./.WORLD TRADE
ORGANIZATIONG/SG/37/Suppl.3
16 August 2001
(01-4032)
Committee on Safeguards Original:  English
REQUEST FOR CONSULTATIONS FROM THE EUROPEAN COMMUNITIES
UNDER ARTICLE 12.3 OF THE AGREEMENT ON SAFEGUARDS
Imposition of a Safeguard Measure by Argentina
on Imports of Peaches
Supplement
The following communication, dated 14 August 2001, has been received from the Permanent
Delegation of the European Commission.
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On 15 January 2001 (Document no. G/SG/N/6/ARG /4, G/SG/N/7/A RG/2), Argentina notified
to the WTO Committee on Safeguards under Articles 12.1(a) and 12.4 of the Agreement on
Safeguards (“SA”), the initiation of a safeguard investigation on, and the application of a provisionalsafeguard measure to, imports of peaches preserved in water containing added sweetening matter,
including syrup, preserved in any other form or in water (“canned peaches”).
On 19 January 2001, Argentina (Doc ument no.G/SG/N/6/ARG/4/Suppl.1-
G/SG/N/7/ARG /2/Suppl.1) notified, before imposing a provisional measure, its willingness to hold
consultations with Members having a substantial interest as exporters, in conformity with Article 12.4
SA.  The provisional measure imposed, consisting of an ad valorem  tariff surcharge on imports of
canned peaches of US$0.5 per kg. net, was notified to the WTO on 23 January 2001 (Document no.
G/SG/N/6/ARG /4/Suppl.2-G/SG/N/ 7/ARG/2/Suppl.2).
On 17 July 2001, Argentina (Documen t no. G/SG/N/8 /ARG/4-G/SG/N/10/ARG/3-
G/SG/N/11/ARG/3) notified the WTO Committee on Safeguards under Articles 12.1 (b) and (c),  of afinding of serious injury and the decision to apply a definitive safeguard measure, and informed all the
WTO Members having a substantial interest as exporters of the product of its willingness to hold
consultations, in conformity with Article 12.3 SA.
The EC has serious concerns about this case.  The facts as set out in the notification do not
appear to justify the finding of serious injury.  Nor do they appear complete or objectively analysed.
For example, on domestic production in Argentina, the notification gives a picture of falling
production while in fact production in Argentina has increased substantially since 1995 and is
scheduled to increase further in future with he avy investments already in place.  This point is
important because these increased investments could well have contributed to the current state of theindustry, yet this is not referred to directly in the notification.
Moreover, though general reference is made in the notification to the abnormal situation in
1997 and 1998 owing to severe climatic conditions which affected world production, no account is
taken of this fact when analysing each individual factors such as imports and prices and the fact thatG/SG/37/Suppl.3
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in historical terms (and ignoring 1997 and 1998) the situation in 1999 would not indicate serious
injury.
This measure also has to be examined in relation to other forms of protection which Argentina
has in place on imports of this product.  In fact, this measure which is equivalent to a duty ofapproximately 85 per cent ad valorem, is only one of three forms of protection for canned peaches, the
others being a countervailing duty of 10.5 per cent and a customs tariff which was recently raised to
35 per cent. In fact, these measures must be considered as addressing the same alleged injury and as
such some of them appear to be incompatible with Argentina’s WTO obligations.
The European Commission is seriously concerned about the consistency of the definitive
safeguard measure with Article XIX GATT and the SA.  In particular, on the basis of the availableinformation, the European Commission has serious do ubts that the requirements laid down in the
Agreement on Safeguards for the adoption of a safeguard measure have been satisfied in this case.
The European Commission takes note of Argentina’s willingness to hold consultations under
Article 12.3 SA, and propose that these consultations be held without delay at a mutually agreed dateand place.  However, the Commission notes that such consultations should, according to Article 12.3,
have been offered by Argentina prior to the decision to impose the definitive safeguard measures.
Argentina did not do this.
The European Commission reserves all its rights under the SA, in particular Article 14, as
well as under the Dispute Settlement Understanding.
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