[Federal Register Volume 60, Number 82 (Friday, April 28, 1995)]
[Notices]
[Pages 20963-20964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10524]
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DEPARTMENT OF COMMERCE
[A-201-819]
Initiation of Antidumping Duty Investigation: Light-Walled
Rectangular Pipe and Tube From Mexico
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: April 28, 1995.
FOR FURTHER INFORMATION CONTACT: Dorothy Tomaszewski or Erik Warga at
(202) 482-0631 or (202) 482-0922, Office of Antidumping Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue NW.,
Washington, D.C. 20230.
INITIATION OF INVESTIGATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of 1930
(``the Act'') are references to the provisions effective January 1,
1995, the effective date of the amendments made to the Statute by the
Uruguay Round Agreements Act (URAA).
The Petition
On March 31, 1995, the Department of Commerce (the Department)
received a petition filed in proper form by Southwestern Pipe, Inc.
(the petitioner), one of two regional producers of light-walled
rectangular (``LWR'') pipe and tube in Texas. A supplement to the
petition was filed on April 13, 1995.
In accordance with section 732(b) of the Act, the petitioner
alleges that imports of LWR pipe and tube from Mexico are being, or are
likely to be, sold in the United States in the region of Texas 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, the regional industry in Texas.
Since petitioner is an interested party as defined under section
771(9)(C) of the Act, petitioner has standing to file a petition for
the imposition of antidumping duties.
On April 17, 1995, a Mexican producer of subject merchandise named
in the petition, Hylsa S.A. de C.V. (``HYLSA''), submitted a request
that the Department poll all domestic producers of subject merchandise
in the United States. According to HYLSA, the relevant industry for
purposes of determining petitioner's standing should be defined as the
national industry producing the subject merchandise (see following
Section for details on this issue).
Determination of Industry Support for the Petition
The petition contains an adequate allegation that Texas is a
regional industry for the domestic like product; this allegation
includes data on both factors required by section 771(4)(C) of the Act.
Under section 732(c)(4)(C), if the petitioner properly alleges that the
industry is a regional industry, the Department shall determine whether
the petition has been filed by or on behalf of the industry by applying
the requirements set forth in the Act on the basis of the production in
the region. Therefore, the Department has evaluated industry support
for the petition based upon production in the region.
Section 732(c)(4)(A) of the Act requires that the Department's
industry support determination, which is to be made before the
initiation of the investigation, be based on whether a minimum
percentage of the relevant industry supports the petition. A petition
meets the 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 two known regional producers of the domestic
like product, accounts for more than 50 percent of the total production
of the domestic like product in the region as defined in the petition.
The other known producer in the region has informed the Department that
it supports this antidumping petition. Accordingly, the Department
determines that this petition is supported by the regional industry in
Texas.
Scope of the Investigation
The merchandise subject to this investigation is certain light-
walled welded non-alloy steel pipes and tubes, of rectangular
(including square) cross section, having a wall thickness of less than
4mm (``LWR''), regardless of specification (ASTM, proprietary, or
other). These LWR pipes and tubes are supplied with rectangular cross
sections ranging from 0.375 x 0.625 inch to 2 x 6 inches or with square
sections ranging from 0.375 to 4 inches.
The LWR pipe and tube that are the subject of this petition are
currently classifiable in the Harmonized Tariff Schedule of the United
States (HTSUS) heading 7306.60.50.00. Although the HTSUS subheading is
provided for convenience and customs purposes, our written description
of the scope of this investigation is dispositive.
Export Price and Normal Value
Export price was based on fourth quarter 1994 (1) average c.i.f.
unit value of U.S. imports from Mexico, and (2) prices from a
salesman's call sheets recording sales lost to Mexican competitors. The
unit values based on U.S. imports from Mexico were reduced for foreign
inland freight to derive ex-factory prices. The prices based on
``lost'' sales were reduced for the following costs: exporter's mark-up
costs, broker commissions, U.S. import [[Page 20964]] duties, foreign
inland freight and U.S. freight.
The home market price was based on tax-inclusive price quotations
from Mexican producers to a home market customer in December 1994. The
petitioner adjusted the FOB warehouse prices for Mexico's value added
tax.
The petitioner based the normal value on constructed value (``CV'')
in accordance with section 773(a)(4) because it asserts that the
Mexican 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 components of COP are cost of manufacture (``COM'') and
selling, general and administrative expenses (``SG&A''). The petitioner
calculated COM based on its own production experience, adjusted for
known differences between costs incurred to produce LWR pipe and tube
in the United States and production costs incurred for the merchandise
in Mexico. To calculate SG&A expenses, including interest expense, the
petitioner relied on data from the 1993 financial statement of a
Mexican pipe and tube producer not named as a respondent in the
petition. Petitioner maintained in its allegation that Mexican
producers named as respondents in the petition did not publish
financial statements and that the financial statements used to
calculate SG&A expense provided the only available data for this
expense.
The allegation that the Mexican producers are selling the foreign
like product in their home market at prices below 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 of production
investigation.
Therefore, for the purposes of this initiation, we are accepting
the petitioner's estimate of CV, as adjusted by the Department for
profit, as the appropriate basis for Mexican normal value. The
petitioner based CV on its COP methodology, described above, adding an
amount for profit to arrive at a total CV. Rather than use the Mexican
pipe and tube producer's 1993 financial statements to compute profit,
the petitioner calculated profit on the basis of public financial data
for a Mexican steel producer. It did so because the Mexican pipe
producer had incurred a loss in that year. Consistent with section
773(e) of the Act, the Department revised the profit figure included in
the CV to be zero, the actual profit for the one Mexican company whose
operations were limited to the production of the foreign-like product.
Based on comparisons of export prices to CV, the recalculated
dumping margins range from 14.08 to 23.38 percent.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of LWR pipe and tube from Mexico 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
under section 776 of the Act, we may further review the calculations.
Initiation of Investigation
We have examined the petition on LWR pipe and tube and have found
that it meets the requirements of section 732 of the Act, including the
requirements concerning allegations of material injury or threat of
material injury to a regional industry in a domestic-like product by
reason of the complained-of imports, allegedly sold at less than fair
value. Therefore, we are initiating an antidumping duty investigation
to determine whether imports of LWR pipe and tube from Mexico are
being, or are likely to be, sold at less than fair value on a regional
basis. Unless extended, we will make our preliminary determination by
September 7, 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 government of Mexico. 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
initiation, as required by section 732(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine by May 15, 1995, whether there is a
reasonable indication that imports of LWR pipe and tube from Mexico are
causing material injury, or threaten to cause material injury to the
regional 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 published pursuant to section 732(c)(2) of the Act.
Dated: April 20, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-10524 Filed 4-27-95; 8:45 am]
BILLING CODE 3510-DS-M