[Federal Register: May 29, 2002 (Volume 67, Number 103)]
[Notices]
[Page 37388-37391]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29my02-36]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-877]
Notice of Initiation of Antidumping Duty Investigation: Lawn and
Garden Steel Fence Posts From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of an antidumping duty investigation.
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EFFECTIVE DATE: May 29, 2002.
FOR FURTHER INFORMATION CONTACT: David Salkeld at (202) 482-1168; AD/
CVD Enforcement, Office VI, Group II, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230.
Initiation of Investigation
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930, (``the Act''),
by the Uruguay Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all citations to the Department of Commerce's
(``the Department's'') regulations are references to the provisions
codified at 19 CFR Part 351 (2001).
The Petition
On May 1, 2002, the Department received a petition filed in proper
form by Steel City Corporation (``the petitioner''). On May 9, 2002, we
sent the petitioner a letter with questions regarding the petition. The
Department received information supplementing the petition on May 14,
2002 and May 21, 2002.
In accordance with section 732(b) of the Act, the petitioner
alleges that imports of lawn and garden steel fence posts (``steel
fence posts'') from the People's Republic of China (``PRC'') are being,
or are likely to be, sold in the United States at less than fair value
within the meaning of section 731 of the Act, and that such imports are
materially injuring, or are threatening to materially injure, an
industry in the United States.
The Department finds that the petitioner filed this petition on
behalf of the domestic industry because it is an interested party, as
defined in section 771(9)(C) of the Act and has demonstrated sufficient
industry support with respect to the antidumping investigation that it
is requesting the Department to initiate. (See the Determination of
Industry Support for the Petition section below.)
Scope of Investigation
The scope of the investigation includes all lawn and garden steel
fence posts, in whatever form, shape, or size, that are produced in the
PRC. The fence posts included within the scope of this investigation
weigh up to 1 pound per foot and are made of steel and/or any other
metal. Imports of these products are classified under the following
categories: fence posts, studded with corrugations, knobs, studs,
notches or similar protrusions with or without anchor posts. These
posts are normally ``U'' shaped or ``hat'' shaped or any other similar
shape excluding round or square tubing or pipes.
These posts are normally made in two different classes, light and
heavy duty. Light duty lawn and garden posts are normally made of 14
gauge steel (0.068 inches-0.082 inches thick), 1.75 inches wide, in 3,
4, 5, or 6 foot lengths. These posts normally weigh approximately 0.45
pounds per foot and are packaged in mini-bundles of 10 posts and master
bundles of 400 posts. Heavy duty lawn and garden fence posts are
normally made of 13 gauge steel (0.082 inches-0.095 inches thick), 3
inches wide, in 5, 6, 7, and 8 foot lengths. Heavy duty posts normally
weigh approximately 0.90 pounds per foot and are packaged in mini-
bundles of 5 and master bundles of 200. Both light duty and heavy duty
posts are included within the scope of the investigation.
Imports of these products are classified under the following
Harmonized Tariff Schedules of the United States (HTSUS) subheading:
7326.90.85.35. Fence posts classified under subheading 7308.90 are also
included within the scope of the investigation if the fence posts are
made of steel and/or metal.
Specifically excluded from the scope are ``tee'' posts, farm posts,
and sign posts, provided that the posts weigh over 1 pound per foot.\1\
Although the HTSUS subheadings are provided for convenience and U.S.
Customs Service (``Customs'') purposes, the written description of the
merchandise under investigation is dispositive.
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\1\ Tee posts are made by rolling red hot steel into a ``T''
shape. These posts do not have tabs or holes to help secure fencing
to them and have primarily farm and industrial uses.
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During our review of the petition, we discussed the scope with the
petitioner
[[Page 37389]]
to ensure that the scope in the petition accurately reflects the
product for which the domestic industry is seeking relief. Moreover, as
discussed in the preamble to the Department's regulations (Antidumping
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19,
1997)), we are setting aside a period for parties to raise issues
regarding product coverage. The Department encourages all parties to
submit such comments within 20 days of publication of this notice.
Comments should be addressed to Import Administration's Central Records
Unit at Room 1870, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230. The period for scope
comments is intended to provide the Department with ample opportunity
to consider all comments and consult with parties prior to the issuance
of the preliminary determination.
Determination of Industry Support for the Petition
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, when determining
the degree of industry support, the statute directs the Department to
look to producers and workers who produce the domestic like product.
The International Trade Commission (``ITC''), which is responsible for
determining whether ``the domestic industry'' has been injured, must
also determine what constitutes a domestic like product in order to
define the industry. While both the Department and the ITC must apply
the same statutory definition regarding the domestic like product
(section 771(10) of the Act), they do so for different purposes and
pursuant to separate and distinct authority. In addition, the
Department's determination is subject to limitations of time and
information. Although this may result in different definitions of the
like product, such differences do not render the decision of either
agency contrary to the law.\2\
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\2\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass from Japan: Final Determination; Rescission of
Investigation and Partial Dismissal of Petition, 56 Fr 32376, 32380-
81 (July 16, 1991).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition. Moreover, the petitioner does not offer a definition of
domestic like product distinct from the scope of the investigation.
The petition covers lawn and garden steel fence posts as defined in
the Scope of Investigation section, above, a single class or kind of
merchandise. The Department has no basis on the record to find the
petitioner's definition of the domestic like product to be inaccurate.
The Department, therefore, has adopted the domestic like product
definition set forth in the petition. However, the Department will take
into account any comments submitted by parties in connection with this
issue during the course of the proceeding, and revisit the issue, if
appropriate. In order to estimate production for the domestic industry
as defined for purposes of this case, the Department has relied on the
petition. The petition contained the most recent production and
shipment data (by volume) of petitioner available, covering the period
February 1, 2001 to January 31, 2002, which is petitioner's fiscal
year. See Initiation Checklist.
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (1) at least
25 percent of the total production of the domestic like product; and
(2) more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the petition.
We examined the accuracy of information contained in the petition,
in accordance with section 732(c)(1) of the Act, by gathering
information through Department research. For example, we procured a
list of potential domestic producers of steel fence posts from the
International Trade Commission and contacted those companies to check
petitioner's claim that it was the sole producer of subject merchandise
in the United States. We found no information that called into question
the accuracy of information contained in the petition.
Information contained in the petition and its supplements
demonstrate that the domestic producers or workers who support the
petition account for over 50 percent of total production of the
domestic like product. Therefore, the domestic producers or workers who
support the petition account for at least 25 percent of the total
production of the domestic like product, and the requirements of
section 732(c)(4)(A)(i) are met. See Initiation Checklist at Attachment
I. Furthermore, because the Department received no domestic opposition
to the petition, the domestic producers or workers who support the
petition account for more than 50 percent of the production of the
domestic like product produced by that portion of the industry
expressing support for or opposition to the petition. See Initiation
Checklist. Thus, the requirement of section 732(c)(4)(A)(ii) is met.
Accordingly, the Department determines that the petition was filed
on behalf of the domestic industry within the meaning of section
732(b)(1) of the Act.
Period of Investigation
The anticipated period of investigation is October 1, 2001, through
March 31, 2002.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which the Department has based its decision to
initiate this investigation. The sources of data for the deductions and
adjustments relating to home market and U.S. price are detailed in the
Initiation Checklist.
The Department has analyzed the information in the petition and
considers the country-wide import statistics for the anticipated POI
and pricing information used to calculate the estimated margin to be
sufficient for purposes of initiation. Based on the information
submitted in the petition, adjusted where appropriate, we are
initiating this investigation, as discussed below and in the Initiation
Checklist. Should the need arise to use any of this information as
facts available under section 776 of the Act in our preliminary or
final determination, we will re-examine the information and may revise
the margin calculation, if appropriate.
Export Price
The petitioner based export prices on actual prices of the product
offered by a U.S. importer and/or distributor. The petition
demonstrates that these prices are on a packed and delivered basis.
Petitioner calculated a net price by deducting from the price movement
expenses and a U.S. distributor markup. Movement expenses include costs
for duties and fees, unloading and handling fees, foreign brokerage and
handling, foreign inland freight, repacking costs, U.S. inland freight
and ocean freight. To derive the movement expenses, petitioner used the
lowest of numerous
[[Page 37390]]
price quotes from several freight companies for the costs to deliver a
40-foot container of fence posts from Youngstown, Ohio to China on
March 20, 2002. See Initiation Checklist.
Normal Value
The petitioner asserted that the PRC is a nonmarket economy country
(``NME'') within the meaning of section 771(18) of the Act. In previous
investigations, the Department has determined that the PRC is an NME.
See, e.g., Certain Hot-Rolled Carbon Steel Flat Products from the
People's Republic of China; Notice of Preliminary Results of
Antidumping Duty Administrative Review, 66 FR 22183 (May 31, 2001);
Steel Wire Rope from the People's Republic of China; Notice of Final
Determination of Sales at Less Than Fair Value, 66 FR 12759 (February
28, 2001). In accordance with section 771(18)(C)(i) of the Act, the
presumption of NME status remains in effect until revoked by the
Department. The presumption of NME status for the PRC has not been
revoked by the Department and, therefore, remains in effect for
purposes of the initiation of this investigation. Accordingly, the
normal value of the product appropriately is based on the producer's
factors of production valued in a surrogate market economy country in
accordance with section 773(c) of the Act.
In the course of this investigation, all parties will have the
opportunity to provide relevant information related to the issues of
the PRC's NME status and the granting of separate rates to individual
exporters. See, e.g., Final Determination of Sales at Less Than Fair
Value: Silicon Carbide from the People's Republic of China, 59 FR 22585
(May 2, 1994).
For the normal value calculation, the petitioner based the factors
of production, as defined by section 773(c)(3) of the Act, on the
quantities of inputs it used to produce steel fence posts during
calendar year (``CY'') 2001. The petitioner used the actual usage rates
of a U.S. production facility in accordance with 19 CFR
351.202(b)(7)(B) because information on actual usage rates of
representative Chinese steel fence posts producers is not reasonably
available to the petitioner. The petitioner used its own data because
it claimed it is the only steel fence posts manufacturer in the United
States.
The petitioner asserted that India is the most appropriate
surrogate country for the PRC, claiming that India is: (1) A market
economy; (2) a significant producer of comparable merchandise; and (3)
at a level of economic development comparable to the PRC in terms of
per capita gross national product. Based on the information provided by
the petitioner, we believe that the petitioner's use of India as a
surrogate country is appropriate for purposes of initiating this
investigation.
In accordance with section 773(c)(4) of the Act, the petitioner
valued factors of production, where possible, on reasonably available,
public surrogate country data. Specifically, the factor cost for steel
was based on the public version of an Indian price quote from a market
research report attached to the September 28, 2001, Petition for the
Imposition of Antidumping Duties: Certain Cold-Rolled Carbon Steel Flat
Products from India. See the Initiation Checklist.
Unit energy costs were obtained for India from public data from the
Energy Information Administration, National Energy Information Center,
Electricity Prices for Industry, 1994-1999 for electricity and natural
gas as this was the best reasonably available public data the
petitioner could find. The cost of paint was based on petitioner's own
costs because the petitioner was unable to find publically available
Indian data for this factor of production. Labor was valued using the
regression-based wage rate for China provided by the Department, in
accordance with 19 CFR 351.408(c)(3).
The factory overhead rate, selling, general & administrative
expenses (``SG&A'') rate, and profit rate, were based on the average
respective rates derived from a sample of 1,914 public limited
companies in India that were reported in the June 2001 Reserve Bank of
India Bulletin. The petitioner included packing costs based on its own
costs in its normal value calculation as best information available.
Based on the information provided by the petitioner, we believe
that the petitioner's factors of production methodology represents
information reasonably available to the petitioner and is appropriate
for purposes of initiating this investigation.
The estimated dumping margins, based on a comparison between export
price and normal value, range from 51 to 89 percent. See Initiation
Checklist.
Fair Value Comparisons
The Department has examined the adequacy and accuracy of the
information the petitioner used in its calculations of export prices
and normal value and has found that it represents information
reasonably available to the petitioner supporting the allegation of
dumping. Based on the data provided by the petitioner, there is reason
to believe that imports of lawn and garden steel fence posts from the
PRC are being, or are likely to be, sold at less than fair value.
Allegations and Evidence of Material Injury and Causation
The petitioner alleges that the U.S. industry producing the
domestic like product is being materially injured, or is threatened
with material injury, by reason of the imports of the subject
merchandise sold at less than normal value. The petitioner contends
that the industry's injured condition is evident in the decline of U.S.
producers' output, sales, capacity, profits, productivity, and capacity
utilization, as well as negative effects on cash flow, inventories,
employment, wages, and growth. We have examined the accuracy and
adequacy of the evidence provided in the petition and have determined
that the allegations of injury and causation are supported by relevant
evidence including U.S. Customs import data, and lost sales, and
pricing information, and that the petition contains information
reasonably available to the petitioner (see Initiation Checklist at
Attachment II).
Initiation of Antidumping Investigation
Based upon our examination of the petition on lawn and garden steel
fence posts from the PRC and the petitioner's responses to our
supplemental questionnaire clarifying the petition, we have found that
the petition meets the requirements of section 732 of the Act. See
Initiation Checklist. Therefore, we are initiating an antidumping duty
investigation to determine whether imports of lawn and garden steel
fence posts from the PRC are being, or are likely to be, sold in the
United States at less than fair value. Unless this deadline is
postponed, we will make our preliminary determination no later than 140
days after the date of this initiation. See ``Case Calendar'' section
of the Initiation Checklist.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of the petition has been provided to the representatives
of the government of the PRC. We will attempt to provide a copy of the
public version of the petition to each exporter named in the petition,
as appropriate.
International Trade Commission Notification
We have notified the ITC of our initiation, as required by section
732(d) of the Act.
[[Page 37391]]
Preliminary Determination by the ITC
The ITC will determine, no later than June 17, 2002, whether there
is a reasonable indication that imports of steel fence posts from the
PRC are causing material injury, or threatening to cause material
injury, to a U.S. industry. A negative ITC determination will result in
the investigation being terminated; otherwise, this investigation will
proceed according to statutory and regulatory time limits.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: May 21, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-13392 Filed 5-28-02; 8:45 am]
BILLING CODE 3510-DS-P