WORLD TRADE  
ORGANIZATION  WT/DS277/8 
15 February 2005 
 
 (05-0652) 
 Original:   English 
  
 
UNITED STATES – INVESTIGATION OF THE INTERNATIONAL 
TRADE COMMISSION IN SOFTWOOD LUMBER FROM CANADA 
 
Recourse to Article 21.5 of the DSU by Canada
 
 
Request for the Establishment of a Panel  
 
 
 The following communication, dated 14 February 2005, from the delegation of Canada to the 
Chairperson of the Dispute Settlement Body, is ci rculated pursuant to Article 21.5 of the DSU. 
 
_______________ 
 
  On 26 April 2004, the Dispute Settlement Body ("DSB") adopted the Panel report in United 
States – Investigation of the International Trade Commission in Softwood Lumber from Canada .
1  The 
Panel found that the US International Trade Commis sion's ("USITC") threat of injury determination 
in Softwood Lumber from Canada2, was not consistent with the Agreement on Implementation of 
Article VI of the General Ag reement on Tariffs and Trade 1994 ("AD Agreement ") and the Agreement 
on Subsidies and Countervailing Measures ("SCM Agreement ").  The Panel recommended that the 
DSB request the United States to bring its measures into conformity with its  obligations under both 
the AD Agreement  and the SCM Agreement . 
  Specifically, the Panel concluded that the USIT C's finding of a likely imminent substantial 
increase in softwood lumber imports from Canada wa s not one which could have been reached by an 
objective and unbiased investigating authority in ligh t of the totality of the factors and the reasoning 
in the USITC determination.
3  On this basis, the Panel concl uded that the USITC determination was 
not consistent with the requirements of Article 3.7 of the AD Agreement  and Article 15.7 of the 
SCM Agreement .4 
  The Panel also concluded that the USITC's determination was not consistent with the 
requirements of Article 3.5 of the AD Agreement  and Article 15.5 of the SCM Agreement  because the 
USITC's analysis rested upon its unsubstantiated finding of an imminent substantial increase in 
imports.
5   
  Finally, the Panel found that in the absence of a WTO-consistent causation finding, it was not 
necessary or appropriate to make findings with re spect to whether the ITC attributed the injuries 
                                                     
 
1 Dispute Settlement Body, Minutes of Meeting (26 April 2004) , WT/DSB/M/168, 2 June 2004, at 
para. 5.  Also See United States – Investigation of the International Trade Commission in Softwood Lumber 
from Canada, Report of the Panel,  WT/DS277/R, adopted 26 April 2004 [hereinafter "Panel Report"].  
2 Softwood Lumber from Canada, Investigations Nos. 701-TA-414 and 731-TA-928 (Final), 
Publication 3509, May 2002. 
3 Panel Report, at paras. 7.89, 7.96 and 8.1(a). 
4 Ibid. 
5 Ibid., at paras. 7.122 and 8.2(a). WT/DS277/8 
Page 2  
 
 caused by other factors to the allegedly dumped and s ubsidized imports.  In view of the fundamental 
significance of the non-attribution requirement and to give guidance should the issue arise in implementation, however, the Panel set out its seri ous concerns on this issue.  The Panel concluded 
that given the overall absence of discussion of other factors potentially causing injury in the future, the Panel would conclude that the ITC determina tion is not consistent with the obligation in 
Article 3.5 of the AD Agreement  and Article 15.5 of the SCM Agreement  that "injuries caused by 
these other factors must not be attributed" to the allegedly dumped and subsidized imports.
6  
  On 1 October 2004, pursuant to Article 21.3(b) of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes ("DSU"), Canada and the United States agreed on a 
"reasonable period of time" for the United States to comply with the recommendations and rulings of 
the DSB.
7  The United States undertook to bring its measure into conformity with the findings of the 
Panel no later than 26 January 2005.   After the adoption of the Panel report, the United States commenced implementation 
proceedings pursuant to its domestic law, specifically section 129(a) of the Uruguay Round 
Agreements Act ("URAA").
8  On 24 November 2004, the USITC issued an unpublished 
determination9 pursuant to section 129(a)(4) that purported to comply with the DSB's 
recommendations and rulings ("the section 129 dete rmination").  The USITC again reached the 
unsubstantiated conclusion that the US softwood lumb er industry was threatened with material injury 
by reason of imports of softwood lumber from Canada alleged to be subsidized and sold in the United 
States at less than fair value ( i.e., dumped).10  One of the 6 Commissioners issued a detailed dissenting 
opinion in which he found that the evidence before the USITC did not support a finding that the US domestic industry producing softwood  lumber was materially injured or threatened with material 
injury by reason of the allegedly dump ed and subsidized imports from Canada.
11 
 
 On 10 December 2004, the US Trade Represen tative instructed the US Department of 
Commerce ("Commerce") to implement the section 129 determination by amending the anti-dumping 
and countervailing duty orders on softwood lumber  products from Canada.  On 20 December 2004, 
Commerce published a notice purporting to amend the anti-dumping and countervailing duty orders 
on softwood lumber products from Canada to  reflect the section 129 determination.12  At the DSB 
meeting of 25 January 2005, the United States in formed the DSB that it had complied with its 
recommendations and rulings. 
  Canada considers that the United States has failed to implement the DSB's recommendations 
and rulings by: 
 
• failing to make a determination of threat of material injury based on facts rather than on 
allegation, conjecture and remote possib ility, as required by Article 3.7 of the AD Agreement  
and 15.7 of the SCM Agreement .  In particular, the findings of the USITC that allegedly 
dumped and subsidized imports were likely to increase imminently and substantially and have 
a significant depressing or suppressing effect on domestic prices are not findings that could 
                                                     
 
6 Panel Report, at para. 7.137. 
7 United States – Investigation of the International Trade Commission in Softwood Lumber from 
Canada , Agreement under Article 21.3 (b) of the DSU , WT/DS277/7, 4 October 2004. 
8 Tariff Act of 1930 , Subtitle IV – Countervailing and Antidum ping Duties, 19 U.S.C. 3538 (2000) 
(also referred to as Subtitle  A of Title VII of the Tariff Act of 1930 ). 
9 Softwood Lumber from Canada, Investigations Nos. 701-TA-414 and 731-TA-928, unpublished 
determination, 24 November 2004 [hereinaft er "Section 129 Consistency Determination"]. 
10 Section 129 Consistency Determination, page 85. 
11 Ibid., page 101. 
12 69 Fed. Reg. 75,917 (Dep't Commerce 20 December 2004).  WT/DS277/8 
 Page 3 
 
 
 have been reached by an objective and unbiased i nvestigating authority in light of the totality 
of the evidence considered and the reas oning in the section 129 determination. 
 
• failing to demonstrate a causal relationship be tween the allegedly dumped and subsidized 
imports of Canadian softwood lumber and the th reatened injury to the domestic industry, as 
required by Article 3.5 of the AD Agreement  and Article 15.5 of the SCM Agreement ; 
 
• failing to examine in an unbiased and objectiv e manner any and all known factors other than 
the allegedly dumped imports and allegedly subsidized imports of Canadian softwood lumber 
that were injuring or threatening to injure th e domestic industry based on the record before the 
USITC, and further failing to ensure that the in juries that could be caused by these factors in 
the future were not attributed to the allege dly dumped and subsidized  imports of Canadian 
softwood lumber, as required by Article 3.5 of the AD Agreement  and Article 15.5 of the 
SCM Agreement . 
  Because the final definitive anti-dumping and countervailing duty orde rs dated 22 May 2002
13 
remain in effect pursuant to an invalid threat of  injury determination, Canada considers that the 
United States has not taken measures to comply  with the DSB's recommendations and rulings.  
Canada considers that the following measures, alle gedly taken by the United States to comply with 
the DSB's recommendations and rulings, are inconsis tent with the United States' obligations under 
Articles 3.5 and 3.7 of the AD Agreement  and Articles 15.5 and 15.7 of the SCM Agreement : 
 
• Section 129 Consistency Determ ination, Softwood Lumber fr om Canada, (24 Nov. 2004), 
Inv. Nos. 701-TA-414 and 731-TA-928; 
 
• Notice of Amendment to Antidumping and Count ervailing Duty Orders on Certain Softwood 
Lumber Products from Canada (20 Dec. 2004),14 and the 22 May 2002 orders, as purportedly 
amended by this notice. 
 
 Accordingly, as there is a disagreement with respect to the existence or consistency with 
covered agreements of the measures taken to comp ly with the DSB's recommendations and rulings, 
Canada seeks recourse to Article 21.5 of the DSU in this matter.  Therefore, Canada requests that a 
special meeting of the DSB be held on 25 Februa ry 2005 to consider the following agenda item: 
 
United States – Investigation of the Interna tional Trade Commission in Softwood Lumber 
from Canada ; 
 
Recourse by Canada to Article 21.5 of th e Understanding on Rules and Procedures 
Governing the Settlement of Disputes. 
 
 Canada requests that the DSB refer the matter to  the original panel, if possible, pursuant to 
Article 21.5 of the DSU. 
 
__________ 
 
 
                                                      
13 67 Fed. Reg 36,067 and 67 Fed. Reg. 36,070 (Dep't Commerce 22 May 2002). 
14 69 Fed. Reg. 75,917 (Dep't Commerce 20 December 2004).