[Federal Register Volume 60, Number 110 (Thursday, June 8, 1995)]
[Notices]
[Pages 30268-30270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13982]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-475-818, A-489-805]
Initiation of Antidumping Duty Investigations: Certain Pasta From
Italy and Turkey
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
EFFECTIVE DATE: June 8, 1995.
FOR FURTHER INFORMATION CONTACT: John Brinkmann at (202) 482-5288, or
Greg Thompson at (202) 482-3003, Office of Antidumping Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue NW.,
Washington, DC 20230.
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 May 12, 1995, the Department of Commerce (the Department)
received a petition filed in proper form by Borden, Inc., Hershey Foods
Corp., and Gooch Foods, Inc. (the petitioners), three U.S. producers of
certain pasta. Supplements to the petition were filed on May 26 and
June 1, 1995.
In accordance with section 732(b) of the Act, the petitioners
allege that imports of certain pasta from Italy and Turkey 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 petitioners state that they have standing to file the petition
because they are interested parties, as defined under section 771(9)(C)
of the Act.
Determination of Industry Support for the Petition
Section 732(c)(4)(A) of the Act requires the Department to
determine, prior to the initiation of an investigation, the domestic
industry supports an antidumping petition. A petition meets this
requirement 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 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.
A review of the industry support data provided in the petition and
other production information readily available to the Department
indicates that the petitioners account 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. The Department received no expressions of
opposition to the petition from any interested party. Accordingly, the
Department determines that this petition is supported by the domestic
industry.
Scope of the Investigations
The Department has inherent authority to redefine and clarify the
scope of an investigation, as set forth in a petition, whenever it
determines that the petition language is overly broad, or
insufficiently specific to allow proper investigation, or is in any
other way defective. See NTN Bearing Corp. v. United States, 747 F.
Supp. 726 (CIT 1990). We revised the petitioners' proposed scope to
eliminate channel of trade as a scope criterion in order to ensure that
it would be clear and administrable.
The scope of these investigations consists of certain non-egg dry
pasta in packages of five pounds (or 2.27 kilograms) or less, whether
or not enriched or fortified or containing milk or other optional
ingredients such as chopped vegetables, vegetable purees, milk, gluten,
diastases, vitamins, coloring and flavorings, and up to two percent egg
white. The pasta covered by this scope is typically sold in the retail
market, in fiberboard or cardboard cartons or polyethylene or
polypropylene bags, of varying dimensions.
Excluded from the scope of these investigations are refrigerated,
frozen, or canned pastas, as well as all forms of egg pasta, with the
exception of non-egg dry pasta containing up to two percent egg white.
The merchandise under investigation is currently classifiable under
items 1902.19.20 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope of this
investigation is dispositive.
Italy
Export Price and Normal Value
The petitioners based export price on two sources. First, the
petitioners based export price on the average unit values (AUVs)
derived from the IM-146 monthly import statistics for HTSUS subheading
1902.19.20, published by the U.S. Department of Commerce, for the
months of December 1994 and January and February 1995. These AUVs
corresponded to the months the available home market price lists were
in effect. The AUVs, which represent the f.o.b. Italy price of the
subject pasta, were not adjusted for foreign inland freight. We find
the AUVs a reasonable basis for export price because 1) the HTSUS
subheading is inclusive of all sales of the subject merchandise, 2)
there were limited imports of non-subject pasta under this subheading,
and 3) a market research report submitted by the petitioners shows the
AUVs to be consistent with the average export values of non-egg pasta
from Italy to the U.S. [[Page 30269]]
The second methodology used by the petitioners was based on U.S.
retail prices obtained from 1) the domestic industry's weekly sales
reports compiled by the petitioners' own sales representative for
November and December of 1994, and 2) InfoScan Markets, which reports
published weekly prices charged by U.S. retailers for pasta for the
month of January 1995. The prices used were for brand name products of
two Italian producers, and were adjusted downward for U.S. ocean
freight and other movement charges.
The petitioners used Italian producer price lists to wholesale
customers obtained from a market research report as the basis for
normal value. For comparisons to the three U.S. retail prices, the
petitioners selected a single ``regular or regular cut'' pasta price
from the appropriate producer's price list. For comparisons to the U.S.
AUVs, the petitioners selected a single price from a producers' price
list. Because the prices were reported in Italian lire per kilogram
(kg), the petitioners calculated the lire per pound (lb) equivalent for
each product listed and then converted to U.S. dollars per pound using
the average exchange rate for the two month period that is used to
calculate the U.S. prices. The petitioners deducted a nine percent
quantity discount and 7.5 percent ``other discount'' based on the
Italian market research report. Finally, the petitioners made an
adjustment to normal value for U.S. and Italian imputed credit
expenses.
We find the petitioners' selection of home market prices not to be
representative comparisons to the U.S. export price to which they are
being compared. In the case of the AUVs, the petitioners have selected
a single price of a specific pasta type to compare to an export price
which is an average of all imports of the subject pasta from Italy. For
purposes of this initiation, we have revised the normal value to a
simple average of all of the subject pasta prices that are listed in
the producer's price list used by the petitioners in their fair value
comparisons. In the case of the export prices based on the three retail
prices described as ``regular or regular cuts,'' we have revised the
normal value to be a simple average of the subject pasta prices that
are listed in producer's price list used by the petitioners that are
described in that price list as ``regular'' pasta.
Based on comparisons of export price to normal value, the estimated
dumping margins for certain pasta from Italy range from 21.85 percent
to 71.49 percent.
Turkey
Export Price and Normal Value
The petitioners based export price on the AUVs derived from the IM-
146 monthly import statistics for HTSUS subheading 1902.19.20,
published by the U.S. Department of Commerce for the months of January
and February, 1995. Claiming that Turkey's economy is
hyperinflationary, the petitioners used AUVs for the month when the
comparison home market sales occurred as the basis for export price.
Specifically, petitioners state that Turkey experienced an annual
inflation rate of 70 percent during 1994, which rose to approximately
130 percent in early 1995. The AUVs were not adjusted for foreign
inland freight. We find the AUVs a reasonable basis for export price
for the same reasons stated above for Italy.
The petitioners based normal value on January and February 1995
prices between a Turkish producer and its wholesaler which were
obtained by a market researcher. The gross home market prices were
adjusted downward for the following costs: value added taxes, quantity
discounts, special annual rebate, and average delivery costs. The
petitioners converted the unit price quotes in Turkish lire to U.S.
dollars using the exchange rates that were in effect on or about the
time the home market sales occurred.
In accordance with Section 773(b)(2) of Act, the petitioners
alleged that sales of certain pasta in the home market were made at
prices below the cost of production (COP). The components of COP, as
enumerated in Section 773(b)(3) of the Act, are the cost of manufacture
(COM), packing and selling, general, and administrative (SG&A)
expenses. SG&A includes the company's net financing expense.
The petitioners calculated COM based on their own production
experience for January and February 1995, adjusted for known
differences between costs incurred to produce certain pasta in the
United States and production costs incurred for the merchandise in
Turkey. For SG&A expenses, the petitioners used their own 1994 audited
annual financial statements because they could not obtain financial
statements for a Turkish pasta or food processing company. The
Department normally uses cost information specific to the home market.
However, the petitioners documented that they attempted to obtain
financial statements through various sources but were unable to gather
financial data on the Turkish pasta or food processing industry.
The allegation that the Turkish producers are selling the foreign
like product in their home market at prices below its COP is based upon
a comparison of the adjusted home market prices with the calculated
COP. Based on this reasonably available information, we find reasonable
grounds to believe or suspect that sales of the foreign like product
may have been made at prices below COP in accordance with section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
cost investigation with respect to Turkey.
The petitioners calculated a constructed value (CV) using the same
COM, packing and SG&A figures used to compute the Turkish home market
costs for pasta. The petitioners also added to CV an amount for profit.
To calculate profit, the petitioners relied on 1993 audited financial
statements reported by a major Italian producer. Although the
petitioners demonstrated significant efforts in attempting to obtain
Turkish specific financial data for the pasta and food processing
industries, we do not consider the profit of an Italian pasta producer
an acceptable alternative. For purposes of this initiation, we have
rejected the estimated margin based on CV, and have instead relied
solely on the comparison of export price to the home market price above
COP.
Based on this comparison of export price to normal value, the
estimated dumping margin for certain pasta from Turkey is 63.29
percent.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of certain pasta from Italy and Turkey 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 certain pasta from Italy and
Turkey 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 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 certain pasta from
Italy and Turkey 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 October 19, 1995. [[Page 30270]]
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, copies of the
public versions of the petition have been provided to the
representatives of the governments of Italy and Turkey. We will attempt
to provide copies of the public versions of the petition to all the
exporters named in the petition.
International Trade Commission (ITC) 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 determine by June 26, 1995, whether there is a
reasonable indication that imports of certain pasta from Italy and
Turkey are causing material injury, or threatening to cause material
injury, to a U.S. industry. A negative ITC determination in either
investigation will result in the respective investigation being
terminated; otherwise, these investigations will proceed according to
statutory and regulatory time limits.
Dated: June 1, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-13982 Filed 6-7-95; 8:45 am]
BILLING CODE 3510-DS-P