65 FR 18290, April 7, 2000 A-122-823 Sunset Review Public Document MEMORANDUM TO: Robert S. LaRussa Assistant Secretary for Import Administration FROM: Jeffrey A. May Director Office of Policy SUBJECT: Issues and Decision Memo for the Full Sunset Review of the Antidumping Duty Order on Cut-to-Length Carbon Steel Plate from Canada; Preliminary Results Summary: We have analyzed the comments of interested parties in the full sunset review of the antidumping duty order on cut-to-length carbon steel plate from Canada. We recommend that you approve the positions we have developed in the Discussion of the Issues section of this memorandum. Below is the complete list of the issues in this full sunset review for which we received comments by parties: 1. Adequacy Determination 2. Likelihood of continuation or recurrence of dumping Weighted-average dumping margin Volume of imports Other factors 3. Magnitude of the margin likely to prevail Margins from the investigation Use of a more recent margin History of the Order: On August 19, 1993, the Department published an antidumping duty order on cut-to-length carbon steel plate from Canada.(1) On September 26, 1995, in an amendment to the final determination, the Department assigned a weighted-average antidumping duty margin of 0.06 percent for IPSCO, Inc. ("IPSCO"), 68.70 percent for Stelco, Inc. ("Stelco"), and 61.88 percent for "all others."(2) Because IPSCO's margin was de minimis, it was excluded from the order. The Department has completed five administrative reviews of the order. In the first administrative review, covering the period February 4, 1993, through July 31, 1994, the Department assigned a margin of 1.82 percent for Algoma Steel, Inc. ("Algoma"), 0.02 percent for Manitoba Rolling Mills ("Manitoba"), and 0.92 percent for Stelco.(3) In the second administrative review, covering the period August 1, 1994, through July 31, 1995, the Department assigned a margin of 0.37 percent for Algoma, and zero percent for Stelco.(4) In the third administrative review, covering the period August 1, 1995, through July 31, 1996, the Department assigned margins of 0.44 percent to Algoma, and zero percent for Gerdau MRM Steel ("MRM"),(5) and an amended margin of 0.35 percent for Stelco.(6) In the fourth administrative review, covering the period August 1, 1996, through July 31, 1997, the Department determined margins of 0.23 percent for Algoma, zero percent for MRM, zero percent for Stelco, and 68.70 percent for A.J. Forsyth and Co., Ltd. ("Forsyth").(7) In the fifth administrative review, covering the period August 1, 1997, through July 31, 1998, the Department determined margins of zero percent for MRM and Stelco.(8) There has been one scope ruling and two changed circumstances reviews completed in this proceeding. On June 1, 1998, the Department determined that certain carbon steel plate with boron added is outside the scope of the order.(9) On February 28, 1996, the Department revoked the order with respect to certain cut-to-length carbon steel plate free of cobalt-60 and other radioactive nuclides; and with certain dimensions and other characteristics.(10) On February 12, 1999, the Department revoked the order with respect certain cut-to-length carbon steel plate free of cobalt-60 and other radioactive nuclides; and with certain dimensions and other characteristics.(11) In addition, there has been one circumvention inquiry initiated with respect to imports of boron-added grader blade and draft key steel.(12) However, continuation of this inquiry was subsequently enjoined by the Court of International Trade.(13) Background: On September 1, 1999, the Department initiated a sunset review of the antidumping duty order on cut-to-length carbon steel plate from Canada (64 FR 47767), pursuant to section 751(c) of the Tariff Act of 1930, as amended ("the Act"). The Department received a notice of intent to participate on behalf of the Bethlehem Steel Corporation and U.S. Steel Corporation, a unit of USX Corporation ("domestic interested parties"), within the applicable deadline (September 15, 1999) specified in section 351.218(d)(1)(i) of the Sunset Regulations. On October 1, 1999, Stelco Inc. ("Stelco") notified the Department that it intended to participate in this review as a respondent interested party. Domestic interested parties claimed interested-party status under section 771(9)(C) of the Act, as U.S. producers of a domestic like product; Stelco is an interested party pursuant to section 771(9)(A) of the Act, as a foreign producer and exporter of subject merchandise. On September 24, 1999, we received a request for an extension to file rebuttal comments from domestic interested parties.(14) Pursuant to 19 CFR 351.302(b)(1999), the Department extended the deadline for all participants eligible to file rebuttal comments until October 15, 1999.(15) On October 1, 1999, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i), and a complete substantive response from Stelco. On October 15, 1999, we received rebuttal comments from domestic interested parties. On October 20, 1999, pursuant to 19 CFR 351.218 (e)(1)(ii)(A), the Department determined to conduct an expedited (120-day) sunset review of this order.(16) Domestic interested parties and Stelco claim that they have been involved in this proceeding since its inception. Domestic interested parties state that they have participated in the investigation, all five administrative reviews, and all related appeals (see October 1, 1999, Substantive Response of domestic interested parties at 4). Likewise, Stelco states that it was a respondent party in the original investigation, and has participated in each subsequent administrative review (see October 1, 1999, Substantive Response of Stelco at 3). On November 10, 1999, we received comments from Stelco on the adequacy and appropriateness of an expedited sunset review concerning the subject order. As discussed more fully below, we have reconsidered our original adequacy determination and, as a result, have determined to conduct a full review. In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). This review concerns a transition order within the meaning of section 751(c)(6)(ii) of the Act. Accordingly, on December 22, 1999, the Department determined that the sunset review of cut-to- length carbon steel flat plate from Canada is extraordinarily complicated, and extended the time limit for completion of the final results of this review until not later than March 29, 2000, in accordance with section 751(c)(5)(B) of the Act.(17) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department is conducting this review to determine whether revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping. Section 752(c) of the Act provides that, in making this determination, the Department shall consider the weighted- average dumping margins determined in the investigation and subsequent reviews, and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping order. In addition, section 752(c)(3) of the Act provides that the Department shall provide to the Commission the magnitude of the margin of dumping likely to prevail if the order is revoked. Below we address the comments and rebuttals of the interested parties. 1. Adequacy Determination Interested Party Comments: Stelco argues in its November 10, 1999, comments on adequacy that, in finding Stelco's response to be inadequate because Stelco accounts for less than fifty percent of Canadian exports into the United States, the Department has ignored the unique circumstances of this antidumping duty order. Stelco contends that, because it will be the only major Canadian producer remaining subject to the antidumping duty order, the Department's decision to conduct an expedited review (1) is contrary to its stated approach, (2) is inconsistent with prior Department practice, (3) fails to adhere to the purpose of the statute, and (4) violates U.S. obligations under the World Trade Organization ("WTO") antidumping agreement and GATT 1994 (see November 10, 1999, Comments on Adequacy of Stelco at 2). First, Stelco argues that unique circumstances exist in this review that warrant the Department's flexibility when applying its fifty percent guideline; namely, the fact that Stelco is the only remaining company (of three Canadian companies, Stelco, Algoma, IPSCO, that account for most of the carbon steel plate in Canada) that has not been excluded from the order. Id. at 4. Stelco notes that (1) IPSCO was excluded from the order when its margin from the original investigation was found to be de minimis; (2) the Department determined to revoke the order with respect to Algoma as a result of three consecutive zero or de minimis margins and a finding that Algoma is not likely to dump in the future; and (3) the Department issued a preliminary determination in an administrative review stating that the Department intends to revoke the order with respect to MRM. Id. at 5. In addition, Stelco argues that the fact that the Department's ruling on adequacy is based on MRM's failure to submit a substantive response in this review completely ignores the commercial reality that MRM had no incentive to participate in this review. According to Stelco, MRM was technically subject to the antidumping duty order as of October 1999, and the antidumping duty order was expected to be revoked in December 1999. Id. at 6. Thus, the Department's decision to conduct an expedited review penalizes Stelco for the fact that no other Canadian producer has an incentive to participate in the Department's sunset review. Id. at 7. Stelco cites a previous sunset case, Tapered Roller Bearings from the PRC, in which the Department reversed its initial determination to conduct an expedited review. Id. Stelco states that the Department noted, in this prior review, that its original calculations underestimated the respondents' imports of subject merchandise because the value of total imports included imports from a company for which the order was revoked. Further, although imports from the respondents accounted for less than fifty percent over the five years prior to initiation of the sunset review, respondents accounted for more that fifty percent in the most recent year. Id. Thus, Stelco asserts, in the present case, the Department must similarly recognize the unique circumstances that require it to apply the fifty percent threshold as a guideline, not a rule. Id. In addition, Stelco asserts that the Department's decision to base its adequacy determination solely on what happened in the past is inconsistent with the Department's obligations under the sunset statute to adopt a forward-looking analysis. Stelco argues that the statute does not require the Department to apply the fifty percent threshold in its adequacy analysis, nor does it mandate that the Department examine the five calendar years preceding initiation. Id. at 10. Instead, Stelco continues, the fifty percent threshold and the five-year window are analytical tools that the Department "normally" uses for administrative convenience and, therefore, the Department must consider its own prior determinations involving other producers and the effects of such decisions on the case. Id. Stelco argues that, although the Department's regulation appears to rely on the SAA for imposing its fifty percent threshold, the SAA is not law and does not supplant the statute. Instead, the SAA is merely a form of legislative history, which is relevant only when a "question arises" concerning the URAA, and even then should be used only for guidance, not binding directives. Id. at 11. Second, the SAA itself does not require the Department to adopt any presumptions for its adequacy determination; it merely requires the Department to consider the proportion of parties that respond. Id. Finally, the SAA requires the Department to examine the parties potential share of the market in a forward-looking analysis. Id. Further, Stelco argues that the Department's determination to conduct an expedited review in this case, violates WTO Trade Rules. Specifically, Stelco asserts that, under Article 11.3 of the WTO Antidumping Agreement, the Department is required to undertake a forward and reasoned analysis to determine the likely recurrence or continuance of dumping, and not apply rules rigidly to reach pre- determined conclusions. Id. at 12. Stelco contends that, given the mandate of the WTO Antidumping Agreement and the sunset review statute to conduct a prospective analysis, and the mandate in the Department's own regulation to make adequacy determinations on a case- by-case basis, the Department must recognize the fact that Stelco will be the sole producer subject to the order within a matter of mere weeks. Id. at 13. As such, and because Stelco filed a complete substantive response, the Department should conduct a full sunset review in this case. Id. Finally, Stelco asserts that section 351.218 of the Department's regulations also violates the national treatment principle of GATT 1994 because it applies different standards to respondent interested parties than it does to domestic interested parties; the regulations make clear that, in an expedited sunset review, the Department's determination will be against the side that did not express sufficient interest. Id. at 15. Specifically, the Department will not find sufficient interest unless the Department receives complete substantive responses from respondent interested parties accounting for more than fifty percent of total exports over the five calendar years preceding initiation of the sunset review. In contrast, there is no volume threshold requirement for domestic interested parties. Thus, according to Stelco, the Department is according less favorable treatment to importers and exporters and thereby violating the national treatment obligation of GATT 1994. Id. at 16. Department's Position: The Department agrees with Stelco that a full review is appropriate in this case. Consistent with our prior practice (i.e., our reexamination of our adequacy determination in the review of Tapered Roller Bearings from the PRC), we have attempted to reexamine the percentage of imports accounted for by Stelco. However, in light of the fact that IPSCO was excluded from the order and further, that the order was recently revoked with respect to Algoma, reliable statistics are not available with respect to the total volume or value of imports from producers/exporters subject to the order. Therefore, we are unable to determine with any degree of confidence, the percentage of imports accounted for by respondent interested parties. We agree with Stelco that section 351.218(e)(1)(ii) of the Sunset Regulations merely provides a threshold that the Department normally will apply for purposes of determining adequacy; it does not provide an absolute. Therefore, given that the order does not apply to imports from IPSCO and Algoma, and we have no reliable statistics on the volume and/or value of imports of subject merchandise, we determine that Stelco's participation in the instant review is sufficient to warrant a full review in this case. 2. Likelihood of Continuation or Recurrence of Dumping Interested Party Comments In their substantive response of October 1, 1999, domestic interested parties assert that revocation of the subject order is likely to lead to continuation or recurrence of dumping. They state that the record of this proceeding demonstrates that dumping continued at above de minimis levels after the order was issued, and import volumes have declined significantly in recent review periods (see October 1, 1999, Substantive Response of domestic interested parties at 4). Domestic interested parties note that in the 1993/94 administrative review, Stelco had a margin of 0.92 percent and Algoma had a margin of 1.82 percent, and in the 1996/97 review, Forsyth had a margin of 68.70 percent. Therefore, they assert, the record shows that dumping has continued at above de minimis levels after the imposition of the order, and satisfies the Department's guidelines that the order should not be revoked (see October 1, 1999, Substantive Response of domestic interested parties at 10). In addition, domestic interested parties assert that imports of Canadian cut-to-length carbon steel plate remain below sixty percent of their pre-order levels. Id. at 11. Further, they state that Canadian producers' share of the U.S. market for cut-to-length carbon steel plate has dropped from 2.55 percent immediately prior to the order, to only 1.36 percent for the past year. Id. at 13. Domestic interested parties state that this case, therefore, satisfies the Department's guidelines and the order should not be revoked. Id. In its substantive response of October 1, 1999, Stelco asserts that revocation of the subject order would not likely lead to a recurrence of material injury or of dumping (see October 1, 1999, Substantive Response of Stelco at 13). Stelco contends that, for the past four years, all Canadian producers, itself included, have been able to sell cut-to-length plate to the United States at prices above normal value. Id. at 14. Stelco states that, except for the negligible margins for two companies (0.92 percent and 1.82 percent) found in the 1993/94 review, no Canadian producer of subject merchandise has been found to have engaged in dumping since the imposition of the original order, not withstanding that the Department has conducted an administrative review in every single year. Id. at 13-14. Stelco also asserts that the import volumes from Canada following the imposition of the order have been at a level comparable to the volume of imports before the order was imposed. Id. at 14. Stelco states that, on an aggregate level, total Canadian shipments to the United States have been increasing every year since 1994, and 1998 shipments are virtually equal to shipments in 1991, the year preceding the initiation of the dumping investigation. Id. Stelco adds that a similar conclusion can be made with respect to its shipments. Id. Thus, Stelco contends that the demonstrated ability of all Canadian producers to ship to the United States commercially significant quantities of subject merchandise without dumping establishes, under the Departments own guidelines, a presumption that revocation of the order will not likely lead to recurrence of dumping, and the Department should revoke the order on this basis. Id. at 15. Stelco argues that, even if the Department determines that there should not be a presumption in favor of revocation, the Department should not conclude that a presumption exists that dumping is likely to recur in the future. First, Stelco states, there was virtually no dumping after the order was issued, and total import volumes increased in every year since 1994, with 1998 volumes essentially equal to import volumes before the investigation was initiated. Id. at 16. Second, Stelco contends that its individual shipments have been consistent as well, with Stelco's 1996 shipment volume about equal to its volume in 1991. Id. Further, Stelco asserts that its decrease in shipments in 1996 is due to a major overhaul and modernization of Stelco's plate mill; and dramatically reduced capacity. Therefore, Stelco contends, the inability to use volume and margin data to establish a presumption for either outcome constitutes sufficient good cause to examine other economic factors. Id. at 16-17. Stelco asserts that the most important factor in the Department's analysis is the fact that virtually all Canadian producers are no longer subject to the antidumping duty order on cut-to-length plate. Id. at 17. Stelco notes again that, of the four bona fide producers of cut-to-length plate in Canada, (1) IPSCO was excluded from the order during the original investigation (2) in January 1999, the Department issued a final determination that revoked the order with respect to Algoma, as a result of three consecutive zero or de minimis margins and the Department's finding that Algoma is not likely to dump in the future; and (3) in August 1999, the Department issued a preliminary determination stating the Department's intent to revoke the order with respect to MRM.(18) Thus, only one producer, Stelco, is still subject to the antidumping duty order. Stelco contends that, given that it has not shipped at dumped prices for more than four years, Stelco also would have been excluded from the order but for the fact that during one of the review periods Stelco's production capacity constraints and strong home market demand did not allow the company to ship cut-to-length plate to the United States at a volume that satisfied the Department's definition of "commercial quantities" (see October 1, 1999, Substantive Response of Stelco at 18). Thus, Stelco asserts, these facts provide conclusive evidence that Canadian producers are able to participate in the U.S. market without engaging in dumping. Id. Stelco also notes that demand in Canada, Stelco's home (and most important) market, has increased steadily over the past five years, making it unlikely that Stelco will be able (or need) to ship large volumes to the United States. Id. at 19. In fact, Stelco continues, Canadian demand for subject carbon steel plate has increased 56.7 percent over the past five years, causing Stelco to concentrate its cut-to-length production efforts on servicing its long-established home market customers and supplying its long-standing customers. Id. at 20-21. Stelco contends that it did not increase sales to the United States in 1998 when both U.S. pricing and a weakening Canadian dollar presented an opportunity, demonstrating that Stelco was just too busy servicing its home market customers. Id. at 21. Stelco also notes that it reduced its output of subject merchandise in 1997 and 1998 because it was in the midst of a multi-million dollar, comprehensive modernization and upgrade of its plate mill (expected to be fully operational by 2001), whereby Stelco will be able to produce new higher value-added products and participate in growing segments of the Canadian plate markets. Id. at 22. Stelco provides a description of the new products that its plate mill will be able to manufacture. Stelco estimates that, once the modernization and upgrade are completed, it will be able to recognize a reduction in per-ton costs for carbon steel plate, shift its focus towards alternative and higher-priced product markets in Canada, and enhance its price flexibility in the Canadian market. Id. at 24. In addition, Stelco notes that on-going U.S. cut-to-length plate antidumping investigations have routed imports from six other countries, lifting prices and eliminating any need for Selco to ship at dumped prices, reinforcing the trend of falling imports from September 1998 through May 1999. Id. at 24. Stelco contends that since the antidumping petition was filed on February 16, steel industry analysts and executives have predicted, and company reports have confirmed, the resulting declines in subject import volumes and the upward pressure on cut-to-length plate prices in light of a growth trend of business activity. Id. at 25. Thus, Stelco asserts, the end result of improving prices (and demand) for cut-to-length plate in the United States is the elimination of any reason Canadian steel companies may have ever had for dumping subject merchandise in the U.S. market. Id. at 28. Finally, Stelco argues that, for several years, the Canadian dollar has been significantly weaker against the U.S. dollar, providing Stelco with an additional margin of safety to avoid dumped sales. Id. at 29. Stelco asserts that the Canadian dollar is likely to continue its stability and in the distant future, it is unlikely that the Canadian dollar will do anything but continue its several-year pattern of general stability. Id. at 29-30. In their rebuttal of October 15, 1999, domestic interested parties reassert that, since the 1993 order, Canadian producers have continued to sell subject merchandise in the United States at LTFV and import volumes of cut-to-length carbon steel plate have fallen significantly, demonstrating that dumping is likely to continue (see October 15, 1999, Rebuttal of domestic interested parties at 2). Domestic interested parties argue that Stelco's claims that margins have declined and imports have remained steady or increased is unsupported by the record, and further, that declining margins alone are not enough to warrant revocation of the order. Rather, the continued existence of above de minimis margins following the order is enough to prevent its revocation, regardless of import level changes. Id. at 5. Domestic interested parties note that, in at least two of the periods for which Stelco had a zero margin, the Department found that the company did not ship subject merchandise in commercial quantities. For instance, Stelco had a zero margin in the 1994/95 review and in the 1997/98 review, however, the Department found that the company did not ship subject merchandise in commercial quantities during these periods. Id. at 6. Moreover, the Department denied revocation in the 1995/96 review and in the 1996/97 review because Stelco had failed to participate meaningfully in the U.S. market in the two periods in question, and because the zero or de minimis margins did not provide any meaningful information on Stelco's normal commercial experience. Id. Further, according to domestic interested parties, the record belies Stelco's claim that import volumes have remained steady or increased. Rather, there is evidence of a dramatic drop in imports of subject merchandise from Canada and a decline in Stelco's market share after the imposition of the order. Id. at 9. Domestic interested parties argue that Stelco fails to show good cause as to why the Department should consider other factors, and that, contrary to Stelco's assertion, the record more than demonstrates a significant decline in imports from the pre-order levels. Id. Thus, the domestic interested parties assert, Stelco fails to meet its burden to show the necessity for consideration of other factors. However, even if the Department were to consider other factors, none of the factors cited by Stelco-alone or in combination- would change the conclusion that dumping is likely to continue or recur. Id. at 10. Domestic interested parties argue that Stelco's assertion that it is the only remaining Canadian producer subject to the order does not change the fact that it was unable to ship in commercial quantities without dumping for at least three out of the five administrative reviews. Id. Moreover, Forsyth had a margin of 68.70 percent in the 1995/96 review. Given that margins have continued and imports have declined, the continuation of the order is clearly necessary even if it will relate primarily to Stelco's shipments. Id. In addition, domestic interested parties note that, with respect to Stelco's overhaul of its plate facility, additional production capacity will make Stelco even more likely to engage in dumping once the overhaul is complete. Id. at 11. Further, with respect to Stelco's reliance on increased demand in Canada, the evidence suggests that, far from increasing, demand in Canada has been weakening and will continue to do so. Id. at 11-12. Thus, a decrease in demand combined with Stelco's recent increase in capacity creates an even greater likelihood that dumping will continue in the future. Id. at 12. In its rebuttal of October 15, 1999, Stelco reasserts that the continued absence of dumping and the continued level of imports from Canada demonstrate that neither Stelco nor any other Canadian producer is likely to sell cut-to-length plate in the United States at less-than-fair value prices. Stelco contends that, contrary to domestic interested parties' claim, dumping has been eliminated and the pre-order volume of imports is equivalent to the post-order volume of imports. Stelco notes that, whereas the Department found margins ranging from 61.88 to 68.7 percent in the original investigation, margins instantly dropped to a range of 0.02 to 1.82 percent in the first administrative review (see October 15, 1999, Rebuttal of Stelco at 3). Stelco also cites the Department's preliminary determination in Brass Sheet and Strip from the Netherlands, whereby the Department found that, although respondent interested parties had shipped at above de minimis levels after the issuance of the order, the absence of dumping in the two most recent review periods was probative of the fact that the respondent could export without dumping. Id. at 3. Stelco notes that the Department's rate for A.J. Forsyth, a re- seller, was very high; however, it was not based on actual company data, but instead on "adverse facts available." Id. Further, the Department had not conducted a review of Forsyth previously, and has not reviewed Forsyth since. According to Stelco, Forsyth is not a producer of subject merchandise, but a small privately-held service center which exports very minimal volumes to the United States. Id. Therefore, Stelco contends, it would be inappropriate for the Department to consider Forsyth in its analysis; instead, the Department should focus on the four bona fide plate producers in Canada-Stelco, IPSCO, MRM, and Algoma-and find that none of the Canadian producers of subject merchandise is now, or has in the past several years, engaged in dumping. Id. at 4. Stelco notes that whereas the Department found in Brass Sheet and Strip from the Netherlands just two review periods without dumping, in the current case, not one Canadian producer of cut-to-length plate has been found to have dumped in the past five years. Id. Moreover, in every review in the past five years in which the Department made a determination based on actual company data, the Department has found that there was no dumping. Id. Stelco also argues that, contrary to the claims of domestic interested parties, imports of Canadian cut-to-length plate have not dropped, but have remained steady or increased. Id. at 5. Moreover, on an aggregate level, Canadian imports of cut-to-length plate have been increasing every year since 1994, and Stelco's shipments, when viewed alone, remained steady until 1996, two years after the issuance of the order. Id. at 6. Stelco notes that the decline in its 1997 and 1998 imports was due solely to a drastic decrease in Stelco's production capacity which resulted from disruptions caused by the comprehensive overhaul of its plate mill. Id. Finally, Stelco contends that, even if the Department determines that the above presumption does not apply, the Department should still examine the other factors which show that future dumping is not likely to occur. Id. Stelco notes the various factors regarding the likelihood of future dumping, including: (1) the fact that there is only one remaining Canadian producer subject to the antidumping order; (2) increasing demand in the Canadian market for plate products; (3) modernization of Stelco's plate mill will allow Stelco to focus on Canadian demand for higher value-added products; (4) reduced competition for plate in the U.S. market due to ongoing plate dumping investigations; and (5) an attractive U.S.-Canadian currency exchange rate, each of which make dumping by Canadian producers more unlikely. Id. at 7. Department's Position Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act ("URAA"), specifically the Statement of Administrative Action ("the SAA"), H.R. Doc. No. 103- 316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the bases for likelihood determinations. In its Sunset Policy Bulletin, the Department indicated that determinations of likelihood will be made on an order-wide basis (see section II.A.2). In addition, the Department indicated that, normally, it will determine that revocation of an antidumping order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly (see section II.A.3). As discussed in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, if companies continue dumping with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed. Domestic interested parties are correct that there have been above de minimis margins throughout the history of the order, including 0.92 for Stelco in the 1993/94 review and 68.70 percent for Forsyth in the 1996/97 review. We do not agree with the domestic interested parties that Algoma's margin from the first administrative review is probative of likelihood of continuation of dumping given that the Department has already revoked the order with respect to Algoma. Respondent interested parties are correct that the Department assigned a zero or de minimis margin to Stelco in each of the four most recent reviews; however, as noted above, margins continue to exist at above de minimis levels for at least one manufacturer, producer, or exporter. Consistent with section 752(c) of the Act, the Department also considered the volume of imports before and after issuance of the order. According to the import statistics provided by domestic interested parties, imports of subject merchandise remain below sixty percent of their pre-order levels. Stelco asserts that, on the contrary, 1998 Canadian shipments to the United States are virtually equal to shipments in 1991, the year before the initiation of the investigation (see October 1, 1999, Substantive Response of Stelco at 14). While these sets of statistics differ with respect to changes from their pre-order levels, they share a pattern, as seen in our IM145 reports statistics, of average increases in imports from 1995 through 1999. We also considered the company-specific exports of subject merchandise provided by Stelco. The statistics do not show a pattern of consistent increases, or a return to pre-order volumes. We are not persuaded by respondent interested parties' principal argument that, because Stelco is still subject to the order and has not dumped for more than four years, we can conclude that Canadian producers will participate in the U.S. market without engaging in dumping in the future. We find that the existence of dumping margins after the issuance of the order is highly probative of the likelihood of continuation or recurrence of dumping. Therefore have not considered other factors in this case. Given that dumping continued after the issuance of the order, and imports continued in 1998 at below pre-order levels, we determine that dumping is likely to continue if the order were revoked. 3. Magnitude of the Margin Likely to Prevail: Interested Party Comments: In their substantive response, domestic interested parties assert that the Department should report to the Commission the final margins of 68.70 percent for Stelco, and 61.88 percent for "all others" from the investigation because these are the only calculated rates that reflect the behavior of the exporters without the discipline of the order in place (see October 1, 1999, Substantive Response of domestic interested parties at 14). In its substantive response, Stelco contends that the margin from the original investigation is, by far, the least probative of the magnitude of the dumping margin, if any, that would prevail on Stelco sales if the order were revoked (see October 1, 1999, Substantive Response of Stelco at 5-6). Stelco asserts that the original margin is based on sales data that is more than six years old, and therefore, is entirely unrepresentative of any margins that might exist in the year 2000 and beyond. Id. at 6. Stelco states that the sheer age of the original investigation margin coupled with dramatically altered market conditions, make the original margin inherently unreliable. Id. Stelco contends that its de minimis margins of zero percent to 0.35 percent from period 1994 through 1997 more appropriately reflect the margin like to prevail were the order revoked. Id. During this period, Stelco asserts that it shipped quantities virtually identical to its volume of shipments in 1991, the year preceding the investigation. Further, Stelco notes its established history of ensuring that its U.S. sales are not made at dumped prices. For instance, Stelco has developed a computer-driven history of prices and costs that is used to ensure that Stelco's U.S. sales are not made at dumped prices. Id. Thus, Stelco asserts, the Department should report to the Commission a de minimis margin for Stelco. In their rebuttal, domestic interested parties assert that Stelco's analysis is flawed with respect to the magnitude of the margin on two points. Domestic interested parties reassert that the margin from the investigation is the only rate that reflects Stelco's behavior without the discipline of an order, and contend that a more recently calculated margin instead reflects Stelco's behavior as the company has modified it in response to the antidumping duty order. Id. at 13. According to domestic interested parties, the data shows that Stelco's import volumes declined dramatically after the order. Further, the fact that the margin is more than six years old is not relevant, as argued by Stelco, to the margin likely to prevail. The Department has reported margins likely to prevail in past sunset reviews that were from investigations much older than the present one, and the margin of 68.70 percent from the investigation remains the only calculated rate that reflects the behavior of exporters without the discipline of the an order. Id. at 13. In its rebuttal, Stelco urges the Department to reject domestic interested parties' assertion, and instead, determine that the margins found during the original investigation are inflated and inappropriate in this situation (see October 15, 1999, Rebuttal of Stelco at 8). First, Stelco asserts that those margins are highly unreliable because they were based on best-information available ("BIA"), which necessarily distorts the margin. Id. Stelco contends that BIA is not based on actual sales data and, therefore, is not probative of past and future behavior. Additionally, the Department has not relied on BIA for Stelco in any one of the administrative reviews since the original investigation. Id. Second, Stelco argues that there is no question that the dumping margins in this case have "declined" if not completely disappeared. Id. at 9. Stelco notes that no Canadian producer has been found to have dumped in the past five years, import volumes today are the same as they were in the year before the investigation, and volumes have increased steadily over the past several years. Id. Finally, Stelco reasserts that the Department should select a de minimis margin to provide to the Commission for Stelco based on the fact that its margins have remained de minimis since the 1994/95 review, and its quantities of shipments in 1995/96 were virtually identical to its shipments in 1991, the year preceding the investigation. Id. Thus, should the Department determine that Stelco is likely to resume dumping if the order were revoked, the magnitude of dumping is likely to be de minimis. Id. Department's Position In the Sunset Policy Bulletin, the Department stated that it will normally provide to the Commission the margin that was determined in the final determination in the original investigation. Further, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the "all others" rate from the investigation (see section II.B.1 of the Sunset Policy Bulletin). Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty absorption determinations (see sections II.B.2 and 3 of the Sunset Policy Bulletin). Although Stelco's margins in subsequent administrative reviews have been significantly lower than the 68.70 percent from the original investigation, we have also considered the company's relative market share. The SAA at 889-90, and the House Report at 63, state that declining or no dumping margins accompanied by steady or increasing imports may indicate that foreign companies do not need to dump to maintain market share in the United States. Because Stelco's relative market share has been insignificant after the issuance of the order, we do not find the lower margins to be probative of Stelco's future behavior with respect to the likelihood of dumping. In addition, because Stelco's shipments do not reflect a steady or increasing pattern of imports, as seen in the total volume of imports from Canada, we do not believe that a more recent margin is appropriate. Therefore, the Department will provide to the Commission the rate from the original investigation for Stelco. As noted above, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on an "all others" rate from the investigation. The Department notes that, contrary to Stelco's prediction in its substantive response, the order was not revoked with respect to MRM. The Department found, in the February 24, 2000, final results of its 1997/98 review that, in light of the Department's pending anti-circumvention investigation of MRM, and given the fact that its alleged circumvention of the order remains unresolved, MRM had not satisfied the requirements for revocation.(19) Because MRM did not participate in the sunset review, and was not a respondent interested party in the original investigation, we have no information with which to evaluate whether MRM chose to increase dumping in order to maintain or increase market share. As a result, we will not report a separate rate for MRM. As such, the Department will report to the Commission the original margin from the final determination as the magnitude of the margin likely to prevail for "all others" if the order were revoked, as contained in the Final Results of Review section of this decision memo. Final Results of Review We determine that revocation of the antidumping duty order on cut-to- length carbon steel plate from Canada would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: ___________________________________________________________ Manufacturer/exporters Margin (percent) ___________________________________________________________ Stelco, Inc. 68.70 All Others 61.88 ___________________________________________________________ Recommendation: Based on our analysis of the comments received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the Preliminary Results of Review in the Federal Register. AGREE____ DISAGREE____ ___________________________ Joseph A. Spetrini Acting Assistant Secretary for Import Administration _____________________ (Date) ___________________________________________________________ footnotes: 1. See Antidumping Duty Orders: Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada, 58 FR 44162 (August 19, 1993). 2. See Amended Final Determinations of Sales at Less Than Fair Value and Antidumping Orders: Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada, 60 FR 49582 (September 26, 1995). 3. See Certain Corrosion-Resistant Carbon Steel flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada; Final Results of Antidumping Administrative Reviews, 61 FR 13815 (March 28, 1996). 4. See Certain Corrosion-Resistant Carbon Steel Flat Products from Canada and Certain Cut-to-Length Carbon Steel Plate from Canada; Final Results of Antidumping Duty Administrative Reviews, 62 FR 18448 (August 15, 1997). 5. See Certain Corrosion-Resistant Carbon Steel Flat Products from Canada and Certain Cut-to-Length Carbon Steel Plate from Canada; Final Results of Antidumping Duty Administrative Reviews, 63 FR 12725 (March 16, 1998). 6. See Certain Corrosion-Resistant Carbon Steel Flat Products from Canada and Certain Cut-to-Length Carbon Steel Plate from Canada: Amended Final Results of Antidumping Duty Administrative Review, 63 FR 27258 (May 18, 1998). 7. See Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews and Determination to Revoke in Part, 64 FR 2173 (January 13, 1999). 8. See Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews and Determination Not to Revoke in Part, 65 FR 9243 (February 24, 2000). 9. See Notice of Scope Rulings, 63 FR 29179 (May 28, 1998). 10. See Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Changed Circumstances Antidumping Duty Administrative Review, and Revocation in Part of Antidumping Duty Order, 61 FR 7471 (February 28, 1996). 11. See Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Changed Circumstances Antidumping Duty Administrative Review, and Revocation in Part of Antidumping Duty Order, 64 FR 7167 (February 12, 1999). 12. See Cut-to-Length Carbon Steel Plate from Canada; Initiation of Anticircumvention Inquiry on Antidumping Duty Order, 63 FR 29179 (May 28, 1998). 13. Co-Steel Lasco and Gerdau MRM Steel v. United States, Court No. 98-08-02684 (Ridgeway, J.). 14. See September 24, 1999, Request for an Extension to File Rebuttal Comments in the Sunset Reviews of Antidumping and Countervailing Duty Orders: A-602-803; A-351-817; C-351-818, A-122- 822, A-122-823, A-405-802, A-588-826, A-421-804, A-455-802, A-485- 803, C-401-401, C-401-804, C-401-805, from Valerie S. Schindler, Skadden, Arps, Slate, Meagher & Flom LLP, to Jeffrey A. May, Office of Policy. 15. See September 30, 1999, Letter from Jeffrey A. May, Director, Office of Policy to Valerie S. Schindler, Skadden, Arps, Slate, Meagher & Flom LLP. 16. See October 20, 1999, Memorandum for Jeffrey A. May, Re: Certain Cut-to-Length Carbon Steel Flat Plate from Canada: Adequacy of Respondent Interested Party Response to the Notice of Initiation. 17. See Extension of Time Limit for Final Results of Expedited Five- Year Reviews, 64 FR 71726 (December 22, 1999). 18. The Department notes, that subsequent to the October 1, 1999, Substantive Response of Stelco, the Department determined that MRM had not satisfied the requirements for revocation given that the issue of MRM's alleged circumvention of the order remains unresolved (see Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews, and Determination Not to Revoke in Part, 65 FR 9243, 9245 (February 24, 2000). 19. See Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews, and Determination Not to Revoke in Part, 65 FR 9243, 9245 (February 24, 2000).