[Federal Register Volume 67, Number 204 (Tuesday, October 22, 2002)]
[Notices]
[Pages 64957-64959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26762]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/DS-264]


WTO Dispute Settlement Proceeding Regarding the U.S. Department 
of Commerce Final Antidumping Determination Concerning Certain Softwood 
Lumber From Canada

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 September 13, 2002, the United 
States received a request from the Government of Canada for 
consultations under the Marrakesh Agreement Establishing the World 
Trade Organization (``WTO Agreement'') regarding the U.S. Department of 
Commerce (``DOC'') final determination of sales at less than fair value 
with respect to certain softwood lumber from Canada. The panel request 
alleges that the initiation of the investigation, the conduct of the 
investigation, and the final determination are inconsistent with 
various provisions of the General Agreement on Tariffs and Trade 1994 
(``GATT 1994'') and the Agreement on

[[Page 64958]]

Implementation of Article VI of GATT 1994. 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 December 1, 2002 to be assured of timely 
consideration by USTR.

ADDRESSES: Comments should be submitted (i) electronically, to 
[email protected], Attn: ``DS264 Dispute'' in the subject line, or (ii) 
by mail to Sandy McKinzy, Monitoring and Enforcement Unit, Office of 
the General Counsel, Room 122, Office of the Untied States Trade 
Representative, 600 17th Street, NW., Washington, DC 20508, Attn: DS264 
Dispute, with a confirmation copy sent electronically to the email 
address above or by fax to 202-395-3640.

FOR FURTHER INFORMATION CONTACT: Amber L. Cottle, Assistant General 
Counsel, Office of the United States Trade Representative, 600 17th 
Street, NW., Washington, DC (202) 395-3581.

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 an effort to provide 
additional opportunity for comment, USTR is providing notice that 
consultations have been requested pursuant to the WTO Dispute 
Settlement Understanding (``DSU''). 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 and Legal Basis of the Complaint

    The notice of the DOC final determination of sales at less than 
fair value with respect to certain softwood lumber from Canada was 
published in the Federal Register on April 2, 2002, and the notice of 
the DOC amended final determination was published on May 22, 2002. The 
notices explain the basis for the DOC's final determination that 
certain softwood lumber from Canada is being sold, or is likely to be 
sold, in the United States at less than fair value.
    In its consultation request, Canada describes its claims in the 
following manner:

    The measures it issue include the initiation of the 
investigation, the conduct of the investigation and the Final 
Determination. The Government of Canada considers these measures 
and, in particular, the determinations made and methodologies 
adopted therein by the United States Department of Commerce under 
authority of the United States Tariff Act of 1930, to violate the 
Anti-dumping Agreement and the GATT 1994 (in particular Articles 1 
and 18.1 of the Anti-dumping Agreement and Article VI of the GATT 
1994) for, among others, the following reasons:
    1. The United States Department of Commerce improperly initiated 
the anti-dumping investigation that resulted in the Final 
Determination in contravention of Article 5 of the anti-dumping 
Agreement (including Articles 5.2, 5.3, 5.4 and 5.8). The 
application to initiate filed by the U.S. applicant failed to 
provide evidence of dumping, injury and causation that was 
reasonably available, including prices at which softwood lumber was 
sold in Canada. As a whole, the application did not contain 
``sufficient evidence'' to justify the initiation of an 
investigation. Further, the initiation of the investigation was not 
based on an objective and meaningful examination and determination 
of the degree of support for the application by the domestic 
industry because the Continued Dumping and Subsidy Offset Act of 
2000 (CDSOA), by requiring that a member of the U.S. industry 
support the application as a condition of receiving payments under 
the CDSOA, made an objective and meaningful examination of industry 
support for the application impossible.
    2. The United States Department of Commerce improperly applied a 
number of methodologies inconsistent with Article VI of the GATT 
1994 and Articles 1, 2 (including Articles 2.1, 2.2, 2.4 and 2.6) 
and 9.3 of the Antidumping Agreement as a result of improper and 
unfair comparisons between the export price and the normal value, 
resulting in artificial and/or inflated margins of dumping. These 
included:
    (a) Reliance on unrepresentative home market prices and improper 
determinations that sales of the like products in Canada were not in 
the ordinary course of trade, the effect of which led the Department 
of Commerce to disregard a significant proportion of domestic sales 
of like products (identical or similar goods) for purposes of making 
price to price comparisons and for purposes of calculating profit in 
determining constructed values;
    (b) Failure to properly allocate costs in calculating the cost 
of production of the like product in Canada, including the failure 
to extend the value-based cost allocation methodology to take into 
account differences in lumber dimension, the effect of which led to 
improperly determining constructed values and profit, distortions in 
the application of the sales below cost test, and limiting the use 
of like products for purposes of making price to price comparison;
    (c) Application of the practice of ``zeroing'', the effect of 
which was to inflate margins of dumping and which, in the 
recommendations and rulings of the Dispute Settlement Body in an 
earlier dispute, was found to be consistent with the Anti-dumping 
Agreement when establishing the existence of margins of dumping;
    (d) Failure, when conducting comparisons between like products, 
to make due allowance for differences that affect price 
comparability;
    (e) The use of an unreasonable amount for profit in the 
calculation of constructed values;
    (f) Failure to apply a reasonable method in calculating amounts 
for administrative, selling and general expenses, including improper 
adjustment to export price and an improper allocation of genral and 
administrative expenses financial expenses; and
    (g) Failure to apply a reasonable method to account for by-
product revenues as offsets in calculating cost of production.
    3. The United States Department of Commerce failed to establish 
a clear, definitive and proper product scope for investigation and 
improperly initiated and pursued the investigation with regard to 
certain products contrary to Articles 5.1, 5.2, 5.4 and 5.8 of the 
Anti-dumping Agreement. The Department of Commerce further failed to 
give parties opportunity to defned their interests in contravention 
of Article X:3(a) of the GATT 1994 and Article 6 of the Anti-dumping 
Agreement (including Articles 6.1, 6.2, 6.4 and 6.9), by failing to 
issue timely decisions and provide reasonable schedules for briefing 
and hearings, and to adequately consider the representations of the 
parties.

Public Comment: Requirement for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Persons submitting 
commerns may either send one copy by U.S. mail, first class, postage 
prepaid, to Sandy McKinzy at the address listed above or transmit a 
copy electronically to [email protected], with ``DS264'' in the subject 
line. For documents sent by U.S. mail, USTR requests that the submiter 
provide a confirmation copy, either electronically or by fax to 202-
395-3640. 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 informaiton contained in a comment 
submitted by that person be treated as confidential business 
information must certify that such informaton is business confidential

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and would not customarily be released to the public by the submitter. 
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 submitting person believes that 
information or advice may qualify as such, the submitting person--
    (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, NW., Washington, DC 20508. The public file will include non-
confidential comments received by USTR from the public with respect to 
the dispute; the U.S. submissions to the panel in the dispute, 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 may be made by calling the USTR 
Reading Room at (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.

Daniel E. Brinza,
Assistant United States Trade Representative for Monitoring and 
Enforcement.
[FR Doc. 02-26762 Filed 10-21-02; 8:45 am]
BILLING CODE 3190-01-M