WORLD TRADE  
ORGANIZATION  TN/RL/GEN/48 
30 June 2005 
 (05-2816) 
Negotiating Group on Rules Original:   English/ 
 French 
 
 
 
DISPUTE SETTLEMENT 
 
Communication from Canada  
 
 
 The following communication, dated 29 June 2005,  is being circulated at the request of the 
Delegation of Canada.   The submitting delegation has requested that th is paper, which was submitted to the Rules 
Negotiating Group as an informal document (JOB(05)/ 129), also be circulated as a formal document. 
 
_______________ 
 
  Members will recall that, at the April 2005 session of the Negotiating Group, Canada 
presented a paper on “Dispute Settlement” (circu lated as informal document JOB(05)/45 and 
document TN/RL/GEN/37).  Having had the benefit of Members’ views, Canada is submitting this 
revised version of the proposal set out in that paper.  
Original Proposal 
 
 Canada’s original submission r ested on two basic propositions, i.e: 
  1. immediately upon the application/impositi on of antidumping or countervail measures 
having been ruled by the DSB to be WTO-inconsistent, the Member concerned should be prohibited from continuing to a pply/impose such inconsistent measures; 
and 
  2. after bringing a measure found to be inconsistent with a covered agreement into 
compliance, the Member concerned shoul d be obliged to apply the compliant 
measure to all past entries and, where application of the compliant measure yielded 
lower duty liability, to refund all excess anti-dumping and/or countervailing duties 
collected pursuant to the original WTO-inc onsistent measure.  (If, however, the duty 
assessed under the compliant measure were to be greater than that imposed under the 
WTO-inconsistent measure, the diffe rence would not be collected).  
 
 Although both of these elements formed part of  Canada’s originally proposed framework of 
“special and additional” dispute settlement provision s for antidumping and countervail measures, each 
can stand largely independently of the other as a separate and distinct basis for improving existing 
antidumping and countervail rules and disciplines.  In this regard, and in light of concerns expressed 
by several delegations regarding the second element,  Canada has narrowed the scope of its original 
proposal, which it believes would continue represent a significant improvement to the status quo . 
 TN/RL/GEN/48 
Page 2  
 Revised Proposal 
 
 As explained in its original submission, Canada  believes that consideration should be given to 
the inclusion of a new provision in both the ADA and ASCM whereby, immediately upon the application/imposition of an antidumping or counter vailing measure having been ruled by the DSB to 
be WTO-inconsistent, all enforcement actions (e .g., demands for cash deposits to cover estimated 
duties, the assessment of definitive duties on prio r unliquidated entries, and the prospective 
application of definitive duties) in respect of th at measure would be suspended until such time as the 
measure was brought into compliance with the DS B’s ruling.  Because DSB recommendations and 
rulings do not enjoy direct effect in the legal sy stems of most Members, it is recognised that the 
suspension obligation would likely have to make so me allowance for a relatively brief “administrative 
period” (e.g., 30 days) to allow the domestic auth orities of a Member to effect the suspension of 
enforcement of the non-compliant measure.           In short, Members would no longer be allowe d to enforce WTO-inconsistent antidumping and 
countervail measures under cover of the reasonable pe riod of time for compliance (RPT) established 
under Article 21.3 of the DSU.
1  At the same time, however, complaining Members would still be 
precluded from seeking authorization to retaliate during th e RPT.  In order to ensure that the intent of 
this new rule was not frustrated by inadequate compliance action on the part of an implementing 
Member, a measure would only be considered WTO-compliant where:    1. the parties to the dispute agree that the measure complies with the recommendations 
and rulings of the DSB (i.e., acknowledged compliance);  
 
- or - 
 
 2. a prescribed period of time has elapsed after:  
 
  (a) a declaration of compliance to the DSB by the implementing Member, or    (b) expiration of the RPT,     without the initiation of compliance proceed ings under Article 21.5 of the DSU (i.e., 
deemed compliance);
2  
 
- or - 
  3. the DSB has adopted an Article 21.5 panel or Appellate Body report that has 
determined the measure to be compliant (determined compliance).
3 
                                                      
1 It is conceivable that certain enterprises might take advantage of this period and import massive 
amounts of the subject goods into the country only to disappear before any retroactive duty enforcement under a 
WTO-compliant measure can occur – leaving no one around to pay duties found to be properly owing.  Such 
scenarios would, of course, need to be addressed.  In this regard, Members might cons ider the appropriateness of 
providing the implementing Member with the option of requiring the posting of bonds.       
2 The prescribed period would be of sufficient duration (e.g., 60 days) to afford the complaining 
Member(s) a reasonable opportunity to assess the ad equacy of the compliance action taken.  Where the 
complaining Member decided that the compliance action wa s sufficient, the prescribed period would simply be 
allowed to lapse and the measure would be deemed compliant.  If, however, the complaining Member 
considered that the compliance action was inadequate, it wo uld have recourse to Article 21.5 of the DSU.    
3 Canada recognises that certain collateral issu es concerning the relationship between its proposed 
special/additional dispute settlement provisions and retaliation rights under Article 22 of the DSU would have to 
be clarified (e.g.: the refusal of a Member to suspen d the application of anti-dumping/countervailing measure 
after an adverse DSB ruling should deprive that Member  of the benefit of the RPT and entitle the complaining 
Member to request the immediate suspension of concessions pursuant to Article 22.2 of the DSU).  TN/RL/GEN/48 
 Page 3 
 
 
  Once the WTO-inconsistent measure was acknowle dged, deemed, or determined to have been 
brought into compliance with the DSB’s recommendations and rulings:  
  1. the complying Member would be permitte d to enforce the newly compliant measure 
retrospectively in respect of products und er consideration imported during the period 
between the beginning of the RPT a nd the date on which the measure was 
acknowledged, deemed or de termined to be compliant
4 and to take other theretofore 
suspended enforcement actions (e.g., the li quidation of prior unliquidated entries) on 
the basis of the compliant measure; and 
 
 2. excess duties collected during the brief “ad ministrative period” would be refunded.  
If, however, the duty assessed under the compliant measure were to be greater than that imposed under the WTO-inconsistent me asure during such administrative period, 
the difference would not be collected.
5 
 
Schematic Depiction of Revised Proposal  
 
    
 
    
 
     
 
    
 
 
 
 Annex A elaborates on how this revised prop osal might be implemented in the ADA and 
ASCM.   
 The above does not purport to address all of Canada’s concerns with respect to dispute 
settlement and it reserves the right to make further submissions on the subject. 
                                                     
 
4 In accordance with Article 9.1 of the ADA and Artic le 19.2 of the ASCM, the decision whether or not 
to impose duties, once the requirements for their imposition had been properly fulfilled, and the decision whether the amount would be the full amount or less, woul d remain decisions of the authorities of the importing 
Member.    
5 This would be based on reasoning consistent with that underlying Articles 10.3 of the ADA and 20.3 
of the ASCM on the retroactive application of definitive antidumping and countervailing duties for the period 
during which provisional measures were imposed.   Original 
Implementation 
of Antidumping 
or Countervail 
Measure 
 
Adverse    
DSB       
Ruling Measure is 
Acknowledged 
Deemed or 
Determined to 
be WTO-
Compliant  
ADMINISTRATIVE 
PERIOD 
(If Required)  
Application of 
WTO-Compliant 
Measure Refund of 
Excess 
Duties 
CollectedRPT 
Suspension of 
Enforcement Period  Suspension of 
Enforcement Period      
(If Administra tive Period 
Required) TN/RL/GEN/48 
Page 4  
  
ANNEX A 
 
 A. AMEND ARTICLE 17 OF THE ADA AS FOLLOWS: 
 
17.8 Subject to paragraph 9, upon a ruling by the DSB that the application of an antidumping 
measure is inconsistent with Article VI of GATT 1994 and the terms of this Agreement, the Member 
concerned shall immediately suspend the app lication of that inconsistent measure. 
 17.9 Where the immediate suspension of application of  the inconsistent measure is impractical, the 
Member concerned may avail itself of an administ rative period, which shall not exceed 30 days from 
the date of the DSB ruling referred to in paragraph 8, to effect the suspension of application of the 
inconsistent measure.   17.10  Prompt compliance with the recommendations or rulings of the DSB, within the meaning of 
Article 21 of the DSU shall, unless otherwise agreed to  by the disputing parties, be deemed to have 
occurred:    (i) after a period of 60 days from either:    (a) a declaration of compliance made by the Member concerned to the DSB; or  
 
  (b) the expiration of the reasonable period  of time referred to in Article 21.3 of 
the DSU; 
   provided that a party to the dispute has not initiated compliance proceedings under 
Article 21.5 of the DSU before the expiration of such period. 
 
- or - 
 
 (ii) upon adoption by the DSB of the report of a panel, and of the Appellate Body on 
appeal, concerning the existence and cons istency with a covered agreement of 
measures taken to comply with the recomme ndations and rulings of the DSB, within 
the meaning of Article 21.5 of the DSU.    
 17.11  A Member may apply an antidumping measure  that is deemed to be compliant under 
paragraph 10, to all importations of the product made subsequent to the DSB ruling referred to in 
paragraph 8.   
 17.12 Antidumping duty amounts collected during the administrative period referred to in 
paragraph 9 that are in excess of the amount of antidumping duty payable under a measure that is deemed to be compliant under para graph 10, shall be refunded.   
 
17.13 Where the amount of the antidumping duty payable under a measure that is deemed to be 
compliant under paragraph 10 is higher than the am ount actually collected during the administrative 
period referred to in paragraph 9, the difference shall not be collected.  B. AMEND PART V OF THE ASCM AS FOLLOWS:  
[New] 24.1  Subject to paragraph 2, upon a ruling by the DSB that the imposition of a 
countervailing measure is incons istent with Article VI of GATT 1994 and the terms of this 
Agreement, the Member concerned shall immediat ely suspend the imposition of that inconsistent 
measure.  TN/RL/GEN/48 
 Page 5 
 
 
  
24.2 Where the immediate suspension of imposition of the inconsistent measure is impractical, the 
Member concerned may avail itself of an administ rative period, which shall not exceed 30 days from 
the date of the DSB ruling referred to in paragraph 1, to effect the suspension of the imposition of the 
inconsistent measure.  
 
24.3 Prompt compliance with the recommendations or rulings of the DSB, within the meaning of 
Article 21 of the DSU, shall, unless otherwise agreed to by the disputing parties, be deemed to have 
occurred:   
 (a) after a period of 60 days from either: 
   (i) a declaration of compliance made by the Member concerned to the DSB; or     (ii) the expiration of the reasonable period  of time referred to in Article 21.3 of 
the DSU; 
   provided that a party to the dispute has not initiated compliance proceedings under 
Article 21.5 of the DSU before the expiration of such period; 
 
- or - 
 
  (b) upon adoption by the DSB of the report of the panel, and of the Appellate Body on 
appeal, concerning the existence and cons istency with a covered agreement of 
measures taken to comply with the recomme ndations and rulings of the DSB within 
the meaning of Article 21.5 of the DSU.    
 24.4 A Member mayimpose a countervailing measure th at has been deemed to be compliant under 
paragraph 3 on all importations of the product made subsequent to the DSB ruling referred to in 
paragraph 1.   
24.5 Countervailing duty amounts collected during the administrative period referred to in 
paragraph 2 that are in excess of the amount of  the countervailing duty payable under a measure 
deemed to be compliant under para graph 3, shall be refunded.   
 24.6 Where the amount of the countervailing duty payable under a new measure deemed to be 
compliant under paragraph 3 is higher than the am ount actually collected during the administrative 
period referred to in paragraph 2, the difference shall not be collected.   
__________