G/SG/N/7/MAR/3  
G/SG/N/11/MAR/3  
22 October 2014  
(14-6095)  Page: 1/8  
Committee on Safeguards  Original: French  
 
  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 
MOROCCO  
(Cold-Rolled Sheets in Coils or Cut, and Plated or Coated Sheets ) 
The following communication, dated 17 October 2014, is being circulated at the request of the 
delegation of Morocco.  
_______________ 
 
 Pursuant to Article 12.4 of the Agreement on Safe guards, Morocco hereby submits its notification 
before taking a provisional safeguard measure referred to in Article 6. 
 1  BACKGROUND 
As stated in WTO document G/SG/N/6/MAR/8, dated 17 June 2014, a safeguards investigation on 
cold-rolled sheets and plated or coated sheets was initiated on 11 June 2014. This investigation was launched following the receipt on 24 April 2014 by the Ministry of Foreign Trade, hereinafter referred to as the "MDCCE", of a petition filed by the company Maghreb Steel, on behalf of the 
domestic industry for cold-rolled sheets and plat ed or coated sheets, for the application of 
safeguard measures to imports of cold-rolled sheets and plated or coated sheets.  
2  PRODUCT SUBJECT TO THE PROPOS ED PROVISIONAL SAFEGUARD MEASURE 
The products under investigation are cold-rolled sheets in coils or cut, and plated or coated sheets, 
all of which belong to the family of flat steel products. 
 
The flat steel sheets under investigation are imported into Morocco under the following HS tariff headings:  
Cold-rolled sheets : 7209, 7211 (with the exception of 7211.13, 7211.14 and 7211.19), 7225 
and 7226. 
Plated or coated sheets : 7210 (with the exception of 7210.11, 7210.12, 7210.90.21.00, 
7210.90.22.00 and 7210.90.23.00), 7212 (with the exception of 7212.10), 7225 and 7226. 
 3  PROPOSED PROVISIONAL SAFEGUARD MEASURE 
It is proposed to impose a provisional safeguard measure in the form of an additional ad valorem  
duty of 25%.  4  DATE OF INTRODUCTION OF TH E PROVISIONAL SAFEGUARD MEASURE 
The provisional safeguard measure will enter into force on the date of publication, in Morocco's 
Official Journal, of the joint order imposing the measure. G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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5  EXPECTED DURATION OF THE PROVISIONAL SAFEGUARD MEASURE 
The provisional safeguard measure will apply for 200 days as from the date of its entry into force. 
 
6  THE BASIS FOR: 
i. Making a preliminary determination, as provided for in Article 6, that increased 
imports have caused or are threatening to cause serious injury. 
INCREASED IMPORTS 
 Import trends in absolute and relative terms  
In absolute terms, imports of cold-rolled sheets grew by roughly 100% in 2012 in comparison with 
2011 and by 89% in 2013 in relation to 2012, while imports of plated or coated sheets saw an increase of 77% in 2012 over 2011, and a slight decline in 2013. These imports continued to 
advance in the period January to April 2014 compared to the corresponding period in 2013, with 
cold-rolled sheets up 47% and plated or coated sheets up 113%.  
In terms  relative to domestic production, imports of cold-rolled sheets have followed an upward 
trend, climbing 182% in 2012 in relation to 2011 and recording an advance of 187% during the period January to April 2014 as compared with the same period in 2013. Imports of plated or coated sheets increased 94% in 2012 over 2011 and surged 243% in the period January to 
April 2014 in relation to the same period in 2013. 
 
Table 1: Imports of cold-rolled sheets and plated or coated sheets  
 
Index: 2010 = 100; 2013 (Jan.-April) =100 
Imports 2010 2011 2012 2013 2013 
(Jan.-
April) 2014 
(Jan.-
April) 
Imports 
(tonnes) Cold-rolled sheets 17,291 21,573 43,102 81,630 24,590 36,189  
Plated or coated 
sheets 24,195 26,441 46,912 46,647 11,431 24,366  
Imports / 
Production 
(%) Cold-rolled sheets 100 107 305 755 100 287  
Plated or coated 
sheets 100 102 204 215 100 348  
Source: Data compiled from Fore ign Exchange Board statistics. 
 
The MDCCE  finds that imports of the sheets under investigation have indeed undergone a 
substantial increase as of 2012 in both absolute and relative terms. As regards the rate of change, 
the increase in imports was sharp, sudden and unexpected. 
 The MDCCE therefore considers that imports of th e sheets under investigation have experienced a 
massive increase within the meaning of Article 52 of Law No. 15-09, Article 43 of its implementing 
decree and Article 2 of the WTO Agreement on Safeguards.  
 UNFORESEEN DEVELOPMENTS 
 
In accordance with Article XIX:1(a) of the GA TT 1994 (which is an integral part of the WTO 
Agreement), the MDCCE examined the data su bmitted by Maghreb Steel on the unforeseen 
developments relating to imports of the sheets under investigation along with other data that 
became available during the investigation.  
The unforeseen developments are described in the investigation initiation report, supported by 
references
1 attesting to the existence of such developments. 
                                               
1 The articles and report are ava ilable for consultation online at: G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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The data reveal that the massive increase in imports is a result of the unforeseen effects of the economic and financial crisis that hit the European countries which export to Morocco, in particular the fall in demand, over-capacity levels and accumulation of inventories attributable to the crisis in 
the steel sector, the duration and consequences for the domestic industry of which were 
completely unexpected.  
According to Maghreb Steel, in spite of adjustments, European steel producers are suffering from 
excess production capacity, a situation compounded by the increase in production capacity in Asian countries.  
Furthermore, Maghreb Steel confirms that the Moroccan steel industry could not have foreseen the 
duration of the crisis, the detrimental effect that this crisis would have on European countries or the indirect repercussions of this crisis on countries, such as Morocco, that were not themselves 
affected by the global crisis, in particular in relation to the volume of imports coming from 
European countries and the price of these imports. Imports have therefore increased as a result of 
a whole series of unforeseen developments. 
 
In addition to the above, it should be noted that, following the application by Morocco of an anti-dumping measure to hot-rolled sheets, the manufacturers of these sheets unexpectedly substituted hot-rolled sheets with cold-rolled sheets for certain uses, which triggered a sharp rise 
in imports of cold-rolled sheets. This situation, which had not been anticipated by the domestic 
industry, contributed to the increase in imports in the most recent period.  
In view of the foregoing, the MDCCE has made a preliminary determination that imports of 
cold-rolled sheets and plated or coated sheets expe rienced abnormally high growth as a result of 
unforeseen developments. 
 
SERIOUS INJURY OR THREAT THEREOF  Pursuant to the relevant provisions of the Agreement on Safeguards, in particular Articles 2.1, 
4.1(a) and 4.2(a), and as part of the investigation, the MDCCE analysed the development of the 
following factors: 
                                                                                                                                               
http://ec.europa.eu/enterprise/sectors/metals-minerals/files/steel-action-plan_fr.pdf ; 
http://indices.usinesnouvelle.com/produits-siderurgiques/la-siderurgie-mondiale-toujours-en-
surcapacité.4952 ; 
http://www.lemonde.fr/economie/article/2013/09/09/ en-europe-l-industrie-automobile-pense-avoir-
passe-le-gros-de-crise_3473251_3234.html ; 
http://indices.usinenouvelle.com/produits-sideru rgiques/toujours-plus-d-acier-dans-le-monde.4961 ; 
http://www.usinenouvelle.com/article/a-fos-le-nouveau-souffle-d-arcelormittal.N241291 . G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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  Table 2: Overview of indicators to ev aluate the injury caused by imports 
of cold-rolled sheets and of plated or coated sheets 
 
Index: 2010 = 100; 2013 (Jan.-April) = 100 
 2010 2011 2012 2013 2013 
(Jan.-
April) 2014  
(Jan.-
April) 
Imports 
(tonnes) Cold-rolled sheets 17,291 21,573 43,102 81,630 24,590 36,189  
Plated or coated sheets 24,195 26,441 46,912 46,647 11,431 24,366  
Imports / 
Production (%) Cold-rolled sheets 100 107 305 755 100 287 
Plated or coated sheets 100 102 204 215 100 348 
Market share of imports (%) 100 107 180 214 100 116 
Production Cold-rolled sheets 100 117 82 63 100 51 
Plated or 
coated 
sheets Galvanized 
sheets 100 103 81 74 100 54 
Pre-lacquered  
sheets 100 112 116 113 100 70 
Production 
capacity 
(tonnes) Cold-rolled sheets 100 100 100 100 100 100 
Plated or coated sheets 100 100 100 100 100 100 
Capacity 
utilization rate Cold-rolled sheets (%) 100 109 92 84 100 60 
Plated or coated sheets  
(%) 100 107 95 90 100 62 
Productivity (tonnes/employee) 100 107 95 98 100 61 
Sales (tonnes) Cold-rolled sheets 100 104 66 50 100 128 
Plated or 
coated 
sheets Galvanized 
sheets 100 106 88 80 100 122 
Pre-lacquered  
sheets 100 101 83 97 100 63 
Sales (DH 
thousand) Cold-rolled sheets 100 116 70 51 100 128 
Plated or 
coated 
sheets Galvanized 
sheets 100 108 83 76 100 129 
Pre-lacquered  
sheets 100 108 85 100 100 62 
Inventories 
(tonnes) Cold-rolled sheets 100 265 161 107 100 45 
Plated or 
coated 
sheets Galvanized 
sheets 100 133 79 76 100 65 
Pre-lacquered  
sheets 100 134 82 155 100 125 
Price 
(DH/tonne) Cold-rolled sheets 100 112 106 103 100 100 
Plated or 
coated 
sheets Galvanized 
sheets 100 102 94 95 100 105 
Pre-lacquered  
sheets 100 107 102 103 100 98 
Cost (DH/tonne) Cold-rolled sheets 100 121 118 112 100 99 
Plated or 
coated 
sheets Galvanized 
sheets 100 118 115 110 100 98 
Pre-lacquered  
sheets 100 117 119 113 100 98 
Results Cold-rolled sheets 100 -308 -274 -131 100 102 
Plated or 
coated 
sheets Galvanized 
sheets 100 34 6 25 100 500 
Pre-lacquered  
sheets 100 64 26 61 100 64 
Profitability Cold-rolled sheets 100 -265 -393 -255 100 79 
Plated or 
coated 
sheets Galvanized 
sheets 100 31 7 33 100 389 
Pre-lacquered  
sheets 100 59 31 61 100 104 
Employment (persons) 100 101 98 86 100 97 
Source: Data compiled on the basis of Foreign Exchange Board statistics and investigation questionnaire 
responses by Maghreb Steel. 
 G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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  (1) Rate and amount of the increase in imports: As outlined above, imports of cold-rolled 
sheets and plated or coated sheets have seen a ma ssive increase as of 2012 in both absolute and 
relative terms. This increase was even more marked in the period January to April 2014 compared with the same period in 2013. 
 
(2) Market share of imports: The market share of imports of cold-rolled sheets and plated or 
coated sheets has significantly increased. 
 
(3) Sales and turnover: Domestic industry sales volumes declined in 2012 and 2013. In spite of 
a slight rebound, sales remained at a relatively low level in the period January to April 2014 in comparison with 2010 and 2011. 
 
(4) Domestic industry production: Investigation data reveal that Maghreb Steel's production of 
the sheets under investigation has suffered a serious decline as of 2012 and shrank 40% in the 
period January to April 2014 compared with the same period in 2013. Production of cold-rolled 
sheets fell 49%, while production of plated or coated sheets was down 38%. These recent drops in output are triggered by the massive volume of imports that have pursued an upward trend and the 
increasingly significant market  share captured by imports. 
 (5) Productivity and employment: The domestic industry's productivity per employee declined 
12% from 2011 to 2012, increasing slightly in 2013 before once again falling 39% in the period 
January to April 2014 in relation to the same period  in 2013. As a result of this downward trend, 
domestic industry employment levels had to be reduced in 2013 (106 people or 12% of the workforce). 
 
(6) Production capacity and rate of capacity utilization: The production capacity utilization 
rate has fallen as of 2012. This decline continued during the period January to April 2014 for both 
cold-rolled sheets and plated and coated sheets.  
 (7) Inventories: Accumulated inventory levels were recorded at year-end  2011 and these surplus 
inventories have incurred major logistics and financial costs for the company. In an endeavour to 
prevent stock surpluses, the company Maghreb Steel scheduled production stoppages in 2012 and 
2013 and, when the situation continued to deteriorate, took the decision to downsize its workforce (see employment trends). 
 
(8) Sales prices and production costs: Maghreb Steel's sales prices for both cold-rolled sheets 
and plated or coated sheets were reduced as of 2012. In spite of cutting cold-rolled sheet costs, 
trends in margins were worryingly weak from 2011 to 2012 as a result of the combined effect of 
declining operating margins and falling sales volumes. Efforts to contain costs and cut the workforce pushed gross operating margins back  up in 2013 although they remain below 2010 
levels. Such a situation jeopardizes the company's financial equilibrium. 
 
(9) Profitability: The profitability of the domestic industry, especially in relation to cold-rolled 
sheets, has gradually deteriorated since 2011. 
 
Conclusion on injury  
In the light of its review of preliminary investigation data on factors contributing to the injury 
suffered by the domestic industry for cold-rolle d sheets and plated or coated sheets, the MDCCE 
finds that Maghreb Steel has experienced a general decline in its indicators.  
The MDCCE's preliminary finding is therefore that the domestic industry for cold-rolled sheets and 
plated or coated sheets has suffered serious injury as defined in Article 53 of Law No. 15-09 and Article 4 of the WTO Agreement on Safeguards. 
 
CAUSAL LINK  
In accordance with the requirements of Article 4.2(b) of the Agreement on Safeguards, the MDCCE 
examined the correlation between the increased im ports and the injury suffered, as well as the 
effects of factors other than increased imports that may have caused injury to the domestic industry. 
 G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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  (1) Effect of increased imports 
 Imports of cold-rolled sheets and plated or coated  sheets experienced abnormally high growth in 
the first four months of 2014 compared with the same period in 2013, in both absolute and 
relative terms. 
 This increase in imports has resulted in the abso rption of a market share far greater than was the 
case for imports prior to 2012. 
 As a result of this upsurge in imports, the domestic industry has suffered serious injury, as illustrated by the general decline in its indicators. 
 
In this respect, it is important to emphasize the temporal coincidence between the increased imports and the weakening of domestic industry indicators. This coincidence is a key factor in 
determining the existence of a causal link be tween the increased imports and the injury. 
 (2) Effect of other factors 
 
a. Trends in domestic consumption 
Domestic consumption of cold-rolled sheets and plated or coated sheets has shown an upward 
trend. Consumption in fact grew by 19% between 2012 and 2013, a period in which the MDCCE 
noted that the domestic industry had suffered serious injury. Consumption rose around 45% from 
January to April 2014 as compared with the same period in 2013.  
The MDCCE therefore considers that the injury caused to the domestic industry cannot be 
attributed to a contraction in demand.  
Table 3: Trends in domestic consumption 
 
Index: 2010 = 100; 2013 (Jan.-April) = 100 
 2010 2011 2012 2013 2013 
(Jan.-
April) 2014 
(Jan.-
April) 
Cold-rolled sheets 100 112 135 208 100 144 
Plated or coated sheets 100 106 114 113 100 145 
TOTAL 100 108 121 144 100 145 
Source: Calculations based on investigation data. 
 
b. Competition between domestic and foreign producers 
Maghreb Steel's activities are not affected by competition from local producers given that it is the 
only domestic producer that supplies the local market with cold-rolled, galvanized and pre-lacquered sheets.  
With regard to competition from foreign suppliers, the company is adversely affected by the 
massive influx into Morocco of steel products at lower prices.  
c. Technological development 
Maghreb Steel's responses to the investigation questionnaire show that the company is equipped 
with recognized reference technological machines and tools and that the technology used ensures 
that its production of steel sheets meets quality standards and international standards. 
 Over the past few years, Maghreb Steel has adopted an investment policy geared towards the manufacture of value-added products, such as galv anized and pre-lacquered sheets. To this end, 
the company has made a number of investments to strengthen its industrial facilities: 
 
 Launch of its second galvanization line in 2003; G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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   Renovation in 2004 of the first galvanization and pre-lacquering line in order to improve 
both productivity and the quality of the final product. This same year Maghreb Steel also 
commenced work on the […] million-dirham extension of its existing rolling complex with a view to doubling its cold-rolling capacity; 
 Further investment in 2005 involving an extension of the annealing furnaces to respond 
to the increase in the company's cold-rolling capacity and the start of the construction of a hydrochloric acid regeneration unit in order to minimize consumption of this acid; 
 Development in 2010 of an integration plan for the commissioning of a hot-rolling 
complex with an annual capacity of 1,000,000 tonnes. The production resulting from this 
investment has replaced the coils imported for use as inputs for the cold-rolling complex, thereby optimizing the production cost of company goods; 
 Establishment in 2012 of an electric steel plant for the manufacture of slabs, the starting 
material for hot-rolled products. 
d. Export performance 
Although exports by Maghreb Steel contracted by  14% in 2013 compared with 2010, this decline 
was considerably less significant than that experi enced by sales on the domestic market (-25.5%). 
Maghreb Steel's reduced export performance cannot therefore be deemed to be the major cause of 
injury to the domestic industry. 
 
e. Productivity of the domestic industry 
Maghreb Steel failed to meet its productivity estimates, basically as a result of the forced decline 
in production triggered by the massive and unexpected increase in imports. As far as production 
costs are concerned, the company considers that its intrinsic costs are within normal limits, except with regard to the extremely detrimental effect of its low production volume. Maghreb Steel also 
underlines the importance of the cost revision policy pursued since 2011, thanks to which costs 
have so far declined steadily.  
Conclusion concerning the causal link  
 Increased imports, as mentioned above, have caused substantial damage to the domestic industry, particularly in terms of the reductions in its domestic market share, sales, production and 
capacity utilization. 
 The MDCCE's preliminary finding is that a causal link exists between the increased imports and the 
serious injury, as defined in Article 54 of Law No . 15-09 and Article 4.2(b) of the WTO Agreement 
on Safeguards.  
ii. Determining the existence of critical circumstances where delay would cause damage 
which it would be difficult to repair 
On the basis of Foreign Exchange Board statistics for the first half of 2014 and data gathered 
through the surveillance mechanism for imports of cold-rolled sheets and plated or coated sheets, 
the MDCCE considers that the growth rate of im ports in early 2014 was significantly higher than 
that recorded in recent years. This trend appear s to be causing additional injury to a domestic 
industry which has already suffered serious injury in the form of a general deterioration of its 
position owing to the increase in imports. 
 With a view to preventing additional injury to th e domestic industry which it would be difficult to 
repair, the MDCCE considers that the requirements for the application of a provisional measure, 
set out in Article 61 of Law No. 15-09 on trade defence measures and Article 6 of the Agreement on Safeguards, have been met. The MDCCE therefore recommends the application of a provisional safeguard measure to imports of cold-rolled sh eets and plated or coated sheets for a period 
of 200 days. 
 G/SG/N/7/MAR/3 • G/SG/N/11/MAR/3 
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  7  OFFER OF CONSULTATIONS UNDER ARTICLE 12.4 
Consistent with Article 12.4 of the Agreement on  Safeguards, Morocco is ready to enter into 
consultations on the provisional safeguard measure with those Members having a substantial interest as exporters of the products concerned. 
 
8  DEVELOPING COUNTRY MEMBERS EXEMPT FROM THE MEASURE IN ACCORDANCE WITH ARTICLE 9.1 OF THE AGREEMENT ON SAFEGUARDS 
In accordance with the requirements governing sp ecial and differential treatment for developing 
country Members of the WTO, laid down in Ar ticle 76 of Law No. 15-09 and Article 9.1 of the 
Agreement on Safeguards, the proposed additional duty will not apply to imports of cold-rolled 
sheets or plated or coated sheets originating in the following developing countries or customs 
territories that are Members of the WTO
2: 
 Albania; Angola; Antigua and Barbuda; Argentina; Armenia; Bahrain, Kingdom of; Bangladesh; 
Barbados; Belize; Benin;  Bolivia, Plurinational State of; Botswana; Brazil; Brunei Darussalam; 
Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Central African Republic; Chad; Chile; Chinese Taipei; Colombia; Congo; Congo, Democratic Republic of the; Costa Rica; Côte d'Ivoire; 
Croatia; Cuba; Djibouti; Dominica; Dominican Republic; Ecuador; Egypt; El Salvador; Fiji; Gabon; 
the Gambia; Georgia; Ghana; Grenada; Guatemala; Guinea; Guinea-Bissau; Guyana; Haiti; Honduras; Hong Kong, China; India; Indonesia; Jamaica; Jordan; Kenya; Korea, Republic of; 
Kuwait; Kyrgyz Republic; Lao People's Democratic Republic; Lesotho; Macao, China; Macedonia, 
Former Yugoslav Republic of; Madagascar; Malawi; Malaysia; Maldives; Mali; Mauritania; 
Mauritius; Mexico; Moldova, Republic of; Mongolia; Montenegro; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Nigeria; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; 
Philippines; Qatar; Rwanda; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; 
Samoa; Saudi Arabia, Kingdom of; Senegal; Si erra Leone; Singapore; Solomon Islands; 
South Africa; Sri Lanka; Suriname; Swaziland; Tajikistan; Tanzania; Thailand; Togo; Tonga; 
Trinidad and Tobago; Tunisia; Turkey; Uganda; United Arab Emirates; Uruguay; Vanuatu; 
Venezuela, Bolivarian Republic of; Vietnam; Zambia; and Zimbabwe.  
__________ 
                                               
2 For the purposes of the exemption of developi ng countries under Article 76 of Law No. 15-09, 
the 3% threshold was calculated on the basis of the most recent import data available from the MDCCE, namely the cumulation of imports from January to July 2014.