Suspension of Antidumping Investigation: Fresh Tomatoes From Mexico

[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]

[Notices]

[Pages 56618-56621]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 96-28092]

[[Page 56617]]

_______________________________________________________________________

Part III

Department of Commerce

_______________________________________________________________________

International Trade Administration

_______________________________________________________________________

Suspension of Antidumping Investigation: Fresh Tomatoes From Mexico;

Notice

Federal Register / Vol. 61, No. 213 / Friday, November 1, 1996 /

Notices

[[Page 56618]]

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-820]

Suspension of Antidumping Investigation: Fresh Tomatoes From

Mexico

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

SUMMARY: The Department of Commerce (the Department) has suspended the

antidumping investigation involving fresh tomatoes from Mexico. The

basis for the suspension is an agreement between the Department and

producers/exporters accounting for substantially all imports of fresh

tomatoes from Mexico wherein each signatory producer/exporter has

agreed to revise its prices to eliminate completely the injurious

effects of exports of this merchandise to the United States.

EFFECTIVE DATE: November 1, 1996.

FOR FURTHER INFORMATION CONTACT: John Brinkmann or Judith Wey Rudman,

Office of AD/CVD Enforcement II, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th & Constitution

Avenue N.W., Washington, D.C. 20230; telephone (202) 482-5288 or (202)

482-0192, respectively.

SUPPLEMENTARY INFORMATION:

Background

On April 18, 1996, the Department initiated an antidumping

investigation under section 732 of the Tariff Act of 1930, (the Act),

as amended, to determine whether imports of fresh tomatoes from Mexico

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

fair value (61 FR 18377, April 25, 1996). On May 16, 1996, the United

States International Trade Commission (ITC) notified the Department of

its affirmative preliminary injury determination. At the request of

petitioners in this investigation, the Department postponed the

preliminary determination until no later than October 7, 1996 (61 FR

40607, August 5, 1996). On October 7, 1996, the Department further

postponed the preliminary determination until no later than October 28,

1996 (61 FR 53702, October 15, 1996).

The Commerce Department and the Mexican tomato growers initialed a

proposed agreement suspending this investigation on October 10, 1996.

Interested parties were informed that the Department intended to

finalize the agreement on October 28, 1996, and were invited to provide

written comments on the agreement. The following interested parties

filed comments with the Department on or before October 25, 1996:

Desert Glory, Ltd.; petitioners; the Asociacion de Agricultura, Baja

California, Mexico of San Diego, California; and the Fresh Produce

Association of the Americas.

On October 28, 1996, the Department preliminarily determined that

imports of fresh tomatoes from Mexico are being sold at less than fair

value in the United States (see, the Notice of Preliminary

Determination of Sales at Less Than Fair Value and Postponement of

Final Determination: Fresh Tomatoes from Mexico that is being published

concurrently with this notice of suspension of the investigation).

The Department and the signatory producers/exporters of fresh

tomatoes from Mexico signed the final suspension agreement on October

28, 1996.

Scope of Investigation

The products covered by this investigation are all fresh or chilled

tomatoes (fresh tomatoes) except for cocktail tomatoes and those

tomatoes which are for processing. For purposes of this investigation,

cocktail tomatoes are green-house grown tomatoes, generally larger than

cherry tomatoes and smaller than roma or common round tomatoes, and are

harvested and packaged on-the-vine for retail sale. 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 C.F.R. sections 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, all of which, with the

exception of cocktail tomatoes, are covered by this investigation.

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.

Interested Party Comments

Having analyzed all comments filed by interested parties, we

continue to conclude that the Agreement meets the requirements of the

statute. For a discussion of the Department's response to interested

party comments, see the memorandum from Barbara R. Stafford to Robert

S. LaRussa, Acting Assistant Secretary for Import Administration, dated

October 28, 1996.

Suspension of Investigation

The Department consulted with the parties to the proceeding and has

considered the comments submitted with respect to the proposed

suspension agreement. In accordance with section 734(c) of the Act, we

have determined that extraordinary circumstances are present in this

case, as defined by section 734(c)(2)(A) of the Act. (See October 28,

1996, Extraordinary Circumstances Memorandum to Robert S. LaRussa).

The suspension agreement provides that: (1) The subject merchandise

will be sold at or above the established reference price; and (2) for

each entry of each exporter, the amount by which the estimated normal

value exceeds the export price (or constructed export price) will not

exceed 15 percent of the weighted average amount by which the estimated

normal value exceeded the export price (or constructed export price)

price for all less-than-fair-value entries of the producer/exporter

examined during the course of the investigation. We have determined

that this suspension agreement will: (1) Eliminate completely the

injurious effect of exports to the United States of the subject

merchandise; and (2) prevent the suppression or undercutting of price

levels of domestic fresh tomatoes by imports of that merchandise from

Mexico.

We have also determined that the suspension agreement can be

monitored effectively and is in the public interest, pursuant to

section 734(d) of the Act. (See October 21, 1996, Public Interest

Memorandum to Robert S. LaRussa). We find, therefore, that the criteria

for suspension of the investigation pursuant to section 734(c) of the

Act have been met. The terms and conditions of the suspension

agreement, signed October 28, 1996, are set forth in Appendix I to this

notice.

[[Page 56619]]

The suspension of liquidation ordered in the preliminary

affirmative determination in this case (published concurrently with

this notice) shall continue in effect, subject to section 734(h)(3) of

the Act. Section 734(f)(2)(B) of the Act provides that the Department

may adjust the security required to reflect the effect of the

Agreement. Pursuant to this provision, the Department has found that

the Agreement eliminates completely the injurious effects of imports

and, thus, the Department is adjusting the security required from

signatories to zero. The security rates in effect for imports from non-

signatory growers remain as published in our preliminary determination.

Notwithstanding the suspension agreement, the Department will

continue the investigation if it receives such a request in accordance

with section 734(g) of the Act within 20 days after the date of

publication of this notice.

This notice is published pursuant to section 734(f)(1)(A) of the

Act.

Dated: October 28, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

Appendix I.--Suspension Agreement Fresh, Tomatoes From Mexico

Pursuant to section 734(c) of the Tariff Act of 1930, as amended

(19 U.S.C. 1673c(c)) (``the Act''), and section 353.18 of the U.S.

Department of Commerce (``the Department'') regulations (19 C.F.R.

353.18), the Department and the signatory producers/exporters of

fresh tomatoes from Mexico enter into this Suspension Agreement (the

``Agreement''). On the basis of this Agreement, the Department shall

suspend its antidumping duty investigation, the initiation of which

was published on April 25, 1996 (61 FR 18377), with respect to fresh

tomatoes from Mexico, subject to the terms and provisions set out

below.

I. Product Coverage

The merchandise subject to this Agreement is all fresh or

chilled tomatoes (fresh tomatoes) which have Mexico as their origin,

except for cocktail tomatoes and those tomatoes which are for

processing. For purposes of this Agreement, cocktail tomatoes are

green-house grown tomatoes, generally larger than cherry tomatoes

and smaller than roma or common round tomatoes, and are harvested

and packaged on-the-vine for retail sale. For purposes of this

Agreement, 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. 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 this Agreement.

II

Commercially-grown tomatoes, 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, all of which, with the exception of

cocktail tomatoes, are covered by this Agreement.

Tomatoes imported from Mexico covered by this Agreement 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, the written description of the

scope of this Agreement is dispositive.

III. U.S. Import Coverage

The signatory producers/exporters collectively are the producers

and exporters in Mexico which, during the antidumping duty

investigation of the merchandise subject to the Agreement, accounted

for substantially all (not less than 85 percent) of the subject

merchandise imported into the United States. The Department may at

any time during the period of the Agreement require additional

producers/exporters in Mexico to sign the Agreement in order to

ensure that not less than substantially all imports into the United

States are subject to the Agreement.

IV. Basis for the Agreement

Each signatory producer/exporter individually agrees that, in

order to prevent price suppression or undercutting, the producer/

exporter will not sell, on and after the effective date of the

Agreement, merchandise subject to the Agreement at prices that are

less than the reference price, in accordance with Appendix A to this

Agreement.

In order to satisfy the requirements of section 734(c)(1)(B) of

the Act, each signatory producer/exporter of fresh tomatoes from

Mexico, individually, agrees that for each entry the amount by which

the estimated normal value exceeds the export price (or the

constructed export price) will not exceed 15 percent of the weighted

average amount by which the estimated normal value exceeded the

export price (or the constructed export price) for all less-than-

fair-value entries of the producer/exporter examined during the

course of the investigation, in accordance with the calculation

methodologies described in Appendix B.

V. Monitoring of the Agreement

A. Import Monitoring

1. The Department will monitor entries of fresh tomatoes from

Mexico to ensure compliance with Section III of this Agreement.

2. The Department will review publicly-available data and other

official import data, including, as appropriate, records maintained

by the U.S. Customs Service, to determine whether there have been

imports that are inconsistent with the provisions of this Agreement.

The Department also will coordinate with U.S. Customs in its

collection and review of data in connection with the monitoring of

box-specific average weights.

B. Compliance Monitoring

1. The Department may require, and each signatory producer/

exporter agrees to provide, confirmation, through documentation

provided to the Department, that the price received on any sale

subject to this Agreement was not less than the established

reference price. The Department may require that such documentation

be provided, and be subject to verification, within 30 days of the

sale.

2. The Department may require, and each signatory producer/

exporter agrees to report, on computer tape in the prescribed format

and using the prescribed method of data compilation, each sale of

the merchandise subject to this Agreement, either directly or

indirectly to unrelated purchasers in the United States, including

each adjustment applicable to each sale, as specified by the

Department.

Each producer/exporter agrees to permit review and on-site

inspection of all information deemed necessary by the Department to

verify the reported information.

3. The Department may conduct administrative reviews under

section 751 of the Act, upon request or upon its own initiative, to

ensure that exports of fresh tomatoes from Mexico are at prices

consistent with the terms of this Agreement. The Department may

perform verifications pursuant to administrative reviews conducted

under section 751 of the Act.

C. Shipping and Other Arrangements

1. The producers/exporters shall include as part of the

documentation presented to U.S. Customs for entry of merchandise

into the United States a declaration that the entry conforms with

the requirement that the merchandise has been or will be sold at or

above the reference price.

2. All reference prices will be expressed in U.S.$/lb. in

accordance with Appendix A. Subject to paragraph 24 of Annex 703.2

of the North American Free Trade Agreement, the quality of each

entry of fresh tomatoes exported to the United States from Mexico

will conform with any applicable U.S. Department of Agriculture

minimum grade, size and/or quality import requirements in effect.

Shipments that do not meet the requirements of this agreement will

not be permitted entry into the United States.

3. Producers/exporters agree not to circumvent the Agreement.

Not later than 30 days after each quarter, each signatory producer/

exporter will submit a written statement to the Department

certifying that all sales during the most recently completed quarter

were at net prices (after rebates, backbilling, discounts for

quality and other claims) at or above the reference price and were

not part of or related to any act or

[[Page 56620]]

practice which would have the effect of hiding the real price of the

fresh tomatoes being sold (e.g., a bundling arrangement, discounts/

free goods/financing package, swap, or other exchange). Each

producer/exporter agrees to permit full verification of its

certification as the Department deems necessary.

D. Rejection of Submissions

The Department may reject any information submitted after the

deadlines set forth in this Agreement or any information which it is

unable to verify to its satisfaction. If information is not

submitted in a complete and timely fashion or is not fully

verifiable, the Department may calculate U.S. price based on facts

otherwise available, as it determines appropriate, unless the

Department determines that Section V applies.

E. Compliance Consultations

1. When the Department identifies, through import or compliance

monitoring or otherwise, that sales may have been made at prices

inconsistent with Section III of this Agreement, the Department will

notify each signatory producer/exporter which it believes is

responsible as well as the producer/exporter trade organizations

party to this Agreement. The Department will consult with each such

party for a period of up to 60 days to establish a factual basis

regarding sales that may be inconsistent with Section III of this

Agreement.

2. During the consultation period, the Department will examine

any information which it develops or which is submitted, including

information requested by the Department under Section IV.A. and B.

above.

F. Review

If the Department is not satisfied at the conclusion of the

consultation period that sales by such signatory producer/exporter

are being made in compliance with this Agreement, the Department

will conduct a review to determine whether this Agreement is being

violated by such signatory producer/exporter. This provision does

not limit or restrict the Department's authority to conduct an

administrative review under section 751 of the Act and paragraph

IV.B.3. of this Agreement.

G. Operations Consultations

During the first anniversary month of this Agreement, the

Department will consult with the signatory producers/exporters

regarding the operation of the Agreement. Consultations may be

requested by any party to the Agreement in any June or December

following the first anniversary of the Agreement. Consistent with

the statutory requirement that the Agreement prevent the suppression

or undercutting of price levels of domestic fresh tomatoes, the

Department may revise the reference price following consultations

under this provision. In particular, the Department expects to make

downward or upward adjustments to the reference price to take into

account any significant changes within the most recent semi-annual

period relevant to the period under consideration (December-May;

June-November). For example, the Department expects to make a

downward adjustment to take into account a significant change in the

relationship of domestic prices to import prices from that which

existed during the base period (as referred to in Appendix A) and

which is attributable to a decline in domestic prices. In evaluating

the significance of any change, the Department will look both to the

extent of the change and its duration. For example, a very high

percentage change in the relationship may be significant even though

it occurs over a brief time period.

VI. Violations of the Agreement

If the Department determines that the Agreement is being or has

been violated or no longer meets the requirements of section 734 (c)

or (d) of the Act, the Department shall take action it determines

appropriate under section 734(i) of the Act and the Department's

regulations.

VII. Other Provisions

A. In entering into this Agreement, the signatory producers/

exporters do not admit that any exports of fresh tomatoes from

Mexico have an injurious effect on fresh tomato producers in the

United States or have been sold at less than fair value. The

signatory producers/exporters also do not admit that green-house,

cherry or any other particular type of tomatoes are properly

considered to be within the scope of the underlying investigation.

B. The signatory producers/exporters may withdraw from this

Agreement upon 60 days written notice to the Department.

C. Upon request, the Department will advise any signatory

producer/exporter on the Department's methodology for calculating

its export price (or constructed export price) and normal value

which, for purposes of this Agreement, are described in Appendix B.

Further, the Department reserves the right to modify its methodology

in calculating export price (or constructed export price) and normal

value.

VIII. Disclosure and Comment

A. If the Department proposes to revise the reference price

under paragraph IV.G., not later than three months prior to the

first day of each semi-annual period, the Department will disclose

the results and the methodology of the Department's calculation of

the preliminary reference price established for that upcoming semi-

annual period.

B. Not later than 7 days after the date of disclosure under

paragraph VII.A., the parties to the proceeding may submit written

comments to the Department, not to exceed 15 pages. After reviewing

these submissions, the Department will provide the final reference

price for the upcoming semi-annual period, normally within 30 days

after the date of disclosure under paragraph VII.A.

C. The Department may make available to representatives of each

interested party to the proceeding, under appropriately drawn

administrative protective orders, any business proprietary

information submitted to the Department pursuant to Section IV. of

this Agreement, as well as the results of the Department's analysis

of that information.

IX. Termination

Absent affirmative determinations under the five-year review

provisions of sections 751 and 752 of the Act, the Department

expects to terminate this Agreement and the underlying investigation

no later than November 1, 2001.

X. Effective Date

The effective date of the Agreement is the date on which it is

published in the Federal Register.

For Members of Confederacion de Asociaciones Agricolas del

Estado (C.A.A.D.E.S.) and Confederacion Nacional de Productores de

Hortalizas (C.N.P.H.)

Dated: October 28, 1996.

Luis Cardenas F.,

Confederacion de Asociaciones Agricolas del Estado (C.A.A.D.E.S.)

'''''''''''''

Dated: October 28, 1996.

Basilio Gatzionis T.,

Confederacion Nacional de Productores de Hortalizas (C.N.P.H.)

For U.S. Department of Commerce.

Dated: October 28, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

Appendix A.--Fresh Tomatoes From Mexico, Suspension Agreement

The following is the methodology the Department will use when

calculating the reference price for the purposes of this Agreement.

The reference price for the initial period (effective date of

Agreement through September 30, 1997) will be calculated as follows:

The Department will determine the lowest average monthly price

for fresh tomatoes from Mexico in the United States during each year

in the base period (calendar years 1992-1994). The Department will

average these three figures to calculate one figure which will serve

as the reference price for the initial period of the Agreement. As

calculated pursuant to this methodology, the reference price for the

initial period is $5.17 for a 25 pound box ($0.2068/lb.).

The reference price from the initial period will remain in

effect unless modified in accordance with the provisions of

paragraph IV.G.

The term ``reference price'' refers to the price F.O.B. Nogales/

San Diego/Laredo from the first handler (importer/broker) to an

unrelated purchaser. Any movement expenses beyond the three Customs

district points of entry listed above must be added to the reference

price and must reflect the actual price of transportation in an arms

length transaction. Where imports are sold through affiliated

parties, the transfer price from the importer/broker (located at the

point of entry) to an affiliate must be at or above the reference

price and any subsequent sale to an unaffiliated party must reflect

mark-ups usual for the company during the period prior to this

Agreement or normal within the industry if the relationship did not

exist prior to this Agreement.

[[Page 56621]]

The reference price for each type of box shall be determined

based on the average weights used by U.S. Customs at the port of

Nogales, AZ for duty assessment purposes, with the initial weights

being those in use as of December 8, 1995. For example, if U.S.

Customs determines that the average weight of a 3-layer, 6X6 box of

tomatoes is 30 pounds, the reference price for that box will be

equal to 30/25 times the reference price then in effect. If, either

on its own or through consultations with the Department, U.S.

Customs determines to revise an average weight figure, the

Department will provide 15 days notice to signatory producers/

exporters (through the producer/exporter trade organizations party

to this Agreement) prior to such revised average weights becoming

effective for purposes of this Agreement.

In the event that a signatory producer/exporter intends to

export subject merchandise to the United States in a box for which

U.S. Customs has not assigned an average weight, the signatory

producer/exporter shall notify the Department in writing no later

than 45 days prior to the date of the first export of such boxes to

the United States. The notification shall include a complete

description of the size of the box, and the intended packing form

(i.e., 4X4, 5X5, loose pack, etc.). The Department shall allow any

interested party to submit written comments, not to exceed 10 pages,

on the appropriate average weight for the box within 7 days after

the filing of the written notification by the signatory producer/

exporter, and the Department shall inform the signatory producer/

exporter of the average weight for the box no later than 30 days

after filing of the written notification by the signatory producer/

exporter.

Appendix B.--Fresh Tomatoes From Mexico, Suspension Agreement

Normal Value

The cost or price information reported to the Department that

will form the basis of the normal value (NV) calculations for

purposes of the Agreement must be comprehensive in nature and based

on a reliable accounting system (e.g., a system based on well-

established standards and can be tied either to the audited

financial statements or to the tax return filed with the Mexican

government).

Sales Price

When we base normal value on sales prices, such prices will be

the prices at which the foreign like product is first sold for

consumption in the comparison market, in the usual commercial

quantities and in the ordinary course of trade. Also, to the extent

practicable, the comparison shall be made at the same level of trade

as the export price or constructed export price.

Constructed Value

When normal value is based on constructed value, we will compute

growing season specific constructed values (CVs) based on the sum of

each respondent's growing costs for each type of tomato, plus

amounts for selling, general and administrative expenses, U.S.

packing costs and profit. We will collect this cost data for an

entire growing season in order to accurately determine the per unit

CV of that growing season.

Export Price and Constructed Export Price

Export price (EP) and constructed export price (CEP) refer to

the two types of calculated prices for merchandise imported into the

United States. Both EP and CEP are based on the price at which the

subject merchandise is first sold to a person not affiliated with

the foreign producer or exporter.

Fair Comparisons

To ensure that a fair comparison with NV is made, the Department

will make adjustments to the price to the first unaffiliated

customer in calculating the export price or constructed export

price. For both EP and CEP the Department will add packing costs, if

not already included in the price, rebated import duties, and, if

applicable, certain countervailing duties. For both EP and CEP, the

Department will deduct transportation costs, and export taxes or

duties. In calculating CEP, the Department will make additional

deductions for commissions, direct selling expenses incurred in

selling the merchandise under investigation in the United States,

the cost of any further manufacture or assembly performed in the

United States, and a portion of profit. In addition, the Department

will deduct indirect selling expenses that relate to commercial

activity in the United States.

Normal Value

Calculation of CV

Direct Materials

+Direct Labor

+Factory overhead

---------------------------------------------

=Cost of Manufacturing

+Home Market SG & A *

---------------------------------------------

=Cost of Production

+Profit *

---------------------------------------------

=Constructed Value (CV)

* SG & A and profit are based on home market sales of a foreign like

product made in the ordinary course of trade.

Calculation of Comparison Price:

The calculation of normal value will vary depending on whether

the comparison is price-to-EP or price-to-CEP.

Export Price (EP) and Constructed Export Price (CEP)

Calculation of EP

Gross Unit Price

-Movement Expenses

-Discounts and Rebates

---------------------------------------------

=Export Price (EP)

Calculation of CEP

Gross Unit Price

-Movement Expenses

-Discounts and Rebates

-Direct Selling Expenses

-Indirect Selling Expenses that relate to commercial activity in the

U.S.

-The cost of any further manufacture or assembly incurred in the U.S.

-CEP Profit

------------------------------------------------------------------------

=Constructed Export Price (CEP)

[FR Doc. 96-28092 Filed 10-31-96; 8:45 am]

BILLING CODE 3510-DS-P