SWEATERS WHOLLY OR in CHIEF WEIGHT of MANMADE FIBERS from HONG KONG, the REPUBLIC of KOREA, and TAIWAN Determinations of the Commission in Investigations Nos
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.:: SWEATERS WHOLLY OR IN CHIEF WEIGHT OF MANMADE FIBERS FROM HONG KONG, THE REPUBLIC OF KOREA, AND TAIWAN Determinations of the Commission in Investigations Nos. 731-TA-448-450 ·· (Preliminary) Under the Tariff Act of 1930, Together With the Information Obtained in the Investigations USITC PUBLICATION 2234 NOVEMBER 1989 United States International Trade Commission Washington, DC 20436 UNITED STATES INTERNATIONAL TRADE COMMISSION COMMISSIONERS Anne E. Brunsdale, Chairman Ronald A. Cass, Vice Chairman Alfred E. Eckes Seeley G. Lodwick David B. Rohr Don E. Newquist Staff assigned: Jonathan Seiger, Investigator Peggy MacKnight, Commodity-Industry Analyst William Shpiece, Economist Jerald Tepper, Accountant/Financial Analyst William Kane, Attorney George Deyman, Supervisory Investigator Address all communications to Kenneth R. Mason, Secretary to the Commission United States International Trade Commission Washington, DC 20436 CONTENTS Page Determinations ..••••••... 1 Views of the Commission. 3 Additional views of Chairman Anne E. Brunsdale. 29 Additional views of Vice Chairman Ronald A. Cass. 33 Information obtained in the investigations •• A-1 Introduction. A-1 The products .•....••.. A-2 Description and uses ••. A-2 Manufacturing processes. A-3 Substitute products •.. A-4 U.S. tariff treatment. A-6 Quota restrictions ..... A-9 The .effect of quotas ..• A-10 Nature and extent of the alleged sales at LTFV. A-11 Hong Kong .• A-11 Korea... · A-11 Taiwan ... ..... A-12 The U.S. market .. A-12 Apparent U.S. consumption •• A-12 All sweaters .•.••....... A-12 Sweaters of manmade fibers ...••••••. A-13 U.S. producers ........... A-15 U.S. importers •....••........•.. A-16 Channels of distribution. A-17 Consideration of alleged injury to an industry in the United States. A-18 U.S. production, capacity, and capacity utilization .....• A-19 U.S. producers' domestic shipments and company transfers .. A-23 Sweaters of manmade fibers .• A-23 Sweaters of other fibers. A-24 All sweaters. A-25 U.S. producers' inventories. A-27 U.S. employment, wages, and productivity ••. A...:28 Sweaters of manmade fibers. A-28 All sweaters ••.•........•• A-31 Financial experience of U.S. producers. A-32 Overall establishment operations .••••. A-32 Operations on sweaters of manmade fibers and sweaters of other fibers . ........................... A-33 Investment in productive facilities •. A-33 Capital expenditures ...•....•••... A-35 Research and development expenses. A-35 Capital and investment ....••••.... A-35 Consideration of the question of threat of material injury. A-36 U.S. importers' inventories . ........................ A-38 Ability of foreign producers to generate exports and availability of export markets other than the United States ••. A-40 The Hong Kong industry. A-40 The Taiwanese industry. A-40 The Korean industry •. A-41 Other issues •••••.••. A-41 ii CONTENTS Information obtained in the investigations--Continued. Consideration of the causal relationship between imports of the subject merchandise and the alleged material injury ..••••••••• A-42 U.S. imports.~ ...................................................... A-42 Sweaters of manm.ade fibers . ........................... ·. A-42 All sweaters...................................................... A-44 Sweaters of other fibers. A-44 U.S. market penetration by imports .••••••••••.••••••.•.•••••.••••••• A-44 Sweaters of manmade fibers. A-45 All sweaters...................................................... A-45 Prices . ..........· ...................................• . A-48 Questionnaire ·price data. .. A-49 Price trends . ......·. A-5 0 Price comparisons. A-51 Exchange rates. .. A-52 Lost Sales and lost revenues. A-54 Appendices A. Federal Register notices............................................ B-1 B. List of participants in the public conference....................... B-7 C. Estimates of apparent U.S. consumption using data submitted in response to Commission questionnaires •....••.•••••••..•••••••.• B-11 D. Comments received from U.S. producers on the impact of imports of sweaters of manmade ·fibers from Hong Kong, Korea, and Taiwan on their growth, investment, ability to raise capital, or existing development and production efforts ••...•.•..••..••.••. B-15 E. Calculation of U.S. imports of sweaters using information compiled from data submitted in response to Commission questionnaires ••.... B-17 F. U.S. imports of· sweaters of other fibers and all sweaters .•••••••... B-21 G. Market penetration by U.S. imports of sweaters calculated using information compiled from data submitted in response to Commission questionnaires •.••••••.•.•.••..••......•.•.•.••••••••.• B-25 iii CONTENTS Tables 1. Sweaters wholly or in chief weight of manmade fibers: HTS subheadings, 1989 most-favored-nation (MFN) tariff rates, and .u.s. imports from Hong Kong, Korea, and Taiwan, January-Jurie 1989 . ............................................... A-7 2. Sweaters: U.S. production, imports, and apparent U.S. consumption, 1986-88 .......................................................... A-13 3. Sweaters of manmade fibers: U.S. production, imports, and apparent U.S. consumption, 1986-88. • . • • . • • . • . • . • . • . • . A-14 4. Sweaters: U.S. capacity, production, and capacity utilization, by products, 1986-88, January-June 1988, and January-June 1989 •.....• A-20 5. Sweaters of manmade fibers: U.S. shipments of U.S. producers, by types, 1986-88, January-June 1988, and January-June 1989 •...... A-24 6. Sweaters of other fibers: U.S. shipments of U.S. producers, by types, 1986-88, January-June 1988, and January-June 1989 •.•....... A-25 7. Sweaters: U.S~ shipments of U.S. producers, by types, 1986-88, January-June 1988, January-June 1989.............................. A-26 8. Sweaters: U.S. prod~cers' end-of-period inventories, by products, as of Dec. 31 of 1986-88, and as of June 30 of 1988 and 1989 •...•• A-27 9. Total establishment employment and average number of production and related workers producing sweaters, hours worked, wages and total compensation paid to such employees, and labor productivity, hourly· compensation, and unit labor production costs, 1986-88, January-June 1988, and January-June 1989 .••••.•....••••••.....•••• A-29 10. Income-and-loss experience of U.S. producers on the overall operations of their establishments within which sweaters are produced, accounting years 1986-88, January-June 1988, and January-June 1989 ... ~ . A-34 11. Value of property, plant, and equipment of U.S. producers of sweaters, accounting years 1986-88, June 30, 1988, and June 30, 1989..................................................... A-35 12. Sweaters of manmade fibers: Importers' end-of-period inventories, by sources, as of Dec. 31 of 1986-88, and as of June 30 of 1988 and 1989.......................................................... A-39 13. Sweaters of manmade fibers: Taiwan's capacity, production, inventories, home-market shipments, and exports to the United States and to all other countries, 1986-88, January-June 1988, and January-June 1989............................................. A-40 14. Sweaters of manmade fibers: U.S. imports from Hong Kong, Korea, Taiwan, and all other countries, 1986-88, January-June 1988, and January-June 1989 .................. ~.............................. A-43 15. Sweaters of manmade fibers: U.S. production, imports, and apparent consumption, 1986-88 ...........•••..•.•....•.....••...... A-46 16. Sweaters: U.S. production, imports, and apparent consumption, 1986-88........................................................... A-47 17. Sweaters of manmade fibers: Weighted-average net f.o.b. prices of products 1-4 and 6 reported by U.S. producers and importers, by quarters, January 1986-June 1989.................................. A-51 iv CONTENTS Tables--Continued 18. Sweaters of manrnade fibers: . Weighted.average net purchase prices of products 1-6 imported directly from Hong Kong, Taiwan, and Korea by U.S. retailers, by quarters, January 1986-June 1989 •..••• A-51 i9. Sweaters of manrnade fibers: Average margins of underselling (overselling) by imports from Hong Kong, Taiwan, and Korea, by products and by quarters, October 1987-June 1989 .••..••••...••• A-52 20. Exchange rates: Nominal exchange rates of selected currencies in U.S. dollars, rea.1 exchange-rate equivalents, and producer price indexes in specified countries, indexed by quarters, January 1986-June 1989 ............................... ;~ ........... A-53 C-1. Sweaters of manrnade fibers: U.S. shipments by producers and importers, and apparent consumption, 1986-88, January-June 1988, and January-June 1989 .••••..••.••.· ......••..•..•••••••••••• , B-12 · C-2. Sweaters of other fibers: U.S. shipments by producers and importers, and apparent consumption, 1986-88, January-June 1988, and January-June 1989. • . • . • • . • . • • . • • • • . • . • . • • • • • • . • • . B-13 C-3. Sweaters: U.S. shipments by producers and importers, and apparent consumption, 1986-88, January-June 1988, and January-June 1989 . .. ·................. ·.................... ~. B-14 E-1. Sweaters of manrnade fibers: U.S. imports for consumption, by specified sources, 1986-88, January-June 1988, and January-June 1989 ...... ~ .. ;...................................... B-18 E-2. Sweaters of other fibers: U.S. imports for consumption, by specified sources, 1986-88, January-June 1988, and January-June 1989 ......... ·...................................... B-19 E-3. Sweaters: U.S. imports for consumption, by specified sources, 1986-88,