RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/Q2/EGY/13
9 January 2001
(01-0078)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON
SAFEGUARDS ON INITIATION OF AN INVESTIGATION
AND THE REASONS FOR IT, AND
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON SAFEGUARDS
BEFORE TAKING A PROVISIONAL SAFEGUARDS MEASURE
REFERRED TO IN ARTICLE 6
Replies to Questions Posed by the UNITED STATES 1
Regarding the Notification of EGYPT2
The following communication, dated 21 December 2000, has been received from the
Permanent Mission of Egypt.
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Introduction
On 14 November 2000 the US Trade Representative's Office in Geneva has sent
questionnaires to the Permanent Mission of Egypt in Geneva, concerning the Egyptian notification of
imposing a provisional safeguard measure against imports of powdered milk.
Q.1 Article 6 of the Safeguards Agreement permits a provisional safeguard measure
"pursuant to" a preliminary determination.  Ye t it appears the Egyptian investigation was
initiated on 25 September and the provisional measure was imposed the next day.  This implies,
at best, only some nominal form of preliminary investigation was carried out.
Q1.1 How is Egypt’s notification consistent wi th its Article 12.4 obligation to provide notice
before implementation of a provisional measure?
Reply
According to Article 12.4 of the Agreement on Safeguards, a Member shall make a
notification to the Committee on Safeguards before taking a provisional measure referred to in
Article 6.
In this regard, Egypt followed the provisions of Article 12.4, and notified the Committee on
Safeguards about its intention to impose a provisional safeguard measure before it applied the
measure in accordance with the provision of the said Article.
                                                     
1 G/SG/Q2/EGY/12
2 G/SG/N/7/EGY/8 and Corr.1 and -G/SG/N/6/EGY/3.G/SG/Q2/EGY/13
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The Agreement on Safeguards, specifically Article 12 that deals with notification procedures
does not provide that the notification of the initiation of the investigation (Article 12.1(a)) must be
simultaneous with the notification of the imposition of the provisional measure (Article 12.4).  The
Agreement does not set any timing for the notifications with regard to this particular issue.
Egypt notes that its notifications are consistent with the guidance issued by the Committee on
Safeguards and with the Technical Cooperation Handbook on Notification Requirements.  Egypt's
notifications provide the WTO Members with all pertinent information as required by Article 12.2 of
the WTO Agreement on Safeguards. In Egypt's view, the purpose of the notification pursuant to
Article 12.(a) is to inform all WTO Members of the initiation of an investigation so that Members
having a substantial interest, may exercise their rights to participate in the investigation.
Furthermore, Article 12.1 states, inter alia , that "A Member shall immediately notify the
Committee on Safeguards upon …".  The ordinary meaning of the term "immediately" introduces a
certain notion of urgency.  In addition, we note that no specific number of days is mentioned in
Article 12.
Egypt therefore considers that its notifications under both paragraphs 1(a) and 4 of Article 12
of the Agreement on Safeguards were sufficient to inform the WTO Members adequately of the
initiation of an investigation concerning the product,  so that the Members having an interest in the
product could avail themselves of their right to participate in the investigation process.
Egypt notes that Article 6 of the WTO Agreement on Safeguards provides that the duration of
the provisional measure shall not exceed 200 days, during which period the pertinent requirements of
Articles 2 through 7 and 12 shall be met.  The per tinent requirements may include the initiation of the
investigation and the notification (according to Article 12.1(a)), which means that the investigating
authority may, in critical circumstances, apply a provisional safeguard measure for a period of 200days, and during this period the provisions concerning the initiation and the notification are
applicable.
Article 3 of the Agreement on Safeguards states, inter alia , that "A Member may apply a
safeguard measure only following an investigation …".  In this regard, we note that the provisions of
Article 6 could be considered to be a derogation from the provisions of Article 3 of the WTO
Agreement on Safeguards, as Article 3 provides that a provisional measure may be applied withoutsetting a certain condition regarding the time of the application (i.e. before or after the initiation of an
investigation).  It is quite clear that Article 6 of the Agreement on Safeguards is an exception from the
normal circumstances, furthermore there is no mention in Article 6 of the WTO Agreement on
Safeguards regarding the time of application, only that it can be applied after a preliminary
determination.
The circumstances in this instance were that the industry approached the Investigating
Authority with a complaint which was found to be properly documented.  The Investigating Authority
analysed the information and sought clarification and further information from the industry where
necessary.  After due consideration of the evid ence, the Investigating Authority reached the
conclusion that there was serious injury being caused to the industry from the increased imports such
that provisional safeguard measures should be applied against the imports concerned.
In this particular case, provisional measures were applied as soon as possible as any delay
was considered to be critical for the industry in terms of damage.  It should be noted that theimposition of the safeguard provisional measure applied on a date after the date of the initiation of the
investigation.G/SG/Q2/EGY/13
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Egypt notes that its procedures are consistent with the WTO Agreement on Safeguards.
Although timing and simultaneous notification are not explicitly listed in Article 12 of the WTO
Agreement on Safeguards, Egypt considers that it fulfilled its obligations under the WTO Agreement
on safeguards and its notification obligations in a timely fashion.
Q1.2 With basically no advance notice, how did Egypt ensure that suppliers were able to
present their views and have those views taken into account before implementing a provisional
safeguard?   Since initiating the investigation, has a public hearing been conducted?
Reply
We would like to refer to our above-mentioned explanation regarding Article 6 of the WTO
Agreement on Safeguards, as we explained above, the said Article is considered to be an exception
from the ordinary situation.  In our particular case the Egyptian Investigating Authority determined
that there is a serious injury that required a provisional measure to be applied, after the imposition of
such a measure, the pertinent requirements of Articles 2 through 7 and 12 were applied, all interested
parties were informed and were invited to participate in the investigation procedures and to presenttheir views.  We also note that Article 6 of the Agreement on Safeguards does not provide that the
investigating authority should notify the interested parties to present their views before applying the
provisional measures.
Egypt would like to clarify to the US that the purpose of notification which is provided for in
Article 12.1(a) of the WTO Agreement is to inform WTO Members of the initiation of the
investigation, Egypt's notification contains a time-limit for presenting submissions, the date of the
hearing and a time-limit for registration as a participan t in the hearing.  In doing this Egypt assumes
that once the notification is circulated to all WTO Members including the US, they are invited to
present their views and they are able to contact the competent authority in Egypt if they wish to
participate in the investigation process.
With regard to the hearing itself, Egypt wishes it to be noted that the public hearing was held
on 25 October 2000 in the presence of all the interested parties in the case.  During this hearing, all
interested parties presented their point of view.  The Egyptian investigating authority immediately
after initiation sent all the relevant documents to the interested parties, including the invitation to
participate in such a hearing.
Q.2 It is our understanding that while there has been an increase in milk powder imports in
Egypt, a relative surge in domestic production of milk appears to have played a significant role
in depressing milk prices.  We also understand that domestic production has dropped by only 3
per cent and continues to account for 90 per cent of the market. Bearing in mind the proceduresset forth in Article 4 of the Safeguards Agreeme nt, we strongly encourage Egypt to consider in
its investigation the factors other than imports that may have contributed to depressed domestic
prices and profits.
- Noting these domestic factors, how did th e competent authority consider what damage
was likely to occur in the 200-day period-- beginning 26 September 2000--had a decision
been made to not impose a provisional safeguard measure?  If so, what immediate
consequences did the authority preliminarily determine were likely to occur?G/SG/Q2/EGY/13
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Reply
Egypt would find it helpful to have more explanation and clarification on the above points in
order to give full consideration to the matters raised before providing a full response.
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