WORLD TRADE  
ORGANIZATION  G/SG/N/8/TUR/3 
G/SG/N/10/TUR/3 
G/SG/N/11/TUR/3 
12 July 2006 
 (06-3371) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT 
ON SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT 
THEREOF CAUSED BY INCREASED IMPORTS 
 
NOTIFICATION PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
 
TURKEY 
 
(Vacuum Cleaners
) 
   The following notification, dated 11 July 2006, is being circulated at the request of the 
Delegation of Turkey. 
 
_______________ 
 
 
 In light of the agreed format for notifications (G/SG/W/1, 23 February 1995), Turkey 
provides notification to the Committee on Safeguards of  findings of serious injury or threat thereof 
caused by increased imports and notification of proposed safeguard measures.   On 5 January 2006, Turkey initiated an inves tigation relating to serious injury or threat 
thereof to domestic producers of products like or di rectly competing with the imported product.  The 
initiation of the investigation has been  notified to the Committee on Safeguards.
1  
  Consistent with Article 12.3 of the Agreement on Safeguards , Turkey is prepared to consult 
with those Members having a substantial inte rest as exporters of the product concerned. 
  
 
I. Evidence of serious injury or threat thereof caused by increased imports 
A. EVIDENCE OF SERIOUS INJURY 
 In order to make a determination of serious in jury to the domestic industry of the like product, 
an evaluation of all relevant factors of an objec tive and quantifiable nature having a bearing on the 
situation of the industry has been undertaken.  Th e five producers, which cooperated fully in the 
investigation, have constituted major proportion of  the domestic production.  Hence, the following 
evaluation has been based upon data prov ided by the applicant companies.  
 
                                                     
 
1 G/SG/N/6/TUR/8 G/SG/N/8/TUR/3 
G/SG/N/10/TUR/3 G/SG/N/11/TUR/3 
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  1. Consumption 
 2001 2002 2003 2004 2005 
Consumption 
(Quantity-Index) 100 107 146 218 289 
 
Consumption of the product concerned was est ablished on the basis of total domestic sales 
made by the domestic producers and total impor ts of the product concerned into Turkey. 
 Consumption index (2001=100) increased by 7% , 36%, 50% and 32% in 2002, 2003, 2004 
and 2005, respectively and reached its highest level in the year 2005. 
 
2. Capacity and capacity utilization 
 2001 2002 2003 2004 2005 
Capacity  
(Quantity-Index) 100 134 145 145 145 
Capacity Utilization   
(%-Index) 100 80 79 100 95 
 
Production capacity index of the domestic produ cers (2001=100) increased by 34% and 8% in 
2002 and 2003, respectively and remained stable in the following years. 
 
Capacity utilization index (2001=100) fell from 100 in 2001 to 80 in 2002.  This fall is mainly 
explained by the increase in the production capacity in that year.  Capacity utilization index fell to 79 
in 2003.  It increased to 100 in 2004 due to the increase in the production in that year. Capacity 
utilization index fell by 5 percentage points in 2005.  3. Production 
 2001 2002 2003 2004 2005 
Production 
(Quantity- Index) 100 107 115 146 139 
 
 Production index of the domestic producers (2001=100) increased by 7%, 7% and 27% in 
2002, 2003 and 2004, respectively.  Thereafter, production index fell by 5% in 2005.  
 4. Employment 
 2001 2002 2003 2004 2005 
Employment (End of 
Period-Index) 100 110 115 90 75 
 
 Employment index in relation to the produc t concerned (2001=100) increased in 2002 and 
2003.  Thereafter, it fell starting in 2004 by 21% and 17% in 2005 reaching its lowest level for the 
period under examination.  
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  5. Domestic sales volume 
 2001 2002 2003 2004 2005 
Domestic Sales  
(Quantity-Index) 100 110 124 171 149 
 
 Domestic sales index of the product con cerned (2001=100) increased by 10% in 2002 and 
12% in 2003 and then increased by a further 38 % in 2004.  However, despite increase in 
consumption, sales fell by 12% in 2005, as impo rts increased substantially.  This reflects the 
increasing dominance of imports in the market.   6. Market share 
 2001 2002 2003 2004 2005 
Market Share of 
Domestic Producers   (%-Index) 100 103 85 78 52 
 
 Domestic producers’ market share index (2001=100)  increased slightly at the beginning of the 
period under consideration.  Thereafter, it fell by 18%  in 2003 and 8% in 2004. In 2005, market share 
decreased by 34% to reach its lowest level for the pe riod under examination.  The substantial falls in 
the recent period demonstrate the increasing share taken by imports in the market.   
 
7. Price of the like product and price undercutting 
 2001 2002 2003 2004 2005 
Unit Prices of 
Domestic Sales     (US $/Pcs)
 30 28 32 37 40 
Unit Prices of Total Imports                  (US $/Pcs) 56 41 39 43 46 
 
There was no price undercutting by total impor ts in the period under examination.  The 
domestic producers’ average price of domestic sale s (PDS) was 40 US Dollar per piece in 2005.  The 
table below shows development of imports having unit price below PDS and 40 US Dollar per piece 
for the years 2000-2005. 
  
 
 
 
The imports of the product concerned having unit price below PDS increased by 46%, 
217%, 74% and 43% in 2002, 2003, 2004 and 2005, respectively.  The imports of the product Imports (Pcs) 2000 2001 2002 2003 2004 2005 
Price < PDS - 57.999 84.483 268.041 466.194 669.209 
Price < 40 US $ 59.992 91.980 147.950 292.921 469.322 669.209 G/SG/N/8/TUR/3 
G/SG/N/10/TUR/3 G/SG/N/11/TUR/3 
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  concerned priced below 40 US Dollar also shows an increasing trend.  Therefore, although there 
was no price undercutting by total imports duri ng the period under examination, the portion of 
imports which undercuts yearly PDS increased significantly.
 
 8. Profitability 
 2001 2002 2003 2004 2005 
Net profit/loss (%) -32,9 -13,8 -10,0 6,3 -0,8 
 
 Data relating to profitability is  based on data relating to domes tic sales only.  The profitability 
of the domestic producers’ sales increased from -32,9% in 2001 to 6,3% in 2004.  It fell to -0,8% in 2005.  9. Stocks 
 
2001 2002 2003 2004 2005 
Closing Stocks 
(Quantity-Index) 100 44 66 94 117 
  
Stocks level fluctuated between 2001-2005 r eaching its highest level in 2005.  The 
substantial increase in stocks in 2005 coincide d with a fall in the domestic producers’ sales 
volume (12%) in that year, and was found to be ch iefly attributable to that fall in sales volume.  
 
10. Productivity 
 2001 2002 2003 2004 2005 
Productivity 
(Pieces/Employee) 1.380 1.111 1.173 1.563 1.771 
 
Productivity in relation to the product concerned decreased by 19% in 2002.  Thereafter, it 
increased by 5% from 1.111 pieces/employee in 2002 to 1.173 pieces/employee in 2003 and continued to increase to 1.563 pieces/employee (a  further increase of 33%) in 2004. In 2005, it 
increased by a further 13% to 1.771 pieces/employee to reach its highest level for the period under 
examination.  
 
11. Conclusion 
 The data show negative developments for capac ity utilization rate, production, domestic sales, 
market share, employment and profitability in the pe riod under consideration.  Stocks level increased 
in 2005 reaching its highest level for the period under examination. 
  Imports have risen from 572.932 pieces in the year 2000 to 1.422.748 pieces in the year 2005 recording a 148% increase.  It is noteworthy that  as imports increased by 67% in the year 2005 
compared to the year 2004, the domestic industry’  sales volume decreased by 12% and the domestic  G/SG/N/8/TUR/3 
 G/SG/N/10/TUR/3 
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  producers’ profitability fell to -0,8%.  The fall in profitability in 2005 occurred despite an increase in 
consumption in that year.  The domestic industry has lost market share, which reached its lowest level 
in 2005.   
 
 Taking account of all of these factors, inves tigating authority concludes that the domestic 
industry has suffered serious injury.  No other factors that could have contributed to the injury apart from the increase in imports were identified.  Theref ore, it is concluded that there is a genuine and 
substantial link between increased imports a nd serious injury to the domestic industry. 
 
B. C
AUSATION ANALYSIS  
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 investigating authority analyzed the effects of the following factors: 
 
1. Analysis of causation factors 
- Effect of increased imports: 
Imports have increased from 572.932 pieces in the year 2000 to 1.422.748 pieces in the year 
2005, which means a 148% increase  in the level of imports.  Additionally, in 2003 and 2004 the 
market share of imports increased by 24% and 7%, respectively.  The market share taken by imports 
further increased by 26% in the year 2005 indicati ng that imports have also increased relative to 
production, at the expense of the domestic industry.    
For the foregoing reasons, the investigating aut hority concludes that there is a correlation 
between the increase in imports and the serious inju ry suffered by the domestic industry, and that the 
increase in imports has had injurious effects in par ticular in terms of volume sold by the domestic 
industry on the domestic market.  - Other Factors 
 
(a) Effect of changes in consumption:  De mand for the product concerned has not decreased 
throughout the period under consideration. 
 
(b) Effect of competition between the domestic producers:  Competition in the domestic 
market has not created an injurious effect.   
(c) Changes in production technology:  The production technology used by the domestic 
industry is the same with the technology used by foreign producers. 
 (d) Alternative products and changes in consum er preferences:  There is no product, which 
can be a substitute for the product concerned.  Theref ore, changes in user preferences have not been 
identified. 
 
(e) Lack of production capacity:  The domestic  industry has adequate production capacity to 
meet domestic demand.  
 (f) Changes in financial costs:  The investig ating authority determined that changes in 
financial costs did not contribute to the injury suffered by the domestic industry. 
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  (g) Effect of changes in export performance:  The effect of vari ations in the level of exports 
has also been examined.   
 2001 2002 2003 2004 2005 
Exports        
(Quantity-Index)  100 119 109 117 132 
 
The index of domestic producers’ exports of the product concerned (2001=100) increased by 
19% in 2002. In 2003, exports fell by 8%.  In the years 2004-2005 exports recovered by 7% and 13%, 
respectively.  Hence, there is no link between th e changes in exports and the injurious effects 
observed.  2. Conclusion on causation 
 After having examined the injurious effects of the other known factors, the investigating 
authority has reached the conclusion that there is  a genuine and substantial link between increased 
imports and serious injury to the domestic industry.  
II. Information on whether there is an absolu te increase in imports or an increase in 
imports relative to domestic production 
The investigation was conducted in accordance w ith the requirements of Turkish Legislation 
on Safeguard Measures and the procedures prescrib ed by the WTO Agreement on Safeguards and 
Article XIX of GATT 1994, i.e. determination of th e existence of unforeseen developments and effect 
of obligations, including tariff concessions which le d to the increased imports and resulting injury to 
the domestic producers.   
 
Although these circumstances need not be demonstrated for the reason that the product 
concerned is not the subject of any tariff concessi on granted by Turkey under the WTO Agreement, 
current investigation was governed by the national legislation and the term s and conditions of the 
Agreement on Safeguards and Article XIX of GATT 1994. 
 
 The investigating authority found that the New Turkish Lira appreciated unexpectedly since 
2001. According to the data circulated by the Central Bank of the Republic of Turkey, the New 
Turkish Lira appreciated by 47% in real terms in 2005 compared to the year 2001.  The real value gain of the New Turkish Lira speeded up the imports and lessened the competitive power and 
profitability of the domestic industry.  The incr eased imports in significant quantities consequently 
eroded the domestic producers’ market share.   
 
Also, the growth trend of the Turkish ec onomy during the period under examination is 
considered to be another unforeseen development.  The expected and realized growth rates of GNP of 
Turkey are provided below.  G/SG/N/8/TUR/3 
 G/SG/N/10/TUR/3 
 G/SG/N/11/TUR/3 
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GNP 
Growth  2001 2002 2003 2004 2005  
Expected 4,5 4,0 5,0 5,0 5,0 
Realized -9,5 7,9 5,9 9,9 7,6 
Source: State Planning Organization 
 
Having contracted by 9,5% in 2001 economic crisis, Turkish economy grew well above the 
expected figures in the following years.  The fact that  the realized growth figures were higher than the 
expected values indicates that there have been increases in income and consumption demand above 
the expected levels and hence import demand has exc eeded expectations.  Therefore, the unexpectedly 
high growth performance of Turkish economy is anothe r factor that has led to increase in imports. 
 
The real appreciation of the New Turkish Lira and impressive growth performance of Turkish 
economy during the period under examination are th e unforeseen developments under Article XIX of 
GATT 1994.  
Turkey has investigated whether the product c oncerned is imported into Turkey in such 
increased quantities, absolute or re lative to total production, and/or on such terms or conditions as to 
cause, or threaten to cause, serious  injury to the domestic producers.   In this respect, Turkey has 
focused on imports of the product concerned in the mo st recent period for which data are available.  
The table below shows the development of impor ts for the years 2000-2005 and the first 4-month 
periods of 2005 and 2006.  
1. Volume of imports 
2000 2001 2002 2003 2004 2005 2005  
(1-4) 2006     
(1-4) 
Imports (Pcs) 572.932 307.354 317.527 533.903 853.981 1.422.748 302.108 509.278 
 
Volume of imports decreased by 46% in 2001 comp ared to level of imports in 2000 due to the 
macro-economic crisis occurred in Turkey in that year.  In the following year, imports increased by 
3% and reached 317.527 pieces.  The rates of incr ease were 68% in 2003 and 60% in 2004 and then 
followed a massive surge in imports in 2005 (67%).  The volume of imports increased by 148% in the 
period of 2000-2005.  In the firs t 4-month period of 2006, imports increased by 68% compared to the 
same period in the previous year.  This reflects th e fact that imports increased in absolute terms. 
 
 2001 2002 2003 2004 2005 
Imports/ 
Production (%) 47 45 70 89 155 
 
 Relative to total domestic produc tion, imports decreased from 47% in 2001 to 45% in 2002.  
The ratio showed an upward trend starting from 2003 . Imports to production ratio increased to 70% in 
2003 and 89% in 2004. In 2005, the ratio reached to  its highest level by 155% for the period under 
examination.  G/SG/N/8/TUR/3 
G/SG/N/10/TUR/3 G/SG/N/11/TUR/3 
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  2. Market share of imports 
 2001 2002 2003 2004 2005 
Market Share of 
Imports (%-
Index) 100 96 119 127 160 
 
 In 2003 and 2004, the market share index of  imports (2001=100) increased by 24% and 7%, 
respectively.  The market share taken by imports  further increased by 26% in the year 2005.  
 3. Import prices 
2000 2001 2002 2003 2004 2005 2005  
(1-4) 2006     
(1-4) 
Price       
(US $/Pcs)  65 56 41 39 43 46 46 50 
 
The average prices of the total imports decr eased between 2000-2003.  In the years 2004 and 
2005, average import prices increased by 10% and 7%, r espectively.  In the first 4 months of the year 
2006, average import prices increased by 9% compared  to the same period in the previous year and 
reached 50 US $ per piece. 
 
III. Precise description of the product involved 
 The product concerned is vacuum cleaner for a voltage of 110V or more that is currently 
classified within the Turkish Customs Tariff Schedule 8509.10.10.00.00.  IV. Description of the proposed measure 
 It is proposed to impose definitive safeguard measu re in the form of vari able duty which will 
be implemented for the imports having CIF price below 40 US $ per piece.  The domestic producers’ 
average price of domestic sales was 40 US Dollar per piece in 2005.  It is proposed to apply the measure on products below a certain threshold price since it was found that the injury suffered by the 
domestic producers has mainly been caused by low-pr iced imports.  Hence, th e type and magnitude of 
the measure were determined in consistent with th e aim of preventing serious injury to the domestic 
industry.    
If imports are undertaken at a CIF price equal to or above the relevant threshold level 
established (40 US $ per piece), the imports will not be subject to the proposed measure.  If imports 
are undertaken at a lower price, the difference between the actual price and the threshold level 
(40 US$ per piece) would become payable.   
 
Below is the list of Developing Countries exclude d from the measures as they export less than 
3% of imports to Turkey (Article 9.1 of the Agreement on Safeguards ) 
   Afghanistan;  Antigua and Barbuda;  Angola;  Argentina;  American Samoa;  Anguilla; 
Antarctica;  Aruba;  Azerbaijan;  Barbados;  Banglad esh;  Burkina Faso;  Bahrain;  Burundi;  Benin; 
Belarus;  Bolivarian Republic of Venezuela;  Brunei Darussalam;  Bolivia;  Brazil;  Bahamas;  
Bhutan;  Botswana;  Belize;  Bermuda;  Bouvet Isla nd;  British Virgin Islands;  British Indian Ocean  G/SG/N/8/TUR/3 
 G/SG/N/10/TUR/3 
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  Territory;  Democratic Republic of Congo;  Cent ral African Republic;  Congo;  Côte d'Ivoire;  
Cameroon;  Chad;  Colombia;  Costa Rica;  Cuba;  Cape Verde;  Cayman Islands;  Chile;  Christmas 
Islands;  Cocos Islands;  Cook Islands;  Djibout i;  Dominica;  Dominican Republic;  Algeria; 
Ecuador;  Egypt;  Eritrea;  Ethiopia;  Fiji;  Federate d States of Micronesia;  Falkland Islands;  French 
Polynesia;  French Southern Territories;  Gabon;  Grenada;  Ghana;  Gambia;  Georgia;  Greenland; 
Guinea;  Equatorial Guinea;  Guatemala;  Guin ea-Bissau;  Guyana;  Gibraltar;  Guam;  Honduras; 
Haiti;  Heard Island and McDonald Islands;  India;  Iraq;  Iran (Islamic Republic of);  Jamaica; 
Jordan;  Kazakhstan;  Kenya,  Cambodia,  Kiriba ti,  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; 
Maldives;  Malawi;  Mozambique;  Macao ;  Mayotte;  Montserrat;  Namibia;  Niger;  Nigeria; 
Nicaragua;  Nepal;  Nauru;  Netherlands Antilles;  New Caledonia;  Niue Island;  Norfolk Island; 
Northern Mariana Islands;  Oman;  Panama;  Peru ;  Papua New Guinea;  Philippines;  Pakistan;  
Palau; Paraguay; Pitcairn; Qatar; Russian Fede ration; Rwanda; Samoa; Saudi Arabia; Solomon 
Islands;  Seychelles;  Sudan;  Sierra Leone;  Sene gal;  Somalia;  Suriname;  Sao Tomé and Principe;  
El Salvador;  Syrian Arab Republic;  Swaziland;   South Georgia and S outh Sandwich Islands;  
St Helena and dependencies;  St Pi erre and Miquelon;  Tajikistan;  Th ailand;  Togo;  Tunisia;  Tonga; 
East Timor;  Trinidad and Tobago;  Turkmenistan;  Tuvalu;  Tanzania;  Tokelau;  Turks and Caicos 
Islands;  Ukraine;  United Arab Emirates;  Unite d States Minor outlying islands;  Uganda;  Uruguay; 
Uzbekhistan;  St Vincent;  Vietnam;  Vanuatu;  Virg in Islands of USA;  Wa llis and Futuna Islands;  
Yemen;  South Africa;  Zambia;  Zimbab we;  Indonesia;  Malaysia and Mexico.  
 
V. Proposed date of introduction of the measure 
The date of introduction of the pr oposed measure is 10 August 2006. 
 
VI. Expected duration of the measure 
 The expected duration of the proposed measure is three years. 
 
VII. Proposed date for the review  
 Not applicable. 
 
VIII.  Expected timetable for progressive liberalization of the measure 
In order to induce adjustment, the proposed m easure will be subject to liberalization on a 
regular basis following its imposition, thereby ensuri ng that there is a strong incentive for domestic 
producers to progressively undertake the necessary rest ructuring and adjustment.  The timetable for 
progressive liberalization of the prop osed measure is shown below.  
 
Period Threshold Level 
1st year  40 US $ per piece 
2nd year  38 US $ per piece 
3rd year  36 US $ per piece 
 
IX. Information relating to the extension of a safeguard measure 
 Not applicable. 
__________