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###### Department of Commerce

###### International Trade Administration

          - [A-570-868]

# AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

# EFFECTIVE DATE:

May 24, 2001.

# FOR FURTHER INFORMATION CONTACT:

Helen Kramer or Steve Bezirganian, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0405 or (202) 482-1131, respectively.

## Initiation of Investigation

### 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 April 27, 2001, the Department of Commerce (“the Department”) received a petition filed in proper form by Meco Corporation (“petitioner”). On May 10 and May 16, 2001, petitioner submitted clarifications of the petition. The petitioner is a producer of folding metal tables and chairs. In accordance with section 732(b) of the Act, the petitioner alleges that imports of folding metal tables and folding metal chairs 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                               ( print page 28729)                            within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to, the U.S. industry.                    

The petitioner is the sole domestic producer of folding metal tables and accounts for over 25 percent of domestic production of folding metal chairs, as defined in the petition. The petitioner has standing to file the petition because it is an interested party, as defined under section 771(9)(C) of the Act, with respect to the subject merchandise.

### Determination of Industry Support for the Petition

                        Section 771(4)(A) of the Act defines the “industry” as the producers of a domestic like product. Thus, when determining the degree of industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The 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] 

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 subtitle.” 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.

The petition covers folding metal tables and folding metal chairs as defined in the Scope of the Investigation section, below, and alleges that this constitutes a single class or kind of merchandise. The petitioner defines the domestic like product as the class or kind of merchandise covered by the scope of the investigation. The Department has no basis on the record at this time to find the petitioner's definition of the domestic like product to be inaccurate. The Department, therefore, has adopted the domestic like product definition set forth in the petition for the purposes of initiation. However, the Department will take into account any comments submitted by parties in connection with this issue during the course of the proceeding, and revisit the issue, if appropriate.

Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets 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. Finally, section 732(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 administering agency shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition as required by subparagraph (A), or (ii) determine industry support using a statistically valid sampling method.

In this case, the Department has determined that the petition (and subsequent amendments) contain adequate evidence of industry support; therefore, polling is unnecessary. See Initiation Checklist at Attachment III on Industry Support. Petitioner claims that it is the sole U.S. producer of the folding metal chairs within the domestic like product and that it, along with five other companies are the U.S. manufacturers of the folding metal chairs within the domestic like product. To estimate total domestic production of folding tables and chairs, the petitioners relied on actual production information for itself and two other producers and estimated production volumes for the three remaining producers. The Department confirmed the reasonableness of petitioner's estimates through direct calls to the other members of the domestic industry. See Memorandum to the File from Helen M. Kramer, May 17, 2001. Based on this information, we have concluded that the petition has support from producers representing more than 50 percent of U.S. production of folding tables and chairs.

We note that the data we collected for purposes of determining industry support included separate data for folding metal tables as compared to folding metal chairs. We further note that these data plainly indicate that, even if the Department were to treat folding metal tables as a separate domestic like product from folding metal chairs, there would still be adequate domestic industry support for each like product category. See Initiation Checklist at Attachment III on Industry Support.

## Scope of the Investigation

The merchandise subject to this investigation consists of assembled and unassembled folding tables and folding chairs made primarily or exclusively from steel or other metal, as described below:

(1) Assembled and unassembled folding tables made primarily or exclusively from steel or other metal (“folding metal tables”). Folding metal tables include square, round, rectangular, and any other shapes with legs affixed with rivets, welds, or any other type of fastener, and which are made most commonly, but not exclusively, with a hardboard top covered with vinyl or fabric. Folding metal tables have legs that mechanically fold independently of one another, and not as a set. The subject merchandise is commonly, but not exclusively, packed singly, in multiple packs of the same item, or in five piece sets consisting of four chairs and one table. Specifically excluded from the scope of folding metal tables are the following:
      - Lawn furniture;
      - Trays commonly referred to as “TV trays”;
      - Side tables;
      - Child-sized tables;
      - Portable counter sets consisting of rectangular tables 36″ high and matching stools; and
      - Banquet tables. A banquet table is a rectangular table with a plastic or laminated wood table top approximately 28″ to 36″ wide by 48″ to 96″ long and with a set of folding legs at each end of the table. One set of legs is composed of two individual legs that are affixed together by one or more cross-braces using welds or fastening hardware. In contrast, folding metal tables have legs that mechanically fold independently of one another, and not as a set.

                        (2) Assembled and unassembled folding chairs made primarily or exclusively from steel or other metal (“folding metal chairs”). Folding metal chairs include chairs with one or more cross-braces, regardless of shape or size, affixed to the front and/or rear legs with                               ( print page 28730)                            rivets, welds or any other type of fastener. Folding metal chairs include: those that are made solely of steel or other metal; those that have a back pad, a seat pad, or both a back pad and a seat pad; and those that have seats or backs made of plastic or other materials. The subject merchandise is commonly, but not exclusively, packed singly, in multiple packs of the same item, or in five piece sets consisting of four chairs and one table. Specifically excluded from the scope of folding metal chairs are the following:                    
      - Folding metal chairs with a wooden back or seat, or both;
      - Lawn furniture;
      - Stools;
      - Chairs with arms; and
      - Child-sized chairs.

The subject merchandise is currently classifiable under subheadings 9401710010, 9401710030, 9401790045, 9401790050, 9403200010 and 9403200030 of the HTSUS. Although the HTSUS subheadings are provided for convenience and U.S. Customs Service purposes, the Department's written description of the merchandise is dispositive.

As discussed in the preamble to the Department's regulations (62 FR 27323), we are setting aside a period for parties to raise issues regarding product coverage. The Department encourages all parties to submit such comments by June 6, 2001. Comments should be addressed to Import Administration's Central Records Unit at Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, Attention: Helen M. Kramer. 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.

## Export Price and Normal Value

The following are descriptions of the allegations of sales at less than fair value upon which our decision to initiate is based. Petitioner has provided separate margin calculations for folding metal chairs and folding metal tables. 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 prices on quotations during the period of investigation (POI) from two Chinese producers of folding metal chairs and five-piece sets consisting of a folding metal table and four folding metal chairs. The price quotes were FOB Chinese port. Petitioner estimated the export prices for tables using the price offered for complete sets. Petitioner allocated the price for the set to the individual components on the basis of relative normal value. The petitioner did not deduct an amount from these prices for transportation from the plant to the port.

## 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 this investigation, 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 the subject merchandise on its own experience, claiming that its production process is similar to that of the Chinese producers. Based on information petitioner obtained from Chinese producers of the subject merchandise during visits to their factories, petitioner states that they are sourcing cold-rolled carbon steel flat products from Taiwan as the major material input. Petitioner used the average unit value of Chinese imports from Taiwan of certain types of cold-rolled carbon steel flat products during the POI for the major material input. Remaining material inputs were valued by the petitioner, where possible, using Indian import data for the period April through December 1998, adjusted to eliminate imports from NME countries and very low quantity imports, and adjusted for inflation. Utility inputs were valued using published data for India, adjusted for inflation. 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 the subject merchandise. Lacking information on the distances required to transport inputs to the Chinese factories, petitioner used 0.5 percent of the input value to estimate transportation of the direct materials from the supplier or port to the plant.

Based on comparisons of export price to the factors of production, the calculated dumping margins ranged from 21.31 percent to 82.46 percent. See Initiation Checklist at Attachment I.

## Fair Value Comparisons

Based on the data provided by the petitioner, there is reason to believe that imports of folding metal tables and folding metal chairs from the PRC are being, or are likely to be, sold at less than fair value.

## Allegations and Evidence of Material Injury and Causation

The petition alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the individual and cumulated imports of the subject merchandise sold at less than NV. The petitioner contends that the industry's injured condition is evident in the declining trends in employment, net operating profits, net sales volumes, profit-to-sales ratios, and capacity utilization. The allegations of injury and causation are supported by relevant evidence including lost sales and pricing information. We have assessed the allegations and supporting evidence regarding material injury and causation, and have determined that these allegations are properly supported by accurate and adequate evidence and meet the statutory requirements for initiation (see Initiation Checklist at Attachment II Re: Material Injury).

## Initiation of Investigation

                        We have examined the petition on folding metal tables and chairs 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 imports allegedly sold at less than fair value. Therefore, we are initiating an antidumping duty investigation to determine whether imports of folding metal tables and folding metal chairs from the PRC are being, or are likely to be, sold in the United States at less than                               ( print page 28731)                            fair value. Unless the investigation is extended, we will make our preliminary determination by October 4, 2001.                    

## 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 and the clarifications to 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 initiation, as required by section 732(d) of the Act.

## Preliminary Determinations by the ITC

The ITC will determine by June 11, 2001, whether there is a reasonable indication that imports of folding metal tables and folding metal chairs from the PRC are causing material injury, or threatening to cause material injury, to a U.S. industry. A negative ITC determination will result in termination of the investigation. Otherwise, the investigation will proceed according to statutory and regulatory time limits.

This notice is published pursuant to section 777(i) of the Act.

Dated: May 17, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.

# Footnotes

1.                                 See                             *Algoma Steel Corp. Ltd.*, v.                             *United States*, 688 F. Supp. 639, 642-44 (CIT 1988); 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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[FR Doc. 01-13166 Filed 5-23-01; 8:45 am]

BILLING CODE 3510-DS-P