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OTTAWA, July 31, 2002
4264-60/AD1278
STATEMENT OF REASONS
Concerning the making of a final determination of dumping with respect to
AUTOMOTIVE LAMINATED WINDSHIELDS FOR THE AUTOMOTIVE REPLACEMENT MARKET OF ALL SIZES AND SHAPES ORIGINATING IN OR EXPORTED FROM THE PEOPLE'S REPUBLIC OF CHINA
DECISION
Pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Commissioner of Customs and Revenue has today made a final determination of dumping regarding automotive laminated windshields for the automotive replacement market of all sizes and shapes, exported from or originating from the People's Republic of China.
This Statement of Reasons is also available in French.
Cet énoncé des motifs est également disponible en français.
Contents
Complainant and Canadian industry
Exporters
Importers
Definition
Product information
Manufacturing process
Excluded products
Use of subject goods
CANADIAN INDUSTRY AND CANADIAN MARKET
Fuyao Glass Industry Group Limited
Shenzhen Benxun Automotive Glass Co. Ltd.
Xinyi Automotive Glass (Shenzhen) Company
Dongguan Kongwan Automobile Glass Limited
Other exporters
Summary
SUMMARY
On December 18, 2001, the Commissioner of Customs and Revenue (Commissioner) initiated an investigation respecting the alleged injurious dumping into Canada of replacement windshields originating in or exported from the People's Republic of China (China). The investigation was initiated in response to a complaint filed by PPG Canada Inc. (PPG) of Toronto, Ontario.
On February 15, 2002, the Canadian International Trade Tribunal (Tribunal) made a preliminary finding that the evidence disclosed a reasonable indication that the alleged dumping of the subject goods had caused injury to the domestic industry. On March 11, 2002, pursuant to paragraph 39(1)(a) of the Special Import Measures Act (SIMA), the Commissioner extended to 135 days the time period for rendering a preliminary determination of dumping or for terminating the investigation in whole or in part, due to the complexity or novelty of the issues presented by the investigation. On May 2, 2002, the Commissioner made a preliminary determination of dumping.
The Canada Customs and Revenue Agency (CCRA) continued its investigation and, on the basis of the results, the Commissioner is satisfied that the subject goods have been dumped and that the margins of dumping were not insignificant. Consequently, on July 31, 2002, the Commissioner made a final determination of dumping pursuant to paragraph 41(1)(a) of SIMA.
The Tribunal's inquiry into the question of injury to the Canadian industry is continuing. Provisional duties will continue to be imposed on the subject goods originating in or exported from China until the Tribunal renders its decision.
INTERESTED PARTIES
Complainant and Canadian industry
The complainant, PPG Canada Inc., is located in Toronto, Ontario. Another Canadian producer of replacement windshields, Lamiver Inc., of Montreal, Quebec, supported the complaint when the investigation was initiated. These two manufacturers account for the entire Canadian production of the subject goods. On May 6, 2002, four days after the preliminary determination of dumping was made, the President of Lamiver sent a fax to the CCRA advising that Lamiver was withdrawing its support for the complaint although he did not give any reasons for doing so.
Exporters
The CCRA identified five exporters in China and eight exporters and one vendor of the subject goods in the United States in the period of investigation (December 1, 2000 - November 30, 2001).
Importers
The CCRA investigation identified 35 importers of the subject goods in the period of investigation.
BACKGROUND
On September 20, 2001, PPG filed a formal complaint with the CCRA, alleging that the dumped imports of automotive laminated windshields for the automotive replacement market of all sizes and shapes originating in or exported from the People's Republic of China were causing injury to domestic producers.
After the complainant had filed further information, the CCRA notified PPG on November 27, 2001, that its complaint was properly documented and notified the government of China that a complaint had been received regarding the alleged dumping of subject goods. On December 18, 2001, the Commissioner initiated a dumping investigation and notified the Tribunal of that decision. The Tribunal subsequently initiated a preliminary injury inquiry into whether the evidence disclosed a reasonable indication of injury, retardation or threat of injury caused by the dumping of the subject goods. On February 15, 2002, the Tribunal made a preliminary finding that the evidence disclosed a reasonable indication that the alleged dumping of the subject goods had caused injury.
On March 11, 2002, pursuant to paragraph 39(1)(a) of SIMA, the Commissioner extended to 135 days the period for rendering a preliminary decision. The extension was required in order to review in detail the information provided by the government of China and exporters of the subject goods to determine whether the automotive windshield industry is operating under market economy conditions. On May 2, 2002, the Commissioner made a preliminary determination of dumping of the subject goods and provisional duties have been imposed since that date.
PRODUCT INFORMATION
Definition
For the purpose of this investigation, the subject goods are defined as follows:
Automotive laminated windshields for the automotive replacement market of all sizes and shapes, whether they are clear or tinted, whether coated or not, whether or not they include antennae, ceramics, mirror buttons, vehicle identification number notches, and whether or not they are encapsulated, originating in or exported from the People's Republic of China.
Product information
There are two markets for automotive laminated windshields: the original equipment manufacturer (OEM) market and the replacement windshield market. These latter windshields are commonly referred to in the industry as "auto replacement glass windshields (ARG)." In French, these goods are referred to by the term "pare-brise d'automobile en verre feuilleté pour l'après fabrication ou le marché de remplacement."
Manufacturing process
The manufacturing process for replacement windshields begins by the cutting out of two flat pieces of glass, which will eventually become the inside and outside of the laminated windshield. The glass is then washed to remove all the debris that may have adhered to it and is prepared for curving using a mould that is heated in a furnace called a calcar. Each mould is designed to take on the specific curvature of a particular model of windshield. It takes only a few minutes for the glass, heated to 1,000 degrees Fahrenheit, to take the shape of the mould.
After a compliance inspection (curve of the glass according to the mould used), when the glass is removed from the calcar, a sheet of polyvinyl butyral is inserted between the two layers of glass. This sheet, which can be transparent or tinted, helps to prevent injury when large, irregular pieces of glass are broken. In most countries, this safety glass is required by law for the front openings of automobiles. This step requires a meticulously clean environment to prevent dust and particles from accumulating on the laminated windshield as well as control over the level of humidity because too much humidity may damage the final product. The polyvinyl butyral sheet has a tinted strip, which is the tinted part at the top of the windshield. After a final inspection to ensure the optical quality, the windshields are packed in cardboard for shipping.
Manufacturing replacement windshields requires a specialized assembly line, which involves a major investment of money. Whereas manufacturing windshields in the past required a lot of manual labour, the complainant's plant contains specialized, automated windshield assembly lines.
A complete list of specifications can be found in the National Auto Glass Specifications (NAGS). The NAGS is an independent body that publishes data on the replacement windshield market. The specification catalogue lists the windshield of each vehicle that is sold in North America using a standard numbering system, which is used by all players in the replacement windshield market.
Excluded products
The complaint does not include:
- Laminated windshields made especially for the original equipment market (OEM).
- Tempered glass used in the automobile industry for the side and rear windows and for sunroofs.
- Laminated windshields for railway vehicles, aircraft, vessels, armoured vehicles and spacecraft.
Use of subject goods
Replacement windshields are used to replace damaged windshields on already assembled vehicles. They are the product of reverse engineering, that is, a manufacturing method based on the remolding of the individual part. This development usually requires three months. The replacement windshield distribution network consists of the manufacturer, who ships the goods to distributors who, in turn, ship the goods to installers. Installers are the ones who ultimately do business with consumers requiring the replacement of a damaged windshield on their vehicle.
CLASSIFICATION OF IMPORTS
Replacement windshields are classified using the following tariff classification number of the Harmonized System:
7007.21.00.21 Safety glass, consisting of toughened (tempered) or laminated glass of size and shape suitable for incorporation in vehicles, aircraft, spacecraft or vessels windshields.
CANADIAN INDUSTRY AND CANADIAN MARKET
There have been no changes in the structure of the Canadian industry since the investigation was initiated. There are two known producers of replacement windshields in Canada. In order to estimate the Canadian market, the CCRA obtained data on production from each of the Canadian producers and also relied on Statistics Canada data.
The CCRA validated the information concerning imports provided by the complainant by means of its own internal information system, the Facility for Information Retrieval Management (FIRM), customs documents and submissions from importers and exporters. The CCRA accordingly confirmed the trend in the aggregate volume of imports that was emerging at the initiation of the investigation and calculated the volume of goods dumped during the period of the investigation. Details of the volume of dumped goods are given in Appendix 1.
THE INVESTIGATION
For the purposes of its investigation, the CCRA requested information from identified exporters and importers on sales and costs in order to determine the normal values and export prices of the subject goods. It also requested information from the government of China in order to form an opinion whether the replacement windshield industry is operating under market economy conditions or whether the provisions of section 20 of SIMA apply. Section 20 establishes the normal value of a good where the government of a country of export has a monopoly over its export trade and substantially determines the domestic prices of the goods subject to the investigation. When section 20 applies, the normal values are usually determined on the basis of domestic market prices or the full cost of the subject goods plus an amount for profit in a surrogate country operating under market conditions.
The dumping investigation involved all subject goods that were released into Canada during the period of investigation, that is, from December 1, 2000, to November 30, 2001.
Responses to the requests for information concerning dumping were received from four exporters in China within the required time frame:
- Fuyao Glass Industry Group Limited of Fuqing, Fujian,
- Shenzhen Benxun Automotive Glass Co. Ltd. of Shenzhen, Shelou, Xinyi
- Automotive Glass (Shenzhen) Company of Henggang Town, Shenzhen, Shelou, and
- Dongguan Kongwan Automobile Glass Limited of Dong Guan, Guangguan, whose parent company is Peaceful City Limited of Hong Kong.
A response was also received from an American vendor of goods produced in China, Greenville Glass Industries Inc., located in Piedmont, South Carolina. This vendor, whose goods are shipped directly to Canada from China, is a company affiliated with one of the manufacturers in China: Fuyao Glass Industry Group Limited.
With respect to the response of the government of China, the CCRA received the initial submission within the required time frame and additional information following a request for further information sent on March 27, 2002. Verification meetings were held with representatives of the government of China in Beijing and representatives of the provincial governments in Fuzhou and Shenzhen to verify the submission and the additional information provided.
Normal values are generally based on the domestic selling price of the goods in the country of export or on the total cost of producing and selling the goods plus an amount for profit. In the absence of such data, the Minister of National Revenue must specify the manner for the determination of normal values.
The export price of goods shipped to Canada is the lesser of the exporter's selling price or the importer's purchase price in Canada less all costs, charges, and expenses resulting from the exportation of the goods.
When the export price is less than the normal value, the difference is the margin of dumping. In the Results of the Investigation section, the margins of dumping are expressed as a percentage of the export price.
Determinations of normal values, export prices and margins of dumping are explained in the next section. For exporters that did not co-operate or provide complete responses to the requests for information, the normal values of the goods were determined in accordance with a Ministerial Specification pursuant to section 29 of SIMA and are based on the export price of the goods advanced by 114.32 per cent. This advance represents the highest margin of dumping found for a cooperative exporter, expressed as a percentage of the export price.
RESULTS OF THE INVESTIGATION
Traditionally, the CCRA has considered the People's Republic of China to be a country with a non-market economy.
For the purposes of this investigation, both the government of China and the four exporters Fuyao Glass Industry Group Limited (Fuyao), Shenzhen Benxun Automotive
Glass Co. Ltd. (Benxun), Xinyi Automotive Glass Company (Xinyi) and Dongguan Kongwan Automobile Glass Limited (Dongguan) and the American vendor of goods manufactured in China, Greenville Glass Industries Inc., provided detailed responses to the CCRA's request for information. Following a review of these submissions and publicly available information collected by the CCRA, additional information was requested from the government of China and the exporters. Verification visits took place in the offices of the Ministry of Foreign Trade and Economic Co-operation in Beijing from May 8 to 13, 2002, the provincial offices of the Ministry of Foreign Trade and Economic Co-operation in Fuzhou on May 14 and 15, 2002, and the offices of the Bureau of Foreign Trade and Economic Co-operation in Shenzhen on May 16 and 17, 2002.
Verification visits also took place in the premises of Fuyao in Fuqing from May 20 to 24, 2002, the premises of Benxun in Shenzhen from May 27 to 30, 2002, the premises of Xinyi in Shenzhen from May 27 to 31, 2002, the premises of Dongguan in Dongguan from May 20 to 22, 2002, and the offices of its parent company, Peaceful City, in Hong Kong on May 23 and 24, 2002.
Based on the analysis of the responses received from the government, the four exporters and publicly available information as well as information retrieved during the verification visits, pursuant to subsection 20(1) of SIMA, the Commissioner is of the opinion that the government of China does not have a monopoly or substantial monopoly over it's export trade in the replacement windshield industry. The Commissioner is also of the opinion that the government of China does not substantially determine domestic prices and that there is no sufficient reason to believe that these prices would be different in a competitive market. Consequently, the CCRA considers that China's replacement windshield industry operates under market conditions and that the provisions of section 20 do not apply.
Fuyao Glass Industry Group Limited
Normal values - Fuyao sold like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of like goods in the domestic market pursuant to section 15 of SIMA. Special Import Measures Regulations (SIMR) adjustments were made to the domestic selling prices in order to reflect quantity discounts pursuant to section 3, differences in quality pursuant to paragraph 5(a), differences in terms of payment pursuant to paragraph 5(d), delivery costs pursuant to section 7 and taxes pursuant to section 10.
Export price - Fuyao sells the subject goods in Canada in the following two ways: the goods are either sold and shipped directly from China to Canada to an unrelated importer or Fuyao sells the goods to a related purchaser (Greenville Glass Industries Inc.) and ships them directly from China to Canada to an unrelated importer. In both cases, the CCRA determined that the exporter for the purposes of SIMA was Fuyao. Since the goods were sold in both cases to unrelated importers in Canada, the export prices were determined in accordance with paragraph 24(a) of SIMA.
Margins of dumping - Of the goods from Fuyao released into Canada during the period of investigation, 57.98 per cent were dumped. The weighted average margin of dumping was 24.09 per cent, expressed as a percentage of the export price.
Shenzhen Benxun Automotive Glass Co. Ltd.
Normal values - Benxun sold like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of like goods in the domestic market pursuant to section 15 of SIMA. SIMR adjustments were made to the domestic selling prices in order to reflect differences in quality pursuant to paragraph 5(a), differences in terms of payment pursuant to paragraph 5(d) and taxes pursuant to section 10.
Export price - The subject goods were sold to unrelated importers in Canada. Consequently, the export prices were determined pursuant to paragraph 24(a) of the SIMA.
Margins of dumping - Of the goods from Benxun imported into Canada during the period of investigation, 13.80 per cent were dumped. The weighted average margin of dumping was 0.00 per cent, expressed as a percentage of the export price.
Xinyi Automotive Glass (Shenzhen) Company
Normal values - Xinyi sold like goods in its domestic market. When there were sufficient sales of like goods, the normal values were determined on the basis of the weighted average selling price of like goods in the domestic market, pursuant to section 15 of SIMA. SIMR adjustments were made to the domestic selling prices in order to reflect differences in quality pursuant to paragraph 5(a), differences in terms of payment pursuant to paragraph 5(d), cash rebates pursuant to section 6, delivery costs pursuant to section 7 and taxes pursuant to section 10. When there were insufficient acceptable sales of like goods in the domestic market, the normal values were determined pursuant to paragraph 19(b) of SIMA on the basis of the cost of production of the goods, an amount for administrative, selling and other costs, plus a reasonable amount for profit. The amount of profit was determined pursuant to subparagraph 11(1)(b)(ii) of SIMR using the profit made on sales of goods in the same general category as the goods sold to the importers in Canada.
Export price - The subject goods were sold to unrelated importers in Canada. Consequently, the export prices were determined pursuant to paragraph 24(a) of SIMA.
Margins of dumping - Of the goods from Xinyi imported into Canada during the period of investigation, 0.02 per cent were dumped. The weighted average margin of dumping was 0.00 per cent, expressed as a percentage of the export price.
Dongguan Kongwan Automobile Glass Limited
Normal values - Dongguan sold like goods in its domestic market. Since there were insufficient acceptable sales of like goods in the domestic market, the normal values were determined pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, an amount for administrative, selling and other costs, plus a reasonable amount for profit. The amount of profit was determined pursuant to subparagraph 11(1)(b)(iv) of SIMR, using the profit made by other producers on sales in the domestic market of goods in the same general category as the goods sold to the importers in Canada.
Export price - The subject goods were sold to unrelated importers in Canada. Consequently, the export prices were determined pursuant to paragraph 24(a) of the SIMA.
Margins of dumping - Of the goods from Dongguan imported into Canada during the period of investigation, 4.55 per cent were dumped. The weighted average margin of dumping was 0.00 per cent, expressed as a percentage of the export price.
Other exporters
The other exporters in China did not respond to the CCRA's request for information. None of the exporters in the United States that shipped the subject goods to Canada during the period of investigation provided a response to the request for information sent by the CCRA.
For the imports of the subject goods from these exporters, the normal values were determined in accordance with a Ministerial Specification pursuant to section 29 of SIMA and they were based on the export price advanced by 114.32 per cent. This advance represents the highest margin of dumping found for a co-operative exporter during the investigation.
The export prices of the subject goods from these exporters were also determined in accordance with a Ministerial Specification pursuant to section 29 of SIMA on the basis of the importer's purchase price.
During the period of investigation, all of the subject goods from these other exporters were found to be dumped. The margin of dumping was 114.32 per cent, expressed as a percentage of the export price.
Summary
To summarize, during the period of investigation, 45.70 per cent of the goods imported into Canada from China were dumped by a weighted average margin of dumping of 21.44 per cent, expressed as a percentage of the export price. In making a final determination of dumping, the Commissioner must be satisfied that the subject goods have been dumped and that the margin of dumping is not insignificant. Subsection 2(1) of SIMA stipulates that the margin of dumping is insignificant if it is less than 2 per cent of the export price of the goods. As indicated in Appendix 2, the margin of dumping for the total volume of imports is above the 2 per cent threshold.
DECISION
Based on the results of the investigation, the Commissioner is satisfied that the subject goods originating from China have been dumped and that the margin of dumping is not insignificant.
Accordingly, on July 31, 2002, the Commissioner has made a final determination of dumping pursuant to paragraph 41(1)(a) of SIMA.
FUTURE ACTION
The Canadian International Trade Tribunal's inquiry concerning the question of injury to production in Canada is continuing. The Tribunal will issue its finding by August 30, 2002.
Subject goods imported during the provisional period will continue to be assessed provisional duty as determined at the time of the preliminary determination. The provisional period began on May 2, 2002, the date of the preliminary determination of dumping, and will end on the date on which the Tribunal issues its finding. Further information on the application of provisional duty is provided in the Statement of Reasons issued at the time of the preliminary determination, which can be found on the CCRA Web site; at: www.cbsa-asfc.gc.ca/sima-lmsi/
If the Tribunal finds that the dumped goods have not caused injury or do not threaten to cause injury, all proceedings relating to the investigation will be terminated. In such a case, all provisional duty collected or security posted by importers will be returned and future imports of the subject goods will not be subject to anti-dumping duty.
If the Tribunal finds that the dumped goods have caused injury, the CCRA will finalize the anti-dumping duty payable on the subject goods released from Customs possession during the provisional period, pursuant to section 55 of SIMA. Imports released from Customs possession after the date of the Tribunal's findings will be subject to anti-dumping duty equal to the margin of dumping. In that event, the importer in Canada shall pay all such duty. The Customs Act applies, with any modification that the circumstances require, with respect to the accounting and payment of the anti-dumping duty.
Specific normal values for the subject goods have been provided to those exporters who co-operated in the CCRA investigation. If the Tribunal makes an injury finding, these normal values will come into effect on the day after the date of the injury finding. Where specific normal values have not been issued, anti-dumping duty equal to 114.32 per cent of the export price will be payable on imports of the subject goods.
PUBLICATION
Notice of this final determination is being published in the Canada Gazette pursuant to paragraph 41(3)(a) of SIMA.
INFORMATION
This Statement of Reasons has been provided to persons directly interested in these proceedings. A free copy may be obtained upon request or from the Web site below. For further information, please contact Mr. Robert Veilleux or Ms. Barbara Chouinard, as follows:
Canada Customs and Revenue Agency
Anti-dumping and Countervailing Directorate
16th Floor, Sir Richard Scott Building
191 Laurier Avenue West
Ottawa, Ontario
Canada
K1A 0L5
Telephone
Robert Veilleux : (613) 954-1666
Barbara Chouinard : (613) 954-7399
Fax: (613) 941-2612
robert.veilleux@ccra-adrc.gc.ca
barbara.chouinard@ccra-adrc.gc.ca
Web site
www.cbsa-asfc.gc.ca/sima-lmsi/
www.cbsa-asfc.gc.ca/sima-lmsi/
Caterina Ardito-Toffolo
Acting Director General
Anti-dumping and Countervailing Directorate
APPENDIX 1
SUMMARY OF FINAL DETERMINATION
VOLUMES OF DUMPED GOODS FOR CERTAIN
AUTOMOTIVE LAMINATED WINDSHIELDS
(December 1, 2000, to November 30, 2001)
| Country |
Total Goods released from Customs |
Total Goods Dumped |
Dumped goods originating in China as a percentage of total imports from all countries |
|---|---|---|---|
|
China Other Countries All Countries |
573,166 1,090,485
1,663,651 |
261,922 0
261,922 |
15.74 % |
Data concerning imports for the period of investigation are based on the information provided by the importers and exporters, Statistics Canada data, the CCRA internal information system and customs documents.
APPENDIX 2
SUMMARY OF FINAL DETERMINATION
MARGINS OF DUMPING BY EXPORTER
FOR CERTAIN AUTOMOTIVE LAMINATED WINDSHIELDS
(December 1, 2000, to November 30, 2001)
| Exporters | % of Dumped Goods | Range of Margins of Dumped Goods (% of Export Price) |
Weighted Average Margin of Dumping (% of Export Price) |
|---|---|---|---|
| China : | |||
| Fuyao Glass Industry | 57.98 % | 0.002 % - 114.32 % | 24.09 % |
| Shenzhen Benxun | 13.80 % | 0.003 % - 34.07 % | 0.00 % |
| Xinyi | 0.02 % | 0.240 % - 5.760 % | 0.00 % |
| Dongguan Kongwan | 4.55 % | 0.200 % - 23.92 % | 0.00 % |
| Other Exporters | 100.00 % | 114.32 % (1) | 114.32 % |
| Average for Countries | 45.70 % | 0.002 % - 114.320 % | 21.44 % |
The margin of dumping is expressed as a percentage of the total export price of all the goods reviewed, dumped and non-dumped.
The existence of a range of margins of dumping for an exporter does not preclude the weighted average margin of dumping from being 0.00% in the following column. This occurs when a number of sales for a particular product or category of products have an export price higher than the normal value which offsets the sales with a margin of dumping. This results in a net margin of dumping of zero or infinitesimal for the product or category of products as a whole. When this occurs for each model or category of the exporter, the margin of dumping is determined to be zero.
(1) Margin of dumping based on the highest margin of dumping found for a co-operative exporter.
