Initiation of Antidumping Duty Investigation: Fresh Tomatoes From Mexico

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