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AEC China Trade Case – 2015 Outlook

This year has started off with a bang!  The recent decision by the U.S. Court of Appeals for the Federal Circuit (CAFC) that affirmed the Court of Internal Trade’s (CIT) determination in the curtain wall units and parts appeal was outstanding for the industry.  You can read more about that in the trade alert we sent the day the decision was announced here (http://aluminumextruderscouncil.blogspot.com/2015/01/the-court-of-appeals-for-federal.html))  Like this decision, there are a number of open issues we expect to see resolved in 2015. 
The Department of Commerce (DOC) released its final determination in the second annual review in late December.  Overall, the final results were largely consistent with the Department’s preliminary results. With regard to the countervailing duty (CVD) results, by successfully persuading the Department not to use LME-based benchmarks, we were able to preserve much of the CVD margins.

This is a good long-term precedent.  However, you will note that the mandatory and non-selected respondents’ margins declined slightly from those issued in the preliminary results due to the way in which the Department averaged its data. The CVD AFA/PRC-wide rate increased slightly over the preliminary rate.   Here are the announced rates:

Anti-Dumping (AD) Results: 
Kromet: 0.00%
Jangho: 33.28% (PRC-wide rate)
Guang Ya: 33.28% (PRC-wide rate)
All Others (non-selected): 32.79%
PRC-Wide: 33.28%

CVD Results:
Kromet/Alnan: 10.32%
Jiangsu Changfa: 2.94%
All Others (non-selected, 59 companies): 8.54%
AFA/PRC: 160.09%

The Third Administrative Review is well underway.  In the AD case, the Department chose the Guang Ya Group/Zhongya/Xinya and Jangho as mandatory respondents. On November 6, however, Guang Ya withdrew its participation in the AD review.  The Department selected Union as an alternative.  Union entered an appearance and appears to be participating.  On the CVD side, the Department chose Guang Ya and Jangho as mandatory respondents. Questionnaires were issued on October 14, 2014, and we have been filing comments on the responses as they are filed.  We will keep you posted as the process develops.

However, not all the news coming out of 2014 was good.  The AEC’s Fair Trade lobbying team and our legal team from Wiley Rein had been working with the U.S. Trade Representative’s (USTR) office to appeal the MacLean-Fogg decision.  As you may recall, this decision reversed the DOC’s policy to NOT include the margins calculated for voluntary respondents in Administrative Reviews.  The DOC believes, and we agree, that allowing voluntary respondents’ result in the final margin calculations could allow for the Chinese to ‘game’ the system.  Unfortunately, the USTR was unsuccessful in securing an appeal hearing on the matter.  So, we will find another path to get this done.  The pending Trade Promotion Authority bill gives us that path.  Our team is working with legislators to include language in that bill to address the MacLean-Fogg ruling.   This is a perfect example of how the AEC is widening its strategy to include lobbying in addition to legal actions. 

And finally, the 5xxx series case.  Our team has been in contact with the DOC arguing our case.  One way or another we will get this issue settled in 2015.  While we will not be discussing our legal strategies openly, rest assured that we are convinced we have a winning case.  Updates will be announced as they come.

In conclusion, I want to congratulate the AEC and its members on the efforts and results achieved in 2014.  A year ago today we were heavily focused on funding and scope issues, surrogate countries, Barstow, etc.  That is not the case this year.  Our funding is secure.  We have shown a good record on scope requests in 2014. The Philippines is not even an option for the DOC as a surrogate country in 2015, and the Barstow project is dead.  So now, we will continue to build on our momentum with an expanded lobbying effort, continue the good fight in our scope and administrative review cases, and continue to work on circumvention issues wherever they may arise.  Thank you for your continued support.  Without that, none of this would be possible.

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