Initiation of Antidumping Duty Investigations: Certain Expandable Polystyrene Resins from Indonesia and the Republic of Korea

DEPARTMENT OF COMMERCE

International Trade Administration

[A-560-810, A-580-843]

Initiation of Antidumping Duty Investigations: Certain Expandable

Polystyrene Resins from Indonesia and the Republic of Korea

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: December 20, 1999.

FOR FURTHER INFORMATION CONTACT: Valerie Ellis or Charles Riggle at

(202) 482-2336 and (202) 482-0650, respectively; Import Administration,

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

Street and Constitution Avenue, NW., Washington, DC 20230.

Initiation of Investigations

The Applicable Statute and Regulations

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''). In addition, unless

otherwise indicated, all citations to the Department's regulations are

references to the provisions codified at 19 CFR Part 351 (1999).

The Petitions

On November 22, 1999, the Department of Commerce (``the

Department'') received petitions on certain expandable polystyrene

resins (``EPS'') from Indonesia and the Republic of Korea (``Korea'')

filed in proper form by BASF Corporation, Huntsman Expandable Polymers

Company LC, Nova Chemicals Inc., and Styrochem U.S., Ltd.,

(collectively ``the petitioners''). On December 1 and 3, 1999, the

Department received amendments to the petitions.

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

allege that imports of EPS from the above-mentioned countries 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 an industry in the United States.

The Department finds that the petitioners filed these petitions on

behalf of the domestic industry because they are interested parties as

defined in sections 771(9)(C) and (D) of the Act, and they have

demonstrated sufficient industry support with respect to each of the

antidumping investigations they are requesting the Department to

initiate (see Determination of Industry Support for the Petitions,

below).

Scope of Investigations

The scope of these investigations includes certain expandable

polystyrene resins in primary forms; namely, raw material or resin

manufactured in the form of polystyrene beads, whether of regular

(shape) type or modified (block) type, regardless of specification,

having a weighted-average molecular weight of between 160,000 and

260,000, containing from 3 to 7 percent blowing agents, and having bead

sizes ranging from 0.4 mm to 3 mm.

Specifically excluded from the scope of these investigations is

off-grade, off-specification expandable polystyrene resins.

The covered merchandise is found in the Harmonized Tariff Schedule

of the United States (HTSUS) subheading 3903.11.00.00. Although this

HTSUS subheading is provided for convenience and customs purposes, the

written description of the merchandise is dispositive.

During our review of the petitions, we discussed the scope with the

petitioners to ensure that it accurately reflects the product for which

the domestic industry is seeking relief. Moreover, as discussed in the

preamble to the Department's regulations (62 FR 27323), we are setting

aside a period for parties to raise issues regarding product coverage.

The Department encourages all parties to submit such comments by

January 12, 2000. Comments should be addressed to Import

Administration's Central Records Unit at Room 1870, U.S. Department of

Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230. The period of scope consultations is intended to provide the

Department with ample opportunity to consider all comments and consult

with parties prior to the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

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

behalf of the domestic industry. Section 732(c)(4)(A) of the Act

provides that a petition meets this requirement 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 total 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 Act 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 produce 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. While both the Department and the ITC

must apply the same statutory definition regarding the domestic like

product (see section 771(10) of the Act), 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 differences do not render the decision of either

agency contrary to the law.1

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

\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 from Japan: Final Determination; Rescission of

Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-

81 (July 16, 1991).

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

Section 771(10) of the Act defines the 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 domestic

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. Moreover, the petitioners do not offer a definition of

domestic like product distinct from the scope of the investigation.

In this case, there is one domestic like product, which is defined

in the ``Scope of Investigations'' section, above. The Department has

no basis on the record to find the petitioners' definition of the

domestic like product to be inaccurate. No comments were received on

this issue. The Department, therefore, has adopted the domestic like

product definition set forth in the petitions.

Moreover, the Department has determined that the petitions (and

subsequent amendments) contain adequate evidence of industry support;

therefore, polling is unnecessary (see Attachments to Initiation

Checklist, Re: Industry Support, December 13, 1999). To the best of the

Department's knowledge, the producers who support the petition account

for more than 50

[[Page 71113]]

percent of the production of the domestic like product. Additionally,

no person who would qualify as an interested party pursuant to section

771(9)(A), (C), (D), (E) or (F) of the Act has expressed opposition on

the record to the petition. Accordingly, the Department determines that

this petition is filed on behalf of the domestic industry within the

meaning of section 732(b)(1) of the Act.

Export Price and Normal Value

The following are descriptions of the allegations of sales at less

than fair value upon which the Department's decision to initiate these

investigations is based.

The petitioners, in determining normal value (``NV'') for Indonesia

and Korea relied upon price data contained in confidential market

research reports filed with the Department. At our request, the

petitioners arranged for the Department to contact the author of the

reports to verify the accuracy of the data, the methodology used to

collect the data, and the credentials of those gathering the market

research. The Department's discussions with the author of the market

research reports are summarized in Memorandum to the File: Telephone

Conversation with Market Research Firm dated December 3, 1999. For a

more detailed discussion of the deductions and adjustments relating to

home market price, U.S. price and factors of production and sources of

data for each country named in the petition, see Initiation Checklist,

dated December 13, 1999. Should the need arise to use, as facts

available under section 776 of the Act, any of this information in our

preliminary or final determinations, we may re-examine the information

and revise the margin calculations, if appropriate.

Indonesia

The petitioners identified PT Risjad Brasali Styrindo, PT Polychem

Lindo, Inc., and PT Maspion Polystyrene as producers and exporters of

EPS to the United States. For EPS from Indonesia, the petitioners based

EP on the average unit value (``AUV'') of the merchandise as derived

from the U.S. government's IM-145 data. The petitioners calculated a

net U.S. price by subtracting from the AUV estimated costs for foreign

inland freight derived from data contained in the confidential market

research report.

NV is based upon prices for products which are identical to the

products used as the basis for the U.S. price. The petitioners

calculated NV by deducting foreign movement charges and domestic

packing expenses, and adding U.S. packing expenses. The petitioners did

not adjust normal value for differences in credit expenses because in

the Indonesian market, the terms and conditions of domestic

transactions were ``cash in advance.'' The estimated dumping margins

for EPS from Indonesia range from 94.93 to 96.65 percent.

Korea

The petitioners identified Kumho Chemicals Co., Ltd.; LG Chemical,

Ltd., Dongbu Hannong Chemical Co., Shin Ho Petrochemical Co., Ltd.,

Cheil Industries, Inc., and BASF Styrenics Korea, Ltd. as producers and

exporters of EPS to the United States. For EPS from Korea, the

petitioners based EP either on the AUV of the merchandise as derived

from the U.S. government's IM-145 data or on actual invoices to U.S.

customers and supporting affidavits from U.S. salespersons. They also

relied on data contained in the confidential market research report

regarding adjustments and deductions.

For comparisons using actual invoices and affidavits, the

petitioners calculated a net U.S. price by subtracting estimated costs

for selling agent commissions, U.S. inland freight, port charges,

international shipping charges, customs duties, and foreign inland

freight. For AUV comparisons, the petitioners deducted foreign market

inland freight.

NV is based upon prices for products which are identical to the

products used as the basis for the U.S. price. The petitioners

calculated NV by deducting foreign movement charges and domestic

packing expenses, and adding U.S. packing expenses. The petitioners

also adjusted normal value for differences in credit expenses. The

estimated dumping margins for EPS from Korea ranged from 43.79 to 89.39

percent.

Fair Value Comparisons

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

believe that imports of EPS from Indonesia and Korea are being, or are

likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

The petitions allege that the U.S. industry producing the domestic

like products is being materially injured, and is threatened with

material injury, by reason of the individual and cumulated imports of

the subject merchandise sold at less than NV. The petitioners explained

that the industry's injured condition is evident in the declining

trends in (1) U.S. market share, (2) average unit sales values, (3)

share of domestic consumption, (4) operating income, (5) sales, and (6)

capacity utilization.

The allegations of injury and causation are supported by relevant

evidence including U.S. Bureau of the Census import data, lost sales,

and pricing information. While the petitioners did not submit

information on other injurious trends such as a decline in employment,

hours worked and wages paid, the Department assessed the allegations

and supporting evidence regarding material injury and causation and

determined that these allegations are supported by accurate and

adequate evidence and meet the statutory requirements for initiation

(see Attachments to Initiation Checklist, Re: Material Injury, December

13, 1999).

Initiation of Antidumping Investigations

Based upon our examination of the petitions on EPS from Indonesia

and Korea, we find that the petitions meet the requirements of section

732 of the Act. Therefore, we are initiating antidumping duty

investigations to determine whether imports of EPS from Indonesia and

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

than fair value. Unless this deadline is extended, we will make our

preliminary determinations no later than 140 days after the date of

this initiation.

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 Indonesia and Korea. We will attempt to provide a

copy of the public versions 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 Determinations by the ITC

The ITC will determine, by no later than January 6, 2000, whether

there is a reasonable indication that imports of certain expandable

polystyrene resins from Indonesia and Korea are causing material

injury, or threatening to cause material injury, to a U.S. industry. A

negative ITC determination for any country will result in the

investigation being terminated with respect to that country; otherwise,

these investigations will proceed according to statutory and regulatory

time limits.

This notice is published pursuant to section 777(i) of the Act.

[[Page 71114]]

Dated: December 13, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-32917 Filed 12-17-99; 8:45 am]

BILLING CODE 3510-DS-P