Commercial Information Circulars

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Ref : EIC 111/3/10/1

23 October 2006

Dear Sirs,

Commercial Information Circular No. 417/2006

US : Anti-dumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages and Duty Drawback

The US Department of Commerce (DOC) announced in the Federal Register (FR) notice of 19 October 2006 some changes in its anti-dumping (AD) methodologies regarding market economy inputs and expected non-market economy (NME) wages in cases involving NMEs, and requested comments on the proposed changes to the duty drawback practice. The changes are detailed in the FR notice appended (pdf format) to this circular and summarized in the following paragraphs.

DETAILS

Market Economy Inputs

2. The Commercial Information Circular (CIC) No. 111/2006 dated 22 March 2006 detailed DOC's current practice and proposed changes concerning the use of market economy inputs in the calculation of normal value in AD proceedings involving NMEs. Having considered the comments received on the proposed changes, DOC decided that with immediate effect, in cases where an NME producer sources an input from both market economy suppliers and from within the NME, DOC will institute a rebuttable presumption that market economy input prices are the best available information for valuing an entire input when the total volume of the input purchased from all market economy sources during the period of investigation or review exceeds 33 percent of the total volume of the input purchased from all sources during the period. When the volume of an NME producer's purchases from market economy suppliers as a percentage during the period is below 33 percent, DOC will weight-average the weighted-average market economy purchase prices with an appropriate surrogate value according to their respective shares of the total volume of purchases, subject to certain conditions. 

Expected Non-Market Economy Wages 

3. The CIC No. 249/2005 dated 11 July 2005 reported that DOC was considering changes to its long-standing methodology for the calculation of expected NME wages in AD proceedings involving NMEs and requested comments therefor. Pursuant to the comments received, DOC announced that effective for the 2006 calculation of expected NME wage rates, it will make several changes to the methodology, which include using only earnings data reported in Chapter 5b of the International Labour Organization's Yearbook of Labour Statistics as well as expanding the basket of countries upon which the wage regression is based to cover all market economy countries that meet the specified criteria and that have reported such data within one year prior to the Base Year (i.e. two years prior to the year in which the regression analysis is conducted). DOC intended to publish its 2006 expected NME wage rates on its website in the autumn of 2006 and will request comments with regard to potential clerical errors in light of the reviewed methodology.

Duty Drawback

4. The CIC No. 249/2005 also reported DOC's intention to revise its practice in granting a duty drawback adjustment to export price in AD proceedings. DOC is now proposing to modify its approach concerning the calculation of duty drawback adjustment to export price in AD proceedings when a respondent producer obtains an input both from domestic and foreign sources. Specifically, the DOC is seeking comments on the methodology that should be used when the producer receives duty drawback on certain exports containing the input but not on other exports containing the input. Comments must reach DOC by 17 November 2006.

ENQUIRIES

5. For enquiries concerning the content of this circular, please contact the undersigned at 2398 5682.

Yours faithfully,

(Amanda Kwong)

for Director-General of Trade and Industry

Note : While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same.