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Commerce Unlawfully 'Restarting' Suspended Tomatoes AD Case

The Commerce Department made several errors in its handling of the resumption of an antidumping duty investigation on tomatoes from Mexico after the termination of a suspension agreement, Mexican tomato exporter Bioparques de Occidente said in a Sept. 13 reply brief at the Court of International Trade (Bioparques de Occidente v. U.S., CIT # 19-00204).

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Among other things, Bioparques argued that the continuation of the investigation was unlawful because the two-day clock for interested party notification began in November 1996, when Commerce first published its notice of suspension of the tomatoes investigation. The petitioner's request did not come until October 2019, 23 years later, Bioparques said. The government has argued that the deadline for requesting continuation was reset each time the investigation was suspended, but such an allowance could result in an "absurd outcome" where interested parties could extend the time limit indefinitely, Bioparques said.

Commerce is also unlawfully attempting to restart a new investigation rather than to "resume" the original, Bioparques said. The department's selection of new respondents and a new investigation period wasn't authorized by statute, it said. All that was needed to complete the original investigation was for Commerce to issue a final determination based on its analysis of already available data, Bioparques said.

In Commerce’s 1996 investigation of Mexican tomatoes, the agency examined sales from six mandatory respondents and published the preliminary dumping margins. It then conducted verification of the original questionnaire responses and received case and rebuttal briefs on the issues in the preliminary determination and verifications. Commerce chose not to complete its unfinished 1996 investigation and instead "decided to select completely new respondents ... and to request information from those respondents for a new investigation period more than 20 years after the period considered in the original investigation," Bioparques said.

The ageny also improperly based its determination on sales made during a period in which the suspension agreement was in force, despite the statute explicitly forbidding its consideration. Bioparques cited a 1997 article coauthored by current CIT Chief Judge Mark Barnett and Stephen Powell of Commerce, which said the relevant statute would "preclude consideration of prices and other market conditions after the 1996 Agreement took effect" but would not apply if the petitioners withdrew the old case and filed a new petition.

Commerce also improperly calculated the dumping margins using an average-to-transaction comparison, Bioparques said. The agency's "long-standing practice" is to calculate dumping margins using an average-to-average comparison in cases concerning "highly perishable agricultural products," because the price of perishable products fluctuates significantly over a short period of time. No party disputes that fresh tomatoes meet the criteria of a highly perishable product.

Contrary to the government's argument, the statute only permits the use of the average-to-transaction methodology where there is a pattern of export prices for comparable merchandise that differ significantly and when the department explains why such differences couldn't be taken into account using the average-to-average method, Bioparques said.

In its margin calculation, the department also improperly used investigation-period data instead of monthly average normal values, Bioparques said. Although the government correctly asserted that Commerce didn't find evidence of high inflation during the investigation period, the agency also had a prior practice of using average normal values for highly perishable products, which it agreed that fresh tomatoes were, the exporter said.

Finally, the exporter argued that Commerce improperly included inflated prices in its home-market sales comparison. Commerce found that unusually high prices alone didn't justify the exclusion of the sales, but Bioparques argued that the prices "were necessarily distorted by the operation of the Suspension Agreement," in addition to aberrant weather, including Hurricane Michael in October 2018.