                          Slip Op. 06-11

           UNITED STATES COURT OF INTERNATIONAL TRADE


______________________________
                              :
INTERNATIONAL IMAGING         :
MATERIALS, INC.               :
                              :
          Plaintiff,          :
                              :
               V.             : Before: Richard K. Eaton, Judge
                              :
                              : Court No. 04-00215
UNITED STATES INTERNATIONAL   : Public Version
TRADE COMMISSION,             :
                              :
                              :
          Defendant.          :
                              :
______________________________:


                        OPINION AND ORDER

[United States International Trade Commission’s final negative
determination on wax and wax/resin thermal transfer ribbons
remanded]

                                        Dated: January 23, 2006


     Steptoe & Johnson, LLP (Richard O. Cunningham, Tina Potuto
Kimble, and Thomas J. Trendl), for plaintiff.


     James M. Lyons, General Counsel, United States International
Trade Commission; Neal J. Reynolds, Acting Assistant General
Counsel, United States International Trade Commission (Andrea C.
Casson), for defendant.


     Wiley Rein & Fielding LLP (Alan H. Price and Daniel B.
Pickard), for defendant-intervenors Armor U.S.A. and Armor, S.A.


     Paul, Hastings, Janofsky & Walker LLP (Hamilton Loeb and
Alexander W. Koff), for defendant-intervenors DNP IMS America
Corp. and Dai Nippon Printing Co., Ltd.
Court No. 04-00215                                              Page 2

     Eaton, Judge:    This matter is before the court following the

motion of plaintiff International Imaging Materials, Inc.

(“IIMAK”) for judgment upon the agency record pursuant to USCIT

Rule 56.2.   By its motion, IIMAK contests the final negative

determinations of the U.S. International Trade Commission (“ITC”

or “Commission”) in the antidumping duty investigations

concerning certain wax and wax/resin thermal transfer ribbons

(“TTR”) from France and Japan.     See Certain Wax and Wax/Resin

Thermal Transfer Ribbons From France and Japan Determinations, 69

Fed. Reg. 20,949     (Apr. 19, 2004) (“Final Determination”).   In

its Final Determination, the ITC found that the domestic industry

was not injured or threatened with injury by reason of subject

imports.



     The court has jurisdiction over this matter pursuant to 28

U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(iii)

(2000).    For the reasons set forth below, this matter is remanded

to the ITC for action in accordance with this opinion.



                              BACKGROUND

     TTRs are ink-covered strips of film used in barcode printers

and fax machines.     See Certain Wax and Wax/Resin Thermal Transfer

Ribbons from France and Japan, Inv. Nos. 731-TA-1039-1040

(Final), Confidential Views of the Commission (April 2004), Conf.
Court No. 04-00215                                              Page 3

R. Doc. 314 (“ITC Views”).     The first two steps in producing TTR,

ink-making and coating, are done exclusively by “coaters” that

possess the machinery and equipment necessary to perform that

work.    Id. at 3.   These steps yield “jumbo rolls.”   The jumbo

rolls are put through two additional production steps, slitting

and packaging, by “slitters” before being sold on the open

market.    Id.   The additionally-processed product produced by the

slitters is known as finished TTR.     Id. at 3 n.5.    Finished TTR

falls into two categories: fax TTR, also known as “finished fax

TTR” or “slit-fax TTR” and non-fax TTR, also known as “barcode

TTR.”    There are few U.S. sales of imported jumbo rolls because

wholly-owned subsidiaries of foreign-based coaters (i.e., U.S.-

based slitters) largely consume the rolls themselves to produce

finished fax TTR and barcode TTR.     Id. at 30.1



                          STANDARD OF REVIEW

     The court will hold unlawful “any determination, finding, or

conclusion found . . . to be unsupported by substantial evidence

on the record, or otherwise not in accordance with law . . . .”

19 U.S.C. § 1516a(b)(1)(B)(I).     Substantial evidence is “such

relevant evidence as a reasonable mind might accept as adequate



     1
          The ITC “refer[s] to TTR that is slit and packaged as
‘finished TTR’ but note[s] that parties often used the terms
‘slit’ or ‘slitted’ synonymously with ‘finished.’” ITC Views at 3
n.5.
Court No. 04-00215                                            Page 4

to support a conclusion.”   Consol. Edison Co. v. NLRB, 305 U.S.

197, 229 (1938) (citations omitted).   It “requires ‘more than a

mere scintilla,’ but is satisfied by ‘something less than the

weight of the evidence.’”   Altx, Inc. v. United States, 370 F.3d

1108, 1116 (Fed. Cir. 2004) (quoting Atl. Sugar, Ltd. v. United

States, 744 F.2d 1556, 1562 (Fed. Cir. 1984); Matsushita Elec.

Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984)).

The existence of substantial evidence is determined “by

considering the record as a whole, including evidence that . . .

‘fairly detracts from the substantiality of the evidence.’”

Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369,

1374 (Fed. Cir. 2003) (quoting Atl. Sugar, 744 F.2d at 1562).      In

conducting its review, the court’s function is not to reweigh the

evidence but rather to ascertain “whether there was evidence

which could reasonably lead to the Commission’s

conclusion . . . .”   Matsushita, 750 F.2d at 933.   The

possibility of drawing two inconsistent conclusions from the

record evidence does not, in itself, prevent the ITC’s

determinations from being supported by substantial evidence.

Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966) (citations

omitted); Altx, 370 F.3d at 1116.
Court No. 04-00215                                            Page 5

                            DISCUSSION

     Plaintiff makes two primary arguments as to why the ITC’s

Final Determination is flawed.   First it claims that the

Commission erred in its definition of the domestic like product

and second, that in its volume and price effects analysis, the

ITC should have looked beyond the limited competition for jumbo

rolls to downstream competition for finished TTR.



I.   Domestic Like Product — The ITC’s Use of Its Six-Factor
     Analysis

     In order to determine whether a domestic industry is

materially injured or threatened with material injury, the ITC

must define the domestic like product.   See 19 U.S.C. § 1677(10).

While Commerce determines the scope of its less than fair value

investigation, the ITC is responsible for identifying “the

corresponding universe of items produced in the United States

that are like[,] or in the absence of like, most similar in

characteristics and uses with the items in the scope of the

investigation.”   Def.’s Mem. in Opp’n to Pl.’s Mot. J. Agency R.

(“Def.’s Mem.”) at 15; see also 19 U.S.C. § 1677(10).   After the

ITC has determined what constitutes the domestic like product, it

must next examine “the volume of imports, their effect on prices

for the domestic like product, and their impact on domestic

producers of the domestic like product . . . .”   ITC Views at 27;

see also 19 U.S.C. § 1677(7)(B)(i)(I)-(III).   All of these
Court No. 04-00215                                            Page 6

factors are considered “within the context of the business cycle

and conditions of competition that are distinctive to the

affected industry.”    19 U.S.C. § 1677(7)(C)(iii).



     The ITC defines domestic like product by determining whether

there are “clear dividing lines” between any of the domestically-

produced items that would warrant finding more than one item to

be part of the definition or excluding an item from the

definition.     NEC Corp. v. Dep’t of Commerce, 22 CIT 1108, 1110,

36 F. Supp. 2d 380, 383 (1998).    That is, if the ITC concludes

that there are no clear dividing lines between any of the

domestically produced items, it then includes them as part of the

domestic like product.     “The Commission’s decision regarding the

appropriate domestic like product is a factual determination,

where the Commission applies the statutory standard of ‘like’ or

‘most similar in characteristics and uses’ on a case-by-case

basis.”   Id.    The ITC’s findings with respect to domestic like

product may, but need not, match the scope of the investigation.

See Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568

(Fed. Cir. 1996) (explaining that the ITC has the discretion to

determine to what extent the class or kind of merchandise

described by Commerce falls within the scope).
Court No. 04-00215                                            Page 7

     In the Final Determination, the ITC used its previously

employed six-factor analysis,2 which compares (1) physical

characteristics and uses; (2) interchangeability; (3) channels of

distribution; (4) customer and producer perceptions; (5)

manufacturing facilities, production processes, and production

employees; and (6) price of the domestic products to the subject

imports.   See ITC Views at 8.   Using this analysis, the

Commission concluded that finished fax TTR was part of the

domestic like product.    See id. at 8–14.



     Plaintiff questions the use of the six-factor test,

insisting that the ITC erred in not applying a semifinished

product analysis, which seeks to determine “whether articles at

different stages of processing should be included in the same

like product.”3   Br. of IIMAK in Supp. of R. 56.2 Mot. J. Agency

R. (“Pl.’s Br.”) at 30.   As IIMAK explains in its brief:

     Under this [semifinished product] analysis, the ITC
     examines (1) whether the upstream article is dedicated
     to the production of the downstream article or has


     2
           See, e.g., Acciai Speciali Terni S.p.A. v. United
States, 24 CIT 1064, 1065 and n.4, 118 F. Supp. 2d 1298, 1300 and
n.4 (2000)(upholding the ITC’s use of its six-factor test); NMB
Singapore Ltd. v. United States, 27 CIT __, __, 288 F. Supp. 2d
1306, 1326 (2003)(sustaining the ITC’s use of the six-factor
analysis).
     3
          As with the six-factor analysis, the ITC has used the
semifinished product analysis in the past. See, e.g., Stainless
Steel Bar from Brazil, India, Japan, and Spain, Inv. No. 731-TA-
678, 679, 681, and 682 (Final), USITC Pub. No. 2856 (1995).
Court No. 04-00215                                          Page 8

     independent uses; (2) whether there are perceived to be
     separate markets for the upstream and downstream
     articles; (3) differences in the physical
     characteristics and functions of the upstream and
     downstream articles; (4) differences in the costs or
     value of the vertically differentiated articles; and
     (5) the significance and extent of the processes used
     to transform the upstream into the downstream articles.


Pl.’s Br. at 31 n.32.   Thus, using IIMAK’s preferred methodology,

the upstream product jumbo rolls would be compared to the

downstream products barcode TTR and finished fax TTR.   IIMAK

explains:

     Applying the semifinished product analysis in this case
     would have [led] to the conclusion that [finished] fax
     TTR is not part of the same like product as certain
     TTR.4 Jumbo rolls are not dedicated to the production
     of [finished] fax TTR. . . . [T]here are separate
     markets for jumbo and [finished] fax TTR. There are
     also differences in physical characteristics and
     functions of jumbo rolls (which are large rolls
     designed to be slit) and [finished] fax TTR (which are
     used as a component part in fax machines and come in
     more advanced packaging). While jumbo rolls are
     completely fungible products with little or no
     distinguishing features between products of the same
     type, [finished] fax TTR is a tailor-made product. The


     4
          IIMAK notes that finished fax TTR was specifically
excluded from Commerce’s scope determination.

     The scope includes jumbo rolls of wax TTR that are used
     in facsimile and multifunction thermal transfer
     printing devices . . . jumbo rolls of wax/resin TTR
     that are used in bar code printing devices . . . and
     rolls of bar code TTR that have been slit and finished
     for use in specific printing devices (“finished TTR”).
     The scope, however, excludes rolls of fax TTR that have
     been slit and finished for use in other specific
     printing devices (“finished fax TTR”).

ITC Views at 7 (footnote omitted) (internal citation omitted).
Court No. 04-00215                                            Page 9

     functions of TTR in jumbo roll form and [finished] fax
     TTR are also different. Jumbo TTR rolls have no
     purpose other than slitting. They are, however,
     primarily slit into subject barcode TTR. [Finished] fax
     TTR is inserted into fax machines in which it is used
     for thermal transfer printing.

Pl.’s Br. at 31–32 (internal citations omitted). IIMAK asserts

that it is entitled to the use of the semifinished product

analysis based on its utilization in previous cases, in

particular Chlorinated Isocyanurates From China and Spain, Inv.

Nos. 731-TA-1082-1083 (Prelim.), USITC Pub. No. 3705 (2004).5

Plaintiff contends that the ITC, having previously used the

semifinished product analysis, is bound to continue to use it in

this case.   “The ITC must pick a methodology to apply to certain

factual circumstances and only depart from it when it provides a

reasoned justification for doing so.”    Pl.’s Br. at 31.



     The ITC maintains that “IIMAK’s discussion of ITC factual

determinations as though they were precedential is wrong as a

matter of law.”   Def.’s Mem. at 11.   In making this claim, the

Commission relies on Ranchers-Cattlemen Action Legal Found. v.

United States, 23 CIT 861, 74 F. Supp. 2d 1353 (1999), in which

     5
          In that case, the scope included all chemical and
physical forms of chlorinated isocyanurates (“isos”), and the ITC
concluded that multiple forms of isos were the same like product.
Nonetheless, the ITC used the semifinished product analysis to
determine whether two different physical forms of isos, granular
and tableted, were also part of the like product. IIMAK argues
that this decision “stands in direct contradiction of the ITC’s
position in the instant case.” Pl.’s Br. at 31.
Court No. 04-00215                                           Page 10

the Court explained that “[a]n action by the ITC becomes an

‘agency practice’ when a uniform and established procedure exists

that would lead a party, in the absence of notification of

change, reasonably to expect adherence to the established

practice or procedure.”     Id. at 884–85, 74 F. Supp. 2d at 1374.

According to the Commission, ITC decisions must be “‘based upon

an independent evaluation of the factors with respect to the

unique economic situation of each product and industry under

investigation.’”     Id. at 885, 74 F. Supp. 2d at 1374 (quoting

Citrosuco Paulista, S.A. v. United States, 12 CIT 1196, 1209, 704

F. Supp. 1075, 1087–88 (1988)); see also Nucor Corp. v. United

States, 28 CIT __, __, 318 F. Supp. 2d 1207, 1247 (2004) (noting

that each investigation involves a “‘unique combination and

interaction of many economic variables . . . .’”) (quoting

Ranchers-Cattlemen, 23 CIT at 891, 74 F. Supp. 2d at 1379).     The

Commission further contends that IIMAK has not shown that it

deviated from an established practice or procedure, since it

applied its six-factor analysis, which it had previously employed

on a number of occasions.     See Def.’s Mem. at 11.



      The court agrees that the ITC’s prior factual

determinations cited by IIMAK do not constitute precedent that

the Commission is bound to follow.    First, as with all

investigations, the present fact pattern is not precisely the
Court No. 04-00215                                           Page 11

same as any with which the ITC has been presented.   As such,

while some of the facts may have appeared in other

investigations, the totality of the facts is unique.     See, e.g.,

Committee for Fair Beam Imports v. United States, 27 CIT __, __,

slip op. 03-73 at 25 (June 27, 2003) (not reported in the Federal

Supplement), aff’d, 95 Fed. Appx. 347 (Fed. Cir. 2004) (“[T]he

fact that similar patterns are observed in different

investigations with regard to some of the variables does not

preclude a different interpretation of the patterns after viewing

the entire economic environment as a whole.”); see also

Citrosuco, 12 CIT at 1209, 704 F. Supp. at 1087 (“[E]ach injury

investigation is sui generis, involving a unique combination and

interaction of many economic variables; and consequently, a

particular circumstance in a prior investigation cannot be

regarded by the Commission as dispositive of the determination in

a later investigation.”) (internal quotation omitted).     Nor does

the court find that the ITC had established an “agency practice”

from which it deviated in this case.   As is noted in Ranchers-

Cattlemen, an agency practice is established when a uniform

procedure exists that would lead a party to reasonably expect

that the agency would adhere to the procedure.   Id. at 884–85, 74

F. Supp. 2d at 1374.   Here, an examination of the prior

investigations cited by both parties reveals that the ITC has

chosen the six-factor test in some instances and the semifinished
Court No. 04-00215                                           Page 12
product analysis in others with not wholly dissimilar fact

patterns.6   Thus, IIMAK cannot claim any reasonable expectation

that its preferred methodology would be used.



     Nonetheless, the ITC’s decision to use the six-factor

analysis has not been sufficiently explained to justify its

utilization in this case. Here, the ITC does nothing more than

state its conclusion that “it found the traditional six-factor

test to be the more useful to address the issue of whether to

include finished fax TTR in the domestic like product because the

scope included products that are at the same level of processing

as the finished fax TTR.”   Def.’s Mem. at 26.   The Commission

further claims that because “[t]he aim of both the traditional

six-factor test and the semifinished product analysis is the same

– to ascertain whether there is a clear dividing line between

products,” id. at 25, it has the discretion to determine, based



     6
          For example, the ITC applied its six-factor test in
Certain Stainless Steel Plate From Belgium, Canada, Italy, Korea,
South Africa, and Taiwan, Invs. Nos. 701-TA-376, 377, and 379
(Final) and Invs. Nos. 731-TA-788-793 (Final), USITC Pub. No.
3188 (1999) and in Certain Bearings From China, France, Germany,
Hungary, Italy, Japan, Romania, Singapore, Sweden, and the United
Kingdom, Inv. Nos. AA1921-143, 731-TA-341, 731-TA-343-345, 731-
TA-391-397, and 731-TA-399 (Rev.), USITC Pub. No. 3309 (2000).
However, the ITC used the semifinished product analysis in
Stainless Steel Bar From Brazil, India, Japan, and Spain, Inv.
No. 731-TA-678, 679, 681, and 682 (Final), USITC Pub. No. 2856
(1995) and in Chlorinated Isocyanurates From China and Spain,
Inv. No. 731-TA-1082 and 1083 (Prelim.), USITC Pub. No. 3705
(2004).
Court No. 04-00215                                           Page 13
on the particular facts of the investigation, which test is the

appropriate one to apply.



     Although the ITC is permitted to make varying determinations

based on the facts of each case, it may not act arbitrarily.

Rather, the ITC must present a “reviewable, reasoned basis” for

its determinations.    Bando Chem. Indus., Ltd. v. United States,

17 CIT 798, 799 (1993) (not reported in the Federal Supplement).

“[An] agency must explain its rationale . . . such that a court

may follow and review its line of analysis, its reasonable

assumptions, and other relevant considerations.”    Allegheny

Ludlum Corp. v. United States, 29 CIT __, __, 358 F. Supp. 2d

1334, 1344 (2005).    “Explanation is necessary . . . for this

court to perform its statutory review function.”    Dastech Int’l,

Inc. v. United States, 21 CIT 469, 475, 963 F. Supp. 1220, 1226

(1997); see also Asociacion Colombiana de Exportadores de Flores

v. United States, 12 CIT 1174, 1177, 704 F. Supp. 1068, 1071

(1988) (“[R]easons for the choices made among various potentially

acceptable alternatives usually need to be explained.”).    On

remand, therefore, the ITC is directed to explain why it is

justified in using its six-factor analysis in defining the

domestic like product in this case.    In doing so, the ITC shall

explicitly address why the semifinished product analysis urged by

plaintiff is not appropriate here.
Court No. 04-00215                                           Page 14
II.   Volume and Price Effects of Subject Imports7

      IIMAK next disputes the methodology the ITC used to measure

the volume and price effects of the subject imports.8    In its

volume analysis, the ITC measured only imports of jumbo rolls.

IIMAK asserts that the proper analysis would have counted as

imports the finished TTR produced in the United States from the

imported jumbo rolls.     Specifically, plaintiff argues that “there

can be no dispute” that the jumbo rolls are used merely for

transformation into finished TTR (either finished barcode or

finished fax TTR) by a U.S. company related to the importer (and

thus excluded from the U.S. industry), so that it can be sold to

an unrelated customer in the market for finished TTR.    Pl.’s Br.

at 9.     Thus, “the only meaningful way to measure volume factors

and price effects of imports on the U.S. industry is based on the

volume and prices of the finished TTR into which the imported




      7
          While it might be assumed that a discussion of this
issue could reasonably await the court’s findings concerning
domestic like product, since both parties agree that the domestic
like product contains both jumbo rolls and at least one
downstream product, a discussion of plaintiff’s claims relating
to volume is proper here.
      8
          In making its injury determination, the Commission
shall consider “(I) the volume of imports of the subject
merchandise, (II) the effect of imports of that merchandise on
prices in the United States for domestic like product, and (III)
the impact of imports of such merchandise on domestic producers
of domestic like products . . . .” 19 U.S.C. § 1677(7)(B).
Court No. 04-00215                                              Page 15
product is made.”     Id. at 9 (emphasis added).9    IIMAK states that

by only looking at the volume and price effects of imported jumbo

rolls, the ITC fails to take into account that “competition for

TTR sales almost exclusively occurs at the further processed

level . . . .   There is simply no way to measure the effects on

the U.S. market of subject imports dedicated to a downstream

product if the ITC does not measure the effects at the downstream

level.”   Id.



     In its ITC Views, the Commission disputes IIMAK’s claim that

it should measure shipments and market share of subject imports

using the downstream product.     The ITC explains, “[O]ur finding

that the activities of domestic [slitters] are domestic

production means that their shipments are domestic shipments.”

ITC Views at 32–33.     In other words, the ITC relies on its

finding that the work performed by the domestic slitters rendered

them domestic producers and, thus, necessarily excluded their

products from being part of subject imports.        This being the

case, according to the Commission, the only remaining imported

product that could be used to measure volume and price effects



     9
          IIMAK explains its proposed methodology as “measur[ing]
imports’ effects based on the first point in the distribution
chain at which they entered the U.S. market on an arm’s length
basis. This includes U.S. merchant market sales of both subject
imported jumbo rolls and [finished] TTR made from imported
subject jumbo rolls.” Pl.’s Br. at 10 n.8.
Court No. 04-00215                                         Page 16
was the jumbo rolls.



     The ITC used its production-related activities test to reach

its conclusion that the slitters produce a domestic product.     Id.

The Commission explains:

     First, testimonial evidence by several [slitters]
     indicated that the initial capital investment necessary
     to compete effectively in the U.S. market was
     significant, and included investment in multiple
     machines necessary to produce the sizes and quantities
     required by large purchasers. IIMAK’s own witness
     agreed that slitting machines are costly. . . . As to
     technical expertise involved in U.S. production
     activities, the ITC found, based on testimony and other
     evidence presented by [slitters] ITW and Armor, that
     the level of expertise required for slitting operations
     is not insignificant. Based on [slitters’]
     questionnaire responses, the ITC also found that the
     percentage of value added by slitting and packaging
     operations (an average of 30 percent of the total cost
     of the end product) is significant. With respect to
     employment levels, the ITC noted that all parties,
     including IIMAK, agreed that slitting and packaging
     operations are labor intensive, and require employment
     of a substantial number of employees.

Def.’s Mem. at 27–28 (internal citations omitted); see also ITC

Views at 15-19 (analyzing the six factors related to production

activities that the ITC considers in deciding whether a firm

qualifies as a domestic producer).



     IIMAK maintains, however, that “[e]ven assuming the

Commission correctly found that the converted products undergo
Court No. 04-00215                                           Page 17
substantial processing in the United States,10 these products

still are created for the sole benefit of the foreign respondents

and are still within the scope.”   Pl.’s Br. at 11–12.



     The ITC enjoys broad discretion to choose a methodology for

measuring volume.    Ceramica Regiomontana, S.A. v. United States,

10 CIT 399, 404–05, 636 F. Supp. 961, 966 (1986), aff’d, 810 F.2d

1137 (Fed. Cir. 1987) (“As long as the agency’s methodology and

procedures are a reasonable means of effectuating the statutory

purpose . . . the court will not impose its own views as to the

sufficiency of the agency’s investigation or question the

agency’s methodology.”).   Here, the court agrees with the ITC’s

finding that the U.S.-based slitters engaged in sufficient

production-related activities in transforming the jumbo rolls

into finished TTR to constitute domestic production.     See USEC

Inc. v. United States, 27 CIT __, __, 259 F. Supp. 2d 1310, 1327

(2003) (noting that the production-related activities test

focuses on whether “the overall nature of production-related

activities in the United States . . . are sufficient for a

company to be considered a member of the domestic industry.”)

(internal quotation omitted).   In its ITC Views, the Commission

fully lays out its methodology and the facts it relied on in



     10
           It is worth noting that IIMAK did not appeal this
finding.
Court No. 04-00215                                          Page 18
reaching its conclusions.   See ITC Views at 16 (“[T]he value

added by converting operations to the end-product, the number and

technical expertise of workers employed by slitters, and their

significant capital expenditures all indicate that these

companies do not merely engage in low-level processing as

petitioner alleges.”).   That being the case, the court finds that

the ITC was justified in excluding finished TTR from its volume

and price analysis.   As a result, the sole remaining product that

could constitute subject merchandise was the jumbo rolls.    Thus,

the court affirms the Commission’s use of jumbo rolls for the

purpose of measuring volume and price effects.



III. Substantial Evidence — Indirect Effects

     In arguing that the ITC did not support its conclusions with

substantial evidence, IIMAK first claims that it did not consider

the indirect effects of the subject imports on the domestic

industry. IIMAK insists that “[t]he ITC has [previously]

determined that a finding of injurious price effects is not

limited to instances where there is head-to-head price

competition.”   Pl.’s Br. at 18.   Plaintiff provides several

examples in its brief:

     [I]n Canned Pineapple Fruit from Thailand, Inv. No.
     731-TA-706 (Review), USITC Pub. 3417 at 12 (May 2001),
     the ITC held that prices in one product segment
     affected prices in another. Similarly, in Low Enriched
     Uranium from France, Germany, the Netherlands, and the
     United Kingdom, Inv. Nos. 701-TA-409-412 and 731-TA-909
Court No. 04-00215                                         Page 19
     (Final), USITC Pub. 3486 at 11 (February 2002), the ITC
     found that a small amount of product sold in a
     commodity spot market has effects on prices of products
     sold under contract. This Court likewise has held that
     “{s}ection 1677(7)(C)(ii) permits a finding of injury
     where an imported product . . . may not be directly
     substitutable but nonetheless causes price depression
     or suppression for the lower cost domestic product.”
     R-M Indus., Inc. v. United States, 848 F. Supp. 204,
     211 (CIT 1994).

Id. at 18 n.18(footnote omitted).   That is, IIMAK claims that the

Commission failed to take into account evidence that slitters

using imported jumbo rolls gained an advantage due to the lower

cost of these rolls.   In response, the ITC states that it “took

into account . . . that some U.S. production of finished TTR

started with jumbo rolls of imported TTR.”   Def.’s Mem. at 37.

The ITC explains:

     Contrary to IIMAK’s assertion, the ITC did not ignore
     IIMAK’s argument that [slitters] were driving prices
     down because they indirectly benefitted from their
     importation of subject jumbo rolls. The ITC examined
     this allegation and found that the evidence suggested
     otherwise. IIMAK overlooks the ITC’s statement that
     the lack of underselling shown in the limited pricing
     data was corroborated by the average unit value (AUVs)
     for jumbo rolls. The AUV data show that, for each year
     of the [period of investigation], subject import unit
     values of jumbo rolls imported by the [slitters] were
     higher than the unit values of shipments of domestic
     jumbo rolls. In addition, the ITC observed that the
     financial performance of the [slitters] that were most
     dependent on imported jumbo rolls (i.e., the four
     related party [slitters]) was no better than that of
     the integrated producers. In light of these facts, the
     ITC reasonably found that importation of jumbo rolls
     did not confer a competitive advantage to [slitters]
     over the rest of the industry.

Id. at 34–35 (internal citations omitted)(footnote omitted).
Court No. 04-00215                                           Page 20
Thus, the ITC states that

     With respect to IIMAK’s arguments concerning “indirect
     effects” the ITC took into account . . . that some U.S.
     production of finished TTR started with jumbo rolls of
     imported TTR. The ITC did not “ignore” the conditions
     of competition emphasized by IIMAK. . . . As discussed
     above, the ITC considered IIMAK’s argument that the
     [slitters] indirectly benefitted from the imports. The
     ITC found that this premise was not supported by the
     record evidence concerning [average unit values],
     comparative financial data, industry capacity data, and
     questionnaire responses. IIMAK may wish the ITC had
     weighed the evidence in a different manner, but that
     concern is not sufficient to sustain its appeal.

Id. at 37 (internal citations omitted).   This claim is supported

by the ITC Views and the evidence cited therein:   “The pricing

and average unit value data indicate that subject jumbo rolls

were priced higher than domestic jumbo rolls, and as such

[slitters] did not have a raw material cost advantage over

domestic coaters.”   ITC Views at 35.



     An examination of the data used by the ITC in reaching its

conclusion reveals that there were no indirect effects of the

sales of jumbo rolls because there was indeed no underselling of

imported jumbo rolls, nor was there any evidence that the

consumers of these rolls benefitted financially from their use.

Thus, despite IIMAK’s arguments to the contrary, the ITC did

examine the possibility of indirect effects and supported its

conclusion that there were none with substantial evidence.
Court No. 04-00215                                          Page 21
IV.   Reliability of Measurement of Price Effects

      IIMAK next contends that the ITC erred by not using prices

for finished TTR to measure the price effects of the subject

merchandise imports.   In its analysis, the ITC used prices for

imports of jumbo rolls.   As has been previously noted, there are

few open market sales of jumbo rolls.   IIMAK argues:

      Price comparison data for products with low volumes are
      not reliable for purposes of making price comparisons.
      To the extent that data for low volume products show
      overselling, the ITC thus should not rely on this
      overselling to make a negative determination. This
      Court has held that the ITC reasonably gives less
      weight to price comparisons for products where there
      are only a limited number of comparisons.11

Pl.’s Br. at 19–20 (internal citations omitted).



      IIMAK’s argument, in essence, is but another way of saying

that it objects to the Commission’s sole use of jumbo rolls when

measuring volume.    The ITC disputes IIMAK’s claim that the data

it relied on for price comparisons was unreliable due to low


      11
          IIMAK cites several cases to support its position.
See, e.g., Taiwan Semiconductor Industry Ass’n v. United States,
24 CIT 914, 925, 118 F. Supp. 2d 1250, 1260 n.15 (2000) (“The
record supports the Commission’s conclusion that the quantities
of products . . . were relatively small. Therefore, the
Commission reasonably discounted the data regarding [these]
products . . . in its analysis.”) (internal citations omitted);
R-M Indus., Inc. v. United States, 18 CIT 219, 228, 848 F. Supp.
204, 211 (1994) (affirming the ITC’s decision to not rely on
price comparison data where data was limited); Trent Tube Div.,
Crucible Mat’ls Corp. v. United States, 14 CIT 386, 403, 741 F.
Supp. 921, 935 (1990) (giving limited weight to evidence of
underselling where only a limited number of price comparisons
were available).
Court No. 04-00215                                           Page 22
product volume, explaining that it relied on these comparisons

“because there were only small volumes of sales in this

category,” Def.’s Mem. at 34, not because the ITC failed to

adequately investigate prices.    In other words, “[s]ince there

are not many sales of domestic jumbo TTR on the open market, the

volume of shipments represented by the price data was of course

small.”   Id.   As this court has determined that the Commission is

justified in its finding that slitters produce a domestic

product, it will not disturb the ITC’s use of jumbo rolls based

on scarcity of transactions.    Beyond showing that the ITC based

its conclusions on a small number of transactions because there

were, in fact, few transactions, IIMAK has failed to demonstrate

that either the data or the conclusions drawn from the data are

unreliable.     See 19 U.S.C. § 1677(7)(c)(1) (affording the ITC

broad discretion to determine the best methodology by which to

measure volume).    This being the case, the court sustains this

portion of the ITC’s findings.



V.   The ITC’s Findings Related to Price Movement12

     Next, IIMAK contends that the ITC ignored pricing evidence




     12
          Again, plaintiff’s argument concerning the comparison
of the subject imports to the domestic like product does not
implicate its arguments concerning the inclusion of fax TTR in
the definition of domestic like product.
Court No. 04-00215                                           Page 23
calling into question its negative determination.13    The

Commission found that the movement of prices on the U.S. market

was unrelated to the prices of subject imports.    ITC Views at

34–35.     It reached this finding, at least in part, by examining

the prices at which “Product 3,” which is the slit form of

wax/resin products manufactured by IIMAK and other producers, was

sold to original equipment manufacturers (“OEMs”).     See Conf.

Staff Rep., Conf. R. Doc. 292 at Table V-6.14    IIMAK complains of

the ITC’s finding of divergent trends, arguing that although U.S.

and import prices for sales of Product 3 to OEMs were divergent

over the period of investigation, the prices for sales of the

same product to slitters/converters and distributors/resellers




      13
          Title 19 U.S.C. § 1677(7)(C)(ii) provides that in
evaluating price effects, the Commission shall consider whether

      (I) there has been significant price underselling by
      the imported merchandise as compared with the price of
      domestic like products of the United States, and
      (II) the effect of imports of such merchandise
      otherwise depresses prices to a significant degree or
      prevents price increases, which otherwise would have
      occurred, to a significant degree.

Id.
      14
          Table V-6 shows that U.S. prices do not correlate to
the prices for the imported product. For example, U.S. prices
increased from January through September of 2002, while import
prices decreased. Similarly, U.S. prices fluctuated (i.e.,
decreased, then increased) from April through December of 2001,
while import prices steadily declined for one importer and
steadily increased for another. Conf. Staff Rep., Conf. R. Doc.
292 at Table V-6.
Court No. 04-00215                                             Page 24
were strongly correlated.15   While the ITC explains that it did

not use the other products for which it had questionnaire

responses because they included some domestic product, see ITC

Views at 33, it does not provide an explanation in answer to

plaintiff’s argument.    Because the ITC does not address this

argument in its papers, on remand, the Commission shall do so,

stating with particularity whether plaintiff is correct with

respect to its correlation calculations.



VI.   Volume — Market Share

      In reaching its volume findings, the Commission concluded:

“While the increase in absolute quantity of subject imports could

be viewed as significant, subject imports grew only slightly

relative to domestic consumption and decreased relative to

domestic production.    Given that fact . . . we do not find

subject import volume overall to be significant.”    ITC Views at


      15
           IIMAK states:

      While it is true that U.S. and import prices for sales
      of Product 3 to OEMs were divergent over the period of
      investigation, this product/channel combination is only
      one of four for which the ITC collected price data for
      sales of slit TTR, and accounted for only [[
              ]] of U.S. coaters’ shipment volume these four
      product/channel combinations and [[             ]] of
      importers’/converters’ shipment volumes. For the other
      three product/channel combinations, there were very
      strong correlations between U.S. and importer/converter
      prices for slit TTR.

Pl.’s Mem. at 21–22 (internal citations omitted).
Court No. 04-00215                                           Page 25
32.



      With respect to market share, plaintiff makes two related

claims.    First, IIMAK claims that the Commission did not take

into account the increases in market share of imports during the

period of investigation, stating that “the ITC found an increase

in subject imports’ market share over the period of

investigation.    It was inappropriate for the ITC to dismiss this

increasing market share of the subject imports without

explanation.”    Pl.’s Br. at 22.   Thus, IIMAK maintains that the

ITC erred by failing to consider even small increases when, for a

fungible product such as TTR, “even small market share increases

can be injurious.”    Id.   Thus, IIMAK insists that these absolute

increases in market share, even though small, must be considered.



      Second, IIMAK urges that 19 U.S.C. § 1677(7)(C)(i)16

requires the ITC to consider whether volume and market shares of

the subject imports are significant on an absolute basis, and

that “the ITC’s volume findings are limited only to a

determination that the increases in the volume and market share



      16
          The statute states in relevant part, “In evaluating the
volume of imports of merchandise, the Commission shall consider
whether the volume of imports of the merchandise, or any increase
in that volume, either in absolute terms or relative to
production or consumption in the United States, is significant.”
19 U.S.C. § 1677(7)(C)(i).
Court No. 04-00215                                            Page 26
are not significant. . . .   As such, the ITC’s analysis is

incomplete in that it did not analyze whether the subject

imports’ market shares, standing alone, were significant.”     Id.

at 23.



     As to the second argument, the ITC defends its method of

analyzing volume, explaining that “[u]nder the statute, the ITC

considers whether the volume of subject imports or any increase

in that volume, either in absolute terms or relative to

production or consumption in the United States is significant.”

Def.’s Mem. at 32 (emphasis in original).    The ITC cites several

cases in which the Court has found that any one of the several

methods of analyzing volume is sufficient.    See Copperweld Corp.

v. United States, 12 CIT 148, 167, 682 F. Supp. 552, 570 (1988)

(explaining that the statutory language, “when read in

conjunction with the legislative history[,]17 indicates that

disjunctive language was chosen to signify congressional intent

that the agency be given broad discretion to analyze import

volume in the context of the industry concerned . . . .”); see



     17
          The legislative history reads in relevant part: “In
determining whether an industry is materially injured, as that
phrase is used in the bill, the ITC will consider . . . the
factors set forth in [the statute] together with any other
factors it deems relevant. . . .” Copperweld, 12 CIT at 167, 682
F. Supp. at 570 (emphasis added)(quoting S. Rep. No. 249, 96th
Cong., 1st Sess. 88, reprinted in 1979 U.S.C.C.A.N. 381, 474).
Court No. 04-00215                                         Page 27
also Am. Bearing Mfrs. Ass’n. v. United States, 28 CIT __, __,

350 F. Supp. 2d 1100, 1108 (2004) (“Congress recognized that in

determining the significance of the volume, price effect, and

impact of imports in the U.S. market, the ITC must evaluate the

facts of each particular case, and the industry involved, and

make its material injury determination accordingly.”).   Thus,

both the statute and the cases indicate that the Commission did

not exceed the discretion granted it in choosing to rely most

heavily on relative comparisons rather than the absolute size of

market share.



     With respect to the small increase in subject import volume

and market share, the ITC observed:

     Subject import volume increased over the period
     examined, from 295 million msi in 2001 to 373 million
     msi in 2003, an increase of 26 percent; shipments of
     subject imports rose 18 percent over the same period.18
     . . . As a percentage of domestic production, subject
     imports were [[      ]] percent (by quantity) in 2001,
     19.7 percent in 2002, and 13.5 percent in 2003. Thus,
     subject imports, measured as a share of domestic
     production, actually declined over the period of
     investigation.

     In contrast, the domestic industry’s market share
     increased significantly over the period of



     18
          Specifically, “[s]ubject imports accounted for [[
]] percent of apparent U.S. consumption (by quantity) in 2001,
[[      ]] percent in 2002, and [[      ]] percent in 2003.” ITC
Views at 31. Thus, subject imports’ share of the U.S. market
increased less than [[                      ]] over the period of
investigation.
Court No. 04-00215                                           Page 28
     investigation.19 . . . Coinciding with this increase
     in domestic market share, nonsubject imports’ market
     share declined . . . over the same period.20 Thus the
     domestic industry gained market share at the expense of
     nonsubject imports during the period of investigation.

ITC Views at 31—32 (citations omitted) (footnote omitted).    Based

on the foregoing, the court finds that the ITC conformed to the

statute by examining the significance of volume relative to both

production and consumption.   While the Commission did not

explicitly analyze the small absolute increase in imported

product market shares, its discussion demonstrates that it was

not unmindful of that fact.   Therefore, the ITC has satisfied the

statutory demands of 19 U.S.C. § 1677(7)(C)(i).



VII. Impact

     A.   Profitability

     IIMAK argues (1) that the ITC failed to address what it

calls the “anomaly” of declining operating income and

profitability at a time of increasing consumption21 and (2) that


     19
          Specifically, “[t]he domestic industry’s share of
apparent U.S. consumption was [[       ]] percent in 2001, [[
]] percent in 2002, and [[       ]] percent in 2003, for a period-
wide increase of [[     ]] percentage points.” ITC Views at 32.
     20
          The market share for nonsubject imports declined by [[
    ]] percentage points over the period of investigation. See
ITC Views at 32.
     21
          IIMAK relies on Certain Ceramic Station Post Insulators
from Japan, Inv. No. 731-TA-1023 (Prelim.), USITC Pub. No. 3578
(2003), to support its argument. In that case, the ITC stated:
                                                   (continued...)
Court No. 04-00215                                          Page 29
slight declines in operating income cited by the ITC “were skewed

by one company with large and increasing profitability over the

period of investigation.”22   Pl.’s Br. at 24.   IIMAK claims that


     21
          (...continued)

     Based on significant declines or sustained weaknesses
     in most of the performance indicators of the domestic
     industry during a period of increasing demand and at
     the same time that the subject merchandise was being
     imported in significantly increasing quantities and
     sold at prices significantly below the weighted average
     of domestic industry sales, we find that the subject
     imports had a significant adverse impact on the
     domestic industry.

Id. at 14.

     The ITC disputes plaintiff’s characterization of its finding
in Ceramic Station Post Insulators, stating that in that
investigation, “the ITC found sustained weaknesses in most of the
performance indicators of the domestic industry.” Def.’s Mem. at
38 (internal quotation omitted). The ITC notes that this
“sharply contrasts with the instant case, in which the ITC found
not only that the industry was profitable, but also that the
industry experienced significant gains in productivity and
declining costs, accompanied by increases in production,
shipments, and market share.” Id.

     The court finds IIMAK’s reliance on Post Insulators from
Japan, Inv. No. 731-TA-1023 (Prelim.), USITC Pub. No. 3578
(2003), to be misplaced. There, the ITC found a significant
adverse impact on the domestic industry in part based on
“significant declines or sustained weaknesses” in most of the
performance indicators of the domestic industry. Id. at 14.
Here, by contrast, several large U.S. producers operated at a
profit during the period of investigation.

     22
             IIMAK states:

     Unlike all other coaters, [[        ]] increased its
     operating income over the period of investigation; in
     fact, it increased its operating income by [[    ]]
                                                   (continued...)
Court No. 04-00215                                          Page 30
this company’s increases in operating income over the period of

investigation were not in line with the experience of the

industry.   See id. at 25.   Thus, IIMAK insists that the ITC

ignored a significant condition of competition when it did not

account for this one company’s data having overshadowed the data

for the rest of industry.    See id.



     The ITC maintains that the anomaly to which IIMAK refers,

i.e., that the domestic industry experienced declining operating

income and profitability at a time of increasing consumption, was

not in fact an anomaly, since the decline in operating income was

slight and the decline in profitability was “marginal.”   Def.’s

Mem. at 37.23   The ITC also disputes IIMAK’s contention that the

data were skewed by one company with large and increasing profits



     22
      (...continued)
     percent. It experienced these increases while [[
                          ]] experienced declines in
     operating income. Moreover, by the end of the period
     of investigation, [[         ]]’s operating income
     constituted [[          ]] percent of the operating
     income for the industry as a whole. Notably, [[
                                ]], a product for which there
     is not subject import competition.

Pl.’s Br. at 24–25.
     23
           Operating income declined by [[     ]] percent, while
declines in operating income as a percentage of net sales
(profit) decreased from [[      ]] percent in 2001 to [[     ]]
percent in 2003, for a total decline of [[      ]] percent. ITC
Views at 38; see also Conf. Staff Rep., Conf. R. Doc. 292 at
Table C-3.
Court No. 04-00215                                           Page 31
by noting that three other companies24 also operated at a profit

throughout the period of investigation.    See id.25



     The court finds that the ITC has sufficiently addressed the

“anomaly” cited by IIMAK.   First, there is little evidence that

the conditions set out by plaintiff are abnormal, since the

declines in both operating income and profitability were very

slight.   See supra note 23.   Second, it is apparent that the

facts do not support plaintiff’s contention that only one company

was profitable during the period of investigation.     Thus, the

court finds no merit in IIMAK’s contentions.




     24
          The other U.S. companies that performed profitably were
[[                      ]]. Def.’s Mem. at 38; see also ITC
Views at 38 (citing Conf. Staff Rep., Conf. R. Doc. 292 at Table
C-3 for its finding that the domestic industry operated
profitably during the period of investigation).
     25
          As previously noted, IIMAK also asserts that [[
]] produced only [[          ]] TTR. This assertion is
unconvincing. As the ITC notes:

     This assertion ignores that [[

                                                       ]] . . .
     .    Just as the distinctions between [[
                                               ]] do not
     create clear dividing lines between slit fax TTR and
     slit barcode TTR, the fact that [[
                                         ]] does not mean
     its data should be set aside from the data for the rest
     of the industry.

Def.’s Mem. at 38, 39.
Court No. 04-00215                                         Page 32
     B.    The ITC’s finding that “alternative factors,” not
           imports, were the cause of price declines over the
           period of investigation.

     The ITC found that several factors other than imports were

responsible for declining prices during the period of

investigation.   In particular, the Commission noted that intra-

industry competition was severe, a finding that IIMAK does not

dispute.   Nevertheless, IIMAK insists that the Commission erred

in finding that factors other than imports were responsible for

the price declines.



     In particular, IIMAK claims that, in finding that Sony

Chemical Corporation of America (“Sony”) was the downward price

leader, the ITC “has ignored data26 pertaining to other producers


     26
           IIMAK contends that Table E-1, on which the ITC relies
for its conclusions, actually shows “(1) pervasive underselling
of [[                                          ]] and (2) early
[[
                          ]].” Pl.’s Br. at 26 (citing Conf.
Staff Rep., Conf. R. Doc. 292).


     A review of Table E-1 confirms that in most quarters from
2001 through 2003, the Japanese producers undersold [[
      ]] although not every Japanese producer undersold both [[
               ]] in every quarter. Moreover, the Japanese
producers undersold [[                                 ]] in only
about [[     ]] of the twelve quarters from 2001 through 2003 for
which data was provided. The court finds that by showing that
the history of declining prices did not show price reductions
contemporaneous with imported merchandise underselling, the ITC
has provided sufficient evidence to refute IIMAK’s claim that
domestic price declines resulted solely from competition from
foreign imports. Rather, the ITC has provided evidence to show
                                                   (continued...)
Court No. 04-00215                                             Page 33
and disregarded the data in support of Sony’s claim that it

decreased prices to meet import competition.”       Pl.’s Br. at 25.

In support of its claim, IIMAK cites Sony’s Prehearing Submission

in Support of the Petition, Conf. R. Doc. 253, in which Sony

states that it “is not now, and has not been, the price leader in

the industry.     Rather, to the extent it has reduced prices at

all, Sony has done so in order to meet the downward price

competition led by global imports.”        Id.



      The ITC insists that its conclusion that Sony was the

downward price leader is supported by substantial evidence.        It

explains that it “relied on public statements . . . corroborating

that Sony was at the front of an intra-industry price war, and on

price data indicating that Sony . . . lowered its prices below

those of [others] to gain larger volume sales.”       Def.’s Mem. at

37.   As evidence for its conclusions, the Commission cites the

statement of a Sony consultant who later became an executive, who

stated that “through aggressive pricing, we believe we can cut

our competition numbers from 19 or 20 down to five,” and that

“[w]e didn’t start these price wars, but we’re going to finish

them.”     ITC Views at 30–31, 31 n.145.    In addition, a large


      26
      (...continued)
that although domestic producers reduced their prices, they did
so in large measure in response to severe intra-industry
competition and because of increases in both capacity and
productivity.
Court No. 04-00215                                          Page 34
majority of the responding purchasers identified Sony as the

price leader in the industry by 2003.    See ITC Views at 36 n.176.



     It is apparent that the ITC has provided substantial

evidence showing that Sony was the downward price leader during

the period of investigation.



     IIMAK next argues that the ITC relied on erroneous data for

its finding that price declines were caused by declines in unit

costs and increases in productivity.    IIMAK claims that the ITC’s

data, contained in Table D-1, Conf. Staff Rep., Conf. R. Doc.

292, pertained only to U.S. coaters’ operations, even though the

ITC included some slitters in the domestic industry.   Thus, IIMAK

argues,

     any evaluation of the costs for the domestic producers
     should include the costs of any slitters that are not
     excluded from the U.S. industry as related parties.
     Making the proper comparison reveals that unit prices
     declined by more than unit sales costs for the U.S.
     producers. Moreover, the correct data show that both
     gross and operating margins declined, an unlikely
     phenomenon when costs decline at the same rate as
     prices. Consequently, the ITC erroneously concluded
     that price declines were driven by declines in costs.

Pl.’s Br. at 27–28.


     An examination of Table D-1 reveals that IIMAK is correct

that it pertains only to U.S. coaters’ operations, not to

slitters.   It would appear that the costs of domestic producers
Court No. 04-00215                                            Page 35
should include both coaters and those slitters unrelated to

foreign producers.   As this omission is unexplained by the

Commission, on remand, the ITC is directed to provide an

explanation as to why its analysis did not also account for the

costs of U.S. non-related party slitters.



     Finally, IIMAK contends that even if the factors cited by

the ITC were, in fact, partly responsible for the domestic

industry’s price declines, the Commission did not address the

question of whether the subject imports were also a cause of the

domestic industry’s injury.   IIMAK argues that a determination

that imports are causing material injury under 19 U.S.C. §

1673d(b)(1) “does not require that the imports be the sole or

principal cause of the injury,” Nippon Steel Corp. v. Int’l Trade

Comm’n, 345 F.3d 1379, 1381 (Fed. Cir. 2003); therefore,

according to plaintiff, the ITC has failed to show that the

subject imports are not at least a significant factor in causing

the injury suffered by U.S. industry.   Id. at 29.



     Despite IIMAK’s claims, however, it is apparent that the ITC

has applied the proper standard.   Indeed, the Commission made the

very finding that IIMAK claims is absent. “We find that . . .

imports . . . have not had a significant negative impact on the

condition of the domestic industry during the period examined.
Court No. 04-00215                                           Page 36
As discussed above, we find both the volume of subject imports

and price effects of the subject imports not to be significant.”

ITC Views at 37.    Moreover, the ITC specifically addressed price

effects relating to imports, stating:

     The pricing data . . . reflect a downward trend for
     domestic prices during the period of investigation.
     This trend was the same at the jumbo roll stage of
     processing and at the finished [TTR] stage. We find
     that the movement of domestic prices (upward and
     downward) was largely unrelated to the price of
     imported merchandise.

Id. at 34–35.27    Thus, plaintiff’s assertion is not supported by

the record.



VIII.     The ITC’s Determination That the Industry Is Not
          Threatened With Material Injury


     Finally, IIMAK contends that the problems with the ITC’s

material injury analysis “also infect the ITC’s threat analysis,

thereby rendering the finding that the industry is not threatened

with injury fundamentally flawed as well.”    Pl.’s Br. at 37.

IIMAK explains:

     The ITC found that “the increase in the volume and
     market share of the subject imports does not indicate a
     likelihood of substantially increased imports. Subject
     imports increased only slightly relative to U.S.
     consumption and decreased relative to U.S. production.”
     Properly measuring imports relative to consumption and


     27
          The ITC relies on Table V-6 of its Staff Report, which
indicates that domestic price movements did not move in tandem
with the prices of the imported merchandise. See Conf. Staff
Rep., Conf. R. Doc. 292 at Table V-6.
Court No. 04-00215                                          Page 37
     production . . . would demonstrate dramatic increases
     in those export volumes. . . . [Moreover], [w]hen the
     ITC conducts a proper pricing analysis, it should find
     that subject imports had substantial negative price
     effects.

Id. at 37-38.   In addition, IIMAK disputes the ITC’s reliance on

the domestic industry’s “positive and steady performance” for its

finding that the U.S. industry was not threatened with injury.

Id. at 38.    IIMAK claims that the ITC never addressed its claim

that the industry was only able to maintain its profits “through

cost-cutting measures that could not be sustained in the long-

run.”   Id.



     For its part, the ITC chooses to rest on its prior arguments

regarding domestic like product, stating:

     [P]laintiff’s claims concerning the ITC’s finding of no
     threat of material injury stem from IIMAK’s
     dissatisfaction with the ITC’s definition of domestic
     like product and the domestic industry. . . . For the
     same reasons that the court should reject plaintiff’s
     efforts to reweigh the evidence and impose its own
     preferred methodology on the ITC’s present injury
     analysis, the court should likewise reject plaintiff’s
     claims regarding threat.

Def.’s Mem. at 39.



     Here, a discussion of the questions of material injury and

threat must await the Commission’s response to the remand

instructions.   As such, the court will address IIMAK’s concerns

following the ITC’s response to those instructions.
Court No. 04-00215                                          Page 38
                           CONCLUSION

     Based on the foregoing, this matter is remanded to the ITC

for action in accordance with this opinion.   Remand results are

due on April 24, 2006, comments are due on May 24, 2006, and

replies to such comments are due on June 5, 2006.



                                        /s/Richard K. Eaton
                                         Richard K. Eaton, Judge

Dated:    January 23, 2006
          New York, New York
