ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(74)229
Vol.1974/0044

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(74)229final
Brussels,20February1974
Proposalfora
REGULATION (EEC-)C?THECOUNCIL
subjectingtoauthorization theimportationinto
ItalyoftaperecordersfromTaiwan
(submittedtotheCouncilbytheCommission)
COM(74)229final

EXPLANATORY MEMORANDUM
1»Duringtheyears1969-1972thesituationonthemarketintape
recordersinItalysteadilyworsened.Importsfromthirdcountries
increasedgreatlyandaccountedforanever-growing shareofinternal
consumption (1969:16$,1972:54%).AccordingtoItaliansources
thelargeincreaseinimportsfromthirdcountriescamealmostentirely
fromJapan(importsfromJapan:1969:89000machines,1972:429000
machines).
Ontheotherhand,accordingtoinformationsupplied "bytheItalian
Governmentatthetimetojustifytheuseofprotectivemeasures,the
averagepriceofportabletaperecordersimportedintoItalyhadfallen
to4918lireeachtThelowpricesinquestionwereconsideredto"be
animportantfactorwhendeterminingthedamage.
According .tothesamesourceItalianproductionduringthesameperiod
decreasedfrom380000machinesin1969to136000in1972.
Inordertoeliminatethesubstantial damagethattheItalianindustry
wouldhavesufferedfromthisdevelopmenttheCommissionsetupa
Communitysupervisory systemandtheCommunity,atthesametime,adopted
aprotectivemeasurewitheffectfrom1April1973bysubjectingimports
oftaperecordersintoItaly,toaquotaergaomnes.Importswerethus
limitedto225000machinesfortheperiodfrom1Aprili973to31December
1973corresponding toanannualimportlevelof300000machines.
CommissionRegulation(EEC)No1600/73of18April1973
(OJNoL121/73,8May1973)andCouncilRegulation(E3C)No162^73of
18June1973(OJNoL164/73,21June1973).

2.Consciousofthefaotthattheprocessofindustrialreorganization in
Italy(where,accordingtoinformationsuppliedbytheItalianGovernment,
productionhadmeanwhilerecoveredaiidreachedalevelofapproximately
200000machinesin1973^)shouldnotbeendangeredbyanuncontrolled
influxofimportsafter31Deoember1973whentheabovementioned protective
measuresweretoexpire,thedepartmentsoftheCommission'heldseveral
meetingswithintheframeworkoftheprocedureforapplyingArticleXIXof
theGATT,attherequestoftheJapaneseGovernment(principalsupplier)and
inthepresenceofdelegatesfromtheItalianMinistriesinquestion.
Atfurthermeetingsheldon20/22and28and29November1973attherequest
oftheJapaneseGovernmentandatwhichtheItalianauthorities werealso
present,Japanexpresseditsintentionofvoluntarilylimitingitsexports
2oftaperecorderstoItalytoalevelof330000machines•
Forthisreason,inparticular,theCommissiondecidedthattheintroduction
ofn«wmeasuresbasedonArticleXIXoftheGATTafter31December1973
wouldnotbejustifiable#
Ontheotherhand,theaverageJapanesepriceonimportation-considered
tobeaparticularly disturbingfeaturein1972-hadmeanwhilereacheda
levelof11000lirepermachine#
3#However,havingstatedatthediscussionsattheendofNovember1973that
accordingtostatisticalinformationprovidedbyItalyforthefirstsix
monthsof1973,anewsupplier'fromtheParEastwastakingitsplacebeside
Japan,namely,Taiwan(33728machinesforthefirstsixmonthsof1973)»
theCommissionsetitselfthetaskofexaminingtheneedforfurther -
"^OnthebasisofinformationreceivedbytheCommissioninJanuary1974
fromtheANIE(theAssociationoftheItalianelectronicsindustry)
productionin1973was380000machines#
^ileSEC(73)4820final,circulatedbytheCouncilass/407/73(COMER2^$)#

protectivemeasuresasregardsthatsupplier »
4.On12December1973theItalianGovernment,notbeingpreparedtoagree
withtheabovementioned conclusions,appliedtotheCommissionforthe
continuation in1974oftheimportauthorization systemergaomneslimited
to300000machines.TheCommissionrejectedthisapplication onthe
_.x2basisoftheaboveconsiderations (Decisionof19December1973)•On
20December1973ItalyreferredthisDecisiontotheCouncil.
On27December1973theItalianRepresentative informedtheCommissionthat
from1January1974»thatistosay,aftertheexpiryofprotectivemeasures
theninforce,itsGovernmentwouldsubjecttoauthorization theimportation
oftaperecordersfromthirdcountriesinthesamequantitative limitsas
previouslylaiddownaridthatthisprotectivemeasurewouldbetakenpursuant
toArticle12ofRegulationNo1025/70"aridArticle9ofRegulation109/70»
TheCommissionconfirmeditsrejectionoftheItalianrequestbyaDecision
cf7January1974^*ItalyreferredthisDecisiontotheCouncilon
12January1974«
InformationprovidedbyItalyatthetimeconcerningotherParEastern
countriesonlytookaccount,infact,of6544machinesfromHongKong,
nonefromSingaporeandgavenodetailedinformation asregardsKorea.
Itshouldbenoted,moreover,thattheItalianGovernmenthadnot
suppliedfiguresconcerningimportsfromthirdcountriesthatshouldhave
beensentregularlytotheCommissionpursuanttoArticle9ofRegulation
Ho1025/70,bearinginmindtheCommunitysupervisoryproceduresetup
underRegulationNo106o/73»ByvirtueoftheseprovisionseveryMember
Stateisobligedtoforwardwithinthefirsttendaysofeachmonth,the.
quantitiesandamountscorresponding totheimportdocumentsissuedduring
thepreceedingmonth,andtheimportsforthepreviousmonth.,:
^Doc.-C0M(73)2225circulatedbytheCouncilasS/2/74(C0MERl).
■^Doc.C0M(73)2251circulatedbytheCouncilass/84/74(C0MER$5)*:

-4–
5»InitsappealagainsttheCommissionDecisionstheItalianGovernment
hasemphasizedthefactthatthedamagewhichmightbecausedtothe
Italiantaperecorderindustrybytheabsenceofautonomousprotective
measuresergaomnesisduetoimportsnotonlyfromJapanbutalsofrom
othercountriesofsouth-eastAsiaeItalystatedthatduringthefirst
eightmonthsof1973»suchimportsfromTaiwan,inparticularwereas
follows"'':
mi
(January-August)
Ν value1232.
(January-August)
Ν Value
Total 47900071218994384335395891
FKG 650271157870 504261319925
Netherlands 987412135088 108 1111960024
Japan 1859172059932 2558831535866
Taiwan 42737167384a
SouthKorea 29000216907m
Singapore 17280285156
HongKong 696159.766
TotalSouthEastAsia95
ν*··729213
TotalforAsia 2818952J2SLm 255m1-EL866
(Japan+SouthEastAsia)
Doc.CouncilS/l2/74(COMER2).
2StatisticsobtainedbytheCommissionattheendofJanuary1974fromthe
relevantItalianMinistriesandrelatingtothefirsttenmonthsof1973.
(insteadofthefirsteightmonths)includeminorincreases(ofAnnexto
Doc.s/172/74(COMER17). *...

-5-
AsregardsBupplysourcesinAsiaotherthanJapan(allowingforJapan's
intentionoflimitingitsexportstoItalyaridnotforgettingthedevelopment
oftheothercountries)itshouldbestatedthatTaiwanhadundeniably -
increaseditsexportstoItalyveryrapidly;moreover,thepricesforthe
exportedgoodswereextremelylow,
6.Duringtheconsultation whichtookplaceattherequestoftheCommission
on21January1974withintheCommitteeprovidedforinArticle5ofRegulation
No1025/70tostudy,inparticular,theproblemcreatedbyimportsfrom
Taiwan,theItalianDelegationstatedthatthefigureof330000machines
foreseenbytheJapaneseauthorities wasconsiderably inexcessofthe
levelofimportswhichcouldbepermittedbytheItalianGovernmentfrom
thatcountry;moreover,importsoftaperecordersfromothercountriesof
SouthEastAsiaaddedtotheabovementioned wouldconstituteagenuinethreat
...ofsubstantial damagetotheindustryconcernedinItaly.TheItalian
representative alsoemphasizedthefactthatthemachinesareimportedat
particularly lowprices(averageimportprice:3910lirefromTaiwan,
7420lirefromSouthKorea,8730lirefromHongKong,16,500lirefrom
Singapore,11000lirefromJapan).ForthesereasonsItalybelievesthat
ameasureer,?aomnesisessential.Anyothertypeofmeasurewouldnot
ensuretheprotectionnecessaryfortheItalianindustry.
TheCommissionconsidersitadvisabletorecallthattheinformation supplied
bytheItalianGovernmentwasnotsufficiently oompleteorconsistentto
enableittoreachaconclusionconcerningthemarketintaperecordersin
Italy.Asregardsimports,Italyhasnotprovidedanyinformationwithin
theframeworkofthesupervisoryproceduressetupundertheCommunityplan
sinceApril1973.Theinformationprovided.otherwisethanwithinthe
abovementioned framework,isfortheperiodbefore31August1.973although
theproductinquestionhadbeensubjecttoquantitativerestrictions inItaly
onimportation.Ontheotherhand,bearinginmindthesupervisory
..procedure,informationrelatingbothtotheimportdocumentsandtogoods
actuallyimportedshouldhavebeenavailableforthemost.recentmonths.
Moreover,theItalianauthoritieswereonlyabletosupplyveryapproximate
estimatedfor,productionandconsumption,inparticular,in1973*Nordid
.information ,consideredbytheMemberStatestobeessential ,forthe
investigation ofsuchcasesandwhichisaskedforinthequestionnaire
relatingtotheinvestigation intodamageadoptedbytheCouncilon
4December1973(Doc.l/l20/73-COMER36),reachthedepartmentsofthe
Commission.

7.TakingaccountoftheinvitationmadebytheItalianGovernmentand
inordertoenableittouseadditionalmoreup-to-dateinformation about
thesituationanddevelopmentofthemarketintaperecordersinItaly
theCommissionobtainedfurtherevaluatingmaterialbycollaborating with
theItalianauthoritiesconcerned(MinisteriesofExternalTrade,Industry
andFinance)andwiththeANIE(thenationalassociationofelectronic
industries)(cf.AnnextodocumentS/l72/74(COMER27)).
Thenewmaterialenabledanestimatetobemade(overtenmonthsin1973)of
about400000machinesimportedintoItalyin1973fromthecountriesof
FarEastandSouthEastAsia»
Thedecreaseinimportsin1973oomparedwiththepreviousyear,dueto
theintroduction ofthelimitonimports,facilitated anappreciable
recoveryatthesametimeoftheItalianindustryconcerned,asprovedby
theproductionfiguresfor1973(source:ANIE):380000machinescompared
with136000producedin1972whentheimportsituationhadresultedin
theacknowledgement ofsubstantial damagetothatindustry.
Imports1973(January-October) _(units)
Taiwan .43737 •'
SouthKorea 30156
Singapore 17282'
HongKong 7461
TotalforSouth
.EastAsia 9o636 ■'i
Japan 195665
TotalforSouth
EastAsiaand ,
Japan 294301
SSSftSSSSSS ...
ImportsfromotherMemberStates(FRGandNetherlands):192'015*
Theestimateofapproximately 400000machinesfromAsiatakesinto.account
goodsimportedduringthelasttwomonthsof1973followingthedistribution
bytheItalianauthoritiesinNovemberofthefirstshare(150000units)of
thequota"of225000unitsthattheCommunityhadintroducedinApril,the
distributionofthesecondshare(75000)ofthequotawasplannedbythe
ItalianauthoritiesforFebruary1974)*

AmeasureergaomnesbasedonArticle ^XIXoftheGATTwould,inthe.
conditionsstated,nolonger "bejustifiable onthetermsoftheprovisions
oftheGeneralAgreement,
Indeed,thelevelofapproximately 400000machinesimportedintoItalyin
1973,(bearinginmindtheCommunityprotectionsystem)whichatthesame
timefacilitatedtherecoveryoftheItaliantaperecorderindustry,does
notconstitute .acaseofsubstantial damagegivinggroundsforfurther
recoursetotheclauseinArticleXIXoftheGATT.
8,TheCommission,however,isawarethatinthepresentstateofaffaire,
aslightincreaseoverthe1973importswouldbelikelytorenewtherisk
ofseriousdamagetotheindustryconcerned#
y
TheCommissionhasrefusedrecoursetothesafeguardmeasureergaomnes
(ArticleXIX)requestedagainbyItalyfor1974takingaccountnotonlyof
theaforementioned reasonsbutalsocfthefollowingfactors:
(a)QuantitieslikelytobeimportedfromJapan(principalsupplier)between
1Januaryand31December1974*allowingforthelimitof330000machines
thatthecountryhaspromisedtorespectj •..
(b)goodsimportedintoItalyfromAsiancountriesotherthanJapan,the
Commissionbelievesthatverystrictcontrolofimportsfromthosecountries
(otherthanTaiwan),whiohmightreachafigureofbetween50000and60000
machinesin1974>shouldfacilitatethemonthlycontroloftheflowofthese
imports(fromSingapore,SouthKoreaandHongKong)insuchawaythatany
problemslikelytoarisecouldbedealtwithimmediately ;moreoverthe
applicationofCommunityprocedurestotheseimports,enablingastudyto
bemadeofwhetherthepricesbeingchargedjustifyrecoursetotherules
onanti-dumping ,isanaddiiaonalcontrolfactorwithregardtosupplying
countries }
(c)theapplicationofrestrictivemeasurestoTaiwan.

9.Indeed,withregardtoTaiwan,thedevelopmentoftheimportationof
taperecordersintoItalyconstitutesathreatofseriousdamageboth
asregardsquantities(43737machinesduringthefirsttenmonthsof
1973)andprices(averageprice3970lireeach).Forthatreasonthe
Commissionhasconsidereditnecessarytosubjecttoauthorization the
importationintoItalyoftaperecordersfromTaiwanbyemergencyprocedure
(Article10ofRegulationNo1025/70)bylimitingimportsfortheperiod
from1Januaryto31December1974"to20000machines^.
InaccordancewithArticle10(6)ofRegulation1025/70theCommissionshall,
withintenworkingdaysofentryintoforceoftheemergencymeasure,
referredtoabove,submitaproposaltotheCouncilonappropriatemeasures
tobetaken.
TheproposalforaRegulationannexedheretoissubmittedtotheCounoil
undertheaboveprovisions *
OJNoL33,6February1974.Regulation(EEC)No300/74of5February1974.

-9-
Inconclusion,theCommissionbelievesthatitssolutionwhichisbased
on:
-thelevelofthelimitsetbyJapans
-thequotasystemofdistribution withregardtoTaiwan;
-thestrictcontrolofotherAsiansuppliers(withastudyofthe
possibilities ofusinganti-dumpingprocedure),enablesthelevelof
importsintoItalyin1974"tobelimitedtoapproximately 400000machines
whichisthesamelevelasin1973andwhichisquiteacceptabletothe
Italianindustrywhichhasrecovereditsnormalproduction(380000
machinesin1973)andexportpattern(100000approximately )insuch
conditions.
ThepossibilityofavoidingfurtherrecoursetoanArticleXIXmeasure
whichisnotjustifiablethistime,moreover,willavoidrecourseto
compensatory measuresagainsttheCommunitybytheGATTpartners
principally involved.
Finally,theCommissionbelievesthattherenewalofameasureergaomnes
(whichisnotindispensable ,besides)would,inpresentcircumstances ,
constituteanentirelygratuitousactagainsttheatmosphereof
cooperation andimprovementinrelationsbetweentheCommunityandJapan,

Proposal fora
REGULATION (EEC)OPTHECOUNCIL
subjecting toauthorization theimportation into
Italy oftape recorders from Taiwan
THECOUNCIL OPTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Economic Community ;
Having regard toCouncil Regulation (EEC)No1025/70^"of25May1970
establishing common rules forimports from third countries ,andin
particular Article 11thereof ;
/
Whereas ,following thedevelopment in1973 ofimports oftape recorders
into Italy from Taiwan andtotheprices atwhich these goods areimported ,
2theCommission ,initsRegulation (EEC)No300/74of5February 1974
subjecting toauthorization theimportation into Italy oftape recorders
from Taiwan ,took temporary protective measures limiting imports into
Italy oftape recorders from Taiwan ;
Whereas itisclear from ,thestatistics andother information supplied by
theItalian Government that imports oftape recorders from Taiwan into
Italy have increased considerably during thepast year ;
Whereas such imports ,which amounted to500machines in1969 ,2690in
1970 ,3745in1971 and -16695in1972 ,increased to43737during the
first tenmonths of1973 ;whereas these goods areimported atrelatively
lowaverage prices (about 3970lire each );
10JNoL124,8June1970
20JNoL33,6February 1974

-2-
WhereasduringthesameperiodtheannualItalianproductionofthese
productsdecreasedfrom380000machinesin1969toapproximately
136000in1972,"butrecoveredconsiderablyduring1973(toapproximately
380000machinesonaccountinparticularoftheeffectsresultingfrom
theprocessofreorganization inwhichtheItaliantaperecordingindustry
has"beenengaged.
Whereas,ontheotherhandimportsfromotherthirdcountriesdonot,
atthisstage,constituteathreatofsubstantial damagetothetape
recordingindustryinItaly,allowing,ontheonehand,formeasures
envisagedbytheprincipalsupplyingcountryforlimitingitsexports
toItalyduring1974and,ontheotherhand,forastrictcontrolthrough­
outtheCommunityofothersupplyingcountries;
Whereas,taperecordershavebeenimportedintoItalyfromTaiwaninsuch
greatlyincreasedquantitiesandontermssuchastothreatentohinder
theprocessofreorganization oftheItaliantaperecordingindustryand
causeitsubstantial damage}whereasitwouldbedifficulttoremedy
suchdamageunlessimmediateactionweretakeninrespectofimports
fromTaiwan;
Whereasatthepresenttimetheimportsinquestionarebeingparticularly
detrimentaltoItalybutarenotsofarcausingthesamedamagetoother
regionsoftheCommunity;whereasitisconsequentlyjustifiableto
limittheprotectivemeasurestoimportsintoItaly;

Whereasthesemeasuresmustlimitimportsatalevelwhichwould
takeaccountbothoftheproductionandconsumptionsituationin
ItalyandofthegrowthofimportsfromTaiwanandotherthirdcountries
inrecentyears}whereasalevelthereforebefixedat10000machines
for1974}
Whereastheseprovisionalprotectivemeasuresshouldbecapableofbeing
amendedorrepealedasrequiredbythedevelopmentofthesituationin
theCommunitymarketsandparticularly inItalyandmightbeextended
tootherpartsoftheCommunityortotheentireCommunityiffuture
trendsintheimportsinquestionshouldthreatentocausesubstantial
damagetoproducersinareasotherthanItaly:
HASADOPTEDTHISREGULATION :
Articià1
1«Theimportation fromTaiwanintoItalyoftheproductslistedbelow
shallbesubjecttotheproductionofanimportauthorization andshall
notexceedinrespectoftheperiod1January1974to31December1974»
thenumberofmachinesgivenbelowi
CCTheadingNo
92.11toIII Combinedsoundrecorders 20000units
andreproducers

"-4-
2«Theimportauthorization referredtoinparagraph1shallbeissued
bytheItalianRepublic.
Article2
ThisRegulationshallenterintoforceonthedayfollowingits
publicationintheOfficialJournaloftheEuropeanCommunities *
ThisRegulationshallbebindinginitsentiretyanddirectly
applicableinallMemberStates.
DoneatBrussels, FortheCouncil,
ThePresident