Wood Flooring Exporters Say Input Suppliers Not Under Chinese Government Control
Two multilayered wood flooring exporters, Baroque Industries and Riverside Plywood, said Jan. 23 that the Commerce Department wrongly applied adverse facts available to several of Baroque’s input suppliers, determining they were under government control even though “[n]ecessary information for these eighteen suppliers was not missing from the record” (Baroque Timber Industries (Zhongshan) Co. v. United States, CIT # 24-00106).
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Their arguments, they said, are the same as those already before the Court of International Trade in a similar proceeding.
Commerce asked the Chinese government for input supplier appendix responses. The government “in virtually every case” will refuse “to provide the requested documents or answer many of the questions,” the two said. But in this case, the Chinese government “provided detailed responses” to all Commerce’s questions showing that the input suppliers in question were individually or foreign owned.
Commerce still found the responses insufficient and rejected them, resulting in AFA, they said. They argued that the department failed to provide adequate notice as to the deficiencies in responses with respect to each individual input supplier.
In essence, Commerce’s usual practice is to require “that the [government of China (GOC)] must provide documentary evidence to show that the lack of CCP official involvement but … not advise the GOC on what exactly that documentation is or how to prove a negative,” they said.
They also said that Commerce “for the first time in this proceeding” refused to use plywood, fiberboard and veneer tier 2 benchmark prices from the International Tropical Timber Organization (ITTO) because it incorrectly concluded some of them were export prices to China. In fact, in the previous review, the department made the “exact opposite” decision when it “refused to reject the ITTO domestic pricing,” the exporters said.
“Commerce’s determination regarding the ITTO export pricing categories is both replete with factual errors and contrary to past reviews finding these very same price categories acceptable,” they said.
Commerce was wrong to find that the ITTO data for three countries -- Ghana, Peru and Brazil -- included exports to China, they said.
Starting with Ghana, they said that the data was reported in euros, “suggesting a non-China destination.” Peru’s and Brazil’s data, meanwhile, “very clearly shows that the pricing represents export prices from Peru to Mexico” and from Brazil to the EU -- as the category headings read, respectively, “Mexican market” and “EU market,” they said.
They also argued that “rejecting export prices that could possibly contain exports from China runs directly contrary to the regulatory requirement” that tier 2 prices represent prices “available to purchasers in the country in question.”
Commerce also chose to exclude domestic Brazilian prices because it claimed no information had been put on the record regarding transportation costs from manufacturers to Brazilian ports. But this wasn’t a good argument because the department touched on the same issue in their previous review, defending the use of the data against a challenge by petitioners.
And they argued that ITTO prices are better benchmarks because they separate out plywood grades.