Don't Confuse Disproportionality With Disparity in Specificity Analysis, Korean Gov't Says

The South Korean government urged the Court of International Trade to not confuse "disparity" with "disproportionality" in assessing the Commerce Department's de facto specificity finding on the Korean government's alleged provision of electricity below cost. Filing a reply brief on Aug. 12 in a case on the 2021 countervailing duty review on cut-to-length carbon-quality steel plate from South Korea, the Korean government said the fact that a few industries used a large amount of electricity doesn't establish de facto specificity (Hyundai Steel Co. v. United States, CIT # 23-00211).

The U.S. and petitioner Nucor Corp. used the fact that the South Korean economy was "widely diversified, with 19 industry groups," to find that the steel industry and three other industries consumed a "disproportionately large amount of electricity." In response, the Korean government said this only establishes a disparity in electricity use based on the relative size of the industries and not a disproportionate use of electricity.

Evidence shows that "certain industries, such as the semiconductor and automobile industries, are significantly larger and thus more energy-intensive than other industries," the brief said. These industries "naturally tend to consume more electricity than other smaller, non-manufacturing industries, such as retail or travel industries," meaning "a difference in electricity consumption only means that there is a disparity, not disproportionality."

The Korean government added that the government's and Nucor's claims "highlight fundamental inconsistencies in Commerce's analysis." For instance, of the 19 industry groups the agency considered, many of the industry groupings "would not fall within the industrial user classification when purchasing electricity" but would instead "fall within the general, educational, or agricultural classifications."

Since Commerce's economic diversity finding "was based on a broad range of economic activities that included individuals and companies that do not consume industrial electricity, any specificity analysis relying on that economic-diversity finding should have compared the electricity consumption by the steel industry" to the economy-wide consumption rates in Korea.

The Korean government also opposed Commerce's refusal to accept the 2021 cost information from the state electricity company, KEPCO. Despite the information being filed out of time, evidence shows the agency had "sufficient time to consider the 2021 KEPCO cost data each time the GOK offered to provide it well before Commerce’s deadline to issue the Final Results," the brief said. Commerce abused its discretion in refusing to take the information due to its importance, the brief said.