Initiation of Antidumping Duty Investigation: Glycine From the People's Republic of China

DEPARTMENT OF COMMERCE

[A-570-836]

Initiation of Antidumping Duty Investigation: Glycine From the

People's Republic of China

AGENCY: Import Administration, International Trade Administration,

Commerce.

EFFECTIVE DATE: July 28, 1994.

FOR FURTHER INFORMATION CONTACT: Julie Anne Osgood or David Boyland,

Office of Countervailing Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W., Washington, D.C., 20230 at (202)

482-0167 and (202) 482-0588, respectively.

INITIATION OF INVESTIGATION:

The Petition

On July 1, 1994, we received a petition in proper form filed by

Hampshire Chemical Corporation (``Hampshire'') and Chattem Inc.,

Chemicals Division (``Chattem'') (hereinafter ``petitioners'').

Petitioners filed a supplement to the petition on July 21, 1994.

In accordance with 19 CFR 353.12, petitioners allege that imports

of glycine, or aminoacetic acid, 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 Tariff

Act of 1930, as amended (``the Act''), and that such imports are

materially injuring, or threatening material injury to, a U.S.

industry.

Petitioners state that they have standing to file the petition

because Hampshire and Chattem are interested parties, as defined under

section 771(9)(C) of the Act, and are the only two U.S. producers of

glycine known to petitioners. If any interested party, as described

under paragraphs (C), (D), (E), or (F) of section 771(9) of the Act,

wishes to register support for, or opposition to, this petition, it

should file a written notification with the Assistant Secretary for

Import Administration.

Scope of Investigation

The product covered by this investigation is glycine which is a

free-flowing crystalline material, like salt or sugar. Glycine is

produced at varying levels of purity and is used as a sweetener/taste

enhancer, a buffering agent, reabsorbable amino acid, chemical

intermediate, and a metal complexing agent. Glycine is currently

classified under subheading 2922.49.4020 of the Harmonized Tariff

Schedule of the United States (``HTSUS''). The scope of this

investigation includes glycine of all purity levels. Although the HTSUS

subheading is provided for convenience and Customs purposes, our

written description of the scope of this proceeding is dispositive.

United States Price and Foreign Market Value

Petitioners based United States Price (``USP'') on four price

quotes with various terms of sale and Bureau of Census import

statistics for glycine from the PRC. For purposes of this initiation,

we have relied on the 1994 price quotes (two of the four price quotes

provided) and on the Bureau of Census import statistics since they are

contemporaneous with the calculated foreign market value and more

proximate with the period of investigation. Petitioners deducted

foreign inland freight, ocean freight and marine insurance, and U.S.

inland freight from the price quotes to arrive at an ex-factory unit

value for imports. In using the import statistics, petitioners deducted

foreign inland freight from the value to arrive at an ex-factory unit

value.

Petitioners contend that the foreign market value (``FMV'') of

glycine subject to this investigation must be determined in accordance

with section 773(c) of the Act, which concerns nonmarket economy

(``NME'') countries. The Department has determined the PRC to be an

NME, within the meaning of section 771(18)(A) of the Act, in previous

cases (see e.g., Final Determination of Sales at Less Than Fair Value:

Sebacic Acid from the PRC, May 31, 1994 (59 FR 28053)). In accordance

with 771(18)(C) of the Act, that determination continues to apply for

purposes of this initiation.

In the course of this investigation, parties will have the

opportunity to address this NME determination and provide relevant

information and argument on this issue. Consistent with section

773(c)(1)(B) of the Act (see Amendment to Final Determination of Sales

at Less Than Fair Value and Amendment to Antidumping Duty Order:

Chrome-Plated Lug Nuts from the People's Republic of China, 57 FR 15052

(April 24, 1992)), parties will have the opportunity in this

investigation to submit comments on whether FMV should be based on

prices or costs.

In accordance with section 773(c) of the Act, FMV in NME cases is

based on NME producers' factors of production valued in a market

economy country. In this case, to determine FMV, petitioners relied on

the factors of production used by Chattem since Chattem's production

process is believed to be similar to the PRC producers' manufacturing

process.

In valuing the factors of production, petitioners used India and

Pakistan as surrogate countries. For purposes of this initiation, we

have accepted India and Pakistan as surrogates because their economies

are at a level of development comparable to the PRC's. (See Memorandum

to David L. Binder, Director-Division II, Office of Antidumping

Investigations from David P. Mueller, Director, Office of Policy, dated

August 1993, regarding non-market economy status and surrogate country

selection, on file in Room B-099 of the Department of Commerce.) Also,

there is evidence on the record that India is a producer of comparable

merchandise, as required by section 773(c)(4) of the Act. When cost

information was not available in either of these countries, petitioners

valued the factor using Chattem's own costs.

In accordance with section 773(c)(1)(B) of the Act, petitioners'

FMV consisted of the sum of values assigned to materials, labor,

energy, overhead, and packing. Petitioners adjusted certain factor

values for inflation and currency exchange rates. Pursuant to section

773(e)(1) of the Act, petitioners added to the labor and material

costs, and general expenses, the statutory minimum of eight percent for

profit.

Fair Value Comparisons

Based on the data provided by petitioners, there is reason to

believe that glycine from the PRC is being, or is likely to be, sold at

less than fair value. The comparison of USP and FMV in the petition

indicates margins ranging from 86.43 percent to 155.89 percent. If it

becomes necessary at a later date to consider the petition as a source

of best information available (``BIA''), we may review these

calculation bases.

Initiation of Investigation

We have examined the petition on glycine and have found that it

meets the requirements of section 732(b) of the Act. Therefore, we are

initiating an antidumping duty investigation to determine whether

imports of glycine from the PRC are being, or are likely to be, sold in

the United States at less than fair value.

International Trade Commission (``ITC'') Notification

Section 732(d) of the Act requires us to notify the ITC of these

actions, and we have done so.

Preliminary Determination by the ITC

The ITC will determine by August 15, 1994, whether there is a

reasonable indication that imports of glycine from the PRC are causing

material injury, or threaten to cause material injury, to a U.S.

industry. A negative ITC determination will result in the investigation

being terminated; otherwise, this investigation will proceed according

to statutory and regulatory time limits.

This notice is published pursuant to section 732(c)(2) of the Act

and 19 CFR 353.13(b).

Dated: July 21, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-18314 Filed 7-27-94; 8:45 am]

BILLING CODE 3510-DS-P