WORLD TRADE
ORGANIZATIONG/SG/N/6/ECU/5
17 September 2003
(03-4982)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.1(a) OF THE AGREEMENT
ON SAFEGUARDS ON INITIATION OF AN INVESTIGATION
AND THE REASONS FOR IT
ECUADOR
The following communication, dated 8 September 2003, has been received from the
Permanent Mission of Ecuador.
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1. Pursuant to Article 12.1(a) of the WTO Agr eement on Safeguards, I hereby notify to the
Committee on Safeguards the initiation of an investigation relating to serious injury or threat thereof
and the reasons for it, with regard to ceramic tableware, kitchenware, other household articles andtoilet articles of porcelain or china cla ssified under NANDINA tariff heading 6911, subheading
6912.00.00.
2. This notification is being made in accordance with the suggested formats for notifications
under the Agreement on Safeguards set out in document G/SG/W/1 of 28 February 1995.
1. Specify the date when the investigation was initiated
The investigation was initiated on 13 August 2003 pursuant to Resolution No. 03 043 of the
Under-Secretary for Foreign Trade and Integrati on of the Ministry of Foreign Trade, Industry,
Fisheries and Competitiveness, published in Official Register No. 146 of the same date.
2. Specify the product subject to the investigation
Ceramic tableware, kitchenware, other household articles and toilet articles, of porcelain or
china, classified under tariff heading NANDINA 6911 and tariff subheading NANDINA 6912.00.00of the National Import Tariff.
3. Provide the reasons for the initiation of investigation
(i) Was the investigation initiated pursuant to a petition from the domestic
industry?
This investigation was initiated at the request of Cerámica Andina C.A., a company that
accounts for 90 per cent of the domestic production of ceramic tableware, kitchenware, other
household articles and toilet articles, other than of porcelain or china.G/SG/N/6/ECU/5
Page 2
(ii) Evidence on the basis of which the investigation was initiated
There is evidence of a decline in domestic production and sales on the domestic market.
Massive imports of the product are proving detrimental to the economic position of the
domestic producers, which have registered a drop in profits and negative rates of return.  Theshare of imports in the domestic market for the products under investigation has increased,
reflecting a loss for domestic production on this market.  The utilization of the installed
capacity of the companies concerned has decreased, which is having an adverse effect on the
competitiveness of the domestic products and on the general outlook of the national
companies, which are unable to embark on investment plans in order to increase their
production capacity.
(iii) Evidence, if any, of critical circumstances where delay would cause injury that
would be difficult to repair
There has been a sharp decline in domestic production as a result of the rapid increase of
imports, suggesting the existence of critical circumstances that would cause injury to thedomestic production of the product concerned that would be difficult to repair.G/SG/N/6/ECU/5
Page 3
OFFICIAL REGISTER NO.  146 - WEDNESDAY, 13 AUGUST 2003
RESOLUTION No. 03 043
THE UNDER-SECRETARY OF FOREIGN TRADE AND INTEGRATION
OF THE MINISTRY OF FOREIGN TRADE, INDUSTRY,
FISHERIES AND COMPETITIVENESS
WHEREAS
In a communication of 17 May 2003, the Architect Ramon Valdivieso V., General Manager
of CERAMICA ANDINA C.A., domiciled in the town  of Cuenca, Ecuador, requested the initiation of
an investigation with a view to introducing a safeguard measure, as provided for under the law of the
World Trade Organization (WTO), on imports of the ceramic products classified under NANDINA
tariff heading 6911 "Ceramic tableware, kitchenware, other household articles and toilet articles of
porcelain or china";  and NANDI NA tariff subheading 6912.00.00 "Ceramic tableware, kitchenware,
other household articles and toilet articles, other than of porcelain or china";
Under Article XIX of the General Agreement on Tariffs and Trade, the WTO Agreement on
Safeguards, and the provisions of Titles XVII and XVIII of the Consolidated Legal Text of the
Ministry of Foreign Trade, Industry, Fisheries and Competitiveness (MICIP), as reflected inExecutive Decree No. 3497, published in Official Register No. 744 of 14 January 2003, which
establish the rules and procedures whereby, in order to prevent and counteract the effects of the
increased importation of a product or group of products under such conditions as to cause or threaten
to cause serious injury to domestic producers of like or directly competing goods, countries may
introduce safeguard measures;
The company CERAMICA ANDINA C.A. accounts for 90 per cent of the domestic
production of ceramic tableware, kitchenware, other household articles and toilet articles, other than
of porcelain or china;
The products under investigation are ceramic products classified under NANDINA heading
6911 and subheading 6912.00.00 of the National Import Tariff;
According to Title XVIII, Article 307 of the Consolidated Legal Text of the MICIP, it is the
responsibility of the Under-Secretary for Foreign Trade and Integration of the Ministry of Foreign
Trade, Industry, Fisheries and Competitiveness to declare the initiation of an investigation;
According to the information supplied by the Central Bank of Ecuador, the countries that are
exporting the products classified under NANDINA tariff heading 6911 are:  Afghanistan, Argentina,
Austria, Belgium, Bolivia, Botswana, Brazil, Ca nada, Chile, China, Colombia, Costa Rica, Cuba,
Czech Republic, Dominican Republic, Egypt, Finland, France, Germany, Holland, Honduras, Hong
Kong, India, Indonesia, Italy, Japan, Lebanon, Malaysia, Mexico, Panama, Peru, Philippines,
Republic of Korea, Saudi Arabia, Singapore, Spai n, Sweden, Switzerland, Taiw an (Formosa), Turkey,
United Arab Emirates, United Kingdom, United Stat es, Uruguay, Venezuela and Viet Nam.  The
countries exporting the products classified under NANDINA tariff subheading 6912.00.00 are:
Argentina, Australia, Belgium, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Czech
Republic, Denmark, Dominican Republic, Egypt, El Salvador, France, Germany, Greece, Holland,Hong Kong, India, Indonesia, Iran, Israel, Italy,  Japan, Kenya, Malaysia, Malta, Mexico, Panama,
Peru, Philippines, Puerto Rico, Republic of Korea, Slovakia, Spain, Switzerland, Taiwan (Formosa),
Thailand, United Kingdom, United States, Venezuela and Viet Nam, whose exports are causing
serious injury to domestic production;G/SG/N/6/ECU/5
Page 4
According to the information supplied by th e company Cerámica Andina S.A., the following
natural and legal persons have been identified as the main domestic importers of the products
classified under NANDINA tariff heading 6911: Im portadora y Distribuidora ZH, Corporación la
Favorita C.A., Corpmunab Cía. Ltda., Dumas Prado Eduardo Monfilo, Almacenes Estuardo Sánchez,Mukhi Ofertas S.A, Panda Import Export S.A., Im por. El Rosado (Mi Comisariato), Onfaida S.A.,
Superoyal S.A., Almón del Ecuador, Tiendas Ind. Asociadas Tía S.A, Dai Ichi Importadora
Exportadora, Importadora Aricamerluiz Cía., Constr uctora Luzagui Cía. Ltda., Plásticos Industriales
C.A.-Pica, Hernández Cevallos Alfonso A. y Alba Naranjo Freire;  and for NANDINA tariff
subheading 6912.00.00, the following legal persons:  Ecuador Bottling Company, Corporación la
Favorita C.A., Tiendas Ind. Asociadas Tía S.A. and El Millón Cía Ltda.;
According to the information supplied by the requesting company, the imports of ceramic
tableware, kitchenware, other household articles and toilet articles, of porcelain or china, are capturing
a large share of the domestic market;
CERAMICA ANDINA C.A., in conformity with  Article 4.2 (a) of the WTO Agreement on
Safeguards and Title XVII, Article 302 of the Consolidated Legal Text of the MICIP, submitted
information relating to imports, sales, production, productivity, capacity utilization, profits and losses,
employment and inventories, which leads to a presumption of serious injury or threat thereof to the
domestic industry;
The request submitted by CERAMICA ANDINA C.A. meets the requirements set out in
current legislation;
The investigating authority has sufficient eviden ce to justify the initiation of an investigation;
and,
In the exercise of its powers,
DECIDES:
Article 1.- To accept and initiate the investigation requested by the company CERAMICA
ANDINA C.A., a legal person of Ecuadorian nationality, to determine whether the increase in imports
of the ceramic products covered by NANDINA tariff heading 6911 and NANDINA tariff subheading
6912.00.00, is causing or threatening to cause serious injury to domestic production.
Article 2.- That the products under investigation are the ceramic products classified under
NANDINA tariff heading 6911 "Ceramic tableware, kitc henware, other household articles and toilet
articles, of porcelain or china" and NANDINA tariff subheading 6912.00.00 "Ceramic tableware,
kitchenware, other household articles and toilet articles, other than of porcelain or china" that are like
or directly competing with domestically manufactured products.
Article 3.- That pursuant to Title XVIII, Article 310 of the Consolidated Legal Text of the
MICIP, the investigation process shall take place over a period of three months from the date of
publication of this Resolution in the Official Register.  This period  may, in exceptional
circumstances, be extended in order to comply with the procedures established in Article 3 of the
WTO Agreement on Safeguards regarding the provision of public notice to all interested parties andthe arrangement of public hearings or other appropriate means in which importers, exporters and other
interested parties can present evidence and their views, including the opportunity to respond to the
presentations of other parties and to submit their views, inter alia , as to whether or not the application
of a safeguard measure would be in the public interest.G/SG/N/6/ECU/5
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Article 4.- That the investigation period shall cover the years 1999, 2000, 2001, 2002 and the
months of 2003 to date.
Article 5.- To treat as confidential any information supplied as such by CERAMICA
ANDINA C.A.
Article 6.- That pursuant to Article 12.1(a) of the WTO Agreement on Safeguards and
Title XVIII, Article 331 of the Consolidated Legal Text of the MICIP, the investigating authority shall
notify the initiation of the investigation to the WTO Committee on Safeguards and the interested
parties.
Article 7.- In accordance with Title XVIII, Article  330 of the Consolidated Legal Text of the
MICIP, to ensure that this resolution is published in the Official Register and in a newspaper widely
circulated in Ecuador.
Done in Quito on 1 August 2003
Cristian Espinosa
UNDER-SECRETARY FOR FOREIGN TRADE
AND INTEGRATION
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