CIT Upholds Brazilian Wage Data as Surrogate Data in AD Case on Chinese Kegs
The Commerce Department properly decided not to reopen the record to inflate Mexican surrogate wage data and ultimately choose Brazilian wage data in the antidumping duty investigation on beer kegs from China, the Court of International Trade said. Sustaining Commerce's third remand results in the case, Judge M. Miller Baker said the agency reasonably said it was "unnecessary to reopen the record to inflate the Mexican wage figures" when the Brazilian data "suited the agency's purposes."
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The court previously remanded Commerce's use of a Mexican wage rate adjusted with Brazilian inflation data to calculate surrogate labor costs for respondent Ningbo Master International Trade Co. On remand for the second time, the agency dropped its use of the Brazilian inflator, but reopened the record to use a new Mexican data set (see 2211140037). Baker rejected the move to reopen the record since the agency's claimed reason for doing so, "informational accuracy," didn't require the move (see 2401310064).
In its third remand, the agency didn't reopen the record and ultimately selected Brazilian wage data with a Brazilian inflation adjustment for the surrogate wage figure, much to Ningbo Master's chagrin (see 2403260080).
The respondent said Commerce should have allowed for the submission of new data since the agency sometimes exercises its discretion to do so. Baker said that "discretionary authority need not be used in every case," and, here, the agency appropriately used its discretion not to reopen the record.
Ningbo Master said that Commerce had a practice of putting consumer price index inflators on the public record, though the court said the examples of this practice cited by the respondent "did not involve reopening a record after remand when the existing one 'allow[ed] an accurate margin calculation.'"
The respondent also claimed that Commerce violated its normal practice by not picking the existing Mexican wage data as the best available information, then using a Mexican CPI inflator on the record. Baker identified two problems with this claim, the first of which is that it "relies on reasoning that the court has already rejected." The previous reopening of the record to add new Mexican data was arbitrary since the existing record "allowed for an accurate margin calculation," the judge said.
In addition, Commerce's "(since-recanted) reasoning" that Ningbo Master invokes "is flawed on its own terms," the court said. The respondent cites the agency's methodology for picking labor value after Commerce picked a primary surrogate country, while the dispute here is on the selection of a "surrogate country for labor valuation" -- an "antecedent question" governed by a different agency practice.
Ningbo Master also argued that the Brazilian wage data and inflator used by Commerce is unsupported since the Mexican wage data is still the best on the record. Baker rejected this claim, finding that Commerce reasonably found that its "general preference for a surrogate value derived from a country producing identical merchandise 'does not outweigh' the Brazilian data’s satisfaction of the other preferences." Even still, the agency's preference for a surrogate from a country making the same goods is just a preference and not a rule.
The respondent "may be unhappy with how the agency weighed" the factors, but Commerce's decision is supported by substantial evidence, the decision said.
Ningbo Master added that there are no actual data difficulties with the Mexican data since Commerce can just apply the Brazilian inflator. Baker said this issue "has already been resolved," since the court already said Commerce failed to explain how it was "appropriate" to use an inflator for a different country. The respondent next said that the Mexican data is superior even without an inflator. To this, Baker said the exporter overlooked the court's role, which isn't to evaluate whether Commerce picked the best information but rather whether a "reasonable mind" could find that the agency chose the best available information.
Seeing as the choice was between "non-contemporaneous and non-inflatable Mexican data and non-contemporaneous but inflatable Brazilian data, the Department chose the latter. ... That was reasonable," Baker held.
(New American Keg v. United States, Slip Op. 24-129, CIT # 20-00008, dated 11/25/24; Judge: M. Miller Baker; Attorneys: Whitney Rolig of Picard Kentz for plaintiff New American Keg; Brian Boynton for defendant U.S. government; Gregory Menegaz of deKieffer & Horgan for defendant-intervenors Ningbo Master International Trade Co. and Guangzhou Jingye Machinery Co.)