UNITED STATES – FINAL DUMPING DETERMINATION ON SOFTWOOD LUMBER FROM CANADA
Document: Recourse to Article 22.2 of the DSU by Canada
Date: 20 May 2005
Document codes: WT/DS264/17
Complainant: Canada
Respondent: U.S.
Third parties: China, EU, India, Japan, New Zealand, Thailand
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 1, 2, 4, 5, 9  Anti-dumpingArt. VI  GATT 1994Art. 18  Anti-dumping

UNITED STATES – FINAL DUMPING DETERMINATION ON
SOFTWOOD LUMBER FROM CANADA

Recourse to Article 22.2 of the DSU by Canada

 The following communication, dated 19 May 2005, 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
1 June 2005 to consider the following agenda item:

 Recourse by Canada to Article 22.2 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes

On 31 August 2004, the Dispute Settlement Body ("DSB") adopted the Panel and Appellate
Body reports in .
1
The panel and Appellate Body found that the United States acted "inconsistently with Article 2.4.2 of
the Anti-Dumping Agreement in determining the existence of dumping on the basis of a methodology
incorporating the practice of ‘zeroing'". 2 The panel and the Appellate Body recommended that the
United States bring its measure into conf ormity with its obligations under the Agreement on
Implementation of Article VI of th e General Agreement on Tariffs and Trade (" Anti-Dumping
Agreement").

 On 6 December 2004, Canada and the United States reached agreement on a "reasonable
period of time" to comply with the recommend ations and rulings of the DSB pursuant to
Article 21.3(b) of the Understanding on Rules and Procedures Go verning the Settlement of Disputes
("DSU").
3 The United States confirmed in this agreem ent that it would complete implementation no
later than 15 April 2005. On 14 February 2005, Ca nada and the United States agreed to extend the
"reasonable period of time" until no later than 2 May 2005.4

1 Dispute Settlement Body, Minutes of Meeting (31 August 2004) , WT/DSB/M/175, 24 September
2004, at para. 4. Also see ,
Report of the Appellate Body, WT/DS 264/AB/R, adopted 31 August 2004 and , Report of the Panel, WT/DS264/R, adopted 31 August 2004.
2 Appellate Body Report, at para. 183(a); and Panel Report, at para. 8.1(a)(i).
3 , Agreement under
Article 21.3(b) of the DSU, WT/DS264/12, 8 December 2004.
4 , Agreement under
Article 21.3(b) of the DSU, WT/DS264/15, 17 February 2005.

 The United States has failed to comply with the DSB's recommendations and rulings within
the reasonable period of time provided. Therefore, pursuant to Article 22.2 of the DSU, Canada
requests authorization from the DSB to suspend the application to the United States of concessions or
other obligations, in an amount representing the portion of the total anti-dumping duties illegally
collected and not refunded as a result of the United States' non-compliance ( i.e., the United States'
failure to eliminate the practice of zeroing). Through 2005, this amount will be approximately
$CAD 400 million. For the year 2005, the level of suspension of concessions should therefore equal
this amount. In each subsequent year, the level of suspension of concessions will equal the portion of
the total anti-dumping duties illegally collected and not refunded for that year as a result of the United
States' non-compliance.

 This level of suspension of concessions is equivalent to the level of nullification and
impairment of benefits accruing to Canada that results from the US failure to bring its measures into
compliance with Anti-Dumping Agreement or to otherwise comply with the recommendations and
rulings of the DSB.

 Canada intends to implement this suspension of tariff concessions a nd related obligations
under the General Agreement on Tariffs and Trade 1994 by imposing additional import duties above
bound custom duties on products originating in the United States. For each year in which Canada
intends to take such measures, Canada will provide the DSB with a final list indicating the level of
additional duties that Canada will apply and the products that will be subject to the additional duties.