Preliminary Results of Full Sunset Review: Carbon Steel Wire Rod From Argentina

DEPARTMENT OF COMMERCE

International Trade Administration

[A-357-007]

Preliminary Results of Full Sunset Review: Carbon Steel Wire Rod

From Argentina

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of full sunset review: carbon

steel wire rod from Argentina.

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SUMMARY: On November 2, 1998, the Department of Commerce (``the

[[Page 28976]]

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

carbon steel wire rod from Argentina (63 FR 58709) 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 order would be

likely to lead to continuation or recurrence of dumping at the levels

indicated in the Preliminary Results of Review section of this notice.

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: May 28, 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 carbon

steel wire rod from Argentina. This merchandise is currently

classifiable under Harmonized Tariff Schedule of the United States

(HTSUS) item numbers 7213.20.00, 7213.31.30, 7213.39.00, 7213.41.30,

7213.49.00, and 7213.50.00. Although the item numbers are provided for

convenience and U.S. Customs purposes, the written description remains

dispositive.

Background

On November 2, 1998, the Department initiated a sunset review of

the antidumping order on carbon steel wire rod from Argentina (63 FR

58709), pursuant to section 751(c) of the Act. On November 16, 1998,

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

North Star Steel, Co-Steel Raritan (formerly Raritan River Steel), and

GS Industries, Inc. (collectively ``Domestic Parties'') within the

applicable deadline (November 16, 1998) specified in section

351.218(d)(1)(i) of the Sunset Regulations. Each of the Domestic

Parties claimed interested party status under section 771(9)(C) of the

Act. We received complete substantive responses to the notice of

initiation on December 2, 1998, on behalf of the Domestic Parties and

Acindar Industria Argentina de Aceros S.A. (``Acindar''). In its

substantive response, Acindar claimed interested party status under

section 771(9)(A) of the Act, as an Argentine producer of carbon steel

wire rod.

In its substantive response, Acindar provided the volume and value

of its exports to the United States for the years 1993 through 1997.

Acindar explained that because statutory record-keeping requirements in

Argentina and internal record-keeping policies within Argentina do not

provide for the keeping of records dating back to 1982, the year

preceding the investigation of this case, it no longer had information

relating to exports dating back to 1982. As a substitute, Acindar

relied on import volumes reported by the Commission for this

year.1 Further, Acindar stated that, as far as it is aware,

it accounted for 100 percent of the total exports of Argentine subject

merchandise to the United States during each of the five calendar years

preceding the year of publication of the notice of initiation. Based on

the volume of exports information submitted by Acindar, the volume of

imports as reported by the U.S. Department of Commerce, Bureau of the

Census and Trade Info, and Acindar's claim that it accounted for 100

percent of exports, we find that Acindar 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.

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\1\ For information concerning the import volumes of the subject

merchandise for 1981, 1982 and 1983, Acindar cited to the U.S.

International Trade Commission Pub. 1598, Carbon Steel Wire Rod from

Argentina and Spain (Nov. 1984), at A-30, Table 18.

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The Department determined that the sunset review of the antidumping

duty order on carbon steel wire rod from Argentina 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 May 23, 1999,

in accordance with section 751(c)(5)(B) of the Act.2

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\2\ See Carbon Steel Wire Rod from Argentina: Extension of Time

Limit for Preliminary Results of Five-Year Reviews 64 FR 9475

(February 26, 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 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 order, and

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 their substantive response, the Domestic Parties argued that

dumping is likely to recur if the order is revoked since imports from

Argentina declined significantly from 1983 to 1997 (see Substantive

Response of the Domestic Parties, at 3, December 2, 1998). Import

statistics presented by the Domestic Parties show that imports declined

from the 1983 high of 68,335 net tons down to 2,756 net tons in

1997.3 Additionally, there were no imports from 1986-1988.

[[Page 28977]]

As a result, the Domestic Parties argued that, consistent with the

Sunset Policy Bulletin, it is reasonable to assume that the Argentine

exporters could not sell in the United States without dumping. Further,

to reenter the U.S. market, Argentine exporters would have to resume

dumping.

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\3\ See Substantive Response of the Domestic Parties, at 3 and

Attachment 1 (December 2, 1998).

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In its substantive response, Acindar argued that dumping would not

be likely to continue or resume in the absence of the order. Acindar

based this argument on the fact that, the only time the Department made

a determination using actual company data, the Department found that no

dumping margin existed. Acindar argued that since the margin likely to

prevail if the order is revoked is zero, no dumping would occur if the

order were revoked.

In their rebuttal comments, the Domestic Parties argued that the

fact that the Department calculated a zero margin for the 1988-1989

administrative review, does not require the Department to reach a

negative determination with respect to the likelihood of continuation

or recurrence of dumping. Rather, referring to section 752(c)(4)(A) of

the Act, the Domestic Parties asserted that the present absence of

dumping is not necessarily indicative of how exporters would behave in

the absence of the order.

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.2). In addition, the Department

indicated that normally it will determine that revocation of an

antidumping 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).

The antidumping duty order on carbon steel wire rod from Argentina

was published in the Federal Register on November 23, 1984 (49 FR

46180). Since that time, the Department has conducted three

administrative reviews.4 The order remains in effect for all

manufacturers and exporters of the subject merchandise.

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\4\ See Carbon steel wire rod from Argentina; Final Results of

Antidumping Duty Administrative Review, 54 FR 49322 (November 30,

1989); Carbon steel wire rod from Argentina; Final Results of

Antidumping Duty Administrative Review, 56 FR 47064 (September 17,

1991); and Carbon steel wire rod from Argentina; Final Results of

Antidumping Duty Administrative Review, 56 FR 49455 (September 30,

1991). There is a pending administrative review of this order; the

proposed date for the completion of the preliminary results of this

review is September 30, 1999 (see Carbon Steel Wire Rod from

Argentina; Extension of Time Limit for Preliminary Results of

Antidumping Duty Administrative Review, 64 FR 23053 (April 29,

1999)).

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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 November 1, 1988 through October 31, 1989, the Department

determined that no dumping margin existed for Acindar (56 FR 47064,

September 17, 1991). In addition, Acindar, as well as all other

Argentine producers/exporters of the subject merchandise, received a

cash deposit rate of zero at this time. In the next administrative

review, based on the absence of shipments, the deposit rate remained

unchanged. There have been no subsequent administrative reviews,

therefore, this deposit rate has remained in effect. Further, according

to the statistics provided by both the Domestic Parties and Acindar,

shipments of the subject merchandise have continued. 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. The Department, using U.S. Census Bureau IM146 Reports,

determined that imports of the subject merchandise decreased sharply

following the imposition of the order, and although non-existent in

some years, imports have, nonetheless, continued. Because imports of

subject merchandise from Argentina continued after the issuance of the

order, we preliminarily determine that imports did not cease after the

issuance of the order.5

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\5\ The Department bases this determination on information

submitted by Acindar in its December 2, 1998 submission, as well as

U.S. IM146 Reports, U.S. Department of Commerce statistics, U.S.

Department of Treasury statistics, and information supplied by the

U.S. International Trade Commission.

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The Department also considered whether dumping was eliminated after

the issuance of the order and whether import volumes of the subject

merchandise declined significantly. As noted above, the Department has

preliminarily determined that dumping was eliminated following the

issuance of the order. However, U.S. Census Bureau IM146 Reports

indicate that, while dumping may have been eliminated, import volumes

of the subject merchandise fell dramatically following the imposition

of the order and have not resumed their pre-order levels. The U.S.

Census Bureau information indicates that imports of the subject

merchandise decreased by more than 97 percent in the year following the

issuance of the order. Further, imports have consistently remained at

less than 10 percent of their pre-order levels, excluding

1996.6 Therefore, the Department preliminarily determines

that although dumping was eliminated by Acindar, its export volumes

have declined significantly since the issuance of the order.

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\6\ U.S. Census Bureau IM146 Reports indicate that for 1996,

import volumes were approximately 20 percent of their pre-order

level.

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As set forth in the Sunset Policy Bulletin (section II.A.3), and

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

dumping was eliminated after the issuance of the order and import

volumes for the subject merchandise declined significantly, the

Department normally will determine that revocation of the antidumping

duty order would be likely to lead to recurrence of dumping. Therefore,

although dumping has been eliminated, shipments of the subject

merchandise have declined dramatically. Therefore, we preliminarily

determine that, consistent with Section II.A.3 of the Sunset Policy

Bulletin, dumping is likely to recur if the order were revoked.

Magnitude of the Margin

Parties' Comments

In their substantive response, the Domestic Parties argue that the

dumping margin likely to prevail is the margin calculated in the

original investigation--119.11 percent. The Domestic Parties state that

selection of this margin would be consistent with the SAA and Policy

Bulletin, which provide that the Department generally will select a

margin from the original investigation because that is the only

calculated rate that reflects the behavior of exporters without the

discipline of

[[Page 28978]]

the order in place. Arguing that since the volume of imported wire rod

from Argentina has declined to extremely low levels since the

imposition of the order, the use of a more recently calculated margin

is not appropriate in this case. Specifically, the Domestic Parties

argued that the zero rate calculated in the 1988-1989 administrative

review was based on sales of approximately 543.78 metric tons of wire

rod, which is not a commercial quantity and, therefore, not

representative of Acindar's behavior in the absence of the order.

As noted above, Acindar states that the antidumping rate in the

original investigation was based on so-called ``best information

available,'' the dumping margins alleged by the petitioners, rather

than Acindar's own information. Further, Acindar argues that the

dumping margin calculated by the Department in the only administrative

review in which the Department based its determination on actual

company data, is the most reliable gauge of the antidumping duty margin

likely to prevail when the order is revoked.

Department's Determination

The Department agrees with the Domestic Parties. We find that the

consistently low level of imports of the subject merchandise that have

existed since the imposition of the order is not indicative of the

behavior of Argentine producers/exporters in the absence of the order.

Furthermore, the Department finds the establishment of a zero deposit

rate coupled with a dramatic decrease in import volumes suggests that

Argentine producers/exporters find it difficult to sell subject

merchandise in the United States without dumping. The Department finds

reason to believe that the consistently low level of exports can be

attributed to Argentine producers'/exporters' difficulty in selling

subject merchandise in the United States at a fair market value.

Because of this, the Department finds the margin from the original

investigation is the only calculated rate that reflects the behavior of

exporters without the discipline of the order. Therefore, consistent

with the Sunset Policy Bulletin, we preliminarily determine that the

margin from the Department's original investigation is probative of the

behavior of Argentine producers and exporters of carbon steel wire rod

if the order were revoked. We will report to the Commission the

company-specific and ``all others'' rates from the original

investigation contained in the Preliminary Results of Review section of

this notice.

Preliminary Results of Review

As a result of this review, the Department preliminarily finds that

revocation of the order is likely to lead to continuation or recurrence

of dumping at the margins listed below:

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

Margin

Manufacturer/exporter (percent)

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Acindar.................................................... 119.11

All Others................................................. 119.11

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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 July 19, 1999. Interested

parties may submit case briefs no later than July 12, 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 July 15, 1999. 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 September 28,

1999.

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

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

Dated: May 21, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-13686 Filed 5-27-99; 8:45 am]

BILLING CODE 3510-DS-U