Canada - Certain Measures Concerning Periodicals, complaint by the United States (WT/DS31): Report of the Appellate Body

Summary

INTRODUCTION

Canada and the United States appeal from certain issues of law and legal interpretations in the Panel Report, Canada - Certain Measures Concerning Periodicals (the “Panel Report”). The Panel was established to consider a complaint by the United States against Canada concerning three measures: Tariff Code 9958, which prohibits the importation into Canada of certain periodicals, including split-run editions; Part V.1 of the Excise Tax Act, which imposes an excise tax on split-run editions of periodicals; and the application by Canada Post Corporation (“Canada Post”) of commercial “Canadian”, commercial “international” and “funded” publications mail postal rates, the latter through the Publications Assistance Program (the “PAP”) maintained by the Department of Canadian Heritage (“Canadian Heritage”) and Canada Post.

The Panel Report was circulated to the Members of the World Trade Organization (the “WTO”) on 14 March 1997. It contains the following conclusions:

(a) Tariff Code 9958 is inconsistent with Article XI:1 of GATT 1994 and cannot be justified under Article XX(d) of GATT 1994; (b) Part V.1 of the Excise Tax Act is inconsistent with Article III:2, first sentence, of GATT 1994; (c) the application by Canada Post of lower ”commercial Canadian” postal rates to domestically-produced periodicals than to imported periodicals, including additional discount options available only to domestic periodicals, is inconsistent with Article III:4 of GATT 1994; but (d) the maintenance of the “funded” rate scheme is justified under Article III:8(b) of GATT 1994.

The Panel made the following recommendation:

The Panel recommends that the Dispute Settlement Body request Canada to bring the measures that are found to be inconsistent with GATT 1994 into conformity with its obligations thereunder.

On 29 April 1997, Canada notified the Dispute Settlement Body (the “DSB”) of its intention to appeal certain issues of law covered in the Panel Report and legal interpretations developed by the Panel, pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), and filed a Notice of Appeal with the Appellate Body, pursuant to Rule 20 of the Working Procedures for Appellate Review (the “Working Procedures”).