Commerce Asks for Alternatives to 'd' Test to Identify Masked Dumping After CAFC Rebuke
The Commerce Department is asking for public comments on how it can identify "masked" dumping in light of the U.S. Court of Appeals for the Federal Circuit's ruling in Marmen v. U.S., which rejected the agency's use of the Cohen's d test. Commerce's International Trade Administration said parties should submit comments by May 30 regarding "alternatives to the use of the Cohen’s d test to define when prices differ significantly among purchasers, regions, and time periods."
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The Cohen's d test is the first step in Commerce's differential pricing analysis and is used to measure whether a respondent's U.S. prices to a given "purchaser, region, or time period" significantly differ from the prices for all other groups. If the Cohen's d value is equal to or greater than 0.8 for any test group, the sales "pass" the test, meaning the sales are significantly different from the other groups. From there, Commerce uses the results of the test as an input in a ratio test to find the proportion of the respondent's U.S. sales that pass the test to see if a pattern exists.
If a pattern does exist, Commerce calculates the company's dumping margin by comparing its average home market sales price with an individual transaction in the U.S.
Last month, the Federal Circuit rejected the agency's use of the test, since the agency wasn't adhering to three key statistical assumptions when it used the test. Namely, the data wasn't normally distributed, didn't include roughly equal variances nor consisted of enough data points (see 2504220030).
The court said that, going forward, Commerce can undertake a new differential pricing analysis using a "statistical analysis that uses some of the ideas underlying Cohen’s analysis of group differences as long as the resulting analysis is itself justified as sound for gauging differences in the data sets at issue."
In its request for comments, Commerce said it's "considering possible alternatives to the current approach for conducting analysis" under the statute "with respect to identifying when prices differ significantly among purchasers, regions, or periods of time." Public comments should provide "information on potential alternative approaches for analyzing a respondent’s U.S. prices" to see if masked dumping is occurring, the agency said.