WORLD TRADE  
ORGANIZATION  G/SG/N/13/MDA/1 
27 February 2007 
 (07-0832) 
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 
 
(White Sugar
) 
 
 
 The following communication, dated 19 February 2007, is being circulated at the request of 
the Delegation of the Republic of Moldova . 
 
_______________ 
   Pursuant to Article 12.5 of the Agreemen t on Safeguards the Republic of Moldova hereby 
gives notification about the mid-term revi ew 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 impor ts of white sugar.  The additional duty was 
set at a level consistent with the aim of preventi ng serious injury to the Moldovan producers.  Further 
details regarding the measure are set out in  the notification 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 white sugar and is curre ntly classified within the HS codes ex.1701- 
white (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 in 
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. 
In order to review the situation of the domes tic industry after the imposition of the safeguard 
measure, the analysis conducted by the competen t authorities focused on data related to the period 
between January 2002 and December 2006. G/SG/N/13/MDA/1 
Page 2  
 
  Moldova inherited from 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 to the demands of the current market conditions.  In 2003, in Moldova were imported 40 thousands 
tones of sugar or 50 per cent of internal consumption.   
Safeguard measures implemented on 1 February 2004 created appropriate conditions for the 
domestic industry to increase its share in the domestic market. 
  
  2002 2003 2004 2005 2006 
Domestic production 1000 tons 114 83 111 133 148 
Import sugar 1000 tons 72 74 0 8 0 
Export 1000 tons 38 26 5 13 30 
Sales to domestic market 1000 tons 150 105 101 114 86 
Incl.         
       Domestically produced sugar 1000 tons 111 40 101 106 86 
       Import sugar 1000 tons 39 65 0 8 0 
Market share of the domestic product   74% 38% 100% 93% 100% 
Market share of imports   26% 62% 0% 7% 0% 
Domestic producers stocks at the year 
end 1000 tons 63 73 71 83 111 
 
Under protection of safeguard measures the dom estic industry became profitable.  Profits 
generated by the sugar industry were mainly reinvest ed in sugar factories and agricultural equipment. 
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
 
 
 
Adjustments in the agricultural sector  
 
Radical changes were made in the beet growing sector by implementation of more efficient 
technologies through mechanisation, seeds selection, efficient application of fertilisers and modern 
plants protection measures.  Results are very encouraging since the sugar yield per hectare has  G/SG/N/13/MDA/1 
 Page 3 
 
 
  doubled from 2003 till 2006.  This was mainly achieve d by increased beet yield per hectare and by 
increased sugar content in the beets. 
    Change 
2006/2003 
    2003 2004 2005 2006 
% 
Area under cultivation (1000 ha) 39 38 32 33 -15% 
Beets harvested (1000 tons) 662 944 986 1.074 62% 
Yield (t beets/ha) 17,0 24,9 30,8 32,5 91% 
Sugar content at reception (%) 16,5% 15,4% 16,8% 17,0% 3% 
Sugar yield per hectare (t sugar/ha) 2,8 3,8 5,2 5,5 97% 
Total sugar production ('1000 tons) 83 111 133 148 79% 
 
Although results are very encouraging, the beet growing sector is still less efficient than other 
east European neighbours.  Industry experts belie ve Moldovan beet growers must achieve a sugar 
yield of 8 tons of sugar per hectare to become comp etitive.  This result is achievable and the evidence 
is that some 20 per cent of the growers in the country achieved this benchmark. 
Industrial sector adjustment  
 
Large investments in sugar factories resulted in significant increase of the beet processing 
efficiency. 
    
2003 2004 2005 2006 Change 
2006/2003 
Beets harvested 1000 tons 662 944 986 1.074   
Beets processed 1000 tons 650 927 975 1.062   
Losses at reception % -1,9% -1,8% -1,1% -1,1% -42% 
Sugar production 1000 tons 83 111 133 148 79% 
Sugar content at reception % 16,47% 15,40% 16,76% 17,00%   
Sugar extraction % 12,76% 11,95% 13,66% 13,98% 10% 
Losses in production % 3,71%  3,45% 3,10% 3,02% -18% 
Energy consumption kWatt / t sugar 3.674 3.404 2.942 2.785 -24% 
Sugar produced per employee t Sugar/employee 28 39 52 63 129% 
Capacity utilisation % 34% 49% 60% 66%   
 
The industry losses at beet reception were reduced  by 42 per cent.  These losses can be further 
reduced by improving beet delivery and logistics.   Sugar extraction increased from 12,75 per cent in 
2003 to 13,98 per cent in 2006.  The 10 per cent incr ease is a compounded effect of increased sugar 
content in the beets and reduced losses in produc tion.  Losses in production were reduced from 
3,71 per cent  in 2003 to 3,02 per cent in 2006 due to technology improvements.   
Industry energy consumption was reduced by 24 per cent in the above mentioned period.  
However, there is more room for improvement si nce Moldovan sugar industr y is still lagging behind 
other European sugar producers. 
The industry increase of labour productivity (129 per cent) is another evidence of industry 
improving its competitiveness through technology improvements, mechanization and automation.  G/SG/N/13/MDA/1 
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  The productivity of 63 tons is still considerably lowe r than that in EU (about 260 tons per employee).  
Although such productivity is not achievable in Mol dova due to much smaller size of the industry, 
experts believe the level of 150 – 170 tons of sugar per employee is achievable in 5 years time 
horizon.   
Capacity utilization remains quite low – 66  per cent in 2006, although it increased from 
34 per cent  in 2003. 
The review conducted by the Moldovan author ity concluded that the application of the 
safeguard measures in force is eff ective, still necessary and that the current pace of liberalisation is 
appropriate.   
4. Conclusions 
The analysis of the trend in the situation of the domestic sugar industry, 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 s till necessary 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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