US Defends Exclusion of In-Transit Mattresses From Quarterly Ratio Calculations
Petitioner Brooklyn Bedding's argument against two issues in a case on the antidumping duty investigation on Indonesian mattresses amount to "mere disagreement" with the Commerce Department's decisions, "falling far short of the required showing," the U.S. told the U.S. Court of Appeals for the Federal Circuit in a Dec. 3 reply brief (PT. Zinus Global Indonesia v. United States, Fed. Cir. # 25-1674).
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The government told the appellate court that Commerce properly excluded respondent PT. Zinus Global Indonesia's in-transit mattresses from its quarterly ratio calculations, and that it reasonably used Indonesian Global Trade Atlas data in applying the "transactions disregarded rule" to calculate Zinus' normal value. The Court of International Trade upheld both of these decisions following two remand proceedings (see 2502180056).
Regarding the calculation of quarterly ratios, Commerce initially included Zinus' in-transit mattresses, since the respondent's total aggregate mattress sales were "greater than the number of mattresses Zinus had in its inventory," and because the respondent's records didn't show any inventory unaccounted for in the agency's calculation. However, after the second remand, the agency got new inventory data from Zinus that "definitively showed" the company had a "greater total number of mattresses in its inventory than its number of mattresses sold during the" investigation period. The data also showed that none of the in-transit mattresses entered Zinus' inventory during the investigation period.
The U.S. said Commerce thus reasonably excluded in-transit mattresses from the calculations, since the reason they were included in the first place, "discrepancies in aggregate mattress totals," no longer existed.
Brooklyn Bedding argued that Commerce should include these mattresses in the calculations, since Zinus' sales exceeded the mattresses it had in inventory for a "small number of individual mattress types." The government argued that this claim fails "for several reasons." First, the agency "fully explained the change -- without including inventory data, the calculations yielded an impossible result, where the total sales of Indonesian mattresses was greater than the number of mattresses Zinus had in inventory."
Additionally, Commerce acknowledged the discrepancies identified by the petitioner, "but concluded this was acceptable because the discrepancies smoothed out in the aggregate," the U.S. said. While Brooklyn Bedding says this explanation is insufficient, since there were discrepancies in the underlying data before calculations were applied, the U.S. said "this is a distinction without a difference." Commerce was creating the "best possible estimate using imperfect data, and acknowledged the discrepancies created by its approach," the brief said.
"It makes no difference whether those discrepancies stemmed from the underlying data or the calculations -- they were acknowledged in the final product, the quarterly ratio calculations," the U.S. argued. In any case, the error was "harmless," since the "alleged anomalies were truly de minimis, constituting just 0.16 percent of the total mattresses," the brief said.
The U.S. also defended its use of the Indonesian GTA data in using its transactions disregarded rule, arguing that it reflected the market price available to Zinus, which is in line with the agency's established practice. The petitioner's claims to the contrary miss a crucial fact: "The affiliated supplier in this case was located in China, a non-market economy, meaning that Commerce could not use the affiliate’s costs of production because they were not based on market prices," the brief said.