RESTRICTED
WORLD TRADE G/SG/M/9
30July1997
ORGANIZATION(97-3243)
Committee onSafeguards
MINUTES OFTHE REGULAR MEETING
HELD ON5MAY 1997
Chairman: Mr.A.Buencamino (Philippines)
1. TheCommittee onSafeguards heldaregular meeting on5May1997.
2. Thefollowing agenda wasadopted:
Page
A. Observers: International Intergovernmental Organizations .............2
B. National Legislations .....................................3
(i) Review ofneworamended notifications notpreviously
reviewed bytheCommittee ..........................3
(a)Argentina -G/SG/N/1/ARG/3 &Suppl.1
(b)Botswana -G/SG/N/1/BWA/1
(c)Brazil -G/SG/N/1/BRA/3/Suppl.1
(d)Brunei Darussalam -G/SG/N/1/BRN/1
(e)Ghana -G/SG/N/1/GHA/1
(f)Liechtenstein -G/SG/N/1/LIE/1
(g)Senegal -G/SG/N/1/SEN/1
(h)Uganda -G/SG/N/1/UGA/1
(ii) Written questions regarding thepreviously-reviewed
legislation oftheRepublic ofKorea .....................4
(iii) Status oflegislation notifications .......................4
C. Notifications ofactions related tosafeguard measures ................5
(i) Notifications ofinitiations ofinvestigations(G/SG/N/6/ARG/1 +
Suppl.1) ......................................5
(ii) Notifications regarding application ofprovisional
safeguard measures (G/SG/N/7/ARG/1 +Suppl.1) ...........5
(iii) Notifications offindings ofserious injury orthreat caused
byincreased imports (G/SG/N/8/BRA/1, G/SG/N/8/KOR/1,
G/SG/N/8/KOR/2) ...............................7G/SG/M/9
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(iv) Notifications ofsafeguard investigations terminated
withnosafeguard measures imposed (G/SG/N/9/KOR/1
+Corr.1) .....................................7
(v) Notifications ofdecisions toapply safeguard measures
(G/SG/N/10/BRA/1, G/SG/N/10/KOR/1 +Corr.1 +
Suppl.1/Corr.1, G/SG/N/10/USA/1) ....................8
(vi) Notifications regarding thenon-application ofsafeguard
measures todeveloping countries (G/SG/N/11/BRA/1,
G/SG/N/11/KOR/1, G/SG/N/11/USA/1) ..................9
(vii) Notifications regarding consultations (G/L/136-G/SG/6,
G/SG/7, G/SG/8, G/SG/9, G/SG/10, G/L/156-G/SG/11,
G/SG/12, G/SG/13) ...............................11
D. Notifications related topre-existing Article XIXmeasures, covered
byArticle 10(G/N/2/LIE, G/SG/N/2/SEN) ......................12
E. Notifications related tomeasures covered byArticle 11(1)
(G/SG/N/3/LIE, G/SG/N/3/SEN) .............................12
F. Follow-up toSingapore Ministerial Declaration ....................12
G. Recommendation oftheWorking Group onNotification Obligations
andProcedures ........................................13
H. Other business .........................................13
I. Election ofofficers ......................................13
J. Dateofnextregular meeting ................................14
A. Observers: International Intergovernmental Organizations
3. TheChairman recalled that,under theprocedures adopted bytheGeneral Council forobserver
status forinternational intergovernmental organizations (WT/L/161, Annex 3),requests forobserver
status weretobeconsidered onacase-by-case basis byeachWTO body towhich arequest hadbeen
addressed, taking intoaccount suchcriteria asthenature ofthework oftheorganization concerned,
thenature ofitsmembership, thenumber ofWTO Members intheorganization, reciprocity withrespect
toaccess toproceedings, documents andother aspects ofobservership, andwhether theorganization
hadbeeninvolved inthepastwiththework oftheGATT. Atitsmeeting on7February, theGeneral
Council hadnoted thattheIMFandtheWorld Bank hadbeengiven observer status inWTO bodies
pursuant totheAgreements between theWTO andthese twoinstitutions. With regard toother
internationalintergovernmentalorganizations,theGeneralCouncilhadagreed:(a)thattheorganizations
which already hadobserver status intheGeneral Council onanadhocbasisbegranted observer status
immediately; (b)thatforinternational intergovernmental organizations whose requests hadnotyet
beenconsidered theChairman would conduct consultations; (c)toinvite theother WTO bodies to
proceed inasimilar way. Asindicated indocument G/SG/W/182, theACP Group, IMF, OECD,
UNCTAD, andWorld Bank hadrequested observer status inthisCommittee.G/SG/M/9
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4. TheCommittee tooknoteoftheobserver status oftheIMFandtheWorld Bank. TheCommittee
further decided tograntregular observer status toUNCTAD onthebasisthattherewould bereciprocity
withrespect todocuments, proceedings andother aspects ofobservership.
5. Withrespect totherequest bytheOECD, therepresentative ofThailand indicated thathisviews
werethesame asthose expressed byhisdelegation inthemeetings oftheCommittees onSubsidies
andCountervailing Measures andonAnti-Dumping Practices, thatisthatconsideration oftheOECD 's
request should bepostponed toalaterdate,andthatinthemeantime, theOECD 'sadhocstatus should
bemaintained. Therepresentative ofBrazil stated thatfurther reflection wasneeded within the
Committee before taking adecision ontheissue, andthatanydecision togrant theOECD permanent
observer status should bedoneonthebasis ofreciprocity. Therepresentative ofIndia expressed his
support fortheviews offered bytheother twodelegations.
6. TheChairman proposed thattheCommittee defer action ontheOECD 'srequest forregular
observer status untilalaterdate. Intheinterim, heproposed thattheOECD continue tobeinvited
toattend theCommittee 'smeetings onanadhocbasis.
7. TheCommittee decided todefer action ontherequest oftheOECD forregular observer status
andtocontinue toinvite thisorganization toitsmeetings onanadhocbasis.
8. Regarding theACPGroup 'srequest, theChairman noted thattheACPGroup, which hadnot
hadadhocobservership inthisCommittee, hadrequested observer status inseveral WTO bodies, and
thattheChairmen ofthose bodies, including theGeneral Council andtheCTG, wereconsulting with
Members concerning theACPrequest. TheChairman proposed toconduct consultations ontheACP
Group 'srequest forobserver status intheCommittee, andtoreport backtotheCommittee atalater
date.
9. TheCommittee sodecided.
B. National legislation
(i) Review ofNeworAmended Notifications notPreviously Reviewed
10. TheChairman recalled thatquestions concerning newly notified legislations weretohavebeen
submitted totheMember concerned andthetoSecretariat nolaterthan14April 1997. Healsonoted
thatthetimeliness ofsubmission ofquestions hadimproved andurged Members torespect thedeadlines
established.
11. TheChairman reminded Members thatfollow-up questions could beasked orally atthemeeting,
andthatifwritten answers tosuchquestions weredesired, thequestions should besubmitted inwriting
totheMember whose notification wasbeing reviewed, andtotheSecretariat, nolaterthan2June1997.
Written answers toallquestions submitted inwriting should besubmitted totheSecretariat nolater
than7July1997.
12. TheCommittee proceeded tothesubstantive review ofthelegislation ontheagenda.
13. Thequestions concerning thelegislation ofArgentina canbefound inthefollowing documents:
G/SG/Q1/ARG/5 (Submitted byMexico)
G/SG/Q1/ARG/6 (Submitted bytheEC)
G/SG/Q1/ARG/7 (Submitted byKorea)
G/SG/Q1/ARG/8 (Submitted bytheUS)G/SG/M/9
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Answers tothese questions canbefound inthefollowing document:
G/SG/Q1/ARG/9
14. Noquestions wereposed concerning thelegislative notifications ofBotswana, Brazil, Brunei
Darussalam, Ghana, Liechtenstein, Senegal, orUganda.
15. Therepresentative oftheUnited States expressed concern thatanswers towritten questions
previously posed byhisdelegation tothedelegations ofCôted'Ivoire, Kenya andNigeria hadnotyet
beenreceived.
(ii) Writtenquestionsregardingthepreviously-reviewedlegislationoftheRepublicofKorea
16. TheCommittee turned tothewritten questions posed byCanada regarding Korea ’spreviously -
reviewed legislation. These questions canbefound indocument G/SG/Q1/KOR/1.
17. Korea 'sanswers tothese questions canbefound indocument G/SG/Q1/KOR/2.
18. TheChairman reminded Members thatKorea ’slegislation automatically would beplaced on
theagenda oftheCommittee ’snextregular meeting. Thus, anyfurther written questions withrespect
tothislegislation should besubmitted inwriting toKorea, andtotheSecretariat, nolaterthansix
weeks before thenextmeeting, orby8September 1997. Korea wasasked toprovide answers toany
suchquestions, inwriting, nolaterthantwoweeks before themeeting, orby6October 1997.
19. TheChairman alsoreminded Members thatthese same deadlines would apply withrespect
toconsideration, attheCommittee 'snextmeeting, ofanyother previously-reviewed legislations. For
suchlegislations tobeplaced ontheagenda forthatmeeting, written questions would needtobereceived
bytheMember inquestion, andbytheSecretariat, by8September 1997. Thedeadline forwritten
answers tothose questions would be6October 1997.
20. TheChairmanremindedMembersofsomeoftheelementsoftheMinisterialDeclarationadopted
atSingapore inDecember 1996. Thedeclaration noted thatMembers were"mindful oftheirobligations
tocomplete theirdomestic legislative process without further delay," andreminded Members that"each
Member should carefully review allitsexisting orproposed legislation ...toensure ...fullcompatibility
withtheWTO obligations, andshould carefully consider points made during review intherelevant
WTO bodies regarding theWTO consistency oflegislation ...andmake appropriate changes where
necessary." Inthisregard, theChairman believed thattheCommittee might needtoconsider whether
andhowitcould report onwhatMembers were doing inorder tocomply withthese aspects ofthe
Ministerial Declaration. Hesuggested thatMembers takethismatter under consideration, andconsult
witheachother andtheChairman astohowthiscould beaccomplished, withaviewtodiscussing
theissue before theissuance oftheCommittee 'sAnnual Report inOctober.
21. TheCommittee tooknoteofthestatement made.
(iii) Status ofLegislative Notifications
22. TheChairman reported thatthere werestillalarge number ofMembers whohadyettomake
therequired legislative notification. Inparticular, notifications hadnotbeenreceived fromthefollowing
46Members: Angola, Antigua &Barbuda, Bahrain, Bangladesh, Barbados, Belize, Benin, Burkina
Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Cyprus, Djibouti, Dominica, Fiji,
Gabon, Gambia, Grenada, Guinea Bissau, Guyana, Haiti, Jamaica, Kuwait, Lesotho, Madagascar,
Malawi,Mali,Mauritania,Mongolia,Mozambique,Namibia,Niger,PapuaNewGuinea,Qatar,Rwanda,G/SG/M/9
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SaintKitts&Nevis, SaintVincent &Grenadines, Sierra Leone, Solomon Islands, Suriname, Swaziland,
Tanzania, Togo, andZaire.
23. Thissituationcontinuedtocreateaveryunfortunategapintransparencywithrespecttolegislative
notifications. TheChairman onceagain urged allMembers whohadnotyetdonesotomake therequired
notification. Hesimilarly urged allother Members toencourage those thathadnotyetnotified todo
so.
24. TheCommittee tooknoteofthestatement made
C. Notifications ofactions related tosafeguard measures
(i) Notifications ofinitiation ofinvestigations (Art. 12.1(a))
25. TheChairman noted thatsince theCommittee ’slastmeeting, oneinitiation ofaninvestigation
pertaining toserious injury orthreat thereof andthereasons forithadbeennotified, byArgentina,
concerning footwear. (G/SG/N/6/ARG/1 andSuppl.1.)
26. Therepresentatives oftheUnited States andtheEuropean Communities indicated thatthey
hadconcerns overthisinitiation, butwould raisetheirquestions regarding thisinvestigation under
other Agenda itemasappropriate.
27. TheCommittee tooknoteofthestatements made.
(ii) Notifications Regarding Application ofProvisional Measures
28. TheChairman noted thatsince theCommittee ’slastmeeting, onenotification regarding
application ofaprovisional measure hadbeenreceived. Thisnotification concerned aprovisional
measure applied byArgentina onfootwear. (G/SG/N/7/ARG/1 andSuppl.1)
29. TheUnited States representative saidthathisdelegation hadserious questions astoArgentina 's
compliance withtheAgreement withrespect totheprovisional dutyonfootwear. Dataprovided by
Argentina showed thatalthough actual imports offootwear hadincreased from 1991 to1993, these
imports haddeclined bothinvalue andquantity from1994to1995. Imports alsohaddeclined inquantity
from1993 to1994. Itwasnotclearhowadeclining trend inrecent imports supported theexistence
of"clear evidence" thatincreased imports hadcaused orwerethreatening tocause serious injury, or
Argentina 'sconclusion thatwithout immediate duties, therewould be"damage ...difficult torepair",
asprovided forinArticle 6oftheAgreement.
30. According tothedataprovided inthetechnical report prepared bytheArgentine Federal Trade
Commission, apparent domestic consumption offootwear asestimated bythepetitioner haddeclined
from103million pairsin1992to75million pairsin1995. TheFederal Trade Commission hadnoted
thatthealleged decline inconsumption during theyears 1993and1994should beinvestigated because
itcoincided withyears ofstrong growth indemand forconsumer goods, totalindustrial production
andgross domestic product. ItwasnotclearhowtheArgentine government explained this25%drop
inapparent consumption overthatfour-year period. TheAgreement onSafeguards provided thatwhen
factors other thanincreased imports wereconcurrently causing injury tothedomestic industry, such
injury should notbeattributable toincreased imports. TheCommission 'stechnical report stated that
"ifoneweretoaccept theproduction andapparent consumption data,some ofthedecline inproduction
would beattributed tothedecline inconsumption andonlysome would beattributed toincreases in
imports", andthat"theevidence contained inthedocket shows thatatthisstage injury might be
attributable lesstocurrent imports thantoconsumption trends andindustrial reorganization, whichG/SG/M/9
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weremajor according tofigures forinvestment innewcapital assets". ItwasnotclearwhytheUnder-
Secretariat forForeign Trade, indeciding toimpose theprovisional measures, hadfailed toaddress
thedramatically falling consumption andindustrial reorganization among thevariables considered in
itsdetermination oftheexistence ofcritical circumstances, aslisted inG/SG/N/6/ARG/1-
G/SG/N/7/ARG/1.
31. Paragraph6ofArgentina'snotificationtotheCommitteecitedseveralvariables,e.g.production,
capacity andemployment, showing anoverall decline inthedomestic footwear industry from 1991
to1995. However, itwasnotclearhowdatathrough 1995supported theneedforemergency measures
in1997. Imports alsohaddeclined inbothabsolute andrelative terms between 1993and1995, which
made itevenmore difficult tojustify anemergency safeguard action in1997. Determinations ofthreat
ofserious injury weretobebased onfactsandnotmerely onallegation, conjecture orremote possibility.
ItwasnotclearwhatfactshadbeenusedbytheArgentine authorities inmaking theirdetermination,
since themostrecent information covered 1995. There wasnoindication thatArgentine authorities
hadanalyzed criteria onwhich determinations ofclearly imminent threat aretypically based, suchas
surging imports, rapidly increasing import inventories, excess foreign factory capacity andthelike.
32. Theprovisional measures formosttariffitems werenearly identical totheGATT-inconsistent
specific duties thathadbeenineffect untiltheimposition oftheprovisional safeguard measures. Thus
itappeared thatArgentina hademployed provisional safeguard measures asanafter-the-fact means
tolendlegitimacy toGATT-inconsistent duties rather thanasanobjective endeavour toaddress injury
todomestic producers. Argentina 'snotification totheCommittee supported suchaconclusion. The
notification stated thattheprovisional measure which waspromulgated on24February 1997 was
necessary because themereabsence ofminimum specific duties would recreate thecritical circumstances
required fortheadoption ofprovisional measures. Thenotification alsostated that"theMinistry of
Economy advocates theremoval ofminimum specific duties onfootwear, which gives risetothe
imminent possibility ofserious injury orthethreat ofserious injury tothedomestic industry". Thus,
itappeared thattheGovernment ofArgentina hadcreated itsowncritical circumstances byremoving
itsspecific duties. ItwasnotclearwhyArgentina hadimposed identical provisional safeguard measures
toreplace those specific duties. Since October 1996, theUShadbeenengaged inconsultations with
Argentina tobring itstemporary duties onfootwear intoconformity withWTO requirements. This
raised thequestion whytheprovisional safeguard measures hadbeenimposed when Argentina was
engaged indiscussions seeking toendormodify thespecific duties andtobring themintoconformity
withWTO requirements. Therepresentative asked whether theGovernment ofArgentina hadintended
toimpose thesafeguards measures when itfirstengaged intheconsultations withtheUnited States.
33. Thetiming ofthesevarious actions heightened USconcerns. TheDecree removing thespecific
duties, issued on24February 1997, allegedly hadnecessitated theimmediate imposition ofprovisional
safeguard measures, alsoaccomplished on24February 1997. Theverynextday,theDispute Settlement
Body hadagreed totheformation ofaWTO Dispute Settlement Panel toreview Argentina 'sspecific
duties onthesame imported goods. TheUSwasconcerned about these apparent abuses oftheWTO
Safeguards Agreement andwished tobring these issues totheattention oftheCommittee. TheUS
waspursuing these issues inother WTO venues aswell. TheUSrepresentative offered toputthese
questions intowriting, andtoprovide themtotheCommittee andtoArgentina, sothatArgentina could
respond inwriting.
34. Therepresentative ofArgentina saidthathisdelegation understood thattheapplication ofa
provisional safeguard measure might raisesome concerns, andthatthiswasthereason forincluding
inthenotification theoffertoholdconsultations under Article 12oftheSafeguards Agreement. Such
consultations already hadbeenheldonabilateral basiswithother WTO Members. Without prejudice
tothis,andasaninitial reaction, ananalysis oftheperiod ofinvestigation (1991-1995), asshown in
document G/SG/N/6/ARG/1, itwaseasytodetect thattotalimports oftheinvestigated product hadG/SG/M/9
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increased from 8.86million pairs to15.11 million pairs, anincrease of72%, from 1991 to1995.
Forthesame period, thec.i.fvalue ofimports hadincreased from US$44.4 millions toUS$114.2
million, orby157%. Argentina could notaccept thecomment made bytheUnited States thatthis
measure wasbeing usedtolegitimize ex-post other types ofmeasures, anddidnotagree thattheother
measures wereWTO-inconsistent. Themeasures referred tobytheUSwere notaproper topic for
discussion within theSafeguards Committee. Argentina didnotaccept thatthere hadbeenanabuse
oftheAgreement onSafeguards. Argentina hadalways respected boththeletter andthespirit ofthe
Agreement. First, Argentina hadapproved theregulatory decree implementing theprocedures
contemplatedintheAgreement,whichdecreehadbeensuccessfullyreviewedbytheCommittee.Second,
inanalysing thefirstpetition presented byadomestic industry, theArgentine authorities hadacted
withthegreatest responsibility andseriousness, taking intoaccount theexceptional character ofa
safeguards measure. Third, before deciding toopentheinvestigation andapply aprovisional measure,
allelements offactandlawwithrespect towhich evidence wasontherecord oftheinvestigation had
beenevaluated. Finally, regarding thequestions posed bytheUnited States, Argentina would provide
written answers toanywritten questions received. (Subsequent tothemeeting, thewritten version
oftheUnited States 'questions wascirculated indocument G/SG/Q2/ARG/1. Argentina 'sanswers
were circulated indocument G/SG/Q2/ARG/2.)
35. TheCommittee tooknoteofthestatements made.
(iii) Notifications ofFindings ofSerious Injury orThreat Caused byIncreased Imports
36. TheChairman noted thatsincethelastmeeting oftheCommittee, threenotifications hadbeen
received reporting findings ofserious injury caused byincreased imports. Oneofthese notifications
wasfrom Brazil, withrespect totoys, andtwowerefrom Korea, ondairy products andonbicycles.
These notifications were contained inG/SG/N/8/BRA/1, G/SG/N/8/KOR/1 andG/SG/N/8/KOR/2,
respectively.
37. Therepresentative oftheEuropean Communities reminded thedelegation ofBrazil thatwritten
answers werepending onquestions theEChadposed bilaterally regarding Brazil 'snotification ofa
serious injury finding inthecaseoftoys(G/SG/N/8/BRA/1), andthatBrazil hadpromised toprovide
answers before applying ameasure. TheEC'sdoubts remained regarding thefinding ofserious injury.
Therepresentative ofBrazil saidthatheunderstood thatwritten answers hadbeensupplied during
consultations heldinDecember, andthatBrazil would behappy toprovide anyfurther explanations
orclarifications required. Therepresentative oftheEuropean Communities indicated thathewould
check therecord oftheconsultations, andwould clarify thesituation bilaterally withBrazil ifnecessary.
38. Therepresentative oftheEuropean Communities reminded theKorean delegation thattheEC
maintainedseriousdoubtsregardingKorea'sseriousinjuryfindingondairyproducts(G/SG/N/8/KOR/1).
39. TheCommittee tooknoteofthestatements made.
(iv) Notifications ofSafeguard Investigations Terminated withNoSafeguard Measure
Imposed
40. TheChairman noted thatsincetheCommittee ’slastmeeting, onenotification hadbeenreceived
ofatermination ofasafeguard investigation withnosafeguard measure imposed. Thisnotification
wasfromKorea, concerning itsinvestigation ofbicycles (G/SG/N/9/KOR/1 +Corr.1). Noquestions
were raised withrespect tothisnotification.G/SG/M/9
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(v) Notification ofDecisions toApply Safeguard Measures
41. TheChairman noted thatsince thelastmeeting oftheCommittee, threenotifications hadbeen
received regarding decisions toapply safeguard measures. ThefirstwasfromBrazil, regarding toys
(G/SG/N/10/BRA/1). Thesecond wasfromKorea, regarding dairy products (G/SG/N/10/KOR/1 +
Corr.1 +Suppl.1 +Suppl.1/Corr.1). ThethirdwasfromtheUnited States, concerning broom corn
brooms (G/SG/N/10/USA/1).
42. Therepresentative oftheEuropean Communities indicated thathisdelegation wasseriously
considering having theBrazilian measure examined further, given ECconcerns overthewaysafeguard
measures werebeing employed byanumber ofWTO Members. Safeguards seemed tohavebecome
ameans ofcountering simple increases inimports, withlittleexamination oftheconditions under which
those imports hadtaken place. TheECwasreflecting onhowbesttoprotect WTO rights inthisregard.
43. Regarding Brazil 'snotification, therepresentative ofJapan asked forclarification ofcertain
aspectsofBrazil'swrittenresponsestoJapan'swrittenquestions(G/SG/Q2/BRA/2).Brazilhadindicated
inthose answers thatimports from developing country Members, including Paraguay andUruguay,
which wereMercosur members, were exempt from themeasure inaccordance withArticle 9ofthe
Safeguards Agreement. Itwasnotclearwhether ornottheimports originating inArgentina wereexempt
fromthesafeguard measure, andifso,howthiswasjustified under theGATT 1994andtheAgreement;
fromBrazilian statistics available, theimports ofsome toysoriginating inArgentina exceeded 3%of
Brazil 's1995 imports oftotalimports oftheproduct. There seemed tobeacontradiction between
whatBrazil hadsaidatthelastregular Committee meeting (i.e.,thatthemeasure applied toallcountries,
butthatduetotheMercosur Treaty, theeffect ofthemeasure onthose countries wasnil),andBrazil 's
answers toJapan'squestions. Second, thelanguage ofArticle 2oftheAgreement required thata
safeguard measure could onlybeapplied onanindividual product basis, butBrazil 'sanswers toJapan's
questions seemed toimply thatBrazil hadnotconducted aproduct-by-product examination. Rather,
Brazil hadtreated alltoysasthebelonging tothesame class. Further clarification wasrequested on
howBrazil justified this. Third, Japan wasnotsatisfied withBrazil 'sinterpretation oftheconcept
"directly competitive product" anditsapplication tothiscase. There seemed tobenocross-elasticity
ofdemand between thedifferent product types investigated, forexample between wheeled toysand
video games. Theassertion thatalltoyproducts covered bythesafeguard measure directly competed
witheachother might notbesupported bymarket analysis. Thus, distinctions should bemade between
thedifferent categories onthebasis offactors suchasagelevels andsexes ofusers, prices, etc.A
more extensive market analysis should havebeenmade todetermine whether imports ofeachcategory
oftoyswere directly substitutable fordomestic toys. Japan wasconcerned inthisregard about the
views expressed byBrazil, andreserved itsrights under theWTO Agreements topursue thisissue.
44. Therepresentative ofBrazil, inresponse totheEC'squestion, stated thatthere hadbeentwo
opportunities forconsultations withtheEC,andthatBrazil hadtriedinthemostconstructive manner
possible topresent allinformation relevant totheinvestigation, andwould provide further dataif
necessary. Thedocuments thathadbeensupplied totheCommittee were quite complete andself-
explanatory, andinthem theECandother interested Members would findthenecessary information
concerning whyBrazil hadtaken safeguard action.
45. Regarding Japan'squestions, therepresentative ofBrazil replied firstthatthere wasno
contradiction between Brazil 'swritten answers toJapan andBrazil 'sstatements attheOctober meeting
asreflected intheminutes fromthatmeeting. Thesafeguard measure didnotapply toParaguay and
Uruguay (twoMercosur members) because theirtotalimports were bothbelow the3%deminimis
level. Nodifferent treatment hadbeenaccorded toMercosur members thantoanyotherWTO Members
during theinvestigation. AswastrueforArgentina, hadimports from Uruguay andParaguay been
above thedeminimis level, themeasure would haveapplied tobuthadnoeffect onthesetwocountriesG/SG/M/9
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because ofthe0%tariff preference these countries enjoy asmembers ofMercosur. Ameeting ofthe
Committee onRegional Trade Arrangements hadbeenheldtheprevious week, andinterested Members
could haveputquestions toBrazil regarding Mercosur during thatmeeting. Second, concerning the
analysis oftheselected variables onthebasis ofalltoysasoneclass, adetailed explanation onthis
issuehadbeenprovided inBrazil 'sanswers toJapan andinitsnotifications totheCommittee. Third,
theAgreement referred tobutdidnotdefine "directly competitive product". InBrazil 'sinvestigation,
thistermwasunderstood torefertothose products competing forthesame market, forthesame end
uses, thatisproducts thatwere directly substitutable. Toys were alldirectly substitutable among
themselves. Brazil would behappy toprovide fuller written answers toJapan onthese points.
46. Regarding Korea 'snotification ondairy products, thedelegate ofNewZealand thanked Korea
foritsnotification G/SG/N/10/KOR/1/Suppl.1, which represented aneffort torespond toquestions
andconcerns raised byMembers overKorea 'ssafeguard action onmilkpowder blends, andalsofor
theinclusion ofdataforthefirsthalfof1996initscalculations oftheimport quota level, totakeinto
accountmorerecentimporttrends.However,havingreviewedthenotification,NewZealandmaintained
thattheinitial decision toimpose asafeguard measure could notbesubstantiated ontheavailable
evidence. GATT Article XIXspecifically required thatKorea demonstrate thattheincrease inimports
wasduetounforeseen developments, andtheeffect ofobligations incurred including tariffconcessions,
before safeguards could beimplemented. These matters, andinparticular, unforeseen developments,
hadnotbeen adequately addressed byKorea inmaking itsdecision onsafeguard action. The
substantiationoftheexistenceofacausallinkbetweentheincreasedimportsandinjurywasquestionable,
given thattheuseofaggregated annual statistics forstock levels andprices could bemisleading. A
monthly analysis would show thatanyinjury wasnotduetoincreased imports. Theother possible
factors contributing toinjury hadnotbeenadequately examined. There wasnoonusonother Members
(asimplied byKorea) toidentify themajor cause ofinjury tothedomestic industry. Theburden of
disproving other possible sources ofinjury besides increased imports rested withthecountry seeking
toinvoke asafeguard action, andKorea hadnotmetthisrequirement. TheGovernment ofKorea had
notproduced anysolidevidence todiscount thefinding intheKorean FoodIndustry Association analysis
thatanyinjury caused tothedomestic industry wasunrelated totheincrease inimports. NewZealand
remained unconvinced thatKorea hadsatisfied therequirements under theSafeguard Agreement in
justifying thepresent safeguard action.
47. Thedelegate ofAustralia concurred withtheremarks ofNewZealand. Australia thanked Korea
fortheadditional information thathadbeenprovided tothem, andforincluding dataforthefirsthalf
of1996. ButAustralia shared theconcerns ofNewZealand regarding theestablishment ofacausal
link,andoverthefactthatother possible contributing factors causing ofinjury hadnotbeenadequately
examined when coming upwithafinding. Thus, Australia wasnotconvinced thatKorea hadsatisfied
therequirements under theSafeguards Agreement injustifying thepresent action. Australia was
examining whataction itmight takeinorder torectify thatsituation.
48. Thedelegate oftheEuropean Communities indicated thattheECauthorities shared almost
alloftheconcernsidentifiedbyAustraliaandNewZealand,andrecalledthathisdelegationhadrequested
aspecial meeting oftheCommittee, which tookplace inFebruary 1997, toexamine thisdetermination.
Theresults ofthatmeeting andofalloftheexaminations conducted bythisCommittee sofarhadbeen
unsatisfactory, interms ofremoving these concerns. Theuseofsafeguard measures, which should
beexceptional intheWTO context, inawaywhich raised attheveryleastconcerns about theirWTO
compatibility, andcoinciding withtheso-called "frugality campaign" being conducted inKorea for
which theEC'sposition hadalready beenstated inother WTO bodies, increased theconcerns. The
ECauthorities were considering whatsteps totaketoprotect theirrights under theWTO.
49. Therepresentative ofKorea recalled thatanentire session oftheCommittee hadbeendevoted
toadiscussion ofthissingle issueinFebruary, andthatKorea hadprovided fullinformation indetailG/SG/M/9
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tothecountries concerned, which hadbeencirculated asaWTO document. There waslittletoadd
inresponse tothestatements made. While taking note,andreserving therighttomake further responses
(forexample, regarding thereference to"unforeseen developments"), mostoftheconcerns andpoints
hadbeenaddressed andfullycovered byKorea 'spresentation attheFebruary special meeting and
thesupplemental notification thathadbeenmade. Inaddition, theissue ofthesafeguard measures
hadlittletodowiththefrugality campaign.
50. Regarding thesafeguard measure onbroom cornbrooms notified bytheUnited States, the
delegate ofColombia reiterated theserious concerns which hadalready beenraised intheCommittee 's
February special meeting, overthemanner inwhich thismeasure hadbeenadopted. Because this
measure wascontrary totheprocedures andrequirements established intheSafeguards Agreement
fortheadoption ofameasure, andbecause itwascausing serious prejudice toColombian exporters
ofthisproduct, Colombia hadrequested consultations intheframework oftheDSB, withtheaimof
clarifying thejustification forthemeasure, andfinding apositive solution tothismatter. Thesubstantive
questions overtheadoption ofthismeasure anditsmerits would beposed intheframework ofthe
above mentioned consultations.
51. Therepresentative ofMexico indicated thatashadbeenstated onprior occasions, theUS
investigation inquestion wasimproper, anddidnotcorrespond withtheUnited States 'international
obligations. Mexico hadtaken aseries ofstepstodefend itsinterests andrights, which itwould continue
topursue wherever itwasmost convenient. Mexico expected thattheUnited States would correct
thesituation assoonaspossible.
52. Therepresentative oftheUnited States indicated thathewould communicate tohisauthorities
theconcernsthathadbeenexpressed.RegardingColombia'srequestfordisputesettlementconsultations,
aletter would beprovided laterthatdayaccepting therequest forconsultations, which should be
conducted induecourse.
53. TheCommittee tooknoteofthestatements made.
(vi) Notifications ofnon-application ofsafeguard measures todeveloping countries
54. TheChairman noted thatsince thelastmeeting oftheCommittee, threenotifications hadbeen
received concerning non-application ofsafeguard measures todeveloping country Members whose
imports were below therelevant threshold levels. These notifications were from Brazil ontoys
(G/SG/N/11/BRA/1), fromKorea ondairy products (G/SG/N/11/KOR/1), andfromtheUnited States
onbroom cornbrooms (G/SG/N/11/USA/1).
55. Regarding theUnited States 'notification onthebroom cornbroom measure, therepresentative
ofHong Kong, recalling Hong Kong'sintervention attheFebruary 1997special meeting, voiced concern
overtheunilateral andarbitrary manner inwhich theUnited States hadapplied thedeveloping country
provision inArticle 9.1oftheSafeguards Agreement. On28November 1996, theUSimposed a
temporary increase inthetariff onimports ofbroom cornbrooms from certain suppliers, including
Hong Kong. Under Article 9.1oftheSafeguards Agreement, theUSwasrequired nottoapply the
measure toaproduct originating from developing countries, solongassuchcountries individually
accounted fornotmore than3%oftotalimports, andcollectively lessthan9%oftotalimports of
theproduct concerned. Hong Kong'sexports oftheproduct totheUnited States were deminimis,
amounting toUS$1,923 in1994, US$128 in1995, andnilin1996. Thus, Hong Kong should have
beenexcluded from themeasure. During theCommittee 'sspecial meeting inFebruary, theUShad
stated thattheexemption listhadbeendrawn upbased onthelistofbeneficiaries oftheUSGeneralized
System ofPreferences scheme, towhich Hong Kong wasnotaparty. Hong Kong hadaprincipled
objection totheUnited States 'using thisbasisfordetermining itsexemption list.GSPwasapreferentialG/SG/M/9
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scheme, andthedonor country thusarguably could havediscretion indeciding thelistofbeneficiaries.
Butthesituation wasentirely different intheWTO context. Ithadbeenlongstanding GATT practice
thatdeveloping country status wasself-elected, andthispractice hadnotchanged since thecoming
intoforceoftheWTO. Hong Kong could notregard itselfasadeveloped country when otherdeveloped
countries didnotregard Hong Kong asanequal. Asanexample, Hong Kong'stextile product exports
tosome developed countries were stillsubject toquotas. Hong Kong opposed theUnited States '
unilateral exclusion ofHong Kong from thedeveloping country provision under Article 9.1ofthe
Safeguards Agreement merely onthegrounds thatHong Kong wasnotincluded intheUSlistofGSP
beneficiaries. Allowing aWTO Member tounilaterally, arbitrarily orselectively define orredefine
another Member 'sstatus under theWTO should beofgrave concern toallMembers, particularly
developing countries. Such apractice rantheriskofopening abackdoortonullifying orimpairing
WTO benefits accruing toindividual Members, which were associated withtheirstatus, andwhich
hadbeennegotiated under previous rounds ofmultilateral negotiations. Hong Kong hadaprincipled
objection totheUnited States 'unilateral andarbitrary determination ofHong Kong'sstatus intheWTO
forpurposes ofArticle 9.1oftheAgreement. Theissuewasofsystemic interest toHong Kong, which
reserved itsrighttotakethematter further ifappropriate.
56. Thedelegate oftheUnited States saidthatsincetherewerenoadditional arguments withrespect
toHong Kong'sintervention intheFebruary special meeting oftheCommittee, hewasunable toadd
anything tothecomments thathadbeenmade there, which seemed tohavebeenwellunderstood.
Nevertheless, hewould communicate Hong Kong'sconcern tohisauthorities.
57. TheCommittee tooknoteofthestatements made.
(vii) Notifications regarding consultations
58. TheChairmannotedthatsincethelastmeeting,anumberofnotificationsregardingconsultations
under Article 12oftheAgreement hadbeenreceived. TheUnited States hadnotified theresults of
itsconsultations onbroom cornbrooms withColombia, Honduras andMexico (G/L/136-G/SG/6).
Requests forconsultations fromtheEC,Australia andNewZealand toKorea concerning dairyproducts
hadbeenreceived, andtheresults ofthose consultations hadbeennotified byKorea (G/SG/7, G/SG/8,
G/SG/9, G/SG/10, andG/L/156-G/SG/11, respectively). Finally, theEChadnotified arequest for
consultationswithArgentinaconcerningfootwear,andArgentinahadnotifieditsresponsetothatrequest.
(G/SG/12 andG/SG/13, respectively).
59. Therepresentative oftheEuropean Communities reported thatconsultations heldtheprevious
week withArgentina concerning theprovisional measure onfootwear hadbeenpositive, butsome
concerns remained, sothatfurther clarification would continue tobesought onthismatter. Thedelegate
ofArgentina agreed tocontinue toconsult, andhoped thatthesame constructive spirit could be
maintained during theconsultations.
60. Therepresentative ofColombia stated, inregard totheUnited States 'notification oftheresults
ofconsultations onbroom cornbrooms (G/L/136-G/SG/6), thattheUShadnotafforded adequate
opportunities forconsultations assetforth inArticle 12.3oftheAgreement onSafeguards. TheUS
notification mentioned three separate consultations, butthe16August 1996 consultations hadbeen
withtheprivate sector, andthushadnothing todowith Article 12.3 consultations, which are
intergovernmental. Similarly, theconsultations held28August 1996 didnotsatisfy therequirement
ofArticle 12.3thatconsultations beheldonceadecision hadbeentaken toimpose asafeguard measure,
astoColombia 'sunderstanding, thisdidnothappen until30August 1996when theUSPresident decided
toauthorize theimposition ofameasure andtodirect USTR towithin 90days negotiate and
conclude agreements relating totheexports ofbroom cornbrooms totheUnited States. Within this
period (30August to30November), Colombia wasinvited toameeting on27November which couldG/SG/M/9
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notbecalled aconsultation, butrather anotification session ofthemeasure tobeadopted thefollowing
day.Inthiscontext, Colombia asked theUnited States toanswer thefollowing questions: Asofwhat
datedidtheUSconsider thatconsultations under Article 12.3should beheld? After theITC's
determination onserious injury? After theITC'sreport totheUSPresident? OrafterthePresident
decided toadopt ameasure andauthorized theUSTR tonegotiate andconclude agreements within
90daysrelative toexports ofbroom cornbrooms totheUnited States? (Subsequent tothemeeting,
Colombia 'squestions totheUnited States were circulated indocument G/SG/Q2/USA/1).
61. Therepresentative ofMexico stated thathisdelegation hadnoinformation regarding whether
theconsultations between Mexico andtheUnited States reported indocument G/L/136-G/SG/6 had
actually taken place. Consultations might havebeenheldunder other provisions which regulate trade
between theUSandMexico, butcertainly thesewerenotconsultations under Article 12.3oftheWTO
Safeguards Agreement.
62. Therepresentative oftheUnited States inreply toColombia andMexico stated thathehad
noinformationotherthanthatcontainedinthenotifications,andthathewouldcommunicatethequestions
backtohiscapital totrytoclarify thesituation. Heasked Colombia toprovide itsquestions inwriting,
andindicated thattheUSwould trytoreply inwriting, andtoprovide more information toboth
Colombia andMexico. Colombia 'squestions might beworking atcross purposes, given Colombia 's
request fordispute settlement consultations, although Colombia didhavearight alsotoraisethose
questions inthisCommittee. ButifColombia would provide thequestions inwriting, theUnited States
would trytorespond inwriting bythedeadline. (TheUnited States 'written answers toColombia 's
written questions subsequently were circulated indocument G/SG/Q2/USA/2).
63. TheCommittee tooknoteofthestatements made
D. Notifications related topre-existing Article XIXmeasures
64. TheChairman noted thatsince thelastmeeting oftheCommittee, twonotifications related
topre-existing Article XIXmeasures hadbeenreceived, from Liechtenstein andSenegal. Both of
these werenilnotifications, andassuchwerenotrequired under theAgreement. Noquestions were
raised regarding these notifications.
E. Notifications related tomeasures covered byArticle 11.1
65. TheChairman noted thatnotifications alsohadbeenreceived fromLiechtenstein andSenegal
withrespect tomeasures covered byArticle 11.1. Bothofthesewerenilnotifications, andhence were
notrequired under theAgreement. Noquestions were raised regarding these notifications.
F. Follow-up toSingapore Ministerial
66. TheChairman recalled thatMinisters hadmade anumber ofstatements intheSingapore
MinisterialDeclarationconcerningimplementationoftheWTOAgreements,notificationsandlegislation,
andtheparticular situation ofdeveloping country Members. These statements recognized that
implementation andcompliance withnotification andlegislation obligations would require further effort
onthepartofMembers,suggestedthattherelevantbodies,suchasthisCommittee,takestepstopromote
fullcompliance while considering practical proposals forsimplifying thenotification process, andnoted
theagreement ofMinisters toimprove theavailability oftechnical assistance todeveloping countries.
Healsorecalled theefforts ofMembers oftheCommittee andoftheSecretariat intheareaof
implementationassistanceinthecontingenttraderemediesarea,includingsafeguards,hadbeendiscussed
insome detail intheCommittee onAnti-Dumping Practices earlier thatweek.G/SG/M/9
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67. Therepresentative from theUnited States proposed thatgiven thedisappointing quantity of
notifications thathadbeenreceived, itwould beappropriate fortheChairman tosendletters tonon-
notifiers posing thequestion oftheirnotification directly, andoffering theassistance oftheSecretariat
incompleting thenotifications.
68. Therepresentative ofPeruexpressed theappreciation ofherGovernment toward theSecretariat
forasafeguards agreement implementation workshop which hadbeenheldinLima inOctober 1996.
69. TheChairman agreed withtheproposal bytheUnited States, butbefore proceeding withthose
letters wanted toexplore options toachieve similar results using thehandbook onnotification.
70. TheChairman proposed thattheCommittee jointheCommittees onAnti-dumping Practices
andSubsidies andCountervailing Measures inexpressing support fortheprogramme ofworkshops
andother training efforts conducted bytheSecretariat intheareaofcontingent trade remedies.
71. TheCommittee sodecided.
72. TheChairmanalsoproposedthattheCommitteeexpressencouragementforthesupportprovided
byMembers, whether through financial contributions, orthrough assistance inkind,fortheSecretariat ’s
efforts inthisregard.
73. TheCommittee sodecided.
G. Recommendation oftheWorking Group onNotification Obligations andProcedures
74. TheChairman recalled thattheWorking Group onNotification Obligations andProcedures
made certain recommendations, which wereunder consideration bytheCouncil forTrade inGoods
regarding thepossible development bytheCouncil ofgeneral guidelines providing fortheregular review
ofquestionnaires andformats andofthesituation asregards compliance withnotification obligations
(G/L/112). TheGoods Council, atitsmeeting of11March 1997, discussed thisissueandrequested
theSecretariat toprepare apaper regarding possible guidelines withrespect totheregular review of
thesituation asregards compliance withnotification obligations (G/C/M/18).
75. TheChairman noted inthisregard thatthisCommittee, bytaking stockofthesituation regarding
notifications ateachofitsregular meetings, already acted inaccordance withthespirit oftheWorking
Group 'srecommendation onthismatter. Onnotification formats, although theGoods Council might
notdevelop horizontal guidelines inthisregard, theWorking Group 'srecommendation nonetheless
raised thequestion whether theCommittee should return toitsnotification formats atsome future point,
inlightoftheexperience intheirusethatwasbeing acquired. IfanyMember hadsuggestions orideas
inthisregard, theyshould contact theChairman oftheCommittee sothatthese suggestions could be
explored byMembers.
H. Other business
Noissue wasraised under thisitem.
I. Election ofofficers
76. TheCommittee elected Mr.Seiichi Nagatsuka ofJapan asChairman, andMr.Dmitrij Grcar
ofSlovenia asViceChairman, oftheCommittee.G/SG/M/9
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J. Dateofnextregular meeting
77. TheChairman recalled thattheCommittee hadagreed thatitsregular meetings normally would
beheldinthelastweek ofApril andthelastweek ofOctober, inconjunction withtheregular meetings
oftheCommittees onAnti-dumping Practices andonSubsidies andCountervailing Measures. Given
thenumber ofdaysinthefallthatwould beneeded formeetings covering anti-dumping issues, he
proposed thattheCommittee 'snextregular meeting beheldintheweek of20October 1997.
78. TheCommittee sodecided.
79. Themeeting wasadjourned.