Korean Gov't Says Commerce Conflates 'Disproportionality' With 'Disparity'
The Commerce Department continues to conflate "disproportionality" with "disparity" in its de facto specificity finding regarding a Korean electricity subsidy, the South Korean government told the Court of International Trade earlier this month. The trade court and the U.S. Court of Appeals for the Federal Circuit have routinely found that these two concepts are distinct, yet Commerce ignores the courts' instruction when finding that the Korean steel industry, when paired with two unrelated industries, consumes a disproportionate amount of an electricity subsidy, the brief said (Hyundai Steel v. United States, CIT Consol. # 24-00190).
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To assess whether respondents Hyundai and Dongkuk Steel Mill received a disproportionate amount of the subsidy in the 2022 administrative review of the countervailing duty order on cut-to-length carbon-quality steel plate from South Korea, the agency grouped three unrelated industries and found that, together, they disproportionately received the subsidy.
In a case on the 2021 review of the same CVD order, Judge Claire Kelly rejected this grouping, finding disproportionality doesn't just mean the industries received a lot of the subsidy and holding that the grouping of the three industries was unexplained (see 2508190057). On remand, Commerce altered its analysis, opting to compare Hyundai's "share of total industrial class electricity consumed in 2021 to Hyundai Steel's share of Korea's GDP for 2021" (see 2512230066).
Kelly is also presiding over the case on the 2022 review.
Arguing against the grouping of the three unrelated industries for the specificity analysis in the 2022 review, the South Korean government echoes Kelly's opinion in the 2021 CVD review case and argues that the U.S. misconstrues the word "disproportionate." The brief added that electricity in Korea isn't countervailable, since it's "widely available and broadly used and provided through a standard pricing mechanism."
The U.S. "conveniently ignores the material and undisputed facts that electricity is widely available and used in Korea and that electricity is provided pursuant to a standard pricing mechanism," the brief said. The South Korean government also contested the grouping of the three unrelated industries as unreasonable.
While the U.S. and the petitioner argue that Commerce wasn't required to find whether a "group" of industries share characteristics under the statute, the Korean government said this claim "completely miss[es] the point." The agency's failure isn't its failure to consider the industries' "shared characteristics," "but rather within its failure to explain the basis for its grouping to determine de facto specificity," the brief said. "By failing to do so, Commerce’s grouping was unreasonable, unprincipled, and results-oriented, especially because Commerce simply grouped the top three industries in terms of electricity usage to find that they received 'disproportionate' benefit."
Commerce also "abused its discretion" when it chose "overly broad electricity consumption data over the revised, more accurate data," the Korean government said.
The agency relied on electricity consumption data as reported in the Korean government's initial questionnaire response for the de facto specificity determination. However, the Korean government later supplemented the data "with more complete and accurate data, and Commerce verified that data," Hyundai said in its brief (see 2511210023). The Korean government added to Hyundai's point, arguing that the "revised consumption data were more accurate as they excluded irrelevant industries from each industry categorization and were based on the widely used official industry classification scheme in Korea."