G/SG/N/8/CHL/7  
G/SG/N/10/CHL/9  
G/SG/N/11/CHL/10  
12 April 2016  
(16-2036)  Page: 1/6  
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 PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2, 
OF THE AGREEMENT ON SAFEGUARDS 
CHILE 
(Steel Wire Rod) 
The following communication, dated 8 April 2016, is being circulated at the request of the 
delegation of Chile. 
 
_______________ 
 
 
The Republic of Chile submits herewi th to the Committee on Safeguards: 
a. a notification under Article 12.1(b) of the Agreement on Safeguards of a finding of a 
serious injury or threat thereof caused by increased imports of steel wire rod; 
b. a notification pursuant to Article 12.1(c) of the Agreement on Safeguards of a 
recommendation on the application of a safeguard measure to imports of steel wire rod. 
c. a notification pursuant to Article 9, footnote 2, of the Agreement on Safeguards, of the 
decision not to apply the measure to products originating in developing countries. 
(1) Increased imports of steel wire rod 
Imports of steel wire rod in the period Ja nuary-July 2015 amounted to 36,036.3 tonnes, an 
increase of 9.7% compared with the same period in 2014. This rise was preceded by a decline of 
40.3% in 2014/2013 and increases of 114.1% in 2013/2012 and 246.1% in 2012/2011. 
The ratio of imports to production grew by 466. 2% between 2011 and 2014, and by 22.8% in the 
period January-July 2015 compared with the same period in 2014. In 2014, the ratio fell by 48.9% 
in relation to 2013, but had risen in 2013 and 2012 by 203.0% and 265.8% respectively. 
Table 1: Imports in tonnes 
 
 Imports (tonnes) 
2011 13,254.5 
2012 45,872.9 
2013 98,230.5 
2014 58,656.6 
Jan-Jul 2014 36,036.3 
Jan-Jul 2015 39,535.8 G/SG/N/8/CHL/7 • G/SG/N/10/CHL/9 • G/SG/N/11/CHL/10 
- 2 - 
  Table 2: Annual rate of variation in the ratio imports/production1 
 
 Variation imports/production 
Var. % 12/11 265.8% 
Var. % 13/12 203.0% 
Var. % 14/13 -48.9% 
Var. % Jan-Jul 15/14 22.8% 
 
(2) Unforeseen developments 
The unforeseen developments that explain the sudden increase in imports are as follows: 
i. the current mismatch between the global supply of and demand for steel, which is 
largely due to a greater-than-expected slowdown in the Chinese economy in 2015; 
ii. the measures recently imposed on imports of Chinese steel wire rods in other 
markets, which has diverted trade towards countries that have not adopted protection measures, such as Chile; and, 
iii. the application of anti-distortion measures that restrict exports of Chinese rebar 
which share installed capacity with steel production, thus affecting the global supply of wire rod. 
(3) Evidence of serious injury or threat  thereof caused by increased imports 
Following an evaluation of the overall position of the Domestic Industry (DI), in light of the 
relevant factors outlined below, it has been concluded that serious injury exists and that the 
increased imports of the product in question continue to represent a threat of serious injury for the 
DI. Such a threat stems from the risk that the enterprise manufacturing the product concerned may have to close if it fails to achieve the minimum technical levels of utilization required in order to operate. 
 
Domestic prices  
During the period January-July 2015, the average pric e of domestic wire rod in Chile fell by 3.9% 
in pesos and 12.2% in dollars, compared with the average prices recorded in 2014. In 2014, the average price increased by 4.2% in pesos and fell by 9.9% in dollars compared with 2013, while in 
2013 average prices fell by 9.7% and 10.8%, in pesos and dollars, respectively, in relation 
to 2012.  Table 3: Variations in domestic prices 
 
 Domestic prices 
 Pesos US$ 
Var. % 12/11 -4.4% -5.0% 
Var. % 13/12 -9.7% -10.8% 
Var. % 14/13 4.2% -9.9% 
Var. % Jan-Jul 15/14 -3.9% -12.2% 
 
Share of imports and production in apparent consumption  
In 2012, the share of imports in apparent consumption rose by 197.9% in relation to 2011, while 
in 2013 it rose by 120.5% in relation to the prev ious year. This growth was characterized mainly 
by an increase in imports, since production decreased during these periods. In 2014, the share 
of imports in apparent consumption fell by 30.2% compared with 2013. In the period 
January-July 2015, the share of imports in apparent consumption grew by 4.2% in relation to the same period in 2014.  
                                               
1 Data on production is confidential and ther efore the annual rate of variation in the ratio 
imports/production is shown. G/SG/N/8/CHL/7 • G/SG/N/10/CHL/9 • G/SG/N/11/CHL/10 
- 3 - 
  Opposing trends have been observed in the shar e of production in apparent consumption, which 
fell by 18.6% and 27.2% in 2012/2011 and 2013/2012, respectively, and which then increased at an annual rate of 36.6% in 2014. In the period January-July 2015, the share declined by 15.1% 
compared with the same period in 2014. 
Table 4: Variation in the ratio imports/apparent consumption 
 Variation imports/ 
apparent consumption 
Var. % 12/11 197.9% 
Var. % 13/12 120.5% 
Var. % 14/13 -30.2% 
Var. % Jan-Jul 15/14 4.2% 
 
Table 5: Variation in the ratio production2 /apparent consumption 
 Variation production/ 
apparent consumption 
Var. % 12/11 -18.6% 
Var. % 13/12 -27.2% 
Var. % 14/13 36.6% 
Var. % Jan-Jul 15/14 -15.1% 
 
Production 
Production in 2012 and 2013 fell at an annual rate of 5.4% and 29.3%, respectively. In 2014, 
production increased by 16.9% compared with 2013, but did not return to the levels recorded in 
previous years. In the period January-July 2015, production decreased by 10.7% compared with 
the same period in 2014. 
Table 6: Production index3 
 
 Production index 
2011 100.0 
2012 94.6 
2013 66.9 
2014 78.2 
Jan-Jul 2014 46.0 
Jan-Jul 2015 41.1 
Domestic sales 
Domestic sales shows trends that are very similar to those described in the section on production. 
In 2012 and 2013, domestic sales declined by 3.5%  and 35.8%, respectively, but grew by 18.4% 
in 2014. In the period January-July 2015, they dropped by 2.8% compared with the same period in 2014. 
Table 7: Domestic sales index
4 
 Domestic sales index 
2011 100.0 
2012 96.5 
2013 62.0 
2014 73.4 
Jan-Jul 2014 44.6 
Jan-Jul 2015 43.3 
                                               
2 Based on production estimated by CAP (Pacif ic Steel Company) for 2011 and 2012, and for 2013 
onwards, on production reported by CA P and Gerdau (sole producers in Chile). 
3 2011 and 2012: estimated by CAP; 2013 onwards: using production reported by CAP and Gerdau (sole 
producers in Chile). 
4 2011 and 2012: estimated by CAP; 2013 onwards: using sales reported by CAP and Gerdau (sole 
producers in Chile). G/SG/N/8/CHL/7 • G/SG/N/10/CHL/9 • G/SG/N/11/CHL/10 
- 4 - 
  Utilization of installed capacity 
 In the period January-July 2015, the utilization of installed capacity in Chile for domestic wire rod decreased by 6.8%, compared with 2014. In 2014, it increased by 20.3% compared with 2013, 
and fell in 2013 and 2012 at an annual rate of 30.1% and 6.2%, respectively. 
 Table 8: Variation in the utilization of installed capacity 
 
 Variation utilization 
installed capacity 
Var. % 12/11 -6.2% 
Var. % 13/12 -30.1% 
Var. % 14/13 20.3% 
Var. % Jan-Jul 15/14 -6.8% 
 
Financial losses 
 
The profit margin for CAP Acero was negative for the period 2011-July 2015. Although it improved 
from 2013 onwards, it has remained at levels similar to those reached in 2011. Gerdau, however, 
recorded positive yet decreasing margins for the period 2013-August 2015. 
 Employment 
 
In 2012 and 2013, employment increased by 2.4%  and 3.5%, respectively. In 2014, the trend 
changed and employment fell by 13.8% compar ed with 2013. This trend was confirmed in 
mid-2015 when employment dropped by 2.8% compared with 2014. 
 
Table 9: CAP employment index for steel wire rod 
 
 CAP employment index for 
wire rod 
2011 100.0 
2012 102.4 
2013 106.0 
2014 91.4 
2015 (until June) 88.8 
 
Productivity 
 According to the available data, productivity per worker fell by 8.4% in 2012, and then by 32.4% 
in 2013. In 2014, it improved by 39.3%, but decreased by 2.7% in mid-2015, compared 
with 2014.  
Table 10: CAP index of productivity per worker employed in wire rod production 
 
 CAP index of productivity per worker 
employed in wire rod production 
2011 100.0 
2012 91.6 
2013 61.9 
2014 86.2 
Jan-Jul 2015* 83.9 
* Based on the assumption that the number of workers employed in July is the same as that in the period 
January-July. 
(4) Product subject to the prop osed final safeguard measure 
Steel wire rod, excluding imports of cold heading quality (CHQ) steel wire rod and alloy steel bars 
for construction. 
 G/SG/N/8/CHL/7 • G/SG/N/10/CHL/9 • G/SG/N/11/CHL/10 
- 5 - 
  (5) Harmonized System numbers under which the product enters at least at a 6-digit 
HS level, and at a national level 
Chilean Harmonized System (SACH) numbers 7213.2000, 7213.9110, 7213.9120, 7213.9190, 
7227.1000, 7227.2000 and 7227.9000. 
 
(6) If the final measure replaces a provisio nal measure, or if a final measure is 
extended, a Member is encouraged to provide a written description of any part of 
the imported product that will no long er be subject to the measure and the 
Harmonized System numbers under which it enters at least at a 6-digit level, and 
at a subnational level (e.g. 8-digit, 9-di git or 10-digit level) if practicable. 
The final measure does not apply to imports of: 
i. CHQ steel wire rod that enters under all of the Harmonized System numbers 
included; or 
ii. alloy steel bars for construction that enter under Harmonized System number 
7227.9000. 
 
(7) Proposed measure 
The National Commission responsible for investigating distortions in the price of imported goods 
(CNDP) recommended the imposition of a final sa feguard measure of 38.9% on imports of steel 
wire rod classified under tariff subheadings 7213.2000, 7213.9110, 7213.9120, 7213.9190, 7227.1000, 7227.2000 and 7227.9000 of Chile's customs tariff. 
 
(8) Proposed date of introduction of the measure 
Under Article 26 of the Anti-Distortion Regulation s (Decree No. 1314), on the application of final 
measures, the CNDP will transmit, by means of a resolution, together with the background 
information and the conclusions of the investigation, its recommendation on the measure through the intermediary of the Ministry of Finance to th e President of the Republic, who shall rule on the 
proposed measure and formalize its application through a Ministry of Finance decree published in 
the Official Journal.  (9) Expected duration of the measure 
Under Article 26 of the Anti-Distortion Regulations (Decree No. 1314), the resolution, together 
with and the background information and conclusi ons of the investigation, to be transmitted 
through the intermediary of the Ministry of Financ e to the President of the Republic, must specify 
the duration of the final safeguard measure that is being recommended. 
The CNDP recommended that the proposed measure be established for a six-month period as from 
the date of its publication in the Official Journal. 
 
(10)  Offer to hold consultations under Article 12.3 
In accordance with Article 12.3 of the Agreement on Safeguards, Chile is prepared to hold 
consultations with those Members having a substantial interest as Chile's suppliers of the product 
concerned. 
 (11)  The major exporting Members of imports of  the product involved and Members to 
which the measure does not apply 
Imports of the product come mainly from China and Brazil. 
 
In the light of Chile's trade agreements with Mexico, Canada and Peru, the measure will not apply 
to these countries.  G/SG/N/8/CHL/7 • G/SG/N/10/CHL/9 • G/SG/N/11/CHL/10 
- 6 - 
  Developing countries are exempted from the safeguard measure 
 Imports from developing country Members will not be subject to the final safeguard measure as long as each Member's imports do not exceed 3% of total imports into Chile and the share of the 
Members with less than a 3% import share do not collectively account for more than 9% of total 
imports into Chile.  
 
Correspondence intended for the competent au thority should be sent to the Technical 
Secretariat of the National Commission responsible for investigating the existence of distortions in the price of imported goods (CNDP), at the following address: 
 
Morandé 115, piso 1 Santiago - Chile 
Tel: (+56 2) 2670 2564 
 
__________