Freshwater Crawfish Tail Meat From the People's Republic of China; Initiation of Antidumping Investigation

DEPARTMENT OF COMMERCE

[A-570-848]

Freshwater Crawfish Tail Meat From the People's Republic of

China; Initiation of Antidumping Investigation

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Initiation of antidumping duty investigation of freshwater

crawfish tail meat from the People's Republic of China.

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EFFECTIVE DATE: October 17, 1996.

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor at (202) 482-0666,

Elisabeth Urfer at (202) 482-4052, or Maureen Flannery at (202) 482-

4733, 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)

[[Page 54155]]

by the Uruguay Round Agreements Act (URAA). In addition, unless

otherwise indicated, all citations to the Department of Commerce (the

Department) regulations are to the current regulations as amended by

the interim regulations published in the Federal Register on May 11,

1995 (60 FR 25130).

The Petition

On September 20, 1996, the Department received a petition filed in

proper form by the Crawfish Processors Alliance (petitioner).

Petitioner amended the petition on October 7, 1996, in response to the

Department's request for additional information. On October 8, 1996,

petitioner submitted a clarification regarding the scope of the

petition. On October 10, 1996 petitioner amended the public summary of

the petition.

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

that imports of freshwater crawfish tail meat 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, an industry within the United States.

Because the petitioner is an interested party as defined under

section 771(9)(C) of the Act, it has standing to file a petition for

the imposition of antidumping duties.

Determination of Industry Support for the Petition

Section 732(c)(4)(A) of the Act requires the Department to

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.

A review of the production data provided in the petition and other

information readily available to the Department indicates that

petitioner accounts for more than 50 percent of the total production of

the domestic like product. The Department received no expressions of

opposition to the petition from any domestic producer or workers'

organization. Accordingly, the Department determines that the petition

has been filed by or on behalf of the domestic industry.

Scope of the Investigation

The product covered by this investigation is freshwater crawfish

tail meat, in all its forms (whether washed or with fat on, whether

purged or unpurged), grades, and sizes; whether frozen, fresh, or

chilled; and regardless of how it is packed, preserved, or prepared.

Excluded from the scope of the investigation are live crawfish and

other whole crawfish, whether boiled, frozen, fresh, or chilled. Also

excluded are saltwater crawfish of any type and parts thereof.

Freshwater crawfish tail meat is currently classifiable in the

Harmonized Tariff Schedule of the United States (HTS) under item

numbers 0306.19.00.10 and 0306.29.00.00. The HTS subheadings are

provided for convenience and customs purposes. Although the HTS numbers

are provided for convenience and customs purposes, the written

description of the scope of this investigation is dispositive.

Export Price

The petitioner based export price on actual FOB and CIF price

quotations from exporters of Chinese crawfish. Petitioner made

deductions to the export price for foreign inland freight, using the

average distance between cities where crawfish are processed in the PRC

and the port from which the majority of Chinese crawfish are exported.

We made no other adjustments to export price.

Normal Value

In previous investigations, the Department has determined that the

PRC is a non-market economy (NME) country within the meaning of section

771(18) of the Act. See, e.g., Final Determination of Sales at Less

Than Fair Value: Bicycles From the People's Republic of China (61 FR

19026 (April 30, 1996)). In accordance with section 771(18)(C), the

presumption of NME status for the PRC has not been revoked by the

Department and therefore remains in effect for purposes of the

initiation of this investigation. In the course of this investigation,

all parties will have the opportunity to provide relevant information

related to the NME status of the PRC as well as the assignment of

separate rates to individual exporters and other issues related to the

PRC's status as an NME country. (See, e.g., Final Determination of

Sales at Less Than Fair Value: Silicon Carbide from the PRC (59 FR

22585 (May 2, 1994).)

In antidumping investigations in which the comparison market is not

a market economy, section 773(c)(1) of the Act requires that the normal

value (NV) of the foreign like product be based on the producers'

factors of production valued in a surrogate market economy country or

countries considered to be appropriate by the Department. In accordance

with section 773(c)(4), the Department, in valuing the factors of

production, shall utilize, to the extent possible, the prices or costs

of factors of production in one or more market economies that are

significant producers of comparable merchandise and at a level of

economic development comparable to that of the NME country.

Petitioner lacked actual information relating to the factors of

production for material inputs in the PRC. Therefore, petitioner used

U.S. production factors for materials and labor as an approximation of

Chinese factors. Petitioner submitted an affidavit from a U.S. crawfish

producer, who stated that crawfish tail meat must be peeled by hand,

that peeling crawfish is a skill that can be learned, and that,

therefore, Chinese peelers should be able to peel crawfish at the same

rate as peelers in the United States. According to the U.S. producer,

Chinese facilities are very similar to the facilities and equipment

used in the United States, although, in some cases, they may be better.

Petitioner used in its calculations of NV the calculations made by the

U.S. producer with regard to the average yield, i.e., the number of

pounds of live crawfish needed to produce one pound of crawfish tail

meat; the time it takes an average crawfish peeler in the United States

to produce one pound of peeled product; and the time it takes to pack

crawfish tail meat in the United States.

With respect to the selection of a surrogate country in which to

value the factors, petitioner cites to the Notice of Preliminary

Determination of Sales at Less Than Fair Value and Postponement of

Final Determination: Melamine Institutional Dinnerware Products from

the People's Republic of China (61 FR 43337 (August 22, 1996)), and

notes that, in that case, the Department identified India, Nigeria,

Pakistan, Sri Lanka, Egypt, and Indonesia as potential surrogate

countries for China based upon level of economic development. However,

neither India nor any of these other countries is a significant

producer or processor of crawfish tail meat.

However, according to petitioner, India is an appropriate surrogate

country for valuing most of the relevant factors of production because

(1) India has a significant seafood processing industry, and (2) the

seafood processing

[[Page 54156]]

industry in India and elsewhere is comparable to the crawfish

processing industry in China in that seafood processors throughout the

world are likely to have similar factory overhead and selling, general

and administrative expenses (SG&A). Petitioner valued labor using

Indian labor rates compiled by the International Labour Organization in

its 1993 Yearbook of Labour Statistics. Petitioner based the factory

overhead, SG&A expenses, and profit elements of its NV calculation on

data from financial statements of five publicly held seafood processors

in India for the fiscal year 1995.

Petitioner argued that prices for crawfish, the primary material

input in the processing of crawfish tail meat, are not comparable to

the prices for other kinds of seafood, and therefore, the Department

should not value crawfish using Indian seafood prices. Petitioner chose

Spain as the surrogate country for purposes of valuing crawfish,

because Spain is a significant producer and processor of crawfish, is a

market economy country, and, in relation to other crawfish producing

and processing countries, has the level of economic development most

comparable to that of the PRC. Petitioner used publicly available

published information from official Spanish import data to value this

input.

Since Chinese exporters sell crawfish tail meat to the United

States at packed prices, petitioner added U.S. packing costs to NV.

Based on comparisons of export price to NV, the estimated dumping

margins range from 274 to 427 percent. 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 calculations.

Fair Value Comparisons

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

believe that imports of freshwater crawfish tail meat from the PRC are

being, or are likely to be, sold at less than fair value.

Initiation of Investigation

We have examined the petition on freshwater crawfish tail meat from

the PRC and have found that it meets the requirements of section 732 of

the Act, including the requirements concerning allegations of the

material injury or threat of material injury to a domestic industry of

a 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 freshwater crawfish

tail meat from the PRC are being, or are likely to be, sold at less

than fair value. Unless extended, we will make our preliminary

determination by February 27, 1997.

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 the PRC.

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 November 4, 1996, whether there is a

reasonable indication that imports of freshwater crawfish tail meat

from the PRC 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.

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

Dated: October 10, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-26644 Filed 10-16-96; 8:45 am]

BILLING CODE 3510-DS-P