[Federal Register Volume 61, Number 77 (Friday, April 19, 1996)]
[Notices]
[Pages 17319-17321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9730]
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UNITED STATES INTERNATIONAL TRADE COMMISSION
Certain Cold-Rolled Carbon Steel Flat Products From Germany and
the Netherlands; Dismissal of Request for Institution of Section 751(b)
Review Investigations
AGENCY: United States International Trade Commission.
ACTION: Dismissal of a request to institute section 751(b)
investigations concerning the Commission's affirmative determinations
in Invs. Nos. 701-TA-340, 731-TA-604, & 731-TA-608 (Final), Certain
Cold-Rolled Carbon Steel Flat Products from Germany and the
Netherlands.
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SUMMARY: The Commission determines, pursuant to section 751(b) of the
Tariff Act of 1930 (the Act)(19 U.S.C. 1675(b)) and Commission rule
207.45 (19 CFR 207.45), that the subject request does not show changed
circumstances sufficient to warrant institution of an
[[Page 17320]]
investigation to review the Commission's affirmative determinations in
Investigations Nos. 701-TA-340, 731-TA-604, & 731-TA-608 (Final),
regarding certain cold-rolled carbon steel flat products (cold-rolled
steel) from Germany and the Netherlands. Cold-rolled steel is provided
for in subheadings 7209.15.00, 7209.16.00, 7209.17.00, 7209.18.15,
7209.18.25, 7209.18.60, 7209.25.00, 7209.26.00, 7209.27.00, 7209.28.00,
7209.90.00, 7210.70.30, 7210.90.90, 7211.23.15, 7211.23.20, 7211.23.30,
7211.23.45, 7211.23.60, 7211.29.20, 7211.29.45, 7211.29.60, 7211.90.00,
7212.40.10, 7212.40.50, 7212.50.00, 7217.10.10, 7217.10.20, 7217.10.30,
7217.10.70, 7217.90.10, and 7218.90.50 of the Harmonized Tariff
Schedule of the United States.
FOR FURTHER INFORMATION CONTACT: Jonathan Seiger (202-205-3183) or Vera
Libeau (202-205-3176), Office of Investigations, U.S. International
Trade Commission, 500 E Street S.W., Washington, DC 20436. Hearing-
impaired persons can obtain information on this matter by contacting
the Commission's TDD terminal on 202-205-1810. Persons with mobility
impairments who will need special assistance in gaining access to the
Commission should contact the Office of the Secretary at 202-205-2000.
General information concerning the Commission may also be obtained by
accessing its internet server (http://www.usitc.gov or ftp://
ftp.usitc.gov).
BACKGROUND INFORMATION: On November 28, 1995, the Commission received a
request to review its affirmative threat determinations with respect to
Germany and the Netherlands in the light of changed circumstances (the
request), pursuant to section 751(b) of the Act (19 U.S.C. 1675(b)).
The request was filed by counsel on behalf of Krupp Hoesch Stahl AG,
Preussag Stahl AG, Thyssen Stahl AG, and Hoogovens Groep BV, producers
of the subject merchandise in Germany and the Netherlands, and N.V.W.
(USA), Inc., an importer of the subject merchandise from the
Netherlands.
Pursuant to section 207.45(b)(2) of the Commission's Rules of
Practice and Procedure (19 CFR 207.45(b)(2)), the Commission published
a notice in the Federal Register on January 25, 1996 (61 F.R. 2263)
requesting comments as to whether the alleged changed circumstances
warranted the institution of a review investigation. The Commission
received comments both in opposition to and in support of the request.
ANALYSIS: After consideration of the request for review and the
responses to the notice inviting comments, the Commission has
determined, pursuant to section 751(b) of the Act (19 U.S.C. 1675(b))
and Commission rule 207.45 (19 CFR 207.45), that the information of
record, including the petitioner's request, does not show changed
circumstances sufficient to warrant institution of an investigation to
review the Commission's affirmative determinations in Investigations
Nos. 701-TA-340, 731-TA-604, & 731-TA-608 (Final).
As a preliminary matter, the request alleges that the Uruguay Round
Agreements Act of 1994 (the URAA) created a lower standard for
institution of review investigations under section 751(b); i.e., that
the Commission should question actively the continued need for the
orders, rather than place the burden of proof on the party seeking
revocation. The request claims, for example, that the fact that
Congress provided for sunset reviews under 751(c) indicates that
Congress intended a lower standard. Contrary to the request, the
Commission does not find that the standard for institution of a 751(b)
review investigation has changed following the passage of the URAA.
First, the URAA did not amend the statutory language governing the
institution of a changed circumstances review. Second, the Statement of
Administrative Action provides no discussion of the standard for
instituting a review, stating only that the ``new substantive
standard'' for judging the merits of a changed circumstances review is
``consistent with current Commission practice.'' SAA at 878. Third, the
Commission finds no legal basis for concluding that the URAA provisions
on sunset reviews were intended to effect any change in the standard
for institution of a 751(b) review.
The Commission also notes that its reviewing courts have observed
that ``a review investigation of an outstanding antidumping order does
not begin on a clean slate just as though it were an original
investigation.'' See Matsushita Elec. Indus. Co. v. United States, 750
F.2d 927, 932 (Fed. Cir. 1984). Congress set forth ``very strict
controls'' on the exercise of the Commission's authority to conduct an
investigation to determine whether to revoke or modify an outstanding
dumping order, demonstrating that it did not want prior Commission
injury determinations ``to remain in a state of flux.'' ``Royal
Business Machines, Inc. v. United States, 507 F. Supp. 1007, 1014, n.
18 (Ct. Int'l Trade 1980), aff'd, 659 F.2d 692 (CCPA 1982). The
statutory requirements for instituting Section 751 reviews clearly
demonstrate the intent of Congress that the ``underlying finding of
injury. . . . . is entitled to deference and should not be disturbed
lightly.'' Avesta AB v. United States, 689 F. Supp. 1173, 1180 (Ct.
Int'l Trade 1988)(Avesta I); see also Matsushita Elec. Indus. Co., Ltd.
v. United States, 750 F.2d 927, 932 (Fed. Cir. 1984). In order for a
review investigation to be instituted, the information available to the
Commission, after notice and comment from all interested parties, must
be sufficient to persuade the Commission:
(1) That there have been significant changed circumstances from
those in existence at the time of the original investigation;
(2) That those changed circumstances are not the natural and
direct result of the imposition of the antidumping or countervailing
duty order, and
(3) That the changed circumstances indicate that the domestic
industry would be materially injured should the order be revoked,
thereby warranting a full investigation.
See A. Hirsh, Inc. v. United States, 737 F. Supp. 1186 (CIT 1990)
(Hirsh II); Avesta AB v. United States, 724 F. Supp. 974 (CIT 1989),
aff'd 914 F.2d 232 (Fed. Cir. 1990), cert. denied, 111 S. Ct. 1308
(1991) (Avesta II).
The request alleged five changed circumstances warranting review:
(1) Restructuring of the European steel industry, together with other
changes in global market conditions; (2) surges in non-subject imports
of cold-rolled steel; (3) the sharp decline of the U.S. dollar against
both the Dutch guilder and the German mark; (4) the sharp and
unanticipated growth in U.S. production of corrosion-resistant steel
subsequent to the imposition of antidumping and countervailing duty
orders on corrosion-resistant steel, and; (5) the fact that the orders
on Germany and the Netherlands resulted from affirmative threat
determinations of three Commissioners who cumulated imports from the
Netherlands, Germany, and Korea with far greater volumes from other
countries. The information available on the record does not persuade us
that a full investigation is warranted for any of the five allegations.
First, the requesting parties argue that changes in the European
steel industry, along with other changes in the world market for steel,
make it unlikely that the U.S. industry will suffer material injury if
the orders are revoked. They point to decreased excess capacity in
Europe, to increases in captive consumption of cold-rolled steel by
[[Page 17321]]
European steel producers, and to privatization of European steel
companies as contributing to a tighter supply situation for cold-rolled
steel. Notwithstanding these developments, however, there is evidence
of an oversupply of steel and falling steel prices in Europe. Further,
the petition does not provide any basis for its claim that
privatization has led to tighter steel supplies in general. Nor does
the request show a sufficient correlation between increases in captive
production of cold-rolled steel in Germany and the Netherlands and
decreases in exports to the United States.
Second, the requesting parties contend that imports from Germany
and the Netherlands have fallen off and that non-subject imports,
particularly from Eastern Europe, have taken their place. The request
cites Birch Three-Ply Door Skins from Japan as constituting a similar
set of facts that formed the basis for a changed circumstances review.
Replacement of subject imports by non-subject imports, alone, does not,
however, necessarily constitute changed circumstances. The changes in
volumes of subject versus non-subject imports at issue here are likely
attributable to the effects of the orders. More importantly, there is
no evidence that U.S. market share held by the subject imports since
the imposition of the order has changed significantly. Finally, there
is no evidence indicating that there is a decline in the capacity of
the domestic industry rendering it unable to supply the market demand
previously supplied by the subject imports. Compare Birch Three-Ply
Door Skins from Japan, Inv. No. 751-TA-6 (Review), USITC Pub. 1271
(July 1982) ( Facilities of domestic producer who accounted for
majority of domestic production were sold and devoted to production of
other products, while other domestic producers had ceased operations,
such that market share held by subject imports shifted to non-subject
imports, rather than domestic industry).
Third, the request alleges that since the date of the orders, the
U.S. dollar has weakened against the German mark and Dutch guilder, and
that accordingly imports from those sources are now less price-
competitive and less likely to cause injury. The requesting parties
contend that this realignment in exchange rates has led to increased
domestic shipments of U.S. steel, and that this trend is likely to
increase. Recent history shows, however, that exchange rates between
the Netherlands, or Germany, and the United States have fluctuated
within a fairly narrow band. Finally, since the request was filed, the
U.S. dollar has actually strengthened against the two currencies.
Next, the request claims that as a result of existing AD/CVD orders
on corrosion-resistant steel, U.S. demand for cold-rolled steel for use
in the production of corrosion-resistant steel has greatly increased,
making the industry less vulnerable to imports. This is, however, not a
changed circumstance in terms of being a change in the conditions of
competition. Moreover, the fact that there is a large captive component
to cold-rolled steel production is not a new development. Further, the
Commission does not consider the increase in captive consumption of
U.S. cold-rolled steel for corrosion-resistant production reported in
the request to be of sufficient magnitude to constitute a changed
circumstance in the context of this industry. In addition, there is
some evidence that the increase in corrosion-resistant steel production
has peaked.
The request further asserts that because of the way the Commission
voted on the investigations concerning the Netherlands and Germany
(with different Commissioners cumulating different combinations of
imports), there are now fewer imports at issue than there were at the
time of the original investigation, and that such instances have, in
the past, warranted institution of 751(b) review investigations. Those
cases, however, are distinguishable, as they involved subsequent
partial revocations or changed (narrowed) scope determinations by
Commerce. See, e.g., Potassium Chloride from Canada, 751-TA-3;
Stainless Steel Plate from Sweden, 751-TA-15. In this case, however,
all of the facts and circumstances upon which the requesting parties
base their claim were known to the Commission at the time of its vote
in the original investigations. There is nothing anomalous about
imposing an order on imports from countries as to which three or four
Commissioners made affirmative determinations. Rather, that is a
function of the cumulation and threat provisions of the statute.
In sum, the changed circumstances alleged in the request do not
warrant institution of a review. Evidence contained in the request and
in responses opposing the request shows either that the alleged changes
have not, in fact, had a significant impact on the conditions of
competition in this industry or on subject imports, or that the changes
have reversed themselves.
In light of the above analysis, the Commission determines that
institution of a review investigation under section 751(b) of the Act
concerning the Commission's affirmative determinations in
Investigations Nos. 701-TA-340, 731-TA-604, & 731-TA-608 (Final),
regarding cold-rolled steel from Germany and the Netherlands, is not
warranted.
By order of the Commission.
Issued: April 16, 1996.
Donna R. Koehnke,
Secretary.
[FR Doc. 96-9730 Filed 4-18-96; 8:45 am]
BILLING CODE 7020-02-P