Hughes Hubbard & Reed secured an important victory for the Vietnamese shrimp industry when the U.S. Court of International Trade upheld the low anti-dumping duty rates that the U.S. Commerce Department assigned to Vietnamese shrimp exporters in the sixth administrative review (AR6).
On May 29, 2014, Chief Judge Donald Pogue of the United States Court of International Trade rejected American shrimp producers' argument that Commerce should have used the Philippines instead of Bangladesh as a surrogate country in its review of the dumping order.
In antidumping cases against market economy countries, Commerce calculates dumping duties by comparing the merchandise's export prices to its "normal value" as sold in the home market. Because Commerce classifies Vietnam as a non-market economy (NME), however, the agency must use values from a "surrogate" country with a similar economy to determine if the NME nation is exporting shrimp at a price lower than normal value.
In AR6, Commerce selected Bangladesh as the surrogate market economy for Vietnam because that country's data represented a broad-market average, included product-specific information that was current and reflected actual transaction prices. Plaintiff Ad Hoc Shrimp Trade Action Committee, an alliance of US domestic shrimp producers, argued that, if Commerce had considered relative gross national income (GNI) differentials, the Philippines should have been chosen as the surrogate.
Judge Pogue disagreed, finding that Commerce did consider GNI differentials and concluded that the Philippine data did not match the range of sizes of shrimp the Vietnamese shrimp producers sold. Judge Pogue upheld Commerce's reasoning that the superiority of Bangladesh's data on factors of production involved in the shrimp industry outweighed the benefits of using data from a country with a closer GNI to that of Vietnam. Judge Pogue concluded that Commerce's selection of Bangladesh was well-reasoned and supported by substantial evidence.
Judge Pogue also rebuffed American shrimp producers' challenge to Commerce's new policy of calculating labor rates from a single surrogate country instead of the average of similar countries. Factoring in an average rate typically yielded a value that exceeded $1 per hour. Judge Pogue found that, while Bangladeshi labor rates were lower than other potential surrogates, the new policy is still reasonable and based on the most reliable data.
The decision made headlines in Bloomberg BNA and Law360.
Matt Nicely represented the Vietnamese shrimp industry, with assistance from Alex Hess.