WORLD TRADE
ORGANIZATIONG/SG/N/8/POL/3
G/SG/N/10/POL/2
14 August 2003
(03-4243)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT
THEREOF CAUSED BY INCREASED IMPORTS
NOTIFICATION PURSUANT TO ARTICLE 12.1(C)
OF THE AGREEMENT ON SAFEGUARDS
POLAND
(Gas Water Heaters)
The following communication, dated 11 August 2003, has been received from the Permanent
Mission of Poland.
_______________
Pursuant to Articles 12.1(b) and 12.1(c) of the Agreement on Safeguards, Poland hereby
submits notification upon making a finding of serious injury caused by increased imports.
1. Determination that increased im ports have caused serious injury
(a) Increase in imports
The volume of imports of the instantaneous gas water heaters in the investigation period
amounted to:
• 1,153,440 kilograms in 1998,
• 1,522,244 kilograms in 1999,
• 1,433,857 kilograms in 2000,
• 785,946 kilograms in the first half of 2001 (675,679 kilograms in the first half of 2000 - rate
of increase 16.3 per cent).
The share of imports  in relation to the domestic production during the investigation period
rose by:
• 66.6 per cent in 1999 compared with 1998,
• 103.2 per cent in 2000 compared with 1999,
• 74.3 per cent in the first half of 2001 compared with the same period of 2000.
With rapid fall of the domestic sales, there was a steady increase of imports share in the
domestic market which amounted to:
• 29.1 per cent in 1999 compared with 1998,
• 29.1 per cent in 2000 compared with 1999,G/SG/N/8/POL/3
G/SG/N/10/POL/2
Page 2
• 10.1 per cent in the first half of 2001 compared with the same period of 2000.
Import prices (PLN/kg)
• 1998 - 27.80
• 1999 - 30.05
• 2000 - 29.19
• in the first half of 2000 – 29.26
• in the first half of 2001 – 29.12
Prices of the domestic product:  (previous year = 100)
• 1998 – 100
• 1999 – 117.3
• 2000 – 135.3
• in the first half of 2001 – 116.8 in comparison with the same period of 2000.
The result of the analysis indicate that, since 2000 the prices of imported instantaneous gas
water heaters has been lower than prices of the domestic like product.  Price undercutting in the lastperiod of investigation it is in the first half of 2001 surpassed 34 per cent.
Imports of instantaneous gas water heaters at lower prices resulted in price fall of the
domestic product.  Price underselling since 2000 amounted to above 36 per cent.
(b) Serious injury
Based on analysis of the factors concerning the situation of domestic producer of the like
product as indicated in Article 4.2(a) of the Agreement on Safeguards, the investigating authority has
determined:
- volume of domestic production,
- domestic sales,
- productivity,
- capacity utilization,
- employment,
- profits and losses,- share of the domestic industry in the market.
- volume of domestic production (previous year = 100):
There was a steady fall of the volume of domestic production:
• in 1998 - 100
• in 1999 - 79.9
• in 2000 - 46.4
• in the first half of 2000 – 100
• in the first half of 2001 – 66.7 in comparison with the same period of 2000
- level of sales (previous year = 100):
• in 1998 - 100G/SG/N/8/POL/3
G/SG/N/10/POL/2
Page 3
• in 1999 - 80.0
• in 2000 - 46.7
• in the first half of 2000 – 100
• in the first half of 2001 – 82.0 compared with the same period of 2000
- productivity (previous year = 100):
• in 1998 – 100
• in 1999 – 103.5
• in 2000 – 107.2
• in the first half of 2000 – 100
• in the first half of 2001 – 90.0 in comparison with the same period 2000
- capacity utilization (previous year = 100):
• in 1998 – 100
• in 1999 – 70.2
• in 2000 – 60.3
• in the first half of 2000 – 100
• in the first half of 2001 – 66.8 in comparison with the same period of 2000
- employment:
Employment in the production of instantaneous gas water heaters decreased by 48.1 per cent
in the period 1998-2000 and by 17.9 per cent in the first half of 2001 in relation to the same period of
2000.
- profits and losses:
During period of investigation domestic industry was suffering losses which increased
substantially in the first half of 2001.
- share of the domestic industry in the market was falling steadily (previous year = 100):
• in 1998 – 100
• in 1999 – 78.3
• in 2000 – 64.1
• in the first half of 2000 – 100
• in the first half of 2001 – 77.6 compared with the same period of 2000
As a result of  analysis the Minister of Economy, Labour and Social Policy stated that the
domestic industry suffered an injury what is evidenced by such economic indicators as:  fall in the
sales level, production, productivity, capacity utilization, decrease in the share in the domestic market,fall in employment and financial losses.
(c) Causation
On the basis of available information the investigating authority has made a determination
that there is clear evidence of a causal link betw een the recent growth of imports of product under
investigation and the injury caused to domestic producer.  In the course of the investigation theG/SG/N/8/POL/3
G/SG/N/10/POL/2
Page 4
Minister of Economy, Labour and So cial Policy found that sharp increase in imports of instantaneous
gas water heaters took place in 2001 .  Increased imports were realized at prices lower than the
domestic ones and thus have caused serious injury to the domestic industry.
To ensure that serious injury is not attributable  to others factors than increase in imports, the
investigating authority evaluated all relevant factors, including fall in exports, influencing the
situation of that industry.  Minister of Economy,  Labour and Social Policy found that the fall in
exports was not so relevant to cause serious injury to the domestic industry.  In the course of the
investigation Minister of Economy, Labour and Social Policy has not found other factors which could
cause injury to the domestic industry.
The investigating authority has established that  worsening of the situation of the domestic
producer of like product is directly attributable to increase in imports.
2. Product subject to investigation
The product subject to investigation are instantaneous gas water heaters classified under tariff
item 8419 11 00 0 of the Polish Harmonized Tariff.
3. Description of the proposed measure
On the basis of the conclusions concerning injury and causal link Minister of Economy,
Labour and Social Policy intends to impose safeguard measure.  The safeguard measure is proposed
to consist  of additional duty to be paid on imports exceeding certain quantities.
The level of additional duty will be calculated on the basis of price underselling and will
amount to 25 per cent.
The quantity of imports free from additional duty will be established on the basis of the
average volume of imports of the product concerned in the last three years of the investigation period.
4. Proposed date of introduction of the measure
The measure is expected to be introduced before the end of the first half of 2003.
The decision on final findings was published in the official journal “Monitor Polski” No 29,
item 405, of 5 June 2003.
5. Expected duration of the measure
The safeguard measure will be applied up to 30 April 2004 until accession of Poland to the
European Union.
Period Quota Additional duty
Up to 31.12.2003 65,000 units 25%
01.01.2004 - 30.04.2004 35,000 units 25%
__________