WORLD TRADE  
ORGANIZATION  G/SG/N/6/TUR/10 
G/SG/N/7/TUR/1 
G/SG/N/11/TUR/7 
17 August 2006 
 (06-3931) 
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 
 
(Motorcycles
) 
  
 
 The following communication, dated 16 August 2006, has been received from the Permanent Mission of Turkey. 
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We enclose a notification pursuant to Article 12.1(a) of the Agreement on Safeguards, on 
initiation of a safeguard investigation on the imports of certain motorcycles; a notification pursuant to 
Article 12.4 of the Agreement on Safeguards, be fore taking provisional safeguard measures for 
imports of certain motorcycles; a nd 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. 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 15 August 20 06.  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 motorcycles (i ncluding mopeds) and cycles fitted with an 
auxiliary motor (with reciprocating internal co mbustion piston engine of a cylinder capacity not 
exceeding 500 cm³), hereinafter referr ed to as "the product concerned". 
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  The product concerned is currently classified as 8711.10.00.00.11, 8711.10.00.00.19, 
8711.20.10.00.00, 8711.20.91.00.00, 8711.20.93.00.00, 8711.20.98.00.00, 8711.30.10.00.00 and 8711.30.90.00.00 within the Turkish Customs Tariff Schedule. 
 
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 that  there have been sharp increases in imports 
of the product concerned both in absolute terms, a nd relative to domestic pr oduction or consumption, 
as unit price of the imported product concerned went down. 
 
Imports 2001 2002 2003 2004 2005 
Volume (pcs.) 6,128 2,937 16,589 117,471 311,484 
Unit price (USD/pcs) 1,307 1,129 765 696 655 
 
The information currently availa ble also shows a situation of  continuously growing domestic 
consumption, increasing inventories, decreasing domes tic sales and profitability and sharply 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 http://www.dtm.gov.tr/ITHALAT/gozkor/ithalat.htm 
 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 
 
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  B. NOTIFICATION
 UNDER  ARTICLE  12.4  BEFORE  TAKING  A PROVISIONAL  
SAFEGUARD  MEASURE 
1. The product subject to the proposed provisional safeguard measure 
The product subject to the proposed provisional saf eguard measure is motorcycles (including 
mopeds) and cycles fitted with an auxiliary motor (with reciprocating internal combustion piston 
engine of a cylinder capacity not exceeding 500 cm³), hereinafter referred to as "the product 
concerned". 
 
The product concerned is currently classified as 8711.10.00.00.11, 8711.10.00.00.19, 
8711.20.10.00.00, 8711.20.91.00.00, 8711.20.93.00.00, 8711.20.98.00.00, 8711.30.10.00.00 and 8711.30.90.00.00 within the Turkish Customs Tariff Schedule. 
 
2. The proposed provisional safeguard measure 
It is proposed to impose provisional safeguard me asure in the form of specific duty per piece 
varying according  to Turkish customs tariff code of the product concerned.  Tariff codes and the 
levels of duty per piece are shown in the table below.  
   
Customs tariff codeSpecific duty  
(USD per piece) 
8711.10.00.00.11 200 
8711.10.00.00.19 200 
8711.20.10.00.00 250 
8711.20.91.00.00 200 
8711.20.93.00.00 200 
8711.20.98.00.00 300 
8711.30.10.00.00 300 
8711.30.90.00.00 300 
  
3. The date of introduction of the proposed provisional safeguard measure 
The date of introduction of the proposed provi sional safeguard measure is 15 August 2006. 
 
4. The expected duration of the provisional safeguard measure 
The provisional safeguard measure will be in fo rce 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 threa tening to cause serious injury 
 
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  UNFORESEEN DEVELOPMENTS 
 
As will be observed below, the imports of th e product concerned have continuously increased 
starting from 2003. Imports have increased in terms of  both total quantity (pcs) and value.  On the 
other hand, the average unit price of the imported product concerned has continuously fallen starting 
from 2001. Whilst the average unit price of an import ed motorcycle covered by the application was 
1,307 USD/pcs in 2001, it has gone down to 557 USD/pcs in the first four months of 2006.  
 
Unit CIF price (USD/pcs) 2001 2002 2003 2004 2005 2006(1-4)
Total Imports 1,307 1,129 765 696 655 557 
 
Although import price fluctuations were to be  expected as a result of increasing domestic 
consumption, the extent of fall in prices was unfor eseen. As price elasticity of motorcycle demand is 
high in Turkey, fall in average unit price of importe d products in the period under examination led to 
a sharp increase in the import volume of motorcycles. 
 
The value of the New Turkish Lira has appreci ated 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 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 increased imports in significant quantities consequently  eroded the domestic producers’ market share.  
 
These developments and their effects will be inves tigated further at the definitive stage of the 
investigation procedure. 
 
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 2001 to 2005, both in absolute terms, and relative to domestic 
production. Imports of the product concerned increased considerably in that period. 
 
Imports 2001 2002 2003 2004 2005 
Volume (pcs.) 6,128 2,937 16,589 117,471 311,484 
 
Imports of the product concerned decreased by 52 % in 2002, coming down to 2,937. 
However, imports have gone into a rising tre nd starting from 2003 and have  reached 311,484 in 2005 
with annual increases of 464 %, 608 % and 165 % respectively.  
 
Imports/Domestic 
production 2001 2002 2003 2004 2005 
Index (%) 100 67 146 714 1,893 
  
It is observed that the index of ratio of imports to domestic production, which was 100 in 
2001, has dropped back to 67 in 2002; afterwards it started to rise in 2003 and reached the figures 
146, 714 and 1,893 in 2003, 2004 and 2005 respectively.  
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  Based on import data for the period of 2001-2005, 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. 
 
(i) Consumption 
Consumption  2001 2002 2003 2004 2005 
Index (pcs) 100 58 175 703 1,481 
 
The data in the table show an increase in moto rcycle demand in Turkey after 2002.  The rates 
of increase in consumption were 201 % in 2003, 301 % in 2004 and 110 % in 2005. 
  
(ii) Domestic Production 
Production  2001 2002 2003 2004 2005 
Index (pcs) 100 71 185 268 268 
 
Looking at the domestic production figures, it is observed that production dropped by 29 % in 
2002 and started rising again in subsequent years.  In 2005, no increase in production was achieved, 
although the domestic market grew by 110 % compared to 2004.  
 
(iii) Market share of domestic production 
Market share 2001 2002 2003 2004 2005 
Index (%) 100 105 81 41 17 
 
The market share index of domestic productio n increased from 100 in 2001 to 105 in 2002; 
yet it has decreased rapidly in subsequent years.  The index, which dropped to 81 in 2003 and 41 in 
2004, has come down to 17 in 2005, the lowest value of the period under examination. 
 (iv) Capacity and capacity utilization rate 
Capacity utilization rate 2001 2002 2003 2004 2005 
Index (%) 100 71 185 258 258 
 
The capacity utilization fell in 2002; afterwards it increased due to the growth in the market in 
2003 and 2004. However, this increase has been poor to reflect the enlargement of domestic market. 
In 2005, the capacity utilization rate remained stable.  
 
 
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  (v) Domestic sales 
Domestic sales  2001 2002 2003 2004 2005 
Index (pcs) 100 61 142 290 256 
 
The domestic sales of producers dropped by 39 % in 2002, and showed an increase in 2003 
and 2004.  Domestic sales fell by 12 % in 2005 as imports reached its highest volume.  
 
(vi) Inventories 
End of period inventories 2001 2002 2003 2004 2005 
Index (pcs) 100 163 142 263 345 
 
It is observed that the end of period invent ories of domestic producers rose by 63 % in 2002 
and dropped by 13 % in 2003.  The index (100 in 2001) continuously increased in subsequent years 
and reached 345 in 2005.  
 
(vii) Employment 
Employment 2001 2002 2003 2004 2005 
Index (Persons) 100 82 146 194 177 
 
The employment figures of domestic producer s have fluctuated in the period under 
examination.  In 2005, a fall by 9 % occurred in em ployment, as a result of the decrease in the share 
of domestic producers in the growing domestic market. 
 
(viii) Productivity 
Productivity 2001 2002 2003 2004 2005 
Index (pcs /Person) 100 86 126 137 151 
 
Looking at the productivity figures of domestic production operations, it is  observed that after 
the decline in 2002, producers steadily increased their productivity.  The productivity index, which 
was 100 in 2001, reached 151 in 2005. 
 
(ix) Profitability 
Profitability 2001 2002 2003 2004 2005 
Index (%) Loss 100 116 121 64 
 
The profitability index of the domestic producers (100 in 2002), whose market share sharply 
declined, has come down to 64 in 2005. 
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  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 6,128 pcs. in 2001  to 311,484 pcs. in 2005, which means a 
4,983% increase in the level of imports.  In add ition, the market share index of imports increased by 
86%, 77% and 26% in 2003, 2004 and 2005, respectively.  As a result of the continuous decrease in prices of imported products, domestic prices were undercut in 200 2, 2004 and 2005.  
 
For motorcycles with a cylinder volume not exceeding 125 cm³, imported products have 
undercut the price of domestic products by 54 % in 2002, 32 % in 2004 and 35 % in 2005.  Similarly, 
a price undercutting of 41 % in 2004 and 46 % in 2005 were determined for motorcycles with 
cylinder volumes of 125 cm³ and above. 
 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 decreas ed over the period under consideration; on 
the contrary, it has increased by 1,381% fro m 2001 to 2005. Competition among domestic producers 
has not created an injurious effect.  The production technology used by the domestic industry is same 
with the technology used by foreign producers.  There is no substitute product for motorcycle, which 
could affect the consumer preferences.  Changes in  financial costs did not contribute to the injury 
suffered by the domestic industry.  Domestic produ cers exports remained stable between the years 
2003 and 2005.  Therefore, there is no link between  the changes in exports and the injurious effects 
observed.  
  According to this preliminary analysis, the seri ous injury or threat of serious injury is not 
attributable to the factors other than the increase in imports. 
 
 (ii) Determining the existence of critic al 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 four months of 2005 
and 2006 indicates that imports continue to increase with a greater rate than the previous years. 
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  Period Volume (pcs) Rate of Increase (%) Unit Price (USD/pcs) 
2005(1 - 4) 29,163 - 763 
2006(1 - 4) 190,885 555% 557 
  
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 15 August 2006. 
 
 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% 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; 
Belarus; Bolivarian Republic of Venezuela; Br unei Darussalam; Bolivia; Brazil; Bahamas; Bhutan; 
Botswana; Belize; Bermuda; Bouvet Island; British Virgin Islands; British Indian Ocean Territory; 
Democratic Republic of Congo; Central African Re public; Congo; Côte d'Ivoire; Cameroon; Chad; 
Colombia; Costa Rica; Cuba; Cape Verde; Cayman  Islands; Chile; Christmas Islands; Cocos Islands; 
Cook Islands; Djibouti; Dominica; Dominican Repub lic; Ecuador; Egypt; Eritrea; Ethiopia; Fiji; 
Federated States of Micronesia; Falkland Islands; Fr ench Polynesia; French Southern Territories; 
Gabon; Grenada; Ghana; Gambia; Georgia; Greenl and; Guinea; Equatorial Guinea; Guatemala; 
Guinea-Bissau; Guyana; Gibraltar; Guam; Hondur as; Haiti; Heard Island a nd McDonald Islands; 
Indonesia; Iraq; Iran (Islamic Republic of); Jamaica;  Jordan; Kazakhstan; Kenya, Cambodia, Kiribati,  G/SG/N/6/TUR/10 
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  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; Ni caragua; Nepal; Nauru; Netherlands Antilles; New 
Caledonia; Niue Island; Norfolk Island; Northern  Mariana Islands; Oman; Panama; Peru; Papua New 
Guinea; Philippines; Pakistan; Palau; Paraguay; Pit cairn; Qatar; Russian Federation; Rwanda; Samoa; 
Saudi Arabia; Solomon Islands; Seychelles; Sudan;  Sierra Leone; Senegal; Somalia; Suriname; Sao 
Tomé and Principe; El Salvador; Syrian Arab  Republic; Swaziland; South Georgia and South 
Sandwich Islands; St Helena  and dependencies; St Pierre and Mi quelon; Tajikistan; Togo; Tunisia; 
Tonga; East Timor; Trinidad and Tobago; Turkme nistan; Tuvalu; Tanzania; Tokelau; Turks and 
Caicos Islands; Ukraine; United Arab Emirates;  United States Minor outlying islands; Uganda; 
Uruguay; Uzbekhistan; St Vincent; Vietnam; Vanuatu ; Virgin Islands of USA; Wallis and Futuna 
Islands; Yemen; Zambia; and Zimbabwe. 
  
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