./.WORLD TRADE
ORGANIZATIONG/SG/29
5 February 2001
(01-0553)
Committee on Safeguards Original:  English
IMPOSITION OF A SAFEGUARD MEASURE
BY INDIA ON IMPORTS OF METHYLENE CHLORIDE
Request for Consultations from the European Communities
under Article 12.3 of the Agreement on Safeguards
The following communication, dated 1 February 2001, has been received from the Permanent
Delegation of the European Communities.
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On 20 July 2000, India notified the WTO (G/S G/N/6/IND/11) under Article12.1(a) of the
Agreement on Safeguards that it had initiated a safeguard investigation on imports of Methylene
Chloride into India.  On 15 December 2000, the Director General (Safeguards) published the finalfindings (SG/INV/2/2000) concerning the safeguard investigation and the proposal to adopt a
safeguard measure in respect of the above-mentioned product.  On 8 January 2001, the WTO
Committee on Safeguards received the notification of the final findings from the Permanent Mission
of India and on 11 January 2001 the WT O (G/SG/N/8/IND/10)  circulated it.
The European Commission is seriously concerned about the consistency of this measure with
Article XIX GATT 1994 and the Agreement on Safeguar ds.  In particular, the European Commission
considers that the requirements laid down in the Agreement on Safeguards for the adoption of a
definitive safeguard measure have not been satisfied.
The available facts do not appear to justify the conclusion that there may have been an
increase in imports in absolute terms or relative to domestic production, nor does there seem to be anyclear evidence that the increase in imports of Methylene Chloride has caused serious injury or threat
of serious injury.  Serious doubts also exist concerning the causal link between imports and the
serious injury, and the impact of other factors.  The European Commission has already expressed its
concerns to India and raised objections on several aspects of this case in the context of the Indian
procedure.  The European Commission also raised this case at the Safeguards Committee's regularmeeting on 9 November 2000.  India's findings do not appear to take into account any of the main
arguments presented by the European Commission in the context of the Indian procedure.  In
particular, India appears not to have taken any account of the lack of increase in imports particularly
as domestic demand increased.  Moreover no account was taken of the increase in domestic
production capacity, the impact of raw material costs, the impact on profitability of the investmentsmade by Indian producers of captive power generation.
The European Commission formally requests the holding of consultations under Article 12.3
with a view to, inter alia , reviewing the information provided by India, exchanging views on the
measure and reaching an understanding on ways to achieve the objective set out in paragraph 1 of the
Article 8 of the Agreement on Safeguards.G/SG/29
Page 2
Accordingly, it is proposed that consultations be held forthwith at a mutually agreed date and
place.
The European Commission reserves all its rights under the Agreement on Safeguards, in
particular Article 14, as well as under the Dispute Settlement Understanding.
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