UNITED STATES – ANTI-DUMPING MEASURES APPLYING DIFFERENTIAL PRICING METHODOLOGY TO SOFTWOOD LUMBER FROM CANADA NOTIFICATION OF AN APPEAL BY CANADA 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
Document: THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 5 June 2019
Document codes: WT/DS534/5
Complainant: Canada
Respondent: U.S.
Third parties: Brazil, China, EU, Japan, Kazakhstan, South Korea, Russia, Vietnam
Dispute stage: Panel
Agreements cited: Art. 2.4.2, 2.4, 1, 2.1  Anti-dumpingArt. VI:1, VI:2  GATT 1994

UNITED STATES – ANTI-DUMPING MEASURES APPLYING DIFFERENTIAL PRICING
METHODOLOGY TO SOFTWOOD LUMBER FROM CANADA
NOTIFICATION OF AN APPEAL BY CANADA 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 communication dated 4 June 2019, from the Delegation of Canada, is being circulated
to Members

Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate Review, Canada
hereby notifies the Appellate Body Secretariat of its decision to appeal certain issues of law covered
in the report of the Panel in United States – Anti-Dumping Measures Applying Differential Pricing
Methodology to Softwood Lumber from Canada (DS534) and certain legal interpretations developed
by the Panel in that report.

First, Canada requests that the Appellate Body review the Panel's findings and conclusions arising
from its erroneous interpretation of the term "pattern" in the second sentence of Article 2.4.2 of the
Agreement on Implementation of Article VI of the GATT 1994 ("Anti-Dumping Agreement"). In
particular, the Panel interpreted Article 2.4.2 to improperly find that a "pattern" could include export
prices that are significantly higher than other export prices. 1 It then incorrectly found that the
US Differential Pricing Methodology's ("DPM") inclusion of export prices that are significantly higher
in the "pattern" in this dispute is consistent with Article 2.4.2 of the Anti-Dumping Agreement.

Second, Canada requ ests review of the Panel's erroneous finding that the second sentence of
Article 2.4.2 requires an investigating authority to use the weighted -average-to-transaction
methodology for "pattern" transactions and a symmetrical comparison methodology for non-pattern
transactions.2 This amalgam of comparison methodologies is inconsistent with the ordinary meaning
and context of Article 2.4.2 and would undermine the function of this provision.

Third, Canada requests review of the Panel's erroneous findings and co nclusions with respect to
zeroing under the second sentence of Article 2.4.2 and Article 2.4 of the Anti-Dumping Agreement.3
The Panel's finding that zeroing was permissible under the second sentence was based on an
improper interpretation of Article 2.4.2 . In addition, the Panel erred when it failed to find that the
practice of zeroing independently violates the fair comparison requirement in Article 2.4. These
erroneous findings led the Panel to improperly conclude that the United States' application of zeroing
as part of the DPM in the underlying investigation was consistent with Article 2.4.2 and Article 2.4
of the Anti-Dumping Agreement.

1 Panel Report, US – Differential Pricing Methodology, paras. 7.50-7.66.
2 Panel Report, US – Differential Pricing Methodology, paras. 7.85-7.100.
3 Panel Report, US – Differential Pricing Methodology, paras. 7.101-7.106 and 7.108-7.112.

Fourth, Canada requests that the Appellate Body find that the Panel acted inconsistently with the
function of panels under Article 11 of the DSU. In particular, the Panel erred by departing, without
cogent reasons, from the legal interpretations and reasoning contained in the adopted
Appellate Body report in US – Washing Machines. In that report, the Appellate Body set out the
correct interpretation of the second sentence of Article 2.4.2 and Article 2.4 and concluded that the
United States' DPM measure was "as such" WTO -inconsistent. While the Panel acknowledged the
existence of the "cogent reasons" standard that arises from the text of the DSU,4 it failed to provide
any such reason that would justify departing from adopted Appellate Body legal interpretations and
reasoning.

Canada respectfully requests that the Appellate Body: reverse the findings and conclusions of the
Panel referred to above; complete the analysis and find that the application of the DPM to Canadian
companies in the underlying investigation was WTO -inconsistent; modify accordingly the
recommendations of the Panel; and find that the Panel acted incon sistently with Article 11 of the
DSU.