. /.WORLD TRADE
ORGANIZATIONG/SG/Q2/ECU/4
25 April 2003
(03-2217)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.1(a) OF THE AGREEMENT ON
SAFEGUARDS ON INITIATION OF AN INVESTIGATION
AND THE REASONS FOR IT
NOTIFICATION UNDER ARTICLE 12.1(c)
OF THE AGREEMENT ON SAFEGUARDS
Questions Posed by CHILE Regarding the Notification of ECUADOR1
The following communication, dated 24 April 2003, has been received from the Permanent
Mission of Chile.
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I am attaching herewith Chile's questions regarding the notifications of Ecuador on the
initiation of an investigation and the adoption of a provisional safeguard measure on fibreboard.These notifications were circulated in doc uments G/SG/N/6/ECU/3 and G/SG/N/10/ECU/2.
The following questions refer to Ecuador's notifications under Article 12.1, subparagraphs (a)
and (c) of the Agreement on Safeguards (initiation of an investigation and adoption of a provisional
measure).
1. The notification indicates that the measure applies to "medium-density fibreboard (MDF),
classified under NANDINA heading 4411".  To how many by-products in the NANDINA
heading 4411 does the safeguard measure apply?
2. What products does the enterprise requesting the investigation produce other than fibreboard
(MDF)?
3. Do the products of the enterprise requestin g the investigation correspond to their own
production or production by third parties?
4. What, in Ecuador's opinion, are the unforeseen circumstances that explain an increase in
imports of fibreboard and justify the adoption of a safeguard measure?
5. In the notification on initiation of an investigation, it is indicated that the evidence "on the
basis of which the investigation was initiated" are imports from 1999-2001, which showed a
sustained and steady increase of 327.2 per cent, and a downward trend in the profits of thedomestic industry.  Is this sufficient evidence to initiate a safeguards investigation?
                                                     
1 G/SG/N/6/ECU/3 and G/SG/N/10/ECU/2.G/SG/Q2/ECU/4
Page 2
6. Why does Ecuador consider that the increase in imports of fibreboard (MDF) is the
substantial cause of the serious injury – replacement of the domestic product on local markets
– suffered by Ecuador's industry?
7. Although there has obviously been an increase in imports, to what extent does this respond to
an increase in the exchange rate?  In other wo rds, has there been a similar increase in imports
by other sectors of Ecuador's economy?
8. When notifying the initiation of the invest igation, Ecuador submitted figures for the year
2001.  In the notification on the provisional measure, for some of the factors the figures are
those for the year 2002.  The figures for 2002 show that there has been a decrease in the
growth rate for imports (although in absolu te terms they continue to increase) and a
substantial reduction of losses.  What period did the investigating authority take into account
for the purposes of the investigation?
9. The safeguard applied by Ecuador is provisional and, according to Article 6 of the Agreement
on Safeguards, a safeguard measure may be imposed when there are critical circumstanceswhere delay would cause damage which it would be difficult to repair.  In this regard, could
Ecuador explain how critical the situation is in the domestic industry, in particular, why does
it run the risk of damage which it would be difficult to repair?
10. In view of the fact that the enterprise requesting the measure accounts for 100  per cent of the
domestic industry, is there any adjustment plan for this industry to improve its
competitiveness when the safeguard measure no longer applies?
11. Has Ecuador previously applied anti-dum ping or countervailing duties on imports of
fibreboard (MDF) from any other exporting country?  Are there any substitute products forfibreboard (MDF)?  If so, has Ecuador applied anti-dumping or countervailing duties to those
products?
12. Does the safeguard measure apply to Andean countries?  Are they included in the
investigation?
13. What is the current state of the investigations?
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