[Federal Register Volume 73, Number 78 (Tuesday, April 22, 2008)]
[Notices]
[Pages 21588-21590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8433]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-913]


Notice of Preliminary Negative Determination of Critical 
Circumstances: Certain New Pneumatic Off-the-Road Tires From the 
People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) has preliminarily 
determined that critical circumstances do not exist with respect to 
imports of certain pneumatic off-the-road (OTR) tires from the People's 
Republic of China (PRC).

EFFECTIVE DATE: April 22, 2008.

FOR FURTHER INFORMATION CONTACT: Scott Lindsay, AD/CVD Operations, 
Office 6, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-0780.

SUPPLEMENTARY INFORMATION: 

Period of Investigation

    The period for which we are measuring subsidies, or the period of 
investigation (P01), is calendar year 2006.

Scope of Investigation

    The products covered by the scope of this investigation are new 
pneumatic tires designed for off-the-road (OTR) and off-highway use, 
subject to exceptions identified below. Certain OTR tires are generally 
designed, manufactured and offered for sale for use on off-road or off 
highway surfaces, including but not limited to, agricultural fields, 
forests, construction sites, factory and warehouse interiors, airport 
tarmacs, ports and harbors, mines, quarries, gravel yards, and steel 
mills. The vehicles and equipment for which certain OTR tires are 
designed for use include, but are not limited to: (1) Agricultural and 
forestry vehicles and equipment, including agricultural tractors,\1\ 
combine harvesters,\2\ agricultural high clearance sprayers,\3\ 
industrial tractors,\4\ log-skidders,\5\ agricultural implements, 
highway-towed implements, agricultural logging, and agricultural, 
industrial, skid-steers/mini-loaders;\6\ (2) construction vehicles and 
equipment, including earthmover articulated dump products, rigid frame

[[Page 21589]]

haul trucks,\7\ front endloaders,\8\ dozers,\9\ lift trucks, straddle 
carriers,\10\ graders,\11\ mobile cranes, compactors; and (3) 
industrial vehicles and equipment, including smooth floor, industrial, 
mining, counterbalanced lift trucks, industrial and mining vehicles 
other than smooth floor, skid-steers/mini-loaders, and smooth floor 
off-the-road counterbalanced lift trucks.\12\ The foregoing list of 
vehicles and equipment generally have in common that they are used for 
hauling, towing, lifting, and/or loading a wide variety of equipment 
and materials in agricultural, construction and industrial settings. 
The foregoing descriptions are illustrative of the types of vehicles 
and equipment that use certain OTR tires, but are not necessarily all-
inclusive. While the physical characteristics of certain OTR tires will 
vary depending on the specific applications and conditions for which 
the tires are designed (e.g., tread pattern and depth), all of the 
tires within the scope have in common that they are designed for off-
road and off-highway use. Except as discussed below, OTR tires included 
in the scope of the petitions range in size (rim diameter) generally 
but not exclusively from 8 inches to 54 inches. The tires may be either 
tube-type or tubeless, radial or non-radial, and intended for sale 
either to original equipment manufacturers or the replacement market. 
Specifically excluded from the scope are new pneumatic tires designed, 
manufactured and offered for sale primarily for on-highway or on-road 
use, including passenger cars, race cars, station wagons, sport utility 
vehicles, minivans, mobile homes, motorcycles, bicycles, on-road or on-
highway trailers, light trucks, and trucks and buses. The subject 
merchandise is currently classifiable under Harmonized Tariff Schedule 
of the United States (HTSUS) subheadings: 4011.20.10.25, 4011.20.10.35, 
4011.20.50.30, 4011.20.50.50, 4011.61.00.00, 4011.62.00.00, 
4011.63.00.00, 4011.69.00.00, 4011.92.00.00, 4011.93.40.00, 
4011.93.80.00, 4011.94.40.00, and 4011.94.80.00. While HTSUS 
subheadings are provided for convenience and Customs purposes, our 
written description of the scope is dispositive.
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    \1\ Agricultural tractors are four-wheeled vehicles usually with 
large rear tires and small front tires that are used to tow farming 
equipment.
    \2\ Combine harvesters are used to harvest crops such as corn or 
wheat.
    \3\ Agricultural sprayers are used to irrigate agricultural 
fields.
    \4\ Industrial tractors are four-wheeled vehicles usually with 
large rear tires and small front tires that are used to tow 
industrial equipment.
    \5\ A log skidder has a grappling lift arm that is used to 
grasp, lift and move trees that have been cut down to a truck or 
trailer for transport to a mill or other destination.
    \6\ Skid-steer loaders are four-wheel drive vehicles with the 
left-side drive wheels independent of the right-side drive wheels 
and lift arms that lie alongside the driver with the major pivot 
points behind the driver's shoulders. Skid-steer loaders are used in 
agricultural, construction and industrial settings.
    \7\ Haul trucks, which may be either rigid frame or articulated 
(i.e., able to bend in the middle) are typically used in mines, 
quarries and construction sites to haul soil, aggregate, mined ore, 
or debris.
    \8\ Front loaders have lift arms in front of the vehicle. It can 
scrape material from one location to another, carry material in its 
bucket or load material into a truck or trailer.
    \9\ A dozer is a large four-wheeled vehicle with a dozer blade 
that is used to push large quantities of soil, sand, rubble, etc., 
typically around construction sites. They can also be used to 
perform ``rough grading'' in road construction.
    \10\ A straddle carrier is a rigid frame, engine-powered machine 
that is used to load and offload containers from container vessels 
and load them onto (or off of) tractor trailers.
    \11\ A grader is a vehicle with a large blade used to create a 
flat surface. Graders are typically used to perform ``finish 
grading.'' Graders are commonly used in maintenance of unpaved roads 
and road construction to prepare the base course onto which asphalt 
or other paving material will be laid.
    \12\ A counterbalanced lift truck is a rigid frame, engine-
powered machine with lift arms that has additional weight 
incorporated into the back of the machine to offset or 
counterbalance the weight of loads that it lifts so as to prevent 
the vehicle from overturning. An example of a counterbalanced lift 
truck is a counterbalanced fork lift truck. Counterbalanced lift 
trucks may be designed for use on smooth floor surfaces, such as a 
factory or warehouse, or other surfaces, such as construction sites, 
mines, etc.
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Case History

    This investigation was initiated on August 7, 2007. See Certain New 
Pneumatic Off-the-Road Tires From the People's Republic of China: 
Initiation of Countervailing Duty Investigation, 72 FR 44122 (August 7, 
2007) (Initiation Notice). The preliminary determination was published 
on December 17, 2007. See Certain New Pneumatic Off-the-Road Tires From 
the People's Republic of China: Preliminary Affirmative Countervailing 
Duty Determination, 72 FR 71360 (December 17, 2007) (Preliminary 
Determination). On March 11, 2008, Titan Tire Corporation and United 
Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied 
Industrial and Service Workers International Union, AFL-CIO-CLC 
(Petitioners) alleged that critical circumstances exist with respect to 
imports of OTR tires from the PRC. See Petitioners' March 11, 2008 
submission (Allegation of Critical Circumstances). On March 28, 2008, 
GPX/Hebei Starbright Tire Co., Ltd. (Starbright), Tianjin United Tire & 
Rubber International Co., Ltd. (TUTRIC), and Guizhou Tyre Co., Ltd. 
(Guizhou), the respondents, timely submitted data for the requested 
time period. Pursuant to the Department's supplementary request for 
their data in quantity of tires, Starbright and TUTRIC provided 
additional data on April 2, 2008.

Comments of the Parties

    In their Allegation of Critical Circumstances, Petitioners contend 
there have been massive imports of subject tires since the filing of 
the petition, which have been exported by Starbright, TUTRIC, and 
Guizhou. Petitioners provide U.S. Customs and Border Protection 
Automated Manifest entry data of OTR tires for each of the three 
respondents. Petitioners argue that these data demonstrate that 
Starbright's, TUTRIC's, and Guizhou's imports increased more than the 
fifteen percent required to be considered ``massive'' under section 
351.206(h)(2) of the Departments regulations. See Allegation of 
Critical Circumstances, Attachment 1.
    In addition, Petitioners allege that there is a reasonable basis to 
believe or suspect that alleged subsidies in this investigation are 
inconsistent with the WTO Agreement on Subsidies and Countervailing 
Measures (Subsidies Agreement). See Allegation of Critical 
Circumstances at 5-6. With regard to the subsidy programs, Petitioners 
allege that a number of the subsidies under investigation are 
contingent on export performance or import substitution.\13\ 
Petitioners note that while none of these programs were found to 
provide a countervailable benefit in the preliminary determination, a 
critical circumstances determination need only be based on ``alleged'' 
countervailable subsidies (not necessarily preliminarily 
countervailable) that are inconsistent with the Subsidies Agreement. In 
addition, Petitioners argue that even if the Department only considers 
the preliminarily countervailed subsidies in making its preliminary 
critical circumstances determination, the Department still should 
consider their allegation in the final critical circumstances 
determination.\14\
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    \13\ Specifically, Petitioners cite the foreign currency 
retention scheme, preferential tax policies for export-oriented 
FIEs, income tax refund for reinvestment of FIE profits in export-
oriented enterprises, tax benefits for FIEs in encouraged industries 
that purchase domestic origin machinery, and VAT export rebates. In 
addition, with respect to the Provision of Land for Less Than 
Adequate Remuneration to SOEs, we noted in the Preliminary 
Determination that business proprietary information indicated that 
local authorities may have based their approval of Hebei Tire's 
asset sale in part on the export performance of Starbright (see 
Section B of the Preliminary Determination). 
    \14\ The final critical circumstances finding may be 
affirmative, even if the preliminary critical circumstances finding 
is negative. See section 705(a)(2) of the Act. 
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Analysis

    Section 703(e)(1) of the Tariff Act of 1930, as amended (``the 
Act''), provides that the Department will preliminarily determine that 
critical circumstances exist if there is a reasonable basis to believe 
or suspect that: (A) the alleged countervailable subsidy is 
inconsistent with the Subsidies Agreement, and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period.
    In determining whether an alleged countervailable subsidy is 
inconsistent with the Subsidies Agreement, the Department limits its 
critical circumstances findings to those

[[Page 21590]]

subsidies contingent on export performance or use of domestic over 
imported goods (i.e., those prohibited under Article 3 of the Subsidies 
Agreement).\15\
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    \15\ See, e.g., Final Affirmative Countervailing Duty 
Determination and Final Negative Critical Circumstances 
Determination Carbon and Certain Alloy Steel Wire Rod from Germany, 
67 FR 55808, 55809 (August 30, 2002).
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    Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine: (i) The volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, the 
Department will not consider imports to be massive unless imports 
during the ``relatively short period'' (``comparison period'') have 
increased by at least 15 percent compared to imports during an 
``immediately preceding period of comparable duration'' (``base 
period''). See 19 CFR 351.206(h)(2).
    Section 351.206(i) of the Department's regulations defines 
``relatively short period'' as normally being the period beginning on 
the date the proceeding commences (i.e., the date the petition is 
filed) and ending at least three months later. However, if the 
Department finds that importers, exporters, or producers had reason to 
believe, at some time prior to the beginning of the proceeding, that a 
proceeding was likely, then the Department may consider a period of not 
less than three months from that earlier time. See 19 CFR 35 1.206(i).
    In our preliminary determination, the subsidies found 
countervailable were not determined to be contingent on export 
performance or import substitution.\16\ See Preliminary Determination. 
Thus, pursuant to section 703(e)(1)(A) of the Act, the first 
requirement needed to affirmatively find critical circumstances has not 
been met, and the Department need not reach the issue of massive 
imports.
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    \16\ The programs preliminarily determined to provide a 
countervailable benefit are Government Policy Lending, Provision of 
Land for Less Than Adequate Remuneration to SOEs, Tax Subsidies to 
FIEs in Specifically Designated Geographic Areas, Local Income Tax 
Exemption and Reduction Programs for ``Productive'' PIEs, VAT and 
Tariff Exemptions for FIEs and Certain Domestic Enterprises Using 
Imported Equipment in Encouraged Industries, the State Key 
Technologies Renovation Project Fund, and Provision of Natural and 
Synthetic Rubber by SOEs for Less Than Adequate Remuneration.
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    However, at the time of the preliminary determination, there were 
four programs for which additional information was required before the 
Department could make any finding regarding their countervailability. 
These programs do not appear to be contingent on export performance or 
import substitution. However, if in the final determination the 
Department finds that any of these four programs, or any of the 
previously alleged subsidy programs, are countervailable and are 
contingent on export performance or import substitution, the Department 
will revisit the issue of massive imports as necessary.
    In the event that the Department needs to determine whether there 
have been massive imports, we have collected the following information: 
(1) The evidence presented in the Petitioners' March 11, 2008 
submission; (2) Respondents' monthly shipment data for November 2006 to 
November 2007; and (3) U.S. import data for the subject merchandise for 
2004-2007, as reported by the International Trade Commission (ITC) 
(http://dataweb.usitc.gov). The ITC data relied on in this analysis do 
not necessarily exclude those products not falling within the scope of 
this proceeding (i.e., OTR tires for light and medium trucks/buses or 
with a rim diameter equal to or exceeding 39 inches).

Conclusion

    Given the analysis above, we preliminarily determine critical 
circumstances do not exist for imports of OTR tires from the PRC. We 
will make a final determination concerning critical circumstances for 
OTR tires from the PRC when we make our final countervailable subsidy 
determination in this investigation, no later than July 7, 2008.

International Trade Commission Notification

    In accordance with section 703(f) of the Act, we will notify the 
ITC of our determination. This determination is issued and published 
pursuant to sections 703(f) and 777(i)(1) of the Act.

    Dated: April 11, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-8433 Filed 4-21-08; 8:45 am]
BILLING CODE 3510-DS-M