[00:00:00] Speaker 01:
Our next case for argument is 21-1434, Canadian Solar versus the United States.

[00:00:07] Speaker 01:
How do I pronounce your last name, counsel?

[00:00:10] Speaker 01:
Ms.

[00:00:11] Speaker 01:
Wiss, please proceed.

[00:00:32] Speaker 00:
Thank you.

[00:00:33] Speaker 00:
May it please the Court, Sarah Wiss, on behalf of plaintiff appellants, Canadian Solar et al.

[00:00:38] Speaker 00:
Your Honours, the issue before the Court today is simple.

[00:00:41] Speaker 00:
By statute, the Commerce Department may only countervail subsidies that are specific.

[00:00:47] Speaker 00:
But here, Commerce determined that the Chinese government subsidized electricity in all regions of China, under the plain meaning of the statute that is an illegal subsidy determination that must be overturned.

[00:01:01] Speaker 00:
This case involves the interplay between two sections of the tariff act of 1930.

[00:01:05] Speaker 00:
The first is the CBD statute, which mandates generally that commerce may only assess countervailing duties.

[00:01:12] Speaker 03:
So I understand your view.

[00:01:14] Speaker 03:
Is it your view that the way to understand the statute is that it covers a situation only where one province out of

[00:01:28] Speaker 00:
Say 20 provinces is getting a subsidy from the central government Thank you your honor Province is not laid out in the statute the requirement of the cvd statute is that commerce must designate a Geographical region doesn't have to be province, but it does have to be a single designated region and that's under 19 usc 1677

[00:01:52] Speaker 03:
Would a province count as a geographic region?

[00:01:56] Speaker 00:
Yes, a single province would count.

[00:01:58] Speaker 03:
Is it your view that this statute applies only when, say, one province out of 20 provinces in a country is getting a subsidy from the central government?

[00:02:13] Speaker 00:
No, Your Honor, that is not our view.

[00:02:17] Speaker 00:
Commerce was not strictly required to only designate one province.

[00:02:22] Speaker 00:
It does have some discretion in designating or defining what is a region, but it does need to designate a region.

[00:02:29] Speaker 00:
And Commerce did not designate a single province or a group of provinces or any region whatsoever.

[00:02:38] Speaker 00:
And that is required even when using AFA or add their stacks available.

[00:02:44] Speaker 03:
What if Commerce concludes that the central government has

[00:02:49] Speaker 03:
granted a subsidy of some sort, a varying subsidy province by province to most or maybe even all of the provinces.

[00:03:00] Speaker 03:
Province 1 is getting a subsidy of $1 per unit and then province 2 is getting a subsidy of $2 per unit and so on.

[00:03:09] Speaker 03:
Would that make the statute inapplicable under that circumstance?

[00:03:15] Speaker 00:
I believe yes, Your Honor, that it would because the specificity test

[00:03:19] Speaker 00:
in the statute is required to be a limit.

[00:03:22] Speaker 00:
And what it's enacted to avoid is that the designation of the region is necessary to ensure that subsidies that are distributed very widely throughout an economy are not countervailed.

[00:03:37] Speaker 00:
And that's enshrined in Commerce's regulations and the statement of administrative action.

[00:03:42] Speaker 00:
So under Your Honor's example, where the central government was perhaps providing

[00:03:48] Speaker 00:
subsidies to All the provinces that would not be count available that would be a broad-based subsidy that cannot be countervailed under the statute but but my hypothetical is there is a variance in the subsidy in the degree of the subsidy so that each province is getting a different amount of the subsidy I Have to come back to what commerce actually determined here because commerce did not determine that that

[00:04:18] Speaker 00:
Any particular certain provinces were getting a subsidy in certain provinces weren't or any particular province was getting?

[00:04:26] Speaker 03:
Some form of a benefit they picked a benchmark right and then they looked at the schedule and saw wow we see a lot of different electricity prices province to province going on here and then they ended up You know comparing the

[00:04:44] Speaker 03:
the benchmark to the relevant electricity price for the relevant province here to calculate the countervailing duty, right?

[00:04:54] Speaker 03:
Well, importantly, Your Honor, not just... I mean, am I understanding the facts correctly?

[00:04:58] Speaker 00:
If I could point you to a page in the Joint Appendix, it might help illustrate this benchmark choice.

[00:05:05] Speaker 00:
It's pages APPX 1567 and 1568.

[00:05:16] Speaker 00:
And as a preliminary matter, while you're turning, you'll notice that there are brackets and confidential treatment on this page.

[00:05:24] Speaker 00:
But these two pages are not confidential.

[00:05:27] Speaker 00:
They've been made public by order of the Court of International Trade.

[00:05:32] Speaker 00:
So we can just look.

[00:05:34] Speaker 00:
So it's small.

[00:05:37] Speaker 00:
There's a lot of data here.

[00:05:38] Speaker 00:
But we do not need to read the numbers here.

[00:05:42] Speaker 00:
All you need to know by looking at this chart is that the provinces are listed down the left-hand column.

[00:05:48] Speaker 00:
And, Your Honor, you said that commerce designated which province was the benchmark.

[00:05:53] Speaker 00:
Here, the benchmarks are actually highlighted in yellow.

[00:05:57] Speaker 00:
Commerce did not designate a province that was the benchmark.

[00:06:01] Speaker 00:
It did not designate a unsubsidized region.

[00:06:06] Speaker 00:
It picked, it broke down a respondent's electricity bill.

[00:06:09] Speaker 00:
into the various categories, so type of user such as large industry, time of use categories, peak, normal, valley, and so on.

[00:06:20] Speaker 00:
And then it assigned, picked a benchmark from a different province for every single one of those categories.

[00:06:29] Speaker 00:
Commerce used an ever-changing mix of benchmarks from all over China to determine the subsidy rate for a single province, so you can see

[00:06:39] Speaker 00:
Commerce does not designate a single benchmark province.

[00:06:43] Speaker 00:
If it did, you would expect to see a solid yellow line.

[00:06:46] Speaker 03:
So there's a benchmark per category.

[00:06:49] Speaker 00:
There is a benchmark per category, but this is a single program.

[00:06:53] Speaker 00:
It was alleged as a single program.

[00:06:55] Speaker 00:
Commerce considered it as a single program.

[00:06:58] Speaker 00:
But they did not designate a single region that was subsidized or a single region that was the benchmark that was unsubsidized.

[00:07:06] Speaker 00:
They're literally all over the map.

[00:07:09] Speaker 03:
So just getting back to your opening brief, what is your position on what's the right construction?

[00:07:16] Speaker 00:
The right construction.

[00:07:18] Speaker 00:
Yeah, the right construction.

[00:07:20] Speaker 00:
So turning back quickly to the relevant portion of the CVD statute,

[00:07:25] Speaker 00:
Commerce, in order to countervail a regional subsidy program, which is alleged here, Commerce must make a finding that it is limited to an enterprise or industry within a designated geographical region.

[00:07:40] Speaker 00:
Commerce is permitted to use adverse facts available, and that comes under a separate section of Title 19, 19 USC 1677E.

[00:07:50] Speaker 00:
But that also has limits.

[00:07:52] Speaker 00:
Commerce is allowed to use AFA if there's a gap in the record and a party is uncooperative, but only, and I'm quoting here, in reaching the applicable determination under this title.

[00:08:03] Speaker 00:
The applicable determination under Title 19 is in the CBD statute, and that's the designated geographical region.

[00:08:11] Speaker 00:
Commerce ignored this statutory requirement.

[00:08:15] Speaker 00:
Their determination was vague.

[00:08:17] Speaker 00:
Commerce determined, and I quote, that the government of China has subsidized electricity consumers in certain regions, and that the prices in the provinces in which the respondents are located are preferential.

[00:08:31] Speaker 00:
You'll notice that Commerce does not name a specific geographic location that they can point to on a map.

[00:08:36] Speaker 01:
But isn't that exactly because of the Chinese government's noncompliance?

[00:08:41] Speaker 01:
I mean, they wouldn't give Commerce the information to verify which regions receive subsidies.

[00:08:47] Speaker 01:
Your argument's very circular.

[00:08:49] Speaker 01:
The government wouldn't provide the information that was necessary to determine which regions received subsidies, and now you're criticizing Commerce for not determining which regions got subsidies.

[00:09:01] Speaker 01:
seems awfully circular.

[00:09:02] Speaker 01:
With respect, Your Honor, the gap in the record, this problem that you're describing... The gap in the record, which is a direct result of the Chinese government's refusal to provide the verification information Commerce sought.

[00:09:14] Speaker 00:
That is correct.

[00:09:14] Speaker 00:
The gap in the record that Commerce found was a result of the government of China's non-correct cooperation is the exact problem that the AFA statute was designed to solve.

[00:09:25] Speaker 00:
Commerce

[00:09:26] Speaker 00:
If there is a gap, commerce may use inferences.

[00:09:29] Speaker 00:
They may substitute missing facts with inferences, and those inferences may be adverse, but they still need to make the determination required in the CBD statute.

[00:09:40] Speaker 00:
They can't skip the step.

[00:09:42] Speaker 00:
They need to connect the missing facts, insert the inferences, but still

[00:09:47] Speaker 00:
Designate the geographical region.

[00:09:49] Speaker 01:
Yes, but if they're incapable of figuring out which regions got subsidies, then how do they do that?

[00:09:56] Speaker 01:
Are you saying they can't use adverse facts under those circumstances because they can't designate which regions?

[00:10:03] Speaker 00:
Even if there's a gap in the record and they are correctly applying AFA, their hands, Congress' hands, were not tied.

[00:10:10] Speaker 00:
They still had options here.

[00:10:12] Speaker 00:
And we laid out some examples in our brief

[00:10:15] Speaker 00:
not to ask the court to substitute our judgment for Commerce's judgment, but to illustrate that they did have options.

[00:10:23] Speaker 00:
For examples, if you look at, Commerce could have determined that the Chinese province of Qinghai was the designated geographical region receiving the subsidy that had the lowest rates for normal use in the large industrial user category, which accounts for the majority of use

[00:10:43] Speaker 00:
by the respondents.

[00:10:44] Speaker 00:
This is a clear path to use AFA, which is still within the CVD statute.

[00:10:50] Speaker 00:
And a finding such as Qinghai being the designated region accomplishes the goals of the AFA statute.

[00:10:58] Speaker 00:
It fills the gap identified in the record that resulted from the alleged failure of the government of China to cooperate by inferring that the province with the lowest rates is the subsidized province.

[00:11:10] Speaker 03:
And second, it's still adverse to the non-cooperating party because the government of China actually reported in its... That example sounds like you want commerce to use adverse light instead of adverse facts available by just selecting the one province with the very lowest prices and drawing a conclusion there that there must have been a subsidy there

[00:11:40] Speaker 03:
but not for any of the other provinces that also had lower prices, just not as low as that one province?

[00:11:51] Speaker 00:
Commerce has flexibility here.

[00:11:52] Speaker 00:
There are other examples, and we give some in our brief.

[00:11:56] Speaker 00:
But they do have to make a determination as to the subsidized region.

[00:12:01] Speaker 00:
And we submit that low prices are a very rational indication of where the subsidy would be.

[00:12:09] Speaker 00:
If commerce could not reasonably infer that the low prices reflect the subsidized region, then why was it reasonable for commerce to infer that the high prices were the benchmarks?

[00:12:19] Speaker 00:
It's inconsistent.

[00:12:24] Speaker 03:
Well, I guess it's your point that maybe everybody was getting a subsidy, every province.

[00:12:31] Speaker 03:
And so even the province with the highest electricity price, maybe that's not a benchmark.

[00:12:38] Speaker 00:
Yes, Your Honor.

[00:12:39] Speaker 03:
But what, I don't understand what commerce would do in that circumstance.

[00:12:44] Speaker 03:
They can only work with the information that they have.

[00:12:48] Speaker 03:
You know, they have imperfect information here.

[00:12:51] Speaker 03:
And they have to make a choice.

[00:12:52] Speaker 03:
If anything, you know, all of these companies are getting a benefit by, in that circumstance, by commerce choosing and

[00:13:05] Speaker 00:
Deeming the highest price as being the one without getting a subsidy one very well it too could be getting subsidy I Do see have come to the end of my affirmative time I would like to answer the your honor's question and leave a couple minutes for rebuttal But you hit you get an important important point that commerce is here Finding that all regions are subsidized and that is contrary to the specificity test they're not permitted to

[00:13:34] Speaker 00:
to countervail duties against a widely available subsidy.

[00:13:39] Speaker 00:
And even though commerce says that they are not applying this to all regions of China, in fact they are when you look at their calculation.

[00:13:47] Speaker 00:
You see, first Canadian solar and the other mandatory respondent with affiliates all over China are found to be using the same regional program.

[00:13:58] Speaker 00:
Not only that, but

[00:14:02] Speaker 00:
Based on our research, no Chinese respondent has ever escaped a finding under this program because of their geographic location.

[00:14:10] Speaker 00:
This has become an automatic CVD rate whenever a case is filed, no matter where in China the subject merchandise is being produced.

[00:14:20] Speaker 00:
With that, I would ask the court to simply find that commerce's power to use AFA is limited.

[00:14:28] Speaker 00:
It cannot read the phrase designated geographical region

[00:14:31] Speaker 00:
Out of the CVD statute which is exactly what it did here.

[00:14:35] Speaker 00:
I would reserve my time for rebuttal.

[00:14:39] Speaker 01:
Mr. Miller?

[00:15:04] Speaker 02:
May it please the court.

[00:15:06] Speaker 01:
Mr. Miller, can I ask you a factual question to begin with?

[00:15:09] Speaker 01:
Opposing counsel suggested that Commerce actually found that every region was subsidized.

[00:15:14] Speaker 01:
I don't remember that finding.

[00:15:15] Speaker 01:
I agree Commerce used a higher rate than any region or benchmark, but that's not the same thing as finding that every region is subsidized, is it?

[00:15:26] Speaker 02:
That's correct, Your Honor.

[00:15:27] Speaker 01:
So I think that isn't that just a factually incorrect statement about what Commerce found?

[00:15:32] Speaker 02:
Yes, Your Honor, in that commerce did not have the requisite information from the government of China to fully understand the data of the record.

[00:15:42] Speaker 02:
The main grievance between Canadian solar and the government is how to interpret the price schedules.

[00:15:47] Speaker 02:
Well, the Department of Commerce asked the government of China about those price schedules, and that is exactly the gap in the record that was created by the government of China's lack of population.

[00:15:58] Speaker 02:
Specifically, I point the court to the remand determination at pages 15 and 16, which is APPX 1909 to 1910.

[00:16:07] Speaker 02:
Commerce asked for the provincial price proposals, they asked for a description of the cost elements and the price adjustments, and an explanation linking the particular costs to retail prices.

[00:16:18] Speaker 02:
This is the information that the government of China thwarted the Department of Commerce in investigating to fully understand the data of the record.

[00:16:27] Speaker 02:
Because they could not fully understand the data of the record, they lawfully applied an adverse inference when selecting from among the facts of the record and rendering its regional specificity determination.

[00:16:38] Speaker 02:
Specifically, the facts of the record that Commerce relied upon in making its determination was one, that the record shows that the central government still exerts oversight over prices.

[00:16:50] Speaker 02:
This is reflected in Notice 2909, as well as Notice 748.

[00:16:56] Speaker 02:
The other fact that they relied upon was this varying in prices amongst provinces.

[00:17:02] Speaker 02:
Those two facts, the fact that the prices vary amongst provinces and that the record shows that the central government still exerts some oversight over the prices, Commerce applied an adverse inference from those facts in making its determination.

[00:17:16] Speaker 01:
And listen to Judge Jen's earlier question to opposing counsel, which is that even though Commerce chose

[00:17:26] Speaker 01:
to look at the province with the highest rate and treat it as unsubsidized.

[00:17:31] Speaker 01:
We're not even sure that it is, in fact, unsubsidized.

[00:17:34] Speaker 01:
So it may well be that the adverse inference that Commerce drew isn't as adverse as reality really is.

[00:17:41] Speaker 02:
That's correct, Your Honor.

[00:17:42] Speaker 02:
Commerce drew no conclusions regarding hiring.

[00:17:44] Speaker 01:
And all the reasons for that is a direct result of the noncompliance by the Chinese government, its refusal to provide the information necessary to make the assessment.

[00:17:54] Speaker 02:
Yes, Your Honor.

[00:17:55] Speaker 02:
And importantly, the benchmark rate was drawn from facts of the record.

[00:17:59] Speaker 02:
Commerce didn't substitute some sort of data from the record through its application of AFA.

[00:18:04] Speaker 02:
They used actual rates reported by the respondents.

[00:18:06] Speaker 02:
And it's an important note here that the rate is 0.54%.

[00:18:10] Speaker 02:
This court has warned previously that rates shouldn't be aberrational.

[00:18:14] Speaker 02:
They shouldn't be punitive.

[00:18:15] Speaker 02:
They shouldn't be non-cooperative.

[00:18:18] Speaker 02:
This rate certainly doesn't reflect that type of circumstance here.

[00:18:21] Speaker 02:
This rate was drawn from facts of the record.

[00:18:25] Speaker 02:
And in fact, Commerce did select the highest rate from the varying categories amongst the regions.

[00:18:31] Speaker 01:
What about that part, the varying categories?

[00:18:33] Speaker 01:
I mean, that seems to be the only, that was the only part that sort of caused me some concern is why not the same one across the board?

[00:18:44] Speaker 01:
Why the highest one from each category?

[00:18:47] Speaker 02:
It goes to the purpose of applying adverse facts available.

[00:18:50] Speaker 02:
And this is reflected in this court's decision, ESSER.

[00:18:53] Speaker 02:
The purpose of adverse facts available is to deter noncompliance and to incentivize cooperation, and to ensure that the responding party doesn't receive a more favorable rate than if they had cooperated.

[00:19:05] Speaker 02:
So here.

[00:19:05] Speaker 01:
Well, when you say it's to deter noncompliance, it's starting to sound punitive, isn't it?

[00:19:12] Speaker 01:
Which it's not supposed to be.

[00:19:14] Speaker 02:
No, your honor, as you've noted, commerce lacked the requisite background information to fully understand the data.

[00:19:21] Speaker 02:
So in looking at the rates that were reported by the respondents, commerce selected the highest rates because as you noted, they couldn't discern which elements were subsidized and which regions were unsubsidized because they didn't have

[00:19:32] Speaker 02:
the data to understand where the market rates actually were set at.

[00:19:37] Speaker 02:
So because of that, and to ensure that the respondents didn't receive a more favorable rate than as if the government of China had cooperated, they selected facts from the record.

[00:19:47] Speaker 02:
They selected the highest rates from the record in selecting and determining their benchmark.

[00:19:53] Speaker 02:
And that's supported by the AFA statute.

[00:19:56] Speaker 03:
Well, what is it in the statute that permits commerce to, I hate to use the word cherry pick, but I'm going to use it, cherry pick, looking for the highest prices for the first category across all the provinces.

[00:20:15] Speaker 02:
Rather than just select one province.

[00:20:18] Speaker 02:
Certainly, Your Honor.

[00:20:20] Speaker 02:
So within the statute, there's the standard of maximum effort to provide information, this acting to the best of their ability.

[00:20:27] Speaker 02:
When it's determined that the government of China failed to act to its best of its ability, the statute allows the Department of Commerce to select data from the record and apply adverse inference from this.

[00:20:38] Speaker 02:
And in fact, this court

[00:20:40] Speaker 02:
considered this exact circumstance in the case of fine furniture.

[00:20:43] Speaker 03:
I understand what the goals of the AFA are.

[00:20:46] Speaker 03:
But the statute says something about located within a designated geographic region.

[00:20:53] Speaker 03:
And so I'm trying to figure out whether that means the right way to use AFA is to pick a geographic region and say, that's the benchmark region to use AFA.

[00:21:11] Speaker 02:
Yes, your honor.

[00:21:11] Speaker 02:
In fact, if we take the hypothetical raised by my colleagues of the King High province, let's say if commerce arbitrarily selected one province and used the electricity rate or the reported rates from that region as the benchmark rate.

[00:21:26] Speaker 02:
Well, as commerce has explained, they lack the requisite background information to fully understand

[00:21:32] Speaker 02:
how that price was set, what nature the central government through the NBRC influenced that rate.

[00:21:38] Speaker 02:
And so if commerce would have taken the approach that my colleagues encourage, it would have been arbitrary and there would have been no support in the record for that type of approach because commerce lacked the ability to fully understand how those prices were set and what way they were set.

[00:21:55] Speaker 02:
So without that understanding, commerce looked at the various reported prices and selected the highest rate through their application of adverse facts available in selecting benchmarks, which was permitted by the statute and was discussed by this court in fine furniture.

[00:22:10] Speaker 03:
What if all the provinces had the same price except one and that one province had a higher electricity price?

[00:22:23] Speaker 03:
So maybe you could draw a conclusion in that instance that, well, of the 20 provinces, maybe 19 of them are getting a subsidy.

[00:22:34] Speaker 03:
And they're all getting the exact same subsidy.

[00:22:38] Speaker 03:
Would that fact pattern fit this statute, which is talking about a subsidy located within a designated geographical region?

[00:22:47] Speaker 02:
It could, Your Honor.

[00:22:49] Speaker 02:
As Commerce noted in their remand determination, the missing information that made it difficult to understand how prices are set was they lacked the information to understand fully how these provinces set their rates, and to what degree the central government.

[00:23:04] Speaker 03:
What if the fact pattern was every province is getting the same subsidy?

[00:23:08] Speaker 03:
That's the conclusion drawn from some record evidence that there's some influence.

[00:23:15] Speaker 03:
Would that satisfy the statute?

[00:23:19] Speaker 02:
Well, Your Honor, I'm uncertain of your hypothetical.

[00:23:22] Speaker 02:
I will say, though, we know from the Samsung case, from the trial court, that there's no limitation on the geographic size or administration of a program for purposes of looking at this test of regional specificity.

[00:23:34] Speaker 03:
The test really is... Well, how would it be regionally specific in any way if the central government was giving the exact same subsidy to everybody in the country?

[00:23:45] Speaker 02:
Well, under that hypothetical, I would agree that that would be a non-regionally specific hypothetical.

[00:23:53] Speaker 02:
Looking at the Royal Thai case and the Samson case, both of those cases were examples where commerce differentiated between a metropolitan area versus the remaining portions of the country.

[00:24:04] Speaker 02:
And those examples show that there is no geographic size limitation or administration to a regional specificity analysis.

[00:24:14] Speaker 02:
The test is really, is the respondent or producer receiving a benefit as a consequence of their geographic location within the country?

[00:24:23] Speaker 02:
That's the real question here.

[00:24:24] Speaker 02:
And as the record reflects, the prices across the various regions vary, and commerce lack the requisite background information to fully understand the import of that data.

[00:24:34] Speaker 02:
This case really boils down to what inferences do you draw from the data.

[00:24:39] Speaker 02:
In commerce,

[00:24:40] Speaker 02:
made conclusions and applied adverse inferences in a manner that was unwanted by Canadian Solar, but that doesn't show that their determination is not supported by the record.

[00:24:50] Speaker 02:
In fact, both their determinations, the regional specificity determination, as well as their selection of a benchmark, is rooted in record evidence.

[00:24:59] Speaker 02:
It's precisely the price schedules that my colleagues from Canadian Solar have been referencing that form the basis for Commerce's regional specificity determination.

[00:25:09] Speaker 02:
as we've discussed, it's because of the variances of prices and the lack of knowledge as to why those prices vary and to what degree the central government is involved in setting those prices is what led commerce to apply their adverse inference.

[00:25:26] Speaker 01:
I'm going to try one more time to understand your argument about why it is

[00:25:31] Speaker 01:
that it's OK for commerce to pick the highest price component in each category, even though those price components may be coming from different geographic regions.

[00:25:43] Speaker 01:
I don't totally understand, again, why that's consistent with the statute.

[00:25:48] Speaker 01:
Can you explain it to me?

[00:25:50] Speaker 01:
It says 1677.5 AD4, I think that's the part, where it says, where a subsidy is limited to an enterprise or industry,

[00:26:02] Speaker 01:
located within a designated geographic region.

[00:26:05] Speaker 01:
Why doesn't that mean it has to be the same region?

[00:26:09] Speaker 01:
That commerce can definitely use the data from that region, but it's all got to come from the same region.

[00:26:16] Speaker 02:
It could be that it could come from the same region if commerce had the background information to understand that that region was a region being subsidized or non-subsidized, depending upon the influences of the central government or the influences of the provinces.

[00:26:30] Speaker 02:
It's this lack of information.

[00:26:32] Speaker 02:
that commerce couldn't draw the determinations that you've identified.

[00:26:35] Speaker 03:
The statute, one way to look at it is the subsidy determination is on a region by region basis, but also enterprise by enterprise basis, industry by industry basis, or industry within a region basis and enterprise within a region basis.

[00:26:55] Speaker 03:
And so it is arguably a little more granular than just

[00:27:01] Speaker 03:
only looking at geographic regions by geographic region basis?

[00:27:07] Speaker 02:
Yes, Your Honor.

[00:27:07] Speaker 02:
Well, the selection of the benchmark is a different legal framework than the determination of regional specificity.

[00:27:14] Speaker 02:
As we discussed previously, the regional specificity statute where it discusses this designated region, that portion of the statute is reflected in the legal framework that allows commerce to select a benchmark.

[00:27:28] Speaker 02:
Commerce has the regulations that describe how a benchmark is selected, but if it's unable to ascertain that information, it's permitted to apply an adverse inference when selecting a rate.

[00:27:39] Speaker 02:
This was discussed by this court in fine furniture in terms of using AFA to select a rate.

[00:27:44] Speaker 02:
Once you're in this realm of adverse facts available, the real question is just to ensure that the rate isn't aberrational, it isn't punitive,

[00:27:51] Speaker 02:
It isn't non-cooperative by the record.

[00:27:53] Speaker 02:
And as we discussed today, the benchmark selection is based in the record.

[00:27:58] Speaker 02:
And a rate of 0.54%, I would posit it, is not an aberrational or punitive rate.

[00:28:10] Speaker 02:
If there's no further questions, I would just ask that the court sustain Congress's decision regarding regional specificity.

[00:28:17] Speaker 01:
Thank you.

[00:28:21] Speaker 00:
Thank you your honor a few points on rebuttal the first goes to your questions about Chief Judge more question about

[00:28:47] Speaker 00:
did commerce determine that this program was specific to all regions and really urge the court to look at the difference between what commerce said and what they actually did.

[00:28:58] Speaker 00:
Commerce said, vaguely, as I pointed out earlier, that the government of China has subsidized certain regions, but what they did

[00:29:07] Speaker 00:
was apply this to all regions.

[00:29:09] Speaker 00:
Again, on that chart we looked at, if there was any place in China that did not receive this subsidy under Commerce's construct, you would see a solid yellow line going across that chart.

[00:29:19] Speaker 00:
No place in China escapes this subsidy.

[00:29:22] Speaker 00:
It cannot be, it is not regionally specific under the statute.

[00:29:26] Speaker 00:
The second is there was some discussion about the categories and how Commerce's benchmark choice was reasonable.

[00:29:34] Speaker 00:
It's important to note that Commerce made no finding

[00:29:37] Speaker 00:
that there is a separate subsidy being alleged in separate categories.

[00:29:42] Speaker 00:
Any discussion of this is post-hoc.

[00:29:46] Speaker 00:
Commerce claimed there was one program and there should be one single benchmark.

[00:29:53] Speaker 00:
The history of this program is also important because this is actually Commerce's third attempt to try to find that this program is somehow specific.

[00:30:01] Speaker 00:
First, it just claimed generally that it was specific.

[00:30:04] Speaker 00:
Then they claimed it was industry specific after being overturned by the court, court overturned industry specific, and now they're trying to say it's regionally specific.

[00:30:13] Speaker 00:
But I would just bring the court's attention back to the regional specificity section of the CBD statute.

[00:30:21] Speaker 00:
It says commerce, even under AFA, AFA does not read out this phrase, commerce must designate a geographical region

[00:30:29] Speaker 00:
that is subsidized in order to be upheld.

[00:30:34] Speaker 00:
Thank you.

[00:30:35] Speaker 01:
I thank both counsel.

[00:30:36] Speaker 01:
The case is taken under submission.