Nation Ford Chem. Co. v. United StatesNation Ford Chem. Co. v. United States
Plaintiff Nation Ford, the sole domestic producer of sulfanilic acid, challenges the final results of the antidumping administrative review found in Sulfanilic Acid from the People’s Republic of China, 61 Fed. Reg. 53,711 (Dep’t Commerce 1996) (final admin, review) [hereinafter Final Determination], The review covered the period from August 31,1993 to July 1,1994. The court has jurisdiction under 28 U.S.C. § 1581(c) (1994). Nation Ford claims that Commerce undervaluеd the cost to Chinese producers of aniline, the primary raw material used in the manufacture of sulfanilic acid. It argues that Commerce would have found a greater margin of dumping had it correctly calculated the foreign market value of sulfanilic acid in the People’s Republic of China (PRC). For the reаsons given below, Commerce’s final results are sustained.
Background
Commerce calculates an antidumping margin by comparing an imported product’s price in the United States to the foreign market value (FMV) of comparable merchandise. FMV typically equals the domestic price of the product in the exporting country. When a nonmarket economy (NME) country such as the PRC is involved, however, domestic product sales are usually not reliable indicators of market value. In most such cases, Commerce must estimate the FMV by 1) isolating each factor of the production process in the NME country, 2) choosing a surrogate market economy country at a comparable level of economic development that produces comparable merchandise, 3) assigning a value to each factor of production equal to its cost in the surrogate country, and 4) adding to those values an estimated amount fоr profit and general expenses. 19 U.S.C. § 1677b(c) (1988) (pre-Uruguay Round law applies to this administrative review). The purpose of the procedure is to construct the product’s price as it would have been if the NME country had been a market economy, using the best information available regarding surrogate values. Tianjin Machinery Import & Export Corp. v. United States,
Commerce used the above procedure in this administrative review, using India as the
During the administrative proceedings, the parties disagreed as to whether Commerce should use the domestic or import price of aniline in India as a surrogate value for the aniline used in the PRC. Plaintiff urged Commerce to use the domestic price, while the PRC respondents argued that the import price was more representative. Commerce decided to use import prices obtained from the Monthly Statistics of the Foreign Trade of India Volume Two — Imports (Indian Import Statistics), as it had done in its original investigation. Final Determination at 53,714-15.
Plaintiffs argue again before this court that Commerce should have used domestic rather than import prices because 1) PRC manufacturers use domestically produced aniline, and 2) Indian import prices are subsidized, aberrational, and not market-based. In the alternative, they argue that if Commerce does use import statistics to value aniline, it should add two items to the basic Indian import price: 1) the 85% import duty, and 2) an importer mark-up, on the assumption that independent companies import the aniline and then resell it to manufacturers of sul-fanilic acid.
Discussion
Once Commerce has made a final determination, the court will uphold that determination unless it is “unsupported by substantial evidence on the record, or otherwise not in accordance with law. ” 19 U.S.C. § 1516a(b)(l)(B)(i) (1994). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adеquate to support a conclusion.” Universal Camera Corp. v. NLRB,
I.
The court finds that there is substantial evidence to support Commerce’s decision to choose import prices over domestic prices. The record contains evidence of protectivе tariffs, which distort Indian domestic aniline prices. (Resp’ts’ Additional PAPI Submission of June 28, 1995, Pub. Doc. 114 (showing eighty-five percent tariff).) Congress has directed Commerce to avoid surrogate values tainted by nonmarket forces. See H.R. Conf. Rep. No. 100-576, at 590-92 (1988). A protective import tariff is a classic example of a
After finding that domestic prices were not an appropriate surrogate value, Commerce reasonably decided to use import prices as an alternаtive. The court has held that import prices in the surrogate market may be used to set the value of a factor of production. Tehnoimportexport, UCF America Inc. v. United States,
Commerce’s refusal to add import duties and importer mark-ups to those prices is also supported by substantial evidence. Commerce found that the evidence in the record did nоt justify making such adjustments. Respondents produced evidence that Indian producers did not pay import duties on aniline used to manufacture exports. Id.; (Resp’ts’ Additional PAPI Submission of June 28, 1995, Pub. Doc. 114.) Plaintiffs produced no evidence to the contrary. As for importer markups, Commerce found that “ [t]here is no evidence on the record of the review indicating who imports the aniline, the sulfanilic acid producer or an importer * * *. Accordingly, there is no basis for determining that an importer’s markup would be included in the price to the Indian sulfanilic acid producer]!]” Final Determination at 53,716.
Given the absence of proof that Indian producers paid import duties or markups on imported aniline, Commerce’s refusal to add those adjustments was supported by the record. Commerce made a reasonable decision based on the evidence available to it. It had no duty to seek out additional information not submitted by the parties. The burden of creating an adequate record lies with the party challenging Commerce’s determination, not with Commerce. Tianjin Mach. Import & Export Corp. v. United States,
II.
As Commerce’s decision to use unadjusted Indian import prices was supported by substantial evidence, it is entitled to deference unless plaintiff can show that it was not in accordance with law. Plaintiff raises several arguments suggesting that there is a conflict between Commerce’s decision and the antidumping statute. In each case, unless the statute unambiguously speaks to the issue, “the question for the court is whether the agency’s [decision] is based on a permissible construction of the statute.” Chevron U.S.A. v. Natural Res. Def. Council,
A.
Plaintiff first argues that the factor of production at stake is “domestic aniline,” rather than simply “aniline.” The court cannot require Commerce to adopt that definition. Congress has stated that
the factors of production utilized in producing merchandise include, but are not limited to—
(A) hours of labor required,
(B) quantities of raw materials employed,
(C) amounts of energy and other utilities consumed, and
(D) representative capital cost, including depreciation.
19 U.S.C. § 1677b(c)(3) (1988). The statute provides no other instructions for defining factors of production. “The Act simply does not say— anywhere — that the factors of production must be ascertained in a single fashion.” Lasko Metal Products, Inc. v. United States,
B.
Next, plaintiff argues that Commerce’s valuation of aniline must “reflect the actual experience” of producers in the PRC, claiming that if PRC producers do not use imported aniline, then Commerce may not use import prices as a surrogate value when domestic figures are available. (Pl.’s Reply at 1-2 (citingS. Rep. No. 100-71, at 107 (1987); id. at 6).) Again, nothing in the statute expressly prohibits Commerce from doing so. See 19 U.S.C. § 1677b(c). Commerce rejected the use of Indian domestic prices because it found that they were distorted by forces peculiar to India. Given the evidence in the record of the impact of India’s eighty-five percent tariff on domestic aniline prices, it was reasonable to conclude that those prices were not adequately representative of the situation in the PRC. The portion of the legislative history on which plaintiff relies does not compel a different result, particularly since it discussed a version of the statute that was eventually rejected. S. Rep. No. 100-71, at 106-07 (1987) (factors of production methodology “reflects the actual production efficiencies and experience of the nonmar-ket economy producer”).
Of course, a surrogate value must be as representative of the situation in the NME country as is feasible if it is to further “the basic purpose of the statute — determining current margins as accurately аs possible.” Rhone Poulenc, Inc. v. United States,
C.
In a similar vein, plaintiff correctly notes that to the extent possible, Commerce must use surrogate values taken from “market economy countries that are * * * at a level of economic development comparable to that of the nonmarket economy country[.]” 19 U.S.C. § 1677b(c)(4). Plaintiff argues that because India imported its aniline from Japan, South Korea, the Netherlands, the United Kingdom, and the United States, Indian import prices are derived from economies that are not at a similar level of development to the PRC. (Pl.’s Reply at 5.) The court has addressed this issue in Tehnoimportexport. It held that however developed the eсonomies of source countries might be, “ [nevertheless, the import prices selected by Commerce represent the price * * * available to domestic producers [in the surrogate country].” Tehnoimportexport, UCF America Inc. v. United States,
D.
Finally, plaintiff claims that Indian import prices are not valid surrogate values because they are subsidized by India’s Advance License Program. This program allows producers to import raw materials duty free when used to produce exports. Sulfanilic Acid from India, 57 Fed. Reg. 35,784, 35,784 (Dep’t Commerce 1992) (prelim, determination). Congress has directed that “[i]n valuing [factors of production], Commerce shall avoid using any prices which it has reason to believe or suspect may be dumped or subsidized prices.” H.R. Conf. Rep. No. 100-576, at 590 (1988). In a 1992 investigation, Commerce found that Indian advance licenses for aniline were countervailable subsidies when
Plaintiffs argument fails for two reasons. First, it is not necessary to determine whether the Advance License Program qualifies as a subsidy here, because the answer does not affect thе outcome of the case. For the purposes of this case it does not matter whether the program has subsidized Indian producers, because Commerce is not relying on the export price of Indian sulfanilic acid to construct a FMV in the PRC. Even if the program were a subsidy, any benefit conferred would be on Indian sulfa-nilic acid, not on aniline. While the program may have reduced the end export price of Indian sulfanilic acid, it did not affect the basic value of the imported aniline. The question here is not whether Indian sulfanilic acid is sold at market prices. The only consideration is whether import prices wеre a better estimate of the price of aniline in a theoretical market-economy PRC than were domestic prices. Commerce’s factual findings in Sulfanilic Acid from India, therefore, do not render its findings in this case unreasonable.
Second, it is not a foregone conclusion that the Advance License Program is always a subsidy. It is true that Commerce previously found that the program conferred a countervailable benefit on Indian sulfanilic acid producers. Id. at 35,784; Sulfanilic Acid from India, 58 Fed. Reg. 3,259, 3,260 (Dep’t Commerce 1993) (final determination). Nevertheless, subsidy findings are fact-specific, and circumstances often change. Commerce may conclude thаt a program conferred different levels of benefit during different administrative reviews, even among reviews of the same countervailing duty order. In some reviews, it may conclude that the program conferred no countervailable benefit at all. For that reason, factual findings in past determinations, while often relevant, are not binding in subsequent cases. See Inland Steel Indus., Inc. v. United States,
Conclusion
The court finds Commerce’s decision to use Indian import prices as a surrogate value for aniline in the PRC to be supported by substantial evidence and in accordance with law. Therefore, plaintiffs motion for judgment upon the agency record is denied.