G/SG/N/7/MDG/8  
G/SG/N/11/MDG/8  
7 December  2022 
(22-9081) Page: 1/5 
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 UNDER ARTICLE 9, FOOTNOTE 2,  
OF THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
Paints  
The following communication, dated and received on 6 December 2 022, is being circulated at the 
request of the delegation of Madagascar.  
 
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Pursuant to  Article  12.4 of the Agreement on Safeguards, the Committee on Safeguards is hereby 
notified of the adoption of a provisional safeguard measure referred to in Article 6, in respect of 
imports of paints  to Madagascar . It is also hereby notified, pursuant to Article 9, footnote 2, of the 
Agreement on Safeguards, of its decision not to apply the p roposed safeguard measure against  
imports from developing country Members of the WTO.  
1. Specify the product subject to the proposed provisional safeguard measure  
Oil and water paints under Madagascar HS customs tariff codes 320611, 320619, 320620, 320641, 
320642, 320649, 320650, 320710, 320720, 320730, 320740, 320810, 320820, 320890, 320910, 
320990, 321000, 381400, 390512, 390690, 390730, 390750 and 390950.  
2. Specify the proposed provisional safeguard measure  
The provisional safeguard measure will take the form of an additional duty to the ad valorem  customs 
duty, charged at a rate of 17 % of the c.i.f. value for water paints and 35 % for oil paints.  
3. Specify the proposed date of introduction of the proposed provi sional safeguard 
measure  
The provisional safeguard measure will enter into force on the date of publication of the related 
public notice following approval by the high er authorities . 
4. Specify the expected duration of the provisional safeguard measure  
The pr ovisional safeguard measure will be applied for 200 days from the date of its entry into force.  
5. Provide the basis for:  
5.1 Making a preliminary determination, as provided for in Article 6 of the 
Agreement on Safeguards, that increased imports have caused o r are 
threatening to cause serious injury.  
 G/SG/N/7/MDG/8 • G/SG/N/11/MDG/8  
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  I.  INCREASE D IMPORTS  
 
i. Unforeseen developments  
The massive increase in paint imports is the result of unforeseen developments reflected in the 
following series of factors:  
On the one hand, the implementation of post -COVID -19 economic recovery policies has led to the 
very rapid resumption  of exports from the main paint -exporting countries.  
On the other hand, there is a new trend towards using powder paints in developed countries owing 
to the benefits they offer in terms of durability , aesthetics, design and the environment . This change 
has boosted exports of liquid paints to African countrie s, including Madagascar . Moreover, bans on 
lead paint, which have been implemented in a number of countries owing to its toxicity, have led 
systematically to the export  of lead paint  to countries where it is not yet banned.  
ii. Absolute change  in imports  
Impor ts of paint to Madagascar have increased significantly in the period under consideration . They 
initially rose by 10 index points between 2018 and 2019, before a sharp and massive increase of 
around 15 index points compared to the previous year was recorded  in 2021 . Finally, imports ' 
upward trend continued between January and June 2 022, with an increase of 8 index points 
compared to the same period in 2021.  
iii. Increase in imports relative to domestic production  
During the period under consideration, the volume of paints produced locally remained less than half 
of the volume imported . The increase in imports is much more significant in relative terms compared 
to domestic production as they grew by  26 index points in 2021 and 20 index poi nts for the first 
seven months of 2022.  
II. SERIOUS INJURY  
The National Authority for Trade Remedies  (ANMCC ) made a preliminary determination of serious 
injury to the domestic industry producing like or directly competitive products after evaluating, on 
an objective and quantifiable basis, relevant factors having a bearing on the situation of this domestic 
industry.  
iv. Rate of increase in imports  
Data from the investigation  showed that the volume of paint imports increased between 2018 and 
2021. In general, th ere has been a  sharp and significant rise in recent years , in particular between 
2020 and 2021, and between January and June 2 022 compared to the same period in 2021, in both 
absolute and relative terms compared to domestic production . This situation has a negative impact 
on the performance indicators of the domestic industry.  
v. Share of the domestic  market taken by imports  
Imported paints have monopolized the domestic market during the period of analysis . Between 2020 
and 2021, the domestic in dustry lost a considerable market share of 32 index points, while imports 
gained 14 index points . In the first seven months of 2022, local producers saw their share decline 
by 16 index points.  
vi. Domestic production  
Despite an increase of 10 index points in t he volume of domestically produced paint in 2019 
compared to 2018, a continuous and ever worsening  decline has been recorded since 2020 . 
Production  was down  2 index points in 2020 and 12 index points in 2021, meaning  that there was a 
decline of 12 index po ints between 2019 and 2021 . Finally, the first seven months of 2022 saw a 
10-index -point drop compared to the same period in 2021.  G/SG/N/7/MDG/8 • G/SG/N/11/MDG/8  
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  vii. Changes in the level  of sales  
Sales fell by 6 index points in 2020 compared to 2019 . Then i n 2021, they decreased sharply by 
30 index points in a single year . For the period from January to June 2 022, a decline of 14 index 
points was recorded compared to the same period in 2021.  
viii. Production capacity utilization rate  
The domestic industry's production capacity was relatively stable over the investigation period, with 
a capacity utilization rate not exceeding 30 %. The rate fell sharply by 10 index points in 2022.  
ix. Employment  
Despite the steady  decline in production volume, the domestic industry has tried to recover by 
increasing staffing levels . As a result , the workforce remained at the same level or even increas ed 
by 17 index points between 2018 and 2021 . However, the 7 -index -point decrease in the number in 
the first seven months of 2022 compared to the sam e period in 2021 indicates the difficulties of 
finding long -term solutions to the situation in the face of import pressures.  
x. Productivity  
Productivity changes are in line  with th ose seen in production volume . Indeed, between 2018 and 
2019, the domestic ind ustry's productivity increased slightly as did  domestic production . However, 
the drop in production since 2020 has led to a 19-index -point decline in productivity between 2019 
and 2021 . This situation prompted the domestic industry to review its workforce in 2022, with a 
decrease of 3 index points recorded for the first seven months of 2022 compared to the same period 
in 2021.  
xi. Profitability  
Profitability is the indicator that is most affected and has greatly suffered from increased imports 
throughout the period under review . This situation is a source of concern  to the domestic industry 
as its profits decreased by  34 index points between 2018 and 2021, and continued to fall in 2022, 
with a reduction of 30 index points in the first seven mont hs of the year.  
III. CAUSAL LINK  
 
i. Effects of increased imports  
 
Increased imports have led to a general and significant deterioration in the economic conditions of  
the domestic paint industry in Madagascar, particularly in terms of production, sales, tu rnover, 
market share and productivity, despite a slight decline in imports in 2020 as a result of the COVID -
19 pandemic . This deterioration resulted in a considerable decline in the estimated profitability , 
which fell to 34 % in only four years, i.e. during the investigation period . As a result, the development 
of the domestic industry's activities has been severely inhibited by the imports that have not ceased 
to dominate the domestic paint market in Madagascar . Since 2021, the market share of imports has 
exceeded 75 %. 
ii. Other causal factors  
 
- Contraction in demand or changes in consumption patterns  
 
During the investigatio n period, national demand for paint was more or less stable, following a n 
increase of 10 index points between 2018 and 2019 despite the COVID -19 context . Unlike imports, 
the domestic industry has been unable to take advantage of this stability in demand as it lost a 
significant part of its market share from one year to the next . It is therefore held that the injury to 
the domestic industry cannot be attributed to a contraction in domestic market demand.  G/SG/N/7/MDG/8 • G/SG/N/11/MDG/8  
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  - Competition between domestic producers  
 
Competition between domestic producers cannot be considered the cause of the injury to the 
domestic industry as the producers are located in different geographical areas and their capacity to 
cover the entire country is very limited owing to the ir economic difficulties . In addition, each of these 
producers tends to target different categories of consumers through their product ranges.  
- Technological developments  
 
The production processes and raw materials used for local and imported paints are i dentical . Apart 
from artisanal producers, local industries are using advanced technologies to produce high -quality 
paints identical to imported ones . In addition, they often organize training to build the capacities of 
their workforce and to adapt continuo usly to the latest technologies . The factors relating to the 
development of production -related technologies therefore cannot be a cause of the injury to the 
domestic industry.  
- Export performance  
 
As domestic producers only target the domestic market, their entire output is intended for local 
consumption . None of the paint producers export their product . The serious injury to the domestic 
industry therefore cannot be the result of poor export performance.  
- Product quality  
 
The quality of domest ically produced paints cannot be considered a factor in the injury to the 
domestic industry because of the highly diversified range and quality of its products, which are suited 
to all categories of consumers in Madagascar and all kinds of media, such as c ar paints, building 
paints, industrial paints and so on.  
5.2 Determining that there are critical circumstances where delay would cause 
damage which it would be difficult to repair  
 
The magnitude  of the decline in the profitability of the domestic industry  of around 30 % over the 
previous two years, and the quick resumption  of increased imports since 2021 are critical 
circumstances where any delay would cause damage that would be difficult to repair . The trend has 
continued in the first 10 month s. In the absence of an adequate measure, the injury to the domestic 
paint industry may worsen . The investigating authority thus concluded that all of the conditions for 
the application of a provisional measure pursuant to Article 6 of the WTO Agreement on Safe guards 
have been met.  
6. Offer of consultations under Article 12.4  
Pursuant to Article 12.4 of the Agreement on Safeguards, Madagascar is prepared to consult with 
those Members having a substantial interest as exporters of the product subject to the proposed 
provisional safeguard measure.  
7. Public hearings  
The ANMCC  is organizing a public hearing for all interested parties at its headquarters in Antanimena, 
Antananarivo , Madagascar on 1 7 January 2 023 at 10 a.m.  
8. Developing countries excluded from the provisional safeguard measure under 
Article 9.1 of the  Agreement on Safeguards  
Afghanistan ; Albania ; Angola ; Antigua and Barbuda ; Argentina ; Armenia ; Bahrain ; Bangladesh ; 
Barbados ; Belize; Benin; Bolivia, Plurinational State of ; Botswana ; Brazil; Brunei Da russalam ; 
Burkina Faso ; Burundi ; Cabo Verde ; Cambodia ; Cameroon ; Central African Republic ; Chad; Chile; 
Colombia ; Congo; Costa Rica ; Côte d'Ivoire ; Cuba; Democratic Republic of the Congo ; Djibouti ; 
Dominica ; Dominican Republic ; Ecuador ; El Salvador ; Eswatini ; Fiji; Gabon; Gambia ; Georgia ; 
Ghana; Grenada ; Guatemala ; Guinea ; Guinea -Bissau ; Guyana ; Haiti; Honduras ; Indonesia ; Israel; 
Jamaica ; Jordan ; Kazakhstan ; Kenya; Kuwait ; Kyrgyz Republic ; Lao People's Democratic Republic ; G/SG/N/7/MDG/8 • G/SG/N/11/MDG/8  
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  Lesotho ; Liberia ; Malawi; Malaysia ; Maldives ; Mali; Mauritania ; Mauritius ; Mexico; Moldova ; 
Mongolia ; Montenegro ; Morocco ; Mozambique ; Myanmar ; Namibia ; Nepal; Nicaragua ; Niger; 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 ; Senegal ; Seychelles ; 
Sierra Leone ; Solomon Islands ; Sri Lanka ; Suriname ; Tajikistan ; Tanzania ; Thailand ; The former 
Yugoslav Republic of Macedonia ; Togo; Tonga; Trinidad and Tobago ; Uganda ; Ukraine ; Uruguay ; 
Vanuatu ; Venezuela, Bolivarian Republic of ; Viet Nam ; Yemen ; Zambia ; Zimbabwe.  
9. Point of contact and correspondence for the purposes of the investigation  
Requests for further information and correspondence regarding the investigation must be sent to:  
Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex -Conquête Antanimena, Antananarivo 101 - Madagascar  
Tel.: +261 34 05  441 41  
Email : dg.anmcc@gmail.com  / dg@anmcc.mg  
Website:  www.anmcc.mg  
 
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