. /.  WORLD TRADE  
ORGANIZATION  WT/DS277/9 
15 February 2005  
 
(05-0638) 
 Original:   English 
   
UNITED STATES – INVESTIGATION OF THE INTERNATIONAL 
TRADE COMMISSION IN SOFTWOOD LUMBER FROM CANADA 
 
Recourse to Article 22.2 of the DSU by Canada
 
  
 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 22.2 of the DSU. 
 
_______________ 
  
 Canada requests that a special meeting of th e Dispute Settlement Body (DSB) be held on 
25 February 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 22.2 of th e Understanding on Rules and Procedures 
Governing the Settlement of Disputes 
 
 The Panel in this dispute concluded that th e US International Trade Commission's (USITC) 
finding of a likely imminent substantial increase in softwood lumber imports from Canada was not 
one which could have been reached by an objective and unbiased investigating authority in light of 
the totality of the factors and the reasoning in the USITC determination.  On this basis, the Panel 
concluded that the USITC determination was not consis tent with the requirements of Article 3.7 of the 
Agreement on Implementation of Article VI of  the General Agreement on Tariffs and Trade 1994 
("AD Agreement") and Article 15.7 of the Agreement on Subsidies and Countervailing Measures 
("SCM Agreement").   
  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 findi ng of an imminent substantial increase in 
imports.   
  In addition, the Panel found that in the absen ce of a WTO-consistent causation finding, it was 
not necessary or appropriate to make findings with r espect to whether the ITC attributed the injuries 
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. 
 WT/DS277/9 
Page 2  
 
 On 26 April 2004, the DSB adopted the Panel Report.  The United States stated that it intended to implement the DSB' s recommendations and rulings. 
  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" of nine months for th e United States to implement the recommendations 
and rulings of the DSB.  That period of time expi red on 26 January 2005.  Ca nada considers that the 
United States has failed to comply with the DSB's recommendations and rulings  within the reasonable 
period of time provided.    
 Therefore, pursuant to Article 22.2 of the DSU,  Canada requests the authorization of the DSB 
to suspend the application to the United States of its concessions or other obligations, in an amount 
representing the total amount of countervailing and anti-dumping duty cash deposits collected and not 
refunded as a result of the United States' failure to properly implement the DSB's recommendations and rulings ( i.e. the United States' failure to revoke th e countervailing and anti-dumping duty orders 
of 22 May 2002)
1.  To date, this amount is approximately $CAD 4.25 billion .  For the year 2005, the 
level of suspension of concessions should, therefore, equal this amount.  In subsequent years, the level 
of suspension of concessions will equal the am ount of total countervailing and anti-dumping duty 
cash deposits collected and retained on the annive rsary date of the filing of this request.  
  This level of suspension is equivalent to the level of nullification and impairment of benefits 
accruing to Canada that results from the United Stat es' failure to bring its measures into compliance 
with its WTO obligations.   Canada intends to suspend tariff con cessions and related obligations under the General 
Agreement on Tariffs and Trade 1994  by imposing additional impor t duties above bound custom 
duties on products originating in the United States.  For each year in which Canada intends to take 
such measures, Canada will notify the DSB of the amount of duties improperly collected and retained 
by the United States during the prior year and of the level of the duties it will impose on selected products.  
__________ 
 
 
                                                     
 
1 67 Fed. Reg 36,067 and 67 Fed. Reg. 36,070 (Dep't Commerce 22 May 2002)