RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/M/20
8 April 2003
(03-1925)
Committee on Safeguards
MINUTES OF THE REGULAR MEETING
HELD ON 28 OCTOBER 2002
Chairman:  Mr. Gustavo Lunazzi (Argentina)
1. The Committee on Safeguards (the "Committee") held a regular meeting on 28 October 2002.
2. The Chairman noted that the representative of the United States raised two items under "other
business", one with respect to the provisional measure imposed by Ecuador on matches, and the other
with respect to the then provisional measure imposed by Costa Rica on rice.  The Chairman himself
also proposed to include two administrative issues  under other business.  The following agenda was
adopted:
A. NATIONAL LEG ISLATI ON.....................................................................................................2
1. Review of notifications of new or amended legislation or regulations not
previously reviewed by the Committee (including supplemental notifications of
existing provisions not previously reviewed)..........................................................................2
(a) Chinese Taipei .............................................................................................................. ..............3
(b) Dominican  Republic .......................................................................................................... .........4
(c) People's Republic of China.................................................................................................. .......4
B. NOTIFICATIONS OF ACTIONS R ELATED TO SAFEGUAR D MEASURES .....................5
(a) Brazil - Coconuts ........................................................................................................... .............5
(b) Brazil – Toys............................................................................................................... ................5
(c) Bulgaria – Crown Corks ...................................................................................................... .......6
(d) Bulgari a – Urea............................................................................................................. ..............6
(e) Bulgaria – Certai n Steel Products........................................................................................... ....6
(f) Bulgaria – Amm onium Nitrate ................................................................................................. ..6
(g) Canada – Certain Steel Products............................................................................................. ....6
(h) Chile – Certai n Steel Products .............................................................................................. ......7
(i) Chile – Fructose............................................................................................................ ..............8
(j) Czech Republic- Am monium nitrate ..........................................................................................8
(k) Czech Republic- Cert ain Steel Products .....................................................................................8
(l) Czech Republic – Cocoa Powder............................................................................................... .9
(m) European Communities – Certain Stee l Products.......................................................................9
(n) Hungary– Certain Steel Products............................................................................................. .11G/SG/M/20
Page 2
(o) India – Acetone............................................................................................................. ............12
(p) India – Epic hlorohydrin ..................................................................................................... .......12
(q) India – Industrial Sewi ng Machine Needles .............................................................................12
(r) India – Vege table Oil....................................................................................................... .........13
(s) Jordan – Ceramic Sinks ...................................................................................................... ......13
(t) Jordan – Ceramic Tiles ...................................................................................................... .......14
(u) Jordan – Cooking Appliances ................................................................................................. ..14
(v) Jordan – Electron ic Accumulators............................................................................................ 14
(w) Jordan – Magnetic Tapes ..................................................................................................... .....14
(x) Jordan – Pasta .............................................................................................................. .............14
(y) Latvia – Live Pigs and Pork................................................................................................. .....15
(z) Mexico – Pl ywood Panels..................................................................................................... ....15
(aa) People's Republic of China – Certain Steel Products ...............................................................15
(bb) Philippines – Ceramic Tiles................................................................................................ ......17
(cc) Poland – Certain Steel Products............................................................................................ ....17
(dd) Poland – Wa ter Heaters ..................................................................................................... .......17
(ee) Slovak Republic – Ammonium Nitrate.....................................................................................18
(ff) United States – Ce rtain Stee l Products ..................................................................................... 18
(gg) United States – Line Pipe.................................................................................................. ........18
C. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA TO THE WORLD
TRADE ORGANIZ ATION......................................................................................................19
D. OUTSTANDING IMPLEMENTATI ON ISSUE  – TIRET 84................................................28
E. ISSUES REGARDING THE APPL ICATION OF AR TICLE 9.1...........................................33
F. OTHER BU SINESS ............................................................................................................... ..35
1. Matters raised by the United States ......................................................................................35
2. Matters raised by the Chairman ...........................................................................................36
G. ANNUAL REPORT TO THE COUNC IL FOR TRADE IN GOODS.....................................36
H. DATE OF NEXT RE GULAR MEETING ...............................................................................37
A. NATIONAL LEGISLATION
1. Review of notifications of new or amended legislation or regulations not previously
reviewed by the Committee (including supplemental notifications of existing provisions
not previously reviewed)
3. The Chairman recalled that questions regarding legislative notifications were to have been
submitted to the Member concerned and to the Secretariat no later than 7 October 2002.  The
Chairman noted that written questions were submitted by the European Communities onG/SG/M/20
Page 3
7 October 2002 regarding the legislative notifications made by Chinese Taipei and the Dominican
Republic.
4. The Chairman stated that the Member whose legislation was being reviewed would be given
the floor first to make any introductory statement that it may wish.  The Chairman would then invite
that Member to present its answers to any written questions.  In accordance with the proceduresadopted by the Committee, a written version of those answers were also to be provided after the
meeting.  The Chairman recalled that follow-up questions could be asked at this meeting.  Other
delegations were also given an opportunity to present questions orally at the meeting.  If the Members
wished to have written answers to their questions, they had to ensure that all questions were presented
in writing to the Member whose legislation was concerned, and to the Secretariat, no later than three
weeks after the meeting, i.e., no later than 18  November 2002.  Written answers to all questions
submitted in writing by that deadline were to be submitted to the Secretariat no later than9 December 2002.
(a) Chinese Taipei
5. The Chairman noted that the European Communities had submitted written questions
regarding Chinese Taipei's notification contained in document G/SG/N/1/TPKM/1, which can be
found in document G/SG/Q1/TPKM/1.
6. The delegate of Chinese Taipei stated that they had already provided written responses to the
questions posed by the European Communities and asked whether the EC had further questions or
not.  The delegate of Chinese Taipei stated th at they would circulate their written answers.
7. The delegate of the European Communities stated that they were not in a position to put any
follow-up questions given that they had not rece ived Chinese Taipei's answers to their initial
questions yet.  The delegate of the European Communities also pointed out that they would appreciate
to receive these written  answers since they believed  it would not be possible for the Chinese Taipei to
provide answers orally during the meeting.
8. The representative of Chinese Taipei stated that it was their belief that their answers had
already been provided and that they were ready to  provide their answers orally during the meeting and
circulate the written answers at the end of the day.  The first question asked by the EC was about
Article 7 and Article 8 of Chinese Taipei's legislation, which provided for the application of import
quotas in textiles and clothing on a country by country or region by region basis.  The European
Communities had asked how this provision was related to Article 2.2 of the Safeguards Agreement
and the relevant provisions of the Agreement on Textiles.  The representative of Chinese Taipei stated
that their legislative regulation was called "the Rules for Handling Import Relief Cases Regarding
Textiles and Clothing" and that Articles 7 and 8 were in conformity with Article 6 of the TextilesAgreement.  The Regulation only covered those products in the Textiles Agreement according to
which transitional safeguard measures were applied on a Member by Member basis.
9. The second question was about the consistency of Article 8 of the Regulation with Article 5
of the Safeguards Agreement.  The representative of Chinese Taipei stated that Article 8 was related
to Article 6.4 of the Agreement on Textiles and Clothing, not to Article 5 of the Agreement onSafeguards.  Therefore it was consistent with their WTO obligations.
10. The third question was whether Chinese Taipei could confirm that the provisions of Article 9
of the Agreement on Safeguards dealing with developing country Members would be fully observed
under their legislation.  The representative of Chinese Taipei stated that these provisions would be
fully observed.  Chinese Taipei had not imposed any safeguard measure yet.G/SG/M/20
Page 4
11. The last question from the EC concerned Article 4 of the Rules for Handling Import Relief
Cases, which, in addition to tariffs and import quotas, also provided for financing guarantees,
subsidies for technological R&D and other assist ance and other adjustment measures as relief
measures.  The EC asked how Chinese Taipei ensured that its obligations under Article 5.1 of the
Agreement on Safeguards were complied with.  The representative of Chinese Taipei pointed out thatall the measures under their law that the EC cited were domestic measures aiming at facilitating the
industry's adjustment and that they were safeguar d measures.  Given that no safeguard measure had
been adopted yet by Chinese Taipei, there could be no inconsistency with the provisions of the
Safeguards Agreement.
12. The representative of the European Communities stated that they had no follow-up questions.
(b) Dominican Republic
13. The Chairman noted that written questions had been received from the European
Communities regarding the legislative notification of the Dominican Republic in document
G/SG/N/1/DOM/2, which could be found in document G/SG/Q1/DOM/1.
14. The representative of the European Communities stated that they had received the answers of
the Dominican Republic in Spanish and that they would study the replies carefully and would then
pose any follow-up questions if necessary.
(c) People's Republic of China
15. There were no questions concerning the notification submitted by China in document
G/SG/N/1/CHN/1.
16. The Chairman noted that although China had also submitted another legislative notification in
document G/SG/N/1/CHN/2, that notification was not included in the agenda for this meeting because
it had not been circulated in all three official WTO languages at least six weeks before this meeting.
That second legislative notification was, however, included under agenda item C.
17. The Chairman stressed that the legislative review process was of benefit to the Committee
and recalled that the deadline for any written questions concerning the legislations reviewed at the
meeting was 18 November 2002.  The deadline for written answers to all questions asked in writingwas 9 December 2002.  Concerning these deadlines, the Chairman reminded the Committee of the
importance of providing written answers to written questions posed.  The exchange of written
questions and answers constituted the Committee's only record of the review of legislations.  Thus,
the Committee's records were left incomplete when written questions were not answered, or only
answered long after the meeting where the review had taken place.  In this context, the Chairman
urged all Members to abide by the deadlines set by the Committee for the provision of written replies
to written questions.
18. The Chairman informed the Committee that that there were still 30 Members that had not yet
made a legislative notification:
Albania, Angola, Antigua & Barbuda, Barbados, Belize, Burkina Faso, Cameroon,
Central African Republic, Congo, Democratic Republic of the Congo, Djibouti,
Gabon, the Gambia, Grenada, Guinea Bissau, Guyana, Kuwait, Mali, Mauritania,Mozambique, Niger, Papua New Guinea, Rwan da, Saint Kitts & Nevis, Saint Vincent
& Grenadines, Sierra Leone, Solomon Islands, Swaziland, Tanzania and Togo.G/SG/M/20
Page 5
19. The Chairman urged these Members to make the required notification.  The Chairman
reminded Members that in cases where no legislation exists only a very simple "nil" notification was
required.
20. The Committee took note of the statements made.
B. NOTIFICATIONS OF ACTIONS RELATED TO SAFEGUARD MEASURES
21. The Chairman noted that various notifications of actions related to safeguard measures had
been received since the previous meeting.  In orde r to ensure that all of these notifications could be
reviewed in the limited time available, the Chairman suggested that the Committee address each
safeguard investigation as a separate agenda item, and review all of the notifications pertaining to
each separate investigation at the same time.
(a) Brazil - Coconuts
22. The Chairman noted that Brazil had made a number  of notifications rega rding its investigation
on coconuts, as set forth in documents G/SG/N /8/BRA/3, G/SG/N /10/BRA/3, and G/ SG/N/11/BRA/2.
23. The delegate of Sri Lanka stated that Sri Lanka had a substantial interest as an exporter of this
product to Brazil, and therefore intended to have consultations with Brazil under Article 12.3 of the
Agreement on Safeguards.  The delegate of Sri Lanka also indicated that they had sent a
communication to the Chairman on this issue before the meeting but that it unfortunately had not
reached the Chairman yet. The delegate of Sri Lanka stated that they would also notify the delegation
of Brazil of Sri Lanka's intent to enter into consultations on this issue and that the questions that Sri
Lanka would pose to Brazil during consultations would also be brought to the information of theCommittee.
24. The representative of Brazil took note of Sri Lanka's interest in the measure and stated that
they were ready for the questions that Sri Lanka could pose.  The representative of Brazil also noted
that in its notification to the Committee Brazil had provided for adequate opportunities for
consultations.
(b) Brazil – Toys.
25. The Chairman noted that Brazil had made a notification regarding its safeguard measure on
toys, as set forth in document G/SG/N/13/BRA/2.
26. The representative of the European Communities noted that this notification concerned the
result of a mid-term review but that Brazil had never notified the initiation of this mid-term review
contrary to Article 12.1(a) of the Safeguard Agreement.  Not having been notified about the initiation of
this mid-term review, the EC had not been in a positi on to participate properly in it. The representative
of the European Communities asked why Brazil had not notified the initiation of this mid-term review.
27. The delegate of Brazil asserted that at the time of the extension of the measure the date of the
mid-term review was indicated to all parties.
28. The representative of the European Communities considered that indicating the date of the
initiation of the mid-term review two years or one and a half years in advance was not sufficient to
fulfill the requirement of transparency and the n eed to properly inform all Members consistent with
Article 12.  According to the EC, when initiating a mid-term review an appropriate notification should
be made to the Committee in order to allow for all th e parties to be properly informed and to allow them
to participate fully in this process.G/SG/M/20
Page 6
29. The delegate of Korea stated that the Safeguards Agreement did not require WTO Members
to notify the initiation of a mid-term review.
30. The representative of Brazil stated that they shared Korea's view regarding the notification
obligations in relation to mid-term reviews.  Accord ing to Brazil, there was only an explicit obligation
to notify the results of mid-term reviews, not the initiation thereof.
31. The representative of the European Communities pointed out that in their view Article 12.1
required WTO Members to immediately notify the Committee on Safeguards upon initiating an
investigatory process relating to serious injury or threat thereof and the reasons for it.  According to
the EC this included the initiation of a mid-term review because a mid-term review was an
investigatory process relating to serious injury or th reat thereof.  Therefore, when initiating a mid-
term review, appropriate notification had to be filed with this Committee.
(c) Bulgaria – Crown Corks
32. The Chairman noted that Bulgaria had made a notification regarding its investigation on
crown corks, as set forth in document G/SG/N/8/BGR/1.
33. There were no comments or questions regarding this notification.
(d) Bulgaria – Urea
34. The Chairman noted Bulgaria's notification regarding the initiation of an investigation on urea
contained in document G/SG/N/6/BGR/4.
35. There were no comments or questions regarding this notification.
(e) Bulgaria – Certain Steel Products
36. The Chairman noted Bulgaria's notification regarding the initiation of an investigation on
certain steel products contained in document G/SG/N/6/BGR/5.
37. There were no comments or questions regarding this notification.
(f) Bulgaria – Ammonium Nitrate
38.  The Chairman noted that Bulgaria had made notifications regarding its investigation on
ammonium nitrate, as set forth in documents G/SG/N/7/BGR/2 plus Rev.1.
39. There were no comments or questions regarding these notifications.
(g) Canada – Certain Steel Products
40. The Chairman noted Canada's notification regarding its investigation on certain steel products
contained in documents G/SG/N/8/CAN/1 plus Suppl. 1.
41. The delegate of Canada noted that the notification was to report on an injury report the
Government had received on 19 August from the Canadian International Trade Tribunal ("CITT")
regarding a safeguard enquiry on 9 steel products and that the Government had not yet responded to
the Tribunal's recommendations on whether to impose safeguard measures.G/SG/M/20
Page 7
42. The representative of Turkey expressed concern regarding the CITT's recommendation
concerning safeguard measures on certain steel products.  The representative of Turkey pointed out
that Turkey had observed that the CITT had not used the recent import data when determining which
developing countries should be excluded from the measures.  The representative of Turkey considered
that  this methodology was not in compliance with the spirit of the Agreement on Safeguards.  Therepresentative of Turkey stated that Turkey expected the Government of Canada to consider current
anti-dumping measures on rebar imports into Canada while determining the extent of safeguard
measures.
43. The delegate of the European Communities expressed concern about this case, as well as with
all other cases, which appeared to have been triggere d by the US safeguard actions on steel earlier in the
year 2002. The delegate of the European Communities asserted that there were systemic issues to be
addressed which were common to all these steel safe guard actions, most of which were on the agenda at
the meeting.  The delegate of the European Commun ities stated that the Canadian notification and the
CITT report were very comprehensive, but unfortunately  this did not allow the EC to dissipate a number
of doubts as to the WTO-compatability of these actions .  In this context the delegate of the European
Communities pointed to imports which had been fall ing in the most recent period for certain products
and to some indicators which would not support the finding of an overall impairment of the domestic
industry.  The delegate of the European Communities stated that any measure by Canada which
excluded US imports would be WTO-incompatible.  The delegate of the European Communities
refrained from making comments on the general issue of whether NAFTA partners could be exempted
or not from safeguard measures because incidentally th is was one of the issues to be discussed by the
panel in the dispute settlement proceedings initiated ag ainst the US steel safeguards. The delegate of the
European Communities noted, however, that imports from the United States were the overwhelming
majority of Canadian imports for most products and it was difficult to see how Canada could find
serious injury or threat that could be attribut ed to non-US imports taken alone.  The EC had been
informed that Canada might be considering a more  restrictive approach than the one recommended by
the CITT vis-à-vis exports from the EC, for instan ce by adopting a more restrictive measure or by
exempting some of the US products.  Any such move  by Canada would very likely turn the EC's doubts
on WTO incompatibility of these measures into quasi-certainty.
44. In response to the concerns raised by the delegation of Turkey, the representative of Canada
asserted that as provided in Article 3.1 of the Safeguards Agreement the CITT had examined all the
pertinent issues of fact and law in its report.  Rega rding the concerns raised by the EC, the representative
of Canada pointed out that whil e no decision had been taken on whether to impose safeguard measures,
Canada was firmly committed to respect its WTO obligations in considering the issue of how Canadawould treat imports from the US or  other free-trade area partners.
(h) Chile – Certain Steel Products
45. The Chairman noted that Chile had made a number of notifications regarding its investigation
on certain steel products, as set forth in documents G/SG/N/10/CH L/4 plus Suppl. 1, and
G/SG/N/11/CHL/4 plus Suppl. 1.
46. The delegate of Chile stated that initially the first investigation on steel, initiated on the basis
of the complaint received from the domestic industr y, was terminated without the imposition of any
measure.  Later on, in the light of international events and the reaction of the other countries to the
safeguard measures imposed by the US and the EC on certain steel products, Chile carried out another
investigation and imposed definitive safeguard measures on two steel products.
47. The delegate of the European Communities noted that Chile had initiated an investigation at
the beginning of 2002, which was terminated after three months with no imposition of safeguard
measures.  Chile initiated a second investigation which was concluded with the imposition of aG/SG/M/20
Page 8
safeguard measure on these two products.  Noting that the only difference between the two
investigations were the effects of the emergency measures taken by the US and the EC on the global
steel market, the delegate of the EC asked why one of the two products on which measures had been
imposed was not subject to the EC or US measures.  The delegate of the EC asked what were the new
developments that had led Chile to take this action.
48. The representative of Chile asserted that when they evaluated the steel market in a global
manner they did not know quite exactly what would be the effects of these two products in relation to
the other products.  Therefore, this issue needed to  be handled on a bilateral basis between Chile and
the EC.
(i) Chile – Fructose
49. The Chairman noted that Chile had made a number of notifications regarding its investigation
on fructose, as set forth in documents G/SG /N/6/CHL/9, G/ SG/N/7/CHL/6 plus Suppl. 1,
G/SG/N/9/CHL/6 plus Suppl . 1, and G/SG/N/10/CHL/5.
50. The delegate of Chile stated that the investigation had covered for three products, but that
only one of those three products would be subject to definitive measures of 14 per cent.
(j) Czech Republic- Ammonium nitrate
51. The Chairman noted that the Czech Republic had made a notification regarding the initiation
of an investigation on ammonium nitrate, as set forth in document G/SG/N/6/CZE/8.
52. The delegate of the European Communities stated  that the EC had some trade interest in this
case, but had no particular comments to make at this stage.  However, the delegate of the EC noted
that this was one typical case where it appeared that the perverse effect of a domino effect or chain
reaction between measures could be seen.  Similar actions had been taken on this same product byBulgaria, Slovakia, and the Czech Republic.  The delegate of the EC mentioned that there were
rumours that even Hungary could open a similar inve stigation in the future.  According to the EC, this
illustrated how the market could be distorted when safeguard measures were taken too lightly.
(k) Czech Republic- Certain Steel Products
53. The Chairman noted that the Czech Republic had made a notification regarding the initiation
of an investigation on certain steel products, as set forth in document G/SG/N/6/CZE/9.
54. The delegate of Mexico asked whether within the context of the investigation, there was a date
foreseen for a hearing; whether the imposition of a pr ovisional measure was being considered and, if so,
whether there was an anticipated date for it; whether th ere had been a detailed analysis carried out which
would make it possible to think in terms of a fi nal decision being taken; and finally, whether in
accordance with Article 9.1 of the Safeguards Agreemen t, there were any indications that there would be
any exclusion for developing countries in ge neral, and regarding Mexico in particular.
55. The representative of the Czech Republic stated th at the investigation had been initiated only on
29 August 2002 and the investigation was continuing a nd that they did not have adequate information as
far as a provisional or a definitive safeguard m easure was concerned.  The Czech Republic would notify
the Committee of the results of the investiga tion once the investigation was completed.  The
representative of the Czech Republic also mentione d that a hearing would be held on 31 October 2002
in Prague for interested parties in the investigation.G/SG/M/20
Page 9
(l) Czech Republic – Cocoa Powder
56. The Chairman noted the Czech Republic's notifications regarding its investigation on cocoa
powder, contained in documents G/SG/N/8/C ZE/3, G/SG/N/ 10/CZE/3 and G/ SG/N/11/CZE/3.
57. There were no comments or questions regarding these notifications.
(m) European Communities – Certain Steel Products
58. The Chairman noted that the European Communities had made two notifications regarding its
investigation on certain steel products, as set forth in documents G/SG/N/8/EEC/1 and
G/SG/N/10/EEC/1.
59. The delegate of the European Communities pointed out that due to the US extensive
protection on steel in recent years which had culminated in the safeguard action in March 2002, the
EC producers faced a surge in imports of certain steel products, as a result of which they suffered
serious injury.  The EC came to this conclusion after an extensive investigation, which was the firstsafeguards investigation undertaken by the EC since the entry into force of the Safeguards Agreement.
As a consequence, the EC had little option but to take measures to at least work against a further flood
of steel imports to the Community.  The delegate of  the EC stated that in contrast to the measures
taken by the United States, the measures taken by the EC had the stated objective not to scale back
imports, but to continue to allow the traditional level of trade under normal conditions.  In otherwords, the measures taken by the EC were designed as a safety net which acted against a further flood
of imports and this was despite the fact that having found actual injury, the EC was entitled from a
purely legal point of view to adopt even more restrictive measures.  The measures took the form of
tariff quotas which were based on the average import levels in the past three years, 1999-2001, plus
10 per cent.  In practice this coincided with the import level of 2001, that is the highest level of theyears preceding the steel turmoil of 2002 caused by the safeguard measures taken by the United
States.  It was only above these quotas that duties would become payable, at rates ranging from 17.5
per cent to 26 per cent.  The EC measures would be progressively liberalized and would expire after
three years on 28 March 2005, but in the event that the US safeguard measures were repealed, the EC
would take the necessary steps to repeal its own measures.  The measures applied to only seven of the21 product categories included in the investigation.  For three additional products the EC had decided
not to take a position yet and was continuing to investigate them until the deadline allowed by the EC
legislation which was the end of December.  In relation to the remaining 11 products, the
investigation had been terminated and the provisional measures imposed for some of those 11
products had been allowed to lapse.  The EC thought that the fact that it had imposed measures on
such a limited number of products was a clear sign of its commitment to multilateral trade rules and in
particular to safeguard rules and to the commitment to recognize the exceptional character of thisinstrument.  The representative of the EC also st ated that the EC would continue to monitor import
developments very closely, given the remaining uncertainties affecting the world-wide steel market
and the potential effects on the EC industry.  The EC would have an accelerated surveillance system
which would deliver real time import data and would allow the EC to take rapid reactions if
necessary.  The representative of the EC stressed that their measures complied fully with WTO rulesand jurisprudence and that they also conforme d very much with the EC's stated position, that
safeguard measures should only be imposed in exceptional circumstances and should be imposed
subject only to the exclusion of developing countrie s in certain circumstances.  The representative of
the EC also stated that they were very worried at the recent developments in the steel sector with
several countries taking actions in recent times.  This was what had been called the "chain reaction" orthe domino effect.  The EC did not question the right to react and to act and to impose safeguard
measures to protect domestic steel industries which could be threatened by import floods following in
particular the US closure of their market earlier in 2002, but the EC believed that several countries
which were taking this type of action or which were carrying out investigations were sometimes goingG/SG/M/20
Page 10
a bit too far in deciding the scope or the level of the measure they impose.  This was not only a legal
question – this was more of a political choice and one had to distinguish between these two levels.
Politically it was a choice that the EC had made to limit the scope and the level of the measure to the
strict minimum.  As regards the scope, the EC had only covered products that had initially been
covered by the US measures.  As regards the level, the EC allowed imports to continue at the samelevel as in the period preceeding the imposition of the measure.  The EC invited other countries to
take a similar approach.   The representative of the EC pointed out, however, that several countries
had taken the opportunity of the US measure, or of the EC measure, to launch safeguard actions which
were going much further than these and which could start new protectionist actions.  These countries
extended their actions to products that were not subject to the present trend of trade diversion and they
were restricting the level of imports allowed to enter into their countries much more than necessary.
According to the EC, this was very worrying from a political point of view because this was the veryway to start again this chain reaction and domino effect.  Whenever one of the countries reacted in a
more restrictive way than it was required, then others could be forced to react again and the chain
reaction would never end.  The representative of the European Communities also pointed out that the
argument that the imposition by the US and the EC of safeguard measures on steel constituted an
unforeseen development for the countries which also imposed similar measures was not acceptable inlight of the fact that the product coverage of these measures were broader that the US and the EC
measures.
60. The delegate of the Unites States stated that the US safeguard measure was not the item on the
agenda being discussed and that every safeguard measure imposed must stand on its own merits and
must comply with the WTO Agreement on Safeguards.  The delegate of the US also noted that sinceboth measures were subject to dispute settleme nt proceeding the Members of the Committee were
constrained as to what they could say about th ese two measures.  The representative of the US
mentioned that they had noted that although the pr ovisional measure adopted by the EC excluded certain
products originating in the Russian Federation, Kaza kstan and Ukraine, no such exclusion appeared in
the final measure.  The US wanted to know whether the final measure also contained the same exclusion
and the legal basis for such exclusion.  Secondly, the representative of the US queried whether, as stated
in the provisional measure, any tariff increase imposed  as part of the provisional measures had been or
would be refunded in cases where there was no findin g of serious injury in the final investigation.
61. Regarding the first question of the US, the delegate of the European Communities referred to
paragraph 699 of the final decision, the Commission Regulation No. 1694 2002, which explained in
detail the considerations which were behind the trea tment of the products originating in countries such
as Russia, Kazakstan and Ukraine.  As regards the question on refunds, the delegate of the EC statedthat there was one product regarding which some exporters might have paid duties and that, as
provided in Article 2 of Commission Regula tion No. 1695 of 2002, any such amount would be
refunded as soon as possible.  The delegate of the EC invited the importers or exporters which had
paid such duties on this product to ask for the refund which would be granted as soon as possible.
62. The delegate of the United States referred to  paragraph 60 of document G/SG/N/8/EEC/1 which
provided that the EC would take due account of th e fact that three countries, Russia, Kazakstan and
Ukraine, were already subject to severe quantitati ve restrictions, and that the EC would also take
account of the exemption of developi ng countries of import shares of less than 3 per cent.  The delegate
of the United States asked what this meant with respect to imposing measures or excluding these
measures, or changing the measures in some way in respect to these three non-WTO members and what
the GATT justification for such exclusion was.
63. The delegate of the European Communities read out paragraph 699 of the Regulation 1694 of
2002 dated 27 September 2002, which provided:  "the tariff rate quotas resulting from the safeguard
measure apply to all countries.  As far as the quota allocation for Russia, Kazakstan and Ukraine is
concerned, the Commission considers that due to a number of country-specific elements, the quotaG/SG/M/20
Page 11
allocation foreseen in the bilateral agreements and unilateral measures vis-à-vis  Ukraine pending the
conclusion of an agreement for the products subj ect to these agreements and measures should be
maintained.  In particular, these specific elements ar e that the steel industries in these three countries are
undergoing far-reaching restructuring processes and sti ll require considerable modernization.  This is a
unique position that cannot be compared in scope or  depth to the situation in any other country.  In
addition, these three countries are already subject to severe quantitative restrictions which may not be
exceeded and which have been in place for many years.  These quantitative restrictions have always
been set at a level substantially below the countries' export potential and the existence of such
quantitative restrictions have limited the opportunity fo r the countries to export to the Community.  The
Commission considers that the quota allocation con cerning these three countries which are not WTO
members at present gives them no more favourable  treatment for any of the products than other
countries, which are WTO Members".
(n) Hungary– Certain Steel Products
64. The Chairman noted that Hungary had made a number of notifications regarding its
investigation on certain steel products in docum ents G/SG/N/6/HUN/1 plus Corr.1, G/SG/N/7/HUN/1
plus Corr.1, and G/SG/N/11/HUN/1 plus Corr.1.
65. The delegate of Turkey stated that it seemed to Turkey that the unforeseen development relied
on by Hungary was the application of safeguard measures on certain steel products by the US and the
EC.  The delegate of Turkey pointed out that Turkey was very worried about the safeguard actions
taken in the steel sector by several countries.  Regarding the Hungarian implementation, Turkey
believed that the facts and explanations provided by the Hungarian authorities did not justify a
determination that the products concerned were being imported at reasonably, sharply andsignificantly increased quantities.  Additionally, since Hungary had not disclosed its import figures on
a country basis, Turkey did not know the share of Turkey in the total imports of Hungary on product
groups subject to provisional measures, but according to Turkey's statistics the share of Turkish
exports into Hungary was under the Article 9.1 threshold for most of the products under investigation.
Therefore, asserted the delegate of Turkey, as a developing country member of the WTO, Turkeydeserved to be excluded from the application of measures as contemplated by Article 9.1 of the
Agreement.
66. The representative of Hungary noted that this question had been discussed in a bilateral
meeting between the Turkish and the Hungarian aut horities.  Hungary had explained to the Turkish
side that it only excluded developing countries that were GSP beneficiaries, which Turkey was not.
Hungary excluded Egypt and Ivory Coast from this safeguard investigation because they had been
included in the scope of the investigation due to a technical fault.  Concerning the situation of Turkey,the representative of Hungary pointed out that they had held bilateral consultations and had
transferred to the Hungarian authorities a number of questions provided by Turkey in written form,
and that they were waiting for the replies.  The representative of Hungary also stated that they would
inform Turkey in due course once they received responses to Turkey's written questions.
67. The delegate of the European Communities considered that this was another case where the
EC saw the same problems that they had highlighted generally before, that is the Hungarians were
considering that unforeseen developments were the US measures, but then Hungary took action
against a product which was not covered by the US measure.  The delegate of the EC also asserted
that Hungary established a level of quotas which was far below the traditional level of imports.  The
EC considered that this was not the proper approach, and urged Hungary to reconsider its position onthis before taking definitive measures.G/SG/M/20
Page 12
(o) India – Acetone
68. The Chairman noted that India had made two notifications regarding its investigation on
acetone, as set forth in documents G/SG/N/10/IND/6/S uppl.2 and G/SG/N/11/IND/1.
69. There were no comments or questions regarding these notifications.
(p) India – Epichlorohydrin
70. The Chairman noted India's notification regarding its investigation on epichlorohydrin,
contained in document G/SG/N/8/IND/11.
71. The representative of the United States noted that this was a notification of a June finding of
serious injury and recommendation as to remedy.  The US did have an export interest in this
investigation.  The US wanted to find out and clarify whether there had been any decision made on
remedy since this June recommendation; what the timeframe might be and whether there was any
provision for hearings or further submissions on the remedy issue once the authority had made afinding of serious injury and remedy recommendations.
72. The delegate of India stated that in the Indian system, after the authority made a
recommendation it was up to the central government to decide how to react to that recommendation.
There was no timeframe provided under the Indian le gislation, thus as soon as any decision was taken,
India would notify it to the interested parties as well as to the Committee.
(q) India – Industrial Sewing Machine Needles
73. The Chairman noted that India had notified the initiation of an investigation on industrial
sewing machine needles in document G/SG/N/6/IND/14.
74. The representative of China stated that China was disappointed that India had been the first to
use the transitional product-specific safeguard mechanism against Chinese products.  Bilateral
discussions had been going on between China and India in order to solve the issues through friendly
consultations.  China hoped that the Indian Government could make its final decision based on the
material and procedural provisions of para graph 16 of China's WTO Accession Protocol.
75. The delegate of the United States stated that they wanted to clarify with respect to this
notification that it was in fact referring to the notification of initiation of a transitional product-
specific safeguard investigation with respect to im ports from China, and not a safeguard investigation
addressing imports from all sources.  The delegate of the US noted that if this was, as appeared to be
the case, a notification of a transitional product-specific safeguard investigation, Article 16 of the
Protocol referred to by the delegate of China did not require notification to the Safeguards Committee
of the initiation of such product-specific safeguard investigations.
76. The representative of the European Communities asked whether the bilateral discussions had
led to any results, and in particular whether India and China intended to notify the results of these
consultations to the Committee.
77. The representative of India stated that no decision had been taken as a result of the bilateral
consultations between India and China and that as soon as anything was decided, as a matter of
transparency, it would be very promptly notified to the Committee.G/SG/M/20
Page 13
78. The delegate of China stated that since paragraph 16 of China's Accession Protocol was a part
of the WTO agreements, transparency was the basic principle of this organization and this principle
had to be followed in this exercise.
(r) India – Vegetable Oil
79. The Chairman noted that India had notified the initiation of an investigation on vegetable oil
in document G/SG/N/6/IND/13.
80. The delegate of Canada stated that Canada had participated in this investigation and had filed
a brief in July expressing Canada's concern that imports of canola had been included in the inquiry,
even though such imports represented an insignificant proportion of imports of all vegetable oils.
Canada would continue to request the exclusion of this product from the investigation as Canada
would participate in the hearings then underway in India.
81. The delegate of the United States asserted that they also had a significant export interest in
this investigation and serious concern about it.  The US wanted to confirm whether a date for a
hearing had been set for November 2002 and whether this hearing or hearings would addresses both
injury and remedy issues or whether there would be a separate proceeding to address remedy issues.
Finally the delegate of the US also pointed out th at the US was also interested in any information
available about the timeframe for the conclusion of th e investigation or the timeframe in respect of the
Director-General's report.
82. The representative of Malaysia stated that Malaysia also had export interests in this issue and
that they shared the interest in the questions raised by the United States and hoped to have some
replies from India.
83. Regarding the questions asked by the US and repeated by Malaysia, the delegate of India
stated that these countries were the best judge as they were participating in the investigation.  The
representative of India took note of the questions and would refer them to capital, and as soon as any
decision which was notifiable to the WTO was taken, they would as always, promptly notify it.
(s) Jordan – Ceramic Sinks
84. The Chairman noted that Jordan had notified the initiation of an investigation on ceramic
sinks, as set forth in document G/SG/N/6/JOR/7.
85. The delegate of the European Communities asserted  that the EC had some trade interest in at
least some of the cases initiated by Jordan.  The de legate of the EC stated that that the EC was quite
shocked at the number of investigations that had been initiated by Jordan in just five months.  Members
of this Committee had reviewed Jordan's safeguard legislation in April 2002, and as soon as the
legislation had come into force, Jordan became over  four or five months one of the largest users of
safeguards in the WTO community.  The representative of the EC stated that was very worrying. Therepresentative of the EC then reminded Jordan that there was jurisprudence which had stated very
clearly that safeguard action was not a routine inst rument; it was an exceptional instrument to be used
only in exceptional circumstances.  The EC found it ha rd to believe that Jordanian industries had been
facing exceptional circumstances in seven diffe rent products in such a short period of time.
86. The delegate of Turkey stated that Jordan's decision to impose tariffs on biscuits which was
inconsistent with the WTO rules had triggered a chain reaction by other producers to protect their
domestic markets.  The delegate of Turkey expressed Turkey's hope that this safeguard investigation
would be carried out and concluded in conformity with the commitments of Jordan to the WTO and
with the Agreement on Safeguards.  The Turkish Government expected that Jordan would giveG/SG/M/20
Page 14
enough time to all interested parties to examine the safeguards investigation report to raise factual or
legal claims.  Turkey also expected Jordan to disclose a more accurate report on safeguard
investigations to all interested parties.  Turkey reserved its right for all investigations.
(t) Jordan – Ceramic Tiles
87. The Chairman noted Jordan's notification rega rding the initiation of an investigation on
ceramic tiles, as set forth in document G/SG/N/6/JOR/4.
88. There were no comments or questions regarding this notification.
(u) Jordan – Cooking Appliances
89. The Chairman noted that Jordan had notified the initiation of two investigations on cooking
appliances, as set forth in document G/SG/N/6/JOR /5, concerning cooking appliances falling under CN
heading 7321.111.  The Chairman also noted  Jordan's second notification, contained in document
G/SG/N/6/JOR/8, concerning cooking appliances falling under CN heading 7321.112.
90. There were no comments or questions regarding these notifications.
(v) Jordan – Electronic Accumulators
91. The Chairman noted that Jordan had notified the initiation of an investigation on electronic
accumulators in document G/SG/N/6/JOR/6.
92. There were no comments or questions regarding this notification.
(w) Jordan – Magnetic Tapes
93. The Chairman noted that Jordan had made a number of notifications regarding its
investigation on magnetic tapes, as set forth in documents G/SG/N/8/JOR/2 plus Corr. 1 and
G/SG/N/10/JOR/ 2 plus Corr.1.
94. The delegate of the United States stated that they had not seen any notification with respect to
exclusions or treatment of developing countries under Article 9.1 regarding this investigation of
Jordan and that they wanted an explanation.
95. The representative of Jordan asserted that all the initiation proceedings by Jordan had been
rules-based and legally unavoidable proceedings.  Jordan was committed to apply and implement the
WTO Agreements.  Regarding the concerns raised by Turkey concerning the biscuits case, therepresentative of Jordan stated that this case had been completed one year ago and that Jordan and
Turkey had reached a mutual understanding in the consultations and that this measure was not
contested by any party at that time.  As regards the notification on the exclusion of developing
countries, the representative of Jordan clarified that since this condition did not apply to this case they
did not discuss it.
(x) Jordan – Pasta
96. The Chairman noted that Jordan had notified the initiation of an investigation on pasta in
document G/SG/N/6/JOR/3.G/SG/M/20
Page 15
97. The delegate of Egypt stated that since Egypt ha d a commercial and systemic interest regarding
some of the notifications made by Jordan, they woul d engage in bilateral discussions with the Jordanian
side with respect to these notifications  in order to reach a mutual agreement.
98. The delegate of the European Communities pointed out that they also had a specific interest in
this case and that they would like, to the extent that  it was possible, to be associated with the bilateral
discussions that would be held betw een Egypt and Jordan on this case.
(y) Latvia – Live Pigs and Pork
99. The Chairman noted that Latvia had notified the initiation of an investigation on live pigs and
pork, as set forth in document G/SG/N/6/LVA/2.
100. There were no comments or questions regarding this notification.
(z) Mexico – Plywood Panels
101. The Chairman noted that Mexico had notified the initiation of an investigation on plywood
panels in document G/SG/N/6/MEX/1.
102. The delegate of Malaysia stated that, as one of the parties cited in this safeguards investigation,
Malaysia had provided Mexico with a reply as to the reasons for the increase in imports.  According to
Malaysia the significant reason for the increase in  imports was the big difference between the MFN
tariff rates and the NAFTA tariff rates.  The delegate  of Malaysia mentioned that they were interested to
hear from Mexico on any updates on this issue.
103. The representative of Mexico stated that the administrative process was underway and that at
the appropriate time a decision would be taken in conformity with the Agreement and a notification
would be made. The representative of Mexico also stated that they would take into consideration the
concern of Malaysia and would inform them in due course.
(aa) People's Republic of China – Certain Steel Products
104. The Chairman noted that the People's Republic of China had made a number of  notifications
regarding its investigation on certain steel produc ts, as set forth in documents G/SG/N/6/CHN/1,
G/SG/N/7/CHN/1 and G/SG/N/11/CHN/1.
105. The delegate of Chinese Taipei stated that on 20 May 2002, China initiated a safeguard
investigation on 11 categories of steel products and one day later, on 21 May 2002, China announced
the conditions for the imposition of provisional safeguard measures on 9 categories of products out of
the 11 products subject to the investigation.  The provisional measures that China had taken affected
more than US$1.22 billion worth of exports of steel products from the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu and the total industrial injury was estimated up to US$2 billion.
Under the circumstances the Separate Customs Territory of Taiwan, Pengu, Kinmen and Matsu had
every right to protect its trade interest.  On 18 June 2002, one month after China had announced theinitiation of the safeguards investigation, the Separate Customs Territory of Taiwan, Pengu, Kinmen
and Matsu requested a bilateral consultation with China on provisional safeguard measures.
However, until the date of the meeting, China had not yet fulfilled its obligation to afford reasonable
opportunity for consultations on this matter.  The delegate of Chinese Taipei stated that according to
the relevant notifications received by the Committee, China had entered into bilateral consultationswith Japan, Korea and Mexico on the same subject and in the meantime had procrastinated on the
request from the Separate Customs Territory of Taiw an, Pengu, Kinmen and Matsu.  According to the
delegate of Chinese Taipei, compared with China' s treatment of other WTO Members' request, ChinaG/SG/M/20
Page 16
had failed to respect the spirit of non-discrimination deemed as the foundation of the WTO, in its
treatment of the Separate Customs Territory of  Taiwan, Pengu, Kinmen and Matsu's rights and
requests.  Based on these facts, the Separate Customs Territory of Taiwan, Pengu, Kinmen and Matsu
requested the Committee on Safeguards to urge, based on the authority provided in Article 13 of the
Agreement on Safeguards, the People's Republic of China to fulfill this consultation obligation underArticle 12.4 of the Agreement.  In the meantime the Separate Customs Territory of Taiwan, Pengu,
Kinmen and Matsu would keep requesting China to hold bilateral talks on this very important issue.
If by 21 November 2002, which was the expiration date of China's provisional safeguard measures,
the demand for consultations was still not met, the Separate Customs Territory of Taiwan, Pengu,
Kinmen and Matsu would not rule out the possibility of settling the dispute with China through other
WTO mechanisms.
106. The representative of the European Communities repeated once more with regard to the
Chinese measures the EC's concern that the Chinese measure targeted a number of products which
were not covered by the US measures or by the EC measures, despite China claiming that the
unforeseen developments having led to the situation were the US and the EC measures. The
representative of the EC referred to a number of products (stainless steel, seamless pipe, grain-
oriented and non-grain oriented) which were not co vered by the US measure but which were covered
by the Chinese measure and which represented a very substantial amount of the products covered by
this action.  The EC was very concerned at this and would ask China to reconsider its decision as
regards these products.  The EC also had a number of doubts about whether China could fulfill the
criteria for the imposition of measures on these and on other products, in particular with regard to
serious injury and the causation requirements.  The EC asked China to confirm that it would providethe EC with full opportunity to consult according to the rules of the Safeguards Agreement, before
imposing the measures.
107. Regarding Chinese Taipei's question, the representative of China stated that normal trade
relations in light of the WTO principles and rules between China and the Separate Customs Territory
of Chinese Taipei had not yet been established.  Such a situation was caused by unilateral restrictionserected by the Chinese Taipei side.  It was known to all that China's economic and trade policies
towards Chinese Taipei were open and non-discrimi natory.  Therefore, China did not consider that
Chinese Taipei was in a position to challenge China's policies and measures in the context of this
forum before allowing normal flow of goods, services and the people across the Straits.  It was
China's hope that all these fundamental issues could be first dealt with by bilateral channels.
Specifically, as far as the delegate of China knew, arrangements had been made for the bilateral
consultations in an appropriate way and that as long as the Members requested in a regulated andproper way and in a timely manner, the consultations would be arranged.
108. The delegate of Japan pointed out that Japan also had serious concerns regarding the
provisional safeguard measures imposed by China but that Japan would like to come back to this issue
under agenda item C.
109. The representative of Chinese Taipei stated th at to hold "friendly" consultations under the
WTO framework consultations had to be without an y pre-conditions, so that all Members had to play
by the rules of the non-discriminatory level playing field of the WTO and no more and no less.
110. The delegate of Mexico indicated that Mexico was also interested in the conclusion of this
investigation.
111. The delegate of China pointed out that non-discrimination was the best principle of the WTO,
which had to be followed by all the Members including Chinese Taipei.  In safeguard issues, China
had fully fulfilled the obligation of non-discrimination to all the Members.G/SG/M/20
Page 17
(bb) Philippines – Ceramic Tiles
112. The Chairman noted that the Philippines had made a notification regarding its investigation
on ceramic tiles in document G/SG/N/11/PHL/1.
113. The delegate of Indonesia stated that Indone sia was very concerned about the safeguard
measure imposed by the Philippines on ceramic tiles.  This measure had caused serious injury to the
trade interests of Indonesia, which was a significant exporter of ceramic tile products.  Therefore
Indonesia wished to appeal to the Government of the Philippines to bring the measure into conformity
with the obligations under the Agreement on Safeguards.
114. The representative of the Philippines asserted th at the Philippines had already replied to the
comments made by Indonesia on this issue in April 2002, and that their responses to Indonesia's
questions had already been circulated.  This ma tter was under discussion between the two countries.
The representative of the Philippines also finally stated  that they would come back to this matter when it
was resolved bilaterally between Indonesia and the Philippines in the near future.
(cc) Poland – Certain Steel Products
115. The Chairman noted that Poland had notified the initiation of an investigation on certain steel
products, as set forth in documents G/SG/N/6 /POL/4, G/SG/N/7/POL/1  and G/SG/N/11/POL/1.
116. The delegate of Mexico noted that although the safeguard measure imposed by Poland
excluded certain developing countries, Mexico was not included in that list.  Mexico had data which
indicated that Mexico had not exported to Poland during the period indicated.  Therefore, Mexico
wanted to know why they were not included in that list.
117. The representative of Turkey noted that Poland's notification regarding provisional safeguard
measures stated that tariff quotas had been established for WTO Members and other countries
proportionally.  Turkey queried whether the established quotas were country-specific or just for two
main groups stated in the notification.  Turkey also queried Poland's approach regarding the
methodology to apply under Article 9.2.1 of the Agreement on Safeguards.
118. The delegate of Poland stated that as far as the first issue raised was concerned, Poland had
reached a decision in the context of Article 9 under its internal legislation, which allowed Poland to
exclude certain countries whose GDP per capita was lower than Poland's.  The delegate of Poland
mentioned that they could revisit the issue on a bilateral basis.  As far as the allocation of quota was
concerned, the Polish authorities had not decided yet whether or not it was advisable to use national
quotas.  In all likelihood once a decision concerning the final measure was reached, the national quota
were the most likely result of the investigation.
119. The delegate of Malaysia sought an explanation from Poland as to whether Poland's practice
of identifying as developing countries only those countries whose GDP per capita was below Poland's
was consistent with Article 9.1 of the Safeguards Agreement.
120. The delegate of Poland stated that they would like to tackle the matter on a bilateral basis.
The delegate of Poland also stated that as far as he knew the Polish authorities had decided to grant
Malaysia this special status based on the rules he had mentioned before.
(dd) Poland – Water Heaters
121. The Chairman noted that Poland had made a notification regarding its investigation on water
heaters, as set forth in document G/SG/N/6/POL/3.G/SG/M/20
Page 18
122. There were no comments or questions regarding this notification.
(ee) Slovak Republic – Ammonium Nitrate
123. The Chairman noted that the Slovak Republic had notified the initiation of an investigation on
ammonium nitrate in document G/SG/N/6/SVK/3.
124. There were no comments or questions regarding this notification.
(ff) United States – Certain Steel Products
125. The Chairman noted that the United States had made a number of notifications regarding its
investigation on certain steel products as set fort h in documents G/SG/N/10/USA/6/Suppls. 5 through
7, G/SG/N/10/USA/6/Suppl.7/Corr.1, G/SG /N/11/USA/5/ Suppls.5 through 7,
G/SG/N/11/USA/5/Suppl.7/Corr .1, G/SG/N/12/USA/9 & G/SG/N/1 2/AUS/2, G/SG/N/12/USA/6 &
G/SG/N/12/BRA/2, G/SG/N/12/USA/7 & G/SG/N/12/KOR/1, G/ SG/N/12/USA/8 &
G/SG/N/12/NZL/1, and finally G/ SG/N/12/USA/10.  The Chairman also noted that additional
notifications in respect of this investigation we re contained in G/SG/43 plus Suppl. 1, G/SG/44 plus
Suppl.1, G/SG/45, G/SG /46 and G/SG/47.
126. The representative of Japan noted that a panel had already been established in order to settle
the dispute regarding this issue under WTO rules and at that panel, Japan, together with other co-
complainants had strongly claimed that the US safeguard measures were inconsistent with WTO rulesand that it would request that those measures be terminated immediately.  Japan was also struck by
the fact that as a consequence of the imposition of those measures by the United States, and as it was
apparent when one looked at the list of notifications under this agenda item (b), a number of Member
countries had initiated investigations regarding steel products which had already led in some cases to
provisional or definitive measures, as had been the case with the EC and China.  Japan was stronglyconcerned with such a series of chain reactions which had also been pointed out by several Members
during the meeting of the Committee.  Therefore, in  addition to requesting the US to terminate its
safeguard measures as soon as possible, Japan wanted to take this opportunity to also urge other
Members who had made notifications of actions regarding steel products to this Committee to restrain
themselves from resorting to such measures.
127. The delegate of Korea expressed that Korea had the same serious concerns about these
measures and that they would like to echo the statement of Japan and also request the United States to
terminate its safeguard measures.  Korea also urged other WTO Members to terminate their measures
and to restrain from initiating this kind of measures.
128. The delegate of Malaysia mentioned that Malaysia was also concerned with the proliferation
of steel safeguard measures as a result of the steel safeguard measures undertaken by the United
States.  Malaysia was also strongly concerned with the application of Article 9.1 by the US in the steelsafeguard measures.  Malaysia urged the US to bring its safeguard measures into conformity with the
provisions of the Safeguards Agreement.
129. The delegate of China stated that China also echoed the other speakers on the issue of US
safeguard measures on steel products.  China had joined other Members in pursuing the case in the
WTO.  China also urged the US to withdraw the measures as soon as possible.
(gg) United States – Line Pipe
130. The Chairman noted that the US had made tw o notifications regarding its investigation on
line pipe, as set forth in documents G/SG/N/10/ USA/5/Rev.1/Suppl.1 and G/SG/N/11/USA/4/Suppl.1.G/SG/M/20
Page 19
131. There were no comments or questions regarding these notifications.
132. The Committee took note of the statements made.
133. The Chairman reminded Members that any questions concerning the notifications of actions
taken for which written responses were requested, had to be submitted to the Member concerned and
to the Secretariat no later than 18 November 2002.  Written answers had to be submitted to theSecretariat no later than 9 December 2002.
C. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF ACCESSION OF
THE PEOPLE'S REPUBLIC OF CHINA TO THE WORLD TRADE ORGANIZATION
134. The Chairman noted that paragraph 18 of the Protocol of Accession of the People's Republic
of China to the World Trade Organization provides that all subsidiary bodies, including this
Committee, "which have a mandate covering China's commitments under the WTO Agreement or
[the] Protocol shall, within one year after accession, review, as appropriate to their mandate, the
implementation by China of the WTO Agreement and of the related provisions of [the] Protocol."
China was to provide relevant information in adva nce of the review, including information specified
in Annex 1A to the Protocol.  China could also rais e issues relating to any reservations under Section
17 or to any other specific commitments made by other Members in the Protocol, in subsidiary bodies
which have a relevant mandate.  The Chairman further noted that the Committee must report the
results of the review promptly to the Council for Trade in Goods, and that review is to take place after
accession in each year for eight years, with a final review in year 10 or at an earlier date decided by
the General Council.  The Chairman stated that there were no procedures set out for the conduct of thetransitional review in the Protocol, except that China is to provide relevant information in advance of
the review.  In accordance with section IV.6 of Annex 1A to the Protocol, China was required to
notify the Committee of its implementation of its Regulation on Safeguards.
135. The Chairman noted that China had made a number of notifications, consistent with the
obligations of all Members under the Agreement.  China had made two legislative notifications,which can be found in documents G/SG/N/1/C HN/1 and G/SG/N/1/CHN/2.  China had also made
several notifications regarding safeguard action taken in respect of imports of steel.  These
notifications could be found in documents  G/SG/N/6/CHN/1, G/SG/N/7/CHN/1, and
G/SG/N/11/CHN/1.  China had also sent a fax on  24 October 2002 concerning the implementation of
its Regulation on Safeguards.
136. The Chairman stated that a number of Members had submitted questions in the context of the
transitional review, both in respect of China's legislative notification G/SG/N/1/CHN/2, and in respectof its notifications of safeguard action.  These questions can be found in documents G/SG/Q1/CHN/1,
G/SG/Q1/CHN/2, G/SG/Q1/CHN/3, G/SG/Q1/C HN/4, G/SG/Q1/CHN/6, and G/SG/Q2/CHN/1.
137. The representative of the United States asked whether China would be providing any written
replies to questions.
138. The representatives of the EC and Japan  suggested that China should respond to follow-up
questions at this meeting, and requested clarification in this regard.  The EC stated that written replies
to the questions would certainly be helpful.
139. The representative of China stated that his delegation would make a general presentation
regarding China's implementation of the Safeguards Agreement, and then provide oral responses to
TRM questions received in advance.  China would not provide written responses to questions raisedin the context of the TRM, since there was no requirement for written answers in China's Protocol of
Accession.  China would answer follow-up questions when China's legislative notificationG/SG/M/20
Page 20
G/SG/N/1/CHN/2 is formally reviewed by the Committee at the April 2003 meeting.  China was keen
not to duplicate the legislative review process that will take place at the April 2003 meeting.
140. The representative of China addressed the following statement to the Committee (see
document G/SG/W/192):
Thank you, Mr. Chairman.  Let me first take this opportunity to thank you and the
Secretariat for preparations and arrangement for this first review by the Committee on
Safeguards at today’s meeting pursuant to paragraph 18 of the Accession Protocol of
China.
Mr. Chairman, it is the consistent policy of the Chinese government to pursue and
uphold a fair and open trading policy. China’s accession to the WTO, despite the
enormous challenges it poses, is a genuine reflection of our strong quest in thisregard. We believe this review by the Committee is important and useful. It gives us
an opportunity to look into, and to exchan ge views on all the commitments that have
been made in accordance with the WTO Agreement on Safeguards during the process
of China’s WTO accession.
Mr. Chairman, in my statement today, I will focus on three aspects. The first is an
overview on China’s implementation of WTO Agreement on Safeguards since
China’s accession to the WTO. The second part will be responses to those questions
of common concern addressed to us by some Members prior to this meeting, and
lastly, Mr. Chairman, I would also like to raise China’s concerns with regard tosafeguard.
Regarding China’s implementation of WTO Agreement on Safeguards, Mr.
Chairman, in paragraph 154 of the Working Party Report on China’s Accession to the
WTO, China made the following commitment, “China would implement itsRegulations on Safeguards by which the future safeguard measures would be
regulated. The contents of this new regulation would be fully consistent with the
Agreement on Safeguards.” Based on this commitment and in accordance with
relevant provisions in the Law of the People’s Republic of China on Foreign Trade,
China formulated its Regulations on Safeguards, which was adopted by the State
Council on 31 October 2001. The regulation was promulgated by the State Council in
Decree No. 330 on 26 November 2001 and it went into effect on 1 January 2002.
Apart from this main dedicated regulati on, China also enacted two administrative
rules on safeguard. They are the Provisional Rules on Initiation of Safeguard
Investigation, and Provisional Rules on Hearing in Safeguard Investigation. Both of
them were promulgated by the Ministry of Foreign Trade and Economic Cooperation(“MOFTEC”) on 10 February 2002 and came into effect on 13 March 2002.
China initiated one case of safeguard investigation after accession, which is still in
process now. China Iron and Steel Association (“CISA”), together with five major
iron and steel companies in China, filed an application with the Ministry of ForeignTrade and Economic Cooperation (MOFTEC) on 19 April this year, requesting
safeguards investigation into import of certain steel products and application of
provisional safeguard measures.
Based on the preliminary determination made thereafter that there was evidence
proving that the import increase had caused serious injury and threat of serious injury
to the Chinese iron and steel industry, MOFTEC announced on 20 May 2002 toG/SG/M/20
Page 21
initiate a safeguard investigation into certain steel products, and that a provisional
safeguard measure against certain steel products would be effective from 24 May
2002. The provisional safeguard measure took the form of tariff rate quota and would
last 180 days. The safeguard investigating authorities will decide whether to apply a
final safeguard measure according to the investigation results.
Regarding these regulations, administrative rules and measures I mentioned above,
China has met its obligation to notify WTO and its Members.  China notified the
existence of the Regulations on Safeguards and the two administrative rules to the
WTO on 6 June 2002. Full text of the regulation itself in English was provided later
in a second notification on 27 August 2002. The two administrative rules are still in
the process of translation and the English texts will be provided once available.
On the safeguard measures regarding certain steel products, China also notified the
initiation of the safeguard investigation, pursuant to Article 12.1(a); application of the
provisional safeguard measure, pursuant to Article 12.4; and developing Member
exemption pursuant to Article 9, Footnote 2.
Mr. Chairman, prior to this meeting, questions were put forward by several Members
to us regarding China’s legislation on safeguard and its enforcement. I would like
now to respond to those which are of common concern to Members.
1. Function of various government authorities in safeguard investigations
Presently, three government agencies in China are involved in safeguard matters.
They are the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), the
State Economic and Trade Commission (SET C) and the Tariff Commission of the
State Council (TCSC).
According to the Regulations on Safeguards, MOFTEC is in charge of the
investigation and determination of increase of imports. If a definitive safeguard
measure takes the form of quantitative restriction, a decision shall be made and
published by MOFTEC as the foreign trade administrative authority. SETC is
responsible for investigation and determination of injury. TCSC is to decide whetherto increase tariff level as provisional or final safeguard measure, upon proposal made
by MOFTEC on the basis of the investig ation findings. The specific provision
governing the responsibility of TCSC is found in Article 24 of the Regulation.
According to the said Article, safeguard measures shall be limited to the extent
necessary to prevent or remedy serious injury and to facilitate the adjustment of thedomestic industry. The reason that MOFTEC  and TCSC decide upon different forms
of safeguard measures is to ensure the uniformity in administration of trade laws and
regulations, as required by Article 10 of GATT 1994. While MOFTEC is the
government agency to formulate and enforce administrative measures concerning
trade, TCSC is in charge of matters relating to formulation of customs tariffs.
Other than the above functions carried out by SETC and the Tariff Commission,
MOFTEC deals with the other issues related to safeguard, including consultation,
notifications, dispute settlement concerning safeguard measures and etc.
2. Implementation of Article 32 of the Regulations on Safeguards
Mr. Chairman, some Members are concerned that China may take the “corresponding
measures” under Article 32 of the Regulations on Safeguards. I would like to make itG/SG/M/20
Page 22
clear here that firstly, China has not yet applied Article 32 of the Regulations on
Safeguards and therefore has not taken any “corresponding measures”; secondly,
being a WTO Member, China will first resort to the dispute settlement provisions
provided in the Safeguard Agreement and the dispute settlement provisions under
Annex II of the WTO Agreement before taking the “corresponding measures”, if theother party is also a WTO Member; thirdly, if any rebalancing measures would be
taken, China will abide by the provisions of Article 8 of the Safeguard Agreement.
3. On issues related to “developing country Members”
Article 23 of the Regulations states that safeguard measures shall be applied to a
product irrespective of its origin. However, I would also like to make it clear here thatnothing prevents China from enforcing Article 9.1 of the Safeguard Agreement, that
is, to exclude those developing Members meeting specified conditions from the
application of the safeguard measures. In practice, developing Members meeting the
requirements of Article 9.1 of the Safeguard Agreement had been excluded from
China’s provisional measures on certain imported steel products, as has been notifiedto this Committee. To define and identify a developing Member, China will make
reference to regulations and practices of other WTO Members. In this regard, I would
also like to say that it is an indisputable fact that China itself is a developing country.
The European Communities and Canada recognized this fact and treated China as a
developing Member in their recent safeguard measures on certain imported steelproducts. I would like to take this opportunity to express our appreciation. In this
regard we are greatly concerned that the United States did not take a fair and
objective approach of treating China as a developing Member in its Section 201
investigations against certain imported steel products, despite the fact that China’s
developing country status has been recognized by each and every other WTOMember and consolidated by China’s WTO accession.
4. Implementation of Article 11 of the Safeguard Agreement
Some WTO Members hope that China would clarify that it will not implement the
“grey measures” prohibited under Article 11 of the Safeguard Agreement. I would
like to confirm here that China will abide by Article 11 of the Safeguard Agreement.However, I must bring Members’ attention to such a fact that some Members
imposed upon China what are exactly prohibited by Article 11 of the Safeguard
Agreement, by inserting paragraph 16 into China’s Protocol of Accession to WTO.
With that paragraph, voluntary export restraints on the part of China were provided
for as an alternative to product-specific safeguard measures.
Mr. Chairman, apart from my responses above to some common concerns to other
Members, I would also like to voice our great concerns over the resort to the
transitional product-specific safeguard mechanism under paragraph 16 of China’s
Protocol of Accession by an y other WTO member. The transitional product-specific
safeguard mechanism itself goes against the basic WTO principle of non-
discrimination, and China took note of the fact that many Members of the Working
Party on China’s Accession expressed that utmost restraints will be exercised in
having recourse to the said mechanism and that it will only be applied under very
special circumstances where other trade remedy measures are not effective. We hopethat other WTO Members will honor this understanding. Frequent recourse to this
mechanism of such nature can only damper China’s enthusiasm to take an active and
constructive role in the multilateral trading system.G/SG/M/20
Page 23
Mr. Chairman, China notes with concern that the substantive and procedural
requirements intended for due process and fair treatment to China’s exports are not
fully reflected in implementing legislations of some WTO members. We hope that
those substantive and procedural requirements for the imposition of product-specific
safeguard measures incorporated in China’s Accession Protocol, Working PartyReport, as well as the WTO Safeguard Agreement will be observed in conducting the
investigations concerned.
Thank you.
141. The representative of the United States thanked China for its presentation, and made the
following statement to the Committee:
The remedies authorized by the Agreement on Safeguards ("SGA") form an essential
part of the current rules-based international trading system.  Transparency,
predictability, and adherence to the rule-of-law are all critical to the WTO-consistent
application of these remedies, as well as to ensuring that they don't act as an
unjustifiable barrier to trade.  Hence, it is in all Members' interests to ensure that each
Member promptly and effectively implements its WTO obligations in this area.
Our joint goal in this transitional review mechanism should be to conduct a
thorough and meaningful review, both to highlight to China its successes, and to
identify areas where more work needs to be done.  As China has already begun toapply its safeguards law, it is important that it lay out its plan for bringing its
practices into better conformity with its WTO commitments where there are gaps.
We want to do our utmost to facilitate such a review and urge China to join in the
review in the spirit in which it is intended.  A key part of the review is for Members
to ask questions about areas of China's practices that they do not understand.  We andfive other Members posed such questions, and we thank China for the information
concerning its implementation of the SGA that it recently circulated to Members of
this Committee.
We recognize and applaud China's efforts to implement trade remedy laws
and regulations consistent with WTO requirements.  China has been prompt in
promulgating new regulations and implementing rules, with new regulations havinggone into effect on 1 January 2002, followed by two sets of provisional rules
implemented in March.  We are disappointed, though, by the delay in China's
notifying these regulations and rules – the safeguard regulations were not notified
until June (by name only in G/SG/N/1/CHN/ 1) and the text of the regulations not
until August (G/SG/N/1/CHN/2).  As indicated in the information China recentlyprovided to the Committee, China has not yet notified the text of its provisional
implementing rules on initiations and hearings (referred to in G/SG/N/1/CHN/1).
1
With regard to transparency, we urge both the Ministry of Foreign Trade and
Economic Cooperation (MOFTEC) and the State Economic and Trade Commission
(SETC) to intensify their efforts to make non-confidential information submitted
during safeguard proceedings available to interested parties and to the public.
Moreover, at both agencies, there appears to be little or no disclosure of their
respective analysis and decision-making process.  We hope China takes advantage of
                                                     
1 The United States reserves comment and the right to pose additional questions on the provisional
rules and the topics that they cover once China formally submits the text of the rules to the Committee.G/SG/M/20
Page 24
this early stage in its administration of its safeguards law to further develop
transparency in its proceedings.
We are encouraged that the notified regulations generally embrace the
principles of rule of law and due process.  However, the regulations provide littleelaboration of these principles.  In particular, China should identify the specific
statute or statutes that govern its safeguard actions and notify those laws to the
Committee.  China also should clarify the respective roles of Chinese Government
entities involved in China's safeguard regime – MOFTEC, SETC and the State
Council Tariff Commission – and the rules to which the latter is subject in rendering
final safeguard determinations.
China has made a deliberate effort to conform its regulations to the
provisions and requirements of the SGA.  The language in China's notified
regulations appears generally to follow that in the SGA, although there are certain
areas where key provisions are omitted or are worded in an ambiguous manner.  In
addition, China included certain provisions that do not appear in the SGA.  The mostprominent example is Article 32 of the notified regulations, which indicates that
China may take "corresponding" measures when another country "discriminatorily"
imposes safeguard measures on exports from China.  This provision appears to have
attracted widespread comment and expressions of concern.  In that regard, we note
that China indicated that it would first revert to dispute settlement if the other party isa WTO Member.  Under what circumstances would China then revert to application
of Article 32?  What outcome of dispute settlement would result in application of
Article 32?
We and other Members also have questions about such topics as:
• How confidential information is treated under Article 13 of the notified regulations so
that it complies with the provisions of Article 3.2 of the SGA;
• Whether increased tariffs and quotas are the only types of safeguards relief permitted
by Chinese law, and how they are treated by Articles 20 and 21 of the notified
regulations;
• Application of the injury factors outlined in Articles 8 and 11 of the notified
regulations;  and
• The terms and conditions governing the extension of a safeguard measure.
The questions we and other Members have posed attempt to seek clarification
and understanding of the issues noted above.  We are disappointed that China
apparently is not yet in a position to provide written answers to those questions.  Such
responses would have greatly facilitated the review during these meetings.  In order
to make the review useful to all, includin g China, we urge China to submit in a timely
manner written responses to the questions posed by the Members.
We also want to stress that the United States does not take issue with China's
use of safeguard remedies, so long as such actions comport with WTO rules.  We
look forward to continued cooperation with China, such as through technical
assistance exchanges, as it continues to develop its trade remedy regime.G/SG/M/20
Page 25
142. The representative of the EC thanked China for its statement, and asked China when its two
implementing regulations would be notified to th e Committee.  He also asked China to respond to
questions 1 and 4 in document G/SG/Q1/CHN/2.
143. The representative of Japan thanked China for the information it had provided in the context
of the TRM, and asked China to reply to quest ions I.2.1, I.7.1(a), I.7.2(a) , I.7.3, I.8.1(b), and I.10.1(b)
and (c) in document G/SG/Q1/CHN/3 regarding China's Regulation.
144. The Japanese delegate made the following statement regarding China's provisional safeguard
measures on imports of certain steel products:
The provisional safeguard measures, which China imposed last May on certain steel
products, are protectionist measures, whatever the background of such measures
might be.  Those measures could also trigger further developments to the chain
reactions by other Members that began with the safeguard measures by the UnitedStates.  Japan is strongly concerned about those measures.
Such serious concern prompted the Japanese Government to enter into two series of
consultations with the Chinese Government pursuant to Article 12.4 of the
Safeguards Agreement.  However, we have to point out that the explanations
provided by the Chinese Government regarding the WTO-consistency of thosemeasures were far from convincing.  Japan maintains its strong doubt about the
WTO-consistency of those safeguard measures.
Those provisional safeguard measures are scheduled to expire on 19 November.  If
China advances to definitive safeguard measures, then what has been feared becomes
a reality, which is the further proliferation of safeguard measures on steel productsaround the world.  This will lead to further obstruction of world trade in steel
products, and furthermore it will undermine the momentum for successful
negotiations towards further trade liberalization under the DDA.  I have to make it
clear that Japan cannot and will not overlook matters advancing into such serious
circumstances.
On behalf of the Japanese delegation, I would like to express my strong expectation
to the Chinese delegation that China takes such concerns into serious consideration
and that China makes a prudent decision on whether to advance into definitive
measures.
145. The representative of Japan asked China to reply to questions II.1.1, II.2.1, II.2.2, II.4.1,
II.7.1, II.8.1 and II.8.2 in document G/SG/Q2/CHN/1 regarding China's provisional safeguard
measures on imports of certain steel products.
146. The representative of Chinese Taipei thanked China for the information it had provided, and
welcomed the opportunity provided by the TRM to clarify certain issues with China.  He asked China
to respond to question 4 in document G/SG/Q1/CHN/4.
147. The delegate of Turkey thanked China for its efforts in responding to Members' questions,
and looked forward to receiving those answers in writing.
148. In response to Members' request for written responses, the representative of China reiterated
China's position that within the framework of the transitional review mechanism China is not obliged
to provide responses to Members' questions in writing, however, his statement may be circulated to
Members after the meeting.  He then responded to the additional questions identified by Members.G/SG/M/20
Page 26
Regarding Article 3 of the Regulation, he explained that the concept of "other organization" includes
those organisations (such as chambers of commerce, business associations, and trade unions) that do
not have legal personality, but which may nevertheless be interested in the investigation.  While such
"other organization" need not be a producer, it must be related to the relevant domestic industry.  He
also explained that rules governing the contents of  applications / petitions are contained in China's
implementing / administrative rules (not yet notified to the Committee).
149. Regarding the consistency of Article 8 of the Regulation with Article 4.2 of the Safeguards
Agreement, he asserted that the investigating aut hority was required to examine all factors having a
bearing on the state of the domestic industry.  The factors listed in Article 8 are non-exhaustive.
150. Regarding Article 9 of the Regulation, he indicated that there was no provision governing the
duration of China's safeguard investigations.  Nor was there any provision imposing a minimum
period before provisional measures may be applied.  This was because there are no such requirementsin the Safeguards Agreement.  However, investigations would be carried out in an expeditious
manner, and preliminary determinations would only be made after some form of investigation had
been carried out.  For example, all available domestic industry performance data had been studied
before China imposed provisional safeguard measures on imports of certain steel products.
151. Regarding Article 10, and the issue of like and directly competitive products, he referred to
China's notification of its provisional measures on  certain steel products (G /SG/N/7/CHN/1).  In that
case, factors such as physical characteristics, consumer perception, use and interchangeability were
considered.
152. Regarding Article 12, the Chinese delegate stated that the reference to "other interested
parties" included all natural and/or legal persons and "other organizations" that might have interests inthe investigation, such as consumer organizations and industrial users.  Furthermore, the phrase
"present views and supporting arguments" was consiste nt with Article 3 of the Safeguards Agreement,
which requires the investigating authority to provide opportunities for interested parties to respond to
the presentations of other parties.  By virtue of Article 17 of the administrative / implementing rules,
provision was made for a pre-hearing brief, a public hearing, and a post-hearing brief.
153. Regarding the meaning of the phrase "appropriate means" in paragraph 2 of Article 12, he
gave the example of an on-the-spot investigation.
154. Concerning the term "justifiable" in paragraph 2 of Article 13, he indicated that it could be
understood to mean warranted.  Furthermore, confidential information would not be made available to
parties other than the party that submitted it.  There was no mechanism like the US system of
administrative protective orders.  Summaries of confidential information had to be made available to
other interested parties, and had to be meaningful to allow other interested parties to understand thesubstance of the confidential information.  If a request for confidential treatment were rejected, the
relevant party could withdraw the relevant informa tion from the record, and that information would be
disregarded by the investigating authority in making its determination.
155. Regarding Article 14, he confirmed that that provision was intended to implement Articles 3.1
and 4.2(c) of the Safeguards Agreement.  Article 14 requires the Chinese investigating authority topublish a report setting forth its findings and reasoned conclusions reached on all pertinent issues of
fact and law.
156. Concerning Articles 15 and 16, he asserted that in practice the investigating authority's
published determination would include a recommendation for relief.G/SG/M/20
Page 27
157. Regarding Article 20, he indicated that other types of safeguard measures would include tariff
quotas, as was the case in respect of the provisional measures on imports of certain steel products.
158. Concerning Article 21, he indicated that different authorities were responsible for different
types of safeguard measures in order to maintain uniformity in the administration of the relevant law.
159. With respect to Article 22, he indicated that in Chinese the term "country" implies
sovereignty, whereas the term "region" does not.  Safeguard measures may need to be imposed on
entities that are not "countries", such as separate customs territories and customs unions.  Regarding
quota allocation in the absence of a negotiated settlement, he stated that China would allocate quotas
on the basis of Article 5 of the Safeguards Agreement.
160. Regarding Article 24, he stated that a translation error had been identified.  The correct
translation should read "[s]afeguard measures shall be limited to the extent necessary to prevent or
remedy serious injury and to facilitate the adjustment of the domestic industry".
161. Regarding Article 27, he stated that the duration of provisional measures, and any extension
thereof, would be counted as part of the duration of the final measure.  Although there was no explicit
rule to this effect, the relevant provisions of th e Safeguards Agreement would be adhered to.  He also
stated that the notification and consultation obligations provided for in Articles 8 and 12 of the
Safeguards Agreement would be applied in respect of the possible extension of safeguard measures.
162. Concerning Japan's questions on China's provisional safeguard measure on imports of certain
steel products, he confirmed that imports from  Kazakhstan, Ukraine and Belarus were excluded
because China already imposed restrictions on steel from those countries.  The quota for those three
countries was established on the same basis as the level of the tariff quota for WTO Members, i.e., on
the basis of the volume of imports for the last three representative years.  Such exclusions were notinconsistent with the principle of parallelism.  Regarding the question of critical circumstances, he
referred Japan to page 4 of China's notification (G/SG/N/7/CHN/1).  Since China was the third largest
importer of steel in the world, trade diversion to China would be imminent following the imposition
of safeguard measures by the EC and US.  Regarding the question of unforeseen developments, he
referred Japan to Article XIX:1(a) of the GATT 1994, whereby unforeseen developments and GATTobligations were set as parallel conditions for the imposition of safeguard measures.  There was
therefore no need to separately identify the effects caused by those two factors.  He indicated that he
was not in a position to respond to Japan's detailed questions regarding data and statistics, but noted
that those questions had been addressed in the c ontext of two rounds of bilateral consultations.  He
stated that the concerns raised by Japan in the context of those consultations would be given serious
consideration when making a final determination in the steel investigation.
163. The representative of the European Communities thanked China for their detailed replies, and
asked for clarification as to when China expected to notify its administrative / implementing rules to
the WTO.  He stated that the EC was particularly  keen to have access to China's rules regarding
exporters' participation in hearings.  The EC also asked whether there was a mandatory deadline for
completion of China's steel investigation and, if so, the legal basis for that deadline.
164. The delegate of Japan thanked China for its answers to questions, particularly those
concerning China's Safeguards Regulation.  Regarding the questions on the steel investigation, he
noted that most of China's answers were the same as  had been provided in bilateral consultations, and
were therefore unconvincing.
165. The representative of China stated that the translation of its administrative / implementing
rules had been accelerated, and the relevant notification would be made to the WTO by the end of
2002.  He stated that there was no mandatory deadline for the investigation of the provisionalG/SG/M/20
Page 28
measures on steel, but it had been decided that they would expire after 180 days.  Accordingly, the
final determination would be made before expiry of the provisional measures.
166. China regretted that not all questions / issues could be addressed at this TRM session.  In
particular issues regarding the final determination on steel, which had not yet been made.  Rather than
making Members wait until the 2003 TRM, China expressed its willingness to consult bilaterally withMembers on any safeguard issues of interest to them.
167. The representative of the United States thanked China for its extensive replies to questions,
and wanted to respond to two concerns raised by China.  First, he indicated that he did not wish to
respond in detail to the issue of Article 9.1 and the exclusion of developing country Members since
that issue was currently subject to dispute settlement proceedings.  However, the US had responded to
a question from China on this issue at the last regular meeting of the Committee, as reflected in para.
103 of the minutes for that meeting (G/SG/M/19).  Second, he thanked China for expressing itsconcerns regarding the transitional product-specific safeguard mechanism.  That mechanism was
agreed to by China and all Members by virtue of Article 16 of the Protocol of Accession, and the US
had followed the procedures set forth in the prot ocol and the Working Party Report in implementing
this mechanism under US law.  He noted that while China did not identify any particular Members
with respect to its concerns, the US does ha ve a current proceeding under the product-specific
safeguard mechanism, and recently made a request to China for consultations, and then notified that
request to this Committee.  The United States was looking forward to consultations with China on this
matter.
168. The representative of China stated that his dele gation looked forward to consultations with the
United States in the context of the transitional product-specific safeguard mechanism.
169. The Chairman noted that there were no guidelines for the Committee's report to the Council
for Trade in Goods.  He indicated that in several other bodies that had recently undertaken the
transition review, the Chairman had, acting on his own responsibility, prepared a brief, factual report,
with references to the documents concerned, and at taching the portion of the minutes of the meeting
which relate to the transition review.  He proposed that the Committee adopt the same format for itsreport.
170. The Committee adopted the Chairman's proposal for reporting to the Council for Trade in
Goods.
D. OUTSTANDING IMPLEMENTATION ISSUE  – TIRET  84
171. The Chairman recalled that, by virtue of paragraph 12 of the Ministerial Declaration of
14 November 2001 (WT/MIN(01)/DEC/1), and sect ion 13 of the Ministerial Decision on
Implementation-Related Issues and Concerns of 14 November 2001, outstanding implementation
issues "shall be addressed as a matter of priority" by the relevant WTO bodies.  A list of these issues
was compiled in document Job (01)/152/Rev.1.  Section 9 of that document set forth tiret 84, which
contained a proposed amendment to Article 9.1 of the Safeguards Agreement "so that safeguard
measures are not applied to imports from developing countries which individually account for lessthan 7 per cent of total imports and 15 per cent collectively".  This amendment was proposed by the
delegation of Colombia.  The Chairman also recalled that, in accordance with paragraph 12 of the
Ministerial Declaration, the Safeguards Committee must report to the Trade Negotiations Committee
on this issue "by the end of 2002 for appropriate action".
172. The Chairman offered the floor to Colombia to explain the basis for its proposed amendment.G/SG/M/20
Page 29
173. The delegate of Colombia clarified that a copy of the statement containing the proposal by
Colombia had been circulated to Members. She then proceeded to read the proposal, the text of which
is hereby reproduced:
"Background:  During the preparatory process for the Seattle Ministerial Conference,
Colombia submitted for consideration by Members a proposal to increase the existingpercentages indicated in Article 9 of the Agreement on Safeguards.  Then, in the run-
up to the Doha Ministerial Conference this proposal was fleshed out with the
suggestion that the figures of 3 per cent and 9 per cent in Article 9 in the SG
Agreement should be replaced by 7 per cent and 15 per cent respectively in the case
of safeguards applied by a developed country to a developing country.  This would
increase by 6 percentage points the special and differential treatment provided for the
developing world's trade, with the exception of emergency measures.  It should bepointed out that under this proposal the present limits in Article 9.1 would be retained
for cases in which a safeguard measure is applied by a developing country, and would
be increased in the case that the Member applying the measure was a developed
country.  This proposal is taken up in general lines in the implementation issues under
tiret 84 and has been referred to this Committee for study pursuant to the MinisterialDecision in paragraph 12 of the Doha Declar ation.  Pursuant to that Declaration, this
Committee is to report to the Trade Negotiations Committee on the results of its
analysis of this implementation-related proposal by the end of this year.
Taking this background into account, and with a view to promoting a broad debate on
this proposal, I shall now explain the reasons that prompted Colombia to proposeraising the figures in Article 9.1 of the Agreement on Safeguards.  I shall then go on
to identify the elements that were take n into account for specifically suggesting
particular figures for this amendment of Article 9.1 of the Agreement and conclude
by mentioning some other elements in addition to the percentage issue which we
believe could also be analysed in greater depth.
So, the reasons for the proposal:  Colombia believes that there are legitimate reasons
that may force a WTO Member to suspend its multilateral commitments as a result of
disorderly domestic market conditions.  I therefore wish to reiterate that we consider
the safeguard instrument to be both legitimate and important.  Under Article 19 of the
General Agreement, two conditions are required for imports into a specific market to
give rise to the application of a safeguard measure.  These requirements refer to the
quantity of imports and the conditions under which they are taking place.  As weunderstand it, the thinking behind this requirement is simply recognition of an
economic reality that the introduction of small quantities in the market cannot have
the power to modify conditions on that market and therefore cannot effect the
domestic industry.  However, there can be no question that the provision with which
we are concerned in Article 9.1 is a development of the principle of special anddifferential treatment and is aimed at maintaining access conditions for developing
countries in the event that an emergency measure is adopted.  Accordingly, the
increase in the figures set out in Article 9.1, as proposed by Colombia, would simply
have the result of ensuring that if the developing countries have penetrated a specific
market where a disorderly situation arises as a result of imports from developedcountries this circumstance will not punish the developing country's export industry,
in so far as their individual share does not exceed 7 per cent of total imports of the
product covered by the investigation.
Colombia has occasionally been excluded from the application of safeguard measures
because it has fallen within the limits established in Article 9.1, and that is why weG/SG/M/20
Page 30
attach great importance to this provision.  We clearly appreciate its benefits and are
therefore aware that increasing the imports' share margin will have real significance
as regards market access.
The recent rise in the use of safeguards and the negotiations on market access for
non-agricultural products are circumstances which we believe make it even moredesirable to analyse this proposal.  We should point out that, despite Colombia's small
share of the world export market, in recent years our exports have been at the
receiving end of safeguard measures.  This experience has shown us that there is what
might be called a "perverse incentive" in the multilateral rules, which favours the
application of safeguards for relatively short periods – less than 3 years – since,
pursuant to Article 8.3 of the Agreement on Safeguards, compensation is allowed
only after the third year that a measure is enforced.  Now, although in cases where themeasure is not the result of an increase in imports in absolute terms, or its application
is not consistent with the Agreement, the latter allows the suspension of some
concessions.  It is not easy to avail oneself of this provision especially in the case of
developing countries.
The alternative of the dispute settlement mechanism as a way of addressing the
negative effect of a safeguard measure may also present some drawbacks because, in
a way, the delay in obtaining a final decision, in most cases on appeal, implicitly
allows a grace period during which the domestic industry may be protected at
immense cost for the exporting firms which are displaced from a given market.  In
these circumstances, during the preparatory work for the Doha MinisterialConference, Colombia submitted the implementation proposal to which we have
referred and also suggested that negotiations be held on safeguards in order to address
these and other important issues, as well as to improve special and differential
treatment for developing countries.
I will now turn to elements of setting the limits in the proposal.  In the circumstances
described above, and in response to the question of what the limits should be for
excluding a developing country from the application of a safeguard measure, the
reference in Article 12.3 of the Agreement to "substantial interest" provides an
interesting element for this discussion.  Ac cording to the multilateral practice, it is
certainly recognised that a country has a substantial interest when its share of imports
is around 10 per cent.  Along these lines, any developed or developing Member
country with a share of less than 10 per cent would not be allowed to participate inconsultations under Article 12.3 of the SG Agreement, and this led us to consider a
share of 10 per cent as an implicit limit for a developing country share below which a
provision would be needed recognizing the marginal nature of imports at such levels
and, hence, ensuring that they be excluded from the application of any type of
measure.  In other words, the figure of 3 per cent could be appropriate for tradeamong developing countries, but in the case of access to developed country markets it
would be more logical to raise it to a figure of around 10 per cent as the limit below
which imports would not be subject to safeguard measures.
To conclude, one or two other issues which will be analysed in connection with
implementation of Article 9.1.  We should also like to draw Member's attention to thefact that there are other elements concerning implementation of Article 9.1 that could
be the subject of an interpretive decision within the meaning of Article IX of the
Agreement establishing the WTO, such as the definition of the time-period to be used
for calculating developing countries' shares and also the methodology to be used for
calculating the limits in the abovementioned Article."G/SG/M/20
Page 31
174. The delegate of Brazil stressed the importance of expediting the discussion of this issue in
order that the deadline contained in paragraph 12 of the Doha Declaration would be met.
175. The delegate of the United States made some  preliminary comments and formulated some
questions regarding Colombia's proposal.  First, he mentioned that in terms of the mandate of the
Committee the United States noted that much of Colombia's proposal goes beyond the objective oftiret 84.  As an example, the United States noted that the last paragraph of the proposal raised a
number of issues that seemed to go far beyond tiret 84.  The United States also noted that the proposal
itself drew a distinction between developed and developing country importing Members that was not
in Article 9 or in tiret 84.  Therefore, the United States questioned what was the basis for that
distinction and why this proposal should not apply to  developing country importing countries as well.
176. The representative of Venezuela stated that the ideas contained in Colombia's proposal were a
good point of departure for clarifying norms and disciplines in the Agreement, especially the
development and application of special and differential treatment under Article 9.1, which seeks to
maintain good access conditions for developing countries when safeguard measures are adopted.  The
delegation of Venezuela believed that the proposal from Colombia was a significant and timely
contribution to the maintenance of market access conditions for developing countries at a time when
there appeared to be a significant increase in the use of safeguard measures.
177. The delegate of the European Communities noted that this was an issue of considerable
practical importance as experience had shown that Article 9 was often applied when safeguard
measures were imposed.  It was clear to the European Communities that Colombia's proposal would
substantially alter Article 9 since it more than doubled the de minimis  threshold for mandatory
exemption of individual developing country imports.
178. The European Communities brought to the atten tion of the Committee three main concerns of
that delegation.  The first one was that Colombia's proposal would result in a substantive extension of
a narrow exception to the general principle of erga omnes  application of safeguard measures.
Secondly, the exclusion of a substantial portion of imports from measures – according to the proposal
up to 15 per cent, which referred to imports which might be causing serious injury – could diminishthe efficiency of the instrument.  Finally, and most importantly, the European Communities
understood the proposal to apply only to safeguard measures applied by developed WTO Members.
Developing countries using the instrument would enjoy lower thresholds.  In the view of the European
Communities, this would be a paradigm change unknown to current rules on trade defence
instruments in general as it would create two different categories of users of trade defence
instruments. The European Communities expressed serious concerns about this approach and did not
believe that this was a desirable way to move forward.
179. The European Communities noted that the statemen t of Colombia also referred to interesting
issues such as the determination of the reference period for thresholds under Article 9.1.  The
European Communities believed that there was scope for further fruitful exchange of views on this
and expressed that it would be open to engage on a discussion of such issues.
180. The delegate of Canada formulated two preliminary questions, pending further review of
Colombia's proposal.  The first one referred to the initial proposal by Colombia which suggested
changing the figures in Article 9.1 from 3 and 9 per cent and raising them to 7 and 15 per cent
respectively.  However, in the paper Colombia was noting a figure of 10 per cent.  Therefore, Canada
asked what the current position of Colombia was with regards to the figures that were currently in
Article 9.1, and whether the change in figures const ituted a revision of Colombia's original proposal.
181. In its second question Canada noted that one of the rationales put forward by Colombia for
the proposal to increase the levels set out in Article 9.1 was based upon delays associated with takingG/SG/M/20
Page 32
a case to dispute settlement.  Canada requested Colombia to expand upon this idea as it seemed that
Colombia was pointing to issues relating to the implementation of Article 9.1, and not the actual
levels contained in that provision.
182. The delegate of Egypt reserved the right to comment at a later stage.
183. The delegate of Japan commented that the figure proposed by Colombia was too big in the
sense that it would diminish the effectiveness of the safeguard measure, and the spirit of the
Agreement itself.  Secondly, the delegate of Japan expressed doubts as to whether Colombia's
proposal might not lead to a two-tiered system within the Agreement.  Japan understood the
obligation of special and differential (S&D) treatment, or the existence and spirit of  S&D treatment,
and was willing to do the maximum possible to obtai n rules for  S&D treatment.  However, Japan was
of the view that respecting S&D treatment and having a two-tiered system in the Rules area, including
safeguards, was a different story.  Japan expressed doubts as to whether this course of action wouldlead to a two-tiered system in the Agreement, meaning a distinction between developing countries and
developed countries.
184. The delegate of China expressed his willingness to give a positive consideration to
Colombia's proposal.
185. The delegate of Malaysia expressed the view that since the issue was one of implementation it
was certainly incumbent upon the Committee to discuss the proposal made by Colombia.  The
Committee had a mandate to report back to the TNC and certainly it would be useful to continue the
discussion on Colombia's proposal.  Malaysia noted that Colombia had raised a number of points to
support its proposal regarding market access of developing countries in the face of safeguard
measures and the difficulty of recourse to dispute settlement by developing countries in the event ofdisputes.  Malaysia believed that Colombia had mentioned a number of points that would be useful for
further discussion and therefore that it would be useful for the Committee to continue its discussions
at the next meeting or in an informal session.
186. The delegate of the United States, in light of the intervention by Malaysia, questioned
whether or not the proposal conforms with the mandate for the Committee as decided in the Doha
Ministerial Conference.  To the United States it seemed that Colombia's proposal incorporated
elements which reached far beyond what the Ministers contemplated when they approved the
implementation process.  Therefore, as a preliminary matter, the Committee should make a
determination as to whether or not this particular proposal fits within the mandate.  The United States
was willing to engage on informal consultations on that point.
187. The Chairman proposed to organize informal consultations on all issues raised regarding
Colombia's proposal before the next regular meeting of the Committee, where all issues regarding
consultations would be taken up including those raised by the United States.  He also proposed that, in
order to facilitate the exchange of views, Members could submit their views and questions on this
issue in writing.
188. The delegate of Colombia answered some of the questions that had been raised by Members.
Regarding whether the proposal was the same as that  which was in the list of outstanding issues on
implementation, in Colombia's view this was the proposal made for informal consultations. Colombia
believed that S&D treatment was fundamental to market access and therefore attached great
importance to raising the figures in Article 9.
189. Regarding the creation of two systems or a two- tiered system of obligations, Colombia was of
the view that this situation already exists as Ar ticle 9.1 establishes two types of treatment depending
upon whether the country is developing or not.  Colombia thought that there was a need to recogniseG/SG/M/20
Page 33
greater space for developing countries and this wo uld not in principle change anything but would
increase S&D treatment.
190. Regarding the 10 per cent threshold, Colombia remarked that it had not changed its proposal.
Colombia had simply referred to the idea that around 10 per cent constitutes a substantial trade
interest in this Organization.  Colombia hoped that  the discussion would be substantially broadened in
the proposed informal consultations.
191. The Committee decided to hold informal consul tations on the implementation issue raised by
Colombia regarding Article 9 special and differential treatment.
E. ISSUES REGARDING THE APPLICATION OF ARTICLE 9.1
192. The Chairman noted that this agenda item had been included in the agenda at the request of
Colombia.
193. The representative of Colombia stated that Colombia had great interest in working on the
issues of implementation of Article 9.1 of the Agreement on Safeguards.  According to the
representative of Colombia, certain matters regarding the application of Article 9.1, which was a
special and differential treatment provision, deserved the attention of this Committee, among them the
period to be taken into account for the calculation,  the methodology to be employed for implementing
Article 9.1 and treatment in terms of provisional measures.  The representative of Colombia stressed
that the Members of the Committee should find the best way to approach certain specific points
within this provision.  Colombia intended to consult with other Members on these matters and, in
accordance with the decisions taken later at the April meeting, to return to this matter depending upon
the thoughts expressed and conclusions made.
194. The representative of Thailand noted that at the last informal consultations of the Committee
on Safeguards, the Thai delegation had taken the floor to pledge support to the amendment proposed
by Colombia to Article 9.1 of the Agreement and reiterated Thailand's full support to Colombia on its
proposal.  The representative of Thailand also empha sized the importance of Members adhering to the
mandated deadline for concluding negotiations and called on Members to be more flexible and toengage constructively in the ongoing discussion which was one of great significance to developing
countries.  The representative of Thailand noted that in a parallel document, Thailand had expressed
concerns over a number of issues that were related to the implementation of Article 9.1 of the
Safeguards Agreement.  In Thailand's view, the arguments for those related elements were legitimate
in the face of the recent increased use of safeguard measures by developed country Members.
According to the representative of Thailand, in a number of instances several developing countries,
Thailand included, could have benefited from the provision of Article 9.1 had an appropriate time-period for determining de minimis  shares of imports been utilized.  In the context of that Article, the
benefits due to developing country Members would be nullified if imprudent or arbitrary selection of
the time-period were used in making a determination of de minimis  shares of imports.  In this regard,
the representative of Thailand echoed the concern raised by Colombia on this issue.  However,
because of the time constraints the representative of Thailand refrained from making any attempt atthis stage to introduce any further these, as well as other, issues that were of concern to Thailand since
he did not want to create complications which could slow down the pace of the discussions.  The
representative of Thailand did not, however, rule out the possibility of coming back to all those issues
should an appropriate opportunity arise in the future.  In concluding, the representative of Thailand
reiterated the importance of respecting the mandated deadline, which was very critical to thecredibility of this Organization as well as the other rounds of the negotiations.
195. The representative of Chile stated that if they were correct in understanding that the
Colombian proposal called for the examination of these matters in terms of how the Members appliedG/SG/M/20
Page 34
Article 9.1, they did want to support it.  The representative of Chile considered that because of the
large number of safeguard measures Members were applying, it would be interesting to talk about
implementation.  In the view of the representative of Chile, Article 13 of the Safeguards Agreement
incorporated the idea of monitoring the general application of the Agreement and therefore Chile very
much supported this initiative of Colombia.
196. The representative of the European Communities asserted that the EC delegation also
welcomed that this point was on the agenda of the meeting.  The representative of the EC asserted that
the EC was always in favour of discussing issu es concerning the application of the Safeguard
Agreement.  With regard to the issue of the reference period for determining whether or not de
minimis  thresholds had been reached the representative of the EC stated that in their own safeguard
investigation, the EC had used the calendar year pr ior to the initiation of the investigation, which was
incidentally also the most recent 12-month period for which data was available.  The representative ofthe EC nevertheless acknowledged that there were other reasonable approaches and referred to the
work done in the area of anti-dumping where, with regard to the issue of thresholds under Article 5.8
of the Anti-Dumping Agreement, considerable progress had already been made.  The representative of
the EC also reiterated that the EC had proposed in that context that Members could choose one of
several methods provided that such methodologies were consistently used or that the Memberconcerned explained why such a consistent use was not appropriate in a particular case.
197. The representative of Brazil expressed support for Colombia's inclusion of this important
issue in the discussions.  According to Brazil, the issues that had been raised concerning Article 9.1
were very important and Members would benefit from these discussions.  On the question of the
methodology, the representative of Brazil stated that the calculations under Article 9.1 should relateonly to the volume of trade as it was already in this Article and not to other elements such as general
economic indicators.
198. The representative of Turkey expressed that Turkey shared Colombia's concerns.  The
representative of Turkey stated that although they shared the concerns raised about the calculation of
threshold levels, they also had their own concerns regarding another dimension of Article 9.1, i.e., themethod by which investigating authorities identified developing countries.  The representative of
Turkey drew the attention of the Members to the fact that an increasing number of WTO Members
had been applying their national criteria, as opposed to the WTO criteria, in identifying developing
countries for purposes of Article 9.1.  The representative of Turkey asserted that Turkey faced this
unfair determination by some WTO Members.  The representative of Turkey noted that  investigating
authorities attempted to rationalize their decision either on the basis of their own GSP scheme, the
preparation of which was unknown, or on the basis of membership to other internationalorganizations, which could be a political decision.  The representative of Turkey added that during
this meeting Members of the Committee had heard that some Members based their decision in this
respect on a comparison of the GDP of the countries subject to the investigation with the investigating
Member's own GDP. According to Turkey, while applying Article 9.1, investigating WTO Members
should take into account the status of other countries under the WTO framework.
199. The representative of Colombia suggested that the Committee be extremely judicious about
the coverage of the discussion on this matter and the extent of it.  The representative of Colombia
noted the concerns of many Members about some of the points in Article 9.1 and yet asserted that the
Members should think about the appropriateness of this debate, which covered certain matters of a
more transversal nature.
200. The representative of  Malaysia expressed support for Colombia’s proposal and considered
that it would be good to explore further on these issues and come back to them at the April meeting.
The representative of Malaysia noted that there were many systemic issues of interest, particularly toG/SG/M/20
Page 35
developing countries, and that Malaysia would welcome a discussion on these issues at the next
meeting of the Safeguards Committee.
201. The representative of New Zealand stated that they supported any discussion on rules or on
procedures that should be followed under Article 9.1 and the like.  However, as to the proliferation of
safeguard measures, the representative of New Zealand noted that out of the total 34 notificationsdiscussed in the Committee's meeting, 4 had been made by developed countries and the rest by
developing countries.  In the view of the representative of New Zealand this phenomenon also needed
to be addressed.
202. The representative of China stated that China associated itself with the developing country
Members in this discussion regarding the implementation of Article 9.1, which was very important
and essential for developing countries and which was also inconsistent with the spirit of the Doha
Declaration.  According to the representative of Ch ina, this issue needed to be taken into serious
consideration in order to make safeguards friendlier to developing country Members.
203. The Chairman noted that this issue, and in particular the issue regarding the period for
calculation of the de minimis  levels under Article 9.1, conveyed a certain interest for Members.  The
Chairman therefore proposed to maintain the item on the agenda of the next regular meeting.
204. The Committee so decided.
F. OTHER BUSINESS
1. Matters raised by the United States
205. The representative of the United States recalled that at the 4 April 2002 Safeguard Committee
meeting the US had asked Ecuador about the status of its provisional measure on matches, of which
the last notification had been made in November 2000, and that the representative from Ecuador had
stated that they would check back with their capital on the status of this measure.  The representative
of the US noted that 10 days before the meeting Ecuador had submitted to the Committee a
notification – G/SG/N/10/ECU/1 – stating that it had imposed a definitive measure on matches
effective on 24 October 2001.  The representative of the US expressed concern and asked for anexplanation with respect to the delay of one year in providing the notification.  The representative of
the US also noted that there had not appeared to be any notification with respect to the status of
developing country Members under Article 9.1.
206. The representative of Ecuador stated that he took note of these concerns raised by the US and
would pass these questions on to their capital in order to obtain an appropriate response.  The
representative of  Ecuador also stated that they would reply to the US questions as soon as possible,
and pass these responses both to the US delegation and to the Committee.
207. The representative of the United States also noted that Costa Rica had imposed a provisional
measure on rice in March 2002 and that the US delegation had expressed at the April 2002 meeting of
the Committee the concern of the US exporters and had submitted and filed a lengthy set of questions
to Costa Rica on that provisional measure, on which no response had been received yet.  The
representative of the US stated that since the US had not seen any new notifications on this issue itwas their understanding that the provisional measure had expired in September 2002, but that they
would like clarification about whether that was the case.  The representative of the US also wanted
clarification as to whether the investigation, with respect to imposing a definitive measure, had also
been terminated.  Finally, the representative of the US mentioned that Costa Rica was perhaps
imposing certain increased phytosanitary and quality inspection fees on imported rice and that therewas concern in the US about whether that was a hidden duty on rice imports.  The representative ofG/SG/M/20
Page 36
the US asked whether there was any further information on that or whether there had been any
notification.
208. The representative of Costa Rica responded that by virtue of the legislation dated
23 September 2002 and Act No. 203 of the Ministry of  Industry and Trade, provisional safeguards on
the import of rice in grains and in bulk that had been eliminated as of 27 September 2002.  Therepresentative of Costa Rica stated that they had been told by their capital that the investigation itself
would be completed on 23 November 2002.  The representative of Costa Rica also stated that Costa
Rica would notify the Committee about the elimination of the provisional measure and the completion
of the investigation.  Regarding the last US questions, the representative of Costa Rica mentioned that
they would take note of these questions and answer them in the future.
2. Matters raised by the Chairman
209. The Chairman raised two issues under other business.  The Chairman stated that both issues
related to the letters that he had received the week preceeding the meeting.  The first letter was from
H.E. Ambassador Smith, the Chairman of the Special Session of the Committee on Trade and
Development.  The Chairman mentioned that Amba ssador Smith had informed the Chairman that the
Special Session was to meet on Wednesday, October 23rd from 1 to 3pm to analyse and examine a
proposal regarding special and differential treatment w ith respect to safeguards that had been raised in
that body.  Ambassador Smith also had requested information on any discussions or other
developments relating to special and differential treatment that would take place in the Committee, in
the form of a report before 30 November 2002.  The Chairman reminded the Members that a similar
request had been made earlier, to which the Chair had responded on his own responsibility by letter
on 18 January 2002.  The Chairman stated that in response to this latest request, he intended to send aletter to the Chairman, reporting that the Committee had discussed tiret 84, which could perhaps be
characterised as an issue relating to special and diff erential treatment.  The Chairman also mentioned
that copies of his response would be provided to Members.
210. The Chairman stated that the second letter was from H.E. Ambassador Stefan Johannesson,
Chairman of the Working Group on Trade and Transf er of Technology.  Ambassador Johannesson's
letter had noted that the Working Group was examining the relationship between trade and transfer of
technology, as well as any possible recommendations on steps that might be taken within the mandate
of the WTO to increase flows of technology to developing countries.  The Chairman mentioned that
the Working Group decided at a meeting held on 10 October 2002 to request information from other
WTO bodies regarding any work that they might have done in this regard, or that they were planning
to carry out in relation to trade and transfer of technology.  The Chairman noted that Ambassador
Johannesson had requested that the Chairman inform  him of any discussion, s ubmissions and/or other
developments relating to trade and technology transfer that might have taken place in the Committee,
by 20 November 2002, in order that he could report the response at the meeting of the Working Group
on 28 November 2002.  The Chairman mentioned that in response to this request, he intended to send
a letter to the Chairman, informing him that there had been no discussions, submissions, or other
developments in the Committee relating to trad e and technology transfer.  The Chairman also
mentioned that copies of his response would be provided to Members.
211. The Committee took note of the statements made.
G. ANNUAL REPORT TO THE COUNCIL FOR TRADE IN GOODS
212. The Committee adopted its annual report to the Council for Trade in Goods for 2002 (see
document G/L/583).G/SG/M/20
Page 37
H. DATE OF NEXT REGULAR MEETING
213. The Chairman recalled that regular meetings norma lly 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 Subsides and Countervailing Measures. The Committee on Anti-Dumping
Practices and subsidiary bodies would meet for the whole week commencing 29 April 2003, and the
Committee on Subsidies and Countervailing Measures would meet on 8-9 May 2003.  Accordingly,he suggested that the Safeguards Committee meet on Monday, 28 April 2003.
214. The Committee so agreed.
__________