WORLD TRADE  
ORGANIZATION  WT/DS351/1 
G/L/789 
G/SG/D34/1 
30 October 2006 
 
 (06-5198) 
 Original:   Spanish 
 
 
 
CHILE – PROVISIONAL SAFEGUARD MEASURE 
ON CERTAIN MILK PRODUCTS 
 
Request for Consultations by Argentina  
 
  The following communication, dated 25 Oct ober 2006, from the delegation of Argentina to 
the delegation of Chile and to the Chairman of the Dispute Settlement Body, is circulated in 
accordance with Article 4.4 of the DSU. 
 
_______________ 
 
  I have been instructed by my Government to  contact you in order to request consultations 
with Chile pursuant to Article 4 of the Unde rstanding on Rules and Procedures Governing the 
Settlement of Disputes (DSU), Article XXIII:1 of  the 1994 General Agreemen t on Tariffs and Trade 
(GATT 1994) and Article 14 of the Agreement on Sa feguards, in connection with the imposition by 
the Government of Chile of a provisional safegua rd measure on imports of certain milk products.
1 
  The measure in question includes Exempt Decree No. 278, published in the Official Journal 
of Friday 13 October 2006, the amendments and ex tensions thereto and any related amendments, and 
Record No. 282 of the National Commission responsible  for investigating distortions (hereinafter the 
Record of the Commission).   The above-mentioned Decree provides for the application of a provisional safeguard of 
23 per cent on imports from Argentina of powde red milk, classified under tariff subheadings 
0402.1000, 0402.2111, 0402.21 12, 0402.2113, 0402.2114, 0402 .2115, 0402.2116, 0402.2117, 
0402.2118, 0402.2911, 0402.2912, 0402.2913, 0402.2914, 0402.2915, 0402.2916, 0402.2917 and 0402.2918;  liquid milk, classified under tariff subheadings 0401.1000, 0401.2000, 0401.3010, 0401.3020, 0401.303 0, 0401.3040, 0401.3090 and 0402.9110;  and Gouda cheese, classified under 
tariff subheading 0406.9010. 
 
 The Argentine Government considers this measure  to be inconsistent with Chile's obligations 
under the relevant provisions of the GA TT 1994 and the Agreement on Safeguards. 
 
                                                     
 
1 The initiation of the investigation process was notified to the Committee on Safeguards by document 
G/SG/N/6/CHL/11, and the provisional measure by document G/SG/N/7/CHL/8. WT/DS351/1 
G/L/789 G/SG/D34/1 
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   Accordingly, the Argentine Government is of  the view that Chile has departed from the 
provisions of the GATT 1994 and the Agreement on Sa feguards in its determination, particularly as 
regards the following: 
 
 - Non-discriminatory application :  insofar as the measures are imposed solely on 
imports from Argentina, which constitutes a fl agrant violation of the basic principles 
of the multilateral trading system.  Moreover,  the failure to conduct an investigation 
of the relationship between imports from other sources and the impact of those 
imports on the situation of the domestic industry also serves to demonstrate the 
discriminatory nature of the measure. 
  - Investigation procedure :  taking into account the fact that the Commission Record 
in which application of the provisional measure is recommended does not properly 
develop the fundamental points relating to  all pertinent issues of fact and law. 
  - Unforeseen developments :  considering that there were no unforeseen developments 
warranting exceptional action such as the application of a safeguard measure. 
  - Definition of the like or directly competitive product and the domestic industry :  
insofar as neither the application nor the Record of the Commission or the decree 
contain arguments from which it may be c oncluded that the products are alike or 
directly competitive between themselves a nd in relation to the imported products.  
Moreover, the Argentine Government c onsiders that FEDELECHE does not at all 
account for a "major proportion" of the total domestic production of the like products 
or those directly competitive with the imported products unde r investigation. 
  - Increased imports :  considering that there was no finding of an increase in imports 
in absolute terms and relative to domes tic production or of an increase under such 
conditions as to cause or threaten to cau se serious injury to the domestic industry 
producing like or directly competitive products. 
 
 - Increase in imports under conditions such  as to cause or threaten to cause 
serious injury :  analysis of the factors and clear imminence of serious injury:  
because the existence of injury or threat of serious injury cannot be concluded from 
the factors analysed.  In addition, factor s such as productivity, capacity utilization, 
employment and profits were not evaluated.   Similarly, data relating to prices and 
milk deliveries to plants show positive signs.  Moreover, in determining the threat of 
injury, the authority fails to demonstrate that the threat is clearly imminent. 
  - Determination of causal link :  insofar as it has not been demonstrated, on the basis 
of objective evidence, that there exists a causal link between increased imports of the 
product concerned and injury or threat of ser ious and imminent injury to the domestic 
industry. 
  - Notification of the measure :  insofar as there was observed to be no obligation to 
notify the measure prior to its adoption. 
  WT/DS351/1 
 G/L/789 
 G/SG/D34/1 
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   In the light of the foregoing, Argentina considers that the above-mentioned provisional 
safeguard measure is inconsistent, inter alia , but not exclusively, with Chile's obligations under the 
following provisions: 
 
 - GATT 1994:  
(1) Article XIX; 
 
(2) Article I. 
  - Agreement on Safeguards:  
(3) Article 2; 
 
(4) Article 3.1; 
 
(5) Article 4; 
 
(6) Article 5.1; 
 
(7) Article 6; 
 
(8) Article 12.4. 
 
 In these circumstances, Argentina request s consultations with Chile, pursuant to 
Article XXIII:1 of the GATT 1994, Article 4 of th e DSU and the respective rules of the Agreement on 
Safeguards, and proposes that they be held as early as  possible at a mutually agreed date and place.  In 
addition, I have been instructed to indicate that my Government r eserves the right to raise further 
factual or legal claims during those consultations.  
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