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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.
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.