. /.  WORLD TRADE  
ORGANIZATION  WT/DS264/25 
17 May 2006 
 (06-2427) 
 Original:   English 
  
 
 
UNITED STATES – FINAL DUMPING DETERMINATION ON 
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 17 May 2006,  from the Delegation of Canada, is being 
circulated to Members.  
_______________ 
 
 
Pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures  
Governing the Settlement of Disputes (the "DSU") and Rule 20 of the Working Procedures for 
Appellate Review, Canada appeals certain issues of  law and certain legal in terpretations covered in 
the Panel Report in United States – Final Dumping Determination on Softwood Lumber From Canada 
– Recourse to Article 21.5 of the DSU by Canada .
1 
 The Panel found that the U.S. Department of Commerce's ("USDOC") section 129 dumping 
determination on softwood lumber was not inc onsistent with Articles 2.4.2 and 2.4 of the Agreement 
on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("ADA").
2  
Consequently, the Panel determined that the United States had implemented the rulings and 
recommendations of the Dispute Settlement Body ("DSB").3  These findings are in error as they are 
based on erroneous findings on issues of law and related legal interpretations. 
 
Canada requests that the Appellate Body review , and reverse, these findings of the Panel.  
Specifically, Canada asks the Appellate Body to find:  
   
 
 
                                                     
 
1 Report of the Panel, WT/DS264/RW, circulated April 3, 2006. 
2 Ibid., at paras. 5.27-5.28, 5.30, 5.65-5.66, 5.78, 6.1. 
3 Ibid., at para. 6.2. See DSB, Minutes of Meeting (31 August 2004) , WT/DSB/M/175, September 24, 
2004, 4(a), at para. 42. WT/DS264/25 
Page 2  
 
• first, the Panel erred in interpreting Article 2.4.2 to permit the USDOC to treat 
transaction-specific comparisons that result in a negative value ( i.e., non-dumped 
transactions) as zero in calculating "margins of dumping" under the transaction-to-transaction methodology.  These erroneous findings appear throughout the panel 
report including paragraphs 5.17-5.30, 5.65-5.66, and 6.1
4;  and 
 
• second, the Panel erred in finding that Article 2.4 permits the treatment of 
transaction-specific comparisons that result in a negative value as zero in the calculation of "margins of dumping" under the transaction-to-transaction methodology.  These findings are set out in paragraphs 5.72-5.78 a nd 6.1 of the panel 
report.  
 
In the light of these errors, Canada respec tfully requests that the Appellate Body: 
 
• reverse the findings of the Panel set out above;  
 
• find that the USDOC's use of zeroing u nder the transaction-to-transaction 
methodology in the section 129 determinati on, as described above, is inconsistent 
with Articles 2.4.2 and 2.4 of the ADA;  and 
 
• determine that, as a consequence, the United States has failed to implement the 
recommendations and rulings of the DSB.  
 
__________ 
 
                                                     
 
4 The USDOC confirmed that it treat ed negative transaction-specific co mparison results as zero in its 
section 129 determination, at one point describing the pr ocess as follows: "… because the Appellate Body report 
requires the offset for non-dumped sales only for a wei ghted-average-to-weighted-average comparison, we have 
not applied the offset for non-dumped sales in our transaction-to-transaction comparison."  See Notice of 
Determination Under Section 129 of the Uruguay Round Agreements Act; Antidumping Measures Concerning 
Certain Softwood Lumber Products From Canada , 70 Fed. Reg. 22,636 at 22,639 (Dep't Commerce May 2, 
2005).