[Federal Register Volume 72, Number 142 (Wednesday, July 25, 2007)]
[Notices]
[Pages 40842-40843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14448]



[[Page 40842]]

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DEPARTMENT OF COMMERCE

International Trade Administration


Surrogate Country Selection in Proceedings Involving Non-Market 
Economy Countries; Request for Comment

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

SUMMARY: The Department of Commerce (``the Department'') is seeking a 
second round of public comment on an aspect of its non-market economy 
(``NME'') methodology in antidumping proceedings. The Department is 
requesting comment on certain aspects of the methodology by which it 
selects an economically comparable market economy country to serve as a 
surrogate for the NME country under investigation or review.

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

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

FOR FURTHER INFORMATION CONTACT: Lawrence Norton, Economist, or Anthony 
Hill, Economist, Office of Policy, Import Administration, U.S. 
Department of Commerce, Room 2837, 14th Street and Constitution Avenue, 
NW., Washington DC 20230; telephone: 202-482-1579 or 202-482-1843, 
respectively.

Background

    The Department previously requested in the Federal Register (72 FR 
13246, March 21, 2007) comment on its selection of a ``surrogate 
country'' in NME antidumping proceedings, particularly on the issue of 
economic comparability. This refers to the practice in antidumping 
proceedings involving NME countries in which the Department calculates 
normal value by valuing the NME producer's factors of production, to 
the extent possible, using prices from a market economy that is at a 
comparable level of economic development and that is also a significant 
producer of comparable merchandise. As is discussed in the Department's 
previous request for comment, the Tariff Act of 1930, as amended (``the 
Act''), provides broad discretion in the selection of surrogate market 
economy countries to value NME factors of production. Section 773(c)(4) 
of the Act further directs the Department to base its selection of an 
appropriate surrogate country, to the extent possible, on its having 
``a level of economic development comparable to that of the nonmarket 
economy country.''
    Although the Act does not provide a definition of ``comparable 
level of economic development,'' the Department's regulations at 19 CFR 
351.408(b) direct the Department to ``place primary emphasis on per 
capita GDP as the measure of economic comparability.'' In the Import 
Administration Policy Bulletin 04.1,\1\ the Department provided 
guidance on economic comparability and established a sequential 
procedure for selecting a surrogate country, with economic 
comparability being the first factor considered.
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    \1\ The full text of the policy bulletin can be found at http://ia.ita.doc.gov/policy/bull04-1.html.
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    The Department's most recent notice in the Federal Register on this 
issue requested public comment on what range of per capita income 
should be considered comparable to a given NME country. The Department 
also requested comment on whether and on what basis the Department 
should generally disregard certain economically comparable countries as 
lacking data suitable for valuing the factors of production. In other 
words, the Department was interested in public comment on whether and 
how the Department can limit its initial analysis of countries that are 
economically comparable to a sub-group of countries more likely to have 
the data necessary to conduct an antidumping duty proceeding (72 FR 
13246, March 21, 2007). As discussed in the previous Federal Register 
notice requesting comment and as described in Policy Bulletin 04.1, the 
Department currently formulates a non-exhaustive list in each 
proceeding of about five countries economically comparable to the NME 
country that, in the Department's experience, are most likely to offer 
data necessary to conduct the proceeding. In its subsequent analysis of 
potential surrogate countries, the Department then examines the 
production of comparable merchandise, whether production is 
significant, and the availability of data in the countries on this 
initial list. If parties suggest the consideration of another 
economically comparable country that did not appear on this initial 
list, the Department will also consider the appropriateness of using 
that country in its analysis.
    The Department received eleven submissions in response to its May 
21, 2007 request for comment (all of the comments the Department 
received are available at the Import Administration Web site at http://www.trade.gov/ia). While no commenter addressed directly how the 
Department should precisely define ``economically comparable,'' several 
commenters suggested that the Department not interpret this requirement 
so narrowly as to prevent the Department from using the best available 
information in its dumping analysis. Certain commenters also suggested 
that the initial, non-exclusive ``list'' of economically comparable 
potential surrogate countries contain a balance of countries both above 
and below the per capita income level of the NME country.
    The Department also received suggestions that it involve interested 
parties on the issue of surrogate country selection earlier and more 
frequently in the process, including in the formulation of the initial 
list, and that it broaden the number of countries in the initial list. 
One commenter suggested expanding the initial list to ten economically 
comparable countries, and another suggested that the Department put out 
a complete list of the world's economies and request comment on what 
countries should be considered comparable to the NME in question. Some 
commenters argued that the Department consider other factors besides 
per capita income, such as the nature of a country's economy, level of 
urbanization, integration into world markets, or the ``comparability'' 
of the industry in the potential surrogate to the industry in the NME.

Request for Comment

    The Department would like to receive additional comments to those 
it received in response to its March 21, 2007 request for comment. In 
particular, the Department would like to receive comments focusing on 
the statutory concept of ``economically comparable.'' The Department is 
required by its statute and regulations to consider economic 
comparability in its selection of a surrogate country and to base 
``comparability'' on per capita income, but as stated above, the term 
is not defined specifically. Therefore, the Department is particularly 
interested in comments and suggestions on specific guidelines the 
Department should follow in determining the economic comparability of 
countries in a given case. Under the Department's established 
sequential process for selecting a surrogate country (as described in 
Policy Bulletin 04.1), the Department first determines a list of 
countries that are economically comparable and then analyzes each of

[[Page 40843]]

these countries for production of comparable merchandise, whether there 
is significant production, and availability of data. The Department 
invites comments on this process. In particular, it welcomes 
suggestions on how it should construct the initial list of economically 
comparable countries, how this set of countries should be balanced, and 
how many countries it should contain.
    As a second matter, the Department is also interested in inviting 
comment on whether certain comparable countries should be excluded, at 
least initially, from the Department's analysis of which country is the 
best possible surrogate in a given proceeding on the basis of a general 
lack of country specific data. With regard to this issue, if the 
Department were able to determine that a group of countries does not 
generally offer the data necessary to conduct an antidumping 
proceeding, both the Department and parties would be relieved of the 
burden of examining those countries as potential surrogates in every 
proceeding. Please note, however, that parties would retain the ability 
to advocate the consideration of a country that would otherwise not be 
considered if they determined that there were case-specific arguments 
for doing so.
    Finally, the Department requests comment on how it should evaluate 
and weigh the production experiences and data availability of countries 
in cases where there may be more than one potential surrogate country 
with reliable data and significant production of comparable 
merchandise. See e.g., Wooden Bedroom Furniture from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, Preliminary Results of New Shipper Reviews and 
Notice of Partial Rescission, 72 FR 6201, 6208 (February 9, 2007).

Submission of Comments

    Persons wishing to comment should file a signed original and six 
copies of each set of comments by the date specified above. The 
Department will consider all comments received by the close of the 
comment period. Comments received after the end of the comment period 
will be considered, if possible, but their consideration cannot be 
assured. 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 received in electronic form will be made available to the 
public in Portable Document Format (PDF) on the Internet at the Import 
Administration Web site 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) 482-0866, e-mail address: [email protected].

    Dated: July 22, 2007.
David Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E7-14448 Filed 7-24-07; 8:45 am]
BILLING CODE 3510-DS-P