WORLD TRADE  
ORGANIZATION   
G/SG/N/8/CHL/5 
G/SG/N/10/CHL/8 
G/SG/N/11/CHL/7 4 September 2012 
 
(12-4746) 
Committee on Safeguards Original: Spanish 
   
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON 
SAFEGUARDS ON FINDING SE RIOUS 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 
 
(Maize otherwise worked) 
   The following notification, dated 29 August 2012, is being circulated at the request of the 
delegation of Chile. 
 
_______________ 
 
  Consistent with Article 12.3 of the Agreemen t on Safeguards, Chile is prepared to consult 
with those Members having a substantial interest  as Chile's suppliers of the product concerned. 
 
1. Evidence of serious injury or threa t thereof caused by increased imports 
 
The applicable period of investigati on is from January 2011 to March 2012. 
 
Serious injury 
 
 The injury to domestic maize producers is a result of their dependence on domestic buyers, whose demand is satisfied due to the rise in imports  of broken maize, so that there is less demand for 
Chilean maize, thus forcing domestic producers to lower their prices. 
 
Chilean imports of broken maize are subject to an export incentive in their country of origin, 
as a result of differential export taxes on maize an d broken maize and export restrictions on whole 
maize.  Consequently, the export price of broken maize is lower than the price of whole maize 
(the price of which, as a commodity, is determined by global markets), since the former is prepared 
through an industrial process that only uses whole maize as a raw material. 
 
This price gap creates an import price gap, which explains, on one hand, the excessive rise in 
imports of broken maize and, on the other, the difficulties that domestic producers face when selling their produce at prices that are in line with internatio nal prices of whole maize.  The situation is more G/SG/N/8/CHL/5 
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  serious during the harvest and sale of the crop, espe cially for small and medium producers that have 
no storage capacity.  
This explains why the increase in the acreage and production of domestic maize, driven by 
higher demand for products that use it as an input, is significantly less than the rise in imports of 
broken maize.  Moreover, imports of whole ma ize - which have traditionally supplemented the 
domestic shortfall - have been largely replaced by imports of broken maize.  
 Both imported whole maize and imported broke n maize are products that compete directly 
with domestic maize and therefore determine the price that firms which use maize are willing to pay for the domestic product.   It has also been observed that the gap between  the average domestic price and the alternative 
import cost (f.o.b. price of yellow maize in Argentin a) has widened year after year and that, as a result 
of broken maize imports, the domestic price continues to drop in relation to the period when there were fewer or no imports.   In general, domestic maize is marketed durin g the harvest period.  It is estimated that 
between 10 and 20 per cent of productio n will remain unsold, hopefully to be marketed over the next 
two months. 
  Domestic apparent consumption of maize rose by 12.1 per cent in 2011, while it fell by 1.3 per cent the previous year.  
 In 2011, domestic production of maize increased by 5.9 per cent compared to the previous 
year, while in 2010 it grew by 0.9 per cent and in 2009 it decreased by 1.5 per cent. 
  The share of imports of broken maize in appa rent consumption of maize reached 12.6 per cent 
in 2011, implying an increase in relation to 20 10 and 2009, when it amounted to 8.8 per cent 
and 4.2 per cent, respectively. 
 
 The share of production in apparent consump tion reached 59.7 per cent in 2011, down 5.6 per 
cent from 2010.  The share of production in a pparent consumption, including sorghum, 
totalled 47.3 per cent in 2011, down 3.7 per cent from 2010.  
 The installed capacity for the production of  maize comprises the 139,268 hectares intended 
for its cultivation for the season 2011/12, 16. 7 per cent more than in the season 2010/11. 
  According to industry figures, the average domestic price reached US$264.4/tonne during the 
period January-June 2012, down 11.9 per cent from the same period the previous year.  In 2011 and 2010, increases of 32.1 per cent and 12. 2 per cent were recorded, respectively. 
 
 The price gap between imports of broken maiz e and whole maize was -4.3 per cent during the 
first six months of 2012, while it was -12.4 per cent and -11 per cent in 2011 and 2010, respectively.   Production costs rose by 6.1 per cent during the season 2011/12, whereas they had fallen 
by 4.5 per cent in 2010/11. 
 
 There are no data on wages in the maize indus try.  Approximate figures have been derived 
from the wages for the agriculture sector as a whole, where a 2 per cent decline was observed at the 
national level from Ch$339,029 in Decembe r 2009 to Ch$332,217 in December 2010.  G/SG/N/8/CHL/5 
 G/SG/N/10/CHL/8 
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   By the third week of January 2012, with domestic prices at Ch$142,860/tonne, small and 
medium producers would have had negative sales ma rgins of around 32 and 4 per cent, respectively, 
while large producers would have had positive margin s of around 30 per cent.  Domestic prices fell to 
around Ch$129,000/tonne in April-May, causing the margins of small, medium and large producers to 
fall to -46 per cent, -15 per cent and 22 per cent, respectively.  
 Financial statements are not available, due to  the level of fragmentation of the sector and the 
different accounting and taxation realities faced by producers, many of whom operate under a 
presumptive tax regime and are therefore not obliged to keep full accounting records. 
 
Threat of serious injury 
 
 Imports of broken maize at prices below international maize prices will significantly increase 
the supply of this product on the domestic market and purchasers will therefore still have reason to 
increase imports or pay domestic producers an increasingly lower price.   Furthermore, if measures are not applied, the upward trend in imports of broken maize will lead to an oversupply in the Chilean market.  
 The threat of injury is directly related to th e very real possibility th at, as a result of increased 
imports of broken maize, the residual demand for ma ize will drop so that local production gradually 
comes to exceed domestic demand for maize.  
 The possibility of an increase in Argentine exports of broken maize to Chile has also been 
taken into account.  It is estimated that maize production in Argentina will reach almost 21 million 
tonnes by the season 2011/12, as opposed to around 1.45 million in Chile.  
Causal link 
  Both imported whole maize and imported broken maize are products that compete directly 
with domestic maize and therefore determine the pr ice that firms which use maize are willing to pay 
for the domestic product as they will have the possibility,  at least to a certain extent, of replacing the 
domestic product by these imported substitutes.   Since the import price of broken maize has been  consistently lower than the import price of 
whole maize, it is the former that is actually preventing domestic maize from reaching at least the 
price of the imported like product, i.e. imported whol e maize.  Therefore, due to the impact on the 
price of domestic maize alone, a causal link is seen to exist between imports of broken maize and the 
injury and threat of injury facing domestic maize producers.   Other factors that could be affecting the dom estic maize industry - which are unrelated to 
imports of broken maize - are the fragmentation of the maize-produci ng industry and producers' lack 
of storage capacity, which forces them to sell all of  their produce during the harvest period, resulting 
in an oversupply that, combined with the more  concentrated processing industry, limits their 
negotiating power.  G/SG/N/8/CHL/5 
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  2. Increased imports of broken maize 
 
 Imports of broken maize increased by 60.2 per cent in 2011, compared with 2010, amounting 
to 303,663 tonnes.  During the period January-April 2012, the level of imports was 138,522 tonnes, 
signifying an increase of 107.5 per cent compared with the same period of the previous year. 
  The ratio of broken maize imports to tota l domestic maize production reached 21.1 per cent 
in 2011, whereas it stood at 14 per cent in 2010, repr esenting an increase of 51.3 per cent.  In 2008 
and 2009, the ratio was 3 per cent and 6.7 per cent, respectively. 
  The analysis found that imports of the product concerned increased considerably:  
Imports of broken maize 
% variation 2009/2008 122.7% 
% variation 2010/2009 108.9% 
% variation 2011/2010 60.1% 
% variation January-March 2012/2011 120.0% 
 3. Product subject to the proposed final safeguard measure 
 
 The product subject to the proposed final safe guard measure is maize, otherwise worked - 
hereinafter broken maize.  
 The domestic industry is made up of producers of  maize, inasmuch as it is observed that the 
maize produced in Chile is directly competitive with  broken maize, since both products have the same 
end-use, namely that of animal feed, and the pr ices of imported broken ma ize have determined the 
prices of domestic maize.  
4. Harmonized System numbers under which th e product enters at least at a 6-digit HS 
level, and at a national level 
 
 The Harmonized System number under which th e product enters the market is 1104.23 and 
the number at a national level is 1104.2300.  5. If the final measure replaces a provisional 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 longer 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-digit or 10-digit level) if practicable. 
  Not applicable. 
 
6. Proposed measure 
 
 The proposed measure consists of applying a de finitive tariff surcharge of 10.8 per cent on 
imports of  broken maize. 
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  7. Proposed date of introduction of the measure 
 
 The final measure is expected to enter into fo rce upon its publication in the Official Journal, 
i.e. towards the end of the week beginning 3 September 2012. 
8. Expected duration of the measure 
 
The proposed measure will be established for a five-month period as from 27 April 2012, 
the date of publication of the Decree establishi ng a provisional tariff surcharge on the said goods. 
 
9. For a measure with a duration of more than three years, provide the proposed date for 
the review (under Article 7.4) to be held not later than the mid-term of the measure, if such a date for the revie w has already been scheduled. 
  Not applicable. 
 
10. If the expected duration is over one year, provide the expected timetable for progressive 
liberalization of the measure. 
 
 Not applicable. 
11. If the notification relates only to a finding of serious injury or threat thereof, and does 
not relate to a decision to appl y or extend a safeguard measure: 
 
 Not applicable.  12. If the measure is being extended, also provide: 
 
 Not applicable.  
13. The major exporting Members of import s of the product involved and Members to 
which the measure does not apply. 
 
 During the period of investigation, the impor ts of broken maize were from the Republic 
of Argentina.   In the light of Chile's trade agreements with  Mexico, Canada and Peru, the measure will not 
apply to these countries. 
 14. The safeguard measure does not apply to deve loping country Members of the World Trade 
Organization (WTO) whose average individual shar e of total imports during the 24-month period 
from April 2010 to March 2012 was less than 3 per ce nt and which collectively account for not more 
than 9 per cent, in accordance with the provisions of Article 9.1 of the Agreement on Safeguards. G/SG/N/8/CHL/5 
G/SG/N/10/CHL/8 G/SG/N/11/CHL/7 
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  TABLES 
 
Table 1 
Imports of maize 
(Tonnes) 
 
Month - Year Broken Whole Total 
January 2008 85 107,610 107,695 
February 2008 1,406 125,563 126,968 
March 2008 4,383 138,513 142,897 
April 2008 5,815 113,285 119,100 
May 2008 825 81,539 82,363 
June 2008 1,198 65,345 66,543 
July 2008 2,452 161,646 164,097 
August 2008 2,741 159,979 162,720 
September 2008 4,882 101,935 106,817 
October 2008 6,576 173,539 180,115 
November 2008 3,184 80,540 83,724 
December 2008 7,216 127,117 134,333 
January 2009 5,186 95,607 100,793 
February 2009 5,019 47,286 52,304 
March 2009 6,431 55,326 61,757 
April 2009 6,031 45,679 51,710 
May 2009 2,411 9,387 11,797 
June 2009 3,364 18,481 21,844 
July 2009 7,997 113,992 121,990 
August 2009 7,821 84,546 92,368 
September 2009 8,280 8,094 16,374 
October 2009 14,464 117,420 131,884 
November 2009 12,356 74,352 86,708 
December 2009 11,183 69,407 80,589 
January 2010 13,277 106,764 120,042 
February 2010 21,042 63,057 84,099 
March 2010 24,602 74,431 99,033 
April 2010 16,208 7,353 23,561 
May 2010 6,340 8,711 15,051 
June 2010 14,097 6,650 20,747 
July 2010 8,613 86,064 94,677 
August 2010 10,996 6,737 17,733 
September 2010 17,288 40,401 57,688 
October 2010 16,311 68,440 84,750 
November 2010 19,533 84,543 104,076  G/SG/N/8/CHL/5 
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  Month - Year Broken Whole Total 
December 2010 21,303 45,136 66,440 
January 2011 20,896 68,921 89,817 
February 2011 13,818 68,748 82,565 
March 2011 16,219 41,690 57,909 
April 2011 15,838 2,080 17,918 
May 2011 20,194 1,620 21,814 
June 2011 19,190 2,066 21,257 
July 2011 13,117 16,447 29,564 
August 2011 15,269 55,930 71,199 
September 2011 28,243 67,760 96,003 
October 2011 44,112 70,200 114,312 
November 2011 52,367 132,076 184,443 
December 2011 44,400 137,466 181,866 
January 2012 39,183 59,278 98,460 
February 2012 36,016 92,848 128,864 
March 2012 36,838 70,552 107,390 
April 2012 26,486 29,807 56,293 
May 2012 1,890 15,375 17,264 
June 2012 1,651 38,924 40,575 
    
2008 40,762 1,436,612 1,477,374 
2009 90,543 739,575 830,119 
2010 189,611 598,287 787,898 
2011 303,663 665,004 968,667 
January-April 2011 66,771 181,440 248,211 
January-April 2012 138,522 252,485 391,008 
May-June 2011 39,384 3,686 43,070 
May-June 2012 3,541 54,298 57,839 
    
% variation 2009/2008 122.1% -48.5% -43.8% 
% variation 2010/2009 109.4% -19.1% -5.1% 
% variation 2011/2010 60.2% 11.2% 22.9% 
% variation January-April 2012/2011 107.5% 39.2% 57.5% 
% variation May-June 2012/2011 -91.0% + 34.3% 
 
+:  Variation greater than 1,000 per cent. 
 
Source : Prepared by the Technical Secretariat on the basis of data supplied by the National Customs Service. 
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  Table 2 
Imports of broken maize and domestic maize production 
(Tonnes) 
 
Period Imports of 
broken maize 
(M) Maize production
(P) Ratio 
(M/P) Percentage 
variation of 
M/P 
2008 40,762 1,365,472 3.0%  
2009 90,543 1,345,653 6.7% 125.4% 
2010 189,611 1,357,921 14.0% 107.5% 
2011 303,663 1,437,561 21.1% 51.3% 
 
Source : Prepared by the Technical Secretariat on the basis of da ta supplied by the National Customs Service and the Office 
for Agricultural Research and Policy (ODEPA). 
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  Table 3 
Certain relevant prices 
 
Month Price 
MR (US$/tonne)(1) Average domestic price 
reported by the industry 
(US$/tonne)(2) Alternative cost of 
imports from Argentina 
(US$/tonne)(3) 
April 2007 178.5 181.7  
May 2007 182.0 188.8  
June 2007  191.2  
July 2007  200.5  
August 2007    
September 2007    
October 2007  228.7  
November 2007  230.3  
December 2007  240.1  
January 2008  268.4  
February 2008  283.2  
March 2008 280.9 285.4  
April 2008 294.8 295.6  
May 2008 292.6 290.2  
June 2008 281.6 282.7  
July 2008 312.6 304.6  
August 2008 293.7 286.6  
September 2008 285.5 280.4  
October 2008 248.2 240.8  
November 2008 234.5 226.5  
December 2008 238.7 217.1  
January 2009  212.6  
February 2009  214.5  
March 2009  203.3 196.0 
April 2009 187.7 184.5 199.1 
May 2009 182.8 179.4 211.5 
June 2009 193.5 187.5 220.4 
July 2009 199.8 192.8 206.7 
August 2009 192.6 190.7 206.1 
September 2009  192.6 203.6 
October 2009  194.0 214.7 
November 2009  206.0 217.2 
December 2009  212.5 214.9 
January 2010  219.3 219.1 
February 2010  225.3 211.6 
March 2010  212.6 209.7 G/SG/N/8/CHL/5 
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  Month Price 
MR (US$/tonne)(1) Average domestic price 
reported by the industry 
(US$/tonne)(2) Alternative cost of 
imports from Argentina 
(US$/tonne)(3) 
April 2010 199.1 198.8 207.3 
May 2010 194.8 190.7 214.2 
June 2010 194.4 190.1 207.9 
July 2010 197.5 190.8 216.6 
August 2010  211.2 243.6 
September 2010  227.9 271.5 
October 2010  242.2 290.5 
November 2010  266.3 294.8 
December 2010  285.4 303.1 
January 2011 296.3 285.0 317.6 
February 2011 304.8 300.8 334.2 
March 2011 312.7 298.1 327.9 
April 2011 318.3 306.0 352.3 
May 2011 320.7 308.6 346.8 
June 2011 319.5 302.8 347.6 
July 2011 324.0 305.5 336.0 
August 2011  299.2 343.8 
September 2011  286.9 330.3 
October 2011  271.2 310.2 
November 2011  277.2 305.6 
December 2011  273.6 279.2 
January 2012  283.1 305.5 
February 2012   314.3 
March 2012   313.6 
April 2012 277.3 269.3 302.6 
May 2012 271.6 257.2 290.7 
June 2012 267.0 248.1 279.9 
    
2008 276 272 - 
2009 191 198 209 
2010 196 222 241 
2011 314 293 328 
January-April 2011 308 297 333 
January-April 2012 277 276 309 
May-June 2011 320 306 347 
May-June 2012 269 253 285  G/SG/N/8/CHL/5 
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  Month Price 
MR (US$/tonne)(1) Average domestic price 
reported by the industry 
(US$/tonne)(2) Alternative cost of 
imports from Argentina 
(US$/tonne)(3) 
% variation 2009/2008 -30.8% -27.3% - 
% variation 2010/2009   2.7% 12.2%   15.2% 
% variation 2011/2010   59.7% 32.1%   36.0% 
% variation 
January-April 2012/2011 -10.0% -7.1% -7.2% 
% variation 
May-June 2012/2011 -15.9% -17.3% -17.8% 
 
(1)  Calculated by the Technical Secretariat on the basis of the price paid in terms of purchasing power in the 
Metropolitan Region. 
(2)  Prepared by the Office for Agricultural Research and Policy (ODEPA) on the basis of data supplied by Comercializadora 
de Trigo S.A . (COTRISA). 
(3)  Prepared by ODEPA. 
  
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Page 12 Table 4 
Regional maize-sown area1 
(Hectares) 
 
Region 2002/03 2003/04 2004/05 2005/06 2006/07* 2007/08 2008/09 2009/10 2010/11 2011/12 % annual 
average 
increase 
4th 750 730 850 630 580 750 212 272 434 83 -21.7% 
5th 2,020 2,200 1,770 1,870 1,800 1,700 1,315 805 1,566 980 -7.7% 
MR 12,490 13,700 16,950 13,630 14,200 15, 830 15,646 13,974 15,217 14,607 1.8% 
6th 65,070 70,500 76,400 73,400 76,700 63, 580 53,130 50,953 54,530 47,419 -3.5% 
7th 23,530 25,000 30,490 27,830 34,300 42, 120 43,621 44,819 34,676 57,120 10.4% 
8th 5,180 6,600 7,100 5,440 5,800 9,800 13,554 10,704 12,514 17,258 14.3% 
9th 70 100 230 270 270 480 352 639 445 1,364 39.1% 
Other 437 
Total 109,110 118,830 133,790 123,070 133,650 134,260 127,830 122,166 119,382 139,268 2.7% 
% increase  9% 13% -8% 9% 0% -5% -4% -2% 17% 
 
1   Does not include 1st, 2nd, 3rd, 11th or 12th regions. 
 
Source :  Prepared by the Technical Secretariat on the basis of data supplied by the Office for Agricultural Research and Policy, ODEPA ( "Annual harvests by region (xls)"). 
 
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  Table 5 
Maize producers by farm size 
 
Farm size ranges 
(ha) Number of 
producers % Total sown 
area % Production 
(tonnes) % 
0.1 to 4.9 7,358 39.5% 5,156 5.0% 48,117 4.3%
5 to 9.9 2,918 15.6% 7,013 6.8% 74,501 6.6%
10 to 19.9 3,354 18.0% 13,355 12.9% 136,026 12.1%
20 to 49.9 2,818 15.1% 19,654 19.0% 204,254 18.2%
50 to 99.9 1,074 5.8% 15,621 15.1% 174,676 15.6%
100 to 499.9 977 5.2% 31,330 30.2% 355,154 31.6%
500 to 999.9 92 0.5% 5,805 5.6% 65,574 5.8%
1,000 and above 59 0.3% 5,728 5.5% 64,789 5.8%
Aggregate 18,650 100% 103,661 100% 1,123,091 100%
 
Source :  Prepared by the Technical Secretariat on the basis of the 2007 agricultural census. 
 
 
 
Table 6 
Total cost per tonne, according to average annual yield 
 
 2009/10 2010/11 2011/12 
Total costs per hectare (Ch$) 1,518,562 1,582,742 1,679,764 
Average yield (tonnes/ha) 11 12 12 
Cost per tonne (Ch$/tonne) 138,051 131,895 139,980 
 
Source:  National Agricultural Society. 
 
  
Table 7 
Costs by producer size 
 
 Small 
producers Medium 
producers Large 
producers 
Number of farms 15,337 1,850 1,300 
Average area (ha) 4 15 42 
Average yield (tonnes/ha) 10 11 16 
Cost of season 2011/12 (Ch$/ha) 1,793,649 1,641,761 1,608,930 
Unit cost (Ch$/tonne) 188,805 149,251 100,558 
 
Source:  National Agricultural Society. G/SG/N/8/CHL/5 
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  Table 8 
Costs, prices and margins by producer size 
 
 Small 
producers Medium 
producers Large 
producers 
Average yield (tonnes/ha) 9.5 11.0 16.0 
Cost of season 2011/12 (Ch$/ha) 1,793,649 1,641,761 1,608,930 
Unit cost (Ch$/tonne) 188,805 149,251 100,558 
Reference price (Ch$/tonne) (1) 142,860 
Sales margin -32% -4% 30% 
Reference price (Ch$/tonne)(2) 129,366 
Sales margin  -46% -15% 22% 
 
(1)  In January 2012. 
(2)  Average, April-May 2012. 
 
Source : Prepared by the Technical Secretariat on the basis of data supplied by the National Agricultural Society and 
Comercializadora de Trigo S.A . (COTRISA). 
 
  
Table 9 
Domestic apparent consumption of maize 
(Tonnes) 
 
 
Maize 
production Exports Imports 
Apparent 
consumption Share of imports 
of broken 
maize/apparent 
consumption Share of 
production of 
maize/apparent 
consumption  Broken 
maize Whole 
maize Total 
maize 
2008 1,365,472 10 40,762 1,436,612 1,477,374 2,842,836 1.4% 48.0% 
2009 1,345,653 808 90,543 739,575 830,119 2,174,964 4.2% 61.9% 
2010 1,357,921 2 189,611 598,287 787,898 2,145,817 8.8% 63.3% 
2011 1,437,561 5 303,663 665,004 968,667 2,406,223 12.6% 59.7% 
% var. 2009/2008 -1.5% + 122.1% -48.5% -43.8% -23.5% 190.3% 28.8% 
% var. 2010/2009 0.9% -99.7% 109.4% -19.1% -5.1% -1.3% 112.3% 2.3% 
% var. 2011/2010 5.9% 127.9% 60.2% 11.2% 22.9% 12.1% 42.8% -5.6% 
 
+:  Variation greater than 1,000 per cent. 
 
Source : Prepared by the Technical Secretariat on the basis of data supplied by the Office for Agricultural Research and 
Policy (ODEPA) and the National Customs Service. 
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  Table 10 
Agricultural sector wages (Ch$ per month) 
 
 December 2008 December 2009 December 2010 
National 288,983 339,029 332,217 
Metropolitan Region 324,510 396,531 378,711 
6th Region 251,663 276,229 276,053 
7th Region 231,595 245,726 258,643 
8th Region 302,270 360,448 345,569 
 
Source: Office for Agricultural Research and Policy (ODEPA). 
 
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