UNITED STATES - CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000
Document: Recourse by Canada to Article 22.2 of the DSU
Date: 16 January 2004
Document codes: WT/DS234/25
Complainant: Canada, Mexico
Respondent: U.S.
Third parties: Argentina, Australia, Brazil, Costa Rica, EU, Hong Kong, India, Indonesia, Israel, Japan, South Korea, Norway, Thailand
Dispute stage: Implementation & Compliance
Agreements cited: Art. 5.4  Anti-dumpingArt. 5  Subsidies and Countervailing Measures (SCM)Art. VI  GATT 1994Art. 8, 18  Anti-dumpingArt. 11.4, 18, 32  Subsidies and Countervailing Measures (SCM)Art. XVI  Agreement Establishing the World Trade OrganizationArt. 10  Subsidies and Countervailing Measures (SCM)Art. X  GATT 1994Art. 1  Anti-dumping

UNITED STATES - CONTINUED DUMPING AND
SUBSIDY OFFSET ACT OF 2000

Recourse by Canada to Article 22.2 of the DSU

 The following communication, dated 15 January 2004, from the delegation of Canada to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 22.2 of the DSU.

 Canada requests that a special meeting of th e Dispute Settlement Body (DSB) be held on
26 January 2004 to consider the following agenda item:

United States – Continued Dumping and Subsidy Offset Act of 2000
- Recourse by Canada to Article 22.2 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes

 The panel and the Appellate Body in this dispute found that the Continued Dumping and
Subsidy Offset Act of 2000 (CDSOA) is inconsiste nt with the United States’ obligations under the
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
(Anti-dumping Agreement), the Agreement on Subsidies and Countervailing Measures (SCM
Agreement), the General Agreement on Tariffs and Trade 1994 (GATT 1994) and the Marrakesh
Agreement establishing the World Trade Organisation (WTO Agreement). In particular, they found
that:

 - the CDSOA is a non-permissible specific action against dumping or a subsidy contrary to
Article 18.1 of the Anti-dumping Agreement, Article 32.1 of the SCM Agreement and
Articles VI:2 and VI:3 of the GATT 1994;

 - consequently, the United States has failed to comply with Article 18.4 of the Anti-dumping
Agreement, Article 32.5 of the SCM Agreemen t and Article XVI:4 of the WTO Agreement;
and

 - to the extent the CDSOA is inconsistent with provisions of the Anti-dumping and SCM
Agreements, the CDSOA nullifies or impairs be nefits accruing to Complaining Parties under
those Agreements.

 On 27 January 2003, the DSB adopted the Appella te Body report and the report of the Panel,
as modified by the Appellate Body report. The Unite d States stated that it intended to implement the
recommendations and rulings of the DSB.

 A subsequent arbitration pursuant to Article 21.3(c) of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (DSU) determined that the reasonable period of
time for the United States to implement the recommendations and rulings of the DSB would expire on

27 December 2003. The United States has failed to implement those recommendations and rulings by
that date, and no mutually acceptable arrangement has been made.

 Therefore, pursuant to Article 22.2 of the DSU, Canada requests the authorization of the DSB
to suspend the application to the United States of its concessions or other obligations in an amount
that will be determined every year by the amount of the offset payments ma de to affected domestic
producers in the latest annual distribution under th e CDSOA. This amount will be established by
adding (i) the amount of offset payments attributed to duties collected on products from Canada and
(ii) a proportionate amount of the balance of total o ffset payments less the offset payments attributed
to duties collected on products of other Members that are authorized by the DSB to suspend
concessions or other obligations in this dispute. The annual amount of offset payments will be based
on information published by the U.S. Bureau of Customs and Border Protection or any successor
entity.

 Canada intends to take measures in the form of one or both of the following:

 (1) the imposition of additional import duties above bound custom duties on products
originating in the United States. Each year, prio r to the imposition of the additional duties, Canada
will notify to the DSB a final list indicating the leve l of the duties on selected products in the light of
the latest annual distribution of offset payments under the CDSOA;

 (2) the suspension of the application of the obligations under Article VI of GATT 1994,
Articles 3, 5, 7, 8, 9, 10, 11 and 12 of the An ti-dumping Agreement, and Articles 11, 12, 15, 17, 18,
19, 20, 21 and 22 of the SCM Agreement to determin e that the effect of dumping or subsidization of
products from the United States is to cause or threat en material injury to an established domestic
injury, or is to retard materially the establishment of a domestic industry.

 The application of one or both of these measures will not exceed the level of suspension of
concessions or other obligations authorized by the DSB.