WORLD TRADE
ORGANIZATIONG/SG/N/8/HUN/2
G/SG/N/9/HUN/2G/SG/N/10/HUN/2
G/SG/N/11/HUN/2/Add.2
20 June 2003
(03-3335)
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
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
HUNGARY
The following communication, dated 18 June 2003, has been received from the Permanent
Mission of Hungary.
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Pursuant to Articles 12.1(b), 12.1(c) and Article 9, Footnote 2 of the Agreement on
Safeguards and to the format for notifications adopted by the Committee on Safeguards G/SG/1
Hungary hereby submits a notification on finding of serious injury or threat thereof caused byincreased imports and on the proposed safeguard measures.
On 2 January 2003, the Republic of Hungary initiated an investigation relating to serious
injury to domestic producers of products like or directly competing with imported ammonium nitrate
whether or not in aqueous solution (HS 3102.30).  The initiation of the investigation has been notifiedto the Committee on Safeguards as well as the introduction of the provisional measure and the
subsequent suspension of the measure in documents G/SG/N/7/HUN/2, G/SG/N/11/HUN/2 and
G/SG/N/7/HUN/2/Add.1, G/SG/N/11/HUN/2/Add.1)
The investigation initiated on 2 January 2003 concerning ammonium-nitrate, whether or not
in aqueous solution (HS 3102.30) was extended by 30 days as from 28 March 2003.  The decision on
the extension was published in the Economic Journal of the Ministry of Economy and Transport
No.9./2003.G/SG/N/8/HUN/2, G/SG/N/9/HUN/2,
G/SG/N/10/HUN/2, G/SG/N/11/HUN/2/Add.2
Page 2
Consistent with Article 12.2 of the Agreement of Safeguards, this notification contains all
pertinent information relating to products classified within HS 3102.30 on which definitive safeguard
measure are proposed.
1. Evidence of serious injury or threat  thereof caused by increased imports
The Ministry of Economy and Transport, the authority responsible for the investigation
concluded that ammonium-nitrate had been imported into the Hungarian market in such increased
quantity and under such conditions that caused serious injury to the domestic industry and that a
definitive safeguard measure is necessary to prevent and remedy serious injury.  The investigating
authority examined the situation of the domestic and world markets, including capacities, production
and consumption trends.  The investigating authority evaluated all relevant factors having a bearingon the situation of the domestic industry and concluded that the injury suffered has been attributable
to increased imports.  These conclusions were based on the factors described below.
Statistical data
Unit 1998 1999 2000 2001 2002
Volume of imports tonnes 262,0 168,2 161,6 280,0 385,3
Volume of exports tonnes 6,9  13,3 12,2 14,8 14,3
Production tonnes 346,7 309,5 404,1 462,8 275,2
Closing stocks tonnes 111,3 79,4 14,4 104,2 67,5
 Import/consumption % 45,0 34,0 26,0 44,0 57,0
Import/total production % 75,6 54,3 40,3 60,5 140
Domestic deliveries tonnes 324,4 327,6 456,5 357,7 290,4
Capacity utilisation % 71,6 62,2 84,2 92,0 56,2
Employment prs. 1 473,0  1 381,0 1 295,0 1 121,0 1 035,0
Productivity tonnes/prs 0,24 0,22 0,31 0,41 0,27
Statistical data shows that the import of products classified within HS 3102.30 increased
significantly during the last year.  From 2000 to 2001 the growth of import reached 73 per cent and
the same data from 2001 to 2002 was 38 per cent.
The level of prices of the imported products were substantially lower than the domestic
prices.  In 2002 price depression was as high as 21 per cent.
As a consequence the Hungarian producer has reached a critical situation where profitability
fall by 50 per cent and the level of employment decreased by 25 per cent between 1999-2002.
Capacity utilisation dropped from 72 per cent in the same period.Productivity in 1999-2002 was at a low level, it varied between 0,22-0,41 per cent.  From
2001 to 2002 it dropped by 34 per cent.
The tendency in import increase continued during 2002/2003.  In 2001/2002 the rate of
increase was 38 per cent and in the first quarter of 2003 it reached 144 000 tonnes.
Production from 2001  to 2002 decreased by 40 per cent and total domestic sales decreased by
22 per cent.  In the same period the increase of consumption was modest 5 per cent.
The share of domestic production within total domestic consumption decreased by 74 per cent
in 2000 at the same time the share of imports increased to a level of 26 per cent.  In 2001 the share ofG/SG/N/8/HUN/2, G/SG/N/9/HUN/2,
G/SG/N/10/HUN/2, G/SG/N/11/HUN/2/Add.2
Page 3
import was 44 per cent and in 2002 it rose to 57 per cent while the share of domestic production
decreased constantly.
Import/domestic production ratio reached 54 per cent in 1999, 40 per cent in 2000, 61 per
cent in 2001.  In 2002 import of ammonium-nitrate was higher than the domestic production.
As a result the Hungarian producer has suffered a loss that is to be attributed to the sudden
and sharp increase of imports.
It was determined that in countries with the highest import share a special, non-market based
pricing system is used for gas which is the main component in the course of production ofammonium-nitrate.  Based on this practice the exporters set an extremely low price on the final
product that caused a substantial injury to the Hungarian producers.
The investigating authority established that the import increased sharply in absolute term and
relative to production and consumption at low prices and these factors are in causal link with theinjury.  The above mentioned injurious factors are the consequence of unforeseen development in
view of the patterns of production, consumption a nd world market situation of the product concerned.
2. Information on whether there is an absolu te increase in imports or an increase in
imports relative to domestic production
See detailed data under item 1
3. Precise description of the product involved
The product concerned is classified within HS 3102.30 Ammonium-nitrate, whether or not in
aqueous solution.
4. Description of the proposed measure
The Ministry of Economy and Transport proposed the safeguard measure in the form of an
additional duty of 11600 HUF/tonnes.
5. Proposed date of introduction of the measure
The proposed date of introduction of the measure is 23 June 2003.
6. Expected duration of the measure
The safeguard measure will be applied until the accession of the Republic of Hungary to the
EU but not exceeding a period of two years.
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.G/SG/N/8/HUN/2, G/SG/N/9/HUN/2,
G/SG/N/10/HUN/2, G/SG/N/11/HUN/2/Add.2
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8. Expected time table for progressive liberalisation of the measure
If the measure is still in force on 1 July 2004 from that date the additional duty to be paid will
decrease by 10 per cent.
9. Information relating to the extension of a safeguard measure
Not applicable.
Notification under Article 9, footnote 2, on the non-application of safeguard
measure to developing countries under Article 9.1
1. Specify the measure
The proposed safeguard measures consist of an additional duties of 11600 HUF/tonnes.
2. Product subject to the measure
The proposed measure applies to products classified within HS 3102.30 Ammonium-nitrate
whether or not in aqueous solution.
3. Developing countries to which the measure is not applied under Article 9.1 of the
Agreement on Safeguards, and the import shares of these countries individually and
collectively
Imports of the products concerned subject to a provisional safeguard measure originating in
any of the developing or least developing countries shall not be subject to the safeguard measures.
These countries are the following:
Afghanistan, Albania, Algeria, Angola, Argentina,  Bahamas, Bangladesh, Barbados, Belize, Benin,
Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Burkina Faso, Burundi, Cambodia,
Cameroon, Cape Verde, Central African Republic, Chad, Chile, People’s Republic of China,
Colombia, Comoros, Congo, Costa Rica, Cuba, Demo cratic People's Republic of Korea, Democratic
Republic of Congo, Djibouti, Dominican Republic,  Ecuador, Egypt, Equatorial Guinea, Eritrea,
Ethiopia, Fiji, Gabon, Gambia, Ghana, Grenada, Guatemala, Guinea,  Guinea-Bissau, Guyana, Haiti,
Honduras, India, Indonesia, Iran (Islamic Republic of), Iraq, Ivory Coast, Jamaica, Jordan, Kenya,
Kiribati, Lao People's Democratic Republic, Leba non, Lesotho, Liberia, Libyan Arab Jamahiriya,
Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mauritius, Mexico, Mongolia, Morocco,
Mozambique, Myanmar, Nepal, Nicaragua, Niger,  Nigeria, Oman, Pakistan, Papua New Guinea,
Peru, Philippines, Rwanda, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Sao Tome andPrincipe, Senegal, Seychelles, Sierra Leone, Sing apore, Solomon Islands, Somalia, South Africa, Sri
Lanka, Sudan, Suriname, Swaziland, Syrian Arab Republic, Thailand, Togo, Tonga, Trinidad and
Tobago, Tunisia, Tuvalu, Uganda, United Republic of Tanzania, Uruguay, Vanuatu, Venezuela, Viet
Nam, Yemen, Zambia, Zimbabwe.
4. Not applicable.G/SG/N/8/HUN/2, G/SG/N/9/HUN/2,
G/SG/N/10/HUN/2, G/SG/N/11/HUN/2/Add.2
Page 5
INFORMATION TO BE NOTIFIED TO THE COMMITTEE WHERE A
SAFEGUARD INVESTIGATION IS TERMINATED WITH
NO SAFEGUARD MEASURE IMPOSED
On 27 January 2003 Hungary notified (G/SG/N/ 6/HUN/2 ) the Co mmittee on Safeguards that
the Ministry of Economic Affairs had initiated an investigation on imports of products classified
within
HS 3102.10 Urea whether or not in aqueous solution,
HS 3102.30 Ammonium nitrate, whether or not in aqueous solution
HS 3102.40 Mixtures of ammonium nitrate with calcium carbonate or other inorganic non-fertilisingsubstances and
HS 3102.80 Mixtures of urea and ammonium nitrat e in aqueous or ammoniac solution ammonium-
nitrate.
The investigating authority concluded that in the case of products classified within HS
3102.10, HS 3102.40 and HS 3102.80 the requirements for the adoption of a safeguard measure had
not been met and it terminated the investigation without adopting a safeguard measure.
The Ministry of Economy and Transport has published this decision in the Economic Journal
No.7/2003.
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