WORLD TRADE  
ORGANIZATION  G/SG/N/13/MDA/1/Rev.1 
15 March 2007 
 (07-1086) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 12.5 OF THE AGREEMENT  
ON SAFEGUARDS OF THE RESULTS OF A MID-TERM  
REVIEW REFERRED TO IN ARTICLE 7.4 
 
REPUBLIC OF MOLDOVA 
 
Revision
 
 
 
 The following communication, dated 7 March 2007, is being circulated at the request of the Delegation of the Republic of Moldova
. 
 
_______________ 
 
 
Pursuant to Article 12.5 of the Agreement on Safeguards the Republic of Moldova hereby 
gives notification about the mid-term review  of the safeguard applied, as follows:   
1. Specify the measure and the product subjec t to the measure for which the mid-term 
review was conducted, and provide reference to the WTO document that notified the 
safeguard measure subject to the review 
The measure is an additional tariff quota on imports  of sugar.  The additional duty was set at a 
level consistent with the aim of preventing serious injury to the Moldovan producers.  Further details 
regarding the measure are set out in the notifi cation on definitive measures:  G/SG/N/8/MDA/1, 
G/SG/N/10/MDA/1, G/SG/N/11/MDA/1.   
The product concerned is sugar a nd is currently classified within  the HS codes ex.1701- (beet 
and cane) sugar, 1702 90 790, 1702 90 990 and 2106 90 590.   
2. Provide the dates of initiation and conclusion of the review 
On May 2006, the Investigation Body on safe guard measures of the Republic of Moldova 
initiated an investigatory process relating to the definitive safeguard measure on imports of sugar 
which has been imposed on February 1, 2004 for a pe riod of 4 years.  The review was concluded on 
January 2007, considering the results of the 2006.   
3. Describe the results of the review, providing some detail on the basis for reaching those 
results 
For the proposes of this report, years 2002-2 006 have been analyzed, considering that 
safeguard measure has been in force as of February 1, 2004.   
Moldova inherited form the Soviet Union uncompetitive agricultural sector and inefficient 
sugar industry.  Safeguard measures were implemen ted as a result of increased imports in years 2002 
and 2003 with the aim to give domestic industry a chance to improve its competitiveness and to adjust G/SG/N/13/MDA/1/Rev.1 
Page 2  
 
  to the demands of the current market conditions .  In 2003 in Moldova were imported 70 thousands 
tones of sugar or 50-70 per cent of internal consumption.   
Safeguard measures creates appropriate conditions  for the domestic industry to increase its 
competitiveness. 
 
  
 2003 2004 2005 2006 
Domestic production 1000 tons 83 111 133 148 
Export 1000 tons 26 5 13 30 
Sales to domestic market 1000 tons 105 101 114 86 
Incl.       
 Domestically produced 
sugar 1000 tons 40 101 106 86 
 Import sugar 1000 tons 65 0 8 0 
Domestic producers sugar’s stocks at the end of the year 1000 tons 73 71 83 111 
Capacity utilization  % 34%  49%  60%  66%  
Sugar produced per 
employee t  
Sugar/employee28 39 52 63
 
 
In 2006 in Moldova was noted the highest internal price for sugar up to 664 USD/tone which 
was due to high world market price for sugar, as we ll as high prices in neighboring countries.  Starting 
with 2007 the price on sugar was decreased by 20 pe r cent because of low world market price, while 
local producers being short of liquidity had to offer lower price to receive cash.   
The reduction of prices still hampers the pr oducers to utilize sufficient resources for 
technological renovation of the production process, as well to decrease the cost of production and to 
achieve a sustainable financial stabilization of the co mpanies.  Therefore, a preliminary withdrawer of 
the measure would hamper and possibly impede the investment return.   
The industry increase of labor productivity (129 per cent) is another evidence of industry 
improving its competitiveness through technology impr ovements, mechanization and automation.  
Capacity utilization remains quite low – 66  per cent in 2006, although it increased from 
34 per cent in 2003. 
Under protection of safeguard measures the dom estic sugar industry became in 2005 and 
2006 profitable.  Profits generated by  the sugar industry were mainly reinvested in sugar factories and 
agricultural equipment.   G/SG/N/13/MDA/1/Rev.1 
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The analyses of the domestic industry economic indi cators demonstrated that the efforts made 
by the sector concerning its restructuring process al ready have positive results, specifically as regards 
the renovation and maintaining of the equipment.   
The safeguard measure has had a positive effect for the domestic industry, though not all of 
the expected results have been achieved during the period under review.  In order to consolidate the 
position of domestic industry and to make it able to compete with other industries and countries 
Moldova has to realize and implem ent the development program on mode rnization of sugar industry.  
This program is oriented for 6 years with a budget of 100 millions USD.   
Thus, the safeguard measure is still necessary to ensure the recovery the sector and to increase 
the competitiveness of the domestic sugar industry.   
The review conducted by the Moldovan author ity concluded that the application of the 
safeguard measures in force is effective, still necessar y and the liberalization staging of the safeguard 
measure will not be changed.   
Conclusions 
 
The analysis of the trend in the situation of  the domestic sugar indus try, as described above, 
reveals that:   
Despite the signs of recovery of the domestic industry and its successful efforts to fulfill the 
compromise, the safeguard measure is still necess ary to allow further recovery of the sector. 
In light of the results of the mid-term review, the pace of liberalization remains unchanged. 
 
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 Sugar producers profits and investments (in Mio MDL)
-60-40-20020406080100120
2002 2003 2004 2005 2006Pr of i t s
Investm ents in fixed assets