2009 Calculation of Expected Non-Market Economy Wages

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Finalization and Effective Date of 2009 Expected Non-Market Economy Wage Calculation.

SUMMARY:

On October 7, 2009, the Department of Commerce (“Department”) published the preliminary calculation of the 2009 expected non-market economy (“NME”) wages, and provided the public with an opportunity to comment on potential clerical errors. See Expected Non-Market Economy Wages: Request for Comments on 2009 Calculation, 74 FR 51555 (October 7, 2009) (“2009 preliminary calculation”). The 2009 calculation was based on 2007 data and the methodology described in the Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, October 19, 2006 (“Antidumping Methodologies Notice”). Subsequently, the Department received comments from King & Spalding LLP on behalf of U.S. domestic industry (“domestic industry”) regarding the Department's 2009 preliminary calculation, as further discussed below. The Department received no other comments. This notice constitutes the Department's announcement of the finalization and effective date of the 2009 calculation.

DATES:

These expected NME wage rates are finalized on the date of publication of this notice in the Federal Register and will be in effect for all antidumping proceedings for which the Department's final decision is due after the publication of this notice.

FOR FURTHER INFORMATION CONTACT:

Bobby Wong, International Trade Analyst, Operations Office IX, or Christopher Mutz, Import Policy Analyst, Office of Policy, Import Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0409 and (202) 482-0235, respectively.

SUPPLEMENTARY INFORMATION:

Domestic industry claims that the Department committed several clerical errors in its calculation of the surrogate wage rate, which should be correct for the final calculation.

Domestic industry claims that the Department erred by applying International Labour Statistics (“ILO”) “wages” data rather than “earnings” data of five countries. Domestic industry cites the Antidumping Methodologies Notice, which specifies that the Department will only use reported earnings data, and should therefore exclude from the dataset countries for which there is no available earnings data, including Honduras, Indonesia, Peru, and the Philippines. However, domestic industry claims that, while the Department erred by applying wages data for Hong Kong, the ILO also reported suitable Hong Kong earnings data, and should therefore revise the dataset to include the Hong Kong earnings data rather than wages data.

Also, domestic industry claims that the Department erred by selecting 2006 ILO data for Germany over base year 2007 data. Domestic industry asserts that the Antidumping Methodologies Notice specifies that the Department shall choose base year data over prior year data.

Moreover, domestic industry also states that, for countries in which the Department relied on prior year 2006 data, the Department erred by applying the 2006 exchange rate to the earnings data prior to inflating using the International Financial Statistics (“IFS”) published consumer price index (“CPI”). Domestic industry claims that the Antidumping Methodologies Notice specifies that the Department shall first inflate using CPI and subsequently apply the base year exchange rate to convert the foreign currency into U.S. dollars using the reported 2007 IFS exchange rate. Moreover, in applying the exchange rate, domestic industry asserts that the Department should consistently apply the reported six-digit exchange rate. Furthermore, domestic industry notes that, because the IMF did not provide a 2007 Egyptian period average exchange rate for Egypt, the Department should exclude the country from the dataset.

Lastly, domestic industry notes that, subsequent to the data available to the Department for the 2009 preliminary calculation, the World Bank (World Development Indicators) published a corrected gross national income (“GNI”) for the People's Republic of China (“PRC”), and argues that the Department should apply the corrected value in calculating the expected 2009 wage rate for the PRC.

Department's Position

With respect to the Department's criteria to use only earnings data, the Department agrees with domestic industry that the calculation inappropriately included wages data in the regression dataset. The Antidumping Methodologies Notice specifies that the Department will only use data that is reported as “earnings” by the ILO. See Antidumping Methodologies Notice, at 61721-22. Therefore, for the final 2009 wage rate recalculation, the Department has excluded Honduras, Indonesia, Peru, and the Philippines from the regression dataset, and applied the appropriate earnings data for Hong Kong.

With respect to the 2006 ILO data for Germany, the Department agrees with domestic industry that it erred in selecting 2006 ILO data over base year data. The Antidumping Methodologies Notice states that, if more than one record exists which meets the prescribed data requirements, the Department will choose the data point from the base year over data from previous years. See Antidumping Methodologies Notice, at 61722. Therefore, for the final 2009 wage rate recalculation, the Department has revised the dataset to include the 2007 ILO wages data for Germany.

The Department also agrees with domestic industry that the Department erred by converting foreign denominated 2006 earnings data using the 2006 IFS exchange rate prior to applying the CPI inflator. The Antidumping Methodologies Notice states that data meeting the Department's selection requirements shall be adjusted using the CPI inflator prior to conversion to U.S. dollars using the base year exchange rate. See Antidumping Methodologies Notice, at 61723. Therefore, for the final 2009 wage rate recalculation, the Department has applied the sequence as described in the Antidumping Methodologies Notice. The Department also applied the full six-digit exchange rate for the base year as reported by the IFS. Furthermore, the Department has excluded Egypt from the regression dataset since the period average exchange rate for Egypt in 2007 was not available from IFS.

With respect to the corrected 2007 PRC GNI data published by the World Development Indicators, which was updated subsequent to the publication of the 2009 preliminary calculation, the Department finds that while the error is not a ministerial error committed by the Department in the recalculation, the revision is due to an error by the World Bank. See Data & Statistics: Errata at http://go.worldbank.org/UA5M23MPU0. Therefore, for the final 2009 expected wage rate recalculation, the Department has revised the per-capital GNI for the PRC to reflect the corrected GNI.

Results

Following the data compilation and regression methodology described in the Antidumping Methodologies Notice, and using Gross National Income and wage data for 2007, the regression results are: Wage = 0.328698 + 0.00043957 * GNI. The final expected NME wage rates, as calculated with the above mentioned changes, are shown in Attachment 1.

The World Bank did not publish a GNI for Turkmenistan.

The final results and underlying data for the 2009 calculation have been posted on the Import Administration Web site at ( http://ia.ita.doc.gov ).