US changes valuing methodology in antidumping disputes

On the other hand, if domestic sources represent the lowest prices but are limited in quantity, then the company might have no choice but to complete its purchases using higher-priced imports. In both cases, because of the supply constraint at work valuing all of the input at the market price paid for less than the vast majority of total purchases of that input would either overstate or understate the company's input costs. Further, the ITA believes that the meaning of "supply constraint" can be broadened to cover logistics problems and movement costs, and the outcome would be the same — an overstatement or understatement of the company's costs.

Other commenters argued that the ITA must undertake an analysis to determine the best available information for use in an NME case on a case-by-case basis, whether it is actual market economy purchase prices or surrogate values. One of these commenters said that the new rule would result in market economy purchase prices being excluded in favour of surrogate values when the 85 percent threshold is not met, which is contrary to the best available information requirement.

Another commenter contended that U.S. World Trade Organisation obligations with respect to mainland China demonstrate a preference for using primary information (where market economy prices exist) and require that secondary information (e.g., surrogate values) must be shown to be more reliable and accurate than primary information (e.g., market economy purchase prices) in order to be used.

The ITA responded by re-asserting its belief that the amendments implemented through this final rule comport with U.S. law and, by extension, with U.S. WTO obligations because they are designed to ensure that the ITA is using the best available information to value the factors of production. The ITA has issued at least two other final rules over the past year, in addition to other similar regulations issued in previous years, that could potentially increase the duty liability in AD investigations and administrative reviews involving mainland Chinese goods.

Effective 19 June 2012, the ITA made a change in methodology that reduced the export price or constructed export price in AD proceedings involving mainland China and Vietnam by the amount of an export tax, duty or other charge.

The ITA also implemented on 5 July 2013 policy revisions that could make it more difficult for individual exportersin NMEs to obtain separate rates in AD proceedings. Separate rates are generally lower, sometimes substantially, than the entity-wide rate that applies to most other exporters in those countries. Earlier this year a U.S. trade court also upheld the constitutionality of a federal law allowing the application of countervailing duties on NME goods. 

HKTDC Research