Recent AD Petition on Strawberries Highlights Rarely Used Part of AD Law on Regional Cases
A recent antidumping petition on fresh winter strawberries from Mexico highlights a rarely used provision of the antidumping statute that allows the International Trade Commission to narrow the injury analysis to only a particular region in the U.S. Trade lawyers told us that there's clear statutory authority for a regional injury petition, but that the analysis may require a more pervasive showing of injury throughout the affected industry than an ordinary, nationwide injury analysis.
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The petition, filed Dec. 31 by attorneys at Buchanan Ingersoll on behalf of Strawberry Growers for Fair Trade, alleged that strawberries from Mexico were harming the U.S. industry (see 2601050051). The petition included two limitations that are not ordinarily found in other AD petitions. First, the U.S. growers limited the scope only to strawberries sold in the winter season, then it limited the injury to strawberries grown "East of the Mississippi River."
Daniel Pickard, partner at Buchanan Ingersoll and attorney who filed the petition, told us that regional industry cases are "extraordinarily rare," with the last one arising over cement from Mexico that ended in 2006 after protracted litigation before the World Trade Organization and the NAFTA dispute resolution system. However, Pickard said the facts in his case "show textbook regional industries," since "strawberry production is overwhelmingly concentrated in either California or Florida."
In the petition, the strawberry growers argued that the proposed region satisfies the statutory test for a regional industry established in 19 U.S.C. 1677(4)(C). The brief said "the producers within the region sell all or almost all of their production of the domestic like product within the regional market" and that the "demand in the region is not supplied, to any substantial degree, by producers of the domestic like product located elsewhere in the United States."
Lastly, the petition said there's a "concentration of dumped imports from the subject country in the region." While there's no "precise numerical limit" for finding when imports are sufficiently concentrated, the ITC has previously found percentages as low as 43% to be sufficient, the petition noted.
While getting the ITC and the Commerce Department to only look to one region in the U.S. to assess injury may not be a heavy lift, one petitioner's attorney told us that the ITC may require a showing that "all, or almost all, of the domestic producers are injured." The attorney cited the Mexican case in this claim, noting that while the ITC ultimately upheld its regional analysis, it established that a substantial amount of the domestic producers in the region have to be injured.
The statute specifically establishes a different injury standard in regional cases, declaring that that injury can be found "if the producers of all, or almost all, of the production within that market are being materially injured."
It's unclear if this same standard would apply in the present AD investigation, and the attorney suggested that, if it did, the strawberry growers may have a tougher time before the commission, since there are many more strawberry growers than cement mixers. "It seems challenging," the attorney said, adding that it's unclear "if the rules are any different for perishable, agricultural commodities."
As for why an industry might file a regional industry petition, one attorney said it might be the case "if there are other producers outside of the region that are doing better financially." Elizabeth Drake, partner at Schagrin Associates, said the provision may be used "where imports are concentrated in a certain region of the U.S. and not generally shipped long distances." In the cement case, cement was only really sold in certain regions, because it's "too heavy to ship long distances." Drake speculated that fresh strawberries are "perishable and also not shipped long distances."
Another unique aspect of the strawberries petition concerns its scope, which specifically only covers winter strawberries. While uncommon, such a scope is not unheard of, Drake said, citing past cases on winter tomatoes. Drake added that the Harmonized Tariff Schedule itself has different categories for strawberries and other fruits "entered during different times of the year, with different tariff treatment depending on the season."