[Federal Register Volume 60, Number 17 (Thursday, January 26, 1995)]
[Notices]
[Pages 5166-5168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2001]



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DEPARTMENT OF COMMERCE
[C-201-405]


Certain Textile Mill Products from Mexico; Preliminary Results of 
Countervailing Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Commerce.

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Review.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on certain 
textile mill products from Mexico for the period January 1, 1992, 
through December 31, 1992. We preliminarily determine the total net 
subsidy to be 0.15 percent ad valorem for all companies during this 
review period. In accordance with 19 CFR 355.7, any rate less than 0.50 
percent ad valorem is de minimis. We invite interested parties to 
comment on these preliminary results.

EFFECTIVE DATE: January 26, 1995.

FOR FURTHER INFORMATION CONTACT: Mercedes Fitchett or Dana Mermelstein, 
Office of Countervailing Compliance, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230, 
telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On March 12, 1993, the Department published a notice of 
``Opportunity to Request Administrative Review'' (58 FR 13583) for the 
countervailing duty order on certain textile mill products from Mexico 
(50 FR 10824; March 18, 1985). We received a request for review from 
the Amalgamated Clothing and Textile Workers Union (ACTWU), an 
interested party. The Government of Mexico and the Camara Nacional de 
la Industria Textil, a Mexican textile trade association, objected to 
ACTWU's request for review, claiming that ACTWU was not an interested 
party. The Department reviewed the information provided by the ACTWU 
with its request for review, which indicated that ACTWU members 
produced the subject merchandise. In accordance with 19 CFR Sec. 355.2, 
the Department determined that ACTWU is an interested party in the 
proceeding, and is thus entitled to request an administrative review.
    We initiated the review, covering the period January 1, 1992, 
through December 31, 1992, on May 6, 1993 (58 FR 26960). This review 
involves 32 companies and 10 government programs. The Department is now 
conducting this review in accordance with section 751 of the Tariff Act 
of 1930, as amended (the Act).

Scope of Review

    Imports covered by this review are certain textile mill products 
from Mexico. Shipments of such merchandise are classifiable under the 
Harmonized Tariff Schedule (HTS) item numbers listed in the Appendix to 
this notice.

Calculation Methodology for Assessment and Deposit Purposes

    We calculated the net subsidy on a country-wide basis by first 
calculating the subsidy rate for each company subject to the 
administrative review. We then weight-averaged the rate received by 
each company using as the weight its share of total Mexican exports to 
the United States of subject merchandise, including all companies, even 
those with de minimis and zero rates. We then summed the individual 
companies' weighted-average rates to determine the subsidy rate from 
all programs benefiting exports of subject merchandise to the United 
States.
    Since the country-wide rate calculated using this methodology was 
de minimis, as defined by 19 CFR Sec. 355.7(1994), no further 
calculations were necessary.

Analysis of Programs

(1) BANCOMEXT Financing for Exporters

    Effective January 1, 1992, the Mexican Treasury Department 
eliminated the FOMEX loan program and transferred the FOMEX trust to 
the Banco Nacional de Comercio Exterior, S.N.C. (BANCOMEXT). The 
BANCOMEXT program operates much like its predecessor, FOMEX. BANCOMEXT 
offers short-term financing to producers or trading companies engaged 
in export activities; any company generating foreign currency through 
exports is eligible for financing under this program. In addition, 
BANCOMEXT may provide financing to foreign buyers of Mexican goods and 
services. BANCOMEXT provides two types of financing, both in U.S. 
dollars: working capital loans (pre-export loans), and loans secured by 
export sales (export loans).
    The Department has previously found this program to confer an 
export subsidy to the extent that the loans are provided at 
preferential rates. See, e.g., Ceramic Tile From Mexico; Preliminary 
Results of Countervailing Duty Review (57 FR 5997; February 19, 1992) 
and Ceramic Tile From Mexico; Final Results of Countervailing Duty 
Review (57 FR 24247; June 8, 1992). In this review, the Government of 
Mexico provided no new information or evidence of changed circumstances 
that would warrant reconsideration of that determination.
    Because loans are provided by BANCOMEXT to commercial banks in 
dollars and indexed to dollars for repayment, we used a dollar 
benchmark. See Certain Steel Products from Mexico; Final Countervailing 
Duty Determination (58 FR 37357; July 9, 1993). To determine the 
benchmark for BANCOMEXT pre-export and export loans on which interest 
was due during 1992, we used the average of the quarterly weighted-
average effective interest rates published in the Federal Reserve 
Bulletin, namely 7.18 percent. Generally, the BANCOMEXT loans under 
review were granted at annual interest rates ranging from 7.0 percent 
to 11.11 percent.
    We consider the benefits from preferential loans to occur at the 
time the interest is paid. Because interest on BANCOMEXT pre-export 
loans is paid at maturity, we calculated benefits based on pre-export 
loans that matured during the review period; such loans were obtained 
between March 1992 and May 1992. Interest on BANCOMEXT 
[[Page 5167]] export loans is paid in advance; we therefore calculated 
benefits based on BANCOMEXT export loans received during the review 
period. Also, because exporters are able to tie BANCOMEXT loans to 
specific shipments, we measure the benefit only from BANCOMEXT loans 
tied to shipments of the subject merchandise to the United States.
    Several exporters of certain textile mill products used BANCOMEXT 
export sales financing; however, during the review period, BANCOMEXT 
charged a preferential annual interest rate on only one loan. To 
determine the benefit for this loan, we multiplied the difference 
between the interest rate charged and the benchmark interest rate by 
the principal and then multiplied this amount by the term of the loan 
divided by 365. We then divided the BANCOMEXT benefit by the value of 
the company's total exports of subject merchandise to the United States 
during the review period and then weight-averaged the resulting benefit 
by the company's portion of total exports of subject merchandise to the 
United States. On this basis, we preliminarily determine the benefit 
from this program to be less than 0.005 percent ad valorem.

(2) PITEX

    The Program for Temporary Importation of Products used in the 
Production of Exports (PITEX) was established by a decree published in 
the Diario Oficial on May 9, 1985, and amended in the Diario Oficial on 
September 19, 1986, and May 3, 1990. The program is jointly 
administered by the Ministry of Commerce and Industrial Development 
(SECOFI) and the Customs Administration. Under PITEX, exporters with a 
proven export record may receive authorization to temporarily import 
products to be used in the production of exports for up to five years 
without having to pay the import duties normally imposed on those 
imports. PITEX allows for the exemption of import duties for the 
following categories of merchandise used in export production: raw 
materials, packing materials, fuels and lubricants, machinery used to 
manufacture products for export, and spare parts and other machinery. 
The importer must post a bond or other security to guarantee the 
reexportation of the temporary imports. Because it is only available to 
exporters, the Department previously found in Certain Textile Mill 
Products From Mexico; Final Results of Countervailing Duty 
Administrative Review (56 FR 50859; October 9, 1991) and Ceramic Tile 
From Mexico; Final Results of Countervailing Duty Administrative Review 
(57 FR 24247; June 8, 1992) that PITEX provides countervailable 
benefits to the extent that it provides duty exemptions on imports of 
merchandise not physically incorporated into exported products. In this 
review, the Government of Mexico provided no new information or 
evidence of changed circumstances that would warrant reconsideration of 
that determination.
    During the review period, three firms used the PITEX program for 
temporary imports of machinery and spare parts which are not physically 
incorporated into exported products. To calculate the benefit from this 
program, we first calculated the duties which would have otherwise been 
paid by each company on the non- physically incorporated items that 
were imported under the PITEX program during the review period. We then 
divided that amount by each company's total exports of subject 
merchandise to the United States during the review period and then 
weight-averaged the resulting benefit by each company's portion of 
total exports of subject merchandise to the United States. On this 
basis, we preliminarily determine the benefit from this program to be 
0.15 percent ad valorem. 

(3) Other Programs

    We also examined the following programs and preliminarily determine 
that producers and exporters of the subject merchandise did not apply 
for or receive benefits under these programs during the review period:

(A) Other BANCOMEXT preferential financing;
(B) Fiscal Promotion Certificates (CEPROFI);
(C) Import duty reductions and exemptions;
(D) State tax incentives;
(E) Article 15 Loans;
(F) NAFINSA FONEI-type financing; and
(G) NAFINSA FOGAIN-type financing.

Preliminary Results of Review

    We preliminarily determine the total net subsidy to be 0.15 percent 
ad valorem during the period January 1, 1992 through December 31, 1992. 
In accordance with 19 CFR 355.7, any rate less than 0.5 percent ad 
valorem is de minimis.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the Customs 
Service to liquidate, without regard to countervailing duties, all 
shipments of the subject merchandise from Mexico exported on or after 
January 1, 1992, and on or before December 31, 1992. Further, as 
provided by section 751(a)(1) of the Act, the Department will instruct 
Customs to collect cash deposits of estimated countervailing duties at 
a rate of zero for all shipments of the subject merchandise from Mexico 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of the final results of this administrative review.
    Parties to the proceeding may request disclosure of the calculation 
methodology and interested parties may request a hearing not later than 
10 days after the date of publication of this notice. Interested 
parties may submit written arguments in case briefs on these 
preliminary results within 30 days of the date of publication. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
seven days after the time limit for filing the case brief. Any hearing, 
if requested, will be held seven days after the scheduled date for 
submission of rebuttal briefs. Copies of case briefs and rebuttal 
briefs must be served on interested parties in accordance with 19 CFR 
355.38(e).
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 355.38(c), are due.
    The Department will publish the final results of this 
administrative review including the results of its analysis of issues 
raised in any case or rebuttal brief or at a hearing.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
355.22.

    Dated: January 16, 1995.
Susan G. Esserman


Assistant Secretary for Import Administration.

      Appendix--Certain Textile Mill Products from Mexico C-201-405 Harmonized Tariff System (HTS) Numbers      
                                                                                                                
                                                                                                                
4010.10.10...........         5109.10.60             5109.90.60             5111.11.70             5111.19.60   
5111.20.90...........         5111.30.90             5112.20.30             5112.30.30            5204.11.00    
[[Page 5168]]                                                                                                   
                                                                                                                
5204.19.00...........         5204.20.00             5205.11.10             5205.12.10             5205.12.20   
5205.13.10...........         5205.13.20             5205.14.10             5205.23.00             5205.24.00   
5205.25.00...........         5205.31.00             5205.32.00             5205.33.00             5205.34.00   
5205.42.00...........         5205.43.00             5205.44.00             5206.11.00             5206.12.00   
5206.13.00...........         5206.14.00             5206.15.00             5206.31.00             5206.32.00   
5206.33.00...........         5206.34.00             5206.35.00             5206.41.00             5206.42.00   
5206.43.00...........         5206.44.00             5206.45.00             5207.10.00             5207.90.00   
5208.11.20...........         5208.12.40             5208.13.00             5208.19.40             5208.21.20   
5208.21.40...........         5208.22.40             5208.22.60             5208.23.00             5208.29.40   
5208.29.60...........         5208.31.40             5208.31.60             5208.31.80             5208.32.30   
5208.32.40...........         5208.32.50             5208.33.00             5208.39.20             5208.39.80   
5208.41.40...........         5208.41.60             5208.41.80             5208.42.30             5208.42.40   
5208.42.50...........         5208.43.00             5208.49.40             5208.51.40             5208.51.60   
5208.51.80...........         5208.52.30             5208.52.40             5208.52.50             5208.53.00   
5208.59.20...........         5208.59.80             5209.11.00             5209.19.00             5209.31.60   
5209.32.00...........         5209.41.60             5209.43.00             5209.51.60             5209.52.00   
5210.21.40...........         5210.21.60             5210.22.00             5210.29.40             5210.29.60   
5210.32.00...........         5210.39.40             5210.39.60             5210.52.00             5210.59.40   
5210.59.60...........         5211.31.00             5211.51.00             5401.10.00             5401.20.00   
5402.10.30...........         5402.20.30             5402.31.30             5402.31.60             5402.32.30   
5402.32.60...........         5402.33.30             5402.41.00             5402.43.00             5402.49.00   
5402.51.00...........         5402.52.00             5402.59.00             5403.20.30             5403.20.60   
5406.10.00...........         5406.20.00             5407.41.00             5407.42.00             5407.43.20   
5407.44.00...........         5407.52.20             5407.53.10             5407.53.20             5407.54.00   
5407.60.05...........         5407.60.10             5407.60.20             5407.91.05             5407.92.05   
5407.93.05...........         5407.94.05             5408.21.00             5408.22.00             5408.23.20   
5408.24.00...........         5408.31.05             5408.32.05             5408.33.05             5408.34.05   
5508.10.00...........         5508.20.00             5509.12.00             5509.21.00             5509.22.00   
5509.31.00...........         5509.32.00             5509.41.00             5509.51.30             5509.51.60   
5509.53.00...........         5509.69.20             5509.69.40             5509.99.20             5509.99.40   
5511.10.00...........         5511.20.00             5511.30.00             5513.11.00             5513.13.00   
5513.19.00...........         5513.21.00             5513.23.00             5513.29.00             5513.33.00   
5513.39.00...........         5513.41.00             5513.43.00             5513.49.00             5514.11.00   
5514.19.00...........         5514.21.00             5514.29.00             5514.41.00             5514.49.00   
5515.13.05...........         5516.11.00             5516.12.00             5516.13.00             5516.14.00   
5516.41.00...........         5516.42.00             5516.43.00             5516.44.00             5516.91.00   
5516.92.00...........         5516.93.00             5516.94.00             5601.10.20             5601.22.00   
5602.10.90...........         5602.21.00             5602.90.60             5603.00.90             5607.41.30   
5607.49.15...........         5607.49.25             5607.50.20             5608.11.00             5701.10.16   
5701.10.20...........         5701.90.20             5702.10.90             5702.31.10             5702.31.20   
5702.32.10...........         5702.32.20             5702.41.10             5702.41.20             5702.42.10   
5702.42.20...........         5702.51.20             5702.51.40             5702.52.00             5702.91.30   
5702.91.40...........         5702.92.00             5703.10.00             5703.20.10             5703.20.20   
5703.30.00...........         5704.10.00             5704.90.00             5705.00.20             5801.31.00   
5801.33.00...........         5801.34.00             5801.35.00             5801.36.00             5803.10.00   
5803.90.30...........         5804.10.00             5804.21.00             5804.29.00             5804.30.00   
5805.00.25...........         5806.32.10             5810.10.00             5810.91.00             5810.92.00   
5902.10.00...........         5902.20.00             5902.90.00             5911.10.20             5911.20.10   
5911.31.00...........         5911.32.00             6001.10.20             6001.22.00             6001.92.00   
6002.10.80...........         6002.20.10             6002.20.60             6002.30.20             6002.43.00   
6002.93.00...........         6301.10.00             6301.20.00             6301.30.00             6301.40.00   
6301.90.00...........         6302.22.10             6302.22.20             6302.32.10             6302.32.20   
6302.40.10...........         6302.40.20             6302.51.10             6302.51.20             6302.51.30   
6302.51.40...........         6302.52.10             6302.52.20             6302.53.00             6302.59.00   
6302.91.00...........         6302.92.00             6302.93.20             6302.99.20             6303.12.00   
6303.19.00...........         6303.92.00             6303.99.00             6304.11.20             6304.19.05   
6304.19.15...........         6304.19.20             6304.91.00             6304.92.00             6304.93.00   
6304.99.15...........         6304.99.60             7019.20.10             9404.90.90      ....................

5209.32.00  Coverage limited to fabrics, not napped, of numbers 17 
to 33.
5209.52.00  Coverage limited to fabrics, not napped, of numbers 17 
to 33.
5402.10.30  Coverage limited to yarns provided for in subheading 
5402.10.3040.
5402.20.30  Coverage limited to yarns provided for in subheading 
5402.20.3040.
5402.33.30  Coverage limited to yarns, valued not over $2.20 per 
kilogram.
5402.41.00  Coverage limited to yarns provided for in subheading 
5402.41.0040.
5402.43.00  Coverage limited to yarns provided for in subheading 
5402.42.0040.
5402.49.00  Coverage limited to yarns provided for in subheading 
5402.49.0070 and 5402.49.0080.
5509.31.00  Not to include single blended yarns containing a 
combination of noncontinuous acrylic and continuous nylon filaments.
5509.32.00  Not to include plied blended yarns containing a 
combination of noncontinuous acrylic and continuous nylon filaments.

[FR Doc. 95-2001 Filed 1-25-95; 8:45 am]
BILLING CODE 3510-DS-P