Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) from Brazil, the People's Republic of China, Thailand, and the United Arab Emirates: Initiation of Antidumping Duty Investigations, 60801-60807 [E7-21120]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 207 (Friday, October 26, 2007)]
[Notices]
[Pages 60801-60807]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21120]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-841/Brazil]
[A-570-924/People's Republic of China]
[A-549-825/Thailand]
[A-520-803/The United Arab Emirates]


Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) from 
Brazil, the People's Republic of China, Thailand, and the United Arab 
Emirates: Initiation of Antidumping Duty Investigations

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

EFFECTIVE DATE: October 26, 2007.

FOR FURTHER INFORMATION CONTACT: Mike Heaney (Brazil), AD/CVD 
Operations, Office 7, Erin Begnal (the People's Republic of China) AD/
CVD Operations, Office 9, Stephen Bailey (Thailand), AD/CVD Operations, 
Office 7, Douglas Kirby (the United Arab Emirates), AD/CVD Operations, 
Office 6, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-4475, (202) 482-1442, (202) 
482-0193, and (202) 482-3782, respectively.

SUPPLEMENTARY INFORMATION:

The Petitions

    On September 28, 2007, the Department of Commerce (the Department) 
received petitions on imports of PET Film from Brazil, the People's 
Republic of China (PRC), Thailand, and the United Arab Emirates (UAE) 
(petitions) filed in proper form by Dupont Teijin Films, Mitsubishi 
Polyester Film Inc., SKC Inc., and Toray Plastics (America) Inc., 
(collectively, petitioners). See Antidumping Duty Petition: 
Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) from 
Brazil, Republic of China, Thailand, and the United Arab Emirates 
(September 28, 2007). On October 3, 2007, the Department issued a 
request for additional information and clarification of certain areas 
of the petitions. Based on the Department's request, petitioners filed 
supplements to the petitions for all countries on October 9, 2007, and 
October 10, 2007. See Supplemental Questionnaire Response: Petition for 
the Imposition of Antidumping Duties: Polyethylene Terephthalate Film, 
Sheet, and Strip from the United Arab Emirates. On October 12, 2007, 
and October 15, 2007, the Department requested further clarifications 
from petitioners by phone. See Memorandum to the File: Telephone Call 
to Petitioners Regarding the Antidumping Petition on Polyethylene 
Terephthalate Film, Sheet, and Strip from Brazil, the People's Republic 
of China, Thailand, and the United Arab Emirates, dated October 12, 
2007; see also Memorandum to the File: Telephone conversation with 
Petitioners' counsel in connection with the Petitions on Polyethylene 
Terephthalate Film, Sheet, and Strip from Brazil, the People's Republic 
of China (the PRC), Thailand, and the United Arab Emirates (the UAE), 
dated October 15, 2007. On October 15, 2007, petitioners submitted 
additional supplements to the Petitions. See Second Supplemental 
Questionnaire Response: Polyethylene Terephthalate Film, Sheet, and 
Strip (PET Film) from Brazil, the People's Republic of China, Thailand, 
and the United Arab Emirates, dated October 15, 2007. On October 15, 
2007, Ms. Meredith Rutherford of the Department's Office of Policy, 
telephoned petitioners to request that they submit relevant pages from 
the International Trade Commission publication concerning the domestic 
like product. See Memorandum to the File: Telephone conversation with 
Petitioners' counsel in connection with the Petitioners on Polyethylene 
Terephthalate Film, Sheet, and Strip from Brazil, the People's Republic 
of China (the PRC), Thailand, and the United Arab Emirates (the UAE), 
dated October 15, 2007. On October 16, 2007, petitioners submitted 
addendums to their October 15, 2007 supplements. See Additional 
Exhibits to the Second Supplemental Questionnaire Response: 
Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) from 
Thailand, and the United Arab Emirates, dated October 16, 2007; see 
also Supplement to the Petition Regarding Domestic-Like Product, dated 
October 16, 2007. On October 16, 2007, the Department telephoned 
petitioners requesting further information for Brazil, Thailand, and 
the UAE to which petitioners submitted responses on October 17, 2007, 
and October 18, 2007. See Memorandum to the File: Telephone Call to 
Petitioners Regarding the Antidumping Petition and October 16, 2007, 
Supplement to the Petition on Polyethylene Terephthalate Film, Sheet, 
and Strip from Thailand and the United Arab Emirates, dated October 17, 
2007; see also Memorandum to the File: Polyethylene Terephthalate Film, 
Sheet and Strip from Brazil; Telecon with Counsel for Petitioners; Date 
of Home Market Prices, dated October 16, 2007; Supplement to the 
Petition, dated October 17, 2007, at Exhibit 1; and Supplement to the 
Petition, dated October 18, 2007, at Exhibit 1. On October 17, 2007, 
the Department telephoned petitioners regarding their responses to our 
October 16, 2007, inquires for Brazil, Thailand, and the UAE. See 
Memorandum to the File: Telephone Call to Petitioners Regarding 
Submission of Information in the Antidumping Petition on Polyethylene 
Terephthalate Film, Sheet, and Strip from Thailand, Brazil, and the 
United Arab Emirates, dated October 17, 2007. On October 18, 2007, the 
Department telephoned petitioners requesting additional clarification 
of its October, 17, 2007, filings for Thailand and the UAE. See 
Memorandum to the File: Telephone Call to Petitioners Regarding the 
Antidumping Petition on Polyethylene Terephthalate Film, Sheet, and 
Strip from Thailand and the United Arab Emirates, dated October 18, 
2007.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), petitioners allege that imports of PET Film from 
Brazil, the PRC, Thailand, and the UAE are being, or are likely to be, 
sold in the United States at less than fair value, within the meaning 
of section 731 of the Act, and that such imports materially injure, or 
threaten material injury to, an industry in the United States.
    The Department finds that petitioners filed these petitions on 
behalf of the domestic industry because petitioners are an interested 
party as defined in section 771(9)(C) of the Act, and petitioners have 
demonstrated sufficient industry support with respect to the

[[Page 60802]]

investigations that petitioners are requesting the Department to 
initiate (see ``Determination of Industry Support for the Petitions'' 
below).

Scope of Investigations

    The products covered by these investigations are all gauges of raw, 
pre-treated, or primed PET Film, whether extruded or co-extruded. 
Excluded are metallized films and other finished films that have had at 
least one of their surfaces modified by the application of a 
performance-enhancing resinous or inorganic layer more than 0.00001 
inches thick. Also excluded is Roller transport cleaning film which has 
at least one of its surfaces modified by application of 0.5 micrometers 
of SBR latex. Tracing and drafting film is also excluded. PET Film is 
classifiable under subheading 3920.62.00.90 of the Harmonized Tariff 
Schedule of the United States (HTSUS). While HTSUS subheadings are 
provided for convenience and Customs purposes, our written description 
of the scope of these investigations is dispositive.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers who support the petition account for (i) at least 25 percent 
of the total production of the domestic like product and (ii) 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. Moreover, section 732(c)(4)(D) of the Act provides that, 
if the petition does not establish support of domestic producers 
accounting for more than 50 percent of the total production of the 
domestic like product, the Department shall (i) poll the industry or 
rely on other information in order to determine if there is support for 
the petition, as required by subparagraph (A) or (ii) determine 
industry support using a statistically valid sampling method if there 
is a large number of producers in the industry.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers 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 a separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information because the Department determines industry support at the 
time of initiation. Although this may result in different definitions 
of the domestic like product, such differences do not render the 
decision of either agency contrary to law. See USEC, Inc. v. United 
States, 132 F. Supp. 2d 1, 8 (CIT 2001); see also Algoma Steel Corp. 
Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 
240 (Fed. Cir. 1989), cert. denied 492 U.S. 919 (1989).
    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 the scope as defined in the 
petition.
    With regard to the domestic like product, petitioners do not offer 
a definition of domestic like product distinct from the scope of the 
investigations. Based on our analysis of the information submitted on 
the record, we have determined that PET Film constitutes a single 
domestic like product and we have analyzed industry support in terms of 
that domestic like product. For a discussion of the domestic like-
product analysis in these cases, see the Antidumping Duty Investigation 
Initiation Checklist: Polyethylene Terephthalate Film, Sheet, and Strip 
from Brazil (Brazil Initiation Checklist) at Attachment II (Analysis of 
Industry Support), Antidumping Duty Investigation Initiation Checklist: 
Polyethylene Terephthalate Film, Sheet, and Strip from the People's 
Republic of China (PRC) (PRC Initiation Checklist) at Attachment II 
(Analysis of Industry Support), Antidumping Duty Investigation 
Initiation Checklist: Polyethylene Terephthalate Film, Sheet, and Strip 
from Thailand (Thailand Initiation Checklist) at Attachment II 
(Analysis of Industry Support), and the Antidumping Duty Investigation 
Initiation Checklist: Polyethylene Terephthalate Film, Sheet, and Strip 
from the United Arab Emirates (UAE) (UAE Initiation Checklist) at 
Attachment II (Analysis of Industry Support), on file in the Central 
Records Unit, Room B-099 of the main Department of Commerce building.
    In determining whether petitioners have standing (i.e., those 
domestic workers and producers supporting the petition account for (i) 
at least 25 percent of the total production of the domestic like 
product and (ii) 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), we considered the 
industry support data contained in the petition with reference to the 
domestic like product as defined in Attachment I, (Scope of these 
petitions), to the Brazil Initiation Checklist, PRC Initiation 
Checklist, Thailand Initiation Checklist, and UAE Initiation Checklist. 
To establish industry support, petitioners provided their production of 
the domestic like product for the year 2006, and compared that to 
production of the domestic like product for the industry. For further 
discussion, see the Brazil Initiation Checklist, PRC Initiation 
Checklist, Thailand Initiation Checklist, and UAE Initiation Checklist 
at Attachment II.
    Our review of the data provided in these petitions, supplemental 
submissions, and other information readily available to the Department 
indicates that petitioners have established industry support. First, 
these petitions established support from domestic producers accounting 
for more than 50 percent of the total production of the domestic like 
product and, as such, the Department is not required to take further 
action in order to evaluate industry support (e.g., polling). See 
section 732(c)(4)(D) of the Act. Second, the domestic producers have 
met the statutory criteria for industry support under section 
732(c)(4)(A)(i) because the domestic producers who support these 
petitions account for at least 25 percent of the total production of 
the domestic like product. Finally, the domestic producers have met the 
statutory criteria for industry support under 732(c)(4)(A)(ii) because 
the domestic producers who support these petitions account for 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, these petitions. Accordingly, the Department determines that these 
petitions were filed on behalf of the domestic industry within the 
meaning of section 732(b)(1) of the Act. See the Brazil Initiation 
Checklist, PRC Initiation Checklist, Thailand Initiation

[[Page 60803]]

Checklist, and UAE Initiation Checklist at Attachment II.
    The Department finds that petitioners filed these petitions on 
behalf of the domestic industry in accordance with section 732(c)(4)(A) 
of the Act. Petitioners are an interested party as defined in section 
771(9)(C) of the Act and have demonstrated sufficient industry support 
in favor of the initiation of the antidumping duty investigations. See 
Brazil Initiation Checklist, PRC Initiation Checklist, Thailand 
Initiation Checklist, and UAE Initiation Checklist at Attachment II.

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that the U.S. industry producing the domestic 
like product is being materially injured by reason of the imports of 
the subject merchandise sold at less than normal value. While the 
imports from the UAE do not meet the statutory requirement for 
cumulation on a volume basis, in its analysis for threat, petitioners 
allege that imports from the UAE will imminently account for more than 
three percent of all imports of the subject merchandise by volume and, 
therefore, they are not negligible. In addition, petitioners have 
demonstrated that imports from the UAE for the first half of 2007 do 
meet the statutory requirement for cumulation on a volume basis. See 
section 771(24)(A)(iv) of the Act; see also Brazil Initiation 
Checklist, PRC Initiation Checklist, Thailand Initiation Checklist, and 
UAE Initiation Checklist at Attachment III. Petitioners contend that 
the industry's injured condition is illustrated by reduced market 
share, lost revenue and sales, reduced production and capacity 
utilization, reduced shipments, underselling and price depressing and 
suppressing effects, reduced employment, and decline in financial 
performance. We have assessed the allegations and supporting evidence 
regarding material injury and causation, and we have determined that 
these allegations are properly supported by adequate evidence and meet 
the statutory requirements for initiation. See Brazil Initiation 
Checklist, PRC Initiation Checklist, Thailand Initiation Checklist, and 
UAE Initiation Checklist at Attachment III.

Periods of Investigation

    For Brazil, Thailand, and the UAE, in accordance with section 
351.204(b) of the Department's regulations, because these petitions 
were filed on September 28, 2007, the anticipated period of 
investigation (POI) is July 1, 2006 through June 30, 2007. For the PRC, 
the anticipated POI is January 1, 2007, through June 30, 2007.

Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value upon which the Department has based its decision to 
initiate investigations with respect to Brazil, the PRC, Thailand, and 
the UAE. The sources of data for the deductions and adjustments 
relating to U.S. price and normal value are discussed in greater detail 
in the Brazil Initiation Checklist, PRC Initiation Checklist, Thailand 
Initiation Checklist, and UAE Initiation Checklist. Should the need 
arise to use any of this information as facts available under section 
776 of the Act, we may reexamine the information and revise the margin 
calculation, if appropriate.

Alleged U.S. Price and Normal Value: Brazil

    Petitioners state that Brazilian producer Terphane Ltda.'s U.S. 
affiliate, Terphane Inc., was the importer of record for PET Film 
imports from Brazil during the POI. Petitioners calculated constructed 
export price (CEP) using information regarding a representative sale of 
48-gauge packaging film made through Terphane Inc. to an unaffiliated 
customer in the United States. Petitioners deducted from U.S. price a 
mark-up based on the expenses and profit rate of a U.S. importer of PET 
Film. We adjusted petitioners' mark-up value to exclude certain 
expenses covered in separate deductions (i.e., inland freight from the 
U.S. port to the distribution warehouse and brokerage charges). 
Petitioners also deducted from U.S. price an amount for international 
freight and insurance, U.S. customs duties, inland freight from the 
U.S. warehouse to the customer and credit expense. See Brazil 
Initiation Checklist. International freight and insurance were 
calculated as the difference between the value of PET Film imports from 
Brazil on a CIF basis, and the value of PET Film imports from Brazil on 
a custom's value basis as reported on the ITC's ``DataWeb'' https://
usitc.gov/tata/hts/other/dataweb. In calculating U.S. customs duties, 
petitioners applied U.S. duty rates to the customs value AUV for import 
data for the POI. U.S. inland freight was based on the freight expenses 
of a U.S. producer to the same customer. Petitioners calculated credit 
using the average U.S. prime rates available for the POI, and used what 
petitioners describe as the standard thirty-day credit period between 
shipment and payment for PET Film sales.
    Petitioners based normal value on a sale of 48-gauge packaging film 
by Terphane Ltda. to one of its home market customers in Brazil during 
the POI. Petitioners deducted credit and packing expenses. Petitioners 
calculated credit using the standard thirty-day period between shipment 
and payment dates for PET Film sales consistent with other countries 
subject to these petitions, and used average prime rates available for 
Brazil for the POI. Petitioners maintain packing costs in Brazil and 
the United States are equivalent and therefore based packing expenses 
on those of one petitioning firm. See Brazil Initiation Checklist. 
Petitioners made no deduction for inland freight in calculating NV, 
claiming the terms of sale were essentially ex-factory. See Supplement 
to the Brazil Petition, dated October 16, 2007, at Exhibit 4.
    Petitioners also allege Terphane Ltda.'s home market sale is below 
its cost of production. Petitioners therefore calculated constructed 
value for 48-gauge packaging film, basing Terphane Ltda.'s cost of 
production on that of a U.S. producer's experience during the POI, 
adjusted for known differences between the United States and Brazil. 
See ``Cost of Production and Constructed Value'' section, infra.

Alleged U.S. Price and Normal Value: The People's Republic of China

    For U.S. price, petitioners relied on price information of a 
representative sale of Chinese PET Film sold by a U.S. distributor to a 
U.S. customer in early 2007, based on the experience of a salesperson 
at one of the petitioning firms. See PRC Petition at Exhibit 12; 
Supplemental Response, dated October 10, 2007, at Exhibit 1 (``October 
10, 2007 Supplemental Response''); and Supplemental Response, dated 
October 15, 2007, at Exhibit 2 (``October 15, 2007 Supplemental 
Response''). The price information supplied by petitioners was for 48 
gauge packaging film, which falls within the scope of these petitions. 
Petitioners deducted from the price the costs associated with exporting 
and delivering the product, including a distributor mark-up fee, ocean 
freight and insurance charges, U.S. duty, port and wharfage fees, and 
U.S. inland freight. We adjusted petitioners' mark-up value to exclude 
certain expenses covered in separate deductions (i.e., inland freight 
and brokerage charges). See PRC Initiation Checklist at Attachment V.
    Because the Department considers the PRC to be a non-market-economy 
country (NME), petitioners constructed normal value based on the 
factors-of-

[[Page 60804]]

production methodology pursuant to section 773(c) of the Act. Recently, 
the Department examined the PRC's market status and determined that NME 
status should continue for the PRC. See Memorandum from the Office of 
Policy to David M. Spooner, Assistant Secretary for Import 
Administration, Regarding the People's Republic of China Status as a 
Non-Market Economy, dated August 30, 2006. (This document is available 
online at https://ia.ita.doc.gov/download/prc-nme-status/prc-lined-
paper-memo-08302006.pdf.). In addition, in two recent investigations, 
the Department also determined that the PRC is an NME country. See 
Final Determination of Sales at Less Than Fair Value: Certain Activated 
Carbon from the People's Republic of China, 72 FR 9508 (March 2, 2007), 
and Final Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances: Certain Polyester 
Staple Fiber from the People's Republic of China, 72 FR 19690 (April 
19, 2007). In accordance with section 771(18)(C)(i) of the Act, the NME 
status remains in effect until revoked by the Department. The 
presumption of the NME status of the PRC has not been revoked by the 
Department and, therefore, remains in effect for purposes of the 
initiation of this investigation. Accordingly, the normal value of the 
product is based appropriately on factors of production valued in a 
surrogate market-economy country in accordance with section 773(c) of 
the Act. During the course of this investigation, all parties will have 
the opportunity to provide relevant information related to the issues 
of the PRC's NME status and the granting of separate rates to 
individual exporters.
    Petitioners assert that India is the appropriate surrogate country 
for valuing the factors of production for the PRC because India is: (1) 
a significant producer of identical merchandise; and (2) at a level of 
economic development comparable to that of the PRC. See PRC Petition at 
41. Based on the information provided by petitioners, we believe that 
petitioners' use of India as a surrogate country is appropriate for 
purposes of initiating this investigation. After the initiation of the 
investigation, we will solicit comments regarding surrogate country 
selection. Also, pursuant to 19 CFR 351.301(c)(3)(i), interested 
parties will be provided an opportunity to submit publicly available 
information to value factors of production within 40 days of the date 
of publication of the preliminary determination.
    Petitioners provided dumping-margin calculations using the 
Department's NME methodology as required by 19 CFR 351.202(b)(7)(i)(C) 
and 19 CFR 351.408. Petitioners calculated normal value for the U.S. 
price discussed above based on U.S. industry experience for producing 
PET Film, which they state is consistent with standard PET Film 
production methodology. Petitioners also state that Chinese producers 
use substantially the same material inputs and production processes as 
U.S. producers. See PRC Petition at 41-42 and Exhibit 15. Petitioners 
state that the primary materials used to produce PET Film are 
monoethylene glycol (``MEG''), terephthalic acid (``PTA''), and/or 
dimethyl terephthalate (``DMT''), although they believe that PRC 
producers utilize PTA rather than DMT. See PRC Petition at 42 and 
October 10, 2007 Supplemental Response at 7.
    For the normal-value calculations, pursuant to section 773(c)(4) of 
the Act, petitioners used surrogate values from a variety of sources, 
including the ASFI Monthly Bulletin, published by the Association of 
Synthetic Fibre Industry of India, Indian import statistics from the 
World Trade Atlas, the International Energy Agency's (``IEA'') Energy 
Prices & Taxes 2007 (First Quarter) edition, the Department's NME Wage 
Rate for the PRC, and publicly available financial statements, to value 
the factors of production (FOP). See PRC Petition at 42-43 and Exhibits 
16-20; October 10, 2007 Supplemental Response at Exhibits 5, 6, 7 and 
9; and October 15, 2007 Supplemental Response at Exhibit 4. Petitioners 
converted the inputs valued in Indian rupees to U.S. dollars based on 
the average rupee/U.S. dollar exchange rate for the POI, as reported on 
the Department's website at https://ia.ita.doc.gov/exchange/.
    For PTA and MEG, the main raw materials in the production of PET 
Film, petitioners provided surrogate values based on the ASFI Monthly 
Bulletin from 2006, inflated to the POI using a Wholesale Price Index 
(``WPI'') inflator. See PRC Petition at 42 and Exhibit 16 and October 
15, 2007 Supplemental Response at Exhibit 4. In addition, petitioners 
state that the production of PET Film utilizes very small amounts of 
fillers, which petitioners did not include in the normal value 
calculation. Petitioners state that they were unable to determine the 
correct tariff numbers in order to value these inputs, and not 
including them in the normal value calculation is a conservative 
approach. See PRC Petition at 42 and October 10, 2007 Supplemental 
Response at 8. With regard to energy (electricity), petitioners 
provided a surrogate value using the IEA's Energy Prices & Taxes 2007 
(First Quarter) edition, which petitioners inflated to the POI, as the 
electricity value is based on the price paid by industrial users in 
India in 2000. See PRC Petition at 42 and Exhibits 17-18 and October 
10, 2007 Supplemental Response at 8-9 and Exhibit 6. For labor, 
petitioners submitted a labor usage rate which was valued using the 
Department's NME Wage Rate for the PRC. For packing inputs, petitioners 
valued flanges, two-by-fours, and cores using Indian import statistics 
obtained through the World Trade Atlas from which they excluded data 
pertaining to NME and subsidy countries. See October 10, 2007 
Supplemental Response at 10 and Exhibits 8 and 9; and October 15, 2007 
Supplemental Response at 3. Petitioners asserted that pallets were 
utilized as a packing factor of production, but stated in their October 
15, 2007 Supplemental Response that since they did not know the average 
weight of the pallets that form the basis of this HTS number in the 
Indian import statistics (as the surrogate value from the World Trade 
Atlas is based on rupees per piece), they removed the pallet expense. 
However, in their October 10, 2007 Supplemental Response at Exhibit 8, 
petitioners listed the weight of a typical pallet used to pack PET 
Film. We have applied this weight to the pallet surrogate value to 
derive a rupees per kilogram value and added this expense to normal 
value. See PRC Initiation Checklist at Attachment V for a revised 
pallet surrogate value.
    For the normal-value calculations, petitioners derived the figures 
for factory overhead, selling, general, and administrative expenses, 
and profit from the financial ratios of three large Indian producers of 
PET Film: Flex Industries, Garware Polyester Limited, and Polyplex 
Corporation. The financial statements that petitioners provided covered 
the period of April 2005 to March 2006. Additionally, petitioners 
calculated a simple average of the three companies' financial ratios 
for purposes of the petition. See PRC Petition at 43 and Exhibit 20 and 
October 10, 2007 Supplemental Response at Exhibit 7. We did not make 
any other adjustments to the NV as calculated by the petitioners, other 
than the inclusion of pallets as a packing input. See Attachment V for 
the revised NV calculation.

Separate Rates for the Antidumping Investigation of Imports of PET Film 
from the PRC

    In 2005, the Department modified the process by which exporters and 
producers may obtain separate-rate status in NME investigations. The 
Department's practice is discussed further in Policy Bulletin 05.1:

[[Page 60805]]

Separate-Rates Practice and Application of Combination Rates in 
Antidumping Investigations involving Non-Market Economy Countries 
(April 5, 2005) (``Separate Rates and Combination Rates Bulletin''), 
available on the Department's website at https://ia.ita.doc.gov/policy/
bull05-1.pdf. The process now requires the submission of a separate-
rate status application. Based on our experience in processing the 
separate-rate applications in antidumping duty investigations, we have 
modified the application for this investigation to make it more 
administrable and easier for applicants to complete. See, e.g., 
Initiation of Antidumping Duty Investigation: Certain New Pneumatic 
Off-the-Road Tires from the People's Republic of China, 72 FR 43591, 
43594-95 (August 6, 2007) (``Tires from the PRC''). The specific 
requirements for submitting the separate-rate application in this 
investigation are outlined in detail in the application itself, which 
will be available on the Department's website at https://ia.ita.doc.gov/
ia-highlights-and-news.html on the date of publication of this 
initiation notice in the Federal Register. The separate-rate 
application is due no later than December 17, 2007.

Alleged U.S. Price and Normal Value: Thailand

    For U.S. price, petitioners relied on a representative sale of Thai 
PET Film sold to a U.S. customer during the proposed POI. See Thailand 
Petition at Exhibit 22; Supplemental Response, dated October 9, 2007, 
at Exhibit 3. The price information supplied by petitioners was for 48 
gauge packaging film, which falls within the scope of the petitions. 
Petitioners deducted from the price the costs associated with exporting 
and delivering the product, including a distributor mark-up (based on 
Flex America's financial statements), ocean freight and insurance 
charges, U.S. duty, port and wharfage fees, and U.S. inland freight. 
Additionally, petitioners deducted imputed credit expenses. We have 
adjusted the CEP price by recalculating the claimed distributor mark-up 
submitted by petitioners to eliminate line items which are being 
deducted separately from U.S. price. See Thailand Initiation Checklist.
    For normal value, petitioners submitted price information for a 
home market sale obtained by an employee of a Thai PET Film reseller. 
See Thailand Petition at Exhibit 23; Supplemental Response, dated 
October 16, 2007, at Exhibit 4; and Supplemental Response, dated 
October 17, 2007, at Exhibit 1. However, complete information with 
respect to certain home market expense(s) were not reasonably available 
to the petitioners. As such, adequate home market prices were not 
reasonably available to petitioners; therefore, we have relied on 
petitioners' information for constructed value to calculate normal 
value. We are not initiating a sales below cost investigation because 
there are no home/comparison market sales. According to 19 CFR 
351.301(d)(2)(i)(A), this will not preclude petitioners from filing a 
cost allegation once information becomes available.
    Petitioners calculated constructed value for 48-gauge packaging 
film. With exception of FOH, SG&A expense, interest expense and profit 
rates, which were based on PTL's experience, petitioners calculated 
constructed value using PTL's cost of production using the experience 
of a U.S. producer of PET Film, adjusted for known differences between 
costs in Thailand and the United States. We recalculated petitioners' 
price-to-CV margin calculation to include an amount for packing. See 
Thailand Initiation Checklist for a detailed discussion on petitioners' 
calculation of CV.

Alleged U.S. Price and Normal Value: UAE

    Petitioners calculated both a CEP and an export price (EP). 
Petitioners based CEP on a sale made by Flex UAE's U.S. affiliate, Flex 
America, to an unaffiliated customer during the proposed POI. The PET 
Film at issue is 92-gauge packaging film which, Petitioners explain, is 
a common and representative type of PET Film sold in the U.S. market 
and was sold on a ``Delivered, Duty Paid'' basis with 30 day payment 
terms. Petitioners deducted a distributor mark-up (based on Flex 
America's financial statements), international freight, U.S. Duty, U.S. 
inland freight, and U.S. credit. We have adjusted the CEP price by 
recalculating the claimed distributor mark-up submitted by petitioners 
to eliminate line items which are being deducted separately from U.S. 
price (i.e., inland freight from the U.S. port to the distribution 
warehouse and brokerage charges).
    Petitioners calculated EP on the POI weighted-average AUV customs 
value for PET Film imports from the UAE into the U.S. for subheading 
number 3920.62.00.90 of the Harmonized Tariff Schedule of the United 
States (HTS) based on Customs Value data collected from the USITC. See 
UAE Initiation Checklist.
    For normal value, petitioners submitted price information for a 
home market sale which took place during the POI. However, complete 
information with respect to certain home market expense(s) were not 
reasonably available to the petitioners. As such, adequate home market 
prices were not reasonably available to petitioners; therefore, we have 
relied on petitioners' information for constructed value to calculate 
normal value. See UAE Initiation Checklist for a detailed discussion on 
petitioners' calculation of CV. We are not initiating a sales below 
cost investigation because there are no home/comparison market sales. 
According to 19 CFR 351.301(d)(2)(i)(A), this will not preclude 
petitioners from filing a cost allegation once information becomes 
available.
    Petitioners calculated COM (except direct materials and fixed 
overhead) and packing expenses based on a U.S. producer's cost 
experience adjusted for known differences to manufacture PET Film in 
the UAE, using publicly-available data. See IEA publication, Energy 
Prices and Taxes for 2007: UAE's Regulation and Supervision Bureau 
publication of UAE energy costs from Industrial/Commercial rates for 
2004. To calculate direct material, fixed overhead, SG&A and financial 
expense rates, petitioners relied on the most contemporaneous financial 
statements to the POI for a PET Film producer in the UAE. See UAE 
Initiation Checklist.
    Petitioners valued raw materials using the per pound value of 
purchased polyester chips divided by the production quantity reported 
in FY 2006 financial statements of Flex UAE, a PET Film producer in the 
UAE. These were the most recent statement available. See, e.g., the 
Supplement to the Petition, October 10, 2007, at page 8 and Exhibit 7.
    Petitioners determined energy costs using the cost experience of a 
U.S. PET Film producer to manufacture one pound of PET Film, adjusted 
by the ratio of energy costs in UAE to that in the United States. 
Petitioners obtained the annual UAE energy costs for 2004 from the 
Industrial/Commercial rate published by the UAE's Regulation and 
Supervision Bureau and the annual U.S. energy costs for 2004 from the 
International Energy Agency publication, Energy Prices and Taxes for 
2006. See, e.g., the UAE Petition at page 65 and 66, and Exhibits 33 
and 34.
    To calculate labor, fixed overhead, SG&A expense, interest expense 
and profit, petitioners relied on the financial statements of Flex UAE 
for the fiscal year end December 31, 2006. We recalculated petitioners' 
price-to-CV margin calculation to include an amount for packing. See, 
e.g., the UAE Petition at Exhibit 35, the supplement to the Petition, 
dated October 10, 2007, at

[[Page 60806]]

pages 10 and 11, and Exhibit 7 and Supplement to the Petition, dated 
October 15, 2007, at page 3 and Exhibit 5.

Respondent Selection and Quantity and Value Questionnaire for the PRC

    In prior NME investigations, it has been the Department's practice 
to request quantity and value information from all known exporters 
identified in the PRC Petition. See, e.g., Initiation of Antidumping 
Duty Investigation: Certain New Pneumatic Off-the-Road Tires From the 
People's Republic of China, 72 FR 43591 (August 6, 2007). For this 
investigation, because the HTSUS number 3920.62.00.90, as discussed 
above in the ``Scope of the Investigation,'' provides comprehensive 
coverage of imports of PET Film, the Department expects to select 
respondents in this investigation based on U.S. Customs and Border 
Protection (CBP) data of U.S. imports under HTSUS number 3920.62.00.90 
during the POI.

Use of Combination Rates in an NME Investigation

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in this 
investigation, pursuant to 19 CFR 351.107(b)(1). The Separate Rates and 
Combination Rates Bulletin, at 6, describes that, while continuing the 
practice of assigning separate rates only to exporters, all separate 
rates that the Department will now assign in its NME investigations 
will be specific to those producers that supplied the exporter during 
the POI. Note, however, that one rate is calculated for the exporter 
and all of the producers which supplied subject merchandise to it 
during the POI. This practice applies both to mandatory respondents 
receiving an individually calculated separate rate as well as the pool 
of non-investigated firms receiving the weighted-average of the 
individually calculated rates. This practice is referred to as the 
application of ``combination rates'' because such rates apply to 
specific combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise 
both exported by the firm in question and produced by a firm that 
supplied the exporter during the POI.

Fair-Value Comparisons

    Based on the data provided by petitioners, there is reason to 
believe that imports of PET Film from Brazil, Thailand, the UAE, and 
the PRC are being, or are likely to be, sold in the United States at 
less than fair value. Based on comparisons of export price/constructed 
export price to normal value that we revised as discussed above and 
calculated in accordance with section 773(c) of the Act, these are the 
estimated dumping margins for PET Film: 1) the estimated dumping 
margins for Brazil range from 13.08 percent (price-to-price) to 44.36 
percent (price to CV); 2) the estimated dumping margin for the PRC is 
76.72 percent; 3) the estimated dumping margin for Thailand is 80.24 
percent (price-to-CV); and 4) the UAE's estimated dumping margins range 
from 35.44 percent (EP-to-CV) to 73.23 percent (CEP-to-CV).

Initiation of Antidumping Investigations

    Based upon the examination of the petitions on PET Film from 
Brazil, the PRC, Thailand, and the UAE and other information reasonably 
available to the Department, the Department finds that these petitions 
meet the requirements of section 732 of the Act. Therefore, we are 
initiating antidumping duty investigations to determine whether imports 
of PET Film from Brazil, the PRC, Thailand, and the UAE are being, or 
are likely to be, sold in the United States at less than fair value. In 
accordance with section 733(b)(1)(A) of the Act, unless postponed, we 
will make our preliminary determinations no later than 140 days after 
the date of this initiation.

Sales Below Cost Allegation

    Petitioners have provided information demonstrating reasonable 
grounds to believe or suspect that sales of PET Film in Brazil were 
made at prices below the fully absorbed cost of production (COP), 
within the meaning of section 773(b) of the Act, and requested that the 
Department conduct a sales-below-costs investigation. We note that 
because petitioners were unable to provide adequate home market prices 
for Thailand or the UAE, we are not initiating country-wide cost 
investigations for those countries at this time. According to 19 CFR 
351.301(d)(2)(i)(A), petitioners are not precluded from filing a cost 
allegation once the information becomes available.
    An allegation of sales below COP need not be specific to individual 
exporters or producers. See, e.g., Statement of Administrative Action 
accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, 
Vol. 1 (1994) at 833. Thus, Commerce will consider allegations of 
below-cost sales in the aggregate for a foreign country. Id. Further, 
section 773(b)(2)(A) of the Act requires that the Department have 
``reasonable grounds to believe or suspect'' that below-cost sales have 
occurred before initiating such an investigation. Reasonable grounds 
exist when an interested party provides specific factual information on 
costs and prices, observed or constructed, indicating that sales in the 
foreign market in question are at below-cost prices.
    As described in the section below on ``Cost of Production and 
Constructed Value,'' the Department calculated a country-specific COP 
for a certain gauge of PET Film for Brazil. Based upon a comparison of 
the prices of the foreign-like product in the home market to the 
calculated COP of the product, we find reasonable grounds to believe or 
suspect that sales of the foreign like product were made below the COP, 
within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, 
the Department is initiating a country-wide cost investigation with 
regard to Brazil. We note, however, that if we determine that the 
Brazilian home market is not viable, our initiation of a country-wide 
cost investigation with respect to sales in the home market will be 
rendered moot. See Brazil Initiation Checklist.

Cost of Production and Constructed Value (CV)

    Pursuant to section 773(a)(4) of the Act, COP consists of the cost 
of manufacturing (``COM''); selling, general and administrative (SG&A) 
expenses; financial expenses; and packing.
    Pursuant to section 773(a)(4) of the Act, petitioners calculated a 
single CV as the basis for normal value (NV). Petitioners calculated CV 
using the COM; SG&A expenses; financial expenses. Petitioners then 
added the average profit rate based on the most recent financial 
statements of a PET Film producer. See Brazil Initiation Checklist, 
Thailand Initiation Checklist, and UAE Initiation Checklist.

Brazil

    Petitioners calculated COM and packing based on a U.S. producer's 
cost experience, adjusted for known differences (e.g., energy and 
labor) to manufacture PET Film in Brazil using publically-available 
data. To calculate SG&A and financial expense rates, petitioners relied 
on the financial statements most contemporaneous to the proposed POI 
for a thermoplastic resins (including PET Film) producer in Brazil, 
Braskem Ltda. See Brazilian Initiation Checklist.Petitioners determined 
the cost of terephthalic acid (PTA) and mono-ethylene glycol (MEG) 
based on the quantities used to manufacture one pound of PET Film as

[[Page 60807]]

experienced by a U.S. PET Film producer. See Volume I of the Brazil 
Petition at page 32 and Volume II of the Brazil Petition at Exhibit 5. 
Petitioners stated the cost of the required raw material in Brazil were 
similar to that incurred by the U.S. PET Film producer and provided an 
affidavit in the Supplement to the Petition, dated October 10, 2007, at 
Exhibit 6 as support.
    Petitioners determined labor costs using the labor cost experience 
of a U.S. PET Film producer to manufacture one pound of PET Film, 
adjusted by the ratio of labor costs in Brazil to those of the United 
States. Petitioners obtained the annual Brazilian and U.S. labor costs 
from the Department's ``Expected Wage Calculation: 2003,'' found at 
https://ia.ita.doc.gov/wages/03wages/110805-2003-Tables for Brazil and 
the United States. See Supplement to the Petition, dated October 10, 
2007, at pages 9-10 and Exhibit 7.
    Petitioners determined energy costs using the cost experience of a 
U.S. PET Film producer to manufacture one pound of PET Film, adjusted 
by the ratio of energy costs in Brazil to that of the United States. 
Petitioners obtained the annual Brazilian and U.S. energy costs from 
the International Energy Agency publication, Energy Prices and Taxes 
for 2004. See Volume I of the Petition at page 33 and Volume II of the 
Petition at Exhibits 5 and 9.
    Petitioners determined the fixed overhead costs (exclusive of 
energy and labor) using the cost experience of a U.S. PET Film producer 
to manufacture one pound of PET Film. Petitioners' stated this was 
reasonable because the one producer of PET Film in Brazil does not 
publish its financial statements. See Volume I of the Brazil Petition 
at pages 33 and 34 and Supplement to the Petition, dated October 10, 
2007, at page 8.
    To calculate SG&A expense, interest expense and profit, petitioners 
relied on the financial statements of Braskem Ltda. for the fiscal year 
ended December 31, 2005, the most recent financial statements 
available. See Volume II of the Petition at Exhibit 10.
    We recalculated fixed overhead costs based on the financial 
statements of Braskem Ltda. for the fiscal year ended December 31, 
2005, as this best reflects the cost experience in Brazil. See Volume 
II of the Petition at Exhibit 10. To calculate a price-to-CV margin, we 
added packing to this revised CV. See Brazil Initiation Checklist.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of these petitions have been provided to the 
representatives of the Governments of Brazil, the PRC, Thailand, and 
the UAE. We will attempt to provide a copy of the public version of the 
petitions to the foreign producers/exporters named in the petitions.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than November 12, 
2007, whether there is a reasonable indication that imports of PET Film 
from Brazil, the PRC, Thailand, and the UAE materially injure, or 
threaten material injury to, a U.S. industry. A negative ITC 
determination covering all classes or kinds of merchandise covered by 
the petitions would result in the investigations being terminated. 
Otherwise, these investigations will proceed according to statutory and 
regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: October 18, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-21120 Filed 10-25-07; 8:45 am]
BILLING CODE 3510-DS-S