[Federal Register: July 16, 2003 (Volume 68, Number 136)]
[Notices]
[Page 42002-42004]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jy03-46]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-886, A-557-813, A-549-821]
Initiation of Antidumping Duty Investigations: Polyethylene
Retail Carrier Bags from The People's Republic of China, Malaysia, and
Thailand
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 16, 2003.
FOR FURTHER INFORMATION CONTACT: Fred W. Aziz, Thomas Schauer, or
Richard Rimlinger, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-4023, (202) 482-0410 or (202) 482-4477, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On June 20, 2003, the Department of Commerce (``the Department'')
received a petition on imports of polyethylene retail carrier bags
(``PRCBs'') from The People's Republic of China (``the PRC''),
Malaysia, and Thailand, filed in proper form by PCL Packaging, Inc.,
Sonoco Products Company, Superbag Corp., Vanguard Plastics, Inc., and
Inteplast Group, Ltd. (referred to hereafter as ``the petitioners'').
On June 25, 2003, the Department requested additional information and
clarification of certain areas of the petition. The petitioners filed
supplements to the petition on June 30, 2003 and July 8, 2003.
In accordance with section 732(b) of the Tariff Act of 1930, as
amended (``the Act''), the petitioners allege that imports of PRCBs
from the PRC, Malaysia, and Thailand 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
and threaten to 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 section 771(9)(c) of the Act. Furthermore, with respect to
the antidumping duty investigations the petitioners are requesting the
Department to initiate, they have demonstrated sufficient industry
support (see ``Determination of Industry Support for the Petition''
below).
Scope of Investigation
The merchandise subject to this investigation is polyethylene
retail carrier bags, which also may be referred to as t-shirt sacks,
merchandise bags, grocery bags, or checkout bags. The subject
merchandise is defined as non-sealable sacks and bags with handles
(including drawstrings), without zippers or integral extruded closures,
with or without gussets, with or without printing, of polyethylene film
having a thickness no greater than .035 inch (0.889 mm) and no less
than .00035 inch (0.00889 mm), and with no length or width shorter than
6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of
the bag may be shorter than 6 inches but not longer than 40 inches
(101.6 cm). Polyethylene retail carrier bags are typically provided
without any consumer packaging and free of charge by retail
establishments (e.g., grocery, drug, convenience, department, specialty
retail, and discount stores, and restaurants) to their customers to
package and carry their purchased products. The scope of the petition
excludes (1) polyethylene bags that are not printed with logos or store
names and that are close-able with drawstrings made of polyethylene
film and (2) polyethylene bags that are packed in consumer packaging
with printing that refers to specific end uses other than packaging and
carrying merchandise from retail establishments (e.g., garbage bags,
lawn bags, trash can liners). Imports of the subject merchandise are
classified under statistical category 3923.21.0090 of the Harmonized
Tariff Schedule of the United States. This subheading also covers
products that are outside the scope of these investigations.
Furthermore, although the HTSUS subheading is provided for convenience
and customs purposes, our written description of the scope of these
investigations is dispositive.
During our review of the petition, we discussed the scope with the
petitioners to ensure that it is an accurate reflection of the products
for which the domestic industry is seeking relief. Moreover, as
discussed in the preamble to the regulations (62 FR 27296, 27323), we
are setting aside a period for interested parties to raise issues
regarding product coverage. The Department encourages all interested
parties to submit such comments within 20 calendar days of publication
of this notice. Comments should be addressed to Import Administration's
Central Records Unit at Room 1870, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230. The
period of scope consultations is intended to provide the Department
with ample opportunity to consider all comments and consult with
parties prior to the issuance of the preliminary
determination.Determination of Industry Support for the Petition
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
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (1) at least
25 percent of the total production of the domestic like product; and
(2) 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.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole 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 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 the Department and the
ITC must apply the same statutory definition regarding the domestic
like product (see section 771(10) of the Act), they do so for different
purposes and pursuant to 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
domestic like product, such differences do not render the decision of
either agency contrary to law.\1\
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\1\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT
2001), citing Algoma Steel Corp. v. United States, 688 F. Supp. 639,
642-44 (CIT 1988).
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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 subtitle.'' 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.
[[Page 42003]]
With regard to the definition of domestic like product, the
petitioner does not offer a definition of domestic like product
distinct from the scope of the investigation. Based on our analysis of
the information presented by the petitioners, we have determined that
there is a single domestic like product, plastic retail carrier bags,
which is defined in the ``Scope of Investigation'' section above, and
we have analyzed industry support in terms of the domestic like
product.
The petitioners established industry support representing over 50
percent of total production of the domestic like product. Therefore,
the domestic producers or workers who support the petition account for
at least 25 percent of the total production of the domestic like
product, and the requirements of section 732(c)(4)(A)(i) are met.
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. Thus, the requirements of section
732(c)(4)(A)(ii) are also 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. See Industry Support Attachment to the Initiation
Checklist (``Initiation Checklist''), dated July 10, 2003, on file in
the Central Records Unit in Room B-099 of the main Department of
Commerce Building.
Period of Investigation
The anticipated period of investigation is April 1, 2002, through
March 31, 2003, for the Malaysia and Thailand investigations and
October 1, 2002, through March 31, 2003, for the PRC investigation.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which the Department based its decision to
initiate these investigations. The sources of data for the deductions
and adjustments relating to U.S. price and normal value are discussed
in greater detail in the Initiation Checklist. Should the need arise to
use any of this information as facts available under section 776 of the
Act, we may reexamine the information and revise the margin
calculations, if appropriate.
The petition identified 37 producers of PRCBs in the PRC (see June
20, 2003, petition, Exhibit 5), 14 producers in Malaysia (see June 20,
2003, petition, Exhibit 6), and 16 producers in Thailand (see June 20,
2003, petition, Exhibit 7).
Export Price and Normal Value - The PRC
The petitioners based export price on the price of the PRC-
manufactured PRCBs from two Chinese exporters. We have examined the
information provided regarding export price and have determined that it
represents information reasonably available to the petitioners and have
reviewed it for adequacy and accuracy. See Initiation Checklist.
The petitioners assert that the Department considers the PRC to be
a non-market-economy (``NME'') country and, therefore, they constructed
normal value based on the factors-of-production methodology pursuant to
section 773(c) of the Act. In previous cases, the Department has
determined that the PRC is an NME country. See e.g., Final
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from the People's Republic of
China (Cold-Rolled Steel from China), 65 FR 34660 (May 31, 2000). In
accordance with section 771(18)(c)(i) of the Act, the NME status
remains in effect until revoked by the Department. The NME status of
the PRC has not been revoked by the Department and, therefore, remains
in effect for purposes of the initiation of this investigation.
Accordingly, the normal value of the product is based on factors of
production valued in a surrogate market-economy country in accordance
with section 773(c) of the Act. In the course of this investigation,
all parties will have the opportunity to provide relevant information
related to the issues of the PRC's NME status and the granting of
separate rates to individual exporters. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Silicon Carbide from
the People's Republic of China, 59 FR 22585, 22586-87 (May 2, 1994).
As required by 19 CFR 351.202(b)(7)(i)(c), the petitioners provided
dumping margin calculations using the Department's NME methodology
described in 19 CFR 351.408. For the calculation of normal value, the
petitioners based the factors of production, as defined by section
773(c)(3) of the Act (raw materials, labor, and overhead), for PRCBs on
the quantities of inputs consumed by a U.S. producer of PRCBs. See
Initiation Checklist.
The petitioners selected India as their surrogate country. The
petitioners stated that India is comparable to the PRC in its level of
economic development and is a significant producer of comparable
merchandise. Based on the information provided by the petitioners, we
believe that the petitioners' use of India as a surrogate country is
reasonable for purposes of initiation of this investigation. See
Initiation Checklist.
In accordance with section 773(c)(4) of the Act, the petitioners
valued factors of production for PRCBs, where possible, on reasonably
available, public surrogate-country data. To value raw materials,
including color concentrate, printing ink, adhesive, and corrugated
boxes, the petitioners used official Indian government import
statistics. They used the most current information for wholesale price
indices in India as published in the International Financial Statistics
of the International Monetary Fund to determine the appropriate
adjustments for inflation. The petitioners valued labor using the
Department's regression-based wage rate for the PRC, in accordance with
19 CFR 351.408(c)(3). For factory overhead expenses, selling, general
and administrative expenses and profit, the petitioners applied rates
derived from the publicly available data reported for 2000-2001 for
companies in the Reserve Bank of India Bulletin (RBI Bulletin) from
December 2002. The RBI Bulletin covers data for 1,126 companies,
including producers of plastics products.
Based on comparisons of export price to normal value, calculated in
accordance with section 773(c) of the Act, the estimated dumping
margins for PRCBs from the PRC range from 83.81 percent to 129.86
percent.
Export Price and Normal Value - Malaysia
The petitioners based export price on the price of Malay-
manufactured PRCBs from a Malaysian producer. In order to obtain ex-
factory prices, the petitioners deducted the appropriate inland freight
from the sales value. We reviewed the information provided regarding
export price and have determined that it represents information
reasonably available to the petitioners and have reviewed it for
adequacy and accuracy. See Initiation Checklist.
The petitioners based normal value on the price of Malay-
manufactured PRCBs produced by the same company from which they
obtained the export prices. In order to obtain ex-factory prices, the
petitioners deducted inland freight, imputed credit, and value-added
taxes from the sales value. The petitioners added charges for printing
plates to the sales value. These charges were itemized separately in
the price
[[Page 42004]]
quotation. The petitioners also made a packing adjustment and a
difference-in-merchandise adjustment to normal value. We reviewed the
normal value information provided and have determined that it
represents information reasonably available to the petitioners and have
reviewed it for adequacy and accuracy. See Initiation Checklist.
Based on comparisons of export price to normal value, the estimated
dumping margins for PRCBs from Malaysia range from 81.55 percent to
101.74 percent.
Export Price and Normal Value - Thailand
The petitioners based export price on the price of Thai-
manufactured PRCBs from a Thai producer. We reviewed the information
provided regarding export price and have determined that it represents
information reasonably available to the petitioners and have reviewed
it for adequacy and accuracy. See Initiation Checklist.
The petitioners based normal value on the price of Thai-
manufactured PRCBs produced by the same company from which they
obtained the export prices. The petitioners made adjustments for
imputed credit expenses, packing, and difference-in-merchandise to
normal value. We reviewed the information provided regarding normal
value and have determined that it represents information reasonably
available to the petitioners and have reviewed it for adequacy and
accuracy. See Initiation Checklist.
Based on comparisons of export price to normal value, the estimated
dumping margins for PRCBs from Thailand range from 34.84 percent to
122.88 percent.
Fair-Value Comparison
Based on the data provided by the petitioners, there is reason to
believe that imports of PRCBs from the PRC, Malaysia, and Thailand are
being, or are likely to be, sold in the United States at less than fair
value.
Allegations and Evidence of Material Injury and Causation
The petition alleges that the U.S. industry producing the domestic
like product is being materially injured and is threatened with
material injury by reason of the imports of the subject merchandise
sold at less than normal value. The petitioners contend that the
industry's injured condition is evidenced by declining trends in market
share, pricing, production levels, profits, sales, and utilization of
capacity. Furthermore, the petitioners contend that injury and threat
of injury is evidenced by negative effects on its cash flow, ability to
raise capital, and growth.
These allegations are supported by relevant evidence including
import data, lost sales, lost revenue and pricing information. The
Department assessed the allegations and supporting evidence regarding
material injury and causation and determined that these allegations are
supported by accurate and adequate evidence and meet the statutory
requirements for initiation (see Initiation Checklist dated July 10,
2003, Re: Material Injury).
Initiation of Antidumping Investigations
Based upon the examination of the petition on PRCBs from the PRC,
Malaysia, and Thailand, and other information reasonably available to
the Department, we find that the petition meets the requirements of
section 732 of the Act. Therefore, we are initiating antidumping duty
investigations to determine whether imports of PRCBs from the PRC,
Malaysia, and Thailand are being, or are likely to be, sold in the
United States at less than fair value. Unless postponed, we will make
our preliminary determinations 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 governments of the PRC, Malaysia, and Thailand. We will attempt
to provide a copy of the public version of the petition to each
producer named in the petition, as appropriate.
International Trade Commission Notification
We have notified the ITC of our initiations, as required by section
732(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, no later than August 4, 2003,
whether there is a reasonable indication that imports of PRCBs from the
PRC, Malaysia, and Thailand are causing material injury, or threatening
to cause material injury, to a U.S. industry. A negative ITC
determination for any country will result in the investigation being
terminated with respect to that country; otherwise, these
investigations will proceed according to statutory and regulatory time
limits.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: July 10, 2003.
Jeffrey May,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-18017 Filed 7-15-03; 8:45 am]