[Federal Register Volume 84, Number 175 (Tuesday, September 10, 2019)]
[Notices]
[Pages 47484-47485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19533]


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DEPARTMENT OF COMMERCE

International Trade Administration


North American Free Trade Agreement (NAFTA), Article 1904 
Binational Panel Review: Notice of NAFTA Panel Decision

AGENCY: United States Section, NAFTA Secretariat, International Trade 
Administration, Department of Commerce.

ACTION: Notice of NAFTA Interim Panel Decision and Order in the matter 
of Softwood Lumber from Canada (Secretariat File Number: USA-CDA-2018-
1904-03).

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SUMMARY: On September 4, 2019, the Binational Panel issued its Interim 
Decision and Order in the matter of Softwood Lumber from Canada. The 
Binational Panel affirmed in part and remanded in part the Final 
Determination by the United States International Trade Commission 
(Commission).

FOR FURTHER INFORMATION CONTACT: Paul E. Morris, United States 
Secretary, NAFTA Secretariat, Room 2061, 1401 Constitution Avenue NW, 
Washington, DC 20230, (202) 482-5438.

SUPPLEMENTARY INFORMATION: Chapter 19 of Article 1904 of NAFTA provides 
a dispute settlement mechanism involving trade remedy determinations 
issued by the Government of the United States, the Government of 
Canada, and the Government of Mexico. Following a Request for Panel 
Review, a Binational Panel is composed to review the trade remedy 
determination being challenged and issue a binding Panel Decision. 
There are established NAFTA Rules of Procedure for Article 1904 
Binational Panel Reviews (Rules) and the NAFTA Panel Decision has been 
notified in accordance with Rule 70. For the complete Rules, please see 
https://www.nafta-sec-alena.org/Home/Texts-of-the-Agreement/Rules-of-Procedure/Article-1904.
    Panel Decision: On September 4, 2019, the Binational Panel issued 
its Interim Decision and Order which affirmed in part and remanded in 
part the Final Determination by United States International Trade 
Commission. In accordance with NAFTA Article 1904.8, for reasons more 
fully set forth in within the Analysis section of the Decision (which 
shall be controlling in the event of conflict), and based upon the 
evidence in the administrative record, the applicable law, the written 
submissions of the Parties, and oral argument at the Panel's hearing, 
the Panel remands the Commission's determinations as follows:
    With respect to the Business Cycle and Conditions of Competition, 
the Panel remands this issue to the Commission and directs the 
Commission to reconsider the record evidence in relation to the 
business cycle(s) distinctive to the U.S. lumber industry, and to apply 
its findings in its analysis of volume, price effects, impact, and 
causation.
    With respect to the use of Post-Petition data, the Panel remands 
the Commission's decision to reduce the weight it accorded to interim 
2017 data and directs the Commission to provide a reasoned 
determination on whether or not to reduce the weight accorded to 
interim 2017 data;
    The Panel directs the Commission to clarify whether or not it is 
also reducing the weight accorded to third- and fourth-quarter 2017 
data. If, upon reconsideration, the Commission decides to reduce the 
weight given to post-petition data, the Commission is further directed 
to clarify what weight, if any, it is giving to post-petition data and 
the reasons for this determination.
    With respect to the Substitutability conclusions, the Panel remands 
the matter to the Commission, and directs it to reconsider its 
calculation of substitution elasticity, explaining how it reached its 
conclusion and demonstrating how that conclusion was applied in the 
Commission's analysis of volume, price effects, impact, and causation; 
and demonstrate how, and to what extent, the limitations to 
substitutability implied in its conclusion that the goods were ``at 
least moderately substitutable'' factored into the Commission's 
analysis of volume, price effects, impact, and causation.
    With respect to the Volume analysis, the Panel remands this 
determination to the Commission and directs the Commission to consider 
all record evidence to demonstrate how, and to what extent, the 
limitations to substitutability implied in its conclusion that the 
goods were ``at least moderately substitutable'' factored into its 
conclusion that subject imports experienced significant gains in market 
share directly at the expense of the domestic industry. The Panel 
directs the Commission to further reconsider its volume analysis as the 
Commission determines appropriate.
    With respect to the Price Effects analysis, as to the Domestic 
Capacity aspect of the price suppression analysis, the Panel remands 
this determination to the Commission and directs the Commission to 
consider whether to take the more recent Forest Economic Advisors 
(``FEA'') data into account in its domestic capacity analysis, explain 
its decision, and, if it decides to take the updated FEA data into 
account, reconsider its price effects analysis as it determines is 
appropriate.
    As to the Different Softwood Species aspect of the price 
suppression analysis, the Panel remands this determination to the 
Commission and directs the Commission to reconsider its conclusion that 
the prices of different species closely track each other to take into 
consideration that price movements of one species ``affect'' prices of 
other species, the existence of a ``great difference in price 
movement'' of one species compared to another, and that prices for 
different species ``generally track'' each other, as well as any other 
record evidence, and to determine what effect such reconsideration has 
on its price suppression analysis.
    As to the Cost of Goods Sold (``COGS'') and Pricing Trends aspect 
of the price suppression issue, the Panel remands this determination to 
the Commission and directs the Commission to reconsider its COGS and 
price trends analysis to take into account the Commission's finding 
that subject imports and domestic products are at least moderately 
substitutable, and determine what effect such reconsideration has on 
its finding that subject imports prevented price increases which 
otherwise would have occurred to a significant degree.
    With respect to the Questionnaire Responses aspect of the price 
suppression analysis, the Panel remands this determination to the 
Commission and directs the Commission to reconsider the record 
evidence, its conclusion that purchasers confirmed purchasing subject 
imports rather than

[[Page 47485]]

domestic product solely due to their lower prices, and to determine 
what effect such reconsideration has on its price suppression analysis.
    With respect to the Impact issue, the Panel found that the 
Commission's finding of adverse impact is lawful and supported by 
substantial evidence in light of its determinations regarding post-
petition data, substitutability, volume, price effects, and the 
business cycle, which have been remanded elsewhere in this decision. 
If, in any of these remands, the Commission reaches a different finding 
or conclusion on the particular issue, then the Panel directs the 
Commission to determine and explain what effect such reconsideration 
has on its impact analysis.
    With respect to the Causation issue, the Panel found that the 
Commission's finding of causation is lawful and supported by 
substantial evidence in light of its determinations regarding volume, 
price effect, and impact. If, after reconsideration, the Commission 
reaches a different finding or conclusion on any of these issues, then 
the Panel directs the Commission to determine and explain what effect 
such reconsideration has on its causation analysis.
    The Panel ordered the Commission to submit its redetermination on 
remand within 90 days from the issuance of the Interim Panel Decision 
and Order. For the full Interim Panel Decision and Order, please see 
https://www.nafta-sec-alena.org/Home/Dispute-Settlement/Decisions-and-Reports.

    Dated: September 5, 2019.
Paul E. Morris,
U.S. Secretary, NAFTA Secretariat.
[FR Doc. 2019-19533 Filed 9-9-19; 8:45 am]
 BILLING CODE 3510-GT-P