G/SG/N/8/UKR/3  
G/SG/N/10/UKR/3  
G/SG/N/11/UKR/1  
 
25 March 2013  
(13-1632)  Page: 1/4  
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 PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
UKRAINE  
(Motor cars) 
The following communication, dated 21 March 2013, is being circulated at the request of the 
Delegation of Ukraine.  
 
_______________ 
  
1. Provide evidence, citing relevant data and the applicable period of investigation  of 
serious injury or threat thereo f caused by increased imports. 
Study of the existing export potential of the countri es of origin or countries of export, and export 
potential, which is likely to be created in such countries, as well as the probability of use of such 
potential for export to Ukraine. 
 
According to the International Organization of Motor Vehicle Manufacturers (OICA) data, in 2008 
and 2010 none of the car producing countries, expe rienced the reduction of production of cars like 
it had happened in Ukraine (reduced production by  79%). Given the fact that some countries have 
reduced the volume of domestic production, they have considerable redundant capacity, which can 
be reoriented to foreign markets, including Ukraine. 
 According to the Turkish Automotive Manufacturers Association (Otomotiv Sanayi Derne ği) data 
(Otomotiv Sanayi Derne ği) production cars in the Republic of Turkey in 2008 totaled 622 thousand 
units, exports - 526 thousand units, or 85% of total production. In 2010 while reducing production to 603 thousand units, exports of passenger cars also decreased to 440 thousand units, accounting 
for 73%. 
 The share of the product concerned originating from the Republic of Turkey in total imports to Ukraine in 2010 compared to 2008 increased by 17%, which confirms the attractiveness of the 
Ukrainian market for Turkish producers.  
 According to the Korea Automobile Manufacturers Association (KAMA) data, the volume of 
production of cars in the Republic of Kore a in 2008 totaled 3,450 thousand units, exports - 
2,509 thousand units, or 73% of total production. In 2010, while increasing production to 3,866 thousand units, export of passenger cars also increased to 2,611 thousand units, accounting 
for 68%. 
 G/SG/N/8/UKR/3 • G/SG/N/10/UKR/3 • G/SG/N/11/UKR/1 
 
- 2 - 
 
  The share of the product concerned originating from the Republic of Korea in total imports to 
Ukraine in 2010 compared to 2008 increased by 79%, which confirms the attractiveness of the Ukrainian market for Korean producers.  
According to the European Automobile Manufacture rs' Association (ACEA), with reference to the 
data provided by the Romanian Association of Motor Vehicle Manufacturers (ASAROM), production 
of passenger cars in Romania in 2008 totaled 231 thousand units, exports - 154 thousand units, or 67% of total production. In 2010 with an increase of production to 324 thousand units, export of 
passenger cars also increased to 290 thousand units, accounting for 90%. 
 These given figures show that in Romania not only  the production of cars increased by 40%, but 
the proportion of export operations in the produc tion structure also significantly increased, which 
confirms the Romanian export oriented industry . At the same time, the share of the product 
concerned, originating from Romania, in total imports to Ukraine in 2010 compared to 2008 increased by 33%. 
 
According to the ACEA, with reference to the da ta provided by the German Association of the 
Automotive Industry (VDA), production of passeng er cars in the Federal Republic of Germany in 
2008 totaled 5532 thousand units, exports - 4,132 thousand pieces, or 75% of total production. In 
2010, while increasing production to 5,552 thousand units, export of passenger cars also increased to 4,239 thousand units, accounting for 76%.  
These figures show that the Federal Republic of Germany in 2010 compared to 2008 increased the 
production and export of cars. It should be  noted that, the share of products concerned 
manufactured in the Federal Republic of Germany in total imports to Ukraine in 2010 compared to 
2008 increased by 197% and reached 12%. 
 According to the Japan Automobile Manufacturers Association (JAMA), production of passenger 
cars in Japan in 2008 totaled 9,916 thousand units, exports - 5,915 thousand units, or 60% of 
total production. In 2010 production decreased to 8,307 thousand units, exports of passenger cars - to 4,272 thousand units, accounting for 51%.  
The share of imports in Ukraine of the products concerned, originating from Japan for 2010 was 
15%. These indicators give reason to believe th at Japanese manufacturers have the ability to 
increase production and possibly use an existing production capacity to supply cars to export 
markets, particularly in Ukraine. 
 According to the data of the State Statistics Committee of Russian Federation, production of 
passenger cars in 2008 amounted to 1,470 thousand units and in 2010 - 1,210 thousand units. 
 According to the data provided in the “Autom otive Industry Development Strategy of the 
Russian Federation for the period up to 2020”, the passenger cars production capacity in Russia at 
the beginning of 2009 amounted to 1,979.6 thousand units. 
 Automotive Industry Development Strategy of the Russian Federation provides for an increase 
by 2020 of manufacturing facilities to produce up to 3,150 thousand units of passenger cars, while 
increasing the level of local content. At this, it provides for supplying about 8% of production (252 thousand units) to export markets, primarily to CIS markets. 
 
The share of CIS-members countries in total exports of passenger cars from Russian Federation in 2010 amounted to 37 thousand units, or 81% (dat a of the Russian Statistical Yearbook, 2011). In 
2010 Russian Federation imported to Ukraine 17 thousand units of products concerned. 
 
The current trends in the automotive industry of th e Russian Federation give reason to believe that 
the production potential of the Russian Federation is likely to be used for the export of passenger 
cars, particularly in Ukraine. 
 So, the existing trends in the global automotive industry development showed that the existing 
export potential of the countries of origin or count ries of export, or the ex port potential, which is 
likely to be created in such countries, may probably be used for export to Ukraine. 
 G/SG/N/8/UKR/3 • G/SG/N/10/UKR/3 • G/SG/N/11/UKR/1 
 
- 3 - 
 
  Trends of import effect on domestic industry an d cause-effect relation between increasing import 
and threat of serious injury to domestic industry 
 
The negative effect of import on domestic industry is proved by following data in 2010 relative to 
2008: 
 
Domestic industry production of the product concerned decreased by 78.9%; 
 
Share of using of production capacity of the domestic industry decreased by 74.86%; 
 Sales of the product concerned by domestic industry on the domestic market decreased by 
86.33%; 
 Income from operational activity decreased by 89.9%; 
 
Employment in the domestic industry decreased by 51.56%;  
Labour productivity of domestic industry decreased by 46.3%. 
 At that the import of motor cars in quantitative equivalent in 2010 comparative to 2008 decreased by 71% but increased by 38% relative to production of domestic industry. 
 
Consumption at the domestic market in 2010 co mparatively with 2008 decreased by 78.8%, share 
of domestic industry at domestic market decrea sed by 35%. As consequence of increased import 
of the product concerned and import circumstance s the domestic industry was driven out of the 
domestic market that caused aggravation of negative situation for domestic industry and threat of serious injury to domestic industry. 
 
At the investigation stage certain interested parties noted that significant worsening of production, trade and financial situation of the domestic industry was caused although by effect of other factors. And serious injury caused by these other factors is not considered to be such as the injury 
caused by increased import. 
 However the investigation conducted by the Ministry of Economic Development and Trade has 
proved that exactly the increase of imports of motor cars (regardless of country of origin and 
export) relative to production of domestic industry and domestic consumption has occurred under such conditions and in volumes that threaten causing serious injury to domestic industry but has 
not been caused by effect of other factors. 
 Concerning conformity of application of the safeguard measures to national interests  
 
Application of the safeguard measures will have positive effect on financial and commercial 
situation of the domestic industry, by giving it a possibility of ease process of economic adjustment 
to competition conditions and facilitates elimination of trade disproportions. 
 
Application of safeguard measures will facilitate recovery of production and sales of domestically produced cars and positively influence employment and investment in domestic industry. 
 
The proposed rate of safeguard duty will not lim it consumers' interests and free choice and cannot 
be considered as prohibition of import of product concerned to Ukraine.  
International obligations of Ukraine do not prohibit application of safeguard measures to increased 
imports that threaten to cause serious injury to domestic industry.  
Having due regard of the abovementioned the Interdepartmental Commission on Foreign Trade 
concluded that during the investigation period, relative to production of domestic industry and consumption the import to Ukraine of motor cars irrespective of country of origin and export 
increased in such quantities and under such conditions as to threaten to cause serious injury to 
domestic industry, and thus the national interests required application of safeguard measures to the imports.  G/SG/N/8/UKR/3 • G/SG/N/10/UKR/3 • G/SG/N/11/UKR/1 
 
- 4 - 
 
  2. Information on whether there is an absolut e increase in imports or an increase in 
imports relative to domestic production. 
During the investigation period in 2010 compared with 2008 the import of motor cars relative to 
domestic production and consumption at the in ternal market increased by 37.9% and 37.1% 
accordingly (irrespective of country of origin and export). 
 The fact of “unforeseen developments” is present in  increase of import share by 37.9% relative to 
applicant’s production of motor cars in 2010 compared with 2008 despite of the general decrease 
of import in quantitative equivalent and general decrease of consumption of motor cars at the domestic market in this period.  
3. Precise description of the product involved: 
Motor cars and other motor vehicles principa lly designed for the transport of persons 
(category M1 – vehicles with no less than 4 wheels and no more than 8 sitting places 
except driver sitting place), with spark-igni tion internal combustion engine and crank 
gear of a cylinder capacity exceeding 1 000 cm
3 but not exceeding 2 200 cm3, new, 
classified under UKTZED1 codes 8703 22 10 00 and 8703 23 19 10. 
4. Precise description of the measure: 
Final safeguard measures applied in the form of special duty 
- of a cylinder capacity exceeding 1 000 cm3 but not exceeding 1 500 cm3 - 6.46%; 
- of a cylinder capacity exceeding 1 500 cm3 but not exceeding 2 200 cm3 - 12.95%. 
 
5. Date of introduction of the measure. 
30 days after publication of the notice (published on 14 March 2013 in the official newspaper 
“Uryadovyi Currier” Nº 48, p. 48) 
 6. Provide expected duration of the measure. 
Three years. 
 7. The major exporting Members of imports of the product involved. 
China, EU, Japan, Korea, Russian Federation, Turkey.  
 
8. The developing countries to which the me asure is not applied under Article 9.1 of 
the Agreement on Safeguards, and the import shares of these countries individually and 
collectively 
Angola, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, 
Congo, Djibouti, The Gambia, Guinea, Guinea-Bissau, Haiti, Lesotho, Madagascar, Malawi, Маli, 
Маuritania, Mozambique, Myanmar, Nepal, Niger, Ruanda, Senegal, Sierra Leone, 
Solomon Islands, Tanzania, Togo, Uganda, Zambia (share of these countries in total import of the product to Ukraine is 0%)  
9. Notice concerning Decision of the In terdepartmental Commission of Foreign Trade 
as of 28.04.2012 Nº SP-275/2012/4423-08 was pu blished on 14 March 2013 in the official 
newspaper “Uryadovyi Currier” Nº 48, p. 48 and is attached in electronic form.
2  
 
 
__________  
 
                                               
1 UKTZED is the Ukrainian Foreign Economic Activi ty Commodity Classification, based on Harmonized 
System 2007. 
2 A copy of the Notice published in the official ne wspaper “Uryadovyi Currier” Nº 48 (in Ukrainian only) 
has been submitted electronically. To consult th is document, please contact Ms Hilary Budd 
(hilary.budd@wto.org ) or Ms Delphine Naville ( delphine.naville@wto.org ) of the Rules Division.