[Federal Register Volume 66, Number 168 (Wednesday, August 29, 2001)]
[Notices]
[Pages 45724-45725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21832]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/DS-____]


WTO Dispute Settlement Proceeding Regarding the U.S. Department 
of Commerce Preliminary Countervailing Duty Determination and 
Preliminary Critical Circumstances Determination Concerning Certain 
Softwood Lumber From Canada, and Section 777a(e)(2)(A) and (B) of the 
Tariff Act of 1930

AGENCY: Office of the United States Trade Representative.

ACTION: Notice; request for comments.

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SUMMARY: The Office of the United States Trade Representative (USTR) is 
providing notice that on August 21, 2001, the United States received 
from Canada a request for consultations under the Marrakesh Agreement 
Establishing the World Trade Organization (WTO Agreement) regarding the 
U.S. Department of Commerce (DOC) preliminary countervailing duty 
determination and preliminary critical circumstances determination 
concerning certain softwood lumber from Canada, as well as section 
777a(e)(2)(A) and (B) of the Tariff Act of 1930 (19 U.S.C. 1677f-
1(e)(2)(A) and (B)). Canada alleges that:
     DOC's preliminary countervailing duty determination is 
inconsistent with Articles 1, 2, 10, 14, 17.1, 17.5, 19.4, and 32.1 of 
the Agreement on Subsidies and Countervailing Measures (SCM Agreement) 
and Article VI:3 of the General Agreement on Tariffs and Trade 1994 
(GATT 1994);
     DOC's preliminary critical circumstances determination is 
inconsistent with Articles 17.1, 17.3, 17.4, 19.4, and 20.6 of the SCM 
Agreement; and
     Section 777A(e)(2)(A) and (B) of the Tariff Act of 1930, 
19 CFR Secs. 351.214(k) and 351.213(b) and (k), and the operation of 
these provisions in the DOC countervailing duty investigation of 
certain softwood lumber products from Canada are inconsistent with U.S. 
obligations under Article XVI:4 of the WTO Agreement, Article VI:3 of 
the GATT 1994, and Articles 10, 19.3, 19.4, 21.1, 21.2, 32.1, and 32.5 
of the SCM Agreement.
    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 September 20, 2001 to be assured of timely 
consideration by USTR.

ADDRESSES: Submit comments to Sandy McKinzy, Monitoring and Enforcement 
Unit, Office of the General Counsel, Room 122, Office of the United 
States Trade Representative, 600 17th Street, N.W., Washington, D.C., 
20508, Attn: Softwood Lumber dispute. Telephone: (202) 395-3582.

FOR FURTHER INFORMATION CONTACT: Willis S. Martyn, Associate General 
Counsel, Office of the United States Trade Representative, 600 17th 
Street, N.W., Washington, D.C., (202) 395-3582.

SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round 
Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and 
opportunity for comment be provided after the United States submits or 
receives a request for the establishment of a WTO dispute settlement 
panel. Consistent with this obligation, but in

[[Page 45725]]

an effort to provide additional opportunity for comment, USTR is 
providing notice that consultations have been requested pursuant to the 
WTO Dispute Settlement Understanding. If such consultations should fail 
to resolve the matter and a dispute settlement panel is established 
pursuant to the DSU, such panel, which would hold its meetings in 
Geneva, Switzerland, would be expected to issue a report on its 
findings and recommendations within six to nine months after it is 
established.

Major Issues Raised by Canada

    The notice of the DOC preliminary countervailing duty determination 
and preliminary critical circumstances determination concerning certain 
softwood lumber from Canada was published in the Federal Register on 
August 17, 2001. The notice explains the basis for DOC's preliminary 
determinations that Canada provides countervailable subsidies to the 
Canadian lumber industry and that critical circumstances exist. The 
notice further states that DOC will instruct the U.S. Customs Service 
to suspend liquidation of all entries of certain softwood lumber from 
Canada that are entered, or withdrawn from warehouse, for consumption 
on or after May 19, 2001. In addition, importers will be required to 
post a cash deposit or bond equal to the 19.31 percent ad valorem 
subsidy rate calculated by DOC for all imports that are entered, or 
withdrawn from warehouse, for consumption on or after August 17, 2001. 
In its panel request, Canada describes its claims against DOC's 
determinations in the following manner:

    Regarding the preliminary countervailing duty determination, 
Canada considers this determination to be inconsistent with U.S. 
obligations under Articles 1, 2, 10, 14, 17.1, 17.5, 19.4, and 32.1 
of the SCM Agreement and Article VI(3) of GATT 1994. Such 
inconsistencies include the determination's treatment of stumpage as 
a ``financial contribution'', its finding that stumpage is 
``specific'', its presumption that an alleged benefit from stumpage 
passes through an arm's-length transaction to a downstream 
recipient, its measurement of the ``adequacy of remuneration'' by 
reference to conditions in another country rather than prevailing 
market conditions in Canada, and its inflation of the subsidy found 
by calculating a ``weighted average country-wide rate'' based upon 
only a portion of Canadian exports of softwood lumber to the United 
States.
    With respect to the preliminary critical circumstances 
determination, Canada considers this determination to be 
inconsistent with Articles 17.1, 17.3, 17.4, 19.4, and 20.6 of the 
SCM Agreement because it is based upon an alleged export subsidy 
that was found to be de minimis, purports to apply a rate that is in 
excess of the rate determined for subsidies found to have been 
bestowed inconsistently with GATT 1994 and the SCM Agreement, was 
made without the requisite finding of injury caused by massive 
imports of softwood lumber benefiting from this alleged export 
subsidy, and was based on a distorted finding of ``massive 
imports''. Furthermore, there is no basis in the SCM Agreement for 
the application of provisional measures pursuant to such a 
determination.

    Section 777a(e)(2)(A) and (B) of the Tariff Act of 1930 provides 
that, in certain situations, DOC may limit its investigation to less 
than all known exporters or producers of the subject merchandise or 
calculate a single, country-wide subsidy rate to be applied to all 
exporters and producers. The regulations at 19 CFR 351.214(k) and 
Sec. 351.213(b) and (k) concern administrative reviews of 
countervailing duty orders. In its panel request, Canada describes its 
claims against section 777a(e)(2)(A) and (B) and the regulations in the 
following manner:

    The U.S. measures at issue with regard to expedited and 
administrative reviews are section 777A(e)(2)(A) and (B) of the 
Tariff Act of 1930, U.S. Department of Commerce regulations at 19 
CFR 351.214(k) and Sec. 351.213(b) and (k), and the operation of 
these measures in the ongoing U.S. countervailing duty proceeding 
against certain softwood lumber products from Canada. Canada 
considers these measures to be inconsistent with U.S. obligations 
under Article VI:3 of the GATT 1994 and Articles 10, 19.3, 19.4, 
21.1, 21.2 and 32.1 of the SCM Agreement. Canada also considers that 
the United States has failed to ensure that its laws and regulations 
are in conformity with its WTO obligations as required by Article 
32.5 of the SCM Agreement and Article XVI:4 of the WTO Agreement.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Comments must be in 
English and provided in fifteen copies. 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 commenter. Confidential business information must be 
clearly marked ``BUSINESS CONFIDENTIAL'' in a contrasting color ink at 
the top of each page of each copy.
    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 submitter believes that information 
or advice may qualify as such, the submitter--
    (1) Must so designate the information or advice;
    (2) Must clearly mark the material as ``SUBMITTED IN CONFIDENCE'' 
in a contrasting color ink at the top of each page of each copy; 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, N.W., Washington, D.C. 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 WTO/DS-__, Softwood Lumber Dispute) may be made by calling 
Brenda Webb, (202) 395-6186. The USTR Reading Room is open to the 
public from 9:30 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through 
Friday.

Julia Christine Bliss,
Acting Assistant United States Trade Representative for Monitoring and 
Enforcement.
[FR Doc. 01-21832 Filed 8-28-01; 8:45 am]
BILLING CODE 3190-01-M