WORLD TRADE  
ORGANIZATION  G/SG/N/6/EGY/4 
G/SG/N/7/EGY/3 15 February 2008 
 
(08-0674) 
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 SAFEGUARDS 
MEASURE REFERRED TO IN ARTICLE 6 
 
EGYPT 
 
Blankets
 
  
 The following notification, dated 11 February 2008,  is being circulation at the request of the 
Delegation of Egypt.    
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The Arab Republic of Egypt, hereby wishes to notify the Committee on Safeguards:  pursuant 
to Article 12.1(a) of the Agreement on Safeguards of  the initiation of a safeguard investigation on the 
imports of blankets manufactured of artificial fibres of all sizes and weights, and pursuant to 
Article 12.4 of the Agreement on Safeguards, be fore taking provisional safeguard measures for 
imports of blankets manufactured of artif icial fibres of all sizes and weights.   
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G/SG/N/7/EGY/3 Page 2 
 
 
  A. N
OTIFICATION 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 further to a d ecision of the Minister of Trade and Industry 
dated on 10 February 2008.  The no tice of initiation by the investiga ting authority will be published in 
the Government Gazette on 12 February 2008.   
 
2. Specify the product subject to investigation 
 Blankets manufactured of artificial fibres of all sizes and weights.  The product is classified 
under HS tariff item numbers:  630190 and 630140.   
 
3. The reasons for the initiation of investigation 
 The investigation was initiated after examina tion of a documented safeguards petition filed by 
the Egyptian company Misr Spain Co., in which it alleged that increased imports of the subject 
product had caused serious injury to the domes tic industry producing similar products.   
 
The data currently available also shows a situation of continuously growing domestic 
consumption, increasing inventories, decreasi ng selling prices and domestic sales and sharply 
declining market share for the domestic industry, in conjunction with the increase in imports.    
 Accordingly, it was established that there was sufficient evidence in the application to justify 
the initiation of the investigation in order to dete rmine whether or not the increase of imports had 
caused serious injury to the domestic industry.    
4. Further information 
 Interested parties must make themselves know n within a period of 30 days after the initiation 
of the investigation.     Any information which the interested parties may wish to submit in writing and any request 
for a hearing before the investigating authority that  they may wish to put forward should be submitted 
within 30 days following the initiation of this investigation.   
 
 The address of the competent authority for correspondence is:    
Ministry of Trade and Industry Trade Agreements Sector 
International Trade Policies Department 
El Maleya Towers – Tower No. 6 – 9
th 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    G/SG/N/6/EGY/4 
 G/SG/N/7/EGY/3 
 Page 3 
 
 
  B. NOTIFICATION UNDER ARTICLE 12.4  ON TAKING A PROVISIONAL SAFEGUARD MEASURE  
1. The product subject to the provisional safeguard measure 
 Product subject to investigati on is blankets manufactured of artificial fibres of all sizes and 
weights.  The product is classified under HS tariff item numbers:  630190 and 630140.   
 
2. The provisional safeguard measure 
 The provisional measure is in the form of specific duty of 22 EGP/kg.   
 
3. Date of introduction of the safeguard measure 
 The provisional safeguard measure will be imposed from 12 February 2008 to 
29 August 2008.    
4. Expected duration of the provisional measure 
 The provisional safeguard measure will be in force for two hundred days from the date of its 
introduction.   
 
5. The basis for:   
5.1 Making a preliminary determination, as provided for in Article 6 of the Agreement on 
Safeguards, that increased imports are caus ing and are 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 2004 to 2006, and the first six month of 2007 compared with same period in 2006, both in absolute terms, and relative to domestic production.  The analysis 
found that imports of the product concerned in creased considerably in that period.   
 
 2004 2005 2006 1
st 6 months  
of 2006 1st 6 months 
of 2007 
Imports  (000 blankets) 128 421 6087 3707 4315 
Imports/Domestic 
Production  (year/year percentage) - 229% 1346% - 16% 
 
 The information indicates an increase in impor ts by 229 per cent in 2005, when compared 
to 2004;  by 1346 per cent in 2006, when compared to 2005, and by 16 per cent in the first half of 2007, when compared to the same period in 2006.   
 
 The information further indi cates that the imports as a percentage of domestic production 
increased by 194 per cent in 2005, when compared to 2004;  by 1310 per cent in 2006, when compared to 2005 and by 41 per cent in the first ha lf of 2007, when compared to the same period 
in 2006.   
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G/SG/N/7/EGY/3 Page 4 
 
 
   Based on the import statistics for the period 2004 to first half of 2007, a preliminary 
determination was made that there was a rapid and sharp increase in imports, both in absolute terms 
and relative to domestic production.    
 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) 2004 2005 2006 1
st 6 months 
of 2006 1st 6 months 
of 2007 
Market share of the Domestic Industry - (36%) (87%) - (33%) 
Market share of 
imports - 96% 77% - 2% 
 
The market share of the domestic industry decr eased by 36 per cent in 2005, when compared 
to 2004;  by 87 per cent in 2006, when compared to 2005, and then by 33 per cent during the first half of 2007, when compared to the similar period in 20 06.  At the same time, the market share of imports 
increased by 96 per cent in 2005, when compared to  2004;  by 77 per cent in 2006, when compared 
to 2005, and then by 2 per cent during the first ha lf of 2007, when compared  to the similar period 
in 2006.  The domestic industry lost significant market shares to the increasing imports.    2. Domestic sales 
 
(year/year percentage)  2004 2005 2006 1
st 6 months 
of 2006  1st 6 months 
of 2007  
Sales volume - 8% (2%) - (26%) 
 
The domestic industry's sales increased by 8 pe r cent in 2005, when compared to 2004 and 
then declined by 2 per cent in 2006, when compared to 2005.  This decline continued in the first half 
of 2007 by 26 per cent, when compared to the similar period in 2006.    3. Production  
(year/year percentage)  2004 2005 2006 1
st 6 months 
of 2006  1st 6 months 
of 2007  
Production volume  - 13% 5% - (18%) 
 
 Production increased by 13 per cent in 2005, when compared to 2004, and then by 5 per cent 
in 2006, when compared to 2005, although the dom estic market grew by 717 per cent over the same 
period.  The decline in production started in the fi rst half of 2007, when compared to the similar 
period in 2006, despite an increasing domestic market.    G/SG/N/6/EGY/4 
 G/SG/N/7/EGY/3 
 Page 5 
 
 
  4. Productivity 
 
(year/year percentage)  2004 2005 2006 1st 6 months 
of 2006 1st 6 months 
of 2007 
Productivity - (6%) 3% - 1% 
 
 After a decline in 2005, when compared to 200 4, productivity increased by 3 per cent in 2006, 
when compared to 2005 and by 1 per cent in the fi rst half of 2007, when compared to the similar 
period 2006.  Productivity was maintained at the cost  of a significant dismissal of employees over this 
period.   
 5. Capacity utilisation rate  
(year/year percentage)  2004 2005 2006 1
st 6 months 
of 2006 1st 6 months 
of 2007 
Capacity utilization   - (5%) 5% - (17%) 
 
 The capacity utilisation fell by 5 per cent in  2005, when compared to 2004;  increased by 
5 per cent in 2006, when compared to 2005, and th en dropped by 17 per cent again in the first half 
of 2007, when compared to the similar period in 2006. 
 
6. Profit and Loss  
(year/year percentage)  2004 2005 2006 1
st 6 months 
of 2006 1st 6 months 
of 2007 
Losses - (9%) 72% - 3% 
 
 Losses decreased in 2005, when compared to year 2004, but then increased by 72 per cent 
in 2006, when compared to 2005.  Deterioration c ontinued in the first half of 2007 as losses increased 
by 3 per cent when compared to the similar period in 2006.    
7. Employment 
 
(year/year percentage)  2004 2005 2006 1
st 6 months 
of 2006 1st 6 months 
of 2007 
Number of employees  - 20% - - (18%) 
 
 The number of employees increased by 20 per cen t in 2005, when compared to 2004, but 
there was no change in 2006.  In the first half of 2007, the number of employees decreased by 18 per 
cent, when compared to the similar period in 2006.    
8. Inventory 
 
(year/year percentage)  2004 2005 2006 1
st 6 months 
of 2006 1st 6 months 
of 2007 
Inventories - 29% 41% - 68% 
 
 Inventories increased by 29 per cent in 2005, when compared to 2004;  by 41 per cent in 2006 
when compared to 2005, and by 68 per cent in the fi rst half of 2007, when compared to the similar 
period in 2006, as the domestic industry was not ab le to dispose of its production.  These increases 
took place despite a substantial increase in  the size of the domestic market.   
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  9. Other factors 
  It was also noted that the continuous incr ease in imports was accompanied by a continuous 
decline in the average domestic selling price of the domestic industry.  Along, with the notable 
increase in the import volumes in 2005, the average price of the domestic industry declined by 9 per 
cent in 2005, when compared to 2004;  by 20 per cen t in 2006, when compared to 2005, and by 4 per 
cent in the first half of 2007, when comp ared to the similar period in 2006.   
 10. Preliminary determination 
 
 After considering all relevant factors, a prel iminary determination was made that the domestic 
industry was suffering serious injury.     CAUSATION 
 
 Imports have increased by 229 per cent in 2005, when compared with 2004;  by 1346 per cent 
in 2006, when compared to 2005;  and by 16 per cent during the first half of 2007, when compared to the similar period in 2006.  In addition, the mark et share index of imports increased by 96 per cent 
in 2005, when compared to 2004;  by 77 per cent in 2006, when compared to 2005, and by 2 per cent in the first half of 2007, when compared to the si milar period in 2006.  This led to a decline of the 
market share of the domestic industry by 36 per cent in 2005, when compared to 2005;  by 87 per cent 
in 2006, when compared to 2005, and by 33 per cent in the first half of 2007, when compared to the similar period in 2006.  Moreover, the increase in im ports also led to a declin e in sales and an increase 
in inventory in 2006 and during the first half of  2007 and a decline in production, production capacity 
and number of employees in the first half of 2007, when compared to the similar period in 2006.  
Furthermore, as a result of the sharp increase in  imports, the average price of the like product 
decreased by 9 per cent in 2005, when compared to 2004;  by 20 per cent in 2006, when compared to 2005, and by 4 per cent in the first half of 2007, when compared to the similar period in 2006.     For the foregoing reasons, the preliminary conclu sion is that there is a correlation between the 
significant increase in imports and the serious injury suffered by the domestic industry, particularly in 
terms of a reduction in domestic sales and mark et share of the domestic industry and downward 
pressure on prices.   
 
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 that  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 first six months of 2007 with the ever continuing increase in the volume of imports.  Given the 
rate of increase of imports and the situation of th e domestic industry, it is considered that the latter 
will suffer damage, which will be difficult to re pair, in the absence 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 product at any time after 12 February 2008.    
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