Vietnamese exports to USA critically dependent on surrogate country and surrogate value experts

In AD Investigations, the Vietnamese goods are alleged to be exported to the US market at less than their fair market value. Since the US Department of Commerce (“DOC”) treats Vietnam as a non-market economy (“NME”) country, it rejects all the cost and price data reported from Vietnam and determines the fair market value by constructing the cost of goods in a third country, called surrogate country. As such, the choice of a surrogate country and surrogate value data holds the key to the outcome in the Vietnamese AD proceedings.

To illustrate, in the US AD case on pangasius frozen fish fillets from Vietnam, up until the fifth administrative review of the AD Order, Bangladesh was consistently selected as the surrogate country. The fair value based on the Bangladeshi surrogate values yielded reasonable  AD margins, which was not to the liking of the Petitioners, Catfish Farmers of America (“CFA”).

Therefore, in the sixth administrative review, CFA argued that DOC reject Bangladesh as the surrogate country. In the preliminary results, DOC preferred the Philippines as the surrogate country, citing its superior fish price data. This switch resulted in very high preliminary AD margin. At this point, VASEP’s surrogate value expertdiligently worked in Bangladesh and  discovered a new price data source published by the Bangladeshi Department of Agricultural Marketing (“DAM”) to value whole live pangasius fish. He also persuaded  DAM to officially released its price data along with several clarificatory letters. All of these information were then submitted before DOC.

In the Final results issued in March 2011, in a remarkable turn around, the DOC switched its surrogate country choice back to Bangladesh, citing the robustness of the DAM data for whole fish. As a result, the AD margins in the sixth review swung back to near zero level and the moribund Vietnamese exports to US was reinvigorated.

In the preliminary results of the subsequent seventh administrative review, DOC selected Indonesia as the surrogate country. This time, VASEP’s surrogate value expert undertook extensive field trips in Bangladesh and Indonesia. In Bangladesh, he persuaded the government to publish the DAM data online. In Indonesia, he had the Director General of Indonesian Aquaculture Statistics (“IAS”), Mr. Ketuk Sugama, issue a detailed affidavit, clarifying the IAS data for whole fish.

In an encore, in the Final results issued in March, 2012, the Department switched back to Bangladesh. Commerce was persuaded to make this improbable switch solely on account of new and invaluable information obtained by the surrogate value expert from Bangladesh and Indonesia.

A leading Vietnamese exporter, Mr. Qui of QVD Aquacuture JSC said, “When the Department of Commerce selected the Philippines as the surrogate country in the preliminary results of sixth review, resulting in the levy of very high Antidumping duty, we thought that we had no future in the US export market. But, our Counsel, GDLSK LLP and its surrogate value specialists, Dharmendra Choudhary, worked tirelessly in Bangladesh over several months to obtain official government pricing data.  The DAM fish price data they obtained directly from high levels of Bangladeshi government was instrumental in selection of Bangladesh as the surrogate country in the final results.  Based on this surrogate country change, the Department concluded that Vietnamese exporters had not dumped. A similar situation was repeated in the preliminary results of the seventh review, when Commerce selected Indonesia as the surrogate country. This time, we felt that the world had come to an end and we had no future in the US market. But, based on new information and online DAM data, GDLSK LLP and Mr. Choudhary were again able to convince the Department to reverse its surrogate choice from Indonesia to Bangladesh. This change yielded results demonstrating that we had not dumped in US market and again brought down anti-dumping duties to nearly zero level.”

Notably, Commerce’s final results in the sixth and seventh administrative reviews have also been affirmed by the Court of International Trade (“CIT”).

In recent AD proceedings, DOC has preferred  Indonesia over Bangladesh, not withstanding that Indonesia was not even economically comparable to Vietnam. These decisions are pending in litigation.  For future AD proceedings, VASEP’s surrogate value expert is engaged in a global research to identify the most suitable surrogate country.

In sum, a significant portion of Vietnamese exports to US market is owed to the excellent work of surrogate value experts.