Initiation of Antidumping Duty Investigations: Collated Roofing Nails From the People's Republic of China, the Republic of Korea, and Taiwan

DEPARTMENT OF COMMERCE

International Trade Administration

(A-570-850, A-580-827, and A-583-826)

Initiation of Antidumping Duty Investigations: Collated Roofing

Nails From the People's Republic of China, the Republic of Korea, and

Taiwan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: December 20, 1996.

FOR FURTHER INFORMATION CONTACT: Dorothy Tomaszewski at (202) 482-0631

or Everett Kelly at (202) 482-4194, Import Administration--Room B099,

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

Street and Constitution Avenue, N.W., Washington, DC 20230.

Initiation of Investigations

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 November 26, 1996, the Department of Commerce (``the

Department'') received a petition filed in proper form by Paslode

Division of Illinois Tool Works Inc. (``petitioner''). The Department

received supplemental information to the petition on December 11, 1996,

and December 16, 1996.

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

that imports of Collated Roofing Nails (``CR nails'') from the People's

Republic of China (``PRC''), the Republic of Korea (``Korea''), and

Taiwan 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 in the United States.

The Department finds that petitioner has standing to file the

petition because it is an interested party as defined in section

771(9)(C) of the Act.

Scope of Investigations

The products covered by these investigations are CR nails made of

steel, having a length of \13/16\ inch to 1-\13/16\ inches (or 20.64 to

46.04 millimeters), a head diameter of 0.330 inch to 0.415 inch (or

8.38 to 10.54 millimeters), and a shank diameter of 0.100 inch to 0.125

inch (or 2.54 to 3.18 millimeters), whether or not galvanized, that are

collated with two wires.

CR nails within the scope of these investigations are classifiable

under the Harmonized Tariff Schedule of the United States (``HTSUS'')

subheading 7317.00.55.05. Although the HTSUS subheading is provided for

convenience and customs purposes, our written description of the scope

of these investigations is dispositive.

Determination of Industry Support for the Petition

Section 732(b)(1) of the Act requires that petitions be filed on

behalf of the domestic industry. In this regard, 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 the antidumping petition. A petition meets

the 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.

Section 771(4)(A) of the statute defines the ``industry'' as the

producers of a domestic like product. Thus, to determine whether the

petition has the requisite industry support, the statute directs the

Department to look to producers and workers who account for production

of the domestic like product. The International Trade Commission

(``ITC''), which is responsible for determining whether ``the domestic

industry'' has been injured, must also determine what constitutes a

domestic like product in order to define the industry. However, while

both the Department and the ITC must apply the same statutory

definition of domestic like product, they do so for different purposes

and pursuant to separate and distinct authority. In addition, the

Department's determination is subject to limitations of time and

information. Although this may result in different definitions of the

like product, such

[[Page 67307]]

differences do not render the decision of either agency contrary to the

law.1

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\1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp.

639, 642-44 (CIT 1988); High Information Content Flat Panel Displays

and Display Glass Therefor from Japan: Final Determination;

Rescission of Investigation and Partial Dismissal of Petition, 56

Fed. Reg. 32376, 32380-81 (July 16, 1991) (``Flat Panel Displays'').

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Section 771(10) of the Act defines domestic like product as ``a

product that is like, or in the absence of like, most similar in

characteristics and uses with, the article subject to an investigation

under this title.'' Thus, the reference point from which the like

product analysis begins is ``the article subject to an investigation,''

i.e., the class or kind of merchandise to be investigated, which

normally will be the scope as defined in the petition.

As noted earlier, the petition is limited to collated roofing

nails. The Department has no basis on the record to find this

definition clearly inaccurate. In this regard, we have found no basis

on which to reject petitioner's representations that there are clear

dividing lines, in terms of characteristics and uses, between the

collated roofing nails under investigation on the one hand and, on the

other hand, other collated nails and bulk roofing nails. (See December

16, 1996, Memorandum to the File). The Department has, therefore,

adopted the like product definition set forth in the petition.

Our review of the production data provided in the petition and

other production information obtained by 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 section 732(c)(4)(A) of the Act. The Department

received no expressions of opposition to the petition from any domestic

producers or workers. Accordingly, the Department determines that the

petition is supported by the domestic industry.

Export Price and Normal Value

The following are descriptions of the allegations of sales at less

than fair value upon which our decisions to initiate are based. Should

the need arise to use any of this information in our preliminary or

final determinations, we will re-examine the information and may revise

the margin calculations, if appropriate.

PRC

Petitioner based export price on FOB and CIF price quotations

during August and September 1996 from PRC CR nails manufacturers for

the sale of 1'' and 1\1/4\'' CR nails. Absent more specific

international freight and marine insurance data, CIF prices were

reduced for insurance and freight based on the percentage difference

between Customs and CIF values reported for U.S. imports of collated

nails from PRC to Los Angeles using August 1996 IM-145 Import

Statistics for collated nails entered under HTSUS subheading

7317.00.55.05.

With respect to normal value, petitioner asserts that the PRC is a

non-market economy (``NME'') within the meaning of section 771(18) of

the Act. In previous investigations, the Department has determined that

the PRC is an NME and, in accordance with section 771(18)(c)(I) of the

Act, the presumption of NME status continues for the initiation of this

investigation. See, e.g., Final Determination of Sales at Less than

Fair Value: Bicycles from the PRC, 61 FR 19026 (April 30, 1996).

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 accordance with section 773(c) of the Act.

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).

It is the Department's practice in NME cases to calculate NV based

on the factors of production of the factories that produced CR nails

sold to the United States during the period of investigation.

Petitioner based the PRC producers' factors of production as

defined by section 773(c)(3) of the Act (i.e., raw materials, labor,

energy, and packing) for CR nails on petitioner's own usage amounts,

adjusted for known differences in production processes. In accordance

with section 773(c)(4) of the Act, petitioner valued these factors,

where possible, on publicly available published Indian data. Where this

data was unavailable, petitioner used other acceptable sources of

information.

Petitioner stated that because (1) the per-capita gross national

product of India and the PRC are relatively close, and (2) the

Department considered India and the PRC to be economically comparable

in past investigations, the two countries may be considered

economically comparable for purposes of this investigation. Further,

petitioner stated that India is a producer of comparable merchandise.

Petitioner based surrogate values of material factors on Indian

import statistics data and prices published in the Indian chemical

trade publication, Chemical Weekly. Surrogate labor values were

calculated from information on the public record of a previous

antidumping duty investigation, Final Determination of Sales at Less

Than Fair Value: Heavy Forged Hand Tools, Finished or Un-Finished, With

or Without Handles from the PRC, 56 FR 241, 245 (January 3, 1991).The

surrogate value of electricity was based on an average rate for Indian

industries reported in the Confederation of Indian Industry

publication, Handbook of Statistics 1995. Petitioner based the

surrogate value of water on the Asian Development Bank's Water

Utilities Data Book for the Asian and Pacific Region.

Petitioner based factory overhead, general expenses, and profit on

data contained in the ``Reserve Bank of India Bulletin,'' April 1995.

Based on comparisons of export price to normal value, the

calculated dumping margins for CR nails from the PRC, after certain

corrections deemed appropriate by the Department, range from 106.08 to

118.41 percent ad valorem.

Korea

Petitioner based export price on CNF price quotations from a CR

nails manufacturer in Korea for sale of 1-inch and 1\1/4\-inch CR

nails. Petitioner adjusted the CNF price quotations by subtracting

estimated freight charges based on a quotation that petitioner obtained

from an international freight carrier.

With respect to normal value, petitioner provided information

showing that the Korean market was not viable. Petitioner also provided

evidence that Germany was the largest third country market. Therefore,

petitioner based normal value on CNF price quotations for the sale of

CR nails in Germany.

Based on comparisons of export price to normal value, the

calculated dumping margin, revised by the Department to include an

additional U.S. price quotation not originally used in the margin

calculation in the petition, for CR nails from Korea range from 75.17

to 103.45 percent ad valorem.

Taiwan

Petitioner based export price on CIF price quotations for June 1996

from two Taiwan CR nail manufacturers for the sale of 1-inch and 1\1/

4\-inch CR nails to the United States. Absent more specific

international freight and marine insurance data, petitioner adjusted

the

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CIF price quotations based on the percentage difference between the

Customs value and CIF value reported for U.S. imports of collated nails

from Taiwan to Los Angeles using June 1996 IM-145 Import Statistics for

collated nails entered under HTSUS subheading 7317.00.55.05.

With respect to normal value, petitioner provided information

showing that the Taiwanese market was not viable. Additionally,

although petitioner obtained a third country price for CR nails,

petitioner provided evidence that no third country market is viable.

Therefore, petitioner based normal value on CV.

Petitioner's calculation of CV included the cost of manufacturing

(``COM''), selling, general and administrative (``SG&A'') expenses, and

U.S. packing expenses. The manufacturing costs contained in the

petition were based on petitioner's own experience and publicly

available industry data, adjusted for known differences between

production costs incurred in the United States and production costs

incurred in Taiwan. For SG&A expenses, petitioner used its own 1995

audited financial statements because it could not obtain financial

statements for a Taiwan CR nail producer. Petitioner did not include an

amount for CV profit.

Based on the Department's modifications to petitioner's

methodology, the estimated dumping margins for Taiwan range from 30.52

to 40.28 percent ad valorem.

Fair Value Comparisons

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

believe that imports of CR nails from the PRC, Korea, and Taiwan are

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

Initiation of Investigations

We have examined the petition on CR nails 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 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 antidumping duty investigations to

determine whether imports of CR nails from the PRC, Korea, and Taiwan

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

fair value. Unless extended, we will make our preliminary

determinations by May 5, 1997.

Distribution of Copies of the Petitions

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

public version of each petition has been provided to the

representatives of the governments of Korea and PRC, as well as to the

authorities of Taiwan. We will attempt to provide a copy of the public

version of each petition to each exporter named in the petition (as

appropriate).

ITC Notification

We have notified the ITC of our initiations, as required by section

732(d) of the Act.

Preliminary Determination by the ITC

The ITC will determine by January 6, 1997, whether there is a

reasonable indication that imports of CR nails from the PRC, Korea, and

Taiwan are causing material injury, or threatening to cause material

injury, to a U.S. industry. A negative ITC determination in any of the

investigations will result in that investigation being terminated;

otherwise, the investigations will proceed according to statutory and

regulatory time limits.

Dated: December 16, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-32406 Filed 12-19-96; 8:45 am]

BILLING CODE 3510-DS-P