G/SG/N/8/IDN/21  
G/SG/N/10/IDN/21  
 
7 February 2019  
(19-0717) Page: 1/7 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.1(B) OF TH E AGREEMENT ON  
SAFEGUARDS ON FINDIN G A SERIOUS INJURY O R THREAT  
THEREOF CAUSED BY IN CREASED IMPORTS  
 
NOTIFICATION OF A PR OPOSAL TO IMPOSE A MEASURE  
INDONESIA  
(Aluminum Foil ) 
The following communication, dated 5 February 2019 , is being ci rculated at the request of the 
Delegation of Indonesia.  
 
_______________  
 
Pursuant to Article 12.1(b) of the WTO Agreement on Safeguards, the Government of the  Republic 
of Indonesia, hereinafter referred as "GOI", hereby notifies to the Committee on Safeguards on its 
findings of serious injury or threat thereof caused by the increased imports.  
 
1  GENERAL BACKGROUND  
1. Initiation of Investigation  
 
On 3 October 2018, KPPI (Komite Pengamanan Perdagangan Indonesia /Indonesian Safeguards 
Committee)  hereinafter referred as the "Investigating Authority ", received an application from 
Indonesian Aluminum Extruders, Plate, Sheet, and Foil Association (Asosiasi Produsen Aluminium 
Extrusi Serta Aluminium Plate, Sheet & Foil/ APRALEX -Sh & F)  hereinafter referred as the Applicant, 
requested for the imposition of a safeguard measure on the importations of  Aluminum foil  (whether 
or not printed, not backed  with paper, paperboard, plastics, or similar backing materials ) of a  
thickness not exceeding 0,2 mm,  under HS. codes 7607.11.00 and 7607.19.00.  
 
Based on the examination of the above -mentioned application, the investigating authority initiated 
a safeguard in vestigation on 9 October 2018. The initiation of the investigation was published in the 
national daily newspaper ( "Bisnis Indonesia "), and  Ministry of Trade website. The said initiation was 
also notified in the WTO document G/SG/N/6/IDN/29, circulated on 1 2 October  2018.  
 
2. Period of Investigation  
 
The period of investigation covers 2015 to 2017 . 
 
3. Major Proportion  
 
The total production of the Applicant is 96.2% from total domestic production of the Subject Good s, 
therefore it represents a major proporti on as required by Article 4.1(c) of the WTO Agreement on 
Safeguards.  
 
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 the investigation . In light of 
the aforementioned, the Investigati ng Authority has held public hearing on 29 October  2018.  G/SG/N/8/IDN/21 • G/SG/N/10/IDN/21  
 
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5. Subject Good s 
 
The description of the Subject Good s under Article 12.1(a), has been modified and narrowed down 
based on the result of the investigation. The result of investigation has proved tha t only imported 
aluminum foil with aluminum (Al) content ≥ 97,5%, which has similarities with aluminum foil 
produced by the Applicant. In addition to that, based on its characteristics, materials, 
standardization, and use of the product, this imported prod uct is a like product  with aluminum foil 
produced by the Applicant. Meanwhile, during period of investigation the Applicant did not produce 
aluminum foil with Al content < 97,5%, which is used as materials for automobile's spare parts 
industry, so it is excluded from the scope of Subject Good s. 
 
Furthermore, aluminum foil that is produced by the Applicant is not a like product or a directly 
competitive product with imported product under HS. code 7607.19.00. Due to the Applicant did not 
produce aluminum f oil with further processing (coating, cladding, coloring, and printing) during 
investigation period, so it is excluded from the scope of Subject Goods.  
 
Thus, the  scope of the Subject Goods becomes  as follows:  
 
"Aluminum foil (whether or not printed or not backed with paper, paperboard, plastics or similar 
backing materials) with a thickness (excluding any backing) not exceeding 0.2mm, rolled but not 
further worked, with aluminum content ≥ 97 .5%", under Harmonized System (HS.) Code:  
Ex. 7607.11.00.   
 
2  INFORMATION ON WHETH ER THERE IS AN ABSOL UTE INCREASE IN IMPO RTS 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 produ ction, the Investigating Authority has analyzed import data of the 
Subject Goods during the period of investigation.  
 
1. Absolute increase in imports  
Table 1 . Volume of Imports  
Description  Unit Year 
2015  2016  2017  
Volume  of Imports HS. 
Ex. 7607.11.00  Ton 19.438  25.252  30.647  
Growth  % - 29.9 21.4 
Trend (2015 -2017)  % 25.6 
 Source: Statistics Indonesia/ Badan Pusat Statistik (BPS) . 
 
It can be seen from the table above, import volume of the Subject Goods increased in absolute 
terms with a trend of 25 .6%, during the period of investigation. The import was keep increasing 
from 2015 to 2017, and the biggest increased was in 2016 with a growth of 29.9% . 
 
2. Relative increase in imports to Total Domesti c Production  
Table 2 . Volume of Imports, Total Domestic  Production, and Relative to  
Total Domestic Production  
Description  Unit Year 
2015  2016  2017  
Volume  of Imports  
HS. Ex. 7607.11.00  Ton 19.438  25.252  30.647  
Total Domestic Production  Index  100 103 91 
Relative to Total Domestic Production  Index  100 126 173 
Trend (2015 -2017)  % 31.7 
Source: Statistics Indonesia and as verified by Investigating Authority . G/SG/N/8/IDN/21 • G/SG/N/10/IDN/21  
 
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  Based  on the Table 2, imports relative to domestic production have also increased significantly. It 
increased sharply by 2 6 index points in 2016 compared to 2015, and in 2017 increased by 4 7 index 
points compared to 2016. Th us, th ere has been a constant increase in imports relative to domestic 
production during the period of investigation  with a trend of 31.7% . 
 
3. Imports fro m Main Countries  
Table 3 . Imports Shares  
 Unit: %  
Country  Year 
2015  2016  2017  
People's Republic of China (PRC)  88.5 90.3 92.4 
Republic of Korea  10.8 9.0 7.1 
Others  0.7 0.7 0.5 
 Source: Statistics Indonesia/ Badan Pusat Statistik (BPS) . 
 
From the table above, the biggest shares of import from 2015 to  2017 in the domestic market  was 
PRC, which its shares of import in 2017 accounted for 9 2.4%. Other country that has share of 
imports above 3% during period of investigation, is Republic of Korea, which its shares of import 
in 2017 was 7.1%.  
 
3  EVIDENCE OF SERIOUS INJURY OR THREAT THE REOF CAUSED BY INCRE ASED IMPORTS  
In a view to determine the existe nce 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 objective and quantifiable nature s. The following analyses  are based on data p rovided by 
the Applicant , which has been verified by the Investigating Authority . 
 
1. Evidence of serious injury or threat of serious injury  
Table 4 . National Consumption, Volume  of Imports, and Market Shares  
N
o. Description  Unit Year Trend  
2015 -
2017  
(%) 2015  2016  2017  
1. National Consumption   Index  100 112 112 5.9 
2. Volume  of Imports  Ton 19.438  25.252  30.647  25.6 
3. Applicant's Domestic Sales   Index  100 102 74 (13.9) 
4. Non-Applicant's Domestic Sales   Index  100 48 32 (43.4) 
5. Imports ' market share  Index  100 116 140 18.5 
6. Applicant's market share  Index  100 91 66 (18.7) 
7. Non-Applicant's market share  Index  100 43 29 (46.6) 
Source: Statistics Indonesia and as verified by the Investigating Authority . 
 
a) It can be seen from Table 4 that the Subject Goods ' national consumption increased during 
the investigation period with a trend of 5.9%. However, the increased of national consumption in 
that period could not be utilized by the Domestic Industries, either the Applicant  or Non -Applicant,  
as their domestic market share was taken  by import goods. This is shown by decreasing market 
shares in both Applicant and Non -Applicant from 2015 to 2017 with trend of -18.7% and -46.6% 
respectively, while share of imports were increasing in the  same period, with a trend of 18.5%.  
 
b) The Applicant 's domestic sales declined during the investigation  period  due to the pressure of 
imports, in  a trend of -13.9% . In the same period, the sales of Non -Applicant  Domestic Industry 
also decreased significa ntly in a trend of -43.4%.  
 G/SG/N/8/IDN/21 • G/SG/N/10/IDN/21  
 
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  Table 5 . The Applicant 's Indicators of Injury  
Unit: Index  
No Description  Year Trend  
2015 -2017  
(%) 2015  2016  2017  
1. Domestic Sales  100 102 74 (13.9) 
2. Production  100 110 98 (1.0) 
3. Productivity  100 111 100 (0.2) 
4. Capacity Utilization  100 110 98 (1.0) 
5. Profit/Loses  (100)  (77) (130)  15.2 
6. Employment  100 99 98 (0.8) 
Source: As verified by the Investigating Authority . 
 
As shown in Table 5, the performance of the applicant can be seen as follows:  
 
a) The Applicant 's domestic sales decreased with a trend of -13.9% because of the increased of 
imports in the domestic market.  Because t he Applicant produces the Subject Goods by order,  thus 
the decrease in sales will affect its production in a negative direction . This was what happened during 
the investigation period, wherein Applicant 's domestic sales and production had the same pattern of 
trend (negative trend) . 
 
b) The decreased of Applicant 's production in 2016 -2017 impacted its productivity in the same 
period, which was also decreasing by 11 index points. In addition to that, the decreased of its 
production led to inefficient employment, which forced the Applicant to cutdown number of its 
employees.  
 
c) Although the Applicant 's capacity utilization increased in period of 2015 -2016, the capacity 
utilization in period of 2016 -2017 were decreased into lower point than in 2015, which made 
negative trend of Applicant 's capacity utilization during period of investigation.  
 
d) During investigation period, t he Applica nt suffered a decreasing  profits with a trend of 1 5.2% 
as a result of the decrease d in its domestic sales.  Besides, the increased of imports had forced  the 
Applicant to sell its product under cost of production.  
 
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) Export performance  
Table 6 . Shares of Aplicant 's Export Performance  from Total Sales  
 Unit: % 
Indicators  Year 
2015  2016  2017  
Domestic sales Proportion  87,8 81,4 66,3 
Export sales Proportion  12,2 18,6 33,7 
 Source: As verified by the Investigating Authority . 
 
It can be seen from Table 6 that the portion of the Applicant 's export sales were only 12,2% -33,7%  
during investigation period. The increased of export sales were in consequence of the decreased in 
domestic sales performance because of imports. I t can be concluded that the Applicant 's export 
sales performance  were not effecting their decreasing profits .   
 
b) Technology  
 
The Applicant has an adequate technology to produce the Subject Goods, with various kind of 
thickness, width, inner diameter, and surface . The Applicant 's products and production m ethod  are G/SG/N/8/IDN/21 • G/SG/N/10/IDN/21  
 
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  based on international standard, namely American Society for Testing and Materials  (ASTM) 
International. It can be inferred that technology was not a factor that caused injury to the Applicant.  
c) Competition Between Domestic Industries  
 
Table  7. Shares of Aplicant 's Export Performance  from Total Sales  
 Unit: Index  
Indicators  Year Trend  
2015 -2017  
(%) 2015  2016  2017  
Imports ' market share  100 116 140 18,5 
Applicant's market share  100 91 66 (18,7)  
Non-Applicant's market share  100 43 29 (46,6)  
 Source: As verified by the Investigating Authority . 
 
It can be seen from the table above that during period of investigation both Applicant and Non -
Applicant had decreasing trend of market shares . This circumstance indicated that there was no 
competition  between domestic industries (either the Applicant or Non -Applicant), which were causing 
injury during investigation period.  
 
Based on the facts above, it can be concluded that  during the period of investigation  there were no 
other factors that caused serious injury to the Applicant besides increased volume of imports of the 
Subject Goods.  
 
3. Causal Link  
 
The Investigating Authority has examined all  relevant  factors having a bearing in the Applicant 
situation, and came into a conclusion that serious in jury suffered by the Applicant mainly caused by 
significant increased volume of imports and not due to the other factors, as follows:  
 
a) There was an increased of imports of the Subject Goods  in absolute and relative terms,  during 
investigation period as shown in Table 1.  
 
b) During investigation period,  the national consumption increased with a trend of 5.9%. 
However,  this situation could not be utilize d by the Applicant as  imports had surged the domestic 
market . 
 
c) The share of imports increased by 1 8.5% in the domestic market throughout the period of 
investigation . On the other hand , the Applicant 's and Non -Applicant 's domestic market shares 
decreased with a trend of 18.7%, during the same period.  
 
d) During investigation period,  there were negative tr ends in the Applicant 's performances, such 
as domestic sales, production, productivity, capacity utilization, and employment. Moreover , the 
Applicant 's financial losses showed an increasing trend, with a trend of 15.2%, which showed overall 
impairment in t he Applicant 's performance or serious injury suffered by the Applicant.  
 
e) Based on analysis on C.2, it can be  concluded that there were no factors other than increased 
imports, which were causing the decrease on the Applicant 's performances.  
 
Based on  the conditions above, the Investigating Authority has examined all relevant factors in 
accordance with the Agreement on Safeguards, Article 4.1 and 4.2, and it can be concluded that the 
increased imports have caused a serious injury on the Applican t or domestic industries. No factors 
other than increased imports, which has caused injury to the domestic industries.  
 
4  UNFORESEEN DEVELOPME NT 
The increased imports of the Subject Goods from the exporting countries could not be foreseen, 
based on the following an alysis:  
 
The increased imports of the Subject Goods from the exporting countries was unforeseeable, this is 
explained as follows:  G/SG/N/8/IDN/21 • G/SG/N/10/IDN/21  
 
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a) Anti-dumping and anti -circumvention investigations , which  carried out by Turkey, the 
European Union and India on the imports of aluminum foil from China in 2015 -2017, led to China 's 
exports  diversion  from these countries  to Indonesia . Although the  imposition of these trade remedies 
measures  became effective in 2017, there ha d been a "Chilling Effect " from the initiat ion of the 
investigation in th ose countr ies in the period  of 2015-2016.  
 
b) There were increased of production and production capacity of aluminum foil in China , which 
could not wholly absorbed by its domestic market. This situation made the increased of China 's 
exports of aluminum foil to the rest of the world including Indonesia.   
 
It can be inferred t hat the imposition of anti -dumping duties on Chinese aluminum foil producers, 
an increase d of aluminum foil production, and production capacity in China were situation s that 
cannot be predicted and cannot be anticipated beforehand. Th ese situation s were the reason for the 
significant diversion  of China 's aluminum foil exports to Indonesia , which caused a significant 
increase of imported aluminum  foil in Indonesia .  
 
5  DESCRIPTION OF THE P ROPOSED SUBJECT GOOD S 
As mentioned in A.5, the description of the Subject Goods under Article 12.1 (a), had been 
modified and narrowed down based on the result of the investigation . Thus, the product that 
is proposed to be imposed by safeguard  measure, becomes  as follows:  
 
"Aluminum foil (whether or not printed or not backed with paper, paperboard, plastics or similar 
backing materials) with a thickness (excluding any backing) not exceeding 0.2mm, rolled but not 
further worked, with aluminum content ≥ 97 .5%", under Harmonized System (HS.) Code:  
Ex. 7607.11.00.   
 
6  DESCRIPTION OF THE P ROPOSED MEASURE  
In a view of the aforementioned findings, a s afeguard measure has been proposed in form of ad 
valorem  tariff duty:  
Table  8. The Proposed on Safeguard Measure  
Year Measure (%)  
Year 1  22 
Year 2  18 
Year 3  14 
 
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 a period of three years.  
 
The imposition of the safeguard measure will be  carried out 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: www.kppi.kemendag. go.id 
 
7  PROVIDE PROPOSED DAT E OF THE APPLICATION  OF THE MEASURE  
Not Applicable.  
 
8  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 circulatio n 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/21 • G/SG/N/10/IDN/21  
 
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  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 2 0 February 2019.  
The contact information for correspondence is:  
 
DIRECTORATE OF MULTILATERAL COOPERATION, 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.multirateral.ppi @kemendag.go.id  
 
 
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