CANADA - CERTAIN MEASURES CONCERNING PERIODICALS
Document: Original: English CANADA - CERTAIN MEASURES CONCERNING PERIODICALS Status Report by Canada
Date: 13 March 1998
Document codes: WT/DS31/9; WT/DS31/R; WT/DS31/AB/R
Complainant: U.S.
Respondent: Canada
Dispute stage: Appellate Body
Agreements cited: Art. III, XI  GATT 1994

CANADA - CERTAIN MEASURES CONCERNING PERIODICALS
Status Report by Canada
The following communication, dated 12 March 1998, from the Permanent Mission of Canada
to the Permanent Mission of the United States and to the DisputeSettlement Body, is circulated pursuant
to Article 21.6 of the DSU.
Status Report Regarding Implementation of the Recommendations and Rulings
in the Dispute Regarding
Panel Report () and
Appellate Body Report ()
Pursuant to Article 21.6 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes ("DSU"), the Government of Canada presents this first report on the status of the
implementation of the recommendation of the Dispute Settlement Body ("DSB") regarding "".
On 29 August 1997, Canada informed the DSB of its intention to meet its obligation under
the WTO with respect to this dispute. At that time, Canada also advised the DSB that a "reasonable
periodof time" wouldbe required tocomply withthe ruling.Furtherto consultationsinSeptember 1997
with the United States Trade Representative (USTR), it was agreed by both parties that 15 months
constituted a reasonable period of time for implementation. Canada accordingly informed the DSB
of this agreement at the meeting held on 25 September 1997.
The Department of Canadian Heritage has initiated a process of consultation regarding the
necessary steps to comply with the DSB ruling.
To achieve compliance, changes will be required to Tariff Item 9897.00.00 of the new 1998
Customs Tariff which contains the former provisions of Tariff Code 9958 (i.e., the prohibition on
the importation into Canada of periodicals that contain advertising directed at the Canadian market).
The necessary changes to the Tariff will be made by way of Executive Order which will require approval
by Cabinet and will be signed into law by the Governor General. Amendments will also need to be
made to part V.1 of the Excise Tax Act which imposes a tax on the value of all advertisements in split-
run editions of magazines distributed in the Canadian market. These amendments must receive
Parliamentary approval through the legislative process for bills. The first step in the process is approval
by Cabinet of the proposed legislative policy before it is drafted in the form of a bill. Once authority

is received and the bill is drafted, the bill is approved once more by Cabinet before it is introduced
inParliament. The billis thenintroduced inthe Houseof Commons and mustgo throughthree readings.
At second and third reading, the bill is subject to a full debate by the House of Commons. Between
second and third reading, the bill undergoes a full study, i.e., witnesses are called by a Parliamentary
committee where amendments may be made. After it is passed by the House of Commons, the bill
moves to the Senate where it is given the same three readings and is studied by a Senate Committee.
Should there be any amendments to the bill emerging from the Senate, the amendments must be referred
back to the House of Commons for approval.
The Government is in the process of seeking approval to amend the relevant legislation. At
the same time, work is underway to ensure that the necessary changes will be ready for tabling in
sufficient time for the agreed implementation.
In response to the ruling on Canada's postal subsidy, the Government is reviewing changes
tothe PublicationsAssistanceProgram toensure thatitconforms tothe DSB ruling. Thisreview process
also will ensure changes are made to the postal rate in order to eliminate the differential pricing policy.