E7-56. Expected Non-Market Economy Wages: Request for Comments on 2006 Calculation

AGENCY:

Import Administration, International Trade Administration, Commerce.

ACTION:

Request for comment.

SUMMARY:

The Department of Commerce (“Department”) has a longstanding practice of calculating expected non-market economy (“NME”) wages for use as the surrogate value for direct labor in antidumping proceedings involving NME countries. These expected NME wages are calculated annually in accordance with § 351.408(c)(3) of the Department's regulations. This notice presents the Department's preliminary 2006 expected NME wages, which were calculated according to the Department's revised methodology described in the Federal Register notice Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, Oct. 19, 2006 (hereafter, the “Antidumping Methodologies notice”), and provides the public with an opportunity to comment on potential clerical errors in the calculation.

DATES:

Comments must be submitted no later than 10 days after publication of this notice.

ADDRESSES:

Written comments (original and six copies) should be sent to David Spooner, Assistant Secretary for Import Administration, U.S. Department of Commerce, Central Records Unit, Room 1870, 14th Street and Pennsylvania Avenue, NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT:

Shauna Lee-Alaia, Policy Analyst, Office of Policy, Import Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, [phone].

SUPPLEMENTARY INFORMATION:

Background

The Department's regulations generally describe the methodology by which the Department calculates expected NME wages:

For labor, the Secretary will use regression-based wage rates reflective of the observed relationship between wages and national income in market economy countries. The Secretary will calculate the wage rate to be applied in non-market economy proceedings each year. The calculation will be based on current data, and will be made available to the public.19 CFR 351.408 (c)(3).

Briefly, the Department's expected NME wages are calculated each year in two steps. First, the relationship between hourly wage rates (obtained from the International Labour Organization's (“ILO”) Yearbook of Labour Statistics) and per-capita gross national income (“GNI”) (obtained from the World Bank) is estimated using ordinary least squares (OLS) regression analysis. Second, the GNI of each of the countries designated by the Department to be an NME are applied to the regression, which yields an expected hourly wage rate for each NME.

The Department published a notice in the Federal Register on October 19, 2006 which detailed its revised methodology for calculating expected NME wages in antidumping proceedings involving NME countries. See the Antidumping Methodologies notice. In that notice, the Department stated that its annual calculation of expected NME wage rates will be subject to public comment approximately one month prior to adoption. The Department noted further that comment will be requested only with regard to potential clerical errors in the Department's calculation.

Accordingly, this notice presents the Department's preliminary 2006 calculation of expected NME wages in Attachment 1, which were calculated according to the Department's revised methodology described in the Antidumping Methodologies notice. The Department is requesting public comment only on the potential clerical errors in the calculation. Comments with regard to the methodology were addressed in the Antidumping Methodologies notice and will not be considered at this time.

In order to facilitate a full opportunity for comment, and because the underlying data is voluminous, the preliminary results and underlying data for the preliminary 2006 expected NME wages calculation have been posted on the Import Administration Web site (http://ia.ita.doc.gov). This preliminary calculation will not be used for antidumping purposes until it has been finalized by the Department following the public comment period.

Comment

Persons wishing to comment on potential clerical errors in the Department's preliminary 2006 calculation of expected NME wages presented in Attachment 1 should file one signed original and six copies of each set of comments by the date specified above. The Department will consider all comments regarding potential clerical errors received before the close of the comment period. Comments received after the end of the comment period will be considered, if possible, but their consideration cannot be assured. The Department will not accept comments accompanied by a request that a part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. The Department will return such comments and materials to the persons submitting the comments and will not consider them. All comments responding to this notice will be a matter of public record and will be available for inspection and copying at Import Administration's Central Records Unit, Room B-099, between the hours of 8:30 a.m. and 5 p.m. on business days. The Department requires that comments be submitted in written form. The Department recommends submission of comments in electronic form to accompany the required paper copies.

Comments filed in electronic form should be submitted either by e-mail to the Webmaster below, or on CD-ROM, as comments submitted on diskettes are likely to be damaged by postal radiation treatment. Comments received in electronic form will be made available to the public in Portable Document Format (PDF) on the Internet at the Import Administration Web site at the following address: http://ia.ita.doc.gov.

Any questions concerning file formatting, document conversion, access on the Internet, or other electronic filing issues should be addressed to Andrew Lee Beller, Import Administration Webmaster, at [phone], e-mail address: [e-mail].

Dated: December 29, 2006.

Steven J. Claeys,

Acting Assistant Secretary for Import Administration.

Attachment 1

2006 Calculation of Expected NME Wages

Following the criteria and methodology described in the Antidumping Methodologies notice, and using the data available to the Department as of November 8, 2006, the Department has calculated preliminary 2006 expected NME wages.

2003 and 2004 data in Chapter 5B of the ILO International Labour Statistics were available for 79 entities: Albania, Armenia, Australia, Austria, Azerbaijan, Bahrain, Belgium, Botswana, Bulgaria, Canada, Chile, China, Colombia, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Finland, French Polynesia, Georgia, Germany, Gibraltar, Hong Kong, Hungary, Iceland, India, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Kazakhstan, Korea, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Macau, the former Yugoslav Republic of Macedonia, Malta, Mauritius, Mexico, Moldova, Mongolia, Myanmar, Netherlands, New Zealand, Nicaragua, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Puerto Rico, Romania, San Marino, Serbia and Montenegro, Seychelles, Singapore, Slovakia, Slovenia, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Ukraine, United Kingdom, United States, West Bank and Gaza strip.

Within this data set, for 2003 and 2004, there were no “earnings” data for Italy, Myanmar, Peru and Thailand. Similarly, there were no “men and women” data for French Polynesia. 2003 and 2004 data representing all industries (“Total”) were available for the remaining 74 entities.

There were two entries for Poland which met all of the Department's criteria for choosing a single wage rate. These two entries were averaged to arrive at a single wage rate.

Of these 74 entities, a consumer price index was unavailable for the following 10: Armenia, Azerbaijan, China, Cuba, Gibraltar, Jersey, Puerto Rico, San Marino, Serbia and Montenegro, and Ukraine.

Of the remaining 64 entities, there was no exchange rate available for the Isle of Man, Macau, and West Bank and Gaza Strip.

Of the remaining 61 entities, the following are currently or were NMEs designated by the Department in 2003 or 2004: Georgia, Kyrgyzstan, and Moldova. Accordingly, the Department ran its preliminary 2006 expected NME wage regression on the following 58 countries: Albania, Australia, Austria, Bahrain, Belgium, Botswana, Bulgaria, Canada, Chile, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Finland, Germany, Hong Kong, Hungary, Iceland, India, Ireland, Israel, Japan, Kazakhstan, Korea, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Mauritius, Mexico, Mongolia, Netherlands, New Zealand, Nicaragua, Norway, Panama, Paraguay, Philippines, Poland, Portugal, Romania, Seychelles, Singapore, Slovakia, Slovenia, Spain, Sri Lanka, Sweden, Switzerland, United Kingdom, and United States.

As noted in the ILO database, the wage rates for Korea and Mongolia are denominated in units of 1,000 of their respective national currency, and have been converted accordingly.

On July 1, 2005, Romania re-denominated its currency, with one old leu equal to 10,000 new leu. Romanian ILO data was adjusted accordingly.

Following the data compilation and regression methodology described in the Antidumping Methodologies notice, and using GNI and wage data for Base Year 2004, the regression results are: Wage = 0.091436 + 0.000494* GNI.

Country	2004 GNI (USD per annum)	Expected NME wage rate (USD per hour)
Armenia	1,140	0.65
Azerbaijan	930	0.55
Belarus	2,150	1.15
China	1,500	0.83
Georgia	1,060	0.62
Kyrgyz Republic	400	0.29
Moldova	720	0.45
Tajikistan	280	0.23
Uzbekistan	450	0.31
Vietnam	540	0.36
The World Bank did not publish a GNI for Turkmenistan.

As stated above, the full preliminary results and underlying data for the 2006 expected NME wages calculation have been posted on the Import Administration Web site (http://ia.ita.doc.gov).