US Wood Flooring Trade Group Contests Commerce's Results in AD and CVD Reviews

The American Manufacturers of Multilayered Wood Flooring filed two complaints at the Court of International Trade, one contesting the Commerce Department's final results in an antidumping duty review of MLWF from China and in a countervailing duty review of MLWF from China. The U.S. industry group said that Commerce erred in the AD review by deviating from its expected method when finding the final dumping margin for non-selected separate rate companies and that it erred in the CVD review by failing to properly construct benchmarks for veneers, fiberboard and paint, primer and stain (American Manufacturers of Multilayered Wood Flooring v. U.S., CIT #21-00595) (American Manufacturers of Multilayered Wood Flooring v. U.S., CIT #21-00596).

In the AD review, covering entries in 2018-2019, Commerce tapped Jiangsu Senmao Bamboo and Wood Industry Co. and Fusong Jinglong Group as the two mandatory respondents. Senmao was given a zero percent dumping margin while Jinglong didn't participate in the review, ultimately receiving the China-wide rate. Typically, when both respondents have either a zero, de minimis or adverse facts available rate, Commerce uses the expected method, whereby it weight averages the rates the mandatory respondents did receive.

In this review, though, Commerce said that the expected method was not feasible and that there was no evidence that the zero rate is not reasonably reflective of the non-examined respondents' potential dumping margins, the complaint said. This resulted in Commerce giving all the non-selected companies a zero percent dumping margin. AMMWF argued over this contention following Commerce's preliminary determination, arguing that the separate rate companies' margins should reflect the margins assigned to both mandatory respondents. The industry group further argued that this methodology for computing the separate rate would result in "dramatic year-to-year swings" in the duty rates that would "weaken the effectiveness and predictability" of the duty order.

Commerce stuck with its initial position and AMMWF brought its case to CIT, arguing that "Commerce improperly deviated from its expected method by failing to weight-average the final antidumping duty rates for the individually investigated respondent companies when calculating the final dumping margin for the non-selected separate rate companies." The trade group also argued that Commerce erred by treating Jinlong as part of the China-wide entity and excluding its margin from the separate-rate company duty calculation.

In the CVD review, though, covering entries in 2018, Commerce picked Riverside Plywood Corp. and Senmao as the mandatory respondents. AMMWF alleged that the respondents were receiving subsides via the provision of wood glues and adhesives, and paint, primer and stain for less than adequate remuneration. The respondents submitted benchmark data that included world export data from UN Comtrade to value the input purchases and data from the International Tropical Timber Organization to benchmark plywood purchases. The agency ended up using the UN Comtrade and the ITTO data, summing up all monthly quantity and value data from each source and calculating a monthly average unit value.

AMMWF took issue with this, arguing that Commerce should adopt a more "accurate" benchmark averaging methodology by taking the average of each Harmonized Tariff Schedule category of data and then combining those averages to make the benchmark. By not doing so, Commerce would "encourage gamesmanship" from CVD parties in submitting benchmark data and would thus "deprive" the agency of the best data, the industry group argued. AMMWF also said that Commerce needed to revise its plywood for LTAR benchmark to appropriately value the UN Comtrade and ITTO data on the record.

Addressing AMMWF's arguments in its final results, Commerce did remove certain duplicative data sources “by removing datasets from the same source with the same HS codes to ensure that data points are not over-counted in the benchmark price calculations," but it continued to make averages with multiple datasets from the same HTS category. As it pertains to the UN Comtrade and ITTO data, though, Commerce said that there's nothing on the record that shows the ITTO data is aberrational, so it continued to use it.

AMMWF is now challenging two elements of the review. The group argued that Commerce improperly constructed benchmarks for veneers, fiberboard and paint, primer and stain by "overweighing certain HTS categories where data was submitted by multiple parties." Also, the agency failed to properly include ITTO data in constructing benchmarks for plywood, the complaint said.