WORLD TRADE  
ORGANIZATION  G/SG/N/6/TUR/14 
G/SG/N/7/TUR/2 
G/SG/N/11/TUR/10 
4 June 2008 
 (08-2621) 
Committee on Safeguards Original:   English 
  
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 
 
TURKEY 
 
(Cotton Yarn
) 
   The following communication, dated 3 June 2008, is being circulated at the request of the 
Delegation of Turkey.   
 
_______________ 
 
 
We enclose a notification pursuant to Article 12.1(a) of the Agreement on Safeguards, on 
initiation of a safeguard investigation on the impor ts of cotton yarn; a notification pursuant to 
Article 12.4 of the Agreement on Safeguards, be fore taking provisional safeguard measures for 
imports of cotton yarn; and a notification pursuant to Article 9, footnote 2 of the Agreement on 
Safeguards, on taking a decision not to apply th e measure to products originating in developing 
countries. 
 
A. 
NOTIFICATION UNDER ARTICLE 12.1( A) OF THE AGREEMENT ON SAFEGUARDS ON INITIATION 
OF AN INVESTIGATION AND THE REASONS FOR IT  
1. The date when the investigation was initiated 
The investigation was initiated on 23 May 200 8.  The related Communiqué was published in 
the Official Gazette on the same date. 
 
2. The product subject to the investigation 
The product under investigation is cotton yarn (o ther than sewing thread), hereinafter referred 
to as "the product concerned". 
 
The HS codes under which the product concerned is currently classified are 52.05, 52.06 and 
52.07.   
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  3. The reasons for the initiation of investigation 
The investigation was initiated following an evaluation of a safeguard petition from the 
domestic industry and on the basis of the evidence and the information contained therein. 
 
The information currently available indicates th at there have been recent, sudden and sharp 
increases in imports of the product concerned both in absolute terms, and relative to domestic 
production or consumption. 
 
Imports 2003 2004 2005 2006 2007 
Volume (000 ton) 26.3 27.2 44.3 64.6 142.2 
 
The information currently available also s hows a situation of increasing inventories, 
decreasing domestic production, domestic sales, employment and capacity utilization in 2007 and 
continuously declining market share for domestic industry.  4. Further information 
Interested parties must make themselves know n within the period of 30 days after the 
initiation of the investigation.  
 
Interested parties must submit their views and questionnaire replies or any other information 
within the period of 30 days after the initiation of the investigation.  The questionnaires can be 
obtained from website below: 
http://www.dtm.gov.tr/dtmweb/index.cfm?acti on=detay&yayinID=1993&i cerikID=2151&dil=TR 
Interested parties may apply in writing to be heard by the competent authority within 30 days 
after the initiation of the investigation. 
 
All submissions and requests made by interested parties must be made in writing, and must 
indicate the name, address, e-mail address, telephone and fax numbers  of the interested party.  
 The address of the competent authority for correspondence is:  
 
 Undersecretariat for Foreign Trade  Directorate General for Imports 
 Department of Safeguards  Tel:  +90 312 222 65 00 / +90 312 204 77 17  Fax:  +90 312 212 87 65 / +90 312 212 87 11  Web page: http://www.dtm.gov.tr 
E-mail: korunma@dtm.gov.tr 
  
B. 
NOTIFICATION UNDER ARTICLE 12.4  BEFORE TAKING A PROVISI ONAL SAFEGUARD MEASURE  
1. The product subject to the proposed provisional safeguard measure 
The product subject to the proposed provisional safeguard measure is cotton yarn (other than 
sewing thread), hereinafter referre d to as "the product concerned". 
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  The HS codes under which the product concerned is currently classified are 52.05, 52.06 and 
52.07. 
 
2. The proposed provisional safeguard measure 
It is proposed to impose provisional safeguard me asure in the form of specific duty which will 
be implemented as US$1.03 per net kilogram. 
 
3. Entry into force of the proposed  provisional safeguard measure 
The provisional safeguard measure is proposed to  enter into force by publishing the approval 
of the Council of Ministers in the Official Gazette. 
 
4. The expected duration of the provisional safeguard measure 
The provisional safeguard measure is proposed to be in force for two hundred days from the 
date of its introduction. 
 
5. The basis for: 
(i) Making a preliminary determination, as provided for in Article 6, that increased 
imports have caused or are th reatening to cause serious injury 
When developments in world cotton markets sin ce 2004 are evaluated, it is observed that the 
increase rate in world cotton consumption has been mo re than the increase rate in world cotton stocks. 
The fact that the increase in world cotton consump tion in high rates indicates to an increase in world 
cotton yarn production in unfor eseen rates in recent years. 
 On the other hand, domestic producers of cotton yarn have been in difficulties in competition 
with imported products due to the fact that "New  Turkish Lira (YTL)" has appreciated against other 
foreign currencies.  Furthermore, as a result of increase in world cotton yarn production in unforeseen 
rates in recent years, domestic products have been  face to face with the price pressure of imported 
products. 
 
INCREASE IN IMPORTS 
 
A preliminary analysis of the increase in imports  to Turkey of the product concerned has been 
carried out over the period from 2003 to 2007, both in absolute terms, and relative to domestic 
production. 
 
Imports of the product concerned increa sed considerably in that period. 
 
Imports 2003 2004 2005 2006 2007 
Volume (000 ton) 26.3 27.2 44.3 64.6 142.2 
 
Imports of the product concerned have conti nuously increased since 2003.  Imports have 
reached 142.2 thousand tons in 2007, as it was 26.3 th ousand tons in 2003.  In 2007, imports have 
increased by 120 per cent with respect to 2006. 
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  Imports/Domestic production 2003 2004 2005 2006 2007 
Percentage (%) 2.2 2.4 3.6 4.8 10.9 
  
It is observed that the ratio of imports to  domestic production has continuously increased 
between the years 2003 and 2007.  As the quantity of  imports were 2.2 per cent of total quantity of 
domestic production in 2003, it reached 10.9 per cen t of that.  The ratio of imports to domestic 
production has been doubled in 2007. 
 
Based on import data for the period of 2003-2007, it is concluded on a preliminary basis that 
there is a recent, sudden and sharp increase in impor ts, both in absolute terms and relative to domestic 
production. 
 
SERIOUS INJURY OR THREAT OF SERIOUS INJURY  
In order to make a determination of serious inju ry or threat thereof to the domestic producers 
of the like product, a preliminary evaluation of all relevant factors of an objective and quantifiable nature having a bearing on their situation has been undertaken.  In this evaluation, the data regarding 
domestic production that were provided by applicants were used.  For some of the indicators below, 
which are separable in monthly periods, the data of 2007 are demonstrated in two parts (January-
September and October-December) in  addition to the annual data.  
 
(i) Consumption 
Consumption  2003 2004 2005 2006 2007 
Quantity (000 ton) 973 959 979 1,142 1,134 
 
The data in the table show an increase in co tton yarn demand in Turkey between the years 
2004 and 2006.  Total consumption has slightly decreased in 2007. 
  
(ii) Domestic Production 
Production 2003 2004 2005 2006 2007 2007 
(1-9) 2007 
(10-12) 
Quantity (000 ton) 1,170 1,150 1,225 1,354 1,310  
1,012 298 
 
Looking at the domestic production figures, it is  observed that production decreased in 2007. 
As the data of the first nine months of 2007 compared with the last 3 months, monthly average of 
domestic production dropped by 12 per cent. 
 (iii) Market share of domestic production 
Market share 2003 2004 2005 2006 2007 
Percentage (%) 97.3 97.2 95.5 94.3 87.5 
 
The market share of domestic production con tinuously decreased between the years 2003 and 
2007.  The market share, which was 97.3 per cent in 2003, has gone down to 87.5 per cent in 2007. 
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  (iv) Capacity and capacity utilization rate 
Capacity 2003 2004 2005 2006 2007 
Quantity (000 ton) 1,665 1,690 1,721 1,803 1,929 
 
The capacity has increased in the period of 2003-2007 and reached 1.929 thousand tons. 
 
Capacity Utilization 2003 2004 2005 2006 2007 2007 
(1-9) 2007 
(10-12)
Percentage (%) 70 68 71 75 68  
70 62 
 
The capacity utilization, which was 75 per cent in  2006, decreased to 68 per cent in 2007.  As 
the data of the first nine months of 2007 compar ed with the last 3 months, monthly average of 
capacity utilization has fallen from 70 per cent to 62 per cent. 
 (v) Domestic sales 
Domestic sales 2003 2004 2005 2006 2007 2007 
(1-9) 2007 
(10-12)
Quantity (000 ton) 947 931 935 1,077 992  
783 209 
 
The domestic sales of producers decreased from 1,077 thousand tons in 2006 to 992 thousand 
tons in 2007.  As the data of the first nine mont hs of 2007 compared with the last 3 months, monthly 
average of domestic sales has dropped by 20 per cent. 
 (vi) Inventories 
End of period inventories 2003 2004 2005 2006 2007 
Quantity (000 ton) 89 91 132 103 167 
 
It is observed that the end of period inventories of domestic producers has reached 
167 thousand tons.  As compared with the quantity of the end of period inventories in 2006, it increased by 62 per cent in 2007. 
 
(vii) Employment 
Employment 2003 2004 2005 2006 2007 
Number of workers (person) 43,499 42,732 41,147 40,985 39,430 
 
The employment figures of domestic producers continuously decreased between the years 
2003 and 2007.  The number of workers in production, which was 43,499 in 2003, has gone down to 39,430 in 2007. 
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  (viii) Productivity 
Productivity 2003 2004 2005 2006 2007 
Production/Employment 
(Ton/Person) 27 27 30 33 33 
 
Looking at the productivity figures of domestic  production operations, it is observed that 
productivity increased from 27 ton/person in 2003 to 33 ton/person in 2007.   
 (ix) Profitability 
Profitability 2003 2004 2005 2006 2007 2007 
(1-9) 2007 
(10-12)
Percentage (%) 9 4 6 2 3  
4 -9 
 
The profitability rate, which was 9 per cent in 2003, has gone down to 3 per cent in 2007.  In 
the last 3 months of 2007, domestic producers had to  continue their operations  with an average loss 
about 9 per cent. 
 
CAUSATION 
 
In order to examine the existence of a causal link between increased imports and the serious 
injury, and in order to ensure that  injury caused by other factors is not attributed to increased imports, 
the effects of the following factors were analyzed: 
 
-  Effect of increased imports: 
 Imports have increased from 26.3 thousand t ons in 2003 to 142.2 thousand tons in 2007, 
which means a 441 per cent increase in the level of im ports.  The market share of imports increased 
from 2.7 per cent in 2003 to 12.5 per cent in 2007.  Domestic prices were unde rcut by 28.1 per cent in 
the period of last three months of 2007.  
 For the foregoing reasons, the preliminary conclu sion is that there is a correlation between the 
increase in imports and the serious injury suffered by  the domestic producers, and that the increase in 
imports has had injurious effects on the domestic i ndustry particularly in terms of downward pressure 
on prices and a reduction in domestic sales and market share of the domestic industry.  
 
-  Other factors:  
A preliminary analysis of other factors that ma y have contributed to the serious injury or 
threat of serious injury suffered by domestic producers has been carried out. 
 
Demand for the product concerned has not decr eased over the period 2003-2007; the decrease 
in consumption in 2007 is under 1 per cent.  Competition among domestic producers has not created 
an injurious effect.  The production technology used by the domestic industry is the same with the 
technology used by foreign producers.  There has not appeared any substitute product for cotton yarn, 
which could affect the consumer preferences.  Cha nges in financial costs did not contribute to the 
injury suffered by the domestic industry.  As domestic producers' exports  have not significantly  G/SG/N/6/TUR/14 
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  changed between the years 2003 and 2007, there is no link between the changes in exports and the 
injurious effects observed.  
 
According to this preliminary analysis, the serious  injury or threat of serious injury is not 
attributable to the factors other than the increase in imports. 
 
 (ii) Determining the existence of critical circumstances where delay would cause damage 
which it would be difficult to repair 
 
The investigating authority has made a prelimin ary determination that critical circumstances 
exist in which delay would cause damage which it woul d be difficult to repair .  As indicated above, 
serious injury is clearly imminent.  Domestic pr oducers are already suffering  a decline, notably in 
market share, domestic sales and profitability, as a result of increased imports. 
 
Available information relating to imports of the product concerned in the last six months of 
2006 and 2007 indicates that imports continue to incr ease with a greater rate than the previous years. 
 
Period Volume (000 ton) Rate of Increase (%) 
2006 (7 - 12) 32.831 - 
2007 (7 - 12) 88.370 169 % 
  
Sudden and sharp increase in imports especially  in the second part of 2007 has created a 
downward pressure on prices and cause deteriorati on in some economic indicators of domestic 
producers.  In the last 3 months of 2007, monthl y average domestic production and domestic sales 
have decreased by 12 per cent and 20 per cent respectively, as compared with the data of first 
9 months of the same year.  In this period, capacity utilization of domestic producers has decreased 
from 70 per cent to 62 per cent.  In the last 3 mont hs of 2007, domestic producers had to continue 
their operations with an average loss about 9 per cent. 
 It can be anticipated that without the appli cation of a provisional safeguard measure, imports 
of the product concerned into Turkey will continue at a high level; and particularly as a result of the 
price undercutting, the domestic industry will co ntinue to lose its share in domestic market. 
 There exists a critical situation in which any delay in the adoption of a provisional safeguard 
measure would cause damage which it would be difficult to repair.  
 
6. Offer of consultations under Article 12.4 
Consistent with Article 12.4 of the Agreement on Safeguards, Turkey is prepared to consult 
on the provisional safeguard measure with those Me mbers having a substantial interest as exports of 
the product concerned at any time after 23 May 2008.   G/SG/N/6/TUR/14 
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  C. 
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2 UPON TAKING A DECISION NOT TO APPLY 
THOSE PROVISIONAL SAFEGUARD MEASURE TO  CERTAIN PRODUCTS ORIGINATING IN 
DEVELOPING COUNTRIES  
1. The measure 
It is proposed to impose provisional safegua rd measure in the form of specific duty as 
described in the notificatio n under Article 12.4 above. 
 
2. The product subject to the measure 
The measure applies to the products described  in paragraph 1 of the notification under 
Article 12.4 above. 
 
3. The developing countries to which the measure is not applied under Article 9.1 of the 
Agreement on Safeguards  
The developing countries in the list below are excluded from the measure as they export less 
than 3 per cent of imports to Turkey. 
 Afghanistan; Algeria; Antigua and Barbuda; A ngola; Argentina; American Samoa; Anguilla; 
Antarctica; Aruba; Azerbaijan; Barbados; Banglad esh; Burkina Faso; Bahrain; Burundi; Benin; 
Bolivarian Republic of Venezuela; Brunei Darussal am; Bolivia; Brazil; Bahamas; Bhutan; Botswana; 
Belize; Bermuda; Bouvet Island; British Virgin Is lands; British Indian Ocean Territory; Democratic 
Republic of Congo; Central African Republic; Con go; Côte d'Ivoire; Cameroon; Chad; Colombia; 
Costa Rica; Cuba; Cape Verde; Cayman Islands; Chile; Christmas Islands; Cocos Islands; Cook 
Islands; Djibouti; Dominica; Dominican Republic; Ecua dor; Eritrea; Ethiopia; Fiji; Federated States 
of Micronesia; Falkland Islands; French Polynesia;  French Southern Territories; Gabon; Grenada; 
Ghana; Gambia; Georgia; Greenland; Guinea; E quatorial Guinea; Guatemala; Guinea-Bissau; 
Guyana; Gibraltar; Guam; Honduras; Haiti; Heard Is land and McDonald Islands ; Indonesia; Iraq; Iran 
(Islamic Republic of); Jamaica; Jo rdan; Kazakhstan; Kenya, Cambodia, Kiribati, Comoros, St Kitts 
and Nevis, Kuwait, Kyrgyzstan; Laos; Lebanon; St Lucia; Sri Lanka; Liberia; Lesotho; Libyan Arab Jamahiriya; Morocco; Madagascar; Marshall Islands; Mali; Moldova; Mongolia; Mauritania; 
Mauritius; Malaysia; Maldives; Malawi; Mozambique; Macao ; Mayotte; Mexico; Montserrat; 
Namibia; Niger; Nigeria; Nicaragua; Nepal; Na uru; Netherlands Antilles; New Caledonia; Niue 
Island; Norfolk Island; Northern Mariana Is lands; Oman; Panama; Peru; Papua New Guinea; 
Philippines; Palau; Paraguay; Pitcairn; Qatar; Ru ssian Federation; Rwanda ; Samoa; Saudi Arabia; 
Solomon Islands; Seychelles; Sudan; Sierra Le one; Senegal; Somalia; Suriname; Sao Tomé and 
Principe; El Salvador; Swaziland; South Afri ca; South Georgia and South Sandwich Islands; 
St Helena and dependencies; St Pierre and Mique lon; Tajikistan; Thailand; Togo; Tunisia; Tonga; 
East Timor; Trinidad and Tobago; Tuvalu; Tanzan ia; Tokelau; Turks and Ca icos Islands; Ukraine; 
United Arab Emirates; United States Minor outlying islands; Uganda; Uruguay; St Vincent; Vietnam; 
Vanuatu; Virgin Islands of USA; Wallis and Fu tuna Islands; Yemen; Zambia; and Zimbabwe. 
 
__________