Keg Importer Rails Against Commerce's SV Pick on Remand at CIT in Antidumping Case
While the Commerce Department complied with the Court of International Trade's remand instructions to reconsider the application of a Brazilian consumer price index (CPI) to a Mexican labor rate, the agency still used "unsupported and arbitrary justifications" to back its refusal to use Brazilian labor data in an antidumping duty case, plaintiff American Keg Co. argued. Filing comments on Commerce's remand results on Jan. 26 at the trade court, the plaintiff claimed that Commerce abused its discretion by using Mexican International Labour Organization (ILO) data that appears to not have been available at the time of the investigation (New American Keg v. United States, CIT # 20-00008).
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The case concerns Commerce's final determination in the antidumping duty investigation on refillable stainless steel kegs from China, brought by American Keg. In March 2021, CIT remanded three aspects of the determination, including an explanation as to why Malaysian labor data, which had signs of forced labor, was preferable to American Keg's preferred Brazilian labor data. Specifically, the court said that Commerce must explain, "apart from its talismanic invocation of its single-country surrogate and contemporaneity preferences," why the Malaysian data potentially tainted by the forced labor factors is better than the Brazilian data.
In its draft remand, Commerce swapped the Malaysian labor data for Mexican labor data. Then, in its final remand, the agency used Mexican data inflated with a Brazilian consumer price index, but it did so without explanation. American Keg continued to contest the surrogate value, and even Commerce requested a remand to further explain itself. The trade court granted the request (see 2209210039). On remand, Commerce dropped the Brazilian inflator but continued using the Mexican data. The agency said it has a preference for using ILO data, so it placed ILO data for Mexico on the record.
In its reply to these remand results, American Keg railed against the use of the ILO data and Commerce's explanation for its pick, which says that since Mexico was a producer of subject merchandise and Brazil was not, Mexico was a better surrogate. "This declaration is impermissibly results-oriented and again disregards the facts of this investigation and the agency’s usual practice for selecting SVs," the brief said. American Keg railed against Commerce's decision to reopen the record since the Brazilian data clearly satisfied the agency's SV criteria, thus "facilitating an accurate margin calculation and leaving Commerce's refusal to rely on that data without record support."
"In short, the agency’s well-established practice should have resulted in one clear outcome: Commerce would rely on the best information available on the original investigation record," the brief said. "No party claimed or demonstrated that the Brazilian data were unusable for any reason and, indeed, Commerce has never articulated such concerns in any of its determinations. To the contrary, Commerce has chosen to rely on the Brazilian data on two separate occasions. Its refusal to do so in this second remand proceeding ... represents yet another 'talismanic invocation of data preferences as a substitute for reasoned explanation' that is arbitrary and capricious."