Here is a communication from Canada dated April 16 related to the Supercalendered Paper case:
The Dispute Settlement Body (DSB) adopted the recommendations of the panel and Appellate Body in US – Supercalendered Paper (DS505) on 5 March 2020. Pursuant to Article 21.3 of the Dispute Settlement Understanding (DSU), the United States must inform the DSB of its intentions in respect of implementation of those recommendations. It is Canada’s understanding that the United States has not done so.
Canada assumes that the relevant time frames under DSU Article 22 with respect to this dispute will be interpreted in the light of the current suspension of all WTO meetings, including DSB meetings, until the end of April 2020 and potentially beyond that time. While the DSU provides that the DSB shall meet as often as necessary to carry out its functions within the time frames provided in the DSU, Canada understands that there is currently no means for the DSB to do so.
In view of these circumstances, Canada informs you that it intends to request authorization from the DSB, with respect to US – Supercalendered Paper, to suspend the application to the United States of concessions in accordance with Article 22 of the DSU at the next DSB meeting held after the end of the current suspension of such meetings.
Canada has already communicated its intentions to the United States so as to provide it with an opportunity to comment on this proposed course of action before 12:00p.m. CEST on 17 April 2020. In addition, Canada has indicated that it remains at the U.S. disposition to discuss a mutually agreed solution with respect to this dispute.
Here is an excerpt from the U.S. response on April 17:
The United States is in receipt of Canada's April 16, 2020, letter, concerning its intention in the dispute United States – Countervailing Measures on Supercalendered Paper from Canada to request authorization from the Dispute Settlement Body (DSB) at the next DSB meeting to suspend the application of concessions to the United States. My authorities have requested me to provide the following comments.
The United States objects to the premise of Canada's communication, which is that the DSB adopted recommendations in this dispute on March 5, 2020. The position of the United States is clear that no recommendation was or could be adopted by the DSB because the appellate and panel reports were not adopted by DSB consensus. ...
...
as the United States made clear at the March 5 DSB meeting, because there was no valid Appellate Body report in this dispute, the appellate and panel reports could only be adopted by positive consensus. As there was no consensus on adoption, the DSB did not adopt any reports in this dispute. Accordingly, there is no recommendation for the United States to bring a measure into conformity with a covered agreement.
At the same March 5 DSB meeting, Canada agreed that the allegations with regard to Ms. Zhao's affiliation with the Government of China and participation in the appeal are serious and stated that they deserve full and impartial consideration in a manner that provides due process for all parties.
The United States therefore expects that Canada will join the United States in seeking to ensure that the integrity and impartiality of the WTO dispute settlement mechanism is maintained.
The United States requests that you distribute this communication electronically to the Members of the DSB and circulate it when feasible to do so.
We could make a lot of the U.S. arguments, but I'm not sure they really matter. They go against the spirit of the rules, but the spirit was in trouble long before this happened. Practically speaking, the issue is that the United States says it's not going to comply (something that is not unheard of in WTO disputes). So now the question becomes, will Canada go ahead with retaliation right away (subject to an Article 22.6 arbitration if the U.S. requests one)? Canada certainly has an argument that it is permitted to do so. It's worth noting that if the United States had made a half-hearted effort that sort of looked like compliance, it could have delayed retaliation until after an Article 21.5 proceeding was completed.
ADDED: I had wondered what the practical impact of all this would be, and perhaps this is the answer:
“There are currently no duties being levied by the U.S. on Canadian supercalendered paper,” said Ryan Nearing, a spokesman for International Trade Minister Mary Ng. “However, Canada intends to keep its right to retaliate in case duties are ever unjustly imposed in the future.”
The absence of retaliation makes it easier for the U.S. to take this approach.
