Commerce Illegally Spurned Past Practice by Not Taking COP Data From Beekeepers, AD Respondent Says
The Commerce Department committed a "clear legal error" by failing to follow the statute and its own prior practice by using acquisition prices paid by antidumping duty respondent Nexco as opposed to actual cost data from the beekeepers themselves for the cost of production in an AD investigation on raw honey from Argentina, Nexco argued in a March 24 reply brief. The respondent said there is nothing "pragmatic" about disregarding the actual costs of making the merchandise under review in favor of acquisition prices, as the government claims (Nexco v. U.S., CIT # 22-00203).
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The U.S. had defended its substitution of acquisition prices for beekeeper costs on the grounds that (1) Nexco said in the beginning of the investigation that it should be considered a raw honey maker and thus the acquisition prices should be used, (2) Commerce's finding that it would likely encounter difficulties in receiving reliable questionnaires from Argentinian beekeepers, and (3) the agency found it would have been impossible to get beekeeper costs that are "representative."
In response, Nexco said the first two factors "rely on events, arguments, and potential difficulties identified at the very beginning of the investigation, which had been superseded by events and plainly contradicted by the record," and the third ground is unsupported. Commerce said it couldn't use actual beekeeper costs since in the investigation that led to a previously existing antidumping duty order on honey from Argentina in place from 2001 until 2011, none of the 12 beekeepers reached out to for data responded. However, Nexco said that in subsequent administrative reviews of the now-defunct order, the agency "was able to use beekeeper costs," negating this concern.
"In any event, whatever difficulties in collecting usable beekeeper data may have been anticipated at the outset of this investigation, Commerce in fact selected beekeeper suppliers to NEXCO as mandatory respondents, and by the time of the Preliminary Determination, Commerce had received usable cost data from both the beekeepers and middlemen that Commerce had decided to investigate," the brief said. As a result, the agency's justification for its decision "rings hollow," Nexco argued.
Commerce said it is able to take up a "pragmatic approach" that differs from established practice even where the standard practice is backed by statutory authority. Nexco said that the U.S. Court of Appeals for the Federal Circuit's decision in SKF USA v. U.S. held that the agency does not have unlimited discretion to "develop its practice and its interpretation of the statute on a case by case basis." Based on this decision, "Commerce cannot incorporate profit without the specific producer costs," the brief said.