Nos. AA1921-52, 53, 54, and 55), views were stated (on pages 4-10 of the Tariff Commission print) as to why injurious LTFV imports from various countries must be considered collectively in weighing the extent of injury caused by a class or kind of merchandise. Following such principle, it is appropriate to make this determination that LTFV imports from all three countries named by the Assistant Secretary of the Treasury are causing injury to a domestic industry.

In addition, the Commission has held that an affirmative determination will ensue if the degree of injury is greater than de minimis, that is, more than trifling injury.

With respect to LTFV sales from Canada, an analysis of average delivered prices of approximately 80 percent of all potassium chloride sales in the United States during the peak sales periods (February) in 1967, 1968, and 1969 shows that the importers of Canadian potassium chloride undersold the domestic producers of potassium chloride at the ratio of 9 sales to 2, or in about 82 percent of the cases. Moreover, such practices of underselling would generally not have occurred had the sales of imports been made at fair-value prices since the margin of

dumping 1/ at any given time generally exceeded the margin of

The term "margin of dumping" connotes the difference between the Canadian market price (f.o.b. plant) and the price for which the imported product was sold (f.o.b. plant) to an arm's length buyer, or its equivalent.

underselling

1/

several times.

Such underselling has caused a series of incremental price reductions in the U.S. market

within the past 2-1/2 years.

With respect to LTFV sales from West Germany and France, the facts are somewhat more difficult to weigh because more variables are present than in the case of imports from Canada. However, analysis of data regarding the prices obtained for domestic, West German, and French potassium chloride sold in recent years in the East Coast port markets which have traditionally been served by imports of potassium chloride from West Germany and France shows that their LTFV imports have been sold in most cases at prices below the price of the domestic product. This fact becomes clear after sales prices in these markets have 2/

been adjusted to delivered prices, and after taking due account

1 The term "margin of underselling" connotes the difference between the price of Canadian potassium chloride and the price of domestic potassium chloride, delivered to the U.S. customer.

2/ It has been the practice of the Commission and the customs courts to compare delivered prices of the domestic vs foreign products in the United States in weighing the effect of LTFV imports on domestic industries and in determining the applicability of the Antidumping Act to such imports. See Commission determination on Titanium Dioxide from France (Investigation No. AA1921-31) where the Commission weighed the qualities of the domestic and foreign products when comparing their U.S. sales prices. See also the U.S. Customs Court case which involved a protest against the assessment of a dumping duty on certain imported Canadian flour which was sold in the United States at delivered prices generally higher than the price of domestic flour. The court stated that "Testimony was to the effect that the grade of the Canadian and American flour was practically the same." In commenting further on the situation, it said:

The sales of Canadian-made flour sold in the United States were at higher prices than the American-made flour and thereby entirely destroy the effect of the dumping order of the Secretary of the Treasury or that of the appraiser. United States v. C. J. Towers & Sons, T.D. 45495 (1932); appeal dismissed C. J. Towers & Sons v. United States, 20 C.C.r.A. 504, 46131.

1.D.

of the differentials in market values between the domestic and the

West German and French potassium chloride because of differences in quality, promptness in deliveries, and storage charges incurred in the use of the imported product. Even after liberal adjustments were made, the margins of underselling were often substantial and caused general incremental decreases in the prices of potassium chloride in each of the last three years in the market areas in which such imports were sold. Thus, although the LTFV imports from West Germany and France are small in contrast to those from Canada, it is appropriate to consider the cumulative 1/ impact of LTFV sales of imports from all three countries. The salient facts in this case can be summarized as follows:

Footnotes to appear on next page at end of table.

Had the imports from West Germany and France not been resold in the United States at prices below the price for comparable domestic potassium chloride, they would have not been included within the affirmative determination, but would have been treated as "technical sales at less than fair value". The fact that sales of imports of potassium chloride have traditionally established what might be termed a normal price for the product in East Coast port markets does not justify the importers' acts of lowering their prices, with the aid of LTFV purchases from abroad, for the purpose of holding

1 1,000 short tons K20 equivalent.

The first years shipment in 1962 totaled 337,000 tons and average annual shipments thereafter increased at almost the rate of 300,000 tons per year.

3/ Over the last 35 years the unit value rose gradually from 24 cents in 1934 to a high of 41.3 cents in 1965. The price dropped precipitously in the years 1966-1968, falling to 23 cents per unit in 1968, and it is continuing to fall to lower levels; some prices now being quoted at as low as 16 cents per unit. This price is considerably below the average cost of production of both the U.S. and Canadian industries.

It will be seen from the foregoing summarization that imports from Canada in a few short years have resulted in their portion of U.S. consumption increasing from 0 to about 50 percent. In addition, there have been consequent losses of sales by domestic producers, major shifts of U.S. customers from U.S. producers to Canadian producers, substantial unemployment of workers in the U.S. industry with consequent harm to their community, a substantial decline in prices, and an alarming shift from a viable profitable domestic industry to one now losing more than it used to make.

1 Cont.--on to a traditional market when domestic producers step up their efforts to sell in such market.

For a discussion of the meaning of "technical sales at less than fair value" see cases involving imports of rayon staple fiber from Belgium, Cuba, and West Germany (Investigation Nos. AA1921-18, 20, and 21); and technical vanillin from Canada (Investigation No. AA1921-26).

The claim is made that these adverse conditions have resulted

almost wholly from oversupply rather than from LTFV imports. The fallaciousness of this contention can be readily seen when it is realized that imports have been sold at significantly lower prices than the domestic product and that the margin of underselling is virtually always derived wholly from the margin of dumping which generally is several times as great. We must conclude, therefore, that the impact of LTFV imports is substantial and is causing injury to the domestic industry far in excess of the de minimis threshhold previously alluded to.

With respect to the claim advanced at the hearing that the proposed potash conservation regulations to be promulgated by the Government of Saskatchewan to be effective January 1, 1970, will alleviate the injurious impact of Canadian potash on the U.S. industry, it is observed that this matter relates solely to the issue of whether there is a likelihood of continued injury from LTFV imports from Canada. Although such regulations have now

been issued, it is far too early to make any reasonable appraisal of their impact on the issue in question. Moreover, the evidence obtained gives no warrant for concluding that injury will not continue as a result of LTFV imports, particularly in light of the mushrooming growth of the Canadian industry.