[Federal Register Volume 66, Number 37 (Friday, February 23, 2001)]
[Notices]
[Pages 11266-11268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-4541]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-857, A-201-828]


Notice of Initiation of Antidumping Duty Investigations: Welded 
Large Diameter Line Pipes From Mexico and Japan

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

ACTION: Initiation of antidumping duty investigations.

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EFFECTIVE DATE: February 23, 2001.

FOR FURTHER INFORMATION CONTACT: Rick Johnson (Mexico) or Nancy Decker 
(Japan) at (202) 482-3818 and (202) 482-0196, respectively; Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.

Initiation of Investigations

The Applicable Statute and Regulations

    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). In addition, unless otherwise 
indicated, all citations to the Department's regulations are references 
to the provisions codified at 19 CFR Part 351 (2000).

The Petitions

    On January 10, 2001, the Department of Commerce (the Department) 
received petitions filed in proper form by the following parties: Berg 
Steel Pipe Corp., American Steel Pipe Division of American Cast Iron 
Pipe Company, and Stupp Corporation (collectively ``petitioners''). 
Additionally, one other domestic producer, although a non-petitioner, 
issued a statement supporting the petition. The Department received 
information from the petitioners supplementing the petition on January 
22, January 24, January 26, and January 29, 2001.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of welded large diameter line pipes (hereafter 
referred to as LDLP)

[[Page 11267]]

from Mexico and Japan 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 an industry 
in the United States.
    The Department finds that the petitioners filed these petitions on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) of the Act and have demonstrated 
sufficient industry support with respect to each of the antidumping 
investigations that they are requesting the Department to initiate (see 
the Determination of Industry Support for the Petitions section below).

Scope of Investigations

    The product covered by this investigation is welded carbon and 
alloy line pipe, of circular cross section and with an outside diameter 
greater than 16 inches in diameter, whether or not stencilled. This 
product is normally produced according to American Petroleum Institute 
(API) specifications, including Grades A25, A, B, and X grades ranging 
from X42 to X80, but can also be produced to other specifications. The 
product currently is classified under U.S. Harmonized Tariff Schedule 
(HTSUS) item numbers 7305.11.10.30, 7305.11.10.60, 7305.11.50.00, 
7305.12.10.30, 7305.12.10.60, 7305.12.50.00, 7305.19.10.30. 
7305.19.10.60, and 7305.19.50.00. Although the HTSUS item numbers are 
provided for convenience and customs purposes, the written description 
of the scope is dispositive. Specifically not included within the scope 
of this investigation is American Water Works Association (AWWA) 
specification water and sewage pipe.
    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 February 20, 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. 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.

Determination of Industry Support for the Petitions

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite 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\
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    \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 Therefore 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.
    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.
    For Mexico and Japan, the petitioners established industry support 
representing over 50 percent of total production of the domestic like 
product. Therefore, the domestic producers or workers who support the 
petition account for at least 25 percent of the total production of the 
domestic like product, and the requirements of section 732(c)(4)(A)(i) 
are met. Furthermore, because the Department received no opposition to 
the petition, the domestic producers or workers 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 732(c)(4)(A)(ii) are also met.
    Accordingly, the Department determines that the petitions were 
filed on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act. See Industry Support Attachment to the Initiation 
Checklist.

Mexico

Normal Value

    The Mexican producers named in the petition are Procarsa SA de CV, 
Productora Mexicana de Tuberia SA de SV, Tubacero SA, Tuberia Laguna SA 
de CV, and Tubesa SA de CV. In order to calculate normal value (NV), 
the petitioners provided an affidavit and supporting documentation 
listing home market price quotes from one Mexican producer for 
merchandise which falls within the scope of the petition. These quotes 
were obtained by a foreign market researcher during the period of 
investigation. Based on the terms of the price quotes, petitioners made 
no adjustments to normal value.

Export Price

    The petitioners based export price (EP) on average unit value (AUV) 
data gathered from IM-145 import statistics. Using the month of 
September 2000, they compared the one HTSUS ten-digit category which 
corresponds to the products described in the calculation of NV. 
Petitioners maintain that this methodology is appropriate because the 
NV was based on price quotes which would be most contemporaneous with 
September entries. For the purposes of initiation, the Department has 
based EP on the weighted-average AUVs for the HTSUS category 
corresponding to the HTSUS category used as the basis for NV using all 
available data for the calendar year 2000 (i.e., January through 
November). This decision is consistent with Department practice in 
other cases in which import statistics were used as

[[Page 11268]]

the basis for EP. See, e.g., Initiation of Antidumping Duty 
Investigations: Certain Hot-Rolled Carbon Steel Flat Products From 
Argentina, India, Indonesia, Kazakhstan, the Netherlands, the People's 
Republic of China (the PRC), Romania, South Africa, Taiwan, Thailand, 
and Ukraine, et. al., 65 FR 77568, 77571 (December 12, 2000).
    Petitioners then deducted an amount for foreign inland freight, 
which was a simple average of the separate freight quotes from a 
Mexican producer, to arrive at a net EP. However, for the purposes of 
initiation, the Department has adjusted petitioners' foreign inland 
freight calculation. Specifically, we have adjusted for the difference 
in distances between: (1) The rate supplied by petitioners; and (2) the 
distance between the Mexican producer from which the rates were 
obtained and the presumed ports of export for the merchandise, based on 
the actual U.S. ports of entry. See Attachment B to the Initiation 
Checklist.
    Based upon the comparison of EP to NV, the petitioners' estimated 
dumping margin, as adjusted by the Department, is 49.86 percent.

Japan

Normal Value

    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV for sales in Japan on CV because they could not 
obtain corresponding home market prices. The petitioners calculated CV 
by using publicly available cost information from a Japanese producer, 
information from a U.S. surrogate, and other sources. The amount 
calculated for CV consisted of COM and SG&A expenses. Consistent with 
773(e)(2) of the Act, the petitioners added to CV an amount for profit 
which was based upon a Japanese producer's financial statements.

Export Price

    The petitioners were unable to obtain specific sales or offers for 
sale of subject merchandise in the United States. Therefore, the 
petitioners based EP on the average unit values (``AUV'') for one ten-
digit category of the HTSUS accounting for approximately 40 percent of 
in-scope imports for consumption from Japan. The petitioners calculated 
the import AUV using the reported quantity and customs value for 
imports as recorded in the U.S. Census Bureau's official IM-145 import 
statistics. In their calculation of estimated dumping margins, the 
petitioners based EP on import statistics covering the first three 
quarters of 2000. For the purposes of initiation, the Department has 
based EP on the weighted-average AUVs for the HTSUS category 
corresponding to the HTSUS category used as the basis for NV using all 
available data for the calendar year 2000 (i.e., January through 
November). This decision is consistent with Department practice in 
other cases in which import statistics were used as the basis for EP. 
See, e.g., Initiation of Antidumping Duty Investigations: Certain Hot-
Rolled Carbon Steel Flat Products From Argentina, India, Indonesia, 
Kazakhstan, the Netherlands, the People's Republic of China (the PRC), 
Romania, South Africa, Taiwan, Thailand, and Ukraine, et. al., 65 FR 
77568, 77571 (December 12, 2000). We note that customs import value as 
defined by Technical Documentation for US Exports and Imports of 
Merchandise on CD-ROM excludes U.S. import duties, freight, insurance 
and other charges incurred in bringing the merchandise to the United 
States.
    Based upon the comparison of EP to CV, the petitioners calculated 
an estimated dumping margin of 30.80 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of LDLP from Mexico and Japan are being, or are 
likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitions allege 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 petitioners contend 
that the industry's injured condition is evident in the significant 
increases in imports of LDLP from Mexico and Japan, a shrinking portion 
of market share, and declining volumes in production, shipment, and 
capacity utilization. The allegations of injury and causation are 
supported by relevant evidence including U.S. Customs import data, 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 Antidumping Investigations

    Based upon our examination of the petitions on LDLP, and the 
petitioners' responses to our supplemental questionnaire clarifying the 
petitions, we have found that they meet the requirements of section 732 
of the Act. Therefore, we are initiating antidumping duty 
investigations to determine whether imports of LDLP from Mexico and 
Japan are being, or are likely to be, sold in the United States at less 
than fair value. Unless this deadline is extended, we will make our 
preliminary determinations no later than 140 days after the date of 
this initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(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 Mexico and Japan. We will attempt 
to provide a copy of the public version of each petition to each 
exporter named in the petition, as appropriate.

International Trade Commission 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, no later than February 24, 2001, whether 
there is a reasonable indication that imports of LDLP from Mexico and 
Japan are causing material injury, or threatening to cause material 
injury, to a U.S. industry. A negative ITC determination for any 
country will result in the investigation being terminated with respect 
to that country; 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. Effective January 20, 2001, Bernard T. Carreau is fulfilling 
the duties of the Assistant Secretary for Import Administration.

    Dated: January 30, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, AD/CVD Enforcement II.
[FR Doc. 01-4541 Filed 2-22-01; 8:45 am]
BILLING CODE 3510-DS-P