G/SG/N/8/IDN/20  
G/SG/N/10/IDN/20  
 
16 July 2018  
(18-4430) Page: 1/6 
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 M EASURE  
INDONESIA  
(Ceramic flags and paving, hearth or wall tiles ) 
The following communication, dated 10 July 2018 , 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 26 March 2018, the KPPI (Komite Pengamanan Perdagangan Indonesia /Indonesian Safeguards 
Committee)  hereinafter referred as the "Investigating Authority",  received an application from 
Indonesian Ceramic Industry Association ( Asosiasi Aneka Industri Keramik Indonesia /ASAKI)  
hereinafter referred as the  Applicant, requested for the imposition of a safeguard measure on the 
importations of  Ceramic flags and paving, hearth or wall tiles; ceramic mosaic cubes and the like, 
whether or not on a backing, under HS. codes 6907.21.21, 6907.21.22, 6907.21.23, 6907. 21.24, 
6907.21.91, 6907.21.92, 6907.21.93, 6907.21.94, 6907.22.11, 6907.22.12, 6907.22.13, 
6907.22.14, 6907.22.91, 6907.22.92, 6907.22.93, 6907.22.94, 6907.23.11, 6907.23.12, 
6907.23.13, 6907.23.14, 6907.23.91, 6907.23.92, 6907.23.93, 6907.23.94, 6907.30.1 1, 
6907.30.19, 6907.30.91, and 6907.30.99.  
 
Based on the examination of the above -mentioned application, the investigating authority initiated 
a safeguard investigation on 29 March 2018. The initiation of the investigation was published in 
the national da ily newspaper ("Bisnis Indonesia"), and  Ministry of Trade website. The said initiation 
was also notified in the WTO document G/SG/N/6/IDN/28 , circulated on 3 April 2018.  
 
2. Period of Investigation  
 
The period of investigation covers 2015 to 2017 . 
 
3. Major Proportion  
 
The total production of the Applicant is 52.2% from total domestic production of the Subject 
Goods, therefore it represents a major proportion as required by Article 4.1(c) of the WTO 
Agreement on Safeguards.  
 G/SG/N/8/IDN/20 • G/SG/N/10/IDN/20  
 
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  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 r esponses concerning the investigation . In light of 
the aforementioned, the Investigating Authority has held public hearing on 20 April 2018.  
 
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 production, the Investigating Authority ha s analyzed import data 
during the period of investigation.  
 
1. Absolute increase in imports  
 
Table 1: Volume of Imports  
Description  Unit Year 
2015  2016  2017  
Volume  of Imports  Ton 858,486  1,069,859  1,257,123  
Growth  %  24.62  17.50  
Trend  % 21.01  
 Source: Statistics Indonesia/ Badan Pusat Statistik (BPS)  
Based on the data shown in Table 1, there is an increased volume of imports in absolute terms 
during the period of investigation, with a trend of 21.01%. Imports of the Subject Goods increased 
significantly every year, with the biggest increased by 24.62% in 2016 c ompared to 2015.  
 
2. Relative increase in imports to Total Domestic Production   
 
Table 2: Volume of Imports , Total Domestic Production, and Relative to Total Domestic 
Production  
Description  Unit Year 
2015 2016 2017 
Volume  of Imports  Ton 858,486  1,069,859  1,257,123  
Total Domestic Production  Index  100 97 96 
Relative to Total Domestic Production  Index  100 129 153 
Trend  % 23.57  
 Source:  Statistics Indonesia  and had been verified by Investigating Authority  
As shown in the Table 2, imports relative  to domestic production have also increased significantly. 
It increased sharply by 29 index points in 2016 compared to 2015, and in 2017 increased by 
24 index points compared to 2016. There has been a constant increase in imports relative to 
domestic produ ction during the period of investigation.  
 
3. Imports from Main Countries  
 
Table 3: Imports Shares (%)  
Country  Year 
2015  2016  2017 
People's Republic of China (PRC)  97.18 98.84 96.02 
Vietnam  1.60 0.79 1.61 
Thailand  0.03 0.00 1.11 
Others   1.19 0.37 1.26 
 Source: Statistics Indonesia/ Badan Pusat Statistik (BPS)  
Table 3 indicates that the biggest shares of import in 2017 is PRC, with total shares of import 
accounted for 96.02%.  G/SG/N/8/IDN/20 • G/SG/N/10/IDN/20  
 
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  3  EVIDENCE OF SERIOUS INJURY OR THREAT THE REOF CAUSED BY INCRE ASED 
IMPORTS  
In a view to determine the existence of serious injury or threat thereof caused by increased 
imports, the Investigating Authority has made an evaluation and analyzed all relevant factors of an 
objective and quantifiable nature having a bearing on the situati on of the Applicant. The following 
evaluation was based on data provided by the Domestic Industry (Applicant).  
 
1. Evidence of serious injury or threat of serious injury  
 
Table 4: National Consumption, Volume  of Imports, and Market Shares  
No Description  Unit Year Trend 
15-17 
(%) 2015  2016  2017  
1. National Consumption   Index  100 97 109 4.3 
2. Volume  of Imports  Ton  858,486   1,069,859   1,257,123  21.0 
3. Applicant's Domestic Sales   Index  100 95 99 (0.6) 
4. Non-Applicant's Domestic Sales   Index  100 88 105 2.3 
5. Imports market share  Index  100 128 135 16.0 
6. Applicant's market share  Index  100 98 91 (4.6) 
7. Non-Applicant's market share  Index  100 91 96 (1.9) 
Source:  Statistics Indonesia  and had been verified by Investigating Authority  
 It could be seen from table 4 that national consumption increased during the investigation 
period with a trend of 4.3%. National consumption increased significantly in 2017 by 
11.88% compared to 2016. However, the increased of consumption in that period co uld 
not be enjoyed by the Applicant as it was fulfilled by import goods.  
 The volume of imports increased significantly during the investigation period with a trend 
of 21%. It can also be seen that market share 100 index points in 2015, 128 index points 
in 2016, and continued to increase 135 index points in 2017.   
 The Applicant 's domestic sales  was relatively declined during the investigation with market 
shares as follows: 100 index points in 2015, 98 index points in 2016, and continued to 
decreased by 91 index points in 2017.   
 Even though the Non -Applicant 's domestic sales have a relatively increased during the 
investigation period , their market shares had significantly decreased with trend of 1.9%. 
(100 index points in 2015, continued to decrease to only  88 index points in 2016, and 
have a slight increased 105 index points in 2017).  
 
Table 5: The Applicant 's Indicators of Injury   
No Description  Unit Year Trend 
15-17 
(%) 2015  2016  2017  
1. Volume  of Imports  Ton 858,486  1,069,859  1,257,123  21.0 
2. Applicant's Domestic Sales  Index  100 95 99 (0.6) 
3. Production  Index  100 97 96 (2.2) 
4. Inventory  Index 100 128 123 10.8 
5. Productivity  Index  100 96 94 (2.8) 
6. Capacity Utilization  Index  100 92 91 (4.8) 
7. Profit/Loses  Index  100 163 69 (17.1)  
8. Employment  Index  100 102 101 0.6 
9. Cost of production  Index 100 102 107 3.7 
Source: As been verified by the Investigating Authority  
As shown in Table 5, the performance of the applicant can be seen as follows:  
 G/SG/N/8/IDN/20 • G/SG/N/10/IDN/20  
 
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  a. The Applicant 's domestic sales decreased with a trend of 0.6% in which the applicant 
could not sell their goods due to the increased in volume of imports of the Subject 
Goods. This causes the inventory increased with a trend of 10.8%. And resulting 
additional in costs o f production due to the limited storage to accommodate the 
inventory.  
b. The Applicant 's production and capacity utilization decreased with a trend of 2.2% and 
4.8% respectively  due to the decline in domestic sales.  
c. The increased of inventory forced the appli cants to suspend several of their production 
line, which cause s the productivity decreased with a trend of 2.8%.  
d. As the result of the decrease in domestic sales and the increase in cost of production, 
the Applicant suffered a decreasing of profits with a t rend of 17.1%.  
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 also examined the following other known factors:  
 
a. Export performance  
Table 6: Export Performance  
Indicators  Unit Year 
2015  2016  2017  
Domestic sales Proportion  Index   100   100   97  
Export sales Proportion  Index   2   3   5  
 Source: As been verified by the Investigating Authority  
Based on Table 6, it can be seen that export sales in 2017 are only 5 index points from the 
Applicant 's total sales. Therefore, it can be concluded that the Applicant 's export sales are not 
affecting  their financial performance.    
  
b. Installed capacity  
Table  7: Installed Capacity and National Consumption  
No. Description  Unit Year 
2015  2016  2017  
1. Installed Capacity  Index  100 98 98 
2. National Consumption  Index  67 66 73 
 Source: Applicant and Ministry of Industries  
 
As shown in Table 7, the installed capacity of the Applicant is adequate to meet national 
consumption. Therefore, it can be concluded that the injury which suffered by the applicant is not 
caused by the inability of the Applicant to fulfill the national consumption, but due to the increased 
of the imports effecting the applicant 's financial performance.  
 
c. Quality  
Product quality of Ceramic flags and paving, hearth or wall tiles  of the Applicant has met the 
Indonesian National Standard (SNI), and ISO (Inter national Standard for Organization). In terms 
of quality, Ceramic tile produced by the Applicant has met national and international standard. 
Therefore, it can be concluded that quality is not a factor that has impacted to the injury.  
 
Based on the facts above, it can be concluded that there are no other factors that caused or are 
threatening to cause serious injury to the Applicant apart from increased volume of imports of the 
Subject Goods.  G/SG/N/8/IDN/20 • G/SG/N/10/IDN/20  
 
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  3. Causal Link  
 
The Investigating Authority has also examined a ll factors having a bearing in the Applicant 
situation, and came into a conclusion that threat of serious injury suffered by the Applicant mainly 
caused by significant increased volume of imports and not due to the other factors, as follows:  
 
a. There is an increased of imports of the Subject Goods during 2015 -2017 as shown in 
Table 1.  
b. During 2015 -2017 the national consumption increased with the trend of 4.3%. National 
consumption increased significantly especially in 2016 -2017 amounted 11.88%. However 
this s ituation could not be utilized by the Applicant as it was fulfilled by imported goods.  
c. During the period of investigation the share of imports increased significantly by 16%. 
On the other hand the Applicant's market shares decreased with a trend of 4.6%, d uring 
the same period. It could be concluded that the Applicant's market share taken by 
imports.  
d. As the effect of the decreased on the Applicant's market share, causing negative impact 
to the applicant performance, i.e. the decreased on domestic sales, pro duction, capacity 
utilization, productivity, profits, and the increased on inventory.  
e. Based on analysis on section b above, the Investigating Authority has concluded that 
there were no factors other than increased imports, which are causing the decrease on  
the Applicant financial performance.  
From the above conditions, 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 of imports have c aused a threat of serious injury on the domestic industries. No 
factors other than increased imports, which has caused injury to the domestic industries.  
 
4  UNFORESEEN DEVELOPME NT 
The increased imports of Subject Goods  from exporting countries  could not be p redicted 
(unforeseen/unexpected), based on the following analysis:  
 
1. Production capacity ceramic tile from PRC increased significantly in 2014 amounted from 
13.9 billion meter square to 17 billion meter square in 2016 with the trend 22% (source: 
Chinese Statistical Source and Commission Implementing Regulation European Union). 
Increasing of production capacity above mentioned led to PRC shift their exports to 
Indonesia.  
  
2. However, European Union extending the definitive anti -dumping duty against the producers 
of ceramic tile from PRC (HS code 6907.10.00, 6907.90.20, 6907.90.80, 6908.10.00, 
6908.90.11, 6908.90.20, 6908.90.31, 6908.90.51, 6908.90.91, 6908.90.93, and 
6908.90.9 9) amounted 13.9% -32% that had been effective since 12 March 2015. The 
imposition is extended on 23 November 2017, and expired on 23 November 2022. 
Furthermore, in 29 March 2016 India imposed provision of anti -dumping duty against  the 
producers of ceramic tile from PRC  (HS Code: 6907 and 6908) amounted USD 1.37 per 
meter square. This has caused PRC shift their exports to Indonesia . 
 
3. This situation as had been explained in point a and b, were exacerbated by the imposition of 
Anti-Dumping and Countervailin g measures by the United States of America and European 
Union to PRC. Therefore, PRC has to find another market to balance its production. Asia who 
experiences good economic condition with growing market (including Indonesia) became the 
export target of th e producing countries.  
 
4. Based on the above points, it could be concluded that over capacity had occurred in some 
exporting countries during 2015 -2017. While national consumption of some countries, was 
declining. Both of these conditions  exacerbated by t he imposition of Anti -Dumping and 
Countervailing Duties, which made the exporting countries diverting their market destination G/SG/N/8/IDN/20 • G/SG/N/10/IDN/20  
 
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  among other to Indonesia. These situations were could not be predicted and anticipated 
before (unforeseen/unexpected)    
 
5  DESCRIPTION OF THE S UBJECT GOODS  
The description of the Subject Good s under Article 12.1 (a), had been modified and narrowed 
down based on the capability of the Applicant production and considering all inputs from the 
interested parties. The scope of the Subject Goods are as follows:  
  
Ceramic flags and paving, hearth or wa ll tiles , other than those of subheadings 6907.30, and 
6907.40, other than lining tiles of a kind used for grinding mills, other than having a largest 
surface area of which is capable of being enclosed in a square the side of which is less than 7 cm,  
under  Harmonized System ( HS.) Codes: 6907.21.91, 6907.21.92, 6907.21.93, 6907.21.94, 
6907.22.91, 6907.22.92, 6907.22.93, 6907.22.94, 6907.23.91, 6907.23.92, 6907.23.93, 
6907.23.94.  
 
6  DESCRIPTION OF THE P ROPOSED MEASURE  
1. In view of the aforementioned findings, a safeguard measure has been proposed in form of 
tariff duty:  
 
Table  8: The Proposed on Safeguards Measure  
Year Measure  (%) 
Year 1  23 
Year 2  21 
Year 3  19 
 
2. In view of the aforementioned conclusion of the causal link, the Investigating Authority has 
proposed to the Government of the Republic of Indonesia a safeguard measure to be 
imposed on the importation of the Subject Goods for a period of three years.  
  
3. 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.  
 
4. 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  CONSULTATIONS  
Members having a sub stantial interest as exporters of the Subject Goods should submit written 
request within a period of 7 days from the date of circulation of this notification . All written request 
must be sent both in written letter and in electronic format, and must indica te the name, address, 
e-mail address, telephone and fax number of the Members.  
 
In Accordance with article 12.3 WTO Agreement on Safeguard, the Government of the Republic of 
Indonesia will conduct consultation in order to provide opportunities for those Me mbers, 
consultation is scheduled to be held in the period of 30 days started from the date of circulation of 
this notification.  
 
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  
Telephone / Facsimile: (62 -21) 3840139  
E-mail: dit.multirateral.ppi @kemendag.go.id  
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