[Federal Register Volume 60, Number 64 (Tuesday, April 4, 1995)]
[Notices]
[Pages 17053-17056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8193]
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DEPARTMENT OF COMMERCE
[A-588-836, A-580-826, A-570-842, A-583-824]
Initiation of Antidumping Duty Investigations: Polyvinyl Alcohol
From Japan, the Republic of Korea, the People's Republic of China, and
Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: April 4, 1995.
FOR FURTHER INFORMATION CONTACT: Louis Apple or John Brinkmann at (202)
482-1769 or (202) 482-5288, Office of Antidumping Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230. [[Page 17054]]
Initiation of Investigations
The Applicable Statute
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 (the Act) by the
Uruguay Round Agreements Act (URAA).
The Petition
On March 9, 1995, the Department of Commerce (the Department)
received a petition filed in proper form by Air Products and Chemicals,
Inc. (the petitioner), one of three U.S. producers of polyvinyl
alcohol. Supplements to the petition were filed on March 21 and 24,
1995.
In accordance with section 732(b) of the Act, the petitioner
alleges that imports of polyvinyl alcohol from Japan, the Republic of
Korea (Korea), the People's Republic of China (PRC), and Taiwan 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 threatening material injury to, a
U.S. industry.
The petitioner states that it has standing to file the petition
because it is an interested party, as defined under section 771(9)(C)
of the Act.
Determination of Industry Support for the Petition
Section 732(c) of the Act, as amended by the URAA, requires that
the Department determine, prior to the initiation of an investigation,
that a minimum percentage of the domestic industry supports an
antidumping petition. A petition meets those minimum requirements if
(1) domestic producers or workers who support the petition account for
at least 25 percent of the total production of the domestic like
product; and (2) those domestic producers or workers expressing support
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.
The petitioner, one of three known domestic producers of the
domestic like product, accounts for more than 25 percent of the total
production of the domestic like product as defined in the petition. One
producer has informed the Department that it takes no position
regarding this antidumping petition. Although the petition identified
only two U.S. producers of polyvinyl alcohol, on March 29, 1995, the
Department received a statement from another company indicating that it
is a producer of polyvinyl alcohol and that it opposes the petition. A
review of production data reveals that the petitioner accounts for more
than 25 percent of the total production of the domestic like product
and for more than 50 percent of that produced by companies expressing
support for, or opposition to, the petition. Accordingly, the
Department determines that this petition is supported by the domestic
industry.
Scope of the Investigations
The merchandise under investigation is polyvinyl alcohol. Polyvinyl
alcohol is a dry, white to cream-colored, water-soluble synthetic
polymer, usually prepared by hydrolysis of polyvinyl acetate. This
product includes polyvinyl alcohols hydrolyzed in excess of 85 percent,
whether or not mixed or diluted with defoamer or boric acid.
The merchandise under investigation is currently classifiable under
item 3905.20.00 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheading is provided for convenience and
customs purposes, the written description of the merchandise under
investigation is dispositive.
Export Price and Normal Value
Japan
Export price was based on a price offered by a Japanese trading
company in late September 1994. The petitioner adjusted the price for
foreign inland and ocean freight, storage and handling, U.S. duties,
and U.S. inland freight.
The petitioner based normal value on the low end of a range of
prevailing domestic invoice pricing obtained from a Japanese trading
company. The petitioner made adjustments to normal value for home
market inland freight, trading company mark-ups and differences between
home market and U.S. credit.
Based on a comparison of the export price to normal value, the
calculated dumping margin is 77.49 percent.
Korea
Export price was based on the average c.i.f. unit value of U.S.
imports from the Korea during November 1994. The petitioner adjusted
this price for foreign inland and ocean freight expenses.
The home market price was based on a letter from a Korean producer
to a home market customer, announcing an increase from the price in
effect during the fourth quarter of 1994. The petitioner adjusted the
price in effect prior to the increase for home market inland freight.
The petitioner based the normal value on constructed value (CV)
because it asserts that the Korean home market price provided in the
petition represented sales that were made below the cost of production
(COP) and, therefore, was not an appropriate basis for calculating
normal value.
The two components of COP are the cost of manufacture (COM) and
selling, general and administrative expenses (SG&A). The petitioner
calculated COM on the basis of its own cost and production experience
and published prices in trade publications for certain chemical inputs,
adjusted for known differences in Korean costs. For SG&A, including
financial expenses, the petitioner relied upon the financial statements
of the Korean producer of polyvinyl alcohol.
The allegation that the Korean producer is selling the foreign like
product in its home market at prices below its COP is based upon a
comparison of the adjusted home market price with the calculated COP.
Based on this information, we find reasonable grounds to believe or
suspect that sales of the foreign like product were made at prices
below COP in accordance with 773(b)(2)(A)(i) of the Act. Accordingly,
the Department will initiate a cost investigation with respect to
Korea.
Therefore, for purposes of this initiation, in accordance with
section 773(b)(1) of the Act, we are accepting the petitioner's
estimate of CV as the appropriate basis for Korean normal value. The
petitioner based CV on its COP methodology, adding an amount for profit
and export packing to arrive at a total CV. Prior to the amendment of
the Act by the URAA, the Department used the greater of actual profit
or an eight percent minimum profit to calculate CV. The URAA eliminated
the statutory minimum for profit. In the petition, therefore, profit
was calculated on the basis of the Korean producer's financial
statements, a method that is consistent with the URAA amendments.
Packing was based upon the petitioner's own cost experience.
For Korea, based on comparisons of export price to CV, the
calculated dumping margin is 187.43 percent.
People's Republic of China
Export price was based on the average c.i.f. unit value of U.S.
imports from the PRC during November 1994 and on a sales call report
from the same month. In both cases, the petitioner adjusted the
starting prices for ocean freight and U.S. credit. Because this is an
export price calculation, and because the Department does not deduct
direct selling expenses [[Page 17055]] from the export price, we have
recalculated the petitioner's export price to remove the U.S. credit
adjustment.
The petitioner asserts that the PRC is an NME within the meaning of
sections 771(18)(A) and (C) of the Act and in accordance with section
773(c) of the Act. Accordingly, the normal value of the product should
be based on the producer's factors of production, valued in a surrogate
market economy country. In previous investigations, the Department has
determined that the PRC is an NME, and the presumption of NME status
continues for the initiation of this investigation. See, e.g., Final
Determination of Sales at Less Than Fair Value: Glycine from the
People's Republic of China, 60 FR 5620 (Jan. 30, 1995).
It is our practice in NME cases to construct normal value from the
factors of production of those factories that produced polyvinyl
alcohol sold to the United States during the period of investigation.
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 Final Determination of Sales at Less Than Fair Value:
Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994).
With the exception of two raw materials, the petitioner based the
factors of production (i.e., raw materials, labor, and energy) on its
own production process and usage experience. For the two exceptions,
the petitioner made adjustments based on its knowledge of differences
in the manufacturing processes in the PRC and estimated the raw
material consumption and the amount of by-product based upon its
knowledge of the production process of the other U.S. producer. Profit,
SG&A, and factory overhead were based on rates calculated from a
financial statement that included the chemical sector in India,
published in the Reserve Bank of India Bulletin (September 1994).
The petitioner valued these factors, where possible, on publicly
available published information from the surrogate country it selected.
India was selected for the surrogate country because it is the only
non-industrialized country listed in the Directory of World Chemical
Producers (1995/1996 Standard Edition) that the petitioner knows is
producing the merchandise subject to investigation. Further, India's
gross domestic product is comparable to the PRC's.
Indian packing costs are not included in the valuation of the
factors of production because the petitioner was unable to obtain the
necessary information. Factory overhead, SG&A, and profit are based on
the financial statement for Indian chemical producers, as published in
the September 1994 Reserve Bank of India Bulletin.
Based on a comparison of the export price to the factors of
production, the calculated dumping margins range from 139.82 to 183.72
percent.
Taiwan
Export price was based on the average c.i.f. unit value of U.S.
imports from Taiwan during October 1994. The petitioner made
adjustments for foreign inland and ocean freight expenses.
The home market price was based on a domestic invoice from a
Taiwanese producer to a home market customer in October 1994. The
petitioner adjusted this price for home market inland freight.
The petitioner based the normal value on CV because it asserts that
the Taiwanese home market price provided in the petition represented
sales that were made below the COP and, therefore, was not an
appropriate basis for calculating normal value.
The components of COP are COM and SG&A. The petitioner calculated
the COM on the basis of its own cost and production experience and
published prices in trade publications for certain chemical inputs,
adjusted for known cost differences in Taiwan. For SG&A, including
financial expenses, the petitioner relied upon the financial statements
of the Taiwanese producer of polyvinyl alcohol. This producer
manufactures and sells products in multiple industries. Since the
petitioner had submitted financial data for a Taiwanese chemical
producer whose manufacturing activities are limited to the chemical
sector, we recomputed SG&A using this data.
The allegation that the Taiwanese producer is selling the foreign
like product in its home market at prices below its COP is based upon a
comparison of the adjusted home market price with the calculated COP.
Based on this information, we find reasonable grounds to believe or
suspect that sales of the foreign like product were made at prices
below COP in accordance with section 773(b)(2)(A)(i) of the Act.
Accordingly, the Department will initiate a cost investigation with
respect to Taiwan.
Therefore, for the purposes of this initiation, we are accepting
the petitioner's estimate of CV, as adjusted by the Department, as the
appropriate basis for Taiwanese normal value. The petitioner based CV
on its COP methodology, described above, adding an amount for profit
and packing to arrive at a total CV. The Department made the same
adjustment to the petitioner's Taiwanese SG&A estimate as in the COP
calculation. The petitioner calculated profit on the basis of financial
data for three Taiwanese chemical producers, however only one of these
chemical producers manufactured and sold solely chemical products.
Therefore, the Department recomputed profit on the basis of the
financial data for the one company whose operations were limited to
chemicals. This treatment of profit is consistent with the URAA
amendments. Packing costs were based on the petitioner's experience.
For Taiwan, based on comparisons of export prices to CV, the
recalculated dumping margins are in a range from 82.23 to 91.83
percent.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of polyvinyl alcohol from Japan, Korea, the PRC,
and Taiwan are being, or likely to be, sold at less than fair value. If
it becomes necessary at a later date to consider the petition as a
source of facts available, we may review the calculations.
Initiation of Investigations
We have examined the petition on polyvinyl alcohol and have found
that it meets the requirements of section 732 of the Act, including the
requirements concerning the material injury or threat of material
injury to the domestic producers of a domestic like product by reason
of the complained-of imports, allegedly sold at less than fair value.
Therefore, we are initiating antidumping duty investigations to
determine whether imports of polyvinyl alcohol from the PRC, Japan,
Korea, and Taiwan are being, or are likely to be, sold in the United
States at less than fair value. Unless extended, we will make our
preliminary determinations by August 16, 1995.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, copies of the
public version of the petition have been provided to the
representatives of the PRC, Japan, Korea, and Taiwan. We will attempt
to provide copies of the public version of the petition to all the
exporters named in the petition.
ITC Notification
We have notified the International Trade Commission (ITC) of our
[[Page 17056]] initiations, as required by section 732(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine by April 24, 1995, whether there is a
reasonable indication that imports of polyvinyl alcohol from Japan,
Korea, the PRC, and Taiwan are causing material injury, or threaten to
cause material injury to a U.S. industry. A negative ITC determination
will result in the investigations being terminated; otherwise, these
investigations will proceed according to statutory and regulatory time
limits.
This notice is published pursuant to section 732(c)(2) of the Act.
Dated: March 29, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-8193 Filed 4-3-95; 8:45 am]
BILLING CODE 3510-DS-P