North American Free Trade Agreement, Article 1904 NAFTA Panel Reviews; Notice of Panel Decision

AGENCY:

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

ACTION:

Notice of panel decision.

SUMMARY:

On June 7, 2004, the binational panel issued its decision in the review of the final results of the affirmative countervailing duty re-determination on remand made by the International Trade Administration (ITA) respecting Certain Softwood Lumber Products from Canada (Secretariat File No. USA-CDA-2002-1904-03) affirmed in part and remanded in part the determination of the Department of Commerce. The Department will return the second determination on remand no later than July 30, 2004. A copy of the complete panel decision is available from the NAFTA Secretariat.

FOR FURTHER INFORMATION CONTACT:

Caratina L. Alston, United States Secretary, NAFTA Secretariat, Suite 2061, 14th and Constitution Avenue, Washington, DC 20230, (202) 482-5438.

SUPPLEMENTARY INFORMATION:

Chapter 19 of the North American Free-Trade Agreement (“Agreement”) establishes a mechanism to replace domestic judicial review of final determinations in antidumping and countervailing duty cases involving imports from the other country with review by independent binational panels. When a Request for Panel Review is filed, a panel is established to act in place of national courts to review expeditiously the final determination to determine whether it conforms with the antidumping or countervailing duty law of the country that made the determination.

Under Article 1904 of the Agreement, which came into force on January 1, 1994, the Government of the United States, the Government of Canada and the Government of Mexico established Rules of Procedure for Article 1904 Binational Panel Reviews (“Rules”). These Rules were published in the Federal Register on February 23, 1994 (59 FR 8686).

Panel Decision

On March 5, 2004, the Binational Panel remanded the Department of Commerce's final countervailing duty determination on remand. The following issues were remanded to the Department at the Department's request:

With the exception of its requests to correct a conversion factor, which is rendered moot by our decision, and to revise its profit adjustment with respect to Alberta, which is addressed in our discussion of profit adjustments, the Panel grants the remand sought by the Department to reconsider certain limited implementation issues. The issues for which this remand is granted are as follows:

(1) To consider the issue of adjustment for harvesting costs for Manitoba and Saskatchewan;

(2) To re-examine the calculation of the numerator in British Columbia;

(3) To correct its omission of Douglas-fir from the Vancouver Log Market prices used as domestic log prices in the British Columbia Coast species matching;

(4) To exclude the following categories of building logs in the Vernon price list from the benchmark calculation in Interior British Columbia: “spruce bldg logs,” “spruce bldg logs (dry),” “white pine (dry) bldg logs,” pine bldg logs” and “cedar bldg logs;”

(5) To exclude from the benchmark calculation for British Columbia the Revelstoke Community Forest Corp Log Sale Prices;

(6) To make the adjustments both downward and upward with respect to certain harvesting costs in Quebec;

(7) To re-evaluate whether Quebec mills use pulpwood imports to produce softwood lumber; and

(8) To exclude price listings for “pine” logs that were actually listings for “White Pine” logs in calculating the benchmark in Ontario.

The Panel further remanded on the following issues:

(1) The Department is directed to recalculate the benchmark price for stumpage in British Columbia taking into account the actual market conditions that govern the sale of timber harvesting authority in that province, including the fact that Crown stumpage fees are charged for stands rather than for the individual species.

(2) The Department is directed to recalculate the benchmark price in Ontario taking into account the actual market conditions that govern the sale of timber harvesting authority in that province.

(3) The Department is directed to recalculate the benchmark log prices for Quebec without use of the Sawlog Journal data. In the recalculation the Department must weight-average the import and Syndicates prices.

(4) The Department is directed to recalculate the Ontario benchmarks, without use of the Sawlog Journal data, and weight-average the imports with the KPMG domestic log sales information.

(5) The Department is directed to recalculate the benchmark log price for Manitoba without use of the import data.

(6) The Department is directed to recalculate the benchmark log price for Saskatchewan without use of the import data.

(7) The Department is directed to recalculate the benchmark log price for Alberta without use of the import data.

(8) The Department is directed to recalculate the benchmark for British Columbia and to explain the basis for its action. If the Department is able to calculate a benchmark with weight-averaging of the domestic and import data, it is directed to calculate a benchmark with weight-averaging of the domestic and import prices. In its recalculation the Department must determine whether there is substantial evidence to support the Douglas fir benchmark.

(9) The Department is directed to reconsider the adjustment for profit with respect to the benchmarks for all provinces. The Panel recognizes that it may not be unreasonable for the Department to reconsider the method used to estimate profit in Alberta, and accordingly, grants the remand request on this point. However, if the Investigating Authority cannot determine a better estimate of the amount of profit for Alberta, it is not authorized to change it.

(10) The Department is directed to recalculate the denominator to include the appropriate proportion of the production of smaller sawmills in all provinces, and to provide a reasoned explanation of any deviation from the proportion included in respect of the production of the large sawmills.

(11) The Department is directed to recalculate its exclusion analysis for Materiaux Blanchet's St. Pamphile Border Mill on a mill-based subsidy rate as it had determined in the original investigation.

The Investigating Authority is ordered to complete its remand determination by the firm date of July 30, 2004.