ARTICLE 1904

BINATIONAL PANEL REVIEW PURSUANT TO THE

NORTH AMERICAN FREE TRADE AGREEMENT

ON REVIEW OF THE CANADIAN INTERNATIONAL

TRADE TRIBUNAL FINDING

December 15, 1999

TABLE OF CONTENTS

I. INTRODUCTION

III. STANDARDS OF REVIEW

IV. DETERMINATION ON REMAND

(1) The Determination on Remand

(2) The Complainant’s Challenge to the DOR

(3) The Panel’s Findings

(a) Functus Officio / New Definitive Decision

(b) Separate Order and Separate Reasons

(c) Panel’s Jurisdiction to Remand Regarding the Separate Issue

(d) Jurisdiction to Decide on CDA-MEX-99-1904-01 and the Motions

VI. THE DECISION OF THE PANEL

A. ERRORS OF JURISDICTION

1. Did the Tribunal commit a reviewable error in permitting the late disclosure or non-disclosure of certain interrogatory material?

2. Did the Tribunal commit a reviewable error in not treating imports from Mexico separately from imports from other countries?

a) Did the CITT commit reviewable error in failing to give AHMSA a separate decision and reasons? 

b) Did the CITT commit reviewable error in cumulating AHMSA? 

c) Did the CITT commit reviewable error in not excluding AHMSA?

B. ALLEGED ERRORS OF FACT/ALLEGED ERRORS OF LAW/ ALLEGED ERRORS OF MIXED FACT AND LAW

1. MAJORITY: PANEL MEMBERS CODE, TRAKMAN AND OGARRIO

A. Deference to the Tribunal

B. The Standard of Patent Unreasonability

C. Errors of Law and Fact

a. Downward Trend in Industry Prices

b. Price Gap increasing

c. Delivery System Details

d. Further increases in imports and displacements

e. Price Erosion and Suppression

f. Causation

2. MINORITY OPINION: PANEL MEMBERS GARCIA-CORRAL and ORTIZ

Part One: The CITT's Decision on the Threat of Injury Determination 

Part Two: Review

1. Did the CITT commit reviewable error in finding likely significant price suppression and erosion? 

2. Did the CITT commit reviewable error in finding causation?

a. Sufficient Link

b. Quality of Evidence

c. The CITT’s Past Practice

3. Did the CITT commit reviewable error in failing to ensure that other non dumped factors did not enter the threat of injury?

hot-rolled carbon steel plate and high strength low alloy plate not further manufactured than hot-rolled, heat-treated or not, in cut lengths, in widths from 24 inches (+/- 610 mm) to 152 inches (+/- 3,860 mm) inclusive, and thickness from 0.187 inches (+/- 4.75 mm) to 4 inches (+/- 101.6 mm) inclusive, originating in or exported from Mexico, the People’s Republic China, the Republic of South Africa and the Russian Federation, but excluding plate for use in the manufacture of pipe and tube (also known as skelp); plate in coil form; plate having a rolled, raised figure at regular intervals on the surface (also known as floor plate); and plate produced to ASTM specifications A515 and A516M/A516, grade 70, in thickness greater than 3.125 inches (+/- 79.3 mm).

The parties to the Panel Review include the Complainant, AHMSA, and the respondents, the Investigating Authority (CITT), Stelco Inc., Algoma Steel Inc. and IPSCO Inc. The Public Hearing in this matter was held in Ottawa, Canada on January 18-19, 1999.

Preliminary Decision

On May 19, 1999, this Panel issued a Preliminary Decision which included the Panel’s decision on the Standards of Review applicable to its review as well as a remand in part concerning the issue of a separate order under section 43(1.01) of the SIMA. Specifically, the Tribunal was instructed to “determine whether, under section 43(1.01) of the SIMA, a separate order is required in respect of Mexico and further, whether separate reasons are also requisite”. 

The CITT issued its Determination on Remand (“DOR”) on June 21, 1999. It accepted that it erred with respect to not issuing a separate finding for Mexico and corrected that error by issuing a Corrigendum to the Findings in Inquiry No. NQ-97-001. It also determined that there was no legislative requirement or persuasive policy rationale to support the need for separate reasons with respect to goods from Mexico.

A challenge to the DOR (“Challenge”) pursuant to Rule 73 of the Rules of Procedure was submitted by the Complainant on July 12, 1999. Together with the Challenge, the Complainant took the procedural step of filing a second Notice of Panel Review, alleging that the Corrigendum issued by the CITT in the DOR constituted a new decision. The Canadian Secretariat opened Chapter 19 file CDA-MEX-99-1904-01 in response to that request. The Complainant then filed a motion pursuant to Rule 61 on July 15, 1999 (the “Motion”), requesting that the Panels under CDA-97-1904-02 (this Panel) and CDA-MEX-99-1904-01 be joined. Submissions in response to the Motion were filed by the Parties to the Review, the Attorney General of Canada and the Government of Mexico. 

Conclusion

For the reasons set forth herein, the Panel unanimously affirms the DOR and dismisses the Challenge as well as both motions by the Parties. With respect to the Determination in NQ-97-001, the majority affirms the findings of the CITT. The minority affirms in part and would remand in part with instructions.

II. BACKGROUND

On December 27, 1996 Stelco filed a complaint before the Department of National Revenue alleging injurious dumping of certain imports of carbon steel plate originating or exported from Mexico, China, Poland, Russia and South Africa. The complaint was supported by other Canadian producers, namely Algoma, and IPSCO.

The importers of the product in question are Wirth, Canadian Klockner and Ferrostaal Metals, Ltd. Wirth imports plate from China, Mexico and South Africa, while Canadian Klockner and Ferrostaal Metals, Ltd. import plate from Russia.

On February 13, 1997, the Deputy Minister of National Revenue (Deputy Minister) initiated an investigation on dumping against imports from the countries in question. The investigation covered imports during the period of January 31 through December of 1996. The subject goods were defined as certain hot-rolled steel plate originating in or exported from Mexico, China, South Africa and Russia. The Deputy Minister specifically excluded certain steel products from the subject goods, including plate in coil form, skelp, and plate produced to ASTM specifications A515 and A516M/A516, grade 70, in thickness greater than 3.125 inches.

On April 7, 1997, the CITT rendered an advice under s. 37 of the SIMA in which it determined that there existed a reasonable indication that the goods is question exported by, inter alia, Mexico caused material injury or threat of material injury to the domestic industry. The Deputy Minister issued at Preliminary Determination of dumping on June 24, 1997 and a Final Determination on September 25, 1997. The Final Determination held that all goods imported from Mexico were being dumped at a margin of 26.2%.

On June 27, 1997, the CITT issued a notice of initiation of investigation for the period of January 1, 1994 to March 31, 1997. On October 27, 1997, the CITT issued its Determination that held that the imported goods from the countries in question were not causing injury to the domestic injury, but were threatening to cause injury.

III. STANDARDS OF REVIEW

In its Remand Order, dated May 19, 1999, this Panel outlined the standard of review to be applied in this Panel review. The majority held that there was a correctness standard to be applied to issues of jurisdiction and a “patent unreasonableness” standard to be applied to issues of law and issues of fact.¹ The concurring minority opinion held that there was a correctness standard to be applied to issues of jurisdiction and a “considerable deference” standard to be applied to issues of law and to issues of fact.²

The Panel will apply these standards in its judicial review of the issues herein. The Decision is therefore composed of three separate components. First, the Panel will deal with the issues on which there is a unanimous decision irrespective of the standard applied. Then, the Decision outlines the conclusions of the majority on the remaining issues based on the patent unreasonability standard. Finally, the Decision provides the reasons of the minority dissent remanding on the basis of the standard of considerable deference.

IV. DETERMINATION ON REMAND

In response to this Panel’s Remand Order in the Preliminary Decision, the Tribunal issued its DOR on June 21, 1999. On July 12, 1999, the Complainant filed a Challenge to the DOR together with a Second Request for Panel Review pursuant to Rule 34 of the Rules of Procedure with respect to the identical facts in this matter. The Canadian Secretariat opened file CDA-MEX-99-1904-01. 

On July 15, 1999, the Complainant filed a Motion requesting the joinder of Panel Reviews CDA-97-1904-02 and CDA-MEX-99-1904-01 and the termination of CDA-MEX-99-1904-01 “on the basis that [it] has been joined with and transferred to the Panel Review currently underway in CDA-97-1904-02".³ On July 22, 1999, counsel for the CITT filed a submission stating that it had complied with the Remand instructions of the Panel and that the matters relating to the Second Panel Review be heard with this Panel Review. On July 22, 1999, IPSCO Inc. filed a letter objecting to the filing of CDA-MEX-99-1904-01 on the basis that the DOR was not a definitive decision under subsection 77.01(1) of SIMA. On July 26, 1999, Stelco filed a response to the Motion as well as its own Notice of Motion requesting a dismissal of the Second Panel Review and the joinder of the two Panel Reviews to the extent necessary to deal with its motion. Algoma filed submissions stating it supported the position of Stelco. Permission to intervene was granted to the Attorney General of Canada and the Government of Mexico, each of whom filed submissions in opposition of the request to join panels.

This Panel reviewed the Determination on Remand, the Challenge, the Complainant’s Motion to join the second Panel Review to the one before this Panel and the submissions of the Parties to this issue. The DOR and the Complainant’s position are as follows.

(1) The Determination on Remand

In the DOR, the CITT, pursuant to section 77.016 of the SIMA, accepts that it erred in not issuing a separate finding for Mexico. This was corrected by issuing a Corrigendum to the Finding of October 27, 1997 in NQ-97-001. The Corrigendum states in relevant part as follows:

Pursuant to subsection 43(1) of the Special Import Measures Act, the Canadian International Trade Tribunal hereby finds that the dumping in Canada of the aforementioned goods originating in or exported from the People’s Republic of China, the Republic of South Africa and the Russian Federation has not caused material injury to the domestic injury, but is threatening to cause material injury to the domestic industry.

In accordance with subsection 43(1.01) and pursuant to subsection 43(1) of the Special Import Measures Act, the Canadian International Trade Tribunal hereby finds that the dumping in Canada of the aforementioned goods originating in or exported from Mexico has not caused injury to the domestic industry, but is threatening to cause material injury to the domestic industry.⁴

With respect to whether the Tribunal should have provided separate reasons for reaching its determination in respect of imports from Mexico, it maintains that “there is no separate legislative requirement or persuasive policy rationale to support the need for separate reasons to be issued with respect to the goods from Mexico”.⁵ First, it states that, while it is clear that subsection 43(1.01) and paragraph 43(2)(a) of SIMA require that the Tribunal issue a separate order or finding whenever goods of a NAFTA country are concerned, section 43(2)(b) imposes no such requirement with respect to reasons.⁶ At page 3 of the DOR it notes that 

If Parliament had wanted to impose such a requirement, it could easily have done so by slightly rewording the last phrase within paragraph 43(2)(b) to read: “separate reasons for making each order or finding or reasons for making each order or finding”. Such wording would have made the alleged requirements very clear. The reasons that there is no such wording in the paragraph is, in the Tribunal’s view, because there was no such intent.

Second, the Tribunal refers to the wording of other provisions, specifically Articles 802 of the NAFTA and s. 20.01 of the Canadian International Trade Tribunal Act, R.S.C. 1985, c. 47 (4^th Supp.), as indicative that where the NAFTA Parties intended to create special rights and obligations (such as the provision of reasons) they did so explicitly. Third, the Tribunal notes its right to cumulate goods of different nations as provided in sections 42 to 47 of the SIMA. It finds that because of this, providing separate reasons for a NAFTA Party would mean either parroting the same reasons provided for non-NAFTA Parties (therefore making them redundant) or providing a separate analysis for NAFTA Parties. The latter requirement, the Tribunal contends would prevent it from cumulating thereby circumventing the purpose of that measure and also result in the exclusion of NAFTA countries from Canadian trade laws. In addressing these contentions, the Tribunal revisits the issue of cumulation which was argued in its submissions before the Panel.

(2) The Complainant’s Challenge to the DOR

The Challenge to the DOR is based on the following grounds. First, the Complainant argues that the Tribunal failed to comply with the instructions of the Panel. It alleges that the Panel did not instruct the Tribunal to issue a Corrigendum of new orders and submits that not following a Panel’s explicit directions is reason to quash a DOR. 

Second, it submits that the Tribunal was functus officio and erred as a matter of jurisdiction and law in issuing a Corrigendum of two new Orders to replace the previously rendered single Order. The two new orders were effectively (1) a new s. 43(1.01) separate order in respect of imports from Mexico and (2) a new s. 43(1) group Order for the other subject countries. The Complainant alleges that in doing so, the Tribunal implied it had a right to reopen the existing order, reconsider Mexico separately and decide again. It also submits that the Tribunal was statutorily time barred from making such a new order since the statutory deadline to do so had expired 20 months previously in September of 1997.⁷ To protect its rights, the Complainant issued a Second Request for Panel Review based on the Corrigendum as a separate and definitive new decision pursuant to section 77.013(1) of the SIMA.

Third, the Complainant takes issue with the Tribunal’s finding that there was no requirement for separate reasons. It submits that the provisions of the SIMA must be read consistently with each other. Section 43(2)(b) clearly requires separate reasons within 15 days of issuing an order. It argues that the intent of Parliament was that separate reasons be provided for NAFTA parties.

Fourth, the Complainant takes issue with the jurisdiction of this Panel in this Panel Review to separate out and “remand” the portion of the s. 43(1) Order that applies to Mexico to “render a new order”. It is the Complainant’s position that for judicial review in this matter to proceed there must be a section 43(1.01) order currently in existence. The argument is that since a s. 43(1) order has no application to Mexico, such an order cannot be corrected for Mexico. Therefore, the Review must necessarily come to an end because the Panel has no jurisdiction. Essentially, without such jurisdiction, the Panel cannot order the Tribunal to now render a s. 43(1.01) Order for Mexico for the first time.⁸ Aside from being time barred, the Complainant submits that the remand of a s. 43(1) order to the Tribunal will not permit an order to issue pursuant to that section since it should be under s. 43(1.01).

(3) The Panel’s Findings

The Panel is unanimous under both the standard of patent unreasonableness and considerable deference in making the following findings with respect to the DOR and the Challenge.

(a) Functus Officio / New Definitive Decision

The Panel finds that the issuance of the Corrigendum to the Tribunal’s original finding in the Determination on Remand was consistent with the instructions given to the Tribunal by this Panel. It therefore, was not a definitive new decision which the Panel may quash. The Panel notes that it charged the Tribunal with the duty to interpret and apply the SIMA, including section 42, in a reasonable manner and that certain arguments made by the Tribunal went beyond the scope of that charge. Therefore, the Panel considered only arguments relevant to the issue of separate order and reasons in arriving at its determinations.

(b) Separate Order and Separate Reasons

In the review, the CITT claims to have analyzed imported steel from Mexico both on a cumulative basis and individually. If there was a requirement of individual analysis, this Panel would find that the CITT fell short notwithstanding its assertions to the contrary. However, as neither the SIMA nor the SIMA Regulations call for a separate analysis, the CITT need not analyze on an individual basis.

The SIMA, at s.43.1(1), does require the CITT to make a separate order or finding with respect to goods of a NAFTA country. Moreover, under s. 43(1.2), it is required to send to the parties a copy of the reasons for the making of the order. The CITT argues, however, that does not require “separate” reasons. 

Having considered the arguments of the parties and having reviewed the law, this Panel finds that the pertinent wording of the SIMA and the SIMA Regulations is open to different constructions. The Panel concludes that while it might have preferred to see separate reasons for Mexico, even if not based on an individual analysis, the CITT did not commit a reviewable error. That is, this Panel will not substitute its judgement for that of the CITT when the interpretation chosen by the CITT is neither patently unreasonable nor below the standard of considerable deference in the circumstances. This Panel affirms the Tribunal’s Determination on Remand in these respects. 

(c) Panel’s Jurisdiction to Remand Regarding the Separate Issue

The Panel further rejects the Complainant’s argument that the Panel itself lacks jurisdiction to remand the s. 43(1) order. The purpose of judicial review under Canadian administrative law, and specifically under the NAFTA and the Federal Court Act, is to correct errors made in the first instance. Therefore, the Panel can require the Tribunal to take necessary corrective action. The issue before the Panel is whether the final determination of the Tribunal, arrived at in NQ-97-001, constitutes a finding and order consistent with SIMA section 43(1). If that finding needs to be explained and/or corrected, the Panel can issue the necessary instructions that it be done. This is exactly what the Panel did in the Preliminary Decision. 

(d) Jurisdiction to Decide on CDA-MEX-99-1904-01 and the Motions

In its Motion, the Complainant requests that the Second Request for Panel Review, CDA-MEX-99-1904-01 be joined to CDA-97-1904-02, the current matter before this Panel. In its motion, Stelco requests an Order striking out CDA-MEX-99-1904-01 and the joinder of the two panel reviews for the purpose of hearing its motion and related procedural matters. The Panel dismisses both of these motion for the following reasons.

This Panel finds that its jurisdiction is limited to the review of the final determination to which it was appointed by the involved Parties under the NAFTA and under section 77.013(1) of the SIMA, specifically CDA-97-1904-02. Its jurisdiction derives from its appointment under Article 1904 of the NAFTA and Part I.1 of the SIMA. The Rules of Procedure do not confer substantive jurisdiction upon the Panel. They accord it authority only to regulate its own procedure in the matter before it, once appointed. It is acknowledged that, while a Panel can be appointed to more than one panel review, this may only occur if the Parties involved appoint the same Panel to those Panel Reviews. This has not been done. Therefore, this Panel cannot order a joinder of CDA-MEX-99-1904-01, a Panel Review to which it has not been appointed.

Rule 63(1) of the Rules of Procedure states that a Panel may decide a motion based on the pleadings filed pertaining to that motion. In light of the preceding findings, this Panel declines the request for oral submissions. It finds that it lacks jurisdiction to deal with matters relating to CDA-MEX-99-1904-01 and denies the motions for joinder. It, therefore, also finds that it cannot strike CDA-MEX-99-1904-01.

V. ISSUES

The decision of the Panel will deal with the issues raised by the Parties in the pleadings by addressing the following questions with respect to errors of jurisdiction, law and fact. While there is consensus on the determinations of alleged errors of jurisdiction, the Panel is divided on issues of law and fact. Therefore, the decision of the majority, based on the standard of patently unreasonableness, will be followed by that of the minority based on a standard of considerable deference.

Continue on to The Decision of the Panel

^{2 Preliminary Decision of the Panel, dated May 19, 1999, Minority Opinion p. 18.}

^{3 Motion of the Complainant dated July 14, 1999.}

^{4 Corrigendum to the Finding of October 27, 1997 dated June 21, 1999 issued as part of the Determination on Remand in NQ-97-001 Remand dated June 21, 1999.}

^{5 Determination on Remand of the Canadian International Trade Tribunal dated June 21, 1999.}

^{6 Ibid, at p. 3.}

^{7 Complainant’s Written Submissions of AHMSA in Reply to the June 21, 1999 Determination on Remand, date July 9,1999 at p. 14.}

^{8 Challenge, at para. 52.}