[Federal Register Volume 69, Number 76 (Tuesday, April 20, 2004)]
[Notices]
[Pages 21086-21088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8937]


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DEPARTMENT OF COMMERCE

International Trade Administration


Notice of Initiation of Countervailing Duty Investigations: 
Bottle-Grade Polyethylene Terephthalate (PET) Resin from India (C-533-
842) and Thailand (C-549-824)

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

EFFECTIVE DATE: April 20, 2004.

FOR FURTHER INFORMATION CONTACT: Douglas Kirby (India) or Christian 
Hughes (Thailand) at (202) 482-3782 or (202) 482-0190 respectively, 
Office of AD/CVD Enforcement VII, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Initiation of Investigations

The Petition

    On March 24, 2004, the U.S. Department of Commerce (the Department) 
received a countervailing duty petition filed in proper form by the 
United States PET Resin Producers Coalition (``Petitioner''). The 
Department received supplemental information to the petition from the 
petitioner on April 5, 2004. In accordance with section 702(b)(1) of 
the Tariff Act of 1930, as amended (the Act), petitioner alleges that 
producers or exporters of bottle-grade PET resin in India and Thailand 
receive countervailable subsidies within the meaning of section 701 of 
the Act, and that imports from India and Thailand are materially 
injuring, or are threatening material injury to, an industry in the 
United States.
    The Department finds that the petitioner filed the petition on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(C) of the Act and it has demonstrated 
sufficient industry support with respect to the countervailing duty 
investigations that it is requesting the Department to initiate. See 
infra, ``Determination of Industry Support for the Petition.''

Period of Investigation

    The anticipated period of investigation (POI) for both 
investigations is January 1, 2003 through December 31, 2003. See 
section 351.204(b)(2) of the Department's regulations (Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27385 (May 19, 
1997)).

Scope of Investigations

    The merchandise covered by each of these investigations is bottle-
grade polyethylene terephthalate (PET) resin, defined as having an 
intrinsic viscosity of at least 0.68 deciliters per gram but not more 
than 0.86 deciliters per gram. The scope includes bottle-grade PET 
resin that contains various additives introduced in the manufacturing 
process. The scope does not include post-consumer recycle (PCR) or 
post-industrial recycle (PIR) PET resin; however, included in the scope 
is any bottle-grade PET resin blend of virgin PET bottle-grade resin 
and recycled PET (RPET). Waste and scrap PET is outside the scope of 
the investigations. Fiber-grade PET resin, which has an intrinsic 
viscosity of less than 0.68 deciliters per gram, is also outside the 
scope of the investigations.
    The merchandise subject to these investigations is properly 
classified under subheading 3907.60.0010 of the Harmonized Tariff 
Schedule of the United States (HTSUS); however, merchandise classified 
under HTSUS subheading 3907.60.0050 that otherwise meets the written 
description of the scope is also subject to these investigations. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the merchandise under 
investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioner to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. As discussed in the 
preamble to the Department's regulations (Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), 
we are setting aside a period for parties to raise issues regarding 
product coverage. The Department encourages all 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, Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 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 determinations.

Consultations

    In accordance with Article 13.1 of the Agreement on Subsidies and 
Countervailing Measures and section 702(b)(4)(A)(ii) of the Act, we 
held separate consultations regarding this petition with the Government 
of India (``GOI'') and the Government of Thailand on April 7, 2004. See 
Memorandum to the File from Douglas Kirby: Consultations with the 
Government of India Regarding the Countervailing Duty Petition on PET 
Resin, dated April 9, 2004; see also Memorandum to the File from 
Christian Hughes: Consultations with the Government of Thailand 
Regarding the Countervailing Duty Petition on PET Resin, dated April 8, 
2004. Following consultations, the GOI provided information to support 
its statements at consultations regarding several of the GOI programs 
alleged by the petitioner. This information was placed in the record 
and provided to petitioner. See Memorandum to the File from Dana 
Mermelstein, ``Petition for the Imposition of Countervailing Duties on 
Bottle-Grade Polyethylene Terephthalate (PET) Resin from India: 
Information Submitted by the

[[Page 21087]]

Government of India,'' April 12, 2004, on file in the Import 
Administration Central Records Unit , Room B-099 of the Department of 
Commerce Building. The Department's consideration of this information 
is fully discussed in the Countervailing Duty Investigation Initiation 
Checklist: Bottle-Grade Polyethylene Terephthalate (PET) Resin from 
India (April 13, 2004) (India CVD Initiation Checklist).

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that the Department's industry support determination, which is 
to be made before the initiation of the investigations, be based on 
whether a minimum percentage of the relevant industry supports the 
petition. A petition satisfies 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. Moreover, section 702(c)(4)(D) of the Act 
provides that, if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the Department shall either 
poll the industry or rely on other information in order to determine if 
there is support for the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether a 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The U.S. 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 both the Department and the ITC 
must apply the same statutory definition regarding the domestic like 
product (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 
like product, such differences do not render the decision of either 
agency contrary to the 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. Ltd., v. United States, 688 F. 
Supp. 639, 642-44 (CIT 1988). See also High Information Content Flat 
Panel Displays and Display Glass from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).
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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 title.'' 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.
    In this case, the petition covers a single class or kind of 
merchandise, bottle-grade PET resin, as defined in the ``Scope of 
Investigations'' section, above. The petitioner does not offer a 
definition of domestic like product distinct from the scope of the 
investigations. Further, based on our analysis of the information 
presented to the Department by the petitioner, we have determined that 
there is a single domestic like product, also bottle-grade PET resin, 
which is consistent with the definition in the ``Scope of 
Investigations'' section above and have analyzed industry support in 
terms of this domestic like product.
    The Department has determined that the petitioner has established 
industry support representing over 50 percent of total production of 
the domestic like product. See India CVD Initiation Checklist; see also 
Countervailing Duty Investigation Initiation Checklist: Bottle-Grade 
Polyethylene Terephthalate (PET) Resin from Thailand (Thailand CVD 
Initiation Checklist) (April 13, 2004). Thus, no polling of the 
domestic industry by the Department pursuant to section 702(c)(4)(D) of 
the Act is required. In addition, the Department received no opposition 
to the petition from domestic producers of the like product. Therefore, 
the petitioner and the domestic producers who support the petition 
account for at least 25 percent of the total production of the domestic 
like product, and the requirements of section 702(c)(4)(A)(i) of the 
Act are met. Furthermore, the petitioner and the domestic producers 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 702(c)(4)(A)(ii) of the Act also are met.
    Accordingly, we determine that the petition is filed on behalf of 
the domestic industry within the meaning of section 702(b)(1) of the 
Act. See India CVD Initiation Checklist at Attachment II; see also 
Thailand CVD Initiation Checklist, at Attachment II, on file in the 
Central Records Unit, Room B-099 of the Department of Commerce.

Injury Test

    Both India and Thailand are ``Subsidies Agreement Countries'' 
within the meaning of section 701(b) of the Act. Therefore, section 
701(a)(2) applies to each investigation. Accordingly, the ITC must 
determine whether imports of the subject merchandise from India and 
Thailand are materially injuring, or are threatening material injury 
to, an industry in the United States.

Allegations of Subsidies

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition, on behalf of an industry, that; (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to petitioner 
supporting the allegations.
India
    We are initiating an investigation of the following programs 
alleged in the petition to have provided countervailable subsidies to 
manufacturers, producers and exporters of the subject merchandise in 
India (a full description of each program is provided in the India CVD 
Initiation Checklist):
    1. The Duty Entitlement Passbook Scheme (DEPS)/ Post-Export Credits
    2. Pre-Shipment and Post-Shipment Export Financing
    3. Export Promotion Capital Goods Scheme (EPCGS)
    4. Income Tax Exemption Scheme (Sections 10A, 10B, and 80 HHC)
    5. Exemption of Export Credit from Interest Taxes
    6. Export Processing Zones/Export-Oriented Units Program
    7. Market Development Assistance (MDA)
    8. Status Certificate Program
    9. Loan Guarantees from the GOI
    10. State of Maharashtra Program: Industrial Policy 2001
    11. State of Gujurat Program: Sales-Tax Incentive Scheme
    12. State of West Bengal Program: New Economic Policy on Industrial 
Development

[[Page 21088]]

Thailand
    We are initiating an investigation of the following programs 
alleged in the petition to have provided countervailable subsidies to 
manufacturers, producers and exporters of the subject merchandise in 
Thailand (a full description of each program is provided in the 
Thailand CVD Initiation Checklist):
    1. Section 28 of the Investment Promotion Act: Exemption from 
Payment of Import Duties on Machinery
    2. Section 30 of the Investment Promotion Act: Reduction of Import 
Duties on Raw or Essential Materials
    3. Section 31 of the Investment Promotion Act: Income Tax 
Exemptions
    4. Section 35 of the Investment Promotion Act: Special Rights and 
Benefits Granted to Promoted Activities Located in Investment Promotion 
Zones

Critical Circumstances Allegation

    In the petition, the petitioner claims that, following the 
initiation of these countervailing duty investigations, there is a 
reasonable basis to believe or suspect that critical circumstances will 
exist with regard to imports of bottle-grade PET resin from India and 
Thailand.
    Section 703(e)(1) of the Act states that, if a petitioner alleges 
critical circumstances, the Department will find that such critical 
circumstances exist, at any time after the date of initiation, when 
there is a reasonable basis to believe or suspect that, under paragraph 
(A), the alleged countervailable subsidies are inconsistent with the 
Subsidies Agreement, and that, under paragraph (B), there have been 
massive imports of the subject merchandise over a relatively short 
period of time. Section 351.206(h) of the Department's regulations 
defines ``massive imports'' as imports that have increased by at least 
by 15 percent over the imports during an immediately preceding period 
of comparable duration. Section 351.206(i) of the regulations states 
that the ``relatively short period'' will normally be defined as the 
period beginning on the date the proceeding begins and ending at least 
three months later. To date, the petitioner has not demonstrated that 
the requirement of ``massive imports . . . over a relatively short 
period'' has been met.
    The petitioner requests that, pursuant to section 702(e) of the 
Act, the Department request U.S. Customs and Border Protection (CBP) to 
compile information on an expedited basis regarding entries of subject 
merchandise. We note that section 702(e) of the Act states that if, at 
any time after initiation, there is a reasonable basis to believe or 
suspect that the alleged countervailable subsidies are inconsistent 
with the Subsidies Agreement, the Department may request the 
Commissioner of Customs to compile such information on an expedited 
basis. The petitioner alleges that certain programs listed in the 
petition with respect to both India and Thailand constitute export 
subsidies, which would be inconsistent with the Subsidies Agreement.
    As noted above, the petitioner has not met the criteria for a 
finding of critical circumstances. Therefore, at this time, we have no 
reasonable basis to believe or suspect that critical circumstances 
exist. However, the petitioner can resubmit its request for a finding 
of critical circumstances and, if the criteria for such a finding are 
met, we will issue a critical circumstances finding at the earliest 
possible date. See Policy Bulletin 98/4, 63 FR 55364 (October 15, 1998) 
(determination of critical circumstances may be made any time after 
initiation). In addition, we are considering the petitioner's request 
to obtain information from CBP for monitoring purposes, and will inform 
interested parties of our determination as soon as practicable.

Allegations and Evidence of Material Injury and Causation

    The petitioner alleges that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of subsidized imports from India and 
Thailand of the subject merchandise.
    The petitioner contends that the industry's injured condition is 
evident in lost sales and customers, in the declining trends in prices, 
profits, and domestic market share, and in its reduced ability to 
reinvest and pursue research and development activities. The 
allegations of injury and causation are supported by relevant evidence 
including U.S. import data, affidavits supporting claims of lost sales 
and declining revenues, and pricing information. The petitioner also 
alleges the imminent threat of further material injury based on the 
likely increases in foreign production volume of bottle-grade PET 
resin, the likelihood of substantially increased imports, and the 
prices of these imports having the likely effect of depressing or 
suppressing domestic prices.
    The Department has assessed the allegations and supporting evidence 
regarding material injury and causation and threat of material injury, 
and has determined that these allegations are properly supported by 
accurate and adequate evidence and meet the statutory requirements for 
initiation. See India CVD Initiation Checklist; see also Thailand CVD 
Initiation Checklist.

Initiation of Countervailing Duty Investigations

    Based on our examination of the petition on bottle-grade PET resin, 
and petitioner's responses to our requests for supplemental information 
clarifying the petition, we have found that the petition meets the 
requirements of section 702(b) of the Act. Therefore, in accordance 
with section 702(b) of the Act, we are initiating two countervailing 
duty investigations to determine whether manufacturers, producers, or 
exporters of bottle-grade PET resin from India and from Thailand 
receive countervailable subsidies. Unless the deadline is extended, we 
will make our preliminary determinations no later than 65 days after 
the date of this initiation.

Distribution of Copies of the Petition

    In accordance with section 702(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the governments of India and Thailand. We will 
attempt to provide a copy of the public version of the petition to each 
known exporter as provided for under 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiations, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will determine no later than May 10, 2004, whether there is 
a reasonable indication that imports of bottle-grade PET resin from 
India and Thailand are materially injuring, or threatening material 
injury to, a U.S. industry. A negative ITC determination will result in 
these investigations being terminated; 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: April 13, 2004.
Jeffrey May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-8937 Filed 4-19-04; 8:45 am]
BILLING CODE 3510-DS-S