AD Petitioner Takes Aim at Commerce's Export Price Construction in Canadian Lumber AD Review

The Commerce Department erred by not removing countervailing duty costs from the prices used to establish export price and constructed export price in the 2021 review of the antidumping duty order on softwood lumber products from Canada, petitioner Committee Overseeing Action for Lumber International Trade Investigations or Negotiations argued (Committee Overseeing Action for Lumber International Trade Investigations or Negotiations v. U.S., CIT # 23-00189).

In a Sept. 8 complaint at the Court of International Trade, the petitioner also said the agency's general and administrative expense ratio did not "reasonably reflect" the general and administrative (G&A) "costs related to the production of the merchandise under review because it was based on the constructed financial information of" the "fictional 'CFP Legal' entity."

In the review, Commerce picked the two largest exporters, Canfor Corp. and West Fraser Mills, as the mandatory respondents, assigning them 5.25% and 6.96% final dumping margins. The agency later published a correction to the review in response to comments filed by the coalition, the result of which changed the margin for West Fraser from 6.96% to 7.06%.

In its two-count complaint, the petitioner discussed Commerce's decision not to remove CVD costs from the prices used to set up export price and constructed export price. "By failing to remove these costs from U.S. price, Commerce’s comparison was distorted and failed to calculate a dumping margin that fully offset the amount of dumping that occurred during the [period of review]," the brief said.

The committee then discussed the cost of production calculation, which includes "an amount for selling, general and administrative expenses based on actual data relating to the production and sale of the foreign like product." In determining Canfor's cost of production, the agency used the company's G&A expense ratio, which was calculated based on the CFP Legal entity, which is "Canfor Corporation less Canfor Pulp Products Inc."

"This G&A expense ratio did not reasonably reflect the G&A costs related to the production of the merchandise under review because it was based on the constructed financial information of 'CFP Legal,'" the complaint said. "Commerce should have calculated the G&A expense ratio using the financial information of Canadian Forest Products Ltd. (CFP), the actual operating entity within Canfor Corporation responsible for the production of softwood lumber in Canada, because CFP’s G&A expenses actually relate to the production of the merchandise under review."