Paper Plate Exporter Challenges Surrogate Financial Statement Pick in AD Investigation
The Commerce Department improperly used the financial statements of Indonesian producer PT Suparma to set the surrogate financial ratios in the antidumping duty investigation on paper plates from Vietnam, since Suparma doesn't make merchandise comparable to respondent Go-Pak Paper Products Vietnam, the respondent argued. Filing a motion for judgment at the Court of International Trade on Aug. 28, Go-Pak said Commerce also erred in using a simple average of the average unit values for two different Harmonized Tariff Schedule subheadings to value its paper input, since its input only falls under one of the subheadings (Go-Pak Paper Products Vietnam Co. v. United States, CIT # 25-00070).
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In the investigation, the agency used the financial statements from Suparma, which Go-Pak said is an "integrated producer of tissue paper and craft paper." The respondent urged Commerce to use the statements of Indonesian producer Alkindo, which makes paper bowls, paper cups, paper food boxes and other paper products, which Go-Pak said are comparable to its products.
Go-Pak said it submitted evidence to Commerce showing that, unlike itself, Suparma is an "integrated producer which uses paper pulp as its raw material to make paper." The respondent, meanwhile, buys finished paper as the input for producing its paper plates. Commerce "should utilize the data sourced from producers of identical or comparable merchandise in the surrogate country" when calculating financial ratios, the brief said.
"More importantly, Commerce has a preference to use financial statements from companies that are at a similar level of integration to the respondent in the proceeding," Go-Pak argued. By continuing to use the Suparma statement in the investigation, the agency "failed to address arguments and record evidence that Suparma was an integrated producer and not comparable to Go-Pak Vietnam," the respondent said.
Go-Pak also challenged Commerce's conclusion that Suparma makes "laminated paper for holding, placing, and wrapping food as does a paper bowl or paper plate," arguing that the finding isn't backed by sufficient evidence. The exhibits relied on by Commerce confirm that Suparma "is engaged in paper manufacturing, not packaging manufacturing." The exhibits "describe Suparma’s operations as producing finished paper in sheet or reel form and laminating paper," which are activities "that are part of paper production and do not create products comparable to paper plates."
In valuing Go-Pak's paper input, Commerce used a simple average of the average unit values for two different HTS subheadings, 4810.32.90 and 4810.92.90. The respondent said the HTS classifications for subheading 4810.32.90 are identical in both Vietnam and Indonesia and adequately cover Go-Pak's paper purchases. The subheading covers "multi-ply" paper or paperboard that's in rolls that are greater than 150 mm in width, the exporter said.
"Multiple record sources confirm that Go-Pak Vietnam’s paper input is multi-ply and in rolls greater than 150 mm," the brief said.
Meanwhile, the other subheading, 4810.32.90, covers paper bleached "uniformly throughout the mass and of which more than 95 percent by weight of the total fiber content consists of wood fibers obtained by a chemical process." The product specification information for Go-Pak's paper shows that it isn't "bleached uniformly throughout," since the company's paper is "multi-layer, so it cannot be uniformly bleached," the brief said.
The agency bucked its established practice and court precedent in using a simple average of the subheadings, since the one subheading adequately covers Go-Pak's paper input, the exporter argued.