Plaintiffs' Use of CAFC Decision Over Cost-Based PMS 'Overstates' Case's Relevance, DOJ Tells CIT
Arguments from antidumping plaintiffs, led by Wilmar Trading, looking to invoke a recent U.S. Court of Appeals for the Federal Circuit opinion on whether a particular market situation exists "significantly overstates" the case's relevance, DOJ said in an April 7 reply brief (Wilmar Trading PTE v. United States, CIT Consol. #18-00121).
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In the case, Nexteel Co. v. United States, the Federal Circuit said that when finding a PMS, Commerce must find that the cost incurred to make the subject merchandise doesn't accurately reflect the cost of production in the ordinary course of trade and that the circumstances around the PMS finding are specific to producers of the subject merchandise during the investigation period (see 2203110044). A global phenomenon alone, such as the overcapacity of Chinese steel, would not amount to a deviation from the ordinary course of trade.
In the AD duty case contested by the plaintiffs, Commerce disregarded Wilmar's home market sales and nearly all of its reported costs due to a PMS in Indonesia. The agency said the PMS existed based on a Public Service Obligation program that requires biodiesel producers to sell a certain amount of biodiesel in Indonesia at a market-set price. Commerce also found a PMS for Wilmar's crude palm oil costs based on the Indonesian government's export tax and export levy on CPO, which lowers its cost.
Plaintiffs Wilmar, Wilmar Bioenergi Indonesia and Wilmar Oleo North America invoked Nexteel in their antidumping case to argue that Commerce could not rely on mere government intervention as evidence of market distortion without facts linking the finding of subsidization and the cost of the input under review (see 2203250034). The U.S. contested this characterization, arguing that the plaintiffs cannot use an opinion looking at a cost-based PMS to undermine a sales-based PMS finding.
The plaintiffs seek to use Nexteel to "re-hash factual arguments" inaccurately claiming that Commerce verified the market-based nature of Wilmar's sales prices, DOJ argued. Commerce addressed these arguments already, the brief said. "Additionally, the circumstances apparent from the record here are precisely the opposite of the 'global phenomenon' issue that Wilmar highlights from NEXTEEL because in that case Commerce was concerned about a Chinese market overcapacity phenomenon that affected global markets well beyond Korea, whereas in this case Commerce based its PMS determination on an Indonesia-specific phenomenon that is evidenced by the divergence of prices in Indonesia from the rest of the world," the brief said.