UNITED STATES – FINAL COUNTERVAILING DUTY DETERMINATION WITH RESPECT TO CERTAIN SOFTWOOD LUMBER FROM CANADA
Document: Understanding between Canada and the United States Regarding Procedures under Articles 21 and 22 of the DSU
Date: 18 January 2005
Document codes: WT/DS257/18
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

Understanding between Canada and the United States

Regarding Procedures under Articles 21 and 22 of the DSU

 The following communication, dated 14 January 2005, from the delegation of Canada and the
delegation of the United States to the Chairperson of the Dispute Settlement Body, is circulated at the
request of these delegations.

 Canada and the United States would like to in form the Dispute Settlement Body that they
have agreed on the attached "Agreed Procedures Un der Articles 21 and 22 of the Dispute Settlement
Understanding Applicable to the WTO Dispute: (WT/DS257)".

 We ask that you please circulate this notification to the Dispute Settlement Body.

Agreed Procedures under Articles 21 and 22

of the Dispute Settlement Understanding
Applicable to the WTO Dispute:
 (WT/DS257)

 The Panel and Appellate Body reports in this dispute were adopted by the Dispute Settlement
Body ("DSB") on 17 February 2004.

 On 30 April 2004, pursuant to Article 21.3(b) of the DSU, Canada and the United States
reached an agreement () on a reasonable period of time for implementation of the
DSB's recommendations and rulings of ten months ( i.e., from 17 February 2004 to
17 December 2004).

 On 17 December 2004, the United States informed the DSB that it had implemented the
DSB's recommendations and rulings. On 30 Decem ber 2004, Canada informed the DSB that it
considers that the United States has not properly implemented these recommendations and rulings.

 Canada and the United States (the "Parties" ) have agreed on the following procedures:

1. Canada will request the establishment of a pa nel pursuant to Article 21.5 of the DSU (the
"compliance panel") at a special DSB meeting on 14 January 2005. The United States will
accept the establishment of the compliance panel.

2. At the DSB meeting of 14 January 2005, Cana da will also request authorization to suspend
concessions or other obligations pursuant to Article 22.2 of the DSU. Pursuant to Article 22.6
of the DSU, the United States will object to th e level of suspension of concessions or other
obligations, thereby referring this matter to arbitration.

3. Canada and the United States will cooperate to enable the compliance panel to circulate its
report within 90 days of the referral of the matter to the compliance panel, excluding such
time as the compliance panel's work may be suspended pursuant to Article 12.12 of the DSU.

4. In case of an appeal of the compliance panel report, the Parties will cooperate to enable the
Appellate Body to circulate its report within 90 days from the date of notification of the
appeal to the DSB.

5. The Parties will request that the Article 22. 6 arbitration be suspended until adoption by the
DSB of the recommendations and rulings in the Article 21.5 compliance proceedings.

6. In the event that the DSB finds that th e United States has failed to comply with the
recommendations and rulings of the DSB or that the measures taken by the United States to
comply with the recommendations and rulings of the DSB are inconsistent with the covered
agreements, the Article 22.6 arbitration will resume at the request of either Party. The Parties
will cooperate to enable the arbitrators to circulate their report within 60 days of the
resumption of their work.

7. In the event that the DSB finds that the Un ited States has complied with the recommendations
and rulings of the DSB and that the measures ta ken by the United States to comply with the
recommendations and rulings of the DSB are not inconsistent with th e covered agreements,
Canada will withdraw its request under Article 22.2 of the DSU, thereby terminating the
arbitration procedure.

8. The Parties will cooperate to facilitate the pa rticipation of the orig inal panelists in the
compliance panel and the Article 22.6 arbitration.

9. If any of the original panelists are not av ailable for either the compliance panel or the
Article 22.6 arbitration, or both, the Parties will promptly consult on a replacement panelist
and either Party may request the Director-General of the WTO to appoint, as soon as possible,
a replacement for the proceeding or proceedings in which such a replacement is required. If
an original panelist is unavailable to serve on the compliance panel and the Article 22.6
arbitration, the Parties will further request that in selecting a panelist for the compliance
panel, the Director-General seek a person who will also be available to act in the Article 22.6
arbitration.

10. The Parties agree to continue to cooperate in all matters related to these agreed procedures
and not to raise any procedural objection to any of the steps set out in them. If during the
application of these procedures, the Parties cons ider that a procedural aspect has not been
properly addressed, they will endeavour to find a solution within the shortest time possible
that will not affect the other agreed procedures.

11. These agreed procedures do not prejudice either Party's rights to take any action or procedural
step to protect its rights or interests, including the activation of any aspect of the provisions of
the DSU.

Geneva, 14 January 2005

 For Canada: For the United States:

 (signed) (signed)
 H.E. Mr Don Stephenson H.E. Ms Linnet F. Deily
 Ambassador Ambassador
 Permanent Mission of Canada Permanent Mission of the United States