Differential Pricing Analysis – One Year Later

Since introducing the Differential Pricing Analysis in Xanthan Gum from Austria and China a little over a year ago, the Department of Commerce’s two-staged test has been employed in over 125 anti-dumping proceedings.  Now that the Department has obtained some experience with this approach they are seeking public comment.

As a replacement for the targeted dumping methodology, Differential Pricing Analysis is marked by the absence of the requirement for any affirmative allegation of targeting or aberrational  pricing patterns.  Instead, the Department’s test has been built into its standard antidumping margin programs and incorporates default group definitions for purchasers, regions and time periods.  The standard test has been applied almost uniformly in all  investigation and annual review anti-dumping proceedings since its introduction. The two-part test employs the statistical measure known as the Cohen’s d ratio. A more detailed description of the methodology can be found here.   Where a large percentage of sales are found to have a high “d” ratio, the Department finds that a significant pattern of price differences exists, and, in certain circumstances, applies an average-to-transaction (zeroing) method  of calculating aggregate dumping margins, instead of the default average-to-average (no zeroing) method.

Results to Date

We have updated our table of cases in which the Commerce Department has applied the differential pricing analysis, and indicated whether some or all of the anti-dumping calculations were zeroed.   Our analysis continues to show that differential pricing was found in the majority of cases.   The results after one year mirror our earlier findings; i.e., In over 80% of the proceedings, the Department has found a meaningful level of differential pricing, that is, in either the > 66% level (all zeroing) or the 33%-66% (partial zeroing) ranges.  In 65 instances in which meaningful levels of differential pricing were found, the Department of Commerce also determined that there was no material difference between calculating dumping margins using partial or full zeroing and no zeroing.  In these cases, no zeroing was applied.   Thus, notwithstanding the high frequency of positive findings of material differential pricing, the Department applied some level of zeroing (full or mixed) only 30% of the time.

Request for Comments

The Department is now seeking public comments on the differential pricing analysis method for the purpose of determining whether to apply an alternative comparison method.

The deadline for comments is June 23, 2014.  See Federal Register.

Detailed Table of Cases

The compilation of results is based on preliminary results/determinations, as the Department typically does not publish its differential pricing findings in final results/determinations.  Contact us to receive the complete list of IA ACCESS Reference Nos.

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