[Federal Register Volume 72, Number 101 (Friday, May 25, 2007)]
[Notices]
[Pages 29302-29304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-10130]


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DEPARTMENT OF COMMERCE

International Trade Administration


Antidumping Methodologies in Proceedings Involving Certain Non-
Market Economies: Market-Oriented Enterprise

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') requests 
public comment on whether it should consider granting market-economy 
treatment to individual respondents in antidumping proceedings 
involving China, the conditions under which individual firms should be 
granted market-economy treatment, and how such treatment might affect 
our antidumping calculation for such qualifying respondents.

DATES: Comments must be submitted by thirty days from the publication 
of this notice.

ADDRESSES: Written comments (original and ten copies) should be sent to 
David Spooner, Assistant Secretary for Import Administration, U.S. 
Department of Commerce, Central Records Unit, Room 1870, Pennsylvania 
Avenue and 14th Street NW, Washington, DC, 20230.

FOR FURTHER INFORMATION CONTACT: Carrie Blozy, Program Manager, AD/CVD 
Operations or Lawrence Norton, Economist, Office of Policy, Import 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington DC, 20230, (202) 482-5403 and (202) 
482-1579, respectively.

SUPPLEMENTARY INFORMATION:

Background

    In antidumping proceedings involving non-market economy (``NME'') 
countries, it is the Department's usual practice to calculate the 
normal value for allegedly dumped merchandise being imported into the 
United States by valuing the NME producer's factors of production 
using, to the extent possible, prices from a market economy that is at 
a comparable level of economic development and that is also a 
significant producer of comparable merchandise. See section 771(c)(4) 
of the Tariff Act of 1930, as amended (``the Act''). Specifically, 
section 773(c)(1) of the Act provides for the use of factors of 
production to determine normal value if two conditions are met:
     (A) the subject merchandise is exported from a non-market economy 
country; and
     (B) the administering authority finds that available information 
does not permit the normal value of the subject merchandise to be 
determined as is done for respondents in market economy countries.
    In all past NME proceedings involving China, the Department has 
found that both conditions of section 773(c)(1) are met and has 
calculated the normal value based on prices and costs from a surrogate 
country, in accordance with sections 773(c)(3) and (4) of the Act.
    The Department currently employs an industry-wide test to determine 
whether, under section 773(c)(1)(B), available information in the NME 
permits the use of the market economy antidumping methodology for the 
NME industry producing the subject merchandise. This so-called market-
oriented industry (``MOI'') test affords NME-country respondents the 
possibility of market economy treatment, but only on a case-by-case, 
industry-specific basis. This test is performed only upon request of 
respondent (companies and government). The Department has outlined 
three conditions that must be met in order for an MOI to exist: (1) 
that

[[Page 29303]]

there be virtually no government involvement in production or prices 
for the industry; (2) that the industry be marked by private or 
collective ownership that behaves in a manner consistent with market 
considerations; and (3) that producers be found to pay market-
determined prices for all major inputs, and for all but an 
insignificant proportion of minor inputs. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value and Negative Final 
Determination of Critical Circumstances: Certain Color Television 
Receivers From the People's Republic of China, 69 FR 20594, 20595 
(April 16, 2004), and accompanying Issues and Decision Memorandum at 
Comment 1.
    The current MOI test was formulated 15 years ago. See Preliminary 
Determination of Sales at Less Than Fair Value: Sulfanilic Acid From 
the People's Republic of China, 57 FR 9409 (March 18, 1992). However, 
as discussed more fully in the Department's March 29, 2007 memorandum, 
Countervailing Duty Investigation of Coated Free Sheet (``CFS'') Paper 
from the People's Republic of China - Whether the Analytical Elements 
of the Georgetown Steel Opinion are Applicable to China's Present-Day 
Economy, (March 29, 2007) (``Georgetown Steel Memorandum'') (memorandum 
is on file in the Department's Central Records Unit in Room B-099 of 
the main Department building (``CRU'') on the record of case number C-
570-907), China's economy has evolved significantly over time and its 
present-day economy ``features both a certain degree of private 
initiative as well as significant government intervention, combining 
market processes with continued state guidance.'' Id. at 7. Further, 
the Department found that while private industry now dominates many 
sectors of the Chinese economy and entrepreneurship is flourishing, 
China's economy is best characterized as one in which constrained 
market mechanisms operate alongside (and sometimes, in spite of) 
government plans. Id. at 9-10. Although the limits the PRC Government 
has placed on the role of market forces are not consistent with 
recognition of China as a market economy under the U.S. antidumping 
law, the evolution in China's economy nevertheless has led the 
Department to conclude that it is possible to determine whether the 
state has bestowed a benefit upon a Chinese producer (i.e., a subsidy 
can be identified and measured) and whether any such benefit is 
specific. Id. at 9. See also Coated Free Sheet Paper from the People's 
Republic of China: Amended Preliminary Affirmative Countervailing Duty 
Determination, 72 FR 17484 (April 9, 2007). The Department also stated 
in the Georgetown Steel Memorandum that the evolution of China's 
economy together with the features and characteristics of China's 
present-day economy, including a growing private sector, suggest that 
modification of some aspects of the Department's current NME 
antidumping policy and practice with regard to China may be warranted, 
such as the conditions under which the Department might grant an 
individual respondent in China market-economy treatment in some or all 
respects.

Request for Comment

    Given the Department's analysis in the March 29, 2007 Georgetown 
Steel Memorandum regarding China's present-day economy, the Department 
is requesting public comment on the conditions under which the 
Department might grant market-economy treatment to individual Chinese 
respondents, and, if so, how this might affect our antidumping duty 
calculations for such enterprises. The Department does not preclude the 
possibility that market-economy treatment for individual respondents in 
non-market economies other than China might be warranted. At this time 
however, the Department has only examined China's economy on a country-
wide basis.
    As noted above, the Department currently has a test to determine 
whether an industry is market-oriented. However, no industry in China 
has yet been granted MOI status. Given the high standard that must be 
met for an industry to obtain MOI status, the Department requests that 
parties focus their comments on the conditions and factors that would 
guide the Department's assessment of the market-orientation of 
individual respondents, as opposed to industries. In submitting 
comments, we ask parties to consider whether and how a market-oriented 
enterprise or limited market-oriented enterprise should be identified 
and to what extent the Department should rely on a market-oriented 
enterprise's prices and costs, particularly for those inputs that are 
inextricably linked to the broader operating economic environment, 
i.e., labor, land and capital, factors of production that were 
discussed at length in the Department's recent assessment of China's 
status as an NME in the antidumping duty investigation of certain lined 
paper products from China. See Memorandum for David M. Spooner, 
Assistant Secretary for Import Administration, Antidumping Duty 
Investigation of Certain Lined Paper Products from the People's 
Republic of China (``China'') China's Status as a Non-Market Economy 
(``NME'') (August 30, 2006) (memorandum is on file in the CRU on the 
record of case number A-570-901). In finding that China continues to be 
an NME for purposes of U.S. antidumping law, the Department determined 
that, despite considerable reforms, the PRC government ``retains for 
itself considerable levers of control over the economy.'' Id. at 4. 
Accordingly, while an enterprise may be market-oriented, the cost of 
certain inputs obtained in the broader economy may necessarily be 
determined on a non-market basis. Given such a situation in China, we 
request parties to consider to what extent, if any, a finding of a 
market-oriented enterprise might be limited and how a respondent's 
prices and costs within China could be utilized together with certain 
surrogate prices and costs in our antidumping duty calculations.

Submission of Comments

    Persons wishing to comment should file a signed original and ten 
copies of each set of comments by the date specified above. The 
Department will consider all comments received before the close of the 
comment period. Comments received after the end of the comment period
    will be considered if time permits. The Department will not accept 
comments accompanied by a request that a part or all of the material be 
treated confidentially because of its business proprietary nature or 
for any other reason. The Department will return such comments and 
materials to the persons submitting the comments and will not consider 
them in the development of any changes to its practice. The Department 
requires that comments be submitted in written form. The Department 
recommends submission of comments in electronic form to accompany the 
required paper copies. Comments filed in electronic form should be 
submitted either by e-mail to the webmaster below, or on CD-ROM, as 
comments submitted on diskettes are likely to be damaged by postal 
radiation treatment.
    Comments will be made available to the public in Portable Document 
Format (``PDF'') on the Internet at the Import Administration website 
at the following address: http://www.trade.gov/ia/.
    Any questions concerning file formatting, document conversion, 
access on the Internet, or other electronic filing issues should be 
addressed to Andrew Lee Beller, Import Administration Webmaster, at 
(202)

[[Page 29304]]

482-0866, email address: [email protected].

    Dated: May 18, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-10130 Filed 5-24-07; 8:45 am]
BILLING CODE 3510-DS-S