Commerce Discredited Position on China's EBCP in CVD Review, Plaintiffs Tell CIT

The Commerce Department's recent decision in a separate investigation that it can actually verify non-use of China's Export Buyer's Credit Program appeared in litigation over a separate countervailing duty review via two sets of Oct. 29 comments on remand results filed at the Court of International Trade. The lead plaintiff in the case, Guizhou Tyre Co., attacked Commerce's decision to continue applying adverse facts available relating to the EBCP, given this reversal. The consolidated plaintiffs in the case, led by the China Manufacturers Alliance, in their own comments, argued that Commerce "has expended enormous resources and time in this action defending a position that it has itself discredited" (Guizhou Tyre Co. Ltd. v. United States, CIT #19-00032).

The case stems from the final results of the CVD investigation on truck and bus tires from China in which Guizhou Tyre Co., the plaintiff, served as one of the two mandatory respondents. As it has done many times, Commerce applied AFA on the respondents' alleged use of the EBCP because it wasn't able to acquire two key bits of information which it deemed necessary to verify that the respondents' U.S. customers did not use the program. The agency requested the information from the Chinese government, which did not fork over the information on the program, prompting the AFA application.

CIT has repeatedly held that this rationale is not supported to apply AFA in this circumstance. In the most recent opinion in Guizhou's case, Judge Timothy Reif requested that if Commerce is going to stick by its AFA finding for the EBCP, it needs to answer a litany of questions about why the requested information is essential for verifying non-use. The judge referenced the movie "Groundhog Day" in his opinion, referring to the cyclical nature of this issue (see 2105270080). Commerce came back and answered all of Reif's questions, attempting to get the court to sustain its use of AFA in this instance (see 2109090069).

However, in a separate CVD investigation, Commerce said that it was able to verify non-use of the program without the requested information from the Chinese government (see 2110140053). This contention undercuts its supposition that the agency would not be able to verify non-use without the requested information, the comments said

Running with the "Groundhog Day" reference, Guizhou put its own spin on the judge's invocation of the cult classic. "But like Phil Connors breaking the time loop by changing his ways toward Larry the cameraman, his producer Rita, and others, Commerce too has broken the 'Groundhog Day' spell with regard to this matter," the comments said. Since Commerce verified that a respondent's U.S. customers didn't use the EBCP, the loop is broken and Commerce's argument that it needs certain information from the Chinese government falls apart, the brief said.

The two key bits of information Commerce requested from the Chinese government concern an alleged $2 million threshold within the program, under which loans are not made, and the third-party banks that participate in the program. Guizhou now argues that it is unnecessary to engage in Commerce's "theoretical objections" to verification because it was able to verify non-use of the program without these bits of information.