[Federal Register Volume 68, Number 136 (Wednesday, July 16, 2003)]
[Notices]
[Pages 42002-42004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18017]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-886, A-557-813, A-549-821]


Initiation of Antidumping Duty Investigations: Polyethylene 
Retail Carrier Bags from The People's Republic of China, Malaysia, and 
Thailand

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: July 16, 2003.

FOR FURTHER INFORMATION CONTACT: Fred W. Aziz, Thomas Schauer, or 
Richard Rimlinger, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-4023, (202) 482-0410 or (202) 482-4477, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On June 20, 2003, the Department of Commerce (``the Department'') 
received a petition on imports of polyethylene retail carrier bags 
(``PRCBs'') from The People's Republic of China (``the PRC''), 
Malaysia, and Thailand, filed in proper form by PCL Packaging, Inc., 
Sonoco Products Company, Superbag Corp., Vanguard Plastics, Inc., and 
Inteplast Group, Ltd. (referred to hereafter as ``the petitioners''). 
On June 25, 2003, the Department requested additional information and 
clarification of certain areas of the petition. The petitioners filed 
supplements to the petition on June 30, 2003 and July 8, 2003.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``the Act''), the petitioners allege that imports of PRCBs 
from the PRC, Malaysia, and Thailand 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 
and threaten to injure an industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(c) of the Act. Furthermore, with respect to 
the antidumping duty investigations the petitioners are requesting the 
Department to initiate, they have demonstrated sufficient industry 
support (see ``Determination of Industry Support for the Petition'' 
below).

Scope of Investigation

    The merchandise subject to this investigation is polyethylene 
retail carrier bags, which also may be referred to as t-shirt sacks, 
merchandise bags, grocery bags, or checkout bags. The subject 
merchandise is defined as non-sealable sacks and bags with handles 
(including drawstrings), without zippers or integral extruded closures, 
with or without gussets, with or without printing, of polyethylene film 
having a thickness no greater than .035 inch (0.889 mm) and no less 
than .00035 inch (0.00889 mm), and with no length or width shorter than 
6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of 
the bag may be shorter than 6 inches but not longer than 40 inches 
(101.6 cm). Polyethylene retail carrier bags are typically provided 
without any consumer packaging and free of charge by retail 
establishments (e.g., grocery, drug, convenience, department, specialty 
retail, and discount stores, and restaurants) to their customers to 
package and carry their purchased products. The scope of the petition 
excludes (1) polyethylene bags that are not printed with logos or store 
names and that are close-able with drawstrings made of polyethylene 
film and (2) polyethylene bags that are packed in consumer packaging 
with printing that refers to specific end uses other than packaging and 
carrying merchandise from retail establishments (e.g., garbage bags, 
lawn bags, trash can liners). Imports of the subject merchandise are 
classified under statistical category 3923.21.0090 of the Harmonized 
Tariff Schedule of the United States. This subheading also covers 
products that are outside the scope of these investigations. 
Furthermore, although the HTSUS subheading is provided for convenience 
and customs purposes, our written description of the scope of these 
investigations is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the regulations (62 FR 27296, 27323), we 
are setting aside a period for interested parties to raise issues 
regarding product coverage. The Department encourages all interested 
parties to submit such comments within 20 calendar days of publication 
of this notice. Comments should be addressed to Import Administration's 
Central Records Unit at Room 1870, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230. The 
period of scope consultations is intended to provide the Department 
with ample opportunity to consider all comments and consult with 
parties prior to the issuance of the preliminary 
determination.Determination of Industry Support for the Petition
    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) at least 
25 percent of the total production of the domestic like product; and 
(2) 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.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether the petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While the Department and the 
ITC must apply the same statutory definition regarding the domestic 
like product (see section 771(10) of the Act), they do so for different 
purposes and pursuant to separate and distinct authority. In addition, 
the Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
domestic like product, such differences do not render the decision of 
either agency contrary to law.\1\
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    \1\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 
2001), citing Algoma Steel Corp. v. United States, 688 F. Supp. 639, 
642-44 (CIT 1988).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.

[[Page 42003]]

    With regard to the definition of domestic like product, the 
petitioner does not offer a definition of domestic like product 
distinct from the scope of the investigation. Based on our analysis of 
the information presented by the petitioners, we have determined that 
there is a single domestic like product, plastic retail carrier bags, 
which is defined in the ``Scope of Investigation'' section above, and 
we have analyzed industry support in terms of the domestic like 
product.
    The petitioners established industry support representing over 50 
percent of total production of the domestic like product. Therefore, 
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 the requirements of section 732(c)(4)(A)(i) are met. 
Furthermore, because the Department received no opposition to the 
petition, 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. Thus, the requirements of section 
732(c)(4)(A)(ii) are also met.
    Accordingly, the Department determines that the petition was filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act. See Industry Support Attachment to the Initiation 
Checklist (``Initiation Checklist''), dated July 10, 2003, on file in 
the Central Records Unit in Room B-099 of the main Department of 
Commerce Building.

Period of Investigation

    The anticipated period of investigation is April 1, 2002, through 
March 31, 2003, for the Malaysia and Thailand investigations and 
October 1, 2002, through March 31, 2003, for the PRC investigation.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations. The sources of data for the deductions 
and adjustments relating to U.S. price and normal value are discussed 
in greater detail in the Initiation Checklist. Should the need arise to 
use any of this information as facts available under section 776 of the 
Act, we may reexamine the information and revise the margin 
calculations, if appropriate.
    The petition identified 37 producers of PRCBs in the PRC (see June 
20, 2003, petition, Exhibit 5), 14 producers in Malaysia (see June 20, 
2003, petition, Exhibit 6), and 16 producers in Thailand (see June 20, 
2003, petition, Exhibit 7).

Export Price and Normal Value - The PRC

    The petitioners based export price on the price of the PRC-
manufactured PRCBs from two Chinese exporters. We have examined the 
information provided regarding export price and have determined that it 
represents information reasonably available to the petitioners and have 
reviewed it for adequacy and accuracy. See Initiation Checklist.
    The petitioners assert that the Department considers the PRC to be 
a non-market-economy (``NME'') country and, therefore, they constructed 
normal value based on the factors-of-production methodology pursuant to 
section 773(c) of the Act. In previous cases, the Department has 
determined that the PRC is an NME country. See e.g., Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products from the People's Republic of 
China (Cold-Rolled Steel from China), 65 FR 34660 (May 31, 2000). In 
accordance with section 771(18)(c)(i) of the Act, the NME status 
remains in effect until revoked by the Department. The NME status of 
the PRC has not been revoked by the Department and, therefore, remains 
in effect for purposes of the initiation of this investigation. 
Accordingly, the normal value of the product is based on factors of 
production valued in a surrogate market-economy country in accordance 
with section 773(c) of the Act. 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, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585, 22586-87 (May 2, 1994).
    As required by 19 CFR 351.202(b)(7)(i)(c), the petitioners provided 
dumping margin calculations using the Department's NME methodology 
described in 19 CFR 351.408. For the calculation of normal value, the 
petitioners based the factors of production, as defined by section 
773(c)(3) of the Act (raw materials, labor, and overhead), for PRCBs on 
the quantities of inputs consumed by a U.S. producer of PRCBs. See 
Initiation Checklist.
    The petitioners selected India as their surrogate country. The 
petitioners stated that India is comparable to the PRC in its level of 
economic development and is a significant producer of comparable 
merchandise. Based on the information provided by the petitioners, we 
believe that the petitioners' use of India as a surrogate country is 
reasonable for purposes of initiation of this investigation. See 
Initiation Checklist.
    In accordance with section 773(c)(4) of the Act, the petitioners 
valued factors of production for PRCBs, where possible, on reasonably 
available, public surrogate-country data. To value raw materials, 
including color concentrate, printing ink, adhesive, and corrugated 
boxes, the petitioners used official Indian government import 
statistics. They used the most current information for wholesale price 
indices in India as published in the International Financial Statistics 
of the International Monetary Fund to determine the appropriate 
adjustments for inflation. The petitioners valued labor using the 
Department's regression-based wage rate for the PRC, in accordance with 
19 CFR 351.408(c)(3). For factory overhead expenses, selling, general 
and administrative expenses and profit, the petitioners applied rates 
derived from the publicly available data reported for 2000-2001 for 
companies in the Reserve Bank of India Bulletin (RBI Bulletin) from 
December 2002. The RBI Bulletin covers data for 1,126 companies, 
including producers of plastics products.
    Based on comparisons of export price to normal value, calculated in 
accordance with section 773(c) of the Act, the estimated dumping 
margins for PRCBs from the PRC range from 83.81 percent to 129.86 
percent.

Export Price and Normal Value - Malaysia

    The petitioners based export price on the price of Malay-
manufactured PRCBs from a Malaysian producer. In order to obtain ex-
factory prices, the petitioners deducted the appropriate inland freight 
from the sales value. We reviewed the information provided regarding 
export price and have determined that it represents information 
reasonably available to the petitioners and have reviewed it for 
adequacy and accuracy. See Initiation Checklist.
    The petitioners based normal value on the price of Malay-
manufactured PRCBs produced by the same company from which they 
obtained the export prices. In order to obtain ex-factory prices, the 
petitioners deducted inland freight, imputed credit, and value-added 
taxes from the sales value. The petitioners added charges for printing 
plates to the sales value. These charges were itemized separately in 
the price

[[Page 42004]]

quotation. The petitioners also made a packing adjustment and a 
difference-in-merchandise adjustment to normal value. We reviewed the 
normal value information provided and have determined that it 
represents information reasonably available to the petitioners and have 
reviewed it for adequacy and accuracy. See Initiation Checklist.
    Based on comparisons of export price to normal value, the estimated 
dumping margins for PRCBs from Malaysia range from 81.55 percent to 
101.74 percent.

Export Price and Normal Value - Thailand

    The petitioners based export price on the price of Thai-
manufactured PRCBs from a Thai producer. We reviewed the information 
provided regarding export price and have determined that it represents 
information reasonably available to the petitioners and have reviewed 
it for adequacy and accuracy. See Initiation Checklist.
    The petitioners based normal value on the price of Thai-
manufactured PRCBs produced by the same company from which they 
obtained the export prices. The petitioners made adjustments for 
imputed credit expenses, packing, and difference-in-merchandise to 
normal value. We reviewed the information provided regarding normal 
value and have determined that it represents information reasonably 
available to the petitioners and have reviewed it for adequacy and 
accuracy. See Initiation Checklist.
    Based on comparisons of export price to normal value, the estimated 
dumping margins for PRCBs from Thailand range from 34.84 percent to 
122.88 percent.

Fair-Value Comparison

    Based on the data provided by the petitioners, there is reason to 
believe that imports of PRCBs from the PRC, Malaysia, and Thailand are 
being, or are likely to be, sold in the United States at less than fair 
value.

Allegations and Evidence of Material Injury and Causation

    The petition alleges that the U.S. industry producing the domestic 
like product is being materially injured and is threatened with 
material injury by reason of the imports of the subject merchandise 
sold at less than normal value. The petitioners contend that the 
industry's injured condition is evidenced by declining trends in market 
share, pricing, production levels, profits, sales, and utilization of 
capacity. Furthermore, the petitioners contend that injury and threat 
of injury is evidenced by negative effects on its cash flow, ability to 
raise capital, and growth.
    These allegations are supported by relevant evidence including 
import data, lost sales, lost revenue and pricing information. The 
Department assessed the allegations and supporting evidence regarding 
material injury and causation and determined that these allegations are 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation (see Initiation Checklist dated July 10, 
2003, Re: Material Injury).

Initiation of Antidumping Investigations

    Based upon the examination of the petition on PRCBs from the PRC, 
Malaysia, and Thailand, and other information reasonably available to 
the Department, we find that the petition meets the requirements of 
section 732 of the Act. Therefore, we are initiating antidumping duty 
investigations to determine whether imports of PRCBs from the PRC, 
Malaysia, and Thailand are being, or are likely to be, sold in the 
United States at less than fair value. Unless postponed, we will make 
our preliminary determinations no later than 140 days after the date of 
this initiation.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the governments of the PRC, Malaysia, and Thailand. We will attempt 
to provide a copy of the public version of the petition to each 
producer named in the petition, as appropriate.

International Trade Commission 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 preliminarily determine, no later than August 4, 2003, 
whether there is a reasonable indication that imports of PRCBs from the 
PRC, Malaysia, and Thailand are causing material injury, or threatening 
to cause material injury, to a U.S. industry. A negative ITC 
determination for any country will result in the investigation being 
terminated with respect to that country; otherwise, these 
investigations will proceed according to statutory and regulatory time 
limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: July 10, 2003.
Jeffrey May,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-18017 Filed 7-15-03; 8:45 am]
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