USX Corp. v. US

Decision Date16 September 1988
Docket NumberCourt No. 85-03-00325.
Citation698 F. Supp. 234,12 CIT 844
PartiesUSX CORPORATION, f/k/a United States Steel Corporation, Plaintiff, v. The UNITED STATES and United States International Trade Commission, Defendants, and Propulsora Siderurgica, S.A.I.C., Defendant-Intervenor.
CourtU.S. Court of International Trade

USX Corp., John J. Mangan, J. Michael Jarboe, Craig D. Mallick and Robin K. Capozzi, Pittsburgh, Pa., for plaintiff.

Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel and Timothy M. Reif, U.S. Intern. Trade Com'n, Washington, D.C., for defendants.

Mudge, Rose, Guthrie, Alexander & Ferdon, David P. Houlihan, Jeffrey S. Neeley, New York City, for defendant-intervenor.

OPINION AND ORDER

RESTANI, Judge:

Plaintiff, USX Corporation, brings this action challenging the final determination of the United States International Trade Commission (ITC) that an industry in the United States was neither materially injured nor threatened with material injury by reason of imports of cold-rolled carbon steel plates and sheet from Argentina that were sold at less than fair value. Cold-Rolled Carbon Steel Plates and Sheets from Argentina, Inv. No. 731-TA-175 (May 1988) (Remand II).

Before the court are the results of the second remand in this action. In the court's previous opinion, USX v. United States, 12 CIT ___, 682 F.Supp. 60 (1988), the action was remanded to ITC because two of the four opinions comprising the majority were found to be legally flawed and not based on substantial evidence in their analysis of causation. The court also directed ITC to address further the issue of cumulation, specifically regarding imports from Brazil and Korea.1,2 Each of these issues will be discussed separately.

DISCUSSION
I. CUMULATION

Prior to the Trade and Tariff Act of 1984, the cumulation of imports was discretionary and ITC could decide properly not to cumulate where the subject imports exhibited different trends in the U.S. market distinct from those of other countries imports or where other conditions of trade indicated that cumulation would be inappropriate. USX v. United States, 11 CIT ___, ___, 655 F.Supp. 487, 491-92; Lone Star Steel Co. v. United States, 10 CIT ___, ___, 650 F.Supp. 183, 186-87 (1986).

In the present case, ITC has based its decision not to cumulate imports of Brazil and Korea with those of Argentina on differing trends in import volume, insufficient similarities in pricing patterns and limited geographic overlap in the markets served by the imports.3 Plaintiff agrees that prior to 1984 such distinctions could justify a decision not to cumulate when properly employed, but argue that a finding of divergent trends among these imports is not supported by the record in this case and that ITC's failure to cumulate imports from Brazil and Korea with those of Argentina was arbitrary, capricious and an abuse of discretion.4

In its discussion of import volume trends, ITC notes that Argentine imports retained an essentially flat market share during the period of investigation while Brazilian and Korean imports increased their market share significantly during the same period.5 Thus, Argentine imports were actually losing position relative to other importing countries during the period.6 This observation is clearly substantiated in the record. See Remand I at A-7.

The record also supports ITC's finding that pricing patterns of Argentine imports show only limited similarity with those of Brazil and Korea. In the supplemental report to the first remand determination, ITC staff states that "while all of the price indexes are positively correlated, the Argentine prices are less highly correlated with those of the other three countries Brazil, Korea and South Africa and not in a statistically significant manner than are the prices of those countries with each other." Remand I at A-10; see id. at A-11.

Finally, the record confirms ITC's conclusion that there is little geographic overlap between U.S. markets served by Argentina and Korea and that the geographic concentration of the imports of Argentina and Brazil differs significantly. See Remand I at A-8 and A-9.

In light of this evidence, the court finds that ITC acted within its discretion in not cumulating Argentine imports with those from Brazil and Korea.

II. CAUSATION

In the determination presently before the court, the two commissioners whose causation analyses the court previously found insufficient concur with the two remaining members of the majority who utilize a traditional approach to causation analysis. That causation analysis, which was set forth in its entirety in Remand I, is now the subject of review.

Under a traditional approach to causation analysis, ITC closely follows the statutory outline and focuses its attention on the volume of imports of the subject merchandise, the effects of those imports on prices of United States like products, and the impact of those imports on domestic producers of like products. 19 U.S.C. § 1677(7)(B) (1982). In evaluating each of these factors, ITC considers various indicators which are set forth at 19 U.S.C. § 1677(7)(C) (1982).7

Initially it should be noted that Congress has vested ITC with considerable discretion as to the weight it will assign a given factor in making its injury determination. Copperweld Corp. v. United States, 12 CIT ___, ___, 682 F.Supp. 552, 564 (1988); Maine Potato Council v. United States, 9 CIT 293, 300, 613 F.Supp. 1237, 1244 (1985). As Congress has explained:

The significance of the various factors affecting an industry will depend upon the facts of each particular case. Neither the presence nor the absence of any factor listed in the bill can necessarily give decisive guidance with respect to whether an industry is materially injured, and the significance to be assigned to a particular factor is for the ITC to decide.

S.Rep. 249, 96th Cong. 1st Sess. 88, reprinted in 1979 U.S.Code Cong. & Admin. News 381, 474.

In reviewing ITC's determination, it is not this court's function to decide that, were it ITC, it would have made the same decision on the basis of the evidence. Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 936 (Fed.Cir.1984). This court must sustain a final negative injury determination by ITC unless it is unsupported by substantial evidence, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B).

A. Import Volume

Plaintiff argues that ITC's analysis of import volume must be rejected because it fails to address certain concerns raised by the court in its review of the original ITC determination. In that opinion, the court stated that "it is the significance of a quantity of imports and not absolute volume alone, that must guide ITC's analysis under section 1677(7)." USX, 11 CIT at ___, 655 F.Supp. at 490 (citing Atlantic Sugar, Ltd. v. United States, 2 CIT 18, 23, 519 F.Supp. 916, 921-22 (1981)). The court rejected ITC's analysis of market penetration data which consisted solely of the statement that levels of market penetration remained low and stable, without discussing the significance of this trend or its relationship to other facts uncovered in the investigation. Id. This lack of explanation occurred against the setting of a flawed cumulation decision which further obscured any valid reasoning.

The court finds that ITC's causation analysis now addresses the significance of Argentine import volumes and sufficiently explains its views on market penetration while correcting other errors. While ITC once again places considerable emphasis on import volume, it analyzes the relationship of import volume to conditions and trends in the marketplace. Rather than relying on conclusory statements, ITC has placed volume data in a proper context.

Specifically, ITC emphasizes that although the absolute volume of Argentine imports rose during the period of investigation, market share data indicates that Argentine imports were growing no faster than the overall growth in the market. Remand I at 65. This fact is illustrated by the level import penetration ratios for Argentine imports during the period of investigation. Remand I at A-7. ITC notes that while this is not determinative, it is "clearly a very important fact." Remand I at 65.

The statute specifies that in evaluating the volume of imports, ITC "shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States, is significant." 19 U.S.C. § 1677(7)(C)(i) (1982) (emphasis added). "This language when read in conjunction with the legislative history indicates that disjunctive language was chosen to signify congressional intent that the agency be given broad discretion to analyze import volume in the context of the industry concerned." Copperweld Corp. v. United States, 12 CIT ___, ___, 682 F.Supp. 552, 570 (1988); see S.Rep. No. 249, 96th Cong., 1st Sess. 88, reprinted in 1979 U.S.Code Cong. & Admin.News 381, 474.8

In focusing its attention on the relative share of the domestic market held by Argentine imports, ITC fulfilled its statutory duty to analyze the volume of imports in either an absolute or relative sense depending upon what is appropriate under the circumstances. ITC's preference for relative import data here, as opposed to volume increases in absolute terms, given the increase in domestic consumption, was reasonable. Copperweld, 12 CIT at ___, 682 F.Supp. at 570. ITA related import data to improving conditions in the domestic market and other conditions of trade. All of this is analyzed after proper focus on the relationship to imports from other sources.

B. Pricing and Price Effects

In its analysis of pricing and price effects of Argentine imports, ITC acknowledged that it confirmed several instances of underselling, but decided to give this evidence limited weight due to the relatively small number of comparisons made, the...

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