Congress Meant for CVD Law to Apply to Disparate Processed Ag Goods, CVD Petitioner Tells CAFC

Congress intended for subsidies given to "disparate processed agricultural products" to be countervailable under countervailing duty laws, the Coalition for Fair Trade in Ripe Olives argued in a reply brief at the U.S. Court of Appeals for the Federal Circuit. Responding to arguments from three Spanish olive exporters against the Commerce Department's "substantially dependent finding" in the Spanish olives CVD investigation, the coalition said that Commerce "responsibly interpreted the statutory language broadly" and in line with statutory intent (Asociacion de Exportadores e Industriales de Aceitunas de Mesa v. U.S., Fed. Cir. # 23-1162).

The agency properly rejected the exporters' "baseless insistence that there must be a 'single continuous line of production' for a substantial dependence finding to be valid," the coalition said. The CVD petitioner added that despite the exporters' "highly attenuated attempts to massage the data" to back their claims, evidence supports the substantial dependence finding.

Commerce found in the investigation that Spanish olive growers received a subsidy via the EU's Common Agricultural Policy scheme, which is administered through the Spanish government. The three respondents, all appellants in the appeal and led by the Asociacion de Exportadores e Industriales de Aceitunas de Mesa, filed suit to contest the conclusion that the demand for certain raw olive varietals is substantially dependent on table olives, allowing the agency to countervail subsidies on raw olives.

After the initial remand by the Court of International Trade, Commerce tweaked its substantially dependent analysis to find that ripe olives' prior stage good is table olives and dual-use raw olive varietals that are biologically distinct from other raw olives, and that the latter-stage product is all table olives. The trade court found this to be acceptable because 55.28% of the specific olive varietals were made into table olives, sustaining the remand redetermination (see 2209140052).

In their Federal Circuit appeal, the exporters said the CIT decision cannot stand since it runs contrary to the agency's "exhaustive discussion of this issue" in the pork from Canada and rice from Thailand AD/CVD cases.

The coalition criticized the exporters' reliance on these "nearly forty-year-old administrative decisions" as running contrary to congressional intent. The petitioner said that there is no evidence Congress considered the agency's methodologies in these decisions, which Commerce adopted based on the specific facts of each proceeding, to be "so final that the agency would not have the discretion to adopt different methodologies in cases on other products." In fact, the coalition asserted that there is evidence to the contrary, invoking Congress' reference to raspberries as an example of an agricultural product for which countervailing duties could be circumvented if subsidies to farmers were not attributed to a further processed product.

"Raspberries and fish differ from pork and rice (and each other) in many ways, and by referencing these distinctly different agricultural products, Congress demonstrated its expectation and intent that Commerce would not slavishly apply every aspect of its practice in Pork from Canada and Rice from Thailand to every agricultural case that followed, no matter how different the product," the brief said.

The coalition added that Commerce correctly used the record information to analyze the relationships between the categories of olive varietals. "The record does not support Appellants’ claim that table olive and mill olive varietals are grown interchangeably, but rather demonstrates that there is in practice little crossover between these categories," the brief said. The exporters "fundamentally misrepresent these data," the coalition argued.