[Federal Register Volume 63, Number 155 (Wednesday, August 12, 1998)]
[Notices]
[Pages 43192-43193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21618]


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INTERNATIONAL TRADE COMMISSION

Electrolytic Manganese Dioxide From Greece and Japan


Dismissal of Request for Institution of a Section 751(b) Review 
Investigation

AGENCY: United States International Trade Commission (Commission).

ACTION: Dismissal of a request to institute a section 751(b) 
investigation concerning the Commission's affirmative determinations in 
investigations Nos. 731-TA-406 and 408 (Final): Electrolytic Manganese 
Dioxide from Greece and Japan.\1\
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    \1\ The request concerned only imports from Greece. However, as 
the alleged changed circumstances predominantly related to the 
domestic industry, the Commission also solicited comments on the 
possibility to self-initiating a review of the outstanding order on 
imports from Japan.
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SUMMARY: The Commission determines, pursuant to section 751(b) of the 
Tariff Act of 1930 (the Act) \2\ and Commission rule 207.45,\3\ that 
the subject request does not show changed circumstances sufficient to 
warrant institution of an investigation to review the Commission's 
affirmative determinations in investigations Nos. 731-TA-406 and 408 
(Final): Electrolytic Manganese Dioxide from Greece and Japan. EMD is 
provided for in subheading 2820.10.00 of the Harmonized Tariff Schedule 
of the United States.

    \2\ 19 U.S.C. Sec. 1675(b).
    \3\ 19 CFR 207.45.
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FOR FURTHER INFORMATION CONTACT: Fred Fischer (202-205-3179) or Vera 
Libeau (202-205-3176), Office of Investigations, U.S. International 
Trade Commission, 500 E Street SW, 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 at http://www.usitc.gov.

Background Information

    On May 26, 1998, the Commission received a request to review its 
affirmative determination, as it applied to imports from Greece (the 
request), in light of changed circumstances, pursuant to section 751(b) 
of the Act.\4\ The request was filed by counsel on behalf of Eveready 
Battery Company (Eveready), St. Louis, MO. Eveready is one of three 
U.S. producers of EMD. The company is a captive producer of EMD and a 
purchaser of EMD from other U.S. and foreign manufacturers. EMD is a 
major ingredient in the manufacture of dry cell batteries used in 
portable electronic devices.
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    \4\ 19 U.S.C. Sec. 1675(b).
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    Pursuant to section 207.45(b) of the Commission's Rules of Practice 
and Procedure,\5\ the Commission published a notice in the Federal 
Register on June 3, 1998,\6\ requesting comments as to whether the 
alleged changed circumstances warranted the institution of review 
investigations. The Commission received comments in support of the 
request from Eveready (the requester) and Tosoh Hellas, A.I.C., a Greek 
producers of EMD.\7\ Comments

[[Page 43193]]

in opposition to the request were received from Chemetals, Inc. and 
Kerr-McGee Chemical (Kerr-McGee), LLC, U.S. producers of EMD.
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    \5\ 19 CFR 207.45(b).
    \6\ 63 FR 30254.
    \7\ Both Eveready and Tosoh Hellas, while supporting the 
initiation of a section 751(b) review investigation with respect to 
Greece, oppose the Commission self-initiating such a review 
investigation concerning Japan.
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Analysis:

    In considering whether to institute a review investigation under 
section 751(b), the Commission will not institute such an investigation 
unless it is persuaded there is sufficient information demonstrating:
    (1) That there are significant changed circumstances from those in 
existence at the time of the original investigations;
    (2) That those changed circumstances are not the natural and direct 
result of the imposition of the antidumping and/or countervailing duty 
orders, and;
    (3) That the changed circumstances, allegedly indicating that 
revocation of the order would not be likely to lead to continuation or 
recurrence of material injury to the domestic industry, warrant a full 
investigation.\8\
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    \8\ See, 19 U.S.C. Sec. 1675(b)(2)(A); Heavy Forged Handtools 
from the People's Republic of China, 62 FR 36305 (July 7, 1997); 
Certain Cold-Rolled Carbon Steel Flat Products from Germany and the 
Netherlands, 61 FR 17319 (April 19, 1996); A. Hirsh, Inc. v. United 
States, 737 F.Supp. 1186 (CIT 1990: Avesta A v. United States, 724 
F. Supp. 974 (CIT 1988), aff'd 914 F.2d 232 (Fed. Cir. 1990); and 
Avesta AB v. United States, 689 F. Supp. 1173 (CIT 1988).
    In the Uruguay Round Agreements Act of 1994 (the URAA), Congress 
changed the substantive standard applicable to changed circumstances 
reviews from whether the domestic industry would be materially 
injured or threatened with material injury if the order were revoked 
to whether revocation of the order is likely to lead to the 
continuation or recurrence of material injury to the domestic 
industry.
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    After consideration of the request for review and the response to 
the notice inviting comments, the Commission has determined, pursuant 
to section 751(b) of the Act and Commission rule 207.45, that the 
information of record, including the request and the comments received 
in response to the notice, does not show changed circumstances 
sufficient to warrant institution of investigations to review the 
Commission's affirmative determinations in investigations Nos. 731-TA-
406 and 408 (Final): Electrolytic Manganese Dioxide from Greece and 
Japan.
    The request alleged the following changed circumstances: (1) the 
addition of a third recognized type of EMD (high-drain alkaline EMD), 
(2) structural changes in battery consumption, and (3) the impending 
unavailability of supply of regular and high-drain alkaline EMD from 
U.S. producers and producers in countries not subject to antidumping 
orders. The information available on the record does not persuade us 
that a full investigation is warranted for any of these allegations. In 
particular:
    Addition of a third recognized type of EMD. The requester asserts 
that there is a recognized new type of EMD high-drain alkaline EMD that 
has been introduced to the market since the Commission's original 
investigations. While Eveready provided evidence concerning the 
existence of new high-drain batteries,\9\ Eveready failed to provide 
specific evidence supporting its claim of a separate and new product 
such as chemical specifications, certifications, contracts, pricing, or 
other information about its own efforts to develop such a new product 
either internally or with suppliers. Moreover, Chemetals and Kerr-
McGee, through sworn affidavits, directly refuted the commercial use of 
such a new product.
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    \9\ Based on the record, it apears that gains in performance 
exhibited by new high-drain batteries are the result of improvements 
in battery design and not the result of a new type of high-drain 
EMD. The record reflects that EMD currently employed in high-drain 
applications is in fact high quality standard alkaline EMD.
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    Structural changes in battery consumption.--The requester asserts 
that there has been a fundamental and permanent shift in battery 
consumption toward smaller AA and AAA cell batteries with a 
corresponding increase in demand for standard and ``high-drain'' 
alkaline EMD. The record indicates a continuing shift in battery 
consumption from larger C and D cells (predominantly used in lighting 
applications) to smaller AA and AAA (predominantly used in higher-drain 
portable electronic devices). While evidence of a shift in the 
composition of demand can be a factor supporting institution of a 
changed circumstances review, the Commission finds that institution is 
not warranted in this case. Although the record evidence indicates that 
there has been a shift in the composition of demand, there is no record 
evidence that this shift has resulted in a shift to a new, high-drain 
EMD, as alleged by Eveready. Indeed, since Eveready failed to provide 
specific evidence of a new high-drain EMD, the underlying basis for 
Eveready's assertion does not exist.
    Impending ``short-supply'' of regular and high-drain alkaline 
EMD.--The requester asserts that the U.S. industry is operating at full 
capacity and that the industry faces unsurmountable barriers to 
expansion that will prohibit it from meeting anticipated future demand 
for EMD. Additionally, the requester asserts that EMD from all non-
subject foreign sources has already been allocated to other purchasers 
and that Everyeady's only available source of ``high-drain'' EMD is 
from Greece. Despite the requester's anecdotal claims, it failed to 
provide specific evidence regarding the U.S. industry's capacity 
limitations, Eveready's own production limitations, Eveready's attempts 
to work with other U.S. producers, or its efforts to qualify or procure 
EMD from non-subject and subject sources including Greece. Both 
Chemetals and Kerr-McGee provided substantial evidence to contradict 
Eveready's claims, most telling being an analysis of prices. It appears 
that alkaline EMD prices have remained relatively stable in recent 
years and do not reflect the severe supply limitations that are alleged 
to be present in the market. Moreover, Chemetals and Kerr-McGee have 
indicated their willingness and ability to increase supplies of 
qualified EMD to Eveready through the negotiation and signing of long-
term supply contracts.
    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. 731-TA-406 and 408 (Final): Electrolytic Manganese 
Dioxide from Greece and Japan, is not warranted.

    Issued: August 6, 1998.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 98-21618 Filed 8-11-98; 8:45 am]
BILLING CODE 7020-02-P