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Results”) issued by the International Trade Administration, U.S. Department of Commerce
(“Commerce” or the “Department”) to conclude the twenty-third administrative review of an
antidumping duty order on tapered roller bearings (“TRBs”) and parts thereof, finished and
unfinished (“subject merchandise”), from the People’s Republic of China (“China”). Compl. ¶ 1
(Feb. 1, 2012), ECF No. 6 (“Compl.”); see Tapered Roller Bearings and Parts Thereof, Finished
and Unfinished, From the People’s Republic of China: Final Results of the 2009-2010
Antidumping Duty Administrative Review and Rescission of Administrative Review, in Part,
77 Fed. Reg. 2,271 (Int’l Trade Admin. Jan. 17, 2012) (“Original Final Results”), as amended,
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s
Republic of China: Amended Final Results of the Administrative Review of the Antidumping
Duty Order, 77 Fed. Reg. 24,179 (Int’l Trade Admin. Apr. 23, 2012) (“Am. Final Results”)
(collectively, the “Final Results”). The review pertained to entries made between June 1, 2009
and May 31, 2010 (the “period of review” or “POR.”) Am. Final Results, 77 Fed. Reg.
at 24,179.
Before the court is the determination (“Remand Redetermination”) submitted by
Commerce in response to the court’s opinion and order in Changshan Peer Bearing Co., Ltd. v.
United States, 38 CIT __, 953 F. Supp. 2d 1354 (2014) (“Changshan Peer Bearing”). Final
Results of Redetermination Pursuant to Ct. Remand (Apr. 15, 2014), ECF No. 50 (“Remand
Redetermination”). For the reasons discussed herein, the court will affirm the Remand
Redetermination.
I. BACKGROUND
Background on this litigation is provided in Changshan Peer Bearing, 38 CIT at __,
953 F. Supp. 2d at 1355-57, and is supplemented herein.
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1. Procedural History
Commerce issued the antidumping duty order on tapered roller bearings and parts thereof
from China in 1987 (the “Order”). Antidumping Duty Order; Tapered Roller Bearings and Parts
Thereof, Finished or Unfinished, From the People’s Republic of China, 52 Fed. Reg. 22,667
(Int’l Trade Admin. June 15, 1987). In response to requests by various parties and pursuant to
section 751 of the Tariff Act of 1930 (“Tariff Act”), 19 U.S.C. § 1675(a),1 Commerce, on
July 28, 2010, initiated the twenty-third administrative review of the Order. Initiation of
Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocations in
Part, 75 Fed. Reg. 44,224 (Int’l Trade Admin. July 28, 2010).
Commerce issued preliminary results of the review (“Preliminary Results”) on
July 13, 2011, calculating a preliminary weighted-average dumping margin of 5.61% for
Changshan Peer Bearing Company, Ltd., the only individually-examined respondent. Tapered
Roller Bearings and Parts Thereof, Finished or Unfinished, From the People’s Republic of
China: Preliminary Results of the 2009-2010 Administrative Review of the Antidumping Duty
Order and Intent To Rescind Administrative Review, in Part, 76 Fed. Reg. 41,207, 41,214 (Int’l
Trade Admin. July 13, 2011) (“Preliminary Results”). On January 17, 2012, Commerce issued
the Final Results, assigning Changshan Peer Bearing Company, Ltd. a weighted-average
dumping margin of 10.03%. Original Final Results, 77 Fed. Reg. at 2,273. On April 23, 2012,
Commerce, with leave of court to correct a ministerial error, issued amended final results that
revised the weighted-average dumping margin for Changshan Peer Bearing Company, Ltd. to
14.98%. Am. Final Results, 77 Fed. Reg. at 24,179.
1
All statutory citations are to the 2006 edition of the United States Code. All citations to
regulations are to the 2011 edition of the Code of Federal Regulations, unless noted otherwise.
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On February 1, 2012, plaintiffs filed their complaint challenging certain aspects of the
Final Results and seeking a remand to Commerce for reconsideration. Compl. ¶ 1, Request for J.
& Relief. On June 29, 2012, plaintiffs filed a motion for judgment on the agency record, which
defendant United States and defendant-intervenor The Timken Company (“Timken”) opposed.
Pls.’ R. 56.2 Mot. for J. on the Agency R., ECF No. 24 (“Pls.’ Mot.”); Changshan Peer Bearing
Co., Ltd.’s & Peer Bearing Co.’s Mem. of P. & A. in Supp. of its Mot. for J. on the Agency R.,
ECF No. 24-1 (“Pls.’ Br.”); Def.’s Opp’n to Pl.’s Mot. for J. on the Agency R. (Aug. 29, 2012),
ECF No. 32 (“Def.’s Opp’n”); The Timken Co.’s Opp’n to Pl.’s Mot. for J. on the Agency R.
(Sept. 4, 2012), ECF No. 33 (“Timken’s Opp’n”).
In response to plaintiff’s motion, the court issued an opinion and order on
January 15, 2014 ordering Commerce to reconsider its method of determining a surrogate value
for certain bearing-quality alloy steel bar used as a material in the production of subject
merchandise. Changshan Peer Bearing, 38 CIT at __, 953 F. Supp. 2d at 1364. Commerce filed
the Remand Redetermination on April 15, 2014, Remand Redetermination, on which plaintiffs
and defendant-intervenor commented on May 15, 2014, Pls.’ Comments on Final Results of
Redetermination Pursuant to Remand, ECF No. 57 (“Pls.’ Comments”); Comments on Final
Results of Redetermination Pursuant to Ct. Remand, ECF. No. 55 (“Timken’s Comments”).
Defendant responded to those comments on June 9, 2014. Def.’s Resp. to Comments Regarding
the Remand Redetermination, ECF No. 59 (“Def.’s Reply”).
2. Factual History
During the period of the prior (twenty-second) administrative review of the Order,
AB SKF (“SKF”), a Swedish entity, acquired the Chinese bearing producer Peer Bearing
Company-Changshan (as referred to by Commerce, “CPZ/PBCD” or “PBCD”), a Chinese
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producer and exporter of TRBs, and its affiliated U.S. importer and reseller, Peer Bearing
Company (as referred to by Commerce, “PBCD/Peer”). See Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished, From the People’s Republic of China: Final Results of the
2008-2009 Antidumping Duty Administrative Review, 76 Fed. Reg. 3,086, 3,087 (Int’l Trade
Admin. Jan. 19, 2011) (“Final Results AR22”). The acquisition resulted in the two SKF-related
entities that are the plaintiffs in this action, Changshan Peer Bearing Company, Ltd.
(“CPZ/SKF”) and a U.S. importer and reseller, Peer Bearing Company (“Peer/SKF”). Id.
During the prior review, Commerce determined that CPZ/SKF and Peer/SKF were not
successors-in-interest to the former companies, id., a determination that no party has contested in
this litigation.
Upon the acquisition, Peer/SKF came into possession of a quantity of previously
imported, unsold TRB inventory manufactured by the previous Chinese producer, which was
subject merchandise. See Tapered Roller Bearings from the People’s Republic of China: Issues
& Decision Mem. for the Final Results of the 2009-2010 Admin. Review 5-6, A-570-601,
ARP 05-10 (Public Admin.R. Part 2 Doc. No. 45) (Jan. 9, 2012), available at
http://ia.ita.doc.gov/frn/summary/PRC/2012-730-1.pdf (last visited Jan. 26, 2015) (“Decision
Mem.”); CPZ/SKF’s Supplemental Questionnaire C Resp. 7 (Mar. 14, 2011) (Public Admin.R.
Part 1 Doc. No. 76).2 Peer/SKF sold some of this inventory to unaffiliated U.S. customers
2
Prior to the remand redetermination, there were three administrative records filed with
the court. The first of these administrative records was filed on March 9, 2012 (referred to
herein as “Admin.R. Part 1”). The second of these administrative records, in accordance with
the issuance of amended final results, was filed on April 30, 2012 (referred to herein as “Am.
Admin.R.”). The third of these administrative records was filed on August 8, 2012 and included
various documents omitted in the prior administrative record indices (referred to herein as
“Admin.R. Part 2”). Letter to the Ct. re: Amendment to the Admin. R. (July 10, 2012),
ECF. 31-2.
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during the POR. Decision Mem. 5-6. The Department’s determination of the normal value of
this TRB inventory is at issue in this case.
II. DISCUSSION
A. Jurisdiction and Legal Standard
The court exercises jurisdiction according to section 201 of the Customs Courts Act
of 1980, 28 U.S.C. § 1581(c). Under this jurisdictional provision, the court reviews actions
commenced under section 516A of the Tariff Act, 19 U.S.C. § 1516a(a)(2)(B)(iii), contesting the
final results of an administrative review of an antidumping duty order. Upon judicial review, the
court will hold unlawful any finding, conclusion, or determination that is not supported by
substantial evidence on the record or that is otherwise not in accordance with law. 19 U.S.C.
§ 1516a(b)(1)(B)(i). Substantial evidence is “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 217
(1938).
B. The Department’s Valuation of the Steel Bar Factor of Production in the Final Results
Under subsection (1) of section 773(c) of the Tariff Act, Commerce, when calculating the
normal value of subject merchandise from a nonmarket-economy country such as China,
ordinarily determines a surrogate value for each of the factors of production (“FOPs”) utilized in
producing the merchandise and adds amounts for general expenses, profit, and other expenses.
19 U.S.C. § 1677b(c)(1). The statute identifies “quantities of raw materials employed” as one of
the factors of production. Id. § 1677b(c)(3)(B). Commerce is directed to value factors of
production “based on the best available information regarding the values of such factors in a
market economy country or countries” that Commerce considers appropriate. Id.
§ 1677b(c)(1)(B). When valuing FOPs, the statute requires Commerce to “utilize, to the extent
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possible, the prices or costs of factors of production in one or more market economy countries
that are—(A) at a level of economic development comparable to that of the nonmarket economy
country, and (B) significant producers of comparable merchandise.” Id. § 1677b(c)(4).
In the Final Results, Commerce was required to determine normal value for two different
TRB inventories sold to U.S. customers during the POR. The first consisted of subject
merchandise manufactured by CPZ/SKF; the second was made up of the aforementioned subject
merchandise manufactured prior to the POR by the previous Chinese producer and acquired by
Peer/SKF as inventory upon the change in ownership. Decision Mem. 4-6. For subject
merchandise produced by CPZ/SKF (whether or not produced during the POR) and sold by
Peer/SKF during the POR, Commerce valued the steel bar FOP using a weighted average of
price data obtained from CPZ/SKF’s market-economy-country purchases of bearing-quality steel
bar that were made during the POR. Id. at 4-5. For subject merchandise sold by Peer/SKF
during the POR but drawn from the inventory of TRBs produced by Peer Bearing
Company-Changshan, i.e., subject merchandise produced before the acquisition, Commerce
valued the steel bar FOP using Indian import data obtained from the Global Trade Atlas
(“GTA”). Original Final Results, 77 Fed. Reg. at 2,273; Decision Mem. 6-7. The GTA data,
which pertained to harmonized tariff schedule (“HTS”) subheading 7228.30.29 (other bars and
rods of other alloy steel), were submitted to the record by defendant-intervenor Timken.
Original Final Results, 77 Fed. Reg. at 2,273; Timken’s Surrogate Value Submission, Attach. 4
(Jan. 14, 2011) (Public Admin.R. Part 1 Doc. No. 62).
The average unit value (“AUV”) of 105.43 Indian rupees per kilogram for Indian HTS
subheading 7228.30.29, as shown in the Indian import data reported in the GTA, is substantially
higher than the AUV of the market-economy-country purchase prices reported by CPZ/SKF.
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Compare Factors Valuations Mem. for the Final Results 2 (Jan. 9, 2012) (Public Admin.R.
Part. 2 Doc. No. 47), ECF No. 31-3, with CPZ/SKF Final Analysis Mem., Attach. 2 (Public
Admin.R. Part 2 Doc. No. 25) (Conf. Admin.R. Part 2 Doc. No. 8) (Jan. 9, 2012). Plaintiffs
claimed that Commerce instead should have used the prices from CPZ/SKF’s
market-economy-country purchases to value all steel bar inputs used to produce the subject
merchandise sold during the POR, as Commerce did in the Preliminary Results.3 Pls.’ Mot. 2.
C. The Court’s Decision in Changshan Peer Bearing and the Remand Redetermination
In Changshan Peer Bearing, the court found inadequate the rationale Commerce
provided for its decision to use the GTA Indian import data to determine a surrogate value for
the steel bar input pertaining to the merchandise manufactured by the previous producer, Peer
Bearing Company-Changshan. Changshan Peer Bearing, 38 CIT at __, 953 F. Supp. 2d at 1360.
The Decision Memorandum explained only that Commerce valued certain FOPs, including steel
bar input, “using Indian import data already on the record, consistent with the prior
administrative review of this proceeding.” Decision Mem. 7 (footnote omitted). Plaintiff had
objected that the GTA Indian import data were drawn from a “basket” category of different steel
products that covers items not otherwise classified and might include a range of different
3
In the Preliminary Results of the twenty-third review, the U.S. Department of
Commerce (“Commerce” or the “Department”) calculated the normal value of all subject
merchandise sold during the POR, whether produced by the new producer, Changshan Peer
Bearing Company, Ltd., or the previous producer, Peer Bearing Company-Changshan, using
FOP normal values pertaining to the TRBs made by the new producer. Tapered Roller Bearings
and Parts Thereof, Finished or Unfinished, From the People’s Republic of China: Preliminary
Results of the 2009-2010 Administrative Review of the Antidumping Duty Order and Intent To
Rescind Administrative Review, in Part, 76 Fed. Reg. 41,207, 41,211-12 (Int’l Trade Admin.
July 13, 2011) (“Preliminary Results”); Prelim. Surrogate Value Mem. 2 (June 30, 2011) (Public
Admin.R. Part 1 Doc. No. 135) (“Prelim. Surrogate Value Mem.”). Commerce valued all steel
bar input using a weighted average of the market-economy purchase prices reported by the new
producer. Preliminary Results, 76 Fed. Reg. at 41,211-12; Prelim. Surrogate Value Mem. at
Ex. 12.
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materials with widely varying prices. Pls.’ Br. 16. The court’s review of the agency record
revealed “no indication that [Commerce] considered the alternative” of using, as a source of the
surrogate value for this merchandise produced by Peer Bearing Company-Changshan, the prices
SKF paid for steel bar in a market-economy country during the POR. Changshan Peer Bearing,
38 CIT at __, 953 F. Supp. 2d at 1360. The court directed Commerce to reconsider its choice of
surrogate value data in light of the two data sources on the record. Id. at __, 953 F. Supp. 2d
at 1360, 1364. The court noted that Commerce is entitled to deference in the interpretation of the
term “best available information.” Id. at __, 953 F. Supp. 2d at 1358 (citing QVD Food Co., Ltd.
v. United States, 658 F.3d 1318, 1323 (Fed. Cir. 2011) (“QVD Food”)). The court also stated
that “the selection of the best available information must be consistent with the overall purpose
of the antidumping statute, which is ‘to determine margins ‘as accurately as possible.’’” Id.
(quoting Lasko Metal Prods. v. United States, 43 F.3d 1442, 1446 (Fed. Cir. 1994) (“Lasko”), in
turn quoting Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990)).
The court discussed the question of the Department’s reopening the administrative record
to gather additional data but declined plaintiffs’ request that the court direct Commerce to reopen
the record for this purpose, reasoning that the decision to reopen an administrative record on
remand ordinarily is a matter of agency discretion. Changshan Peer Bearing, 38 CIT at __,
953 F. Supp. 2d at 1362-64. While recognizing that extraordinary circumstances might justify an
order directing Commerce to reopen the record to gather additional information, the court did not
find such circumstances in this case. Id. at __, 953 F. Supp. 2d at 1362. In considering this
question, the court noted that plaintiffs had been offered opportunities during the review, both in
response to Timken’s January 14, 2011 submission of the Indian surrogate data and in response
to the July 13, 2011 Preliminary Results, to submit additional data for use in the surrogate value
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determination. Id. at __, 953 F. Supp. 2d at 1363. For these reasons, the court left to Commerce
the decision of whether or not to reopen the record. Id. at __, 953 F. Supp. 2d at 1365.
In the Remand Redetermination, Commerce decided not to reopen the administrative
record for the submission of additional information and not to modify its valuation of the steel
bar input; i.e., Commerce decided to continue basing its surrogate value for the steel bar input of
the previous producer on the GTA Indian import data. Remand Redetermination 1. As its reason
for declining to reopen the record, Commerce explained that the record already contained
“reliable and representative data with which to value CPZ/PBCD’s consumption of
bearing-quality steel bar.” Id. at 13.
D. The Court Will Affirm the Department’s Use of the Indian Import Data to Value the Steel
Bar Input for the Merchandise Produced by Peer Bearing Company-Changshan
Commerce offered two independent justifications for its continued use of the Indian
import data rather than the market-economy-country purchase data to derive a surrogate value
for the steel bar input of the previous producer, Peer Bearing Company-Changshan. As one
reason for declining to use the market-economy purchase data, Commerce stated that “under the
Department’s practice, ME [market-economy] purchase prices are only used to value the
consumption of inputs for the producer that can demonstrate that it satisfies the 33 percent
threshold because the Department seeks to capture each producer’s experience in its valuation of
inputs.” Remand Redetermination 6. In citing the “33 percent threshold,” Commerce was
referring to a 2006 Federal Register notice (the “Antidumping Methodologies Notice”), in which
Commerce established a rebuttable 33% threshold for the use of market-economy purchases as a
surrogate value. See Antidumping Methodologies: Market Economy Inputs, Expected
Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 Fed.
Reg. 61,716, 61,717-19 (Int’l Trade Admin. Oct. 19, 2006) (“Antidumping Methodologies
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Notice”). In the Remand Redetermination, Commerce considered CPZ/SKF not to have met
the 33% threshold for the previous producer’s steel bar input because record evidence did not
show that CPZ/SKF’s market-economy purchases comprised 33% of the total volume of the steel
bar input purchased from all sources and used by CPZ/PBCD to produce subject merchandise
sold by CPZ/SKF during the POR. Remand Redetermination 6. Commerce also noted that
“[u]nlike CPZ/SKF, there is no evidence on the record with respect to ME purchases of the steel
bar input by CPZ/PBCD during the POR . . . .” Id.
In Changshan Peer Bearing, 38 CIT at __, 953 F. Supp. 2d at 1361, the court observed
that the Antidumping Methodologies Notice “does not appear to foreclose the option” of using
the market-economy purchase data to obtain a surrogate value for the subject merchandise made
by the previous producer. Because the market-economy purchase data were on the record,
Commerce, as provided in 19 U.S.C. § 1677b(c)(1)(B), was required in this circumstance to
determine which of the two data sources constituted the best available information for use in
determining a surrogate value for this steel bar input. Had Commerce relied solely on the
Antidumping Methodologies Notice, or the Department’s claimed practice, in deciding not to use
the market-economy purchase data for that purpose, the court would not consider the Remand
Redetermination to have complied with the court’s order or to rest upon adequate reasoning.
Mere reliance on the Antidumping Methodologies Notice and an existing practice is not, by
itself, sufficient to accomplish a comparison of the two data sources for the purpose of
determining the most suitable surrogate value for the steel bar input of Peer Bearing
Company-Changshan according to the “best available information” standard of 19 U.S.C.
§ 1677b(c)(1)(B).
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In providing a second, independent reason for choosing the Indian import data over the
market-economy purchase data, Commerce explained that “in evaluating SVs for PRC producers
of subject merchandise, the Department prefers to use broad-based, publicly available,
non-export, tax-exclusive, and product-specific prices contemporaneous to the POR and from a
single country determined to be economically comparable to the PRC.” Remand
Redetermination 4. Applying these factors, Commerce determined “that the ME purchase prices
are not a suitable SV because they: (1) are not representative of CPZ/PBCD’s experience
because they are SKF’s purchases and specific to CPZ/SKF’s production, not CPZ/PBCD’s
production; (2) are not publicly available; (3) are not from an economically comparable country;
and (4) are not broad-based market averages.” Id. at 9.
The market-economy purchase data are decidedly superior to the Indian import data in
one significant respect: the market-economy purchase data describe steel bar that SKF actually
purchased for use in making TRBs and therefore are specific to the bearing-quality steel input
being valued. In contrast to these data, the Indian import data are acknowledged by Commerce
to describe “a basket category” that might contain a variety of other products varying
significantly in price. Remand Redetermination 8. As the court noted in Changshan Peer
Bearing, “the Indian import data are not particularly specific to the steel bar input being valued
and reflect a value much higher than the data from the market economy purchases, which are
highly specific to the input being valued.” Id., 38 CIT at __, 953 F. Supp. 2d at 1364. The
Remand Redetermination states that Commerce applies each of its factors “non-hierarchically to
the particular case-specific facts,” Remand Redetermination 4, but logic would hold that the
relationship between the data under consideration and the factor of production being valued
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should be fundamental to the Department’s inquiry in meeting the obligation to determine the
dumping margin “‘as accurately as possible.’” See Lasko, 43 F.3d 1442, 1446 (citation omitted).
Nevertheless, the market-economy purchase data are inferior to the Indian import data in
another respect, to which the statute speaks directly. Commerce is to base its surrogate value “on
the best available information regarding the values of such factors in a market economy country
or countries considered to be appropriate by” Commerce. 19 U.S.C. § 1677b(c)(1)(B)
(emphasis added), and thus the statute allows Commerce to use actual market-economy purchase
data even if such data do not pertain to a surrogate country that is economically comparable to
China, see id.; Lasko, 43 F.3d 1445-46; Shakeproof Assembly Components Div. of Ill. Tool
Works v. United States, 268 F.3d 1376, 1381 (2001). But the statute also directs Commerce to
use, “to the extent possible,” information from a market-economy country that is economically
comparable to the nonmarket-economy country in which the good was produced. 19 U.S.C.
§ 1677b(c)(4) (directing Commerce to “utilize, to the extent possible, the prices or costs of
factors of production in one or more market-economy countries that are—(A) at a level of
economic development comparable to that of the nonmarket-economy country, and
(B) significant producers of comparable merchandise.”). In the Remand Redetermination,
Commerce cited this statutory directive in support of its decision to use the Indian import data.
Remand Redetermination 7-8 & n.25, 9.
Commerce has considerable discretion in choosing the “best available information” on
the record. See Nation Ford Chem. Co. v. United States, 166 F.3d 1373, 1377-78 (Fed.
Cir. 1999); QVD Food, 658 F.3d at 1323. In making that choice, Commerce was justified in
following the statutory guidance favoring data from a country or countries economically
comparable to China. In this case, the Indian import data were the only record data from an
Court No. 12-00039 Page 14
economically comparable market-economy country relevant to valuation of the previous
producer’s steel bar FOP. The competing data set obtained from the market-economy purchases
not only was from a country not economically comparable to China but also was limited in
scope, being confined to transactions between a single supplier and a single purchaser. In
considering the governing statute and the record of this case, the court must defer to the
Department’s choice.
E. The Court Is Not Persuaded by Plaintiffs’ Objections to the Remand Redetermination
Plaintiffs direct numerous arguments against the Remand Redetermination. The court
does not find merit in these arguments.
SKF argues, first, that the Remand Redetermination fails to comply with the court’s order
because it relies on the Department’s practice not to use market-economy purchase prices to
value an input unless the producer made those purchases and unless they comprise 33% of the
quantity of the input obtained from all sources during the POR. Pls.’ Comments 3-7; id. at 3
(“[T]he court indicated that invocation of the Department’s practice was not sufficient and that it
was seeking an explanation justifying application of the practice in this case . . . .”).
The court disagrees that Commerce failed to comply with the court’s order. Although
discussing why using SKF’s market-economy purchase prices to value the steel bar input of Peer
Bearing Company-Changshan would be contrary to its practice of applying its 33% threshold,
Commerce also considered the competing data sets as surrogates independently from that
practice. Remand Redetermination 7-10. In doing so, Commerce decided against using the
market-economy purchase data to value the previous producer’s steel bar input, acknowledging
as to specificity that the import data pertained to “a basket category,” id. at 8, but concluding that
the market-economy purchase data did not satisfy its other criteria of public availability, broad
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market average, and exclusivity from taxes and duties, id. at 7. As the court discussed earlier,
Commerce also gave weight to the fact that the market-economy purchase data were not from a
country “economically comparable to the PRC.” Id. (footnote omitted).
SKF next attacks one of the reasons Commerce offered for deciding against the
market-economy purchase prices, which was that these prices were not representative of the
purchasing experience of the previous producer. Pls.’ Comments 7-9. According to plaintiffs,
“this reasoning is inconsistent with other determinations made by the Department in this and
other proceedings,” id. at 7, and that “[t]he Department may not treat similar situations
differently without a rational explanation,” id. SKF argues, specifically, that Commerce acted
inconsistently in rejecting the use of SKF’s market-economy purchase data for valuing the
merchandise produced by Peer Bearing Company-Changshan but accepting the same data for use
in valuing the SKF-produced merchandise. Id. at 7-8. SKF notes that its market-economy
purchase prices, like the import data, pertained to the current POR but in this review were used
to value all SKF-produced subject merchandise, whether produced during the current POR or
during previous periods of review. Id. These arguments fail because this case presents a
situation different than those presented by other cases and because, in this case, Commerce gave
its reasons in the Remand Redetermination for applying the SKF market-economy purchase data
only to steel bar used in SKF-produced merchandise. In the circumstance presented, it was
rational for Commerce to limit the use of the market-economy purchase data to SKF-produced
merchandise on the ground that those data are derived from SKF’s actual purchasing experience.
And as the court discussed previously, Commerce acted within its discretion in giving weight to,
among the various factors it considered, the statutory directive to use, to the extent possible,
information from a market-economy country economically comparable to China.
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Plaintiffs submit that the Department’s reasoning “is inconsistent with 19 CFR
§ 351.408(c)(1), which indicates that that [sic] Commerce should normally use market economy
prices when they are available.” Pls.’ Comments 9 (footnote omitted); id. at 9-12. In the form
in which it applied to the review in question, the regulation provided in pertinent part as follows:
Information used to value factors. The Secretary normally will use publicly
available information to value factors. However, where a factor is purchased
from a market economy supplier and paid for in a market economy currency, the
Secretary normally will use the price paid to the market economy supplier. In
those instances where a portion of the factor is purchased from a market economy
supplier and the remainder from a nonmarket economy supplier, the Secretary
normally will value the factor using the price paid to the market economy
supplier.
19 C.F.R. § 351.408(c)(1). In the review, Commerce followed the practice described in the
second sentence of the regulation when it valued the steel bar factor of production for
SKF-produced merchandise; Commerce thereby used SKF’s market-economy purchase prices to
value the steel bar SKF used to make subject merchandise that was sold during the POR. The
second sentence reasonably may be construed not to apply to the steel bar input of the previous
producer because, on the administrative record relevant to this case, there was no evidence of
market-economy purchases of steel bar by that producer, and in any event there was no evidence
linking that producer to the specific market economy prices at issue in this case. If SKF’s
argument grounded in 19 C.F.R. § 351.408(c)(1) has any validity, therefore, it must be in
reliance on the third sentence in the regulation.
But the third sentence does not unambiguously describe a “normal” practice applicable to
this case. It is clear that the word “factor” as used in the third sentence refers to “factor of
production,” but it is less clear that the term was intended to apply to the separate uses of a single
input (here, bearing-quality steel bar) by two different producers to make different subject
merchandise. It is at least plausible to interpret the word “factor” to refer to a factor of
Court No. 12-00039 Page 17
production that is specific to an individual producer. Under this interpretation, the sentence
would not apply where, as here, subject merchandise of two different producers is involved in
the review and only one of the producers made the market-economy purchases. Some support
for this interpretation can be found in the preamble accompanying promulgation of the
regulation, in which Commerce used the singular term “NME [nonmarket-economy] producer”
in some (but not all) places discussing the new 19 C.F.R. § 351.408(c)(1) provision.
Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,366 (Int’l Trade Admin.
May 19, 1997) (“Preamble”). The Antidumping Methodologies Notice also suggests that
Commerce interprets its regulation in this way. Antidumping Methodologies Notice, 71 Fed.
Reg. at 61,718 (referring, e.g., to “an NME firm’s purchases from market economy suppliers”).
Moreover, Commerce determined factors of production on a producer-specific basis, wherever
possible, for the Final Results. See Changshan Peer Bearing, 38 CIT at __, 953 F. Supp. 2d
at 1360; Decision Mem. 5-6. In summary, plaintiff has not made the case that the Department’s
reasoning was inconsistent with the normal practice described in 19 C.F.R. § 351.408(c)(1).
In connection with its argument based on 19 C.F.R. § 351.408(c)(1), SKF gives various
reasons why it believes using the market-economy prices would have been more reasonable and
more consistent with the Department’s practices in past cases. Pls.’ Comments 10-11. Because
the record contains only two data sets relevant to the input at issue, only one of which pertains to
a market-economy country economically comparable to China, this case presents a special fact
pattern that is not analogous to the past administrative proceedings SKF cites. Also, these prior
administrative proceedings are not binding on Commerce as practice or precedent.
Describing the bearing-quality steel bar as a “commodity product,” plaintiffs next argue
that the Department’s claim that Peer Bearing Company-Changshan could not have obtained
Court No. 12-00039 Page 18
bearing-quality steel bar at a price similar to SKF’s market-economy purchases is “pure
speculation.” Pls.’ Comments 12 (citing Remand Redetermination 12). Commerce, however,
did not reach a factual finding that the previous producer could not have obtained a similar price.
Instead, Commerce made the general point that the market-economy purchase prices “are a
consequence of a business relationship which only existed between CPZ/SKF and its ME
supplier, and so cannot be a reliable proxy for CPZ/PBCD’s purchases, from ME suppliers or
not, or contribute to the calculation of accurate dumping margins for the subject merchandise
produced by CPZ/PBCD.” Remand Redetermination 12. The Department’s statement, made in
response to SKF’s comments objecting to the draft version of the Remand Redetermination, was
directed to the fact that the market-economy purchases were made by SKF, not the previous
producer. Id. On this record, Commerce permissibly could conclude that SKF’s
market-economy purchases had not been shown to have been made at a general market price that
necessarily would have been available to any purchaser or, specifically, to Peer Bearing
Company-Changshan.
Citing decisions of the court and the obligation of Commerce to calculate the most
accurate margin possible, Pls.’ Comments 13-16, SKF argues that “the Department’s refusal to
either use the SKF market economy price or to reopen the record to obtain additional data cannot
reasonably be said to be consistent with this duty to calculate the most accurate margins possible
and to use the best available information,” id. at 13. For three reasons, the court is not persuaded
by this argument.
First, Changshan Peer Bearing left to Commerce the decision of whether or not to reopen
the record. One of the reasons for the court’s doing so was that SKF, during the administrative
review, did not place on the record additional data for possible use in FOP valuation, despite the
Court No. 12-00039 Page 19
Department’s specifically having invited interested parties to make such submissions.
Changshan Peer Bearing, 38 CIT at __, 953 F. Supp. 2d at 1363. The result is a record that
contains only the GTA Indian import data and the market-economy-price data from SKF’s own
market-economy purchases. As the court discussed earlier in this Opinion, each data set on the
record has a shortcoming: the former is less specific to the input being valued than the latter, and
the latter do not pertain to a country that is economically comparable to China. SKF presents no
convincing reasons why the court should reconsider its decision to leave the question of the
reopening the record to the Department’s discretion, and the court sees no justification for such a
reconsideration.
Second, SKF’s objection that the Department’s choice of the Indian import data over the
market-economy purchase data does not result in use of the best available information, or
produce the most accurate margin possible, is undercut by the statute itself. Congress expressly
provided that Commerce is to use data from a market-economy country economically
comparable to the nonmarket-economy country “to the extent possible.” 19 U.S.C.
§ 1677b(c)(4).
Third, the cases SKF cites are not binding precedent, and each is distinguishable from the
case at bar. See Pls.’ Comments 14-16. SKF cites Peer Bearing Co.-Changshan v. United
States, 37 CIT __, __, 914 F. Supp. 2d 1343, 1346 (2013), which involved the twenty-first
review of the Order. That decision concerned the Department’s decision on remand to value the
steel bar FOP using Thai import data from the World Trade Atlas (“WTA”) after the court had
rejected the decision in the administrative review to use Indian import data from the WTA. Id.
at __, 914 F. Supp. 2d at 1348. The Thai data showed an average unit value (“AUV”) that was
corroborated by three other data sets on the record, each of which was specific to bearing-quality
Court No. 12-00039 Page 20
steel bar: import data for India compiled by Infodrive India (“Infodrive”), data from United
States import statistics, and market-economy purchase data of Peer Bearing
Company-Changshan. Id. at __, 914 F. Supp. 2d at 1348-49 & n.3. The Indian import data from
the WTA, which showed a significantly higher value, were not corroborated by these three data
sources or any other data source on the record. Id. at __, 914 F. Supp. 2d at 1348. The court
affirmed the decision Commerce made on remand. Id. at __, 914 F. Supp. 2d at 1349. In
contrast, this case presents a record with only two data sets. The values obtainable under the two
data sets do not corroborate each other, and no other data set is available on the record to
corroborate either one. Defendant correctly points out that with only two data points on the
record, it cannot be shown that one represents an aberration. Def.’s Opp’n 20.
In support of their argument that the court should reject the Department’s use of the
Indian import data, plaintiffs also rely on Peer Bearing Co. v. United States, 36 CIT __, __,
884 F. Supp. 2d 1313, 1317 (2012), which involved a challenge to the final results of the
twenty-second review of the Order. In the final results of that review, Commerce valued the
bearing-quality steel bar FOP using GTA Indian import data for Indian HTS subheading
7228.30.29 but limited its calculation of a surrogate value to Indian import data from three
countries (specifically, the United States, Japan, and Singapore) that it determined from record
evidence had exported bearing-quality steel to India during the period of review. Id. at __,
884 F. Supp. 2d at 1331. Commerce excluded from the database imports from countries
(specifically, Austria, Canada, France, Germany, Slovenia, Turkey, and Taiwan) for which
Commerce considered there to be insufficient record evidence to show that those countries had
made exports of bearing-quality steel to India during the period of review. Id. To determine the
countries that had exported bearing-quality steel to India, Commerce used record evidence
Court No. 12-00039 Page 21
consisting of import data compiled by Infodrive. Id. The Infodrive import dataset for India,
unlike the GTA import data set for India, contained import data specific to goods made of
bearing-quality steel, from which could be obtained an AUV that was considerably lower than
the AUV obtained from the GTA data. Id. at __, 884 F. Supp. 2d at 1331-32. The court
remanded the issue with the instruction that Commerce reconsider its surrogate value, “consider
what alternatives are feasible based on the record before it, including in particular the use of the
Infodrive data to determine a surrogate value, and reach a surrogate value shown by substantial
evidence to be based on the best available record information.” Id. at __, 884 F. Supp. 2d
at 1333. In that case, both the Infodrive data and the GTA data pertained to India, a country
Commerce determined to be economically comparable to China. Id. at __, 884 F. Supp. 2d
at 1331. Both information sources, therefore, qualified as information described in 19 U.S.C.
§ 1677b(c)(4) (“prices or costs of factors of production in one or more market economy countries
that are . . . at a level of economic development comparable to that of the nonmarket economy
country . . . .”). That situation is not paralleled here: the market-economy purchase data in the
present case pertain to a developed country and, accordingly, are outside the scope of the
information described in § 1677b(c)(4).
Further, SKF cites Peer Bearing Co.-Changshan v. United States, 35 CIT __, 752 F.
Supp. 2d 1353 (2011), vacated on other grounds, Peer Bearing Co.-Changshan v. United States,
766 F.3d 1396 (Fed. Cir. 2014), which stemmed from a challenge to the final results of the
twentieth review of the Order. Id., 35 CIT at __, 752 F. Supp. 2d at 1356. In those final results,
Commerce valued the steel bar FOP using online WTA import data for India. Id., 35 CIT at __,
752 F. Supp. 2d at 1360. In addition to these data, the record contained WTA import data from
Indonesia and the Philippines (both of which were countries Commerce determined to be
Court No. 12-00039 Page 22
economically comparable to China) and import data from the United States which, unlike the
other record import data, were specific to bearing-quality steel. Id. at __, 752 F. Supp. 2d
at 1370-71. Concluding that the Department’s rationale for choosing the Indian import data was
inadequate, the Court remanded the issue for the Department’s reconsideration. Id. at __, 752 F.
Supp. 2d at 1374. The case is readily distinguished from the case now before the court because
the record in the twentieth review contained alternatives to the Indian WTA data (i.e., the import
data from Indonesia and the Philippines) that satisfied the description in 19 U.S.C. § 1677b(c)(4).
SKF takes issue with the Department’s reasoning that the record in this case lacks
evidence that the Indian import data are “‘not inclusive of bearing-quality steel bar transactions
or that this Indian HTS subheading is not broadly representative of the value of this input.’”
Pls.’ Comments 16 (citing Remand Redetermination 8). This argument is unpersuasive because
the Indian HTS subheading, 7228.30.29, expressly includes “bars . . . of other alloy steel.” SKF
does not argue, and the court has no reason to conclude, that the scope of the subheading
excludes bearing-quality alloy steel bar based on the terms in the article description for that
subheading. The lack of specificity to the input being valued detracts from the quality of the
Indian import data as a source for the valuation of the input, but standing alone it does not
compel a finding by Commerce that the Indian import data are unreliable or render irrelevant the
statutory disadvantage inherent in the competing data set.
Finally, SKF maintains that in the Remand Redetermination Commerce “relies on
mischaracterizations of SKF’s positions with respect to the Indian WTA data,” citing the
Department’s statement that “‘[p]rice information for imports of this Indian HTS subheading has
been generally agreed upon by parties as an appropriate and sufficiently specific source for
valuing steel bar in prior administrative reviews of the TRB antidumping order, and we find no
Court No. 12-00039 Page 23
argument forwarded to the contrary in the instant review.’” Pls.’ Comments 17 (citing Remand
Redetermination 8-9). SKF points out that it has not agreed with use of the Indian import data to
value steel bar input in prior reviews and, during the review at issue in this case, had no occasion
to contest the use of the Indian import data because Commerce valued all steel bar input using
SKF’s market-economy purchase data in the Preliminary Results. Id. at 17-18.
The sentence SKF quotes from the Remand Redetermination appears to add nothing of
value to the Department’s analysis. The reference to positions taken by parties in prior reviews
has no apparent relevance to the current review, and the finding of “no argument forwarded to
the contrary,” Remand Redetermination 8-9, appears to allude to a failure by SKF to raise an
objection to use of the Indian import data during the administrative proceeding, even though the
issue of exhaustion of administrative remedies was not (and in this context properly could not
have been) a basis for the Department’s decision. The sentence in question is misguided but, in
the context of the Remand Redetermination viewed as a whole, appears to be inconsequential
and, therefore, does not constitute a reason to overturn that decision. As the court has discussed,
the decision to choose the Indian import data over the SKF market-economy-country purchase
data on the limited evidentiary record is supported by the breadth of the Department’s discretion
and the stated reliance on 19 U.S.C. § 1677b(c)(4). See Remand Redetermination 7-8 & n.25, 9.
III. CONCLUSION
For the reasons stated in the foregoing, the court will affirm the Remand Redetermination
and enter judgment accordingly.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Chief Judge
Dated: 'FCSVBSZ
New York, NY
Changshan Peer Bearing Co. v. United States
Court: United States Court of International Trade
Date filed: 2015-02-02
Citations: 2015 CIT 10, 44 F. Supp. 3d 1399
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