Trade Court Again Remands Commerce's Surrogate Selection Process in AD Review on Indian Fish
The Court of International Trade on Feb. 26 again sent back the Commerce Department's decision that Indonesian data is not economically comparable to Vietnam as part of its surrogate country selection process, along with the agency's consideration of evidence pertaining to exporter NTSF Seafoods Joint Stock Company's production information.
Judge M. Miller Baker again remanded the 15th review of the antidumping duty order on frozen fish fillets from Vietnam, finding that, after a first remand, Commerce didn't explain why it excluded Indonesia from consideration as a surrogate. However, the judge did sustain the agency's consideration of evidence pertaining to the moisture content of NTSF's fish.
In the review, petitioner Catfish Farmers of America argued that Indonesia was the proper surrogate country to use even though the agency went with India and Indonesia didn't even make Commerce's six-country short list. Baker previously found that the agency didn't properly analyze whether Indonesia was of comparable economic development to the other surrogate candidates, sending back the issue for Commerce to either remedy or further explain (see 2307170051). The court said Commerce used circular reasoning to find the Indian data to be superior, since the agency said the Indonesian information wasn't from the primary surrogate of India and so was inherently inferior.
Commerce doubled down on remand, telling the court that its statement was not meant to suggest any inherent superiority of the Indian data but rather a "standard application" of its sequential surrogate country selection process. In a second opinion, Baker said that the underlying problem "is that the Department went off the rails in its sequential selection process when it excluded Indonesia from consideration as a surrogate because that country was only at a comparable (rather than the same) level of economic development."
In the first opinion, Baker also told Commerce to explain its use of data from the publication Fishing Chimes in finding that the Indian data represents a broad market average. The court noted that Catfish Farmers cited evidence showing that 80% of pangasius production in India solely came from the Indian state of Andhra Pradesh. After Commerce tried to explain how the Fishing Chimes data actually pulled from areas across India, Baker said that the study "does not support Commerce's conclusion."
While the study refers to pangasius farming in over 300 villages from two districts, it says that "only 46 of the 300 villages studied were located in those districts," meaning the other 254 studied villages were not in those districts. Baker also previously remanded the use of the Fishing Chimes data as it pertained to the "whole live fish" input, since the agency's finding was that the Indian data for the input is a broad market average. Commerce's remand did nothing to address this issue, the court said, remanding the issue again.
Baker also had previously remanded Commerce's valuation of labor inputs since the agency used 2006 Indian labor data despite its stated preference for contemporaneous data. Commerce again doubled down, saying timeliness didn't matter since India is the primary surrogate nation. Even if Commerce lawfully finds that Indonesia is not at a comparable level of economic development, "it must address how it is reasonable to use Indian data from eleven years before the period of review" when the agency's own policies require contemporaneous data when possible, the court said.
The opinion lastly touched on Commerce's consideration of evidence proffered by Catfish Farmers pertaining to NTSF's reporting of its factors of production. Previously, the court remanded the "whole live fish" input issue since the petitioner cited three reports showing that around 3.2 kg of whole fish is needed to get 1 kg of product, and there was no indication that Commerce considered the reports.
On remand, Commerce said NTSF's whole live fish figures are within the ranges found in "verification reports from yield tests Commerce performed during prior administrative reviews that are part of the record here." The agency said Catfish Farmers' reports were "unpersuasive" since the agency didn't "either take part in or observe the creation of the studies." That the agency didn't participate in or observe the preparation of the evidence "does not excuse its failure to address that material on its own merits," the opinion said.
The U.S. did request a remand for the "other aspect of the 'whole live fish' issue" which concerned "possible double counting." The court granted the voluntary remand bid pertaining to this issue as well.
However, Baker did sustain Commerce's rejection of Catfish Farmers' claim that NTSF "overstated the amount of water and understated the volume of fish in its products." On remand, Commerce said NTSF's evidence had third-party inspection certificates pertaining to moisture content, which showed that the company's reported moisture "did not exceed the stated maximum in the contract" and that the test reports had moisture levels within 1% of those that the exporter reported.
Product labels cited by Catfish Farmers "did not undermine NTSF's reporting" since the customer specifies what information is on the label and not the company, Commerce said on remand. Catfish Farmers argued that Commerce's logic, which was that the inspection reports are reliable since they came from a trusted "independent third party," applies to the labels as well. Baker disagreed, finding that "nothing in the record ties the customer labels to any testing protocols or shows that NTSF controls the labels' contents," which is not true of the inspection reports.
(Catfish Farmers of America v. United States, Slip Op. 24-23, CIT # 20-00105, dated 02/26/24; Judge: M. Miller Baker; Attorneys: Nazak Nikakhtar of Wiley Rein for plaintiff Catfish Farmers of America; Brian Boynton for defendant U.S. government; Robert Gosselink of Trade Pacific for defendant-intervenor NTSF Seafoods Joint Stock Company)