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US Defends 'Longstanding' Protein Content Reporting Requirements in AD Reviews at CAFC

Italian pasta exporters La Molisana and Valdigrano di Flavio Pagani failed in their attempt to provide compelling reasons for the Commerce Department to do away with "longstanding, transparent, and consistent instructions for reporting protein content," the U.S. said in a Nov. 9 reply brief at the U.S. Court of Appeals for the Federal Circuit (La Molisana v. United States, Fed. Cir. # 23-2060).

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Responding to the exporters' claims that Commerce should have adjusted its threshold for differentiating between different pasta types as part of the duty calculation in the 2018-19 antidumping review of pasta from Italy, the government claimed that its practice and binding case law "direct" the agency to base its product-matching criteria on the finished pasta's physical characteristics. These characteristics, including protein content, are found on the product's nutrition label.

As the Court of International Trade "correctly held," the coding for protein content based on the nutrition label "fosters transparency and consistency in [control number]-building," the brief said. The exporters' evidence does not show that Commerce's protein content reporting instructions, which have stood for over a decade, "result in comparisons between physically dissimilar products or fail to reflect market reality such that Commerce must alter them," the brief said.

La Molisana filed the case to contest Commerce's method used for reporting the protein content of pasta sold in Italy and the United States. In the AD review, pasta with a protein content over 12.5% is marked as "premium," while pasta with a protein content between 10% and 12.49% is marked as "standard." The exporters said this wasn't a correct breakline, submitting evidence to argue otherwise. Such evidence contained a market report compiled by La Molisana's counsel, which showed data on pasta bought from four grocery stores in the Washington, D.C., area and one food retail chain in Italy.

The trade court rejected the evidence and the claims (see 2309270057). At the appellate court, the exporters reasserted their claims that the evidence dismantles the agency's pasta protein content dividing line. In making the case, La Molisana said that the FDA's nutrition rounding rules, along with differing nitrogen content multiplier between Italy and the U.S., "masks the true protein content in pasta" and leads to comparisons of dissimilar products.

In response, the government said that differences due to the differing nitrogen content multipliers and FDA rounding rules "are not commercially significant." In fact, the agency switched to using nutrition label information for this purpose after its use of company-specific information from respondents -- the approach championed by La Molisana -- "led to a lack of consistency and clarity," the brief said.

The U.S. also trashed the exporters' market report, arguing that it is "not compelling evidence requiring a deviation from the current 12.5 percent dividing line." As held by the trade court, "this self-serving market report does not rise to the level of substantial evidence constituting a compelling reason for Commerce to revisit its methodology," the brief said. The government cited CIT in saying that "no serious argument can be made that the report is representative of the entire industry either in the United States or Italy."