G/SG/N/6/MDG/ 9 
G/SG/N/7/MDG/ 9 
G/SG/N/11/MDG/ 9 
14 February  2023 
(23-1071) Page: 1/6 
Committee on Safeguards  Original:  French  
 
  
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  
MADAGASCAR  
Concentrated Milk  
The following communication, dated and received on 13 February 2023 , is being circulated at the 
request of the dele gation of Madagascar.  
 
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Pursuant to Article 12. 1(a) and 12.4  of the Agreement on Safeguards, the Committee on Safeguards 
is hereby  notified of the initiation of a  safeguard  investigation on import s of concentrated milk  to 
Madagascar , and  is being notified prior to the application of a provisional safeguard measure , as 
referred to in Article 6 of  the Agreement . It is also  hereby  notified, pursuant to Article 9, footnote 2, 
of the Agreement on Safeguards, of the decision not to apply the proposed safeguard measure to 
imports originating from developing countries.  
A. NOTIFICATION UNDER ARTICLE 12.1  (A) OF THE AGREEMENT ON S AFEGUARDS ON 
INITIATION OF AN INVESTIGATION AND THE REASONS FOR IT  
Faced with imports of concentrated milk in such increased quantities as to impair its position , the 
domestic industry concerned filed a petition with the National Authority for Trade Remedies 
(ANMCC) , requesting  the application of a safeguard measure  pursu ant to  Article XIX of GATT, the 
WTO Agreement on Safeguards  and Decree N o. 2017 -695 of 16  August  2017 establishing the 
applicable procedures for trade remedies  in Madagascar . 
Following consideration of the admissibility of  the petition, the ANMCC decided to initiate a safeguard 
investigation on imports of concentrated milk  to Madagascar.  The key points relating to the initiation 
of this investigation are as follows:  
1. Date of initiation  
The investigation was initiated on 11 Fe bruary 2023 , on which  date the notice of initiation was 
published in two national newspapers authorized to receive legal notices  ("LA VÉRITÉ" and 
"TARATRA") . G/SG/N/6/MDG/ 9 • G/SG/N/7/MDG/ 9 • G/SG/N/11/MDG/ 9 
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  2. Product under consideration  
The product under consideration  is concentrated milk packaged in diffe rent types of  packaging and 
imported under HS tariff codes 04029100  and 04029900 in accordance with the Malagasy customs 
tariff. Concentrated milk may contain added sugar or not, and may be skimmed or semi -skimmed.  
3. Exporting countries  
The main countries ex porting concentrated milk  to Madagascar are  Malaysia, the Netherlands, 
Singapore and  China.  
4. Reasons  justifying  the initiation of the investigation  
The domestic concentrated milk  industry has provided evidence showing  that imports of the product 
under consideration  increased both in absolute terms and relative to domestic production during  the 
period 2020-2022. A 110 points  increase has been recorded in the past three years , the period 
covered by the  investigation.  
This rise in imports has had adverse consequences for the domestic producer, in particular for levels 
of production , market share, capacity utilization  and sales, and has caused losses to acc umulat e. 
The investigation will allow the Authority to collect relev ant information in order to verify the 
petitioner 's claims and provide interested parties with opportunities to provide their views and 
comments in accordance with Article 3 of the Agreement on Safeguards, which shall be taken into 
account in the rest of t he proceedings.  Upon conclusion of this investigation a safeguard measure  
may be taken to enable  the domestic industry to remedy the injury and to make the necessary 
adjustments  so that it can adapt to  the competition.  
5. Duration of the investigation  
The investigation will last for around  9 months and may be extended up to 12 months.  
6. Further  information  
Interested parties must make themselves known to the ANMCC, the investigating authority, within 
a period of 30 days after the initiation of the investigation.  
Any information or comments that interested parties may wish to submit , and requests for 
questionnaires, must be submitted in writing to the ANMCC within a period of 30 days after the 
initiation of the investigation.  
The ANMCC may org anize public hearings, either at the request of interested parties or ex officio , 
so as to enable interested parties to  present evidence and, in particular, to have the opportunity to 
respond to the presentations of other parties and to make their views kn own, and to  defend their 
interests.  
Replies to the questionnaire and any  other  relevant information  that the  parties wish to submit must 
be sent to the ANMCC within a period of 30 working days after the initiation of the investigation.  
If the  replies to th e questionnaire and any additional  information requested from the interested 
parties within the framework of th is investigation is not provided within the specified time frame, 
decisions  will be made on the basis of the best information available.  This wil l also be the case if 
information is  erroneous  or incomplete.  G/SG/N/6/MDG/ 9 • G/SG/N/7/MDG/ 9 • G/SG/N/11/MDG/ 9 
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  B. NOTIFICATION UNDER ARTICLE 12.4 OF THE  AGREEMENT ON SAFEGUARDS BEFORE 
TAKING A PROVISIONAL SAFEGUARD  MEASURE REFERRED TO IN ARTICLE  6 
1. Product covered by the provisional measure  
The product covered by the provisional measure  is concentrated milk packaged in different types of 
packaging and imported under HS tariff codes 04029100 and 04029900 in accordance with the 
Malagasy customs tariff. Concentrated milk may contain added sugar or not, and may be skimmed 
or semi -skimmed.  
2. Proposed provisional safeguard measure  
The provisional safeguard measure will take the form of a n additional duty to the ad valorem  customs 
duty, charged at a rate of 32% of c.i.f. value.  
3. Proposed date of introdu ction of the safeguard measure  
The provisional safeguard measure  will enter into force as of 11 February 2023,  the date of 
publication of the relevant public notice.  
4. 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. Basis  for application of the provisional safeguard measure  
According to Article 6 of the Agreement on Safeguards: " In critical circumstances where delay would 
cause damage which it  would be difficult to repair, a Member may take a provisional safeguard 
measure pursuant to a preliminary determination that there is clear evidence that increased imports 
have caused or are threatening to cause serious injury. " Analysis of the petition o f the domestic 
industry permitted the existence of critical circumstances to be found due to the significant and 
meaningful impairment of its performance indicators, in particular in terms of the rate of the increase 
in imports, market share, production ca pacity utilization, and profits and losses. The following 
preliminary determination  was thus made : 
I. UNFORESEEN DEVELOPMENTS  
Madagascar's accession to the WTO in 1995 did not take into account the risk associated with the 
expansion of the trade in "fat -filled milk powder", particularly in recent years. This is a milk substitute 
produced from drying skimmed milk powder with vegetable fat, mainly palm oil. Classified as a 
low-cost product, it is often exported to countries such as Madagascar where the majority of 
consumers have weak purchasing power. It is also used as a raw material for producing concentrated 
milk, which is sold 30% cheaper than concentrated milk made from cow's milk. Since consumers 
are not able to distinguish between these two types of concen trated milk, they logically tend to 
choose low -priced concentrated milk pro duced using fat -filled milk powders. This is arguably the 
cause of the increase in imports of concentrated milk to Madagascar, the main exporter of which is 
Malaysia, where the mult inational company, Olam, a producer of dairy products and fat -filled blends, 
is located. Thus, the development of trade in "fat -filled milk powder" at the global level is an 
unforeseen  circumstance that explains the increase in imports.  
II. INCREASE IN IMPORTS  
i Increase in imports in absolute terms  
YEAR  2020  2021  2022  
IMPORT S (index  base 100)  100 133 173 
Over the last three years, i mports of concentrated milk have increased markedly by more than 
73 index points . G/SG/N/6/MDG/ 9 • G/SG/N/7/MDG/ 9 • G/SG/N/11/MDG/ 9 
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  ii Relative change  in imports  
YEAR  2020  2021  2022  
IMPORT S / PRODUCTION ( index  base 100)  100 167 210 
Relative to domestic production, the increase in imports of concentrated milk rose by 110 points in 
2022 compared to the base year, that is more than double the volume of 2020.  
III. SERIOUS INJURY  
Data in relation to the petition concerning the injury suffered by the domestic industry  have revealed  
the following : 
i. Rate o f increase in im ports  
Concentrate d milk was imported into Madagascar in greatly increased quantities, both in absolute 
terms and relative to domestic production, during the period under analysis.  
ii. Share of domestic market taken by imports  
YEAR  2020  2021  2022  
DOMESTIC INDUSTRY MARKET SHARE (index  base 100)  100 62 50 
IMPORTS MARKET SHARE (index  base 100)  100 114 118 
Imports have practically cornered the local concentrate d milk market . The market share of local 
products is very small and gradually decreased during the period under analysis . Which caused 
serious injury to the industry . 
iii. Sales and inventory volumes  
YEAR  2020  2021  2022  
SALES  (index  base 100)  100 71 74 
INVENTORY  (index  base 100)  100 257 421 
The volume of sales declined during this period because of the massive increase in imports; down 
by 29 index points in 2021 and by 26 index points in 2022 compared to the base year.  
Inventory volumes rose steadily over the last three years. This rise is explained by the steep drop 
in sales volume, which fell at a faster rate than production volume. Thus the inventory volume 
increased by 157 index points in 2021 and by  321 index points  in 2022 , compared to the  base year. 
A situation that is  particularly detrimental to the domestic industry . 
iv. Domestic production  
YEAR  2020  2021  2022  
PRODUCTION ( index  base 100)  100 79 82 
The volume of production decreased by 21 index points in 2021, a decline that coincides with the 
increase in imports in the same year . G/SG/N/6/MDG/ 9 • G/SG/N/7/MDG/ 9 • G/SG/N/11/MDG/ 9 
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  v. Employment and productivity  
YEAR  2020  2021  2022  
EMPLOY EES (index  base 100)  100 100 100 
PRODUCTIVIT Y (index  base 100)  100 79 82 
Despite the alarming position  of the company, the number of empolyees remained the same during 
the period under analysis . Productivity thus declined following the rate of change in the volume of 
production.  
vi. Production capacity utilization  
YEAR   2020  2021  2022  
PRODUCTION CAPACI TY (index  base 100)  100 100 100 
UTILIZATION RATE (index  base 100)  100 79 82 
The production capacity utilization rate recorded for 2020 -2022 follows a downward trend. Compared 
with the base year, this utilization rate fell during the period under analysis.  
vii. Profit and loss  
YEAR  2020  2021  2022  
PROFIT AND LOSS  (index  base 100)  100 77 47 
Profits fell steadily due to the continued decline in sales. They fell by 23 index points in 2021 and 
53 index points in 2022 compared to the base year.  
IV. CAUSAL LINK  
In order to ascertain the existence of a causal link between the increased imports and the serious 
injury, and to make sure that  this injury is not caused by factors other  than the increased imports, 
the ANMCC analysed the effects of the following factors:  
i. Effect  of the increase in imports  
The analysis of data concerning imports of concentrated milk into Madagascar highlighted that 
imports have continued to increase year -on-year. This increase has caused serious injury to the 
domestic industry, part icularly in terms of profitability, production, sales  and production capacity 
utilization.  It is important to emphasize the temporary coincidence between the increase  in imports 
and the impairment of domestic  industry indicators.  
ii. Effect of other factors  
1. Contraction in demand   
YEAR  2020  2021  2022  
DOMESTIC DEMAND (index  base 100)  100 117 148 
Although local demand increased by 48 index points over the course of the period under analysis, 
the local producer did not take advantage of this increase because its sales volume continued to 
shrink. As a result, the injury suffered by the domestic indus try is not attributable to the contraction 
in demand, but above all to the increased imports.  
2. Domestic c ompetition  
As the petitioner is the sole producer of concentrated milk in Madagascar, competition with other 
domestic producers does not exist. Domesti c competition is thus excluded from the causes of the 
serious injury suffered by the industry.  G/SG/N/6/MDG/ 9 • G/SG/N/7/MDG/ 9 • G/SG/N/11/MDG/ 9 
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  3. Technological development  
According to the verification procedure carried out by the Authority, the industry's production unit 
is efficient and follows the same production line rules for the product under consideration. 
Consequently, lagging behind in terms of technology cannot be considered a source of the injury 
suffered by the industry.  
CONCLUSION  
On the basis of the foregoing, the domestic industry suffered in jury, for several years, caused by 
imports of concentrated milk in such increased quantities that the increase has caused a significant 
overall impairment in the position of the domestic industry.  
Consequently, other factors  cannot be the main cause of t he injury suffered by the domestic 
industry.  
V. OFFER OF CONSULTATIONS UNDER ARTICLE 12.4  
In accordance with Article 12.4 of the Agreement on Safeguards, Madagascar is prepared to hold 
consultations on the provisional safeguard measure with those Members having a substantial interest 
as exporters of the product concerned.  
VI. FURTHER INFORMATION  
Any requests for further i nformation and correspondence relating to this investigation must be 
addressed to : 
Monsi eur Le Directeur Général de l'ANMCC  
Enceinte Ex -Conquête Antanimena , Antananarivo 101 - Madagascar  
Email: dg@anmcc.mg  / dg.anmcc@gmail.com  
Website: www.anmcc.mg  
C. NOTIFICATION PURSUANT TO  ARTICLE 9, FOOTNOTE 2 OF THE AGREEMENT ON 
SAFEGUARDS  
Below is the list of developing countries excluded from the provisional safeguard measure because 
their exports represent less than 3 % of Madagascar's total imports of concentrated milk  and 
collectively account for not more than 9 %. (Article 9.1 of the Agreement on Safeguards)  
Afghanistan ; Albania ; Angola ; Antigua and Barbuda ; Argentina ; Armenia ; Bahrain ; Bangladesh 
Barbados ; Belize ; Benin ; Bolivia , Plurinational State  of; Botswana ; Brazil ; Brunei  Darussalam ; 
Burkina  Faso; Burundi ; Cabo Verde ; Cambodia ; Cameroon ; Central African Republic ; Chad; Chile; 
Colombia ; Congo ; Costa Rica ; Côte d'Ivoire ; Cuba; Democ ratic Republic of the Congo; Djibouti ; 
Dominica ; Dominican Republic ; Ecuador ; Egypt ; El Salvador ; Eswatini ; Fiji; Gabon ; Gambia ; 
Georgia ; Ghana ; Grenada ; Guatemala ; Guinea ; Guinea -Bissau ; Guyana ; Haiti; Honduras ; Israel ; 
Jamaica ; Jordan ; Kazakhstan ; Kenya ; Kuwait ; Kyrgyz Re public; Lao People's Democratic  Republic; 
Lesotho ; Liberia; Malawi; Maldives ; Mali; Mauritania ; Mauritius ; Mexico ; Moldova ; Mongolia ; 
Montenegro ; Morocco ; Mozambique ; Myanmar ; Namibia ; Nepal ; Nicaragua ; Niger ; Oman ; Pakistan; 
Panama ; Papua New Guinea ; Paraguay ; Peru; Philippines ; Qatar ; Rwanda ; Saint Kitts and Nevis ; 
Saint Lucia ; Saint Vincent and the Grenadines ; Samoa ; Saudi Arabia ; Senegal ; Seychelles ; 
Sierra  Leone ; Solomon Islands ; South Africa ; Sri Lanka ; Suriname ; Tajikistan ; Tanzania ; Thailand ; 
The former Yugoslav Republic of Macedonia; Togo; Tonga ; Trinidad  and Tobago ; Tunisia ; Uganda ; 
Ukraine ; United Arab Emirates ; Uruguay ; Vanuatu ; Venezuela ; Yemen ; Zambia ; Zimbabwe.  
 
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