RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/M/12
19 March 1999
(99-1119)
Committee on Safeguards
MINUTES OF THE REGULAR MEETING
HELD ON 4 NOVEMBER 1998
Chairman:  Mr. Shishir Priyadarshi
1. The Committee on Safeguards (the "Committee") held a regular meeting on
4 November 1998.
2. The following agenda was adopted:
Page
A. O BSERVERS – INTERNATIONAL INTERGOVERNMENTAL ORGANIZATIONS ............ 3
B. N ATIONAL LEGISLATION ....................................................................................... 4
(i) Review of new or amended legislations not previously 
reviewed by the Comm ittee (Artic le 12.6) .................................................. 4
(a) Australia
(G/SG/N/1/AUS/2)
(b) Colombia
(G/SG/N/1/COL/2)
(c) Costa Rica
(G/SG/N/1/CRI/2)
(d) Ecuador
(G/SG/N/1/ECU/2/SUPPL. 1)
(e) Haiti
(G/SG/N/1/HTI/1)
(f) Jamaica
(G/SG/N/1/JAM/1)
(g) Panama
(G/SG/N/1/PAN/1)G/SG/M/12
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     Page
(h) Poland
(G/SG/N/1/POL/2)
(i) Qatar
(G/SG/N/1/QAT/1)
(ii) Continuing review of legislative notifications previously
reviewed by th e Committe e......................................................................... 6
Korea
(G/SG/Q1/KOR/1)
(G/SG/Q1/KOR/2)
(iii) Status of legisl ative notifi cations................................................................. 6
C. N OTIFICATIONS OF ACTIONS RELATED TO SAFEGUARD MEASURES ....................... 7
(i) Notifications of the initiation of an investigation and the
reasons for it (Art icle 12.1(a)) ..................................................................... 7
(a) Argentina – Toys (G/SG/N/6/ARG/2/Suppl. 1)
(b) Australia – Swine Meat (G/SG/N/6/AUS/1 and Suppl. 1)
(c) Egypt – Safety Matches (G/SG/N/6/EGY/1)
(d) India – Propylene Gl ycol (G/SG/N/6/IND/4)
(e) India – High density fi breboard (G/SG/N/6/IND/5)
(f) India – Styrene butadiene rubber (G/SG/N/6/IND/6)
(ii) Notifications of Application of a Provisional Safeguard Measure
(Article 12.4) ............................................................................................... 19
Egypt – Safety Matches (G/SG/N/7/EGY/1)
(iii) Notifications of a finding of serious injury or threat thereof
caused by increased imports  (Article 12.1(b)) ............................................ 20
(a) India – Acetylene Black (G/SG/N/8/IND/1)
(b) India – Carbon Black (G/SG/N/8/IND/2)
(iv) Notifications of termination of a safeguard investigation with
no safeguard meas ure imposed ................................................................... 26
India – Styrene Butadiene Rubber (G/SG/N/9/IND/1)
(v) Notifications of a decision to apply a safeguard measure
(Article 12. 1(c))........................................................................................... 28
United States – Wheat Gluten (G/SG/N/10/USA/2)G/SG/M/12
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                                                                                                           Page
(vi) Notifications regarding the non-application of a safeguard
measure to developing countries (Article 9.1 and footnote 2
to Article 9).................................................................................................. 29
United States – Wheat Gluten (G/SG/N/11/USA/2)
(vii) Notifications regarding proposed suspension of concessions
and other obl igations ................................................................................... 29
European Community – Concerning US Measure on
Wheat Gluten (G/SG/N/12/EEC/1)
D. N OTIFICATIONS CONCERNING PRE -EXISTING MEASURES ...................................... 30
Panama (G/SG/N/3/PAN)
E. P ROGRESS IN PHASING OUT MEASURES COVERED BY ARTICLES 10 AND 11.1 ...... 30
F. O THER BUSINESS .................................................................................................... 31
(i) United States – Lamb meat.......................................................................... 31
(ii) Argentina – Footwear .................................................................................. 32
(iii) Nigeria – Pre- existing m easures.................................................................. 33
(iv) Brazil – Toys ............................................................................................... 33
G. A NNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS ................................... 34
H. D ATE OF NEXT REGULAR MEETING ........................................................................ 34
A. OBSERVERS – INTERNATIONAL INTERGOVERNMENTAL ORGANIZATIONS
3. The Chairman recalled that at previous meetings, the Committee had taken note of the regular
observer status of the IMF and the World Bank, and had agreed as well to grant such status to the
UNCTAD, on the basis that there would be reciprocity with respect to proceedings, documents andother aspects of observership.  The Committee also had invited the OECD and the ACP Group, both ofwhose requests for observership were pending before the Committee, to attend this meeting on anad hoc  basis, pursuant to the Committee's decision at the last meeting.  The Chairman further recalled
that the Committee had decided at previous meetings to defer final action on the requests of the OECDand the ACP Group pending the resolution of certain horizontal issues.  Regarding the OECD'srequest, the concerns were in particular over reciprocity with respect to the WTO's observer status inthe Group of Participants.  It was the Chairman's understanding that the WTO had now been assured ofad hoc  observership in the Group of Participants, along with full access to documents, unless a
participant objected.  He further understood that, on that basis, both the Committee on Anti-DumpingPractices and the Committee on Subsidies and Countervailing Measures, at their meetings that weekand the previous week, had granted ad hoc  observer status on equivalent terms to the OECD.  In view
of this, the Chairman proposed that the Committee do likewise.  Specifically, he proposed that theCommittee decide to (a) invite the OECD to attend meetings on an ad hoc  basis, and (b) grant the
OECD full access to documents, subject to objection by a Member in particular cases.G/SG/M/12
Page 4
4. The Committee so decided.
5. The Chairman stated that he had checked on the status of the horizontal consultations
concerning the ACP Group's request for observer status, and had been informed that no progress had
been made.  In light of this, he proposed that  the Committee continue to invite the ACP Group to
attend its meetings on an ad hoc  basis, and that the Committee only revert to this decision in the
future at such time as there were new developments with respect to the ACP Group's request.
6. The Committee so decided.
B. NATIONAL LEGISLATION
7. The Chairman recalled the procedures adopted by the Committee at its May 1996 special
meeting for the continuing review of legislations, both newly submitted and those that have been
previously reviewed (G/SG/W/116).
(i) Review of new or amended legislation or regulations not previously reviewed by the
Committee (Article 12.6)
8. The Chairman noted that, as indicated in airgram WTO/AIR/926, questions regarding newly
notified legislations were to have been submitted to the Member concerned and to the Secretariat no
later than 21 October 1998.  He was pleased to report that all written questions submitted had been
received by that deadline.  Abiding by this deadline allowed the notifying Members to prepare
answers in advance of the meeting, thus improving th e quality and usefulness of the discussion at the
meeting. The Chairman hoped that Members would co ntinue to make every effort to submit their
questions on a timely basis as the process of review of legislation continued.
9. As always, Members whose legislation was su bject to review at this meeting would be
requested, in accordance with the procedures adopted by the Committee, to answer in writing all
questions submitted in writing.  The Chairman reminded Members that follow-up questions could be
asked at this meeting.  If written answers to questions asked orally at this meeting were desired, thequestions were to be submitted in writing to the Member whose legislation was concerned, and to the
Secretariat, no later than 2 December 1998.  Written answers to all questions submitted in writing
were to be submitted to the Secretariat no later than 6 January 1999.
10. The Committee proceeded to the substantive review of the legislation on the agenda.
11. The questions concerning the legislation of Australia can be found in the following
documents:
G/SG/Q1/AUS/1 submitted by Canada.
G/SG/Q1/AUS/2 submitted by the United States.
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY AUSTRALIA.
12. The questions concerning the legislation of Colombia can be found in the
following document:
G/SG/Q1/COL/1 submitted by the United States.G/SG/M/12
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Answers to these questions can be found in the following document:
G/SG/Q1/COL/2
13. The questions concerning the legislation of Costa Rica can be found in the following
document:
G/SG/Q1/CRI/1 submitted by the United States
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY COSTA RICA.
14. The questions concerning the legislation of Ecuador can be found in the following document:
G/SG/Q1/ECU/2 submitted by the United States.
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY ECUADOR.
15. No questions were submitted concerning the le gislation of Haiti.  The Committee took note of
the notification.
16. No questions were submitted concerning the legislation of Jamaica.  The Chairman noted that
the delegation of Jamaica was not represented at  the meeting.  The Committee took note of the
notification.
17. The questions concerning the legislation of Panama can be found in the following document:
G/SG/Q1/PAN/1 submitted by the United States.
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY PANAMA.
18. The questions concerning the legislation of Poland can be found in the following documents:
G/SG/Q1/POL/1 submitted by the United States.
G/SG/Q1/POL/2 submitted by Turkey.
NO WRITTEN ANSWERS HAVE YET BEEN PROVIDED BY POLAND.
19. The questions concerning the legislation of Qatar can be found in the following document:
G/SG/Q1/QAT/1 submitted by the United States.
Answers to these questions can be found in the following document:
G/SG/Q1/QAT/2 to the United States.
20. The Committee took note of the statements made.G/SG/M/12
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(ii) Continuing review of legislative notifications previously reviewed by the Committee
21. The Chairman noted that the delegation of Japan had submitted, in advance of the relevant
deadline, written questions concerning the previously-reviewed legislation of India.  These questions
can be found in G/SG/Q1/IND/8.  Therefore, India's legislation was on the agenda of the meeting for
further review.  The Chairman recalled that, in accordance with the procedures for such reviewswhich had been agreed by the Committee in May 1996 (G/SG/W/116), and as set forth in
WTO/AIR/926, India's written answers to Japan's questions should have been received by
21 October 1998.  Unfortunately, India's answers were received after that date.  These answers are
available in G/SG/Q1/IND/9.  The Chairman reminded all Members of the importance of abiding by
the relevant deadlines for these continuing legislative reviews.  The purpose of the written exchange
of questions and answers in advance of the meeting was to allow the discussion at the meeting to
focus on follow-up questions, so that the time at the meeting could be used as productively aspossible.  Because Members had not yet had a chance to study the answers provided by India, the
Chairman asked the delegation of India to present these answers orally.
22. The Chairman thanked the Members whose legisl ations were discussed for their answers, and
the Members who undertook to put questions.  As usual, the exercise had been positive, and of benefit
to the Committee.
23. The Chairman also reminded Members that, to place any previously-reviewed legislative
notification on the agenda for the Committee's next regular meeting, written questions about such
legislation had to be transmitted to the Member in question as well as to the Secretariat no later than
six weeks before the meeting, or by 12 March 1999.  Written answers to such questions had to be
provided to the Member posing the questions and to the Secretariat no later than two weeks before the
meeting, or by 9 April 1999 .  The Chairman reminded the Committee of the importance of
providing written answers to written questions posed.  As Members were aware, the exchange ofwritten questions and answers constituted the Committee's only record of the review of legislations.Thus, the Committee's records were left incomplete when questions were not answered, or onlyanswered long after the meeting where the review took place.  He noted that Côte d'Ivoire had notyet provided written answers to questions concerning its legislative notification which was reviewedat a previous meeting, and urged the delegation of Côte d'Ivoire to provide these answers as soon aspossible.  He further urged all Members who received written questions in connection with thismeeting to provide their answers by the deadline.
24. The Committee took note of the statements made.
(iii) Status of legislative notifications
25. The Chairman reported on the status of legislative notifications received from Members,
noting that many Members still had not made the required notification regarding legislation.  In
particular, notifications had not been received from the following 37 Members:  Angola, Antigua &Barbuda, Bangladesh, Barbados, Belize, Burkina Faso, Burundi, Cameroon, Central African Republic,Chad, Congo, Democratic Republic of the Congo, Djibouti, Dominica, Gabon, the Gambia, Grenada,Guinea Bissau, Guyana, Kuwait, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mozambique,Namibia, Niger, Papua New Guinea, Rwanda, Saint Kitts & Nevis, Saint Vincent & Grenadines,Sierra Leone, Solomon Islands, Swaziland, Tanzania, and Togo.  The Chairman noted that thissituation continued to create a very unfortunate gap in transparency with respect to legislativenotifications.  He therefore once again urged all Members who had not yet done so to make therequired notification.  In the case where no legislation existed it was a very simple “nil” notification,which could be made in a single sentence.  He noted that Members who provided such writtenG/SG/M/12
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statements to the Secretariat before the end of the day would not be identified in the Committee's
annual report as not having notified.
26. The Committee took note of the statements made.
C. NOTIFICATIONS OF ACTIONS RELATED TO SAFEGUARD MEASURES
(i) Notifications of initiation of an investigation and the reasons for it (Article 12.1(a))
(a) Argentina – Toys (G/SG/N/6/ARG/2/Suppl.1)
27. The Committee reviewed Argentina's supplemen tal notification regarding its investigation
concerning toys.  This notification can be found in document G/SG/N/6/A RG/2/Suppl.1.  Questions
posed by the United States regarding the original notification at the previous meeting of the
Committee were circulated in document G/SG/Q2/ ARG/3, and written answers to these questions in
document G/SG/Q2/ARG/4.
28. The delegate of Argentina understood that, in submitting the written answers to the questions
posed by the United States at the previous meeting, his delegation had covered the concerns indicated
by delegations at the last meeting of the Committee.
29. The representative of the United States thanked the delegate of Argentina for providing the
answers to their questions.  They had only recently received these and would relate them back to
Washington.  The advance copy had been in Spanish, so he was uncertain whether they had been able
to get to work on them any earlier.  As English copies were now available, there could be some
follow-up questions after Washington had had a chan ce to review them.  There were indications that
the investigating authority in Argentina had made so me sort of preliminary determinations or final
determinations in this action and he requested a status report from the delegate of Argentina as towhere the investigation stood.
30. The delegate of Malaysia thanked Argentina for having extended to Malaysia a copy of the
responses to the United States' questions.  Unfortunately, this had been in Spanish.  As an English
version was now available, it would be sent back to capital for deliberations.  Like the United States
delegation, the delegate of Malaysia also noted that he would be grateful to receive a status report ofthe investigations to date.
31. The delegate of the European Community voiced interest in having more information about
the status of the investigation.  His delegation had been informed that the case was about to be closed
and, if this was the case, it would be helpful to have information so that his delegation could dedicate
its time to other, more pressing, issues.
32. The delegate of Argentina noted that identical questions always made it possible to give
identical, or at least similar, replies.  First of all, his delegation continued to work in Spanish, which
was one of the official languages in this institution.  They would continue in this practice.  His
delegation was certain that, at least in the case of the United States, there were sufficiently trained
people to translate the replies.  In any case, the Secretariat had already circulated an English version
of their replies which would make it possible for Washington and the other capitals to take a more
detailed look at their replies.  This was the point to be made regarding the questions put to Argentina
at the previous meeting of the Committee.  He also now had the feeling that some delegations had
more up-to-date information about what was happening in his capital than he did himself.  In any
case, he indicated that the National Commission for Foreign Trade -- which was the body responsible
for evaluation of injury pursuant to the legislation notified to, and reviewed by, this Committee – had
reached the conclusion that, on the basis of the available information, it was not possible to reach aG/SG/M/12
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determination of the existence of, or threat of, serious injury to the industry in this particular case.
These conclusions could be found in the Minutes of the Commission.  Following regulatory practice
in Argentina, these conclusions were handed to the implementing body, which was the Secretariat for
Industry and Mining.  This was all the information that could be provided on the state of play, and he
considered he had answered the question from the United States, Malaysia and the European
Community.
33. The Committee took note of the statements made.
(b) Australia – Swine Meat (G/SG/N/6/AUS/1 and Suppl.1)
34. The Chairman noted that Australia had submitted two notifications concerning its initiation of
investigation on swine meat.  These notifications are contained in documents G/SG/N/6/AUS/1 and
Suppl.1.
35. The delegate of Australia asserted that the notification was straightforward and was made
after the decision and the announcement of initiation.  The Productivity Commission was asked to
report within 140 days.  It was expected to report by 13 November 1998.  He pointed out that there
were, in fact, two inquiries within the one reference.   The safeguard reference in respect of imports of
frozen boneless pork was in two parts, asking for a finding by the Commission as to whether
safeguard measures would be justified and, if so, what measures would be necessary to remedy
serious injury and to facilitate adjustment.  There was, in the one reference, the one notice, a request
reference for inquiry and report within the same tim e-period on a somewhat wider issue.  This was the
question of the factors affecting profitability and competitiveness of the domestic pig-farming and
pig-making process industries, specifically examin ing the extent to which each factor influenced
industry and profitability and competitiveness.  As one could read from the attachment, that was not
there for the purpose of the finding with regard to the issue whether safeguard measures would bejustified under the WTO, but it was considered that it was appropriate to ask for a more general report
on the state of the industry, from the Productivity Co mmission.  Therefore, both these aspects were to
be reported on by the Commission by 13 November.  The Committee would be kept informed as to
developments with respect to that aspect of the reference that concerned the issue of WTO safeguards.
36. The delegate of Canada stated that, as the delegate of Australia was aware, the Canadian
Government and the Canadian pork exporters were participating in the Australian investigation on
pigmeat as interested parties.  This participation had been conducted at great expense and was
unnecessarily creating market uncertainties for Canadian exporters.  Canadian producers and
processors fully understood the difficulties that their Australian counterparts faced in the marketplace.
However, there was a strong contention that Canada was not the cause of those difficulties.  This wasa view sustained by public statements by Australian officials.  For example, on 11 June 1998,
Australia's Minister for Primary Industries and Energy stated that there were "domestic factors
influencing the Australian pork industry's fortunes more than imports".  This suggested the absence of
a prima facie  case for safeguard action.  Canada was also concerned about the environment in which
the safeguard inquiry was being conducted.  Australia acknowledged that a safeguard investigation
had to be conducted in an open manner in accordance with WTO rules.  The Government of Canada
would closely examine the report of the investigating authority which was to be submitted by13 November 1998 to the Government of Australia, as well as any subsequent action that might result
from this report.  The Government of Canada would actively pursue all options available to it to
defend the legitimate export interests of its pigmeat exporters.
37. The delegate of Colombia indicated that Colombia  had no trading interest in this investigation
and thus her questions were due to an interest in knowing how the procedure worked in Australia.
Her delegation had two questions.  One concerned the fact that the notification indicated that the
investigation was initiated ex officio  by the government in the light of the complaints by the relevantG/SG/M/12
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sector.  What shape did such complaints take and what was the relationship between these complaints
and an official application by the industry?  Secondly, concerning the institutional framework, who
made up the Productivity Commission?  Regarding import trends, she wondered whether the
delegation of Australia had any information as to the share of imports in domestic consumption of the
product because, looking at absolute values, it was not easy to see the degree of market penetration.
38. The delegate of Australia stated that the initiation was ex officio  and that provided an
opportunity for the industry to make a case.  The government, whilst making an ex officio  initiation,
did not submit evidence to the Productivity Commission.  Evidence before the Commission was
submitted by industry, by other interests and, as mentioned by the delegate of Canada, there were two
submissions each from the Government of Cana da and the Canadian meat exporting industry.
Because Australia did not have the system of formal petition as one had in, say, anti-dumping, or in a
number of other jurisdictions for safeguards, there was no such relationship.  The industry had made
its case to government in a number of ways and that led to the initiation of the inquiry, whichprovided the opportunity for the industry to make a case.  If the industry was able to make a case, then
presumably there would be an affirmative finding by the Productivity Commission.  If it could not,
particularly in the light of the substantial submissions that had been made by both the Government of
Canada and the Canadian industry, then one woul d expect that the Commission would turn in a
negative finding.
39. In terms of who "made up" the Productivity Commission, the delegate of Australia was not
quite sure what was meant by the question.  Australia had long had an organization that looked at
industry assistance matters, and this had gone through a number of name changes.  Most recently, in
April 1998, the Productivity Commission was forme d, which incorporated the previous industry
commission, and a couple of other economic organiza tions.  This was an organization that provided
economic advice to government on a wide range of issues.  It also provided advice on competition and
various other  issues.  It was not the prime competition authority, but filled a number of roles in
respect of deregulation and the micro-economic aspects of the economy.  It had been quite common
for the predecessor of the Commission -- and indeed that was required under the Act depending on the
year – for there to be a reference to the Commission in order to give advice and recommendations.The government was not required to follow those recommendations, but it had been a central part of
the economic transparency that Australia had by way of public debate on such issues.  Therefore, the
Productivity Commission was well-suited for carrying out investigations regarding injury and the
factors that might be causing, or threatening, injury to a domestic industry.  The Commissioner in
charge of this particular inquiry was an economics professor from a Melbourne University onsecondment to the Commission.
40. Regarding the share of imports in domestic consumption, the delegate of Australia pointed
out that it really depended on what one was talk ing about.  One of the lines of argument by the
industry was that the nature of the product that was coming in was very much weighted towards the
production of ham, which was a highly profitable sector of the industry.  The imported ham product
could have been up to a quarter of the Australian production of ham, and this could upset the balance
of returns.  That was quite a substantial penetration.  When considering penetration, it really dependedon what one took as the denominator.  What was co ming in were frozen boneless products that had to
be cooked on entry.  Therefore, you were looking at competition in a particular sector of the domestic
market and the impact that this had.
41. The delegate of Colombia thanked the delegate of Australia for his very complete replies
which showed that he was very familiar with the issue and that he had been following developments
in this investigation. She wanted to clarify whethe r, regarding the make-up or the membership of the
Productivity Commission, it was basically a governmental entity.G/SG/M/12
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42. The delegate of Australia responded that the Productivity Commission was certainly a
governmental entity.  It was a statutory body established under the Productivity Commission Act,
which Australia had attached to its procedural notification.  The Chairman and the Commissioners (of
which there were a number) were normally full-time employees.  There was provision for part-time
associate Commissioners, or for Commissioners havi ng a mix of work, but they were governmental
employees in the sense of being employed by the Productivity Commission.  They were all highlyqualified individuals.  The Act specified that there had to be a certain range of expertise bearing from
experience on environmental issues and so on.  It had a wide make-up.  Apart from people being
allowed to have some part-time work outside the Commission, it did happen from time to time that
inquiries did have a Commissioner or Associate Commissioner put on them who had experience in the
industry.  Of course, they were not private individuals when they were Commissioners.  They were
working for the government.
43. The Committee took note of the statements made.
(c) Egypt – Safety Matches (G/SG/N/6/EGY/1)
44. The Chairman noted that Egypt's notification of initiation of an investigation on safety
matches in boxes was contained in document G/ SG/N/6/EGY/1.  The United States had submitted
written questions regarding this notification, wh ich are contained in document G/SG/Q2/EGY/1.
Egypt had recently submitted written answers, which can be found in document G/SG//Q2/EGY/2.
45. The delegate of Egypt stated that the investigation was initiated on 5 August 1998.  It covered
safety matches in boxes.  The reasons for the initiation were described in the relevant documents.  As
both the questions from the United States and Egypt' s answers to these questions were in the hands of
the delegates, there seemed little use in reading them again.  He was open for any questions from any
delegation.
46. The Chairman requested that the delegate of Egypt briefly go through the questions, for the
benefit of Members who had just received the writ ten answers, or had not yet had an opportunity to
see them.
47. The delegate of Egypt stated that the Government of Egypt had informed the Committee of its
safeguards legislation and regulations, as required under Article 12.6.  With respect to the official date
and situation of this notification, Egypt had notified the WTO that it accepted the Uruguay Round
Agreements, including the Agreement on Safeguards, and that, starting from the date of that
acceptance, the Agreement on Safeguards would co me into effect.  Egypt was acting accordingly.
The safeguards legislation had been issued on 5 June 1998, and the delegate believed that a translated
copy in English had already been provided to WTO.  It was hoped that the regulations would beprovided within a few days, and that this could be viewed by the Members of the Committee by the
next meeting.  With respect to the process lead ing to the preliminary determination, the delegate
stated that the preliminary determination was based upon import data available to the authority and to
the Committee.  Serious injury to the local industry was established on the basis of information and
the performance of the industry taken from the accounts and records of the companies.  This
information was reviewed by the Advisory Committee, which made recommendations to the Minister
of Trade and Supply.  The inquiry had been self-initiated by the Government of Egypt.  Thecompetent authority was the International Trade Policy Department and Foreign Trade Sector, which
was part of the Ministry of Trade and Supply, and the decision to impose provisional measures was
decided by the process already referred to.  With respect to the question whether Egypt had made an
assessment based on the condition of the industry as a whole producing the like or directly
competitive product, and if so how, the delegate responded that the assessment was taken from therecords and accounts of the Egyptian producers.  These producers accounted for 97 per cent of the
total production in Egypt.  The total production fi gure for Egypt was confidential information.  AsG/SG/M/12
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only two companies were involved in the inquiry, release of this information would give valuable
commercial information to a competitor.  With respect to the question whether the Government of
Egypt had established and made public its laws and procedures, in consonance with Article X of
GATT 1994, the delegate referred to information already given, as well as stating that the adoption of
law in Egypt required that this be done by public notice and that, as notified to the WTO, the public
notices had been published on 30 June 1995.  In response to the question whether Egypt intended toinitiate consultations immediately, the delegate stated that immediately upon initiation, the principal
suppliers had been advised and invited to consult with the Egyptian authorities.  The principal
suppliers were from Turkey, Sweden, Pakistan, India and Malaysia.  At the same time, all of these
Members were advised and invited to consult.  Consultations had been held with some of these
Members, and Egypt hoped these would continue.
48. The delegate of the United States thanked the delegate of Egypt for providing written answers
to their rather extensive list of questions.  The questions applied not only to the initiation of the
safeguard investigation but also to the application of provisional safeguard measures by the
Government of Egypt.  The responses would be relayed back to Washington.  However, it appeared
that there were still some gaps in terms of the responsiveness to particular questions.  For example, he
noted that the notification that had been made to Committee -- at least the only one that was listed in
the draft annual report -- was G/SG/N/1/EGY/1, dated 27 March 1995.  According to the reply given
by Egypt, safeguard legislation had been enacted as law on 30 June 1995.  The question related to the
notification to the Committee regarding the safeguard legislation.  Since the previous notification had
said that there were no laws or regulations relevant to the Agreement on Safeguards, he was curious
why there apparently had been no notification of the 30 June 1995 legislation.  He noted that the
written responses by Egypt said that a copy of the law of 11 June 1998 had been provided, and wouldbe provided as soon as translated to the WTO Secretariat and to the United States.  He questioned
whether that law was different from the 30 June la w, whether there would be a formal notification of
that law, and how that law applied to the safeguards investigation that was initiated prior to 11 June.
There were also questions relating to where and when the items were published in the Official Gazette
with respect to the Egyptian safeguard legislation.  That legal citation would be greatly appreciated.Lastly, with respect to the question relating to ap parent consumption, it was very difficult to assess
causation without having some sort of information relating to apparent consumption.  The
United States could understand some of the considerations relating to confidentiality.  However, for
such a major item as total apparent consumption, it seemed almost impossible to make any kind of
evaluation in this determination,  particularly given that only 187,000 cartons of safety matches wereimported into Egypt in 1997.  His delegation would appreciate a fuller response to some of these
questions.
49. The delegate of Japan indicated his delegation's interest in this issue and stated that they
would study the answer provided to the question of the United States.  His delegation wished to
reserve the right to pose some questions to the Egyptians.
50. The delegate of the European Community wished  to address somewhat similar issues as those
already addressed by the delegate of the United States.  His delegation had read with interest the
replies given by Egypt to some of the questions.  He asked the delegate of Egypt to clarify further
what the trigger or origin of this proceeding ha d been.  According to their information, the Egyptian
authorities had apparently received an anti-dumpi ng complaint and not a safeguard complaint, and
they were interested to hear how this was handled, whether the anti-dumping complaint was regarded
as a safeguard complaint, or whether the data was used and what was the sort of industry behind thiscomplaint.  They had now read that the initiation of this proceeding was done ex officio .  While that
went some way towards answering the question, even for an ex officio  initiation, one expected some
type of record, some basis on which a decision was made that the initiation of an investigation was
necessary.  At the same time there was a decision to impose provisional measures – his delegation
would address this later, but it reinforced the need for some sort of reliable record.  By record, heG/SG/M/12
Page 12
meant a record which could be inspected by the interested parties and that was necessary in order to
ensure the rights of defence in these proceedings.  Countries and industries had to be in a position to
evaluate the basis on which the proceedings had been initiated and, for the time being, that was still
rather difficult.  In general, although they now knew it was an ex officio  initiation, there should be no
misunderstanding about the possibility of some sort of exchangeability between trade instruments.  A
petition or a complaint with regard to dumping would contain completely different information than apetition for a safeguard measure.  That was certainly the case in regard to the injury and the dimension
of the injury.  A dumping complaint was selective, so it might only deal with imports from one or
several sources.  This appeared a little unclear in this case, and his delegation would welcome
clarification on these issues. From the viewpoint of the European Community and its Member States,
there was some data made available on the individual import shares, not only in percentage terms but
also in absolute terms, so that it was possible for the interested countries to evaluate trading interests
in this case.  There was still some uncertainty a bout the legal basis of the Egyptian safeguard action
and his delegation would have in the future a possibility to follow up on this.  His delegation would
return to some of these issues in the context of the provisional measures.
51. The delegate of India believed that there was a lacuna in the information on the national
legislation in the replies presented by Egypt.  Her delegation desired more clarity regarding the law
that was enacted on 30 June 1995 and the further law that was enacted on 11 June and details of thechanges or the purpose of this amendment.  Secondly , they would be transmitting these replies to the
capital and took this opportunity to raise their concer ns about the investigation at this stage, to which
they hoped to revert later.
52. The delegate of Malaysia expressed his delegation's concern and reserved their right to come
back to this at a later date, perhaps in the form of written questions.  He sought clarification from the
Egyptian delegation as to the imposition of the provisional safeguard measure, a duty of 46 per cent
c.i.f..  This was stated in their notification G/SG/N/7/EGY/1, dated 11 August.  In paragraph 6 of that
same notification, it said that an exact date could not be supplied but would be shortly.  He queried
whether this date had already been determined and, if not, whether there was any indication of when it
would be.
53. The Chairman observed that at least a part of this query could be taken up by Egypt either
now or in the discussion on the notification on the provisional measures. He left it to Egypt to
respond.
54. The representative of Egypt appreciated the interest in the notification, especially from the
United States.  As explained at the outset, starting from 1995, the Agreement on Safeguards became
part of Egypt's legislation, so from the time of acceptance of the Agreement to the time of issuing the
domestic legislation, they were acting according to the Agreement.  Nothing in the Agreement
prevented them from acting in this way.  As already mentioned, the domestic legislation was issued
about three months prior to the meeting, and was translated into one of the WTO languages and
submitted to the WTO either the day of this meeting or the previous day.  It would, of course, be a
subject for discussion by the Committee.  Concerning the list of questions raised by the United States,
the European Community and Malaysia, all of them would be considered and a written update wouldbe appreciated to allow Egypt to give a clear written answer.  For the time being, for the sake of
transparency, his colleague would give some explanation.
55. With respect to the comments on the confidential information concerning the products in
Egypt, as already stated, the total production figu re for Egypt was confidential given that the two
companies that produced the product concerned were involved in the inquiry, and that they produced97 per cent of the product concerned.  Disclosure of such information would be detrimental for the
competitive situation of those companies.  The Egyptian companies had been asked to provide this
information, but had refused.  With respect to the comments by the delegates of the EuropeanG/SG/M/12
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Community, Japan, Malaysia and India, the situation could be summarized as follows: the Ministry of
Trade and Supply had imposed provisional safeguard measures on, he believed, 1 August 1998.  The
European Community had complained that Egypt could not initiate a safeguards inquiry when the
industry application concerned dumping.  The go vernments and the European Community had been
informed that a fully-documented dumping application had been received according to Article 5.5 of
the Anti-Dumping Agreement.  They had been informed  that the enquiry was also self-initiated by the
Egyptian Government.  Concerning the anti-dumping complaint, the Advisory Committee found that
there was no dumping within the meaning of the Anti-Dumping Agreement and there was serious
injury affecting the domestic industry.  So, th e Egyptian government informed the government
concerned that they withdrew th e dumping complaint as there was no dumping found and there was a
serious injury affecting the domestic industry.  There was no need to initiate an anti-dumping
investigation, as there was no dumping.  The required notifications --Article 12.1(a) on initiation and
Article 12.1(c) on applying safeguard measures -- were sent to the Committee.  The notification underArticle 12.1 should provide details on the duration of the measure and timetable of progressive
liberalization.  As this measure was only provisional, these details awaited the imposition of final
measures, if any.  The rate of the provisional measures was established on the basis of the critical
circumstances and the serious injury found at that point in the process in the inquiry.  The rate of the
measures imposed was calculated on the amount needed to prevent and remedy the serious injurydemonstrated in the figures of the industry.  A hearing was held in Cairo on 1 October to enable all
interested parties to present views and evidence.  Following this hearing, parties undertook to supply
further evidence and views within 15 days.  Follow ing the imposition of provisional measures, the
authority had 200 days from 5 August 1998 to complete the inquiry.  He had no further information,
but would appreciate receiving all comments in writing in order to provide a more precise
explanation.
56. The delegate of the European Community asserted it was certainly now possible to
understand better the proceedings.  However, if he understood it correctly, there had been an anti-
dumping complaint, the anti-dumping complaint had been checked without opening an investigation
and then it had been found that there was no dumping, but that, instead of the material injury that wasprobably alleged in this complaint, there was serious injury.  On that basis, the anti-dumping case was
refused, and the safeguard case was initiated ex officio  and, at the same time, provisional measures
were imposed.  He questioned the investigation and procedures involved.  It remained unclear on what
basis the finding was made, because normally one would not expect that an anti-dumping complaint
would contain evidence on serious injury.  Had the Egyptian authorities carried out a pre-investigationinvestigation in order to obtain this data?  In addition, the finding of serious injury would not be
enough.  There should also be an element of the volume of imports and then, naturally, a causal link
should be established between these imports and the serious injury.  In this context, the right of
defence of the interested parties, governments and industries, should be kept in perspective.  Apparent
consumption in relation to imports was a vital elem ent in order for any party to a proceeding to be
able to judge whether the action was justified or not.  To what would you relate your imports if you
did not know what the relative figure, or the absolu te figure, was?  During investigations on dumping,
countervailing and safeguards, authorities had the experience that some information was sensitive, but
this had to be balanced against the rights of defence.  There might be an argument not to disclose
individual shares of domestic production, but the domestic production as such and the apparent
consumption were figures which were simply neede d.  His delegation would continue to look at this
and would, if necessary, ask questions in writing so that they could have written answers in the next
meeting.
57. The delegate of Egypt believed that he had already partially responded to the concerns
expressed by the delegate of the European Community, but stated that he would appreciate receiving
any questions in writing so that they could give specific answers.  His delegation remained open to a
consultation between the European Community and the competent authority which was conductingthe investigation.G/SG/M/12
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58. The Chairman observed that delegations that wished to raise any further questions could do so
in writing and that Egypt had given assurances that it would respond to any such questions in writing.
59. The Committee took note of the statements made.
 (d) India – Propylene Gl ycol (G/SG/N/6/IND/4)
60. The Chairman turned to India's notification of initiation concerning propylene glycol
contained in document G/SG/N/6/IND/4.
61. The delegate of India believed that the notification in question was fairly detailed.  The
application for investigation had been filed by the producers that accounted for the total domestic
production of propylene glycol and details regarding the import penetration and other indicators had
already been provided in this notification.  Sh e looked forward to any questions from Members.
62. The delegate of the European Community had two remarks.  First, the document informing
the Committee of the opening of the investigation was dated 6 May 1998 and the initiation had taken
place on 26 February.  These dates were more than two months apart.  Article 12.1 stipulated that thisinformation should come immediately after the init iation.  This was not just empty language because
the notification of an initiation often could be the basis for other Members to start looking at the
procedures, perhaps decide to take part in the procedures and to prepare arguments.  If this came so
late, then a good part of the procedure may already have been completed before Members could, on
the basis of this notification, make a decision whether they wanted to participate.  Second, and thiswas a general remark relating to more than this case, his delegation had found that there were no
specific shares of imports from countries in the information provided with the initiation.  Just a
country name was mentioned and the overall share of imports.  His delegation asked the Indian
authorities whether they could cooperate with them to provide individual country-based data and
perhaps verify the data on a case-by-case bilateral basis, because there had been, in some of the casesopened by India, some inconsistencies between the data mentioned in the opening notices and their
available statistical data for EC Member States.
63. The delegate of Hong Kong, China wished to make a comment not dissimilar from the one
just made by the delegate of the European Commun ity.  According to their own trade statistics, they
had no domestic exports or re-exports of propylene glyc ol under the relevant headings to India for the
period from 1994 to 1997.  In fact, Hong Kong, China had no domestic exports of products in the
entire Chapter 29 (organic chemicals) to India during the period in question.  They had written to the
Indian consulate-general in Hong Kong on 10 August explaining that they had no exports of
propylene glycol to India and wondered whether they should be named as one of the sources of
increased imports causing serious injury to domestic producers of the product in India.  As they hadrequested in their letter, it would be appreciated if India could provide them with the relevant statistics
on imports of propylene glycol from Hong Kong, Ch ina to facilitate any necessary follow-up action.
64. The delegate of Singapore wished to join the delegate of the European Community in
expressing concern about India's procedural obligat ions under the Agreement.  He had received that
morning a copy of the final findings of the Direct or-General of the Indian Safeguard Authority in
respect of propylene glycol.  It seemed that these final findings had actually been issued on
14 September 1998.  This was nearly two months ago and it had not actually been notified to thisCommittee.  They had passed beyond the stage of notification of initiation and investigation to
something that required a look at final findings.  He wished to bring this to the attention of the
Committee.
65. The delegate of Mexico associated his delegation with the comments made by the delegates
of the European Community, Hong Kong, China and Singapore.  They had three questions concerningG/SG/M/12
Page 15
the initiation of this investigation, which was now a final determination as of 14 September - a
precedent in this Committee.  The first question was:  Taking into account that Mexico represented
0.64 per cent of the total imports of propylene glycol into India according to data from the final
resolution of the investigation and that Mexico was the only developing country which individually
does not exceed a 3 per cent level, what would be the legal basis invoked by the authority not to
exclude Mexico from the application of the measure?  The second question was:  What was the legal
basis invoked by the investigating authority not to give adequate opportunity for prior consultations
before applying the measure to Members having a substantial interest as exporters, and specificallyMexico?  The third question was:  On what facts or evidence did the Indian authority base its
determination that imports from Mexico threatened to cause injury to its domestic industry, if Mexico
had not exported any propylene glycol to India in the last five years?  Mexico could check this with
Mexico's domestic industry – they sent out a questi onnaire to all the industries/companies exporting
this product and more than 97 per cent of them answered that they had not exported at all in the pastfive years to India.  The other remaining 3 per cent had exported to other countries, so Mexico was
somewhat surprised at the results. If India had data on Mexican imports of this product into India over
the past 5-year period, they would be very gratef ul for such information.  His delegation would be
submitting these questions in writing.
66. The delegate of the United States shared the concerns expressed by the European Community
with respect to the late notifica tion of the initiation of the safeguards investigation, given that the
investigation had been initiated on 26 February 1998 and had not been notified to the Secretariat until
6 May 1998.  His delegation desired an explanation as to why this notification was not provided
immediately, as required by Article 12 of the Agreement on Safeguards.  He also requested
confirmation by the delegate of India as to the allegations just made about the determination havingalready been made as early as September 1998.  No notification had been made.  If this were the case,
his delegation would be deeply concerned about the lateness of that notification.  The United States
had not been listed in the notification of the initiation of investigation as one of the principal
suppliers, however, given some of the comments just made by Hong Kong, China and Mexico, he was
concerned that perhaps the United States was the principal supplier of this product.  He requested thatIndia advise whether or not the United States was the principal supplier of this product.  While this
question might have been overtaken by events, he was to request an update on the status of the
safeguards investigation that was undertaken by the Indian safeguard authority.  Had hearings been
conducted, and if not, when would they be held?  When did the Indian authority expect to conclude its
investigation and make a determination on whether or not serious injury or threat of serious injurywas being caused by increased imports?  Accord ing to the notification and initiation of the
investigation, the domestic producers requested the immediate imposition of a provisional safeguard
duty.  Had this provisional duty been applied?  Could the delegate of India describe the basis for the
prima facie  determination that increased the imports causing serious injury or threat of serious injury
to the domestic industry in light of the information provided in the notification, which indicated that
neither domestic production nor capacity utilization had decreased during the investigatory period?
His delegation asked that India supplement the information provided in paragraph 4 of theirnotification by providing the value of imports and the value of domestic production for each of the
periods, and noted that only information in terms of metric tonnes is provided.  His delegation also
asked that India provide data for apparent consumption, both in value and quantity, for each of the
periods, as well as the applied and bound tariff rates for the products concerned.  In addition, he
requested a description of any import restrictions, such as the VABAL , that were applied to the
products concerned or were applied at any time during the applicable investigatory period.
67. The delegate of Japan did not wish to repeat all the concerns voiced by the United States and
the European Community and other delegations, but wished to indicate Japan's concern on this issue.
His delegation was interested in all the information the Indian delegation would be able to supply
concerning all the questions raised at this meeting.G/SG/M/12
Page 16
68. The delegate of India wished to address some of the questions that had been raised in
common.  First, with respect to the lateness of the initiation of investigation notification, the delegate
recalled that the Committee had discussed this issue at its last meeting, when some Members had
raised a similar concern.  India had stated that Article 12 of the Agreement stipulates that a Member
shall immediately notify to the Committee upon initiati ng an investigatory process.  Though India had
noted that the term "immediately" had not been elaborated upon, and that, if they were to take theaccepted use of the term - not just in the context of  the Safeguards Agreement but also in the context
of other Agreements where the term "immediately" had been used - it was clear that it implied
notification by concerned Members as early as possible.  India believed that it was in compliance with
its obligations under this section of the Safeguar ds Agreement, inasmuch as it had informed this
Committee at the last meeting that it was intendin g to notify the initiation of investigation on this
matter of propylene glycol.  This kind of time taken by Members would also be borne out by a cross-
country comparison of safeguard measures notified by other Members to the Committee.  India hadvery clearly followed the procedures that were laid down in the Agreement.  Second, the delegate
wished to touch on some requests for information by the European Community, and also on the
United States' request for data.  As mentioned in her opening remarks on this topic, the notification
was fairly detailed and was based on the work of a quasi-judicial body.  She was unsure about
commenting on the adequacy of the information that had been provided regarding whether a prima
facie  case was established or not.  She was not sure that the specific requirements that had been listed
by the Members -- that it should be on a bilateral country-specific basis or imports have to be
provided, the VABAL system, bound tariffs, etc -- were mandated.  However, the notifications would
show all aspects that had been considered and the investigation process would be conducted based on
the totality of the aspects considered.
69. In respect of the query of Hong Kong, China and Mexico that there were no exports, the
delegate of India wished to point to one aspect that was mentioned in the notification itself:  there
were actually two grades which were similar in their composition and characteristics and there was a
pharmaceutical-grade product which would, she believed, fall in Chapter 29.  Thus, she could
understand when Hong Kong, China said there were no exports from Hong Kong, China in thatchapter, but India had noted that a new grade, called a "food and flavour grade", had been created by
the domestic producers in India, which was exactly the same as the industrial product  grade, but was
not akin to the drug.  It might be a question of slight clarification on that aspect.  She would flag the
concerns of Hong Kong, China and Mexico to the capital, as well as that of the United States -- they
may indeed have been a principal supplier but were not listed – to see if this classification problemwas the matter that needed to be looked at.  As for the information provided by Singapore that this
matter may have already had a final determination, she requested the indulgence of the Committee to
discuss the issues that had been raised regarding the final determination after India made its
notification on that determination, which it would do immediately, and as soon as it was possible for
them to do so.
70. The delegate of the United States appreciated the detailed answers supplied by the delegate of
India to several questions, and the comment that the export interest from Mexico and Hong Kong,
China may be explained by their export of a pharmaceutical grade of product.  However, looking at
the notification of initiation of the investigation, the only products that were subject to this
investigation were those that were identified and under Chapter 29.  The delegate requested
clarification that it was purely the industrial product, not the pharmaceutical product, which was the
subject of the investigation.  And, if the pharmaceutical product had been involved in theinvestigation, did India intend to file a new notification of initiation of investigation or to amend this
one?  The United States also requested confirmation on the status of the investigation, specifically,
whether hearings had been held and determinations made.
71. The delegate of the European Community stated that, with respect to the time delay between
the formal decision to either initiate or make a final determination and the notification, the termG/SG/M/12
Page 17
"immediately" may not be a 100 per cent clear.  Ho wever, he could not imagine how work in this or
other committees could proceed if it were accepted that a country that could carry out investigations,
impose measures, publish legal acts in its official journal or federal register for 2½ months was
incapable of communicating that to this Committee.
72. The delegate of India stated that the remarks in connection with the classification matter had
been only preliminary.  It would also be pert inent to see at what point in time India actually
introduced the new grade, whether it was within the period of investigation.  This could help answer
the question whether a new investigation would be launched or whether the new grade came in before
that.  She would revert to this particular matter.  Hong Kong, China and Mexico had already flagged
their concern, and the investigating authority in ma king the final determination would have gone into
all these matters.  She, therefore, urged the Committee to look at these aspects once India had notified
in detail the results of the investigation.  Respon ding to the comments of the European Community,
she stated that the final notification, or the final determination, should be discussed at an appropriatetime.  Regarding the United States' question, she noted that the investigation had been completed and
a final determination made.  As regards the comment that a country that could carry out an
investigation could not make an immediate notification, she recalled that there were a number of
developed country Members that had not made notifications in various other committees on time, or
at all.  It was not, perhaps, a general rule that coul d be said to apply that if an authority could carry out
an investigation it could necessarily make a notification.  India had been making notifications, and
would be making a notification as soon as possible
(e) India – High density fi breboard (G/SG/N/6/IND/5)
73. The Chairman noted India's notification of initiation of investigation on high density
fibreboard, contained in document G/SG/N/6/IND/5.
74. The delegate of India stated that the investigating body had found prima facie  that imports of
the percentage of domestic production over the concerned periods increased from 0.32 per cent to as
much as 27.47 per cent.  Other indicators to determine injury had likewise been indicated in the
notification, so she awaited questions.
75. The delegate of Thailand congratulated and welcomed the Chairman.  Thailand had a
substantial interest in this matter since it also ap peared as one of the affected exporters on this
product.  He had not yet received questions or information from his capital regarding this on-going
procedure, but he understood that they were in close contact with their Delhi office.  Therefore,
Thailand wished to reserve its rights to raise questions related to this matter and to reserve its right
under Article 8 of the Safeguards Agreement.  On this note, the delegate wished to raise one systemicmatter to the attention of the Committee.  The number of safeguard measures invoked by India had
increased rapidly since the invocation of the protective measure under the balance-of-payments
restrictions.  Since India has been one of the strong advocates of the systemic issues in the WTO,
Thailand wished to urge India that safeguard measures not be used outside the context of the
Agreement and that clear causality be determined prior to any imposition of any measures.
76. The delegate of Malaysia noted that this measure by India also affected Malaysia and they
also wanted to express their concerns.  His delegation would come back to this, possibly in the form
of written questions to India.  Many of their concerns had been expressed by the United States in
addressing the earlier case on polypropylene glycol as regarded prima facie  evidence and the
imposition of the provisional safeguard duty.  He sought a confirmation from the Indian delegation
that the provisional safeguard duty had not yet been imposed.
77. The delegate of the United States noted that many of the questions that he would now pose he
also posed earlier in respect of the other safeguard action on propylene glycol, but this was a differentG/SG/M/12
Page 18
product and in a different state of investigation.  With respect to the previous case on propylene
glycol, he stood corrected on the point about the United States having an export interest but not
having been included in the notification.  It had since been pointed out to him that the United States
had actually been included among the principal suppliers.  Concerning high density fibreboard, he
noted in the notification that there were no imports of hardboard entering India during the period 1994
to 1995.  He asked India to describe any trade policy measures that had been in effect in that periodwhich could have limited the importation of hardboard.  This was following up on the questions they
had raised on previous occasions.  They were interested in knowing both the applied and bound tariff
rates for these products and in having a descriptio n of any import restrictions, such as VABAL, that
were being applied to the products concerned or were applied at any time during the applicable
investigatory period.  As with the other investigation, the United States requested an update on the
status of the investigation that had been undertaken by the Indian safeguard authority.  Had hearings
been conducted and, if not, when would hearings be held?  When did the Indian authority expect toconclude its investigation and make a determination on whether or not serious injury or threat of
serious injury had been caused by increased imports?  He also requested confirmation regarding the
application of the provisional safeguard duty, if any.  He further requested India to:  describe the basis
for the prima facie  determination that increased imports were causing serious injury or threat of
serious injury to domestic industry – in light of information provided in the notification whichindicated that domestic production actually increased during the period 1996 to 1997;  explain how
the domestic production figures for 1998 had been derived since the year had not yet been completed;
supplement the information provided in paragraph 4 of the notification by providing the value of the
imports and the value of domestic production for each of the periods; and provide data for apparent
consumption, both in value and quantity, for each of these periods.
78. The delegate of India noted Thailand's reservation of rights to raise questions as well as its
reservation of rights under Article 8 of the Agreement on Safeguards.  Regarding the second issue
raised by Thailand, the delegate wished to convey India's appreciation of the current confidence that
Thailand had placed in India.  Regarding the systemic concern that Thailand had raised on the rapid
increase in numbers, she recalled that at the last meeting India had briefly mentioned that someMembers perceived that there was an increasing number of safeguard measures initiated by India,
pointing to some five measures which India had intr oduced during this year.  India had explained that,
since the end of 1996, the domestic safeguard regulations were being formulated and consequently
applications received during this period had been put on hold.  There were, therefore, a number of
pending applications which had to be considered together once the domestic regulations had beenfinalized.  After closely examining and following due  process, the competent authority took a decision
to initiate preliminary investigations during the year in some of these cases.  This naturally resulted in
a bunching up of safeguard notifications.  It would, therefore, be clear to Members that the bunching
together of safeguard notifications and those only pertaining to the initiation of preliminary
investigations had been the cause of the above-mentioned circumstances. Since India had explained
that the regulations were being worked out since 1996, the causality of the lifting of balance-of-
payments restrictions would not be established.  Regarding the concern of Malaysia, to the best of herknowledge, the provisional duty had not yet been imposed.  This would also answer the United States'
question in this regard.  The United States had also requested some information to which India had
replied on the previous point.  India believed that its notifications were detailed enough and that
whatever information was to be taken into account by the quasi-judicial safeguards authority was
being taken into account.  Concerned parties had every opportunity to raise all matters with theauthority during the hearings and during other interactions.  She wished to react to two points that had
been specifically made by the United States.  The first concerned the observation that there were
negligible imports prior to 1994/1995 and the question whether there were any restrictive trade policy
measures in place.  To the best of her knowledge, there had been no change of trade policy during the
years 1994 and 1995 and later for hardboard for this particular product.  The second matter that theUnited States had raised was how the figure for 1998 had been derived.  The notation in theG/SG/M/12
Page 19
notification stated the year 1997/1998, which, for India, was the fiscal year which would end in
March 1998.
79. The delegate of the United States asked about the current status of the safeguard investigation,
that is, whether hearings had been held, and any determinations had been made?80. The delegate of India stated that it was her understanding that the investigation was still going
on and at least one hearing had been held.
(f) India – Styrene butadiene rubber (G/SG/N/6/IND/6)
81. The Chairman next turned to India's notification concerning the initiation of an investigation
on styrene butadiene rubber (G /SG/N/6/IND/6), which was a double-symbolled document dealing
also with the notification of termination of an investigation (G/SG/N/9/I ND/1).  The Chairman noted
that these items would be discussed in a sequential manner, but if Members had comments which
covered both, these could be stated together.
82. The delegate of the United States noted that the application for the safeguards investigation
appeared to have been filed on 19 January 1998, and the notification was not made until
19 October 1998, and that this does not seem to satisfy the requirements of Article 12 of the
Safeguards Agreement that notification should be provided immediately.
83. The delegate of India stated that, as indicated in their communication dated 19 October, it was
within a month of the initiation of investigation that the Director-General of Safeguards suspended the
investigation on the grounds that the complainant had also filed an anti-dumping application
concerning imports of this item which was under investigation under the designated authority.  Since
the matter was under suspension and there was no investigation and it was to be clarified, the
investigation was not notified.  However, the matter had since been terminated as would be discussed
subsequently.
84. The Committee took note of the statements made.
(ii) Notifications of Application of a Provisional Safeguard Measure (Article 12.4)
Egypt – Safety Matches (G/SG/N/7/EGY/1)
85. The Chairman noted that, since the last meeting, Egypt had notified the application of a
provisional measure with respect to safety matches.  This is contained in document G/SG/N/7/EGY/1.
The delegation of the United States had posed written questions concerning this notification, and
Egypt had responded to those questions, under the previous agenda item.  The Chairman asked the
United States if they would like to ask any follow-up questions.
86. The delegate of the United States had no further questions and thanked Egypt for the
responses that they had already given.87. The delegate of the European Community wanted to return to some remarks he had made
earlier.  It was the EC's impression that it was not sufficiently clear on which basis Egypt had decided
to impose provisional measures and it was, therefore, rather difficult for the interested parties in this
case to evaluate whether the decision had been taken on the basis of sufficient evidence.  In this
context, it appeared that rather essential facts stil l remained unclear, such as the total value of the
imports, the total value of the imports per exporting country, the domestic production in absolute
terms (for the time being they had only percentage changes;  for domestic sales, they also had changes
in the percentage in relative terms), market share, profitability, available capacity and priceG/SG/M/12
Page 20
depression.  All these were important elements which should be available to the interested parties.
Even if it were recognized that there was sensitive information that had to be protected as
confidential, an investigating authority should make an attempt to at least provide as much
information on all these elements, and others, which made it possible for the interested parties to
defend their rights.  There was a requirement of transparency in these cases which had to be taken into
account.  From a procedural standpoint, he asked the delegate of Egypt whether Egypt had notifiedthis step before taking provisional measures, in accordance with Article 12.4 of the Agreement; and
whether it was possible that Egypt make available the basis for its decision, be it a petition, or be it a
set of information which had served as the basis for the ex officio investigation.
88. The delegate of Egypt stated that the notification under discussion mentioned the basis on
which Egypt had started both these provisional duties.  In that notification, it was clear that the
competent authorities had reached a conclusion that there was proof or evidence of serious injury.
There had been an increase in imports of safety matches to Egypt in both absolute and percentageterms.  The notification made clear the critical circumstances which had forced Egypt to apply
Article 6, which allowed Members to impose provisional duties or provisional measures promptly and
then to go through the investigation.  Concerning  the other information elements about which the
delegate from the European Community wished to have data, he gave the floor to his colleague from
capital.
89. The representative of Egypt stated that data of the total value of imports and the share of each
country and the market share had already been provided during the hearing on 1 October and if the
European Community wished to know more, or to be  provided with this information, it could submit
questions to Egypt and it would be provided with all information that was not confidential.
90. The delegate of the European Community thanked the delegates of Egypt for their
explanations.  For the time being, they had no record of the hearing mentioned, but would make an
attempt to formulate written questions on which they  would then expect written answers from Egypt.
91. The Committee took note of the comments made.
(iii) Notifications of a finding of serious injury or threat thereof caused by increased
imports (Article 12.1(b))
(a) India – Acetylene Black (G/SG/N/8/IND/1)
(b) India – Carbon Black (G/SG/N/8/IND/2)
92. The Chairman noted that two notifications of findings of serious injury or threat thereof
caused by increased imports had been received, both from India, one with regard to acetylene black,
contained in document G/SG/N/8/IND/1 and the other with reference to carbon black, contained in
document G/SG/N/8/IND/2.
93. The delegate of Singapore noted that, at the April 1998 meeting of the Committee, his
delegation had expressed serious reservations about the preliminary findings of the Indian safeguards
authority in respect of acetylene black imports.  The final findings of the authority had not allayedthese concerns.  Although no decision had been made to impose safeguard duties, they believed that
the final findings still failed, as did the prelimin ary findings of the authority, to comply with the
substantive obligations of the Safeguards Agreement.  Article 2 of the Agreement stipulated that a
safeguard measure could only be imposed if imports were of such increased quantities as to cause or
threaten to cause serious injury to domestic industry. His delegation believed that the authorities' finalfindings still failed to substantiate both the serious injury criterion as well as the causal link criterion
required for the imposition of a safeguard measure.  Serious injury was defined under Article 4,G/SG/M/12
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paragraph 1(a) of the Agreement as a significant overall impairment of the position of the domestic
industry.  His delegation believed that, in the case of acetylene black, no conclusive evidence had
been produced to prove serious injury.  Indeed, for a sizeable portion of the period of investigation,
three out of four domestic producers showed increased production and only one producer experienced
a decline in output.  They doubted very much the use of the term "significant overall impairment" to
describe this particular state of affairs.  The findings suggested that this was a fallacious concern andgiven the statement therein that "if out of four domestic producers one of them is unable to produce
and contribute to its market share, the market share vacated by him would be endeavoured to be taken
over by the other domestic producers and for doing so they would have to step up their production to
meet the increase domestic demand created on them as a result of loss of production and sale by one
of their producers".  The ability of these three other domestic producers to step in to increase
production did raise serious doubts about the finding of significant overall impairment.  Under
Article 4, paragraph 2(a), the production levels of domestic firms was an explicit criterion fordetermination of whether increased imports had caused or were threatening to cause serious injury.  In
its final findings, the authority also noted that factors other than an increase in imports did not appear
to have had any significant effect on the state of the industry.  Singapore continued to hold the
opposite view.  Frequent power cuts and labour problems had been cited as major negatives causing
importers to turn away from domestic producers of acetylene black.  These factors may haveunderpinned the reported fall in the sales and capacity utilization of domestic producers.  Under
Article 4, paragraph 2(b) of the Agreement, factors other than increased imports should be taken into
consideration.  Singapore urged India to give due consideration to these factors.
94. The delegate of Singapore also pointed out that, under Articles 5 and 7 of the Agreement,
India was obliged also to apply a safeguard measure only to the extent necessary and for such a periodof time as was necessary to prevent or remedy the injury and facilitate adjustment.  The recommended
duty of Indian rupees 12,950 per metric tonne on acetylene black imports appeared to be unwarranted
and excessive.  It appeared unwarranted in view of the continued doubts over the compliance with the
substantive obligations of the Agreement.  Moreover, the final findings indicated that the domestic
industry had already initiated various action plans to restructure their plants.  It had also come toSingapore's notice that one of the domestic producers ha d installed, as part of its readjustment plans, a
hydro-electric plan that was over 80 per cent complete.  In this light, they believed it might not be
necessary for India to impose a high duty rate for a long duration.  This was particularly so when the
existing customs duty was already high.  Moreover, an excessive safeguard duty would be detrimental
to the interests of the user industry and the international competitiveness of Indian products.  As such,Singapore urged India to re-evaluate the reco mmended quantum and duration of the safeguard
measure and its assessment of the impact of the proposed measures on domestic consumers.  The
Safeguards Agreement and Article XIX of the GATT stipulated strict substantive obligations that had
to be met before safeguard measures could be imposed.  Failure to meet these obligations not only
raised doubts about the legitimacy of these measures, but, more importantly, it also violated the rights
of the affected trading partners.  In this connection, Singapore appealed to the Indian Government
seriously to reconsider its findings.  On a closing note, Singapore urged the Government of India inthe conduct of its safeguards investigations to adhere strictly to the procedure obligations under the
Agreement, including notifications and consultations.  In particular, they urged India to comply fully
with the obligations under Article 12, paragraph 3 of the Agreement.  Should it decide to proceed with
the imposition of the safeguard duties in respect of acetylene black imports, there would have to be
adequate opportunity for consultations with affected Members to review pertinent information andexchange views on the proposed measures and to reach an understanding on compensation issues as
required by Article 8, paragraph 1 of the Agreement.  Needless to say, Singapore reserved its rights on
this and other matters relating to India's investigations in respect of acetylene black, as well as
propylene glycol.
95. The delegate of the United States noted that the Director General of Safeguards had
announced his determination of serious injury caused by increased imports on acetylene black onG/SG/M/12
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16 June 1998, but that the notification to the Committee was not submitted until 26 August 1998.  He
asked the delegate of India to please explain why this notification had not been provided immediately
as required by Article 12 of the Safeguards Agreement.  According to the information provided in
document G/SG/N/6/IND/1, dated 7 January 1998, the petition for the initiation of an investigation by
the acetylene black domestic producers requested an immediate imposition of a provisional safeguard
duty.  The information contained in the notification of the finding of serious injury did not appear toaddress the question relating to provisional safeguard duty, but paragraph 43 did recommend that a
safeguard duty be imposed on acetylene black for a period of two years "from the date of its first
imposition".  Had a safeguard duty already been imposed on acetylene black prior to the termination
by the Director General of Safeguards announced on 16 June 1998?  If so, on what date had the duty
first been imposed?  Had India imposed a provisional duty on this product?  The delegate requested
that India supplement the information provided in paragraph 18 of the notification by providing the
value of imports and the value of domestic production for each of the periods.  The delegate alsorequested that India provide data for apparent consumption, both in value and quantity, for each of the
periods; and the applied and bound duty rates for acetylene black prior to the imposition of the
safeguard duty; and that India describe in detail any import restrictions, such as the VABAL, that
were being applied to the product or were applied at any time during the applicable investigatory
period.  These two questions were asked at the time the initiation of the safeguards notification andthe delegate at that time mentioned that the information would be provided once a determination was
made, and he did not see it in here.  He also requested that India identify the exporting countries for
this product in a table format similar to that provided in the carbon black notification.
96. The delegate of Japan had similar concerns to those expressed by the delegate of Singapore.
As for the determination of injury, Japan understood that domestic consumption of acetylene black
was increasing and, as Singapore had mentioned, three out of the four companies that applied for the
safeguard measure were enjoying an increase in production.  Japan was of the view that it was very
doubtful that this situation should be deemed as a serious injury or threat thereof, and would
appreciate if the Indian delegation could elaborate on this point.
97. The delegate of India thanked all the delegations that had spoken.  They had obviously gone
through the notification in complete and full detail.  It was India's belief that the investigation had
been taken in accordance with the existing national regulations which, in turn, were consistent with
the provisions of the Safeguards Agreement.  She would address the specific points which Singapore,
echoed by Japan, had raised and then would proceed to the comments of the United States.  She
referred to paragraph 18 of the notification, which very clearly brought out that, on verification of thedata furnished by the importers of acetylene black, it had been found that imports in 1996/97 were
higher than had been alleged by the importers and that, during the period under reference, domestic
production had declined substantially.  The imports compared to the domestic production, which
stood at only 0.24 per cent in 1994/95 and 1.98 per cent in 1995/96, were 35.7 per cent in 1996/97 and
49.16 per cent over the first few months - April to September - of 1997/98.  Given such statistics, she
wondered about the concerns that Singapore had raised that serious injury or impairment of domestic
industry was not occurring.  From negligible penetration, they had reached a situation of nearly 50 percent penetration.  This alone would be enough to cover the serious injury criteria as well as meet the
significant overall impairment aspect that had been touched upon.
98. The delegate of India also referred to page 16, paragraph 26 of the notification, where it had
been clearly stated that the argument that had been repeated by Singapore in its intervention was
fallacious.  It stated, first, that the law did not require that the domestic production had to fall for adetermination of increased imports or serious injury to be made.  These remarks were made
particularly in the context of the query that, for three of the producers, production had increased,
while it had fallen for only one producer.  The authority had very clearly noted that a finding of
increased imports was to be arrived at after considering the imports in absolute terms as well as
compared to domestic production.  Where domestic production was increasing, but imports wereG/SG/M/12
Page 23
increasing still faster, a finding of increased imports could well be made, as the imports increased
both absolutely as well as compared to domestic production.  Obviously, the authority had taken all
aspects into consideration when arriving at its determination.  She also referred to some references
made in paragraphs 20, 21, 22 and 23 on both serious injury and causal link, where the Director
General of Safeguards had worked on the premise that if an objective valuation all factors, taken
together, showed that some degree of adverse effect had been caused to the domestic industry, itmight well result in a finding of serious injury.  This was also in reference to the remark of the
delegate of Japan.  In paragraph 24, the authority had further noted that, admittedly, as per the
definition of domestic industry, all the four producers taken together, or those who accounted for a
major proportion of the domestic production, needed to be considered as the domestic industry.  The
application had been filed on behalf of all the four domestic producers, which accounted for the entire
domestic production.  The analysis of serious injury in paragraphs 21 and 22 also took into account
data for all the four domestic producers taken together.  It was not just domestic production alone, infact the notification was so detailed that this inte rvention could last for another hour if the delegate
were to address all the aspects that the authority had taken into account in reaching the determination.
99. The delegate of India noted that the representative of Singapore had also mentioned that the
recommended duty of rupees 12,950 tonnes on acetyl ene black appeared to be unwarranted and
excessive, that the final findings indicated that the domestic industry had already initiated necessaryaction to restructure the plant and that all these aspects should have been taken into account.
Singapore had therefore urged India to re-evaluat e the recommendation both for the quantum and the
duration.  She referred Singapore to paragraph 37 of the notification, where the authority had noted
the adjustment plans and observed that Tecil, which was one company, had initiated necessary action
to restructure their plant and they were in the process of making a positive adjustment which wouldenhance their competitiveness.  In paragraph 39, it was noted that the adjustment plan submitted by
the domestic industry was not hypothetical or academic.  They were making a sincere effort to
become competitive, so as to face competition offe red by the imports.  It was considered that the
imposition of a safeguard duty would help them in restructuring and becoming competitive.  It was
also observed that some of the domestic producers had already taken steps in this direction and thedomestic industry would need a period of about two years substantially to complete their plan.  She
noted that the recommended period for the duty was two years, even though the industry had
requested a period of four years.  Also, the quantum for the second year was significantly lower than
the quantum proposed for the first year, so obviously the authority had evaluated the quantum as well
as the duration of the safeguard measure, taking into account the restructuring plan.  As Memberswere aware, India had been extensively liberalizing and opening up its economy over the last few
years.  A number of bodies in this Organization, as  well as the World Bank, had already taken note of
the significant progress made by India in this context.  Her delegation also wished to highlight the fact
that during the Uruguay Round negotiations on the Safeguards Agreement, the main consideration
had been that countries like India, which were being asked to open up their economies at a rapid pace,
should be able to deal with a situation where any surge of imports consequent on the opening up of
the markets, took place, thereby providing a reasonable time for the domestic industry to restructureitself and to become competitive.  The concern that had been expressed about the quantum and
duration of the safeguard measure was, therefore, not entirely understandable.  Singapore had also
raised a point that it was important for India to stipulate that strict substantive obligations had been
met before the safeguards measure could be invoked.  India had met all procedural and substantive
obligations in this regard.
100. Turning to the questions that the United States had posed, the delegate of India first addressed
the delay of the notification from 16 June to 26 August.  They had dealt with this issue in earlier
interventions.  There was no specification of a period in the Agreement, but India believed that their
notification was as prompt as it possibly could ha ve been.  Some clarification was sought as to
whether provisional duty had been imposed:  no, it had not been imposed.  A question was also askedwhy it was not imposed.  The facts of the matter seemed to suggest that it was not deemed necessaryG/SG/M/12
Page 24
by the authority to impose a provisional duty, and a final duty was recommended.  On the request for
additional data, both for this and carbon black, the notification could not have been more detailed than
it was and it contained all the necessary information.
101. The delegate of the United States regretted that the delegate of India would not provide the
information that they had requested.  While the delegate of India had addressed the question that no
provisional safeguard duty had been imposed, there had been no answer as to whether or not a finalsafeguard duty had been imposed, merely a referral to a recommendation that it be imposed.  Also
there had been no response to the question relating to the import restrictions that applied or had been
applied to this product previously, as well as the applied and bound tariff rates on the product.  He
failed to understand why the delegate from India was not interested in identifying the exporting
countries for this product as had been done concerning carbon black.
102. The representative of Japan appreciated the explanation made by the Indian delegation.
Although they did not wish to go into a detailed discussion, they did not agree with the interpretation
of what constituted serious injury in this case.
103. The delegate of Singapore expressed support for the statement of the delegate of Japan and
thanked the Indian delegate for a very detailed intervention.104. The delegate of India apologized to the United States for not having addressed earlier the
question on the final safeguards duty.  It had not been imposed; the recommendation was under
consideration by the Government.  Concerning import restrictions, during the period that was
considered in the investigation, there was no change in the import restrictions, the import policy
remained the same.  With respect to identifying countries, she was not sure what was intended to be
obtained.  India believed that the criteria for serious injury, as well as the task before the Director
General of Safeguards, had been completed in a comprehensive manner taking into account all aspectsof trade information, including country-specific information.  She was not fully convinced that any
further purpose would be served in providing this data.
105. The Chairman stated that, if there were no other comments in this regard, the Committee
could consider India's other notification of fi nding of serious injury, on carbon black, although he
noted that some of the remarks made had covered both acetylene black and carbon black.
106. The delegate of Thailand, also on behalf of Indonesia, expressed their sincere concern with
respect to India's notifications of finding of serious injury and threat thereof caused by the increase in
imports of carbon black and acetylene black.  During the April meeting, Thailand and many other
Members had, as Singapore had mentioned, expressed concern regarding the many safeguard
measures initiated by India.  While recognizing a Member's right to invoke Article XIX protectionagainst an unfair glut of imports (even though the Indian Government had not accepted such a
finding), they had a number of questions on which they sought further clarification from the
delegation of India, especially pertaining to the verification of evidence used to support the finding.
He apologized that these questions were not yet completed, as the notifications were still being
reviewed in detail in Bangkok and Jakarta.  They reserved their right under Article 12, particularly
paragraphs 2 to 4 thereof, to submit questions at a later date with an expectation of a written reply.
Article XIX of the GATT 1994 was silent on the competitiveness of the domestic production of theproducts in question when safeguard measures were taken.  Thailand was concerned that the
safeguard measures be exactly what they were:  safeguards when there was an unforeseen increase in
imports, but with an underlying assumption that the domestic production was sufficient and relatively
competitive.  They were in no way a means for a Member to provide protection to domestic
production so that abnormally high prices and high prof it could be attained at the cost of imports.  He
sincerely hoped that the alarming increase in the number of safeguard measures in recent years by
some Members was a sincere attempt to avoid serious injury caused by unforeseeable imports and notG/SG/M/12
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to act as a barrier to trade.  If that were the case, their effort and a great deal of hard work to uphold
the principle of market access and the liberalization of multilateral trading system would have all gone
to waste.  Finally, with respect to the notifications  under consideration, Thailand appealed to India to
reconsider their findings and reserved their right under Article 8, particularly paragraphs 1 and 2, and
Article 14 of the Safeguards Agreement to proceed further if it was found necessary.
107. The delegate of Egypt stated that, as a representative of one of those countries subject to the
measure concerned, he had a question for the delegate of India concerning whether the Indian
authority had already made the decision to impose the safeguard measures, or was still at the stage of
discussing the conclusion by the investigating authority.  He was not convinced about the conclusion
and recommendations.  There was a lack of evidence of the causal link between the injury and the
imports.  It was quite clear from the submission of the applicants that the difficulties facing the local
industry were due to local reasons rather than the increase in imports.  Also, the paragraph on public
interest was not convincing.  Therefore, they appealed to the Indian authorities to reconsider thoseconclusions and, as Thailand had done, they also reserved their right to invoke Article 8 and
Article 14 of the Agreement.
108. The delegate of India replied first to Egypt's question whether a decision had already been
made to impose a definitive final duty:  the matter was still under the consideration of the Government
and no duty had been imposed as yet.  On the question of lack of evidence on injury and causal link -particularly the point highlighted by Egypt that it did not appear to be due to an increase in imports -
she referred to page 20, paragraph 13, of the notification, where it said the imports had increased from
17,773 MT in 1996/1997 to 28,917 in the first half of 1997/98, indicating an increase of 225 per cent.
They believed that this quantum of increase was enormous and, further, the analyses went on to say
on a quarterly basis the imports had grown to 746 per cent and 883 per cent in the first and secondquarter of 1997/98, as compared to the respective corresponding quarters of 1996/97. India believed
that such increases were absolutely phenomenal. She recognized that Thailand would be submitting
written questions and her delegation would welcome the opportunity to give written replies to those
questions.  However, on the aspect of competitiveness that the delegate of Thailand had expressed
concern about, she referred to paragraph 11 of the notification, where the issue of cartelization andunfair and restrictive trade practices had been specifically addressed by the investigating authority.
India was very much seized of these aspects and believed that there was a very fine balance that could
be reached on what was necessary for protecting domestic industry -- especially during a period when
it was restructuring -- and unfair and restrictive trade practices.  It was not always easy to judge where
the balance actually sat until all facts were known and assessed carefully.  India had a long history ofsome form of anti-trust legislation.  In fact, the need to control unfair and restrictive trade practices
was enshrined in the constitution itself and India was very  much seized of it.  However, India
believed that the right of a Member to take safeguard measures was equally important and filled an
important element of that fine balance mentioned earlier.
109. The delegate of the European Community apologized for taking the time for a slightly more
general remark with regard to the views expressed by  the Thai delegate and the Indian delegate about
the question whether safeguard actions could be taken for the protection of inefficient, or only forefficient, industries.  It had to be kept in mind that such safeguard proceedings and measures did not
require any unfairness on the side of the exporting countries.  It could not be said that they required a
finding of efficiency on the side of the industry to be protected.  There had to be causality between the
imports and serious injury, but that was it.  He supported the Indian delegate in saying that the
safeguard instrument was not excluded as an instrument to be used by countries who had opened upand who were facing difficult periods and that was underlined in the structure of the safeguard
instrument as it was designed as a result of the Uruguay Round Agreement, that is a temporary
protection with the idea of a phasing out.G/SG/M/12
Page 26
110. The delegate of Thailand thanked the Indian delegate for supplying a response and stated that
his delegation would forward its questions to the Indian delegate in due course.  With regard to the
comment made by the EC delegate, he agreed that the key word was "causality", but if one looked
closely at Article 4.2 one would see that one had to look at factors other than imports that might cause
injury.  If that were the case, safeguards measures should not be taken.  He had raised the matter of
competitiveness because when the background of the industry was not competitive and it was facedwith liberalization, you could only expect the inflow of imports.  In order to protect that industry
using safeguards, you had to be very careful in de termining what the causes of the injury to the
domestic industry were – that is, whether it was domestic factors, or just imports, and not merely the
quantity of the imports.
111. The delegate of Argentina agreed with the EC delegate in saying that the competition factor
for a given industry was not a decisive factor for deciding on the application of a safeguard measure.
The key element for the application of a safeguard measure was compliance with the requirements setout in the Agreement.  The different considerations as to the efficiency or inefficiency of a given
domestic industry were, to a certain degree, subjective.  The important aspect with regard to the
application of a measure of this type was that the requirements of the Agreement be met, and amongst
these requirements, imports played a key role.  The level of increase of imports was a way in which
they could ensure that the other requirements contained in Article 4.2(a) did come into play in a givensituation.  Any debate which would in any way dimini sh the determining role played by imports in a
situation of this kind would, in fact, be departing from the letter and the spirit of the Agreement.
112. The delegate of India stated that it had been in order to emphasise that injury from imports
and the causality aspects was something to which they had given due and complete consideration that
she had chosen to answer that question first.  This was in consideration of the broader plane of the real
world and the fact that there was a balance to be maintained between competition and protection to
industry whether through safeguards or any other means that she had made the remarks in case there
was any conclusion.
113. The Committee took note of the statements made.
(iv) Notifications of termination of a safeguard investigation with no safeguard measure
imposed
India – Styrene Butadiene Rubber (G/SG/N/9/IND/1)
114. The Chairman noted that India's notification of  termination of a safeguard investigation with
no safeguard measure imposed had been received regarding styrene butadiene rubber.  This is
contained in document G/SG/N/9/IND/1.
115. The delegate of the European Community had two comments.  First, his delegation
understood that, while the safeguard measure had been terminated, an anti-dumping investigation had
been either opened or considered at the same time and with respect to the same product.  He asked
India to inform his delegation against which countries that anti-dumping proceeding had been opened.
Second, he wished to return to an issue touched on earlier:  the question of immediate notification.  It
was difficult to see how deadlines of two months or longer were feasible in this context.  He had
looked at what would be done in  other areas.  In the Anti-Dumping Agreement, Article 16.4, stated
that Members shall report without delay to the Committee all preliminary or final anti-dumping
actions taken.  The notion of "without delay" appeared less strong than "immediately".  However, the
Anti-Dumping Committee had discussed this matter.  All Members were members of that Committee,
although they might not be very active.  Nevertheless, they were aware that there was some rule now
that the notification should take place within 30 days.  While not suggesting that they come to anyconclusion here, he was suggesting that the Committee think about having some sort of guideline onG/SG/M/12
Page 27
what the time-period should be.  The Committee should consider that "immediately" was probably
somewhat stronger language than "without delay".
116. The delegate of India confirmed that the safeguard measure had been terminated.  She
recognized the question of the European Community on the anti-dumping action being considered and
believed that India would be in a position to provide such information to the relevant body, which was
the Anti-Dumping Committee, on this matter.  On the question of immediate notification, she tooknote that "without delay" was less strong language than "immediately", but also noted that there was
even stronger language in other Agreements which prescribed specific time periods.  While taking
cognizance of the fact that the EC delegate was not suggesting a modification of the provisions, but
rather to have some kind of indicative period, India believed that the term "immediately" in the
Agreement was an outcome of carefully negotiated discussions in the Uruguay Round.  She wished to
bring to the Committee's attention that, in countries like India, there were small and medium
enterprises which were engaged in production and it was not always possible to have investigationsand to collate all the data from various parts of the country and from different levels of bodies.  It was
in recognition of the diversity in production methods, the diversity in regulation, and various other
aspects that different language had been used in different agreements.  From India's perspective, they
had said today on a number of occasions that India did not believe that the word "immediately" had
any connotation of a specific timeframe attached to it.
117. The delegate of the European Community admitted that this reply of the Indian delegate was
somewhat disappointing.  He had tried to be constructive, but not too critical, just to give the
Committee an idea that in other Committees, where these Members were also present, they had
concluded that "without delay" could be translated as an understanding, as a recommendation, that it
should not be longer than 30 days.  He had no t suggested that the language of the Safeguards
Agreement should be altered, definitely not, but he thought that if the Members in the Committee
would, in the long run, have to live with periods of notification of measures -- sometimes even types
of emergency measures -- which were two months and longer, there would probably be quite a degree
of dissatisfaction.  The last question was:  If  India was capable of notifying the anti-dumping
measures it took within 30 days, why should India not be in a position to notify in a comparableperiod of time its safeguard measures?
118. The delegate of India did not think that anti-dumping and safeguards could be considered as
like issues.119. The Chairman stated that the point raised  by the European Community perhaps merited
further deliberation in the Committee, perhaps in a more general way rather than linked to specific
notifications.  He suggested that the Committee could address this issue, either in its next formal
meeting (before which, if Members so wished, they could submit any papers they wanted) or, if
Members so desired, then perhaps in an informal mee ting before the next meeting.  He wished to hear
from Members about any specific suggestions which could be made, and then the Chair could proceed
accordingly.
120. The delegate of Argentina noted that the European Community had raised an interesting point
that deserved further consideration or reflection.  He was not sure whether the Committee necessarily
needed to take a decision today on this point as to how it should proceed.  He also wondered whether
this was the only issue which should be subject to further debate concerning the overall operation of
the Agreement.  This was really only the very first experience of reviewing the functioning of the
Safeguards Agreement.  There were not as many elements at hand as with regard to other
Agreements, as the representative of the European Community had said.  For anti-dumping, forexample, there was an Ad Hoc Committee that was working on certain specific aspects and it did not
seem to him that things were really ripe enough yet in the context of the Safeguards Agreement forG/SG/M/12
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the Committee to embark on a procedure, or even take a decision to embark on a discussion of this
type.
121. The delegate of the European Community was not suggesting something like the Ad Hoc
Committee in Anti-Dumping, but he supported the idea that the Committee should discuss this matter
in a more general way and in a constructive manner so that there could be some guidelines.
Experience had shown that if there was a guideline it was much easier for administrations, eveninternally, to have rules which could be communicated.  Their experience in anti-dumping was
relatively positive, so he would welcome either informal or formal discussions at an appropriate
occasion in the not too far future.
122. The Chairman stated that, if Members agreed, he could consult informally with Members, and
that the Committee could re-visit this issue at its next meeting.
123. The Committee took note of the statements made.
(v) Notifications of a decision to apply a safeguard measure (Article 12.1(c))
United States – Wheat Gluten (G/SG/N/10/USA/2)
124. The Chairman stated that, since the last meeting of the Committee, one notification of a
decision to apply a safeguard measure had been received from the United States concerning wheat
gluten.  This is contained in document G/SG/N/10/USA/2.
125. The delegate of Colombia wished to make two clarifications.  First, Colombia had no trade
interest in this safeguard, but basically an interest of  a systemic nature as to how the measures were
applied.  Because of a lack of human resources and lack of time they had not put their questions in
writing beforehand, but they did have two questions.  First, could the United States indicate which
were the total imports for the agricultural year which ended up on 30 June 1993?  This was the
reference point for the tariff quota or the quantitative restriction being applied.  Second, did the non-application to developing countries mentioned in paragraph 4 mean that imports of developing
countries mentioned in the Annex were credited to th e "other" residual quota or credited on top of the
quota?
126. The delegate of the United States appreciated the questions posed by the delegate of
Colombia.  They were rather detailed and he was not prepared to answer them at this time.  However,
they could be provided in writing, he would see that they were answered.   
127. Subsequent to the meeting, Colombia submitted written questions concerning this notification
in document G/SG/Q2/USA/3.  The written replies of the United States to these questions are
contained in document G/SG/Q2/USA/4.
128. The Committee took note of the statements made.G/SG/M/12
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(vi) Notifications regarding the non-application of a safeguard measure to developing
countries (Article 9.1 and footnote 2 to Article 9)
United States – Wheat Gluten (G/SG/N/11/USA/2)
129. The Chairman observed that one notification had been received concerning the non-
application of a safeguard measure to developing country Members.  The notification was from the
United States concerning wheat gluten and it  is contained in document G/SG/N/11/USA/2.
130. No comments were made concerning this notification.
(vii) Notifications regarding proposed suspension of concessions and other obligations
European Community – Concerning US Measure on Wheat Gluten
(G/SG/N/12/EEC/1)
131. The Chairman observed that, since the Committee's last meeting, one notification concerning
the proposed suspension of concessions and other obligations had been received from the European
Community concerning the United States measure on wheat gluten.  This is contained in documentG/SG/N/12/EEC/1.
132. The delegate of the United States asserted that the United States believed that the European
Community's notification was premature.  The US President had imposed the three-year safeguard
measure on wheat gluten only the preceding June.  It was far too early to be discussing the issue of a
possible extension of the President's action, let alone for the European Community to be considering apossible response to an extension.  It was their hope that the wheat gluten industry would make a
sufficient adjustment in three years.  If a request for an extension of the safeguard action arose in the
future, they would, of course, consider the matter on its merits in the light of all the circumstances,
consistent with US law and their international obligations.  The President's action was entirely
consistent with US obligations under the Safeguards Agreement and they would strongly defend theirduty-free access of corn gluten feed into the European Community.
133. The delegate of the European Community than ked the United States for their comments with
regard to this case.  They considered that they had made this notification at the appropriate time,
indeed they had been advised that they were required to make this notification within a 90-day
deadline according to the provisions of Article 8 of the Agreement.  Therefore, they did not consider it
to be premature.  Obviously, it was clear that during this three-year period, unless some other
unforeseen circumstances occurred, they would not be in a position to get involved in the suspension
of the concessions involved.  Nevertheless, they considered that it was appropriate, and indeed
necessary, to make this notification at this time.  It was their hope that the US authorities would not
consider it necessary to prolong this safeguard measure beyond the three-year period.  Indeed, theywould consider a withdrawal of this safeguard measure before the end of the three-year period to be a
more appropriate and desirable course of action, and therefore they maintained, for the moment, this
notification in its present form.
134. The representative of Argentina stated that their comments with regard  to this notification
were in line with the general debate that had occurred throughout the day concerning the importance
of covering all the procedural aspects and substantive aspects relating to the Safeguards Agreement.
From the two statements, in particular, that made by the European Commission, his delegation
understood the reasons which may have led the European Community to have made a notification of
this type at this point.  The 90 day deadline which stemmed from Article XIX was really a trigger for
making such a notification in any circumstances which might arise in the future.  All the different
phases provided for in Article 8.2 of the Safeguard Agreement would also be respected.  There wouldG/SG/M/12
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be an opportunity for debate in the future once a measure of retaliation had been applied.  His
delegation did not quite understand how the last paragraph in this notification would actually operate.
It spoke of five days after a decision taken by the Dispute Settlement Body.  This reference to the five
days after the DSB decision is something to which they had been unable to find any sort of reference
in the Agreement, unless this perhaps came under Article 14.  What was the role played by these five
days after the DSB decision?  Did this perhaps have something to do with an implementation measureto be drawn up by the DSB?
135. The delegate of the European Community was not in a position to reply to the Argentinian
delegate's question regarding the five days, but hoped to make the information available very soon.136. The Committee took note of the statements made.
D. NOTIFICATIONS CONCERNING PRE -EXISTING MEASURES
Panama (G/SG/N/3/PAN)
137. The Chairman stated that, since the Committee's last meeting, Panama had submitted a nil
notification concerning pre-existing measures indicating that it had not adopted and did not maintain
any pre-existing measures covered by Article 11.  This notification is in document G/SG/N/3/PAN.
While there was no requirement that a Member make such a nil notification, the Chairman wished to
thank the delegation of Panama for taking the effort to do so.
138. The Committee took note of the statement made.
E. PROGRESS IN PHASING OUT MEASURES COVERED BY ARTICLES 10 AND 11
139. The Chairman recalled that under Article 13.1(d) of the Safeguards Agreement, the
Committee was required to monitor the phase-out of measures covered by Articles 10 and Article 11.1
and that, at its meeting of 24 February 1995 the Committee had decided that such a monitoring should
be done on an annual basis.  Two Members - the European Community and Korea - had notified pre-existing Article XIX measures covered by Article 10.  In addition, five Members - Cyprus, the
European Community, Korea, Slovenia and South Africa - had notified pre-existing grey-area
mesures covered by Article 11, along with the timetable for the phase-out of such measures.  The
Annex to the Agreement identified one additio nal such measure maintained by the European
Community with a termination date of 31 December 1999.  At the Committee's April 1998 meeting,Slovenia had informed the Committee that, on the basis of its notification in document
G/SG/N/5/SVN/Suppl.2, as of 1 January 1998, it no longer  had any pre-existing measures in force.  In
accordance with the practice in the past meetin gs, the Chairman suggested that the Committee
undertake the monitoring of the phase-out of these measures by giving the floor to each of the four
notifying Members, other than Slovenia, to make brief statements concerning the progress in phasing-out pre-existing measures.  After each such statement, the floor could then be open to questions from
other delegations.  The Chairman observed that the delegation of Cyprus was not represented at the
meeting, and requested Cyprus to provide a brief written report for circulation to Members and review
at the next meeting.
140. The delegate of Korea stated that Korea had reported at the last full meeting that one pre-
existing measure notified under Article 10 and three voluntary export restraints covered by
Article 11.1(b) remained in effect.  Of these four, a measure on stainless steel flatware had beeneliminated on 31 December 1997.  Therefore, Korea now maintained three measures.  With regard to
Article 10, there was an import licensing restraint on hot bean paste which would be terminated by the
end of 1999.  Under Article 11.1(b), there were two voluntary export restraints on oysters in airtight
containers and shelled chestnuts which would be eliminated by the end of 1998, as notified.G/SG/M/12
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141. The delegate of the European Community said that there were two measures on which the EC
could report, on coal and potatoes.  The measure on coal, as foreseen, had been eliminated on
31 December 1997 and the measure on potatoes had expired, effective 1 November 1998.  Apart from
this, as the Chairman had mentioned, the agreem ent between the EU and Japan on motor vehicles
would remain in force, as foreseen, until 31 December 1999.
142. The delegate of South Africa observed that notifications submitted by South Africa were
contained in document G/SG/N/5/ZAF.  They had measures to be phased out by 31 December 1998.
They were on schedule with these measures, which related to film of polymers and propylene
classifiable under headings 3920 and 3921 as well as to tires, pneumatic tires and other products of
rubber, classifiable under headings 4011 and 4013.  However, as foreseen, they had not been able to
phase-out the measures on petroleum products and petrol, classifiable under Chapter 27.  The phase-
out programme had not yet been completed in this regard due to some restructuring problems and they
were hoping that they would be able to achieve this as soon as possible.
143. The Committee took note of the statements made.
F. OTHER BUSINESS
 (i) United States – Lamb meat
144. The delegate of the United States advised the Committee that a notification on the initiation of
a safeguards investigation on lamb meat provided for in sub-headings 0204 1000, 0204 2220,
0204 2320, 0204 3000, 0204 4220 and 0204 4320 of the Harmonized Tariff Schedule, had been filed
by the United States with the WTO Secretariat on 30 October 1998, after the agenda for this meeting
had closed.  In addition to the notification, the announcement by the US International Trade
Commission was also filed.  A copy of the petition that had been filed was available with the
Secretariat for reference by Members of the Committee.
145. The delegate of New Zealand noted that his delegation was grateful that the United States had
sent them a copy of their intention to initiate a safeguard investigation for lamb meat.  New Zealand
had an interest as a major supplier of lamb meat to the United States and wished to express concern
that the US industry had initiated this action, when there were other, more positive, ways of dealing
with the situation.  New Zealand's initial view wa s that the decline in production and the state of the
US industry were attributable to a number of factors, but not to increased imports.  New Zealand
would be carefully monitoring the investigation process in the context of its consistency with the
Safeguards Agreement.  To assist their understanding, they wished for clarification on some points.
The notification itself was rather sparse which, in light of some of the questions which had been asked
of other delegations earlier in the meeting, the delegate found surprising. New Zealand asked forclarification of whether the petitioners, as listed in the application, constituted a major proportion of
the production of lamb meat or whether some were, in fact, sheep ranches producing live animals.
New Zealand assumed that a lot of the other inform ation which they would require would be found in
the petition and in the process.
146. The delegate of Australia stated that his delegation shared New Zealand's concerns about the
case that had been initiated.  Australia too was of the view that any problems that were being faced by
the lamb meat industry in the United States were not being caused by increased imports.  They wouldbe following the case closely and would be considering making a submission in respect of the inquiry.
They thanked the United States for having drawn this to the Committee's attention under Other
Business, as it was something that they considered quite serious.
147. The delegate of the United States had taken note of the comments made by the delegates of
Australia and New Zealand.  It was his impression th at there had been only the one question regardingG/SG/M/12
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the make-up of the petitioners who had asked for the investigation.  He wanted to answer that but,
rather than trying to get into the explanation, noted that there was a rather detailed explanation of
exactly who the petitioners were within the petition itself, a copy of which was available with the
Secretariat.
148. The Committee took note of the statements made.
(ii) Argentina - Footwear
149. The delegate of the United States asserted that it was their understanding that the Government
of Argentina was considering changing the safeguard that was currently applied on footwear imports
from a specific duty to a quota.  He requested more information on Argentina's plans to alter the
safeguard.  The US Government hoped that any modification of the safeguard would be liberalizing,
per Article 7.4 of the Safeguards Agreement, rather than a further burden on exports to Argentina,.
150. The representative of Indonesia, on behalf of  ASEAN, wished to raise a systemic concern
with the Argentinian delegation, and sought a verification and perhaps some clarification with respect
to a report recently received from Buenos Aires that the Government of Argentina was planning to
modify its current safeguard tariff measures on th e imports of footwear to quota measures, thereby
making the safeguard measure more restrictive.  ASEAN had no intention of initiating a prolonged
discussion at this stage, but was merely seeking information.  It was hoped that this report would not
be substantiated and that Argentina planned to liberalize its measure as required by the Agreement.
151. The delegate of the European Community wished to raise the EC's concern with regard to this
case in view of the fact that Argentina had published on 28 April 1998, in Resolution 512 of 1998, an
alteration of the liberalization schedule of the measures.  Argentina had not notified this resolution
and also had not notified all the relevant information concerning this modification.  This seemed to be
in breach of Article 12 of the Safeguards Agreement and further information from Argentina wasrequested.
152. The delegate of Argentina stated, with respect to the comments raised by the United States
and Indonesia on behalf of ASEAN, that neither of the scenarios raised by the two delegations was
applicable.  He regretted that Argentina had not been informed of the intention of other delegations to
raise this issue under Other Business, which would have allowed more time to consult with theircapital in order to meet the concerns expressed.  At any rate, he could guarantee both delegations that
their message would be passed on.  With respect to the comment that was raised on behalf of ASEAN
by Indonesia, he wished to recall that the other Members of ASEAN were excepted due to the volume
of imports.  With respect to other comments that were raised by the EC delegate, Argentina was
somewhat more concerned because it was clear that Argentina and the European Community at thistime had a dispute settlement procedure in place concerning the safeguard measures that Argentina
had applied.  The EC comment led them to wonder wh ether this did not involve a break with the rules
of confidentiality of the dispute settlement procedures.  His delegation would pass on the message to
their authorities.
153. The delegate of the European Community stated that it was known that Argentina and the EC
were in the middle of dispute settlement on the Argentina footwear case, but the request made in the
meeting had nothing to do with that.  Under dispute settlement, there was the question of justificationof the safeguard measures, as they were.  There had now been a change of substance because the
liberalization schedule was part of the measure.  This was completely separate from the dispute
settlement issue, which the European Community did not want to raise here.
154. The delegate from Argentina did not grasp the logic behind the comment that was just made.
The EC delegate was saying that it was not related to the dispute settlement procedure and he was alsoG/SG/M/12
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saying that the point that he made was part of the procedure.  As far as Argentina was concerned,
what constituted part of dispute settlement was governed by the provisions of the Dispute Settlement
Understanding, in particular Article 18 of the DSU.  Argentina was concerned that the European
Community insisted on raising this point in this context and did not think it appropriate to discuss this
in this Committee under Other Business.  This was something that was in dispute settlement.
155. The delegate of the European Community disagreed.  What was before the Dispute
Settlement Body was the existing measure as it was when Argentina imposed that measure.
Argentina had apparently changed the measure subsequently and the EC's question related to this
issue of the change.  That was the simple question, and it was not subject to the dispute settlement
proceeding.  However, if Argentina did not wish to reply to this, the European Community could
certainly repeat the question in a rather more formal manner.  The delegate requested clarification on
the issue whether Argentina was refusing to respond to that question, either now or later in writing.
156. The delegate of Argentina repeated that his delegation could not answer in this forum the
question raised by the European Community.  This was taking place in a different legal context.
However, if what the European Community was actually saying here was that this different legal
context did not exist, then his delegation would ta ke note of what the EC had said and would respond
formally in due time within the appropriate forum and under the norms of the Dispute Settlement
Understanding.
157. The Committee took note of the statements made.
(iii) Nigeria – Pre-existing measures
158. The Chairman noted that this issue had been raised by the United States and that the
delegation of Nigeria did not appear to be represented in the meeting.159. The delegate of the United States noted that they had received some responses to the
questions that they had posed to Nigeria.  However, the US questions had been rather detailed and
specific and the responses received had been of a very general nature and did not appear to address
directly the questions that had been posed.  In the absence of the Nigerian delegate, however, he did
not need to pursue this point further.
160. The Chairman stated that these concerns, as stated by the United States, would be passed on
to Nigeria through the Secretariat.  However, if the United States had any specific elaboration or
follow-up questions, it could submit those in writing and they too would be passed on.
161. The Committee took note of the statements made.
(iv) Brazil - Toys
162. The delegate of the European Community stated that Brazil had imposed provisional
safeguard measures on imports of toys in July 1996 and it was foreseen that a mid-term review would
be carried out by the end of March 1998.  He wished to ask the delegate of Brazil if there was any
information on that mid-term review, whether it had taken place and, if so, whether it had been
notified or would be notified soon.
163. The delegate of Brazil wished to inform the Committee that it had just received the
notification of the mid-term review from Brazil and that it was finalizing the translation process.  The
notification would be presented to the Secretariat in the next few days.
164. The Committee took note of the statements made.G/SG/M/12
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G. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS
165. The Committee adopted its annual report to the Council for Trade in Goods (subsequently
circulated as G/L/272).
H. DATE OF NEXT REGULAR MEETING
166. The Chairman noted that the Committee had agreed that regular meetings normally would be
held in the last week of April and the last week of October, in conjunction with the regular meetings
of the Committees on Anti-dumping Practices and Subsidies and Countervailing Measures.  In the
spring, anti-dumping issues would require five full days of meetings, occupying the entire last week
of April.  In view of this, this Committee decided to hold its regular spring meeting during the week
of 19 April 1999.
167. The meeting was adjourned.
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