would assign undue  certainty to an inherently uncertain value  in this specific context, and thus reflect 
an unreasonable balancing of considerations.  
6.67.   For the for egoing  reasons, we adopt a proxy of zero for counterfactual OFA -specific CVD rates. 
Consequently, the counterfactual overall CVD rates assigned to affected and individually investigated 
companies would be reduced by the amount of the OFA -specific CVD rate(s).178 We underline, 
 
173 We note that certain statements by the Panel and Appellate Body suggest that part of the 
OFA-AFA Measure is that the USDOC refuses  to accept new information onto the record concerning the relevant 
OFA. ("In the final stage of the OFA -AFA measure, the USDOC refuses to accept additional information from 
the respondents and instead relies on AFA to determine that each discovered assista nce provided a financial 
contribution, conferred a benefit, and was specific, all of which are necessary elements of a countervailable 
subsidy") (Appellate Body Report, para. 5.77, quoting Panel  Report, paras.  7.314 and 7.316 -7.317)). The 
parties contest w hether such statements mean that such refusal is technically part of the precise content of the 
OFA-AFA Measure. It is unnecessary for the Arbitrator to resolve this issue. We consider it sufficient to note 
that the record indicates that such refusal to ac cept new information onto the record regarding the discovered 
OFA may well accompany the exercise of the OFA -AFA Measure. (See  Panel  Report, Table 2 (describing 
instances in USDOC proceedings in Solar Cells from China 2014  and Supercalendered Paper from Ca nada 2015  
in which the USDOC declined to accept new information regarding OFA discovered at verification, and an 
instance in Stainless Pressure Pipe from India 2016  in which the USDOC referenced its "practice of not 
collecting new information at verificati on")).  
174 See para. 6.59, above.  
175 See para. 6.63, above.  
176 Other arbitrators have used a proxy of zero for AD and CVD rates in similar circumstances. 
(Decisions by the Arbitrator,  US – Washing Machines (Article 22.6 – US), paras. 3.41 (and fn 123 thereto), and 
4.14-4.23); US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 5.51).  
177 We note that if a zero OFA -specific CVD rate assigned in an original investigation would reduce a 
Canadian firm's overall CVD rate to a de minimis level, then the company would normally be excluded from the 
CVD order. ( 19 U.S.C. § 1671d  (Exhibit USA -4), ss. (a)(3) ; 19 U.S .C. § 1671b(b)(4); United  States' response 
to Arbitrator question No. 22, paras. 76 -77). 
178 For example, if, in reality, Canadian Company A was assigned a CVD rate of 30%, with a Subsidy X 
being responsible for 20 percentage points of that rate and an OFA -specific CVD rate arising from the 
application of the OFA -AFA Measure being responsible for  ten percentage points of that rate, Company A 's CVD 
rate would be reduced to 20% in the counterfactual. We further note that a company 's counterfactual CVD rate 
could be de minimis . WT/DS505/ARB  
 
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  however, that this  would result in no change to the companies that are within the scope of the CVD 
order in the counterfactual; the companies subject to the CVD order in reality and in the 
counterfactual will be identical.179 
6.3.4   All-others CVD rates  
6.68.   Canada argues that "[t]he counterfactual scenario must also ta ke into account the fact that 
the countervailing duty rate for all other exporters ('all others' rate) is calculated in a manner that 
includes the adverse facts available resulting from the OFA -AFA measure".180 Canada has specified  
its position on what the counterfactual all -others rate should be, informed by t he relevant USDOC 
regulations and USDOC practice regarding calculation of the all -others rate.181 
6.69.   Canada indicates that if the only individually investigated companies used to calculate the 
all-others rate were companies to which the OFA -AFA Measure was applied, and all such companies' 
CVD rates dropped to a de minimis  level in the counterfactual, then the co unterfactual all -others 
rate would be zero.182 
6.70.   If, in the counterfactual, only one company's CVD rate were used to calculate the all -others 
rate, then, according to Canada, the counterfactual all -others rate would be equal to that company's 
CVD rate.183 
6.71.   In instances where two companies' CVD rates are used to calculate the all -others rate, Canada 
asserts that the USDOC's practice is to calculate the all -others rate using either a simple average of 
the two companies' CVD rates or a weighted average using the co mpanies' publicly ranged184 
US sales data, selecting the option that best approximates the weighted average of the companies' 
CVD rates using the companies' actual and confidential US sales data.185 In the situation where the 
 
179 We therefore further note that we consequently reject Canada 's proposit ions that: (a) if an 
individually investigated company 's counterfactual CVD rate fell below the de minimis threshold in an original 
investigation, then all CVDs assigned to the company in the investigation and in future CVD proceedings would 
be WTO -inconsi stent (because the company never should have been subject to the CVD order at all); and, 
relatedly (b) if all the individually investigated companies in an investigation would receive de minimis CVD 
rates in the counterfactual, then all CVDs assigned to al l companies subject to the order would be 
WTO-inconsistent (because there never should have been a CVD order at all). (See Canada 's response to 
Arbitrator question No. 114, para. 20 , and No. 181, paras. 1 -3; comments on the United  States' response to 
Arbitrator question No.  241, paras. 113 -115).  The United  States appears to suggest at one point that 
calculating a level of NI using CVD rates of zero may be permissible in certain specific  instance s, but still 
stresses that companies should still be assigned r ates due to the presence of ADDs  and ordinary duties. 
(United  States' response to Arbitrator question No. 241; United  States' comments on Canada's response to 
Arbitrator question No. 181, paras. 4 -5). As described, however, we consider that reducing the in dividually 
investigated companies ' CVD rates by the OFA -specific CVD rates is reasonable.  
180 Canada's methodology paper, para. 11.  
181 Canada's original position on this issue is that a counterfactual affected all -others rate should be a 
proxy of zero (Canada 's methodology paper, para. 11; Canada 's written submission, para. 60). Canada later 
nuanced its position on this issue, which we describe in more detail in this section.  
182 Canada's response to Arbitrator question No. 10(c), para. 22 (referring to Commerce, "Certain 
Polyethylene Terephthalate Resin From the Sultanate of Oman: Final Negative Countervailing Duty 
Determination", 81 Fed. Reg. 13,321 dated March 14, 2016  (Exhibit CAN -40); Commerce, "Non -Oriented 
Electrical Steel From the Republic of Kore a: Final Negative Countervailing Duty Determination and Final 
Negative Critical Circumstances Determination", 79 Fed. Reg. 61,605 dated October 14, 2014  
(Exhibit  CAN-41); and Commerce, "Certain Fabricated Structural Steel From Canada: Final Negative 
Counte rvailing Duty Determination", 85 Fed. Reg. 5,387 dated January 30, 2020  (Exhibit CAN -42)). 
183 Canada's response to Arbitrator question No. 118(a), para. 31, and No. 181, para. 4.  
184 The parties have explained that "publicly ranged" data, in this context, ref ers to numerical data 
submitted by a company which are confidential, but have been altered by the submitting party to nonetheless 
be accurate to within 10% of the confidential numbers, thus allowing the altered data to appear on the public 
record of the US DOC proceeding. (Canada's response to Arbitrator question No. 267, paras. 281 -282; 
United  States' response to Arbitrator question No. 267, para. 203; 19 C.F.R. § 351.304 ( Exhibit USA -55), 
section (c)(1)). Canada has explained that publicly ranged sales dat a should always be available for individually 
investigated companies from at least one USDOC record source. (Canada's response to Arbitrator question 
No. 181, fn 11 to para. 9. See also Canada's response to Arbitrator question No. 157; United  States' respo nse 
to Arbitrator question No.  157).  
185 Canada's written submission, section III(3)(b). Confidential information on the record of USDOC 
proceedings is protected by an Administrative Protective Order (APO), and thus, in order for the USDOC to 
release that da ta to a third party, such release requires the consent of the submitting party.  
(See United  States' response to Arbitrator question No. 215, para. 122).  WT/DS505/ARB  
 
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USDOC in fact had used two compa nies' CVD rates to calculate the all -others rate and would also 
have used the same two companies' CVD rates to calculate the all -others rate in the counterfactual, 
Canada asserts that the most appropriate counterfactual all -others rate would be obtained fr om 
using the same methodology that the USDOC had used in reality (i.e. a simple average or a weighted 
average using publicly ranged US sales data), using the new counterfactual company -specific CVD 
rates.186 
6.72.   Where the USDOC had in fact used three or more co mpanies' CVD rates to determine the 
all-others rate, but would only use two companies' data to do so in the counterfactual187, Canada 
asserts that Canada could not follow the USDOC's choice of using a simple or weighted average 
using publicly ranged data be cause the USDOC simply would not have made that choice in reality.188 
Thus, in this scenario, Canada argues that it would be reasonable to instruct Canada to first attempt 
to obtain the relevant companies' authorization to release their confidential sales d ata from the 
USDOC so Canada could apply the USDOC's methodology itself (i.e. choosing between a simple 
average or weighted average using publicly ranged data, whichever is closer to the weighted average 
using the confidential US sales data as weights). Ca nada proposes a deadline of 30 days to receive 
the confidential information from the USDOC following Canada's request to the relevant companies 
to authorize the release of such data from the USDOC to Canada.189 Canada more specifically 
indicates that it wou ld agree with giving the companies 15 days to provide the authorization and 
then ten days to the USDOC to actually supply the data to Canada.190 If Canada does not receive 
the confidential information by that time, then Canada argues that it should be able to select as the 
counterfactual all -others rate the lower of a simple average of the relevant companies' CVD rates or 
weighted average of the companies' CVD rates using publicly ranged sales data as weights.  Canada 
argues that the selection of the lower of  the two rates is reasonable because it would not understate 
the level of NI associated with the all -others rate.191 
6.73.   In instances where the USDOC had in fact used three or more companies' CVD rates to 
calculate the all -others rate, and would have also used three or more companies' data to calculate 
the all -others rate in the counterfactual, Canada explains that the USDOC would use the companies' 
actual and normally confidential US sales data to produce a weighted average of the companies' 
CVD rates to produc e the all -others rate in both reality and in the counterfactual. In this instance, 
Canada had asserted  that the counterfactual all -others rate should be zero because Canada will have 
insufficient information on the public record of the USDOC proceeding to calculate an alternative 
all-others rate, and that unaffected individually investigated companies will  be unlikely to agree to 
provide their confidential sales information to Canada.192 Canada also claims that "[p]revious 
arbitrators have found in similar circumstances that a proxy rate of zero reasonably and 
appropriately reflects the nature and scope of b enefits that are nullified or impaired".193 Canada later 
explained, however, that it would not be unreasonable to first instruct Canada to try to obtain the 
confidential sales information from the relevant Canadian companies, and then, if such information 
is not forthcoming, to allow Canada to select the lower of a simple average or a weighted average 
 
186 Canada's response to Arbitrator question No. 15, paras. 28 -29, and No. 181, paras. 5 -6. 
187 This could happen in instances where the CVD rate of a company that the USDOC had used to 
calculate the all -others rate fell below the de minimis  threshold in the counterfactual.  
188 Rather, the USDOC would have calculated a weighted average using the three or more com panies ' 
actual and confidential US sales data, as described in paragraph 6.73, below.  
189 Canada's response to Arbitrator question No. 181, fn 10 to para. 8. Canada also explains that 
Canada would also notify the United  States of Canada 's request to the companies at the same time. (Canada's 
response to Arbitrator question No. 182(a), para. 15) . Canada further asserts that it would be inappropriate to 
place any deadliness on Canada 's initial requests to such companies as it could interfere with the parties 
reaching an agreed solution. (Canada's response to Arbitrator question No. 182(a), para. 1 4). 
190 Canada's comments on the United  States' response to Arbitrator question No. 182(a), para. 9. 
See also Canada's response to Arbitrator question No. 182(a), paras. 13 -18. 
191 Canada's response to Arbitrator question No. 181, para. 9. See also Canada's co mments on the 
United  States' response to Arbitrator question No. 181, paras. 2 -8. Canada cautions that companies unaffected 
by the OFA -AFA Measure will have no incentive to share such information with Canada. (Canada's written 
submission, para. 83). Canada  argues that the arbitrator in US – Washing Machines (Article 22.6 – US) 
indicated that a respondent should not be put in the position of relying on the cooperation of private actors 
disclosing confidential information (Canada's written submission, para. 8 4). 
192 Canada's response to Arbitrator question No. 117; methodology paper, para. 11; and written 
submission, paras. 79 -87. 
193 Canada's written submission , para. 60 (quoting Decisions by the Arbitrators, US – Washing Machines 
(Article 22.6 – US), paras. 4.21 -4.23; US – Anti-Dumping Methodologies (China) (Article 22.6 – US), 
para. 5.51). See also Canada's written submission, paras. 58 -59 and 75 -78. WT/DS505/ARB  
 
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  using the firms' publicly ranged sales data.194 In Canada's view, using a simple average of the firms' 
CVD rates to determine the counterfactual all -others rate  would be unreasonable because, under 
certain circumstances, such a simple average could significantly underestimate the actual weighted 
average of the companies' counterfactual CVD rates.195 
6.74.   Canada suggests that, in any instance where the USDOC calculates an all -others rate using 
actual and non -confidential US sales data from the relevant companies, then Canada could use that 
data to construct a counterfactual all -others rate. Such instances would be rare in Canada's view, 
however, as companies normally req uest confidential treatment of their US sales data in USDOC 
proceedings.196 
6.75.   The United  States, like Canada, uses relevant USDOC regulations and practice to inform its 
selection of a counterfactual  all-others rate.197 In general, the United  States considers that the 
counterfactual  all-others rate should be calculated using the same methodology  that the USDOC in 
fact used to calculate the all -others rate.198 The United  States asserts that if an individually 
investigated Canadian company's CVD rate dropped to a de minimis  level in the counterfactual, then 
that company's CVD rate would not be used to calculate the all -others rate.199 The United  States 
thus observes that the number of companies whose CVD rates are used to calculate the all -others 
rate may be less than the number of companies that were actually examined and assigned individual 
CVD rate s.200 Thus, the United  States agrees with Canada that if the only companies that had been 
in fact used to calculate the all -others rate were companies that, in the counterfactual, had 
de minimis CVD rates, then the counterfactual CVD all -others rate in that limited instance would be 
zero.201 
6.76.   If, in the counterfactual, only one company's CVD rate would be used to calculate the 
all-others rate, then, according to the United  States, the counterfactual all -others rate would be 
equal to that company's CVD rate .202 
6.77.   The United  States also further agrees with Canada that, in instances where two companies' 
CVD rates are used to calculate the all -others rate both in reality and in the counterfactual, the same 
 
194 Canada's response to Arbitrator question No. 181, paras. 10 -11.  
195 Canada's response to Arbitrator question No. 18, paras. 33 -34. 
196 Canada's response to Arbitrator question No. 16.  
197 The United  States explains that the relevant statutory provision in this  context is 
19 U.S.C.  § 1671d(c)(5)(A), which is Section 705(c)(5)(A) of the Tariff Act of 1930. The United  States explains 
that "[c]ommerce looks to the same statutory provision for guidance in determining an All Others rate in a CVD 
administrative review ." (United  States' written submission, para. 49). Canada has not disputed this point and 
has submitted evidence lending support to the United  States' position (see Commerce, "Issues and Decision 
Memorandum for the Final Results of Administrative Review of the Countervailing Duty Order on Certain 
Softwood Lumber Products from Canada; 2017 – 2018" (November 23, 2020) (Exhibit CAN -15), pp. 38 -39). 
The United  States asserts that "each countervailing duty proceeding contains calculation memoranda for the 
individ ually-investigated respondents, as well as a calculation memo for the All Others rate". (United  States' 
written submission, para. 56).  
198 United  States' response to Arbitrator question No. 26, paras. 84 -85; written submission, para. 53.  
The United  States cl arifies that, if the USDOC in fact used three or more companies' confidential sales data to 
calculate the all -others rate, but this number drops to two in the counterfactual, then Canada could still use 
confidential sales data to calculate the all -others r ate without the risk of other, unauthorized entities or persons 
to "reverse engineer" the confidential sales data because the counterfactual all -others rate in this scenario 
would only be known to the United  States and Canada. (United  States' response to A rbitrator question No.  116, 
para. 4). The parties are further in agreement that such reverse -engineering is not an issue in general since, 
inter alia , any confidential information would be protected by the parties' BCI Understanding. (Canada's 
response to Arbitrator question No. 183, paras. 21 -25; United  States' comments on Canada's response to 
Arbitrator question No. 183, paras. 18 -19. 
199 United  States' response to Arbitrator question No. 10(b), paras. 44 -46. 
200 United  States' comments on Canada's response t o Arbitrator question No. 181, para. 3. 
201 United  States' response to Arbitrator question No. 10(c), para. 47; No. 21, paras.  74-75, and 
No. 114, para. 2. See also United  States' written submission, paras. 50 and 56. The United  States further 
asserts that if a company's CVD rate falls below the de minimis threshold in the counterfactual, then Canada 
could use "a counterfactual duty rate of 0". (United  States' response to Arbitrator question No. 114, para. 2). 
The United  States al so explained that a zero de minimis rate does not mean that under US law the companies 
subject to the all -others rate would be excluded from the scope of the CVD order. (United  States' response to 
Arbitrator question No. 181, para. 4).  
202 United  States' com ments on Canada's response to Arbitrator question No. 181, para. 6; response to 
Arbitrator question No. 27, para. 86.  WT/DS505/ARB  
 
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methodology should be used to calculate the all -others rat e in the counterfactual as that used in 
reality (i.e.  either a simple average or a weighted average using publicly ranged US sales data).203 
6.78.   The United  States, however, argues that in instances where the USDOC in fact uses 
confidential US sales data from three or more companies to calculate the all -others rate (regardless 
of whether two companies' data or three or more companies' data would be used in the 
counterfactual), using a counterfactual all -others rate of zero, as Canada originally advocated, is 
neither reasonable nor plausible.204 The United  States proposes that, in such instance, Canada 
should use the confidential sales data of relevant companies to calculate the weighted average of 
the companies' CVD rates. The United  States proposes that Canada ask  the relevant companies to 
release such confidential sales data to Canada to calculate that weighted average. If such 
authorizations are not forthcoming, in the United  States view, Canada should then use publicly 
ranged sales data of such companies on the USDOC record to calculate weighted average using such 
sales values as weights. Only if such data are unavailable for some reason  should Canada be 
authorized to use a simple average of companies' CVD rates.205 The United  States further disagrees 
with Canada' s proposal that, in cases where the companies do not provide authorization to the 
USDOC to release their confidential sales data to Canada, Canada would use the lower of the 
weighted average of the companies' CVD rates using publicly ranged data and the si mple average 
of the companies' CVD rates. In the United  States' view, such an approach would be biased in favour 
of Canada and inconsistent with the Arbitrator's mandate.206 
6.79.   In situations where Canada requests confidential information from Canadian companies to 
calculate the counterfactual all -others rate, the United  States considers it appropriate for the 
Arbitrator to set a deadline for Canada to ask the relevant Canadian companies to authorize the 
USDOC to release their information to Canada for t hat purpose. The United  States further proposes 
that a general timeline of 30 days should be established, starting from the time when the 
United  States receives copies of the notifications that Canada provides to the companies seeking 
authorization to rele ase their confidential data.  More specifically, according to the United  States, 
Canada should provide the companies two weeks (14 days) to authorize the release and use of its 
confidential data. The United  States envisions the companies providing those aut horizations to 
Canada, and then Canada providing them to the United  States. The United  States proposes that, 
upon Canada providing such authorizations to the United  States, the United  States be given either 
the remainder of the 30 -day overall timeline to p rovide the data to Canada, or, at minimum, two 
weeks (14 days) to do so.207 
6.80.   The United  States also asserts that individually investigated firms not subject to the 
OFA-AFA Measure may have incentives to provide such confidential information to Canada to help  
 
203 United  States' response to Arbitrator question Nos. 10(c), 15, 23, and 32; written submission, 
paras.  51-52. 
204 United  States' written su bmission, paras. 48, 56, 58, and 59; response to Arbitrator question No. 24, 
para. 82 (explaining that the USDOC uses this method when there are three or more individually investigated 
firms because it is not possible to reverse -engineer three or more firm s' sales data from the all -others rate). 
The United  States explained that the use of a simple average of the relevant firms' CVD rates to determine a 
counterfactual all-others rate would still be preferable to using an all -others rate of zero. (United  States' 
response to Arbitrator question No. 18, para. 67.  
205 United  States' response to Arbitrator question No. 181, paras. 2 -5; comments on Canada's response 
to Arbitrator question No. 181, paras. 9 -11; written submission, para. 58. See also United  States' res ponse to 
Arbitrator question No. 16, paras. 62 -64. The United  States confirms that if the Canadian companies provide 
written authorization to the USDOC to provide such companies' confidential US sales data to Canada, the 
USDOC could do so. (United  States' response to Arbitrator question No. 117, para. 5). The United  States 
originally proposed that, if Canada cannot secure the authorizations from all individually investigated 
respondents, the counterfactual all -others  rate should not be adjusted. (United  States' written submission, 
para. 58; response to Arbitrator question No. 18, paras. 66 -67). In support of this approach, the United  States 
had asserted that Canada has proposed using confidential information from Canadian companies to calculate 
the value of imports, and "Canada has proposed to remove companies that do not provide authorization from 
the calculation of nullification or impairment". (United  States' written submission; para. 58 (referring to 
Canada's methodology paper, para. 16). See also United  States' response to Arbitrator question No. 20, 
para. 69). Canada has argued that this US argument is "disingenuous". ( Canada's written submission, 
para. 86). 
206 United  States' comments on Canada's response to Arbitrator question No. 181, paras. 10-12. 
207 United  States' response to Arbitrator question No. 182(a), paras. 6 -7; comments on Canada's 
response to Arbitrator question No. 182(a), paras. 13 -16; Canada's response to Arbitrator question No. 182(a), 
paras. 13 -18. The United  States suggests tha t the parties could extend such deadlines as between themselves. 
(United  States' comments on Canada's response to Arbitrator question No. 182, para, 16).  WT/DS505/ARB  
 
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  Canada induce compliance by the United  States "to eliminate the challenged measure from the rates 
of their competitors".208 The United  States explains that this is so because "CVD rates could increase 
with the removal of the challenged measure".209 
6.81.   The Unit ed States agrees with Canada that the likelihood of a firm's actual US sales data on 
the record of a USDOC proceeding being non -confidential is small, but if such data were 
non-confidential Canada could use it to construct a counterfactual all-others rate.210 The 
United  States also argues that Canada's reliance on previous arbitrators' decisions in this context is 
misplaced.211 
6.82.   The Arbitrator notes that the record indicates that the USDOC calculates the all -others rates212 
in original investiga tions and administrative reviews (in which such rates are called the "non -selected 
rate")213 under the terms of 19 U.S.C. § 1671d(c)(5), reproduced below:  
(5) Method for determining the all -others rate and the country -wide subsidy 
rate (A) All -others rate  
(i) General rule  
For purposes of this subsection and section 1671b(d) of this title, the all -others rate 
shall be an amount equal to the weighted average countervailable subsidy rates 
established for exporters and producers individually investigated, exclu ding any zero 
and de minimis countervailable subsidy rates, and any rates determined entirely under 
section 1677e of this title.  
(ii) Exception  
If the countervailable subsidy rates established for all exporters and producers 
individually investigated are z ero or de minimis rates, or are determined entirely under 
section 1677e of this title, the administering authority may use any reasonable method 
to establish an all -others rate for exporters and producers not individually investigated, 
including averaging the weighted average countervailable subsidy rates determined for 
the exporters and producers individually investigated.214 
6.83.   At the outset, and in light of this statute, it appears helpful to note five things. First, in general, 
the USDOC will calculate the all-others rate as the weighted average of the individually investigated 
companies' CVD rates, excluding any CVD rates that are zero, de minimis215, or calculated entirely 
with facts available.216 Second, the parties agree, and the record reflects, that where the USDOC 
 
208 United  States' response to Arbitrator question No. 20, para. 70. See also United  States' response to  
Arbitrator question No. 103, paras. 265 -266. 
209 United  States' response to Arbitrator question No. 20, para. 70 (referring to United  States' written 
submission, paras. 45 and 54).  
210 United  States' response to Arbitrator question No. 16.  
211 United  States' re sponse to Arbitrator question No. 20, paras. 71 -72; and No. 33, paras. 94 -97. 
212 We note that the term "all -others" CVD rate is not a term used in the SCM Agreement. Rather it is a 
colloquial term and one taken from US legislation. With that understanding, this Decision will use the term 
"all-others" rate.  
213 United  States' written submission, para. 49 ( "Commerce looks to the same statutory provision for 
guidance in determining an All Others rate in a CVD administrative review "); United  States' response to 
Arbitrator question No. 253, para. 171. The United  States  has also explained that the all -others rate, once 
created in the original investigation, stays in place for the duration of the CVD order. (United  States' response 
to Arbitrator question No. 207, fn 7 0 to para. 79.  
214 Exhibit USA -4, p. 3. Both parties indicate that the USDOC uses trade value rather trade quantity as 
the weights in calculations under this statute. (Canada's response to Arbitrator question No. 17, paras. 31 -32; 
United  States' response to Arbitrator question No. 17, para. 65).  
215 The de minimis threshold is less than 1% in an original investigation and less than 0.5% in an 
administrative review ( 19 U.S.C. § 1671b  (Exhibit USA -13), ss. (b)(4)(A)  (specifying the 1% rate for 
investigation); Commerce, "Issues and Decision Memorandum for the Final Determination in the Countervailing 
Duty Investigation of Supercalendered Paper from Canada" (October 13, 2015)  (Exhibit CAN -32), (specifying 
the 0.5% rate ); United  States' response to Arbitrator question No. 115, para. 3 (confirming the 0.5% rate for 
administrative reviews and that the USDOC would not exclude a company from a CVD order if it received a 
de minimis CVD rate in an administrative review).  
216 19 U.S.C. § 1677e (Exhibit USA -16) addresses "Determinations on basis of facts available".  WT/DS505/ARB  
 
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uses two individually investigated companies' CVD rates to calculate the all -others rate, then the 
USDOC will calculate an all -others rate using either a simple average of the compan ies' CVD rates 
or a weighted average of their CVD rates using publicly ranged US sales data of the companies as 
weights, whichever is closer to the weighted average had the USDOC used the firms' actual and 
confidential US sales data as weights.217 Third, th e parties agree, and the record reflects, that where 
three or more individually investigated firms are used to calculate the all -others rate, then the 
USDOC will use the firms' actual and usually confidential US sales data to calculate a weighted 
average o f their CVD rates.218 Fourth, the record indicates that the relevant USDOC record will 
indicate how the all -others rate was calculated.219 Finally, the United  States has confirmed, and 
Canada has never questioned, that the non -confidential version of the rel evant USDOC record will 
always contain individually investigated companies' CVD rates.220 
6.84.   With such background established, we note, and the parties agree221, that there are five 
relevant scenarios to address in this context. These are discussed in turn belo w. 
6.85.   Scenario 1 arises when all the individually investigated companies' counterfactual CVD rates 
are de minimis , zero, or calculated entirely with facts available. In this scenario, we consider that a 
proxy of 0% for the counterfactual all -others rate appea rs reasonable in light of the parties' 
agreement on the use of a zero CVD rate, and the relevant statute's terms, which generally exclude 
the use of CVD rates that are zero, de minimis , or calculated entirely with facts available in 
calculating the all -others rate. We further discern no other reasonable basis in the record for 
choosing another value.222 
6.86.   Scenario 2 arises if only one individually investigated company in the counterfactual has a 
CVD rate that is not zero, de minimis , or calculated entirely wit h facts available. In this scenario, we 
consider  that determining the all -others rate based on that company's counterfactual CVD rate 
appears reasonable in light of the fact that this is the result that the relevant statute prescribes in 
such circumstances , and the parties' agreement  on this score.  
6.87.   Scenario 3 arises if: (a) two individually investigated companies in the counterfactual have 
CVD rates that are not zero, de minimis , or calculated entirely with facts available; and (b) the 
USDOC had in fact use d either a simple average of the two companies'  CVD rates or a weighted 
average of the companies'  CVD rates using publicly available US sales data.223 In this scenario, we 
 
217 Canada's written submission, section III(3)(b) (describing this USDOC practice); United  States' 
response to Arbitrator question No. 23, paras. 78 -81 (confirming this  USDOC practice). The United  States 
explains that this practice is followed because "if the weighted average of only two individually -investigated 
respondent CVD rates were used for the All Others rate, it would be possible to reverse engineer the value of  
the actual U.S. sales of the two companies relative to one another, thereby disclosing confidential company 
sales data". (United  States' response to Arbitrator question No. 23, para. 80). In contrast, "when Commerce 
weight averages three or more CVD rates  … it would not be possible to reverse engineer the value of the actual 
U.S. sales of the companies relative to each another. Therefore, when there are three or more 
individually -investigated respondents, the All Others rate will be a weighted average of a ctual U.S. sales data". 
(United  States' response to Arbitrator question No. 24, para. 82).  
218 The all -others rate will not be affected by the OFA -AFA Measure if the individually investigated 
firm(s) to which the OFA -AFA Measure was applied had, in reality, CVD rates that were determined entirely 
with facts available. In that instance, the USDOC would not use those firm's CVD rates to calculate the 
all-others rate per the applicable statute. See United  States' response to Arbitrator question No. 49, fn 201 to  
para. 146 (explaining this scenario).  
219 United  States' written submission, para. 56 (explaining that "each countervailing duty proceeding 
contains calculation memoranda for the individually -investigated respondents, as well as a calculation memo 
for the All Others rate "). 
220 See United  States' response to Arbitrator question No. 30, para. 89.  
221 United  States' response to Arbitrator question No. 181, para. 2; Canada's response to Arbitrator 
question No. 181, para. 12. Both parties also acknowledge that the all -others rate could, under certain 
circumstances, increase in the counterfactual, but that the US model would be able to properly account for that 
scenario. The parties disagree as to whether the Canadian model could properly account for such a situa tion. 
(Canada's response to Arbitrator question No. 182(b), paras. 19 -20; United  States' response to Arbitrator 
question No. 182(b), paras. 8 -10). 
222 We again note that the use of a proxy of zero in this context means that there would be no change to 
the co mposition of companies subject to the CVD order as between reality and the counterfactual. The 
United  States also explained that a zero rate does not mean that under US law the companies subject to the 
all-others rate would be excluded from the scope of th e CVD order. (United  States' response to Arbitrator 
question No. 181, para. 4).  
223 See para . 6.83 and fns thereto , above (describing this practice by the USDOC) . WT/DS505/ARB  
 
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  consider that using the same methodology that was in fact used by the USDOC to determine the 
all-others rate appears reasonable in light of the parties' agreement on this score. Moreover, the 
parties agree that the USDOC would, in the  counterfactual, have used one or the other approach 
according to USDOC practice.  
6.88.   Scenario 4 arises if: (a) two individually investigated companies in the counterfactual have 
CVD rates that are not zero, de minimis , or calculated entirely with facts availa ble; and (b) the 
USDOC had in fact used three or more firms' confidential US sales data to calculate a weighted 
average for use as the all -others rate.224 In this instance, as described further above, USDOC practice 
in this scenario would be to determine th e all-others rate using a weighted average of the firms' 
publicly ranged US sales data or a simple average of their CVD rates, whichever is closest to the 
weighted average of the firms' CVD rates using the companies' confidential US sales data as weights.  
We therefore consider it reasonable to select a method that best duplicates that practice. We further 
note, however, that in order to duplicate that USDOC practice, Canada would first need to obtain 
the companies' normally confidential US sales data so tha t Canada could calculate a weighted 
average using such data, and the USDOC would need to receive the relevant companies' 
authorizations to release such data to Canada.225 
6.89.   Thus, and in light of the parties' positions in this context, the Arbitrator considers  that the 
following procedure for Scenario 4  would be reasonable. First, Canada would first attempt to secure 
the relevant companies' written authorizations allowing the USDOC to release their relevant 
confidential US sales data to Canada. Canada would do so by sending written requests to the 
companies for written statements authorizing the USDOC to release such data to Canada for 
purposes of using it to calculate a counterfactual all -others rate.226 Canada would copy the 
United  States on such communications  to the companies. From the date of Canada sending the 
written request, the companies will have two calendar weeks (14 days) to provide their written 
authorizations to Canada. If Canada receives all such authorizations, Canada will provide the 
companies' a uthorizations to the United  States. The United  States would then, at the time of such 
provision, have one of the two following time periods to provide the companies' relevant confidential 
sales information to Canada, whichever is longer: (a) two calendar weeks (14 days); or (b) the 
remainder of a 30 -calendar -day clock that started to run at the time of Canada's sending the written 
requests to the relevant companies. All such deadlines can be extended by the parties through 
mutual agreement.  
6.90.   If Canada obtains all relevant companies' confidential sales data by the applicable deadline, 
Canada would then: (a) calculate a weighted average of the companies' CVD rates using the 
confidential sales data as weights; (b) calculate a simple average of the relevant firms' CVD rates 
and a weighted  average of their CVD rates using publicly ranged US  sales data; and, finally, 
(c) select whichever rate calculated under item (b) most closely approximates the rate calculated 
under item (a).  
6.91.   If Canada does not receive all authorizations from the relevant  companies by the relevant 
deadline, or if the United  States does not relay the companies' confidential sales data by the relevant 
deadline, the relevant options mentioned by the parties for a counterfactual all -others rate are: (i)  a 
weighted average usin g the two firms' publicly ranged US sales figures; (ii) a simple average of the 
two firms' CVD rates; (iii) the actual all -others rate; or (iv) a rate of 0%.  
6.92.   In our view, and on balance, option (i), described immediately above, is the most reasonable 
option. This is so for two main reasons. First, a weighted average using the companies' publicly 
 
224 This could arise when, for instance, if the USDOC actually used the CVD rates from Companies A, B, 
and C to calculate the all -others rate, but in the counterfactual Company A's CVD rate fell below the de minimis  
threshold after removing the effects of the OFA -AFA Measure.  
225 Confidential information on the record of USDOC proceedings is protected by an Administrative 
Protective Ord er (APO), and thus, in order for the USDOC to release that data to a third party, such release 
requires the consent of the submitting party. See United  States' response to Arbitrator question No. 215, 
para. 122 (referring to United  States' response to Arbi trator question No. 101, para. 261). If, of course, the 
relevant firms ' relevant sales data are not confidential, Canada shall utilize that information without first 
attempting to secure the firms ' authorizations to release such data and without requesting  the United  States to 
supply it to Canada.  
226 Considering that we have already declined to set a deadline by when Canada must begin to start 
suspending concessions, we decline to set a deadline by when Canada would need to send such requests to 
companies fo llowing triggering event . WT/DS505/ARB  
 
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ranged US sales data ensures that the counterfactual all -others rate would necessarily inhabit the 
same general numerical range as would the weighted average of the  firms' CVD rates using 
confidential US sales data, i.e. a value somewhere between the two companies' CVD rates. For this 
reason, this option is stronger than options (iii)227 or (iv).228 Second, the publicly ranged US sales 
data will be, in our view, a reas onable approximation of the companies' actual and confidential US 
sales data.229 For that reason, we consider option (i) somewhat preferable to option (ii), as a simple 
average utilizes no connection to the relevant companies' sales data, a connection that the relevant 
statute envisions. Therefore, if Canada does not receive all authorizations from the relevant 
companies by the relevant deadline, or if the United  States does not relay the companies' confidential 
sales data by the relevant deadline, the all -others rate shall be calculated using a weighted average 
using the relevant firms' publicly ranged US sales figures. If, for any reason, this option is 
unavailable, Canada shall use the simple average of the relevant firms' CVD rates as the 
counterfactual a ll-others rate.230 
6.93.   Scenario 5 arises when: (a) three or more individually investigated companies in the 
counterfactual have CVD rates that are not de minimis , zero, or calculated entirely with facts 
available; and (b) the USDOC had in fact used three or mor e companies' confidential US sales data 
to calculate a weighted average for use as the all -others rate. In this instance, the relevant US 
statute and USDOC practice supports calculating the all -others rate using the weighted average of 
the companies' CVD r ates, using the companies' actual and normally confidential US sales data. We 
therefore consider it reasonable to select a method that best duplicates that practice. We further 
note, however, that, as with Scenario 4 further above, in order to duplicate th at USDOC practice, 
Canada would first need to obtain the companies' normally confidential US sales data so that Canada 
could calculate a weighted average using such data.  
6.94.   Therefore, we consider that, in order to attempt to obtain such confidential sales da ta, Canada 
and the United  States should follow the same procedure as that delineated in paragraphs 6.89 to 
6.92, above, with respect to Scenario 4. For the same reasons as discussed in those same 
paragraphs , above, if Canada does not receive all authorizat ions from the relevant companies by 
the relevant deadline, or if the United  States does not relay the companies' confidential sales data 
by the relevant deadline, the all -others rate shall be calculated using a weighted average using the 
relevant firms' pu blicly ranged US sales figures. If, for any reason, this option is unavailable, Canada 
shall use the simple average of the relevant firms' CVD rates as the counterfactual all -others rate.231 
6.95.   Finally, for clarity, we recall that this Decision uses the term " all-others rate" specifically with 
respect to  the all -others rate created in an investigation. We further recall that the United  States 
has explained that the so -called "non -selected rate" created in an administrative review is essentially 
an "all -others" rate created for purposes of that review, and is calculated in the same way as the 
all-others rate created in an investigation.232 Thus, any counterfactual "non -selected rates" shall be 
 
227 The original all -others rate may fall outside the range between the relevant companies ' CVD rates. 
For instance, suppose there were four individually investigated Firms A, B, C, and D with the respective and 
equally weighted CVD  rates of 10%, 20%, 60%, and 70%. If firms C and D were eliminated in the 
counterfactual, the original all -others rate (45%) would be outside the range of what a counterfactual weighted 
average could possibly be, i.e. between 10% and 20%.  
228 We recall that if a company receives a 0% CVD rate then that rate will not be used to calculate the 
all-others rate. We further note Canada's assertion that "[p]revious arbitrators have found in similar 
circumstances that a proxy rate of zero reasonably and appropriately  reflects the nature and scope of benefits 
that are nullified or impaired" ( Canada's written submission, para. 60 (referring to Decisions by the Arbitrators, 
US – Washing Machines (Article  22.6 – US), paras.  4.21-4.23; US – Anti-Dumping Methodologies (China) 
(Article 22.6 – US), para. 5.51)).  In such cases, zero duty rates were chosen as proxies for counterfactual duty 
rates, but this was so because the arbitrators felt that they lacked information with which to calculate the 
counterfactu al duty rates. In this context, in contrast, there will likely be information on the record that could 
be used to calculate a counterfactual all -others rate. We therefore consider that the persuasive weight of these 
decisions in this specific context is li mited.  
229 See fn 184 to para.  6.71, above. 
230 If, for any reason, a relevant firm's CVD rate is not publicly available, and thus unavailable to 
Canada, then that firm's CVD rate shall be assumed to be zero. The Arbitrator understands that this scenario 
should never arise, however, as firms' CVD r ates are available from the public record of USDOC proceedings.  
231 If, for any reason, a relevant firm's CVD rate is not publicly available, and thus unavailable to 
Canada, then that firm's CVD rate shall be assumed to be zero. The Arbitrator understands th at this scenario 
should never arise, however, as firms' CVD rates are available from the public record of USDOC proceedings.  
232 See fn 213 to para. 6.82 , above.  WT/DS505/ARB  
 
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  calculated in the same manner as the counterfactual "all -others" rate, as described above, 
mutatis  mutandis .233 
6.4  Reference period  
6.96.   We note that the core purpose of the parties' proposed models, discussed in detail in section  7, 
below , is to estimate the trade impact that the imposition of WTO -inconsistent CVD rates has on 
Canadian exports of a relevant product into the United  States. In order to do that, various dat a 
inputs are required. Two such inputs, upon which both parties' models rely, are: (a) an annual 
baseline of the value of imports from relevant Canadian companies; and (b) those same companies' 
CVD rates that were in effect during the same time. Both parti es' proposed models rely on a calendar 
year preceding a relevant triggering event from which to take such information, and both refer to 
this year as the "reference period", a term which we adopt moving forward as well. The parties, 
however, disagree as to  what calendar year the reference period should be, at least in certain 
situations.  
6.97.   Canada  originally asserted that the reference period for determining the value of imports and 
the reference period duty rates would be the full calendar year "prior to the imposition by Commerce 
of duties resulting from the application of the OFA -AFA measure in a U.S.  countervailing duty 
proceeding".234 Canada subsequently clarified that the reference period should be the most recent 
calendar year preceding the triggering eve nt in which no company whose data will be used in the 
model is subject to a CVD rate affected by the OFA -AFA Measure.235 Canada asserts that the 
arbitrator's decision in US – Washing Machines (Article 22.6 – US) supports its position.236 
Responding to specif ic questions from the Arbitrator about the reasonableness of this approach, 
Canada recognized that, under its originally proposed approach, because the all -others rate created 
in an original investigation remains unchanged for the duration of the CVD order , if the all -others 
rate were an affected rate, then the reference period might become significantly outdated for 
triggering events occurring years after the imposition of the original CVD order. Although Canada 
indicates that such sequential uses of the O FA-AFA Measure are unlikely, Canada offered a revised 
approach that purports to remedy the potential problem of the reference period becoming 
significantly outdated. Specifically, Canada proposes that if the reference period would be more than 
five years o ut of date using its original approach, then Canada may, at its discretion, select a 
reference period from the most recent five years preceding the triggering event in which less than 
5% of Canadian imports were subject to an affected CVD rate.237 
6.98.   Additiona lly, Canada has argued that relevant imports during that calendar year may be 
"atypically low or even non -existent", and thus Canada asserts that it "may be useful" to define the 
reference period as "normally … the calendar year prior to the year where the  duties from the 
OFA-AFA measure are applied in a final determination by Commerce".238 In cases of "atypical import 
values/market shares", Canada suggests that "an alternative reference period could be the three 
calendar years prior to the year where the du ties from the OFA -AFA measure are applied by 
Commerce in a final determination or review".239 
6.99.   The United  States  originally asserted that the reference period should be the "full calendar 
year prior to the issuance of the final determination or final results  by Commerce that applies the 
challenged measure in a CVD proceeding concerning Canadian goods".240 This was appropriate, in 
the United  States' view, because the value of imports during that time will have been unaffected by 
 
233 We recall that the de minimis threshold will differ as between investigations and administrative 
reviews as well. See fn 215 to para. 6.83, above.  
234 Canada's methodology paper, para. 12. See also Canada's writte n submission, para. 180; Canada's 
response to Arbitrator question No. 35, para. 57 (same), No.  79, para. 170 (indicating that the reference 
period should reflect the value of imports that "does not reflect the WTO inconsistent duty"), and No. 125, 
paras. 60 -61. 
235 See generally Canada's response to Arbitrator question No. 207; No. 244, para. 221, and No. 247, 
paras. 237 -240; Canada's comments on the United  States' response to Arbitrator question No. 207, 
paras.  42-52. 
236 Canada's response to Arbitrato r question No. 247, para. 239.  
237 See generally Canada's response to Arbitrator question No. 287, paras. 30 -36. See also Canada's 
response to Arbitrator question No. 207, para. 118, No. 247, para. 240, and No. 287, paras. 30 -33. 
238 Canada's response to Arbit rator question No. 120, paras. 34 -35.  
239 Canada's response to Arbitrator question No. 120, para. 35. 
240 United  States' written submission, para. 47. (emphasis omitted)  WT/DS505/ARB  
 
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the OFA -AFA Measure.241 Respondin g to questions from the Arbitrator in which it was pointed out 
that such a reference period may actually have affected CVD rates active within it, the United  States 
further clarified its approach. Specifically, the United  States indicated that, for a trigg ering event in 
which there is an application of the OFA -AFA Measure, the reference period would be the calendar 
year before the triggering event, but only newly affected companies would be treated as affected 
companies for purposes of that model run.242 In such cases, the United  States recognizes that, if 
affected CVD rates were active during that reference period, the level of NI may have to be further 
adjusted to take into account previous applications of the OFA -AFA Measure.243 
6.100.   The United  States argues that its approach is necessary in order for the reference period to 
reflect, as much as possible, the market conditions facing the relevant Canadian companies at the 
time of the triggering event and at which time the level of NI will b e calculated. The United  States 
thus argues that the Arbitrator should reject the Canadian proposal to use, as the reference period, 
the most recent calendar year prior to the triggering event in which no Canadian company was 
subject to a CVD rate affected  by the OFA -AFA Measure. In the United  States' view, there are 
circumstances under which that approach could lead to Canada using a reference period many years 
before the triggering event, and thus yielding inaccurate estimations of the level of NI that ex ists at 
the time of the triggering event.244 The United  States has further asserted that Canada has failed to 
properly explain how it would apply its formula and choice of reference period to a variety of 
hypothetical scenarios posed by the Arbitrator.245 
6.101.   In a specific response to Canada's revised proposal for selecting the reference period, the 
United  States considers Canada's proposal inappropriate. Specifically, the United  States argues that 
Canada's revised approach could still result in the use of a si gnificantly outdated reference period, 
thus making it unrepresentative of market conditions at the time of the triggering event.246 The 
United  States also objects to Canada's suggestion that Canada be given discretion to select the 
reference period under it s revised proposal, as this would, in the United  States' view, be a procedure 
that is inappropriately biased in favour of Canada.247 
6.102.   Canada  argues that the United  States' proposal for the reference period (insofar as it results 
in the use of a reference per iod in which affected CVD rates are present) is antithetical to the core 
purpose of a reference period, i.e. to represent a time during which the market is unaffected by the 
WTO-inconsistent measure. Relatedly, in Canada's view, such an approach would like ly understate 
the level of NI by using depressed values of imports from companies that had affected CVD rates 
during that reference period, and also by using affected CVD rates as the reference period duty 
rate.248 Moreover, according to Canada, using such a reference period is inconsistent with the 
United  States' own position that the US model should simultaneously modify all duty rates that are 
 
241 United  States' written submission, para. 47. See also response to Arbitrator question N o. 35(c), 
paras. 106 -115, and No.  120, para. 7.  
242 See generally the United  States' response to Arbitrator question No. 207, paras. 67 -97. 
243 United  States' response to Arbitrator question No. 207, paras. 71, 83, and 93, and fn 71 to para. 87; 
comments on Ca nada's response to Arbitrator question No.  287, para. 22 and fn 42 thereto, and No. 282, 
para. 12 (referring to the United  States' response to Arbitrator question No.  207, para. 71 and fn 65 thereto). 
The United  States further asserts that it is necessary to use the same reference period for calculating the value 
of imports and relevant market shares (United  States' comments on Canada's response to Arbitrator question 
No. 202, para. 76).  
244 See generally the United  States' comments on Canada's response to Ar bitrator question No. 207, 
paras. 86 -106; Canada's response to Arbitrator question No. 247, paras. 237 -240. The United  States indicates 
that when the OFA -AFA Measure is used in multiple segments of a CVD proceeding, it is likely that such 
multiple uses wou ld occur in segments separated by multiple years (United  States' response to Arbitrator 
question No.  207, para. 76).  
245 See generally the United  States' comments on Canada's response to Arbitrator question No. 207, 
paras. 86 -106. 
246 United  States' comments on Canada's response to Arbitrator question No. 287, para. 20.  
247 United  States' comments on Canada's response to Arbitrator question No. 287, para. 21.  
248 Canada's response to Arbitrator question No. 244, para. 220; Canada's comment s on the 
United  States' response to Arbitrator question No. 207, paras. 42 -45 and fn 63 to para. 45. Canada claims that 
the United  States' approach would inappropriately treat "legacy" WTO -inconsistent CVD rates as reference 
period duty rates, factual duty  rates, and counterfactual duty rates (Canada's comments on the United  States' 
response to Arbitrator question No. 207, para. 43).  WT/DS505/ARB  
 
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  affected by the OFA -AFA Measure.249 Canada also asserts that the United  States has not 
demonstrated how its model would remove the levels of NI previously calculated for certain affected 
companies.250 Canada further argues that the United  States' proposal would place a larger burden 
on Canada because it would always require a newly updated reference -period data set bei ng 
generated for every triggering event, whereas under Canada's approach the reference period data 
set might remain the same for more than one triggering event.251 
6.103.   The Arbitrator first notes Canada's proposal to potentially use a three -year reference period . 
In essence, this is a request to disregard a year -long reference period if Canadian imports of the 
relevant product were unusually low for that year. Canada offers no method, however,  for 
determining whether exports were unusually low during that year. M oreover, although it is 
undoubtedly true that imports of particular goods would be expected to fluctuate somewhat over 
time, Canada also provides no reason to think that a year -long reference period, in general, would 
provide unrepresentative results for a ny particular product or sector of products. For these reasons, 
the Arbitrator rejects this Canadian proposal, and considers that a year -long reference period should 
be used.  
6.104.   The question thus becomes when the one -calendar -year reference period should occu r 
relative to the triggering event. As an initial matter, the Arbitrator considers that both parties, in the 
course of their arguments, have correctly identified two key and desirable attributes of the reference 
period: (a) representing a period of time du ring which relevant imports are unaffected by the 
OFA-AFA Measure; and (b) representing a period as close in time as reasonably possible to the 
triggering event. These two attributes are geared to allow the model to accurately identify the trade 
loss that Canada will suffer as a result of the application of the OFA -AFA Measure to Canadian 
companies moving forward from the triggering event. We further recall that any methodology 
adopted by the Arbitrator must be practical to implement.252 For these reasons, w e accept that the 
reference period should be the calendar year preceding a relevant triggering event if in that year 
Canadian companies are not subject to affected CVD rates.  
6.105.   The problem in this context is that the calendar year preceding a triggering even t may be 
one in which Canadian companies are subject to affected CVD rates. The United  States refers to 
such affected CVD rates as "legacy" affected CVD rates253, a term which we adopt here. Legacy 
affected CVD rates can arise if the USDOC uses the OFA -AFA Measure in separate CVD proceedings 
when administering the same CVD order (e.g. using the OFA -AFA Measure in an original investigation 
and then using the measure again in a subsequent administrative review). If Canadian companies 
are subject to legacy affe cted CVD rates within a given calendar year, it makes that year less 
desirable for use as a reference period because the values of imports within it will be, to some 
degree, distorted by the OFA -AFA Measure. We note that both parties consider this multiple -use 
scenario unlikely254, but possible. With this in mind, we move now to evaluate the parties' proposals 
for selecting the reference period. The parties have offered three proposals for the selection of a 
reference period, which we address in turn, follow ed by a discussion of a proposal made by the 
Arbitrator to the parties.  
6.4.1   United  States' proposal  
6.106.   The United  States' proposal is to use the calendar year preceding the triggering event. If 
Canadian companies are subject to legacy affected CVD rates in that r eference period, however, 
only newly affected companies will comprise the affected variety, and appropriate adjustments will 
 
249 Canada's comments on the United  States' response to Arbitrator question No. 207, paras. 42 -52. In 
particular, Canada claim s that the United  States' proposed adjustments will inappropriately focus on a single 
company's exports, and ignore the very offsetting effects that the United  States has consistently advocated 
must be taken into account when calculating a level of NI (Can ada's comments the United  States' response to 
Arbitrator question No. 207, para. 46).  
250 Canada's  comments on the United  States' response to Arbitrator question No. 207, para. 44.  
251 Canada's comments on the United  States' response to Arbitrator question No.  287, para. 26.  
252 See section 6.1.2, above.  
253 See e.g. the scenario in Arbitrator question No. 207(b).  
254 United  States' comments on Canada's response to Arbitrator question No. 247, para. 174 (explaining 
that would be a "very unlikely event that there are two applications of the challenged measure in  separate 
segments of a CVD proceeding"); Canada's response to Arbitrator question No. 287, para. 30 (explaining that 
it would be an "extremely rare set of circumstances where Canada would need to suspend concessions 
regarding more than one applications [ sic] of the OFA -AFA measure in the same CVD proceeding").  WT/DS505/ARB  
 
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be made to previously calculated levels of NI, which may then have to be summed with the new 
calculated level of NI. The main advan tage of the United  States' proposal is that the reference period 
will always be near in time to the triggering event, i.e. the calendar year preceding it.  
6.107.   There are two main disadvantages of the United  States' proposal, however. First, legacy 
affected CVD rates active in that reference period will cause the value of imports of Canadian 
companies to be distorted by the OFA -AFA Measure.  
6.108.   Second, the United  States' proposals for performing necessary adjustments to previously 
calculated levels of NI in certain s cenarios appear problematic. In order to illustrate the problems 
with the United  States' adjustment proposals, we will discuss two different hypothetical scenarios. 
The first is as follows: Company A and Company B receive affected rates in an investigation  
concluding in 2022, and the all -others rate is also affected. Company A receives a new but 
again -affected CVD rate in an administrative review concluding in 2024. No other CVD rates change. 
In this scenario, under the United  States' approach, Canada would  calculate a level of NI in 2022 
using 2021 as the reference period. Canada would then calculate a new level of NI in 2024 using 
2023 as the reference period, but using Company A only as the affected variety. Canada would then 
remove from the 2022 level of  NI Company A's "share" of that level of NI, by assuming that that 
share of NI is in proportion to Company A's "share of the value of imports in the investigation".255 
Canada would then sum the remainder of the 2022 NI with the new 2024 level of NI (i.e. su mming 
the NI arising from: (i) Company B's 2022 affected rate; (ii) the all -others 2022 affected rate; and 
(iii) Company A's 2024 affected rate).256 
6.109.   We discern two key issues with the adjustment strategy proposed by the United  States in 
this context. First,  the level of NI calculated for 2024 will rely on values of imports that are distorted 
due to the presence of the legacy affected CVD rates in the 2023 reference period. These distortions 
may be significant given that multiple individually investigated com panies, and any companies that 
may be subject to the affected all -others rate, had affected CVD rates during this time. Second, the 
United  States' assumption that the portion of NI calculated in 2022 that arose specifically due to 
Company A's affected rate  imposed at that time would be proportional to Company A's share of the 
total value of imports of the relevant product from the 2021 reference period257 (or during any 
period, for that matter) appears questionable. This is so because the extent to which a p articular 
company being subject to an affected rate contributes to a calculated level of NI does not just depend 
on the company's value of imports, but also on the magnitude of its change of duty rate.258 
6.110.   The second scenario illustrating the problems with t he United  States' adjustment proposals 
involves the following hypothetical: Company A and Company B receive affected rates in an 
investigation concluding in 2022, and the all -others rate is also affected. Company C is among those 
companies subject to the a ffected all -others rate. Company C then receives a WTO -consistent CVD 
rate in an administrative review concluding in 2024. No other CVD rates change. In this scenario, 
the United  States explains that Canada would calculate a level of NI in 2022 using 2021 as the 
reference period, and then calculate a new level of NI in 2024 by removing Company C's share of 
NI from the 2022 calculation. The newly calculated level of NI in 2024 would replace the old level of 
NI calculated in 2022.  
6.111.   We discern two key issues with the adjustment strategy proposed by the United  States in 
this context. First, and as already discussed two paragraphs above, the United  States does not 
appear to explain why it would be reasonable to assume that the level of NI arising from Com pany C 
being subject to the affected all -others rate in 2022 is proportional to its share of Canadian imports 
of the relevant product during the 2021 reference period (or during any period, for that matter). 
Second, even if that could be reasonably assumed , it is unclear how the United  States assumes 
Company C's value of imports would be determined, at least in certain instances. In particular, in 
 
255 United  States' response to Arbitrator question No.  207, fn 71 to para. 87.  
256 See e.g. the United  States' response to Arbitrator question No. 207, para. 83.  
257 We understand this assumption to be as  follows: if Company A had 10% of all Canadian imports of 
the relevant product subject to the CVD order in the 2021 reference period, then Canada would remove 10% of 
the level of NI calculated in 2022.  
258 We also note that the resulting total level of NI ac hieved under the United  States' approach 
(i.e. summed from the 2022 level and 2024 level of NI, after adjustments) is calculated from two different 
reference periods, i.e. 2021 and 2023. This appears a somewhat odd result considering that the United  States  
has consistently indicated that its model's key advantage is that it simultaneously accounts for all relevant 
companies in calculating a given level of NI. See , e.g.  section s 7.1.2.3  and 7.2.3, below.  WT/DS505/ARB  
 
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  the absence of US Customs data, and if Company C failed to provide its company -specific information 
to Canada, it is unclear how Canada would determine Company  C's value of imports for the 2021 
reference period.  
6.112.   In sum, the United  States' suggested approach appears to have key weaknesses. Most 
seriously, the proposal could lead to the use of a reference period in w hich significant distortions 
caused by the OFA -AFA Measure are present, with no mechanism in place for reasonably ensuring 
that such distortions are limited in scope. Further, the United  States' suggested methods for 
performing necessary adjustments in the  presence of legacy affected CVD rates appear problematic 
and in certain cases rely on unsupported assumptions. In light of these weaknesses, we do not 
consider the United  States' proposal to be a viable option.  
6.4.2   Canada's original proposal  
6.113.   Canada's original  proposal is to always use the most recent calendar year preceding the 
triggering event in which no Canadian company was subject to an affected CVD rate. The main 
advantage of this approach is that the reference period will always be a period in which the values 
of imports of Canadian companies are undistorted by the OFA -AFA Measure.  
6.114.   The main disadvantage of this proposal is that it could lead to the use of a reference period 
occurring years before the relevant triggering event if legacy affected CVD rates are present in the 
year or years leading up to the triggering event, as no such year could be used as the reference 
period. This could be particularly problematic when there is an affected all -others rate created in an 
original investigation. This is so be cause, as the United  States has explained, the all -others rate 
created in the original investigation stays in place and active for the duration of a CVD order.259 We 
also recall that there is no published list of companies subject to the all -others rate260, and companies 
can become subject to the all -others rate without Canada's knowledge.261 Thus, if the all -others rate 
is affected, in order for Canada to apply its approach, we consider that Canada would need to assume 
that at least one Canadian company is su bject to that affected rate in every calendar year following 
the conclusion of an investigation. This would mean that, in the presence of a legacy affected 
all-others rate, the reference period under the original Canadian approach will always  be the calend ar 
year preceding the year in which the CVD order was originally issued.  
6.115.   In sum, in the presence of affected legacy CVD rates, and especially an affected legacy 
all-others rate, the original Canadian proposal could produce a reference period occurring many  
years before the triggering event. Indeed, there appears no particular ceiling on the number of years 
by which the reference period could become outdated under this approach, and there is no 
mechanism in place for mitigating the risk that the reference pe riod might become significantly 
outdated. Such a significantly outdated reference period would likely compromise the efficacy of the 
reference period in representing market conditions at the time of the triggering event. Thus, while 
we consider the origina l Canadian approach viable, it displays a weakness.  
6.4.3   Canada's revised proposal  
6.116.   Canada's revised proposal is to use the most recent calendar year preceding the triggering 
event in which no Canadian company was subject to an affected CVD rate unless this woul d lead to 
a reference period "that is five years or more prior to the triggering event".262 In that case, Canada 
would have the discretion to select a calendar year from the five years preceding the triggering 
event provided that in the selected year less t han 5% of Canadian imports were subject to affected 
CVD rates.  
 
259 See the United  States' response to Arbitrator question No. 207, fn 70 to para. 79. In contras t, 
Canada would know at all relevant times when affected individual and affected non -selected rates are being 
applied to Canadian companies. This is so because the USDOC publishes the names of the companies to which 
such rates are applied. Moreover, when c ompanies subject to such affected rates become unaffected, Canada 
would have to adjust the previously calculated level of NI to account for that removal. (See para. 6.36, above).  
260 See fn 625 to para. 8.140 (c) and fn 719 to para. 8.192,  below . 
261 For example, a new shipper would become subject to the all -others rate when it begins to export to 
the United  States, an event which would not qualify as a triggering event. (See para. 6.36, above and 
para. 8.274 , below)  
262 Canada's response to Arbitrator question No. 287, para. 33.  WT/DS505/ARB  
 
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6.117.   The main advantage of this approach  is that it strikes a balance between the competing 
considerations of selecting a reference period that is temporally proximate to the triggering event 
but that is also undistorted by the OFA -AFA Measure. As under Canada's original proposal, the 
reference period under this revised approach could be outdated, but it would be distortion -free. The 
risk of selecting a significantly  outdated reference period, howev er, is mitigated by Canada's ability 
to use an updated reference period if distortions caused by the OFA -AFA Measure within it are limited 
(i.e. if 5% or less of Canadian imports of the relevant product are subject to an affected rate).  
6.118.   Canada's revised pr oposal displays two main disadvantages, however. First, it grants Canada 
the discretion to select a reference period in certain circumstances, which introduces a systemic bias 
in favour of Canada. Second, in the event that using a distortion -free reference  period would yield 
a reference period outdated by more than five years, Canada offers no specific guidance regarding 
how Canada would determine whether the 5% threshold is met in any of the five relevant calendar 
years, other than to indicate that Canada would rely on US Customs data in making that 
evaluation.263 We accept that US Customs data could be used, in principle, for this determination. 
Indeed, further below in this Decision, we prescribe procedures and timelines for the gathering and 
verifying one year's worth of US Customs data, which was developed with  extensive consultation 
with the parties through questions and answers during the course of this proceeding.264 While certain 
of these procedures could also be used in this context, it is plain that potentially quintupling the 
amount of US Customs data unde r consideration by the parties would require significantly more 
burdensome data -gathering on the part of the United  States and lengthy delays in the timelines 
already suggested by the parties for such gathering as well as subsequent verification.  
6.119.   In sum, b ecause Canada's revised approach would introduce a systemic bias in favour of 
Canada, and in the absence of practical suggestions by Canada as to how to manage the necessary 
and burdensome import -data evaluation process discussed in the paragraph immediate ly above, we 
do not consider that Canada's revised approach is a viable option.  
6.4.4   Arbitrator's proposal  
6.120.   The Arbitrator considers that there is an alternate way of selecting the reference period. 
Under this approach, the reference period would be the most rec ent calendar year preceding the 
triggering event in which no Canadian company was subject to an affected CVD rate265 unless  this 
would lead to a reference period, the end of which is more than five years before the triggering 
event. In that case, Canada wou ld use the most recent calendar year preceding the triggering event 
in which the only affected rate imposed on Canadian companies was the all -others rate or in which 
no Canadian company is subject to an affected CVD rate. The Arbitrator proposed a similar version 
of this method for selecting the reference period to the parties for comment in Arbitrator question 
No. 287.  
6.121.   The main advantage of this approach – as was the case with Canada's revised approach – is 
that it strikes a balance between the competing c onsiderations of selecting a reference period that 
is temporally proximate to the triggering event but that is also undistorted by the OFA -AFA Measure. 
Under this approach, the reference period could be outdated, but it would be distortion -free.266 
 
263 Canada envisions using US Customs data in this context (Canada's response to Arbitrator question 
No. 287, para. 33).  
264 See generally section 8.1.1.2.1 , below.  
265 As already discussed further above, Canada would assume that Canadian companies are subject to 
an affected all -others rate in every relevant calendar year. Canada would know, however, whether companies 
were subject to affected individual or non-selected rates during all relevant calendar years. (See  fn 259 to 
para. 6.114 , above).  
266 If a company exports the relevant product at the time  of the triggering event but did not export in 
the reference period, the reference period will yield a company -specific value of imports of zero for that 
company, thus diminishing the accuracy of the calculated level of NI. Such occurrences might be expect ed to 
increase the more outdated the reference period is (if, for no other reason, companies may enter and exit the 
relevant market over time). The Arbitrator raised this issue with the parties in Arbitrator question No. 287. The 
United  States acknowledged  the issue (United  States' response to Arbitrator question No. 287, para.  23), and 
Canada did not discuss it. Neither party has indicated to the Arbitrator that it would introduce a systemic bias 
in favour of either party. Moreover, although we note that, under the model selected by the Arbitrator further 
below in this Decision, the level of NI is more sensitive to the value of affected Canadian imports than it is to 
the value of unaffected Canadian imports, without knowing ex ante  which kind of company or companies 
(affected or unaffected) this issue might affect, we consider that it is unclear how this issue would affect the 
level of NI in any given instance.  WT/DS505/ARB  
 
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  Unlike t he original Canadian approach however (i.e. the only other viable option before us), this 
approach has a mechanism to mitigate the risk of using a significantly  outdated reference period, 
i.e. Canada's ability to use a relatively updated reference period i f the only affected rate imposed on 
Canadian companies within that year is the all -others rate. The approach is also practical to 
implement because the times during which affected CVD rates are in place will be readily 
ascertainable by Canada from USDOC re cords.  
6.122.   The Arbitrator recognizes that the presence of an affected all -others rate in the reference 
period means that the value of imports from companies subject to that rate will be distorted by the 
OFA-AFA Measure. The Arbitrator considers that the risk o f significant distortions arising from an 
affected all -others rate, however, will generally diminish over time. This is so because, as the 
United  States has observed, the number of companies subject to the all -others rate will decrease 
over time as compani es originally subject to that rate request (in particular) administrative reviews, 
and are thus assigned alternate individual CVD rates or non -selected rates.267 Therefore, it appears 
a reasonable assumption that, in general and over time, even if the all -others rate were affected, 
the value of imports of the companies subject to that affected rate would be increasingly limited, 
which, in turn, would limit the distortions arising from it. Waiting at least five years following the 
conclusion of the original i nvestigation before allowing Canada to use a reference period with an 
affected all -others rate active within it will provide at least some time for companies originally subject 
to the all -others rate to be assigned other kinds of CVD rates.268 
6.123.   On balance, t he Arbitrator considers this proposal preferable to the original Canadian 
proposal (i.e. the only other viable proposal before the Arbitrator). We first note that these two 
approaches will always yield the same reference period (i.e. the calendar year prec eding the 
triggering event) unless Canadian companies are subject to legacy affected CVD rates in that year. 
As already noted further above, the parties agree that such a scenario is unlikely. In that unlikely 
scenario, however, the Arbitrator is concerned  that, especially in the presence of an affected 
all-others rate, the Canadian original proposal may result in the use of a reference period outdated 
by an unknown, and potentially significant, number of years. The Arbitrator's approach mitigates 
the risk of using such significantly outdated reference periods.269 While that mitigation comes at the 
cost of introducing a risk of distortions into an updated reference period (owing to the presence of 
an affected all -others rate), as discussed in the preceding pa ragraph, it appears a reasonable 
assumption that such distortions will generally diminish over time.  
6.4.5   Conclusion  
6.124.   In accordance with the above discussion, the reference period will be the most recent 
calendar year preceding the triggering event in which no Canadian company was subject to an 
affected CVD rate270 unless  this would lead to a reference period that ends more than five years 
before the triggering event. In that case, Canada would use the most recent calendar year preceding 
the triggering event in w hich either the only affected rate imposed on Canadian companies was the 
all-others rate or in which no Canadian company is subject to an affected CVD rate.  
 
267 United States' oral answer to Arbitrator question No. 207 at the meeting of the Arbitrator. The 
Arbitrator also explicitly mentioned this observation as part of a question to the parties proposing a version of 
this methodology to selecting a reference period. (See Arbitrator question No. 287, first paragraph). Neither 
party questioned the reasonablen ess of this assumption in their responses to that question, or at any other 
time. 
268 We further note that, as discussed in the subsections above, both parties have proposed, and 
therefore indicated their willingness to tolerate to some degree, using a refer ence period in which affected CVD 
rates are imposed on Canadian companies.  
269 The Arbitrator's proposal, of course, does not entirely remove the possibility of using an outdated 
reference period, as affected individual CVD rates and/or affected non -selected  rates may be imposed on 
companies in the year or even years leading up to a triggering event. (See e.g. Canada's response to Arbitrator 
question No. 287, para. 31; United  States' response to Arbitrator question No. 287, paras.  21-23). We further 
note that  this was the only material objection either party raised with respect to the Arbitrator's proposed 
method of selecting the reference period in question No. 287.  
270 Canada will assume that Canadian companies are subject to an affected all -others rate in eve ry 
calendar year. Canada will know, however, whether companies were subject to affected individual or 
non-selected rates during all relevant calendar years, and thus will not have to make any assumptions in this 
regard.  WT/DS505/ARB  
 
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7  ASSESSMENT  OF THE PARTIES' ECONOMIC MODELS  
7.1.  In economic terms, the level of NI is estimated as the t rade decline experienced by Canadian 
exporters due to the application of the OFA -AFA Measure. Therefore, the appropriate methodology 
must be able to estimate trade that occurs with the OFA -AFA Measure (factual) having been used in 
a particular situation  and trade that occurs with the OFA-AFA Measure not having been used in that 
same situation  (counterfactual). The difference between the two levels of trade can be interpreted 
as the trade effect causally induced by the OFA -AFA Measure. In practice, the OFA-AFA Measure 
translates into duty rate changes that are higher than without the OFA-AFA M easure. In trade 
models, any change in tariffs is considered a "shock" and such trade models translate these shocks 
into changes in actual trade pattern s, i.e. trad e declines  or increase s. Importantly, everything else 
except this "duty rate shock" must be held constant such that the OFA -AFA Measure's effect can be 
identified in isolation from the effects of other factors. Against this background, the Arbitrator seeks  
to determine a methodology capable of translating the "duty rate shock" most reasonably into trade 
effects  on Canadian exports . To that end, i n this section, we first review the  models  proposed by 
Canada and by the United States, and identify their relati ve strengths and weaknesses. We then 
detail the model selected by the Arbitrator to determine the level of NI, i.e. a  partial equilibrium  
non-linear Armington model with four varieties.  
7.1  Canada's proposed model  
7.1.1   Overview  
7.2.  At the outset,  and before a critical assessment , the Arbitrator considers it helpful to provide an 
overview of Canada's basic methodology.271 Canada proposes to use a formula derived from a partial 
equilibrium Armington model.272 Canada proposes to determine the level of NI by measuring the 
trade effect of the OFA -AFA Measure, which is "equivalent to the effect on the value of U.S. imports 
from Canada attributable to the application of the OFA -AFA measure".273 To this end, Canada adopts 
a partial equilibrium model which, as Canada asserts, is "we ll established in the literature on trade 
analysis and has previously been used for quantifying lost imports under similar circumstances".274 
7.3.  Canada's partial equilibrium model is based on the "Armington assumption". Under this 
assumption, consumers treat " varieties" of a good from different sources (home firms, firms located 
in foreign countries 1, 2, 3 …) as imperfect substitutes. The parameter governing the degree of 
substitutability across varieties is the elasticity of substitution. As argued by Canada,  "[a] constant 
elasticity of substitution demand across varieties of a product from different locations allows for 
imports to rise and fall smoothly in response to changes in the relative price of products from 
different locations".275 The Arbitrator notes that trade models assuming a constant elasticity of 
substitution exhibit desirable properties that facilitate mathematical implementation  and are 
therefore well established in the relevant academic literature.  
7.4.  As Canada explains, the level of NI determined under its proposed methodology is equal to the 
change in the value of imports attributable to the duty resulting from the OFA -AFA Measure an d can 
be obtained in general by the following formula276: 
𝑁𝐼≡𝑐ℎ𝑎𝑛𝑔𝑒  𝑖𝑛 𝑖𝑚𝑝𝑜𝑟𝑡𝑠 =𝑣𝑎𝑙𝑢𝑒  𝑜𝑓 𝑖𝑚𝑝𝑜𝑟𝑡𝑠  × ∆𝑑𝑢𝑡𝑦  ×𝑠𝑐𝑎𝑙𝑖𝑛𝑔  𝑓𝑎𝑐𝑡𝑜𝑟 . (1) 
 
In equation (1):  
 
• the 𝑣𝑎𝑙𝑢𝑒  𝑜𝑓 𝑖𝑚𝑝𝑜𝑟𝑡𝑠  (also referred to by Canada as 𝑣𝑖𝑚𝑝) is the value of Canadian exports 
of the relevant product subject to CVDs affected by the OFA -AFA Measure to the 
United  States, net of any duties or tariffs. It is equal to 𝑝𝐶𝐴𝑑𝐶𝐴, where 𝑝𝐶𝐴 is the price of 
 
271 Canada's proposed methodology chan ged in certain respects during the course of this Arbitration 
proceeding. Thus, this section summarizes the key aspects of Canada's proposed methodology that have 
remained relatively stable during this Arbitration proceeding.  
272 This kind of model was used, in different variations, in three past Article 22.6 arbitrations:  
US – Washing Machines (Article 22.6 – US); US – Anti-Dumping Methodologies (China) (Article  22.6 – US); 
and US – Countervailing Measures (China) (Article  22.6 – US). 
273 Report Appending Canada's Methodology Paper ("Canada's methodology report"), para. 1.  
274 Canada's methodology report, para. 4.  
275 Canada's methodology report, fn 10 to para. 17.  
276 Canada's methodology report, para. 34.  WT/DS505/ARB  
 
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  the Canadian variety as receive d by the Canadian exporter, net of any duty, and 𝑑𝐶𝐴 is 
the US demand for the Canadian variety277; 
• the change in the duty rate ( ∆𝑑𝑢𝑡𝑦) can be expressed as 𝛥𝑡
1+𝑡, where 𝑡 is an ad valorem  
duty rate expressed as decimal (i.e. 5% = 0.05) , and the "Δ" notation refers to absolute 
changes from equilibrium levels278; and  
the 𝑠𝑐𝑎𝑙𝑖𝑛𝑔  𝑓𝑎𝑐𝑡𝑜𝑟 ≡𝜂+1
(𝜀−𝜂)(𝜂+𝜎)[𝜎(𝜂−𝜀)−𝜂(𝜎+𝜀)𝜃𝐶𝐴] is a collection of the following 
parameters279: 
•  the Armington substitution elasticity 𝜎. This parameter describes the degree to which 
buyers are willing to substitute one source of a product for another source280; 
•  the price elasticity of demand 𝜀. This parameter describes the responsiveness of total 
US demand to the index of prices from all sources281; 
•  the price elasticity of supply 𝜂. This parameter describes the responsiveness of supply 
from a given source in response to a change in the price received, resulting, for instance, 
from a change in the d uty rate applied to the source of supply or to competing 
sources282; and  
•  the Canadian share of the total US market by sector283, 𝜃𝐶𝐴. This is calculated, for each 
sector, as the product of the Canadian share of total US imports and the share of total 
US imports in US domestic consumption (US production minus exports to all destination 
countries plus imports from all source countries).284 
7.5.  Due to the fact that the level of NI is represented by the formula in equation (1) above, this 
Decision will refer to Ca nada's approach as a "formula -based  approach".  
7.6.  The Arbitrator notes Canada's request to determine  certain elements  in equation (1) above  
now, and to determine certain elements when Canada applies the formula  in the future . In particular, 
Canada asks the Arbitrator to pre -determine the scaling factors (one for each sector) now. They 
would thus be set in this Decision and remain static moving forward. Canada proposes that the 
Arbitrator calculate 20, or, alternatively, 98 such scaling factors in its Decisio n (corresponding to 
20 sectors for which Canada proposes substitution elasticities, or, alternatively, to the 98 chapters 
in the Harmonized Commodity Description and Coding System (HS)).285 Canada proposes that the 
change -in-duty rate and value of imports ( vimp) elements be determined in the future , i.e. with 
data taken from the reference period (s ee section 6.4, above)  for vimp and with data taken from 
the reference period and the time of the triggering event (see section 6.2.1 , above ) for ∆𝑑𝑢𝑡𝑦. 
7.7.  Equation (1) is obtained from a partial equilibrium Armington model with two "varieties" of the 
relevant product: (a) the Canadian variety (with associated demand by US consumers denoted as 
𝑑𝐶𝐴, and associated supply to the US market denoted as 𝑠𝐶𝐴); and (b) the non -Canadian variety (with 
associated demand by US consumers denoted as 𝑑𝑈𝑆, and associated supply to the US market 
 
277 Canada's methodology report, Appendix 1.  
278 Canada's methodology report, para. 34 and Appendix 1 thereto  at pp. 18 -21. 
279 The scaling factor is found in the equation immediately after equation (A10) in Appendix 1 of 
Canada's methodology report.  
280 United  States' written submission, para. 114.  
281 Canada's methodology report, para. 20. To see this, note that the relationship between total 
expenditure for a product 𝐸 and its price index 𝑃 (a constant elasticity of substi tution (CES) aggregate of prices 
of the product's varieties from all sources) is expressed in Canada's Armington model as 𝐸= 𝛼𝑃1+𝜀, where 𝛼 is 
a constant ( see Canada's methodology report, equation A1 in Appendix 1). The elasticity of 𝐸 with respect t o 
𝑃 is then equal to 1+𝜀. 
282 Canada's methodology report, para. 26; United  States' written submission, para. 119.  
283 "Sector", in this context, means each sector for which the scaling factor is computed by Canada.  
284 Canada's methodology report, paras. 28 and 30.  
285 Canada's methodology report, figure 2 (20 scaling factors) and figure 4 (98 scaling factors).  WT/DS505/ARB  
 
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denoted as 𝑠𝑈𝑆).286 To obtain the formula contained in equation (1), Canada log -linearizes the 
model's equations around th e equilibrium with no excess demand, i.e. 𝑑𝐶𝐴=𝑠𝐶𝐴 and 𝑑𝑈𝑆=𝑠𝑈𝑆.287 
7.8.  Canada further assumes  a single supply elasticity from all sources, both domestic (i.e. US) and 
foreign (i.e. non -US). Canada also proposed a version of the formula derived assumi ng that the price 
elasticity of the supply of imports to the United  States from Canada, 𝜂𝐶𝐴, is different from the price 
elasticity of non -Canadian supply (notably, including supply by US domestic producers), 𝜂𝑈𝑆.288 The 
scaling factor in the modified formula is a function of the Armington substitution elasticity , 𝜎, the 
price elasticity of demand , 𝜀, the Canadian share of the total US market by sector, 𝜃𝐶𝐴, and the two 
different supply elasticities , 𝜂𝐶𝐴 and 𝜂𝑈𝑆.289 We note that t his extension  to Canada's model  still implies 
that the composite variety containing US and non -US supply  from non -Canadian sources  is governed 
by the single supply elasticity , 𝜂𝑈𝑆. We will discuss this issue in greater detail in section 8.1.6, below . 
7.1.2   Assessment  
7.9.  According to Canada, its formula -based approach has several strengths. Canada repeatedly 
stresses the model's simplicity, i.e. the practicability for implementation, and claims  that it produces 
predictable results.  According to Canada, the parameters  embodied in the pre-determined  scaling 
factors proposed by Canada  "are sufficiently robust to determine with reasonable reliability the trade 
effects for a wide range of products and markets".290 
7.10.   The Arbitrator acknowledges Canada's claim that Canada's formula -based approach offers 
some  advantages for its practical implementation because of  its pre -determination of fixed scaling 
factors. In that context, w e note that the formula to calculate the level of NI based on equation (1), 
as proposed by Canada, is expressly patterned after and id entical to the formula proposed by the 
arbitrator in US – Washing Machines (Article 22.6 – US) to calculate the level of NI stemming from 
the United  States' measures found to be "as such" WTO -inconsistent, which would operate with 
respect to non -large resi dential washers (LRWs).291 The arbitrator in US – Washing Machines 
(Article  22.6 – US), with reference to past arbitrations, selected the formula approach for non -LRWs 
applying the principles discussed in section 6.1.2, above.292 
7.11.   The arbitrator in US – Washing Machines (Article 22.6 – US) ultimately justified the 
formula -based approach, as opposed to an exact solution, for non -LRWs as the best possible 
available compromise between its mandate to determine equivalence between the level of NI and 
the level of suspension of concession on the one hand, and the fact that it is impossible to precisely 
determine the level of NI caused by future events on the other hand.293 The arbitrator in 
US – Washing Machines ( Article  22.6 – US) acknowledged that the proposed formula was an 
approximation, which, according to the arbitrator, was nonetheless preferable to an "exact solution" 
approach (i.e. solving the set of equilibrium conditions of the models exactly, with the help of 
software) for two reasons: (a) it is more practical to implement; and (b) it reduces the number of 
decisions to b e taken by the complainant, thereby making the level of NI more predictable.294 
7.12.   However,  in the US – Washing Machines (Article 22.6 – US) arbitration , neither party had 
proposed to use an Armington partial equilibrium model to measure the level of NI arising from the 
 
286 See Canada' s methodology report, Appendix 1.  
287 The method of log -linearization is applied for a better analytical handling of systems of non-linear 
equations whose solutions can otherwise only be found numerically (i.e. by trial and error with the use of 
mathematical  software). Thereby, the equations are brought in to logarithmic form and then become 
approximately linear . Technically, log -linearization converts a non -linear equation into an equation that is linear 
in terms of the log -deviations of the associated variab les from their equilibrium values. Such log -linearization 
has some desirable properties with respect to the analytical solution , such as the fact that  small logarithmic 
deviations from equilibrium values can  conveniently  be interpreted as percentage change s. 
288 Canada's response to Arbitrator question No. 138, para. 84; Different Supply Elasticity  
(Exhibit  CAN-103). 
289 Canada's response to Arbitrator question No. 138, para. 84; Exhibit CAN -103. 
290 Canada's written submission, para. 97.  
291 See Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 4.58 (equation (6)) 
and Annex C -2 of the Addendum to this Decision, WT/DS505/ARB/Add.1 . 
292 Decision by the Arbitrator, US – Washing Ma chines (Article 22.6 – US), paras. 4.49 -4.52. 
293 Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 4.56.  
294 Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 4.63.  WT/DS505/ARB  
 
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  "as such" WTO -inconsistent measure , instead they made different proposals or none at all .295 Thus, 
the arbitrator had to fashion the Armington partial equilibrium model on its own. In contrast, in this 
arbitration proceeding,  not only Canad a (as discussed in this section) but also the United  States (as 
discussed in section 7.2, below)  have proposed Armington partial equilibrium models f rom the time 
of their earliest submissions  and discussed them in detail over the course of this arbitration.  
7.13.   The United  States has raised several objections to Canada's  formula approach. During the 
course of their written submissions and oral arguments at the meeting of the Arbitrator , the parties 
have developed their arguments surrounding such issues to a significant degree. Based on these  
arguments and their development s, the Arbitrator identifies five major potential issues with Canada's 
formula -based  approach:  
a. whether a log -linearized solution results in an unacceptably high  approximation error;  
b. whether the formula can produce illogical  and extreme results, and in particular 
estimated levels of NI that exceed the value of imports affected by the  
OFA-AFA Measure ; 
c. whether the Canadian formula takes so -called "offsetting effects" adequately into 
account;  
d. whether using pre -determined market -share data as part of the scaling factors can 
produce unreasonable results ; and 
e. whether Canada's proposed metho d of determining the level of NI in two steps , i.e. with 
two sequential applications of its formula,  has been adequately explained . 
7.14.   At the outset, the Arbitrator  notes that the se five issues do not exist in complete  isolation 
from each other . Rather,  they are often interconnected . With this caveat in mind, in the next sections  
7.1.2.1 -7.1.2.5 , we discuss each of these issues separate ly for analytic purposes, and then we 
provide a brief conclusion  in section 7.1.3. 
7.1.2.1   Approximation error  
7.15.   Regarding the degree to which Canada's formula -based approach could introduce  an 
unacceptably high  approximation error, we consider some brief background is in order before we 
discuss the parties' arguments on t his score. The Arbitrator therefore notes that Canada's formula 
is based on an Armington trade model, whose underlying equations describe, among others, 
non-linear supply and demand curves. The solution to such a model can, in principle, be determined 
in two ways: analytically or numerically. On the one hand, d ue to the complexity of the set of 
non-linear equations  characterizing the model equilibrium , analyti cal solutions can only be obtained  
using some mathematical simplifications, such as the log -linearization around the equilibrium.296 On 
the other hand, determining numerical solutions of a set of non -linear equations is computationally 
intense and typically  requires the use of computer software. We note that, over time, e mploying 
numerical instead of analytical solutions has become increasingly popular in economic modelling due 
to increased  availability of  mathematical software and processing power. The main  advantage of 
numerical solutions is that they do not need any logarithmic transformation  and therefore such 
solutions  are exact , as they do not rely on  any approximations. Thus, the terms "approximate  
solution " (for a n analytical  approach)  and "exact  solution" (for a  numerical  approach)  are used in 
the following to distinguish between the two approaches.  
 
295 Rather, Korea had proposed to use a "perfect substitutes partial equilibrium model", which the 
arbitrator rejected as inappropriate for various reasons ( Decision by the Arbitrator, US – Washing Machines 
(Article 22.6 – US), section 4.3.4). The United  States did not propose an approach to measuring the level of NI 
in this context ( Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 4.41).  
296 As already discussed in fn 287 to para. 7.7, above , log-linearization converts a non -linear equation 
into an equation that is linea r in terms of the logarithmic deviations of the associated variables from their 
equilibrium values. This method is a standard tool in economic modelling. One desirable feature thereof is that 
small logarithmic changes can be interpreted as percentage chang es. The disadvantage of this method is that it 
introduces  an approximation error.  WT/DS505/ARB  
 
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7.16.   Canada  log-linearizes the Armington model to determine what it considers to be the 
appropriate formula that can quantify the level of NI. According to Can ada, Canada "has provided 
an 'exact solution' to the linearized model proposed by Canada ".297 Canada also argues that "the 
United  States makes no attempt to quantify the magnitude of the difference between a 
non-linearized and a linearized model." 298 According to Canada, "it is recognized in academic 
literature that the differences in model outcomes between a non -linear and log -linearized version of 
the Armington model for evaluating the effect of tariff changes are very small".299 Canada  also 
asserts that the United  States' approach, which solves an Armington model non -linearly, is 
incompatible with the general principles that should govern the construction of the model. This is so 
because, in Canada's view, a non -linear application disallows the use o f pre-determined scaling 
factors, and would also require unnecessarily complex market -share calculations.300 
7.17.   The United  States  argues that Canada's "simplification comes at the cost of precision by 
introducing an approximation error".301 According to the Uni ted States, such approximation error 
necessarily arises in the Canadian approach because the Armington model is inherently non -linear, 
and the error increases with the size of the percent change in tariff.302 The United  States contends 
that, for the sake of  precision, the Armington model can and should therefore be solved exactly in 
its non -linear form, using appropriate mathematical software to determine a numerical solution.303 
During the meeting of the Arbitrator , the United  States brought forward an attem pt to quantify the 
magnitude of the approximation error that results from Canada's approximative model solution.304 
According to the United States, using data from a past United States' CVD order on imports from 
Canada (Softwood Lumber), the approximation error introduced  by Canada's formula is 23%.305 
7.18.   The Arbitrator considers that the parties' arguments in this context raise two relevant issues. 
First is the degree t o which Canada's model results in approximation error. Second is whether, in 
order to avoid any such  approximation error, using an exact solution as advocated by the 
United  States would be too complex. We address each in turn.  
7.19.   With respect to the degree to which Canada's model introduces  an approximation error, the 
Arbitrator first notes that Canada has made no attempt to demonstrate that the approximation error 
resulting from its model in fact is small in any meaningful way (i.e. that an approxima tion is 
essentially as accurate as an exact -solution approach), even when specifically asked to do so by the 
Arbitrator.306 Moreover, t he Arbitrator notes that , when asked to comment on the United States' 
estimation of a 23% approximation error computed usi ng data from the Softwood Lumber CVD 
order, Canada only argued t hat its formula does not suffer from any "approximation bias"307, in the 
sense that it does not "consistently generate higher levels of NI than the U.S. model" .308 Overall, in 
our view, Canada  has provided no evidence that its formula is free of approximation error, or that, 
if present, such approximation error is reasonably small. More specifically, with reference to the 23% 
approximation error calculated by the United States, Canada has provide d no evidence showing that 
such estimation by the United States is inaccurate. The Arbitrator is aware of the fact that this 
quantification is based on the United States' preferred parameter values and not Canada's. Using 
Canada's suggested parameter value s as outlined in scenario  1 of Exhibit USA -48309, the Arbitrator, 
however, estimates an approximation error which is only slightly smaller, equal to 19%. The 
Arbitrator considers that such approximation error is significant . 
 
297 Canada's response to Arbitrator question No. 38, para. 70. 
298 Canada's written submission, para. 133.  
299 Canada's written submission, para. 133.  
300 Canada's written submission, paras. 130 -132. 
301 United  States' written submission, para. 88.  
302 United  States' written submission, para. 88.  
303 United  States' written submission, para. 89.  
304 Illustrative Table: Nullification or Impairment Under Various Models/Scenarios Using Data from 
Softwood Lumber from Canada ( Exhibit USA -48). 
305 The approximation error o f 23% estimated by the United States stems from a comparison between a 
scenario with an approximate solution  (Scenario 4 in Exhibit USA -48) and a scenario with an exact solution 
(Scenario 5 in Exhibit USA -48). These estimates are based on a past US CVD order on imports from Canada 
(Softwood Lumber) that both parties referenced to several times during this procee ding. 
306 Canada's response to Arbitrator question No. 38, paras. 70 -72. 
307 Canada's response to Arbitrator question No. 250, para. 258 (quoting Exhibit USA -48). 
308 Canada's response to Arbitrator question No. 250, para. 258.  
309 Illustrative Table: Nullification or Impairment Under Various Models/Scenarios Using Data from 
Softwood Lumber from Canada (Exhibit USA -48). WT/DS505/ARB  
 
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  7.20.   We also discern reasons to consi der that such significant degree of approximation error may 
not only occur in  isolated events. As noted in the preceding paragraph, Canada has not demonstrated 
that approximation errors arising from its formula are small, notwithstanding an invitation from  the 
Arbitrator to do so. Moreover, it should be recalled that Canada's formula is meant to quantify the 
export decline that Canada would experience in the event that the United  States imposed a 
WTO-inconsistent CVD rate. A general rule in economic modelli ng is that approximate solutions of 
log-linearized models are relatively precise for simulating small changes of input variables or 
parameters values.310 Due to the prospective nature of this arbitration, however, the Arbitrator 
cannot rule out instances in  which changes in duty rates are large enough to be associated with 
significant approximation errors.  
7.21.   The Arbitrator further notes Canada's argument that avoiding  any approximation error by 
adopting a version of the United States' model (i.e. by adopting an exact solution using computer 
software) would require overly complex  calculations of market shares . In the Arbitrator's view, this 
criticism is misplaced. T he complexity of market -share calculations depends on the number of 
varieties that are included in an Armington model , rather than on the computation method. In our 
view, the two-varieties Armington model suggested by Canada could also be solved numerically 
without adding significant complexity  in this respect . We further note that the Arbitrator invited 
Canada to provide an exact solution to its model, but Canada declined to offer one .311 
7.22.   The Arbitrator also notes that exact model solutions , while more complex than approximate 
solutions in terms of execution of mathematical calculations, overcome this particular additional 
complexity via the use of computer  software . With the help of software, the practical implementation 
of exact model solutions is quite straig htforward. We note that the United States uses the software  
STATA  to solve  its own model , adapting code developed by the arbitrator in US – Anti-Dumping 
Methodologies (China)  (Article 22.6 – US).312 As Canada's exhibits show, Canada is familiar with 
using STATA, one of the most common software used by economists.313 In particular w ith reference 
to the numerical model solution provided by the United  States using STATA, Canada states that 
Canada "would have the technical expertise to adjust and execute p rogram codes to calculate a level 
of nullification or impairment".314 
7.23.   Finally, we note that Canada correctly asserts that a numerical solution disallows the use of 
a pre -determined scaling factor. However, the Arbitrator cannot accept  Canada's claim that th e 
absence of pre -determined scaling factors is incompatible with the general principles that we have 
adopted governing model selection in section 6.1.2, above . Indeed , the Arbitrator considers 
numerical solutions to a non -linear set of equations that are transparently outlined in appropriate 
coding language , along with reasonable guidance as to how to select parameter values,  fully 
compatible with relevant  principles.  As detailed further below, we consider that these tasks can be 
achieved.315 
7.24.   In sum, we conclude that Canada's approach of solving the non -linear Armington model 
analytically in its log -linearized form adds approximation errors that may be  significant , and could 
be avoided using software -based numerical solution methods . We consider this a material weakness 
of the Canadian formula . 
7.1.2.2   Extreme results under a log -linearized model  
7.25.   Another issue raised by the parties, which is r elated to  issues discussed in the preceding 
section surrounding exact versus approximate model solutions,  is whether Canada's formula can 
produce illogical and extreme results.  More specifically, in this context, t he Arbitrator  uses the term 
"extreme results" to de scribe estimated levels of NI  that are equal to , or larger than , the value of 
affected imports.  Such a result appears unreasonable  on its face , as it would require relevant 
affected imports not just to decreas e as a result of the application of the OFA -AFA Measure  but 
 
310 In economic modelling, changes are typically considered "small" if they are less than 10%. This is 
because log (1+𝑥)≈𝑥 for 𝑥 ≤0.1. 
311 Canada's response to Arbitrator question No. 38, paras. 70 -72. 
312 United States' response to Arbitrator question No. 143, para. 41.  
313 For instance, Canada provides STATA codes in Replication Files ( Exhibit CAN -74); Replication File 
(Adjusted) ( Exhibit CAN-102); and "FGO Dataset C" ( Exhibit CAN-140). 
314 Canada's response to Arbitrator question No. 189, para. 47. 
315 We also note that there is nothing in an exact -solution approach that prevents pre -determining 
model inputs, such as different sort s of elasticities or market shares.  WT/DS505/ARB  
 
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disappear entirely along with additional decreases in other  Canadian imports of the relevant product 
as well.  The Arbitrator notes that such extreme results would not occur if the model were solved 
numerically in its non -linear form  because th e underlying imperfect substitutability of varieties 
across countries of origin inherent to any Armington model (called the Armington assumption) 
necessarily results in a non -linear notion of demand for a given variety . The Arbitrator, however, 
indicated t o the parties316 that Canada's model can produce such results if the following condition 
for Canada's formula outlined in equation (1) above  is satisfied : 
∆𝑑𝑢𝑡𝑦  ×|𝑠𝑐𝑎𝑙𝑖𝑛𝑔  𝑓𝑎𝑐𝑡𝑜𝑟 | ≥1 
 
In other words, extreme results occur if the product of duty rate changes and the absolute value of 
the scaling factor is larger than or equal to 1.317 
7.26.   The Arbitrator notes  that it appears difficult to rule out that instances would occur where the 
above -described  condition  is satisfied . This is so because  the largest scaling factor (in  absolute 
terms) that Canada proposes is 6.6 4318; and in this case, a tariff change 𝛥𝑑𝑢𝑡𝑦 ≥1
6.64≈15% would 
produce an extreme result . We further note that it appears speculative at this time how large duty 
rate changes arising from the OFA -AFA Measure would be , but we note that in the case of Resolute 
in the Supercalendered Paper  CVD order, the OFA -AFA specific CVD rate was 17.1%.319 
7.27.   Canada  acknowledges that its proposed formula can provid e extreme results.320 In such 
instances, Canada proposes to set the level of NI equal to the value of affected imports.321 According 
to Canada, such extreme results do not call into question the model's capability of providing a 
reasoned estimate. Rather, du e to the linearization of the demand curve, Canada argues that it can 
be considered a strength of Canada's model to allow imports falling to zero for sufficiently high 
("prohibitive") duties . According to Canada, t his linear notion of demand would also be more 
consistent with observed trade pattern s.322 
7.28.   The United  States objects to Canada's argument s for several reasons. First,  the United States 
asserts that  Canada propos es an Armington model whose notion of demand is non -linear , but 
Canada's approximative w ay of solving the model effectively  linearizes that demand curve . This 
implicit assumption of a linear demand structure is , according to the United States, theoretically 
unsound . Second,  in the United States' view,  a particular graphical illustration  offered by Canada in 
general support of its arguments323 is misleading as it implies Canada's model would not assume a 
constant elasticity of demand , whereas Canada assumes constant elasticity of demand parameters. 
Third,  the United States argu es that the same illustration implies that Canada's model would assume 
a linear notion of demand , whereas  Canada  linearizes the demand curve around the equilibrium by 
its tangent at the intersect ion between supply and demand.324 
7.29.   Canada later clarified  that its proposed model does not assume a linear demand curve " per se" 
but linearizes a non -linear demand around its equilibrium value.325 Moreover, Canada explained that 
Canada's initial reasoning  offered on this front  describes "not technically a demand curve"  but 
"features of a demand curve".326 Canada maintains its position that extreme results, i.e. trade falling 
to zero after a tariff intervention, are likely outcomes, particularly when the OFA -AFA Measure is 
applied to companies  active in commodity -like mar kets.327 
 
316 Arbitrator question No s. 191, 196, and 248. 
317 This inequality is obtained by straightforward manipulation of Equation (1), i.e. substituting the level 
of NI for vimp, noting that scaling factors are strictly negative (Canada's methodology report, figures 2 and 3).  
318 Canada's methodology report , Figure 3.  
319 United States written submission , para. 54. 
320 Canada's response to Arbitrator question No. 191, para. 65.  
321 Canada' s response to Arbitrator question No. 191, para. 66.  
322 Canada's response to Arbitrator question No. 191, paras. 69-74. 
323 Canada's response to Arbitrator question No. 191, Figure 3.  
324 United  States' comments on Canada's response to Arbitrator question No. 1 91, paras. 47-49. 
325 Canada's response to Arbitrator question No. 248, para. 241.  
326 Canada's response to Arbitrator question No. 248, para. 243.  
327 Canada's response to Arbitrator question No. 248, paras. 244-245. WT/DS505/ARB  
 
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  7.30.   In response to Canada's additional explanations, the United  States reiterates its position that 
prohibitive tariffs in Canada's formula are a by -product of its approximative way of solving the 
model.328 
7.31.   The Arbitrator shares the understanding of bot h parties that the proposed formula by Canada 
can provide extreme results, i.e. that trade in affected imports could fall to zero  – and actually 
beyond zero for affected exports – in certain situations.  However, the Arbitrator understands that 
Armington models rule out occurrences of prohibitive  duties because of their very nature resting on 
the Armington assumption that goods are only imperfectly substitutable across countries of origin.  
Consistent with  that assumption, t he non-linear demand structure  of Armington models  allows 
imports to asymptotically approach zero for large enough duty rate changes , and thus , in our view, 
adequately addresses the notion that large tariff changes could essentially – if not mathematically – 
prohibit imports of a given product . The extreme results reached under Canada's formula, therefore, 
appear not only difficult to square with the Armington assumption upon which both parties' models 
are based , but unnecessary as a pra ctical matter. For th ese reason s, we do not consider the extreme 
results as compensating  for some deficiency in the Armington assumption, as Canada appears to 
imply at times,  but rather  they point to a fundamental unsoundness in the functioning of the 
Canadian model. This is especially so given that the Canadian model can reach estimates of the level 
of NI that are not just equal but  exceed  the value  of affected imports.  
7.32.   The Arbitrator further notes that  an Armington model with log -linearized demand and an 
Armington model with non -linear demand provide approximately the same results only for small 
changes, i.e.  for evaluations sufficiently close to the initial equilibrium.  However, a  linear notion of 
demand is in general  inconsistent with the assumption of a constant substitution elasticity , a key 
assumption in Canada's proposed Armington model.  Given the prospective nature of this arbitration  
proceeding , the Arbitrator seeks to  determine a model that is sufficiently gene ric to capture 
movements along the entire demand curve. A linearized notion of demand seems to be  inconsistent 
with this objective.  
7.33.   In sum, t he Arbitrator concludes that the Canadian formula can be expected to produce 
extreme and unjustifiable results as a  result of its demand linearization. We consider this a significant 
weakness of the Canadian formula.  
7.1.2.3   Offsetting effects  
7.34.   By way of background, the issue of "offsetting effects" in this context  arises if 
WTO-inconsistent CVD rates are assigned to only a sub set of Canadian companies , who are  exporting 
a given product , and that are  subject to a relevant CVD order to the United  States. In this scenario, 
in Armington trade models, the use of the OFA -AFA Measure, relative to the counterfactual situation, 
causes a demand shift towards those producers that are unaffected by the measure and whose 
prices, as charged to the final consumers, are unaffected  after the application of the inconsistent 
measure (assuming, of course, that the affected exporters' CVD rates woul d decrease in the 
counterfactual). In other words, when CVD rates rise on certain Canadian imports due to the 
application of the OFA -AFA Measure, unaffected Canadian exporters  would be expected to capture a 
portion of the business lost by the affected expo rters (hence, "offsetting effects"). This is relevant 
for the sake of this arbitration  proceeding  because the level of NI is measured with respect to all 
Canadian exports of the relevant product, not just exports by affected Canadian companies.  
7.35.   Against that background, we recall that Canada  initially proposed the following execution of 
its formula. For a given CVD order, Canada first multiplies the value of affected imports with duty 
rate changes for each Canadian company subject to an individual ly calculated CVD rate affected by 
the OFA -AFA Measure and to a group of companies subject to an all -others rate affected by the 
OFA-AFA Measure separately and sequentially. The final level of NI would be the sum of those 
products times the scaling factor.329 
7.36.   The Arbitrator notes that due to the multiplicative form of Canada's formula, it is irrelevant 
for the computation of the level of NI whether the formula is applied to company -specific values of 
imports and duty -rate changes separately and sequentially (when multiplied with the scaling factor), 
 
328 United  States' comments on Canada's response to Arbitrator question No. 248, para. 177.  
329 Canada's written submission, paras. 120 -122. WT/DS505/ARB  
 
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or whether the product of value of imports and duty -rate changes is first aggregated and then 
multiplied with the scaling factor.  
7.37.   The United States, noting the basic struct ure of Canada's formula,  argues that "the model 
must simultaneously estimate the effects of moving from a scenario where there are rates 
determined using the challenged measure to a counterfactual scenario in which all affected rates 
have been amended".330 According to the United  States, this simultaneous estimation will properly 
take into account "shifts in imports across all Canadian varieties … as well as between domestic 
supply and imports from the rest of the world", i.e. offsetting effects.331 The Canad ian formula, 
according to the United  States, cannot take such shifts into account due to its limited number of 
varieties and thus cannot yield a reasoned estimate of a level of NI.332 
7.38.   Canada  responds that the United  States' argument  that the model "must 'si multaneously' 
estimate the effects of removing the OFA -AFA measure from all affected groups of exporters" is 
predicated on a "questionable assumption", i.e. that information on the value of imports from 
unaffected Canadian exporters will be available in th e future.333 Canada claims that its model can 
provide consistent and reasonable results with only the value of imports being available from affected 
Canadian producers, and regardless of whether the model is applied multiple times (e.g. twice: once 
for an i ndividually investigated company and once for a group of exporters subject to an all -others 
rate) or applying the formula once, using "complete information for all imports" and "a weighted 
average change in duty attributed to the OFA -AFA Measure over all s ubject [i.e. investigated and 
subject to an all -others rate ] imports".334 Canada claims that the model  proposed by the 
United  States  would reach the same results in a given instance, however it would be  in a much more 
complicated manner.335 
7.39.   Canada further rejects  the United  States' argument that "Canada's methodology fails to 
account for the offsetting changes in demand among different 'varieties' of Canadian imports 
resulting from the removal of the OFA -AFA measure", and in particular how un affected Canadian 
exporters would likely capture some of the market share lost by affected Canadian exporters.336 
According to Canada, such offsetting changes in demand are taken into account by the fact that the 
Canadian market share 𝜃𝐶𝐴 in the scaling factor (see equation (1) in paragraph 7.4, above) is derived 
"using the market share of all Canadian imports (not just the imports affected by the 
OFA-AFA measure)".337 In Canada's view, mechanically, the market share calculated using all 
Canadian imports is larger than, or at minimum equal to, the market share calculated using only the 
affected Canadian imports.338 According to Canada , this implies a sma ller scaling factor when the 
market share is based on all Canadian imports than when the market share is based on just the 
affected Canadian imports.339 Canada concludes that this, in turn, "precisely captures the offsetting 
increase in value of imports ass ociated with Canadian exporters who are not affected by the 
OFA-AFA measure".340 
7.40.   In support of its arguments in this context, Canada  further claims that the  level of  NI 
calculated using Canada's methodology would be equal – "[p]rovided the elasticities of d emand, 
supply, and substitution are consistent across the two models" – to the level of NI that would be 
calculated in a "linearized three -variety model that uses the market share of each variety, where 
the three varieties are: (1) the U.S. domestic variet y; (2)  Canadian imports affected by the 
OFA-AFA measure; and (3) Canadian imports unaffected by the OFA -AFA measure ", and the level of 
 
330 United  States' written submission, para. 85.  
331 United  States' written submission, para. 86.  
332 United  States' written submission, paras. 84 -85. 
333 Canada's written submission, para. 118. Canada later accepted that the value of the imports from 
unaffected Canadian producers would be available through US Customs data but is not verifiable by Canada. 
See section 8.1.1.2 below.  Canada, however, continued to have reservations about the availability of import 
data from unaffected Canadian producers in the absence of US Customs data. See section 7.8.1.2.5  below.  
334 Canada's written submission, para. 124 . See also  written submission, paras. 118 -123; response to 
Arbitrator question No.  89(b) -(c), para. 208.  
335 Canada's written submission, para. 125; response to Arbitrator question No. 42, para. 85.  
336 Canada's written submission, para. 126. 
337 Canada's written submission, para. 128; response to Arbitrator question No. 41, para. 80.  
338 Canada's response to Arbitrato r question No. 41, para. 78.  
339 Canada's response to Arbitrator question No. 41, para. 79 ("the magnitude of the scaling factor in 
the model decreases as the market share 𝜃𝐶𝐴 increases"). Mathematically, this is indeed the case.  
340 Canada's response to Arbitrator question No. 41, para. 81. WT/DS505/ARB  
 
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  NI can be calculated as "the sum of the changes in the values of imports experienced by the two 
groups of Canadian export ers".341 
7.41.   The United  States responds that, under  Canada's approach, the market share in the scaling 
factor, which uses total Canadian imports, could be larger or smaller than "a subject variety's actual 
market share".342 Such errors, in the United  States' view, would understate or overstate the size of 
the US market, and therefore also underestimate or overestimate the level of NI.343 The 
United  States also contends that, although, in theory, "a model that treats subject and non -subject 
Canadian exporters as separate varieties would account for some of the  offsetting effects of the 
challenged measure"344, the three -variety version of Canada's model described by Canada345 would 
not be suitable to calculate a level of NI, because it does not include a different supply elasticity of 
imported and domestically -produced varieties, and because it is linearized.346 
7.42.   The United  States also examines Canada's proof of equivalence347, arguing that the proof 
cannot demonstrate the capability of Canada's formula to take offsetting effects into account.348 In 
particular, the Uni ted States argues that: (a) the proof shows only equivalence between two 
log-linearized Armington models and not between their underlying non -linear Armington models349; 
and (b) Canadian market shares as defined in the proof of equivalence are not going to be used in 
Canada's proposed formula.350 
7.43.   Canada rejects the United States' criticisms of Canada's proof of equivalence .351 Canada 
stresses that it does not claim that its proof would demonstrate equivalence between a non -linear 
two-varieties and a non -linear three -varieties Armington model. Rather, this proof would hold within 
the class of log -linearized Armington models.352 Canada reiterates that the relevant market share 
parameter is "the share of imports from Canada in the U.S. market for the product".353 Hence, 
according to Canada, the market share parameter is irrespective of the market share of affected 
imports.  
7.44.   The Arbitr ator recalls that the disagreement between the parties in this context is whether 
the Canadian formula is able to take offsetting effects into account. In addressing this disagreement, 
we consider that a critical observation is that the scaling factor  in Canada's formula , an element of 
which is  the market -share parameter, remains constant whatever the share of affected Canadian 
imports  is vis-à-vis total (affected and unaffected) Canadian imports . This appears a shortcoming of 
the Canadian formula in this context, illustrated by the following example . Consider a Scenario 1  in 
which all Canadian exporters of a given product were subject to the same reference period duty 
rates, the same factual and WTO-inconsistent duty rates moving forward f rom the trig gering event, 
and would all exhibit the same change -in-duty rate. In that case,  no relevant offsetting effects can 
be expected. Consider a Scenario 2 in which all Canadian exporters were subject to the same 
reference period CVD rates as in Scenario 1, but only some of them are affected by the 
OFA-AFA Measure, and further assume that the affected companies would experience the same 
change -in-duty rate as was the case in Scenario 1 . In this case, offsetting effects can be expected 
to occur. Notice, however, t hat the only value that would change when Canada runs its model 
between  the two scenarios described is the vimp; the scaling factor and change of duty rate stay 
 
341 Canada's response to Arbitrator question No. 41, para. 83. See also Canada's response to Arbitrator 
question No. 141, para. 92; Proof of Equivalence ( Exhibit  CAN-105). The proof to this claim pr ovided by 
Canada to the Arbitrator can be summarized as follows: first, Canada adds the set of equations from which its 
proposed formula is derived one additional supply and demand function . Thereby, the model captures three 
varieties. Second, Canada analy tically solves this model in its log -linearized version. Third, it shows after some 
simplifications that the same formula for the calculation of the level of NI can be derived in this setting as in 
the two -variety case.  
342 United  States' response to Arbitra tor question No. 47, para. 137.  
343 United  States' response to Arbitrator question No. 47, paras. 137 -138. 
344 United  States' response to Arbitrator question No. 143, para. 39. 
345 Canada's response to Arbitrator question No. 41, para. 83. 
346 United  States' respo nse to Arbitrator question No. 143, paras. 39 -41. 
347 See Exhibit  CAN-105. 
348 United  States' response to Arbitrator question No. 199, paras. 48 -60. 
349 United  States' response to Arbitrator question No. 199, para. 50.  
350 United  States' response to Arbitrator question No. 199, para. 52.  
351 Canada's comments to United  States' response to Arbitrator question No. 199, paras. 30 -36. 
352 Canada's comments to United  States' response to Arbitrator question No. 199, para. 31.  
353 Canada's comments to United  State s' response to Arbitrator question No. 199, para. 33  (quoting 
Canada's methodology report, para. 28 ). WT/DS505/ARB  
 
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constant. We see no convincing rationale as to why a decrease in the affected vimp alone as bet ween 
the two scenarios somehow captures demand shifts occurring as between affected an d unaffected 
exporters in the second scenario , as the vimp is sensitive to nothing more than the simple observed 
value of imports from affected producers during a reference period.  Further, because the scaling 
factor is static, it cannot react differently to such different situations. This appears a compelling 
illustration to us that  Canada's proposed formula does not seem to be able to adequately account 
for offsetting effect s. Moreover, t he fact that the level of NI is determined regardless of whether the 
formula is applied separately and sequentially for affect ed imports or all at once for all affected 
imports  further  suggests to us that Canada's model treats differential situations as one and the 
same.  
7.45.   Despite  extensive discussion s during the proceeding, and despite having provided both parties 
several opportun ities to clarify their position on this issue, in our view , Canada failed to reasonably 
dispel doubts regarding its model's capability to take offsetting effects into account.  In particular, 
Canada's main argument rests on a so -called "proof of equivalence "354 that is meant to demonstrate 
that a three -varieties model separating between affected and unaffected Canadian imports does not 
provide different results than the two -varieties Armington model proposed by Canada with no such 
separation. In the Arbitrato r's view, a separation of total Canadian imports based on tariff treatment 
resulting from the application of  the OFA -AFA Measure is necessary to account for offsetting effects. 
However, t he Arbitrator notes that, in this formal proof,  Canada  establishes "equivalence" only 
between the original log-linearized model and a log-linearized model with a separation between 
affected and unaffected Canadian imports, rather than a general non -linear Armington model  
(see sections 7.1.2.1  and 7.1.2.2 , above, describing inherent shortcomings of  log-linearized 
Armington models ). The three -varieties version of Canada's model also results in a pre -determined 
scaling factor that is unable to treat differential situations as outlined in paragraph  7.44, above,  
differe ntly. For these reasons,  we consider Canada's overall argument on this score  weak.  
7.46.   The arguments brought forward by the United  States to the effect that Canada's formula does 
not take offsetting effects adequately into account are consistent and appear convincing. We 
consider that the method of log -linearization of the model around its e quilibrium essentially rules 
out taking offsetting effects into account. Provided such a model solution, market shares are fixed 
by construction to their equilibrium values and cannot adjust endogenously.  
7.47.   In light of the for egoing , the Arbitrator concludes  that Canada's formula is not capable of 
adequately taking offsetting effects adequately into account.  
7.1.2.4   Pre-determination of the market -share parameter  
7.48.   As part of the scaling factor in Canada's model, a parameter measuring the market share of 
Canadian expor ts in the US sales denoted as 𝜃𝑐𝑎 is factor ed in. The Canadian market share is 
represented as a decimal, for example,  𝜃𝑐𝑎=0.3 means that all Canadian exporters of a given product 
hold a market share of 30 % in total US sales. A s discussed in the prece ding s ection, this share is 
constant irrespective of whether or not exporters are affected by the OFA -AFA Measure.  We also 
note that, upon inspection of the scaling factor in paragraph 7.4, above , the relationship between 
𝜃𝑐𝑎 and the scaling factor is linear.  
7.49.   By way of background, the Arbitrator notes that , in Canada's model,  the larger Canada's 
market share 𝜃𝑐𝑎, the small er the estimated level on NI. Hence, overstating 𝜃𝑐𝑎 leads to an 
underestimation of the level of NI and understating 𝜃𝑐𝑎 leads to an overestimation of the level o f NI. 
This is because the scaling factor  (which is negative355) is increasing in  𝜃𝑐𝑎 (i.e. the larger 𝜃𝑐𝑎 the 
 
354 Exhibit CAN -105. 
355 See figures 2 and 3 in Canada's methodology report . WT/DS505/ARB  
 
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  less negative the scaling factor becomes)356, and the level of NI decreases the closer the scaling 
factor is to zero.357 
According to Canada, the market -share parameter  𝜃𝑐𝑎 has a "less direct impact on the 
calculated level  of [NI]".358 Canada later clarifies that the estimated level of NI does not react 
linearly, i.e. directly proportionately, to changes in 𝜃𝑐𝑎 as it would be the case for changes of the 
value of affected imports.359 To calculate the market shares parameter s, Canada proposes to use 
market -share information from the United States Bureau of Economic Analysis (BEA) input-output 
(I-O) tables for 2018.360 Using these tables, import shares in US consumption can be calculated and, 
in conjunction with US Census import data, shares of Canadian  imports in US consumption can be 
derived.361 These data cover 71 economic sectors, of which only a subset represents goods 
sectors.362 
7.51.   The United  States objects to Canada's  approach on the following grounds : (a) market -share 
parameters are "based on broad categories instead of the product itself"; (b) market -share 
parameters are not calculated taking the share of affected  products into account; and (c) for the 
sake of consistency and accuracy, market -share parameters should be calculated based on the same 
year for which import data are sourced , i.e. from the reference period .363 
7.52.   The Arbitrator notes that , with respect to  argument (a) made by the United States described 
immediately above , Canada contends that the "use of parameters based on broader product 
grouping is reasonable under the circumstances of this case", and is  a natural consequence of using 
pre-determined scaling factors.364 This is so, in Canada's view, because some level of aggregation 
and generality is needed in constructing scaling factors, as the products to which the formula will be 
applied are presently unknown.365 More specifically, and relying on the statements made b y the 
arbitrator in US – Washing Machines  (Article 22.6 – US)366, Canada claims that "no uniform 
third-party sources can be prescribed that could provide parameters at the same level of product 
categories for yet unidentified products."367 This point (that s ome limitations will necessarily occur 
due to data availability ), however,  is discussed in greater detail in section s 7.2.2.2  and 8.1.1, below.  
We therefore do not address this general point further here.  
7.53.   With respect to argument (b) made by the United States described in paragraph  7.51, above, 
we note that this argument is closely related to the issue of offsetting effects, analysed  in section  
7.1.2.3 , above. We consider  therefore  that the Arbitrator has adequately addressed this argument , 
and we therefore do not further address it here.  
7.54.   Finally, with respect to argument (c)  made by the United States described in paragraph 7.51, 
above,  the Arbitrator asked Canada whether it would be appropriate to source market shares from 
more recent BEA I -O tables .368 In response , Canada objects  to "adjusting sectoral market shares 
with updated information after this proceeding ", because, according to Canada,  "it would entail 
 
356 The first derivative of the scaling factor in Canada's formula with respect to 𝜃𝑐𝑎 is 𝜕 𝑆𝐶𝐹
𝜕 𝜃𝑐𝑎 = 𝜂(𝜂+1)(𝜎+𝜀)
(𝜂−𝜀)(𝜂+𝜎). 
Note that 𝜂 and 𝜎 are strictly positive and 𝜀 is strictly negative. The entire expression is therefore positive as 
long as 𝜎>|𝜀| and 𝜂>|𝜀|, which is always the case in the parameter space that Canada suggests  (see Canada's 
methodology report, Figure 2). This shows that larger values of 𝜃𝑐𝑎 make the scaling factor less negative, 
i.e. closer to zero.  
357 Since  the level of  NI is equal to 𝑣𝑎𝑙𝑢𝑒  𝑜𝑓 𝑖𝑚𝑝𝑜𝑟𝑡𝑠  × ∆𝑑𝑢𝑡𝑦  ×𝑠𝑐𝑎𝑙𝑖𝑛𝑔  𝑓𝑎𝑐𝑡𝑜𝑟 , as the scaling factor 
becomes less negative, so does the level of NI.  
358 Canada's writt en submission, para. 157.  
359 Canada's response to Arbitrator question No. 71, para. 148.  
360 Source Data 1 ( Exhibit CAN -7). 
361 Canada's methodology paper, Appendix 2, para. 5.  
362 For instance, there is non -tradeable services sectors included as well as government activities. By its 
very nature, trade disputes can only address tradeable sectors.  
363 United  States' written submission, paras. 126 -128. 
364 Canada's written submission, par a. 136.  
365 Canada's written submission, para. 139.  
366 "A procedure applicable to all products requires a degree of aggregation" . (Decision by the Arbitrator, 
US – Washing Machines (Article 22.6 – US), para. 4.80).  
367 Canada's written submission, para. 138.  
368 Arbitrator question No. 72.  WT/DS505/ARB  
 
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changing or re -opening the calculation of the scaling  factors". Canada stresses that otherwise the 
formula would not be practical to implement and would not result in predictable outcomes.369 
7.55.   We agree  with Canada  that a pre -determination of market shares is indeed a natural 
consequence of establishing pre -determined scaling factors. However, the Arbitrator notes that it 
does not consider  that this issue is a material driver of model selection. Indeed, both parties' 
proposed models could use  model parameters using data available now or in the future; what is 
necessary is only that model parameters be determined. Moreover, we do not consider it necess ary, 
either theoretically or practically,  to establish pre -determined scaling factor s. The Arbitrator sees no 
reason to believe that Armington models that are solved  without a constant and pre -determined 
scaling factor are less practical to implement , or result  in less predictable outcomes , than Canada's 
proposed solution featuring a constant and pre -determined scaling factor . Moreover, in section 7.3, 
below,  the Arbitrator proposes an Armington model that, being solved exactly, does not feature a 
scaling factor, but, in our view, is both practical to implement and results in predictable ou tcomes.  
In addition, the Arbitrator  notes that, particularly concerning data with respect to market 
shares, it is plain to us that taking such data from  time periods  closer to the relevant triggering 
event would more accurately reflect the market situation  at the time of the triggering event than 
would pre -determined market shares . Hence, such future data would be leading to a more accurate 
estimation of the level of NI. In situations when such market shares have changed significantly over 
time, that effect  on the level of NI would be, in our view, material.  Using pre -determined market 
shares therefore inherently limits the accuracy of the model and represents, in our view, a weakness 
of the Canadian formula approach.370 
7.1.2.5   Implementation in two steps  
7.57.   Canada rep eatedly argues that Canada's  proposed methodology is simpler and more practical 
to implement compared to the United  States' proposed approach. In terms of the methodology's 
practical implementation, however, an essential issue regarding how to apply the Ca nadian formula  
could not be entirely resolved during the entire proceeding.  
7.58.   According to Canada, the formula in equation (1) would have to be run twice if the 
WTO-consistent  counterfactual CVD  rate differs from the reference period duty rate. Conversely, 
Canada claims that  a second model run would not be required in case the WTO -consistent  
counterfactual  CVD rate is equal to the reference period duty rate .371 The Arbitrator concurs with 
Canada t hat a second run of Canada's formula would not be required if 𝑡𝑟𝑒𝑓=𝑡𝑐𝑜𝑛, where 𝑡𝑟𝑒𝑓 is the 
reference period duty rate and 𝑡𝑐𝑜𝑛 is the WTO-consistent counterfactual CVD rate. The following 
discussion  will therefore only pertain to cases in w hich the reference period and the WTO -consistent 
counterfactual duty rates differ , in which case Canada suggests a two -step implementation of its 
proposed formula.  
7.59.   Canada claims that, in case the counterfactual  CVD ra te differs from the reference period duty 
rate, a two -step formula run would  account for  the trade decline Canada experience s "attributable 
to the increase in the duty from its counterfactual WTO -consistent level to its factual 
WTO-inconsistent level" .372 The difference between the two model runs would finally determine the 
level of NI.  The Arbitrator sought to clarify whether the use of two formula runs under Canada's 
methodology would mathematically simplify to the following  term373: 
𝑁𝐼=𝑣𝑖𝑚𝑝 ∗𝑆𝐶𝐹 ∗ (𝑡𝑖𝑛𝑐−𝑡𝑐𝑜𝑛)
1+𝑡𝑟𝑒𝑓, 
where 𝑡𝑖𝑛𝑐 is the WTO-inconsistent factual rate.  
 
369 Canada's response to Arbitrator question No. 72, para. 153.  
370 The Arbitrator that the above considerations do not necessarily apply to the same extent to all other 
model inputs. We consider it reasonable – as do both parties – that other parameters, such as certain 
elasticities, can be pre -determined.  
371 Canada's response to Arbitrator question No. 190, paras. 55 -56. 
372 Canada's response to Arbitrator question No. 79, fn 199  to para. 170 . 
373 Arbitrator question No. 127.  WT/DS505/ARB  
 
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  7.60.   Canada responds that this expression would only be applicable to a subset of potential cases 
depending on the relative magnitude of the three individual tariff rates , and in particular to cases in 
which 𝑡𝑐𝑜𝑛<𝑡𝑟𝑒𝑓<𝑡𝑖𝑛𝑐.374 Canada further argues that, in other cases  (𝑡𝑟𝑒𝑓<𝑡𝑐𝑜𝑛<𝑡𝑖𝑛𝑐, or 𝑡𝑐𝑜𝑛<𝑡𝑖𝑛𝑐<
𝑡𝑟𝑒𝑓) vimp in the second model run would have to be adjusted such that it corresponds to the out come 
of the first model run.375 
7.61.   Asked by the Arbitrator to further substantiate  the reason , the consequences , and the exact 
practical execution  of such a vimp adjustment, Canada argues that, in  a standard case described by  
tariff order 𝑡𝑟𝑒𝑓<𝑡𝑐𝑜𝑛<𝑡𝑖𝑛𝑐, calculations featuring a vimp adjustment  provide lower estimated levels 
of NI  than a calculation without such an adjustment . According to Canada, this would be more 
consistent with the log -linearized approach taken by Canada.376 Canada, how ever, does not specify 
how exactly such vimp adjustment would be implemented.  
7.62.   The United  States objects Canada's proposed vimp adjustment , arguing that it is not 
consistent across estimated scenarios. According to the United  States, t he different formula e 
proposed by Canada represent different counterfactual scenarios .377 By contrast, the United  States 
affirms that "the counterfactual evaluated by the model should be uniform across scenarios to avoid 
calculating nullification or impairment based on different definitions of what would constitute 
compliance".378 The United  States concludes that "Canada's multi -formula approach based on the 
relative magnitude of the duty rates cannot generate a reasoned estimate of nullification or 
impairment ".379 
7.63.   The Arb itrator understands that two runs  of Canada's formula  are required in order to isolate 
the negative trade effect that is associated with the inconsistent CVD rate , relative to the 
counterfactual WTO -consistent CVD rate,  except , as argued above,  in the case  of 𝑡𝑟𝑒𝑓=𝑡𝑐𝑜𝑛, in which 
a single model run would suffice . However,  and in particular,  we consider that  Canada has not 
provided  a clear  theoretical explanation as to why different formula e would have to be applied 
depending on different relative magnitudes of the three duty rates  and how  a vimp adjustment  in 
some cases  would be implemented . We note that Canada claims that the United  States' methodology 
would "essentially work the same way".380 While true on a basic theoretical ground,  we note that 
the Arbitrator  has a clear understanding that the United  States' proposed model  operates 
consistently a cross different relative magnitudes of the three duty rates. Conversely, the Arbitrator 
lacks s uch clear understanding in Canada's formula, even after having provided Canada several 
opportunities to clarify this point.  Thus, in our minds, Canada has left an ambiguity surrounding this 
methodological aspect of the Canadian formula . 
7.1.3   Conclusion  
7.64.   In sum, the Canadian formula approach displays key weaknesses. Specifically, and as 
discussed in the preceding sections, the Canadian formula approach introduces potentially a 
significant approximation error, can produce illogical and extreme results, uses pre -determined 
market shares which can inhibit the accuracy of the model, and does not adequately  take into 
 
374 Canada's response to Arbitrator question No. 127, para. 64.  
375 Canada's response to Arbitrator question No. 127, paras. 66 -70. 
376 Canada's response to Arb itrator question No. 190, para. 63; "Calculation in Response to Question 
No. 190" (Exhibit CAN -132).  
377 The United  States notes that in Canada's approach "one of three different formulas […] may be 
applied, depending on the relative magnitude of duty rates." (United  States' response to Arbitrator question 
No. 197, para. 28). Only the formula proposed in Arbitrator question No. 127, i.e. the formula that, according 
to Canada, applies if 𝑡𝑐𝑜𝑛<𝑡𝑟𝑒𝑓<𝑡𝑖𝑛𝑐, is, in the view of the United  States, o ne in which "the counterfactual [is] 
correctly represented" (United  States' response to Arbitrator question No. 197, para. 29). Conversely, the 
United  States argues that the formula proposed by Canada if 𝑡𝑟𝑒𝑓<𝑡𝑐𝑜𝑛<𝑡𝑖𝑛𝑐 "erroneously [focuses] on  the 
change from the counterfactual rate to the factual rate" (United  States' response to Arbitrator question 
No. 197, para. 30) , and that the formula proposed by Canada if 𝑡𝑐𝑜𝑛<𝑡𝑖𝑛𝑐<𝑡𝑟𝑒𝑓, while appropriately focusing on 
"the change from the fa ctual to the counterfactual rate", incorrectly implies that "Canada will be seeking a 
modification from the factual to counterfactual duty rate in a future period after the market has already 
adjusted to the actual rates" (United  States' response to Arbitr ator question No. 197, para. 31).  
378 United  States'  response to Arbitrator question No. 197, para.  26. 
379 United  States'  comments on Canada's response to Arbitrator question No. 190, para. 39.  
380 Canada's response to Arbitrator question No. 190, para. 54 . See also  Canada's comment s on the 
United  States' response to Arbitrator question No. 197, paras. 21 -22. The United  States, however, disagrees 
with this claim (United  States' comment on Canada's response to Arbitrator question No. 190, para. 36).  WT/DS505/ARB  
 
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account offsetting effects. Also, certain methodological aspects su rrounding the execution of the 
formula approach have not been clarified  to a sufficient extent . The Arbitrator concludes that these 
five issues , taken together , call into question the ability of Canada's proposed model to provide 
reason ed estimates of the level of NI. This being the case, we turn to examine the United States' 
proposed model.  
7.2  United  States' proposed model  
7.2.1   Overview  
7.65.   The United  States argues, in line with  Canada's statements on the same subject , that "[t]he 
appropriate methodology for determini ng the level of nullification or impairment is to evaluate the 
effects of duty rate changes in an Armington partial equilibrium model".381 The United  States, 
however, argues that the selected approach must allow for a more tailored case -by-case 
determinatio n of the level of NI382, rather than applying a "singular analytical framework to set a 
hypothetical future nullification or impairment".383 The United  States' originally proposed 
methodology is an Armington partial equilibrium model with the following main differences  as 
compared to Canada's methodology384: 
a. it includes at least five varieties: (i) domestic shipments; (ii) US imports from the rest of 
the world (RoW); and at least three Canadian varieties – (iii) one variety for each 
individually investigated and affected compan y; (iv) one variety for imports subject to an 
affected all -others rate; and (v) one variety for imp orts from unaffected Canadian 
companies385; 
b. it is solved simultaneously in its non -linear form (i.e. without log -linearizing the model's 
equations, see section 7.1.2.1 , above ) "without approximation error" using "appropriate 
mathematical software"386; and  
c. does not use pre -determined scaling factors, but instead uses  parameter values 
(i.e. elasticities and market shares ) with respect to a given product to  be determined in 
the future, essentially at the time of the triggering event  (although certain elasticities 
might be pre-determined) .387 
7.66.   As noted by the United  States, "[i]n its most basic form, an Armington partial equilibrium 
model requires three types o f information: (1) United  States' consumption (the value of imports and 
domestic shipments), (2) duty rates, and (3) parameter values (elasticity estimates and market 
share). As such, similar information is required to calculate nullification or impairment  following 
either party's approach".388 
7.67.   The five varieties approach proposed by the United  States has comparably steep data 
requirements with respect to the determination of the following five market shares:  
i. the share of total US  expenditure covered by domestic shipments;  
ii. the share of total US expenditure covered by Canadian imports from individually 
investigated and affected firms;  
iii. the share of total US expenditure covered by Canadian imports from firms subject to 
an affected all -others rate;  
 
381 United  States' written submission, para. 71.  
382 United  States' written submission, title of Section IV.C.  
383 United  States' w ritten submission, para. 66.  
384 The underlying equations of the Armington model proposed by the United  States are outlined in the 
United  States' written submission, Appendix 1.  
385 United  States' written submission, para. 76.  
386 United  States' written submissi on, para. 89.  
387 United  States' written submission, paras . 67 and 101 -106. 
388 United  States' written submission, para. 98.  WT/DS505/ARB  
 
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  iv. the share of total US  expenditure covered by Canadian imports from firms not subject 
to an affected CVD rate; and  
v. the share of total US  expenditure covered by imports from the RoW. 
7.68.   The relevant market shares are the ratio s between the respective shipments  or imports  and 
total market size. The latter is the sum of all product -specific shipments  or imports, ensuring that 
all market shares sum up 100 %. The United  States proposes that market shares  and the size of the 
US market  be calculated in the future, using future data.  The United  States proposes a tiered 
approach that, according to the United  States, would permit Canada to derive market share and 
market size parameters under all circumstances  (see discussion in section 8.1 .1, below ).389 
7.69.   Initially, the United  States provide d an input file as well as a computer code that can readily 
be used to solve the five varieties model by inserting parameter values and duty rate changes , with 
no need for Canada to conduct further calculat ions.390 In addition, in response to a question by the 
Arbitrator, the United  States provide d an input file as well as a computer code that are flexible 
enough to accommodate n varieties, i.e. that can be run with a yet unknown number of individually 
invest igated and affected firms.391 The computer codes are based on STATA, one of the most 
common software used by economists with which Canada has proven to be familiar.392 
7.2.2   Assessment  
7.70.   The Arbitrator notes that the model proposed by the United  States is identical to the model 
applied by the arbitrator in US – Anti-Dumping Methodologies (China) (Article 22.6 – US) for three 
out of 25 anti -dumping (AD) orders. In the part of the  US – Washing Machines (Article  22.6 – US) 
arbitration addressing  LRWs , specifically,  the Arbitrator adopted an Armington model solved in its 
non-linear form as well. In another recent arbitration, US – Countervailing Measures (China)  
(Article  22.6 – US), the arbitrator adopted an identical model to the one proposed by the 
United  States in this arbitration. We note, however, that in each of these three instances  the models 
were applied to determine  a singular numerical level of NI ex post . This retrospective approach 
allowed the arbitrators to veri fy existence, reliability, and plausibility of all input data. We face a 
different situation in that we must assess the viability of proposed models to be applied in the future . 
This entails additional  challenges.  
7.71.   According to the United  States, its propos ed model has two main strengths. First,  according 
to the United States,  there exists an inherent need to accommodate at least five varieties "because 
the total level of nullification or impairment is based on the change in total imports from Canada, 
not ju st the change in total imports from affected companies"  (i.e. the US model takes into account 
offsetting effects (see section 7.1.2.3 , above )).393 Second, the United States asserts that the 
numerical solution of the Armington model in its non -linear form "will avoid introducing 
approximation error".394 
7.72.   The Arbitrator recogni zes these strengths, which have not been challenged by Canada during 
the proceeding. We do note, however, w ith respect to the separation of Canadian varieties based on 
their tariff treatment,  Canada's view that such separation is "arbitrary" and "not suppor ted by 
economic principles".395 We disagree. Rather, such a separation is, according to the Arbitrator, 
necessary to adequately account for offsetting effects as described in section 7.1.2.3 , above .396 
Further, the separation between US domestic shipments and RoW imports as two independent 
unaffected varieties takes into account different supply reactions by domestic and foreign producers.  
Finally, althou gh it may be the case that the Armington model  in its original version  does not further 
separate varieties of goods based on tariff treatment (so long as parameter values are assigned to 
 
389 United  States' response to Arbitrator question No. 69, para. 190 , and No. 145, para. 47 . 
390 U.S. Solution and Computer Code for the Armington Partial Equilibrium Model  (Exhibit USA -1); 
Sample U.S. Model Data File ( Exhibit USA-11). 
391 U.S. Solution and Computer Code for N -variety model ( Exhibit USA -51); Data inputs for N -variety 
model ( Exhibit  USA-52); and the United  States' response to Arbitrator question No. 246, para. 230.  
392 See Canada's response to Arbitrator question No. 189, para. 47. Also , Canada provides STATA codes 
in Exhibit CAN -74; Exhibit CAN -102; and Exhibit CAN-140. 
393 United  States' written submission para. 76.  
394 United  States' written submission para. 77.  
395 Canada's written submission para. 113.  
396 United  States' written submission para. 74.  WT/DS505/ARB  
 
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such varieties in reasonable ways ), we discern no way in which such s eparation is somehow contrary 
to the key assumption or theory underlying Armington models , i.e. that different varieties of one 
and the same good constitute imperfect substitutes . It is, rather, simply an additional feature used 
in this specific context, w hich is further  based  on reasonable assumptions t o which  Canada does not 
object in principle, but only considers as of "secondary significance in calculating the level of 
nullification or impairment".397 
7.73.   During the course of this proceeding, Canada has rais ed other  objections to the methodology 
proposed by the United  States  beyond the objection to the separation of Canadian varieties based 
on their tariff treatment discussed in the paragraph immediately above.  These objections do not 
generally  concern  the ability of the US model to result in reasoned estimates for the determ ination 
of the level of NI per se . Rather, these objections focus on  the practicability to implement the model 
and the associated future burden for Canada , including related to future availability of necessary 
input data. Canada identifies the following main alleged issues with the US model, as proposed by 
the United  States : (a) the number of varieties is ex ante  unknown , implying an additional burden 
for Canada when executing the model; ( b) the proposal  to calculate granular market shares that will 
rely on  data that does not yet exist; ( c) the model may, particularly in the absence of pre -determined 
scaling factors, not result in predictable outcomes ; and (d) the US model requires as a discrete input 
the value of imports of unaffected exporters, which could  be difficult to obtain. The Arbitrator 
assesses each in turn . 
7.2.2.1   Unknown number of varieties  
7.74.   The United  States suggests an Armington model that accommodates at least five varieties. 
The exact number that will be necessary  is case -specific and ex ante  unknown , however,  "because 
there may be multiple varieties of the second category [individually in vestigated companies ]".398 
The United  States further argues that : 
It is essential to distinguish among the subject imports from Canada because in a model 
with imperfect substitution, when duty rates on Canadian imports are reduced, the 
market price of the corresponding varieties falls and the supply of each variety 
increases. […] Importantly, the increase in demand for each individual subject Canadian 
variety will depend not only on the magnitude of the reduction in their own duty rate, 
but also on the magnitude of the reduction relative to other subject Canadian varietie s. 
Similarly, if the duty rates on Canadian imports increase, the impact of the rate increase 
would affect all varieties.399 
7.75.   Therefore, the United  States considers it "more appropriate to use an Armington -based partial 
equilibrium model that has the capacit y to capture multiple varieties of the subject imports from 
Canada. Multiple varieties of subject Canadian imports are necessary because the challenged 
measure is a company -specific determination".400 
7.76.   Canada objects to the United States' approach, asserting  that "accounting for the unknown 
'varieties ' of Canadian imports, the U.S. model requires significantly more sources of currently 
unknown and unverifiable inputs". Moreover,  according to Canada , "[t]he number of currently 
undefined inputs increases the po tential of future dispute". Canada further argues that "a currently 
knowable effect , similar to Canada's scaling factor " of the United  States' approach is not apparent.  
All in all, Canada considers  the United  States' model "impractical to implement".401 
7.77.   Canada indicates that it would have "the technical expertise to adjust and execute program 
codes to calculate a level of nullification or impairment". However,  Canada also indicates that  the 
practical implementation depends "on the number of varieties Canada will need to account for in the 
final model, and whether Canada has access to the necessary information to calibrate the model".402 
 
397 Canada's written submission para. 152.  
398 United  States' written submission para. 73.  
399 United  States' written submission p ara. 74.  
400 United  States' written submission para. 75. 
401 Canada's response to Arbitrator question No. 38, para. 72 (referring to Canada's written submission, 
paras. 104 -107).  
402 Canada's response to Arbitrator question No. 189, para. 47.  WT/DS505/ARB  
 
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  Therefore, Canada would have to calculate market shares and duty rate changes for every single 
individually investigated and affected company.  
7.78.   The latter point raised by Canada carries some weight. The Arbitrator refers  to 
Softwood  Lumber , a previous US CVD order on Canadian exporters that both parties referred to 
several times during the proceeding,  in particular in discussions surrounding Exhibit USA -48 
(see section 7.1.2.1 , above ). The Arbitrator notes that the number of varieties in fact can b ecome 
large:  as shown in Exhibit  CAN-127403, in Softwood Lumber , already in the original investigation  five 
Canadian  companies were individually investigated . If, by chance, in another investigation the 
USDOC individually investigated five companies and all  are affected by the OFA -AFA Measure , then 
implementing the model proposed by the United States to compute the  level of  NI stemming from 
the application of the OFA -AFA Measure  would, therefore, require a number of varieties equal to 
nine. 
7.79.   The Arbitrator also notes  Canada's former point that Canada possesses  the relevant technical 
expertise to adjust STATA codes and input files. Moreover, the Arbitrator recogni zes the 
United  States'  provision of a STATA co de and input files capable to accommodate a  potentially large 
number of varieties.  In our view, the main issue in this context is  not the potential problems that 
Canada might face when collecting data to compute market shares of potentially several varieti es 
(an issue that we discuss in section 8.1.1 , below ). The main issue , in our view,  is the ex ante  
uncertainty regarding exactly how many varieties to  consider in each application of the model 
following a triggering event . If Canada had to employ the US model to compute the level of NI, 
under the United States' approach, as a preliminary step, Canada would need to make a 
determination of the number of v arieties to be included and make further subsequent adjustment s 
to the STATA code. Although we understand that Canada could perform such steps, we consider that 
they would still impose additional burden s on Canada . 
7.80.   Further below, however, we note that we believe  there is a way  to alleviate these concerns in 
the framework of an exactly solved Armington model that includes  four varieties: US domestic 
shipments, affected Canadian imports, unaffected Canadian imports, an d RoW imports. This 
four-varieties version of the United States' model  is discussed in section  7.3, below . 
7.2.2.2   Determination of market shares and market size in the future  
7.81.   With respect to the determination of product -level market shares  and the size of the 
US market , Canada repeatedly asserts that such determination should be done based on currently 
available data (see discussion of the determination of 𝜃𝐶𝐴 in Canada's scaling factor in section 7.1.2.4  
above ), and not on future data. The Arbitrator earlier concluded that  it is a reasonable assumption 
that relevant market shares are likely to change over time404, and should not, therefore, be 
determined ex ante . To accurately reflect market conditions going forward from the triggering event, 
market share  and market size  information should be accessed from a reference period  which will 
occur in the future . We also note that in section 8.1.1, below, we detail procedures Canada can 
follow to determine relevant market shares in the future in what we regard to be a practical manner.  
7.2.2.3   Unpredictability of model outcomes  
7.82.   Canada argues on various occasions that the model proposed by the United  States would not 
result in predictable outcomes. This claim refers to, amongst other  things , the following issues 
already discussed above:  the non -linear solution of the model (see section  7.1.2.1 , above ), the 
absence of a pre-determined scaling factor (see  section  7.1.2.4 , above ), and the yet unknown 
market share and market size parameters to be incorporated in to the US model  (see section  7.2.2.2 , 
above ).405 
7.83.   The United  States addresses Canada's claim of the absence of predictability only insofar as 
the pre -determination of data sources is affected. According to the United  States, no parameter 
value or other model input value except for the import supply elasticity should be pre -determined. 
Instead, in the United States'  view, the Arbitrator should provide instructions on data sources from 
 
403 "Softwood Lumber from Canada - Countervailing Duty Rates Potentially in Place by The End of the 
Third Administrative Review" (Exhibit CAN -127).  
404 See section  7.1.2.4 , above.  
405 Canada's response to Arbitrator question No. 42, para. 86.  WT/DS505/ARB  
 
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which the respective values should be taken in the future. This alone , according to the United States,  
provides predictability.406 
7.84.   The Arbitrator views predictability as reasonably satis fied if: (a) the structural form of the 
model is sufficiently defined; ( b) parameter values that are unlikely to change over time are 
pre-determined (e.g. elasticities); and ( c) the sources of data inputs that are likely to change over 
time, or are subject  to future decisions , are sufficiently precisely specified such that they can be 
accessed under any event.  In our view, the model provided by the United States has a well -define d 
structural form, can accommodate relevant  pre-determined  parameters, and can accommodate 
future inputs. We therefore conclude that the outcomes of such model are reasonably predictable.  
7.2.2.4   Determination of imports from unaffected exporters  
7.85.   Canada stresses that, under the US model, data on import values from unaffected Canadian 
exporters would have to be collected, an input not needed under Canada's methodology. Canada 
recogni zes that it will usually be able to identify shipments of unaffected exporters based on data 
provided by US Customs.407 However, Canada questions whether it could verify such data, or obtain 
unaffected exporters' data in the absence of US Customs data, since unaffected Canadian exporters 
may have no incentive to cooperate and share their US sales data voluntarily  with the Canadian 
government .408 The Arbitrator recogni zes the relevance of this issue, which is addressed in section 
8.1.1.2.1.5 , below . As explained in that section, while Canada's  viewpoint that there may be certain 
issues with obtaining unaffected companies' values of imports, these issues carry limited weight 
because, i n our view, Canada has reasonable means available to obtain and/or verify values of 
imports from unaffected expo rters.409 We therefore do not consider this issue to materially weigh on 
the issue of model selection.  
7.2.3   Conclusion  
7.86.   In sum, t he Arbitrator  considers  that the model  proposed by the United  States  offers 
significant strengths  vis-à-vis the Canadian formula . In particular, its exact solution avoids 
approximation errors  and extreme results , and its  separation of Canadian imports based on tariff 
treatment allows  taking offsetting effects adequately  into account.  The key weaknesses identified in 
Canada's model are thus absent from  the United States' proposed model.  With respect to potential 
shortcomings of the United States' model that Canada has alleged , the Arbitrator notes that the 
issue of using an ex ante  unknown numb er of varieties has certain weight , but, as discussed in the 
following section, can be overcome with a simple adjustment to the US model of using a fixed 
four-variety model . The Arbitrator further notes that other objections raised by Canada ( i.e. that 
determining market shares in the future is unreasonable , that the model does not provide predictable 
results, and it is unreasonable to require the use of values of imports from unaffected exporters)  
are unconvincing . 
7.87.   The Arbitrator thus concludes that the US model is superior to Canada's formula because it 
relies on the best information available with which to estimate level of NI. In particular, the 
calculation of market shares using future data that is separated into multiple varieties based on tariff 
treatment, and then manipulated with computer software in a sophisticated manner, carries distinct 
advantages. Moreover, in our opinion, future market shares can be calculated in a reasonabl y 
practical  manner. The Arbitrator therefore selects the United States'  model, with one minor 
modification, i.e. using  a version of the US model in which the number of varieties is ex ante  known, 
and equal to four.  We describe this modified US model in the following section.  
7.3  Selected methodology : four -varieties Armington mode l 
7.88.   In the section immediately above, the Arbitrator decided to adopt a version of the US model 
with which Canada will estimate levels of NI after a triggering event. The Arbitrator considers that a 
reasonable modification to the US model would be to use a version that relies not on an unknown 
 
406 United  States' written submission, paras. 67 and 101 -106. 
407 See section 8.1.1.2.1 , below.  
408 Canada's response to Arbitrator question No. 87, paras. 202 -203. 
409 Related to the issue of determining the value of unaffected imports is the issue of whether Canada is 
able to collect relevant information on relevant  duty rates applying to unaffected Can adian companies . The 
Arbitrator is aware of this concern, which is addressed in greater detail in section 8.1.2 , below .  WT/DS505/ARB  
 
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  ex ante number of varieties, but on a fixed number of varieties totalling four. T he Arbitrator had 
asked both parties to provide comments on a version of the Armington model proposed by the 
United  States featuring exactly four varieties, i.e. US domestic shipments, affected Canadian 
imports, unaffected Canadian imports, and RoW imports. Thereby, imports from all affected 
companies w ould be grouped together as a single variety, without regard to other aspects of the 
CVDs assigned to them. The same would go for unaffected companies.  
7.89.   In response to this Arbitrator proposal, t he United  States continue d to advocate its approach 
with an ex ante unknown number of varieties and contends that the Arbitrator's suggestion is a 
"simplification [that] would induce some loss of precision", a loss which "would be larger to the 
extent that duty rates varied across affected companies" .410 Notwithstandi ng this, the United  States 
provides practical suggestions on the implementation of such a four -varieties model, i.e. that the 
duty rate changes of the affected variety could be "proxied by trade -weighted averages of affected 
companies' for year-prior duty rates, duty rates with the challenged measure, and duty rates without 
the challenged measure".411 In this respect, the Arbitrator notes that similar calculations would be 
equally necessary under Canada's suggested methodology.  
7.90.   Canada object ed to the Arbitra tor proposal  because, in its view,  "[g]rouping imports from 
Canadian producers subject to different duty rates together as one variety in the context of the 
United  States' model would violate one of the already flawed premises upon which the United  States'  
model is based".412 
7.91.   The Arbitrator accepts the United States' proposition as true that using a fixed four -variety 
version of the US model would come at the cost of some precision.413 However, we consider that the 
benefit of this approach, i.e. lessening the  burden on Canada in running the model  (see paragraph 
7.78 above , noting such burdens ), on balance, outweighs the United States' concern. Regarding 
Canada's objection, we consider that the thrust of Canada's comments on this score have already 
been adequat ely addressed in other sections above, most notably in section 7.1.2.3 , discussing key 
benefits of separating affected versus unaffected Canadian exports into two different varieties. 
Therefore, we conclude that a modification of the US model that limits the tota l number of varieties 
to exactly four – one variety for US domestic shipments, one for affected Canadian imports, one for 
unaffected Canadian imports, and one for RoW imports – would provide an appropriate framework 
to determine a reasoned estimate for the  level of NI without unreasonable burden for Canada.414 
7.92.   Having now selected  a four -varieties version of the US model, we now proceed  to describe 
more precisely the structure of that model .415 The Arbitrator thus determines that a four -varieties 
Armington mod el described by the following equations and solved by a computer software  shall be 
applied by Canada to determine the level of NI .416 
7.93.   Total US demand for a given product takes the form:  
𝐸=𝑌×𝑃𝜀 
 
where the term 𝐸 represents expenditure on domestic and imported varieties of the product, 𝑃 is an 
Armington Constant Elasticity of Substitution price index, 𝑌 represents total US expenditure on the 
product if  𝑃=1, and 𝜀 is the price elasticity of demand in the United  States. The price index 𝑃 is 
defined  as: 
 
410 United  States' response to Arbitrator question No. 132, para. 25.  
411 United  States' response to Arbitrator question No. 132, para. 26.  
412 Canada's response to Arbitrator question No. 1 29, para. 73.  
413 United States ' response to Arbitrator question No. 132, para. 25.  
414 The question arises whether and how Canada will be able to determine imports from unaffected 
Canadian exporters. This question is addressed in  section 8.1.1.2 , below . 
415 Minor modifications to the model proposed by the United States, in particular with reference to how 
the model is implemented, will also be considered that could  reduce other relevant burden s on Canada in other 
sections . See in particula r section 8.2, below . 
416 Both parties have submitted the equations describing their respective Armington model (see 
Canada's  methodology report, equations (A1) -(A6) in Appendix 1 ; United  States' written submission, equations 
(1)-(12) in Appendix 1 ). The Arbitrator closely follows the notation in Appendix I of the United  States' written 
submission.  WT/DS505/ARB  
 
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𝑃=(𝛾𝑈𝑆𝜎×𝑝𝑈𝑆1−𝜎+𝛾𝐶𝐴𝐴𝜎×𝑝𝐶𝐴𝐴1−𝜎+𝛾𝐶𝐴𝑁𝜎×𝑝𝐶𝐴𝑁1−𝜎+𝛾𝑅𝑂𝑊𝜎×𝑝𝑅𝑂𝑊1−𝜎)1
1−𝜎 
 
where 𝛾𝑈𝑆, 𝛾𝐶𝐴𝐴, 𝛾𝐶𝐴𝑁, and 𝛾𝑅𝑂𝑊𝑆 are demand shif ters, 𝑝𝑈𝑆 is the US market price of the domestic 
variety, 𝑝𝐶𝐴𝐴, 𝑝𝐶𝐴𝑁 and 𝑝𝑅𝑂𝑊 are the US market prices (i.e. gross of duty price) of imported varieties, 
and 𝜎 is the constant elasticity of substitution between all varieties. Sub -indices 𝑈𝑆, 𝐶𝐴𝐴, 𝐶𝐴𝑁, and 
𝑅𝑂𝑊 denoted the four varieties US domestic shipments, affected Canadian imports, unaffected 
Canadian imports, and RoW imports, respectively.  
7.94.   Demand functions for the four varieties of the given product are defined as:  
𝑑𝑈𝑆=𝛾𝑈𝑆𝜎×(𝑃
𝑝𝑈𝑆)𝜎
×𝐸 
𝑑𝐶𝐴𝐴 =𝛾𝐶𝐴𝐴𝜎×(𝑃
𝑝𝐶𝐴𝐴)𝜎
×𝐸 
𝑑𝐶𝐴𝑁 =𝛾𝐶𝐴𝑁𝜎×(𝑃
𝑝𝐶𝐴𝑁)𝜎
×𝐸 
𝑑𝑅𝑂𝑊 =𝛾𝑅𝑂𝑊𝜎×(𝑃
𝑝𝑅𝑂𝑊)𝜎
×𝐸 
 
where  𝑑𝑈𝑆, 𝑑𝐶𝐴𝐴, 𝑑𝐶𝐴𝑁 and 𝑑𝑅𝑂𝑊 are the quantities demanded of domestic, affected Canadian, 
unaffected Canadian and R oW imported varieties, respectively.  
7.95.   Supply functions for the four varieties are defined as:  
𝑠𝑈𝑆= 𝛽𝑈𝑆(𝑝𝑈𝑆)𝜂𝑈𝑆 
𝑠𝐶𝐴𝐴 = 𝛽𝐶𝐴𝐴(𝑝𝐶𝐴𝐴
1+𝜏𝐶𝐴𝐴)𝜂𝐶𝐴𝐴
 
𝑠𝐶𝐴𝑁= 𝛽𝐶𝐴𝑁(𝑝𝐶𝐴𝑁)𝜂𝐶𝐴𝑁 
𝑠𝑅𝑂𝑊 = 𝛽𝑅𝑂𝑊 (𝑝𝑅𝑂𝑊 )𝜂𝑅𝑂𝑊 
 
where 𝜏𝐶𝐴𝐴 is the total ad valorem duty rate, inclusive countervailing duties applied to the affected 
variety 𝐶𝐴𝑁; 𝜂𝑈𝑆, 𝜂𝐶𝐴𝐴, 𝜂𝐶𝐴𝑁, and 𝜂𝑅𝑂𝑊  are the elasticities of sup ply of each variety; and 𝛽𝑈𝑆, 𝛽𝐶𝐴𝐴, 𝛽𝐶𝐴𝑁 
and 𝛽𝑅𝑂𝑊 are supply shifters.417 
7.96.   The ten equations in paragraphs 7. 93-7.95 above  characterize the equilibrium  with no excess 
demand  or excess supply . The model is solved by a price vector that ensures that supply equals 
demand on all four sub -markets. Trade effects resulting from changes in applied duties shall be 
quantified by standard comparative static exercises. Such trade effects ultimately determ ine the 
level of NI. Details on the sequencing of model runs are described in section 8.2, below . 
7.97.   The Arbitrator determines that Canada shall solve th is model in its non -linear form executing 
a STATA code provided by the Arbitrator (see Annex C -1 of the Addendum to this Decision, 
WT/DS505/ARB/Add.1) .418 The next section describe s the data inputs necessary to implement the 
methodology selected by the Arbi trator.  
8  IMPLEMENTATION OF THE SELECTED ARMINGTON MODEL  
8.1.  The model selected by the Arbitrator requires several input data for estimating the level of NI. 
These input data consist of parameter values with respect to market shares, market size, elasticities , 
and changes in duty rates. Section 8.1, below,  provides detailed instructions for determin ing these 
inputs. For the sake of convenience, an input file  provided by the Arbitrator (see Annex C -2 of the 
Addendum to this Decision, WT/DS505/ARB/Add.1)  incorporates additional calculations that 
automatically transform s all input values in to the format that the STATA code  (see Annex C -1 of the 
Addendum to this Decision, WT/DS505/ARB/Add.1)  requires as a source.  
 
417 In the Arbitrator's implementation of the selected methodology ( section 8.1.6 , below ), there will be 
only two elasticities of supply: the domestic supply elasticity for US supply, and the foreign supply elasticity for 
non-US supply. It will be assumed that 𝜂𝑈𝑆<𝜂𝐶𝐴𝐴=𝜂𝐶𝐴𝑁 =𝜂𝑅𝑂𝑊. 
418 The input file and the STATA code are b ased on Exhibits USA -1 and USA -11. WT/DS505/ARB  
 
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  8.2.  We also note that t he overal l methodology calculates the level of NI as the value of a trade 
decline between two situations, i.e. one with WTO-inconsistent  CVD rates  and one with  
WTO-consistent CVD rates . To accomplish this , the model must be run twice. It must be noted  that 
the inpu t file and STATA code provided by the Arbitrator consider this issue that will be explained in 
more detail in section 8.2, below . 
8.1  Data inputs  
8.3.  The Arbitrator provides an Excel spreadsheet (see Annex C -2 of the Addendum to this Decision, 
WT/DS505/ARB/Add.1)  to assist the parties , which  consists of two sheets. The first, called 
"Parameter  Input", is organized in 13 columns , and collect s all input d ata described in the paragraph 
immediately below. The second, called "Stata Input", uses the information of the former sheet, and 
applies some calculations with respect to market shares to provide readable input for the 
STATA  code. This sheet also re-organ izes the input such that STATA will automatically implement 
the calculation of NI in two steps (see section 8.2, below ). Canada would not need to make changes 
to this second sheet.  
8.4.  The content of the 13 columns of the first sheet , "Parameter  Input",  will be subject to the 
instructions provided below. Column s A and B represent price elasticities of supply, which will be 
pre-determin ed and remain static (see section 8.1.6 , below ). Column s C and D represent 
CVD-order -specific demand and substitution elasticities, which will be deri ved as described in 
sections 8.1.5 and 8.1.4, respectively . The US market share (Column E) as well as values of imports 
of affected Canadian companies (Column F), values of imports of unaffected Canadian companies 
(Column G), and values of imports originating from the RoW (Column H) , shall be calculated as 
described in section 8.1.1 , below . Finally, section 8.1.2, below,  provides instructions to fill in the 
remaining five columns (Columns I to M)  respectively with  duty rates in the reference period  for 
affected and unaffected Canadian companies,  factual  CVD rates  for affected  and unaffected Canadian 
companies , and counterfactual CVD rates  for affected Canadian companies . 
8.1.1   Market shares and market size  
8.5.  The model described in section 7.3, above , requires four market -share parameters, one for 
each of the four varieties, as well as a USD value for the US market size. As the market -share 
parameters are not linearly independent (i.e. they must sum to 100% ), the following four pieces of 
information are sufficient to determine the market shares and the market si ze parameters required 
as model inputs: (a) the share of US domestic shipments in domestic sales, 𝑚𝑈𝑆; (b) the value of 
affected Canadian imports; (c) the value of unaf fected Canadian imports; and (d) the value of 
imports from RoW. Based on these four inputs, the Excel file provided by the Arbitrator in the 
Addendum to this Decision (see Annex C -2 of the Addendum to this Decision, WT/DS505/ARB/Add.1)  
calculates the USD value for the market size as follows:  
𝑌=𝑎𝑓𝑓𝑒𝑐𝑡𝑒𝑑  𝐶𝑎𝑛𝑎𝑑𝑖𝑎𝑛  𝐼𝑚𝑝𝑜𝑟𝑡𝑠 +𝑢𝑛𝑎𝑓𝑓𝑒𝑐𝑡𝑒𝑑  𝐶𝑎𝑛𝑎𝑑𝑖𝑎𝑛  𝐼𝑚𝑝𝑜𝑟𝑡𝑠 +𝑅𝑜𝑊  𝐼𝑚𝑝𝑜𝑟𝑡𝑠
(1−𝑚𝑈𝑆) 
 
and the remaining market -share parameters as follows:  
  
𝑚𝐶𝐴𝐴 =𝑎𝑓𝑓𝑒𝑐𝑡𝑒𝑑  𝐶𝑎𝑛𝑎𝑑𝑖𝑎𝑛  𝐼𝑚𝑝𝑜𝑟𝑡𝑠
𝑌 
 
𝑚𝐶𝐴𝑁 =𝑢𝑛𝑎𝑓𝑓𝑒𝑐𝑡𝑒𝑑  𝐶𝑎𝑛𝑎𝑑𝑖𝑎𝑛  𝐼𝑚𝑝𝑜𝑟𝑡𝑠
𝑌 
 
𝑚𝑅𝑂𝑊 =𝑅𝑜𝑊  𝐼𝑚𝑝𝑜𝑟𝑡𝑠
𝑌 
 
8.6.  In the next four subsections, the Arbitrator describes the procedure s that Canada shall use to 
compute th e four inputs for market share and market size calculations, i.e. items (a) -(d) in the 
paragraph immediately above.  WT/DS505/ARB  
 
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8.1.1.1   Share of US domestic shipments  
8.7.  As an initial matter, the Arbitrator discusses the issue of 𝑚𝑈𝑆, which is the ratio of the value of 
domest ic shipments to US domestic consumption. For ease of analysis, this section proceeds in two 
steps. First, we evaluate the viability of relevant data sources for calculating 𝑚𝑈𝑆. Second, we provide 
instructions for Canada regarding how to calculate 𝑚𝑈𝑆 using the data sources selected in the 
previous step.  
8.1.1.1.1   Selection of data sources  
8.8.  With respect to determining 𝑚𝑈𝑆, the United  States  proposes to rely on product -level 
market -share information. According to the United  States, this information would be ga thered via a 
three -tiered approach, "in terms of priority, from the relevant [United States International Trade 
Commission (USITC) ] … report, industry/trade associations, and U.S. agency reported data. 
U.S. agency reported data would use the same sources that underlie the BEA I -O data, but on a 
more disaggregated basis, provided by USITC reports".419 Canada has proposed no specific data 
sources that could be used to calculate 𝑚𝑈𝑆. The Arbitrator proposed to the parties during the course 
of questions and responses that 71 -sector BEA I-O table data could also be used to calculate 𝑚𝑈𝑆. 
8.9.  This section therefore proceeds to first discuss t he United  States' three proposed data sources, 
i.e. Commission reports, data from unspecified industry/trade associations, and data that underlie 
BEA I-O tables. The section then discusses the Arbitrator's proposed use of BEA I-O table data.  
8.1.1.1.1.1   Commission rep orts 
8.10.   According to the United  States , USITC reports will contain data on the value of domestic 
shipments that could be used to calculate 𝑚𝑈𝑆, but the reports do not always publicly disclose  that 
data. In particular, "if [the data] include information from only one or two companies, […] or from 
three or more companies and one company accounts for at least 75 percent of the total or two 
companies account for at least 90 percent of the total", such information is not publicly available.420 
8.11.   Canada  therefore objects to the United  States ' proposal, arguing that USITC report data are 
"potentially unavailable, non -public, and non -verifiable data".421 After a review of the thirty  most 
recent  USITC injur y determinations, Canada asserts that "U.S. domestic shipment values were 
designated as public in only ten of the thirty most recent USITC injury determinations. Moreover, in 
three of those ten cases, the values for certain years were redacted."422 Canada f urther argues that 
the values of domestic shipments and US consumption in USITC reports, even when available, 
cannot be considered necessarily reliable, as they depend on the questionnaire responses received 
by the USITC , which  sometimes relies  on quantity -based rather than value -based data.423 
8.12.   The United  States  responds to Canada 's criticism, noting that its own review "still 
demonstrate[s] that 43 percent of the Commission's investigation determinations (that is, 48 of the 
111 determinations) publicly reported U.S. domestic shipment information".424 Therefore, according 
to the United  States "there is a likelihood that the U.S. domestic shipments could be obtained directly 
from the Commission report".425 
8.13.   Based on the information pr ovided by the parties, the Arbitrator notes that a significant 
fraction of future USITC reports ' data on domestic shipments would likely be confidential and thus 
unavailable to Canada. Moreover, in relation to some USDOC proceedings that could qualify as 
triggering events, the USITC does not publish accompanying reports and therefore, CVD 
 
419 United  States' response to Arbitrator question No. 74, para. 198, and No. 75, para. 200.  
420 United  States' response to Arbitrator question No. 261, para. 186  (referring to the United  States ' 
response to Arbitrator question No. 9, para. 42) . 
421 Canada's written submission, para. 153.  
422 Canada's response to Arbitrator question No. 256, para. 266 ; "Summary of Proprietary Treatments in 
Recent USITC Reports" ( Exhibit CAN -150). 
423 Canada's comments on the United  States' response to Arbitrator question No. 256, paras. 132  and 
134. 
424 United States'  comments on Canada's response to Arbitrator question No. 256, para. 208  
(referring  to Exhibit CAN -150; Table of USITC Investigation Determinations (Exhibit USA-54)). 
425 United States'  comments on Canada's response to Arbitrator question No. 256, para.  209; 
Exhibit  USA-54. WT/DS505/ARB  
 
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  order -specific information on 𝑚𝑈𝑆 is not gathered by the USITC at all .426 Due to such significant 
limitations on availability, the Arbitrator does not consider that USIT C reports present a viable source 
of information for US domestic shipments.  
8.1.1.1.1.2   Undefined industry/trade association data  
8.14.   The United  States  also proposes that the parties could "obtain industry estimates through the 
most relevant trade association or private s ector suppliers and consult on the use of the best 
information available". If the parties cannot reach agreement on the value of 𝑚𝑈𝑆 within 45 days, 
according to the United  States, Canada shall determine 𝑚𝑈𝑆 based on the third tier proposed by the 
United States (i.e. data underlying BEA I-O tables) .427 
8.15.   Canada  rejects the United  States ' proposal, mainly asserting that the United  States "cannot 
assure that […] information [from industry or trade associations] would be available".428 
8.16.   The Arbitrator agrees with Canada in this context that necessary and sufficient data on 
US domestic shipments from industry or trade associations might be unavailable in the future. 
Further, it remains unclear how the reliability of such data could reasona bly be guaranteed at this 
stage  and/or established in the future. With respect to the latter point, we further consider that this 
option has the potential to result in disagreement among the parties. Indeed, even were the parties 
to agree on a data source , the methodology of using  that source 's data for purposes of the chosen 
model could still be ambiguous and require complex data manipulations. In light of such issues, the 
Arbitrator considers that the use of undefined future sources of data is not a viabl e option.  
8.1.1.1.1.3   Data underlying BEA I-O tables  
8.17.   It will be recalled from section  7.1.2.4 , above,  that Canada  proposes to use market -share 
information from the BEA I-O tables for 2018 to calculate the market -share 𝜃𝐶𝐴 in Canada's proposed 
formula. These data cover 71 economic sectors.429 The United  States  proposes that Canada could 
use data underlying the BEA I-O table data to determine US domestic shipment s of a relevant 
product, noting that these data are available at a level more granular than the 71 BEA sectors.430 
8.18.   Canada  concurs that such data are, in principle, publicly available, but Canada initially 
responded that it is unaware "how such data would be  used to calculate consistent domestic 
absorption and input shares by detailed commodity as implied by the United  States".431 
8.19.   In response, the United  States  offered detailed instructions on how this can be accomplished 
with respect to three different types of products: (a) manufacturing products; (b) agricultural 
products; and (c) mining and energy products. We discuss each in turn.  
a. Manufacturing products  
8.20.   For manufacturing products (6 -digit NAICS codes falling under chapter s 31-33), the 
United  States suggest s using the United States'  Census Bureau's Annual Survey of Manufacturer s 
(ASM), which includes information on 364  6-digit NAICS codes (currently, 2017 NAICS 
classification).432 The United  States proposes to use data from the table entitled "Summary Statistics 
for Industry Groups and Industries in the United  States" for the reference year. The table provides 
information on total supply (column label led "Sales, value of shipments or revenue ($1,000) "). 
According to the United  States, an estimate for domestic shipments at the level of 6 -digit NAICS 
codes would be obtained by deducting the value of exports (sourced from US Census USA Trade 
Online) from this value of total supply. An est imate of total domestic consumption (i.e. value of the 
US market) at the level of 6 -digit NAICS codes would be obtained by adding total imports from the 
world (sourced from US Census USA Trade Online) to the corresponding estimate of domestic 
 
426 The United  States confirm s that the USITC only produces such reports in the context of 
investigations and sunset reviews  (United States ' response to Arbitrator question No. 45, para. 125).  
427 United  States response to Arbitrator question No. 69, para. 190.  
428 Canada's written submiss ion, para. 155.  
429 These include non -tradeable services sectors as well as government activities.  
430 United  States response to Arbitrator question No. 69, para. 190.  
431 Canada's response to Arbitrator question No. 142, para . 94. 
432 United  States' response to Arbitrator question No. 145 (f), para. 54.  WT/DS505/ARB  
 
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shipments. Ne xt, total domestic consumption and domestic shipment estimates, calculated at the 
level of 6 -digit NAICS codes, would be "concorded to the primary reference harmonized tariff 
schedule ( HTS) 10-digit codes referenced in the product scope description in the relevant CVD order 
pertaining to the relevant product", using concordance tables between the US HTS and 6 -digit 
NAICS  codes for imports.433 This will, in the United  States ' view, allow the assignment of a single 
value of total domestic consumption and domes tic shipments to each referenced 10 -digit HTS code. 
Based on these two values, the domestic market share of each HTS 10 -digit code 𝑗 in the CVD order 
will be  
𝑚𝑈𝑆 𝑗=𝑑𝑜𝑚𝑒𝑠𝑡𝑖𝑐  𝑠ℎ𝑖𝑝𝑚𝑒𝑛𝑡𝑠 𝑗
𝑡𝑜𝑡𝑎𝑙  𝑑𝑜𝑚𝑒𝑠𝑡𝑖𝑐  𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑗 
 
and the CVD order -specific  domestic market share 𝑚𝑈𝑆 will be constructed as  
𝑚𝑈𝑆=∑𝑚𝑈𝑆𝑗𝑀𝑗
∑𝑀𝑗 𝑗,
𝑗 
 
where 𝑀𝑗 is the corresponding import value (US imports from Canada) in HTS 10 -digit code j and 
∑𝑀𝑗𝐽
𝑗 is the total of all imports subject to  a CVD order. "434 
8.21.   Canada re iterates  its preference to calculate 𝑚𝑈𝑆 based on BEA I-O data, noting that the 
United  States' approach described in the above paragraph is more calculation -intensive, and that 
"products overlap between sources identified in the ASM and other data sources proposed by the 
U.S.", while "BEO I -O shares […] provide a consistent means to calculate market shares across all 
products."435 However, Canada considers that that the above -described approach by the 
United  State s is technically viable. According to Canada, " a NAICS categorization -level market share 
for U.S. supply can be obtained. Mapped to HTS 10 -digit codes, a weighted average market share 
can also be calculated."436 
8.22.   The Arbitrator notes that the data upon which  the United  States ' proposal relies in this specific 
context are : (a) publicly available ; (b) as reliable as the BEA I-O tables that are derived from the se 
data437; (c) updated annually ; (d) exist at a relatively granular level ; and (e) can readily be 
conco rded to HTS codes. Moreover, Canada has indicated its ability to follow the United  States ' 
suggested procedure in this context,  and has presented no objection regarding why it could not be 
reasonably implemented. The Arbitrator has also examined the United  States ' proposed procedures 
in detail and sees no reason why they cannot be reasonably implemented , and therefore  considers 
the United  States ' approach with respect to manufacturing goods to be reasonable. Detailed 
procedures for using this data source to determine 𝑚𝑈𝑆 for manufacturing products appear in 
section  8.1.1.1.2 , below.  
b. Agricultural products  
8.23.   For agricultural products, the United  States suggests using data from the U nited States 
Department of Agriculture's US Farm Income and Wealth Statistics, and obtaining the value of 
 
433 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV, fn 194 to 
para. 1.12(a). The United  States notes that annual concordance tables between the US HTS and 6-digit 
NAICS  codes for imports are currently available at https://www.census.gov/foreign -
trade/reference/codes/concordance/index.html  (United  States' response to Arbitrator question No. 246, fn  194 
to para.  1.12(a)). 
434 United  States' response to Arbitrato r question No. 246, comments on Annex A, section IV, 
para. 1.19. 
435 Canada's comments on the United  States' response to Arbitrator question No. 246, comments on 
Annex A , para. 185.  
436 Canada's comments on the United  States' response to Arbitrator question No. 246, comments on 
Annex A, para. 185.  
437 We note that neither party has questioned the reliability of BEA I-O table data, nor the data 
underlying such tables. Rather, Canada's objections regarding using the underlying data pertain more 
specifica lly as to whether such data can be manipulated in a practical manner for purposes of calculating levels 
of NI.  WT/DS505/ARB  
 
- 79 - 
 
  US domest ic production for the reference year from the file "Annual cash receipt by commodity, 
U.S. and States ".438 According to the United  States, however, these data are not "based on a product 
classification system" and therefore, a matching with HTS codes could only be conducted based on 
product descriptions.439 We note that such a matching exercise, based purely on product 
descriptions, would likely pose significant problems.  
8.24.   In an apparent attempt to overcome such problems, the United  States subsequently c larified 
that "Canada would first use publicly available concordance tables between US 10 -digit HTS and 
agricultural products to assign the value of domestic production to each "primary reference 10 -digit 
HTS code".440 Canada would then obtain an estimate o f domestic shipments by deducting the value 
of exports (sourced from US Census' USA Trade Online at the HTS 10 -digit level) from the 
corresponding value of domestic supply. Canada would then estimate total domestic consumption 
by adding the value of import s from the world (sourced from US Census' USA Trade Online at the 
HTS 10 -digit level) to the corresponding estimate of domestic shipments.441 Finally, to compute the  
CVD order -specific domestic market share 𝑚𝑈𝑆 Canada would use the same weighted average as 
described in paragraph  8.20, above with reference to manufacturing products.442 
8.25.   In response to these more detailed proposals by the United  States, Canada asserted that 
"[d]espite multiple attempts to use the data and sources listed by the United  States, Canada has 
not identified a method by which products covered under a CVD order based on HTS -10 categories 
could be mapped to a corresponding U.S. dom estic agricultural product."443 
8.26.   The Arbitrator notes that Canada considers the methods proposed by the United  States in this 
context  not workable as a practical matter. The Arbitrator's own attempts in applying the 
United  States ' guidance were also unsuccessful because a clear mapping between HTS  10-digit codes  
and corresponding U.S. domestic agricultural product could not be established. Therefore, the 
Arbitrator concludes that, for agricultural products, data underlying BEA I-O tables cannot 
reasonably be used.  
c. Mining and energy products  
8.27.   For mining and energy products (6 -digit NAICS codes falling under chapter 21), the 
United  States initially suggested using data from the United  States' Department of Energy's Energy 
Information Administration.444 According to the United  States, however, these data are not "based 
on a product classification system" and therefore, match ing of  the data with  HTS codes could only 
be conducted based on product descriptions.445 We note that su ch a matching exercise, based purely 
on products descriptions, would likely pose significant problems.  
8.28.   In an apparent attempt to overcome such problems, the United  States subsequently modified 
its initial proposal, and suggested using data "from the most r ecent detailed benchmark BEA I -O 
supply and use tables that correspond to the reference year" .446 The United  States explains that 
these detailed tables divide the economy in 405 sectors, are produced roughly every five years, and 
the most recent year availa ble is 2012. The United  States goes on to describe how such data , in its 
view,  could be technically manipulated to compute the CVD order -specific domestic market share 
𝑚𝑈𝑆.447 
 
438 United States'  response to Arbitrator question No. 145, para. 55. The data are  currently  available at: 
https://data.ers.usda.gov/reports.aspx? ID=17845.  
439 United  States response to Arbitrator question No. 145 (e), para. 51.  
440 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV , 
para. 1.12(b). 
441 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV , 
para. 1.12(b). 
442 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV , 
para. 1.19. 
443 Canada's comments on United  States' response to Arbitr ator question No. 246, para. 183.  
444 United  States response to Arbitrator question No. 145, para. 56.  
445 United  States response to Arbitrator question No. 145, para. 51.  
446 United  States' response to Arbitrator question No. 246, comments on Annex A, section I V, 
para. 1.12(c). 
447 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV , 
paras.  1.12(c) and 1.19.  WT/DS505/ARB  
 
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8.29.   In response, Canada objects to the use of the United  States ' proposed data mainly on the 
grounds that such data could become outdated since they are only updated sporadically. Thus, 
according to Canada, 71 -sector BEA I-O data that are updated annually are preferable to using BEA 
405-sector BEA benchmark data propos ed by the United  States , the most recent version of which 
dates back to 2012.448 
8.30.   The Arbitrator notes that benchmark BEA data proposed by the United  States carry the 
advantage of being relatively granular. However, such data could be significantly outdated.  Indeed, 
at this writing, the most recent available BEA benchmark data were published in 2012, roughly a 
decade ago. The Arbitrator has serious concerns that such outdated data would not reasonably 
represent the market situation for the relevant product at  the time of a triggering event. Accordingly, 
the Arbitrator concludes that this data source cannot reasonably be used for determining 𝑚𝑈𝑆 for 
energy and mining products , particularly when more updated data appear available in another form, 
i.e. the BEA  I-O table data, which we  discuss in the next section . 
8.1.1.1.1.4   BEA I-O table data  
8.31.   In the preceding sections, we have rejected the use of the data sources proposed by the 
parties to calculate the value of domestic shipments for products in all sectors other than th e 
manufacturing sector (for which ASM data can be used). Thus, with respect to CVD orders relating 
to sectors other than manufacturing, the Arbitrator must therefore determine its own approach. This 
approach, which the Arbitrator proposed to the parties fo r comment in the course of questions and 
answers449, is partially based on both the third tier of the  approach proposed by the United  States450 
and on the approach proposed by Canada to estimate market shares in Canada's model, as both 
make use of BEA I-O table data in some way.451 
8.32.   The Arbitrator's proposal submitted to the parties for comment452 explained how  Canada 
would compute 𝑚𝑈𝑆 for the reference year based on information from the version relating to the 
reference period year of BEA 71 sectors I -O supply and use tables.453 In particular, Canada would 
compute 𝑚𝑈𝑆 in the relevant sector as the share of domestic shipments (output minus exports) in 
total supply (output plus imports minus exports).454 Canada would then assign the relevant sector 's 
marke t share to each 10 -digit HTS code in the relevant CVD order that is covered by that sector.  
8.33.   When submitting this proposal to the parties, the Arbitrator was aware that each HTS 10 -digit 
level covered by each BEA 71 sector would be assigned the same value o f 𝑚𝑈𝑆, and that this 
assumption would introduce an unknown degree of approximation into the overall market -share 
calculation, thereby diluting the precision of the model to some degree. However, this assumption 
is necessary because the BEA data must eve ntually be mapped onto the relevant product, which is 
objectively described in a CVD order as a collection of HTS 10 -digit level codes, a collection that, of 
course,  will likely be significantly smaller in scope than a BEA sector.  
8.34.   In response to the Arbitr ator's proposal, Canada made three main comments. First, with 
respect to harmonized schedule ( HS) categories (mostly in HS chapters 98 and 99) that cannot be 
mapped onto  BEA I-O data, Canada proposes that "the shares would be determined at the more 
aggrega ted HS -4 (or HS -2 level, if needed)."455 Second,  for HS codes that can be mapp ed onto 
certain BEA I-O sectors  but for which BEA I -O data  indicate no imports  due to their intangible  nature 
(e.g. such as government and certain services) , market shares would be "the weighted average of 
 
448 Canada's comments on the United  States' response to Arbitrator question No. 246, para. 182.  
449 Arbitrator question No. 246 and Annex A included in the  third set of Arbitrator questions.  
450 United  States' response to Arbitrator question No. 69, para. 190 , and No. 147, paras. 47 -57.  
451 Canada 's methodology report, paras. 28 -30.  
452 Arbitrator' questio n No. 146 and Annex A are included in the third set of Arbitrator questions . 
453 The Arbitrator notes that BEA 71 sectors I -O supply and use tables are updated annually 
(see United  States' response to Arbitrator question No.  36, para. 124), and are available  at: 
https://www.bea.gov/industry/input -output -accounts -data. In case these data are unavailable for the 
reference year specifically, Canada could use the BEA 71 sectors I -O supply and use tables available in the 
closest year before the reference period. I n case BEA 71 sectors I -O supply and use tables are no longer  
available, Canada could use the 2018 BEA 71 sectors I -O supply and use tables, which Canada submitted in 
Exhibit CAN -7. 
454 Output and imports would be sourced from the BEA I -O "supply" table. Exports would be sourced 
from the BEA I -O "use" table.  
455 Canada's response to Arbitrator question No. 246, para. 234.  WT/DS505/ARB  
 
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  other HS -6 market shares within the HS -4 heading (or HS -2 chapter, if needed), weighted by the 
value of Canadian imports to the U.S."456 Third, Canada notes that  the Arbitrator's proposal was  
unclear regarding  how to treat imports from multiple HTS 10 -digit codes  that map onto different 
BEA sectors . Canada, however, clearly understands that the necessary calculations must consider 
the sum of the imports under all HTS 10 -digit codes in the CVD order .457 
8.35.   In response to the Arbi trator 's proposal, the United  States offered a revised version of the 
Arbitrator's approach. In its proposed revisions, the United  States suggests calculating 𝑚𝑈𝑆 based 
on primary HTS codes only. Moreover, the United  States provides clarifications on what data from 
which columns should be used from BEA I-O tables. Most notably, the revision includes provisions 
that accommodate CVD orders containing HTS codes belonging to different BEA sectors, an issue 
also raised by C anada. The United  States suggests using trade -weighted averages of market shares 
in such instances.458 
8.36.   We also note that both parties have indicated that the Arbitrator 's proposal is a workable 
approach for Canada. Neither party presents any arguments as to why this proposal would be 
unreasonable for Canada to implement. Moreover, aside from the suggested revisions the parties 
offered modifications that are discussed in t he two preceding paragraphs, neither party has offered 
any other  viable  approach to determine the US domestic shipments  with respect to CVD orders 
relating to sectors other than manufacturing . The Arbitrator therefore considers that BEA I-O table 
data can reasonably be used for determining US domestic shipment market shares for 
non-manufacturing products. Specific procedures for using this data source for determining such 
market shares, taking into account the parties ' suggestions discussed in the two prece ding 
paragraphs, appear in the following section.  
8.1.1.1.2   Procedures for calculating the share of US domestic shipments (𝒎𝑼𝑺) 
8.37.   In this section, the Arbitrator provides specific instructions for calculating 𝑚𝑈𝑆. The Arbitrator 
thus recalls that it has selected  different data sources to be used for calculating 𝑚𝑈𝑆 depending on 
what kinds of products are covered by the relevant CVD order. Specifically, Canada will use ASM 
data to determine 𝑚𝑈𝑆 for manufacturing products, and BEA I-O table data for determini ng 𝑚𝑈𝑆 for 
agricultural products and energy and mining products  (hereinafter denoted as non -manufacturing 
products) . With this in mind, the Arbitrator offers the following instructions for Canada to determine 
𝑚𝑈𝑆 with respect to any given CVD order.  
8.38.   First, Canada shall identify the reference period (see section 6.4, above ). The subsequent 
instructions in this section and its subsections relate to the calendar year of the reference period. If 
the data described below are unavailable for the reference per iod at the time when Canada 
determines the level of NI, Canada shall use data from the calendar year prior to the reference 
period that constitutes the most recent year with relevant data available.  
8.39.   Second, Canada shall identify whether a CVD order relates  to agricultural or mining and 
energy products, or to manufacturing products. To do so, Canada shall match all the HTS 10 -digit 
codes in the CVD order with 6 -digit NAICS codes using an official correspondence table provided by 
the U nited States Census Bure au.459 If the first two digits of the corresponding NAICS codes are 
31, 32, or 33, which cover manufacturing products, Canada shall proceed with the approach outlined 
below under subsection (a) below. If the first two digits of the corresponding NAICS codes  are 
something other than 31, 32, or 33, and therefore pertain to non -manufacturing products, Canada 
shall proceed with the approach outlined under subsection (b) below. If a CVD order covers both 
manufacturing and non -manufacturing products, Canada shall proceed with both approaches, each 
 
456 Canada's response to Arbitrator question No. 246, para. 23 5. 
457 Canada's response to Arbitrator question No. 246, para. 236. We fu rther note that we provide a 
solution to this issue in our instructions further below.  
458 United  States' response to Arbitrator question No. 246, comments on Annex A, section I, 
paras.  1.5-1.6, and Section II, paras. 219-220. See section 8.1.1.2.1.2 (a), below, for reasons why we instruct 
Canada to use all the 10 -digit HTS codes in the relevant CVD order instead of just the "primary"  HTS codes as 
advocated by the United States.  
459 Correspondence tables can be accessed currently  via https://www.census.gov/foreign -
trade/reference/codes/concordance/index.html . WT/DS505/ARB  
 
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pertaining to the relevant products, arriving at a trade -weighted, CVD order -specific 𝑚𝑈𝑆 according 
to the following formula:  
𝑚𝑈𝑆=∑𝑚𝑈𝑆𝑘𝑀𝑘
∑𝑀𝑘 𝑘𝑘, 
where  𝑚𝑈𝑆𝑘 is the share of US domestic shipments for sector  𝑘 with 𝑘∈{𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔 ,𝑛𝑜𝑛 −
𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑖𝑛𝑔 }, 𝑀𝑘 is the corresponding import value (US  imports from Canada) , and ∑𝑀𝑘 𝑘 is the 
total of all US imports from Canada subject to a CVD order in sector 𝑘. 
a. For CVD orders cover ing manufacturing products  
8.40.   In section  8.1.1.1.1.3 , above, the Arbitrator determined that Canada shall use ASM data to 
determine 𝑚𝑈𝑆 for manufacturing products. Canada shall apply the following procedures for 
determining 𝑚𝑈𝑆 for such pro ducts using ASM data. 
8.41.   Canada shall first match all the  CVD order's referenced HTS 10 -digit codes with 6 -digit NAICS 
codes using an official correspondence table provided by the U nited States Census Bureau.460 Once 
each HTS 10 -digit code in a CVD order is as signed a 6 -digit NAICS code and in case all HTS 10 -digit 
codes in a CVD order match to the same 6 -digit NAICS code, the CVD order -specific share of 
US domestic shipments shall be calculated based on ASM data referring to this NAICS code.  
8.42.   Canada shall acces s ASM data provided by the U nited States Census Bureau under table 
entitled "Summary Statistics for Industry Groups and Industries in the United  States" and under the 
column "Sales, value of shipments or revenue ($1,000)".461 These  6-digit NAICS code -specif ic data 
include domestic shipments and exports but no imports, and thus Canada shall access 
6-digit NAICS  code-specific exports and imports (for consumption) from USA Trade Online or, if 
these data are unavailable, from USITC DataWeb. Canada shall then calculate the share of US 
domestic shipments as follows : 
𝑚𝑈𝑆=𝐷𝑜𝑚𝑒𝑠𝑡𝑖𝑐  𝑠ℎ𝑖𝑝𝑚𝑒𝑛𝑡𝑠
𝑇𝑜𝑡𝑎𝑙  𝑑𝑜𝑚𝑒𝑠𝑡𝑖𝑐  𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛=𝑆𝑎𝑙𝑒𝑠 −𝐸𝑥𝑝𝑜𝑟𝑡𝑠
𝑆𝑎𝑙𝑒𝑠 −𝐸𝑥𝑝𝑜𝑟𝑡𝑠 +𝐼𝑚𝑝𝑜𝑟𝑡𝑠 
 
8.43.   In case two or more relevant HTS 10 -digit codes are assigned different 6 -digit NAICS codes, 
the CVD order -specific share of US domestic shipments shall be computed as a weighted average of 
each HTS 10 -digit product's share of US domestic shipments, using, as weights, HTS 10 -digit 
US imports from  Canada sourced from USA Trade Online or, if this data is not available, from 
USITC  DataWeb for the reference period, according to the following formula:  
𝑚𝑈𝑆=∑𝑚𝑈𝑆𝑗𝑀𝑗
∑𝑀𝑗 𝑗𝑗, 
where  𝑚𝑈𝑆𝑗 is the share of US domestic shipments for HTS 10 -digit cod e j (common to all 10 -digit 
codes corresponding to the same 6 -digit NAICS code), 𝑀𝑗 is the corresponding import value 
(US imports from Canada) , and ∑𝑀𝑗 𝑗 is the total of all US imports from Canada subject to a CVD 
order.  
8.44.   In case only a subset of HTS 10 -digit codes can be assigned one or more 6 -digit NAICS codes 
with the first two digits being equal to 31, 32, or 33, Canada shall calculate the CVD order -specific 
𝑚𝑈𝑆 only based on them.  
8.45.   In case Canada finds that ASM data , for any reason , are unusable  or are significantly outdated, 
Canada shall inform the United  States and consult with the United  States whether  BEA I-O data 
could be used  instead of the ASM data . If the United  States fails to provide a viable way to overcome 
 
460 Correspondence tables can be accessed currently  via https://www.census.gov/foreign -
trade/reference/codes/concordance/index.html . See section 8.1.1.2.1.2 (a), below, for reasons why we instruct 
Canada to use all the 10 -digit HTS codes in the relevant CVD order instead of just the "primary" HTS codes as 
advocated by the United States.  
461 ASM tables can be accessed currently  via https://www.census.gov/programs -
surveys/asm/data/tables.html . WT/DS505/ARB  
 
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  potential data short comings, Canada shall use BEA I-O data as described in the following section 
instead . 
b. For CVD orders on non -manufacturing products  
8.46.   In section  8.1.1.1.1.4 , above, the Arbitrator determined that Canada shall use data from the 
BEA 71 sector I-O supply and use tables to determine 𝑚𝑈𝑆 for non -manufacturing products. Canada 
shall apply the followi ng procedures for determining 𝑚𝑈𝑆 for such products using such data.  
8.47.   Canada shall first match  all the CVD order 's referenced HTS 10 -digit codes with 6 -digit NAICS 
codes using an official correspondence table provided by the U nited States Census Bureau.462 Canada 
shall assign to each HTS 10 -digit code the first three digits of the corresponding 6 -digit NAICS code. 
Once each HTS 10 -digit code in a CVD order is assigned a 3 -digit NAICS code, and in case all 
HTS 10-digit codes in a CVD order a re assigned the same 3 -digit NAICS code, the CVD order -specific 
share of US domestic shipments shall be calculated based on BEA data referring to this 3 -digit NAICS 
code.  Canada shall then access the supply and use tables provided by the BEA at the 3 -digit NAICS 
level.463 Total commodity output and imports would be sourced from the "supply " table, and exports 
of goods and services would be sourced from the "use" table. The share of US domestic shipments 
shall then be calculated as  
𝑚𝑈𝑆=𝑇𝑜𝑡𝑎𝑙  𝐶𝑜𝑚𝑚 𝑜𝑑𝑖𝑡𝑦  𝑂𝑢𝑡𝑝𝑢𝑡 −𝐸𝑥𝑝𝑜𝑟𝑡𝑠  𝑜𝑓 𝑔𝑜𝑜𝑑𝑠  𝑎𝑛𝑑  𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠
𝑇𝑜𝑡𝑎𝑙  𝐶𝑜𝑚𝑚𝑜𝑑𝑖𝑡𝑦  𝑂𝑢𝑡𝑝𝑢𝑡 −𝐸𝑥𝑝𝑜𝑟𝑡𝑠  𝑜𝑓 𝑔𝑜𝑜𝑑𝑠  𝑎𝑛𝑑  𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 +𝐼𝑚𝑝𝑜𝑟𝑡𝑠   
 
8.48.   In case two or more HTS 10 -digit codes are assigned different 3 -digit NAICS codes, the CVD 
order -specific share of US domestic shipments shall be computed as a weighted average of each 
HTS 10 -digit product's share of US domestic shipments, using, as weights, HTS 10 -digit US imports 
from Canada sourced from USA Trade On line or, if this data is unavailable, from USITC DataWeb for 
the reference year, according to the following formula:  
𝑚𝑈𝑆=∑𝑚𝑈𝑆𝑗𝑀𝑗
∑𝑀𝑗 𝑗𝑗, 
where  𝑚𝑈𝑆𝑗 is the share of US domestic shipments for HTS 10 -digit code j (common to all 10 -digit 
codes cor responding to the same 3 -digit NAICS code), 𝑀𝑗 is the corresponding import value 
(US imports from Canada) , and ∑𝑀𝑗 𝑗 is the total of all US imports from Canada subject to a CVD 
order.464 
8.49.   In case a given HTS 10 -digit code cannot be assigned a 6 -digit NAIC S code with the first two 
digits not being equal to 31, 32, or 33, Canada shall calculate the CVD order -specific 𝑚𝑈𝑆 based on 
the HTS codes that can be assigned a NAICS code.  
8.50.   In case no HTS 10-digit code can be assigned a 3 -digit NAICS code or 𝑚𝑈𝑆 as calculated in 
the described procedures equals zero, Canada shall calculate 𝑚𝑈𝑆 as an average domestic shipment 
share over all industries applying the following alternative approach  
𝑚𝑈𝑆=∑(𝑇𝑜𝑡𝑎𝑙  𝐶𝑜𝑚𝑚𝑜𝑑𝑖𝑡𝑦  𝑂𝑢𝑡𝑝𝑢𝑡 −𝐸𝑥𝑝𝑜𝑟𝑡𝑠  𝑜𝑓 𝑔𝑜𝑜𝑑𝑠  𝑎𝑛𝑑  𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 )𝑆
∑(𝑇𝑜𝑡𝑎𝑙  𝐶𝑜𝑚𝑚𝑜𝑑𝑖𝑡𝑦  𝑂𝑢𝑡𝑝𝑢𝑡 +𝐼𝑚𝑝𝑜𝑟𝑡𝑠 −𝐸𝑥𝑝𝑜𝑟𝑡𝑠  𝑜𝑓 𝑔𝑜𝑜𝑑𝑠  𝑎𝑛𝑑  𝑠𝑒𝑟𝑣𝑖𝑐𝑒𝑠 )𝑆 
 
 
462 Correspondence tables can be accessed currently via https://www.census.gov/foreign -
trade/reference/codes/concordance/index.html . See section 8.1.1.2.1.2 (a), below, for reasons why we instruct 
Canada to use all the 10 -digit HTS codes in the relevant CVD order instead of just the "primary" HTS codes as 
advocated by the United States.  
463 BEA 71 sectors I -O supply and use tabl es are updated annually (see United  States' response to 
Arbitrator question No.  36, para. 124)  and are presently available at : 
https://www.bea.gov/industry/input -output -accounts -data. In case these tables might not be available in the 
reference year, Canada shall use the BEA 71 sectors I -O supply and use tables available in the closest year 
before the reference period. In the unlikely case in which future BEA 71 sectors I -O supply and use tables 
might not be available, Canada shall use the 2018 BEA 71 sectors I -O supply and use tables, which Canada 
submitted in Exhibit CAN -7. 
464 The Arbitrator notes that the United  States proposes such a procedure, thereby addressing an issue 
that Canada has raised as well, and, with respect to elasticities, also agrees with. WT/DS505/ARB  
 
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where 𝑆 denotes 3 -digit NAICS codes.  
8.1.1.2   Value of affected and unaffected Canadian imports  
8.51.   It will be recalled that two of the four market shares used in the selected model involve 
Canadian imports subject to CVD rates that are affected by the OFA -AFA Measure  (affected Canadian 
imports) and those th at are not affected by the OFA -AFA Measure ( unaffected Canadian imports ). 
To obtain such market shares, total values of affected and unaffected Canadian imports (Canadian 
imports into the United  States, net of any duties or tariffs) are required. Market sh ares are then 
calculated by using such values as numerators over a common denominator which is the size of the 
US market for the relevant product. This section describes how Canada shall calculate the values of 
both affected and unaffected Canadian imports .465 We therefore note at the outset that Canada will 
calculate the values of imports from both affected and unaffected Canadian companies using the 
same methods. Those methods, however, will vary mainly depending on what data source(s) Canada 
uses to calcu late such values.  
8.52.   With that background in mind, this section proceeds in three parts. First, it describes how 
Canada will calculate the values of imports when the data that the parties agree should ideally be 
used to calculate the values of imports, i.e. U S Customs data, are available. Second, it describes 
how Canada will calculate the values of imports if US Customs data are unavailable.  Finally, it 
described how values of imports shall be calculated for so -called new shippers.  
8.53.   We also consider it helpful at this stage to recall that affected and unaffected values of imports 
will eventually have to be assigned relevant duty rates. How those duty rates will be assigned to the 
values of imports Canada determine s under the procedures outlined in this section is discussed in 
section 8.1.2 , below. It should be noted, however, and for clarity, that the model req uires three 
different types of duty rates be determined and assigned to values of imports. Specifically,  these 
are reference -period CVD rates (i.e. CVD rates in effect during the reference period), factual CVD 
rates (i.e. CVD rates that are in effect follo wing the triggering event), and, for affected Canadian 
imports  only, counterfactual duty rates (i.e. what the factual duty rate would be changed to in the 
counterfactual). This is important to remember in this context because we and the parties often 
descr ibe and categorize companies according to what type of factual  CVD rate they have following 
the triggering event  (i.e. a factual individually assigned CVD rate, a factual non -selected CVD rate, 
or a factual all -others CVD rate) . 
8.1.1.2.1   Calculating the value of im ports with US Customs data  
8.54.   To determine the value of imports , Canada originally proposed to obtain  data directly from 
Canadian companies whose CVD rates were affected by the OFA -AFA Measure.466 In response to the 
Arbitrator's subsequent questions, however, Canada revised its approach. Canada now proposes 
using US Customs data to determine the values of imports, at least as a first resort, provided: (a)  the 
parties agree on the scope of the disaggregated data to be provided; (b) the data are capable of 
being verified by Canada; (c) appropriate procedures and timelines for exchanging the information 
are established; and (d) the parties agree on confidentiality procedures.467 Canada also notes that 
the US – Washing Machines (Article 22.6 – US) arbitrator's methodology for calculating relevant 
values of imports allowed the original complainant to calculate a level of suspension even in cases 
where data was incomplete or the parties disagreed regarding whi ch data should be used in that 
calculation. Canada considers that such flexibility should be present here as well.468 The 
United  States, for its part, has consistently argued during the course of this proceeding that 
US Customs data should be used as a first resort in calculating the value of imports.469 
 
465 Paragraph 8.5 , above,  describes in detail how relevant market shares are obtained using these 
figures . 
466 Canada 's methodology paper, paras. 13 -16; written submission, section IV.C.3.  
467 Canada's response to Arbitrator question No. 86, paras. 175-176. Canada explains that US Customs 
keeps a comprehensive list of all Canadian companies' shipments to the United  States by HTS code and value 
in a single database, but the database can only be accessed directly by US Customs and is not publicly 
available (Canada's response to Arbitrator question No. 86, para. 177, and No. 87, paras. 196 -198). Canada 
further explains that Canada does not collect information on exports to the United  States (Canada's response 
to Arbitrator question No. 86, para. 175 ). 
468 Canada' s written submission, para. 175.  
469 See e.g. United States'  written submission,  para. 139.  WT/DS505/ARB  
 
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  8.55.   The Arbitrator notes that the parties' proposals with respect on how to calculate the value of 
imports are lengthy. Thus, it appears helpful to address such proposals with respect to the following 
issues:  (i) reasonableness of using of US Customs data; ( ii) initial notifications following a triggering 
event; ( iii) search of US Customs data and provision of US Customs data to Canada; ( iv) Canadian 
verification of US Customs data and consultation procedures;  and ( v) party arguments concerning 
the values of imports from unaffected companies. This Decision addresses each issue in turn.  
8.1.1.2.1.1   Reasonableness of using US Customs data  
8.56.   Both parties propose using data from US Customs as a first resort to calculate the valu e of 
imports. In this context, the United  States generally stresses that any methodology in this context 
should not allow Canada to unilaterally select the model input used to calculate the value of 
imports470, and that it would be most appropriate to ident ify the relevant imports from US Customs 
data (electronically collected in the United States'  Customs' Automated Commercial Environment 
(ACE) Data Portal ). This is so, in the United States'  view, because "[t]his data is the most accurate 
data on a company -specific basis".471 In particular, the United  States considers that US Customs 
data is preferable to collecting sales data directly from Canadian companies because it would be 
more efficient than collecting information from multiple companies, and US Custom s data is 
company -specific and organized at the 10 -digit HTS level.472 The United States claims that using such 
Customs data is consistent with the decisions in past arbitrations473, and also has the benefit of 
eliminating the complexities associated with the obtainment of, and Canadian -US consultation 
regarding, information obtained directly from Canadian exporters.474 
8.57.   Canada asserts that it is most efficient to rely on US Customs data to calculate the value of 
imports because US Customs dat a are a pre -existing comprehensive dataset including all Canadian 
companies' shipments to the United  States organized by HTS code.475 Canada further indicates that 
US Customs data are always collected on a company -specific basis.476 In sum, in Canada's view,  
"US Customs data are the best available data source to determine the value of imports".477 
8.58.   The Arbitrator considers that the parties' suggestion to use US Customs data, as a first resort, 
to calculate the value of imports , is reasonable. As the parties bot h observe, US Customs data are 
collected on a shipment and company -specific  basis478, are further organized at the 10 -digit HTS 
code level (which means the data can be matched against the 10 -digit HTS codes in a relevant CVD 
order), and are collected in a s ingle comprehensive database, i.e. the US Customs ACE Database.479 
Moreover, as explained in section 8.1.1.2.1.2 , below, after a CVD order is in place,  the ACE 
Database 's records should also be searchable by a unique AD/CVD Case Number which will be 
assigned to shipments of products that importers have determined are subject to a relevant CVD 
order, providing yet another useful search tool.  
8.59.   Moreover, US Customs data have significant indicia of reliability. In general, we observe that 
the United  States has an interest in reliably tracking what goods enter its borders and to assess 
appropriate duties on such imports. US Customs is the US  authority entrusted  with that task.480 
US Customs data are electronically reported to Customs on Form 7501 "Entry Summary", which is 
filled out by importers (i.e. usually a third party not directly subject to any CVD order) in considerable 
 
470 United  States' written submission, para. 135.  
471 United  States' written submission, para. 139.  
472 United  States' response to Arbitrator question No. 86, para. 242. 
473 United  States' written submission, para. 139 and fn 139 thereto (quoting  Decision by the Arbitrator,  
US – Washing  Machines (Article  22.6 – US), para. 3.110 ("Given that the United  States' authorities are 
responsible for applying anti -dumping and cou ntervailing duties, and for collecting data on the value of 
imports, the Arbitrator requested the United  States to provide data on the value of imports" ; and referring to 
Decision by the Arbitrator,  US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 7.22).  
474 United  States' written submission, para. 140.  
475 Canada's response to Arbitrator question No. 86, para. 177. 
476 Canada's response to Arbitrator question No. 87, para. 204 , and No. 90, para. 209.  
477 Canada's response to Arbitrator question N o. 162, para. 134. 
478 Company -specific data are important because, as described in section 8.1.2, below, reference period 
duty rates, factual duty rates, and counterfactual duty rates of relevant Canadian companies are model inputs. 
Such rates are often company -specific. Because weighted averages of such duty rates are necessary in 
structuring the total combined affected and unaffected Canadian varieties, and values of imports are used as 
the weights, the values of imports must also be company -specific.  
479 United  States' response to Arbitrator question  No. 36, para. 117.  
480 United  States' response to Arbitrator question No. 152, para. 72.  WT/DS505/ARB  
 
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detail.481 Importers can incur civil penalties if the form contains errors.482 Searches can be performed 
in the ACE Database with respect to any fields in Form 7501.483 Moreover, insofar as errors may be 
present in US Customs data, verification and consultation procedures discussed further belo w can 
help minimize the impact of such errors.  
8.60.   Finally, both parties will have access to US Customs data. The United  States is, of course, in 
primary possession of such data. These data are normally confidential and are not publicly 
available.484 The partie s have explained, however, that the United  States can share such data with 
Canada if the parties agree to BCI procedures governing that exchange, and if the Arbitrator instructs 
the United  States to share such data with Canada for purposes of implementing  the selected 
model.485 The parties submitted a joint draft "Understanding between Canada and the United  States 
Concerning Procedures to Apply to Business Confidential Information to the Exte nt Necessary to 
Apply a DSB Authorization Consistent with the Arbitrator's Decision" (the BCI Understanding).486 The 
parties then provided signed copies of the BCI Understanding, committing themselves to its terms.487 
Such procedures appear reasonable in sco pe and content, and would allow the United  States to 
share confidential information from US Customs with Canada in order to calculate levels of NI if and 
when triggering events occur.488 At this point in its Decision, the Arbitrator thus instructs the 
United  States, pursuant to the BCI Understanding, to share US Customs data (and any other relevant 
data falling under the scope of the BCI Understanding) with Canada in order to facilitate Canada's 
calculation of levels of NI in accordance with the terms of this Decision.  
8.61.   In sum, the Arbitrator concludes that Canada shall use US Customs data to calculate the 
values of imports from affected and unaffected Canadian companies when such data are available 
and have been provided to Canada pursuant to the BCI Understanding between the parties.  
 
481 United  States' response to Arbitrator question No. 174 , para. 93  (referring to U.S. Customs, "Entry 
Summary", Form 7501  (Exhibit CAN -93). See also Canada's response to Arbitrator question No. 87, 
para. 199). The Arbitrator notes that the parties have explained th at each 10 -digit HTS code in an entry 
summary will have a value assigned to it (Canada's response to Arbitrator question  No. 216, para. 161 ; 
United  States' response to Arbitrator question  No. 216, para. 123 ). The parties have also confirmed that the 
AD/CVD  number, when present in Form 7501, has a value of imports associated with it (Canada's response to 
Arbitrator question No. 208, paras. 147 -150; United  States' response to Arbitrator question  No. 217, 
paras.  124-126). The "importer of record" is responsibl e for completing the form which can be a number of 
different entities, and could even be the exporter under certain circumstances (19 U.S.C.  § 1484 
(Exhibit  CAN-151); United  States' response to Arbitrator question  No. 264, para. 198) . 
482 United  States' response to Arbitrator question No. 174 , para. 93  (quoting 19 U.S.C. § 1592 
(Exhibit  USA-43)). 
483 United  States' response to Arbitrator question No. 174 , para. 93 . 
484 United  States' response to Arbitrator question No. 87 , and No. 101, para. 259 
(quot ing 19 U.S.C.  § 1677f (Exhibit USA -17)). 
485 Canada's response to Arbitrator question No. 86, para. 194 and fn 220 thereto ; United  States' 
response to Arbitrator question No. 101, para. 260.  
486 Jointly Proposed Understanding between Canada and the United Stat es Concerning Procedures to 
Apply to Business Confidential Information to the Extent Necessary to Apply a DSB Authorization Consistent 
with the Arbitrator 's Decision ( "BCI Understanding ") (Exhibit USA -47); Canada's response to third set of 
Arbitrator questions, Annex  A. 
487 See Jointly Agreed BCI Understanding  (Exhibit USA -60); Signed Cover Letter and Mutually Agreed 
Understanding between Canada and the United States Concerning Procedures to Apply to Business Confidential 
Information to the Extent Necessary to Apply a DSB Authorization Consistent with the Arbitrator's Decision 
(Exhibit  CAN-171). 
488 See United  States' response to Arbitrator question No. 153, para. 75 (discussing scope of 
procedures). The BCI Understanding would further allow the USDOC to share otherwise confidential information 
with Canada if the party that submitted the information to the USDOC consents to that release. The submitting 
party must offer such additional consent in the case of confidential USDOC record information because such 
information is protected by an Administrative Protective Order (United States'  response to Arbi trator question 
No. 161, para. 101 ). WT/DS505/ARB  
 
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  8.1.1.2.1.2   Initial notification by Canada to the United  States following a triggering event  
8.62.   Canada  explains that, following a triggering event, Canada would inform the U nited States of 
Canada's intention to suspend concessions via a written notification.489 Canada envisions the 
notification including:  
a. a notification that Canada intends to suspend concessions with respect to a given 
application of the OFA -AFA Measure;  
b. the n ames of all Canadian exporters who are then subject to relevant individual CVD 
rates affected by the OFA -AFA Measure;  
c. the names of all Canadian exporters who are subject to a relevant individual but 
unaffected CVD rate, and individually investigated compan ies that were excluded from 
the scope of the relevant CVD order;  
d. the names of any cross -owned affiliates of affected or unaffected companies that have 
individual CVD rates;  
e. a request for the United  States to gather data on Canadian imports of the relevant 
product from US Customs with reference to the HTS codes from the relevant CVD order 
or the relevant CVD number;  
f. a list of the HTS codes from the relevant CVD order;  
g. the names of affected and unaffected companies subject to non -selected CVD rates; 
and 
h. the reference period.490 
8.63.   Canada also indicates that it would include the Excel spread sheet that US Customs will 
complete and then relay to Canada containing the relevant US Customs data (this spreadsheet is 
described further in section 8.1.1.2.1.3 , below).491 
8.64.   The United  States generally agrees with the scope of information that the initial Canadian 
notification to the United  States should include following a triggering event.492 The United  States 
considers that Canada should also include the name of Canadian companies that are exporting to 
the United  States under the all -others rate, to the extent such information is available.493 
8.65.   The Arbitrator cons iders that to fully appreciate the relevance of certain information that the 
parties propose be included in the initial notification, some background on the administration of 
US CVD orders would be helpful. Thus, we note that the record reflects that, foll owing the imposition 
of a CVD order following an original investigation, each individually investigated company is assigned 
a specific AD/CVD number, a portion of which corresponds to the CVD order at large and a portion 
of which is unique to each company.  There is also a specific CVD number that corresponds to the 
all-others rate. Further, in an administrative review, each individually investigated company is also 
assigned an individual AD/CVD number, as are all companies subject to the non -selected rate.494 
 
489 According to the United  States, Canada's point of contact for any and all such communications 
regarding the calculation of a level of NI is the Legal Advisor to the US Mission to the World Trade Organization 
(United  States' response to Arbitrator question No. 119 , para. 6 ). Canada's point of contact would be the 
Executive Director of the Trade Remedies and North America Trade Division (TNE) at Global Affairs Canada, 
and the Director of the Trade Remedies Law Division o f the Trade Law Bureau (JLT) (Canada's response to 
Arbitrator question No. 119 , para. 33). 
490 Canada's response to Arbitrator question No. 86, para. 189, No. 154, paras. 105(i) and 106(i), 
No. 186, paras. 34 -37, and No. 288, para. 37 . 
491 Canada's response to Arbitrator question No.  186, para. 37.  
492 United  States' response to Arbitrator question No.  173, para. 90 , No. 186, para. 14, and No. 288, 
para. 26 . See also United States'  comments on Canada's response to Arbitrator question No. 186, para.  22. 
493 United States'  response to Arbitrator question No. 186, para. 14 . 
494 Canada's response to Arbitrator question No. 208, paras. 147 -150, and No. 275, paras. 1 -2; 
United  States' response to Arbitrator question No . 177, para. 98, No. 219, paras. 128 -132, and No.  234, 
paras.  157-157. WT/DS505/ARB  
 
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Importers report these numbers on Form 7501 in order to specify to what CVD order(s) the imported 
goods are subject and what CVD rates are applied to those imports.495 However, importers are not 
required to report the CVD numbers of companies who were exc luded from the scope of the CVD 
order.496 
8.66.   Thus, we note that in a reference period preceding the issuance of a relevant CVD order, the 
only way to identify relevant imports in US Customs data is by matching the 10 -digit HTS codes 
present in the CVD order to  the 10 -digit HTS codes reported on Form 7501.497 This is so because 
relevant CVD numbers were not yet assigned at the time of the reference period. With respect to a 
reference period occurring after a relevant CVD order is in place, then the goods in Form 7501 that 
are covered by the CVD order could be identified more simply by searching for the relevant CVD 
case number.498 In that instance, however, an additional search would have to be performed with 
respect to companies that were excluded under the scope of a CVD order, since importers may not 
have included such companies ' CVD numbers on Form 7501. The parties propose that US Customs 
conduct searches for the names of such companies for post -investigation reference periods. Such 
names would also be cross -checked against the relevant 10 -digit HTS codes in the CVD order to 
identify imports from those companies subject to the relevant CVD order.499 
8.67.   With that background established, we note that the parties disagree over two issues that 
would be helpful to clarify at this stage: (a) which 10 -digit HTS codes appearing in a given CVD 
order should be used to identify relevant imports in the US Customs da ta set; and (b) at what point 
in time to identify cross -owned affiliates of relevant Canadian companies. We address each in turn.  
(a) The appropriate 10 -digit HTS codes  
8.68.   The parties' disagreement surrounding which 10 -digit HTS codes appearing in a CVD order  
should be used to identify relevant imports in the US Customs data set arises because, as the 
United  States explains , a CVD order may reference two kinds of HTS codes, i.e. HTS codes under 
which the relevant product(s) "is"/"are" classified, and additiona l HTS codes under which the 
product(s) "may"/"might" be classified, with the latter being generally broader than the product(s) 
subject to the CVD order.500 Thus, in the United  States' view, to avoid undue over -inclusivity and 
attendant inflation of the cal culated level of NI, only the former group of HTS codes should be 
used.501 The United  States has also more generally stated that use of HTS 10 -digit level data "will 
likely overstate the value of imports that would be subject to AD or CVD duties under each order 
since some of the values under the reference HTS code are not subject to duties, but it remains the 
best available information under those circumstances".502 
 
495 Canada's response to Arbitrator question No . 86, para. 178; United  States' response to Arbitrator 
question No. 96, para. 251, and No. 106 , para. 271 . 
496 Canada's response to Arbitrator question No. 217, paras. 162 -166, United States' response to 
Arbitrator question No. 217, paras. 124-126; Canada's comments on United States' response to Arbitrator 
question No. 217, paras. 63 -64; United States' comments on Canada's response to Arbitrator question 
No. 217, paras. 112 -114. 
497 Canada's response to Arbitrator question No. 86, para. 178.  
498 United  States' response to Arbitrator question No. 86, paras. 252 -253.  
499 United States' response to Arbitrator question No. 217, para. 125; Canada's response to Arbitrator 
question No. 275, pa ra. 2; and United States' comments on Canada's response to Arbitrator question No. 275, 
para. 3 . 
500 See Utility Scale Wind Towers from Canada, Indonesia, and the Socialist Republic of Vietnam: 
Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Orders, 85 Fed. Reg. 
52543 (Aug. 26, 2020)  (Exhibit USA -10) ("Merchandise covered by these orders is currently classified  in the 
Harmonized Tariff Schedule of the United  States (HTSUS) under subheading … Wind towers of iron or steel are 
classified  under HTSUS … Wind towers may be classified  under HTSUS …") (emphasis added); Commerce, 
"Certain Softwood Lumber Products from Canada, Amended Final Affirmative Countervailing Duty 
Determination and Countervailing Duty Order", 83 Fed. Reg. 347 dated January 3, 2018  (Exhibit CAN -18) 
("Softwood lumber products that are subject to this order are currently classifiable  under the following ten -digit 
HTSUS subheadings … Items so identified might be entered  under the following ten -digit HTSUS subheadings 
…"). (emphasis added)  
501 United  States' response to Arbitrator question No. 178, para. 103.  
502 United  States' written submission, para. 139. See also United  States' response to Arbitrator question 
No. 155, par a. 80. The United  States recognizes, however, that because there is rarely perfect alignment 
between the written description of a product in a CVD order and HTS 10 -digit level codes, HTS 10 -digit level 
categories may sometimes be underinclusive or overincl usive vis-à-vis the subject product (United  States' 
response to Arbitrator question No. 105 , paras. 268 -270). WT/DS505/ARB  
 
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  8.69.   Canada asserts that all HTS codes referenced in the CVD order should be used to define the 
relevant product, not just the "primary" HTS codes as the United  States advocates. This is so, in 
Canada's view, because "secondary" HTS codes would still be expected to capture imports of the 
relevant product, and thus, if they were excluded, it would lik ely lead to an underestimation of the 
values of imports and thus an inaccurate estimation of the level of NI.503 Canada also asserts that 
the United  States has failed to offer any compelling explanation as to what the meaningful difference 
is between a "pri mary" and "secondary" HTS code in this context.504 Canada further notes that it is 
unaware of any law or regulation governing when the USDOC would label a HTS code as a "primary" 
or "secondary" HTS code in this context, and also argues that there is no reas on to think that the 
use of the word "may" or "might" signals that only a minority of the goods entering the U nited States 
under that HTS code are the relevant product.505 
8.70.   In response, the United States explains that  when a CVD order indicates that a given 10-digit 
HTS code "may" or "might " contain the relevant product, it means that the HTS code is expected to 
contain a mix of the goods subject to the CVD order and goods that are not subject to the CVD 
order, although it is unclear whether the majority of t he goods entering the U nited States under that 
HTS code would or would not be subject to the CVD order.506 The United  States thus repeats its 
argument that the HTS codes that "may" or "might " contain the relevant product are generally 
broader than the relev ant product, thus leading to over -inclusivity of the values of imports if they 
are used in this context, and also notes that the USITC only uses the "primary " HTS codes to identify 
relevant imports when conducting its injury analysis.507 
8.71.   In response, Canada  asserts that the United  States ' observation that the USITC uses only 
primary HTS codes in its injury analyses is irrelevant because the USITC is not trying to identify the 
duties applied to the relevant product, which is the issue here.508 Canada also clai ms that the USITC's 
practice in this regard is not uniform.509 
8.72.   The Arbitrator considers that both  parties' approaches in this context would lead to 
inaccuracies in the level of NI calculated under the chosen model. This is so because the scope of a 
CVD orde r is not defined by HTS codes, but by the narrative description of the product in the CVD 
order.510 Thus, the boundaries of the scope of the relevant product can partially, but not completely, 
overlap with the scope of certain HTS codes. When that partial overlap is expected to occur, it 
appears that the USDOC indicates in the CVD order that such an HTS  code "may" or "might " contain 
the relevant product. We thus recognize that using all HTS codes mentioned in the CVD order to 
search for values of imports (i.e.  Canada's approach) would likely lead to over -inclusive results, 
whereas using only some of the HTS codes mentioned in the CVD order to search for values of 
imports (i.e. the United  States' approach) would likely lead to under -inclusive results. Both parties 
agree, however, that it cannot be determined ex ante  whether the majority or minority of good s 
entering the United  States under such an HTS code would be covered by the scope of a future CVD 
order. It is therefore speculative as to whether one  approach would be more or less accurate than 
the other in any given instance. That being the case, we con sider that the United  States has not 
demonstrated that its proposal in this context is any more reasonable than Canada's . We therefore 
select the Canadian proposal, and conclude that all HTS codes listed in the CVD order shall be used 
to identify relevant imports in searches of US Customs data.  
(b) Identification of cross -owned affiliates  
8.73.   Another issue that appears helpful to resolve at this point is how the parties will identify 
cross-owned affiliates. The parties have explained that the USDOC identifies c ross-owned affiliates 
of individually investigated companies, and considers such affiliates to be part of the same company 
as the relevant individually investigated company for purposes of imposing CVD duties. The parties 
 
503 Canada's comments on the United States' response to Arbitrator question No. 265, paras. 143-144. 
504 Canada's  response to Arbitrator question No. 226, paras. 203 -207. 
505 Canada's  response to Arbitrator question No. 265, paras. 278-279. 
506 United States' response to Arbitrator question No. 265, paras. 199 -200. 
507 United States' response to Arbitrator question No. 221, para 140 , and No. 265, paras. 199 -200. 
508 Canada's  comments on the United States' response to Arbitrator question No. 221, para. 87.  
509 Canada's  comments on the United States' response to Arbitrator que stion No. 221, para. 88.  
510 See United  States' response to Arbitrator question No. 87, para. 251, and No. 105, para. 268 
(referring to  Exhibit  USA-10; Exhibit CAN -18); Canada's written submission, para.  177 (agreeing with  the 
United States' statements in th is context)).  WT/DS505/ARB  
 
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also have explained that the USDOC  names companies ' cross-owned affiliates in the USDOC public 
records. What entities qualify as cross -owned affiliates of a given company may change over time.511 
8.74.   Canada originally proposed that if the identity of cross-owned affiliates changes over time, 
Canada will use the list of cross -owned affiliates that applied during the reference period , although 
for a pre -investigation reference period the most recent determination of cross -owned affiliates 
would apply.512 
8.75.   The United  States asserts that it would be m ore appropriate to use the most recently 
determined cross -owned affiliates.513 Canada subsequently agreed with the United  States ' 
approach.514 
8.76.   The Arbitrator recalls that the reference period is, at heart, meant to resemble as much as 
possible the market situation at the time of the triggering event  and moving forward from that 
event .515 Thus, we conclude that  a company 's cross -owned affiliates, for purposes of determining 
the value of imports, should be those most recently identified by the USDOC.  
(c) Conclusion  
8.77.   In light of the for egoing , and in light of the parties' general agreement as to the general 
content of the initial notification, the Arbitrator instructs Canada, following a triggering event, to 
send a written notification to the Unit ed States with the following information:  
a. a notification that Canada intends to suspend concessions with respect to a given 
application of the OFA -AFA Measure;  
b. the names of all Canadian exporters who are then subject to relevant individual CVD 
rates or non -selected CVD rates affected by the OFA -AFA Measure;  
c. the names of all Canadian exporters who are then subject to a relevant individual or 
non-selected unaffected CVD rate, and individually investigated companies that were 
excluded from the scope of the rel evant CVD order;  
d. the names of any cross -owned affiliates of affected or unaffected companies who were 
individually investigated  or reviewed , as most recently identified by USDOC ; 
e. the names of companies subject to the all -others rate, insofar as such inform ation is 
known by Canada;  
f. a request for the United  States to gather data on Canadian imports of the relevant 
product from US Customs with reference to all the 10 -digit HTS codes from the relevant 
CVD order (for a reference period occurring before the issua nce of the relevant CVD 
order) or the relevant AD/CVD number (for a reference period occurring after the 
issuance of the relevant CVD order)516; 
g. a list of all the HTS codes in the relevant CVD order; and  
 
511 Canada's response to Arbitrator question No. 214, paras. 157 -159; United States' response to 
Arbitrator question No . 214, paras. 119 -120, and  No. 268, para. 204 . See generally 19 CFR 351.525 
(Exhibit  CAN-143), subsection (b)(6); Commerce, "Supercalendered Paper from Canada: Countervailing Duty 
Order" , 80 Fed. Reg. 237 dated December 10, 2015 ( Exhibit CAN -121), p. 76668 ; and Exhibit CAN -18, p. 349.  
512 Canada's response to Arbitrator question No. 268, paras. 283-284; comments on the United States'  
response to Arbitrator question No. 268, paras. 147 -151. 
513 United States'  response to Arbitrator question No. 268, para. 204, and No. 295, para. 44; comments 
on Canada's response to Arbitrator question No. 268, paras. 21 7-218. 
514 Canada's comments  on the  United States' response to Arbitrator question No. 295, para. 45.  
515 See para . 6.104 , above.  
516 For a reference period occurring after the issuance of the relevant CVD order, Canada shall also 
include a request for US Customs to search for imports by companies excluded from the scope of the relevant 
CVD order using the names of the excluded companie s, cross -checked against all 10 -digit HTS codes in the 
relevant CVD order. See para . 8.66, above . WT/DS505/ARB  
 
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  h. the reference period.  
8.78.   Canada shall also include the r elevant Excel spreadsheet specified in paragraph 8.104 , 
below.517 
8.79.   We note, however, that Canada's ability to include all such information  in the initial notification  
may be limited by the information available to Canada and/or the burden of collecting all such 
information at the time of the notification. We therefore underline that if it emerges that there are 
any inaccuracies concerning, o r under -reporting of, the information described in the paragraph s 
above in Canada's initial notification, this shall not limit in any way the United  States' responsibility 
of providing all relevant US Customs data to Canada, described in more detail in the  next section.  
8.1.1.2.1.3   Search of US Customs data and provision of data to Canada  
8.80.   After Canada has made its initial notification to the United  States following a triggering event, 
Canada  originally proposed that the United  States should then have a maximum of two w eeks to 
provide US Customs data to Canada.518 Subsequently, Canada indicated that a period of 45 days, 
which had previously been proposed by the United  States, could be used.519 
8.81.   Regarding the scope of the US Customs data to be provided, Canada has stated its  
expectations with respect to two scenarios. If the triggering event is the imposition of a CVD order 
following an original investigation, Canada expects that "the United  States would provide Canada 
with U.S. Customs data for all shipments from Canada unde r the relevant HTS codes (i.e. those 
within the scope of the countervailing duty order) in the reference period".520 If the triggering event 
follows from a CVD proceeding following an initial investigation, "the United  States would provide 
Canada with U.S. Customs data for all shipments from Canada under the relevant CVD number in 
the reference period".521 In both cases, in Canada's view, the United  States could preliminarily 
identify shipments by Canadian companies affected by the OFA -AFA Measure.522 Canada further 
explains that, in order for Canada to be able to verify the data provided, the United  States would 
have to provide, at a minimum, the following fields collected by US Customs with respect to any 
given shipment: Entry Type; Port Code; Entry Date; Country of Origin; Manufacturer ID; 
Manufacturer Name; Export Date; Importer Number; Importer of Record Name (Last, First, M.I.) 
and Address; Description of Merchandise; HTS Code Number; Net Quantity in  harmonized tariff 
schedule of the United States  (HTSUS ) Units; Entered Value; CHGS (Charges); CVD rate and 
HTS rate; and AD/CVD Number (when shipments occur post -CVD order). Canada believes that in 
certain circumstances Canada may require additional information from US Customs.523 
8.82.   Canada specifies that,  generally: (a) the "HTS Code Number", "Description of Merchandise", 
and "AD/CVD Number" fields in Form 7501 will determine which shipments should be deemed those 
of the relevant product ; (b) the "Manufacturer ID" and "Manufacturer Name" fields should dete rmine 
from which company  shipments were made; (c) the "Entry Date" field will determine which imports 
occurred during the reference period ; (d) the " country of origin " field will determine which imports 
 
517 We note that we decline to set any deadline by when, following a triggering event, Canada must 
send the initial notification to the United  States. We further note that if Canada is already in possession of 
relevant data left over from a previous calculation of the level of NI, Canada shall endeavour to  not issue a 
repetitive request to the United  States for such dat a (see Canada's comments on the United States' response 
to Arbitrator question No. 287, para. 26 (noting that Canada may have relevant data from a previous 
calculation of the level of NI)). 
518 Canada's response to Arbitrator question No. 86, para. 189.  
519 Canada's  response to Arbitrator question No. 224, para. 200.  
520 Canada's response to Arbitrator question No. 86, para. 180.  
521 Canada's response to Arbitrator question No. 86, para. 181.  
522 Canada's response to Arbitrator question No. 86, paras. 180-181. Canada explains that "Canada will 
provide the United  States with the names of the respondent(s) that are subject to the OFA -AFA measure and 
the names of the respondent(s) that are not subject to the OFA -AFA measure." (Canada's response to 
Arbitrator question No. 86 , fn 210 to para. 180 ). 
523 Canada's response to Arbitrator question No. 86, paras. 182-183; response to Arbitrator quest ion 
No. 219, Table 1. Canada asserts that such information is provided in Form 7501 "Entry Summary Canada's 
response to Arbitrator question No. 87, para.  199; Exhibit  CAN-93. Canada also notes that the company's 
name on the form may be entered inconsistent ly across multiple forms (Canada's response to Arbitrator 
question No. 86, fn 213 to para. 185). WT/DS505/ARB  
 
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are from Canada ; and (e) the "Entered value" will con trol the value  of imports. The other data fields, 
according to Canada, are necessary for verification purposes.524 
8.83.   Canada stresses in its submissions the importance of receiving disaggregated  
(i.e. shipment -by-shipment)  information from US Customs, in the absence of which Canada claims 
it could not properly verify the US Customs data.525 Canada also underlines that Canada 's main 
concern in this context is that errors will occur when the importers populate the fields in Fo rm 7501, 
one error in particular being that importers may misspel l manufacturers' names.526 Canada also 
asserts that the United  States provides no convincing rationale as to why the United  States would 
be unable to supply disaggregated data.527 
8.84.   Regarding the technical format of the transmitted data, Canada asserts that the United  States 
should provide disaggregated US Customs data to Canada in a "machine readable format" (either 
.cvs or .xls format) so that Canada can sort, analyse, and verify th e data.528 Both parties submitted 
proposals for the format of the spreadsheet.529 
8.85.   After Canada has made its initial notification to the United  States following a triggering  event, 
the United  States proposes  that the United  States should then have 45 days, ra ther than two weeks, 
to provide the relevant information to Canada.530 
8.86.   The United  States considers that it is unnecessary for the Arbitrator to specify how 
US Customs will perform searches for relevant shipments.531 However, the United  States considers 
that the fields that would likely be relevant in identifying the relevant product would include 
"Entry type" , "AD/CVD case number", " Description of merchandise", and "HTS code number". More 
specifically, the United  States indicates that, for a pre -investigation  reference period, it will ask 
US Customs for data pertaining to the relevant 10 -digit HTS codes, and for a post -investigation 
reference period , the United  States will ask US Customs for data pertaining to the relevant AD/CVD 
case number.532 For determining  the exporting Canadian company, the United  States considers that 
the data fields that would likely be relevant would include "Manufacturer ID" and "Manufacturer 
name".533 The United  States also advocates using the "Country of origin " field to identify shipments 
from Canada534 and the "Entered value " to determine the value of the imports.535 
8.87.   Regarding the form of the data to be provided to Canada, the United  States' most recent 
position is that it would "provide company -specific trade va lue data to Canada for all Canadian 
exporters of the product – both affected and unaffected companies ".536 The United  States argues 
that this level of data aggregation for each type of company is consistent with how its model will use 
the values of imports from each type of company. Moreover, the United  States asserts that Canada 
would not need further disaggregated data in order to verify information because Canada 
incongruously seeks to verify disaggregated data with aggregated data.537 In particular, the 
United States expects that companies would not provide disaggregated data to Canada for 
 
524 Canada's response to Arbitrator question No. 154, paras. 103 -104, and No. 166 , paras. 147-154. 
525 See generally Canada's comments on the United States' respon se to Arbitrator question No. 219. 
526 Canada's response to Arbitrator question No. 162, para. 137, and No. 221, para. 90.  
527 Canada's comments  on the  United States' response to Arbitrator question No. 232, paras. 102-104. 
528 Canada's response to Arbitrator question No. 86, para. 184, and No. 154, paras. 105(iv) and 106(iv).  
529 Canada's Proposed Spreadsheet Template  (Exhibit CAN -147); U.S. Response to Question 219: Excel 
Spreadsheet for Customs Data  (Exhibit USA -53). 
530 United  States' response to Arbitrator question No. 173, para. 91.  Canada indicated that a period of 
45 days, as proposed by the United  States, could be used (Canada's response to Arbitrator question No. 224, 
para. 200).  
531 United  States' response to Arbitrator ques tion No. 154, para. 77 , and No. 290, para. 30 . 
532 United  States' response to Arbitrator question No. 173, para. 85.  
533 United  States' response to Arbitrator question No. 154, para. 78.  
534 United States' response to Arbitrator question No. 219, para. 130.  
535 United States' response to Arbitrator question No. 219, para. 130 ; comments on Canada's response 
to Arbitrator question No. 221, para. 124 . 
536 United States' response to Arbitrator questio n No.  273, para. 205 . The United  States  originally 
asserted that, for affected individually examined companies, the United  States  would provide aggregated 
import value data from US Customs on a company -specific basis, and would provide more aggregate data for 
companies subject to the all -others rate and unaffected exporters (see e.g. United  States ' response to 
Arbitrator question No. 154, para. 77, and No. 273 , paras. 205 -206). 
537 United  States' response to Arbitrator question No. 173, para. 87, No. 175, par a. 95, and No. 232, 
paras. 152 -154. WT/DS505/ARB  
 
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  verification purposes.538 Further, the United  States argues that the model will be run with only 
aggregated data for each variety of exporter539, and that providing disagg regated data is overly 
burdensome.540 The United  States indicates that it will provide such data in Excel format.541 
8.88.   In order to address  Canada's concerns related to misspellings in the "Manufacturer Name " 
and "Manufacturer ID " fields producing errors when calculating the value of imports, the 
United  States also asserts that, in addition to US Customs providing aggregated data on a 
company -specific basis, US Customs could also provide aggregated information based on 
combinations  of the "Manufacturer Name " and "Manufacturer ID " fields. The United  States asserts 
that this additional information would aid Canada in its verification of the US Customs data.542 
8.89.   The United  States further asserts that, in providing the relevant data to Ca nada, the 
United  States could provide an attestation from US Customs that: (a) the reported data is inclusive 
of all requested information; (b) US Customs had used its best efforts to search for requested data 
and properly assign the values associated with  relevant shipments to the relevant affected and 
unaffected companies; and ( c) such search and assignment occurred in a manner that US Customs 
believes is consistent with its task of administering CVD orders and collecting duties.543 The 
United  States also orally confirmed at the meeting with the parties that US Customs would use its 
best efforts to accurately assign values of imports to relevant companies in this context.544 
8.90.   The United  States also asserts that providing for minimum search criteria in this context is 
unnecessary, as US Customs is able to perform such searches with its own expertise .545 
8.91.   The Arbitrator notes that there are five issues to consider in this context: (a) how sea rches 
of the ACE Database should be performed; (b) once relevant records have been identified in such 
searches, the scope of the information to be supplied to Canada and at what level of aggregation 
such data should be conveyed; (c) in what technical forma t the data should be relayed to Canada; 
(d) whether to require the United  States to provide relevant attestations to Canada; and (e) how 
long the United  States should have to transmit the US Customs data to Canada following Canada's 
initial notification to  the United  States. We address each in turn.  
(a) Searches of US Customs data  
8.92.   Regarding how US Customs should perform searches of the ACE Database for relevant import 
records, the parties disagree regarding whether search criteria for initial searches shoul d be 
prescribed but agree on the most useful basic criteria to use for searches of the ACE Database.546 
We consider that, at least for certain information, basic minimum search criteria would be helpful to 
prescribe. This is so because it would give assuran ces to Canada regarding the scope of the initial 
searches done by US Customs, and because the basic search criteria are essentially agreed upon by 
the parties. Thus, the Arbitrator instructs the United  States to perform, at minimum , the following 
searches following receipt of Canada 's initial notification:  
• with respect to a pre-investigation reference period  (i.e. when an AD/CVD number would not 
have been assigned to relevant import shipments in the reference period), search for records 
that have: (a) an "Entry Date" during the reference period; (b) "Canada" as the "Country of 
 
538 United States'  comments on Canada's response to Arbitrator question No. 219, para. 118. Based on 
its argument that companies will likely not provide shipment -specific information to Canada for purposes of 
verification, the United  States, specifically, disagrees that the following fields would be necessary in order to 
verify US Customs data: importer of record name and address, importer number, description of merchandise, 
net quantity in HTSUS units, CHGS, p ort code, and export date (United States' comments Canada's response to 
Arbitrator question No. 219, para. 119 ). 
539 United States' response to Arbitrator question No. 232, para. 154.  
540 United States' response to Arbitrator question No. 219, paras. 128 -132. 
541 United  States' response to Arbitrator question No. 173, para. 86.  
542 United States' response to Arbitrator question No. 219, paras. 131 -132. 
543 United  States' response to Arbitrator question No. 154 , paras. 77 -79, and No. 231, para. 151 . 
544 United States' oral response to Arbitrator question No. 231 at the meeting of the Arbitrator . 
545 United States'  comments  on Canada's response to Arbitrator question No. 221, para. 121 . 
546 We recall that the United  States has explained that searches can be pe rformed with respect to all 
fields in Form 7501 (United  States' response to Arbitrator question No. 174 , para. 93) .  WT/DS505/ARB  
 
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Origin"; and (c) one or more of all the 10-digit HTS codes appearing in the relevant CVD order; 
or 
• with respect to a post-investigation reference period  (i.e. when an AD/CVD number would have 
been assigned to relevant import shipments during the reference period), search for records that  
have: (a) an "Entry Date" during the reference period; (b) "Canada" as the "Country of Origin"; 
and (c) the relevant CVD number. US Customs shall also search for imports by companies 
excluded from the scope of the relevant CVD order using the names of the  excluded companies, 
cross-checked against all 10 -digit HTS codes in the relevant CVD order.547 
8.93.   We note that these are minimum initial searches. The United  States is free to perform other 
searches of the relevant US Customs data as well and present all rele vant data to Canada. Thus, 
and if for some reason, these initial search criteria yield imports that the United  States believes 
should not be included in the data set, then the United  States shall nonetheless present such data 
to Canada but can raise its ob jections to such data with Canada during consultations (see 
section  8.1.1.2.1.4 , below ). 
8.94.   Once relevant import records have been identified, however, t he parties disagree as to the 
scope of information regarding such records that should be conveyed to Canada. That issue is 
discussed in the following section.  
(b) Scope of information to be supplied to Canada and degree of disaggregation  
8.95.   Regarding the scop e of the information and, relatedly, at what level of aggregation it should 
be supplied to Canada , Canada's  propos al is that US  Customs provide Canada with the information 
in many different fields from relevant Form 7501 records found in searches of US  Customs data. 
Canada further requests that such data be provided to Canada on a disaggregated 
shipment -by-shipment basis to aid Canada's efforts in analysing and verifying the data. The 
United  States has indicated it should only have to provide data aggregated at the company -level, 
but not shipment -by-shipment.  
8.96.   The Arbitrator notes that the United  States never argues that it would be unable provide the 
data fields that Canada requests in disaggr egated shipment -by-shipment form or that there are any 
technical issues associated with doing so.548 Moreover, although the United  States has indicated that 
provision of shipment -by-shipment data might be overly burdensome for US Customs, the 
United  States has provided no details as to why this would be so. It also appears reasonable to 
expect that shipment -by-shipment data could assist Canada in analysing and verifying the data it 
receives from US Customs.549 This is especially so with respect to Canadian co mpanies that may 
provide their data to Canada for purposes of verification on a shipment -by-shipment basis, a 
possibility that we find difficult to dismiss since we do not know how companies would transmit their 
data to Canada.  
8.97.   The Arbitrator thus conclude s that US Customs data should be provided to Canada on a 
disaggregated shipment -by-shipment basis, with the fields from Form 7501 that Canada requests. 
 
547 See para . 8.66, above . We note that Canada has proposed that if the reference period is a 
post-investigation reference period, then the value of imports from companies subject to a factual all -others 
rate c ould be determined by searching for the AD/CVD number specific to the all -others rate ( Canada's 
response to Arbitrator question No.  295, Revised Table 1, at p. 25). We disagree because although this would 
yield the value of imports for companies that were subject to the all -others rate during the reference period , 
what is needed, somewhat differently, is the value of imports from the companies subject to a factual 
all-others rate moving forward from the triggering event. These groups of companies could be d ifferent. Thus, 
Canada should simply take as the relevant all -others value of imports the residual value of imports in the US 
Customs data set after removing the values of imports from companies subject to other types of factual CVD 
rates.  
548 United States'  response to Arbitrator question No.  232, para. 152.  
549 See generally Canada's response to Arbitrator question No. 163 (indicating potential ways that such 
fields could facilitate verification).  WT/DS505/ARB  
 
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  Exactly what those fields are and how they will be technically structured are issues discussed in 
more d etail in the following section.550 
(c) Technical format of US Customs data  
8.98.   Regarding the technical format of the information to be provided to Canada, both parties 
proposed different Excel spreadsheet formats for the United  States to use to transmit data fr om 
US Customs to Canada .551 The two spreadsheets are organized around the parties' proposals on this 
score, i.e. the United States' spreadsheet is predicated on the notion that the data will be supplied 
in a more aggregated form that what Canada requests, a nd with fewer fields.  
8.99.   After receiving the parties' proposed spreadsheets, the Arbitrator proposed a slightly modified 
version of the Canadian Excel sheet to the parties for comment.552 Specifically, the Arbitrator 
proposed  to add columns for the following i nformation: (a) whether the company is subject to a 
non-selected rate; (b) if so, in which administrative review the non -selected rate was created; and 
(c) the name of the company appearing in the relevant CVD order to which the value of the shipment 
is assigned, unless the company was subject to the all -others rate (in which case the name of the 
company may not appear anywhere in any relevant USDOC record). The United  States  did not object 
to the inclusion of item (a) but considered items  (b) and (c) unnec essary since "Customs data 
provided would be for the specific administrative review where the challenged measure was applied " 
and "there is already a column for the manufacturer name ", respectively.553 The United  States also 
considered that any fields that reflected an assessment by the United  States as to whether a given 
shipment was made by an affected company should be optional for the United  States, as such fields 
would potentially be over -burdensome for the United  States to complete under a deadlin e.554 
8.100.   Canada replied favourably to the Arbitrator's proposed revisions, indicating that since the 
United  States was the party advocating the use of import data from, in particular, unaffected 
exporters, then the United  States should have to provide the impo rt data in a manner that facilitates 
Canada's calculations of a level of NI, including separation of imports from affected versus unaffected 
companies.555 Canada also asserted that information regarding from which administrative review a 
non-selected rate came was not unnecessary, as the United  States claimed, because there could be 
multiple non -selected rates created and active during a reference period.556 Canada further proposed 
that the spreadsheet should contain the factual CVD rates of all companies at the time of a triggering 
event.557 
8.101.   In light of the Arbitrator's prior decision in the section immediately above that US Customs 
should relay data to Canad a on a disaggregated shipment -by-shipment basis, the Arbitrator 
considers that a version of Canada's proposed spreadsheet be used, as the United  States' 
spreadsheet proposal is based on company -specific, but not shipment -specific, data aggregation.558 
 
550 We recall that Canada has indicated that it may require addi tional information from US Customs in 
some circumstances. Canada has not elaborated on what such information might be or proposed procedures 
with which such information would be requested. The Arbitrator thus considers that insofar as Canada wishes 
additio nal information to be provided that is not explicitly called for by the procedures in this Decision, Canada 
can raise such issues with the United  States during consultations. (See section 8.1.1.2.1.4 , below ). 
551 Exhibit CAN -147; Exhibit USA -53. 
552 Arbitrator question No.  286. 
553 United States' response to Arbitrator question No.  286, para. 18.  
554 United States' response to Arbitrator question No. 286, para. 19.  
555 Canada's response to Arbitrator question No. 286, para. 28;  comments on the United States' 
response to Arbitrator question No. 286, para. 23.  
556 Canada's comments on United States' response  to Arbitrator question No. 286, para. 22.  
557 Canada's response to Arbitrator question No. 286, paras. 26 -29; United States' response to 
Arbitrator question No. 286, paras. 17 -20; Canada's comments on the United States' response to Arbitrator 
question No.  286, paras. 21 -23; United States comments on Canada's response to Arbitrator question No. 286, 
paras. 17 -18. The United  States does not specifically object to an added column indicating the factual CVD 
rates of relevant companies, as proposed by Canada, but  does propose that that information be voluntary for 
the United  States to provide as well (United States' comments on Canada's response to Arbitrator question 
No. 286, para. 18 ). 
558 The Arbitrator notes that there was a column in Canada 's proposed spreadshe et, i.e. original column 
P, that would have reflected ordinary customs duties. We therefore note that in section 8.1.2.1 , below, the 
Arbitrator decides not to consider duties other than CVDs in the selected model. Thus, the Arbitrator deleted 
that column from the spreadsheet. All other columns from the Canadian  proposed spreadsheet remain in the 
adopted spreadsheet.  WT/DS505/ARB  
 
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Speci fically, the Arbitrator instructs the parties to use the spreadsheet template in Annex C-3 of the 
Addendum to this Decision , WT/DS505/ARB/Add.1 . 
8.102.   With respect to that spreadsheet template, we note that columns A -P have entries for the 
following information:  (A) Manufacturer name; (B) Manufacturer ID; (C) Entry Type; (D) Port Code; 
(E) Entry Date; (F) Country of Origin; (G) Export Date; (H) Importer of record; (I) Importer Number; 
(J) HTS Code Number; (K) Description of Merchandise; (L) Net Quantity in HTSUS Units; (M) Entered 
Value559; (N) CHGS (charges); (O) AD/CVD Number; and (P) Reference Period CVD Rate. Multiple 
such fields are agreed upon by the parties as necessary or helpful in identifying relevant shipments, 
assigning the values of such shipments to r elevant companies, and/or running the selected model. 
We further agree with Canada that others could potentially be helpful for verification, especially if 
Canada receives information for purposes of verification from Canadian companies that is organized 
on a shipment -by-shipment basis. We further note that the United  States has provided no specific 
reasoning as to why extracting such data from electronically filed Form 7501 and providing all such 
data to Canada in an Excel format would be unduly burdensome within the allotted time frame.560 
8.103.   Further in the spreadsheet template, columns Q -W have entries for the following 
information: (Q) Affected Respondent Company (Y/N); (R) Unaffected Respondent Company (Y/N); 
(S) All Others (Y/N); (T) Non -selected  Rate (Y/N); (U) If yes non -selected, from which administrative 
review did the non -selected rate arise?; (V) If not All Others, in the view of US Customs, name of 
the company appearing in the relevant CVD order document(s) to which the value of the shipmen t 
should be allocated; and (W) Factual CVD Rate. Rather than being taken directly from the Form  7501 
information, these fields are part of an assessment by the United  States regarding to which company 
to assign the value of the shipment in each row and whe ther the company is affected or unaffected. 
We consider that columns that reveal what kind of CVD rate the company was assigned will assist 
in that endeavour. Moreover, the factual CVD rate of Canadian companies is a necessary input into 
the selected model . We consider that such fields should be mandatory, rather than discretionary, as 
the United  States advocates.561 As Canada has indicated, Canada will likely have to make these 
same determinations in deciding whether companies are affected or unaffected and  assigning 
appropriate CVD rates to them when running the selected model. Particularly in light of the fact that 
the model selected is a version of the United  States ' proposed model, we see nothing unreasonable 
about requiring the United  States to share in  the burden of assessing and organizing the information 
necessary to run the model accurately.562 Moreover, the United  States has provided no specific 
reasoning as to why making such assessments in the allotted time  frame would be unreasonable.563 
8.104.   The Arbitr ator therefore instructs the United  States to use the spreadsheet template in  
Annex C -3 of the Addendum to this Decision, WT/DS505/ARB/Add.1,  to relay US Customs 
information to Canada. The United  States shall fill out all columns A -W in that template when 
providing such information on a shipment -by-shipment basis.  
(d) Attestations  
8.105.   The Arbitrator recalls that the United  States agreed to provide the following written 
attentions to Canada accompanying US Customs data: (a) the data set is inclusive of all reque sted 
information; (b) US Customs used its best efforts to search for requested data and properly assign 
the values associated with relevant shipments to the relevant affected and unaffected companies;  
 
559 We note that this field, i.e. "Entered Value ", shall, when summed for all shipments from a particular 
company, be the value of imports from that company.  
560 We note that, further below, the United  States will be granted 45 days to provide US Customs data 
to Canada following an initial notification. That deadline, however, can be extended by mutual consent of the 
parties. See para . 8.106 , below . 
561 United States' response to Arbitrator question No. 286, para. 19.  
562 We recall that the United  States asserted that columns (U) and (V) were unnecessary (United States' 
response to Arbitrator question No.  286, para. 18 ). However,  a company could be subject to a non -selected 
rate that was not created in a triggering event, and the manufacturer name as provided by the importer in 
Form 7501 may not exactly match that of the company as written in the relevant C VD order documents. Thus, 
we disagree with the United  States that such fields would always be unhelpful.  
563 The United  States asserts, without providing details, that providing such assessments could be 
unduly burdensome  (United States response to Arbitrato r question No. 286, para. 19 ). We note that, further 
below, the United  States will be granted 45 days to provide US Customs data to Canada following an initial 
notification. See para . 8.106 , below . That deadline, however, can be extended by mutual consent of the 
parties.  WT/DS505/ARB  
 
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  and (c) such search and assignment occurred in a manner  that US Customs believes is consistent 
with its task of administering CVD orders and collecting duties thereunder.564 The Arbitrator therefore 
instructs the United  States to provide such written attestations along with any US Customs data that 
the United  States relays to Canada in the spreadsheet template described in the section immediately 
above.  
(e) Deadline for transmittal  
8.106.   Regarding a deadline by when the United  States shall transmit US Customs data to Canada 
following Canada's initial notification, the Arbitrator considers it reasonable to  follow the parties' 
most recent positions on this score and  set this deadline for 45 calendar days following the receipt 
by the United  States of Canada's initial notification  (which can be extended by  mutual consent of 
the parties) . A period of two weeks, originally proposed by Canada, in our view, is unreasonably 
short given the amount of data that the United States will have to collect and analyse.  
8.1.1.2.1.4   Verification of US Customs data and consultations pr ocedures  
8.107.   Canada explains that, after receiving data from US Customs, it would then verify the data 
to ensure that it is neither under - nor over -inclusive of relevant Canadian exports, and that affected 
Canadian exporters were properly identified by US Cust oms. Canada indicates that verification 
ensures that the data are accurately reported by US Customs and contain no inadvertent errors.565 
Canada further explains that its concerns regarding the accuracy of US Customs data in this context 
are primarily drive n not by concerns surrounding US Customs' behaviour in conducting searches of 
the ACE Database, but by the fact that, with respect to a pre -investigation reference period, the 
relevant HTS codes may yield an under -inclusive set of Canadian exports566, and t here may be 
difficulties in executing accurate searches given potential errors in the reported data in Form 7501 
data fields. In particular, Canada indicates that the "Manufacturer Name" field is a free -form text 
field and thus company names could be incor rectly spelled at times.567 
8.108.   Canada indicates that Canada would verify the US Customs data in two ways: (a) against all 
or a sample of relevant Canadian exporters' (i.e. company -specific) data, which Canada would obtain 
directly from exporters; and (b) again st non -confidential aggregated (i.e. non -company specific) 
data from Statistics Canada, USITC DataWeb, and/or USA Trade Online.568 Canada clarifies that it 
would only verify a given Canadian exporter's company -specific data against that same exporter's 
comp any-specific data in the dataset provided by US Customs.569 Canada would also confirm that 
affected exporters were properly identified, and if they were not, Canada would determine which 
shipments were made by affected exporters.570 
8.109.   Canada proposes that if the US Customs data were revealed by verification to be 
under -inclusive of shipments by relevant exporters, "Canada may supplement the U.S. Customs 
data with company -specific export data, obtained from the affected exporters, for products falling 
 
564 The United  States also offered an oral assurance, at the mee ting of the Arbitrator , that these three 
things will be done in all relevant instances of data transmittal.  
565 Canada's response to Arbitrator question No. 155 , paras. 107-109. 
566 This is so because, as Canada explains, the USDOC relies on the written descri ption of the product to 
define the investigation's scope, and that description may be either broader or narrower than the HTS codes 
covering the subject product. Canada cites several USDOC decisions in support of its position in this regard 
(Canada's writt en submission, paras. 177 -179). In support of this line of reasoning, Canada provides an 
example of a CVD investigation in which the USDOC explained that certain HTS codes might contain subject 
products even though the order did not mention such codes (Com merce, "Final Scope Ruling on the 
Antidumping Duty and Countervailing Duty Orders on Softwood Lumber from Canada: Harmer Steel Products 
Co." (June 29, 2020), Commerce, "Final Scope Ruling on the Antidumping Duty and Countervailing Duty Orders 
on Softwood L umber from Canada: Harmer Steel Products Co." (June 29, 2020) ( Exhibit CAN -22), p. 13).  
567 Canada's response to Arbitrator question No. 162 , paras. 134 -137; comments on the United States'  
response to Arbitrator question No. 231, para. 100. 
568 Canada's response to Arbitrator question No. 86, para. 185, and No. 155, para. 109. Canada asserts 
that it can use these aggregated data sources to reveal large scale errors (Canada's response to Arbit rator 
question No.  155, para. 109; response to Arbitrator question No.  156, para. 114 ). 
569 Canada's response to Arbitrator question No. 160 , para. 128 . 
570 Canada's response to Arbitrator question No. 86, para. 185.  WT/DS505/ARB  
 
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within th e product description, but not covered by the reference  HTS Codes."571 Canada indicates 
that, without having obtained shipment -specific information directly from Canadian companies, 
Canada would be unable to determine whether a specific shipment  is under - or over -inclusive.572 
Canada asserts, however, that Canada may still be able to determine from the written product 
description in the CVD order whether the relevant HTS codes are under -inclusive of relevant 
Canadian exports, perhaps with the assi stance of consulting USDOC scope rulings.573 
8.110.   Canada explains that if Canada were to need additional data to supplement the US Customs 
data, Canada would provide any such supplemental data to the United  States within four weeks of 
Canada's receipt of the US Customs data, and then Canada would consult with the United  States 
about such data for a subsequent two -week period.574 Canada also explains, more generally, that 
"[i]f verification reveal s errors of any kind, Canada would consult with the United  States during a 
two-week period " to correct any errors if possible.575 If the parties are unable to agree on a common 
dataset at the conclusion of such consultations, Canada proposes that Canada would then have the 
discretion to correct errors in the US Customs datas et and/or supplement such data "with 
company -specific data obtained from affected exporters".576 Canada would further send written 
explanations to the United  States regarding how Canada would alter the dataset.577 Canada asserts 
that leaving such discretion to Canada is appropriate because Canada is the complainant in this 
dispute and NI to Canada accrues due to the United  States' non -compliance with respect to the 
OFA-AFA Measure.578 Canada also clarifies that it would be able to share information used to ver ify 
Customs data with the United  States taken from aggregate data sources and the USDOC's record 
documents during consultations, with the exception of data obtained directly from Canadian 
companies, who would have to consent to the release of their data to  the United  States in order for 
Canada to share such data.579 Canada also considers that if consultations procedure s fail to resolve 
any disagreements between the parties, the United  States, as the party against whom suspension 
will occur, should not be given the discretion to ultimately pick the values of imports.580 
8.111.   The United  States does not object to Canada's general proposal to allow Canada to verify 
US Customs data that Canada rec eives, and agrees with the proposed two -week consultations 
period. The United  States also agrees that US Customs data may contain errors, such as typos in 
the "Manufacturer Name" and/or "Manufacturer ID" fields. The United  States indicates that 
US Customs would use a combination of these fields, along with company -specific AD/CVD case 
numbers when possible, to confirm which import values should be assigned to which company.581 
8.112.   The United  States asserts, however, that it would be inappropriate to allow Canada  to 
supplement US Customs data with additional exports from affected exporters (i.e. to correct alleged 
under -inclusiveness of the US Customs dataset) without Canada also providing for a process through 
which to correct for potential over -inclusiveness of the US Customs dataset and/or a way to 
supplement exports from unaffected exporters.582 Moreover, the United  States argues that allowing 
Canada the discretion to supplement the dataset in this manner would mean that Canada would 
have no incentive to engage in consultations with the United  States on this subject.583 The 
 
571 Canada's response to Arbitrator question No. 86, para. 187. See also Canada's response to Arbitrator 
question No.  227, para. 209. In this context, Canada asserts that "exporters would have to engage in a 
process of determining whether previous exports fell within the scope of the relevant counter vailing order, 
based on their sales information (i.e. data held by producers that is more descriptive than HTS Code data)." 
(Canada's response to Arbitrator question No. 86, fn 214  to para. 187 ). 
572 Canada's response to Arbitrator question No. 167, para. 155.  
573 Canada's response to Arbitrator question No. 167, paras. 156 -157. 
574 Canada's response to Arbitrator question No. 86, para. 187. See also Canada's response to Arbitrator 
question No.  165, paras. 144 -146. 
575 Canada's response to Arbitrator question No. 86, para. 186.  See also Canada's response to Arbitrator 
question No. 165, para. 145.  
576 Canada's response to Arbitrator question No. 165, para. 145.  
577 Canada's response to Arbitrator question No . 165, para. 145.  
578 Canada's response to Arbitrator question No. 165 para. 146.  
579 Canada's response to Arbitrator question No. 225, para. 202. 
580 Canada's comments on the United States' response to Arbitrator question No. 221, para. 82 . 
581 United  States' res ponse to Arbitrator question No. 173, para. 91, and No. 177 , paras. 97 -98. Canada 
notes that US Census corrects for other errors in the raw data received via Forms 7501 as well (Canada's 
comments on the United States' response to Arbitrator question No. 231, para. 100 ). 
582 United  States' response to Arbitrator question No. 173, para. 88 ; comments on Canada's response to 
Arbitrator question No. 221, para.  125. 
583 United  States' comments  on Canada's response to Arbitrator question No. 221, para. 129.  WT/DS505/ARB  
 
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  United  States further argues that Canada should be given a deadline by when to verify the 
US Customs data, especially in light of the fact that Canada wishes the Arbitrator to provide a 
deadlin e by when the United  States must provide US Customs data to Canada following a triggering 
event. The United  States suggests that Canada be allowed 20 days to verify US Customs data.584 
8.113.   The United  States agrees with Canada that if verification reveals any al leged errors in the 
US Customs data, the parties should consult in an attempt to correct such alleged errors, if possible , 
and that  the parties should consult to reach an agreement if  at any time either party considers that 
more time should be allotted for  any particular stage of the process.585 
8.114.   The United  States also points out that the data sources that Canada proposes to use to verify 
US Customs data have inherent limitations for that purpose. The United  States asserts, for example, 
that Statistics Canada  data are aggregated, rather than company -specific, and thus could not be 
used to verify the values of imports from individually investigated Canadian companies.586 Moreover, 
the United  States notes that it is unclear how Canadian companies would maintain a nd present their 
data to Canada if requested to do so.587 In particular, the United  States points out that if the 
companies denominate their sales in Canadian dollars, then converting such values to US dollars 
would be necessary  and would  likely requir e a prescribed conversion rate.588 
8.115.   The United  States also stresses that, as a general matter, and in keeping with the principles 
of transparency, the preference for using verifiable data, and encouraging good faith consultations 
between the parties, Canada should not use any data to calculate the value s of imports or verify 
US Customs data that cannot be shared with the United  States. The United  States therefore asserts 
that using data obtained directly from Canadian companies is problematic in light of Cana da's 
explanation that Canada could not share such information with the United  States without obtaining 
the consent of the company.589 The United  States also argues that "Canada should only be permitted 
to use company -specific data for verification if Canada  is able to verify both the affected and the 
unaffected Canadian companies", although Canada has stated that it is unlikely that Canada will be 
able to verify the data of unaffected exporters.590 
8.116.   The Arbitrator notes that the parties ' arguments raise three main issues in this context: 
(a) whether to provide for verification and consultations procedures, and if so, deadlines governing 
such procedures; (b) whether to place restrictions on the data Canada can use to verify US Customs 
data; and (c) prescribed so lutions if the parties fail to agree on the relevant values of imports for 
relevant companies at the end of consultations procedures. We address each in turn.  
(a) Verification and consultation procedures, generally  
8.117.   The parties agree that, in principle, allowing for Canadian verification of US Customs data 
and US -Canadian consultations regarding any disagreements concerning the calculation of relevant 
values of imports would be appropriate. We consider this common position reasonable. As explai ned 
by both parties, US Customs data are not infallible, and errors may be present in them. This is so, 
in particular, due to potential errors occurring when importers relay data to US Customs in 
Form 7501. Given the parties' comments, it would appear that  the "Manufacturer Name " field may 
be particularly susceptible to errors, as company names may be complex at times. Thus, we consider 
it appropriate to allow Canada a chance to discover potential errors in the US Customs data and 
ideally correct them in co operation with the United  States via consultations.  
8.118.   We note, therefore, that the parties disagree regarding how much time Canada should have 
to verify US Customs data. Canada proposes four weeks whereas the United  States proposes 
 
584 United  States' response to Arbitrator question No. 173, para. 91.  
585 United  States' response to Arbitrator question No. 173, para. 91.  
586 United  States' response to Arbitrator question No. 173,  para. 87. See also United  States' response to 
Arbitrator question No. 156.  
587 United  States' response to Arbitrator question No. 86, para. 243.  
588 United  States' response to Arbitrator question No. 86, para. 243.  
589 United States' comments on Canada's res ponse to Arbitrator question No. 193, para. 63 , and 
No. 225, paras. 139 -141. 
590 United States'  comments  on Canada's response to Arbitrator question No.  225, para. 140 ( referring 
to Canada's response to Arbitrator  question  No. 227, para. 208 ("With respect to data for unaffected exporters 
required under the U.S. model, it is probable that Canada will be unable to verify the data because it is unlikely 
that unaffected exporters would provide Canada access to their records .")). WT/DS505/ARB  
 
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20 days. We consider 30 da ys to be reasonable, and discern no reason why 20 days is a superior 
option in this context.591 We therefore adopt the Canadian position in this context, and will grant 
Canada 30 calendar days to verify US Customs data, from the date of receipt of such data , and to 
send any objections regarding the data to the United  States.  Moreover, and as consistent with the 
parties' agreement on this subject, we consider that the parties shall be given a two -week 
(14 calendar day) period over which to perform consultatio ns following Canada's relay of any 
objections regarding US Customs data to the United States . The parties can extend either deadline 
by mutual agreement.  
(b) Restrictions on data used for verification  
8.119.   We recall that the United  States has argued that certain restrictions should be placed on 
what information Canada may use to verify US Customs data. Specifically, the United  States argued 
that: (a) all information that Canada uses to verify US Customs data must be able to be shared with 
the United  States  during consultations; and (b) data obtained directly from Canadian exporters 
should not be used for verification because Canada has indicated that it would presumably be unable 
to obtain information from both affected and unaffected companies.  
8.120.   The Arbitra tor recognizes the value in Canada sharing information with the United  States 
that Canada uses for verification purposes. Indeed, the efficacy of consultations would likely be 
significantly aided if both parties are able to examine all relevant data. The A rbitrator therefore 
considers that Canada should endeavour to share all information with the United  States that Canada 
uses for verification purposes insofar as the United  States requests such information during the 
consultations process.  
8.121.   The Arbitrator re cognizes, however, that Canada may not be able to share all such 
information with the United  States. In particular, Canada has explained that information obtained 
directly from Canadian exporters can only be shared with the United  States if the providing c ompany 
consents to such sharing. Although this is the key example discussed by the parties in this context, 
the Arbitrator recognizes that this example reflects a potentially more general issue arising in cases 
when confidentiality considerations restrict Canada's ability to share information with the 
United  States. We therefore note the United  States' more general argument that Canada should not 
be able to rely on any information for verification purposes that cannot be shared with the 
United  States.  
8.122.   The A rbitrator declines, however, to ex ante  restrict Canada's ability to rely on any particular 
data when verifying US Customs data, whether due to concerns about the sharing of such data with 
the United  States or due to concerns regarding from what subset of companies Canada might collect  
data with which  to verify US Customs data. The ultimate goal of the verification process is for the 
parties to arrive at the most accurate dataset that is reasonably possible. We therefore note that 
even if the outright shari ng of certain information with the United  States may be impracticable, or 
Canada may obtain information from only a subset of Canadian companies, we see no reason to 
inhibit Canada's ability, based on its own review of such information, to draw the United  States' 
attention to potential errors in the US Customs data set and about which the parties can consult. 
We further note that the Arbitrator has already prescribed certain minimum initial search criteria for 
the purpose of locating relevant Canadian impor ts during a reference period592, and, further below, 
the Arbitrator prescribes additional criteria to use to resolve party disagreements over how to assign 
the value of imports to Canadian companies that cannot be resolved through consultations.593 The 
prese nce of such procedures, in our view, reasonably limits either party 's discretion to select the 
relevant dataset in this context.  
8.123.   In light of the for egoing , the Arbitrator instructs Canada to share with the United  States all 
information that Canada uses to verify US Customs data insofar as the United  States requests such 
information during the consultations process. The exception to this rule is when confidentiality 
restrictions prevent Canada from sharing such information with the United  States, most notabl y in 
 
591 We note that, in parti cular, some time may be required for Canada to identify and obtain information 
from relevant sources for purposes of verification, including from the exporters themselves. (See  section 
8.1.1.2.1.4 (b), below, finding that Canada may use any data it wishes to verify US Customs data, including 
data received directly from Canadian exporters).  
592 See para. 8.92, above.  
593 See section 8.1.1.2.1.4 (c), below.  WT/DS505/ARB  
 
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  the context of Canada obtaining information directly from Canadian exporters who we understand 
must consent to such sharing. Thus, when Canada requests otherwise confidential information from 
a source, Canada shall, as part of such request, also seek the written consent of the providing 
source(s) to Canada allowing Canada to share such information with the United  States for purposes 
of verification and consultations. If the United  States requests information from Canada that cannot 
be shared due to con fidentiality reasons, Canada shall so inform the United  States and also provide 
the reasons why such information cannot be shared.  
(c) Resolution of disagreements following consultations  
8.124.   If, at any relevant time after Canada receives US Customs information  from the 
United  States, the parties agree on the data set to be used to calculate the value of imports (whether 
by lack of objections by Canada or via consultations), the parties shall use that agreed upon data. 
We note, however, that such party agreements may not result, even after consultations occur. The 
Arbitrator therefore considers it necessary to prescribe procedures regarding how the values of 
imports should be assigned to relevant Canadian companies in the event of such disagreements, or 
else such disagreements might paraly ze the suspension process.  
8.125.   Canada considers that if the parties are unable to resolve their differences at consultations, 
then Canada should " have the discretion to supplement the U.S. Customs data, or correct any errors, 
with company -specific data obtained from affected exporters".594 This is appropriate in Canada's 
view because Canada is the aggrieved  party in this dispute overall.595 In doing so, Canada indicates 
that: (a) the companies have more data than US Customs regarding certain shipments ; (b) Canada 
would seek attestations from t he companies that the information relayed to Canada about shipments 
is accurate ; and (c) Canada would perform such supplementation in an objective manner.596 While 
Canada apparently envisions a possibility of being able to verify unaffected exporters ' data in the 
same way, Canada generally believes that it is unlikely that Canada would be able to secure such 
information from unaffected companies with which to verify US Customs data.597 Canada also asserts 
that minimum search criteria prescribed by the Arbitra tor could be utilized in principle to resolve 
disagreements, but Canada favours using these as initial search criteria of US Customs data, not as 
a means by which to resolve differences arising in consultations.598 Canada stresses, however, that 
the United  States should not get the final say in how to assign values of imports.599 
8.126.   The United  States originally proposed that the parties continue to consult for as long as 
disagreements persist, but later indicated that the parties should instead defer to the US C ustoms ' 
judgment as to how to assign the values of imports to relevant companies because US Customs is 
the agency tasked with making such determinations and thus should be trusted as the most effective 
decision -maker in this context.600 The United  States also asserts that it is unclear why Canadian 
companies would have records of shipments that are, in the companies ' opinion, subject to CVDs 
that were not captured by US Customs ' data.601 The United  States further dismisses Canada 's 
relian ce on its status as the original complainant in this context as irrelevant.602 Moreover, the 
United  States asserts that if the parties are unable to agree on the values of imports at the end of 
consultations, then using prescribed search criteria for US Cus toms data could be a reasonable 
solution.603 
8.127.   The Arbitrator first notes the United  States' proposal that consultations continue for as long 
as necessary until disagreements are resolved. We consider this a non -viable approach, as it could 
 
594 Canada's response to Arbitrator question No. 165, para. 145.  
595 Canada's response to Arbitrator question No. 165, para. 146.  
596 Canada's response to Arbitrator question No. 221, paras. 186 and 188;  comments on the 
United  States' response to Arbitrator quest ion No. 221, paras. 92-94. 
597 Canada's response to Arbitrator question No. 227, para. 209 . 
598 Canada's  response to Arbitrator question No. 221, para. 176; comments  on the United  States'  
response to Arbitrator question No. 221, para. 92 . 
599 Canada's  response t o Arbitrator question No. 221, para. 190; comments  on the United  States'  
response to Arbitrator question No. 221, para. 92.  
600 United  States' response to Arbitrator question  No. 173, para. 91; No. 221, paras. 136 -143, and 
No. 230, paras.  147-150; comments on Canada's  response to Arbitrator question No. 221, paras. 121 -129. 
601 United States'  response to Arbitrator question No. 230, para. 148.  
602 United States'  response to Arbitrator question No. 230, para. 150. 
603 United States'  response to Arbitrator question No. 221, para. 138.  WT/DS505/ARB  
 
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allow such disagre ements to paralyze the suspension process indefinitely. The Arbitrator therefore 
rejects this proposal.  
8.128.   We thus note that the parties have discussed three additional options in this context: 
(a) allowing Canada to supplement US Customs data with company -specific data obtained directly 
from Canadian exporters; (b) exclusive reliance on US Customs ' data and also US Customs ' 
judgment; or (c) search criteria of US Customs data prescribed by the Arbitrator that could resolve 
disagreements. The Arbitrat or has certain common concerns regarding options (a) and (b). 
Specifically, they both cede ultimate authority to entities (whether parties to this proceeding, and/or 
Canadian companies subject to the relevant CVD order604) to determine the value of imports,  but 
such entities are directly interested in the level of NI being calculated. We also note an additional 
issue with Canada 's suggestion that Canada and/or the Canadian companies could identify shipments 
of products that do not fall under the 10 -digit HTS  codes referenced in the CVD order but that do 
fall under the product description in the CVD order (the latter being authoritative605). This essentially 
means that Canada and/or the companies would be issuing de facto  scope rulings as the order 's 
product coverage. The record reflects that such scope rulings can be involved606, however, and thus 
we consider it unduly speculative as to whether Canada and/or the Canadian companies would reach 
the same conclusions as the USDOC , had the USDOC performed a n authoritative scope ruling 
instead.607 We therefore consider options (a) and (b) as unfavourable, particularly if another 
reasonable option exists.  
8.129.   We consider that such an option does exist, i.e. option (c) described in the paragraph 
immediately above, which suggests using prescribed search criteria to resolve disagreements that 
persist following consultations. The Arbitrator proposed such search criteria to the parties, and both 
parties recognized that such search criteria could be at least part of a rea sonable solution. We further 
consider that the strength of this approach is that it cedes to neither party nor to Canadian 
companies the discretion to assign values of imports to Canadian companies, but rather provides 
objective and neutral criteria for su ch assignment. Moreover, it relies on what both parties generally 
agree is the best single data source for the values of imports, i.e. US Customs ' ACE database.608 We 
recognize, of course, that prescribed search criteria are by nature somewhat rigid, althou gh the 
Arbitrator still considers that weakness preferable to allowing the United  States, Canada, and/or 
Canadian companies the ability to assign export values to Canadian companies unilaterally. Finally, 
we note that the parties have both asserted that th eir objectivity may be relied upon to reach 
reasonable results under options (a) or (b), described in the preceding paragraph. We consider that 
the parties can fully apply the same objectivity in the context of agreeing to a reasonable dataset 
with the ass istance of prescribed search criteria.  
8.130.   We therefore note that disagreements between the parties may arise as to four key issues 
in this context: ( i) whether a shipment came from Canada ; (ii) whether certain shipments were 
 
604 We note Canada's suggestion that Canada obtain attestations from companies indicating the 
reliability of information that such companies relay to Canada. While perhaps helpful, we note that we would 
consider such attestations as somewhat less reliable than those offered by the United  States. (See para . 8.105 , 
above ). Indeed, unlike the United  States, such companies are neither WTO Members nor are they subject to 
this arbitration proceeding and Decision.  
605 Canada's response to Arbitrator question No. 86, para. 187. Canada's response to Arbitrator question 
No. 227, para. 209. Canada's response to Arb itrator question No. 86, fn 214.  
606 See Canada's written submission, para. 178; Exhibit CAN -22; Commerce, "Antidumping and 
Countervailing Duty Orders on Certain Softwood Lumber Products from Canada: Final Scope Ruling on Cedar 
Shakes and Shingles" (Septembe r 10, 2018)  (Exhibit CAN -23); Commerce, "Final Scope Ruling for Certain 
Hardwood Plywood Products from the People's Republic of China: Request by the Coalition for Fair Trade in 
Hardwood Plywood and Masterbrand Cabinets Inc." (September 7, 2018) (Exhibit C AN-24); Commerce, 
"Certain Tool Chests and Cabinets from the People's Republic of China: Final Scope Ruling on Quality Craft 
Industries, Inc.'s Products A and B" (May 21, 2018)  (Exhibit CAN -25); and Commerce, "Final Scope Ruling for 
Certain Steel Threaded Rod from the People's Republic of China: Colonial Elegance Inc." (August 1, 2014)  
(Exhibit CAN -26). 
607 We also note that Canada explains that such supplementation would mainly be expected to be 
performed if the 10 -digit HTS codes in the CVD order were under inclusive of the subject product (Canada's 
comments on the United States' response to Arbitrator question No.  221, para. 94 ). We thus recall that the 
HTS codes will only be the primary search tool used to identify the relevant product for pre -investigation 
reference periods. For post -investigation reference period the AD/CVD case number will be the primary search 
tool, which sh ould, in theory, capture all shipments covered by the CVD order whether or not they fall within 
the scope of the referenced HTS codes (see section 8.1.1.2.1.3 (a), above ). 
608 We recall that the US Customs database has significant indicia of reliability (see section  8.1.1.2.1.1 , 
above ).  WT/DS505/ARB  
 
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  exported during the reference peri od; (iii) whether a shipment contained the relevant  product ; and 
(iv) to which Canadian company  relevant shipments should be attributed. We address each in turn.  
i. Shipments from Canada  
8.131.   We recall that a shipment must, of course, come from a Canadian  company in order to be 
considered as part of an affected or unaffected Canadian variety. The parties have not recognized  
this issue as a likely source of disagreement. We note, therefore, that Canada proposed using the 
"Country  of origin " field in the ACE Database as determinative of whether a shipment came from 
Canada.609 The United  States has raised no objection to this, and further listed this field among 
those that it considers significant for US Customs data searches.610 We further discern no other fields 
that the parties have referenced as being any more relevant to this issue.  
8.132.   Thus, if, after consultations, the parties disagree regarding whether a particular shipment 
came from Canada, if the "Country of origin " field lists C anada as that country, then the shipment 
shall be considered a shipment from a Canadian company.611 
ii. Shipments during the reference period  
8.133.   The Arbitrator proposed to the parties that if the parties disagree as to whether a particular 
shipment reflected o n Form 7501 entered the US market  during the reference period, then the 
"Entry  Date" field on that Form 7501 for the relevant shipment will be determinative . The parties 
agreed with this criterion.612 The Arbitrator therefore adopts this criterion to resolv e differences 
following consultations regarding whether a shipment should be counted as one occurring during the 
reference period.613 
iii. Shipments of the relevant product  
8.134.   The Arbitrator proposed to the parties the following if the parties disagree as to w hether a 
particular shipment included the relevant product covered by the scope of the relevant CVD order : 
a. for a pre -investigation reference period , all the 10 -digit HTS codes in the CVD order will 
de determinative  (i.e. all products entering under one or more HTS codes would be 
treated as the relevant product); and  
b. for a post -investigation reference period, the relevant AD/CVD case number will be 
determinative  (i.e. all products that have been assigned the relevant AD/CVD case 
number could be treated as th e relevant product).614 
 
609 Canada' s response to Arbitrator question No. 154, paras. 103-104, and No. 166 , paras. 147 -154. 
610 See Exhibit USA -53 (listing Country of origin as search field).  
611 We note that this "Country of origin " field was already prescribed by the Arbitrator as a minimum 
initial search criterion ( see para. 8.92, above). Thus, all shipments with "Canada " as the country of origin 
should appear in the dataset provided to Canada. The dataset may, of course, have additional shipments 
included as well if US Customs believed they should have been included at the time of the initial search.  
612 Canada's response t o Arbitrator question No.  221, para. 181; United States'  response to Arbitrator 
question No.  221 para. 139 ; Canada's comments on the United States' response to Arbitrator question 
No. 221, para. 85.  
613 We note that this "Entry date " field was already prescr ibed by the Arbitrator as a minimum initial 
search criterion ( see para. 8.92, above). Thus, all shipments with an "Entry date " taking place  during t he 
reference period should appear in the dataset provided to Canada. The dataset may, of course, have additional 
shipments included as well if US Customs believed they should have been included at the time of the initial 
search.  
614 For companies that were e xcluded entirely from the scope of the CVD order, US Customs shall also 
search for the name of those companies, and for such companies, all shipments entering under one or more of 
the HTS codes  in the relevant CVD order  would be treated as the relevant pro duct. Both parties agree with 
such criteria. (Canada's response to Arbitrator question No. 221, paras. 182 -183; United States' response to 
Arbitrator question No. 221, para. 140 ). WT/DS505/ARB  
 
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8.135.    The Arbitrator therefore adopts these criteria to resolve differences following consultations 
regarding whether a shipment should be counted as one including the relevant product.615 
iv. Assignment of a shipment 's value to a Canadian company  
8.136.   The Arbitrator proposed to the parties that if the parties disagree regarding to which 
Canadian company to assign a particular shipment of the relevant product reflected in Form 7501, 
the shipment will be assigned to an individually investigated or reviewe d company , or a company 
subject to a non -selected rate616 (whether affected or unaffected by the OFA -AFA Measure) if any of 
the four criteria apply  that appear in paragraph 8.140 (a) below . The parties had no significant 
objections to these criteria as written other than with respect to issues that are addressed in other 
sections of this Decision.  
8.137.   However, the United  States did assert that two or more of the four criteria must point to the 
same company in order for the shipment 's value to be assigned to that company, because using just 
one "would contradict the other information present that likely led to the parties ' initial 
disagreement, and would not be  appropriate ".617 Canada disagrees with this suggestion by the 
United  States, arguing that it is impractical.618 Canada also asserts that the United  States ' proposal 
would not work in instances where the same number of criteria pointed to different companies. 
Canada therefore "proposes, in case of a conflict, to assign the shipment to that company which 
fulfils the most of the criteria (…). Where the two conf licting companies fulfil the same number of 
criteria, the shipment should be assigned to an affected company ".619 
8.138.   The Arbitrator agrees in principle with the United  States that it would be preferable for more 
than one of the listed criteria to point to the same company in order for the value of the relevant 
shipment to be assigned to that company. The Arbitrator also agrees with Canada, however, that 
impasses should not arise if and when the same number of criteria point to different companies. 
Thus, the Arb itrator considers that a reasonable solution is, as Canada suggests, to assign the value 
to the company to which most of the criteria apply. Further, and in the absence of any other 
reasonable proposals from the parties on this score, we consider it reason able to prescribe that if 
the same number of criteria point to different companies, then: (a) if such companies are all affected 
or all unaffected, US Customs shall use its best judgment in assigning the value to one of those 
companies; or (b) if such comp anies are a mix of affected and unaffected companies, US Customs 
shall use its best judgment in assigning the value to the (or one of) the affected company 
(or companies).  
8.139.   In this context, we are mindful of Canada 's point that minor variations in spelling may exist, 
in particular, with respect to the Manufacturer Name and Manufacturer ID fields, contributing to the 
need for the parties potentially to make judgment calls regarding to which company actually named 
in a CVD order such shipments should be assign ed.620 These prescribed criteria are designed to 
mitigate, inter alia , that concern. Further, the United  States will offer written attestations 
accompanying US Customs data relayed to Canada indicating that it has used its best efforts in 
 
615 We note that these fields (i.e. HTS codes and AD/CVD case number) were already prescribed by the 
Arbitrator as a minimum initial search criterion. (See para. 8.92, above). Thus, all shipments matching such 
codes or AD/CVD case numbers should appear in the dataset provided to Canada. The dataset may, of course, 
have additional shipments included as well if US Customs believed they should have been in cluded at the time 
of the initial search.  
616 For purposes of this guidance, the term "individually investigated company " shall include companies 
that were excluded entirely from the scope of the CVD order because their individual CVD rates were found to 
be de minimis  in an original investigation.  
617 United States' response to Arbitrator question No.  290, para. 33. See also the United States' oral 
response to Arbitrator question No. 221 at the meeting of the Arbitrator ; response to Arbitrator question 
No. 221, para. 141.  
618 Canada's comments on the United States' response to Arbitrator question No.  221, para. 90. Canada 
also correctly notes that the prescribed criteria apply equally to both affected and unaffected companies  
(Canada's c omments on the United Sta tes' response to Arbitrator question No. 221 , para. 91 ). 
619 Canada's comments on the United States' response to Arbitrator question No. 290, para. 33.  
(emphasis original)  
620 Canada's response to Arbitrator question No.  221, para. 186 ; United States' response to Arbitrator 
question No.  177, para. 97.  WT/DS505/ARB  
 
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  assigning values o f imports to companies in a manner consistent with its administration of CVD 
orders.621 
8.140.   The Arbitrator thus provides the following instructions to the parties to resolve 
disagreements regarding assignments of values to Canadian companies that persist follow ing 
consultations:  
a. If the parties disagree as to which company a particular shipment reflected on 
Form 7501 should be assigned after consultations occur, then t he shipment will be 
assigned to an individually investigated or reviewed company , or a company s ubject to 
a non -selected rate622 (whether affected or unaffected by the OFA -AFA Measure) if any 
of the following applies:  
i. the "Manufacturer Name" matches that of an individually investigated or reviewed 
company , or company subject to a non -selected rate , as written in the relevant 
USDOC final determination, CVD order, or final results623; 
ii. the "Manufacturer ID" of the company was previously or subsequently assigned 
to a company in any other Form 7501 reflecting imp orts of any product during 
the reference period whose name matches that of an individually investigated or 
reviewed company , or a company subject to a non -selected rate , as written in 
the relevant USDOC final determination, CVD order, or final results, or it is 
otherwise known by US Customs that the Manufacturer ID specifically relates to 
an individually investigated or reviewed company or company subject to a 
non-selected rate;  
iii. the company -specific AD/CVD number assigned to the company was previously 
or subsequently assigned to a company in any other Form 7501 reflecting imports 
of any product during the reference period whose name matches that of an 
individually investigated or reviewed company , or a company subject to a 
non-selected rate , as written in th e relevant USDOC final determination, CVD 
order, or final results, or if it is otherwise known by US Customs that the AD/CVD 
number specifically relates to an individually investigated or reviewed company 
or company subject to a non -selected rate; or  
iv. the relevant Form 7501 specified that the company's products are subject to a 
specific CVD rate that is unique to a particular individually investigated or 
reviewed company , or a company subject to a non -selected rate , subject to the 
relevant US CVD order.624 
b. If, for any reason, the application of the guidance above leads to a conflict (i.e. the 
assignment of a particular value of imports to more than one individually investigated 
or reviewed company , or a company subject to a non -selected rate) then the value sh all 
be assigned to the company to which most of the above -listed criteria point. If the same 
number of the above -listed criteria point to more than one company, then: (a) if such 
companies are all affected or all unaffected, US Customs shall use its best j udgment in 
assigning the value to one of those companies; or (b) if such companies are a mix of 
affected and unaffected companies, US Customs shall use its best judgment in assigning 
the value to the (or one of) the affected company (or companies).  
 
621 See para. 8.105 , above.  
622 For purposes of this guidance, the term "individually investigated co mpany " shall include companies 
that were excluded entirely from the scope of the CVD order because their individual CVD rates were found to 
be de minimis  in an original investigation. Cross -owned affiliates of such a company shall be considered to be 
part of that company for purposes of assignments of values of imports.  
623 For clarity, in this specific context, the term "USDOC final determination, CVD order, or final results " 
shall be interpreted to include any written determination by the USDOC that results  in the imposition (or 
removal) of a CVD rate on (or from) a Canadian company.  
624 The United  States has confirmed that the value of a particular shipment will be associated with an 
applicable CVD rate (United States' response to Arbitrator question No.  221, para. 142 ). WT/DS505/ARB  
 
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c. If appl ication of the above guidance would not result in the value being assigned to an 
individually investigated or reviewed company , or a company subject to a non -selected 
rate, but the shipment was otherwise associated with an import from Canada of the 
relevan t product during the reference period, then the shipment will be assigned to the 
group of companies subject to the all -others rate.625 
d. If the parties disagree as to the inclusivity of the US Customs data set (i.e. whether the 
dataset should be supplemented with additional shipment values not contained in the 
US Customs data set), then the dataset shall not be supplemented.  
8.141.   The Arbitrator underlines that these instructions are intended as a last resort for the 
resolution of disagreements after the parties engage in consultations, and that the dataset as agreed 
by the parties shall always be the preferred dataset.  
8.1.1.2.1.5   Import data from unaffected Canadian producers  
8.142.   As noted in section  7.2.2.4 , above , Canada argued that it cannot reasonably use  values of 
imports from unaffected Canadian exporters as a  discrete  input in any model selected by the 
Arbitrator. Canada based this argument  on alleged difficulties in verifying US  Customs data 
regarding values of imports for unaffected exporters, and, relatedly, difficulties in obtaining values 
of imports for unaffected companies in the absence of US Customs data. As expressed in that section , 
the Arbitrator  disagree s with Canada that such alleged difficulties were as serious as Canada argued, 
and thus the Arbitrator did  not consider it an issue that strongly mitigated against the use of a 
four-varieties version of the US model, which cannot b e run without information on unaffected 
Canadian imports  (as this constitutes one of the four varieties used in the model ).626 With the 
assistance of the preceding discussion s in section 7.2.2 , above , and also the sections above relating 
to the calculation of values of imports , pertaining to model selection , as helpful context, we 
therefore, at this point, respond to Canada's concerns on this data-related front in greater detail.  
8.143.   Canada argues that Canada should not have to determine specific values of imports  for 
unaffected exporters because Canada would not have a reliable way to verify the US Customs data 
regarding such exporters.627 This is so mainly because Canada considers that it would likely be 
unable to secure corresponding information from such exporters , as they would lack incentives to 
provide that d ata to Canada because companies whose CVD rates are unaffected by the 
OFA-AFA Measure may find it disadvantageous to help reduce the CVD rate of rival companies.628 
According to Canada, Canada's model thus allows for the fact that relevant information may o nly be 
available for some companies, while still providing a consistent and reasonable way to calculate the 
economic impact of the OFA -AFA Measure on Canadian imports.629 Further to this point, Canada 
recalls that it has explained why the Arbitrator need no t adopt an Armington model based on the 
multiple "varieties" of Canadian imports that the United  States proposes.630 
8.144.   The United  States argues that the mechanics of the overall calculation of NI must be made 
with reference to the counterfactual impact on overall Canadian exports to the United  States.631 This 
 
625 The parties agree with this approach to assigning the residual values of imports to the all -others 
rate, and we call recall that individually investigated companies and companies subject to non -selected rates 
will have been named in the relevant USDOC rec ord documents . However,  there is no list publish ed of the 
companies subject to the all -others rate (Canada's response to Arbitrator question No.  221, para. 187 , and 
No. 271, para. 291;  United  States' comments on Canada's response to Arbitrator question No.  221, para. 128 ). 
626 Canada has brought forward the argument that Canada is unable to collect such information to 
object to the United States' proposed model. Relatedly, the Arbitrator concluded in section 7.1.2.3   above that 
separating Canadian exports according to their affectedness by the challenged measure is necessary to take 
offsetting effects adequately into account.  
627 Canada's response to Arbitrator question No . 94, paras. 219 -220. 
628 Canada's response to Arbitrator question No. 87, para. 203; Canada's written submission, paras. 83, 
86, and 118. See also Canada's written submission, para. 168: "Canada's model is designed to accommodate 
the fact that import values may not be available from all sources. While the model requires import values only 
from the affected exporters, it is nevertheless capable of providing consistent results by summing the level of 
nullification or impairment separately calculated for different groups of exporters with different counterfactuals 
(i.e. exporters with duty rates attributed to the OFA -AFA measure, and exporters receiving the All Others 
rate)".  
629 Canada's written submission, paras. 166 -168. 
630 Canada's written submission, par a. 169.  
631 United  States' written submission, para. 136.  WT/DS505/ARB  
 
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  is issue is discussed in greater detail in section 7.1.2.3 , above . Thus, the United  States argues that 
confidential US sales data are needed from all known Canadian exporters whether their CVD rates 
are affected by the OFA -AFA Measure or not.632 The Un ited States also contests Canada's assertion 
that individually investigated firms not subject to the OFA -AFA Measure lack incentives to provide 
such confidential information to Canada, because such producers may wish to help Canada induce 
compliance by the  United  States "to eliminate the challenged measure from the rates of their 
competitors".633 The United  States asserts this is so because "CVD rates could increase with the 
removal of the challenged measure".634 
8.145.   The Arbitrator  notes at the outset that  Canada 's objections to using unaffected exporters' 
data is not  due to any perceived problem in extracting the values of imports from unaffected 
exporters from US Customs data. Rather, Canada's objection lies in the alleged difficulty of verifying 
the US Customs data regarding unaffected exporters' values of imports, and obtaining the 
companies ' values of imports at all if US Customs data is not supplied by the United  States. Canada 
argues that obtaining unaffected companies ' data directly from the companies would  be difficult 
because unaffected exporters will have no incentive to share their export data with Canada, as there 
is no incentive for them to help Canada remove the OFA -AFA Measure from affected exporters.635 
The United  States disagrees, arguing that unaff ected exporters may have incentives to share their 
data with Canada and verification could plausibly occur.636 
8.146.   In our view, Canada's position has some , but limited,  weight. It may be true that, as Canada 
claims, unaffected exporters in a given instance may view it as disadvantageous to have the 
OFA-AFA affected CVD rates removed from their competitors, since that removal may decrease their 
CVD rates and make their ex ports more attractive in the US market.637 In that instance, unaffected 
exporters may not wish to share their export data with Canada insofar they are of the opinion that 
in doing so Canada could better persuade the United  States to remove OFA -AFA affected CVD rates 
on Canadian companies. In the absence of such sharing, this would remove Canada's primary way 
of verifying the US Customs' data with respect to unaffected exporters and a way of obtaining the 
company 's value of imports in the absence of US Custom s data, i.e. examining company -specific 
data obtained directly from such companies.  
8.147.   We discern, however, three main reasons to doubt that Canada's concern in this context is 
as serious as Canada claims. First,  and foremost,  we note that the official US tra de statistics record 
imports on HTS 10 -digit level separated by exporting country, which can be matched to the 
HTS 10-digit codes in the relevant CVD order.638 Therefore, the total value of unaffected Canadian 
imports for a given relevant product can always  be calculated in a residual manner, i.e. the difference 
of total import values from Canada less the value of affected exporters. We therefore recall that 
Canada has asserted that it is reasonably confident that it can obtain the values of imports of affec ted 
 
632 United  States' written submission, para. 138 . 
633 United  States' response to Arbitrator question No. 20, para. 70 , and No. 103 , paras. 265 -266. 
634 United  States' response to Arbitrator question No. 20, para. 70 (referring to the United States' 
written submission, paras. 45 and 54) . 
635 Canada's written submission, para. 83 ; response to Arbitrator question No. 89, para. 207, No. 117, 
para. 28, and No. 252, par a. 263 .  
636 United  States' response to Arbitrator question No. 20, para. 70, and No. 103, paras. 265 -266. 
637 We note that, in certain limited instances, the removal of the OFA -specific CVD rate  from the 
individually investigated company or companies might ac tually raise the CVD rate on the companies subject to 
an all -others rate in the counterfactual. This could occur when: (a) an individually investigated and affected 
exporter's CVD rate was used to help calculate the all -others rate in reality; (b) the expo rter's CVD rate would 
fall below the de minimis  threshold in the counterfactual and thus not be used to calculate the all -others rate in 
the counterfactual; and (c) that exporter's CVD rate in reality had been relatively low compared to the other 
individua lly investigated companies' CVD rates used to help construct the all -others rate. (See section  6.3.4, 
above (describing how all -others rate is calcu lated) ). The United  States has noted that this scenario would 
have in fact occurred in the Supercalendered Paper  investigation (United  States' written submission, para. 54 ). 
We recall, however, that the OFA -specific CVD rates are given only a proxy  of zero in the counterfactual, 
reflecting uncertainty as to how exactly the United  States would remove the OFA -AFA Measure 's effects in any 
given instance (see para. 6.67, above ). It is therefore similarly unclear the extent to which a company would 
view the scenario that the United  States envisions  (i.e. an actual increase of the all -others rate)  as the most 
likely and act accordingly.  
638 See section 8.1.1.2.2.2 (b), below (discussing such sources in more detail).  WT/DS505/ARB  
 
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Canadian companies directly from such companies even in the absence of US Customs data.639 Thus, 
even if unaffected individually investigated exporters do not provide Canada with their export data, 
Canada could potentially verify aggregate shipments of the relevant product to an appreciable 
degree with aggregated data sources, particularly those that are organized at the HTS 10 -digit level 
(e.g. USA Trade Online and USITC DataWeb).640 Indeed, Canada itself has indicated that it would 
use such aggregate da ta sources to expose large -scale errors in any proposed dataset from 
US Customs.641 Therefore, if US Customs data are significantly under -inclusive of exports from 
unaffected companies, this inconsistency may still be able to be revealed through aggregated data 
sources and corrected for as a result of consultations procedures.  
8.148.   Second, unaffected companies may have an interest in assisting Canada in securing the 
United  States ' substantive compliance in this dispute more generally, i.e. the overall withdrawal of 
the OFA -AFA Measure at large. Assisting Canada in its suspension of concessions against the 
United  States if and when the OFA -AFA Measure is used against Canadian companies is one of 
Canada 's tools for helping achieve that substantive compliance. It wil l be recalled that the 
OFA-AFA Measure is ongoing conduct by the United  States, and arises in any CVD proceeding 
involving Canadian goods in which the precise content arises going forward.642 Thus, even if a 
company is unaffected by the OFA -AFA Measure at o ne point, it may become affected later on as a 
result of the OFA -AFA Measure being used in future CVD proceedings (e.g. administrative 
reviews).643 Assisting Canada in securing substantive compliance from the United  States more 
generally would remove such kinds of uncertainty for all Canadian exporters, affected and unaffected 
alike.644 
8.149.   Third, as discussed in section s 8.1.1.2.2  and 8.1.2.3 , below, even in the absence of 
US Customs data, there appear other ways fo r Canada to reasonably derive  value s of imports from 
unaffected companies  and assign them relevant duty rates . 
8.150.   In light of the above discussion, we consider that, while Canada 's concerns about being able 
to obtain and/or verify data from unaffected exporte rs may not be altogether unfounded, such 
concerns appear overstated. Rather,  and as discussed above , there appear to be reasonable ways 
for Canada to obtain, and conduct relevant verification of, values of imports from unaffected 
exporters.  
8.1.1.2.2    Calculating th e value of imports in the absence of US Customs data  
8.151.   In section 8.1.1.2.1.1 , above,  we have instructed the United  States to provide US  Customs 
data to Canada to calculate the values of imports for Canadian companies during the reference 
period. The United  States has further asserted that it is committed to providing such US  Customs 
data to Canada.645 While we accept the United  States ' assertions a s reliable, we are mindful that we 
have a responsibility to see to it that Canada is not left without recourse in the unlikely event that 
 
639 Canada's response to Arbitrator question No. 86, para. 192 , No. 88, para. 206, and No. 96 , 
paras.  224-226. See also Canada's response to Arbitrator question No. 89 , paras. 207 -208, and No. 161, 
para. 131. Canada argues that Canada could identify the companies subject to an affected all -others rate, in 
particular, by consulting the Canadian industry and examining public documents. With respect to identifying 
the Canadian companies subject to the all -others rate, Canada indicates that using public outreach and public 
documents (including the CVD investigation petition/application by the US domestic industry), will be 
particularly effective when the number of such companies is small (Canada's response to A rbitrator question 
No. 90 , paras. 209 -212). 
640 The United  States further notes the possibility that Canada could use Statistics Canada to obtain the 
aggregated value of imports from unaffected producers, albeit at the 8 -digit level (United States'  comments on 
Canada's response to Arbitrator question No.  272, para. 225). 
641 Canada's response to Arbitrator question No. 155, para. 109, and No.  156, para. 114. 
642 See section 6.2.3, above.  
643 We further note that even if some  unaffected exporters decide to withhold their company -specific 
data from Canada, a subset of them still may  provide it . We therefore take note that Canada itself has 
indicated that it cou ld choose to only verify a subset of affected exporters' data with data obtained directly 
from affected companies (Canada's response to Arbitrator question No. 86, para. 185 ). 
644 We thus note that Canada has claimed that, even though the OFA -AFA Measure is not currently 
affecting any US CVD rates of Canadian goods, Canadian exporters are still incurring legal costs due to the 
uncertainties surrounding the potential future applicat ion of the OFA -AFA Measure vis-à-vis Canadian exports 
(although Canada has not attempted to quantify such costs in any meaningful way). Canada's response to 
Arbitrator question No. 112, para. 7 . 
645 See e.g. United States' response to Arbitrator question No.  220, para. 133.  WT/DS505/ARB  
 
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  US Customs data, for whatever reason, are not provided to Canada within the allotted time. Thus, 
we consider it approp riate to prescribe procedures with which Canada can calculate values of imports 
for affected and unaffected Canadian companies even in the absence of US Customs data, although 
we underline that we consider it unlikely that Canada will have to resort to the se specific procedures.  
8.152.   Multiple methods and combinations of methods exist with which to calculate values of 
imports for companies and/or groups of companies in the absence of US Customs data. Moreover, 
and reflecting such options, the parties ' suggestions  on this front have evolved over the course of 
this arbitration proceeding, at times in a complex manner. Thus, in this context, we shall focus our 
attention on the parties ' most recent proposals.  
8.153.   We therefore note that it is first necessary to define an o verall structural approach for 
calculating values of imports from Canadian companies. We discern two basic options on this score. 
One is to prescribe methods for calculating values of imports with reference to whether a company 
is affected  or unaffected . The second is to prescribe methods for calculating values of imports with 
reference to what kind of factual CVD rate  a company has going forward from the triggering event 
(i.e. individual, non -selected, or all -others). The Arbitrator proposed the former app roach to the 
parties in a question.646 In response, Canada expressed a clear preference for the second approach, 
i.e. structuring the prescriptions with reference to factual CVD rates, and offered rather 
comprehensive suggestions for calculating values of i mports under such an approach.647 The 
United  States objected in principle to neither approach, instead offering more specific comments 
with selected elements of such proposals.648 We discern nothing inherently less reasonable about 
the Canadian preference in  this context, and therefore adopt that general structural approach.  
8.154.   That overall structural approach having been adopted, this section proceeds in six parts. 
First, it addresses a threshold matter, i.e. what the "residual " category of the values of import s 
should be. Second, third, and fourth, it discusses procedures for calculating values of imports for 
companies subject to individual CVD rates, non -selected rates, and the all -others rate, respectively. 
Fifth, it discusses relevant deadlines in this conte xt. Finally, it discuses consultations procedures.  
8.1.1.2.2.1   Selection of a residual category  
8.155.   At the outset, it is important to note a key issue that arises from the absence of 
company -specific US Customs data. US Customs data provides Canada with a complete set (subject 
to verification) of Canadian imports of the relevant product from all Canadian exporters on a 
company -specific basis. US Customs is the only data source that will reliab ly return such a complete 
and company -specific data set. As will be further discussed in detail in this section, although there 
are other ways that Canada may obtain or estimate values of imports for certain types of companies, 
such methods will, even in c ombination, very likely be unable to provide company -specific values of 
imports for all companies. In order to reasonably ensure that all imports of the relevant product are 
included in the model, therefore, a residual amount of imports must be obtained re presenting the 
values of imports of companies for which Canada was unable to obtain values of imports via other 
means. This residual value would be calculated by obtaining the total aggregate value of imports for 
a relevant product (which can always be don e by using, for example, data accessed via USA Trade 
Online or USITC DataWeb  for the 10 -digit HTS codes in the relevant CVD order), and then subtracting 
out from that total value the values of imports from companies for which Canada was able to 
calculate v alues via other means. This calculation yields a lump -sum residual value of imports.  
8.156.   Once this lump -sum residual value is obtained, however, it will be recalled that Canada must 
further assign to it a reference period CVD rate, a factual CVD rate, and, if necessary, a 
counterfactual CVD rate.649 The question thus becomes what those CVD rates should be. During the 
course of this proceeding, the parties have mentioned three possibilities. The first, is to assume that 
any residual value of imports belongs to co mpanies subject to unaffected CVD rates. The second, 
 
646 Arbitrator q uestion No. 295.  
647 Canada's response to Arbitrator question No.  295, paras. 57-58 and Revised Table 1  at p. 25 . The 
United  States had also recognized the possibility of Canada obtaining an aggregate value of imports for 
unaffected exporters from Statistic Canada (United States'  comments on Canada's response to Arbitrator 
question No. 272, para. 225 ). 
648 See generally United States'  response to Arbitrator question No.  295, paras. 43 -56; comments on 
Canada's response to Arbitrato r question No.  295, paras. 33 -38. 
649 Assignment of such rates to various types of companies is discussed in more detail in section 8.1.2, 
below.  WT/DS505/ARB  
 
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proposed by Canada most recently, is to assume that any residual value of imports belongs to 
companies subject to a non -selected rate. The third is to assume that any residual value of imports 
belongs to  companies subject to the all -others rate, a possibility mentioned by both parties in the 
course of this proceeding.650 We address each in turn.  
8.157.   The first possible method is assuming that any residual value of imports is attributable to 
companies subject to  unaffected CVD rates. The Arbitrator proposed this method to the parties in a 
question to the parties for comments.651 In response, Canada indicated that this approach is 
impractical, and expressed a clear preference for using the second option discussed i n the next 
paragraph.652 The United  States offered no particular strong opinions on this proposal. We consider 
that this option has three weakness es. That is, the companies subject to the unaffected variety can 
have multiple different reference -period and f actual CVD rates, which complicates the assignment 
of such rates to a residual value of imports when that residual, in fact, comes from different 
companies. Second, this method matches imperfectly with the overall structural approach we have 
chosen in the preceding section. That is, we have chosen a structural approach based around the 
type of factual CVD rate assigned to a company, not whether the company is affected or unaffected. 
Thus, it appears more logical to assign a residual category to a certain sp ecific type of factual CVD 
rate, rather than to an affected or unaffected variety in general. Finally, and as stated, Canada 
argues directly against such an approach in its most recent submissions. We thus consider that this 
is a relatively weak option.  
8.158.   Canada proposes a second possibility, i.e. that any residual value of imports, when there is 
a non -selected rate present, is attributable to companies subject to "the factual non -selected rate 
at the time of the triggering event ".653 We note that Canada offer s proposed guidance as to how a 
reference period CVD rate for such a group of companies can be calculated.654 Canada, however, 
omitted from its proposals similar guidance on how to calculate factual CVD rates for a residual value 
of imports in this context.655 This is a concern for us because there could be multiple non -selected 
rates active immediately after a triggering event, and a triggering event may or may not create a 
new non -selected rate.656 Moreover, we note that a non -selected rate created at the ti me of a 
triggering event may be an affected rate, whereas other non -selected rates operating in the 
background but nonetheless active at that time could be unaffected. In short, it appears unclear to 
us what Canada means by "the factual non -selected rate a t the time of the triggering event ", as 
there may be multiple  such non -selected rates, and even could be a mix of affected and unaffected 
rates. Without more clarity on this front, therefore, we consider Canada 's proposal to be somewhat 
incomplete.  
8.159.   The thi rd possible method mentioned by the parties in the course of this proceeding is to 
assume that any residual value belongs to the companies subject to the all -others rate. A main 
advantage of this approach, in our view, stems from the fact that the all -others rate is a single CVD 
rate that stays constant for the duration of a CVD order. This makes assigning relevant CVD rates 
to the residual value of imports a straightforward exercise, distinguishing it from the other two 
options discussed above. We also not e that neither party has advanced reasons to think that 
assigning the residual value to an all -others rate rather than a non -selected rate (or some average 
of non -selected rates) would introduce any systemic bias in favour of either party, and we readily 
discern none.657 Under the circumstances, therefore, the Arbitrator adopts this method as the most 
reasonable approach.  
 
650 See e.g.  United States'  response to the third set of Arbitrator question s, comments on Annex A, 
section IV, paras. 114-115 on p. 78; Canada's response to A rbitrator question No.  222, fn 133  to para. 193 .  
651 Arbitrator q uestion No. 295.  
652 Canada's response to Arbitrator question No.  295, paras. 57-59. 
653 See Canada's response to Arbitrator question No. 295, Revised Table 1  at p. 25  (cells for "Companies 
subject to the factual all -others rate " "Without US Customs data ", and "Companies subject to a fac tual 
non-selected rate " "without US Customs data "). 
654 See Canada's response to Arbitrator question No.  295, Revised Table 1  at p. 25 , last column.  
655 Canada's response to Arbitrator question No. 295 , paras. 64-65. 
656 In another context, Canada indicates that the factual non -selected rate could be the non -selected 
rate created in an administrative review if the administrative review is the triggering event (Canada's response 
to Arbitrator  question No.  291, para. 50 ). However, as noted, a triggering event might not be an administrative 
review.  
657 This is  so, in particular, because it appears unclear whether the all -others rate would be above or 
below any non -selected  rate, and both kinds of rates may be affected or unaffe cted. WT/DS505/ARB  
 
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  8.160.   Thus, the Arbitrator concludes that the residual value of imports shall be assumed to belong 
to companies subject to the all -others rate, whether that CVD rate is affected or unaffected by the 
OFA-AFA Measure.  
8.1.1.2.2.2   Companies subject to a factual individual CVD rate  
8.161.   Canada indicates that it expects that Canadian companies receiving individual CVD rates 
from the USDOC that are affected by the OFA-AFA Measure will, upon request by Canada, share 
their confidential sales data for the reference period. Thus, Canada could calculate the value of 
imports from such companies in the absence of US Customs data in that manner.658 Even if a 
company does not  agree to share such data, however, Canada indicates that it could still calculate 
estimates of company -specific values of imports by relying on information on the record of a relevant 
USDOC investigation or administrative review , combined with data from a n aggregate data source, 
in particular USITC DataWeb or USA Trade Online. Specifically, Canada indicates that all individually 
investigated companies are asked to provide publicly ranged US sales figures of the relevant product 
for the period of investigat ion (PoI) in investigations and the period of review (PoR) in administrative 
reviews659, and Canada could obtain such values from the public record of such proceedings.660 
Canada would then determine the total value of imports of the relevant product from Ca nada during 
the PoI/PoR using data from an aggregate data source and divide the companies' individual sales 
figures by the total import value to get each company's percentage share of exports from Canada 
to the United  States during the PoI/PoR. Canada woul d then query the total value of imports of the 
relevant product during the reference period from the same data source(s), and multiply that total 
value with each company 's share previously obtained. That would yield the estimated value of 
imports for each such company during the reference period.661 When querying the aggregate data 
source Canada indicates that the relevant 10 -digit HTS level headings would be obtained from the 
relevant CVD order662, but Canada would identify additional  HTS codes to use in its  search of the 
relevant database by, in particular, comparing the written description of the product's scope to the 
HTS codes.663 Finally, Canada has clarified that it considers that it should have discretion as to 
whether to calculate a company 's value of imports using data obtained directly from the company 
or with USDOC public record data.664 
8.162.   The United  States generally agrees with Canada regarding how to calculate the values of 
imports for individually investigated companies in this context. Specifically,  the United  States agrees 
that such values can and should be calculated with reference to data taken from USDOC proceedings 
and data from USA Trade Online.665 The United  States has, however, offered what it describes as 
 
658 Canada's response to Arbitrator question No. 159, para. 122. 
659 The "period of investigation " (PoI) for an investigation is typically the "most recently completed" 
fiscal or calendar year (19 C.F.R. § 351.204(b)(2)  (Exhibit CAN -52)). The period of r eview (P oR) is normally 
the most recently completed calendar year (Exhibit CAN -54, ss. (e)(1) ). The period for the first administrative 
review can be shorter or longer than one year, as the time period extends from the issuance of the Order until 
the end o f the most recently completed calendar year (Exhibit  CAN-54, ss. (e)(1) ). 
660 Canada claims that such publicly ranged figures will be available from "various record sources, such 
as Commerce's All Others rate calculation memorandum or respondents' initial questionnaire responses" . 
(Canada's response to Arbitrator question No. 86, f n 217 to para. 191 (referring to Calculation of the All -Others 
Rate for the Final Determination in the Countervailing Duty Investigation of Supercalendered Paper from 
Canada ( "Supercalendered Paper All Others Rate Calculation Memo "), Oct. 13, 2015  (Exhibit  USA-7)). 
661 Canada's response to Arbitrator question No. 159, paras. 123-124, and No. 222, paras. 192 -193 and 
fn 133 thereto.  
662 Canada's response to Arbitrator question No. 159, paras. 121-127, and No. 86, fn 217 to para. 191. 
663 Canada's response to Arbitr ator question No. 86, para. 191(i) -(ii), No. 170 , paras. 162-163, and 
No. 171, paras. 164 -165. See also Canada's response to Arbitrator question No.  295, Revised Table 1  at p. 25 , 
cell for "individually investigated/reviewed company " "Without US Customs da ta". 
664 See Canada's response to Arbitrator question No.  295, Revised Table 1  at p. 25 , cell for "Individually 
investigated company " "Without US Customs data ". 
665 The United  States originally indicated a preference for USA Trade Online because, although the two 
sources rely on the same initial data, USA Trade Online is revised monthly whereas USITC DataWeb is only 
updated annually (United  States' response to Arbitrator questio n No. 178, fn 85 to para. 100 ). The 
United  States later explained, however, that both USA Trade Online and USITC DataWeb are updated each 
month with trade data from Census, although USA Trade Online "also provides the aggregate total of U .S. 
trade with Can ada on a monthly basis in the current year " (United States' response to Arbitrator question 
No. 228, para. 144) . WT/DS505/ARB  
 
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"clarifications " to Canada 's proposal s in that context.666 In the United  States' view, only when such 
sales figures are unavailable on the record of a relevant USDOC proceeding for a given company 
should Canada obtain sales figures directly from that Canadian company in order to calculate the 
value of imports during the reference period.667 The United  States also stresses that only the relevant 
10-digit HTS codes referred to in the relevant CVD order should be used to obtain data from the 
USA Trade Online database, since Canada offers no practical way to select additional HTS codes.668 
8.163.   The Arbitrator notes that the parties both discuss the same two m ethods for determining the 
values of imports, in the absence of US Customs data, for companies subject to individual CVD rates: 
(a) obtaining values of imports directly from the Canadian companies; and (b) using public USDOC 
record data in conjunction with  aggregated import data. These two methods are the only ways the 
parties propose, and the only ways that we discern from the record, for obtaining company -specific 
US import data (or reasonable estimates thereof) for companies in the absence of US Customs 
data.669 We therefore consider both methods reasonable in principle for calculating such values of 
imports in this context.  
8.164.   The parties disagree, however, as to whether one of the two methods should be the preferred 
method. Specifically, the United  States a rgues that option (b), described in the preceding paragraph, 
should be used unless the public USDOC record data is for some reason unavailable. We decline to 
establish such a preference because it is unclear to us that using the United  States ' preferred op tion 
would consistently yield more accurate figures for values of imports than if Canada obtained such 
data from the companies themselves. In our minds, both sources of information have weaknesses. 
Using USDOC record data uses publicly ranged (and therefor e somewhat imprecise670) import data 
from a PoI/PoR that may also temporally intersect imperfectly with the reference period, and thus 
is a means by which to estimate company -specific values of imports in a reference period in an 
indirect manner. While obta ining values of imports from the companies themselves is a direct 
method of obtaining such values, it is unclear whether companies will keep their records or transmit 
such data to Canada in a manner most conducive to calculating a value of imports in a par ticular 
reference period.671 It is therefore unclear to us which method may be the most reasonable in a 
given future circumstance. Accordingly, we consider that Canada should have discretion as to which 
method to use in a given circumstance. That being esta blished, we turn to consider relevant 
particularities surrounding the two methods proposed by the parties.  
 
666 United States' response to Arbitrator question No.  295, para. 45 ( referring to the United States' 
response to Arbitrator question No. 178 , paras. 108 -112; response to the third set of Arbitrator questions, 
comments on Annex A, s ection  IV, paras. 1.14 -1.16). Canada has indicated that such clarifications are 
unnecessary (Canada's comments on the United States' response to Arbitrator question No. 295, para. 48 ). 
667 The United  States indicated that publicly ranged sales figures for individually investigated companies 
should always be on the record of the USDOC investigation and administrative review, and further asserts that 
the publicly ranged sales  figures should be used for the period that corresponds most closely with the reference 
period (United  States' response to Arbitrator question No. 157, para. 83, No. 178, paras. 105 -107, No. 220 , 
paras. 133 -135, No. 272, comments on Annex A, section II, para. 224 ). 
668 United  States' response to Arbitrator question No. 178, paras. 102 -104. The United  States further 
asserts that Canada could obtain the values of imports for groups of companies, such as unaffected companies, 
in aggregate from Statistics Canada (United States'  comments on Canada's response to Arbitrator question 
No. 272, para. 225 ). 
669 We note that Statistics Canada is in possession of exporter -specific data which it receives from the 
United  States, but it cannot release such individual company export information due to confidentiality issues  
(Canada's response to Arbitrator question No.  266, paras. 280 (specifying that Statistics Canada is in 
possession of fields from Form 7501 including the Manufacturer Name, Manufacturer ID, Entered Value, and 
Export date fields); United States' response to Arbitrator question No.  266, paras. 201 -202; Canada's 
comments on the United States' response to Arbitrator question No. 218). 
670 See fn 184 to para. 6.71 , above.  
671 The United  States  has raised con cerns over how such companies may maintain records, e.g. by 
HTS code or fiscal or calendar year (see the United  States' response to Arbitrator question No. 86, para.  243). 
Such concerns may be valid, and we expect that if Canada cannot obtain value s of imports for the reference 
period due to such problems, then it will revert to the other method described herein (see Canada's response 
to Arbitrator question No. 91, para. 214 (explaining that Canada will obtain necessary product information from 
the companies in order "to identify with precision whether previous sales fall within the scope of the 
countervailing duty order") ). Canada, for its part, indicates that when consulting Canadian companies, Canada 
will seek the same information from companies th at they report to US Customs (Canada's response to 
Arbitrator question No. 91, para. 214 ). WT/DS505/ARB  
 
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  (a) Information from Canadian companies  
8.165.   The parties have not offered detailed proposals for how precisely Canada should go about 
obtaining informatio n from Canadian companies in the absence of US Customs data, and we see no 
particular need to prescribe detailed procedures. There are a limited number of issues raised by the 
parties ' arguments, however, that warrant brief attention. These issues pertain to: (i) currency 
conversion; ( ii) attestations from Canadian companies; and ( iii) sharing of the companies ' 
information with the United  States. We address each in turn.  
8.166.   Regarding currency conversion, the parties recognize that Canadian companies may keep 
sales records denominated in Canadian dollars rather than US dollars. In the former case, a currency 
conversion will be necessary. The United  States proposes to use the Canadian Dollar per USD, period 
average exchange rate in the International Financial Sta tistics published by the International 
Monetary Fund (IMF). The United  States also asserts that because shipment data from Canadian 
companies would likely be on an annual basis, the Canadian Dollar per USD, period average 
exchange rate should be based on t he same annual time period.672 
8.167.   Canada proposes the Bank of Canada CAD -USD conversion rate applicable at the time of 
export to the sales.673 However, Canada asserts that, in its view, the source of the exchange rate is 
immaterial. What is material, in Canada 's view, is that the time period over which the exchange rate 
is taken matches that of the duration over which the transactions being converted are taken. Canada 
notes that that latter duration will likely not be an annual one for many company shipments.674 
8.168.   The Arbitrator agrees with Canada that the source of the CAD -USD conversion rate is of 
minor importance. Since both currencies are converted freely at foreign exchange markets, severe 
discrepancies between figures provided from official sources by the Unit ed States and Canada are 
highly unlikely. In the Arbitrator's understanding, IMF figures rely on the same underlying data. As 
the United States has not demonstrated that the figures provided by the  Bank of Canada  might be 
less accurate than IMF figures , the Arbitrator decides that  Canada shall use official  CAD-USD 
conversion rates provided by the Bank of Canada. The Arbitrator further agrees with Canada that 
higher accuracy is achieved if the time period of the sh ipment can be taken into account. Hence, we 
instruct Canada, whenever it needs to conduct CAD -USD currency conversions with respect to the 
sales data of a Canadian exporter,  to use the average CAD -USD conversion calculated over the same 
period in which the  shipments have occurred , provided that  Canada receives  such shipment dates 
by the companies . If such information is not provided , we instruct Canada to use an annual CAD -USD 
conversion rate.  
8.169.   Moreover, we instruct Canada, at the time Canada requests sales information from Canadian 
companies, to further: (i) request the companies to provide, along with their sales data, a written 
attestation to the effect that the relayed sales data are accurate (which Canada has offered to 
request675); and (ii ) request that the companies provide, along with their sales data, written 
authorization for Canada to share their information with the United  States for purposes of 
consultations.676 
(b) USDOC record data and aggregate import statistics  
8.170.   We set forth here h ow Canada shall obtain the value of imports for a particular company 
using USDOC record data in conjunction with an aggregate import data source. We note that the 
below -described method accords with both parties ' proposals on this score. We proceed  in thre e 
steps. First, we specify the overall methodology to be used in this context. Second, we address 
Canada 's request to use additional HTS codes when identifying Canadian imports from aggregate 
 
672 United States' response to Arbitrator question No.  220, paras. 133 -135; United States'  comments on 
Canada's response to Arbitrator question No.  220, para. 120 . 
673 Canada's response to Arbitrator question No.  220, para. 175 . 
674 Canada's comments on the United States' response to Arbitrator question No.  220, paras. 77 -78. 
675 See para. 8.125 , above ( noting  Canada 's proposal to obtain such attestations from companies).  
676 We have already prescribed a similar requirement in the context of Canada verifying US Customs 
data with data obtained from Canadian companies. See p ara. 8.123 , above. We discern no reason to no t 
require the same process here. See also section  8.1.1.2.2.6 , below (providing for consultations procedures in 
this context).  WT/DS505/ARB  
 
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data sources. Finally, we address which aggregate data source Ca nada shall use in this context, and 
prescribe relevant search parameters in each  data source . 
8.171.   In order to calculate the value of imports for a company with a factual individual CVD rate 
in this context, first, and in accordance with the parties ' agreement on this score, Canada shall 
retrieve the aggregate value of Canadian imports of the relevant product (using all the 10 -digit 
HTS codes from the CVD order) from an aggregate data source for both: (a) the PoI/PoR of the CVD 
proceeding with the PoI/PoR that m ost closely temporally approximates the reference period677 and 
during which the company 's publicly ranged sales figures are available; and (b) for the reference 
period. Canada shall then divide the company's publicly ranged value of imports during the rele vant 
PoI/PoR by the total value of Canadian imports of the relevant product during the same PoI/PoR. 
Canada shall then multiply the obtained  share by  the total value of Canadian imports of the relevant 
product during the reference period. The resulting val ue will be treated as that company 's value of 
imports during the reference period.  
8.172.   The Arbitrator notes Canada 's request that Canada, when querying the aggregate data 
source for Canadian imports, be allowed to search for HTS codes that are in addition to those 
contained in the relevant CVD order. The Arbitrator declines this request for the same reasons as 
the Arbi trator declined a similar Canadian request to supplement US Customs data sets with 
information obtained from Canadian companies. That is, and in particular,  identifying additional 
HTS codes based on a product description could involve complex analyses , the validity of which is 
difficult to reasonably guarantee in advance.678 
8.173.   The Arbitrator further notes that Canada will have to retrieve the aggregate levels of 
Canadian imports of a relevant product during the relevant PoI/PoR and the reference period from 
an aggregate data source. The parties have identified three data sources that contain such aggregate 
data, i.e. Statistics Canada, USA Trade Online, and USITC DataWeb, although the parties primarily 
advocate the use of the latter two in this context. We brie fly describe each below before assessing 
which database Canada should use in this context.  
8.174.   The record reflects that Statistics Canada is an agency of the Canadian government.679 
Canada has explained that a " Memorandum of Understanding with U.S. Customs … al lows Statistics 
Canada to receive U.S. import data for statistical purposes" .680 Statistics Canada maintains its 
records at the 8 -digit level  of Canada's export classification .681 The parties agree that Statistics 
Canada is in possession of Canadian exporter -specific data, and thus Statistics Canada data could 
be used to identify the values of imports for individual companies or groups of companies.682 
However, Canada has explained that the Government of Canada, in order to use data from Statistics 
Canada to c alculate a level of NI, would have to request information regarding values of imports 
from Statistics Canada, and Statistics Canada could only relay such data to the Government of 
Canada for calculation of a level of NI if such data do not reveal confident ial company -specific 
information.683 Canada has also explained that Statistics Canada data may be unavailable for 
transmission where either the aggregated information discloses the activities of individual exporters 
 
677 Canada made this proposal in its response to Arbitrator question  No. 295,  Revised Table 1, fn 2 1. 
The United  States also indicates that the publicly ranged sales figures should  be used for the period that 
corresponds most closely with the reference period. (United  States' response to Arbitrator question No. 78, 
para. 107). We consider this reasonable primarily because it is unclear whether the triggering event will be the 
USDOC proceeding in which a company 's relevant individual CVD rate was assigned. The United  States did not 
specifically object to this proposal.  
678 See para. 8.128 , above.  
679 Canada's response to Arbitrator question No. 158, para. 117 . 
680 Canada's response to Arbitrator question No. 86, fn 212 to para. 185.  
681 Canada's response to Arbitrator question No. 86, fn 216 to para. 191 (ii); United States' response to 
Arbitrator question No.  178, para. 101.  
682 See generally Canada's response to Arbitrator question No. 218, paras. 167 -170, and No.  291, 
paras. 47 -50; United States' response to Arbitrator question No.  218, para. 127 .  
683 Canada's response to Arbitrator question No.  222, para. 194 ( referring to Canada's response to 
Arbitrator question No. 156, paras. 110 -114). See also Canada's response to Arbitrator question No. 158, 
paras. 117 -120, and No. 218, paras. 167 -170. WT/DS505/ARB  
 
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  or operational limitations limit Statisti cs Canada's ability to provide such data.684 Canada has further 
indicated that searches for US imports of the relevant product can be performed in Statistics Canada 
by month and year.685 The Arbitrator further notes that matching 10 -digit CVD order codes fol lowing 
the US HTS classification with 8 -digit codes used by Canada is not possible without a correspondence 
table.686 
8.175.   USA Trade Online is the portal through which the U nited States Census Bureau provides 
public import and export trade statistics.687 It sources its import data primarily from the US Customs' 
ACE Database.688 Import data are organized at the HTS 10 -digit level.689 Such data can be queried 
by month and year .690 USITC DataWe b relies on US Census Bureau trade data, but uses a different 
search form.691 USITC DataWeb data can be queried by month and year, and also by 10 -digit HTS 
code.692 Neither database contains company -specific import data.  
8.176.   Canada considers that USA Trade Onlin e and USITC DataWeb are preferable over Statistics 
Canada in this context since the former two databases are arranged at the 10 -digit HTS level, 
whereas Statistics Canada data are only available at the more aggregated 8 -digit level.693 However, 
even though "Canada agrees that the U.S. Census' USA Trade Online data may be slightly preferable 
to USITC DataWeb ", Canada does not consider that it is necessary to prescribe one database over 
the other in this context.694 The United  States belie ves that the Arbitrator should prescribe the use 
of US A Trade Online in this context.695 
8.177.   We consider that Canada should use USA Trade Online or USITC DataWeb in this context. 
Both databases are publicly available, and organized at the HTS 10 -digit level. As  both parties agree 
that USA Trade Online is slightly preferable to USITC DataWeb696, we consider that Canada shall use 
 
684 Canada's response to Arbitrato r question No. 86, fn 212 to para. 185 and fn 215 to para 191(ii). 
Moreover, Canada indicates that multiple factors could affect the comparability of US Customs data with 
Statistics Canada data (e.g.  valuation, scope of transactions, and corrections applie d to raw US Customs data 
by the US Census Bureau or Statistics Canada) (Canada's response to Arbitrator question No. 86, fn 212 to 
para. 185 ). The United  States also indicates that Statistics Canada manipulates its final data differently than 
US Census to produce its final statistics (United States' comments on Canada's response to Arbitrator question 
No. 218, fn 140 to para. 115.  
685 Canada's response to Arbitrator question No. 159, para. 126; No. 158, para. 120; No. 222, Table 4, 
first cell in last column)  
686 In this respect, Canada proposes to use the Statistics Canada's concordance between HTS10 Codes 
and 8 -digit codes following Canada's export classification to determine the relevant 8 -digit codes for the 
subject merchandise  (Canada's response to Arbitrato r question No. 156, para. 114 ; Statistics Canada, 
Concordance Between U.S. HS10 Code and Canada HS8 Code (2021) (Exhibit CAN -109). The Arbitrator notes 
that the record does not allow to determine whether this table will be updated in the future.  
687 U.S. Census Bureau, "About USA Trade® Online", accessed March 8, 2021, 
<https://usatrade.census.gov/> (Exhibit CAN -62). 
688 U.S. Census Bureau, "Guide to Foreign Trade Statistics: Description of the Foreign Trade Statistical 
Program", accessed March 8, 2021 , <https://www.census.gov/foreign -trade/guide/sec2.html> 
(Exhibit  CAN-63, p. 1, section 2).  
689 U.S. Census Bureau, "HTS Record Layout", accessed March 8, 2021, 
<https://www.census.gov/foreign -trade/schedules/b/2018/imp -stru.txt> ( Exhibit CAN -65); United  States' 
response to Arbitrator question No.  178, para. 101.  
690 Canada's response to Arbitrator question No.  36, para. 61 and fn 91 thereto (referring to  U.S. 
Census Bureau, "USA Trade Online – Help Section", August 22, 2014, accessed March 8, 2021, 
<https://w ww.census.gov/foreign -trade/statistics/dataproducts/uto -help/uto -help.html> (Exhibit  CAN-66)). 
691 Canada's response to Arbitrator question No. 36, para. 62 and fn 92 thereto (referring to  USITC, 
"A Note on U.S. Trade Statistics", accessed March 8, 2021, 
<https://www.usitc.gov/publications/research/tradestatsnote.pdf>, Exhibit CAN -67). See also  Canada's 
response to Arbitrator question No. 222, para. 192; Canada's comments on the United States' response to 
Arbitrator question No.  228, para. 95;  and the United States' response to Arbitrator question No. 98, 
para. 256. 
692 United  States' response to Arbitrator question No. 36, paras.  121-122, and No. 98 , para. 256 . 
693 Canada's response to Arbitrator question No.  159, paras. 125 -126, No. 172, para. 167 -168; and 
No. 218, para. 169.   
694 Canada's response to Arbitrator question No. 159, para.  125, No. 222, fn 132 to para. 192, and 
No. 276, para. 6; Canada'  comments  on the United States' response to Arbitrator question No.  228, para. 9 5. 
695 United States' res ponse to Arbitrator question No.  178, para. 100 , and No. 222, paras. 130 -135. 
696 The parties appear to agree that USA Trade Online has some advantages in terms of updates to its 
data (Canada's response to Arbitrator question No. 159, para. 125, No. 222, fn 132 to para. 192, and No. 2 76, 
para. 6 ; Canada's comments on the United States'  response to Arbitrator question No.  228, para. 9 5; and the 
United States' response to Arbitrator question No. 178, para. 100 , and No.  228, para. 144 ). WT/DS505/ARB  
 
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USA Trade Online first, if available. If USA Trade Online is unavailable, then Canada shall use 
USITC  DataWeb. Only if both such database s are unavailable, Canada may resort to using data from 
Statistics Canada.697 
8.178.   Both parties further agree that search parameters could be prescribed for aggregate data 
sources, insofar as they are used in calculating the value of imports. Canada proposed sea rch criteria 
for USA Trade Online, USITC DataWeb, and Statistics Canada in response to an Arbitrator 
question.698 The United  States generally agrees that search parameters could be prescribed in this 
context, and also with the search criteria proposed by Canada.699 
8.179.   Particularly in light of the parties ' agreement on this score, we consider that prescribing 
search criteria for aggregate data sources would be helpful in this context primarily to create 
transparency as to how Canada would go about c alculating values of imports in the absence of 
US Customs data. Upon review of Canada 's proposed criteria, we consider such criteria reasonable, 
with limited exceptions. We therefore adopt Canada 's proposed search criteria, reproduced in 
substance below. I n the limited instances when we considered it necessary to revise such criteria, 
such revisions are noted with footnotes. We also note that, in prescribing these search parameters, 
we further consider that if the relevant data fields were to change in the future, Canada can adapt 
its searches as necessary to achieve, as much as reasonably possible, the same results that would 
be obtained with the following criteria.  
Table 1: USA Trade Online search parameters  
Field  Search Parameter  
Measures  "Customs Value (Gen) ($US)"  
Commodity  Canada would select all listed HTS10 codes in the Order  
Country  "Canada"  
District  "All Districts"  
Rate Provision  "All Rate Provisions"  
Time Canada would select the months and years that fall within: 
(i) the reference period; and (ii) the PoI or PoR and 
aggregate each  
 
 
697 We note that the parties have primarily advocated the use of USA Trade Online and USITC DataWeb 
in this specific context. We nonetheless include Statistics Canada here as a last -resort option.  
698 See generally Canada's response to Arbitrator question No.  222, paras. 191 -194. 
699 United States'  comments on Canada's response to Arbitrator question No. 222, para s. 133 -135. WT/DS505/ARB  
 
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  Table 2: USITC DataWeb search parameters  
Field  Search Parameter  
Trade Flow  "Imports for Consumption"700 
Classification System  "HTS Items"  
Data to Report  "General Customs Value"  
Data Format  "Actual"  
Years  Canada would select the years that fall within: (i) the 
PoI/PoR; and (ii) the reference period  
Timeframe Aggregation  "Monthly" (Canada would separately aggregate the months 
containing: (i) the re ference period; and (ii) the PoI/PoR).  
Country Name  "Canada" (under "Select Individual Countries")  
Commodities  Canada would select all listed HTS10 codes in the Order 
(under "Select Individual Commodities")  
Commodity Aggregation  "Display Commodities Separately"  
Commodity Aggregation Level  "HTS-10" 
Rate Provision Code  "Use All Provision Codes"  
Districts  "Use All Districts"  
 
Table 3: Statistics Canada search parameters701 
Field  Search Parameter  
Entry Date  Canada would request data falling within: (i) the reference 
period; and (ii) the PoR/PoI (by month and year)702 
Country of Origin  "Canada"  
Canada's 8 -digit export 
classification codes  Canada would request data for all 8 -digit codes 
corresponding with all the HTS10 codes listed in the order, 
according to Statistics Canada's concordance table703  
Entered Value  Statistics Canada would aggregate the entered value 
during: (i) the reference period; and (ii) the PoI/PoR  
 
8.180.   We finally note th at if, for some reason, Canada is unable to calculate a particular company 's 
value of imports with either of the above -prescribed methods (i.e. using data obtained directly from 
Canadian companies, or from USDOC record data in conjunction with an aggregate  data source), 
then, in accordance with our discussion in section  8.1.1.2.2.1 , above, Canada shall assume that the 
company 's value of imports is assig ned to the companies subject to the all -others rate.  
 
700 Canada proposes to rely on "General Imports" for this field (Canada's response to Arbitrator question 
No. 222, para. 193). The United  States objects, arguing that "[i]mports for consumption" is preferable because 
only "these are the imports t o which the duties are applied" (United States' comments on Canada's response to 
Arbitrator question No. 222, para. 135). Canada questions the reliability of import for consumption figures with 
reference to a past USITC determination (Canada's response to Arbitrator question No. 276, paras. 3 -6). The 
United States maintains its position that imports for consumption are preferable because general imports 
"measure[] the total physical arrivals of merchandise from foreign countries, regardless of whether such 
merchandise enters the U.S. customs territory immediately or is entered into bonded warehouses or free trade 
zones under Customs' custody" (United States' comments on Canada's response to Arbitrator question 
No. 276, para. 4). According to the United State s, the reliability of import for consumption figures is 
uncontested and responds, with respect to the referenced USITC determination, that the use of general 
imports by the USITC in "one investigation was a fact -specific determination related to issues of reporting by 
U.S. importers of that specific subject merchandise" (United States' comments on Canada's response to 
Arbitrator question No. 276, para. 6 (referring to Canada's response to Arbitrator question No. 276, para. 5)). 
We consider imports for consu mption the more meaningful figure and have no reason to generally question the 
reliability of such data. Hence, we instruct Canada to use imports for consumption.  
701 Canada had previously offered search criteria for Statistics Canada in its response to Arbi trator 
question No. 159. This table represents the most recent search criteria Canada has offered in response to 
Arbitrator question No. 222.  
702 Canada offered these Statistics Canada search parameters in a proposal specifically regarding how to 
calculate t he value of imports for companies subject to the all -others rate. We have thus slightly conformed 
that proposal to account for their role as a possible, albeit highly unlikely, source of data for aggregate import 
values to use in conjunction with USDOC rec ord data in this context.  
703 Exhibit CAN -109, or future versions thereof that take updates in nomenclatures into account.  WT/DS505/ARB  
 
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8.1.1.2.2.3   Companies subject to a factual non-selected rate  
8.181.   Canada proposes two methods for calculating a value of imports for a company or group of 
companies subject to a non -selected rate.704 First, Canada proposes that it could obtain values of 
imports directly from such companies. Second, Canada proposes that Canada could obtain an 
aggregate value of imports for a group of companies subject to a non -selected rate from 
Statistics  Canada. Cana da considers that it should have discretion over which method to follow in 
this context.705 The United  States does not specifically object to Canada 's proposed methods in this 
context.706 
8.182.   By way of background, we recall that non -selected rates arise from adm inistrative reviews. 
The USDOC creates a non -selected rate when the USDOC only individually investigates a subset of 
companies that are subject to that review. The non -individually reviewed companies are assigned 
the non -selected rate, which is calculated in the same way as the all -others rate is calculated in an 
original investigation. Because all the companies subject to the administrative review are known, 
the USDOC lists the specific companies that are subject to a particular non -selected rate.707 Thus, 
we note that there will likely be multiple companies subject to a non -selected rate, and Canada will 
be able to identify those companies from USDOC public records.  
8.183.   We consider both of Canada 's proposals reasonable in this context. With respect to Canada 's 
proposal to obtain values of imports directly from companies subject to a non -selected rate, we have 
already found such an approach reasonable in the context of obtaining values of imports from 
companies subject to an individual CVD rate.708 We discern noth ing less reasonable about this 
Canadian proposal with respect to companies subject to a non -selected rate. We consider, therefore, 
that Canada shall follow the same procedures contained in paragraph 8.169 , above, when obtaining 
values of imports from companies subject to a non -selected rate.  
8.184.   We further consider Canada 's proposal to obtain an aggregate value of imports for a group 
of companies s ubject to a non -selected rate from Statistics Canada as reasonable under the 
circumstances. Indeed, because companies may not consent to providing Canada with their values 
of imports directly, we consider it reasonable to provide Canada with an alternative  way of calculating 
a value of imports for these companies. We also note that although Statistics Canada only keeps its 
records at the 8 -digit (rather than 10 -digit) level, aside from US Customs and the Canadian 
companies themselves, Statistics Canada is t he only other source described on the record that 
possesses Canadian company -specific export data. Canada has explained, therefore, that Statistics 
Canada has the capability to search  its records for company -specific values of imports but cannot 
release  any company -specific data because that granular data is considered confidential. Canada 
has further explained, however, that Statistics Canada could likely release aggregated values of 
imports for multiple individual Canadian companies to overcome those conf identiality concerns.709 
8.185.   We further note that the number of companies that are subject to factual non -selected rates 
may be large, and that Statistics Canada may not always be available to relay values of imports for 
groups of companies to Canada. Such a si tuation could lead to high burdens being placed on Canada 
 
704 Canada had proposed a third method, i.e. assigning a residual value of imports to companies subject 
to a non -selected rate (Canada's response to Arbitrator question No.  295, Revised Table 1  at p. 25) . We have, 
however, already rejected that approach above in section 8.1.1.2.2.1 . 
705 Canada's response to Arbitrator question No. 222, para, 194, No. 272, para. 296, and No.  295, 
Revised Table 1  at p. 25 . 
706 We consider, however, that insofar as the United  States raised issues with respect to Canada 's 
proposed methods in other contexts that we have already further discussed above, then we consider that those 
would apply here as well. The United  States does, however, note that a residual value of imports could be 
calculated for a group of companies subject to a non -selected rate the same way as such a residual value could 
be calculated for companies subject to an all -others rate (United States'  comments on Canada's response to 
Arbitrator question No.  291, para. 29 ( referring to the United States' response to Arbitrator question No . 178, 
paras. 108 -112).  
707 See fn 144 to para. 6.51 , above.  
708 See section 8.1.1.2.2.2 , above.  
709 See para. 8.174 , above. In contrast to its proposals for companies subject to individual CVD rates, 
we note that Canada does not propose using USDOC record data in conjunction with an aggregate data source 
for calculating values of imports for companies subject to a non -selected rate. This appears reasonable in light 
of the parties ' explanations that the USDOC only collects publicly ranged sales values for individually 
investigated companies, and, unl ike for companies subject to an individual CVD rate, there is no guarantee 
that companies subject to a non -selected rate would have been individually investigated at any point.  WT/DS505/ARB  
 
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  to obtain values of imports directly from companies. Thus, we consider that additional flexibility for 
Canada should be provided in this context.  
8.186.   We therefore note that if, for some reason, Canada i s unable to calculate a particular 
company's value of imports with either of these methods, or if Canada considers it too burdensome 
to use such options to calculate the value of imports for a company or group of companies, then, in 
accordance with our dis cussion in section  8.1.1.2.2.1 , above,  Canada shall assume that the 
company's value of imports is assigned to the companies subject to the all -other s rate.  If Canada 
does so assume, Canada shall inform the United States in writing the reasons for doing so  at the 
time Canada relays  its calculations of values of imports to the United States for consultations 
purposes.  
8.1.1.2.2.4   Companies subject to a  factual  all-others rate  
8.187.   Canada has identified three ways it could calculate a value of imports for companies subject 
to a factual all -others rate in the absence of US Customs data. Specifically, Canada has indicated 
that Canada should have the discretion to: (a) obtai n values of imports directly from Canadian 
companies710; (b) use data from Statistics Canada; or (c) calculate a residual value of imports for 
such companies by using aggregate import data from USA Trade Online  or USITC DataWeb and 
subtracting out all the other values of imports it was able to calculate for all other types of 
companies.711 
8.188.   The United  States argues that Canada should use method (c), described in the preceding 
paragraph, exclusively to calculate a value of imports for companies subject to a factual all -others 
rate. The United  States also specifies that Canada should use data from the USA Trade Online 
database in executing this option.712 
8.189.   The Arbitrator notes parties ' agree ment on method (c) as explained above . That is, Canada 
shall retrieve the total import value of the relevant product from Canada during the reference period 
using USA Trade Online or, if USA Trade Online is unavailable, from USITC DataWeb.713 From this 
total value, Canada shall subtract out of it all values of imports that Ca nada was able to calculate 
through other means.714 The remainder, if there is any, shall equal the value of imports from 
companies subject to the factual all -others rate.715 We see no reason to disagree with the parties as 
to the reasonableness of this appro ach, and we thus adopt it as a possibility for Canada in this 
context.  
8.190.   Canada proposes a second method as well  (method (b) above) , i.e. obtaining an aggregate 
value of imports for companies subject to the all -others rate using information from 
Statistics  Canada. Canada would do so by requesting that Statistics Canada retrieve all values of 
imports from Canada of the relevant product during the reference period, and then also request that 
Statistics Canada subtract out from that aggregate value the values of  imports from all companies 
 
710 Canada's response to Arbitrator question No. 161, para. 131. Canada argues th at Canada could 
identify the companies subject to an affected all -others rate, in particular, using public outreach and public 
documents (including the CVD investigation petition/application by the US domestic industry), methods that 
may prove particularly  effective when the number of such companies is small (Canada's response to Arbitrator 
question No. 90 , paras. 209 -212). Canada later indicated, however, that in a CVD investigation, Canada will be 
likely unable to identify all companies subject to the all -others rate without the help of US Customs data 
(Canada's comments on the United States' response to Arbitrator question No. 186, para. 16, and No. 282, 
para. 11 ). 
711 Canada's response to Arbitrator question No. 191, paras. 65 -76, No. 222, para. 194 and Ta ble 4, 
No. 272, para. 296, and No.  295, Revised Table 1  at p. 25 ; comments on the United States' response to 
Arbitrator question No.  218, paras. 65 -66. See also Canada's response to Arbitrator question No. 86, fn 217 to 
para. 191 (iii), and No. 159, para. 1 24. 
712 United States' response to Arbitrator question No.  178, para. 100. The United  States indicates that 
total values of imports from Statistics Canada, because they are at the 8 -digit level, would overstate the value 
of imports (United States' response t o Arbitrator question No.  178, para s. 101 and 110-112). 
713 See para. 8.177 , above ( also expressing preference for USA Trade Online ). In doing this search, 
Canada should use the search parameters in Tables 1-2, above, adapted appropriately to this context.  
714 This inc ludes subtracting out values of imports calculated under the methods described three 
paragraphs below.  
715 We note that this method works because, as discussed in section 8.1.1.2.2.1 , above, this value of 
imports is the "residual " amount.  WT/DS505/ARB  
 
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for which Canada was able to calculate a value of imports via other means.716 The remainder would 
be a value of imports subject to the all -others rate. We note, therefore, that this method is similar 
to method (c) discussed above , just using Statistics Canada as the aggregate data source instead 
of HTS 10 -digit US Census data. We therefore recall that Statistics Canada data is at a more 
aggregated 8 -digit level whereas USA Trade Online and USITC Data Web data are accessible at the 
10-digit HTS level (which can be precisely matched against all the HTS 10 -digit codes appearing in 
the relevant CVD order). Thus, Statistics Canada data will likely be more over -inclusive of import 
values. This suggests that method (c) already described above (i.e. using US Census data) is 
superior to using Statistics Canada data.  
8.191.   We further note Canada 's comment, however, that Statistics Canada data could be more 
accurate in certain situations where Canada estimated reference -period values of imports for 
individually investigated companies using USDOC record data in conjunction with an aggregate data 
source (see section  8.1.1.2.2.2 (b), above).717 It will be recalled that that method relied on an 
assumption that such companies ' shares  of total Canadian imports of the relevant product were 
constant as between a relevant PoI/PoR and the reference period to estimate values of imports in 
the latter per iod. Thus, if those values are simply subtracted out from a total value of imports for 
the relevant product during the reference period from USA Trade Online, this results in an 
assumption, to some degree, that other  companies ' market shares stayed constan t as well, including 
the companies subject to the all -others rate. If such market shares in fact changed significantly, 
however, then measuring the all -others companies ' values of exports during the reference period 
directly  (which can be achieved with Sta tistics Canada because it possesses company -specific data 
for the reference period) may be preferable to calculating them in a residual manner using US Census 
data. Thus, even though Statistics Canada data are organized at the 8 -digit level, it is not enti rely 
clear to us whether using Statistics Canada data would always be less accurate than using the 
method discussed in paragraph 8.189 , above. Thus, and on balance, we decline to prescribe a 
hierarchy for the use of these two methods.  
8.192.   Canada also proposes obtaining a value of imports directly from companies subject to a 
factual all -others rate  (method (a) above) . We consider this reasonable as well, fo r the same reasons 
that we have allowed this as a possibility in other contexts already discussed further above.718 We 
note, however, that because there is no published list of companies subject to the all -others rate, 
even if Canada obtained data from all companies it knows to be subject to the all -others rate, Canada 
will necessarily not be certain that it identified  all relevant companies subject to the all -others rate.719 
Therefore,  while Canada is free to use this choice to the extent it wishes,  if Canada uses this method 
to calculate a value of imports for any company or companies subject to the factual all -others rate, 
we consider that Canada must still apply one of the two other options discussed in the preceding 
three paragraphs to identify any remaining value of imports that entered the United  States under 
the all -others rate during the reference period. We furt her agree with Canada, however, that it 
should have discretion to choose between such options in this context, as it is unclear which would 
be most accurate in any given situation.  
8.1.1.2.2.5   Time allowed for Canada to calculate the value of imports  
8.193.   Canada indicates that, if the United  States fails to provide US Customs data, then there 
should be no deadline prescribed by when Canada must calculate the value of imports. Canada 
argues that such a deadline would be unnecessary because it is in Canada's interest to calcu late a 
level of NI in order to suspend concessions as quickly as possible. Canada also argues that such a 
deadline would be inappropriate because Canada would be "squeezed between two deadline s" were 
 
716 See Canada's response to Arbitrator question No.  222, Table 4  at p. 63 . This includes subtracting out 
values of imports calculated under the methods described two pa ragraphs below.  
717 Canada's response to Arbitrator question No.  159, para. 127. 
718 See sections 8.1.1.2.2.2  and 8.1.1.2.2.3 , above.  Canada shall also follow the procedures laid out in 
paragraph 8.169 , above, regarding obtaining attestations from companies as to the accuracy of the data 
provided.  
719 United  States' response to Arbitrator question No. 19 , para. 68  (confirming that the all -others rate 
covers e xporters that are both known and unknown to the USDOC at the time of the relevant CVD proceeding). 
See also Canada's comments on the United States' response to Arbitrator question No.  186, para. 16, and 
No. 282, para. 11 (explaining that Canada would have trouble identifying the companies subject to the 
all-others rate in the absence of US Customs data).  WT/DS505/ARB  
 
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  the Arbitrator to also specify a time by when, following a triggering event, Canada must start 
suspending concessions.720 
8.194.   The United  States argues that it would be unnecessary to prescribe a deadline by when 
Canada should calculate the value of imports in the absence of US Customs data, although the 
United States, in so arguing, may assume that a deadline would be set by when Canada must have 
to start suspending concessions more generally (a deadline that we have already declined to set in 
section 6.2.2, above ).721 
8.195.   The Arbitrator declines to set a deadline by when Canada must calculate a value of imports 
in the absence of US Customs data. This is so because we have already concluded that Canada will 
not have a deadline by when Canada must start suspending concessions overall722, and thus we 
consider it unnecessary to set a deadline by when Canada must calculate a value of imports in this 
context, particularly in the absence of either party specifically arguing to the contrary.  
8.1.1.2.2.6   Consultations procedures  
8.196.   Canada proposes that, if Canada calculates values of imports in the absence of US Customs 
data, Canada would nonetheless provide its calculations to the United  States and allow a period of 
two weeks  for con sultations .723 
8.197.   The United  States does not take issue with Canada 's proposed procedures in this context. 
However, the United  States does assert that any information upon which Canada relies to calculate 
a value of imports in this context should be able to be  shared with the United  States during 
consultations.724 
8.198.   Canada responds that while Canada would always request companies to agree to share their 
data with the United  States, such sharing should not be required considering that Canada would only 
need to seek  such information in this context if the United  States had failed to provide US Customs 
data.725 
8.199.   The Arbitrator considers that consultations procedures in this context would be appropriate, 
as it would always be preferable, in the Arbitrator 's view, to give  the parties an opportunity to agree 
on the data used to calculate the value of imports. Three issues thus arise: (a) the timeline for such 
consultations; (b) procedures if the parties fail to agree on certain data during consultations; and 
(c) whether to require that Canada share all the information with which it calculates a value of 
imports.  
8.200.   With respect to the timeline for such consultations, we consider that Canada 's proposal for 
a two -week period of consultations following Canada 's relay of its calcul ations of values of imports 
to the United  States is reasonable. We also note that the United  States has offered no objection to 
this timeline. Following Canada 's provision of its calculations of the values of imports in the absence 
of US Customs data, ther efore, the United  States  shall have two weeks (14 calendar days) to provide 
any comments on such calculations to Canada, after which the parties would consult about such 
comments for the remainder of the 14  calendar -day period  (this period can be extended by the 
mutual consent of the parties) . If the parties agree on the values of imports to be used (whether by 
lack of objections by the United  States or agreement via consultations), the values agreed upon by 
the parties shall b e used.  
8.201.   Regarding procedures if the parties fail to agree on certain values of imports despite 
consultations, we consider that Canada should have the right in this context to rely on the values 
that it calculated. Indeed, because these consultations occur in the absence of US Customs data, it 
is not apparent what other data source, other than those relied on by Canada, would be more 
 
720 Canada's response to Arbitrator question No.  224, paras. 199-201. 
721 United States'  comments on Canada's response to Arbitrator question No.  224, para. 13 8. 
722 See fn 133 to para. 6.46, above.  
723 Canada's response to Arbitrator question No.  86, para. 193 , and No. 223, paras. 195 -198. 
724 United States'  comments on Canada's response to Arbitrator question No.  223, paras. 136 -137. 
725 Canada's comments  on the United States' response to Arbitrator question No.  295, para. 47. Canada 
also clarifies that it would be able to share with the United  States public data from USA Trade Online or USITC 
DataWeb and Statistics Cana da data (Canada's response to Arbitrator question No.  225, para. 202 ). WT/DS505/ARB  
 
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reliable. Thus, if the parties fail to agree on the values of imports to be used following the 
consultations period described in the preceding paragraph, Canada 's calculations of the values of 
imports shall prevail.  
8.202.   We further note the United  States ' argument that only data that can be shared with the 
United  States for consultations purposes should be used to calculate the value of imports. In this 
context, we again note  that confidentiality concerns may restrict Canada 's ability to share certain 
information with the United  States, and in particular data obtained directly from Canadian 
companies , unless the companies consent to su ch sharing.726 
8.203.   The Arbitrator again recognizes the value in Canada sharing information with the 
United  States that Canada uses for calculations of the values of imports, even in the absence of 
US Customs data. Indeed, such sharing would allow for effective consultations, and would be in 
keeping with the principle of transparency. The Arbitrator therefore considers it appropriate for 
Canada to endeavour to share all information with the United  States that Canada uses for calculation 
of the value of imports in  the absence of US Customs data when Canada relays its calculations of 
the values of imports to the United  States.  
8.204.   The Arbitrator recognizes, however, that Canada may not be able to share all such 
information with the United  States. In particular, Canada h as explained that information obtained 
directly from Canadian exporters can only be shared with the United  States if the providing company 
consents to such sharing.727 Although this is the key example discussed by the parties in this context, 
the Arbitrator  recognizes that this example reflects a potentially more general issue arising in cases 
when confidentiality considerations restrict Canada's ability to share information with the 
United  States. We therefore note the United  States' more general argument t hat Canada should not 
be able to rely on any information that cannot be shared with the United  States in calculating a value 
of imports in the absence of US Customs data.  
8.205.   The Arbitrator declines to ex ante  restrict Canada's ability to rely only on data tha t can be 
shared with the United  States when calculating values of imports in the absence of US Customs data. 
We recall that Canada will only have to resort to these alternate methods of calculating values of 
imports if the United  States fails to fulfil its  obligation to provide US Customs data to Canada. We 
further recall that one of the two other sources from which Canada can obtain company -specific 
values of imports are from the companies themselves (in addition to USDOC record data in 
conjunction with an  aggregate import data source). We further note that the Arbitrator has, further 
above in this section, prescribed consultations procedures in this context during which the 
United  States can raise any concerns it may have regarding the values of imports th at Canada 
calculates in this context. Under these circumstances, we consider it unreasonable to prevent 
Canada 's ability to rely on certain data because a third party ( e.g. a Canadian company) declines to 
waive relevant confidentiality privileges.  
8.206.   In light  of the for egoing , the Arbitrator instructs Canada to share with the United  States all 
information that Canada uses to calculate values of imports in the absence of US Customs data when 
Canada relays such calculations to the United  States for consultations  purposes. The exception to 
this rule is when confidentiality restrictions prevent Canada from sharing such information with the 
United  States, most notably in the context of Canada obtaining information directly from Canadian 
exporters who we understand m ust consent to such sharing. Thus, when Canada requests otherwise 
confidential information from a source, Canada shall, as part of such request, also seek the written 
consent of the providing source(s) to Canada allowing Canada to share such information wi th the 
United  States for purposes of consultations. When Canada relays its calculations of the values of 
imports to the United  States for consultations purpose s, if any relevant information cannot be shared 
with the United  States for confidentiality reasons, Canada shall also provide the United  States with 
a written summary of the reasons why such information cannot be shared.  
8.1.1.2.3   A special case: new shippers  
8.207.   In response to specific questions by the Arbitrator, the parties have offered their views 
regarding  how to calculate a value of imports for a Canadian company that is the subject of a new 
 
726 See para. 8.121 , above.  
727 See para. 8.121 , above.  WT/DS505/ARB  
 
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  shipper review that is also a triggering event.728 We include discussions of new shippers here 
separate from the other discussions regardin g values of imports above because, as will become 
apparent in the course of this section, new shippers present a special case in this context. This is so 
because with new shippers it may be reasonable to assume that new shippers would not have been 
exporti ng during the reference period (or at least not the entirety thereof), requiring a differently 
tailored approach to calculating their values of imports. That being said, we proceed to examine the 
parties ' positions with respect to this special case.  
8.208.   Canada  asserts that new shipper reviews can qualify as triggering events and that each 
party's model could accommodate their inclusion. In line with its general proposal on the reference 
period, Canada explains that the reference period for a new shipper would b e the most recent 
calendar year preceding a triggering event in which no Canadian company was subject to a CVD rate 
affected by the OFA -AFA Measure.729 Canada recognizes, however, that complications in this context 
could arise due to the fact that "new" shi ppers are just that, and thus they would have a limited 
history of exports to the United  States. Notwithstanding such complications, Canada asserts that 
import values will likely be available for a new shipper to calculate the level of NI, as the new shipp er 
has to demonstrate that it made bona fide  sales prior to making the request for a new shipper 
review. More specifically, in Canada's view, it may be questionable as to whether the new shipper 
would have exported the relevant product for the full calenda r year that comprises the reference 
period, even if that calendar year is the calendar year preceding the issuance of the final results of 
the new shipper review. However, according to Canada, it is reasonably likely that the new shipper 
would have exporte d the relevant product for the full twelve -month period immediately preceding 
the issuance of such final results, or almost all of that twelve -month period.730 According to Canada, 
this is due to the USDOC's rules governing the timelines surrounding new shi pper reviews.731 Canada 
further explains that Commerce routinely extends new shipper reviews, which means that there is 
frequently an extended time period during which the new shipper may accumulate import values 
before the publication of a new shipper revi ew's final results.732 
8.209.   Against that background, Canada has most recently indicated that the first step in 
determining the value of import for a new shipper would be that, in Canada's initial notification to 
the United  States, Canada would request US Customs  data regarding the following: (a) the value of 
imports for the reference period of the new shipper; (b) the value of imports for the new shipper 
during the most recent twelve whole calendar months immediately preceding the issuance of the 
final results of  the new shipper review that comprises the triggering event; and (c) the date of the 
new shipper's first shipment to the United  States. In Canada's view, if the new shipper's first 
shipment was before the beginning of the reference period, then the US Customs data from the 
reference period should be used to calculate the value of imports of the new shipper the same as 
for any other company. However, according to Canada, if the new shipper's first shipment was made 
at least one month after the beginning of t he reference period, then the new shipper's value of 
imports shall be taken from the twelve -month period preceding the issuance of the final results in 
the new shipper review. Moreover, Canada asserts that if the date of the new shipper's first shipment 
to the United  States occur red after the beginning of the twelve -month period specified under item 
(b) above, then Canada would annualize the new shipper's value of imports. Canada would treat the 
value (or annualized value) of imports during the twelve -month  period preceding the issuance of the 
 
728 The parties also agree that a new shipper review could qualify as a triggering event even if the new 
shipper was not assigned an af fected CVD rate. This would occur, in the parties' view, if the new shipper had 
previously shipped under an affected all -others rate and such shipments were factored into a previous 
calculation of the level of NI (Canada's response to Arbitrator question N o. 289 , paras. 38 -39; United  States' 
response to Arbitrator question No. 289 , paras. 27 -29; and Canada's comments on the United  States' response 
to Arbitrator question No. 289, para. 28).  
729 Canada indicates that the duty rate for new shipper 's shipments pr ior to the issuance of the final 
determinations would be the all -others rate (see Canada's response to Arbitrator question No. 207, para. 140).  
730 Canada's response to Arbitrator question No. 207, paras. 140 -142. Canada indicates that the new 
shipper would only not have made shipments in the twelve -month period preceding the review if the new 
shipper made its first shipment and initiated the new shipper review in very close proximity, as the new 
shipper review itself would normally take nine to ten months to  complete (Canada's response to Arbitrator 
question No. 207, fn 94 to para. 140).  
731 Canada's response to Arbitrator question No. 207, paras. 140 -142. 
732 Canada's comments on the United  States' response to Arbitrator question No. 243 , paras. 117 -119. 
Canada provides examples of five new shipper reviews dated between 2016 and 2020, inclusive, in which 
USDOC extended the timeline of the review beyond the 9 -month timeline. (Canada's comments on the 
United  States' response to Arbitrator question No. 243, fn 144 t o para. 1 18; response to Arbitrator question 
No. 207, para. 52).  WT/DS505/ARB  
 
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final results as the new shipper's value of imports during the reference period.733 Further, in response 
to a specific question and proposal from the Arbitrator, Canada agreed that, if the new shipper made 
no shipments during the reference period, then the new shippers' value of imports should be 
price-adjusted to the reference period (i.e. the  general CVD order -specific  reference period for the 
calculation of NI, from which all other companies' data are taken) using an industry -specific producer 
price index (PPI).734 
8.210.   Regarding that last type of adjustment, Canada had previously proposed that such an 
adjustment would occur by Canada calculating the ratio of the new shipper's annualized value with 
the remaining value of imp orts associated with the all -others category of exporters over the same 
time period, and then apply this ratio to the value of imports for the all -others category of exporters 
in the reference period. This would yield, in Canada's view, a reasonable estima tion of what the new 
shipper's value of imports would have been in the reference period.735 
8.211.   In the absence of US Customs data, Canada envisions obtaining the same information from 
the company as Canada would have received from US Customs, described in parag raph 8.209 , 
above, and would use those data in the same manner as described in the paragraph immediately 
above to calculate the new shipper's value of imports for the reference period. Canada also consid ers 
that it could use data concerning the new shipper's shipments from the public record of the new 
shipper review.736 
8.212.   At the end of all such calculations, Canada explains that it would then add the annualized 
and price -adjusted value of imports from the ne w shipper to the value of affected imports and to 
the market size observed during the reference period.737 
8.213.   In Canada's view, if the new shipper's value of imports cannot be obtained by any method 
already described above, then the new shipper will be assumed  to be an unaffected exporter, which 
means that the new shipper review would not qualify as a triggering event and any previously 
calculated level of NI shall remain unchanged.738 
8.214.   Canada asserts that the new shipper review would affect neither the all -other s rate nor the 
level of NI associated with the companies subject to the all -others rate in the reference period.739 
8.215.   The United  States notes that, as a factual matter, the new shipper could not have made 
exports during the original investigation's Po I.740 However, according to the United  States, the new 
shipper must have had shipments of the relevant product to the United  States to request a new 
shipper review, and a new shipper must request a new shipper review within one year of its first 
shipment to the Uni ted States.741 The United  States cautions, however, that new shippers may well 
have very limited shipments to the United  States before a new shipper review is completed.742 Also, 
 
733 Canada's response to Arbitrator question No. 295, Revised Table 1 (cells regarding new shippers ' 
value of imports in the presence of US Customs data) . 
734 Canada's response to Arbitrator question No. 294, para. 55.  
735 Canada's response to Arbitrator question No. 207, para. 142. 
736 Canada's response to Arbitrator question No. 295, Revised Table 1 at p. 25  (cells regarding new 
shipper's value of imports in the absence of US Customs data). Canada further advocates that the new 
shipper's reference period CVD rate should be the factual all-others rate that was in effect during that time, 
whether it was affected or unaffected by the OFA -AFA Measure.  
737 Canada's response to Arbitrator question No. 294, para. 55, and No. 295, para. 67. We note that 
Canada had offered prior, yet not as specif ic, proposals on how to calculate the value of imports for a new 
shipper (Canada's response to Arbitrator question No. 207, para. 142).  
738 Canada's response to Arbitrator question No. 295, Revised Table 1 at p. 25  (cells regarding new 
shipper's value of imp orts in the absence of US Customs data). Canada further advocates that the new 
shipper's reference period CVD rate should be the factual all -others rate that was in effect during that time, 
whether it was affected or unaffected by the OFA -AFA Measure  (Cana da's response to Arbitrator question 
No. 295, Revised Table 1 at p. 25).  
739 Canada's response to Arbitrator question No. 207, para. 144. 
740 United  States' comments on Canada's response to Arbitrator question No. 207, para. 103. Canada 
agrees with this observ ation (Canada's response to Arbitrator question No. 289, para. 38).  
741 United  States' response to Arbitrator question No. 277, para. 3 (referring to Exhibit CAN -55). 
742 United  States' response to Arbitrator question No. 277, para. 3. The United  States clarif ies that, if a 
new shipper does not request a new shipper review, it can still later request an administrative review  
(United States' response to Arbitrator question No.  277, para. 4 ). Canada agrees with this observation 
(Canada's comments on the United St ates' response to Arbitrator question No.  277, para. 5 ). WT/DS505/ARB  
 
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  the USDOC will initiate a new shipper review "in the calendar month beginning a fter the end of the 
six-month period beginning on the date of the countervailing duty order under review, or the end of 
any six -month period occurring thereafter if the request for review is made during that six -month 
period".743 The United  States also asse rts that, as a general matter, the USDOC will provide 
preliminary results in a new shipper review within 180 days after the initiation of the new shipper 
review, and the final results within 90 days after the issuance of the preliminary results (i.e. a tot al 
period of roughly nine months). The United  States explains, however, that the USDOC can extend 
the 180 -day period to 300 days, and the 90 -day period to 150 days (i.e. to a total period of 
approximately 15 months).744 The United  States has further confirm ed that the record of a new 
shipper review will contain publicly ranged US sales values for the new shipper.745 
8.216.   Against that background, the United  States argues that neither party's  model can 
accommodate a new shipper review as a technical matter. This is so, in the United  States' view, 
because a new shipper, by definition, "is a company that did not previously export subject 
merchandise, and thereby requests a review to receive an individual CVD rate".746 Therefore, 
according to the United  States, a new shipper will likely not have any values of imports during the 
reference period used in the applicable model.747 In the United  States' view, this is especially so 
under Canada's approach to selecting a refere nce period, which, according to the United  States, can 
lead to a reference period occurring years before a triggering event. Moreover, the United  States 
notes that if the reference period is a pre -investigation reference period, then the new shipper would 
not have made exports during that time because, by definition, the new shipper could not have 
made exports during the original investigation's PoI.748 The United  States considers that the new 
shipper's shipments, if they are to be factored into the calculat ion of the level of NI, must have 
occurred during the reference period, or else they would be "unconnected with the market the new 
shipper is entering".749 
8.217.   The United  States notes that Canada appeared to appreciate such problems and had 
originally attempted  to remedy them by using the annualized value of imports  of the new shipper 
from an unnamed year and essentially constructing fictionalized exports from the new shipper for 
the reference period " by applying the new shipper's estimated share of imports under the All Others 
rate in the unnamed year to the value o f imports under the All Others rate" in the reference period.750 
The United  States argued, however, that this method is flawed because it does not recognize that 
the composition of companies subject to the all -others rate differs between segments of a CVD 
proceeding.751 
8.218.   Moreover, the United  States argues that Canada's originally proposed approach may likely 
inflate the estimate of the level of NI. This overestimation arises, according to the United  States, 
because it is reasonable to assume that the value of imports from companies subject to the all -others 
rate will decrease  with time (i.e. as the companies become subject to other kinds of CVD rates via 
administrative reviews). The United  States also asserts that the value of imports coming from 
companies subj ect to the all -others rate could be further depressed over time due to the imposition 
of CVDs and ADDs  not at issue in this proceeding. Thus, in the United  States' view, Canada could be 
estimating the new shipper's value of imports based on an outdated and  inflated value of imports, 
subject to the all -others rate, relative to what that value would be at the time of the new shipper 
review (which could occur years following the reference period under Canada's approach).752 
 
743 United  States' response to Arbitrator question No. 243 (referring to  19 U.S.C. § 1675  
(Exhibit  USA-15), ss. (a)(2)(B)(ii) ). 
744 United  States' response to Arbitrator question No. 243 (referring to, inter alia , 19 U.S.C.  § 1675 
(Exhibit USA -15), ss. (a)(2)(B)(iii) ). 
745 United  States' response to Arbitrator question No. 295, para. 48. Canada agrees with this 
observation (Canada's response to  Arbitrator question No. 295, para. 66).  
746 United  States' response to Arbitrator question No. 207, para. 97.  
747 United  States' response to Arbitrator question No. 207, para. 97.  
748 United  States' response to Arbitrator question No. 207, para. 103. Canada ag rees with this 
observation (Canada's response to Arbitrator question No. 289, para. 38).  
749 United  States' response to Arbitrator question No. 294, para. 39.  
750 United  States' comments on Canada's response to Arbitrator question No. 207, para. 104.  
751 United  States' comments on Canada's response to Arbitrator question No. 207, para. 104  (referring 
to the United States' response to Arbitrator question No. 207, para. 79 and fn 70 thereto; Canada's response 
to Arbitrator question No. 189, para. 49) . 
752 United  States' comments on Canada's response to Arbitrator question No. 207, para. 104.  WT/DS505/ARB  
 
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8.219.   The United  States also considers that  no annualization exercise should occur with respect to 
a new shipper's value of imports, which would, in the United  States' view, artificially increase a new 
shipper's value of imports because it would be arbitrary and disconnected from factual reality.753 
8.220.   In response, Canada argues that the United  States presents no compelling evidence 
supporting its claim that new shippers may cease shipping after their first shipment pending a 
conclusion of a new shipper review.754 Canada also argues that the United  State s' position (that if 
the new shipper did not export in the reference period then a new shipper's imports must be zero ) 
relies on the untenable notion that if a new shipper has no exports during the reference period then 
the OFA -AFA Measure would have no ef fect on its exports going forward from the triggering event.755 
Canada also asserts that annualization of a new shipper's exports is appropriate in order to capture 
the annual impact of the OFA -AFA Measure, which is what the model is geared to measuring.756 
8.221.   The Arbitrator notes that, in assessing the parties' arguments in this context, establishing 
certain background facts appears helpful. We therefore note that the parties agree, and the record 
indicates, that in order to qualify as a new shipper, a company cannot have exported the relevant 
product to the United  States during the original PoI.757 Thus, any new shipper would likely not have 
made any exports in any pre -investigation reference period that may be used. Moreover, the record 
reflects that a new ship per must request its new shipper review within one year of the time it first 
exported the relevant goods to the United  States758, so the new shipper may have up to roughly 
twelve months' worth of imports to the United  States before even requesting a new shi pper review. 
Moreover, the record reflects that the USDOC will only begin a new shipper review "in the calendar 
month immediately following the anniversary month or the semiannual anniversary month if the 
request for the review is made during the 6 -month p eriod ending with the end of the anniversary 
month or the semi -annual anniversary month (whichever is applicable)" .759 This means that there is 
a time lag of between one and six months between the request for a new shipper review and its 
initiation. The par ties also agree, and the record reflects, that a new shipper review would usually 
take roughly nine months but could take up to 15 months to complete. This means that, from the 
date of the new shipper's first shipment, a new shipper review could take anywh ere from 
approximately ten months to 21 months, and thus it could be expected that a new shipper's first 
shipment to the United States occurred at least ten months before the conclusion of its new shipper 
review. In sum, we therefore note that it is: (a) unclear whether the new shipper would have starting 
exporting before the beginning of the calendar year that forms the reference period ; (b) also unclear 
whether the new sh ipper would have started exporting before the beginning of the calendar year  
prior to the USDOC's issuance of the final results  of the new shipper review; but (c)  likely that the 
new shipper would have starting exporting either before the beginning of the twelve -month period  
immediately preceding  the issuance of the new shipper review or shortly after the beginning of that 
twelve -month period.  
8.222.   With such background established, and in light of the parties ' arguments, five issues present 
themselves in this co ntext. First is whether to include new shipper reviews as triggering events. 
Second is the time -period from which to take the new shipper's value of imports and, relatedly, 
whether to allow Canada to "annualize" the value of imports of the new shipper. Thi rd is the source 
from which the new shipper 's import data should be taken. Fourth is whether to further adjust the 
value of import data to adapt it to the reference period in the manner that Canada suggests, or in 
an alternative manner. Last is how to inco rporate the value of imports from new shippers into the 
calculation of relevant value of affected imports. We address each in turn.  
 
753 United  States' response to Arbitrator question No. 294, para. 40.  
754 Canada's comments on the United  States' response to Arbitrator question No. 277, para. 3.  
755 Canada's comments  on the United  States' response to Arbitrator question No. 294, para. 41.  
756 Canada's comments on the United  States' response to Arbitrator question No. 294, para. 42.  
757 See Exhibit CAN -53, subsection (a)(2)(B)(i); 19 CFR 351.214 ( Exhibit CAN -142), subsections (a) and 
(b)(2). Because the end of the PoI  necessarily precedes the final determination in the original investigation, the 
new shipper could have started shipping after the PoI ended but before the issuance of the final determination 
in the ori ginal investigation.  
758 Exhibit CAN -142, subsection (c) and (b)(2)(iv)(A). The United  States has confirmed that this is the 
case as well (United  States' response to Arbitrator question No. 277, para. 3 (referring to Exhibit CAN -55)). 
759 Exhibit CAN -142, subs ection (d).  WT/DS505/ARB  
 
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  8.1.1.2.3.1   New shipper reviews as triggering events  
8.223.   Regarding whether to include new shipper reviews as triggering events, we note that  we 
have already concluded that triggering events could arise in any CVD proceedings in which the 
OFA-AFA Measure is used.760 Thus, we conclude that new shipper reviews can constitute triggering 
events.  
8.1.1.2.3.2   Time period from which to take new shippers ' values of  imports  
8.224.   Regarding the time period from which to take the new shippers' value of imports, we recall 
that it is: (a) unclear whether the new shipper would have starting exporting before the beginning 
of the calendar year that forms the reference period ; (b) also unclear whether the new shipper would 
have started exporting before the beginning of the calendar year  prior to the USDOC's issuance of 
the final results  of the new shipper review; but (c) likely that the new shipper would have starting 
exporting eit her before the beginning of the twelve -month period  immediately preceding  the 
issuance of the new shipper review or shortly after the beginning of that twelve -month period.761 
8.225.   In light of such circumstances, we recall the substance of Canada 's advocated app roach.762 
That is, if the new shipper's first shipment was before the beginning of the reference period, or 
occurred during the first month of the reference period, then the US Customs data from the reference 
period should be used to calculate the value of imports of the new shipper in the same way as it is 
calculated for any other company. However, if the new shipper's first shipment was made at least 
one month after the beginning of the reference period, then the new shipper's value of imports shall 
be taken from the twelve -month period preceding the issuance of the final results in the new shipper 
review. We consider that this approach will reasonably ensure that Canada takes the new shipper 's 
export data from a twelve -month period the majority of which occurred a fter the company 's first 
shipment.  
8.226.   In countenancing the above -described approach, we recognize, as does the United  States, 
that other companies ' export data will, in contrast, be taken from the reference period exclusively. 
We consider, however, that an al ternate approach for new shippers is reasonable due to their nature 
as new shippers. This status means that the risks that such companies will not have exports during 
the reference period are higher than for other types of companies. In order to best captu re the effect 
that the OFA -AFA Measure would have on new shippers ' exports following a triggering event, 
therefore, allowing an alternate period from which to take the new shipper 's data (i.e. the twelve 
months preceding the issuance of the final results o f the new shipper review) is reasonable in our 
view.  
8.227.   If Canada ultimately uses the twelve -month period immediately preceding the USDOC's 
issuance of the final results of a new shipper review as the time period from which to take the new 
shippers value of i mports, a further question arises as to whether to allow Canada to "annualize" the 
value of imports of the new shipper. That is, Canada proposes that if the new shipper made its first 
shipment after the beginning of the 12 -month period from which the value  of imports are taken, 
then the amount should be annualized to get a twelve -month value of imports. We consider such an 
annualization exercise reasonable. This is so because the selected model is geared towards 
calculating an annual  level of NI. Thus, conv erting the value of a firm 's export activity that occurred 
over fewer than 12 months to arrive at an annual value would appear consistent with the model's 
general implementation . 
8.228.   We note that the United  States argues that such an annualization exercise may improperly 
inflate the level of NI because, in the United  States ' view, the resulting annualized value of imports 
would be arbitrary and disconnected from factual reality. The United  States' criticism has some 
weight, as goods are, of course, not always exported at constant rates throughout a given 
twelve -month period. However, we also recall that it appears reasonable to assume that Canada 
would be working with at least the majority of a year 's worth of export data from the new shipper 
in this  context. This observation, in our view, materially diminishes the weight of the United  States' 
 
760 See section 6.2.3, above.  
761 See para. 8.221 , above.  
762 Canada 's proposal had been first proposed by the Arbitrator in a question to the parties. See 
Canada's response to Arbitrator question No. 295, Revised Table 1, at p. 33 ( cells for "New shippers" )). WT/DS505/ARB  
 
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criticism, as any annualization exercise would likely be done with the benefit of a relatively large 
amount of actual export data.  
8.229.   We also note that, in order t o perform an annualization exercise, Canada would need to 
know the date of the new shipper's first shipment. The sources from which Canada can obtain that 
information are discussed further in section 8.1.1.2.3.3 , below. Suffice to say for now that as part 
of obtaining the new shipper 's value of imports overall, Canada will obtain the date of the first 
shipment as part of that exercise.  
8.230.   Thus, and in sum,  if the new shipper's first shipment occurred before the beginning of the 
reference period, or occurred during the first month of the reference period, then Canada shall take 
the new shipper 's values of imports from the reference period the same as for any  other company. 
However, if the new shipper's first shipment was made at least one month after the beginning of the 
reference period, then Canada shall take the new shipper's value of imports from the twelve -month 
period (using whole calendar months) immed iately preceding the issuance of the final results in the 
new shipper review.763 If Canada uses the twelve -month period immediately preceding the USDOC's 
issuance of the final results of a new shipper review as the time period from which to take the new 
shippers value of imports, and if the new shipper made its first shipment at least one month after 
the beginning of that period, then Canada shall annualize the value of imports by multiplying the 
observed import values with the inverse of their observation p eriod.764 
8.1.1.2.3.3   Data source for value of imports  
8.231.   Regarding the source from which the data on the value of imports should be taken, Canada 
proposes that the preference would be to obtain the information from US Customs. In the absence 
of US Customs data, according  to Canada, the information could be obtained from the new shipper 
itself or from the record of the new shipper review, with no preference for either source in that 
context.765 The United  States provided no material reasons as to why Canada should not be ab le to 
rely on these sources.766 The United  States further confirmed that the new shipper 's US sales data 
will appear on the public record of the new shipper review, and that such data could be used to 
obtain the value of imports.767 The Arbitrator therefore discerns no reason to decline to allow Canada 
to rely on these data sources in the manner described by Canada.  
8.232.   Thus, to obtain data on the value of imports for a new shipper, we consider it reasonable 
that Canada shall request the following information fro m US Customs:  
 
763 To illustrate, assume that  the new shipper 's first shipment occurred two months after the beginning 
of the reference period. Further assume that the final results of the new shipper review are published on 
10 June of Year X. In this case, Canada would take the new shipper 's values of imports from the period of 
1 June of Year (X -1) through 31 May of Year X.  
764 For instance, if imports worth 120 have been observed over nine calendar months, the annualized 
value would be 120 ∗ 12
9=160 . This method was proposed to the parties, accepted by Canada, and not 
specifically criticized by the United  States as a technical m atter (Canada's response to Arbitrator question 
No. 294(b) , para. 55 ). 
765 Canada's response to Arbitrator question No.  295, Revised Table 1  at p. 33 , cells for "New shippers " 
"value of imports ". 
766 The United  States did argue, however, that Canada should not  be allowed to use data obtained 
directly from the new shipper unless it can be shared with the United  States (United States' response to 
Arbitrator question No.  295, para. 48 ). We reject this argument for the same reason s as we rejected similar 
arguments from the United  States in other contexts. (See, in particular,  para. 8.205 , above ). Moreover, we 
note that it appears reasonable to believe that the confidential data obtained from a new shipper directly may 
be no less (if not more) reliable than the publicly ranged  data on the record of a new shipper review.  
767 United States' response to Arbitrator question No.  295, para. 48. We note, however, that the new 
shipper 's data on the public USDOC record may be publicly ranged (see Canada's response to Arbitrator 
question N o. 295, para. 66 ; United States' response to Arbitrator question No. 1 95, para. 48. See also fn 184 
to para. 6.71 , above (describing publicly ranged  data) ). We further note that Canada may have to reach a 
definitive conclusion as to the date of the new shipper 's first shipment in order to implement the Arbitrator 's 
instructions in para graph  8.230 , above. Thus, Canada should always seek to obtain that specific date from the 
data source from which Canada obtains the new shipper 's value of imports. If the source specifies the date of 
the first expor t to the United  States, that date shall be used. If the source does not specify that date, then the 
first shipment that the information obtained from the relevant source reflects occurred shall be assumed to be 
the new shipper 's first export to the United  States.  WT/DS505/ARB  
 
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  a. information normally requested in an initial notification for the reference period, which 
will include shipments from the new shipper during the reference period;  
b. the value of imports for the new shipper during the most recent twelve whole ca lendar 
months immediately preceding the issuance of the final results of the new shipper 
review that comprises the triggering event768; and  
c. the date of the new shipper's first shipment to the United  States of the relevant 
product.769 All the information shall be provided by the United  States under the same 
deadline as that specified in paragraph 8.106 , above.  
8.233.   If the United  States  fails to provide US Customs data before the relevant deadline, Canada 
may, at its discretion:  
a. obtain, directly from the new shipper : 
i. data regarding the new shipper 's value of imports for the reference period ; 
ii. the value of imports for the new shipper durin g the most recent twelve whole 
calendar months immediately preceding the issuance of the final results of the 
new shipper review that comprises the triggering event ; and 
iii. the date of the new shipper 's first shipment to the United  States of the relevant 
product; or  
b. Canada may also use the new shipper's publicly ranged sales values from the public 
record of the new shipper review.  
8.234.   If both options ( a) and ( b) discussed in the preceding paragraph are unavailable, i.e. the 
new shipper's value of imports cannot be ascertained, then the new shipper review will not qualify 
as a triggering event and any previously calculated level of NI shall remain unchanged.770 
8.1.1.2.3.4   Further adjustments to the value of imports  
8.235.   If Canada takes the value of imports for the new shipp er from a period other than the 
reference period, we must consider whether to allow Canada to further adjust the value of imports 
in the manner proposed by Canada (i.e. with reference to the value of imports by companies subject 
to the all -others rate). Ca nada proposes that the ratio be taken from the annualized value of imports 
of the new shipper and the remaining value of the shipments of companies subject to the all -others 
rate during the same time period, and then apply771 that ratio to the value of impo rts of companies 
subject to the all -others rate during the reference period, thus yielding a value of imports of the new 
shipper for the reference period.772 
 
768 To the extent that this time  period does not overlap with the reference period, we consider that 
US Customs shall search for Canadian imports from the new shipper in the non -overlapping period of time 
outside the reference period by search ing for the name of the new shipper in US Customs records , 
cross-checked against all the 10 -digit HTS codes present in the CVD order. (See para. 8.92, above (specifying 
similar procedure for the special case of companies excluded from the scope of the CVD order in 
post-investigation reference periods)). This, in our minds, would reasonably limit the additional burden 
imposed on the United  States in h aving to search for potentially two time -periods worth of Canadian import 
data in this context (i.e. the reference period and the twelve -month period preceding the issuance of the final 
results of the new shipper review).  
769 If Canada is already in possessi on of certain such information at the time of the triggering event 
(e.g. information contained under item (a) left over from a previous calculation of the level of  NI), Canada shall 
only request from US Customs the information that it does not have.  
770 We note that materially similar procedures had been proposed to the parties for comment. See 
generally Arbitrator  question No. 295.  
771 It appears the "apply" in this context means "multiply with". That is, if the new shipper had 50% 
worth of the all -others valu e of imports in the relevant twelve -month period, then the new shipper would be 
assumed to have a value of imports equal to 50% of the all -others value of imports during the reference 
period.  
772 Canada's response to Arbitrator question No. 207, para. 142. WT/DS505/ARB  
 
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8.236.   While a possibility, the United  States points out a problem with this approach. That is, if one 
assumes that the value of imports from companies subject to the all -others rate will decrease over 
time (because, inter alia , companies will drop out of this category as they become subject to their 
own administrative reviews over time, a proposition unchallenged by Canada) then Canada's method 
could overestimate the level of NI.  
8.237.   The Arbitrator considers that the United  States ' criticism has merit. As a result of changes 
in composition of the all -others rate over time, it appears unduly spe culative as to whether the value 
of imports assigned to the all -others category meaningfully reflects relevant changes in market 
conditions as between the reference period and the period from which the new shipper's import data 
were taken, which would appe ar to be the assumption underlying Canada's approach. Moreover, 
Canada's approach would presumably mean that significantly more data must be gathered from 
US Customs, with significant attendant burdens on the United  States, since the values of imports 
from companies subject to the all -others rate during the twelve -month period preceding the issuance 
of the final results of the new shipper review (in addition to the reference period) would further have 
to be determined. Canada offers no proposals for address ing these issues. As such, we decline 
Canada's proposal in this context.  
8.238.   The Arbitrator does, however, consider that a further adjustment to the new shipper 's value 
of imports would be appropriate in a particular scenario, i.e. when no sales used to calcul ate the 
value of imports for a new shipper occurred during the reference period. This means that all values 
of imports being used would have occurred at a likely different price level than sales during the 
reference period. The Arbitrator thus proposed to the parties that, in this case, and in order for all 
values of imports to be at the same price level, the values of imports for the new shipper would be 
price-adjusted to the reference period using an industry -specific PPI. The price -adjusted 𝑣𝑖𝑚𝑝 𝑅𝑃 
would be calculated as follows:  
𝑣𝑖𝑚𝑝 𝑅𝑃=𝑣𝑖𝑚𝑝 𝑡(𝑃𝑃𝐼𝑅𝑃𝐷𝐸𝐶
𝑃𝑃𝐼𝑡𝐷𝐸𝐶), 
where  𝑣𝑖𝑚𝑝 𝑡 denotes the annualized import values as observed, 𝑃𝑃𝐼𝑡𝐷𝐸𝐶 denotes the industry -specific 
price level for this period, and 𝑃𝑃𝐼𝑅𝑃𝐷𝐸𝐶 denotes  the industry -specific price  level for the month of 
December in the reference period.773 Canada accepted this proposal by the Arbitrator, and the 
United  States has made no specific technical objection to it.774 The Arbitrator therefore considers 
this price -level adjustment to be reasonable in this special case. As such, when no sales used to 
calculate the value of imports for a new shipper occurred during a reference period, Canada shall 
price-level adjust the v alue of imports of the new shipper to the reference period in the manner 
described in this paragraph.  
8.1.1.2.3.5   Incorporation of new shippers' values of imports in the model  
8.239.   Regarding how to incorporate the value of imports from a new shipper into relevant market 
shares in the selected  model,  the Arbitrator proposed a method to the parties, which was agreed to 
by Canada. The United States raised no specific technical objections to it. Hence, the Arbitrator 
instructs Canada to apply the following method: Canada shall  add the value of imports of new shipper  
to the reference -period value s of imports to the other affected (if the new shipper is affected) or 
unaffected (if the new shipper is unaffected) Canadian companies  and to the overall market size  
insofar as the new s hipper's value of imports are not taken from the reference period .775 All other 
market shares then would have to be recalculated with the methodologies and data sources  as 
described in the other  section s of 8.1.1, above  and below . 
 
773 The instructions outlined in section 9.4 below on the data sources for industry -specific PPIs  and on 
the matching of CVD order -specific product codes to industries shall equally apply here.  
774 Canada's response to Arbitrator question No. 294, para. 55; United States' response to Arbitrator 
question No. 294, para. 41.  
775 Of course, we note that, inso far as the new shipper's value of imports was already taken from the 
reference period, that amount will already be accounted for in the reference period value of imports and the 
overall market size.  WT/DS505/ARB  
 
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  8.1.1.2.3.6   Conclusion: new shippers  
8.240.   As the above discussions indicate, new shippers pose a somewhat special case requiring a 
tailored approach . Thus, if and when a new shipper review arises as a triggering event, Canada shall 
apply the specific guidance above, in conjunction with other relevant guidance in other sections 
further above, to calculate a value of imports for the new shipper.  
8.1.1.3   Value of RoW import s 
8.241.   In Canada 's original ly proposed methodology, imports from the RoW not subject to any 
change -in-duty rate are an input in determining Canada's market share in the US market. Canada 
suggests using 2019 US Census data to calculate Canada's share in total imports (i.e. from Canad ian 
and non -Canadian sources), and multiplying this share with the share of imports in total 
US absorption to derive the Canadian market share.776 
8.242.   The United  States proposes to source import values from the RoW from US Census  data. 
These imports would be calculated by subtracting imports from Canada (the sum of affected and 
unaffected imports) from total US imports.777 
8.243.   For the sake of clarity, the Arbitrator notes that US Census provides US trade statistics via 
its database (USA Trade Online ). We further no te that both parties suggest using US Census trade 
statistics in this context to determine the value of imports from the RoW. Therefore, the Arbitrator 
suggested in its own proposal outlined in Annex A to Arbitrator  question No. 246 (i.e.  when proposing 
its own approach to calculating market shares) to rely on these data to determine the value of total 
US imports. The Arbitrator notes that neither party expressed concerns with respect to this data 
source. Both parties consider US Census data  preferable over  trade statistics accessed via 
USITC  DataWeb.778 We see no reason to deviate from the parties' shared opinion.  
8.244.   The Arbitrator thus concludes that Canada shall use the following procedure for determin ing 
the value of imports from the RoW. First, Canada shall  determine the total value of US imports for 
the reference period for all the 10 -digit HTS codes in the relevant CVD order using USA Trade Online. 
If such data are unavailable, Canada shall source this data from USITC DataWeb as an alternative.779 
Next, Canada shall subtract from that total amount the value of imports of the relevant product from 
Canada, computed as outlined in section 8.1.1.2 , above. The resulting value shall be the value of 
imports from the RoW.  
8.1.2   Duty rates  
8.245.   The selected model uses as inputs all Canadian companies' reference period CVD rates and 
factual CVD rates, and, for affected companies only, counterfactual CVD rates. We mu st therefore 
specify how such rates are assigned to various types of companies ' values of imports . This section 
addresses that issue in four parts. First, it discusses whether to include duties other than CVDs in 
Canadian companies' relevant duty rates. Se cond, it addresses the role of provisional duties. Third, 
it prescribes how Canada should assign CVD rates to Canadian companies ' values of imports . Finally, 
it discusses how to assign single relevant duty rates to aggregated values of imports for affected  
and unaffected Canadian companies.  
8.1.2.1   Duties other than CVDs  
8.246.   The United States argues that "the calculation of the change in duties will need to take into 
account the associated [AD] rates" .780 More specifically, in the United States' view, "if … dumping 
rates [are] applied to the product in the proceeding, they should be taken into account in the overall 
duty calculation since both the AD and CVD rates will affect the relative competitiveness of the 
 
776 Report Appending Canada's Methodology Paper (BCI) (Cana da's methodology report),  paras. 29 -30. 
777 United  States' written submission, Appendix 2, Table 1.  
778 United States' response to Arbitrator question No. 178, fn 85  to para. 100 ; Canada's response to 
Arbitrator question No. 222, fn 132  to para. 192 ; United  States' comments on Canada's response to Arbitrator 
question No. 222, para. 132 ; Canada's response to Arbitrator question No. 276, para. 6.  
779 In doing so, Canada shall use the same search criteria outlined in Tables 1 -2, above, adapted 
appropriatel y to this context.  
780 United States' written submission, para. 133.  WT/DS505/ARB  
 
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Canadian product that is representative of the realities of the market."781 If the AD rates are not 
taken into account in the selected model, the United States argues that the counterfactual would 
"reflect an inappropriately high level of nullification or impairment for Canada" .782 In sum, the 
United  States argues th at "if a Canadian company affected by the challenged measure was subject 
to both AD and CVD duties, the correct calculation for that company's change in duty should be the 
difference between all duties (CVD and AD) applied to the specific company with the challenged 
measure in effect, compared to all duties excluding the challenged measure applied to the specific 
company."783 The United States provides examples illustrating how ADDs, if not taken into account 
in the overall duty rates to which relevant Canad ian companies would be subject at relevant times, 
would affect the calculated level of NI.784 The United States clarifies, however, that although it is 
possible for the United States to impose ADDs and CVDs on overlapping but non -identical products, 
the mod el should only account for ADDs if the ADDs and CVDs affected by the OFA -AFA Measure are 
placed on identical products ("when the product description in the AD  and CVD orders is the 
same"785) during "the same time period".786 Overall, therefore, according to the United States, in 
the selected model, all duty rates (i.e. the reference period duty rate, the factual  duty rate, and the 
counterfactual duty rate) should include the ADD rate.787 The United States asserts that this is 
necessary "to correctly estimate the level of nullification or impairment by isolating the effect of the 
challenged measure on U.S. imports from Canada while controlling for all other duties during the 
relevant time period" .788 
8.247.   Canada rejects the United Sta tes' argument that ADDs should be considered when 
calculating the change -in-duty rate. Canada asserts that the US  proposal is overly speculative 
because: (a) it is unclear whether ADDs will be imposed in future proceedings in which the 
OFA-AFA Measure is u sed; (b) the United States never explained why including ADDs in the proposed 
manner is reasonable; and (c) "it is also speculative whether any hypothetical anti -dumping duties 
would have a measurable effect on the market conditions for the Canadian produc t".789 Canada also 
argues that the United States' proposal "inappropriately broadens its own proposed counterfactual 
beyond a compliance scenario that eliminates the duty resulting from the OFA -AFA measure", 
because ADDs are unrelated to the operation of th e OFA -AFA Measure.790 Finally, Canada claims that 
the arbitrator in US – Washing Machines (Article  22.6 – US) did not "consider[] … countervailing 
duties that could have been imposed on goods exported to the United States relevant to the 
calculation of null ification or impairment."791 
8.248.   Canada also argues that taking ADDs into account would be inappropriate because US ADDs 
would likely be calculated in a WTO -inconsistent manner. Thus, "[i]f anti -dumping duties had to be 
taken into account, the counterfactuals m ay also need to consider a reasonable and plausible 
compliance scenario not only for the removal of the OFA -AFA measure, but likely also the removal 
of the U.S. anti -dumping duties that are currently WTO -inconsistent, or that are found to be 
WTO-inconsiste nt in the future".792 Canada asserts in this context that the US – Washing Machines 
(Article 22.6 – US) arbitrator stressed that a chosen counterfactual should not be 
 
781 United States' written submission, para. 133.  
782 United States' written submission, para. 133; response to Arbitrator question No. 81, paras. 208 and 
238. This is so, mathematically, becau se, according to the United States, "it is the percent change in the total 
duty rate" related to the use of the OFA -AFA Measure that is relevant to the calculation of NI. Thus, the initial 
duty rate is the sum of relevant CVD and ADDs on the product in que stion, and the counterfactual duty rate is 
the counterfactual CVD rate and the ADD rate applied to the product in question. (United States' response to 
Arbitrator question No. 81, para. 20 9 (emphasis original) ). 
783 United States' written submission, para. 1 33. The United States asserts that changes in ADDs would 
not independently trigger the need to run the model (United States' response to Arbitrator question No. 77 , 
para. 206 ). 
784 See United States' response to Arbitrator question No. 81 , paras. 208 -212, No. 83, paras. 214 -227, 
and No.  84, paras. 228 -239. 
785 United States' response to Arbitrator question No. 78, para. 207.  
786 United States' response to Arbitrator question No. 82, para. 213.  
787 United States' response to Arbitrator question No. 84, para. 238 , and No. 151, para. 71 and fn 56 
thereto.  
788 United States' response to Arbitrator question No. 151 , para. 71 . 
789 Canada's written submission, para. 168.  
790 Canada's written submission, para. 163.  
791 Canada's written submission, para. 164. 
792 Canada's response to Arbitrator question No. 78, para. 165. (fn omitted)  WT/DS505/ARB  
 
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  WTO-inconsistent.793 In Canada's view, taking ADDs into account in the manner suggested by the 
United States is unreasonable because it would be impracticable to implement in a situation where 
the USDOC imposes ADDs and CVDs on overlapping but different product groups . This is  because it 
would be likely impossible under the US model to ascertain  relevant parameters and appropriate 
counterfactuals for all the "varieties" of imports. Consequentially, in Canada's view, the interaction 
of such considerations with the more complicated counterfactual means that it would be extremely 
difficult to calcul ate a level of NI.794 
8.249.   The United States  responds to Canada's arguments about ADDs, noting that the 
United  States is, contrary to Canada's assertions, not asking the Arbitrator to speculate as to 
whether ADDs and relevant CVDs will be imposed on relevant products in the future.795 Moreover, 
the United States asserts that, in arguing that ADDs should be taken into account, the United States 
is not inappropriately broadening the scope of any relevant counterfactual because the United States 
is arguin g that ADDs are simply among the many circumstances that are held fixed as between 
reality and the counterfactual world.796 The United States further asserts that if there are ordinary 
tariffs, or any other kinds of duties, placed on the relevant product su bject to the CVDs affected by 
the OFA -AFA Measure during the year in which the market shares or the value of imports  is 
calculated, those duties should also be taken into account in any model.797 
8.250.   The United States rejects Canada's argument that the WTO -consistency of US ADDs is 
relevant for purposes of this proceeding, for the simple reason that the presence of ADDs is part of 
the factual  rather than the counterfactual  analysis. Thus, according to the United States, the 
presence of ADDs is a constant, rather  than something that requires adjustment in the 
counterfactual.798 The United States also asserts that Canada's assumption that future US ADDs will 
be WTO -inconsistent is without basis and unreasonable given that, by definition, no such future  
ADDs have been subject to WTO dispute settlement.799 Moreover, the United States confirms that it 
could provide all such information to Canada pursuant to the parties' jointly proposed BCI 
Understanding.800 
8.251.   The Arbitrator notes that, in this context, the Un ited States argues that the chosen model 
should include tariffs and duties other than CVDs that are imposed on the relevant product during 
the reference period. In its proffered form, we consider the United States' argument difficult to 
accept. This is so because we discern no material attempt by the United States to demonstrate that 
taking other tariffs and duties into account in the manner suggested is a workable strategy for 
Canada. The United States provides no list of the forms that such other tariffs or duties could take, 
does not explain their relevant modes of implementation vis-à-vis a particular product that may be 
subject to relevant CVDs, and does not describe how Canada could practically take such a universe 
of tariffs and duties into account.801 Moreover, we note that the United States never specifically 
argues that any particular subset of duties or tariffs should be taken into account to the exclusion 
 
793 Canada's response to Arbitrator question No. 77. Specifically, Canada asserts that US ADDs imposed 
on Canadian companies would likely use the "Differential Pricing Methodology" found to WTO -inconsistent in US 
– Washing Machines . 
794 Canada's response to Arb itrator question No. 78 , paras. 162 -166, and No. 80, paras. 173 -174.  
795 United States' response to Arbitrator question No. 83, paras. 208 and 210 -212. 
796 United States' response to Arbitrator question No. 81, para. 210. 
797 United States' response to Arbitrat or question No. 85 , para. 240  ("if ordinary tariffs are in place in 
the year prior to the imposition of the challenged measure, they should be represented in the year -prior duty 
rate)" , and No. 151 , para. 71  ("[t]he purpose is to correctly estimate the lev el of nullification or impairment by 
isolating the effect of the challenged measure on U.S. imports from Canada while controlling for all other duties  
during the relevant time period"). (emphasis added)  
798 United States' response to Arbitrator question No. 149, paras. 64 -65. 
799 United States' response to Arbitrator question No. 149, paras. 66 -67. 
800 United States' response to Arbitrator question No. 150, para. 70.  
801 Potential problems may pertain to the following subjects, such as : (i) identifying relevant mea sures; 
(ii) measures affecting products that overlap incompletely with the relevant product subject to CVDs; 
(iii) discerning what the applicable rates associated with other measures are; (iv) identifying the periods of 
time any particular rate was in effe ct; (v) additional burdens on Canada to account for such measures in the 
model; (vi) verification of any additional data received by Canada from the United States in this context; and 
(vii) resolving disagreements that may arise as between the parties conc erning the inclusion of such duties.  WT/DS505/ARB  
 
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of others.802 We also discern no principled or practical reason as to why only a subset of tari ffs or 
duties should be taken into account, while others should not.803 
8.252.   The Arbitrator therefore considers that it must ultimately decline to accept the United States' 
argument on the basis of the facts and arguments presented in this proceeding . As a resul t, the 
Arbitrator considers Canada's remaining arguments as to why the model should not take other tariffs 
and duties into account are moot.  
8.1.2.2   Provisional CVDs  
8.253.   In response to a question from the Arbitrator, Canada noted that, in original investigations, 
provisional CVD rates may be imposed on companies before the imposition of a final CVD order. 
Canada originally asserted that, if such provisional duties are imposed on Canadian companies during 
a relevant reference period, the reference period duty rates shou ld include those provisional rates.804 
Canada subsequently clarified, however, that if provisional duties are in place during a 
pre-investigation reference period, then it would not be unreasonable to exclude them from the 
relevant companies' reference -period CVD rates because the USDOC has not verified those rates 
and they are subject to change.805 
8.254.   The United States asserts that provisional measures may be imposed during the course of  
an original investigation. In the United States ' view, however, provisiona l duties need not be taken 
into consideration in the reference period duty rates because such measures are imposed pursuant 
to preliminary determinations that are not final. The United States also observes that the provisional 
rates would not be affected b y the OFA -AFA Measure because verification occurs after preliminary 
determinations in CVD investigations. The United States thus argues that, in pre -investigation 
reference periods the CVD rates of both individually investigated companies and companies sub ject 
to the all -others rate will always be zero.806 
8.255.   The Arbitrator notes that provisional duties can be imposed during the course of an original 
investigation, which means they would only be relevant for calculating reference -period CVD rates 
when the parti es use a pre -investigation reference period.807 Such duties are, by nature, provisional 
and subject to change pending the investigation's outcome. Both parties agree that provisional duties 
can be disregarded given that the provisional duties are not verifi ed and subject to change. 
Moreover, we note that provisional duties, under WTO disciplines, may only be imposed for a 
maximum of four months808 (i.e. a maximum of only one -third of a year -long reference period) and 
that inclusion of such rates would further  complicate an already complex model. In light of such 
circumstances, the Arbitrator finds that the parties shall disregard provisional CVD rates in the 
construction of any relevant CVD rate for purposes of calculating a level of NI.  
8.1.2.3   Assignment of CVD rate s to specific Canadian companies ' values of imports  
8.256.   In the previous two sections, the Arbitrator has eliminated from consideration any duties 
other than CVDs assigned as a result of the imposition of a CVD order following an original 
investigation. That be ing the case, the Arbitrator recalls that the selected model uses as inputs all 
 
802 Canada does indicate that "ordinary tariffs " may be included in duty rates, although both parties note 
that nearly all imports from Canada enter the United States'  tariff free (Canada's response to Arbitrator 
question No.  148, fn 78 to para. 100 ; United States' response to Arbitrator question No.  85, para. 240 ). Thus, 
the parties agree that ordinary tariffs are almost always irrelevant in any event, and neither party offers any 
specifics on their rel evant administration or modes of implementation when they do exist in some form.  
803 We note that, in its earlier submissions, the United States had focussed on ADDs as duties that 
should be taken into account. However, even with respect to ADDs, specificall y, the United States has offered 
no explanations to the effect that AD and CVD orders would in all relevant cases be administered and/or 
implemented in manners that would raise no material complications for Canada in calculating a level of NI. 
Indeed, we t ake special note in this context that the United States had to revise its argument in this context in 
response to an Arbitrator question that raised related concerns ( see United States ' response to Arbitrator 
question No. 78, para. 207 (explaining that, in  response to an Arbitrator question, potential differences in 
product scope as between AD and CVD orders could cause significant problems in calculating a level of NI, and 
thus arguing that ADDs should only be considered when ADDs and CVDs are applied to a n identical product)).  
804 Canada's response to Arbitrator question No.  283, paras. 14-20. 
805 Canada's comments on the  United States' response to Arbitrator question No.  283, para. 14 . 
806 United States' response to Arbitrator question No.  283, para. 14.  
807 Article 17  of the SCM Agreement . 
808 Article 17  of the SCM Agreement . WT/DS505/ARB  
 
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  Canadian companies ' reference period CVD rates and factual CVD rates, and, for affected companies 
only, counterfactual CVD rates. We must therefore specify how such rates are a ssigned to various 
types of companies , and, ultimately, to the two Canadian varieties (i.e. affected and unaffected 
imports) . For ease of analysis, and in light of how the parties have structured their arguments on 
this score, we do so in the following five parts. First, we prescribe certain common rules that 
generally apply to all companies. Second, third, fourth, and fifth we prescribe additional guidance 
pertaining, as needed, to : (i) companies subject to a factual individual CVD rate ; (ii) companies 
subject to a factual non -selected CVD rate ; (iii) companies subject to a factual all -others rate ; and 
(iv) to new shippers.  
8.257.   This guidance is further organized into Table 4 in section 8.1.3, below. We note that the 
guidance offered in that table is offered mainly for convenient reference and is necessarily summary 
in form. Thus, insofar as the summary guidance in that table differs from the more detaile d guidance 
offered in these sections, the guidance in these sections shall prevail.  
8.1.2.3.1   Procedures common to all companies  
8.258.   We note that Canada, in particular, and in response to proposals by the Arbitrator on these 
subjects, offered its own proposals regarding how to assign relevant CVD rates to relevant types of 
companies. Certain of these procedures, which we consider reasonable, apply to different types of 
companies. Therefore, in an effort to avoid duplicative guidance, we prescribe here certain 
procedures for assigning certain types of CVD rates which will apply across all companies , both 
affected and unaffected . 
8.259.   First, counterfactual CVD rates for all types of companies shall be determined with reference 
to the discussions in section 6.3, above. We therefore do not further discuss counterfactual duty 
rates here.  
8.260.   Second, for a pre -investigation reference period, the reference -period CVD rates f or all 
companies shall be zero.809 
8.261.   Third, we note that when Canada receives US Customs data with which to calculate values 
of imports, US Customs will relay to Canada the reference -period CVD rates and factual CVD rates 
for all relevant companies.810 Canada proposes that Canada use this information to calculate 
reference -period duty rates for all relevant companies.811 The United States does not contest this 
approach  and we see no particular reason why Canada should not also rely on the information 
regarding f actual CVD rates contained in the US Customs dataset for assigning factual CVD rates to 
companies. Therefore, w hen US Customs data is relayed to Canada, these data may be used to 
assign reference -period and factual CVD rates to Canadian companies. We note, however, with 
respect to the reference -period and factual CVD rates contained in the US Customs data spreadsheet  
(see section  8.1.1.2.1.3 (c), above) if it is discovered that they conflict with the rates established by 
the USDOC in public USDOC record documents (i.e. if an error is revealed in the US Customs dataset 
with respect to CVD rates), the authoritative USDOC record documents shall prevail.  
8.262.   Fourth, we note that, in the absence of US Customs data, both parties agree that all 
companies' relevant reference -period and factual CVD rates are available by consulting public 
USDOC record documents, including Federal Register notices.812 Thus, in the absence of US Customs 
 
809 This is so because the only CVD rates that would be in effect during that time are provisional CVD 
rates, which we have decided to exclude from consideration (see section  8.1.2.2 , above ). Moreover, we have 
excluded the consideration of other types of duties other than CVDs (see section 8.1.2.1 , above. See  also 
Canada's response to A rbitrator question No.  283, para. 15 ( "Both parties have confirmed the Arbitrator's 
understanding that for pre -investigation reference periods, the CVD rate will be zero. ") (referring to Canada's 
response to Arbitrator question No. 209, para. 151; United S tates' response to Arbitrator q uestion No. 209, 
para. 99) ). 
810 See Annex C -3. 
811 See Exhibit USA -53, column K; Exhibit CAN -147, column Q. See a lso Canada's response to Arbitrator 
question No.  295, Revised Table 1; United States' comments on Canada's response  to Arbitrator question 
No. 295, paras.  33-38. 
812 See e.g. Canada's response to Arbitrator question No.  295, Revised Table 1, last column; 
United  States' response to Arbitrator question No.  30, para. 89 (noting that published CVD rates are not 
confidential) , No. 189, para. 33, No. 286, para. 18, and  No. 295, para. 55 ; Canada's comments on the 
United  States' response to Arbitrator question No.  295, para. 52.  WT/DS505/ARB  
 
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data, Canada shall determine relevant companies' reference -period and factual CVD rates by 
examining USDOC public record documents, including Federal Register notices.  
8.263.    Fifth, we note that reference -period CVD rates may c hange during the course of a reference 
period for a company. Both parties have recogni zed that a reasonable solution to this issue is to 
weight the reference -period duty rates by the number of months in which they were in effect.813 We 
consider this proposa l reasonable as well, and adopt it as such. Thus, if a company's reference -period 
CVD rate changes over the reference period, each applicable CVD rate shall be weighted for that 
company by the number of months during which it was in effect, rounding up or down to a whole 
number of months (rounding up if the CVD rate was in effect for at least half of the month).  
8.264.   With these general rules established, we turn to prescribe guidance as to how to assign 
relevant CVD rates for types of companies. Here, we follow the same structural approach as we 
followed in discussing how to determine values of imports for certain types of companies.814 We 
therefore discuss, in turn, how to assign CVD rates to : (i) companies subject to a factual individual 
CVD rate ; (ii) companies subject to a factual non -selected CVD rate ; (iii) companies subject to a 
factual all -others rate ; and (iv) new shippers.  
8.1.2.3.2   Companies subject to a factual individual CVD rate  
8.265.   Canada proposed no procedures for individually investigated or reviewed c ompanies that 
differ from the guidance in the preceding section. Thus, the guidance in the above section shall apply 
for individually investigated companies both in the presence and absence of US Customs data. We 
also note that, although neither party recognizes it as a possibility, in the interest of  completeness 
we further specify that if neither US Customs data nor the USDOC public record data for some reason 
do not contain the relevant reference period or factual CVD rate(s) for an individually investig ated 
or reviewed company, then Canada shall assume that the company's value of imports is part of the 
value of imports assigned to the companies subject to the factual all -others rate.815 
8.1.2.3.3   Companies subject to a factual non-selected rate  
8.266.   Canada offered one r elevant additional special piece of guidance for determining the 
reference -period CVD rates of companies subject to a factual non -selected rate. That is, Canada 
proposed that, if, in the absence of US Customs data, Canada cannot calculate a company -specifi c 
value of imports for a company subject to a non -selected rate, and thus must calculate an aggregate 
value of imports for a group  of such companies, then the group of companies would be assigned the 
non-selected rates in effect during the reference period .816 
8.267.   The United States, for its part, notes that, when Canada calculat es a weighted average for 
a group of companies (e.g. those subject to a factual non -selected rate), then performing a simple 
average of the companies' relevant CVD rates during the refere nce period would be reasonable. Only 
in the instance where the number of companies used to calculate an aggregate value of imports, 
and h ence their CVD rates, cannot be determined, should Canada be able to resort to another and 
assumed CVD rate (e.g. the a ll-others rate).817 
8.268.   Canada responds that it does not object "in principle " to assigning a simple average of 
reference period CVD rates of companies used to calculate an aggregate value of imports, as 
suggested by the United States, but does indicate that su ch a process could be very burdensome on 
Canada when the number of relevant companies is high and when such companies CVD rates are 
 
813 Canada's response to Arbitrator question No.  209, paras. 154 -156; United States' response to 
Arbitrator question No.  209, paras. 99 -101. 
814 See generally section 8.1.1.2 , above.  
815 We recall that the value of imports for the all -others rate is the "residual " category of the value of 
imports  both in the presence and absence of US Customs data  (see fn 547 to para. 8.92  and section 
8.1.1.2.2.1 , above ). 
816 Canada's response to Arbitrator question No.  295, Revised Table 1 (cell for "Companies subject to a 
non-selected rate " in last column for "Without US Customs data "). 
817 United State s' response to Arbitrator question No.  295, para 55-56. WT/DS505/ARB  
 
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  changing over time. Canada thus ultimately considers its own approach, discussed two paragraphs 
above, to be more appropriat e.818 
8.269.   The Arbitrator recognizes  that, in the absence of company -specific US Customs data, data 
from companies subject to a non -selected rate may pose challenges for Canada. This is so because, 
first, there may be multiple non -selected rates active at the time of a triggering event. Also, the 
group of companies subject to any single non -selected rate could be large and such companies also 
could have different reference -period CVD rates.819 Thus, the process of determining 
reference -period and factual CVD rat es for this group of companies could well be complex and 
burdensome on Canada in the absence of US Customs data. Moreover, Canada's  options for 
calculating a company -specific value of imports are more limited for companies subject to a 
non-selected rate th an they are for individually investigated companies.820 This means that Canada 
may have to calculate values of imports for groups  of companies subject to a given non -selected 
rate, and thus need to assign that aggregated value of imports from multiple compa nies a single 
reference -period CVD rate.  
8.270.   In light of such circumstances, we consider that providing Canada additional flexibility in 
assigning reference -period and factual CVD rates in this context is reasonable. We further consider 
that, because examinati ons of public records could be burdensome in this context, any additional 
option that Canada has in this context to calculate such rates should be simple to apply. This is 
particularly so given that the only reason Canada would have to engage in this proce ss is because 
the United States failed to supply US Customs data.  
8.271.   Thus, we consider that, in this specific context, for a reference period CVD rate821, although 
Canada is encouraged to calculate individual values of imports and associated individual CVD rates 
for companies subject to factual non -selected CVD rates, Canada may assign to any company or 
group of companies subject to factual non -selected CVD rates at the time of the triggering event a 
simple average of the non -selected CVD rate s in effect during the reference period.  
8.272.   Moreover, if: (a) the USDOC records do not contain the relevant reference period CVD rate(s) 
and/or factual CVD rate(s) of a company or group of companies; or (b) Canada considers it too 
burdensome to calculate the reference period and/or factual rates for a company or group of 
companies, then Canada may assume that the value of imports of the company or companies  is part 
of the value of imports assigned to the all -others rate (see below). If Canada does so assume, 
Canada shall inform the United States in writing the reasons for doing so at the time Canada relays 
its calculations of values of imports to the United States for consultations purposes.  
8.1.2.3.4   Companies subject to a factual all-others rate  
8.273.   We recall that the all -others rate is established at the conclusion of the original investigation, 
and that it stays constant over the duration of the CVD order 's life. Thus, we note that assigning 
CVD rates to companies subject to a factual all -others rate is a straightforward proposition. That is, 
unless the reference period is a pre -investigation reference period (in which case the all -others rate 
will be zero), the reference period CVD rate will be the all -others rate in effect during the reference 
period. The factual rate sh all also be the single factual all -others rate in effect following the triggering 
event.  
 
818 Canada's comments on the United States' response to Arbitrator question No. 295,  para. 52.  
819 Canada notes that in the Softwood Lumber CVD proceedings, "25 separate countervailing duty rates 
have been generated over the course of the proceeding " (Canada's response to Arbitrator question No. 189, 
para. 50) and "[t]here were 243 named companies that requested participation in the first administrative 
review, that number increased to 260 in the s econd administrative review, and 264 companies are now subject 
to the third administrative review. " (Canada's response to Arbitrator question No.  189, fn 38 t o para. 50) . 
820 For individually investigated companies, company -specific values can be obtained either from the 
company itself or by using USDOC record data in conjunction with an aggregate data source. For a company 
subject to a non -selected rate, only the former can b e use d (see section s 8.1.1.2.2.2  and 8.1.1.2.2.3 , above ).  
821 We consider that reference -period CVD rates will generally be more difficult to obtain than factual 
CVD rates, as only the most recently assigned CVD rates to a company are needed to obtain the latter. 
Although further examination of  USDOC public records may have to be performed to obtain additional CVD 
rates from companies if reference period CVD rates changed over time.  WT/DS505/ARB  
 
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8.1.2.3.5   New shippers  
8.274.   We recall that new shippers were addressed separately in the section addressing calculating 
a value of imports since new shippers presented a somewhat spe cial case in that context.822 This is 
so because the period of time from which a new shipper's values of imports are taken m ay be 
different than the reference period. We further recall, however, that a new shipper will be subject to 
the all -others rate befo re receiving a new duty rate from the new shipper review.823 Thus, we clarify 
here that the new shippers ' reference period CVD rate shall be the factual all-others rate  to which 
the new shipper was in fact subject during the time from which its value of imp orts is taken.  A new 
shipper's factual CVD rate will be the CVD rate actually assigned to the new shipper as a result of 
the new shipper review. If the new shipper received an affected rate in the new shipper review, then 
its counterfactual CVD rate will b e determined in accordance with the guidance in section 6.3.3, 
above.  
8.1.2.4   Assigning single duty rates to the affected and unaffected Canadian varieties  
8.275.   At this point, we consider it helpful to recall that two of the four varieties to be used in the 
selected model are affected Canadian imports and unaffected Canadian imports. In section 8.1.1.2 , 
above, we described how Canada shall determine the aggregate values of affected and unaffected 
Canadian companies. We further recall  that the selected model requires that a single  reference 
period duty  rate and a single  factual duty rate be assigned to each variety of Canadian companies, 
i.e. affected and unaffected companies. The affected variety will also require a single  counterfactual 
duty rate to be assigned to it. We therefore recall that each of the two Canadian varieties may have 
been based on the values of imports from many different companies, which may have different  duty 
rates. Thus, different firms' reference period, factual, and/or counterfactual duty rates would have 
to be averaged in orde r to arrive a t a single relevant duty rate. Such average duty rates across firms 
shall be calculated , for each of the two groups of affected and unaffected companies,  as 
trade -weighted averages based on the following formula : 
𝜏=∑𝜏𝑗𝑀𝑗
∑𝑀𝑗 𝑗𝑗, 
where 𝜏𝑗 and 𝑀𝑗denote the duty rate and shipment value of company 𝑗, respectively, and the totality 
of all imports  across all companies withing the group of affected or unaffected companies  is described 
by ∑𝑀𝑗 𝑗. 
8.1.3   Summary of guidance for values of imp orts and duty rates  
8.276.   In sections 8.1.1.2  and 8.1.2, above, we have provided guidance for calculating values of 
imports for affected and unaffected Canadian companies and the assignment of duty rates thereto. 
Below, for convenient reference, appears a table summarizing such guidance. We underline that  this 
table is summary in nature and therefore the more detailed guidance in the sections above shall be 
authoritative.  We also include a table summarizing relevant deadlines with respect to the processes 
for calculating values of imports . 
 
822 See section 8.1.1.2.3 , above.  
823 See United States' comments on Canada's response to Arbitrator question No. 277, para. 3; 
Canada's comments on the United States' response to Arbitrator question No. 277, para. 5.  WT/DS505/ARB  
 
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  Table 4: Summary of guidance for calculating values of imports and duty rates  
Type of factual CVD rate 
to which company is 
subject immediately 
following the triggering 
event  Value of Imports  Reference Period and Factual 
Duty Rates824 
Individual CVD rate (i.e. 
as a result of being an 
individually 
investigated/reviewed 
company)825 With US Customs data  
Identify and determine the import 
values for the company based on 
disaggregated US Customs data 
provided by the United States.  With US Cust oms data  
The reference period CVD rate will be 
the CVD rate (if any) applied to the 
company's shipments as reported by 
US Customs. US Customs will also 
provide the factual CVD rate.  
If the company's reference period 
CVD rate changes over the reference 
period, each applicable CVD rate shall 
be weighted for that company by the 
number of months during which it was 
in effect, rounding up or down to a 
whole number of months (rounding 
up if the CVD rate was in effect for at 
least half of the month).  
Withou t US Customs data  
Canada will identify each company 
based on USDOC records and, at 
Canada's discretion:  
(1) Obtains import values for the 
reference period directly from the 
company; or  
 
(2) Use publicly  ranged US sales data 
of the company from the USDOC 
CVD proceeding record with a 
PoI/PoR that is closest to the 
reference period826 to determine 
the company's share of total US 
imports from Canada in 
conjunction with data from an 
aggregate data source , and 
adapting it to the total value of 
US imports from Ca nada during 
the reference period.  
 
(3) If both options (1) and (2), 
immediately above, are 
unavailable, then the company 's 
value of imports shall be assumed 
to be part of the value of imports 
subject to the all -others rate (see 
below).  Without US Customs data  
Reference period CVD rates and 
factual CVD rates for individually 
investigated or reviewed company 
shall normally be available from 
public USDOC records.  
If a relevant reference period CVD 
rate changed over the reference 
period, each applicable CVD rate shall 
be weighted by the number of months 
during which it was in effect, rounding 
up or down to a whole number of 
months (rounding up if the CVD rate 
was in effect for at least half of the 
month).  
If the USDOC records do not contain 
the relevant reference  period CVD 
rate(s) and/or factual CVD rate of a 
company , then Canada may assume 
that the company 's value of imports is 
part of the value of imports assigned 
to the all -others rate (see below).  
Factual non -selected rate  With US Customs data  
Identify and determine the import 
values for this category of companies 
based on disaggregated US Customs 
data provided by the United States.  With US Customs data  
The reference period CVD rate will be 
the CVD rate (if any) applied to the 
company's shipment s as reported by 
the US Customs data. US Customs will 
also provide the factual CVD rate.  
If the company's reference period 
CVD rate changes over the reference 
period, each applicable CVD rate shall 
be weighted for that company by the 
number of months durin g which it was 
in effect, rounding up or down to a 
whole number of months (rounding 
up if the CVD rate was in effect for at 
least half of the month).  
 
824 Instructions for calculating counterfactual duty rates are contained in section 6.3, above.  
825 This category includes companies that were excluded f rom the scope of the CVD order.  
826 The chosen USDOC record need not relate to the segment of the USDOC proceeding that qualifies as 
the relevant triggering event.  WT/DS505/ARB  
 
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Type of factual CVD rate 
to which company is 
subject immediately 
following the triggering 
event  Value of Imports  Reference Period and Factual 
Duty Rates824 
Without US Customs data  
Canada will identify each company 
based on USDOC records, and may, at 
Canada's discretion:  
(1) Obtain import values for the 
reference period directly from the 
relevant companies; or  
 
(2) Obtain import values for the 
reference period from Statistics 
Canada (i.e. th e aggregate 
import values for the relevant 8-
digit categories for companies 
subject to factual non -selected 
rate).  
 
(3) If both options (1) and (2), 
immediately above, are 
unavailable, or if Canada 
considers it too burdensome to 
use such options to calculate t he 
value of imports for a company or 
group of companies, then the 
company 's/companies ' value of 
imports shall be assumed to be 
part of the value of imports 
subject to the all -others rate (see 
further below in this table).  Without US Customs data  
Reference period CVD rates and 
factual CVD rates shall normally be 
available from public USDOC records. 
If a company's reference period CVD 
rate changed over the reference 
period, each applicable CVD rate shall 
be weighted for that company by the 
number of months du ring which it was 
in effect, rounding up or down to a 
whole number of months (rounding 
up if the CVD rate was in effect for at 
least half of the month).  
Alternatively, for a reference period 
CVD rate, Canada may assign to any 
company or group of companies 
(even if such companies are subject 
to different factual non -selected CVD 
rates immediately following the 
triggering event) a simple average of 
the non -selected CVD rates in effect 
during the reference period.  
If: (a) the USDOC records do not 
contain the relevant reference period 
CVD rate(s) and/or factual CVD 
rate(s) of a company or group of 
companies; or (b) Canada considers it 
too burdensome to calculate the 
reference period and/or factual rates 
for a company or group of companies, 
then Canada may assum e that the 
company 's/companies ' value of 
imports is part of the value of imports 
assigned to the all -others rate (see 
below).  
Factual all-others rate With US Customs data  
Identify and determine the import 
values for this category of companies 
based on disaggregated US Customs 
data provided by the United States.  
In the data set received from US 
Customs, the values of imports of 
companies subject to the all -others 
rate will b e determined based on the 
total value of US imports from Canada 
(for all relevant HTS codes, or the 
CVD case number, whichever the case 
is) excluding the import values 
attributable to the individually 
investigated or reviewed companies, 
(where applicable) new shippers, 
and/or (where applicable) companies 
subject to factual non -selected rates. 
That total residual import value shall 
be attributed to companies subject to 
a factual all-others rate at the time of 
the triggering event.  With US Customs data  
The re ference period CVD rate will be 
the CVD rate (if any) applied to the 
company's shipments as reported by 
the US Customs data. US Customs will 
also provide the factual CVD rate.  WT/DS505/ARB  
 
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  Type of factual CVD rate 
to which company is 
subject immediately 
following the triggering 
event  Value of Imports  Reference Period and Factual 
Duty Rates824 
Without US Customs data  
Canada may, at its discretion:  
(1) Obtain import values for the 
reference period directly from the 
relevant companies827; or 
 
(2) Obtain import values for the 
reference period from Statistics 
Canada (i.e. the aggregate 
import values for the relevant 8-
digit categories, excluding values 
from companies for whic h Canada 
was able to calculate values of 
imports via other means); or  
 
(3) First, determine the total value of 
Canadian imports of the relevant 
product using all relevant HTS 
codes from the CVD order and 
USA Trade Online/USITC 
DataWeb, and then subtract from 
that total value the values of 
imports during the reference 
period calculated for companies 
for which Canada was able to 
calculate values of imports via 
other means.  
 
Insofar as Canada uses method (1), 
above, Canada must still use either 
method (2) or (3) t o identify any 
additional and remaining values of 
imports that should also be attributed 
to (potentially unknown) companies 
subject to a factual all -others rate.  Without US Customs data  
Reference period CVD rates and 
factual CVD rates for companies 
subject  to the all -others rate shall be 
obtained from public USDOC records.  
New Shippers  With US Customs data  
Canada shall request the following 
information from US Customs:  
a) information normally requested 
in an initial notification for the 
reference period, which will 
include shipments from the new 
shipper during the reference 
period;  
b) the value of imports for the new 
shipper during the most recent 
twelve whole calendar months  
immediately preceding the 
issuance of the final results of the 
new shipper review that 
comprises the triggering event; 
and 
c) the date of the new shipper's first 
shipment to the United  States of 
the relevant product.  
All the information shall be provided 
by the United  States under the same 
deadline as that specified in 
paragraph 8.106 , above . 
If the new shipper's first shipment 
was before the beginning of the 
reference period, or during the first 
month of the reference period, then With US Customs data  
The new shipper's reference period 
CVD rate shall be the factual 
all-others rate to which the new 
shipper was in fact subject during the 
time from which its value of imports 
is taken (whether the all-others rate 
is affected or unaffected by the 
OFA-AFA Measure). The new shipper 's 
factual CVD rate shall be the CVD rate 
assigned to the n ew shipper in the 
new shipper review.  
 
827 If Canada uses this option, see further below in this cell for additional instructions.   WT/DS505/ARB  
 
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Type of factual CVD rate 
to which company is 
subject immediately 
following the triggering 
event  Value of Imports  Reference Period and Factual 
Duty Rates824 
the US Customs data from the 
reference per iod shall be used to 
calculate the value of imports of the 
new shipper the same as for any other 
company.  
If the new shipper's first shipment 
was made at least one month after 
the beginning of the reference period, 
then the new shipper's value of 
imports shall be taken from the 
twelve -month period preceding the 
issuance of the final results in the new 
shipper review. If the date of the new 
shipper's first shipment to the United 
States occur red after the beginning of 
that twelve -month period, then 
Canada sh all annualize the new 
shipper's value of imports. Canada 
shall treat the value (or annualized 
value) of imports during the twelve -
month period preceding the issuance 
of the final results as the new 
shipper's value of imports during the 
reference period.  
Without US Customs data  
Canada may, at its discretion:  
(1) obtain, directly from the new 
shipper, the same information as 
requested from US Customs 
under (a), (b) and (c) (see cell 
immediately above) and use 
those values in the same manner 
as described in the cell 
immediately above; or  
 
(2) Canada may also use the new 
shipper's publicly ranged sales 
values from the new shipper 's PoI 
in the public  USDOC record . and 
use those values in the same 
manner as described in the cell 
immediately above.  
 
If both options (1) and (2), 
immediately above in this cell, are 
unavailable, i.e. the new shipper's 
value of imports cannot be 
ascertained, the new shipper review 
will not qualify as a triggering event 
and any previously calculated level of 
NI shall remain unchanged.  Without US Customs data  
The reference period CVD rate and 
factual CVD rate for the new shipper 
shall be determined in the same 
manner as  described in the cell 
immediately above.  
 WT/DS505/ARB  
 
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  Table 5: Deadlines for calculations of values of imports  
Event  Time allowed  
No deadline for Canada to send the initial notification to the US following a 
triggering event, but following initial notification by Canada, US Customs 
gathers data and sends data to Canada in the time that appears to the 
right.  
 45 calendar days  
After Canada receives US Customs data, time allotted to Canada to verify 
and inform United States if any al leged errors exist therein.  
 30 calendar days  
Time for consultations to conclude following Canada  notification to the 
United States of alleged errors in US Customs data.  
 Two weeks  
(14 calendar days)  
If US Customs data is not provided to Canada , then C anada  has no deadline 
for calculation of the value of imports. But once C anada  is done 
determining the value of imports, C anada  shall relay its determined values  
to the United States . The time allotted to  the United States  to comment on 
such data and consult with Canada regarding such data appears to the 
right.  
 Two weeks  
(14 calendar days)  
All deadlines listed above can be extended by mutual consent of the parties.  
 
  WT/DS505/ARB  
 
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8.1.4   Armington substitution elasticity (σ)  
8.277.   In Armington models, products are treated as imperfect substitutes. The elasticity of 
substitution is the parameter governing the degree of substitutability across varieties. We consider 
it helpful to note two things about substitution elasticities at the outset for background purposes. 
First, the higher the substitution elasticity, the more consumers consider products as substitutes . 
Second, in both parties' proposed methodologies, the level of NI increases as the elasticity of 
substitution becomes larger.  
8.278.   Canada  claims that the elasticity of substitution is a highly important input in the model, and 
can vary substantially across pro ducts.828 Canada initially submitted estimates of the substitution 
elasticity from a study by Caliendo and Parro (published in 2015).829 Using bilateral tariff rates, 
Caliendo and Parro estimate substitution elasticities for 20 ISIC Rev.3 "tradeable good sec tors".830 
Canada claims that 98.5% of Canadian imports that are generally subject to CVD investigations, 
i.e. other than those in HS chapters 98 and 99, are directly covered by Caliendo and Parro sector 
elasticities, which, in Canada's view, are reliable be cause they proved generally consistent with 
NAFTA outcomes.831 
8.279.   The United  States  disagrees with Canada's proposal to use Caliendo and Parro elasticity 
estimates in this context for four main reasons. First, the United  States asserts that the Caliendo 
and Pa rro study "uses tariffs and trade data from 1993", i.e. the data are outdated.832 Second, the 
United  States notes that the same study warned that in their model, "the elasticity of trade with 
respect to trade costs is the dispersion of productivity, and is not the elasticity of substitution as in 
Armington models".833 Third, the United  States contends that, "[l]ike the demand elasticities in the 
[Global Trade Analysis Project (GTAP)] database, these elasticities are not intended for use in 
product -specific, p artial equilibrium analysis".834 Fourth, the United  States notes that the Caliendo 
and Parro sectors are highly aggregated and thus could likely lead to inaccurate results if applied in 
a model relating only to specific products, as this model will likely d o.835 The United  States also notes 
that the arbitrator in US – Washing Machines (Article 22.6 – US) used more granular estimates for 
the elasticity of substitution from a different source (i.e.  Soderbery 2015, who estimates elasticities 
at the HS 8 - and 10 -digit levels), and "Canada does not explain its choice to rely on a different 
source".836 
8.280.   Canada  responds that its proposed elasticities "are objective and statistically derived by a 
third-party suitable for use in an Armington model", "have been peer -reviewed and have been 
subsequently used by a number of empirical trade studies", and "are widely re cognized as providing 
reliable, independent, and objective measures of substitution elasticities".837 Moreover, Canada 
asserts that the substitution elasticities from Caliendo and Parro were "particularly suitable for the 
 
828 Canada's methodology report, para. 22.  
829 Caliendo and Parro, "Estimates of the Trade and Welfare Effects of NAFTA", The Review of Economic 
Studies , Vol. 82, No. 1 (January 2015) , pp. 1 -44 (Caliendo and Parro) (Exhibit CAN -6). 
830 Canada's methodology report, para. 22 and fn 11 thereto. ISIC Rev.3 stands for Revision 3 of the 
International Standard Industrial Classification of All Economic Activities (ISIC).  
831 Canada's methodology report, paras. 22 -23. As a technical matter, it should be noted that Canada 
match es Caliendo and Parro elasticities to HS -6 sub -headings (HS 2007 classification), and then concords them 
to the HS 2017 classification. Then Canada computes a weighted average within each of the 98 HS chapters, 
with weights given by each HS 6 -digit product 's share in total Canadian imports of the United  States in 2019.  
832 United  States' written submission, para. 115.  
833 United  States' written submission, fn 125 to para. 115 (quoting Caliendo and Parro (Exhibit  CAN-6), 
p. 16).  
834 United  States' written submission, para. 115.  
835 United  States' written submission, para. 115. The United  States provides data that purportedly 
"demonstrates a wide divergence between the substitution elasticity selected by the arbitrators in 
US – Anti-Dumping Methodologies (Chin a) (Article 22.6 – US) and US – Washing Machines ( Article 22.6 – US), 
as well as the Commission's estimates in the Supercalendered Paper investigation,  and the substitution 
elasticities from Caliendo and Parro that Canada proposes to use". (United  States' written submission, 
para. 117, quoting Table 2 of Appendix 3).  
836 United  States' written submission, fn. 127 to para. 117. The  arbitrator in US – Washing Machines 
(Article  22.6 – US), when fashioning its prospective model with respect to the measure found t o be "as such" 
WTO-inconsistent, relied on elasticities of substitution estimated by A. Soderbery, "Estimating Import Supply 
and Demand Elasticities: Analysis and Implications", Journal of International Economics, 96(1), May 2015 at 
the HS chapter level (s ee Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 4.72).  
837 Canada's written submission, para. 146 (quoting D. Riker, "A Trade Cost Approach to Estimating the 
Elasticity of Substitution", USITC Economics Working Paper Series (2 020) (Exhibit CAN -31), fn 2).  WT/DS505/ARB  
 
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  task of calculating the level of nu llification or impairment based on the trade effects of a change in 
duties for Canadian imports into the United  States".838 This is because they are "derived from 
differences in trade costs", and therefore directly capture "the response to import demand res ulting 
from changes in tariff levels".839 Finally, Canada dismisses the United  States' criticism that Canada's 
proposed elasticities are derived from a Ricardian rather than an Armington model, claiming that 
"this is a distinction without a difference".840 
8.281.   The United  States, as an alternative  to using Caliendo and Parro elasticities,  initially 
suggested to "rely on the [USITC] report in the investigation of the specific future product as the 
source for the substitution elasticity".841 The United  States points  out that "[t]he Commission 
qualitatively estimates demand, substitution, and domestic supply elasticities for every product 
under a CVD (or AD) investigation in its investigation report", and that "the elasticity estimates 
should be the median of the rang e of the estimated elasticities determined by the Commission".842 
8.282.   Canada  argues that using substitution elasticities estimated by the USITC is inappropriate 
because "the USITC's methodologies are incapable of producing consistent and verifiable results".843 
8.283.   The Arbitrator notes that both parties' proposed sources for the substitution elasticity could 
be employed in principle, although both appear to display key weaknesses in this context.  
8.284.   The Arbitrator considers the main drawback of Caliendo and Parro substi tution elasticities as 
proposed by Canada to be that they are estimated based on highly aggregated sector -level trade 
data. More aggregated substitution elasticities are typically lower than product -level substitution 
elasticities.844 Because the estimated level of NI increases with the value for substitution elasticities, 
and because the products on which CVDs are placed would very likely not be at such a sectoral level, 
the use of Caliendo and Parro elasticities hence would  tend to underestimate the level of NI. The 
Arbitrator therefore rejects the use of Caliendo and Parro substitution elasticities.  
8.285.   Concerning the United  States' preferred approach of relying on substitution elasticities 
estimated by the USITC, the United  States explains that the USITC dete rmines a range of possible 
substitution elasticities specifically for a product under investigation using information gleaned from 
questionnaires, hearings, and from the expert judgment of USITC staff.845 The Arbitrator notes that 
the estimated substitution  elasticities generated by the USITC appear to be based on methods that 
are somewhat untransparent and non-replicable.  Also, g iven the prospective nature of this 
arbitration  proceeding , future  USITC determinations  are not and cannot be on the record before  the 
Arbitrator  yet, and thus the Arbitrator cannot evaluate them.846 The Arbitrator therefore rejects the 
use of USITC substitution elasticities.  
8.286.   In light of the above -described weaknesses associated with the Canadian and US proposals 
in this context, the Arbitrator considered an alternative data source, i.e. the publicly -available trade 
 
838 Canada's written submission, para. 147.  
839 Canada's written submission, para. 147.  
840 Canada's written submission, para. 148 (responding to claim made in the United  States' written 
submission, para. 115). More technically, Can ada restates Caliendo and Parro's claim that after mapping the 
dispersion of productivity to the elasticity of substitution and the technology parameter to the home bias 
parameter, "the gravity equation implied from the [Ricardian] model […] is identical t o the Armington model" 
(Caliendo and Parro  (Exhibit CAN -6), fn 20).  
841 United  States' written submission, para. 118.  
842 United  States' written submission, para. 104.  
843 Canada's comments on the United  States' response to Arbitrator question No. 198, para. 26.  
844 For example, substitution elasticities estimated by Fontagné, Guimbard and Orefice (2018) become 
smaller the more aggregate their underlying trade data is: the median substitution elasticity is 9.0 for 
HS 6-digit products, 7.2 for HS 4 -digit products, a nd 6.0 for GTAP sectors.  
845 United  States' response to Arbitrator question No. 57, paras. 155 -156. 
846 However, the Arbitrator considers that if this were the case, USITC estimates would likely be 
stronger candidates for use in an economic model. See, e.g. Decision by the Arbitrator, US – Anti Dumping 
Methodologies (China) (Article 22.6 – US), para. 7.36 (u sing pre -existing USITC elasticity estimates for a 
retrospective, rather than prospective, Armington model).  WT/DS505/ARB  
 
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elasticities calculated by Fontagné, Guimbard and Orefice (2021) (Exhibit CAN -139) ("FGO")847 at 
the relatively disaggregated level of HS sub -headings (6 -digit) . FGO estimates are based on a 
structural gravity model, which is based on sound economic theory.848 Thus, FGO calculations are 
widely recognized as a reliable method for estimating trade elasticities. The Arbitrator proposed to 
the parties that, for each H S 6-digit sub -heading, Canada would calculate the substitution elasticity 
𝜎 as 1−𝜀, where 𝜀 is the FGO trade elasticity. The Arbitrator further proposed to match substitution 
elasticities to the HTS  10-digit codes referenced in the product scope descrip tion in the relevant CVD 
order pertaining to the relevant product, to produce a CVD order -specific substitution elasticity to 
be used as model input.  
8.287.   Canada repeatedly indicated that the trade elasticities estimated by FGO at the 6 -digit level 
of the HS cl assification are "a suitable and reliable source for substitution elasticities".849 Canada 
further: (a) suggested to align FGO elasticities – which are in the HS 2007 classification – "to the 
current HS -6 categorization"; and (b) offered "alternative propos als on how to account for missing 
values and statistical outliers".850 
8.288.   In response to several questions asked by the Arbitrator to seek clarifications on the issue, 
the United  States revised its views regarding the appropriate data sources for the substitut ion 
elasticity. The United  States eventually proposed a three -tiered approach to determine the elasticity 
of substitution.851 According to the United  States, the first option would be to rely on USITC 
estimates. The second option would be, in the "unlikely event that future product -specific 
substitution elasticities are not available from the Commission report" to "instruct the parties to 
consult and use some future source, including considering updated academic literature".852 The third 
option, should the fi rst and second options be non -viable, would be to compute the CVD 
order -specific elasticity of substitution as the median value of the CVD order -specific elasticity of 
substitution calculated "from each of the three academic studies: Soderbery (2015), Ahma d and 
Riker (2019), and the most recent version of [FGO]".853 The United  States discusses in detail how 
to compute CVD order -specific elasticities of substitution from each of these three data sources, 
taking into account the possibility of missing values a nd statistical outliers. The United  States  
illustrates that, in the case of Softwood Lumber, the CVD order -specific substitution elasticity would 
be 2.24 if computed using Soderbery (2015), 3.82 if computed using Ahmad and Ricker (2019), and 
18.98 if compu ted using FGO; the median value is therefore the 3.82 estimate of Ahmad and Ricker 
(2019).854 Finally, the United  States indicates that, in the calculations of the elasticity of substitution, 
only the primary reference HTS 10 -digit codes referenced in the p roduct scope description in the 
relevant CVD order should be utilized, "to avoid an overinclusion of imports".855 
8.289.   In response to the United  States' revised proposals, Canada  reiterates its objection to the 
use of USITC elasticities856, rejects the United  States' proposed tiered approach as "untenable, 
 
847 L. Fontagné, H. Guimbard and G. Orefice (2021), "Tariff -Based Product -Level Trade Elasticities", 
available at https://drive.google.com/file/d/1vH jbSdGA4nh0Jy1HsKHG7RAnyLzTWL7_/view. The data are 
accessible via: https://sites.google.com/view/product -level-trade -elasticity . Canada has submitted six -digit 
FGO trade elasticities, concorded from the original HS 2007 classification to the HS 2017 classif ication ("FGO 
Dataset B" (Exhibit  CAN-139)). 
848 See generally World Trade Organization and United Nations Conference on Trade and Development, 
A Practical Guide to Trade Policy Analysis  (Published 2012) (Exhibit CAN -3); Head and Mayer, "Gravity 
Equations: W orkhorse, Toolkit, and Cookbook", in Gopinath et al., Handbook of International Economics , Vol. 4 
(2014)  (Exhibit CAN -5). 
849 Canada's response to Arbitrator question No. 246, para. 226. See also Canada's response to 
Arbitrator questions Nos. 50, 133, and 19 4. 
850 Canada's response to Arbitrator question No. 246, para. 226. 
851 United  States' response to Arbitrator question No. 198, paras. 35 -39. 
852 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV, para. 1.2.  
853 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV, para. 1.2. 
(fns omitted) See also  Anson Soderbery, "Estimating Import Supply and Demand Elasticities: Analysis and 
Implications ", Journal of International Economics, Vol. 96,  Issue 1, May 2015 (Exhibit  USA-24); and Saad 
Ahmad & David Riker, "A Method for Estimating the Elasticity of Substitution and Import Sensitivity by 
Industry ", USITC Office of Economics Working Paper Series (May 2019) ( "Ahmad and Riker (2019) " 
(Exhibit  USA-27). 
854 United  States' response to Arbitrator question No. 246, comments on Annex A, Table A at para. 233.  
855 United  States' response to Arbitrator question No. 246, comments on Annex A, para. 213 (referring 
to United  States' response to Arbitrator question  No. 178, para. 103; United  States' response to Arbitrator 
question No. 265, paras. 199 -200).  
856 Canada's comments on the United  States' response to the third set of Arbitrator questions, 
comments on Annex A, section II, para. 160.  WT/DS505/ARB  
 
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  impractical, and unnecessary"857, and provides detailed comments only on the United  States' 
proposed third option. According to Canada, Soderbery (2015) is an inappropriate and unreliable 
source for elasticities of substitution because Soderbery "does not utilize information on differences 
in tariffs and duties"858 and because "Soderbery's methodology results in a large percentage of 
HS categories where no estimate is possible, or results in infeasible outcomes."859 Canada further 
rejects the use of Ahmad and Riker (2019), because the results rely on "heroic assumptions 
regarding the nature of competition", and the United  States "has not attempted to determine 
whether the assumptions underlying Ahmad and Riker are ap propriate for the products to which the 
model may be applied, nor is there reason to believe it does."860 Moreover, according to Canada, 
neither Soderbery (2015) nor Ahmad and Riker (2019) "permit the determination of the statistical 
reliability of the resulting values".861 Therefore, according to Canada, "the Arbitrator should reject 
the U.S. proposal to use a median substitution elasticity value between [FGO], Soderbery (2015), 
and Ahmad and Riker (2019)."862 
8.290.   Having decided to  reject Canada's initial suggestion of relying on Caliendo and Parro 
elasticities as well as the United  States' preferred approach of re lying on USITC estimates, the 
Arbitrator identifies three further issues for discussion and decision. The first is which HTS 10 -digit 
codes appearing in a given CVD order to use in the calculations of the substitution elasticity. The 
second is whether to a ccept or to reject the United  States' tiered approach. Finally, we consider 
whether to accept or to reject the United  States' suggestion to rely on various data sources under 
the United  States' third option.  
8.291.   First, the Arbitrator considers whether, as the United  States suggests, to use only the 
"primary" HTS 10 -digit codes referenced in the product scope description in the relevant CVD order 
in the calculations for the elasticity of substitution. We recall tha t, in section 8.1.1.2.1.2 (a), above, 
the Arbitrator decided to include all HTS codes, rather than only the primary HTS codes, referenced 
in the produc t scope description in the relevant CVD order when ascertaining the values of imports. 
The same approach here is, in our view, the most reasonable to ensure as much consistency as 
possible as between the goods that are captured in the values -of-imports cal culations and the goods 
captured in the elasticity -of-substitution calculation. The Arbitrator, therefore, instructs Canada to 
include all HTS codes referenced in the product scope description in the relevant CVD order in the 
calculation of the CVD order -specific elasticity of substitution.  
8.292.   Second, the Arbitrator considers that the second option put forward by the United  States 
under its tiered approach (i.e. to rely on future, unspecified sources in case USITC substitution 
elasticities are unavailable) wou ld likely create future disagreements between the parties, a 
possibility acknowledged by the United  States itself.863 In this context, we note that even if the 
parties were to agree on a particular data source in the future, the technical implementation of that 
data source may be complex and subject to interpretation. T he Arbitrator therefore rejects this 
suggestion made by the United  States.  
8.293.   Third, the Arbitrator considers whether the third option put forward by the United  States 
under its tiered approach ( i.e. to rely on three different data sources to compute the elasticity of 
substitution)  is reasonable . We therefore note that c omputing a CVD order -specific elasticity of 
substitution from each of the three data sources identified by the United  States (FGO ; Soderbery 
(2015); and Ahmad and Riker (2019)) is likely to impose a significant burden on Canada, because 
 
857 Canada's comments on t he United  States' response to Arbitrator question No. 198, para. 25.  
858 Canada's comments on the United  States' response to the third set of Arbitrator questions, 
comments on Annex A , section II, para. 163.  
859 Canada's comments on the United  States' response to the third set of Arbitrator questions, 
comments on Annex A, section  II, para. 164.  
860 Canada's comments on the United  States' response to the third set of Arbitrator questions, 
comments on Annex A, section  II, para. 167.  
861 Canada's comments on the United  States' response to the third set of Arbitrator questions, 
comments on Annex A, section  II, para. 168.  
862 Canada's comments on the United  States' response to the third set of Arbitrator questions, 
comments o n Annex A, section II, para. 172.  
863 "If the parties cannot come to an agreement on an alternative, future source" (United  States' 
response to Arbitrator question No. 246, comments on Annex A, section IV, para. 1.2). See also Canada's 
comments on the United  States' response to Arbitrator question No. 198, para. 27.  WT/DS505/ARB  
 
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Canada would have to follow detailed instructions (in particular missing values and statistical 
outliers) that would be specific to each of the thre e data sources.864 
8.294.   Moreover, the Arbitrator considers that FGO offer reasonably accurate and reliable estimates 
for the substitution elasticities. As already noted, FGO estimates are widely considered to be reliable, 
and exist at the relatively disaggregate d HS 6 -digit level. Further, neither party has brought forward 
significant objections to the use of FGO estimates, and Canada expressly considers them to be 
reliable.865 We note that the United  States has shown that, in the specific case of the Softwood 
Lumber CVD order, the FGO substitution elasticity is approximately four times larger than the 
substitution elasticity of Ahmad and Riker (2019), which happens to be the median value among 
FGO, Soderbery (2015), and Ahmad and Riker (2019) in that particular ci rcumstance. However, we 
consider that the mere fact that certain substitution elasticity estimates may vary in some particular 
instances does not call into question the general reliability of FGO estimates. This is particularly so 
given that the United  States offers no demonstration that FGO estimates are somehow less reliable 
than the other two sources in the context of the Softwood Lumber example (or vis-à-vis any other 
potential product). Hence, the Arbitrator rejects the United  States' proposal to use a  median 
substitution elasticity value between FGO, Soderbery (2015), and Ahmad and Riker (2019), because 
it appears unnecessarily burdensome for Canada. At the same time, the Arbitrator concludes that 
Canada should source elasticities of substitution exclu sively from FGO.  
8.295.   Having decided that a CVD order -specific elasticity of substitution shall be calculated based 
on FGO's HS 6 -digit trade elasticities, the Arbitrator notes that the Arbitrator submitted a draft 
procedure for doing so to the parties in a que stion.866 The parties provided technical suggestions to 
adjust the proposed procedure, and in particular regarding how to account for missing values and 
statistical outliers. Thus, before providing detailed instructions on how to compute a CVD 
order -specifi c elasticity of substitution , the Arbitrator first discusses the parties' suggestions 
regarding how to adjust the Arbitrator's proposed procedure.  
8.296.   The Arbitrator proposed to replace FGO trade elasticities that have a missing value in the 
FGO dataset or tha t qualify as statistical outliers (trade elasticities exceeding the median plus two 
standard deviations across all HS 6 -digit trade elasticities in the FGO data set) with the median 
within the HS 4 -digit headings, or within the HS 2 -digit chapters in the e vent that a median cannot 
be calculated within the HS 4 -digit headings. The United  States  broadly agrees with these 
suggestions, with the following qualifications: (a) the same procedure should also be applied to trade 
elasticities that are "missing from t he dataset entirely, [or] statistically insignificant as defined by 
FGO"; (b) the two types of values noted in previous item (a) and outliers should be replaced with 
the median value within the HS 4 -digit heading calculated "over all statistically signific ant, 
non-outlier estimates"; and (c) to obtain elasticities within HS Chapter 45, the median should be 
calculated "over all statistically significant, non -outlier […] HS 6 -digit point estimates", because 
neither the median within the HS4 heading nor the me dian within this HS2 chapter would be 
available.867 
8.297.   Canada  offers the following alternative proposals. First, in Canada's view, for statistical 
outliers, the value should be set equal to the median value plus two standard deviations (rather than 
to the median value) across all HS 6 -digit codes in the FGO dataset,  as this would be "consistent 
with the principle that the HS -6 outliers are more likely to be more substitutable than the median 
HS-6 category".868 Second, Canada asserts that for elasticities that are missing (either because they 
are simply absent  in the F GO dataset or because they have "been assigned a substitute value in the 
Fontagné data"), Canada suggests that the "weighted average of other HS -6 elasticities within the 
HS-4 heading, weighted by Canadian imports to the U.S." should be used "rather than t he median 
 
864 The United  States provided proposed detailed instructions (United  States' response to Arbitrator 
question No. 246, comments on Annex A, section IV,  paras. 1.3 -1.5). Following these instructions,  however, 
would still be significantly more burdensome than computing the CVD order -specific substitution elasticity from 
a single data source.  
865 Canada's response to Arbitrator question No. 246, para. 226. See also Canada's response to 
Arbitrator question  Nos. 50, 133, and 194.  
866 Arbitrator question No. 246.  
867 United  States' response to Arbitrator question No. 246, comments on Annex A, section I, para. 1.2. 
As correctly noted by the United  States, the "FGO dataset […] includes a variable labelled 'zero' wh ich is equal 
to one if a point estimate is statistically insignificant." (United  States' response to Arbitrator question No. 246, 
comments on Annex A, section I, fn 142 to para.  1.2). 
868 Canada's response to Arbitrator question No. 246, para. 229.  WT/DS505/ARB  
 
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  value within the HS -4 heading".869 According to Canada, "[w]eighting by the value of Canadian 
imports to the U.S. will be more representative of Canadian imports than the use of the median 
value for the HS -4 heading."870 
8.298.   The Arbitrator notes that t he parties agree on the definition of outliers, i.e. as trade 
elasticities exceeding the median plus two standard deviations across all HS 6 -digit trade elasticities 
in the FGO data set . The Arbitrator thus adopts this definition, which appears reasonable,  to identify 
outliers. Regarding the treatment of outliers, the Arbitrator views Canada's suggestion to cap them 
at a given value (i.e. the overall median plus twice the overall standard deviation) as reasonable, 
because it recognizes that outlier values m ay well signal that the relevant HS 6 -digit codes have 
trade elasticities that are generally higher than the median among the HS 6 -digit codes . We note 
that the United  States has not provided material reasoning as to why its approach to replacing 
outliers (i.e. assigning aggregated median values, computed by excluding other outliers within the 
same HS  4-digit or HS 2 -digit categories), might be more logical or accurate. The Arbitrator, 
therefore, accepts Canada's proposal on how to treat outliers in the FGO  dataset.  
8.299.   Regarding the treatment of missing values, Canada justifies its proposal to use 
trade -weighted averages based on such averages being more representative than the median within 
the HS 4 -digit heading or within the HS 2 -digit chapter. The Arbitrato r notes that we initially 
proposed to the parties that missing values be assigned the median within the HS 4 -digit headings, 
or within the HS 2 -digit chapters in the event that a median cannot be calculated within the 
HS 4-digit headings. The Arbitrator di d so due to the fact that no party proposals had yet been made 
on that specific score. We therefore note that we discern no particular reason why trade -weighted 
averages, as Canada proposes, would be less reliable than medians in this context. Furthermore , 
the United  States has offered no material criticism of the Canadian approach, and has not provided 
material reasoning as to why its proposed approach of using the median within the HS 4 -digit 
heading, or the HS 2 -digit chapter, or the overall median for chapter 45, only over non -outlier values, 
might be more logical or accurate. We further discern no reason why the United  States' approach 
would be more logical or accurate.  The Arbitrator, therefore, rejects the United  States' proposals 
regarding the treatm ent of missing values in favour of Canada's, which we consider reasonable under 
the circumstances. The Arbitrator, therefore,  accepts Canada's proposal on how to treat missing 
values in and from the FGO dataset, with one qualification that will always allo w Canada to compute 
a substitution elasticity for each HS 6 -digit code, which is discussed in paragraph 8.300 , below . 
8.300.   The Arbitrator now provides detailed instructions for the calculation of a CVD order -specific 
substitution elasticity based on FGO's HS 6 -digit trade elasticities. To compute the CVD order -specific 
substitution elasticity , the Arbitrator instructs Canada to use the most recent version of FGO trade 
elasticities at the HS 6 -digit level.871 The Arbitrator notes that the current version of FGO tr ade 
elasticities at the HS 6 -digit level follows the HS 2007 classification, and that both parties recognize 
that it will be necessary to match the data to a more recent HS classification.872 When periodic 
revisions to the HS make it necessary to concord th e reference HTS codes in the CVD order to the 
6-digit FGO elasticities (the first 6 -digit HTS codes are identical  to the HS 6 -digit code), Canada shall 
use official correspondence tables from the United Nations.873 Canada shall calculate the substitution 
elasticity using the following linear transformation:  
𝜎=1−𝜀 
 
869 Canada's response to Arbitrator question No. 246, para. 230.  
870 Canada's response to Arbitrator question No. 246, para. 230. 
871 The current version of HS 6 -digit FGO trade elasticities, download ed from 
https://sites.google.com/view/product -level-trade -elasticity , is available to Canada as S TATA dataset 
"elasticity_for_publication_2019_11_28.dta", which is provided by Canada in Exhibit CAN -140. If a more recent 
version of such elasticities becomes  available but, for some reason such as a change in their format, is 
unusable, Canada will revert to "elasticity_for_publication_2019_11_28.dta".  
872 See United  States' response to Arbitrator question No. 246, comments on Annex A, section I, 
para. 1.2; Canad a's response to Arbitrator question No. 133, para. 78.  
873 Correspondence tables from the United Nations are currently available at: 
https://unstats.un.org/unsd/trade/classifications/correspondence -tables.asp . Canada submits the 
correspondence table between HS 2017 and HS 2007 
("HS2017toHS2007ConversionAndCorrelationTables.xlsx") in Exhibit CAN -140. The resulting dataset, with FGO 
trade elasticities concorded to the HS 2017 classification, is in Exhibit CAN -139. In the future, the reference 
HTS codes in the CVD order will correspond to the HS Nomenclature 2022 Edition. Canada will then match the 
original FGO data to the HS 2022 classific ation, using the appropriate correspondence table that will be 
published by the United Nations. Further revisions to HS will require a similar procedure.  WT/DS505/ARB  
 
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where 𝜀 is the point estimate of the FGO trade elasticity.874 Canada shall then assign to statistical 
outliers, defined as values of 𝜎 exceeding the overall median plus two standard deviations across all 
observations, the value corresponding to the median plus two standard deviations across all 
observations in the FGO dataset.875 Next, if the substitution elasticity 𝜎 is missing from the dataset 
entirely, or is statistically non -significant as defined by FGO876, Canada shall compute it as the 
trade -weighted average of the HS -6 digit elasticity estimates within the HS  4-digit heading to which 
the HS 6 -digit sub -heading belongs. If, for some reason, this is also missing or cannot be computed, 
the trade -weighted average within the HS 2 -digit chapter to which the HS 6 -digit sub -heading 
belongs shall be used. If, for some reason, this is also missing or cannot be computed, Canada shall 
use the overall median across all observations in the FGO dataset.877 Trade weights used for the 
trade -weighted averages should be reference -year US imports from Canada at the level of HS 6 -digit 
sub-headings, sourced from USA Trade Online or, if these data are not available, from 
USITC  DataWeb. Canada shall then assign the same substitution elasticity 𝜎 to all HTS 10 -digit codes 
in a CVD order with identical first six digits.  
8.301.   Once each HTS 10 -digit code in a CVD order is assigned a substitution elasticity, in case all 
HTS 10 -digit codes in a CVD order have the same substitution elasticity, this common substitution 
elasticity will also be the CVD order -specific substitution elasticity.878 In cas e two or more 
HTS 10-digit codes are assigned different substitution elasticities, the CVD order -specific substitution 
elasticity shall be computed as a weighted average of each HTS 10 -digit level's substitution elasticity, 
using, as weights, HTS 10 -digit US imports from Canada sourced from USA Trade Online or, if these 
data are not available, from USITC DataWeb for the reference year, according to the following 
formula:  
𝜎=∑𝜎𝑗𝑀𝑗
∑𝑀𝑗 𝑗𝑗 
where 𝜎𝑗 is the elasticity of substitution for HTS 10 -digit code j (common to all 10 -digit codes within 
each HS 6 -digit sub -heading), 𝑀𝑗 is the corresponding import value (US imports from Canada) and 
∑𝑀𝑗 𝑗 is the total of all US imports from Canada subject to a CVD order.879 
8.1.5   Price elasticity of demand (ε)  
8.302.   The price el asticity of demand is a measure  of the sensitivity of consumers with respect to 
price changes. For ordinary goods, its values are negative. This means that demand for these goods 
reduces when their prices increase. For instance, a demand elasticity of 𝜀=−0.5 can be interpreted 
as follows: if the price of a given product increases by 1%, demand for this product decreases by 
0.5%. It may be noted that, assuming the price elasticity of demand is a negative value, the level 
of NI decreases as the value of the demand elasticity approaches zero in both parties' methodologies, 
as well as in the methodology adopted by the Arbitrator. This reflects the fact that, when demand 
reacts insensitively to price changes, even large tariff rate increases would lead to small changes in 
the quantities traded.  
 
874 This point estimate corresponds to the variable labelled "epsilon_pt" in 
"elasticity_for_publication _2019_11_28.dta", submitted by Canada in Exhibit CAN -140. 
875 In the current FGO dataset ("elasticity_for_publication_2019_11_28.dta", provided by Canada in 
Exhibit  CAN-140), the threshold for outliers, equal to the median plus two standard deviations across  all 
observations, is equal to 23.97.  
876 The current FGO dataset includes a variable labelled "zero" which is equal to one if a point  estimate 
is statistically insignificant.  
877 This ensures that Canada will always be able to compute a substitution elasticit y for each HS 6 -digit 
code, and therefore for each HTS 10 -digit code in a CVD order.  
878 As noted in the final sentence in the paragraph above, all HTS 10 -digit codes with the same first six 
digits will necessarily be assigned the same substitution elasticit y. 
879 The Arbitrator notes that Canada finds this trade -weighted averaging procedure appropriate 
(Canada's response to Arbitrator question No. 246, para. 231), and the United  States does not object to it 
(United  States' response to Arbitrator question No. 246, comments on Annex A, section I, para. 1.2).  WT/DS505/ARB  
 
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  8.303.   Canada  proposes to source demand elasticities from version 11 of the GTAP.880 Canada 
provides a table of such GTAP demand elasticities for 65 industry sectors.881 Canada matches the 
65 GTAP demand elasticities to products at  the HS 6 -digit level, and computes a weighted average 
within each of the 98 HS chapters, or alternatively within the 20  Caliendo and Parro sectors, with 
weights given by each HS 6 -digit product's share in total Canadian imports of the United  States in 
2019. 
8.304.   The United  States  disagrees with Canada's approach of using GTAP demand elasticities, 
arguing that they "are not developed for use in product -specific, partial equilibrium analysis".882 The 
United  States contends further that: (a) "the demand elasticities in the GTAP 11 dat abase are 
estimated on very broad sectors […]. Such an aggregation assumes that the demand elasticity for 
many types of products [is] identical"883; (b) there is a very wide variation in the number of 6 -digit 
HTS categories within each of these GTAP sectors884; (c) some products subject to CVD or AD orders 
may fall in multiple GTAP sectors, and Canada fails to explain which elasticity will be used in the 
event of such a scenario885; and (d) Canada's approach of collapsing GTAP elasticities into the 
20 tradeabl e sectors of Caliendo and Parro "further aggregates many different products that may 
have different elasticity estimates".886 Moreover, the United  States further argues that GTAP 
elasticities would be inappropriate because they "are only consumer demand ela sticities", rather 
than "elasticit[ies] of total industry demand (that is, the demand response of all buyers – consumers, 
government, and firms – of the product as final or intermediate good)"887, and GTAP elasticities "are 
not representative of contemporan eous market conditions".888 The United  States proposes instead 
to use "the demand elasticity estimate reported by the [USITC] that concerns the specific product 
at issue".889 The United  States argues that "[p]redictability will be assured by definitively 
determining the source of the data input, while also ensuring better accuracy and precision".890 
8.305.   Canada  responds that it is preferable to source demand elasticity data from the most 
updated GTAP database, which is "based on analysis of the U.S. economy and acc ount for the use 
of products as intermediate goods in production activities".891 Canada asserts that "GTAP demand 
elasticities are widely used by the United  States, Canada, the WTO, and other national and 
international entities for the purposes of modelling trade effects", and that the arbitrator in 
US – Washing Machines (Article 22.6 – US) used GTAP data "for modelling counterfactual trade 
outcomes".892 Canada  dismisses the United  States' argument that GTAP demand elasticities are 
developed for general equilibrium analyses, rather than for partial equilibrium analyses, by noting 
that the demand elasticity in a given sector is the same independently of whether t hat sector is 
analysed in isolation (as in partial equilibrium analyses) or jointly with other sectors (as in general 
equilibrium analyses).893 Finally, Canada dismisses the United  States' argument that Canada's 
elasticities are too uniform, "with '85  perce nt of all products being price inelastic'"894, arguing that 
Canada's elasticities "are in fact similar to those presented by the United  States in its comparison of 
 
880 Canada's methodology report, para. 25.  
881 Canada's methodology report, Table A4. Only 45 sectors out of 65 are "tradeable" 
(see United  States' written submission,  para. 110).  
882 United  States' written submission, para. 109.  
883 United  States' written submission, para. 108. See also the United  States' written submission , 
para. 110 (arguing that "[t]he problem with the GTAP parameter estimates is evident upon review" of  Table A4 
of Canada's methodology report).  
884 United  States' written submission, para. 108.  
885 United  States' written submission, para. 108.  
886 United  States' written submission, para. 111. According to the United  States, "17 of the 20 sector 
demand elasticit ies have a modestly inelastic demand elasticity of either -0.90 or -0.91" (United  States' written 
submission, para. 111). Moreover, according to the United  States, the share of sectors with "inelastic" demand 
(i.e. with demand elasticities that are less th an one in absolute value) is equal to 85% (17 in 20), while it is 
equal to 47% (21 in 45) in the original GTAP data (United  States' written submission, para. 111).  
887 United  States' response to Arbitrator question No. 62, para. 164.  
888 United  States' respons e to Arbitrator question No. 62, para. 168.  
889 United  States' written submission, para. 113.  
890 United  States' written submission, para. 113. (emphasis omitted)  
891 Canada's written submission, para. 149.  
892 Canada's written submission, para. 149 (quoting Decis ion by the Arbitrator, US – Washing Machines 
(Article 22.6 – US), para. 4.80).  
893 Canada's response to Arbitrator question No. 60, para. 129 (quoting Global Trade Analysis Project, 
"GTAP Resources: Frequently Asked Question Details", accessed March 8, 2021,  
https://www.gtap.agecon.purdue.edu/resources/faqs/faqs_display.asp?F_ID=151  (Exhibit CAN -88)). 
894 Canada's written submission, para. 150 (quoting United  States' written submission, para. 111).  WT/DS505/ARB  
 
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elasticity estimates".895 Canada further addresses the issue of several sectors having inelastic 
demand, arguing that "in Appendix 3 of the United  States' submission, […] more than 75% of the 
products (21  products out of 27) that the United  States examines have even more inelastic  demand 
according to its USITC estimates than those proposed by Canada".896 According to Canada, "using 
the demand elasticities from GTAP would generally understate the magnitude of NI relative to using 
the United  States' proposed source".897 
8.306.   As in the case of the substitution elasticity, the United  States  revised its views regarding the 
appropriate data sources for the price elasticity of demand, and eventually proposed a three -tiered 
approach.898 It might be recalled that, according to the United  States, the  first option would be to 
rely on USITC estimates. The second option would be, in the "unlikely event that future 
product -specific substitution elasticities are not available from the Commission report" to "instruct 
the parties to consult and use some futu re source, including considering updated academic 
literature."899 The third option for the demand elasticity, should the first and second options be 
non-viable, would be to compute the CVD order -specific demand elasticity using "the most recently 
available GTAP consumer final demand elasticities."900 
8.307.   In response to the United  States' revised proposals, Canada  reiterates its objection to the 
use of USITC elasticities901, and it rejects the United  States' proposed tiered approach as "untenable, 
impractical, and unnecessary."902 With respect to GTAP demand elasticities, Canada does not object 
"to the use of updated versions [relative to GTAP 11], if available and us able in the context of the 
model."903 
8.308.   The Arbitrator notes that, concerning the United  States' preferr ed approach of relying on 
demand elasticities estimated by the USITC, the United  States explains that the USITC determines 
a range of possible demand elasticities specifically for a product under investigation using 
information gleaned from questionnaires,  hearings, briefs from the interested parties, and estimates 
from the literature.904 Consistent with the Arbitrator's observations concerning USITC substitution 
elasticities905, the Arbitrator observes that the  estimated demand elasticities generated by the USITC 
appear to be based on methods that are untransparent and non -replicable.  Also, given the 
prospective nature of this arbitration proceeding, future  USITC determinations  are not and cannot 
be on the record before the Arbitrator  yet, and thus  the Arbitr ator cannot evaluate them.906 The 
Arbitrator therefore rejects the use of USITC demand elasticities.  
8.309.   The Arbitrator also rejects the second option put forward by the United  States under its 
tiered approach (i.e. to rely on future, unspecified sources in cas e USITC demand elasticities are 
unavailable), as it would likely result in future disagreements between the parties. In this context, 
we note that even if the parties were to agree on a particular data source in the future, the technical 
implementation of that data source may be complex and subject to interpretation.  
8.310.   Having decided to reject the first and second tiers (respectively, using UISTC demand 
elasticities, or relying on future, unspecified sources in case USITC demand elasticities are 
unavailable),  and noting that no other possible data sources have been proposed by the parties 
(even when explicitly asked by the Arbitrator) or appear readily available, the only viable option in 
front of the Arbitrator is to rely on GTAP demand elasticities.  
 
895 Canada's written submission, para. 150 (referring to United  States' written submission, para.  111).  
896 Canada's response to Arbitrator question No. 60, para. 130 (referring to the United  States' written 
submission, Appendix 3).  
897 Canada's response to Arbit rator question No. 60, para. 131. 
898 United  States' response to Arbitrator question No. 198, paras. 35 -40. 
899 United  States' response to Arbitrator question No. 246, comments on Annex A, section IV, para. 1.2.  
900 United  States' response to Arbitrator question  No. 198, para. 40.  
901 Canada's comments on the United  States' responses to comments on Annex A, section II, para. 160.  
902 Canada's comments on the United  States' response to Arbitrator question No. 198, para. 25.  
903 Canada's comments on the United  States' responses to comments on Annex A, section II, para. 173.  
904 United  States' response to Arbitrator question No. 61, para. 161.  
905 See para . 8.285 , above.  
906 However, t he Arbitrator considers that if this were the case, USITC estimates would likely be 
stronger candidates for use in an economic model . See, e.g. Decision by the Arbitrator, US – Anti Dumping 
Methodologies (China) (Article 22.6 – US), para. 7.36 (using pre -existing USITC elasticity estimates for a 
retrospective, rather than prospective, Armington model).  WT/DS505/ARB  
 
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  8.311.   The Arbi trator notes that multiple US arguments raised against using GTAP data in this 
context concentrate on the notion that GTAP demand elasticities are calculated at a relatively high 
level of aggregation. The Arbitrator notes, however , that the United  States does not provide  
theoretical or empirical evidence  that the estimation of demand elasticities depends on the level of 
sectoral aggregation , neither in general nor with respect to  GTAP elasticities specific ally. Therefore, 
it appears unclear that calculating the level of NI on the basis of relatively aggregated GTAP demand 
elasticities would yield systematically inaccurate or biased results. Moreover, there readily appears 
no source of alternate, more granular, and useable demand elasticities on this record. These 
observations, in our view, significantly dilute the United  States' arguments addressing the level of 
aggregation of GTAP elasticities in a model geared to address more narrowly defined products.  
8.312.   We also  note that the United  States is correct that GTAP demand elasticities are derived 
from figures associated with final consumer demand, instead of relating to total industry demand. 
The United  States, however, does not substantiate its apparent and implicit assumption that demand 
for intermediate goods is systematically differently shaped than demand for final goods.  
8.313.   The Arbitrator further considers that the United  States' argument that GTAP demand 
elasticities are developed for general equilibrium analysis, as opposed to partial equilibrium analysis, 
is insufficiently supported. This is so because the United  States does not substantiate its apparent 
and implicit assumption that GTAP demand elasticities are only reasonably functional in a general 
equilibrium m odel (such as GTAP) and not in a partial equilibrium model (such as the 
Armington  model).907 
8.314.   The Arbitrator finally recognizes that the US argument that GTAP elasticities are not 
representative of contemporaneous market conditions might carry a certain weig ht, since GTAP 
estimates are, by construction, based on historical data (at times several years old).908 However, 
the only alternative data source that might, in principle, better represent "contemporaneous" market 
conditions are USITC reports, which the Ar bitrator has decided not to rely upon for reasons specified 
in above  in this section .  
8.315.   The Arbitrator submitted a draft procedure for estimating CVD order -specific demand 
elasticities based on GTAP data to the parties in a question.909 This procedure,  which we adopt here,  
is virtually unaffected by the parties' comments thereon910, and is as follows. Canada shall assign 
the most recent GTAP demand elasticities available911 to HS 6 -digit level product codes, and then 
assign the HS  6-digit demand elasticity to each of the HTS 10 -digit codes listed in the respective 
CVD order belonging to the respective HS 6 -digit product category.912 In the event that an 
HTS 10-digit code referenced in a relevant CVD order cannot be concorded with a GTAP sect or, 
Canada shall calculate the simple average of all GTAP demand elasticities and assign this value to 
that HTS 10 -digit code. Once each HTS  10-digit code in a CVD order is assigned a demand elasticity , 
in case all HTS 10 -digit codes in a CVD order have the same demand elasticity, this common demand 
elasticity will also be the CVD order -specific demand elasticity.913 In case two or more HTS 10 -digit 
codes have different demand elasticities, the CVD order -specific demand elasticity shall be computed 
 
907 We further note that the United  States has not specifically contested Canada's statement that the 
"demarcation between demand elasticities in 'large, multi -sector general equilibrium models' […] a nd those in 
'in product -specific, partial equilibrium analysis' […] is a distinction without a difference." (Canada's response 
to Arbitrator question No. 60, para. 129, quoting the United  States' written submission, para. 109).  
908 United  States' response to  Arbitrator question No. 61, paras. 161 -162. 
909 Arbitrator question No. 246.  
910 The United  States argues that only "primary " HTS codes should be used. The Arbitrator dismisses 
this suggestion for the reasons explained in  sections 8.1.1.2.1.2 (a) and 8.1.4, above.  
911 If the most recent version of such elasticities is u navailable, or, for some reason, due to a change in 
their format, the GTAP demand elasticities become unusable, Canada could revert to the most recently 
available version of these elasticities in a useable format. We note that the current GTAP demand elast icities 
are on the record in Source Data 2 (Exhibit CAN -8), and thus a useable format of these elasticities would 
always be available to Canada via the record of this proceeding.  
912 The assignment of GTAP demand elasticities to HS 6 -digit sub -headings shall  be done using the 
correspondence in sheet "HS2017 to GTAP11" of Exhibit CAN -8. If future GTAP or HS classifications will be 
used, the assignment shall be done using correspondence tables from the World Bank or GTAP, presently 
available at the following UR Ls, respectively: https://wits.worldbank.org/product_concordance.html, and 
https://www.gtap.agecon.purdue.edu/databases/contribute/concord.asp.  
913 It might also occur that one HTS 10 -digit code will correspond to more than one HS 6 -digit 
sub-heading. In thi s case, Canada shall assign the median across the corresponding HS 6 -digit elasticities to 
the HTS 10 -digit code.  WT/DS505/ARB  
 
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as a weighted average of each HTS 10 -digit code's demand elasticity using, as weights, HTS 10 -digit 
US imports from Canada sourced from USA Trade Online or, if these data are not available, from 
USITC DataWeb for the reference year, according to the followin g formula:  
𝜀=∑𝜀𝑗𝑀𝑗
∑𝑀𝑗 𝑗𝑗, 
where 𝜀𝑗 is the elasticity of demand for a HTS 10 -digit product j, 𝑀𝑗 is the corresponding import value 
(US imports from Canada) in HTS 10 -digit code j and ∑𝑀𝑗𝐽
𝑗 is the total of all imports subject to a 
CVD order.  
8.1.6   Price elasticity of supply (η)  
8.316.   The price elasticity of supply is a measure of the sensitivity of producers with respect to price 
changes. Its values are typically positive. For instance, a supply elasticity of 𝜂=5 can be interpreted 
as follows: a 1% price in crease accompanies an increase in supply of 5%. It may be noted that, 
assuming the price elasticity of supply is a positive value, the level of NI increases with the price 
elasticity of supply under the selected model.  
8.317.   Canada  asserts that "there is limited  information on import supply elasticities".914 Canada 
proposes to use an import supply elasticity of 10, justifying this choice based on the 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US) arbitrator's selection of 10 for the 
import supply elas ticity in its own Armington model  and on a study by Hallren and Riker.915 Canada 
proposes to apply the same elasticity of supply for domestic shipments, which Canada asserts was 
also done in the US – Washing Machines (Article 22.6 – US) arbitration decision .916 
8.318.   The United  States  agrees with Canada on a value of 10 for the import  supply elasticity917, 
but draws a distinction between this elasticity and the domestic  supply elasticity. The United  States 
argues that "[d]omestic supply elasticities are typically assumed to be lower than import supply 
elasticities to account for the greater ability of foreign suppliers to shift supply from other 
markets".918 The United  States claims that the arbitrator in US – Anti-Dumping Methodologies 
(China) (Article 22 .6 – US) applied an identical approach, agreeing that "import supply elasticities 
are generally more elastic than domestic supply elasticities".919 The United  States also refers to 
multiple studies in support of its argument that import and domestic supply elasticities should be 
different.920 The United  States builds its case for using domestic supply elasticities that are lower 
than import supply elasticities based on four studies: (a) a study from November 2020 by an USITC 
economist, arguing that import sup ply elasticities generally exceed domestic supply elasticities921; 
(b) a study from March 2020 by a group of USITC economists, arguing that "[t]ypically, both subject 
and non -subject import sources have higher price elasticities of supply than the domestic source"922; 
 
914 Canada's methodology report, para. 27.  
915 Canada's methodology report, para. 27 (referring to Decision by the Arbitrator, US – Anti-Dumping 
Methodologies (China) (Article 22.6 – US), para.  7.37;  Hallren and Riker, "An Introduction to Partial 
Equilibrium Modeling of Trade Policy", USITC Office of Economics Working Paper Series (July 2017)  
(Exhibit  CAN-4)). 
916 Canada's response to Arbitrator question No. 6 3, para. 134. 
917 United  States' written submission, para. 120  (referring to Decision by the Arbitrator, 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para.  7.37) . 
918 United  States' written submission, para. 121.  
919 United States' response to Arbitrator question No. 64, para. 177 (quoting Decision by the Arbitrator, 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para.  7.37). 
920 United  States' response to Arbitrator question No. 64, paras. 176 -177 (referring to Exhibit CAN -4; 
Erika Bethmann et al., "A Non -technical Guide to the PE Modeling Portal ", USITC Office of Economics Working 
Paper Series (March 2020) ( "Bethmann et al.  (2020) ") (Exhibit USA -22); David Riker, "Approximating an 
Industry -Specifi c Global Economic Model of Trade Policy", USITC Office of Economics Working Paper Series, 
November 2020 ("Riker (November 2020)") (Exhibit USA -31); Jennifer Leith et al., "Indonesia Rice Tariff", 
Poverty and Social Impact Analysis, March 2003 ("Leith et al . (2003)") (Exhibit  USA-32); Michael Gasiorek et 
al., "Which manufacturing industries and sectors are most vulnerable to Brexit?", The World Economy (2019) 
("Gasiorek et al. (2019)") (Exhibit USA -33)). 
921 Riker (November 2020) (Exhibit USA -31). See also Uni ted States' response to Arbitrator question 
No. 64, para. 176.  
922 Bethmann et al. (2020)  (Exhibit USA -22), p. 5. See also United  States' response to Arbitrator 
question No. 64, para 177.  WT/DS505/ARB  
 
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  (c) a PSIA923 report where it is assumed that the domestic supply elasticity (0.3) is more than thirty 
times smaller than the import supply elasticity (10)924; and (d) a published paper using a value for 
the domestic supply elasticity (6) less tha n half the value of the import supply elasticity (15).925 The 
United  States, therefore, argues that Canada's proposal to use 10 (i.e. the same value as the foreign 
supply elasticity) for the US domestic supply elasticity lacks evidentiary support, and sugge sts using 
"the domestic supply elasticity estimate reported by the [USITC] in its investigation of the specified 
future product".926 
8.319.   Canada  responds that "separating domestic supply and imports from the rest of the world is 
of secondary significance" in cal culating the NI because "the focus is on imports from Canada".927 
Moreover, according to Canada, "the U.S. stated assumption has not been adopted by prior 
arbitrators facing similar circumstances to the present case", noting that the arbitrator in 
US – Wash ing Machines (Article 22.6 – US) used the same supply elasticity for both domestic sources 
and imports from the RoW.928 Canada does not, however, provide evidence directly supporting the 
proposition that domestic and imported supply are equally shaped, although Canada notes that its 
approach has the advantage of being simpler than the United  States' approach.929 
8.320.   As Canada has done in the case of discussing other elasticities, Canada rejects the 
United  States' proposal to use USITC estimates in this context. In Canada's view, "the United  States' 
suggestion of using [domestic] supply elasticity estimates from presen tly unverifiable USITC reports 
[is] untenable."930 When asked to provide appropriate values of the domestic and foreign elasticity 
of supply should the Arbitrator decide "to set the value of the domestic supply elasticity lower than 
the value of the foreign  supply elasticity"931, Canada initially did so in the context of Canada's 
proposed two -variety model (see section 7.1, above ), which distinguishes bet ween Canadian and 
non-Canadian supply, rather than between US and non -US supply. In that context, Canada proposed 
the values of 15 for the elasticity of Canadian supply, and of 7.7 for the elasticity of non -Canadian 
supply.932 To justify the choice of 15 fo r the elasticity of Canadian supply, Canada relies on Gasiorek  
et al. (2019) (Exhibit USA -33), who use this value.933 To justify the choice of 7.7 for the elasticity of 
non-Canadian supply, Canada noted that this value – which is the value of the supply ela sticity 
covering both domestic supply and imports in US – Washing Machines (Article 22.6 – US) – "should 
reflect a blend of supply elasticities from all non -Canadian sources, both U.S. domestic supply and 
the rest -of-world imports."934 According to Canada, this implies that it should be "higher than an 
elasticity for a purely domestic source of supply", which, in Gasiorek  et al. (2019) (Exhibit USA -33), 
was estimated to be 6.935 
8.321.   The Arbitrator further asked the parties to suggest pre -determined supply elastic ities to be 
implemented under the four -varieties model framework proposed by the Arbitrator. Canada replied, 
with reference to Gasiorek et al. (2019) (Exhibit USA -33), that the most reasonable options would 
be to adopt a value of 6 for the US domestic supply elasticity and a value of 15 for the import supply 
elasticity.936 Canada, however, considers "using 10 for import (i.e. non -US) supply elasticity would 
 
923 Poverty and Social Impact Analysis (PSIA), a multilateral economic p olicy evaluation programme in 
the early 2000s.  
924 Leith et al. (2003) (Exhibit USA -32). See also United  States' response to Arbitrator question No. 64, 
para 177.  
925 Gasiorek et al. (2019) (Exhibit USA -33). See also United  States' response to Arbitrator quest ion 
No. 64, para 177.  
926 United  States' written submission, para. 122. See also Appendix Table 1 of the United  States' written 
submission.  
927 Canada's written submission, para. 152.  
928 Canada's written submission, para. 152  (referring to Decision by the Arbit rator, US – Washing 
Machines (Article 22.6 – US), para. 4.78) . 
929 Canada's written submission, para. 152.  
930 Canada's response to Arbitrator question No. 63, para. 134  (referring to Canada's written 
submission, paras. 108 and 141 -142). 
931 Arbitrator question No. 139.  
932 Canada's response to Arbitrator question No. 139, para. 89.  
933 Canada's response to Arbitrator question No. 139, para. 88 (referring to Michael Gasiorek et al., 
"Which manufacturing industries and sectors are most vulnerable to Brexit? ", The World Economy (2019) 
("Gasiorek et al. (2019) ") (Exhibit USA -33), p. 29).  
934 Canada's response to Arbitrator question No. 139, para. 89.  
935 Canada's response to Arbitrator question No. 139, para. 89.  
936 Canada's response to Arbitrator question No. 280, para. 8.  WT/DS505/ARB  
 
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not be unreasonable" either.937 The United  States maintained its position to rely on USITC  report 
estimates for the domestic supply elasticity and to employ a value of 10 for the import supply 
elasticity.938 
8.322.   The Arbitrator notes that, before determining values or data sources for the supply elasticity, 
the Arbitrator must first determine whether  a single supply elasticity should be used for all sources 
of supply of the relevant product or whether different supply elasticities should govern different 
sources of supply. We thus note that the arguments made by the United  States in favour of lower 
supply elasticities for domestic than for imported supply are supported by empirical studies and 
appear consistent with conventional economic thinking. Moreover, Canada itself recognizes that "the 
elasticity of supply for imports is sometimes treated as high er than for domestic sources".939 
Therefore, the Arbitrator considers that it  is most reasonable to have import supply and US domestic 
supply subject to different price elasticities, and in particular using a US domestic supply elasticity 
that is lower than  the foreign supply elasticity.  
8.323.   That being the case, we recall that Canada has suggested that different price elasticities 
could be assigned to Canadian imports and to other sources of supply (i.e. US domestic supply and 
RoW imports). This Canadian proposa l, however, appeared tailored to apply specifically to Canada's 
formula derived by Canada's proposed two -variety model (see section 7.1, above ), which  is 
structured around a Canadian variety and a non -Canadian variety. In the framework of the selected 
four-varieties model, however, we discern no particular reason to treat imports from Canada 
differently than RoW imports, and Canada provides none. The Ar bitrator, therefore, considers that 
this Canadian proposal should not be implemented in the context of the selected model. Rather, and 
as consistent with the discussion in the preceding paragraph, the Arbitrator considers that it is most 
reasonable to assi gn different values to the US domestic supply elasticity and to the foreign 
(i.e. non-US) supply elasticity.  
8.324.   The question therefore becomes what values to assign to domestic and import supply 
elasticities. The Arbitrator notes  that both parties have sugges ted the use of a pre -determined value 
for the import supply elasticity. We see no reason to deviate from this shared suggestion. The 
Arbitrator also notes that the only alternative to pre -determine a value also for the domestic supply 
elasticity would be t o rely on information from USITC reports, which is the United  States' preferred 
approach. The United  States explains that the USITC determines a range of possible supply 
elasticities specifically for a product under investigation using information gleaned from 
questionnaires, hearings, briefs from the interested parties, and estimates from the literature.940 
Consistent with the Arbitrator's observations concerning USITC substitution elasticities and demand 
elasticities941, the Arbitrator observes that the  estimated supply elasticities generated by the USITC 
appear to be based on methods that are untransparent and non -replicable. Also, given the 
prospective nature of this arbitration proceeding, future  USITC determinations  are not  and cannot 
be on the record before the Arbitrator  yet, and thus the Arbitrator cannot evaluate them.942 The 
Arbitrator therefore rejects the use of USITC suppl y elasticities and decides to pre -determine values 
for both the import supply elasticity and the domestic supply elasticity.  
8.325.   With respect to the domestic supply elasticity, the Arbitrator notes that the United  States 
failed to provide a proposal for a pre -determined value even when explicitly asked by the Arbitrator. 
The Arbitrator recalls, however, that Canada proposed a value of 6 for the domestic supply elasticity. 
The Arbitrator discerns nothing unreasonable about this value, which is taken from the emp irical 
study by Gasiorek  et al. (2019) (Exhibit USA -33), which we note is found in an exhibit initially 
submitted by the United  States. Therefore, the Arbitrator decides to adopt Canada's proposed value 
of 6 for the domestic supply elasticity.  
8.326.   With respect  to the import supply elasticity, the Arbitrator notes that neither Canada's 
suggestion of 15, nor the United  States' suggestion of 10 appear unreasonable, and that neither 
 
937 Canada's response to Arbitrator question No. 280, fn 14 to para. 8.  
938 United  States' response to Arbitrator question No. 280, paras. 8 -9. 
939 Canada's response to Arbitrator question No. 250, para. 251. 
940 United  States' response to Arbitrator question No. 66, paras. 181 -182. 
941 See para s. 8.285 and 8.308 , above.  
942 However, the Arbitrator considers that if this were the case, USITC estimates would likely be 
stronger candidates for use in an economic model. See, e.g. Decision by the Arbitrator, US – Anti Dumping 
Methodologies (China) (Article 22.6 – US), para. 7.36 (u sing pre -existing USITC elasticity estimates for a 
retrospective, rather than prospective, Armington model).  WT/DS505/ARB  
 
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  party has brought forward substantiated arguments against the other's party suggest ion. We further 
discern nothing from the discussions surrounding these values in the sources from which they are 
taken  (i.e. the study by Gasiorek et al. (2019) (Exhibit USA -33), using a value of 15, and the 
arbitrator's decision in US – Anti-Dumping Metho dologies (China) (Article 22.6 – US), using a value 
of 10) that materially demonstrates either value's superiority . Since Canada considers that the value 
of 10 as proposed by the United States is not unreasonable, the Arbitrator thus adopts a value of 10 
for the import supply elasticity.  
8.2  Implementation of the Armington model under the two steps  
8.327.   We note that t he structural form of the Armington model  (see section 7.3, above ) and the 
determination of parameter values  (see section 8.1, above ) alone are in sufficient to calculate a level 
of NI. Rather, to employ the selected  model such that its outcome properly accounts for the 
difference between the factual and counterfactua l situation s (the difference being the level of NI) , 
the sequencing of model applications, or "runs", is also necessary . 
8.328.   The United  States  proposes , for the implementation of the US methodology , that the model 
must be run twice : 
The United  States clarifies  that to calculate nullification or impairment it would be 
necessary to run the U.S. model twice. The first run would impose the initial CVD rate, 
and the second run would impose the counterfactual CVD rate. The difference between 
the total trade effects o n all Canadian varieties generated by each model run would be 
the estimate of nullification or impairment.943 
8.329.   Canada  agrees, noting that, in the circumstances that would require two runs of Canada's 
formula, i.e. when the counterfactual WTO -consistent duty differs from the reference period's duty  
(see section 7.1.2.5 , above ), "the U.S. model would also need to be run twice" .944 
8.330.   The Arbitrator notes that there is agreement between the parties that any Armington model 
would have to be run twice in order to ac count for the two distinct duty rate changes, i.e. the change 
from the reference period level to the factual, WTO -inconsistent one, and from the reference period 
level to the counterfactual, WTO -consistent one. The Arbitrator considers this approach valid to 
isolate the trade effect s caused by the OFA -AFA Measure.  
8.331.   The Arbitrator further notes that, technically, a second model run is only required if the 
counterfactual duty rate differs from the reference period duty rate as no trade effect s occur as a 
conse quence of a zero duty rate change.945 However, f or the sake of transparency  and the ease of 
application , the model proposed by the Arbitrator is run twice under any circumstances. The first 
model run changes the duty rate for affected imports from the refer ence level to the factual, 
WTO-inconsistent duty rate level, and the second model run changes the duty rate for affected 
imports from the reference level to the counterfactual, WTO -consistent duty rate level.946 The final 
level of NI is the difference of th e runs.  
𝑁𝐼=𝑁𝐼(𝐹𝑖𝑟𝑠𝑡  𝑅𝑢𝑛 )−𝑁𝐼(𝑆𝑒𝑐𝑜𝑛𝑑  𝑅𝑢𝑛 ) 
 
8.332.   The input file (see Annex C -2 of the Addendum to this Decision, WT/DS505/ARB/Add.1 ) and 
the STATA code  (see Annex C -1 of the Addendum to this Decision, WT/DS505/ARB/Add.1 ) provided 
by the Arbitrator run s the model twice by default, calculating, at the same time, 𝑁𝐼(𝐹𝑖𝑟𝑠𝑡  𝑅𝑢𝑛 ), 
𝑁𝐼(𝑆𝑒𝑐𝑜𝑛𝑑  𝑅𝑢𝑛 ), and the final level of 𝑁𝐼=𝑁𝐼(𝐹𝑖𝑟𝑠𝑡  𝑅𝑢𝑛)−𝑁𝐼(𝑆𝑒𝑐𝑜𝑛𝑑  𝑅𝑢𝑛 ). 
 
943 United  States' response to Arbitrator question No. 83, para. 223.  
944 Canada's response to Arbitrator question No. 79, fn 199 to para. 170.  
945 United States' response to Arbitrator question No. 131, paras. 21 -22 (making this point) . 
946 The Arbitrator further notes that, as confirmed by both parties , the factual, WTO -inconsistent duty 
rates for unaffected Canadian exporters can differ from the reference  period duty rates for unaffected Canadian 
exporters (Canada's response to Arbitrator question No. 295, fn 64 to para. 62; United  States' response to 
Arbitrator question No. 295, para. 54) The input file and the STATA code provided by the Arbitrator allow for 
this possibility.  WT/DS505/ARB  
 
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9  PRICE -LEVEL ADJUSTMENT  
9.1.  In its Methodology Paper, Canada stated that "[t]he precise data inputs for the Value of Imports  
(inflated to the appropriate period) and the level and change of the WTO -inconsistent duty ( 𝛥𝐷𝑢𝑡𝑦 ) 
remain to be determined in the future".947 Moreover, Canada's methodology report stated that "the 
value of imports from Canada … is to be drawn from the calendar year prior to the imposition of the 
WTO-inconsistent duty and inflated from the reference period to the period subject to the 
WTO-inconsistent duty".948 Further , in the context of discussing an example of how the formula was 
to be run, Canada stated that "[t]he nullification or impairment in this example is then the value of 
imports from the reference period (properly inflated) times 0.10 times the scaling factor for the 
sector associated with the product".949 The submissions did not discuss, however, what the nature 
of this inflationary adjustment was or how it was to be performed.  
9.2.  The United States, noting the above -referenced statements in Canada's Methodology Paper 
and accompanying Report, explained that "[t]o the extent Canada seeks to apply an inflation rate, 
the United States strongly disagrees with such an application to the value of imp orts".950 This is so 
because, in the United States' view, "[a]ll inputs should be based on the same calendar year and 
Canada has not suggested to inflate any of the other inputs. Therefore, to avoid unnecessarily 
overstating the estimate of the trade effect , the value of imports should be based solely on the 
calendar year prior to the imposition by Commerce of duties resulting from the application of the 
challenged measure in a future CVD proceeding, without any adjustment for inflation".951 
9.3.  Canada responded to the United States' assertions, explaining that "[w]ith respect to the 
inflation adjustment that Canada proposed in the Methodology for Calculating Canada's Losses, 
Canada slightly amends this proposal"952, and that "Canada is not seeking to use an adjust ed value 
of imports in its formula to calculate the level of nullification or impairment ", because Canada is 
"seeking that the level of suspension calculated can be adjusted for inflation on an annual basis".953 
Canada argues that its request in this contex t "is consistent with the award in US – Washing Machines 
(Article  22.6 - US), where the arbitrator allowed for an annual adjustment of the level of suspension 
or concession based on the rate of inflation".954 In response to specific questions from the Arbit rator, 
Canada further clarified that, from its perspective, the purpose of the inflationary adjustment is to 
reflect changes in prices in the affected market and thus preserve the real value of suspension.955 
More specifically, Canada asserted that the infl ationary adjustment is meant to adjust the level of 
NI. In light of that purpose, Canada considers that a PPI specific to the industry that relates to the 
relevant product is the most appropriate inflation index.956 
9.4.  In response to such clarifications by Can ada, the United States asserts it "does not object to 
the concept of applying an adjustment for inflation to the initial nullification or impairment level on 
an annual basis" but that Canada has to provide an appropriate source for such an adjustment, 
which, according to the United  States, could be "a U.S. producer price index for the relevant 
industry" but no "GDP growth rate, deflator, or other aggregate rate".957 The United States has 
stated that the purpose of the adjustment is to preserve the real value (i.e. the economic impact) 
of the suspension.958 However, in a later submission , the United States did not object to Canada 's 
explanation that the purpose of the inflation adjustment is to adjust the level of NI, rather than the 
 
947 Canada's methodology report, para. 7. (emphasis original ) 
948 Canada's methodology report, para. 35.  
949 Canada's methodology report, para. 36.  
950 United States' written submission, para. 142.  
951 United States' written submission, para. 1 42. 
952 Canada's written submission, para. 181. (fn omitted)  
953 Canada's written submission, para. 181.  
954 Canada's written submission, para. 181 ( referring to Decision by the Arbitrator, US – Washing 
Machines (Article 22.6 – US), paras. 3.132 -3.134 and 4.122 -4.123).  
955 Canada's response to Arbitrator question No.  236, para. 210 . 
956 Canada's response to Arbitrator question No.  292, paras. 51 -53.  
957 United  States' response to Arbitrator question No. 111, para. 278.  
958 United States' response to Arbitrator question No.  236, para. 159, and No.  292, para. 35.  WT/DS505/ARB  
 
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  level of suspension per se .959 Further, the United States agrees with Canada that an industry -specific 
PPI would be the most appropriate inflation index in this context.960 
9.5.  Subsequently, in response to a question from the Arbitrator, Canada asserts that "[the] various 
options [ for an inflationary index] reflect trade -offs between specificity, applicability, and 
administrability" .961 Canada suggests using PPIs provided by the United States'  Bureau of Labor 
Statistics (BLS) , which are available at "different levels of aggregation, categorization, and stage of 
production on a frequent basis with a relatively short time lag"962. Canada emphasizes that applying 
the "final demand goods" PPI is the simplest approach, albeit more disaggregated PPIs based on the 
NAICS classification can be used in combination with HTS to NAICS correspondences.963 Canada 
suggest s that the final demand goods PPI should be used in any cases where  no such matching can 
be performed.964 
9.6.  The United States argues that an appropriate inflationary index could be derived  from PPIs 
published by the BLS. The United States indicates that these  PPIs are published monthly and an 
annual change could be derived from comparing PPIs from December to December, and that the 
BLS calculates PPIs on a monthly bas is for approximately 53 5 industries and more than 
4,000  product lines. The United States further asserts that the relevant indices follow the NAICS 
classification system which can be concorded to HTS.965 
9.7.  In addition, the United States mentions that the "BLS also publishes more than 
3,700  commodity price indexes for goods. The commodity classification structure of the PPI 
organizes products and services by similarity or material composition, regardless of the industry 
classification of the producing establishment."966 This data is structured in a unique classification 
system whose matching to other common classifications systems such as HS or NAICS is not 
straightforward.967 
9.8.  The Arbitrator notes at the outset that the parties' request for an "inflation" adjustment is more 
accurately described  as a "price -level adjustment", as it would capture both inflationary and 
deflationary trends. We shall therefore use the latter term to describe this adjustment moving 
forward. That being said, this section proceeds in four parts.  First, we address the reasonableness 
and purpose of a price -level adjustment, and, relatedly, the relevant price index to be used in such 
an adjustment. Second, we discuss the appropriate measurement of changes in the price -level. 
Third, we address the av ailability of the underlying price index data. Fourth, we provide detailed 
instructions on how to implement the price-level adjustment.  
9.1  Reasonableness, purpose, and relevant price index  
9.9.  In this section, we address three somewhat related issues : (a) the rea sonableness of a 
price-level adjustment ; (b) its purpose ; and (c) the relevant price-level index that would be used in 
such an adjustment. Both parties agree  that a price-level adjustment is reasonable in  principle . We 
discern no reason to disagree. A give n level of suspension would remain in place for an unknown 
period of time, over which inflation could erode the utility of a given level of suspension in a manner 
that would inhibit the purpose of such a level of suspension, i.e. to induce compliance.  We therefore 
find the adoption of such an adjustment reasonable  in principle . 
 
959 United States'  comments on Canada's response to Arbitrator question No. 292, para. 30.  
960 United States'  comments on Canada's response to Arbitrator question No. 2 92, para. 30. The 
United  States further considers that if, in deciding which inflationary index to use, the Arbitrator were to 
consider the range of products against which Canada might re taliate, this would exceed the Arbitrator 's 
mandate (United States' response to Arbitrator question No.  292, para. 35). 
961 Canada's response to Arbitrator question No. 179, para. 169.  
962 Canada's response to Arbitrator question No. 179, para. 169.  
963 Canada's response to Arbitrator question No. 179, para. 170.  
964 Canada's response to Arbitrator question No. 179, paras. 169-170. 
965 United States' response to Arbitrator question No. 180.  
966 United States'  response to Arbitrator question No. 180, para. 114.  
967 See Canada's response to Arbitrator question No. 179, fn 141 to para. 170, asserting that : "BLS uses 
a unique categorization of goods and services that does not match any other standard codi ng structure, such 
as NAICS or the U.N. Standard International Trade Classification. Canada is unaware of a correspondence that 
would permit matching to HS categories."  WT/DS505/ARB  
 
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9.10.   We further note Canada 's position that the core purpose of the price -level adjustment is to 
adjust the level of NI calculated under the model. The United States has less explicitly t aken this 
position, instead more generally relying on a characterization of the adjustment as fulfilling the 
purpose of preserving the effectiveness of a level of suspension, but at the same time has not taken 
issue with Canada's explanation on this front.  We consider that Canada's explanation  that the 
purpose of the price -level adjustment is to adjust the level of NI  calculated under the selected 
economic model  is reasonable  under the specific circumstances of this proceeding . We take special 
note that the United States has not contested Canada's position on this score . Furthermore, the 
United States' agreement that  PPIs specific to the relevant product  be used in this contex t appears 
to further suggest to us that an adjustment to  the level of  NI – which is calculated based on the 
values of imports of the relevant product – underlies  the United States'  position to some degree . We 
recognize, of course,  that the proposed  price-level adjustment is not a re -application  of the economic 
model described in this Decision. However, we note that the selected model is meant to be applied 
only when triggering events occur, which may be rare, whereas  the suspension of concessions that 
flow from such a triggering event will remain  in place for an unknown length of time. Thus, adjusting 
a previously calculated level of  NI to account for changes in at least one relevant market indicator, 
i.e. price levels of the relevant product, appears to us a rudimentary, albeit reasonable, exercise to 
adjust the level of NI. Such a strategy also appears generally consistent  with the spirit of using of a 
prospective model . 
9.11.   We further note  the parties ' agree ment that the index used in the price -level adjustment 
should be US PPIs that are specific to the product subject to the relevant CVD order. Having accepted 
the notion that the purpose of the price -level adjustment may, under the circumstances of this 
proceeding, be conceived of as an adjustme nt to the level of NI, we further agree with the parties' 
joint proposal that US PPIs are reasonably specific to the product subject to the relevant CVD order . 
This is so because this is the same product for which values of imports were used to determine t he 
initial level of NI.  We note that both parties suggested the United States BLS as data source  for 
US PPIs. The Arbitrator sees no reason to question reliability of such PPIs released by the BLS. 
Moreover, the Arbitrator recogni zes as an advantage of ind ustry-level PPIs that these data are 
organized in NAICS codes and are, therefore, readily available for matching with HTS codes . 
9.12.   We underline at this point that our acceptance of the parties' proposed price -level adjustment, 
its purpose and the appropriate  price-level index, should not be taken as a statement that such 
adjustments must be rigidly conceived or technically executed in the manner presented by the 
parties. Indeed, in our view, whether to adopt such an adjustment, the purpose of the adjustment, 
and the technical execution of the adjustment, must all be evaluated in light of the specific 
circumstances of the relevant proceeding.968 We thus recall that in this proceeding, in particular , the 
parties generally agree on the adoption  of, purpose  of, and price index to be used in  the proposed 
adjustment . 
9.2  Measurement of change in the price  level  
9.13.   This section addresses  how the change in the PPIs should be measured. This includes both 
the calculation method as well as  the period of time over which Canada shall take data for the 
relevant PPI.  Canada suggests an adjustment every twelve months. Thereby, a twelve -month simple 
average of the seasonally  unadjusted PPI should be calculated to derive a rate of inflation. Canada 
explains that if PPI data are unavailable for calculating the rate of inflation for ongoing periods, then 
"percent inflation adjustment would be based on the most recently available  12-month simple 
average of seasonally -unadjusted  PPI index level relative to the previous 12 -month period".969 
9.14.   The United  States claims that the inflation adjustment should be based on annual data 
because the level of NI is also calculated on an annual basis. According to the United  States, this 
 
968 We note that other arbitrators have accepted or declined to adopt similar such adjustments in 
manners specific to the circumstances of their proceedings.  See Decisions by the Arbitrator, US – Washing 
Machines (Article 22.6 – US), sections 3.5.2 and 4.6.2;  US – Large Civil Aircraft (2nd complaint) (Article 22.6 – 
US), section 6.5.1; and  EC and certain member States – Large Civil Aircraft (Article 22.6 – EU), sections 
6.4.5.2 and 6.4.5.3 . 
969 Canada's response to Arbitrator question No. 237, para. 213.  WT/DS505/ARB  
 
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  adjustment should be "based on the year -on-year change in the index from December to 
December".970 
9.15.   Canada responds that Canada "does not agree that a comparison of changes in the producer 
price index from one Decembe r monthly value to the next December monthly value is the best 
approach".971 Canada does not further substantiate this claim.  
9.16.   The Arbitrator notes that Canada proposes to take an average inflation rate (which is the 
change  in the PPI) based on monthly data,  whereas the United  States calculates annual inflation 
based on the annual change of the PPI from December to the next December. In this respect, the 
United  States' approach appears simpler, as only two data points instead of 24 (each month in a 
two-year p eriod) need to be sourced. Further, we discern no reason to believe that this approach 
would be  statistically less reliable. Therefore, the Arbitrator concludes that the price changes should 
be calculated based on twelve -month year -on-year (i.e. December -to-December)  changes of the 
respective PPI.  
9.3  Data availability  
9.17.   Having decided that Canada shall take PPI data on a December -to-December annual basis,  
we note that the Arbitrator further raised the following two related issues with the parties: (a) that 
there  may be a delay between the completion of a previous calendar month (e.g. December) and 
the release of PPI data pertaining to that month; and (b) even when data for such a month are 
released, they may be subject to statistical revision for some time.  
9.18.   According to Canada, relying on the most recently available PPI data  at the time Canada 
performs the relevant price -level adjustment  is reasonable despite the fact that this data might be 
subject to statistical revisions. Thereby, Canada argues that "Canada's a bility to suspend concessions 
in a timely manner should not be unduly hindered by minor variations in the calculated NI that may 
result from potential revisions to the most current PPI values available for use at the time of 
application".972 
9.19.   The United  States concurs that the most recently available PPI data appears reasonable  to 
use in this context . The United  States also provides an example showing how a price -level 
adjustment to the initial level of suspension  would be calculated  for each year . In the example 
provided by the United States, Canada calculates NI in year 1, and applies to this level of NI, at the 
end of year 2, an inflation rate computed as the percentage change in the PPI from December of 
year 1 to December of year 2.973 The United States argues that statistical revisions will automatically 
be taken into account by comparing PPI index values relative to the base year, and applying the 
price-level adjustment each year "to the initial (i.e. year 1) level of suspension."974 
9.20.   The Arbitrator notes that both parties suggest using data  for the price -level adjustment  that 
might be subject to statistical revisions and that such statistical revisions do not cause a systematic 
bias in the determination of the adjusted level of NI. The Arbitrator further agrees with the 
United  States that the United States' proposed method of calculating the change in price level based 
on December -to-December changes relative to  the base year  corrects for such revisions in the 
subsequent period. Henc e, the Arbitrator concludes that the most recently available relevant PPI 
data at the time Canada performs the price -level adjustment should be used . 
 
970 United States' response to Arbitrator question No. 237, para. 160.  
971 Canada's comments to United  States' response to Arbitrator question No. 237, para. 109.  
972 Canada's response to Arbitrator question No. 293, para. 54. 
973 United  States response to Arbitrator question No. 293, para. 37. In the United States' example, the 
PPI in December of year 1 is 100, and the PPI in December of year 2 is 103.5. Therefore,  in year 2 NI is 
103.5% of the initially -calculated NI.  
974 With the e xample  in fn 973 to para. 9.19 , above , given a PPI equal to 105.3 in December of year 3, 
the inflationary adjustment calculated by Canada at the end of year 3 uses the change in the price index 
between December of year 3 (105.3) and December of year 1 ( 100), and is applied to the level of NI calculated 
in year 1. That is, in year 3 NI is 5.3% of the initially -calculated NI . (United States'  response to Arbitrator 
question No. 293, para. 37).  WT/DS505/ARB  
 
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9.4  Technical implementation  
9.21.   With the issues in the three previous sections decided, we now turn to describe h ow Canada 
shall technically implement the price -level adjustment. Thus,  the Arbitrator instructs Canada to 
implement the following procedure for a price -level adjustment of the level of NI. For the sake of 
clarity, this price -level adjustment shall be appl ied to any change in the relevant price level, whether 
it is inflationary (price -level increases) or deflationary (price level decreases).  
9.22.   Canada shall, first, access PPIs from the US BLS at the level of 6 -digit NAICS codes.975 Second, 
Canada shall match all the HTS 10 -digit codes in the CVD order with the PPIs using an official 
correspondence table provided by the United States'  Census Bureau.976 In case a CVD order refers 
to only one 6 -digit NAICS code, the price -level adjustme nt shall be based on that respective 
price-level change. In case only a subset of HTS 10 -digit codes can be matched to 6 -digit NAICS 
codes, the price -level adjustment shall be based on the PPI price -level change(s) corresponding to 
those NAICS code(s) that  can be matched. In case the HTS 10 -digit codes can be matched to two 
or more 6 -digit NAICS codes, the price -level adjustment shall be based on a weighted average of 
PPIs corresponding to those NAICS codes, using, as weights, HTS 10 -digit US imports from C anada 
sourced from USA Trade Online or, if these data are unavailable, from USITC DataWeb for the 
reference year, according to the following formula : 
𝑃𝑃𝐼 =∑𝑃𝑃𝐼 𝑗𝑀𝑗
∑𝑀𝑗 𝑗𝑗, 
where PPI is the CVD order -specific PPI, 𝑃𝑃𝐼 𝑗 is the NAICS 6 -digit indust ry-specific PPI, and 𝑀𝑗 are 
US imports from Canada belonging to industry 𝑗. 
9.23.   In case no HTS 10 -digit code can be matched to a 6 -digit NAICS codes or if the respective 
6-digit PPIs are unavailable, Canada shall apply the same procedure as described in the  paragraph 
immediately above using 3 -digit NAICS codes. In case no HTS 10 -digit code can be matched to a 
3-digit NAICS code or if the respective 3 -digit PPIs are unavailable, Canada shall use the PPI for the 
whole US economy.  
9.24.   Third, Canada shall use the PPIs calculated as in the two steps a bove to adjust the level of NI 
for price -level changes. The Arbitrator notes that Canada calculates  a level of NI in year 𝑡 (regardless 
of the month in year 𝑡 in which suspension begins) , while the reference period could be  𝑡−1 (i.e. the 
calendar year immediately preceding the year in which the level of NI is initially calculated ) or a year 
prior to that  (𝑡−2, 𝑡−3,…).977 In our view, price -level changes that occurred between  the reference 
period  and the year immediately  before  Canada 's calculat ion of  the level of NI – if the two years are 
not the same  – should be taken into account in the initial calculation of the level of NI. To this end , 
Canada shall first apply the price -level adjustment to the  calculated  level of NI, denoted  𝑁𝐼𝑡, 
determining  the initial price -level adjusted NI, denoted 𝑁𝐼̃𝑡, as follows : 
𝑁𝐼̃𝑡=𝑁𝐼𝑡×(𝑃𝑃𝐼𝑡−1𝐷𝐸𝐶
𝑃𝑃𝐼𝑅𝑃𝐷𝐸𝐶), 
 
and then , provided that the measure is still  in place so that Canada is still entitled to suspend 
concessions , in each year 𝑡+1,𝑡+2,…, Canada shall use the following price -level adjustment to 𝑁𝐼̃𝑡: 
𝑁𝐼𝑡+𝑗=𝑁𝐼̃𝑡×(𝑃𝑃𝐼𝑡+𝑗−1𝐷𝐸𝐶
𝑃𝑃𝐼𝑡−1𝐷𝐸𝐶),𝑗=1,…,𝑇. 
9.25.   The Arbitrator  notes, first, tha t no adjustment to the initial determination of the level of NI 
will be necessary if the reference period is  year 𝑡−1. In this case, in fact, the first equation in the 
paragraph immediately above implies that 𝑁𝐼̃𝑡=𝑁𝐼𝑡. Second, the Arbitrator notes that the  formula 
 
975 An online data selection tool for industry -specific PPIs is curre ntly available at : 
https://data.bls.gov/PDQWeb/pc . 
976 Correspondence tables can currently be accessed via : https://www.census.gov/foreign -
trade/reference/codes/concordance/index.html . 
977 See para. 6.123 , above (recognizing an outdated reference period as a possibility).  WT/DS505/ARB  
 
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  in the second equation in the paragraph immediately above, by calculating the change in price level 
based on December -to-December changes relative to base year ( 𝑡−1), corrects for any revisions in 
PPIs (see paragraph 9.20). This formula is the same as the formula proposed by the United  States.  
9.26.   To provide an example, 𝑡, the year in which Canada calculates 𝑁𝐼𝑡 (in any month), is 2025 in 
this example . Canada applies the Arbitrator's selected methodology and calculates 𝑁𝐼2025. If the 
reference period is not 2024, but a year preceding 2024, Canada will first calculate 𝑁𝐼̃2025 using the 
first formula in paragraph 9.24: 𝑁𝐼̃2025 =𝑁𝐼2025 ×(𝑃𝑃𝐼2024𝐷𝐸𝐶
𝑃𝑃𝐼𝑅𝑃𝐷𝐸𝐶). In 2026, when 𝑃𝑃𝐼2025𝐷𝐸𝐶 becomes available,  
provided that the measure is still in place, Canada applies the second formula in paragraph 9.24 and 
calculates 𝑁𝐼2026 =𝑁𝐼̃2025 ×(𝑃𝑃𝐼2025𝐷𝐸𝐶
𝑃𝑃𝐼2024𝐷𝐸𝐶). Similarly, in  2027, provided that the measure is still in place, 
Canada calculates 𝑁𝐼2027 =𝑁𝐼̃2025 ×(𝑃𝑃𝐼2026𝐷𝐸𝐶
𝑃𝑃𝐼2024𝐷𝐸𝐶), and so on  in each successive year in which the measure 
is still in place.  
10  NOTIFICATIONS TO THE DSB  
10.1.   The Uni ted States suggests that Canada " notify  the DSB of the level of suspension it calculates 
and of any adjustment to the level of suspension for each year during the first quarter of the following 
year".978 Canada does not object to the kind of notification pr oposed by the United States. Canada 
underlines, however, that no legal obligation exists for such a notification, and that such notifications 
would be undertaken in a purely voluntary fashion and only for reasons of transparency. Regarding 
the language tha t the Arbitrator could include in its Decision, Canada proposes for the  Arbitrator to 
suggest that Canada,  "as of the starting point of suspension of concessions, notify the DSB of the 
level of suspension it calculates and of any adjustment to the level of suspension for each year 
during the first quarter of the following year".979 
10.2.   The Arbitrator considers that the United States' and Canada's proposal on this score appear s 
reasonable and desirable, in particular because the described DSB notification s would promote 
transparency as to the calculated levels of suspension. We therefore suggest that, if Canada 
suspends concessions or other obligations, Canada notify the DSB of the level(s) of suspension that 
Canada calculates in a given calendar year in the first quarter of the following calendar year.980 
11  CONCLUSION  
11.1.   This arbitration entailed special challenges mainly arising from the nature of the 
OFA-AFA Measure, which can apply in a wide variety of circumstances, coupled with Canada 's 
request for a prospe ctive model with which to determine levels of NI and equivalent  levels of 
suspension. The Arbitrator expended significant efforts during the course of this proceeding ensuring 
that the chosen prospective model can reasonably function in a variety of future  circumstances  and 
against the background of the United States' retrospective duty assessment system which adds 
certain administrative complexities in this context . The selected model and methods for 
implementing that model were thus fashioned often as a r esult of a balancing of considerations, 
including selecting a methodology that will result in a reasoned estimate of a level of NI while not 
placing unreasonable burdens on Canada. That model and accompanying guidance on implementing 
it, described in detai l in this Decision, is summarized below.  
11.2.   Following a triggering event  (section 6.2.1), Canada  is entitled to determine a level of NI and 
suspend conc essions accordingly. This determination is based on the  four-variety Armington model 
described in section 7.3, with instructions on data inputs and implementation of section  8. The 
selected model is able  to quantify the trade decline Canada  experience s due to the application of the 
OFA-AFA Measure in a CVD proceeding , taking into account that unaffected Canadian exporters may 
partially offset trade losses  experienced by affected Canadian exporters.  The value of this  trade 
decline, which constitutes the level of NI, is derived from a comparative static exercise that compares 
trade levels occurring under  factual, WTO -inconsistent CVD rates , with trade levels occurring under  
 
978 United States' response to Arbitrator question No. 35, para. 115. The United States notes that a 
similar procedure was suggested by the US – Washing Machines (Article 22.6 – US) arbitrator.  
979 Canada's response to Arbitrator question No. 126 , paras. 62-63. 
980 We note that the US – Washing Machines (Article 22.6 – US) arbitrato r included suggestions for such 
notifications with respect to its decisions regarding both LRWs and non -LRWs (US – Washing Machines 
(Article  22.6 – US), paras. 5.1 and 5.3).  WT/DS505/ARB  
 
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counterfactual, WTO -consist ent CVD rates. Data inputs  are generally taken from a reference period 
(section 6.4) that is , as a general principle,  not distorted by the application of the OFA -AFA Measure.  
The Arbitrator provides a computer code to solve the Armington model  in its non -linear form 
(Annex  C-1 of the Addendum to this Decision, WT/DS505/ARB/Add.1 ), a solution method which  
minimizes  potential approximation errors that would result from analytical, log -linearized solutions . 
11.3.   Canada shall collect  all data inputs needed to calculate a level of NI  and insert them in the 
"Parameter Input" sheet of the  excel spreadsheet  Annex C -2 of the Addendum to this Decision, 
WT/DS505/ARB/Add.1 , provided by the Arbitrator.  The data inputs, in the order in which they appear 
in the excel spreadsheet, are: (1) the import supply elasticity; (2) the domestic supply elasticity; 
(3) the elasticity of demand; (4) the Armington substitution elasticity; (5) the US domestic market 
share; (6) the value of affected Canadian imports; (7) the value of unaffected Canadian imports; 
(8) the value of RoW imports; (9)  the reference period CVD rate associated with  affected Canadian 
imports; (10) the reference period CVD rate associated with  unaffected Canadian imports; (11) the 
factual, WTO -inconsistent CVD rate associated with  affected Canadian imports; (12) the factual CVD 
rate associated with  unaffected Canadian imports; and (13) the counterfactual, WTO -consistent CVD 
rate associated with  affected Canadian imports.  
11.4.   Supply elasticities are fixed (section 8.1.6). CVD order -specific  price elasticity of demand and 
Armington substitution elastic ity will be calculated in a manner described in section s 8.1.5 and 8.1.4, 
respectively. Section 8.1.1  instructs Canada how to calculate the market shares of U S domestic 
shipments, values of imports from Canada affected by the OFA -AFA Measure, values of imports from 
Canada unaffected by the OFA -AFA Measure,  and values of imports from the rest of the world. In 
that section, in particular,  significant efforts have  been made to enable Canada to calculate these 
inputs  under a  variety of  future circumstances.  Section 8.1.2  includes the  instructions regarding how 
to assign  the relevant duty rate s to both affected and unaffected Canadian imports.  
11.5.   Finally,  using all relevant data inputs,  the level of NI is determined by executing  the computer 
code ( Annex C -1), which automatically solves the model in two steps (section 8.2). Canada may 
suspend concessions for the duration specified in section 6.2.2  and perform price -level adjustments, 
if necessary, as described in section 9. 
11.6.   Canada may therefore request authorization from the DSB to suspend concessions or other 
obligations in the goods sector at a level not to exceed an annual amount to be determined by 
applying the methodology described in this Decision and as summarized  above in this section . 
 
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