CIT Remands New ITA Labor Surrogate Policy in NME AD Cases
The International Trade Administration’s new methodology for determining surrogate wage rates in antidumping proceedings for non-market economies (NME) is reasonable, but the ITA must choose the surrogate country based on evidence, and not simply because it is used to value other inputs, said the Court of International Trade as it remanded in part the final results of the 09-10 AD review of certain frozen warmwater shrimp from Vietnam (A-552-802). CIT also affirmed the ITA’s use of zeroing in the administrative review.
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(The ITA generally uses data from one country to calculate all surrogate values for inputs in NME AD cases, but historically deviated from that practice when it came to surrogate labor data. Prior to 2010, the ITA used a regression-based methodology using wage rate data from many countries to value labor costs. A 2010 CAFC ruling invalidated that policy because it used data from economically dissimilar countries that did not necessarily produce comparable merchandise. The ITA began using a simple average of labor rates from economically similar countries that were “significant producers” of subject merchandise, but this policy was narrowed by a 2011 CIT ruling that the ITA’s interpretation of “significant producer” was too broad. So later in 2011, the ITA published a final rule that said it would use a single country to value the labor surrogate value, and that this country would be the surrogate country used for all other surrogate values in the proceeding. (See ITT’s Online Archives 11062120 for summary of the final rule.)
In response to defendant-intervenor Ad Hoc Shrimp Trade Action Committee’s (AHSTAC) challenge of the methodology, CIT generally upheld the ITA’s new policy of using data from one country to value labor inputs in NME AD proceedings. The ITA’s explanation that it can’t find enough countries that are both economically comparable and significant producers of subject merchandise is reasonable, CIT said.
But the ITA’s decision to choose Bangladesh to value labor inputs simply because it chose that country to value other inputs was not supported by substantial evidence, CIT said. According to CIT, the ITA has previously said wage rates vary widely based on a country’s GDP. In this case, Bangladesh’s GDP is about half of Vietnam’s. AHSTAC’s preferred surrogate country for labor, the Philippines, has a GDP twice as big as Vietnam’s. Wage rates from the two countries differed accordingly, CIT said. As the ITA did not account for this disparity, and given the ITA’s history of treating labor inputs as different from other inputs, CIT said the ITA must either (1) reconsider whether it is reasonable to value labor using only data from the primary surrogate country; or (2) provide further explanation of its decision.
(Camau Frozen Seafood Processing Imp. Exp. Corp. v. United States, Slip Op. 12-137, dated 11/15/12, Judge Pogue)
(Attorneys: Matthew Nicely of Thompson Hine for various Vietnamese plaintiffs; Joshua Kurland for defendant U.S. government; Andrew Kentz of Picard Kentz & Rowe for defendant-intervenor AHSTAC; Terrence Stewart of Stewart & Stewart for defendant-intervenor American Shrimp Processors Association)