[Federal Register Volume 69, Number 76 (Tuesday, April 20, 2004)]
[Notices]
[Pages 21086-21088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8937]
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DEPARTMENT OF COMMERCE
International Trade Administration
Notice of Initiation of Countervailing Duty Investigations:
Bottle-Grade Polyethylene Terephthalate (PET) Resin from India (C-533-
842) and Thailand (C-549-824)
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: April 20, 2004.
FOR FURTHER INFORMATION CONTACT: Douglas Kirby (India) or Christian
Hughes (Thailand) at (202) 482-3782 or (202) 482-0190 respectively,
Office of AD/CVD Enforcement VII, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Initiation of Investigations
The Petition
On March 24, 2004, the U.S. Department of Commerce (the Department)
received a countervailing duty petition filed in proper form by the
United States PET Resin Producers Coalition (``Petitioner''). The
Department received supplemental information to the petition from the
petitioner on April 5, 2004. In accordance with section 702(b)(1) of
the Tariff Act of 1930, as amended (the Act), petitioner alleges that
producers or exporters of bottle-grade PET resin in India and Thailand
receive countervailable subsidies within the meaning of section 701 of
the Act, and that imports from India and Thailand are materially
injuring, or are threatening material injury to, an industry in the
United States.
The Department finds that the petitioner filed the petition on
behalf of the domestic industry because it is an interested party as
defined in section 771(9)(C) of the Act and it has demonstrated
sufficient industry support with respect to the countervailing duty
investigations that it is requesting the Department to initiate. See
infra, ``Determination of Industry Support for the Petition.''
Period of Investigation
The anticipated period of investigation (POI) for both
investigations is January 1, 2003 through December 31, 2003. See
section 351.204(b)(2) of the Department's regulations (Antidumping
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27385 (May 19,
1997)).
Scope of Investigations
The merchandise covered by each of these investigations is bottle-
grade polyethylene terephthalate (PET) resin, defined as having an
intrinsic viscosity of at least 0.68 deciliters per gram but not more
than 0.86 deciliters per gram. The scope includes bottle-grade PET
resin that contains various additives introduced in the manufacturing
process. The scope does not include post-consumer recycle (PCR) or
post-industrial recycle (PIR) PET resin; however, included in the scope
is any bottle-grade PET resin blend of virgin PET bottle-grade resin
and recycled PET (RPET). Waste and scrap PET is outside the scope of
the investigations. Fiber-grade PET resin, which has an intrinsic
viscosity of less than 0.68 deciliters per gram, is also outside the
scope of the investigations.
The merchandise subject to these investigations is properly
classified under subheading 3907.60.0010 of the Harmonized Tariff
Schedule of the United States (HTSUS); however, merchandise classified
under HTSUS subheading 3907.60.0050 that otherwise meets the written
description of the scope is also subject to these investigations.
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 scope with the
petitioner to ensure that it is an accurate reflection of the products
for which the domestic industry is seeking relief. As discussed in the
preamble to the Department's regulations (Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)),
we are setting aside a period for parties to raise issues regarding
product coverage. The Department encourages all parties to submit such
comments within 20 calendar days of publication of this notice.
Comments should be addressed to Import Administration's Central Records
Unit, 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 determinations.
Consultations
In accordance with Article 13.1 of the Agreement on Subsidies and
Countervailing Measures and section 702(b)(4)(A)(ii) of the Act, we
held separate consultations regarding this petition with the Government
of India (``GOI'') and the Government of Thailand on April 7, 2004. See
Memorandum to the File from Douglas Kirby: Consultations with the
Government of India Regarding the Countervailing Duty Petition on PET
Resin, dated April 9, 2004; see also Memorandum to the File from
Christian Hughes: Consultations with the Government of Thailand
Regarding the Countervailing Duty Petition on PET Resin, dated April 8,
2004. Following consultations, the GOI provided information to support
its statements at consultations regarding several of the GOI programs
alleged by the petitioner. This information was placed in the record
and provided to petitioner. See Memorandum to the File from Dana
Mermelstein, ``Petition for the Imposition of Countervailing Duties on
Bottle-Grade Polyethylene Terephthalate (PET) Resin from India:
Information Submitted by the
[[Page 21087]]
Government of India,'' April 12, 2004, on file in the Import
Administration Central Records Unit , Room B-099 of the Department of
Commerce Building. The Department's consideration of this information
is fully discussed in the Countervailing Duty Investigation Initiation
Checklist: Bottle-Grade Polyethylene Terephthalate (PET) Resin from
India (April 13, 2004) (India CVD Initiation Checklist).
Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(c)(4)(A) of the Act
provides that the Department's industry support determination, which is
to be made before the initiation of the investigations, be based on
whether a minimum percentage of the relevant industry supports the
petition. A petition satisfies 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. Moreover, section 702(c)(4)(D) of the Act
provides that, if the petition does not establish support of domestic
producers or workers accounting for more than 50 percent of the total
production of the domestic like product, the Department shall either
poll the industry or rely on other information in order to determine if
there is support for the petition.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a domestic like product. Thus, to determine whether a
petition has the requisite industry support, the statute directs the
Department to look to producers and workers who produce the domestic
like product. The U.S. 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 definition 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
like product, such differences do not render the decision of either
agency contrary to the 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. Ltd., v. United States, 688 F.
Supp. 639, 642-44 (CIT 1988). See also High Information Content Flat
Panel Displays and Display Glass from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56 FR
32376, 32380-81 (July 16, 1991).
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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 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 petition covers a single class or kind of
merchandise, bottle-grade PET resin, as defined in the ``Scope of
Investigations'' section, above. The petitioner does not offer a
definition of domestic like product distinct from the scope of the
investigations. Further, based on our analysis of the information
presented to the Department by the petitioner, we have determined that
there is a single domestic like product, also bottle-grade PET resin,
which is consistent with the definition in the ``Scope of
Investigations'' section above and have analyzed industry support in
terms of this domestic like product.
The Department has determined that the petitioner has established
industry support representing over 50 percent of total production of
the domestic like product. See India CVD Initiation Checklist; see also
Countervailing Duty Investigation Initiation Checklist: Bottle-Grade
Polyethylene Terephthalate (PET) Resin from Thailand (Thailand CVD
Initiation Checklist) (April 13, 2004). Thus, no polling of the
domestic industry by the Department pursuant to section 702(c)(4)(D) of
the Act is required. In addition, the Department received no opposition
to the petition from domestic producers of the like product. Therefore,
the petitioner and the domestic producers who support the petition
account for at least 25 percent of the total production of the domestic
like product, and the requirements of section 702(c)(4)(A)(i) of the
Act are met. Furthermore, the petitioner and the domestic producers who
support the petition account 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 702(c)(4)(A)(ii) of the Act also are met.
Accordingly, we determine that the petition is filed on behalf of
the domestic industry within the meaning of section 702(b)(1) of the
Act. See India CVD Initiation Checklist at Attachment II; see also
Thailand CVD Initiation Checklist, at Attachment II, on file in the
Central Records Unit, Room B-099 of the Department of Commerce.
Injury Test
Both India and Thailand are ``Subsidies Agreement Countries''
within the meaning of section 701(b) of the Act. Therefore, section
701(a)(2) applies to each investigation. Accordingly, the ITC must
determine whether imports of the subject merchandise from India and
Thailand are materially injuring, or are threatening material injury
to, an industry in the United States.
Allegations of Subsidies
Section 702(b) of the Act requires the Department to initiate a
countervailing duty proceeding whenever an interested party files a
petition, on behalf of an industry, that; (1) alleges the elements
necessary for an imposition of a duty under section 701(a), and (2) is
accompanied by information reasonably available to petitioner
supporting the allegations.
India
We are initiating an investigation of the following programs
alleged in the petition to have provided countervailable subsidies to
manufacturers, producers and exporters of the subject merchandise in
India (a full description of each program is provided in the India CVD
Initiation Checklist):
1. The Duty Entitlement Passbook Scheme (DEPS)/ Post-Export Credits
2. Pre-Shipment and Post-Shipment Export Financing
3. Export Promotion Capital Goods Scheme (EPCGS)
4. Income Tax Exemption Scheme (Sections 10A, 10B, and 80 HHC)
5. Exemption of Export Credit from Interest Taxes
6. Export Processing Zones/Export-Oriented Units Program
7. Market Development Assistance (MDA)
8. Status Certificate Program
9. Loan Guarantees from the GOI
10. State of Maharashtra Program: Industrial Policy 2001
11. State of Gujurat Program: Sales-Tax Incentive Scheme
12. State of West Bengal Program: New Economic Policy on Industrial
Development
[[Page 21088]]
Thailand
We are initiating an investigation of the following programs
alleged in the petition to have provided countervailable subsidies to
manufacturers, producers and exporters of the subject merchandise in
Thailand (a full description of each program is provided in the
Thailand CVD Initiation Checklist):
1. Section 28 of the Investment Promotion Act: Exemption from
Payment of Import Duties on Machinery
2. Section 30 of the Investment Promotion Act: Reduction of Import
Duties on Raw or Essential Materials
3. Section 31 of the Investment Promotion Act: Income Tax
Exemptions
4. Section 35 of the Investment Promotion Act: Special Rights and
Benefits Granted to Promoted Activities Located in Investment Promotion
Zones
Critical Circumstances Allegation
In the petition, the petitioner claims that, following the
initiation of these countervailing duty investigations, there is a
reasonable basis to believe or suspect that critical circumstances will
exist with regard to imports of bottle-grade PET resin from India and
Thailand.
Section 703(e)(1) of the Act states that, if a petitioner alleges
critical circumstances, the Department will find that such critical
circumstances exist, at any time after the date of initiation, when
there is a reasonable basis to believe or suspect that, under paragraph
(A), the alleged countervailable subsidies are inconsistent with the
Subsidies Agreement, and that, under paragraph (B), there have been
massive imports of the subject merchandise over a relatively short
period of time. Section 351.206(h) of the Department's regulations
defines ``massive imports'' as imports that have increased by at least
by 15 percent over the imports during an immediately preceding period
of comparable duration. Section 351.206(i) of the regulations states
that the ``relatively short period'' will normally be defined as the
period beginning on the date the proceeding begins and ending at least
three months later. To date, the petitioner has not demonstrated that
the requirement of ``massive imports . . . over a relatively short
period'' has been met.
The petitioner requests that, pursuant to section 702(e) of the
Act, the Department request U.S. Customs and Border Protection (CBP) to
compile information on an expedited basis regarding entries of subject
merchandise. We note that section 702(e) of the Act states that if, at
any time after initiation, there is a reasonable basis to believe or
suspect that the alleged countervailable subsidies are inconsistent
with the Subsidies Agreement, the Department may request the
Commissioner of Customs to compile such information on an expedited
basis. The petitioner alleges that certain programs listed in the
petition with respect to both India and Thailand constitute export
subsidies, which would be inconsistent with the Subsidies Agreement.
As noted above, the petitioner has not met the criteria for a
finding of critical circumstances. Therefore, at this time, we have no
reasonable basis to believe or suspect that critical circumstances
exist. However, the petitioner can resubmit its request for a finding
of critical circumstances and, if the criteria for such a finding are
met, we will issue a critical circumstances finding at the earliest
possible date. See Policy Bulletin 98/4, 63 FR 55364 (October 15, 1998)
(determination of critical circumstances may be made any time after
initiation). In addition, we are considering the petitioner's request
to obtain information from CBP for monitoring purposes, and will inform
interested parties of our determination as soon as practicable.
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, or is threatened
with material injury, by reason of subsidized imports from India and
Thailand of the subject merchandise.
The petitioner contends that the industry's injured condition is
evident in lost sales and customers, in the declining trends in prices,
profits, and domestic market share, and in its reduced ability to
reinvest and pursue research and development activities. The
allegations of injury and causation are supported by relevant evidence
including U.S. import data, affidavits supporting claims of lost sales
and declining revenues, and pricing information. The petitioner also
alleges the imminent threat of further material injury based on the
likely increases in foreign production volume of bottle-grade PET
resin, the likelihood of substantially increased imports, and the
prices of these imports having the likely effect of depressing or
suppressing domestic prices.
The Department has assessed the allegations and supporting evidence
regarding material injury and causation and threat of material injury,
and has determined that these allegations are properly supported by
accurate and adequate evidence and meet the statutory requirements for
initiation. See India CVD Initiation Checklist; see also Thailand CVD
Initiation Checklist.
Initiation of Countervailing Duty Investigations
Based on our examination of the petition on bottle-grade PET resin,
and petitioner's responses to our requests for supplemental information
clarifying the petition, we have found that the petition meets the
requirements of section 702(b) of the Act. Therefore, in accordance
with section 702(b) of the Act, we are initiating two countervailing
duty investigations to determine whether manufacturers, producers, or
exporters of bottle-grade PET resin from India and from Thailand
receive countervailable subsidies. Unless the deadline is extended, we
will make our preliminary determinations no later than 65 days after
the date of this initiation.
Distribution of Copies of the Petition
In accordance with section 702(b)(3)(A) of the Act, a copy of the
public version of each petition has been provided to the
representatives of the governments of India and Thailand. We will
attempt to provide a copy of the public version of the petition to each
known exporter as provided for under 19 CFR 351.203(c)(2).
ITC Notification
We have notified the ITC of our initiations, as required by section
702(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine no later than May 10, 2004, whether there is
a reasonable indication that imports of bottle-grade PET resin from
India and Thailand are materially injuring, or threatening material
injury to, a U.S. industry. A negative ITC determination will result in
these investigations being terminated; otherwise, these investigations
will proceed according to statutory and regulatory time limits. This
notice is issued and published pursuant to section 777(i) of the Act.
Dated: April 13, 2004.
Jeffrey May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-8937 Filed 4-19-04; 8:45 am]
BILLING CODE 3510-DS-S
