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[Federal Register Volume 61, Number 81 (Thursday, April 25, 1996)]
[Notices]
[Pages 18377-18378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10112]

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COMMISSION ON CIVIL RIGHTS
DEPARTMENT OF COMMERCE
[A-201-820]

Initiation of Antidumping Duty Investigation: Fresh Tomatoes From 
Mexico

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: April 25, 1996.

FOR FURTHER INFORMATION CONTACT: John Brinkmann at (202) 482-5288 or 
Michelle Frederick at (202) 482-0186, 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 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

    Pursuant to 19 CFR 353.12(c), an antidumping duty petition must be 
filed at the Department of Commerce (the Department) and the U.S. 
International Trade Commission (ITC) on the same day. In this instance, 
the ITC does not consider the petition covering fresh tomatoes from 
Mexico to have been filed until April 1, 1996. As such, the Department 
considers the petition as having been filed in proper form on April 1, 
1996, not March 29, 1996.
    The petitioners filed supplements to the petition, including an 
amended list of petitioners, on April 11 and 17, 1996. The petitioners 
in this investigation are: the Florida Tomato Growers Exchange; the 
Florida Tomato Exchange; the Tomato Committee of the Florida Fruit and 
Vegetable Association; the South Carolina Tomato Association; the 
Gadsden County Tomato Growers Association; and an Ad Hoc Group of 
Florida, California, Georgia, Pennsylvania, South Carolina, and 
Virginia Tomato Growers, as detailed in Exhibit 5 of the April 11, 
1996, supplement.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of fresh tomatoes from Mexico 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, a U.S. 
industry.
    The petitioners state that they have standing to file the petition 
because they are interested parties as defined under section 771(9)(C) 
of the Act.

Determination of Industry Support for the Petition

    Section 732(c)(4)(A) of the Act requires that the Department 
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.
    One producer has informed the Department that it takes no position 
regarding this antidumping petition and a second producer has stated 
that it opposes the petition. On April 16, 1996, we received a letter 
on behalf of the Confederacion de Asociaciones Agricolas de Estado de 
Sinaloa (CAADES), an association of producers of fresh tomatoes in 
Mexico. The CAADES objections focus on the level of individual 
supporters of the petition and did not address the support of the 
Florida and South Carolina trade associations.
    Our review of the production data provided in the petition and 
other information readily available to the Department indicates that 
the petitioners and supporters of the petition account for more than 50 
percent of the total production of the domestic like product, thus 
meeting the standard of 732(c)(4)(A) and requiring no further action by 
the Department pursuant to 732(c)(4)(D). Accordingly, the Department 
determines that the petition is supported by the domestic industry.
    Several supporters of the petition did not agree to release their 
identities to the public. The production data of these supporters was 
not necessary to establish that the petitioners account for more than 
50 percent of the total production of the domestic like product. For 
this reason, we are not determining whether to consider non-public 
supporters of a petition in establishing industry support.

Scope of the Investigation

    The products covered by this investigation are all fresh or chilled 
tomatoes (fresh tomatoes) except for those tomatoes which are for 
processing. For purposes of this investigation, processing is defined 
to include preserving by any commercial process, such as canning, 
dehydrating, drying or the addition of chemical substances, or 
converting the tomato product into juices, sauces or purees. Further, 
imports of fresh tomatoes for processing are accompanied by an 
``Importer's Exempt Commodity Form'' (FV-6) (within the meaning of 7 
CFR section 980.501(a)(2) and 980.212(i)). Fresh tomatoes that are 
imported for cutting up, not further processed (e.g., tomatoes used in 
the preparation of fresh salsa or salad bars), and not accompanied by 
an FV-6 form are covered by the scope of this investigation.
    All commercially-grown tomatoes sold in the United States, both for 
the fresh market and for processing, are classified as Lycopersicon 
esculentum. Important commercial varieties of fresh tomatoes include 
common round, cherry, plum, and pear tomatoes.
    Tomatoes imported from Mexico covered by this investigation are 
classified under the following subheadings of the Harmonized Tariff 
Schedules of the United States (HTS), according to the season of 
importation: 0702.00.20, 0702.00.40, 0702.00.60, and 9906.07.01 through 
9906.07.09. Although the HTS numbers are provided for convenience and 
Customs purposes, our written description of the scope of this 
proceeding is dispositive.

Export Price and Normal Value

    The petitioners based export prices on prices published by the U.S. 
Department of Agriculture (USDA) Marketing Service. These prices 
represented packed, F.O.B. shipping point prices,

[[Page 18378]]

duties, and border crossing charges paid for mature green, vine ripe, 
and plum tomatoes of various sizes imported from Mexico through 
Nogales, Arizona. The petitioners made deductions to export price for 
movement expenses and commissions. They provided additional export 
price calculations incorporating adjustments for ``backbilling'' (post-
sale price protection adjustments), quality mix differentials, and 
price ``overstatements'' based on differences between USDA data and 
Bureau of Census import statistics.
    The petitioners based normal value on wholesale prices for vine 
ripe and plum tomatoes from several wholesale markets in Mexico, as 
published by the USDA marketing service. The petitioners made 
adjustments to home market prices for wholesaler markups, commissions, 
and movement expenses.
    To calculate monthly normal values for comparisons to monthly 
export prices, the petitioners based normal value on both home market 
prices and constructed value (CV) because, in accordance with Section 
773(b)(2) of the Act, the petitioners alleged that some sales of fresh 
tomatoes in the home market were made at prices below the cost of 
production (COP), and therefore are not an appropriate basis for 
calculating normal value.
    The petitioners calculated COP using data derived from cost studies 
of vine-ripe tomato production in Mexico prepared by the USDA, which 
relied on cost studies reported by an association of Mexican tomato 
producers. Where appropriate, the petitioners adjusted the cost data 
for inflation, changes in interest rates, and currency conversion. We 
adjusted the petitioners' COP by correcting the deduction for selling 
expenses.
    The allegation that the Mexican producers are selling the foreign 
like product in the home market at prices below its COP is based upon a 
comparison of the adjusted home market prices with the calculated COP. 
Based on this comparison, we find reasonable grounds to believe or 
suspect that sales of the foreign like product were made at prices 
below COP in accordance with section 773(b)(2)(A)(i) of the Act. 
Accordingly, the Department is initiating a country-wide cost 
investigation.
    Therefore, for the purposes of this initiation, we are accepting CV 
as the appropriate basis for Mexican normal value for those petition 
margin examples where the petitioners claimed that there are no above-
cost sales in the home market. The petitioners based CV on its COP 
methodology, described above, deducting commission and export 
transportation expenses included in these costs, and adding an amount 
for profit to derive a total CV. The petitioners calculated profit 
based on above-cost Mexican market prices. We revised CV by 
incorporating the correction to selling expenses deducted from COP. We 
also recalculated the profit amount used in CV based on a revised 
database of above cost sales in the home market.
    Based on comparisons of export prices, with deductions for 
backbilling adjustments and ``price overstatements,'' to normal value 
(with CV revised as discussed above), the petitioners allege margins of 
12.86 percent to 273.42 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of fresh tomatoes from Mexico are being, or are 
likely to be, sold at less than fair value. If it becomes necessary at 
a later date to consider the petition as a source of facts available 
under section 776 of the Act, we may further review the margin 
calculations in the petition.

Initiation of Investigation

    We have examined the petition on fresh tomatoes and have found that 
it meets the requirements of section 732 of the Act, including the 
requirements concerning allegations of material injury or threat of 
material injury to the domestic producers of a domestic like product by 
reason of the complained-of imports, allegedly sold at less than fair 
value. Therefore, we are initiating an antidumping duty investigation 
to determine whether imports of fresh tomatoes from Mexico are being, 
or are likely to be, sold at less than fair value. Unless extended, we 
will make our preliminary determination by September 5, 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 Mexico. Because of the large number of exporters, 
we will attempt to provide a copy of the public version of the petition 
to the relevant trade associations representing exporters of fresh 
tomatoes named in the petition.

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 May 16, 1996, whether there is a 
reasonable indication that imports of fresh tomatoes from Mexico are 
causing material injury, or threatening to cause material injury, to a 
U.S. industry. A negative ITC determination will result in the 
investigation being terminated; otherwise, the investigation will 
proceed according to statutory and regulatory time limits.

    Dated: April 18, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-10112 Filed 4-24-96; 8:45 am]
BILLING CODE 3510-DS-P
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