WORLD TRADE
ORGANIZATIONG/SG/N/8/VEN/3
28 August 2003
(03-4494)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.1(b) OF THE AGREEMENT ON
SAFEGUARDS ON MAKING A FINDING OF SERIOUS INJURY OR
THREAT THEREOF CAUSED BY INCREASED IMPORTS
VENEZUELA
("Paper for Writing or Printing", "Sacks" and "Bags")
The following communication, dated 22 August 2003, has been received from the Permanent
Mission of Venezuela.
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Pursuant to Article 12.1(b) of the Agreement on Safeguards on making a finding of serious
injury or threat thereof caused by increased imports, I have the pleasure to submit the following
notification.
On 16 October 2001, by Decision No. ST-S-A P002/01, the Technical Secretariat of the
Anti-Dumping and Subsidies Commission of the Venezuelan Ministry of Production and Trade
agreed to initiate a safeguards investigation into imports of "paper for writing and printing",
"sacks" and "bags" .
The Government of Venezuela notified the initiation of the aforementioned investigation to
the WTO on 24 October 2001, as indicated in document G/SG/N/6/VEN/4.
On 23 September 2002 the Provisional Technical Report was finalized, recommending the
application of provisional safeguard measures to imports of "sacks" from countries members of the
Cartagena Agreement and imports of "bags".  It should be noted that the provisional safeguard
measures recommended by the investigating authority have not yet been imposed.
The Final Technical Report of the Technical Secretariat of the Anti-Dumping and Subsidies
Commission of the Venezuelan Ministry of Production and Trade, finalized on 31 July 2003,
determined that definitive safeguard measures should be imposed on imports of "paper for writing
and printing" and "sacks" .
Pursuant to Venezuelan legislation on trade safeguards, when the investigating authority has
decided that safeguard measures should be applied, it must send a report to the Minister for
Production and Trade and the Minister for Finance confirming that the imports of the goods
investigated have increased in such quantities and under such conditions as to cause serious injury to
the domestic industry that produces like or directly competitive products so that the Ministers may
evaluate the report and make their recommendations to the President of the Republic, who has to
decide on the adoption of safeguard measures.G/SG/N/8/VEN/3
Page 2
PAPER FOR WRITING AND PRINTING
INCREASED IMPORTS
During the investigation period (July 1998 - June 2001) the imports investigated increased by
over 100 per cent in absolute terms;  and showed a sharp increase relative to domestic production and
consumption.  The percentage of imports in comparison with domestic production more than doubledover the period investigated, from 39 per cent to 73 per cent and then 94 per cent in the first, second
and third years of this period respectively.  The share of the imports investigated in apparent
consumption rose from 31.8 per cent to 52 per cent between the first and last years of the investigation
period.
EVIDENCE OF SERIOUS INJURY
The following variables were examined in order to decide whether or not the domestic
industry suffered serious injury during the investigation period (July 1998 - June 2001) production,
sales on the domestic market, exports, inventories, domestic ex-factory price, costs, operating margin,
operating profits, market share, capacity utilized, number of persons employed, productivity,
operating cash flow and return on current assets.  This examination revealed the existence of serious
injury to the domestic industry caused by a downturn in production, domestic sales, capacityutilization, the operating margin, inventories, operating profits expressed in thousands of dollars,
market share, number of persons employed, operating cash flow and return on current assets.
CAUSAL LINK
In determining the existence of a causal link between the imports investigated and the serious
injury to domestic industry, the impact of other factors was also examined, in addition to analysing
the injurious effects of the imports, but their harmful effects were not attributed to the imports.  The
other factors were:  the trend in apparent consumption, export performance and the impact of the
indebtedness of one of the domestic producers making the complaint.
As a result of the foregoing analysis, it was determined that, in addition to the injurious
effects of the imports investigated on the domestic industry, injurious effects on the domestic industry
were also caused by the decrease in exports and the indebtedness of one of the domestic producers.
Nevertheless, given the limited impact of these two factors in comparison with the substantial
negative effects of the imports, it was determined that there was a real and substantial causal link
between the imports and the serious injury suffered by the domestic industry.
DESCRIPTION OF THE PRODUCT
The following is a description of paper for writing and printing imported into Venezuela
under the various subheadings of the Venezuelan customs tariff:
- 4802.51.00:  weighing less than 40 g/m2, except all crepe paper;
- 4802.52.90:  other, weighing 40 g/m2 or more but not more than 150 g/m2;
- 4802.53.00:  weighing more than 150 g/m2, except for artistic cards.
These subheadings are included under heading 4802, whose generic title is "Uncoated paper
and paperboard, of a kind used for writing, printing or other graphic purposes, and punch card stock
and punch tape paper, in rolls or sheets".G/SG/N/8/VEN/3
Page 3
- 4823.51.10:  "continuous forms", printed, embossed or perforated;
- 4823.51.90:  other, printed, embossed or perforated;- 4823.59.00:  other.These subheadings are included in heading 4823, whose generic title is "Other paper,
paperboard, cellulose wadding and webs of cellulose fibres, cut to size or shape;  other articles of
paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres.
PROPOSED MEASURE
The proposed measure consists of an increase of 22.5 percentage points in the tariff currently
applicable, depending on origin, to imports of paper under headings 4802.51.00, 4802.52.90 and
4802.53.00, and an increase of 30 percentage points in the tariff currently applicable, depending on
origin, to tariff subheadings 4823.51.10, 4823.51.90 and 4823.59.00 of the Venezuelan customs tariff.
PROPOSED DATE OF INTRODUCTION OF THE MEASURE
As yet there is no precise date for the imposition of the measure recommended as, pursuant to
Venezuelan legislation on safeguard measures, a number of administrative procedures have to be
accomplished by the Central Government, as well as requirements relating to the competitive
readjustment plan, and this has not yet been done.
EXPECTED DURATION OF THE MEASURE
It has been recommended that the measure be imposed for a period not exceeding three years
as of the date on which it comes into effect.
TIMETABLE FOR PROGRESSIVE LIBERALIZATION OF THE MEASURE
Regarding its liberalization, if the measure is adopted for a period of three years, it has been
recommended that tariff increases of 22.5 or 30 percentage points depending on the tariff heading
should be applied during the first year and that they should decrease by one third in each of the two
subsequent years, as indicated in the following table.
Year of application First year Second year Third year
Current tariff1X% X% X%
Tariff increase 22.5 or 30 percentage
points on the tariff rate,
depending on the tariff
heading15 or 20 percentage
points on the tariff rate,
depending on the tariff
heading7.5 or 10 percentage
points on the tariff rate,
depending on the tariff
heading
Final tariff rate X% + 22.5 or 30
percentage points,
depending on the tariff
headingX% + 15 or 20
percentage points,
depending on the tariff
headingX% + 7.5 or 10
percentage points,
depending on the tariff
heading
1  The rate depends on the tariff preferences granted or the status of the tariff reduction process, depending on the
origin of the import.G/SG/N/8/VEN/3
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SACKS
INCREASED IMPORTS
During the investigation period (July 1998 - June 2001), the imports investigated showed a
sustained increase in absolute terms resulting in a net increase of 124.48 per cent over the period.  The
imports also increased significantly relative to domestic production and consumption;  between thefirst and third years of the investigation period, imports rose from 71 per cent and 28 per cent to
299 per cent and 65 per cent of production and consumption respectively.
EVIDENCE OF SERIOUS INJURY
The following variables were examined in or der to determine whether or not the domestic
industry suffered serious injury during the investigation period (July 1998 - June 2001):  production,
sales on the domestic market, exports, inventories, domestic ex-factory price, costs, operating margin,operating profits, market share, capacity utilization, number of persons employed, productivity,
operating cash flow, and return on current assets.  This examination revealed the existence of serious
injury to the domestic industry caused by a downturn in production, domestic sales, inventories,
market share, capacity utilization, number of pers ons employed, productivity, operating cash flow and
the operating margin.
CAUSAL LINK
In determining the existence of a causal link between the imports investigated and the serious
injury to domestic industry, the impact of other fact ors was also examined in addition to analysing the
injurious effects of the imports but their harmful effects were not attributed to the imports.  The otherfactors were:  the trend in apparent consumption;  domestic sales of sacks during the investigation
period by another domestic enterprise that no longer manufactures sacks;  export performance and the
concentration of sales to major clients by the domestic producer making the complaint.
As a result of the foregoing analysis, it was determined that, in addition to the injurious
effects of the imports investigated on the domestic industry, injurious effects on the domestic industry
were caused by the slight drop in apparent consumption and in exports.  Nevertheless, given the
limited impact of these two factors in comparison with the substantial negative effects of the imports,
it was determined that there was a real and substantial causal link between the imports and the serious
injury suffered by the domestic industry.
DESCRIPTION OF THE PRODUCT
Sacks imported into Venezuela under the following subheadings of the Venezuelan customs
tariff, as described below:
- 4819.30.10:  Multi-ply;  sacks (bags) having a base width of 40 cm or more;
- 4819.30.90:  Other, having a base width of 40 cm or more.
PROPOSED MEASURE
The proposed measure consists of an increase of 22.5 percentage points in the tariff currently
applicable, depending on origin, to imports of  sacks under headings 4819.30.10 and 4819.30.90 of the
Venezuelan customs tariff.G/SG/N/8/VEN/3
Page 5
PROPOSED DATE OF INTRODUCTION OF THE MEASURE
As yet there is no precise date for the imposition of the measure recommended as, pursuant to
Venezuelan legislation on safeguard measures, a number of administrative procedures have to be
accomplished by the Central Government, as well as requirements relating to the competitive
readjustment plan, and this has not yet been done.
EXPECTED DURATION OF THE MEASURE
It has been recommended that the measure be imposed for a period not exceeding three years
as of the date on which it comes into effect.
TIMETABLE FOR THE PROGRESSIVE LIBERALIZATION OF THE MEASURE
Regarding its liberalization, if the measure is adopted for a period of three years, it has been
recommended that tariff increases of 22.5 percentage points in the tariff should be applied, decreasing
by one third over the next two years, as shown in the table below.
Year of application First year Second year Third year
Current tariff1X% X% X%
Tariff increase 22.5 percentage points
in the tariff15 percentage points in
the tariff7.5 percentage points
in the tariff
Final tariff rate X% + 22.5 percentage
pointsX% + 15 percentage
pointsX% + 7.5 percentage
points
1 The rate depends on the tariff preferences granted or the status of the tariff reduction process, depending on the
origin of the import.
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