GPX Int'l Tire Corp. v. United States

Citation33 ITRD 1545,666 F.3d 732
Decision Date19 December 2011
Docket Number2011–1108,2011–1109.,Nos. 2011–1107,s. 2011–1107
PartiesGPX INTERNATIONAL TIRE CORPORATION and Hebei Starbright Tire Co., Ltd., Plaintiffs–Appellees,andTianjin United Tire & Rubber International Co., Ltd., Plaintiff–Appellee, v. UNITED STATES, Defendant–Appellant,andTitan Tire Corporation and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied International and Service Workers International Union, AFL–CIO–CLC, Defendants–Appellants,andBridgestone Americas, Inc. and Bridgestone Americas Tire Operations, LLC, Defendants–Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

OPINION TEXT STARTS HERE

James P. Durling, Winston & Strawn, LLP, of Washington, DC, argued for all plaintiffs-appellees. With him on the brief for GPX International Tire Corporation, et al. were William H. Barringer, Daniel L. Porter, Gene C. Schaerr and Matthew P. McCullough.

Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant United States. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, and Michael D. Panzera, Attorney. Of counsel on the brief was John D. McInerney, Chief Counsel, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of Washington, DC.

Terence P. Stewart, Stewart and Stewart, of Washington, DC, argued for defendants-appellants Titan Tire Corporation, et al. With him on the brief were Wesley K. Caine and Elizabeth J. Drake.Francis J. Sailer, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, of Washington, DC, for plaintiff-appellee Tianjin United Tire & Rubber International Co., LTD. With him on the brief was Andrew T. Schutz. Of counsel was Mark E. Pardo.Joseph W. Dorn, King & Spalding LLP, of Washington, DC, for defendants-appellants Bridgestone Americas, Inc., et al. With him on the brief were Jeffrey M. Telep and P. Lee Smith, Jr. Of counsel were Christopher T. Cloutier, Ashley C. Parrish and J. Michael Taylor.Roger B. Schagrin, Schagrin Associates, of Washington, DC, for amicus curiae Committee on Pipe and Tube Imports. With him on the brief was John W. Bohn.Jeffrey D. Gerrish, Skadden, Arps, Slate, Meagher & Flom, LLP, for amicus curiae United States Steel Corporation. With him on the brief were Robert E. Lighthizer, James C. Hecht and Stephen J. Narkin.Kathleen W. Cannon, Kelley Drye & Warren LLP, of Washington, DC, for amici curiae ArcelorMittal USA LLC, et al. With her on the brief were Paul C. Rosenthal and Grace W. Kim.Alan H. Price, Wiley Rein LLP, of Washington, DC, for amici curiae The Committee to Support U.S. Trade Laws, et al. With him on the brief were Timothy C. Brightbill and Robert E. DeFrancesco.Donald B. Cameron, Troutman Sanders LLP, of Washington, DC, for amicus curiae Ministry of Commerce, People's Republic of China. With him on the brief were Julie C. Mendoza, R. Will Planert, Brady W. Mills and Mary S. Hodgins.

Before RADER, Chief Judge, LINN and DYK, Circuit Judges.

DYK, Circuit Judge.

In this consolidated countervailing duty case, the U.S. Court of International Trade (“Trade Court) ordered the U.S. Department of Commerce (“Commerce”) not to impose countervailing duties on goods from China, a non-market economy (“NME”) country. See GPX Int'l Tire Corp. v. United States (“ GPX III ”), No. 08–00285, 2010 WL 3835022 (Ct. Int'l Trade Oct. 1, 2010). The Trade Court held that Commerce's 2007 interpretation of countervailing duty law as permitting the imposition of such duties was “unreasonable” because of the high likelihood of “double counting” when both countervailing duties and antidumping duties are assessed against goods from NME countries. GPX Int'l Tire Corp. v. United States (“ GPX I ”), 645 F.Supp.2d 1231, 1240 (Ct. Int'l Trade 2009). We affirm, but on a different ground: we find that when amending and reenacting countervailing duty law in 1988 and 1994, Congress legislatively ratified earlier consistent administrative and judicial interpretations that government payments cannot be characterized as “subsidies” in a non-market economy context, and thus that countervailing duty law does not apply to NME countries.

Background
I

The Tariff Act of 1930, as amended, provides for two types of duties on imports that injure domestic industries: First, Congress has imposed antidumping duties on goods “sold in the United States at less than ... fair value.” 19 U.S.C. § 1673 (2006). Second, countervailing duties are imposed on goods that receive “a countervailable subsidy” from a foreign government. Id. § 1671(a). Antidumping duties are thus directed to the exporter, while countervailing duties remedy government conduct. This case involves an alleged “domestic subsidy,” where the subsidy benefits both domestic and exported goods, as opposed to an “export subsidy,” which benefits only exports. See id. § 1677(5A). In the case of goods exported from market economy countries (non-NME countries), both antidumping and countervailing duties may be imposed. The question here is whether both duties may be imposed on goods from NME countries.

While the countervailing duty law makes no references to NMEs, the antidumping law deals directly with the problem of exports from NME countries. For goods exported by a typical market economy country, the antidumping duty equals the goods' price in the United States (the “export price” or “constructed export price”) minus their price in the exporting country (the “normal value”). See id. §§ 1673, 1677a–1677b. In a “nonmarket economy country,” however, local prices cannot be used to calculate the normal value because, by definition, “sales of merchandise in such country do not reflect the fair value of the merchandise.” Id. § 1677(18)(A). Instead, Commerce may estimate the normal value based on data from “appropriate” market economy countries. 1 Id. § 1677b(c).

Because normal values calculated from surrogate countries do not reflect domestic subsidies, the result potentially is that the normal value calculation may be higher than the actual sale price in the NME country. On the other side of the equation, export price is generally unaffected by the fact that an NME country is involved. While the statute provides that countervailing duties imposed on exported goods shall be added to the export price, domestic subsidies do not affect the calculation of export price. 2 The overall result is arguably the imposition of a higher dumping margin for NME countries as the result of failure to take account of domestic subsidies. It is urged that if countervailing duties are also imposed for NME countries, the subsidy would be double counted.

II

As discussed in greater detail below, Commerce apparently first considered whether to impose countervailing duties on goods from NME countries in 1983. In 1983, Georgetown Steel Corp. and other American manufacturers petitioned Commerce to impose countervailing duties on imports from an NME (Czechoslovakia), and in 1984, Commerce determined that countervailing duty law did not apply to NMEs. Carbon Steel Wire Rod from Czechoslovakia: Final Negative Countervailing Duty Determination (“Wire Rod”), 49 Fed. Reg. 19,370, 19,370–19,371, 19,374 (May 7, 1984). The American manufacturers appealed and succeeded in the Trade Court. Cont'l Steel Corp. v. United States, 614 F.Supp. 548 (Ct. Int'l Tr.1985). Commerce appealed to our court, arguing that a subsidy is “a device used by governments to distort the signals that the market gives to firms,” and that by definition, subsidies do not exist in NMEs. Brief for Appellant at 25, Georgetown Steel Corp. v. United States, 801 F.2d 1308 (Fed.Cir.1986) (No. 85–2805) (“ Georgetown Steel Brief”). This court ultimately reinstated Commerce's decision in Georgetown Steel Corp. v. United States, 801 F.2d at 1309.

Commerce continued to maintain that countervailing duty law did not apply in a non-market context until 2007, when it issued a memorandum stating that it could apply countervailing duties to merchandise from China, an NME country. 3 See Countervailing Duty Investigation of Coated Free Sheet Paper from the People's Republic of China—Whether the Analytical Elements of the Georgetown Steel Opinion Are Applicable to China's Present–Day Economy (Mar. 29, 2007), available at http:// ia. ita. doc. gov/ download/ nme- sep- rates/ prc- cfsp/ china- cfs- georgetown- applicability. pdf (“ Georgetown Steel Memo”). The Georgetown Steel Memo did not address the statutory text or legislative history of countervailing duty law; rather, it examined the details of China's economy and determined that while China “remains an NME for purposes of the U.S. antidumping law,” it was “significantly different from the Soviet-style economies at issue in Georgetown Steel, and that these differences enabled Commerce to calculate whether the government subsidized specific goods. Id. at 2, 4, 10.

After Commerce issued the Georgetown Steel Memo, in June 2007 U.S. tire manufacturer Titan Tire Co. petitioned that Commerce impose both antidumping duties and countervailing duties on certain Chinese tires, including those manufactured by Hebei Starbright Tire Co. (owned by GPX International Tire Corp.) and Tianjin United Tire & Rubber International Co. (“TUTRIC”). See GPX I, 645 F.Supp.2d at 1235–36. In 2008, Commerce issued both its order imposing countervailing duties, see Certain New Pneumatic Off–the–Road Tires from the People's Republic of China: Countervailing Duty Order, 73 Fed. Reg. 51,627 (Sept. 4, 2008), and its order imposing antidumping duties, see Certain New Pneumatic Off–the–Road Tires from the People's Republic of China: Notice of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 73 Fed. Reg. 51,624 (Sept. 4, 2008). Seven complaints were filed to contest Commerce's antidumping and countervailing duty determinations, which...

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