WORLD TRADE  
ORGANIZATION  G/SG/N/8/IDN/8 
G/SG/N/10/IDN/8 
G/SG/N/11/IDN/7 
12 April 2011 
 (11-1807) 
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 
 
INDONESIA 
 
(Certain Wire of Iron Non-Alloy Steel)
 
  
 The following notification, dated 10 April 2011, is being circulated at the request of the 
Delegation of Indonesia.  
_______________ 
 
 
 Pursuant to Article 12.1 (b) and (c) of  the WTO Agreement on Safeguards ("WTO 
Safeguards"), the Republic of Indonesia notifies on the findings and the imposition of a safeguard 
measure on imports of Wire of iron/non-alloy steel , not plated/coated, whether or not polished, 
containing by weight less than 0.25 per cent of car bon under HS code: 7217.10. 10.00 for a period of 
three (3) years by the issuance of Minister of Finance's Decree number: 57/PMK.011/2011
1 dated 
23 March 2011, promulgated in the Berita Negara  of the Republic of Indonesia Number 162 on the 
same date.    It is requested that this notification under Article 12.1 (b) and (c) of the WTO Agreement on 
Safeguards be brought to the notice of Members.  
A. B
ACKGROUND  
  On January 14, 2010, the Indonesian Safeguards Committee (Komite Pengamanan 
Perdagangan Indonesia/KPPI) received a request  from the Indonesian Iron And Steel Industry 
Association (IISIA) Compartment Long Product, Clus ter Kawat Paku, Paku, Mur & Baut, Wire Mesh 
on behalf of its members, that the goverment of the Republic of Indonesia must imposed a safeguard 
measure on the importation of Wire of iron/non-alloy steel, not plated/coated, whether or not polished, 
                                                     
 
1 A copy of the relevant resolution (PERATURAN MENTERI KEUANGAN NOMOR 
57/PMK.011/2011 - in Indonesian only) has been submitted electronically.  To consult this document please 
contact Ms. Budd (hilary.budd@wto.org) or Ms. McGrath (judith.mcgrath@wto.org) of the Rules Division. G/SG/N/8/IDN/8 
G/SG/N/10/IDN/8 G/SG/N/11/IDN/7 
Page 2 
  
  containing by weight less than 0.25 per cent of carbon under HS code: 7217.10.10.00. The product 
concerned produce by the applicant.  
 The request for the imposition of a safeguard m easure by the applicant (hereafter reffered as 
"the domestic industry") was based on a claim that the domestic industry has been seriously injured 
caused by increase imports of the like product.   
1. Initiation of investigation 
 
 After studying very carefully all informa tion provided by the domestic industry and its 
standing  vis-a-vis the total production of the prod uct concern, the investigating authority made a 
conclusion that there were sufficient evidence to initiate investigation.  
 
 On 5 February 2010, the investigating authorit y made a decision to initiate investigation and 
sent notifications to all known interested parties and concerned government agencies of the Republic 
of Indonesia. The Government of Indonesia also  notified members of the WTO through the WTO 
Secretariat issued the notification on the 5 February 2010 (G/SG/N/6/IDN/7).   
2. Subject good 
 
 The subject good of the investigation was wire of iron non-alloy steel, not plated or coated, whether or not polished, containing by weight less than 0.25per cent of carbon, product provided for in tariff heading number of 7217.10.10.00 of the Indonesian Nomenclature based on the Harmonized System. 
 
3. Period of investigation 
 
 Based on the data available to the investigati ng authority, the period of investigation was the 
calendar year of 2006 until the year of 2008. 
 
4. Hearing 
 
 As required by Article 3.1 WTO Agreement on Sa feguards, during the period of investigation 
all known interested parties had been given opportu nity to submit evidence and comments related to 
the investigation. In this regard, the investig ating authority held a hearing on 9 March 2010. The 
hearing was attendded by IISIA, CV. Putra Jaya, PT. Daya Cipta Andalan, and GINSI as the Importer, 
and the European Union Delegation to Indonesi a and Brunei Darussalam. At the hearing the 
investigating authority received written comments from IISIA, CV. Putra Jaya, PT. Daya Cipta Andalan, GINSI as the Importer, and the European Union Delegation to Indonesia and Brunei Darussalam.  The investigating authority has send written response to the comments from Trade 
Representation Of The Russian Federation in The Republic of Indonesia in letter ref. number: 
116/KPPI/II/2010 dated 4 February 2010; and from European Union Delegation To Indonesia and 
Brunei Darussalam in letter ref. number: 244/KPPI/III/2010 dated 3
 March 2010. 
 B. 
INFORMATION ON VOLUME OF IMPORT  
 
 During the period of investigation the trend of  volume imports the subject good revealed a 
significant increase from year to year by 119.7 per cent from 2006 to 2007, and by 95.6 per cent in 2008 compared with 2007. 
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  Table 1:  Volume of Import of the Subject Good
 
 
Description Unit 2006 2007 2008 
Imports Ton 6,695 14,706 28,773 
Source :  Statistics Indonesia  
 
C. UNFORESEEN DEVELOPMENT  
 
 During the year of 2005 until third quarter of  2008, there was accel erated activities of 
contruction industries in the area of building constr uction resulted in surge of imports volume of the 
subject good, which mainly used in this activities.  This development was not anticipated by the 
domestic industry.  
 
D. EVIDENCE OF SERIOUS INJURY CAUSED BY INCREASED IMPORTS  
1. Evidence of serious injury 
 In the effort to establish evidence on whether or not the domestic industry suffered a serious 
injury caused by increase imports, the investigating authority exam ine all data and information 
available from those provided by the domestic industry and on-site verification as well as from other 
sources.  
 
 As presented in Table 2 the investigating authority found that the domestic industry experienced negative developments in all relevant fa ctors. Due to the sensitivity and confidentiality of 
the information concerned the figures in th e Table was provided in indexed points. 
 
Table 2:  Indicators of Serious Injury
 
YEAR NO DESCRIPTION UNIT 2006** 2007** 2008*** 
1 Production Index 100  43 7 
2 Domestic Sales Index 100 48 7  
3 Productivity Index 100  55 30  
4 Production Capacity Index 100  100  61  
5 Inventory Index 100  95  50 
6 Utilization Capacity* (%) 39 16  5  
7 Profit and Loss Index  (100)  (598)  (185) 
8 Employment Index 100 77  24 
*    not an indexed points 
**  information in 2006 and 2007 covered 9 producers. 
***information in 2008 only covered 6 producers. 
 
(i) Information concerning the condition of the domestic industry in the year of 2008 
only covered 6 (six) producers due to the fact that 3 (three) of the 9 (nine) producers 
gone bankrupt in 2008. The 3 (three) producers that gone bankrupt producers were PT. Gihons, PT. Argamas Bajatama, and PT. Otto Indura Supra. The investigating G/SG/N/8/IDN/8 
G/SG/N/10/IDN/8 G/SG/N/11/IDN/7 
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  authority was not able to collect information in 2008 of the three bankrupt producers, 
consequantly information concerning the condition of the domestic industry covered 
only 6 (six) producers which remained survive. 
(ii) The production of the 9 (nine) producers significantly declined from 2006 to 2007, 
while at the same time, the domestic sal es also substantially decreased. The 
production and domestic sales of the domestic industry covering the 6 (six) producers 
in 2008 continued to decline drastically. Due to the reduction of the domestic sales, 
the productivity of the domestic indus try consequently had also decreased. 
(iii) There was a slight decrease in inventories in 2007 compared to 2006 which represents 
the 99 indexed points and continued to decline in 2008. The reduction of inventory mainly due to ability of the domestic industry to sell more than its  production in 2007.  
(iv) Because the number of machineries of the domestic industry remain the same in 2006 
and 2007, its production capacity relatively stable. However, the production capacity 
of domestic industry had decreased to 61 indexed points in 2008 because 3 (three) of 
domestic industry collapsed in that year.  
(v) The capacity utilization of the domestic industry which already low in 2006, further 
declined in 2007 and 2008 to 16 percenta ge and 5 percentage respectively. This 
condition basically caused by inability of th e domestic industry to maintain let alone 
to increase its production and domestic sales. 
(vi) The drastic decline in domestic sales and production of the domestic industry had 
resulted in substantial financial losses of th e 9 (nine) producers in 2007 and of the 
6 (six) producers in 2008, and the bankruptcy of the 3 (three) producers in 2008. In order to prevent from more serious financial losses, the domestic industry had no choice but to layoff a large number of labors in 2007, and very substantial number of 
labors in 2008 due to the collapse of 3 (three) producers. 
2. Price Analysis 
 The investigating authority considered other releva nt factor i.e. price to be analized related to 
the price of imports of the subject good. As the resu lt of the analysis, the investigating authority found 
that the selling price of the imported subject good fa r way below the cost of production and the selling 
price of the domestic industry. In the effort to rega in its market share that was taken by imports during 
the period of investigation , the domestic industry foreced to sell the subject good below the cost of 
production. However, the selling price of the domes tic industry remained higher than the price of 
imported subject good and the market share of the dom estic industry continued to decline. The selling 
price of the domestic industry was Rp. 6,068 per kilogram in 2006, while the average price of imported good was Rp. 3,066 per k ilogram. In 2007 the selling price of the domestic industry was 
Rp. 6,453 per kilogram and the average price of imported subject good was Rp. 4,539 per kilogram. 
In 2008 the selling price of the domestic industry and average price of imported subject good were 
Rp. 10,534 per kilogram and Rp. 4,974 per kilogram, respectively.   The decision of the domestic industry to sell below the cost of production contributed to a substantial financial losses. 
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  3. Effect of the increased imports 
Table 3: Volume Effect
 
YEAR NO DESCRIPTION UNIT 2006 2007 2008 
1. National Consumption Index 100 94 119 
2. Volume of Import Ton 6,695 14,706 28,773 
3. Production Index 100 43 7 
4. Market Share of the 
Domestic Industry (%) 73.5 37.9 4.6 
5. Market Share of 
Imports (%) 26.5 62.1 95.4 
 
 As indicated in Table 3, the national consumption decreased from 100 indexed points in 2006 
to 94 indexed points in 2007, and increased to 119 indexed points in 2008.  At the same period the 
volume of imports had increased substantially from 6, 695 tons in 2006 to 14,7 06 tons in 2007 and to 
28,773 tons in 2008, and the market share of imports had also increased from 28.6 per cent in 2006 to 62.1 per cent in 2007, and to 95.4 per cent in 2008.   During the same period the market share of the 
domestic industry had decreased from 2006 to 2008.  The figures proved that while the national 
consumption had increased in 2008, the market shar e of the domestic industry drop quite significantly 
and the share of imports increased drastically paralle l to the decline of the domestic industry's market 
share.  
E. 
OTHER FACTORS THAT M AY CONTRIBUTE TO INJURY  
 The investigating authority has also exam ined the following other known factors that 
may contribute to the injury of the domestic industry. Based on the following findings, the investigating authority confirmed that the follo wing other known factor were not the cause of 
injury to the domestic industry :  
1. As the 9 (nine) and other producers of the subject good are the only producers in Indonesia, 
the investigating authority found there was no f actor concerning competition with other domestic 
producers that may caused injury.  
2. According to the data collected by the investigating authority there was no export by the 
domestic industry during investigati on period. Consequently, export is not a factor to cause injury to 
the domestic industry. 
F. 
CONCLUSION OF THE FINDINGS AND CAUSAL LINK  
 As presented in point D the national consum ption was increased significantly in 2008, and 
there were substantial increased of the volume and th e market share of imports in the same year. On 
the contrary the domestic sales and the share of th e domestic industry had declined parallel to the 
increased of volume and market share of imported s ubject good. This is a clear evidence that the 
overall negative development of the domestic industry's performance during the period of 
investigation as presented in Table 2, caused by the increased volume of imports of the subject good. G/SG/N/8/IDN/8 
G/SG/N/10/IDN/8 G/SG/N/11/IDN/7 
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  In other words the increased volume of imports of  the subject good caused a serious injury to the 
domestic industry.   
G. 
DESCRIPTION OF THE SAFEGUARDS MEASURE  
1. On the basis of the findings as mentioned in point B, C, D, and F, the Government of 
Indonesia decided to imposed a safeguard measure against import of the wire of iron non-alloy steel, not plated or coated, whether or not polished, c ontaining by weight less than 0.25 per cent of carbon, 
classified in the item 7217.10.10.00. 
2. With the purpose of providing necessary time for the domestic industry to make adjustments 
and to recover from the serious injury, the proposed measure will be imposed for 3 (three) years in the 
form of specific duty as stipulated as in Ta ble 4, and will be pr ogressively liberalized: 
Table 4:  Timetable of the Safeguards Measure
 
Period Specific Duty 
23 March 2011 – 22 March 2012 Rp. 7,767/Kg 
23 March 2012 – 22 March 2013 Rp. 7,216/Kg 
23 March 2013 – 22 March 2014 Rp. 6,665/Kg 
 
3. The following list of developing countries ar e those shall be excluded from the imposition of 
the safeguard measure, as their market share were  less than 3 per cent of total volume imports or 
collectively did not exceed 9 per cent of the total volume imports of the subject good.  G/SG/N/8/IDN/8 
 G/SG/N/10/IDN/8 
 G/SG/N/11/IDN/7 
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  List of Developing Countries excluded from the measures
 
 
COUNTRY COUNTRY 
Albania Guinea 
Angola Guinea Bissau 
Antigua and Barbuda Guyana 
Argentina Haiti 
Armenia Honduras 
Bahrain, Kingdom of Hong Kong, China 
Bangladesh India 
Barbados Jamaica 
Belize Jordan 
Benin Kenya 
Bolivarian Republic of Venezuela Kingdom of Saudi Arabia 
Bolivia, Plurinational State of Korea, Rep. of 
Botswana Kuwait 
Brazil Kyrgyz Republic 
Brunei Darussalam Lesotho 
Burkina Faso Macao, China 
Burundi Madagascar 
Cambodia Malawi 
Cameroon Malaysia 
Cape Verde Maldives 
Central African Republic Mali 
Chad Mauritania 
Chile Mauritius 
Colombia Mexico 
Congo Moldova 
Costa Rica Mongolia 
Côte d'Ivoire Morocco 
Croatia Mozambique 
Cuba Myanmar 
Democratic Republic of the Congo Namibia 
Djibouti Nepal 
Dominica Nicaragua 
Dominican Republic Niger 
Ecuador Nigeria 
Egypt Oman 
El Salvador Pakistan 
Fiji Panama 
Former Yugoslav Republic  of Macedonia (FYROM) Papua New Guinea 
Gabon Paraguay 
Georgia Peru 
Ghana Philippines 
Grenada Qatar 
Guatemala Rwanda 
 G/SG/N/8/IDN/8 
G/SG/N/10/IDN/8 G/SG/N/11/IDN/7 
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  COUNTRY COUNTRY 
Saint Kitts and Nevis The Gambia 
Saint Lucia Togo 
Saint Vincent & The Grenadines Tonga 
Senegal Trinidad and Tobago 
Sierra Leone Tunisia 
Solomon Islands Uganda 
South Africa Ukraine 
Sri Lanka United Arab Emirates 
Suriname Uruguay 
Swaziland Viet Nam 
Chinese Taipei Zambia 
Tanzania Zimbabwe 
Thailand  
  
  
 
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