Domestic Pool Disinfectant Producer Says Products ‘Unusual or Unique,’ Need Different Surrogate Selection Method
Domestic chlorinated isocyanurates producer Bio-Lab argued in a July 15 motion for judgment that the Commerce Department should have used Mexico, not Romania, as the primary surrogate in an antidumping duty review of chlorinated isocyanurates from China (Bio-Lab v. United States, CIT # 25-00054).
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Bio-Lab said its products, used as swimming pool disinfectant, are “unusual or unique.” Usually, Commerce begins its multi-step surrogate selection analysis by first comparing the economic comparability of a proposed surrogate country with the country under review, then, second, determining whether that country is a significant producer of comparable merchandise, it said. But in some circumstances, it said, the department reverses the sequence -- particularly when its review involves a product that is “unusual or unique (with correspondingly unusual or unique inputs or other unique aspects of the cost of production).”
In the review being challenged, the department first considered whether Mexico and Romania were at comparable economic levels to China, finding the former wasn’t and the latter was. But chlorinated isocyanurates are unusual enough that Commerce first should have looked to which potential surrogates produce the most comparable merchandise, Bio-Lab said.
When Commerce was making its surrogate selection, the petitioner said it and other domestic producers “stressed” that chlorinated isocyanaurates were “an unusual specialty chemical product that derives key characteristics, functionality, and end use from cyanuric acid.” As a result, they said, “it was imperative that Commerce ‘identify a comparable product that not only includes chlorine as an input, but also includes cyanuric acid.’”
But the department didn’t consider whether the products are “unusual or unique,” Bio-Lab said.
It also noted that Commerce found that sodium hypochlorite was a product comparable to chlorinated isocyanaurates -- a finding it also made in a prior review and that the Court of International Trade recently remanded for lack of substantial evidence (see 2504150055).
In that opinion, CIT Judge Timothy Reif upheld the department’s usual sequential analysis that prioritizes surrogates with comparable economic levels to countries under review after interpreting AD review law under Loper Bright, partly because Commerce’s regulations let it flip its analysis for “unique or unusual merchandise.” He found in that case that Commerce reasonably refused to consider Mexico a potential surrogate candidate.
The petitioner argued that arriving at chlorinated isocyanaurate involves a significantly more complex production process than sodium hypochlorite, necessitating different equipment and more steps.