Commerce Has Adequately Supported Use of Brazilian, Malaysian Surrogate Data, US Says

The U.S. on Sept. 20 defended the Commerce Department’s continued decision on a second remand to use Brazil as the primary surrogate country and Malaysia for the surrogate values of a particular input in a 2019-2020 review of the antidumping duty order on multilayered wood flooring from China (Jiangsu Senmao Bamboo and Wood Industry Co. v. U.S., CIT # 22-00190).

It said the department looked at the surrogate information it had on the record and made the best decision it could, since none of the potential surrogates were perfect.

“This is precisely the sort of technical judgment call that Commerce is best positioned to make,” it said.

Exporter Jiangsu Senmao Bamboo and Wood Industry, the review’s sole mandatory respondent, argues that Commerce should be relying solely on Malaysian surrogate data instead of using the country only as a surrogate for one input, oak logs (see 2408200026). Court of International Trade Judge Jennifer Choe-Groves twice remanded the department’s final results after determining Commerce hadn’t adequately supported its decision to use two different surrogates with evidence -- the second time saying that citing its own interdepartmental memos wasn’t enough (see 2308250059 and 2404190032).

In its third results, Commerce maintained its position (see 2406180060), prompting Senmao to ask the trade court for a direct order that the department reconsider (see 2408200026).

But the department complied with CIT’s second remand order and provided adequate evidence for its decision, the government said in its Sept. 20 brief.

Again, it explained that, between the two surrogates it could choose from, only one, Brazilian exporter Duratex, could provide data for the review years of 2019 to 2020. Duratex also makes a more comparable product -- laminate flooring. The other potential surrogate, Malaysian exporter Focus Lumber Berhad, didn’t produce wood flooring and only offered records from 2018 to 2019, it said.

But Brazil’s import data doesn’t break out oak logs, so it isn’t even clear whether any oak logs were imported into the country at all during the period of review, it said. As a result, it said, Commerce decided to rely on Malaysian import data only for oak log input calculations, as Malaysia’s import data product categories were more specific.

It said the department had the authority to make these kinds of decisions.

“Senmao effectively asks this Court to substitute its judgment for that of Commerce, and hold that it is more important to value oak logs from the primary surrogate country than to use a contemporaneous financial statement from a producer of comparable merchandise,” it said.

The U.S. also again defended the adjustment Commerce made to the Brazilian data to improve accuracy.

That adjustment, it said, was the removal of a single data point that was not just aberrational, but “factually inaccurate on its face.”

“Commerce did not need to identify and define what was aberrational among thousands of data points; the clearly erroneous line item was easily discovered and removed,” it said.