Commerce Says Use of Brazilian Inflator With Mexican Wage Data in AD Investigation Was 'Improper'
The Commerce Department admitted that it was "improper" to inflate a Mexican labor wage rate using Brazilian consumer price index (CPI) data in an antidumping duty investigation. Submitting its remand results on Nov. 14 to the Court of International Trade, Commerce said it reopened the record and added Mexican wage rate data. The agency also found on remand that exporter Guangzhou Ulix Industrial & Trading Co. met the burden for achieving separate rate status. The result of the remand is a zero percent dumping margin for respondents Ningbo Master International Trade Co., Guangzhou Jingye Machinery Co. and now Ulix (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 New American Keg and American Keg Company. In March 2021, CIT remanded three aspects of the determination, including an explanation as to why Malaysian labor data, which carried 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. The agency said it has a preference for using International Labour Organization (ILO) data, so it placed ILO data for Mexico on the record. "Because the ILO data we used for these final results of redetermination are contemporaneous with the POI, it was not necessary to inflate the wage rate," the results said.
In the investigation, Commerce also granted a separate rate status to Ulix. In the case's first opinion, CIT said that Commerce failed to address American Keg's evidence that Ulix's U.S. customer was affiliated with the company -- a fact that would detract from the decision to grant it separate rate status. On remand, Commerce looked at the evidence and found that the record established that the U.S. customer and a third, unnamed company are affiliated and that yet another unnamed company may be affiliated with both. However, none of this shows that there is any shared ownership between Ulix and the U.S. customer and the other companies, Commerce said.
The trade court, though, again ruled that Commerce failed to find that Ulix rebutted the presumption of government control. The court said that given that there is evidence that the U.S. customer is affiliated with one of the unnamed companies, dubbed Company A, there needs to be evidence on the record that Company A is not affiliated with Ulix. In its remand, Commerce walks the court through its decision-making process for finding that Ulix does not have any American affiliates and is not affiliated with Company A, though the response is highly redacted.
"In summary, we conclude that Guangzhou Ulix has met its burden for separate rate status," the remand results said. "As instructed in the remand opinion, we have identified the evidence on the record that supports granting Guangzhou Ulix a separate rate. Guangzhou Ulix reported from its initial filing that it was not affiliated with the U.S. customer or any other companies located in the United States."