G/SG/N/6/MDG/3  
G/SG/N/7/MDG/3  
G/SG/N/11/MDG/3  
9 January  2019 
(19-0120) Page: 1/6 
Committee on Safeguards  Original:  French  
 
  
NOTIFICATION UNDER ARTICLE 12.1 (A) OF THE AGREEMENT ON  
SAFEGUARDS ON INITIATION OF AN INVESTIGATION  
AND THE REASONS FOR IT  
 
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON SAFEGUARDS  
BEFORE TAKING A PROVISIONAL SAFEGUARD MEASURE REFERRED  
TO IN ARTICLE 6  
 
NOTIFICATION PURSUANT TO  ARTICLE 9, FOOTNOTE 2  
OF THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
(Detergent Powder ) 
The following communication, dated 7 January 2019, is being circu lated at the request of the 
delegation of Madagascar.  
 
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Pursuant to Article 12. 1 and 12.4  of the Agreement on Safeguards, the Committee on Safeguards is 
hereby  notified of the initiation of a  safeguard  investigation on import s of detergent powder to 
Madagascar. It is being notified prior to the application of a provisional safeguard measure , as 
referred to in Article 6 of  the Agreement, to  imports of detergent powder to Madagascar. It is also  
hereby  notified, pursuant to Article 9, footnote 2, of the Agreement on Safeguards, of the decision 
not to apply the proposed safeguard measure to imports originating from developing countries.  
A. NOTIFICATION UNDER ARTICLE 12.1  (A) OF THE AGREEMENT ON S AFEGUARDS ON 
INITIATION OF AN INVESTI GATION AND THE REASONS FOR IT  
The domestic detergent powder industry filed a petition with the National Trade Remedies A uthority 
(ANMCC) , requesting  the application of a safeguard measure  pursuant to  Article XIX of GATT, the 
WTO Agreement on Safeguards  and Decree N o. 2017 -695 of 16 August 2017 establishing the 
applicable procedures for trade remedies.  
After reviewing the petition, the ANMCC decided to initiate a safeguard investigation on imports of 
detergent powder to Madagascar.  
1. Date of initiation  
The investigation was initiated on 31 December 2018,  on which  date the notice of initiation was 
published in two newspapers authorized to receive legal notices.  
2. Product under consideration  
The imported product under investigation is detergent powder for household or industrial use based 
on organic surface -active  agents intended for washing preparations, auxiliary washing preparations 
and cleaning preparations,  whether or not put up for retai l sale. Detergent powder i s imported to 
Madagascar under HS tariff codes 34021190, 34021290, 34021990 and 34022000.  G/SG/N/6/MDG/3 • G/SG/N/7/MDG/3 • G/SG/N/11/MDG/3  
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  3. Detergent powder exporting countries  
The main countries exporting detergent powder to Madagascar are China and Indonesia. In the past 
12 months, imports of detergent powder originating from these 2 countries accounted for 93 % of 
the total volume imported by Madagascar.  
4. Reasons  justifying  the initiation of the investigation  
The domestic detergent powder industry has provided evidence showing that imports of the product 
under consideration  increased both in absolute terms and relative to domestic production during  the 
period 2013 -2017. A 254 % increase has been recorded in the past four years , the period covered 
by the  investigation. This ri se in imports has had adverse consequences for the domestic producers 
of detergent powder, in particular for levels of production , market share, capacity utilization  and 
sales, and has caused losses to acc umulat e. 
The risk of a production stoppage by one of the two domestic producers  of detergent powder  is thus 
imminent . The a pplication of a safeguard measure will enable  the domestic industry to make the 
necessary adjustments  in terms of the competition it faces from imported detergent powder.  
5. Duration of the investigation  
The investigation will last for a period of 9 months and may be extended up to 12 months.  
6. Further  information  
Interested parties must make themselves known to the ANMCC, the investigating authority, within 
a period of 30 days after the initiation of the investigation.  
Any information or comments that interested parties may wish to submit to the ANMCC, and requests 
for questionnaires, should be submitted in writing to the address below within a period of 30 days 
after the initiation o f the investigation.  
The ANMCC may organize public hearings, either at the request of interested parties or ex officio , 
so as to enable interested parties to defend their interests.  
Replies to questionnaires and any relevant information to be submitted to the ANMCC must be sent 
to the ANMCC within a period of 30 Malagasy  working days after the initiation of the investigation.  
If the information requested from the interested parties within the framework of the investigation is 
not provided within the specifi ed time-frame, affirmative or negative determinations will be made 
on the basis of the best information available.  
7. Prior import declaration and authorization  
Pursuant to A rticle 14 of the a forementioned Decree and Order N o. 4412/2018 of 26 February 2018 , 
as ame nded and supplemented by Order N o. 28026/2018 establishing the forms and procedures for 
prior declaration and authorization to import products subject to a trade remedy investigation, a 
prior import declaration must be submitted to the ANMCC for all imports  of detergent powder made 
after the date of publication of this notice.  
Pursuant to Law No. 2014 -026 establishing general principles for the computerization of 
administrative  procedures , all prior import declarations are to be  processed online t hrough the 
MIDAC (Ministries, Departments and Control Agencies) System.  G/SG/N/6/MDG/3 • G/SG/N/7/MDG/3 • G/SG/N/11/MDG/3  
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  B. NOTIFICATION UNDER ARTICLE 12.4 OF THE  AGREEMENT ON SAFEGUARDS 
BEFORE TAKING A PROVISIONAL SAFEGUARD  MEASURE REFERRED TO IN 
ARTICLE  6 
1. PRODUCTS COVERED BY THE PROVISIONAL MEASURE  
The imported product covered by the provisional measure  is detergent powder for household  and 
industrial  use based on organic surface -active  agents intended for washing preparations, auxiliary 
washing preparations and cleaning preparations, whether or not put up for retail sale. Detergent 
powder is imported to Madagascar  under HS tariff codes 34021190, 34021290, 34021990 and 
34022000.  
2. PROPOSED PROVISIONAL SAFEGUARD MEASURE  
The provisional safeguard measure will take the form of a n additional duty to the ad valorem  customs 
duty, charged at a rate of 39% (thirty -nine per cent ) of c.i.f. value.  
3. PROPOSED DATE OF INTRODUCTION  OF THE SAFEGUARD MEASURE  
The provisional safeguard measure  will enter into force 15 days after the date of publication of the 
notice of application of the measure in two national newspapers authorized to receive legal notices.  
4. EXPECTED DURATION OF THE PROVISIONAL SAFEGUARD MEASURE  
The provisional safeguard mea sure will be applied for 200 days from the date of its entry into force.  
5. BASIS  FOR APPLICATION OF THE PROVISIONAL SAFEGUARD MEASURE  
Given  the critical circumstances in the domestic detergent powder industry , where  delay would  cause 
damage which it would  be difficult to repair, the ANMCC decided to introduce a provisional safeguard 
measure. This decision was taken on the basis of information furnished during  the investigation that 
was the subject of a verification visit and  of an  analysis of the statistic al data furnished by the 
Madagascar Customs Service. The ANMCC made the following preliminary determination:  
 
I. INCREASE IN IMPORTS  
1.1  Increase in imports in absolute terms  
Imports of detergent powder to Madagascar rose steadily and significantly between 2013 and 2 017. 
The volume imported in 201 7 was almost four times the volume imported in 2013. The most marked  
increase occurred  between 2015 and 2016 : in a period of just 12 months , the volume imported rose 
by 84% from 5,583 tonnes to 10,268 tonnes. The ch ange b etween the first 9 month s of 2017 and  
the first 9 months of 2018 was 2 6%. 
 
1.2  Increase in imports relative to domestic production  
Import  volume s greatly exceed domestic production, accounting for 99 % of the market in 2017. 
Furthermore, imports of deterg ent powder have risen exponentially relative to domestic production. 
Growth was 1,513 % in 2013 , rising to 8,828 % in 2017.  
 
II. SERIOUS INJURY OR THREAT THEREOF  
Data in relation to the petition concerning the injury suffered by the domestic industry  have revealed  
the following : 
 
i. Rate o f increase in im ports 
As noted  above, detergent powder was imported into Madagascar in greatly increased quantities, 
both in absolute terms and relative to domestic production, during the period under analysis.  
 G/SG/N/6/MDG/3 • G/SG/N/7/MDG/3 • G/SG/N/11/MDG/3  
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  ii. Share of domestic market taken by imports  
Change in market share  
  
2013  2014  2015  2016  2017  2018  
(Jan-Sept)  
Market share of domestically 
manufactured  products  6% 2% 2% 1% 1% 1% 
Market share of imported 
products  94% 98% 98% 99% 99% 99% 
 
Domestic production has only a minuscule share of the market and this s hare has been shrinking 
continuously  since 2013. At present, the domestic industry accounts for only 1 % of the detergent 
powder market , compared to 99% for imports . 
 
iii. Sales and inventory volumes  
Domestic industry  sales fell considerably  in 2014 relative to 2013 sales volumes . Despite a slight 
recovery  since 2015, annual sales remain well below the 2013 level. There was a marked build -up 
of inventory in 2015, coincident with the increase in production  in the same year.  
 
iv. Sales turnover  
The injury  suffered is proven in part by sales turnover , which dropped by around 37 % between 2013 
and 2017. A slight improvement was observed  in 2015 but its value was well below that of  2013.  
 
v. Domestic production  
Domestic production  declined  considerably during the period of analysis . In 2016, it slumped to just 
half the 2013 level. In April 2017, owing to the loss of market share occasioned by  the increase in 
imports, one of the two firms active in the domestic industry wa s forced to stop manufacturing 
detergent powder.  
 
vi. Employment and productivity  
Employment in the domestic industry decreased over the 2013 -2017 period . Current employment 
levels are not sustainable and there is no prospect of lost jobs being recovered  witho ut a change of 
circumstances . A significant decline in productivity has been observed in each period coinciding with 
a substantial increase in imports, especially in 2014 and 2016. Production volumes in these 
two years sank to the lowest level s recorded in the period of analysis.  
 
vii. Production capacity utilization  
 
2013  2014  2015  2016  2017  2018 (Jan -Sept) 
Production capacity 
utilization rate  32%  12%  17%  16%  19%  21%  
 
Except in 2013, the petitioners have not used even a quarter of their production capacity. While 
their production capacity utilization rate in respect of detergent powder was no higher than 32% in 
2013, it slumped to 12 % in 2014.  As in the case of sales turnover, a slight upturn was observed 
between 2015 and  2017, but the rates achieved  remain well below the 2013 level.  
 
viii. Cost prices, sale prices, profit and loss  
Sale prices were suppressed  throughout the period of analysis even though production  costs rose 
from 2014 onwards. Domestic producers  were unable to sell at above their manufacturing costs 
because the price of imported products  was too low. Their losses  therefore accumulated from 
one year to the next.  
 G/SG/N/6/MDG/3 • G/SG/N/7/MDG/3 • G/SG/N/11/MDG/3  
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  III. UNFORESEEN DEVELOPMENTS  
The increase  in production capacity and resulting excess of s upplies of detergent powder throughout 
the world, attributable principally to China and Indonesia, could not have been foreseen at the time 
of Madagascar's WTO accession and therefore constitute unforeseen development s, pursuant  to 
Article XIX of the GATT.  
 
Chinese exports of detergent powder remained  stable  between 2013 and 2017, but rose by around 
USD 100,000  in 2014 . However, this global trend does not reflect the market share of each importing 
country: some countries have seen a decline in imports while  others have seen a rise. Madagascar 
falls into the latter category. Essentially , the massive increase in imports of detergent powder to 
Madagascar is attributable to the fact that China targeted countries with lower import volumes in 
order to maintain or increase its global market share.  
IV. CAUSAL LINK  
In order to ascertain the existence of a causal link between the increased imports and the serious 
injury, and to make sure that  the serious injury suffered by the domestic industry is not caused by 
factors other  than the increased imports, the ANMCC analysed the effects of the following factors:  
4.1  Effect  of the increase in imports  
Imports of detergent powder have risen dramatic ally and drastically  since 2013 , as evidenced by 
their ever-increasing  share of the market. Imports accounted for 94 % of the domestic market in 
2013 and 99 % in 2018.  
In contrast to th is rise  in imports, domestic industry indicators – specifically, volume o f production, 
sales, production capacity utilization, employment, productivity and market share, among others – 
suffered a significant overall impairment in the period under investigation . It is important to 
emphasize the temporary coincidence between the increase  in imports and the impairment of 
domestic  industry indicators, which escalated  from 2013 onwards. This coincidence is a key factor , 
and attest s to the existence of a causal link between the  increase in imports and the serious injury 
suffered by the domestic detergent  powder industry.  
4.2  Effect of other factors  
i. Contraction in demand or changes in the patterns of consumption  
Throughout the period  of analysis, domestic consumption  of detergent powder increased steadi ly. 
However, sale s of domestically manufactured  products fell significant ly in 2014. Although sales 
edged up in the years that followed, they grew less rapidly than domestic consumption . It can 
therefore be concluded that the decline  in domestic industry sales is attributable not to a contraction 
in domestic demand but to the changing choices  of their customers, who are heavily influenced  by 
the low price of imported detergent powder.  
 
ii. Change in domestic prices and production costs  
Prices of products import ed to the domestic market have remained virtually unchanged for 
several  years , even though the local currency, the ariary, lost around 29 % of its value between 2013 
and 2017. The depreciation of the ariary should have had an impact on t he price s of importe d 
products , which should have increased , whereas in  fact they have remained st able since 2013. This 
indicates  that it is importers that have been  imposing their prices on the domestic market and forcing 
domestic producers to follow  suit in order to survive on the market. As a result, domestic producers' 
market share has been shrinking uninterruptedly and the financial losses they have suffered have 
increased from one year to the next.  
iii. Competition between domestic producers  
1. The output of the two petitioning firms that constitute the domestic detergent powder industry 
in Madagascar falls well short of national demand. Competition between the two firms is virtually 
non-existent  and, since one of the two halted  production in Apr il 2017, the domestic detergent 
powder industry in Madagascar now consists of just one firm. It can thus be immediately concluded 
that competition between domestic producers cannot be a factor in the injury suffered by the 
domestic industry.  G/SG/N/6/MDG/3 • G/SG/N/7/MDG/3 • G/SG/N/11/MDG/3  
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  iv. Technological development  
2. After verifying the production process, the ANMCC has been  able to con firm that the domestic 
industry has production  technology that is in line with international standards for the  produc tion of  
detergent powder and with the relevant  domestic technical regulations. Furthermore, new product 
lines have been developed and placed on the domestic market in recent years in order to attract 
consumers.  
CONCLUSION  
After assessing the various factors detailed above, the ANMCC has concluded that , as a result of 
unforeseen developments, detergent powder has been imported in such increased quantities that 
the increase has caused a significant overall impairment in the position of the domestic industry. 
The injury suffered by the domestic industry c annot be caused principally by other factors.  
6. OFFER OF CONSULTATIONS UNDER ARTICLE 12.4  
In accordance with Article 12.4 of the Agreement on Safeguards, Madagascar is prepared to hold 
consultations on the provisional safeguard measure with those Members having a substantial interest 
as exporters of the product concerned.  
7. FURTHER PROCEDURES  
The ANMCC will hold a public hearing with interested parties on 8 February 2019. Interested parties 
must express their interest in participating in the public hearin g. In addition, they m ust present their 
written submissions no later than ten days before the public hearing.  
8. FURTHER INFORMATION  
Information on the decision to apply the provisional safeguard measure to the products concerned  
and the broadening of the scope of the investigation may be ob tained from the websites of 
the ANMCC  (www.anmcc.mg ) and the Ministry of Trade and Consumption ( www.mcc.gov.mg ) or 
may be requested from:  
Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex conquête Antanimena BP: 7653  
Tél: +261 34 05  441 41 – Email: dg.anmcc@gmail.com  
101- ANTANANARIVO – MADAGASCAR  
Any correspondence concerning this investigation must be sent to the above address . 
C.  NOTIFICATION PURSUANT TO  ARTICLE 9, FOOTNOTE 2 OF THE AGREEMENT ON 
SAFEGUARDS OF THE DECISION NOT TO APPLY THE SAFEGUARD  
Below is the list of developing countries excluded from the provisional safeguard measure because 
their exports represent less than 3 % of Madagascar's total imports of detergent  powder and 
collectively account for not more than 9 %. (Article 9.1 of the Agreement on Safeguards)  
Afghanistan ; Albania ; Angola ; Antigua and Barbuda ; Argentina ; Armenia ; Bahrain ; Bangladesh 
Barbados ; Belize ; Benin ; Bolivia , Plurinational State  of; Botswana ; Brazil ; Brunei Darussalam ; 
Burkina  Faso; Burundi ; Cabo Verde ; Cambodia ; Cameroon ; Central African Republic ; Chad; Chile; 
Colombia ; Congo ; Costa Rica ; Côte d'Ivoire ; Cuba; Democratic Republic of the Congo; Djibouti ; 
Dominica ; Dominican Republic ; Ecuador ; Egypt ; El Salvador ; Eswatini ; Fiji; Gabon ; The  Gambia ; 
Georgia ; Ghana ; Grenada ; Guatemala ; Guinea ; Guinea -Bissau ; Guyana ; Haiti; Honduras ; India; 
Israel ; Jamaica ; Jordan ; Kazakhstan ; Kenya ; Kuwait ; Kyrgyz Re public; Lao People's 
Democratic  Republic; Lesotho ; Liberia; Malawi; Malaysia ; Maldives ; Mali; Marshall  Islands ; 
Mauritania ; Mauritius ; Mexico ; Moldova ; Mongolia ; Montenegro ; Morocco ; Mozambique ; Myanmar ; 
Namibia ; Nepal ; Nicaragua ; Niger ; Oman ; Pakistan ; Panama ; Papua New Guinea ; Paraguay ; Peru; 
Philippine s; Qatar ; Rwanda ; Saint Kitts and Nevis ; Saint Lucia ; Saint Vincent and the Grenadines ; 
Samoa ; Saudi Arabia ; Senegal ; Seychelles ; Sierra Leone ; Solomon Islands ; South Africa ; Sri Lanka ; 
Suriname ; Tajikistan ; Tanzania ; Thailand ; The former Yugoslav Republic of Macedonia; Togo; 
Tonga ; Trinidad  and Tobago ; Tunisia ; Turkey ; Uganda ; Ukraine ; United Arab Emirates ; Uruguay ; 
Vanuatu ; Venezuela , Bolivarian  Republic  of; Viet Nam ; Yemen ; Zambia ; Zimbabwe.  
 
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