DS534: United States — Anti-Dumping Measures Applying Differential Pricing Methodology to Softwood Lumber from Canada

DS534: United States — Anti-Dumping Measures Applying Differential Pricing Methodology to Softwood Lumber from Canada

The Latest News:

The Panel has published its report.

The Conclusions and Recommendations of the Panel Report are as follows:

The Panel found that in applying the differential pricing methodology (“DPM”) in the underlying investigation the United States acted inconsistently with Article 2.4.2 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Anti-Dumping Agreement”) by aggregating differences in export prices across unrelated categories, i.e. purchasers, regions and time periods to identify a single pattern of export prices which differed significantly among different purchasers, regions and time periods.

However, the Panel also concluded that Canada has failed to demonstrate that in applying the DPM in the underlying investigation the United States acted inconsistently with:

  1. Article 2.4.2 of the Anti-Dumping Agreement by including, in the pattern, export transactions to those purchasers, regions or time periods whose prices differed significantly because they were significantly higher relative to export prices to other purchasers, regions or time periods.
  2. Article 2.4.2 of the Anti-Dumping Agreement by using zeroing under the weighted-average-to-transaction (“W-T”) methodology provided in the second sentence of Article 2.4.2.
  3. Article 2.4 of the Anti-Dumping Agreement by using zeroing under the W-T methodology provided in the second sentence of Article 2.4.2.

The Panel concluded that it did not need to address, and exercise judicial economy on, Canada’s consequential claims under Articles 1 and 2.1 of the Anti-Dumping Agreement as well as Articles VI:1 and VI:2 of the GATT 1994.

Under Article 3.8 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), in cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment. The Panel concluded that, to the extent the measure at issue is inconsistent with the Anti-Dumping Agreement, it has nullified or impaired benefits accruing to Canada under this agreement.

Pursuant to Article 19.1 of the DSU, the Panel recommended that the United States bring its measure into conformity with its obligations under the Anti-Dumping Agreement.

The Dispute:

On November 28, 2017, Canada requested consultations with the United States with respect to the United States’ anti-dumping measures applying the Differential Pricing Methodology to softwood lumber products from Canada.

Canada claimed that the measures appear to be inconsistent with numerous articles of the Anti-Dumping Agreement; and Articles VI:1 and VI:2 of the GATT 1994.

Panel and Appellate Body Proceedings:

On March 15, 2018, Canada requested the establishment of a panel. At its meeting on March 27, 2018, the DSB deferred the establishment of a panel.  On May 9, 2018, Canada requested the Director-General to compose the panel.

Brazil, China, the European Union, Japan, Kazakhstan, the Republic of Korea, the Russian Federation, and Viet Nam have reserved their rights to participate in the Panel proceedings as third parties.

On May 22, 2018, the Director-General composed the panel.

On November 9, 2018, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties within the first half of 2019, in accordance with the partial timetable adopted after consultation with the parties.

For the full list of documents filed with the WTO, click here.

Stay Tuned…

We will provide updates on this blog as the Panel’s report becomes available.

John Reiterowski, DS Lawyers Canada, LLP

jreiterowski@dsavocats.ca

DS Customs & Trade team located in Paris, Brussels, Montreal, Toronto, Lima, Singapore, Vietnam, Beijing, Guangzhou and Dakar is at your disposal to provide you with additional information.

CONTACT US:

dscustomsdouane@dsavocats.com

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