G/SG/N/6/CHL/16  
G/SG/N/7/CHL/12  
G/SG/N/11/CHL/9  
 
8 October 2015  
(15-5255)  Page: 1/4  
Committee on Safeguards  Original: Spanish  
 
  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 
CHILE 
(Steel Wire Rod) 
 
The following communication, dated 7 October 2015, is being circulated at the request of the 
delegation of Chile.  
_______________ 
 
 A. N
OTIFICATION UNDER ARTICLE 12.1( A) OF THE AGREEMENT ON SAFEGUARDS ON INITIATION OF AN 
INVESTIGATION AND THE REASONS FOR IT  
 1. Date when the investigation was initiated 
 
The National Commission responsible for investigatin g the existence of distortions in the price of 
imported goods decided to initiate the investigation, and this decision was published in the Official Journal on 5 October 2015.
1 
 
2. Product subject to the investigation  
The product subject to the proposed provisional safeguard is steel wire rod. The product is 
classified under tariff subheadings 72132000, 72139110, 72139120, 72139190, 72271000, 72272000 and 72279000 of Chile's customs tariff. 
 
The domestic industry is made up of steel wire rod producers, inasmuch as it is observed from the preliminary information available that the steel wire rod produced in Chile is like or directly competitive with imported steel wire rod, since both products have the same physical and technical 
characteristics, are of the same quality and have the same end-use, and the prices of imported 
steel wire rod have determined the prices of domestic steel wire rod.  
                                               
1 A copy of the decision, as publishe d in the Official Journal, was submitted (in original language only) in 
electronic form. To view this do cument, please contact Ms Budd ( hilary.budd@wto.org ) or Ms Richards 
(anne.richards@wto.org ) of the Rules Division. G/SG/N/6/CHL/16 • G/SG/N/7/CHL/12 • G/SG/N/11/CHL/9 
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  3. Reasons for initiation of the investigation 
 With the information available, it was determined that the serious injury sustained by the domestic 
industry had been caused, on the one hand, by a sharp drop in import prices, which had had a 
major impact on the domestic industry's selling price and, consequently, its margins, and, on the 
other hand, by the dramatic increase in imports in recent years, which had led to a loss of sales volume and market share for domestic production. 
 
Accordingly, it was established that there was sufficient evidence to justify the initiation of the investigation in order to determine whether or not a safeguard measure should be applied.  
B. N
OTIFICATION UNDER ARTICLE 12.4  OF THE AGREEMENT ON SAFEGUARDS BEFORE TAKING A PROVISIONAL 
SAFEGUARD MEASURE  
 
1. Product subject to the propose d provisional safeguard measure 
The product subject to the proposed provisional safeguard measure is steel wire rod classified 
under tariff subheadings 72132000, 72139110, 72139120, 72139190, 72271000, 72272000 and 
72279000 of Chile's customs tariff. 
 The domestic industry is made up of producers of steel wire rod.  
2. Proposed provisional safeguard measure 
The National Commission responsible for investigating distortions in the price of imported goods 
recommended the imposition of a provisional safe guard of 37.8% on imports of steel wire rod 
classified under tariff subheadings 72132000, 72139110, 72139120, 72139190, 72271000, 
72272000 and 72279000 of Chile's customs tariff.  
3. Entry into force of the proposed provisional safeguard measure 
It is proposed that the provisional safeguard measure enter into force upon publication in the 
Official Journal.  
4. Expected duration of the provisional safeguard measure 
The provisional safeguard measure would be applied for a period of up to 200 days from the date 
of publication in the Official Journal. 
 
5. The basis for: 
(a) Making a preliminary determ ination, as provided for in Article 6 of the Agreement 
on Safeguards, that increased imports ha ve caused or are threatening to cause 
serious injury: 
 The Commission responsible for investigating the existence of distortions in the price of imported 
goods decided to recommend the application of a provisional safeguard of 37.8% on imports of 
steel wire rod, since it considered that the available facts supported a finding of critical circumstances for the domestic industry which, in the absence of immediate protection, would face 
injury that was difficult to repair. 
 
Increased imports 
 
Imports of wire rod in the period January-September 2015 amounted to 64,569 tonnes, an increase of 33.6% in relation to the same period in 2014. This increase was preceded by a decrease of 40.1% in 2014/2013 and increases of 113.8% in 2013/2012 and 233.1% 
in 2012/2011. 
 In the period January-July 2015, the ratio of imports to domestic production of wire rod grew 
by 16.6% in relation to the same period in 2014, as  a result of the fall in domestic production and 
the increase in imports in that period. This ra tio had fallen by 44.1% in 2014/2013 and increased 
by 188.8% in 2013/2012 and 252.1% in 2012/2011. G/SG/N/6/CHL/16 • G/SG/N/7/CHL/12 • G/SG/N/11/CHL/9 
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  The analysis found that imports of the product concerned increased considerably during that 
period.  
Serious injury 
 
In order to make a preliminary determination of serious injury to the domestic industry producing like or directly competitive products, an evaluation of all relevant factors of an objective and 
quantifiable nature having a bearing on the situation of that industry has been undertaken. 
 
1. Apparent consumption and market share  
 
In the period January-July 2015, the apparent consumption of wire rod grew by 8.2% in relation to 
the same period in 2014. In 2014, domestic apparent consumption fell by 20.9%. In 2013, apparent consumption remained more or less stea dy, while in 2012 it increased by 15.9%. In the 
period January-July 2015, the share of imports in apparent consumption rose by 1.0% in relation 
to the share in the same period in 2014. In 2014, this share fell by 24.2% in relation to 2013, 
while in 2013/2012 it rose by 114.1% and in 2012/2011, by 187.5%. 
 
2. Domestic price 
 In the period January-July 2015, the average domestic  price of wire rod in Chile fell by 3.8% in 
pesos, 6.9% in UF ( unidades de fomento  - Chilean inflation-indexed monetary units) and 12.3% in 
dollars, in relation to the average prices re corded in 2014. When comparing July 2015 to 
January 2015, decreases of 12.0%, 13.5% and 15.9% can be observed in pesos, UF and dollars, 
respectively. 
 The coefficient of correlation between the price for domestic wire rod and import prices was 0.80 
for the period January 2011-July 2015. 
 
3. Production costs 
 
Since 2012, there has been a steady drop in production costs per tonne of wire rod. These costs 
fell by 35.3% between 2011 and July 2015. In th e period January-June 2015, total production 
costs fell by 11.9% in relation to 2014, due primar ily to a drop in the cost of raw materials and 
some indirect costs. 
 
4. Margins 
 
The profit margin for wire rod has been negative for all the years in which CAP Acero provided data (2011 to July 2015).  
5. Production 
 Between 2011 and 2014, domestic production decr eased by 24.9%. In the period January-July 
2015, production fell by 6.3% in relation to the same period in 2014. 
 
6. Sales 
 
Between 2011 and 2014, sales to the domestic mark et fell by 25.6%. In the period January-July 
2015, production fell by 4.0% in relation to the same period in 2014.  
7. Installed capacity 
 In 2014, capacity utilization increased by 20.1%, reversing the decline of 30.1% recorded in 2013 
and 6.2% recorded in 2012. 
 
8. Employment 
 
In the period January-June 2015, employment in the production of wire rod fell by 2.8% in relation to 2014. Between 2014 and 2013, employment fell by 13.7%.  G/SG/N/6/CHL/16 • G/SG/N/7/CHL/12 • G/SG/N/11/CHL/9 
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  9. Productivity 
 In 2014, productivity, measured in tonnes of wire rod produced per worker employed, increased by 39.4% in relation to the previous year. In both 2013 and 2012, however, productivity fell 
by 32.5% and 8.4%, respectively. 
 
Conclusion 
 
Since 2014, there has been a significant increase in imports of the product concerned, in both absolute and relative terms, which has led to a deterioration in domestic industry indicators, as shown by the decline in market share, the fall in price, and operating losses. 
 
Causation 
 
For the above-mentioned reasons, the preliminary conclusion is that there is a causal link between 
the significant increase in imports at decreasing  prices and the serious injury sustained by the 
domestic industry. 
 
(b) Determining the existence of critical  circumstances where delay would cause 
damage which it would be difficult to repair 
 
It has been determined that critical circumstances exist in which delay in applying a measure to 
contain or eliminate the injury would cause damage which it would be difficult to repair.  
As indicated above, the serious injury sustained by the domestic industry has worsened in 2015 
with the ever-increasing volume of imports at low prices. Given the rate of increase of imports and the situation of the domestic industry, it is considered that the latter will sustain damage, 
which will be difficult to repair, in the absence of a provisional safeguard measure. 
 6. Offer of consultations under Article 12.4  
In accordance with Article 12.4 of the Agreement on Safeguards, Chile is prepared to hold 
consultations on the provisional safeguard measure,  once the measure has been taken, with those 
Members having a substantial interest as exporters of the subject product. 
 
C. N
OTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 OF THE AGREEMENT ON SAFEGUARDS , FOLLOWING THE 
DECISION NOT TO APPLY THE PROVISIONAL SAFEGUARD MEAS URE TO CERTAIN PRODUCTS ORIGINATING IN DEVELOPING 
COUNTRIES  
 Developing countries exempted from the safeguard measure  
Imports from developing country Members will not be subject to the proposed provisional 
safeguard measure provided that each Member's imports do not exceed 3% of total imports into Chile and that Members with less than 3% import share collectively account for not more than 9% 
of total imports into Chile. 
 Correspondence intended for the competent authority should be sent to the Technical Secretariat 
of the National Commission responsible for investig ating the existence of distortions in the price of 
imported goods, at the following address:  
Morandé 115, piso 1 
Santiago - Chile 
Tel:+56 2 2670 2564 
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