Court Opinion

ID: 858113
Source: CourtListenerOpinion
Date Created: 2013-04-16 15:24:55.316138+00
Date Added: 2024-06-11T11:41:17.764316
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

 UNION STEEL, LG HAUSYS, LTD., LG HAUSYS
 AMERICA, INC., AND DONGBU STEEL CO., LTD.,
             Plaintiffs-Appellants,

                          v.

                  UNITED STATES,
                  Defendant-Appellee,

                         AND

              NUCOR CORPORATION,
                Defendant-Appellee,

                         AND

     UNITED STATES STEEL CORPORATION,
               Defendant-Appellee.
             ______________________

                   2012-1248, -1315
                ______________________

   Appeal from the United States Court of International
Trade in No. 11-CV-0083, Judge Jane A. Restani.
                 ______________________

                Decided: April 16, 2013
                ______________________
2                                       UNION STEEL   v. US

   DONALD B. CAMERON, Morris Manning & Martin LLP,
Washington, DC, argued for plaintiffs-appellants. With
him on the brief were JULIE C. MENDOZA, R. WILL
PLANERT, BRADY W. MILLS, MARY S. HODGINS and
JEFFREY O. FRANK.

    L. MISHA PREHEIM, Trial Attorney, Civil Division,
Commercial Litigation Branch, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee, United States. With her on the brief were
STUART F. DELERY, Acting Assistant Attorney General,
JEANNE E. DAVIDSON, Director, and CLAUDIA BURKE,
Assistant Director. Of counsel on the brief was DANIEL J.
CALHOUN, Attorney, Office of the Chief Counsel for Import
Administration, United States Department of Commerce,
of Washington, DC.

    TIMOTHY C. BRIGHTBILL, Wiley Rein LLP, of Washing-
ton, DC, argued for defendant-appellee, Nurcor Corpora-
tion. With him on the brief was ALAN H. PRICE. Of
counsel were MAUREEN E. THORSON, LORI SCHEETZ,
ROBERT E. DEFRANCESCO, III, and TESSA V. CAPELOTO.

   JEFFREY D. GERRISH, Skadden, Arps, Slate, Meagher
& Flom, LLP, of Washington, DC, argued for defendant-
appellee, United States Steel Corporation. With him on
the brief were ROBERT E. LIGHTHIZER and ELLEN J.
SCHNEIDER.

    NEIL R. ELLIS and JILL CAIAZZO, for amici curiae, Ami
JTEKT Corporation, et al. and ROBERT A. LEPSTEIN and
ALEXANDER H. SCHAEFER counsel for NSK Corporation, et
al. and KEVIN M. O’BRIEN, DIANE A. MACDONALD and
CHRISTINE M. STREATFIELD, counsel for NTN Corporation,
et al.
 UNION STEEL   v. US                                      3
   TERENCE P. STEWART and GEERT DE PREST, Stewart
and Stewart, of Washington, DC, for amicus curiae,
Committee to support US Trade Laws.
                ______________________

  Before LOURIE, PLAGER, and WALLACH, Circuit Judges.
WALLACH, Circuit Judge.
    In the decision now on appeal, the United States
Court of International Trade affirmed the Department of
Commerce’s (“Commerce”) use of zeroing to determine
antidumping duties in administrative reviews, even
though Commerce no longer uses zeroing in investigations
establishing antidumping orders. This court has twice
considered whether such divergent practices constitute a
reasonable construction of Commerce’s governing statute,
both times remanding for Commerce to provide an expla-
nation. In the case now on appeal, Commerce has provid-
ed such an explanation. Union Steel, LG Hausys, Ltd., LG
Hausys America, Inc., and Dongbu Steel Co., Ltd. (collec-
tively, “Appellants”) appeal from the Court of Interna-
tional Trade’s decision that, in light of this explanation,
Commerce’s zeroing practices are a reasonable interpreta-
tion of statute. Union Steel v. United States, 823 F. Supp.
2d 1346, 1360 (Ct. Int’l Trade 2012) (“Union Steel”).
Because the Court of International Trade properly found
that Commerce’s interpretation of its governing statute is
in accordance with law, we affirm.
                       BACKGROUND
     Dumping occurs when imported merchandise is sold
for a lower price in the United States than it is sold in its
home market. This practice can harm domestic producers
who are selling the same goods at market value. See Sioux
Honey Ass’n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1046
(Fed. Cir. 2012). The antidumping duty statute provides
for the imposition of remedial duties to imported mer-
4                                          UNION STEEL   v. US
chandise sold, or likely to be sold, in the United States “at
less than fair value” when the relevant domestic industry
is harmed. 19 U.S.C. § 1673. “Sales at less than fair value
are those sales for which the ‘normal value’ (the price a
producer charges in its home market) exceeds the ‘export
price’ (the price of the product in the United States) or
‘constructed export price.”’ U.S. Steel Corp. v. United
States, 621 F.3d 1351, 1353 (Fed. Cir. 2010) (quoting 19
U.S.C. § 1677(35)(A)).
    Commerce calculates a “dumping margin,” which is
“the amount by which the normal value exceeds the
export price or constructed export price.” 1 19 U.S.C.
§ 1677(35)(A). Commerce relies upon three comparison
methods to calculate dumping margins:
    (1) Average-to-transaction, in which Commerce
        compares the weighted average of the normal
        values to the export prices (or constructed ex-
        port prices) of individual transactions.
    (2) Average-to-average, in which Commerce com-
        pares the weighted average of the normal val-
        ues to the weighted average of the export
        prices (or constructed export prices).
    (3) Transaction-to-transaction, in which Com-
        merce compares the normal value of an indi-

    1    Commerce calculates a “weighted average dump-
ing margin” by “dividing the aggregate dumping margins .
. . by the aggregate export prices . . . of such exporter or
producer.” 19 U.S.C. § 1677(35)(B). Put simply, a “dump-
ing margin” is a comparison of the normal value and the
export price (or constructed export price), whereas a
“weighted average dumping margin” is the aggregation of
the results of those comparisons.
 UNION STEEL   v. US                                      5
        vidual transaction to the export price (or con-
        structed export price) of an individual trans-
        action.
See Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Doc. No. 103–316,
vol. 1, at 842–43, reprinted in 1994 U.S.C.C.A.N. 3773
(“SAA”).
    Commerce calculates dumping margins both in inves-
tigations, which establish an antidumping order, and in
subsequent administrative reviews of that order. Follow-
ing an investigation, Commerce issues an antidumping
order which imposes a duty based upon the dumping
margin. See 19 U.S.C. §§ 1673a, 1673b(b), 1673b(d),
1673d(a), 1673d(c). Any exporter of the goods subject to
the antidumping order may annually request an adminis-
trative review to determine the exact amount by which
the foreign market value exceeds the U.S. price and
assess the precise amount of duties owed for their ex-
ports. 2 See 19 U.S.C. §§ 1675(a)(1), 1675(a)(2)(A).
     As explained in the SAA accompanying the Uruguay
Round Agreements Act (“URAA”) Commerce had a prac-
tice of using average-to-transaction comparisons to calcu-
late dumping margins in both investigations and
administrative reviews. SAA at 842. After adoption of the
URAA in 1995, Commerce switched to using average-to-
average or transaction-to-transaction comparisons in
antidumping duty investigations. 3 Id.; 19 U.S.C. § 1677f-

    2   “Commerce uses [the] weighted-average dumping
margin to calculate the duties owed on an entry-by-entry
basis.” Timken Co. v. United States, 354 F.3d 1334, 1338
(Fed. Cir. 2004).
    3    The statute carves out an exception, however, al-
lowing Commerce to use average-to-transaction compari-
sons if “there is a pattern of export prices (or constructed
export prices) for comparable merchandise that differ
6                                         UNION STEEL   v. US
1(d)(1)(A).    Commerce continued to use average-to-
transaction comparisons as its general practice in admin-
istrative reviews.
      In calculating the weighted average dumping margin,
Commerce has historically used a methodology called
“zeroing” where negative dumping margins (i.e., margins
of sales of merchandise sold at nondumped prices) are
given a value of zero and only positive dumping margins
(i.e., margins for sales of merchandise sold at dumped
prices) are aggregated. “That is, after [Commerce] com-
puted an average dumping margin for each averaging
group, if that averaging group . . . product did not have a
positive dumping margin, Commerce set the margin at
zero rather [than] at a negative number that would offset
a positive margin for another averaging group.” 4 Union
Steel, 823 F. Supp. 2d at 1350. The applicable statute, 19
U.S.C. § 1677(35)(A), does not mention zeroing. However,
as authority for this method, Commerce has emphasized
the part of the statute stating that the dumping margin
“means the amount by which the normal value exceeds the
export price or constructed export price of the subject
merchandise.” 19 U.S.C. § 1677(35)(A) (emphasis added).
    This court has repeatedly addressed zeroing and has
held 19 U.S.C. § 1677(35)(A) ambiguous and deferred to
Commerce’s reasonable interpretation of that statute.
Timken Co. v. United States, 354 F.3d 1334, 1342 (Fed.

significantly among purchasers, regions, or periods of
time.” 19 U.S.C. § 1677f-1(d)(1)(B). This is generally
referred to as “targeted” or “masked” dumping.
    4    In calculating weighted average dumping mar-
gins, Commerce creates an averaging group by grouping
together sales of merchandise for purpose of price compa-
rability based upon physical characteristics, referred to as
“models,” and assigns a control-number called
“CONNUM”. See Union Steel, 823 F. Supp. 2d at 1349.
 UNION STEEL   v. US                                    7
Cir. 2004) (applying Chevron analysis to determine that
Commerce’s practice of using zeroing in administrative
reviews was a reasonable interpretation of the statute);
Corus Staal BV v. Dep’t of Commerce, 395 F.3d 1343, 1347
(Fed. Cir. 2005) (“Corus”) (extending Timken to encom-
pass Commerce’s practice of zeroing in investigations).
Zeroing is controversial because some parties claim it
does not fully account for all of the comparable export
transactions, and so is not a “fair comparison” between
export price and normal value as required by Article 2.4
and 2.4.2 of the Anti-Dumping Agreement. See Panel
Report, United States—Laws, Regulations and Methodol-
ogy for Calculating Dumping Margins (“Zeroing”),
¶¶ 7.32, 7.33, WT/DS294/R (Oct. 31, 2005); aff’d Appellate
Report, United States—Laws, Regulations and Methodol-
ogy for Calculating Dumping Margins (“Zeroing”), ¶ 146,
WT/DS294/AB/R (Apr. 18, 2006); see also Dongbu Steel
Co. v. United States, 635 F.3d 1363, 1366 (Fed. Cir. 2011)
(characterizing zeroing as “controversial”).
    Commerce’s use of zeroing with average-to-average
comparisons in certain antidumping duty investigations
was challenged by the European Communities before the
World Trade Organization’s (“WTO”) Dispute Settlement
Body. See Panel Report, ¶¶ 7.32, 7.33. The WTO found
Commerce’s practice inconsistent with the United States’
international obligations, and Commerce determined that
it would cease using zeroing methodology in new and
pending investigations. See Antidumping Proceedings:
Calculation of the Weighted-Average Dumping Margin
During an Antidumping Investigation; Final Modifica-
tion, 71 Fed. Reg. 77,722 (Dec. 27, 2006). Instead, Com-
merce started using a method of “offsetting” to account for
sales made at less than fair value, such that some of the
dumping margins used to calculate a weighted average
dumping margin would be negative. U.S. Steel, 621 F.3d
at 1355.
8                                        UNION STEEL   v. US
    In 2011, this court considered a challenge to Com-
merce’s continuing use of zeroing in administrative re-
views in an earlier review of the same antidumping duty
order at issue in this case. In Dongbu, appellant Union
Steel argued “that it is unreasonable to construe a single
statutory provision [19 U.S.C. § 1677(35)] that applies to
both investigations and administrative reviews as having
opposite meanings depending on the nature of the anti-
dumping proceeding.” Dongbu, 635 F.3d at 1370. The
court determined that “[a]lthough 19 U.S.C. § 1677(35) is
ambiguous with respect to zeroing and Commerce plays
an important role in resolving this gap in the statute,
Commerce’s discretion is not absolute. Commerce must
provide an explanation for why the statutory language
supports its inconsistent interpretation.” Id. at 1372. The
decision of the Court of International Trade was vacated
and remanded for further proceedings “to give Commerce
the opportunity to explain its reasoning.” Id. at 1373.
    Shortly thereafter, but before Commerce had the
opportunity to provide an explanation, the court again
addressed Commerce’s practice of zeroing in administra-
tive reviews but not in investigations in JTEKT, stating
that Commerce
    failed to address the relevant question—why is it
    a reasonable interpretation of the statute to zero
    in administrative reviews, but not in investiga-
    tions? It is not illuminating to the continued
    practice of zeroing to know that one phase uses
    average-to-average comparisons while the other
    uses average-to-transaction comparisons. In or-
    der to satisfy the requirement set out in Dongbu,
    Commerce must explain why these (or other) dif-
    ferences between the two phases make it reasona-
    ble to continue zeroing in one phase, but not the
    other.
 UNION STEEL   v. US                                     9
JTEKT Corp. v. United States, 642 F.3d 1378, 1384–85
(Fed. Cir. 2011). Accordingly, the Court of International
Trade’s decision was vacated and the case was remanded
“in order for Commerce to provide its reasoning.” Id. at
1385.
    Commerce’s explanation is now before the court. At
the Court of International Trade, Appellants challenged
Commerce’s application of zeroing methodology to the
final results of the sixteenth administrative review for
imports of certain corrosion-resistant carbon steel flat
products from the Republic of Korea, the same antidump-
ing duty order at issue in Dongbu. Union Steel, 823 F.
Supp. 2d at 1347–48; see Dongbu, 635 F.3d at 1373. The
United States sought a voluntary remand from the Court
of International Trade in light of this court’s decision in
JTEKT, and the court granted the motion. J.A.96. On
remand, Commerce discussed the inconsistent use of
zeroing in administrative reviews and investigations, and
explained why it believed its interpretation is reasonable,
stating in summary:
   First [Commerce] has, with one limited exception,
   maintained a long-standing, judicially-affirmed
   interpretation of [19 U.S.C. § 1677(35)] pursuant
   to which [Commerce] does not consider export
   price to be a dumped price where normal value is
   less than export price. Pursuant to this interpre-
   tation, [Commerce] includes no (or zero) amount
   of dumping, rather than a negative amount of
   dumping, in calculating the aggregate weighted-
   average dumping margin where normal value is
   less than export price. Second, the limited excep-
   tion to this interpretation was not adopted as an
   arbitrary departure from established practice, but
   was adopted, instead, in response to a specific in-
   ternational obligation the Executive Branch de-
   termined to implement pursuant to the
   procedures established by the [URAA] for such
10                                        UNION STEEL   v. US
     changes in practice with full notice, comment and
     explanation thereof. Third, [Commerce’s] inter-
     pretation reasonably resolves the ambiguity in [19
     U.S.C. § 1677(35)] in a way that accounts for the
     inherent differences between the result of an av-
     erage-to-average comparison on the one hand and
     the result of an average-to-transaction comparison
     on the other.
Results of Redetermination Pursuant to Remand at 7 (Oct.
14, 2011) (“Remand Results”). 5 The Court of Internation-
al Trade sustained Commerce’s explanation, concluding
that Commerce “did not abuse its discretion in changing
its investigation methodology, but not its review method-
ology . . . in response to WTO decisions.” Union Steel, 823
F. Supp. 2d at 1360. This appeal followed. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

     5   It bears noting that Commerce has since revised
its methodology in administrative reviews using average-
to-average comparisons as the default method for calcu-
lating weighted average dumping margins. See Anti-
dumping Proceedings: Calculation of the Weighted-
Average Dumping Margin and Assessment Rate in Certain
Antidumping Duty Proceedings; Final Modification, 77
Fed. Reg. 8,101 (Feb. 14, 2012) (Final Modification for
Reviews). This change only applies prospectively. Id. As
part of the modification, Commerce indicated it would not
use the zeroing methodology, but instead would allow for
offsets when making average-to-average comparisons in
administrative reviews. Id. This modification does not
foreclose the possibility of using zeroing methodology
when Commerce employs a different comparison method
to address masked dumping concerns. See id.
 UNION STEEL   v. US                                     11
                        DISCUSSION
     While we recognize the Court of International Trade
has unique and specialized expertise in trade law, 6 its
decision is reviewed de novo, applying anew the same
standard used by that court in its consideration of Com-
merce’s determination. Dongbu, 635 F.3d at 1369. Ac-
cordingly, Commerce’s antidumping determination will be
upheld unless it is “unsupported by substantial evidence
on the record, or otherwise not in accordance with law.”
19 U.S.C. § 1516a(b)(1)(B)(i). We apply a two-part inquiry
to determine whether to sustain Commerce’s statutory
interpretation. See Chevron, U.S.A., Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 842–43 (1984). First, we
determine “whether Congress has directly spoken to the
precise question at issue.” Id. at 842. If so, we “must give
effect to the unambiguously expressed intent of Con-
gress.” Id. at 842–43. “[I]f the statute is silent or ambigu-
ous with respect to the specific issue,” however, “the
question for the court is whether the agency’s answer is
based on a permissible construction of the statute.” Id. at
843.
    The question here, as in Dongbu and JTEKT, is
whether it is reasonable for Commerce to use zeroing in
administrative reviews even though it no longer uses
zeroing in investigations. See Dongbu, 635 F.3d at 1369;

    6    “The expertise of the Court of International Trade
. . . guides it in making complex determinations in a
specialized area of the law. . . .” United States v. Haggar
Apparel Co., 526 U.S. 380, 394 (1999); see also Ad Hoc
Shrimp Trade Action Comm. v. United States, 618 F.3d
1316, 1321 (Fed. Cir. 2010) (quoting Int’l Trading Co. v.
United States, 281 F.3d 1268, 1274) (Fed. Cir. 2002) (“the
Court of International Trade ‘has expertise in addressing
antidumping issues and deals on a daily basis with the
practical aspects of trade practice.”’).
12                                         UNION STEEL   v. US
JTEKT, 642 F.3d at 1384–85. Our analysis of the issue,
however, is now aided by Commerce’s explanation why
the ambiguous statute, 19 U.S.C. § 1677(35), supports use
of zeroing in administrative reviews and not in investiga-
tions. Thus, our task is now to determine whether Com-
merce’s explanation of its zeroing practice is a reasonable
interpretation of the statute.
    Commerce’s decision to modify its zeroing practice has
previously been sustained by this court. In U.S. Steel, the
court sustained Commerce’s decision to cease zeroing
when making average-to-average comparisons in anti-
dumping duty investigations while recognizing Commerce
intended to continue zeroing in other circumstances. See
U.S. Steel, 621 F.3d at 1355 n.2, 1362–63. The court
relied upon the differences among various types of com-
parison methodologies, recognizing that 19 U.S.C.
§ 1677f-1(d)(1) allows Commerce to use average-to-
transaction comparisons in investigations where certain
patterns of significant price differences exist. Id. at 1362.
Additionally, the court sustained Commerce’s decision to
use zeroing methodology in an administrative review
using average-to-transaction comparisons. SKF USA Inc.
v. United States, 630 F.3d 1365, 1375 (Fed. Cir. 2011). In
SKF, the court stated that “[e]ven after Commerce
changed its policy with respect to original investigations,
we have held that Commerce’s application of zeroing to
administrative reviews is not inconsistent with the stat-
ute.” Id.
    Contrary to Appellants’ assertions, Commerce’s rea-
sonable interpretation of the statute is not foreclosed by
this court’s prior decisions. 7 In Corus, the court held that

     7  Amici JTEKT Corp., Koyo Corp. of U.S.A., NSK
Ltd., NSK Corp., NTN Corp., NTN Bearing Corp. of
America, American NTN Bearing Mfg. Corp., NTN-Bower
Corp., and NTN Driveshaft, Inc., have forthrightly con-
ceded as much, stating: “But the [c]ourt in Donbgu and
 UNION STEEL   v. US                                    13
the statute was equally ambiguous for both administra-
tive reviews and investigations and thus Commerce may
use zeroing in both despite using different comparison
methodologies in each. Corus, 395 F.3d at 1347. Although
this court noted, in dicta, that “[i]t may be that Commerce
cannot justify using opposite interpretations of 19 U.S.C.
§ 1677(35) in investigations and in administrative re-
views,” Dongbu, 635 F.3d at 1373, neither Dongbu nor
JTEKT foreclosed the opportunity for Commerce to pro-
vide an explanation. Instead, both cases specifically
requested that Commerce do so. Id.; JTEKT, 642 F.3d at
1384–85. Commerce’s explanation now on review demon-
strates that its varying interpretations are reasonable
given the distinction between the comparison methodolo-
gies used in investigations and administrative reviews.
Moreover, Commerce attributes the differing interpreta-
tions as necessary to comply with international obliga-
tions, while preserving a practice that serves recognized
policy goals. Each of these analyses will be discussed in
turn.
                            1.
    Commerce justifies using zeroing in administrative re-
views but not in investigations in part based on the
different comparison methodologies used in each. Com-
merce explained in its Remand Results that average-to-
average comparison methodology typically used in inves-
tigations is useful for examining an exporter’s or manu-
facturer’s overall pricing behavior. Remand Results at 13.
Overall pricing behavior helps determine the appropri-
ateness of imposing an antidumping duty order on a
particular product. Id. With an antidumping duty order

JTEKT stopped well short of a categorical answer, instead
affording [Commerce] an opportunity to further explain
and justify its disparate interpretations.” Amicus Br. in
Support of Plaintiffs-Appellants and Reversal at 7–8.
14                                        UNION STEEL   v. US
already in place, administrative reviews typically use
average-to-transaction comparison methodology which
permits greater specificity to determine pricing behavior
for individual transactions. Id. The greater specificity
afforded through that methodology furthers the transac-
tional accuracy interests of administrative review. Union
Steel, 823 F. Supp. 2d at 1359. We agree with the Court
of International Trade’s explanation that this distinction
is supported by statute: “Specificity is less important in
investigations in that [product group (CONNUM)] aver-
ages in investigations are not even monthly averages, as
they are in reviews. Rather, they are averages over a
broad time period compared to all other broad averages.”
Id. (citing 19 U.S.C. § 1677f-1(d); 19 C.F.R.
§ 351.414(d)(3), (e)). However, “when it comes to setting
the final rates to be used for actual assessment, i.e., the
review rates, it is reasonable for the agency to look for
more accuracy, which it achieves in some measure
through monthly averaging, and also for the agency to
look for the full measure of duties resulting therefrom,
which it better achieves through zeroing.” Id. The Court
of International Trade noted that “parties who are mar-
ginally dumping or not dumping may be excluded from
the order pursuant to the looser standards of the investi-
gation.” Id. That is, in an investigation, margins of less
than two percent are treated as de minimis, resulting in a
party’s exclusion from the order, while in an administra-
tive review, margins of 0.5 percent or less are treated as
de minimis. Id.
    Commerce also explained that the average-to-average
methodology justifies the use of offsetting (i.e., not zero-
ing) for reasons inapplicable to average-to-transaction
comparisons. When using average-to-average compari-
sons, transactions are divided into “averaging groups.”
Remand Results at 11. Transactions are divided into
averaging groups on the basis of physical characteristics
and level of trade for the purpose of price comparison. Id.
 UNION STEEL   v. US                                    15
When calculating the average export price or constructed
export price, Commerce calculates a comparison result for
each averaging group, and averages together high and low
export prices within the group. Thus, those export prices
above normal value offset those below normal value
within the averaging group. Commerce then aggregates
the results of the comparison for each averaging group to
calculate a weighted average dumping margin. Id. at 11–
12. Accordingly, this comparison methodology masks
individual transaction prices below normal value with
other above normal value prices within the same averag-
ing group.
    In contrast, when Commerce uses the average-to-
transaction comparison method, as it did in this adminis-
trative review, Commerce compares the export price (or
constructed export price) for a particular export transac-
tion with an average normal value for the comparable
sales of foreign like products within the averaging group.
Id. at 12. For specific export transactions, Commerce
calculates a comparison result which establishes the
amount that transaction is priced at less than its normal
value. Id. Using this methodology, Commerce does not
average export transaction prices before comparing the
export price (or constructed export price) to normal value.
Instead, Commerce uses a single export transaction price
and aggregates the transaction-specific comparison result.
The average-to-transaction comparison methodology thus
reveals individual dumping.
    Commerce’s decision to use or not use the zeroing
methodology reasonably reflects unique goals in differing
comparison methodologies. In average-to-average com-
parisons, as used in investigations, Commerce examines
average export prices; zeroing is not necessary because
high prices offset low prices within each averaging group.
When examining individual export transactions, using the
average-to-transaction comparison methodology, prices
are not averaged and zeroing reveals masked dumping.
16                                       UNION STEEL   v. US
This ensures the amount of antidumping duties assessed
better reflect the results of each average-to-transaction
comparison. 8    Commerce’s differing interpretation is
reasonable because the comparison methodologies com-
pute dumping margins in different ways and are used for
different reasons.
                              2.
    Commerce also explained the methodology for investi-
gations was changed in response to an adverse WTO
decision through a section 123 proceeding. 9 In Dongbu,

     8   The Court has previously recognized the purpose
of relying on average-to-transaction comparison method-
ology in administrative reviews:
     The purpose of the antidumping statute is to pro-
     tect domestic manufacturing against foreign
     manufacturers who sell at less than fair market
     value. Averaging U.S. prices defeats this purpose
     by allowing foreign manufacturers to offset sales
     made at less-than-fair value with higher priced
     sales.    Commerce refers to this practice as
     “masked dumping.” By using individual U.S.
     prices in calculating dumping margins, Commerce
     is able to identify a merchant who dumps the
     product intermittently—sometimes selling below
     the foreign market value and sometimes selling
     above it. We cannot say that this is an unfair or
     unreasonable result.
Koyo Seiko Co., Ltd. v. United States, 20 F.3d 1156, 1159
(Fed. Cir. 1994) (internal citations omitted).
     9  Section 123 is the part of the URAA that laid out
the administrative procedure for response to adverse
WTO rulings. The U.S. Trade Representative consulted
public and private sector committees, and Commerce
provided for public comment before determining whether
 UNION STEEL   v. US                                    17
the government raised this rationale at oral argument,
and this court indicated that “the government’s decision
to implement an adverse WTO report standing alone does
not provide sufficient justification for the inconsistent
statutory interpretations.” Dongbu, 635 F.3d at 1372.
Nevertheless, it is within Commerce’s discretion to adopt
reasonable practices to meet international obligations.
Union Steel, 823 F. Supp. 2d at 1357–58. 10 Certainly, this
information is relevant when considered in conjunction
with the other explanations offered by Commerce.
    Section 123 establishes how an adverse WTO decision
may be implemented in domestic law. See 19 U.S.C.
§§ 3533; 3538. The WTO’s decision was limited; it found
that Commerce’s use of zeroing methodology with respect
to average-to-average comparisons in antidumping duty
investigations was inconsistent with the United States’s
international obligations. Panel Report ¶ 7.106. The
Executive Branch responded by discontinuing its zeroing
practice in new and pending investigations using average-
to-average comparison methodology. Antidumping Pro-
ceedings: Calculation of the Weighted-Average Dumping
Margin During an Antidumping Duty Investigation; Final
Modification, 71 Fed. Reg. 77,722 (Dec. 27, 2006); see U.S.
Steel, 621 F.3d at 1354–55. Commerce, did not, however,
alter its practice with respect to the use of zeroing meth-

and how to change its practice. See 19 U.S.C. § 3533;
Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin During an Antidumping Duty
Investigation; Final Modification, 71 Fed. Reg. 77,722
(Dec. 27, 2006).
    10  This court sustained Commerce’s decision to cease
zeroing in average-to-average comparisons in investiga-
tions, while acknowledging that Commerce intended to
continue to use zeroing in other types of comparisons
methods. U.S. Steel, 621 F.3d at 1355 n.2 1362–63.
18                                       UNION STEEL   v. US
odology in anything other than investigations using
average-to-average comparisons. “[T]here is no reason to
assume that [Commerce’s] only legal option is to expand
the exception to apply in all contexts.” Remand Results at
18. Commerce may reasonably decline to take any action
beyond that which is necessary for it to come into compli-
ance. See ThyssenKrupp Acciai Speciali Terni S.p.A. v.
United States, 603 F.3d 928, 934 (Fed. Cir. 2010) (affirm-
ing Commerce’s determination to only address that which
was necessary to bring its determination into accordance
with a WTO ruling). Commerce’s modification was lim-
ited to changes that were necessary to comply with the
WTO decision.
    Citing Clark v. Martinez, 543 U.S. 371 (2005), 11 Ap-
pellants argue that it is unreasonable to construe a single
statutory provision that applies in both investigations and
administrative reviews as having different meanings
depending on the type of antidumping proceeding. In
Clark, the Supreme Court relied upon the rule of lenity to
support a limiting construction of a statutory provision
concerning detention of aliens subject to removal from the
United States. Clark, 543 U.S. at 380–81. The Supreme
Court applied traditional rules of statutory construction,
and never considered Chevron deference in reaching its
determination. See Clark, 543 U.S. 371. Here, the court
has repeatedly held that 19 U.S.C. § 1677(35) is ambigu-
ous and Commerce’s explanation of its interpretation
must be reasonable. See Timken, 354 F.3d at 1342; Corus,
395 F.3d at 1347; U.S. Steel, 621 F.3d at 1361. Thus,
Clark is distinguishable here, where there is a conflict
between two permissible interpretations simultaneously
maintained.

     11 In Clark, the majority determined that a single
statutory provision cannot be given different meanings
when applied to different categories of aliens. Clark, 543
U.S. at 378.
 UNION STEEL   v. US                                     19
     No rule of law precludes Commerce from interpreting
19 U.S.C. § 1677(35) differently in different circumstances
as long as it provides an adequate explanation. “[I]f the
agency adequately explains the reasons for a reversal of
policy, ‘change is not invalidating, since the whole point of
Chevron is to leave the discretion provided by the ambigu-
ities of a statute with the implementing agency.”’ Nat’l
Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545
U.S. 967, 981 (2005) (quoting Smiley v. Citibank (South
Dakota), N.A., 517 U.S. 735, 742 (1996)). 12
                        CONCLUSION
    For these reasons, the Court of International Trade’s
decision is affirmed.
                       AFFIRMED

    12   Somewhat similarly, this court remanded a case
for Commerce to provide an explanation of why interpret-
ing the term “foreign like product” could be construed to
mean different things in different parts of the antidump-
ing statute. SKF USA Inc. v. United States, 263 F.3d
1369, 1382–83 (Fed. Cir. 2001). Following the remand,
this court noted that 19 U.S.C. § 1677(16) contains three
subsections providing three alternative definitions for the
term “foreign like product” and that there was no re-
striction that Commerce use just one of those subsections
per proceeding. FAG Kugelfisher Georg Shaefer AG v.
United States. 332 F.3d 1370, 1373 (Fed. Cir. 2003). The
court held that it was therefore reasonable for Commerce
to apply the definition in one subsection for purposes of
price-based calculations for normal value under 19 U.S.C.
§ 1677b(a)(1), while applying the definition in a different
subsection for purposes of establishing constructed value
under 19 U.S.C. § 1677b(e)(2)(A). Id. at 1373–74; see SKF,
263 F.3d at 1382–83.