RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/DSB/M/202 
1 February 2006 
 (06-0440) 
Dispute Settlement Body 
20 December 2005  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 20 December 2005  
 
Chairman:  Mr. Eirik Glenne (Norway) 
 
 
Subjects discussed : Page  
 
1. Implementation of the reco mmendations of the DSB............................................................1  
(a) United States – Anti-dumping measures on oil country tubular goods (OCTG) from 
Mexico ......................................................................................................................... ...............2  
(b) Korea – Anti-dumping duties on imports of certain paper from Indonesia ................................2  
2. Mexico – Definitive anti-dumping measures on beef and rice:  Complaint with 
respect to rice ................................................................................................................ ............2  
(a) Report of the Appellate Body and Report of the Panel...............................................................2  
3. United States – Final countervailing duty determination with respect to certain 
softwood lumber from Canada:  Recourse by Canada to Article 21.5 of the DSU.............7  
(a) Report of the Appellate Body and Report of the Panel...............................................................7  
4. United States – Sunset reviews of anti-dumping measures on oil country tubular 
goods from Argentina........................................................................................................... ..10 
(a) Statement by the United States ................................................................................................. 10 
 
 1. Implementation of the recommendations of the DSB 
(a) United States – Anti-dumping measures on oil country tubular goods (OCTG) from Mexico 
 (b) Korea – Anti-dumping duties on imports of certain paper from Indonesia  1. The Chairman
 recalled that in accordance with the DSU provisions, the DSB was required to 
keep under surveillance the implementation of reco mmendations and rulings of the DSB in order to 
ensure effective resolution of disputes to the benefit of all Members.  In that respect, Article 21.3 of 
the DSU provided that the Member concerned shall in form the DSB, within 30 days after the date of 
adoption of the panel or Appellate Body report, of its intentions in respect of implementation of the 
recommendations and rulings of the DSB.  He then proposed that the two sub-items to which he had 
just referred be considered separately. WT/DSB/M/202 
Page 2  
 
  (a) United States – Anti-dumping measures on oil country tubular goods (OCTG) from Mexico 
2. The Chairman
 recalled that at its meeting on 28 November 2005, the DSB had adopted the 
Appellate Body Report pertaining to the dispute:   "United States – Anti-Dumping Measures on Oil 
Country Tubular Goods (OCTG) from Mexico" and th e Panel Report on the same matter, as modified 
by the Appellate Body Report.  He invited the Unit ed States to inform the DSB of its intentions in 
respect of implementation of the DSB's recommendations pertaining to this dispute. 
3. The representative of the United States  said that his country intended to implement the 
recommendations and rulings of the DSB in a manner that respected US WTO obligations.  The United States had already begun discussions as to how  to do that.  The United States would need a 
reasonable period of time in which to implement.   The United States stood ready to consult with 
Mexico regarding a reasonable period of time to implement. 
4. The DSB took note
 of the statement and of the information provided by the United States 
regarding its intentions in respect of implementation of the DSB's recommendations. 
(b) Korea – Anti-dumping duties on imports of certain paper from Indonesia 
5. The Chairman  recalled that at its meeting on 28 November 2005, the DSB had adopted the 
Panel Report pertaining to the dispute:  "Korea – Anti-Dumping Duties on Imports of Certain Paper 
from Indonesia".  He then invited Korea to info rm the DSB of its intentions in respect of 
implementation of the DSB's recommendations. 
6. The representative of Korea  said that at the 28 November 2005 meeting, the DSB had adopted 
the recommendations and rulings in the dispute on anti-dumping duties imposed by Korea on imports 
of certain paper from Indonesia.  As stated at that  meeting, Korea intended to fully implement these 
recommendations and rulings.  However, in order to  undertake the necessary steps, Korea would need 
a reasonable period of time.  In accordance with Artic le 21.3(b) of the DSU, Korea was ready to enter 
into discussions with Indonesia on the appropriate  duration of that reasonable period of time. 
7. The representative of Indonesia  said that his country thanked Korea for the statement made at 
the present meeting regarding its intentions in respect of the implementation of the DSB's 
recommendations and rulings in the "Korea – Pa per" dispute.  Indonesia noted that proper 
implementation in this case would require termination of the measures at issue.  Indonesia would consider Korea's statement carefully in this re gard.  Indonesia noted that the DSU called for 
immediate implementation of the DSB's recommendati ons and rulings, and if this was impracticable, 
for a reasonable period of time in which to do so.  Indonesia looked forward to entering into bilateral 
discussions regarding such a reasonable period of time, and noted that immediate implementation 
appeared to be appropriate in this case.  In the meantime, Indonesia reserved its rights under 
Articles 21 and 22 of the DSU. 
8. The DSB took note
 of the statements, and of the inform ation provided by Korea regarding its 
intentions in respect of implementation of the DSB's recommendations. 
2. Mexico – Definitive anti-dumping measures on beef and rice:  Complaint with respect to 
rice 
(a) Report of the Appellate Body (WT/DS295/AB /R) and Report of the Panel (WT/DS295/R) 
9. The Chairman  drew attention to the communication from the Appellate Body contained in 
document  WT/DS295/8 transmitting the Appellate Body Report on:  "Mexico – Definitive Anti-
Dumping Measures on Beef and Rice:  Complaint with  Respect to Rice", which had been circulated  WT/DSB/M/202 
 Page 3 
 
 
  on 29 November 2005 in document WT/DS295/AB/R, in  accordance with Article 17.5 of the DSU.  
He reminded delegations that the Appellate Body Report and the Panel Report pertaining to this 
dispute have been circulated as unrestricted documents.  He recalled that Article 17.14 of the DSU required that:  "An Appellate Body report sha ll be adopted by the DSB and unconditionally accepted 
by the parties to the dispute unless the DSB decid es by consensus not to adopt the Appellate Body 
report within 30 days following its circulation to  Members.  This adoption procedure is without 
prejudice to the right of Members to express their views on an Appellate Body report". 
10. The representative of the United States
 said that his country wished to begin by thanking the 
Panel, the Appellate Body, and the Secretariat for th eir hard work in this dispute.  Turning to the 
substance of the Reports before the DSB at the pr esent meeting, he noted that these were solid and 
well-reasoned Reports, and the United States fully supported their adoption.  The United States was 
pleased that the Panel and the Appellate Body ha d found that both the anti-dumping measure on long-
grain white rice and certain provisions of Mexico 's law were inconsistent with WTO rules in 
numerous ways.  For example, the United States welcomed the finding that Mexico had acted inconsistently with the Anti-Dumping Agreement wh en it had based its injury determination on a 
period of investigation that ended more than 15 months before the initiation of the investigation.  As 
the Panel had correctly found, a Member conducting an anti-dumping investigation must, to the extent 
possible, examine the most recent information available. 
11. The United States also welcomed the finding that Mexico had breached the Anti-Dumping 
Agreement when it limited its injury analysis to onl y six months of each of the three years in the 
period of investigation.  Mexico had taken that approach because the petitioning industry had asked it 
to examine only the period of each year when imports  were at their highest.  A Member must examine 
all relevant information before it, and not just that  portion of the information that would lead to the 
result it sought.  The United States was also pleased by the finding that Mexico had acted inconsistently with Article 5.8 of the Anti-Du mping Agreement by refusing to terminate the 
investigation of two US exporters that were not  dumping and by failing to exclude those exporters 
from the application of the anti-dumping measure.  If  an investigating authority examined an exporter 
and found that it was not dumping, there was no basi s to include the exporter in the anti-dumping 
measure. 
12. The United States also welcomed the finding th at Mexico had acted inconsistently with 
Article 6.8 and Annex II of the Anti-Dumping Agreemen t.  Mexico had applied the facts available to 
numerous US exporters and producers, even though it had never given them notice of the information 
that they needed to provide.  The Anti-Dumping Agreement did not allow an investigating authority 
to use the facts available in such cases.  Finally, th e United States also welcomed the findings that six 
provisions of Mexico's Foreign Trade Act were inconsistent "as such" with the Anti-Dumping 
Agreement and the Subsidies Agreement.  Seve ral of those provisions had codified the WTO-
inconsistent methodologies that Mexico had used in  the rice investigation.  Another required Mexico 
to fine companies if they imported products that we re the subject of anti-dumping investigations.  The 
Anti-Dumping Agreement and the Subsidies Agreement did not permit such actions. 
13. There was one aspect of the Appellate Body's  Report that caused the United States some 
concern and that it wanted to bring to Members' at tention.  The finding that new legal claims in a 
panel request must "evolve from" the legal claims in  the consultation request was troubling.  This test 
was inherently subjective.  The result of the additiona l exchange of views in c onsultations might be to 
bring to the complaining party's attention a claim th at was not previously apparent.  The United States 
asked:  "Why should the complaining party be c onstrained from following up on this claim in any 
panel proceedings?".  Any other result would a ppear to undercut the reason for and value of 
consultations. WT/DSB/M/202 
Page 4  
 
  14. Nevertheless, overall, the United States considered  this to be a strongly reasoned Report.  The 
United States looked forward to Mexico bringing its anti-dumping measure and law into conformity 
with its WTO obligations. 
15. The representative of Mexico
 said that his delegation welcomed the opportunity at the present 
meeting to present Mexico's views on the outcome of  this dispute under cons ideration, and thanked 
the Panel, the Appellate Body and the Secretariat fo r their work.  Mexico's purpose in its statement to 
be made at the present meeting was not to go back over the details of its arguments, but to emphasize 
the essential points which, in Mexico's view, shoul d be considered by the DSB when adopting the 
Reports of the Panel and the Appellate Body.   The Appellate Body had held that to read the legal 
basis set out in the panel request as being limited to what had been indicat ed in the request for 
consultations would ignore an important rationale behind the re quirement to hold consultations, 
namely the exchange of information necessary to refine  the contours of the dispute.  It had also held 
that the addition of provisions in the panel request must not have the effect of changing the essence of 
the complaint.  Mexico considered that this point  of view did not fully reflect the rationale behind 
consultations as envisaged in the DSU.  While it was true that an exchange of information had taken 
place during consultations, that exchange was not aime d at refining the contour of the dispute so as to 
improve the way in which they had been presented in  the panel request.  If that were the only function 
of consultations, the country which applied the me asure would obviously be encouraged to provide 
absolutely no information in the consultations, in  violation of its obligation to seek an agreed 
settlement. 
16. Consultations had a much broader purpose, as provided in the DSU.  They constituted the 
stage at which the parties should attempt to achie ve a satisfactory settlement, and only if no such 
settlement was achieved the establishment of a panel mi ght be requested.  In that connection, Mexico 
did not see how it was possible to achieve a mutua lly acceptable settlement if the complaining party 
had not identified all the articles allegedly violated  and the reasons.  It was not humanly possible to 
resolve a dispute if the claims and the alleged violations of WTO Agreements were not known. 
17. With regard to the anti-dumping investigation on imports of long-grain white rice from the 
United States,  Mexico disagreed w ith the findings of the Panel and th e Appellate Body with regard to 
the injury determination.  Mexico did not agree w ith the Appellate Body's finding that the Panel had 
not exceeded its terms of reference.  In Mexico's  opinion, the Panel had not confined itself to the 
matter referred to it and had undertaken an analysis  that had gone beyond what was requested by the 
United States, reconstructing that country's ar gument in a manner different from the original 
argument, thereby clearly exceeding its terms of reference.  However, the Appellate Body had 
confirmed those findings. 
18. It should also be pointed out that no provision of the Anti-Dumping Agreement indicated 
which period of investigation was to be used or how remote that period should be.  Accordingly, the 
remoteness of an investigation period could not be considered per se  to imply a violation of 
Article 3.1 of the Anti-Dumping Agreement.  Ther e were no defensible gr ounds for the Appellate 
Body to determine – despite the absence of any US claim to the effect that the data used by the 
investigating authority did not in themselves c onstitute positive evidence – that the investigation 
period was inconsistent with the WTO Agreemen ts because of its remoteness. Moreover, the 
Appellate Body had found that the Panel had not exceeded its terms of reference when it had 
concluded that Mexico acted inc onsistently with the Anti-Dumping Agreement in calculating a facts 
available-based dumping margin for a US firm.  In that connection, the Appe llate Body had failed to 
deal with Mexico's argument that the United Stat es had not claimed that the calculation was in breach 
of the Anti-Dumping Agreement.  Indeed, accord ing to the US claim, the Panel should have 
determined whether the calculation of that dumping margin on the basis of the facts available – and 
not on Article 9.4 of the Anti-Dumping Agreement – was in breach of the Anti-Dumping Agreement, 
regardless of how the facts available were a pplied, since that was not the matter under its  WT/DSB/M/202 
 Page 5 
 
 
  consideration.1  However, the Panel had exceeded its te rms of reference and had found that the 
application of the facts available was inconsistent  with the Anti-Dumping Agreement, and that had 
been confirmed by the Appellate Body.  For these reasons, Mexico could not agree with the 
Appellate Body's findings. 
19. Furthermore, the Appellate B ody's determination that the United States had established a 
prima facie case of violation of the WTO Agreements  by the challenged articles of the Foreign Trade 
Act (FTA) was unsustainable in Mexico's view.  Mexico did not understa nd how it could be argued 
that it was enough for the United States to present th e text of the challenged FTA articles in order for 
it to be held that the United States had establis hed a prima facie case, even though – as had been 
pointed out repeatedly – the very text of the FTA (Ar ticle 2) provided that all the other articles of that 
Act shall apply when they were not inconsistent w ith the WTO Agreements.  In other words, Mexico 
failed to see how it could be determined that the te xt of the articles was sufficient to establish a prima 
facie case of violation, despite the fact that the te xt of the FTA stated that the Articles in question 
were not mandatory.  The United States should have  presented other evidence to support its claim, 
such as evidence of their applica tion, interpretations by domestic  courts etc, as required by the 
Appellate Body itself in other disputes. 
20. With regard to the importance of Article 2 of the FTA in terms of the meaning of the articles 
challenged by the United States, Mexico wished  to make the following observations:  (i) The 
Appellate Body had found that it could not agree w ith Mexico's claim that the Panel had disregarded 
Article 2 of the FTA.  However, it had also found that  Mexico did not challenge the fact that the Panel 
had rejected the importance of the above-mentione d Article.  Mexico, therefore, questioned how it 
was possible to state that Mexico had claimed that  the Panel had disregarded Article 2, and at the 
same time to argue that, when th e Panel had refused to take that article into account, Mexico had not 
challenged that refusal.  This was incomprehens ible;  (ii) Mexico understood the importance of 
specifying the articles that constituted grounds for a cl aim, but considered it to be going too far for the 
Appellate Body, merely because  they were not men tioned, to avoid consider ing them and definitively 
decide not to rule on the subject, even though th ese were key aspects of the dispute.  This was in 
marked contrast with the way in which the Appellate  Body had held that a prima facie case had been 
established that the articles of the FTA were in consistent with the WTO Agreements.  Mexico 
considered it utterly unjustifiable for the Appellate Body, on the basis of a mere technicality, to avoid 
looking into an essential aspect of a dispute. 
21. Mexico considered that neither the Panel nor the Appellate Body had taken into account the 
fact that the articles of the FTA were to be inte rpreted in accordance with Article 2 of that Act, 
inasmuch as the latter article determined the scope of all the other articles of the FTA.  Thus, the 
Appellate Body had taken no account of the fact that  the FTA articles challenged by the United States 
were not mandatory rules and nevertheless had held th at they were inconsistent as such with the WTO 
Agreements.  Mexico considered that the Appellate Bo dy had failed to take into account the fact that, 
as was established in the final Panel report in "US – Certain EC  Products" , the elements of legislative 
provisions that were challenged were  frequently inextricably linked and should not be interpreted in 
isolation.  Furthermore, Mexico noted that, as explai ned in its appellant submission, the United States 
had argued that the challenged articles of the FT A were inconsistent with the WTO Agreements 
                                                      
1 Mexico observed that the Panel had correctly re jected the US claim that the "all others" margin 
should have been calculated in accord ance with Article 9.4 of the Anti-Dumping Agreement.  In rejecting that 
claim, it should have found that the US argument was groundless and that it could not therefore be determined 
that Mexico had breached the Anti-Du mping Agreement in the manner allege d by the United States.  However, 
the Panel had gone beyond its terms of reference by considering whether Mexico had calculated the dumping margin for producers of rice in acco rdance with Article 6.8 and Annex II  of the Anti-Dumping Agreement, 
which had not been claimed by the United States. WT/DSB/M/202 
Page 6  
 
  because they were mandatory.  Thus , in accordance with its terms of reference, the Panel should have 
examined whether those articles were really mandato ry, a task which it had not adequately performed. 
22. Similarly, the Appellate Body ha d failed to take into account th e standard applied in the final 
Report in the case referred to above and had not c onsidered it necessary to ascertain whether those 
articles were really mandatory, pursuant to Article  2 of the FTA, even though this was a crucial 
element of the dispute, and a key aspect of the Pa nel's terms of reference. Mexico had submitted 
numerous arguments on that point to the Panel but the latter, in its Report, mere ly "took note" of those 
arguments and referred to them in a footnote withou t duly analysing them.  Mexico had raised the 
entire matter with the Appellate Body, claiming that the Panel had disregarded its arguments;  but the 
Appellate Body's only response – and a surprising one – was to hold that on the basis of those very 
brief references, the Panel had had in fact taken account of Mexico's arguments. This was 
incomprehensible.  The Panel's analysis was virtua lly non-existent and if it had given any additional 
consideration to the matter, it had done so only in its  own mind, since that had not been reflected in 
the Report.  Mexico did not understand how the Ap pellate Body could argue that by merely "taking 
note" of Mexico's arguments the Panel had taken th em into account and had analysed them in their 
entirety. Similarly, as was explained in Mexico's written submission, on the basis of its actual content 
and irrespective of Article 2 of the FTA, each and every one of the articles challenged by the United 
States should in Mexico's view be considered to be consistent with the WTO Agreements. For the 
above reasons, Mexico did not agree with the findi ngs and conclusions of the Panel and the Appellate 
Body.   Nevertheless, Mexico associated itself with  other Members at the present meeting in adopting 
the Reports of the Panel and the Appellate Body. 
23. The representative of th e European Communities
 said that the EC welcomed the Panel's and 
the Appellate Body's findings that the investiga ting authority did not have a boundless discretion in 
the selection of the investigation period.  If data from a past period might be used to draw conclusions 
on the present, clearly too outdated data could not a priori provide a reliable basis for imposing an 
anti-dumping measure.  The purpose of such measure was not to punish exporters for past dumping, 
but to offset or prevent dumping that was occurring.   And, there must, consequently be a limit on the 
time gap that might exist between the end of the inv estigation period and the initiation of the original 
investigation. 
24. The EC also fully supported the Panel's and the Appellate Body's conclusions that the 
investigating authority might not make selective us e of the information gathered and thus produce an 
inaccurate picture of the situation it  was due to investigate.  If an i nvestigating authority had identified 
a certain period as relevant to its determination, it could not subsequently take the position that some 
segments of that period or some information pertai ning to that perk were no longer relevant.  The 
selective use of data without reason duly justifie d in regards of the Anti-Dumping Agreement ran 
against the investigating authorit y's obligation to establish the facts in a fair and unbiased manner. 
25. Finally, the EC wished to mark its disagreeme nt with two conclusions reached in the present 
dispute.  The first concerned the finding that Article 5.8 of the Anti-Dumping Agreement required 
terminating the investigation respect of every exporter found not to dump or to dump below de 
minimis level.  The EC would not repeat the ar guments it had presented before the Panel and the 
Appellate Body, but would stress again that Article  VI of  GATT 1994 as well several provisions of 
the Anti-Dumping Agreement all supported that th e investigation was country-wide.  There was 
nothing like several investigations specific to each exporter that would have to be terminated on 
finding of de minimis  dumping level. 
26. The Appellate Body had accepted that there was a single investigation and yet it had 
concluded that Article 5.8 applie d at exporter level because it would require termination of that 
investigation in respect of individual exporter or producer with de minimis  levels of dumping.  The 
EC did not see how this was supported by the text of  Article 5.8.  Article 5.8 did not say that the  WT/DSB/M/202 
 Page 7 
 
 
  investigating authority had to terminate "an investigati on in respect of".  What shall be terminated was  
"an investigation", i.e. an investigation that was single and country-wide.  In the EC's opinion, that 
simply meant that Article 5.8 only required such termination vis-à-vis  the country when the country-
wide dumping margin was de minimis . 
27. Further, on a practical aspect, the exclusion of certain exporters from the scope of the measure 
and of reviews that might be pursued later created a potential loophole and, it was not clear to the EC 
how such a situation could effectively be remedi ed.  The EC was also puzzled by the Appellate 
Body's finding that the investigating authority might not use facts available vis-à-vis  exporters that 
were unknown to the investigating authority.  By de finition, the investigating authority did not have 
any information on those exporters.  In such circum stances, what else than facts available could be 
used? 
28. The representative of Hong Kong, China  said that her delegation wished to thank the 
Appellate Body, the Panel and the Secretariat for th eir work pertaining to this dispute. Hong Kong, 
China welcomed the Appellate Body's and the Pane l's decisions as useful in clarifying certain 
obligations when conducting an anti-dumping inv estigation under the Anti-Dumping Agreement 
(ADA), including in respect of the following:  (i ) that "positive evidence" required evidence to be 
relevant and pertinent with respect to the issue to  be decided, and "objective examination" required 
the investigation process establishing the facts to be  objective and unbiased;  (ii) that the requirement 
to conduct an "objective examination" required the in jury analysis to be based on data which provided 
an accurate and unbiased picture of what was being ex amined;  (iii) that the use of "facts available" 
against an exporter who was not given notice of the information required by the investigating 
authority, was contrary to Article 6.8 and paragr aph 1 of Annex II of the ADA.  Hong Kong, China 
further noted the Panel's statement that Article  6.8 of the ADA was not intended to operate as 
punishment; that the last sentence of paragraph 7 of Annex II merely stated the obvious; and that 
"facts available" must nevertheless be the most a ppropriate information and best suited to replacing 
the missing data (para. 7.238 of the Panel Report) ;  and (iv) that the right to a review under 
Articles 9.3 and 11.2 of the ADA, could not be cond itioned on a requirement to show "representative" 
volume of export sales during the relevant period. 
29. The practice and interpretation subject to the dispute under consideration was not specific to 
this case, but had been shared by a number of other users of the anti-dumping instrument.  Hong Kong, China believed that the Panel and the Appella te Body Reports would provide useful guidance 
to all Members in ensuring the fair and proper co nduct of anti-dumping inves tigations.  With these 
observations, Hong Kong, China supported the adoption of the Panel and the Appellate Body Reports. 
30. The DSB took note
 of the statements, and adopted  the Appellate Body Report contained in 
WT/DS295/AB/R and the Panel Report contained in WT/DS295/R, as modified by the Appellate 
Body Report. 
3.  United States – Final countervailing duty determination with respect to certain 
softwood lumber from Canada:  Recourse by  Canada to Article 21.5 of the DSU  
(a) Report of the Appellate Body (WT/DS 257/AB/RW) and Report of the Panel 
(WT/DS257/RW)  
31. The Chairman  drew attention to the communication from the Appellate Body contained in 
document WT/DS257/24 transmitting the Appellate Body Report on:  "United States – Final 
Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada:  
Recourse by Canada to Article 21.5 of the DSU", which had been circulated on 5 December 2005 in 
document WT/DS257/AB/RW, in accordance with Article  17.5 of the DSU.  He reminded delegations 
that, the Appellate Body Report and the Panel Report pertaining to this dispute had been circulated as WT/DSB/M/202 
Page 8  
 
  unrestricted documents.  He recalle d that Article 17.14 of the DSU re quired that:  "An Appellate Body 
report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 30 days following its circulation to Members.  This adoption procedure is without prejudice to the right of Members to 
express their views on an Appellate Body report". 
32. The representative of Canada
 said that his country wished to thank the Panel, the Appellate 
Body, and the Secretariat for their work to reso lve this ongoing dispute between Canada and the 
United States concerning the US final countervaili ng duty determination on softwood lumber.  
Canada welcomed the Panel and th e Appellate Body's findings that the United States had failed to 
properly implement the DSB's rulings and recomme ndations and, therefore, continued to presume 
subsidization in violation of its obligation under the GATT 1994 and the SCM Agreement to conduct 
a pass-through analysis.  As a result of these Article 21.5 DSU proceedings, the Panel had  also concluded, and the Appellate Body  had agreed, that the United States might not use its domestic 
"administrative review" proceedings as a means to avoid compliance with the DSB's 
recommendations and rulings. 
33. He noted that over three years had passed sin ce the United States first imposed countervailing 
and anti-dumping duties on Canadian softwood lumb er exports. The US failure to respect its 
international trade obligations rega rding these duties was not inconseque ntial.  In fact, the Canadian 
lumber industry had paid over Can$5 billion (over US $4 billion) in cash deposits to the United States 
to date.  These illegal duties had nullified and impa ired benefits accruing to Canada under the WTO 
Agreement, causing a tremendous negative impact on hundreds of companies, thousands of workers 
and hundreds of communities across Canada. Canada called on the United States to bring its measures 
into conformity with its WTO obligations.  Finally , Canada requested that the DSB adopt the Panel 
and the Appellate Body Reports in this matter and recommend that the United States bring its 
measures into conformity. 
34. The representative of the United States
 said that his country wished to thank the Panel, the 
Appellate Body, and the Secretariat for their efforts in this dispute.  By way of background, he 
recalled that on 17 February 2004, the DSB had adopted the recommendations and rulings in this 
dispute that had rejected, in all major respects,  Canada's claims that the United States acted 
inconsistently with the Subsidies Agreement a nd the GATT 1994 in finding that Canada had provided 
countervailable subsidies to its softwood lumber industry.  Referring to one minor aspect of the 
subsidy calculation, however, the DSB had ruled th at the United States should have investigated 
whether there had been a "pass-through" of subsid ies between unrelated companies through the arm's 
length sale of logs.  The United States had implem ented that ruling on 10 December 2004, with a new 
countervailing duty determination.  It was this implementation that was the subject of the Reports 
before the DSB at the present meeting. 
35. The United States had two comments.  First, in implementing the DSB's recommendations 
and rulings, the United States had followed the wo rds of the Appellate Body's findings exactly, 
conducting a pass-through analysis for log sales between unrelated parties that it had found to be at arm's length.  Nevertheless, the Article 21.5 complia nce panel had found that, despite the fact that the 
DSB had adopted the Panel report as modified by the Appellate Body Report, the United States 
should have followed the panel's wording and conduct ed a "pass-through" analysis for all unrelated 
party sales, and not just for those found to be at "arm's length". The Article  21.5 compliance panel had 
acknowledged what it called a "significant ambiguity " in the recommendations and rulings, and had 
stated that it understood that the United States was si mply giving meaning to the Appellate Body's use 
of the term "arm's length."  Howe ver, the Panel had found that a different reading – one that ignored 
the explicit reference to "arm's length" in the recommendations and ruling – was the appropriate one. 
The United States had not appealed that finding. Ho wever, the United States noted that this dispute 
illustrated the value of clarity in recommendations a nd rulings.  This was one of the reasons that the  WT/DSB/M/202 
 Page 9 
 
 
  United States had proposed that there be an opportun ity to seek clarification of proposed findings and 
recommendations. 
36. Second, the United States was disappointed that the Appellate Body had found that a separate 
assessment review was properly within the complia nce panel's jurisdiction under Article 21.5 of the 
DSU.  The United States would not repeat all of its arguments at this point, but it failed to follow the 
Appellate Body's reasoning.  The Appellate Body first noted that the question of existence or 
consistency of measures taken to comply might be affected by measures other than the one declared to be the one taken to comply.  This seemed unremarka ble.  However, from this the Appellate Body had 
then progressed to say that, therefor e, measures that were sufficiently linked to those taken to comply 
were within the scope of Article 21.5 of the DSU.  Yet the Appellate Body ha d not explained how this 
followed – it had not clearly articulated how th e "linkage" it had found had an effect on the 
consistency or existence of a meas ure taken to comply.  The Appella te Body's reasoning, therefore, 
risked being interpreted as a re-write of Article 21. 5 to read "measures taken to comply or measures 
linked to measures taken to comply."  There w ould be no textual basis for that conclusion. 
37. The United States also wished to note the importa nce of two aspects of that finding.  The first 
was that both the compliance Panel and the Appellate Body had found only that a specific, discrete 
component of the first assessment review, and not the review in its entirety, fell within the scope of 
the Article 21.5 proceeding.  The second was the Appe llate Body's emphasis that its reasoning applied 
only to the first assessment review  and that it was not finding that any other measure should be within 
the jurisdiction of an Article 21.5 compliance pa nel.  Article 21.5 proceedings were expedited 
proceedings that were limited to the existence and consistency of measures taken to comply, and great 
care must to be taken to ensure that panels  did not exceed this jurisdictional limitation. 
38. The representative of th e European Communities
 said that the EC welcomed particularly the 
Panel and the Appellate Body's findings that the assessment review conducted by the United States 
might be referred to a compliance panel in the appli cation of Article 21.5 of the DSU.  This was the 
correct reading of Article 21.5.  Furthermore, from a systemic point of view, accepting the US 
position that the results of such reviews were separ ate measures that could only be challenged in a 
new proceeding would have created a loophole seri ously affecting the efficiency of the dispute 
settlement system.  Indeed, by the time that proceeding could have resulted in a new DSB ruling and an implementing measure, another assessment revi ew would have overtaken the results of any 
re-determination, obliging to start a new proceeding against the review and making compliance proceeding on the implementing measure a pointl ess exercise.  Retrospective systems of duty 
assessment would have become moving targets that could largely escape from countervailing/anti-
dumping duty disciplines.  This would have led the dispute settlement system in an endless succession 
of disputes and turned it into a theoretical exercise una ble to solve the issue at the heart of the dispute. 
39. The representative of Canada
 said that his delegation had not had the benefit of reviewing the 
US statement prior to the present meeting and, therefore, it had not had a chance to provide Members 
with its considered views on that statement.  Ne vertheless, having listened carefully to what the 
United States had stated, he noted that there was an inherent tension in the position of the United States in its criticism of the Appellate Body's reasoni ng.  On the one hand the United States warned of 
the serious consequences or potential serious conse quences of what the Appellate Body had done in 
respect of Article 21.5 of the DSU suggesting that the Appellate Body had read the words "sufficient 
link" into the express terms of Article 21.5 of the DS U.   It then had gone on, in the next breath to 
identify that the findings of the Appellate Body were  in fact, given the factual circumstances of the 
case, quite narrow and the Appellate Body had gone to some lengths to underline that its findings 
were narrow.  It seemed that the better way to look at that, was very simple.  There was no expansion 
of the scope of Article 21.5 of the DSU.  There was no reading into the terms of Article 21.5 words that were not there.  There was simply the fact and that was found by the Panel and endorsed by the 
Appellate Body, that the United States had a me asure that it had alleged was the measure to WT/DSB/M/202 
Page 10  
 
  implement and no less than ten days later, the assessment review had undone the effects of the 
measure that, according to the United States, was the alleged measure to implement.  In such 
circumstances, to suggest that the assessment revi ew was somehow beyond the scope of Article 21.5 
of the DSU was indeed to read th e words "existence of the measure to comply" out of the terms of 
Article 21.5. 
40. The DSB took note
 of the statements, and adopted  the Appellate Body Report contained in 
WT/DS257/AB/RW and the Panel Report contained in WT/DS257/RW, as upheld by the Appellate 
Body Report. 
4. United States – Sunset reviews of anti-dumpi ng measures on oil country tubular goods 
from Argentina 
(a) Statement by the United States 
41. The representative of the United States , speaking under "Other Business", said that his 
country was pleased to report that it had implemen ted the DSB's recommendations and rulings in the 
dispute:  "United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods 
from Argentina" (DS268).  He recalled that on 15 Au gust 2005, the US Department of Commerce (the 
DOC) had issued draft regulations to amend the provisions for waiving participation in sunset 
reviews.  The amendments provided that any find ing of company-specific likelihood of continuation 
or resumption of dumping was to be based on information provided by that company.  The amendments also clarified that a respondent might re quest a hearing in an expedited sunset review.  
After providing an opportunity for comments, th e DOC had issued final regulations effective 
31 October 2005.  After amending the regulations, the DOC had conducted a redetermination of the 
specific sunset review at issue.  On 16 December  2005, the DOC had  issued the redetermination. 
42. The representative of Argentina
 welcomed the information provided by the United States on 
the measures adopted to implement the DSB's re commendations and rulings in the above-mentioned 
dispute and expected further details on those measu res.  Despite the short period of time that had 
elapsed since the adoption by the United States of some of the measures, particularly those designed 
to comply with the recommendations concerning inconsistencies in the dumping determination 
effected by the Department of Commerce (DOC) on the basis of the information already available, 
Argentina was in a position to affirm that the m easures adopted by the United States did not comply 
with the DSB's recommendations and rulings.  In  particular, Argentina disagreed, among other 
measures, with the re-determination effected by the DOC under Section 129, whereby it continued to find that revocation of the measure would have been  likely to lead to continuation or recurrence of 
dumping. Taking into account the existing disagreemen t under the terms of Article 21.5 of the DSU, 
Argentina would, in due course,  take the necessary steps to safeguard its rights and interests under the 
DSU, including if necessary recourse to the provisions of Articles 21.5 and 22 of the DSU. 
43. The DSB took note 
of the statements. 
 
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