In re Live Swine from Canada

The United States Department of Commerce (Commerce) determined that benefits enjoyed by Canadian swine producers amounted to subsidies targeting the swine industry under United States tariff statutes. The Canada-United States Free Trade Agreement (CUSFTA) provided for disputed antidumping agency rulings to be heard by a binational panel (BP). The Canadian government (Canada) (defendant) challenged Commerce’s finding before a BP. The Tariff Act of 1930, as amended in 1992, stated that the BP should overturn Commerce’s ruling if the ruling was unlawful or not supported by substantial evidence in the record. The BP cited this standard of review and stated that it would defer to Commerce’s interpretation of ambiguous provisions of the act so long as it was sufficiently reasonable. The BP concluded that Commerce’s determination was neither lawful nor based on sufficient evidence. The United States Trade Representative (USTR) (plaintiff) sought to challenge the BP’s ruling before an Extraordinary Challenge Committee (ECC). Under the CUSFTA, appeal to an ECC was available to a party that could show that the BP had exceeded its powers or jurisdiction. A BP could exceed its powers by applying the wrong standard of review. Before the ECC, Canada argued that a BP should be considered to have applied the wrong standard of review only if it explicitly rejected the correct standard. The USTR argued that the BP’s reversal of Commerce’s decision and its stipulation of a different test for Commerce to apply showed that the BP had exceeded its jurisdiction.