[Federal Register Volume 59, Number 39 (Monday, February 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4503]
[Federal Register: February 28, 1994]
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DEPARTMENT OF COMMERCE
[A-570-831]
Initiation of Antidumping Duty Investigation: Fresh Garlic From
the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: February 28, 1994.
FOR FURTHER INFORMATION CONTACT: Jennifer Stagner or Diane Mazur,
Office of Antidumping Investigations, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue NW, Washington, DC, 20230; telephone
(202) 482-1673 or 482-3534, respectively.
Initiation of Investigation
The Petition
On January 31, 1994, we received a petition filed in proper form by
the member companies of the Fresh Garlic Producers Association
(collectively petitioner). In accordance with 19 CFR 353.12, the
petitioner alleges that fresh garlic from the People's Republic of
China (PRC) is being, or is likely to be, sold in the United States at
less than fair value within the meaning of section 731 of the Tariff
Act of 1930, as amended (the Act), and that these imports materially
injure, or threaten material injury to, a United States industry.
The petitioner has stated that it has standing to file the petition
because it is an interested party, as defined under section 771(9)(C)
of the Act, and because the petition is filed on behalf of the U.S.
industry producing the product subject to this investigation. If any
interested party, as described under paragraphs (C), (D), (E), or (F)
of section 771(9) of the Act, wishes to register support for, or
opposition to, this petition, it should file a written notification
with the Assistant Secretary for Import Administration.
Scope of Investigation
The products covered by this investigation are all grades of fresh
garlic, whether or not chilled or frozen, and include whole garlic,
whole garlic that has been separated into constituent cloves (cracked
garlic), and peeled garlic (skin removed), whether or not packed in any
substance. The differences between the grades are based on color, size,
sheathing and level of decay.
Fresh garlic is used principally as a food product and for
seasoning. Fresh garlic, whether or not chilled or frozen, is currently
classifiable under subheadings 0703.20.0000, 0710.80.7060, and
0710.80.9750 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope of this
proceeding is dispositive.
United States Price and Foreign Market Value
Petitioner based United States price (USP) on October 1993 invoices
from U.S. importers of the subject merchandise from the PRC. In
calculating USP, petitioner deducted amounts for the following: U.S.
duties, ocean freight, marine insurance, foreign inland freight
expenses, brokers' commission, harbor maintenance and U.S. merchandise
processing fees, and commissions charged by the U.S. importers.
Petitioner alleges that the PRC is a non-market economy (NME)
country within the meaning of section 773(c) of the Act. The Department
has determined the PRC to be an NME, within the meaning of section
771(18)(A) of the Act, in previous cases (see e.g., Final Determination
of Sales at Less than Fair Value: Certain Compact Ductile Iron
Waterworks Fittings and Accessories Thereof from the PRC, 58 FR 37908
(July 14, 1993). In accordance with 771(18)(C) of the Act, that
determination continues to apply for purposes of this initiation. In
the course of this investigation, parties will have the opportunity to
address this NME determination and provide relevant information and
argument on this issue.
Further, because of the extent of central government control in an
NME, the Department considers that a single antidumping margin, should
there be one, is appropriate for all exporters from the NME. Only if
individual NME exporters are free of central government ownership and
can demonstrate an absence of central governmental control with respect
to the pricing of exports, both in law and in fact, will they be
considered eligible for separate, owner-specific deposit rates. (See
Final Determination of Sales at Less Than Fair Value: Helical Spring
Lock Washers from the People's Republic of China, 58 FR 48833
(September 20, 1993) for a discussion of the information the Department
considers appropriate to warrant calculation of separate rates.)
Petitioner based foreign market value on the PRC's factors of
production for producing the subject merchandise. To value the factors
of production, petitioner used India as a surrogate country. Petitioner
argues that India is a country at a comparable level of economic
development as the PRC and India is a significant producer of
comparable merchandise pursuant to section 773(c)(4) of the Act.
Further, India's garlic production is labor intensive and relies on
rudimentary agricultural techniques similar to agricultural methods
used in the PRC. For purposes of this initiation, we have accepted
India as an appropriate surrogate country selection. There appear to be
no other countries with comparable economies to the PRC that produce
the subject merchandise. In addition, the Department has used India as
an appropriate surrogate country selection in other investigations
involving merchandise from the PRC. (See Final Determination of Sales
at Less Than Fair Value: Sulfanilic Acid from the People's Republic of
China (57 FR 29705, July 6, 1992).
Petitioner first attempted to value the factors of production using
Indian information. Where this was not possible, petitioner valued the
factors of production using the U.S. industry's costs, where it was
determined that this provided a reasonable basis upon which to value
certain factors of production. Petitioner valued the factors of
production of the subject merchandise in the PRC as follows:
For material costs (seed and fertilizer), petitioner
relied on Indian factors based on its foreign market research, using
public information whenever possible.
For most labor costs (seed cracking, field preparation,
planting, weed control, fertilization, irrigation, digging, windrowing
and harvesting), petitioner relied on an industry expert's estimate of
Chinese factors which was based on the expert's knowledge of the
Chinese industry and the expert's own experience with nonmechanized
garlic production, using public information whenever possible.
Petitioner valued such labor costs on the basis of Indian production
experience as developed in its foreign market research. For other labor
costs related to hauling, sorting, grading, inspecting, and shrinkage,
petitioner relied on the U.S. industry's cost-per-pound for these
operations.
Petitioner added an amount for all other manufacturing
costs and related overhead equal to 10 percent of direct material and
labor costs.
Petitioner added an amount for shrinkage loss of 7 percent
of the cost of production, based on U.S. experience.
For selling, general and administrative expenses (SG&A),
petitioner used the statutory minimum of ten percent of the cost of
production.
For profit, petitioner used the statutory minimum of eight
percent of the cost of manufacture plus SG&A.
Petitioner added an amount for packing based on the
average, actual experience of the U.S. industry.
Based on petitioner's calculations, the dumping margins range from
266.73 to 376.67 percent. For purposes of this initiation, no
adjustments were made to petitioner's calculations.
Initiation of Investigation
We have examined the petition on fresh garlic and have found that
the petition meets the requirements of section 732(b) of the Act.
Therefore, we are initiating an antidumping duty investigation to
determine whether imports of fresh garlic from the PRC are being, or
are likely to be, sold in the United States at less than fair value.
International Trade Commission (ITC) Notification
Section 732(d) of the Act requires us to notify the ITC of this
action and we have done so.
Preliminary Determination by the ITC
The ITC will determine by March 17, 1994, whether there is a
reasonable indication that an industry in the United States is
materially injured, or is threatened with material injury, by reason of
imports of fresh garlic from the PRC. A negative ITC determination will
result in a termination of the investigation; otherwise, the
investigation will proceed according to statutory and regulatory time
limits.
This notice is published pursuant to section 732(c)(2) of the Act
and 19 CFR 353.13(b).
Dated: February 22, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-4503 Filed 2-25-94; 8:45 am]
BILLING CODE 3510-DS-P
