05-12483. WTO Dispute Settlement Proceeding Regarding Final Dumping Determination on Softwood Lumber from Canada

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (USTR) is providing notice that on June 1, 2005, at the request of Canada, the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) established a dispute settlement panel under the Marrakesh Agreement Establishing the WTO. The panel is to examine whether the United States has implemented the recommendations and rulings of the DSB in a dispute involving a U.S. Department of Commerce (Commerce) determination that certain softwood lumber products from Canada are being sold in the United States at less than fair value (LTFV). On August 31, 2004, the DSB adopted the findings of the panel and the WTO Appellate Body in that dispute. Those findings rejected all of Canada's claims, except the claim that Commerce's methodology for aggregating dumping levels determined by comparing weighted average export price to weighted average normal value for groups of comparable transactions was inconsistent with Article 2.4.2 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (Antidumping Agreement). In response to the DSB's recommendations and rulings, Commerce revised its methodology. Instead of determining dumping levels on a weighted average-to-weighted average basis, Commerce determined dumping levels on a transaction-to-transaction basis. On April 27, 2005, Commerce issued a Notice of Determination Under Section 129 of the Uruguay Round Agreements Act: Antidumping Measures on Certain Softwood Lumber Products From Canada. That Notice, published in the Federal Register on May 2, 2005 (70 FR 22636), implements the new determination. Canada subsequently requested the establishment of a dispute settlement panel, alleging that the United States had failed to implement the DSB's recommendations and rulings. The panel was established on June 1, 2005. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before July 22, 2005, to be assured of timely consideration by USTR.

ADDRESSES:

Comments should be submitted (i) electronically, to [e-mail], Attn: “DS264 Dispute” in the subject line, or (ii) by fax, to Sandy McKinzy at [phone], with a confirmation copy sent electronically to the email address above.

FOR FURTHER INFORMATION CONTACT:

Theodore R. Posner, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508, [phone].

SUPPLEMENTARY INFORMATION:

Pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), the panel, which will hold its meetings in Geneva, Switzerland, is expected to issue a report on its findings and recommendations in September 2005.

Prior WTO Proceedings

On August 31, 2004, the WTO DSB adopted the reports of a dispute settlement panel and the Appellate Body in a dispute brought by Canada challenging the initiation, scope, and methodology of Commerce's investigation of LTFV sales in the United States of certain softwood lumber products from Canada. The panel rejected all of Canada's claims, except its claim concerning Commerce's use of the so-called “zeroing” methodology in aggregating dumping levels determined by making weighted average-to-weighted average comparisons between groups of home market sales and comparable groups of sales for export to the United States. The panel's findings were upheld by the Appellate Body in all respects. The panel and Appellate Body reports are publicly available in the USTR reading room and on the WTO Web site http://www.wto.org.

Article 21.5 Proceeding

Pursuant to the rules of the DSU, the United States and Canada agreed that the United States would have until May 2, 2005, to implement the recommendations and rulings of the DSB. To implement these recommendations and rulings, Commerce undertook a revision of the calculation of dumping margins in the Softwood Lumber from Canada investigation. That process concluded with a new determination, which Commerce issued to the United States Trade Representative on April 19, 2005. In the new determination, Commerce calculated levels of dumping on a transaction-to-transaction basis (as opposed to a weighted average-to-weighted average basis), and then aggregated the results of these comparisons to determine dumping margins for particular producers and exporters. Following consultations with Commerce and with congressional committees, the Trade Representative directed Commerce to implement the new determination on April 27, 2005. Commerce did so through a Notice of Determination Under Section 129 of the Uruguay Round Agreements Act: Antidumping Measures on Certain Softwood Lumber Products From Canada, effective April 27, 2005 and published in the Federal Register on May 2, 2005 (70 FR 22636). On May 19, 2005, Canada alleged that the United States had not properly implemented the recommendations and rulings and requested the establishment of a dispute settlement panel under Article 21.5 of the DSU to review this implementation. The panel was established on June 1, 2005.

In its request under Article 21.5, Canada alleges that Commerce failed to implement the recommendations and rulings of the DSB by using “zeroing” in aggregating levels of dumping determined on a transaction-to-transaction basis.

The specific measures identified by Canada as inconsistent with U.S. WTO obligations under the AD Agreement and SCM Agreement are: (1) Notice of Determination Under Section 129 of the Uruguay Round Agreements Act: Antidumping Measures on Certain Softwood Lumber Products From Canada, 70 FR 22636 (May 2, 2005); and (2) Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Softwood Lumber Products from Canada, 67 FR 36068 (May 22, 2002).

The People's Republic of China, the European Communities, India, Japan, and New Zealand have indicated their interest to participate in the dispute as third parties.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in this dispute. Persons submitting comments may either send one copy by fax to Sandy McKinzy at [phone], or transmit a copy electronically to [e-mail], Attn: “DS264 Dispute” in the subject line. For documents sent by fax, USTR requests that the submitter provide a confirmation copy to the electronic mail address listed above.

Comments must be in English. USTR encourages the submission of documents in Adobe PDF format, as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.

A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitter. Confidential business information must be clearly designated as such and the submission must be marked “BUSINESS CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page of the submission.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitting person believes that information or advice may qualify as such, the submitting person—

(1) Must clearly so designate the information or advice;

(2) Must clearly mark the material as “Submitted in Confidence” at the top and bottom of each page of the cover page and each succeeding page; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened, the U.S. submissions to that panel, the submissions, or non-confidential summaries of submissions, to the panel received from other participants in the dispute, as well as the report of the panel; and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket No.WT/DS-264, Lumber Antidumping Dispute) may be made by calling the USTR Reading Room at [phone]. The USTR Reading Room is open to the public from 9:30 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday.

Daniel E. Brinza,

Assistant United States Trade Representative for Monitoring and Enforcement.