WORLD TRADE  
ORGANIZATION   
G/SG/N/6/CHL/13 
G/SG/N/7/CHL/10 
G/SG/N/11/CHL/6 2 May 2012 
 
(12-2305) 
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 
 
(Maize otherwise worked) 
   The following communication, dated 27 April 2012, is being circulated at the request of the 
delegation of Chile. 
 
_______________ 
 
 
 The Republic of Chile submits here with to the Committee on Safeguards: 
 
(A) A notification under Article 12.1(a) of the Agreement on Safeguards on initiation of a 
safeguard investigation on imports of ma ize otherwise worked - hereinafter broken 
maize; 
 
(B) a notification under Article 12.4 of th e Agreement on Safeguards before taking a 
provisional safeguard measure against imports of broken maize;  and 
 
(C) a notification pursuant to Article 9, footnote 2 of the Agreement on Safeguards 
concerning the decision not to apply the measure to products originating in 
developing countries. 
 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 inves tigating the existence of distortions in the 
price of imported goods decided to initiate the i nvestigation, and this decision was published in the 
Official Journal on 27 April 2012.  G/SG/N/6/CHL/13 
G/SG/N/7/CHL/10 G/SG/N/11/CHL/6 
Page 2 
  
  2. Product subject to the investigation 
 The product subject to the proposed provisional safeguard is broken maize.  The product is 
classified under tariff subheading 1104.2300. 
 
 The domestic industry is made up of maize pr oducers, inasmuch as it is observed that the 
maize produced in Chile is directly competitive with  broken maize, since both products have the same 
end-use, namely that of animal feed, and the pr ices of imported broken ma ize have determined the 
prices of domestic maize. 
 
3. Reasons for initiation of the investigation 
 The injury to domestic maize producers is determined by their dependence on domestic 
buyers, whose demand is satisfied by imports of low- cost broken maize, so that there is no demand for 
Chilean maize, and this forces domestic producers to lower their prices. 
 
 Accordingly, it was established that there was sufficient eviden ce 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  BEFORE TAKING A PROVISI ONAL SAFEGUARD MEASURE  
1. Product subject to the proposed provisional safeguard measure 
 The product subject to the proposed provisi onal safeguard measure is maize, otherwise 
worked - hereinafter broken maize.  The produc t is classified under tariff subheading 1104.2300. 
  The domestic industry is made up of the producers of maize, inasmuch as it is observed that 
the maize produced in Chile is directly competitive with broken maize, since both products have the 
same end-use, namely that of animal feed, and the prices of imported broken maize have determined 
the prices of domestic maize.  
2. Proposed provisional safeguard measure 
 The National Commission responsible for inves tigating distortions in the price of imported 
goods recommended the imposition of a provisional saf eguard of 10.8 per cent on imports of broken 
maize classified under tariff subheading 1104.2300. 
 
3. Entry into force of the proposed  provisional safeguard measure 
 It is proposed that the provisional safeguard measure should enter into force upon publication 
in the Official Journal, that is, on 27 April 2012. 
 
4. Expected duration of the provisional safeguard measure 
 The provisional safeguard measure would be a pplied for a period of up to 200 days from the 
date of publication in the Official Journal.   G/SG/N/6/CHL/13 
 G/SG/N/7/CHL/10 
 G/SG/N/11/CHL/6 
 Page 3 
  
  5. The basis for: 
(a) Making a preliminary determination, as provided for in Article 6 of the Agreement on 
Safeguards, that increased imports have cau sed 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 applicatio n of a provisional safeguard of 10.8 per cent on 
imports of broken maize, 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 
  Total imports of broken maize increased by 60.1 per cent in 2011, compared with 2010, 
amounting to 303,663 tonnes.  If the period January-M arch 2012 is considered, the level of imports 
was 112,036 tonnes, signifying an increase of 120 pe r cent compared with the same period of the 
previous year.   The ratio of broken maize imports to total dom estic production of maize reached 21.1 per cent 
in 2011, whereas it stood at 14 per cent in 2010, meaning an increase of 51.3 per cent. 
  The analysis found that imports of the produc t concerned increased considerably during that 
period.  
Imports of broken maize 
% variation 2009/2008  122.7% 
% variation 2010/2009 108.9% 
% variation 2011/2010 60.1% 
% variation January-March 2012/2011 120.0% 
 
 Serious injury  
 
In order to make a preliminary determination of serious injury to the domestic industry 
producing the like or directly competitive product, an evaluation of all relevant factors on an objective 
and quantifiable basis having a bearing on its situation has been undertaken.  G/SG/N/6/CHL/13 
G/SG/N/7/CHL/10 G/SG/N/11/CHL/6 
Page 4 
  
  1. Apparent consumption and market share 
 
Domestic apparent consumption of maize 
(Tonnes) 
 
 Production Export Imports Stocks Apparent 
consumption Broken maize 
share of 
imports/apparent 
consumption Broken 
maize Total 
2008 
2009 
2010 
2011 1,365,472 
1,345,653 
1,357,921 
1,437,561 10 
808 
2 
5 40,762
90,771
189,633
303,6631,481,846
830,417
787,950
968,6830 
0 
0 
0 2,847,308 
2,175,262 
2,145,869 
2,406,239 1.4%
4.2%
8.8%
12.6%
        
% variation 09/08 
% variation 10/09 % variation 11/10 -1.5% 
0.9% 5.9% + 
-99.7% 
127.9% 122.7%
108.9%
60.1%-44.0%
-5.1%
22.9%- 
- - -23.6% 
-1.4% 
12.1% 191.5%
111.8%
42.8%
+:  Variation greater than 1,000 per cent. 
 The share of imports of broken maize in appa rent consumption reached 12.6 per cent in 2011, 
implying an increase in relation to 2010, when it amounted to 8.8 per cent.  In 2009 and 2008, this 
ratio reached 4.2 per cent and 1.4 per cent respectively.  
2. Price  
 
 The current purchasing price for maize produced locally is at least 10,000 Chilean pesos less 
per tonne than the price that should apply if ther e were no imports of broken maize;  given the 
estimation that 760,000 MT (51 per cent of domestic production) have already been marketed, this 
would imply a loss due to lower produc t value of US$15.5 million to date. 
  For the period from January 2008 to December  2011, the coefficient of correlation between 
the domestic wholesale price for maize and the average price of broken maize imports was 0.9. 
 
3. Production  
 
Imports of broken maize from Argentina and domestic production of maize (tonnes) 
Period Imports (M) Production (P) Ratio (M/P) Percentage variation 
of M/P 
2008 40,762.0 1,365,472 3.0% - 
2009 90,771.5 1,345,653 6.7% 126.0% 
2010 189,610.8 1,357,921 14.0% 107.0% 
2011 303,662.9 1,437,561 21.1% 51.3% 
 
 In 2011, domestic production of maize increased by 5.9 per cen t compared to the previous 
year, while in 2010 it grew by 0.9 per cent and in 2009 it decreased by 1.5 per cent. 
  G/SG/N/6/CHL/13 
 G/SG/N/7/CHL/10 
 G/SG/N/11/CHL/6 
 Page 5 
  
  4. Installed capacity  
 
 The installed capacity for the production of maize comprises the estimated 131,268 hectares 
intended for its cultivation for the season 2011/2012 , implying an increase of 16.2 per cent compared 
with the previous season.  
5. Agriculture sector wages 
  As there are no data on wages in the maize industry, approximate figures were derived from 
the wages for the agriculture sector as a whole, where a decline was observed at national level from 
$339,029 in December 2009 to $332,217 in December 2010 (in Chilean pesos).  
Conclusion  
 
 There was a significant increase in imports of the product concerned in 2010-2011, in both absolute and relative terms, which led to a deterioration in the domestic industry indicators, as can be 
appreciated from the decline in market sh are, the fall in price and operating losses. 
 
Causation  
 
 For the above-mentioned reasons, the preliminar y conclusion is that there is a correlation 
between the significant increase in imports and the ser ious 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  
 
 A preliminary determination has been made th at critical circumstances exist in which delay 
would cause damage which it would be difficult to repair.   As indicated above, the serious injury suffe red by the domestic industry worsened during 
2010-2011 with the ever-continuing increase in the volu me of imports.  Given the rate of increase of 
imports and the situation of the dom estic industry, it is considered th at the latter will sustain damage, 
which it 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 Agreem ent on Safeguards, Chile is prepared to hold 
consultations on the provisional safeguard measure w ith those Members having a substantial interest 
as exporters of the subject product.  C. N
OTIFICATION OF CONFORMITY WITH ARTICLE 9, FOOTNOTE 2 FOLLOWING THE DECISION 
NOT TO APPLY THE PROVISIONAL SAFEGUARD ME ASURE TO CERTAIN PRODUCTS ORIGINATING 
IN DEVELOPING COUNTRIES  
 
Developing countries exempted from the safeguard measure  
  Imports from developing countries Members shall not be subject to the proposed provisional 
safeguard measure provided that each Member's imports do not exceed 3 per cent of total imports into Chile and that the share of Members with less than 3 per cent import share does not collectively 
account for more than 9 per cent of total imports into Chile.  G/SG/N/6/CHL/13 
G/SG/N/7/CHL/10 G/SG/N/11/CHL/6 
Page 6 
  
   Correspondence intended for the competent authority should be sent to the 
Technical Secretariat of the National Commission responsible for investigating the existence of 
distortions in the price of imported goods, at the following address: 
 
 Morandé 115, piso 1  Santiago - Chile  Tel.:  (56 2) 670 2564  
__________