[Federal Register Volume 73, Number 91 (Friday, May 9, 2008)]
[Notices]
[Pages 26363-26364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10525]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration


2007 Calculation of Expected Non-Market Economy Wages

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

ACTION: Finalization and Effective Date of 2007 Expected Non-Market 
Economy Wage Calculation.

-----------------------------------------------------------------------

SUMMARY: On April 11, 2008, the Department of Commerce (``Department'') 
published the preliminary 2007 expected non-market economy (``NME'') 
wages (the ``2007 calculation''), and provided the public with an 
opportunity to comment on potential clerical errors. See Expected Non-
Market Economy Wages: Request for Comments on 2007 Calculation, 73 FR 
19812 (April 11, 2008). The 2007 calculation was based on 2005 data and 
the methodology described in the Federal Register notice entitled 
Antidumping Methodologies: Market Economy Inputs, Expected Non-Market 
Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, 
Oct. 19, 2006 (hereafter, the ``Antidumping Methodologies notice''). 
The Department received two sets of comments in response to this notice 
and has made one change to its calculation, as described below, based 
on those comments. This notice constitutes the Department's 
announcement of the finalization and effective date of the 2007 
calculation.

DATES: These expected NME wage rates are finalized on the date of 
publication of this notice in the Federal Register and will be in 
effect for all antidumping proceedings for which the Department's final 
decision is due after the publication of this notice.

FOR FURTHER INFORMATION CONTACT: Anthony Hill, Economist, Office of 
Policy, or Juanita Chen, Special Assistant to the Senior Enforcement 
Coordinator, China/ NME Group, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-1843 and (202) 482-1904, respectively.

SUPPLEMENTARY INFORMATION:

Comments

    Two parties commented that the Department used the incorrect 
exchange rate for Madagascar when converting wages reported for that 
country into U.S. dollars. They pointed out that Madagascar has two 
currencies, the ariary and the Malagasy franc (``FMG''), and that the 
International Labour Organization (``ILO'') reported wage data for 
Madagascar in FMG. However, they noted, it seems as though the exchange 
rate used by the Department was an ariary rate per U.S. dollar. They 
also pointed out that the rate of ariary to FMG was 1 to 5. Parties 
provided a source that showed an FMG per U.S. dollar exchange rate and 
argued that the Department should use this exchange rate to convert the 
ILO wage data reported for Madagascar into U.S. dollars.

[[Page 26364]]

    Two parties also argued that the Department should have excluded 
Indian and South Korean wage rates from the regression analysis because 
of subsidy programs in these countries. They contend that the 
Department's normal practice is to exclude surrogate data from 
countries with generally available subsidies and that India and South 
Korea are countries in which these subsidies are available.
    One party argued that the Ordinary Least Squares (``OLS'') 
regression analysis used by the Department will inherently lead to 
inaccurate results when applying it to the dataset used in the expected 
NME wages calculation because the dataset exhibits heteroscedasticity. 
They argue that the Department should use a Generalized Least Squares 
regression to predict NME wages because this method would give more 
reliable results.

Department's Position

    With respect to the use of the incorrect exchange rate in 
converting Madagascar's labor rate, the Department agrees that this is 
a clerical error and will change the 2007 calculation. The ILO wage 
data for Madagascar are reported in FMG per hour. The International 
Financial Statistics (``IFS'') exchange rate data do not specify the 
name of the currency; however, the IFS does say that the exchange rates 
are reported in units of the national currency per U.S. dollar. 
Moreover, the International Monetary Fund's 2007 Annual Report on 
Exchange Arrangements and Exchange Restrictions (``IMF Report'') states 
that, ``The currency of Madagascar is the ariary.'' Instead of 
converting the ILO wage data reported for Madagascar directly into U.S. 
dollars using the exchange rate suggested by the parties, the 
Department converted the Madagascar wage data from FMG to ariary, and 
then from ariary to US dollars, using the ariary/FMG rate in the IMF 
Report and the IFS ariary/dollar rate. The IMF Report notes that 
Madagascar's two currencies are convertible at the rate of 1 ariary per 
5 FMG.
    The suggestion that the wage rates from India and South Korea 
should be excluded from the expected NME wage rate analysis is a 
comment on the calculation methodology and not a clerical error. India 
and South Korea are countries for which the Department has reason to 
believe or suspect maintain generally available export subsidies; 
however, this practice has no bearing on the use of domestic prices, 
including labor rates, within these countries.
    The argument that the Department should use a Generalized Least 
Squares regression instead of an Ordinary Least Squares regression is 
also a comment on the methodology and not a clerical error. The 
specific issue of heteroscedasticity has been recently addressed by the 
court, which concluded that, given (i) the inherent difficulties in 
identifying heteroscedasticity and (ii) the fact that the OLS 
estimators remain unbiased and consistent even in the face of 
heteroscedasticity, the Department's decision not to account for the 
possibility of heteroscedasticity was reasonable. See Dorbest Ltd., et 
al. v. United States, Slip Op. 2008-24 (CIT feb. 27, 2008) at 4-19.

Results

    Following the data compilation and regression methodology described 
in the Antidumping Methodologies notice, and using Gross National 
Income and wage data for 2005, the regression results are: Wage = 
0.2721729 + 0.0004477* GNI. The final expected NME wage rates, as 
calculated with the above mentioned change, are shown in Attachment 1.

    Dated: May 6, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.

Attachment 1

----------------------------------------------------------------------------------------------------------------
                                                                                     Expected NME wage rate (USD
                       Country                          2005 GNI (USD per annum)              per hour)
----------------------------------------------------------------------------------------------------------------
Armenia.............................................                         1,470                          0.93
Azerbaijan..........................................                         1,270                          0.84
Belarus.............................................                         2,760                          1.51
China...............................................                         1,740                          1.05
Georgia.............................................                         1,300                          0.85
Kyrgyz Republic.....................................                           450                          0.47
Moldova.............................................                           960                          0.70
Tajikistan..........................................                           330                          0.42
Uzbekistan..........................................                           530                          0.51
Vietnam.............................................                           620                          0.55
----------------------------------------------------------------------------------------------------------------

    The World Bank did not publish a GNI for Turkmenistan.
    The final results and underlying data for the 2007 calculation have 
been posted on the Import Administration Web site at (http://ia.ita.doc.gov).
[FR Doc. E8-10525 Filed 5-8-04; 8:45 am]
BILLING CODE 3510-DS-S