WORLD TRADE
ORGANIZATIONWT/DS278/1
G/L/599G/SG/D30/1
8 January 2003
(03-0039)
Original:  Spanish
CHILE – DEFINITIVE SAFEGUARD MEASURE ON
IMPORTS OF FRUCTOSE
Request for Consultations by Argentina
The following communication, dated 20 December 2002, from the Permanent Mission of
Argentina to the Permanent Mission of Chile and to the Chairman of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.
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I have been instructed by my Government to contact you in order to request consultations
with Chile pursuant to Article XXIII:1 of the GATT 1994, Article 4 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU) and Article 14 of the Agreement onSafeguards, in connection with the application by the Government of Chile of a definitive safeguard
measure on imports of fructose, classified under tariff heading 1702.60.90.
I. THE FACTS
On 19 November 2002, Chile enacted Decree No. 522 of the Ministry of Finance establishing
a definitive safeguard measure on imports of fructose.  The measure consists in an ad valorem  tariff
surcharge of 14 per cent on imports of "other fructo se and fructose syrup, containing in the dry state
more than 50 per cent by weight of fructose", classified under tariff heading 1702.60.90 of the
Chilean Harmonized System, other than 100 per cent fructose.  The measure will remain in force for a
period of one year counted from 30 July 2002, i.e. the date on which a provisional safeguard measure
was established in the context of the investigatory process initiated before the Chilean Commission on
Distortions.
The safeguard measure was requested by the firm IANSA S.A., which holds the monopoly for
refining granulated beet sugar and is Chile's main sugar importer.
II. CLAIMS
Chile has departed from the provisions of the GATT 1994 and the Agreement on Safeguards
in its determination regarding the following:
(1) Unforeseen developments , considering that there were no unforeseen developments
warranting exceptional action such as the application of a safeguard measure.
(2) Definition of the like or directly competitive product and the domestic industry , insofar
as the product defined as a like product or direct competitor of liquid sugar, namely 55 per
cent fructose and fructose syrup for industrial use, cannot compete with liquid sugar, sinceIANSA – improperly defined as the affected industry – produces only granulated sugar.   OnWT/DS278/1
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account of its physical differences, the distribution systems and logistics, final uses, consumer
preference and economic factors, granulated sugar cannot be defined as a like product or
direct competitor of 55 per cent fructose and fructose syrup.
(3) Increased imports , considering that there was no finding of such an increase in imports in
absolute terms and in relation to domestic production or of an increase in such conditions as
to threaten to cause serious injury to the domestic industry producing like or directly
competitive products.
(4) Increase in imports in conditions such as to  threaten to cause serious injury, the analysis
of the factors and the clear imminence of serious injury , because the existence of a threat
of serious injury cannot be concluded from the factors analysed, since the rate and amount of
the increase in imports in absolute and in relative terms did not warrant the application of a
safeguard measure;  the registered increase in production stemmed from record production of
the input, which diminishes the importance of the increase in inventories.  Similarly, the ratioof the share of imports to the alleged loss of domestic sales to the industrial sector can in no
way be attributed to the increase in the imports at issue.  In addition, factors such as
productivity, capacity utilization, employment and profits do not support the authority's
determination.  Data relating to consumption shows that the latter has remained stable.
Lastly, in determining the threat of injury the authority fails to demonstrate that the threat is
clearly imminent;  indeed its determination is merely based on conjecture and remote
possibility, considering that the file of the investigation contains no prospective analysis of all
the relevant factors.
(5) Determination of causal link , to the extent that the existence of a causal link between
increased imports of 55 per cent fructose and fructose syrup and the threat of serious and
imminent injury to the domestic industry has not been demonstrated on the basis of objective
evidence;  nor did the authority analyse factors other than the increased imports of 55 per cent
fructose that had a bearing on the situation of the domestic industry.
(6) Publication and investigation , considering that Record No. 262 was not published and
Decree No. 522 of the Ministry of Finance pub lished in the Official Journal contains no
findings or reasoned conclusions on all pertinent issues of fact and law.  Moreover, the
implementing authority evaluated confidentia l information without the applicant having
justified the confidential nature of factor-related data or having furnished non-confidential
summaries, although these had been requested by the authority.
(7) Determination of the measure necessary to  prevent or remedy the threat of serious
injury and facilitate adjustment , since the investigating authority did not offer any
justification that the measure and its period of application, which were not even weighed by
the authority, were those necessary to prevent or remedy the threat of serious injury and
facilitate adjustment.
(8) Re-introduction of the measure , since Chile is re-introducing a safeguard measure before
the minimum periods stipulated in the Agreement have elapsed.WT/DS278/1
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III. LEGAL BASIS
In the light of the above considerations, Argentina considers that the aforementioned
definitive safeguard measure is inconsistent inter alia , but not exclusively, with Chile's obligations
under the following provisions of the Agreement on Safeguards and the GATT 1994:
(1) Article XIX:1(a) of the GATT 1994;
(2) Article 2.1 and Article 4.1(c) of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994;
(3) Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994;
(4) Article 2.1, Article 4.2(a) and Article 4.1(b)  of the Agreement on Safeguards and Article
XIX:1(a) of the GATT 1994;
(5) Article 4.2(b)  of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994;
(6) Article 3.1 and Article 3.2 of the Agreement on Safeguards;(7) Article 5.1 and Article 7.1  of the Agreement on Safeguards and Article XIX:1(a) of the
GATT 1994;  and
(8) Article 7.5  of the Agreement on Safeguards.
In these circumstances, Argentina requests consultations with Chile, pursuant to
Article XXIII:1 of the GATT 1994, Article 4 of the DSU and the respective rules of the Agreement on
Safeguards, at a mutually agreed date and place.
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