ITA Must Take a Closer Look at GNI When Picking Surrogates in NME AD Cases, says CIT
The Court of International Trade remanded the use of India as the surrogate country for valuation of inputs for Chinese companies in the 2009-10 antidumping administrative review of certain frozen warmwater shrimp from China (A-570-893). Plaintiffs Ad Hoc Shrimp Trade Action Committee (AHSTAC) argued that the International Trade Administration should have used Thailand instead. CIT ruled that the ITA’s explanation that it followed its policy was not good enough, and that it needed to come back with a better explanation.
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(In non-market economy antidumping cases, the ITA uses prices from market economy countries to value quantities of inputs the Chinese or Vietnamese companies use in production of subject merchandise and estimate their costs. The ITA’s policy is to compile a list of “surrogate” countries at similar levels of development, measured by gross national income (GNI), and then selects one from the list based on economic comparability, significant production of comparable merchandise, and data availability. In this case, the ITA chose Indian prices to value Chinese inputs, instead of using data from Thailand, the Philippines, Indonesia, Ukraine, or Peru, which were also on the list. India’s GNI is less than half the average of the other five countries’, over $800 less than the next-lowest country’s, and nearly $2,000 less than China’s.)
The ITA argued that it simply followed its policy in selecting the surrogate country, noting that it treats all countries on the list as having a comparable level of economic development and that “that statute does not require [the ITA] to use a surrogate country that is at a level of economic development most comparable to the NME country.” But CIT said that referring only to policy does not constitute a reasonable explanation of an action. Furthermore, the ITA effectively disregarded the economic comparability basis for selecting a country off its surrogate list, instead relying solely on data availability and significant production of comparable merchandise. The decision to disregard economic comparability was arbitrary, CIT said, and remanded for further explanation.
(Ad Hoc Shrimp Trade Action Comm. v. United States, Slip Op. 12-145, dated 11/30/12, Judge Pogue)
(Attorneys: Andrew Kentz of Picard Kentz & Rowe for plaintiff Ad Hoc Shrimp Trade Action Committee; Joshua Kurland for defendant U.S. government; Mark Pardo of Grunfeld Desiderio for defendant intervenors Hilltop International and Ocean Duke Corporation.)