RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/M/17
25 September 2001
(01-4559)
Committee on Safeguards
MINUTES OF THE REGULAR MEETING
HELD ON 30 APRIL 2001
Chairman:  Mr. J. Phoho Setipa (Lesotho)
1. The Committee on Safeguards (the "Committee") held a regular meeting on 30 April 2001.
2. The following agenda was adopted:
A. NATIONAL LEG ISLATI ON.....................................................................................................2
1. Review of Notifications of New or Amended Legislation or Regulations not
previously reviewed by the Committee (including supplemental notifications ofexisting provisions not previously reviewed)..........................................................................2
(a) Czech Republic (G/SG/N/1/CZE/3) ...........................................................................................3
(b) Estonia (G/SG/N/1/EST/2) .................................................................................................... .....3
(c) Jordan (G/SG/N/1/JOR/1)..................................................................................................... ......3
(d) Lesotho (G/S G/N/1/LSO/1).................................................................................................... ....4
(e) Slovenia (G/SG/N/1/SVN/2) ................................................................................................... ...4
(f) Tunisia (G/SG/N/1/TUN/2) .................................................................................................... ....4
B. NOTIFICATIONS OF ACTIONS R ELATED TO SAFEGUAR D MEASURES .....................5
(a) Argentina - Peaches (G/SG/N/6/ARG/4 + Suppl.1 + SUPPL.2, G/SG/N/7/ARG/2 +
Suppl.1 + Suppl.2) ............................................................................................................. .........5
(b) Bulgaria – Ammonium Nitrate (G/SG/N/ 6/BGR/1, G/SG/N/7/BGR/1 + Suppl.1)....................8
(c) Chile – Mixed Oils (G/SG/N/6/CH L/5, G/SG/N/7/CHL/5 + Suppl.1).......................................8
(d) Chile - Liquid/Powdered Milk (G/SG/N/8/CHL/2, G/SG/N/10/CHL/3,
G/SG/N/11/CHL/3)............................................................................................................... ......9
(e) Chile – Wheat, Wheat Flour, Sugar, Edible Vegetable Oils
(G/SG/N/10/CHL/1/Suppl.2 + CORR.1, G/SG/N/11/CHL/ 2, G/SG/N/14/CHL/1) .................11
(f) Chile– Synthetic Socks (G/SG/N/10/C HL/2 + Suppl.1, G/SG/N/11/CHL/1) ..........................12
(g) Colombia – Taxis (G/SG/N/9/COL/1)......................................................................................12
(h) Czech Republic – Footwe ar (G/SG/N/6/CZE/2) ......................................................................12
(i) Czech Republic – Isoglucose (G /SG/N/6/CZE/3, G/SG/N/7/CZE/2).......................................13
(j) Ecuador – Matches (G/SG/N/7/ECU/1)....................................................................................13
(k) Egypt – Fluorescent Lamps (G/S G/N/6/EGY/2/Suppl. 1, G/SG/N/8/EGY/3,
G/SG/N/10/EGY/3) ............................................................................................................... ...13G/SG/M/17
Page 2
(l) India – Gamma Ferric Oxide/Magne tic Iron Oxide (G/SG/N/8/IND/9)...................................13
(m) India – Methylene Chlori de (G/SG/N/8/IND/10) .....................................................................14
(n) India - Phenol (G /SG/N/14/IND/1)...........................................................................................1 4
(o) Japan - Tatami-Omote, Welsh Onion A nd Shiitake Mushrooms (G/SG/N/6/JPN/1 +
CORR.1) ........................................................................................................................ ...........14
(p) Jordan - Chocolates/Bis cuits (G/SG/N/6/JOR/1)......................................................................15
(q) Morocco - Bananas (G/SG/N/7/MAR/1) ..................................................................................15
(r) Morocco - Rubber (G /SG/N/6/MAR/2)....................................................................................16
(s) Poland - Nitrates of Po tassium (G/SG/N/6/POL/1) ..................................................................16
(t) El Salvador - Pig Meat (G/SG/N/6/SLV/ 1/Suppl.2 + Suppl. 3, G/SG/N/9/SLV/1) .................17
(u) El Salvador - Rice (G/S G/N/6/SLV/2/Suppl.1) ........................................................................17
(v) El Salvador - Fertiliz ers  (G/SG/N/6/SLV/3)............................................................................17
(w) Slovak Republic - Sugar/Sucros e (G/SG/N/6/SVK/2 + CORR.1) ...........................................17
(x) United States - Extruded Rubb er Thread (G/SG/N/9/USA/3) ..................................................17
C. RESULTS OF INFORMAL CONSUL TATIONS ON 1 FE BRUARY 2001 ..........................17
D. OTHER BU SINESS ............................................................................................................... ..21
1. Report of the Committee to the Council for Trade in Goods in connection with
the Fourth Ministerial Conference........................................................................................21
2. Matter raised by the European Communities......................................................................21
3. Matter raised by the United States........................................................................................22
E. DATE OF NEXT RE GULAR MEETING ...............................................................................22
F. ELECTION OF OFFICE RS .....................................................................................................22
A. NATIONAL LEGISLATION
1. Review of Notifications of New or Amended Legislation or Regulations not previously
reviewed by the Committee (including supplemental notifications of existing provisionsnot previously reviewed)
3. The Chairman recalled that questions regarding newly notified legislations were to have been
submitted to the Member concerned and to the Secretariat no later than 9 April 2001.  Egypt
(G/SG/Q1/JOR/1) and the European Communities (G/SG/Q1/JOR/2) had posed questions concerning
the legislative notification of Jordan.  The European Communities had also posed questions regarding
the legislative notification of Tunisia (G/SG/Q1/TUN/1).  The Chairman recalled that follow-upquestions could be asked at this meeting, and that other delegations also had an opportunity to present
questions orally at this meeting.  If Members wished to have written answers to questions, they should
ensure that all questions were presented in writing to the Member whose legislation was concerned,
and to the Secretariat, no later than 21 May 2001.  Written answers to all questions submitted in
writing by that deadline should be submitted to the Secretariat no later than 11 June 2001.G/SG/M/17
Page 3
(a) Czech Republic (G/SG/N/1/CZE/3)
4. The Chairman stated that the legislative notification of the Czech Republic was contained in
document G/SG/N/1/CZE/3.
5. The questions of the United States concerning the legislative notification of the
Czech Republic are contained in document G/SG/Q1/CZE/3.
6. The delegate of Slovenia reserved his delegation's rights to put questions to the Czech
Republic.
(b) Estonia (G/SG/N/1/EST/2)
7. The Chairman stated that the legislative notification of Estonia was contained in document
G/SG/N/1/EST/2.
8. The questions of the United States concerning the legislative notification of Estonia are
contained in document G/SG/Q1/EST/1.  Estonia' s answers to these questions are contained in
document G/SG/Q1/EST/2.
(c) Jordan (G/SG/N/1/JOR/1)
9. The Chairman stated that the legislative notification of Jordan was contained in document
G/SG/N/1/JOR/1.
10. The representative of Jordan stated that effective 16 November 2000, Jordan enacted its
Regulation on Safeguard of National Production, No. 55 of 2000, which was circulated in document
G/SG/N/1/JOR/1.  As part of Jordan's commitme nts on its accession to the World Trade Organization,
and in anticipation of conforming Jordanian laws to rules set out in the WTO Agreement on
Safeguards, the Regulation followed the Safeguard of National Production Law No. 448 of 1998 and
was legally founded on the basis of Article 14 of the law, which provided that, "The Council of
Ministers shall issue the necessary regulations for the purpose of implementation of this law."  The
Jordanian Safeguards Regulation incorporated all disciplines and elements of the Safeguards
Agreement  and was entirely based on the same. This relationship was explicitly emphasized by
Article 38 of the Regulation, which provided that the provisions of the Regulation "shall beconstrued" according to the WTO Agreement on Safeguards.  The Jordanian Safeguards Regulation
comprised 39 Articles, distributed under titles in the following order: Definitions, Determination of
Injury, Safeguards Petitions, Initiation of Investigation, Termination or Conclusion of the
Investigation, Safeguards Measures and General Provisions.  The Jordanian Safeguards Regulation set
out every condition the Agreement required for applying a safeguards measure, and provided allnecessary procedures to achieve the goals of the Agreement.  The Regulation derived from the
Agreement all conditions, types, duration, mechanisms and the transparency of the process of
application of safeguard measures.  The Regulation required that the application of a safeguard
measure should only occur where it was determined upon investigation that the subject imported
product was being imported into Jordan in such increased quantities -- absolute or relative to domesticproduction -- causing, or threatening to cause, serious injury to the Jordanian domestic industry of the
like, or directly competitive, product.  The Regulation preserved transparency of the safeguards
investigation and demanded disclosure of confidential information, as required by the Agreement.
The Regulation also derived from the Agreement the mechanism and conditions for applying (and
terminating) a provisional safeguard measure.  Re garding means of enforcement, and in the light of
the fact that safeguards were novel to the Jordanian experience, the Jordanian Government was doing
its utmost to preserve accurate implementation of the Regulation.  In doing so, the National
Production Protection Department was established a year ago, and was granted authority to handleG/SG/M/17
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safeguards issues.  The National Production Protection Department was still in the process of
expansion, and was currently building its capabilities.
11. Egypt's questions concerning Jordan's legislative notification are contained in document
G/SG/Q1/JOR/1.  Jordan's answers to these questions are contained in document G/SG/Q1/JOR/5.
The delegate of Egypt thanked the delegation of Jordan for its replies and indicated that his delegation
would be looking at them carefully.
12. The questions of the European Communities concerning Jordan's legislative notification are
contained in document G/SG/Q1/JOR/2.  Jordan's replies to these questions are contained in
G/SG/Q1/JOR/6.
13. The questions of Turkey concerning Jordan's legislative notification are contained in
G/SG/Q1/JOR/3.  Jordan's answers to these questio ns are contained in G/SG/Q1/JOR/8 and Corr.1.
14. The questions of the United States concerning the legislative notification of Jordan are
contained in document G/SG/Q1/JOR/4.  Jordan's  answers to these questions are contained in
document G/SG/Q1/JOR/7.
(d) Lesotho (G/SG/N/1/LSO/1)
15. The Chairman observed that no written questions or comments had been received on the "nil"
notification submitted by the Kingdom of Lesotho  contained in the document G/SG/N/1/LSO/1.
(e) Slovenia (G/SG/N/1/SVN/2)
16. The Chairman stated that the legislative notification of Slovenia was contained in document
G/SG/N/1/SVN/2.
17. The questions of the United States concerning the legislative notification of Slovenia are
contained in document G/SG/Q1/SVN/1.  Slovenia's answers to these questions are contained in
document G/SG/Q1/SVN/2.
(f) Tunisia (G/SG/N/1/TUN/2)
18. The Chairman recalled that the legislative notification of Tunisia was contained in document
G/SG/N/1/TUN/1.
19. The questions of the European Communities regarding this notification are contained in
G/SG/Q1/TUN/1.  Tunisia's answers to these questions are contained in G/SG/Q1/TUN/3.
20. The questions of the United States concerning  the legislative notification of Tunisia are
contained in document G/SG/Q1/TUN/2.  Tunisia's answers to these questions are contained in
document G/SG/Q1/TUN/4.
21. The Chairman recalled the importance of providing written answers to written questions as
this was the only way that Members could maintain the transparency that was required for this
Agreement.
* * * * *G/SG/M/17
Page 5
22. The Chairman informed the Committee that 37 Members had not yet made a legislative
notification:
Albania, Angola, Antigua & Barbuda, Bangladesh, Barbados, Belize, Burkina Faso,
Burundi, Cameroon, Central African Repub lic, Congo, Croatia, Democratic Republic
of the Congo, Djibouti, Gabon, The Gambia, Georgia, Grenada, Guinea Bissau,
Guyana, Kuwait, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Oman,
Papua New Guinea, Rwanda, Saint Kitts & Nevis, Saint Vincent & Grenadines,
Sierra Leone, Solomon Islands, Swaziland, Tanzania and Togo.
While the Chairman realized that many of these Members were not represented at the meeting, in the
interest of transparency, he urged these Members to make the required notification.  In cases where nolegislation existed, only a very simple "nil" notification was required.
23. The Committee took note of all of the statements made concerning the legislative
notifications on the agenda.
B. NOTIFICATIONS OF ACTIONS RELATED TO SAFEGUARD MEASURES
24. The Chairman stated that, given the increasing use by Members of the safeguard mechanism,
the Committee regularly had a large number of notifications of actions related to safeguard measures
to review.  In order to ensure that all of these notifications could be reviewed in the limited timeavailable, it appeared appropriate to change the format for the regular Committee meetings.  Thus,
instead of continuing the past practice of review ing notifications by type, he suggested that the
Committee review relevant safeguard investigations separately, and review all of the notifications
pertaining to each investigation at the same time.
(a) Argentina - Peaches (G/SG/N/6/ARG/4 + Suppl.1 + Suppl.2, G/SG/N/7/ARG/2 + Suppl.1 +
Suppl.2)
25. The Chairman recalled that the notifications made  by Argentina in respect of its investigation
on peaches were contained in documents G/SG/N /6/ARG/4 and Suppl. 1 a nd 2, and G/SG/N/7/ARG/2
and Suppl. 1 and 2.
26. The delegate of Chile expressed her delegation's concern with the investigation and the
adoption of a provisional safeguard measure by Ar gentina on imports of canned peaches.  Chile's
concern arose because, due to the information provided, it was not possible to see an increase in levels
of imports.  In Chile's view, Argentina had not compli ed with a series of provisions in the Safeguards
Agreement regarding steps to be taken in the inve stigation, as well as requirements prior to the
adoption of the provisional measure.  Furthermore, Chile had a concern regarding the level of thesafeguard measure.  This measure was $0.50 per net kilo, when the price was $0.75 per net kilo.
While Chilean imports had been subject to an 11.5 per cent tariff, they now had a 80 per cent tariff.
Chile thought that the high level of this safeguard measure could be in violation of the provisions of
the Agreement.  Article 5 stated:  "A Member shall apply safeguard measures only to the extent
necessary to prevent or remedy serious injury and to facilitate adjustment."  Chile had heldconsultations with Argentina under Article 12.4 on 12 March 2001, and this was notified by
Argentina.  Despite the information exchanged at that time, Chile continued to have doubts as to the
compatibility of Argentina's measure.
27. The delegate of the European Communities shared the views of Chile on this case.  EC
exports were very affected by this measure and the European Communities had also expressed its
concern to Argentina in Article 12.4 consultations about a month ago.  The European Communities
was unsatisfied about the outcome of these consultations, and had a list of outstanding questions.G/SG/M/17
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Argentina appeared to have based its action on a threat of injury due to an imminent increase in
imports.  There was no real increase in imports.  The imminent increase in imports in 2001, it was
alleged, would take place due to an exceptional harvest in Greece.  His delegation was concerned with
this attitude.  This was a case of threat of injury where an increase in imports was not yet here, and
where the supposed future increase in imports was based on conjecture and not on facts.  This was aclear breach of Article 4.1(b) of the Safeguards Agreement.  This was pure conjecture because there
were no indications that -- despite a possible good harvest in Greece this year -- there would be
imports going to Argentina.  There were no imports en route  or otherwise proven to be destined for
Argentina, so it could not be other than conjecture.  In addition to this, there were no indications that
the domestic industry was suffering injury.  The indicators which Argentina had listed in its
notifications did not point to such an injury situation, and to conceive of a threat was difficult.  There
was an absence of any unforeseen development.  If anything, the unforeseen developments in this casepointed to the reverse situation: exports had declined in 1996-1997 due to exceptionally bad climate
conditions, and from then on, imports into Argentina had started to increase to the level at which they
were before.  So, it was very difficult to conceive of unforeseen developments leading to an increase
in imports which would cause threat of serious injury.  Moreover, Argentina had failed to provide
sufficient evidence to assess the existence of critical circumstances.  The European Communitiesbelieved that, since the existence of any threat of injury was highly doubtful, the existence of critical
circumstances was even more so.  Critical circumstances implied a higher standard to be met than
threat of injury.  The information provided by Arge ntina in this respect was not at all conclusive and
could not lead to such a conclusion.  The European Communities was surprised to see how Argentina
could reconcile such a poor justification with the draconian level of the measure imposed which, asChile correctly pointed out, amounted to more than 80 per cent of the value of the imported goods.
And, as a matter of principle, the European Communities was concerned that this kind of provisional
safeguard action could be taken on the basis of pure conjecture and speculation about future increase
of imports.  The European Communities had one more reason to be concerned about this, and that was
that this provisional safeguard measure came on top of existing countervailing duties affecting ECexports.  This meant that Argentina was granting double relief to its producers, which was a
questionable practice.  It also had to be noted that Argentina had recently increased its applied tariffs
on canned peaches, as well as on a large number of foods, from 14 per cent to 35 per cent.  This was
within the bound level, but it meant an additional tariff protection of 21 per cent which came after the
provisional safeguard measure had been imposed.  This was triple protection of Argentinian domestic
producers.  The European Communities wondered how Argentina could ensure that the safeguard
measure was limited to what was strictly necessary.  The European Communities had already hadArticle 12.4 consultations with Argentina with no satisfactory outcome and had submitted to
Argentina a list of about 35 written questions on the occasion of this consultation.  The questions of
the European Communities concerning Argentina's notifications are contained in document
G/SG/Q2/ARG/9.
28. The representative of Argentina stated that, as the delegates from Chile and the European
Communities had indicated, this notification related to initiation of an investigation and adoption of a
provisional safeguard measure.  Argentina emphasized the provisional nature of this measure, and
Argentina did offer to hold consultations under Article 12.4 with all exporting Members that had a
substantial interest, as the Agreement stated.  These consultations were held with both Chile and theEuropean Communities, and their concerns were voic ed there.  Their concerns were being seriously
considered by Argentina's authorities while the investigation continued and further analysis was
conducted.  He wished to give a preliminary reply to  some of the questions raised by both Chile and
the European Communities.  In determining the increase in imports, the Argentinian authorities had
taken into account the fact that in 1998-1999, there was a 104 per cent increase in imports, and in2000 there was some 80 per cent additional increase in imports over the previous three years.  So,
from 1998, imports had almost quadrupled.  This increase was also registered as compared to
domestic production where the share of imports in 1998 was 7 per cent of domestic production,
whereas in 2000 this had gone up to 17.5 per cent.  The period from 1998-2000 was consideredG/SG/M/17
Page 7
essential in order to determine an increase in imports had taken place.  This was particularly what was
determined by the Appellate Body in the Argentina-Footwear  case, where it was emphasized that
special attention should be given to the most recent period possible.  Regarding unforeseen
developments -- above and beyond how elusive this concept was and regardless of how difficult it
was to define something as "unforeseen" -- the in vestigating authority did consider that the record
world over-production of peaches, and particularly over-production from Greece, had gone beyond
what could be considered predictable.  The factors considered by Argentina's authorities to determine
the existence of critical circumstances were the pressure of imports in terms of prices in the context of
general high production in the world and record harvests in the northern hemisphere.  In considering
these critical circumstances, it was essential to take into account the seasonal nature of this product.
Imports of this product into Argentina were focused in the last quarter of the year.  And taking into
account the fact that the peach harvest in Argentina ran from December to March, there was even arisk — in view of the prices the imports were co ming in at— that it might not even be worthwhile
harvesting the peaches in Argentina.  It was true that the investigation was to determine threat of
injury.  Argentina did not consider this to be in contradiction of Article 6.  Article 6, Argentina
believed, was applicable not only in the case of actual injury but also in the case of threat thereof.
Any delay that could cause an injury that was difficult to repair justified the application of aprovisional safeguard measure.  Regarding the scope and the magnitude of the measure, the measure
to impose US$0.50 per kilo on imports was a result of a comparison made by Argentina's authorities
between the average unit cost of the companies that were considered in the domestic industry with the
FOB prices of exports from Members.  It was this difference that led Argentina's authorities to impose
a measure of this magnitude, because a lesser measure would not have been sufficient to cover orrepair this serious injury and make it possible to adjust.  As to the co-existence of this provisional
measure with countervailing duty measures imposed against the European Union, his delegation
clarified that these measures were presently being reviewed and they did not know what the outcome
would be.  Nevertheless, Argentina did not see any contradiction.  These were distinct instruments
intended to deal with different problems.  Arge ntina saw nothing in the text of the respective
agreements that would prohibit them from being used in conjunction, if the conditions in both
agreements were met.  In this case, the application of countervailing duties was intended to neutralize
the subsidies granted to this product by the European Communities, and it did not guarantee a
sufficient level of protection in view of an emergency situation which made it necessary for Argentina
to avoid serious injury and make it possible to readjust.  Finally, regarding the questions that the
European Communities had submitted, his delegation understood that these consultations were held in
Brussels with the presence of officials from capital.   His understanding was that the European
Communities was going to reformulate these questions, and once Argentina had these reformulated
questions, Argentina would answer them in writing as soon as possible.
29. The delegate of the United States said that with  respect to this provisional safeguard measure
on imported canned peaches, his delegation was interested in the investigation.  The questions of the
United States are contained in document G/SG/Q2/ARG/8.
30. The delegate of the European Communities said that when Argentina asserted that imports
had almost quadrupled in the last 2 years, he wished to recall that the comparison was made with
years when the exports were extremely low.  Th erefore, in this case, the European Communities
thought that the requirement that the increase of imports must be recent — as Argentina had
mentioned was stated by the panel in the Argentina-Footwear  case — was not fully appropriate
because the originating conditions were clear:  climate conditions were extremely bad, production was
extremely low and exports were extremely low.  Ther efore, to take this -- which simply reflected the
restoring of the condition of production and of exports to the normal level -- as the reference point toevaluate any subsequent increase in imports was inappropriate.  On the relationship between
countervailing duties and safeguard measures, the European Communities agreed with Argentina that
these two were different instruments and were designed to tackle different situations.  However, there
was a clear provision in the Safeguards Agreement that safeguard measures must be limited to whatG/SG/M/17
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was strictly necessary to remedy injury, or threat thereof, in this case.  Argentina could not have it
both ways:  either find a threat of injury, to be remedied by the provisional safeguard measure, or
maintain countervailing measures, which were supposed to remedy material injury.  The European
Communities wondered whether Argentina had not considered suspending the application of
countervailing duties pending the application of the provisional safeguard measure and thefinalization of the investigation.  As a final comment, the European Communities reiterated that
Argentina must provide some justification as to how it had arrived at such a level of provisional
measures.  $0.50 per kilo was an extremely high amount, more or less corresponding to 80 per cent in
ad valorem  terms, and to impose such a draconian level there must be justification by Argentina.
31. The delegate of Argentina wished to add to the preliminary replies that Argentina had given
in reference to the coexistence of safeguard measures and countervailing duties.  As to the
countervailing duties, the investigation was on-going, and the investigating authority was now
conducting the investigation with respect to some of the questions that were raised by the European
Communities.  The date of implementation of the measure was 19 January 2001.  With respect to the
magnitude of the ad valorem duty, it was approximately 80 per cent of the measure, in absolute terms
$0.50 per kilo, and the present applied tariff level was 35 per cent.  The measures were of apreliminary nature and Argentina's authorities would be taking into account all of the comments made
by the Members -- those that were raised during the consultations held under Article 12.4, as well as
the comments made in this Committee -- so that Argentina could take a final decision one way or
another.
(b) Bulgaria – Ammonium Nitrate (G/SG/N/6/BGR/1, G/SG/N/7/BGR/1 + Suppl.1)
32. The Chairman recalled that Bulgaria had made three notifications regarding its investigation
on ammonium nitrate, contained in documents G/SG/N/6/BGR/1, G/SG/N/7/BGR/1 and Suppl. 1.
There were no comments or questions relating to the notifications.
(c) Chile – Mixed Oils (G/SG/N/6/CH L/5, G/SG/N/7/CHL/5 + Suppl.1)
33. The Chairman recalled that Chile had made three notifications regarding its investigations on
mixed oils, contained in documents G/SG/N /6/CHL/5, and G/SG/N/7 /CHL/5 and Suppl. 1.
34. The representative of Chile informed WTO Members that Chile wished to terminate its
safeguard measures on oils.  This termination was published on 25 April 2001, and Chile notified this
on 26 April 2001.  The measures were no longer in effect.
35. The delegate of Argentina stated that Argentina had asked for consultations under
Article XXIII of the GATT with respect to the initiation of an investigation and the provisional
safeguard measures that had been adopted because Argentina felt that it did not respond to the
requirements under Article XIX of the GATT and the Agreement on Safeguards.  The consultations
had been held last week.  This notwithstanding, the Committee had just heard that Chile had
terminated its measures, and his delegation expr essed thanks to Chile for its goodwill in this
connection.
36. The delegate of the European Communities welcomed the decision of Chile to terminate this
investigation and to remove the provisional measures.  The European Communities had posed a
number of questions, which can be found in  document G/SG/Q2/CHL/10.  The European
Communities wished to ask one more question: was Chile going to repay the provisional duties it hadcollected so far?  The European Communities also made a general point here — it was a reiteration of
a point the European Communities had made already in the last meeting of the Safeguards Committee
— on the proliferation of provisional measures.  The European Communities noted that Chile had
imposed provisional measures in this investigation -- as Chile appeared to do quite consistently forG/SG/M/17
Page 9
any investigation it started -- and the European Communities considered this practice was worrisome.
The European Communities considered that the requir ement of critical circumstances must meet the
highest standard.  With respect to the requirements of injury and threat thereof, the European
Communities wished to know Chile's opinion as to whether the threat of injury situation was
compatible with the critical circumstances referred to under Article 6.  The European Communitiesthought, as a general point, that Members introducing provisional safeguard measures should take
more care to identify the critical circumstances referred to in Article 6.  Simply relying on the
demonstration or determination of serious injury or threat was not sufficient.  There must be
something more; otherwise Article 6 would make no sense.  His delegation also wished Members
introducing provisional measures to provide justification for the measure they adopted.  The European
Communities had not seen any justification in the Chilean notifications (not just in this case but also
in the other three cases on the agenda concerning Chile).  The European Communities thought it wasnecessary that this become part of a determination to introduce these measures, and that it must be
part of the notifications to the Safeguards Committee in order to allow all the Members to review this,
in particular, in the context of Article 12 consultations.
37. The representative of Chile stated that Chile's provisional safeguard measure was justified,
and that collected duties would be reimbursed.  With respect to the other points, all of the matters that
the delegates raised were interesting to discuss.  Such matters could be raised in the context of
informal consultations on various aspects of the Safeguards Agreement.
(d) Chile - Liquid/Powdered Milk (G/SG/N/8/ CHL/2, G/SG/N/10/CHL/ 3, G/SG/N/11/CHL/3)
38. The Chairman stated that since the last regular meeting, Chile had made three notifications
regarding its investigation on liquid and powdered milk.  These notifications were contained in
documents G/SG/N/8/CHL/2, G/SG/N /10/CHL/3, and G/ SG/N/11/CHL/3.
39. The representative of Chile stated that since th e last meeting, Chile notified the application of
the definitive safeguard measures, establishing a 12 per cent ad valorem  duty.  The original measure was
16 per cent and the outcome of consultations was to lower the provisional safeguard measure and to
establish a 12 per cent measure.  Safeguard measures in Chile lasted just one year, and could be
extended for an additional year.
40. The delegate of Uruguay wished to express hi s delegation's concern in connection with the
safeguard measure adopted by Chile.  Chile app lied a provisional safeguard measure in June 2000.
Uruguay had asked for consultations on this matter under Article 12.4 of the Safeguards Agreement.  In
November 2000, they held consultations.  The outcome was notified to the Committee by Uruguay in
December 2000.  Uruguay considered that Chile's res ponses were not satisfactory since Uruguay did not
have a clear reply to its questions and concerns.  At that time, Uruguay noted its serious reservations
concerning the consistency of these measures with the provisions of the WTO Agreement and the
Safeguards Agreement.  In the consultations, Urug uay expressed its serious concerns, including with
respect to the determination of the existence of serious injury or the threat of serious injury in connection
with imports of powdered milk.  The authorities of Chile informed Uruguay of the relevance of
increases of imports and noted the important indicato rs of the existence of injury, but did not provide
proof of the same.  Uruguay also voiced a serious concern with respect to the causal link between the
increase in imports and the serious injury or threat th ereof.  Article 4 of the Agreement clearly stated that
the authority should exclude from the investigation a ll factors causing injury which were not attributable
to the increase of imports, and the investigation car ried out by Chile attributed as causes climate
changes, decrease in apparent consumption and an  economic recession.  Uruguay had also expressed its
serious doubts as to critical circumstances for appl ying provisional safeguard measures.  Also, with
respect to the structural adjustment in Chile, this was an investigation that was initiated ex officio .
Uruguay expressed doubts on the link between the safeguard measures and Chile's WTO bound levels
with respect to tariffs for dairy products.  Uruguay urged Chile to review and eliminate these measuresG/SG/M/17
Page 10
in keeping with the provisions of the WTO agre ements, and Uruguay wished to put on record its
concern with respect to the measures adopted  by Chile for powdered milk and UHT milk.
41. The United States had raised a number of questions  concerning Chile's notifications.  These are
contained in document G/SG /Q2/CHL/7.  Chile's answers to these questions are contained in document
G/SG/Q2/CHL/8.  The delegate of the United States wished to thank the delegation of Chile for
providing responses to the questions that the Unite d States had submitted in writing.  Unfortunately,
these responses were not made available to the United  States until the morning of this meeting, and then
in Spanish.  Regrettably, this limited his ability to pose follow up questions at this time.  His delegation
wished to reserve the possibility to provide follow up questions at the appropriate time.
42. The representative of the European Communities st ated that his delegation shared the objections
raised by Uruguay in this case.  The European Communities had already made known its concern and
views to Chile on several occasions, in particular, in the consultations under Article 12.4 which were
held in November 2000.  The European Communities regretted that Chile had decided to confirm the
imposition of the safeguard measure at the definitive stage despite the very substantial objections that
were raised by all participants in the Article 12.4 consultations in November 2000.  The EuropeanCommunities was also disappointed that Chile, in the official notification of the final termination and
introduction of the definitive measure, had made no e fforts to address any of these objections.  There
were no real developments responding to all the argu ments that were brought to the attention of Chile
during this consultation.  In addition, Chile had not hesitated to put into force definitive measures
without offering the further, and most important, round of consultations provided for by Article 12.3.
The European Communities thought that this was very  regrettable.  Given the high level of interest
shown by Members at the provisional stage, this c onsultation would be warranted.  The fact that Chile
had not offered it was a particularly grave breach of the Safeguards Agreement.  On another point, the
European Communities seemed to understand that Chile tended to justify its actions by saying that
anyway their safeguard measures only lasted for one  year, and then could only be extended for another
year, and also by ensuring that the safeguard duties, to gether with the applied tariff rates, did not take the
overall level of protection beyond the bound rate.  The European Communities wished to ask if Chile
thought that the Safeguards Agreement permitte d a trade-off between keeping the measure less
restrictive and somehow softening the procedural and substantial requirements that were provided for in
the Agreement.  The questions of the European Communities can be found in document
G/SG/Q2/CHL/10.
43. The representative of Argentina wished to vo ice his delegation's concern on the imposition of
the provisional safeguard measure.  Argentina entir ely shared the concerns that were indicated by
Uruguay as well as by the European Communities and recalled its own considerations that had been
expressed in the course of the consultations he ld in November 2000 under Article 12.4, and the concerns
that had been expressed at the last Committee meeting regarding the provisional measure.  Theseconcerned substantive issues as well as matters of form, and applied equally to the definitive measure,
which was not consistent with the Safeguards Agreem ent, nor with Article XI X.  Argentina therefore
urged Chile to lift this measure.
44. The delegate of Australia stated that Australia had also participated in the Article 12.4
consultations on this question, and so it would come as no surprise that Australia supported the views
expressed by the previous speakers on this question.  Australia had little to add to the fairly extensive
comments that had already been made in respect of th is particular measure.  But Australia agreed with
the European Communities that action under Article 12.3 was warranted in these circumstances and
Australia also obviously supported the call of Arge ntina for the provisional measures to be lifted.
45. The delegate of Chile stated that she would send back to Santiago all the concerns expressed by
Uruguay, the European Communities, the United States, Argentina and Australia and also the request
that the measure be lifted.  She wished to apologize to the delegate of the United States that the repliesG/SG/M/17
Page 11
only came in that day, of course in Spanish.  She hoped that when the copy was circulated amongst
Members, this would clear up the US doubts as well as  those of other Members.  She wished to say to
the delegate of the European Communities that when she had said that the level of the measure was 12
per cent and that the duration was for one year, she had not been trying to make any kind of a trade-off;
she was just trying to say that note was taken of this issue in the consultations and was taken on board
when the authorities decided to reconsider the information.
(e) Chile – Wheat, Wheat Flour, Sugar, Edible Vegetable Oils (G/SG/ N/10/CHL/1/Suppl.2 +
CORR.1, G/SG/N/11/CHL/ 2, G/SG/N/14/CHL/1)
46. The Chairman stated that the notifications from Chile on wheat, wheat flour, sugar, and edible
were contained in documents (G/SG/N/10/C HL/1/Suppl. 2 + Corr. 1, G/SG/N/11/CHL/2, and
G/SG/N/14/CHL/1).
47. The delegate of Chile stated that Chile was ex tending the definitive measure that it applied on
wheat, wheat flour, sugar, and edible vegetable o ils for a further year, commencing 26 November 2000.
The justification of injury, threat of serious inju ry, increase in imports could be found in the documents
notified by Chile.  This measure expired on 26 No vember 2001, and under internal legislation could not
be extended any further than the 26 November 2001.
48. The United States raised a number of questions concerning Chile's notifications, contained in
document G/SG/Q2/CHL/9.
49. The delegate of Colombia reiterated Colombia 's concern regarding the extension of Chile's
safeguard measure on sugar.  In its view, this extens ion did not meet the conditions provided for in the
Safeguards Agreement, nor did it comply with Ar ticle XIX of the GATT.  Furthermore, the Chilean
authorities had not complied with the notification obligations set forth in Article 12 of the Agreement.Regarding the duration of the measure, Colombia wi shed to take up the concerns expressed by the
European Union, that the imposition of onl y a two-year safeguard measure would per se  justify the
adoption of the safeguard measures.  In light of  the serious concern in the sugar industry, his
Government had taken a decision to turn to the dispute settlement mechanism to have further
discussions with the Chilean Government on these measures that had been adopted.
50. The delegate of the European Communities said that his delegation shared the concerns raised
by the other Members and would subscribe to the lis t of questions read out by the United States.  He
wished to add a couple of points and pose a couple of questions to Chile.  The European Communities
understood that the procedure for the extension of a safeguard measure in Chile functioned so that the
Chilean authorities accepted a request for an extension, which acceptance had to be done before the
deadline on which the original measure expired, and then had 120 days in order to verify that thisextension was warranted.  In other words, the 120-d ay deadline would go beyond the expiration of the
original measure.  The European Communities asked Ch ile if it considered that this was consistent with
Article 7.2, which stated that the period mentioned in paragraph 1 may be extended provided that a
competent authority of the importing member have determined in conformity with the procedures set out
in Articles 2, 3, 4 and 5 that the safeguard measure continues to be necessary.  In other words,Article 7.2 would suggest that there must already be a determination that the measure continued to be
necessary in order for it to be extended.  The sec ond question for Chile was whether it considered that
the extended measures fulfilled the requirements of progressive liberalization set forth in Article 7.4.
Although this type of measure was difficult to a ssess because it was rather complex, the European
Communities understood that the measure was exactly the same as provided for in the first year.  The
questions of the European Communities can be found in document G/SG/Q2/CHL/10.
51. The delegate of Argentina wished to recall that the Dispute Settlement Body had set up a
panel regarding this measure at the request of Argentina on 12 March 2001.  Argentina would, beforeG/SG/M/17
Page 12
that panel, continue to discuss what it considered to be a measure inconsistent with the Agreement and
with Article XIX.
52. The representative of Guatemala expressed concern at the imposition of this safeguard
measure and its extension.  Guatemala had held consultations with the Government of Chile.
Unfortunately, it had not been possible to obtain adequate responses in the course of these
consultations.  They were about to hold another round of consultations, and hoped that, in the course
of these consultations, Guatemala would have sufficient information to make it possible to understand
the justification and reasons for Chile to apply this safeguard measure.
53. The delegate of Chile stated that she would send the concerns of Argentina, Colombia, the
European Communities, Guatemala and the United States back to capital.
(f) Chile– Synthetic Socks (G/SG/N/10/C HL/2 + Suppl.1, G/SG/N/11/CHL/1)
54. The Chairman stated that the notifications of Chile on synthetic socks were contained in
documents G/SG/N/10/CHL/2 + Suppl. 1, and G/ SG/N/11/CHL/1.
55. The delegate of Chile stated that this notification was an announcement made by Chile at the
last meeting that Chile was going to be applying  a provisional measure on cotton socks and socks of
synthetic fibres.  At the last meeting, Chile had announced that cotton socks would not have a definitive
measure imposed on them, so the tariffs and duties that were collected on those cotton socks have beenreimbursed.  This was the notification of the defini tive measure for socks of synthetic fibres, which
Chile had announced in the last meeting.
56. The delegate of Ecuador wished to reserve his country's position on this issue.  His Government
had been holding talks bilaterally in capital on this with Chile, and Ecuador reserved the right to revert
to this issue at a later stage once it ha d completed the bilateral consultations.
57. The questions of the European Communitie s can be found in document G/SG/Q2/CHL/10.
(g) Colombia – Taxis (G/SG/N/9/COL/1)
58. The Chairman recalled that Colombia had made a notification regarding its investigation on
taxis shortly before the Committee's last regular meeting.  This notification was contained in
document G/SG/N/9/COL/1.  Although this notificatio n had not been on the agenda of that meeting,
the representative of Colombia had informed the Committee, under Other Business, that it had
terminated its investigation on taxis.
(h) Czech Republic – Footwe ar (G/SG/N/6/CZE/2)
59. The Chairman recalled that the Czech Republic had notified the initiation of an investigation
on footwear.  This notification was contained in document G/SG/N/6/CZE/2.
60. The delegate from Slovenia expressed Slovenia's concern regarding the investigation on
footwear initiated by the Czech authorities.  Slovenia had a significant trade interest in some specific
footwear products.  Slovenia had concerns whether the scope or product coverage was consistent with
the Agreement on Safeguards.  Slovenia believed it was unjustifiably broad.  According to its
knowledge, there was no Czech production of ski boots and alpine hiking boots.  While that kind offootwear was also included in the investigati on, no data on production or imports was given.  In
Slovenia's view, it was difficult to claim that the named products were like products or directly
competitive products to products like shoes.  Slovenia's second concern was the possibility given to
the party concerned for making its views known in writing or providing information which was to beG/SG/M/17
Page 13
taken into account in the investigation.  In written form, Slovenian authorities, in the name of
Slovenian exporters, had made themselves known as an interested party in the future course of the
investigation.  Unfortunately, so far, Slovenia  had not received any response from the Czech side.
61. The delegate from the Czech Republic stated that the Czech Republic had proceeded with the
initiation of the investigation in a legitimate way that was compatible with the Agreement on
Safeguards.  There was a huge influx of imports of footwear into the Czech Republic in the 1990's,
and especially in the last three years, which would be subject to the investigation.  As a result, not
only was there a very substantial decrease of domestic production, but a lot of factories had to be
closed down.  Based on this, the Czech Republic had initiated the investigation on 1 November 2000.
For statistical reasons, the Czech Republic had started this initiation for the full Harmonized System
nomenclature on footwear.  The Czech Republic believed that it would be able to finalize thisinvestigation within one or two months, and it was clear that for those items where no injury or threat
thereof was proven, no safeguard measures would be adopted.  His delegation had noted the interest
of Slovenia to be part of the investigation, and was ready to accept any of Slovenia's comments.
62. The representative of India expressed India's concern about the initiation of these safeguard
measures by the Czech Republic, as India also had substantial interest in exports of footwear.  He
asked if the injury parameters were being evaluated only with respect to domestic sales, or whether
the impact on exports had also been taken into consideration.
63. The representative of the Czech Republic replie d that, in the preliminary investigation, the
impact on exports was being taken into consideration.  The Czech Republic believed that it would be
able to finalize the outcome of the investigation in June or July 2001.
(i) Czech Republic – Isoglucose (G /SG/N/6/CZE/3, G/SG/N/7/CZE/2)
64. The Chairman said that the Czech Republic had made two notifications regarding its
investigation on isoglucose.  These notifications were contained in documents G/SG/N/6/CZE/3 and
G/SG/N/7/CZE/2.  There were no comments or questions  pertaining specifically to these notifications.
(j) Ecuador – Matches (G/SG/N/7/ECU/1)
65. The Chairman said that the Ecuador had notified the imposition of a provisional safeguard
measure on matches.  This notification was contai ned in document G/SG/N/7/ECU/1.  There were no
comments or questions pertaining specifically to this notification.
(k) Egypt – Fluorescent Lamps (G/SG/ N/6/EGY/2/Suppl.1, G/SG/N/8/EGY/3,
G/SG/N/10/EGY/3)
66. The Chairman recalled that Egypt had made a number of notifications regarding its
investigation on fluorescent lamps.  These notifications were contained in documents
G/SG/N/6/EGY/2/Suppl. 1, G/SG/N/8/EGY/3, and G/SG/N/10/EGY/3.  There were no comments or
questions pertaining specifically to these notifications.
(l) India – Gamma Ferric Oxide/Magnetic Iron Oxide (G/SG/N/8/IND/9)
67. The Chairman stated that India had made a serious injury notification in respect of its
investigation on gamma ferric oxide/magnetic iron oxide.  This notification was contained in
document G/SG/N/8/IND/9.  There were no comments or questions pertaining specifically to this
notification.G/SG/M/17
Page 14
(m) India – Methylene Chloride (G/SG/N/8/IND/10)
68. The Chairman stated that India had made a serious injury notification regarding its
investigation on methylene chloride.  This notification was contained in document G/SG/N/8/IND/10.
69. The representative of India informed the Committee that there was no provisional safeguard
duty in this notification.  The final determination was notified to this Committee.  India had
subsequently held bilateral consultations on this issue with the European Communities and had also
answered supplementary questions posed by the European Communities.  India's Government had taken
the consultations into account.  The matter was still under consideration, and India had not yet made any
decisions on the internal recommendations.  As of now, no provisional nor final safeguard measure was
in place.
70. The delegate of the European Communities expressed the EC's concern that no measures were
warranted in this case because the notifications of India did not show increases in imports nor any clear
indication that the domestic industry was threatened.  There were a number of factors that he was not
going to address again here (they had already been ma de clear to India in the course of the Article 12.3
consultations, and they were contained in the list of questions the European Communities had
circulated).
(n) India - Phenol (G/SG/N/14/IND/1)
71. The Chairman stated that India had made a notification regarding its investigation on phenol,
as set forth in document G/SG/N/14/IND/1.
72. The representative of the European Communities asked when India expected to have a final
determination.
73. The representative of the United States had the same question.  The United States noted that the
current safeguard was said to expire on 29 June 2001.  India was an important and growing market for
US phenol exports, and the United States was in terested in the status of the investigation.
74. The delegate of India said that the public h earing was held on 12 April 2001, but he did not yet
have the information as to when Indi a would issue the final determination.
(o) Japan - Tatami-Omote, Welsh Onion And Shi itake Mushrooms (G/SG/N/6/JPN/1 + CORR.1)
75. The Chairman stated that Japan had notified the initiation of an investigation on Tatami-Omote,
Welsh Onion and Shiitake Mushrooms.  The noti fication was contained in document G/SG/N/6/JPN/1
+ Corr. 1.
76. The delegate of Japan stated that Japan had initiated a safeguard investigation concerning
Tatami-Omote, Welsh Onion and Shiitake Mushrooms.  The investigation was still ongoing, but on
10 April 2001, the competent authorities determined th at there was clear evidence that increased imports
had caused serious injury, and that they would cause da mage that would be difficult to repair.  In light of
the situation, the authorities had decided to take  a provisional safeguard measure on the products
mentioned.  This provisional measure was notified to the Safeguard Committee on 20 April 2001 in
document G/SG/N/7/JPN/1 - G/ SG/N/11/JPN/1, and had been in force since 23 April 2001.
77. The delegate of the United States sought clarifi cation with respect to the procedural aspects of
the notification.  His delegation also had questions rega rding the provisional measure.  He asked if Japan
would clarify why there was a single notification fo r three products that, in the mind of his delegation,
were not like or directly competitive.G/SG/M/17
Page 15
78. The delegate from Japan stated that Japan was having three investigations in relation to the three
products, but had notified the three products together as a matter of economy.
79. The questions posed orally by the United States were subsequently circulated in writing,
contained in G/SG/Q2/JPN/1.  The written responses by Japan to these questions are contained in
G/SG/Q2/JPN/2.   
(p) Jordan - Chocolates/Biscuits (G/SG/N/6/JOR/1)
80. The Chairman stated that Jordan had notified the initiation of an investigation on chocolates
and biscuits.  This notification was contained in document G/SG/N/6/JOR/1.
81. Egypt's written questions to Jordan are contained in document G/SG/Q2/JOR/1.
82. The delegate of the European Communities said that his delegation had seen a recent
notification by Jordan which extended the period of investigation, and which separated the two products
that they originally made subject to this investiga tion, that is chocolate and biscuits. He asked Jordan if
this meant that the investigation was restarted.
83. The representative of Turkey noted that Jordan initiated a safeguard investigation for biscuits
and chocolates under HS headings 190513, 180631, 180632 and 180690.  Jordan had applied a
safeguard measure during the period from 1 Marc h 2000 to 19 September 2000 on the imports of the
same products, biscuits and chocolates.  Turkey's written questions to Jordan are contained in document
G/SG/Q2/JOR/2.  Jordan's answers to these ques tions are contained in document G/SG/Q2/JOR/3.
84. The delegate of Jordan stated that the investigation period was extended, rather than restarted,
and that the investigation was being held separately for each product -- biscuits and chocolates.
(q) Morocco - Bananas (G/SG/N/7/MAR/1)
85. The Chairman stated that Morocco had notif ied the imposition of a provisional safeguard
measure on bananas.  This notification wa s contained in document G/SG/N/7/MAR/1.
86. The delegate of Morocco recalled some background elements and the outcome of the
investigation on banana imports.  Following the re quest made by the banana producing industry for a
safeguard measure, and following a meeting of  the Commission on 21 June 2000, the Ministry of
Industry, Commerce, Energy and Mines decided to  initiate an investigation, starting 26 June 2000,
pursuant to the provisions of the Safeguards Agreement.   This decision was taken due to the fact that the
request contained elements which tended to demonstrate the existence of a substantial increase in
banana imports, both as compared to domestic production as well as in absolute terms.  This caused, or
threatened to cause, serious injury to domestic produc tion.  In view of the critical circumstances of the
producers, the Ministry decided that the conditions for the application of a provisional measure were
met.  As from 10 August 2000, a provisional duty of  150 per cent was applied on banana imports for a
200 day period.  Information from the Ministry regarding the investigation was published, and parties
were invited to make comments to the Ministry.  This investigation was conducted amongst 232
producers having answered the questionnaire.  The producers questioned had roughly 56.5 per cent of
national production, on 43.9 per cent of the total domestic production area.  The data covered the
seasons from the 1995-1996 to 1999-2000.  Factors assessed in the investigation for the determination ofinjury or threat thereof were: growth of banana imports in absolute and relative terms; level of
production and surface devoted to banana production;  yield and productivity; employment and wages in
that sector; and prices, unit margins and the profitab ility of the banana production industry.  A review of
these factors indicated a deterioration of the situati on of the domestic banana industry in the view of theG/SG/M/17
Page 16
Advisory Committee on Imports, which also looked at the report from the investigation.  At its meeting
on 26 January 2001, it was determined that the injury was due to imports, and that the impact of the
imports persisted during the period of the provisi onal measures.  Members of the Commission deemed
that a resumption of imports would aggravate the s ituation in the domestic industry.  Secondly, imports
of bananas caused injury, and a resumption of imports  would cause a threat of serious injury to the
domestic industry.  The existence of massive imports wa s a threat of serious injury and thus justified the
implementation of a safeguard measure.  Due to th e conclusions regarding injury and causal link, and
following the views given by the Advisory Committee on Imports on 21 February 2001, it was
recommended that safeguard measures be taken fo r a four-year period.  This period would be taken
advantage of to make it possible for domestic banana producers to implement a recovery program,
making it possible to restore the balance in the sect or.  The decreed measure was an additional definitive
duty to be progressively reduced over the four-year  period.  This measure would be accompanied by a
quota not subject to additional duties, representing the equivalent of the average of the volume of
imports over the past three years.  The outcome of this investigation was notified to the Committee.  His
delegation was available to any Members to answ er any questions regarding the outcome of this
investigation.
87. The delegate of Ecuador took note of the statem ent by the delegation of Morocco.  Ecuador was
concerned about the tariff increase as a result of this measure.  But Ecuador understood that this now
seemed to be a definitive measure.  Four years was a very long period of time, and the Government of
Ecuador would be holding consultati ons with its domestic producers to see what actions could be taken.
88. The delegate of Morocco responded that the provisional measure had been lifted since
February 2001, and imports were not subject to any duty.  Morocco awaited the application of the
definitive duties.
(r) Morocco - Rubber (G/SG/N/6/MAR/2)
89. The Chairman stated that Morocco had notifie d the initiation of an investigation on rubber.
This notification was contained in document G/SG/N/6/MAR/2.
90. The representative of Morocco wished, once again, to give some information on the status of
this investigation.  He recalled the background for im ports of rubber plates a nd sheets.  A request was
made by the domestic industry by the Caplam Comp any, and on the basis of information obtained from
the investigation, the Ministry decided to open an investigation under Article 3.1 of the Safeguards
Agreement.  This decision was notified to the Comm ittee in G/SG/N/6/MAR/2.  It was a decision taken
on the basis of elements that tended to prove the exis tence of a substantial increase in imports of rubber
plates and sheets, both as compared to domestic indus try as well as in absolute terms.  The preliminary
elements of the existence of serious injury pointed to a serious deterioration of the situation of the
domestic industry.  Sales and profits had seriously  dropped, while there had been a substantial drop in
market shares as well.  The information was released  by the Ministry of Trade and Industry, inviting all
parties concerned to express their views regarding th is matter.  The investigation was close to being
completed and the results of findings of injury or threat of serious injury caused by the upsurge in
imports would be notified to the Committee pursuan t to Article 12.1 of the Agreement on Safeguards.
At present, no provisional measure was be ing applied on imports of these products.
(s) Poland - Nitrates of Potassium (G/SG/N/6/POL/1)
91. The Chairman recalled that Poland had notified the initiation of an investigation on nitrates of
potassium.  This notification was contained in do cument G/SG/N/6/POL/1.  There were no comments
or questions concerning this notification.G/SG/M/17
Page 17
(t) El Salvador - Pig Meat (G/SG/N/6/SLV/ 1/Suppl.2 + Suppl. 3, G/SG/N/9/SLV/1)
92. The Chairman recalled that El Salvador had made a number of notifications regarding its
investigation on pig-meat.  These notifications we re contained in documents G/SG/N/6/SLV/1/Suppl.2
+ Suppl.3, and G/SG/N/9/SLV/1.  There were no comments or questions concerning these
notifications.
(u) El Salvador - Rice (G /SG/N/6/SLV/2/Suppl.1)
93. The Chairman recalled that El Salvador had made a notification in respect of its investigation
on rice.  This notification was containe d in document G/SG/N/6/SLV/2/Suppl. 1.
94. The delegate from the United States asserted that the United States had an interest in this case,
and requested a confirmation from El Salvador that  the provisional safeguard had not been applied.
(v) El Salvador - Fertilizers  (G/SG/N/6/SLV/3)
95. The Chairman recalled that El Salvador had notified the initiation of an investigation on
fertilizers.   This notification was contained in document G/SG/N/6/SLV/3.  There were no comments
or questions concerning this notification.
(w) Slovak Republic - Sugar/Sucr ose (G/SG/N/6/SVK/2 + CORR.1)
96. The Chairman stated that the Slovak Republic had notified the initiation of an investigation
on sugar and sucrose.   This notification was contained in document G/SG/N/6/SVK/2 + Corr. 1.
97. The delegate of the Slovak Republic informed WTO Members that his authorities had
completed the investigation concerning sugar, and had submitted a notification pursuant to
Articles 12.1(b) and 12.1(c) on making findings of in jury and application of safeguard measures.
98. The representative of Poland said that, in light  of the intervention by the Slovak delegation,
Poland had some comments on the measures.  First, because of the manner in which the Slovak
authorities had handled the case, interested parties had been deprived of any meaningful opportunity to
express their views on the issue of serious injury be fore the measure had been imposed.  Secondly, for
the same reason, the parties having substantial interest as exporters of sugar had not been provided
adequate opportunity for prior consultations.  Poland reserved its right to react adequately.
(x) United States - Extruded Rubber Thread (G/SG/N/9/USA/3)
99. The Chairman stated that the United States had notified the termination of its investigation on
extruded rubber thread.
100. The Committee took note of all of the statements  made concerning the notifications of actions
related to safeguard measures on the agenda.
C. RESULTS OF INFORMAL CONSULTATIONS ON 1 FEBRUARY 2001
101. The Chairman recalled that the Committee held an informal meeting on 1 February 2001.  At
that meeting, the Chair had consulted informally with Members on the desirability of the Committee
commencing discussions on issues regarding the application of the Safeguards Agreement.  The
Committee had asked the Chair to undertake these informal consultations at the last regular
Committee meeting.  The following was a reflection of the views expressed by Members:  Members
expressed a view that there was a need for the Committee to discuss issues concerning the applicationG/SG/M/17
Page 18
of the Safeguards Agreement, and that any such discussions should be held in informal mode, and
cover procedural – as opposed to substantive – issues.  Members also expressed that the objective of
any such discussions should not, for the time being at least, be to "make recommendations towards …
[the] improvement" of the Safeguards Agreement, in a manner envisaged by Article 13.1 of the
Agreement, and that any such discussions should take place within the Committee per se , rather than
any subsidiary body thereof.  However, there was no agreement among Members that there should be
a standing agenda item for such discussions, or that such discussions should take place on the basis of
a predetermined list of topics.   Rather, certain Members suggested that delegations should place
concrete proposals for discussion on the agenda of the Committee, as and when the need arose.
102. The delegate of Chile said that Chile, among other countries, supported Egypt's proposal
which had been raised at the November 2000 meeting concerning the possibility of discussing in the
Committee certain aspects related to the implementation of the Safeguards Agreement.  At the
meeting on 1 February 2001, it was decided that this was an important issue and that it should
continue to be considered informally within the Committee.  However, Members did not manage to
decide on an approach.  Chile maintained its position that it was the responsibility of Members --
more than any panel or Appellate Body -- to clarify any ambiguities that may exist in the SafeguardsAgreement.  In this context, Chile did have an inte rest in continuing an analysis of this topic, and
seeing how Members could move forward.  One possib ility -- but of course Chile was open to others -
- could be to draw up a list of issues related to obligations under Article 12.  Such notification issues
had arisen in cases related to safeguards measures in the WTO dispute settlement system, as well as in
Committee discussions pertaining to notifications.  These were probably among the least complexissues, and more feasible to analyze in practical terms.
103. The representative of Egypt thanked the Chairman for the fruitful consultations he had held,
and thanked Chile for its intervention, which her delegation supported.  Although the idea that Egypt
had raised about having a standing agenda item to discuss issues concerning the application of theSafeguards Agreement had not gained consensus, Egypt still wished to pursue this as a systemic issue.
Egypt had concerns regarding the notification procedures, like Chile, and also had a number of other
concerns.
104. The delegate of Mexico thanked the Chairman for the reports he had given orally on the last
the informal meeting of the Committee.  He thought it was perfectly clear that the Committee did not
have the authority to set up any subsidiary body;  its functions and mandate enabled it to look ataspects regarding interpretation of the agreement within the Committee itself.  It was also very clear
from that meeting that it would be costly and difficult for developing countries, as well as the least
developed countries and other countries that did not have staff available to attend meetings in a
subsidiary body.  Clearly, Article 13.1 of the Safe guards Agreement contained the functions and the
mandate of the Committee, and it did not expressly make any reference to the creation of anysubsidiary bodies, nor was there any other provision of the Agreement indicating this.  Therefore,  the
conclusion was that this Committee did not require a subsidiary body.  Mexico suggested that if any
delegation had any questions, or wanted to look at certain aspects or problems regarding the
application of the Safeguards Agreement, that delegation should introduce the matter briefly in
writing before a formal meeting of the Committee for the sake of transparency.  Members could thensee whether the issue required consideration within a formal Committee meeting, or whether the
Committee could meet informally.
105. The representative of Brazil supported the proposal of Chile.  Brazil wished to discuss
systemic issues on the Safeguards Agreement.  Brazil could agree with Mexico that perhaps there
could not be an ad hoc  group on safeguards, but Members could certainly think about having a
standing issue within the Committee.  He had a list of items that his delegation wanted to discuss in
this Committee.G/SG/M/17
Page 19
106. The delegate of the European Communities thanked the Chairman for the informal
consultations.  The European Communities supported the views already expressed by Chile, Egypt
and Brazil.  An informal forum on issues relating to the application of the Safeguards Agreement
would be useful to discuss best practices in the field of safeguards, particularly since the Safeguards
Agreement was not very detailed with regard to technical issues of procedure and substance.  Settingup such a forum would prevent increasing litigation which was currently going on in the area of
safeguards, since an exchange of information on best practices would lead to a higher degree of
compliance with the Safeguards Agreement.  Regardless of whether or not there was consensus on the
issue of such a forum, no arrangement could reduce, in procedural terms, the rights Members already
enjoyed under the Safeguards Agreement.  In particular, there was no requirement to put in a paper
before a certain item of horizontal importance could be raised by any Member.  In this regard, the
European Communities would reserve the right to raise, either on its own initiative or together withother interested Members, issues of horizontal importance.
107. The representative of Australia thanked the Chairman for holding the consultations.  Australia
also supported the proposal made by Chile, and the subsequent interventions of Egypt, Brazil and the
European Communities.  Australia was relaxed about the format.  The important thing was to have aforum where Members could discuss these issues, and decide which sort of issues should be
discussed.  This might best be done in an inform al mode, though, of course, it would be appropriately
reported and discussed in the Committee as well.  Australia could agree with the suggestion that
Article 12 issues be examined, and also wished to discuss issues relating to adjustment.  While there
was, of course, no requirement to submit a paper, Australia would be prepared to submit somebackground information on its own treatment of this issue.
108. The delegation of Canada welcomed healthy dialogue on the issues surrounding the
application of the Safeguards Agreement.  While Canada acknowledged that there was no authority to
set up a subsidiary body of this group -- because that was precluded by the Agreement -- likeAustralia, Canada was relaxed about the forum in which such a discussion might take place.  Canada
suggested that such informal discussion take place around semi-annual meetings to take advantage of
the participation of experts, which Canada considered would be fruitful for any discussions.  Canada
had heard the suggestion put forward by Chile, a nd thought that was a good starting-point.  Canada
had heard that Brazil had a list of suggested topics, and was interested in receiving a copy of that list
and looking through it.  Canada also noted that issues had arisen during the meeting relating to critical
circumstances in the context of provisional safeguards measures.  This might be another topic thatMembers might wish to discuss.  Canada welcomed a discussion and looked forward to hearing from
others in this respect.
109. The delegate of the United States thanked the Chairman for his report on the consultations
that had been held on this issue.  The United States supported a more incremental approach than other
Members to addressing some of these issues.  Perhaps the best approach would be for the Members
that had specific issues in mind to put them on the agenda of a formal Committee meeting.  In that
forum, Members could take up a discussion.  If the Committee decided there was a necessity to go to
informal mode, it could do that.  The United States was reluctant to set up any sort of informal process
for items that remained as yet unidentified.  It was not the US intention to endorse any sort of back-to-back informal meeting with the formal meetings.  Members should acquire some practical experience
with the idea by placing items on the agenda for discussion by Members.  Treating each element
individually on an ad hoc  basis would be a good incremental way to begin this discussion.  The
Chairman might want to reconsider continuing his co nsultations if there was an interest in setting up
an informal mechanism, apart from the formal Committee process.
110. The representative of Turkey supported the idea of discussing systemic issues to establish a
more predictable system and to improve the understanding of the Agreement. Turkey believed that
this must be done before this issue became a problem for any Member.  Turkey thought it could beG/SG/M/17
Page 20
done either by a standing agenda item in regular meetings or by holding special sessions back-to-back
with regular meetings.  Turkey was open to both approaches.
111. The representative of Mexico supported the US position.  Mexico did not oppose having
discussions in order to clarify certain generic, systemic aspects of the Agreement on Safeguards.
Mexico felt that raising these issues in the Committee could be a positive step.  It was important to
have useful experience and practice, which Mexico did not yet have.  Mexico did not want to have a
series of issues simply presented for discussion.  Mexico wanted transparency.  Mexico wanted
countries that had a series of issues to present them at the next meeting of the Committee, as a specific
item on the agenda of the Committee.  Once Members had discussions one these within the
Committee, then the relevant steps could be taken.
112. The delegate of Australia reiterated that Australia was flexible about the procedural manner in
which to pursue this desire of a large number of Members to discuss and clarify some issues relating
to the application of the Agreement.  That being sa id, Australia's own experience revealed that frank
discussion would probably only take place in an informal meeting.  Most of the Members were aware
of the formal positions that other Members had on application of safeguards, through various means.These included the review of legislation, the practice of countries in their application of safeguards or
in their questioning the application by others of safeguards.  This was always conducted at the
Committee level.  However, a frank and practical discussion would only happen properly at an
informal level.  She could not understand why any Member would object to such informal
discussions.  In the interests of transparency, a report from the Chair would put those informalmeetings on the record.  This was something in whic h there was a lot of interest, and it should not be
dismissed.  The Chair could continue his consultations about how Members could approach this
matter.
113. The representative of Egypt wished to echo what the delegate from Australia had said.  Egypt
believed that it would be more useful to have this sort of discussion in an informal mode.  It would
most certainly facilitate the discussion.  It would make Members more frank, especially when talking
about systemic issues.  The transparency concern could be addressed by a report from the Chairman to
the Committee.  There was a more positive sense in this Committee right now that Members could
have a discussion about a number of issues of concern to a number of countries.  It would be
beneficial if the Chairman would continue his consultations with the countries that believed in this
process and in the benefits of this process.
114. The delegate of Brazil supported the idea of have a discussion of systemic issues inside the
Committee, in an informal mode.  When there was some kind of result, it could be presented in a
formal manner.  Brazil was ready to present a list of items at the next meeting, or could support a
discussion of Article 12 in the next meeting.
115. The delegate of Cuba said that Cuba, too, would be in favour of the points made by
Columbia, Chile, Egypt and those other delegations that had spoken along similar lines.  Cuba had a
considerable interest in the systemic issues that should be discussed in a forum of this nature.
Furthermore, because many Members did not have sufficient experience as regards the application ofsafeguards measures, it would be interesting to be able to discuss various issues.
116. The Chairman noted the extensive discussions on this issue, and thanked delegations for their
interventions.  He would encourage the next Chairman of the Committee to follow up with some of
the issues that had been raised and perhaps see how to consult with Members informally on the best
way to approach this issue.
117. The Committee took note of the statements made.G/SG/M/17
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D. OTHER BUSINESS
1. Report of the Committee to the Council for Trade in Goods in connection with the
Fourth Ministerial Conference
118. The Chairman raised the issue of the report  of the Committee to the Council for Trade in
Goods in connection with the Fourth Minist erial Conference, to take place from 9 to
13 November 2000.  The General Council would be meeting on 23-24 October 2000.  At that
meeting, it would undertake the annual review of WTO Activities on the basis of reports submitted by
subsidiary bodies, including the report of the G oods Council, which would be adopted some time in
early October.  This Committee was not scheduled to meet again before the adoption of these reports.
This situation had arisen before, and in those cases -- before the Geneva and Seattle MinisterialConferences -- the Chairman of the Committee had se nt a letter to the Chairman of the Council for
Trade in Goods containing a factual report of the Committee's activities since its most recent annual
report.   This avoided the necessity to call a special meeting simply to adopt an interim report for
consideration by the Goods Council.  The Chairman proposed that, as had been done in the past, the
Chairman of the Committee would send a letter to  the Goods Council Chai rman prior to the Goods
Council meeting.  That letter would contain a factual statement of the activities of the Committee
since the adoption of the Committee's last annual report in November 2000.  The letter would
essentially report on the meeting just concluding.  Copies of this letter would be made available to all
Members.  In addition, as this Committee would adopt its annual report for 2001 at the October
meeting, every effort would be made to circulate that report prior to the Ministerial Conference.
119. The Committee took note of the statements made and so agreed
.
2. Matter raised by the European Communities
120. The delegate of the  European Communities  stated that his delegation wished to raise one
issue which was not on the agenda, but which had been notified to the Committee in document
G/SG/N/8/EGY/4.  It related to Egypt's safeguard investigation on milk powder, and concerned the
finding by Egypt of serious injury caused by increased imports, and of the introduction of a definitive
safeguard measure.  The European Communities had taken note that Egypt had introduced definitive
measures in this case which it appreciated were lower than the provisional measures imposed.  The
provisional measures were 45 per cent, and the definitive measure was 15 per cent.  However, onsubstance, the European Communities regretted that Egypt had not addressed most of the concerns
that the European Communities had expressed during the investigation.  The European Communities
considered that the Egyptian final determination in this case was insufficient, in particular, as
regarded the determination that liquid milk powder competed with powdered milk, and that the two
formed part of the same like product.  Also, th e European Communities pointed to the very low
market share of imports which made it difficult to find that imports could be the cause of injury.
Lastly, he made a general point which had been mentioned as a possible subject for the informal
discussion.  The European Communities considered that the provisions concerning consultations by
Members introducing provisional or definitive measures had not been respected.  The possibility for
Members to hold proper consultations before the measures were put into force was one of the mostimportant opportunities available to make views known, and to try to find an accommodation which
was within the overall purpose of the body of rules on safeguards.
121. The representative of Australia made a general remark -- not directed specifically towards
Egypt -- that Members were concerned that some Members were tending to use the Safeguards
Agreement to address particular concerns in their domestic market places for which the Safeguards
Agreement was not intended.  This was something that the dairy industry in Australia had focused on,
but it was not restricted to the dairy industry.  Australia also had some concerns in respect of the
procedures that were followed by Egypt, includin g with respect to consultations, and some questionsG/SG/M/17
Page 22
about the demonstration of injury.  Finally, Australia questioned the link between milk powder and
drinking milk in this case.  Australia would be following this matter.
122. The representative of Egypt stated that the investigation was initiated on 25 September 2000.
Egypt made a final determination on 31 March 2001, and the WTO was notified of Egypt's intention
to impose safeguard measures for three years, to be applicable as from 12 April 2001.  With regard to
the investigation itself, the inves tigating authority had examined the volume of imports, the situation
of the Egyptian market, and also the like product and the competition.  In this regard, Egypt noted that
imported powder milk was considered a directly competitive product to fresh milk, as they both
competed with each other directly in the same market, and both had the same usage in the majority of
applications.  With regard to injury and causa l link, the investigating authority examined the
significant increase in imports, the significant decrease in prices, and the overall situation of theEgyptian industry with regard to the sales, market share, inventory, return on investment and other
factors.  The procedures were consistent with the Safeguards Agreement.  Egypt welcomed any
comments, and any discussion during the next meeting.
123. The Committee took note of the statements made.
3. Matter raised by the United States
124. The United States raised, in the course of its intervention concerning agenda item B(o),
questions relating to documents G/SG/N/7/JPN/1 and G/SG/N/11/JPN/1 concerning the imposition by
Japan of provisional safeguard measures on three agricultural products.
125. The Committee took note of the statements made.
E. DATE OF NEXT REGULAR MEETING
126. The Chairman recalled that the Committee had agreed that regular meetings normally would
be held in the last week of April and the last week of October, in conjunction with the regular
meetings of the Committees on Anti-Dumping Practices and Subsides and Countervailing Measures.
He understood that the Committee on Anti-Dumping Practices would meet throughout the week
commencing Monday, 22 October 2001.  The Subsidies Committee would meet from Tuesday,
30 October through Thursday, 1 November 2001.  He therefore proposed that this Committee meet onMonday, 29 October 2001.
127. The Committee so agreed.
F. ELECTION OF OFFICERS
128. The Committee elected Mr. Martin Pospisil of the Czech Republic as Chairman.
129. The Committee agreed that the present incumbent, Mr. Istvan Pokoradi, who had been elected
as Vice Chair in November 2000, would continue to serve as Vice Chair until May 2002.
__________