Baoding Mantong Fine Chem. Co. v. United States

Slip Op. 17-169

UNITED STATES COURT OF INTERNATIONAL TRADE

BAODING MANTONG FINE
CHEMISTRY CO., LTD.,

Plaintiff,

v.

UNITED STATES, Before: Timothy C. Stanceu, Chief Judge

Defendant, Court No. 12-00362

and

GEO SPECIALTY CHEMICALS, INC.,

Defendant-Intervenor.

OPINION

[Sustaining a decision responding to court order in litigation contesting a determination in a
review of an antidumping duty order on glycine from the People’s Republic of China]

Dated: December 20, 2017

Ronald M. Wisla, Fox Rothschild LLP, of Washington, D.C., for plaintiff Baoding
Mantong Fine Chemistry Co., Ltd. With him on the brief was Lizbeth R. Levinson.

Antonia R. Soares, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington D.C., for defendant United States. With her on the
brief were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director,
and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Christopher P.
Hyner, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of
Commerce.

David M. Schwartz, Thompson Hine LLP, of Washington D.C., for defendant-intervenor
GEO Specialty Chemicals, Inc.

Stanceu, Chief Judge: In this action, plaintiff Baoding Mantong Fine Chemistry Co., Ltd.

(“Baoding Mantong”) challenged the determination issued by the International Trade
Court No. 12-00362 Page 2

Administration, U.S. Department of Commerce (“Commerce” or the “Department”) to conclude

an administrative review of an antidumping duty order on glycine from the People’s Republic of

China. Glycine from the People’s Republic of China: Final Results of Antidumping Duty

Administrative Review, 77 Fed. Reg. 64,100 (Int’l Trade Admin. Oct. 18, 2012)

(“Final Results”). The administrative review at issue pertained to entries of subject merchandise

made during the period of March 1, 2010 through February 28, 2011. Id.

Before the court is the Department’s decision submitted in response to the court’s opinion

and order in Baoding Mantong Fine Chemistry Co. v. United States, 41 CIT __,

222 F. Supp. 3d 1231 (2017) (“Baoding Mantong II”). See Final Results of Redetermination

Pursuant to Court Remand (July 18, 2017), ECF No. 87-1 (“Second Remand Redeterm.”). The

Second Remand Redetermination addresses the three remaining issues in this litigation. For the

reasons that follow, the court will enter judgment sustaining the Second Remand

Redetermination.

I. BACKGROUND

The background of this action is set forth in the court’s two prior opinions, which are

summarized and supplemented, as necessary, herein. See Baoding Mantong Fine Chemistry Co.

v. United States, 39 CIT __, __, 113 F. Supp. 3d 1332, 1334-36 (2015) (“Baoding Mantong I”);

Baoding Mantong II, 41 CIT at __, 222 F. Supp. 3d at 1234-37.

A. The Parties to this Litigation

Plaintiff Baoding Mantong is a Chinese producer and exporter of glycine. Final Results,

77 Fed. Reg. at 64,101. Baoding Mantong was the sole respondent in the administrative review

at issue. Id. at 64,100. Defendant-intervenor GEO Specialty Chemicals, Inc. is a domestic

producer of glycine and was a party to the administrative proceeding before Commerce. Id.
Court No. 12-00362 Page 3

B. Procedural History

Commerce issued the underlying antidumping duty order in 1995. Antidumping Duty

Order: Glycine From the People’s Republic of China, 60 Fed. Reg. 16,116 (Int’l Trade Admin.

Mar. 29, 1995) (the “Order”). Commerce initiated the administrative review at issue in 2011.

Initiation of Antidumping and Countervailing Duty Administrative Reviews, 76 Fed. Reg. 23,545

(Int’l Trade Admin. Apr. 27, 2011). In the Final Results, Commerce assigned Baoding Mantong

a weighted-average dumping margin of 453.79%. Final Results, 77 Fed. Reg. at 64,101. This

margin was a calculated margin that did not result from the use of an adverse inference.

Before the court, plaintiff challenged the 453.79% dumping margin on various grounds.

Mem. of P. & A. in Supp. of Pl.’s Rule 56.2 Mot. for J. on the Agency R. 2, 10, 13

(July 22, 2013), ECF No. 30-1 (“Pl.’s Br.”); see also Rule 56.2 Mot. for J. on the Agency R.

(July 22, 2013), ECF No. 30. Plaintiff advanced a general argument that the margin was

inaccurate, unfair, and inconsistent with commercial and economic reality, pointing out that

during the administrative review it had reported that it did not suffer any financial loss on export

sales during the period of review. Baoding Mantong I, 39 CIT at __, 113 F. Supp. 3d at 1339. It

also argued, specifically, that Commerce applied invalid surrogate values to four factors of

production—for chlorine, liquid ammonia, formaldehyde, and steam coal—when calculating the

normal value of Baoding Mantong’s subject merchandise. Pl.’s Br. 19-34. Finally, plaintiff

challenged the surrogate financial ratios Commerce used to value Baoding Mantong’s factory

overhead, selling, general, and administrative (“SG&A”) expenses, and profit (collectively, the

“financial ratios”) for the normal value calculation. Id. at 34-39. Noting the plaintiff had made a

general challenge to the margin as well as specific challenges to surrogate value determinations,

the court ordered Commerce to reconsider and redetermine “any and all aspects of the
Court No. 12-00362 Page 4

Department’s calculation of the 453.79% margin as necessary and appropriate” in arriving at a

redetermined margin for Baoding Mantong. Baoding Mantong I, 39 CIT at __, 113 F. Supp. 3d

at 1341.

Following the court’s decision in Baoding Mantong I, Commerce submitted a

redetermination (“First Remand Redetermination”) that calculated a new dumping margin of

64.97%. Baoding Mantong II, 41 CIT at __, 222 F. Supp. 3d at 1234; see also Final Results of

Redetermination Pursuant to Court Remand (Mar. 30, 2016), ECF No. 73-1 (“First Remand

Redeterm.”). The reduction from the previous 453.79% margin to the new margin of 64.97%

resulted from the Department’s basing the financial ratios “upon the financial information for an

Indonesian producer of urea, rather than the financial information of three Indonesian

pharmaceutical companies,” as it had in the Final Results. Baoding Mantong II, 41 CIT at __,

222 F. Supp. 3d at 1237 (quoting First Remand Redeterm. at 5).

Commerce submitted the First Remand Redetermination partially under protest. Having

sought, through its counsel, a voluntary remand from the court in order to reconsider the

financial ratios, Commerce stated that “respectfully, under protest, we have also reconsidered the

remaining aspects of Baoding Mantong’s normal value calculation.” First Remand Redeterm.

at 5. This included the four surrogate values that Baoding Mantong specifically challenged in its

motion for judgment on the agency record, i.e., chlorine, liquid ammonia, formaldehyde, and

steam coal. Id. at 12-20. While protesting the obligation to do so, Commerce reconsidered its

surrogate values for these and others of Baoding Mantong’s production inputs. Id. at 12-26. It

concluded that, as to each of these inputs, its surrogate values as determined in the Final Results

were supported by substantial evidence and otherwise in accordance with law. Id. at 12-20.
Court No. 12-00362 Page 5

In Baoding Mantong II, the court affirmed in part and remanded in part the First Remand

Redetermination. The court sustained the Department’s new selection of information used to

calculate the financial ratios and the Department’s selection of a surrogate value for liquid

chlorine. Baoding Mantong II, 41 CIT at __, __, 222 F. Supp. 3d at 1240-45, 1247-48. The

court did not sustain the Department’s determination of the surrogate values Commerce applied

to Baoding Mantong’s production inputs of ammonia, formaldehyde, and steam coal. Id.,

41 CIT at __, 222 F. Supp. 3d at 1248-54. In the Second Remand Redetermination, Commerce

redetermined each of these three surrogate values and used them in a recalculated

weighted-average dumping margin for Baoding Mantong. The result was a margin of 0.00%.

Second Remand Redeterm. at 16.

On August 17, 2017, Baoding Mantong filed comments in support of the Second Remand

Redetermination, taking issue only with certain statements therein pertaining to the Department’s

reaching certain of its decisions under protest. Baoding Mantong Fine Chemistry Co., Ltd.’s

Comments on Commerce’s Second Remand Results (Aug. 17, 2017), ECF No. 91 (“Pl.’s

Comments on Second Remand”). Defendant-intervenor GEO Specialty Chemicals, Inc. did not

file comments on the Second Remand Redetermination. Defendant filed a response to Baoding

Mantong’s comments on the Second Remand Redetermination on August 28, 2017. Def.’s

Reply to Pl.’s Comments on the Remand Results (Aug. 28, 2017), ECF No. 92 (“Def.’s

Response to Comments on Second Remand”). Both Baoding Mantong and defendant request

that the court sustain the Department’s Second Remand Redetermination. See Pl.’s Comments

on Second Remand 1, 3; Def.’s Response to Comments on Second Remand 1, 2.
Court No. 12-00362 Page 6

II. DISCUSSION

A. Jurisdiction and Standard of Review

The court exercises jurisdiction according to section 201 of the Customs Courts Act

of 1980, 28 U.S.C. § 1581(c), under which the court reviews actions commenced under

section 516A of the Tariff Act of 1930, 19 U.S.C. § 1516a.1 In reviewing an agency

determination, the court “shall hold unlawful any determination, finding, or conclusion found . . .

to be unsupported by substantial evidence on the record, or otherwise not in accordance with

law.” 19 U.S.C. § 1516a(b)(1)(B)(i).

B. The Redetermined Surrogate Values for Steam Coal, Ammonia, and Formaldehyde as Set
Forth in the Second Remand Redetermination

In the Final Results, Commerce valued all of Baoding Mantong’s production inputs using

import data that it obtained from the Global Trade Atlas (“GTA”). For each production input, it

chose import data from Indonesia, which is the country Commerce chose as its principal

surrogate country. The Department’s regulations provide that “[e]xcept for labor, . . . the

Secretary normally will value all factors in a single surrogate country.” 19 C.F.R.

§ 351.408(c)(2). Because the regulation uses the word “normally,” Commerce retained in the

regulation the discretion to use data from more than one market-economy country in valuing the

various factors of production. Relevant to this point is that the statute contemplates situations in

which Commerce may need to rely upon data from more than one surrogate country in order to

fulfill its statutory obligation to value a factor of production according to the “best available

information.” See 19 U.S.C. § 1677b(c) (“the valuation of the factors of production shall be

1
All citations to the United States Code herein are to the 2012 edition and all citations to
the Code of Federal Regulations herein are to the 2012 edition.
Court No. 12-00362 Page 7

based on the best available information regarding the values of such factors in a market economy

country or countries considered to be appropriate by the administering authority.” (emphasis

added)). While the regulation expresses a preference for using information from only one

surrogate country (except for the labor factor of production), the regulation cannot be read so

broadly as to defeat the congressional directive that factors of production be valued according to

the best available information. The flexibility inherent in the word “normally” might be

necessary in a case in which data in one surrogate country is the best available information for

valuing only some, but not all, factors of production. In other words, the comparability of data

that results from having all surrogate values determined according to data in the same surrogate

country, per 19 C.F.R. § 351.408(c)(2), is a consideration in deciding which surrogate data to use

for a particular factor of production, but in light of the statutory directive of 19 U.S.C.

§ 1677b(c) to use the best available information from a surrogate country “or countries,” it

cannot be the sole consideration. By using those words, the provision allows for instances in

which data in the country Commerce otherwise might choose as its single surrogate country

poses a significant problem for a particular factor of production. This is such a case, for as the

court noted in Baoding Mantong II, there was a significant problem with the Indonesian GTA

import data Commerce used to value Baoding Mantong’s use of steam coal in the Final Results

and again in the First Remand Redetermination.

1. Surrogate Value for Steam Coal

The court ruled that the Department’s finding that the Indonesian GTA import data

relevant to steam coal met the “best available information” standard was not supported by

substantial evidence. Baoding Mantong II, 41 CIT at __, 222 F. Supp. 3d at 1253-54. The court

agreed with Baoding Mantong’s position that the average unit value (“AUV”) Commerce
Court No. 12-00362 Page 8

obtained from those data, $0.66 per kilogram, was disproportionately high relative to the AUVs

obtained from other GTA import value information on the record, which pertained to Thailand

and the Philippines (each with an AUV of $0.05 per kilogram), Ukraine (AUV of $0.20 per

kilogram), and South Africa (AUV of $0.21 per kilogram). Id. Moreover, the quantity upon

which the Indonesian AUV was based (less than 604 metric tons) did not compare favorably

with the other quantity data (Thailand, 954,648 metric tons; Ukraine, 638,189 metric tons; South

Africa, 234,389 metric tons; the Philippines, 15,920 metric tons2) and was less than Baoding

Mantong’s own consumption of 1,037 metric tons. Id. Commerce itself had acknowledged that

Indonesia had GTA data with the lowest import volume and the highest value among the

economically comparable countries. Id. (citing First Remand Redeterm. at 19). In support of its

decision to continue to use the Indonesian data, Commerce explained that “it is the Department’s

practice to value all factors from a single surrogate country.” First Remand Redeterm. at 19.

In the Second Remand Redetermination, Commerce valued the steam coal input using the

GTA import data from Thailand, calculating a value of $0.05 per kilogram, noting that the data

from Thailand represented the largest quantity of the four countries considered. Second Remand

Redeterm. at 14. Commerce found that “the Thai data are the most representative of a

broad-market average, as well as being product-specific, publicly available, contemporaneous

with the period of review, and exclusive of taxes and duties.” Id. These findings are supported

by substantial evidence on the record.

Commerce concluded by stating that “pursuant to section 773(c)(1) of the Act, we

respectfully under protest, find that the GTA import data from Thailand constitute the best

2
Baoding Mantong II erroneously stated the quantity as 15,919,558 metric tons rather
than 15,919,558 kilograms.
Court No. 12-00362 Page 9

available information on the record and that the value of $0.05 per kilogram, which is based on

these data, should be selected as the surrogate value for steam coal.” Id. at 15. Commerce did

not explain the reason for its protest. Despite the significant deficiencies the court had identified

in the Indonesian GTA import data on steam coal, Commerce did not provide a specific basis for

its apparent belief that the court had erred in ruling that Commerce lacked evidentiary support

for its finding that these data were the best available information on the record. Instead,

Commerce offered the general statement that “we continue to find that the most appropriate

surrogate country for this review is Indonesia, pursuant to section 773(c)(4) of the Act [19

U.S.C. § 1677b(c)(4)].” Id. at 5. This general statement applied to all surrogate value

determinations discussed in the Second Remand Redetermination and was not specific to the

issue of the steam coal surrogate value.

2. Surrogate Value for Ammonia

In the Final Results and again in the First Remand Redetermination, Commerce chose, as

the best available information for valuing Baoding Mantong’s ammonia production input, import

data for Indonesian HTS subheading 2814.20 (obtained from the GTA), which pertained to

ammonia in aqueous solution, i.e., aqueous ammonia. First Remand Redeterm. at 14-17. From

those data, Commerce calculated a surrogate value of $4.06 per kilogram for Baoding Mantong’s

ammonia input in the Final Results and adhered to that determination in the First Remand

Redetermination. Id. at 17. Before the court, Baoding Mantong argued that the “liquid

ammonia” input it used in producing glycine was anhydrous ammonia, not aqueous ammonia as

Commerce had found. Pl.’s Br. 23-28.

The court directed Commerce to reconsider its finding that the production input was

aqueous ammonia. Baoding Mantong II, 41 CIT at __, 222 F. Supp. 3d at 1248-52. After noting
Court No. 12-00362 Page 10

that the record contained conflicting evidence on the question of the identity of the input, the

opinion stated that “the court cannot conclude from the Department’s discussion and the record

information that Commerce correctly made its decision based on substantial record evidence.”

Id., 41 CIT at __, 222 F. Supp. 3d at 1250. “The court does not conclude that the finding that the

production input was aqueous ammonia necessarily was incorrect as a factual matter, but in light

of the deficiencies in the Department’s explanation, the court directs Commerce to review the

relevant record evidence and reach a well-reasoned and adequately explained finding as to what

the input actually was.” Id., 41 CIT at __, 222 F. Supp. 3d at 1251.

During the second remand proceeding, Commerce issued a supplemental questionnaire to

Baoding Mantong on the type of ammonia used in its production of glycine during the period of

review. Second Remand Redeterm. at 8. Baoding Mantong submitted a response, along with

certificates of analysis for its ammonia purchases indicating that the liquid ammonia Baoding

Mantong purchased was a gas at room temperature and was sold commercially as a compressed

liquid under pressure and refrigeration (i.e., anhydrous), rather than a liquid at room temperature

(i.e., aqueous). Id. at 8-9. In the Second Remand Redetermination, Commerce determined that

the input at issue in fact was anhydrous ammonia, a finding supported by the record evidence as

supplemented by the questionnaire response. Second Remand Redeterm. at 5-10. Commerce did

not reach this decision under protest.

Commerce then considered the record data relevant to valuation of liquid ammonia. In

specific reference to the ammonia surrogate value, Commerce explained its criteria as follows:

“in selecting a surrogate value and pursuant to 19 CFR 351.408(c)(1) and (2), the Department

normally will utilize publicly available information and will normally value all factors of

production from a single surrogate country.” Second Remand Redeterm. at 10. “In addition, it is
Court No. 12-00362 Page 11

the Department’s practice to select values that are product-specific, representative of a

broad-market average, publicly available, contemporaneous with the period of review, and

exclusive of taxes and duties.” Id. The record contained GTA import data for anhydrous

ammonia from the Philippines, Indonesia, Ukraine, Thailand, Colombia, and South Africa. See

id. Commerce concluded that the value data on anhydrous ammonia from all six countries were

specific to the input, publicly available, contemporaneous with the period of review, and

exclusive of taxes and duties. Id. Commerce also found that the data were not all equal when

viewed according to the criterion of being representative of a broad market average. Id. at 11.

Commerce chose, on that basis, the GTA import data for Thailand, observing that “[a]lthough

the volume of Indonesian imports of anhydrous ammonia is greater than the import volumes for

four other potential surrogate countries, it represents only slightly more than half the import

volume for Thailand.” Id. Commerce further stated that “[t]hus, there is nothing to suggest,

either nominally or comparatively, that the volume of Indonesian imports of anhydrous ammonia

is commercially insignificant” but also stated that “[h]owever, as the volume of Thai imports was

much greater, it may be found to be superior and, consequently, the most representative of a

broad-market average.” Id. Substantial evidence of record supports the choice of the Thai data

and the surrogate value Commerce obtained from them.

Commerce further explained that it was influenced to choose the GTA data for Thailand

over those of Indonesia because of the court’s opinion in Baoding Mantong II, stating that “it

remains our preference, consistent with 19 CFR 351.408(c)(2), to select all values from the

primary surrogate country” and that “it is respectfully under protest that we find, pursuant to

section 773(c)(1) of the Act [19 U.S.C. § 1677(c)(1)], the Thai GTA import data to constitute the

best available information on the record and that we select the value of $0.45 per kilogram, based
Court No. 12-00362 Page 12

on these data, as the surrogate value for anhydrous ammonia.” Id. To support its statement that

it was making its decision under protest, Commerce cited language in Baoding Mantong II

related to the GTA data for aqueous ammonia. Id. According to Commerce, “[i]n Baoding

Mantong II, the Court found that the Indonesian GTA import data for aqueous ammonia were not

the data that were most representative of a broad-market average, particularly when compared to

the import data for the Philippines.” Id. This characterization of the court’s opinion in Baoding

Mantong II is not entirely correct.

In Baoding Mantong II, the court did not reach any conclusion as to the quantities in the

GTA import data on anhydrous ammonia; instead, the discussion pertained to the GTA data on

aqueous ammonia. Nor, as to those data, did the court find that the Indonesian GTA import data

for aqueous ammonia were not the most representative of a broad market average. It is not the

role of the court to make findings. Instead, the court pointed out that Commerce, in the First

Remand Redetermination, failed to respond to Baoding Mantong’s comment that the quantity of

Indonesian aqueous ammonia relied upon by Commerce, 82 metric tons, was too small to serve

as the basis for a surrogate value, especially when viewed against Baoding Mantong’s own liquid

ammonia consumption of 660 metric tons during the period of review. Baoding Mantong II,

41 CIT at __, 222 F. Supp. 3d at 1251. The court further discussed the issue as follows:

In the Remand Redetermination, Commerce mentioned the quantity of
82 metric tons for Indonesian imports of aqueous ammonia but did not address the
question of whether this quantity is commercially significant or why the
Philippine data, which are based on a much larger quantity, would not be superior
in that respect. [First] Remand Redeterm. at 17. Instead of addressing the
question of quantity, Commerce discussed the question of whether the value was
aberrational, concluding that it was not because “Indonesia’s AUV is
4.06 USD/kilogram, which falls within the range of economic[ally] comparable
countries of 0.28 to 6.94 USD/kilogram.” Id. Commerce does not address the
point Baoding Mantong raised concerning the relatively low quantities upon
which all of the GTA data were based other than the data from the Philippines.
Commerce concluded that “[t]he GTA data from Indonesia is representative of a
Court No. 12-00362 Page 13

broad market-average of liquid ammonia that is specific to this product HTS
code,” id. at 16, but does not explain in the [First] Remand Redetermination why
the Philippine GTA data, which is based on 52,304 metric tons as compared to 82
metric tons for Indonesia, would not reflect a much broader market average.
Although Commerce prefers using data from a single surrogate country, see
19 C.F.R. § 351.408(c)(2), choosing the Indonesian data over the Philippine data,
which were based on a substantially larger quantity, raises a question as to
whether the Indonesian data were the “best available information” as required by
19 U.S.C. § 1677b(c)(1).

Id., 41 CIT at __, 222 F. Supp. 3d at 1251-52 (second and third alterations in original). As to the

issue of relative quantities and commercial insignificance, the court pointed out that Commerce

failed to address the objections Baoding Mantong specifically had raised. The court, moreover,

specifically recognized the Department’s competing considerations of preferring a broad market

average and also preferring to use surrogate values from a single surrogate country. In making

its decision under protest, Commerce suggests that the Indonesian GTA import data on

anhydrous ammonia were superior to the Thai GTA import data because they pertain to

Indonesia, the chosen surrogate country, and, therefore, are the best available information for

purposes of 19 U.S.C. § 1677(c)(1). Commerce implies that it chose the Thai data over the

Indonesian data only because of the court’s discussion regarding data on aqueous ammonia. But

the court’s prior opinion and order did not compel Commerce to choose the Thai data to value

the anhydrous ammonia production input.

3. Surrogate Value for Formaldehyde

In the Final Results and again in the First Remand Redetermination, Commerce chose, as

the best available information for valuing Baoding Mantong’s formaldehyde input, GTA data for

Indonesian imports under HTS subheading 2912.11(Methanal (formaldehyde)). First Remand

Redeterm. at 17-18. Based on these data, Commerce calculated a surrogate value of $0.49 per

kilogram. Id. In challenging this surrogate value, Baoding Mantong had argued that the quantity
Court No. 12-00362 Page 14

of Indonesian imports on which the value was based, just over 357 metric tons, was not a

commercially and statistically significant quantity. See Baoding Mantong II, 41 CIT at __,

222 F. Supp. 3d at 1252. Baoding Mantong advocated that Commerce use the GTA import data

for the Philippines, which Baoding Mantong argued would support a surrogate value of $0.27 per

kilogram based on a quantity of 6,025 metric tons. Id.

In Baoding Mantong II, the court did not hold that the 357 metric ton quantity was

commercially insignificant. The court did agree with Baoding Mantong that the quantities in the

GTA data set for Colombia (3 metric tons) and South Africa (828 kilograms, or approximately

0.8 metric tons) were aberrantly low when compared to the GTA data of record for the other

economically comparable countries. Id. The court also noted that the AUVs for Colombia

($5.64 per kilogram) and South Africa ($23.54 per kilogram) were aberrational when compared

to the AUVs for the other four countries, each of which showed AUVs of less than $1.00 per

kilogram. Id. The court then opined that “the Indonesian data showed the smallest quantity of

the four data sets that actually merited consideration,” i.e., the data sets for the Philippines,

Thailand, Ukraine, and Indonesia.3 Id., 41 CIT at __, 222 F. Supp. 3d at 1253. The court

directed Commerce to explain “why the Philippine data would have been, or would not have

been, a better source of information than the Indonesian data for valuing formaldehyde.” Id.

“The explanation must consider the record data as a whole, including the data showing that the

quantity for the Philippine data was substantially higher than those for the other countries (and

3
The quantities and average unit values for the four countries were as follows: the
Philippines, 6,025 metric tons and $0.27 per kilogram; Thailand, 791 metric tons and $0.32 per
kilogram; Ukraine, 493 metric tons and $0.90 per kilogram; Indonesia, 357 metric tons and $0.49
per kilogram. Baoding Mantong’s Submission of Surrogate Value Information and Comment
Attach. 3 (July 16, 2012), (P.R. Doc. 99).
Court No. 12-00362 Page 15

between seven and eight times higher than the next largest quantity, which was the quantity for

Thailand).” Id. The court added that “[t]he huge disparity between the Philippine quantity and

the quantities for the other three countries that merited consideration must be considered in light

of the Department’s stated preference for using data that represent a broad market average.” Id.

Commerce, under protest, chose the GTA import data for the Philippines as the best

available information on the record for valuing formaldehyde, calculating a surrogate value of

$0.27 per kilogram. Second Remand Redeterm. at 13. (“we find that the Philippine data are the

most representative of a broad-market average, as well as being product-specific, publicly

available, contemporaneous with the period of review, and exclusive of taxes and duties.”).

Substantial record evidence supports this decision, including the record evidence that these data

were superior according to the “broad market average” criterion, having been derived from the

largest quantity among the data sets. Commerce further explained that “[b]ecause use of these

data is against the Department’s preference for selections from a single surrogate country, we

respectfully under protest find that, pursuant to section 773(c)(1) of the Act [19 U.S.C.

§ 1677b(c)(1)], the Philippine GTA import data constitute the best available information on the

record and that the value of $0.27 per kilogram, which is based on these data, should be selected

as the surrogate value for formaldehyde.” Id.

The rationale for the Department’s protest presumes that the court required Commerce to

reject the Indonesian GTA data. In fact, the court questioned whether the Indonesian data were

the best available information on the record and required an explanation for why the Philippine

GTA import data, which are based on a much larger quantity than any other GTA data set on the

record, would, or would not, be superior. Baoding Mantong II, 41 CIT at __, 222 F. Supp. 3d

at 1253. The Department’s preference for a single surrogate country is the only consideration in
Court No. 12-00362 Page 16

favor of the Indonesian data, and the premise of the Department’s rationale for reaching its

decision under protest is that this preference outweighs the superiority of the Philippine GTA

import data when viewed according to the Department’s “broad market average” criterion. On

that issue, the court also opined that Commerce will be required to use data other than

Indonesian import data when valuing steam coal and that “[d]eparture from the single surrogate

country practice thus will be required in any event, which reduces, if not defeats, the relevance of

the preference reflected in 19 C.F.R. § 351.408(c)(2).” Id.

III. CONCLUSION

As discussed above, the court’s opinion and order in Baoding Mantong II affirmed the

Department’s choice of information for the calculation of financial ratios, affirmed the

Department’s surrogate value for liquid chlorine, found unsupported by substantial evidence the

Department’s surrogate value for steam coal, directed Commerce to reconsider whether, and

reach a well-reasoned and adequately explained finding as to whether, the ammonia input was

aqueous or anhydrous ammonia, and, in light of the need to use data other than the Indonesian

GTA data to value steam coal, directed Commerce to explain why the Indonesian GTA data it

used to value formaldehyde was, or was not, the best available information in light of the

substantially greater quantity shown in the Philippine GTA data.

Commerce responded to the court’s directive by making several new findings in the

Second Remand Redetermination. Commerce found that the GTA data from Thailand for steam

coal were the best available information because they were based on the largest quantity among

the data sets. Commerce stated that it was doing so under protest but stated no specific rationale

for its protest. Commerce found, but not under protest, that the ammonia production input was

anhydrous ammonia and not aqueous ammonia. Commerce valued the anhydrous ammonia
Court No. 12-00362 Page 17

according to GTA import data for Thailand, stating that it was doing so under protest, even

though the court had not required Commerce to choose these data. Finally, Commerce valued

formaldehyde according to GTA import data from the Philippines, protesting on the inaccurate

premise that the court had required Commerce to depart from its preference for valuing factors of

production in a single surrogate country.

As discussed above, the court does not agree with all of the statements Commerce made

in the Second Remand Redetermination. Specifically, the court has identified certain

shortcomings in the grounds, or lack thereof, for the Department’s reaching some decisions in

the Second Remand Redetermination under protest, but the court does not consider these

shortcomings to necessitate or justify another remand. The decisions Commerce reached in the

Second Remand Redetermination are supported by record evidence for the reasons the court has

discussed in this Opinion. Plaintiff Baoding Mantong supports the findings, and the ultimate

conclusion, Commerce reached in the Second Remand Redetermination, and

defendant-intervenor GEO Specialty Chemicals, Inc. has waived any objection by declining to

submit comments on the Second Remand Redetermination to the court. Therefore, the court

sustains the Second Remand Redetermination. Judgment will enter accordingly.

/s/Timothy C. Stanceu
Timothy C. Stanceu, Chief Judge

Dated: December 20, 2017
New York, New York