[Federal Register: October 4, 2004 (Volume 69, Number 191)]
[Notices]               
[Page 59204-59206]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04oc04-48]                         

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-841]

 
Initiation of Anti Dumping Duty Investigation: Polyvinyl Alcohol 
From Taiwan

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

EFFECTIVE DATE: October 4, 2004.

FOR FURTHER INFORMATION CONTACT: Susan Lehman or Richard Rimlinger, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-0180 or (202) 482-4477, 
respectively.

SUPPLEMENTARY INFORMATION: 

The Petition

    On September 7, 2004, the Department of Commerce (the Department) 
received a petition on imports of polyvinyl alcohol (PVA) from Taiwan 
filed in proper form by Celanese Chemicals Ltd. (the petitioner). On 
September 9, 2004, and September 15, 2004, the Department issued 
supplemental questionnaires requesting additional information and 
clarification of certain areas of the petition. The Department also 
requested additional information in September 17, 2004, and September 
24, 2004, conference telephone calls with the petitioner. See 
Memorandum from Catherine Cartsos through Mark Ross to the File dated 
September 20, 2004, and Memorandum from Susan Lehman through Mark Ross 
to the File dated September 27, 2004. The petitioner filed supplements 
to the petition on September 13, 2004, September 21, 2004, and 
September 27, 2004.
    On September 23, 2004, E.I. DuPont de Nemours & Co. (DuPont), a 
domestic producer of PVA, upon the request of the Department, filed a 
statement detailing DuPont's total production of PVA for the calendar 
year 2003. On September 24, 2004, DuPont submitted two challenges to 
the petition. On September 27, 2004, Solutia Inc. (Solutia), a domestic 
producer of PVA, submitted a document informing the Department that it 
``neither supports nor opposes the antidumping duty petition'' on PVA 
from Taiwan.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioner alleges that imports of PVA from 
Taiwan 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 and threaten to 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 the petitioner has 
demonstrated sufficient industry support with respect to the 
investigation that the petitioner is requesting the Department to 
initiate (see ``Determination of Industry Support for the Petition'' 
below).

Scope of Investigation

    The merchandise covered by this investigation is PVA. This product 
consists of all PVA hydrolyzed in excess of 80 percent, whether or not 
mixed or diluted with commercial levels of defoamer or boric acid. PVA 
in fiber form is not included in the scope of this investigation. The 
merchandise under investigation is currently classifiable under 
subheading 3905.30.00 of the Harmonized Tariff Schedule of the United 
States (``HTSUS''). Although the HTSUS subheading is provided for 
convenience and customs purposes, the written description of the 
merchandise under investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioner to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the regulations (Antidumping Duties, 
Countervailing Duties, Final Rule, 62 FR 27296, 27323)(May 19, 1997), 
we are setting aside a period for interested parties to raise issues 
regarding product coverage. The Department encourages all interested 
parties to submit such comments within 20 calendar days of

[[Page 59205]]

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 of scope consultations 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 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.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether the petition has the requisite 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 the Department and the 
ITC must apply the same statutory definition regarding the domestic 
like product they do so for different purposes and pursuant to separate 
and distinct authority. See section 771(10) of the Act. In addition, 
the Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
domestic like product, such differences do not render the decision of 
either agency contrary to law.\1\
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    \1\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 
2001), citing Algoma Steel Corp. v. United States, 688 F. Supp. 639, 
642-44 (CIT 1988).
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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 subtitle.'' 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.
    With regard to the definition of domestic like product, the 
petitioner does not offer a definition of domestic like product 
distinct from the scope of the investigation. Based on our analysis of 
the information presented by the petitioner, we have determined that 
there is a single domestic like product, PVA, which is defined in the 
``Scope of Investigation'' section above, and we have analyzed industry 
support in terms of the domestic like product.
    On September 24, 2004, the Department received opposition to the 
petition from DuPont, a producer of the domestic like product. Also, on 
September 27, 2004, the Department received a submission from Solutia, 
a producer of the domestic like product, expressing that it takes 
neither an affirmative nor a negative position with regard to this 
proceeding. However, the Department confirmed the necessary industry 
support based on the actual 2003 production figures which each domestic 
producer provided (i.e., the petitioner represents over 50 percent of 
total production of the domestic like product). See Attachment II of 
the Initiation Checklist, dated September 27, 2004 (Initiation 
Checklist), on file in the Central Records Unit, Room B-099 of the 
Department of Commerce. The domestic producer who supports the petition 
accounts 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. Further, the domestic producer who supports the petition 
accounts 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. Thus, the requirements of 
section 732(c)(4)(A)(ii) are also met.
    On September 24, 2004, the same producer of the domestic like 
product that filed an opposition to the petition (DuPont) filed a 
submission in which it urged the Department to reject the petition 
``because the petitioner has engaged in improper conduct'' with respect 
to the establishment of industry support. Because the petitioner 
represents over 50 percent of total U.S. production, notwithstanding 
the allegations contained in DuPont's September 24, 2004, submission, 
it is not appropriate to reject the petition.
    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 July 1, 2003, through 
June 30, 2004.

Export Price and Normal Value

    The following is a description of the allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to U.S. price and normal value (NV) are discussed 
in greater detail in the Initiation Checklist. Should the need arise to 
use any of this information as facts available under section 776 of the 
Act, we may reexamine the information and revise the margin 
calculation, if appropriate.
    The petition identified one producer of PVA in Taiwan. See Volume I 
of the September 7, 2004, petition at page 25. The petitioner based 
export price (EP) on Taiwan export statistics, U.S. price quotes from 
two U.S. distributors engaged in the sale of Taiwan-origin PVA, and 
U.S. import statistics. We have not used the Taiwanese EP statistics 
because it is our practice to use U.S. import statistics used in the 
petition when there is a close correlation between the relevant HTS 
number and the subject merchandise. We found no compelling evidence to 
suggest that we should use the Taiwanese information over U.S. 
information. We have not used the U.S. price quotes because the prices 
were not as reasonably reliable as average per-unit values derived from 
U.S. import statistics. The price quotes were estimated prices based on 
rejected sales offers made by the petitioner. Therefore, we used the 
average unit prices based on U.S. import statistics that the petitioner 
provided in Exhibit 2 of its September 21, 2004, submission.
    The petitioner calculated EP by deducting an amount for foreign 
inland freight from factory to port. We reviewed the information 
provided regarding EP and have determined that it represents 
information reasonably available to the petitioner and have reviewed it 
for adequacy and accuracy. See Initiation Checklist.
    To calculate NV, the petitioner obtained contemporaneous home-
market prices for PVA sold in Taiwan from a Web site sponsored by the 
Taiwan Institute of Chemical Industry. The petitioner made an 
adjustment to home-market price by deducting amounts for inland freight 
and imputed credit expense. The petitioner compared home-market prices 
to its own cost of production (COP), adjusted for known cost 
differences between Taiwan and

[[Page 59206]]

the United States, to support a sales-below-cost allegation.
    The Statement of Administrative Action (SAA), accompanying the 
URAA, states that an allegation of sales below COP need not be specific 
to individual exporters or producers. See SAA, H.R. Doc. No. 103-316 at 
833 (1994). The SAA states that ``Commerce will consider allegations of 
below-cost sales in the aggregate for a foreign country, just as 
Commerce currently considers allegations of sales at less than fair 
value on a country-wide basis for purposes of initiating an antidumping 
investigation.'' Id.
    Further, the SAA provides that the ``new section 773(b)(2)(A) 
retains the current requirement that Commerce have `reasonable grounds 
to believe or suspect' that below cost sales have occurred before 
initiating such an investigation. `Reasonable grounds' * * * exist when 
an interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices.'' Id.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM 
and SG&A (including financial expenses). The petitioner calculated COP 
based on its own experience as a U.S. producer during 2003, adjusted 
for known differences between costs incurred to manufacture PVA in the 
United States and in Taiwan. With the exception of labor, the publicly 
available data the petitioner used was contemporaneous with the 
prospective POI. See Initiation Checklist.
    Based upon a comparison of the home-market prices of the foreign 
like product to the calculated COP of the product, we find reasonable 
grounds to believe or suspect that sales of the foreign like product 
were made below the COP, within the meaning of section 773(b)(2)(A)(i) 
of the Act. Accordingly, the Department is initiating a country-wide 
cost investigation.
    As such, pursuant to sections 773(a)(4) and 773(e) of the Act, the 
petitioner calculated NV based on constructed value (CV). Consistent 
with section 773(e)(2)(B)(iii) of the Act, the petitioner included in 
CV an amount for profit. For profit, the petitioner relied upon amounts 
reported in Chang Chun Petrochemical Ltd.'s (CCP's), the potential 
respondent's, 2003 financial statements.
    We adjusted the petitioner's calculated margin because the 
petitioner subtracted inland freight expenses from the CV and we do not 
normally deduct such expenses from CV. Therefore, we added the inland 
freight expense of 0.30 New Taiwan dollars per kilogram to the CV 
calculated by the petitioner and then converted the recalculated CV to 
a U.S. dollars per pound figure using the same methodology as the 
petitioner used. This results in a CV of US$ 0.8418 per pound and a 
U.S. price that is US$ 0.2398 per pound lower than CV. We reviewed the 
NV and CV information provided and have determined that it represents 
information reasonably available to the petitioner and have reviewed it 
for adequacy and accuracy.
    Based on a comparison of EP derived from U.S. average unit values 
(AUVs) to adjusted CV, the dumping margin is 39.83 percent for PVA from 
Taiwan.
    As indicated above, the petitioner also provided information 
demonstrating reasonable grounds to believe or suspect that sales of 
PVA in the home market were made at prices below the COP, within the 
meaning of section 773(b) of the Act, and requested that the Department 
conduct a country-wide sales-below-cost investigation.

Fair-Value Comparison

    Based on the data provided by the petitioner, there is reason to 
believe that imports of PVA from Taiwan are being, or are likely to be, 
sold in the United States 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 and 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 evidenced by the volume of 
lost sales, declining profitability, reductions in employment, and 
stagnant capacity utilization. Furthermore, the petitioner contends 
that injury and threat of injury is evidenced by negative effects on 
its revenue, market share, and growth.
    These allegations are supported by relevant evidence including 
import data, lost sales, and pricing information. The Department 
assessed the allegations and supporting evidence regarding material 
injury and causation and determined that these allegations are 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation. See Initiation Checklist.

Initiation of Antidumping Investigation

    Based upon the examination of the petition on PVA from Taiwan, and 
other information reasonably available to the Department, we find that 
the petition meets the requirements of section 732 of the Act. 
Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of PVA from Taiwan are being, or are likely 
to be, sold in the United States at less than fair value. Unless 
postponed, we will make our preliminary determination no later than 140 
days after the date of this initiation.

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 Taiwan. We will attempt to provide a copy of the 
public version of the petition to the producer named in the petition.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than October 22, 
2004, whether there is a reasonable indication that imports of PVA from 
Taiwan 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: September 27, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
 [FR Doc. E4-2476 Filed 10-1-04; 8:45 am]
BILLING CODE 3510-DS-P