DOJ Defends Commerce Benchmark Calculations and AFA Use in Chinese Wood Flooring Case

DOJ on June 21 urged the Court of International Trade to uphold the Commerce Department's calculations of benchmark prices for plywood and veneer, as well as its use of adverse inferences on the use of the Chinese Export Buyer's Credit Program, in a countervailing duty review on multilayered wood flooring from China (Baroque Timber Industries (Zhongshan) Co. v. U.S., CIT # 22-00210).

The datasets identified by Commerce included inventory purchased by the parties, DOJ said, adding that the agency used both the "robust" UN Comtrade global dataset and the "more limited" set available from the International Tropical Timber Organization (ITTO). Although the Comtrade data was not specific to particular grades of plywood, DOJ said it encompassed the grades purchased by respondents during the period of review.

The case is a consolidation of four separate actions brought by lead plaintiffs Zhejiang Dadongwu Greenhome Wood, Evolutions Flooring, Baroque Timber Industries (Zhongshan) Co. and Fine Furniture (Shanghai). CIT combined the cases in September (see 2209200031).

The plaintiffs argued that Commerce should have ignored the Comtrade data entirely and used only a narrow set of ITTO data (see 2303100041). Such a move would have included data from only Peru and Brazil for plywood and from only Peru and Ghana for veneer, which would have ignored 19 C.F.R. § 351.51(a)(2)(ii), which requires Commerce to take the average of all "commercially available world market price{s}" and would have resulted in an "unreasonably narrow and potentially distorted subset of data," DOJ said.

Commerce’s determination to apply adverse inferences based on the government of China’s failure to comply with information requests regarding the EBCP also was correct, DOJ said. CIT established a standard in Guizhou Tyre v. U.S.that the department fully complied with by providing a thorough explanation of information that the Chinese government failed to provide, why that information was necessary to verify claims that respondents did not benefit from the EBC program, and why no other sources of information could satisfy such a verification.

DOJ admitted that in other cases, CIT found that Commerce failed to make the requisite showing. In this case, it argued that Commerce provided a "thorough and reasoned explanation" of its determination that addresses the concerns previously raised by the court, pointing to Chinese refusal to transmit 2013 updates to its export-import bank EBCP guidelines.