Preliminary Results of Full Sunset Review: Sugar and Syrups From Canada

DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-085]

Preliminary Results of Full Sunset Review: Sugar and Syrups From

Canada

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of full sunset review: Sugar and

Syrups from Canada.

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SUMMARY: On October 1, 1998, the Department of Commerce (``the

Department'') initiated a sunset review of the antidumping duty order

on sugar and syrups from Canada (63 FR 52683) pursuant to section

751(c) of the Tariff Act of 1930, as amended (``the Act''). On the

basis of a notice of intent to participate filed on behalf of the

domestic industry and adequate substantive comments filed on behalf of

the domestic industry and a respondent interested party, the Department

is conducting a full review. As a result of this review, the Department

preliminarily finds that revocation of the antidumping duty order is

not likely to lead to continuation or recurrence of dumping.

For Further Information Contact: Scott E. Smith or Melissa G. Skinner,

Office of Policy for Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-

6397 or (202) 482-1560, respectively.

Effective Date: April 26, 1999.

Statute and Regulations

This review is being conducted pursuant to sections 751(c) and 752

of the Act. The Department's procedures for the conduct of sunset

reviews are set forth in Procedures for Conducting Five-year

(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63

FR 13516 (March 20, 1998) (``Sunset Regulations''). Guidance on

methodological or analytical issues relevant to the Department's

conduct of sunset reviews is set forth in the Department's Policy

Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'')

Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin,

63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin'').

Scope

The merchandise subject to this antidumping duty order is sugar and

syrups from Canada produced from sugar cane and sugar beets. The sugar

is refined into granulated or powdered sugar, icing, or liquid sugar.

\1\ The subject merchandise is currently classified under Harmonized

Tariff Schedule of the United States (``HTSUS'') item numbers

1701.99.0500, 1701.99.1000, 1701.99.5000, 1702.90.1000, and

1702.90.2000. Although the subheadings are provided for convenience and

customs purposes, the written description remains dispositive.

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\1\ This order excludes icing sugar decorations as determined in

the U.S. Customs Classification of January 31, 1983 (CLA-2

CO:R:CV:G).

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On March 24, 1987, the Department revoked the order, in part, with

respect to Redpath Sugar Ltd. (``Redpath'') (52 FR 9322, March 24,

1987). On January 7, 1988, the Department revoked the order, in part,

with respect to Lantic Sugar, Ltd. (``Lantic'') (53 FR 434, January 7,

1988). In 1996, the Department determined that Rogers Sugar, Ltd.

(``Rogers'') was the successor in interest to British Columbia Sugar

Refining Company, Ltd. (``BC Sugar''). \2\ In its substantive response,

the United States Beet Sugar Association (``the USBSA'') stated that

there are three companies in Canada that constitute the Canadian

domestic industry: Lantic, Redpath, and Rogers. Further, all three

companies, or their predecessors, were involved in the original

investigation. Because the order was revoked for Lantic and Redpath,

only Rogers is currently subject to the order.

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\2\ See Sugar and Syrups from Canada; Final Results of Changed

Circumstances Antidumping Duty Administrative Review, 61 FR 51275

(October 1, 1996).

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Background

On October 1, 1998, the Department initiated a sunset review of the

antidumping duty order on sugar and syrups from Canada (63 FR 52683),

pursuant to section 751(c) of the Act. On October 16, 1998, the

Department received a Notice of Intent to Participate on behalf of a

domestic interested party, the USBSA, within the applicable deadline

(October 16, 1998) specified in section 351.218(d)(1)(i) of the Sunset

Regulations. The USBSA claimed interested party status under section

771(9)(E) of the Act as a trade association whose members produce sugar

in the United States and indicated that, although not the original

petitioners, it had participated in several administrative reviews. We

received complete substantive responses

[[Page 20254]]

to the notice of initiation on November 2, 1998, on behalf of the USBSA

and Rogers. In its substantive response, Rogers claimed interested

party status under section 771(9)(A) of the Act.

Based on the information submitted by Rogers concerning the volume

of its exports and the volume of imports as reported in the U.S. Census

Bureau IM146 Reports, Rogers accounted for significantly more than 50

percent of the value of total exports of the subject merchandise over

the five calendar years preceding the initiation of the sunset review.

Therefore, respondent interested parties provided an adequate response

to the notice of initiation and the Department is conducting a full

sunset review in accordance with section 351.218(e)(2)(i) of the Sunset

Regulations.

The Department determined that the sunset review of the antidumping

duty order on sugar and syrups from Canada is extraordinarily

complicated. In accordance with section 751(c)(5)(C)(v) of the Act, the

Department may treat a review as extraordinarily complicated if it is a

review of a transition order (i.e., an order in effect on January 1,

1995). (See section 751(c)(6)(C) of the Act.) Therefore, on January 15,

1999, the Department extended the time limit for completion of the

preliminary results of this review until not later than April 19, 1999,

in accordance with section 751(c)(5)(B) of the Act.\3\

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\3\ See Sugar and Syrups from Canada: Extension of Time Limit

for Preliminary Results of Five-Year Review, 64 FR 3683 (January 25,

1999).

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Determination

In accordance with section 751(c)(1) of the Act, the Department is

conducting this review to determine whether revocation of the

antidumping duty order would be likely to lead to continuation or

recurrence of dumping. Section 752(c) of the Act provides that, in

making this determination, the Department shall consider the weighted-

average dumping margins determined in the investigation and subsequent

reviews and the volume of imports of the subject merchandise for the

period before and the period after the issuance of the antidumping duty

order, and it shall provide to the International Trade Commission

(``the Commission'') the magnitude of the margin of dumping likely to

prevail if the order is revoked.

The Department's determinations concerning continuation or

recurrence of dumping and the magnitude of the margin are discussed

below. In addition, parties' comments with respect to continuation or

recurrence of dumping and the magnitude of the margin are addressed

within the respective sections below.

Continuation or Recurrence of Dumping

Parties' Comments

In its substantive response, the USBSA argued that revocation of

the antidumping duty order would likely result in the recurrence of

dumping of refined sugar and syrups from Canada (see Substantive

Response of the USBSA, November 2, 1998). The USBSA noted that refined

sugar from Canada, and of Canadian origin, is subject to a tariff rate

quota (``TRQ'') allocation. The USBSA stated that the TRQ allows 10,300

metric tons (``MT'') of refined sugar to enter the United States duty-

free.4 The USBSA stated that sugar from Canada entering the

United States above the 10,300 MT level, also known as the tier 2

level, is currently subject to the tier 2 tariff rate.5

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\4\ Rogers, in its rebuttal comments, stated that the TRQ

allocation of sugar from Canada for 1998 was actually 10,300 MT of

raw sugar which, when converted, is 9,579 metric tons of refined

sugar. Through telephone conversations with U.S. Department of

Agriculture officials, the Department has confirmed that the TRQ

allocation of sugar from Canada for 1998 was 10,300 MT of refined

sugar.

\5\ The tier 2 tariff rate is US$0.1716/lb (1998). The

Department notes that a global TRQ, with a limit of 7,090 MT of

refined sugar, also exists with tier 1 level duty exemptions.

Because this global quota is filled on a first come, first served

basis, Canada could, theoretically, export up to 17,390 MT of

refined sugar to the United States under the current TRQ system at

the tier 1 level.

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Additionally, the USBSA stated that only Rogers, which succeeded BC

Sugar and consequently is subject to BC Sugar's zero percent ad valorem

cash deposit rate, is currently subject to the order. The USBSA noted

that Rogers is the owner of Canada's sole sugar beet processing

facility; a facility that is being modernized and expanded.

The USBSA did not address whether dumping continued at any level

above de minimis after the issuance of the order. Rather, the USBSA

argued that imports of the subject merchandise fell dramatically

immediately following the issuance of the order in 1980. The USBSA,

citing U.S. Department of Agriculture publications, states that import

volumes of the subject merchandise from Canada in 1979 were 89,521

short tons and, in 1980, the year of the imposition of the order, sugar

and syrups imports from Canada fell to 639 short tons. Therefore, the

USBSA argues that, based on the cessation of imports in the period

immediately following the imposition of the order, the Department

should find that revocation of the order would be likely to lead to the

recurrence of dumping.

The USBSA stated that, in the past, the existence of the tier 2

tariff, in conjunction with the TRQ, has limited imports of sugar into

the United States. However, the USBSA contended the decimation of the

world sugar price over the past several years has eroded the tier 2

tariff's position as an impediment to imports. The USBSA concludes

that, based on the trend in world market prices, by the year 2000 (the

earliest possible effective date of revocation of the order pursuant to

this sunset review) exporters of Canadian sugar will be able to ship

refined sugar to the United States at less-than-fair value prices

despite the TRQ.

Additionally, the USBSA stated that the legislative underpinning

for current U.S. sugar policy is due to expire at the end of 2002.

Therefore, it asserted, the TRQ will not be as significant an obstacle

to future imports as it has in the past and the need to preserve the

order is greater than it was a few years ago. Finally, the USBSA argued

that the existence of the TRQ and the tier 2 tariff does not provide a

rationale for revoking the order. The USBSA stated that, despite the

intervention of the TRQ and the development of U.S. sugar policy, the

U.S. sugar producing industry continued to support the order and

regularly expressed to the Department opposition to any proposed

revocation.

In its comments addressing the magnitude of dumping likely to

prevail if the order were revoked, the USBSA estimated dumping margins

based on current U.S. and Canadian prices. The USBSA calculated

estimated dumping margins of 30.82 percent for sugar entering the

United States within the TRQ limits 6 and 409 percent for

sugar entering the United States subject to the tier 2

tariff.7

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\6\ The Department notes that a global TRQ, with a limit of

7,090 MT refined sugar, also exists with tier 1 level duty

exemptions established on a first come, first served basis.

\7\ The tier 2 tariff rate is US$0.1716/lb (1998). The USBSA

also estimated a dumping margin, based on constructed value

calculations, for sugar entering the United States from Canada at

the tier 1 tariff level and at the tier 2 tariff level. Those

margins are 9.3 percent and 325 percent, respectively.

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In its substantive response, Rogers argued that revocation of the

order would precipitate no change in its current U.S. pricing. Rogers

based this statement on the following facts: Rogers' current dumping

margin is zero percent and, therefore, the dumping margin does not

affect selling price; Rogers' exports to the United States are limited

by quotas; Rogers supplies virtually all Canadian exports to the United

States under both the global and Canada-specific quotas; and Rogers

would not

[[Page 20255]]

export to the United States below the Canadian domestic price given the

current and historical spread between the supply-managed U.S. raw sugar

price and the Canadian market price, which tracks world market prices.

With respect to import volumes, Rogers submitted information on the

volume and value of its exports to the United States for fiscal years

1994-1998. In addition, Rogers submitted an approximation of the volume

of direct exports to the United States during fiscal year 1979, the

year preceding the imposition of the antidumping duty order. This

volume was based on exports from BC Sugar. This information showed that

the volume of imports in each fiscal year since 1994, exceeded the

volume of imports during fiscal year 1979.

Additionally, Rogers argued that, as a result of the combined

effect of the programs the United States has in place on the

importation of raw and refined sugar, the U.S. price-supported sugar

program, and customs rulings which resulted in cane sugar refined in

Canada being excluded from the U.S. market, there is virtually no

chance that revocation of the antidumping duty order would result in

the resumption of dumping.

In its rebuttal comments, the USBSA stated that Rogers confirmed

that it is the only beet sugar processing facility in Canada. Further,

the USBSA argued that, given the downward trend in the world price of

sugar and the coming economic feasibility of entering refined sugar

into the United States notwithstanding the existence of the TRQ and the

tier 2 tariff, the capacity being added at Rogers' beet sugar facility

in Alberta must be viewed as a likely source of supply for the U.S.

market.

In its rebuttal comments, Rogers stated that the USBSA's

allegations concerning increases in sugar beet production capacity in

Canada are factually incorrect. Rogers stated that current capacity in

Canada is less than it has been historically and submitted production

statistics for each facility. Rogers argued that increases in

production capacity made in the recent past are meant to offset

decreases in production capacity associated with the closure of its

Winnipeg, Manitoba facility.

With respect to the volume of exports to the United States, Rogers

notes that the TRQ is on the value of raw sugar and, as such, the

volume of actual refined sugar allowed to enter the United States is

9,579 MTs, not 10,300 MTs. Rogers argued that its exports to the United

States can hardly be considered a large volume when compared to the

U.S. consumption of 10,225,000 short tons.

In its rebuttal comments, Rogers argued that the USBSA's reference

to the world refined sugar price is irrelevant to this proceeding

because Rogers only exports to the United States. Rather, it contended,

the only prices relevant to this proceeding are the Canadian home

market price and U.S. price of beet sugar. Further, Rogers argued that

the USBSA's discussion of world refined pricing overtaking the TRQ is

speculative. Rogers argued that lower world prices for raw sugar will

lead to lower Canadian refined prices as compared to the high U.S.

supported price and, thus, the chance of dumping would be less, not

more.

Department's Determination

Drawing on the guidance provided in the legislative history

accompanying the Uruguay Round Agreements Act (``URAA''), specifically

the Statement of Administrative Action (``the SAA''), H.R. Doc. No.

103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1

(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the

Department issued its Sunset Policy Bulletin providing guidance on

methodological and analytical issues, including the bases for

likelihood determinations. In its Sunset Policy Bulletin, the

Department indicated that determinations of likelihood will be made on

an order-wide basis (see section II.A.3). In addition, the Department

indicated that normally it will determine that revocation of an

antidumping duty order is likely to lead to continuation or recurrence

of dumping where (a) dumping continued at any level above de minimis

after the issuance of the order, (b) imports of the subject merchandise

ceased after the issuance of the order, or (c) dumping was eliminated

after the issuance of the order and import volumes for the subject

merchandise declined significantly (see section II.A.3). In instances

where none of the above criteria are met, the Department will normally

determine that revocation of the order will not be likely to lead to

continuation or recurrence of dumping.

The antidumping duty order on sugar and syrups from Canada was

published in the Federal Register on April 9, 1980 (45 FR 24126). Since

that time, the Department has conducted several administrative reviews

of this order.8 As noted above, the order has been revoked

with respect to two of the three existing Canadian producers of sugar.

Therefore, only Rogers is currently subject to the order.

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\8\ See Sugar and Syrups from Canada; Final Results of

Antidumping Duty Administrative Review, 46 FR 27985 (May 22, 1981);

Sugar and Syrups from Canada; Final Results of Antidumping Duty

Administrative Review, 47 FR 25393 (June 11, 1982); Sugar and Syrups

from Canada; Final Results of Antidumping Duty Administrative

Review, 48 FR 49327 (October 25, 1983); Sugar and Syrups from

Canada; Final Results of Antidumping Duty Administrative Review, 51

FR 20322 (June 4, 1986); Sugar and Syrups from Canada; Final Results

of Antidumping Duty Administrative Review and Revocation in Part, 52

FR 9322 (March 24, 1987); Sugar and Syrups from Canada; Final

Results of Antidumping Duty Administrative Review, 52 FR 21340 (June

5, 1987); and Sugar and Syrups from Canada; Final Results of

Antidumping Duty Administrative Review and Revocation in Part, 53 FR

434 (January 7, 1988).

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Consistent with section 752(c) of the Act, the Department

considered whether dumping continued at any level above de minimis

after the issuance of the order. In the administrative review covering

the period April 1, 1981 through March 31, 1982, BC Sugar (the

predecessor to Rogers) was found to have a zero margin (see Sugars and

Syrups From Canada; Final Results of Administrative Review of

Antidumping Duty Order, 48 FR 49327 (October 25, 1983)) and its cash

deposit rate for future entries was set at zero. Exports by BC Sugar,

and its successor Rogers, have been subject to a zero deposit rate

since that time. Therefore, we preliminarily determine that dumping did

not continue at any level above de minimis after the issuance of the

order.

In addition, consistent with section 752(c) of the Act, the

Department also considered whether imports ceased after the issuance of

the order. Citing a reduction in imports from about 90,000 short tons

in 1979 to a little over 600 short tons in 1980, when the order was

issued, the USBSA argued that imports ceased after the issuance of the

order. The USBSA also noted that exports of sugar from Canada have been

limited by quotas that have been in effect since 1982. Although there

was a decrease in the volume of imports during 1980, imports of subject

merchandise from Canada increased thereafter and have continued after

the issuance of the order. Therefore, we preliminarily determine that

imports did not cease after the issuance of the order.9

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\9\ Rogers submitted information on its exports to the United

States since 1990 in its November 3, 1998 submission. The Department

conducted administrative reviews of shipments between 1979 and 1987.

Additionally, import statistics from the U.S. Census Bureau IM146

Reports, U.S. Department of Commerce statistics, U.S. Department of

Treasury statistics, and information supplied by the U.S.

International Trade Commission show imports of sugar from Canada

from 1988 through the present. See also footnote 11.

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The Department also considered whether dumping was eliminated after

[[Page 20256]]

the issuance of the order and import volumes for the subject

merchandise declined significantly. Based on sales between April 1,

1981 through March 31, 1982, the margin of dumping for BC Sugar was

determined to be zero. Neither BC Sugar nor its successor, Rogers, has

been subject to an administrative review since that time. We agree with

the USBSA that, since the imposition of the order, total annual exports

of sugar from Canada have been below the pre-order level of total

annual exports of sugar from Canada. However, because Rogers is the

only Canadian sugar producer subject to the order, we examined

specifically the volume of Rogers' exports. In its substantive

response, Rogers' provided the volume of its exports of subject

merchandise for the most recent five fiscal years. In addition, Rogers

reconstructed data for fiscal year 1979 exports from its predecessor,

BC Sugar, and provided an approximation of the direct exports to the

United States for that time period. A comparison of the volume data

demonstrates that Rogers exports have not declined significantly since

the issuance of the order. To the contrary, export volumes have

increased significantly. Therefore, the Department preliminarily

determines that dumping was eliminated by the sole Canadian sugar

producer currently subject to the order and its export volumes have not

declined significantly since the issuance of the order.

With respect to the USBSA's arguments regarding the TRQ, and the

tier 2 tariff, and the potential for the recurrence of dumping if the

TRQ is lifted in 2002, we do not find these arguments persuasive for

several reasons. First, the Department finds the USBSA's argument

speculative. There is no evidence to suggest that the elimination of

the TRQ is a certainty. In fact, from 1948 to the present, there has

only been a total of seven years where the importation of sugar was

completely unrestricted.10

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\10\ Although access to the U.S. market for sugar was

unrestricted, we note that Cuba has been barred from trading with

the United States since 1962.

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Second, if the United States were to eliminate all import

restrictions on sugar from Canada and establish a market which tracked

world prices, the Department finds no evidence to suggest that Rogers

would resume dumping. Prior to the first post-order restrictions

imposed in 1982, the Department established a deposit rate of zero

percent for BC Sugar as a result of the 1981/1982 administrative review

(48 FR 49327, October 25, 1983). As noted by both the USBSA and Rogers,

beginning in 1982, the United States imposed quotas on imports of

sugar. However, starting with the quota year October 1, 1990 through

September 30, 1991, the United States implemented a TRQ which did not

apply to Canada. Thus, Canadian exports were unrestricted until January

1, 1995, when a separate global quota of 22,000 MT was established and

Canada was made subject to that quota. We found that, during the period

of unrestricted Canadian access to the U.S. market (1991-1994), the

volume of imports of sugar from Canada increased; imports increased

from 34.7 million in 1990 to 74.6 million in 1991.11 If, as

the USBSA argued in this sunset review, an increased volume of imports

will be accompanied by increased dumping, the domestic industry could

have requested an administrative review during the period of

unrestricted Canadian access. However, the Department did not receive a

request for administrative review despite the fact that exports by the

only Canadian producer subject to the order were subject to a deposit

rate of zero percent. Therefore, the Department finds no reason to

believe that dumping was occurring during this period.

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\11\ These statistics reflect imports of sugar under HTS item

numbers 1701.11, 1701.12, 1701.91, 1701.99, 1702.90, and 2106.90,

which are broader than the scope of the order. These statistics were

obtained from the Commission (http://dataweb.usitc.gov) and were

compiled from tariff and trade data from the U.S. Department of

Commerce, the U.S. Treasury, and the Commission.

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With respect to the USBSA's assertions regarding Rogers' planned

expansion and modernization of its sugar beet processing facility, as

noted above, Rogers provided production data which supports its

assertion that increased capacity at its Taber facility replaces

capacity at its recently closed Winnipeg facility. In fact, the sugar

production information provided by Rogers supports its assertion that

sugar production, although increasing since the low of 1997, continues

to be, and is forecasted to be less than production in 1994.

The USBSA also stated that while the TRQ and tier 2 tariff have

been effective in limiting imports into the United States, decreases in

world prices will cause Rogers to increase exports to the United States

above the quota level despite the tier 2 tariff. We agree that the TRQ

and tier 2 tariff have been effective in limiting imports into the

United States. Our review of data, including U.S. Census Bureau IM146

reports, indicates that Canadian exports of the subject merchandise

have not exceeded the Canada-specific and/or global TRQ level since it

was first applied to Canada in 1995.12 Based on U.S. Census

Bureau IM146 reports and import statistics provided by Rogers, the

Department finds no evidence to suggest that Rogers' exports have ever

exceeded the tier 1 tariff level.

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\12\ In telephone conversations with U.S. Department of

Agriculture officials, they indicated that it is highly unlikely

that any Canadian sugar subject to this antidumping duty order has

entered the United States at the tier 2 level.

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As to future decreases in world market prices, we note that the

information provided by the USBSA on world refined sugar prices since

1990, shows that prices have fluctuated over this time period, with

prices in fiscal year 1998 being only marginally below fiscal year 1993

prices. Therefore, the recent decrease in the world refined sugar price

is not unprecedented. Additionally, the USBSA asserted that the major

catalysts in the rapid decline of world sugar prices are a drop in

demand in Asia and Russia as a result of the financial crisis in those

regions.13 However, according to FAS Online, ``[i]ndustry

sources believe that sugar consumption will continue to grow in the

Asian region, despite recent economic troubles, as sugar is seen as a

staple commodity in the Asian diet.'' 14 Additionally, FAS

Online notes that ``if the Government of Russia retracts the new

tariffs on sugar and banks are able to facilitate trade, Russia could

resume it's position as the world's major sugar importer early in

1999.'' 15 Therefore, we are not persuaded that the world

market price of sugar will continue to fall as asserted by the USBSA.

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\13\ The USBSA cited to The Czarnikow Sugar Review, No. 1889

(``Fears of Slower Far East Demand Impact Prices'') (February 1998),

attached as part of Appendix 6 to USBSA's Substantive Response

(November 2, 1998).

\14\ FAS Online article ``World Sugar Situation,'' available at

``http://www.usda.gov/htp/sugar/1998/98-11/world.html'.

\15\ Id.

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Furthermore, the USBSA suggested that the continued reduction in

the world price of sugar will enable Canadian sugar exporters (as well

as exporters from other countries) to ship subject merchandise into the

United States and pay the tier 2 tariff, precipitating an influx of

dumped sugar into the United States. However, given the absence of

restrictions on imports of sugar into Canada, we agree with Rogers

that, if the world price of sugar declines, we would expect a

commensurate decline in the Canadian home market price. Therefore, a

decrease in the world price of sugar does not, by itself, suggest that

Rogers would resume dumping if the order were to be revoked.

[[Page 20257]]

Finally, with respect to the USBSA's arguments that current pricing

information demonstrates dumping, we note that the USBSA did not

provide evidence of ``good cause'' to support the Department's use of

current pricing information (see section 351.218(d)(3)(iv) of the

Sunset Regulations). However, even considering the substance of the

USBSA's arguments, we note that there was a significant discrepancy

between the values the USBSA and Rogers reported. Both the USBSA and

Rogers supplied information related to Canadian and U.S. pricing and

cost of production. The USBSA based its estimated dumping margins on

U.S. wholesale prices, Canadian wholesale prices, and estimated

transportation costs. The USBSA utilized a price from Rogers'

Saskatchewan Price List as the Canadian wholesale price. In its

rebuttal comments, however, Rogers argued that Canadian sellers operate

on high list prices and high discounts and, because of this, the

published list price of Rogers is much higher than its actual

discounted price. Rogers submitted copies of record bulk sales invoices

to Canadian customers, which supported its assertion that sales are

discounted. These discounted prices were significantly below the price

used by the USBSA to represent the Canadian market price. Rogers also

provided its average annual prices into the United States for the past

eight years. The value Rogers reported as its export price into the

United States differed from the U.S. price used by the USBSA in its

calculations. Finally, there was a significant difference in the cost

of production values reported by both parties. 16 Therefore,

we preliminarily determine that the information submitted by Rogers in

its substantive and rebuttal responses refutes the more generalized

data provided by the USBSA.

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\16\ With respect to the USBSA's constructed value

calculations, the Department finds these calculations to be

speculative. Specifically, the calculations used 1994/95 data on the

average total cost of production together with 1998 data on the U.S.

wholesale price of sugar, 1998 data on the cost of transportation

and, for one of the two constructed value calculations, the 1998

tier 2 tariff rate. The use of 1994/1995 data in 1998 dumping margin

calculations suggests that findings from such calculations would be

highly speculative.

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Based on this analysis, the Department preliminarily finds,

consistent with the SAA at 889-90, and the House Report at 63, that

declining (or no) dumping margins accompanied by steady or increasing

imports may indicate that foreign companies do not have to dump to

maintain market share in the United States and that dumping is less

likely to continue if the order were revoked.'' That is, the Department

preliminarily finds that the continued absence of a dumping margin for

Rogers and the continued existence of imports from Rogers in

substantial quantities demonstrates that Rogers is capable of selling

the subject merchandise in the United States without dumping. Further,

the Department preliminarily finds no evidence to suggest that Rogers

would begin dumping subject merchandise in the foreseeable future,

regardless of the existence or absence of any outside importation

restrictions. Therefore, the Department preliminarily determines that

dumping is not likely to recur if the order were revoked.

Magnitude of the Margin

Parties' Comments

In its substantive response, the USBSA argued that the dumping

margin likely to prevail is at least as large as the margin that

prevailed at the time of the original investigation. The highest

dumping margin established in the original investigation was US$0.0237/

lb.17 Further, based on current U.S. and Canadian pricing,

the USBSA estimated dumping margins ranging from 9.3 percent to 409.0

percent.

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\17\ See Antidumping Duty Order; Sugar and Syrups from Canada,

45 FR 24128 (April 9, 1980).

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In its substantive response, Rogers argued that, given the price

spread between the U.S. supply-managed sugar market and the Canadian

market based on world pricing, the dumping margin likely to prevail if

the order were to be revoked is zero. Rogers argued that, because of

its limited access to the U.S. market, it is motivated to sell at U.S.

refined sugar prices to maximize returns. Rogers provided a chart

depicting sugar prices in the Canadian and U.S. markets and its price

into the United States for the past eight years, as well as a

calculation for producing processed beet sugar at its facility in

Canada. The chart indicates that Rogers' price into the United States

has been above its prices in Western Canada.

Department's Determination

Because we preliminarily determine that dumping is not likely to

recur were the order revoked, there is no magnitude of the margin of

dumping to report to the Commission.

Preliminary Results of Review

The Department preliminarily finds that revocation of the order is

not likely to lead to continuation or recurrence of dumping. As a

result of this determination, the Department, pursuant to section

751(d)(2) of the Act, preliminarily intends to revoke the antidumping

duty order on sugar and syrups from Canada. Pursuant to section

751(c)(6)(A)(iv) of the Act, this revocation would be effective January

1, 2000. The Department preliminarily intends to instruct the U.S.

Customs service to liquidate without regard to dumping duties entries

of the subject merchandise entered or withdrawn from warehouse on or

after January 1, 2000 (the effective date), and to discontinue

collection of cash deposits on entries of subject merchandise as of the

same date.

Any interested party may request a hearing within 30 days of

publication of this notice in accordance with 19 CFR 351.310(c). Any

hearing, if requested, will be held on June 15, 1999. Interested

parties may submit case briefs no later than June 8, 1999, in

accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be

limited to issues raised in the case briefs, may be filed not later

than June 14, 1999, in accordance with 19 CFR 351.309(d). The

Department will issue a notice of final results of this sunset review,

which will include the results of its analysis of issues raised in any

such comments, no later than August 27, 1999.

This five-year (``sunset'') review and notice are in accordance

with sections 751(c), 752, and 777(i)(1) of the Act.

Dated: April 19, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-10287 Filed 4-23-99; 8:45 am]

BILLING CODE 3510-DS-P