Mexico Over Malaysia Surrogate Country Pick Sustained by CIT

The Commerce Department's decision to pick Mexico over Malaysia as a surrogate country in an antidumping duty investigation on Chinese quartz surface products was properly supported, the Court of International Trade said in a Sept. 24 opinion. Judge Leo Gordon upheld the determination, finding that the plaintiff, mandatory respondent Foshan Yixin Stone Company Limited, needed to prove that Malaysia was "the one and only reasonable surrogate country selection" -- something it failed to do.

During the investigation, due to China's status as a non-market economy, Commerce had to pick a surrogate country from which to derive the normal value of the goods. The choice came down to Mexico and Malaysia. The agency went with the U.S.'s southern neighbor, finding that the country is a significant producer of identical and comparable merchandise and that there was specific Global Trade Atlas data for each input used by the mandatory respondent Yixin, while Malaysia's data was more limited. The investigation resulted with a 333.09% dumping margin for Yixin.

The respondent challenged this rate at CIT, arguing that the dumping margin was "absurd" and "commercially impossible" since it would have had to sell the merchandise at an export price that would've resulted in "massive operating losses." Gordon found that this argument only challenges the result of Commerce's calculations, as opposed to the "reasonableness of the inputs selected by Commerce as a basis for its dumping margin calculations." If it wanted to succeed, Yixin should've shown that the agency's calculations were not mathematically or factually accurate, or inconsistent with the method laid out in the statute, Gordon said.

Yixin also challenged Commerce's surrogate country pick, pushing instead for Malaysia. The respondent launched a challenge to the surrogate pick on multiple fronts, arguing against the reasonableness of Commerce's finding that Mexico is a significant producer of identical and comparable merchandise, pushing for its own surrogate pick and attempting to show that the Mexican data was not the best available.

On every front, Gordon sided with the U.S. Looking at the record, the judge said that Mexico is both a significant producer of identical merchandise and a significant producer of comparable merchandise. Gordon also found unpersuasive Yixin's arguments that Commerce's refusal to assess the reliability of Mexican quartz powder values by comparing benchmark prices from Malaysia and Thailand was unreasonable.

"Yixin concedes that Commerce retains the discretion to determine whether the agency should consider data from non-economically comparable countries," the opinion said. "Yixin has failed to demonstrate that, given the record, it was unreasonable for Commerce to refuse to compare the Mexican data against Thai data after finding that Thailand is not economically comparable to China."

(M S International, Inc., et al. v. United States, Slip Op. 21-130, CIT Consol. #19-00140, dated 09/24/21, Judge Leo Gordon. Attorneys: Matthew McGrath of Barnes Richardson for consolidated plaintiff Fosan Yixin Stone Company, Ltd.; Joshua Kurland for defendant U.S. government)