Initiation of Antidumping Duty Investigation: Melamine Institutional Dinnerware Products From Indonesia, Taiwan and the People's Republic of China

DEPARTMENT OF COMMERCE

[A-560-801, A-583-825, and A-570-844]

Initiation of Antidumping Duty Investigation: Melamine

Institutional Dinnerware Products From Indonesia, Taiwan and the

People's Republic of China

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

[[Page 8040]]

EFFECTIVE DATE: March 1, 1996.

FOR FURTHER INFORMATION CONTACT: Kate Johnson at (202) 482-4929 or Erik

Warga at (202) 482-0922, 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

On February 6, 1996, the Department of Commerce (``the

Department'') received a petition filed in proper form by The American

Melamine Institutional Tableware Association (``petitioners''), whose

members include Continental/SiLite International Co., Lexington United

Corp./National Plastics Corp., and Plastics Manufacturing Company

(domestic producers of melamine institutional dinnerware products

(``MIDPs'')).

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

that imports of MIDPs from Indonesia, Taiwan and 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.

Petitioners are an association the majority of whose members are

producers of the domestic like product and, therefore, have standing to

file the petition because they are an interested party, as defined

under section 771(9)(E) of the Act.

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

petitioners 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.

Petitioners represent more than 90 percent of total production of the

domestic like product. Moreover, the only other known domestic producer

of MIDPs, Gessner Products, has expressed support for the petition. The

Department received no expressions of opposition to the petition from

any domestic producer or workers. Accordingly, the Department

determines that the petition is supported by the domestic industry.

Scope of the Investigation

The scope of this investigation is all items of dinnerware (e.g.,

plates, cups, saucers, bowls, creamers, gravy boats, serving dishes,

platters, and trays) that contain at least 50 percent melamine by

weight and have a minimum wall thickness of 0.08 inch. This merchandise

is classifiable under subheadings 3924.10.20, 3924.10.30, and

3924.10.50 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheadings are provided for convenience

and customs purposes, our written description of the scope of this

investigation is dispositive.

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.

Indonesia

Petitioners based export price (EP) on a price quotation for a 9-

inch plate obtained from a market research report. The terms are ex-

factory and, hence, no deductions to EP were made.

Petitioners based normal value (NV) on a price quotation for a 9-

inch plate obtained from a market research report. The terms are ex-

factory and, hence, no deductions to NV were made.

Based on comparisons of EP to NV, the calculated dumping margin for

MIDPs from Indonesia is 89.84 percent ad valorem.

PRC

Petitioners prepared two calculations of constructed export price

(CEP). In the first instance, petitioners calculated CEP based on a PRC

producer's affiliated reseller's price quote. Petitioners deducted cash

discounts, ocean freight, U.S. inland freight, containerization, and

duties. For purposes of initiation, we disallowed the deduction for

U.S. inland freight because the petition did not specify the U.S.

customer's location and did not contain any evidence indicating the

actual amount of any inland freight expenses incurred.

Alternatively, petitioners argue that the Act requires U.S.-

incurred selling expenses to be deducted from CEP. Although section

772(d)(1) of the Act requires this deduction from CEP, petitioners did

not make a corresponding adjustment to NV for selling expenses.

Therefore, we have not accepted this deduction for purposes of the

initiation. We may consider this issue further later in the

investigation.

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 calculate NV based on the

factors of production of those factories that produced MIDPs 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).

Petitioners based the PRC producers' factors of production (i.e.,

raw materials, labor, and energy) for MIDPs on petitioners' own usage

amounts. Petitioners valued these factors, where possible, on publicly

available published Indonesian data. Where this data was unavailable,

petitioners used other acceptable sources of information. Petitioners

estimated the surrogate value of scrap based on their own experience as

to the scrap rate in MIDP production.

Indonesia is an acceptable surrogate country because its level of

economic development is comparable to that of

[[Page 8041]]

the PRC and Indonesia is a significant producer of comparable

merchandise.

Petitioners also based factory overhead and general expenses on

data contained on the public records of previous investigations in

which the information was also used as surrogate values for factors of

production of merchandise from the PRC.

Petitioners based profit on a publicly available published industry

study of the Reserve Bank of India Bulletin, September 1994, for the

Processing and Manufacturing of Metals, Chemicals, and Products

thereof.

Finally, petitioners based packing on their own U.S. packing costs,

not including packing for ocean voyage. For the purposes of this

investigation, we have disallowed the packing costs because they were

based on U.S. values rather than a factor value from an appropriate

surrogate country.

Based on comparisons of CEP to the factors of production, the

calculated dumping margin for MIDPs from the PRC, after adjustments

made by the Department, is 7.06 percent ad valorem.

Taiwan

Petitioners used a market research firm to obtain an EP price

quotation from a Taiwanese producer. Petitioners deducted a discount

from this price.

In addition, petitioners calculated CEP based on a Taiwan company's

affiliated reseller price quotation. Petitioners believe that the

Department should use CEP because there is substantial evidence that,

during the POI, this manufacturer produced subject merchandise in

Taiwan that was sold in the United States.

Petitioners deducted from CEP discounts, ocean freight, U.S. inland

freight, containerization, selling expenses and inventory carrying

expenses.

For purposes of initiation, we are rejecting this CEP calculation

because there is insufficient evidence that the Taiwan manufacturer,

Tar-Hong, produced in Taiwan the subject merchandise sold by its U.S.

affiliate during the POI. However, as this investigation proceeds, we

will consider this issue further.

Based on comparisons of EP to NV, the calculated dumping margin for

MIDPs from Taiwan, after adjustments made by the Department, is 53.13

percent ad valorem.

Fair Value Comparisons

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

believe that imports of MIDPs from Indonesia, the PRC and Taiwan are

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

Initiation of Investigations

We have examined the petitions on MIDPs and have found that they

meet 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 MIDPs from Indonesia, the PRC 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 July 15, 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 governments of Indonesia and PRC, as well as to the Taiwan

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

the petition to each exporter named in the petition.

International Trade Commission (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 March 22, 1996, whether there is a

reasonable indication that imports of MIDPs from Indonesia, the PRC 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: February 26, 1996.

Paul L. Joffe,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-4850 Filed 2-29-96; 8:45 am]

BILLING CODE 3510-DS-P