Antidumping: Sugar and syrups from— Canada,

[Federal Register: April 26, 1999 (Volume 64, Number 79)]

[Notices]

[Page 20253-20257]

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

[DOCID:fr26ap99-51]

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.

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 filedon behalf of the domestic industry and adequate substantive comments filedon 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.

\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).

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.

\2\ See Sugar and Syrups from Canada; Final Results of Changed Circumstances Antidumping Duty Administrative Review, 61 FR 51275 (October 1, 1996).

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\

\3\ See Sugar and Syrups from Canada: Extension of Time Limit for Preliminary Results of Five-Year Review, 64 FR 3683 (January 25, 1999).

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.‹SUP›4‹/SUP› 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.‹SUP›5‹/SUP›

\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.

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 ‹SUP›6‹/SUP› and 409 percent for sugar entering the United States subject to the tier 2 tariff.‹SUP›7‹/SUP›

\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.

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.‹SUP›8‹/SUP› 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.

\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).

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.‹SUP›9‹/SUP›

\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.

The Department also considered whether dumping was eliminated after

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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.‹SUP›10‹/SUP›

\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.

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.‹SUP›11‹/SUP› 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.

\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.

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.‹SUP›12‹/SUP› 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.

\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.

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.‹SUP›13‹/SUP› 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.'' ‹SUP›14‹/SUP› 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.'' ‹SUP›15‹/SUP› Therefore, we are not persuaded that the world market price of sugar will continue to fall as asserted by the USBSA.

\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.

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. ‹SUP›16‹/SUP› 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.

\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.

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.‹SUP›17‹/SUP› Further, based on current U.S. and Canadian pricing, the USBSA estimated dumping margins ranging from 9.3 percent to 409.0 percent.

\17\ See Antidumping Duty Order; Sugar and Syrups from Canada, 45 FR 24128 (April 9, 1980).

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 filednot 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. 99-10287Filed4-23-99; 8:45 am]

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