WORLD TRADE
ORGANIZATIONG/SG/N/7/HUN/2
G/SG/N/11/HUN/2
5 February 2003
(03-0763)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD
MEASURE REFERRED TO IN ARTICLE 6
NOTIFICATION PURSUANT TO ARTICLE 9,
FOOTNOTE 2, OF THE AGREEMENT ON SAFEGUARDS
HUNGARY
The following communication, dated 3 February 2003, has been received from the Permanent
Mission of Hungary.
_______________
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON SAFEGUARDS
1. Products subject to the proposed provisional safeguard measure
The products subject to the proposed provisional safeguard measure are classified within
customs tariff heading HS 3102.30; ammonium nitrate, whether or not in aqueous solution.
2. The proposed provisional safeguard measure
The proposed provisional safeguard measure is in a form of an additional duty of
11,600 HUF/tonne.
3. The date of introduction of the proposed provisional safeguard measure
The proposed date of the introduction of the provisional safeguard measure is
1 February 2003.
4. Expected duration of the provisional safeguard measure
The measure will apply for not more than six months from the date of its introduction.
5. Basis for a preliminary determination as provided for in Article 6.
Increase in imports
A preliminary analysis of the increase in imports was carried out for the period of 1998-2001.
The increase of import was as follows:G/SG/N/7/HUN/2
G/SG/N/11/HUN/2
Page 2
Year Imports of ammonium nitrate
in tonnes
19981999
2000
20012001(I-IX)
2002 (I-IX)261,970
168,176
161,581
280,034185,992
212,321
The Hungarian imports from products classified within HS 3102.30 have increased
significantly from 2000 to 2001 with 73 per cent.  The tendency remained unchanged during 2002.
Moreover, only in December 2002, according to the official statistical data, the imports of ammonium
nitrate (HS 3102.30) was 142,401 tonnes which is at least half of the total estimated import of
Hungary for the whole year of 2002.
In 2000 the share of imports in total consumption was 26.1 per cent in 2001 the same ratio
was 43.9 per cent.  The share of imports in total consumption become higher in the first nine months
of 2002 reaching a level of 52 per cent.
The market share of the Hungarian producer on the domestic market has been steadily
decreasing.  In 2002 sales on the domestic market reached 73.9 per cent, the same ratio was 56.1 percent in 2001 and the tendency continued in 2002.
The share of export in total sales of the Hungarian producer is insignificant (it is about 3 per
cent in the total production).  A sudden increase in stock can be observed in 2001 parallel to the
increase of imports and decrease of domestic sales.
There was a limited increase in consumption on the Hungarian market while the sales of the
Hungarian producer decreased from 546.5 thousand tonnes in 2000 to 357.7 thousand tonnes in 2001.
The level of employment decreased by 23 per cent between 1999 and 2002.  Capacity
utilisation dropped from 62 per cent to 55 per cent during the same period.
Provide the basis for:
(i) making a preliminary determination, as provided for in Article 6 , that increased
imports  have caused or threatening to cause serious injury; and
Unforeseen developments
Growth of imports occurred in the period of the examination not warranted by changes in the
domestic consumption and the production.
Increase imports
(See above).G/SG/N/7/HUN/2
G/SG/N/11/HUN/2
Page 3
Injury
As a result of the increased import the market share of the Hungarian producer has steadily
declined as well as the sales of the company (about 50 per cent).  There was also a significantdecrease in the level of employment and a drop in the capacity utilisation.
Causation
While the consumption on the Hungarian market increased the above mentioned problems of
the traditional Hungarian producer was caused by the sudden increase of imports.
(ii) determining that there are critical circumstances where delay would cause damage
which it would difficult to repair.
The sudden import increase in December 2002 created such critical circumstances which
without introducing this temporary measure could cause further damage that would be impossible torepair.  The investigating authority has carried out a preliminary analysis of other factors that may
have contributed to the serious injury suffered by the domestic producers.  On that basis it came to the
conclusion that the increase in imports is the principle cause behind the serious injury.
6. Offer of consultations under Article 12.4
Hungary offers consultations on the provisional safeguard measure in accordance with
Article 12.4 of the Agreement on Safeguards.
7. Other information
The public notice on the introduction of the provisional safeguard measure was published in
the Economic Journal of the Ministry of Economy and Transport on 31.01.2003.G/SG/N/7/HUN/2
G/SG/N/11/HUN/2
Page 4
NOTIFICATION UNDER ARTICLE 9.1 OF THE AGREEMENT ON SAFEGUARDS
Notification to the Committee on Safeguards of non-application of safeguard measure to
developing countries under Article 9.1 of the Agreement on Safeguards.
1. Specify the measure
The provisional measure consists of additional duty to be paid as described in the notification
by Hungary under Article 12.4.
2. Specify the product subject to the measure
The measure applies to ammonium-nitrate (HS 3102.30) as described in the notification by
Hungary under Article 12.4.
3. Specify the developing countries to which the measure is not applied under Article 9.1 of
the Agreement on Safeguards, and the import shares of these countries individually and
collectively
Imports of the products concerned originating in any of the developing or least developed
countries listed in the Annex are not subject to this provisional safeguard measure.
4. Not applicableG/SG/N/7/HUN/2
G/SG/N/11/HUN/2
Page 5
ANNEX
Afghanistan, Albania, Algeria, Angola, Argentina,  Bahamas, Bangladesh, Barbados, Belize, Benin,
Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Burkina Faso, Burundi, Cambodia,
Cameroon, Cape Verde, Central African Republic, Chad, Chile, People’s Republic of China,
Colombia, Comoros, Congo, Costa Rica, Cuba, Demo cratic People's Republic of Korea, Democratic
Republic of Congo, Djibouti, Dominican Republic,  Ecuador, Egypt, Equatorial Guinea, Eritrea,
Ethiopia, Fiji, Gabon, Gambia, Ghana, Grenada, Guatemala, Guinea,  Guinea-Bissau, Guyana, Haiti,
Honduras, India, Indonesia, Iran (Islamic Republic of), Iraq, Ivory Coast, Jamaica, Jordan, Kenya,
Kiribati, Lao People's Democratic Republic, Leba non, Lesotho, Liberia, Libyan Arab Jamahiriya,
Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mauritius, Mexico, Mongolia, Morocco,
Mozambique, Myanmar, Nepal, Nicaragua, Niger,  Nigeria, Oman, Pakistan, Papua New Guinea,
Peru, Philippines, Rwanda, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Sao Tome and
Principe, Senegal, Seychelles, Sierra Leone, Si ngapore, Solomon Islands, Somalia, South Africa,
Sri Lanka, Sudan, Suriname, Swaziland, Syrian Arab Republic, Thailand, Togo, Tonga, Trinidad andTobago, Tunisia, Tuvalu, Uganda, United Republic of Tanzania, Uruguay, Vanuatu, Venezuela,
Viet Nam, Yemen, Zambia, Zimbabwe.
__________