US, AD Respondents Both Back PMS Adjustment Drop for South Korean Steel
The U.S. and two respondents in an antidumping duty review backed the Commerce Department's decision to drop a particular market situation determination on South Korean steel, in recently filed briefs, arguing the agency relied on what evidence it had after the Court of International Trade ruled against evidence upon which it had originally relied to make the finding (SeAH Steel Co., et al. v. United States, CIT Consol. #19-00086).
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The remand comments came from a consolidated action brought by SeAH Steel Co. and NEXTEEL Co. contesting the 2016-17 administrative review of the antidumping duty order on oil country tubular goods from South Korea. In April, Judge Jennifer Choe-Groves first remanded the case, finding that Commerce's contention that a PMS distorted the cost of production of OCTG goods in South Korea was not backed by proper evidence. In its remand, Commerce flipped this finding under respectful protest (see 2107010048).
Petitioner U.S. Steel had argued in August that Commerce's flip on the PMS finding misconstrued the court's remand order (see 2108160043). U.S. Steel said that the agency determined that it could only continue to find a PMS if other previously unconsidered record evidence, reweighed and rejected by the court, established a PMS. The petitioner also argued that Commerce substituted its facts for those of the court's -- an illegitimate sacrifice of its fact-finding mandate.
Not so, responded the Department of Justice. "Contrary to U.S. Steel’s assertion, Commerce did not ignore record evidence or somehow limit the reconsideration to documents that were new to the period of review," DOJ's comments said. "Rather, Commerce reviewed the administrative record as a whole in light of the fact that the Court has already found much of the evidence insufficient to establish a particular market situation." What Commerce did find, though, was that there was no evidence beyond what the court had already tossed out to show that "government restricting and overcapacity" distorted the South Korean market, the brief said.
SeAH backed DOJ's argument, arguing that Commerce's remand "explicitly rejected the suggestion that its reconsideration was limited to documents that were new to the current review period. Instead, Commerce explicitly confirmed that it reviewed the record of this administrative review as a whole," the company said. Even when looking at the record as a whole in the light most favorable to U.S. Steel, the materials only show a theoretical effect that certain factors could have had on the South Korean market and not that the market was actually distorted, SeAH argued. NEXTEEL also said that Commerce conducted an entire review of the case, rather than bifurcating the types of evidence into old and new as U.S. Steel suggested.
The U.S. and the respondents did not agree on everything, however. DOJ argued that Commerce's treatment of SeAH's general and administrative expenses is in accordance with the law. Choe-Groves had ruled that the statute does not permit Commerce to deduct the portion of the G&A expense of SeAH's U.S. affiliate that was allocated to imported pipe as part of the further manufacturing costs adjustment. SeAH and NEXTEEL both argued against Commerce's G&A expense allocation decisions.
"SeAH has not identified any statutory language that prohibits Commerce from treating G&A expenses of [Pusan Pipe America (PPA)], a selling arm of SeAH in North America, as indirect selling expenses," the U.S. said. "PPA is a selling arm of SeAH and does not have any production facilities, and its role in further manufacturing is 'perfunctory in nature.' ... Moreover, Commerce’s practice of including the G&A expenses incurred by the United States selling arm of a foreign producer in indirect selling expenses has been sustained repeatedly by this Court."