FInal Determinations in the Antidumping Duty and Countervailing Duty Investigations on Carbon and Certain Steel Wire Rod

FACT SHEET

Final Determinations in the Antidumping Duty and Countervailing Duty Investigations on Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Germany, Indonesia, Mexico, Moldova, Trinidad & Tobago, Turkey, and Ukraine

On Monday, August 26, 2002, the Department announced the final determinations in the antidumping and countervailing duty investigations on imports of carbon and alloy steel wire rod (steel wire rod) from Brazil (AD&CVD), Canada (AD&CVD), Germany (AD&CVD), Indonesia (AD), Mexico (AD), Moldova (AD), Trinidad & Tobago (AD&CVD), Turkey (CVD), and Ukraine (AD). The Department found that producers/exporters from Brazil, Canada, Germany, Indonesia, Mexico, Moldova, and Ukraine have sold their product in the United States at less than fair value. The Department also found that producers/exporters from Brazil, Canada, and Germany have received countervailable subsidies, while Trinidad & Tobago, and Turkey have not.

Background: On August 31, 2001, U.S. producers of wire rod filed petitions with the Department of Commerce ("the Department") requesting the initiation of antidumping ("AD") and countervailing duty ("CVD") investigations. On September 24, 2001, the Department initiated investigations on imports of wire rod from Brazil, Canada, Germany and Trinidad & Tobago (both AD and CVD), Turkey (CVD only) and Egypt, Indonesia, Mexico, Moldova, South Africa, Ukraine and Venezuela (AD only). On October 15, 2001, the International Trade Commission ("ITC") issued preliminary determinations finding that there is a reasonable indication that imports of wire rod from the above-mentioned countries, with the exception of Egypt, South Africa, and Venezuela, are causing material injury, or threatening to cause material injury, to a U.S. industry.

On February 4, 2002, the Department announced the preliminary determinations in the countervailing duty investigations, finding that producers/exporters of wire rod from Canada, Germany, and Trinidad and Tobago have benefitted from countervailable subsidies. The Department also found that producers/exporters from Brazil and Turkey did not benefit from countervailable subsidies. On April 3, 2002, the Department announced the preliminary determinations for the antidumping investigations. We preliminarily found that producers/exporters of carbon and certain alloy steel wire rod from Brazil, Canada, Germany, Mexico, Moldova, Trinidad and Tobago, and Ukraine had sold their product below fair market value. However, the Department also found that producers/exporters from Indonesia had not sold their product below fair market value because the antidumping duty margins were de minimis. See table below for the antidumping duty margins and countervailing subsidy rates.

Petitioners: The petitions in this investigation were filed on behalf of U.S. steel wire rod producers: Co-Steel Raritan, Inc., GS Industries, Keystone Consolidated Industries, Inc., and North Star Steel Texas, Inc.

Product Use: Steel wire rod is used in producing steel wire, which is used to make several downstream products such as rope, wire mesh, wire strand and hangers, as well as nails and other fasteners.

Next Steps: Once the Department publishes its final determination, usually about one week after our announcement, the ITC will have 45 days to make its final injury determination. In this case, we expect the ITC's vote in October 2002. If the ITC makes final affirmative determinations of injury, the Department will issue antidumping and countervailing duty orders.

Final Antidumping Margins/Countervailing Subsidy Rates:

VOLUME(metric tons)

Country	2000	2001
Brazil	197,917	233,572
Canada	557,618	686,782
Germany	82,920	94,407
Indonesia	51,470	54,491
Mexico	127,746	242,153
Moldova	166,963	169,981
Trinidad & Tobago	217,810	322,135
Turkey	137,381	235,821
Ukraine	309,307	234,534

VALUE (thousands of U.S. dollars)

Country	2000	2001
Brazil	$55,382	$60,231
Canada	$221,838	$256,149
Germany	$26,282	$28,462
Indonesia	$12,026	$11,854
Mexico	$31,919	$58,903
Moldova	$36,582	$34,851
Trinidad & Tobago	$58,017	$83,800
Turkey	$32,645	$49,255
Ukraine	$61,840	$43,943

In their case briefs, interested parties raised issues pertaining to the proper methodology for the allocation of duties collected under section 201 of the Trade Act of 1974 in the calculation of export price (EP) and constructed export price (CEP). Before addressing the proper allocation methodology, the Department noted it had never addressed the broader issue of the legal basis for deducting section 201 duties from U.S. price. Therefore, on August 13, 2002, the Department issued a preliminary decision memorandum addressing this issue and inviting interested parties in this investigation to comment on the matter. In response, the Department received comments from the petitioners and the respondent in this investigation, as well as other parties expressing an interest in what they consider a cross-cutting issue that could affect other cases. As a procedural matter, most parties objected that the Department had raised this broader issue too late in the proceeding to allow for sufficient analysis and comment, that the Department had allowed insufficient time to comment, and that there was no opportunity for rebuttal or hearing. As a legal matter, while the respondent argued that section 201 duties should not be deducted from U.S. price, most other parties argued that deducting section 201 duties was in full accord with the antidumping statute and consistent with Department practice.

As a consequence of the comments received, we have determined that we should provide a greater opportunity for concerned parties to be heard. As a result, we are not addressing the merits here. For purposes of the final determination in this investigation, we are invoking the discretionary authority set forth in section 777(A)(a)(2) of the Act to "decline to take into account adjustments which are insignificant in relation to the price or value of the merchandise." Section 351.413 of the Department's Regulations defines "insignificant adjustments"as "any individual adjustments having an ad valorem effect of less than 0.33 percent, or any group of adjustments having an ad valorem effect of less than 1.0 percent, of the export price, constructed export price, or normal value, as the case may be." In this case, an adjustment for section 201 duties would have an ad valorem effect substantially less than 0.33 percent of the export price and constructed export price, no matter how such duties are allocated. In addition, section 201 duties in this case were paid on an extremely limited number of import transactions, and the effect on the overall dumping margin would be inconsequential. For further details, see Analysis Memorandum from the Team to the File, dated August 23, 2002.

Petitioners filed a critical circumstances allegation regarding imports of steel wire rod from Brazil, Germany, Mexico, Moldova, Trinidad and Tobago and Ukraine. On February 11, 2002, we preliminarily determined that critical circumstances exist for imports of steel wire rod from Germany, Mexico, Moldova, Trinidad and Tobago, and Ukraine. The Department has found for the final investigation that circumstances do not exist for imports from Mexico and Trinidad & Tobago. However, critical circumstances do exist for imports from Germany, Moldova, and Ukraine. If the ITC concurs that critical circumstances exist for imports from these countries, antidumping and countervailing duties will be applied retroactively to before the preliminary determination.

In the investigations involving Ukraine and Moldova, parties had requested revocation of nonmarket economy status. However, the Government of Moldova did not support the request for the region where the producer is located, and we have deferred our decision regarding Ukraine's non-market economy status, as we need additional time to evaluate the information provided on the record of the investigation.

There is an outstanding Section 201 safeguard action on global imports of steel wire rod, implemented in February 2000 and set to expire in February 2003. Imports from Canada and Mexico were not initially included in the relief, as the ITC found that these countries did not meet special NAFTA criteria for inclusion in a global safeguard action. However, on August 22, at the request of petitioners, the ITC determined that a surge in imports of steel wire rod from Canada and Mexico is undermining the effectiveness of the import relief that was provided to the U.S. industry. The President, nonetheless, decided not to extend the relief to imports from Mexico and Canada. Since there is a preexisting 201 action on steel wire rod, these products were not included as part of the President's steel initiative within the Section 201 on steel imports.