WORLD TRADE  
ORGANIZATION   
G/SG/N/8/EGY/6 
G/SG/N/10/EGY/6 
G/SG/N/11/EGY/5 
20 July 2012 
 (12-3988) 
Committee on Safeguards Original:   English 
  
 
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 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
 
EGYPT 
 
(Cotton Yarn) 
 
  The following notification, dated 17 July 2012, 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 12.1(b) of the Agreement on Safeguard s on finding serious injury caused by increased 
imports, Article 12.1(c) of the Agreement of Safegua rd on the decision to apply a definitive safeguard 
measure and footnote 2 of Article 9 of the Agreement on Safeguards.   
 
Consistent with Article 12.3 of the Agreement on Safeguards, Egypt is prepared to consult 
with those Members having a substantial inte rest as exporters of the subject product.   
 
A. NOTIFICATIONS UNDER ARTICLE 12.1(B) AND 12.1(C) OF THE AGREEMENT ON 
SAFEGUARDS UPON MAKING A FINDING OF SERIOUS INJURY 
 
1. Evidence of serious injury caused by increased imports 
 
(a) Serious injury 
 
In order to make a final determ ination of serious injury to the domestic industry producing the 
like or directly competitive product, an evalua tion of all relevant factors on an objective and 
quantifiable basis having a bearing on its situation has been undertaken.    G/SG/N/8/EGY/6 
G/SG/N/10/EGY/6 G/SG/N/11/EGY/5 
Page 2 
  
  (i) Market Share 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Market share of domestic 
industry  - (38) 28 (54) 
Market share of imports - 26 (9) 26 
 
 The market share of the domestic industry decreased by 38 per cent in 2008/2009 when compared to 2007/2008, then it increased by 28 per cent in 2009/2010 when compared to 2008/2009, 
and then decreased by 54 per cent in 2010/2011 when  compared to 2009/2010.  At the same time, the 
market share of imports increased by 26 per cen t in 2008/2009 when compared to 2007/2008; 
decreased by 9 per cent in 2009/2010 when compared to 2008/2009, and then increased by 26 per cent 
in 2010/2011 when compared to 2009/2010.  
 
(ii) Domestic Sales 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Change in sales volume - (10) 41 (48) 
 
 The domestic industry's sales decreased by 10 per cent in 2008/2009 when compared to 2007/2008, then increased by 41 per cent in 2009/20 10 when compared to 2008/2009, and decreased 
by 48 per cent in 2010/2011 when compared to 2009/2010.  
 
(iii) Production 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Change in production volume  - (7) 2 (19) 
 
 The domestic industry's production decreased by 7 per cent in 2008/2009 when compared to 
2007/2008, then it increased by 2 per cent in 2009/2010 when compared to 2008/2009, and finally 
decreased by 19 per cent in 2010/2011 when compared to 2010/2011.   
 
(iv) Productivity 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Change in productivity - - 12 (19) 
 
 Labour productivity was stable in 2008/2009 comp ared to the previous year, then increased 
by 12 per cent in 2009/2010 when compared to 2008/2009 and decreased by 19 per cent in 2010/2011 
when compared to 2009/2010. 
    G/SG/N/8/EGY/6 
 G/SG/N/10/EGY/6 
 G/SG/N/11/EGY/5 
 Page 3 
  
  (v) Capacity utilisation 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Change in capacity utilization  - (2) 14 (1) 
 
 The capacity utilisation decreased by 2 per cen t in 2008/2009 when co mpared to 2007/2008, 
then increased by 14 per cent in 2009/2010 when compared to 2008/2009, and in 2010/2011 the 
capacity utilisation declined by 1 per cent in 2010/2011 compar ed to 2009/2010.  
 
(vi) Profit and loss 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Change in losses - (72) (78) 655 
 
 Losses decreased by 72 per cent in 2008/200 9 when compared to 2007/2008, then it 
decreased by 78 per cent in 2009/2010 when compared to 2008/2009.  Finally, in 2010/2011 losses 
increased by 655 per cent when compared to 2009/2010.    
(vii) Employment 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Number of employees  - (6) (9) (0.02) 
 
 The number of employees decreased by 6 per cent in 2008/2009 when compared to 
2007/2008, then it decreased by 9 per cent in 2009/20 10 when compared to 20 08/2009.  In  2010/2011 
the number of employment declined by 0.02 per cent when compared to 2009/2010.   
(viii) Inventory 
 
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Inventories - 38 (65) 52 
 
 Inventory volumes increased by 38 per cen t in 2008/2009 when compared to 2007/2008, then 
it decreased by 65 per cent in 2009/2010 when compared to 2008/2009.  In 2010/2011 the inventory 
volume increased by 52 per cent when compared to 2009/2010.  
(ix) Conclusion 
 
 When the volume of imports increased sharpl y, the sales and market share of the domestic 
industry declined significantly;  production and cap acity utilisation declined;  labour numbers and 
productivity declined;  the volume of inventory in creased and there was a sharp increase in the 
domestic industry's losses.  Considering all relevant factors, a final determination was made that the 
domestic industry is suffering serious injury.   
 G/SG/N/8/EGY/6 
G/SG/N/10/EGY/6 G/SG/N/11/EGY/5 
Page 4 
  
  (b)
  Causation 
 
(i)  Increase in imports 
  There has been a significant increase in impor ts of the product concerned in year 2010/2011 
in both absolute and relative terms, its market sh are increased and absorbed the major percentage of 
the domestic market volume. Such increase coincided with the deterioration in economic indices of 
the domestic industry which is represented in the decline in production volume, productivity, quantity 
of domestic sales and market share, in addition to  the increase in the inventory volume and losses. 
 
(ii) Other causes 
 
 The IA concludes that there are no other known factors, other than the increasing imports of 
the product concerned, caused serious injury su ffered by domestic industry except the increase in 
costs of domestic industry represented in the increase in financial expenses and wages.  
 
2. Absolute or relative increase in imports 
 
 An analysis of the increase in the volume of imports into the Egyptian market of the subject 
product has been carried out over the period 2007/ 2008 to 2010/2011, both in absolute terms, and 
relative to domestic production.  The analysis h as shown that imports of the product concerned 
increased sharply in that period.    
( Q u a n t i t y / T o n )             
(Year/year percentage)  2007/2008  2008/2009  2009/2010  2010/2011  
Imports  55124 101467 101012 142289 
Change %  84 - 41 
Imports as % of domestic 
production   97 (2) 75 
 
 Import statistics reveal an increase in imports by 84 per cent in 2008/2009 compared to 2007/2008, declined slightly in 2009/2010 compared to the previous year, and increased substantially 
by 41 per cent in 2010/2011. 
 
 The imports as percentage of the producti on increased by 97 per cent in 2008/2009 when 
compared to 2007/2008 then it declined slightly by 2 per cent in 2009/2010 when compared to 2008/2009, and increased substantially by 75 per cent in 2010/2011 when compared to 2009/2010. 
  
3. Description of the subject product 
  The product under investigation is Cotton and Cotton Mixed Yarns (except for sewing 
thread).  The product concerned is currently cl assified under the customs tariff subheadings 52.05, 
52.06 and 52.07 within the Egyptian Customs Tariff Classification.   G/SG/N/8/EGY/6 
 G/SG/N/10/EGY/6 
 G/SG/N/11/EGY/5 
 Page 5 
  
  4. Description of the proposed measure 
 
 It is proposed to impose a definitive safeguard measure is in the form of a specific duty of 3.48 EGP/kg for the first year, 3.13 EGP/kg for the second year and 2 EGP/kg for the third year.  
  
5. Entry into force of the proposed definitive safeguard measure 
 
 The definitive safeguard measure is proposed to enter into force, with the publication of the 
decree of the Minister of Foreign Trade and Industry in the Official Gazette.  
 
6. Expected duration of the measure 
 
 The expected duration of the proposed measure is three years.    
7. Date of review 
 
 Not available. 
  
8. Timetable for the progressive liberalisation of the measure 
  To facilitate adjustment, the proposed m easure will be liberalised as follows:   
 
(EGP/kg) 
Period Publishing  date till 
30/12/2012 From 31/12/2012 to 
1/1/2013 From 2/1/2013 to 
29/12/2014 
Duty 3.48 3.13 2 
 
 
B. NOTIFICATIONS PURSUANT TO ARTICLE 9, FOOTNOTE 2 OF THE AGREEMENT 
ON SAFEGUARDS 
 
1. Description of the subject product 
  The product under investigation is Cotton and Cotton Mixed Yarns (except for sewing 
thread).  The product concerned is currently cl assified under the customs tariff subheadings 52.05, 
52.06 and 52.07 within the Egyptian Customs Tariff Classification.  
2. Description of the proposed measure 
 
 It is proposed to impose a definitive safeguard measure is in the form of a specific duty of 
3.48 EGP/kg for the first year, 3.13 EGP/kg for the second year and 2 EGP/kg for the third year.   
3. Developing countries exempted from the safeguard measure 
 
 Imports from developing country Members shall not be subject to the definitive safeguard 
measure as long as each Member's imports do not ex ceed three per cent of total imports into Egypt 
and the share of the Members with less than a three per cent import share do not collectively account 
for more than nine per cent of total imports into Egypt.   G/SG/N/8/EGY/6 
G/SG/N/10/EGY/6 G/SG/N/11/EGY/5 
Page 6 
  
  Correspondence address: 
 
Ministry of Industry and Foreign Trade Trade Agreements Sector 
Central Department for International Trade Policies  (Anti-dumping, Subsidy a nd Safeguard Department) 
Head of the Central Department for Intern ational Trade Policies "Ibrahim El Sginy" 
Ramses Extension st. ,  Nasr City, Al-Maleya Towers 
Tower 6 – Floor 9 
 Tel:  00 202 - 23422479 Fax: 00 202 - 23420784 e-mail: Tas@tas.gov.eg 
 
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