DEPARTMENT OF FINANCE
Roxas Boulevard Corner Vito Cruz Street
Manila 1004


IN THE MATTER OF PROTEST
AGAINST THE IMPORTATION OF
ELECTROLYTIC TINPLATES (ETP)
FROM SOUTH KOREA

ANTI-DUMPING CASE NO. 1-2000

NATIONAL STEEL CORPORATION
Protestant.
x--------------------------------------------------x
DECISION


This is an anti-dumping protest pursuant to Section 301 of the Tariff and Customs Code of the Philippines (TCCP) as amended by Republic Act No. 7843 otherwise known as the Anti-Dumping Act of 1994 and Article VI of the General Agreement on Tariff and Trade (GATT) 1994 and Article, by National Steel Corporation (NSC), herein referred to as the Protestant against the importation of electrolytic tinplates (ETP) from South Korea.

The article under protest is electrolytic tinplate-prime JIS G3303, SPTE-4CA, classified under HS Heading No. 7210.1200 and PSCC Code No, 674.21.04 with a duty rate of 7%. These are of rectangular or square shape with coating weights of up to 1.00 lb/BB, produced using CA TMBP as raw material, of thickness ranging from 0.17 mm. to less than 0.5 mm. and widths of 600 mm. to about 1000 mm. The surface finish can either be bright, matte (dull and silvery gray) or stone finish (between bright and matte). The tin coating weights range from 0.25 lb./BB (2.8g/cm2) to 1.00 lb/BB (11.2g/cm2 ). Prime ETP sheets are used in a broad range of applications such as in the manufacture of cans for food (bodies and ends) e.g. sardines, meat, beverages, milk, infant dietetics and of metal closures.

In compliance with procedural requirements, the Tariff Commission (TC) sent invitations to a consultation on 29 July 1997 and pre-hearing conference on September 1997 to all interested parties. Notices were sent to the Philippine Embassy in South Korea and the Embassy of Korea in Makati City, Philippines informing them that the case is now with the TC for formal investigation. Questionnaires were sent on 29 July 1997 to NSC, Korean exporters and Philippine importers. A notice of public hearing was published in two newspapers of general circulation (Manila Times and Today) on 24 September 1997 while notices to 11 known interested parties and concerned government agencies were sent on 26 September 1997.

As provided for under Section 1 of DOF Department Order No. 150-95 implementing Section 301 of the Tariff and Customs Code, as amended by RA 7843 and Article VI of GATT 1994, there is dumping whenever any specific kind or class of foreign article is being imported into, or likely to be sold into the Philippines at a price less than its normal value, the importation of which might injure, or retard the establishment of, or is likely to injure an industry producing like articles in the Philippines.

Articles 2.1 and 2.2. of the GATT Anti-Dumping Agreement defines "normal value" as the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. When there are no domestic sales or when domestic sales are not comparable because of the particular market situation or when there is low volume of domestic sales, the normal value shall be the representative export price to an appropriate third country or the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and profits.

1. Determination of Like Product

Article 2.6 of the GATT Anti-Dumping Agreement defines "like product" as a product which is identical i.e. alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.

With respect to product similarity, TC expressed that "Product under consideration and the locally manufactured product, prime ETP sheets of thickness not exceeding 0.38 mm. of widths of 600 mm. or more, and coating weight of up to 0.75 lb/BB, produced by NSCs ETP #2 in Pasig City are like products. Both use the same manufacturing methods and methodology; use CA TMBP as input; have comparable standards for input and finished products; have comparable product specifications; are used in the same applications with comparable levels of substitutability in terms of use; and fall within the same tariff heading (TC report pp. 21-24)"

2. Domestic Industry Support

Article 4.1 of the GATT Anti-Dumping Agreement defines "domestic industry" as "referring to the domestic producers as a whole of the like products or to those whole collective output of the products constitutes a major proportion of the total domestic production of those products......."

Article 5.4 of the Agreement further states that an investigation shall not be initiated unless the application has been made by or on behalf of the domestic industry. The application shall be considered to have been made by or on behalf of the domestic industry if it is supported by those domestic producers whose collective output constitutes more than 50 percent of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. However, no investigation shall be initiated when domestic producers expressly supporting the application account for less than 25 percent of total production of the like product produced by the domestic industry.

NSC is the only manufacturer of the like product in the Philippines. As such the applicant satisfies the requirement of domestic industry support.

3. Determination of Dumping

Article 2.4 of the Agreement sets the terms for comparing normal value and export price.

"A fair comparison shall be made between the export price and normal value. This comparison shall be made at the same level of trade, normally at the ex-factory level, and in respect of sales made at as nearly as possible the same time. Due allowances shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are also demonstrated to affect price comparability....."

For the purpose of determining dumping, the period of investigation adopted by the Tariff Commission covers a seven (7) month period from 1 January to 31 July 1996.

Positive price differences were computed between Normal Values and Export Prices of subject articles ranging from US$55.70 to US$118.26/MT as shown in Table 1 below. (TC Report pp. 28-29)

Table 1 Price Difference and Dumping Margin

EXPORTER COATING
WEIGHT
(lb/BB)
NORMAL
VALUE
(US$/MT)
EXPORT
PRICE
(US$/MT)
PRICE
DIFFERENCE
(US$/MT)
DUMPING
MARGIN
(%)
Dongbu 0.21 696.12 612.37 83.75 13.68
  0.22 714.75 612.37 102.38 16.72
  0.23 730.63 612.37 118.26 19.31
  0.24 668.07 612.37 55.70 9.10
  0.25 695.47 612.37 83.10 13.57
  0.28 690.17 612.37 77.80 12.70
  0.30 679.34 612.37 66.97 10.94
Posteel 0.21 to 1.00 747.08 670.24 76.84 11.46
Article 5.8 of the Agreement states that "there shall be immediate termination if the margin of dumping is de minimis or if the margin is less than 2 percent, expressed as a percentage of the export price. The computed dumping margins for Dongbu and Posteel, ranging from 9.1% to 19.31%, are clearly above de minimis. (Table 1) (TC Report p. 29)

4. Volume of Dumped Imports

Article 5.8 of the Agreement provides for the immediate termination of dumping cases where volume of dumped imports is found to be negligible.

"There shall be immediate termination in cases where the authorities determine that… the volume of dumped imports, actual or potential..... is negligible..... The volume of dumped imports shall normally be regarded as negligible if the volume of dumped imports from a particular country is found to account for less than 3 percent of imports of like product in the importing Member, unless countries which individually account for less than 3 percent of the imports of like product in the importing member collectively account for more than 7 percent of imports of like product in the importing member."

In determining the volume of dumped imports, the TC used data from Clean Reports of Findings (CRFS) furnished by SGS. Data from other sources, e.g., NSO Foreign Trade Statistics, were not segregated.

Table 2. Volume of Dumped Imports
POI Imports from South Korea
  Total Dumped
Jan. 1996 513.72 106.20
Feb 629.52 629.52
Mar 1,140.82 1,140.82
Apr 441.97 119.42
May 980.11 980.11
Jun 674.60 460.41
Jul 26.50 -
TOTAL 4,407.24 3,436.48
Percent of Dumped to Total 77.97%