G/SG/N/7/EGY/11  
G/SG/N/11/EGY/11  
 
12 April 201 9 
(19-2421) Page: 1/5 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.4 OF THE A GREEMENT  
ON SAFEGUARDS BEFORE  TAKING A PROVISIONA L  
SAFEGUARD MEASURE RE FERRED TO IN ARTICLE  6 
 
NOTIFICATION PURSUAN T TO ARTICLE 9, FOOT NOTE 2  
OF THE AGREEMENT ON SAFEGUARDS  
EGYPT 
(Semi-finished products of iron or non -alloy steel and Steel rebar (bars, rods and coils) for 
construction purposes ) 
The following communication, dated 1 1 April 201 9, is being circulated at the request of the 
Delegation of Egypt.  
_______________  
 
 
The Arab Republic of Egypt hereby wishes  to notify the Committee on Safeguards pursuant to 
Article  12.4 of the Agreement on Safeguards, before taking provisional safeguard measures on 
imports of Semi -finished products of iron or non -alloy steel and Steel rebar (bars, rods and coils) 
for construc tion purposes; and a notification pursuant to Article 9, footnote 2 of the Agreement on 
Safeguards, on taking a decision not to apply the measure to products originating in developing 
countries.  
 
A. NOTIFICATION UNDER A RTICLE 12.4 BEFORE T AKING A PROVISION AL SAFEGUARD 
MEASURE  
 
1. Specify the product subject to the proposed provisional safeguard measure  
 
The products subject to the proposed safeguard measure are Semi -finished products of iron or non -
alloy steel and Steel rebar (bars, rods and coils) for cons truction purposes (the products concerned), 
The products are classified under the following H.S. tariff item numbers within the Egyptian Customs 
Tariff Schedule.  (72 13, 72 14 and 7207). The H.S. tariff item numbers are given for information 
purposes only.  
 
2. Specify the Proposed Provisional Safeguard Measure  
 
It is proposed to impose a provisional safeguard measure in the form of temporary additional duty 
as shown in the next table:  
 
 Product  Tariff Item  Provisional 
measures  
1 Semi -finished products of iron or non -alloy 
steel  7207  up to 15% of the 
CIF value  
2 Bars, coils and rods of iron or non -alloy 
steel, not further worked than forged, hot -
rolled, hot -drawn or hot -extruded, but 
including those twisted after rolling.   
 7213 - 7214  25% of the CIF 
value  
 G/SG/N/7/EGY/11 • G/SG/N/11/EGY/11  
 
- 2 - 
 
  3. Specify the proposed date of introduction of the proposed Provisional Safeguard 
Measure  
 
The provisional safeguard measure is proposed to enter into force on  15/4/2019.  
 
4. Specify the Expected Duration of the Provisional Safegua rd Measure  
 
The proposed provisional safeguard measure will be applied for 180 days.  
 
5. Provide the Basis for:  
 
5.1 Making a preliminary determination, as provided for in Article 6 of the Agreement 
on Safeguards that increased imports have caused or are threatening to cause 
serious injury; and  
 
Unforeseen Developments  
 
The investigating authority has preliminary determined that there have been sudden, recent, 
significant and sharp increases in imports of the concerned products in both absolute terms and 
relative to the domestic production. This increase in imports of the  concerned products has been the 
result of unforeseen developments that finds its source in a number of facts establishing and 
aggravating imbalances in international trade of the products concerned.  
 
First of all, the global steelmaking capacity has more  than doubled since 2000. Consequently, there 
has been over the last years a major gap between global capacity and production and between 
production and demand, generating an unprecedented overcapacity in the global steel market which 
has persisted despite  the measures adopted to narrow it.  
 
Secondly, the above effect has been exacerbated by trade -restrictive practices in third country 
markets. Indeed, recently, in reaction to the above -mentioned oversupply of steel and the 
market -distorting practices, seve ral countries have begun to make greater use of trade policy and 
trade defence instruments in the steel sector with a view to protecting their domestic producers.  
 
Increase in Imports  
 
 Tons  
 
The data  currently available  indicates that imports of the products concerned increased in absolute 
terms by 31% during the second half of 2018 when compared to  the first half of 2017.  
 
Furthermore, the volume of imports increased in relative terms to the domestic production by 17 % 
during the  second half of 2018  when compared to the first half of 2017 . 
 
Serious injury  
 
In order to make a preliminary determination of serious injury to the domestic industry producing 
the like or directly competitive product, an evaluation of relevant factors on an objective and 
quantifiable basis having a bearing on its situation h as been undertaken.  
  First half 
of 2017  Second half 
of 2017  First half of 
2018  Second  
half of 
2018  
Imports Volume /Ton 696176  607906  894043  908733  
Index % 100 87 128 131 
Index imports volume/domestic 
production  % 100 73 113 117 G/SG/N /7/EGY/11 • G/SG/N/11/EGY/11  
 
- 3 - 
 
  (1) Domestic Sales  
 
 First half 
of 2017  Second half 
of 2017  First half 
of 2018  Second half 
of 2018  
Index of Domestic Sales  100 128 112 98 
 
The domestic industry's sales were increased by 28 % and 12% during the second half of 2017 and 
the first half of 2018 when compared to  the first half of 2017. And then has decreased in the second 
half of 2018 by 2% when compared to the first half of 2017.  
 
(2) Market Share  
 
 First half 
of 2017  Second half  
of 2017  First half 
of 2018  Second half 
of 2018  
Change in Market Share of the Domestic 
Industry%  100 107 94 90 
Change in Market Share of Imports%  100 73 108 118 
 
The domestic industry's market share was increased by 7 % in the second half of 2017 comparing 
with the first half of 2017, and then decreased by 6% during the first half of 2018 comparing with 
the first half of 2017, then It decreased sharply in the second half of 2018 by 10 % when compared 
to the first half of 2017.  
 
The market share of imports was decreased by 27 % in the second half of 2017 comparing with the 
first half of 2017, and then increased by 8% during the first half of 2018 comparing with the first 
half of 2017, and then It increased in the second hal f of 2018 by 18 % when compared to the first 
half of 2017.  
 
(3) Production and Capacity Utilization  
 
 First half of 
2017  Second half 
of 2017  First half of 
2018  Second half 
of 2018  
Change in Production%  100 123 116 116 
Change in Capacity Utilization%  100 123 116 116 
 
The domestic industry's production was increased by 23 % in the second half of 2017 comparing with 
the first half of 2017, and by 16 % during the first half of 2018. It increased in the second half 
of 2018 by 16 % when compared to the first half of 2017. This increase has accompanied by sharp 
increase of inventory as a result of decrease of sales.  
 
The capacity utilization was increased by 23 % in the second half of 2017 comparing with the first 
half of 2017, and b y 16% during the first half of 2018. It decreased in the second half of 2018 
by 16% when compared to the first half of 2017.  
 
(4) Workers and Worker's Productivity  
 
 First half of 
2017  Second half 
of 2017  First half of 
2018  Second half 
of 2018  
Change in Workers  % 100 115 111 114 
Change in Productivity  % 100 109 108 94 
 
The number of Workers was increased by 15 % in the second half of 2017, and by 11 % during the 
first half of 2018. It increased in the second half of 2018 by 14 % when compared to the first half 
of 2017.  
 
The Workers ' productivity was increased by 9 % in the second half of 2017, and by 8 % during the 
first half of 2018 comparing with the first half of 2017. It decreased in the second half of 2018 by 
6% when compared to the first half of 2017.  
 G/SG/N/7/EGY/11 • G/SG/N/11/EGY/11  
 
- 4 - 
 
  (5) Profit and Loss  
 
 First half of 
2017  Second half 
of 2017  First half of 
2018  Second half 
of 2018  
Change in profit & Losses%  100 (44) (66) 219 
 
The domestic industry achieves loss in the first half of 2017 and this loss had  changed to profit in 
the second half of 2017 and in the first half of 2018 before achieving loss second half of 2018. the 
loss was increased by 119 % in the second half of 2018 comparing with the first half of 2017.  
 
(6) Inventory  
 
 First half of 
2017  Second half 
of 2017  First half of 
2018  Second half 
of 2018  
Change in inventory%  100 119 88 502 
 
The quantity of inventory increased by 19 % in the second half of 2017 comparing with the first half 
of 2017 and decreased by 12 % during the first half of 2018. It increased sharply in the second half 
of 2018 by 402% when compared to the first half of 2017.  
 
CONCLUSION  
 
There has been a significant and sudden increase in the volume of imports of the products concerned 
in both absolu te and relative terms to the domestic production. the volume of imports has increased 
in the second half of 2018 significantly when compared to the first half of 2017.  
 
The sharp and sudden increase of imports caused serious injury to the domestic industry . The sales 
and market share of the domestic industry decreased sharply while the market share of imports 
increased significantly. Consequently, the quantity of inventory increased sharply, and the domestic 
industry achieved losses in the second half of 2018. 
 
Causation  
 
For the foregoing reasons, the preliminary conclusion is that there is a causal link between the 
significant increase in imports and the serious injury suffered by the domestic industry.  
 
Other Known Factors  
 
To ensure that the serious injury is not attributable to factors other than the increase in imports, 
the investigating authority has carried out a preliminary analysis to determine whether the other 
factors may have contributed to the serious injury suffer ed by the Egyptian producers. These factors 
include contraction in demand, change of patterns of consumption, technology progress, local 
competition, exports, and changes in exchange rates. The investigating authority found that these 
factors are not the c ause of serious injury suffered by the Egyptian industry.   
 
5.2 Determining the Existence of Critical Circumstances Where Delay Would Cause 
Damage Which Would Be Difficult to Repair  
 
A preliminary determination has been made that critical circumstances ex ist in which delay would 
cause damage that would be difficult to repair.   
 
It is determined that critical circumstances exist, such that delay in imposing provisional safeguard 
measures would cause damage which would be difficult to repair. Such critical circumstances include 
the trade restrictive actions recently taken by several steel trading countries, which have created an 
imminent risk of diversion of steel imports into Egypt. A continued increase in imports would further 
impair the performance of the  domestic industry, which is already in a fragile position. In some 
cases, there is a risk that producers may be forced to cease production.  
 G/SG/N /7/EGY/11 • G/SG/N/11/EGY/11  
 
- 5 - 
 
  6. Offer of Consultations under Article 12.4  
 
Consistent with Article 12.4 of the Agreement on Safeguards, Egypt i s prepared to consult on the 
provisional safeguard measure with those members having a substantial interest as exporters of the 
subject products.  
 
B. NOTIFICATION UNDER A RTICLE 9, FOOTNOTE 2  UPON TAKING A DECIS ION NOT TO 
APPLY THE PROVISIONA L SAFEGUARD MEA SURE TO CERTAIN PROD UCTS ORIGINATING 
IN DEVELOPING COUNTR IES 
Developing Countries Exempted from the Safeguard Measure  
 
Imports from developing country Members shall not be subject to the proposed provisional safeguard 
measure as long as each Member's expor ts individually do not exceed 3% of total imports into Egypt. 
In addition, the share of the members with less than three % import share do not collectively account 
for more than 9% of total imports into Egypt.  
 
The address of the competent authority for cor respondence is:  
 
 Ministry of Trade and Industry  
 Trade Remedies Sector  
 Mr. Ibrahim El Seginy  
 El Maleya Towers – Tower No. 6 – 9th floor  
 Extension of Ramses St. – Naser City – Cairo 
 Tel: (202) 23422479  
 Fax: (202) 23420784  
 E-mail: itpd@tas.gov.eg  
 Website: www.tas.gov.eg  
 
__________