WORLD TRADE  
ORGANIZATION   
G/SG/N/6/EGY/7 
G/SG/N/7/EGY/6 
G/SG/N/11/EGY/4 6 June 2012 
 
(12-2964) 
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 
 
(Polypropylene) 
  
The following communication, dated 1 June 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 Polypropylene,  and pursuant to Artic le 12.4 of the Agreement on Safeguards, before 
taking a provisional safeguard measure against impor ts of Polypropylene; and a notification pursuant 
to Article 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 Industry & Foreign 
Trade dated 31/5/2012.    
 
2. The Product subject to the Investigation 
 
 Polypropylene.  The product is classified under HS tariff item numbers (other:  39.02.10.90 within the Egyptian Customs Tariff Schedule).   G/SG/N/6/EGY/7 
G/SG/N/7/EGY/6 G/SG/N/11/EGY/4 
Page 2 
  
  3. The Reasons for Initiation of Investigation 
 
 The investigation was initiated after examin ation of a properly documented safeguards 
application filed by Oriental Petrochemicals Co mpany, and Egyptian Propylene & Polypropylene 
Company (hereinafter referred to as "the Domestic Industry").  The Domestic Industry alleged that the 
significant and sudden increase in imports of the s ubject product had caused serious injury to the 
domestic industry produc ing similar products. 
 
 The data currently available also shows a situa tion of sharply declining in domestic sales, and 
its market share, decreasing in Capacity utilizati on and workers' productivity, continuation in losses, 
and increasing in inventory in conjunction with the significant and sudden 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 de termine whether 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 parti es may wish to submit before the Investigating 
Authority, should be submitted in writing; and any request for a h earing 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 Propo sed Provisional Safeguard Measure 
 
The product subject to the proposed provisional safeguard measure is Polypropylene.  The 
product is currently classified under HS tariff item num bers "other:  39.02.10.90" 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 15% 
of the CIF value and not less than 1605 L.E/ton. 
 
3. Entry into Force of the Proposed 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. 
 
4. The Expected Duration of the Provisional Safeguard Measure 
 
The provisional safeguard measure shall be a pplied for 200 days from the date of publication 
in the Official Gazette.   G/SG/N/6/EGY/7 
 G/SG/N/7/EGY/6 
 G/SG/N/11/EGY/4 
 Page 3 
  
  5. The Basis for:   
 
5.1 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 from 2008 to  2011, both in absolute terms, and relative to 
domestic production.  The analysis found that imports of the product concerned increased 
considerably in that period.   
(year/year percentage) 2008 2009 2010 2011 
Imports Volume/Ton 16710 102899 154001 453622 
Change  %  516 50 195 
Change  in Imports/Domestic Production %  510 60 144 
 
 The information indicates an increase in imports by 516 per cent in 2009 when compared to 2008, and an increase by 50 per cent in 2010 when compared to 2009.  In 2011, the imports 
increased significantly by 195 per cent when compared  to 2010.  Although such increase's percentage 
in 2009 was significant when compared to 2008, ye t the volume of imports increased by 440 per cent 
in 2011 when compared to 2009.   The information further indicates that the cha nge of imports as a percentage of domestic 
production increased by 510 per cent in 2009 when compared to 2008 and increased by 60 per cent 
in 2010 when compared to 2009, then it increas ed significantly by 144% in 2011 when compared 
to 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 2010 2011 
Change in Market Sh are of the Domestic 
Industry  (38) (20) (60) 
Change in Market Share of Imports  282 25 47 
 
The market share of the domestic industry d ecreased by 38 per cent in 2009 when compared 
to 2008, and then decreased by 20 per cent in 2010 when compared to 2009.  In 2011 the market share 
of domestic sales decreases significantly by 60 per ce nt when compared to 2010.  At the same time, 
the market share of imports increased by 282 percent in 2009 when compared to 2008, and then 
continue in increasing by 25 per cent in 2010 when compared to 2009.  In 2011 the market share of 
imports increased by 47 per cent when compared to 2010, due to the significant and sudden increase 
of imports in this year. 
 G/SG/N/6/EGY/7 
G/SG/N/7/EGY/6 G/SG/N/11/EGY/4 
Page 4 
  
  (2) Domestic Sales 
 
(year/year percentage) 2008 2009 2010 2011 
Change in Sales Volume  --- (5) (21) 
 
The domestic industry's sales did not approximate ly change between 2008 and 2009, and then 
it decreased by 5 per cent in 2010 when compared to 2009.  In 2011 the volume of domestic sales 
decreased by 21 per cent when compared to 2010.  
 
(3) Capacity Utilization 
 
(year/year percentage) 2008 2009 2010 2011 
Change in Capacity Utilization   1 (6) (61) 
 
 The  Capacity utilization increased by 1 per cent in 2009 when compared to 2008, then it 
decreased by 6% in 2010 when compared to 2009 and finally decreased by 61 per cent in 2011 when 
compared to 2010.   
 
(4) Worker's Productivity 
 
(year/year percentage) 2008 2009 2010 2011 
Change in Productivity  (1) (7) (57) 
 
 The Worker's productivity decreased by 1 per cent in 2009 when compared to 2008, then it 
decreased by 7% in 2010 when compared to 2009 and finally decreased by 57 per cent in 2011 when 
compared to 2010.    
(5) Profit and Loss 
 
(year/year percentage) 2008 2009 2010 2011 
Change in Losses  221 (141) (265) 
 
 The Domestic industry's profit increased by 221 per cent in 2009 when compared to 2008, then this profit turned into losses in 2010 by 14 1 per cent when compared to 2009.  In 2011 losses 
continued by 265 per cent when compared to 2010.   
 
(6) Inventory 
 
(year/year percentage) 2008 2009 2010 2011 
Inventory   (73) 97 2 
 
 The inventory decreased by 73 per cent in 2009 when compared to 2008.  In 2010 the 
inventory increased by 97 per cent when compared to  2009, and continue to increase by 2 per cent in 
2011 when compared to 2010.  G/SG/N/6/EGY/7 
 G/SG/N/7/EGY/6 
 G/SG/N/11/EGY/4 
 Page 5 
  
  Conclusion 
 
 There has been a significant a nd sudden increase in imports of the product concerned in 2011 
in both absolute and relative terms, leading to a de terioration of the indices of the domestic industry.  
They are represented in a decline in the domestic sales and their market share, a decline in the 
capacity utilization and worker's productivity, c ontinuation in losses and increase in inventory. 
 
Causation 
 
 For the foregoing reasons, the preliminary conclu sion is that there is a correlation between the 
significant and sudden increase in imports and serious  injury suffered by the domestic industry. 
 
5.2 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 that would be difficult to repair.    
As indicated above, the serious injury suffe red by the domestic industry has worsened 
during 2011 with the ever continuing increase in the volume of imports.  Given the rate of increase of 
imports and the situation of the domestic industry, it is considered that the delay would cause 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.  C. 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 individually do not exceed three per cent of total 
imports into Egypt.  In addition, the share of th e Members with less than three per cent import share 
do not collectively account for more than nine per cent of total imports into Egypt.    
 The Address of the Competent Authority for correspondence is:   
Ministry of Industry and Foreign Trade  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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