WORLD TRADE
ORGANIZATIONG/SG/N/6/CHL/3/Suppl.1
G/SG/N/7/CHL/4/Suppl.1
G/SG/N/9/CHL/2/Suppl.1
G/SG/N/10/CHL/2/Suppl.3G/SG/N/11/CHL/2/Suppl.1
8 May 2001
(01-2349)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.1(a) OF THE AGREEMENT
ON SAFEGUARDS ON INITIATION OF INVESTIGATION
AND THE REASONS FOR IT
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD
MEASURE REFERRED TO IN ARTICLE 6
INFORMATION TO BE NOTIFIED TO THE COMMITTEE WHERE
A SAFEGUARD INVESTIGATION IS TERMINATED WITH
NO SAFEGUARD MEASURE IMPOSED
NOTIFICATION PURSUANT TO ARTICLE 12.1(c) OF THE
AGREEMENT ON SAFEGUARDS
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2,
OF THE AGREEMENT ON SAFEGUARDS
CHILE
Supplement
The following communication, dated 3 May 2001, has been received from the Permanent
Mission of Chile.
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Pursuant to the notification commitments in Article 12.1(c) and Article 9, footnote 2, of the
WTO Agreement on Safeguards, please be advised that Decree No. 124 ("exempt procedure") of the
Ministry of Finance extending the safeguard measure on imports of socks of synthetic fibres (tariff
heading 6115.9300) was published in the Official Journal on 30 April 2001.
The recommended measure is 6 per cent ad valorem , which represents a reduction of more
than 50 per cent in the existing measure (13 per cent ad valorem ), and the extension is for only
six months.  The indicators show that a major adjustment is under way in the domestic industry.
This notification is related to those in documents G/SG/N/6/CHL/3, G/SG/N/7/CHL/4 -
G/SG/N/9/CHL/2, G/SG/N/10/CHL/2 and Su ppl.1 and Suppl.2, and G/SG/N/11/CHL/1.
In its decision on extending the safeguard measure for a year, the Commission took account
of the following information:G/SG/N/6/CHL/3/S uppl.1, G/SG/N/7/CHL/4/Suppl.1,
G/SG/N/9/CHL/2/Suppl.1, G/ SG/N/10/CHL/2/Suppl.3,
G/SG/N/11/CHL/2/Suppl.1
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(a) It took into account that the adjustment by the domestic industry, the reduction of imports, the
rise in their prices and the trends in other economic variables justified recommending a
measure of a lesser amount and for a shorter period.
(b) The request for an extension was submitted on 23 March 2001 by the Instituto Textil de Chile ,
A.G., representing the firms Industria Textil Monarch S.A., León Heller S.A., Moletto Hnos.
S.A., Sintel Ltda. and Tejidos Caffarena S.A.  for imports of socks of synthetic fibres .  These
firms represent 80 per cent of total domestic production of socks of synthetic fibres .
(c) At its meeting No. 237 on 18 April 2001, the Commission granted the application for
consideration of  an extension of the measures, and a public notice of initiation was published
in the Official Journal on 19 April 2001.  The public hearing was held at the Commission's
meeting No. 238 on 23 April 2001, and was attended by the following interested parties:
(i) representatives of the Instituto Textil de Chile A.G. ;  (ii) representatives of the Embassy of
Ecuador in Chile;  and (iii) representatives of the firm Textiles El Rayo  of Ecuador.
(d) In deciding to extend the safeguard measures, the Commission evaluated the adjustment
process displayed by the sector, in which a rise in production and fall in employment may be
observed, representing an increase in productivity.
1. Provide evidence of serious injury or threat thereof caused by increase imports.
With regard to the information collected on injury and causality, the Commission took into
account the trends shown by the following indicators of domestic production, in particular for the
year 2000:
A decline of 8.1 per cent in the weighted domestic price in 2000 compared with 1999,
measured in Unidades de Fomento  ("development units").  Nevertheless, it is also noted that the level
of prices reported for the year 2000 for various firms is different that in previous years.
A rise of 6.3 per cent in output in 2000 compared with 1999, following the annual declines
recorded in 1999 and 1998 (-16.7 per cent and -2.6 per cent respectively).  However, this increase was
not sufficient to bring output levels above the annual volumes produced between 1996 and 1998.
The growth of 2.5 per cent in sales on the domestic market in the year 2000, compared with
the previous year.  However, despite this rise sales did not reach the level of 1997, after the decline in
1999 (-7.5 per cent).
A growth of 35 per cent in total exports in 2000 compared with 1999, a period in which there
was also a positive although smaller variation (15 per cent).  These figures differ from those submitted
by the applicants, which indicated a decline of 38 per cent in the year 2000.
A decline of 11 per cent in apparent consumption in 2000 compared with the previous year,
reaching a level of 628 tonnes.  This contrasts with the increase in this variable observed in 1999 and
1998 (18 per cent and 21 per cent, respectively).
A fall of 15 per cent in employment in 2000, a higher figure than in the previous year (-5 per
cent).
A reduction to 56 per cent in the share of imports in apparent consumption in 2000, down
from 62 per cent in 1999.  However, it was also borne in mind that in 1998 this figure was 45 per cent.G/SG/N/6/CHL/3/S uppl.1, G/SG/N/7/CHL/4/Suppl.1,
G/SG/N/9/CHL/2/Suppl.1, G/ SG/N/10/CHL/2/Suppl.3,
G/SG/N/11/CHL/2/Suppl.1
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The increase in the average import price of the product under investigation in the year 2000.
Nevertheless, it was also borne in mind that the average price in 2000 was lower than that recorded
between 1995 and 1997, and slightly lower than that recorded in 1998.
2. Provide information on whether there is an absolute increase in imports or an increase
in imports relative to domestic production.
Imports in 2000 totalled 354.2 tonnes, a decrease of 19.6 per cent compared with 1999, when
Chilean imports of this products reached an all-time peak (440.5 tonnes).  The Commission took into
account that a surcharge of 13 per cent was applied as of May 2000, and that the volume of imports in2000 was higher than in every year of the past decade with the exception of 1999.
The series of the moving averages of monthly imports shows a rising trend from early 1998 to
mid-2000;  from the second half of 2000 to the fi rst two months of this year it shows a decline.
However, it should be borne in mind that the types of products included in the heading under whichthese imports are classified varies very greatly, which affects the analysis of price trends.
In 2000, the imports/total domestic production ratio fell to 114.3 per cent from 151.2 per cent
in 1999, which in any case remains above the level of 77.8 per cent recorded in 1998.
3. Provide a precise description of the product involved.
Socks of synthetic fibres, tariff heading 6115.9300
4. Provide a precise description of the proposed measure.
An ad valorem  tariff surcharge of 6 per cent.
5. Provide the proposed date of introduction of the measure.
The measure has been in force since its publication in the Official Journal on 30 April 2001.
6. Provide the expected duration of the measure .
In Chile the duration of safeguard measures is one year, with the possibility of a single
extension for an additional year.  Nevertheless, and considering the level of adjustment observed in
the industry, the Commission recommended a durat ion of six months, i.e. until 31 October 2001.
7. For a measure with a duration of more than three years, provide the proposed date for
the review (under Article 7.4) to be held not later than the mid-term of the measure, if such a
date for the review has already been scheduled.
Not applicable.
8. If the expected duration is over one year, provide expected timetable for progressive
liberalization of the measure.
Not applicable.
9. If the measure has been extended, also pr ovide:  (i) evidence that the industry concerned
is adjusting and that the safeguard measure continues to be necessary to prevent or remedy
serious injury.G/SG/N/6/CHL/3/S uppl.1, G/SG/N/7/CHL/4/Suppl.1,
G/SG/N/9/CHL/2/Suppl.1, G/ SG/N/10/CHL/2/Suppl.3,
G/SG/N/11/CHL/2/Suppl.1
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The Commission took into account the rise in productivity for the product affected by the
safeguard measure.  This is reflected in a 6.3 per cent increase in output in the year 2000 together witha 15 per cent reduction in employment in the same year.
10. Exclusion of other WTO Members
Canada, Mexico and Peru will have to be excluded from the application of the measure by
virtue of the trade agreements signed with those countries.  In addition, the safeguard will not apply to
the developing country Members of the World Tr ade Organization (WTO) whose average individual
share during the most recent 24-month period, i.e. March 1999-February 2001, did not exceed 3 per
cent of total imports, and which collectively accounted for not more than 9 per cent of total imports,
in accordance with the provisions of Article 9.1 of the Agreement on Safeguards.G/SG/N/6/CHL/3/S uppl.1, G/SG/N/7/CHL/4/Suppl.1,
G/SG/N/9/CHL/2/Suppl.1, G/ SG/N/10/CHL/2/Suppl.3,
G/SG/N/11/CHL/2/Suppl.1
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MINISTRY OF FINANCE
EXTENDING THE SAFEGUARD ESTABLISHED BY DECREE NO. 294,
"EXEMPT PROCEDURE", OF 2000
Number 124, "exempt procedure" – Santiago, 25 April 2001.  Having regard to the official
communication No. CD 71 of the President of the Na tional Commission responsible for investigating
the existence of distortions in the price of imported goods and the facts therefore;  and
Taking into account the provisions of Article 9 of Law 18,525;  Supreme Decree No. 909 of
the Ministry of Finance;  Ministry of Finance Decree No. 294 of 2000 published in the Official
Journal on 8 November 2000;  Supreme Decree No. 19  of 9 February 2001 of the Secretariat General
of the Presidency;  and Resolution No. 520 of 1996 of the National Audit Office;
I hereby decree:
1. The safeguard measure established by Ministry of Finance Decree No. 294 of 2000, published
in the Official Journal of 8 November 2000, is hereby extended with a rate of 6 per cent.
2. This extension shall have effect until 31 October 2001.3. The safeguard measure that is being extended shall not apply to imports of the products
originating in Canada, Mexico and Peru by virtue of the trade agreements signed with those countries,
nor to developing country Members of the World Trade Organization (WTO) whose average
individual share during the most recent 24-mont h period, i.e. March 1999 – February 2001, did not
exceed 3 per cent of total imports, and which collectively accounted for not more than 9 per cent of
total imports of the product concerned, in accordance with the provisions of Article 9.1 of the WTO
Agreement on Safeguards.
4. The National Customs Service shall be responsible for adopting the measures to ensure the
proper application of the safeguard measure extended by this Decree.
For registration, communication and publication.  By order of H.E. the President of the
Republic, Nicolás Eyzaguirre Guzmán, Minister for Finance.
Transcribed for your information, Maria Eugenia Wagner Brizzi, Under-Secretary for
Finance.
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