WORLD TRADE  
ORGANIZATION   
G/SG/N/6/EGY/6 
G/SG/N/7/EGY/5 
G/SG/N/11/EGY/3 5 March 2012 
 
(12-1227) 
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 
 
EGYPT 
 
(Cotton Textile and Mixed Cotton Textile) 
  
The following communication, dated 1 March 2012, is being circulated at the request of the 
Delegation of Egypt. 
 
_______________ 
 
 
 The Arab Republic of Egypt, hereby wishes to  notify the Committee on Safeguards:  pursuant 
to Article 12.1(a) of the Agreement on Safeguards of  the initiation of a safeguard investigation on the 
imports of Cotton Textile, Mixed Cotton Textile, a nd pursuant to article 12.4 of the Agreement on 
Safeguards, before taking a provisional safeguard m easure against imports of Cotton Textile, Mixed 
Cotton Textile;  and a notification pursuant to Artic le 9, footnote 2 of the Agreement on Safeguards, 
on taking a 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. The date when the investigation was initiated 
  The investigation was initiated further to an approval of the Minister of Foreign Trade and 
Industry dated 23 February 2012.  
2. The product subject to the investigation 
  Cotton Textile and Mixed Cotton Textile.  Th e product is classified under HS tariff item 
numbers:  52 08 52 09, 52 10, 52 11, 52 12, 54 07, 54 08, 55 12, 55 13, 55 14, 55 15 and 55 16 within the Egyptian Customs Tariff Schedule.  G/SG/N/6/EGY/6 
G/SG/N/7/EGY/5 G/SG/N/11/EGY/3 
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  3. The reasons for the init iation of investigation 
 
 The investigation was initiated after examina tion of a documented safeguards petition filed by 
Cotton and Textile Industries Holding Co. on behalf  of the Masr for Yarn and Textile/Almahala 
Alkoubra which it alleged that increased imports of the subject product had caused serious injury to 
the domestic industry producing similar products.   The data currently available also shows a s ituation of sharply declining in domestic sales, 
domestic production and market share for the domestic industry, decreasing in the number of workers, 
decreasing in Capacity utilization and workers' pr oductivity, continuation losses, in conjunction with 
the increase in imports.     Accordingly, it was established that there was sufficient evidence in the application to justify 
the initiation of the investigation in order to dete rmine whether or not the increase of imports had 
caused serious injury to the domestic industry.  
4. Further information 
 
 Interested parties must make themselves known to the investigating authority within a period 
of 30 days after the initiation of the investigation.   
  Any information which the interested parties may wish to submit before the investigating 
authority should be submitted in writing; and an y request for a hearing should be submitted within 
30 days following the initiati on of this investigation. 
 
B. N
OTIFICATION 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 provisiona l safeguard measure is Cotton Textile and 
Mixed Cotton Textile.  The product is currently classified under HS tariff item numbers:  52 08 52 09, 
52 10, 52 11, 52 12, 54 07, 54 08, 55 12, 55 13, 55 14, 55 15 and 55 16 within the Egyptian Customs Tariff Classification. 
2. The proposed provisional safeguard measure 
 
 It is proposed to impose a provisional safeguard  measure in the form of additional duty 10% 
of the CIF value and not less than 3.33 per kilo /L.E net.  
3. Entry into force of the propo sed provisional safeguard measure 
 
 The provisional safeguard measure is proposed to enter into force, with the publication of the 
decree of the Minister of Foreign Trade and Industry , which is published on 29 February 2012 in the 
Official Gazette.  
 
4. The expected duration of the provisional safeguard measure 
 
The provisional safeguard measure will be a pplied for 200 days from the date of publication 
in the Official Gazette.    G/SG/N/6/EGY/6 
 G/SG/N/7/EGY/5 
 G/SG/N/11/EGY/3 
 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 are causing or threatening to cause serious injury:   
Increase in imports 
 
 A preliminary analysis of the increase in impor ts into the Egyptian market of the subject 
product has been carried out over the period 2008/ 2009 to 2010/2011, both in absolute terms, and 
relative to domestic production.  The analysis fo und that imports of the product concerned increased 
considerably in that period.   
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Imports volume/thousand meter 278,926 570,327 2,209,235 
Change  %   104 287 
Change Imports/Domestic Production   98 385 
 
 The information indicates an increase in imports by 104 percent in 2009/2010 when compared 
to 2008/2009, and an increase by 287 percent in 2010/2011 when compared to 2009/2010. 
  The information further indicates that the cha nge of imports as a percentage of domestic 
production increased by 98 per cent in 2009/2010 wh en compared to 2008/2009, and decreased by 
385 per cent in 2010/2011 when compared to 2009/2010.    Serious injury   
 
 In order to make a preliminary determinati on 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.   
 
1. Market share 
 
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Change in Market sh are of the Domestic 
Industry  (45) (81) 
Change in Market share of imports  3 3 
 
The market share of the domestic industry decreased by 45 percent in 2009/2010 when 
compared to 2008/2009, and then decreased by 81 percent in 2010/2011 when compared to 
2009/2010.  At the same time, the market share of imports increased by 3 percent in 2009/2010 when compared to 2008/2009, and then increased by 3 pe rcent in 2010/2011 when compared to 2009/2010. 
 
2. Domestic sales 
 
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Change in Sales volume  10 (27) 
 G/SG/N/6/EGY/6 
G/SG/N/7/EGY/5 G/SG/N/11/EGY/3 
Page 4 
  
  The domestic industry's sales increased by 10  percent in 2009/2010 when compared to 
2008/2009; and decreased by 27 percent in 20 10/2011 when compared to 2009/2010.   
 3. Production 
 
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Change in Production volume   3 (20) 
 
 Production increased by 3 percent in 2009/2010 when compared to 2008/2009, and finally 
decreased by 20 per cent in 2010/2011 when compared to 2010/2011.   
 
4. Productivity 
 
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Change in Productivity  - 9 (16) 
 
 Productivity increased by 9 percent in 2009/2010 when compared to 2008/2009 and decreased by 16 percent in 2010/2011 when compared to 2009/2010.  5. Capacity utilisation rate 
 
 2008/2009 2009/2010 2010/2011 
Change in Capacity utilization   2 (28) 
 
 The capacity utilisation increased by 2 percen t in 2009/2010 when compared to 2008/2009, 
and in 2010/2011 the capacity utilisation decreased by 28 percent when compared to 2009/2010.  
 
6. Profit and Loss 
 
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Change in Losses  73 (12) 
 
 Losses increased by 73 percent in 2009/2010  when compared to 2008/2009, in 2010/2011 
losses decreased by 12 percent when compared to 2009/2010.    7. Employment 
 
(year/year percentage) 2008/2009 2009/2010 2010/2011 
Number of employees   (5) (5) 
 
 The number of employees decreased by 5 percen t in 2009/2010 when compare to 2008/2009.  
In 2010/2011 the employment decreased by 5 per cent when compared to 2009/2010.  
 
Conclusion 
 
 There has been a significant increase in impor ts of the product concerned in year 2010/2011 
in both absolute and relative terms, which led to a deterioration of the indices of the domestic industry  G/SG/N/6/EGY/6 
 G/SG/N/7/EGY/5 
 G/SG/N/11/EGY/3 
 Page 5 
  
  represented in a decline in the domestic sales and their market share, a decline in the production and 
productivity, decline in Capacity utilization, decline in Employment in addition to continuation losses. 
 Causation 
 
 For the foregoing reasons, the preliminary conclu sion is that there is a correlation between the 
significant increase in imports and serious in jury suffered by the domestic industry. 
 
(b) Determining the existence of critical ci rcumstances where delay would cause damage, 
which will be difficult to repair 
 
A preliminary determination has been made that  critical circumstances exist in which delay 
would cause damage which would be difficult to repair.   
 
As indicated above, the serious injury suffered by the domestic industry has worsened during 
the 2010/2011 with the ever continuing increase in th e volume of imports.  Given the rate of increase 
of imports and the situation of the domestic industry,  it is considered that the latter will suffer damage, 
which will be difficult to repair, in the ab sence of a provisional safeguard measure.   
 
6. Offer of Consultations under Article 12.4  
Consistent with Article 12.4 of the Agreement on Safeguards, Egypt is prepared to consult on 
the provisional safeguard measure with those Memb ers having a substantial interest as exporters of 
the subject products. 
 
  
N
OTIFICATION UNDER ARTICLE 9, FOOTNOTE 2 UPON TAKING A DECISION  
NOT TO APPLY THE PROVISIONAL SAFEGUARD MEASURE TO CERTAIN  
PRODUCTS ORIGINATING IN DEVELOPING COUNTRIES  
 
Developing Countries Exempted from the Safeguard Measure 
Imports from developing country Members shall not be subject to the proposed provisional 
safeguard measure as long as each Member's imports do not exceed three per cent of total imports into 
Egypt and the share of the Members with less th an three per cent import share do not collectively 
account for more than nine per cent of total imports into Egypt.   
 G/SG/N/6/EGY/6 
G/SG/N/7/EGY/5 G/SG/N/11/EGY/3 
Page 6 
  
   The address of the competent authority for correspondence is:   
 
Ministry of Foreign Trade and Industry  
Trade Agreements Sector 
International Trade Policies Department El Maleya Towers - To wer No. 6 - 9th floor  
Extension of Ramses St. - Naser City - Cairo Tel:  (202) 23421951 / (202) 23421950 
Fax:  (202) 23421946 
E-mail:  tas@tas.gov.eg  Website:  www.tas.gov.eg  
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