Antidumping: Roller chain, other than bicycle, from— Japan,

 
CONTENT

[Federal Register: November 10, 1998 (Volume 63, Number 217)]

[Notices]

[Page 63026-63030]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr10no98-40]

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-028]

Final Results of Expedited Sunset Review: Roller Chain, Other Than Bicycle, From Japan

AGENCY: Import Administration, International Trade Administration, Department of Commerce.

ACTION: Notice of Final Results of Expedited Sunset Review: Roller Chain, Other Than Bicycle, From Japan.

SUMMARY: On July 6, 1998, the Department of Commerce (``the Department'') initiated a sunset review of the antidumping finding on roller chain, other than bicycle, from Japan (63 FR 26389) 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 filedon behalf of the domestic industry and substantive comments filedon behalf of the domestic industry and respondent

[[Page 63027]]

interested parties, the Department determined to conduct an expedited review. As a result of this review, the Department finds that revocation of the antidumping finding would be likely to lead to a continuation or recurrence of dumping at the levels indicated in the Appendix to this notice.

EFFECTIVE DATE: November 10, 1998.

FOR FURTHER INFORMATION CONTACT: Martha V. Douthit or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-3207 or (202) 482-1560, respectively.

SUPPLEMENTARY INFORMATION:

Statute and Regulations

This review was 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 finding is roller chain, other than bicycle, from Japan. The term ``roller chain, other than bicycle'' includes chain, with or without attachments, whether or not plated or coated, and whether or not manufactured to American or British standards, which is used for power transmissions and/or conveyance. This chain consists of a series of alternately-assembled roller links and pin links in which the pins articulate inside from the bushings and the rollers are free to turn on the bushings. Pins and bushings are press fit in their respective link plates. Chain may be single strand, having one row of roller links, or multiple strand, having more than one row of roller links. The center plates are located between the strands of roller links. Such chain may be either single or double pitch and may be used as power transmission or conveyor chain. This finding also covers leaf chain, which consists of a series of link plates alternately assembled with pins in such a way that the joint is free to articulate between adjoining pitches. Roller chain is currently classified under the Harmonized Tariff Schedule of the United States (``HTSUS'') subheadings 7315.11.00 through 7619.90.00. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description remains dispositive.

This review covers all manufacturers and exporters of roller chain from Japan, other than Honda Motor Company and Tsubakimoto Chain, for which the finding has been revoked.

Background

On July 6, 1998, the Department initiated a sunset review of the antidumping finding on roller chain, other than bicycle, from Japan (63 FR 26389), pursuant to section 751(c) of the Act. The Department received a Notice of Intent to Participate from the American Chain Association (``ACA'') on July 20, 1998, within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. ACA claimed interested party status under section 771(9)(E) of the Act, as a trade association, a majority of whose members manufacture roller chain in the United States. We received complete substantive responses from ACA and from Daido Tsusho Co., Ltd. (``Daido Tsusho'') and Daido Corporation (collectively ``Daido'') on August 5, 1998, within the 30- day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). In its substantive response, Daido stated that Daido Tsusho is an exporter of the subject merchandise manufactured by Daido Kogyo Co., Ltd. (``Daido Kogyo'') and Enuma Chain Manufacturing Co., Ltd. (``Enuma''), and that Daido Corporation is a U.S. importer of the subject merchandise manufactured by Daido Kogyo and Enuma. Additionally, Daido Tsusho stated that it had participated in administrative reviews under its former name, Meisei Trading Co., Ltd. Daido claimed interested party status as a foreign exporter and United States importer of subject merchandise under section 771(9)(A) of the Act.

Using the information on value of exports submitted by Daido and the value of imports as reported by the United States Customs Service (``Customs'') in its annual reports to Congress on administration of the antidumping and countervailing duty laws,‹SUP›1‹/SUP› the Department determined that exports by Daido Tsusho Co., Ltd. accounted for significantly less 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, the Department determined that respondent interested parties provided an inadequate response to the notice of initiation, and, in accordance with section 351.218(e)(1)(ii)(C)(2) of the Sunset Regulations, the Department determined to conduct an expedited review.

\1\ This information is available to the public on the Internet at ``http://www.ita.doc.gov/import__admin/ records/sunset''.

On September 14, 1998, Daido submitted comments arguing that ACA's response to the notice of initiation was inadequate and, thus, the Department should conduct a 90-day sunset review and revoke the antidumping finding. Daido argued that ACA does not qualify as an interested party because four members of ACA that are U.S. manufacturers of roller chain are also importers of roller chain from Japan. On September 17 1998, we received unsolicited rebuttal comments on behalf of ACA. On October 5, 1998, Daido argued that ACA's September 17 letter should be disregarded and removed from the record because it constituted an unauthorized and unsolicited written argument.

Determination

In accordance with section 751(c)(1) of the Act, the Department conducted this review to determine whether revocation of the antidumping finding would be likely to lead to a 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 finding, and shall provide to the International Trade Commission (``the Commission'') the magnitude of the margin of dumping likely to prevail if the finding is revoked.

As discussed more fully in the ``Department's Position'' contained in the ``Continuation or Recurrence of Dumping'' section of this notice, given that dumping has continued over the life of the finding, consistent with Section II.A.3. of the Sunset Policy Bulletin, the Department determines that dumping is likely to continue if the finding were revoked. Further, on the bases discussed more fully in the ``Department's Position'' contained in the ``Magnitude of the Margin'' section of this notice, we determine that the original margins calculated by the

[[Page 63028]]

Department are probative of the behavior of the Japanese manufacturers and exporters of roller chain and we will report to the Commission the company-specific and ``all others'' margins contained in the Appendix to this notice.

Below, we address the issues raised in this sunset review.

Continuation or Recurrence of Dumping

Interested Party Comments

In its substantive response, ACA argues that the actions taken by producers and exporters of Japanese roller chain during the life of the finding indicate that ``dumping would persist, and indeed grow worse, were the finding revoked.'' (See August 5, 1998, Substantive Response of ACA.) With respect to whether dumping continued at any level above de minimis after the issuance of the finding, ACA asserts that, as documented in the final results of reviews reached by the Department, dumping levels have increased during the life of the finding, with company-specific margins ranging up to 43.29 percent.

With respect to whether imports of the subject merchandise ceased after the issuance of the finding, ACA observes that the number of firms exporting roller chain to the United States has declined dramatically in recent years, noting that the first administrative review conducted by the Department covered 110 entities, while the more recent reviews cover only a handful of firms. While recognizing that the Department's figures appear to understate the true volume of the imported subject merchandise, ACA notes that information available on the Department's web site demonstrates that imports of covered chain in 1997 surged to the highest level in at least five years.

In conclusion, ACA argues that the Department should determine that there is a likelihood that dumping would continue were the finding revoked because (1) dumping margins have been significant and have increased over the life of the finding, and (2) certain companies have ceased exporting altogether.

In its substantive response, Daido states that the revocation of the dumping finding would likely result in (1) no significant change in Japanese roller chain import volumes, (2) no significant change in Japanese roller chain prices, and (3) no adverse impact on U.S. roller chain manufacturers. (See August 5, 1998, Substantive Response of Daido.) In its submission, Daido does not address the fact that dumping margins above de minimis continue to exist. Commenting on the question of import volumes, Daido states that Japanese chain (including both subject and non-subject merchandise) import volumes increased from 20,215,319 pounds in 1973 to a high point of 38,317,728 pounds in 1985 and have since moved erratically to 24,459,000 pounds in 1997. Additionally, in its August 5, 1998, rebuttal comments, Daido states that import values are significantly affected by exchange rate fluctuations and the use of value figures is likely to produce mistaken conclusions. In its substantive response, Daido did not address the issue of whether dumping is likely to continue. Department's Position

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 basis for likelihood determinations. The Department clarified that determinations of likelihood will be made on an order-wide basis (see section II.A.3. of the Sunset Policy Bulletin). Additionally, the Department normally 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. of the Sunset Policy Bulletin).

The antidumping finding on roller chain, other than bicycle, from Japan was published in the Federal Register as Treasury Decision 73-100 (38 FR 9226, April 12, 1973). Since that time, the Department has conducted numerous administrative reviews. On August 14, 1989, and April 23, 1991, the Department revoked the finding with respect to imports from Tsubakimoto Chain Company and Honda Motor Company effective October 1982 and September 1983, respectively (54 FR 33259 and 56 FR 18564). The finding remains in effect for all other imports of roller chain from Japan.

We find that the existence of dumping margins after the issuance of the finding is highly probative of the likelihood of continuation or dumping. Deposit rates above de minimis levels continue in effect for exports by several Japanese manufacturers and exporters of roller chain (for example, Daido Kogyo; Enuma; Hitachi; Izumi Chain Manufacturing Co; Pulton Chain Company, Inc.; Sugiyama Chain Company, Ltd; and Toyota Motor Company). As discussed in Section II.A.3. of the Sunset Policy Bulletin and the SAA at 890, and the House Report at 63-64, ``[i]f companies continue dumping with the discipline of an order in place, it is reasonable to assume that dumping would continue if the discipline were removed.'' Therefore, absent argument and evidence to the contrary and, given that dumping has continued over the life of the finding, the Department determines that dumping is likely to continue if the finding were revoked.

Magnitude of the Margin

Interested Party Comments:

In its substantive response, Daido recommends that the Department select the dumping margins reported by Customs in the administrative reviews conducted immediately after the publication of the dumping finding. Specifically, Daido suggests that the Department adopt the Customs determinations that sales by Enuma and Daido Kogyo had not been made at less than fair value for a period of two years since the dumping finding. Indeed, noting that ``it appears'' that certain companies ``are not selling roller chain, other than bicycle, from Japan at less than fair value,'' in 1977 and 1978, Treasury published three Federal Register notices of tentative determinations to modify or revoke the finding of dumping on roller chain from Japan with respect to merchandise sold by Honda Motor Company, Ltd. and Toyota Motor Sales Co., Ltd. and merchandise produced and sold by Enuma and Daido Kogyo (see 42 FR 41517 (August 17, 1977), 42 FR 54043 (October 4, 1977), and 43 FR 30635 (July 17, 1978)). ACA objected to the use of those margins, stating that so much time has elapsed that those margins are no longer probative and that use of such margins ignores the fact that dumping margins have increased over the life of the finding (see August 10, 1998, Rebuttal Comments of ACA).

Daido suggests that, alternatively, consistent with the Sunset Policy Bulletin, the Department should select the margins from the first administrative review conducted by the Department, which generally covers the period April

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1, 1979 through March 31, 1980. Daido states that the dumping margin for Daido Kogyo and Enuma for that period is 1.18 percent (see 46 FR 44488 (September 4, 1981)).

ACA argues in both its substantive response and rebuttal comments that margins from 1981 are no longer probative as to the level of dumping that would likely occur should the finding be revoked. ACA proposes that, for each company which is currently being reviewed or which has been reviewed within the past five years, the Department should report to the Commission the highest margin determined or applied as the margin likely to prevail in the event of revocation. Additionally, for companies not currently being reviewed, or not reviewed within the past five years, ACA suggests that the Department select the highest ``all others'' rate from the past five years. To support its position, ACA contends that it is reasonable to expect that a company that is dumping with the restraining influence of an antidumping finding in place would continue to dump if the finding were revoked at a level at least as high as the highest recent level. Further, ACA argues that the use of a more recently calculated margin provides a better indication of the likely conduct of producers and/or exporters than 25-year, or even 18-year old conduct. Finally, ACA suggests that employing margins calculated in the most recent five years would be consistent with standard five-year reviews to be conducted by the Department.

Daido objects to the use of the highest dumping margins from the past 25 years, arguing that, in a case with such a long history as this, the best basis for predicting future conduct is past conduct-- excluding aberrational margins found to exist over the many years. Daido argues that aberrational margins result from a number of factors besides a willful intent to dump, e.g., exchange rate fluctuations and clerical errors in reporting data. Daido urges the Department to select, as the magnitude of the margin likely to prevail, a zero or de minimis margin for Daido Kogyo and Enuma because these companies demonstrated a consistent pattern of zero or de minimis margins. Department's Position

In the Sunset Policy Bulletin, the Department stated that, in a sunset review of an antidumping finding for which no company-specific margin or all others rate is included in the Treasury finding published in the Federal Register, the Department normally will provide to the Commission the company-specific margin from the first final results of administrative review published in the Federal Register by the Department. Additionally, if the first final results do not contain a margin for a particular company, the Department normally will provide the Commission, as the margin for that company, the first ``new shipper'' rate established by the Department for that finding. (See section II.B.1. of the Sunset Policy Bulletin.) Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty absorption determinations. (See sections II.B.2 and 3. of the Sunset Policy Bulletin).

Because Treasury did not publish weighted-average dumping margins in its finding, and such margins are not otherwise publicly available, the margins determined in the original investigation are not available to the Department for use in this sunset review. Under these circumstances, the Department normally will select the margin from the first administrative review conducted by the Department as the magnitude of the margin of dumping likely to prevail if the finding is revoked. We note that, to date, the Department has not issued any duty absorption findings in this case.

ACA argues that the Department should abandon its policy of selecting the margins from the first administrative review conducted by Commerce and, instead, should select the highest margins from the recent administrative reviews. In the Sunset Policy Bulletin the Department stated that ``a company may choose to increase dumping in order to maintain or increase market share'' and that ``the Department may, in response to argument from an interested party, provide to the Commission a more recently calculated margin for a particular company, where, for that particular company, dumping margins increased after the issuance of the order.'' (See section II.B.2. of the Sunset Policy Bulletin.) The Department's intent was to establish a policy of using the original investigation margin as a starting point, thus providing interested parties the opportunity and incentive to come forward with data which would support a different estimate. ACA, however, merely asserts that it is reasonable to expect that a company dumping with the restraining influence of an antidumping finding in place would continue dumping if the finding were revoked at a level at least as high as the highest recent level. Additionally, ACA suggests that the current economic crisis in Asia generally, and in Japan in particular, as well as the resulting increase in Japanese exports and the attendant surge in Japanese imports (including the 1997 surge in covered roller chain imports reflected on the Department's web site), provide further support for concluding that dumping is likely to continue if the finding were revoked. ACA did not, however, present arguments with respect to changes in margin levels as related to market share. In fact, using the volume and value of Daido Tsusho's exports of subject merchandise for five calendar years beginning with 1993, provided in Daido's substantive response, we find that, although increasing on a value basis over the five years, Daido's exports, on a volume basis, actually decreased. This information does not present the Department with a picture of the relative market share held by Daido over this period. Given the information available to the Department, it is not possible to discern whether Daido's recent margins reflect an effort to obtain or increase market share.

With respect to Daido's suggestion that the Department select rates established in administrative reviews conducted by Customs, we do not agree with ACA that margins dating back to 1977 and 1978 are no longer probative because so much time has elapsed. We do agree, however, that tentative determinations by Treasury are not an appropriate source of margins for the purpose of sunset reviews, because they were never finalized and, in fact, when considered by the Department, were determined no longer applicable.

Our review of the margin history over the life of this finding demonstrates that, for the most part, margins remained relatively constant. Although we recognize that there have been fluctuations, we do not view them as demonstrating a consistent pattern of behavior. Therefore, we determine that the original margins calculated by the Department are probative of the behavior of the Japanese manufacturers and exporters of roller chain.

Adequacy

Interested Party Comments

On September 14, 1998, Daido submitted comments arguing that ACA's response to the notice of initiation was inadequate and, thus, the Department should conduct a 90-day sunset review and revoke the antidumping finding. Daido argued that ACA does not qualify as an interested party because four members of ACA that are U.S. manufacturers of roller chain are also importers of roller chain from Japan. On September 17, 1998, we received

[[Page 63030]]

unsolicited rebuttal comments on behalf of ACA. On October 5, 1998, Daido argued that ACA's September 17 letter should be disregarded and removed from the record because it constituted an unauthorized and unsolicited written argument. Department's Position

In an expedited review, the Sunset Regulations provide only for comments on the appropriateness of the Department's determination to conduct an expedited review based on inadequate response from respondent interested parties. See section 351.309(e)(i) of the Sunset Regulations, referencing sections 351.218(e)(1)(ii) (B) and (C) (inadequate response from a foreign government or respondent interested parties, respectively). Daido's and ACA's comments do not address this issue. Section 351.218(d)(4) of the Sunset Regulations explicitly provides that, in an expedited review, the Department normally will not consider any additional information from a party after the time for filing rebuttals to substantive responses has expired. Since both parties submitted these comments after the deadline had expired, and did not request any extension of submission deadlines, we find these comments to be untimely and have not considered Daido's September 14, 1998, and October 5, 1998 submissions, or ACA's September 17, 1998, in making our final determination. We note that the parties could have submitted comments addressing the adequacy of response by domestic interested parties in either the substantive responses that were due on August 5, 1998, or August 10, 1998.

This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This five-year (``sunset'') review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.

Dated: November 3, 1998. Holly Kuga, Acting Assistant Secretary for Import Administration.

Appendix

Manufacturer/Exporter

Margin (percent)

A & K Co................................... 1.84 Ajia Kikei Boeki........................... 1.84 APC Corp................................... 0 Asia Machinery............................. 2.00 Auto Dynamics.............................. 5.36 C. Itoh.................................... 0 Central Automotive......................... 2.00 Cherry Industrial.......................... 20.00 Daido Enterprising......................... 2.00 Daido Kogyo Co., Ltd....................... 1.18 Daido Sangyo............................... 5.36 Deer Island................................ 43.29 Detroit Industries......................... 5.36 Empire Motor............................... 5.36 Enuma Chain Manufacturing Co............... 1.18 Enuma Chain/Daido.......................... 15.92 Enuma Chain/Meisi.......................... 15.92 Fee International.......................... 1.84 Fuji Lumber................................ 0 Fuji Motors (Zenoah)....................... 5.36 Fuji Seiko................................. 43.29 Fukoku..................................... 5.36 Hajime..................................... 5.36 Harima Enterprise.......................... 0 Henry Abe.................................. 5.36 HIC Trading Co., Ltd....................... 0 Hiro Enterprises........................... 0 Hitachi Metals/Hitachi Intl................ 2.76 Hitachi Metals/All Other Importers......... 1.84 HKS Japan.................................. 20.00 Hodaka Kogyosho............................ 5.36 Honda Motor................................ Revoked I & OC..................................... 5.36 Iketoku.................................... 5.36 Izumi Chain Mfg. Co., Ltd.................. 6.93 Jeico...................................... 0 Kaga Kogyo (Kaga Industries Co., Ltd.)..... 0 Kaga/APC................................... 0 Kaga Koken/TK Products..................... 1.00 Karl Mayer Textile......................... 0 Kashima Trading............................ 43.29 Katayama Chain Co., Ltd.................... 43.29 Kawasaki................................... 1.00 Kokusai.................................... 5.36 Marubeni................................... 0 Maruka Machinery........................... 5.36 MC Intl.................................... 5.36 Meiho Yoko................................. 43.29 Meisei Trading............................. 1.18 Miewa Trading.............................. 3.00 Mitsui..................................... 13.40 Mitsubishi................................. 5.36 Mitsubishi Boeki........................... 34.80 Mitsubishi Motors.......................... 5.36 Myasaki Shokai............................. 5.36 Naniwa Kogyo............................... 43.29 Nankai Buhin............................... 5.36 Nickel & Lyons............................. 5.36 Nippo Buhin................................ 5.36 Nissan Motor............................... 0 Nissei Company............................. 12.80 Nissho Iwai................................ 0 Nomura Shoji............................... 5.36 Oriental Chain............................. 0 Osaka Buhin................................ 5.36 Pulton Chain............................... 0 Pulton/HIC Trading......................... 0 Pulton/I&OC................................ 0 Refac Intl................................. 5.36 Rocky Asia................................. 6.93 Royal Industires........................... 2.00 Ryobi Ltd.................................. 2.00 Sanko Co................................... 9.37 Schneider Engineering...................... 2.00 Shima Trading.............................. 6.99 Shinyei Kaisha............................. 5.36 Shinyo Ind................................. 43.29 Sugiyama/Fuji Lumber....................... 0 Sugiyama/Harima Enterprise................. 0 Sugiyama/HKK............................... 15 Sugiyama/I & OC............................ 0 Sugiyama/All Others........................ 0 Sumitomo Shoji Kaisha...................... 5.36 Suzuki Motor............................... 0 Tabard..................................... 43.29 Taikyo Sangyo.............................. 0 Taiyo Shokai............................... 43.29 Takara Auto Parts.......................... 29.52 Takasago (currently RK Excel).............. 5.36 Tanaka Kogyo............................... 5.36 Tashiro.................................... 5.36 Tatsumiya Kogyo............................ 2.00 TEC Engineering............................ 5.36 Teijin Shojhi Kaisha Ltd................... 5.36 TK Products................................ 1.00 Tokyo Enterprise........................... 5.36 Tokyo Incentive............................ 5.36 Tokyo Ryuki Seizo.......................... 0 Tosho...................................... 5.36 Toyo Kogyo Mazda........................... 0 Toyo Menka Kaisha.......................... 5.36 Toyota Motor Sales......................... 43.29 Tsubakimoto Chain.......................... Revoked Tsujimoto Shokai........................... 5.36 United Trading Co.......................... 5.36 Universal Trading.......................... 5.36 Y-K Brothers Shokai........................ 5.36 Yamaha Motor............................... 2.00 Yamakyu Chain.............................. 9.37 Yoshida Auto............................... 43.29 Yoshimura.................................. 5.36 Zushi Industries........................... 5.36 All Other Firms............................ 15.92

[FR Doc. 98-30142Filed11-9-98; 8:45 am]

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