The U.S. Pineapple industry

The U.S. Pineapple industry alleged that producers of canned pineapple from the Philippines were selling their canned pineapple in the United states for less than its fair market value (dumping). In addition to canned pineapple, the Philippine producers exported other products used as pineapple juice and juice concentrate. these products used separate parts of the same fresh pineapple used for the canned pineapple. All these products shared raw material costs with the canned fruit, according to the producers’ own financial records. To determine fair value and anti-dumping duties, the pineapple industry argued that a court should calculate the Philippine producers’ cost of production and allocate a portion of the shared fruit costs to the canned fruit. The result of this allocation showed that more than 90 percent of the canned fruit sales were below the cost of production. Is this a reasonable approach to determining the production costs and fair market value of canned pineapple in the United States? Why or why not? (See Regulation of Specific Business Activities)

Sample Solution