The ITC ruled today on the fate of mixed wax candles from China. There has been an anti dumping order on petroleum wax candles from China since 1988. Recently Target and others began importing wax candles made of vegetable oil and petroleum. The goods were not part of the original scope of the anti dumping order for petroleum was candles, they were not considered back in 1988 nor are the classified the same way under the harmonized tariff schedule.
But anti dumping scopes have nothing to do with harmonized tariff schedule. While on the other hand once the scope is set by the Commerce department it can not be changed lightly. This is because the International Trade Commission determines whether a set of imported products is injuring an U.S. industry at the same time the International Trade Administration is determining whether that same set of products is being exported at less than fair market value. In order for this double headed hydro to work they need to be considering the exact same set of products. Products can not be added or subtracted or the beast will get confused and the findings will be incorrect.
However, there is an exception to allow products to be included later into the scope after the investigation and this the anti circumvention prevention section, 19 U.S.C. 1677j. This section is written to insure minor changes in manufacturing or other changes, are not used to skip on by the anti dumping order. In this case Commerce contends the "later-developed" product exception applies to these mixed wax candles.
In additional to the merchandise being developed later there are five criteria for a finding of later developed merchandise. The dispute in the case was the whether mixed waxed candles were "later developed" or not. The Commerce Department came up with two criteria to determine whether a product is "later developed:" 1) whether there were significant changes in the product and 2) whether the product was commercially unavailable at the time of the original investigation. In the first Target case the court upheld these two criteria as a reasonable interpretation of the, 19 U.S.C. 1677j, statute.
The question now boils down to whether the mixed waxed candles were commercially available during the initial investigation. If they were, then they should have independently been included in the scope of the investigation and we can consider them outside of the scope now. If they were not commercially available, then they can considered be later developed products and now can be added into the scope, twenty years later under the anti circumvention exception, as later developed products.
Now all the parties have to hop into their respective time machines and try to show that mixed wax candles were around or not around back in 1988. Not surprising each time machine finds different evidence. The parties against later developed find, a patent for mixed wax candles filed before the initiation of the investigation, vegetable wax candles were listed in the original ITC investigation as more expensive candles not to be considered, and a few catalogs with vegetable wax candles in them. The parties for the later developed theory show 2200 some catalogs from the period without any mention of vegetable wax candles, and the government concludes that it could not find anyone making mixed wax candles in the United States or elsewhere.
The tie goes to the government. If this was a tie but even if it wasn't the court rules that Commerce is correct and "commercially available" must mean that the goods were being made at the time of the original investigation not just capable of being commercially available. So this should make some businesses weary when developing new products. Even new products or products that could be around prior to anti dumping investigations might find themselves the subject to anti dumping duties.