From the GPX opinion by the U.S. Court of Appeals for the Federal Circuit, released today:
In this consolidated countervailing duty case, the U.S. Court of International Trade (“Trade Court”) ordered the U.S. Department of Commerce (“Commerce”) not to impose countervailing duties on goods from China, a nonmarket economy (“NME”) country. See GPX Int’l Tire Corp. v. United States (“GPX III”), No. 08-00285, 2010 WL 3835022 (Ct. Int’l Trade Oct. 1, 2010). The Trade Court held that Commerce’s 2007 interpretation of countervailing duty law as permitting the imposition of such duties was “unreasonable” because of the high likelihood of “double counting” when both countervailing duties and antidumping duties are assessed against goods from NME countries. GPX Int’l Tire Corp. v. United States (“GPX I”), 645 F. Supp. 2d 1231, 1240 (Ct. Int’l Trade 2009). We affirm, but on a different ground: we find that when amending and reenacting countervailing duty law in 1988 and 1994, Congress legislatively ratified earlier consistent administrative and judicial interpretations that government payments cannot be characterized as “subsidies” in a non-market economy context, and thus that countervailing duty law does not apply to NME countries.
...
We thus find that in amending and reenacting the trade laws in 1988 and 1994, Congress adopted the position that countervailing duty law does not apply to NME countries. Although Commerce has wide discretion in administering countervailing duty and antidumping law, it cannot exercise this discretion contrary to congressional intent. We affirm the holding of the Trade Court that countervailing duties cannot be applied to goods from NME countries. As we concluded in Georgetown Steel, if Commerce believes that the law should be changed, the appropriate approach is to seek legislative change. See Georgetown Steel, 801 F.2d at 1318 (“If [the existing] remedy is inadequate to protect American industry from such foreign competition—a question we could not possibly answer—it is up to Congress to provide any additional remedies it deems appropriate.”)
