WORLD TRADE
ORGANIZATIONG/SG/N/10/JOR/3
24 February 2003
(03-1120)
Committee on Safeguards Original:  English
NOTIFICATION PURSUANT TO ARTICLE 12.1(C)
OF THE AGREEMENT ON SAFEGUARDS
JORDAN
The following communication, dated 19 February 2003, has been received from the
Permanent Mission of the Hashemite Kingdom of Jordan.
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The Permanent Mission of the Hashemite Kingdom of Jordan presents its compliments to the
Committee on Safeguards and has the honour to enclose herewith a notification under Article 12.1(c)
of the Agreement on Safeguards regarding the decision to apply safeguard measures to remedy
domestic industry from serious injury caused by increased imports of pasta in all its forms andspecifications, as mentioned in the notification, with the request to have it circulated to the Members.G/SG/N/10/JOR/3
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NOTIFICATION UNDER ARTICLE 12.1(C)
In accordance with Article 12.1(c) of the Agreement on Safeguards, Jordan hereby submits its
notification on deciding to apply a safeguards measure to remedy domestic industry from serious
injury caused by increased imports of pasta in all its forms and specifications.
1. Evidence of serious injury or threat  thereof caused by increased imports
The National Production Protection Directorate (NPPD) has determined that the subject
product has been imported into Jordan in such incr eased quantities during the period of investigation
(1998-2001), as to be a substantial cause of serious injury to the domestic industry.  NPPD has
recommended the appropriate remedy to the Minister of Industry and Trade who decided to
recommend to the Council of Ministers the application of.
The following are the conclusions reached by NPPD:
(a) Increased Imports
Years 1998 1999 2000 2001
Volume (in kilograms) 1172293 1898539 2396590 3067018
Absolute annual increase (in %) - 62% 26% 28%
Absolute increase (comparison with
base year)- 62% 104% 162%
Market share (in %) 16% 24% 31% 35%
Ratio between imports and domestic
production (in %)19% 31% 45% 55%
Unit prices (in dinar/kilogram) 0.440 0.390 0.348 0.344
The product concerned is being imported in quantities that have increased suddenly, sharply
and significantly in the most recent past.  The absolute increase in imports of 62 per cent, 104 per cent
and 162 per cent over the base year 1998 to 2001 is sudden, sharp and significant.  This also applies to
the increase in imports relative to domestic production from 19 per cent in 1998 to 55 per cent in
2001.
In observing increase trends of subject imported product in the first 6 months of the year
2002, it appeared that imports have increased in absolute terms by 195 per cent which shows that the
increase is recent, significant and sharp.
(b) Serious Injury
Situation of Domestic Industry
Years 1998 1999 2000 2001
Capacity (in kg) 13500000 13500000 13500000 13500000
Utilization rate of capacity (in %) 46% 46% 40% 41%
Total domestic production (in kg) 6175807 6187662 5359423 5584487
Total domestic sales (in kg) 6252343 6146746 5389860 5583913
Closing stock (in kg) 128164 169080 138643 139217
Unit prices of domestic sales (JD/kg) 0.524 0.499 0.437 0.436
Net profit/loss on domestic sales
(in %)13% 19% 6% 8%
Market share (%) 84% 76% 69% 65%
Employment (end of period) 62 62 69 71G/SG/N/10/JOR/3
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Years 1998 1999 2000 2001
Productivity (kg/employee) 99610 99801 77673 78655
Based on the above, it was found that:
• Overall production capacity remained stable over the period under consideration (the
four years 1998 to 2001), proving no growth plans by the industry.
• The declining utilization rate of capacity, given fixed capacity, proves that domestic
production is decreasing.
• Sales of domestic industry significantly decreased by 2 per cent, 14 per cent and
11 per cent in 1999, 2000 and 2001 respectively.  It is apparent that the ultimate
decrease in domestic production was in 2000 and 2001, which, in turn, coincides with
the decrease in the volume of production.  As for the decrease in the volume of sales
in 1999 in comparison with the volume of production in the same year, it is clear thatthe impact of the sudden increase in imports would lead local producers to reduce
production in the following years as a result of such increase in imports.
• The sudden increase in imports in 1998 resulted in a deterioration of domestic sales,
which resulted in a surge in domestic stocks over the years 1998 to 1999.  Inventoryrose from 128,164kg to 169,080kg;  an increase of 32 per cent.  Inventories decreased
in subsequent years but were still above the base year.
• Employees were not profoundly affected by the decrease in volume of production and
sales;  employment increased by 14 per cent over the period under consideration.  Thecombination of drop in domestic sales and increase in employment resulted in
declining productivity (by 21 per cent).
• The market share of domestic industry sharply decreased, from 84 per cent in 1998 to
65 per cent in 2001.
• The profit margin of the local industry decreased from 13 per cent to 8 per cent.
In examining the economic indicators, it is determined that the domestic industry is seriously
injured, as it has lost market share, which reached its lowest level in 2001.  Also, other economic
indicators of production, sales, capacity utilization and productivity fell sharply during the period of
investigation.  Profitability has also suffered greatly during the period of investigation.
(c) Causation
Total consumption increased by 16.5 per cent over the four years.  Import volume increased
significantly by 161.6 per cent, domestic production decreased by 9.6 per cent, inventories rose by 8.6
per cent, market share of domestic products fell from 84 per cent to 65 per cent, and net profit
decreased from 13 per cent of sales to 8 per cent.  These effects prove that there is a causal link
between the increased volume of imports and reduced sales volume of the like product.  The statistical
correlation of -0.76 between imports and domestic production shows a strong negative relationshipbetween the two indicators.  The attributed increase  of imports coincidences with significant, sharp
and recent deterioration of injury indicators, pointing to a serious overall impairment of the domestic
industry's situation.
The competent authority has determined that the conditions of competition between imports
and domestic product do exist.  Moreover, no other injury factors attributed to injury of the domestic
industry;  as the increase of imports was the sole reason for serious injury of the domestic industry.G/SG/N/10/JOR/3
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2. Provide a precise description of the product involved
The product concerned is pasta in all its forms and specifications.  The product concerned is
currently classified under HS headings (1902.191, 1902.11 and) - main HS heading 1902, identified
as pasta whether cooked or stuffed with meat or any other material or otherwise prepared such as
spaghetti, macaroni, noodles, lasagna, gnocchi, cannelloni or Coucous (Moroccan).
3. Provide a precise description of the proposed measure
The Council of Ministers has decided to apply definitive safeguard measures for a period of
three years, in the form of a specific tariff surcharge of 110 fils per kg to be reduced by 35 fils each
subsequent year the measure is in effect.
4. Provide the expected duration of the measure
Time schedule of application of the measure is pending approval by the Council of Ministers.
5. For a measure with the duration of more than three years, provide the proposed date
for this review (under Article 7.4) to hold not later than mid-term of the measure, if
such a date for review has already been scheduled.
Not applicable.
6. If the expected duration is over one year, pr ovide the expected timetable for progressive
liberalization of the measure.
The measure shall be progressively liberalized as follows:
• From 25 February 2003 to 24 February 2004
• From 25 February 2004 to 24 February 2005
• From 25 February 2005 to 24 February 2006
JD/KG:
• 110 Fils
• 75 Fils
• 40 Fils
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