ITC Provided 'Talismanic Justification' of Negative Injury Finding, Petitioner Says
The International Trade Commission provided "impermissible post hoc rationalizations" for its determination of a lack of adverse price effects on glass wine bottles from China, the U.S. Glass Producers Coalition argued in a Sept. 8 reply brief at the Court of International Trade. The coalition argued that the commission failed to "fully engage" with the petitioner's arguments regarding "contemporaneous business documentation and lost sales" and doubled down on its "illogical determinations as to price suppression and the effects of an inventory overhang in the market" (U.S. Glass Producers Coalition v. United States, CIT # 24-00199).
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The coalition also argued that the ITC failed to directly engage with its arguments regarding its adverse impact finding, and similarly failed to consider all record evidence before making a determination of "no threat of material injury."
During the injury proceeding, the ITC said the imports that gained market share during the latter part of the investigation period were from Mexico, "none of which were purchased at a lower cost during that period." In its opening brief, the coalition said these views were "factually incorrect" and "ignored that both Mexican and Chinese imports increased in market share over the" investigation period.
The ITC's response to this claim "provided an impermissible post hoc rationalization" in that the commission said it's "true statement that Mexican imports gained share does not equate to the false statement that Chinese imports did not," the coalition said. The commission said its focus on Mexican imports "simply reflected that it was reasonably focusing its market share shift on those gains by subject imports that accounted for most of the market share shift from the domestic industry."
The ITC's brief attempts to "rationalize its determination after it was made," the coalition said, adding that the argument is "illogical." If the ITC wanted to look at total market share shift, it doesn't "make sense that it only discussed the Mexican market share shift," the brief said. "Words are presumed to have meaning." The ITC is essentially claiming that when it said the subject imports that gained market share were from Mexico, "it really meant the subject imports that gained market share were from Mexico and China, but it was only focusing on Mexico because they were the largest source," the coalition said. "This does not pass muster."
Regarding price effects, the coalition argued that the ITC didn't provide a "reasoned analysis" as to data issues concerning certain pricing products. The commission told the trade court that the coalition failed to exhaust this argument before the ITC. In response, the petitioner said it's "astonishing that the Commission is raising an alleged exhaustion issue on an argument that Plaintiff made in virtually all of its submissions in the final phase of the Commission’s investigation."
The coalition added that the ITC "impermissibly failed to address the frequency of lost sales," characterizing the commission's approach as flawed for two reasons. The first reason is that the ITC misunderstands its own standard, since subject imports "need not be the sole cause of material injury to the domestic industry" but only "a cause of such injury." Second, the ITC falls back on its "presumption of consideration rather than providing the required analysis of the record evidence," the brief said.
The ITC's analysis of the "inventory overhang and its negative price effects" isn't supported, the petitioner added. The commission defended its analysis on this front by claiming that growing relative inventories overhanging the market didn't have price depressing effects due to decreasing demand, claiming that as the increase in this ratio reflects "decreasing shipments rather than increasing inventories, it does not reflect that subject inventories somehow increased."
The petitioner said this "defies economic principles and logic," adding that the "exact inverse is true: growing relative inventories in a time of decreasing demand would have more price depressing effects."
The coalition added that equally "as important as what the Commission’s brief says is what it does not say." For instance, the petitioner said a significant part of its opening brief looked at the way the ITC didn't correctly apply the causation standard. Instead of rebutting these arguments, "the Commission’s brief only states that it did apply the causation standard, simply because it cited that standard." Throughout its determination, the ITC failed to address material evidence and argument, making it the "definition" of "talismanic justification."