Brass Fire Protection Products from Italy, Inv. 731-TA-165 (Review)

_CERTAIN VALVES, NOZZLES, AND CONNECTORS OF BRASS FROM ITALY FOR USE IN FIRE PROTECTION SYSTEMS Determination of the Commission in .·. Investigation No. 731-TA-165 (Final) Under the Tariff Act of 1930, Together With the .Information Obtained in the Investigation USITC PUBLICATION 1649 · FEBRUARY 1985 United States International Trade Commission I Wahington, DC 20436 UNITED STATES INTERNATIONAL TRADE COMMISSION COMMISSIONERS Paula Stern, Chairwoman · Su a an W. Llebeler, Vice Chairman Alfred E. Eckea Seeley G. Lodwick David 8. Rohr Staff Assigned: George L. Deyman, Office of Investigations Ruben Mata, Office of lndustries John Ryan, Off ice of Economics Chandra1'..ant G. Mehta, Office of Investigations Marcia H. Sundeen, Office of the General Counsel Vera A. Libeau, Supervisory Investigator Ad.dress all communications to Kenneth R. Mason, Secretary to the Commission United States International Trade Commission Washington, DC 20436 C 0 N T E N T S Determination-~----------------------------------------------------------- 1 Views of.Chairwoman Stern, Vice Chairman Liebeler, Commissioner Lodwick, and Commissioner Rohr--------------------------------------------------- 3 Additional views of Vice Chairman Liebeler----------------------~--------- 21 Views of Commissioner Eckes----------------------------------------------- 25 Information obtained in the investigation: Introduction---------------------------------------------------------- A-1 The products: Description and uses---------------------------------------------- A-3 Valves-------------------------------------------------------- A-3 Nozzles------------------------------------------------------- A-4 Couplings----------------------------------------------------- A-4 Fire department inlet connections (siamese connections)------- A-4 Domestic and imported products-------------------------------- A-5 U.S. tariff treatment--------------------------------------------- A-6 Nature and extent of sales at LTFV------------------------------------ A-7 The domestic market: Apparent U.S. consumption----------------------------------------- A-7 U.S. producers---------------------------------------------------- A-10 U.S; importers---------------------------------------------------- A-14 Channels of distribution----------------------~------------------- A-14 The Italian industry-------------------------------------------------- A-15 Consideration of alleged material injury to an industry in the United States-------------------------------------------------------------- A-18 U.S. production--------------------------------------------------- A-18 U.S. capacity and capacity utilization---------------------------- A-19 U.S .. producers' domestic shipments-------------------------------- A-21 U.S. producers' exports------------------------------------------- A-22 U.S. producers' inventories--------------------------------------- A-23 U.S. employment and wages----------------------------------------- A-25 Financial experience of U.S. producers---------------------------- A-26 The subject products------------------------------------------ A-26 Capital expenditures and research and development expenses---- A-28 U.S. producers' statements on the impact of LTFV imports from Italy on their growth, investment, and ability to raise capital----------------------------------------------------- A-28 Consideration of the threat of material injury------------------------ A-29 Consideration of the causal relationship between LTFV imports and the alleged material injury: U.S. imports------------------------------------------------------ A-29 Market penetration of imports------------------------------------- A-31 Prices------------------------------------------------------------ A-36 Trends in prices---------------------------------------------- A-37 Comparisons of domestic and import prices--------------------- A-37 Exchange rates---------------------------------------------------- A-47 Lost revenues----------------------------------------------------- A-47 Lost sales-------------------------------------------------~------ A-49 Appendix A. Notice of Commerce's preliminary determination--------------- A-51 Appendix B. Notice of the Commission's institution of a final antidumping investigation----------------------------------------------------------- A-55 Appendix c. Notices of postponement of final determinations-------------- A-59. Appendix D. Notice of Commerce's final determination--------------------- A-63 Appendix E. Notice of postponement of the Commission's hearing-~--------- A-73 Appendix F. Letter from ColtUllerce to the Commission amending commerce's final determination-~--------------------------------------------------- A-77 ii CONTENTS Appendix G. Notice of Commerce's amendment to its final determination--- A-79 Appendix H. Notice of the Commission's rescheduling of its public hearing------------------------------~-------------------------------- A-81 Appendix I. Calendar of witnesses at the Commission's hearing----------- A-83 Appendix J. Letter submitted to the Commission by Elkhart Brass Co------ A-87 Appendix K. Letter submitted to the Commission by J.W. Moon, Inc-------- A-89 Tables 1. Brass components for fire protection systems: U.S. producers' domestic shipments, U.S. imports, and apparent consumption, 1981-83, January-September 1983, and January-September 1984-------- A-8 2. Brass components for fire protection systems: U.S. producers' domestic shipments, U.S. imports, and apparent consumption, 1981-83, January-September 1983, and January-September 1984-------- A-11 3. Brass components for fire protection systems: U.S. producers' plant locations, and amounts produced of each of the subject products, 1983--------------------------------------------------------------- A-13 4. Brass components for fire protection systems: Giacomini's production, exports to the United States, and exports to Canada, 1981-83, January-September 1983, and January- September 1984--------------~-------------------------------------- A-17 5. Brass components for fire protection systems: U.S. production, 1981-83, January-September 1983, and January-September 1984-------- A-19 6. Brass components for fire protection systems: U.S. production, producers·' capacity, and capacity utilization, 1981-83, January-September 1983, and January-September 1984----------------- A-20 1. Brass components for fire protection systems: U.S. producers' domestic shipments, 1981-83, January-September 1983, and January-September 1984--------------------------------------------- A-22 8. Brass components for fire protection systems: U.S. producers' exports, 1981-83, January-September 1983, and January- September 1984----------------------------------------------------- A-23 9. Brass components for fire protection systems: U.S. producers' end-of-period inventories, domestic shipments, and inventories as a share of domestic shipments, Dec. 31 of 1980-83, Sept. 30, 1983, and Sept. 30, 1984--------------------------------- A-24 10. Average number of employees, total and production and related workers employed in establishments producing brass components for fire pro- .tection systems, and hours worked by such production and related workers, 1981-83, January-September 1983, and January-September 1984--------------------------------------------------------------- A-25 11. Income-and-loss data of 3 U.S. producers on their operations pro- ducing the subject products, accounting years 1981-83, and interim periods ended June 30, 1983, and June 30, 1984------------- A-27 12. Brass components for fire protection systems: U.S. importers' end-of-period inventories of Italian merchandise, 1980-83, January-September 1983, and January-September 1984----------------- A-30 iii CONTENTS Tables 13. Brass components for fire protection systems: U.S. imports from Page Italy, 1981-83, January-September 1983, and January-September 1984-----~--------------------------------------------------------- A-32 14. Brass components for fire protection systems: U.S. imports from Italy and apparent consumption, 1981-83, January-September 1983, and January-September 1984----------------------------------------- A-33 15. Brass components for fire protection systems: Purchases by 3 importer/distributors of U.S.-produced and Italian-produced articles, 1981-83, January-September 1983, and January-September 1984---------------------------------~----------------------------- A-35 16. Brass valves, couplings, nozzles, and connections: Weighted-average prices reported by U.S. producers on sales of selected articles to major customers, by quarters, January 1982-September 1984------- A-38 17. Brass fire hose couplings, 1-1/2 inches in diameter: Weighted- average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984------------- A-39 18. Brass fog/straight stream nozzles, 1-1/2 inches in diameter: Weighted-average net delivered prices paid by importer/ distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984---------- A-40 19. Brass angle-type hose valves for 2-1/2-inch lines: Weighted-average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984---------------------------------------- A-41 20. Brass wedge· disc hose gate valves for 2-1/2-inch lines: Weighted- average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984--------------------------- A-42 21. Brass siamese fire department connections, double clapper, with Y-type exposed patterns, two 2-1/2-inch inlets, and a 4-inch outlet: Weighted-average net delivered prices paid by importer/ distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984---------- A-43 22. Brass pressure-restricting valves, 2-1/2 inches in diameter: Weighted-average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984--------------------------- A-44 23. Brass pressure-regulating valves, 2-1/2 inches in diameter: Weighted- .average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984------------------------------ A-45 24. U.S.-Italian exchange rates: Indexes of the nominal and real exchange rates between the U.S. dollar and the Italian lira, by quarters, January 1982-September 1984---------------------------------------- A-47 Note.--Data which would disclose confidential operations of individual concerns may not be published and therefore have been deleted from this report. Deletions are indicated by asterisks. UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, DC Investigation No. 731-TA-165 (Final) CERTAIN VALVES, NOZZLES, AND CONNECTORS OF BRASS FROM IIALY FOR USE IN FIRE PROTECTION SYSTEMS Determinations On the basis of the record !/ developed in the subject investigation, the Commission determines, pursuant to section 735(b) of the Tariff Act of 1930 (19 U.S.C. § 1673d(b)), that industries in the United States are materially injured by reason of imports from Italy of single and double clapper siamese connections ?:_/ and pressure-restricting valves, ~/ all of the foregoing of brass and for use in fire protection systems, provided for in item 680.14 of ,. the Tari ff Schedules of the United States (TSUS), which have been found by the Department of Commerce to be sold in the United States at ~ess than fair value (LTFV). The Commission further determines that industries in the United States are not materially injured or threatened with material injury, nor is the establishment of an industry in the United States materially retarde~, by reason of imports from Italy of fire hose couplings, fog/straight stream nozzles, angle-type hose valves, wedge disc hose gate valves, and pressure-regulating valves, 1/ all of the foregoing of brass and for use in fire protection systems, provided for in items 657.35, 680.14, and 680.27 of !/The record is defined in sec. 207.2(i) of the Commission's Rules of Practice and Procedure (19 CFR § 207.2(i)). ?.J Vice Chairman Liebeler determines that an industry in the United States is not materially injured or threatened with material injury, nor is the establishment of an industry in the United States materially retarded, by reason of imports from Italy of this product. 3/ Chairwoman Stern and Vice Chairman Liebeler determine that an industry in the United States is not materially injured or threatened with material injury, nor is the establishment of an industry in the United States materially retarded, by reason of imports from Italy of this product. 4/ Commissioner Eckes determines that industries in the United States are mate dally injured or threatened with material injury, by reason of imports from Italy of these products. 2 the Tariff Schedules of the United States, whic~ have been found by the Department of Commerce to be sold in the United States at LTFV. Background The Commission instituted this investigation effective 3uly 10, 1984, following a preliminary. determination by the· Department of Commerce that imports of certain valves, couplings, nozzles, and connections, of brass, from Italy, suitable for use in interior fire protection systems, were being sold at LTFV within the meaning of section 731 of the Act (19 U.S.C. § 1673). Notice of the institution of the Commission's investigation and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, washington, DC, and by publishing notices in the Federal Register of 3uly 2S, 1984 {49 FR 30029) and 3anuary 16, ,198S (SO FR 2.354). The hearing was held in washington, DC, ,on 3anuary 23, 1985, and all persons who requested the opportunity were permitted to appear in person or by counsel. 3 VIEWS OF CHAIRWOHAH STERN, VICE CHAIRHAH LIEBELER, COMMISSIONER LODWICK, AND COMMISSIONER ROHR We have determined that two industries in the United states are materially injured by reason of less than fair value (LTFV) imports from Italy of brass siamese connections and brass pressure-restricting valves for use in fire protection systems. !/ £1 our affirmative determination is based on our analysis of indicators of industry health and the effect on the industry of the LTFV imports. we have also determined that there is no material injury or threat. thereof to domestic producers of brass fog/straight stream nozzles, wedge disc hose gate valves, angle-type hose valves, pressure-regulating valves, and couplings by reason of LTFV imports of such products from Italy. · our negative determination is based upon the lack of a causal nexus between the conditions of the domestic industries and LTFV imports from Italy. Definition of the like product and domestic industry The relevant domestic industry in an antidumping investigation is defined in section 771(4)(A) as the domestic producers of the product which is like that being imported. [T]he term .. industry.. means the domestic producers as a whole of a like product, or those producers whose collective output of the like product constitutes a major !I Chairwoman Stern has deterlliined that an industry in the United States is not materially injured or threatened with material injury by reason of LTFV imports from Italy of pressure-restricting valves. £1 Vice Chail'.11'8n Liebeler determines that domestic producers of brass siame~e connections and brass pressure-restricting valves are not materially injured or threatened with material injury by reason of LTFV imports of such products. 4 proportion of the total domestic production of that prod~ct. 'J_/ , The term "like product" is defined in sect.ion 771(10) as: [A] product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation • • . • !I The imported products in this investigation are from Italy and are fire hose couplings, fog/straight stream nozzles, angle-type hose valves, wedge disc hose gate valves, siamese fire department connections, pressure-regulating valves, and pressure-restricting valves, all made of brass. There are domestically produced products which correspond to each of the imported products. ~/ All of the products are used in interior fire protection systems. In the preliminary investigation, the Commission found that there were seven like products. That determination was based on the different characteristics and end uses of each of the seven products. The additional information collected in this final investigation confirms this conclusion. The four types of valves under investigation all function to regulate the flow of water and are made of brass and are offered in two sizes: 1~112 or 2-1/2 inches, except for the wedge disc hose gate valve and the pressure- regulating valve which are available only in the 2-1/2 inch size. The valves differ from each other in appearance and specific function. Wedge disc hose valves are used to permit or stop the flow of water in interior fire protection systems. Angle-type hose valves are similar in function, but different in structure from the wedge disc hose gate valves. Also, angle-type valves are used in both standpipe and sprinkler systems, While wedge disc hose 'J..I 19 U. S •C • § 16 77 ( 4 )(A) . !I 19 U.S.C. § 1677(10). ~I Report of the Commission (Report) at A-5. 5 gate valves are used only in standpipe systems. Pressure-restricting valves are used to restrict the pressure level of water flowing to nozzles. Pressure-regulating valves reduce automatically an inlet water pressure to correspond to a desired outlet water pressure. ii Fog/straight stream nozzles are attached to hoses and can be adjusted to emit a straight stream of water, a fog spray, or completely shut off the flow of water~ Couplings are used to connect two components of a system, such as fire hoses. The couplings of the present investigation are generally only used in standpipe systems. Although couplings are available in aluminum, the majority of couplings are brass. Siamese connections are inlet valves located on the exterior of buildings. Fire fighters connect their hoses to these connections to increase the water pressure into the standpipe and/or sprinkler system of a building by means of pumps on fire trucks. The siamese connections under investigation have 2-1/2 inch inlets and a 4 inch outlet. The majority of siamese connections are brass, although ductile iron and aluminum connections are available. ll Although all of the above-described seven products are used in interior fire protection systems, their end uses and physical characteristics significantly differ. Accordingly, we find that each of these products is a separate like product. A second issue is whether the seven like products should be limited to brass products. Nozzles are made of brass or plastic. Couplings are made of aluminum or brass and siamese connections can be made of brass, iron or ii Id. at A-3-A-4. ll Id. at A-4-A-5. 6 aluminum. In regard to nozzles, the data show that brass nozzles are mainly used in the new construction market, whereas plastic nozzles are mainly used in the replacement mark~t. !I Thus, we find that plastic nozzles are not .. like .. brass nozzles. In regard·to couplings, brass couplings are mainly used in interior fire protection systems, whereas aluminum couplings are mainly used in municipal fire protection systems. Thus, we.determine that aluminum couplings are not .. like .. brass couplings. In regard to siamese connections, the corrosion properties of iron and aluminum significantly differ from the corrosion properties of brass. Thus, we determine that iron and aluminum siamese connections are not .. like .. brass siamese connections. A third issue is whether the domestic products are like the imported products regardless of whether the products are manufactured by the forging process or the sand casting process. The data show that the domestic brass products are manufactured by the sand casting process. !I The data are unclear as to which of the imported products are made by the forging process. 10/ In any event, regardless of how the brass products are manufactured, both the imported products and the domestic products are approved by independent testing laboratories for the same use and customers are not aware of any differences between the imported and domestic products. 11/ !I M· at A-4. !I Id. at A~s. 10/ Each of the products, except couplings, are approved by Underwriters Laboratories or Factory Mutual Research for use in fire protection systems. Moreover, purchasers are not aware of any differences between the two products nor are purchasers aware of whether they have purchased imported or domestic products. Id. 11/ Id. 7 Condition of the domestic industries 12/ Siamese connections The domestic industry producing brass siamese connections is clearly in distress. Domestic production of brass siamese connections declined significantly from 1981 to 1982 and then rose slightly in 1983. However, domestic production for 1983 was only 68 percent of the level of production in 1981. In the interim period of January-September 1984, domestic production rose by over 20 percent from the same period in 1983. 13/ U.S. producers• domestic shipments of siamese connections similarly declined. Specifically, domestic shipments declined significantly from 1981 to 1982 and then rose only slightly in 1983, but remained well below the 1981 level. For the interim period of January-September 1984, domestic shipments increased by almost 25 percent compared to the same period in 1983. 14/ While domestic shipments declined during the majority of the period of investigation, apparent consumption increased in 1983 and in January-September 1984. 15/ Domestic capacity for brass siamese connections increased over the period of investigation. During the interim periods of 1983 and 1984, domestic capacity was steady. Capacity utilization relative to brass siamese connections dropped by over 10 percent between 1981 and 1983. Although capacity utilization increased in January-September 1984 compared to the same period of 1983, .it remained well below the 1981 level. 16/ 12/ Host of the information available on this subject is business confidential. Thus, we must limit our discussion to general trends and public information. 13/ Report at A-19. 14/ Id. at A-22. 15/ Id. at A-8. 16/ Id. at A-20. 8 Pressure-restricting valves The domestic industry producing pressure-restricting valves is also not doing well. Domestic production of pressure-restricting valves declined by 10 percent from 1981 to 1982, and declined further in 1983. Production in 1983 was less than half of 1982 production. In the interim period of January-September 1984, domestic production increased compared with the same period in 1983, and exceeded production for all of 1983, but remained well below the 1981 level. 17/ U.S. producers' domestic shipments of pressure-restricting valves similarly fell almost 20 percent from 1981 to 1982 and fell further in 1983 to about one third of the level of shipments in 1981. For the interim period of January-September 1984, domestic shipments increased when compared to the same period in 1983. 18/ Domestic capacity for pressure~restricting valves increased by about 10 percent from 1981 to 1983. During the interim periods of 1983 and 1984 capacity remained steady. Capacity utilization relative to pressure- restricting valves steadily and significantly dropped from 1981 to 1983. Capacity utilization increased by approximately 10 percentage points in January-September 1984 compared to January-September of 1983, but remained well below the level in 1981. 19/ Fire hose couplings Domestic production of fire hose couplings declined by nearly 20 percent from 1981 to 1982 and then rose slightly in 1983. In the interim periods of 17/ Id. at A-19. 18/ Id. at A-22. 19/ Id. at A-20. 9 January-September 1983 and 1984, domestic production remained steady. 20/ U.S. producers' domestic shipments of fire hose couplings similarly fell by nearly 20 percent from 1981 to 1982 and then rose by over 1o·percent in 1983. For the interim period of January-September 1984, domestic shipments increased by about 15 percent compared to the same period in 1983. 21/ While domestic shipments for the interim period increased, apparent consumption decreased. 22/ Domestic capacity for fire hose couplings was fairly steady between 1981 and 1983, increasing irregularly over the period of investigation. Capacity utilization relative to fire hose couplings showed corresponding trends, dropping from 1981 to 1982, and then rising in 1983. Capacity utilization increased in January-September 1984 compared to January-September 1983. 23/ Fog/straight stream nozzles Domestic production of fog/straight stream nozzles declined by almost a third between 1981 and 1983. However, in the interim period of January- September 1984, domestic production exceeded that for all of 1981. 24/ Similarly, U.S. producers' domestic shipments of fog/straight stream nozzles similarly fell by more than a third between 1981 and 1983. During the interim period of 1984, shipments were almost double that of the interim period of January"'-September 1983. 25/ Domestic capacity for fog/straight stream nozzles declined slightly between 1981 and 1983 before increasing in the interim period of January- 20/ Id. at A-19. 21/ Id. at A-22. 22/ Id. at A-8. 23/ Id. at A-20. 24/ Id. at A-19. 25/ Id. at A-22. 10 September 1984. Capacity utilization relative to fog/straight stream nozzles dropped by approximately 10 percentage points from 1981 to 1982, and fell further in 1983. Capacity utilization increased by over 10 percentage points for the interim periods of 1983 and 1984. 26/ .Angle-trpe hose valves Domestic production of angle-type hose valves rose by approximately 10 percent between 1981 and 1982 and then declined by approximately 30 percent in 1983. However, in the interim period of January-September 1984 domestic production increased nearly 75 percent compared with the same period in 1983. 27/ U.S. producers' domestic shipments of angle-type hose valves similarly rose from 1981 to 1982, and then declined in 1983. For the interim period of January-September 1984, domestic shipments increased approximately 80 percent compared with the same period in 1983. 28/ Domestic capacity for angle-type hose valves increased in 1982, remained relatively steady in 1983, and in the interim period of January-September 1984 rose compared with the same period in 1983. Capacity utilization relative to angle-type hose valves dropped from 1981 to 1983. However, capacity utilization increased by approxi11lately 25 percentage points in January-September 1984 compared with January-September 1983. 29/ 26/ Id. at A-20. 27/ Id. at A-19. 28/ Id. at A-22. 29/ Id. at A-20. 11 Wedge disc hose gate valves Domestic production of wedge disc hose gate valves rose between 1981 and 1982, before dropping in 1983. 30/ However, 1983 production remained above 1981 levels. In the interim period of January-September 1984, domestic production remained steady compared to the same period in 1983 declining insignificantly. 31/ U.S. producers• domestic shipments of wedge disc hose gate valves rose by approximately 25 percent between 1981 and 1982, and then in 1983 declined back to the 1981 level. 32/ For the interim period of January-September 1984, domesti~ sl\ipments rose very slightly compared with the same period in 1983. 33/ Domestic capacity for wedge disc hose gate valves increased over the period of 1981-83. 34/ Domestic capacity also increased during the interim period of January-September 1984 compared to the same period in 1983. 35/ Capacity utilization relative to wedge disc hose gate valves rose by almost 20 percent from 1981 to 1982, and then declined by approximately 10 percentage points in 1983. Capacity utilization decreased very slightly in January- September 1984 compared with January-September 1983. 36/ Pressure-regulating valves Domestic production of pressure-regulating valves increased by more than 20 percent between 1981 and 1982, and then dropped by almost half in 1983. 30/ Id. at A-1.9. 31/ Id. 32/ Id. at A;...22. 33/ Id. 34/ Id. at A-20. 35/ Id. 36/ Id. 12 However, in the interim period of January-September 1984, domestic production lncreas~d. 37/ U.S. producers' domestic shipments of pressure-regulating valves rose betW'een 1981 and 1982, but then declined in 1983 to almost half the 1982 level and well below the 1981 level. For the interim period of January-September 1984, domestic shipments remained steady compared to the same period in 1983, increasing only slightly. Bl Domestic capacity for pres9ure-regulating valves rose steadily, albeit slightly, between 1981 and 1983, and was unchanged during each of the interim periods of 1983 and 1984. ~/ Capacity utilization relative to pressure- regulating valves rose bf almost 10 percentage points from 1981 to 1982, and tben declined in 1983. Capacity utilization increased slightly in January- September 1984 compared with January-September 1983. 40/ §aterial injury bI reason of LTFV import.a In considering the issue 4f material injury, the Act instructs the Conmission to consider, among other factors: (i) the volume of imports of the merchandise which is the subject of the investigation; (ii) the effect of import.a of that merchandise on prices in the united states for the like product; and (iii) the impact of such merchandise on the domestic producers of the like product. 41/ 371 Id. at A-19. 38/ Id. at A-22. 39/ Id. at. A-20. 40/ Id. 41/ 19 U.S.C. § 1677(7)(B). 13 Brass siamese connections Imports of brass siamese connections from Italy increased substantially during the entire period of investigation. 42/ Specifically, imports of siamese connections almost doubled from 1981 to 1982, and in 1983 imports more than doubled the import level of 1982. For the period of January-September 1984, imports rose by approximately 40 percent compared with the same period of 1983. 43/ Imports of siamese connections from Italy as a share of consumption also rose significantly over the entire period of the investigation. Specifically, the ratio was 25.2 percent in 1981, 49.S percent in 1982, and 69.7 percent in 1983. The ratio of imports to apparent consumption rose from 68.8 percent for the period of January-September 1983 to 71.0 percent for the same period in 1984. 44/ The pricing information regarding imports of siamese connections indicate substantial margins of underselling during 1982 and 1983. 45/ Additionally, domestic prices were significantly depressed during January-September 1984. 46/ 42/ Report at A-32. 43/ Chairwoman Stern noted that of the seven like products under investigation, imports and import penetration grew in January-September 1984 only with respect to siamese connections and wedge disc hose gate valves. Imports of siamese connections grew rapidly over the entire course of the investigative period from 25 percent in 1981 to 71 percent in January- September 1984. The wedge disc hose gate valve import penetration, by contrast, was at its highest in 1981, falling irregularly from 64 percent (1981) to 52 percent (January-September 1984). 44/ Report at A-33. 45/ Id. at A-43. 46/ Chairwoman Stern notes that data on the record indicate that there were significant weighted average LTFV margins for the subject imports of siamese connections. These margins account in large part for the ability of the imports to undersell the domestic product, particularly during the most recent period. For no other like product considered in this investigation was there any evidence that LTFV sales played a measurable role in the success of the imports. In fact for most of the other pr.oducts, there were no LTFV sales whatsoever. 14 We conclude that a domestic industry in the U.S. is materially injured by reason of imports of.brass siamese connections.from Italy which are being sold at LTFV. Pressure-restricting valves Imports of pressure-restricting valves from Italy tripled between 1981 and 1982 and almost doubled again between 1982 and 1983. 47/ For interim periods of January-September 1983 and 1984, the volume of imports of pressure-restricting valves remained steady. 48/ Conversely, domestic shipments of pressure-restricting valves declined significantly in 1981, 1982, and 1983. 49/ Although for the interim period of January-September 1984 domestic shipments of pressure-restricting valves slightly increased from the same period in 1983, domestic shipments were less than the 1981 level. The ratio of imports from Italy to apparent consumption, in both units and value, increased dramatically during the period of investigation, except for the interim period of 1984. Specifically, the ratio in units was 12.8 percent for 1981, 35.3 percent for 1982, and 64.9 percent for 1983. 50/ For the interim period of 1983, the ratio was 65.1 percent and for the same period in 1984 the ratio was 51.0 percent. Domestic producers• weighted average prices for 2-1/2 inch pressure- restricting valves decreased in 1984 by approximately 20 percent compared with prices in the first half of 1983. 51/ This reduction in domestic prices occurred in response to dramatic increases in the level of imports. 52/ ~I Report at A-32. 48/ Id. 49/ Id. at A-22. 501 Id. at A-34. 51/ Id. at A-38. 52/ Chairwoman Stern notes that the reduction in price of the domestic product did not commence until the fourth quarter of 1983, after--not while--the level of imports increased. 15 On the basis of the foregoing analysis, we determine that an industry in the United States is materially injured by reason of imports of brass pressure-restricting valves from Italy which are being sold at LTFV. 53/ Ho material injury or threat thereof by reason of brass couplings, nozzles, angle-trpe hos~ valves, wedge disc gate hose valves, and pressure-regulating Y~l:!fil! Couplings Imports of couplings from Italy increased slightly between 1981 and 1982, but then fell in 1983 to well below 1981 levels. 54/ During the interim periods of 1983 and 1984, imports of couplings further declined. During the time period that the volume of imports of couplings was decreasing, apparent consumption of brass couplings in both units and dollars was also decreasing. 55/ However, imports from Italy bore the brunt of the decline. The ratio of imports from Italy to apparent consumption for brass couplings decreased from 1981 to 1983. Specifically, after rising from 60.l percent in·1981 to 66.l percent in 1982,.import penetration dropped to 58.4 percent in 1983. The trend continued during the interim periods of 1983 and 1984. During January-September 1983, the ratio was 57.9 percent and then dropped significantly to 50.7 percent during the same period of 1984. 53/ Chairwoman Stern dissents from the majority's conclusion. In January-September 1984, on a unit basis, there was a substantial decline in import penetration. During the prior years 1981 through 1983, LTFV sales made no measurable contribution to the success of the Italian imports. Margins of underselling by the imports in those years exceeded 30 percent in all quarters but one. By comparison, data on the record indicate that LFTV margins on this product were below the 1.28 percent weighted average found for all products in the investigation. LTFV imports are only unfair under title VII when they result in material injury or the threat thereof. such a causal nexus has not been demonstrated for pressure-restricting valves. 54/ Report at A-32. 551 Id. at A-33. 16 Although some domestic producers lowered prices in early 1984 and the weighted average of domestic producers' prices appears to have declined, it is noteworthy that domestic production, shipments, and capacity utilization were already rising in 1983, prior to these developments. These trends intensified in 1984. 56/ On the basis of the foregoing analysis, we determine that an industry in the United States is not materially injured or threatened with material injury by reason of imports of coupliugs from Italy. Hozzles Imports of brass f og/stra~ght stream nozzles decreased irregularly between 1981 and 1983 and also decreased during the interim periods of 1983 and 1984 by almost 10 percent. Apparent consumption of nozzles decreased in 1982, but rebounded in 1983 and in interim 1984 compared with interim 1983. While the volume of imports of nozzles decreased in interim 1984 compared with interim 1983, domestic producers• shipments, production, and capacity utilization substantially increased during the same period. Thus, the volume of imports decreased while apparent consumption increased and the domestic industry benefited. This fact is further evidenced by the recent decrease in the import penetration ratio. The ratio of imports to apparent consumption in units was 55.5 percent in 1981 and 62.5 percent in 1983. A significant decrease was observed for the interim periods of January-September 1983 and 1984; the ratios of imports from Italy for these periods were 64.5 percent and 47.0 percent, respectively. 56/ Id. at A-19-A-20 and A-22. 17 Though some domestic producers cut prices in late 1983 and the weighted average.domestic producers' price apparently fell temporarily, prices recovered by the third quarter of 1984. 57/ On the basis of the foregoing analysis, we determine that an industry in the United States is not being materially injured or threatened with material injury by reason of imports of brass fog/straight stream nozzles from Italy. AI:lgle-type hose valves Imports of brass angle-type hose valves significantly decreased over the entire period of the investigation in both units and dollars. 58/ Imports of angle-type hose valves declined by almost 25 percent between 1981 and 1983. A similar although less dramatic declining trend was observed between the interim periods of 1983 and 1984. While imports of angle-type hose valves were decreasing, apparent consumption was also generally decreasing, except for the interim period of 1984. As a consequence, the ratio of imports to apparent consumption remained fairly stable during 1981-83, before decreasing substantially from 58.1 percent during interim 1983 to 39.0 percent in interim 1984. 59/ While imports substantially decreased between the interim periods of 1983 and 1984, domestic production and capacity utilization actually increased by approximately 70 percent and approximately 25 percentage points, respectively. In terms of prices, domestic producers' prices showed no parlicular trend. Prices rose in late 1982, but dipped back down in early 1984. Prices have again appreciated over 1984, and third-quarter 1984 prices 571 Id. at A-38. 58/ Id. at A-32. 59/ Id. at A-33. 18 are well above prices from third quarter 1982. such trends evidence that the domestic industry is not materially injured or threatened with material injury by reason of imports of brass angle-type hose valves being sold at LTFV. Wedge disc hose gate valves Imports of wedge disc hose gate valves declined steadily between 1981 and 1983 in both units and. dollars. Imports of wedge disc hose gate valves fell by about 20 percent between 1981 and 1982 and further declined in 1983 to less than half the 1982 level. Although during the interim period of 1984 imports increased from the level of interim period 1983, domestic producers' shipments increased also. 60/ Import penetration fell from a peak of 64.4 percent in 1981 to 52.2 percent in interim 1984. Moreover, U.S. producers' weighted average prices have increased substantially since late 1983. 61/ Thus, there is no evidence of price suppression in the domestic industry as a result of the imports. On the bas.is of the foregoing analysis, we determine that an industry in the United States is not materially injured or threatened with material injury by reason of imports of brass wedge disc hose gate valves from Italy. Pressure-regulating valves Imports of pressure-regulating valves began in January-September 1984, at which time only a very small number of units entered the United States. The ratio of imports to apparent consumption amounted to only a small percent in both units and value. 62/ Further, evidence on record indicates a design flaw in the imported pressure-regulating valves, thus eliminating the market effect 60/ Id. at A-22. 61/ Id. at A-38. 62/ Id. at A-34. 19 of these imports. 63/ Domestic prices in 1984 rose slightly over prices in 1983. On the basis of the foregoing analysis, we determine that an industry in the United States is not being materially injured or threatened with material injury by reason·of imports of brass pressure-regulating valves from Italy for use in fire protection systems. In regard to threat of material injury, we have discussed the trends for the individual products above. We note that Giacomini is currently operating at almost full capacity. Moreover, Giacomini is conmitted to long term markets, other than the United states, and thus we find that it is unlikely that Giacomini will shift production to the United States. 64/ Conclusion We recognize that the effects from LTFV imports are not to be weighed against the effects associated with .other factors, such as the volume and prices of other imports or changes in demand which may be contributing to overall injury to the domestic industry. 65/ We also note that the Commission may consider information that indicates injury is caused by factors other than LTFV imports. 66/ Further, the Commission's determination with respect to causation "is a matter for the judgment of the ITC." 67/ 68/ Based on the record developed in this investigation, we have not found that LTFV imports of wedge disc hose gate valves, angle-type hose valves, pressure-regulating valves, nozzles and couplings have significantly affected all the relevant 63/ Respondent's Post Hearing Brief at 7. 64/ Transcript of the Hearing at 122-23. 65/ s. Rep. No. 249, 96th Cong., 1st Sess. 74 (1979). 66/ Id. 6 71 Id. 68/ Commissioners' Lodwick and Rohr determinations are based on "traditional indicators" of industry health and the relationship of those indicators to the imports. 20 economic factors which have a bearing on the state of each of the domestic industries. 69/ 69/ Conunissioners Lodwick and Rohr note that in determining whether a domestic industry is materially injured by reason of LTFV imports the Commission considers (1) the volume of imports, (2) the effect of the imports on the price of the like product, and (3) the impact of imports on domestic producers of the like product. . In this investigation, though the import penetration varies widely among the seven industries, in general the market positions of imports from Italy have been substantial throughout \he 1981-84 period of investigation. Further, in late 1983 at least one of the major domestic producers broadly reduced prices on many of the like products in these industries in an effort to maintain or increase market share. Thus, in making their determinations they have paid particular attention to trends in import penetrations and domestic producer prices, and the interrelationship between them. They find the following information particularly noteworthy in their affirmative determinations. (1) For siamese connections, import penetration has climbed steadily from 25 percent to over 70 percent, and prices have declined substantially in 1984. (2) For pressure-restricting valves, import penetration in interim 1984 is also much above the rate in 1981, and prices have declined substantially in 1984. They find the following information telling in their negative determinations. (1) For couplings, import volumes and penetration rates were already falling below 1981 and 1982 levels in 1983, and though domestic producer prices were lowered in early 1984, the reductions merely accelerated these trends. (2) For nozzles, though import volumes fell during 1981-83, penetration rates rose modestly. However, in 1984 both the volume and penetration fell, and though prices were temporarily lowered, by the third quarter of 1984 prices had rebounded to just above year earlier levels. (3) For angle valves, import volumes have fallen continuously since 1981, though penetration rates were stable during 1981-83 before falling in 1984. Prices have shown no marked trend, rising in late 1982, falling in early 1984, and appreciating again during 1984. (4) For wedge disc hose gate valves, import volumes and penetration rates have generally fallen over the period of . investigation, while prices have climbed since late 1983. (5) For pressure-regulating valves, imports entered only in 1984 and due to a design flaw had no market impact. Prices rose irregularly during 1984. 21 ADlH'l'IONAL VIEWS OF VICE CHAIRMAN LIEBELER I join with the majority in its determination for the five industries where it found that there was no material injury or threat of material injury by reason of sales allegedly at less than fair value (LTFV). I cannot. however. agree with the Commission majority's affirmative determination with respect to brass siamese connectors and brass pressure restricting valves. I see no basis on which to distinguish these two industries from the other five. The majority appears to rely on an increase in the volume of imports for brass siamese connectors and pressure restricting valves. These increases. however. can be explained by their recent introduction by Giacomini into the United States market and their use in a number of different fire protection systems. !/ In the rest of this opinion I provide some general considerations that apply to all seven industries. Title VII directs the Commission to consider. among other factors. the volume of imports. their effect on price. and the . . d . . d 21 h •impact on the omest1c in ustry •. - T e question cannot simply be whether the industry would be better off if the allegedly LTFV imports were excluded from the market. because the answer would always be in the affirmative. There are compelling reasons to believe that in the instant investigation any injury to any of the seven domestic industries under consideration is not the result of sales allegedly at LTFV but because of other factors. l/ Respondent's Post-Hearing Brief. at 2. 2/ 19 u.s.c. 1673 (1982). 22 First. there have been major changes in building codes throughout the United States that have affected the demand for the brass components used in fire protection systems. Second. the demand for these brass comp6nents is derived from the demand for new buildings that are required to have these sys~ems. Because-of a slump in construction. the apparent consumption of brass components for use in fire protection systems has declined since 1981. Measured both by quantity Al and real value. 41 imports of brass components for use in fire protection·systems from Italy have also decreased from year to year since 1981. Imports from Italy have such a large share of the domestic market for brass components not because they are allegedly being sold at LTFV. but because of the greater efficiency of Giacomini as compared to the domestic producers. Most foreign products are forged. rather than sand-cast like the domestic products. which reportedly makes the product stronger and allows the product to be manufactured using less material . .§.I Four United States distributors appear to purchase both imported and domestically manufactured components. rather than 6/ purchasing only the domestic or foreign product. - Whether they do so in order to ensure supply because Giacomini is ope~ating at. close to full capacity and cannot increase Al Report. A-15. ~I Report. Table XIV deflated by consumer price index . .§.I Report. A-5. ~I Report. A-14. 23 7/ sales. - or because the foreign and domestic products are not perfect substitutes is unclear. All of these explanations suggest that the imported components. which are allegedly being sold at LTFV. are not the cause of injury to the domestic industry. This is borne out in the case of pressure restricting valves for which. from interim 1983 to interim 1984. the ratio of imports to apparent consumption fell from 65 percent to 51 percent at the same time a substantial price . f d . d 8 I Th h d 1dif erence isappeare . - at t e rop was not arger suggests that imports have not been the cause of injury to the domestic ·industry. Finally. based on the value of imports from Italy in 1983, which was $2.14 million dollars. ~/ assuming a duty of 1.28 percent is applied the cost to Giacomini of selling the same products would increase by only about $25,000. For the reasons already stated. this would not significantly affect the level of imports from Italy. domestic production. or apparent consumption. Thus. based on the nearly $4 million in sales by . . d . 10/ . dthe domestic in ustry in 1983, ~ assuming U.S. pro ucers increase their prices by 1.28 percent. the anti-dumping duty will allow them to increase revenues by only $50,000. For the reasons given above. as well as those given in the opinion. I determine that a~ industry in the United States is 7/ Transcript of the Hearing at 122. J!/ Report. Tables XIV. XXI.I. ~/ Report. Table XIV. 10/ Report. Table XIV. 24 neither materially injured or threatened with material injury by reason of allegedly LTFV imports of brass components for fire protection systems from Italy. 25 VIEWS OF COMMISSIONER ECKES I determine that industries in the United States are materially injured by reason of imports of valves, nozzles, couplings, and connections of brass from Italy which are being sold at less than fair value (LTFV). In addition to analysis of my injury determination, I also have included in these views a discussion of procedural irregularities regarding this investigation. The domestic industry The term .. industry .. is defined in section 771(4)(A) of the Tariff Act of 1930 as .. the domestic producers as a whole of a like product, or those producers whose collective output of the like product constitutes a major proportion of the total domestic production of that product ... !/ Section 771(10), in turn, defines a .. like product'' as one ..which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation ... ~/ Both the imported and the domestic products under this investigation consist of four principal types: valves, nozzles, couplings, and fire department inlet connections. ~/ All of the products are brass components suitable for use in interior fire protection systems, i.e., standpipe systems and/or sprinkler systems. !I Furthermore, the subject products from Italy are interchangeable with the domestic products and, therefore, can be, and are used in lieu of the domestic products. ~/ !I 19 U.S.C. § 1677(4)(A). ~/ 19 u.s.c. § 1677(4)(10). ~I For a thorough description of the individual products subject to this investigation see the Commission's opinion in Certain Valves, Nozzles, Couplings and Connectors of Brass from Italy for Use in Fire Protection Systems, Inv. No. 731-TA-165 (Preliminary), USITC Pub. 1500 (1984). !I Report at A-3. For a more comprehensive description of the products and their uses, ~. supra, at 4-6. ~I Id. at A-5. 26 Like my colleagues, I find that there are seven like products. ii However, I note that the domestic producers of these products are unable to provide segregated profit-and-loss and employment data for each of these products. This is not surprising since the products subject to this investigation can be, and often are, all produced in the same plant, generally I using similar types of equipment, 11 and employees with similar skills. In the aggregate, the subject products are principally produced by three domestic producers (Badger-Powhatan, Elkhart, and John w. Hoon, Inc.), each of which produces the entire range, or virtually the entire range, of products. !I Given the lack of essential segregated data, I find that I must assess the impact of imports upon the ••narrowest group or range of products .. for which such information is available, in accordance with section 771(4)(D) of the Tariff Act of 1930: [I]f the domestic production of the like product has no separate identity in terms of such criteria [as production process or producer's profits], then the effect of the subsidized or dumped imports shall be assessed by the examination of the production of the narrowest group or range of products, which includes a like product, for which the necessary information can be provided. !I In this investigation, the narrowest range includes all seven products. Thus, despite the fact that these individual products have distinct characteristics and uses, I am compelled to assess the impact of the LTFV imports upon these products as a single industry. ii Respondent did not address th~ issue of like product(s) and domestic industry during the course of this investigation. II Nozzles and couplings are finished on different equipment from valves. Report at A-3. !I Id. at A-13. The subject products are sold individually or in combination with each other. Transcript of the hearing (Tr.) at 68. They may also be c0mbined with other materials, such as fire hoses, and subsequently resold. !I 19 U.S.C. S 1677(4)(D). 27 Condition of the domestic industry Although domestic production of brass valves, nozzles, couplings, and connections rose slightly from 1.20 million pounds in 1981 to 1.29 million pounds in 1982~ there was a significant decline in 1983 to 872,600 pounds. Some improvement was shown in the interim period of January-September 1984 when domestic production rose to 929,100 pounds from 665,800 pounds for the same period in 1983. 10/ U.S. producers' domestic shipments increased slightly from $5.8 million in 1981 to $5.9 million in 1982, but then fell to $3.9 million in 1983. Although data for the interim period January-September 1984 show an increase to $3.9 million compared with $3.0 million for the period January-September 1983, that level is still well below the 1981 and 1982 levels. 11/ Domestic capacity increased slightly during the period under investigation. 12/ However, capacity utilization decreased steeply between 1981 and 1983 fC-om 50.7 percent in 1981, to 50.3 percent in 1982, to 33.8 percent in 1983. For the period January;...september 1984, capacity utilization increased to 47.0 percent, still below 1981 and 1982 levels. 13/ Data on domestic employment and wages also verify my conclusion that this industry is ma~erially injured. The number of production and related workers engaged in the production of brass valves, nozzles, couplings, and connections increased from 70 in 1981 to 78 in 1982, but then decreased to 70 again in 1983. The number of hours worked by these same employees rose in 1982 to 122,000 hours from 107,000 hours in 1981, but then dropped substantially to 92,000 hours in 1983. 14/ 10/ Report at A-19. 11/ Id. at A-22. 12/ Id. at A-20. 13/ Id. 14/ Id. at A-25-A-26, Table 10. 28 Aggregate profit-and-loss data for the subject like products also show declines. Aggregate net sales of the responding producers increased from $4.8 million in 1981 to $5.1 million in 1982, or by 6 percent, but then dropped by nearly 41 percent to $3.0 million in 1983. During the interim period January-September 1984, net sales rose by 41 percent to $2.0 million, compared with $1.4 million for the corresponding period of 1983, but were still substantially below the net sales levels achieved in 1981 and 1982. 15/ Operating income declined from $721,000, or 15.0 percent of sales in 1981 to $249,000, or 8.2 percent of sales in 1983. Further, cost of goods sold, as a share of sales, increased from 66.9 percent in 1981 to 70.3 percent in 1983, lowering the gross profit margin by 3.4 percentage points during the· same period. 16/ Material injury or threat thereof by reason of LTFV imports In considering the issue of material injury, the Commission considers, among other factors, the volume of imports of the merchandise Which is the subject of the investigation, the effect of imports of that merchandise on prices in the United States for the like product, and the impact of such merchandise on the domestic producers of the like product. 17/ Consideration of these factors indicates that the subject imports are a cause of material injury to the domestic industry. The value of imports of these products from Italy remained significant during the entire period of investigation. 18/ Specifically, imports from 15/ Id. at A-26-A-27, Table 11. Three producers accounted for the majority of sales. 16/ Id. at A-27. 17/ 19 U.S.C. § 1677(7)(B). 18/ Report at A-32. 29 Italy were valued at $2.2 million in both 1981 and 1982 and $2.l million in 1983. For the interim periods of January-September 1983 and 1984, imports remained stable at $1.6 million. 19/ The value of imports of these products from Italy as a share of consumption rose significantly over the entire period of the investigation. Specifically, in dollar value imports from Italy rose from 27.7 percent of domestic consumption in 1981 to.35.5 percent in 1983. 20/ Although the import penetration ratio declined in the interim period of January-September 1984 to 29.6 percent compared with 34.9 percent in the same period of 1983, it remained above 1981 and 1982 levels. 21/ The pricing information regarding imports indicate significant margins of underselling by the subject imports during 1982 and 1983. 22/ Additionally, the data collected demonstrate that domestic prices were significantly depressed during January-September 1984. For example, one of the major U.S. producers of these products decreased domestic pr.ices to approximately the price level of eompeting imports from Italy from the last quarter of 1983 through 1984. 23/ On the basis of the foregoing analysis, I determine that the domestic industry is materially injured by reason of LTFV imports of valves, nozzles, couplings, and connections of brass from Italy. 19/ Volume figures for imports are not available because units of different product categories cannot be totalled. 20/ Report at A-34. 21/ This investigation has been pending for over one year, since January 1984 when the petition was filed. Commerce made its preliminary affirmative determination in July 1984. Thus, import levels during 1984 are in all likelihood understated. 22/ Report at A-37. Most of the information available regarding prices and margins of underselling and overselling is confidential. Thus, this discussion is limited to general trends and non-confidential information. 23/ Tr. at 31. 30 Procedural irregularities Another matter requires discussion at this point, although it had no bearing on my own determination in this investigation. Nevertheless, it is an important matte~, one involving the scope of the Commission's jurisdiction in title VII investigations, the essential fairness of our quasi-judicial procedures, and the administration of our trade laws. In this investigation one of my Commission colleagues asked the Commission's investigative staff to calculate the LTFV margins on a product-by-product basis. This action occurred after the Department of Commerce (Cmnmerce) determined in its official publ i.shed notice that the overall weighted-average LTFV margin for the subject brass fire protection products from Italy is 1.28 percent. Commerce determined only the overall weighted-average margin, and did not calculate margins on a product-by-product basis. There is a sound tradition within the International Tra<lP. Gommission (ITC) that Commission staff provide whatever information a Commissioner requests. As a consequence, Commission staff cannot be faulted for complying with a Commissioner's request for LTFV margin information on a product-by-prodμct basis. In fact, it appears that the same Commissioner may have requested similar information in the past. Whatever the precedent, the request in the present investigation was irregular and warrants general attention. Some of the unusual aspects appear in an internal memorandum from the Acting Director, Office of Investigations, to the Commission (INV-I-029, dated Feb. 11, 1985, at p. 3) as follows: Pursuant to a request from Gl1airwoman Stern, the Commission staff bas calculated the margins on a product-by-product 31 basis. These margins were not provided by the Commerce Department; however, staff at commerce have agreed that the methodology used by the Commission staff is the same as that which would have been used by Commerce if it had chosen to announce margins on a product-by-product basis. The calculations were made from Commerce's official computer printout on this investigation; the printout was obtained by the Commission staff from the attorney for the respondents, which had obtained the printout via a Freedom of Information Act request. (Emphasis added). In a subsequent memorandum to the Commission from the Acting Director of Investigations (Il!IV-I-031, dated Feb. 12, 1985), the staff quite correctly notes that .. it is, of course, the responsibility of the Department of Commerce to calculate dumping margins and it has not done so in this investigation on a product-by-product basis.•• (Emphasis added). This Commissioner believes that in computing LTFV margins the Commission has exceeded its statutory authority, ignored relevant Court opinions defining this authority, allocated improperly public resources, and employed irregular procedures jeop_ardizing the interests of parties to this proceeding. Nothing in the statute or the legislative history authorizes the ITC to compute LTFV margins. Instead, in the Trade Agreements Act of 1979 Congress established a specific bifurcated procedure which directs Commerce to determine dumping margins and the ITC to make injury determinations. In writing the 1979 law and in amending it in 1984, Congress made specific references to the procedures Commerce must employ in its margin determinations. Nowhere in the statute or legislative history is there the sligh~est suggestion that Congress intended for the ITC to conduct its own margin investigations. Nor is there anything in the statute or legislative history that directs the Commission to go beyond the specific dumping margins provided by Commerce, under the guise of conducting a .. thorough investigation.•• 32 The law does direct Commerce to make available to the Commission all information upon which its affirmative determination was based and which the Commission considers relevant to its injury determination. 19 U.S.C. S 167ld(c)(l)(A). This language, however, is not an invitation for the Commission to reanalyze the dumping margins and compute them on a product-by-product basis, if it chooses. Such an interpretation not only undercuts the carefully crafted bifurcated division of authority, but also invites two public agencies to duplicate efforts unnecessarily. In drafting the trade statutes, Congress has displayed appropriate concern that the administering agencies streamline procedures so as not to waste public resources. (For example, in the 1984 revisions Congress provided for consolidating hearings regarding the same product in simultaneous antidumping and countervailing duty investigations.) our reviewing court emphasized the statutory division of authority between the two administering agencies in the Sprague case. 488 F. Supp. 910 (CUst. Ct.), as modified on reh'g, 84 cust. Ct. 260 (1980). An earlier version of the present law applied in that case, and in Sprague the administering authority was the Department of Treasury, not Commerce. Although Sprague was conducted under the Antidumping Act of 1921, the same relationship existed between the administering authority and the Commission as exists under the present law, title VII of the Tariff Act. In Sprague the reviewing court stated quite clearly that. the .. Commission has no authority to refine or modify the class or kind of merchandise found to be, or likely to be, sold at LTFV... In the present case, Which admittedly does not concern the question of "class or kind of merchandise; .. the same logic must apply. The ITC has no authority to recalculate at will the margins published by the 33 administering authority in its notice of the final determination. Such action is clearly contrary to the recognition by the Court of the fundamental bifurcation of statutory functions which underlies the Sprague decision. Let me P.mphasize that the Federal Register notice published by Commerce as required by section 735(d) does not contain any margins calculated on a product-by-product basis. The statute provides: Publication of Notice of Determinations. - -Whenever the administering authority or the Commission makes a determination under this section, it shall notify the petitioner, other parties to the investigation, and the other agency of its determination and of the facts and ~~nclusions of law upon whl~h the determination is based and it shall publish notice of its determination in the Federal Register. (Emphasis added). 19 U.S.C. S 167ld(d). In light of this provision I arn especially concerned about the irregular procedures employed in this recomputation of margins. Commerce did not provide product-by-product margins for reasons best known to that agency. Instead, at the direction of a Commissioner, the Commission staff proceeded to compute product-by-product margins based on a printout obtained from the attorney for respondents. To my knowledge, counsel for petitioner and other parties to the investigation had no opportunity to comment on this procedure or to evaluate the results of that analysis. Nor, to my knowledge is there any official comment from Commerce on the record of this investigation alU!::;t.ing to the validity of the methods used or the results reached. Moreover, even if the Commission has the authority to compute margins, it did not comply with the requirement that it publish a notice in the Federal. Register informing the petitioner, parties, and Commerce of "the facts and conclusions of law upon which the determination is based." Consequently, I would submit that the additional calculations on a product-by-product basis and the use of such margins which are not set forth 34 in the required notice are clearly at odds with the statute and are of dubious standing as a matter of law. Surely such practice is contrary to the sound administration of this nation's trade laws in accordance with internationally-recognized principles of transparency and predictability. Let me summarize. In my judgment the request that the Commission staff compute product-by-product margins involved irregular and unlawful procedures. It exceeded this agency's statutory authority and compromised the integrity of this investigation. It is the notice of Commerce's final margin determination which is controlling in title VII investigations. That is what Congrefis intended. I am fearful that the status afforded internal calculations may have affected my colleagues' determination in this investigation to the detriment of the petitioner and the sound administration of this nation's trade laws. A-1 INFORMATION OBTAINED IN THE INVESTIGATION Introduction On January 23, 1984, a petition was filed with the U.S. International Trade Commission (Commission) and the U.S. Department of Commerce (Commerce) by counsel for Badger-Powhatan, a division of Figgie International, Inc., Charlottesville, VA, on behalf of the domestic industry producing brass interior fire protection products. The petition alleged that imports of brass interior fire protection products from Italy are being, or are likely to be, sold in the United states at less than fair value (LTFV). Accordingly, effective January 23, 1984, the Commission instituted investigation No. 731-TA-165 (Preliminary) under section 733(a) of the Tariff Act of 1930 to determine whether there is a reasonable indication that an industry in the United States was materially injured, or threatened with material injury, or the establishment of an industry in the United States was materially retarded, by reason of imports from Italy of certain brass valves, couplings, nozzles, and connections for use in fire protection systems, provided for in items 657.35, 680.14, and 680.27 of the Tariff Schedules of the United States (TSUS). On Karch 8, 1984, the Commission unanimously determined that there was a reasonable indication that industries in the United States were materially injured by reason of imports from Italy of fire hose couplings, fog/straight stream nozzles, angle-type hose valves, wedge disc hose gate valves, single and double clapper siamese fire department connections, and pressure restricting valves, all the foregoing of brass and for use in fire protection systems, provided for in items 657.35, 680.14, or 680.27 of the TSUS, which were allegedly being sold in the United States at LTFV. !I The Commission further determined that there was a reasonable indication that an industry in the United States was threatened with material injury by reason of imports from Italy of pressure regulating valves of brass, provided for in item 680.27 of the TSUS, which were alleged to be sold in the United States at LTFV. £1 On July 10, 1984, Commerce made a preliminary determination that certain valves, couplings, nozzles, and connections, of brass, from Italy, suitable for use in interior fire protection systems, are being, or are likely to be, sold in the United States at LTF'V, as provided in section 733 of the Tariff Act of 1930, as amended (19 U.S.C. 1673b). ]_I As a result of Commerce's affirmative preliminary determination of LTl''V sales, the Commission instituted investigation No. 731-TA-165 (J:"inal), effective July 10, 1984, to determine whether an industry in the United States is materially injured, or is threatened with material injut·y, or the establishment of an industry is materially retarded, by reason of imports from Italy of the subject products. Notice of the institution of the investigation and of the public hearing to be held in connection therewith was given by posting copies of the notice at the !I Certain Valves, Nozzl~and Connectors of Brass from Italy for Use in Fire Protection Systems: Determination of the Commission in Investigation No. 731-TA-165 (Preliminary) ... , USlTC Publication 1500, March 1984. Also see the Federal Register of Mar. 14, 1984 (49 F'R 9629). £! Commissioner Stern found no reasonable indication of material injury or threat thereof by reason of LTF'V imports of pressure regulating valves from Italy. ]_! A copy of Commerce's preliminary determination is presented in app. A. A-2 Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register of July 25, 1984 (49 FR 30029). ll In response to a request from counsel for the respondent, Commerce postponed its final determination on August 30, 1984. Accordingly, the Commission also postponed its final determination on September 13, 1984. ~/ On November 30, 1984, Commerce made a final determination that certain valves, couplings, nozzles, and connections (fire protection products), of brass, from Italy, suitable for use in interior fire protection systems, are being sold, or are likely to be sold, in the United States at LTFV, within the meaning of section 731 of the Tariff Act of 1930. The overall weighted- average margin on all sales compared was 3.47 percent. 11 On December 5, 1984, the Commission was advised by Commerce that a recalculation of the margins in the subject investigation indicated that the overall weighted-average margin was de minimis. As a result of further discussions between Commerce and the Conunission, it became unclear whether Commerce would terminate its investigation. The Conunission postponed indefinitely its public hearing on the investigation scheduled for December 7, 1984, expecting to terminate its investigation upon receipt of a Federal Register notice of a negative final antidumping finding. !I However, on January 4, 1985, Commerce notified the Commission that as a result of the correction of clerical errors, it was amending the final determination in the investigation to reduce the overall weighted-average margin from 3.47 percent to 1.28 percent. ~/ Conunerce stated that for purposes of section 73S(b)(2) of the Tariff Act of 1930, the letter of amendment of the final determination is to be considered the affirmative final determination of the administering authority. Conunerce published its notice of amendment to its final determination in the Federal Register of January 9, 1985 (SO FR 1099). ~/ Accordingly, the Conunission published a notice in the Federal Register of January 16, 1985 (50 FR 2354), rescheduling its public hearing on the investigation for January 23, 1985. ll The hearing was held on January 23, 1985. ~/ The briefing and vote on the subject investigation was held on February 12, 1985. The Commission must notify Commerce of its final determination within 45 days of January 4, 1985, or in this case by February 19, 1985. ll A copy of the Conunission's notice of institution of the final investigation is presented in app. B. ~I The Conunerce and Conunission notices of postponement of final determinations are presented in app. C. 11 A Copy of Conunerce's notice of final determination is presented in app. D. !I A copy of the notice of the postponement of the Conunission's hearing is presented in app. E. ~I A copy of Conunerce's letter to the Commission is presented in app. F. ~I A copy of Conunerce's notice of amendment to its final determination is published in app. G. ll A copy of the Conunission's notice of rescheduling of a public hearing is presented in app. H. ~I A list of the witnesses appearing at the public bearing is presented in app. I. A-3 The Products Description and uses There are four principal types of products subject to this investigation-- valves, nozzles, couplings, and fire department inlet connections. All the subject products are brass components suitable for use in interior fire protection systems, i.e., standpipe systems and/or sprinkler systems. These systems enable water to be delivered to various points outside and inside a building for fire suppression. Existing standpipe systems tend to be "dry•• systems (i.e., systems which do not have water in them until it is necessary to introduce the water to suppress a fire) composed of .. siamese .. fire department connections on the outside of a building and a series of pipes leading to valves located in stairwells or valves located in hose boxes in the corridors. Host recently installed standpipe systems are .. wet .. (i.e., contain water in the systems at all times). Sprinkler systems utilize many of the same basic components utilized in standpipe systems; they include overhead sprinklers through which water is automatically sprayed in rooms in order to douse small fires. According to information submitted at the public conference in the preliminary investigation, the products subject to this investigation may be utilized in one or both types of systems, depending on the product. Some of the brass products may be used in other than interior fire protection systems, but in practice are used only in such systems. The products subject to this investigation can be (and often are) all produced in the same plant, generally using similar types of equipment, !I and employees with similar skills; however, different molds and dies are used, depending on the end product. Valves.--A valve is a flow-control device used to regulate the flow of fluid in piping systems. Flow control is attained by moving a wedge or other flow-controlling element within the valve assembly to either open, close, or partially obstruct the passageway. Valves are made from an assortment of materials, but valves suitable for use in interior fire protection systems are mad~ of brass or bronze because of the resistance to corrosion of these materials. There are four distinct types of valves subject to this investigation: wedge disc hose gate valves, angle-type hose valves, pressure-restricting valves, and pressure-regulating valves; all are made of brass and are used in interior fire protection systems. All of these valves are offered in two sizes (1-1/2 or 2-1/2 inches), depending upon the "class" of end use, 'l:_/ !I Nozzles and couplings are finished on different equipment from valves. 'l:_I There are three classes of equipment used in fire protection systems. Class I is equipment with 2-1/2-inch threading, used by fire department personnel. The standard size of threading enables the firemen to connect their municipal equipment (equipment brought to the fire by fire department vehicles) to various inlets or outlets inside or outside a building. Class II is equipment with 1-1/2-inch threading used solely by nonprofessionals in interior standpipe systems. Class III is equipment with 2-1/2-inch threading that is coupled with a 1-1/2-inch adaptor used by either fire department personnel (in which case they remove the 1-1/2-inch adaptor and connect to the 2-1/2-inch threaded equipment) or by nonprofessionals who require the more manageable 1-1/2-inch equipment (hose and nozzle). A-4 except for wedge disc hose gate valves, which are only 2-1/2 inches in diameter. Wedge disc hose gate valves contain a wedge-shaped disc which can be lowered onto a seat to seal off the flow or raised into an external recess to open the flow; these valves are used in dry standpipe systems. Angle-type hose valves are gate valves 1-1/2 or 2-1/2 inches in diameter that function in a manner similar to the wedge disc hose gate valve described above; 2-1/2-inch angle-type hose valves can be used in either standpi?e or sprinkler systems but 1-1/2-inch angle-type hose valves are used only in standpipe systems. The essential difference between angle-type hose valves and the wedge disc hose gate valves is that the valve seats of the angle-type hose valves are flat rather than wedge-shaped. Pressure-restricting valves are either 1-1/2 or 2-1/2 inches in diameter and are installed at the interior hose outlets of a standpipe or a combined system. These valves are used to restrict the pressure level in the piping system so that the nozzle can be managed by people untrained in the controlling of heavy streams of water. Lastly, pressure-regulating valves are either 1-1/2 or 2-1/2 inches in diameter and are used to reduce automatically an inlet pressure of up to 300 pounds per square inch (psi) to a predetermined outlet working pressure of 20 psi or more. These valves are used in standpipe, sprinkler, and combined systems. Nozzles.--A nozzle is a projecting opening that directs the flow of fluid into an open space. The fog/straight stream nozzle is adjustable, enabling it to emit a fog spray or a straight stream of water or to shutoff the flow completely. The waterfog spray absorbs toxic gases of a fire and helps to clear away smoke; thus, the use of this type of nozzle is widespread in fighting smoky interior fires. Fog/straight stream nozzles are used in standpipe systems or in combined standpipe/sprinkler systems. These nozzles are generally made of brass; however, an importer/distributor has stated that approximately * * * sales of nozzles for interior fire protection systems consist -0f plastic nozzles. !I Plastic nozzles are especially prevalent in the replacement-market for such nozzles. ~/ Couplings.--Couplings are components used to connect two products or segments together. The couplings subject to this investigation are used to connect fire hoses and may be either of the male or female type. The couplings' sizes are either 1-1/2 or 2-1/2 inches in diameter, corresponding to the diameter of the hose segments. These couplings are only used in conjunction with standpipe systems. Such couplings are generally composed of brass, although aluminum couplings are sometimes used. Fire department inlet connections (siamese connections).--These connections are inlet valves, located on the exterior of buildings, to which fire department personnel connect their hose or hoses in order to maintain or boost the water pressure into a building's standpipe and/or sprinkler system by way. of pumps on the fire trucks.· All inlet valves are identified with lettering indicating their function, i.e., "standpipe," "auto-sprinkler," or "auto-sprinkler & standpipe.•• Each individual inlet on the connection tm.Jst handle a flow of 250 gallons per minute. The size of the standpipe is governed by the height of the !I Telephone conversation with * * * ~I Telephone conversation with * * * A-5 building. If the standpipe does not exceed 100 feet, it should have an inlet connection with a 4-inch outlet. Standpipes exceeding 100 feet must have an inlet connection with a 6-inch outlet. Water is pumped into a building's system through two (thus the name siamese) 2-1/2-inch hose connection inlets. Each connection houses one or two check valves, or "clappers," which permit the flow of water in one direction. A double clapper connection, which contains one clapper for each of the two inlets, permits one-hose operation. The clapper of the unused inlet remains closed and prevents the water from escaping. The siamese connections are generally composed of brass, sometimes with a chrome polish. However, at least one firm has produced such connections of ductile iron, and one firm currently produces aluminum siamese connections. Domestic and imported products.--The subject products imported from Italy can be, and are, used in lieu of the domestic products. Most, if not all, of the imported and domestic brass products, other than the couplings, are approved for use in fire protection systems by Underwrite.rs Laboratory (UL) and/or by Factory Mutual Research (FM), which are nonprofit industry testing and research organizations. !I The Italian products allegedly are concentrated in the standard product lines, i.e., in the National Standard Thread (HST) lines. ll The HST is a nationally known standard thread line for the subject products. The petitioner claims that approximately 70 percent of the thread sizes in the United States are HST and that the Italian products have taken most of the NST market. Some or most of the subject products entering from Italy may be forged rather than sand~cast like the domestic products. 11 Forging reportedly makes the product stronger and enables the product to be manufactured using less material, thus weighing less than a similar sand-cast product. !I The Italian forged products tend to weigh less than their domestically produced counterparts. The Italian brass products have a lower proportion of copper and a higher proportion of zinc than most, if not all, of the domestic !I Couplings do not need approval/certification by UL as long as all the other components in the systems in which they are used have been approved. ll Transcript of the public hearing, p. 17. 11 The petitioner stated that only the Italian fire hose couplings and wedge disc hose gate valves are forged (transcript of the hearing, p. 49). A consultant obtained by the petitioner indicated that none of the subject Italian products examined (a 2-1/2-inch angle-type hose valve, a 2-1/2-inch wedge disc hose gate valve, and a 2-1/2-inch pressure-restricting valve) were forged (affidavit of Dr. Kenneth Knott in exhibit 1 of the petitioner's posthearing brief). On the other hand, attorneys for the respondent have provided statements that some or most of the Italian products are forged (telegram of Richard Childress and statement of David Mueller in app. 4 of the respondent's posthearing brief). !I Domestic production of the forged products is not necessarily profitable given the substantial amount of capital outlays necessary to convert to the forging process. The relatively small market for the subject products means that the conversion to forging is not cost-effective. A-6 products. !I .The typical Italian product comprises 58 percent copper, 40 percent zinc, and 2 percent lead; and the domestic product is between 81 and 85 percent copper with the remainder consisting of zinc, lead, and tin. The Italian products examined by the Commission staff are not marked .. Kade in Italy ... A number of purchasers have indicated that they do not know whether the products they buy are produced in the United States or in Italy. U.S. tariff treatment The various products covered in this investigation--fire hose couplings, fog/straight stream nozzles, wedge disc hose gate valves, angle-type hose valves, siamese connections, pressure-restricting valves, and pressure- regulating valves, all made of brass--are classified under items 657.35, 680.14, and 680.27 of the Tariff Schedules of the United States (TSUS). ~/ The following tabulation shows the current rates of duty which apply to imports of these articles from those countries (including Italy) receiving most-favored-nation (KFN) column 1 treatment (in percent ad valorem): ~/ TSUS item No. !I 657.35 680.14 680.27 Description Present rate of duty !I Couplings----------------------: 5.7~ Fog/straight stream nozzles, wedge disc hose gate valves, angle-type hose valves, pressure-restricting valves, and siamese connections------: 6.5~ Pressure-regulating valves-----------------------: 4.0~ !I Effective Jan. 1, 1985. !I Representatives of * * * and * * * expressed reservations about the Italian products' ability to resist corrosion due to the high zinc content in the Italian products. However, UL and FM approval of these products is based on testing and performance standards which incorporate considerations of durability. Neither organization has found it necessary to establish or specify the relative ratios of metal in alloys for these products. ~I There is evidence that some brass fog/straight stream nozzles and pressure-regulating valves have been misclassified, according to * * *· 11 Col. 1 rates of duty are applicable to imported products from all countries except those Communist countries and areas enumerated in general headnote 3(f) of the TSUS. A-7 Virtually all, ·if not all, U.S. imports of the types of articles covered by this investigation are from Italy and are dutiable at the column 1 rates of duty. Nature and Extent of Sales at LTFV On January 9, 1985, Commerce published its amended final determination in the Federal Register that certain valves, couplings, '.nozzles, artd connections, all of brass and imported from Italy, suitable for use in interior fire protection systems, were being, or were likely to be, sold in the United States at LTFV. The overall weighted-average margin reported ~y Commerce was 1.28 percent. Commerce's determination was based on a comparison of the United States price and third-country (Canadian) prices of sales during August 1, 1983_, through January 31, 1984 1 "by Rubinetteri-e A:· Giacomini,. S .p.A. (Giacomini), the only known Italian exporter of the subject products to the United States. For pressure control valves, Commerce used constructed value for its basis of comparison. Commerce has directed the U.S. Customs Service to suspend liquidation of all entries of the merchandise subject to this investigation until further notice. The suspension of liquidation applies to all the subjeet merchandise entered, or withdr_awn from warehouse, for consumption, on or after July 10, 1984 •. The U.S. Customs Service is currently requiring a cash deposit or the posting of a bond equal to the estimated weighted-average margin amount (1.28 percent) by which the foreign market value of the merchandise subject to the investigation exceeds the United States price. The Domestic Market Apparent U.S. consumption Data on the apparent U.S. consumption of the individual subject products, in units, during 1981-83 are shown in table 1. Apparent consumption of brass fire hose couplings de.creased in both 1982 and 1983. and in January-September 1984 compared.with.consumption in the corresponding period of 1983. Consumption of brass angle-type hose valves and brass wedge disc hose gate valves decreased in both 1982 and 1983, but increased in January-September 1984 compared with consumption in the corresponding period in 1983. Apparent_ consumption of brass siamese connections and brass fog/straight stream nozzles decreased in 1982 and increased in 1983 and January-September 1984. Apparent consumption of brass pressure-restricting valves and brass pressure-regulating valves increased in 1982, decreased in 1983, and increased in January-September 1984. A grand total of apparent consumption of the subject products in terms of units is not feasible, given the different types of products involved. Table 1.--Brass components for fire protection systems: U.S. producers' domestic shipments, U.S. imports; and apparent consumption, 1981-83, Januarr-September 1983, and Januarr-september 1984 u.s. : u.s imports : Apparent :producers•: . : From all: :consumption:Item and period : domestic : Prom : other : Total : !/ : shipments : Ital1 : countries: :. .--~~----------------1.9~0 units------------------ Brass fire hose couplinis: 1981--....:------------------------: 1982---------------------------: 1983---------------------------: January-September-- 1983-------------------------: 1984-------------------------: Brass fog/straight stream nozzles: 1981---------------------------: 1982---------..:-----------------: 1983---------------------------: January-September-- 1983-------------------------: 1984-------------------------: Brass angle-type hose valves: 1981---------------------------: 1982---------------------------: 1983-----------------..:---------: January-September-- 1983--....:----------------------: 1984-------------------------: Brass wedge disc hose gate valves: 1981---------------------------: 1982---------------------------: 1983---------------------------: January-September-- 1983-------~-----------------·: 1984-------------------------: Brass siamese fire department connections: 1981---------------------------: 1982---------------------------: 1983---------------------------: January-September-- 1983-------------------------: 1984-------------------------: See footnotes at end of table. *** *** :. *** *** *** *** *** "** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ... *** *** *** *** *** *** *** *** *** *** **~ *** : *** *** *** *** *** *** *** : *** *** *** *** *** *** *** *** *** *** *** *** *** ***· *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** : *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ... ... *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** '*** *** *** *** *** *** Ratio of imports from ItalY to-..:. Domestic : Apparent shi,ments ;consumption -------Percent------- 150.9 194.6 140.2 137.3 102.8 124.7 133.3 167.0 •. 181 .• 3 88.7 125.2 112.2 136.0 138.8 63.9 181.0 109.3 61.9 71.9 109.1 33.8 : . 97.8 230.0 220.5 244.9 60.1 66.1 58.4 57.9 so. 7 55.5 57.1 62.5 64.5 47.0 55.6 52.9 57.6 58.1 39.0 64.4 52.2 38.2 41.8 52.2 25.2 49.5 69.7 68.8 71.0 ~ 00 CO 4.1 CT .40 1 1 I I 41 • • • 41 • It1 0 CA 1•4 4C r..1 M NO 43 IA •• •• •• •• •• •• •• •• •• •• .• •• •• •• •• •. •• 1... r. ..4) NO 1 I I 1 * • • -• • • 4/ C 41' 4, 4:) 4/' * 1.1 IA CO 00o rl •1 •l 4.) 0 Id 0 .001 CO 4 ▪ 4 C 11) 0 E '10 la, .4 .0 0 10 Li CO CO 14 L 4) 0 4) A) L• 0 .0 • La .4 4) • .4 ▪ 0 N V .0 • ••• A.) • 1. • 0 • L. LO t.P 0 •4 •or • .0 0 413 4.) co 004 O z Z • V4 • ...I 01 0 P. 4)1.. Lo C . 04 .emu 0 00 0) C C C 0 E CO 0 0 P. 0, 0 •4 0 4) .0 0 01 LI 0 0 0 .0 Z c.) 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L0 O a, P. 0 V LI .1C 0 O 0 •• •• •• •• CA LI 00 O ', .4 O 0 z v As 1 g o t-I i La 0 4C * 4C * 4C ▪ * a. - •• •• •• 4) .• •• •• •• •• •• •• •• •• •• •• •• •• .. •• .• .• el .4 00 .4 • 0 L .• 0 0 * 4c * * * 4C * 4c 4C 4C N (:). as s.) ...4 z * 4c * * * * * * * 4C • •-1 4) LI 4( * * * * * 41* * * = 0 .0 .0 0 LI 0 4.) 0 0 O L 0 0 0 •• •C) O. 0 - CO 0 0 •-1 O 411 •• .. •• •• •• •• •• •• .• •• •• •• •• .• .• •• .• •• •• .• 0 .0 J.) au * * 4C 4C * 0 0 0 0 4( 00 0 D.. * * * it * * Oft ca E .4 41 4c * * * 4c CO 1 0 0 V.• LI 4.) C 1.1 a. 14 O 0 •4 0 4) 0 •• • • •• • • • • O 0 O 1.) 0 a 01 * 4C 4C * ic * 44 44 * * 0 •• • 0 4) 00 it it * ic * it** 41 Ld 11 10 0 CO 0 P. OD • 0 0 g I V g P. 0 .-I 0 0 .4 L. a) LI '0 •C .4 a+ 0. 0 Ii. •.4 .. .• .. .. •• •• .• •• .• •• •• •• •• •• •• •• .• •• •• e• •• oe •• L. - O 0 (4.1 0 •.. CO .1.) .0) P. .0 O 0 0 00 •.+0 0 . 0 O 0 .0 ." -, t 2, -4 0 ..4 0 1 4) O i O LI L I •-4 4) clO ..O .0 LI Z O 0. ol 0 00 0 O 0 0 .0 0 .0 Ca LI V 1. 0 14 E O 0 . 0 i 0 I 0 LI 0. 0 4) CO CU 14 0. ▪ I. 0. 1 co E 0 0 0 4:17 1 - v • .0 O as •• Na) •• co 01 Ca I t 0 V) I •-, C 1.. 4) 0 >, I 4) 0 0.• 1 O L> 1.4 v) 41 0 > I 0 fq Ar O 0..4 0 co co cl• •• n I 1 0 CO 00 •-1 0 1•4441•1ZOn crn 0 ,-.4 cv en 0 co co .0 co > to co co 0 ,f .-4 > co co co C f•4 1.4 O CC ON 000+ Cr. 0 0) 0+ Q1 0. 0 11 co 0 .-1 1.4 1.4 O co ) 0 r4 1.4 r4 "3 O 0 .• •• •• •• .• •• •• •• •• •• •• •• •• -• •• •• •• * * 4C * 4C * * 4C * * •• •• •• •• •• -• •• .• .• •• •• •• •• •• .• •- •• .• •. •• •• •• -• •- •• •• • • •• •• •• •• •• •• •• A-10 Accordingly, total data are presented in terms of pounds and value (table 2). Apparent consumption of the subject products increased from 2.03 million pounds in 1981 to 2.07 million pounds in 1982, or by 1.6 percent. Consumption declined in 1983 to 1.68 million pounds, or by 18.7 percent. Consumption during January-September 1984 was 1.48 million pounds, representing an increase of 16.9 percent over that in the corresponding period of 1983. In terms of value, apparent consumption increased from $8.0 million in 1981 to $8.1 million in 1982, or by 1.8 percent. Apparent constimption declined to $6.0 million of 1983, or by 25.7 percent, but increased by 20.l percent during January-September 1984, compared with that in the corresponding period of 1983. U.S. producers The nine firms known to have produced one or more of the subject products of brass !/ in the United States during 1983 and the percentage distribution of total production in 1983 of the subject products, based.on pounds, are shown in the following tabulation: ~/ Producer Share of production (percent) Akron Brass Co. (Wooster, OH)----------------------- *** Badger-Powhatan, a division of Figgie International, Inc. (Ranson, WV)------------------ *** De Sanno Foundry & Machine Co. (Oakland, CA)-------- *** Elkhart Brass Manufacturing Co. (Elkhart, IR)------- *** Jenkins- Bros. (Bridgeport, CT)---------------------- *** John W. Koon, Inc. (Philadelphia, PA)--------------- *** NIBCO, Inc. (Elkhart, IR)--------"'."------------------- *** United Brass Works (Randleman, NC) and-------------- *** Wilkins Regulator Co., a division of Zurn Industries (Paso Robles, CA)--------------------------------- ~ Total------------------------------------------- 100.0 In addition to the producers listed, two U.S. producers ceased operations during the January 1981-September 1984 period under investigation: (1) Seco Manufacturing Co. (Wauseon, OH), which ceased production and went out of business (in part because of alleged competition from Italian valves) 11 on August 31, 1983, and (2) the W.D. Allen Co., which was purchased by John w. !I There are also some producers of aluminum couplings, plastic nozzles, and. iron and aluminum siamese connections; some of these products may compete with the subject brass products. ~I * * *· 11 According to a Feb. 2, 1984, telephone conversation with * * * and a letter submitted to the Commission by the former owner of Seco, this company exited the market. Seco's trade data for the period under investigation have not been provided to the Commission staff .. A-11 Table 2.--Bra~s components for fire protection systems: U.S. producers' domestic shipments, U.S. imports, and apparent consumption, 1981-83, January-September 1983, and January-September 1984 Item and period The subject products: 1981---------------: 1982---------------: 1983---------------: Jan.-Sept.-- 1983-------------: U.S. pro- ducers' domestic shipments 1,141.4 1,178".2 810.3 617 .6 U.S. imports from Italy Apparent consump- tion !/ Quantity (1,000 pounds) 893.4 2,034.8 889.l 2,067.3 870.6 1,680.9 646.8 1,264.4 :Ratio (percent) :of imports from Italy to consumption 43.9 43.0 51.8 51.2 1984--------------:~~~-=:;...;..;.=....~~~--"~~_.;..~~-=""""'""'~""-~~~~~----~864.3 613.8 1,478.1 41.5 The subject products: 1981---------------: 1982---------------: 1983---------------: Jan.-Sept.-- 1983------~------: 1984-------------: 5. 757 5,901 3,883 3,004 3,903 Value (1,000 2,203 2,206 2,141 1,613 1,640 dollars) 7,960 27.7 8,107 27.2 6,024 35.5 4,617 34.9 5,543 29.6 !I Consists of U.S. producers' domestic shipments plus U.S. imports from Italy. Imports from countries other than Italy are negligible. Also, U.S. importers' shipments were not used in determining apparent consumption because only 2 of the 4 importer/distributors provided their shipment data in response to Commission questionnaires. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. Note.--Only 1 importer did not provide import data in pounds. This importer's imports in pounds were estimated by applying the other 3 importers' value per-pound ratio to the value of imports of that importer. A-12 Moon, Inc., in 1981. !lit ***recently conunenced production of brass fire hose couplings. * * * The petitioner, Badger-Powhatan, a division of Figgie International, Inc., has produced brass components for interior fire protection systems for over 90 years in Ranson, WV. The Ranson facility consists of a foundry and finishing operations for brass components for interior fire protection systems and for parts for fire extinguishers. Elkhart Brass Manufacturing Co. (Elkhart) has been producing a full line of the subject products at its facility in Elkhart, IN, for over 50 years. it The only subject product category not produced by Elkhart is wedge disc hose gate valves, for which production was discontinued about 20 years ago. John W. Moon, Inc. (Moon), has been producing brass fire department connections since 1953 at its facility in Philadelphia. !I In 1976, it purchased the interior fire protection facilities of Fyr-Fyter, and * * Philadelphia. Moon * * * after purchasing the W.D. Allen Co. in 1981. firm (W.D. Allen) had produced the subject products for 115 years. * in This The other producers either produce only in limited product lines, or are relatively small-scale producers. Akron Brass, a division of Premier Industrial Corp., produces fog/straight stream nozzles and angle-type hose valves. De Sanno, since 1982 a wholly owned subsidiary of Service Brass Aluminum Foundry Co •• Inc .• Oakland, CA, has produced some of the subject products since 1909. Its current production facility and separate foundry were located in Oakland, CA, until May 1982, when the entire production operation was moved to an Indian reservation in Chandler, AZ. NIBCO, Inc., produces angle-type hose valves and wedge disc hose gate valves. United Brass Works began production of brass angle-type hose valves * * * and iron siamese connections**·*· 21 Wilkins Regulator Co., a division of Zurn Industries, * * * pressure-regulating valves. The subject products produced by each firm in 1983 are shown in table 3. The largest current producers of the subject products are Badger-Powhatan, Elkhart, and Moon. Each of these companies produces a full line, or nearly a full line, of brass products for interior fire protection systems and is considered by those in the trade to be an important factor in the market. During 1981-83, * * * !I The current president of John W. Moon, Inc., stated in a Feb. 6, 1984, telephone conversation that * * * i1 * * * ceased production of siamese connections in the late 1970's * * * * * *it A. letter from Elkhart in support of the subject investigation is presented in app. J. The subject products account for approximately*** percent of Elkhart's overall operations. !/ A letter from Moon in support of the subject investigation is presented in app. K. However, it was necessary for the Commission to subpoena Moon in order to obtain ari adequate response to the Commission's questionnaire. 21 A spokesman for United said that * * * .. .. . . .. .. 00 I C ' 4/ ..-1 14 0 .0 0 Pressure- 40 C .4 10 11) • > .1 .1 7 00 > C 0 Woos ter, OHAkron Brass Co Ba dger- Powhatan Plan t locat ion • • • • • • • • • LI ta z 00 a. 1983 produc t ion • • • A-13 .. .. * 41 4( .-1 i .. .. .. .. . . * * * '•n re .. .. .. •••. .11 .. .. * K * •••. re .. .4 .. .. .. .. . ..... `, .... ..... .... 4 re 14 .1' .1 re )41 .11 re .M t. 0 43 .t.) fr al a. w st O 111 * * 41 *I.• 4.3 C * * * *... C 0 * * * *04 0) •.4 E 4.1 ,. •••.. ••••. •••. ••••nO .0 0 re re .11 .11 .11O 0 4/ e e 0 c a. c W a 0 - 1 42 u ca 1) * * * * V • 10 • el le 43 N. N. 4 rle 0 .4 .41 .-II .41 44 re.0 co 0 Z 0 > 3 .0 it 41 ic 41 K K•IC it K ic In terna t ional Trade Commiss ion. ic ic • ic 4c it it MI Manufac turing .41 Moon, •Inc Comp iledfrom data submittedin response to ques tionnaires of the U. S .41 .41 4). .41 ..41 *** 0 0 .44 ea C * 4 ..4 3 Oakland, CA 2/ •• • • • • • • • . • • • • • • - • • • Un ite d Brass Works NIBCO, Inc amoun ts p roduced of ea ch of the subjec t (In un its ) Table 3. --Brass comp onents for fire protec t ion sys tems: e 01 00 O C 0 • 0 ▪ 0 to o A-14 Companies producing similar products of other than brass include the United Fire Safety Co., Lancaster, NY, which produces plastic fog/straight stream nozzles, and Grinnell Fire Protection Systems Co., Cleveland, NC, which produces aluminum siamese connections. U.S. importers The four known U.S. importers of the subject products from Italy and each importer's share of the value of imports from Italy in 1983 are shown in the following tabulation: Importer Share (percent) Fire End and Croker Corp. (Elmsford, NY)-------------- *** Guardian Fire Equipment, Inc. (Miami, FL)------------- *** Halprin Supply Co. (Los Angeles, CA)------------------ *** Potter-Roemer, Inc. (Cerritos, CA)-------------------- ~ Tota~----~---------------------------------------- 100.0 Each of the four importers is more properly termed an importer/distributor, since each buys and sells not only the subject products from Italy, but also the competing domestic products. * * *· The four importer/distributors together are believed to account for all of the subject products imported from Italy. In 1983, they also purchased * * * percent of the domestic producers' domestic shipments of the subject brass products. Imports of the subject products constitute all or nearly all of each of the companies' import business. Channels of distribution The U.S. distribution channel for brass valves, nozzles, and connectors used in fire protection systems is composed of two major types of distributors--••primary" and "master"--and one minor group, plumbing job shops, which are frequently cited as a type of distributor. There are 4 primary distributors, approximately 100 master distributors, and approximately 2,000 plumbing job shops in the United States involved in the distribution of the products subject to this investigation. In the first level of distribution, primary distributors (i.e., the four importer/distributors discussed previously) handle the distribution of the various products at a national level. In the second level of distribution, master distributors handle the distribution at a regional level. These disLrlbutors exist because of varying regional building codes and function as warehousing facilities for the particular types of products required by local ordinances. Distributors may combine the subject products, domestic or imported, with other materials such as hoses, and resell these combinations as fire protection systems. The smallest distributing group consists of so-called plumbing job shops; they operate at a regional market level close to the end user. However, plumbing job shops account for a very small portion of A-15 the distribution activity (both in terms of units and value), principally offering specialized products. The ultimate users of the subject products are construction companies that are erecting a building where a local building code requires the installation of an interior fire protection system. Badger-Powhatan's products are distributed * * * through the distribution system described above, but other major producers, such as Elkhart and Moon, generally sell their output via manufacturer's representatives or other distributors. However, imported products are always initially sold through the four importer/distributors. The Italian Industry Only one Italian company (Rubinetterie A. Giacomini, S.p.A.), is known to produce and export the subject products to the United States. A second Italian company (Bocciolone Aldo, S.p.A.), is believed to produce similar fire protection products to those of Giacomini, but does not produce for the U.S. market. There are five other leading producers of fire protection equipment in Italy]:/ (Caccialanza & C., S.p.A.; Silvani Antincendi, S.p.A.; Ciodue, S.p.A.; F.A.S., S.p.A.; and Antonicelli, S.p.A.); these companies reportedly design, engineer, or produce fire protection systems and equipment such as extinguishers, equipped trucks and carriages, automatic sprinkler systems, and the like, but apparently not specifically the U.S.-market products subject to this investigation. In addition to the costs involved in modifying production operations and product designs for the U.S. market, it would be necessary for new entrants to obtain UL or FM certification. There is no indication that any Italian manufacturer other than Giacomini intends to produce the subject products for the U.S. market. Giacomini is a family-owned and family-managed company, founded in 1951, which is located in San Maurizio d'Opaglio, in the northwestern section of Italy. Giacomini produces fire protection products and various plumbing components such as faucets, valves, and the like. Giacomini stated at the public conference in this investigation that .. the fire protection market in the United States represents only about seven to eight percent of our total sales of all products to all markets.••?:./ Giacomini's fire protection production is reportedly focused on five basic product categories: nozzles, hydrant valves, truck coupling assemblies, hose boxes, and pressure-reducing valves. 11 Giacomini also produces couplings and connections. !I The company's production machinery is modern and multipurpose. ii 11 Based on the market research study, provided by the petitioner, on interior fire protection products in Italy, p. 10. The petitioner has not revealed the author or source of this study. it Transcript of the conference, p. 79. 11 Market research study, p. 4. !I Ibid. ii Ibid., p. 7. A-16 The Borth American market is by far the principal market for the subject fire protection products produced by Giacomini. !/ The U.S. market is reportedly lucrative and profitable for Giacomini, owing to the demand for the subject products in the United States and to the appreciation of the U.S. dollar relative to the Italian lira (constant prices and sales in dollars have resulted in increased prices and revenues in lire). !I Giacomini began exporting to the United States in 1976. Information provided by counsel for Giacomini on its production, exports to the United States, and exports to Canada of the subject products during the period under investigation are shown in table 4. Counsel for Giacomini provided the following statement on Giacomini's capacity to produce the subject products: 11 · * * * * * However, on the basis of Giacomini's generally decreased exports of these products to the United States, in terms of quantity, in 1982, 1983, and January-September 1984, Giacomini may have some excess capacity for the subject products and may be able to increase its exports somewhat. !/ It is. the u~derstanding of * * *, that Giacomini does sell and distribute in the .Italian market the same type of valve exported to the United States. * * *, he also-stated that in contrast with other European nations with varying product standards, the Italian market has similar characteristics with the U.S. market for fire protection products. Larry Klayman, counsel for Giacomini, stated in a Sept. 4, 1984, telephone conversation that Giacomini's products sold in the United States are different from Giacomini's products sold in Italy. !I Market research study, p. 35 bis. 11 From the confidential attachment.to Giacomini's posthearing brief~ A-17 Table 4.--Brass components for fire protection systems: Giacomini's pro- duction, exports to the United States, and exports to Canada, 1981-83, January-September 1983, and January-September 1984 (In thousands of units) Jan.-Sept.-- Item Fire hose couplings: Production---------------------: Exports to the United States---: Exports to Canada----------~---: Fog/straight stream nozzles: Production---------------------: Exports to the United States---: Exports to Canada--------------: Angle-type hose valves: Production---------------------: Exports to the United States---: Exports to Canada--------------: Wedge disc hose gate valves: Production---------------------: Exports to the United States---: Exports to Canada--------------: Siamese connections: Production---------------------: Exports to the United States---: Exports to Canada--------------: Pressure-restricting valves: Production---------------------: Exports to the United States---: Exports to Canada--------------: Pressure-regulating valves: Production---------------------: Exports to the United States---: Exports to Canada---------------: 1981 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** l/ Ho exports to Canada in this period. it Less than 50 units. 11 Ho known production or exports. 1982 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 1983 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 1983 1984 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Source: Confidential posthearing submission of counsel for Giacomini. A-18 Giacomini sells its fire protection products to the U.S. market through the four importer/distributors discussed in the section of this report entitled "U.S. importers." The importer/distributors reportedly buy an inventory of fire protection products from Giacomini and then resell on the U.S. market from their stock; the price markups may vary among the companies. !/ * * *• said that Giacomini has * * * for its products at this time. He said that * * * Consideration of Alleged Material Injury to an Industry in the United States The information in this section of the report has been compiled from responses to questionnaires of the U.S. International Trade Commission. The Commission sent questionnaires to each of the four current producers cited in the petition, to two former producers, and to 46 other companies which were believed to possibly produce one or more of the subject products. Information was requested on each of seven specific product categories. Completed questionnaire responses were received from all the major producers and nearly all other known producers. Host of the companies to which questionnaires were sent indicated that they did not produce any of the subject products. ll An estimated 90 percent of U.S. production of the subject brass products is covered by the information presented in this section of the report. U.S. production Total U.S. production of the subject brass products increased from 1.20 million pounds in 1981 to 1.29 million pounds in 1982, or by 7.5 percent, and then decreased to 872,600 pounds in 1983, or by 32.5 percent, as shown in table 5. Production during January-September 1984 totaled 929,100 pounds, representing an increase of 39.5 percent compared with the 665,800 pounds produced in the corresponding period of 1983. Between 1981 and 1983, six of the seven product categories experienced production declines in terms of both ·units and pounds. Only * * * between 1981 and 1983. During January-September 1984, all of the product categories except * * * experienced an increase in production, compared with that in the corresponding period of 1983. !I Market research study, p. 34. ~I It was necessary to subpoena Hoon in order to obtain an adequate response to the Commission's questionnaire. A-19 Table 5.--Brass components for fire protection systems: U.S. production, 1981-83, January-September 1983, and January-September 1984 Jan.-Sept.-- Item 1981 1982 1983 1983 1984 Fire hose couplings: Quantity----------1,000 units--: *** *** *** *** *** Quantity---------1,000 pounds--: *** *** *** *** *** Fog/straight stream nozzles: Quantity----------1,000 units--: *** *** *** *** *** Quantity---------1,000 pounds-~: *** *** *** *** *** Angle-type hose valves: Quantity----------1,000 units--: *** *** *** *** *** Quantity---------1,000 pounds--: *** *** *** *** *** Wedge disc hose gate valves: Quantity----------1,000 units--: *** *** *** *** *** Quantity-~-------1,000 pounds--: *** *** *** *** *** Siamese connections: Quantity----------1,000 units--: *** *** *** *** *** Quantity---------1,000 pounds--: *** *** *** *** *** Pressure-restricting valves: Quantity----------1,000 units--: *** *** *** *** *** Quantity---------1,000 pounds--: *** *** *** *** *** Pressure-regulating valves: Quantity----------1,000 units--: *** *** *** *** *** Quantity---------1,000 pounds--: *** *** *** *** *** Total, 7 product categories 1,000 pounds--:1,202.8 :1,293.2 872.6 665.8 929.1 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. U.S. capacity and capacity utilization Total capacity to produce the subject products increased from 2.4 million pounds in 1981 to 2.6 million pounds in 1982 and 1983, and was virtually unchanged during January-September 1984 compared with capacity in the corresponding period of 1983 (table 6). Capacity utilization decreased from 50~7 percent in 1981 to 50.3 percent in 1982 and to 33.8 percent in 1983, but increased to 47.0 percent during January-September 1984. A-20 Table 6.--Brass components for fire protection systems: U.S. production, producers' capacity, l/ and capacity utilization, 1981-83, January- September 1983, and January-September 1984 i1 Jan.-Sept.-- Item 1981 Fire hose couplings: Production-------1,000 pounds--: *** Capacity-----------------do----: *** Capacity utilization--percent--: *** Fog/straight stream nozzles: Production-------1,000 pounds--: *** Capacity-----------------do----: *** Capacity utilization--percent--: *** Angle-type hose valves: Production-------1,000 pounds--: *** Capacity-----------------do----: *** Capacity utilization--percent--: *** Wedge disc hose gate valves: Production-------1,000 pounds--: *** Capacity-----------------do----: *** Capacity utilization--percent--: *** Siamese connections: Production-------1, 000 pounds--: .. *** Capacity-----------------do----: *** Capacity utilization--percent--: *** Pressure~restricting valves: Production-------1,000 pounds--: *** Capacity-----------------do----: *** Capacity utilization--percent--: *** Pressure-regulating valves: 1982 1983 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 1983 1984 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Production-------1,000 pounds--: *** *** *** *** *** Capacity-----------------do----: *** *** *** *** *** Capacity utilization--percent--:~---*-*-*-------*-*-*-------*-*-*--------*-*-*_..______*_*_* Total, 7 product categories: Production-------1,000 pounds--:1,202.8 Capacity-----------------do----:2,372.9 Capacity utilization--percent--: 50.7 :1,293.2 872.6 :2,568.6 :2,582.9 50.3 33:8 665.8 1, 951.6 34.1 929.l 1,976.0 47.0 l/ Capacity data for individual products may be of questionable validity, since a foundry could be used to produce more of one product or varying amount.s of the other products. Total capacity data are more meaningful in this instance. "=.I Excludes production and capacity data for * * *· Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-21 U.S. producers' domestic shipments U.S. producers' domestic shipments, measured in units, declined for six of the seven subject product categories between 1981 and 1983, as shown in table 7. The value of shipments for the seven product categories increased from $5.8 million in 1981 to $5.9 million in 1982, or by 2.5 percent, and decreased to $3.9 million in 1983, or by 34.2 percent. The value of shipments during January-September 1984 was $3.9 million, representing an increase of' 29.9 percent from that in the corresponding period of 1983. Shipment data were collected from two companies that produced nonbrass products similar to those covered in the scope of this investigation. Information on domestic shipments of polycarbonate (plastic) fog/straight stream nozzles by United Fire Safety Co.. is shown in the following tabulation: OuantitI Value Unit Period (1,000 units) (1, 000 dollars) value 1981-------------- *** *** *** 1982-------------- *** *** *** 1983-------------- *** *** *** Jan.-Sept.-- 1983------------ *** *** *** 1984------------ *** *** *** Information on domestic shipments of aluminum siamese connections by Grinnell Fire Protection Systems Co. is shown in the following tabulation: OuantitI Value Unit Period (units) (1,000 dollars) value 1981--------------- *** *** *** 1982--------------- *** *** *** 1983--------------- *** *** *** Jan.-Sept.-- 1983------------- !I !I !I 1984----~-------- *** *** *** !I Hot available. A-22 Table 7.--Brass components for fire protection systems: U.S. producers' domes- tic shipments, l/ 1981-83, January-September 1983, and January-September 1984 Jan.-Sept.-- Item 1981 1982 1983 1983 1984 Fire hose couplings: Quantity----------1,000 units--: *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value---------------------: *** *** *** *** *** Fog/straight stream nozzles: Quantity------'-----1, 000 units-:_:· *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value-------~-------------: *** *** *** *** *** Angle-type hose valves: Quantity----------1,000 units--: *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value---------------------: *** *** *** *** *** Wedge disc hose gate valves: Quantity----------1,000 units--: *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value---------------------: *** *** *** *** *** Siamese connections: Quantity----------1,000 units--: *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value---------------------: *** *** *** *** *** Pressure-restricting valves: Quantity----------1,000 units--: *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value---~-----------------: *** *** *** ·*** *** Pressure-regulating valves: Quantity----------1,000 units--: *** *** *** *** *** Value-----------1,000 dollars--: *** *** *** *** *** Unit value---------------------: *** *** *** *** *** Total, 7 product categories 1,000 dollars--: 5,757.0 5,901.0 :3,883.0 :3,004.0 :3,903.0 l/ Excludes intracompany or intercompany transfers. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. U.S. producers' exports U.S. producers' exports of the subject products are shown in table 8. Exports * * * 1983. Exports accounted for * * * percent of the value of U.S. A-23 Table 8.--~rass components for fire protection systems: U.S. producers• eXJ>orts, 1981-83, January-September 1983, and January-September 1984 Item Fire hose couplings: Quantity----------------units--: Value-----------------dollars--: Fog/straight stream nozzles: Quantity----------------units--: Value----------:-------do llars--·: Angle-type hose valves: Quantity----------~-----units--: Yalue-----------------dollars--: Wedge disc hose gate valves: Quantity----------------units--: Value-----------------dollars--: Siamese connections: Quantity----------------units--: Value-----------------dollars--: Pressure-restricting valves: Quantity----------------units--: Value-----------------dollars--: Pressure-regulating valves: 1981 *** *** *** *** *** *** *** *** *** *** *** *** 1982 *** *** *** *** *** *** *** *** *** *** *** *** 1983 *** *** *** *** *** *** *** • *** *** *** *** *** ' . Jan.-Sept.-- 1983 1984 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Quantity----------------units--: *** *** *** *** : *** Value-----------------dollars~-=------*-*-*-=-------*-*-*-=------*-*-*-=-----*-*-*--.:......---*-*--* Total, 7 product categories dollars-"'-: *** *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. producers• shipments in 1981, * * * percent in 1982, * * * percent in 1983, and * * * percent during January-September 1984. The principal export markets are * * *· Only three U.S. producers * * * The principal product exported is * * * u.s~ producers' inventories Data collected on U.S. producers' end-'-of-period inventories and domestic shipments of the subject products are shown in table 9. The data comprise A-24 Table 9.--Brass components for fire protection systems: U.S. producers' end-of- period inventories, domestic shipments, and inventories as a share of domestic shipments, Dec. 31 of 1980-83, Sept. 30, 1983, and Sept. 30, 1984 As of Sept. 30-- Item Fire hose couplings: lnventories--------units--: Shipments----1,000 units--: Share of shipments percent--:· Fog/straight stream nozzles:: Inventories--------units--: Shipments----1,000 units--: Share of shipments percent--: Angle--type hose valves: Inventories--------units--: Shipments----1,000 units--: Share of shipments percent--: Wedge disc hose gate valves:: Inventories--------units--: Shipments----1,000 units--: Share of shipments percent--: Siamese connections: Inventories--------units--: Shipments----1,000 units--: Share of shipments percent--: Pressure-restricting valves:: Inventories--------units--: Shipments----1,000 units--: Share of shipments percent--: Pressure-regulating valves: : lnventories--------units--: Shipments----1,000 units--: Share of shipments percent--: !/ Hot available. Z/ Annualized shipment data. 1980 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 'J./ Based on annualized shipment data. 1981 *** *** *** *** *** *** *** *** *** *** *** . *** *** *** *** *** *** *** *** *** *** 1982 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 1983 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 1983 1984 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-25 only inventories of * * *· The other reporting producers either kept no inventories or minimal inventories. Of the seven product categories for which data are shown in table 9, * * * experienced an absolute increase in inventories in 1981, * * * in 1982, and * * * in 1983. On September 30, 1984, * * * of the product categories had increased inventories compared with September 30, 1983. In general, no discernible trend is apparent, with absolute inventories both increasing and decreasing throughout 1980-84 for each product category. The ratio of inventories to shipments * * * in 1982, * * * in 1983, and * * * the seven product categories on September 30, 1984, compared with that on September 30, 1983. The * * * U.S. employment and wages The number of production and related workers engaged in the production of the subject products increased from 70 in 1981 to 78 in 1982, and then decreased to 70 in 1983 (table 10). The number of such workers was 81 during January-September 1984. The number of production and related workers producing all products in establishments where the subject products are produced * * * in 1981 to * * * in 1982, and then * * * in 1983. The number of such workers was * * * during January-September 1984. Table 10.--Average number of employees, total and production and related workers employed in establishments producing brass components for fire protection systems, and hours worked by such production and related workers, 1981-83, January-September 1983, and January-September 1984 Jan.-Sept.-- Item 1981 1982 1983 1983 1984 .. All persons employed in the reporting establishments-------: *** *** *** *** *** Production and related workers producing-- All products-------------------: *** *** *** *** *** The subject brass products-----: 70 78 70 66 81 Hours worked by production and related workers producing-- All ,products------1,000 hours---: ·2,100 1,819 1,908 1,148 1,358 The subject brass products 1,000 hours--: 107 122 92 67 95 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-26 The number. of hours worked by production and related workers engaged in the production of the subject products increased from 107,000 in 1981 to 122,000 in 1982, and then decreased to 92,000 in 1983. The number of hours worked was 95,000 during January-September 1984, representing an increase of 41.8 percent compared with hours worked in the corresponding period of 1983. The following tabulation shows wages paid and the average hourly wage of production and related workers producing the subject products. Period Wages paid (1,000 dollars) 1981------------------- 1982------------------- 1983------------------- Jan. -Sept . ..:...- 1983----------------- 1984----------------- 721 872 670 503 685 Average hourly wage $6.74 7.15 7.28 7.51 7.21 Badger-Powhatan's workers are represented by the Industrial Union of Marine and Shipbuilding Workers of America. The workers at Akron Brass, De Sanno, and Elkhart are represented by both the International Association of Molders and Allied Workers and the International Association of Machinists and Aerospace Workers. The workers at Hoon and at Jenkins are represented by the United Steelworkers of America. Workers at NIBCO, United Brass Works, and Wilkins are not represented by a union. Financial experience of U.S. producers Income-and-loss data on the subject brass valves, couplings, nozzles, and connections were received from three U.S. producers--* * *--for all the periods covered under the investigation. !I Such data were also received from * * * The responding producers' data accounted for * * * percent of the value of total U.S. shipments of the subject products in 1981, * * * percent in 1982, and * * * percent in 1983. The subject products.--Aggregate net sales of the subject products increased from $4.8 million in 1981 to $5.1 million in 1982, or by 6 percent, and then dropped by nearly 41 percent to $3.0 million in 1983 (table 11). During the interim period ended June 30, 1984, net sales rose by 41 percent to $2.0 million, compared with $1.4 million in the corresponding period of 1983. Operating income declined from $721,000, or 15.0 percent of sales, in 1981 to $249,000, or 8.2 percent of sales, in 1983. As a share of sales, cost of goods sold increased from 66.9 percent in 1981 to 70.3 percent in 1983, !I*** Other major domestic producers stated that such data could not be· provided because data are not available on an individual product basis. Accordingly, the Commission questionnaire did not request income-and-loss data on individual products, but rather requested income-and~loss data on operations producing the subject products combined. Even so, only 4 of the 9 known domestic producers were able to respond to the income-and~loss section of the Commission's questionnaire. A-27 T_able 11.--Income-and-loss data of 3 U.S. producers l/ on their operations pro- ducing. the subject products, accounting years 1981-83, and interim periods ended June 30, 1983, and June 30, 1984 Item 1981 1982 1983 Interim period ended June 30-- 1983 1984 .·• Sales-------------1,000 dollars--: 4,803 ! 5,115 3,024 1,434 2,019 Cost of goods so ld---------do----: ----'3......_.2....1=2..____3....._.,5....1....7-------'2;;;.&..;,1=2:..::6;......;._...;l.,..,L.;;0=3"""7---'-___,l.,..,L.;;6=5.;;6_ Gross profit---------------do----: 1,591 1,598 898 397 363 General, selling, and adminis- trative expenses 1,000 dollars--: ____s_1_0____~9~84....____~6~4~9----~3~1~3------3-5_8~ Operating income or Closs) do----: 721 614 249 84 5 Interest expense ~/--------do----: Other income or (expense)--do----: _____*_*_*_..._____*_*_*_..._____*_*_*_..______**--*------*-*-*-- Net income or (loss) before in- come taxes------1,000 dollars--: Depreciation and amortization ex-: pense included above *** *** *** *** *** 1,000 dollars--: _____*_*_*_..._____*_*_*_.._____*_*_*_..______*_**-------*-*-*-- Cash flow from operations--do----: *** *** *** *** *** As a share of net sales: Cost of goods sold----percent--: Gross profit-------------do----: Operating income or (loss) percent--: Net income or (loss) before in-: come taxes----------percent--: General, selling, and adminis- : trative expenses----percent--: 66.9 33.1 15.0 *** 18.1 68.8 31.2 12.0 *** 19.2 70.3 29.7 8.2 *** 21.5 72.3 27.7 5.9 *** 21.8 !I A fourth producer, * * *, provided data for 1983 and both interim periods. Its data are included in 1983 and in both interim periods. ~I None of the producers reported interest expense. 82.0 18.0 0.2 *** 17. 7 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. lowering the gross profit margin by 3.4 percentage points during the same period. General, selling, and administrative expenses increased in absolute dollars (by 13 percent) as well as in relation to sales from 1981 to 1982. In 1983, such expenses dropped in absolute dollars but rose by 2.3 percentage points in relation to sales, due to the lower level of sales. During the interim period ended June 30, 1984, U.S. producers reported an aggregate operating income of only $5,000, equivalen~ to an almost break-even point of 0.2 percent of sales, compared with $84,000, or 5.9 percent of sales, during the corresponding period of 1983. This occurred despite increasing sales. A-28 During the period under investigation, none of the producers reported any interest expense. * * * reported other nonoperating income. Hence, the ratio of net income before income taxes to net sales is slightly higher but it followed the similar trend as the ratio of operating income to net sales for all reporting periods. The responding U.S. producers reported declining cash flows from operations throughout the subject period, from * * * in 1981 to * * * in 19.83 and from * * * in interim 1983 to * * * in interim 1984. * * * * * * * Capital expenditures and research and development expenses.--Three firms, * * *• furnished data relative to their capital expenditures for buildings, machinery, and equipment used in the manufacture of the subject products and data relative to their research and development expenses. such data are presented in the following tabulation (in thousands of dollars): Period Capital expenditures 1981------------------ *** 1982------------------ *** 1983------------------ *** January-June-- l/ 1983---------------- *** 1984----------------- *** !/ Only 1 firm provided partial year data. ?:.I Not available. Research and development expenses *** *** *** ?:_/ ?:_/ Capital expenditures increased from * * * in 1981 to * * * in 1983, mainly because of * * *· Research and development expenses * * * in 1982, compared with * * * in 1981, and then * * * in 1983. * * * research and development expenses in 1983. U.S. producers' statements on the impact of LTFV imports from Italy on their growth, investment. and ability to raise capital.--The Commission requested U.S. producers to describe and explain the actual and potential negative effects, if any, of imports from Italy of certain valves, nozzles, and connectors of brass for use in fire protection systems subject to this investigation on their firm's growth, investment, and ability to raise capital. Excerpts of their responses are presented below: * * * * * * * A-29 Consideration of the Threat of Ma,terial Injury There are various factors which may contribute to the threat of injury to the domestic industry, including the ability of the foreign producers to increase the level of exports to the United States and the likelihood they will do so, any increase in U.S. importers• inventories of the subject products, and any increasing trends in the quantity of imports and U.S. market ·penetration. The available data concerning Italy's capa~ity to produce and export the ··subject products are presented in the section entitled "The Italian Industry" in this report. Another factor that can be examined in assessing the threat of injury is the trend in U.S. importers' inventories, as shown in table 12. For the seven subject product· categories, end-of:....year inventories of Italian products reported by * * *· As in the case of domestic producers' inventories, there is no discernible trend in importers' inventories. However, it is clear that the reported importers' inventories are substantially higher, in absolute terms, than reported domestic producers• inventories for most of the subject products. A discussion of the level of imports and their market penetration is presented in the following section of this report. Consideration of the Causal Relationship Between LTFV Imports and the Alleged Material Injury U.S. imports The TSUS items in which the subject products are classified are "basket" items which contain numerous products in addition to the subject products. Accordingly, the official import statistics of the U.S. Department of Commerce are not relevant to this investigation. All the import data discussed below have been obtained from responses to questionnaires of the U.S. International Trade Commission. A-30 Table 12.--Brass components for fire protection systems: U.S. importers' end-of-period inventories of Italian merchandise, 1980-83, January- September 1983, and January-September 1984 Item Jan.-Sept.-- • 1983 . . . . • 1980 • 1981 • 1982 • • • ! 1983 ! 1984 Fire hose couplings: Quantity 1,000 units--: Quantity 1,000 pounds--: Fog/straight stream nozzles: Quantity 1,000 units--: Quantity 1,000 pounds--: Angle-type hose valves: Quantity 1,000 units--: Quantity 1,000 pounds--: Wedge disc hose gate valves: Quantity 1,000 units--: Quantity 1,000 pounds--: Siamese connections: • Quantity 1,000 units--: Quantity 1,000 pounds--: Pressure-restricting valves: Quantity 1,000 units--: Quantity 1,000 pounds--: Pressure-regulating valves: • Quantity 1,000 units--: Quantity 1,000 pounds--: Total, 7 product categories : 1,000 pounds--: *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ; *** *** *** *** • • • *** ; *** *** *** ▪ *** *** *** *** *** *** *** *** • *** *** *** *** • *** *** *** *** *** *** *** *** • • *** *** *** *** ▪ *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***: *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. • • A-31 . U.S. imports from· Italy l/~/ of the subject products 11 were valued at $2.2 million in both 1981 and 1982 (table 13). In 1983, the value of imports decreased to $2.1 million, or by 3.0 percent. During January-September 1984, the value of imports amounted to $1.6 million, representing an increase of 1.7 percent compared with imports in the corresponding period i~ 1983. Imports declined in four of the six product categories for which there were imports between 1981 and 1983. Only siamese connections and pressure-restricting valves experienced increased imports between 1981 and 1983; however, the increases in imports of these two product categories were substantial. During January-September 1984, four of the product categories experienced declines in imports, measured in units, compared with imports in the corresponding period of 1983. There were no imports until 1984 of pressure-regulating valves. Market penetration of imports Imports from Italy of brass components for fire protection systems as a share of apparent U.S. consumption are shown in table 14. The ratio of import penetration for the seven major product categorie$ aggregated (on the basis of value) was 27.7 percent in 1981, 27.2 percent in 1982, 35.S percent in 1983, and 29.6 percent during January-September 1984. The estimated ratio of import penetration on the basis of pounds tends to be higher (see table 2). Counsel for Giacomini claims that due to Federal, State, and municipal building code changes, there has been a shift in market demand away from products used in standpipe systems to those used in sprinkler systems or combined standpipe/sprinkler systems and that this development (and not imports) is one of the causes responsible for injury, if any, to the domestic industry. The use of sprinkler systems tends to eliminate the need for wedge disc hose gate valves, which are used in dry standpipe systems only, and for fire ·hose boxes which usually contain fire hose couplings, fog/straight stream nozzles, and 1-1/2-inch angle-type hose valves or 2-1/2-inch angle-type hose valves with a 2-1/2-inch by 1-1/2-inch reducer. The four major building codes in the United States have indeed leaned towards omitting the hose requirements in most fully sprinklered buildings; however, some of the codes have imposed additional standpipe requirements for certain types of buildings. !I l/ U.S. imports from Italy constitute nearly all of the total U.S. imports of the subject products. However, * * *· · To date, no such products from countries other than Italy are known to have obtained UL or FM approval. ~I A representative of * * *· 11 * * * from Canada during January 1981-September 1984. !I Statement of Marshall Klein, expert in fire protection/building codes, postconference brief of the petitioner. A-32 Table 13.--Brass components for fire protection systems: U.S. imports from Italy, 1981-83,_ January-September 1983, and January-September 1984 Item Fire hose couplings: ... 1981 Quantity-----1,000 units--: *** : Value------1,000 dollars--: *** Unit value----------------: *** Fog/straight stream nozzles:: Quantity-----1,000 units--: *** Value------1,000 dollars--: *** Unit value----------------: *** Angle-type hose valves: Quantity-----1,000 units--: *** Value------1,000 dollars--: *** Unit value----------------: *** Wedge disc hose gate valves:: Quantity-----1,000 units--: *** Value------1,000 dollars--: *** Unit value----------------: *** Siamese connections: Quantity-----1,000 units--: *** Value------1,000 dollars--: *** Unit value----------------: *** Pressure-restricting valves:: Quantity-----1,000 units--: *** Value------1,000 dollars--: *** Unit value----------------: *** Pressure-regulating valves: : Quantity-----1,000 units--: *** Value------1,000 dollars--: *** 1982 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Jan.-Sept.-- 1983 1983 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 1984 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***Unit value----------------: ***--~~~~--~~~~~---~~~~---~~~~--~~~- Tot al, 7 product cate- gories-1,000 dollars--: 2,203.3 2,206.2 2,140.7 1,612.8 1,640.0 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-33 Table 14.--Brass components for fire protection systems: u~s. imports from Italy and apparent consumption, 1981-83, January-September 1983, and January-September 1984 Item and year :U.S. intports from Italy Fire hose couplings: 1981--------------: 1982--~-----------: 1983--------------: J'an.-Sept.-- 1983------------: 1984------------: Fog/straight stream : nozzles: 1981--------------: 1982--------------: 1983--------------: Jan.-Sept.-- 1983------------: 1984------------: Angle-type hose valves: 1981----------~---: 1982----------~---: 1983--------------: Jan.-Sept.-- 1983------------: 1984------------: Wedge disc hose gate valves: 1981--------------: 1982--------~-----: 1983--------------: Jan.-Sept.-- 1983------------: 1984------------: Siamese connectiqns:: 1981-~---------~--: 1982--------------: 1983--------------: Jan.-Sept.-- 1983------------: 1984---·----------: *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ·1 000~. dollars *** *** *** :· *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** : *** *** .·• *** : *** *** *** *** See footnotes at end of table. Apparent consumption !I l,000 units *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** .. 1.000 :· dollars *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Ratio (percent) of imports from Italy to apparent consumption 60.1 66.1 58.4 57.9 50.7 55.5 57.1 62.5 64.5 47.0 55.6 52.9 57.6 58.1 : 39.0 64.4 52.2 38.2 41.8 52.2 25.2 49.5 69.7 68.8 71.0 52.3 56.4 50.3 50.0 45.3 35.0 39.7 46.8 47.8 37.9 43.4 43.0 46.8 46.8 30.8 50.0 38.2 26.7 28.8 36.9 11.0 24.2 44.8 43.9 45.6 A-34 Table 14.--Brass components for fire protection systems: U.S. imports from Italy a~d apparent consumption, 1981-83 1 January-September 1983 1 and January-September 1984--Continued Ratio (percent) of Item and year :U.S. imports from Apparent imports from Italy Italy consumption !/ to apparent conSU111>tion 1.000 1,000 1.000 1,000 .. units dollars units dollars Pressure- : restricting valves: 1981--------------: *** *** . *** *** 12.8 10.1. 1982--------------: *** *** *** *** 35.3 23.4 1983--------------~ *** *** *** *** 64.9 50.9 Jan.-Sept.-- 1983------------: *** *** *** *** : 65.1 51.0 1984------------: *** *** *** *** 51.0 42.5 Pressure-regu- ... la ting valves: 1981--------------: 0 0 *** *** 1982--------------: 0 0 *** *** 1983--------------: 0 0 *** *** : Jan.-Sept.-- 1983------------: 0 0 *** *** 1984------------: *** *** *** ... *** *** *** Total. 7. product categories: 1981--------------: 2:/ 2,203.3 2:/ 7,960.3 2:/ 27.7 1982--------------: 2:/ 2,206.2 . ?:/ 8,107.2 2:/ 27.2. 1983----------~---: 21 2,140.7 21 6,023.7 2/ 35.5 Jan.-Sept.-- 1983------------: 2:/ 1,612.8 2:/ 4,616.8 1:/ 34.9 ·1984------------: 2:/ 1,640.0 1:/ 5,543.0 ?:/ 29.6 1/ Consists of U.S. producers' domestic shipments plus U.S. imports from Italy. Imports from countries other than Italy .are negligible. U.S. importers' shipments were not used in determining apparent consumption because only 2 of the 4 importer/distributors provided their shipment data in response to Commission questionnaires. '/:;_/ Not applicable because units of different product categories cannot be totaled. · Source: Compiled from data submitted in· response to questlonnaires of the U.S. International Trade Commission. A-35 The unit data in table 14 indicate that apparent U.S. consumption of fire hose couplings decreased in 1982, 1983, and January-September 1984 compared with consumption in the corresponding period of 1983. Consumption of fog/straight stream nozzles decreased in 1982, increased in 1983," and increased in January-September 1984 compared with consumption in the corresponding period of 1983. Consumption of angle-type hose valves decreased in 1982 and 1983, and increased in January-September 1984 compared with that in the corresponding period of 1983. Consumption of wedge disc hose gate valves decreased in 1982 and in 1983, and increased in January-September 1984 compared with that in the corresponding period of 1983. Consumption of siamese connections decreased in 1982, increased in 1983, and increased in January-September 1984 compared with that in the corresponding period of 1983. Consumption of pressure-re~tricting and pressure-regulating valves increased in 1982, decreased in 1983, and increased in January-September 1984 compared with consumption in the corresponding period of 1983. Comparative total purchases of the subject products produced in the United States and in Italy by three of the four importer/distributors are shown in table 15. Purchases of the subject products produced in the United States** *·from*** pounds in 1981 to*** pounds in 1982, or by*** percent, and then * * * to * * * pounds in 1983, or by * * * percent. Purchases of the U.S. products during January-September 1984 totaled * * * Table 15.--Brass components for fire protection systems: Purchases by 3 importer/distributors !I of U.S.-produced and Italian-produced articles, 1981-83, January-September 1983, and January-September 1984 Jan.-Sept.-- Source 1981 1982 1983 1983 1984 Quantity (1,000 pounds) Produced in the United States----: *** *** *** *** *** *** *** *** *** *** *** *** Produced in Italy----------------:~~~__;:.__~~~-=-~~~-=-~~~~...;_~~~~ *** *** ***Total------------------------:~~;..;.;..;.;~:.__~~~-=-~~~-=-~~~~..;_~~~- Percent of total Produced in the United States----: 13.1 22.7 18.3 18.0 34.2 Produced in Italy----------------=~~8~6~·~9:........:~.....:..7~7~.3~:..._----=8~1~.~7.....:..~__::8~2~.~o;_;,~~6~5~•.,....8 Total------------------------: 100.0 100.0 100.0 100.0 100.0 !/ Excludes data for * * *, which did not report usable data in all instances. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Cotnrnission. A-36 pounds, increasing by * * * percent over such purchases in the corresponding period of 1983. The share of total purchases represented by products produced in the United States increased from 13.1 percent in 1981 to 22.7 percent in 1982, and then decreased·to 18.3 percent in 1983; the share during January-September 1984 was 34.2 percent. In all of the periods shown, most of the subject products purchased by the three importer/distributors were produced in Italy. However, in contrast to.the trends of purchases of the subject products.produced in the United states, purchases by the three importer/distributors of the subject products produced in Italy decreased by * * * percent in 1982, * * * percent in 1983, and * * * percent during January-September 1984 compared with the corresponding period of 1983. Prices Both domestic producers and importer/distributors commonly offer discounts from list prices on brass valves, couplings, nozzles, and connections. For small transactions, producers usually sell at their list prices and require the customers to bear transportation charges. In larger transactions, producers generally offer substantial quantity discounts, and usually absorb shipping costs. !/ Because of the wide range of articles that are included in this investigation, it was necessary to choose some standard valves, couplings, nozzles, and connections that are commonly marketed by both domestic producers and importers for the purpose of price comparisons. The specifications of the seven items that were selected are presented below: 1. Fire hos.e couplings, 1-1/2 inches in diameter, 2. Fog/straight stream nozzles, 1-1/2 inches in diameter, 3. Angle-type hose valves for 2-1/2 inch lines, 4. Wedge disc hose gate valv~s for 2-1/2 inch lines, 5. Siamese fire department connections, double clapper, Y-type exposed patterns, two 2-1/2-inch inlets and a 4-inch outlet, 6. Pressure-restricting valves, 2-1/2 inches in diameter, and 7. Pressure-regulating valves, 2-1/2 inches in diameter. Data were requested from domestic producers and importer/distributors, by . quarters, for the period January 1982-September 1984. Producers were asked to report prices received on sales to their largest customers. In order to compare domestic prices and prices of imports from Italy at the same level of distribution, the four major importer/distributors were asked to report prices paid for both the domestic product and for imports from Italy. These distributors account for * * * of the imports from Giacomini, as noted earlier, and are also important buye~s of domestic products. · Four producers and all four of the importer/distributors provided price data. John w. Hoon, Inc., the largest U.S. producer of the products under investigation, reported some price data (while under subpoena) on the day the staff report was due to the Commission. Hoon did not provide the requested !I Data obtained from conversations.with industry sources and from questionnaire responses indicate that these transportation charges amount to less than 4 percent of the delivered price. A-37 data on * * *· Several clear patterns emerged from the usable data obtained from the domestic producers and the importer/distributors. After remaining relatively stable during 1982 and most of 1983, prices of several categories of domestic products -dec~ined significantly in late 1983 and early 1984 and have remained lower through January-September 1984. Prices of imported items were substantially below domestic prices throughout 1982 and 1983. However,.as a result of the domestic price declines, import prices have generally been about equal to or only slightly lower than domestic prices · during 1984. Trends in prices.--Weighted-average prices by U.S. producers for the seven items on which data were collected are presented in table 16. Price data reported by*'* * are included ·in a footnote to table 16. The data show that domestic prices of siamese connections and pressure-restricting.valves remained level during 1982 ·and much of 1983 but then declined sharply in the final quarter of 1983. The average price of siamese connections decreased from * * * in the second quarter of 1983 to * * * in the foprth quarter of 1983, or by * * * percent. It remained below* * * during January-June 1984. Similarly, the pri~e of pressure-restricting valves declined from* * * in July-September 1983 to * * * in October-December 1983, or by * * * percent. It continued to decline, but at a lesser ·rate,· reaching * ,.* * in April-June 1984. Prices of fog/straight stream nozzles declined from *· * * in .. July-September 1983 to * * * in October-December 1983. They remained below * * * during January-June 1984, but then recovered to * * :.* in July-September 1984. Prices of fi~e hose couplings, which were only available for three quarters, fell from * * * in October-December 1983 to * * * in the first quarter of 1984, or:by * * * peJ:"cent. ·prices of angle-type hose valves and of pressure-regulating, valves both fluctuated without any apparent trend .during the period of the investigation. In contrast to the other six items, the price of wedge disc hose gate valves increased irregularly from * * * in January-March 1982 to * * * in July-September 1984. Prices reported by * * * .. Weighted-average delivered prices paid by the four importer./distributors for the seven items are presented in tables 17 through 23. ·The data show that prices of U. s. ·produced_ f.ire hose coup lings, fog/ s~raight stream nozzles, angle-type hose valves, siamese connections, pressure-restricting valves, and pressure-regulating valves were all significantly lower in 1984 than in the previous two years, in which they were relatively stable. Prices for comparable products imported from Italy remained essentially unchanged throughout the investigation perio~. Comparisons of domestic and import prices.--Prices.paid for Italian fire hose couplings, fog/straight stream nozzles, angle..'..type hose valves, wedge dis.c hose gate valves, siamese connections, and· pressure-restricting valves were significantly lower than prices paid for comparable domestic items during 1982 and 1983 . However, · as a result of sharp dec.l i:nes in domestic prices , margins of underselling for all of the.se products narrowed significantly in Table 16.--Brass valves, couplings, nozzles, and connections: Weighted-average prices reported by U.S. producers !I on sales of selected articles to major customers, !I by quarters, .January 1982-September 1984 Period 1982: January-March-----: April-June--------: July-September----: October-December--: 1983: January-March-----: April-June--------: July-September----: October-December--: 1984: January-March-----: April-June--------: July-September----: .. !/ * * *· ... (l>ct_~ unit) . .. Fire hose couplings, 1-1/2 inches in diameter :Fog/straight: • stream : Angle-type *** : *** : *** : *** ! *** : *** : *** : *** ! *** : *** : *** :.. nozzles, :hose valves 1-1/2 • for 2-1/2- inches in : inch lines diameter *** : *** : *** : *** : *** : *** : *** ! *** ! *** : *** : •** : *** : *** : *** : *** ! *** ! *** : *** : *** : *** : *** : *** : : : . !I All prices are on a delivered basis. Wedge disc hose gate valves for 2-1/2- inch lines Siamese fire department :connections, double clapper, Y-type exposed patterns 3/ Pressure- : restricting • valves, 2-1/2 inches in diameter *** : *** : *** : *** : *** : *** : *** : *** : *** : *** ! *** . *** . *** : *** : *** : *** : *** : *** : *** : *** : *** : *** ! *** ' *** • *** : *** : *** : *** : *** : *** : *** ' *** • *** ' !I These connections each have two 2-1/2-inch inlets and a 4-inch outlet. Source: Compiled from data submitted in response lo questionnaire• of the U.S. International Trade Co11111lssion. Pressure- regulating valve·s, 2-1/2 inches in diameter *** *** *** *** *** *** *** *** *** *** *** >I (....> 00 A-39 Table 17.--Brass fire hose couplings, 1-112 inches in diameter: Weighted- . averag~ net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period U.S. product Italian product Margins of underselling (overselling) Amount • Percent. -----------------------per unit----------------------- 1982: January~March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1984: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-40 Table 18.--Brass fog/straight stream nozzles, 1-1/2 inches in diameter: Weighted-average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period U.S. product Italian product Margins of underselling (overselling) Amount Percent --------------------.--per unit------------------------ 1982: : . January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** .. *** *** 1984: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-41 Table 19.--Brass angle-type hose valves for 2-112-inch lines: Weighted- average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period U.S. Italian· Margins of underselling (overselling) product • product . Amount . Percent. . ----------------------per unit----------------------~- 1982: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1984: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** Source: Compiled from data submitted in response to questionnaires of .the U.S. International Trade Commission. A-42 Table 20.--Brass wedge disc hose gate valves for 2-112-inch lines: Weighted- · average. net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period U.S. product Italian product Margins of underselling (overselling) Amount : Percent ----------------------per unit------------------------ 1982: January~llarch-------: *** *** *** *** April-June----------: *** *** *** *** July-September-----~: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** 4pril-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1984: January-March-------: *** *** *** . *** April-June----------: *** *** *** *** July-September------: *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-43 Table 21.--Brass siamese fire department connections, double clapper, with Y-type _exposed patterns, two 2-1/2-inch inlets, and a 4-inch outlet: Weighted-average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period U.S. product Italian product Margins of underselling (overselling) Ainount Percent ----------------------per unit------------------------ 1982: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-Septeinber------: *** *** *** *** October-December----: *** *** *** *** 1984: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Co1lllllission. A-44 Table 22.--Brass pressure-restricting valves, 2-1/2 inches in diameter: Weighted-average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period · U.S. product Italian product Margins of underselling (overselling) Amount Percent. .. . ----------------------per unit------------------------ 1982: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1984: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. A-45 Table 23.--Brass pressure-regulating valves, 2-1/2 inches in diameter: Weighted-average net delivered prices paid by importer/distributors for domestic and imported products, and margins of underselling, by quarters, January 1982-September 1984 Period U.S. product Italian product Margins of underselling (overselling} Amount Percent ----------------------per unit------------------------ 1982: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1983: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** October-December----: *** *** *** *** 1984: January-March-------: *** *** *** *** April-June----------: *** *** *** *** July-September------: *** *** *** *** !I There were no imports of brass pressure-regulating valves from Italy in either 1982 or 1983. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Conunission. A-46 1984. Italian-produced * * * the competing domestic product in January- September 1984. 11 Comparisons of domestic and import prices for each of the seven items under investigation are discussed below. Brass fire hose couplings imported from Italy undersold the competing domestically produced product by an average margin of * * * percent over the period January-March 1982 to July-September 1983. As a result of decreases in the price of U.S.-produced fire hose couplings, the margin of underselling declined substantially in both October-December 1983 and January-March 1984. The average margin of underselling for the first three quarters of 1984 was * * * percent. Italian-produced brass fog/straight stream nozzles undersold the competing domestic product by an average margin of * * * percent over the period January-March 1982 to October-December 1983. The margin of underselling declined considerably during January-March 1984 due to a * * * percent decrease in the price of the domestic product. The average margin of underselling for the first three quarters of 1984 was * * * percent. Brass angle-type hose valves imported from Italy undersold the competing domestic product by an average margin of * * * percent over the period January-March 1982 to July-September 1983. As a result of decreases in the price of U.S.-produced angle-type hose valves, the margin of underselling narrowed in both October-December 1983 and January-March 1984. The price of the Italian product was * * * than that of the domestic product during the first three quarters of 1984. Italian-produced brass wedge disc hose gate valves undersold the competing U.S. product by a margin of more than * * * percent in all quarters during January-March 1982 through October-December 1983, yielding an average margin of * * * percent over this period. Due to a * * *-percent decrease in the price of the domestic product, the margin of underselling declined markedly in January-March 1984. The average margin of underselling for the first three quarters of 1984 was * * * percent. Brass siamese fire department connections imported from Italy undersold the comparable domestic product by an average margin of * * * percent over the period January-March 1982 to July-September 1984. The margin of underselling decreased from * * * percent in July-September 1983 to * * * percent in January-March 1984, the result of a * * * percent decrease in the domestic price over the same period. The imported product undersold the domestic product by * * * percent in the first three quarters of 1984. Pressure-restricting valves of Italian origin undersold the competing domestic product by an average margin of * * * percent over the period January-March 1982 to July-September 1983. As a result of decreases in the price of domestically produced pressure-restricting valves, the margin of underselling declined in October-December 1983 and to a greater degree in January-March 1984. In the first three quarters of 1984, the margin averaged * * * percent. ll There were no imports of pressure-regulating valves from Italy in 1982 or 1983. A-47 * * * As noted above, there were no imports of pressure-regulating valves from Italy in 1982 or 1983. Exchange rates The Italian lira depreciated relative to the dollar from early 1982 through the first three quarters of 1984, as shown by the nominal and real exchange-rate indexes in table 24. In nominal terms the lira declined by about 30 percent, decreasing in all but one quarter during this period. When the index is adjusted for the relative rates of inflation in the United States and Italy, the decline was much smaller. The real exchange-rate index decreased by only 15 percent over the period January-March 1982 to July-September 1984. Table 24.--U.S.-ltalian exchange rates: Indexes of the nominal and real exchange rates between the U.S. dollar and the Italian lira, by quarters, January 1982-September 1984 (January-March 1982=100) Period 1982: January-March-------------: April-June----------------: July-September------------: October-December----------: 1983: January-March-------------: April-June----------------: July-September~-----------: October-December----------: 1984: January-March-------------: April-June----------------: July-September---·---------: Nominal exchange- rate index 1/ 100.0 95.6 90.5 87.9 90.2 85.4 80.2 77.7 75.9 75.3 70.1 Real exchange- rate index 1/ l/ Based upon exchange rates expressed in U.S. dollars per lira. 100.0 97.4 94.7 95.0 98.9 94.9 92.8 89.9 89.6 90.5 85.5 Source: Compiled from data reported by the International Monetary Fund in the January 1985 issue of International Financial Statistics. Lost revenues * * * submitted * * * specific allegations of lost revenues on * * * sales of the subject products to * * *· The specific allegations, when aggregated, result in a claim of * * * in lost revenues in 1981, * * * in lost revenues in 1982, * * * in lost revenues in 1983, and * * * in lost revenues in January-September 1984, for a total of * * * in lost revenues. Most of the allegations were for sales since * * * prices for the subject products. * * * initial rejected quotations on the sales resulting in lost revenues amounted to approximately * * *; the accepted quotations allegedly amounted to A-48 approximately * * *· Allegations of lost revenues were provided for each of the seven categories of the subject products; the product with the largest amount of allegedly lost revenues was * * *· The Commission staff contacted * * * for verification of the allegations. * * * allegations of lost revenues were on sales to * * *· These lost revenues allegations amounted to * * *, of which approximately * * * occurred during * * * ·* * *, confirmed that * * * reduced its prices * * * to meet the foreign competition, and that the price reductions have * * * He said that * * * * * * * * * of * * * allegations of lost revenue were on sales to * * *· These lost revenue allegations amounted to * * *, of which approximately * * * occurred during * * *· * * *, confirmed that * * * reduced its prices * * * in order to meet the Italian price. He said that * * * price decrease was * * * * * *· * * *, confirmed that * * * reduced its prices * * * * * * of * * * allegations of lost revenues were on sales to * * * These lost revenue allegations amounted to * * *• of which * * * occurred during * * * * * * confirmed that * * * reduced its prices * * * * * *· He therefore confirmed * * * lost revenue allegations * * *· However, * * * noted that he was certain that * * * reduced its prices in order to establish grounds for bringing an antidumping investigation to the Commission, and that the Italian product will always be less expensive because the Italian product is forged whereas the * * * product is east and therefore requires more metal content in order to achieve the desired strength. * * * further noted that both the Italian product and * * * product are eertif ied as acceptable and meeting approved standards by UL and FM. He indicated that although the U.S. product and the Italian product both met the required standards, the Italian product would always be less expensive due to the aforementioned different manufacturing process employed in Italy. * * * of * * * allegations of lost revenues were on sales to * * *· These lost revenue allegations amounted to * * *• of which* * * occurred * * * * * *• confirmed that * * * met * * * in its * * * price reduction. By way of background to this price reduction, he said that Giacomini entered the U.S. market in the mid-1970's with an unspecified type of valve, which was offered at a lower price than the U.S.-produeed counterpart. He said that as Giacomini began introducing more and more products, volume was affected. * * * then began to raise prices on products in which Giacomini was not competing. * * * refused to meet Giacomini's price on the products that Giacomini exported to the United States, but * * * * * * decided to meet the Italian prices on those products. * * *• provided the following statement in the lost revenue section of its questionnaire response in the preliminary investigation: * * * * * * A-49 Lost sales * * * provided nine specific lost sales allegations relating to the subject products, amounting to * * * in lost sales. * * * * * * * * * provided three lost sales allegations, amounting to * * * * * * A-51 APPENDIX A NOTICE OF COMMERCE'S PRELIMINARY DETERMINATION A-52 Federal Register / Vol. 49. No. 133 / Tuesday, July 10. 1984 / Notices 28083 (A-357-GO'l] Prelmlnmy Detennln8tion of Sales at ..... ,..... F81r"V81ue:Certaln Valvn. eoup11np, Nozzln..,... eor..-.a1ons, of Brm, From Italy, SUltable for u.. In Interior Fire ProtectlOn Systems AGENCY: International Trade Administration. Import Administration. Commerce. ACTION: Notice. sUllllARY: We preliminarily determine that certain valves, couplings. nozzles, and connections, of brass. from Italy. suitable for use in interior fire protection systems. are beins sold., or are likely to be sold. in the United States at less than · fair value. Therefore, we have notified the United States lntemational Trade CommissiOn (ITC) of our determination. We have directed the U.S. Customs Service to suspend liquidation of all · entries of the subject merchandise and to require a cash deposit or the posting of a bond for each such entry in an amount equal to the estimated dumping margiil, as described in the "Suspension of Liquidation" section of this notice. If this investigation proceeds normally, we will make our final determination by September 17, 1984. eFFECTIVE DATE July 10, 1984. FOR FURTHER INFORMATION CONTACT: Julia E. Hathcox. Office of Investigations. Import Administration. International Trade Administration. U.S. Department of Commerce, 14th Street and Constitution Avenue. N.W.• Washington. i>.C. 20230, telephone: (202) 377-3464. SUPPLEMENTARY INFORMATION: Preliminary Determination We preliminarily detennine that certain valves. couplings. nozzles, and connections, of brass. from Italy, suitable for use in interior fire protection systems are being, or are likely to be, sold in the United States at less than fair value, as provided in section 733 of the Tariff Act of 1930, as amended (19 U.S.C. 1673b) (the Act). We preliminarily determine the w,ighted-average margμt of sales at less than fair value to be 1.16 percenL Case History On January 3, 1984, we received a petition from counsel for Badger- Powhatan. a division of Figgie . International, Inc. In accordance with the filing requirements of § 353.36 of our regulations (19 CFR 353.36), the petition alleged that imports of the subject merchandise from Italy are being, or are likely to be, sold in the United States at less than fair-value within the meaning of section 731 of the Act and that these imports are materially injuring. or threatening materially to injure, a United States industry. . After reviewing the petition. we determined it contained sufficient grounds to initiate an antidwnping investigation. We notified the ITC of our action and initiated such an investigation on Februaey 13, 1984 (49 FR 6396). On March 1, 1984, the ITC found that there is a reasonable indication that imports of the subject merchandise from Italy are materially injuring a United States industry. We presented a questionnaire to Rubinetterie A. Giacomini S.p.A. (Giacomini) on February 12. 1984. In accordance with our normal practice, we requested a response within 30 days. We instructed Giacomini to report its sales transactions in hard copy and on computer tape in th~ format outlined in our questionnaire. Since Giacomini claims to have made no 'sales of such or similar merchandise in the home market. we determined to use sales to a third country, Canada. for comparison purposes for this preliminary determination. Scope of Investigation The merchandise covered by this investigation is certain valves, couplings, nozzles. and connections, of brass. suitable for use in interior fire protections systems. from Italy. This merchandise consists of 11/2 inch and 21/:i inch brass wedge disc hose gate valves. as currently provided for in item 680.1430 of the Tariff Schedules of the United States Annotated (TSUSAJ; pressure restricting and pressure valves of brass, currently provided for in TSUSA item number 680.2720: single brass, clapper and double clapper siamese fire department connections (2¥2 inch inlet. 4 inch outlet) currently provided for in TSUSA item number 680.1420: 11/:i inch and 2112 inch brass fog/straight stream hose nozzles. currently provided for in TSUSA item number 680.1480; and 11/2 inch and 21/2 inch brass fire hose couplings, currently provided for in TSUSA item number 657.3540. The period of this investigation is August 1, 1983, through January 31, 1984. Fair Value Comparison To determine whether sales of the subject merchandise in the United States were made at less than fair value, we compared the United States price with third country prices or, where appropriate, constructed value. We used sales to Canada of such or similar merchandise as the basis for our comparisons. We may reconsider the appropriate comparisons for our final detemination and have requested further information regarding home market sales. United States Price As provided in section 772 of the Act. we used the purchase price of the subject merchandise to represent the United States price because the merchandise was sold to unrelated U.S. purchasers prior to its importation into the United States. We calculated the purchase price based on the F.O.B~ C. 6 F. and C.I.F. packed price to unrelated U.S. customers. We made deductions. where appropriate, for inland freight. insurance. and ocean freighL We disallowed an addition for a charge paid for shipping these products on less than a container load basis as we determined this charge to be part of the cost of ocean freighL Foreign Market Value We based foreign market value on the f.o.b. packed prices of Canadian sales made from August through November 1983. . We made comparisons of "such or similar" merchandise in Canada in accordance with section 771(16)(8) of · the AcL In calculating foreign market value, we·did not need to make currency conversions as all sales to Canada are shown in U.S. dollars. We made deductions, where appropriate, for foreign inland freight. We made adjustments for physical differences in the merchandise in A-53 28084 Federal Register I Vol. 49. No. 133 / Tuesday. July 10, 1984 / Notices accordance with 1ection 773(a)(4)(C) or the Act. Such adjustments for differences in the merchandise were based on differences in the cost of material. direct labor, and directly related factory overhead. Since the merchandise subject to this investigation was sold in identical packed conditions in both ~rkets. no adjustment was made for packing. We made no adjustment for credit expenses since credit terms appear to be identical in the United States and Canadian markets. We did not allow a claim for a quantity discount because, although respondent alleged cost justifications for selected models, respondent's sales listing did not demonstrate that this discount was specifJCBJly attributable to quantities involved. Giacomini produces two models of . pressure control valves which are s'!ld neither in the home market nor to third country markets. These valvs were sold only in the U.S. market; therefore, the Department determined that constructed value is the proper basis for comparison. Where we used constructed value as a basis for foreign matket value, we - calculated it to include the cost of materials, fabrication, general expenses, profit and cost of packing. We found that respondent's general expenses were greater than 10 percent of materials and labor; therefore, we used respondent's general expenses. We found that respondent'il profit was largei: than eight percent: therefore. we used respondent's profit. Verification As provided in section 7i6(a) of the Act. we will verify all data used in reaching the final determination. Suspension of Liquidation In accordance with section 733(d) or the Act. we are directing the United States Customs Service to suspend liquidation of all entries of the merchandise subject to investigation as described in the "Scope of Investigation" section of this notice. This suspension of liquidation applies to all the subject merchandise entered. or withdrawn from warehouse, for consumption, on or after the date of publication of this notice in the Federal Register. The Customs Service shall require a cash deposit or the posting of a bond equal to the estimated weighted- average margin amount by which the foreign market value ·Of the merchandise subject to this investigation exceeds the United States price. The suspension of liquidation will remain in effect until further notice. The estimated weighted· a verge margin is 1.16 percent. ITC Notification In accordance with section 733({} of the Act. we will notify the ITC of our determination. In addition. we are making available to the ITC. all nonprivileged and nonconfidential information relatins to this investigation. We will allow the ITC access to all privileged and confidential information in our mes. provided the ITC confirms that it 11.ill not disclose 1uch information. either publicly or under an administrative protective order, without the written consent of the Deputy Assistant Secretary for Import Administration. Public Comment In accordance with I 353.47 of our regulations. if requested, we will hold a public hearing to afford interested · parties an opportunity to comment on this preliminary determination at 10:00 a.m. on August 3, 1984, at the United States Department of Commerce. Room 3708, Hth St. and Constitution Avenue, NW .. Washington. D.C. 20230. Individuals who wish to participate in the hearing must submit a request to the Deputy Assistant Secretary for Import Administration. Room. 3099B. at the above address within 10 days of tbis notice's publication. Requests should contain: (1) The party's name. addreH, and telephone number, (2) the number of participants: (3) the reason for attending: and (4) a list of the issues to be. discussed. In addition. prehearing briefs in at least 10 copies must be submitted to the Deputy Assistant Secretary for Import Administration by July 27, 1984. Oral presentations will be limited to issued raised in the briefs. All 11.'Titten views should be filed in accordance with 19 CFR 353.46. within 30 days of this notice's publication. a~ the above address and in at least 10 copies. Alan F. Holmer, Deputy Assistant Secretaty for Import Administration. IFll Doc. •111111Filed7-: 1:46 am) lllWNG CODE .,....... A-55 APPENDIX B NOTICE OF THE COMMISSION'S INSTITUTION OF A FINAL ANTIDUMPING INVESTIGATION A-56 Federal Register / Vol. 49. No. 144 / WednesdayAuly 25, 10114 Notices 20029 Dreveseestion No. 7$1-TA-1119 (Ftrofil Certain Valves, Noniatt, and Connectors of erase Prom Italy for Use in Fire Protection Systems aonnev: United States International Trade Commission. ACTION histitatirm eta fusel - antidumping investigation and scheduling of a hearing to be held in connection with the investigation. 2PPICTI ►I DAM July 2.0. 1284. Suensaten As a result of an affirmative preliminary determination by the U.S. Department of Comae:ye that certain • valves. couplinss. toarles. and connections. of brass. from Italy. suitable for use in interior fire protection systems, provided for th Items 057.35. 080.14. or 1910.27 of the Tariff Schedules of the United States, are being or are likely to be, sold in the United States at less than fair value. the United States International Trade Commission hereby gives notice of the institution of investigation No. 731-TA-I05 (Final) under section 735(b) of the Tariff Act of 1930 (19 U.S.C. 1878d(b)) to determine whether an industry in the United States is materially Injured or is threatened with material injury, or the establishment of an industry in the United States is materially retarded by reason of imports of such merchandise. The Department of Commerce will make its final determination of sales at less than fair value in this use an or before September 17. 1984. and the Commission will make Its final injury determination by November a. 1984 (19 CFR 297.25). POO /M case INPONNATION CONTACT: George Deyman (202423-0484 Of ice of Investigation*. US. International Trade Commission. SUPPLONDITAIRT INPONNATTINC Sackgromid _ On March & 1984. the Commission determined on the basis of the information developed during the course of its preliminary investigation. that . there was a reasonable indication that industries in the United States were materially injured by reason of imports from Italy Gila hose couplings. fog/ straight stream nociles, angle-type hole valves. wedge disc hose gate valves. single and double clapper fire . departzesat comedians. and pressure TOS valves. all of the foregoing of brass and mein file protection systems. which were allegedly being •old in the United States at less than fair value (LTFV). The Comatkudon also determined that there was a reasonable indication that an industry in the United States was threatened with material injury by reason of imports from Italy of pressure regulating valves of brass. which were alleged to be sold in the United States at LTFV. The preliminary investigation was Instituted in response to a petition flied on January 2;1. 1984. by counsel on behalf oilledger-Powhatan. a division of Figgie International. Inc., Charlottesville. Va. Participation in the baestigation Parsons wishing to participate in this investigation as parties must file an entry of appearance with the Secretary to the Cozomission as provided in I 201.11 oldie Commission's Rules of Practice and Procedure (19 Mt 201.11). not later than 11 days after the - publication of this notice in the Federal Register. Any entry of appearance filed after this date will be referred to the Chairwoman. who shall determine whether to accept the late entry., for good cause shown by the person desiring to file the entry. Upon the expiration of the period for filing entries of appearance. the Secretary shall prepare • service list containing the names and addresses or all persons. or their representatives. who are parties to the investigation. pursuant to 201.11(d) of the Commission's rules (19 CFR 202.11(d)). Each document filed by a party to this investigation must be served on all other parties (as identified by the service list). and a certificate of service must accompany the document The Secretary will not accept a document for filing without a certificate of service (19 CFR 201.18(c)). A-57 Pedlral Reslater I VoL-48. No. tM I Wedneaday. July IS. tlM / Nolicn ....,, ...... AnJ buaiDell lafanulkla for wldda A public ftr8lon of tM atalf report -aonftdential 11.ntmat la dealnd aball GODtainina preliminuy ftndinss of fact ID be aubmitted aepuately. The eDYelope 1bi1 brftltiption will be placed ID tbe and all pqet of auch eubmlaatou mut public NCOrd on September H. tlM. be dearly labeled "'Coaftdential panuanl to I 20'1.ll of tba Comnt!MiOD'i Buainna lafonnatlon.~,Coa&dtntial RuJ.. (11O'R20'1.Zt). · nbmlaalcma ud raqmm for u..a•- oonftden!ial treatment mut conform ·--. with th• requirement. of I 201.1 of tbe Tbe Consmtaalon wW bold a public Commlaalon'1 tllle1 (11 a"ll 201.1). Marina ID comaec:tlon with tlala Por further Information .c:oncarmni the lnYntipliaQWnntna at 10:00 a.m. Oil ooad1U:t of the 111.vntiptlma. Mlriaa October Z. 11M. at tba U.S. IDternatloaal procedar-. ad nln of ,.....i Trade Commi•lanlhdldina. 701 B Street applicatima. CllDIUlt tbe Cmunillkla'a NW... Wuldqton; D.C. lteqaeata to aw• of Pdc:tlct uul Pl'ooedmw. Put appear at tba beulna abould be flied ID 20'1, Subputa A and C (11 CPR Put ID'7). wrllilla wida tbe SecretarJ to tbe and Put 21J1, Subputa A tbroqll B (11 _Cmnnluhm aot later tbaD tbe.doelol · D'll Put JD1). - · bualana (1.'11 p.a.) cm S.,tmnber tt. 'ftlla llOlim la Pllbllabed pmnut to - tlH. All pm1Gnt dalrlna to appear at lldlon 2D'1.2D of tbe C«-daataa'a Nlee . tbe llelrilll and mab oral Jn19Dtatrona (ti O'R 20'1.JD). abould Ile pnbadaa brief• ad attad .__ J111J a~ • a preheariaa aonfermace to be held at ., .."' .. c • n 'Hlaa 11S a.m. oa September11.11M. ID X....I..._, · room 117 of tbe U.S. lntarnatlonal Trade. • s.:i.1a17. Comm••oa BWJdtna n. dudline for lliD8 pnbeariaa brlefa la Septemblr'ZI.. ... ... .._... ,.,...... UM. . • a&.--,...... . Tatimoa)r at tbe pablic taeutna la pemed by llCtiOD JD'l.23 of tbe Commtp\on'a nalea (11 O'R '1111.23). 11da nle nqulna tbat tatb6ony be limited to a DODCDDftdentlaJ ~ ud anal71la of matmtal can~ ID~ . brlefa and to Information m>t a•allable At die time tbe pnhu""' brief WU ~All lepl 8flUID:flltl. ecancalc mlJlll. ad factual materiaJa relnant to tbe public laurlna abould be IDcbaded ID prabeartna brim In acmrdance with I '1111.22 (11 O'R .SI.ZZ). ,_tbeariua brim muat conform. with prowlalou of I '1111.zt (ti CPR 11111.zl) ad muat be nbmlttecl DOI later tban tbe doee al buin-. OD October I. UM. wdn..,..... ... JU mentloDed. partlea to thh lnvestiaation may file prebeartna and poetbecina briefa bJ the datet abown above. In addition. any perae,n who bu not entered u appearance a1 a party to the lnve1tigation may aubm.it a written 1tatement of information pertinent to the tubject or the lnvatigation on or before October 9. 1984. A apd original and fourtee'D (14) true copiea of each 1ubmi11ion muat be filed with the Seaetary to the Commi11ion in accordance with I 201.8 of the Commiaaion'1 rule• (19 CFR 2DU). All written 1ubmi11iom except for confidential busine11 data will be available for public lnlpection durins ngu1ar buainea• .boon (8:45 a.m. to 5~5 p._) ID tbe Office of tba Secretary to the Commiulon. A-59 APPENDIX C NOTICES OF POSTPONEMENT OF FINAL DETERMINATIONS 34380 A-60 Federal Register / Vo~. 49. No. 170 I Thursday. August 30. 19&; I Notices · Ce:-.ain Valves. Ccuplin;s, Names anc! Conneetions, of Brass, Suitable tor Use in trnerior Fire Prots..""tion S)"Stems, From ltaty; Postponement of Fmal Antidwnping Duty Determination AGENCY:_International Trade Administration. Commerce.- · --ACnOIC.Notic&. .. . -~· . - . - '.·:-ARY:~~-~::' - :that-the Depmtnient of CarmDerce-(tbe :-;· · · Department) ·baa received a iequest from c:owlsel iar respondent mthis . . .investigation. tbat tbe final . . < c • _ • determination be postponed. u provided for .m·aection ~){ZXA) of.::: tbe Tariff Ac:t of1930. as amended (the. Act) (19 U.S.C.1673d(a}(Z)(A): and.·that we have detemzined. to postpOne our . · 6Dal determination as to whether sa1eS :·· of certain valves. couplinp. nozzles. &Del connecticma, of brass. auitabl. far.use in .interior fire protection l)'lt!!Dll. &am Italy. have occarred at leas tban fair -_· value. until not later than November 23.. 1984." EFFECTIVE DATE: "Augus(J0.1984. POii AnmlD INFORMATION CONTAcr...~ . Julia E. Hathcox. Of&ce of . . ~ . . Investipticma, Import Admizdatraticm; ... Jntematicmal Trade AdministratiaD.1J.S.. - Deparl:mDf of ~erce.1fth Street.-~~ and Ccmstituticm Avenue. NW.; ·· · : ·~ - ~~J>.·C:~!~~-?.f!- • • • .;.· ... • • • ::~. ~ :· ~: 4 .. SUPPl.llllNTAllY INPOllllA'nOIC- .-. . ... '111e~- • . On February Z1..1S&t·the ~. of Commerce pabliahed notice iD tbe , = : · Feckal l.elists (49 PR 8396) that it wu.~ · . initiatingUUdersedi~m(b) af.1b8~.. -. - -(19 u.s.c. 1873a(b)). and antid""'rms~:'~:· . investfptian to deteminitwhetber ~·~ ~:=:':7::!:.t::~~~~··:--interior fire _..tectinn ._..._ ~-·~;~--: ·"" were-c-:..-:~or~~~~~, · ---::II~t 1~ th::'taiiftlii~jU!y~~ pbllahed. prelimina,iy. •,.. ·-· '>~. ·ofsai ·at1"a:th.i;~.£;.~-· - - ---~ - ___ g ...... ,_. . - - -~ . -~~th respect.~:@~~~~...:.·.. • _.(49 ~ ~). ne notice ·~~1bat-lf.t~ ;_· . tbia Jn.veatigati911 pi:oceeded normally~- . -_we would make our~ de~e~~mt-. · · bj $eptember17,·1984. · ·~ · :_,,_~ '• _ Counsel for respondent in this cue . .: - . requested that we extend the period for the final determination until not later . . . _than'November Z3. 1984.135 days after"._ the date_ of publication of the _ •'-· ~ · : preliminary determination, iD · . : ·• - l!~rd~ ·with s~o~ 735{a)(2)(A) of . the Act. Section 735(a)(Z)(A) of the Acl pro\·icies that the Department mav postpone its final determination • concerning sales at less than fair \'Blue until not later tha:i 135 da\'& after the date on which it publishes notice of its preliminary determination if the exporters who account for a significant proportion of the merchandise request an extension after an affirmative preliminary determination. Accordingly. we ~ill issue a final determination in this case not later than No\·ember :a. 1984. The date for the public hearing _ orginally scheduled for Aug-..ist 3. 1984 is bei:n8 changed. We will hold a public hearing on September 10.1984. H 10:00 - • a:m. in room 3708. Department of . Commerce. 14th Street and Constitution A\'enue. NW •• Washington. D.C,. 20"..30. This notice is published pursuant to section 735(d) of the Act. Dated: Ausust 20. 19114. Alu F. Holmer. -Deputy Auistant S.cretary for Import Administration. IPR D& tw:11m riled--=---: 1:t1 -1· -.uNGcGoE•..... :. A-61 Federal Recciste~ / VoL 49. No. ~7f I "Thurs::ia:,-. Septer.ibe: 13. 19e.; . Notice5 extension was to change tile schecicied ciate fo:- Commerce to make its fmai determination irom September 17. 1984 to no later than November 23.1984. Accordingiy. the Commission is revising its schedule .in tb2 mveslisation to comorm with C'.ommerce'• new schedule. . , ~. . . . · Die Commission's :&ea:m!g. which WU · to have bes:n..held DD October?. :l9M. · · · has been reschechlled a ,begin~ io a.m. _ ..• mil)ecemher 7•.1984, in 1be.He:aring .. : -'. · Boom; lntemational T.rade CommisSiml: ; ~ . -:'. Building. m~EStreet.NW..; Wuhingtoa ·., · Jl.C. Requests to ·appear at the lleariag ~ Shauld'be. Bled iD writing'with the . . . · Secetary to.tbe·CommisMn DOt later . - than the Close.afbvsi!WI (S:15i>.ID.) OD IN'TCRRA110NAL1'RAne COMMISSION . ·... ::. ·.. - £~tiun Ne. 731".'TA-115 (flMm eertmn·v.tves, N~ and _ Connectors of Brus Frosn Italy for Use in.Fn Protection Systems - AGelCT"-lnternatioaal T.rade Commission.; AC"nON: In coiiformance with the determination of the.lntemational Trade Adm.imstratian of the Department af · .Comm,.,,.. to amend .ita schedule for• conduct-of the-mfetmced investigation. - tbe Conmri•siou ~~its schedWe as follows: The prebeuing confanmce will bebeki on Novemberz. 1984: tJie ~ will be held OD ·. Pecember. 1. 1984; aDd. the-Commissim:l':a ftnal determinalicm..aball be iuaed.aa oc befaraJaDUry 7 .. ~ .: ::. -~ ':--:-. -,:·_·.'- ._ .: . _EFFECai~l)A'n:~~7,ia.. FOR FUADtER1HFORllATJOH COK'fAC?: • Mr. George l. Deyman. T2D2~l. Office of Investigations. I:itematiQDal · Trade Commission. Waahi."lgtoll.D.C. 20438. . . . SUPP\.EMENTARY INFORMATION: The Commission instituted this final anticiuz:riping investigation effective July 10. ·:984. and scheduled a hearing to be heid :., conr.ecticn therewith for October :. :~ f49 FR.3{;029. July :?S. 1984'). · Hcwe\·er. the De;:a.-tmer.! of C.:immerce ~X~e:lcied its ;n•·estigaticn in response to a ret;~st ::or:i cou.,sei for :-esponcier.:s :~ ::.s ::aves:i;~tic~. The effac!·oi ~1e ·November 20. 1984, All,pcSOD11.d••iri88 to appear at the hearing and make oral presentations should me prebearing briefs and attmd a preheaiing conference to be held at'lD a.m. on . November 'D. '1984. in room tt7 of tbe Intematioaal 'I'zacie CM!!!!••ion Building. The deadl.fne for filing prehe~ bam is NMember 30. UBL A pabiic versicm·of the prehearing-mif · report contaiuiDg preliminary findinp d. fact iD this iD,vestigatiOD wilJ,be ,placed. ' in 1he pub1ic m:orda on Nuveuibc 20. .. .198'. The deadline for tB:mg postbearina brim is Deceumet l4. l9&L . . luued: Sep~'· 1SIM. BJ order of the C«vnP'iMion. K811118th.Jt. .._.. Secretary. [FRDac....__,...,~- -.r...a com,....... -- A-63 APPENDIX D NOTICE OF COMMERCE'S FINAL. DETERMINATION 47068 A-64 Federal Register / Vol. 49. No. 232 I Friday, November 30, 1984 I Notices (A-137-CI07) FIMI Detennlnallon of s.lee at IAu Thin FalrValue; C...... y...,_,Coupllnga. Noa... met Connectlona. of ar.s. Sultable for U.. In Interior Fire Protection Systema, Fralll n.ly AGINCY: International Trade Administration. Import Admbdatration. Commerce. ACTION: Notice. IUMMAllY: We determine that certaiD valves, couplinss. nozzles and connections. of brass. suitable for un in interior fire protection systems. &om Italy (fire protection products) are being sold. or are likely to be sold. In the United States at· leas than fair value. We have notified the United Statet International Trade CorDminion (ITC) of our determination. and we have directed the U.S. Customs Service to continue to suspend liquidation of all entries of the subject merchandise. We have directed the U.S. Customs Service to require a cash deposit or the posting of a bond for each such entry in an amount equal to the estimated dumping margin. as described in the "Suapemion of Liquidation" section of this notice. EFFECTIVE DATE November 30, 1984. FOR FUllTHE1t INFORMATION CONTACT: Julia E. Hathcox. Office of Investigations, Import Administration. International Trade Administration. Department of Commerce, 14th Street and Constihition Avenue NW.. Washington. D.C. 20230: telephone: (202) 317--0184. .A-65 Federal Register f Val. 49'. ·No. 23Z I Friday, Npvember 30. 1984 J Notices. 47067 IUllPUMINTMY INFORMATION: verified these responses. in lfaly during Final Deterraipatioia the period October 24-26, 1984. . _ merchandise was sold to unrelated U.S. purchasers prior to its importation into the United States. We calculated the purchase price based on the F.O.B... C. & Based on our investigation and in On October t6, 1984. in accordance accordance with aectioD 735{a} o! the . with requests from counsel for petitioner Tariff Act oC 1930,. as -amended (19' •. and C01DiseI for respondenf, a public· U.S.C. 1673d(a)) (the Act), we detennine hearing was held. : . F.. or CJ.F.. packed price to unrelated U.S. customers. .. that fire protec:ticm products frum ltaly Scope of Investigation are being sold in the United States at The merchandise c:Overed by tJiis · We. madir deductioita.. where appropriate-. for inlaDd freight. marine insuranee. ocean freight and a surcharge for less than container/load shipments.. - _.__ less than fair value. WithiD the meaning investigation includes: Fire Jiose of section 731 of the Act. couplings fl~ and 2'2 inch}, fog/ We found tha_t the foreign market. smiigbt stream nozzles.(1 ¥.a and · value of fire protection products frQm 2¥.ainch), angle-iype hoae sate valves Fo1'.9ign Market Value - Italy exceeded the United States- priw fl JJ. and 2'2 inch), wedge-disc hose gate.. on all salea. The overall weighted- . valvu(2¥.a inch}.. single and double In accordance with section 773 of the Act,. we basedforeisnmarket value on the F:O.B.. delivered. pai:ked price& or ex-factory. packed prices- of noules. ansle-lwiit iate valves. wedge-disc hose gate valves. and couplings sold in the Italian home market. We c:ompared identical merchandise where possible. Where DO identical men:handise WU sold in the home market we made . . coniparisomt in accordance with section average m&rgin on all Alea compared is cl8pper liameu. fire department 3.4'1 percent.: -· ·connedicu (2~ incli inlets. and f inch Case Histoly · wdetaJ. pressunuestric:ting Ya1'9n, and On January 3. 1984, we received a pname replatiDs valYa. This petitiGn &om·Badger-Powhatan. a merchandise i9 c:mently danified division of Figgie International Inc:.. on llDda the foUowiDs item 1111111ben of the behalf of the· fire protection. pr.oducta Tariff Scbet:JaJ..iitl Df thlt Unit/Id States ind111Jtr7 in th United Sbites. In /Annotated): fire hose coaplinp- . ac:c:urdanR.with the filing requiremenfs 651.3S4Q. .fas/straight meam nozZles . el I ms of our reguJatiam (19 CPR 680.1~.ug)e-type h088 gate valve.,_... · . 313.31". thepetition - 1t--a that i-. 880.1440,. wedge-disc •a.a sate valve.-. of flnrT~m ~from rt;".;;, eao..1G>. lingle and i1oub1e 'clapper 111(16)(B) or(C} Of the Al:t. . . for these fou product cafegories. we made deduc:tiem. where appopriate. for being, or me libly to be• .Old in the . liamese &re department cormectioae- Uniled States at-la• than fair nlue; l8D.M28. pnanre iestricting valYe&- · fontp iRlnd freight. Giacomini · reported average· inland fnrisht charges. for all lines of merchandise sold in its home market. We were able to ascertain an am~ for inland hight specifically within the mftnint of arection m of th · 1a1-. and preanre rep)ati118 Act ad tbtil these imporll llftt . ~40. ·· maferiaJly injuring, or threatenmr If> aateriaDy injare•• Uafted ·- industry. . Afterrnfewfngtfni petHfOJr. .. detetmfued it conlafaed aaffieienf srounds ta initiate an. anttdumpfng inftSffption. We notified the rrc of qar action and initiated the hm!sftgatton oa February .13.198' (49 PR 8396}." On March t. w the rrc detet:udne.t tfrat there fa a reasonable indlc:don tlmt imports of fire protection produc:fs anr me:tertany fnfming a Un:ifed Sfafea- industry. . . - ., ; .. . On March 2. 1984. we presenfed an antfdumping questtonnafnJ to R.ubinetterfe A. Giacomini S.p..A. (GiaCOUlini). the sole Italian manufacturer selling lhe subject merchandise far~ to the United . States.. We received a respons.,.rrom Giacomii'.i on April 20. 1984. On July Z 1984, we prelimiilarily determined that then is a reasonable basis to believe or iuspeCt that fire protection producfs &um Jtaly are being. or are lilcely fO be. sold at less than fair value. On July 9-t3, 1984, we verified Giaccnnini's response. On Augusf 20. 1984, we p11br1Shed •-· notice postponing our final ·determination from· September 11, 1984. until November 23, 1984. at the request of counsel for the respondent in accordance with section :735(a)(2J(AJ of the Act (49 FR 32296). We received supplementary responses on August 13, August 20, and September 17, 1984, and Fafr-¥aflllt'Qn1q»&HN.· - Jelated to- sales of fhttmen:handise . To dlllerlniM wbethn ialea ol tbe - under inYestfptfon. W• have used" this IUhject merchalldi•ID \he UDited verified wefshtetl-e~ amfJunt in . Stata. were made at Jeu. than fairvalue. IDlddns these deductions. We also wa compared the um.i States price deducted home market pac:ldng costs . with home market prices. third countrJ and added the costs· of U.S. packing. We .prices m eomtracted value. Wa ued made adjustments. wfiere apprapriate, home-market lalea. of DO&i:les, wedge- IOrphysical differences fir th8' . disc hose-gata nlves. couplinp and merchandise in accordance with section ansle hoee gate valvea fer purpaeea. of "3(a)(4J(C} of t&e Act. Adjustments for - CUlpuima. Wa ua8d sales to Canada of differences in thttmeto:handise were siamese c:mmec:\ors am pzesaure bated mr differences in the cost of restricting valvn fOl' purposea of nnrteriaf. direct Ia&or; and directly compariaon..Sin'2 die presaure related factory overhead. We also . regulating valves w:ere sold only in the adfasted, where appropria~ for Q'nited Sbltea. we ased eonatruc:ted . difference& between the commission on vaba u oar basia for c:ompuiSOD. sales in the Itanan marl:et and indirect The ua of Italian home market prices· - sellins eXpen8es in the U.S. market iri for Dozzles, wedge-disc hose gate . accordance with 19 CFR 35!.lS(c). . valves.couplmp and angle hose sate .. . Further adjustments. .we made for valves ftpireseuta a departure. from our differences in credit terms between ~ preliminaiy. determination. in which we home market and U.S.muket. We ued sales to Canada of auch or similar disallowed a five percent adjustment to merchandise aa the baais for our the gross pricdor before sale comparisons. Following the preliminary warehousing aa this claim was not in determination. the Department accordance with 19 CFR 353.15(a). We determined that for the previously also disallowed a claim for publicity mentioned ptoducts sales of such or costs. because such costs were not similar.merchandise did exist in the attributable to a letter sale of the home market during. the. period of mercflandise bf a purchaser. We did not investigation: allDw a claim for a quantity discount United States Price because, although respondent alleged cosf justifications for selected models. respondent did not demonstrate that this discount was granted on all sales of cemparable quantities. We ~Iso did not anow a claim for expenses paid to the Aa provided in section 772 of the Act. we used the purchase price .of the subject merchandise to represent the United States price. because the A-66 47068 Federal Register I Vol. 49, No. 232 / Friday, November 30, 1984 I Notices home market sales personnel of Giacomini as part of that company's compensation plan because these expenses were indirect selling expenses. Foreign market value for single and double siamese fire department connections and pressure restricting vaives was based on the F.O.B.• packed prices of Canadian sales. We ·made similar merchandise comparisons in accordance with section 771(16)(8) of the Act. We made deductions, where appropriate, for foreign inland freight. We made adjustments for physical differences in the merchandise in accordance with section 773(a)(4)(CJ of the Act. Such adjustments for differences in the merchandise were based on differences in the cost of material. direct labor. and directly related factory overhead. We made adjustments for differences in credit expenses in th!? United States and Canadian markets. Smee these two product categories were sold in identical packed conditions in the U.S. and Canadian markets. no adjustment was made for packing when comparing these sales. · We did not allow a claim for a quantity discount because. although respondent alleged cost justification for selected models._ respondent's sales listing did not demonstrate that this discount was granted on comparable quantities of all sales. For the pressure regulating valves, we used constructed value. Where we used constructed value e.s a basis for foreign market value, we calculated it to include the costs of materials, fabrication. gener81 expenses, profit and cost of packing.·We found that respondent's general expenses were greater than 10 percent of materials and fabrication; therefore, we used respondent's general expenses. We found that respondent's profit was larger than 8 percent of material. fabrication and general expenses: therefore, we used re.spondent's profit. Petitioner'• Comments Comment 1. Petitioner states that foreign market value for the A7/1 adjustable fog/straight stream nozzle should be based on home market priceE reasonably contemporaneous with export prices to the United States. Petitioner further states that where ntl home market sales of the A7 /1 were made near the date of export of the A7 to the United States, the Department · should rely upon offers for sale as the basis for foreign market value. DOC Position. For purposes of the final determination, we found and used lictual sales of the A7 /1 nozzle made in the Italian market during the period of investigation. Giacomini made sufficient sales of this product in the home market during the period of investigation to warrant the comparison of actual sales in the home market to sales to the United States. Since we used actual sales. petitioner's comment that we should use offers of sale is moot and need not be addressed. Commentz. Petitioner states that the R55 wedge-disc hose gate valve sold in the Italian market should be considered similar to the A53 wedge-disc hose gate valve sold by Giacomini in the United States and that the Department should base foreign market value of the A53 wedge-disc hose gate valve on the sales price or offered price of the 21h inch R55 wedge-disc hose gate valve sold in Italy. Petitioner further comments that the R55 gate valve in comparable merchandise as it is used fqr "like" purposes: namely. .. the control of a flow of water in a straight stream in a stand pipe system. DOC Position. We agree. The Department had determined that the R55 wedge-disc hose gate valve sold in Italy is similar merchandise to the wedge-disc hose gate valve sold by Giacomini in the U.S. market in accordance with section 771(16)(C) of the Act. During the course of verification. the Department detel'JJ)ined that construction of the R55 was closely related to that of the A53. In addition we found the R55 and A53 valves to be of the same class or kind and used for like purposes. that is. ·to control a flow of water in a straight stream in a stand pipe system. The R55 is sold on an individual basis in the · home markeL During the course of verification. we could not establish that the R55. as an individual product. is used in the Italian market only for plumbing and heating and not for fire protection purposes. We verified that customers in the Italian market who ~ purchase fire protection products also purchase the R55 as an individual unit. Therefore. we do not consider the fact that the R55 is part of a large unit used for fire protection purposes (A20) to be relevant to our decision that the R5S is similar merchandise to the A53. Thus we determine that the R55. on an individual . basis. is similar to the A53. Considering the statutory preference for comparir.g merchandise sold to the United States to the sold in the country of exportation, the Department had determined that the R55 valve is the proper comparison for the A53 valve for this final detel'.lllination. Accordingly, we have not used the Canadian market sales of AS6 angle hose gate vah•es that were used for our preliminary determination comparisons. Comment 3. Petitioner states that the A.20 truck couplings produced in Italy by Giacomini perform the identical function in Italy as siamese fire department connections in the United States. Petitioner states that these articles are "such or similiar" merchandise to th~ siamese fire department connections sold by Giacomini to the United States. According to petitioner, the truck coupling is used in the Italian home market in the same manner and for the same purpose as a fire department connection in the United States: that is. both tbe truck. coupling and the siamese connector permit a fire truck to attach a hose to a building and to pump water into the building to supplement the municipal water supply and to increase the pressure of the water going into the stand pipe system. DOC Position. We dise.gree. The Department has determined that the A20 · truck coupling sold in Italy cannot be considered such or similiar merchandise within the meaning of the statute when compared to siamese fire department connections in the United States. First. the siamese clapper and the A20 truck coupling are quite different in appearance. They are composed of different components, with the clapper being made mainly of brass and the A20 being composed of brass. steel. aluminum, rubber and other materials. The working components of these two items differ considerably. The A20 consists of four different valves, each having a specific function and each having a certain number of subparts. The double siamese clapper, however. consists merely of a body, two clappers and pinlug swivels. Thus. we feel that these two products are different; rather than similiar. in terms of both material components and parts. · In addition the siamese clapper and .the A20 truck coupling are not aimiliar in the purposes for which used under either section 771(16)(8) or (C) of the Act. The double siamese clapper has the sole purpose of pro'\;ding an auxiliary inl~~ to supplement the fire protection water supply. The A20 also prevents contamination of the municipal water supply when the fir~ protection system is in use and also prevents possible backflow problems. Tne four different valves on the A20 serve two purposes, the prevention of backflows and unacceptably high water pressure. The A20's relief valve works as a safety measure to prevent increased water pressure from contaminating the municipal water supply, while the swivel valve and gate valve start stop. and control the flow of water during operation. A-67 Federal Register / Vol. 49, No. 232 / ·Friday, November 30, 1984 I Notices 47069 In. light of this, the Deparbnent used Canadian sales of siamese clappers to compare with sales of siamese clappers in the United States for this final . determination. · Comment 4. Petitioner states that Giacomini'• home market sales response discloses that the alleged total quantities of nozzles. couplings, and · valves do not agree with the quantity of · merchandise set forth in other Giacomini sales material. In addition. petitioner states that the total realized selling valves submitted for salea . between August 1, 1983, and January 31, 1984, do not agree with the totals for each product reported in the home market sales computer printouL· DOC Position. The Department recognjzes that certain discrepancies regarding the quantity of merchandise and overall sales vales exist when comparing certain Giacomini sales material and the home market sales computer printouL We must point out that respondent's invoicins procedures are not computerized. For purpoaes of submitting thia response, ~t manually gathered invoices and put the iilformatimuequired from them.into a form usable for producing a cmnputerized respome; nae Department recognizes that GiaCOQlini's cesponse may .be characterized by some sl.ipt discrepancies. However, these . disc:repanc:ies are too ·minor to warrant a rejection of the entire Giacomini fesponse. . Comment S. Petitioner states that the · Dep~t should not permit any adjustments to foreign market value for quantity discounts claimed u a deduction by Giacomilli. Petitioner states that, with regard to these claimed quantity discount.a. Giacomini has failed t~ show that there are cost 8'vinP directly attributable to the production of. different fire protection products and that, rather than a cost-based quantity discount, the quantity discount is nothing more than a selling. device to obtain long-term contracts from U.S. customers. Petitioner has pointed out that quantity discounts have been given by Giacomini on certain shipments of lesser quantities and not on certain shipments of greater quantities. Thus. - petitioner states that the discount is not shown to be based on the actual quantity purchased, but is allegedly the result of savings o~sioned by the length of the contracL Petitioner states that the cost justifications presented are no more than post hoc attempts to find savings which did not actually accrue with respect to specific shipments of specific quantities. _ DOC Position. We agree. For purposes of the final determination, the Department has disallowed the quantity discount claimed by respondent in its U.S. market. The Department cannot accept a claim for adjustment for differences in quantities on the basis of the volume of sales contracted for by·a particular customer unless the discount ii given on all sales of comparable quantities. Respondent has not submitted sufficient information to demonstrate that such savings relate to · individual sales, and there ape sales to the U.S. reflecting no discounts that were larger volumes that those to which quantity discounts were applied. Comment 6. Petitioner states that the Department should reject alleged differences in credit costs and investigate credit terms offered to u~s. customers. Petitioner states the Department verified that the payment period on certain selected U.S. invoices was longer than 90 days as reported by Giacomini and that, as a result. credit costs are higher than reported in the response. Petitioner also states that there i8 no mention in the verification report of whether the interest rate used to compute credit costs was verified. In addition, petitioner questions the credit costs shown in the home market questionnaire response. Petitioner indicates that Italian credit costs may be overstated. DOC Response. During the courle of verification of the U.S. response, the Department did find that the payment · period for certain U.S•. invoices was .longer than the 90 days reported by Giacomini. The Department did verify the interest rates used in calculating the U.S. credit costs. All of the above was taken into consideration for purposes of this final determination. In addition, Giacomini'• home market credit percentages, used to report credit expense. were verified and no discrepancies were found. Comment 7. Giacomini exported the models A165 and At67 pressure control valves to the United States during the period of investigation. Since there were no home market. Canadian or sales to other third countries of these articles, the Department. for purposes of its preliminary determina_tion. based the foreign market value of these products on constructed value. The production costs upon which these constructed values were based were verified by the Department. Petitioner states that this verification covered only the cost of materials, processing costs, and selling · and general administrative expenses. Petitioner states there is no mention in . the verificatio~ of depreciation, research and development costs, and tooling costs which one criuld-expect to b~ ._ found in the case of "prototypes" with "problematic engineering configuration." DOC Position. Processing costs includes such items as labor and factory overhead, the latter of which in . Giacomini's case is composed of nearly twenty separate accounts and was · included in the constructed value of models At65 and A167. There is no specific account entitled research and development (R Br: D). However, costs associated with R Br: Dare accumulated through overhead and labor accounts, specifically, through the accounts labelled tests and inspections, worker wages and employee salaries, maintenance and repair of machinery, and equipment and tooling. Therefore, the Department's calculations of constructed value accounted for all elements of costs. Comment 8. While Giacomini claims it does not sell pressure restricting valves in the home market. petitioners notes the inclusion of a •'pressure restricting device" in Giacomini's literature discussing Italian fire protection producits in general. Petitioner questions . whether or not Giacomini ·sells such a · pressure restricting valve in the home market"and states that investigation of this question is necessary. DOC Position. At verification, the Department made every effort to ascertain whether Giacomini sells prP.Ssure restricting valves for fire - protection purposes in the home market. As a result, the Department has determined that Giacomini does not sell . a pressure restricting valve in Italy. Therefore. the Department has used pressure restricting valves sold by Giacomini in a third cou."ltry, Canada, for comparison to the pressure restricting valves sold in the United States. Comment 9. Petitioner notes that respondent has claimed an adjl!stment . for publicity costs in its Italian sales response. Petitioner states that, absent information that respondent incurred these publicity costs on behalf of its customers' resales, this adjustment is not permissible. DOC Position, We agree. During the course ofverification. the Department found no evidence that the publicity costs claimed as an adjustment by . Giacomini were made on behalf of . c--istomer resale efforts. According to 19 CFR 353.15(b ), "allowances generally will not be made for differences in advertising and other se!Iings costs of a seller unless such costs are attributable to a later sale of the mercha.ndise by a purchaser." In accordance· with our regulations. the Department did not •. . A-68 4'7070 Federal Register / Vol. 49. No. 232 I Friday, November 30, 1984 I Notices allow this adjustment for purposes of the final determination. Comment 10. Petitioner states that production cost figures for Giacomini's home market and U.S. market productS are understated in Giacomini's supplemental submission when compared to the cost figures found in Giacomini's original questio!Ulaire response. Petitioner states that. in view of this. the Department should use the cost differences present in the original questionnaire response for purposes of ·· the final determination. DOC Position. During verification of the original response. the Department discovered that the company had provided costs which did not correlate . to the period of investigation; Instead. the company has extracted the most current information available from its accounting records. · · As discussed in the verification report. the Department requested that the response be re-worked using information corresponding to .the period of investigation. The re\ised costs were those which were verified. The most significant change between the two responses occurred in the area of raw materials. where the prices paid for · braBS increased substantially during the period. There were no changes in the methodology used to allocate expenses to the products. · . Comment 11. Counsel for petitioner requested that the Dep&rtmept m~e a detemination regarding ~e proper basis for comparison of Giacomini'• sales to the United States. Petitioner pointed out that while identical products may not have been sold in the home markeL products which could be considered similar merchandise possibly were being sold in the home market. Petitioner pointed out that similar home market products would be statutorily preferred for comparision purposes to similar or identical products sold in a third country, Canada in this case. . DOC Position. In its April 20, 1984. questionnaire response, respondent pro1tided a listing of all Canadian sales and all U.S. sales of the merchandise under investigation. The Department determined to use the Canadian sales of str~ight stream/fog nozzles, wedge-disc hose gate \•alves, angle hose gate valves, couplings and connectors as the basis for comparision for purposes of the preliminary determination. For pressure reg-.ilating valves we used constructed value since there were no sales of similar merchandise in the home market or to third countries. After the preliminary determination. the Department requested that respondent submit a listing of all products sold in the home market.which could be considered as fire protection products. The Department determined that similar wedge-disc hose gate valves, couplings and hose gate valves and identical straight stream/fog nozzles were being sold in the home market. The Dep~rtment requested. home market · sales listings from Giacomini for all those products. In response.· Giacomini submitted a home market sales listing which included angle hose gate valves. straight/stream fog nozzles;·and fire hose couplings.. Upon ~er request . from the De~ent. respondent submitted sales of the R55 wedge-disc hose. gate valve. According to respondent. siame!Je connectors. {lJld pressure restricting valves were not sold in the home market during the period or investigation. AS this was substantiated during our verification. we considered Canadian sales of siamese connectors as the proper basis of comparision for our final determination. An explanation of the Department's decision that similiar merchandise. or identical merchandise in the case of the fog nozzles (See DOC position in . response to Petitioner's Comment 1), was sold in the home market during ~ period of investigation follows. In examinq tbe similiar merchandise question. the Department looked ·to the criteria for similiar merchandise as · listed in section 771(18) of the Act. To be viewed as similiar merchandiseo uoqer _ section 771(18)(C) of the Act ·· merchandise must be: (a) Produced in the same country and of the same , general class or kind as the merchandise which is the subject of the investigation. {b) like that merchandise in the purposes for which used and (c) such that the administering authority determines may be reasonably compared with that merchandise. First, the Department determined that all prodw:ts involved in this discussion are produced in Italy, manufactured by Giacomini. and are of the same general class or kind or merchandise subject .of this investigation'. Specifically. we determined that the USA-A70 coupling 11/z inch and the USA-A10 coupling Zl/z inch are both similar to both the Italian A9/1 coupling set 11/z inch and the Italian A10/1 coupling set 21/z inch in general physical characteristics. in that all are produced by the same manufacturing process. consist of the same component parts, show similarity in weight and are produced from the same major material component, brass. We also determjned that both the USA- . A56 hose gate valve 1 ~i inch and the USA-A56 hose gate valve 2112 inch are· similiar to both the Italian Al I/a hose gate valve 11/a inch and Italian A 12/3 21/a inch hose gate valve in general ·physical characteristics in that all are produced by the same manufacturing process. consist of the same component parts, show similiarity in weight. and are produced from the same major component material. brass. We determined that the USA-A70 coupling 11/z inch, the USA-A70 coupling Zlh inch. the Italian A 9/1 coupling set 11/z inch, and the Italian A 10/l coupling set ·21/z inch are all used for the same ·purposes. The U.S. and Italian couplings perform the same function: that is, connecting fire hoses. The Italian couplings are extenudly threaded while the U.S. couplinp lll'J! internally threaded. However, this is not a significant difference as the two couplings can still be attached to fire hoses and can-.be use to extinguish fires.. The.U.S. and Italian products are produced to m~·different testing specifications. Ho~ever, it is possible to use and Italian cqupling in the Unite.d ·states within the confines of its teatins paramerera. and vice versa. · We determined that the USA-A58 hose pte valve t lh inch, the USA-56 hose gate valve Z1n inch. the Italian A 11n hose gate valve t 1n inch and the ltalian·A 12/3 21n inch hoie gate valve are-all. used far the same purposes because both Italian aild U.S. aqle hose val\res are used simil~y for the control of water ftow. Regardless of the fact that ItaliBn angle ho.., valves are pressure tested and bydrostatically tested to. withstand pressures lower than the U.S. valves which· are teated to meet United Laboratories Underwriters (UL) . specification&. the two v~ves perform the same function: in the U.S. market as well as the Italian market. The Deparbnent has al8o determined that all of the aforementioned U.S. merchandise may be reasonably · com.pated to the specified Italian home market merchandise. • Finally, the Department decided that the fact that the U;S. products were produced to meet UL standards, while the Italian products meet other standards. wu llOt a factor which would wammt a decision that the . pre\iously mentioned products were not similar. · ·ForCiiscussion of the such or similiar issue "'ith regard to the R55 wedge-disc hose gate valve, see Petitioner's Comment?.. . Comment 12. Petifioner states that respondent may have lowered production costs by allocating all production costs on the basis of labor hours p~r wiit rather than on the basis of the relative weight of domestic versus U.S. products. Petitioner further states that examiniition of the venfication A-69 Federal Register / Vol. 49, No. 232 / Friday, November 30, 1984 I Notices 47071 report suggests that costs may have been attributed to units on the basis of labor hours or machine time. DOC Position. The Department verified the methodology used to allocate all processing costs and is satified that these costs were properly allocated on the basis of "machine time," which is the appropriate basis for the allocation of processing costs. "Machine Time" includes machine, labor and other expenses which are directly identifiable with the product by the time required for production. The amounts were reconciled to Giacomini°s annual financial statements to ensure the inclusion of all expenses in the allocation process. Comment 13. Petitioner notes that. in . respondent's home market submission. "indirect selling expenses are claimed as an adjustment with respect to all home market sales in which a commission was not paid Petitioner states since no commissions have been claimed as a deduction from the United States price, no allowance for indirect selling expenses can be made to foreign market value. DOC Position. For purposes of the final determination. the Department has not allowed respondent's claim for indirect selling expenses in _the home . market. Because respondent has claimed no commissions in the U.S. market, indirect selling expenses cailnot be allowed as an adjustment to the foreign market value. Comment 14. Petitioner states that the Department's verification of home market data, which took place before respondent's submission. covered cost figures supporting alleged differences in merchandise only for the ,\56 2 'h mch angle ho11e gate valve sold in the Canadian market; the model All 1 'h inch hose gate valve sold in the home market. and the A56 1 'h inch hose gate valve sold in the United States. Petitioner notes that this cost verification was conducted prior to the supplemental subinission by Giacomini detailing the production cost of all home market nozzles, couplings, and valves. Petitioner states that the Department should have undertaken a verification of the new submission. DOC Position. Anticipating the possiblity of changes in market" comparisons from those used in the preliminary determination. the Department selected and verified differences in merchandise cost data submitted by Giacomini in its original submission. As no discrepancies were found, we do not feel compelled to . verify additional.difference in merchandise claims. Comment 15. Petitioner argued that because of delays, lack of narrative explanations. inadequate responses. and factual errors. the questionnaire . response and respondent's supplemental data should be rejected in favor of using the best information otherwise available. DOC Position. The Department received and verified all information it believes necessary in order to reach a final determination. The Department was able to verify responses and - adjustments. We were satii;fied at verification that the underlying bases for adjustments and cost of production methodology were adequately explained. Respondent's Comments ·comment 1. Respondent requests that the Department make a determination as to whether Badger-Powhatan, petitioner. is truly representative of the industry(ies) on behalf of which it brought this petition. Noting the ITC's . decisiQn which found "seven like products.and seven domestic industries" and the ITC's further statement that "for several products, the petitioner's share of the market was not large enough to -render it representative of that particular industry," repondent requests that the Department determine whether petitioner is representative of any of the "domestic industries involved in this investigation.'' In addition. respondent requests tftat, should the Department find that Badger-Powhatan is not - representative of any of th~ seven domestic industries. the scope of this investigation be modified to include only those industries of which Badger- Powhatan is representative. DOC Position. After fully cons1dering respondent's arguments regarding whether Badger-Powhatan has properly filed the petition in this case on behaH -of the domestic industry, the Department has determined that petitioner does have legal standing. First, Badger-Powhatan does have the support of the industry as evidenced by letters written by Elkhart Brass Manufacturing Co. and John W. Moon, -Inc. in support of the petition. In its preliminary detennination, the ITC stated that the only three manufacturers producing a full line or nearly full line of brai;s components for fire protection systems are the petitioner, Elkhart and Moon. In discussing the question of whether Badger-Powhatan filed on behalf of the domestic industry, respondent cities action taken in the Hot-Rolled Carbon Steel Sheet from Belgium dnd the Federal Republic of Germany (Gilmore Steel). In seeking to detennine whether the Gilmore Steel Corporation was representative of the industry, th2 Department sent letters to other producers asking if they supported Gilmore's petition. It determined that the vast majority of domestic producers of the merchandise under that investigation were opposed to the petition. Consequently. the Department dismissed Gilmore·s petition: This, however. is not the case with Badger· Powhatan. Rather, petitioner has the support of two other major companies in this industry, and no U.S. producer has expressed oppossition to the petition. We also note that the ITC 0 s statement, that for several products the petitioner·s share of the market was not large enough to render it representative of that particular industry, is actually, when taken in the full context of the Commission's statement, not a reference to the standing of the petitioner. Rather, it refers to whether the petitioner's profit-and-loss data could be extrapolated to the entire domestic industry. Comment 2. Respondent argues that the Department should allow . respondent's claim for adjustment based on quantity discounts. Respondent states that based on 19 CFR 353.14(b)(2) allowances can be made 'if "the exporter can demonstrate that the discounts are warranted on the basis of savings which are specifically attributable to the. · production of the different quantities involved.'' Respondent feels it has provided the Department with documentation which conclusively demonstrates the cost savings realized by the large quantity purchases of respondent's U.S. customer. Respondent states that respondent's savings in 'production time occur when the customer informs repondent of its needs early in the year. Respondent also points out that this customer purchases a large percentage of Giacomini's exports to the United States. Respondent continues by stating that . savings in production .time alone justify the discounts given this customer. Respond_ent also states that these savings are even higher since by receiving large orders early in the year respondent realizes significant savings when purchasing raw materials in large quantities. Respondent states that the producjon of brass fire protection equipment involves a certain amount of outside manufacturing. which. considering the high volume of orders from this customer. allows respondent to have this outside manufacturing done at a lower cost. DOC Position. See response to Petitioner's Comment 5. A-70 \ 47072 Federal Register / .Vol. 49, No. 232 / Friday, November 30, 1984 I Notices Comment 3. Respondent claims that the Department should not include the 5 percent "maggiore .deposito .. in the Italian net unit price. Respondent states that this surcharge is made on goods · transported ·and stored after sale in .a warehouse IOcated in Milan. This surcharge is attaclied to sales when respondent and its customers agree that the customer will either pick up or have the merchandise sent from the warehouse. Respondent states that the legislative history ofthe Act.supportS the proposition that after-sale expenses .. sucli as taxes and special charges · should not be used in mal<ing net price · calculations. Respondent states that the addition of this charge in the gross Unit price would unfairly penalize respondent for transportation and warehousing expenses incurred after the sale.· ·. DOC Position.•We disagree. The Department bas determined that the ''maggiore deposito," a specific percent, should be included in the Italian net unit price. Based upon information gathered during the course of verification. the Department" considers this ..surcharge" to be·a before sale expense which · should properly be included in the net unit price. Such an expense is of a seneraI or.fixed nature and would have been incurred whether or not a sale was made: as such. it would not ordinaril1 be t:Oll&idefed an adjustment under the circumstances of sales provisions of 19 CFR 353.15. Generally, the smCharge covers Giacomini'i extra costs of stockinj pods in Milan. which is, for clientil, a more convenient location. This warehousing takes plaee before the sale. and the goods are removed from warehouse after the sale. · Comment 4: Respondent states that Invoice 832, a sale made to Giacomini·s U.S. customer, is actually an attempted sale which does not satisfy the criteria of being .a sale within the "ordinary course of trade" and, as such, should not be used for purposes of this investigation.·To support this premise. respondent submits the following · information: Invoice 832. dated · November 23, 1983, was an attempted sale to a U.S. custmper which was scheduled to .arrive in New York from Italy in early December, 1983. However. the ship and the goods aboard were seized by the-United-States government pursuant to a bankruptcy order against the line.to which the vessel belonged. Giacomini's customer was eventually informed that delivery of the seized goods would be substantially delayed and that there even existed.the possibility that the products might never ~released. Considering this. the U.S. customer reor4erea the products from· comparison to the A53 w~ilic hose Giacomini. The U.S. customer reordered gate valve sold in the United States. than on Invoices 909, 917, and 33 those the R55 wedge-disc hose gate valve. products originally requested on Invoice · DOC Position. The Department does 832. Eventually. the U.S. customer was . not consider the 50 percent criterion notified that the goods aboard the •eized mentioned in certain electric motors ship had been rel~sed and agreed with from Japan relevant in this case becau8e respondent to accept the goods. ' we .did not base ouuietermination that Respondent argues that the oiiginal the R55 and A53 valves are similar on · sales contract of Invoice 832 became the fact that the A20 truck coupling, void due to the impossibility of which contains an R55 valve, is used as . performance upon the terms fire izrotection equipmenL'Aa pointea contemplated .by the parties. out in our response to Petitioner's Respondent states that when the goods Comment 2. we consider the R55 valve from the s8ized aliip were released. by itself, to be of the AJDe ·class or kind Giacomini and his U.S. customer formed . · of merchandise as the A53 and similar . a new sales contract sometime following in component materials. Accordingly, the ship's releale in February, 1984. - we have chosen to compare individual In essence respondent considers that · . sales prices in the Italian llW'ket of the Invoice 832 represents a ''non-sale" ·.RSS to the .\53 valve•IOld in_the. United - during the period of investigation and States. . that the new contract for these goods . Commem B. RespondeQt.-states that . · was made outside the period of the A20 file erigine sroup produced ID . investiSation. Respondent further statei the home market cannot bemnsidered that the se~ of the vessel rendered "such .or similar" merchandise to the the performance of the sales contract . .·siamese comiector IOld by respondent in impossible and thereby terminated the· · the United States. Respondent states· sales contract on Invoice 832. · that the two~ are not made.from DOC Position. We agree. Based upon the same puU. Respondent further the information submittecfby repondent.. sta~ the two pr:odUcta are aot used tor • the Dep8rtment has decided that. · ~·like purpotl88'.' within the llle8DiQ8 of ··. because of the special circumatances · . the Act and that they are not of -the ~uncling it. U.S. Invoice 832 will not . - "same seneral class or kind."!. · ·. .be used for ·the pui'pos~ of makins this Respondent. also states that it ia not final determination. The contract which feasible or convenient.to compare the ultimately-covered the goods invoiced A20 fire engine sroupwith the siame8e ·under Invoice 832 was neso~ after clapper as there already exist third: the period of investigatiOD. · country sales of identical or nearly . Comment 5. ·Respondent states that identical siameae coniaectora. ·the R55 wedge-disc hose gate nlve does· DOC Position. We agree. See · . not fall.within the-.scope of the . , response_ to Petitioner's Commeat3. investigation since it is neither listed aa . · · Comment 7. Respondent arg1ieiB that a fire protectiOn product nor 90D&idered nozzles. couplings, ana migle hose sate as such. by Giacomini and its Ilalian valves sold in the Italian market are not .market customers. Respondent states "such or similar" merchalidise to thoae that the use and design of the R55, nozzles, couplings, and anile hose gate unlike othei Italian products being used · valves sold in the United States. Citins· · for comparison purposes, p for plumbing section "1(16){A), respondent state& · and heating operations. Respondent that none of the products mentioned further states that the R55, when sold above are identical in physical individually in Italy, is used in plumbing characteristics. Citing section 771(16)(B), and heating iastallationa, and that the .respondent claims the merchandise.sold;- R55 is-used in the AZO fire engine groμp in Italy is not siD1ilar to that sold in the · which is a product not under · United States, because the meri:handlae investigation. Respondent points _out is not made from the same component . that the R55 constitutes less than 50 materials. "is not used for like purposes percent of the.total cost of manufacture and is not approximately equal ID of the A20 fire engine group. In Cer1ain commercial value. Citing·section Electric Mo.tors from japan 49 FR.32627 771(16)(C); respondent claims the (August 15, 1984), respondent notes that merchandise sold in Italy when the Department held that it will consider compared to that sold in the United · · a component inc0rporated into a larger States is not.o( the. same class or kind as system for comparison purposes only if the merchandise sold in Italy which is that component constibrtes 50 percent or the subject of the investigation. is not - more of the total cost of manufa~ure of .used for like purposes and cannot be the system. Respondent states that the reasonaby compared to the merchandise ASS or A56 hose gate valve sold in • in question. To prove dissimilarity of Canada would be .a more appropriate products. respondent states that all A-71 Federal Register / Vol. 49, No. 232 / Friday, November 30, 1984 / Notices 47073 requirements of section 771(16) (BJ or (C) must·be met. With reference to (B), respondent states that Italian and U.S. couplings 11/s inch are_ not like in component materials and are unlike in the purposes for which used. Respondent states that the U.S. and Italian products are produced to . different testing pressures, which precludes them from performing the same functions. Respondent states that the products are dissimilar in · mechanicai operation: that is, the U.S. product is characterized by fe1:1ale threading. while the Italian product is charac!erized by male threading. Respondent further states that, becaU.Se of the greater iiophistication of ,the U.S. eoupling. the commercial values of the two couplings are different. With regard to the U.S.· and Italian couplings 21h inch, respondent states that the structliral superiority of the U.S. coupling is indicative of the dissimilarity in component materials. In addition. respondent stata that the methods of operation are different siila! the U.S.· coupling is machine tooled with interior threading and an eXpallsion ring which allows a mechanically advanced linkage of the coupling and the fire hose. On the other hand. respondent states that the Italian coupling is introduced into the fire hOlle and connected by wrapping zinc plated iron strings around the hose and. then. tightened. FiDally, with regard to couplings. respondent states that the commercial values of the coaplings are greatly dissimilar. -Respondent states that under section 771(16)(B) the Italian and U.S. 11/s inch angle hose gate valves are not similar. Respondent states that the component materials from which the valves are constructed are not identical since the U.S: valve has a hand wheel made of aluminum and a wheel nut made of brass, while the Italian valve has a hand wheel and a wheel nut made of steel Respondent states the U.S. valve is over twice as large as the Italian valve and that the two valves are composed of different components, the U.S. valve having a security dowel, a disc. a disc holder and a disc nut not found on the Italian valve. Respondent further states that with regard to the purposes for which the two products are used. the U.S. valve is constructed to withstand more pressure than the Italian product. Respondent further states that the commercial value of the two valves is dissimilar. Respondent states that U.S. and Italian 2 ~ inch hose gate valves are dissimilar since the Italian valve weighs 100 percent less than the U.S. valve and the valves are made of different component materials. The U.S. valve has a steel hand wheel and wheel nut, while Suspension of_Liquidation the Italian valve has an aluminum hand wheel and a wheel nut made from brass. In accordance with section 733ldJ of In addition. respondent argues that the · the Act, we are directing the United two valves differ in purposes for which - . States Customs Service to suspend used since they are designed to liquidation of all entries of the withstand different working pressures. merchandise subject to investigation as Respondent also states that since the described in the "Scope of Italian product i~ smaller and less Investigation" section of this notice. modern and. therefore. sells at a lesser This suspension of liquidation applies to price than the U.S. model. the products all the subject marchandise entered. or are notequal in commercial value. withdrawn from warehouse, for · Respondent a:-gues that the previously consumption, on or after the date of mentioned products are dissimilar under publication of this notice in the Federal section 771(16}(C) as well. With regard Register. The Customs Service shail to the 11h inch Italian and U.S. continue to require a cash deposit or the couplings, ~ondent states there are· posting of a bond equal to the estimated significant differences in the physical weighted-average margin amount by characteristics of these coupling such as which the foreign market value of the weight, length. threading, method of merchandise subject to this production. and method of installation. inv.estigation eiceeds the United States With regard to the expectations of the price. The suspension of liquidation will ultimate purchasers, respondent states remain in effect until further notice. The that the U.S. purchasers expect· estimated weighted-average margin is couplings which will not just connect 3•47 percent. hoses, but which will withstand a certain amount of pressure. Respondent states the major difference in the ITC Notification purpose of the couplings relates to the In accordance with section 733( d) of amount of water pressure each is the Act, we will notify the ITC of cur manufactured to withstand Respondent determlliation. In addition. we are States that, even though couplings in maldng available to lhe lI'C all DOD· both markets serve to connect fire privileged and non-confidential hoses, the U.S. product is designed to information relating to this function under much greater stress than investigation. We will allow the ITC the Italian coupling. With regard to the access to·all privileged and confidential 11/s and %1h inch hose gate valves, information in our files, provided the respondent states that certain parts of ITC confirms that it will not disclose the U.S. and Italian valve• are auch Information. either publicly or composed of different materials. that the under an administrative protective U.S. valve is twice as large as tht! Italian order, without the written consent of the valve, and that the angles and the Deputy Assistant Secretary for Import threading of the two valves differ. Administration. The ITC will make its Respondent also states that the two determination whether these imports are valves are manufactured by different methods. Respondent argues that the materially injuring, or threatening to two valves could not meet the sa.'lle materially injure, a U.S. industry within expectations for ultimate purchasers 45 days of the publication this notice. If since the u.S.valve is forged and the ' the ITC determines that material injury Italian valve is forged and cast. or the threat of material injury does not Respondent further states that the U.S. exist. this proceeding will be terminated and Italian couplings do not perform the and all securities posted as a result of same functions since the U.S. valve, by the suspension of liquidation will be its construction and specifications, refunded. or cancelled. If. however. the provides substantially greater resistance ITC determines that such injury does to p:essure. exist, we will issue an antidumpir.g DOC Posltion. We believe these are order, directing Customs officers to minor differences, insufficient to declare assess an antidumping duty on fire the merchandise dissimilar. See pt0tection products from Italy entered, response to Petitioner's Comment 11 for or withdrawn from warehouse, for further details. consumption on or after the date of the Verification. In accordance with suspension of liquidation. equal to the section 776(a) of the Act, we verified the amount by which the foreign market information provided by Giacomini by value of the merchandise exceeds the using standard verification procedures U.S. prices. This determination is being including examination of relevant sales · published pursuant to section 735(d) of and financial records of the company. th1t Act (19 U.S.C. 1673d(d)). A-72 41074 Federal Register I Vol. 49, No. 232 I Friday. November 30, 1984 I Notices Dated: November 23, 1984. William T. An:bey, Acting Anistant Secretary for Trode Administration. ffll Doc. M4137C l'lled 11_...1:45 _I ~COOi...... '\· A-73 APPENDIX E NOTICE OF POSTPONEMENT OF THE COMMISSION'S HEARING 48394 A-74 Federal Register / Vol. 49, No. 240 / Wednesday, December 12. 1984 / Notices llnvestiptlon No. 731-TA~165 (Final)] Certain Valves, Nozzles, and Connectors of Brass From Italy For Use In Are Protection Systems AGENCY: International Trade Commission. ACTION: Postponement of hearing. - SUMMARY: On December 5, 1984, the Commission received notice from the International Trade Administration. U.S. Department of Commerce (Commerce), that the margin of sales at less than fair value in the subject investigation is de minimis, thereby conflicting with Commerce's notice of final · determination published in the Federal Register on November 30, 1984 (49 FR· 47066). which had indicated a positin margin of sales at less than fair value of 3.47 percent. Pending the publication of a revised notice of fmal determination by Commerce, the Commission's public hearing on th:s investigation, scheduled for Friday, December 7, 1984. is hereby postponed indefmitely. This postponement is pursuant to § 201.14(b) of the Commission's Rules of Practice and Procedure. EFFECTIVE DATE: December 5, 1984. A-75 Federal Register I Vol. 49. No. 240 I Wednesday. December 12. 1984 I Notices FOR FURTMEll INFOR-TION CONTACT: George L. Deyman (202-5~81). Office of Investigations, U.S. International Trade Commission. 701 E Street NW .• Washington. DC 20436. Autbority: Thia notice it published pursuant to • 201.14 or the Commission·s rules (19 CFR 201.14). Issued: December 7, 1984. By order of the Commission. Keaneth R. Muon, Secretary'. ll'1l Doc. M-mll F"ilod U-1-: &45 _, . 911..1.*GCODlftl»4IMI 48395 A-77 APPENDIX F LETTER FROM COMMERCE TO THE COMMISSION AMENDING COMMERCE'S FINAL DETERMINATION A-78 Honorable Paula Stern Chairwoman o.s. International Trade Commi~sion Washington, D.C. 20436 Dear Paula: UNITED STATES DEPARTMENT OF COMMERCE International Trade Administration Washington. O.C. 20230 JAN 2 1983 R..~ctt1 t1e-J -Tcin. '1, 1"185 O{'(a' () ( -IAe 5.eae.J.'"''/ A~ a result of correction of clerical errors, the Department of Commerce has amended its final deterination in the investigation of •certain valves, Couplings, Nozzles and Connection~, of Brass, Suit~ble for Use in Interior Fire Protection Systems, from Italy•. The correction of these errors reduces our overail weighted-average margin from 3.47 percent to 1.28 percent. The bases for this amendment are summarized in the enclosed copy of the amendment. For purposes of section 735(b)(2), you may consider this amendment to be the affirmative final determination of the administering authority. Sin.'/Jely, /14"'-ria:n F. Holmer Deputy Assistant Secretary for Import Administration '>'l<,.tt°. .. A-79 ·•' : ' • .,. ·~ '. - ' ~ . .¢ • APPENDIX G NOTICE OF COMMERCE'S AMENDMENT TO ITS FINAL DETERMINATION A-80 Fedeml Resister I Vol. !O. No. -e I Wednesday. January I. UIS I Notice• lnlwndol.r Tr8de Admllllatrallon - IA417~J c.rta1n v..._ CoupDnga, Nozzles mcS COlaieetlol-. Of 9rw, SUltable for u. In Interior Are Protectioft , ~from Italy: Amendment to .. Ami Det9rmlnatlon of ....... .,_,..... hlr Value .-.cw. Import Admlnl1tration. lnternationai Trade Admlni1tration. Coinmerce. acnoec Notice of Amendment to the F"anal Determination of Sale• at Lea• Than Fair Value. •-'in: At a rt1ult of conection of derical •non. the Department of • Commerce la emendinB the final determination in thi1 inve1U,ation. and II directing the U.S. Cu1tom1 Service to adju1t the eatimated duty or bonding requirement tor Rubinetterie A. Giacomini S.p.A. (Giacomini) and all other manufacturers/producera/ exportera of.certain valves. coupliDB•· noz:zlet and connection•. of bran. 1uit1bJe.for u1e in interior fire protection 1y11em1. from Italy (fire protect;on products) from 3.47 percent to 1.28 percent. IJ'lllCT1Yl DAn: January 9. lU85. POlll P\IRTHER IN"ORll.A 'T10N CONTACT: Charles E. Wilaon. Office of lnve1tigation1. Import Admini1tration. International Trade Admini1tration. Department of Commerce. 14th Street and ConaUtution Avnue. NW~ Wa1hinston.-D.C. a. Talepbcme: (202) S77-IS88. ...........,.Alll't ~no.c: On November IO. 111M. we publiehed a llnaJ determination or ..1e. at .... than fair value of ftre protection producta from Italy (49 FR 41Dee). Wt found that tbe overall weiShted-averqe on all aale1 compared wa1 3.17 peroenL Due to · Inadvertent deletion• of command• In our margin calculation computer prDll'alD. computatio111 Jialded enoneroua mafllna an certain 1a)e1. 'The detection ofdUa-enorcaued u'lo · review other calculationa In tbe caae. and we diacovered ud corncted other derical em>n in the calculatlona. Al a neult of tbe correction of tbne enora. tbe ovenJJ Wlilbted •venae mlJlln II · t.za pen:enL ftCNoll&alklll In accordance with ..ctlon ns(d) of the Act. we will DOUfy the International Trade Commiaaion ol tllie dumdmut. Alu r. Haims, ·Acti1t1 AMi•tant S«:ntary for nD Adrniniall'Otion. . JamaarJ I. 111S. ' int Doc..15-4H Plied ~Ml ..) • ~CDDI ...... A-81 APPENDIX H NOTICE OF THE COMMISSION'S RESCHEDULING OF ITS PUBLIC HEARING A-82 2354 Federal Re~ster l Vol. 50, No. 11 / Wednesday, January 16, 1985 I Notices International Trade Commission. 701 E Street NW., Washington, DC 20436. SUPPLEMENTARY INFORMATION: Background On July 10, 1984, the Coriimission instituted the subject investigation. On November 30, 1984, the Department of Commerce determined'that certain valves, couplings, nozzles and connections, of brass, suitable for use in interior fire protection systems, from Italy, are .being sold, or are likely to be . sold, in the United States at less than -· fair value within the meaning of section 731 of the Tariff Act of 1930 (19 U.S.C. 1673d(a)) (49 FR 47066). However, on December 5, 1984, the Commission was advised by the Department of Commerce that it was recalculating ~e · ma."8in& in the subject investigation. Accordingly, the Commission postponed indefinitely its public hearing on the investigation ·scheduled for December 7, 1984 (49 FR 48394). On January 4, 1985, the Department of Commerce notified the Commission that as a result of the correction .of clerical errors, it was amending its final determination in the .subject investigation and reducing the overall weighted-average margin; Commerce indicated that-it considered [Investigation No. 731-TA-115 (FIMl)J this amendment to be its affirmative ' - final determination in the investigation Certain Valves, Nozzles, and for purposes of section 735(b)(2) of the ConMctors of Brau From Italy tor act. As provided in section 735(b)(2)(B) Use In Fire Protection Systems · of the act, the Commission must make its final determination in antidumping AGENCY: International Trade· - investigations within 45 days of Commission. . Commerce's final determination, or in ACTION: Rescheduling of the hearing to this case by February 19, 1985. be held mconnection with the subject Uivestigation. . Staff l8pOl'l _SUllllARY:_ __;;;__.-The--Co-mnu-.s-s-ion_b_e_re_by___ A public version of the preheating announces that the hearing in the staff report in this investigation was subi'ect investigation, previously placed in the public record on November 20, 1984, pursuant to § 207.21 of the postponed from Friday, December 7, Commission's rules (19 CFR 207.21). 1984, is rescheduled to 10:00 a.m. on Wednesday, January 23, 1985. The Hearing Commission· will make its final injury determination by FebniarY 19, 1985 (see The Commission will hold a hearing in sections 735(a) and 735(b) of the Tariff connection with this investigation Act of 1930 (19 U.S.C. 1673d(a) and beginning at 10:00 a.m. on Wednesday, 1673(b))) - January 23, 1985, at the U.S. · ·International Trade Commission For further information coiicerning the hingt conduct of the investigation, hearing Building, 701 E Street NW., Was · on, _procedures, and rules of general D~estimony at the public hearing is · application, consult the Commission's governed by § 207.23 of the Rules of Practice and Procedure, Part Commission's rules (19 CFR 207.23). This 2Ul, Subparts A and C (19 CFR Part 207), rule requires that testimony be limited to and Part 201, Subparts A through E (19 a nonconfidential summary and analysis CFR Part 201). of material contained in preheating EFFECTIVE DATE:_ January 4, 1985. briefs and to information not available FOR FURTHER INFORMATION CONTACT: at the time the prehearing brief was George L. Deyman (202-523-0481), submitted on November 30, 1984. Any Office of Investigations, U.S. written materials submitted at the hearing must be fileQ in accordance with the procedures described below and any confidential materials must be - submitted at least three (3) working days prior to the hearing (see § 201.6(b)(2) of the Commission's rules (19 CFR 201.6(b)(2), as amended by 49 . FR 32569, A~. 15, t984)). · Written lubmissimis Posthearing briefs must conform with the provisions of § zrYI.24 (19 CFR 207.24) and JDWJt be aubmitted not later than the close of business on January 29, 1985. In addition, any person who 'has not entered an appearance as a party to the investigation may submit a written . statement of information pertinent to the subject of the investigation on or before January 29, 1985.- A signed original and fourteen (14) copies of each submiaaion must be filed with-the Secmtary to the Commissian in. accordance with § 201.8 of the . "Commission's rules (19 CFR 201.8). All written submissions except for confidential business data will be available for public inspection during regular business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary to the Commission. , Any businesa information for which confidential treatment is desired muat be submitted separately. The envelope and all pases nf such submissions must be clearly labeled. "Confidential ' Business Information." Confidential submissions and requests for confidential treatment must conform with. the requhements of § 2.01.8 of the CommiSBion's rules (19 CFR 201.6, as ~ended by 49 FR 32589, Aug. 15, 1984). Auihodty: '.l1Jia inveatiption u being ~under authority of the Tariff Act or - 1930, title VIL Thia notice u published punuant to I ?J:tl21.J of the ('.omm!nion'1 rules (19 CFR ?J:t/21.J). By _Order of the Comminion. lined: JanWU)' 9, 1985. ICmaelbR.MMaa, Secretary. (FR Doc. ~1213 Filed 1-15-85: 8:45 am) ..._CODE,.... A-83 APPENDIX I CALENDAR OF WITNESSES AT THE CoMMISSION;S HEARING A-84 . CALENDAR OF PUBLlC HEARING Those listed below appeared as witnesses at the Unitecl States International Trade Conmission's hearing: Subject Inv. No. : Certain Valves, Nozzles, and Connectors of Brass from Italy for Use in Fire Protection Systems 731-TA-165 (Final) Date ~nd time: January 23, 1985 - 10:00 a.m. Sessions were held in the Hearing Room of the United States International Trade Conmission, 701 E Street, N.W., in Washington. In support of the imposition of antidumping duties: Stewart and Stewart-~counsel Washington, D.C. on behalf of Badger-Pow~~tan, a Division of Figgie International Gerald ~! Lavelle, President and General Manager A~; O. Pittinger, Product Manager, Municipal Hose/Brass Products Brent Wilson, Controller Eugene L. Stewart--OF COUNSEL - more - A-85 In opposition to the imposition of antidumping duties: Law Office of Larry E. Klayman--Counsel Washington, D.C. on behalf of Rubinetterie· A. Giacomini, S.~.A. Alan Reilly, National Sales Manager, Potter-Roemer (Distributor of Badger-Powhatan, petitioner and importer/distributor of Rubinetterie A. Giacomini. S.p.A, importer) · Phillip Favro, Mclaughlin &Associates (Ex-Fire Marshal of the State of California) Hubert Fayet, Export Manager Larry E. Klayman) __ OF COUNSEL John M. Gurley ) A-87 ..~ .. '. .. .. i. . :, • APPENDIX :I LETTER SUBMITTED TO THE COMMIS~ION BY ELKHART BRASS CO. A-88 ELICHART BRASS MFG. CO •• INC. ELICHART. INOIANA Mr. Kenneth R. Mason, Secretai:y P.O. Box J/27 Zip Code46515 c.n 1302 West Beardsley Avenue C:.C Phone: (219) 295-8JJO TelexNo. 2J-Jl27 Novenber 28, 1984 u. s. Internatialal Trade Ccmnission 701 E. Street, N.W. Washin;Jton, D.C. 20436 RE: Investigatial #731-TA-165 (Preliminazy) • Certain val~, no~leS- · & connectors fran Italy for use in fire protection systems. (_;.) Dear. Mr• MaB<?11r As a U.S. manufacturer of the subject products who has seen steadily declinin; sales due pr:imarily to llrq;x>rts fran Italy, we wish to ackrrMledge our sui;:port of this investigation. Yours truly, ELKHARI' BRASS MF.'(;. CO. , !IC. ·-·v-.:/·-<--'-r ~·/ , \ . ·:/'James R. J(iefer . Vice FteSident- Marketing/Sales JRK/psp A-89 APPENDIX K LETTER SUBMITTED TO THE COMMISSION BY J.W. MOON, INC. A-90 J. W. MOON INC. W. D. ALLEN MANUFACTURING DIVISION ESTABLISHED 1889 4717 STENTON AVE., PHILADELPHIA, PENNA. 19144 AREA CODE 215 TELEPHONE 842-1100 U.S. Int'l Trade Commission Washington, D.C. 20438 Attn: Mr. George L. Deyman Dear Mr. Deyman: February 17, 1984 ALLENCO After reviewing the statements made during the February 14th conference regarding Fire Protection Items imported from Italy, I feel I should add what knowledge we have of the prob- lem. Mr. Giacomini estimates that exports of products in ques- tion comprise less than thirty percent of the total U.S. market. It is my opinion that the Italian exports comprise over seventy percent of the U.S. market and is increasing constantly. Mr. Giamcomini stated the raw material they use costs less than the raw material Badger-Powhatan uses. I spoke with one of our metal suppliers today. They told me that the brass used in the forging process would cost the same or more than the brass Badger-Powhatan uses and it is my understanding that the forging process cost much more than the sand casting process. We have found it impossible to compete with the imported Italian products. In most cases their distributor will quote thirty percent below what we are able to sell our products. I can not believe the Italian products can be made, packed and delivered to this country at the prices they are selling their porducts to their four U.S. distributors. We as one of the companies mentioned by Mr. Giacomini as "not being injured by our exports", we in fact, have been severely injured and we hope the U.S. International Trade Com- mission will rule in favor of Badger-Powhatan. LPM:hem Very truly yours,~ .\ .. / '///'/ • / .. ·' /..:./>';,,./'[, -""'//'// _,///' Lewi.$ P. Moon', Jr,.• President