G/SG/N/8/IDN/27  
G/SG/N/1 0/IDN/27  
 
24 September 2020  
(20-6492) Page: 1/7 
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 OF A PROPOSAL TO IMPOSE A MEASURE  
INDONESIA  
Carpets and Other Textile Floor Coverings  
The following communication, dated 21 September 2020, is being circulated at the request of the 
delegation of Indonesia.  
 
_______________  
 
 
Pursuant to Articles 12.1(b) of the Agreement on Safeguards, the Government of the Republic of 
Indonesia s ubmits a notification on finding serious injury or threat thereof, to the domestic industries 
producing "Carpets and Other Textile Floor Coverings " and a notification of proposed safeguard 
measures. This notification contains all pertinent information rela ting to the proposed safeguard 
measures in accordance with Article 12.2 of the Agreement on Safeguards and an offer of 
consultations pursuant to Article 12.3 of the Agreement on Safeguards.  
A. GENERAL BACKGROUND  
1. Initiation of Investigation  
On 5 June 2020, an application for a safeguard measure was received by the Investigating Authority 
from the Indonesian Textile Association/ Asosiasi Pertekstilan Indonesia  (API) hereinafter referred as  
"The Applicant ", against the importation of the product under inv estigation. After examining the 
properly documented application, the Investigating Authority concluded that there was a sufficient 
evidence to justify the initiation of a safeguard investigation.  
Subsequently, on 10 June 2020, the Investigating Authority i nitiated a safeguard investigation on 
the import of "Carpets and Other Textile Floor Coverings ". The commencement of the investigation 
was announced in the Bisnis Indonesia newspaper on 10 June 2020 and the Ministry of Trade's 
website on 12 June 2020. (G/S G/N/6/IDN/35) . 
2. Period of Investigation  
The period of investigation covers 2017 to 2019.  
3. Major Proportion  
The total production of the Applicant is 71.94% of the total domestic production of the Subject Good. 
Therefore, it represents a major proportion as re quired by Article 4.1(c) of the WTO Agreement on 
Safeguards.  G/SG/N/8/IDN/27 • G/SG/N/1 0/IDN/27  
 
- 2 - 
 
  Table 1. Major Proportion (2019)  
Companies  Propor tion (%) 
PT Universal Carpet &  Rugs 52.54 
PT Classic Prima Carpet Industries  15.26 
PT Velvet Tekstil Indonesia  2.17 
PT Anugerah Esa Mulia  1.31 
PT Admiralindo Bintang Terang  0.67 
Applicant's Proportion  71.94 
Non Aplicant's Proportion  28.06 
National Production  100 
4. Views and Comments of the Interested Parties  
In accordance with Article 3.1 of the WTO Agreement on Safeguards, during the process of 
investigation, the Investigating Authority has provided opportunities to all interested parties, to 
submit their views, evidences, comments, and responses concerning t he investigation. In light of 
the aforementioned, the Investigating Authority held public hearings on 20 July 2020.  
B. INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS OR AN 
INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION  
In the light to  provide evidence whether there is an absolute increase in imports or an increase in 
imports relative to domestic production, the Investigating Authority has analyzed import data of the 
Subject Goods during the period of investigation.  
1. Absolute increase in  imports  
Table 2. Import Quantities  
Description  Unit Year  Growth (%)  Trend %  
(2017 -
2019)  2017  2018  2019  2017 -
2018  2018 -
2019  
Import quantities  Meter2 13,867,411  18,170,721  21,748,204  31.03  19.69  25.23  
Source: Statistics Indonesia/Badan Pusat Statistik (BPS), processed.  
During the period of 2017 -2019 imports increased in absolute terms with a trend of 25.23 %. The 
import quantities  increased each year from 13,867,411 m2 in 2017 to 18,170,721 m2 in 2018 or  by 
31.03% and experienced another increase to 21,748,204 m2 or by 19.69 % in 2019.  
2. Relative increase in imports to Total Domestic Production  
Table 3. Import Quantities, Total Domestic Production, and Relative to Total Domestic 
Production  
Description  Unit Year  Growth (%)  Trend %  
(2017 -
2019)  2017  2018  2019  2017 -
2018  2018 -
2019  
Import quantities  Meter2 13,867,411  18,170,721  21,748,204  31.03  19.69  25.23  
Total Domestic 
Production  Index  100 103.24  95.98  3.24 (7.04)  (2.03)  
Imports Relative 
to the Domestic 
Production  Index  100 126.94  163.43  7.77 10.54  27.83  
Source:  Statistics Indonesia,  Ministry of Industry of the Republic of Indonesia , and as verified by Investigating 
Authority.  G/SG/N/8/IDN/27 • G/SG/N/1 0/IDN/27  
 
- 3 - 
 
  As seen in Table above, during  2017-2019 the imports relative to the national production increased 
with trend of 27.83 %. The import relative to the national production increased each year  from 
100 indexed points in 201 7 to 126.94  indexed points in 201 8, and continued to increase to 
163.43  indexed poi nts in 201 9. 
3. Imports from Main Countries  
Table 4. Imports Shares  
Country  2019  
Volume (Meter2) % 
People's Republic of China  13.795.446  63.43  
Turkey  4.167.254  19.16  
Republic of Korea  952.704  4.38 
Japan  807.595  3.71 
Other Countries  2.025.204  9.32 
Source: Statistics Indonesia/ Badan Pusat Statistik (BPS), processed.  
From the table above, the biggest shares of import in 2019 is the People 's Republic of China, which 
its shares of import accounted for 63.43%.  Other countr ies with share of imports above 3% during 
2018 are  Turkey (19.16% ), the Republic of Korea (4.38%), and Japan (3.71%).  
4. Unforeseen Development  
The increased imports of the Subject Goods from the exporting countries were unforeseeable. This 
is caused by  the trade war between US and China in 2018 and 2019 which made a  significant impact 
on the rapid supply of imported goods from China  to Indonesia , especially for textile derivative 
products  such as Carpets and Other Textile Floor Coverings. As a result of imposing high tariffs on 
these goods, producers in China diverted their exports unforeseeably from the US to other countries 
that have large markets, including  Indonesia  which has the largest market in the ASEAN , causing a 
surge increased in imports of Sub ject Good in Indonesia.  
Moreover, the weakening of the Turkish Lira against the United States Dollar was unexpectedly 
caused the export price of Carpet and Other Textile Floor Coverings from Turkey looks cheaper so 
that exports increased worldwide, one of which was exporting into Indonesia in large quantities and 
causing a surge increased in imports of Subject Good in Indonesia . 
C. EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED 
IMPORTS  
In a view to determine the existence of serious injury  or threat of serious injury that is caused by 
increased imports, the Investigating Authority has analyzed and made an evaluation of all relevant 
factors in an objective and quantifiable natures. The following analyses are based on data provided 
by the App licant, which has been verified by the Investigating Authority.  
1. Evidence of serious injury or threat of serious injury  
The general economic indicators related to Subject Goods in the safeguard investigation are 
presented at the table below.  G/SG/N/8/IDN/27 • G/SG/N/1 0/IDN/27  
 
- 4 - 
 
  Table 5. Nation al Consumption, Import Quantities , and Market Shares  
No. Description  Unit Year  Trend %  
(17-19) 2017  2018  2019  
1. National 
Consumption  Index  100 109.47  109.61  4.70 
2. Import quantities  M2 13,867,411  18,170,721  21,748,204  25.23  
3. Applicant's Domestic 
Sales  Index  100 93.57  91.07  (4.57)  
4. Non-Applicant's 
Domestic Sales  Index  100 117.09  102.99  1.49 
5. Imports ' market 
share  Index  100 119.70  143.07  19.61  
6. Applicant's market 
share  Index  100 85.48  83.09  (8.85)  
7. Non-Applicant's 
market share  Index  100 106.96  93.96  (3.07)  
Source: Statistics Indonesia and as verified by the Investigating Authority.  
Based on the table above, it can be concluded that during the investigation period the surge in 
market share of imports has eroded the domestic market share of both the Applicant and the 
Non-Applicant.  
From 201 7 to 201 9 national consumption has increased with a trend of 4.70% and import  quantities  
experienced a surge increase with a trend of 25.23 %. The increase in the imports of the 
Subject  Good resulted in a decline in the market share of the Applicant and Non -Applicant with a 
trend of 8.85% and 3.07%, respectively. Meanwhile, in the same period the market share of imports 
increased with a trend of 19.61%. 
Table 6. The Applicant's Indicators of Injury  
No. Description  Unit Year  Trend %  
(17-19) 2017  2018  2019  
1. Production  Index  100 101.21  86.88  (6.79)  
2. Domestic Sales  Index  100 93.57  91.07  (4.57)  
3. Productivity  Index  100 101.77  105.00  2.47 
4. Utilization Capacity  Index  100 89.34  76.69  (12.43)  
5. Profit/Loss  Index  100 59.88  43.29  (34.21)  
6. Employment  Index  100 99.45  82.74  (9.04)  
7. Inventory  Index  100 161.78  166.69  29.11  
Source: As verified by the Investigating Authority.  
As shown in Table above , the performance of the applicant can be seen as follows:  
a) Production experienced a decrease with a trend of 6. 79% from 100 indexed points in 201 7 
to 101.21  indexed points in 201 8 and decreased to 8 6.88 indexed points in 201 9. 
b) Domestic Sales decreased with a trend of 4.57% during 201 7-2019, from 100 indexed points 
in 201 7 to 93.57  indexed points in 201 8 and then decreased again to 91.07 indexed points 
in 201 9. 
c) Productivity in 201 7 was 100 indexed points, increased  to 101.77 indexed points in 201 8 
and experienced another increase to 105.00  indexed points in 201 9. During 201 7-2019 the 
applicant's productivity has increased  with a trend of 2.47% because the decline of the 
employment was larger than the decline of the production in t he same period.  G/SG/N/8/IDN/27 • G/SG/N/1 0/IDN/27  
 
- 5 - 
 
  d) Utilization capacity experienced a decrease during 201 7-2019 with a trend of 12.43 % from 
100 indexed points in 201 7 to 89.34  indexed points in 201 8 and 76.69  indexed points in 
2019. 
e) Applicant 's Profit  experienced a significant decrease duri ng 201 7-2019 with a trend of 
34.21 % from 100 indexed points in 201 7 to 59.88  indexed points in 201 8 and 43.29  indexed 
points in 201 9. 
f) The Applicant 's employment decreased by 9.04% from 100 indexed points In 201 7 to 
99.45  indexed points in 201 8 and 82.74  indexed points in 201 9. 
g) The Applicant 's inventory increased with a trend of 29.11 % from 100 indexed points in 201 7 
to 161.78  indexed points in 201 8 and 166.69  indexed points in 201 9. 
h) Based on the explanation above, it can be concluded that during the  investigation period, 
the Applicant experienced  a threat of  serious injury based on the Applicant 's performance 
that indicated a downward trend in production, domestic sales, utilization capacity, 
employment, profit , and increased inventory.  
2. Other Factors  That May Contribute to Injury  
In order to ensure that the serious injury or threat of serious injury is only caused by increased 
imports, the Investigating Authority has examined the following other known factors:  
a. Technology  
Based on the results of the in vestigation, the Applicant already has the latest  and modern  technology 
in producing the Subject Good. This argument is supported by the fact that the Applicant's machinery 
is able to produce sophisticated goods for the consumers. This shows that the threa t of a serious 
injury suffered by the Applicant is not caused by technology.  
b. Quality  
The quality of goods produced by the Applicant has met the local and international standards such 
as Halal Certificate; Health, Safety, Security and Environmental Standard s; ISO 9001:2015 
designing, manufacturing, and marketing of Carpet and Rugs; Carpet Tile Test Report; Carpet 
Tile/Tufted Test Report; and Carpet loop pile Test Report. Thus, in terms of quality, goods produced 
by the Applicant are able to compete with impo rted goods because they already met the 
internationally recognized standards.  
c. National Production Capacity and National Consumption  
Table 7. Portion of National Consumption to the National Production Capacity  
Unit: %  
Description  Year 
2017 2018 2019 
National Consumption to the National Production Capacity  60.60  57.84  57.92  
Source: Ministry of Industry of the Republic of Indonesia , processed . 
As shown in Table above , the national production  capacity is sufficient enough to meet the national 
consumption . In 2017 the national consumption  was 60.60% of the national production  capacity. 
Meanwhile, national consumption in 201 8 was 57.84% of the national production  capacity , and 
national consumption in 201 9 was 57.92% of the national production  capacity. 
Based on the facts of a) to c) above, it can be concluded that  during the period of investigation  there 
were no other factors that caused a threat of serious injury to the Applicant besides increased volume 
of imports of the Subject Goods.  G/SG/N/8/IDN/27 • G/SG/N/1 0/IDN/27  
 
- 6 - 
 
  3. Causal Li nk 
The Investigating Authority has examined all  relevant  factors having a bearing in the Applicant 
situation, and came into a conclusion that serious injury suffered by the Applicant mainly caused by 
significant increased volume of imports and not due to t he other factors, as follows:  
a. There was a surge increase of Subject Good in absolute terms in 201 7-2019 with a trend 
of 25.23 %. 
b. There was a surge increase of Subject Good in relative to domestic production in 
2017-2019 with a trend of 27.83 %. 
c. Imports ' market share has increased with a trend of 19.61 % in 201 7-2019. Conversely, 
the Applicant 's market share has decreased with a trend of 8.85% and the Non -Applicant's 
market share has also decreased with a trend of 3.07% during the same period . 
d. Downward trend in production, domestic sales, utilization capacity, employment, profit , 
and increased inventory.  
e. There were no other factors that caused a threat of serious injury to the Applicant besides 
increased volume of imports of the Subject Goods.  
D. DESCRIPTION OF THE PROPOSED SUBJECT GOODS  
Carpets and Other Textile Floor Coverings , under Harmonized System (HS.) code s 57. 
E. DESCRIPTION OF THE PROPOSED MEASURE  
In a view of the aforementioned findings, a safeguard measure has been proposed in form of  specific 
duty with HS codes, proposed date of introduction, and expected duration of the measure as follow:  
Table 8. The Proposed on Safeguard Measure  
Period  Specific Duty Safeguard Measures  
First Year  Rp. 85.679/meter2 
Second Year  Rp. 81.763/ meter2 
Third Year  Rp. 78.027/ meter2 
In a view of the aforementioned conclusion  of the causal link, the Investigating Authority has 
proposed to the Government of the Republic of Indonesia to impose a safeguard measure on the 
importation of the Subject Goods for three periods.  
The imposition of the safeguard measure will be carried ou t in accordance with the Article 2.2 and 
Article 9 of the WTO Agreement on Safeguards.  
The non -confidential version of the Final Report of this investigation, can be found in the website of 
the Indonesian Safeguard Committee: http://kppi.kemendag.go.id . 
F. PROVIDE PROPOSED DATE OF THE APPLICATION OF THE MEASURE  
The safeguard measure is proposed to enter into force after the publication of the decree of the 
Minister of Finance of the Republic of Indonesia, which wil l be promulgated at the Official Gazette.  
G. CONSULTATIONS  
Members who have a substantial interest of the Subject Goods , shall submit a written request of 
consultation within a period of 7 days from the date of circulation of this notification. All written  
requests must be sent both in written letter and in electronic format, and must indicate the name, 
address, e -mail address, phone and fax number of the Members.  G/SG/N/8/IDN/27 • G/SG/N/1 0/IDN/27  
 
- 7 - 
 
  In Accordance with Article 12.3 WTO Agreement on Safeguard, the Government of the Republic of 
Indonesia is open for consultation in order to provide opportunities for those Members, consultation 
is scheduled to be held no later than 16 October  2020.  
The contact information for correspondence is:  
DIRECTORATE OF MULTILATERAL NEGOTIATION, MINISTRY OF TRADE  
Jl. M.I. Ridwan Rais No.5, Building 2, 9th floor, Jakarta 10110  
Phone: (62 -21) 3840139  
Fax: (62 -21) 3840139  
E-mail: dit.multilateral.ppi@kemendag.go.id . 
 
__________