[Federal Register Volume 75, Number 248 (Tuesday, December 28, 2010)]
[Proposed Rules]
[Pages 81533-81536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32632]



[[Page 81533]]

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DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Part 351

[Docket No. 101130598-0598-01]
RIN 0625-AA87


Antidumping Proceedings: Calculation of the Weighted Average 
Dumping Margin and Assessment Rate in Certain Antidumping Duty 
Proceedings

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

ACTION: Proposed Rule; Proposed Modification; Request for Comments.

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SUMMARY: The Department of Commerce (``the Department'') is requesting 
comments regarding the calculation of the weighted average dumping 
margin and antidumping duty assessment rate in certain antidumping duty 
proceedings. Currently, in a review of an antidumping duty order 
conducted under 19 CFR 351.213 (administrative review), 351.214 (new 
shipper review), and 351.215 (expedited antidumping review) 
(collectively ``reviews''), the Department usually makes comparisons 
between transaction-specific export prices and average normal values 
and does not offset any dumping that is found with the results of 
comparisons for which the transaction-specific export price exceeds the 
average normal value. In addition, in the most recent original 
antidumping duty investigation in which the Department calculated the 
weighted average margins of dumping using transaction-to-transaction 
comparisons, the Department did not grant offsets for non-dumped 
comparisons. Several World Trade Organization (``WTO'') dispute 
settlement reports have found that the United States application of 
these methodologies was inconsistent with our WTO obligations. In 
response to these reports, the Department proposes modification of its 
methodologies, including changes to certain provisions of the 
Department's regulations.

DATES: To be assured of consideration, comments must be received no 
later than January 27, 2011.

ADDRESSES: All comments must be submitted through the Federal 
eRulemaking Portal at http://www.regulations.gov, Docket No. ITA-2010-
0011, unless the commenter does not have access to the internet. 
Commenters that do not have access to the internet may submit the 
original and two copies of each set of comments by mail or hand 
delivery/courier to Ronald K. Lorentzen, Deputy Assistant Secretary for 
Import Administration, Room 1870, Department of Commerce, 14th Street 
and Constitution Ave., NW., Washington, DC 20230. The comments should 
also be identified by Regulation Identifier Number (RIN) 0625-AA87.
    The Department will consider all comments received before the close 
of the comment period. The Department will not accept comments 
accompanied by a request that part or all of the material be treated 
confidentially because of its business proprietary nature or for any 
other reason. All comments responding to this notice will be a matter 
of public record and will be available for inspection at Import 
Administration's Central Records Unit (Room 7046 of the Herbert C. 
Hoover Building) and on the Department's Web site at 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].

FOR FURTHER INFORMATION CONTACT: Quentin M. Baird, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-0834.

SUPPLEMENTARY INFORMATION:

Background

    In antidumping proceedings, the Department determines margins of 
dumping by comparing normal value with the export price \1\ of 
comparable merchandise. Pursuant to 19 CFR 414(c)(2), in a review, the 
Department normally will compare normal value and export price using 
the average-to-transaction method, which involves a comparison of the 
weighted average normal value to export price of individual 
transactions for comparable merchandise. When determining the weighted 
average margin of dumping in a review, the Department aggregates the 
results of these comparisons and has not allowed the results of the 
comparisons for which export price exceeds normal value to offset the 
results of comparisons for which export price is less than normal 
value.\2\ When determining importer-specific assessment rates in a 
review, the Department similarly aggregates the results of importer-
specific comparisons and has not allowed the results of the comparisons 
for which export price exceeds normal value to offset the result of 
comparisons for which export price is less than normal value.
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    \1\ The Department may also use constructed export prices, if 
appropriate. Because the use of export prices or constructed export 
prices is not relevant to the substance of this notice, the 
Department refers only to export prices hereafter.
    \2\ Section 771(35)(A) of the Act defines the dumping margin as 
the amount by which normal value ``exceeds'' export price (or 
constructed export price). Section 771(35)(B) defines the weighted 
average dumping margin as the percentage determined by dividing the 
aggregate dumping margins determined for a specific exporter or 
producer by the aggregate export or constructed export price of that 
exporter or producer.
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    Pursuant to section 777A(d)(1)(A) of the Tariff Act of 1930 (``the 
Act''), in an investigation, the Department may determine whether the 
subject merchandise is being sold at less than fair value by comparing 
normal values of individual transactions to the export prices of 
individual transactions for comparable merchandise (the transaction-to-
transaction comparison method).\3\ The Department's regulations state 
that Department will use the transaction-to-transaction method only in 
unusual situations, such as when there are very few sales of subject 
merchandise and the merchandise sold in each market is identical or 
very similar or is custom-made. 19 CFR 351.414(c)(1). The Department 
has rarely applied the transaction-to-transaction comparison method in 
investigations. In the most recent investigation in which the 
Department calculated the weighted average margins of dumping using 
transaction-to-transaction comparisons, the Department did not grant 
offsets for non-dumped comparisons.\4\
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    \3\ The Department's regulations also state that the Department 
normally will compare weighted average normal values to weighted 
average export prices for comparable merchandise (the average-to-
average comparison method) in an investigation. 19 CFR 
351.414(c)(1). In response to prior WTO dispute settlement reports, 
the Department modified its methodology for calculating the weighted 
average margin of dumping in an original investigation to no longer 
use average-to-average comparisons without providing offsets for 
non-dumped comparisons. Antidumping Proceedings: Calculation of the 
Weighted-Average Dumping Margin During an Antidumping Investigation; 
Final Modification, 71 FR 77,722 (December 27, 2006).
    \4\ See Notice of Determination Under Section 129 of the Uruguay 
Round Agreements Act; Antidumping Measures Concerning Certain 
Softwood Lumber Products From Canada, 70 FR 22,636 (May 2, 2005).
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    The above methodologies have been challenged as being inconsistent 
with the World Trade Organization (``WTO'') General Agreement on 
Tariffs and Trade 1994 (``GATT 1994'') and the Agreement on 
Implementation of Article VI of the GATT 1994 (``Antidumping 
Agreement''). In several disputes,\5\ the

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WTO Dispute Settlement Body has adopted dispute settlement panel 
reports, as modified by the WTO Appellate Body, which found denial of 
offsets for non-dumped comparisons in reviews to be inconsistent with 
the United States' WTO obligations. The WTO Appellate Body also found 
denial of offsets for non-dumped comparisons in original investigations 
using transaction-to-transaction comparisons to be inconsistent with 
the United States' WTO obligations. In addition, certain of the 
Department's determinations made pursuant to section 751(c) of the Act 
(five-year reviews) were found to be inconsistent with the United 
States' WTO obligations insofar as those determinations relied on 
weighted average margins of dumping calculated using the methodologies 
found to be inconsistent with the United States' WTO obligations.
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    \5\ United States-Laws, Regulations and Methodology for 
Calculating Dumping Margins (``Zeroing'') (``US-Zeroing (EC)''), WT/
DS294/R, WT/DS294/AB/R, adopted May 9, 2006; United States-Measures 
Related to Zeroing and Sunset Reviews (``US-Zeroing (Japan)''), WT/
DS322/R, WT/DS322/AB/R, adopted Jan. 23, 2007; United States-Final 
Anti-Dumping Measures on Stainless Steel from Mexico (``US-Stainless 
Steel (Mexico)''), WT/DS344/R, WT/DS344/AB/R, adopted May 20, 2008; 
United States-Continued Existence and Application of Zeroing 
Methodology (``US-Continued Zeroing (EC)''), WT/DS350/R, WR/DS350/
AB/R, adopted Feb. 19, 2009.
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Proposal for Calculating the Weighted Average Dumping Margin and 
Assessment Rate in Certain Antidumping Duty Proceedings and Request for 
Comment

    Pursuant to section 123(g)(1) of the Uruguay Round Agreements Act 
(``the URAA''), ``[i]n any case in which a dispute settlement panel or 
the Appellate Body finds in its report that a regulation or practice of 
a department or agency of the United States is inconsistent with any of 
the Uruguay Round Agreements,'' certain requirements must be met before 
``that regulation or practice'' may be ``amended, rescinded, or 
otherwise modified * * * .'' Section 123(g)(1)(C) of the URAA requires 
that the Department provide opportunity for public comment by 
publishing ``the proposed modifications and the explanation of the 
modification'' in the Federal Register.
    Pursuant to section 123(g)(1) of the URAA, by this notice the 
Department is proposing modifications to its practice in response to 
the following WTO dispute settlement findings. The WTO Appellate Body 
in US-Zeroing (EC), US-Zeroing (Japan), US-Stainless Steel (Mexico), 
US-Continued Zeroing (EC) found denial of offsets for non-dumped 
comparisons in antidumping duty administrative reviews to be 
inconsistent with Article 9.3 of the Antidumping Agreement and Article 
VI:2 of the GATT 1994, either ``as such,'' or ``as applied'' in certain 
administrative reviews, or both.\6\ In US-Zeroing (Japan), the WTO 
Appellate Body also found denial of offsets for non-dumped comparisons 
in antidumping duty original investigations using transaction-to-
transaction comparisons was inconsistent with Articles 2.4 and 2.4.2 of 
the Antidumping Agreement.\7\ In addition, in US-Zeroing (Japan), the 
WTO Appellate Body found denial of offsets for non-dumped comparisons 
in antidumping duty new shipper reviews was inconsistent with Articles 
2.4 and 9.5 of the Antidumping Agreement.\8\ Finally, in US-Zeroing 
(EC), US-Zeroing (Japan), and US-Continued Zeroing (EC), the WTO 
Appellate Body found reliance on weighted average margins of dumping 
calculated without granting offsets for non-dumped comparisons as the 
basis for determinations made in certain five-year (sunset) reviews was 
inconsistent with Article 11.3 of the Antidumping Agreement.\9\
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    \6\ US-Zeroing (EC), WT/DS294/R, WT/DS294/AB/R, para. 263 
(a)(i); US-Zeroing (Japan), WT/DS322/R, WT/DS322/AB/R, para. 190 (c) 
& 190(e); US-Stainless Steel (Mexico), WT/DS344/R, WT/DS344/AB/R, 
paras. 165 (a) & 165 (b); US-Continued Zeroing (EC), WT/DS350/R, 
para. 8.1(e), WT/DS350/AB/R, paras. 395 (a)(v), 395 (d) & 395 
(e)(ii).
    \7\ US-Zeroing (Japan), WT/DS322/AB/R, para. 190(b).
    \8\ Id., para. 190(d).
    \9\ US-Zeroing (EC), WT/DS294/AB/RW, para. 469(h)(iv) & (vi); 
US-Zeroing (Japan), WT/DS322/AB/R, para. 190(f); US-Continued 
Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para. 395(f).
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    In response to prior findings of inconsistency with respect to the 
Department's calculation of weighted average margins of dumping in 
original investigations, the Department previously modified its 
methodology such that it now provides offsets for non-dumped 
comparisons when using average-to-average comparisons in original 
investigations.\10\ In response to the findings of inconsistency 
identified above, the Department now proposes to modify its methodology 
for calculating weighted average margins of dumping and assessment 
rates to provide offsets for non-dumped comparisons while using monthly 
average-to-average comparisons in reviews in a manner that parallels 
the WTO-consistent methodology the Department currently applies in 
original investigations. In particular, except where the Department 
determines that application of a different comparison method is more 
appropriate, in reviews, the Department proposes to compare monthly 
weighted average export prices with monthly weighted average normal 
values and to grant an offset for such comparisons that show export 
price exceeds normal value in the calculation of the weighted average 
margin of dumping and assessment rate. Where the weighted average 
margin of dumping is zero or de minimis, no antidumping duties will be 
assessed. In addition, to the extent that any prior original 
antidumping duty investigations using transaction-to-transaction 
comparisons could be considered as establishing a practice of the 
Department with respect to the granting or denial of offsets for non-
dumped comparisons when calculating the weighted average margin of 
dumping,\11\ the Department proposes to withdraw any such practice. 
With respect to the findings of inconsistency in certain of the 
Department's five-year (sunset) reviews, the Department notes that the 
underlying issue is the methodology for calculating weighted average 
dumping margins in investigations and reviews, which is addressed by 
the modifications the Department has made with respect to 
investigations and is proposing herein to make with respect to reviews. 
Moreover, the Department recognizes that while section 752(c) of the 
Act provides that the Department shall consider the weighted average 
dumping margins determined in the investigation and subsequent reviews, 
among other factors, the Act does not require the Department to rely on 
the weighted average dumping margins, or any particular weighted 
average dumping margin, as the basis for its determinations in five-
year (sunset) reviews where such reliance would render the 
determination inconsistent with the United States' international 
obligations.
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    \10\ Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin During an Antidumping Investigation; Final 
Modification, 71 FR 77,722 (December 27, 2006).
    \11\ US-Zeroing (Japan), WT/DS322/AB/R, paras. 88, 138.
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    The modified methodology for reviews requires the Department to 
revise certain provisions of the Department's regulations. In 
particular, 19 CFR 351.414(a) and (c) indicate a preference for making 
``average-to-transaction'' comparisons in administrative reviews. This 
proposed rule would revise these provisions to permit application of 
average-to-average comparisons in reviews in a manner that parallels 
the comparison methods used in original investigations. In addition, 
Sec.  351.414(d)(3) and (e) of the Department's regulations set forth 
the time periods over which weighted

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averages are calculated. Section 351.414(d)(3) provides that when 
applying the ``average-to-average'' method, the weighted averages will 
normally be calculated over the entire period of investigation or 
review, unless another averaging period is deemed appropriate. Section 
351.414(e) provides that when applying the preferred ``average-to 
transaction'' method in a review, the Department will calculate 
weighted average normal values on a monthly basis. The Department 
proposes to modify Sec.  351.414(d)(3) to permit weighted averages to 
normally be calculated on a monthly basis in reviews, regardless of the 
comparison method used. Conforming changes to Sec.  351.414(e) will 
ensure Sec.  351.414(d)(3) and (e) do not contain redundant language. 
Proposed language for the modified provisions is set forth at the end 
of this notice.

Submission of Comments

    As specified above, to be assured of consideration, comments must 
be received no later than January 27, 2011.
    The Department will consider all comments received before the close 
of the comment period. The Department will not accept comments 
accompanied by a request that part or all of the material be treated 
confidentially because of its business proprietary nature or for any 
other reason. All comments responding to this notice will be a matter 
of public record and will be available for inspection at Import 
Administration's Central Records Unit (Room 7046 of the Herbert C. 
Hoover Building) and on the Department's Web site at 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].

Timetable

    After considering all comments received, the Department intends to 
publish in the Federal Register a Final Rule and Final Modification 
regarding the calculation of the weighted average dumping margin and 
assessment rate in certain antidumping duty proceedings. See section 
123(g)(1)(F) of the URAA (19 U.S.C. 3533(g)(1)(F)). Any changes in 
methodology will be applicable in any determinations made pursuant to 
section 129 of the URAA (19 U.S.C. 3538) in connection with the above-
referenced WTO disputes, and in all reviews pending before the 
Department for which a preliminary results is issued more than 60 
business days after the date of publication of the Department's Final 
Rule and Final Modification.

Classification

Executive Order 12866

    The proposed rule has been determined to be not significant for 
purposes of Executive Order 12866.

Regulatory Flexibility Act

    The Chief Counsel for Regulation has certified to the Chief Counsel 
for Advocacy of the Small Business Administration (``SBA'') under the 
provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the 
proposed rule would not have a significant economic impact on a 
substantial number of small business entities. An explanation of the 
provisions that would be implemented by this rule is provided in the 
preamble and is not repeated here. The entities that could be impacted 
by this rulemaking include U.S. importers of merchandise subject to 
antidumping duty orders. Currently, the Department is not able to 
estimate the number of small entities that will be impacted by this 
proposed rule, but the Department anticipates that some of the entities 
affected by the proposed rule may be considered small entities under 
the SBA small business standard. However, the Department has determined 
that the proposed rule will not adversely impact small business 
entities. The proposed rule, by granting offsets in the calculation of 
the dumping margin and assessment rate, will not increase antidumping 
duty liability. Thus no Initial Regulatory Flexibility Act statement is 
required, nor has one been prepared.

Paperwork Reduction Act

    The proposed rule does not contain a collection of information for 
purposes of the Paperwork Reduction Act of 1980, as amended (44 U.S.C. 
3501 et seq.).

List of Subjects in 19 CFR Part 351

    Administrative practice and procedure, Antidumping, Business and 
industry, Cheese, Confidential business information, Countervailing 
duties, Freedom of information, Investigations, Reporting and 
recordkeeping requirements.

    Dated: November 30, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
    For the reasons stated, ITA proposes to amend 19 CFR part 351 as 
follows:

PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES

    1. The authority citation for part 351 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 1202 note; 19 U.S.C. 1303 
note; 19 U.S.C. 1671 et seq.; and 19 U.S.C. 3538.

    2. Section 351.414 is revised to read as follows:


Sec.  351.414  Comparison of normal value with export price 
(constructed export price).

    (a) Introduction. This section explains when and how the Secretary 
will average prices in making comparisons of export price or 
constructed export price with normal value. (See section 777A(d) of the 
Act.)
    (b) Description of methods of comparison--(1) Average-to-average 
method. The ``average-to-average'' method involves a comparison of the 
weighted average of the normal values with the weighted average of the 
export prices (and constructed export prices) for comparable 
merchandise.
    (2) Transaction-to-transaction method. The ``transaction-to-
transaction'' method involves a comparison of the normal values of 
individual transactions with the export prices (or constructed export 
prices) of individual transactions for comparable merchandise.
    (3) Average-to-transaction method. The ``average-to-transaction'' 
method involves a comparison of the weighted average of the normal 
values to the export prices (or constructed export prices) of 
individual transactions for comparable merchandise.
    (c) Choice of Method. (1) In an investigation or review, the 
Secretary will use the average-to-average method unless the Secretary 
determines another method is appropriate in a particular case.
    (2) The Secretary will use the transaction-to-transaction method 
only in unusual situations, such as when there are very few sales of 
subject merchandise and the merchandise sold in each market is 
identical or very similar or is custom-made.
    (d) Application of the average-to-average method--(1) In general. 
In applying the average-to-average method, the Secretary will identify 
those sales of the subject merchandise to the United States that are 
comparable, and will include such sales in an ``averaging group.'' The 
Secretary will calculate a weighted average of the export prices and 
the constructed export prices of the sales included in the averaging 
group, and will compare this weighted average to the weighted average 
of the normal values of such sales.

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    (2) Identification of the averaging group. An averaging group will 
consist of subject merchandise that is identical or virtually identical 
in all physical characteristics and that is sold to the United States 
at the same level of trade. In identifying sales to be included in an 
averaging group, the Secretary also will take into account, where 
appropriate, the region of the United States in which the merchandise 
is sold, and such other factors as the Secretary considers relevant.
    (3) Time period over which weighted average is calculated. When 
applying the average-to-average method in an investigation, the 
Secretary normally will calculate weighted averages for the entire 
period of investigation. However, when normal values, export prices, or 
constructed export prices differ significantly over the course of the 
period of investigation, the Secretary may calculate weighted averages 
for such shorter period as the Secretary deems appropriate. When 
applying the average-to-average method in a review, the Secretary 
normally will calculate weighted averages on a monthly basis and 
compare the weighted-average monthly export price or constructed export 
price to the weighted-average normal value for the contemporaneous 
month.
    (e) Application of the average-to-transaction method--In applying 
the average-to-transaction method in a review, when normal value is 
based on the weighted average of sales of the foreign like product, the 
Secretary will limit the averaging of such prices to sales incurred 
during the contemporaneous month.
    (f) Contemporaneous Month. Normally, the Secretary will select as 
the contemporaneous month the first of the following months which 
applies: (1) The month during which the particular U.S. sales under 
consideration were made;
    (2) If there are no sales of the foreign like product during this 
month, the most recent of the three months prior to the month of the 
U.S. sales in which there was a sale of the foreign like product.
    (3) If there are no sales of the foreign like product during any of 
these months, the earlier of the two months following the month of the 
U.S. sales in which there was a sale of the foreign like product.

[FR Doc. 2010-32632 Filed 12-27-10; 8:45 am]
BILLING CODE 3510-DS-P