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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-843]

Initiation of Antidumping Duty Investigation: Bicycles From the

People's Republic of China

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: May 1, 1995.

FOR FURTHER INFORMATION CONTACT: Shawn Thompson or Cameron Werker at

(202) 482-1776 or (202) 482-3874, Office of Antidumping Investigations,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue NW.,

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

On April 5, 1995, the Department of Commerce (the Department)

received a petition filed in proper form by Huffy Bicycle Company,

Murray Ohio Manufacturing Co., and Roadmaster Corporation (the

petitioners), three U.S. producers of bicycles. Supplements to the

petition were filed on April 20 and 24, 1995.

In accordance with section 732(b) of the Act, the petitioners

allege that imports of bicycles 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 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. [[Page 21066]]

Determination of Industry Support for the Petition

Section 732(c) of the Act, as amended by the URAA, 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 those minimum requirements if

(1) domestic producers or workers who support the petition account for

at least 25 percent of the total production of the domestic like

product; and (2) those domestic producers or workers expressing support

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.

A review of production data provided in the petition reveals that

the petitioners, three known domestic producers of the domestic like

product as defined in the petition, account for more than 25 percent of

the total production of the domestic like product and for more than 50

percent of that produced by companies expressing support for, or

opposition to, the petition. Accordingly, the Department determines

that this petition is supported by the domestic industry.

Scope of the Investigation

The product covered by this investigation is bicycles of all types,

whether assembled or unassembled, complete or incomplete, finished or

unfinished, including industrial bicycles, tandems, recumbents, and

folding bicycles. For purposes of this investigation, the following

terms are defined as follows irrespective of any different definition

that may be found in Customs rulings, U.S. Customs law, or the

Harmonized Tariff Schedule of the United States (HTSUS): (1) The term

``unassembled'' means fully or partially unassembled or disassembled;

(2) the term ``incomplete'' means lacking one or more parts or

components with which the complete bicycle is intended to be equipped;

and (3) the term ``unfinished'' means wholly or partially unpainted or

lacking decals or other essentially aesthetic material. Specifically,

this investigation is intended to cover: (1) Any assembled complete

bicycle, whether finished or unfinished; (2) any unassembled complete

bicycle, if shipped in a single shipment, regardless of how it is

packed and whether it is finished or unfinished; and (3) any incomplete

bicycle, defined for purposes of this investigation as a frame and fork

set, assembled or unassembled, finished or unfinished, and imported in

the same shipment with any two of the following components, whether or

not assembled together with the frame and fork set: (a) The rear wheel;

(b) the front wheel; (c) a rear derailleur; (d) a front derailleur; (e)

any one caliper or cantilever brake; (f) an integrated brake lever and

shifter, or separate brake lever and click stick lever; (g) crankset;

(h) handlebars, with or without a stem; (i) chain; (j) pedals; and (k)

seat (saddle), with or without seat post and seat pin.

The scope of this investigation is not intended to cover bicycle

parts except to the extent that they are attached to or in the same

shipment as an unassembled complete bicycle or an incomplete bicycle,

as defined above.

Complete bicycles are classifiable under subheadings 8712.00.15,

8712.00.25, 8712.00.35, 8712.00.44, and 8712.00.48 of the 1995 HTSUS.

Incomplete bicycles, as defined above, may be classified for tariff

purposes under any of the aforementioned HTSUS subheadings covering

complete bicycles or under HTSUS subheadings 8714.91.20-8714.99.80,

inclusive (covering various bicycle parts). The HTSUS subheadings are

provided for convenience and customs purposes. The written description

of the scope of this investigation is dispositive.

Export Price and Normal Value

Export price was based on retail prices observed in the United

States in mid-1994. The petitioners adjusted the starting prices for

retail gross margin, the importer's selling expenses (used as a

surrogate for importer's mark-up), foreign inland freight, CIF movement

charges, and U.S. customs duty.

The petitioners assert that the PRC is a non-market economy (NME)

within the meaning of sections 771(18) of the Act and in accordance

with section 773(c) of the Act. Accordingly, the normal value of the

product 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 this investigation. 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 construct normal value from the

factors of production of those factories that produced bicycles 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 issues of

the PRC's NME status and the granting 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 petitioners based the PRC producers' factors of production

(i.e., raw materials, labor, and energy) for bicycles on research

conducted by a private consulting firm in the PRC. The petitioners

valued these factors, where possible, on a publicly available published

Indonesian government survey of the bicycle manufacturing and/or

bicycle component industries in Indonesia, the surrogate country

selected. Indonesia was selected as the surrogate country because (1)

its level of economic development is comparable to that of the PRC, and

(2) it is a significant producer of bicycles.

For each of the bicycle models used in the fair value comparisons,

certain components are imported from the market-economy countries where

they are produced. In those instances, the petitioners valued the

components in question based on the F.O.B. foreign port prices that the

petitioners pay, as they state their prices are equal to or less than

the prices paid by any other bicycle manufacturer in the world.

The petitioners also based factory overhead, and selling, general,

and administrative expenses on data published by the Indonesian

government on the bicycle manufacturing industry.

The petitioners based profit on a publicly available published

study of the Indonesian bicycle industry.

Based on a comparison of the export prices to the factors of

production, the average calculated dumping margin is 74.95 percent.

Fair Value Comparisons

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

believe that imports of bicycles from the PRC are being, or 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, we may

review the calculations.

Initiation of Investigation

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

meets the requirements of section 732 of the Act, including the

requirements concerning the material injury or threat of material

injury to the domestic producers of a domestic like product by reason

of the complained-of imports, [[Page 21067]] allegedly sold at less

than fair value. Therefore, we are initiating an antidumping duty

investigation to determine whether imports of bicycles from the PRC are

being, or are likely to be, sold in the United States at less than fair

value. Unless extended, we will make our preliminary determination by

September 12, 1995.

Distribution of Copies of the Petition

In accordance with section 732(b)(3)(A) of the Act, copies of the

public version of the petition have been provided to the

representatives of the PRC.

ITC Notification

We have notified the International Trade Commission (ITC) of our

initiation, as required by section 732(d) of the Act.

Preliminary Determination by the ITC

The ITC will determine by May 22, 1995, whether there is a

reasonable indication that imports of bicycles 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.

Dated: April 25, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-10647 Filed 4-28-95; 8:45 am]

BILLING CODE 3510-DS-P