GPX International Tire Corp. v. United States

United States Court of Appeals
for the Federal Circuit
__________________________

GPX INTERNATIONAL TIRE CORPORATION
AND HEBEI STARBRIGHT TIRE CO., LTD.,
Plaintiffs-Appellees,
and
TIANJIN UNITED TIRE & RUBBER
INTERNATIONAL CO., LTD.,
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant-Appellant,
and
TITAN TIRE CORPORATION AND UNITED STEEL,
PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED
INTERNATIONAL AND SERVICE WORKERS
INTERNATIONAL UNION, AFL-CIO-CLC,
Defendants-Appellants,
and
BRIDGESTONE AMERICAS, INC. AND
BRIDGESTONE AMERICAS TIRE OPERATIONS,
LLC,
Defendants-Appellants.
__________________________

2011-1107, -1108, -1109
__________________________
GPX INTL TIRE CORP v. US 2

Appeals from the United States Court of International
Trade in consolidated case no. 08-CV-0285, Judge Jane A.
Restani.
___________________________

Decided: December 19, 2011
___________________________

JAMES P. DURLING, Winston & Strawn, LLP, of Wash-
ington, DC, argued for all plaintiffs-appellees. With him
on the brief for GPX International Tire Corporation, et al.
were WILLIAM H. BARRINGER, DANIEL L. PORTER, GENE C.
SCHAERR and MATTHEW P. MCCULLOUGH.

FRANKLIN E. WHITE, JR., Assistant Director, Commer-
cial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for
defendant-appellant United States. With him on the brief
were TONY WEST, Assistant Attorney General, JEANNE E.
DAVIDSON, Director, and MICHAEL D. PANZERA, Attorney.
Of counsel on the brief was JOHN D. MCINERNEY, Chief
Counsel, Office of the Chief Counsel for Import Admini-
stration, United States Department of Commerce, of
Washington, DC.

TERENCE P. STEWART, Stewart and Stewart, of Wash-
ington, DC, argued for defendants-appellants Titan Tire
Corporation, et al. With him on the brief were WESLEY K.
CAINE and ELIZABETH J. DRAKE.

FRANCIS J. SAILER, Grunfeld, Desiderio, Lebowitz,
Silverman & Klestadt, LLP, of Washington, DC, for
plaintiff-appellee Tianjin United Tire & Rubber Interna-
tional Co., LTD. With him on the brief was ANDREW T.
SCHUTZ. Of counsel was MARK E. PARDO.
3 GPX INTL TIRE CORP v. US

JOSEPH W. DORN, King & Spalding LLP, of Washing-
ton, DC, for defendants-appellants Bridgestone Americas,
Inc., et al. With him on the brief were JEFFREY M. TELEP
and P. LEE SMITH, JR. Of counsel were CHRISTOPHER T.
CLOUTIER, ASHLEY C. PARRISH and J. MICHAEL TAYLOR.

ROGER B. SCHAGRIN, Schagrin Associates, of Washing-
ton, DC, for amicus curiae Committee on Pipe and Tube
Imports. With him on the brief was JOHN W. BOHN.

JEFFREY D. GERRISH, Skadden, Arps, Slate, Meagher
& Flom, LLP, for amicus curiae United States Steel
Corporation. With him on the brief were ROBERT E.
LIGHTHIZER, JAMES C. HECHT and STEPHEN J. NARKIN.

KATHLEEN W. CANNON, Kelley Drye & Warren LLP, of
Washington, DC, for amici curiae ArcelorMittal USA
LLC, et al. With her on the brief were PAUL C.
ROSENTHAL and GRACE W. KIM.

ALAN H. PRICE, Wiley Rein LLP, of Washington, DC,
for amici curiae The Committee to Support U.S. Trade
Laws, et al. With him on the brief were TIMOTHY C.
BRIGHTBILL and ROBERT E. DEFRANCESCO.

DONALD B. CAMERON, Troutman Sanders LLP, of
Washington, DC, for amicus curiae Ministry of Com-
merce, People’s Republic of China. With him on the brief
were JULIE C. MENDOZA, R. WILL PLANERT, BRADY W.
MILLS and MARY S. HODGINS.
__________________________

Before RADER, Chief Judge, LINN and DYK, Circuit
Judges.
GPX INTL TIRE CORP v. US 4

DYK, Circuit Judge.
In this consolidated countervailing duty case, the U.S.
Court of International Trade (“Trade Court”) ordered the
U.S. Department of Commerce (“Commerce”) not to
impose countervailing duties on goods from China, a non-
market economy (“NME”) country. See GPX Int’l Tire
Corp. v. United States (“GPX III”), No. 08-00285, 2010 WL
3835022 (Ct. Int’l Trade Oct. 1, 2010). The Trade Court
held that Commerce’s 2007 interpretation of countervail-
ing duty law as permitting the imposition of such duties
was “unreasonable” because of the high likelihood of
“double counting” when both countervailing duties and
antidumping duties are assessed against goods from NME
countries. GPX Int’l Tire Corp. v. United States (“GPX I”),
645 F. Supp. 2d 1231, 1240 (Ct. Int’l Trade 2009). We
affirm, but on a different ground: we find that when
amending and reenacting countervailing duty law in 1988
and 1994, Congress legislatively ratified earlier consistent
administrative and judicial interpretations that govern-
ment payments cannot be characterized as “subsidies” in
a non-market economy context, and thus that countervail-
ing duty law does not apply to NME countries.
BACKGROUND
I
The Tariff Act of 1930, as amended, provides for two
types of duties on imports that injure domestic industries:
First, Congress has imposed antidumping duties on goods
“sold in the United States at less than . . . fair value.” 19
U.S.C. § 1673 (2006). Second, countervailing duties are
imposed on goods that receive “a countervailable subsidy”
from a foreign government. Id. § 1671(a). Antidumping
duties are thus directed to the exporter, while counter-
vailing duties remedy government conduct. This case
involves an alleged “domestic subsidy,” where the subsidy
5 GPX INTL TIRE CORP v. US

benefits both domestic and exported goods, as opposed to
an “export subsidy,” which benefits only exports. See id.
§ 1677(5A). In the case of goods exported from market
economy countries (non-NME countries), both antidump-
ing and countervailing duties may be imposed. The
question here is whether both duties may be imposed on
goods from NME countries.
While the countervailing duty law makes no refer-
ences to NMEs, the antidumping law deals directly with
the problem of exports from NME countries. For goods
exported by a typical market economy country, the anti-
dumping duty equals the goods’ price in the United States
(the “export price” or “constructed export price”) minus
their price in the exporting country (the “normal value”).
See id. §§ 1673, 1677a-1677b. In a “nonmarket economy
country,” however, local prices cannot be used to calculate
the normal value because, by definition, “sales of mer-
chandise in such country do not reflect the fair value of
the merchandise.” Id. § 1677(18)(A). Instead, Commerce
may estimate the normal value based on data from “ap-
propriate” market economy countries. 1 Id. § 1677b(c).
Because normal values calculated from surrogate
countries do not reflect domestic subsidies, the result
potentially is that the normal value calculation may be
higher than the actual sale price in the NME country. On
the other side of the equation, export price is generally
unaffected by the fact that an NME country is involved.
While the statute provides that countervailing duties
imposed on exported goods shall be added to the export
price, domestic subsidies do not affect the calculation of

1 This approach was first used in the Trade Act of
1974, Pub. L. No. 93-618, § 321(d), 88 Stat. 1978, 2046-47
(1975), which allowed Commerce to use the price of simi-
lar goods in a “non-state-controlled-economy country.”
GPX INTL TIRE CORP v. US 6

export price. 2 The overall result is arguably the imposi-
tion of a higher dumping margin for NME countries as
the result of failure to take account of domestic subsidies.
It is urged that if countervailing duties are also imposed
for NME countries, the subsidy would be double counted.
II
As discussed in greater detail below, Commerce ap-
parently first considered whether to impose countervail-
ing duties on goods from NME countries in 1983. In 1983,
Georgetown Steel Corp. and other American manufactur-
ers petitioned Commerce to impose countervailing duties
on imports from an NME (Czechoslovakia), and in 1984,
Commerce determined that countervailing duty law did
not apply to NMEs. Carbon Steel Wire Rod from Czecho-
slovakia: Final Negative Countervailing Duty Determina-
tion (“Wire Rod”), 49 Fed. Reg. 19,370, 19,370-19,371,
19,374 (May 7, 1984). The American manufacturers
appealed and succeeded in the Trade Court. Cont’l Steel
Corp. v. United States, 614 F. Supp. 548 (Ct. Int’l Tr.
1985). Commerce appealed to our court, arguing that a
subsidy is “a device used by governments to distort the
signals that the market gives to firms,” and that by defi-
nition, subsidies do not exist in NMEs. Brief for Appel-
lant at 25, Georgetown Steel Corp. v. United States, 801
F.2d 1308 (Fed. Cir. 1986) (No. 85-2805) (“Georgetown
Steel Brief”). This court ultimately reinstated Com-

2 If Commerce imposes both countervailing duties
to remedy an export subsidy and antidumping duties, the
export price used to calculate the antidumping duty must
be “increased [and the dumping margin decreased] by . . .
the amount of any countervailing duty imposed . . . to
offset an export subsidy.” Id. § 1677a(c)(1). This adjust-
ment is not made for countervailing duties based on
domestic subsidies presumably because these subsidies
are already reflected in the normal value.
7 GPX INTL TIRE CORP v. US

merce’s decision in Georgetown Steel Corp. v. United
States, 801 F.2d at 1309.
Commerce continued to maintain that countervailing
duty law did not apply in a non-market context until
2007, when it issued a memorandum stating that it could
apply countervailing duties to merchandise from China,
an NME country. 3 See Countervailing Duty Investigation
of Coated Free Sheet Paper from the People’s Republic of
China – Whether the Analytical Elements of the George-
town Steel Opinion Are Applicable to China’s Present-Day
Economy (Mar. 29, 2007), available at http://ia.ita.doc.gov
/download/nme-sep-rates/prc-cfsp/china-cfs-georgetown-
applicability.pdf (“Georgetown Steel Memo”). The George-
town Steel Memo did not address the statutory text or
legislative history of countervailing duty law; rather, it
examined the details of China’s economy and determined
that while China “remains an NME for purposes of the
U.S. antidumping law,” it was “significantly different
from the Soviet-style economies at issue in Georgetown
Steel,” and that these differences enabled Commerce to

3 In 1992, Commerce developed “criteria for deter-
mining whether a market-oriented industry exists in an
economy which will otherwise be considered nonmarket,”
in which case market-based antidumping and countervail-
ing duty law could both apply within an NME. Prelimi-
nary Determination of Sales at Less Than Fair Value:
Sulfanilic Acid from the People’s Republic of China, 57
Fed. Reg. 9409, 9411 (Mar. 18, 1992). However, Com-
merce has never found an industry to be “market-
oriented,” and has thus never applied this exception. See,
e.g., Final Negative Countervailing Duty Determinations:
Oscillating and Ceiling Fans from the People’s Republic of
China, 57 Fed. Reg. 24,018, 24,019 (June 5, 1992) (“[W]e
have determined that the PRC fans industry is not an
MOI [market-oriented industry]. As a result, we deter-
mine that the [countervailing duty] law cannot be applied
. . . .”).
GPX INTL TIRE CORP v. US 8

calculate whether the government subsidized specific
goods. Id. at 2, 4, 10.
After Commerce issued the Georgetown Steel Memo,
in June 2007 U.S. tire manufacturer Titan Tire Co. peti-
tioned that Commerce impose both antidumping duties
and countervailing duties on certain Chinese tires, includ-
ing those manufactured by Hebei Starbright Tire Co.
(owned by GPX International Tire Corp.) and Tianjin
United Tire & Rubber International Co. (“TUTRIC”). See
GPX I, 645 F. Supp. 2d at 1235-36. In 2008, Commerce
issued both its order imposing countervailing duties, see
Certain New Pneumatic Off-the-Road Tires from the
People’s Republic of China: Countervailing Duty Order,
73 Fed. Reg. 51,627 (Sept. 4, 2008), and its order imposing
antidumping duties, see Certain New Pneumatic Off-the-
Road Tires from the People’s Republic of China: Notice of
Amended Final Affirmative Determination of Sales at
Less Than Fair Value and Antidumping Duty Order, 73
Fed. Reg. 51,624 (Sept. 4, 2008). Seven complaints were
filed to contest Commerce’s antidumping and countervail-
ing duty determinations, which were consolidated by the
Trade Court. See GPX I, 645 F. Supp. 2d at 1236.
In GPX I, the Trade Court found that it could not “say
from the statutory language alone that Commerce does
not have the authority to impose [countervailing duties]
on products from an NME-designated country,” but that
“Commerce’s interpretation of the NME [antidumping
duty] statute in relation to the [countervailing duty]
statute . . . [was] unreasonable.” Id. at 1239-40. Because
“the NME [antidumping] statute was designed to account
for government intervention in an NME country’s econ-
omy, including resulting price distortion,” the court found
that imposing both antidumping duties and countervail-
ing duties “could very well result in a double remedy.” Id.
at 1239, 1242. This double counting could occur when
9 GPX INTL TIRE CORP v. US

Commerce imposed countervailing duties to offset a
domestic subsidy but then calculated antidumping duties
by comparing the subsidized export price with a subsidy-
free normal value based on estimates from surrogate
countries. See id. at 1241. 4 Commerce disputed that
domestic subsidies had a significant effect on export
prices, but the Trade Court found it unreasonable for
Commerce to put the burden to demonstrate double
counting on foreign manufacturers. See id. at 1242-43.
The court remanded with instructions for Commerce “to
forego the imposition of [countervailing duties] on the
merchandise at issue or . . . to adopt additional policies
and procedures to . . . account for the imposition of [coun-
tervailing duty] remedies.” Id. at 1251. 5
On remand, Commerce decided to offset the counter-
vailing duties against the antidumping duties on the
same merchandise to avoid this double counting problem.
See GPX Int’l Tire Corp. v. United States (“GPX II”), 715
F. Supp. 2d 1337, 1343 (Ct. Int’l Trade 2010). The Trade
Court found this approach unreasonable, both because it
rendered the countervailing duty investigation “unneces-
sary because the same remedial price adjustment can

4 In GPX Int’l Tire Corp. v. United States (“GPX
II”), the Trade Court explained that “any resulting NME
[antidumping] margin in theory also captures the com-
petitive advantage that subsidies may provide because
the constructed [normal value] is subsidy-free, and pre-
sumably higher than a subsidized [normal value], while
the U.S. price presumably reflects in some way the price-
lowering benefits of the subsidies.” 715 F. Supp. 2d 1337,
1344 (Ct. Int’l Trade 2010).
5 In GPX I, the Trade Court also held that if Com-
merce applied countervailing duty law to China, it could
not use a bright-line cut-off date. 715 F. Supp. at 1250.
In view of our decision that the countervailing duty law
does not apply to NME countries, we do not reach this
question.
GPX INTL TIRE CORP v. US 10

otherwise be obtained by merely conducting an NME
[antidumping] investigation” and because the offset is
“inconsistent with 19 U.S.C. § 1677a, which lists the
specific offsets to export price and constructed export
price that are permissible,” and which does not list offsets
for countervailing duties based on domestic subsidies. Id.
at 1345. In summary, the court held “that the offset does
not comply with the statute and is also unreasonable due
to the expense associated with conducting an additional
investigation that is essentially useless.” Id. The court
again remanded to Commerce with instructions to not
impose countervailing duties. Id. at 1354. In response to
the court’s direction, Commerce declined to impose coun-
tervailing duties under protest, and the Trade Court
entered judgment sustaining this determination. GPX
III, 2010 WL 3835022, at *1.
The United States and the U.S. manufacturers favor-
ing the imposition of countervailing duties timely ap-
pealed to this court. We have jurisdiction under 28 U.S.C.
§ 1295(a)(5).
DISCUSSION
I
The interpretation of the countervailing duty statutes
is a question of law, which we review de novo. See
Brother Int’l Corp. v. United States, 464 F.3d 1319, 1324
(Fed. Cir. 2006). However, if after applying the tradi-
tional tools of statutory construction, the statute is am-
biguous, “statutory interpretations articulated by
Commerce during its adjudicatory proceedings are enti-
tled to Chevron deference.” Magnolia Metallurgy, Inc. v.
United States, 508 F.3d 1349, 1355 (Fed. Cir. 2007); see
Pesquera Mares Australes Ltda. v. United States, 266 F.3d
1372, 1379 (Fed. Cir. 2001).
11 GPX INTL TIRE CORP v. US

The Trade Court’s decision barred the imposition of
countervailing duties because of the “substantial potential
for double counting” if countervailing duties and anti-
dumping duties were both applied to imports from NMEs.
GPX II, 715 F. Supp. 2d at 1345 (citing GPX I, 645 F.
Supp. 2d at 1243). This reasoning is problematic both
because the extent to which the statute may prohibit
double counting is unclear, 6 and because Commerce has
determined that it is far from clear that double counting
has in fact occurred. We nonetheless conclude that Com-
merce is barred by the statute from imposing countervail-
ing duties on NME goods. As explained below, the
legislative history of the countervailing duty law, and
particularly Congress’s repeated reenactment of counter-
vailing duty law while approving the Georgetown Steel
holding, demonstrates that Congress adopted Commerce’s
then-prevailing position that countervailing duties cannot
be imposed on NME exports.
II
Commerce’s primary argument is that the plain statu-
tory language mandating that a countervailing duty
“shall be imposed” requires it to impose countervailing
duties when it is able to identify a subsidy, even in an
NME country. See Commerce Br. 19-23; Commerce Reply
Br. 2. We disagree. The text of the relevant statute
states that if “the administering authority determines
that the government of a country . . . is providing, directly
or indirectly, a countervailable subsidy,” and if the domes-
tic injury requirement is met, “then there shall be im-

6 See generally Wheatland Tube Co. v. United
States, 495 F.3d 1355 (Fed. Cir. 2007) (sustaining Com-
merce’s decision to avoid double counting by not deducting
“safeguard duties” from the export price used to calculate
antidumping duties).
GPX INTL TIRE CORP v. US 12

posed upon such merchandise a countervailing duty, in
addition to any other duty imposed, equal to the amount
of the net countervailable subsidy.” 19 U.S.C. § 1671.
Contrary to Commerce’s argument we do not find the
statute to be clear on its face. The statute does not explic-
itly require the imposition of countervailing duties on
goods from NME countries. The question is whether
government payments in an NME economy constitute
“countervailable subsidies” within the meaning of the
statute. We have indeed previously held that the statute
does not compel the imposition of countervailing duties to
goods from NME countries because the government
payments with respect to such goods are not “bounties or
grants,” or “countervailable subsidies” in the current
terminology. 7 Georgetown Steel, 801 F.2d at 1314.
Section 303 of the Tariff Act of 1930, the predecessor
to the current countervailing duty law, stated that “when-
ever any country . . . shall pay or bestow, directly or
indirectly, any bounty or grant,” then “there shall be
levied . . . in addition to any duties otherwise imposed, a
duty equal to the net amount of such bounty or grant.” 19
U.S.C. § 1303 (1988) (repealed 1994). In Georgetown Steel
we found that the “economic incentives and benefits”
provided by governments in NME countries “do not con-
stitute bounties or grants under section 303,” 801 F.2d at
1314, that is, “countervailable subsidies” in the language
of the current statute. Georgetown Steel found “no indica-
tion . . . that Congress intended” this law to apply to NME
exports, noting that the purpose of countervailing duty

7 We also fail to see how section 1677a(c)(1), which
requires the export price to be increased by “the amount
of any countervailing duty imposed on the subject mer-
chandise . . . to offset an export subsidy,” suggests that
government payments must be treated as countervailable
subsidies in NME countries.
13 GPX INTL TIRE CORP v. US

law is “to offset the unfair competitive advantage that
foreign producers would otherwise enjoy from export
subsidies,” and that “[i]n exports from a nonmarket
economy . . . this kind of ‘unfair’ competition cannot exist.”
801 F.2d at 1315-16 (quoting Zenith Radio Corp. v. United
States, 437 U.S. 443, 456 (1978)). We stated that “[e]ven
if one were to label the[] incentives [provided by NMEs to
exporting entities] as a ‘subsidy,’ . . . the governments of
those nonmarket economies would in effect be subsidizing
themselves.” Id. at 1316. We thus upheld Commerce’s
decision not to impose countervailing duties on goods from
NME countries.
The “bounty or grant” language of Section 303 in-
volved in Georgetown Steel was replaced by the current
“countervailable subsidy” language in the Uruguay Round
Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809
(1994) (“URAA”), but Congress made clear that this
change was not intended to substantively affect the
countervailing duty law. 8 The URAA Statement of Ad-
ministrative Action (“SAA”), which “shall be regarded as
an authoritative expression by the United States concern-
ing the interpretation and application of the [URAA],” 19
U.S.C. § 3512(d), stated that “the definition of ‘subsidy’
will have the same meaning that administrative practice
and courts have ascribed to the term ‘bounty or grant’ and
‘subsidy’ under prior versions of the statute” and that
“practices countervailable under the current law will be

8 The current countervailing duty statute, 19 U.S.C.
§ 1671, was first enacted in 1979 but applied only to
countries under the Agreement on Subsidies and Coun-
tervailing Measures. The 1994 amendments made the
provision generally applicable. From the beginning,
Congress stated that “‘subsidy’ has the same meaning as
the term ‘bounty or grant’ as that term is used in section
303 of this Act.” Trade Agreements Act of 1979, Pub L.
No. 96-39, § 101, 93 Stat. 144, 177.
GPX INTL TIRE CORP v. US 14

countervailable under the revised statute,” H.R. Doc. No.
103-316, at 925 (1994). Thus, Georgetown Steel is equally
applicable to the revised statute. 9
We would normally be obligated to follow Georgetown
Steel in interpreting the revised statute. However, the
government argues that Georgetown Steel did not inde-
pendently interpret the statute, but rather afforded
Chevron deference to Commerce’s interpretation of what
the court found to be an ambiguous statute. It urges that
once Commerce changes its interpretation, the court is
required to defer to the new interpretation. See Nat’l
Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545
U.S. 967, 982 (2005) (“A court’s prior judicial construction
of a statute trumps an agency construction otherwise
entitled to Chevron deference only if the prior court
decision holds that its construction follows from the
unambiguous terms of the statute and thus leaves no
room for agency discretion.”). While Georgetown Steel
could perhaps be interpreted as resting on Chevron, the
problem is that, even if Commerce were correct about
Georgetown Steel, Congress thereafter ratified the prevail-
ing interpretation by amending and reenacting the coun-
tervailing duty statute in 1988 and 1994, thereby
requiring that we construe the statute as barring coun-
tervailing duties in the NME context.
III
The principle of legislative ratification is well estab-
lished. In the case of a widely known judicial decision or

9 While the SAA included the qualifier “unless that
practice or interpretation is inconsistent with the defini-
tion contained in the bill,” id., the new statute’s elaborate
definition of “countervailable subsidy,” 19 U.S.C.
§ 1677(5), did not extend the definition to government
payments in non-market economy countries.
15 GPX INTL TIRE CORP v. US

agency practice, “Congress is presumed to be aware of an
administrative or judicial interpretation of a statute and
to adopt that interpretation when it re-enacts a statute
without change.” Lorillard v. Pons, 434 U.S. 575, 580
(1978); see, e.g., Forest Grove Sch. Dist. v. T.A., 129 S. Ct.
2484, 2491-92 (2009); Faragher v. City of Boca Raton, 524
U.S. 775, 792 (1998). Even where the legislative history
does not explicitly reference a prior interpretation, the
Supreme Court has often found that Congress has ratified
lower court and agency interpretations through statutory
reenactment. See, e.g., Jerman v. Carlisle, McNellie, Rini,
Kramer & Ulrich LPA, 130 S. Ct. 1605, 1616 (2010);
Commodity Futures Trading Comm’n v. Schor, 478 U.S.
833, 846 (1986); Herman & MacLean v. Huddleston, 459
U.S. 375, 384-86 (1983); Merrill Lynch, Pierce, Fenner &
Smith, Inc. v. Curran, 456 U.S. 353, 379-382 (1982).
There is a stronger presumption of ratification where
“the legislative history . . . demonstrates that Congress
was indeed well aware of [the prior interpretation].”
Lindahl v. OPM, 470 U.S. 768, 782 (1984). The issue in
Lindahl was whether a statute barred judicial review of
certain Merit Systems Protection Board judgments, and
the Supreme Court noted that the legislative history of a
1980 amendment to the statute specifically referred to the
so-called Scroggins standard, which allowed a limited
review. Id. at 771, 782-83 (citing Scroggins v. United
States, 397 F.2d 295 (Ct. Cl. 1968)). The Court stated
that “[i]f Congress had intended by the 1980 amendment
. . . to abolish the [Scroggins] standard . . . there would
presumably be some indication in the legislative history
to this effect.” Id. at 787. Similarly, in Disabled Ameri-
can Veterans v. Secretary of Veterans Affairs, 419 F.3d
1317, 1322-23 (Fed. Cir. 2005), we held that a Senate
Report’s reference to a Board of Veterans’ Appeals prac-
GPX INTL TIRE CORP v. US 16

tice during enactment of the relevant statute indicated an
“implied adoption” of the agency practice.
Once Congress has ratified a statutory interpretation
through reenactment, agencies no longer have discretion
to change this interpretation. For example, in FDA v.
Brown & Williamson Tobacco Corp., 529 U.S. 120, 126-27
(2000), the FDA went through notice-and-comment rule-
making to conclude that it had jurisdiction to regulate
cigarettes under the Food, Drug, and Cosmetic Act
(“FDCA”), contrary to its longstanding position. The
Supreme Court held that Congress had ratified the FDA’s
prior position that it lacked jurisdiction, and thus that the
FDA could not change its interpretation. The Court noted
that, in adopting legislation addressing tobacco use over
the previous decades,
Congress has acted against the backdrop of the
FDA’s consistent and repeated statements that it
lacked authority under the FDCA to regulate to-
bacco . . . . In fact, . . . Congress considered and re-
jected bills that would have granted the FDA such
jurisdiction. Under these circumstances, it is evi-
dent that Congress’ tobacco-specific statutes have
effectively ratified the FDA’s long-held position
that it lacks jurisdiction under the FDCA to regu-
late tobacco products.
Id. at 144. In finding legislative ratification, the Court
emphasized Congress’s specific awareness of the FDA’s
position, as evidenced by the FDA testifying to its lack of
jurisdiction during congressional hearings, and Congress’s
rejection of proposals that would have given it this au-
thority. Id. at 145-55. Similarly, in Commissioner v.
Engle, 464 U.S. 206, 224-25 (1984), the Court did not
permit the Commissioner to choose “among reasonable
interpretations” of the Internal Revenue Code because in
17 GPX INTL TIRE CORP v. US

that case, Congress had adopted prior judicial interpreta-
tions when reenacting the Code.
In the present context, even before the 1988 legisla-
tion, there was a significant argument for legislative
ratification. As discussed above, Commerce first consid-
ered imposing countervailing duties on NME imports in
1983, when a countervailing duty subsidy was called a
“bounty or grant,” 19 U.S.C. § 1303 (1988) (repealed
1994). In 1984, Commerce determined that “a ‘bounty or
grant,’ within the meaning of the countervailing duty law,
cannot be found in an NME” because “the notion of a
subsidy is, by definition, a market phenomenon.” Wire
Rod, 49 Fed. Reg. at 19,372, 19,374.
Commerce described this decision to Congress in a
1984 hearing on trade remedies, noting that “[i]n final
decisions in Czech and Polish wire rod cases last week, we
concluded that bounties or grants within the meaning of
the countervailing duty law cannot be applied to NME’s.”
Nonmarket Economy Imports Legislation: Hearing Before
the Subcomm. on Int’l Trade of the Comm. on Fin., 98th
Cong. 5 (May 7, 1984) (statement of Lionel H. Olmer,
Undersecretary for Int’l Trade, Dep’t of Commerce).
Congress enacted other changes to the trade laws in the
Trade and Tariff Act of 1984, Pub. L. No. 98-573, 98 Stat.
2948, but rejected provisions that would have affected
trade remedies on NME imports, 130 Cong. Rec. 30,453
(1984). 10 In explaining the “[p]resent law” on NME
imports, the conference noted that “the Department of
Commerce has determined that the countervailing duty

10The 1984 Hearing was on S. 1351, 98th Cong., 129
Cong. Rec. 13,492 (1983), which was incorporated into the
Senate’s version of the Trade and Tariff Act of 1984 but
was eliminated by the conference committee. The pro-
posal would have created an alternative trade remedy for
imports from NME countries.
GPX INTL TIRE CORP v. US 18

laws cannot be applied to nonmarket economy imports”
and that “[t]his decision is pending judicial resolution,”
referring to the then-pending Georgetown Steel case. Id.
Congress was thus well aware of Commerce’s interpreta-
tion that countervailing duties could not be imposed on
NME imports, and when reenacting the trade law, it
rejected amendments designed to alter that approach.
Commerce itself argued in its Georgetown Steel brief
that the 1984 legislative history demonstrated “congres-
sional ratification of and acquiescence in [Commerce]’s
interpretation.” Georgetown Steel Brief at 50. Describing
the congressional events of 1984, Commerce urged that it
was “clear that Congress considered [Commerce]’s con-
struction of the [countervailing duty] law, but took no
steps to revise or repeal it,” and argued that this “con-
gressional acquiescence is persuasive evidence that the
construction is the one intended by Congress.” Id. at 51.
While our decision in Georgetown Steel did not explicitly
adopt Commerce’s ratification argument, we relied on the
fact that “recent actions of Congress in dealing with the
problem of exports by nonmarket economies” showed “no
indication in any of those statutes, or their legislative
history, that Congress intended or understood that the
countervailing duty law would apply.” 801 F.2d at 1316.
Whether or not Congress’s actions in 1984 amounted
to legislative ratification, as Commerce argued in George-
town Steel, its actions in 1988 and 1994 clearly did. In
1988, Congress passed the Omnibus Trade and Competi-
tiveness Act of 1988, H.R. 3, 100th Cong. Although this
act was vetoed, the legislative history is relevant because
it was explicitly incorporated into the revised trade bill
that was then enacted, as discussed below. Section 157 of
the H.R. 3 House bill had attempted to supersede George-
town Steel by adopting a provision that the countervailing
duty laws “apply with respect to any non-market economy
19 GPX INTL TIRE CORP v. US

country . . . to the extent that the administering authority
can reasonably identify, and determine the amount of, a
subsidy provided by that country.” H.R. 3, 100th Cong.,
§ 157, 133 Cong. Rec. 10,722 (1987) (as passed by House).
This provision was proposed in direct response to George-
town Steel, as indicated by the House Committee Report:
In a recent court case . . . the Federal Circuit up-
held the Department of Commerce’s refusal to ap-
ply the countervailing duty law in two
investigations of carbon steel wire rod imports
from Poland and Czechoslovakia, by holding that
the countervailing duty law does not apply to non-
market economy countries. Georgetown Steel
Corp. v. United States, 801 F.2d 1308 (Fed. Cir.
1986).
Section 157 of H.R. 3 . . . provide[s] for the ap-
plication of the countervailing duty law to non-
market economy countries to the extent that a sub-
sidy can reasonably be identified and measured . .
..
The Committee is aware of . . . [the] difficul-
ties of applying the countervailing duty law,
which is generally based on market-oriented prin-
ciples, to countries whose economies are generally
not market-oriented. Nevertheless, it is not the
intent of the Committee to allow for non-market
economy countries to be completely exempt from
the countervailing duty law under all circum-
stances.
H.R. Rep. No. 100-40, at 138 (1987). This provision would
have given Commerce the very authority it now claims:
the ability to impose countervailing duties on NME im-
ports where the existence and amount of a subsidy can be
reasonably identified. But section 157 was rejected by the
GPX INTL TIRE CORP v. US 20

conference committee. See H.R. Rep. No. 100-576, at 628
(1988) (Conf. Rep.), reprinted in 1988 U.S.C.C.A.N. 1547,
1661. Instead, the conference chose to retain the
“[p]resent law,” which was described simply as the hold-
ing of Georgetown Steel: “In 1986, the U.S. Court of Ap-
peals for the Federal Circuit held that the countervailing
duty law does not apply to nonmarket economy countries.”
Id. (citing Georgetown Steel, 801 F.2d at 1308).
Although President Reagan vetoed H.R. 3 without
reference to the countervailing duty provisions, see Mes-
sage from the President of the United States Transmit-
ting His Veto of H.R. 3, H.R. Doc. 100-200 (1988), 11
Congress then passed a revised trade bill, H.R. 4848,
100th Cong. (1988), which the President signed into law
as the Omnibus Trade and Competitiveness Act of 1988,
Pub. L. No. 100-418, 102 Stat. 1107. The act specifically
stated that “the legislative history . . . of the conference
report to accompany H.R. 3 . . . shall be treated . . . as
being the legislative history of the [analogous] provision of
this Act,” id. § 2, indicating that Congress viewed H.R.
4848 as a continuation of H.R. 3. Part 2 of the act, titled
“Improvement in the Enforcement of the Antidumping
and Countervailing Duty Laws,” made a number of
changes to countervailing duty law, but did not resurrect
section 157 of H.R. 3. See id. §§ 1311-1337.
This legislative history indicates that Congress was
well aware of Georgetown Steel and that it rejected a
statutory provision to supersede it—a provision that made
the same distinction Commerce now proposes. Congress’s
description of Georgetown Steel was more than a “passing

11 President Reagan’s primary objection was that the
bill’s “mandatory requirement for businesses to give
advance notice of closings and layoffs,” which “arbitrarily
mandate[d] . . . exactly when and in what form that
notification should take place.” Id. at 1.
21 GPX INTL TIRE CORP v. US

reference” that was inserted into the Congressional Re-
cord by a single senator, McLaughlin v. Richland Shoe
Co., 486 U.S. 128, 132 n.8 (1988), and the rejected section
157 was proposed in direct response to the Georgetown
Steel decision. 12 Section 157 was rejected in the course of
enacting alternative legislation, and the conference com-
mittee specifically described Georgetown Steel as the
“[p]resent law.” “Congress’ rejection of the very language
that would have achieved the result the Government
urges here weighs heavily against the Government’s
interpretation.” Hamdan v. Rumsfeld, 548 U.S. 557, 579-
80 (2006); see also INS v. Cardoza-Fonseca, 480 U.S. 421,
442-43 (1987). Just as the rejected proposals in Hamdan
were persuasive evidence that Congress did not wish to
confer the claimed authority, the legislative history of the
1988 trade laws is persuasive evidence that Congress did
not wish to alter existing law to apply countervailing
duties to imports from NMEs. See also FDA v. Brown &
Williamson Tobacco, 529 U.S. at 144, 147-48 (relying on
the enactment of legislation against the backdrop of
rejected proposals to confer jurisdiction on the FDA).
After the 1988 legislative ratification, Commerce con-
tinued to maintain a consistent position that countervail-
ing duty laws are not applicable to NMEs. See, e.g., Study
of the Application of U.S. Trade Laws to Countries Devel-
oping Market-Oriented Economies, 54 Fed. Reg. 12,941

12 As discussed above, the House Committee Report
specifically described Georgetown Steel as “holding that
the countervailing duty law does not apply to non-market
economy countries” and said that section 157 would
instead apply the countervailing duty laws to NME coun-
tries when possible. H.R. Rep. No. 100-40, at 138 (1987).
Cf. Solid Waste Agency v. U.S. Army Corps of Eng’rs, 531
U.S. 159, 171 (2001) (“[R]espondents point us to no per-
suasive evidence that . . . [the] failure [of the bill] indi-
cated congressional acquiescence to such jurisdiction.”).
GPX INTL TIRE CORP v. US 22

(Mar. 29, 1989); Rescission of Initiation of Countervailing
Duty Investigation and Dismissal of Petition: Chrome-
Plated Lug Nuts and Wheel Locks from the People's
Republic of China, 57 Fed. Reg. 10,459, 10,460 (Mar. 26,
1992) (“[W]e determine that the PRC producers of lug
nuts are nonmarket economy producers to which the
countervailing duty law cannot be applied. See George-
town Steel Corp. v. United States, 801 F.2d 1308 (Fed. Cir.
1986).”); Final Affirmative Countervailing Duty Determi-
nation: Certain Steel Products from Austria, 58 Fed. Reg.
37,217, 37,261 (July 9, 1993) (“In Georgetown Steel, the
court simply concluded as a matter of law that the CVD
statute is not applicable to nonmarket economies because
the concept that the receipt of a subsidy constitutes a
distortion in the normal allocation of resources has no
meaning in such an economy. . . . [I]n a nonmarket econ-
omy, it is impossible to say that a producer has received a
subsidy . . . .”); Final Affirmative Countervailing Duty
Determinations: Certain Steel Products from Germany,
58 Fed. Reg. 37,315, 37,324 (July 9, 1993) (“[T]he coun-
tervailing duty laws are not applicable to NME’s . . . .”).
Against this backdrop, Congress again ratified our
Georgetown Steel decision and Commerce’s existing prac-
tice in 1994, when it again overhauled U.S. trade law by
passing the URAA. There Congress reenacted most of the
countervailing duty law while making changes to conform
the trade laws to international agreements. None of these
changes substantively affected countervailing duty law as
it pertains to this case. As discussed above, the URAA
stated that countervailing duties are imposed to remedy a
“countervailable subsidy” rather than a “bounty or grant,”
URAA §§ 261-262, but the SAA made clear that “the
definition of ‘subsidy’ will have the same meaning that
administrative practice and courts have ascribed to the
term ‘bounty or grant’ and ‘subsidy’ under prior versions
23 GPX INTL TIRE CORP v. US

of the statute,” H.R. Doc. No. 103-316, at 925 (1994). In
clarifying that Commerce need not determine that subsi-
dies affect price or output in order to impose countervail-
ing duties, the SAA noted that “the holding in Georgetown
Steel . . . was limited to the reasonable proposition that
the [countervailing duty] law cannot be applied to imports
from nonmarket economy countries.” Id. at 926.
Commerce does not argue that Congress was unaware
of Georgetown Steel or Commerce’s practice in 1988 and
1994, or that Congress did not approve that practice.
Indeed, as discussed above, Congress specifically rejected
proposals that would have given Commerce the authority
it now claims. Rather, Commerce now argues that (1) the
past practice, which we have found to have been legisla-
tively ratified, did not extend to all NMEs; (2) Congress in
2000 made clear that countervailing duty law should be
applied to China; and (3) unenacted legislation in 2010
supports Commerce’s position. None of these three argu-
ments is persuasive.
Commerce contends that Georgetown Steel “does not
support th[e] proposition” that “[countervailing duties]
could not be applied to exports also subject to NME [anti-
dumping duties],” Commerce Br. 32, because Georgetown
Steel only applies when “it is impossible to identify subsi-
dies within” the NME, Commerce Reply Br. 7. However,
Georgetown Steel itself makes no such a distinction, and
Commerce never suggested that the trade laws contain
such a distinction before issuing the Georgetown Steel
Memo in 2007. In any event, “the relevant inquiry is not
whether Congress correctly perceived the then state of the
law, but rather what its perception of the state of the law
was.” Lindahl, 470 U.S. at 790 (quoting Brown v. Gen.
Servs. Admin., 425 U.S. 820, 828 (1976)). The legislative
history from both 1988 and 1994 demonstrates that
Congress believed the countervailing duty law could not
GPX INTL TIRE CORP v. US 24

be applied to NMEs under Georgetown Steel, and made no
distinction among NME countries. Moreover, the 1988
legislative history shows that Congress rejected a pro-
posal that would have made the very distinction among
NME countries that Commerce urges now.
Nor does the 2000 legislation demonstrate that Con-
gress sought to undo its earlier ratification. In 2000,
Congress enacted legislation providing an appropriation
for “defending United States antidumping and counter-
vailing duty measures with respect to products of the
People’s Republic of China,” Pub. L. No. 106-286,
§ 413(a)(1), 114 Stat. 880, 901 (codified at 22 U.S.C.
§ 6943(a)(1)). Commerce urges that this indicates that
Congress intended countervailing duty law be applied to
China as an NME. We do not agree. As of the date of the
2000 legislation, Commerce still maintained that counter-
vailing duty law did not apply to NME countries. More-
over, while a few floor statements mentioned possible
application of the countervailing duty law to China, see,
e.g., 146 Cong. Rec. 17,509 (statement of Sen. Robert
Byrd), nothing in the 2000 legislative history suggests an
intent to override the longstanding practice of not apply-
ing countervailing duty law to NMEs. Rather, Congress
intended Commerce to apply the countervailing duty law
to China only if Commerce found either that China was
no longer an NME country or that China had a market-
oriented industry. 13 Thus, the U.S. Trade Representa-
tive—who works jointly with Commerce to enforce the
13 As noted above, Commerce has stated that if it
finds an industry within an NME country to be market-
oriented, then market-oriented antidumping law and
countervailing duty law apply. However, Commerce has
yet to make a finding of a market-oriented industry. See
supra note 3. Commerce has also not concluded that
China is a market economy. See Georgetown Steel Memo
3.
25 GPX INTL TIRE CORP v. US

antidumping and countervailing duty laws—specifically
stated this understanding at the time: “When we deter-
mine that an industry is market oriented or that China is
no longer a non-market economy, U.S. countervailing duty
law will apply.” 146 Cong. Rec. 18,112 (2000). Notably,
Commerce thereafter refused to apply countervailing duty
law to Hungary when it was still an NME (and immedi-
ately before it was designated as a market economy),
making no distinction between NME countries and noting
that under Georgetown Steel, “the countervailing duty . . .
provisions of the [Tariff] Act [of 1930, as amended by the
URAA] do not apply to NME countries.” Issues and
Decision Memorandum for the Final Determination in the
Countervailing Duty Investigation of Sulfanilic Acid from
Hungary 14 (Sept. 18, 2002), available at http://
ia.ita.doc.gov/frn/summary/hungary/02-24358-1.pdf
(explaining the decision in 67 Fed. Reg. 60,223 (Sept. 25,
2002)).
Finally, Commerce relies on the unenacted Currency
Reform for Fair Trade Act, H.R. 2378, 111th Cong. (2010).
See Commerce Br. 37; Commerce Reply Br. 17. The
House committee report noted that “in two pending
countervailing duty investigations . . . the Department of
Commerce decided not to investigate allegations that the
undervaluation of [Chinese] currency . . . confers a coun-
tervailable subsidy,” and stated that “[t]his legislation
clarifies that maintenance . . . of a fundamentally under-
valued currency can . . . constitute a countervailable
export subsidy.” H.R. Rep. No. 111-646, at 7 (2010). But
this bill was never voted on by the Senate, and it is well
established that statements made in connection with
unenacted legislation generally shed little light on the
proper interpretation of a prior statute. See, e.g., Cent.
Bank of Denver, N.A. v. First Interstate Bank of Denver,
N.A., 511 U.S. 164, 187 (1994) (“Failed legislative propos-
GPX INTL TIRE CORP v. US 26

als are a particularly dangerous ground on which to rest
an interpretation of a prior statute.” (internal quotation
marks omitted)). If anything, the rejection of this pro-
posal weighs against Commerce’s argument that Congress
intended countervailing duty law to apply to China.
We thus find that in amending and reenacting the
trade laws in 1988 and 1994, Congress adopted the posi-
tion that countervailing duty law does not apply to NME
countries. Although Commerce has wide discretion in
administering countervailing duty and antidumping law,
it cannot exercise this discretion contrary to congressional
intent. We affirm the holding of the Trade Court that
countervailing duties cannot be applied to goods from
NME countries. As we concluded in Georgetown Steel, if
Commerce believes that the law should be changed, the
appropriate approach is to seek legislative change. See
Georgetown Steel, 801 F.2d at 1318 (“If [the existing]
remedy is inadequate to protect American industry from
such foreign competition—a question we could not possi-
bly answer—it is up to Congress to provide any additional
remedies it deems appropriate.”).
AFFIRMED
COSTS
No costs.