NAFTA panel requested to review ITC paper decision

The respondents in a U.S. antidumping and countervailing duty case on uncoated groundwood paper — newsprint — from Canada ask that a binational body look at a ruling in their favor.    The government of Quebec and Resolute Forest Products (Resolute FP) are requesting that a binational NAFTA panel review a U.S. antidumping and countervailing duty case that ended in the termination of duties on uncoated groundwood paper from Canada in September, according to a Federal Register notice published Wednesday.
   Resolute FP was a respondent in the U.S. AD/CV duty case, which ended in the company’s favor when the ITC voted 5-0 on Aug. 29 that uncoated groundwood paper imports from Canada don’t materially injure U.S. industry, triggering the termination of AD and CV duties on the product, effective Sept. 27.
   The respondents’ panel request comes after King & Spalding law firm, on behalf of North Pacific Paper Company, the petitioner for the U.S. AD/CV duty case, on Oct. 17 filed notice of intent to appeal to the U.S. Court of International Trade (CIT) regarding the International Trade Commission’s (ITC’s) final determination that imports of the subject product do not injure U.S. industry.
   North Pacific spokesperson David Richey said the company is still reviewing the ITC’s final decision and has not yet decided whether to appeal.
   For AD/CV duty disputes between NAFTA parties, one or more parties to a case can also request review of final duty determinations by a NAFTA binational panel, a mechanism which directs cases outside of the domestic appeals process.
   “A binational panel supersedes review by the CIT,” Peterson Institute for International Economics nonresident senior fellow Gary Hufbauer said in an email. “The CIT basically tilts in favor of petitioners. So Resolute FP wants to lock in its victory.”
   In its Aug. 9 affirmative final CV determination, the Commerce Department had set a final CV rate of 9.81 percent on uncoated groundwood paper from Canada associated with Resolute FP Canada Inc.
   Resolute FP spokesperson Seth Kursman said his company prefers that legal review of the ITC’s determination take place before a NAFTA panel, as opposed to the CIT, adding in an email, “We believe a unanimous 5-0 vote by the ITC speaks quite eloquently on the issue.”
   “It’s not typical” for winning respondents in an AD/CV duty case to request a NAFTA panel in an effort to preempt an anticipated petitioner appeal to the CIT, Hufbauer added, noting that he believes Resolute FP and Quebec are using a unique strategy.
   The Canadian Embassy in Washington referred questions about the case to the government of Quebec, which declined to comment, citing pending litigation.
   “What’s unique about this case is it appears the Canadian parties have no legal claims,” K&L Gates attorney Stacy Ettinger said in an interview. “The International Trade Commission made a negative injury determination which means, in essence, the Canadian parties won. There is no antidumping or countervailing duty order.”
   In the past, NAFTA panels have reviewed AD/CVD decisions in which the requesting party was adversely impacted.
   It can take months to establish a NAFTA panel.
   King & Spalding did not respond to inquiries as to whether it and North Pacific will continue to pursue their case at the CIT.
   Under NAFTA Chapter 19, panels decide whether AD/CV duty determinations align with the domestic laws of the importing NAFTA party using the standard of review that would be applied by a domestic court of the importing party.
   Panels may uphold the duty determination or remand it to the national administering authority for action not inconsistent with the panel’s decision.
   Panels consist of five individuals, with the two involved NAFTA parties each appointing two panelists. If the parties can’t agree upon the fifth panelist, one of the parties, selected randomly, selects the fifth panelist from a preapproved roster.
   The majority of individuals on each panel must consist of lawyers in good standing, and the chair of the panel must be a lawyer.

Correction: A statement that CBP had been collecting CV cash deposits for imports of uncoated groundwood paper associated with Resolute FP after Commerce’s Aug. 9 final determination has been deleted from this article. Commerce set a final CV rate of 9.81 percent for imports associated with the firm, but indicated in its final determination that it would issue CV duty orders, require cash deposits, and suspend liquidation for entries only if the ITC issued a final affirmative injury determination.