61 FR 56617, November 1, 1996
DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-820]
Suspension of Antidumping Investigation:
Fresh Tomatoes From Mexico
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) has suspended the
antidumping investigation involving fresh tomatoes from Mexico. The
basis for the suspension is an agreement between the Department and
producers/exporters accounting for substantially all imports of fresh
tomatoes from Mexico wherein each signatory producer/exporter has
agreed to revise its prices to eliminate completely the injurious
effects of exports of this merchandise to the United States.
EFFECTIVE DATE: November 1, 1996.
FOR FURTHER INFORMATION CONTACT: John Brinkmann or Judith Wey Rudman,
Office of AD/CVD Enforcement II, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th & Constitution
Avenue N.W., Washington, D.C. 20230; telephone (202) 482-5288 or (202)
482-0192, respectively.
SUPPLEMENTARY INFORMATION:
Background
On April 18, 1996, the Department initiated an antidumping
investigation under section 732 of the Tariff Act of 1930, (the Act),
as amended, to determine whether imports of fresh tomatoes from Mexico
are being or are likely to be sold in the United States at less than
fair value (61 FR 18377, April 25, 1996). On May 16, 1996, the United
States International Trade Commission (ITC) notified the Department of
its affirmative preliminary injury determination. At the request of
petitioners in this investigation, the Department postponed the
preliminary determination until no later than October 7, 1996 (61 FR
40607, August 5, 1996). On October 7, 1996, the Department further
postponed the preliminary determination until no later than October 28,
1996 (61 FR 53702, October 15, 1996).
The Commerce Department and the Mexican tomato growers initialed a
proposed agreement suspending this investigation on October 10, 1996.
Interested parties were informed that the Department intended to
finalize the agreement on October 28, 1996, and were invited to provide
written comments on the agreement. The following interested parties
filed comments with the Department on or before October 25, 1996:
Desert Glory, Ltd.; petitioners; the Asociacion de Agricultura, Baja
California, Mexico of San Diego, California; and the Fresh Produce
Association of the Americas.
On October 28, 1996, the Department preliminarily determined that
imports of fresh tomatoes from Mexico are being sold at less than fair
value in the United States (see, the Notice of Preliminary
Determination of Sales at Less Than Fair Value and Postponement of
Final Determination: Fresh Tomatoes from Mexico that is being published
concurrently with this notice of suspension of the investigation).
The Department and the signatory producers/exporters of fresh
tomatoes from Mexico signed the final suspension agreement on October
28, 1996.
Scope of Investigation
The products covered by this investigation are all fresh or chilled
tomatoes (fresh tomatoes) except for cocktail tomatoes and those
tomatoes which are for processing. For purposes of this investigation,
cocktail tomatoes are green-house grown tomatoes, generally larger than
cherry tomatoes and smaller than roma or common round tomatoes, and are
harvested and packaged on-the-vine for retail sale. For purposes of
this investigation, processing is defined to include preserving by any
commercial process, such as canning, dehydrating, drying or the
addition of chemical substances, or converting the tomato product into
juices, sauces or purees. Further, imports of fresh tomatoes for
processing are accompanied by an ``Importer's Exempt Commodity Form''
(FV-6) (within the meaning of 7 C.F.R. sections 980.501(a)(2) and
980.212(I)). Fresh tomatoes that are imported for cutting up, not
further processed (e.g., tomatoes used in the preparation of fresh
salsa or salad bars), and not accompanied by an FV-6 form are covered
by the scope of this investigation.
All commercially-grown tomatoes sold in the United States, both for
the fresh market and for processing, are classified as Lycopersicon
esculentum. Important commercial varieties of fresh tomatoes include
common round, cherry, plum, and pear tomatoes, all of which, with the
exception of cocktail tomatoes, are covered by this investigation.
Tomatoes imported from Mexico covered by this investigation are
classified under the following subheadings of the Harmonized Tariff
Schedules of the United States (HTS), according to the season of
importation: 0702.00.20, 0702.00.40, 0702.00.60, and 9906.07.01 through
9906.07.09. Although the HTS numbers are provided for convenience and
Customs purposes, our written description of the scope of this
proceeding is dispositive.
Interested Party Comments
Having analyzed all comments filed by interested parties, we
continue to conclude that the Agreement meets the requirements of the
statute. For a discussion of the Department's response to interested
party comments, see the memorandum from Barbara R. Stafford to Robert
S. LaRussa, Acting Assistant Secretary for Import Administration, dated
October 28, 1996.
Suspension of Investigation
The Department consulted with the parties to the proceeding and has
considered the comments submitted with respect to the proposed
suspension agreement. In accordance with section 734(c) of the Act, we
have determined that extraordinary circumstances are present in this
case, as defined by section 734(c)(2)(A) of the Act. (See October 28,
1996, Extraordinary Circumstances Memorandum to Robert S. LaRussa).
The suspension agreement provides that: (1) The subject merchandise
will be sold at or above the established reference price; and (2) for
each entry of each exporter, the amount by which the estimated normal
value exceeds the export price (or constructed export price) will not
exceed 15 percent of the weighted average amount by which the estimated
normal value exceeded the export price (or constructed export price)
price for all less-than-fair-value entries of the producer/exporter
examined during the course of the investigation. We have determined
that this suspension agreement will: (1) Eliminate completely the
injurious effect of exports to the United States of the subject
merchandise; and (2) prevent the suppression or undercutting of price
levels of domestic fresh tomatoes by imports of that merchandise from
Mexico.
We have also determined that the suspension agreement can be
monitored effectively and is in the public interest, pursuant to
section 734(d) of the Act. (See October 21, 1996, Public Interest
Memorandum to Robert S. LaRussa). We find, therefore, that the criteria
for suspension of the investigation pursuant to section 734(c) of the
Act have been met. The terms and conditions of the suspension
agreement, signed October 28, 1996, are set forth in Appendix I to this
notice.
[[Page 56619]]
The suspension of liquidation ordered in the preliminary
affirmative determination in this case (published concurrently with
this notice) shall continue in effect, subject to section 734(h)(3) of
the Act. Section 734(f)(2)(B) of the Act provides that the Department
may adjust the security required to reflect the effect of the
Agreement. Pursuant to this provision, the Department has found that
the Agreement eliminates completely the injurious effects of imports
and, thus, the Department is adjusting the security required from
signatories to zero. The security rates in effect for imports from non-
signatory growers remain as published in our preliminary determination.
Notwithstanding the suspension agreement, the Department will
continue the investigation if it receives such a request in accordance
with section 734(g) of the Act within 20 days after the date of
publication of this notice.
This notice is published pursuant to section 734(f)(1)(A) of the
Act.
Dated: October 28, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
Appendix I.--Suspension Agreement Fresh, Tomatoes From Mexico
Pursuant to section 734(c) of the Tariff Act of 1930, as amended
(19 U.S.C. 1673c(c)) (``the Act''), and section 353.18 of the U.S.
Department of Commerce (``the Department'') regulations (19 C.F.R.
353.18), the Department and the signatory producers/exporters of
fresh tomatoes from Mexico enter into this Suspension Agreement (the
``Agreement''). On the basis of this Agreement, the Department shall
suspend its antidumping duty investigation, the initiation of which
was published on April 25, 1996 (61 FR 18377), with respect to fresh
tomatoes from Mexico, subject to the terms and provisions set out
below.
I. Product Coverage
The merchandise subject to this Agreement is all fresh or
chilled tomatoes (fresh tomatoes) which have Mexico as their origin,
except for cocktail tomatoes and those tomatoes which are for
processing. For purposes of this Agreement, cocktail tomatoes are
green-house grown tomatoes, generally larger than cherry tomatoes
and smaller than roma or common round tomatoes, and are harvested
and packaged on-the-vine for retail sale. For purposes of this
Agreement, processing is defined to include preserving by any
commercial process, such as canning, dehydrating, drying or the
addition of chemical substances, or converting the tomato product
into juices, sauces or purees. Imports of fresh tomatoes for
processing are accompanied by an ``Importer's Exempt Commodity
Form'' (FV-6) (within the meaning of 7 CFR section 980.501(a)(2) and
980.212(i)). Fresh tomatoes that are imported for cutting up, not
further processed (e.g., tomatoes used in the preparation of fresh
salsa or salad bars), and not accompanied by an FV-6 form are
covered by this Agreement.
II
Commercially-grown tomatoes, both for the fresh market and for
processing, are classified as Lycopersicon esculentum. Important
commercial varieties of fresh tomatoes include common round, cherry,
plum, and pear tomatoes, all of which, with the exception of
cocktail tomatoes, are covered by this Agreement.
Tomatoes imported from Mexico covered by this Agreement are
classified under the following subheadings of the Harmonized Tariff
Schedules of the United States (HTS), according to the season of
importation: 0702.00.20, 0702.00.40, 0702.00.60, and 9906.07.01
through 9906.07.09. Although the HTS numbers are provided for
convenience and Customs purposes, the written description of the
scope of this Agreement is dispositive.
III. U.S. Import Coverage
The signatory producers/exporters collectively are the producers
and exporters in Mexico which, during the antidumping duty
investigation of the merchandise subject to the Agreement, accounted
for substantially all (not less than 85 percent) of the subject
merchandise imported into the United States. The Department may at
any time during the period of the Agreement require additional
producers/exporters in Mexico to sign the Agreement in order to
ensure that not less than substantially all imports into the United
States are subject to the Agreement.
IV. Basis for the Agreement
Each signatory producer/exporter individually agrees that, in
order to prevent price suppression or undercutting, the producer/
exporter will not sell, on and after the effective date of the
Agreement, merchandise subject to the Agreement at prices that are
less than the reference price, in accordance with Appendix A to this
Agreement.
In order to satisfy the requirements of section 734(c)(1)(B) of
the Act, each signatory producer/exporter of fresh tomatoes from
Mexico, individually, agrees that for each entry the amount by which
the estimated normal value exceeds the export price (or the
constructed export price) will not exceed 15 percent of the weighted
average amount by which the estimated normal value exceeded the
export price (or the constructed export price) for all less-than-
fair-value entries of the producer/exporter examined during the
course of the investigation, in accordance with the calculation
methodologies described in Appendix B.
V. Monitoring of the Agreement
A. Import Monitoring
1. The Department will monitor entries of fresh tomatoes from
Mexico to ensure compliance with Section III of this Agreement.
2. The Department will review publicly-available data and other
official import data, including, as appropriate, records maintained
by the U.S. Customs Service, to determine whether there have been
imports that are inconsistent with the provisions of this Agreement.
The Department also will coordinate with U.S. Customs in its
collection and review of data in connection with the monitoring of
box-specific average weights.
B. Compliance Monitoring
1. The Department may require, and each signatory producer/
exporter agrees to provide, confirmation, through documentation
provided to the Department, that the price received on any sale
subject to this Agreement was not less than the established
reference price. The Department may require that such documentation
be provided, and be subject to verification, within 30 days of the
sale.
2. The Department may require, and each signatory producer/
exporter agrees to report, on computer tape in the prescribed format
and using the prescribed method of data compilation, each sale of
the merchandise subject to this Agreement, either directly or
indirectly to unrelated purchasers in the United States, including
each adjustment applicable to each sale, as specified by the
Department.
Each producer/exporter agrees to permit review and on-site
inspection of all information deemed necessary by the Department to
verify the reported information.
3. The Department may conduct administrative reviews under
section 751 of the Act, upon request or upon its own initiative, to
ensure that exports of fresh tomatoes from Mexico are at prices
consistent with the terms of this Agreement. The Department may
perform verifications pursuant to administrative reviews conducted
under section 751 of the Act.
C. Shipping and Other Arrangements
1. The producers/exporters shall include as part of the
documentation presented to U.S. Customs for entry of merchandise
into the United States a declaration that the entry conforms with
the requirement that the merchandise has been or will be sold at or
above the reference price.
2. All reference prices will be expressed in U.S.$/lb. in
accordance with Appendix A. Subject to paragraph 24 of Annex 703.2
of the North American Free Trade Agreement, the quality of each
entry of fresh tomatoes exported to the United States from Mexico
will conform with any applicable U.S. Department of Agriculture
minimum grade, size and/or quality import requirements in effect.
Shipments that do not meet the requirements of this agreement will
not be permitted entry into the United States.
3. Producers/exporters agree not to circumvent the Agreement.
Not later than 30 days after each quarter, each signatory producer/
exporter will submit a written statement to the Department
certifying that all sales during the most recently completed quarter
were at net prices (after rebates, backbilling, discounts for
quality and other claims) at or above the reference price and were
not part of or related to any act or
[[Page 56620]]
practice which would have the effect of hiding the real price of the
fresh tomatoes being sold (e.g., a bundling arrangement, discounts/
free goods/financing package, swap, or other exchange). Each
producer/exporter agrees to permit full verification of its
certification as the Department deems necessary.
D. Rejection of Submissions
The Department may reject any information submitted after the
deadlines set forth in this Agreement or any information which it is
unable to verify to its satisfaction. If information is not
submitted in a complete and timely fashion or is not fully
verifiable, the Department may calculate U.S. price based on facts
otherwise available, as it determines appropriate, unless the
Department determines that Section V applies.
E. Compliance Consultations
1. When the Department identifies, through import or compliance
monitoring or otherwise, that sales may have been made at prices
inconsistent with Section III of this Agreement, the Department will
notify each signatory producer/exporter which it believes is
responsible as well as the producer/exporter trade organizations
party to this Agreement. The Department will consult with each such
party for a period of up to 60 days to establish a factual basis
regarding sales that may be inconsistent with Section III of this
Agreement.
2. During the consultation period, the Department will examine
any information which it develops or which is submitted, including
information requested by the Department under Section IV.A. and B.
above.
F. Review
If the Department is not satisfied at the conclusion of the
consultation period that sales by such signatory producer/exporter
are being made in compliance with this Agreement, the Department
will conduct a review to determine whether this Agreement is being
violated by such signatory producer/exporter. This provision does
not limit or restrict the Department's authority to conduct an
administrative review under section 751 of the Act and paragraph
IV.B.3. of this Agreement.
G. Operations Consultations
During the first anniversary month of this Agreement, the
Department will consult with the signatory producers/exporters
regarding the operation of the Agreement. Consultations may be
requested by any party to the Agreement in any June or December
following the first anniversary of the Agreement. Consistent with
the statutory requirement that the Agreement prevent the suppression
or undercutting of price levels of domestic fresh tomatoes, the
Department may revise the reference price following consultations
under this provision. In particular, the Department expects to make
downward or upward adjustments to the reference price to take into
account any significant changes within the most recent semi-annual
period relevant to the period under consideration (December-May;
June-November). For example, the Department expects to make a
downward adjustment to take into account a significant change in the
relationship of domestic prices to import prices from that which
existed during the base period (as referred to in Appendix A) and
which is attributable to a decline in domestic prices. In evaluating
the significance of any change, the Department will look both to the
extent of the change and its duration. For example, a very high
percentage change in the relationship may be significant even though
it occurs over a brief time period.
VI. Violations of the Agreement
If the Department determines that the Agreement is being or has
been violated or no longer meets the requirements of section 734 (c)
or (d) of the Act, the Department shall take action it determines
appropriate under section 734(i) of the Act and the Department's
regulations.
VII. Other Provisions
A. In entering into this Agreement, the signatory producers/
exporters do not admit that any exports of fresh tomatoes from
Mexico have an injurious effect on fresh tomato producers in the
United States or have been sold at less than fair value. The
signatory producers/exporters also do not admit that green-house,
cherry or any other particular type of tomatoes are properly
considered to be within the scope of the underlying investigation.
B. The signatory producers/exporters may withdraw from this
Agreement upon 60 days written notice to the Department.
C. Upon request, the Department will advise any signatory
producer/exporter on the Department's methodology for calculating
its export price (or constructed export price) and normal value
which, for purposes of this Agreement, are described in Appendix B.
Further, the Department reserves the right to modify its methodology
in calculating export price (or constructed export price) and normal
value.
VIII. Disclosure and Comment
A. If the Department proposes to revise the reference price
under paragraph IV.G., not later than three months prior to the
first day of each semi-annual period, the Department will disclose
the results and the methodology of the Department's calculation of
the preliminary reference price established for that upcoming semi-
annual period.
B. Not later than 7 days after the date of disclosure under
paragraph VII.A., the parties to the proceeding may submit written
comments to the Department, not to exceed 15 pages. After reviewing
these submissions, the Department will provide the final reference
price for the upcoming semi-annual period, normally within 30 days
after the date of disclosure under paragraph VII.A.
C. The Department may make available to representatives of each
interested party to the proceeding, under appropriately drawn
administrative protective orders, any business proprietary
information submitted to the Department pursuant to Section IV. of
this Agreement, as well as the results of the Department's analysis
of that information.
IX. Termination
Absent affirmative determinations under the five-year review
provisions of sections 751 and 752 of the Act, the Department
expects to terminate this Agreement and the underlying investigation
no later than November 1, 2001.
X. Effective Date
The effective date of the Agreement is the date on which it is
published in the Federal Register.
For Members of Confederacion de Asociaciones Agricolas del
Estado (C.A.A.D.E.S.) and Confederacion Nacional de Productores de
Hortalizas (C.N.P.H.)
Dated: October 28, 1996.
Luis Cardenas F.,
Confederacion de Asociaciones Agricolas del Estado (C.A.A.D.E.S.)
'''''''''''''
Dated: October 28, 1996.
Basilio Gatzionis T.,
Confederacion Nacional de Productores de Hortalizas (C.N.P.H.)
For U.S. Department of Commerce.
Dated: October 28, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
Appendix A.--Fresh Tomatoes From Mexico, Suspension Agreement
The following is the methodology the Department will use when
calculating the reference price for the purposes of this Agreement.
The reference price for the initial period (effective date of
Agreement through September 30, 1997) will be calculated as follows:
The Department will determine the lowest average monthly price
for fresh tomatoes from Mexico in the United States during each year
in the base period (calendar years 1992-1994). The Department will
average these three figures to calculate one figure which will serve
as the reference price for the initial period of the Agreement. As
calculated pursuant to this methodology, the reference price for the
initial period is $5.17 for a 25 pound box ($0.2068/lb.).
The reference price from the initial period will remain in
effect unless modified in accordance with the provisions of
paragraph IV.G.
The term ``reference price'' refers to the price F.O.B. Nogales/
San Diego/Laredo from the first handler (importer/broker) to an
unrelated purchaser. Any movement expenses beyond the three Customs
district points of entry listed above must be added to the reference
price and must reflect the actual price of transportation in an arms
length transaction. Where imports are sold through affiliated
parties, the transfer price from the importer/broker (located at the
point of entry) to an affiliate must be at or above the reference
price and any subsequent sale to an unaffiliated party must reflect
mark-ups usual for the company during the period prior to this
Agreement or normal within the industry if the relationship did not
exist prior to this Agreement.
[[Page 56621]]
The reference price for each type of box shall be determined
based on the average weights used by U.S. Customs at the port of
Nogales, AZ for duty assessment purposes, with the initial weights
being those in use as of December 8, 1995. For example, if U.S.
Customs determines that the average weight of a 3-layer, 6X6 box of
tomatoes is 30 pounds, the reference price for that box will be
equal to 30/25 times the reference price then in effect. If, either
on its own or through consultations with the Department, U.S.
Customs determines to revise an average weight figure, the
Department will provide 15 days notice to signatory producers/
exporters (through the producer/exporter trade organizations party
to this Agreement) prior to such revised average weights becoming
effective for purposes of this Agreement.
In the event that a signatory producer/exporter intends to
export subject merchandise to the United States in a box for which
U.S. Customs has not assigned an average weight, the signatory
producer/exporter shall notify the Department in writing no later
than 45 days prior to the date of the first export of such boxes to
the United States. The notification shall include a complete
description of the size of the box, and the intended packing form
(i.e., 4X4, 5X5, loose pack, etc.). The Department shall allow any
interested party to submit written comments, not to exceed 10 pages,
on the appropriate average weight for the box within 7 days after
the filing of the written notification by the signatory producer/
exporter, and the Department shall inform the signatory producer/
exporter of the average weight for the box no later than 30 days
after filing of the written notification by the signatory producer/
exporter.
Appendix B.--Fresh Tomatoes From Mexico, Suspension Agreement
Normal Value
The cost or price information reported to the Department that
will form the basis of the normal value (NV) calculations for
purposes of the Agreement must be comprehensive in nature and based
on a reliable accounting system (e.g., a system based on well-
established standards and can be tied either to the audited
financial statements or to the tax return filed with the Mexican
government).
Sales Price
When we base normal value on sales prices, such prices will be
the prices at which the foreign like product is first sold for
consumption in the comparison market, in the usual commercial
quantities and in the ordinary course of trade. Also, to the extent
practicable, the comparison shall be made at the same level of trade
as the export price or constructed export price.
Constructed Value
When normal value is based on constructed value, we will compute
growing season specific constructed values (CVs) based on the sum of
each respondent's growing costs for each type of tomato, plus
amounts for selling, general and administrative expenses, U.S.
packing costs and profit. We will collect this cost data for an
entire growing season in order to accurately determine the per unit
CV of that growing season.
Export Price and Constructed Export Price
Export price (EP) and constructed export price (CEP) refer to
the two types of calculated prices for merchandise imported into the
United States. Both EP and CEP are based on the price at which the
subject merchandise is first sold to a person not affiliated with
the foreign producer or exporter.
Fair Comparisons
To ensure that a fair comparison with NV is made, the Department
will make adjustments to the price to the first unaffiliated
customer in calculating the export price or constructed export
price. For both EP and CEP the Department will add packing costs, if
not already included in the price, rebated import duties, and, if
applicable, certain countervailing duties. For both EP and CEP, the
Department will deduct transportation costs, and export taxes or
duties. In calculating CEP, the Department will make additional
deductions for commissions, direct selling expenses incurred in
selling the merchandise under investigation in the United States,
the cost of any further manufacture or assembly performed in the
United States, and a portion of profit. In addition, the Department
will deduct indirect selling expenses that relate to commercial
activity in the United States.
Normal Value
Calculation of CV
Direct Materials
+Direct Labor
+Factory overhead
---------------------------------------------
=Cost of Manufacturing
+Home Market SG & A *
---------------------------------------------
=Cost of Production
+Profit *
---------------------------------------------
=Constructed Value (CV)
* SG & A and profit are based on home market sales of a foreign like
product made in the ordinary course of trade.
Calculation of Comparison Price:
The calculation of normal value will vary depending on whether
the comparison is price-to-EP or price-to-CEP.
Export Price (EP) and Constructed Export Price (CEP)
Calculation of EP
Gross Unit Price
-Movement Expenses
-Discounts and Rebates
---------------------------------------------
=Export Price (EP)
Calculation of CEP
Gross Unit Price
-Movement Expenses
-Discounts and Rebates
-Direct Selling Expenses
-Indirect Selling Expenses that relate to commercial activity in the
U.S.
-The cost of any further manufacture or assembly incurred in the U.S.
-CEP Profit
------------------------------------------------------------------------
=Constructed Export Price (CEP)
[FR Doc. 96-28092 Filed 10-31-96; 8:45 am]
BILLING CODE 3510-DS-P