Commerce Sticks by Indian Surrogate Country Pick in Fish Fillet AD Review

The Commerce Department stuck by its positions in an antidumping duty review, in Aug. 23 remand results. The agency further explained its selection of India as the primary surrogate country and its analysis of respondent NTSF Seafoods' reporting of the company's ratio of whole live fish to fillets and the moisture content of the fillets (Catfish Farmers of America v. U.S., CIT #20-00105).

The case concerns the administrative review of the antidumping duty order on frozen fish fillets from Vietnam. In April, the Court of International Trade sent back elements of the review, including the primary surrogate country choice. In the review, Commerce identified six potential surrogate countries, one of which was India. The AD petitioner, Catfish Farmers of America, submitted data promoting Indonesia as a surrogate. Catfish Farmers argued that India should have been disqualified as a surrogate because it's not a significant producer of comparable merchandise and even if it were, Commerce still should have used Indonesia, which has a comparable level of economic development to Vietnam and superior data compared with India's.

The court sent the issue back to Commerce (see 2205030068), finding that Commerce failed to address the point of whether Indonesia is at a comparable level of economic development using the same World Bank gross national income data it used to find that India was at a comparable level of economic development to Vietnam.

In its response, Commerce first explained its sequential surrogate country selection process. In this method, the agency looks to pick a country at the same level -- not a comparable level -- of economic development as the nonmarket economy, then looks at whether the country is a significant producer of comparable merchandise and if it has usable surrogate value data. Applying this method to the present review, Commerce said picking India over Indonesia was consistent with the agency's past determinations and the court's past decisions. Looking to the GNI data on which the court based the remand, Commerce said India was identified as having the same economic development level as Vietnam while Indonesia was outside the per capita GNI range.

"Thus, despite the petitioners’ arguments that Indonesia represents a country at a comparable level of economic development as Vietnam, it was not at the same level of economic development" and didn't present a scenario where Commerce must afford "'that country the same consideration as others on the list' of countries at the same level of economic development,'" the remand results said.

Commerce also addressed the trade court's critique of the agency's rationale for selecting India, which said the Indian data was superior because it was from India. "This passage was not intended to suggest any inherent superiority of the Indian data; rather, it reflects the standard application of Commerce’s sequential surrogate country selection process," the brief said. "Having determined that only one country, i.e., India, was at the same level of economic development as Vietnam (and was a significant producer of comparable merchandise, and provides adequate data for this review), Commerce appropriately deemed Indonesia not eligible to be the primary surrogate country because there were countries that were at the same level of economic development as Vietnam, and, consequently, it was inappropriate to consider the Indonesian SV data."

The trade court also sent back the surrogate country choice to address the petitioner's point that the Indian data cannot be the best since it doesn't represent a broad market average. The court pointed to the petitioner's contrary evidence that called into question Commerce's claim that 80% of pangasius production in India came from one state, Andhra Pradesh -- the source of the agency's data. Looking at the evidence which shows this state only made 58% of the country's pangasius, Commerce said this data is the best for many reasons, including that the state produced the majority of the pangasius. The agency called this "a significant consideration," and consistent with past practice.

The agency addressed the court's concerns over Commerce's use of labor data from 2006, 11 years before the period of review (POR). While it prefers contemporaneous data, the agency deemed the labor data "more appropriate for other reasons," and thus it should stand. "Here, the wage data was specific to India, and although the values for this [factor of production] contained in the [International Labor Organization] wage data are not themselves contemporaneous with the POR, Commerce inflated that data to reflect wage rates for the POR," the brief said. "Moreover, there is nothing on the record to suggest, nor do parties argue, that the values are anomalous."

The judge also sent back the dispute over the moisture content of NTSF's shipments. Catfish Farmers alleged that NTSF overstated the amount of water in its finished frozen fish fillets and understated the amount of actual fish. Judge M. Miller Baker found that Commerce didn't address any of the record evidence on this point. On remand, the agency looked at the petitioner's three pieces of contracting evidence and found them unreliable.

For instance, looking at moisture tests that called NTSF's reporting into question, Commerce said the tests didn't fully conform with the respondent's "actual production experience." The agency said the fillets may have been patted dryer than is typical and the product did not sit in chilled water for hours before freezing, which affected the moisture content. The agency poked similar holes in the petitioner's other two pieces of detracting evidence.

Commerce further stuck by its acceptance of NTSF's reported ratio of whole live fish to fillets after the court said the agency failed to address certain evidence. Commerce said when it calculated a whole fish to fillet ratio from the information in verification reports cited by the petitioner, "the figures are consistent with NTSF’s reported yield for its subject merchandise." It said "none of the companies verified in these earlier segments, or NTSF in this segment, had a whole fish to fillet ratio as high as the ratios proposed by the petitioners here."