WORLD TRADE  
ORGANIZATION  G/SG/N/8/TUR/1 
G/SG/N/10/TUR/1 
G/SG/N/11/TUR/1 
13 June 2005 
 
 (05-2441) 
Committee on Safeguards Original:   English 
 
 
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT 
ON SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT 
THEREOF CAUSED BY INCREASED IMPORTS 
 
NOTIFICATION PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2 
OF THE AGREEMENT ON SAFEGUARDS 
 
TURKEY 
 
(Activated Earth and Clays) 
  
 The following notification, dated 8 June 2005, is being circulated at the request of the 
Delegation of Turkey.  
_______________ 
  
 In light of the agreed format for notifications (G/SG/W/1, 23 February 1995), Turkey provides notification to the Committee on Safeguards of  findings of serious injury or threat thereof 
caused by increased imports and notification of proposed safeguard measures.  
 On 17 July 2004, Turkey initiated an investigati on relating to serious injury or threat thereof 
to domestic producers of products like or directly  competing with the imported product.  The 
initiation of the investigation has been  notified to the Committee on Safeguards.
1  
  Consistent with Article 12.3 of the Agreement on Safeguards , Turkey is prepared to consult 
with those Members having a substantial inte rest as exporters of the product concerned. 
  
I. EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY 
INCREASED IMPORTS 
A. E
VIDENCE OF SERIOUS INJURY  
 In order to make a determination of serious in jury to the domestic industry of the like product, 
an evaluation of all relevant factors of an objec tive and quantifiable nature having a bearing on the 
situation of the industry has been undertaken.  Th e petitioner is the only company which produces the 
product under investigation, and accounts for 100% of the domestic production.  Hence, the following 
evaluation has been based upon data pr ovided by the applicant company.  
                                                      
1 G/SG/N/6/TUR/2 G/SG/N/8/TUR/1 
G/SG/N/10/TUR/1 G/SG/N/11/TUR/1 
Page 2 
  
  
1. Capacity Utilization 
2000 2001 2002 2003 2004 
Capacity 
Utilization (%) 100 128 72 69 65 
 
 Capacity utilization fell in 2002 from 128% to 72%.  This fall is explained by the increase in 
capacity in that year.  Capacity utilization fell by  3 percentage points in 2003 and 4 percentage points 
in 2004 (to 65%).  The falls in capacity utilization,  from 2002 onwards reflect the falls in production. 
 
2. Production 
 2000 2001 2002 2003 2004 
Production (quantity 
index) 100 128 143 138 129 
 
 Domestic production fell in 2003 by 4%. Production fell by a further 6% in 2004.    During the investigation it is observed that the domestic industry focused on exports, as it 
cannot compete on price in domestic market especially because of the extremely low import prices of 
Far East originated goods.  Nevertheless, increase in  imports could not compensate domestic industry’ 
loss of production stemming from loss of market share in domestic market.  
 
3. Employment 
 2000 2001 2002 2003 2004 
Employment 
(Index) (end of 
period) 100 112 137 133 130 
 
 The data on employment level does not show a dr amatic decline.  As is shown in the table, 
employment in relation to the product concerned fell slightly starting from 2003.   
 
4. Domestic Sales Volume 
 2000 2001 2002 2003 2004 
Domestic sales 
(quantity index) 100 110 124 93 91 
 
 Domestic sales of the product concerned fell by 25% in 2003, reflecting the fall in consumption and the increase in imports in that year .  However, despite increased consumption in the 
following year, domestic sales continued to fall in 2004 (2%).  This reflects the increasing dominance 
of imports in the market.   
5. Market share 
 2000 2001 2002 2003 2004 
Market share (%) 41 47 46 36 32 
  G/SG/N/8/TUR/1 
 G/SG/N/10/TUR/1 
 G/SG/N/11/TUR/1 
 Page 3 
  
  Domestic industry’ market share fell from 41% to 32% between 2000 and 2004.  The 
substantial falls in the recent period demonstrat e the increasing market share of imports in those 
periods.   
 
 The combination of the fall in prices and loss of market share to imports occurred at the same 
time as a significant fall in the profitability of the domestic producer (discussed below).  
 
6. Price of the like product and undercutting 
 2000 2001 2002 2003 2004 
Unit Prices of 
Domestic sales (US 
$/ton) 415 400 391 419 414 
Unit Prices of  Total 
Imports (US$/ton) 459 459 462 473 460 
Germany 470 492 543 600 653 
USA 380 360 378 386 383 
China   177 254 235 
Indonesia 519 527 490 392 371 
Malaysia   296 333 405 
 
The average unit prices of total imports showed  a stable trend between 2000-2004.  On the 
other hand, the average prices of imports from all sources except Germany are considerably below the 
average prices of domestic sales.   
 
Price Undercutting 
(%) 2000 2001 2002 2003 2004 
Total Imports       
Germany      
USA 8 10 3 8 8 
China   55 39 43 
Indonesia    6 10 
Malaysia   24 20 2 
 
 Based on a comparison of average ex-works prices charged by the domestic producer and by 
exporting producers to the Turkish importers (sum of CIF price, customs duty and other costs), 
domestic prices were undercut throughout the 5 periods examined by between 2% and 55%. 
 
7. Profitability 
 2000 2001 2002 2003 2004 
Net profit/loss (%) 5 6 4 -5 -25 
 
 
 Data relating to profitability is  based on data relating to domes tic sales only.  The profitability 
of the domestic industry in the domestic market va ried significantly in the five-year period under 
consideration.  The lowest profitability was record ed in 2004, and the highest in 2001 in parallel with 
the changes in imports.   G/SG/N/8/TUR/1 
G/SG/N/10/TUR/1 G/SG/N/11/TUR/1 
Page 4 
  
 8. Stocks 
 2000 2001 2002 2003 2004  
Closing stocks 
(quantity index) 100 531 938 1,625 406 
  
Stock levels sharply increased between 2000- 2003.  The increase in stocks after 2002 
coincided with a fall in the domestic sales volume.  In 2004 stock levels decreased below their level in 
2001, as the domestic industry reduced its hi gh stock levels by cutting production.  
 
9. Productivity 
 2000 2001 2002 2003 2004  
Productivity 
(tons/employee) 108 123 113 111 108 
 
Productivity in relation to the product concerne d showed a stable trend during the period 
under consideration.  Productivity slightly increased in  2001 and then decreased back to the level of 
the year 2000. 
 
10. Conclusion 
 The data shows negative developments for domestic sales, market share, prices and 
profitability in the period under consideration.  Th ere was an increase in stocks in 2000-2003 period 
but the stock levels decreased in 2004 below their level in 2001 as the domestic industry reduced its 
high stock levels by cutting production.  
 
 Imports have increased in the period under inv estigation from 5,176 tons in the year 2000 to 
7,020 tons in the year 2004 which means 36% increase in  the level of imports.  It is noteworthy that as 
imports increased by 18% in the year 2004 compared  to the year 2003, the domestic industry’ sales 
volume reached the lowest level in the period under investigation.  Given that imports (with around 
68% of the market for the year 2004) enjoy the position of price-leader, the downward trend in import prices had a considerable depressing effect on domestic industry’ prices. 
 
 As the price of both the imported product and th at produced by the domestic industry fell, the 
domestic industry’ profitability fell to  -25%.  This occurred against an  increase in consumption level 
between 2000-2004.   
 The domestic industry has lost market share, wh ich reached its lowest level in 2004 (32%).   
  Taking account of all of these factors investigating authority concludes that the domestic industry has suffered serious injury.  No other factor s which could have contributed to the injury apart 
from the increase in imports were identified.  Ther efore it is concluded that there is a genuine and 
substantial link between increased imports a nd serious injury to the domestic industry. 
 
B. C
AUSATION ANALYSIS  
In order to examine the existence of a causal link between increased imports and the serious 
injury, and in order to ensure that  injury caused by other factors is not attributed to increased imports, 
the investigating authority analyzed the effects of the following factors:  G/SG/N/8/TUR/1 
 G/SG/N/10/TUR/1 
 G/SG/N/11/TUR/1 
 Page 5 
  
  
1. Analysis of Causation Factors 
- Effect of increased imports: Imports have increased in the period under investigation from 
5,176 tons in the year 2000 to 7,020 tons in the year 2004 which means 36% increase in the 
level of imports.  Additionally imports have grown from 84% to 88%  of domestic production 
indicating that imports have also increased relative to production, at the expense of the domestic industry.  Over the same period the market share of imports grew from 59% to 68%, whilst the market share of the domestic industry fell from 41% to 32%.  
 
Based on a comparison of average ex-works prices charged by the domestic producer and by 
exporting producers to the Turkish importers (sum of CIF price, customs duty and other costs), 
domestic prices were undercut throughout the 5 peri ods examined by between 2% and 55%.  The fall 
in prices taken together with the fall in sales volume occurred at the same time as the domestic 
industry’ profitability fell from -5% in 2003 to -25% in 2004. 
 
 For the foregoing reasons, the investigating au thority concludes that there is a correlation 
between the increase in imports at low prices and th e serious injury suffered by the domestic industry, 
and that the increase in imports has had injurious ef fects in particular in terms of downward pressure 
on prices and a reduction in the volume sold by  the domestic industry on the domestic market. 
 
- Effect of changes in consumption:  The product concerned is an input mainly for vegetable oil 
production. Dependent with the vegetable oil production in Turkey, demand for the product 
concerned has not decreased over the period under consideration. 
 
- Effects of competition between the domestic producers:  The petitioner is the only company 
who produces the product concerned in Turkey.  Hence, competition in domestic market has 
not an injurious effect.  
 - Changes in production technology: The production technology used by the domestic industry 
is same with the technology used by foreign producers. 
 
- Alternative products and changes in consumer preferences:  There is no product which will be 
substitute to the product concerned.  Therefore changes in user prefer ences  have not been 
found. 
 
- Lack of production capacity:  The domestic i ndustry has adequate production capacity to meet 
demand from the vegetable oil industry.  
 - Changes in financial costs:  The investigating authority determined that changes in financial 
costs did not contribute to the injury suffered by the domestic industry. 
 
- Effects of changes in export performance:  The e ffect of variations in the level of exports has 
also been examined.  Exports increased throughout  the period under consideration, in the light 
of the prevalent circumstances in the domestic  market, domestic industry sought to increase 
their exports.  Hence, there is no link between the changes in exports and the injurious effects 
observed.  
 G/SG/N/8/TUR/1 
G/SG/N/10/TUR/1 G/SG/N/11/TUR/1 
Page 6 
  
 2. Conclusion on causation 
 After having examined the injurious effects of the other known factors, the investigating 
authority has reached the conclusion that there is  a genuine and substantial link between increased 
imports and serious injury to the domestic industry. 
 
II. INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN 
IMPORTS OR AN INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION 
The investigation was conducted in accordance w ith the requirements of Turkish Legislation 
on Safeguard Measures and the procedures prescrib ed by the WTO Agreement on Safeguards and 
Article XIX of GATT 1994, i.e. determination of ex istence of unforeseen developments and effect of 
obligations, including tariff concessions which led to  the increased imports and resulting injury to the 
domestic producers.   
 
Although, these circumstances need not be dem onstrated for the reason that the product 
concerned is not the subject of any tariff concessi on granted by Turkey under the WTO Agreement, 
current investigation was governed by the national legislation and the term s and conditions of the 
Agreement on Safeguards and Article XIX of GATT 1994. 
 
 The investigating authority found that the va lue of Turkish Lira appreciated unexpectedly 
since 2002.  According to the data circulated by the Central Bank of the Republic of Turkey, Turkish 
Lira appreciated by 22% in real terms in the period of December 2002-December 2004.  The real 
value gain of Turkish Lira speeded up the imports and lessened the competitive power and 
profitability of the domestic industry. The increas ed imports in significant quantities consequently 
eroded the domestic industry’s market share.  More over, the depreciation of US dollar against euro 
gave more advantage to the countries that use US  dollar as the trade settlement currency (like East 
Asian countries).  These circumstances are the unforeseen developments under Article XIX of GATT 1994.  
An examination has been undertaken based on da ta for the period 2000 to 2004, focusing on 
imports in the most recent period for which reliabl e data are available, to establish whether the 
product concerned is imported into Turkey in such greatly increased quantities, absolute or relative to 
total domestic production, and/or on su ch terms or conditions as to cause, or threaten to cause, serious 
injury to the domestic industry.   
The table below shows the development of im ports for the years 2000-2004.  The imports 
figures are the figures for imports of bleaching earth-acid activated clays.  
1. Volume of Imports 
 2000 2001 2002 2003 2004 
Total imports (ton)  5,176 4,479 5,223 5,953 7,020 
Germany 2,407 2,220 2,049 2,220 1,850 
USA 1,934 1,655 2,466 2,518 3,895 
China   96 435 276 
Indonesia 835 492 480 545 867 
Malaysia   132 235 132  G/SG/N/8/TUR/1 
 G/SG/N/10/TUR/1 
 G/SG/N/11/TUR/1 
 Page 7 
  
 Others  112    
 
 Volume of imports in 2001 decreased by 13% comp ared to level of imports in 2000 due to the 
macro-economic crisis occurred in Turkey in that year.  In the following year, the imports increased 
by 17% and reached 5,223 tons.  The rate of incr ease was 14% in 2003 and 18% in 2004.  The volume 
of imports increased by 36% in the period of 2000-2004. 
 
 2000 2001 2002 2003 2004 
Total imports 
(quantity index)  100 87 101 115 136 
Domestic 
Production (quantity index) 100 128 143 138 129 
Imports/ 
Production 84% 57% 59% 70% 88% 
 
 Relative to total domestic production, imports  decreased from 84% in 2000 to 57% in 2001 
due to the macro-economic crisis occurred in Turkey  in that year.  The ratio showed an upward trend 
starting from 2002.  Imports increased by 59% in 2002 and 70% in 2003 relative to domestic production.  For the year 2004, the ratio reached to its highest level by 88%. 
 2. Market share of imports 
 2000 2001 2002 2003 2004 
Market share of 
imports 59% 53% 54% 64% 68% 
 
 The market share of imports showed an upward trend between 2000 and 2003 except the year 
2001 in which a macro economic crisis occurred in Turkey, and increased from 59% to 64% in the 
mentioned period.  The market share taken by impor ts further increased to 68% in the year 2004.  
  
3. Import prices 
US $/ton 2000 2001 2002 2003 2004 
Total Imports  422 422 425 435 423 
Germany 456 478 527 583 634 
USA 350 331 348 355 352 
China   192 276 255 
Indonesia 493 501 466 373 353 
Malaysia   281 317 385 
 
 The average prices of the total imports showed  a stable movement between 2000-2002.  In the 
year 2003 average import prices increased slightly and in the year 2004 import price level decreased 
back to the level of 2000-2002 period.  On the othe r hand, a country based analyze of import prices 
showed that average prices of imports except im ports from Germany are significantly low than the 
average prices of total imports.   G/SG/N/8/TUR/1 
G/SG/N/10/TUR/1 G/SG/N/11/TUR/1 
Page 8 
  
 III. PRECISE DESCRIPTION OF THE PRODUCT INVOLVED 
 The product in respect of which the domestic producer had claimed that trends in imports 
appear to call for safeguard measures is bleaching earth-acid activated clays.  The product concerned 
was classified within the Turkish Customs Tariff Schedule 3802 90 00 90 11 of which heading was 
activated earth and clays.  The single code number 3802 90 00 90 11 covers both acid and alkali 
activated earth and clays for various purposes lik e filling material in paper production or drilling 
industry, bleaching agent for paints, vegetable oils, fruit juices and/or alcoholic beverages industries.  
But physical and chemical characteristics and im port price ranges of the mentioned products are 
significantly different.  
  Since the product concerned were classified  within the code number 3802 90 00 90 11, the 
investigation had been initiated for the mentioned code number.  But all of the figures regarding the 
imports and domestic industry are figures of bleachi ng earth-acid activated clays.  To figure out the 
level of imports for the product concerned, the inv estigating authority has sent a questionnaire to all of 
the importers and selected the figures for imports of bleaching earth-acid activated clays.      On the other hand, on December 31, 2004 the Turkish Customs Tariff Schedule was changed 
and a specific customs code was set for bleaching earth-acid activated clays as 3802 90 00 90 13.  Hence, the product concerned is classified under the code number 3802 90 00 90 13 as bleaching 
earth-acid activated clays (pH value less than 7). 
  
IV. DESCRIPTION OF THE PROPOSED MEASURE 
 It is proposed to impose definitive safeguard measure in the form of quantitative restriction 
which will be implemented for the imports under the CI F price of 0.31 US $ /kg.  The price level was 
established in consistent with the aim of preventing ser ious injury to the domestic  industry.  If the CIF 
import price of the product concerned is equal to or  higher than 0.31 US $ per kg., the imports will not 
be subject to quota implementation.     The level of quota was calculated on the basi s of the average volume imported under the CIF 
price of 0.31US $/kg. in the last three years (2002-2 004).  Accordingly, the quota for the first year of 
the measure implementation is 1,245,000 kg.  
   
Below is the list of Developing Countries exclude d from the measures as they export less than 
3% of imports to Turkey (Article 9.1 of the Agreement on Safeguards ) 
  United Arab Emirates; Afghanistan; Antigua and Barbuda; Angola; Argentina; American 
Samoa; Anguilla; Antarctica; Aruba; Azerbaijan; Barbados; Bangladesh; Burkina Faso; Bahrain; 
Burundi; Benin; Belarus; Bolivarian Republic of Venezuela;  Brunei Darussalam; Bolivia; Brazil; 
Bahamas; Bhutan; Botswana; Belize; Bermuda; Bouve t Island; British Virgin Islands; British Indian 
Ocean Territory; Democratic Republic of Congo; Central African Republic; Congo; Côte d'Ivoire; 
Cameroon; Chad; Colombia; Costa Rica; Cuba; Ca pe Verde; Cayman Islands; Chile; Christmas 
Islands; Cocos Islands; Cook Islands;  Djibouti;  Dominica;  Dominican Republic;  Algeria;  Ecuador;  
Egypt;  Eritrea;  Ethiopia;  Fiji;  Federated States of Micronesia;  Falkland Islands;  French Polynesia;  
French Southern Territories;  Gabon; Grenada;  Ghana;  Gambia; Georgia; Greenland; Guinea;  
Equatorial Guinea;  Guatemala;  Guinea-Bissau;  Guyana;  Gibraltar;  Guam;  Honduras; Haiti;  Heard 
Island and McDonald Islands;  I ndia;  Iraq;  Iran (Islamic Republic of);  Jamaica;  Jordan; 
Kazakhstan; Kenya, Cambodia, Kiribati, Comoros, St Kitts and Nevis, Kuwait, Kyrgyzstan; Laos;  
Lebanon;  St Lucia;  Sri Lanka;  Liberia;  Lesotho;   Libyan Arab Jamahiriya;   Morocco;  Madagascar;  
Marshall Islands; Mali; Moldova; Mongolia; Ma uritania; Mauritius; Maldives; Malawi;   G/SG/N/8/TUR/1 
 G/SG/N/10/TUR/1 
 G/SG/N/11/TUR/1 
 Page 9 
  
 Mozambique; Macao ; Mayotte; Montserrat; Namibia; Niger; Nigeria;  Nicaragua;  Nepal;  Nauru;  
Netherlands Antilles;  New Caledonia;  Niue Island;   Norfolk Island;  Northern Mariana Islands;  
Oman;  Panama;  Peru;  Papua New Guinea;  Philippi nes;  Pakistan;  Palau;  Paraguay;  Pitcairn;  
Qatar; Russian Federation; Rwanda;  Samoa;  Saudi Arabia;  Solomon Islands;  Seychelles;  Sudan;  
Sierra Leone;  Senegal;  Somalia;  Suriname;  Sao Tomé and Principe;  El Salvador;  Syrian Arab 
Republic;  Swaziland;  South Georgia and South Sandwi ch Islands;  St Helena and dependencies;  St 
Pierre and Miquelon;  Tajikistan; Thailand; Togo;  Tunisia;  Tonga;  East Timor;  Trinidad and 
Tobago; Turkmenistan; Tuvalu;  Tanzania;  Tokela u;  Turks and Caicos Islands;  Ukraine; United 
States Minor outlying islands;  Uganda;  Uruguay; Uzbekhistan; St Vincent;  Vietnam;  Vanuatu;  
Virgin Islands of USA;  Wallis a nd Futuna Islands;  Yemen;  Sout h Africa;  Zambia and Zimbabwe. 
 
V. PROPOSED DATE OF INTRODUCTION OF THE MEASURE 
The date of introduction of the proposed measure is ………         . 
 
VI. EXPECTED DURATION OF THE MEASURE 
 The expected duration of the proposed measure is three years. 
 
VII. PROPOSED DATE FOR THE REVIEW  
 Not applicable. 
 
VIII.  EXPECTED TIMETABLE FOR PROGRESSIVE LIBERALIZATION OF THE 
MEASURE 
In order to induce adjustment, the quota level will be subject to liberalization on a regular 
basis following its imposition, thereby ensuring that  there is a strong incentive for domestic producer 
to progressively undertake the necessary restructurin g and adjustment.  The timetable for progressive 
liberalization of the proposed measure is shown below.   
1
st year (period) 2nd year (period) 3rd year (period) 
1,245,000 kg. 1,310,000 kg. 1,375,000 kg. 
 
IX. INFORMATION RELATING TO THE EXTENSION OF A SAFEGUARD MEASURE 
 Not applicable. 
 
__________