Commerce Backs Surrogate Pick in AD Case After Dropping Malaysia Due to Forced Labor Concerns

The Commerce Department defended its actions to drop its reliance on Malaysian surrogate data in an antidumping duty investigation after the Court of International Trade raised questions over the distortive effects of forced labor in Malaysia. In a brief Nov. 4, Commerce said it was correct to use certain Mexican data instead of the Malaysian data (New American Keg, d/b/a American Keg Co. v. U.S., CIT #20-00008).

The litigation stems from a challenge to Commerce's final determination in the antidumping duty investigation of refillable stainless steel kegs from China brought by American Keg. Following a March order from CIT, Commerce reconsidered evidence that showed signs of forced labor in Malaysia's electrical and electronics sector. Finding that this forced labor unfairly skewed the labor costs for consideration as surrogate data, Commerce instead opted to use International Labor Comparisons data for Mexico in 2016 to determine the surrogate labor value (see 2107080067).

American Keg, in its comments on the remand results, signed off on the decision to drop the Malaysia surrogate data. "As American Keg acknowledges, Commerce reviewed all of the record evidence and made a 'thorough and reasoned determination' that the Malaysia labor rates are not the best available information on the record," Commerce said.

American Keg, however, continues to oppose Commerce's surrogate data pick, pushing instead for Brazilian surrogate data. The question now moves off Malaysia and onto the proper surrogate data selection for calculating normal value in the investigation. Commerce defended its choice of Mexico, saying Mexico makes identical subject merchandise, while there are no Brazilian producers of the type of steel kegs under review.