Antidumping: Structural steel beams from— Korea,

[Federal Register: August 3, 1999 (Volume 64, Number 148)]

[Notices]

[Page 42088-42091]

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

[DOCID:fr03au99-32]

DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-842]

Notice of Initiation of Countervailing Duty Investigation: Structural Steel Beams From the Republic of Korea

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

EFFECTIVE DATE: August 3, 1999.

FOR FURTHER INFORMATION CONTACT: Eric B. Greynolds at (202) 482-6071 or Tipten Troidl at (202) 482-1767, Office of CVD/AD Enforcement VI, Import Administration, International Trade Administration, U.S. Department of Commerce, Room 1870, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230.

[[Page 42089]]

Initiation of Investigation

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 to the regulations codified at 19 C.F.R. Part 351 (1998) and to the substantive countervailing duty regulations published in the Federal Register on November 25, 1998 (63 FR 65348).

The Petition

On July 7, 1999, the Department of Commerce (the Department) received petitions filedin proper form on behalf of Northwestern Steel and Wire Co., Nucor-Yamato Steel Co., TXI-Chaparral Steel Co., and the United Steelworkers of America AFL-CIO (the petitioners). Supplements to the petitions were filedon July 22 and 23, 1999.

In accordance with section 702(b)(1) of the Act, petitioners allege that manufacturers, producers, or exporters of structural beams from the Republic of Korea (Korea) received countervailable subsidies within the meaning of section 701 of the Act.

The Department finds that petitioners filedthe petition on behalf of the domestic industry because they are interested parties as defined under sections 771(9)(C) and (D) of the Act. The petitioners have demonstrated sufficient industry support with respect to this countervailing duty investigation, which they are requesting the Department to initiate (see Determination of Industry Support for the Petition below).

Scope of the Investigation

For purposes of this investigation, the products covered are doubly-symmetric shapes, whether hot-or cold-rolled, drawn, extruded, formed or finished, having at least one dimension of at least 80 mm (3.2 inches or more), whether of carbon or alloy (other than stainless) steel, and whether or not drilled, punched, notched, painted, coated, or clad. These products (Structural Steel Beams) include, but are not limited to, wide-flange beams (W shapes), bearing piles (HP shapes), standard beams (S or I shapes), and M-shapes.

All products that meet the physical and metallurgical descriptions provided above are within the scope of this investigation unless otherwise excluded. The following products, are outside and/or specifically excluded from the scope of this investigation:

‹bullet› Structural steel beams greater than 400 pounds per linear foot or with a web or section height (also known as depth) over 40 inches.

In addition to the above exclusion, petitioners have requested that the Department exclude certain special section I-shapes. See Exhibit 5 of the petition, submitted on July 7, 1999, see also Attachment A of the July 23, 1999 petition amendment. The Department is currently considering this exclusion request, and attempting to define the request using physical, mechanical, and chemical criteria.

The merchandise subject to these investigations is classified in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 7228.70.3040, 7228.70.6000. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise under investigation is dispositive.

During our review of the petition, we discussed the scope with the petitioners to ensure that the scope in the petition accurately reflects the product for which the domestic industry is seeking relief. Moreover, as we 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 August 16, 1999. 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, D.C. 20230. Any product coverage comment filedmust be filedfor the record of each structural steel beam investigation (i.e., commentors must file all coverage comments on the record of the investigations for structural steel beams from Germany, Japan, South Korea (both antidumping and countervailing duty investigations) and Spain). 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 determination.

Consultations

Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department invited representatives of the Government of Korea (GOK) for consultations with respect to the petition filed. The GOK declined to hold consultations with the Department regarding the petition, but on July 20, 1999, submitted a letter to the Department expressing opposition to the petition.

Determination of Industry Support for the Petition

Section 702(b)(1) of the Act requires that a petition be filedon behalf of the domestic industry. Section 702(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 the 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 (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 (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 Therefore 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 which 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

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the scope as defined in the petition. Moreover, petitioners do not offer a definition of domestic like product distinct from the scope of the investigation.

The domestic like product referred to in the petition is the single domestic like product defined in the ``Scope of Investigation'' section, above. The Department has no basis on the record to find the petition's definition of the domestic like product to be inaccurate. The Department has, therefore, adopted the domestic like product definition set forth in the petition.

In this case, the Department has determined that the petition and supplemental information to the petition contain adequate evidence of sufficient industry support (see Attachment to the Initiation Checklist Re: Industry Support, July 27, 1999). Producers and workers supporting the petition represent over 50 percent of total production of the domestic like product. Therefore, polling was not necessary.

Accordingly, the Department determines that these petitions are filedon behalf of the domestic industry within the meaning of section 702(b)(1) of the Act.

Injury Test

Because Korea is a ``Subsidies Agreement Country'' within the meaning of section 701(b) of the Act, section 701(a)(2) applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from Korea materially injure, or threaten material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

Petitioners allege that the U.S. industry producing the domestic like product 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. Petitioners explained that the industry's injured condition is evident in the declining trends in output and net operating profits. The allegations of injury and causation are supported by relevant evidence including U.S. Customs import data, lost sales, and pricing information. 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, July 27, 1999).

Allegations of Subsidies

Section 702(b) of the Act requires the Department to initiate a countervailing duty proceeding whenever an interested party files a petition, on behalf of an industry, that (1) alleges the elements necessary for an imposition of a duty under section 701(a), and (2) is accompanied by information reasonably available to petitioners supporting the allegations.

Initiation of Countervailing Duty Investigation

The Department has examined the petition on structural steel beams from Korea and found that it complies with the requirements of section 702(b) of the Act. Therefore, in accordance with section 702(b) of the Act, we are initiating a countervailing duty investigation to determine whether manufacturers, producers, or exporters of structural beams from Korea receive subsidies. See the July 27, 1999, memorandum to the file regarding the initiation of this investigation (public documents on file in the Central Records Unit of the Department of Commerce, Room B- 099).

We are including in our investigation the following programs alleged in the petition to have provided countervailable subsidies to producers and exporters of the subject merchandise in Korea: 1. GOK Directed Credit Programs

1. Pre-1992 Directed Credit

2. Post-1991 Directed Credit 2. Debt Restructuring for Kangwon Industries 3. Private Capital Investment Act (PCIA) 4. Tax Programs Under the Tax Reduction and Exemption Control Act (TERCL)

1. Technical Development Reserve Funds (Article 8)

2. Tax Credit for Investment in Equipment to Develop Technology and Manpower/Investment Tax Credit (Article 10)

3. Reserve for Export Loss (Article 16)

4. Reserve for Overseas Market Development (Article 17)

5. Tax Credits for Vocational Training (Article 18)

6. Exemption of Corporation Tax on Dividend Income from Overseas Resources Development Investment (Article 24)

7. Tax Credit for Investment in Productivity Improvement Facilities (Article 25)

8. Tax Credits for Investment in Specific Facilities (Article 26)

9. Tax Credits for Temporary Investments (Article 27)

10. Social Indirect Capital Investment Reserve Funds (Article 28)

11. Energy-Saving Facilities Investment Reserve Funds (Article 29)

12. Tax Credits for Specific Investments (Article 71)

13. Mining Investment Reserve Funds (Article 95) 5. Reserve for Investment 6. Asset Revaluation Pursuant to TERCL Article 56(2) 7. Special Cases of Tax for Balanced Development among Areas (TERCL Articles 41, 42, 43, 44, and 45) 8. Industry Promotion and Research and Development Subsidies

1. Promotion Fund for Science and Technology

2. Highly Advanced National Project Fund

3. Steel Campaign for the 21st Century 9. Overseas Resource Development (Loans and Grants) Programs 10. Excessive Duty Drawback 11. Electricity Discounts 12. Scrap Reserve Fund 13. Export Insurance Rates By The Korean Export Insurance Corporation 14. Short-Term Export Financing 15. Korean Export-Import Bank Loans 16. Export Industry Facility Loans (EIFL) and Specialty Facility Loans 17. Loans from the Energy Savings Fund 18. Tax Incentives for Highly Advanced Technology Businesses 19. Special Depreciation of Assets Based on Foreign Exchange Earnings

Petitioners have also alleged that Kangwon was uncreditworthy from 1991 through 1998. Based upon the information provided by petitioners, including financial ratios, we are initiating an investigation of Kangwon's creditworthiness for the years 1991 through 1998.

We are not including in our investigation the following programs alleged to be benefitting producers and exporters of the subject merchandise in Korea:

1. Tax Credit for Technology and Manpower Development Expenses (Article 9 of TERCL)

   Petitioners alleged that producers and exporters of the subject merchandise may be benefitting from this program. However, we have decided not to initiate an investigation of this program. We recently examined this program in the Final Affirmative Countervailing Duty Determination: Stainless Steel Sheet and Strip in Coils From the Republic of Korea, 64 FR 30636 (June 8, 1999) (Sheet and Strip). In Sheet and Strip, we found this program not countervailable. See Sheet and Strip, 64 FR at 30645-6. Petitioners have provided no new information or

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   evidence of changed circumstances to warrant a reexamination of this program.

2. Free Trade Zones (FTZs)

   In 1997, the GOK announced its intention of establishing FTZs in the ports of Pusan and Kwangyang. Petitioners allege that special concessions, such as various tax and customs incentives, apply only to companies in GOK-designated FTZs thereby bestowing regionally specific subsidies on companies located in these zones. However, petitioners point out, neither Inchon nor Kangwon is located in the ports scheduled to be designated as FTZs by the GOK. Moreover, petitioners do not provide any evidence in support of their contention that the GOK may have expanded the FTZ program to include ports where Inchon and Kangwon have operations. Therefore, we are not initiating an investigation of this program.

   Distribution of Copies of the Petitions

   In accordance with section 702(b)(4)(A)(i) of the Act, copies of the public version of the petition have been provided to the representatives of Korea. We will attempt to provide copies of the public version of the petition to all the exporters named in the petition, as provided for under section 351.203(c)(2) of the Department's regulations.

   ITC Notification

   Pursuant to section 702(d) of the Act, we have notified the ITC of this initiation.

   Preliminary Determination by the ITC

   The ITC will determine by August 23, 1999, whether there is a reasonable indication that an industry in the United States is materially injured, or is threatened with material injury, by reason of imports of structural steel beams from Korea. A negative ITC determination will result in the investigation being terminated; otherwise, the investigation will proceed according to statutory and regulatory time limits.

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

   Dated: July 27, 1999. Robert S. LaRussa, Assistant Secretary for Import Administration.

   [FR Doc. 99-19920Filed8-2-99; 8:45 am]

   BILLING CODE 3510-DS-P