985 F.Supp. 133 (CIT. 1997), 96-11-02502, Nation Ford Chem. Co. v. United States

Docket Nº:Court No. 96-11-02502.
Citation:985 F.Supp. 133
Party Name:NATION FORD CHEM. CO., Plaintiff, v. UNITED STATES, Defendant, Yude Chem. Co., Zhenxing Chem. Indus. Co., & Pht Int'l, Inc., Defendant-Intervenors. Slip Op. 97-171.
Case Date:December 12, 1997
Court:Court of International Trade

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985 F.Supp. 133 (CIT. 1997)




Yude Chem. Co., Zhenxing Chem. Indus. Co., & Pht Int'l, Inc., Defendant-Intervenors.

Slip Op. 97-171.

Court No. 96-11-02502.

United States Court of International Trade.

Dec. 12, 1997

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King & Spalding (Stephen A. Jones; Martin M. McNerney with him on the brief), Washington, DC, for plaintiff.

Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Reginald T. Blades, Jr.), and Linda S. Chang, International Office of Chief Counsel for Import Administration, of counsel, Washington, DC, for defendant.

Williams Mullen Christian & Dobbins (William E. Perry), Washington, DC, for defendant-intervenors.


DiCARLO, Senior Judge.

Plaintiff Nation Ford, the sole domestic producer of sulfanilic acid, challenges the final results of the antidumping administrative review found in Sulfanilic Acid from the People's Republic of China, 61 Fed.Reg. 53,711 (Dep't Commerce 1996) (final admin. review) [hereinafter Final Determination ]. The review covered the period from August 31, 1993 to July 1, 1994. The court has jurisdiction under 28 U.S.C. § 1581(c) (1994). Nation Ford claims that Commerce undervalued the cost to Chinese producers of aniline, the primary raw material used in the manufacture of sulfanilic acid. It argues that Commerce would have found a greater margin of dumping had it correctly calculated the foreign market value of sulfanilic acid in the People's Republic of China (PRC). For the reasons given below, Commerce's final results are sustained.


Commerce calculates an antidumping margin by comparing an imported product's price in the United States to the foreign market value (FMV) of comparable merchandise. FMV typically equals the domestic price of the product in the exporting country. When a nonmarket economy (NME) country such as the PRC is involved, however, domestic product sales are usually not reliable indicators of market value. In most such cases, Commerce must estimate the FMV by 1) isolating each factor of the production process in the NME country, 2) choosing a surrogate market economy country at a comparable level of economic development that produces comparable merchandise, 3) assigning a value to each factor of production equal to its cost in the surrogate country, and 4) adding to those values an estimated amount for profit and general expenses. 19 U.S.C. § 1677b(c) (1988) (pre-Uruguay Round law applies to this administrative review). The purpose of the procedure is to construct the product's price as it would have been if the NME country had been a market economy, using the best information available regarding surrogate values. Tianjin Machinery Import & Export Corp. v. United States, 16 CIT 931, 940, 806 F.Supp. 1008, 1018 (1992); see Timken Co. v. United States, 16 CIT 142, 144, 788 F.Supp. 1216, 1218 (1992).

Commerce used the above procedure in this administrative review, using India as the

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surrogate market economy country. In order to construct a surrogate market cost for sulfanilic acid, it was necessary to assign a value to aniline, a key raw material and thus a major factor of production. Aniline is subject to a two-tier price structure in India. Indian aniline producers are protected by high import tariffs, and their product is accordingly more expensive than the imported aniline available from other countries. Indian manufacturers must pay an eighty-five percent duty on imported aniline used to manufacture domestic products, but may import aniline duty free when it is used to produce exports. (Resp'ts' Additional PAPI Submission of June 28, 1995, Pub. Doc. 114.) There is, however, no material difference in quality or kind between domestic and imported aniline. As a result, Indian manufacturers tend to use domestically-produced aniline for domestic products and imported aniline for exports. Final Determination at 53,715. PRC manufacturers use aniline produced in the PRC for both domestic and exported products. (Resp'ts' Resp. Dep't Questionnaire of Feb. 3, 1995, Pub. Doc. 50 app. D at 5 (Yude); id. app. E at 5 (Zhenxing).) Defendant states that aniline is not subject to tariffs in the PRC. (Def.'s Br. at 45.)

During the administrative proceedings, the parties disagreed as to whether Commerce should use the domestic or import price of aniline in India as a surrogate value for the aniline used in the PRC. Plaintiff urged Commerce to use the domestic price, while the PRC respondents argued that the import price was more representative. Commerce decided to use import prices obtained from the Monthly Statistics of the Foreign Trade of India Volume Two--Imports...

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