[Federal Register: November 25, 2002 (Volume 67, Number 227)]
[Notices]
[Page 70579-70581]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25no02-35]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-570-881
Notice of Initiation of Antidumping Duty Investigation: Certain
Malleable Iron Pipe Fittings From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 25, 2002.
FOR FURTHER INFORMATION CONTACT: Anya Naschak or Helen Kramer at (202)
482-6375 or (202) 482-0405, respectively; Antidumping and
Countervailing Duty Enforcement Group III, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230.
SUPPLEMENTARY INFORMATION:
Initiation of Investigation
The Applicable Statute and Regulations: Unless otherwise indicated,
all citations to the statute are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the
Tariff Act of 1930, as amended (the Act), by the Uruguay Round
Agreements Act (URAA). In addition, unless otherwise indicated, all
citations to the Department of Commerce's (the Department's)
regulations are references to the provisions codified at 19 CFR Part
351 (2002).
The Petition
On October 30, 2002, the Department received a petition filed in
proper form by Anvil International, Inc., and Ward Manufacturing Inc.
(collectively, the petitioners). The Department received information
supplementing the petition on November 7, 2002, November 12, 2002, and
November 15, 2002.
In accordance with section 732(b) of the Act, the petitioners
allege that imports of malleable iron pipe fittings (malleable pipe
fittings) from the People's Republic of China (PRC) are being, or are
likely to be, sold in the United States at less than fair value within
the meaning of section 731 of the Act, and that such imports are
materially injuring, or are threatening to materially injure, an
industry in the United States.
The Department finds that the petitioners filed this petition on
behalf of the domestic industry because they are interested parties as
defined in sections 771(9)(C) of the Act and have demonstrated
sufficient industry support with respect to the antidumping
investigation that they are requesting the Department to initiate. See
the Determination of Industry Support for the Petition section below.
Scope of Investigation
For purposes of this investigation, the products covered are
shipments of certain malleable iron pipe fittings, cast, other than
grooved fittings, from the People's Republic of China. The merchandise
is classified under item numbers 7307.19.90.30, 7307.19.90.60 and
7307.19.90.80 of the Harmonized Tariff Schedule. HTSUS subheadings are
provided for convenience and customs purposes. The written description
of the scope of this proceeding is dispositive.
Determination of Industry Support for the Petition
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a domestic like product. Thus, to determine whether the
petition has the requisite industry support, the statute directs the
Department to look to producers and workers who produce the domestic
like product. The United States International Trade Commission (ITC),
which is responsible for determining whether ``the domestic industry''
has been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both the Department and
the ITC must apply the same statutory definition regarding domestic
like product (see section 771(10) of the Act), they do so for different
purposes and pursuant to their separate and distinct authority. In
addition, the Department's determination is subject to limitations of
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to the law. See Algoma Steel Corp. Ltd., v.
United States, 688 F. Supp. 639, 642-44 (CIT 1988); High Information
Content Flat Panel Displays and Display Glass Therefore from Japan:
Final Determination; Rescission of Investigation and Partial Dismissal
of Petition, 56 FR 32376, 32380-81 (July 16, 1991).
Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition.
In this petition, the petitioners do not offer a definition of
domestic like product distinct from the scope of these investigations.
Thus, based on our analysis of the information presented to the
Department by the petitioners, and the information obtained and
received independently by the Department, we have determined that there
is a single domestic like product, which is defined in the Scope of
Investigation section above, and have analyzed industry support in
terms of this domestic like product.
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act states
that the administering authority shall determine that a petition has
been filed by or on behalf of the industry if: (1) the domestic
producers or workers who support the petition account for at least 25
percent of the total production of the domestic like
[[Page 70580]]
product; and (2) the domestic producers or workers who support the
petition account for more than 50 percent of the production of the
domestic like product produced by that portion of the industry
expressing support for, or opposition to, the petition.
Information contained in the petition demonstrates that the
domestic producers or workers who support the petition account for over
50 percent of total production of the domestic like product. See
Petition for Imposition of Antidumping Duties: Malleable Iron Pipe
Fittings from the People's Republic of China (Pipe Fittings Petition),
dated October 30, 2002, at pages 2-3 and Exhibits 1 and 2. See also
Amendment to the Petition dated November 15, 2002, at Exhibit 1.
Therefore, the domestic producers or workers who support the petitions
account for at least 25 percent of the total production of the domestic
like product, as required by section 732(c)(4)(A)(i). See Import
Administration AD Investigation Checklist, dated November 19, 2002
(Initiation Checklist) (public version on file in the Central Records
Unit of the Department of Commerce, 1401 Constitution Ave., NW, Room B-
099).
Furthermore, because the Department received no opposition to the
petition, the domestic producers or workers who support the petition
account for more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support for
or opposition to the petition. See Initiation Checklist. Thus, the
requirements of section 732(c)(4)(A)(ii) are met.
Accordingly, the Department determines that the petition was filed
on behalf of the domestic industry within the meaning of section
732(b)(1) of the Act.
Export Price and Normal Value
The following is a description of the allegation of sales at less
than fair value upon which the Department has based its decision to
initiate this investigation. The sources of data for the deductions and
adjustments relating to U.S. price and factors of production (FOP) are
detailed in the Initiation Checklist.
The anticipated period of investigation (POI) for the PRC, a non-
market economy (NME) country, is April 1, 2002, through September 30,
2002. Regarding an investigation involving a NME country, the
Department presumes, based on the extent of central government control
in a NME, that a single dumping margin, should there be one, is
appropriate for all NME exporters in the given country. See, e.g.,
Final Determination of Sales at Less Than Fair Value: Silicon Carbide
from the PRC, 59 FR 22585 (May 2, 1994). In the course of the
investigation of malleable pipe fittings from the PRC, all parties will
have the opportunity to provide relevant information related to the
issue of the PRC's status and the granting of separate rates to
individual exporters.
Export Price
The petitioners identified the following seven companies as
producers and/or exporters of malleable pipe fittings from the PRC:
Jinan Meide Casting Co., Ltd., National Steel Products Co., Ltd.,
Shandong Flying Casting & Forging Co., Ltd., Dalian Zhong Sheng Metal
Products Co., Ltd., Hebei Great Wall Import & Export Corporation,
Tianjin Foreign Trade Group, and Xiamen Jia Da Quan Valves & Fittings
Co., Ltd. To calculate export price (EP), petitioners used publicly
available price quotes for Chinese products from a U.S. distributer.
From these price quotes, petitioners deducted a 10 percent rebate from
the listed warehouse price, 5 percent of the net price for commission
to the importer/wholesale distributor's sales representative, and 20
percent of the net price as the importer/distributor's mark-up to
arrive at the importer price. Petitioners reasonably based these
deductions on affidavits by a senior Anvil International official
attesting that this price structure is representative of prices charged
throughout the United States. See Initiation Checklist. We will further
examine the nature of these deductions during the investigation.
Petitioners further deducted U.S. customs duty of 6.2 percent to
arrive at a price net of customs duty. Petitioners calculated net U.S.
price by deducting ocean freight and foreign inland freight from the
price net of customs duty. See Exhibits 22 and 24 of the Petition.
Petitioners estimated ocean freight by subtracting the average unit
free alongside ship (FAS) value of subject imports from the average
unit cost, insurance and freight (CIF) value using the Bureau of the
Census IM145 import statistics. See Initiation Checklist.
Normal Value
The petitioners assert that the PRC is a NME country and that no
determination to the contrary has yet been made by the Department. In
all of its previous investigations, the Department has treated the PRC
as a NME. See, e.g., Notice of Final Determination Sales at Less Than
Fair Value: Certain Folding Gift Boxes from the People's Republic of
China, 66 FR 58115 (November 20, 2001), and Notice of Final
Determination of Sales at Less Than Fair Value: Folding Metal Tables
and Chairs from the People's Republic of China, 67 FR 20090 (April 29,
2002). In accordance with section 771(18)(C)(i) of the Act, the
presumption of NME status remains in effect until revoked by the
Department. The presumption of NME status for the PRC has not been
revoked by the Department and, therefore, remains in effect for
purposes of the initiation of this investigation. Because the PRC's
status as a NME remains in effect, pursuant to section 771(18)(C)(i) of
the Act, the petitioners determined the dumping margin using a FOP
analysis.
For normal value (NV), the petitioners based the FOP, with the
exception of labor, as defined by section 773(c)(3) of the Act, on the
quantities of inputs of one U.S. malleable pipe fittings producer, Ward
Manufacturing, Inc. The petitioners based the FOP for labor, as defined
by section 773(c)(3) of the Act, on the quantities of inputs from the
public ranged data of labor hours in the production of non-malleable
pipe fittings,\1\ reduced by 10 percent. The petitioners assert that
information regarding the Chinese producers' consumption rates is not
reasonably available, and have therefore assumed, for purposes of the
petition, that producers in the PRC use the same inputs in the same
quantities as the petitioners use. Based on the information provided by
the petitioners, we believe that the petitioners' FOP methodology
represents information reasonably available to the petitioners and is
appropriate for purposes of initiating this investigation.
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\1\ Submitted as a Section D Questionnaire Response by Jinan
Meide Casting Company in the investigation of Non-Malleable Cast
Iron Pipe Fittings from China, A-570-875 (June 17, 2002)
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Pursuant to section 773(c) of the Act, the petitioners assert that
India is the most appropriate surrogate country for the PRC, claiming
that India is: (1) a market economy; (2) a significant producer of
comparable merchandise; and (3) at a level of economic development
comparable to the PRC in terms of per capita gross national income
(GNI). The Department's regulations state that it will place primary
emphasis on per capita GNI in determining whether a given market
economy is at a level of economic development comparable to the NME
country (see 19 CFR 351.408(b)). In recent antidumping cases involving
the PRC, the Department identified a group of countries at a level of
economic development comparable to the PRC based primarily on per
capita GNI. This
[[Page 70581]]
group includes India, Indonesia, Sri Lanka, the Philippines, and
Pakistan. With the exception of India, none of these countries is a
significant producer of malleable pipe fittings. The petitioners assert
that India is the most appropriate surrogate. Based on the information
provided by the petitioners, we believe that the petitioners' use of
India as a surrogate country is appropriate for purposes of initiating
this investigation.
In accordance with section 773(c)(4) of the Act, petitioners valued
FOP, where possible, on reasonably available, public surrogate data
from India. Materials were valued based on Indian import values, as
published by Monthly Statistics of the Foreign Trade of India (Indian
Import Statistics). Petitioners applied an inflation adjustment factor
using the Indian Wholesale Price Index for September 2002. Petitioners
divided the index for the period available by the index derived from
the period in which the input price was located, and multiplied the
input price by the resulting ratio. Petitioners calculated the
surrogate value of steel scrap using the mill heavy average prices
reported by the Indian newspaper, The Economic Times, which yields more
contemporaneous publicly available prices. See Initiation Checklist.
Labor was valued using the Department's regression-based wage rate
for the PRC, in accordance with 19 CFR 351.408(c)(3). See Initiation
Checklist.
Electricity was valued using Indian electricity prices for
industrial consumers taken from the second quarter 2002 issue of Energy
Prices and Taxes published by the OECD's International Energy Agency.
The electricity prices for industry for India are reported in U.S.
dollars and for the year of 2000. In order to arrive at September 2002
prices, petitioners multiplied the computed amount by a U.S. inflation
factor because it was denominated in U.S. dollars. See Initiation
Checklist.
Petitioners derived the surrogate value for natural gas from a
price in India found in the 1999 financial report of EOG Resources
Inc., expressed in U.S. dollars per MCF. To inflate the price to
September 2002 levels, petitioners multiplied the amount by a U.S.
inflation factor because it was denominated in U.S. dollars. See
Initiation Checklist.
For overhead, selling, depreciation, and general and administrative
(SG&A) expenses, petitioners calculated the financial ratios based on
the Indian financial data used in the Preliminary Determination of Non-
Malleable Cast Iron Pipe Fittings from the People's Republic of China.
See Memo to Holly A. Kuga dated September 19, 2002. Based on the
information provided by the petitioners, we believe that the surrogate
values represent information reasonably available to the petitioners
and are acceptable for purposes of initiating this investigation. See
Initiation Checklist.
Based upon the comparison of EP to NV, the estimated dumping
margins are between 34.69 and 148.08 percent. Should the need arise to
use any of this information as facts available under section 776 of the
Act in our preliminary or final determination, we will re-examine the
information and may revise the margin calculation, if appropriate.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of malleable pipe fittings from the PRC are being,
or are likely to be, sold at less than fair value.
Allegations and Evidence of Material Injury and Causation
The petitioners allege that the U.S. industry producing the
domestic like product is being materially injured, or is threatened
with material injury, by reason of imports of the subject merchandise
sold at less than NV. The volume of imports from the PRC, using the
latest available data, exceeded the statutory threshold of seven
percent for a negligibility exclusion. See section 771(24)(A)(ii) of
the Act. The petitioners contend that the industry's injured condition
is evidenced in the declining trends in profitability, shipments,
production, capacity utilization, employment, decreased U.S. market
share, and increasing Chinese imports. The allegations of injury and
causation are supported by relevant evidence including U.S. Customs
import data, domestic consumption, and domestic production information.
We have assessed the allegations and supporting evidence regarding
material injury and causation, and have determined that these
allegations are properly supported by accurate and adequate evidence
and meet the statutory requirements for initiation. See Initiation
Checklist.
Initiation of the Antidumping Investigation
Based on our examination of the petition on malleable pipe
fittings, and the petitioners' response to our supplemental
questionnaires clarifying the petition, and additional independent
data, we find that the petition meets the requirements of section 732
of the Act. See Initiation Checklist. Therefore, we are initiating the
antidumping duty investigation to determine whether imports of
malleable pipe fittings from the PRC are being, or are likely to be,
sold in the United States at less than fair value. Unless this deadline
is extended, we will make our preliminary determination no later than
140 days after the date of this initiation.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of the petition has been provided to the representatives
of the government of the PRC. We will attempt to provide a copy of the
public version of the petition to each exporter named in the petition,
as appropriate.
International Trade Commission Notification
We have notified the ITC of our initiation, as required by section
732(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine, no later than December 16, 2002 whether
there is a reasonable indication that imports of malleable pipe
fittings from the PRC are causing material injury, or threatening to
cause material injury, to a U.S. industry. A negative ITC determination
will result in the investigation being terminated; otherwise, this
investigation will proceed according to statutory and regulatory time
limits.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: November 19, 2002.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 02-29914 Filed 11-22-02; 8:45 am]