WORLD TRADE  
ORGANIZATION  WT/DS277/16 
16 January 2006 
 (06-0177) 
 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
 
 
Notification of an Appeal by Canada  
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  
  
 The following notification, dated 13 January 200 6, from the Delegation of Canada, is being 
circulated to Members.  
_______________ 
 
Pursuant to paragraph 4 of Article 16 of the Understanding and Rules and Procedures 
Governing the Settlement of Disputes (the "DSU") and Rule 20 of the Working Procedures for 
Appellate Review, Canada hereby notifies its decision to appeal certain issues of law and certain legal 
interpretations covered in the Panel Report on United States – Investigation of the International Trade 
Commission In Softwood Lumber From Canada:  Recourse to Article 21.5 of the DSU by Canada  
(WT/DS/277/RW dated 15 November 2005). 
Canada seeks review by the Appellate Body of  the Panel's conclusion that the United States 
implemented the rulings and recommendations of the Dispute Settlement Body
1 and the Panel's 
findings that the November 24, 2004 threat of injury  determination by the U.S. International Trade 
Commission (USITC) was not inconsistent  with Articles 15.5 and 15.7 of the Agreement on Subsidies 
and Countervailing Measures  ("SCM Agreement")2 and Articles 3.5 and 3.7 of the Agreement on 
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994  ("AD 
Agreement").3  The Panel has erred in law and in its lega l interpretations of the applicable provisions 
of the covered agreements.  Canada therefore seeks review of the following: 
1. The Panel's failure to carry out its duty under Article 11 of the DSU to make an objective 
assessment of the matter before it, by: 
(a) failing to assess the applicability of the rele vant covered agreements to the USITC's 
determination and failing to assess the confor mity of the determination with those 
agreements, and, more specifically, by failing to apply the specific provisions of Article 3.7 of the AD Agreement and Artic le 15.7 of the SCM Agreement to the 
                                                     
 
1United States – Investigation of the International Trade Commission in Softwood Lumber from 
Canada , Recourse by Canada to Article 21.5 (DS257), Report of the Panel, WT/DS277/RW, circulated 
November 15, 2005, para. 8.2. 
2Ibid., paras. 7.57 and 8.1. 
3Ibid., paras. 7.74 and 8.1. WT/DS277/16 
Page 2  
 
findings and conclusions in the USITC determination, and as a result, failing to examine whether those findings and conclu sions were in conformity with those 
provisions;
4  
(b) declining to examine the USITC's determinati on in light of the adopted findings of the 
original panel in this dispute5;  
(c) failing to make an objective assessment of  the facts of the case by not conducting a 
detailed and searching analysis of the USITC's findings that: 
(i) there was a clearly foreseen and immi nent change in circumstances that 
would threaten injury to the domestic industry in the absence of protective measures
6; and 
(ii) there was a causal link between the subject imports and a threat of material 
injury to the domestic industry and that it was not required to conduct a non-attribution analysis
7.   
2. The Panel's failure to carry out its duties under Article 12.7 of the DSU to set out the 
applicability of relevant provisions and pr ovide a "basic rationale" for its findings.8  
3. The Panel's errors in finding that the USITC de termination was not inconsistent with Article 
3.7 of the AD Agreement and Article 15.7 of the SC M Agreement, and in particular, its failure to 
apply the requirements of those provisions that: 
(a) a threat of material injury determination must be based on a clearly foreseen and 
imminent change in circumstances which would create a situation in which the dumping or subsidy would cause injury and must be based on facts and not merely on 
allegation, conjecture or remote possibility; and 
(b) the totality of the factors considered must lead to the conclusion that further dumped 
or subsidized exports are imminent and, unless protective action is taken, material 
injury would occur.
9 
4. The Panel's errors in finding that the USITC' s conclusion that subject imports were entering 
the United States at prices likely to have adverse price effects is not inconsistent with Article 3.7 of 
the AD Agreement and Article 15.7 of the SCM Agre ement, despite the USITC's failure to conduct a 
comparison of import and domestic pric es as required by those provisions.10 
5. The Panel's errors in finding the USITC's conclusion that the volume of subject imports 
would increase substantially in the imminent future is not inconsistent with Article 3.7 of the AD 
Agreement and Article 15.7 of the SCM Agreem ent when this conclusion relied on two other 
                                                      
4Ibid., paras. 7.19 – 7.22, 7.26-7.28, 7.35 , 7.39, 7.42, 7.50-7.52, 7.55-7.57. 
5Ibid., paras. 7.12, 7.35, 7.39, 7.42.  
6Ibid., paras. 7.13, 7.35, 7.39, 7.42, 7.52. 
7Ibid., paras. 7.62-7.63. 
8Ibid., paras. 7.24-7.57. 
9Ibid., paras. 7.13, 7.19 -7.22,  7.26-7.28, 7.35, 7.39, 7. 42, 7.50-7.52, 7.55-7.57, 7.62-7.63, 7.72-7.73).   
10Ibid., paras. 7.50-7.52.  WT/DS277/16 
 Page 3 
 
 
conclusions that the DSB had already found, in the or iginal proceeding, to be inconsistent with the 
United States' WTO obligations.11  
6. The Panel's errors in finding the USITC's determ ination not inconsistent with Article 3.5 of 
the AD Agreement and Article 15.5 of the SCM Agre ement despite the failure of the USITC to: (i) 
demonstrate "a causal relationship between the dumped  or subsidized imports and the injury to the 
domestic industry";  (ii) examine "any known fact ors other than the dumped or subsidized imports 
which at the same time are injuring the domestic industry"; and (iii) properly attribute injuries caused 
by these other factors. In particular, the Panel erred by: 
(a) affirming the USITC's conclusion that th ere was a causal link between dumped and 
subsidized imports and future material in jury to the domestic industry even though 
fundamental elements of the USITC's analysis were in error;12   
(b) affirming the USITC's decision not to conduc t a non-attribution analysis based on its 
erroneous conclusion that there were no known "other causal factors" potentially 
threatening material injury to the U.S. industry;13   
(c) failing to require the USITC to separate and di stinguish the threat of injury posed by 
other sources of supply in the marketpl ace, considered both individually and on a 
cumulative basis, from the alleged threat attributed to oversupply from Canadian 
imports alone.14   
Canada respectfully requests that the Appellate  Body reverse the findings and conclusions of 
the Panel and find that the United States has failed to implement the DSB's rulings and 
recommendations.  
__________ 
 
                                                      
11Ibid., paras. 7.26-7.28, 7.35, 7.39, 7.42. 
12Ibid., paras. 7.62-7.63. 
13Ibid., paras.7.71-7.74. 
14Ibid., paras. 7.71-7.73.