[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73013-73015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33664]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-804]
Final Results of Expedited Sunset Review: New Steel Rail from
Canada
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of Expedited Sunset Review: New Steel
Rail from Canada.
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SUMMARY: On June 1, 1999, the Department of Commerce (``the
Department'') initiated a sunset review of the antidumping duty order
on new steel rail from Canada (64 FR 29261) pursuant to section 751(c)
of the Tariff Act of 1930, as amended (``the Act''). On the basis of a
notice of intent to participate and substantive comments filed on
behalf of domestic interested parties and inadequate response (in this
case, no response) from respondent interested parties, the Department
determined to conduct an expedited review. As a result of this review,
the Department finds that revocation of the antidumping order would be
likely to lead to continuation or recurrence of dumping at the levels
indicated in the Final Results of Review section of this notice.
FOR FURTHER INFORMATION CONTACT: Darla D. Brown or Melissa G. Skinner,
Office of Policy for Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3207 or (202) 482-1560, respectively.
EFFECTIVE DATE: December 29, 1999.
Statute and Regulations
This review was conducted pursuant to sections 751(c) and 752 of
the Act. The Department's procedures for the conduct of sunset reviews
are set forth in Procedures for Conducting Five-year (``Sunset'')
Reviews of Antidumping and Countervailing Duty Orders, 63 FR 13516
(March 20, 1998) (``Sunset Regulations'') and 19 CFR part 351 (1998) in
general. Guidance on methodological or analytical issues relevant to
the Department's conduct of sunset reviews is set forth in the
Department's Policy Bulletin 98:3--Policies Regarding the Conduct of
Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty
Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset Policy
Bulletin'').
Scope
The merchandise subject to this antidumping order is new steel
rail, whether of carbon, high carbon, alloy or other quality steel from
Canada. Subject merchandise includes, but is not limited to, standard
rails, all main line sections (at least 30 kilograms per meter or 60
pounds per yard), heat-treated or head-hardened (premium) rails,
transit rails, contact rails (or ``third rail'') and crane rails. Rails
are used by the railroad industry, by rapid transit lines, by subways,
in mines, and in industrial applications.
Specifically excluded from the order are light rails (less than 30
kilograms per meter or 60 pounds per yard). Also excluded from the
order are relay rails, which are used rails taken up from primary
railroad track and relaid in a railroad yard or on a secondary track.
As a result of a changed circumstances review in 1996, the antidumping
duty order on new steel rail was partially revoked with regard to
100ARA-A new steel rail, except light rail, from Canada.\1\ Also,
nominal 60 pounds per yard steel rail is outside the scope of this
order.\2\
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\1\ See New Rail, Except Light Rail, From Canada; Final Results
of Changed Circumstances Antidumping and Countervailing Duty
Administrative Reviews, and Revocation in Part of Antidumping and
Countervailing Duty Orders, 61 FR 11607 (March 21, 1996).
\2\ See New Steel Rail, Except Light Rail, From Canada, Notice
of Termination of Changed Circumstances Administrative Reviews and
Clarification of Scope Language, 63 FR 43137 (August 12, 1998).
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This merchandise is currently classifiable under the Harmonized
Tariff Schedule (HTS) items 7302.10.1010, 7302.10.1015, 7302.1035,
7302.10.1045, 7302.10.5020, 8548.90.0000.\3\ The HTS item numbers are
provided for convenience and customs purposes. The written description
remains dispositive.
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\3\ Per conversation with April Avalone at U.S. Customs on
September 7, 1999.
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History of the Order
The Department issued its final determination of sales at less than
fair value (``LTFV'') with respect to imports of new steel rail from
Canada on August 3, 1989 (54 FR 31984). In this determination, the
Department published one company-specific dumping margin as well as an
``all others'' rate. On September 15, 1989, the Department issued the
antidumping duty order on new steel rail from Canada, again publishing
one company-specific dumping margin as well as an ``all others'' rate
(54 FR 38263).
Since the imposition of the order, the Department has conducted one
changed circumstances administrative review.\4\ There have been no
administrative reviews of the order.
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\4\ See footnote 1.
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We note that, to date, the Department has not issued any duty
absorption findings in this case. The order remains in effect for all
manufacturers and exporters of the subject merchandise from Canada.
Background
On June 1, 1999, the Department initiated a sunset review of the
antidumping order on new steel rail from Canada (64 FR 29261), pursuant
to section 751(c) of the Act. The Department received a Notice of
Intent to Participate on behalf of Pennsylvania Steel Technologies,
Inc. (``PST''), a subsidiary of Bethlehem Steel Corporation, and Rocky
Mountain Steel Mills (``RMSM'') (collectively, the ``domestic
interested parties'') on June 16, 1999, within the deadline specified
in Sec. 351.218(d)(1)(i) of the Sunset Regulations. We received a
complete substantive response from the domestic interested parties on
July 1, 1999, within the 30-day deadline specified in the Sunset
Regulations under Sec. 351.218(d)(3)(i). Both PST and RMSM claimed
interested party status under 19 USC 1677(9)(C) as U.S. manufacturers
of the subject merchandise. In addition, PST stated that it is
subsidiary of Bethlehem Steel Corporation, a petitioner in the original
investigation. We did not receive a substantive response from any
respondent interested party in this case. As a result, pursuant to 19
CFR 351.218(e)(1)(ii)(C), the Department determined to conduct an
expedited, 120-day, review of the order.
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). On October 12, 1999, the Department determined that the sunset
review of the antidumping duty order on new steel rail from Canada is
extraordinarily complicated, and extended the time limit for completion
of the final results of this review until not later than
[[Page 73014]]
December 28, 1999, in accordance with section 751(c)(5)(B) of the
Act.\5\
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\5\ See Extension of Time Limit for Final Results of Five-Year
Reviews, 64 FR 55233 (October 12, 1999).
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Determination
In accordance with section 751(c)(1) of the Act, the Department
conducted this review to determine whether revocation of the
antidumping 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, and
shall provide to the International Trade Commission (``the
Commission'') the magnitude of the margin of dumping likely to prevail
if the order is revoked.
The Department's determinations concerning continuation or
recurrence of dumping and the magnitude of the margin are discussed
below. In addition, domestic interested parties' comments with respect
to continuation or recurrence of dumping and the magnitude of the
margin are addressed within the respective sections below.
Continuation or Recurrence of Dumping
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
antidumpung 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).
In addition to considering the guidance on likelihood cited above,
section 751(c)(4)(B) of the Act provides that the Department shall
determine that revocation of the order would be likely to lead to
continuation or recurrence of dumping where a respondent interested
party waives its participation in the sunset review. In this instant
review, the Department did not receive a substantive response from any
respondent interested party. Pursuant to section 351.218(d)(2)(iii) of
the Sunset Regulations, this constitutes a waiver of participation.
In their substantive response, the domestic interested parties
argue that revocation of the order on new steel rail from Canada would
be likely to lead to continuation or recurrence of dumping. They
maintain that were the order revoked, imports of new steel rail from
Canada would likely reenter the U.S. market at less than fair value.
They point out that although Algoma Steel Corporation, Limited, has
ceased producing new steel rail, another Canadian producer, the Sydney
Steel Corporation (``Sysco''), does produce the subject merchandise.
The domestic interested parties argue that new steel rail currently
accounts for approximately 40 percent of Sysco's total steel production
(see July 1, 1999, substantive response of the domestic interested
parties at 9-10 and Exhibit 2). Moreover, they argue that Sysco's five
year business plan calls for an increase in rail production and an
increase in exports to account for some of the production increase. The
domestic interested parties assert that several factors indicate that,
if the antidumping duty order were revoked, the primary target of
Sysco's increased production of new steel rail would be the United
States market. Specifically, the domestic parties argue that, because
Sysco maintains a location in Eastern Canada, its most economical and
logical export market would be the United States. Additionally, the
domestic interested parties stress that statements made by Sysco
executives indicate a willingness to regain market share in the U.S.
(see id. at 10 and Exhibits 3 and 5).
The domestic interested parties also base their likelihood argument
on the decline in import volumes following the imposition of the order.
The domestic interested parties, citing U.S. Census Bureau statistics,
state that subject imports dropped off significantly in 1990, the year
following the imposition of the order. They argue that prior to the
issuance of the order, sales of Canadian new steel rail had increased
by 162 percent between the time period 1986 to 1988. The domestic
interested parties further assert that subsequent to the antidumping
order, sales volumes dropped by over 99.9 percent in 1990, as compared
to 1988 figures. Moreover, in 1998, imports were 99.7 percent lower
than in 1988. They conclude that Canadian imports, while not zero, are
currently insignificant in the U.S. market (see id. at 8-9). Therefore,
the domestic interested parties argue that were the order revoked,
dumping would be likely to recur since the evidence indicates that
Canadian exporters of the subject merchandise need to dump in order to
sell at pre-order levels.
In conclusion, the domestic interested parties argue that the
Department should determine that there is a likelihood that dumping
would continue or recur were the order revoked because the imposition
of the order resulted in the near termination of imports of new steel
rail from Canada.
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 to
dump with the discipline of the order in place, the Department may
reasonably infer that dumping would continue if the discipline were
removed. As discussed above, no administrative reviews have been
conducted since the original investigation, and therefore dumping
margins above de minimis continue to exist for all shipments of the
subject merchandise from Canada. While the domestic interested parties
note that Algoma no longer produces the subject merchandise, other
Canadian producers/exporters, such as Sysco, continue to produce and
export the subject merchandise.
Consistent with section 752(c) of the Act, the Department also
considers the volume of imports before and after the issuance of the
order. As stated above, the domestic interested parties argue that a
significant decline in the volume of imports of the subject merchandise
from Canada since the imposition of the order provides further evidence
that dumping would continue if the order were revoked. In their
substantive responses, the domestic interested parties provide
statistics demonstrating the decline in import volumes of new steel
rail since the imposition of the order (see July 1, 1999, Substantive
Response of the domestic interested parties at 8 and Exhibit 1).
Utilizing the Department's statistics, including IM146 reports, on
imports of the subject merchandise from Canada, we agree with the
domestic interested parties' assertions that imports of the subject
merchandise declined sharply following the imposition of the order and
have not regained pre-order volumes. However, it
[[Page 73015]]
is not possible to determine whether this decline is due to the fact
that Algoma has ceased producing new steel rail or to the response of
Sysco and other producers/exporters to the order. Therefore, the
decline in imports in this case is not probative of the likelihood of
continuation or recurrence of dumping.
As noted above, in conducting its sunset reviews, the Department
considers the weighted-average dumping margins and volume of imports
when determining whether revocation of an antidumping duty order would
lead to the continuation or recurrence of dumping. Based on this
analysis, the Department finds that the existence of dumping margins
above de minimis is highly probative of the likelihood of continuation
or recurrence of dumping. Therefore, given that dumping has continued
over the life of the order, respondent parties waived participation in
this review, and absent argument and evidence to the contrary, the
Department determines that dumping is likely to continue or recur if
the order were revoked.
Magnitude of the Margin
In the Sunset Policy Bulletin, the Department stated that it
normally will 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.)
In their substantive response, the domestic interested parties
recommend that the Department adhere to its general practice of
selecting dumping margins from the original investigation. Regarding
companies not reviewed in the original investigation, the domestic
interested parties suggest that the Department report to the Commission
the all others rate published in the original investigation. Since the
Algoma Steel Corporation, the company that received a company-specific
rate in the original investigation, has, according to the domestic
interested parties, ceased production of new steel rail, the domestic
parties maintain that providing a rate for Algoma is not necessary.
However, because at least one other producer/exporter remains, the
domestic interested parties recommend that the Department provide to
the Commission the all others rate determined in the original
investigation.
The Department agrees with the domestic interested parties that the
margins calculated in the original investigation are the only rates
that reflect the behavior of exporters without the discipline of the
order. Absent argument and evidence to the contrary, the Department
finds the margins calculated in the original investigation are
probative of the behavior of Canadian producers/exporters of new steel
rail if the order were revoked. As such, the Department will report to
the Commission the ``all others'' rates from the original investigation
as contained in the Final Results of Review section of this notice.
Final Results of Review
As a result of this review, the Department finds that revocation of
the antidumping duty order would likely lead to continuation or
recurrence of dumping at the margin listed below:
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Margin
Manufacturer/exporter (percent)
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Algoma....................................................... 38.79
All Others................................................... 38.79
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This notice serves as the only reminder to parties subject to
administrative protective order (``APO'') of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 351.305 of the Department's regulations.
Timely notification of return/destruction of APO materials or
conversion to judicial protective order is hereby requested. Failure to
comply with the regulations and the terms of an APO is a sanctionable
violation.
This five-year (``sunset'') review and notice are in accordance
with sections 751(c), 752, and 777(i)(1) of the Act.
Dated: December 21, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33664 Filed 12-28-99; 8:45 am]
BILLING CODE 3510-DS-M
