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<title>CANADA ASKS WTO DIRECTOR GENERAL TO APPOINT LUMBER DISPUTE PANELLISTS</title>
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<p><font face="Arial"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"></font><font face="Arial" size="+1"><strong>January 22, 2002 <em>(5:30 p.m. EST)</em> No. 4</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>CANADA ASKS WTO DIRECTOR GENERAL</strong></font></p>
<p align="CENTER"><font face="Arial" size="+1"><strong>TO APPOINT LUMBER DISPUTE PANELLISTS</strong></font></p>
<p><font face="Arial"></font><font face="Arial">In an effort to move the softwood lumber dispute resolution process forward, International Trade Minister Pierre
Pettigrew today has asked the World Trade Organization (WTO) Director General to appoint panellists to hear
Canada's complaint against the 19.31 percent provisional duty imposed on Canadian softwood lumber exports.</font></p>
<p><font face="Arial">"The panel selection process has taken too long and this is why we are making our request directly to the
Director General," said Mr. Pettigrew. "The duty is unwarranted to begin with. Canada has a strong case to
argue and it's important to all of us, to Canadian industry, to Canadian workers and their communities, that this
challenge be heard as soon as possible."</font></p>
<p><font face="Arial">The U.S. Department of Commerce imposed a 19.31 percent provisional duty on softwood lumber imports from
Canada in August 2001. Canada then announced its intention to challenge this move. On December 5, 2001,
the WTO Dispute Settlement Body established a panel to hear Canada's complaint. This panel, once its
members are selected, will examine the WTO-consistency of the U.S. Department of Commerce's preliminary
subsidy and critical circumstances determinations, as well as the expedited review provisions of U.S.
countervailing duty law.</font></p>
<p><font face="Arial">Under the WTO process, Canada and the United States consider panel candidates proposed by the WTO
Secretariat. When the two countries cannot agree on panellists, the Director General can be asked to appoint a
panel and has 10 days to do so. One panellist has already been agreed to by both sides. Once the other
panellists are chosen, the proceedings will take about six months to complete. </font></p>
<p align="CENTER"><font face="Arial">- 30 -</font></p>
<p><font face="Arial">A backgrounder is attached.</font></p>
<p><font face="Arial">For further information, media representatives may contact:</font></p>
<p><font face="Arial">Sébastien Théberge</font></p>
<p><font face="Arial">Office of the Minister for International Trade</font></p>
<p><font face="Arial">(613) 992-7332</font></p>
<p><font face="Arial">Media Relations Office</font></p>
<p><font face="Arial">Department of Foreign Affairs and International Trade</font></p>
<p><font face="Arial">(613) 995-1874</font></p>
<p><a href="https://bac-lac.wayback.archive-it.org/web/20070220194049/http://www.dfait-maeci.gc.ca/"><font face="Arial">http://www.dfait-maeci.gc.ca</a></font></p>
<p><font face="Arial" size="+1"><strong>Backgrounder</strong></font></p>
<p><font face="Arial" size="+1"><strong>PANEL COMPOSITION</strong></font></p>
<p><font face="Arial"></font><font face="Arial">On December 5, 2001, the WTO Dispute Settlement Body established a panel to hear Canada's complaint
regarding the United States' imposition of a 19.31 percent duty on imports of Canadian softwood lumber.
Canada and the United States are currently in the process of finalizing the composition of that panel. In its
complaint, Canada is challenging the preliminary countervailing duty and critical circumstances determinations,
together with the United States' refusal of individual company expedited reviews following the softwood lumber
investigation, as inconsistent with the United States' WTO obligations.</font></p>
<p><font face="Arial">On April 23, 2001, the U.S. Department of Commerce initiated a countervailing duty investigation of softwood
lumber from Canada, the fourth such investigation since 1982. On August 9, the Department of Commerce
made its preliminary subsidy determination, finding that provincial forest management programs conferred a
countervailable subsidy and imposed the 19.31 percent provisional duty. On August 21 Canada began formal
dispute settlement proceedings against the U.S. concerning these preliminary determinations and U.S.
provisions concerning company expedited reviews. Consultations with the U.S. were held on September 17,
and a panel request was made during the October 25 meeting of the Dispute Settlement Body. The U.S.
blocked that request; however a panel was established during a December 5 meeting of the Dispute Settlement
Body.</font></p>
<p><font face="Arial">Once a panel is established, panellists must be selected. Each WTO panel consists of a chairperson and two
panellists. Potential panellists are proposed by the WTO Secretariat and the two countries involved in the
dispute are required to meet to discuss the mutual acceptability of these candidates. The first such meeting
between Canada and the United States occurred on December 20, 2001, followed by further meetings on
January 10 and January 22, 2002. To date, the two countries have only been able to agree on one panellist,
leaving the Director General to select the chairperson and remaining panellist.</font></p>
<p><font face="Arial">In this circumstance, Article 8.7 of the WTO Dispute Settlement Understanding provides that either party may
request that the Director General appoint panellists. The Director General must respond to Canada's request
within10 days.</font></p>
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