WORLD TRADE  
ORGANIZATION  G/SG/N/16/ECU/3 
7 April 2008 
 (08-1550) 
Committee on Safeguards Original:   Spanish 
  
 
NOTIFICATION OF THE INITIATION OF AN INVESTIGATION 
ON IMPORTS TO ECUADOR OF CERAMIC PRODUCTS 
FROM THE PEOPLE'S REPUBLIC OF CHINA 
 
 
 The following communication, dated 27 Marc h 2008, has been received from the Permanent 
Mission of Ecuador.  
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 Pursuant to Section 16 of the Protocol of Ac cession of the People's Republic of China to the 
World Trade Organization (WTO) and Article 12.1 of  the Agreement on Safeguards, Ecuador hereby 
notifies the Committee of Resolution No. 08-030, of  3 March 2008, of the Under-Secretariat for Trade 
and Investment of the Ministry of Industry a nd Competitiveness, in its capacity as investigating 
authority of the Government of Ecuador, as publishe d in Official Journal No. 297 of 18 March 2008, 
initiating an investigation concerning imports of cer amic products classified under tariff subheadings 
6907.90.00 (unglazed ceramic flags an d paving, hearth or wall tiles) and 6908.90.00 (glazed ceramic 
flags and paving, hearth or wall tiles), originati ng in and proceeding from the People's Republic of 
China, to determine whether such imports have ca used or threaten to cau se serious injury to the 
domestic industry producing like or directly competitive products. 
 
 To that end, the text of the Resolution is attached hereto. G/SG/N/16/ECU/3 
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  RESOLUTION No. 08-030 
 
Resolution initiating an investigat ion at the request of the companies 
C.A. ECUATORIANA DE CERÁMICA, CERÁMICA RIALTO S.A., 
and GRAIMAN CÍA. LTDA. on Chinese imports of smooth ceramics 
classified under NANDINA subheadings 6907.90.00 and 6908.90.00 
 
THE UNDER-SECRETARIAT FOR TRADE AND INVESTMENT OF 
THE MINISTRY OF INDUSTRY AND COMPETITIVENESS, 
IN ITS CAPACITY AS INVESTIGATING AUTHORITY, 
 
WHEREAS: 
 
Resolution No. 320 of published in Official Journal No. 105 of 16 September 2005, 
establishes a safeguard mechanism to prevent prod ucts originating in and proceeding from the 
People's Republic of China from causing or thre atening to cause market disruption for domestic 
producers of like or directly competitive products;  
In a communication to the Foreign Trade Council (COMEXI) dated 20 August 2007, the 
smooth ceramics-producing companies C.A. ECUATORIANA DE CE RÁMICA, CERÁMICA 
RIALTO S.A. and GRAIMAN CÍA. LTDA requested  the application of provisional safeguard 
measures for a period of 200 days and definitive  measures for a period of two years on smooth 
ceramic products of tariff subheadi ngs 6907.90.00 (unglazed ceramic fl ags and paving, hearth or wall 
tiles) and 6908.90.00 (glazed ceramic flags and pa ving, hearth or wall tiles), originating in and 
proceeding from the People's Republic of China, pursu ant to Section 16 of the Protocol of Accession 
of the People's Republic of China to the World Trade Organization (WTO) and Resolution No. 320 
of the Foreign Trade and Investment Council (COMEXI); 
 
In order to supplement its preliminary an alysis of the information submitted, the 
investigating authority sent communication No. 2007-175-A- SCI–MIC, dated 21 September 2007, 
asking the applicant companies to submit the foll owing additional information:  Impact of the 
imports on market prices of like or directly comp etitive products;  evidence of the representativeness 
of the companies concerned in relation to the domestic  industry, in particular the output of companies 
manufacturing the products listed in the application;  import data showing increases in absolute terms 
or relative to domestic production;  information on China's exports to Ecuador, based on statistics 
from China for comparative purposes;  financial statem ents of the applicant companies;  actual or 
potential unemployment figures;  changes in producti on and productivity levels as a result of imports 
from China;  information concerning trends in dom estic sales and inventories;  information on the 
price behaviour of domestic products;  information relating to the different variables for a specified 
period, i.e., the period 2002-2006 indicated in the application.  They were also asked to explain the rationale of the application, in particular in terms of the causal link demonstrating that increased 
imports of the products under investigation are cau sing market disruption, and that any delay in 
adopting measures would cause damage wh ich it would be difficult to repair; 
 
The applicant companies account for ap proximately 80% of domestic production; 
 
The investigating authority considers that the applicant companies constitute a major 
proportion of the domestic industry; 
 
The products imported from China are alike to and directly competitive with those produced 
by the domestic industry, are generically know n as smooth ceramics, and are classified under 
NANDINA subheadings 6907.90.00 and 6908.90.00;   G/SG/N/16/ECU/3 
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   The relevant parts of Section 16 of China' s Protocol of Accession to the World Trade 
Organization (WTO) and COMEXI Resolution No . 320 provide that WTO Members may take 
measures to prevent or remedy market disruption cau sed by significant imports of products of Chinese 
origin which are alike to or directly comp etitive with domestic products;  for that purpose 
consideration should be given to objective factors, such as the volume of imports, the impact of the 
imports on the prices of like or directly competitiv e items, and the impact of such imports on the 
domestic industry;  
Relying on data supplied by the Central Bank of Ecuador, the applicant companies submit 
that imports of ceramic products from the Pe ople's Republic of China not only underwent a 
disproportionate increase over the period 2002-2006 but also grew at a dramatically faster rate than 
imports from the rest of the world, that is, excluding China;  
The ceramics sector states that while imports f. o.b. from China rose by 4,666% between 2002 
and 2006 (from US$131,600 to US$6,272,800), those from the rest of the world (excluding China) 
increased by only 32% (from US$1,903,900 to US$2,506,8 00);  in its view, the former are therefore 
causing serious injury to domestic production;   The applicants, which accounted for approximately 80% of domestic output in 2006, argue that this points to market disruption and the ensuing threat of serious injury arising from the disproportionate increase in imports of these products from China; 
 
 According to the applicants, ceramics-produci ng companies are showing moderately dynamic 
performance, since physical output increased by no more than 15%, from 11.5 to 13.3 million m
2, in 
the period 2004-2006, owing to strong penetration of the imported product; 
 
 Relying on the figures from the Central Bank of  Ecuador, the investigating authority found 
that during the period 2002-2006 there had been an increase in imports of smooth ceramics of subheading 6907.90.00, with variations of 758%, 84% , 131%, 68% and 20% at the end of 2003, 2004, 
2005, 2006 and 2007, respectively;  imports of su bheading 6908.90.00 had followed that same trend, 
with variations of 294%, -15%, 21%, 431% and 57% at the end of 2003, 2004, 2005, 2006 and 2007, 
respectively; 
 
The application and additional information submitted by the ceramics sector and the 
preliminary assessment conducted by the investiga ting authority show there to be sufficient 
indications supporting a presumption of market di sruption and of causal link between imports of 
ceramic products and the serious injury claimed by  the applicant companies, and hence sufficient 
elements to warrant the initiation of an investigation;  and 
 
By virtue of the powers conferred upon it by Article 8 of COMEXI Resolution No. 320: 
  
HEREBY DECIDES THE FOLLOWING: 
 
Article 1 .- To initiate the investigation requested by  the smooth ceramics-producing companies C.A. 
ECUATORIANA DE CERÁMICA, CERÁMICA RIALTO S.A. and GRAIMAN CÍA. LTDA, pursuant to Section 16 of the Protocol of Accessi on of the People's Republic of China to the World 
Trade Organization (WTO) and COMEXI Resolution No. 320. 
 
Article 2 .- The products under investigation are smoot h ceramics of tariff subheadings 6907.90.00 
(unglazed ceramic flags and paving, hearth or wall tiles) and 6908.90.00 (glazed ceramic flags and paving, hearth or wall tiles), originating in a nd proceeding from the People's Republic of China. 
 G/SG/N/16/ECU/3 
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  Article 3 .-  In the course of the investigation, the in vestigating authority shall conduct a transparent 
and objective assessment of all the information and documentation submitted by the interested parties 
in order to establish whether the increased imports of  products of Chinese origin which are alike to or 
directly competitive with domestic products are cau sing or threatening to cause market disruption.  
The appropriateness of applying the requested safegua rd measure shall be determined on the basis of 
the outcome of this assessment. 
 
Article 4 .- As part of the investigation process, the i nvestigating authority shall foster consultation 
meetings between the interested parti es at which they can state their case. 
 
Article 5 .- In order to determine the role played by Chinese imports of smooth ceramics in the market 
disruption, the investigating authority establishes th e period of investigation as the period covering the 
years 2002-2007.  Article 6.-  Information submitted on a confidential basis shall be treated as such, subject to the 
approval of the investigating authority. 
 Article 7.-  In accordance with Article 18 of COMEXI R esolution No. 320, the investigating authority 
shall have a period of ten working days to submit to COMEXI the report relating to the request for 
provisional safeguard measures.  
Article 8.-  Pursuant to Article 8 of COMEXI Resoluti on No. 320, the investigating authority shall 
notify the WTO Committee on Safeguards and the interested parties of the initiation of the investigation upon publication of this Resolution in the Official Journal.  Done at Quito (Metropolitan District) on 3 March 2008. 
 
  
Genaro Baldeón H. 
Under-Secretary for Trade and Investment 
 
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