Korean Exporter Challenges Use of 'd' Test, 'Transactions Disregarded Rule' in AD Case at Trade Court

The Commerce Department improperly relied on the Cohen's d statistical test when deciding to use an "average-to-transaction" as opposed to an "average-to-average" comparison of sales to calculate exporter HiSteel's dumping margin, HiSteel argued in a June 8 complaint at the Court of International Trade. Commerce used the test without establishing the conditions needed to make the test work as pointed out in a recent U.S. Court of Appeals for the Federal Circuit case, the exporter said (HiSteel Co. v. United States, CIT #22-00142).

HiSteel launched its case to contest Commerce's final results in the administrative review of the antidumping duty order on heavy walled rectangular welded carbon steel pipes and tubes from South Korea. In the review, to detect masked dumping, Commerce used the d test as part of its differential pricing analysis. The agency found that masked dumping was occurring, then decided to use the average-to-transaction method to calculate the dumping margin.

The exporter took its case to the trade court to argue that this was illegal since Commerce "adopted arbitrary cut-offs for determining whether a pattern of differential pricing existed" and also "failed to establish that the statutory requirements necessary to justify a departure from the normal average-to-average comparison methodology called for in the statute to determine HiSteel's antidumping margin were met." HiSteel based its claim, in part, on the Federal Circuit decision calling into question Commerce's use of the test without meeting certain statistical assumptions (see 2107150032).

HiSteel also contested Commerce's application of the "transactions disregarded rule" to slitting services received by HiSteel from an affiliate company. The exporter said evidence shows that the amounts it was charged fairly reflect the amount usually part of the merchandise sales under consideration. HiSteel lastly challenged Commerce's finding that the exporter's sale of scrap to an affiliated company did not reflect an arm's length price.