1 The “WTO cases considered here are, in order, Panel Report, United States—Preliminary Determinations with Respect to Certain Softwood Lumber from Canada, WT/DS236/R (Sept. 27, 2002), Appellate Body Report, United States—Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, WT/DS257/AB/R (Jan. 19, 2004), Appellate Body Report, United States—Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/AB/R (Aug. 11, 2004), and Panel Report, United States—Investigation of the International Trade Commission in Softwood Lumber from Canada, WT/DS277/R (Mar. 22, 2004).

2 The nafta cases considered here are, in order, In re Certain Softwood Lumber Products from Canada, Final Affirmative Countervailing Duty Determination, USA–CDA–2002–1904–03 (nafta Ch. 19 Binational [U.S.– Can.] Panel Aug. 13, 2003, June 7, 2004, Dec. 1, 2004, May 23, 2005, Oct. 5, 2005, & Mar. 17, 2006), In re Certain Softwood Lumber Products from Canada, Final Affirmative Antidumping Determination, USA–CDA–2002–1904–02 (nafta Ch. 19 Binational [U.S.–Can.] Panel July 17, 2003, Mar. 5, 2004, & June 9, 2005), In re Certain Softwood Lumber Products from Canada, Final Affirmative Threat of Injury Determination, USA–CDA–2002– 1904–07 (nafta Ch. 19 Binational [U.S.–Can.] Panel Sept. 5, 2003, Apr. 19, 2004, & Aug. 31, 2004), and/» re Certain Softwood Lumber Products from Canada, Order, ECC–2004–1904–01 USA (nafta Ch. 19 Extraordinary Challenge Comm. Aug. 10, 2005).

3 The title “Lumber IV,” which is used here to refer to the cases mentioned in the two preceding footnotes, corresponds with the appellation popularly used in the media: see, for instance, Marzena, Czarnecka, Softwood Lumber: The War Without End? Lexpert, Feb. 2006, at 59 Google Scholar. The title does not correspond to the informal appellation that the WTO has given to certain individual softwood lumber cases.

4 In 1982, the U.S. Coalition for Fair Canadian Lumber Imports filed a petition with the DOC alleging that certain provincial and federal programs related to Canada’s forestry sector were countervailable subsidies. The investigation rejected the petition, finding that stumpage rights were not provided to a “specific enterprise or industry, or group of enterprises or industries” within the meaning of 19 U.S.C. §1677(5)(B)(ii) and that stumpage did not constitute the “provision of goods or services at preferential rates,” 19 U.S.C. § 1677(5). Certain Softwood Products from Canada, 48 Fed. Reg. 24, 159 (May 31, 1983) [hereinafter Lumber I]. In another petition filed by the coalition in 1986, the DOC reversed its previous position and issued a preliminary affirmative determination that certain provincial stumpage systems constituted countervailable subsidies. Certain Softwood Lumber Products from Canada, 51 Fed. Reg. 37, 453 (Oct. 22, 1986) [hereinafter Lumber II]. The change in position resulted both from a new factual record and a revised interpretation of U.S. law. Lumber II ended when Canada and the United States entered into a memorandum of understanding (MOU) in December 1986, pursuant to which Canada agreed to collect a charge on exports of softwood lumber to the United States in an amount that was about equal to the amount calculated in the preliminary determination. Under the terms of the MOU, the tax could be reduced or eliminated for provinces that instituted “replacement measures”—for example, increases either in the amount of stumpage fees or in other charges. As a consequence, export charges for British Columbia and Quebec were, in time, reduced or substantially eliminated. Certain Atlantic provinces were also eventually exempted. Canada then elected to terminate the MOU in September 1991. The DOC self–initiated a third investigation in October. The result of this investigation was an affirmative subsidy determination, which found that provincial stumpage programs and log export restraints in British Columbia conferred countervailable subsidies. Certain Softwood Lumber Products from Canada, 57 Fed. Reg. 22, 570 (May 28, 1992) [hereinafter Lumber III]. This determination was appealed to a binational panel under the Canada–United States Free Trade Agreement (FTA). The panel concluded that the DOC’s determination that the export restraints were “specific” was unsupported by substantial evidence. The panel remanded to the DOC on this and other issues. Softwood Lumber from Canada, USA–92–1904–01 (May 6, 1993). On remand the DOC again found a countervailable subsidy, and once more upon review the FTA panel held that the DOC had inadequately addressed certain issues, including specificity. Softwood Lumber from Canada, Remand, USA–92–1904–01 (Dec. 17, 1993). The panel ordered DOC to rescind the countervailing duty order, which it did on January 6, 1994. Certain Softwood Lumber Products from Canada, 59 Fed. Reg. 12, 584 (March 17, 1994). Later, negotiations between Canada and the United States resulted in the Softwood Lumber Agreement of May 1996.

5 Marrakesh Agreement Establishing the World Trade Organization [hereinafter WTO Agreement], Apr. 15, 1994, in World Trade Organization, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 4 (1999)Google Scholar [hereinafter The Legal Texts].

6 North American Free Trade Agreement, Dec. 17, 1992, ch. 19, 32 ILM 289 & 605 (1993) [hereinafter NAFTA].

7 The Coalition for Fair Lumber Imports Executive Committee comprises Hood Industries, International Paper Co., Moose River Lumber Co., New South, Inc., Plum Creek Timber Co., Potlatch Corp., Seneca Sawmill Co., Shearer Lumber Products, Shuqualak Lumber Co., Sierra Pacific Industries, Swift Lumber, Inc., Temple–Inland Forest Products, and Tolleson Lumber Co., Inc.

8 As of this writing, the terms of the settlement have yet to be finalized (or at least made public). Both the basic terms and an initialed version of the settlement can be found on the Web site of the Canadian Ministry of Foreign Affairs and International Trade, at <http://www.international.gc.ca/eicb/softwood/basic–terms–en.asp> and <http://www.international.gc.ca/eicb/softwood/pdfs/InitialledSLA2006–en.pdf>, respectively.

9 Article 1.1 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, in The Legal Texts, supra note 5, at 275, considers a subsidy to exist where there is a financial contribution by a government or where there is any form of income or price support, and a benefit is thereby conferred. In order to be actionable under the SCM Agreement, the subsidy must also meet the requisite degree of specificity under Article 2.

10 The relevant provisions in U.S. law are 19 U.S.C. §1671 (subsidization), 19 U.S.C. §1673 (dumping), and 19 U.S.C. §1671 (a)(2)(A)(i)–(ii) and §1673(2)(A)(i)–(ii) (material injury).

11 Softwood Lumber Agreement, U.S.–Can., May 29, 1996, 35 ILM 1195 (1996).

12 66 Fed. Reg. 43,186 (Aug. 17, 2001).

13 See supra note 1.

14 The panel found that the DOC failed to determine the existence and amount of benefit to producers on the basis of prevailing market conditions in Canada, as required by SCM Agreement Articles 1.1(b), 14 [chapeau], (d).

15 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A [hereinafter Antidumping Agreement], in The Legal Texts, supra note 5, at 168.

16 67 Fed. Reg. 36, 069 (May 22, 2002).

17 “In a poll of its members in June 2003, the Canadian Federation of Independent Business found that 3 3% of [British Columbia’s] small businesses felt their business was significantly harmed by the lumber dispute and a further 37% were slightly harmed.” British Columbia Ministry of Management Services, Lumber Dispute Big Issue for Small Business, Small Business Quarterly, 3d quarter, 2004, at 2, 2–3 Google Scholar, available at <http://www.bcstats.gov.bc.ca/pubs/sbq/sbq04q3.pdf>. The article also noted:

Id. at 3.

18 See supra note 1.

19 See supra note 9.

20 General Agreement on Tariffs and Trade, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, [hereinafter GATT 1994] in The Legal Texts, supra note 5, at 21

21 Notice of Implementation Under Section 129 of the Uruguay Round Agreements Act; Countervailing Measures Concerning Certain Softwood Lumber Products from Canada, 69 Fed. Reg. 75,305 (Dec. 16, 2004).

22 The United States argued before the compliance panel that the Appellate Body’s original decision required pass–through analysis only with respect to transactions between tenured timber harvester/sawmills and unrelated, non–tenure–holding sawmills. The compliance panel disagreed, holding that the United States was noncompliant because it had failed to conduct a pass–through analysis in respect of sales (found by the DOC not to be at arm’s length) of logs by tenured timber harvesters, whether or not they also produce lumber, to unrelated lumber producers, whether or not they also hold tenure rights. The panel also faulted the DOC because in calculating its subsidy numerator, it included transactions for which it had not demonstrated that the benefit of subsidized log inputs had passed through to the processed product. See Panel Report, United States—Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, Recourse by Canada to Article 21.5, WT/DS257/RW, paras. 4.73, 4.82, 4.103 (Aug. 1, 2005).

23 Appellate Body Report, United States—Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada, Recourse by Canada to Article 21.5, WT/DS257/AB/RW, para. 96 (Dec. 5, 2005).

24 See supra note 1.

25 Notice of Determination Under Section 129 of the Uruguay Round Agreements Act: Antidumping Measures on Certain Softwood Lumber Products from Canada, 70 Fed. Reg. 22, 636 (May 2, 2005). Article 2.4.2 of the Antidumping Agreement states that “the existence of margins of dumping during the investigation phase shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all comparable export transactions or by a comparison of normal value and export prices on a transaction–to transaction basis.”

26 By comparison, in an investigation that employed a zeroing methodology, amounts by which the export price exceeded the normal value would simply be counted as zero.

27 Panel Report, United States—Final Dumping Determination on Softwood Lumber from Canada, Recourse to Article 21.5 of the DSU by Canada, WT/DS264/RW, para. 5.28 (April 3, 2006).

28 In a decision of July 28, 2006, the Appellate Body found that the transaction–to–transaction methodology “is a multi–step exercise in which the results of transaction–specific comparisons are inputs that are aggregated in order to establish the margin of dumping” and that zeroing in such a methodology did not conform to the WTO Agreement “in that it results in the real values of certain export transactions being altered or disregarded.” Appellate Body Report, United States—Final Dumping Determination on Softwood Lumber from Canada, Recourse to Article 21.5 of the DSU by Canada, WT/DS264/AB/RW, paras. 87–88 (July 28, 2006).

29 See supra note 1.

30 The panel noted:

WT/DS277/R, para. 7.89.

31 See [Section 129 Consistency Determination:] Views of the Commission, Inv. 701-TA-414 & 731-TA-938 (Nov. 24, 2004), at <http://www.usitc.gov/fopin.129.pdf>. A majority of the ITC understood its task on redetermination as follows: “the Commission understands that the WTO wants the Commission to provide more explanation and reasoning for its decision.” However, it also reopened the record and collected more information and evidence. Id., pp. 5–6.

32 Panel Report, United States—Investigation of the International Trade Commission in Softwood Lumber from Canada, Recourse to Article 21.5 of the DSU by Canada, WT/DS277/RW (Nov. 15, 2005).

33 Appellate Body Report, United States—Investigation of the International Trade Commission in Softwood Lumber from Canada, Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, para. 138 (April 13, 2006).

34 See supra note 2.

35 Notice of Final Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances Determination: Certain Softwood Lumber Products from Canada, 67 Fed. Reg. 15, 455 (April 2, 2002), amended 67 Fed. Reg. 36, 070 (May 22, 2002).

36 Under nafta Article 1904(13), binational panel decisions may be subject to Extraordinary Challenge where there are allegations that a panel member is guilty of misconduct, the panel seriously departed from a fundamental rule of procedure, or the panel manifestly exceeded its powers, authority, or jurisdiction.

37 See supra note 2.

38 Murray v. Schooner Charming Betsy, 6 U.S. (2 Cranch) 64 (1804).

39 USA–CDA–2002–1904–02, supra note 2, Third Remand, at 42 (June 9, 2005).

40 See supra note 2.

41 USA–CDA–2002–1904–07, supra note 2, Second Remand, at 3 (Aug. 31, 2004).

42 Id. at 7.

43 See supra note 1.

44 Tembec v. United States, Consol. Ct. No. 05–00028 (Ct. Int’l Trade).

45 See [Section 129 Consistency Determination:] Views of the Commission, supra note 31.

46 The Continued Dumping and Subsidy Offset Act of 2000, 19 U.S.C. §1675c (also known as the “Byrd Amendment”) came into effect in October 2000. It provided that duties assessed pursuant to a countervailing duty order, an antidumping duty order, or a finding under the Antidumping Act of 1921 were to be distributed on an annual basis to “affected domestic producers” for “qualifying expenditures.” In January 2003 the WTO Appellate Body determined that the law violated the WTO Agreement. In November 2004 the WTO authorized suspension of concessions by several countries in response. Congress partly repealed die law in December 2005, with full repeal scheduled in October 2007. nafta Article 1902(2) requires that changes to domestic antidumping and countervailing duty laws by nafta countries may be applied to goods from other nafta countries only if the amending statute expressly so specifies. The Byrd Amendment did not refer to either Canadian or Mexican goods and therefore, pursuant to U.S. legislation implementing nafta, could not be applied to Canadian or Mexican products.

47 See Lumber Coalition Files nafta Chapter 19 Constitutional Challenge, Inside U.S. Trade, Sept. 16, 2005 Google Scholar (on file with author).

48 See supra note 8 and accompanying text.

49 Article 58.1(c) of the Vienna Convention on the Law of Treaties, May 23, 1969, 1155 UNTS 331, allows for the suspension of a multilateral treaty by two parties to the treaty where the suspension is not prohibited, where it “does not affect the enjoyment by the other parties of their rights under the treaty or the performance of their obligations,” and where it is not incompatible with the object and purpose of the treaty. See Ontario Groups Sue U.S., Canada for Suspending nafta Lumber ECC, Inside U.S. Trade, May 19, 2006 Google Scholar (on file with author).

50 Distribution of Duties Still Big Obstacle to U.S.–Canada Lumber Deal, Inside U.S. Trade, May 5, 2006 Google Scholar (on file with author).

51 Article 11(1)(b) of the WTO Agreement on Safeguards, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, in The Legal Texts, supra note 5, at 315, states that “a [WTO] Member shall not seek, take or maintain any voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side.” See also GATT 1994, supra note 20, Art. XI. A long–standing GATT decision, EEC—Quantitative Restrictions Against Imports of Certain Products from Hong Kong, GATT B.I.S.D. (30th Supp.) at 129 (1983), holds that even quantitative restrictions having no trade impact violate GATT.

52 “[T]he applicable standard is neither de novo review as such, nor ‘total deference’, but rather the ‘objective assessment of the facts’.” Appellate Body Report, European Communities—Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, para. 117 (January 16, 1998).

53 See WTO Antidumping Agreement, supra note 15, Art. 17.6.

54 See supra note 38.

55 nafta Article 1904(8) states that the “panel may uphold a final determination, or remand it for action not inconsistent with the panel’s decision.” For further details on the interaction of binational panels with domestic agencies, see Chi, Carmody, Continental Conversations: Remand of Binational Panel Decisions Under nafta Ch. 19, in The First Decade of Nafta: The Future of Free Trade in North America 431 (Kevin, Kennedy ed., 2004)Google Scholar.

56 See, for example, the United States’ assertion that [Section 129 Consistency Determination:] Views of the Commission, supra note 31, circumvented the panel’s decision in In re Certain Softwood lumber Products from Canada (Final Affirmative Threat of Injury Determination), supra note 2, by providing for a new threat of injury determination. See also Canadian Appeal of WTO Lumber Decision to Focus on Standard of Review, Inside U.S. Trade, Nov. 18, 2005 Google Scholar (on file with author).

57 Appellate Body Report, Mexico—Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R (Mar. 6, 2006).

58 Id., para. 56.

59 Review of the Final Determination of the Antidumping Investigation on Imports of High Fructose Corn Syrup, Originating from the United States of America, MEX–USA–98–1904–01 (nafta Ch. 19 Binational [Mex.–U.S] Panel Apr. 15, 2002).