WORLD TRADE
ORGANIZATIONG/SG/N/8/USA/3/Rev.1
15 April 1999
(99-1498)
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
UNITED STATES
Revision
The following communication, dated 13 April 1999, has been received from the Permanent
Mission of the United States.
_______________
Enclosed is a revised notification, pursuant to Article 12.1(b) of the WTO Agreement on
Safeguards, regarding the finding, by the United States International Trade Commission, of threat of
serious injury to the domestic industry caused by increased imports of lamb meat.1
Pursuant to Article 12.1(b) of the Agreement on Safeguards, and in light of the formats for
notifications adopted by the Committee (G/SG/W/1, 23 February 1995), the United States provides
notification of a finding of threat of serious injury caused by increased imports of lamb meat.
On 9 February 1999, the United States International Trade Commission (USITC) voted 6-0
that lamb meat is being imported into the United States in such increased quantities as to be a
substantial cause of threat of serious injury to the domestic lamb meat industry.  The USITC
forwarded its injury findings and remedy recommendations to the President on 5 April 1999.  This
report contains the USITC's analysis and a summary of the information collected during theinvestigation.
With this notification, the United States provides a copy of the USITC's report, excluding
confidential business information, to the Committee.  We understand that the Committee will make a
copy of the report - which is over 60 pages long - available to Members upon request.  The passagesin quotes in items 1 and 2 below are short excerpts from the USITC's findings (omitting footnotes).
The USITC's full analysis is set out in the report.
Consistent with Article 12.3 of the Agreement on Safeguards, the United States is prepared to
consult with those Members having a substantial interest as exporters of the product concerned, with aview to, inter alia, reviewing the information provided in this notification and the USITC report,
exchanging views on the measure and reaching an understanding on ways to achieve the objective set
out in Article 8.1 of the Agreement on Safeguards.
                                                     
1 A copy of the full USITC report is available for reference by WTO Members.  Contact
Ms. S. Aspinall, Tel:  739 5109).G/SG/N/8/USA/3/Rev.1
Page 2
1. Evidence of serious injury or threat thereof caused by increased imports
- Increased Imports:  “We find that imports have increased both in actual terms and relative to
domestic production.  [US Department of ] Commerce data converted to carcass weight equivalents
using USDA [US Department of Ag riculture] conversion factors indicate that imports increased by
nearly 50 per cent during the period of investigation, as follows: 41.0 million pounds in 1993, 38.7
million pounds in 1994, 43.3 million pounds in 1995, 50.7 million pounds in 1996, and 60.4 million
pounds in 1997.  Imports also increased between January-September 1997 and January-September
1998, from 46.1 million pounds to 55.1 million pounds.  The ratio of imports to domestic production
rose continuously during the period of investigation, from 12.5 per cent in 1993 to 24.1 per cent in
1997.  The ratio rose further in January-September 1998 to 30.5 per cent, as compared with 24.6 per
cent in the same period in 1997.”
- Serious Injury: “In view of the declines during the period of investigation in the domestic
industry’s market share, production, shipments, profitability, and prices, among other difficulties that
the domestic industry is facing, we conclude that it is threatened with imminent serious injury.”
- Causation:  “As required by the statute, we considered whether any other causes might be a
more important cause of the threat of serious in jury than increased imports.  First, we examined
whether termination of payments under the National Wool Act of 1954 (“Wool Act” ) might be a
more important cause.
We have no doubt that the loss of Wool Act payments hurt lamb growers and feeders and
caused some to withdraw from the industry.  We also believe that it is unrealistic to conclude that the
effects of the termination of Wool Act payments had completely disappeared as of 1997.  However,
the industry had experienced some recovery since full termination in 1996, and the effects of
termination of Wool Act payments can be expected to recede further with each passing month.  Inaddition, the termination of the Wool Act could only have had an indirect effect on the financial
condition of the packers and breakers, who never received payments under the Wool Act.  We find
that in the imminent future, the recent loss of Wool  Act payments is a less important cause of the
threat of serious injury than imports of lamb meat.
We also considered whether competition from other meat products, such as beef, pork and
poultry, might be a more important cause of the threat of serious injury … we find no evidence thatsuch competition is a more important cause of future imminent serious injury than imports of lamb
meat.
We also considered whether increased input costs, alleged overfeeding of lambs, and
increased concentration in the packer segment might individually be more important causes of thethreat of serious injury than the increased imports.  We find that they are not. . . . there has been no
significant increase in input costs that explains the sharp decline in industry profits, and no increase is
predicted in the imminent future.
Even if we accept respondents arguments [that in 1997 some US feeders held lambs unduly
long in feed lots], these “fat” lambs would have accounted for no more than a small share of total
domestic lamb production.  In any event, respondents do not allege that overfeeding is currently
taking place or represents a future threat.
We also considered whether concentration in the packer segment of the industry might be a
more important cause of the threat of serious injury … .  An undue level of concentration among
packers would have suggested that they would have been sheltered from the effects of low-priced
imports and would have been able to pass through lower prices more readily to feeders and growers.
However, packers, like other segments of the lamb meat industry, experienced deteriorating profits inG/SG/N/8/USA/3/Rev.1
Page 3
the latter part of the period of investigation and operated at a loss in January-September 1998.  Thus,
we conclude that concentration in the packer segment of the industry is a less important cause of the
threat of serious injury than increased imports.
Finally, we considered whether the failure to develop and implement an effective marketing
programme for lamb meat was a more important cause of the threat of serious injury, particularly in
light of the repeal of the longstanding Wool Act payment programme.  While an effective marketing
programme to bolster domestic demand could have had an important impact on the industry, in the
view of the foregoing discussion, we do not find that failure to implement such a programme is a
more important cause of the threat of serious injury than increased imports.
In conclusion, we find that the increased imports are an important cause, and a cause no less
important than any other cause, of the threat of serious injury to the domestic lamb meat industry.
Our finding is based on the increase in imports that has already occurred, and which shows every sign
of continuing, the increase in the share of the domestic market taken by imports, depressed domestic
lamb meat prices due in large part to the increase in imports, and the high degree of likelihood that the
increased imports will have a substantial negative effect on the volume or prices, or both, of the USindustry’s lamb meat sales.”
- Provide information on whether there is an absolute increase in imports
As noted above the USITC found that imports increased both in absolute terms and relative to
domestic production.
- Provide a precise description of the product involved
The imported article covered by this investigation is fresh, chilled, or frozen lamb meat.
Lamb meat is provided for in subheadings 0204.10.00, 0204.22.20, 0204.23.20, 0204.30.00,
0204.42.20, and 0204.43.20 of the Harmonized Tariff Schedule of the United States.  Excluded from
the scope of the investigation are imports of live lambs and sheep and meat of mature sheep (mutton).
- Provide a precise description of the proposed measure
As a safeguard measure the USITC recommends that the President:
- impose a tariff-rate quota system, for a 4-year period, on imports of lamb meat that are the
subject of this investigation, as follows (all weights are in terms of carcass-weight equivalents):G/SG/N/8/USA/3/Rev.1
Page 4
Year Tariff Rate Quota
First 20 per cent ad valorem on imports over 78 million
pounds;
Second 17.5 per cent ad valorem on imports over
81.5 million pounds;
Third 15 per cent ad valorem on imports over
81.5 million pounds; and
Fourth 10 per cent ad valorem on imports over
81.5 million pounds
- implement appropriate adjustment assistance to facilitate efforts by the domestic industry to
make a positive adjustment to import competitive and provide greater economic and social benefits
than costs.
- exclude from the relief imports from Canada and Mexico under section 311(a) of the NAFTA
Implementation Act in view of the USITC's finding that imports from those countries either do not
account for a substantial share of total imports or do not contribute importantly to serious injury, or
both.
- exclude from the relief imports from Israel, and any imports that enter duty free from
beneficiary countries under the Caribbean Basin Economic Recovery Act or the Andean Trade
Preference Act, in view of the USITC's finding that there were few or no imports of lamb meat  from
these countries.
- under US law, the President generally has 60 days from receipt of a USITC report containing
an affirmative determination of serious injury to determine what safeguard action, if any, he will take.
Among the types of safeguard action the President may impose are a quantitative restriction, increased
tariffs, or a tariff-rate quota.
– Provide proposed date of introduction of the measure
The 60-day period mentioned in item (4.) expires on 4 June 1999.  Under US law, any action
proclaimed by the President usually must take effect no later than 15 days thereafter.
– Provide expected duration of the measure
As noted above, the USITC has recommended a tariff rate quota for a period of 4 years.
– For a measure with a duration of more than three years, provide the proposed date for the
review to be held not later than the mid-term of  the measure, if such a date for the review has
already been scheduled
If the measure imposed has a duration of (4.) years a review will be held no later than the
2-year mark, but no date has been scheduled.G/SG/N/8/USA/3/Rev.1
Page 5
– If the expected duration is over one year, provide expected timetable for progressive
liberalization of the measure
As reported in the response to item (4.)
__________