Israel Says ITC Required to Review Post-POI Gaza War in Injury Analysis
The International Trade Commission "dodges" the substantive arguments made against its affirmative injury finding on Israeli brass rod and, instead, repeatedly asks the Court of International Trade to defer to its "flawed methodologies," the Israeli government's Ministry of Economy and Industry argued in a reply brief filed last week at the trade court (Government of Israel v. United States, CIT # 24-00197).
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The ministry further backed its arguments that the ITC unlawfully ignored evidence regarding the war in Gaza, which began shortly after the end of the period of investigation. The ministry argued the war "impacted the conditions of competition by affecting the operations of the only Israeli producer of subject merchandise and the condition of the domestic injury at the time of the Commission's determinations." In response, the ITC said it wasn't required to consider the post-investigation period events, among other things (see 2509090063).
In response, the ministry said the statute, 19 U.S.C. Section 1671d(b)(1)(A), requires the ITC to make a finding of "present material injury, which may require consideration of events after the end of the" investigation period. Citing the 2004 CIT decision Bratsk Aluminum Smelter v. U.S., the ministry said the statute doesn't direct the ITC to use a "specific period of time for its analysis," but, in making a "present material injury determination, the Commission must address record evidence of significant circumstances and events that occur between the petition date and vote date."
As a result, while the ITC isn't required to extend its analysis of data trends to periods outside the investigation period, it must address "significant circumstances and events that occur between the petition date and vote date," the ministry said. The ITC has "routinely incorporated Bratsk" in its injury determinations, "leaving no doubt that it must address" significant post-period developments, the brief said.
The ministry added that the issue was "front-and-center before the Commission" during the proceeding, since the interested parties "repeatedly raised the war in the context of present material injury during the hearing and briefing." The ITC "failed to grapple with" the war, requiring remand, the brief said.
The commission also failed to support its volume analysis, the ministry said. The reply highlighted three alleged flaws in the ITC's analysis: it didn't explain its basis for "treating subject imports from Israel" in this case "differently from previous, similar cases" involving goods from Israel; the ITC illegally interpreted the statute to find that "any increase in subject import volumes or market share is significant, regardless of how small"; and the commission violated the plain meaning of the statute by finding that "such a microscopic import volume increase and change in market share are 'significant.'"
The ministry said the ITC doesn't dispute that Israel's import volumes and increased volumes were small but rather, the commission merely repeated "the Commission's conclusions," thus waiving "its defense of these findings." The brief added that the ITC doesn't try to "draw a line below which subject import volumes are insignificant," but instead argues that the commission's volume finding was reasonable, since there's "no minimum threshold for import volumes to be found significant." The ITC added in its brief that "it considered the significance threshold for volume to be low based on the price sensitivity of the brass rod market and potential price effects of small volumes of brass rod."
This justification was illegally raised post hoc for the first time in the ITC's reply brief, the ministry argued. In any case, this position is "unworkable because it does not give meaning to the statutory term 'significant,' which is necessarily (and by definition) a relative term," the brief said. The ITC never explains how its findings "square with the plain language of the statute," leading the commission to undertake the "sort of standardless decision-making" that is the "very definition of arbitrary and capricious action."
The ministry also challenged the ITC's pricing analysis and negative impact finding, arguing that the ITC often failed to address the ministry's arguments. For instance, regarding the impact finding, the ministry accused the commission of merely repeating its conclusions on the domestic industry's supply constraints. In addition, regarding the domestic industry's performance trends, the ITC "failed to explain how the Commission's use of trends from 2020 to 2022 was appropriate to disaggregate the impact of supply constraints from the impact of subject imports from Israel," since the ministry previously explained "changes in market share over 2020-2022 reflect trends" that are entirely driven by the "supply constraints in 2021, before improving in 2022."
The commission "did nothing to refute Plaintiff's argument or explain how the Commission's approach was reasonable," the brief said.