[Federal Register Volume 61, Number 65 (Wednesday, April 3, 1996)]
[Notices]
[Pages 14740-14742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8022]
[A-570-845, A-570-846]
Initiation of Antidumping Duty Investigations: Certain Brake
Drums and Certain Brake Rotors From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: April 3, 1996.
FOR FURTHER INFORMATION CONTACT: Katherine Johnson at (202) 482-4929 or
James Terpstra at (202) 482-3965, Office of Antidumping Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, DC 20230.
Initiation of Investigations
The Applicable Statute
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'').
The Petition
On March 7, 1996, the Department of Commerce (``the Department'')
received a petition filed in proper form by The Coalition for the
Preservation of American Brake Drum and Rotor Aftermarket Manufacturers
(``petitioner''), whose members consist of Brake Parts, Inc., Iroquois
Tool Systems, Inc., and Wagner Brake Corporation, a Division of Wagner
Electric Corp. (domestic producers of both brake drums and rotors) and
Kinetic Parts Manufacturing, Inc. (domestic producer of brake rotors).
In accordance with section 732(b) of the Act, the petitioner
alleges that imports of both brake drums and brake rotors 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 are materially injuring,
or threatening material injury to, respective U.S. industries.
The petitioner is a coalition, the majority of whose members are
producers of both domestic like products as defined in the petition.
Therefore, it has standing to file the petition because it is an
interested party, as defined under section 771(9)(E) of the Act, with
respect to both products.
Determination of Industry Support for the Petition
Section 732(c)(4)(A) of the Act requires the Department to
determine, prior to the initiation of an investigation, that a minimum
percentage of the domestic industry supports an antidumping petition. A
petition meets these minimum requirements 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.
A review of the production data provided in the petition and other
information readily available to the Department indicates that the
petitioner accounts for more than 50 percent of the total production of
each of the domestic like products. The Department received no
expressions of opposition to the petition from any domestic producer or
workers. Accordingly, the Department determines that the petition is
supported by the respective domestic industries.
Scope of the Investigations
The products covered by these two investigations are 1) certain
brake drums and 2) certain brake rotors.
Brake Drums
Brake drums are made of gray cast iron, whether finished,
semifinished, or unfinished, ranging in diameter from 8 to 16 inches
(20.32 to 40.64 centimeters) and in weight from 8 to 45 pounds (3.63 to
20.41 kilograms). The size parameters (weight and dimension) of the
brake drums limit their use to the following types of motor vehicles:
automobiles, all-terrain vehicles, vans and recreational vehicles under
``one ton and a half,'' and light trucks designated as ``one ton and a
half.''
Finished brake drums are those that are ready for sale and
installation without any further operations. Semi-finished drums are
those on which the surface is not entirely smooth, and has undergone
some drilling. Unfinished drums are those which have undergone some
grinding or turning.
These brake drums are for motor vehicles, and do not contain in the
casting a logo of an original equipment manufacturer (OEM) which
produces vehicles sold in the United States (e.g., General Motors,
Ford, Chrysler, Honda, Toyota, Volvo). Brake drums covered in this
investigation are not certified by OEM producers of vehicles sold in
the
[[Page 14741]]
United States. The scope also includes composite brake drums that are
made of gray cast iron, which contain a steel plate, but otherwise meet
the above criteria.
Brake drums are classifiable under subheading 8708.39.5010 of the
Harmonized Tariff Schedule of the United States (HTSUS). Although the
HTSUS subheading is provided for convenience and Customs purposes, our
written description of the scope of this investigation is dispositive.
Brake Rotors
Brake rotors are made of gray cast iron, whether finished,
semifinished, or unfinished, ranging in diameter from 8 to 16 inches
(20.32 to 40.64 centimeters) and in weight from 8 to 45 pounds (3.63 to
20.41 kilograms). The size parameters (weight and dimension) of the
brake rotors limit their use to the following types of motor vehicles:
automobiles, all-terrain vehicles, vans and recreational vehicles under
``one ton and a half,'' and light trucks designated as ``one ton and a
half.''
Finished brake rotors are those that are ready for sale and
installation without any further operations. Semi-finished rotors are
those on which the surface is not entirely smooth, and has undergone
some drilling. Unfinished rotors are those which have undergone some
grinding or turning.
These brake rotors are for motor vehicles, and do not contain in
the casting a logo of an original equipment manufacturer (OEM) which
produces vehicles sold in the United States (e.g., General Motors,
Ford, Chrysler, Honda, Toyota, Volvo). Brake rotors covered in this
investigation are not certified by OEM producers of vehicles sold in
the United States. The scope also includes composite brake rotors that
are made of gray cast iron, which contain a steel plate, but otherwise
meet the above criteria.
Brake rotors are classifiable under subheading 8708.39.5010 of the
Harmonized Tariff Schedule of the United States (HTSUS). Although the
HTSUS subheading is provided for convenience and Customs purposes, our
written description of the scope of this investigation is dispositive.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which our decisions to initiate are based.
Petitioners have provided separate margin calculations for brake drums
and brake rotors. Should the need arise to use any of this information
in our preliminary or final determinations, we will re-examine the
information and may revise the margin calculations, if appropriate.
Export Price
The petitioner based export price on prices charged by U.S.
distributors of Chinese brake drums and brake rotors, and deducted from
these prices a distributor mark-up. In addition, the petitioner
deducted an amount for freight, insurance and duties based on the
percentage difference between the c.i.f. price and the Customs value
price of PRC imports of like products during the POI.
Normal Value
The petitioner asserts that the PRC is a nonmarket economy country
(NME) within the meaning of section 771(18) of the Act. Thus, pursuant
to section 773(c) of the Act and in accordance with the Department's
usual practice with respect to NMEs, the normal value of the products
should be based on the producer's factors of production, valued in a
surrogate market economy country. In previous investigations, the
Department has determined that the PRC is an NME, and the presumption
of NME status continues for the initiation of these investigations.
See, e.g., Final Determination of Sales at Less Than Fair Value: Pure
Magnesium and Alloy Magnesium from the People's Republic of China, 60
FR 16437 (March 30, 1995).
It is our practice in NME cases to calculate normal value based on
the factors of production of those factories that produced subject
merchandise sold to the United States during the period of
investigation.
In the course of these investigations, all parties will have the
opportunity to provide relevant information related to the NME status
of the PRC and the assignment of separate rates to individual
exporters. See, e.g., Final Determination of Sales at Less Than Fair
Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994).
The petitioner based the factors of production (i.e., raw
materials, labor, and energy) for brake drums and brake rotors on its
own experience, claiming that its production process is similar to that
of the Chinese producers. These factors were valued by the petitioner,
where possible, using publicly available published Indian data. India
is an acceptable surrogate country because its level of economic
development is comparable to that of the PRC and it is a producer of
both brake drums and brake rotors.
Where Indian data were unavailable, the petitioner valued the
factor of production on the basis of its own costs. Except as noted
below for the ferromanganese input, we disregarded factor values where
the inputs were based on prices in the United States because the
petitioner (1) failed to follow the Department's established hierarchy
regarding selection of surrogate countries for the PRC with respect to
factor valuation by failing to examine possible values in other
appropriate surrogate countries, and (2) provided no basis for
determining that United States values are representative of the
appropriate surrogate country values. See Initiation of Antidumping
Duty Investigations: Furfuryl Alcohol from the People's Republic of
China, the Republic of South Africa, and Thailand, 59 FR 32953, 32954,
June 27, 1994.
Because of the similarity in production processes, the petitioner
valued factory overhead, selling general, and administrative expenses
and profit using data from a State Department cable contained in the
public record of the Final Results of the Antidumping Administrative
Review: Certain Iron Construction Castings from the People's Republic
of China, 57 FR 10644 (March 27, 1992.)
To value the ferromanganese input, the petitioner used its own
costs. Although the petitioner was able to identify an Indian value for
this input material, it rejected this value claiming that it was not
representative of the true price of ferromanganese. The petitioner
claimed that the use of its own cost of ferromanganese was not only
conservative, but comparable to world prices for this commodity
product.
We excluded from our petition analysis the margin calculation of a
particular model for which the petitioner was unable to provide a
surrogate value for purchased castings.
Based on comparisons of export price to the factors of production,
the calculated dumping margins, as revised by the Department, ranged
from 46.76 percent to 105.56 percent for brake drums and from 52.08
percent to 62.55 percent for brake rotors.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of brake drums and brake rotors from the PRC are
being, or are likely to be, sold at less than fair value.
Initiation of Investigations
We have examined the petition on brake drums and brake rotors and
have found that it meets the requirements of section 732 of the Act,
including the requirements concerning allegations of the material
injury or threat of material injury to the domestic producers of
domestic like products by reason of the
[[Page 14742]]
complained-of imports, allegedly sold at less than fair value.
Therefore, we are initiating antidumping duty investigations to
determine whether imports of brake drums and brake rotors from the PRC
are being, or are likely to be, sold in the United States at less than
fair value. Unless the investigations are extended, we will make our
preliminary determinations by August 14, 1996.
Distribution of Copies of the Petition
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.
International Trade Commission (ITC) Notification
We have notified the ITC of our initiations, as required by section
732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will determine by April 22, 1996, whether there is a
reasonable indication that imports of brake drums and brake rotors from
the PRC are causing material injury, or threatening to cause material
injury, to a U.S. industry. A negative ITC determination in either of
the investigations will result in that investigation being terminated;
otherwise, the investigations will proceed according to statutory and
regulatory time limits.
Dated: March 27, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-8022 Filed 4-2-96; 8:45 am]
BILLING CODE 3510-DS-P
