US Chemical Makers Contest Commerce's Surrogate Country Pick in AD Review

Antidumping duty petitioners Bio-Lab, Innovative Water Care and Occidental Chemical Corp. took to the Court of International Trade on March 1 to contest the Commerce Department's surrogate country pick in the 2021-22 antidumping duty review on chlorinated isocyanurates from China (Bio-Lab v. United States, CIT # 24-00024).

In the review, Commerce created a "non-exhaustive list of countries" that are at the same level of economic development as China, based on per capita gross national income. The list had six names on it, none of which were Mexico. The petitioners argued that Mexico was comparable to China based on per capita GNI, also arguing that neither chlorinated isocyanurates nor the "essential raw materials" for the production of chlorinated isocyanurates were made in any of the six countries on the list.

Commerce ultimately chose Romania as its primary surrogate nation and said that there was no basis on which to consider Mexico as the primary surrogate. The agency said that since Romania was at the same level of economic development as China and made sodium hypochlorite, a "comparable" product, Romania was the right choice.

In their five-count complaint, the petitioners said that Commerce's decision to keep Mexico off the list of countries at the "same" or "comparable" level of economic development as China was unsupported based on the GNI numbers.

Bio-Lab also said that Commerce typically uses a "Sequencing Procedure" that calls for the analysis of economic comparability before it looks to merchandise comparability when identifying surrogate nations, though there's an exception for goods that are "unique or unusual." The record in the review "showed that the chemical composition of Isos or comparable merchandise requires the use of cyanuric acid, which imparts physical characteristics to Isos that are unique and are not found in sodium or calcium hypochlorite."

In addition, the record had evidence that these "physical characteristics impact the end use of Isos," making it "substantially different from the end uses of calcium or sodium hypochlorites." Sodium chlorite also involves "far fewer processing steps, intermediate chemicals, overhead costs, investment, and labor."

Mexico, meanwhile, made identical merchandise, making it a better surrogate pick, the complaint said.