OPINION
In this consolidated action, the plaintiff Chinese producers and exporters of iresh garlic (“the Chinese Producers”) challenged the final results of the U.S. Department of Commerce’s ninth administrative review of the antidumping duty order cov
Now pending before the court is Commerce’s Second Remand Determination, filed pursuant to Taian Ziyang. See generally Final Results of Redetermination Pursuant to Court Remand (“Second Remand Determination”). 1 Although they raise no objections to Commerce’s redeterminations as to four of the issues addressed in the Second Remand Determination, Plaintiffs Zhengzhou Harmoni Spice Co., Ltd. (“Harmoni”), Jinan Yipin Corporation, Ltd. (“Jinan Yipin”), Linshu Dading Private Agricultural Products Co., Ltd. (“Linshu Dading”), and Sunny Import & Export Co., Ltd. (“Sunny”) — collectively referred to as the “GDLSK Plaintiffs”— continue to contest the agency’s treatment of three issues. See generally GDLSK Plaintiffs’ Comments Regarding the Department’s Remand Redetermination (“GDLSK Comments”); GDLSK Plaintiffs’ Reply Comments Regarding the Department’s Remand Redetermination (“GDLSK Reply Comments”). The Government seeks a voluntary remand to allow Commerce to recalculate the surrogate value for the Chinese Producers’ labor costs, but contends that the Second Remand Determination should be sustained in all other respects. See Defendant’s Response to Comments Upon the Remand Redetermination (“Def. Response”) at 1-2, 19.
Jurisdiction lies under 28 U.S.C. § 1581(c) (2000). 2 For the reasons detailed below, Commerce’s Second Remand Determination is sustained in part, and this matter is remanded to the agency for further consideration not inconsistent with this opinion.
I. Background
Seven Chinese producers and exporters of fresh garlic (the “Chinese Producers”) brought this action to contest various aspects of the Final Results of Commerce’s ninth administrative review of the anti-dumping duty order on fresh garlic from China, which covered the period from November 1, 2002 through October 31, 2003.
See generally Taian Ziyang,
33 CIT-,
In its Second Remand Determination, Commerce revalued irrigation expenses, leased land, ocean freight, and labor. See Second Remand Determination at 1-2, lile, 16-40, 40-41, 50-53, 60-73, 78-79. On the other hand, Commerce continued to value garlic seed, cardboard cartons, and plastic jars and lids as it did in the Final Results. See id. at 1-2, 4-11, 41^6, 46-50, 54-60, 73-76, 76-78.
As a result of its reconsideration in the course of the second remand, Commerce recalculated the weighted-average anti-dumping duty margin for Harmoni as 0.00% (down from 8.79%), for Jinan Yipin as 1.04% (down from 13.21 %), for Linshu Dading as 4.34% (down from 7.97%), for Sunny as 4.22% (down from 9.17%), and for Dong Yun as 15.49% (down from 31.26%).. See Second Remand Determination at 79; Final Results, 70 Fed.Reg. at 34,085; First Remand Determination at 19. FHTK’s margin remains unchanged at 15.75%. See Second Remand Determination at 79; First Remand Determination at 19. 4
The GDLSK Plaintiffs contend that Commerce’s wage rate calculation and its valuation of cardboard cartons and plastic jars and lids do not comply with the instructions in Taian Ziyang. See generally GDLSK Comments; GDLSK Reply Comments. The GDLSK Plaintiffs maintain that this matter therefore should be remanded to the agency for further consideration. See GDLSK Comments at 2-3, 9, 14; GDLSK Reply Comments at 7. The Government seeks a voluntary remand to allow Commerce to recalculate the labor wage rate, but maintains that the Second Remand Determination otherwise should be sustained. See Def. Response at 1-2, 19. 5
In an action reviewing an anti-dumping determination by Commerce, the agency’s determination must be upheld except to the extent that it is found to be “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(l)(B)(i);
see also NMB Singapore Ltd. v. United States, 557 F.Sd
1316, 1319 (Fed.Cir.2009). Substantial evidence is “more than a mere scintilla”; rather, it is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”
Universal Camera Corp. v. Nat’l Labor Relations Bd.,
Finally, while Commerce must explain the bases for its decisions, “its explanations do not have to be perfect.”
NMB Singapore, 557
F.3d at 1319. Nevertheless, “the path of Commerce’s decision must be reasonably discernable,” to support judicial review.
Id. (citing Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
III. Analysis
Dumping occurs when goods are imported into the United States and sold at a price lower than their “normal value,” resulting in material injury (or the threat of material injury) to the U.S. industry. See 19 U.S.C. §§ 1673, 1677(34), . 1677b(a). The difference between the normal value of the goods and the U.S. price is the “dumping margin.” See 19 U.S.C. § 1677(35). When normal value is compared to the U.S. price and dumping is found, antidumping duties equal to the dumping margin are imposed to offset the dumping. See 19 U.S.C. § 1673.
Normal value is typically calculated using either the price in the exporting market
(i.e.,
the price in the “home market” where the goods are produced) or the cost of production of the goods, when the exporting country is a market economy eoun
In cases such as this, where Commerce concludes that concerns about the sufficiency or reliability of the available data do not permit the normal value of the goods to be determined in the typical manner, Commerce “determine^] the normal value of the subject merchandise on the basis of the value of the factors of production,” including “an amount for general expenses and profit plus the cost of containers, coverings, and other expenses.”
See
19 U.S.C. § 1677b(c)(l);
see generally Ningbo Dafa Chem. Fiber Co., Ltd. v. United States,
In determining which data constitute the “best available information,” Commerce generally looks to the criteria set forth in its “Policy Bulletin 04.1,” also known as the “NME Surrogate Country Policy Bulletin.” Policy Bulletin 04.1 explains:
In assessing data and data sources, it is [Commerce’s] stated practice to use investigation or review period-wide price averages, prices specific to the input in question, prices that are net of taxes and import duties, prices that are contemporaneous with the period of investigation or review, and publicly available data.
See
Import Administration Policy Bulletin 04. 1, “Non-Market Economy Surrogate Country Selection Process,” at “Data Considerations” (March 1, 2004)
8
;
see also
Within this general framework, the statute “accords Commerce wide discretion in the valuation of factors of production in the application of [the statute’s] guidelines.”
See Shakeproof,
Nevertheless, Commerce’s discretion is not boundless. In exercising its discretion, Commerce is constrained by the purpose of the antidumping statute, which is “to determine antidumping margins ‘as accurately as possible.’ ”
See Shakeproof,
In the present case, pursuant to the instructions in Taian Ziyang, Commerce reconsidered various aspects of the agency’s valuation of the factors of production in the final results of the ninth administrative review of the antidumping duty order covering fresh garlic from China. As discussed in greater detail below, Commerce’s valuation of garlic seed (including retained garlic seed), irrigation costs, land lease costs, and ocean freight costs must be sustained. On the other hand, Commerce’s valuation of labor expenses, cardboard cartons, and plastic jars and lids must be remanded to the agency for further consideration.
A. Valuation of Garlic Seed
'Taian Ziyang
sustained challenges by FHTK and the GDLSK Plaintiffs to the data that Commerce selected to value garlic seed in its Final Results.
See generally Taian Ziyang,
33 CIT at-,-,
In the Final Results, Commerce had rejected two sources of data provided by the respondent Chinese producers — (1) prices reflected in Indian import data published by the World Trade Atlas (“WTA”)
10
for the Indian Harmonized Tariff Schedule (“HTS”) subheading covering “Garlic Fresh or Chilled,” and (2) price data from the Indian Agricultural Marketing Information Network (“Agmarknet”). Instead, the Final Results valued garlic seed using prices for varieties of Indian garlic as listed in newsletters of the Indian National Horticultural Research and Development Foundation (“NHRDF”).
See generally Taian Ziyang,
33 CIT at-,
In the Final Results, Commerce concluded, in essence, that the NHRDF data were the best available information for valuing the respondent Chinese producers’ garlic seed, because — according to Commerce — the NHRDF data are more product-specific than the other two potential sources of data on the record.
See Taian Ziyang,
33 CIT at-,
On remand, in accordance with Taian Ziyang, Commerce re-evaluated all three data sets on the record and reaffirmed its determination that the NHRDF data are the most product-specific, and therefore the best available information with which to value the Chinese producers’ gar-lie seed. See generally Second Remand Determination at 4-8, 54-58. In reaching its Second Remand Determination, Commerce again dismissed both the Indian import statistics and the Agmarknet data as insufficiently product-specific, pointing to the general, non-descriptive nature of categories used in the Agmarknet data, and explaining that the tariff heading used for the Indian import statistics is “extremely broad, encompassing all garlic imported into India.” See generally id. at 7-8. 11
By supplementing the administrative record with the Market Research Report, Commerce has now “directly tie[d] the physical characteristics of respondents’ input [i.e., the Chinese producers’ garlic] to those of particular NHRDF varieties,” demonstrating that “[Commerce’s] surrogate value data source [i.e., the NHRDF data] approximates the large, high-quality bulb grown by respondents.”
See
Second Remand Determination at 7. Commerce has thus responded to the concerns raised in
Taian Ziyang. See Taian Ziyang,
33 CIT at -,
Taian Ziyang
granted the Government a voluntary remand to permit Commerce to respond to the request of Jinan Yipin and Harmoni that, in calculating their dumping margins, the agency value garlic seed based on their reported company-specific growing factors of production for garlic seed (rather than using the surrogate value for purchased garlic seed that the agency employed for the other respondent Chinese producers), to properly reflect the fact that Jinan Yipin and Harmoni grow their garlic crop using seed retained from harvests in prior years.
See Taian Ziyang,
33 CIT at- & n. 33, -,-,
The Second Remand Determination reaffirmed Commerce’s practice of “valuing] self-produced inputs by valuing the inputs used to create the relevant self-produced inputs,” and stated that, in the present case, the agency “is again using its standard ‘inputs-to-inputs’ methodology in valuing self-produced garlic seed based upon the actual inputs used to create Jinan Yipin’s and Harmoni’s self-produced garlic seed.” See Second Remand Determination at 59. Under that methodology, Commerce calculated surrogate values for the two respondents’ reported inputs for growing garlic seed {e.g., fertilizer; herbicide; pesticide; plastic film; skilled, unskilled, and indirect labor; and electricity), multiplying each factor by the per metric ton consumption rates for that factor, and adding up the results. See id. at 59-60. Commerce thus valued Jinan Yipin’s and Harmoni’s retained garlic seed based on the costs that they incurred to grow the retained seed, reasoning that “this method more accurately reflects Jinan Yipin’s and Harmoni’s production methodology and, thus, results in a more accurate normal value calculation.” See id. at 59-60; see also id. at 11.
Because no party has filed comments on the Second Remand Determination on the issue, and because Commerce’s valuation of the garlic seed retained by Jinan Yipin and Harmoni is supported by substantial evidence and is otherwise in accordance with law (as well as Taian Ziyang), this determination by Commerce also must be sustained.
B. Valuation of Irrigation Costs
Taian Ziyang
sustained challenges by the GDLSK Plaintiffs and Dong Yun to the surrogate value that Commerce assigned for the irrigation water used in cultivating their garlic crops.
See generally Taian Ziyang,
33 CIT at-, -, -,
Taian Ziyang
rejected Commerce’s claim that, as a legal matter,
Pacific Giant
required the agency to assign a value for irrigation water in the Final Results, without regard to whether or not Indian garlic growers actually pay for such water.
See Taian Ziyang,
33 CIT at -,
Taian Ziyang
concluded that, as a matter of law, “[i]f the record establishes that farmers in India — like the Chinese garlic producers in this case — do not pay for irrigation water drawn from nearby rivers or wells on their land, it is not clear how Commerce here can assign to water a surrogate value greater than zero. Any other outcome would appear to contravene both the plain language and the basic intent of the statute.”
See Taian Ziyang,
33 CIT at-,
In the most recent remand, Commerce has changed its fundamental approach to calculating the costs that the GDLSK Plaintiffs and Dong Yun incurred in irrigating their garlic crops.
See generally
Second Remand Determination at 11-16. Specifically, Commerce has determined that “valuing the pumping cost of
In reaching its decision on remand, Commerce reviewed the undisputed record evidence, which indicates that Jinan Yipin used diesel fuel to pump irrigation water into its fields, and that Dong Yun, Harmoni, Linshu Dading, and Sunny used electricity for that purpose. See Second Remand Determination at 13. Commerce similarly surveyed the ample and uncontroverted record evidence demonstrating that — much like the GDLSK Plaintiffs and Dong Yun — Indian farmers also do not pay for irrigation water that is drawn from their own wells. See id. at 14. 14 Based on the record evidence, Commerce determined that “farmers in India who have access to wells on their property do not pay for irrigation water.” See id. at 15. As a result, Commerce further determined that — as to the Chinese garlic producers here — “it is not reasonable to separately value the consumption of water for farmers who, having access to well or river water, are not otherwise obligated to pay either civil or private authorities for irrigation water.” See id.
Based on the record evidence and the legal analysis as summarized above, Commerce’s Second Remand Determination does not calculate a surrogate value for irrigation water itself, but — instead—calculates a surrogate value for the energy used to pump the irrigation water from its source into the field (i.e., diesel fuel for Jinan Yipin, and electricity for the other GDLSK Plaintiffs and Dong Yun), and then applied that surrogate value to the actual quantity of diesel fuel or electricity consumed in pumping irrigation water as reported by each of :the companies. In addition, Commerce accounted for freight expenses incurred in transporting the diesel fuel from the diesel supplier to Jinan Yipin.
See
Second Remand Determination at 16;
see also Jinan Yipin Corp. v. United States,
35 CIT -, -, 774
As discussed above, the Second Remand Determination’s valuation of the irrigation costs incurred by the GDLSK Plaintiffs and Dong Yun is supported by substantial evidence and is otherwise in accordance with law. In addition, the Second Remand Determination on this issue complies with the remand instructions in Taian Ziyang. Commerce’s determination therefore must be sustained.
C. Valuation of Labor Expenses
The antidumping statute provides that, in non-market economy cases such as this, the surrogate data used to calculate the value of factors of production must, to the extent possible, come from market economy countries that are at “a level of economic development comparable to that of the non-market economy country” at issue — in this case, China. See 19 U.S.C. § 1677b(c)(4)(A). The antidumping statute further provides that, in such cases, the surrogate data must, to the extent possible, come from market economy countries that are “significant producers of comparable merchandise.” See id.
For most factors of production, Commerce typically uses values from a single market economy country (known as the “surrogate country”' — -here, India) that Commerce has determined to be both (a) economically comparable to the non-market economy country in question and (b) a significant producer of the goods at issue.
See
19 C.F.R. § 351.408(c)(2). But
Taian Ziyang
explained that Commerce treats the cost of labor quite differently than other factors of production.
See Taian Ziyang,
33 CIT at-,
Concerned about “wide variances in wage rates between comparable economies,” Commerce historically has valued the cost of labor in an NME country case by using a regression-based wage rate “reflective of the observed relationship between wages and national income in a variety of market economy countries.”
See Taian Ziyang,
33 CIT at -,
In the Final Results, Commerce calculated the respondent Chinese producers’ labor costs using the agency’s regression-based wage rate calculation methodology, as set forth in the agency’s regulations, to establish a surrogate wage rate for China.
See Taian Ziyang,
33 CIT at --,
Specifically, the GDLSK Plaintiffs and Dong Yun argued,
inter alia,
that Commerce designated India as the primary surrogate market economy in this case, but — rather than using the Indian surrogate wage rate — Commerce used the regression-based methodology established in its regulations to calculate a wage rate that is “more than 500 percent higher than that of India.”
See Taian Ziyang,
33 CIT at-,
Relying heavily on
Allied Pacific II
(which held Commerce’s regulation to be inconsistent with the statute),
Taian Ziyang
remanded the issue of the valuation of the labor factor of production to Commerce for further consideration.
See Taian Ziyang,
33 CIT at-,-,-,
Commerce’s Second Remand Determination also took strong exception to
Taian Ziyang’s
conclusion that the agency’s regulation prescribing the regression-based wage rate calculation methodology was inconsistent with the statute.
See
Second Remand Determination at 18 n. 19. Indeed, the agency devoted more than 30 pages of the Second Remand Determination to attempts to explain and defend the agency’s regression-based methodology
In the meantime, however, the Court of Appeals handed down its decision in
Dorbest,
striking down Commerce’s regulation as inconsistent with the plain language of the statute.
See generally Dorbest,
To the extent that 19 C.F.R. § 351.408(c)(3) requires or at least permits the use of labor value data from countries that are not economically comparable to the non-market economy country in question or are not significant producers of merchandise comparable to the merchandise in question when data from countries meeting both criteria are available, the regulation is facially invalid as noncompliant with [the statute].
Dorbest,
Armed with Dorbest, the GDLSK Plaintiffs have renewed their plea for the court to “reject Commerce’s continued use of the invalidated regression-based wage rate calculation and remand this issue to Commerce with instructions to use available wage rate information that satisfies both requirements of 19 U.S.C. § 1677b(c)(4).” See GDLSK Comments at 2-3. The Government generally concurs, requesting a voluntary remand to allow Commerce to recalculate the surrogate value for labor expenses in a manner consistent with Dorbest. See Def. Response at 18. No other party has filed comments on this issue.
In light of the arguments of the GDLSK Plaintiffs and the Government’s request for a voluntary remand, this matter must be remanded. On remand, Commerce shall recalculate labor expenses in accordance with Dorbest and the plain language of the statute; and Commerce shall allow sufficient time for the submission of comments on the agency’s draft results of the remand.
D. Valuation of Leased Land
Taian Ziyang
sustained Dong Yun’s challenge to Commerce’s decision to calculate a separate surrogate value for leased land.
See generally Taian Ziyang,
33 CIT at --•, -, -,
As
Taian Ziyang
noted, however, Dong Yun maintained that Commerce was, in effect, double-counting land lease costs. According to Dong Yun, the Indian surrogate companies’ financial statements already included rent and lease payments as part of “selling, general, and administrative” expenses.
See Taian Ziyang,
33 CIT at -, -, -,
In the Second Remand Determination, Commerce reversed course and determined that — as Dong Yun has maintained — land lease costs indeed already were accounted for in the “selling, general and administrative” costs of the surrogate financial companies.
See generally
Second Remand Determination at 40-41. Specifically, upon reconsideration, Commerce found record evidence “in the form of certain broad line items [in the financial statements of the Indian surrogate companies], such as ‘rent,’ ‘leasehold land,’ and ‘lease rent,’ that indicates that the surrogate companies may have leased land.”
See
Second Remand Determination at 41. The Second Remand Determination also conceded that, as
Taian Ziyang
observed, “prior decisions by [Commerce] have assumed that, where a surrogate’s financial statements contain a broad line item encompassing a [factor of production], that [factor of production] is accounted for, and valuing the [factor of production] separately would result in double-counting the cost.”
See
Second Remand Determination at 41
(citing Taian Ziyang,
33 CIT at -,
Because Commerce’s Second Remand Determination on this issue complies with the remand instructions in Taian Ziyang, and because it is supported by substantial evidence and is otherwise in accordance with law, Commerce’s determination must be sustained.
E. Valuation of Cardboard Packing Cartons
In
Taian Ziyang,
the GDLSK Plaintiffs prevailed on their challenge to Commerce’s surrogate value for the cardboard cartons that the Chinese producers used to pack and ship garlic.
See generally Taian Ziyang,
33 CIT at-, -, -,
As
Taian Ziyang
noted, however, although the price quotes are “not without problems,” the Final Results significantly “overstated any potential concerns as to the reliability of the domestic Indian box price quotes that the agency rejected, [and] significantly understated the patent flaws and defects in the Indian import statistics on which the agency relied.”
See Taian Ziyang,
33 CIT at-,-,
1. The Final Results’ Treatment of the Domestic Pnce Quotes
Taian Ziyang
explained that Commerce’s concerns about the lack of “public availability” of the price quotes are based on the potential for manipulation.
See Taian Ziyang,
33 CIT at -,
Taian Ziyang
was equally skeptical about Commerce’s second basis for rejecting the domestic price quotes.
Taian Ziyang
noted that the Final Results indicated that all four domestic price quotes are dated “within one week of one another” and referred to Commerce’s general preference for price data that “reflect broad market averages” covering “a substantial period of time” rather than price data that reflect a more limited period of time, due
Specifically, in Shrimp from Vietnam, Commerce rejected price quotes for shrimp which were from only one week of the period of investigation. But the record in that case included affirmative evidence of price fluctuations.
See Taian Ziyang,
33 CIT at -,
Even more to the point,
Taian Ziyang
noted that, as the GDLSK Plaintiffs observed,
all other things being equal,
it makes sense for Commerce to privilege prices that reflect broad market averages and cover a substantial period of time over price data from a more limited time frame.
See Taian Ziyang,
33 CIT at -,
2. The Final Results’ Treatment of the Indian Import Statistics
Taian Ziyang observed that the Final Results not only sought to emphasize the potential shortcomings of the domestic price quotes (as discussed above), but, in addition, sought to minimize the evident and admitted flaws in the Indian import statistics on which the Final Results relied (as set forth in greater detail below).
As a threshold matter,
Taian Ziyang
highlighted Commerce’s longstanding policy favoring the use of domestic data, rather than import statistics (all other things being equal) — a general policy that the agency did not honor here.
See Taian Ziyang,
33 CIT at-&. nn. 60-61, 637
Taian Ziyang
first noted that it is undisputed that the domestic price quotes are much more “product specific” than the Indian import statistics on which Commerce here relied.
See Taian Ziyang,
33 CIT at-,-,
Taian Ziyang
noted that the Final Results acknowledged that the Indian import statistics include “many different types of boxes.”
See
Issues and Decision Memorandum at 38. But, rather incredibly, the Final Results then asserted that “that fact alone does not undermine the use of the value.”
See id.
As
Taian Ziyang
pointedly observed, Commerce’s statement “simply defies logic.”
See Taian Ziyang,
33 CIT at-,
The Final Results attempted to address the over-breadth of the Indian import statistics, asserting that “the total quantity of gift boxes was less than ten percent of the total carton imports,” and that “more than fifty percent of the entries ... [made under HTS subheading 4819.1001] are simply categorized as boxes or cartons, with no other specifications.”
See
Issues and Decision Memorandum at 38-39. But, as
Taian Ziyang
noted, trade intelligence data from Infodrive India and other information submitted by the GDLSK Plaintiffs belies Commerce’s efforts to downplay the many products included in the Indian import statistics that are much more expensive than the cardboard packing cartons at issue here.
See Taian Ziyang,
33 CIT at-,
Quite apart from the fact that the Indian import statistics are distorted by apparently vast quantities of gift and specialty boxes that are clearly more expensive than the basic cardboard packing cartons that the Chinese garlic producers used,
Taian Ziyang
explained that the Indian import statistics are even further distorted by the inclusion of boxes that were shipped by air.
See generally Taian
Ziyang, 33 CIT at -,
Some companies may import cartons in to the PRC by air, others may not.... This point alone, however, does not undermine the [agency’s] rationale.... Furthermore, the respondents have not submitted on the record of this review anything that demonstrates that their own domestic carton suppliers did not import some [cartons] into the PRC by air.
See
Issues and Decision Memorandum at 40
(quoted in Taian Ziyang,
33 CIT at -,
Taian Ziyang
observed that, “[r]ather than grappling with the merits of the GDLSK Plaintiffs’ concerns about the distortive effects of air freight charges,” the Final Results “summarily dismissed them” by stating that “[m]ere allegations of facts, absent any record evidence for support of such claims, cannot be a basis for undermining the use of publicly available, contemporaneous valuation data from Indian HTS categories in this case.”
See Taian Ziyang,
33 CIT at-,
3.
The Remand in Taian Ziyang Taian Ziyang
concluded that the Final Results “failed to explain how the Indian
Unfortunately, however, Commerce’s Second Remand Determination is wholly unresponsive to Taian Ziyang.
4. The Second Remand Determination’s Treatment of the Domestic Price Quotes
The Second Remand Determination adds virtually nothing to this case; and, in fact, it is incorrect as to at least one key finding. Specifically, the Second Remand Determination states (in two different places) that the four price quotes at issue were “not contemporaneous” with the period of review- — a statement that is patently false. See Second Remand Determination at 43 (stating that price quotes are “not contemporaneous”); id. at 75 (stating that “[t]he price quotes ... do not reflect prices during the [period of review]”). 20 The magnitude of Commerce’s error calls into question the agency’s “bottom line” on this issue (i.e., the agency’s determination that the Indian import statistics are the “best available information” for use in determining the surrogate value for cardboard cartons), and, taken alone, is sufficient to necessitate another remand.
In other words, the Second Remand Determination reflects a determination by Commerce that the four domestic price quotes were not the “best available information” because the price quotes (1) were not “publicly available,” and, according to Commerce, (2) were not representative of “broad market averages” covering “a substantial period of time,” and (3) were not contemporaneous with the period of review.
See, e.g.,
Second Remand Determination at 42-43 (rejecting the four price quotes because they “are not publicly available, not contemporaneous, and are not representative of prices throughout the [period of review]”);
see generally id.
at 41-46, 73-76. Because Commerce itself has yet to correct its error concerning the contemporaneity of the domestic price quotes, it cannot be said with certainty that the agency would not have reached a different conclusion as to the “best available information” for use in determining the surrogate value for cardboard cartons if the agency had recognized that the price quotes in this case in fact are contemporaneous with the period of review. At the very least, the agency’s “calculus” presumably would have been considerably different.
21
Further, the gravity of Commerce’s
As to Commerce’s asserted concerns about the “public availability” and “representativeness” of the domestic price quotes, the Second Remand Determination does little more than rehash the exact same points that were made in the Final Results (and found wanting in Taian Ziyang). Compare Second Remand Determination at 41-46, 75-76 with Issues and Decision Memorandum at 39-40. As the GDLSK Plaintiffs aptly observe, the Second Remand Determination largely “reiterates [Commerce’s] ... concerns about the unreliability of the price quotes,” and “is comprised of virtually the identical arguments that [Taian Ziyang ] has already found to be unsupported and inadequate.” See GDLSK Comments at 3, 6.
As discussed below, in the course of the most recent remand, notwithstanding the questions raised in
Taian Ziyang,
Commerce apparently took no action to attempt to substantiate its assumption that the domestic price quotes are not accurate or to otherwise obtain any further information to try to verify their reliability, in order to address the agency’s concerns about the potential for “manipulation” which is the basis for the agency’s preference for publicly available data. Similarly, in the course of the remand, notwithstanding the questions raised in
Taian Ziyang,
Commerce apparently took no action to obtain any further information to clarify the extent to which the domestic price quotes in fact reflect “broad market averages” and are sufficiently representative of prices over “a substantial period of time” — specifically, prices over the one-year period that constitutes the period of
a. “Public Availability” and Potential “Manipulation” of Price Quotes
In the Second Remand Determination, Commerce reiterates its preference for “publicly available information,” explaining once again that the purpose underlying that preference is “to reduce the possibility of manipulation.”
See
Second Remand Determination at 43;
see also id.
at 46 (referring to “the potential for manipulation”);
id.
at 76 (same); Def. Response at 7 (referring to “the possibility that ... data has been manipulated”). However, Commerce ignores
Taian Ziyang’s
observation that no party^ — -not even the Domestic Producers — has even alleged, much less adduced any evidence to seek to prove, that the price quotes at issue here are distorted or are the product of any manipulation, or are tainted by any affiliation between the requester of the price quotes and the supplier, or any other potential conflict of interest or collusion.
See Taian Ziyang,
33 CIT at-,
Yet, notwithstanding the points raised in Taian Ziyang, the Second Remand Determination fails to articulate a satisfactory explanation as to why the agency relies on price quotes and other information that is not publicly available in some cases, but not in others (and not in this case). Commerce has pointed to nothing that sets forth — for the benefit of domestic producers and respondents, as well as agency personnel, the courts, and the public at large — clear, established criteria that the agency consistently, uniformly, and systematically applies in determining when price quotes and other information that is not publicly available are acceptable for use in determining surrogate values in NME cases, and when they are not. 26
The Second Remand Determination’s treatment of the issue of the “representativeness” of the domestic price quotes is no more satisfying than its discussion of “public availability.” See GDLSK Comments at 4 (noting, inter alia, that Second Remand Determination “makes the same assertion” of susceptibility to temporary market fluctuations as the Final Results, “without any factual basis”); see generally Second Remand Determination at 43-44, 75-76.
Once again, Commerce simply repeats the Final Results’ broad, generalized pronouncements about the virtues of “surrogate values that reflect broad market averages” and “cover a substantial period of time,” and then reiterates its position that the price quotes here “do not represent broad market averages” and “are not representative of prices throughout the [period of review]” — without even acknowledging the points and questions raised in
Taian Ziyang. See
Second Remand Determination at 43-44, 75-76;
compare
Issues and Decision Memorandum at 39-40 (same);
see generally Taian Ziyang,
33 CIT at —,
In other words, it seems reasonable to assume that some commodities (or factors of production) fluctuate in price, seasonally and/or in response to established market forces such as supply and demand. It is common knowledge, for example, that agricultural produce prices generally tend to fluctuate based on seasonal availability, and that mineral prices may fluctuate in accordance with supply and demand. On the other hand, it is not at all obvious why the price of basic cardboard packing cartons would be subject to appreciable fluctuation over the course of a single year (ie., the period of review). And, contrary to Commerce’s assertions in the Second Remand Determination, it is certainly not obvious why the price of basic cardboard packing cartons would be “highly susceptible” to fluctuation. See Second Remand Determination at 43 -44 (emphasis added); see also Def. Response at 5.
As the “master of antidumping law” and the nation’s institutional repository of expertise in the economics of trade, Commerce cannot here turn a blind eye to the realities of the business world, and make the unreasonable, wooden assumption that the prices of all commodities or factors of production are subject to significant fluctuation over the period of review. Such a blanket presumption defies logic and common sense, and is at odds with the agency’s fundamental obligation “to determine antidumping margins ‘as accurately as possible.’ ”
See, e.g., Jinan Yipin Corp. v. United States,
Where, as here, Commerce admits that there are distortions in the price data that the agency seeks to use, Commerce cannot reasonably rely on mere assumptions alone
(i.e.,
the assumption that non-public price information is the product of manipulation, and the assumption that prices fluctuate significantly over the period of review) to establish that the alternative data are also
5. The Second Remand Determination’s Treatment of the Indian Import Statistics
As outlined above, the Second Remand Determination’s response to
Taian Ziyang’s
analysis of the Final Results’ treatment of the domestic price quotes is far from satisfactory. But, by comparison, the Second Remand Determination’s response to
Taian Ziyang’s
criticisms of the Indian import statistics is all but non-existent. The Second Remand Determination is almost entirely silent on the concerns that
Taian Ziyang
raised as to the serious problems that plague the Indian import statistics on which Commerce relied in the Final Results, and on which the agency continues to rely in the Second Remand Determination.
Compare
Second Remand Determination at 42, 45-46, 75
with Taian Ziyang,
33 CIT at-,
As the GDLSK Plaintiffs correctly point out, the Second Remand Determination “offers absolutely no new information or explanation as to why [Commerce’s] continued use of the[] unrepresentative import prices should be found reasonable.”
See
GDLSK Comments at 5;
see also
GDLSK Reply Comments at 2-3 (same). Nothing in the Second Remand Determination responds to the concerns expressed in
Taian Ziyang
about the Indian import statistics’ lack of product specificity.
See Taian Ziyang,
33 CIT at-,-,
Similarly, nothing in the Second Remand Determination responds to the concerns expressed in
Taian Ziyang
about the am freight costs reflected in the values derived from the Indian import statistics on which Commerce relies.
See Taian Ziyang,
33 CIT at-,
The entirety of the Second Remand Determination’s defense of the Indian import statistics amounts to a series of conclusory assertions (discussed in greater detail below), coupled with Commerce’s broad claim that “it is within [the agency’s] discretion to choose Indian import data ... over domestic, respondent-submitted price quotes.”
See
Second Remand Determination at 44. To be sure, Commerce enjoys broad discretion in valuing factors of production and ascertaining the “best available information.”
See, e.g., Shakeproof
In an attempt to support its claim that “it is within [Commerce’s] discretion to choose Indian import data ... over domestic, respondent-submitted price quotes,” the Second Remand Determination cites two authorities — Synthetic Indigo from the PRC, and
Jinan Yipin II. See
Second Remand Determination at 44-46 (discussing Synthetic Indigo from the PRC, 68 Fed.Reg. at 53,711, and
Jinan Yipin Corp. v. United States,
33 CIT-, -,
The Second Remand Determination’s citation of Synthetic Indigo from the PRC brings nothing new to the analysis in this case. As section III.E.l above notes, Synthetic Indigo was discussed in both the Final Results and in
Taian Ziyang. See
Issues and Decision Memorandum at 40;
Taian Ziyang,
33 CIT at -,
In an effort to defend the agency’s reliance on the Indian import statistics, Commerce and the Government seek to cast the case at bar as a case where the agency is confronted with a choice between two imperfect sets of data. See, e.g., Second Remand Determination at 44 (arguing that “it is within [Commerce’s] discretion to choose between two imperfect data sources”). 36 But that is not an accurate depiction of the current state of the administrative record here.
Commerce candidly admits that the Indian import statistics are “imperfect”— that is, that the import statistics reflect inflated values as a surrogate for the input in question here — both because the import statistics include more expensive gift and specialty boxes that are unlike the basic cardboard packing cartons used by the Chinese garlic producers in this case (such that the import statistics are not “product
Simply stated, Commerce here has chosen admittedly distorted data over data that the agency speculates may be potentially distorted. Or, to state it a little differently, Commerce here has chosen admittedly distorted Indian import statistics over potentially “perfect” price quotes. And Commerce apparently has done so without conducting any analysis (not even a qualitative analysis, much less a quantitative one) to determine the extent of the actual distortion of the import statistics, for comparison to the extent to which (according to Commerce) the domestic price quotes might potentially be distorted. As such, Commerce’s choice of the Indian import statistics over the domestic price quotes is not rational and lacks any basis in the record.
Other than Commerce’s claim that the choice between import statistics and domestic price quotes is a matter of agency discretion, all that remains of the Second Remand Determination’s defense of its decisión to rely on the Indian import statistics in this case is a series of unsupported, conclusory assertions about the shortcomings of the domestic price quotes, and the relative merits of the two sets of data. The Second Remand Determination states, for example, that Commerce “considers the problems inherent with price quotes, and the specific deficiencies of the price quotes submitted for this review ... to be far more problematic” than the Indian import data. See Second Remand Determination at 46 (emphasis added). To the same effect, elsewhere in the Second Remand Determination Commerce states that, “[a]s long as there are other data sources on the record that, overall, better meet [Commerce’s] criteria ..., [Commerce] is obliged to use the better data source over price quotes as a surrogate value.” See id. at 45 (emphases added). The two statements, on their face, purport to be comparisons of the relative merits of the domestic price quotes versus the Indian import statistics. However, as discussed above, the record is devoid of any true comparative analysis of the two sets of data. Indeed, a line-by-line review of both the Second Remand Determination and the Final Results reveals that there is no basis whatsoever in the record for Commerce’s statements.
The Second Remand Determination similarly reiterates the Final Results’ determination that the Indian import statistics “are the
best available information
with which to value ... cartons in this proceeding.” See Second Remand Determination at 76 (emphasis added); see
also id.
at 46 (stating that Commerce “continues to find the import statistics to be the
best available information
”) (emphasis added); Is
Finally, as outlined above, Commerce’s assertion that the situation here involves a choice between two “imperfect” sets of data does not fairly depict the administrative record as it currently stands; and it is more accurate at present to describe the two competing sources of information as admittedly distorted Indian import statistics versus potentially accurate domestic price quotes. But even if the record established conclusively that the price quotes were “imperfect,” Commerce’s Second Remand Determination nevertheless still could not be sustained.
Commerce is not permitted to select a surrogate value by default. In other words, the agency cannot justify its selection of one data source (¿a, the Indian import statistics) merely by pointing to asserted problems with the other data source
(i.e.,
the domestic price quotes). As the GDLSK Plaintiffs correctly observe, Commerce “cannot support its findings merely by citing the perceived shortcomings of the value [that] it rejected while largely ignoring the infirmities of the value [that] it did select.”
See
GDLSK Reply Comments at 5 (citation omitted). “Commerce’s analysis must do more than simply identify flaws in the data sets it rejects.”
Guangdong Chems. Imp. & Exp. Corp. v. United States,
Thus, contrary to the implications of Commerce and the Government, the agency is not free to simply choose at will between imperfect sets of data.
See
Sec
6. Additional Issues
As explained above in the introduction to section III, Policy Bulletin 04.1 outlines certain criteria that Commerce considers in determining the “best available information” to use in determining surrogate values. See, e.g., Second Remand Determination at 42; section III, supra. Specifically, Policy Bulletin 04.1 reflects Commerce’s preference for the use of “investigation or review period-wide price averages [‘representativeness’], prices specific to the input in question [‘product specificity’], prices that are net of taxes and import duties, prices that are contemporaneous with the period of investigation or review [‘contemporaneity’], and publicly available data.” See Policy Bulletin 04.1. There are, however, several flaws in the way that Commerce and the Government have applied the criteria set forth in Policy 04.1 in determining a surrogate value for cardboard cartons in this case.
For example, the Government states in its brief that the Indian import statistics are the “best available information” for use in valuing cardboard cartons because the import statistics “met more of Commerce’s surrogate value selection criteria.” See Def. Response at 5. The Government thus seems to suggest that the Indian import statistics constitute the “best available information” because — according to Commerce — the import statistics are “publicly available, contemporaneous with the [period of review], representative of a range
of
prices throughout the [period of review], and sufficiently specific to the product” (and therefore, according to Commerce, satisfy
four
criteria), while the domestic price quotes (although contemporaneous and more “product specific” than the im
An even more serious flaw seems to pervade the Second Remand Determination, as well as the Final Results. Just as the Government errs to the extent that it suggests that the “best available information” in a case is necessarily the data source that satisfies the most criteria, it appears that Commerce errs in according equal weight to each of the criteria — or, at least, in giving far too little weight to “product specificity.” All of the criteria outlined in Policy Bulletin 04.1 may be important. But they are not equally important. As a matter of pure logic, first among them must be “product specificity” (or, in the parlance of the Policy Bulletin, “prices specific to the input in question”).
To illustrate the point with an extreme example, Commerce here could not reasonably base its surrogate value for cardboard packing cartons on Indian import statistics for fishing rods (for instance),
42
even if those import statistics — in the words of Policy Bulletin 04.1 — unquestionably reflected “review period-wide price averages” and were indisputably “publicly available data” that were fully “contemporaneous with the period of ... review” and “net of taxes and import duties.” Commerce could not do so because, even if the Indian import statistics for fishing rods were absolutely perfect in every other way, the import statistics would not be sufficiently “product specific.” On the other hand, Commerce in the past has, on occasion, relied on data that were, for example, not “contemporaneous with the period of ... review,” or that did not satisfy some other criterion set forth in Policy Bulletin 04.1.
See, e.g., Sichuan Changhong Elec. Co. v. United States,
In sum, “product specificity” logically must be the primary consideration in determining “best available information.” If a set of data is not sufficiently “product specific,” it is of no relevance whether or not the data satisfy the other criteria set forth in Policy Bulletin 04.1.
See, e.g., Hebei Metals & Minerals Imp. & Exp. Corp. v. United States,
As noted above, the Second Remand Determination asserts that the Indian import statistics here are “sufficiently specific to the product” — that is, “sufficiently specific” to the basic cardboard packing cartons used by the Chinese producers.
See
Second Remand Determination at 46;
see also
Issues and Decision Memorandum at 38, 40 (same). However, neither the
Another significant underlying issue in this case is the parties’ respective burdens of proof. The Government argues that the GDLSK Plaintiffs bear the burden of “providfing] record evidence establishing that the price quotes met Commerce’s selection criteria for surrogate values.”
See
Def. Response at 6
(citing NTN Bearing Corp. v. United States,
The general principle that the respondent bears the burden of proof in no way relieves Commerce of the requirements that it value factors of production based on the “best available information” and that it establish antidumping margins “as accurately as possible.”
See Ningbo,
In sum, a respondent is not absolved of the responsibility to make the case for the set of data that it favors. Thus, the GDLSK Plaintiffs here cannot wash their hands of all responsibility to adduce evidence showing that the domestic price quotes are not the product of manipulation and that they are generally representative of prices throughout the period of review. But, at the same time, Commerce’s “core investigatory duties” require the agency to demonstrate affirmatively that each surrogate value that it selects satisfies the agency’s statutory obligations to value factors of production based on the “best available information” and to establish antidumping margins “as accurately as possible,” by providing a reasoned explanation for the agency’s determination, anchored by substantial evidence in the administrative record.
See Hebei Metals II,
Here, it is not at all clear how Commerce can establish that the Indian import statistics are the “best available information” if there are serious unanswered questions about the extent to which the import statistics are distorted by the inclusion of gift and specialty boxes and other products that are not comparable to the cardboard packing cartons at issue and about the extent to which the import statistics are distorted by the inclusion of charges for air freight. Similarly, depending on the extent of the distortion reflected in the Indian import statistics, Commerce may or may not be able to establish that the Indian import statistics are the “best available information” without determining whether, in fact, the domestic price quotes were the product of manipulation and the extent to which they are representative of prices
7. Conclusion
As detailed above, and as discussed at greater length in
Taian Ziyang,
Commerce has failed to adequately explain the agency’s determination that the Indian import statistics constitute the “best available information” for use in calculating the surrogate value of basic cardboard packing cartons, in light of the acknowledged infirmities in the import statistics. Nor has Commerce adequately explained why the Indian import statistics are preferable to the domestic price quotes, the other source of information on the existing record.
See generally State Farm,
Because the Second Remand Determination’s treatment of the valuation of cardboard packing cartons simply recycles the arguments that Commerce made in its Final Results, the GDLSK Plaintiffs urge “that this issue be remanded to Commerce
On remand, Commerce shall reopen the record to evidence concerning the domestic price quotes and the Indian import statistics (as well as alternative sets of data, if any, that may be appropriate). Commerce shall accept further evidence from the GDLSK Plaintiffs, in addition to any information that the agency wishes to place on the record; and Commerce shall allow the GDLSK Plaintiffs sufficient time to submit further evidence, to respond to any information that the agency may place on the record, and to provide comments on the agency’s draft results of the remand.
F. Valuation of Plastic Jars and Lids
In
Taian Ziyang,
the GDLSK Plaintiffs prevailed on their challenge to the Final Results’ surrogate valuation of the plastic jars and lids used to pack garlic, on grounds that parallel the rationale on which the GDLSK Plaintiffs prevailed on cardboard packing cartons (discussed above) in several key respects.
See generally Taian Ziyang,
33 CIT at-,-, -,
As
Taian Ziyang
explained, the Final Results valued plastic jars and lids using a surrogate value derived from WTA import statistics for two broad “basket” provisions of the Indian HTS — specifically, HTS subheading 3923.3000 (covering “carboys, bottles, flasks and similar plastic items”) and HTS subheading 3923.5000 (covering “stoppers, lids, caps and other closures of plastics”).
See Taian Ziyang,
33 CIT at -, -,
The Final Results rejected the domestic price quotes because they assertedly do not constitute “publicly available information” and are not contemporaneous with the period of review,
46
and because, according to Commerce, they do not “reflect broad market averages and ... cover a substantial period of time throughout the [period of review]” and thus, Commerce suggests, may reflect “temporary market fluctuations.”
See
Issues and Decision Memorandum at 41-43;
see also Taian Ziyang,
33 CIT at-,
Taian Ziyang
analyzed all of the grounds cited in the Final Results as a basis for rejecting the domestic price quotes, and found each of them lacking. As to the public availability of the price quotes,
Taian Ziyang
noted that — as with the administrative record .on cardboard packing cartons — the administrative record on plastic jars and lids includes “no evidence whatsoever to suggest that [the price quotes obtained by the GDLSK Plaintiffs] were in any way subject to manipulation or tainted by affiliation.”
See Taian Ziyang,
33 CIT at -,
In addition,
Taian Ziyang
explained that, although the domestic price quotes for plastic jars and lids fall well outside the period of review, “[t]he contemporaneity of data is not as critical as Commerce has suggested in this case.”
See Taian Ziyang,
33 CIT at-,
Taian Ziyang
also questioned the Final Results’ emphasis on “representativeness.”
Taian Ziyang
reiterated that, while a preference for price data reflecting a substantial period of time (rather than data from a shorter period of time) may be reasonable where Commerce is deciding between two equally accurate surrogate values, the overall “calculus” is different where — as here — the data that are assertedly more “representative” are plagued with other infirmities.
See Taian Ziyang,
33 CIT at-,
Taian Ziyang
recognized that “[n]o doubt the various concerns that Commerce outlined in the Final Results diminish, at least to some limited extent, the utility of the domestic Indian price quotes for jars and lids.”
See Taian Ziyang,
33 CIT at -,
Specifically,
Taian Ziyang
noted that, besides failing to acknowledge Commerce’s well-established general preference for domestic data over import statistics, the Final Results on plastic jars and lids (much like the Final Results on cardboard packing cartons) similarly failed to adequately address the fact that the Indian import statistics for plastic jars and lids not only are not “product specific,” but, moreover, capture products that are imported by air.
See generally Taian Ziyang,
33 CIT at -,
Taian Ziyang
concluded that the Final Results both “failed to adequately explain how the admittedly non-representative Indian import statistics constituted the ‘best available information,’ particularly in light of the availability of product-specific, domestic Indian price quotes for plastic jars and lids comparable to those actually used [by the Chinese producers] in this case,” and, in addition, failed to “support [Commerce’s] selection of the Indian import statistics by reference to substantial evidence in the record.”
See Taian Ziyang,
33 CIT at --,
Regrettably, much like the Second Remand Determination’s treatment of cardboard packing cartons (discussed above), the Second Remand Determination’s treatment of plastic jars and lids does virtually nothing to advance the ball. See generally Second Remand Determination at 46-50, 76-78; GDLSK Comments at 9-14; GDLSK Reply Comments at 6-7; see also section III.E, supra (analyzing Second Remand Determination on cardboard packing cartons). On remand, Commerce reiterated its determination that the Indian import statistics are the “best available information” for use in valuing the GDLSK Plaintiffs’ plastic jars and lids. See Second Remand Determination at 50, 78. However, as the GDLSK Plaintiffs correctly observe, “[similar to the valuation of cartons, Commerce’s Remand Re-determination [on plastic jars and lids] ignores the Court’s instructions [in Taian Ziyang ] and simply repeats the same reasoning previously found to be unpersuasive by the Court.” See GDLSK Comments at 10; see also id. at 13-14 (same); GDLSK Reply Comments at 6 (same).
There is no need to here restate in full the critique of the Second Remand Determination’s treatment of cardboard packing cartons that is set forth above, which applies to the Second Remand Determination’s treatment of plastic jars and lids with equal force.
See generally
section
While the Second Remand Determination paraphrases the Final Results’ criticisms of (and says little else about) the domestic price quotes, it is virtually mum on the serious flaws in the Indian import statistics that were detailed in
Taian Ziyang. Compare
Second Remand Determination at 46-50, 76-78
and Taian Ziyang,
33 CIT at -, -,
Similarly, nothing in the Second Remand Determination responds to the concerns expressed in
Taian Ziyang
about the air freight costs reflected in the values derived from the Indian import statistics on which Commerce relies.
See Taian Ziyang,
33 CIT at-,
The Second Remand Determination candidly concedes (as it must) that — like the Indian import statistics for cardboard cartons — the Indian import statistics on plastic jars and lids are “imperfect.” See Second Remand Determination at 49-50, 77. In other words, the Second Remand Determination admits that the Indian import statistics reflect inflated values as a surrogate for the plastic jars and lids at issue here — both because the import statistics “include a broad range of products that are different from the plastic jars used to pack garlic,” and because the import statistics “include! ] products that, unlike those the GDLSK [Plaintiffs] used, were shipped by air.” See id. at 77; see also id. at 49-50 (same). 51
On the other hand, apart from Commerce’s previously expressed concern about differentiating between price quotes for lids and price quotes for jars (which the agency apparently has now resolved),
52
In sum, here — as with the cardboard packing cartons — Commerce continues to choose admittedly distorted data over data that the agency speculates may be potentially distorted. Or, to make the point slightly differently, Commerce continues to choose admittedly distorted Indian import statistics over potentially “perfect” price quotes. And, as with cardboard packing cartons, Commerce apparently made its decision on jars and lids without conducting any analysis (not even a qualitative analysis, much less a quantitative one) to ascertain the extent of the actual distortion of the import statistics, for comparison to the extent to which (according to Commerce) the domestic price quotes might potentially be distorted. As such, the Second Remand Determination’s conclusions that the Indian import statistics are “sufficiently specific” and constitute the “best available information” for use in valuing plastic jars and lids are unexplained, are not rational, and lack any sound basis in the existing administrative record, and therefore cannot be sustained. See Second Remand Determination at 50, 78.
The GDLSK Plaintiffs contend that this issue should be “remanded ... to Commerce with instructions to use the domestic price quotes for the valuation of jars and lids.” See GDLSK Comments at 14. Instead, much like cardboard packing cartons, the issue will be remanded for further consideration not inconsistent with the analysis herein and in Taian Ziyang, and with the caution that no further remands are likely.
On remand, Commerce shall reopen the record to evidence concerning the domestic price quotes and the Indian import statistics (as well as alternative sets of data, if any, that may be appropriate). Commerce shall accept further evidence from the GDLSK Plaintiffs, in addition to any information that the agency wishes to place on the record; and Commerce shall allow the GDLSK Plaintiffs sufficient time to submit further evidence, to respond to any information that the agency may place on the record, and to provide comments on the agency’s draft results of the remand.
G. Valuation of Ocean Freight
Taian Ziyang
sustained the GDLSK Plaintiffs’ challenge to the surrogate value that Commerce calculated for the respondent Chinese producers’ ocean freight costs, which was based on rate quotes taken from the website of Maersk Sealand for shipment in refrigerated containers.
Taian Ziyang
therefore remanded the matter to the agency, with instructions
to
reconsider the issue.
See generally Taian Ziyang,
33 CIT at-, -, -,
Taian Ziyang
noted that the Chinese Producers placed two alternative sources of data on the administrative record. One data set consists of public versions of the actual market economy ocean freight rates paid by two of the Chinese Producers (specifically, Harmoni and Linshu Dading) that made multiple shipments using a number of different market economy carriers throughout the period of review.
See Taian Ziyang,
33 CIT at -, -,
In the Final Results, Commerce stated that the Maersk data were the “best available information,” asserting that they were “the only publicly-available information to value ocean freight” on the administrative record.
See Taian Ziyang,
33 CIT at -,
As
Taian Ziyang
observed, however, the Maersk rates are significantly inflated, (1) by “the Qingdao-to-Hong Kong-to-U.S. shipping route that no respondent in this review actually used” and (2) by “the significant ‘inland arbitrary charges’ ” — a charge of $1200 per container, also known as the “PRC arbitrary charge,” that is imposed on cargo that is transported through Hong Kong — “that no respondent in this review actually incurred.”
See Taian Ziyang,
33 CIT at- & n. 71,
Taian Ziyang
further observed that Commerce’s grounds for rejecting the two alternative data sources were “just as flawed as the agency’s bases for selecting the Maersk data” for use in the Final Results.
See Taian Ziyang,
33 CIT at -,
To the extent that Commerce expressed concern about the “public availability” of the Descartes data,
Taian Ziyang
pointed out that ocean freight carriers use the Descartes database for the express purpose of complying with a Federal Maritime Commission (“FMC”) regulation that requires all carriers to maintain
a public record
of their actual tariff rates for all routes.
See Taian Ziyang,
33 CIT at -,
Taian Ziyang
similarly criticized Commerce’s rejection of the publicly available “ranged” versions of the actual rates paid by the two Chinese Producers.
Taian Ziyang
noted that, contrary to the Government’s claim that Commerce has “consistently” used Maersk rates in cases like this in the past, the agency in fact used publicly available “ranged” rates (rather than Maersk data) in the administrative review immediately preceding the review at issue here.
See Taian Ziyang,
33 CIT at-,
Taian Ziyang concluded that, in the Final Results:
Commerce ... failed to adequately explain its reliance on the Maersk data as the “best available information,” or to justify its selection of those data by reference to substantial evidence in the record, particularly in light of indications that the Maersk data reflect a route that no respondent used, that the Maersk data reflect additional charges that no respondent incurred, that the Maersk data are limited to a single freight carrier, and that — unlike the other rates available on the record — the Maersk data are not specific to the shipment of fresh garlic. Commerce similarly failed to adequately consider the alternative sources of data on the record.
Taian Ziyang,
33 CIT at -,
On remand following Taian Ziyang, Commerce re-evaluated all three sets of data on the record — that is, the Maersk data, the Descartes data, and the publicly available “ranged” data on the prices paid by two of the Chinese Producers — and determined that “the best available information with which to value ocean freight is price data obtained from the Descartes database for routes between [China] and both the East and West coasts of the United States.” See Second Remand Determination at 50-51; see generally id. at 50-53, 78-79.
In the course of the remand, Commerce learned that government agencies may access the Descartes database without charge, assuaging the agency’s earlier concerns about its ability to verify the Descartes data. See Second Remand Determination at 51. In addition, the Second Remand Determination notes that “the Descartes routes avoid Hong Kong altogether, and, as such, ... are free of any additional fees or charges not incurred by respondents.” See id. The Second Remand Determination concedes that the Descartes data therefore “are based on routes that more closely correspond to those used by respondents,” as compared to the Maersk data on which the agency relied in the Final Results. See id. The Second Remand Determination also notes that the Descartes data are specific for refrigerated garlic, and that they reflect “a broad based market rate” because they “reflect rates for multiple carriers” and “for every month throughout the [period of review].” See id. at 51-52.
In the Second Remand Determination, Commerce acknowledges that — contrary to its findings in the Final Results — “the Maersk data are not sufficiently specific to the shipment of fresh garlic” and do not “reflect a broad based market rate,” because “Maersk provides a general cargo rate from only a single carrier without any indication as to the type of cargo being shipped.” See Second Remand Determination at 51-52. The Second Remand Determination further recognizes that, as Taian Ziyang emphasized, the Maersk data includes “a Qingdao-to-Hong Kong-to-U.S. route and the accompanying ‘PRC arbitrary fee,’” both of which inflate the Maersk rates. See id. at 52. Commerce determined that, because the Descartes data constitute “a publicly available source for ocean freight rates ... that features routes more representative of those used by respondents,” there is “no need to resort to the Maersk data to value ocean freight” here. See id. Commerce thus concluded that, given “the public availability, contemporaneity, and representativeness of the Descartes data, ... the lack of specificity in the Maersk data leaves the Descartes database as the best source on the record for ocean freight surrogate values.” See id.
In the Second Remand Determination, Commerce continues to decline to use the
Having found the Descartes data to be “publicly available, specific to the costs incurred by respondents, and contemporaneous with the period of review,” Commerce concludes in its Second Remand Determination that “there is no need to resort to the use of the ranged data from other respondents.” See Second Remand Determination at 53; see also id. at 78-79. No party has filed comments on Commerce’s Second Remand Determination on this issue.
Because Commerce’s redetermination on remand is consistent with Taian Ziyang, and is supported by substantial evidence and otherwise in accordance with law, the Second Remand Determination on the valuation of ocean freight costs must be sustained.
IV. Conclusion
For all the reasons set forth above, Commerce’s Second Remand Determination is sustained as to the surrogate value for garlic seed for the GDLSK Plaintiffs and FHTK, the surrogate value for irrigation costs for the GDLSK Plaintiffs and Dong Yun, the surrogate value for Dong Yun’s land lease costs, and the surrogate value for the GDLSK Plaintiffs’ ocean freight expenses. In contrast, Commerce’s valuation of cardboard packing cartons and plastic jars and lids for the GDLSK Plaintiffs must be remanded to the agency for further action not inconsistent with this opinion; and, in accordance with the Government’s request for a voluntary remand on the issue, the surrogate value for the labor expenses of the GDLSK Plaintiffs and Dong Yun must also be remanded.
A separate order will enter accordingly.
Notes
.The Government was granted a voluntary remand at the outset of this action, to give Commerce the opportunity to correct its omission of certain data from its labor wage rate calculation.
See Taian Ziyang,
33 CIT at -,
. All citations to federal statutes are to the 2000 edition of the United States Code. Similarly, all citations to federal regulations are to the 2002 edition of the Code of Federal Regulations.
. In the Amended Final Results, Commerce corrected certain ministerial errors.
See Tai
. The sole issue that Ziyang raised in this action was its challenge to Commerce’s use of "adverse facts available,” which was resolved in favor of the Government in
Taian Ziyang. See Taian Ziyang,
33 CIT at-, ■-■,
. Plaintiffs Ziyang, FHTK, and Dong Yun filed no comments on the Second Remand Determination at issue here. The domestic producers of fresh garlic who intervened as defendant-intervenors — the Fresh Garlic Producers Association, and its individual members Christopher Ranch, L.L.C., The Garlic Company, Valley Garlic, and Vessey and Compa
. In addition, in certain market economy cases, Commerce may calculate normal value using the price in a third country
(i.e.,
a country other than the exporting country or the United States).
See, e.g., RHP Bearings Ltd. v. United States,
. Factors of production “include, but are not limited to ... hours of labor required, ... quantities of raw materials employed, ... amounts of energy and other utilities consumed, and ... representative capital cost, including depreciation."
See
19 U.S.C. § 1677b(c)(3);
see also Dorbest Ltd. v. United States,
.The stated purpose of Policy Bulletin 04.1 is to "provide[] guidance regarding [Commerce's] selection of surrogate market economy countries in non-market economy ('NME') cases.”
See
Policy Bulletin 04.1, at “Statement of Issue.” The language on which Commerce relies in this and many other cases appears in a section captioned “Data Considerations.”
See
Policy Bulletin 04.1, at "Data Considerations.” The policy bulletin expressly states that the criteria outlined in that section are for Commerce's use in winnowing the agency’s list of potential surrogate countries "if more than one country has survived the selection process to this point”
(i.e.,
if more than one country on the list of potential surrogates are economically comparable, produce comparable merchandise, and are “significant” producers of such merchandise).
Id.
Thus, the policy bulletin explains, “a country that perfectly meets the requirements of
In short, the criteria outlined in the section of Policy Bulletin 04.1 captioned "Data Considerations” were developed to serve as a "tie-breaker,” if necessary, in Commerce's identification of a surrogate country. The criteria were not promulgated for the purpose of guiding Commerce’s selection from among alternative data sources after a surrogate country has been identified. Nevertheless, Commerce has used the criteria for that purpose here and in many other cases.
. Because this action has twice been remanded to Commerce, three administrative records have been filed with the court: the initial administrative record (comprised of the information on which the agency's Final Results were based), the supplemental administrative record compiled in the course of the first remand, and the supplemental administrative record compiled in the course of the most recent remand (i.e., the remand following Taian Ziyang).
Because confidential information is included in the administrative records, there are two versions of each: a public version and a confidential version. The public versions of the administrative records consist of copies of all documents in the record, with confidential information redacted. The confidential versions of the administrative records consist of complete, unredacted copies of only those documents that include confidential information. All citations to the administrative records herein are to the public versions, which are cited as “Admin. Record Pub. Doc.-,” “First Remand Pub. Doc.-,” and “Second Remand Pub. Doc.-,” respectively.
.
The World Trade Atlas is "a database of commodities using all levels of the Harmonized Tariff Schedule,” which "enables users to determine the value of a specific product and identify countries to or from which the product is being exported or imported.”
See Zhengzhou Harmoni Spice Co. v. United States,
33 CIT-,-n. 20,
. Commerce also expressed other concerns about the Indian import statistics, asserting that the administrative record is devoid of "any substantive information [on] the manner in which such garlic is shipped [into India], be it as whole bulbs or loose cloves,” as well as lacking in information concerning "the quality, size, or number of cloves in the garlic imports from the market economy countries” reflected in the Indian import data. See Second Remand Determination at 7. But Commerce's statement appears to be somewhat at odds with the administrative record as it now exists.
As discussed in greater detail below, in the course of the most recent remand, Commerce placed on the record of this proceeding a Market Research Report compiled by the Domestic Producers, which was previously submitted for inclusion in the records of the eighth and tenth administrative reviews. See Second Remand Determination at 5; Market Research Report on Fresh Whole Garlic in India (June 2003) (Second Remand Pub. Doc. 2) ("Market Research Report”). The Market Research Report expressly states (in bold) that "[i]t should be noted that garlic is imported [into India] in bulb form itself (i.e., not cracked).” See Market Research Report at 27. Thus, contrary to Commerce's assertion, the administrative record in this action in fact now does include some “substantive information [on] the manner in which ... garlic is shipped” into India — and the agency either overlooked or ignored that information in its Second Remand Determination.
Commerce was criticized for essentially these same failings in a related case concerning the same antidumping duty order. During the eighth administrative review, Commerce placed on the record the same Market Research Report at issue here for the very same purpose — that is, to prove the physical characteristics of the NHRDF garlic varieties and thus to demonstrate product-specificity.
See Jinan Yipin Corp. v. United States,
Nevertheless, Commerce’s ultimate conclusion is not undermined. Reading between the lines of the Second Remand Determina
.
See also Zhengzhou Harmoni,
33 CIT at -,
. Although Commerce’s overall analysis appears to rely upon the NHRDF price information for three varieties of garlic (i.e., the Agrifound Parvati, Yamuna Safed-3, and Agrifound White varieties), Commerce's conclusion expressly mentions only "the typical bulb diameter of the Agrifound Parvati and Yamuna Safed-3 high yield garlic varieties,” omitting reference to the Agrifound White variety. Compare Second Remand Determination at 4 and id. at 7. However, Commerce’s conclusion also states that the bulb diameters of the relevant NHRDF varieties range from "3.5 to 6.5 cm.” See id. According to the Market Research Report, the typical bulb diameters of the Agrifound Parvati and the Yamuna Safed-3 varieties are 50 to 65 millimeters and 50 to 60 millimeters, respectively, while the typical bulb diameter of the Agrifound White variety is 35 to 45 millimeters. See Market Research Report at 14-15. Thus, Commerce's conclusion apparently addressed the Agrifound White variety (which has a bulb diameter of 35 to 45 millimeters), even if the agency failed to mention that variety in its conclusion.
. The undisputed record evidence on expenses incurred for irrigation in India included (1) information provided in a letter and exhibit submitted by Dong Yun indicating “that Indian companies do not have to pay for irrigation water drawn from their own wells”; (2) a 1995 World Bank study "showing that [Indian] farmers who pump water from their own wells do not pay for the water they use to irrigate their crops”; (3) a 2001 statement from the International Water Management Institute ("IWMI”) indicating that, as of that time, "in the Indian province of Uttar Pradesh, farmers that own their own wells do not pay for water to irrigate their land, and that self-owned wells are the largest source of water” in that province; (4) excerpts from the IWMI Annual Report (2000-01) stating that "India is one of the largest users of groundwater (wells), and that the use of groundwater (from wells) is uncontrolled and unregulated”; (5) an excerpt from a book on rural development (Krishna, Uphoff, & Esman, eds., Reasons for Hope: Instructive Experiences in Rural Development (West Hartford, CT: Kumarian, 1996)) explaining that "most irrigation in India is performed by wells that are fed by rainwater”; and (6) a statement from the office of the Agriculture Attache at the U.S. Embassy in New Delhi, stating that “Indian farmers who use water from their own wells do not pay any fee for it.” See Second Remand Determination at 14.
On remand, Commerce also reviewed the surrogate financial statements, and determined that they were of no assistance in "determining] the irrigation practices of ... Indian farmers” or in “ascertaining] whether or not separately valuing water ... would result in double counting this expense.” See Second Remand Determination at 14-15.
. In the most recent remand, Commerce used a somewhat updated version of the regression-based methodology that it had previously employed in this administrative review, pursuant to the agency's so-called "Revised Methodology Notice.” See Second Remand Determination at 17 n. 18; Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 Fed.Reg. 61,716, 61,719-23 ("Revised Methodology Notice”). Among other things, while the prior methodology considered a total of six years of wage data, the revised methodology considered only two years of data, in an effort to enhance the accuracy of Commerce's calculation of non-market economy wages. See Revised Methodology Notice, 71 Fed.Reg. at 61,721; see also Second Remand Determination at 17 n. 18.
.
Dorbest
did not completely foreclose Commerce’s use of data from countries that are not economically comparable and/or are not significant producers of the subject merchandise. The Court of Appeals explained that, if Commerce were to "show in an appropriate situation that using the data Congress has directed Commerce to use is impossible,” then "Commerce would be free to use whatever data it felt were appropriate to use to determine labor rates, presuming that Commerce remained within the bounds of 19 U.S.C. § 1677b(c)(l), which requires Commerce to use the ‘best available information regarding the values of the factors of production.”
See Dorbest,
. As a practical matter, public data simply may not be available for all factors of production. In
Vinh Quang,
for example, the domestic producers submitted two price quotes, explaining that they were "unable to obtain public prices for [the input at issue] because that item is not widely traded in commercial markets."
See Vinh Quang Fisheries Corp.
v.
United States,
33 CIT -, -,
. As
Taian Ziyang
explained, "Infodrive India is a service that 'compiléis] and disseminate[s] official import statistics.’ ”
Taian Ziyang,
33 CIT at-n. 56,
Although Commerce’s Second Remand Determination states that the trade intelligence data was drawn from Eximkey.com, the documentation submitted by the GDLSK Plaintiffs indicates that the information was taken from Infodrive India.
Compare
Second Remand Determination at 42
with
GDLSK Respondents' Second Surrogate Value Submission (Admin. Record Pub. Doc. 258), Exh. 2;
see also Taian Ziyang,
33 CIT at -,
.
Taian Ziyang
explained that, ‘'[m]uch as in
Yantai Oriental,”
it is difficult to fathom (and Commerce has failed to explain) “why the [Chinese producers] would have used imported packing cartons (much less cartons imported by air), when such basic packaging materials were available domestically.”
See Taian Ziyang,
33 CIT at-,
Relying on
Hebei Metals II, Taian Ziyang
explained that Commerce’s policy favoring the use of domestic data (rather than import statistics) is " ‘most appropriate where [■ — as here — ] the circumstances indicate that a producer in a hypothetical market would be unlikely to use an imported factor in its production process.’ ”
See Taian Ziyang,
33 CIT at -,
.
But see
Issues and Decision Memorandum at 40 (acknowledging that "the price quotes fall within the [period of review]”);
Taian Ziyang,
33 CIT at--n. 57,
. The Government's brief does not repeat Commerce's erroneous statement as to the contemporaneity of the four price quotes; but it also makes no effort to acknowledge or seek to correct the error either.
See
Def. Response at 3-13. Only at oral argument did the Government acknowledge that the four price quotes in fact are contemporaneous with the period of review, and that the Second Remand Determination’s statements to the con
Interestingly, in the previous stage of the proceeding, although Commerce’s Final Results correctly noted that the four price quotes are contemporaneous, the Government’s brief incorrectly stated that they were not.
See Taian Ziyang,
33 CIT at -- n. 57,
. In the case at bar, for example, Commerce’s determination of a surrogate value for jars and lids (like its determination of a surrogate value for cardboard cartons) involves a choice between domestic price quotes and Indian import statistics. But, unlike the price quotes for cardboard cartons, the price quotes for jars and lids are somewhat outside the period of review.
See Taian Ziyang,
33 CIT at -,
Commerce's error in the Second Remand Determination concerning the contemporaneity of the four price quotes here raises the possibility that the agency may not be exercising sufficient care to consider each issue and each case separately and independently, on its unique facts. To be sure, the rule of law requires predictability, consistency, and uniformity in decisionmaking, and that similar cases be decided similarly. However, the rule of law also requires that Commerce take pains to ensure that each issue in each case is decided on the specific facts on the record of that case. "Cut-and-paste” decisionmaking and “cookie cutter” justice are not permissible.
. Like the Final Results, the Second Remand Determination too made no reference to Commerce’s general preference for the use of domestic data, rather than import statistics, which was discussed in
Taian Ziyang. See Taian Ziyang,
33 CIT at - & nn. 60-61,
. It is, of course, the Domestic Producers that have the incentive to challenge the price quotes if they are not accurate. Presumably, if the price quotes did not fairly reflect the price of cardboard packing cartons throughout the period of review, the Domestic Producers would be the first to say so. Significantly, however, although the Domestic Producers placed the Indian import statistics on the record of this proceeding, they have not sought to present any evidence suggesting that the domestic price quotes on the record were manipulated or are in any way not representative. Nor have the Domestic Producers ever made any such claims. It is also telling that the Domestic Producers have not briefed this issue before the Court — not even in the prior stage of the proceeding.
See Taian Ziyang,
33 CIT at- n. 55,
Finally, the very nature of the four domestic price quotes at issue here should serve to assuage, at least to some degree, Commerce’s concerns about "manipulation.” If one were inclined to forge or manipulate price data, presumably one would produce data that were more clearly decisive — in other words,
. See Second Remand Determination at 46 (referring to "the problems inherent with price quotes” in general).
. Like the Final Results, the Second Remand Determination includes a laundry list of documentation that Commerce purports to require to establish the reliability of price quotes— documentation that apparently is missing from the record here. Compare Issues and Decision Memorandum at 39 with Second Remand Determination at 42-43 (faulting lack of "information detailing the requestor of the price quotes and ... information on the companies providing the price quotes,” lack of information indicating whether the price quotes were “prepared specifically upon request and not generated in response to a request made by the GDLSK respondents in the normal course of business,” lack of "information as to the relationship between the GDLSK respondents and the providers of the price quotes,” lack of "information about who requested the price quotes and under what circumstances the price quotes were obtained,” lack of information to "indicate where the price quotes fall in the spectrum of price quotes ... offered by the[] companies,” lack of information indicating whether the price quotes were “manipulated” in any way, lack of information indicating whether the GDLSK Plaintiffs "selectively decide[d] to submit only those price quotes that are favorable ... while not submitting all price quotes ... [they] received,” lack of "information on how the [price quotes] were obtained (including the sources and any adjustments that may have been made),” and lack of information "demonstrating] that the submitted price quotes are representative of carton prices during the [period of review]”); see also id. at 75-76 (faulting lack of information indicating whether the price quotes "represent an actual arm’s length price for a completed order of these boxes between unaffiliated parties”).
And, second, Commerce apparently made no effort in the course of the most recent remand to seek to obtain any of the information outlined above — information which, according to Commerce, would enable it to "assess the accuracy [and] completeness” of the quotes, and to "confirm that the submitted price quotes are representative of carton prices during the [period of review],” and thus would help resolve both the agency’s concerns about the "representativeness” of the price quotes and the agency's reservations concerning the fact that price quotes in general — including the price quotes at issue here— are not information that is typically “publicly available.”
See Second Remand Determination at 43.
. The Second Remand Determination seems to reflect concern only about temporal representativeness (and the potential for "temporary price fluctuations"), which is also the focus of the analyses in most other judicial decisions and administrative determinations in which representativeness has been an issue.
See, e.g.,
Second Remand Determination at 43 (stating that domestic price quotes were rejected because,
inter alia,
they are "not representative of prices throughout the [period of review]”);
id.
(stating that “the record does not demonstrate that the submitted price quotes are representative of carton prices during the [period of review]”);
id.
at 44 (stating that agency "has historically chosen to use surrogate values that reflect broad market averages and that cover a substantial time period over price data that are obtained from so isolated a time frame as to be subject to temporary market fluctuations”);
id.
at 46 (asserting that Indian import statistics are preferable to domestic price quotes because import statistics are "representative of a range of prices throughout the [period of review]”);
id.
at 75 (stating that price quotes “do not represent broad market averages and do not reflect prices during the [period of
. In the Second Remand Determination, Commerce has turned up the volume on its rhetoric. In the Final Results, Commerce stated simply that the price quotes “could easily be subject to temporary market conditions.” See Issues and Decision Memorandum at 40. Now, in the Second Remand Determination, Commerce maintains that the price quotes in this case are "highly susceptible to temporary market conditions.” See Second Remand Determination at 43-44 (emphasis added). As discussed herein, however, there is no apparent basis in logic — and clearly no basis in the evidentiary record — to support either of Commerce’s assertions.
As
Taian Ziyang
noted, the record is devoid of any evidence of price fluctuation.
See Taian Ziyang,
33 CIT at-,
. In the Second Remand Determination, Commerce asserts for the first time that the notation on one of the four price quotes indicating that the quote is "only valid for a limited time” constitutes evidence that the price of cardboard packing cartons is subject to fluctuation. See Second Remand Determination at 44; see also Def. Response at 5, 7. However, there is nothing to indicate that the notation is anything more than standard contract “boilerplate.” And, in any event, the notation is far too flimsy and far too little to constitute the "substantial evidence” required to support a Commerce finding that prices were subject to significant fluctuation.
The Second Remand Determination also asserts for the first time that only two of the
.
See also, e.g., Talan Ziyang,
33 CIT at-,
. In the Second Remand Determination, Commerce notes that the trade intelligence data submitted by the GDLSK Plaintiffs "indicat[e] that Indian HTS 4819.1001 included certain specialty packing products they [i.e., the GDLSK Plaintiffs] claim not to have used.” See Second Remand Determination at 42 (emphasis added). But that ship has long since sailed. It is too late for Commerce to equivocate on whether the Indian import statistics are distorted by the inclusion of gift and specialty boxes and other more expensive products that are unlike the basic cardboard packing cartons at issue here. That distortion is an undisputed record fact. The open questions are the extent and the significance of that distortion.
In the Final Results, Commerce acknowledged that, while the Chinese producers use "boxes within this Indian HTS category ... (ie.g., 5-ply 10 by 14 cardboard),” the HTS subheading also encompasses "many different types of boxes,” including gift and specialty boxes, in addition to basic cardboard packing cartons.
See
Issues and Decision Memorandum at 38-39;
see also Taian Ziyang,
33 CIT at-,
. The GDLSK Plaintiffs also assert that Commerce's rejection of the much more "product specific” price quotes for cardboard packing cartons is undermined by Commerce’s emphasis on the importance of product specificity in the agency’s valuation of garlic seed. See GDLSK Comments at 6; see also Second Remand Determination at 4-8, 54-58 (discussing valuation of garlic seed); Issues and Decision Memorandum at 14-22 (same). According to the GDLSK Plaintiffs, "the two conflicting positions Commerce takes with respect to garlic seed and cartons cannot be reconciled and demonstrate that its findings [as to the valuation of cardboard cartons] ... are arbitrary.” See GDLSK Comments at 6. The Government contends that the GDLSK Plaintiffs "waived the right to raise this argument before this Court” because the argument was not made during the remand proceedings, although the Government concedes that the argument was raised in the course of the underlying administrative proceeding. See Def. Response at 13 & n. 1; see also Issues and Decision Memorandum at 38 (noting GDLSK Plaintiffs' argument that Commerce "cannot select a domestic garlic seed surrogate value on the basis of being 'more product specific,’ while at the same time rejecting another domestic price to value a different [factor of production]” — i.e., cardboard cartons).
In any event, the antidumping statute "merely requires the use of the ‘best available information' with respect to the valuation of a given factor of production; it does not require that a uniform methodology be used in the valuation of all relevant factors.”
See Nation Ford,
. In the Final Results, Commerce appeared to quibble about whether the cardboard cartons used by the Chinese producers were imported by air, or were sourced domestically as the GDLSK Plaintiffs have maintained. See, e.g., Issues and Decision Memorandum at 40 (asserting that the GDLSK Respondents had not “demonstrate[d] that their own domestic carton suppliers did not import some products into the PRC by air”). And, even though (in the statement quoted above) Commerce has now clearly conceded that air freight charges inflate the values derived from the import statistics {see Second Remand Determination at 75), the Second Remand Determination elsewhere seems to try to continue to hedge. See Second Remand Determination at 46 (stating that "the data obtained through Indian import statistics may not perfectly represent the inputs used by the GDLSK respondents because the Indian import data include ... boxes transported by air”) (emphasis added); see also id. at 42 (stating that "the GDLSK respondents claim that [the Indian import statistics] include[ ] products that, unlike those that the GDLSK respondents used, were shipped by air”) (emphasis added).
. Inexplicably, the Government states in its brief that, in Synthetic Indigo from the PRC, "Commerce rejected the price quotes [in that case] because it was unable to determine whether [the price quotes] were representative of the range of prices ... during the period of review.”
See
Def. Response at 9. The Government argues that “[s]imilarly in this case, Commerce rejected the price quotes because, in part, [the GDLSK Plaintiffs] failed to meet [their] burden of establishing that the
Either the Government did not read Synthetic Indigo from the PRC, or the Government is being less than fully candid with the court. The Issues and Decision Memorandum in Synthetic Indigo makes it clear that Commerce’s foremost concern about the price quotes there was that the price quotes were "dated from seven to ten months after the end of the [period of review]” — a key fact that the Government significantly failed to note in its brief here.
See
Issues and Decision Memorandum for Synthetic Indigo from the PRC,
. While the decision may be somewhat (as the Government puts it) "instructive,” the significance of Jinan Yipin II for this case is limited for other reasons as well, in addition to those outlined above. See Def. Response at 11-13. As the GDLSK Plaintiffs emphasize, for example, “[e]ach proceeding has its own record,” and Commerce’s determination in this case must be judged solely on the record compiled here. See GDLSK Comments at 6. In addition, the GDLSK Plaintiffs correctly note that "the import data and the trade intelligence data from Jinan Yipin II corresponds to a different time period and, therefore, is based upon entirely different entries. Consequently, the degree to which the trade intelligence data demonstrates that the import data does not consist of the type of cartons used by the garlic producers for each case is entirely unrelated. For example, unlike this case, the trade intelligence data in Jinan Yipin II overlapped but did not correspond with the [period of review] exactly.” See GDLSK Comments at 7.
. See also Def. Response at 12 (analogizing instant case to Jinan Yipin II, in context of argument that Commerce has discretion to choose between "two imperfect data sets”); id. at 5-6.
. Commerce now "acknowledges the fact that the [import statistics] do not perfectly represent the inputs of the GDLSK respondents because the Indian import data include specialty boxes, and [2] boxes transported by air.” See Second Remand Determination at 75.
. The Second Remand Determination's discussion of the valuation of cardboard packing cartons is replete with unsupported conclusory assertions. As yet another example, the Second Remand Determination states that "the product specificity of the price quotes does not overcome the problems with this data source [i.e., the price quotes]." See Second Remand Determination at 75. The Government’s brief is full of similar unsupported and conclusory statements. For example, the Government asserts that "Commerce reasonably selected the more reliable evidence ... to calculate ... [the] surrogate value for cardboard cartons.” See Def. Response at 8 (emphasis added). But nowhere does the Government explain how Commerce could possibly conclude on the existing record that admittedly distorted data (i.e., the import statistics) are more reliable than the alternative data (i.e., the domestic price quotes), which are (at worst) potentially distorted.
.
See also Hebei Metals II, 29
CIT at 295 n. 3,
. Moreover, “Commerce has certain core investigatory duties, which cannot be avoided.”
See Hebei Metals II,
.
See also, e.g., Jinan Yipin II,
33 CIT at -,
. Indian HTS heading 9507 covers fishing rods.
. Just as Commerce and the Government have failed to confront the agency’s obligation "to obtain adequate evidence for the value [the agency] select[s],” so too the GDLSK Plaintiffs have failed to respond directly to the Government’s argument on burden of proof.
See Hebei Metals II, 29
CIT at 296,
Optimally, the record as supplemented by tire parties on remand will allow all issues to be resolved on the merits and based on affirmative evidence (rather than sorting out the issues of assumptions and burdens of proof). However, if that is not possible, the GDLSK Plaintiffs, as well as Commerce and the Government, will have to address the state of the record as it then exists, including any potential issues such as the legitimacy of assumptions, and the parties’ respective burdens of proof.
If Commerce could establish on remand that the inclusion of the more expensive products and the air freight charges have no significant distortive effect on the Indian import statistics, it might be possible to sustain the agency’s determination that the import statistics constitute the "best available information” even without evidence on the potential for manipulation and the representativeness of the domestic price quotes. Based on the breadth of the Indian HTS subheading and the existing record evidence on the Indian import statistics, that prospect seems unlikely at this time. It is nevertheless worth underscoring that, on remand, both Commerce and the GDLSK Plaintiffs have incentives to develop the record on the domestic price quotes, as well as the import statistics. Any party that ignores its burden of proof does so at its peril.
. As they did with cardboard packing cartons, the Domestic Producers also placed the Indian import statistics on the record for use in valuing plastic jars and lids. Significantly, however, the Domestic Producers have not sought to present any evidence directly challenging the domestic price quotes. Nor have the Domestic Producers ever even claimed that the domestic price quotes are inaccurate or are not representative of prices throughout the period of review. It is also telling that the Domestic Producers have not briefed this issue before the Court — not even in the prior stage of the proceeding.
See Taian Ziyang,
33 CIT at-n. 63,
.There is some confusion concerning the number of domestic price quotes for jars and lids on the administrative record. The Second Remand Determination asserts that the administrative record includes
“three
price quotes for plastic jars obtained from
three
Indian vendors.”
See
Second Remand Determination at 47 (emphases added);
see also
Def. Response at 14 (stating that "Commerce rejected three price quotes for Indian plastic jars and lids”); GDLSK Comments at 9-10 (stating that "[t]here are two possible surrogate values: (1) ... and (2) three price quotes ...”). However, the Final Results indicate that the GDLSK Plaintiffs submitted
four
price quotes from
three
Indian suppliers.
See
Issues and Decision Memorandum at 41 (stating that "[t]wo of the four price quotes appear to be obtained from two Indian companies in direct response to a request for such prices, ... and die remaining two quotes are taken directly from a price list from a third Indian company”);
see also id.
at 42 (referring to "[flour price quotes from three different companies”);
Taian Ziyang,
33 CIT at-,
. The domestic price quotes are dated October 8, 2004, November 6, 2004, and November 22, 2004.
See
Issues and Decision Memorandum at 42; GDLSK Respondents’ Second Surrogate Value Submission (Admin. Record Pub. Doc. 258), Exh. 3 (domestic price quotes for jars and lids);
see also Taian Ziyang,
33 CIT at-n. 64,
. Although Commerce has expressed concern about the temporal "representativeness” of the domestic price quotes for jars and lids (i.e., concern that the price quotes “are obtained from so isolated a time frame as to be subject to temporary market fluctuations”), nothing in the Second Remand Determination or the Final Results indicates a concern about the geographic representativeness of the price quotes, which are from vendors in three different cities — Delhi, Bangalore, and Mumbai. See Second Remand Determination at 48; see generally id. at 46-50, 76-78 (expressing no concern about geographic representativeness); Issues and Decision Memorandum at 41-43 (same); GDLSK Respondents' Second Surrogate Value Submission (Admin. Record Pub. Doc. 258), Exh. 3 (domestic price quotes for jars and lids).
.
Taian Ziyang
also pointed to
Hebei Metals II,
which stated that, "[w]hile the contemporaneity of data is one factor to be considered by Commerce ..., three months of contemporaneity is not a compelling factor where the alternative data is only a year-and-a-half distant from the [period of investigation],” and that contemporaneity is "insufficient to explain why an import price is the best available information.”
See Taian Ziyang,
33 CIT at -,
. As
Taian Ziyang
noted, in addition to concerns about the public availability, contemporaneity, and representativeness of the domestic price quotes, the Final Results also indicated that the price quotes did not clearly distinguish between the price of jars and the price of lids.
See Taian Ziyang,
33 CIT at -,
In any event, as discussed below, the issue of the valuation of plastic jars and lids is being remanded to Commerce yet again. To
. The Final Results state that, of the domestic price quotes on the administrative record, two are “taken directly from a price list from a[n] ... Indian company,” and were not "obtained ... in direct response to a request for such prices.” See Issues and Decision Memorandum at 41; see also id. at 42 (same). But the Second Remand Determination fails to recognize that fact, and indicates that all of the price quotes were obtained in the same way. Compare Issues and Decision Memorandum at 42 (stating that only "two of the four price quotes that were submitted appear to be in response to a specific request for ... prices”) (emphasis added) with Second Remand Determination at 47 (indicating that all of the price quotes were “prepared specifically upon request”); id. at 77 (same). Further, neither the Final Results nor the Second Remand Determination ever explains why prices on price lists do not constitute publicly available information.
Moreover, to the extent that Commerce’s preference for publicly available information is based on concerns about the potential for manipulation and collusion that is inherent in price quotes generally, the nature of the instant price quotes for jars and lids should help lay such concerns to rest, at least for purposes of this case. If one were inclined to forge or manipulate price data, presumably one would produce data that were more clearly decisive — in other words, one would generate a significant number of price quotes from throughout the period of review. See generally n. 24, supra. As discussed herein, however, there are no more than four price quotes on the administrative record of this case — and all of them post-date the period of review by at least 11 months.
. As noted above, Commerce now unequivocally acknowledges the distortive effect of the air freight charges included in the Indian import statistics, just as it acknowledges the distortive effect of the inclusion of products that are not comparable to the plastic jars and lids used by the Chinese garlic producers. See Second Remand Determination at 77 (conceding that the Indian import statistics are distorted because, inter alia, they ''include! ] products that, unlike those the GDLSK [Plaintiffs] used, were shipped by air”). However, the Final Results did not concede that fact. See Issues and Decision Memorandum at 43 (arguing that "[s]ome companies import jars and lids into the PRC by air, others do not” and that "the respondents have not submitted any documents ... demonstrating that their own domestic plastic jar and lid suppliers did not import the products into the PRC by air”). Indeed, at one point, even the Second Remand Determination appears to hedge a bit. See Second Remand Determination at 49-50 ("acknowledging] that the data obtained through Indian import statistics may not perfectly represent the inputs used by respondent because the Indian import data include ... products shipped by air”) (emphasis added). In contrast, Commerce has never disputed that the Indian import statistics are distorted by the inclusion of products that are not comparable to the plastic jars and lids used by the Chinese producers. See, e.g., Issues and Decision Memorandum at 43 (asserting that Indian import statistics are sufficiently specific to the plastic jars and lids at issue here).
. As explained in note 49 above, Commerce is no longer pressing this issue.
. The Descartes Carrier Rate Retrieval database is a web-based service similar to the World Trade Atlas (another online, fee-based database), which publishes the ocean freight charges of numerous carriers to destinations worldwide.
See Taian Ziyang,
33 CIT at-n. 68, -,
.
Taian Ziyang
criticized Commerce for its decision to use the Maersk data (rather than the ''ranged” rates) based on the agency’s alleged inability to adjust the "ranged” rates to reflect the exact prices paid by the two Chinese Producers.
Taian Ziyang
noted that, contrary to Commerce’s implications, it is simply not possible for the Maersk rates to be more accurate even if they are compared only to the unadjusted, publicly available "ranged” versions of the rates paid by the two Chinese Producers.
See Taian Ziyang,
33 CIT at-,
As
Taian Ziyang
explained, "even assuming that the actual rates paid by the respondents were
10% higher than
(rather than, for example, 10% lower than) the ranged Harmoni/Linshu Dading rates, it is immediately evident that Commerce’s selected surrogate freight rates
[
— i.e., the Maersk rates — ] are far in excess of a potential 10% distortion of the publicly ranged prices.”
See Taian Ziyang,
33 CIT at-,
