WORLD TRADE  
ORGANIZATION   
G/SG/N/7/EGY/4 
G/SG/N/11/EGY/2 
9 January 2012 
 (12-0057) 
Committee on Safeguards Original:   English 
 
 
 
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON 
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARDS 
MEASURE REFERRED TO IN ARTICLE 6 
 
NOTIFICATION PURSUANT TO ARTICLE 9,  
FOOTNOTE 2, OF THE AGREEMENT ON SAFEGUARDS 
 
 
EGYPT 
 
Cotton Yarn 
 
 
 The following notification, dated 29 December 2011,  is being circulation at the request of the 
Delegation of Egypt.   
 
_______________ 
 
  We enclose a notification pursuant to article  12.4 of the agreement on safeguards, before 
taking a provisional safeguard measu re against imports of cotton yarn;  and a notification pursuant to 
Article 9, footnote 2 of the agreement on safeguard s, on taking a decision not to apply the measure to 
products originating in developing countries.    
 
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 cotton yarn.  The 
product concerned is currently classified under the customs tariff subheadings 52.05, 52 06 and 52 07 
within the Egyptian Customs Tariff Classification. 
2. The proposed provisional safeguard measure 
 It is proposed to impose a provisional safegua rd measure in the form of additional duty 
3.33 EGP/kg.  
 
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,  which was issued on 29/12/2011, in the Official 
Gazette.  
 G/SG/N/7/EGY/4 
G/SG/N/11/EGY/2 
Page 2 
  
  4. The expected duration of the provisional safeguard measure 
The provisional safeguard measure will be a pplied for 200 days from the date of publication 
in the Official Gazette.  
 
5. The basis for:   
5.1 Making a preliminary determination, as pr ovided 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 2007/2008 to 2010/2011, both in absolute terms, and 
relative to domestic production.  The analysis fo und that imports of the product concerned increased 
considerably in that period.   
(year/year percentage) 2007/2008 2008/2009 2009/2010 2010/2011 
Imports volume /tonne 55,124 101,467 101,012 142,289 
Change  %  8 4   --- 41 
Change Imports/Domestic Production   99 ) 3( 7 2  
 
 The information indicates an increase in impor ts by 84 per cent in 2008/2009 when compared 
to 2007/2008, and an increase by 41 per cent in 2010/2011 when comp ared to 2009/2010. 
  The information further indicates that the cha nge of imports as a percentage of domestic 
production increased by 99 per cent in 2008/2009 wh en compared to 2007/2008, and decreased by 
3 per cent in 2009/2010 when compared to 2008/ 2009, and increased by 72 per cent in 2010/2011 
when compared to 2009/2010.   
 
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) 2007/2008 2008/2009 2009/2010 2010/2011 
Change in Market share 
of the Domestic Industry - ) 39( 2 8  ) 50( 
Change in Market share 
of imports  27 (9) 24 
 
The market share of the domestic industry decreased by 39 per cent in 2008/2009 when 
compared to 2007/2008;  increased by 28 per cent in 2009/2010 when compared to 2008/2009, and then decreased by 50 per cent in 2010/2011 when co mpared to 2009/2010.  At the same time, the 
market share of imports increased by 27 per cent in 2008/2009 when compared to 2007/2008;  
decreased by 9 per cent in 2009/2010 when compared to 2008/2009, and then increased by 24 per cent 
in 2010/2011 when compared to 2009/2010.   G/SG/N/7/EGY/4 
 G/SG/N/11/EGY/2 
 Page 3 
  
  2. Domestic sales 
 
(year/year percentage) 2007/2008 2008/2009 2009/2010 2010/2011 
Change in Sales volume  )11( 42 )46( 
 
The domestic industry's sales decreased by 11 per cent in 2008/2009 when compared to 
2007/2008, then increased by 42 per cent in 2009/20 10 when compared to 2008/2009;  and decreased 
by 46 per cent in 2010/2011 when compared to 2009/2010.   
 
3. Production 
 
(year/year percentage) 2007/2008 2008/2009 2009/2010 2010/2011 
Change in Production 
volume   )7( 2 )18( 
 
 Production decreased by 7 per cent in 2008/2009 when compared to 2007/2008;  then it 
increased by 2 per cent in 2009/2010 when comp ared to 2008/2009, and finally decreased by 
18 per cent in 2010/2011 when compared to 2010/2011.    4. Productivity 
 
(year/year percentage) 2007/2008 2008/2009 2009/2010 2010/2011 
Change in Productivity  -- 15 )20( 
 
 Productivity increased by 15 per cent in 2009/2010 when compared to 2008/2009 and decreased by 20 per cent in 2010/2011 when compared to 2009/2010   
 
5. Capacity utilisation rate 
 
 2007/2008 2008/2009 2009/2010 2010/2011 
Change in Capacity 
utilization   - )2( 1 5  - -  
 
 The capacity utilisation decreased by 2 per cen t in 2008/2009 when compared to 2007/2008;  
then increased by 15 per cent in 2009/2010 when  compared to 2008/2009,  and in 2010/2011 the 
capacity utilisation remain stable when compared to 2009/2010.  
 
6. Profit and Loss 
 
(year/year percentage) 2007/2008 2008/2009 2009/2010 2010/2011 
Change in Losses - 10 ) 64( 1 2  
 
 Losses increased by 10 per cent in 2008/2009 wh en compared to 2007/2008;  then it 
decreased by 64 per cent in 2009/2010 when compar ed to 2008/2009.  Finally, in 2010/2011 losses 
increased by 12 per cent when compared to 2009/2010.   
 
7. Employment 
 
(year/year percentage) 2007/2008 2008/2009 2009/2010 2010/2011 
Number of employees   ) 6( ) 9(  -- 
 G/SG/N/7/EGY/4 
G/SG/N/11/EGY/2 
Page 4 
  
   The number of employees decreased by 6 per cent in 2008/2009 when compared to 
2007/2008, then it decreased by 9 per cent in 2009/2010 when compare to 2008/2009.  In 2010/2011 the Employment remain stable when compared to 2009/2010.  
 
Conclusion 
 
 There has been a significant increase in impor ts of the product concerned in year 2010/2011 
in both absolute and relative term s, which led to a deterioration of the indices of the domestic industry 
represented in a decline in the domestic sales and th eir market share, a decline in the production and 
productivity, in addition to an increase in the inventory volume and, realization of losses. 
 Causation 
 
 For the foregoing reasons, the preliminary conclu sion is that there is a correlation between the 
significant 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 th at critical circumstances exist in which delay 
would cause damage which would be difficult to repair.   
 
As indicated above, the serious injury suffered by the domestic industry has worsened during 
the 2010/2011 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 latter will suffer 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 Member s having a substantial interest as exporters of 
the subject products. 
  
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  
1. 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 do not exceed three per cent of total imports into 
Egypt and the share of the Members with less than  a three per cent import share do not collectively 
account for more than nine per cent of total imports into Egypt.    G/SG/N/7/EGY/4 
 G/SG/N/11/EGY/2 
 Page 5 
  
  The address of the competent authority for correspondence is:   
 Ministry of Foreign Trade and Industry  
Trade Agreements Sector 
International Trade Policies Department 
El Maleya Towers – Tower 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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