DISPUTE SETTLEMENT

DS: United States — Countervailing Measures on Supercalendered Paper from Canada

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

See also:

back to top

Current status

 

back to top

Key facts

 

back to top

Latest document

  

back to top

Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Canada

On 30 March 2016, Canada requested consultations with the United States regarding countervailing duties adopted by the United States on supercalendered paper, and the investigation underlying the imposition of those duties. The request for consultations also concerns an alleged ongoing conduct regarding the application of adverse facts available to “discovered” information during the course of a countervailing duty investigation.

Canada claims that the measures are inconsistent with:

  • Articles 1.1(a)(1), 1,1(b), 2, 10, 11.1, 11.2, 11.3, 11.6, 12.1, 12.2, 12.3, 12.7, 12.8, 14, 14(d), 19.1, 19.3, 19.4, 22.3, 22.5, 32.1 of the SCM Agreement; and
     
  • Article VI:3 of the GATT 1994.

 

Panel and Appellate Body proceedings

On 9 June 2016, Canada requested the establishment of a panel. At its meeting on 22 June 2016, the DSB deferred the establishment of a panel.

At its meeting on 21 July 2016, the DSB established a panel. Brazil, China, the European Union, India, Japan, Korea, Mexico and Turkey reserved their third-party rights. On 22 August 2016, Canada requested the Director-General to compose the panel. On 31 August 2016, the Director-General composed the panel.

On 27 January 2017, the Chair of the panel informed the DSB that the beginning of the panel's work had been delayed as a result of a lack of available experienced lawyers in the Secretariat. The panel expected to issue its final report to the parties before the end of 2017. On 5 July 2018, the Chair of the panel informed the DSB that the panel issued its final report to the parties on 15 December 2017. In its communication, the Chair indicated that although public circulation of the report was scheduled for 21 March 2018, the parties requested on several occasions that circulation of the report be delayed, with the most recent request for delay until 5 July 2018. The Chair informed the DSB that, accordingly, the panel report would be circulated on 5 July 2018.

On 5 July 2018, the panel report was circulated to Members.

  1. This dispute concerns the imposition by the United States of certain countervailing measures on imports of SC Paper from Canada, as well as the United States' alleged ongoing conduct of applying adverse facts available (AFA) in respect of programmes discovered during the course of a CVD investigation.
  2. Canada presented a series of claims concerning: (a) the USDOC's determinations in the original CVD investigation with respect to Port Hawkesbury Paper LP (PHP), including claims regarding the provision of electricity to PHP by Nova Scotia Power Incorporated (NSPI); the assistance under the hot idle funding and the Forestry Infrastructure Fund (FIF); and the provision of stumpage and biomass; (b) the USDOC's determinations in the original CVD investigation with respect to Resolute FP Canada Inc. (Resolute), including the claims regarding the application of AFA in relation to information discovered at verification; Resolute's purchase of Fibrek General Partnership (Fibrek); and the alleged subsidies provided under the Federal Pulp and Paper Green Transformation Programme (PPGTP), the Ontario Forest Sector Prosperity Fund (FSPF) and the Ontario Northern Industrial Electricity Rate (NIER) programme; (c) the USDOC's determinations in the original CVD investigation with respect to the all-others rate affecting the non-investigated companies Irving Paper Ltd. (Irving) and Catalyst Paper Corporation (Catalyst); (d) the USDOC's determinations in the expedited reviews conducted for the non-investigated companies Irving and Catalyst; and (e) the United States' alleged “ongoing conduct” of applying AFA in respect of programmes discovered during the course of a CVD investigation, or “Other Forms of Assistance-AFA” measure.
  3. On the claims concerning the USDOC's determination in the original CVD investigation with respect to PHP, the Panel concluded as follows:
    1. The USDOC acted inconsistently with Article 1.1(a)(1)(iv) of the SCM Agreement, by making a finding of entrustment or direction with respect to the provision of electricity by NSPI.
    2. The USDOC acted inconsistently with Articles 1.1(b) and 14(d) of the SCM Agreement, when it determined that the provision of electricity by NSPI to PHP conferred a benefit.
    3. The USDOC acted inconsistently with Article 12.8 of the SCM Agreement, by failing to disclose to interested parties the essential fact that, in the view of the USDOC, Section 52 of the Public Utilities Act entrusted or directed NSPI to provide electricity to all customers, including PHP.
    4. The USDOC acted inconsistently with Article 1.1(b) of the SCM Agreement, by finding that the hot idle funding conferred a benefit on PWCC/PHP.
    5. The USDOC acted inconsistently with Article 1.1(b) of the SCM Agreement, by finding that the second FIF amount conferred a benefit on PWCC/PHP.
    6. The USDOC acted inconsistently with Article 11.3 of the SCM Agreement, by failing in its obligation to evaluate the accuracy and adequacy of the evidence in the application with respect to the existence of a benefit in the provision of stumpage and biomass by the Government of Nova Scotia to PHP.
  4. On the claims concerning the USDOC's CVD determination in the original investigation with respect to Resolute, the Panel concluded as follows:
    1. The USDOC acted inconsistently with Article 12.7 of the SCM Agreement, by applying facts available to the discovered programmes.
    2. The Panel declined to rule on Canada's claims under Articles 11.2, 11.3, 12.1, 12.2, 12.3, and 12.8 of the SCM Agreement, regarding the discovered programmes.
    3. The USDOC acted inconsistently with Article 1.1(b) of the SCM Agreement, by finding, on the basis of an alleged lack of relevant evidence, that the benefit conferred on Fibrek through the PPGTP was not extinguished when Fibrek was acquired by Resolute.
    4. The Panel declined to rule on Canada's claims under Articles 10, 14, 19.1, 19.3, and 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994, regarding the USDOC's finding that the benefit conferred on Fibrek through the PPGTP was not extinguished when Fibrek was acquired by Resolute.
    5. The Panel declined to rule on Canada's claims under Articles 1.1(b), 10, 14, 19.1, 19.3, and 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994, regarding the USDOC's finding that the benefit conferred on Fibrek was not extinguished when Fibrek was acquired by Resolute, with respect to the alleged assistance discovered during the verification of Fibrek.
    6. The USDOC acted inconsistently with Articles 10, 19.1, 19.3, and 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994, by attributing to the production of SC Paper subsidies provided to Resolute and Fibrek under the PPGTP, FSPF, and NIER Programmes.
    7. The Panel declined to rule on Canada's claims under Articles 10, 19.1, 19.3, and 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994, regarding the attribution to the production of SC Paper of the alleged assistance discovered during the verification of Fibrek.
  5. On the claims concerning the CVD determinations with respect to Irving and Catalyst, the Panel concluded as follows:
    1. The USDOC acted inconsistently with Articles 10, 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement and Article VI:3 of the GATT 1994, by constructing the all-others rate relying on Resolute's rate, which was mainly calculated using AFA.
    2. The Panel declined to rule on Canada's claim under Article 12.7 of the SCM Agreement, regarding the construction of the all-others rate relying on Resolute's rate.
    3. The Panel rejected Canada's claims under Articles 10, 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement and Article VI:3 of the GATT 1994, regarding the USDOC's failure to adjust the all-others rate in respect of subsidies that were not available to non-investigated exporters.
    4. The USDOC acted inconsistently with Article 19.3 of the SCM Agreement, by including new subsidy allegations in the context of the expedited reviews undertaken for Catalyst and Irving.
    5. The Panel declined to rule on Canada's claims under Articles 11.2 and 11.3 of the SCM Agreement, regarding the USDOC's alleged initiation of an investigation into new subsidy allegations during the expedited reviews of Catalyst and Irving.
  6. On the claims concerning the “Other Forms of Assistance-AFA measure”, the Panel concluded as follows:
    1.  Canada adduced sufficient evidence to establish that the challenged “Other Forms of Assistance-AFA measure” constitutes “ongoing conduct” and, therefore, the Panel did not consider it necessary to address Canada's argument that the challenged measure amounts to a “rule or norm of general and prospective application”.
    2. The unwritten “ongoing conduct” measure challenged by Canada is inconsistent with Article 12.7 of the SCM Agreement.
    3. The Panel declined to rule on Canada's claims under Articles 10, 11.1, 11.2, 11.3, 11.6, 12.1, and 12.8 of the SCM Agreement, with respect to the “Other Forms of Assistance-AFA measure”.

On 27 August 2018, the United States notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report.

On 24 October 2018, upon expiry of the 60-day period provided for in Article 17.5 of the DSU, the Appellate Body informed the DSB that it would not be able to circulate the Appellate Body report in this appeal by the end of the 60-day period, nor within the 90-day time-frame provided for in Article 17.5 of the DSU. The Appellate Body referred to the size of the panel record and the complexity of issued that had been appealed. The Appellate Body also noted the backlog of appeals pending with the Appellate Body at present, and the overlap in the composition of all divisions resulting in part from the reduced number of Appellate Body members. In its communication the Appellate Body indicated that Division members could currently spend only very little time preparing for this appeal and that it would not be possible for the Division to focus on the consideration of this appeal and be fully staffed for some time. The Appellate Body informed the DSB that the Appellate Body would communicate appropriately with participants and DSB Members as soon as it knew more precisely when the Division can schedule the hearing in this appeal.

 

Share


Follow this dispute

  

Problems viewing this page? If so, please contact webmaster@wto.org giving details of the operating system and web browser you are using.