(65 FR 11549, March 3, 2000)
                                                              A-588-815
                                                              Sunset Review
                                                              Public Document

MEMORANDUM TO: Joseph A. Spetrini
               Acting Assistant Secretary
                for Import Administration

FROM:          Jeffrey A. May
               Director
               Office of Policy

SUBJECT:       Issues and Decision Memorandum for the Sunset Review of Gray
               Portland Cement and Cement Clinker from Japan; Final Results

Summary

We have analyzed the substantive responses of interested parties in the
expedited sunset review of the antidumping duty order covering gray portland
cement and cement clinker from Japan. We recommend that for our expedited final
results you approve the positions we have developed in the Discussion of the
Issues section of this memorandum. Below is the complete list of the issues in
this expedited sunset review for which we received substantive responses by
parties:

1. Likelihood of continuation or recurrence of dumping:
   Weighted-average dumping margin
   Volume of imports
   Other factors

2. Magnitude of the margin likely to prevail
   Margins from investigation
   Use of a more recent margin

History of Order:

The antidumping duty order on gray portland cement and clinker from Japan was
published in the Federal Register on May 10, 1991 (56 FR 21658), as amended.(1)
In the order, the Department announced the weighted-average dumping margins for
the following companies: Onoda Cement Co. Ltd ("Onoda"): 70.52; Nihon Cement
Co., Ltd ("Nihon")(2): 69.89; and all others: 70.23 percent.

The Department has conducted several administrative reviews since that
time.(3) The order remains in effect for all manufacturers and exporters of the
subject merchandise. We note that the Department has not conducted a duty-
absorption investigation pertaining to the imported subject merchandise.

Background:

On August 2, 1999, the Department initiated a sunset review of the antidumping
duty order on gray portland cement and cement clinker from Japan (64 FR 41915)
pursuant to section 751(c)(6)(A)(i) of the Tariff Act of 1930, as amended ("the
Act"). On August 16, 1999, the Department received a Notice of Intent to
Participate on behalf of the Committee for Fairly Traded Japanese Cement ("the
Committee"), an ad hoc association of manufacturers of the domestic like
product, within the deadline specified in section 351.218(d)(1)(i) of the
Sunset Regulations. In its notice of intent to participate, the Committee
indicated that none of its members is related to a Japanese producer/exporter
of the subject merchandise or to a U.S. importer of the subject merchandise.

We received a complete substantive response on behalf of the Committee on
September 1, 1999. The Committee claimed interested party status, under section
771(9)(E) of the Act, as an ad hoc trade or business association, a majority of
whose members manufacture, produce, or wholesale the domestic like products.(4)
The Department received the Committee's substantive response within the 30-day
deadline specified in the Sunset Regulations under section 351.218(d)(3)(i).

In its September 1, 1999, substantive response at 4, the Committee notes that
each of its members intends to participate in the instant review and that its
predecessor, the Ad Hoc Committee of Southern California Producers of Gray
Portland Cement ("Ad Hoc Committee"),(5) filed the petition in the original
antidumping investigation. The Committee also states that the Ad Hoc Committee
actively participated in every facet of the subsequent administrative reviews
of the order including appeals before the United States Court of International
Trade. Id.

We did not receive a substantive response from any respondent interested party
to this proceeding. Consequently, pursuant to section 351.218(e)(1)(ii)(C) of
the Sunset Regulations, the Department determined to conduct an expedited, 120-
day, review of this 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). This review concerns a
transition order within the meaning of section 751(c)(6)(C)(ii) of the Act.
Therefore, on December 3, 1999, the Department determined that the sunset
review of the antidumping duty order on gray portland cement and cement clinker
from Japan is extraordinarily complicated and extended the time limit for
completion of the final results of this review until not later than February
28, 2000, in accordance with section 751(c)(5)(B) of the Act.(6)

Discussion of the Issues

In accordance with section 751(c)(1) of the Act, the Department conducted this
expedited sunset review to determine whether revocation of the antidumping duty
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 duty order. In addition, section 752(c)(3) of the Act provides that
the Department shall provide to the International Trade Commission ("the
Commission") the magnitude of the margin of dumping likely to prevail if the
order is revoked.

Below we address the issues raised in substantive responses of interested
parties.

1. Likelihood of Continuation or Recurrence of Dumping

Interested Parties' Substantive Responses:

The Committee argues that dumping of the subject merchandise will resume if
the antidumping duty order were revoked. The Committee illustrates that dumping
continued at levels above de minimis since the issuance of the order. At the
same time, the Committee notes that imports of the subject merchandise declined
substantially immediately after the issuance of the order, and in some
instances, imports virtually ceased. (See September 1, 1999 Substantive
Response of the Committee at 1 - 2 and 5 - 16.)

With respect to continued dumping of the subject merchandise, the Committee
points to the weighted-average dumping margins found in the Department's three
administrative reviews of the order.(7) Although the margins determined in
three administrative reviews were lower than those in the investigation, the
Committee argues that the Japanese manufacturers/exporters achieved the lower
margins in administrative reviews by selectively exporting only to the U.S.
markets where the price of the domestic like product is relatively high.(8) In
short, the Committee contends that Japanese manufacturers/exporters are simply
unable to ship the subject merchandise to the United States without dumping. Id.

As for import volumes, the Committee states that imports of the subject
merchandise have declined dramatically since the issuance of the order and that
imports were almost non-existent during 1995 - 1997. Moreover, according to the
Committee, since 1997, the Japanese manufacturers/exporters have shipped the
subject merchandise only three times, the sum of which represents about one
percent of pre-order volumes. In addition, the Committee asserts that exports
of Japanese cement clinker completely ceased after the imposition of the
order.(9) In light of the fact that Japan is the world's leading exporter of
cement and that U.S. imports of cement products from all countries have risen
to record levels in recent years,(10) the Committee asserts that the reduced
import volumes of the subject merchandise since the issuance of the order
demonstrates that Japanese manufacturers/exporters are unable to export
meaningful quantities of the subject merchandise to the United States without
dumping. Id.

The committee also states that, since the third review, Nihon, Onoda, and
Chichibu Cement Co. Ltd. ("Chichibu") merged to form Taiheyo Cement Corporation
("Taiheiyo") - currently the largest Japanese producer of cement. Id.

The Committee further claims that Onoda's success in lowering its dumping
margins is not indicative of, nor is it relevant to, Taiheiyo's likely course
of action should the Department revoke the order because Taiheiyo is a new
entity.(11) In addition, the Committee argues that Japanese
manufacturers/exporters' ownership of import terminals in California(12)
contribute to the likelihood that the Japanese manufacturers/exporters of
portland cement would return to pre-order practice of dumping in the absence of
the order.

Department's Position:

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 antidumping 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 an order is likely to lead to continuation or recurrence of
dumping where a respondent interested party waives its participation in the
sunset review. In the instant review, the Department did not receive a response
from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of
the Sunset Regulations, this constitutes a waiver of participation.

As indicated in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890,
and House Report at 63-64, the Department considers whether dumping continued
at any level above de minimis after the issuance of the order. If companies
continue dumping with the discipline of an order in place, the Department may
reasonably infer that dumping would continue were the discipline removed. After
examining the published findings pertaining to the weighted-average dumping
margins from previous administrative reviews, the Department agrees with the
Committee that dumping above de minimis levels has persisted over the life of
the order.(13)

Consistent with section 752(c) of the Act, in addition, the Department also
considered import volumes of the subject merchandise before and after the
issuance of the order. The data supplied by the Committee and those of the
United States Census Bureau IM146 and the Commission indicate that, since the
imposition of the order, import volumes of the subject merchandise have
declined substantially. In the year preceding the initiation of the original
antidumping investigation, 1989, the import volume of the subject merchandise
was 2,291 metric tons. In 1992, the year following the order, the import volume
was 278 metric tons, about 12 percent of the pre-order volume. Moreover, during
1994 - 1998, the average import volume of the subject merchandise was 7 metric
tons.(14) Therefore, we agree with the Committee that the import volumes of the
subject merchandise decreased significantly after the issuance of the order.
Given that dumping continued over the life of the order, that import volumes of
the subject merchandise decreased significantly after the issuance of the
order, and that Japanese manufacturers/exporters waived their right to
participate in the instant review, we agree with the Committee's contention
that dumping is likely to continue if the order is revoked.

2. Magnitude of the Margin Likely to Prevail

Interested Parties' Substantive Responses:

In its substantive response, at 17 - 25, the Committee argues that the likely-
to-prevail dumping margins should be ones from the original investigation
because there is no increasing trend in the post-order import volumes nor a
decreasing trend in the weighted-average dumping margins to support the use of
a more recently calculated margin.

The Committee further notes that the newly formed company, Taiheiyo, was never
subject to an administrative review and, consequently, the Department has never
determined a company-specific rate for Taiheiyo. As such, the Committee claims
that the Department should treat Taiheiyo as a new shipper and apply the all-
others rate from the original investigation. Id.

In addition, the Committee argues that Taiheiyo is not the successor-in-
interest to either Nihon or Chichibu-Onoda.(15) After the merger, according to
the Committee, both Nihon and Chichibu-Onoda underwent significant changes;
neither company assumed a dominant role in Taiheiyo; Taiheiyo's production
facilities will undergo significant changes; and Taiheiyo must alter its
distribution system as per its agreement with the Japanese Fair Trade
Commission. The Committee states that, therefore, Taiheiyo is a new, hybrid
entity and, consequently, that Taiheiyo should be assigned the all-others rate
from the original investigation rather than one of the lower rates determined
for Onoda in subsequent administrative reviews. Id.

Department's Position:

In the Sunset Policy Bulletin, the Department stated that it will normally
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.)

The Department, in its final determination in the original investigation
established both company-specific and all-others weighted-average dumping
margins.(16) We note that the Department has not conducted a duty-absorption
investigation with respect to the subject merchandise imported.

The Department agrees with the Committee's contention that the likely-to-
prevail margins are those from the original investigation. Absent argument or
evidence to the contrary, we determine that the margins from the original
investigation are probative of the behavior of Japanese manufacturers/exporters
without the discipline of the order.

We note that we have not previously determined whether Taiheiyo is the
successor-in-interest to either Nihon or Onoda. Thus, we agree with the
Committee that, for purposes of this sunset review, Taiheiyo is a new shipper
to which we normally apply the all-others rate from the original investigation.

Therefore, we will report to the Commission the rates as contained in the
Final Results of Review section of this notice.

Final Results of Review

Based on the above analysis, the Department finds that revocation of the
antidumping order would likely lead to continuation or recurrence of dumping
at the margins listed below:

------------------------------------------------------------

Manufacturer/Exporter----------------------- Margin (percent)
Nihon--------------------------------------- 69.89
Onoda--------------------------------------- 70.52
All others---------------------------------- 70.23

------------------------------------------------------------

Recommendation

Based on our analysis of the substantive responses, we recommend adopting all
of the above positions. If these recommendations are accepted, we will publish
the final results of review in the Federal Register.

AGREE____ DISAGREE____

______________________________________

Joseph A. Spetrini
Acting Assistant Secretary
 for Import Administration

____________________________

(Date)

1. See Antidumping Duty Order and Amendment to Final Determination of Sales at
Less Than Fair Value: Gray Portland Cement and Clinker From Japan, 56 FR 21658
(May 10, 1991), as amended, Amended Final Determination of Sales at Less Than
Fair Value and Antidumping Order: Gray Portland Cement and Clinker From Japan,
60 FR 39150 (August 1, 1995).

2. Myojo Cement Co., Ltd. and Daiichi Cement Co., Ltd., which are affiliates
of Nihon, are assigned the same margin as that of Nihon.

3. See Gray Portland Cement and Clinker From Japan; Final Results of
Antidumping Duty Administrative Review, 58 FR 48826 (September 20, 1993), as
amended, Gray Portland Cement and Clinker From Japan; Amendment of Final
Results of Antidumping Duty Administrative Review, 58 FR 53705 (October 18,
1993); Gray Portland Cement and Clinker From Japan; Final Results of
Antidumping Duty Administrative Review, 60 FR 43761(August 23, 1995); and Gray
Portland Cement and Clinker From Japan; Final Results of Antidumping Duty
Administrative Review, 61 FR 67308 (December 20, 1996). All these reviews
covered only one Japanese manufacturer/exporter of the subject merchandise,
Onoda.

4. The Committee's membership consists of Calaveras Cement, Hanson Permanente
Cement, National Cement Co. of California, Inc., RMC Lonestar, Southdown, Inc.,
and TXI-Riverside Cement Co.

5. The Ad Hoc Committee consisted of National Cement Company and Southwestern
Portland Cement, to which Southdown, Inc. is a successor.

6. See Extension of Time Limit for Final Results of Five-Year Reviews, 64 FR
67847 (December 3, 1999).

7. See footnote 3, supra. The weighted-average dumping margins determined by
the Department in its three administrative reviews are as follows: first review
- 33.95 (as amended); second review - 24.27 percent; and third review - 30.12
percent.

8. According to the Committee, the Japanese manufacturers/exporters basically
discarded the highly competitive California market, which was their primary
destination during the pre-order period. Instead, after the issuance of the
order, the Japanese manufacturers/exporters have been exporting to the Alaska,
Oregon, and Washington markets, which bear higher prices for the cement product
than does the California market (e.g., during 1991-1994, the average price per
metric ton of portland cement in the Alaska, Oregon, and Washington was 30 to
57 percent higher than the price in California). (See the Committee's
substantive response at 10 - 12 and Attachment F.)

9. In other words, Japanese manufacturers/exporters have been exporting only
gray portland cement since the imposition of the order.

10. The Committee states that from 1992 to 1998, U.S. imports of cement
products from all nations increased by nearly 300 percent (from 6.4 million
short tons to 25.6 million short tons). (See the Committee's substantive
response at 15 and Attachment J.) To illustrate its point further, the
Committee notes that Japanese manufacturers/exporters' market share of the
subject merchandise in the United States declined from 9.7, 13.5, and 11.5
percent in 1988, 1989, and 1990, respectively, to 0.00 percent in 1991 through
1997 and to 0.1 percent in 1998. Id.

11. As noted above, Onoda was the only company subject to the Department's
administrative review. According to the Committee, since the last
administrative review, in 1994, Onoda merged with Chichibu to form Chichibu-
Onoda. Then in 1998, Chichibu-Onoda and Nihon merged to form Taiheiyo.

12. Taiheiyo owns California Portland Cement Company ("CPC"), which operates
an import terminal in California and a floating cement storage silo at the port
of Stockton. Also, Mitsubishi Materials Corp. owns MCC-Lucky import terminal at
Long Beach, California.

13. See footnote 7, supra.

14. Data from the Commission indicate that the import volumes of the subject
merchandise during the period 1989 through 1998 are as follows: 1989 - 2,291;
1990 - 1,906; 1991 - 300; 1992 - 278; 1993 - 43; 1994 - 14; 1995 - 0; 1996 - 0;
1997 - 0; and 1998 - 21 (the investigation was initiated in 1990, and the order
was imposed in 1991).

15. See footnote 11, supra.

16. See footnote 1, supra.