WORLD TRADE  
ORGANIZATION  G/SG/N/16/ECU/4 
8 April 2008 
 
 (08-1552) 
Committee on Safeguards Original:   Spanish 
  
 
NOTIFICATION OF THE INITIATION OF AN INVESTIGATION ON IMPORTS 
TO ECUADOR OF TABLEWARE AND KITCHENWARE 
FROM THE PEOPLE'S REPUBLIC OF CHINA 
 
 The following communication, dated 27 Marc h 2008, has been received from the Permanent 
Mission of Ecuador. 
 
_______________ 
 
 
 Pursuant to Section 16 of the Protocol of Ac cession of the People's Republic of China to the 
World Trade Organization (WTO) and Article 12.1 of  the Agreement on Safeguards, Ecuador hereby 
notifies the Committee of Resolution No. 08-031, of  3 March 2008, of the Under-Secretariat for Trade 
and Investment of the Ministry of Industry a nd Competitiveness, in its capacity as investigating 
authority of the Government of Ecuador, as publishe d in Official Journal No. 297 of 18 March 2008, 
initiating an investigation concerning imports of tableware and kitchenware classified under tariff 
subheadings 6911.10.00 (tableware or  kitchenware) and 6912.00.00 (cer amic tableware, kitchenware, 
other household articles and toilet articles, other th an of porcelain or china), originating in and 
proceeding from the People's Republic of China, to  determine whether such imports have caused or 
threaten to cause serious injury to the domes tic industry producing like or directly competitive 
products. 
 
 To that end, the text of the Resolution is attached hereto.  G/SG/N/16/ECU/4 
Page 2  
 
  RESOLUTION No. 08-031 
 
Resolution Initiating an Investigation at the Request of the Companies Cerámica Andina C.A. 
and ARTESA Cía. Ltda. on Chinese Imports of  Tableware and Kitchenware Classified 
under NANDINA Subheadings 6911.10.00 and 6912.00.00 
 
THE UNDER-SECRETARIAT FOR TRADE AND INVESTMENT OF  
THE MINISTRY OF INDUSTRY AND COMPETITIVENESS, 
IN ITS CAPACITY AS INVESTIGATING AUTHORITY, 
 
WHEREAS: 
  
Resolution No. 320 of the Foreign Trade a nd Investment Council (COMEXI), published in 
Official Journal No. 105 of 16 September 2005,  establishes a safeguard mechanism to prevent 
products originating in and proceeding from th e People's Republic of China from causing or 
threatening to cause market disruption for domestic producers of like or directly competitive products; 
 
In a communication dated 20 August 2007, the companies Cerámica Andina C.A. and 
ARTESA Cía. Ltda. requested an investigation with a view to imposing provisional safeguard 
measures for a period of 200 days and definitive measures for a period of two years on imports of 
tableware and kitchenware of subheadings 6911.10 .00 (tableware or kitchenware) and 6912.00.00 
(ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or 
china);  
In order to supplement its preliminary analysis of the information submitted, the investigating 
authority sent communication No. 2007-175 SCI-MIC, dated 21 September 2007, asking the applicant 
companies to submit the following additional informati on:  impact of the imports on market prices;  
evidence of the representativeness of the companies in relation to the domestic industry;  import data 
showing increases in absolute terms or relative to domestic production;  information on Chinese 
exports to Ecuador, based on statistics from Ch ina for comparative purposes;  and financial 
statements, employment figures, changes in produc tion and productivity levels, domestic sales and 
inventories.  They were also asked to explain the rationale of the causal link demonstrating that 
increased imports of the products under investigation are causing the market disruption, and that any 
delay in adopting measures would cause damage  which it would be difficult to repair;  
 
The applicant companies account for approximately 90 per cent of domestic production; 
 
The investigating authority considers that the applicant companies constitute a major 
proportion of the domestic industry;  
The products imported from China are alike to  or directly competitive with domestic 
products, that is, ceramic tablewar e, kitchenware and other household items not of porcelain or china 
(i.e. of earthenware), classified under NANDINA  subheading 6912.00.00 (directly competitive 
products);  and china or porcelain tablewar e or kitchenware classified under NANDINA 
subheading 6911.10.00 (like products);   The relevant parts of Section 16 of Chin a's Protocol of Accession to the World Trade 
Organization (WTO) and COMEXI Resolution No . 320 provide that WTO Members may take 
measures to prevent or remedy market disruption cau sed by significant imports of products of Chinese 
origin which are alike to or directly comp etitive with domestic products;  for that purpose 
consideration should be given to objective factors, such as the volume of imports, the impact of the  G/SG/N/16/ECU/4 
 Page 3 
 
 
  imports on the prices of like or directly competitiv e items, and the impact of such imports on the 
domestic industry;  
Relying on data supplied by the Central Bank of Ecuador, the applicants submit that, in terms 
of physical units, imports of subheading 6912.10.0 0 from the rest of the world (excluding China) 
grew by 422 per cent, from 202.7 mt in 1996 to 1057. 6 mt in 2006, which is considerably below the 
32,700 per cent growth in imports from China.  In terms of f.o.b. values, the imports rose by 242 per cent, from US$521,300 in 1996 to US$1,782,000 in 2006, which is also significantly below the 22,066 per cent growth in imports from China.  Throughout the period under consideration, the 
average f.o.b. price per kilogram of these imports greatly exceeded the price of the Chinese product.  
For example, in 2006 it was US$1.68 (well above th e US$0.50 for the Chinese product).  Similarly, 
the c.i.f. price was US$1.72 (well above the US$0.66 for the Chinese product).  
The companies also state that the following conclusions can be drawn from the trends in 
value, volume and price of Chinese imports under subh eading 6911.10.00.  In te rms of physical units, 
these imports grew by 498 per cent, from 1374.7 mt in  1996 to 8217.7 mt in 2006.  In terms of f.o.b. 
values, Chinese imports grew by 433 per cent, from US$848,200 in 1996 to US$4,518,900 in 2006.  
As a result of this strong growth, imports in phy sical units accounted for 95 per cent of total imports 
in 2006, compared to only 38 per cent in 1996.  The average f.o.b. price per kilogram of imports from China during the period 2000-2006 (almost US$0.50) was significantly lower than the price for the period 1996-1999 (over US$0.60). 
 
According to the applicants, imports from Chin a have increased by 498 per cent in terms of 
weight but by only 433 per cent in f.o.b. value terms.  This is due to the fall in the average f.o.b. price 
per kilogram, which conceals the true extent to which Chinese products have penetrated the local 
market.  The applicants therefore considered it im portant to present the import figures by weight and 
by value. 
 
Total domestic output by the two applicant co mpanies has declined sharply compared to 
ten years ago.  Far from reflecting natural market growth, total domestic pr oduction fell by 40 per cent 
– from 7.2 to 4.3 million kilograms – between 1996 and 2006.  The applicant companies' production 
also dropped by 26 per cent, from 5.2 to 3.9 million kilograms; 
 
According to the applicant companies, imports of products classified under the two tariff 
subheadings, proceeding from and originating in the People's Republic of China, are causing serious 
injury to domestic production;  
Relying on the figures from the Central Bank of  Ecuador, the investigating authority found 
that during the period 2002-2006 there had been fluc tuations in imports of ceramic tableware and 
kitchenware of subheading 6911.10.00, with varia tions of -12 per cent, 26 per cent, -20 per cent, 
32 per cent and -8 per cent at the end of 2003, 2004, 2005, 2006 and 2007, respectively;  imports of subheading 6912.00.00 also fluctuated, with variat ions of -24 per cent, 41 per cent, 43 per cent, 
-11 per cent and 23 per cent at the end of 2003, 2004, 2005, 2006 and 2007, respectively; 
 
The application and additional information s ubmitted by the companies Cerámica Andina 
C.A. and ARTESA Cía. Ltda and the preliminary assessment conducted by the investigating authority 
show there to be sufficient indications supporting a presumption of market disruption and causal link 
between the imports of ceramic tableware and kitc henware and the serious injury claimed by the 
applicant companies, and therefore sufficient elements  to warrant the initiation of an investigation;  
and G/SG/N/16/ECU/4 
Page 4  
 
  By virtue of the powers conferred upon it by Article 8 of COMEXI Resolution No. 320: 
 
HEREBY DECIDES THE FOLLOWING: 
 
Article 1 .- To initiate the investigation requested by  the companies Cerámica Andina C.A. and 
ARTESA Cía. Ltda., pursuant to Section 16 of the Protocol of Accession of the People's Republic of 
China to the World Trade Organization (WTO) and COMEXI Resolution No. 320.   Article 2 .- The products under investigation are ta bleware and kitchenware of subheadings 
6911.10.00 (tableware or kitchenw are) and 6912.00.00 (ceramic ta bleware, kitchenware, other 
household articles and toilet articles, other than of porcelain or china), originating in and proceeding 
from the People's Republic of China.  Article 3 .-  In the course of the investigation, the in vestigating authority shall conduct a transparent 
and objective assessment of all the information and documentation submitted by the interested parties 
in order to establish whether the increased imports of  the products of Chinese origin which are alike to 
or directly competitive with domestic products are ca using or threatening to cause market disruption.  
The appropriateness of applying the requested safegua rd measure shall be determined on the basis of 
the outcome of this assessment.  
 
Article 4 .- As part of the investigation process, the i nvestigating authority shall foster consultation 
meetings between the interested parti es at which they can state their case.  
 Article 5 .- In order to determine the role played by Chinese imports of tableware and kitchenware in 
the market disruption, the investigating authority establishes the period of investigation as the period 
covering the years 2002-2007. 
 
Article 6.-   Information submitted on a confidential basis shall be treated as such, subject to the 
approval of the investigating authority.   Article 7.-  In accordance with Article 18 of COMEXI R esolution No. 320, the investigating authority 
shall have a period of ten working days to submit to COMEXI the report relating to the request for 
provisional safeguard measures.  
 Article 8.-   Pursuant to Article 8 of COMEXI Resolu tion No. 320, the investigating authority shall 
notify the WTO Committee on Safeguards and the interested parties of the initiation of the investigation upon publication of this Resolution in the Official Journal. 
 
Done at Quito (Metropolitan District) on 3 March 2008.   
Genaro Baldeón H. 
Under-Secretary for Foreign Trade and Investment  
 
__________