G/SG/N/8/MDG/8  
G/SG/N/10/MDG/8  
G/SG/N/11/MDG/8/Suppl.1  
 
10 March 2023  
(23-1812) Page: 1/5 
Committee on Safeguards  Original: French  
 
  
NOTIFICATION, UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON SAFEGUARDS,  
OF A FINDING OF SERIOUS INJURY OR THREAT THEREOF  
CAUSED BY INCREASED IMPORTS  
NOTIFICATION UNDER ARTICLE 12.1(C) OF THE AGREEMENT ON SAFEGUARDS  
ON TAKING A DECISION TO APPLY A SAFEGUARD MEASURE  
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2,  
OF THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
Paints  
The following communication, dated and received on 10 March 2023, is being circulated at the 
request of the delegation of Madag ascar.  
 
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In accordance with Articles 12.1(b) and 12.1(c) of the Agreement on Safeguards, Madagascar hereby 
notifies the Committee on Safeguards of a finding of serious injury or threat thereof caused by 
increased imports, and of the decision to apply a safeguard measure on imports of paints. 
Madagascar also wishes to notify the Committee, under Article 9, footnote 2, of the Agreement, of 
its decision not to apply the proposed safeguard measure to imports from developing countries.  
Pursuant to Article 12.3 of the Agreement on Safeguards, Madagascar is prepared to consult with 
those Members having a substantial interest as exporters of the product concerned.  
1  NOTIFICATION, UNDER ARTICLES 12.1(B) AND 12.1(C) OF THE AGREEMENT ON 
SAFEGUARDS,  OF A FINDING OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY 
INCREASED IMPORTS, AND OF THE DECISION TO APPLY A SAFEGUARD MEASURE  
1.1  Evidence of serious injury or threat thereof caused by increased imports  
A. INCREASE IN IMPORTS  
i. Unforeseen developments  
The massive  increase in paint imports is the result of unforeseen developments reflected in the 
following series of factors:  
On the one hand, the implementation of post -COVID -19 economic recovery policies has led to the 
very rapid resumption of exports from the main paint-exporting countries.  
On the other hand, there is a new trend towards using powder paints in developed countries owing 
to the benefits they offer in terms of durability, aesthetics, design and the environment. This change 
has boosted exports of liquid  paints to African countries, including Madagascar. Moreover, bans on G/SG/N/8/MDG/8 • G/SG/N/10/MDG/8 • G/SG/N/11/MDG/8/Suppl.1  
 
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  lead paint, which have been implemented in a number of countries owing to its toxicity, have led 
systematically to the export of lead paint to countries where it is not yet banned.  
ii. Absol ute change in imports  
Imports of paint to Madagascar have increased significantly in the period under consideration. They 
initially rose by 10 index points between 2018 and 2019, before a sharp and massive increase of 
around 15 index points compared to the  previous year was recorded in 2021. Finally, the upward 
trend in imports continued between January and July 2022, with an increase of 8 index points 
compared to the same period in 2021.  
iii. Increase in imports relative to domestic production  
During the period  under consideration, the volume of paints produced locally remained less than half 
of the volume imported. The increase in imports is much more significant in relative terms compared 
to domestic production as they grew by 26 index points in 2021 and 20 in dex points for the 
first seven months of 2022.  
B. SERIOUS INJURY  
The determination of serious injury to the domestic paints industry was based on all relevant factors 
of an objective and quantifiable nature having a bearing on the situation of that industry. On the 
basis of the data available to the Authority, an analysis was conducted of the serious injury suffered 
by the domestic industry.  
i. Rate of increase in imports  
Data from the investigation showed that the volume of paint imports increased between 2018 a nd 
2021. In general, there has been a sharp and significant rise in recent years, in particular between 
2020 and 2021, and between January and July 2022 compared to the same period in 2021, in both 
absolute and relative terms compared to domestic productio n. This situation has a negative impact 
on the performance indicators of the domestic industry.  
ii. Share of the domestic market taken by imports  
Imported paints have monopolized the domestic market during the period of analysis. Between 2020 
and 2021, the dom estic industry lost a considerable market share of 32 index points, while imports 
gained 14 index points. In the first seven months of 2022, local producers saw their share decline 
by 16 index points.  
iii. Domestic production  
Despite an increase of 10 index points in the volume of domestically produced paint in 2019 
compared to 2018, a continuous and ever worsening decline has been recorded since 2020. 
Production was down 2 index points in 2020 and 12 index points in 2021, mean ing that there was a 
decline of 12 index points between 2019 and 2021. Finally, the first seven months of 2022 saw a 
10-index -point drop compared to the same period in 2021.  
iv. Changes in sales levels  
Sales fell by 6 index points in 2020 compared to 2019. T hen in 2021, they decreased sharply by 
30 index points in a single year. For the period from January to July 2022, a decline of 14 index 
points was recorded compared to the same period in 2021.  
v. Production capacity utilization rate  
The domestic industry's production capacity was relatively stable over the investigation period, with 
a capacity utilization rate not exceeding 30%. The rate fell sharply by 10 index points in 2022.  G/SG/N/8/MDG/8 • G/SG/N/10/MDG/8 • G/SG/N/11/MDG/8/Suppl.1  
 
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  vi. Employment  
Despite the steady decline in production volume, the domestic industr y has tried to boost 
employment by increasing staffing levels. As a result, the workforce increased by 17 index points 
between 2018 and 2021. However, the 7 -index -point decrease in the number in the 
first seven  months of 2022 compared to the same period in  2021 indicates the difficulties of finding 
long-term solutions to the situation in the face of import pressures.  
vii. Productivity  
Productivity changes are in line with those seen in production volume. Indeed, between 2018 and 
2019, the domestic industry's pro ductivity increased slightly, as did domestic production. However, 
the drop in production since 2020 has led to a 19 -index -point decline in productivity between 2019 
and 2021. This situation prompted the domestic industry to review its workforce in 2022, w ith a 
decrease of 3 index points recorded for the first seven months of 2022 compared to the same period 
in 2021.  
viii. Profitability  
Profitability is the indicator that is most affected and has greatly suffered from increased imports 
throughout the period under review. This situation is a source of concern to the domestic industry 
as its profits decreased by 34 index points between 2018 and 2021, and continued to fall in 2022, 
with a reduction of 30 index points in the first seven months of the year.  
C. CAUSAL  LINK  
i. Effects of increased imports  
Increased imports have led to a general and significant deterioration in the economic conditions of 
the domestic paint industry in Madagascar, particularly in terms of production, sales, turnover, 
market share and product ivity, despite a slight decline in imports in 2020 as a result of the COVID -19 
pandemic. This deterioration resulted in a considerable decline in the estimated profitability, which 
fell to 34% in only four years, i.e. during the investigation period. As a result, the development of 
the domestic industry's activities has been severely inhibited by the imports , which have continually 
dominate d the domestic paint market in Madagascar. Since 2021, the market share of imports has 
exceeded 75%.  
ii. Other causal facto rs 
− Contraction in demand or changes in consumption patterns  
During the investigation period, national demand for paint was more or less stable, following an 
increase of 10 index points between 2018 and 2019 despite the COVID -19 context. Unlike imports, 
the domestic industry has been unable to take advantage of this stability in demand as it lost a 
significant part of its market share from one year to the next. It is therefore held that the injury to 
the domestic industry cannot be attributed to a contractio n in domestic market demand.  
 
− Competition among domestic producers  
Competition between domestic producers cannot be considered the cause of the injury to the 
domestic industry as the producers are located in different geographical areas and their capacity to 
cover the entire country is very limited owing to their economic difficulties. In addition, each of these 
producers tends to target different categories of consumers through their product ranges.  
− Technological developments  
The production processes and raw materials used for local and imported paints are identical. Apart 
from artisanal producers, local industries are using advanced technologies to produce high -quality 
paints identical to imported ones. In addition, they often  organize training to build the capacities of 
their workforce and to adapt continuously to the latest technologies. The factors relating to the G/SG/N/8/MDG/8 • G/SG/N/10/MDG/8 • G/SG/N/11/MDG/8/Suppl.1  
 
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  development of production -related technologies therefore cannot be a cause of the injury to the 
domestic industr y  
− Export performance  
As domestic producers only target the domestic market, their entire output is intended for local 
consumption. None of the paint producers export their product. The serious injury to the domestic 
industry therefore cannot be the result  of poor export performance.  
− Product quality  
The quality of domestically produced paints cannot be considered a factor in the injury to the 
domestic industry because of the highly diversified range and quality of its products, which are suited 
to all categ ories of consumers in Madagascar and all kinds of media, such as car paints, building 
paints, industrial paints and so on.  
1.2  Precise description of the product involved  
Oil and water paints under Madagasca r customs tariff codes 3208 and 3209.  
1.3  Precise descrip tion of the proposed measure  
The definitive safeguard measure will take the form of a tariff rate quota of 3,000 tonnes, in excess 
of which an additional annual fixed duty of 18% must be paid.  
1.4   Proposed date of introduction of the measure  
The definitive sa feguard measure will enter into force on the date of publication of the related public 
notice.  
1.5  Expected duration of the measure  
The duration of the definitive safeguard measure is four years. As the provisional safeguard measure 
was not applied, the durati on is counted from the entry into force of the definitive measure.  
1.6  Proposed date for the review (under Article 7.4)  
The review, under Article 7.4 of the Agreement on Safeguards, will be held not later than the 
mid-term of the definitive measure.  
1.7  Expected t imetable for progressive liberalization of the measure  
Period of application of 
safeguard measure  Quota (additional duty at a 
rate of 0%)  Rate of additional duty applied to 
out-of-quota imports  
March 2023 – February 2024  3,000 tonnes  
18% March 2024 – February 2025  3,250 tonnes  
March 2025 – February 2026  3,500 tonnes  
March 2026 – February 2027  3,750 tonnes  
1.8  Adjustment plan  
The domestic industry has submitted an adjustment plan, outlining the measures it plans to take to 
facilitate the adjustment of the domestic industry to the competitive conditions with the imports.  
1.9  Date of prior consultation with the Members having a substantial interest as 
exporters of goods  
In accordance with Article 12.3 of the WTO Agreement on Safeguards, Madagasc ar is prepared to 
hold consultations with Members having a substantial interest as exporters of the product concerned.  G/SG/N/8/MDG/8 • G/SG/N/10/MDG/8 • G/SG/N/11/MDG/8/Suppl.1  
 
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  Requests for consultations should be sent to the Director -General of the  National Authority for Trade 
Remedies  (ANMCC ) at the following e mail addresses: dg@anmcc.mg  and dg.anmcc@gmail.com  . 
2  NOTIFICATION UNDER ARTICLE  9, FOOTNOTE  2, OF THE AGREEMENT ON SAFEGUARDS 
OF NON -APPLICATION OF A SAFEGUARD MEASURE TO DEVELOPING COUNTRIES  
2.1  Description of the measure  
The definitive safeguard measure will take the form of a tariff rate quota of 3,000 tonn es, in excess 
of which an additional annual fixed duty of 18% must be paid.  
2.2  Products subject to the measure  
Oil and water paints under Madagascar customs tariff codes 3208 and 3209.  
2.3  Developing countries to which the measure is not applied under 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; Democratic Republic of the Congo; Djibouti; 
Dominica; Dominican Republic; Ecuador; El Salvador; Eswatini; Fiji; Gabon; Gambia; Georgia; 
Ghana; Gren ada; Guatemala; Guinea; Guinea -Bissau; Guyana; Haiti; Honduras; Indonesia; Israel; 
Jamaica; Jordan; Kazakhstan; Kenya; Kuwait; Kyrgyz Republic; Lao  People's  Democratic Republic; 
Lesotho; Liberia; Malawi; Malaysia; Maldives; Mali; Mauritania; Mauritius; Mex ico; 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; Sri Lanka; Suriname; Tajikistan; Tanzania; Thailand; 
The former  Yugoslav Republic of Macedonia; Togo; Tonga; Trinidad and Tobago; Uganda; Ukraine; 
United Arab Emirates; Uruguay; Vanua tu; Venezuela; Viet Nam; Yemen; Zambia; Zimbabwe.  
2.4  Further information  
Information on the decision to apply the definitive safeguard measure to the products concerned 
may be obtained from:  
Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex -Conquête Antanimena, Antananarivo 101 – Madagascar  
Tel.: +261 34 05  441 41  
Email:  dg.anmcc@gmail.com  / dg@anmcc.mg  
Website:  www.anmcc.mg  
 
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