Commerce Ignored Gaps in Record in Reversing AD/CVD Circumvention Determination, Petitioner Says

The Commerce Department's decision on remand to reverse its affirmative determination that certain hardwood plywood products from China circumvented antidumping and countervailing duties "defies a wealth of evidence about what actually occurred in the hardwood plywood market," petitioner Coalition for Fair Trade in Hardwood Plywood said in June 7 comments on Commerce's remand results. Commerce ignored multiple pieces of contradictory evidence in making its determination following a Court of International Trade opinion remanding the case and made a determination that undermines its own conclusion that certain hardwood plywood was not "later-developed" after the AD/CVD orders, the coalition said (Shelter Forest International Acquisition, Inc. et al v. United States, CIT #19-00212).

The anti-circumvention inquiry at issue in the case concerned plywood with face and back veneers of radiata or agathis pine, CARB or TSCA-compliant, made with resin composed mostly of urea formaldehyde, polyvinyl acetate or soy, allegedly developed after the AD/CVD orders on hardwood plywood were put in place. During the inquiry, Commerce determined that one voluntary respondent, Shelter Forest, made similar goods before the AD/CVD orders were issued, but that it was not made from one of the resins at issue in the case. This resulted in the agency finding that Shelter Forest circumvented the orders.

In a Feb. 18 decision, Judge Jane Restani determined that Commerce did not have sufficient evidence to make this determination, since the agency made it impossible for the companies in question to prove the plywood was commercially available before the order was put in place (see 2102180040). Restani ordered Commerce to consider evidence it had previously rejected. After reconsidering the evidence, which showed that Shelter Forest made its glue with urea-formaldehyde, Commerce reversed its decision and said that the hardwood plywood products were not later developed merchandise (see 2105110035).

The Coalition for Fair Trade in Hardwood Plywood said in its comments that, while it may seem as though Commerce and CIT are "headed toward a decision in this case," it is one that overlooks serious gaps in the record. The coalition identified two such gaps that it believes Commerce must address and which indicates support for the original conclusion of AD/CVD circumvention. First, although the coalition said that documentation provided by Shelter Forest provides "no indication" that its supplier provided manufactured plywood with melamine-urea formaldehyde despite Shelter Forest's insistence that its goods were made with such, Commerce's remand does not address this gap in the record.

The coalition also argued that Shelter Forest's claims about the resin it used conflict with other information on the record. Sales documentation reveals that the product at issue was made with weather and boil proof (WBP) rated glue, and Shelter Forest claims that by adding melamine to urea-formaldehyde glue, the glue obtains a WBP rating. Again pointing to Shelter Forest's catalog, the coalition said that the producer's catalog contradicts this claim since it says the glue is not considered waterproof. Commerce found that Shelter Forest's addition of melamine to its glue "was new and considered a 'trade secret.'" However, "This reasoning fails to grapple with the underlying issue and only serves to underscore the inherent contradictions in Shelter's documentation," the coalition said.

To not be considered developed after the AD/CVD orders, Commerce must conclude that the goods-in-question should be "commercially available" before the investigation. However, if Shelter Forest was making the certain type of hardwood plywood before the investigations but the "actual characteristics" of these goods were considered a trade secret, it's "not reasonable to consider such merchandise commercially available for the purpose of later developed merchandise provision," the coalition said. "[E]ven if these products may have technically existed, if their exi[s]tence was obscured from the public via Shelter’s own statements, then there is no basis to conclude that the Coalition knew or should have known that they existed -- let alone that they were 'commercially available.'"