The
Committee argues [t]he final determination does not evidence any
indication that the Commission evaluated the magnitude of the dumping
margins with regard to their impact on domestic producers of domestic
like product. Pl.s Br. at 21 (footnotes omitted).
The Committee claims that the magnitude of the dumping margins have
a strong and direct bearing on the level of competition that exists
between the subject imports and the domestic like product. The Committee
alleges that the reason why the subject imports are being sold in the
United States market at substantial dumping margins is because the subject
imports are in direct competition with the domestic like product.
Defendant
claims that the Committee conflates the statutory distinction
between what the Commission must consider, and what it must discuss.
. . . Def.s Br. at 32 (emphasis in original). Defendant
concedes that the Commission is required to consider the dumping margins,
but since the path to the agencys determination can reasonably
be discerned no additional discussion of the magnitude of the
dumping margin was required. To support the argument, Defendant asserts
that case law supports the proposition that the Commission need
not discuss every statutory factor, or address every party argument Def.s Br. at 35.
The
court is not persuaded by the Committees argument. The record
evidence indicates that, although not directly discussed, in its final
determination the Commission considered the dumping margins in its material
injury analysis. Since the enactment of the URAA, the Commission is
required to consider the dumping margin in its analysis of the impact
on the affected industry. However, none of the statutory factors that
the Commission is required to consider are necessarily dispositive. See SAA at 850. In this instance, the Commission specifically
noted its duty to consider the dumping margin.9 Additionally, in its Staff Report, the Commission used a COMPAS
model, which uses the dumping margins, to measure the economic effects
of the subject imports on the domestic industry.10
[T]he
staff selects a range of estimates that represent price-supply, price-demand,
and product substitution relationships (i.e., elasticities of supply,
demand, and substitution) in the U.S. market for steel wire rope.
The model uses these estimates with the data on market shares and
Commerces dumping margins to analyze the likely effect on the
U.S. like-product industry of reducing the subject imports from China
and India.
Staff Report at E-3. The use of the COMPAS model revealed little change to the domestic
industry absent dumping.
[t]he
results for the steel wire rope for China show that absent dumping
the domestic price would have been [ ] to [ ] percent higher, the
domestic output would have been [ ] to [ ] percent higher, and domestic
revenue would have been [ ] to [ ] percent higher. The results for
all steel wire rope from India show that in the absent [sic] dumping
the domestic price would have been [ ] to [ ] percent higher, the
domestic output would have been [ ] to [ ] percent higher, and domestic
revenue would have been [ ] to [ ] percent higher.
Staff
Report at E-3 (citing to table E-1 and E-2). Further, as the Defendant-Intervenors
point out, during a hearing, the Commissioners asked questions relating
to both Commerces dumping margin determinations and the margin
of underselling and specifically asked why the significant margins did
not appear to negatively affect domestic prices or market share.11 See Administrative Record, List 1, Doc. 56, Transcript at 56, 73 (Transcript). However, since the Commission
found that the competition between the subject imports and domestic
like product was attenuated, it reasoned that the dumping
margins did not impact the domestic industry. The dumping margin has
little significance if there is no connection between the pricing of
the foreign product and the condition of the domestic industry.
In
its determination, the Commission found that the subject imports did
not adversely affect the domestic like products pricing, volume
or market share.
Importantly,
domestic prices were relatively stable over the period of investigation,
despite the fact that subject imports consistently undersold domestic
steel wire rope products 1, 2, and 5 by margins generally in excess
of [ ] percent, and ranging from [ ] to [ ] percent. Nor did underselling
result in significant gains in market share by imports at the expense
of the domestic like product, as described above. That price underselling
did not result in declining prices for the domestic like product or
loss of market share reflects the limited substitutability between
subject imports and the domestic like product. Additionally, although
lost sales or lost revenues may constitute anecdotal evidence of direct
price competition, there were few confirmed lost sales in these investigations,
and the volume of confirmed lost sales was relatively small. On the
basis of the conditions of competition in this industry and attenuated
competition between subject imports and domestic like product, we
conclude that price underselling by the subject imports of the domestic
like product was not significant.
Final
Determination at 27-28 (footnotes omitted). In fact, the Commission
found that the subject imports adversely impacted nonsubject imports. See Final Determination at 25; supra Section A.
This was because the competition between the subject imports and domestic
like product was attenuated and limited substitutability
between the subject imports and the domestic like product.
We consider underselling and price effects in the context of conditions
of competition for steel wire rope. As described previously, subject
imports generally are lower in quality than the domestic like product.
Moreover, galvanized carbon steel wire rope accounts for over half
of subject imports but only a small share of domestic production.
These factors limit substitutability between the domestic like product
and subject imports, and therefore limit potential effects on subject
imports domestic prices.
Final
Determination at 26.
The Commission did not have to directly discuss the dumping margin because
it was implicit in its competition and injury analyses.12 In essence, the dumping margins were not dispositive because the prices
charged by the foreign importers did not affect the prices, volume,
or market share of the domestic industry. The Commission correctly found
that the attenuated competition that existed between the
subject imports and the domestic like product was the dispositive reason
that the subject imports failed to materially injure the domestic industry.
Thus, the substantial dumping margins did not affect the domestic industry
because the subject imports were not substitutable with the domestic
like product. Therefore, the subject imports did not materially injure
or threaten to materially injure an industry in the United States because
the subject imports did not adversely affect the domestic industrys
prices, volume or market share.
V.
CONCLUSION
For
the foregoing reasons, the court holds that the ITC's final negative
determination in Steel Wire Rope From China and India, Inv. Nos.
731-TA-868-869, (Final), USITC Pub. 3406 (March 2001) is supported by
substantial evidence and in accordance with law. Therefore, the court
denies Plaintiffs Motion for Judgment Upon the Agency Record.
Judgment will be entered accordingly.
Dated:
___________________ |
___________________________ |
New
York, NY |
Judith
M. Barzilay |
|
Judge |
9.
In its findings, the Commission stated:
[t]he
statute instructs the Commission to consider the magnitude of
the dumping margin in an antidumping proceeding as part of its
consideration of the impact of imports. 19 U.S.C. § 1677(7)(C)(iii)(V).
In its final dumping determination, Commerce determined dumping margins
of 38.63 percent for India and 42.23 to 58 percent for China, except
for Chinese producer Fasten, whose margin was de minimis. 66
Fed. Reg. 12759, 12761 (Fed. 28, 2001)
Final Determination at 30 n. 127.
10.
As described in the Staff Report [s]uch models, also known
as Armington models, are relatively standard in applied trade policy
analysis and are used extensively for the analysis of trade policy changes
both in partial and general equilibrium. Staff Report at
E-3.
11.
In a post-submission hearing, Commissioner Bragg asked:
I
guess Im going to at least start out my first two questions
directing them to the lawyers amongst you, and that would be, Mr.
Levin, since you did end on the subject of both margins, as well as
the role of non-subject imports, I would like to hear a little bit
more from you on both of those subjects.
The
first would be margins, and the first question would be again tell
me what the relevance is of Commerces final de minimis determinations to our injury analysis in these investigations.
You have not spent a lot of time on this, and I would like to hear
a little bit more about it now and hope that you would provide us
some additional information in the post-hearing submission. . . .
Transcript at 56.
Commissioner
Hillman questioned:
I
guess I want to start a little bit with the same line of questioning,
which is in reading through the data and looking at this case, one
of the things that is somewhat remarkable I think to all of us is
that weve seen these large margins of underselling and yet what
appears to be a relatively small, if not insignificant, change in
either market share by the imports or price declines.
I
guess Im still trying to understand if there is all of this
product available, subject and nonsubject alike, you know, available
at significantly lower prices, how is it that the domestic industry
has again not lost significant market share and weve not seen
significant price declines?
See
Transcript at 73.
12.
The Commissions implicit consideration of the magnitude of the
dumping margin is acceptable here because of the particular facts and
circumstances of this antidumping investigation.
It is less clear that claiming implicit consideration of
a statutory factor will allow the Commission to circumvent the statutorily
mandated requirements of 19 U.S.C. § 1677(7)(C)(iii) in future investigations.
On the contrary, the court notes that an explicit discussion of the
roll of the dumping margin in injury determinations would better serve
the statute.