Dispute Settlement Body 1 June 2005

The DSB establishes compliance panel to examine US implementation of softwood lumber case — Canada's request for sanctions is referred to arbitration

At its meeting held on 1 June 2005, the Dispute Settlement Body established a compliance panel at the request of Canada to review the United States' implementation in the case “United States — Final dumping determination on softwood lumber from Canada” (DS264). Canada also requested the right to apply sanctions against the US but the US asked for arbitration on the amount of sanctions.

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This summary has been prepared by the WTO Secretariat’s Information and Media Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

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Request for compliance panel  

At the end of the period given to a government to comply with a ruling, the parties to the dispute sometimes disagree on whether that government has fully complied. In such situation, the matter can be referred to the original panel who will decide whether the ruling has been applied properly.

DS264: US — Final dumping determination on softwood lumber from Canada

Canada argued that the US had failed to comply with the recommendations and rulings of the DSB since its new dumping determination continued to use zeroing to determine the existence of dumping. Canada requested that the matter be examined by a compliance panel under DSU Article 21.5.

The US responded that it had fully implemented the recommendations and rulings within the agreed period of time. The US said that it disagreed with Canada's assertion that the Department of Commerce's new determination of the existence of dumping was not consistent with the WTO Antidumping Agreement.

The DSB agreed to refer the matter to the original panel. The European Communities, Japan, India and China reserved their third party rights.

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Request for sanctions  

If a government fails to comply with a ruling, the party that won the dispute may request permission to suspend concessions — apply sanctions — against the party at fault.

DS264: US — Final dumping determination on softwood lumber from Canada

Canada requested the authorization to suspend application to the US of its concessions or other obligations in an amount established yearly, equivalent to the level of nullification and impairment caused by improper US implementation. In its request submitted to the DSB Canada indicated that its sanctions would cover trade to the amount of C$400 million.

The US said that in a note circulated on 31 May 2005 it had objected to the levels of suspension of concessions proposed by Canada and that the matter had therefore been automatically referred to arbitration.

The DSB agreed that the matter was referred to arbitration.

Following an agreement before the meeting between Canada and the US, the proceedings concerning the sanctions were suspended until the adoption of the rulings in the Article 21.5 compliance proceedings.

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Next meeting  

The next regular meeting of the DSB will take place on 20 June 2005.

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