WORLD TRADE
ORGANIZATIONG/SG/N/7/KOR/4
11 November 1999
(99-4866)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD
MEASURE REFERRED TO IN ARTICLE 6
KOREA
The following communication, dated 8 November 1999, has been received from the
Permanent Mission of Korea.
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Pursuant to Article 12.4 of the Agreement on Safeguards and in light of the format for
notifications under the Agreement on Safeguards adopted by the Committee on Safeguards, the
Republic of Korea submits the following notification before taking a provisional safeguard measurereferred to in Article 6, as follows:
1. Product subject to proposed safeguard measure
The provisional safeguard measure shall apply to tariff subheadings 0710.80.2000 (frozen
garlic) and 2001.90.9060 (prepared or preserved by vinegar or acetic acid) of the Harmonized Tariff
Schedule of the Republic of Korea.
2. Type of proposed provisional safeguard measure
The provisional safeguard measure shall be applied in the form of a tariff increase by
applying an import duty of 285 per cent in addition to the current 30 per cent on imports of frozengarlic and prepared or preserved garlic by vinegar or acetic acid.  In total, a 315 per cent duty will be
applied to these products.
3. Proposed date of introduction of the provisional safeguard measure
13 November 1999.
4. Expected duration of the provisional safeguard measure
The duration of the provisional safeguard measure shall not exceed 200 days, during which
the investigation will proceed further.G/SG/N/7/KOR/4
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5. Preliminary determination that increased imports have caused serious injury
5.1 Imports of frozen garlic and prepared or preserved garlic by vinegar or acetic acid
In particular, imports of frozen garlic increased from 2,043 tons in 1996 to 3,768 tons in
1997, 7,795 tons in 1998, and 8,423 tons during the first half of 1999, and imports of prepared or
preserved garlic by vinegar or acetic acid increased from 901 tons in 1996 to 1,633 tons in 1997,
2,148 tons in 1998, and 1,067 tons during the first half of 1999.
Annual Imports of Frozen Garlic
(Tons, %)
Year 1996 1997 1998 1999 (Jan-June)
Quantity 2,043 3,768 7,795 8,423
Increase rate*    -34      84   107    183
* Percentage change from the same period of the previous year.
Annual Imports of Prepared or Preserved Garlic by Vinegar or Acetic Acid
(Tons, %)
Year 1996 1997 1998 1999 (Jan-June)
Quantity 901 1,633 2,148 1,067
Increase rate*   82      81     32      47
* Percentage change from the same period of the previous year.
Share of Imports by Country According to Weight
(%)
Year 1996 1997 1998 1999 (Jan-June)
Frozen garlic China 99.997
US 0.003China 100 China 100 China 99
Japan 0.1
Prepared orpreserved garlicChina 100 China 99.96
Bangladesh 0.03US 0.01China 99.1
Thailand 0.9China 100
5.2 Domestic market share of the imported products
The domestic market share of the imported garlic increased from 3.3 per cent in 1996 to
6.2 per cent in 1997, and 11.0 per cent in 1998.  Considering that the domestic market share of the
imported garlic was 4.2 per cent in the first half of 1998 and it increased to 10.6 per cent in the first
half of 1999, the market share of 1999 is expected to exceed that of 1998, 11.0 per cent.
5.3 Profit of domestic garlic producers
Increased imports of garlic resulted in income reduction of domestic garlic producers.  Profits
of the domestic garlic industry in terms of Won (Korean currency) per hectare in the first half of 1999
decreased to 43 per cent of the profits of the same period of the previous year, which is the lowestlevel during the investigation period.G/SG/N/7/KOR/4
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5.4 Number of garlic producers
The number of garlic producers decreased from 533,000 farming households in 1996 to
490,000 in 1997, 452,000 in 1998, and 424,000 in 1999.
5.5 Garlic price in the domestic market
The domestic market price of imported garlic which includes c.i.f., duties and other charges,
and profit margin, etc. decreased from W 3,873 per kilogram in 1996 to W 2,513 in 1997, W 2,479 in
1998, and W 1,827 in the first half of 1999.  The low price of imported garlic has caused a downward
pressure on the price of domestic garlic to fall below the proper level or hindered the proper price
increase.
5.6 Causal relations between import increase and serious injuryGenerally, the price of garlic is influenced by the production of the year, quality and
consumption level.  To neutralize the effects of these factors on the price level, the Korean TradeCommission compared the average monthly price index during the past five years (June 1993-
May 1998) with that of the latest one year period (June 1998-May 1999).
The figures in the price index of the past five years show that garlic prices were at the lowest
level in June, the harvest season, and rose afterwards until the following May due to storage cost.  Onthe other hand, the recent data indicates a different pattern that the monthly price index fell
continuously after December.
Considering the fact that there is no production between December and May, the Commission
determined that the abnormal decrease in the price index from December 1998 to May 1999 wascaused by a sharp increase of garlic imports.
6. Determination of critical circumstances where delay would cause damage which would
be difficult to repair
Considering other market-related factors together with the above-mentioned data, the Korean
Trade Commission determined that the increase in ga rlic imports has caused serious injury to the
domestic industry, which is referred to in Article 6 of the Agreement on Safeguards.  In addition, the
survey by the Korean Trade Commission shows that frozen garlic and prepared or preserved garlic by
vinegar or acetic acid are substitutes for fresh or chilled garlic in the domestic market.  However, the
current tariff rate of 30 per cent for frozen garlic and prepared or preserved garlic by vinegar or acetic
acid is unbalanced, compared with the tariff rate of 380 per cent or W 1,900 per kilogram for othergarlic products.  The Korean Trade Commission found that the imbalance between the substitutive
garlic products leads to a sharp rise in the importation of frozen garlic and prepared or preserved
garlic by vinegar or acetic acid.
Since the garlic consumption level reaches its peak in November and December when most
households make a large quantity of Kimchi (one of the staple diets in Korea made of salted cabbages,
garlic, pepper. etc.) for winter, the continued importation of frozen garlic and prepared or preserved
garlic by vinegar or acetic acid is likely to create unfavourable conditions to the domestic garlic
industry and any delay would cause irreparable damages to the industry.
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