[Federal Register Volume 65, Number 7 (Tuesday, January 11, 2000)]
[Notices]
[Pages 1588-1590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-638]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-858]
Initiation of Antidumping Investigation: Citric Acid and Sodium
Citrate From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 11, 2000.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim, AD/CVD Enforcement Group
I, Office 2, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202) 482-2613.
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 to 19 CFR Part 351 (April 1999).
The Petition
On December 15, 1999, the Department received a petition filed in
proper form by Archer Daniels Midland Company, Cargill, Incorporated,
and Tate & Lyle Citric Acid, Inc. (collectively, the petitioners). On
December 20, 1999, the Department requested further information on
industry support from the petitioners. The Department received
supplemental information in response to that request on December 27,
1999.
In accordance with section 732(b) of the Act, the petitioners
allege that imports of citric acid and sodium citrate 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 pose a serious and imminent threat of
material injury to an industry in the United States.
The Department finds that the petitioners filed the petition on
behalf of the domestic industry because they are interested parties as
defined in sections 771(9) (C) and (D) of the Act and have demonstrated
sufficient industry support. See ``Determination of Industry Support
for the Petition'' section, below.
Scope of Investigation
The scope of the investigation includes all grades and granulation
sizes of citric acid and sodium citrate in any type of packaging and in
either dry form or in any solution, including, but not limited to,
solutions of water, alcohol and ether. The scope of the investigation
includes the hydrous and anhydrous forms of citric acid and the
dihydrate and anhydrous forms of sodium citrate, otherwise known as
citric acid sodium salt. Sodium citrate includes both trisodium citrate
and monosodium citrate which are also known as citric acid trisodium
salt and citric acid monosodium salt, respectively.
Citric acid and sodium citrate are classifiable under 2918.14.0000
and 2918.15.1000 of the Harmonized Tariff Schedule of the United States
(HTSUS), respectively. Although the HTSUS subheadings are 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 definition of
the scope of the investigation with the petitioners to ensure that the
definition accurately reflects the products for which they are seeking
relief. As we discussed in the preamble to the Department's
regulations, we are setting aside a period for parties to raise issues
regarding product coverage. See Antidumping Duties; Countervailing
Duties: Final Rule, 62 FR 27296, 27323 (May 19, 1997). The Department
encourages all parties to submit such comments by January 25, 2000.
Comments should be addressed to Import Administration's Central Records
Unit at Room 1870, U.S. Department of Commerce, Pennsylvania Avenue and
14th Street, NW, Washington, DC 20230. This scope consultation period
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 term ``industry'' as the
producers 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 account for production
of 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 provision 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
domestic like product, such differences do not render the decision of
either agency contrary to the law.1 Section 771(10) of the
Act defines
[[Page 1589]]
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. In this case, the petitioners claim that all
citric acid and sodium citrate constitute one class or kind of
merchandise.
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\1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp.
639, 644 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass Therefor from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56 FR
32376, 32380-81 (July 16, 1991).
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Based on our analysis of the information and arguments presented to
the Department, we have determined that, for purposes of initiation of
this investigation, there is a single domestic like product which is
defined in the ``Scope of Investigation'' section, above.
Moreover, the Department has determined that the petition and
supplemental information contain adequate evidence of sufficient
industry support. See January 4, 2000, Initiation Checklist (public
version on file in the Central Records Unit of the Department of
Commerce, Room B-099). The petitioners demonstrated that they account
for all of the domestic production of citric acid; however they did not
provide data on the total domestic production of sodium citrate. The
Department is aware that U.S. companies other than the petitioners
purchase citric acid and convert it into sodium citrate. If we
conservatively estimate the maximum quantity of sodium citrate produced
by non-petitioning U.S. companies, from imported citric acid and
domestically-produced citric acid, the petitioners still account for
more than 50 percent of the U.S. production of citric acid and sodium
citrate. Therefore, the producers who support the petition account for
more than 50 percent of the production of the domestic like product.
See January 4, 2000, Initiation Checklist (public version on file in
the Central Records Unit of the Department of Commerce, Room B-099).
We received a letter in opposition to the petition from Proctor &
Gamble, Inc., which is both a domestic producer of the subject
merchandise, as well as an importer of subject merchandise from the
PRC. Because Proctor & Gamble, Inc. is an importer of the subject
merchandise from the PRC, the Department may disregard Proctor &
Gamble, Inc.'s position, in accordance with section 732(c)(4)(B)(ii) of
the Act. The Department has disregarded Proctor & Gamble, Inc.'s
opposition because, according to Proctor & Gamble, Inc., they are a
major purchaser and user of domestic and imported citric acid and
sodium citrate. However, even if the Department had considered Proctor
& Gamble, Inc.'s opposition to the petition, the petitioners, as
discussed above, have demonstrated that they account for more than 50
percent of the total production of the domestic like product.
Accordingly, the Department determines that this petition is filed on
behalf of the domestic industry within the meaning of section 732(b)(1)
of the Act.
Export Price and Normal Value
The following describes the allegations of sales at less than fair
value upon which our decision to initiate this investigation is based.
Should the need arise to use any of this information in our preliminary
or final determinations for purposes of facts available under section
776 of the Act, we may re-examine the information and revise the margin
calculations, if appropriate.
The petitioners identified 102 known or potential PRC producers of
subject merchandise. The petitioners based export price (EP) on
brokers' offers for the sale of PRC-origin anhydrous citric acid and
sodium citrate in solution to U.S. purchasers. For citric acid, the
petitioners made deductions from the starting price for a U.S.
distributor mark-up, U.S. and home market freight expenses,
international movement expenses, U.S. customs, processing and harbor
fees, and a solution expense. For sodium citrate, the petitioners made
the same deductions as for citric acid but did not make a deduction for
solution expense. We adjusted the petitioners' calculation of EP for
sodium citrate to include a deduction for solution expense because the
starting price quoted was for sodium citrate in solution.
Because the PRC is considered a nonmarket economy (NME) country
under section 771(18) of the Act, the petitioners based normal value
(NV) on the factors of production valued in a surrogate country, in
accordance with section 773(c) of the Act. For purposes of the
petition, the petitioners selected India as the most appropriate
surrogate market economy. The petitioners developed information on the
representative factors of production for citric acid in the PRC from
their knowledge of citric acid production in the PRC. For sodium
citrate, the petitioners based the factors of production on their
experience in manufacturing the product because the information
available to them did not include the factors for sodium citrate
production in the PRC.
The petitioners valued raw material inputs based on publicly
available price data in India. The petitioners identified the major
material input in the production of citric acid and sodium citrate as
starch. The petitioners valued starch using the average Indian import
value for a type of starch which most closely corresponds to the
particular type of starch used by the Chinese producer, as published in
Chemical Weekly on November 9, 1999. The petitioners also identified
additional material inputs used in the production of citric acid and
sodium citrate. The additional material inputs were valued using both
Chemical Weekly and United Nations Trade Statistics publications. Where
appropriate, the petitioners adjusted the values reported in Chemical
Weekly to exclude sales and excise taxes. For starch and other raw
materials, the petitioners increased the unit value to include
estimated transportation costs. However, because the petitioners did
not provide an appropriate surrogate value for costs associated with
transporting inputs in the PRC, we adjusted the petitioners' normal
value calculation by excluding freight costs associated with
transporting raw material inputs.
To value energy inputs, the petitioners used publicly available
prices in India, with the exception of one input. For this particular
input, the petitioners relied on a U.S. producer's experience. However,
because the petitioners did not provide an appropriate surrogate value
for the cost of this input in the PRC, we adjusted the petitioners'
normal value calculation by excluding this input's cost from the
calculation.
For labor and packing materials, the petitioners estimated the
consumption amounts based on their own experiences. The petitioners
valued labor based on a regression-based wage rate, in accordance with
19 CFR 351.408 (c)(3). For packing materials, the petitioners used
1996-1997 Indian import values from the Monthly Statistics of Foreign
Trade of India.
Where appropriate, the petitioners adjusted the factor values for
inflation using either the Indian wholesale price index (WPI) or the
U.S. WPI for the period April through June 1999, as published in the
International Monetary Fund's International Financial Statistics (IFS
Data). Additionally, the petitioners converted factors based on Indian
rupees to U.S. dollars using an average Indian rupee to U.S. dollar
exchange rate from the monthly average rates as
[[Page 1590]]
reported in the IFS Data for the period April through August 1999.
Finally, for factory overhead, selling, general, and administrative
expenses (SG&A), and profit, the petitioners used publicly available
financial statements of Indian metal and chemical producers as
published by the Reserve Bank of India in 1997.
Based on comparisons of EP to NV, as adjusted by the Department,
the petitioners estimate dumping margins ranging from 211.58 to 307.79
percent.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of citric acid and sodium citrate 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 petitioners allege that the U.S. industry producing the
domestic like product is threatened with material injury by reason of
imports of the subject merchandise sold at less than NV. The
allegations of threat of injury and causation are supported by relevant
evidence including business proprietary data from the petitioners and
U.S. Customs import data. The Department assessed the allegations and
supporting evidence regarding the threat of material injury and
causation and determined that these allegations are sufficiently
supported by accurate and adequate evidence and meet the statutory
requirements for initiation. See Initiation Checklist (public version
on file in the Central Records Unit of the Department of Commerce, Room
B-099).
Initiation of Antidumping Investigation
We have examined the petition on citric acid and sodium citrate
from the PRC and have found that it meets the requirements of section
732 of the Act. Therefore, we are initiating an antidumping duty
investigation to determine whether imports of citric acid and sodium
citrate from the PRC 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 for the antidumping duty investigation by May
23, 2000.
Distribution of Copies of the Petitions
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.
Preliminary Determination by the ITC
The ITC will determine by January 31, 2000, whether there is a
reasonable indication that imports of citric acid and sodium citrate
from the PRC are threatening to cause material injury to a U.S.
industry. A negative ITC determination will result in the investigation
being terminated; otherwise, the investigation will proceed according
to statutory and regulatory time limits.
This notice is published in accordance with section 777(i)(1) of
the Act.
Dated: January 4, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-638 Filed 1-10-00; 8:45 am]
BILLING CODE 3510-DS-P
