WORLD TRADE
ORGANIZATIONG/SG/N/6/HUN/3
G/SG/N/7/HUN/3
G/SG/N/11/HUN/3
28 July 2003
(03-4012)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON
SAFEGUARDS ON INITIATION OF AN INVESTIGATION AND
THE REASONS FOR IT
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 21 July 2002, has been received from the Permanent
Mission of Hungary.
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Please find attached Hungary's notification under Article 12.1(a) of the Agreement on
Safeguards on initiation of an investigation and the reasons for it, and notification under Article 12.4
of the same Agreement before taking a provisional safeguard measure referred to in Article 6, and
also notification under Article 9, footnote 2, on the non-application of safeguard measure to
developing countries under Article 9.1.G/SG/N/6/HUN/3
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Notification under 12.1 (a) of the Agre ement on Safeguards on initiation
of an investigation and the reasons for it
Pursuant to Article 12.1 (a) of the Agreement on  Safeguards and the format of notifications
under the Agreement as adopted by the Committee on Safeguards (G/SG/N/6), Hungary hereby
notifies that her competent authorities have initiated a safeguard investigation as follows:
1. Date of the investigation initiated
On 21 July 2003, the Ministry of Economy and Transport initiated an investigation relating to
serious injury to the domestic producers of like or directly competing products.
2. Products subject to investigation
All products classified within HS 1701.91.00.00 Other, containing added flavouring or
colouring matter; 1701.99.10.00 White sugar; 1701.99.90.00 Other.
3. Reasoning for the initiation of investigation
The Hungarian producers of the products concerned informed the competent Hungarian
authorities about the market situation of white sugar that appears to call for safeguard measures.  On
the basis of evidence available for the industry, the Hungarian producers asked the authorities to start
an investigation.
The Ministry of Economy and Transport has obtained sufficient information that indicate a
recent sharp increase in imports of products concerned both in absolute terms and relative to
production and consumption and that the products concerned have been imported under such
conditions as to cause or threaten to cause serious injury to domestic industry.
Imports from products classified within HS 1701.91.00.00; 1701.99.10.00; 1701.99.90.00.
increased by 57,7 per cent in 2001/2002.  A further sharp increase was registered in the first quarter of2003 where imports were eight times higher than in the same period of 2001 and twelve times higher
than in the same period of 2000.  The import volume in the first quarter of 2003 was 21.460 tonnes.
Imports of white sugar and the share of import on the domestic market
period import in tonnes share of import on the
domestic market %
2000. I. quarter               1 727,7                     2,46
2001. I. quarter               2 672,7                     3,52
2002. I. quarter               5 312,4                     6,35
2003. I. quarter             21 460,1                   27,94
The price level of imports has been very low: it was below the domestic price level by 32 per
cent in 2000, by 45 per cent in 2001 and by 53 per cent in 2002.
Employment data shows a 71 per cent decline between 1999 and 2002.G/SG/N/6/HUN/3
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On the basis of the relevant Hungarian le gislation [Government Decree No. 113/1990.
(XII.23.)] and the evidence submitted, the authorities initiated an investigation in relation to products
classified within HS 1701.91.00.00; 1701.99.10.00; 1701.99.90.00.
4. Sources of information
The public notice on the initiation of an investigation was published in the Economic Journal
of the Ministry of Economy and Transport on 18. July 2003.G/SG/N/6/HUN/3
G/SG/N/7/HUN/3
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Notification under Article 12.4 of the Agreement on Safeguards before taking
a Provisional Safeguard measure referred to in Article 6
1. Products subject to the proposed provisional safeguard measure
The products subject to the proposed safeguard measure are classified within customs tariff
heading HS 1701.91.00.00 Other, containing added flavouring or colouring matter; 1701.99.10.00
White sugar; 1701.99.90.00 Other.
2 . The proposed provisional safeguard measure
The proposed provisional safeguard measure is in the form of an additional duty of 93 per
cent on imports of products classified within HS 1701.91.00.00, 1701.99.10.00, 1701.99.90.00.
3. The date of introduction of the proposed provisional safeguard measure
The date of introduction of the proposed provisional safeguard measure is 23 July 2003.
4. Expected duration of the provisional safeguard measure
The measure will apply from 23 July 2003 to 23 January 2004.
5. Basis for a preliminary determination as provided for in Article 6.
Increase in imports
The competent Hungarian authority has carried out a preliminary analysis for the period of
1999-2002 on increase in imports.
in tonnes
years HS
heading 1999 2000 2001 2002
1701.91.00.00
1701.99.10.00
1701.99.90.00
Total 12 612 5 937 14 358 24 886
The import of white sugar products increased by 141 per cent from 2000 to 2001.  From 2001
to 2002 it increased by 74 per cent.  The share of import within domestic consumption increased by
1,7 per cent in 2000, 4,3 per cent in 2001 and 7,8 per cent in 2002.  Comparing the import data to the
Hungarian production the same tendency can be observed.G/SG/N/6/HUN/3
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Statistical data of white sugar (1999-2003.I-IV)
in tonnes
1999 2000 2001 2002 first quarter
of 2003
Production 432974 268238 425229 341192 0
Imports 12612 5937 14358 24886 22322
Exports 46664 27576 7823 67769 11043
Domestic consumption 381740 343890 332071 319504 77674
Production decreased from 425.229 tonnes to 347.241 in 2001/2002 (about 20 per cent).
Domestic sales declined by more than 7 per cent from 2001 to 2002.  Domestic consumptiondecreased by 3,8 per cent.
The level of employment decreased from 1843 employees in 2001 to 1585 employees in
2002.
Capacity utilisation in 1999 was at 87,3 per cent and in 2002 it was at a level of 71,3 per cent.
In conformity with Article 5 of the Agreem ent on Agriculture Hungary introduced a price-
based special safeguard measure in 1999 (G/AG/N/HUN/20).  The measure proved to be insufficient
in case of white sugar products.
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.Increase  in imports (see above)Injury
As a result of the increased imports of white sugar the market share of the Hungarian
producers has steadily declined.  The demand on the domestic market has declined between 1999-
2002.  Domestic production decreased as well as the level of employment as a result of the lower level
of capacity utilisation.  The trends on the Hungarian market show that the above mentioned problems
of the traditional Hungarian producers was due to the sudden increase of imports.
Taking into account the situation on the world market the sudden increase of imports should
be regarded as an unforeseen development on the Hungarian market.
(ii) determining that there are critical circumstances where delay would cause damage which it
would difficult to repair.
The sudden import increase in 2001/2002 and in the first quarter of 2003 created such critical
circumstances which without introducing a temporary measure could cause further damage that would
be impossible to repair.  The investigating authority has carried out a preliminary analysis of theserious injury suffered by the domestic industry.  On that basis it has come to the conclusion that the
increase in imports is the main cause behind the serious injury.G/SG/N/6/HUN/3
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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 18 July 2003.G/SG/N/6/HUN/3
G/SG/N/7/HUN/3
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Notification under Article 9, footnote 2, on the non-application of safeguard
measure to developing countries under Article 9.1
1. Specification of  the measure
The proposed provisional safeguard measure consists of a 93 per cent additional duty to be
paid on imports of products classified within HS 1701.91.00.00 Other, containing added flavouring or
colouring matter; 1701.99.10.00 White sugar; 1701.99.90.00 Other.
2. Product subject to the measure
The proposed measure applies to products de scribed in the notification by Hungary under
Article 12.4.
3. 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 subject to a provisional safeguard measure originating in
any of the developing or least developing countries shall not be subject to the safeguard measures.
These countries are the following:
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, Gu atemala, 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, Sing apore, Solomon Islands, Somalia, South Africa, Sri
Lanka, Sudan, Suriname, Swaziland, Syrian Arab Republic, Thailand, Togo, Tonga, Trinidad and
Tobago, Tunisia, Tuvalu, Uganda, United Republic of Tanzania, Uruguay, Vanuatu, Venezuela, VietNam, Yemen, Zambia, Zimbabwe.
4. Not applicable.
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