Commerce Correctly Selected Surrogate Data and Calculated Rates in Fish Fillet AD Case, US Argues
The Commerce Department correctly chose surrogate data in an antidumping duty administrative review on frozen fish fillets from Vietnam, DOJ said in an April 20 response brief at the Court of International Trade. DOJ asked the court to sustain the final results of the AD review, saying that the various challenges to the country selection, separate rate and use of adverse facts available should be rejected (Green Farms Seafood Joint Stock Company v. U.S., CIT # 22-00092).
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Commerce correctly selected India as the primary surrogate country and correctly used Indian surrogate data to calculate normal values, DOJ said. Commerce correctly applied its four-step sequential surrogate country selection process guided by policy and case law. India was chosen because it was at a level of economic development comparable to Vietnam, was a significant producer of frozen fish fillets, and the record Indian data satisfied Commerce’s selection criteria.
The court is not required to find that Commerce's selection was reasonable, DOJ said, only that a reasonable mind could arrive at the same conclusion. The statute does not require that Commerce use any particular data source, and the agency has a preference for using as much data as possible from a single primary surrogate country.
The Catfish Farmers of America argued that Commerce erred by not considering Indonesia as a potential surrogate, as the agency had before. DOJ replied that "neither the statute nor Commerce’s surrogate selection criteria require it to consider whether countries have been selected as primary surrogate countries in previous segments," citing U.S. Court of Appeals for the Federal Circuit precedent.
Commerce determined that India is a significant producer of comparable merchandise because it exported nearly a million kilograms of frozen fish fillets during the period of investigation, and said that frozen fish fillets met the criteria of "comparable merchandise." Commerce had previously explained that its choice of India fillets allowed for "the selection of surrogate financial ratios from producers of similar products with similar capital structures." The products were not required to be identical, DOJ argued. CFA's argument that the alleged "lower quality” of Indian fillets was not comparable to Indonesian pangasius frozen fish fillets is irrelevant because Commerce reasonably chose India, DOJ said.
Commerce also reasonably explained its decision to grant East Sea Seafoods separate rate status, DOJ said. East Sea Seafoods met its burden by establishing that it operates outside of both de jure and de facto government control and cost analysis is unconnected from separate rate determinations, DOJ explained. Because East Sea Seafoods' non-cooperation that led Commerce to ultimately use adverse facts in its rate calculation did not concern the company’s separate rate status, Commerce was correct to grant it that separate rate, DOJ said.
Green Farms' rate of $1.94/kg was calculated with a simple average of the rates for selected respondents, NTSF Seafood's zero/kg rate and East Sea's $3.87/kg, calculated using AFA. Both the Catfish Farmers of America and Green Farms argued that the court should remand the separate rate calculated for Green Farms. CFA argued that Commerce’s calculation of NTSF’s zero margin incorrectly used Indian surrogate values (see 2302150042), while Green Farms argued that even if Commerce lawfully granted ESS a separate rate, it can't rely on an AFA rate to determine Green Farms’ separate rate (see 2303130029). The Federal Circuit affirmed that using a simple average of a de minimis or zero rate and a total AFA rate to calculate the separate rate is not erroneous, DOJ said.