CIT Continues Case Involving AD Zeroing
In ThyssenKrupp Acciai Speciali Terni S.P.A. et. al. v. U.S. et al., the Court of International Trade denied the U.S.' motion to dismiss two counts of a four-count complaint involving the International Trade Administration's (ITA) Section 129 determination on the 1999 Antidumping Order applicable to ThyssenKrupp's stainless steel sheet and strips (SSSS) from Italy.
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Background. In 1998, the ITA initiated an AD investigation of imports of SSSS from Italy, and ultimately calculated a weighted-average dumping margin of 11.23% for imports of SSSS from ThyssenKrupp. To make this determination, the ITA used a methodology commonly referred to as "zeroing." When zeroing is used, the ITA determines the weighted-average dumping margin by excluding any export sales transactions which exceed the normal value.
In 2006, the World Trade Organization Dispute Settlement Body declared the ITA's us of zeroing when using average-to-average comparison methodology to be inconsistent with the U.S. obligations under the WTO agreements.
The ITA, at the request of U.S. Trade Representative (USTR), issued a Section 129 determination to correct and modify the 1999 AD order applicable to ThyssenKrupp's SSSS imports from 11.23% to 2.11%. (A margin of below 2% is considered de minimis and would have warranted revocation of the AD order.)
Section 129 of the Uruguay Round Agreements Act (set forth in 19 USC 3538), is the means by which final determinations resulting from AD investigations can be modified to comply with WTO rulings.
ThyssenKrupp filed a four-count complaint challenging the Section 129 proceeding. In the first two counts, ThyssenKrupp directly challenged the substance of the Section 129 determination. The third count alleged that the USTR's office acted arbitrarily and capriciously and abused its discretion when it directed ITA to implement a Section 129 determination that left errors uncorrected. In the fourth count, ThyssenKrupp alleged that the ITA unlawfully refused to correct the errors.
The CIT stated that the ultimate question posed by ThyssenKrupp's third and fourth counts was whether the ITA, in a Section 129 determination, may reconsider alleged errors that are entirely outside the scope of Section 129. If the ITA has the discretion to address the alleged errors, these two counts should be dismissed.
However, the CIT ruled that it would be premature for it to grant Defendants' motion to dismiss the third and fourth count without fully considering the merits of the other two counts. Thus the defendant's motion to dismiss is denied.
(See ITT's Online Archives or 05/15/08 news, 08051530, for BP summary of AD zeroing and its history in WTO disputes, including the average-to-average comparison methodology as well as other methodologies.)
CIT Slip Op. 08-72 (dated 07/01/08) available at: http://www.cit.uscourts.gov/slip_op/Slip_op08/08-72.pdf