Commerce Misused d Test, Resulting in 'Tainted' Margins, Canadian Lumber Exporters Say

The Commerce Department incorrectly calculated dumping rates for Canadian lumber exporters and used those "tainted" margins to calculate rates for other companies, a coalition including the governments of Canada and Quebec said in an Oct. 6 complaint to the Court of International Trade. The case is yet another involving the alleged misapplication of the Cohen's d test in Commerce's differential pricing methodology (Government of Canada, et al. v. U.S., CIT # 23-00187).

Commerce unlawfully departed from the methods outlined in the relevant statistics literature and ignored "essential principles" underlying the test, which rendered its use "defective," the Canadians said. Commerce’s use of the differential pricing methodology also failed to identify a pattern of export prices that differed significantly among purchasers, regions, or periods of time or explain why those differences couldn't be addressed using the preferred average-to-average methodology, they said.

The complaint challenges the fourth administrative review of the antidumping duty order on softwood lumber products from Canada. In its final results, Commerce calculated a 5.25% margin for Canfor and 7.06% for West Fraser, the two mandatory respondents. Commerce then used those numbers to calculate a 6.26% margin for the non-individually examined companies.

The Canadians argued that Commerce ignored an "extensive analysis" by statistics professor Larry Hedges, which they say described how Commerce’s use of the Cohen’s d produced unreliable results since it was used in an unintended way.

The supposed price differences found using the test were not the result of "targeted dumping," but rather responses to "market volatility" by West Fraser and Canfor, the Canadians said. The department mischaracterized its obligation to consider evidence that ran counter to its conclusion of targeted dumping, they said, rendering the conclusion unsupported by substantial evidence and not in accordance with the law.