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Dispute Settlement

U.S. Trade Remedy Law: The Canadian Experience

IV United States Anti‑Dumping Duty Investigations regarding Imports from Canada: Case Histories, 1985–1999

1. Rock Salt from Canada

2. Heavy Walled Rectangular Welded Carbon Steel Pipes from Canada

3. Iron Construction Castings from Canada (and Brazil, India and People’s Republic of China)

4. Oil Country Tubular Goods from Canada (and Argentina and Taiwan)

5. Brass Sheet and Strip from Canada (and Brazil, France, Italy, South Korea, Sweden and West Germany)

6. Fresh Cut Flowers from Canada (and Chile, Colombia, Costa Rica, Ecuador, Kenya, Mexico and Peru)

7. Colour Picture Tubes from Canada (and Japan, Korea and Singapore)

8. Potassium Chloride from Canada

9. Certain Welded Carbon Steel Line Pipe from Canada

10. Fabricated Structural Steel from Canada

11. New Steel Rails from Canada

12. Thermostatically Controlled Appliance Plugs and Internal Probe Thermostats from Canada (and Hong Kong, Japan, Malaysia and Taiwan)

13. Generic Cephalexin Capsules from Canada

14. Limousines from Canada

15. Magnesium from Canada (and Norway)

16. Ball Bearings, Mounted or Unmounted, from Canada (and Argentina, Austria, Brazil, Hong Kong, Hungary, Mexico, People’s Republic of China, Poland, Korea, Spain, Taiwan, Turkey and Yugoslavia)

17. Nepheline Syenite from Canada

18. Steel Wire Rope from Canada

19. Potassium Hydroxide, Liquid and Dry, from Canada (and Italy and United Kingdom)

20. Medium Voltage Underground Distribution Cable from Canada

21. Certain Flat‑Rolled Carbon Steel Products from Canada (and 19 Other Countries)

22. Certain Steel Wire Rod from Canada (and Brazil, Japan, and Trinidad and Tobago)

23. Certain Steel Wire Rod from Canada (and Germany, Trinidad and Tobago, and Venezuela)

24. Certain Stainless Steel Plate from Canada (and Belgium, Italy, Korea, South Africa and Taiwan)

25. Certain Stainless Steel Round Wire Rod from Canada (and India, Japan, Korea, Spain and Taiwan)

26. Cattle from Canada

1. Rock Salt from Canada

1.1 Original Investigation

On January 25, 1985, the International Salt Company filed a petition alleging injurious dumping of rock salt from Canada. An investigation was initiated by the U.S. Department of Commerce on February 26, 1985. On March 20, 1985, the U.S. International Trade Commission issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of Canadian rock salt. On July 15, 1985, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of subject imports from Canada. This was followed by a December 4, 1985, affirmative final dumping determination by Commerce, in which it found anti‑dumping duty margins of 8.15% and 4.39% respectively for the two Canadian producers specifically investigated (Domtar and Morton). The average rate was 6.35%. On January 24, 1986, the ITC made a final negative injury determination. Citing increasing levels of production, relatively high capacity utilization, an increasing number of workers and rising labour productivity, as well as improving financial conditions, the ITC concluded that the U.S. domestic rock salt industry was not materially injured or threatened with material injury by dumped imports from Canada. The petitioner had alleged the existence of a regional market. On this point, the ITC found that while the proposed region satisfied the statutory criteria for a regional industry, the particular circumstances of this industry were such that it was not appropriate to apply a regional industry analysis. The ITC found that the alleged regional industry was discretionary and shifted in response to particular conditions.

1.2 Key Issue

The Canadian respondents argued that Commerce should use a weighted average rather than a transaction‑by‑transaction method to calculate U.S. prices. Respondents alleged that the statutory criteria had been met since the investigation involved an extraordinarily large number of individual sales and a significant number of complex adjustments. Commerce rejected this argument, finding that section 777A (a) did not require a departure from normal methodology but was intended to expand the instances in which the administering authority could use sampling and averaging techniques in order to reduce costs and administrative burden. In this regard, Commerce did not find the number of sales or adjustments to be so large as to make a transaction‑by‑transaction analysis of U.S. price an onerous burden.

1.3 Canadian Government Activity

Aside from monitoring and providing general advice to industry representatives involved in the investigation, no specific interventions were made by the Canadian government.

2. Heavy Walled Rectangular Welded Carbon Steel Pipes from Canada

2.1 Original Investigation

On March 25, 1985, a petition alleging injurious dumping of certain welded carbon steel pipes from Canada was filed by the following companies: Bull Moose Tube; Copperweld Tubing Group; Kaiser Steel Corp.; Maruichi American Corp.; UNR‑Leavitt; and Welded Tube Co. of America. On April 22, 1985, Commerce initiated the investigation.

On May 15, 1985, the ITC issued a preliminary affirmative determination, finding that there was a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of Canadian carbon steel pipes. On September 10, 1985, Commerce released a negative preliminary determination, with only two Canadian respondents under investigation being assessed de minimis dumping margins. On November 22, 1985, Commerce released an affirmative final determination. Foreign market value for Titan Industrial Corp., whose exports accounted for approximately 80% of the products under investigation, was based on constructed value as there were insufficient sales in the home market or in third countries to provide viable comparisons. The margin for Titan was calculated to be barely over the de minimis level at 0.65%. A voluntary questionnaire response submitted by Welded Tube of Canada was rejected because it was found to be untimely and inadequate.

On February 12, 1986, the ITC released a negative final determination. Because of continuing improvement in the U.S. industry—including an increase in domestic production, an increase in capacity utilization, an improvement in the general financial condition of the industry, a declining level of market share held by imports, a lack of an overall pattern of underselling by imports and the extremely low dumping margin found—the ITC concluded that dumped imports of the subject goods were not causing or threatening to cause injury to the U.S. industry.

2.2 Key Issues

In its preliminary determination, Commerce calculated constructed value for Titan based on costs incurred for fiscal year 1984. For its final determination, Commerce followed its normal practice and used costs incurred for the sales of the product during the period of investigation, which involved part of the 1985 fiscal year. Under a long‑term contract with a third‑party tube converter and exporter affiliate of Titan, Dominion Steel was required to pay a penalty if it did not order a specific amount of fabrication work each year. Dominion argued that this penalty payment should not be included in the cost of production because it had no effect on its income during the period of investigation. Commerce rejected the argument and included the penalty in the “cost of manufacture” since it was directly related to production.

2.3 Canadian Government Activity

On April 8 and May 1, 1985, the Canadian Embassy in Washington, D.C., made written representations to Commerce regarding the general weakness of the injury allegation as well as a Commerce decision to enlarge the product scope of the investigation on initiation.

3. Iron Construction Castings from Canada (and Brazil, India and People’s Republic of China)

3.1 Original Investigation

On May 13, Commerce and the ITC received a petition filed by the Municipal Castings Fair Trade Council, which is a trade association representing 15 U.S. producers of iron construction castings. On June 7, 1985, Commerce initiated an investigation against all four named countries.

On July 3, 1985, the ITC issued a preliminary affirmative determination, finding a reasonable indication that U.S. industry was materially injured by reason of allegedly dumped imports of certain heavy and light iron construction castings from all four countries, including Canada. On October 28, 1985, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports from all four countries. On January 16, 1986, Commerce issued its final affirmative determination, finding that certain iron construction castings from Canada were being sold, or were likely to be sold, in the United States at less than fair value. This was followed by the February 16, 1986, release of the final ITC affirmative determination. The ITC found that U.S. industry was materially injured and threatened with material injury by reason of dumped imports of heavy iron construction castings. On March 5, 1986, Commerce published its anti‑dumping duty order. Anti‑dumping duty margins were assessed as follows:

ManufacturerWeighted Average Margin
Mueller Canada Inc.9.8%
LaPerle Foundry Ltd.3.9%
Bibby Ste. Croix Foundries8.6%
All Others7.0%

On September 25, 1986, Commerce amended the margin for LaPerle to 4.4% because of clerical errors made in the final determination. As a result, the “all others” rate was also amended to 7.5%.

3.2 Key Issues (Original Investigation)

Commerce agreed to the petitioner’s request not to use average U.S. prices for Bibby. The petitioner’s position was that the legislative history of section 777A of the Tariff Act of 1930 did not require the use of weighted‑average U.S. prices when weighted‑average foreign market value is used. Commerce asserted that it had the authority to use sampling and averaging methodologies at its discretion. Commerce also refused to consider light and heavy construction castings as two distinct products, again citing its discretion to define the “class or kind” of merchandise subject to an investigation.

3.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., made several representations on behalf of Canadian producers/exporters. It submitted a formal diplomatic note shortly after the receipt of the petition, presenting arguments against the injury allegations advanced by the petitioners. The Embassy also supported Canadian industry’s 1994 request for a changed circumstances review with representation and advice. In addition, the Embassy made specific representations with respect to several administrative reviews.

3.4 Canada–U.S. Free Trade Agreement Panel Review

On June 20, 1991, LaPerle Foundry and Mueller Canada filed a request for a review of the final determination in the administrative review covering the period 1985–1987 by a panel established under Chapter 19 of the Free Trade Agreement (FTA). On July 1, 1991, both Canadian producers filed a Notice of Motion Requesting Dismissal of the Panel Review. All parties consented to this motion and the panel review was terminated.

3.5 Administrative Reviews

Administrative reviews were conducted by Commerce for the periods of 1985– 1987, 1987–1988, 1991–1992, 1992–1993, 1997–1998 and 1999–2000. As a result of the last initiated review concerning the period between March 1, 1999, and February 28, 2000, Commerce released a preliminary determination on December 7, 2000. The ITC determined that the dumping margin concerning the imports of one producer, Canada Pipe Company Limited, amounted to 7.07%.

3.6 Changed Circumstances Reviews

On June 8, 1994, the four Canadian producers formally requested that Commerce review its anti‑dumping duty order in light of changed circumstances, pursuant to section 751 (b) of the Tariff Act of 1930. The Canadian petitioners maintained that a large share of the market was closed to foreign producers because of the subsequent extension of the “Buy America” provisions. Since U.S. producers were protected from import injury through Buy America, the Canadian petitioners argued that the anti‑dumping duty orders directed against Canada and possibly other countries should be revoked. On August 25, 1994, the respondents’ request was denied because Commerce concluded that there was a lack of evidence of changed circumstances having a significant impact on the market.

In response to an April 30, 1998, request by the U.S. petitioner, Commerce initiated a changed circumstances review. Based on the lack of further interest by domestic parties, Commerce initially issued a preliminary determination of its intent to revoke the order with respect to light iron construction castings. On September 17, 1998, Commerce released its final determination, revoking the order as it applied to all entries of light iron construction castings.

3.7 Sunset Review

On November 2, 1998, a five‑year sunset review of the order was initiated. The ITC determined that it would conduct a full review, while Commerce conducted an expedited review. On June 7, 1999, Commerce made a final determination that revocation of the anti‑dumping duty order would be likely to lead to the continuation or recurrence of dumping. This determination was based upon a finding of dumping margins above de minimis in each of the administrative reviews conducted by Commerce, the existence of continuing deposit rates above de minimis and the fact that respondent interested parties waived their right to participate in the review. Commerce determined that the margins calculated in its original investigation (4.40% to 9.80%) were probative of the behaviour of Canadian producers and exporters of certain iron construction castings. On October 20, 1999, the ITC made an affirmative determination that revocation of the order would be likely to lead to a continuation or recurrence of injury to the U.S. industry by reason of dumped imports. As a result, the order was continued.

4. Oil Country Tubular Goods from Canada (and Argentina and Taiwan)

4.1 Original Investigation

On July 22, 1985, Lone Star Steel and CF& I Steel filed a petition alleging injurious dumping of oil country tubular goods (OCTG) from three countries, including Canada. Oil country tubular goods are hollow steel products of circular crosssections intended for use in the drilling for oil and gas. These products include oil well casing, tubing and drill pipe of carbon or alloy steel, whether welded or seamless, manufactured to either American Petroleum Institute (API) or non‑API (such as proprietary) specifications, and are in either finished or unfinished condition. Commerce initiated an investigation concurrent with a countervailing duty investigation on August 19, 1985.

On September 11, 1985, the ITC issued a preliminary affirmative determination, finding a reasonable indication that U.S. industry was materially injured by reason of allegedly dumped and subsidized imports of oil country tubular goods from the three countries. On January 7, 1986, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports of OCTG from Canada and Taiwan. Commerce issued a preliminary determination of dumping with respect to imports from Argentina on January 27, 1986. On April 22, 1986, Commerce issued an affirmative final determination of dumping regarding imports from Canada and Taiwan. The investigation regarding Argentina was terminated after a negative final determination. In its final determination, Commerce found that “critical circumstances,” as alleged by petitioners, did not exist with respect to OCTG from Canada as imports during the period subsequent to receipt of the petition were not massive when compared to recent import levels. On June 11, 1986, the ITC made an affirmative final injury determination regarding imports from Canada and Taiwan. Based on the existence of a general decline in the domestic industry, an apparent decline in the U.S. consumption level for 1985 (31% below the 1982 level), a 22% decrease in U.S. production, a 41.9% decrease in the number of U.S. workers, over $100 million in operating losses for the three years of 1983, 1984 and 1985, imports accounting for a substantial and growing market share, and evidence of underselling, the ITC concluded that the U.S. industry was being materially injured by dumped and subsidized imports from Canada and dumped imports from Taiwan.

The anti‑dumping duty order was issued on June 18, 1986, and then amended on October 10, 1986. The final anti‑dumping margins for imports from Canada were as follows:

ManufacturerEstimated Dumping Margins
Algoma13.09%
Ipsco38.78%
Sonco3.18%
Welded Tube0.00%
(excluded from order)
All Others18.65%

4.2 Key Issues (Original Investigation)

For most respondents, the allocation of costs for prime and non‑prime OCTG was a matter of considerable concern. The Court of International Trade in Ipsco Inc. and Ipsco Steel Inc. v. United States (1989) eventually directed Commerce to “find a reasonable means of allocating the combined costs of production between [prime and non‑prime OCTG] which takes into account differences in value.” On a related issue, Commerce did not treat off‑spec or non‑prime goods any differently in terms of its calculation of normal values or in its treatment of costs. In addition, Commerce calculated respondents’ freight costs using average costs because only average costs could be verified. Commerce rejected the petitioners’ position that the responses submitted by some Canadian producers were so deficient that they should be disregarded and instead best information available be used. Commerce stated that where responses were deficient, it sought and obtained the clarification necessary to make a determination. Many other company‑specific issues arose during the investigation.

4.2.1 Algoma

Commerce found that Algoma had improperly reclassified certain manufacturing expenses as part of selling, general and administrative expenses. In this regard, such expenses were associated with the production of OCTG and should be treated as manufacturing overhead. Within its expense calculations, Algoma had also improperly allocated expenses between different varieties of OCTG. Commerce further determined that Algoma must include interest on long‑term debt in SGA. Commerce determined that Algoma’s depreciation, fixed overhead costs and SGA should be included in the U.S. manufacturing cost adjustment.

Commerce rejected Algoma’s assertion that long‑term interest expenses should be excluded, finding that the debt was incurred as part of the corporate long‑term capitalization. Therefore, an allocation of the expense was included in the final determination. Commerce stated that in determining whether there are differences in sales at varying levels of trade affecting price comparability, information must be submitted and verified substantiating that the differences in the price were the result of differences in the cost of selling. Algoma’s claim for an adjustment in this regard was therefore disallowed.

In determining whether to disregard below‑cost sales in the home market. Commerce relied upon recent cases as precedents. In such cases, below‑cost sales were disregarded when they amounted to 10% or more of the home market sales. More than 10% of the home market sales were below cost for several of Algoma’s products. Consequently, they were disregarded in the calculation of foreign market value.

4.2.2 IPSCO

Commerce disallowed IPSCO’s bad debt expense adjustment to fair market value because Commerce’s practice was to only consider bad debt losses when the company wrote them off in accordance with its own practices. In IPSCO’s case, the debt in question was to be settled in court and was therefore not considered a loss. IPSCO incurred abnormally high costs for certain products that it had recently started producing. Commerce stated that while it may make allowances for extraordinary costs, the normal costs data submitted by IPSCO were not sufficiently substantiated.

4.2.3 Welded Tube

Commerce adjusted Welded Tubes’ cost of production data by re‑allocating labour and overhead costs to accurately account for the differences in costs of producing pipe products of different diameters.

4.2.4 Sonco

A Sonco raw material supplier, Algoma, was not found to be a related party, despite the fact that Algoma had an option to purchase 50% to 100% of Sonco’s shares. Because of this relationship, the petitioner had asserted that Commerce should not presume that sales occurred at arm’s‑length prices and that Commerce should therefore use best information available. Commerce did find, however, that the raw material prices were valid and supported by documentation. On a related issue, Commerce did not use Sonco cost allocations because they did not reflect the firm’s usual cost allocation practices. As a result, best information available was used. In accordance with established practice, Commerce treated cash discounts offered to U.S. customers not as an offset to credit expenses as calculated by the respondent but as reductions in price. Commerce determined that Sonco improperly allocated several expenses incurred in further processing its materials in the United States, resulting in an understatement of costs.

4.3 Canadian Government Activity

Since a countervailing duty investigation regarding oil country tubular goods from Canada was initiated simultaneously with the anti‑dumping duty investigation, it is difficult to isolate Canadian government representations related solely to the anti‑dumping investigation. That being said, the Canadian Embassy in Washington, D.C., made a number of interventions with U.S. authorities:

  • In August 1985, the Embassy discussed with Commerce the reconciliation of U.S. and Canadian statistics regarding OCTG to deal mainly with misclassification problems. Commerce subsequently revised its statistics.
  • Ambassador Gotlieb wrote Secretary of Commerce Baldridge to propose an expedited review of the issue of the treatment of prime and non‑prime material in the investigation.
  • In February 1988, the scope of the anti‑dumping duty order was raised by the Embassy with Commerce and U.S. Customs. In this regard, the scope was first expanded and then reduced by Commerce.
  • In March 1988, the Embassy raised the matter of delays in the conduct of administrative reviews of the order by Commerce. On August 17, 1988, the Embassy met with Commerce about delays in the conduct of reviews.
  • About delays more specifically, the Embassy wrote Commerce in December 1988 concerning reviews for Christianson Pipe.
  • On June 21, 1989, the Embassy submitted a diplomatic note regarding Commerce’s April 13, 1988, scope ruling, which had placed a heavy documentation burden on Canadian exporters.
  • Ambassador Burney wrote Secretary of Commerce Mosbacher on October 6, 1989, again concerning delays in administrative reviews.

4.4 Canada–U.S. Free Trade Agreement Panel Review

On November 5, 1990, Stelco filed a request for an FTA Chapter 19 Panel Review of Commerce’s notice clarifying the scope of the order and abolishing the end‑use certification procedure. The panel review was eventually terminated. On May 16, 1991, Algoma also filed a request for panel review of the scope ruling. On August 8, 1991, Algoma’s request to have the panel review terminated was accepted.

4.5 Administrative Reviews

Eight administrative reviews were conducted with respect to the anti‑dumping duty order on OCTG, the most active exporters being Christianson Pipe and IPSCO. In September 1996, after IPSCO received its third successive zero dumping margin, the order was revoked for that company.

4.6 Sunset Review

On May 3, 1999, a five‑year sunset review of the order was initiated. The ITC determined that it would conduct a full review, while Commerce conducted an expedited review. On December 1, 1999, Commerce made a final determination that revocation of the anti‑dumping duty order would be likely to lead to the continuation or recurrence of dumping. However, on July 22, 2000, the ITC determined that the revocation of the anti‑dumping duty order would not be likely to lead to a continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. The order was therefore revoked.

5. Brass Sheet and Strip from Canada (and Brazil, France, Italy, South Korea, Sweden and West Germany)

5.1 Original Investigation

On March 10, 1986, Commerce and the ITC received a petition filed by American Brass, Bridgeport Brass, Chase Brass & Copper, Hussey Metals Div (Copper Range Co.), Miller Co., Olin Corp., Revere Copper Products and several industrial unions, all alleging injurious dumping of brass sheet and strip from seven countries, including Canada, as well as subsidized imports from Brazil. An investigation was initiated on April 7, 1986. On May 1, 1986, the ITC issued a preliminary affirmative determination, finding that there was a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of brass sheet and strip.

On August 22, 1986, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of subject imports. On December 9, 1986, Commerce made its final affirmative determination of dumping. On December 31, 1986, the ITC made an affirmative final determination of injury. Because of a sharp decline in the U.S. industry’s financial condition from 1983 to 1985—as indicated by significant declines in sales, gross profit, operating income, cash flow, employment and domestic prices—the ITC concluded that subsidized imports from Brazil and dumped imports from Brazil, Canada and Korea were injuring the domestic industry. On February 26, 1987, the ITC made affirmative determinations regarding imports from the other four countries of France, Italy, Sweden and West Germany. The anti‑dumping duty order regarding Canada was issued on January 12, 1987, with the following margins being assessed:

Manufacturer/ExporterEstimated Dumping Margins
Arrowhead2.51%
Noranda11.54%
All Others8.10%

5.2 Key Issues (Original Investigation)

Canadian respondents requested Commerce to exclude “tolled” sales from its calculation because they were only performing a conversion service rather than selling a finished product. Where U.S. purchasers provide material for the manufacture of the merchandise under investigation, Commerce considers it appropriate to include such sales in its investigation notwithstanding that they may arguably be sales of service.

Commerce refused to accept Ratcliffs’ voluntary response, submitted in order to allow for a calculation of a company‑specific margin. In its refusal, Commerce cited regulations that require the examination of only 60% of merchandise exported to the United States during the period of investigation. Exports from Arrowhead and Noranda constituted more than 60% of exports to the United States. Voluntary responses from other affected exporters are accepted provided there are no deficiencies. Citing deficiencies in Ratcliffs’ response, Commerce rejected it.

Noranda claimed that a level of trade adjustment should have been made based on prior differential between customers who slit the material and those who do not. Level of trade adjustments may be made under certain circumstances in order to compare sales at the same commercial level of trade in the United States and the home market. Here, however, Commerce determined that sales were made at the same commercial level of trade in both markets.

5.3 Anti‑Circumvention Inquiry

On June 18, 1993, Commerce determined that a Canadian brass producer and a U.S. brass importer were circumventing the anti‑dumping order by importing Canadian brass plate (a product not included within the order) into the United States, where it was then rolled into brass sheet and strip. Commerce determined that the difference in value between the imported brass plate and the brass sheet and strip sold in the United States was insignificant. Accordingly, it determined that brass plate used in the production of brass sheet and strip fell within the scope of this order. The respondents requested Commerce to calculate the difference in value on the basis of fabrication costs alone, contending that the price of the base material was such a significant component that, if included, it would distort the value calculations. Commerce rejected this request, stating that both statute and practice required them to include the value of the metal and the fabrication when calculating the value of a single product.

5.4 Administrative Reviews

There were nine administrative reviews between 1988 and 1999. On November 8, 1991, an administrative review determined that the dumping margin for Ratcliffs was 0.46%, a de minimis rate. Because Ratcliffs had sold merchandise covered by the order at not less than foreign market value for a period of three consecutive years and there was no information to suggest that the company was likely to sell at dumped prices in the future, the anti‑dumping duty order was revoked with respect to Ratcliffs.

The order as it applied to Noranda and Wolverine Tube, Noranda’s successor company, was also subject to nine complete administrative reviews. The reviews for Wolverine covering 1994 and 1995 found de minimis rates. The preliminary determination in the review for 1996 was also found de minimis (0.042%). As a result, Commerce made a preliminary determination to revoke the order as it applied to Wolverine based on three consecutive years of no sales below normal value. Further, Commerce rejected the petitioner’s request that the respondent be obligated to provide additional data covering its activities over the past five years in support of its request for revocation. However, in its final determination for the 1996 review, which was released on June 17, 1998, Commerce determined that a dumping margin of 0.67% existed for Wolverine for 1996. Commerce therefore determined not to revoke the anti‑dumping duty order as it applied to Wolverine. However, Commerce acknowledged that it had inadvertently failed to make certain adjustments in calculating cost of production, thereby incorrectly calculating an above de minimis margin. Despite strong representations by both Wolverine and the Canadian government, Commerce would not amend its determination.

5.5 Canadian Government Activity

During the course of the original investigation, the Canadian government made a formal representation questioning the basis for initiation of the investigation. It also made a number of representations regarding various administrative reviews on a number of issues, including delays in conducting administrative reviews, the use of unverified information in calculating cost of production, the information burden on respondents requesting revocation, and Commerce’s failure to make a timely correction in its final determination in the 1996 review. The most recent representation was submitted to Commerce on March 9, 2000, with respect to Wolverine Tube.

5.6 NAFTA Binational Panel Review

On July 15, 1998, Wolverine Tube filed a request for a NAFTA Panel Review of Commerce’s final determination in the administrative review determination for the 1996 period. While Commerce acknowledged its calculation error on remand and lowered the margin for the 1996 period to below the de minimis level, it did not partially revoke the order because the 1997 review for Wolverine, the review for the immediate subsequent period, had resulted in an above de minimis finding (0.71%).

5.7 Sunset Review

On November 2, 1998, a five‑year sunset review of the order was initiated. The ITC determined that it would conduct a full review, while Commerce conducted an expedited review. On June 7, 1999, Commerce made a final determination that revocation of the anti‑dumping duty order would be likely to lead to the continuation or recurrence of dumping. This determination was based upon a finding of dumping margins above de minimis in each of the four administrative reviews conducted by Commerce, the existence of continuing deposit rates above de minimis for all respondents and the fact that respondent interested parties waived their right to participate in the review. Commerce determined that the margins calculated in its Department’s original investigation (4.40% to 9.80%) were probative of the behaviour of Canadian producers/exporters of brass sheet and strip.

On October 29, 1999, the ITC made an affirmative determination that revocation of the order would be likely to lead to a continuation or recurrence of injury to the U.S. industry by reason of dumped imports. One of the primary issues that the ITC had to address in this review was whether to cumulate imports from all countries subject to the review. While cumulation is discretionary in a five‑year review, the ITC is directed by statute not to cumulate imports if it determines that such imports are likely to have no discernible impact on the domestic industry. In view of the low countervailing duties found to prevail, as well as the fact that imports from India had increased over the life of the order, imports from India—which had been subject to a countervailing duty order since 1980—were not cumulated and the order was revoked. It is interesting to note that of the three remaining countries subject to cumulation, the anti‑dumping duty margins found for Canada were well below those for Brazil (5.95% to 58.73%) and China (92.74%).

The ITC found that imports from Canada, which showed by far the largest volume among the countries under investigation, had increased significantly in the years immediately preceding the order but that, along with imports from Brazil and China, the Canadian‑source imports fell over the life of the order, probably reflecting the remedial effect of the order. On the other hand, the ITC found that all three countries (Brazil, Canada and China) had ample production capacity to increase shipments to the United States absent the order. In addition, the ITC found that there was no evidence that all three countries would not resume significant exports to the United States if the order was revoked. Regarding price effects, the ITC found that it was likely, given the price competitiveness of the market, that all three countries would price aggressively to regain lost market share, depressing and suppressing prices in the market. In assessing material injury, the ITC found that, while the domestic industry had shown some improvement during the period in which the orders were in place, six of the 15 domestic producers reported operating losses over that period despite increases in domestic consumption, production and shipments. Furthermore, the domestic share of the market in 1998 was comparable with the domestic share recorded in 1983, the beginning of the period under review.

In conclusion, the ITC found that the likelihood of increased imports, combined with expected adverse price effects of such imports, would have a significant adverse impact on the production, shipments, sales and revenue levels of the domestic industry. Accordingly, the ITC concluded that, if the anti‑dumping duty orders were revoked, subject imports would be likely to have a significant adverse impact on the domestic industry within a reasonably foreseeable time. As a result of this finding, the order was continued.

6. Fresh Cut Flowers from Canada (and Chile, Colombia, Costa Rica, Ecuador, Kenya, Mexico and Peru)

6.1 Original Investigation

On May 21, 1986, the Floral Trade Council of Davis, California, filed a petition alleging dumping of fresh cut flowers from Canada and other countries. On June 17, 1986, an anti‑dumping duty investigation was initiated. Countervailing duty investigations were initiated at the same time.

On July 16, 1986, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of fresh cut flowers from all eight countries. On November 3, 1986, Commerce issued a preliminary affirmative determination of dumping and ordered the suspension of liquidation of subject imports. Regarding imports from Canada, the questionnaire responses submitted to Commerce by the three Canadian growers exporting subject flowers to the United States during the period of investigation were determined to be deficient. Commerce requested additional information from the three companies with a deadline of October 28, 1986. The amended responses were not received by Commerce until November 20, 1986. As the stated deadline had passed, Commerce used best information available for both the U.S. price and foreign market value in making its final determination, which it issued on January 20, 1987.

On March 19, 1987, the ITC issued its final injury determination. Standard carnation imports were determined to be causing material injury to a U.S. industry, while imports of miniature carnations were found not to be causing injury. Despite apparent U.S. consumption increases and increases in U.S. producers’ net sales and total income, the ITC concluded that declines in domestic price increases coupled with a decline in U.S. producers’ income and market share (from 33.5% in 1983 to 28.8% in 1985) resulted in injury to the domestic industry attributable to underselling by dumped and subsidized imports from Canada, Chile, Colombia, Costa Rica and Ecuador. On the same day, March 19, 1987, Commerce amended its anti‑dumping duty margin on imports from Canada to 7.76%, revised from the 6.80% margin found in its January 20, 1987, final dumping determination. The amendment to the anti‑dumping duty margin was made pursuant to the decision in Badger‑Powhatan v. United States (U.S. Court of International Trade, April 2, 1986), in which Commerce was required to recalculate the weighted‑average dumping margin for the remaining products by excluding that portion of the margin attributable to the products for which the ITC had made a negative injury determination.

6.2 Key Issues (Original Investigation)

The information contained in the petition was used to calculate the foreign market value because Commerce had determined that Canadian respondents had not provided full and complete responses to the anti‑dumping duty questionnaires. As a result, there were few, if any, additional issues to be considered in the investigation.

6.3 Canadian Government Activity

Since a countervailing duty investigation on flowers from Canada was initiated simultaneously with the anti‑dumping duty investigation, it is difficult to isolate Canadian government representations related solely to the anti‑dumping investigation. That being said, the Canadian Embassy in Washington, D.C., in particular made the following interventions with U.S. authorities:

  • The Embassy provided trade statistics to the ITC in an effort to correct data indicating that Canadian exports to the United States totalled approximately $250,000 annually. The actual figure was under $50,000; the difference was due to an “origin” misclassification by U.S. Customs.
  • Representations were made to the U.S. Trade Representative in October 1987 suggesting that the finding in this case was inconsistent with U.S. obligations under the GATT in view of the negligibility of the imports involved. The issue was also raised on a number of occasions in the GATT Subsidies Committee in both 1986 and 1987.

6.4 Administrative Reviews

On June 18, 1993, the anti‑dumping duty order was revoked. Since administrative reviews had not been requested for four successive years, Commerce concluded that the order was no longer of any interest to the parties.

7. Colour Picture Tubes from Canada (and Japan, Korea and Singapore)

7.1 Original Investigation

On November 26, 1986, a petition alleging the injurious dumping of colour picture tubes (CPTs) from four countries was filed by the following: the International Association of Machinists & Aerospace Workers; the International Brotherhood of Electrical Workers; the International Union of Electronic, Electrical, Technical, Salaried & Machine Workers, AFL‑CIO‑CLC; the United Steelworkers of America; and the Industrial Union Department of the AFL‑CIO. On December 22, 1986, an investigation directed against all four countries was initiated.

On January 22, 1987, the ITC issued a preliminary affirmative determination, finding a reasonable indication that U.S. industry was materially injured by reason of allegedly dumped imports of colour picture tubes from the four countries. On June 30, 1987, after two postponements, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports from all four countries. On November 18, 1987, Commerce made its final dumping determination. This was followed by the December 22, 1987, release by the ITC of its affirmative final determination of injury. The ITC concluded that the U.S. colour picture tube industry was suffering material injury by reason of dumped imports from the four named countries. The finding was based on the following indicators: a decline in U.S. capacity and capacity utilization from 1985 to 1987, a steady decline in intra‑company shipments, a rise in U.S. inventories, declines in the number of workers and hours worked, substantial operating and net losses over the entire period of investigation, a near doubling of imports, an increase in import market penetration from 8.2% to 12.4%, and a decline in average prices for all screen sizes between 1984 and 1986.

As noted, on November 18, 1987, Commerce had issued its final affirmative determination. However, counsel for the Canadian producer/exporter Mitsubishi had pointed out several clerical and computer errors made by Commerce. As a result, a duty rate of 0.63% for Mitsubishi and all other exporters from Canada was assessed and published on January 7, 1988.

7.2 Key Issues

Petitioners argued that CPTs shipped and imported, together with all parts necessary for assembly into a complete television set or receiver (i.e. as a “kit”), should be included in the order. Commerce disagreed and excluded such CPTs from the scope of the order. Kits and fully assembled televisions were considered by Commerce to be a separate class or kind of merchandise if: (1) the CPT is “physically integrated” with the other television receiver components in such a manner as to constitute one inseparable amalgam; and (2) the CPT does not constitute a significant portion of the cost or value of the items being imported.

7.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note challenging the allegation of injury caused by imports from Canada to the U.S. industry. The government also monitored the investigation and provided general advice to Canadian exporters.

7.4 Administrative Reviews

At the request of U.S. petitioners, there were two administrative reviews initiated with respect to the order as it pertained to Canada. They covered the 1993 and 1995 review periods, respectively. Both were terminated at the request of the petitioners before determinations were made.

7.5 Anti‑Circumvention Inquiry

On August 27, 1990, upon the request of the petitioners, Commerce initiated an inquiry to determine whether Mitsubishi Electronics Industries Canada was circumventing the anti‑dumping duty order by means of use of assembly facilities in Mexico. After a negative preliminary determination, on March 7, 1991, Commerce issued a negative final determination in the circumvention inquiry. At issue was the methodology Commerce used to measure the difference in value between the colour picture tubes imported into Mexico and the value of the finished television sets exported from Mexico to the United States. Commerce rejected the petitioners’ request to measure the value of a CPT as an incomplete television assembly. Commerce also found that differences in the value between the tube and the completed television set ranged from 55% to 70%. As a result, these differences in value were not found to be small, which is a necessary element for a finding of circumvention.

7.6 NAFTA Panel Review

On July 5, 1995, Mitsubishi filed a request for Panel Review under Chapter 19 of NAFTA. The panel was asked to consider Commerce’s May 25, 1995, determination not to revoke the anti‑dumping duty order. On June 14, 1996, the panel affirmed Commerce’s determination not to revoke the order. The panel found that as five years had passed since the imposition of the order without an administrative review, Commerce was required, by regulation, to publish a Notice of Intent to Revoke by January 1, 1993, the month of the fifth anniversary of the publication of the order. If there were no objections at that point, the order would be lifted. However, Commerce did not publish the required notice until December 28, 1994. The trade union petitioners at that point objected to the revocation, and on May 25, 1995, Commerce published a Notice of Determination Not to Revoke the anti‑dumping duty order. Mitsubishi argued that because no interested party objected by the last day of the month of the fifth anniversary, the order should have been revoked regardless of the fact that the necessary notice was not published. On the other hand, Commerce and the unions argued that notice of intent to revoke must be published in order to give interested parties an opportunity to object prior to revocation.

The panel based its decision on the language of the relevant regulations and the decision of the Court of Appeals for the Federal Circuit in Kemira. The regulations and the Kemira case both suggest that the complainant has the burden of demonstrating significant prejudice directed against its interests as a result of the error, a burden that was not discharged in the opinion of the panel. Furthermore, evidence suggested that the demonstrated vigilance of the unions would have resulted in a timely objection had the notice been published in a timely manner.

7.7 Sunset Review

On March 1, 1998, a five‑year sunset review of the order was initiated. The ITC determined that it would conduct a full review, while Commerce conducted an expedited review. On August 27, 1999, Commerce made a final determination that revocation of the anti‑dumping duty order would be likely to lead to the continuation or recurrence of dumping. In this context, Commerce accepted the petitioners’ arguments that, in view of the fact that imports of subject goods fell steadily since the imposition of the order, they could not be imported without being dumped. However, on March 30, 2000, the International Trade Commission found that revocation of the order would not lead to continuing injury to the domestic industry. The order was therefore revoked.

8. Potassium Chloride from Canada

8.1 Original Investigation

On February 10, 1987, Lundberg Industries and New Mexico Potash Corp. filed a petition alleging injurious dumping of potassium chloride (potash) from Canada. On March 5, 1987, Commerce initiated an investigation.

On April 2, 1987, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of potassium chloride from Canada. On August 26, 1987, Commerce released an affirmative preliminary determination. Commerce also determined that critical circumstances did not exist as alleged by the petitioner, finding no evidence of massive imports over a relatively short period. In its preliminary determination, Commerce found preliminary margins of 51.90% for the Potash Corporation of Saskatchewan, 9.14% for International Minerals & Chemical Corporation, 29.27% for PPG/Kallum, 85.60% for Central Canada Potash, and 77.44% for Potash of America. The provisional all‑others rate was 36.62%.

On January 19, 1988, Commerce suspended its investigation because an agreement had been reached with the Canadian producers/exporters accounting for substantially all of the known imports of potassium chloride from Canada. The Canadian producers/exporters agreed to revise their prices so as to eliminate the injurious effects of exports of the merchandise to the United States. At the request of the Olin Corporation (a U.S. interested party), Commerce excluded potassium chloride from Canada containing 0.5% or less of sodium chloride (“low‑sodium potash”) from the scope of the investigation.

8.2 Canadian Government Activity

The Canadian Embassy in Washington, D.C., was very active in facilitating discussions among the parties regarding the conclusion of a suspension agreement. The Embassy also made several representations on the standing of the petitioners to request an investigation.

8.3 Sunset Review

On April 1, 1999, Commerce and the ITC initiated a five‑year review of the suspended investigation in order to determine whether termination would be likely to lead to continuation or recurrence of dumping and material injury to the domestic industry within a reasonably foreseeable time. On May 28, 1999, Commerce published notice that it was terminating the investigation because no domestic interested party had responded to the notice of initiation. The order was therefore revoked.

9. Certain Welded Carbon Steel Line Pipe from Canada

9.1 Original Investigation

On February 11, 1987, a petition was filed by Tex‑Tube Div., Cyclops Corp. (Houston, Texas) and Maverick Tube Corp. (Chesterfield, Missouri), all alleging the injurious dumping of certain welded carbon steel line pipe from Canada. Commerce initiated the investigation on March 10, 1987. On April 8, 1987, the ITC made a negative preliminary injury determination and the investigation was terminated. The ITC found that there was no reasonable indication that an industry in the United States was materially injured or threatened with material injury, or that the establishment of an industry in the United States was materially retarded, by reason of imports from Canada. In particular, Commissioners Lodwick and Rohr considered that although some of the essential economic indicators showed declines over the period of investigation, these declines had to be viewed in the context of the declining market for line pipe. Furthermore, the ITC found that the domestic industry enjoyed relative stability and increasing market share.

In addition, the data clearly indicated that Canadian imports were not the cause of any material injury that might have been suffered, being stable and low in absolute and relative terms with no indication of price suppression or depression. In fact, the small increases in imports were due to the shutdown of a number of U.S. mills and the close proximity of Canadian mills. Other alleged lost sales arose from special market circumstances, including industry‑wide restructuring and a lengthy work stoppage at USX. In addition, ITC Chairman Liebler employed a rebuttable presumption (which was never rebutted) that cumulated import penetration of less than 2.5% of U.S. consumption was too insignificant to be a cause of material injury.

9.2 U.S. Court of International Trade Review

The ITC negative determination was appealed to the U.S. Court of International Trade. On May 24, 1988, the CIT rendered its decision in Maverick Tube Corp. v. United States, sustaining the negative determination.

9.3 Canadian Government Activity

Prior to initiation of the investigation, the Canadian Embassy in Washington, D.C., submitted a diplomatic note challenging the injury allegation by the petitioners.

10. Fabricated Structural Steel from Canada

10.1 Original Investigation

On January 11, 1988, the American Institute of Steel Construction, Inc. filed a petition on behalf of U.S. producers of fabricated structural steel, alleging injurious dumping of fabricated structural steel from Canada. On February 5, 1988, Commerce initiated an investigation.

On March 2, 1988, the ITC made a negative preliminary injury determination and the case was terminated. It found that there had been a 12% increase in domestic shipments from 1984 to 1986, and a 13% increase in the value of shipments from 1984 to 1985, followed by 3% increases in 1986 and 1987; there had also been a rise in capacity utilization, increased net sales, low import volumes, a recent rise in domestic producers’ market share and correspondingly decreasing import market penetration. For these reasons the ITC held that there was no reasonable indication that the U.S. industry was materially injured by reason of allegedly dumped imports from Canada.

10.2 Canadian Government Activity

A diplomatic note was filed by the Canadian Embassy in Washington, D.C., prior to initiation, asserting that the petition did not contain sufficient information of injury or dumping to warrant an investigation.

11. New Steel Rails from Canada

11.1 Original Investigation

On September 26, 1988, Commerce and the ITC received a petition filed by Bethlehem Steel Corporation, alleging that dumped imports of new steel rails were injuring U.S. industry. On October 21, 1988, an investigation was initiated. A countervailing duty investigation was initiated at the same time.

On November 23, 1988, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of new steel rails from Canada. On March 13, 1989, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of subject imports. On August 3, 1989, Commerce issued a final affirmative determination.

On September 8, 1989, the ITC issued a final affirmative determination with respect to the threat of material injury. Based upon net income and operating losses, declining employment, declining wages between 1986 and 1988, a negative return on assets throughout the period of investigation and a negative cash flow through 1988, the ITC found a threat of material injury from Canadian imports.

The ITC did not, however, make any finding with respect to present material injury, despite a substantial increase in imports and market share. There was little evidence of price underselling as the initial Canadian price in most instances was in the mid‑range of U.S. domestic bid prices. On September 15, 1988, an antidumping duty order was issued with margins as set out below. Because of the ITC finding that U.S. industry was threatened with material injury, all provisional antidumping duties collected subsequent to the determination of preliminary dumping were refunded.

Manufacturer/ExporterEstimated Dumping Margins
Algoma Steel Corp. Ltd.38.79%
All Others38.79%

11.2 Key Issues (Original Investigation)

Commerce rejected the information provided by Algoma with respect to cost of production, and instead used best information available as submitted by the petitioner. Specifically, Commerce alleged that Algoma misinterpreted Commerce’s questionnaire and provided the wrong cost data, and that the company developed unverifiable and undocumented information for the investigation rather than using an existing cost accounting system. Furthermore, the reported costs were not tied to the company’s financial records and could not be reconciled with the company’s actual inventory costs. Algoma categorically denied all of Commerce’s allegations, contending that it used the most reliable information available and kept Commerce fully informed of its approach throughout the response and verification process.

11.3 Canadian Government Activity

Since a countervailing duty investigation regarding new steel rails from Canada was initiated simultaneously with the anti‑dumping duty investigation, it is difficult to isolate Canadian government representations related solely to the antidumping investigation. The Canadian Embassy in Washington, D.C., in particular made a number of interventions with U.S. authorities:

  • On October 13, 1988, a diplomatic note was filed with U.S. authorities concerning the anti‑dumping investigation. It was the Canadian position that U.S. import statistics used by Commerce and the ITC contained information on scrap rail. This overestimated sales and undervalued prices. The note also argued that declining use of rail service affected demand.
  • In January 1989, representations were made objecting to Commerce’s consideration of late allegations by the petitioner.
  • In correspondence dated September 18, 1989, the Embassy suggested that Algoma had not been given an opportunity to address any alleged or apparent deficiencies uncovered during or after verification.

11.4 Canada–U.S. Free Trade Agreement Panel Review (Dumping)

On September 1, 1989, both Algoma Steel Corp. and Sydney Steel Corp. filed a request for an FTA Panel Review of the ITA’s final affirmative determination of dumping. On August 30, 1990, the binational panel affirmed Commerce’s final dumping determination. Details on the specific issues under consideration by the panel follow.

11.4.1 Commerce’s Rejection of Algoma’s Cost Data

Commerce had rejected the cost of production (COP) information submitted by Algoma and used best information available to construct a home market value. Commerce alleged that Algoma had misinterpreted Commerce’s questionnaire, therefore providing cost data based on unverifiable and undocumented information as opposed to using a standard cost accounting system. Furthermore, Commerce alleged that costs reported by Algoma were not tied to the company’s financial records, were unreconcilable with the company’s actual inventory costs and were based on data for times outside the period of investigation.

Algoma had categorically denied all of Commerce’s allegations, contending that it used the most reliable information available and had kept Commerce fully informed of its approach throughout the response and verification process.

The panel found that Commerce could not verify that Algoma’s reported costs were accurate reflections of the actual costs of producing each product. In effect, Algoma’s inability to provide documentation establishing how these standard costs were derived constituted non‑compliance with an information request, which in turn was judged to be sufficient reason to reject the submission. The panel therefore found that Commerce had acted in accordance with law in rejecting Algoma’s standard cost data as the basis for costs of production.

11.4.2 The Issue of Notice

Algoma asserted that Commerce had failed to provide timely notice that its cost information data was inadequate. The panel found that there was a great deal of confusion surrounding the issue but that Algoma had adequate notice that it was required to produce verifiable cost data. Algoma was also made aware that if the data did not conform to the request, Commerce would resort to best information available. Furthermore, the panel rejected Algoma’s claim that Commerce did not give the company a reasonable opportunity to correct the alleged inadequacies, noting that in its brief Algoma itself conceded that verification of a second cost submission would have been impossible.

11.4.3 Selection of the Best Information Available

Algoma contended that after Commerce rejected its cost information, Commerce should have used inventory values as the most reasonable form of best information available rather than relying on the petitioner’s data. The panel found no basis for reversing Commerce’s selection of the petitioner’s data. Here, it was noted by the Panel that best information available does not need to be the “best” of all information available but need only be supported by substantial evidence on the record. Algoma presented no evidence that cast doubt on the reliability of the petitioner’s data, and had itself detailed problems with using the inventory values as a basis for foreign market value.

11.5 Canada–U.S. Free Trade Agreement Panel Review (Injury)

On October 11, 1989, a request for a review of the ITC final affirmative determination of injury was filed by Sydney Steel Corp. On August 13, 1990, the binational panel affirmed the ITC’s final affirmative threat of injury and negative material injury determinations, including cumulation of dumped and subsidized imports (Sydney Steel). Other issues considered by the panel included the following:

11.5.1 Whether the ITC May Consider Threat of Material Injury

Algoma argued that the U.S. legislation mandates the ITC to find that either a U.S. industry is materially injured or that a U.S. industry is threatened with material injury, i.e. that it cannot find both. Therefore, if the ITC finds that an industry has been materially injured by causes other than the subject imports, the ITC is precluded from finding that the industry is threatened with material injury.

The panel found that while Algoma’s argument could be supported by the statutory language, it was not supported by legislative history and Congressional intent, which is to provide relief from dumped or subsidized imports before material injury actually occurs. The panel also held that an affirmative finding by the ITC that an industry in the United States is experiencing material injury, without regard to its causation, does not preclude consideration of whether the industry is threatened with material injury.

11.5.2 ITC Threat Determination

For a finding of threat of material injury to be legitimate when there is no finding of material injury by reason of imports, the record must reveal, in the absence of any evidence of deterioration in the condition of the domestic industry, the effect of the imports on that industry. In order to prevail, the appellants have the burden of demonstrating that the threat finding is not based on substantial evidence of record or is not otherwise in accordance with law. The panel found the ITC reasoning to be adequate in this regard. The panel also found that it had not been demonstrated that the ITC had erred in determining that the unused capacity of the Canadian producers had increased substantially. Furthermore, the panel agreed with the ITC finding that over the period of investigation, an increasing proportion of Canadian production was dedicated to export to the United States, and market conditions in Canada would continue to exert pressure to increase exports to the United States. In addition, the panel rejected Algoma’s argument that imports must rise in order for there to be a valid determination that there is a threat of material injury.

11.5.3 ITC Negative Injury Determination

Petitioner Bethlehem Steel challenged the ITC finding that any material injury was not by reason of the subject imports. The panel affirmed the determination of the ITC. Because the ITC did not explain its findings as required by U.S. law, Bethlehem asserted that a remand to the ITC was required. The panel agreed with the ITC position that there is no Congressional intent to require the Commission to discuss every factor or argument presented in an investigation. The panel found that there was no inconsistency in the ITC opinion regarding the possibility of future price suppression and price depression, and the absence of present causation of material injury.

Bethlehem further alleged that the pricing data reported by railroads, and later used by the ITC, were inconsistent with the pricing data reported by producers. The panel found that there was nothing unusual about conflicting data of record in an investigation; so long as the ITC made reasonable choices among the conflicting data, the fact that the data might support other choices in a new review was immaterial. Bethlehem asserted that the ITC had committed errors in its analysis of the volume of imports and in the market share held by the Canadian imports, and that it had failed to take into account the margins of dumping and subsidization. On the latter point, the panel found that U.S. law permits the ITC to examine the margins of dumping and subsidization, but does not require it to do so.

11.5.4 Changed Circumstances / Administrative Reviews

In November 1990 and May 1993, administrative reviews for the periods 1989– 1990 and 1991–1992 were initiated and then terminated at the request of the respondent Algoma. In 1996, two changed circumstances reviews were conducted. One resulted in a determination to revoke the anti‑dumping order as it applies to a specific variety of new steel rail (100 pounds per yard [100ARA‑A]), excepting light rail. The other review was terminated after a scope clarification was issued.

11.6 Sunset Review

On June 1, 1999, Commerce and the ITC initiated a sunset review of the antidumping and countervailing duty orders on steel rails from Canada. Both Commerce and the ITC determined that they would conduct expedited reviews since neither body received a substantive response from any respondent party. On December 29, 1999, Commerce made a final determination that revocation of the anti‑dumping duty order would be likely lead to the continuation or the recurrence of dumping. This determination was based upon a finding that although Algoma had ceased to produce new steel rail, Sydney Steel still was doing so; Commerce noted that about 40% of Sydney Steel’s production went into rail, and that its fiveyear business plan called for an increase in rail production and rail exports.

Furthermore, Commerce noted that there was a significant drop in exports to the United States after the order and that there had been no increase since, suggesting that Sydney could not export to the United States without dumping. As for the magnitude of the margin that Commerce took into account, the original margin of 38.79% was used because there had been no administrative review concluded since the order went into force in 1989.

On January 13, 2000, the ITC made an affirmative determination that revocation of the order would be likely to lead to a continuation or recurrence of injury to the U.S. industry by reason of dumped imports. The order was therefore continued.

12. Thermostatically Controlled Appliance Plugs and Internal Probe Thermostats from Canada (and Hong Kong, Japan, Malaysia and Taiwan)

12.1 Case History

On April 15, 1988, Triplex Inter Control (USA) Inc. of St. Albans, Vermont, filed a petition alleging injurious dumping of appliance plugs and internal probe thermostats from Canada. On June 8, 1988, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of appliance plugs and internal probe thermostats from the named countries.

On September 28, 1988, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports from all five named countries. On December 13, 1988, Commerce released an affirmative final determination with the following anti‑dumping margins for imports from Canada.

Manufacturer/Exporter/SellerEstimated Dumping Margins
ATCO Controls9.27%
All Others9.27%

On February 1, 1989, the ITC released a negative final determination. Despite the petitioner’s mixed record of profitability during the period of investigation, the domestic production of thermostats increased from 1.70 million units in 1985 to 2.32 million in 1987, and capacity utilization rose from 38% in 1985 to 52% in 1987; also increasing were wages, hours worked and productivity. This led the ITC to rule that the domestic industry was not threatened by reason of dumped imports from Canada. The ITC also found that, as the majority of the domestic producers also purchased the subject imports themselves and/or did not compete with the imports for open market sales, it could not conclude that direct competition existed between importers and domestic manufacturers.

12.2 Key Issues

Commerce rejected the respondents’ request for a suspension agreement, finding that such an arrangement would not be in the public interest, nor would effective monitoring of the suspension agreement be practicable. ATCO stated that its Canadian sales fell into two categories: (1) certain models meeting Canadian technical specifications were sold to Canadian appliance manufacturers and packaged with small appliances to be sold in Canada; and (2) other models meeting U.S. specifications were sold to Canadian appliance manufacturers and packaged with small appliances to be sold in the United States. Commerce refused ATCO’s request to treat the second category as sales to the United States for fair market value purposes because the subject merchandise as such was sold in Canada, while the products ultimately sold to the United States were small appliances, and thus were merchandise not covered by this investigation.

12.3 Canadian Government Activity

A diplomatic note dated May 4, 1988, expressed the Canadian government’s concern over the apparent low initiation standard. The note also objected to the potential use of constructed value in anti‑dumping investigations when Canadian home market prices were available. The government also assisted the company in its unsuccessful attempt to obtain a suspension agreement.

13. Generic Cephalexin Capsules from Canada

13.1 Case History

On October 27, 1988, Commerce and the ITC received a petition filed by Biocraft Laboratories of Elmwood Park, New Jersey, and an investigation was initiated. On December 12, 1988, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of generic cephalexin capsules from Canada.

On April 12, 1989, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports. On June 26, 1989, Commerce released an affirmative final determination with the following rates:

Manufacturer/Exporter/SellerEstimated Dumping Margins
Novopharm, Ltd.7.50%
All Others7.50%

On August 16, 1989, the ITC released a negative final determination. The ITC concluded that—given increased competition between generic cephalexin producers, increased consumption, dramatically increased capacity after 1987, increased employment and profitability—the domestic industry had not suffered material injury as a result of dumped imports from Canada. The Canadian producer was found to have higher levels of capacity utilization than its U.S. counterparts, with no evidence of intended product shifting. Evidence of mixed selling with trends toward overselling provided no proof of price suppression or depression.

13.2 Key Issues

The petitioner argued that because of the dominant buying role played by the Canadian government in the home market (i.e. sales to government agencies and hospitals), such sales should be excluded from face market value calculation because they were not made under “free market conditions.” Commerce rejected this argument, finding that there is no foundation for finding “state control” of only certain sales to certain purchasers in a market economy.

The respondent argued that its payments to a distributor in its home market should be categorized as rebates, not commissions as originally reported. Commerce agreed with the respondent because the payment to the distributor was a fixed percentage of the original invoice and was made regardless of whether the merchandise was resold.

The respondent requested Commerce to make allowances for quantity discounts. U.S. regulations require the respondent to prove that it has granted comparable quantity discounts on at least 20% of its home market sales, and to show that the discounts are related to economies of scale associated with larger production quantities. Commerce chose to compare sales of home market buying groups and government agencies with sales to purchasers of large quantities in the United States, and did not apply a quantity discount adjustment.

The petitioner argued that Commerce should exclude variable factory overhead, and direct labour and materials costs from the adjustment for physical differences between merchandise sold in the United States and in the home market. Commerce adjusted only for the net variable costs associated with differences in the costs of materials, finding that the respondent was unable to demonstrate that other cost variables were associated with physical differences in merchandise.

13.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note dated November 14, 1988, with U.S. authorities expressing the view that the petitioner did not represent the industry and that the petition did not contain sufficient evidence of injury to the U.S. industry. Embassy officials wrote in July 1989 urging the ITC not to cumulate Canadian exports with those of Israel and Portugal,152 arguing that cumulation without prior investigation was in violation of the GATT.

14. Limousines from Canada

14.1 Case History

On July 24, 1989, Southampton Coach Works, Ltd. of Farmingdale, New York, filed a petition alleging injurious dumping of limousines from Canada. Commerce initiated an investigation. A concurrent countervailing duty investigation was also initiated. On September 13, 1989, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of limousines from Canada.

On January 9, 1990, Commerce issued a preliminary affirmative determination and ordered a suspension of liquidation of imports. On March 26, 1990, Commerce released an affirmative final determination with the following rates:

Manufacturer/Exporter/SellerEstimated Dumping Margins
A.H.A.Manufacturing, Ltd.5.76%
All Others5.76%

In response to a request from the petitioner, the investigation was terminated on April 9, 1990.

14.2 Key Issues

The petitioner contended that critical circumstances existed because the respondent had entered receivership following the preliminary determination and was likely to liquidate existing inventory at “fire sale” prices. However, Commerce found that none of the three necessary conditions for a finding of critical circumstances existed.

AHA claimed that those limousines it manufactured using U.S.‑origin Lincoln Town Car and Cadillac chassis were outside the scope of the investigation because they were “non‑Canadian” in origin. Commerce found that AHA performed a sophisticated limousine conversion process, which transformed the base vehicle into a new and different article of merchandise with an increase in value of over 100%.

AHA contended that its U.S. fleet sales were made at the same level of trade as sales to distributors in Canada. However, Commerce found that the fleet customers were a type of end‑user, while distributors acted as wholesalers and therefore were at a different level of trade. As such sales made up a small proportion of AHA’s U.S. sales and there was a lack of comparable sales in Canada, they had not been included in the final determination.

The petitioner argued that Commerce should disallow deductions from the foreign market price for expenses related to AHA’s after‑sales service plan and after‑sales rebates. Commerce found the service plan to be part of the total package purchased by the customer and therefore directly related to the sales under consideration, while the rebates were consistent with AHA’s practice prior to the petition and did not constitute an attempt to circumvent the anti‑dumping investigation.

14.3 Canadian Government Activity

As this was also a countervailing duty investigation, it is difficult to isolate Canadian government representations related solely to the anti‑dumping investigation. However, in its diplomatic note of April 9, 1989, the Canadian Embassy in Washington, D.C., questioned aspects of the petition as it applied to anti‑dumping.

15. Magnesium from Canada (and Norway)

15.1 Case History

On September 5, 1991, the Magnesium Corporation of America filed a petition alleging the injurious dumping and subsidization of imports of magnesium from Canada, as well as dumping from Norway. On September 25, investigations were initiated.

On October 30, 1991, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of Canadian magnesium. On February 20, 1992, Commerce issued an affirmative preliminary determination. Norsk Hydro Canada Inc. (NHCI) did not complete a portion of Commerce’s questionnaire, resulting in the use of best information available as provided by the petitioner. For the other Canadian respondent, Timminco, home market sales were considered insufficient to determine foreign market value; accordingly, sales to a third country, Japan, were used to establish fair market value.

On July 13, 1992, Commerce issued an affirmative final determination with respect to Canadian producers of pure magnesium. The portion of the investigation relating to alloy magnesium was terminated because the evidence supporting the petitioner’s dumping allegations was found to be insufficient. In the course of its investigation, Commerce determined that pure and alloy magnesium constituted two separate classes of merchandise. Commerce determined that similar channels of distribution existed for the two products, but that the product characteristics, ultimate uses and customer expectations demonstrated that pure and alloy magnesium were two distinct classes of merchandise.

Commerce found that critical circumstances existed with regards to NHCI, as the company’s dumping margin exceeded 25% and there existed evidence of a massive surge in NHCI’s imports of pure magnesium over a relatively short period of time. The final anti‑dumping duty margins were determined as follows:

Manufacturer/Producer/ExporterEstimated Dumping Margin
Timminco Ltd.00.00% (excluded)
Norsk Hydro Canada Inc. (NHCI)31.33%
All Others31.33%

On August 26, 1992, the ITC issued an affirmative final injury determination. Unlike Commerce, the ITC determined that pure and alloy magnesium constitute one like product, not two distinct products. This conclusion was based on a finding of physical similarities, similar core production processes and similar distribution channels. It was found that the volume and market penetration of the subject imports increased dramatically during the period of investigation. Coincident with this large increase, U.S. producers’ domestic shipments and market share declined steadily in both quantity and value. Correspondingly, the prices for both U.S.- and Canadian‑produced magnesium steadily declined during the period of investigation.

With regard to critical circumstances, the ITC was required to determine whether an imposition of duties, applied on a 90‑day retroactive basis from the date of the final determination, was necessary to prevent the recurrence of material injury caused by a massive import surge over a relatively short period of time. While such a surge occurred in the three‑month period beginning with the month the petition was filed (September 1991), the retroactive imposition of duties would not have covered most of the imports that accounted for the post‑petition surge. Therefore, the ITC concluded that the effectiveness of the anti‑dumping order on pure magnesium would not be materially impaired by a failure to impose retroactive duties, and it accordingly made no determination.

15.2 Key Issues

The petitioner represented only 22% of the U.S. magnesium industry and there was no showing of support by other industry members. Despite these factors, Commerce decided that the petition was filed “on behalf of” the domestic industry. Commerce asserted that neither statute nor legislative history indicated the degree of support that must be shown before Commerce may accept a petition as filed on behalf of domestic industry. Furthermore, judicial decisions have in the past upheld Commerce’s interpretation of “on behalf of” as a permissible interpretation of the statute. (This issue would be settled with the implementation of the Uruguay Round Agreements Act on January 1, 1995.)

Norsk Hydro argued that pure and alloy magnesium should be separated into two classes of merchandise. According to Norsk Hydro, its argument was supported by the factors typically considered by Commerce when making a class or kind determination: (1) physical appearance and characteristics; (2) ultimate use; (3) channels of distribution; and (4) customer perception. The petitioner maintained that pure and alloy magnesium should remain one class or kind. While the two‑class argument was successful on the Commerce side, the ITC rejected it for purposes of determining injury.

15.3 Canada–U.S. Free Trade Agreement Panel Review (Dumping)

On August 10, 1992, NHCI filed a request for a Binational Panel Review of Canada’s final dumping determination. The company identified constructed value calculations for: material costs; depreciation expenses; average wage rates; and selling, general and administrative expenses. After the parties filed their respective briefs for this review, the panel remanded the final determination back to Commerce, upon Commerce’s request, in order to address the issues raised by NHCI. On May 27, 1993, Commerce filed its Redetermination Pursuant to Remand, in which the anti‑dumping duty was reduced from 31.33% to 21%. NHCI was satisfied with respect to redetermined material costs and depreciation expenses, and restricted its appeal to the appropriate wage rates and SGA attributed to NHCI. Best information available was used to calculate these expenses as NHCI had failed to complete the relevant parts of Commerce’s questionnaire. NHCI did not challenge the use of BIA but argued that Commerce should adjust certain elements in the petitioner’s constructed value calculations because they were not reasonably quantified or valued.

On October 6, 1993, the panel upheld Commerce’s BIA methodology, stating that since NHCI chose not to answer the questionnaire, Commerce was justified in making a “reasonable adverse inference” with regard to NHCI’s costs. Furthermore, a determination based on BIA should be upheld if there was reasonable evidentiary support in the record for the BIA.

15.4 Canada–U.S. Free Trade Agreement Panel Review (Injury)

On September 25, 1992, a Binational Panel Review of the ITC’s final affirmative injury determination was requested by NHCI and the Government of Quebec. The Government of Canada subsequently filed a notice of appearance in support of Quebec and NHCI, as the review also related to the simultaneous countervailing duty investigation.

On August 27, 1993, the panel concluded that pure and alloy magnesium constituted two classes of merchandise, and that the record did not support the ITC’s determination that there are significant physical and price similarities between pure and alloy magnesium. Furthermore, the existence of similar distribution channels was found to be of no significance. The panel did concur with the ITC’s determination with regard to the similarities of the core production processes, but it found this similarity insufficient to reasonably conclude that only one like product existed. The panel also took issue with the ITC’s alternative conclusion that, even if two separate products existed, it would have reached an affirmative material injury determination with respect to each of these industries; the panel held that the conclusion was not supported by adequate analysis concerning the impact of imports on the domestic industry. The determination was remanded to the ITC for separate injury determinations for pure and alloy magnesium.

On January 27, 1994, the panel upheld the ITC’s remand finding of injury with regard to pure magnesium. The ITC also found, on remand, that there was no injury with respect to alloy magnesium as it applied to dumping. The panel found that the ITC’s determination, which stated that there was an absolute increase in imports from Canada relative to consumption and a steady decline in prices for both U.S.- and Canadian‑produced alloy magnesium, was adequately stated and supported by substantial evidence. With regard to the impact of imports on domestic producers, the ITC based its determination on several factors: (1) the injury caused by imports from Canada to the U.S. industry as indicated by a high degree of substitutability between imported and domestic magnesium; (2) the relatively inelastic demand for the product; and (3) the significant increase in such imports, coinciding with a decline in market share and revenues for U.S. producers. The complainants argued that non‑price factors in the market were responsible for the growth in imports from Canada and the difficulties experienced by U.S. producers. The panel conceded that there was evidence to support this position, but it held that the ITC had properly acted within its discretion in finding that non‑price factors did not negate the significance of price in buyers’ purchasing decisions.

15.5 Administrative Reviews

Seven administrative reviews have been completed. During the first two administrative reviews, cumulatively covering the period 1992–1994, no U.S. sales were made and thus Commerce determined that there was no basis for re‑assessing duties on these entries. Margins for the last three administrative reviews, cumulatively covering the period 1994–1999, were found to be in the de minimis range for NHCI.

Based on three consecutive years of no dumping, NHCI requested that the order be revoked with respect to its exports of pure magnesium. On March 16, 1999, in its final determination of the administrative review covering the period 1998–1999, Commerce concluded that NHCI did not qualify for revocation of the order on pure magnesium. Commerce determined that NHCI did not sell the subject merchandise in the United States in commercial quantities in any of the three years cited by NHCI to support its request for revocation. Specifically, NHCI made one sale in two of the relevant years and two sales in the other. A volume of one or two sales to the United States during a one‑year period was not consistent with NHCI’s selling activity prior to the order, nor was it consistent with NHCI’s selling activity in the home market. The abnormally low level of sales activity did not provide a reasonable basis for determining that the discipline of the order was no longer necessary to offset dumping.

The last administrative review was conducted in May 2000; the period examined was August 1, 1998, to July 31, 1999. Commerce determined that magnesium sales from NHCI had not been made below normal value.

15.6 Sunset Review

On August 2, 1999, Commerce and the ITC initiated a sunset review of the antidumping and countervailing duty orders on pure and alloy magnesium from Canada. Both Commerce and the ITC determined that they would conduct a full review. On July 5, 2000, Commerce made a final determination that a revocation of the countervailing and anti‑dumping duty orders would be likely to lead to the continuation or recurrence of subsidization and dumping.

With respect to dumping, Commerce determined that Norsk Hydro had eliminated dumping over a period of four consecutive administrative reviews, but it also noted that imports of pure magnesium had declined by 97% in the first year of the order from import levels of pre‑order years, and since then had never reached more than 10% of pre‑order levels. In accordance with statute and regulation, Commerce found that the existence of a zero dumping margin did not require Commerce to find that revocation would not lead to continuation or recurrence of dumping. As for the 21.0% duty rate that it reported to the ITC, Commerce noted that it was directed by the Statement of Administrative Action (Uruguay Round Agreements Act of 1994) to select a rate reflecting the behaviour of exporters without the discipline of the order. Since import volumes had declined so significantly as of the date of the order and since the dumping margin from the original investigation was the only margin calculated for a period in which Norsk was shipping commercial quantities, Commerce concluded that it was necessary to select that specific margin.

As directed by statute, the ITC investigated the likely impact of subject imports on the domestic industry if the orders were revoked. As in the original investigation, the ITC segregated its examination into pure and alloy magnesium, although it did note that both pure and alloy magnesium are very similar and are produced at common production facilities, and that production can easily be switched between the two.

15.6.1 Pure Magnesium

The ITC found that revocation of the anti‑dumping and countervailing duty order as it applied to pure magnesium would be likely to lead to continuation or recurrence of injury to the domestic industry. The ITC noted that there had been significant changes in the U.S. industry with the exit of the largest producer, Dow Chemical, from the market, leaving only two producers, Northwest Alloys and the petitioner, Magcorp. However, the ITC also found that conditions in the U.S. market, which it described as price‑competitive, had not changed since the original investigation. Further, it found that while imports from third countries had increased, a number of factors (including availability, price and quality) limited the ability of such imports to be substitutable for North American products. The ITC also noted the imminent entry of Canadian firm Magnola into the market, which at full capacity would be the largest North American producer, and it observed that Magnola had already began to solicit U.S. customers. Regarding likely volume of imports, the ITC noted the significant market share that Norsk Hydro was able to achieve prior to the order, the substantial additional capacity to be added by Magnola and Norsk (with plans by the latter to double capacity within two years), the two companies’ ability to shift from alloy to pure magnesium, and their proximity to the U.S. market; according to the ITC, all these factors supported the view that imports would increase significantly absent the order. Regarding price, the ITC noted the significant price declines prior to the imposition of the original orders, the likelihood that Magnola would lower prices to gain U.S. customers, and the recent trend toward contracts of no more than one year. All of these trends led the ITC to conclude that revocation would be likely to lead to underselling and price suppression. As for the impact of these factors on the U.S. industry, which had made recent efforts to improve its competitiveness, the ITC concluded that price and volume declines by U.S. producers, combined with a stagnant U.S. market for pure magnesium, would have a negative effect on the industry’s production, sales and revenue levels, as well as its ability to raise capital and employment levels.

15.6.2 Alloy Magnesium

The ITC found that the flexibility of Canadian producers, enabling them to switch from pure to alloy magnesium, was such that if the order on one product was revoked, they would simply increase exports of that product. The significant market presence of subject imports from Canada, the stated focus of both Norsk and Magnola on the alloy market, their ability to shift production from one product to another, their size and proximity all argued for the conclusion that there would be a significant increase in imports from Canada if the order was revoked. Regarding price, the ITC repeated much of the reasoning used in its analysis for the pure magnesium market but added that a small change in pricing would have an effect. As for the overall impact of imports from Canada, the ITC concluded, as it did regarding pure magnesium, that revocation of the orders would result in losses in sales by the domestic industry and price suppression in the U.S. market. Revocation, the ITC concluded, would adversely impact the industry’s production, sales and revenue levels, which in turn would have an adverse effect on the industry’s profitability, its ability to raise capital, and ultimately employment levels.

Based on this analysis, the ITC made an affirmative determination and the order was continued.

15.7 Canadian Government Activity

The Government of Canada invested most of its efforts in helping the Government of Quebec and Norsk Hydro to present a defence of the government programs involved in the concurrent countervailing duty investigation. It also assisted in attempts to negotiate a suspension agreement and to have a changed circumstances investigation initiated. In the years after the order went into effect, the Government of Canada made a number of specific representations regarding elements of the various administrative reviews conducted by Commerce on Norsk Hydro.

16. Ball Bearings, Mounted or Unmounted, from Canada (and Argentina, Austria, Brazil, Hong Kong, Hungary, Mexico, People’s Republic of China, Poland, Korea, Spain, Taiwan, Turkey and Yugoslavia)

16.1 Case History

On February 13, 1991, Commerce and the ITC received a petition filed by Torrington Co. of Torrington, Connecticut, alleging injurious dumping of ball bearings from Canada. After investigation was initiated, the ITC released a negative preliminary determination on April 10, 1991, and the investigation was subsequently terminated with respect to all countries. The ITC found that increases in shipments, employment, compensation and consistent profitability demonstrated that the U.S. ball bearing industry was in good condition. This was confirmed by the lack of any serious erosion of the industry’s market share despite significant increases in imports. Moreover, the industry was able to devote increasing sums to capital and R&D expenditures, and had significantly increased capacity in recent years. On the basis of these factors, the ITC concluded that there was no reasonable indication of material injury to the domestic industry.

For the purposes of threat analysis, the ITC did not cumulate imports from the 14 subject countries, citing the lack of uniformity in pricing trends and the extremely low market shares of the majority of the countries. Canadian penetration of the U.S. market decreased during the period of investigation, and the prices of imported Canadian ball bearings generally increased substantially. In light of the downward trend in market penetration, high capacity utilization rates and the lack of a discernible effect on U.S. prices, the ITC concluded that there was no reasonable indication of a threat by reason of dumped imports from Canada.

16.2 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note supporting the position that there was no evidence of harm caused to the U.S. industry by imports from Canada.

17. Nepheline Syenite from Canada

17.1 Case History

On July 12, 1991, Commerce and the ITC received a petition filed by Feldspar Corporation of Asheville North Carolina. After an investigation was initiated, the ITC issued a preliminary affirmative determination on September 5, 1991, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of nepheline syenite from Canada. On September 19, 1991, Unimin, the respondent, proposed a suspension agreement. On November 20, 1991, Unimin submitted a draft suspension agreement for Commerce to consider. A suspension agreement was not ultimately concluded.

On December 27, 1991, Commerce issued a preliminary affirmative determination and ordered a suspension of liquidation of imports. Pittsburgh Corning, an interested party in the investigation, claimed that the petitioner lacked standing because it was not a manufacturer of a like product, despite the ITC’s finding to the contrary. Commerce agreed that it was not bound by the ITC’s determination of like product but it found no basis to disagree with the ITC’s determination.

On March 17, 1992, Commerce released a final affirmative determination. Commerce amended the scope of the investigation after soliciting comments from interested parties. The following margins were issued:

Producer/Manufacturer/ExporterWeighted Average Margin
Unimin Corp.9.36%
All Others9.36%

On May 6, 1992, the ITC released a negative final determination, and the investigation was subsequently terminated. A portion of the hearing was held in camera because most of the information collected by the ITC was business proprietary information. Because of the presence of “appropriate circumstances” (as previously identified by Commerce), the ITC conducted a regional industry analysis. Such circumstances involve injury in an industry located in an area in which production is necessarily isolated and insular. Canadian imports were found to be sufficiently concentrated within the Northeast Corridor region to warrant a regional industry injury determination. Unlike the case of a national industry analysis, in order for the ITC to arrive at a finding of injury, “all, or almost all” of the production within the region must be materially injured by reason of the subject imports.

Despite the historically high volume of imports in the Northeast Corridor region, there was no indication that dumped imports depressed or suppressed domestic prices, reduced domestic volume or resulted in lost sales. Therefore, the regional industry was not materially injured by reason of dumped imports. There was found to be no threat of material injury to the regional industry because Unimin’s share of the regional market had declined overall, while exports to non‑U.S. markets accounted for an increasing share of its shipments. Nothing on the record indicated that there would be a change in this consistent trade pattern. Furthermore, Unimin’s production capacity had increased slightly while its inventory levels were nearly non‑existent throughout the period of investigation. There was no indication that future imports would have a discernible adverse impact on domestic prices.

17.2 Key Issues

The petitioner asserted that commission payments made by Unimin to its U.S. parent should be the basis for a price adjustment because they were directly related to the sales in question. Petitioner argued that the payments met the arm’s‑length transaction test set by the U.S. Court of Appeal, which requires consideration of the full circumstances of the transaction in question. Commerce did not deduct the commission in question as there was no evidence to suggest that the commission was in fact an arm’s‑length payment for services rendered. Commerce rejected the petitioner’s argument that Unimin improperly allocated leased railcar costs by allocating the total lease cost over total tonnage shipped, rather than by allocating total cost over the number of days that leased cars were in service. Commerce concluded that it would be unduly burdensome to require Unimin to provide the information in the manner proposed by the petitioner.

17.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note supporting the position that there was no evidence of injury to the U.S. industry caused by imports from Canada.

18. Steel Wire Rope from Canada

18.1 Case History

On June 28, 1991, the Committee of Domestic Steel Wire Rope and Speciality Cable Manufacturers filed a petition alleging injurious dumping of steel wire rope from Canada.

After an investigation was initiated, on August 21, l991, the ITC released a negative preliminary determination and the investigation was subsequently terminated. The ITC found that capacity, production, capacity utilization, domestic shipments and employment indicators were all basically steady throughout the review period, with slight dips and rises from year to year. At the same time, the domestic industry’s financial indicators improved steadily. Although a comparison of the interim 1990 and 1991 data showed some downward movement, these changes were marginal and seen as typical of the slight up‑and‑down trend during the three‑year period of investigation.

Furthermore, the ITC found no causal link between the condition of the domestic industry and the cumulated subject imports from Canada and the six other countries subject to concurrent investigations. The cumulated market share of the subject imports was relatively small and any increase during the period of investigation was attributable to displacement of Korean products, which were not subject to investigation. The ITC concluded that although there was evidence of underselling by the subject imports, there was no reasonable indication of material threat by reason of allegedly dumped imports from Canada. There was no indication that the imports would have a depressing or suppressing effect on U.S. prices, which in fact increased during the period of investigation. Furthermore, the record did not indicate that there had been sales lost, or revenues reduced, as a result of Canadian imports.

18.2 Key Issues

Based on the commonality of production processes and facilities, the overlap of general uses, and employee/producer/customer perceptions, the ITC determined that the like product consisted of all steel wire rope regardless of composition or end use. The domestic industry was found to be composed of all producers of steel wire rope.

18.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note supporting the position that there was no evidence of injury to the U.S. industry caused by imports from Canada.

19. Potassium Hydroxide, Liquid and Dry, from Canada (and Italy and United Kingdom)

19.1 Case History

On January 2, 1992, LinChem, Inc. of Ashtabula, Ohio, filed a petition alleging injury from dumped imports from three countries. After an investigation was initiated, on February 26, 1992, the ITC released a negative preliminary determination and the investigation was subsequently terminated.

The ITC found that increases in domestic production, shipments, consumption, compensation and overall profitability demonstrated that the U.S. industry was in good condition. The expansion by some domestic producers increased competition and had an adverse effect on other domestic potassium hydroxide producers. Moreover, the industry overall had devoted significant sums to capital expenditures.

The ITC found that even if the domestic industry had been injured, such injury was not “by reason of” cumulated allegedly dumped imports from Canada, Italy and the United Kingdom. Most important, market penetration levels were very low and subject imports were not significant in volume. In addition, the collected pricing data did not show any significant import underselling. On the basis of these factors, the ITC concluded that there was no reasonable indication of material injury to the domestic industry. Furthermore, it found no reasonable indication that future imports would have a discernible adverse impact on domestic prices in the near future. Accordingly the ITC concluded that there was no reasonable indication of threat of material injury.

19.2 Canadian Government Activity

Aside from monitoring and general advice to industry representatives involved in the investigation, no specific interventions were made by the Canadian government.

20. Medium Voltage Underground Distribution Cable from Canada

20.1 Case History

On January 31, 1991, Commerce and the ITC received a petition filed by the U.S. Cable Trade Action Group, a trade association. After an investigation was initiated, on March 25, 1992, the ITC released a negative preliminary determination and the investigation was subsequently terminated. During the period of investigation, decreases occurred in net sales, operating income, U.S. producers’ domestic shipments and employment. However, the ITC attributed these declines to the poor state of the U.S. housing market rather than Canadian imports; it noted that the domestic producers’ market share remained consistently greater than 95%. The majority of the responding domestic producers stated that Canadian imports had not had any actual negative effects on their investment, ability to raise capital, or existing development and production efforts. Furthermore, the Canadian producers had little capacity to increase their level of exports to the United States. The ITC concluded that the record as a whole contained clear and convincing evidence that there was neither material injury nor threat of material injury by reason of allegedly dumped imports from Canada.

20.2 Canadian Government Activity

Aside from monitoring and general advice to industry representatives involved in the investigation, no specific interventions were made by the Canadian government.

21. Certain Flat‑Rolled Carbon Steel Products from Canada (and 19 Other Countries)

21.1 Case History: Original Investigation

On June 30, 1992, Commerce and the ITC received a petition filed by the following companies: Armco Steel Co., L.P.; Bethlehem Steel Corp.; Geneva Steel; Gulf States Steel, Inc. of Alabama; Inland Steel Industries, Inc.; Laclede Steel Co.; LTV Steel Co., Inc.; Lukens Steel Co.; National Steel Corp.; Sharon Steel Corp.; USX Corp./U.S. Steel Group; and WCI Steel, Inc. All alleged that the dumping and subsidization of imports of four specific flat‑rolled steel products153 from 20 countries,154 including Canada, were injuring U.S. industry. The investigations were initiated on July 20, 1992.

On August 21, 1992, the ITC issued a preliminary affirmative determination, finding that there was a reasonable indication of material injury to the U.S. industry by reason of allegedly dumped imports of all four carbon steel flat products from all named countries, including Canada.

On February 4, 1993, Commerce released an affirmative preliminary dumping determination, which it subsequently amended on March 18, 1993. Five Canadian companies,155 representing at least 60% of the subject merchandise exported from Canada during the period of investigation, were individually investigated and assessed individual preliminary anti‑dumping duty margins.

On June 21, 1993, after several postponements, Commerce released its final affirmative dumping determination. Commerce collapsed Stelco with its related party, Continuous Colour Coat (CCC), and collapsed Dofasco with its related party, Sorevco. Further, because of the inadequacy of questionnaire responses, best information available was used for Stelco’s plate sales, and partial BIA was applied with respect to the company’s cold‑rolled, hot‑rolled, and corrosion‑resistant steel sales. Partial BIA was also applied to certain sales of cold‑rolled steel by Cold Metal Products, certain of Sidbec‑Dosco’s hot‑rolled, cold‑rolled and corrosionresistant steel sales, and certain of IPSCO’s hot‑rolled steel sales. Following allegations by petitioners, cost‑of‑production investigations were conducted with respect to all of the companies.

On August 18, 1993, the ITC made its final injury determination. While it found that the U.S. industry was injured or threatened with injury by reason of dumped imports of cut‑to‑length steel plate and corrosion‑resistant sheet from Canada, it made a negative finding with respect to imports of hot‑rolled and cold‑rolled steel from Canada.

For both plate and corrosion‑resistant steel, the ITC determined that it was appropriate to cumulate the exports from all of the investigated countries because it found a reasonable overlap in competition between the imports of the various countries and the domestic like product. On plate, the ITC found evidence of significant underselling and price depression or suppression by the cumulated imports. Unit production costs for domestic plate producers rose steadily while the market prices for plate declined, resulting in significant loss of profitability for the domestic industry. The underselling and increasing volume of imports contributed to the inability of U.S. producers to increase their prices.

On corrosion‑resistant steel, the ITC found that while the recession of the early 1990s had had some effect on the performance of the U.S. industry, prices for corrosion‑resistant plate continued to decline even after the recession began to recede. Because of the significant volume and price effects of the cumulated imports, the ITC found the domestic industry to be materially injured by reason of the cumulated imports. The ITC rejected the respondents’ argument that Canadian imports, which are sold primarily in the automotive and appliance sector, did not compete in the same channels of distribution as the imports of the other investigated countries. The ITC also rejected the respondents’ argument that purchasers preferred Canadian over U.S. products because of differences in quality.

Average margins were calculated of 61.95% for plate and 22.29% for corrosionresistant steel; Stelco (plate and corrosion‑resistant), Dofasco (corrosionresistant) and IPSCO (plate) were assessed specific margins. Following review by a Binational Panel established under Chapter 19 of the Canada–U.S. Free Trade Agreement, average margins were revised to 61.88% for plate and 18.71% for corrosion‑resistant steel.

Following the original finding on corrosion‑resistant steel, there has been a succession of administrative reviews and other proceedings, including scope determinations, remand determinations further to FTA/NAFTA panel findings, and partial revocations. The most recently completed administrative review of the order regarding corrosion‑resistant steel covered the period from August 1997 to July 1998, and was issued on March 30, 2000. It assessed the following margins for that period: 1.01% for Continuous Colour Coat, 0.20% for Dofasco, 5.65% for National Steel, and 4.24% for Stelco. On September 8, 2000, Commerce published the preliminary results of its administrative review for the period from August 1998 to July 1999. It determined dumping margins of 2.94% for Continuous Colour Coat and 0.51% for Dofasco. No other specific margins for National Steel and Stelco were calculated in this review, both companies having requested that the review be rescinded with respect to their sales.

21.2 Changed Circumstances Reviews

On November 3, 1995, Sidbec‑Dosco and Canberra Industries requested that Commerce conduct a changed circumstances administrative review to determine whether to partially revoke the order with regard to cobalt‑60‑free cut‑to‑length carbon steel plate. On November 13, 1995, the petitioners informed Commerce that they did not object to the changed circumstances review. On November 30, 1995, Commerce published a notice of initiation and preliminary result of a changed circumstances anti‑dumping duty administrative review to determine whether to revoke the order in part. Commerce received no comments from interested parties, and consequently revoked the order in part on February 28, 1996.

Pursuant to a subsequent request by a U.S. product, Commerce revoked the order in part with respect to Canadian imports of other types and sizes of certain cut‑to‑length carbon steel plate that is free of cobalt‑60 and other radioactive nuclides (cobalt‑60‑free carbon steel plate), on March 29, 1999. The petitioners indicated that they had no interest in the importation or sale of this particular product.

21.3 Scope and Anti‑Circumvention Inquiries

On March 14, 1997, Commerce initiated a scope inquiry to determine whether certain cut‑to‑length carbon steel plate used to make grader blades and draft keys containing small amounts of boron (approximately 0.0016% by weight) fell within the scope of the order on certain cut‑to‑length carbon steel plate from Canada. On January s16, 1998, Commerce concluded that, because the petition relied on the Harmonized Tariff Schedule (HTS) definition of carbon steel, which excluded other‑alloy steel (i.e. steel containing more than 0.0008% boron), and because the petition equated the term “carbon steel” with the HTS term “non‑alloy steel,” variants of grader blade and draft key steel containing at least 0.0008% boron by weight fell outside the scope of the order.

On January 30, 1998, Kentucky Steel requested that Commerce conduct an anticircumvention inquiry to determine whether imports of certain cut‑to‑length steel plate—used to make grader blades and draft keys containing small amounts of boron (approximately 0.0016% by weight), and falling within the physical dimensions outlined in the scope of the order—were circumventing the antidumping duty order on certain cut‑to‑length carbon steel plate from Canada. According to Kentucky Steel, the inclusion of 0.0016% boron by weight in highcarbon grader blade and draft key steel constituted a minor alteration. On May 20, 1998, Commerce initiated a formal anti‑circumvention inquiry; this ended on January 24, 2001, with a final determination stating that certain blade and draft key steel were circumventing the anti‑dumping duty order and therefore, were included within the scope of the order.

21.4 Canadian Government Activity / Key Issues

Prior to the filing of the petitions on June 30, 1992, the Canadian government and Canadian steel producers expended considerable effort to ensure that restrictions, including anti‑dumping duties, were not introduced at the border. Given the scope and complexity of the investigations, key issues and government activities are here discussed together. The issues involved the following elements:

  1. Ensuring that the U.S. administration and industry clearly understood that Canada had no intention of acquiescing with either formal or informal restraints on exports of steel to the United States, and that in the integrated North American market envisaged by the Free Trade Agreement, market forces alone should determine Canada’s share of the U.S. steel market. This theme was aggressively pursued with the administration and Congress at the highest levels.
  2. Efforts by the government, working closely with the Canadian industry, to ensure that the then‑new U.S. administration and Congress were considering the steel issue on the basis of the facts of the Canada–U.S. steel trade.
  3. Coordinated government‑industry efforts to mobilize opposition in the United States to restrictions on imports of steel from Canada. This effort was coordinated through the Canadian consulates in the United States.

In pursuing this action plan to safeguard access for Canadian steel to the U.S. market, a number of specific themes were developed. They included the following:

  1. Trade restrictions on imports from Canada, whether formal or informal, would be contrary to the provisions of the Canada–U.S. Free Trade Agreement.
  2. Canadian steel exports were running at slightly over 3% of the U.S. market—the same level as in 1984, when the voluntary restraint agreements (VRAs) with many other countries were first concluded. Canada had not been asked for a VRA in 1984, and the Canadian industry had lived up to its commitment not to exploit a situation in which other steel suppliers were restrained.
  3. In an integrated North American market, Canada’s share in the U.S. market should be determined by market forces. A surge in Canadian exports was, however, unlikely as the increased value of the Canadian dollar had made our exports less competitive in the U.S. market.
  4. Blanket filings of unfair trade cases against the full range of Canadian steel products would be flagrant abuse of legitimate trade remedy action. Canada recognized, however, that a specific petition could be brought against a particular Canadian product, and was prepared to contest such a petition on its merits.

In the wake of the expiration of the U.S. Steel Program in the spring of 1992 (the original 1984 program having been extended in 1988), prospects increased for the massive filing of petitions for anti‑dumping and/or countervailing duty action. To persuade industries in both countries not to take such action or to discontinue actions already initiated (between 1992 and 1994, the Canadian steel industry successfully petitioned for trade action on the same flat‑rolled steel products as did its U.S. counterparts in 1992), industries in both countries were encouraged to successfully conclude a North American Steel Sector Agreement, providing new trade remedy rules for the steel trade between the two countries. Through direct representations by both industries, their workers and the Government of Canada, efforts were made to convince potential U.S. allies to discontinue the trade actions. Contacted as principal advocacy targets were U.S. suppliers of goods and services to the Canadian steel industry, U.S. customers for Canadian steel, members of Congress and State legislatures representing districts benefiting from the Canada–U.S. steel trade, and U.S. steel producers caught in the simultaneous Canadian investigations.

Once the anti‑dumping duty investigations themselves were initiated by Commerce, there were numerous personal contacts by the Canadian Embassy in Washington, D.C., with Commerce officials on key issues of concern to Canadian exporters caught in the investigations.

Among the more notable representations, Minister Wilson and other ministers (including the Prime Minister) raised the steel issue with their counterparts in both the Bush and Clinton administrations on numerous occasions in the first six months of 1992.

In addition to informal contacts between the Embassy and Commerce in particular, the Government of Canada made a number of formal representations on various elements of the steel investigations. These included the following:

  • In a June 26, 1992, letter to Deputy U.S. Trade Representative Moscow, the Canadian Embassy provided a document developed by the Canadian steel industry on possible elements of a potential Canada–U.S. steel accord.
  • On July 17, 1992, the Embassy delivered a diplomatic note urging Commerce to dismiss petitions for anti‑dumping investigations on imports of flat‑rolled steel from Canada.
  • On October 8, 1992, the Embassy submitted a letter to Commerce supporting the Department’s proposal to exclude certain classes of merchandise from the investigations.
  • On October 14, 1992, the Embassy submitted a letter to Commerce urging a deadline extension for submission of the questionnaire responses.
  • On December 8, 1992, the Embassy submitted a letter to Commerce objecting to the proposed expansion of the scope of investigations to include non‑rectangular products.
  • On December 11, 1992, Minister Wilson sent a letter to U.S. Trade Representative Hills proposing a blue‑ribbon binational panel on the Canada–U.S. steel trade.
  • On December 16, 1992, the Embassy submitted a letter to Commerce urging the use of continuous entry bonds for imports from Canada should preliminary determinations be made and provisional duties be applied.
  • On February 17, 1993, Minister Wilson submitted letters to U.S. Trade Representative Kantor and Commerce Secretary Brown, again proposing a binational panel on the Canada–U.S. steel trade.
  • On February 19, 1993, the Embassy submitted a letter to Commerce urging the issuance of amended preliminary determinations of dumping in cases where ministerial errors had been made, and seeking an extension of the deadline for responses to cost‑of‑production questionnaires.

In addition, after the imposition of anti‑dumping duties on U.S. imports of steel plate and corrosion‑resistant steel in 1993, the Canadian Embassy continued to make representations regarding the conduct of subsequent administrative reviews of the orders on plate and corrosion‑resistant steel. Between 1995 and 2000, almost two dozen such representations were made on issues such as the liquidation of entries by resellers, verification standards and the treatment of transactions between related parties.

21.5 Sunset Review: Plate and Corrosion‑Resistant Steel

On September 1, 1999, Commerce and the ITC initiated a sunset review of the countervailing and anti‑dumping duty orders on plate and corrosion‑resistant steel from a number of countries,156 including Canada, as part of a grouped review of the 1993 orders on four flat‑rolled steel products.157 Both Commerce and the ITC determined that they would conduct a full review of the anti‑dumping duty order on plate and corrosion‑resistant steel from Canada.

On July 27, 2000, Commerce determined that revocation of the anti‑dumping duty order on imports of plate and corrosion‑resistant steel from Canada would be likely to lead to continuation or recurrence of dumping. In addition, Commerce determined that while respondents’ anti‑dumping duty margins had fallen significantly since the assessment of margins in the original investigation, it still reported the anti‑dumping duty margins of the original investigation to the ITC.

According to Commerce, imports of corrosion‑resistant steel decreased dramatically immediately after the issuance of the order in 1993. Furthermore, it found that the share of the U.S. market accounted for by Dofasco, which was responsible for over 50% of the imports from Canada, had decreased and that Dofasco itself had not demonstrated or argued that its market share had increased or even remained constant despite the fact that its anti‑dumping duty margin had fallen to a de minimis level in the intervening years. Accordingly, on the basis mainly of the declining market share achieved by Dofasco since the order went into effect, Commerce concluded that the original margins reflected the behaviour of the respondents absent the discipline of the order. Furthermore, Commerce found that in the 1995–1996 and 1997–1998 administrative reviews, Dofasco (1995–1996 only), Stelco and Continuous Colour Coat had absorbed duties. Consistent with Commerce policy to adjust margins in sunset reviews to reflect duty absorption findings, Commerce reported the original rates as those likely to prevail if the order were revoked.

After its investigation, the ITC found that subject imports from all named countries had remained in the U.S. market since the orders were imposed, that the corrosion‑resistant steel producers in the subject countries devoted considerable resources to export markets, and that excess capacity was available in each of the subject countries. It found that a likelihood existed that even a small post‑revocation increase in imports from each of these countries into the United States would have a discernible impact on the domestic corrosion‑resistant steel industry. The ITC also found that the conditions of competition in the U.S. market were not likely to change significantly in the foreseeable future and that therefore the current market conditions for corrosion‑resistant steel provided a basis for assessing the likely effects of revocation of the anti‑dumping duty orders within the foreseeable future.

In its assessment of the likelihood of the recurrence of material injury, the ITC first considered the likely volume of subject imports. It concluded that there was substantial excess capacity in the subject countries, that the producers in the subject countries relied heavily on export markets158 and had an incentive to utilize production because of high fixed production costs, and that they were therefore likely to commence significant exports to the United States in the event that the orders were revoked. Furthermore, the ITC concluded that the increased sales of imported corrosion‑resistant steel would most likely be achieved by means of aggressive pricing. Cumulatively, the increased imports would result in significant effects on domestic prices, including the significant underselling of the domestic like products, and price depression and suppression.

The ITC examined the likely impact of the cumulated subject imports and concluded that the domestic industry was vulnerable to material injury if the orders were revoked. It examined net sales volumes and values, operating income, capacity utilization, unit sales values, cost of goods sold, and operating margins. It found that the domestic industry was in a weakened state. It concluded that the price and volume declines that the domestic industry would be likely to experience would have a significant adverse impact on the production, shipment, sales and revenue levels of the domestic industry. This would affect the industry’s profitability, ability to raise capital and ability to maintain the necessary level of capital investments, and would be likely to result in commensurate employment declines.

On this basis, the ITC concluded that the revocation of the anti‑dumping orders concerning corrosion‑resistant steel, including the order relating to Canada, would be likely to have a significant adverse impact on the domestic industry within a reasonably foreseeable time. The order was therefore continued with regard to corrosion‑resistant steel by the ITC determination of December 1, 2000.

However, on the same date the ITC determined that revocation of the antidumping duty order on carbon steel plate was not likely to cause injury to an industry in the United States within a reasonably foreseeable time. The order was therefore revoked.

22. Certain Steel Wire Rod from Canada (and Brazil, Japan, and Trinidad and Tobago)

22.1 Case History

On April 23, 1993, Commerce and the ITC received a petition filed by the following companies: the Connecticut Steel Corp. of Wallingford, Connecticut; North Star Steel, Texas, Inc. of Beaumont, Texas; Keystone Steel & Wire Corp. of Peoria, Illinois; Raritan River Steel Company of Perth Amboy, New Jersey; and Georgetown Steel Corp. of Georgetown, South Carolina. After an investigation was initiated on November 29, 1993, the ITC issued a preliminary affirmative determination finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of steel wire rod from Canada, Brazil and Japan (Trinidad and Tobago was dropped from the investigation).

On November 29, 1993, Commerce issued a preliminary affirmative determination and ordered a suspension of liquidation of imports from Canada, Brazil and Japan. On April 20, 1994, Commerce released an affirmative final determination with respect to Canada, in which the following margins were established.

Producer/Manufacturer/ExporterWeighted Average Margin
Ivaco Inc.10.25%
Stelco Inc.13.20%
All Others11.36%

On February 9, 1994, Commerce released an affirmative final determination with respect to Brazil and Japan. On April 6, 1994, the ITC released an affirmative final injury determination with respect to Brazil and Japan.

On May 4, 1994, Commerce terminated the investigation regarding Canada upon the petitioner’s withdrawal of the petition. On May 10, the ITC terminated its investigation.

22.2 Key Issues

Ivaco and Stelco asserted that statute and judicial precedent required that, in determining fair market value, if Commerce found sales of the identical or most similar product to be below cost of production, Commerce should use the next most similar product to determine fair market value, rather than immediately resorting to constructed value. Commerce disagreed with the respondents, stating that whether a model is sold in the home market at below‑cost prices is not a criterion for determining what is the most similar merchandise under the statute.

22.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note questioning the evidence of injury from Canadian imports included in the petition. The Canadian government also monitored the investigation and gave general advice to industry representatives involved in it.

23. Certain Steel Wire Rod from Canada (and Germany, Trinidad and Tobago, and Venezuela)

23.1 Case History

On February 26, 1997, a petition alleging injurious dumping of steel wire rod from Canada was filed by the following companies: Connecticut Steel Corp. of Wallingford, Connecticut; North Star Steel Texas of Beaumont, Texas; Co‑Steel Raritan of Perth Amboy, New Jersey; Keystone Steel & Wire Co. of Peoria, Illinois; and GS Industries of Georgetown, South Carolina. After an investigation was initiated, the ITC issued a preliminary affirmative determination on April 30, 1997, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of steel wire rod from the named countries.

On October 1, 1997, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports from the named countries. On February 23 and 24, 1997, Commerce released affirmative final determinations with respect to the named countries. The dumping margins for Canadian companies were as follows:

Producer/Manufacturer/ExporterWeighted Average Margin
Ispat‑Sidbec Inc.11.94%
Ivaco Inc.6.95%
Stelco Inc.0.91%
All Others11.62%

Ivaco’s rate was amended by Commerce on April 1, 1998, to account for the exclusion of wire rod used for manufacturing Class III pipe wrapping wire from the scope of the investigation.

On March 25, 1998, the ITC released a negative final determination with respect to imports from all the named countries. For the purposes of its determinations with respect to Canada, Germany, Trinidad and Tobago, and Venezuela, the ITC cumulated dumped imports from all four subject countries. Despite the rising volume and market share of imports, most notably between 1995 and 1996, the ITC did not find the volume of imports or the increase in volume to be significant either in absolute terms or relative to production or consumption in the United States. Moreover, it found that the domestic industry was not able to satisfy all domestic demand for certain steel wire rod. The ITC further concluded that there was no causal connection between prices for subject imports and the declines in domestic producers’ prices that occurred between mid‑1995 and mid‑1996.

The ITC did not find the frequency or the margins of underselling by the subject imports to be significant, nor price always to be the determining factor in making a sale. The ITC did not find that the subject imports depressed domestic prices for wire rod to a significant degree. While the domestic industry’s financial performance declined precipitously between 1995 and 1996, the ITC stated that it could not attribute this condition to subject imports.

The ITC determined that the domestic industry was not threatened with material injury by reason of subject imports on the basis of: (1) a continuous decline in subject import volumes since 1996; (2) foreign producers’ lack of additional or unused productive capacity; (3) lack of potential for product shifting; and (4) lack of any other demonstrable adverse trends indicating the likelihood of material injury to the domestic industry by reason of the subject imports.

23.2 Key Issues

Petitioners argued that Stelco reported home market sales of subject merchandise that were neither made in commercial quantities nor made in the ordinary course of trade. Commerce rejected the petitioners’ assertion, finding that in fact over 10% of Stelco’s home market sales were of quantities comparable to the sale of a product subject to the petition. Therefore, there was nothing aberrational about such sales.

Commerce agreed with Stelco that the company’s capital tax credit should be included in the general and administrative expense calculation, but it did not agree with Stelco that the total amount of the capital tax credit should be included in the calculation of general and administrative expenses. Instead, Commerce included the capital tax credit only to the extent of Stelco’s current capital tax expenses.

Commerce conducted a level of trade adjustment with respect to Ivaco’s sales after examining the selling functions performed by IRM and Sivaco (both owned by Ivaco) at each stage in the marketing process and identifying substantial differences in the services performed. Commerce concluded that these were attributable to selling at different points in the chain of distribution. The LOT methodology was applied to all above‑cost home market sales. Commerce did not perform a difference‑in‑merchandise adjustment, as requested by the respondents, as LOT adjustments were intended to address differences in services provided, not differences in products.

23.3 Canadian Government Activity

Since this case investigation also involved allegedly countervailable subsidies, it is difficult to isolate Canadian government participation in the anti‑dumping case. Aside from monitoring and general advice to industry representatives involved in the investigation, no specific interventions were made by the government.

24. Certain Stainless Steel Plate from (Canada and Belgium, Italy, Korea, South Africa and Taiwan)

24.1 Original Investigation

On March 31, 1998, Commerce and the ITC received a petition filed on behalf of the following companies: Armco, Inc. of Pittsburgh, Pennsylvania; J&L Specialty Steel, Inc. of Pittsburgh, Pennsylvania; Lukens Inc. of Coatesville, Pennsylvania; North American Stainless of Ghent, Kentucky; and the United Steelworkers of America, AFL‑CIO‑CLC. The petition alleged material injury by reason of subsidized and/or dumped imports of hot‑rolled and cold‑rolled steel from Belgium, Canada, Italy, Korea, South Africa and Taiwan.

After an investigation was initiated, the ITC issued a preliminary affirmative determination on June 4, 1998, finding a reasonable indication that an industry producing certain hot‑rolled stainless steel plate in coils in the United States was materially injured by reason of imports of certain hot‑rolled stainless steel plate in coils from Belgium, Canada, Italy, Korea, South Africa and Taiwan. On November 4, 1998, Commerce issued a preliminary determination of dumping regarding imports from the named countries. On March 31, 1999, Commerce issued its final determination of dumping, in which it assessed the following margins (based entirely on “facts available” since the Canadian producer/exporter refused to respond to the questionnaire):

Producer/ExporterWeighted Average Margin
Atlas Stainless Steel15.35%
All Others11.10%

On May 12, 1999, the ITC made a final negative injury determination for imports of certain cold‑rolled stainless steel plate in coils from Belgium and Canada. The ITC further made the determination that imports of cold‑rolled stainless steel plate from Italy, Korea, South Africa and Taiwan were negligible. The ITC determined that during the period under investigation, both the Belgian and Canadian producers operated at high rates of capacity utilization and had no plans for capacity expansion in the near future. Consequently, the ITC found that further dumped or subsidized imports were not imminent. The ITC did not find that the subject imports (despite their rising volumes, large market share and declining average unit values) had an adverse effect on the domestic industry.

The ITC did, however, find that the U.S. industry producing hot‑rolled stainless steel plate was materially injured by subsidized imports from Belgium, Italy and South Africa, and by dumped imports from Belgium, Canada, Italy, Korea, South Africa and Taiwan. The ITC found that over the period of investigation, the volume of imports increased dramatically, outpacing the increase in consumption. Even while domestic consumption increased over the period of investigation, the ITC found that the U.S. industry’s market share did not increase. The ITC found the volume of imports to be significant. The ITC also found that the price of imports was lower at the end of its investigation than it was at the beginning, reaching lowest levels for the period in 1998—the same time when the market share of imports was at its peak. The ITC found that the imports caused domestic sales values to decline. Imports forced the domestic industry to lower prices, to such an extent that it was unable to maintain profitability.

24.2 Key Issue

The ITC did find a single domestic like product in its preliminary investigation, but indicated at that time that it would reconsider the like product issue in its final determination. In particular, it considered whether to include stainless steel sheet and strip as domestic like product, and whether hot‑rolled and cold‑rolled stainless steel plate should be considered separate domestic like products. The ITC eventually concluded that, as no new information had been tabled since the preliminary investigation, there was no basis for altering the preliminary determination that stainless steel sheet and strip not be included in the scope of the domestic like product.

With respect to hot- and cold‑rolled stainless steel plate, the ITC concluded that they should be considered separate domestic like products on the basis of its application of a six‑factor test. The six factors examined were: physical characteristics and uses; interchangeability; channels of distribution; customer and producer perceptions; manufacturing facilities, production processes and production employees; and prices. Given the differences outlined in the six‑factor test, the ITC concluded that hot‑rolled and cold‑rolled plate were two separate domestic like products for the purposes of its investigation.

24.3 Canadian Government Activity

The Government of Canada monitored the investigation. However, since the only Canadian company with an interest in the investigation did not cooperate with or make any responses to Commerce or the ITC, the government did not make any representations on this basis.

25. Certain Stainless Steel Round Wire Rod from Canada (and India, Japan, Korea, Spain and Taiwan)

25.1 Case History

On March 27, 1998, Commerce and the ITC received a petition filed by the following companies: ACS Industries of Woonsocket, Rhode Island; Al Tech Specialty Steel Corp. of Dunkirk, New York; Branford Wire & Manufacturing Co. of Mountain Home, North Carolina; Carpenter Technology Corp. of Reading, Pennsylvania; Handy and Harmen Specialty Wire Group of Cockeysville, Maryland; Industrial Alloys of Pomona, California; Loos & Company of Pomfret, Connecticut; Sandvik Steel Company of Clark Summit, Pennsylvania; Sumiden Wire Products Corp. of Dickson, Tennessee; and Techalloy Company of Mahwah, New Jersey. After an investigation was initiated on June 18, 1998, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of allegedly dumped imports of steel round wire from all of the named countries.

On November 18, 1998, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports from Canada, India, Japan, Spain and Taiwan. On April 9, 1999, Commerce released an affirmative final determination with respect to Canada, India, Japan, Spain and Taiwan. Canadian company dumping margins were as follows:

Producer/Manufacturer/ExporterWeighted Average Margin
Central Wire10.25%
Greening Donald13.20%
All Others11.36%

On May 26, 1999, the ITC released a negative final determination. The ITC cumulated imports from all six named countries. The ITC found that although there were sizeable increases in the volume and value of subject imports, such increases were not significant. Domestic demand had increased by almost the same amount as the cumulated subject imports between 1996 and 1998. While the prices for subject merchandise and the domestic like product had decreased, there was also evidence of underselling. Hence the ITC found that imports did not adversely affect prices for the domestic like product to a significant degree. The ITC found that all of the relevant indicators of the domestic industry’s performance changed only slightly over the investigation period, and that many had improved.

The ITC also found that there was no threat of material injury to the domestic industry because the rate of increase in subject imports had levelled off and a further significant increase was unlikely. Furthermore, there was no indication of increased capacity or excess production capacity in the subject countries, and there was unlikely to be a significant degree of product shifting.

25.2 Key Issues

Respondents argued that the subject of stainless steel round wire did not originate in Canada. The respondents contended that the wire was classified as both “Canadian” and “foreign” under essentially identical Customs159 and Commerce substantial transformation tests. The respondents further contended that the rod imported into Canada was not physically or chemically substantially transformed into a Canadian product subject to dumping duties.

However, Commerce found that stainless steel wire rod imported into Canada undergoes a cold‑drawing process, which results in a product with physical properties and end uses that are distinct from those of the stainless steel wire rod. Furthermore, the stainless steel round wire industry is distinct from the stainless steel wire rod industry, and the value added by the cold‑drawing process is significant. Therefore, for purposes of dumping duties, Commerce determined that stainless steel wire rod was substantially transformed in Canada, making it a Canadian product within the scope of the investigation.

25.3 Canadian Government Activity

The Canadian Embassy in Washington, D.C., filed a diplomatic note questioning the evidence of injury to the industry. The Government of Canada also engaged in monitoring and gave general advice to industry representatives involved in the investigation. In addition, it made several representations to Commerce, supporting the respondents’ request to exclude from the calculation of normal value any home market sales said to be clearly outside the “ordinary course of trade.”

26. Cattle from Canada

26.1 Case History

This investigation was instituted in response to a petition filed on November 12, 1998, by the Ranchers‑Cattlemen Action Legal Foundation (R‑Calf), and supporting individuals and trade associations. On November 10, 1998, counsel for R‑Calf had withdrawn a petition it had filed several weeks previously. On November 12, 1998, a second petition for anti‑dumping and countervailing duty investigations was filed, and the previous petition was incorporated by reference. On January 20, 1999, the ITC issued a preliminary affirmative determination, finding a reasonable indication that an industry in the United States was materially injured by reason of dumped and subsidized imports of live cattle from Canada.

On June 30, 1999, Commerce issued a preliminary affirmative determination and ordered the suspension of liquidation of imports from Canada. On July 23, 1999, Commerce amended its preliminary affirmative determination on the basis of revised data filed with Commerce. This amendment resulted in an increase in the provisional anti‑dumping duty rate. In its preliminary determination, Commerce found that there were “reasonable grounds to believe or suspect” that sales of live cattle from Canada were made below their respective cost of production. The margin calculations in the petitions, as revised, indicated dumping margins ranging from 6.42% to 10.72% for live cattle from Canada. On October 21, 1999, Commerce released an affirmative final determination. Company‑specific dumping margins were established as follows:

Producer/ ExporterWeighted Average Margin
Cor Van Raay4.53%
Groenenboom3.86%
JGL Group5.10%
Pound‑Maker0.62%
(de minimis)
Riverside/Grandview5.34%
Schaus15.69%
All Others5.63%

On November 12, 1999, the ITC issued a negative injury determination, thereby terminating the investigation. While the ITC found that the domestic industry had experienced declines expected to improve as the industry consolidated, in a number of key indicators it could not find that any injury to the industry was caused or threatened by imports from Canada. It found that imports from Canada, which had declined over the period of investigation both in absolute and marketshare terms, were entering the United States in small volumes that did not significantly depress or suppress domestic prices.

26.2 Key Issues

26.2.1 Date of Sale

According to the respondents, Commerce regulations established a rebuttable presumption for the use of the date of invoice as the date of sale; there was thus no reason to depart from the use of the date of invoice (or, as appropriate, the date of shipment) in this case. The respondents contended that contracts are entered into for future delivery months in advance, and the month of delivery is an essential factor in establishing the price of cattle. According to the respondents, two contracts entered into on the same date would have different prices depending on the month of delivery, since monthly cattle prices varied according to seasonal trends. Furthermore, the respondents argued that the material terms of sale were subject to change even after prices are “locked in.”

In their rebuttal comments, the petitioners argued that the respondents’ concerns about monthly price fluctuations were irrelevant since Commerce’s practice in anti‑dumping investigations is to compare average prices. The petitioners contended that if Commerce rejected the date of contract as the date of sale, it should continue to rely on the date that prices were “locked in,” since the terms of sale were specified on that date.

As in the preliminary determination, Commerce continued to rely on the lock‑in date as the date of sale for the transactions in question. Commerce continued to believe that the lock‑in date was the date on which the essential terms of sale were set. Commerce regulations provide that the date of invoice is the presumptive date of sale, except where the material terms of sale are established on some other date.

26.2.2 Reimbursement of Anti‑Dumping Duty Deposits

The petitioners alleged that U.S. packers were forcing Canadian producers and exporters of subject merchandise to absorb the costs of anti‑dumping duty deposits, and that such deposits should be deducted in calculating export value. According to the petitioners, Canadian producers of subject merchandise had indicated at meetings in Canada that an anti‑dumping duty order on cattle would have no effect because the Canadian producers would absorb the cost of any duties. The petitioners contended that reimbursement of the deposits would be considered a reduction to price in any future review, and that the cash deposit rate applied in the investigation should reflect such reimbursements even if they did not occur during the period of investigation. The Canadian Cattlemen’s Association (CCA) successfully argued that reimbursement concerns were not applicable to investigations since reimbursement applied only to duties assessed after the imposition of an anti‑dumping duty order. According to the CCA, there was no legal basis to adjust cash deposit rates at this stage of the proceedings in order to account for alleged pricing changes after the investigation.

26.3 Other Issues

There were a number of company‑specific issues on which Commerce was compelled to make a determination. Selected examples follow.

26.3.1 Schaus

Schaus was one of the six Canadian producers/exporters selected to be specifically investigated by Commerce. The company submitted supplemental information on which the Department was scheduled to make its preliminary determination. Commerce had no opportunity to take account of the information in its preliminary determination. After examining the information, Commerce revised the rate for Schaus from 5.43% to 15.69%. Schaus then withdrew from participation in the investigation. Commerce did not, however, allow the information submitted by Schaus to be withdrawn, and continued to rely on it to calculate a rate for Schaus and to use it in the calculation of the “all others” rate. Commerce indicated that the information was reliable and that to do otherwise would be to allow manipulation of the “all others” rate.

26.3.2 JGL Group

Commerce declined to use “facts available” to account for certain sales that were excluded from the list of domestic sales. Commerce did not, however, differentiate (as requested by the respondent) between feeder cows/bulls and regular cull cattle in its determination. Commerce agreed to correct a unit price error that overstated the normal value. Commerce also declined to establish separate rates for cattle that JGL produced and cattle that it purchased and then resold. Commerce also collapsed JGL and Kirk Sinclair.

26.3.3 Pound‑Maker

Commerce disagreed with petitioners that certain sales of cattle should be subject to an average rate of shrinkage, as opposed to the actual rate. Commerce did not, however, adjust selling expenses to account for sales to affiliated parties. Commerce did not apply adverse inference for errors made on reported sales.

26.4 Canadian Government Activity

Since a concurrent countervailing duty investigation was being conducted, it is difficult to isolate Government of Canada activity with reference to the antidumping duty investigation. It appears that specific representations on dumping were not made. However, WTO consultations on the countervailing duty investigation covered at least one issue relevant to the dumping investigation: that of whether the petitioner had standing to request an investigation.

1Biocraft also petitioned for an investigation into Portugese and Israeli exports. This was terminated on August 9, 1989.

2The products covered by this investigation were four separate “classes or kinds” of merchandise: certain hot‑rolled carbon steel flat products; certain cold‑rolled carbon steel flat products; certain corrosion‑resistant carbon steel flat products; and certain cut‑to‑length carbon steel plate.

3The other countries were Argentina, Australia, Austria, Belgium, Brazil, Finland, France, Germany, Italy, Japan, Korea, Mexico, the Netherlands, Poland, Romania, Spain, Sweden, Taiwan and the United Kingdom.

4Cold Metal Products,Dofasco, IPSCO, Sidbec‑Dosco and Stelco.

5Australia, Canada, France, Germany, Japan and Korea.

6Plate, hot‑rolled, cold‑rolled and corrosion‑resistant steel.

7The record indicates that for Canada in 1999, 12.3% of the production of corrosionresistant steel was exported.

8NAFTA rules of origin did not confer origin to the transformation of wire from foreign wire rod.

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