WORLD TRADE
ORGANIZATIONG/TMB/R/51
11 February 1999
(99-0565)
Textiles Monitoring Body
REPORT OF THE FIFTY-SECOND MEETING
1. The Textiles Monitoring Body held its fifty-second meeting on 18 to 20 January 1999.
2. Following the appointment of new members and alternates, the composition of the TMB at
the beginning of 1999 was as follows:
MEMBERS ALTERNATES SECOND ALTERNATES
Mr. A. R. (Sandy) Moroz (Canada) Mr. Otto Wentzel (Norway)
Mr. Patricio Grané (Costa Rica) Mr. William Ehlers (Uruguay) Ms Claudia Orozco Jaramillo (Colombia)
Mr. John Richards (EC) Mr. Adebayo Babajide (EC)Mr. Stephen Chung (Hong Kong, China) Mr. Dong-Won Kim (Korea) Mr. M. Abdul Mannan (Bangladesh)
Mr. Mohan Kumar (India)
Mr. Kenji Kobayashi (Japan) Mr. Tomochika Uyama (Japan)Mr. S.I.M Nayyar (Pakistan) Ms Loi Mei Leng (Macau)Mr. Dimitrij Gr čar (Slovenia) Mr. Ali Urkan (Turkey) Mr. Didier Chambovey (Switzerland)
Mr. Arnupab Tadpitakkul (Thailand) Mr. Banudojo Hastjarjo (Indonesia)
Mr. William Tagliani (United States)
3. Present at this meeting were the following members and/or alternates:  Messrs. Babajide;
Chung;  Grané/Ehlers;  Gr čar;  Kumar;  Kobayashi;  Moroz;  Nayyar/Ms. Loi; Messrs. Tadpitakkul;
Tagliani.
4. The TMB adopted the report of its fifty-first meeting (G/TMB/R/50).
Notification under Articles 2.8(a) and 2.11 of the ATC
5. The TMB reverted to its review under Article 2.21 of the programme of integration notified
pursuant to Articles 2.8(a) and 2.11 by Paraguay and, seeking additional information and clarification,
decided to further revert to its review at a subsequent meeting.
Notification under Article 8.10 of the ATC
Colombia/Korea and Colombia/Thailand: imports of plain polyester filaments (tariff
heading 54.02.43)
6. The TMB received, on 22 December 1998, a communication from Colombia under
Article 8.10, following the examination by the TMB from 16 to 19 November 1998 of the transitional
safeguard measures introduced by Colombia on imports of plain polyester filaments(tariff heading 54.02.43) from Korea and Thailand.  The transitional safeguard measures had been
introduced with effect as from 26 October 1998, for a period of one year.G/TMB/R/51
Page 2
7. In this communication, Colombia conveyed its inability to conform with the recommendation
the TMB had made1, that the measures introduced by Colombia should be rescinded.  Colombia
considered that the measures adopted were compatib le with the requirements of Article 6 of the ATC,
and that the interpretations and conclusions of the TMB were not in keeping with the legal
requirements of the ATC.
8. The communication of Colombia set out in detail the reasons why the Colombian authorities
were unable to conform with the TMB’s recommendation.  The main reasons identified in this
communication can be summarized as follows:
- Colombia considered that the measures adopted were in conformity with the relevant
provisions of Article 6, particularly paragraphs 1, 2, 3, 4, 7, 8, 12 and 16 thereof.
Details were provided on the substantial increase in imports, the serious damage
suffered by the domestic industry (based on the decline in output, productivity,utilization of installed capacity, employment, prices and profit margin, the increase in
inventories and the suspension of investment), the causal link between the two
elements (no technological change was identified that might explain serious damage,
and there had also been nothing to suggest that the decline in output was due to
changes in consumer preference, the product concerned being a uniform product notsubject to changes in consumer preference), and the attribution of damage to imports
from Korea and Thailand.  Furthermore, in the interest of not restricting trade beyond
the extent necessary, the measures had been adopted for only one year and for a
single product, as defined by the tariff classification and by the development of
competition in that market segment;
- the TMB’s recommendation lacked any supporting legal basis.  Although the TMB
had found that there had been a substantial increase in imports and that the trends in
eight of the 11 economic variables dealt with in Article 6.3 of the ATC pointed to
damage, it had concluded that "it was not possible to assess whether or not serious
damage had been caused to Colombia's industry producing like and/or directlycompetitive products by increased imports of plain polyester filaments".  Colombia
stated that according to the TMB, there were three reasons for this:  (i) the
information submitted in respect of damage did not cover 100 per cent of the
Colombian producers of plain polyester filaments;  (ii) the product subject to the
measures did not represent all like and/or directly competitive products under
HS Chapter 54;  and (iii) the information on damage did not concern an elapsed year;
- none of the above points constituted a legal requirement under Article 6 of the ATC.
Consequently, an interpretation such as in  (i) above was contrary to the rules of
interpretation of international treaties set out in Articles 31 and 32 of the Vienna
Convention on the Law of Treaties, setting up interpretations which would make the
transitional safeguard of the ATC inoperative.  In addition, and without prejudice to
the above, in accordance with Articles 6.10 and 8.3 of the ATC, information waspresented by Colombia on the domestic industry and on the performance of damage
indicators over a 12-month period, for consideration by the TMB.
9. In light of the above, the Colombian Government could not conform with the
recommendation adopted by the TMB and requested the TMB to reconsider the decision adopted at its
meeting of 16 to 19 November 1998.
                                                     
1 For the TMB's review pursuant to Article 6.10, see G/TMB/R/49, paragraphs 8 to 27.G/TMB/R/51
Page 3
10. At the invitation of the TMB, pursuant to Article 8.7, Colombia, Korea and Thailand sent
delegations to participate in the TMB’s review of the matter.
11. The representative of Colombia, while providing explanations of the  submission presented to
the TMB, stated, inter alia , that:
- with respect to the data presented by Colombia and available for the TMB’s
examination in November 1998, the ATC gave no clear indication as to how the data
referred to in Article 6 should be analysed but only indicated the variables to be
analysed.  Moreover, the TMB had neither created precedents nor developed
guidelines indicating a preference.  Therefore, the Colombian Government had
presented the data in three different forms, all of which confirmed the existence of
serious damage.  The data provided at the present meeting on a 12-month rolling year
basis showed serious damage through a drop in output, productivity, capacityutilization, market share, employment, prices and profits, and through an increase in
inventories and a suspension of investment programme;
- with respect to the findings made by the TMB at its November 1998 meeting,
Colombia stated that it had explained in November 1998 that three enterprises used to
produce plain polyester filaments, out of which one had filed for bankruptcy.  Out ofthe remaining two, the company that had filed a petition with a view to having
safeguard measures introduced represented 62 per cent of the total production, and
the remaining 38 per cent was produced by one other company.  Therefore, it was a
false statement to say that Colombia had not presented information on 38 per cent of
the domestic industry. Moreover, as indicated in the present communication, thepetitioner also represented 100 per cent of the domestic production for the domestic
market, since the 38 per cent produced by the other company was for its own internal
consumption.  Colombia questioned the legal basis for the TMB to consider that
62 per cent of the industry was not representative of the state of the domestic industry
producing the product under investigation.  Colombia also asked whether the TMBconsidered that the term "domestic industry producing like and/or directly
competitive products" in Article 6.2 referred to that industry which produced
100 per cent of the product in question;
- with reference to paragraph 19 of G/TMB/R/49, Colombia questioned the legal basis
for considering that when a measure can be applied only to those imported products
that are similar to those produced by the domestic industry it should, in fact, be
applied to a wider range of products, including all those that are similar;  and, if thiswere to be the case, what were the products to be covered in order to apply the
safeguard measures to plain polyester filaments (HS 54.02.43).  In determining the
product coverage for the safeguard measures, Colombia had verified that two types of
polyester filament yarns were produced in Colombia: textured yarn of polyester
filaments (HS 54.02.33) and plain polyester filaments (HS 54.02.43).  It had beendetermined that these were two different products.  Yarn of HS 54.02.33 had been
altered by a physical process of twisting, compression, ruffling or the like, in order to
make a curled fibre which had some physical properties that made it desirable for
certain uses, in particular elastic fabrics and fabrics where volume, not uniformity,
was important.  Yarn of HS 54.02.43 was not twisted, and used for other types offabrics where elasticity was not required and uniformity of the fabric was a key
element.  Consequently, the investigatin g authorities had conducted two separate
investigations and concluded that the safeguard measures should be applied only to
untwisted yarn of polyester filaments.  Colombia also explained that products underG/TMB/R/51
Page 4
these two HS lines (54.02.33 and 54.02.43) were different from those falling under
54.02.42, which were the input material for both;
- with reference to paragraph 21 of G/TMB/R/49, Colombia questioned what was the
legal basis to determine that the information on the state of the industry should be
presented on a 12-month rolling year basis in accordance with the 12-month periodreferred to in Article 6.8.  In the view of Colombia, this Article was not related to the
information on the state of the industry, as was recognized in Article 6.7 which
indicated that "the information shall be related, as closely as possible, to identifiable
segments of production and to the reference period set out in [Article 6.8]."
12. The representative of Korea stated, inter alia , that the additional information provided by
Colombia in its communication contained nothing ne w in substance.  The legal arguments advanced
by Colombia were unwarranted.  Therefore, Korea saw no reason why the TMB should reconsider itsrecommendation.
- Colombia had contended that the TMB had considered that the information on the
domestic industry should cover 100 per cent of the domestic producers of the
particular product.  This had been stated nowhere in the TMB’s report.  With respect
to the question of like and/or directly competitive products, when referring toArticle 4.1(c) of the Agreement on Safeguards  and to Article 4.1 of the Agreement on
the Implementation of Article VI of GATT 1994, Colombia had deliberately
neglected a reference to the "like and/or directly competitive products".  If all
segments of the industry producing the like and/or directly competitive products were
covered, the one enterprise for which data had been provided would represent muchless than 62 per cent of the domestic production and could not, therefore, be
considered as constituting a "major" proportion of the total domestic production.
Moreover, even if the other company still in operation produced that  yarn only for its
own consumption, it still represented a significant portion of the domestic industry
and should have been subject to an investigation.
- Contrary to what Colombia had said, the TMB had not stated that the ATC required
the Member taking the safeguard action to accumulate tariff headings.  Therefore,
Colombia’s arguments based on Articles 1.7, 6.1, 6.14 and 6.16 of the ATC were
irrelevant in a re-examination of the safeguard measures.
- With respect to the assessment of serious damage and the causal link between
increased imports and the damage, the additional information provided by Colombia
(which was an ex post  justification) did not provide a solution to the difficulties
experienced by the TMB in determining serious damage during the previous
examination.  As regards the causal link, Korea had found no substantive evidence to
substantiate Colombia’s statement that it had found nothing to suggest that the
damage had been caused by technological changes or changes in consumer
preferences.  Colombia had shifted the burden of proof to importers, whichconstituted a violation of Colombia’s obligations under Article 6.2.  Korea had
argued that the damage might have been caused by the decline in Colombia’s
domestic industry and deteriorating competitiveness, to which Colombia had
responded that there had been no contraction in demand or any reduction in national
consumption.  However, the company allegedly constituting 62 per cent of theindustry had experienced a sharp decline in its exports in 1998.  This decline could be
attributed to its loss of competitiveness in price and quality.G/TMB/R/51
Page 5
13. The representative of Thailand stated, inter alia , that:
- the fact that Colombia had requested reconsideration of this matter by the TMB using
new, adjusted information, could be considered as an attempt to initiate a new case.
Thailand was of the view that the TMB’s reconsideration should be based on the
information used at the time the request for consultations had been made.  It wasessential that Colombia should first co mply with the TMB’s recommendation before
requesting a new hearing on the same case, since the continuation of the restraint
unfairly harmed the Thai yarn manufacturers;
- the TMB had not required that the data used by Colombia in the request for
consultations represent all domestic producers, but merely that the information
provided by Colombia should reflect the state of the entire industry;
- the fact that one company accounted for 100 per cent of the domestic production for
the domestic market did not mean that the Colombian industry was composed of one
manufacturer which accounted for 100 per cent of the domestic production for
consumption in the Colombian market;
- as the company producing 62 per cent of the domestic production was vertically
integrated, it could have shifted production within the company;
- Colombia had stated that it was impossible to conform with the recommendation of
the TMB because its report gave no indication as to how the TMB thought the
measure should be applied.  Thailand was of the view that it was not the TMB’s
responsibility to tell Members how they should implement the ATC.
14. In starting its examination of the matter referred to it, the TMB noted that the communication
of Colombia providing the reasons for its inabilit y to conform with the recommendation of the TMB
had been submitted pursuant to Article 8.10.  The TMB recalled that, in accordance with Article 8.10,
it was required to give thorough consideration of the reasons given by the Member which considered
itself unable to conform with the TMB’s recomme ndation and issue any further recommendations it
considered appropriate forthwith.
15. Based on the communication of Colombia, as well as on the presentation made by it at the
meeting, the TMB noted that Colombia considered  itself unable to conform with the recommendation
of the TMB for the following main reasons:
- Colombia considered that the safeguard measures adopted had been in conformity
with the relevant provisions of Article 6, in particular paragraphs 1, 2, 3, 4, 7, 8, 12
and 16 thereof;
- in the view of Colombia, the conclusions of the TMB were based on interpretations of
the ATC that had no legal foundation under the provisions of Article 6;
- the report adopted by the TMB did not provide any indication of how, in the view of
the TMB, the safeguard measures should be applied in the particular case.
16. The TMB also noted that in explaining in detail the above reasons, Colombia had provided:
- a summary of the factual information it had already provided pursuant to Article 6.7,
including import trends, the serious damage claimed to the plain polyester filaments
industry, the causal link between increased imports and serious damage, and theG/TMB/R/51
Page 6
attribution of serious damage, on the basis of a substantial increase in imports at
prices lower than the national sales prices, to Korea and Thailand;
- detailed legal arguments regarding those conclusions and interpretations of the TMB
which, in the view of Colombia, had no legal foundation in the context of Article 6,
and without prejudice to these arguments, some additional information relating tocertain particular elements of the factual information referred to in Article 6.7.
TMB's observations with respect to the legal arguments raised by Colombia
17. Having carefully considered all the arguments presented to it, the TMB made the following
observations with respect to the legal arguments gi ven by Colombia for its inability to conform with
the TMB’s recommendation.
18. The TMB recalled that the communication of Colombia stated that the "TMB found that there
had been a substantial increase in imports and that trends in eight of the eleven variables referred to inArticle 6.3 appeared to indicate serious damage."  However, "[a]ccording to the TMB, there were
three reasons" for concluding that it was not possible to assess whether or not serious damage had
been caused to Colombia’s industry, namely:
(i) the information submitted in respect of damage did not cover 100 per cent of the
Colombian producers of plain polyester filaments;
(ii) the product subject to the measures did not represent all like and/or directly
competitive products under HS Chapter 54;  and
(iii) the information on damage did not concern an elapsed year.
In the view of Colombia, none of the three reasons had legal foundation under the provisions of
Article 6 (see also paragraph 8 above).
The TMB addressed these issues one by one.
(i) Definition of the term "domestic industry" producing plain polyester filaments
19. The TMB recalled that paragraph 18 of G/TMB/R/49 reads as follows:
"The TMB noted that the Colombian investigating authorities had determined that one
company, which had requested the application of the safeguard measure on imports,represented on average 62 per cent of the total domestic production of plain polyester
filaments and, therefore, could be considered to represent the domestic industry.  It followed
from this determination that Colombia had provided information regarding the economic
variables referred to in Article 6.3 which reflected data pertaining to that one company.  The
TMB observed in this respect that the ATC does not provide a definition of what constitutes
the domestic industry.  The TMB noted, however, that Colombia had failed to provide
information on a significant part of its domestic industry producing plain polyester filaments.
This lack of information brought about important uncertainties and, therefore, hampered theTMB’s ability to assess the situation of the Colombian industry producing plain polyester
filaments"  (emphasis added).G/TMB/R/51
Page 7
20. In this regard Colombia explained inter alia  that:
- during the examination of the measure, the Colombian delegation had provided
information to the effect that the domestic industry was traditionally composed of
three companies, one of which had filed for bankruptcy.  It was also pointed out that
one of the two other companies, the applicant company, accounted on average for62 per cent of the total output, and that the remaining 38 per cent was produced by a
single company which had expressed no interest in the case;
- it was clear from the statement of the TMB, referred to in paragraph 19 above, that
the Body considered that information on the domestic industry producing like and/or
directly competitive products should cover 100 per cent of the domestic producers of
such products;
- unlike the ATC, the Agreement on Safeguards and the Agreement on the
Implementation of Article VI of GATT 1994 defined the term "domestic industry",
making it clear that the term covered the domestic producers as well as those of them
whose collective output of the products "constitutes a major proportion of the total
domestic production of those products".  Therefore, while the evidence of damagehad to relate to the domestic industry, this did not necessarily mean the total numberof producers, but a major proportion of them;
- in light of the principles for the interpretation of treaties set out in the Vienna
Convention on the Law of Treaties and bearing in mind that the ATC does not define
the term "domestic industry", Colombia requested the TMB to reconsider its
interpretation of the term, since a literal definition would lead to an interpretationwhich was manifestly absurd and unreasonable, making Article 6 of the ATC
inoperative;
- without prejudice to the foregoing, Colombia had requested information from the
only other company concerned and, according to the indications received, the entire
output of plain polyester filaments of this company was for its own internalconsumption;  that also meant that the applicant accounted for 100 per cent of the
domestic output of that product produced for the domestic market.
21. In considering the legal arguments put forward by Colombia, the TMB made the following
observations:
- Colombia had rightly pointed out that during the examination of the measures
pursuant to Article 6.10 it had provided the factual information as indicated in the
first indent of paragraph 20 above.  Colombia had explained that the companyproducing on average 38 per cent of the total domestic output had not expressed an
interest in the investigation carried out by the Colombian authorities.  As a result no
information had been provided by Colombia in addition to that relating to the
applicant company whose output represented, on average, 62 per cent of the domestic
output.  This fact was reflected in the TMB’s observations that "…the ATC does notprovide a definition of what constitutes the domestic industry.  The TMB noted,
however that Colombia had failed to provide information on a significant part of its
domestic industry producing plain polyeste r filaments", bringing about important
uncertainties and, therefore, hampering the TMB’s ability to assess the situation of
that Colombian industry G/TMB/R/49, paragraph 18).  The TMB, bearing in mind inparticular the information that had been made available by Colombia pursuant to
Article 6.7, continued to be of the view that in the absence of any information on aG/TMB/R/51
Page 8
significant part of the domestic industry, it had not been possible to assess the state of
the industry producing plain polyester filaments, in particular the effect of increased
imports on the companies constituting the domestic industry producing the particular
product.  Therefore, it had been impossible to determine whether the difficulties
encountered by the company requesting the investigation could be attributed to apossible damage caused by the increased volume of total imports or to other factors
such as, for example, an important increase in the production of the other domestic
company producing plain polyester filaments,  resulting in an increased competition
between the domestic producers;
- the TMB could not agree with the contention of Colombia according to which it was
clear from the statement of the TMB, referred to in paragraph 19 above, that the Body
had considered that information on the domestic industry producing like and/ordirectly competitive products should cover 100 per cent of the domestic producers of
such products;
- the TMB observed that it had not provided any interpretation of the definition of the
term "domestic industry", as claimed by Colombia.  Similarly, the TMB had not
suggested that the information on the domestic industry should cover 100 per cent ofthe domestic producers of such products.  It was merely a factual statement applying
to the particular case that "Colombia had failed to provide information on a
significant part of its domestic industry producing plain polyester filaments".  With
respect to this statement, the TMB was of the view that it could not be questioned in
the particular case that 38 per cent of the overall domestic production constituted asignificant part of the domestic industry, whether this was the output of one single
company or of a number of producers.  The lack of interest in participating in the
investigation by one company could not be a justification for not providing any
information at all on that portion of the industry.  The TMB considered that it was the
responsibility of the authorities of a Member invoking the provisions of Article 6 todemonstrate to the Member(s) affected and to the TMB that increased imports caused
serious damage to the domestic industry.  Moreover, there was a range of possibilities
between providing no information at all and offering all the specific and relevant
information required by the relevant provisions of Article 6.  In the particular case,
the TMB was of the view that the Colombian authorities should have provided more
information on the rest of the domestic industry.  At least, it could have been
explained convincingly to the TMB
2, on the basis of the information that could have
been collected even if the company in ques tion was not interested in participating in
the investigation, as to why Colombia cons idered that information on 38 per cent of
the domestic production could be completely, or for the most part, dismissed, or why
Colombia believed that bringing the production of the given company into the scope
of the examination would not alter its conclusions based solely on the data providedby the applicant company representing on average 62 per cent of the domestic
production;
- in light of the above, the TMB reiterated that it had not provided any interpretation of
the definition of the term domestic industry. It could not, therefore, reconsider an
interpretation it had not made.
                                                     
2 This was not found to be the case in November 1998.G/TMB/R/51
Page 9
 (ii) Definition of the product to which the safeguard measure applies – Information on the
domestic industry producing like and/or directly competitive products.
22. The TMB recalled that, according to Colombia, another reason as to why the TMB had
concluded that it had not been possible to assess whether or not serious damage had been caused to
the domestic industry was that "the product subject to the measure [did] not represent all like and/ordirectly competitive products under Chapter 54".  To refute such a statement attributed to the TMB,
Colombia provided a detailed analysis in its communication, referring to a number of ATC
provisions, namely Articles 1.6, 1.7, 6.1, 6.14 and 6.16.
23. The TMB agreed with Colombia that the particular product (yarn of polyester filaments,
single, untwisted; tariff heading 54.02.43) was covered by the ATC and could be identified as the
product to which the proposed safeguard measure applied.  The TMB observed, however, that the
statement attributed to it, as indicated in paragraph 22 above, likely stemmed from amisunderstanding of what the TMB had stated during the examination of the measure pursuant to
Article 6.10.  The relevant part of G/TM B/R/49, paragraph 19, reads as follows:
"The TMB noted Colombia’s efforts to provide information related to plain polyester
filaments.   It observed, however, as was confirmed by Colombia, that the company regarding
which data had been provided, produced a number of products falling under HS 54.02,including plain polyester filaments.  The TMB observed in this respect that the ATC does not
provide a definition of what constitutes like and/or directly competitive products.  The TMB
noted, however, that in the case of plain polyester filaments, HS lines having descriptions
quite similar could be like and/or directly competitive products.  This created difficulties for
the TMB in assessing the matter."
Nothing in this statement suggested that the TMB had formulated any view on the selection by the
Colombian authorities of the product subject to the safeguard measures.  The observation made by the
TMB had focused on the information, or lack thereof, regarding what constituted the domestic
industry producing like and/or directly competitive products in the particular case.  This was also
reflected in paragraph 25 of G/TMB/R/49, which stated, inter alia , that "information to be provided
with respect to the Colombian industry would have to  be related to the industry producing like and/or
directly competitive products."  The TMB was of the view that these statements were in full
conformity with the essential requirements as defined by Article 6, in particular its paragraph 2, which
puts the burden on Colombia to demonstrate the existence of serious damage, or actual threat thereof,
caused to the domestic industry producing like and/or directly competitive products.  Therefore,
contrary to what had been suggested by Colombia, the TMB had expressed no view on the selection
of the product subject to the safeguard measures, but had made observations on the lack of appropriateinformation regarding what constituted the domestic industry producing like and/or directly
competitive products in the particular case.  Th e information provided by Colombia pursuant to
Article 6.7 remained silent in this regard.  If Colombia considered that the only like products, and/or
the products directly competitive with plain polyester filaments (tariff heading 54.02.43) were those
falling under the same 6-digit tariff heading, it was up to Colombia to explain convincingly whyHS lines having descriptions quite similar to the product subject to the safeguard measures should not
be considered as constituting like and/or directly competitive products (for the purpose of defining the
industry affected by imports). But without any information or in the absence of a convincing
explanation it is not possible to determine whether, to give an example, the decline of the domestic
production of yarn of polyester filaments, single, untwisted (tariff heading 54.02.43) was attributableto the damage caused by increased quantities of total imports, or to other factors which could be part
of a normal business decision, such as the shifting of the production of this product to another which
could constitute a like and/or directly competitive product to the plain polyester filaments.G/TMB/R/51
Page 10
24. In concluding the consideration of the particular reason raised by Colombia, the TMB
reiterated that nothing in G/TMB/R/49 had suggested  that the safeguard measures should be applied
to a range of products which would be wider than the product (plain polyester filaments) identified by
Colombia as subject to its measures taken pursuant to Article 6.
 (iii) Methodology of presenting information concerning serious damage
25. The TMB recalled that, in the view of Colombia, Article 6 does not lay down a single
methodology for the presentation of information regarding imports or the variables which determine
serious damage to the domestic industry. On this basis, Colombia argued that "the TMB omitted to
observe that […] the Colombian authorities presented information in three mutually supportive forms"
and that the TMB "concluded that the only valid method for assessing damage was 'comparison either
on a January/May basis or on a year-ending May basis'".  According to Colombia, "the first TMB
interpretation not only has no legal foundation but is also contrary to the rule laid down in Article 6.8to the effect that the information should refer to comparisons of a minimum of 12 months.  Bearing in
mind the indicative nature of Article 6, paragraph 7, Colombia [requested] the TMB to explain the
legal basis of this interpretation."
26. In considering these arguments the TMB agreed with Colombia that Article 6 does not lay
down a single methodology for the presentation of the information in question.  The TMB hadrecalled what were the time periods covered by the information presented by Colombia pursuant to
Article 6.7.  "[T]he technical report prepared by INCOMEX contained data regarding the performance
of total imports for the 12-month periods June to May of 1995-1996, 1996-1997 and 1997-1998, the
reference period referred to in Article 6.8. The data and information incorporated into the report
regarding the economic variables set out in Article 6.3 referred to calendar years;  for 1998, itincorporated actual data for the period January to May and provided estimates for the full calendar
year.  In addition, the report provided monthly averages regarding each variable for 1995, 1996, 1997
and January to May 1998" (G/TMB/R/49, paragraph 11).  The TMB could not agree with the
contention of Colombia that the TMB had omitted to observe that information had been presented in
three different forms.  The TMB had not qualified whether these forms were mutually supportive, asclaimed by Colombia, since the Body had not found that certain such forms were convincing.  This
had been reflected in the report adopted by the TMB: " [t]he TMB noted […] that it could not base its
assessment on estimates provided by Colombia for the year 1998;  and that the monthly averages
provided by Colombia could not be considered in most cases as providing reliable indications."(G/TMB/R/49, paragraph 21, emphasis added).  Therefore, the TMB had added that "[f]or data to be
meaningful Colombia would have had in the present case to have provided comparisons either on a
January/May basis or on a year-ending May basis" (same paragraph, emphasis added).  In the view of
the TMB, the above excerpts of its report made it clear that (i) the report faithfully reflected the forms
of information provided, including the respective time-frames; (ii) the TMB had not provided any
interpretation, but had expressed the view that in th e present case the presentation was such that it did
not allow a reliable comparison of the developments or changes in the relevant economic variables
referred to in Article 6.3.  The reference of the TMB to the January/May comparisons was not aninterpretation and was not contrary to any provision of Article 6, since the Body had not suggested
that this information should have been provided in  lieu of  the information submitted, but in addition
to what had been made available.  Without such additional information it was not possible for the
TMB to assess whether developments during the fi rst five months of 1998 could be an indication of
serious damage caused by imports or whether they constituted a seasonal phenomenon which hadcharacterised the domestic industry in the same period of the preceding years as well.  The TMB
recognized that Colombia had explained that the product subject to safeguard measures was not
subject to seasonal factors.  This statement, howev er, had not been substantiated by the information
presented pursuant to Article 6.7.G/TMB/R/51
Page 11
27. The TMB reiterated that it had not provided  any interpretation regarding how information
regarding imports or the variables used for dete rmining serious damage to the domestic industry
should be presented under Article 6.  Instead, it ha d expressed a view on the difficulties it was facing
because of the problems in comparing certain data provided by Colombia in the present case.
Additional information provided by Colombia in its communication under Article 8.10
28. The TMB noted that with reference to Article 6.10 and 8.3, certain elements of the detailed
factual information provided by Colombia pursuant to Article 6.7 had been revised and supplemented.
29. In particular, and without prejudice to the detailed legal arguments provided in this regard,
indications were given according to which the entire output of plain polyester filaments of the
company producing on average 38 per cent of the domestic production was used for its own
consumption.  As explained by Colombia, this meant that the applicant company accounted for
100 per cent of the domestic output for the domestic market.  Noting this information, the TMB alsonoted that the information had not been made available by Colombia neither at the time it had
requested consultations pursuant to Article 6.7, nor during the examination of the measures by the
TMB pursuant to Article 6.10.
30. Furthermore, the TMB noted that in its communication Colombia stated that in the case under
consideration, the investigation concerned a product as defined by the tariff classification and by thedevelopment of competition in that market segmen t.  In addition, in her presentation during the
meeting
3, the representative of Colombia provided additional technical explanation as to why the
products to be covered in order to apply the safeguard measures were to be limited to yarn of
polyester filaments (HS 54.02.43).
31. The TMB also noted that, as explained, in reply to the TMB’s observations and
notwithstanding the legal arguments made, Colombia had provided information on the domestic
industry and trends in damage indicators for 12-month periods.
32. The TMB observed that the communication subj ect to its consideration had been submitted
pursuant to Article 8.10, whereby the reasons for a Member’s inability to conform with the
recommendation of the TMB had to be provided to the TMB.  Also in light of the consideration it hadgiven to the legal reasons and arguments raised by Colombia, the TMB was of the view that it could
not be expected to conduct a de novo  examination of the determination of the serious damage caused
to the domestic producers of the like and/or directly competitive products.  The TMB reiterated its
earlier statement that "its review of the measures introduced by Colombia had to be based essentially
on the information made available by Colombia in accordance with Article 6.7 at the time the request
for consultations had been made" (G/TMB/R/49, paragraph 25).
Other observations
33. The TMB recalled that in addition to the reasons stated in paragraph 8 above, Colombia had
also stated that "it is impossible to conform with the recommendation of the TMB because the report
gives no indication of how the TMB thinks the measure should be applied.  For the ColombianGovernment to know how it can co mply with the TMB's recommendation, the latter must reply to the
two questions asked by Colombia at the meeting on this issue (definition of the term "domestic
industry" and tariff headings to be accumulated in order for a safeguard to cover heading 54.02.43),
which were omitted from the report."
                                                     
3 See paragraph 11 above.G/TMB/R/51
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34. With respect to this statement, the TMB made the following points:
- under Article 6.10, the TMB was expected to "promptly conduct an examination of
the matter, including the determination of serious damage, or actual threat thereof,
and its causes, and make appropriate recommendations to the Members concerned
within 30 days";
-  in the view of the TMB, when it found during its review of a safeguard measure that
it had not been demonstrated successfully that a product subject to an Article 6 action
was being imported into the concerned Member’s territory in such increased
quantities as to cause serious damage, or actual threat thereof, to its domestic industry
producing like and/or directly competitive products, the only possible
recommendation the TMB could make was that the safeguard measure should be
rescinded;
-  as to the issues related to "the definition of the term domestic industry and the tariff
headings to be accumulated in order for a safeguard to cover heading 54.02.43", the
TMB referred to the discussions it had had and the respective conclusions it had
reached, as reflected in previous parts of this report.
Conclusions
35. The TMB noted the statement of Colombia that  it had been unable to conform with the
recommendation of the TMB for the reasons detailed in its communication as well as in its oral
presentation.  Following thorough consideration of the reasons given by Colombia, the TMB
recommended that Colombia reconsider its position and that the measures introduced by Colombia on
the imports of plain polyester filaments from Korea and Thailand should be rescinded forthwith.
Communications received by the TMB
36. The TMB received a communication from Colombia according to which, following the
completion of consultations with the United States requested by Colombia on 17 August 1998
pursuant to Article 6.7 with a view to applying a transitional safeguard measure on imports of plain
polyester filaments (tariff heading 54.02.43),4 Colombia had found that no damage was attributable to
imports from the United  States.  The level of imports from the United states was, according to the
communication, lower than had originally been estimated, owing to an error in the customs
documentation prepared by the importer.  The TMB took note of this communication
(G/TMB/N/342).
37. The TMB received a communication from the United States, following the TMB's
consideration at its meeting of 13 and 14 July 1998 of the joint request by Hong Kong, China; India
and Pakistan, for the TMB "to review, in accordance with Article 8.1 and 2.21 of the Agreement onTextiles and Clothing, the implementation of the Stage 2 integration programme of the United States
of America with respect to the continuation of visa requirements for products included in this
programme".
5   In this communication, the United States forwarded, for the TMB's information, a US
Federal Register Notice "eliminating the visa requirements for various textile categories, consistent
with the TMB's decision on this matter".  The Memb ers involved had been informed of this fact by
the United States.  The TMB took note of this communication (G/TMB/N/343).
__________
                                                     
4 See G/TMB/R/49, paragraph 9.
5 For the TMB's consideration of this matter, see G/TMB/R/45, paragraphs 53 to 63.