WORLD TRADE  
ORGANIZATION  WT/DS351/2 
WT/DS356/2 9 March 2007 
 
(07-1048) 
 Original:   Spanish 
  
 
CHILE – PROVISIONAL SAFEGUARD MEASURE 
ON CERTAIN MILK PRODUCTS/ 
CHILE – DEFINITIVE SAFEGUARD MEASURE 
ON CERTAIN MILK PRODUCTS 
 
Request for the Establishment of a Panel by Argentina
 
   The following communication, dated 8 March 2007, from the delegation of Argentina to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU. 
 
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  I have been instructed by the Government of  the Argentine Republic to contact you in order 
to request the establishment of a panel pursuant to Article XXIII of the General Agreement on Tariffs 
and Trade 1994 (GATT 1994) , Articles 4 and 6 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes (DSU ), and Article 14 of the Agreement on Safeguards (AS),  in 
connection with the imposition by the Government of  Chile of provisional and definitive safeguard 
measures on certain milk products from Argentina.    
 In this connection, Exempt Decree No. 728, pub lished in the Official Journal of the Republic 
of Chile on 13 October 2006, provides for the impos ition of a provisional safeguard on certain milk 
products from Argentina in accordance with the r ecommendation contained in the Minutes of Meeting 
No. 282 of the "National Commission responsible for i nvestigating distortions in the price of imported 
goods" (hereinafter the Commission on Distortions).  Subsequently, likewise pursuant to the recommendation of the Commission, as contained in  the Minutes of Meeting No. 285, Exempt Decree 
No. 987, published in the Official Journal of the Republic of Chile of 14 December 2006, ordered the 
imposition of a definitive safeguard on the same produc ts.  It should be noted that these measures 
were adopted in the course of an investigation pr ocedure initiated by resolution of the Commission on 
Distortions, as is clear from the Minutes of Meeting No. 279 published on 11 September 2006.  
 On 25 October 2006, Argentina requested cons ultations with Chile concerning the initiation 
of the safeguard investigation and the subseque nt imposition of a provisional safeguard.  The 
consultation meeting was held on 23  November 2006 in Santiago, Chile.
1  Subsequently, in the light 
of the imposition of a definitive safeguard, Argentin a requested further consultations with Chile on 
28 December 2006, and these were  held on 2 February 2007.2  Thus, in both cases, an attempt was 
made to reach a mutually satisfactory settlement, but  this attempt unfortunate ly failed to produce any 
results.  
                                                     
 
1 The above-mentioned request was circulated on 30 October 2006 to the rest of the WTO Members in 
document WT/DS351/1. 
2 The above-mentioned request was circulated on 9 January 2007 to the rest of the WTO Members in 
document WT/DS356/1. WT/DS351/2 
WT/DS356/2 Page 2 
 
 
   As the measures concerned were adopted at different times, they were the subject of 
successive individual consultations.  Nevertheless Argentina considers that, as these measures were ordered in the course of the same  investigation procedure, their integrated and combined treatment by 
the same Panel under a unified procedure for th e settlement of both disputes would be more 
conducive to a comprehensive settlement of the claims put forward by Argentina. 
 
Background and identification of the measures at issue
 
 
 On 1 September 2006, according to the Minutes of Meeting No. 279 of the Commission on Distortions, it was decided to initiate a safegua rd investigation on imports of powdered milk, 
classified under tariff subhead ings 0402.1000, 0402. 2111, 0402.2112, 0 402.2113, 0 402.2114, 
0402.2115,  0402.2116, 0402.2117,  0402.2118, 0402.29 11, 0402.2912, 0402 .2913, 0402.2914, 
0402.2915, 0402.2916, 0402.2917 and  0402.2918;  liquid milk, classified under tariff subheadings 
0401.1000, 0401.2000, 0401.3010, 0401.3020, 0401.3030, 0401.3040, 0401.3090 and 0402.9110;  
and Gouda cheese, classified under tariff subheading 0406.9010 of the Chilean Harmonized Tariff, as 
requested by the National Federation of Milk Pr oducers, FEDELECHE.  The investigation began on 
11 September 2006, the date of publicati on in the Official Journal of Chile. 
  Subsequently, at the meeting of 6 October 2006 of the Commission on Distortions (Minutes 
of Meeting No. 282), it was decided to recommend the imposition of a provisional tariff surcharge of 
23 per cent on imports from Argentina of powde red milk, classified under tariff subheadings 
0402.1000, 0402.2111, 0402.21 12, 0402.2113, 0402.2114, 0402 .2115, 0402.2116, 0402.2117, 
0402.2118, 0402.2911, 0402.2912, 0402.2913, 0402.2914, 0402.2915, 0402.2916, 0402.2917 and 0402.2918, with the exception of powdered cream u nder those subheadings;  liquid milk, classified 
under tariff subheadings 0401.1000, 0401.2000, 0401.3010, 0401.3020, 0401.3030, 0401.3040, 
0401.3090 and 0402.9110, with the exception of liquid cream and evaporated milk under those 
subheadings;  and Gouda cheese, classified under ta riff subheading 0406.9010.  In accordance with 
the terms of the recommendations by the Commission on Distortions, the Ministry of Finance, by order of the President of the Republic, issued Ex empt Decree No. 728 of 12 October 2006 ordering 
the establishment of a provisional safeguard measur e with a maximum period of application of 200 
days.  This measure was published in the Official Journal of Friday, 13 October 2006. 
 
 At its meeting on 5 December 2006 (Minutes of Meeting No. 285), the Commission on Distortions terminated the investigation and reco mmended the imposition of a definitive safeguard in 
the form of a tariff surcharge of 23 per cent on impor ts from Argentina of powdered milk, liquid milk 
and Gouda cheese, which at the time were subject to the provisional safeguard.  Pursuant to that 
recommendation, on 12 December 2006 the Ministry of Finance, by order of the President of the 
Republic, issued Exempt Decree No. 987 imposing a safeguard for a period of one year from 
13 October 2006.  The Decree was published in the Official Journal of Thursday, 14 December 2006. 
  Consequently, the measures at issue include the Minutes of Meeting No. 279 of the Commission on Distortions, at which initiation of th e investigation was ordered;  Exempt Decree 
No. 728, which provides for the imposition of the provisional safeguard;  Exempt Decree No. 987, 
ordering the imposition of the definitive safeguard, and the extensions and any related amendments 
thereto;  and the proceedings which resulted in the imposition of these measures.   WT/DS351/2 
 WT/DS356/2 
 Page 3 
 
 
  Legal basis of the claim  
 
 The Government of the Argentine Republic c onsiders that these measures violate Chile's 
obligations under the relevant provisions of the GATT 1994 and the Agreement on Safeguards, 
particularly, but not exclusively with regard to: 
 1. Articles I:1 and XIX:1 of the GATT 1994 and Ar ticle 2.2 of the Agreement on Safeguards, 
inasmuch as both the provisional safeguard m easure and the definitive safeguard measure 
discriminate between products from Argentina and products from other WTO country Members, by 
virtue of being imposed solely on imports from Argen tina.  In addition, the investigation procedure of 
the Chilean implementing authority was also conduc ted in a discriminatory manner, inasmuch as 
imports from other sources were not taken into account. 
2. Articles 2.1 and 4.2(a) and (b) of the Ag reement on Safeguards, in conjunction with 
Article 4.1(c) of the Agreement on Safeguards a nd Article XIX:1 of the GATT 1994, inasmuch as the 
initiation of the investigation, the determinations  and the resulting measures were not based on an 
adequate definition of like or directly competitiv e products or of the domestic industry for like 
products or products directly compe ting with allegedly increased imports. 
3. Articles 3.1 and 4.2(c) of the Agreement on  Safeguards and Article XIX of the GATT 1994, 
inasmuch as the competent authorities have not set fo rth or included in their reports (Minutes of the 
Commission) or in any part of the record of investigation proceedings the findings and reasoned 
conclusions on all pertinent issues of fact and law, as required by the Ag reement on Safeguards and 
Article XIX of the GATT 1994, including justificatio n of the measures imposed in relation to both the 
provisional safeguard and the definitive safeguard.  No r have they included a detailed analysis of the 
case under investigation, or demonstrated the relevance of the factors examined. 
4. Article XIX:1 of the GATT 1994, since the competent authorities of Chile have not 
demonstrated the occurrence of unforeseen devel opments warranting exceptional action such as the 
imposition of a safeguard.  Nor have they establishe d that the alleged increase in imports and the 
conditions of their importation were the result of unforeseen developments and the effect of 
obligations assumed under the GATT 1994. 
5. Article XIX:1 of the GATT 1994 and Articles 2. 1 and 4.2(a) and (b) of the Agreement on 
Safeguards, inasmuch as it was not properly establis hed that imports were entering "in such increased 
quantities, absolute or relative to domestic produc tion, and under such conditions as to cause or 
threaten to cause serious injury to the domestic industry that produces like or directly competitive 
products". 
6. Articles 2.1, 4.1(a) and (b) and 4.2(a) and (b) of the Agreement on Safeguards and 
Article XIX of the GATT 1994, inasmuch as there was not shown to be a significant overall 
impairment in the position of the domestic industry or  any clearly imminent serious injury.  Moreover, 
the implementing Chilean authority failed to carry out an evaluation of all relevant factors to 
determine serious injury or the threat thereof.   
7. Articles 2.1 and 4.2(b) of the Agreement on Safeguards, inasmuch as it has not been 
demonstrated, on the basis of objective evidence, th at there exists a causal link between the alleged 
increase in imports of the products concerned and the alleged serious injury or threat of serious and 
imminent injury to the domestic industry which the competent authority believes to have been 
established, nor was an analysis made to ensure th at the injury caused by ot her factors was not being 
attributed to Argentine imports.  WT/DS351/2 
WT/DS356/2 Page 4 
 
 
  8. Articles 5.1 and 7.1 of the Agreement on Safegua rds, inasmuch as there is no record in the 
investigation of an analysis of whether the meas ures imposed were necessary to prevent or remedy 
serious injury and to facilitate adjustment.  Nor is  there any record that an adjustment plan was 
proposed. 
9. Article 6 of the Agreement on Safeguards and Article XIX:2 of the GATT 1994, inasmuch as 
the Chilean authorities imposed a provisional safegua rd without having demonstrated the existence of 
"critical circumstances, where delay would cause dama ge which it would be difficult to repair".  Nor 
did they make a "preliminary determination that th ere is clear evidence that increased imports have 
caused or are threatening to cause serious injury" to  the domestic industry producing like or directly 
competitive products. 
10. Articles 12.4 and 12.2 of the Agreement on Safe guards, since Chile failed to provide prior 
notification to the Committee on Safeguards when  it ordered the imposition of the provisional 
safeguard and failed to provide all relevant info rmation in notifying both safeguard measures, and 
moreover included erroneous data concerning their duration.   
 For the above reasons, the Argentine Republic  requests the establishment of a panel with 
standard terms of reference under Ar ticle 7.1 of the DSU in order to examine the claims made and to 
find that the measures imposed by the Republic of Chile, together with the amendments and 
extensions thereto and any related amendments, are inconsistent with its obligations under the above-
mentioned agreements, and nullify or impair benefits accruing directly to Argentina under the 
Agreements of the World Trade Organization. 
 
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