Commerce Chose Surrogate Country for Wrong Reasons, Chlorine Producer Argues
A domestic producer of chlorine for use in residential pools argued in a July 17 motion for judgment that the Commerce Department once again bypassed a more suitable surrogate country in a review because it emphasized the comparative economic development over actual production of identical products (Bio-Lab v. U.S., CIT Consol. # 24-00024).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Producer Bio-Lab, leading plaintiffs that also include Innovative Water Care and Occidental Chemical Corp., claimed in its motion that Commerce should have chosen Mexico, not Romania, as a surrogate for calculating the value of Chinese chlorine exporters. Mexico, it said, was the only country that produced an identical product -- as Commerce itself had confirmed, having used the country in past reviews.
However, the department claimed that, while China and Mexico were on “comparable” levels of economic development, China and Romania were on the “same” level, making Romania the better choice, Bio-Lab said.
But Romania doesn’t make the same type of product; nor does any country other than Mexico, the producer said.
Commerce valued the chlorine it was reviewing using the cost information of Romanian calcium hypochlorite and sodium hypochlorite, holding that these were like products because they both can be used as a “disinfectant for swimming pools in theme parks,” it said. But that isn’t the primary end use of calcium or sodium hypochlorite, it said. Citing evidence it put on the record, the producer said the two chemicals are mainly used as “a bleaching agent for textiles, cellulose and paper”; in cleaning products; in oil refinement; and in other similar uses.
The product being reviewed by Commerce, Chlor isos, is instead used as a long-term cleaning agent in residential swimming pools, Bio-Lab said. Manufacturing Chlor isos “involves a workforce, a plant, and an investment that is an order of magnitude greater than the number of workers and amount of investment involved in the production of calcium or sodium hypo,” it said.
The producer also argued that the difference between Mexico’s per-capita GNI and Romania’s, calculated using the Atlas method, was small. And if the department instead looked to World Bank benchmarks, it said, Mexico is actually more similar to China than Romania is.