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Commerce Erred in CVD Calculation, AFA Use, on Wood Flooring From China, Exporter Argues

The Commerce Department made multiple errors, including miscalculating benchmark data and the use of adverse inferences, in a countervailing duty review on multilayered wood flooring from China, Baroque Timber Industries said in its Sept. 15 reply at the Court of International Trade. Those alleged errors resulted in inaccurate CVD rates for Fine Furniture and other Chinese wood flooring exporters, Baroque said in a motion for judgment in March (see 2303100041) (Baroque Timber Industries (Zhongshan) Co. v. U.S., CIT # 22-00210).

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Commerce erred when it averaged UN Comtrade data and International Tropical Timber Organization (ITTO) data for Brazil and Peru to calculate the plywood benchmark and then failed to provide a reasoned explanation, Baroque said. The average data doesn't satisfy the "prevailing market conditions" criteria for benchmark data because it wasn't grade-specific and was unrepresentative of backboard or face veneer purchases, Baroque said.

Instead, Commerce should simply have used the ITTO data, which is grade-specific and which Commerce determined to be both individually and independently reliable. Record evidence also showed that "no subject merchandise producer in China would use plywood grades higher than those reported by the ITTO data" and that Baroque didn't purchase or use plywood grades outside of the grades covered by the ITTO data, Baroque said.

Despite the government acknowledging that Commerce’s practice is to "narrow the datasets where the record and data allow," it has attempted to rationalize why Commerce included non-grade specific UN Comtrade in the benchmark, Baroque said. Evidence showed that if the Comtrade data had been broken out by grade-specific subheadings, Commerce wouldn't have included the dissimilar grades in the average of the benchmark, Baroque said. Therefore, there is no basis to use data that included much more costly, grade A plywood.

Commerce also miscalculated the inland freight benchmark by not using a weighted average. Different respondents reported purchases in differing units and Commerce failed to account for different transport distances, which resulted in distortions, Baroque said. Using a simple average didn't fulfill Commerce's mandate to calculate the CVD rate as accurately as possible, the exporter argued.

Finally, Baroque took issue with Commerce's use of adverse inferences with respect to Baroque's customers' usage of the Export Buyer's Credit Program. The Chinese government didn't provide Commerce with the 2013 Administrative Measures revisions to the program, but Baroque argued that the missing information wasn't necessary to determine usage. Various investigations by Commerce establish that the department itself "has determined that these missing pieces of information are in fact not 'necessary' to establish non-usage of the EBCP," Baroque said. The department should have accepted statements of non-use in questionnaire responses as it has in similar investigations, Baroque argued.

DOJ argued in June that Commerce used both the "robust" UN Comtrade global dataset and the "more limited" ITTO set (see 2306230008).

The case is a consolidation of four separate actions brought by lead plaintiffs Zhejiang Dadongwu Greenhome Wood, Evolutions Flooring, Baroque Timber Industries (Zhongshan) Co. and Fine Furniture (Shanghai). CIT combined the cases in September (see 2209200031).