G/SG/N/8/CRI/2  
G/SG/N/10/CRI/2  
G/SG/N/11/CRI/2  
9 July 2020 
(20-4736) Page: 1/5 
Committee on Safeguards  Original:  Spanish  
 
  
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON  
SAFEGUARDS  ON FINDING SERIOUS INJURY OR THREAT  
THEREOF  CAUSED BY INCREASED  IMPORTS  
 
NOTIFICATION UNDER ARTICLE 12.1(C) OF  
THE AGREEMENT  ON SAFEGUARDS  
 
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE  2 
OF THE AGREEMENT ON SAFEGUARDS  
COSTA RICA 
Refined white sugar  
The following communication , dated 8 July 2 020, is being circulated at the request of the 
delegation of  Costa Rica.  
 
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Pursuant to Articl e 12.1(b) and 12.1(c) and Article 9, footnote 2 of the Agreement on Safeguards, 
and in the light of the agreed format for notifications (G/SG/1/Rev.1), Costa Rica hereby submits 
to the Committee on Safeguards the following notification regarding the initia tion of an 
investigation procedure with a view to the application of a safeguard measure to imports of  "sugar 
in solid form, granulated, known as white sugar, for household and industrial consumption, 
including plantation, specialty and refined white sugars" (hereinafter : refined white sugar) , whose 
notification of initiation  of an investigation to the WTO is contained in reference document  
G/SG/N/6/CRI/5  of 9 July 2 019. 
 
1. Evidence , citing relevant data and the applicable period of investigation,  of serious 
injury or threat thereof caused by increased imports  
1.1 Determinat ion of threat of serious injury  
Having analysed all relevant factors of an objective and quantifiable nature relating to the 
domestic industry, the investigating authority concl uded that no serious injury had been caused to 
the domestic industry during the period under investigation, i.e. from 1  October  2015 to  
30 September 2 018 (three years).  
 
However, the investigating authority did determine the existence of a threat of serious injury . In 
reaching that determination, the authority evaluated all relevant factors of an objective and 
quantifiable nature having a bearing on the situation of producers of the product under 
investigation , in accordance  with Article  4.2(a) of the  Agreement on Safeguards . In addition, on 
the basis of the guidance provided by the panel in US - Lamb , the authority also evaluated the 
factors set forth in Article 3.7 of the Anti -Dumping Agreement and Article 15.7 of the 
Agreement  on Subsidies and Count ervailing Measures on the threat of material injury, as they 
were considered relevant to this safeguard investigation.  
 
The analysis of the evolution in economic variables for the domestic industry show ed a significant  
deterioration  in the general situatio n of domestic production, which threaten ed to cause imminent 
serious injury to the domestic industry  because , among other reasons, during the investigation G/SG/N/8/CRI/2 • G/SG/N/10/CRI/2 • G/SG/N/11/CRI/2  
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  period there was a clear decline  in the main economic indicators for the domestic industry, 
coincid ing precisely with the increase  in imports.  
 
The analysis show ed a drop in production and sales, in both volume and value, and this was most 
pronounced in the last year of the investigation period . The 5 percentage point decrease  in market  
share was consistent with the behaviour  of production  and sales referred to above.  
 
Inventories of domestic  refined white sugar decrease d throughout  the period , while imports 
increase d. However,  this behaviour can be explained when the volume of domestic sales of the 
product under investigation exceeds  domestic production . Figures show ed that sales in metric  
tonnes of refined white sugar outstripped  domestic production of this product  during the 
investigation period . Accordingly , together  with the increase in the volume  of imports, a drop in 
both sales and domestic production volumes could be seen but sales over the whole period were 
greater and so inventories tended to decrease.  
 
Also visible  was a drop in utilization of installed capacity of 4 percentage points  and in the level of 
employment in the domestic industry throughout the investigation period . The decrease in 
production, sales and workforce in the domestic industry was therefore consistent with a 7.7% 
drop in productivity in this sector  in the las t period, after which increases in employee productivity 
were recorded . In addition, domestic industry profits shrank by 89.3% in the last year of the 
investigation period.  
 
The price of domestic sugar, in accordance with the consumer price index calculate d by the 
National Statistics and Census  Institute1, recorded an average year -on-year increase  of 4.8% 
during the January 2 014-August 2 015 period . The average increase  for this indicator for the 
investigation period was 0.3%. 
 
According to the investigating authority , in the particular circumstances of the case under 
investigation, the continuation of imports at the levels observed during the investigation period 
may be sufficient for the threat of serious injury to become actual  serious injury . The greater the 
flow of imports, the smaller the domestic surpluses for sugar mills and producers, resulting in a 
further drop in revenue for sugar cane producers, who are impacted by 62.5% of this decrease in 
surpluses.  
 
With regard to a possible increas e in imports, it should be emphasized that Brazil is one of the 
leading  world sugar producers  and its sugar exports account for  over 44% of the global market , 
with more than two thirds of its production going for export . According to projections by the 
United  Nations Food and Agricultur e Organization (FAO) , foreign sugar sales from Brazil  could 
amount to  some 48% of total sugar exports worldwide . 
 
According to information from the Brazilian Sugar cane Industry Association  (UNICA) , total refined 
white sugar production by its members show ed a rising  trend throughout the investigation period . 
Furthermore , the growth rate of sugar inventories in Brazil  was above 36% and the freely available 
capacity of this export ing country  was above 50% during  the investigation period , according to 
UNICA information . 
 
Sugar production in Brazil stands at some 34 million  metric tonnes per year , which, according to 
domestic industry  data, represents more than 160 times the volume of total domestic production 
for the product under investigation . Total sugar exports from Brazil  (79% of production ) are 
around  128 times greater than domestic production . 
The international sugar price provided by UNICA  shows a downward  trend since September 2 016, 
with a 46% drop during the following two years . 
 
A significant  part of sugar production in Brazil is used to produce ethanol for fuel, which  implies a 
link between the international hydrocarbons price and the domestic ethanol and sugar price in 
Brazil . Hence, the lower the price of petroleum on international markets, the smaller the quantity 
of sugar cane that will be used for ethanol production , result ing in greater availability of sugar 
stocks , with its resulting  impact on prices.  
 
1 Code 0101080101 of the consumer price index basket. See the following link: 
https://www.inec.cr/economia/indice -de-precios -al-consumidor . G/SG/N/8/CRI/2 • G/SG/N/10/CRI/2 • G/SG/N/11/CRI/2  
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The strength of the Brazilian  sugar market  is clear, as is Brazil 's capacity as a sugar producer  and 
exporter . Together  with the inventory levels  of the sugar industry in Brazil and the FAO 
projections, this points to increased worldwide sugar production in the future and a greater share 
of exportable global supply  for Brazil . The impact  that the leading  sugar exporter can have on 
international prices and on the domestic sugar price in Costa Rica suggests that the quantity of 
refined  white sugar imported from Brazil will increase . It is clear that the increase recorded in 
imports during the investigation has had an adverse impact on the economic ind icators of the 
domestic industry and, if the increase persists , this would cause serious injury to the domestic 
industry . These constitute  sufficient  elements  needed to determine the existence of an imminent  
threat of serious injury to the domestic refined  white sugar industry.  
 
2. Information on whether there is an absolute increase in imports or an increase in 
imports relative to domestic production (see als o Article 12.1 for the context)  
2.1 Absolute increase in imports  
Imports of the product under investigation  display ed sustained growth throughout  the 
investigation period in terms of imported value , with 42.1% for 2015 -16 and 11.3 % for 
2016-17. Volume increase d by 6.8 % and 46.6 %, respectively . Imports of the product under 
investigation show ed a growth rate of 58.1% in monetary terms and 56.6 % in metric  tonnes from 
October 2 015 to September 2 018. In absolute terms the data also confirm ed the increase in 
imports for the investigation period.  
 
2.2 Increase in imports rel ative to domestic production  
The share of imports relati ve to domestic production rose from 7% in 2015-16 to 12% in 
2017-18, an increase of 5 percentage points . 
 
3. Precise description  of the product involved  
Sugar in solid form, granulated, known as white sugar, for household and industrial consumption, 
including plantation, specialty and refined white sugars, which , under  the Harmonized Commodity 
Description and Coding System , enter s Costa Rica under tariff subheading 1701.99.00.00.  
 
4. Precise description of the proposed measure (Harmonized System (HS) codes at  a 
6-digit level, and at a sub -national le vel - 8-digit - if practicable)  
Definitive safeguard measure consisting of an additional 34.27 % on the existing tariff level of 45 % 
of the import customs duty (DAI), bringing the total to 79.27 % on the CIF value of all imports of  
sugar in solid form, granulated, known as white sugar, for household and industrial consumption, 
including plantation, specialty and refined white sugars, of  whatever origin, imported into 
Costa  Rica under tariff subheading 1701.99.00.00.  
 
5. Proposed date  of introduction of the measure  
The measure will come into effect on the day following the expiry of the 30 calendar days accorded 
to WTO Member countries ha ving a substantial interest as exporters of the product concerned to 
hold prior consultations . These consultations will begin on the next working day following the last 
notification of the respective decision . 
 
6. Expected duration of the measure  
The measure will be applied for a period of three years in accordance with Article 7 of the  
Agreement on Safeguards and Article 32 of the Central American Regulations on Safeguard 
Measures, following the liberalization timetable set forth in point 7 below.  
 G/SG/N/8/CRI/2 • G/SG/N/10/CRI/2 • G/SG/N/11/CRI/2  
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  7. Expected timetable for progressive liberalization of the measure, since the 
expected duration of the measure is over one year  
In order to facilitate the adjustment of the domestic industry in accordance with Article  7.4 of  the 
Agreement on Safeguards, the  safeguard measure will be liberalized progressively and at regular 
intervals during the period of application, in accordance with the following timetable:  
 
Date Reduction  Tariff  
Entry into force   79.27% 
1st year following the date of entry into force  11.42% 67.85% 
2nd year following the date of entry into force  11.42% 56.42% 
3rd year following the date of entry into force  11.42% 45.42% 
 
8. Developing countries to which the measure is not applied under Article  9.1 of  the 
Agreement on Safeguards, and the import shares of these countrie s individually 
and collectively  
Under Article 9.1 of the Agreement on Safeguards, the definitive safeguard measure shall not be 
applied against products of the followi ng origins as long as the conditions set forth in that article 
persist : Paraguay and Ecuador, whose exports of refined white sugar to Costa Rica during the 
period 1 October 2 015-30 September 2 018 did not exceed  3% of Costa Rica's total imports and 
which collectively accounted for not more than 9 % of total imports.  
 
De minimis  volume  
Imports of refined white sugar  
(Tariff subheading 1701.99.00.00 ) 
 
Country /Year 2015-16 2016-17 2017-18 2015-18 period  
Quantity  
(MT) Quantity  
(MT) Quantity  
(MT) Total  Share  (%) 
Paraguay  444.66 0.00 0.00 444.66 1.61% 
Ecuador  0.01 0.00 0.00 0.02 0.00% 
Total  444.67 0.00 0.00 444.68 1.61%  
 
9. Since this notification relates to the application of a safeguard measure, the 
following information is provided:  
(i) The major exporting Members of imports of the product involved:  
The table below shows the main countries of provenance of the imports of the product under 
investigation during the investigation period:  
 
Members with the greatest share of the total imports of refined white sugar  
2015-18 period  
 
Country  Share  % 
Brazil 50.81% 
Canad a 44.42% 
Others 4.77% 
Total  100.00%  
 
(ii) Exporting Members to which the measure does not apply for any reason 
other than the application of Article 1.9 and the reasons for non -application 
of the measure:  
The following Members are exempted from the application of the measure provided that  it is thus 
stipulated in the free trade agreements in force with th ese trading partners and the corresponding 
conditions established in each free trade agreement are fulfilled : Chile, Colombia, Guatemala, 
Mexico, Panam a and the United States . 
 G/SG/N/8/CRI/2 • G/SG/N/10/CRI/2 • G/SG/N/11/CRI/2  
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  10. Reference, in electronic form, to (the) publicly available document(s) containing 
the relevant decision(s) made by the competent authority  
The following link provides access to Resolu tion No. D M-058-2020-MEIC of the Ministry of the 
Economy, Industry and Trade (MEIC) on the request for application of a definitive  safeguard  
measure on imports  of "sugar in solid form, granulated, known as white sugar, for household and 
industrial consumption, including plantation, specialty and refined white sugars",  which, under the 
Harmonized Commodity Description and Coding System, enter s Costa Rica under tariff subheading 
1701.99.00.00 ; and also to Final Determination  Technical Report No. D DC-INF-001-2020, both 
from MEIC Trade Defence Directorate File No. 001-2019:  
 
http://reventazon.meic.go.cr/informacion/pcd/058 -20.pdf . 
 
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