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United States - Countervailing Measures on Softwood Lumber from Canada - Report of the Panel
日期:2020/08/24
作者:Canada
文件編號:WT/DS533/R
附件下載:WTDS533R.pdf
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United States – Countervailing Measures on
Softwood Lumber from Canada

Report of the Panel

 

BCI deleted, as indicated [[***]]


TABLE OF CONTENTS

1  Introduction.. 21

1.1  Complaint by Canada. 21

1.2  Panel establishment and composition. 21

1.3  Panel proceedings. 21

2  Factual aspects. 22

2.1  The measures at issue. 22

3  Parties' requests for findings and recommendations. 23

4  Arguments of the parties. 25

5  Arguments of the thiRd parties. 25

6  Interim review.. 25

7  Findings. 25

7.1  General principles regarding treaty interpretation, standard of review, and burden of proof 25

7.1.1  Treaty interpretation. 25

7.1.2  Standard of review. 25

7.1.3  Burden of proof 27

7.2  Whether Article 14(d) required the USDOC to consider using, as a starting point in its benefit assessment, stumpage benchmarks from within certain "regional markets" in Canada. 27

7.2.1  Introduction. 27

7.2.2  Provision at issue. 28

7.2.3  Evaluation. 28

7.2.4  Conclusion. 38

7.3  Canada's claims that the USDOC improperly rejected "in‑market" prices as a stumpage benchmark in certain provinces. 38

7.3.1  Legal standard. 38

7.3.2  Whether the USDOC improperly rejected certain private market prices in Ontario as an appropriate stumpage benchmark. 40

7.3.2.1  Factual aspects. 40

7.3.2.2  Evaluation. 41

7.3.2.2.1  Administratively‑set Crown stumpage prices. 43

7.3.2.2.2  Flexible supply of Crown timber 44

7.3.2.2.3  Market concentration. 47

7.3.2.2.3.1  Whether the USDOC explained how market concentration interacts with other factors to effect price distortion. 47

7.3.2.2.3.2  Whether the USDOC was required to consider evidence relating to market concentration in the Hendricks Report 50

7.3.2.2.4  Representativeness of MNP Ontario survey. 53

7.3.2.2.5  Log prices in Ontario. 54

7.3.2.3  Conclusion. 56

7.3.3  Whether the USDOC improperly rejected BCTS auction prices in British Columbia as an appropriate stumpage benchmark. 56

7.3.3.1  Factual aspects. 56

7.3.3.2  Evaluation. 57

7.3.3.2.1  Nature of the British Columbia timber market 58

7.3.3.2.2  The three‑sale limit 62

7.3.3.2.3  Log export regulations. 65

7.3.3.2.4  Whether the log export regulation impacted the British Columbia interior 70

7.3.3.2.4.1  Whether log export regulations impact the British Columbia interior directly. 71

7.3.3.2.4.2  Whether the impact of log export regulations will "ripple" through from the coast to the interior 73

7.3.3.2.4.3  Conclusion regarding the effect of log export regulations on log prices in
the Interior 76

7.3.3.2.5  Conclusion. 77

7.3.4  Whether the USDOC improperly rejected auction prices in Québec as an appropriate stumpage benchmark. 77

7.3.4.1  Factual aspects. 77

7.3.4.2  Evaluation. 79

7.3.4.2.1  The government's share in Québec's stumpage market 79

7.3.4.2.2  Market concentration. 80

7.3.4.2.3  Sawmills' access to additional Crown timber 81

7.3.4.2.4  Correlation between auction bids and TSG prices. 83

7.3.4.2.4.1  Whether TSG‑holding sawmills and non‑sawmills have an incentive not to bid at
 above TSG prices at auction. 83

7.3.4.2.4.2  Whether the USDOC properly evaluated the Marshall Report 85

7.3.4.2.5  Unsold auction timber 89

7.3.4.2.6  Log‑processing requirements. 90

7.3.4.2.7  Conclusion. 93

7.3.5  Whether the USDOC improperly rejected log prices in Alberta as an appropriate
stumpage benchmark. 93

7.3.5.1  Factual background. 93

7.3.5.2  Evaluation. 94

7.3.5.2.1  Whether the USDOC, using its "tier‑one" analysis, improperly rejected the TDA log prices as a valid benchmark for Alberta. 95

7.3.5.2.2  Whether the USDOC improperly found under its "tier‑three" benchmark analysis
that TDA log prices were inconsistent with market principles. 97

7.3.5.2.2.1  Salvage timber 97

7.3.5.2.2.2  Sale of Crown‑origin logs. 102

7.3.5.2.2.3  Log export prohibition. 104

7.3.5.2.2.4  The Brattle and Kalt Reports. 106

7.3.5.2.2.5  Conclusion. 109

7.3.5.2.3  Whether the USDOC needed to assess that the TDA log prices were distorted as
 a result of government intervention. 109

7.3.5.3  Overall conclusion. 111

7.4  Whether the Nova Scotia Benchmark relates to the prevailing market conditions in
Alberta, Ontario, and Québec. 111

7.4.1  Evaluation. 111

7.4.1.1  Difference in species mix. 112

7.4.1.2  Difference in diameter at breast height 114

7.4.1.2.1  Intra‑province inconsistency. 115

7.4.1.2.2  Inter‑province inconsistency. 115

7.4.1.3  Implications of exclusion of pulpwood from benchmark price. 117

7.4.1.3.1  Mismatch in the conditions of sale. 118

7.4.1.3.2  Mismatch in the quality of timber compared. 120

7.4.1.3.3  Demand for timber from paper mills in Nova Scotia. 121

7.4.1.4  Difference in transportation‑related costs. 122

7.4.1.5  Impact of declining supply of timber in Nova Scotia. 123

7.4.1.6  Differences in growing and harvesting conditions. 124

7.4.1.7  Conclusion. 126

7.5  Canada's claim concerning the reliability of the Nova Scotia survey. 127

7.5.1  Legal basis for Canada's claim.. 127

7.5.2  Evaluation. 127

7.5.2.1  Specific flaws in the Nova Scotia survey. 127

7.5.2.1.1  Representativeness of data in the survey. 128

7.5.2.1.2  Definition of "transaction" 129

7.5.2.1.3  Exclusion of pulpwood transactions. 130

7.5.2.1.4  Conversion factor used to convert tonnes to cubic metres. 131

7.5.2.1.5  Errors detected in verification. 132

7.5.2.1.6  Use of the survey. 133

7.5.2.2  Conclusion. 134

7.6  Canada's claim concerning the USDOC's failure to consider the full remuneration paid by producers in Alberta, Ontario, Québec, and New Brunswick. 134

7.6.1  Legal standard. 134

7.6.2  Evaluation. 135

7.6.2.1  Costs not incorporated into the Nova Scotia benchmark. 135

7.6.2.2  Administrative costs were not directly related to stumpage prices. 137

7.6.2.3  Absence of evidence that provincial governments considered long‑term tenure
obligations when fixing stumpage prices. 137

7.6.2.4  Costs associated with long‑term tenure obligations were billed on separate invoices. 138

7.6.2.5  Conclusion. 138

7.7  Canada's claims concerning the USDOC's use of a Washington logs benchmark. 139

7.7.1  Introduction. 139

7.7.2  Legal standard. 139

7.7.3  The USDOC's use of the Washington Log benchmark for British Columbia. 140

7.7.3.1  The appropriateness of the Washington log benchmark. 141

7.7.3.2  The USDOC's adjustments to derive the Washington log benchmark. 144

7.7.3.2.1  Conversion factors. 145

7.7.3.2.1.1  Conversion from MBF to cubic metres. 145

7.7.3.2.1.2  Evaluation. 148

7.7.3.2.2  Adjustments for quality of logs. 151

7.7.3.2.2.1  Adjustments for log grade. 151

7.7.3.2.2.2  Adjustments for beetle‑killed timber 154

7.7.3.2.3  Stand‑as‑a‑whole pricing. 157

7.7.3.2.4  Transportation costs. 160

7.7.4  Conclusion. 162

7.8  Whether the USDOC improperly set certain results of comparisons between the prices of
the examined transactions and the corresponding benchmark prices to zero in determining
the adequacy of remuneration. 162

7.8.1  Factual aspects. 162

7.8.2  Evaluation. 163

7.8.2.1  Legal basis for Canada's claims. 163

7.8.2.2  Whether the USDOC's determination was consistent with Article 14(d) of the SCM Agreement 165

7.8.2.2.1  Issues common to Canada's claims concerning New Brunswick as well as British Columbia. 165

7.8.2.2.1.1  Whether the obligation to assess adequacy of remuneration "in relation to
prevailing market conditions" applies to all aspects of the benefit calculation method. 166

7.8.2.2.1.2  Whether the USDOC conducted the subsidy investigation on a transaction‑specific basis or a programme‑wide basis. 167

7.8.2.2.2  Whether the USDOC violated Article 14(d) by setting certain comparison results
to zero in its benefit determination for New Brunswick's provision of stumpage. 168

7.8.2.2.3  Whether the USDOC violated Article 14(d) by setting certain comparison results
to zero in its benefit determination for British Columbia's provision of stumpage. 169

7.8.3  Conclusion. 172

7.9  Canada's claims concerning the export-permitting process for British Columbia logs. 173

7.9.1  Provisions at issue. 173

7.9.2  Whether the LEP process constitutes a financial contribution within the meaning of Article 1.1(a)(1)(iv) 174

7.9.2.1  The USDOC's finding of entrustment and direction. 174

7.9.2.2  Evaluation. 175

7.9.3  Whether the USDOC acted inconsistently with Articles 11.2 and 11.3 in initiating an investigation regarding the LEP process. 178

7.9.4  Conclusion. 179

7.10  Canada's claims concerning certain reimbursements made to harvesters by Québec and New Brunswick for silviculture and forest management activities. 179

7.10.1  Factual aspects. 180

7.10.2  Legal standard. 180

7.10.3  Evaluation. 180

7.10.3.1  Whether the USDOC properly found silviculture reimbursements to be grants. 181

7.10.3.1.1  New Brunswick. 181

7.10.3.1.2  Québec. 183

7.10.3.2  USDOC's benefit determination. 185

7.10.3.3  Conclusion. 185

7.11  Canada's claims concerning provincial electricity programmes. 185

7.11.1  British Columbia provincial electricity programme. 186

7.11.1.1  Introduction. 186

7.11.1.2  Legal standard. 187

7.11.1.3  The British Columbia Energy Plan. 187

7.11.1.4  The USDOC's determination regarding the benefit conferred on West Fraser
and Tolko. 188

7.11.1.5  Whether the USDOC improperly determined that BC Hydro's purchases of electricity
were made for more than adequate remuneration. 189

7.11.1.5.1  The benchmark selected by the USDOC. 189

7.11.1.5.2  Whether the USDOC improperly rejected the benchmarks submitted by the
interested parties. 191

7.11.1.5.3  The USDOC's determination of benefit in respect of Tolko's turn‑down payments. 193

7.11.1.6  Conclusion. 195

7.11.2  Québec provincial electricity programme. 195

7.11.2.1  Introduction. 195

7.11.2.2  The Québec Energy Strategy. 195

7.11.2.3  The USDOC's determination regarding the benefit conferred on Resolute. 196

7.11.2.4  Whether the USDOC improperly determined that Hydro‑Québec's purchases of
electricity were made for more than adequate remuneration. 197

7.11.2.4.1  The benchmark selected by the USDOC. 197

7.11.2.4.2  Whether the USDOC improperly rejected the benchmark submitted by the
interested parties. 198

7.11.2.5  Conclusion. 199

7.11.3  New Brunswick provincial electricity programme. 199

7.11.3.1  Introduction. 199

7.11.3.2  Legal standard. 199

7.11.3.3  The Large Industrial Renewable Energy Purchase programme. 200

7.11.3.4  The USDOC's determination with respect to the benefit conferred on Irving. 201

7.11.3.5  Whether the USDOC improperly found that New Brunswick provided a financial contribution to Irving in the form of revenue foregone that conferred a benefit 202

7.11.3.6  Conclusion. 204

7.11.4  Whether the USDOC failed to ascertain the precise amount of subsidies allegedly
conferred by provincial programmes. 204

7.12  Canada's claims concerning the specificity of the accelerated capital cost
allowance (ACCA) for Class 29 assets. 204

7.12.1  Provisions at issue. 205

7.12.2  Evaluation. 205

7.12.2.1  Whether the USDOC acted inconsistently with Article 2.1(a) by failing to
demonstrate that the Canadian legislation at issue "explicitly limits access" to the Class 29 programme to "certain enterprises" 206

7.12.2.2  Whether the Class 29 programme is non‑specific within the meaning of
Article 2.1(b) 209

7.12.2.3  Whether the USDOC acted inconsistently with Articles 2.1(a) and 2.1(b), by failing
to consider the specificity of the Class 29 programme within the broader context of Canadian
tax legislation. 210

7.12.2.4  Conclusion. 211

7.13  Canada's claims concerning the Maritimes Stumpage Benchmark. 211

7.13.1  Introduction. 211

7.13.2  Legal standard. 212

7.13.2.1  Measures. 212

7.13.2.2  Unwritten measures. 212

7.13.2.3  Measures as present and continued application, or ongoing conduct 213

7.13.3  Whether Canada has established the existence of the Maritimes Stumpage
Benchmark. 213

7.13.3.1  Introduction. 213

7.13.3.2  The existence of the Maritimes Stumpage Benchmark as a measure of present and continued application. 213

7.13.3.3  The existence of the Maritimes Stumpage Benchmark as a measure of ongoing
conduct 220

7.13.4  Conclusion. 221

8  Conclusions and Recommendation.. 221