South Korea Defends Low-Cost Off-Peak Electricity, Cap-and-Trade Program Against Opposition
Supporting its own motion for judgment (see 2407190048) in a case regarding the oft-litigated countervailing duties on South Korea’s low-cost provision of off-peak electricity (see 2406200062), the Korean government said Nov. 26 the opposition’s cited cases were distinct from the current situation (POSCO v. U.S., CIT # 24-00006).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
It also defended South Korea’s cap-and-trade program, which allocates more emissions allowances to the country’s large exporters.
South Korean steel exporter POSCO filed a motion for judgment in June (see 2406200062) arguing that the Commerce Department had been wrong to reach a de facto specificity finding regarding South Korea’s provision of off-peak electricity for low cost. South Korea's government joined the case to support it, submitting a motion to the Court of International Trade in July.
In its Nov. 26 reply, the government again said that Commerce had wrongly reached its de facto specificity finding regarding POSCO on the basis that the steel industry was one of the three largest industries in South Korea that used electricity during off-peak hours.
“The provision of electricity is a clear example of a broadly available and widely used program that is not intended to be countervailed,” it said. “Therefore, any determination of de facto specificity must be carefully scrutinized.”
The cases cited by defendant-intervenor Nucor were distinguishable from the current situation because those cases dealt with the countervailing of electricity subsidies provided by the Chinese government to specific geographic regions -- and on the basis of adverse facts available, South Korea said. It argued that those subsidy programs weren’t “broadly available and widely used.”
Another case, Mosaic v. U.S., dealt with subsidized natural gas that was predominantly used by one industry, it said. This, too, was distinct, it said, because electricity is used by “virtually everyone” in South Korea, not “predominantly by any particular industry.”
And the foreign government said that “disproportionality should not be confused with disparity.” It said that the U.S. Court of Appeals for the Federal Circuit has ruled disproportionality can’t just be calculated by looking to usage rates of a particular program, as in that case a “benefit conferred on a large company might be disproportionate merely because of the size of the company.” Instead, determinations about disproportionality must take context into consideration, it said.
“Commerce made the same error here in the Final Results,” it said.
Grouping together the three industries to reach the disproportionality determination, it added again, was done without “any explanation or analysis” as to why they could be considered a “group of industries” under the relevant statute. Alone, the steel industry’s use of electricity wasn’t significantly disproportionate compared with Korea’s other industries, it said.
It also again defended South Korea’s cap-and-trade program. It argued again that there was no revenue forgone by the Korean government resulting from the additional emissions allowances South Korea granted to large exporters, pointing out that those exporters could have instead purchased additional allowances, if needed, from private sources.