WT/DS534/5  
 
5 June 2019  
(19-3887) Page: 1/2 
  Original: English  
 
  
UNITED STATES – ANTI -DUMPING MEASURES AP PLYING DIFFERENTIAL PRICING 
METHODOLOGY TO SOFTW OOD LUMBER FROM CANA DA 
NOTIFICATION OF AN A PPEAL BY CANADA UNDE R ARTICLE 16.4 AND A RTICLE 17  
OF THE UNDERSTANDING  ON RULES AND PROCED URES GOVERNING  
THE SETTLEMENT OF DI SPUTES (DSU), AND UN DER RULE 20(1)  
OF THE WORKING PROCE DURES FOR APPELLATE REVIEW  
The following communication dated 4 June 2019, from the Delegation of Canada, is being circulated  
to Members  
 
_______________  
 
 
Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU") and Rule 20 of the  Working Procedures for Appellate Review , Canada 
hereby notifies the Appellat e Body Secretariat of its decision to appeal certain issues of law covered 
in the report of the Panel in  United States – Anti-Dumping Measures Applying Differential Pricing 
Methodology to Softwood Lumber from Canada (DS534) and certain legal interpretation s developed 
by the Panel in that report.  
 
First, Canada requests that the Appellate Body review the Panel's findings and conclusions arising 
from its erroneous interpretation of the term "pattern" in the second sentence of Article 2.4.2 of the 
Agreement on  Implementation of Article VI of the GATT 1994 ("Anti -Dumping Agreement"). In 
particular, the Panel interpreted Article 2.4.2 to improperly find that a "pattern" could include export 
prices that are significantly higher than other export prices.1 It then incorrectly found that the 
US Differential Pricing Methodology's ("DPM") inclusion of export prices that are significantly higher 
in the "pattern" in this dispute is consistent with Article 2.4.2 of the Anti -Dumping Agreement.  
 
Second, Canada requ ests review of the Panel's erroneous finding that the second sentence of 
Article  2.4.2 requires an investigating authority to use the weighted -average -to-transaction 
methodology for "pattern" transactions and a symmetrical comparison methodology for non -pattern 
transactions.2 This amalgam of comparison methodologies is inconsistent with the ordinary meaning 
and context of Article 2.4.2 and would undermine the function of this provision.  
 
Third, Canada requests review of the Panel's erroneous findings and co nclusions with respect to 
zeroing under the second sentence of Article 2.4.2 and Article 2.4 of the Anti -Dumping Agreement.3 
The Panel's finding that zeroing was permissible under the second sentence was based on an 
improper interpretation of Article 2.4.2 . In addition, the Panel erred when it failed to find that the 
practice of zeroing independently violates the fair comparison requirement in Article 2.4. These 
erroneous findings led the Panel to improperly conclude that the United States' application of z eroing 
as part of the DPM in the underlying investigation was consistent with Article 2.4.2 and Article 2.4 
of the Anti -Dumping Agreement.  
 
 
                                               
1 Panel Report, US – Differential Pricing Methodology , paras. 7.50 -7.66.  
2 Panel Report, US – Differential Pricing Methodology , paras. 7.85 -7.100.  
3 Panel Report, US – Differential Pricing Methodology , paras. 7.101 -7.106 and 7.108 -7.112.  WT/DS534/5  
 
- 2 - 
 
  Fourth, Canada requests that the Appellate Body find that the Panel acted inconsistently with the 
function of panel s under Article 11 of the DSU. In particular, the Panel erred by departing, without 
cogent reasons, from the legal interpretations and reasoning contained in the adopted 
Appellate  Body report in US – Washing Machines . In that report, the Appellate Body set  out the 
correct interpretation of the second sentence of Article 2.4.2 and Article 2.4 and concluded that the 
United States' DPM measure was "as such" WTO -inconsistent. While the Panel acknowledged the 
existence of the "cogent reasons" standard that arise s from the text of the DSU,4 it failed to provide 
any such reason that would justify departing from adopted Appellate Body legal interpretations and 
reasoning.  
 
Canada respectfully requests that the Appellate Body: reverse the findings and conclusions of the 
Panel referred to above; complete the analysis and find that the application of the DPM to Canadian 
companies in the underlying investigation was WTO -inconsistent; modify accordingly the 
recommendations of the Panel; and find that the Panel acted incon sistently with Article 11 of the 
DSU. 
 
__________  
                                               
4 Panel Report, US – Differential Pricing Methodology , para. 7.107.