The Government of Canada (“Canada”) and the Government of the United States of America (“United States”)[A1]
HAVE AGREED AS FOLLOWS:
1. This Agreement applies to trade in Softwood Lumber Products. Softwood Lumber Products are those products listed in Annex 1A. For domestic implementation and administration purposes only, Canada will rely on the Canadian Table of Concordance provided in Annex 1B.
2. No products shall be added to, or removed from, the scope of this Agreement after April 27, 2006 without the express mutual agreement of the Parties, regardless of any decision, ruling, determination, or re-determination by a Party, the effect of which would be to:
(a) classify or reclassify a product as falling within or outside a tariff item set out in Annex 1A; or[A3]
(b) determine or rule that a product falls within or outside the description of Softwood Lumber Products set out in Annex 1A.
3. Where a Party disagrees with a decision, ruling, determination, or re-determination with respect to a tariff classification or ruling of the other Party with respect to whether a product falls within or outside the scope of Softwood Lumber Products set out in Annex 1A, the Party shall refer the matter to the Technical Working Group established under Article XIII.
4. The Technical Working Group shall, within 60 days of receipt of a request from a Party under Article I.3, review and provide a non-binding recommendation to the Parties on a question of product scope arising from a disagreement on tariff classification or product description referenced in paragraph 3. [A4]
5. If the Parties fail to reach a mutually acceptable agreement on a matter referred to the Technical Working Group, either Party may refer the matter to dispute settlement under Article XIV.
6. If the tribunal issues an award clarifying the scope, the export measures contained in this Agreement shall cover the clarified scope.
ARTICLE
II
ENTRY
INTO FORCE
1. This Agreement shall enter into force on a date designated by the Parties in an exchange of letters (the Effective Date). In this exchange of letters, the Parties shall [A5]certify that the following conditions have been met:
a. The Termination of Litigation Agreement in Annex [10] (the “Termination Agreement”) has been signed: (i) by counsel on behalf of [A6]all represented parties and participants to the actions listed in the Termination Agreement; and (ii) by authorized representatives of any unrepresented parties or participants to the actions listed in the Termination Agreement;
b. Pursuant to Article 3.6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, the United States and Canada have signed and filed with the WTO Dispute Settlement Body, a Notification of Mutually Agreed Solution in the form provided for in Annex [11];
c. The United States Court of International Trade has modified the injunctions against liquidation issued in West Fraser v. United States (Consol. Ct. No. 05-00079) to permit the United States to fulfill its obligations under Article III or has confirmed that fulfilling those obligations is not inconsistent with those injunctions.
d. Canada has certified that it can administer the Export Charge and issue[A7] Export Permits as of the Effective Date.
e. Canada and the United States have confirmed that importers of record that [A8]collectively account for not less than 95 percent of total refunds of cash deposits with accrued interest have complied with all of the requirements in paragraph 1 of Annex 2A.
f. U.S. domestic interested parties, including companies, associations and [A9]worker representatives, comprising greater than 60 percent of U.S. production of softwood lumber have filed with USDOC the irrevocable letters described in Article V, and in the form provided in Annex 3A, effective on the Effective Date, and the United States has certified that the letters from the domestic interested parties collectively account for greater than 60 percent of U.S. production of softwood lumber;
g. USDOC has issued the finding set out in Annex 3B based on the signed letters attached in Annex 3A, effective on the Effective Date.
1. On the Effective Date, the United States shall:
(a) Revoke retroactively the AD Order and the CVD Order in their entirety as of May 22, 2002 without the possibility of their reinstatement; [A10]
(a) Terminate all USDOC proceedings related to the AD Order and the CVD Order; and
2. As soon as possible, but no later than three days after the Effective Date, USDOC shall instruct USCPB to:
(a) cease collection of cash deposits, as of the Effective Date, on imports of Softwood Lumber Products from Canada; and
(b) liquidate all Covered Entries made on or after May 22, 2002 without regard to anti-dumping or countervailing duties and refund all deposits collected on such entries with all accrued interest pursuant to 19 U.S.C. 1677g(b) to the Importers of Record or their designates.
USDOC Instructions to USCBP are attached as Annex X.[A11]
1. Within 10 days of the Effective Date, the United States shall begin to liquidate all covered entries made on or after May 22, 2002 without regard to anti-dumping or countervailing duties, with interest according to 19 U.S.C. §1677g(b).
2. USCBP shall complete the liquidation of covered entries and the refund of all cash deposits as soon as possible, but not later than 6 months of the publication in the Federal Register of the revocation referred to in Article III for all other covered entries unless the entries are subject to an extension request under 19 U.S.C. § 1504(b) and 19 C.F.R. § 159.12.[A12]
3. USCBP shall approve an initial and any subsequent requests for an extension of time by importers of record or their designates made pursuant to 19 U.S.C. § 1504(b) and 19 C.F.R. § 159.12. [A13]
4. Canada or its agent shall provide payments to Escrow Importers[A14] in consideration of its purchase of the cash deposits and accrued interest in accordance with Annex 2A. [A15]
ARTICLE V
COMMITMENTS
OF THE UNITED STATES CONCERNING TRADE REMEDY INVESTIGATIONS AND ACTIONS AND
OTHER LITIGATION
1. For the duration of this Agreement, including any renewal pursuant to Article XVIII, the United States shall not:
(a) Self-initiate an antidumping or countervailing duty investigation under Title VII of the Tariff Act of 1930, as amended, or any successor law (“Title VII”), with respect to imports of softwood lumber from Canada. If a petition is filed under Title VII with respect to imports of softwood lumber from Canada, USDOC shall dismiss the petition on the basis of irrevocable letters in the form provided in Annex 3A (“no injury” letters) [A16]and a Finding of Department of Commerce in the form provided in Annex 3B. These letters shall be provided by U.S. domestic interested parties [A17]comprising greater than 60[A18] percent of U.S. production of softwood lumber. In general, industry association letters are effective with respect to the production of their members, but members with an annual production of softwood lumber of over 200 million board feet must, to be counted toward the threshold of 60 percent of U.S. production, individually provide a no injury letter. The signed “no injury” letters will be appended to the Agreement.[A19]
(b) Take
action under sections 201 to 204, inclusive, of the Trade Act of 1974, as amended, or any successor law (“section
201”), with respect to imports of softwood lumber from Canada;
(c) Initiate an
investigation or take action, including action pursuant to any prior
determination, under sections 301 to 307, inclusive, of the Trade Act of 1974, as amended, or any
successor law, with respect to imports of softwood lumber from Canada; or
(d) Take action
under section 204 of the Agricultural Act
of 1956, as amended, or any successor law, with respect to imports of
softwood lumber from Canada.[A20]
2. Any breach of the commitments of the United States under paragraph 1 of this Article shall give Canada the right to terminate this Agreement without resort to dispute settlement under Article XV or any other pre-condition for termination of this[A21] Agreement.
On entry into force of this Agreement, Canada shall implement the export measures in Articles VII to X with respect to exports of Softwood Lumber Products listed in Annex 1A.[A22]
1. By entry into force of this Agreement, each Region shall have selected either Option A or Option B. Option A is an export charge collected by Canada, with the charge varying as provided in the table below based on the Prevailing Monthly Price. Option B is an export charge with a volume restraint, where both the rate of the export charge and the volume restraint vary as provided in the table below based on the Prevailing Monthly Price as defined in Annex 4.[1][A24]
2. Each Region may, effective the first day of January following the third and sixth anniversaries of the Effective Date, elect to be governed by the Option other than the one it previously selected. Canada will provide the United States thirty (30) days notice that a Region has elected to be governed by a different Option. Regions will continue to be governed by the same Option as in the previous period if no notice is given.
3. Option A and Option B export measures shall be calculated as follows: [A25]
|
Prevailing Monthly Price |
Option A – Export Charge (%) |
Option B – Export Charge (%) with Volume
Restraint |
|
Over $US 355 |
No export charge |
No export charge and no volume restraint |
|
$US 336-355 |
5 |
2.5% export charge + maximum volume that can be shipped cannot exceed a Region’s share of 34% of expected U.S. Consumption |
|
$US 316-335 |
10 |
3% export charge + maximum volume that can be shipped cannot exceed the Region’s share of 32% of expected U.S. Consumption |
|
$US 315 or under |
15 |
5% export charge + maximum volume that can be shipped cannot exceed the Region’s share of 30% of expected U.S. Consumption |
4. Under Option A, Canada shall on a monthly basis collect a charge on a Region’s[A26] exports of Softwood Lumber Products (Annex 1A) calculated according to the center column of the chart above that corresponds to the Prevailing Monthly Price.
5. Under Option B, Canada shall, on a monthly basis:
(a) Collect a charge on a Region’s exports of Softwood Lumber Products (Annex 1A) calculated according to the last column of the chart above that that corresponds to the Prevailing Monthly Price, and
(b) Limit the volume of a Region’s exports during the month to the limit established in accordance with Annex 5.
6. The month in which an export occurs shall be based on the month in which the Date of Shipment occurs.
7. The export charge shall be levied on the Export Price.
8. The export charge on Softwood Lumber Products with an Export Price of more than $US 500 per MBF shall be charged as if their Export Price were $US 500 per MBF.
9. The export charge on remanufactured Softwood Lumber Products shall be assessed in accordance with Annex 6.
10.
All Softwood Lumber Products
exported from Canada to the United States shall require an Export Permit.
ARTICLE VIII
SURGE MECHANISM
1. The following provisions shall apply whenever the volume of exports in any month from a Region that has selected Option A under Article VII exceeds the Region’s Trigger Volume as set out in paragraph 2:
(a) If the volume of exports from a Region exceeds the Region’s Trigger Volume by one percent or less in any month, the applicable Trigger Volume for that Region during the following month shall be reduced by the total MBF amount of overage (i.e., the amount by which actual exports exceeded the Trigger Volume).[A27]
(b) If the volume of exports from a Region exceeds the Region’s Trigger Volume by more than one percent in any month, Canada shall apply retroactively[A28] to all exports to the United States from the Region during that month an export charge in the amount of 150 percent of the applicable export charge for that month (as specified in the middle column of the chart at Article VII). [A29]
2. For the surge mechanism, a Region’s monthly Trigger Volume shall be calculated in accordance with Annex 7.
ARTICLE IX
THIRD COUNTRY ADJUSTMENT[A30]
1. Irrespective of whether a Region is governed by Option A or Option B, Canada shall refund export charges in accordance with paragraph 2 if each of the following have occurred in each of any two consecutive calendar quarters when compared with the same two consecutive quarters from the previous year[2]:
(a) The share of actual U.S. lumber consumption accounted for by non-Canadian imports (“third country market share”) is at least twenty (20) percent greater; and
(b) Canadian market share of actual U.S. consumption decreases; and
(c) U.S. domestic producers’ market share of actual U.S. consumption increases.[A31]
2. Where the conditions in paragraph 1 are satisfied:
(a) If a Region is governed by Option A, then exporters in that Region will be retroactively refunded the amount they paid, up to the equivalent of a five (5) percent export charge on their exports in the consecutive quarters identified in paragraph 1.
(b) If a Region is governed by Option B, then exporters in that Region will be retroactively refunded the full export charge they paid in the consecutive quarters identified in paragraph 1.
3. Paragraph 2 of this Article does not apply to exports from any Region that triggered the Surge Mechanism in Article VIII.1(b) in either of the two consecutive quarters in which the conditions in paragraph 1 of this Article were met.
4. For the purposes of this Article, U.S. lumber consumption, Canadian market share, third country market share and U.S. producers’ market share are established according to Annex 8.
ARTICLE X
EXCLUSIONS FROM THE EXPORT MEASURES
1. The following are excluded from the export measures in Articles VII to IX:
(a) Softwood Lumber Products first produced in the Maritimes from logs harvested in the Maritimes or the State of Maine, that is