Sugar from the European Union, and Sugar from Belgium, France, and Germany
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Sugar From The European Union, and Sugar From Belgium, France, and Germany Investigation No.104-TAA-7 (Second Review) and Investigation Nos. AA1921-198-200 (Second Review) Publication 3793 August 2005 U.S. International Trade Commission COMMISSIONERS Stephen Koplan, Chairman Deanna Tanner Okun, Vice Chairman Jennifer A. Hillman Charlotte R. Lane Daniel R. Pearson Shara L. Aranoff* Robert A. Rogowsky Director of Operations Staff assigned Jai Motwane, Investigator Falan Yinug, Investigator Douglas Newman, Industry Analyst Clark Workman, Economist Justin Jee, Accountant Karl von Schriltz, Attorney Steve Hudgens, Statistician Diane Mazur, Supervisory Investigator * Commissioner Shara L. Aranoff was sworn in on September 6, 2005. Commissioner Marcia Miller participated in these investigations. Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Sugar From The European Union, and Sugar From Belgium, France, and Germany Investigation No.104-TAA-7 (Second Review) and Investigation Nos. AA1921-198-200 (Second Review) Publication 3793 August 2005 CONTENTS Page Determinations.................................................................. 1 Views of the Commission ......................................................... 3 Separate and additional views of Vice Chairman Deanna Tanner Okun and Commissioner Charlotte R. Lane................................................. 33 Separate views of Commissioner Daniel R. Pearson..................................... 35 Dissenting views of Commissioner Marcia E. Miller .................................... 37 Part I: Introduction and overview ................................................... I-1 Background .................................................................. I-1 Statutory criteria and organization of the report...................................... I-1 Summary data................................................................ I-3 The original investigations...................................................... I-3 The first five-year reviews ...................................................... I-7 Related investigations.......................................................... I-7 Commerce’s results of expedited and full reviews.................................... I-8 Commerce’s administrative reviews............................................... I-8 Distribution of Continued Dumping and Subsidy Offset Act funds ....................... I-9 The subject product ............................................................ I-10 Description and uses ........................................................ I-11 Manufacturing process ...................................................... I-11 Channels of distribution...................................................... I-13 U.S. sugar program............................................................ I-13 History................................................................... I-13 1996-2002 ................................................................ I-13 2002-present .............................................................. I-14 Tariff-rate quotas on U.S. imports ................................................ I-17 Raw cane sugar ............................................................ I-17 Refined sugar.............................................................. I-20 Sugar-containing products .................................................... I-20 Safeguards................................................................... I-20 The domestic like product ....................................................... I-21 U.S. market participants........................................................ I-24 Introduction ............................................................... I-24 Sugar beet growers ......................................................... I-24 Sugar beet processors ....................................................... I-25 Sugar cane growers......................................................... I-28 Sugar cane millers .......................................................... I-29 Cane sugar refiners ......................................................... I-31 U.S. importers............................................................. I-32 Apparent U.S. consumption and market shares ...................................... I-33 Part II: Conditions of competition in the U.S. market ................................... II-1 Overview.................................................................... II-1 U.S. market segments, channels of distribution, and market structure..................... II-1 U.S. supply: domestic production for the U.S. market ................................ II-2 i CONTENTS–Continued Page Part II: Conditions of competition in the U.S. market–Continued U.S. supply: the potential of subject imports to supply U.S. market ...................... II-3 U.S. supply: nonsubject imports ................................................. II-3 U.S. demand................................................................. II-3 Demand characteristics ...................................................... II-3 Substitute products ......................................................... II-4 Cost share ................................................................ II-4 Substitutability issues .......................................................... II-4 Factors affecting purchasing decisions .......................................... II-5 Comparisons of domestic products and subject imports ............................. II-5 Comparisons of domestic products and nonsubject imports .......................... II-7 Subject vs. nonsubject imports ................................................ II-7 Elasticity estimates............................................................ II-8 U.S. supply elasticity ........................................................ II-8 U.S. demand elasticity....................................................... II-8 Substitution elasticity ....................................................... II-8 Part III: Condition of the U.S. industry ............................................... III-1 U.S. producers’ capacity, production, and capacity utilization .......................... III-1 Sugar beet and sugar cane growers............................................. III-1 Processors and refiners ...................................................... III-3 U.S. processors’ domestic shipments, company transfers, and export shipments ............ III-6 U.S. processors’ inventories ..................................................... III-8 U.S. processors’ purchases ...................................................... III-8 U.S. processors’ employment, wages, and productivity ................................ III-8 Financial experience of U.S. producers ............................................ III-9 Background ............................................................... III-9 Operations of sugar processors/refiners .......................................... III-10 Capital expenditures and research and development expenses (processors/refiners) ....... III-12 Assets and return on investment (processors/refiners) .............................. III-12 Operations of sugar millers ................................................... III-13 Capital expenditures and research and development expenses (millers) ................. III-15 Assets and return on investment (millers) ........................................ III-15 Operations of sugar growers .................................................. III-16 Capital expenditures and research and development expenses (growers) ................ III-17 Assets and return on investment (growers) ....................................... III-17 Part IV: U.S. imports and the foreign industry ......................................... IV-1 U.S. imports ................................................................. IV-1 Cumulation considerations...................................................... IV-8 The industry in the European Union ............................................... IV-8 The European Union sugar program............................................ IV-8 Subject producers’ capacity, production, and shipments ............................. IV-13 EU export markets .......................................................... IV-17 EU export policy ........................................................... IV-25 ii CONTENTS–Continued Page Part IV: U.S. imports and the foreign industry–Continued Nonsubject territories.......................................................... IV-27 U.S. free trade agreements ...................................................... IV-27 Mexico................................................................... IV-32 Part V: Pricing and related information .............................................. V-1 Factors affecting pricing........................................................ V-1 Raw material costs.......................................................... V-1 Inland transportation costs.................................................... V-1 Transportation costs to the U.S. market.......................................... V-1 Wholesale and retail margins .................................................. V-1 Exchange rates............................................................. V-1 Pricing practices.............................................................