Commerce Properly Averaged 0% and AFA Rates in AD Case to Find Separate Rate, Petitioner Says

The Commerce Department reasonably derived the separate rate respondents' dumping margin in an antidumping duty investigation by averaging the mandatory respondents' zero percent and adverse facts available rates, petitioner Coalition for Fair Trade in Hardwood Plywood said in a Feb. 3 reply brief at the Court of International Trade. Responding to arguments made by the plaintiffs, led by Linyi Chengen Import and Export Co., Celtic Co. and Taraca Pacific, the coalition said that Commerce properly relied on the information laid out in the petition to derive the rates since it was already vetted by Commerce as part of the pre-initiation phase of the investigation (Linyi Chengen Import and Export Co. v. United States, CIT Consol. #18-00002).

In the case, 40 plaintiffs challenged the antidumping duty investigation into hardwood plywood products from China. Commerce had assigned the two mandatory respondents, Linyi Chengen and Dongfang, a zero percent and a 114.72% AFA China-wide dumping margin, respectively. The agency then established the rate assigned to the non-examined, separate rate companies involved in the litigation by departing from the expected method and averaging the two rates to get a 57.36% rate.

In the fourth opinion in the case, Judge Jennifer Choe-Groves upheld Commerce's decision to depart from the expected method (see 2109240039). This method would have resulted in a zero percent dumping margin -- an outcome Commerce deemed unrepresentative of the separate rate respondents' margin. However, the judge remanded the final rate, holding that Commerce can't simply average the zero and AFA rates because this would lead to a rate not based on any company's actual data and doesn't reasonably represent their dumping margins. On remand, Commerce came back with the decision that it had to average the zero percent margin and the AFA rate due to an alleged lack of viable alternatives (see 2111120039).

In its reply brief, the petitioner cited a January U.S. Court of Appeals for the Federal Circuit decision -- Bosun Tools Co. v. U.S. -- which said that Commerce can calculate the separate rate respondents' dumping margins by averaging zero and AFA rates (see 2201100026).

The plaintiffs said that Commerce ignored evidence over the actual dumping rate of the separate rate companies. In particular, Commerce disregarded evidence showing that some sales made by these companies were at prices above Linyi Chengen's prices and that Linyi Chengen's actual dumping margin was negative. "These arguments ignore Commerce's determination," the brief said. "Commerce expressly recognized that the selling behaviors of the separate rate companies likely varied and that some companies may have been dumping at levels closer to Linyi Chengen." This is why the agency didn't just use the petition rates, the coalition said.

The plaintiffs also went after Commerce's reliance on the information in the petition, arguing that it was unvetted and relied on a different surrogate country. "The petition rates were examined by Commerce as part of the pre-initiation phase of the investigation," the coalition said. "Thus, Commerce examined the data and the calculations used and determined that they were reasonable and reliable. Further, as Commerce explained, although Romania was ultimately used as the primary surrogate country in the investigation, Thailand is a market economy that was at a level of economic development comparable to China and was a significant producer of comparable merchandise."