G/SG/N/7/IDN/3  
G/SG/N/11/IDN/19  
6 November  2019 
(19-7555) Page: 1/7 
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  
INDONESIA  
(Yarn (Other Than Sewing Thread) Of Synthetic and Artificial Staple Fibres)  
The following communication, dated 5  November  2019, is being circulated at the request of the 
delegation of Indonesia.  
 
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NOTIFICATION UNDER A RTICLE 12.4 BEFORE T AKING PROVISIONAL SA FEGUARD 
MEASURES  
1  SPECIFY T HE PRODUCT SUBJECT T O THE PROPOSED PROVI SIONAL SAFEGUARD 
MEASURE  
Yarn ( Other Than Sewing Thread ) of Synthetic  and Artificial Staple Fibres  ("the product concerned "), 
under HS Code 5509.22.00, 5509.32.00, 5509.51.00, 5509.53.00, 5510.12.00, 5510.90.00.  
2  SPECIFY T HE PROPOSED PROVISIO NAL SAFEGUARD MEASUR E 
The proposed provisional safeguard measure is in the form of specific tariff as much as Rp.  1,405/kg.  
3  SPECIFY T HE PROPOSED DATE OF THE INTRODUCTION OF THE PROPOSED 
PROVISIONAL SAFEGUAR D MEASURE  
The provisional safeguard measure is proposed to enter into force after the publication of the decree 
of the Minister of Finance of the Republic of Indonesia, which will be promulgated at the Official 
Gazette.  
4  SPECIFY  THE EXPECTED DURATION  OF THE PROVISIONAL SAFEGUARD MEASURE  
The provisional safeguard measure will be applied for 200 days from the date of its entry into force.  
5  PROVIDE THE BASIS FO R: 
(i) Making a preliminary determination, as provided for in Article 6, that increased 
imports have caused or are threatening to cause serious injury;  
 Unforeseen Development  
a. The yarn industry in People 's Republic of China (PRC)  experienced an increase in 
production capacity by 14.8% during 2015 -2018, which lead to  an increase  in yarn G/SG/N/7/IDN/3 • G/SG/N/11/IDN/19  
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  production in PRC. This condition unexpectedly led to a significant growth in production 
and export of PRC 's yarn throughout the world, including Indones ia, which is 
unforeseeably caus ing a surge increase in imports of staple yarn in Indonesia.  
b. There has been a significant increase in yarn production in China with a trend of 6.91 % 
over the 2015 -2018 periods . In addition, the productivity of the PRC's yarn industry 
also increased during 201 5-2018 with a trend of 6.33 %. This situation led to  the surge 
increase of yarn exports from PRC  to other countries, including  Indonesia, causing a 
surge in crease in  imports of yarn in Indonesia.  
 Increased  Imports  
a. absolute  
The absolute increased import s of the  product concerned are presented at the table below : 
Description  Period of Investigation  Trend (%)   
2016  2017  2018  January -June  2016 -2018  
2018  2019  
Import Volume (Ton)  10,036 15,846 20,922 9,966 7,364 44.38 
Source :  Indonesian  Statistics (BPS) . 
The import volume of the product concerned has increased during the period of 2016 -2018, from 
10,036 tons in 2016 to 15,846 tons in 2017 and increased again to 20,922 tons in 2018 . During the 
period of 2016-2018, import volume has increased in absolute terms with the trend by 44.38 %. 
The import volume of the product concerned in the period of January -June 2018 to of 
January -June 2019 decreased from 9 ,966 tons to 7 ,364 tons. Although imports experienced a 
decline in January -June 2018-2019 period, the economic indicators of the domestic industry has not 
yet improved due to the impact of increased imports in previous years . It is worried  that in the  
coming years the volume of imports will increase again  and it will worsen the injury  of the domestic 
industry in Indonesia . 
b. relative to domestic production  
The imports relative to domestic production of the  product concerned are presented at the table 
below : 
Description  Period of Investigation  Trend (%)  
 2016  2017  2018  January -June  2016 -2018  
2018  2019  
Import relative to 
domestic production 
(Index)  100 156.52 206.69 100 78.60 43.79 
Source : Indonesian Statistics (BPS) . 
As seen in table above, there was a surge in import relative to domestic production during the period 
of 2016 -2018, from 100 index points  in 2016 to 156.52 index points  in 2017, and  continued to 
increase to 206.69 index points  in 2018.  
The import volume relative to domestic production of the product concerned also increased in the 
period of January -June 2018-2019 from 100 index points to 78.60 index points.  
c. share of imports  
The share of imports of the major exporters in 2018 are presented at the table below:  
Exporters  Volume (Ton)  Share (%)  
People 's Republic of China (PRC)  14,104  67.42 
Thailand  2,697 12.88 G/SG/N/7/IDN/3 • G/SG/N/11/IDN/19  
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  Exporters  Volume (Ton)  Share (%)  
Turkey 1,575 7.53 
Vietnam  1,050 5.02 
India 659 3.15 
Other Countries  837 4.00 
Total  20,922 100 
Source : Indonesian Statistics (BPS) . 
Based on the table above, the largest exporters of product concerned to Indonesia in 2018 were the 
PRC with a share of 67.42%, followed by Thailand  with a share of 12.88%, Turkey with a share of 
7.53%, Vietnam with a share of 5 .02%, India with a share of 3 .15% and Othe r Countries with a 
share of  4%. 
 Serious Injury or Threat of Serious Injury  
In order to make a determination  of serious injury or threat thereof to the domestic producers of 
the products concerned, an evaluation of all relevant factors of an objective and quantifiable nature 
having a bearing on the situation of the domestic industry has been undertaken between 2 016-2018 
and period of January -June 2018-2019. Figures on economic indicators of the domestic producers 
are based on the petition submitted by domestic producers.  
The general economic indicators related to all products concerned in the safeguard investigat ion are 
presented at the table below.  
Indicators  Unit Year Trend 
(%) Growth 
(%) 
  2016  2017  2018  January -June  16-18 Jan-Jun 
18-19 2018  2019  
Production  Index  100 100.94 101.31 100 94.36 0.65 -5.64 
Domestic Sales  Index  100 103.48 92.30 100 93.56 -3.93 -6.43 
Productivity  Index  100 106.89 111.42 100 98.22 5.55 -1.78 
Capacity  Utilization  Index  100 100.66 101.25 100 93.19 0.62 -5.37 
Loss Index  (100) (195.61) (107.89) (100) (58.37) 4.22 41.63 
Employment  Index  100 94.44 90.93 100 96.07 -4.64 -3.93 
Inventory  Index  100 110.38 116.72 100 122.63 8.03 22.63 
Market Share of 
Applicant  Index  100 100.98 94.00 100 101.90 -3.05 0.91 
Market Share of 
Non-Applicant  Index  100 92.74 94.25 100 102.56 -2.92 1.07 
Market share of 
Imports  Index  100 154.09 212.30 100 80.41 45.71 -1.99 
Source : Indonesian Textile Association (API) 's Petition . 
Based on table above, Applicant 's production during 2016 to 2018 were relatively stable with a trend 
of 0.65 %, but in the January -June 2019 period it declined again by 5.64% compared to the previous 
period.  
The Applicant 's domestic sales during the period of 2016 -2018 decreased with a trend 3 .93%. 
Moreover, in the period of  2016 to 2017 domestic sales increased  from 100 index points to 103 .48 
index points, and then  decline to 92.30 index points in 2018 . Furthermore, in the period of 
January -June 2018-2019 the Applicant 's domestic sales also decreased by 6,43 % from 100 index 
points in th e January -June 2018 period to 93 .56 index points in the January -June 2019 period.  
Productivity during 2016 to 2018  increase with a trend of 5.55 %, and again decreased 1.78 % in 
2019 January -June compared to the same period the previous year.  
The c apacity utilization relatively stable d during the period of 2016 -2018. However, in the period  of 
January -June 2018-2019 the Applicant 's capacity utilization experienced a  decrease  by 5.37% from 
100 index points in the January -June 2018 period  to 93 .19 index points in the January -June 2019 
period.  G/SG/N/7/IDN/3 • G/SG/N/11/IDN/19  
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  In terms of op erating profit/loss, the Applicant had experienced a loss of 100 points in 2016, and in 
2017 the Applicant  suffer a nother  financial losses of 195.61 index points in 2017 and 107 .89 index 
points in 2018 . Furthermore, financial losses con tinued in the period of January -June 2018-2019 by 
100 index points and 58.37 index points . 
The decline in domestic sales has an impact to the financial situation of the Applicant , which led to 
the financial losses and an increase of operational cost . This situation  forced the Applicant  to reduce 
employment in 2016 -2018 with a trend of 4.64 % and also in period of January – June in 2018 – 
2019 by 100 index points to 96.07 index points.  
The decrease in national consumption that occurred in 2016 -2018 was in line with  the decrease of 
the Applicant 's domestic sales . This situation was inversely with the increase volume of import . The 
increase  volume of import  has taken the market share of the Applicant 's and Non -Applicant 's during 
the period of 2016 -2018 with  the decrease  of trend by 3.05% and 2.92 % respectively, while in the 
same period the import market share increased with a trend of 45.71 %. 
Based on the paragraphs above, the Investigating Authority provisionally concluded that during the 
investigation period, the Applica nt suffered a threat of serious injury based on performance 
indicators which showed that there had been an upward trend in financial losses and inventory and 
a downward trend in  domestic sales and employment . 
 Causal Link  
Based on the results of the preliminary determination as mentioned in paragraphs above, the 
Investigating Authority provisionally concluded that there is a causal link between a threat of serious 
injury suffered by domestic industry to the increase in imports of the product concerned, based on:  
a. There was a sharp, sudden, recent, and significant increase d in imports of product 
concerned in absolute and relative terms during 2016 -2018 and 
January -June 2018-2019.  
b. There had been an upward trend in financial losses and inventory and a downward trend 
in domestic sales and employment . 
c. During period of 2016 -2018 the market share of imports increased with a trend of 
45.71%, which caused the market share of Applicant decl ined with a trend of 3 .05%, 
and the market share of Non -Applicant also d eclined with a trend of 2 .92%. 
The Investigating Authority has not identified other factors that would weaken the causal link 
between the increase in imports and the serious injury of the domestic industry . Nevertheless, a 
more detailed examination of all other factors that have or may have contributed to the injury will 
be undertaken in the remainder of the investigation.  
(ii) Determining  that there are critical circumstances where delay wo uld cause 
damage which it would be difficult to repair.  
There are a number of the Applicant 's member companies that are currently in a critical situation 
that is very problematic  and can adversely affect the business activities of the referred members.  
These critical circumstances  can be seen in its financial ratio where the Applicant experiencing 
financial problems in terms of liquidity, solvency, activities, and profitability wh ich if not immediately 
addressed will lead to business bankruptcy  as stipulated from z -score . 
No Ratios  Unit Result  Benchmark  
1 Liquidity Ratio      
Current Ratio  % Average  
95.7 ≥ 100  
Quick Ratio  % Average  
38.2 ≥ 100  
Cash Ratio  % Average  
2.7 ≥ 100  G/SG/N/7/IDN/3 • G/SG/N/11/IDN/19  
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  2 Solvability Ratio      
Debt to Equity Ratio  % Average  
208.1  ≤ 100  
3 Activity Ratio     
 Account Receivable Turnover Ratio  X Average  
6.0 ≥ 10 
 
Inventory Turnover Ratio  X Average  
2.8 ≥ 10 
 Fix Asset Turnover Ratio  X Average  
1.4 ≥ 10 
 Total Asset Turnover Ratio  X Average  
0.7 ≥ 10 
4. Profitability Ratio      
Profit Margin  % Average  
0.1 ≥ 5 
Operating Profit Margin  % Average  
(1.1) ≥ 5 
Return on Investment  % Average  
(23.7)  ≥ 5 
Return on Asset  % Average  
(0.2) ≥ 5 
5 Z-score  Score  Average  
1.0 ≥ 2.9  
Source : Indonesian Textile Association (API) . 
As it can be seen from the above ratios, the very viability of the producers concerned is a stake, and 
the preliminary determination of the Investigating Authority is that unless provisional safeguard 
measures are urgently taken, irreparable damage will result in terms of capacity shut downs, plant 
closures and eventual bankruptcy.  
The table below shows eight yarn manufacturers in Indonesia who went bankrupt and closed their 
yarn businesses du ring 2016 -2019 (January -June) . 
No Companies  Employment  
1 PT. Daya Samatex  1,000  
2 PT. Firman Jaya Pertenunan  180 
3 PT. Indopanca Centratex  500 
4 PT. Mercu Prima  2,000  
5 PT. Pasific Texindo  1,500  
6 PT. Tristate Indonesia  950 
7 PT. Unilon 1,000  
8 PT. World Yamatex  1,000  
Total  8,130  
Source : Indonesian Textile Association (API) . 
6  OFFER OF CONSULTATIO NS 
The Government of the Republic of Indonesia offers consultations on the provisional safeguard 
measures.  
NOTIFICATION UNDER A RTICLE 9, FOOTNOTE 2 UPON TAKI NG A DECISION NOT TO  APPLY 
THOSE PROVISIONAL SA FEGUARD MEASURES TO CERTAIN PRODUCTS ORI GINATING IN 
DEVELOPING COUNTRIES  
1  SPECIFY THE MEASURE  
The proposed provisional safeguard measure is in the form of specific tariff as much as Rp.  1,405/kg.  G/SG/N/7/IDN/3 • G/SG/N/11/IDN/19  
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  2  SPECIFY THE PRODUCT SUBJECT TO THE MEASU RE 
Yarn (other than sewing thread) of Synthetic and Artificial Staple Fibres, under HS Code  5509.22.00, 
5509.32.00, 5509.51.00, 5509.53.00, 5510.12.00, 5510.90.00.  
3  SPECIFY THE DEVELOPI NG COUNTRIES TO WHIC H THE MEASURE IS NOT A PPLIED 
UNDER ARTICLE  9.1 OF  THE AGREEMENT ON SA FEGUARDS  
The developing countries which are excluded from the provisional measure as the ir export in 
quantities less than 3 % of imports to Indonesia are listed below  under Article 9.1 of th e Agreement 
on Safeguards.  
TABLE . LIST OF DEVELOPING CO UNTRIES MEMBERS OF T HE WTO TO WHICH THE 
PROVISIONAL MEASURES  DO NOT APPLY  
No. Developing Countries  No. Developing Countries  
1 Afghanistan  48 Honduras  
2 Albania  49 Hong Kong, China  
3 Angola  50 Israel  
4 Antigua and Barbuda  51 Jamaica  
5 Argentina  52 Jordan  
6 Armenia  53 Kazak hstan 
7 Bahrain, Kingdom of  54 Kenya  
8 Bangladesh  55 Korea, Republic of  
9 Barbados  56 Kuwait, the State of  
10 Belize  57 Kyrgyz Republic  
11 Benin  58 Lao People's Democratic Republic  
12 Bolivia, Plurinational State of  59 Lesotho  
13 Botswana  60 Liberia  
14 Brazil  61 Liechtenstein  
15 Brunei Darussalam  62 Macao, China  
16 Burkina Faso  63 Madagascar  
17 Burundi  64 Malawi  
18 Cabo Verde  65 Malaysia  
19 Cambodia  66 Maldives  
20 Cameroon  67 Mali  
21 Central African Republic  68 Mauritania  
22 Chad 69 Mauritius  
23 Chile 70 Mexico  
24 Colombia  71 Moldova, Republic of  
25 Congo  72 Mongolia  
26 Costa Rica  73 Montenegro  
27 Côte d'Ivoire  74 Morocco  
28 Cuba  75 Mozambique  
29 Democratic Republic of the Congo  76 Myanmar  
30 Djibouti  77 Namibia  
31 Dominica  78 Nepal  
32 Dominican Republic  79 Nicaragua  
33 Ecuador  80 Niger  
34 Egypt  81 Nigeria  
35 El Salvador  82 Oman  
36 Eswatini  83 Pakistan  
37 Fiji  84 Panama  
38 Gabon  85 Papua New Guinea  
39 The Gambia  86 Paraguay  
40 Georgia  87 Peru  
41 Ghana  88 Philippines  
42 Grenada  89 Qatar  
43 Guatemala  90 Russian Federation  
44 Guinea  91 Rwanda  
45 Guinea -Bissau  92 Saint Kitts and Nevis  
46 Guyana  93 Saint Lucia  
47 Haiti  94 Saint Vincent and the Grenadines  G/SG/N/7/IDN/3 • G/SG/N/11/IDN/19  
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  No. Developing Countries  No. Developing Countries  
95 Samoa  109 Togo  
96 Saudi Arabia, Kingdom of  110 Tonga  
97 Senegal  111 Trinidad and Tobago  
98 Seychelles  112 Tunisia  
99 Sierra Leone  113 Uganda  
100 Singapore  114 Ukraine  
101 Solomon Islands  115 United Arab Emirates  
102 South Africa  116 Uruguay  
103 Sri Lanka  117 Vanuatu  
104 Suriname  118 Venezuela, Bolivarian Republic of  
105 Chinese Taipei  119 Yemen  
106 Tajikistan  120 Zambia  
107 Tanzania  121 Zimbabwe  
108 The former Yugoslav Republic of Macedonia 
(FYROM)    
 
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