Commerce's All-Others Rate Flies in Face of CIT Opinion, Chinese Exporters Tell Trade Court

The Commerce Department didn't follow the Court of International Trade's instructions when it continued to find the all-others rate in an antidumping duty investigation by averaging a respondent's zero percent margin and the high China-wide rate, the consolidated plaintiffs, led by Zhejiang Dehua TB Import & Export, argued in a Dec. 29 brief. The plaintiffs blasted Commerce's justification for the move -- that it had a limited record for calculating the separate rate respondents' actual rates -- since "this deficiency is of Commerce's own making" (Linyi Chengen Import and Export Co. v. U.S., CIT Consol. #18-00002).

In the case, 40 plaintiffs challenged the antidumping duty investigation into hardwood plywood products from China. Commerce had assigned the two mandatory respondents, Linyi Chengen and Dongfang, a zero percent and a 114.72% adverse facts available China-wide dumping margin, respectively. The agency then established the rate assigned to the non-examined, separate rate companies involved in this litigation by departing from the expected method and averaging the two rates to get a 57.36% rate.

In the fourth opinion in the case, Judge Jennifer Choe-Groves upheld Commerce's decision to depart from the expected method (see 2109240039). Following this method would have resulted in a zero percent dumping margin for the non-indivdually examined respondents -- an outcome that Commerce said wasn't representative of the non-individually examined respondents' rates due to evidence showing a non-zero dumping margin.

However, Choe-Groves remanded the final rate that the agency eventually landed on. The judge held that Commerce can't simply average the zero and AFA rates because this would lead to a rate not based on any company's actual data and doesn't reasonably represent their dumping margins. On remand, Commerce came back with the decision that it had to average the zero percent margin and the AFA rate due to an alleged lack of viable alternatives (see 2111120039).

For instance, in its third remand results, Commerce said that the dumping margins alleged in the petition are representative of the actual selling behavior of separate rate recipients and that this evidence distinguishes Chengen's selling behavior and that of the all-others rate recipients. So, the agency looked at the two antidumping rates, which were 104.06% and 114.72%. Averaging these two rates would ignore additional evidence on the record of the investigation, precluding this possibility, the agency said. Commerce said that averaging the Chengen and AFA rates as opposed to the petition rates is the best course of action and satisfies the court's requirement that the rates be reasonable and based on record evidence.

The consolidated plaintiffs, in their Dec. 29 brief, opposed this argument, blasting Commerce's reliance on the petition price quotes of a Chinese exporter and the prices in the commercial invoice of that same exporter's separate rate application. The trade court expressed skepticism over the reasonableness of the exporter's low prices compared with Chengen's. The plaintiffs said the dumping rate could be much lower than what Commerce found because there is nothing on the record to establish normal value or factors of production.

The brief also included arguments, again, over the U.S. Court of Appeals for the Federal Circuit's opinion in Yangzhou Bestpak Gifts & Crafts v. U.S. This decision held that Commerce can't assign a cooperative respondent a rate that was half of the China-wide rate when the respondent showed it was independent of government control and where the result may be punitive. "Commerce’s actions for the Separate Rates Respondents here result in just the opposite of encouraging cooperation -- Commerce is effectively telling separate rates companies that their cooperation will not matter and that Commerce will simply assign an arbitrary and punitive rate to them, regardless of their cooperation," the brief said.