WORLD TRADE  
ORGANIZATION  G/SG/N/8/EEC/2 
G/SG/N/10/EEC/2 
G/SG/N/11/EEC/2/Suppl.1 
16 March 2004 
 (04-1160) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE  
AGREEMENT ON SAFEGUARDS ON FINDING 
A SERIOUS INJURY OR THREAT THEREOF  
CAUSED BY INCREASED IMPORTS 
 
NOTIFICATION PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9,  
FOOTNOTE 2, OF THE AGREEMENT ON SAFEGUARDS 
 
EUROPEAN COMMUNITIES 
 
(Mandarins
) 
  
 The following communication, dated 12 March 2004, is being circulated at the request of the 
Delegation of the European Commission.  
_______________ 
  
 I enclose  a notification  of findings of serious injury or threat thereof caused by increased 
imports and of proposed safeguard measures against imports of certain prepared or preserved citrus 
fruits (namely mandarins, etc.). G/SG/N/8/EEC/2 
G/SG/N/10/EEC/2 G/SG/N/11/EEC/2/Suppl.1 
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  In light of the agreed format for notificati ons (G/SG/W/1, 23 February 1995), the European 
Communities provides notification to the Committee on Safeguards of findings of serious injury or 
threat thereof caused by increased imports and notification of proposed safeguard measures. 
 
 On 11 July 2003, the European Communities in itiated an investigation relating to serious 
injury or threat thereof to the Community producers of products like or directly competing with the 
imported product. Following a preliminary inve stigation, the European Communities imposed 
provisional safeguard measures against imports of cer tain prepared or preserved citrus fruits (namely 
mandarins, etc.) under Regulation (EC)  No 1964/2003 of 7 November 2003. 
  The initiation of the investigation, the imposition of provisional measures as well as the 
decision not to apply those provisional measures to certain products orig inating in developing 
countries have been notified to the Committee on Safeguards (see WTO documents G/SG/N/7/EEC/2, 
G/SG/N/11/EEC/2 and G/SG/N/6/EEC/2) 
  Consistent with Article 12.3 of the Agreement on Safeguards , the European Communities is 
prepared to consult with those Members having a substantial interest as exporters of the product 
concerned, with a view to, inter alia , reviewing the information provided in this notification, 
exchanging views on the measure proposed, and reach ing an understanding on ways to achieve the 
objective set out in Article 8.1 of the Agreement .    
  The European Communities invites those Members to provide a direct contact point so that 
the European Communities may inform them with out delay of any develo pments regarding the 
subject of any consultations. 
 
1. Provide evidence of serious injury or  threat thereof caused by increased imports 
 Evidence of serious injury 
 
 In order to make a definitive determination as to whether there is serious injury to the 
Community producers of the like product, i.e. a significant overall impairment in the position of the 
Community producers, the European Communities finalised its evaluation of all relevant factors of an 
objective and quantifiable nature having a bearing on the situation of the Community producers.  In particular, for the product concerned, the Eur opean Communities evaluated the development of 
production capacity, production, capacity utilisation,  employment, productivity, cash flow, return on 
capital employed, captive use, stocks, consumption,  sales, market share, price, undercutting and 
profitability for the seasons 1998/99 to 2002/03.  
- Analysis of the Community Producers 
1. Consumption 
 1998/99 1999/00 2000/01 2001/02 2002/03
Consumption (t) 80,065 74,056 65,676 80,960 72,843
 
 Consumption of the product concerned in the Community was established on the basis of total 
sales made by the Community producers and other EU producers and total imports of the product 
concerned into the Community as reported by Eurostat. 
 
 Between 1998/99 and 2000/01, consumption in the Community declined by 18% from 80,065 
tonnes to 65,676 tonnes. Between 2000/01 and 2001/02, it grew by 23% to reach its highest level for  G/SG/N/8/EEC/2 
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 the period under examination (8 0,960 tonnes). In the most recent season (2002/03) there was a 10% 
decline in consumption compared to 2001/02, with c onsumption closer to its average for the period 
under consideration (74,720 tonnes per annum). 
 
2. Production Capacity and Capacity utilisation  
 1998/99 1999/00 2000/01 2001/02 2002/03
Capacity (t)  126,760 129,260 129,260 129,260 129,260
Capacity Utilisation 
(%) 65% 59% 47% 47% 31%
 
 The European Communities has analysed the Community prod ucers’ production capacity on 
the basis of  full season  production capacities (1 October to 30 Se ptember in the following year).  The 
like product is produced from November until February  using production facilities some of which can 
be used for processing other fruit and vegetables during the rest of the year.  However, from 
November until February there are no other fruits or  vegetables available for processing in the regions 
concerned (Valencia and Murcia, Spain).    The investigation confirmed that overall estim ated theoretical production capacity remained 
stable throughout the period of the investigation with only one small increase (of 2%) recorded between 1998/99 and 1999/00. 
 
 Capacity utilisation fell between 1998/99 and 199 9/00 from 65% to 59%. This fall is partially 
explained by the 2% increase in capacity in that year , but the greater part is explained by a fall in 
production of 7.5% from 81,869 tonne s to 75,767 tonnes. Capacity utilisation fell by a further 12 
percentage points in 2000/01 (to 47%). It remained stab le in the following year but then fell to 31% (a 
fall of 16 percentage points) in 2002/03. The falls  in capacity utilisation, from 1999/2000 onwards 
reflect the falls in production in the same periods.   3. Total Community Production  
 1998/99 1999/00 2000/01 2001/02 2002/03
Production (t) 81,869 75,767 60,462 60,329 39,600
 
 Total Community production fell between 1998/ 99 and 2001/02 from 81,869 tonnes to 60,329 
tonnes.  Thereafter, production fell by a further 35 % in the season 2002/03 to its lowest level in the 
period under examination.  
 
 The trend in production is confirmed by th e most recently available data(2003/04) which 
indicate a further fall in production to 26,165 to nnes (partial data). The Community producers cannot 
invest and commit to produce unless they have adva nce orders from their major customers. However, 
they are unable to obtain such orders as they cannot compete on price.  
 
4. Employment  
 1998/99 1999/00 2000/01 2001/02 2002/03
Employment 
(end of period) 2502 2441 2462 2419 2343
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  Employment in relation to the product concerned fell in 1999/00. It then recovered slightly in 
2000/01 before falling further in 2001/02 and 2002/03. In  addition to the fall in employment recorded 
by the Community producers, there was also a reduction in employment in mandarin canning in the 
Community during the 5 year period as some producers involved in canning the product concerned in 
the Community ceased this activity befo re the opening of the safeguard i nvestigation. It is to be noted 
that the large majority of the workforce is represen ted by seasonal workers. For this reason, this table 
should be considered in conjunction with the following table on hours worked.  
5. Hours worked and Productivity 
 
 1998/99 1999/00 2000/01 2001/02 2002/03
Hours worked 944,000 985,000 823,000 861,000 625,000
Productivity 
(hours 15,9 16,8 15,6 16,8 17,7
 
 A more accurate picture of the impact on employment by the Community producers is seen 
from hours worked, which includes the employment  of seasonal workers.  The number of hours 
worked also provides a more accura te basis for measuring productivity than the number of employees.  
In general, a steady decline in the number of ho urs worked can be observed, with a fall from 861,000 
to 625,000, a fall of 27% in the most recent pe riod. Productivity fell slightly between 1998/99 and 
2001/02 from 15,9 hours worked per tonne produced to  16,8 hours worked, and further declined to 
17,7 hours in the last season (2002/03). It is to be  noted that variances in productivity are mainly due 
to the yield of the fresh product.  6. Cash Flow  and Return on Capital Employed (ROCE)  
Financial year 1998 1999 2000 2001 2002
Cash Flow 
(index:1999=10
0)2 100 80 116 -4
ROCE 15.1 18.9 9.3 9.8 8.1
 
 Cash flow and ROCE could only be examined  at the level of the co-operating companies 
which produced the product concerned (rather than in relation to the product concerned) and are 
shown in calendar years. These indicators are therefore less meaningful than the other indicators. Nevertheless, it can be seen that cash flow and RO CE were substantially reduced in the most recent 
period.  
7 Sales volume 
 
 1998/99 1999/00 2000/01 2001/02 2002/03
Sales volume in the 
Community (t) 63,718 56,483 45,341 36,156 28,030 
 
 Sales in the Community of the like product by the Community producers fell from 63,718 tonnes to 45,341 tonnes between 1998/99 and 2000/01, reflecting the fall in consumption and the 
increase in imports in that period. However, d espite increased consumption in the following year, 
sales continued to fall between 2000/01 and 2001/ 02 (by 20%) reaching 36,156 tonnes, as imports  G/SG/N/8/EEC/2 
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 more than doubled to 44,804 tonnes. This reflects the increasing dominance of imports in the market. 
In the most recent period, sales have continue d to fall to 28,030 tonnes in 2002/03, the lowest 
historical level, representing a decrease of 56% in 4 years. 
 
8. Market share  
 1998/99 1999/00 2000/01 2001/02 2002/03
Market share (%) 79% 76% 69% 44% 38% 
 
 The Community producers’ market share fell from 79% to 69% between 1998/99 and 2000/01, to 44% in 2001/02, and to  38% in 2002/03. The substantial falls in the last two seasons 
demonstrate the increasing market penetration of imports in those periods, which occurred despite the fact that Community producers lowered thei r prices by 17% between 2000/01 and 2001/02 and a 
further 6% in 2002/03.  
  The combination of the fall in prices and loss of market share to imports occurred at the same 
time as a significant fall in the profitability of the Community producers (discussed below).  
 9. Price of the like product and undercutting 
 
1998/99 1999/00 2000/01 2001/02 2002/03
Unit prices of Community sales 
(€/tonne) 826 790 925 827 781 
Unit prices of Chinese exports 
plus customs duty(€/tonne)* 732 773 910 790 691 
Undercutting (€/tonne) 94 17 15 37 90 
Undercutting (%) 11% 2% 2% 4% 12% 
 * source: Eurostat 
  The average price of the like product fe ll between 1998/99 and 1999/ 00 but recovered in 
2000/01, increasing by 17% to €925 per tonne. The average price again fell to €827 per tonne in 
2001/02, and further declined to €781 per tonne in 2002/03.   In order to determine the level of underc utting, price information was examined for 
comparable time periods, at the same level of trade and for sales to similar customers. Based on a 
comparison of average ex-works prices charged by the Community producers and by exporting 
producers to the Community importers (CIF EU border including customs duty), domestic prices were undercut throughout the 5 periods ex amined by between 2 and 12%. 
 10. Profitability  
1998/99 1999/00 2000/01 2001/02 2002/03
Net profit/loss on 
Community sales (%) 4.0% 0.5% 6.8% -1.7% -4.3%
 
 The profitability of the Community producers’  sales in the Community varied significantly in 
the five-year period under consideration. The low est profitability was recorded in 2001/02 and in 
2002/03, and the highest in 2000/01. In 2002/03, as imports increased to their highest level in the 
period under consideration, the average price of im ports fell to €605 per tonne and the average price 
of the Community product fell to €781 per tonne. Th is fall in prices taken together with the fall in G/SG/N/8/EEC/2 
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 sales volume occurred at the same time as the Commu nity producers’ profitability fell from 6.8% to (-
1.7%) in 2001/02 and this trend continued into a worse loss making situation (-4,3%) in 2002/03.  
 Underselling reflects the extent to which the price of the imported product is lower than the 
price which the Community producers could be expected  to achieve in a non-injurious situation.  The 
level of underselling was calculated on the basis of the weighted average non injurious price per tonne 
of the Community product.  This price was calculat ed by taking the respective cost of production for 
the Community product (adjusted to take account of  transport costs to ensure a proper comparison 
with imports delivered to the main geographical area for consumption) to which was added a profit 
margin of 6.8%.  This profit margin was consid ered reasonable as it refers to profits of the 
Community producers in a normal trading situation una ffected by a sudden sharp rise in imports.  This 
non injurious price was compared with the weighted average price per tonne of the imported product concerned during the period April to December 2003,  at the same level of trade, CIF Community 
border, customs duty, post importation costs and with importers’ profit added.  The difference 
between these two prices was expressed as a percentage of the CIF/Community border price of the imported product, and resulted in underselling of 57.9%. 
 11. Stocks  
 1998/99 1999/00 2000/01 2001/02 2002/03
Closing stock (t) 13,016 10,628 11,205 17,279 11,069
 
 Stock levels fell between 1998/99 and 2000/01, but then increased significantly in 2001/02 
before falling again in 2002/03 to their level in  2000/01, as the Community producers reduced their 
high stock levels by cutting pr oduction. The increase in stock be tween 2000/01 and 2001/02 coincided 
with a fall in the Community producers’ sales volum e in the Community of 20%, and was found to be 
chiefly attributable to that fall in sales volume.  
12. Conclusion 
 The data shows that whilst production capacity increased slightly at the beginning of the 
period under consideration, there is negative de velopment for capacity utilisation, production, 
employment, productivity, cash flow and ROCE. Ov erall, before the background of consumption 
which declined for two years and recovered to close to its previous level before declining again in 
2002/03, the data shows negative devel opments for sales, market share, prices and profitability in both 
2001/02 and 2002/03. There was an increase in stocks in 2001/02, but these returned to their previous 
level in 2002/03.  
 In particular, the European Communities notes th at whilst, in 2001/02, as imports more than 
doubled (44,804 tonnes), the Community producers' sales volume in the Community reached a low 
level (36,156 tonnes) and the Community producer s’ profitability fell to (-1.7%). This occurred 
against an increase in consumption in that year. Ag ainst such a background, whilst imports could have 
been expected to follow the consumption level and prices could have been expected to firm, imports 
more than doubled and the price of both the imported product and that produced by the Community 
producers fell.  
 Further, in 2002/03, although consumption fell by 10% there was no fall in the level of 
imports and the main impact of the fall in c onsumption was borne by the Community producers 
whose sales fell by 22% whilst their prices fell by 6% . This together with a stock overhang from the 
previous year necessitated a significant reduction in production by the Community producers.  
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  This combination of factors is reflected in the economic indicators pertaining to the 
Community producers.  The Community producers have lost market share, which reached its lowest 
level in 2002/3.  They have also suffered a reduc tion in sales in absolute terms in both 2001/02 and 
2002/03.  In consequence, they have been forced to reduce production in each of these years.  As a 
result, their capacity utilisation has fallen in  both 2001/02 and in 2002/03.  Productivity and 
employment have also fallen in both 2001/02 and in  2002/03.  The overall effect of the falls in 
Community sales volume and prices is a reduction in the Community producers’ sales revenue by 29% from €41.9m in 2000/01 to €29.9m in 2001/02 and €21.9m in 2002/03.  At the same time, the 
profitability of the Community producers fell fr om 6.8% to (-1.7%) in 2001/02 and (-4.3%) in 
2002/03. 
 Taking account of all of these factors the European Communities concludes that the 
Community producers have suffered serious injury.  Causation analysis 
 
 In order to examine the existence of a causal  link between increased imports and the serious 
injury, and in order to ensure that  injury caused by other factors is not attributed to increased imports, 
the European Communities has proceeded as follows: 
 
– The injurious effects of factors consid ered to be causing injury have been 
distinguished from each other, 
 – These injurious effects have been attribut ed to the factors which are causing them, 
and, 
 
– After having attributed injury to all causal  factors present, the European Communities 
has determined whether increased imports are a “genuine and substantial” cause of serious injury. 
 
1. Analysis of Causation Factors 
 
- Effect of increased imports   The market for canned mandarins is transparen t as regards sources of supply and customers.  
As canned mandarins are essentially a commodity pr oduct, the product concer ned and the like product 
compete mainly on price. 
  In the period 2000/01 to 2002/03, the market share of imports grew from 31% to 56% and then 62%, whilst the market share of the Community producers fell from 69% to 44% and then 38%. Over the same period, imports have grown from 34% to 74% and on to 113% of Community production indicating that imports have also increa sed relative to production, at the expense of the 
Community producers. 
  As to prices, between 2000/01 and 2002/03, the Eurostat average unit price of the imported product on the Community market fell from €792 to €691 and then to €605 per tonne.  Over the same period, the average unit price of the Community product fell from €925 to €827 and then €781 per 
tonne.  The effect of the fall in the average unit price of the like product alone on the Community 
producers’ revenue from sales in the Community w ould have been a reduction of 11% (€4.4m) in 
2001/02, and a further reduction of 6% (€1.7m) in 2002/03. Taking acc ount of the simultaneous fall in 
sales volume the actual fall in sales revenue in the Community was €12m in 2001/02 and of €8m in G/SG/N/8/EEC/2 
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 2002/03.  These reductions in sales revenues (together with increased costs) cr eated a significant fall 
in profitability and the Community producers showed  a loss of 1.7% in 2001/02 and of 4,3% in 
2002/03. 
 
 For the foregoing reasons, th e European Communities conclud es that there is a correlation 
between the increase in imports at low prices and the serious injury suffered by the Community 
producers, and that the increase in imports has ha d injurious effects in particular in terms of 
downward pressure on prices and a re duction in the volume sold by the Community producers on the 
Community market. 
 - Effect of changes in consumption   The European Communities has ca rried out a full examination of the injurious effects of the 
fall in consumption between 1998/99 and 2000/01. That fall has to be considered in the context of the 
overall trend during the 5 year period under inves tigation. Consumption decreased from 80,065 tonnes 
in 1998/99 to 74,056 tonnes in 1999/00 and 65,676 tonnes in 2000/01, but then grew by 15,284 tonnes to 80,960 tonnes in 2001/02, before falling back to 72,843 tonnes in 2002/03.    The European Communities notes that whilst c onsumption fell to its lowest level for the 
period under consideration in 2000/01, that was also the year in which the Community producers 
achieved their highest level of profitability (6.8%) . On the other hand, consumption rose in 2001/02 to 
80,960 tonnes (its highest level during the period) but the Community producers profitability fell to (-
1.7%) at the same time.  Therefore, there is no clear correlation between consumption itself and the 
profitability and general economic situat ion of the Community producers.  
 
 In examining the effect of consumption on the profitability of the Community producers, account has to be taken of the reaction of all market  participants to the changes in consumption. In 
this respect, it was found that while Community pro ducers were forced to reduce their sales in the 
Community by roughly 9,185 tonnes in 2001/02 compared to 2000/01, imports moved sharply in the other direction (+24,469 tonnes). Similarly, in 2002/ 03, whilst imports continued at their level in the 
previous year, the Community producers’ sales fell by over 8,000 tonnes. 
  As regards price effects, variations in cons umption of canned goods w ith a substantial shelf 
life should not normally lead to substantial price eff ects if production is adjusted to the needs of the 
market. In this respect, the Community producers a ppear to have reacted by reducing bot h production 
and sales to a greater extent than that necessary to st ay in line with the falls in consumption. This is 
mirrored by a similar decrease in stocks.   Similarly, if price pressure is reduced then the injurious effects which stem from low prices 
would also be minimised.  The most important fa ctor is profit, where any fall would have been 
minimised if prices and sales volumes had not falle n substantially.  Therefore, it is reasonable to 
conclude that, in the absence of the sharp rise in im ports at low prices, the fall in consumption would 
not have led to a substantial fall in profits.   If all market participants had adjusted thei r production, then the Community producers would 
still have sold less in 1999/00, 2000/01 and 2002/03 .  But consumption in 2001/02 was at its highest 
level since 1998/99, and at approximately the same le vel as in that year.  The Community producers’ 
sales, however, decreased in 2001/02 compared to 1998/99 by 29,438 tonnes, a decrease of 43%.  At 
the same time, imports increased in 2001/02 by 28, 457 tonnes compared to 1998/99. Imports therefore 
increased considerably between 1998/99 and 2001/02 d espite consumption being only slightly higher. 
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  1998/99 1999/00 2000/01 2001/02 2002/03
Consumption (t) 
actual development 80,065 74,056 65,676 80,960 72,843
Market share 
actual 80% 76% 69% 45% 38%
Market share 
simulation* 80% 71% 57% 45% 35%
*  simulation if the level of consumption was constant throughout the period at its 
1998/99 level 
 The above table illustrates that even if cons umption had remained constant throughout the 
period examined, the Community industry’s market sh are would not have developed in a substantially 
different manner. This shows that the development of consumption had only a limited impact on the 
market share of the Community industry. 
 For the reasons given above, it is concluded th at, although there is a link between the fall in 
consumption and the injurious effects ob served, this link is not substantial. 
- Effect of changes in export performance 
 
 The European Communities also examined the effects of the fall in exports. 
 
 1998/99 1999/00 2000/01 2001/02  2002/03
Exports (in tonnes) 21,316 21,672 14,544 18,099 17,780
 
 Between 1998/99 and 2000/01, the volume of Community producers’ exports of canned 
mandarins fell from 21,316 tonnes to 14,544 tonnes as  the Community producers lost market share to 
low priced competition from China. Between 2000/ 01 and 2001/02, exports  recovered to 18,099 
tonnes and to 17,780 tonnes in the 2002/03 season. Over the five year period, exports decreased by 
around 3,500 tonnes, although the principal reduc tion occurred between 1999/00 and 2000/01 (the 
year in which the Community producers were most profitable). In 2001/02, exports actually increased, 
to the benefit of the Community producers. In  the most recent period, between 2001/02 and 2002/03, 
exports have decreased by 319 tonnes or 1.7%, representing only 0.8% of Community production in that year.   It should also be noted that in the calculation of profitability only Community sales were 
taken into account. Therefore, the recorded fall in the profitability of the Community producers in the 
most recent periods is largely inde pendent of the effect of exports. 
  For the reasons given above, it is concluded that  there is some link between the fall in exports 
and the injurious effects observed, in so far as, for example, reduced exports ha ve contributed to lower 
production and capacity utilisation. However, it is cons idered that the majority of that effect occurred 
between 1999/00 and 2000/01 (when the Community prod ucers were still profitable) and that the very 
small reduction in exports in 2002/ 03, equivalent to less than 1% of Community production had no 
appreciable effect.  G/SG/N/8/EEC/2 
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 - Effect of any excess capacity 
  The European Communities has examined whether injurious effects may have resulted from 
excess capacity amongst the Community producers. There was only a single small change in 
estimated theoretical production capacity during th e period of the investigation, when, in 1999/00 
production capacity increased by 2% to 129,260 tonnes.    This increase in capacity contributed to a fall in capacity utilisation in 1999/00 and 
subsequent years as the anticipated need for additional capacity did not materialise. Therefore, it is 
concluded that there is a link between the increase in  capacity and the injurious effects observed in the 
earlier part of the five year period, although the effect of the additional capacity on the overall 
profitability of the Community producers was very small.  
- Effect of lack of supply of raw material 
  Some exporters argued that the reason behind the fall in production by the Community producers was a lack of supply of raw material (nam ely fresh small citrus fruit) on the EU market. 
However, based on its examination of the EU mark et in fresh small citrus fruit, the European 
Communities determines that there was adequa te supply to meet demand from the processing 
industry.  
  Table A shows actual production of fresh sma ll citrus fruit (clementines, mandarins and 
satsumas) in the years 1998 to 2002.  
Table A 
 
Year 1998 1999 2000 2001 2002 
Production  2,329,341 2,823,106 2,511,550 2,379,634 2,650,000 
*Source: CLAM  
 
- Demand for Fresh Small Citrus Fruits by the Processing Industry 
  The quantity of clementines, and satsumas used by the processing industry for the production of canned mandarins from 1998/99 to 20 02/03 is as shown in Table B.  
 
Table B 
 
Season  1998/99  1999/00  2000/01  2001/02  2002/03  
Satsumas and 
Clementines 120,000 110,000 95,000 95,000 60,000 
 
 As Tables A and B illustrate, the supply of sma ll fresh citrus fruit on the EU market was far 
greater than the demand of the processing industry.  
 
 Nevertheless, the processing in dustry is in competition with other purchasers of fresh 
satsumas and clementines and its ability to compete appears to be hampered by the fall in prices 
achieved for the like product. The price of fresh mandarins for processing is set by annual contracts 
between the canners and the farmers agreed at the beginning of the season. Table  C shows the price 
obtained by the producers for mandarins sold as fresh product and for canning : 
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 Table C 
 
Season 1998/99 1999/00 2000/01 2001/02 2002/03 
Fresh (€/Tonne) 547 498 571 557 527 
Canning (€/Tonne) 256 255 313 245 172 
 
 The price differential reflects two factors. Fi rst, that the Community producers are becoming 
less able to afford to purchase the raw materials (fresh satsumas and clementines) at a price which 
allows them to achieve a reasonable level of prof itability. Second, because of the low prices offered 
by the Community producers to growers for satsumas, which are principally used as raw material for 
canning, growers are re-orientating their production fro m satsumas towards clementines in an effort to 
increase the profitability of their production. Howe ver, that process does not yet appear to be 
sufficiently far advanced to have had an appreci able effect on the availability of supply to the 
Community producers.   
 Therefore, the European Communities determines that lack of supply did not contribute to the 
injury suffered by the Community producers. 
 - Other Factors   No causation factors (other th an those dealt with above) were identified by the European 
Communities or raised by interested parties during the investigation.  
 2. Attribution of injurious effects   The serious injury suffered by the Community  producers took the form mainly of reduced 
sales volume, reduced unit prices and worsening pr ofitability and financial losses. The European 
Communities identified that three factors contributed  to the injury apart fro m the increase in imports: 
decline in consumption, decline in exports and increased capacity.  
  First of all, there was a decline in consumption between 1998/99 and 2000/01 after which there was a rise in consumption in 2001/02, followe d by a further fall in the most recent period. 
However, the development of imports did not follow this consumption pattern at all and the European 
Communities considers that the decline in consump tion between 1998/99 and 2000/01 did not play a 
significant role either in volume or prices. The fall in consumption in 2002/03 coincided with a fall in 
sales volumes, prices and profitability for the Comm unity producers and the European Communities 
has concluded that that fall in consumption was a cont ributory factor in the serious injury suffered by 
the Community producers. 
  The European Communities also examined the decline in exports by the Community 
producers over the five year period. There was a dec line over the earlier part of the five year period. 
However, in the latter part of the period, when seri ous injury was sustained, exports increased before 
falling slightly. Therefore, the development in exports had a significantly smaller impact on the 
Community producers in the periods 2001/02 and 2002/03 than the surge in imports.   The European Communities also examined the increase in capacity which occurred in 
1999/00 and which was thereafter retained. The cost of this additional capacity on an annual basis was 
not significant.  
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  The European Communities noted that, having en sured the effects of other factors are not 
attributed to increased imports, that there is a genuine and substantial causal  link between the decline 
in the Community producers’ sales volume, sales pr ices and profitability and the increase in imports, 
which not only increased at a much faster rate th an the increase in consumption between 2000/01 and 
2001/02, but increased whilst consumption fell from 1998/99 to 2000/01 and in 2002/03.  3. Conclusion on causation  
 After having examined the injurious effects of the other known factors and separated and 
distinguished them from each other and from the in jurious effects of the increased imports, and after 
having ensured that injury caused by other factor s is not attributed to imports, the European 
Communities has reached the conclusion that ther e is a genuine and substantial link between 
increased imports and serious injury  to the Community producers. 
 
Enlargement of the European Communities 
 
 Given that the measures will have effect after EU enlargement scheduled to take place on 1 May 2004, the European Communities also considered  the effect of the increase in imports (both in 
absolute and relative terms) as it relates to th e EU-25. There is no production of the product 
concerned in the accession countries. As noted belo w, imports to the EU-25 developed in a similar 
way to imports to the EU-15. Therefore, it is cons idered that the analysis of serious injury and 
causation for the EU-15 remains valid for the EU-25.  
2. Provide information on whether there is an  absolute increase in imports or an increase 
in imports relative to domestic production  
 
Introduction   The European Communities has investigated wh ether the product concerned is imported into 
the Community in such greatly increased quantiti es, absolute or relative to total Community 
production, and/or on such terms or conditions as to cause, or threaten to cause, serious injury to the 
Community producers. In this respect, the Eur opean Communities has focused on imports of the 
product concerned in the most recent period for whic h data were available. The table below shows the 
development of imports for the years 1998/99 to 2002/03.  
 1998/99 1999/00 2000/01 2001/02 2002/03 
EU imports  16,347 17,573 20,335 44,804 44,813 
Community Production 81,869 75,767 60,462 60,329 39,600 
Imports/ 
Production 20% 23% 34% 74% 113% 
 
- Volume of Imports   Between 1998/99 and 1999/00, imports increased by around 7%,  In the following year, the 
rate of increase grew to around 16% with imports increasing to 20,335 tonnes in 2000/01. There then 
followed a massive surge in imports between 2000/ 01 and 2001/02. Imports increased by 120% in a 
single year to 44,804 tonnes, more than 2.5 times the level of imports in 1998/99. Imports remained at about this level in the 2002/03 canning season.   G/SG/N/8/EEC/2 
 G/SG/N/10/EEC/2 
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  These trends are confirmed by the most recen t data available. Recent intelligence indicates 
that imports into EU during  2003 (latest period fo r which data is availabl e) reached around 54,000 
tonnes, and peaked in the last quarter with im ports of over 17,000 tonnes notwithstanding that 
provisional safeguard measures were introduced on 9 November 2003. 
  Relative to total Community production, impor ts increased from 20% in 1998/99 to 34% in 
2000/01, to 74% in 2001/02, and 113% in 2002/03 . These trends are confirmed by the most recent 
information.  
 
- Market share of imports  
 1998/99  1999/00  2000/01  2001/02  2002/03  
Market share 
of imports 20% 24% 31% 56% 62% 
 
 The market share of imports increased between 1998/99 and 2000/01 from 20% to 31%, before nearly doubling – to 56% - in 2001/02. The ma rket share taken by imports further increased to 
62% of the consumption in 2002/03.It is the Europ ean Communities’ conclusion  that the increases in 
the recent past can be considered sudden, sh arp and significant when comparing them to 
developments in previous canning seasons. 
 - Imports to the accession countries   Given that the measures will have effect after EU enlargement scheduled to take place on 
1 May 2004, the European Communities also considered  the increase in imports (both in absolute and 
relative terms) as it relates to the EU-25.   
 2000 
 2001 2002 2003  
Accession country imports 
from outside the EU-25 
 2,562 4,268 5,350 6,528 
Accession country imports 
from the EU-15 
 1.964 1.014 1.472 1,500* 
TOTAL  
 4.527 5.283 6.821 8,028 
 * estimate  
 Imports to the accession countries from outsi de the EU-25 increased by 67% from 2,562 
tonnes in 2000 to 4,268 tonnes in 2001, and continued to increase to 5,350 tonnes (a further increase 
of 25%) in 2002. In 2003, such imports increased by a further 22% to 6,528 tonnes.    In order to consider what would have been  the likely increase in imports to the EU-25 in 
recent years, it is necessary to add imports the EU together with accession country imports from 
outside the EU-25. G/SG/N/8/EEC/2 
G/SG/N/10/EEC/2 G/SG/N/11/EEC/2/Suppl.1 
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 2000 2001 2002 2003 
EU imports* 17,573 20,335 44,804 44,813 
Accession country imports 
from outside the EU-25 2,562 4,268 5,350 6,528 
TOTAL 20,135 24,603 50,154 51,341 
 * Data is for canning seasons – from 1/10 in one year to 30/9 in the following year 
  On this basis, total imports for the EU-2 5 would have increased by 22% from 20,135 tonnes 
to 24,603 tonnes between 2000 and 2001, and then by 104% to 50,154 tonnes between 2001 and 2002. Imports would then have conti nued at this high level in 2003, and indeed there would have been 
an increase of 2% to 51,341 tonnes. 
 - Import prices  
 1998/99  1999/00  2000/01  2001/02  2002/03  
Price €/tonne 631 670 792 691 605 
source: Eurostat 
  The average price (Cif, EU border) of the imported product increased by 6% between 1998/99 and 1999/00, and then by a furt her 18% between 1999/00 and 2000/ 01, before falling by 13% in 
2001/02 to 691 €/tonne. Average prices continued to  fall in 2002/03 reaching €605. The European 
Communities notes that, although prices increased in 2000/01, the main increase in imports occurred 
in 2001/02 against a background of  falling prices and that prices continued to fall in 2002/03 (by 
12%).    The downward trend in prices is further confirmed by the most recently available data. Updated information provided by  importers on the evolution of import and re-sale prices and 
quantities in the period  April 2003 to December 2003 indicates that prices fell by a further 13.5% in 
that period . As exports of canned mandarins are us ually invoiced in US dollars, the fall of the US 
dollar against the euro has contributed to the fu rther price decrease. The exchange rate averaged 
US$1.15:€ in the period  April 2003 to December 2003 against US$1.08:€ in the period 2002/03, a drop of 6.6%.  Since the overall price decrease amount ed to 13.5%, it appears that this fall is not 
wholly attributable to exchange rate movements but also real price decreases during the months 
before and shortly after the imposition of provisional measures.   In assessing likely future price trends, the Eu ropean Communities also notes that the market 
leading retailer of satsumas in Germany lowered the price for a standard tin of 314ml from 0.35€ to 
0.29€ as of 5 January 2004 (i.e. after the imposition of provisional measures). 
 
3. Provide precise description of the product involved 
 
 The product in respect of which the European Communities has been informed that trends in 
imports appear to call for safeguard measures are cer tain prepared or preserved mandarins (including 
tangerines and satsumas), clementines, wilkings and ot her similar citrus hybrids, not containing added 
spirit, containing added sugar (‘the product concerned’). The product concerned is currently classified 
within the European Community Combined Nomenclature (CN) codes 2008 30 55 and 2008 30 75.  G/SG/N/8/EEC/2 
 G/SG/N/10/EEC/2 
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 These codes correspond to the product concerned in immediate packings of a net content exceeding 
1kg, and of net content not exceeding 1kg, respectively.  4. Provide precise description of the proposed measure  
 It is proposed to impose definitive safeguard m easures in the form of tariff quotas in excess of 
which an additional duty will be payable. It is propo sed that the additional duty be set at a level which 
is consistent with the aim of preventing serious injury to the Community producers. In terms of a 
fixed duty, the duty payable should therefore be €301 per tonne. It is proposed to calculate the tariff 
quotas on the basis of the average volume imported in the period 1999/00 to 2001/02, i.e. the most recent three representative years for which import st atistics are available (27,570 tonnes for the EU-
15). The European Communities notes that the amounts of the tariff quotas will require to be revised 
in light of enlargement which is scheduled for 1 May 2004. The amount of the tariff quotas for the 
first period (27,570 tonnes for the EU-15) should therefore be increased by the average import 
quantity per annum from non-EU countries to the A ccession Countries in the years 2000 to 2002. This 
average amounts to 3,850 tonnes. Therefore the EU-25 tariff quota for the first period should be 31,420 tonnes. As the final period is only 212 da ys, the actual imports quota for the final period 
should be reduced proportionately.  
 In view of the obligation to liberalise the measures, the overall annual amount of the tariff 
quotas should be increased by 5% in each of the fo llowing periods that is to say to 32,991 tonnes for 
the period to 10 April 2006, to 34,640 tonnes for the period to 10 April 2007, and (212/365) x 36,373 tonnes for the period to 8 November 2007. In  accordance with Article 5 (2) (a) of the Agreement on 
Safeguards , and Article XIII of the GATT 1994, all Me mbers having a substantial interest in 
supplying the product concerned shall have the possib ility to obtain the alloca tion of a specific share 
in this quota.  
Below is the list of Developing Countries  excluded from the measures as they export less than 
3% of imports to the Community (Article 9.1 of the Agreement on Safeguards ) 
  United Arab Emirates, Afghanistan, Antigua and Barbuda, Angola, Argentina, Barbados, 
Bangladesh, Burkina Faso, Bahrain, Burundi, Beni n, Brunei Darussalam, Bolivia, Brazil, Bahamas, 
Bhutan, Botswana, Belize, Democr atic Republic of Congo, Central African Republic, Congo, Côte 
d'Ivoire, Chile, Cameroon, Colombia, Costa Rica, Cuba, Cape Verde, Cyprus, Djibouti, Dominica, 
Dominican Republic, Algeria, Ecuador, Egypt , Eritrea,  Ethiopia, Fiji, Federated States of Micronesia, 
Gabon, Grenada, Ghana, Gambia, Guinea, Equatori al Guinea, Guatemala, Guinea-Bissau, Guyana, 
Honduras, Haiti, Hong Kong, China;  Indonesia, Indi a, Iraq, Iran (Islamic Republic of), Jamaica, 
Jordan, Kenya, Cambodia, Kiribati, Comoros, St Kitts and Nevis, Kuwait, Lao People's Democratic 
Republic, Lebanon, St Lucia, Sri Lanka, Liberia,  Lesotho, Libyan Arab Jamahiriya, Morocco, 
Madagascar, Marshall Islands, Mali, Myanmar, M ongolia, Mauritania, Mauritius, Maldives, Malawi, 
Mexico, Malaysia, Mozambique, Namibia, Niger, Ni geria, Nicaragua, Nepal,  Nauru, Oman, Panama, 
Peru, Papua New Guinea, Philippines, Pakistan, Pa lau, Paraguay, Qatar, Rwanda, Saudi Arabia, 
Solomon Islands, Seychelles, Sudan, Sierra Le one, Senegal, Somalia, Suriname, Sao Tomé and 
Principe, El Salvador, Syrian Arab Republic, Swazi land, Chad, Togo, Thailand, Tunisia, Tonga, East 
Timor, Trinidad and Tobago, Tuvalu, Tanzania  (United Republic of), Chinese Taipei, Uganda, 
Uruguay, St Vincent and Northern Grenadines, Ve nezuela, Viet Nam, Va nuatu, Samoa, Yemen, 
South Africa, Zambia and Zimbabwe. 
 G/SG/N/8/EEC/2 
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 5. Provide proposed date of introduction of the measure 
 
 Under Community law, a decision whether to impose safeguard measures shall be taken, in 
principle within 9 months from the date of th e initiation of the investigation. In exceptional 
circumstances, this time limit may be extended by a further maximum period of two months.  The 
product for which safeguard measures is proposed is currently subject to provisional measures, which 
are set to expire on 10 April 2004.  The proposed  date of introduction of the proposed measure is 
11 April 2004. 
 
6. Provide expected duration of the measure 
 
 The expected  duration of the proposed measure  is four years including the period of the 
provisional measures. 
 
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 
 
 It is proposed to hold the mid-term review of the proposed measure in November 2005. 
 
8. If the expected duration is over one year , provide expected timetable for progressive 
liberalisation of the measure 
 
 As noted above in item 4, the proposed measur e provides for progressive liberalisation.  The 
terms of the liberalisation are indicated in item 4. 
 
9. Provide information relating to the extension of a safeguard measure 
 
 Not applicable. 
 
__________