UNITED STATES – FINAL COUNTERVAILING DUTY DETERMINATION WITH RESPECT TO CERTAIN SOFTWOOD LUMBER FROM CANADA
Document: Recourse by Canada to Article 21.5 of the DSU Notification of an Appeal by the United States 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
Date: 12 September 2005
Document codes: WT/DS257/22
Complainant: Canada
Respondent: U.S.
Third parties: China, EU, India, Japan
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 10, 11, 32, 1, 2, 12, 14, 19, 22  Subsidies and Countervailing Measures (SCM)Art. VI, X:3  GATT 1994Art. 21  Subsidies and Countervailing Measures (SCM)

UNITED STATES – FINAL COUNTERVAILING DUTY DETERMINATION WITH
RESPECT TO CERTAIN SOFTWOOD LUMBER FROM CANADA

Recourse by Canada to Article 21.5 of the DSU

Notification of an Appeal by the United States
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 6 September 2005, from the Delegation of the United States,
is being circulated to Members.

 Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review, the
United States hereby notifies its decision to app eal to the Appellate Body certain issues of law
covered in the Report of the Panel on : Recourse to Article 21.5 of the DSU by Canada
() ("Panel Report") and certain legal in terpretations developed by the Panel in this
dispute.

1. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
First Assessment Review does not fall outside the scope of the present DSU Article 21.5 proceeding,
insofar as the pass-through analysis is concerned.
1 This conclusion is in error and is based on
erroneous findings on issues of law and related legal interpretations of DSU Article 21.5.

2. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
United States failed, in the treatment of pass-th rough in the First Assessment Review, to properly
implement the recommendations and rulings of th e Dispute Settlement Body by not conducting a
pass-through analysis with respect to sales, found not to be at arm's length, of logs by tenured timber
harvesters, whether or not they also produce lumb er, to unrelated timber producers, whether or not
they hold a stumpage contract.
2 This erroneous conclusion is b ased on the Panel's erroneous legal
conclusion, described in paragraph 1, above, that the First Assessment Review does not fall outside
the scope of the DSU Article 21.5 proceeding.

1
 Panel Report, paras. 4.36-4.50, and 5.1, first subparagraph.

2
 Panel Report, paras. 4.58-4.82, 4.104-4.106, and 5.2, first subparagraph.

3. The United States seeks review by the Appellate Body of the Panel's legal conclusion that, in
the First Assessment Review, the United States in cluded in its subsidy numer ator transactions for
which it had not demonstrated that the benefit of subsidized log inputs had passed through to the
processed product.
3 This erroneous conclusion is based on the Panel's erroneous legal conclusion,
described in paragraph 1, above, that the First As sessment Review does not fall outside the scope of
the DSU Article 21.5 proceeding.

4. The United States seeks review by the Appellate Body of the Panel's legal conclusion that,
with respect to the First Assessment Review, the Un ited States remains in violation of Articles 10
and 32.1 of the Agreement on Subsidies and Countervailing Measures ("SCM Agreement") and
Article VI:3 of the General Agreement on Tariffs and Trade 1994 ("GATT 1994").
4 This erroneous
conclusion is based on the Panel's erroneous legal conclusion, describ ed in paragraph 1, above, that
the First Assessment Review does not fall outside the scope of the DSU Article 21.5 proceeding.

5. The United States seeks review by the Appellate Body of the Panel's legal conclusion that,
with respect to the First Assess ment Review, the United States has nullified or impaired benefits
accruing to Canada under the SCM Agreement and the GATT 1994.
5 This erroneous conclusion is
based on the Panel's erroneous legal conclusion, d escribed in paragraph 1, above, that the First
Assessment Review does not fall outside the scope of the DSU Article 21.5 proceeding.

3
 Panel Report, paras. 4.114-4.115, and 5.2, second subparagraph.

4
 Panel Report, paras. 4.114-4.115 and 5.4.

5
 Panel Report, para. 5.5.