Uncovered Innerspring Units From the People's Republic of China, South Africa, and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations, 4817-4822 [E8-1438]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 18 (Monday, January 28, 2008)]
[Notices]
[Pages 4817-4822]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1438]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-928, A-791-821, A-552-803]


Uncovered Innerspring Units From the People's Republic of China, 
South Africa, and the Socialist Republic of Vietnam: Initiation of 
Antidumping Duty Investigations

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

EFFECTIVE DATE: January 28, 2008.

FOR FURTHER INFORMATION CONTACT: Erin Begnal at (202) 482-1442 or Scot 
Fullerton at (202) 482-1386 (People's Republic of China), AD/CVD 
Operations, Office 9; Dmitry Vladimirov at (202) 482-0665 or Minoo 
Hatten at (202) 482-1690 (South Africa), AD/CVD Operations, Office 5; 
Eugene Degnan at (202) 482-0414 or Robert Bolling at (202) 482-3434 
(Socialist Republic of Vietnam), AD/CVD Operations, Office 8, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230.

SUPPLEMENTARY INFORMATION: 

The Petitions

    On December 31, 2007, the Department of Commerce (the Department) 
received petitions concerning imports of uncovered innerspring units 
from the People's Republic of China (the PRC), South Africa, and the 
Socialist Republic of Vietnam (Vietnam) (collectively, the Petitions) 
filed in proper form by Leggett and Platt, Incorporated (the 
petitioner). See Petitions on Uncovered Innerspring Units from China, 
South Africa, and Vietnam (December 31, 2007). On January 7, 2008, the 
Department issued a request for additional information and 
clarification of certain areas in the Petitions. Based on the 
Department's requests, the petitioner filed additional information on 
January 11, 2008 (four distinct submissions on general issues, PRC-
specific material (PRC Supplement to the Petition), Vietnam-specific 
material (Vietnam Supplement to the Petition), and South Africa-
specific material (South Africa Supplement to the Petition)), and on 
January 16, 2008 (two distinct submissions on PRC-specific material 
(PRC Second Supplement to the Petition) and Vietnam-specific material 
(Vietnam Second Supplement to the Petition)).
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioner alleges that imports of uncovered 
innerspring units from the PRC, South Africa, and Vietnam 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 are 
materially injuring, or threatening material injury to, an industry in 
the United States.
    The Department finds that the petitioner filed these Petitions on 
behalf of the domestic industry because the petitioner is an interested 
party as defined in section 771(9)(C) of the Act and has demonstrated 
sufficient industry support with respect to the initiation of the 
antidumping duty investigations that the petitioner is requesting. See 
the ``Determination of Industry Support for the Petitions'' section 
below.

Period of Investigation

    Because the Petitions were filed on December 31, 2007, the 
anticipated period of investigation (POI) for the PRC and Vietnam is 
April 1, 2007, through September 30, 2007. The anticipated POI for 
South Africa is October 1, 2006, through September 30, 2007. See 19 CFR 
351.204(b)(1).

Scope of Investigations

    The merchandise covered by each of these investigations is 
uncovered innerspring units composed of a series of individual metal 
springs joined together in sizes corresponding to the sizes of adult 
mattresses (e.g., twin, twin long, full, full long, queen, California 
king, and king) and units used in smaller constructions, such as crib 
and youth mattresses. All uncovered innerspring units are included in 
this scope regardless of width and length. Included within this 
definition are innersprings typically ranging from 30.5 inches to 76 
inches in width and 68 inches to 84 inches in length. Innersprings for 
crib mattresses typically range from 25 inches to 27 inches in width 
and 50 inches to 52 inches in length.
    Uncovered innerspring units are suitable for use as the innerspring 
component in the manufacture of innerspring mattresses, including 
mattresses that incorporate a foam encasement around the innerspring.
    Pocketed and non-pocketed innerspring units are included in this 
definition. Non-pocketed innersprings are typically joined together 
with helical wire and border rods. Non-pocketed innersprings are 
included in this definition regardless of whether they have border rods 
attached to the perimeter of the innerspring. Pocketed

[[Page 4818]]

innersprings are individual coils covered by a ``pocket'' or ``sock'' 
of a nonwoven synthetic material or woven material and then glued 
together in a linear fashion.
    Uncovered innersprings are classified under subheading 9404.29.9010 
and have also been classified under subheadings 9404.10.0000, 
7326.20.00.70, 7320.20.5010, or 7320.90.5010 of the Harmonized Tariff 
Schedule of the United States (HTSUS). The HTSUS subheadings are 
provided for convenience and customs purposes only; the written 
description of the scope of these investigations is dispositive.

Comments on Scope of Investigations

    During our review of the Petitions, we discussed the scope with the 
petitioner to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the regulations (Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), 
we are setting aside a period for interested parties to raise issues 
regarding product coverage. The Department encourages all interested 
parties to submit such comments within 20 calendar days of signature of 
this notice. Comments should be addressed to Import Administration's 
Central Records Unit (CRU), Room 1870, U.S. Department of Commerce, 
14th Street and Constitution Avenue, NW., Washington, DC 20230. The 
period of scope consultations is intended to provide the Department 
with ample opportunity to consider all comments and to consult with 
parties prior to the issuance of the preliminary determinations.

Comments on Product Characteristics for Antidumping Duty Questionnaires

    We are requesting comments from interested parties regarding the 
appropriate physical characteristics of uncovered innerspring units to 
be reported in response to our antidumping duty questionnaires. This 
information will be used to identify the key physical characteristics 
of the subject merchandise in order for the respondents to report the 
relevant factors and costs of production accurately, as well as to 
develop appropriate product-comparison criteria.
    Interested parties may provide any information or comments that 
they feel are relevant to the development of an accurate list of 
physical characteristics. Specifically, they may provide comments as to 
which characteristics are appropriate to use as the general product 
characteristics and the product-comparison criteria. It is not always 
appropriate to use all product characteristics as product-comparison 
criteria. We base product-comparison criteria on meaningful commercial 
differences among products. In other words, while there may be some 
physical product characteristics which manufacturers use to describe 
uncovered innerspring units, it may be that only select few product 
characteristics take into account commercially meaningful physical 
characteristics. In addition, interested parties may comment on the 
order in which the physical characteristics should be used in matching 
products. The Department attempts to rank the most important physical 
characteristics first and the least important characteristics last.
    In order to consider the suggestions of interested parties in 
developing and issuing the antidumping duty questionnaires, we must 
receive comments at the above-referenced address by February 11, 2008. 
Additionally, rebuttal comments must be received by February 21, 2008.

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 or workers 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 or workers 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.
    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 and workers who produce the 
domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product (section 771(10) of the Act), they do so for different 
purposes and pursuant to a separate and distinct authority. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to law. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp. Ltd. v. United 
States, 688 F. Supp. 639, 644 (1988), aff'd 865 F.2d 240 (CAFC 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 subtitle.'' Thus, the reference point from which the 
analysis of the domestic like product 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, the petitioner does not 
offer a definition of domestic like product distinct from the scope of 
the investigation. Based on our analysis of the information submitted 
on the record, we have determined that uncovered innerspring units 
constitute 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 this case, see the following 
documents, on file in the Central Records Unit, Room 1117 of the main 
Department of Commerce building: Antidumping Investigation Initiation 
Checklist: Uncovered Innerspring Units from the People's Republic of 
China (PRC Initiation Checklist), Industry Support at Attachment II; 
the Antidumping Investigation Initiation Checklist: Uncovered 
Innerspring Units from South Africa (South Africa Initiation 
Checklist), Industry Support at Attachment II; and the Antidumping 
Investigation Initiation Checklist: Uncovered Innerspring Units from 
the Socialist Republic of Vietnam (Vietnam Initiation Checklist), 
Industry Support at Attachment II.
    The Department's review of the data provided in the Petitions, 
supplemental submissions, and other information

[[Page 4819]]

readily available to the Department indicates that the petitioner has 
established industry support. First, the Petitions established support 
from domestic producers (or workers) 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. See, e.g., 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) of the Act because the 
domestic producers (or workers) who support the 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 section 732(c)(4)(A)(ii) of the Act 
because the domestic producers (or workers) who support the 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, the Petitions. Accordingly, the Department 
determines that the Petitions were filed on behalf of the domestic 
industry within the meaning of section 732(b)(1) of the Act. See PRC 
Initiation Checklist at Attachment II (Industry Support), South Africa 
Initiation Checklist at Attachment II (Industry Support), and Vietnam 
Initiation Checklist at Attachment II (Industry Support).
    The Department finds that the petitioner filed the Petitions on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(C) of the Act and it has demonstrated 
sufficient industry support with respect to the initiation of the 
antidumping investigations that it is requesting. See id.

Allegations and Evidence of Material Injury and Causation

    The petitioner alleges that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of the imports of the subject 
merchandise sold at less than normal value. The petitioner contends 
that the industry's injured condition is illustrated by the following 
circumstances: reduced market share; lost sales; reduced production 
capacity and capacity-utilization rate; reduced shipments; underselling 
and price depressing and suppressing effects; lost revenue; reduced 
employment; decline in financial performance; an increase in import 
penetration. 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 PRC Initiation Checklist 
at Attachment III (Injury), South Africa Initiation Checklist at 
Attachment III (Injury), and Vietnam Initiation Checklist at Attachment 
III (Injury).

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 based its decision to 
initiate these investigations of imports of uncovered innerspring units 
from the PRC, South Africa, and Vietnam. The sources of data for the 
deductions and adjustments relating to the U.S. prices, a home-market 
price (for South Africa), and the factors of production (for the PRC 
and Vietnam) are also discussed in the country-specific initiation 
checklists. See PRC Initiation Checklist, South Africa Initiation 
Checklist, and Vietnam Initiation Checklist. Should the need arise to 
use any of this information as facts available under section 776 of the 
Act in our preliminary or final determinations, we will reexamine the 
information and revise the margin calculations, if appropriate.

PRC

Export Price

    For U.S. price, the petitioner relied on price quotes for three 
specific models of Chinese-manufactured uncovered innerspring units 
that were offered for sale during the POI. See Petitions, Volume II at 
1 and Exhibit PRC-1, and the PRC Supplement to the Petition at 1 and 
Exhibit 2. The petitioner deducted from the starting price the costs 
associated with exporting and delivering the product, including a 
distributor markup fee, ocean freight and insurance charges, U.S. duty, 
port and wharfage fees, domestic inland freight, and domestic brokerage 
and handling charges. See Petitions, Volume II at 2-4 and Exhibit PRC-
2, and the PRC Supplement to the Petition at Exhibit 8.

Normal Value

    The petitioner asserts that the Department considers the PRC to be 
a non-market-economy country (NME) and, therefore, constructed normal 
value based on the factors-of-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 May 15, 2006. 
(This document is available online at https://ia.ita.doc.gov/download/
prc-nme-status/prc-nme-status-memo.pdf.) In addition, in two recent 
investigations, the Department treated the PRC as 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 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 
appropriately based on factors of production valued in a surrogate 
market-economy country in accordance with section 773(c) of the Act. In 
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.
    The petitioner asserts 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 
Petitions, Volume II at 5-6 and Exhibit PRC-6. Because the information 
provided in the Petitions satisfies the elements for selecting a 
surrogate country, we believe that the petitioner's 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 selection of a surrogate country. Also, 
pursuant to 19 CFR 351.301(c)(3)(i), interested parties will be 
provided with an opportunity to submit publicly available information 
to value the factors of production within 40 days of the date of 
publication of the preliminary determination.
    The petitioner 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. The petitioner calculated normal value for the U.S.

[[Page 4820]]

prices discussed above based on its own experience for producing 
uncovered innerspring units, which it states is consistent with the 
standard methodology for the production of uncovered innerspring units. 
The petitioner also states that Chinese producers use substantially the 
same material inputs and production processes as U.S. producers. See 
Petitions, Volume II at 6-12 and Exhibit PRC-7. The petitioner states 
that the primary material used to produce both ``pocketed'' and ``non-
pocketed'' uncovered innerspring units is carbon steel wire. See 
Petitions, Volume II at pages 9 and Exhibit PRC-7.
    For the normal-value calculations, pursuant to section 773(c)(4) of 
the Act, the petitioner used surrogate values from a variety of 
sources, including Indian import statistics from the World Trade Atlas, 
the International Energy Agency's (IEA) Energy Prices & Taxes 2003 
edition, the Department's NME Wage Rate for the PRC, the American 
Chemistry Council, and publicly available financial statements, to 
value the factors of production. See Petitions, Volume II at 6-13 and 
Exhibits PRC 8-16, the PRC Supplement to the Petition at Exhibits 9 and 
10, and the PRC Second Supplement to the Petition at Exhibit 2. The 
petitioner 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 Web site at https://ia.ita.doc.gov/
exchange/.
    The petitioner identifies steel wire, steel clips, fabric, and 
industrial glue as raw materials in the production of uncovered 
innerspring units. For steel wire, the main raw material in the 
production of uncovered innerspring units, the petitioner provided a 
surrogate value based on Indian imports from November 2006 through 
April 2007, inflated to the POI using a Wholesale Price Index (WPI) 
inflator. See Petitions, Volume II at 9-10 and Exhibit PRC-9, and the 
PRC Supplement to the Petition at Exhibit 10. For steel clips, the 
petitioner has provided a surrogate value based on Indian imports from 
June 2005 through May 2006 used previously by the Department, inflated 
to the POI using a WPI inflator. Id. For fabric, the petitioner has 
provided a surrogate value based on Indian imports from November 2006 
through April 2007, inflated to the POI using a WPI inflator. Id. For 
labor, the petitioner submitted a labor-usage rate which was valued 
using the Department's NME Wage Rate for the PRC. See Petitions, Volume 
II at 11 and Exhibits PRC-7 and PRC-10, and the PRC Supplement to the 
Petition at 6 and Exhibits 9 and 10. The petitioner has submitted two 
surrogate values for energy inputs, i.e., electricity and natural gas. 
With regard to electricity, the petitioner provided a surrogate value 
using the IEA's Energy Prices & Taxes 2003 edition, which petitioner 
inflated to the POI, as the electricity value is based on the price 
paid by industrial users in India in 2000. See Petitions, Volume II at 
11-12 and Exhibit PRC-11. With regard to natural gas, the petitioner 
provided a surrogate value from the American Chemistry Council, which 
the Department has used in a previous investigation. See Petitions, 
Volume II at 11-12 and Exhibit PRC-12, and the PRC Supplement to the 
Petition at 7 and Exhibit 10. The petitioner valued six packing inputs: 
plastic wrap, paper, labels, steel straps, pallets, and ladders/crates. 
For each packing input, the petitioner used Indian import statistics 
obtained through the World Trade Atlas and excluded data pertaining to 
NME and subsidy countries. See Petitions, Volume II at 10-11 and 
Exhibits PRC-1, PRC-8 and PRC-13, and the PRC Supplement to the 
Petition at 7-8 and Exhibit 10.
    For the normal-value calculations, the petitioner submitted the 
figures for factory overhead, selling, general, and administrative 
expenses, and profit from the financial ratios of an Indian producer of 
fabricated wire products, Lakshmi Precision Screws Limited. The 
Department used these ratios to initiate two other recent 
investigations and the financial statements covered the period of April 
2005 to March 2006. See Petitions, Volume II at 3 and Exhibit PRC-15. 
We did not make any adjustments to the normal value as calculated by 
the petitioner because we determined that the petitioner used adequate 
sources and has calculated normal value accurately using those sources.

Vietnam

Export Price

    The petitioner based its U.S. price calculation on a price quote 
for a specific model of uncovered innerspring units produced in Vietnam 
that were offered for sale before the POI. The petitioner states that 
this price quote remained in effect during the POI. See the Vietnam 
Second Supplement to the Petition, at Exhibit 1. The petitioner 
calculated an average net U.S. Price by subtracting an estimate for 
U.S. distributor markup, ocean freight, marine insurance, U.S. port 
charges, foreign inland freight, and brokerage and handling costs from 
the gross unit price reflected in the price quote of imports for the 
POI. See id. at Exhibit 2.

Normal Value

    Because the Department considers Vietnam to be an NME country, the 
petitioner constructed normal value based on the factors-of-production 
methodology pursuant to section 773(c) of the Act. The Department has 
examined Vietnam's market status and determined that Vietnam should be 
treated as an NME. See Memorandum from the Office of Policy to Faryar 
Shirzad, Assistant Secretary for Import Administration, Antidumping 
Duty Investigation of Certain Frozen Fish Fillets from the Socialist 
Republic of Vietnam--Determination of Market Economy Status, November 
8, 2002 (this document is available online at https://ia.ita.doc.gov/
download/vietnam-nme-status/vietnam-market-status-determination.pdf). 
In addition, in two recent administrative reviews, the Department 
treated Vietnam as an NME country. See Certain Frozen Fish Fillets From 
the Socialist Republic of Vietnam: Final Results of the Second 
Administrative Review, 72 FR 13242 (March 21, 2007), and Certain Frozen 
Warmwater Shrimp From the Socialist Republic of Vietnam: Final Results 
of the First Antidumping Duty Administrative Review and First New 
Shipper Review, 72 FR 52052 (September 12, 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 
Vietnam 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 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 Vietnam's NME status and 
the granting of separate rates to individual exporters.
    The petitioner asserts that India is the most appropriate surrogate 
country for Vietnam because India is a significant producer of 
comparable merchandise and at a level of economic development 
comparable to Vietnam. See Petitions, Volume IV at 5-7. Because the 
information provided in the Petitions satisfies the elements for 
selecting a surrogate country, we believe that the petitioner's use of 
India as a surrogate country is appropriate for purposes of

[[Page 4821]]

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 with an opportunity to submit publicly 
available information to value the factors of production within 40 
calendar days after the date of publication of the preliminary 
determination.
    The petitioner 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. The petitioner calculated normal value based on its 
own consumption rates of raw materials, labor, and energy inputs used 
in 2007. The petitioner asserts that, to the best of its knowledge, 
these consumption amounts should be similar to those used by Vietnamese 
producers, except for the use of natural gas, which is discussed below. 
See Petitions, Volume IV at 8.
    Pursuant to section 773(c)(4) of the Act, the petitioner used 
surrogate values derived from publicly available sources to value the 
factors of production. For direct materials and packing materials, the 
petitioner calculated weighted-average surrogate values using Indian 
import statistics from the World Trade Atlas or values calculated by 
the Department in previous cases using Indian import statistics from 
the World Trade Atlas. See Petitions, Volume IV at Exhibit V-9 and V-
13. Consistent with the Department's practice, the petitioner excluded 
from its weighted-average calculation imports from NME countries and 
countries that may provide broadly available non-industry-specific 
export subsidies. Finally, the petitioner added a value to the material 
inputs to account for freight charges. The petitioner calculated the 
freight charge based on the estimated distance from several of the 
Vietnamese producers to the nearest port in Ho Chi Minh City. See 
Petitions, Volume IV at Exhibit V-16, and the Vietnam Supplement to the 
Petition, at 1 and Exhibits 1 and 8.
    The petitioner valued labor using the expected wage rate for 
Vietnam provided by the Department on its website. See Petitions, 
Volume IV at Exhibit V-10. For electricity, the petitioner provided a 
surrogate value from the International Energy Agency's Key World Energy 
Statistics 2003, as cited in the Memorandum to the File, entitled 
``Antidumping Duty Administrative Review of Glycine from the People's 
Republic of China: Surrogate Values for the Preliminary Results,'' 
April 2, 2007. See Petitions, Volume IV at Exhibit V-11.
    The petitioner asserts that, although it no longer uses natural 
gas-heated ovens to temper its coils, it believes that the Vietnamese 
producers still use this process. The petitioner asserts that, 
therefore, it is using its own past experience of using natural gas-
heated ovens to temper the coils as the best available estimate of the 
Vietnamese production process. To value natural gas, the petitioner 
provided a surrogate value from the American Chemistry Council, which 
the Department has used in a previous investigation of steel wire 
garment hangers from the People's Republic of China. See Petitions, 
Volume IV at Exhibit V-12. The petitioner 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 Web site at 
https://ia.ita.doc.gov/exchange/. When the surrogate values 
were not contemporaneous with the POI, the petitioner adjusted the 
values using the wholesale price index in India as published in the 
International Financial Statistics of the International Monetary Fund. 
See Petitions, Volume IV at Exhibits V-9 through V-14.
    For the normal-value calculations, the petitioner derived the 
figures for factory overhead, selling, general, and administrative 
expenses, and profit from the financial statements of Lakshmi Precision 
Screw, an Indian producer of fabricated wire products. The financial 
statement that the petitioner provided covered the period of April 2005 
to March 2006. We did not make any adjustments to the normal value as 
calculated by the petitioner because we determined that the petitioner 
used adequate sources and has calculated normal value accurately using 
those sources.

South Africa

Export Price

    The petitioner calculated export price based on pricing information 
during the POI obtained from its U.S. customer of South African-
produced uncovered innerspring units sold, or offered for sale, by U.S. 
importers of the subject merchandise. See Petitions, Volume III at 1-2 
and Exhibits SA-1 and SA-2, and the South Africa Supplement to the 
Petition at page 1. The petitioner made adjustments to the starting 
price, where applicable, for foreign inland freight, ocean freight, 
marine insurance, and U.S. customs and port fees. The petitioner 
calculated foreign inland freight based on the petitioner's South 
African subsidiary's transportation experience and the related shipping 
costs it incurs. The petitioner calculated ocean freight and marine 
insurance based on price quotes obtained from a freight forwarder and 
an insurance provider. U.S. customs and port fees (i.e., harbor 
maintenance and processing fees) were based on standard U.S. government 
percentages, as applied to the petitioner's estimate of entered value.

Normal Value

    The petitioner was able to estimate domestic South African prices 
for uncovered innerspring units using market intelligence gathered by 
its South African subsidiary on pricing information related to its 
competitor, a major manufacturer of the foreign like product. The 
petitioner also provided its South African subsidiary's actual price to 
an unaffiliated customer in South Africa for uncovered innerspring 
units it sold during the POI. See Petitions, Volume III at 4 and 
Exhibits SA-4 and SA-10, and the South Africa Supplement to the 
Petition at 2. Because the petitioner's South African subsidiary's 
actual price to an unaffiliated customer was sufficient to use in 
calculating normal value, we did not need to use the petitioner's 
estimate of a competitor's price offered for the foreign like product 
during the POI. See Petitions, Volume III at Exhibit SA-10.
    To arrive at normal value, the petitioner made adjustments to the 
starting price, where applicable, for home-market and U.S. credit 
expenses and U.S. packing costs. The petitioner did not make an 
adjustment to home-market price for foreign inland freight costs 
because it claims such costs are minimal due to the South African 
manufacturer's proximity to its customer. To calculate home-market 
credit expenses, the petitioner used the payment terms its South 
African subsidiary extends to its customer. The petitioner did not make 
an adjustment for home-market packing expenses because its South 
African subsidiary does not pack foreign like product for shipment to 
its customer. The petitioner calculated U.S. packing costs based on the 
experience of its South African subsidiary and the packing type it uses 
for export shipments. To calculate U.S. credit expenses, the petitioner 
used the payment terms associated with the pricing information of a 
U.S. sale, discussed above.

Fair-Value Comparisons

    Based on the data provided by the petitioner, there is reason to 
believe that imports of uncovered innerspring units from the PRC, South 
Africa, and Vietnam are being, or are likely to be,

[[Page 4822]]

sold in the United States at less than fair value. Based on comparisons 
of export price to normal value, calculated in accordance with section 
773(c) of the Act, the estimated dumping margins for uncovered 
innerspring units from the PRC range from 55.95 percent to 234.51 
percent and the estimated dumping margin for uncovered innerspring 
units from Vietnam is 116.31. See PRC Initiation Checklist and Vietnam 
Initiation Checklist, respectively. Based on a comparison of export 
price to normal value, calculated in accordance with section 773(a)(1) 
of the Act, the revised estimated dumping margin for uncovered 
innerspring units from South Africa is 121.39 percent. See South Africa 
Initiation Checklist.

Initiation of Antidumping Investigations

    Based upon the examination of the Petitions on uncovered 
innerspring units from the PRC, South Africa, and Vietnam, the 
Department finds that the Petitions meet the requirements of section 
732 of the Act. Therefore, we are initiating antidumping duty 
investigations to determine whether imports of uncovered innerspring 
units from the PRC, South Africa, and Vietnam 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.

Separate Rates

    In order to obtain separate-rate status in NME investigations, 
exporters and producers must submit a separate-rate status application. 
See, e.g., Policy Bulletin 05.1: 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 Web site 
at https://ia.ita.doc.gov/policy/bull05-1.pdf. Based on our experience 
in processing the separate-rate applications in previous NME 
antidumping duty investigations, we have modified the application for 
the NME investigations 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). The 
specific requirements for submitting the separate-rate application in 
the NME investigations are outlined in detail in the application 
itself, which will be available on the Department's Web site 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 will be due 60 days after publication of this initiation 
notice.

Selection of Respondents

    For these investigations, the Department intends to select 
respondents based on U.S. Customs and Border Protection (CBP) data for 
U.S. imports during the POI. We intend to make our decisions regarding 
respondent selection within 20 days of publication of this Federal 
Register notice. The Department invites comments regarding the CBP data 
and the selection of respondents within seven days of publication of 
this Federal Register notice.

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 the NME 
investigations. For example, the Separate Rates and Combination Rates 
Bulletin, at page 6, states:

    {w{time} hile 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 period of 
investigation. Note, however, that one rate is calculated for the 
exporter and all of the producers which supplied subject merchandise 
to it during the period of investigation. 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 period of investigation. (Emphasis added.)

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public versions of the Petitions have been 
provided to the representatives of the Governments of the PRC, South 
Africa, and Vietnam. We will attempt to provide a copy of the public 
version of the Petitions to the foreign producers/exporters, consistent 
with 19 CFR 351.203(c)(2).

International Trade Commission Notification

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

Preliminary Determinations by the International Trade Commission

    The ITC will preliminarily determine, no later than February 14, 
2008, whether there is a reasonable indication that imports of 
uncovered innerspring units from the PRC, South Africa, and Vietnam are 
materially injuring, or threatening material injury to, a U.S. 
industry. A negative ITC determination with respect to any country will 
result in the investigation being terminated for that country; 
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: January 22, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E8-1438 Filed 1-25-08; 8:45 am]
BILLING CODE 3510-DS-P