Expected Non-Market Economy Wages: Request for Comment on Calculation Methodology, 37761-37764 [05-12862]
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Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
Order: Stainless Steel Sheet and Strip in
Coils from Japan, 64 FR 40565 (July 27,
1999). These requirements shall remain
in effect until publication of the final
results of the next administrative
review.
This notice also serves as a final
reminder to importers of their
responsibility under 19 CFR 351.402(f)
to file a certificate regarding the
reimbursement of antidumping duties
prior to liquidation of the relevant
entries during this review period.
Failure to comply with this requirement
could result in the Secretary’s
presumption that reimbursement of
antidumping duties occurred and the
subsequent assessment of doubled
antidumping duties.
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
Margin
with 19 CFR 351.305(a)(3). Timely
Manufacturer/exporter
(percent)
written notification of return/
destruction of APO materials or
Kawasaki Steel Corporation/JFE
Steel Corporation ......................
57.87 conversion to judicial protective order is
hereby requested. Failure to comply
with the regulations and the terms of an
Assessment and Cash Deposit
APO is a sanctionable violation. We are
Instructions
issuing and publishing this
The Department shall determine, and
determination and notice in accordance
U.S. Customs and Border Protection
with sections 751(a)(1) and 777(i) of the
(CBP) shall assess, antidumping duties
Act.
on all appropriate entries. We will issue
Dated: June 24, 2005.
assessment instructions directly to CBP
Joseph A. Spetrini,
within 15 days of publication of these
final results of review.
Acting Assistant Secretary for Import
Administration.
The following cash deposit
requirements will be effective for all
[FR Doc. E5–3442 Filed 6–29–05; 8:45 am]
shipments of the subject merchandise
BILLING CODE 3510–DS–P
entered, or withdrawn from warehouse,
for consumption on or after the
publication date of the final results of
DEPARTMENT OF COMMERCE
this administrative review, as provided
International Trade Administration
by section 751(a)(1) of the Act: (1) The
cash deposit rate for KSC/JFE is 57.87
Expected Non–Market Economy
percent; (2) for previously reviewed or
investigated companies not listed above, Wages: Request for Comment on
the cash deposit rate will continue to be Calculation Methodology
the company-specific rate published for AGENCY: Import Administration,
the most recent period; (3) if the
International Trade Administration,
exporter is not a firm covered in this
Department of Commerce.
review, a prior review, or the original
ACTION: Request for comments
less than fair value (LTFV)
investigation, but the manufacturer is,
SUMMARY: The Department of Commerce
the cash deposit rate will be the rate
(‘‘Department’’) has a long–standing
established for the most recent period
practice of calculating expected non–
for the manufacturer of the
market economy (‘‘NME’’) wages for use
merchandise; and (4) the cash deposit
as surrogate values in antidumping
rate for all other manufacturers or
proceedings involving NME countries.
exporters will continue to be 40.18
These expected NME wages are
percent, the ‘‘All Others’’ rate made
calculated annually in accordance with
effective by the LTFV investigation. See § 351.408(c)(3) of the Department’s
Notice of Amendment of Final
regulations. This notice describes the
Determination of Sales at Less Than
Department’s methodology for the
Fair Value and Antidumping Duty
calculation of expected NME wages and
section 776(b) of the Act because neither
KSC nor its alleged successor-in-interest
JFE responded to the Department’s
questionnaire and, therefore, failed to
cooperate to the best of its ability.
Consistent with our decision to apply
AFA to KSC and JFE for failure to
respond to the Department’s request for
information, and because the interested
parties had consistently referred to KSC
as JFE in their various submissions on
the record of this review, we stated our
intention to apply the same (AFA) rate
to both KSC and JFE for cash deposit
and assessment purposes, without
having conducted officially a successorin-interest analysis, in order to capture
all entries of the subject merchandise by
either KSC or JFE. See Preliminary
Results at 70 FR 18369, 18372. No party
objected to the Department’s
preliminary decision. Thus, the
following margin applies for the period
July 1, 2003, through June 30, 2004:
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37761
provides the public with an opportunity
to comment on this methodology in
response to comments that have been
submitted in several NME proceedings.
For purposes of public comment, the
Department has also calculated
expected NME wages using currently
available data for 2003 and the
methodology described herein. This is a
sample calculation based on 2003 data,
and is subject to data updates and
revisions.
DATES: Comments must be submitted no
later than thirty days after publication of
this Notice.
ADDRESSES: Written comments (original
and six copies) should be sent to Joseph
A. Spetrini, Acting Assistant Secretary
for Import Administration, U.S.
Department of Commerce, Central
Records Unit, Room 1870, 14th Street
and Pennsylvania Avenue N.W.,
Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: John
D. A. LaRose, Assistant to the Senior
Enforcement Coordinator, Office of
China/NME Compliance or Shauna Lee–
Alaia, Policy Analyst, Office of Policy,
Import Administration, U.S. Department
of Commerce, 14th Street and
Constitution Avenue N.W., Washington,
DC 20230, (202) 482–3794 or (202) 482–
2793.
SUPPLEMENTARY INFORMATION:
Background
With regard to its calculation of
expected NME wages, the Department
stated in its November 17, 2004, Final
Determination in the investigation of
Wooden Bedroom Furniture from the
People’s Republic of China, that it
would ‘‘invite comments from the
general public on this matter in a
proceeding separate from the
{Furniture} investigation.’’ Final
Determination of Sales at Less Than
Fair Value: Wooden Bedroom Furniture
From the People’s Republic of China, 69
FR 67313 (November 17, 2004) and
accompanying Issues and Decisions
Memorandum at 180 (Cmt. 23).
The NME Wage Rate Methodology
The Department’s regulations
generally describe the methodology by
which the Department calculates
expected NME wages:
For labor, the Secretary will use
regression–based wage rates
reflective of the observed
relationship between wages and
national income in market economy
countries. The Secretary will
calculate the wage rate to be
applied in nonmarket economy
proceedings each year. The
calculation will be based on current
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Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
data, and will be made available to
the public.
19 CFR 351.408(c)(3).
In accordance with § 351.408(c)(3),
the Department annually calculates
expected NME wages in two steps. First,
the Department uses regression analysis1
to estimate a linear relationship
between per–capita gross national
income (‘‘GNI’’) and hourly wages in
market economy (‘‘ME’’) countries.
Second, the Department uses the results
of the regression and NME GNI data to
estimate hourly wage rates for NME
countries.
There is usually a two-year interval
between the current year and the most
recent reporting year of the data
required for this methodology due to the
practices of the respective data sources.
The Department bases its regression
analysis on this most recent reporting
year, which the Department refers to as
the ‘‘Base Year.’’ For example, the
Department relied upon data from 2001
to calculate expected NME wages in
2003, i.e., the ‘‘Base Year’’ for the 2003
calculation was 2001. In practice, the
‘‘Base Year,’’ i.e., the year upon which
the regression data are based, is two
years prior to the year in which the
Department conducts its regression
analysis.
1. Regression Analysis
The Department’s regression analysis,
which describes generally the
relationship between wages and GNI,
relies upon four separate data series: (A)
country–specific wage data for 56
countries from Chapter 5B of the
International Labour Organization’s
(‘‘ILO’’) Yearbook of Labour Statistics;
(B) country–specific consumer price
index (‘‘CPI’’) data from the
International Financial Statistics of the
International Monetary Fund (‘‘IMF’’);
(C) exchange rate data from the IMF’s
International Financial Statistics; and
(D) country–specific GNI data from the
World Development Indicators of the
World Bank (‘‘WB’’).
The wage rate data described above
are converted to hourly wage rates and
adjusted using CPI data to be
representative of the current Base Year.
The data are then converted to U.S.
dollars using the appropriate exchange
rate data. These adjusted wage rate data
are ultimately regressed on GNI.
The following sections describe each
data series and how it is used.
(A) Wage Data
For each of 56 countries, the
Department chooses a single wage rate
that represents a broad measure of
1 Ordinary
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least squares regression.
16:26 Jun 29, 2005
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wages for that country that is most
contemporaneous with the Base Year.
To arrive at a single wage rate for each
country from among the many wage
rates included in the ILO database for
each country, the Department prioritizes
the following ILO data parameters2 in
the following order:
1. ‘‘Sex,’’ i.e., male/female coverage;
2. ‘‘Sub–Classification,’’ i.e., coverage
of different types of industry;
3. ‘‘Worker Coverage,’’ i.e., coverage
of different types of workers, such
as wage earners or salaried
employees;
4. ‘‘Type of Data,’’ i.e., the unit of time
for which the wage is reported,
such as per hour or per month; and,
5. ‘‘Source ID,’’ i.e., a code for the
source of the data.
First, the Department looks to the
parameter for gender. For the ‘‘Sex’’
parameter, the Department always
chooses data that cover both men and
women.3
Second, for the ‘‘Sub–Classification’’
parameter, the Department chooses in
each instance data that cover all
reported industries in a given country
(indicated in the database by a value of
‘‘Total’’ for the ‘‘Sub–Classification’’
parameter).
When a wage rate that meets these
two criteria (for ‘‘Sex’’ and ‘‘Sub–
Classification’’) is not available for the
Base Year, the Department will use the
most recently available data within five
years of the Base Year, thereby
considering a total of six years of data.
For example, when the Base Year was
2001, the Department used the data
reported for the most recent year
between the years of 1996 and 2001.
The Department does not choose wage
rate data that do not meet the
requirements for ‘‘Sex’’ and ‘‘Sub–
Classification’’ described above. If there
is more than one record in the ILO
database that meets those requirements,
the Department looks to the remaining
parameters. Once the Department’s
requirements for these two parameters
are satisfied, the Department then
prioritizes data that are closest to the
Base Year within the remaining ILO
parameters discussed below.
For example, for the third parameter,
the Department generally prioritizes
‘‘wage earners,’’ ‘‘employees’’ and ‘‘total
2 Each data point in the ILO database is
accompanied by values for each of a number of
parameters that describe the characteristics of the
data. These parameters include those enumerated
above, and also include two other parameters:
‘‘Source,’’ i.e., the original survey source of the data
and ‘‘Classification,’’ i.e., the industrial
classification.
3 The Department does not consider values of
‘‘Indices, Men and Women’’ for this parameter.
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employment,’’ in that order for the
parameter ‘‘Worker Coverage.’’
However, the Department would choose
more contemporaneous ‘‘employees’’
data over less contemporaneous ‘‘wage
earner’’ data.
Fourth, when the values for all other
parameters are equal, the Department
prioritizes data reported on an hourly
basis over that reported on a monthly or
weekly basis for the parameter ‘‘Type of
Data.’’
Fifth, if necessary, the Department
prioritizes data with a ‘‘Source ID’’
value of ‘‘1’’ over ‘‘2’’ or ‘‘3.’’
Finally, it is the Department’s normal
practice to eliminate aberrational values
(i.e., values that vary in either direction
in the extreme from year to year) from
the wage rate dataset.
The ILO data that are not reported on
an hourly basis are converted to an
hourly basis based on the premise that
there are 44 working hours per week
and 192 working hours per month.
(B) CPI Data
Once hourly figures have been
calculated based on the wage rate data
discussed above, the wages are adjusted
to the Base Year on the basis of the
Consumer Price Index for each country,
as reported by the IMF’s International
Financial Statistics. This adjustment is
made for any wage rate data not
reported for the Base Year.
(C) Exchange Rate Data
These inflation–adjusted wage data,
which are denominated in the national
currency of their country, are then
converted to U.S. dollars using Base
Year period–average exchange rates
reported by the IMF’s International
Financial Statistics.
Thus, using (A) wage data, (B) CPI
data and (C) exchange rate data,
discussed above, the Department arrives
at hourly wages, denominated in U.S.
dollars and adjusted for inflation for
each of the 56 countries for which all
the above data are available.
(D) GNI Data
The Department uses Base Year GNI
data for each of the 56 countries in the
Department’s analysis, as reported by
the WB. GNI data are denominated in
U.S. dollars current for the Base Year.
The WB defines GNI per capita as gross
national product (‘‘GNP’’) per capita,
which is ‘‘the dollar value of a country’s
final output of goods and services in a
year divided by its population.’’ The
WB further explains that this measure
‘‘reflects the average income of a
country’s citizens.’’ See https://
www.worldbank.org/depweb/english/
modules/glossary.html.
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Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
The Department conducts its
regression analysis4 using the Base Year
wages per hour in U.S. dollars discussed
above and Base Year GNI per capita in
U.S. dollars to arrive at the following
equation: Wagei = Y–intercept + X–
coefficient * GNI. The X–coefficient
describes the slope of the line estimated
by the regression analysis, while the Y–
intercept is the point on the Y–axis
where the regression line intercepts the
Y–axis. The results of this regression
analysis describe generally the
relationship between hourly wages and
GNI.
2. Application of Regression Results to
NME GNI Data
The Department applies the NME
Base Year GNI to the equation presented
above to arrive at an estimated wage rate
for the NME. This is done for each NME.
Example of Methodology Applied to
Base Year 2003 Data
Following the criteria and
methodology discussed above, and
using the data available to the
Department as of June 15, 2005, the
Department has calculated sample
expected NME wages.
The Dominican Republic, Algeria and
Kenya, three of the 56 countries, have
been excluded from the Department’s
regression analysis because ILO wage
rate data were not available for these
countries in the instant dataset.
As noted in the ILO database, the
wage rates for Turkey and Korea, two of
the 56 countries, are denominated in
units of 1,000 of their respective
national currency, and have been
converted accordingly.
While the ILO database indicates that
wage rate data for Greece and the
Netherlands, two of the 56 countries, are
denominated in euros, the notes to the
ILO database indicate that these wage
rates are denominated in drachmas and
guilders, respectively.5 Because
appropriate exchange rates were not
available in the International Financial
Statistics for Greece and the
Netherlands, the Department relied on
the exchange rate information that it
regularly obtains from Dow Jones B.I.S.
37763
and the Federal Reserve and posts on
the Import Administration web site for
these countries. Thus, the Department
has calculated the annual 2003 average
exchange rates for Greek drachmas and
Dutch guilders, which were 0.00328
U.S. dollars per drachma and 0.51859
U.S. dollars per guilder.
2003 WB GNI data were not available
for Zimbabwe, one of the 56 countries.
Consequently, Zimbabwe has been
excluded from the Department’s
regression analysis.
Following the data compilation and
regression methodology described
above, and using GNI and wage data for
Base Year 2003, the regression results
are: Wagei = 0.410466 + 0.000515 * GNI.
The r–square, which is a measure of the
statistical validity of a regression
analysis,6 is 0.91632 for the
Department’s regression analysis,7
indicating a statistically valid analysis.
Application of these regression results
to 2003 NME GNI data yields the
following sample 2005 schedule of
expected NME wages for antidumping
(‘‘AD’’) purposes:
Country
2003 GNI
Armenia ....................................................................................................................................................
Azerbaijan ................................................................................................................................................
Belarus .....................................................................................................................................................
Estonia† ...................................................................................................................................................
Georgia ....................................................................................................................................................
Kazakhstan† ............................................................................................................................................
Kyrgyz Republic .......................................................................................................................................
Lithuania† ................................................................................................................................................
Moldova ...................................................................................................................................................
China ........................................................................................................................................................
Romania† .................................................................................................................................................
Russian Federation† ................................................................................................................................
Tajikistan ..................................................................................................................................................
Turkmenistan ...........................................................................................................................................
Ukraine .....................................................................................................................................................
Uzbekistan ...............................................................................................................................................
Vietnam‡ ..................................................................................................................................................
Expected NME
Wage
$950
$820
$1,600
$5,380
$770
$1,780
$340
$4,500
$590
$1,100
$2,260
$2,610
$210
$1,120
$970
$420
$480
$0.90
$0.83
$1.23
$3.18
$0.81
$1.33
$0.59
$2.73
$0.71
$0.98
$1.57
$1.75
$0.52
$0.99
$0.91
$0.63
$0.66
†Applicable only to review periods that pre–date the effective date of graduation to market–economy status (Estonia (01/01/03); Lithuania (01/
01/03); Romania (01/01/03); and Russia (04/01/02); Kazakhstan (10/01/01)).
‡On November 8, 2002, the Department determined that Vietnam will be treated as a non–market economy country for purposes of antidumping duty and countervailing proceedings (see Notice of Final Antidumping Duty Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 37116, June 23, 2003).
In order to facilitate a full opportunity
for comment, and because the
underlying data is voluminous, the
results and underlying data for this
sample calculation have been posted on
the Import Administration website
(https://ia.ita.doc.gov), but will not be
used for AD purposes.
Comments
Persons wishing to comment on the
Department’s methodology described
above for the calculation of expected
NME wages should file a signed original
and six copies of each set of comments
by the date specified above. The
Department will consider all comments
received before the close of the
comment period. Comments received
after the end of the comment period will
be considered, if possible, but their
consideration cannot be assured. The
Department will not accept comments
accompanied by a request that a part or
all of the material be treated
confidentially because of its business
proprietary nature or for any other
reason. The Department will return such
comments and materials to the persons
submitting the comments and will not
consider them in development of any
6 Linear,
4 Linear,
ordinary least squares regression.
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5 This
correction has been made in previous
years, and addresses an apparent discrepancy when
using the euro exchange rate.
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7 Linear,
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ordinary least squares regression.
ordinary least squares regression.
30JNN1
37764
Federal Register / Vol. 70, No. 125 / Thursday, June 30, 2005 / Notices
changes to its practice. All comments
responding to this notice will be a
matter of public record and will be
available for public inspection and
copying at Import Administration’s
Central Records Unit, Room B–099,
between the hours of 8:30 a.m. and 5
p.m. on business days. The Department
requires that comments be submitted in
written form. The Department
recommends submission of comments
in electronic form to accompany the
required paper copies. Comments filed
in electronic form should be submitted
either by e–mail to the Webmaster
below, or on CD–ROM, as comments
submitted on diskettes are likely to be
damaged by postal radiation treatment.
Comments received in electronic form
will be made available to the public in
Portable Document Format (PDF) on the
Internet at the Import Administration
website at the following address: http:/
/ia.ita.doc.gov/.
Any questions concerning file
formatting, document conversion,
access on the Internet, or other
electronic filing issues should be
addressed to Andrew Lee Beller, Import
Administration Webmaster, at (202)
482–0866, e–mail address: webmaster–
support@ita.doc.gov.
Dated: June 23, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import
Administration.
[FR Doc. 05–12862 Filed 6–29–05; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
Exemption of Foreign Air Carriers
From Excise Taxes; Review of Finding
of Reciprocity (Bolivia), 26 U.S.C. 4221
International Trade
Administration, U.S. Department of
Commerce.
ACTION: Solicitation of public comments
concerning a review of the existing
exemption for aircraft registered in the
Republic of Bolivia from certain internal
revenue taxes on the purchase of
supplies in the United States for such
aircraft in connection with their
international commercial operations.
AGENCY:
Notice is hereby given that
the Department of Commerce is
conducting a review to determine,
pursuant to Section 4221 of the Internal
Revenue Code, as amended (26 U.S.C.
4221), whether the Government of
Bolivia has discontinued allowing
substantially reciprocal tax exemptions
to aircraft of U.S. registry in connection
SUMMARY:
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16:26 Jun 29, 2005
Jkt 205001
with international commercial
operations similar to those exemptions
currently granted to aircraft of Bolivian
registry by the United States under the
aforementioned statute.
The above-cited statute provides
exemptions for aircraft of foreign
registry from payment of certain internal
revenue taxes on the purchase of
supplies in the United States for such
aircraft in connection with their
international commercial operations.
These exemptions apply upon a finding
by the Secretary of Commerce, or his
designee, and communicated to the
Department of the Treasury, that such
country allows, or will allow,
‘‘substantially reciprocal privileges’’ to
aircraft of U.S. registry with respect to
purchases of such supplies in that
country. If a foreign country
discontinues the allowance of such
substantially reciprocal exemption, the
exemption allowed by the United States
will not apply after the Secretary of the
Treasury is notified by the Secretary of
Commerce, or his designee, of the
discontinuance.
Interested parties are invited to
submit their views, comments and
supporting documentation in writing
concerning this matter to Mr. Douglas B.
Baker, Deputy Assistant Secretary for
Services, Room 1128, U.S. Department
of Commerce, Washington, DC, 20230.
Submissions should be sent
electronically to OSImail@ita.doc.gov.
All submissions should be received no
later than forty-five days from the date
of this notice.
Comments received, with the
exception of information marked
‘‘business confidential,’’ will be
available for public inspection between
Monday-Friday, 8:30 a.m. and 5:30 p.m.
in the Trade Reference and Assistance
Center Help Desk, Suite 800M, USA
Trade Information Center, Ronald
Reagan Building, 1300 Pennsylvania
Avenue, NW., Washington, DC.
Information marked ‘‘business
confidential’’ shall be protected from
disclosure to the full extent permitted
by law.
It is suggested that those desiring
additional information contact Mr.
Eugene Alford, Office of Service
Industries, Room 1124, U.S. Department
of Commerce, Washington, DC 20230, or
telephone 202–482–5071.
Dated: June 27, 2005.
David F. Long,
Acting Deputy Assistant Secretary for
Services.
[FR Doc. E5–3436 Filed 6–29–05; 8:45 am]
BILLING CODE 3510–DR–P
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DEPARTMENT OF COMMERCE
International Trade Administration
Duty Drawback Practice in
Antidumping Proceedings
Import Administration,
International Trade Administration,
Department of Commerce.
ACTION: Request for comments.
AGENCY:
SUMMARY: The Department of Commerce
(the Department) has a long–standing
policy in antidumping proceedings,
based on section 772(c)(1)(B) of the
Tariff Act of 1930, as amended (the Act),
of granting a duty drawback adjustment
to export price where a respondent
party establishes that: (1) the import
duty paid and the rebate payment are
directly linked to, and dependent upon,
one another (or the exemption from
import duties is linked to exportation);
and (2) there were sufficient imports of
the imported raw material to account for
the drawback received upon the exports
of the manufactured product.
In a number of recent proceedings, the
Department has received comments
expressing concerns about its current
duty drawback adjustment policy and
practice. This notice describes various
issues that have been raised concerning
the Department’s practice and provides
the public with an opportunity to
comment on whether any changes to the
Department’s current practice would be
warranted and specifically what such
changes would entail.
DATES: Comments must be submitted by
July 25, 2005.
ADDRESSES: Written comments (original
and six copies) should be sent to the
Assistant Secretary for Import
Administration, U.S. Department of
Commerce, Central Records Unit, Room
1870, Pennsylvania Avenue and 14th
Street NW, Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: John
C. Kalitka, Office of Policy, Import
Administration, U.S. Department of
Commerce, Room 3712, Pennsylvania
Avenue and 14th Street, NW,
Washington, DC 20230, (202) 482–2730.
SUPPLEMENTARY INFORMATION:
Background
With respect to the duty drawback
adjustment, the Department is directed
by section 772(c)(1)(B) of the Act, which
states that ‘‘[t]he price used to establish
export price and constructed export
price shall be -- (1) increased by (B) the
amount of any import duties imposed
by the country of exportation which
have been rebated, or which have not
been collected, by reason of the
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]]>Agencies
[Federal Register Volume 70, Number 125 (Thursday, June 30, 2005)]
[Notices]
[Pages 37761-37764]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-12862]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
Expected Non-Market Economy Wages: Request for Comment on
Calculation Methodology
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Request for comments
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (``Department'') has a long-
standing practice of calculating expected non-market economy (``NME'')
wages for use as surrogate values in antidumping proceedings involving
NME countries. These expected NME wages are calculated annually in
accordance with Sec. 351.408(c)(3) of the Department's regulations.
This notice describes the Department's methodology for the calculation
of expected NME wages and provides the public with an opportunity to
comment on this methodology in response to comments that have been
submitted in several NME proceedings. For purposes of public comment,
the Department has also calculated expected NME wages using currently
available data for 2003 and the methodology described herein. This is a
sample calculation based on 2003 data, and is subject to data updates
and revisions.
DATES: Comments must be submitted no later than thirty days after
publication of this Notice.
ADDRESSES: Written comments (original and six copies) should be sent to
Joseph A. Spetrini, Acting Assistant Secretary for Import
Administration, U.S. Department of Commerce, Central Records Unit, Room
1870, 14th Street and Pennsylvania Avenue N.W., Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: John D. A. LaRose, Assistant to the
Senior Enforcement Coordinator, Office of China/NME Compliance or
Shauna Lee-Alaia, Policy Analyst, Office of Policy, Import
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue N.W., Washington, DC 20230, (202) 482-3794 or (202)
482-2793.
SUPPLEMENTARY INFORMATION:
Background
With regard to its calculation of expected NME wages, the
Department stated in its November 17, 2004, Final Determination in the
investigation of Wooden Bedroom Furniture from the People's Republic of
China, that it would ``invite comments from the general public on this
matter in a proceeding separate from the {Furniture{time}
investigation.'' Final Determination of Sales at Less Than Fair Value:
Wooden Bedroom Furniture From the People's Republic of China, 69 FR
67313 (November 17, 2004) and accompanying Issues and Decisions
Memorandum at 180 (Cmt. 23).
The NME Wage Rate Methodology
The Department's regulations generally describe the methodology by
which the Department calculates expected NME wages:
For labor, the Secretary will use regression-based wage rates
reflective of the observed relationship between wages and national
income in market economy countries. The Secretary will calculate the
wage rate to be applied in nonmarket economy proceedings each year. The
calculation will be based on current
[[Page 37762]]
data, and will be made available to the public.
19 CFR 351.408(c)(3).
In accordance with Sec. 351.408(c)(3), the Department annually
calculates expected NME wages in two steps. First, the Department uses
regression analysis\1\ to estimate a linear relationship between per-
capita gross national income (``GNI'') and hourly wages in market
economy (``ME'') countries. Second, the Department uses the results of
the regression and NME GNI data to estimate hourly wage rates for NME
countries.
---------------------------------------------------------------------------
\1\ Ordinary least squares regression.
---------------------------------------------------------------------------
There is usually a two-year interval between the current year and
the most recent reporting year of the data required for this
methodology due to the practices of the respective data sources. The
Department bases its regression analysis on this most recent reporting
year, which the Department refers to as the ``Base Year.'' For example,
the Department relied upon data from 2001 to calculate expected NME
wages in 2003, i.e., the ``Base Year'' for the 2003 calculation was
2001. In practice, the ``Base Year,'' i.e., the year upon which the
regression data are based, is two years prior to the year in which the
Department conducts its regression analysis.
1. Regression Analysis
The Department's regression analysis, which describes generally the
relationship between wages and GNI, relies upon four separate data
series: (A) country-specific wage data for 56 countries from Chapter 5B
of the International Labour Organization's (``ILO'') Yearbook of Labour
Statistics; (B) country-specific consumer price index (``CPI'') data
from the International Financial Statistics of the International
Monetary Fund (``IMF''); (C) exchange rate data from the IMF's
International Financial Statistics; and (D) country-specific GNI data
from the World Development Indicators of the World Bank (``WB'').
The wage rate data described above are converted to hourly wage
rates and adjusted using CPI data to be representative of the current
Base Year. The data are then converted to U.S. dollars using the
appropriate exchange rate data. These adjusted wage rate data are
ultimately regressed on GNI.
The following sections describe each data series and how it is
used.
(A) Wage Data
For each of 56 countries, the Department chooses a single wage rate
that represents a broad measure of wages for that country that is most
contemporaneous with the Base Year.
To arrive at a single wage rate for each country from among the
many wage rates included in the ILO database for each country, the
Department prioritizes the following ILO data parameters\2\ in the
following order:
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\2\ Each data point in the ILO database is accompanied by values
for each of a number of parameters that describe the characteristics
of the data. These parameters include those enumerated above, and
also include two other parameters: ``Source,'' i.e., the original
survey source of the data and ``Classification,'' i.e., the
industrial classification.
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1. ``Sex,'' i.e., male/female coverage;
2. ``Sub-Classification,'' i.e., coverage of different types of
industry;
3. ``Worker Coverage,'' i.e., coverage of different types of
workers, such as wage earners or salaried employees;
4. ``Type of Data,'' i.e., the unit of time for which the wage is
reported, such as per hour or per month; and,
5. ``Source ID,'' i.e., a code for the source of the data.
First, the Department looks to the parameter for gender. For the
``Sex'' parameter, the Department always chooses data that cover both
men and women.\3\
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\3\ The Department does not consider values of ``Indices, Men
and Women'' for this parameter.
---------------------------------------------------------------------------
Second, for the ``Sub-Classification'' parameter, the Department
chooses in each instance data that cover all reported industries in a
given country (indicated in the database by a value of ``Total'' for
the ``Sub-Classification'' parameter).
When a wage rate that meets these two criteria (for ``Sex'' and
``Sub-Classification'') is not available for the Base Year, the
Department will use the most recently available data within five years
of the Base Year, thereby considering a total of six years of data. For
example, when the Base Year was 2001, the Department used the data
reported for the most recent year between the years of 1996 and 2001.
The Department does not choose wage rate data that do not meet the
requirements for ``Sex'' and ``Sub-Classification'' described above. If
there is more than one record in the ILO database that meets those
requirements, the Department looks to the remaining parameters. Once
the Department's requirements for these two parameters are satisfied,
the Department then prioritizes data that are closest to the Base Year
within the remaining ILO parameters discussed below.
For example, for the third parameter, the Department generally
prioritizes ``wage earners,'' ``employees'' and ``total employment,''
in that order for the parameter ``Worker Coverage.'' However, the
Department would choose more contemporaneous ``employees'' data over
less contemporaneous ``wage earner'' data.
Fourth, when the values for all other parameters are equal, the
Department prioritizes data reported on an hourly basis over that
reported on a monthly or weekly basis for the parameter ``Type of
Data.''
Fifth, if necessary, the Department prioritizes data with a
``Source ID'' value of ``1'' over ``2'' or ``3.''
Finally, it is the Department's normal practice to eliminate
aberrational values (i.e., values that vary in either direction in the
extreme from year to year) from the wage rate dataset.
The ILO data that are not reported on an hourly basis are converted
to an hourly basis based on the premise that there are 44 working hours
per week and 192 working hours per month.
(B) CPI Data
Once hourly figures have been calculated based on the wage rate
data discussed above, the wages are adjusted to the Base Year on the
basis of the Consumer Price Index for each country, as reported by the
IMF's International Financial Statistics. This adjustment is made for
any wage rate data not reported for the Base Year.
(C) Exchange Rate Data
These inflation-adjusted wage data, which are denominated in the
national currency of their country, are then converted to U.S. dollars
using Base Year period-average exchange rates reported by the IMF's
International Financial Statistics.
Thus, using (A) wage data, (B) CPI data and (C) exchange rate data,
discussed above, the Department arrives at hourly wages, denominated in
U.S. dollars and adjusted for inflation for each of the 56 countries
for which all the above data are available.
(D) GNI Data
The Department uses Base Year GNI data for each of the 56 countries
in the Department's analysis, as reported by the WB. GNI data are
denominated in U.S. dollars current for the Base Year. The WB defines
GNI per capita as gross national product (``GNP'') per capita, which is
``the dollar value of a country's final output of goods and services in
a year divided by its population.'' The WB further explains that this
measure ``reflects the average income of a country's citizens.'' See
https://www.worldbank.org/depweb/english/modules/glossary.html.
[[Page 37763]]
The Department conducts its regression analysis\4\ using the Base
Year wages per hour in U.S. dollars discussed above and Base Year GNI
per capita in U.S. dollars to arrive at the following equation:
Wagei = Y-intercept + X-coefficient * GNI. The X-coefficient
describes the slope of the line estimated by the regression analysis,
while the Y-intercept is the point on the Y-axis where the regression
line intercepts the Y-axis. The results of this regression analysis
describe generally the relationship between hourly wages and GNI.
---------------------------------------------------------------------------
\4\ Linear, ordinary least squares regression.
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2. Application of Regression Results to NME GNI Data
The Department applies the NME Base Year GNI to the equation
presented above to arrive at an estimated wage rate for the NME. This
is done for each NME.
Example of Methodology Applied to Base Year 2003 Data
Following the criteria and methodology discussed above, and using
the data available to the Department as of June 15, 2005, the
Department has calculated sample expected NME wages.
The Dominican Republic, Algeria and Kenya, three of the 56
countries, have been excluded from the Department's regression analysis
because ILO wage rate data were not available for these countries in
the instant dataset.
As noted in the ILO database, the wage rates for Turkey and Korea,
two of the 56 countries, are denominated in units of 1,000 of their
respective national currency, and have been converted accordingly.
While the ILO database indicates that wage rate data for Greece and
the Netherlands, two of the 56 countries, are denominated in euros, the
notes to the ILO database indicate that these wage rates are
denominated in drachmas and guilders, respectively.\5\ Because
appropriate exchange rates were not available in the International
Financial Statistics for Greece and the Netherlands, the Department
relied on the exchange rate information that it regularly obtains from
Dow Jones B.I.S. and the Federal Reserve and posts on the Import
Administration web site for these countries. Thus, the Department has
calculated the annual 2003 average exchange rates for Greek drachmas
and Dutch guilders, which were 0.00328 U.S. dollars per drachma and
0.51859 U.S. dollars per guilder.
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\5\ This correction has been made in previous years, and
addresses an apparent discrepancy when using the euro exchange rate.
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2003 WB GNI data were not available for Zimbabwe, one of the 56
countries. Consequently, Zimbabwe has been excluded from the
Department's regression analysis.
Following the data compilation and regression methodology described
above, and using GNI and wage data for Base Year 2003, the regression
results are: Wagei = 0.410466 + 0.000515 * GNI. The r-
square, which is a measure of the statistical validity of a regression
analysis,\6\ is 0.91632 for the Department's regression analysis,\7\
indicating a statistically valid analysis.
---------------------------------------------------------------------------
\6\ Linear, ordinary least squares regression.
\7\ Linear, ordinary least squares regression.
---------------------------------------------------------------------------
Application of these regression results to 2003 NME GNI data yields
the following sample 2005 schedule of expected NME wages for
antidumping (``AD'') purposes:
------------------------------------------------------------------------
Country 2003 GNI Expected NME Wage
------------------------------------------------------------------------
Armenia......................... $950 $0.90
Azerbaijan...................... $820 $0.83
Belarus......................... $1,600 $1.23
Estonia[dagger]................. $5,380 $3.18
Georgia......................... $770 $0.81
Kazakhstan[dagger].............. $1,780 $1.33
Kyrgyz Republic................. $340 $0.59
Lithuania[dagger]............... $4,500 $2.73
Moldova......................... $590 $0.71
China........................... $1,100 $0.98
Romania[dagger]................. $2,260 $1.57
Russian Federation[dagger]...... $2,610 $1.75
Tajikistan...................... $210 $0.52
Turkmenistan.................... $1,120 $0.99
Ukraine......................... $970 $0.91
Uzbekistan...................... $420 $0.63
Vietnam[Dagger]................. $480 $0.66
------------------------------------------------------------------------
[dagger]Applicable only to review periods that pre-date the effective
date of graduation to market-economy status (Estonia (01/01/03);
Lithuania (01/01/03); Romania (01/01/03); and Russia (04/01/02);
Kazakhstan (10/01/01)).
[Dagger]On November 8, 2002, the Department determined that Vietnam will
be treated as a non-market economy country for purposes of antidumping
duty and countervailing proceedings (see Notice of Final Antidumping
Duty Determination of Sales at Less Than Fair Value and Affirmative
Critical Circumstances: Certain Frozen Fish Fillets from the Socialist
Republic of Vietnam, 68 FR 37116, June 23, 2003).
In order to facilitate a full opportunity for comment, and because
the underlying data is voluminous, the results and underlying data for
this sample calculation have been posted on the Import Administration
website (https://ia.ita.doc.gov), but will not be used for AD purposes.
Comments
Persons wishing to comment on the Department's methodology
described above for the calculation of expected NME wages should file a
signed original and six copies of each set of comments by the date
specified above. The Department will consider all comments received
before the close of the comment period. Comments received after the end
of the comment period will be considered, if possible, but their
consideration cannot be assured. The Department will not accept
comments accompanied by a request that a part or all of the material be
treated confidentially because of its business proprietary nature or
for any other reason. The Department will return such comments and
materials to the persons submitting the comments and will not consider
them in development of any
[[Page 37764]]
changes to its practice. All comments responding to this notice will be
a matter of public record and will be available for public inspection
and copying at Import Administration's Central Records Unit, Room B-
099, between the hours of 8:30 a.m. and 5 p.m. on business days. The
Department requires that comments be submitted in written form. The
Department recommends submission of comments in electronic form to
accompany the required paper copies. Comments filed in electronic form
should be submitted either by e-mail to the Webmaster below, or on CD-
ROM, as comments submitted on diskettes are likely to be damaged by
postal radiation treatment.
Comments received in electronic form will be made available to the
public in Portable Document Format (PDF) on the Internet at the Import
Administration website at the following address: https://ia.ita.doc.gov/
.
Any questions concerning file formatting, document conversion,
access on the Internet, or other electronic filing issues should be
addressed to Andrew Lee Beller, Import Administration Webmaster, at
(202) 482-0866, e-mail address: webmaster-support@ita.doc.gov.
Dated: June 23, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-12862 Filed 6-29-05; 8:45 am]
BILLING CODE 3510-DS-S
