WORLD TRADE
ORGANIZATIONG/SG/N/7/CHL/5
15 January 2001
(01-0161)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD
MEASURE REFERRED TO IN ARTICLE 6
CHILE
The following communication, dated 29 December 2000, has been received from the
Permanent Mission of Chile.
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Further to Note No. 270 of 21 December 2000, please find attached the notification by Chile,
pursuant to Article 12.4 of the Agreement on Safeguards, to the effect that the Chilean investigating
authority decided to recommend  the application of a provisional safeguard measure on imports of
mixtures of oils classified in tariff heading 1517.9000 of the Chilean Harmonized Tariff.G/SG/N/7/CHL/5
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On 22 December 2000 the Chilean investigating authority decided to recommend the
application of a provisional safeguard measure on imports of mixtures of oils classified under tariff
heading 1517.9000.
It should be noted that, under Chilean legislation, the investigating authority may only
recommend the application of a measure.  The matter is forwarded to the President of the Republic,
who takes a definitive decision on the imposition of a measure by means of a decree promulgated bythe Ministry of Finance.
Product subject to the recommendation:
Mixtures of oils, tariff heading 1517.9000.
Proposed provisional safeguard measure:
The application of an ad valorem  tariff surcharge of 48 per cent was recommended.
Proposed date of introduction of the provisional safeguard measure:
If application of the provisional measure is considered appropriate, it is estimated that the
decree will be promulgated and published before the end of 2000.
Proposed duration of the provisional measure:
If the provisional measure is promulgated, it may not exceed 200 days, as provided for in the
WTO Agreement on Safeguards.
Preliminary determination of an increase in im ports that has caused or threatens to cause
serious injury
Analysis of imports
In the period January-November 2000, imports of mixtures of oils reached a volume of
123,376 tonnes, a 453 per cent increase compared with the same period in 1999, when the volumewas 22,318 tonnes (Table 1).
In the period January-November 2000, imports of mixtures of oils accounted for 68 per cent
of all edible oils (pure oils plus mixtures) imported by Chile, and over 95 per cent if the last
five months of available data are considered.
Between 1990 and 1996,  imports of mixtures accounted for less than 0.5 per cent of total
imports of oils, with substantial imports of mi xtures only beginning as of 1997, with 25,290 tonnes,
which was similar to the 1999 figure of 25,603 tonnes.  In 1998 imports were 30 per cent less than in
1997.
In the period January-November 2000, 87 per cent of imports of mixtures of oils originated
from Argentina, with 13 per cent originating from Bolivia.  The respective shares for 1999 were
66 per cent and 29 per cent (Table 2).
The share of imports of mixtures of oils in domestic production of refined oil rose from 10 per
cent in 1998 to 17 per cent in 1999.  For 2000 it is estimated that this figure will reach 95 per cent.
Prior to 1997 this share was less than 1 per cent.G/SG/N/7/CHL/5
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The share of imports of mixtures of oils in total imports of edible oils stood at 15 per cent in
1999.  In the period January-November 2000, this figure rose to 68 per cent.  Total imports of oils in
the period January-November 2000 were 23 per cent above those recorded for the same period in
1999.
Serious injury and causal link
The domestic price of refined oil, measured in Unidades de Fomento ("development units"),
fell by 4.4 per cent in the period January-October 2000.  Compared with the same period of the
previous year, in contrast with the annual growth recorded in 1999 and 1998, which was
approximately 5 per cent and 8 per cent respectively (Table 3).
Employment in the refining industry dropped from 404 persons in 1999 to 243 in 2000, a
reduction of 40 per cent.
Installed capacity of the domestic industry amount s to 120,000 tonnes in extracting plants and
310,000 tonnes in refining plants, while current utilization of installed capacity in the domestic
extracting industry is 50 per cent.  There was also a drop in utilization in the refining industry from
67 per cent in 1999 to 55 per cent in 2000.
The applicants assert that the share of the refining industry in domestic sales of refined oils
fell from 83.8 per cent in 1999 to 63.7 per cent in 2000.
For 2000, a 2 per cent increase in total production of refined oil compared to the previous
year is expected.  In 1999, production was down 13 per cent on 1998.
Domestic apparent consumption of refined oil was estimated at 244,332 tonnes for 2000, a
25 per cent increase on 1999, which in turn was 10 per cent less than the figure for 1998.
In 1999, the share of imports of mixtures of oils in apparent consumption  reached 13.1 per
cent, and for 2000 it is estimated that this figure will rise to 58.7 per cent.
In the period January-September 2000, international prices of oil fell by 22 per cent compared
with the same period in 1999, and these largely determine import prices (Table 4).Threat of injury
It is estimated that if this situation were to continue, imports of mixtures of oils would bring
the price payable to farmers down to US$154/ton.  This scenario would lead to wholesale bankruptcyof producers of rapeseed and closure of the sole extracting plant currently operating in the country,
with the ensuing disappearance of the crop from Ch ile.  This would result in the following economic
injury for the domestic extracting industry:
(a) Loss of fixed capital investment amounting to US$4 million;(b) dismissal of 75 persons linked to the industry;(c) loss of investment in the form of technology transfer to oilseed producers for
conversion to Canola totalling US$500,000.
In addition, there is a risk for the refining industry of the loss of advertising investments of
US$5.414 million linked to the creation and promotion of premium brands.G/SG/N/7/CHL/5
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The situation of threat of injury described has convinced the investigating authority of the
existence of critical circumstances, in which any delay would cause damage which would be difficult
to repair for the extracting industry, given that the start of the next harvest is imminent and it istherefore necessary to determine the new purchase price for it.G/SG/N/7/CHL/5
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Table 1
Imports of Mixtures of Oils (1517.9000)
Period US$000s CIF Tonnes Av. price CIF
1990 36 44 828
1991 0 0 0
1992 14 8 1,701
1993 143 75 1,902
1994 389 278 1,398
1995 877 627 1,399
1996 707 431 1,640
1997 15,573 25,290 616
1998 15,338 17,637 870
1999 18,004 25,603 703
Jan-Nov 1999 15,824 22,318 709
Jan-Nov 2000 57,106 123,376 463
Percentage change
Period US$000s CIF Tonnes Av. price CIF
1991 -100% -100% -100%
1992
1993 921% 814% 12%
1994 172% 270% -26%
1995 125% 125% 0%
1996 -19% -31% 17%
1997 2,103% 5,768% -62%
1998 -2% -30% 41%
1999 17% 45% -19%
Average 91/99
Simple 402% 858% -17%
Year-on-Year 99% 103% -2%
Jan-Nov (99/00) 261% 453% -35%
Source: Prepared by the Technical Secretariat on the basis of import declarations.G/SG/N/7/CHL/5
Page 6Table 2
Imports of Mixtures of Oils (1517.9000) by Origin
Imports (Tonnes) % change
Origin 1998 % share 1999 % share Jan.-Nov/
1999% share Jan.-Nov/
2000% share 1999/98 Jan.-Nov
(99/00)
Argentina 17,024 97% 16,856 66% 16,698 75% 107,423 87% -1% 543%
Bolivia 155 1% 7,521 29% 4,943 22% 15,660 13% 4,738% 217%
Peru 0 0% 649 3% 104 0% 175 0% 69%
Ecuador 190 1% 452 2% 452 2% 0 0% 138% -100%
Mexico 131 1% 50 0% 50 0% 0 0% -62% -100%
Belgium 21 0% 24 0% 22 0% 18 0% 13% -17%
France 8 0% 20 0% 20 0% 38 0% 155% 90%
Spain 16 0% 18 0% 18 0% 12 0% 13% -35%
United States 3 0% 11 0% 11 0% 16 0% 336% 45%
Portugal 80 0% 0 0% 0 0% 0 0% -100%
United Kingdom 0 0% 0 0% 0 0% 33 0%
TOTAL 17,637 100% 25,603 100% 22,318 100% 123,376 100% 45% 453%
Value CIF (US$000s) % change
Origin 1998 % share 1999 % share Jan.-Nov/
1999% share Jan.-Nov/
2000% share 1999/98 Jan.-Nov
(99/00)
Argentina 14,596 95% 11,939 66% 11,829 75% 46,574 82% -18% 294%
Bolivia 144 1% 5,057 28% 3,330 21% 10,165 18% 3,412% 205%
Peru 0 0% 412 2% 71 0% 120 0% 69%
Ecuador 183 1% 388 2% 388 2% 0 0% 112% -100%
Mexico 160 1% 52 0% 52 0% 0 0% -68% -100%
Belgium 38 0% 40 0% 36 0% 29 0% 5% -19%
France 24 0% 53 0% 53 0% 88 0% 121% 66%
Spain 37 0% 45 0% 45 0% 24 0% 22% -47%
United States 18 0% 18 0% 18 0% 37 0% 0% 106%
Portugal 121 1% 0 0% 0 0% 0 0% -100%
United Kingdom 0 0% 0 0% 0 0% 69 0%
TOTAL 15,338 100% 18,004 100% 15,824 100% 57,106 100% 17% 261%
Source:  Prepared by the Technical Secretariat on the basis of import declarations.G/SG/N/7/CHL/5
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Table 3
Domestic prices
Oil:  Nominal wholesale price (excluding VAT)
Month Pesos ($) Dollars (US$) Un. Fom
January-97 406,012 958 30.45
February-97 408,174 981 30.47
March-97 418,067 1,010 30.99
April-97 424,567 1,017 31.33
May-97 424,563 1,014 31.24
June-97 427,195 1,023 31.36
July-97 416,875 1,001 30.54
August-97 417,079 1,005 30.41
September-97 424,200 1,022 30.79
October-97 431,395 1,041 31.07
November-97 431,395 1,015 30.73
December-97 434,739 992 30.84
Average 1997 422,022 1,007 30.85
January-98 431,609 952 30.59
February-98 439,614 980 31.00
March-98 447,382 989 31.50
April-98 461,879 1,018 32.44
May-98 463,848 1,023 32.44
June-98 471,113 1,033 32.87
July-98 478,749 1,030 33.31
August-98 489,242 1,038 33.91
September-98 495,631 1,053 34.25
October-98 507,005 1,094 34.88
November-98 540,864 1,168 36.94
December-98 542,123 1,148 36.92
Average 1998 480,755 1,044 33.42
January-99 558,949 1,175 37.92
February-99 544,167 1,103 36.94
March-99 545,674 1,108 37.05
April-99 509,398 1,056 34.43
May-99 511,490 1,055 34.41
June-99 508,080 1,012 34.12
July-99 513,294 993 34.43
August-99 521,538 1,017 34.95
September-99 509,274 971 34.07
October-99 505,545 940 33.75
November-99 515,281 948 34.29
December-99 510,510 949 33.88
Average 1999 521,100 1,027 35.02G/SG/N/7/CHL/5
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Month Pesos ($) Dollars (US$) Un. Fom
January-00 520,574 1,000 34.46
February-00 520,241 1,014 34.36
March-00 525,927 1,043 34.56
April-00 538,177 1,059 35.14
May-00 522,350 1,001 33.91
June-00 537,486 1,015 34.80
July-00 521,759 961 33.71
August-00 509,540 925 32.88
September-00 488,391 863 31.44
October-00 489,915 863 31.37
Average 2000 517,436 974 33.66
Change 98/97 13.9% 3.7% 8.3%
Change 99/98 8.4% -1.6% 4.8%
Change January-October/(00/99) -1.0% -6.6% -4.4%
Source: Prepared by the Technical Secretariat on the basi s of data provided by the applicant and its own data.G/SG/N/7/CHL/5
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Table 4
Changes in the international price of soyabean oil
FOB Buenos Aires crude (US$/tonne)
Month Price FOB Month Price FOB Month Price FOB
Jan-95 693.2 Jan-97 510.3 Jan-99 525.3
Feb-95 658.6 Feb-97 510.7 Feb-99 462.1
Mar-95 643.8 Mar-97 515.8 Mar-99 409.6
Apr-95 605.5 Apr-97 514.1 Apr-99 422.5
May-95 573.8 May-97 526.9 May-99 407.9
Jun-95 578.7 Jun-97 525.1 Jun-99 375.2
Jul-95 584.2 Jul-97 518.0 Jul-99 356.0
Aug-95 594.3 Aug-97 521.2 Aug-99 377.4
Sep-95 588.9 Sep-97 542.7 Sep-99 390.5
Oct-95 597.5 Oct-97 588.3 Oct-99 373.0
Nov-95 583.0 Nov-97 630.1 Nov-99 364.2
Dec-95 563.7 Dec-97 622.3 Dec-99 358.9
Jan-96 535.9 Jan-98 627.9 Jan-00 363.1
Feb-96 519.0 Feb-98 628.2 Feb-00 347.4
Mar-96 503.6 Mar-98 645.2 Mar-00 336.4
Apr-96 542.4 Apr-98 637.6 Apr-00 351.1
May-96 558.2 May-98 648.5 May-00 311.5
Jun-96 533.8 Jun-98 601.8 Jun-00 292.0
Jul-96 493.6 Jul-98 581.1 Jul-00 296.4
Aug-96 495.0 Aug-98 584.0 Aug-00 301.2
Sep-96 524.8 Sep-98 605.2 Sep-00 289.3
Oct-96 500.5 Oct-98 591.0 1998 609.3
Nov-96 500.9 Nov-98 593.3 1999 401.9
Dec-96 507.0 Dec-98 568.1 Jan-Sep/99 414.1
Jan-Sep/00 320.9
Var. (99/98) -34%
Var. Jan-Sep
(00/99)-22%G/SG/N/7/CHL/5
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Changes in the international price of soyabean oil
0.0100.0200.0300.0400.0500.0600.0700.0800.0
PRICE CRUDE SOYABEAN OIL BUENOS AIRES (FOB)
Source:  Prepared by the Technical Secretariat on the basis of ODEPA data.
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