G/SG/N/7/MAR/2  
G/SG/N/8/MAR/3  
G/SG/N/11/MAR/2  
2 May 2013  
(13-2327)  Page: 1/8  
Committee on Safeguards  Original: French  
 
  NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON SAFEGUARDS 
BEFORE TAKING A PR OVISIONAL SAFEGUARD 
MEASURE REFERRED TO IN ARTICLE 6 
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT 
ON SAFEGUARDS ON FINDING A SERIOUS INJURY 
OR THREAT THEREOF CAUSED 
BY INCREASED IMPORTS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2, 
OF THE AGREEMENT ON SAFEGUARDS 
WIRE RODS AND REINFORCING BARS 
MOROCCO  
The following communication, dated 26 April 2013, is being circulated at the request of the 
delegation of Morocco.  
_______________ 
  Pursuant to Article 12.4 of the Agreement on Safe guards, Morocco hereby submits its notification 
before taking a provisional safeguard measure referred to in Article 6. 
 1. Background 
 
As stated in WTO document G/SG/N/6/MAR/7, dated 10 October 2012, a safeguards investigation on reinforcing bars and wire rods was initiated on 25 September 2012. The investigation was 
launched following the receipt by the Department  of Foreign Trade, hereinafter referred to 
as "DCE", on 17 August 2012, of a petition fi led by the Moroccan Iron and Steel Industry 
Association (ASM) on behalf of the domestic reinforcing bar and wire rod industry, for the application of safeguard measures on reinforcing bar and wire rod imports. 
 
2. Product subject to the propose d provisional safeguard measure 
 
The products subject to the provisional safeguard measure are wire rods measuring no more 
than 14 mm in diameter and reinforcing bars measuring between 5.5 and 40 mm in diameter.  
The products are imported under Morocco's Harmonized System customs nomenclature, 
namely: 7213.91.90.00 for wire rods and 7214.20.90.00; 7214.99.91.00 for reinforcing bars.  G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 2 - 
  3. Proposed provisional safeguard measure 
 It is proposed to impose a provisional safeguard measure in the form of an additional specific duty of 0.55MAD/kg, on imports in excess of the quota
1 of 37,000 tonnes for wire rods 
and 10,500 tonnes for reinforcing bars. 
 4. Date of introduction of the provisional safeguard measure 
 
The provisional safeguard measure will enter into force as from the date of publication, in Morocco's Official Journal, of the joint order imposing the measure.  
5. Expected duration of the provisional safeguard measure 
 The provisional safeguard measure will apply for 200 days as from the date of entry into force. 
 
6. The basis for:  
6.(i) Making a preliminary determination, as provided for in Article 6, that increased 
imports have caused or are thre atening to cause serious injury. 
 INCREASED IMPORTS 
 
Import trends in absolute and relative terms  
Wire rod imports rose by 196% and reinforcing bar imports by 117% between January 
and September 2012 compared with the same period in 2011.  
In relative terms, the index of the ratio of imports to domestic production of wire rods 
reached 164 in 2011, and then rose sharply to 424 in the first nine months of 2012. The index for reinforcing rods reached 220 in the first nine months of 2012.  
 
Table 1: Imports of wire rods and reinforcing bars
2 
 
Index: 2008 = 100; 2011 (Jan-Sep) = 100 
Imports  2008 2009 2010 2011 2011 
(Jan-Sep) 2012 
(Jan-Sep) 
Volume of imports (tonnes) Wire rods 42,780 93,155 55,947 72,846 35,887 106,360 
Reinforcing 
bars 24,682 12,103 16,863 32,973 25,615 55,490 
Imports/ 
Production (%) Wire rods 100 219 100 164 100 424 
Reinforcing 
bars 100 45 59 104 100 220 
Source: Data compiled from Fore ign Exchange Board statistics. 
 
The volume of imports in the first three quarters  of 2012 was the highest to be recorded during 
the investigation period, both for wire rods and reinforcing bars. In 2012, imports increased suddenly and significantly, marking a depart ure from the trend observed previously. 
 
In view of the trend in the Moroccan market duri ng the investigation period, the DCE notes that 
there is nothing to justify the surge in imports in 2012 and can therefore only conclude that the increase was unexpected and amounted to an abnormal rise in imports of wire rods 
and reinforcing bars. 
 
                                               
1 These quotas are based on the average annual impo rts in the three years prior to the finding of a 
massive increase in imports of wire rods and reinforc ing bars, which amount to 74,000 tonnes for wire rods 
and 21,000 tonnes for reinforcing bars. 
2 Headings 7213.91.90.00; 7214.20.90.00; 7214.99.91.00 of the Moroccan Harmonized System. G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 3 - 
  UNFORESEEN DEVELOPMENTS 
 In accordance with Article XIX:1(a) of the GATT 1994, the DCE examined the circumstances in which imports of reinforcing bars and wire rods occurred between January and September 2012, in 
order to determine whether the massive increase in imports of reinforcing bars and wire rods was 
the result of unforeseen developments.  
As mentioned above, the increase in imports was sudden, unexpected and recent. Although there 
have always been imports of reinforcing bars and wire rods in Morocco, their impact had always been negligible. However, during the first nine months of 2012, the volume of imports grew significantly and the impact on domestic production appears to have been considerable. 
 
The unforeseen developments reside in the un expected continuation and deepening of the 
economic and financial crisis and its repercussions for the building and real estate sector 
in southern Europe. 
 The domestic industry for reinforcing bars and wire rods could not have forseen that the negative 
effects of the crisis that hit the economies of southern European countries would persist and 
continue to intensify several years after start of the crisis. The WTO Appellate Body rightly noted that the unforeseen developments may also stem  from previous well-known foreseeable facts.
3 
In this particular case, the DCE considers that it was not the crisis that caused the abnormal 
increase in imports, but rather its continuation and deepening, which were completely unexpected. 
 In the same vein, the analysis of the trend in ex ports from Spain and Portugal to non-EC countries 
shows that these exports generally experienced stronger growth in 2012, marking a departure 
from previous trends.  
Table 2: Growth rate of exports from Spain and Portugal to non-EC countries 
 
 2008/2009 2009/2010 2010/2011 2011/2012 (Jan-Sep) 
Wire rods 70% 12.5% 9.1% 44.4% 
Reinforcing bars 19.3% -24.3% 25.2% 56.4% 
Source: Trade Map and Expo rt Helpdesk databases. 
 
The above table shows that in 2012, exports fr om Spain and Portugal rose sharply for all 
destinations including those unaffected by free trade agreements that provide for the removal of customs duties. According to the DCE, the dec line in domestic demand in southern European 
countries, caused by the continuation and worsen ing of the crisis, pushed companies to expand 
their markets by adopting more aggressive export policies. This would allow them to maintain 
a viable level of production, thereby at least avoiding the closure of production lines.  
In conclusion, the DCE has made a preliminary determination that imports of wire rods and 
reinforcing bars experienced abnormally high growth in 2012 following unforeseen developments. 
 
SERIOUS INJURY OR THREAT THEREOF 
 Pursuant to the relevant provisions of the Agreement on Safeguards, in particular Articles 2.1 and 4.1(a), and as part of an investigation conducted among the different parties involved, 
the DCE analysed the development of the following factors: 
 
                                               
3 Appellate Body Report in US – Steel Safeguards , WT/DS248/AB/R, adopted on 10 November 2003, 
paragraph 10.84. G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 4 - 
   
Table 3: Overview of indicators to eval uate the injury caused by imports of 
wire rods and reinforcing bars 
 
 Index: 2008 = 100; 2001 (Jan-Sep) = 100 
Indicators 2008 2009 2010 2011 2011 
(Jan-Sep) 2012  
(Jan-Sep) 
Volume of imports 
(tonnes) Wire rods 42,780 93,155 55,947 72,846 35,887 106,360 
Reinforcing 
bars 24,682 12,103 16,863 32,973 25,615 55,490 
Imports/ 
Production (%)  Wire rods 100 219 100 164 100 424 
Reinforcing 
bars 100 45 59 104 100 220 
Market share of 
imports (%) Wire rods 100 172 104 139 100 227 
Reinforcing 
bars 100 42 62 111 100 219 
Sales (tonnes) Wire rods 100 105 135 113 100 64 
Reinforcing 
bars 100 116 111 119 100 99 
Sales (millions DH) Wire rods 100 67 88 90 100 61  
Reinforcing 
bars 100 78 75 96 100 97 
Market share 
of domestic industry (%) Wire rods 100 82.96 107.46 92.25 100 49.23 
Reinforcing 
bars 100 99.61 99.96 98.17 100 99.40 
Production (tonnes) Wire rods 100 99 130 104 100 70 
Reinforcing 
bars 100 119 115 128 100 99 
Productivity (tonnes/person) 100 96 76 79 100 104 
Employment 100 122 154 159 100 92 
Number of hours worked 100 123 163 167 100 92 
Productivity (tonnes/hour) 100 94 71 74 100 104 
Production capacity 
(tonnes)  Wire rods 100 304 350 296 100 100 
Reinforcing 
bars 100 149 148 164 100 100 
Rate of capacity 
utilization (%)  Wire rods 100 32.73 37.19 35.01 100 70.09 
Reinforcing 
bars 100 79.63 77.84 78.38 100 98.75 
Final inventories 
(tonnes)  Wire rods 100 64 92 74 100 123 
Reinforcing 
bars 100 129 172 200 100 116 
Production costs 
(DH/tonne)  Wire rods 100 69 80 90 100 103 
Reinforcing 
bars 100 69 81 90 100 103 
Ex‑factory price 
(DH/tonne)  Wire rods 100 64 65 80 100 95 
Reinforcing 
bars 100 67 67 80 100 98 
Profit (thousand DH) Wire rods 100 32 -4 24 100 -4 
Reinforcing 
bars 100 39 -8 22 100 -84 
Profitability (%) Wire rods 100 25 -3 27 100 -7 
Reinforcing 
bars 100 50 -11 23 100 -87 
Source: Data compiled from Foreign Exchange Board statis tics and results of a survey  for domestic producers. 
 
(1) Rate and amount of the increase in imports: Imports of wire rods and reinforcing bars 
experienced abnormally high growth in 2012 compared to the rate of import growth 
recorded in previous years. 
 
(2) Market share of imports: The market share of imports of wire rods and reinforcing bars 
increased sharply in 2012, compared to 2011 and preceding years included in the investigation period. G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 5 - 
   
(3) Sales and turnover: Sales made by the domestic wire rod industry on the domestic market 
shrank by 36% for January-September 2012 compared with the same period in 2011, with a drop in value of 39%. Sales of reinforcing bars on the domestic market decreased 
by 1.34% for January - September 2012 compared with the same period in 2011. 
 (4) Domestic industry production: Production of wire rods fell by 30% 
for January-September 2012 compared with the same period in 2011, reaching its lowest 
level for the entire investigation period. Production of reinforcing bars also declined by 1.25% for the period January-September 2 012 compared with the same period in 2011. 
 
(5) Productivity and employment: Apparent labour productivity increased by 4% 
in terms of production per employee and per hour worked respectively for the period January-September 2012, compared with the same period in 2011. 
 
In response to the fall in production and sales, the domestic industry was forced to reduce the number of employees and hours worked, which ex plains the upward trend in apparent labour 
productivity. Further employment cuts are planne d by the various domestic companies producing 
reinforcing bars and wire rods owing to the decline in the level of activity and profitability, as well as the need to reduce production and operation costs in order to restore the financial balance.  
(6) Production capacity and rate of capacity utilization: The capacity utilization rate 
for the production of wire rods fell by 43% in 2012 compared with 2011, reaching its lowest rate for the entire investigation period. In the case of reinforcing bars, the capacity 
utilization rate decreased by one percentage point in 2012 compared with 2011. 
 (7) Inventories: End-of-year inventory levels went up by some 23% for wire rods and 16% for 
reinforcing bars during the first nine months of 2012 compared with the same period 
in 2011. The increase in inventories reflects the difficulties encountered by the domestic industry in disposing of their production duri ng 2012, even though demand did not contract 
in 2012 compared with 2011. 
 
(8) Sales prices and production costs: The average selling price index (ex-factory) for wire 
rods decreased by 5% between 2011 and 2012 despite a rise in production costs, with 
the result that there was a significant fall in the unit value. Similarly, between 2011 
and 2012, the price index for reinforcing bars declined by 2% while production costs increased by 3%. Reinforcing bar sales were therefore made at a loss in 2012. This shows 
that prices are being supressed, since the dome stic industry should normally be able to 
ensure that higher production costs are absorbed by sales prices. 
 (9) Profitability: The profitability of the domestic industry was strongly impacted in 2012, 
with negative profitability recorded for both wire rods and reinforcing bars. 
 The decline in production and sales and the increa sed inventories recorded by domestic producers 
had an impact on fixed costs, leading to higher production costs and reduced profits. It should 
be noted that domestic producers predicted that the increase in imports and drop in their sales would lead to financial losses, which incited them to introduce austerity measures and consider 
plans to restructure their workforce. 
 Conclusion on injury  
The changes in the different parameters considered in the assessment of injury clearly 
and unequivocally demonstrate that the domestic industry for both wire rods and reinforcing bars deteriorated in 2012 compared with 2011. This deterioration is evidenced by a fall in production 
and in the value and volume of sales, a decline in market share, capacity utilization rate 
and employment, higher inventory levels, and a considerable accumulation of financial losses.  G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 6 - 
  The five companies comprising the domestic indust ry recorded poor performances in 2012, despite 
the fact that there was no downturn in the domestic market to justify them. Given that these poor performances led to financial and job losses, as well as plans for further job cuts, the DCE considers that the domestic industry for reinforc ing bars and wire rods experienced significant 
overall impairment in its position, and consequently, that it suffered serious injury as defined 
in Article 4 of the WTO Agreement on Safeguards.  
CAUSAL LINK 
 In accordance with the requirements of Article 4.2(b), the DCE examined the correlation between 
the increased imports and the injury suffered, as well as the effects of factors other than increased 
imports that may have caused injury to the domestic industry. 
 1. Effect of increased imports 
 
Imports of wire rods and reinforcing bars expe rienced abnormally high growth in the first 
nine months of 2012 compared with the same period in 2011, in both absolute terms and relative 
to demand trends. This increase in imports resulted  in the absorption of a market share far greater 
than had been the case for imports prior to 2012.  Moreover, the DCE determined, based on information gathered from domestic producers 
of reinforcing bars and wire rods, that in 2012 as compared to 2011, the domestic industry 
suffered serious injury involving an overall impairment of its position.  
The DCE considers that the coincidence between the sharp, unexpected and substantial increase 
in imports in 2012 and the injury suffered by the domestic industry in 2012 is reasonable evidence 
that the increase in imports was at the source of  the injury suffered by the domestic industry. 
 
The fact that reinforcing bars and wire rods were imported in increased quantities and at very competitive prices, while demand rose by only 2.3%, resulted in a reduction in the market share of like domestic products, and a decrease in production and sales, despite the lowering of prices 
by the domestic industry in order to cope with competition from imports. 
 Furthermore, the rise in production costs, which was partly due to lower production and increased 
inventories (higher fixed costs per unit), together with the reduction in ex-factory prices to match 
import prices, have caused the domestic industry substantial financial losses. 
 
Table 4: Trends in import prices, ex -factory prices and production costs  
 
 Index: 2008 = 100; 2011 (Jan-Sep) = 100 
Indicators 2008 2009 2010 2011 2011 
(Jan-Sep) 2012 
(Jan-Sep) 
Average c.i.f. price for imports (DH/tonne)  Wire rods 6,484 4,342 4,968 6,045 6,107 6,119 
Reinforcing 
bars 7,609 4,356 4,270 5,969 5,935 5,905 
Ex-factory 
price (DH/tonne)  Wire rods 100 64 65 80 100 95 
Reinforcing 
bars 100 67 67 80 100 98 
Production 
costs (DH/tonne)  Wire rods 100 69 80 90 100 103 
Reinforcing 
bars 100 69 81 90 100 103 
Source: Data compiled from Foreign Exchange Board statis tics and results of a survey  for domestic producers. 
 
2. Effect of other factors 
 2.1. Effect of trends in domestic consumption 
 
With the exception of the year 2010, in which consumption declined by 4%, domestic consumption of wire rods and reinforcing bars showed an upwards trend. In fact, between 2011 and 2012, 
during which the DCE noted that the domestic industry had suffered serious injury, consumption G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 7 - 
  grew by 2%. The DCE therefore considers that the injury caused to the domestic industry cannot 
be attributed to a contraction in demand.  
Table 5: Trends in domestic consumption of wire rods and reinforcing bars 
 
Index: 2008 = 100; 2011 (Jan-Sep) = 100 
 2008 2009 2010 2011 2011 
(Jan-Sep) 2012 
(Jan-Sep) 
Wire rods (tonnes) 100 127 126 122 100 131 
Reinforcing bars (tonnes) 100 116 111 121 100 99 
Total (tonnes)  100 118 113 121 100 102 
Source: Calculations based on survey data. 
 
2.2. Effect of competition between domestic producers 
 Internal competition between domestic producers cannot be considered a factor of serious injury or threat thereof to the Moroccan industry, insomuch as since the entry of new competitors 
on the Moroccan market between 2002 and 2010, domestic producers have coexisted 
in the competitive market without suffering any injury. Nevertheless, the decline in prices and the resulting deterioration of the domestic industry are not the result of competition between 
domestic producers. The fall in prices was caused by the massive increase in imports at very 
competitive prices, which forced domestic producers to align their prices with import prices in order to maintain their presence on the market. 
 
2.3. Effect of the technology gap  Given that a large proportion of investments for new creations or for capacity-building and 
upstream integration were made within the past ten years, production facilities in the domestic 
industry are relatively recent compared with those in certain European export units. In fact, most production units are new and have the most mo dern and high-performance equipment, capable 
of ensuring a quality level that meets Moroccan and international standards. 
 The DCE therefore considers that the injury cannot be attributed to technological backwardness 
with regard to products or exporting producers. 
 2.4. Effect of energy costs  
Morocco's relatively high energy costs in comparison with competitor countries put a strain 
on the international competitiveness of the Moroccan industry. However, this factor, which has been a structural factor throughout the investigation period, did not cause any injury 
to the wire rod and reinforcing bar industry in the years preceding the massive increase in imports. 
Given that energy costs remained unchanged between 2011 and 2012, the DCE sees no reason to attribute the injury suffered by the domestic industry in 2012 to this factor. 
 
2.5. Effect of the removal of customs duties  With regard to the elimination of tariffs under the Morocco-EU Association Agreement, it is import 
to recall that the tariffs applicable to the produc ts in question have been progressively reduced, 
and in 2011, the rate was 3.25%. Furthermore, over the last ten years, the price of imported wire 
rods and reinforcing bars has always been lower than that of domestic products. The elimination 
of the last tariff tier, amounting to 3.25% on imports at prices lower than like domestic products, 
cannot be the cause of the growth in imports or the injury suffered. The decrease in price relating to the 3.25% tariff is negligible compared with the price difference between imported products 
and like domestic products. The increase in imports is due rather to the continuing crisis 
in southern European countries and the increase in unused capacity.  G/SG/N/7/MAR/2 • G/SG/N/8 /MAR/3 • G/SG/N/11/MAR/2 
- 8 - 
  Conclusion concerning the causal link 
 In light of this initial causation analysis, it has been concluded that the sudden, unexpected and massive increase in imports recorded in the first nine months of 2012 was the main cause 
of the injury suffered by the domestic industry  for wire rods and reinforcing bars in 2012. 
 The DCE therefore considers that there is a causal link between the increased imports 
and the serious injury as defined in Article 4.2(b) of the WTO Agreement on Safeguards. 
 6.(ii) Determining the existence of critic al circumstances where delay would cause 
damage which it would be difficult to repair 
 
Based on the data gathered through the import surveillance mechanism, implemented at the same time as the initiation of the safeguards investigation, the DCE considers that the growth rate 
in imports of wire rods and reinforcing bars recorded in the last months of 2012 and at the 
beginning of 2013 was significantly higher than the rate noted in the first nine months of 2012. This trend appears to be causing additional inju ry to a domestic industry which already suffered 
serious injury in the form of a general deterioration of its position owing to the increase in imports. 
 With a view to preventing additional damage to the domestic industry which it would be difficult 
to repair, the DCE considers that the requirements for the application of a provisional measure, 
set out in Article 6 of the WTO Agreement on Safeguards, have been met. 
 7. Offer of consultations under Article 12.4 
 
Consistent with Article 12.4 of the Agreement on Safeguards, Morocco is ready to consult on the provisional safeguard measure with those Members having a substantial interest 
as exporters of the products concerned. 
 8. Developing country Members exempt from the measure in accordance 
with Article 9.1 of the Agreement on Safeguards  
 
The developing country Members listed below are exempt from the proposed safeguard measure, 
as their exports represent less than 3% of exports to Morocco: 
 
Albania; Angola; Antigua and Barbuda; Argentina; Kingdom of Bahrain; Bangladesh; Barbados; Belize; Benin; Bolivia; Botswana; Brazil; Brune i Darussalam; Burkina Faso; Burundi; Cambodia; 
Cameroon; Cape Verde; Central African Republic; Chad; Chile; China; Chinese Taipei; Colombia; 
Congo; Costa Rica; Croatia; Cuba; Djibouti; De mocratic Republic of the Congo; Dominica; 
Dominican Republic; Ecuador; Egypt; El Salvador; Fiji; Former Yugoslav Republic of Macedonia (FYROM); Gabon; the Gambia, Georgia; Ghana; Grenada; Guatemala; Guinea; 
Guinea-Bissau; Guyana; Haiti; Honduras; Hong Kong, China; India; Indonesia; Ivory Coast; 
Jamaica; Jordan; Kenya; Republic of Korea; Kyrgyz Republic; Lao People's Democratic Republic; Lesotho; Macao, China; Madagascar; Malaysia; Malawi; Maldives; Mali; Mauritius; Mauritania; 
Mexico; Republic of Moldova; Mongolia; Montenegro; Mozambique; Myanmar; Namibia; Nepal; 
Nicaragua; Niger; Nigeria; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; Philippines; Qatar; Rwanda; Saint-Lucia; Saint Kitts and Nevis; Saint Vincent and the Grenadines; 
Samoa; Kingdom of Saudi Arabia; Senegal; Si erra Leone; Singapore; Solomon Islands; 
South Africa; Sri Lanka; Suriname; Swaziland; Tajikistan; Tanzania; Thailand; Togo; Tonga; Trinity and Tobago; Tunisia; Turkey; Uganda; United Arab Emirates; Uruguay; Vanuatu; Bolivarian Republic of Venezuel a; Vietnam; Zambia; Zimbabwe. 
 
__________