WORLD TRADE
ORGANIZATIONG/SG/N/8/LTU/1
G/SG/N/10/LTU/1
19 February 2002
(02-0833)
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
LITHUANIA
The following communication, dated 14 February 2002, has been received from the
Permanent Mission of Lithuania.
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Within the framework of the safeguard investigation on imports of non-dried pastry yeast,
Lithuania hereby presents the following notification to the Committee on Safeguards pursuant the
Articles 12.1(b) and 12.1(c) of the Agreement on Safeguards.
Lithuania notes its readiness for consultations with interested parties on this investigation
upon the request.
* * * * *
The investigation has been initiated and conducted following the provisions of the Law on
Protective (Safeguard) Measures which was in force on that time (Law of 23 May 2000).  Lithuania
did not inform the Committee on Safeguards about the initiation of this investigation pursuant theArticle 12.1 (a) of the Agreement on Safeguards, taking into account that Lithuania was not a WTO
Member by the date of initiation.
The safeguard measures were imposed according to the new Law on Protective (Safeguard)
Measures which was adopted on 4 December 2001 and entered into force on 19 December 2001.
According to the Law of 23 May 2000 (valid until 19 December 2001) and later according to
the new Law adopted of 4 December 2001, the Ministry of Economy initiates and conducts
investigation for determination of imports causing serious injury.  Ministry of Economy also submits
the proposals to the Government concerning the application of safeguard measures together with therelevant information specifying the facts and reasons thereof.
Following the Law, the Government takes the final decision on whether or not to apply the
measure.G/SG/N/8/LTU/1
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PROCEDURES
Date of initiation of the investigation:  13 January 2001.
Product subject to the investigation:  non-dried pastry yeast classified under tariff code
210210390.
The investigation was initiated pursuant on the application by the JSC "SEMA", which is a
sole manufacturer of non-dried pastry yeast in Lithuania.  Thus, it represents the sector of yeast
manufacturing by 100 per cent.  The sufficient evidence was presented on the basis of which the
investigation was initiated.
Upon the request of the Ministry of Economy of 27 December 2000, the Ministry of Foreign
Affairs informed the Governments of the countries- importers of non-dried pastry yeast into Lithuania
(Germany, France, Poland, Latvia, Estonia, Belarus, Turkey, Italy and the Czech Republic) over the
period under investigation, i.e. between 1997 and September 2000, about the application presented bythe JSC "SEMA" and the investigation to be conducted regarding the imports of non-dried pastry
yeast into the customs territory of Lithuania.
The Order of the Minister of Economy on the initiation of the investigation was published in
the Official Gazette No 4 on 12 January  2001, wherein it was also indicated that:
“Within the 20-day period set by the Order the interested parties were permitted to
submit their applications in writing for the possibility to get a hearing and provide the
investigation-related information, as well as written evidence and arguments
concerning the investigation.  None enterprise using yeast in their production process,none association of such enterprises or public institution, or consumers’ right
protection organization declared their interests in the aforesaid investigation.  The
Order was also sent to all known interested parties.”
In order to collect necessary facts and evidence required for the impartial investigation, the
Ministry of Economy has forwarded corresponding requests to all known exporters and importers of
yeast.
Responses to these requests have not been received.
Taking into consideration that the exporting countries have requested the consultations
regarding the protective (safeguard) measure to be applied, as well as on the basis of the received
supplementary information related to the investigation, the period of investigation by the  Order of theMinister of Economy has been extended.
On 10 November 2001 the Governments of the countries-importers of non-dried pastry yeast
into Lithuania (Germany, France, Poland, Latvia, Estonia, Belarus, Turkey, Italy and the Czech
Republic) were informed about the finding of the serious injury caused by imports of non-dried pastryyeast into Lithuania and the intention to apply a safeguard measure.  The information about the
conducted investigation regarding the imports of non-dried pastry yeast has been provided to these
countries.
Upon the request submitted by the Ministry of Economy of Poland and following the
provisions of the Article 13 paragraph 5 of the Law on Protective (Safeguard) Measures of
4 December 2001 that are in conformity with the respective provisions of the Article 12 paragraph 3
of the WTO Agreement on Safeguards, consultations were held on 30 November 2001 regarding theG/SG/N/8/LTU/1
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conducted investigation and determination of serious injury caused by imports of non-dried pastry
yeast into the customs territory of Lithuania and the intentions to propose to the Government to
impose the protective (safeguard) duty of 22 per cent on the product referred to.  Analogous
consultations were held on 27 December 2001 with the representatives of Latvia and Estonia.
After the consultations Estonia and Latvia, foll owing the Free Trade Agreement signed by the
Republic of Estonia, the Republic of Latvia and the Republic of Lithuania asked for the meeting of
the Joint Committee.  Such the meeting was held on 31 January 2002 in Vilnius.
On 11 February 2002 the Government of Lithuania made a decision to impose on imports of
non-dried pastry yeast into the customs territory of Lithuania, the protective (safeguard) duty of22 per cent for the period of 1 March 2002 – 31 December 2002 and duty of 16 per cent for the period
of 1 January 2003-31 December 2003.
NOTIFICATION UNDER ARTICLES 12.1(B) AND 12.1(C)
1. Information on whether there is an absolu te increase in imports or an increase in
imports relative to domestic production
During the investigated period (i.e., the period between 1997 and 3
rd quarter of 2000
(inclusive)) imports of non-dried pastry yeast in absolute terms increased almost five times.  Thetendency of imports increase provided in the tables:
(a) Absolute increase of imports
1997 1998 1999 1999
1
st - 3rd
quarters2000
1st - 3rd quarters
Imports 299 475 1,198 745 1,472
Increase as of
1997  (%) - 58.9 300.7 -As compared to the
corresponding period of 1999
97.6
Data in the table show that the imports of non-dried pastry yeast have increased each year
since 1997: imports in its absolute terms increased by 58.9 per cent in 1998 as compared to 1997;
while in 1999 it increased by even 152.2 per cent as compared to 1998.  During the 1st – 3rd quarters of
2000 the import volumes increased by 97.6 per cent as compared to the corresponding period of 1999.
(b) Increase of imports relative to domestic production
In 1997 the import volume accounted for 7 per cent as compared to the production volumes
produced by the local producer, in 1998 they represented 13.5 per cent.  In 1999 it increased sharply
and accounted for 48.7 per cent, and increased further up to even 124.7 per cent in the 1st – 3rd
quarters of 2000.G/SG/N/8/LTU/1
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Year Domestic production
(in tons)Imports
(in tons)Imports (by
percentage to
domestic production)
1997 3,269 229 7
1998 3,514 475 13.5
1999 2,460 1,198 48.7
2000 1st - 3rd quarters 1,180 1,472 124.7
(c) Increase of imports relative to consumption in the domestic market
 The import share in the domestic market increased from 8.5 per cent in 1997 to 13.1 per cent
in 1998 and also significantly increased in 1999 and accounted for 55.3 per cent in the 1st – 3rd
quarters of 2000.
Year 1997 1998 1999 2000 1st - 3rd quarters
Import share in the
domestic market (%)8.5 13.1 33.8 55.3
(d) The reduction of the average imports-price of the product under investigation
The average price of the imported yeast decreased by 3.8 per cent in 1998, as compared to
1997, while in 1999 – by 24.1 per cent, as compared to 1998.  During the 1st – 3rd quarters of 2000, the
average price of the imported yeast shrank by 22 per cent, as compared to the corresponding period of
1999.
1997 1998 1999 1999
1st-3rd
quarters2000
1st-3rd
quarters
The average
import-price
(LT/t)3,890 3,741 2,840 3,015 2,352
%, as compared
to the previous
year- -3.8 - 24.1 - - 22
2. Evidence of a serious injury or threa t thereof caused by increased imports
The investigation indicates that imports of non-dried pastry yeast to the customs territory of
Lithuania within the investigated period (from 1997 to the 3rd quarter of 2000) continuously and
considerably increased.  After considering all the relevant factors, the Ministry of Economy reached
the conclusion that the increased imports caused serious injury for the domestic industry.  The factors,
which the Ministry of Economy considered and whereby determined the serious injury for domestic
yeast industry, are as follows:
(a) Production
The volume of non-dried pastry yeast produced by the local producer increased by 7.5 per
cent in 1998, as compared to 1997.   Then it decreased by almost 30 per cent in 1999, as compared toG/SG/N/8/LTU/1
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the previous year.  The tendency of decrease was retained later and during the 1st-3rd quarters of 2000,
as compared to the same period of 1997, production volumes decreased by 49.9 per cent.
(b) Capacity utilization (%)
As the table below indicates, the capacity utilization rate decreased from 55.4 per cent in 1997
to 41.7 per cent in 1999, and it accounted only for 26.7 per cent within the period between the 1st and
the 3rd quarters of 2000.
1997 1998 1999 2000 1st - 3rd quarters
55.4% 59.6% 41.7% 26.7%
(c) Changes in productivity
1997 1998 19992000
1st-3rd quarters as
compared to 1997
1st-3rd quartersIncrease or decrease
from 1997
%
- 13.0 - 16.6 - 9.5
(d) Sales (total)
1997 1998 19992000
1st-3rd
quarters as
compared to 1997
1st-3rd quartersIncrease or decrease
from 1997
%
- 7.4 - 24.6 - 49.2
 (e) Sales in domestic market
1997 1998 19992000
1st-3rd
quarters  as
compared to 1997
1st-3rd
quartersIncrease or decrease
from 1997
%
- -2.4 - 27.5 - 49.2
Sales volumes were reduced by 27.5 per cent in 1999, as compared to 1997, and significantly
reduced (by 49.2 per cent) in the 1st–3rd quarters of 2000, as compared to the corresponding period of
1997.
(f) Share of the domestic market (%)
1997 1998 1999 2000 1st-3rd quarters
91.5 86.9 66.2 44.7
Reduction of the domestic market share was substantial.  The domestic market share
decreased from 91.5 per cent in 1997 to 44.7 per cent during the 1st–3rd quarters of 2000.G/SG/N/8/LTU/1
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(g) Reduction in the average price of the local yeast
The price of Lithuanian yeast increased by 2.5 per cent in 1998, as compared to 1997,
whereas, it decreased by 5.1 per cent within the 1st-3rd quarters of 2000, as compared to the
corresponding period of 1999.
 (f) Losses related to the yeast
The tendencies in the import share and the average import price rate of the product under
investigation show that during the period between 1997 and 1st-3rd quarters of 2000 the domestic
industry suffered losses from an intensive increase in imports of non-dried pastry yeast and the fall in
import prices.   Thus, the losses increased by 67.4 per cent in 1999, as compared to 1997, and such a
tendency prevails further on.
1997 1998 1999 Increase or decrease from
1997, % - -3.8 67.4
(h) Employment (exclusively in the production of yeast)
1997 1998 19992000
1st-3rd
quarters  as
compared to 1997
1st-3rd
quartersIncrease or decrease
from 1997
%
- -4.9 - 9.8 - 44.0
The employment rate reduced by 9.8 per cent in 1999, as compared to 1997, and that
downtrend in employment prevailed later.  The employment rate reduced by 44 per cent during the
1st-3rd quarters of 2000, as compared to the same period of 1997.
(j) Causal link
Analysis of the trend of imports, the conditions under which products are imported and
serious injury to the domestic yeast industry, resulting from such imports, allowed to make the
conclusion that the significant increase in the volume of imports during the investigated period as well
as underselling coincided with the deterioration of the situation in the domestic yeast industry.  In
fact, the after-effects of the injury considering all main factors noted above have resulted due to a
significant increase in imports of the product under investigation.  The production of yeast and
capacity utilization, which reached a peak of 3,514 tons and 59.6 per cent respectively in the periodbetween 1997-1998, declined to 2,460 tons and 41.7 per cent respectively in 1999.  At the same time
the domestic consumption increased marginally, i.e. by about 2.8 per cent, but decreased by 2.5 per
cent in 1999 and again increased marginally, i.e. by 1.8 per cent in the 1
st-3rd quarters of 2000.
However, the domestic producer lost his share in the domestic market from 91.5 per cent in 1997 to
44.7 per cent in the 1st-3rd quarter of 2000.
Imports during the investigated period increased from 299 tons in 1997 up to 1,472 tons in the
1st-3rd quarters of 2000, i.e. the increase of almost five times was registered, which replaced theG/SG/N/8/LTU/1
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domestic sales.  In this respect it was stated that the bigger drop of prices of the imported yeast was
observed, the greater import volumes of the yeast came into Lithuania.  The yeast was imported into
the Lithuanian market at reduced prices particularly in 1999.  Reduction of prices in 1999, as
compared to 1997, accounted for approximately 27 per cent.  In the 1st-3rd quarters of 2000 as
compared to the corresponding period of 1999, prices declined by approximately 22 per cent.  Such
significant reduction in import prices resulted in reduction of domestic prices.  This had further
negative impact on profitability of the company.  The greatest reduction both in total sales and sales in
the domestic market was also registered over the same period.
Besides, it should be noted that recently imports of yeast at lower than average import prices
boom from the countries from which the imports did not come into Lithuania during the investigatedperiod.
Conclusion on causation:  The Ministry of Economy after examination of the factors of an
objective and quantifiable nature, came up to the conclusion, that the injury suffered by domestic
yeast industry, was essentially caused by the substantial increase of imports.
3. Specific description of the referred product
The product under investigation is the non-dried pastry yeast (the code according to the EEC
Combined Nomenclature of Goods – HS 2102.10.390).
The yeast is micro-organisms (yeast - fungus) consisting of single immobile cells.  1 kg of
yeast contains about 5 million of such cells.  The covering of the yeast cells is distinguished for its
selective properties, i.e., it allows penetration inside the cells only of those materials that are
necessary for the cell feeding.
The pastry yeast - Saccaharomyces cerevisiae - is used for purposes of confectionery and
bread baking.  This is quickly reproducing yeast with characteristic development properties and
stability while keeping.  A light yellow or greyish colour is characteristic of fresh pastry yeast.  It has
a pleasant smell resembling that of alcohol.
Carbohydrates ferment into alcohol and carbon dioxide (yeast keeps leaving) while
reproducing processes take place in the yeast.  Due to bubbles of carbon dioxide the pastry becomes
porous, its mass incises, and it develops.
The domestically produced yeast is a like product of the imported product and is classified
under the same tariff position HS 2102.10.390.
The independent expert – the Department of Technology of Food Products of the Kaunas
University of Technology - has carried out a scientific investigation (the Head - Prof. Dr. Habil
G.Juodeikiene) on technological properties of the imported yeast and the yeast manufactured by the
JSC "Sema".  The conclusions of the investigation state the fact that the yeast produced by the JSC"Sema" is competitive in comparison with the imported one.
4. Specific description of the proposed measure
The protective (safeguard) measure is in form of additional duty.  Protective (safeguard) duty
is imposed despite of other duties imposed on the commodity referred to.G/SG/N/8/LTU/1
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The protective (safeguard) duty which is calculated by imposing the value (ad valorem)
customs tariff of 22 per cent on all the amounts of the non-dried pastry yeast being imported into the
customs territory of Lithuania has been proposed.
5. Proposed date of introduction of the safeguard measure
The proposed date of introduction of the safeguard measure is 1 March 2002.
6. Expected duration of the safeguard measure
The expected duration of the measure will be 22 months.
7. For a measure with 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.
Not applicable.
8. If the expected duration is over one year , provide the expected timetable for the
progressive liberalization of the measure.
The protective (safeguard) measure is to be imposed for the period from 1 March 2002 to
31 December 2003 and will be progressively liberalized as follows:
Duration From 01/03/2002 to 31/12/ 2002 From 01/01/2003 to 31/12/2003
Duty rate 22% 16%
9. Information relating to the extension of the measure
Not applicable.
10. Developing countries to which the measure does not apply pursuant to Article 9.1 of the
Agreement on Safeguards.
Pursuant the Article 9.1 of the Agreement on Safeguards and taking into account that there
are no imports from the developing countries, the imposed measure will not be applied for the
developing countries (see enclosed list of the developing countries according to the Order of Minister
of Foreign Affairs and Minister of Economy of 27 September 2000).G/SG/N/8/LTU/1
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Annex -The Order of the Minister of Foreign Affairs and Minister of Economy
No.114/327 of 27 September 2000
On the list of the developing countries from which imported goods to customs territory
of the Republic of Lithuania are granted exemptions foreseen under the Law
on Protective (Safeguard) Measures and the Law on Countervailing Duties
The list of the developing countries from which imported goods to customs territory of the
Republic of Lithuania are granted exemptions foreseen under the Law on Protective (Safeguard)
Measures and the Law on Countervailing Duties:
1. Afghanistan
2. Angola
3. Bangladesh
4. Belize5. Benin
6. Bhutan
7. Bolivia
8. Burkina Faso
9. Burundi10. Cambodia
11. Cameroon
12. Cape Verde
13. Central African Republic
14. Chad15. Comoros
16 Congo
17. Democratic Republic of Congo (former Zaire)
18. Côte d’Ivoire
19. Cuba
20. Djibouti
21. Egypt22. El Salvador
23. Equatorial Guinea
24. Eritrea
25. Ethiopia
26. The Gambia27. Ghana
28. Guinea
29. Guinea Bissau
30. Guyana
31. Haiti32. Honduras
33. India
34. Indonesia
35. Iraq
36. Kenya37. Kiribati
38. Korea, Republic of
39. Lao People’s Democratic Republic
40. LesothoG/SG/N/8/LTU/1
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41. Liberia
42. Madagascar
43. Malawi
44. Maldives45. Mali
46. Marshall Islands
47. Mauritania
48. Micronesia
49. Mongolia
50. Mozambique
51. Myanmar52. Nepal
53. Nicaragua
54. Niger
55. Nigeria
56. Pakistan57. Papua New Guinea
58. Rwanda
59. Saint Vincent & the Grenadines
60. Sao Tome and Principe
61. Senegal62. Sierra Leone
63. Solomon Islands
64. Somalia
65. Sri Lanka
66. Sudan67. Syria
68. Tanzania
69. Togo
70. Tonga
71. Tuvalu
72. Uganda
73. Vanuatu74. Vietnam
75. Yemen
76. Zambia
77. Zimbabwe
78. West Samoa
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