WORLD TRADE
ORGANIZATIONWT/DS238/2
6 December 2001
(01-6259)
Original:  Spanish
ARGENTINA – DEFINITIVE SAFEGUARD MEASURE
ON IMPORTS OF PRESERVED PEACHES
Request for the Establishment of a Panel by Chile
The following communication, dated 6 December 2001, from the Permanent Mission of Chile
to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.
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I am writing to request the establishment of a panel, in accordance with Articles 4 and 6 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), concerning the
definitive safeguard measure applied by the Gove rnment of Argentina on imports of preserved
peaches.
On 7 August 2001, Resolution No. 348/2001 of the Ministry of the Economy was published
in the Official Bulletin of Argentina, imposing a definitive safeguard measure in the form of
minimum specific duties of US$0.50 per kg. on imports of peaches preserved in water containing
added sweetening matter, including syrup, preserve d in any other form or  in water (MERCOSUR
tariff headings 2008.70.10 and 2008.70.90).
On 14 September 2001, Chile, pursuant to Article XXIII:1 of the General Agreement on
Tariffs and Trade (GATT) 1994, Article 4 of the DSU and Article 14 of the Agreement on Safeguards
(SA), requested consultations with Argentina with a view to reaching a solution to this matter.  That
request was circulated in document WT/DS238 /1, G/L/479 and G/SG/D19/1.  The consultations,
which were held in Geneva on 2 November last, enabled the parties to gain a better understanding ofeach other's positions but unfortunately did not give rise to a mutually satisfactory solution.
The prior consultations with Argentina, at Chile's request, also failed to yield any positive
results.  Specifically, and pursuant to Article 12.4 of the SA, these were the consultations held when
Argentina made the notification required by that Article before taking a provisional safeguardmeasure and upon initiating an investigation with a view to applying a safeguard measure on the
products concerned.  This was also the case for the consultations conducted under Article 12.3 of the
SA, following Argentina's notification of the find ing of serious injury and decision to apply a
definitive safeguard measure.
The Chilean Government considers this definitive safeguard measure imposed on preserved
peaches to be inconsistent with Article XIX:1(a) of the GATT 1994 and with Articles 2, 3, 4, 5 and 12
of the SA.  Indeed:WT/DS238/2
Page 2
1. Neither Record No. 781 of the National Foreign Trade Commission (CNCE) nor the
Technical Report prior to the final determination (ITDF) indicate that the
investigating authority or the CNCE have found and demonstrated, as an issue of fact
and law prior to taking safeguard action, that the condition of "unforeseen
developments", as laid down in Article XIX:1(a) of the GATT 1994, has beenfulfilled.  Nor is there any finding or evidence of an increase, whether absolute or
relative, in imports threatening to cause or causing serious injury to the domestic
industry that produces like or directly competitive products.  This is in breach of and
infringes the aforementioned Article XIX:1(a) of the GATT 1994 and Article 2.1 of
the SA.
2. Likewise, it does not emerge from the report of the competent authorities, namely
Record No. 781 of the CNCE and the ITDF , that the CNCE or the investigating
authority have made adequate and sufficient findings on all the pertinent issues of fact
and law, which, pursuant to Article XIX of the GATT 1994 and the SA, must be
investigated, analysed, established, found and verified, as stipulated in the final part
of Article 3 of the Agreement.
3. Similarly, as pointed out in Record No. 781 of the CNCE, the position of the industry
cannot be deemed to be suffering serious injury within the meaning of Article 4.1(a)
of the SA.  More serious still, and contrary to the provisions of Article 4.1(b) of the
Agreement, neither Record No. 781 nor the ITDF contains any factual evidence of analleged increase, whether absolute or relative, in imports threatening to cause serious
injury to the domestic industry that produces like or directly competitive products, in
terms which show that such injury is clearly imminent – i.e. highly likely to occur in
the near future.
4. Neither Record No. 781 nor the ITDF contains any sound argument based on
"objective evidence" of a possible causal link between alleged increased imports and
alleged injury or threat of injury.  On the contrary, the Record establishes the
existence of objective and quantifiable factors other than alleged increased imports,
which might be responsible for the loss in market share claimed to be suffered by the
domestic industry.  However, there is no adequate or sufficient analysis of the impact
of those other factors in giving rise to alleged serious injury or threat of seriousinjury.  Without conducting the prior causal analysis, the Argentine investigating
authority and the CNCE attribute all the alleged injury or threat of injury to an alleged
increase in imports.  This is inconsistent with Article 4.2(a) and (b) of the SA.
5. The level and formulation of the definitive safeguard measure exceed the extent
necessary to prevent or remedy the alleged serious injury or threat of serious injury
and to facilitate adjustment, as prescribed by Article 5.1 of the SA.  The specific duty
of US$0.50 per kg., which, in ad valorem  terms and in relation to Chilean production,
represents nearly an extra 70 per cent on the customs duties applicable to Chile
(19.6 per cent) is unreasonable, prohibitive and equivalent to an import prohibition, asdemonstrated by the fact that, since the entry into force of the safeguard measure,
Argentina has failed to register any imports of canned peaches from Chile.  In spite of
this prohibitive effect, at the time of adopting its decision the CNCE offered no
explanation whatsoever regarding the way in which the measure had been calculated
or its amount.WT/DS238/2
Page 3
6. Contrary to the provisions of Article 12.2 of the SA, when Argentina notified the
Committee on Safeguards of its finding of alleged serious injury or alleged threat of
serious injury as a result of alleged increased imports, it failed to provide the
Committee with evidence substantiating that finding.
Accordingly, the Republic of Chile requests the establishment of a panel with the standard
terms of reference set out in Article 7 of the DSU.  To that end, I should be grateful if this request
could be included in the agenda for the next meeting of the Dispute Settlement Body on
18 December 2001.
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