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BINATIONAL PANEL REVIEW PURSUANT TO THE
NORTH AMERICAN FREE TRADE AGREEMENT
DECISION AND REASONS OF THE PANEL
ON REVIEW OF THE CANADIAN INTERNATIONAL
TRADE TRIBUNAL FINDING
December 15, 1999
The Complainant argued that Canada's international obligations compel the CITT to establish a sufficient link between the threat of injury and the per se dumping of AHMSA. The Complainant points to Canada's international obligations under the GATT and argues that these obligations impose a definite cause and effect standard that the CITT is obligated to follow. Specifically, it refers to article 3(4) of the GATT Antidumping Code which states that “it must be demonstrated that the dumped imports are, through the effects of dumping, causing injury within the meaning of this code”.
Justice Dickson, writing for the majority of the Court, held that the GATT played a much larger role in shaping the practice of the CITT. He held that it was reasonable for the CITT to refer to Canada's international obligations under the GATT not only to clarify uncertainty, but also as an aid to interpretation in cases where the ambiguity was not patent. He held that the CITT should strive to expound an interpretation which is consonant with the relevant international obligation.62 He reasoned:
While the Supreme Court held that the GATT was relevant to determining the practice of the CITT, it was not in agreement as to the extent of the GATT’s influence. In determining the precise role of the GATT on the CITT’s practice, we find the reasoning of
Concrete Panels instructive. That Panel noted that the CITT applies Canada's GATT obligations always and when they are incorporated in the SIMA and its Regulations. In interpreting the legislation that was passed in order to implement international obligations, it is reasonable that the CITT examine the domestic legislation in the context of international obligations. The interpretation which must be arrived at must be congruent with the relevant international obligations.64
It was argued that the Panel decision in Carpets is instructive on how we should review the CITT with respect to the sufficient link question. In dealing with the issue of causation, that Panel could not agree on what constitutes a sufficient link. The majority found that, taking into account the GATT Code standard that causation be “demonstrated”, the rational nexus between the evidence and the required conclusion on causation mandates an analysis of how the dumping has affected price levels. The majority in Carpets went on to Remand the CITT to determine whether the dumping in and of itself caused material injury and to demonstrate the rational basis for such a determination by detailed analysis.67 The minority opinion in Carpets found that the standard of review limited the type of review which the Panel could undertake. Dissenting Panelist Ward held:
The opinions in Carpets are indicative of the two approaches urged on Panels in these decisions. In trying to determine what the exact nexus between the dumped imports and the threat of injury should be in the causation analysis, we find the reasoning of the Panel in Baler Twine69 instructive. The Baler Twine Panel found that it is not necessary to find that dumped imports are always or even predominantly the lowest priced imports. It held that, in order for the causation requirement to be met, all that is required is a showing that dumped imports contribute, at a sufficient level, to price erosion, price suppression or to lost sales.70
Having determined that the applicable causation standard is that contained within the SIMA and the SIMA Regulations, to be read in light of Canada's international obligations, we believe that the specific link which the CITT must establish between the dumping and the threat of injury is a flexible one which varies on the circumstances. In the instant review, we believe that the CITT should, at least, demonstrate how the dumping contributed, at a sufficient level, to price erosion or suppression. Such a demonstration should include an analysis of what is “sufficient” about the contribution in the circumstances, but need not be limited to the effects of AHMSA's dumping.
Having articulated the link between the threat of injury and the dumping in the circumstances, we move to the related question pertaining to the quality of the evidence required to ground a causation finding. With respect to the nature and extent of the evidence required, we find that this is a matter which is factually laden and within the expertise of the CITT. In these circumstances, the deference which is afforded to the CITT, on a considerable deference standard, is very high.
The CITT has articulated its practice on evidentiary findings, in the context of threat of material injury, in the Caps, Lids and Jars case.71 It stated that its practice has been to analyse material injury and threat of material injury as separate findings. In describing its methodology, the CITT has recognised the importance of Canada's international obligations and has drawn on the Agreement for the Implementation of Article 6 of the GATT, 1994 (ADA). In distinguishing the injury analysis from the threat of injury analysis, the CITT has noted that the ADA makes separate references to injury and threat of injury determinations in the definition of injury. Secondly, the CITT noted that it is directed to consider factors for injury that are different from factors for threat of injury, necessitating a distinct evidentiary basis for each. Thirdly, it noted that a finding of threat of injury, unlike injury, may only be made where the circumstances in which the dumping would cause injury are clearly foreseen and imminent. Fourthly, it recognised the admonition found in the WTO Agreement on the implementation of Article VI of the GATT 1994 s. 3.8 which states:
In considering the quality of evidence required, we also find the reasoning of Concrete Panels instructive. That Panel reviewed previous Panel decisions and held that what is required is reliable evidence establishing a causal nexus between dumped imports and injury. Reliable evidence is not just any evidence. Rather, it is evidence which when viewed in the context of the record reasonably upholds the CITT’s determination. The CITT has considerable discretion with respect to what evidence it accepts and what weight it attaches to the evidence and we will not sit to reweigh the evidence nor substitute our opinion for that of the CITT. However, while we will defer to reasonable findings of the CITT, we will not permit assumptions to stand in place of evidence.73 What is required is positive evidence beyond conclusory findings which, when viewed in the context of all the evidence, reasonably supports the causation finding.
In the instant review, the CITT has, at times, substituted conclusory findings in place of evidence. Specifically, and important in the context of this review, we believe that the CITT does not address evidence which speaks to what is sufficient about the level to which the dumped imports contributed to the price erosion and suppression.
The Complainant argued that the CITT committed error of law in misapplying s.37.1(3)(a)(vi) of the SIMA Regulations which directs the CITT to consider “the productivity of the domestic industry in respect of like goods”. In this respect, the Complainant alleges that the CITT erred in not considering the productivity problems of the domestic industry with respect to high demand and allocation. The Complainant cites Tomato Paste74 for the proposition that when evidence exists to show that the domestic producers are not prepared to offer product to customers, who must source outside Canada, the dumping is not the cause of material injury.75 For the reasons discussed below, we uphold the CITT in this regard.
As with respect to s.37.1(3)(a)(vi) of the SIMA Regulations, we find that it is one of the factors that the CITT should look at in performing its analysis. However, it is one factor among many that the CITT should look at. While we believe that productivity concerns are important factors to consider in this case, neither the law nor the circumstances compel the conclusion that s.37.1(3)(a)(vi) is dispositive.
In cases where the presence of various factors cause the erosion or suppression of prices, the CITT is obligated to follow s.42(1)(a)(i) of the SIMA and s.37.1 (b) of the SIMA Regulations. These requirements compel the CITT to assure itself that the injury was not caused by factors other than those of the dumped goods.
The Complainant points to record evidence to suggest that the domestic industry may have contributed to price declines at various times in an attempt to gain or keep market share.79 The Complainant recognizes the conflicting evidence on the record, but argues that in coming to its conclusions, the CITT incorrectly preferred the evidence of the industry witnesses over that of other witnesses. The arguments presented on pricing behaviour appear to be disagreements over factual findings which afford the CITT considerable deference at the high end of the spectrum. Absent cogent record evidence that the CITT's findings were unreasonable in the circumstances, we will not reweigh this sort of evidence as the CITT was in the best position to assess the competing evidence proffered by the witnesses.
In this case, given the existence of other factors which may cause threat of injury, the effects caused by each of them must be separated and it must be demonstrated that the dumped goods were the cause of the threat of injury. This obligation does not compel the quantification of weight to be attached to each factor, but seeks to ensure that other non dumped factors are kept out of the analysis. This can not be accomplished by a mere showing of the existence of dumped goods.
Signed in the original by:
Issued on the 15th day of December, 1999
60 National Corn Growers Association v. Canada (Import Tribunal),  2 S.C.R. 1324 ("Grain
61 Grain Corn, p.1349.
62 Grain Corn, p.1371.
63 Grain Corn, p.1383.
64 Certain Concrete Panels, CDA-97-1904-01 ("Concrete Panels"), p. 10.
65 Certain Hot Rolled Steel, CDA-93-1904-07 ("Hot Rolled").
66 Hot Rolled, p. 33-34.
In the Matter of Machine Tufted Carpets Originating in or Exported from the United States of
68 Carpets, p. 78.
69 Synthetic Baler Twine With A Knot Strength of 200 Lbs or Less Originating in or Exported from the United States of America, CDA-94-1904-02 (April 10, 1995) ("Baler Twine").
70 Baler Twine, p. 28.
71 Inquiry No. NQ-95-001, finding October 20, 1995. Statement of Reasons, November 6, 1995. ("Caps, Lids and Jars").
72 See, Caps, Lids and Jars p.9-10.
73 See, Caps, Lids and Jars p.9-10.
74 NQ-92-006, SOR, March 30.1993, p.14.
75 Complainant´s Brief, p.53-4.
76 Tomato Paste, p. 15.
77 SOR, p.17.
78 SOR, p. 18.
79 Complainant´s Brief, p.86.
80 SOR, p.22.
81 SOR, p.22.
82 SOR, p. 19-20.
83 SOR, p. 28.