Printing Plate Business Says ITC Injury Finding Based on Own Domestic Facility Closure
Aluminum printing plate exporter Fujifilm Corp. said July 22 that the International Trade Commission had found its products caused domestic injury only by “finding that Fujifilm harmed itself” (Fujifilm North America Corp. v. U.S., CIT # 24-00251).
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The exporter, which previously manufactured its aluminum printing plate in the U.S. to process domestically into downstream products, said it closed its U.S. production facility “[i]n light of declining global and U.S. demand.” To supply its downstream production, it switched to using imports from its Japanese and Chinese facilities, it said. It noted it did this prior to the injury investigation’s period of review.
As a result, the only other domestic producer of printing plate, Eastman Kodak Company, experienced “increasing prices, improved profitability, and a larger share of the shrinking U.S. market” -- in other words, Fujifilm claimed, its prospects actually improved during the review period.
But the ITC counted Fujifilm’s former production facility in Greenwood, South Carolina, as part of the domestic industry in its investigation, Fujifilm said.
It said the ITC shouldn’t have done so based on the language in 19 U.S.C. 1677(4)(B), which says that the agency “may, in appropriate circumstances,” exclude domestic producers “related” to exporters from its calculations.
To determine when such producers are “related,” the ITC developed its “shielding test” under the Chevron doctrine, excluding only domestic producers shielded from import competition by their foreign affiliates. But Fujifilm argued that, under the Supreme Court's Loper Bright ruling, the Court of International Trade should interpret the statute more generously.
The language of the law didn’t support an interpretation that the ITC should be granted significant leeway, it said. It argued that, first, the phrase “appropriate circumstances” in the law limits the ITC’s discretion by providing that the agency “may” wield its discretion only in “appropriate circumstances.” Second, it said, the law defines “related parties” broadly, including “both direct and indirect control” of one by the other.
It also said that the context and legislative history of 1677(4)(B) showed it was “fundamentally concerned with the possible distortions of including related parties.” And it said the reasons the majority of commissioners did include the Greenwood operation in their domestic industry definition “do not withstand serious scrutiny,” making several factual errors and omissions.
Due to the particular facts of the situation, the ITC also shouldn’t have found that the increase in aluminum printing plates imports into the U.S. was “significant,” the exporter argued. It said the determination’s volume analysis failed to address the competition conditions during the review period. The analysis likewise didn’t consider whether the additional imports were actually different product sizes or kinds not produced by Kodak, it said.
Fujifilm further took aim at the ITC’s finding that the imports had adverse price effects on the domestic industry as both a misinterpretation of statute and lacking substantial evidence. It said the law requires the ITC to consider whether imports either depressed or suppressed prices “to a significant degree.” But the majority didn’t make express findings on either point, nor on whether the exporter was underselling, Fujifilm said. Further, it said, the commission was required to square the three when they conflicted, it said.
After all, if Fujifilm was underselling, “[w]hy was such underselling not having any discernible effect on domestic prices?” it asked.
In most cases, the ITC will find that underselling results in price depression or suppression, but in this case, it stopped after finding underselling, the exporter said. Instead of ruling on whether there was price depression or suppression, the agency took a “novel approach,” basing its finding of adverse price effects on the increased market share captured by imports, Fujifilm claimed.
But market share isn’t the same thing as prices, it said. Imports’ volume impacts, it said, are considered by a different part of the law, meaning the majority had essentially duplicated its volume finding for its adverse price impact finding.
The commission’s price analysis was also based on inaccurate “subsidiary factual conclusions,” the exporter claimed, such as the majority’s claims that price was one of the most important factors, among others, in the purchasing decisions of domestic producers’ customers and that the domestic product and imports were substitutable to “a moderate-to-high degree.”
Overall, it said, the majority’s finding “confuse[d] the cause and the effect” -- failing to realize that any negative trends in the domestic industry were caused not by Fujifilm’s imports, but by Fujifilm's decision to close its Greenwood factory. That decision, it said, also caused the increase in imports.