Narrow Woven Ribbons with Woven Selvedge from China and Taiwan Investigation Nos. 701-TA-467 and 731-TA-1164-1165 (Final) Publication 4180 August 2010 Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS Deanna Tanner Okun, Chairman Charlotte R. Lane Daniel R. Pearson Shara L. Aranoff Irving A. Williamson Dean A. Pinkert Robert B. Koopman Acting Director of Operations Staff assigned Russell Duncan, Investigator Shannon Gaffney, Industry Analyst Nancy Bryan, Economist Mary Klir, Accountant Elizabeth Duall, Attorney George Deyman, Supervisory Investigator 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 Narrow Woven Ribbons with Woven Selvedge from China and Taiwan Investigation Nos. 701-TA-467 and 731-TA-1164-1165 (Final) Publication 4180 August 2010 TABLE OF CONTENTS Determinations .............................................................................................................................................. 1 Views of the Commission ............................................................................................................................. 3 Dissenting Views of Chairman Deanna Tanner Okun and Commissioner Daniel R. Pearson ................... 37 Separate and Dissenting Views of Commissioner Dean A. Pinkert ........................................................... 41 Part I: Introduction ............................................................................................................................. I-1 Background ............................................................................................................................................ I-1 Statutory criteria and organization of the report .................................................................................... I-2 Statutory criteria ................................................................................................................................. I-2 Organization of the report .................................................................................................................. I-2 Market summary .................................................................................................................................... I-3 Summary data ........................................................................................................................................ I-3 Previous investigations .......................................................................................................................... I-3 Nature and extent of subsidies and sales at LTFV ................................................................................. I-3 Subsidies ............................................................................................................................................ I-3 Sales at LTFV .................................................................................................................................... I-4 The subject merchandise ........................................................................................................................ I-6 Commerce’s scope ............................................................................................................................. I-6 Tariff treatment .................................................................................................................................. I-8 The product ............................................................................................................................................ I-9 Description and applications .............................................................................................................. I-9 Manufacturing processes ................................................................................................................. I-10 Domestic like product issues ................................................................................................................ I-12 Part II: Conditions of competition in the U.S. market ...................................................................... II-1 U.S. market characteristics.................................................................................................................... II-1 Channels of distribution ........................................................................................................................ II-2 Supply and demand considerations ....................................................................................................... II-4 Supply ............................................................................................................................................... II-4 Demand ............................................................................................................................................. II-8 Substitutability issues .......................................................................................................................... II-11 Factors affecting purchasing decisions ........................................................................................... II-11 Comparisons of domestic product and subject imports .................................................................. II-14 Other country comparisons ............................................................................................................. II-18 Elasticity estimates .............................................................................................................................. II-19 U.S. supply elasticity ...................................................................................................................... II-19 U.S. demand elasticity .................................................................................................................... II-19 Substitution elasticity ...................................................................................................................... II-20 i TABLE OF CONTENTS--Continued Part III: U.S. producers’ production, shipments, and employment ................................................ III-1 U.S. producers ...................................................................................................................................... III-1 Historical decline of the industry ..................................................................................................... III-1 U.S. production, capacity, and capacity utilization .............................................................................. III-2 U.S. producers’ U.S. shipments and exports ........................................................................................ III-3 Seasonality of U.S. shipments.......................................................................................................... III-4 U.S. shipments by channel of distribution ....................................................................................... III-4 U.S. producers’ imports and purchases ................................................................................................ III-5 U.S. producers’ inventories .................................................................................................................. III-5 U.S. employment, wages, and productivity ......................................................................................... III-6 Part IV: U.S. imports, apparent U.S. consumption, and market shares ......................................... IV-1 U.S. importers ..................................................................................................................................... IV-1 U.S. importers’ U.S. imports............................................................................................................... IV-2 U.S. imports controlled by U.S. producers ..................................................................................... IV-3 Negligibility ........................................................................................................................................ IV-4 U.S. importers’ shipments of imports ................................................................................................. IV-4 U.S. importers’ U.S. shipments by channel of distribution ............................................................ IV-6 Cumulation considerations .................................................................................................................. IV-6 Fungibility ....................................................................................................................................... IV-6 Geographic overlap ......................................................................................................................... IV-7 Presence in the market and seasonality ........................................................................................... IV-7 Apparent U.S. consumption and U.S. market shares .......................................................................... IV-8 Apparent U.S. consumption and market shares by channel of distribution .................................... IV-9 Ratio of imports to U.S. production .................................................................................................. IV-10 Part V: Pricing and related information