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See also: One-page summary of key findings of this dispute
Complaint by the United States.
On 11 March 1996, the United States requested
consultations with Canada concerning certain measures prohibiting or
restricting the importation into Canada of certain periodicals. The US
claimed that the measures are in contravention of GATT Article XI. The US
further alleged that the tax treatment of so-called “split-run”
periodicals and the application of favourable postage rates to certain
Canadian periodicals are inconsistent with GATT Article III.
On 24 May 1996, the US requested the establishment of a
panel. At its meeting on 6 June 1996, the DSB deferred the establishment
of a panel.
Panel and Appellate Body proceedings
Further to a second request to establish a panel by the US,
the DSB established a panel on 19 June 1996. On 25 July 1996, the Panel
was composed. The report of the Panel was circulated to Members on 14
March 1997. The Panel found the measures applied by Canada to be in
violation of GATT rules.
On 29 April 1997, Canada notified its intention to
appeal certain issues of law and legal interpretations developed by the
Panel. The report of the Appellate Body was circulated to Members on 30
June 1997. The Appellate Body upheld the Panel’s findings and conclusions
on the applicability of GATT 1994 to Part V.1 of Canada’s Excise Tax Act,
but reversed the Panel’s finding that Part V.1 of the Excise Act is
inconsistent with the first sentence of Article III:2 of GATT 1994. The
Appellate Body further concluded that Part V.1 of the Excise Act is
inconsistent with the second sentence of Article III:2 of GATT 1994. The
Appellate Body also reversed the Panel’s conclusion that Canada’s “funded” postal rate scheme is justified by Article III:8(b) of
At its meeting on 30 July 1997, the DSB adopted the
Appellate Body report and the Panel report, as modified by the Appellate
Implementation of adopted reports
implementation period was agreed by the parties to be 15 months from the
date of adoption of the reports i.e. it expired on 30 October 1998. At the DSB meeting on 21 October 1998, Canada informed the DSB that it would have complied with the DSB's recommendations by 30 October 1998.
Canada has withdrawn the contested measure.