DOMINICAN REPUBLIC - SAFEGUARD MEASURES ON IMPORTS OF POLYPROPYLENE BAGS AND TUBULAR FABRIC
Document: Final Report of the Panel Addendum
Date: 31 January 2012
Document codes: WT/DS415/R/Add.1; WT/DS416/R/Add.1; WT/DS417/R/Add.1; WT/DS418/R/Add.1; WT/DS415/R-WT/DS416/R-WT/DS417/R-WT/DS418/R.
Complainant: El Salvador
Respondent: Dominican
Third parties: China, Colombia, Costa Rica, EU, Guatemala, Honduras, Nicaragua, Panama, Turkey, U.S.
Dispute stage: Panel
Agreements cited: Art. I:1  GATT 1994Art. 2.1, 2.2, 3.1, 3.2, 4.1(a), 4.1(b), 4.1(c), 4.2(a), 4.2(b), 4.2(c), 6, 11.1(a), 5.1, 8.1, 9.1, 12.3  SafeguardsArt. XIX:1, XIX:2, II:1  GATT 1994  GATT 1994

DOMINICAN REPUBLIC - SAFEGUARD MEASURES ON
IMPORTS OF POLYPROPYLENE BAGS AND
TUBULAR FABRIC

Final Report of the Panel

Addendum

 This addendum contains Annexes A to H to the Report of the Panel to be found in
document

ANNEX A

EXECUTIVE SUMMARIES OF THE FIRST WRITTEN SUBMISSIONS OF
THE PARTIES

Contents Page
A-1 Executive summary of the first written submission of the
complainants
A-2
A-2 Executive summary of the first written submission of the
Dominican Republic
A-11

ANNEX A-1

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
THE COMPLAINANTS

I. INTRODUCTION
1. This dispute relates to the provisional safe guard measure ("provisional measure") and the
definitive safeguard measure ("definitive measure") imposed by the Dominican Republic on imports
of polypropylene bags and tubular fabrics. Cost a Rica, El Salvador, Guatemala and Honduras ("the
complainants") consider that these measures are inconsistent with the Agreement on
Safeguards ("AS") and with the General Agreement on Tariffs and Trade 1994 ("GATT").
2. These measures give rise to serious concerns about the conduct of trade policy in the region
of Central America and the Caribbean. They ar e being used by the Dominican Republic as an
instrument to circumvent its regional comm itments under the Free Trade Agreement between
Central America and the Dominican Republic (" Central America-DR Agreement") and under the
agreement between the Dominican Republic, Centra l America and the United States ("DR-CAFTA").
For that purpose, the Dominican Republic carried out an investigation in accordance with its domestic
legislation on safeguard measures, the AS and the GATT. The resulting safeguard measures were
notified to the WTO.
3. In carrying out the investigation and adopting the safeguard measure, the Dominican Republic
acted in a manner inconsistent with various provisi ons of WTO law, including: (a) the determination
of the domestic industry entails arbitrary definitions of the products under investigation, the failure to
consider relevant evidence and the unjustified exclusion of certain domestic producers; (b) there is no
determination as to unforeseen deve lopments and the effect of the obligations incurred under the
GATT that are alleged to have resulted in increased imports causing serious injury to the domestic
industry; (c) the increase in imports is not of th e nature or magnitude required by the AS for the
application of safeguard measures; (d) the determination of serious injury and causal link relate to a
domestic industry of the Dominican Republic which is in a favourable position and suffers no damage
on account of imports, but rather, if anything, on account of other factors relating to the domestic
industry's own performance or economic conditions in the Dominican Republic; (e) the measures
have not been applied on a most-favoured-nation basi s, as required by Article 2.2 of the AS (which
calls for safeguard measures to be applied to all imports under investigation, irrespective of their
source), for which reason an argument was made fo r the exclusion of specific imports pursuant to
Article 9.2 of the AS, without observing the requirement of parallelism.
II. FACTUAL BACKGROUND
4. Tubular fabric is described as a woven fabric of synthetic polypropylene yarn, which is
produced from: (i) polypropylene resin; (ii) calcium carbonate; (iii) colouring agent;
(iv) flexographic inks; and (v) solvents. 1 The yarn is wound on to bobbins and fed to circular looms
in order to give the fabric a tubular form. The tubular fabric constitutes the raw material or main
input for the manufacture of polypropylene bags.

1 Initial technical report of the DEI, page 10.

5. Polypropylene bags are described as bags or sacks for packaging. They are produced from
bobbins or rolls of tubular fabric, which in turn are produced from resin and other minor components.2
Polypropylene bags are used for the packaging of food, agro-industrial and industrial products.3
III. THE MEASURES AT ISSUE
6. The provisional measure consisted of an ad valorem tariff surcharge of 38 per cent on imports
of the products under investigation. It was app lied from l April 2010 until 17 October 2010 (a period
of 200 days). The provisional measure was not applied on a most-favoured-nation basis, within the
meaning of Article I:1 of the GATT, nor irrespectiv e of the source of the imports, within the meaning
of Article 2.2 of the AS, since the Commission re lied on Article 9.1 of the AS, providing for the
exclusion from the scope of the measure of impor ts coming from and/or originating in Mexico,
Panama, Colombia and Indonesia. 4 The provisional measure is not a measure provided for in the
Schedule of Concessions of the Dominican Repub lic. Thus, the measure was notified to the
WTO Committee on Safeguards on 26 March 2010.5
7. The definitive measure consisted of an ad valorem tariff surcharge of 38 per cent on imports
of the products under investigation. It came into effect on 1 April 2010, for a period of 18 months
until 21 April 2012. 6 The definitive measure is not being applied on a most-favoured-nation basis,
within the meaning of Article I:1 of the GATT, or irrespective of the source of the imports, within the
meaning of Article 2.2 of the AS, since the Commi ssion relied on Article 9.1 of the AS, providing for
the exclusion from the scope of the measure of imports coming from/or originating in Mexico,
Panama, Colombia and Indonesia. 7 The definitive measure is app lied as an alternative duty to the
MFN tariff and is not a measure provided fo r in the Schedule of Concessions of the
Dominican Republic. Thus, the measure was notified to the WTO Committee on Safeguards on
8 October 2011.8
IV. THE FRAMEWORK FOR THE PANEL'S REVIEW
8. The objective assessment by a panel must have certain characteristics. It must be a critical
and in-depth examination of the explanations provided by the investigating authorities 9, in which it
determines whether those explanations are reasoned and adequate , as well as explicit.10 T h i s
assessment may not consist of finding "support for [the ] conclusions [of the investigating authorities]
by cobbling together disjointed references scattered throughout a competent authority's report".11

2 Ibid.
3 Public notice of provisional measure; public notice of definitive measure.
4 Addendum to Resolution CDC-RD-SG-061-2010, dated 16 March 2010, deciding on the application
of provisional measures, Exhibit CEGH-6, second article.
5 G/SG/N/7/DOM/1, G/SG/N/8/DOM/1, G/SG/N/11/DOM/1, Exhibit CEGH-18.
6 Public notice of definitive measure.
7 Resolution CDC-RD-SG-089-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 5 October 2010 (final resolution), fourth article.
Exhibit CEGH-9.
8 (G/SG/N/7/DOM/1/Suppl.1, G/SG/N/8/ DOM/1/Suppl.1 (Exhibit CEGH-19);
G/SG/N/7/DOM/1/Suppl.1/Corr.1, G/SG/N/8/ DOM/1/Suppl.1/Corr.1 (Exhibit CEGH-20);
G/SG/N/8/DOM/1/Suppl.2, G/SG/N/10/DOM/1, G/SG/N/11/DOM/1/Suppl.1 (Exhibit CEGH-21).
9 Appellate Body Report, US – Lamb, paragraph 106.
10 Ibid.; see also Appellate Body Report, US – Steel, paragraphs 287 and 297.
11 Appellate Body Report, US – Steel, paragraph 326.

9. The basis for the assessment by a panel must be the findings, conclusions and analysis
contained in the public reports of the authority.
12 This assessment cannot be based on ex post facto
explanations.
V. LEGAL CLAIMS
A. THE DEFINITION OF THE DOMESTIC INDUSTRY IS INCONSISTENT WITH ARTICLES 3.1, 4.1(c),
4.2(c) OF THE AS
1. The Commission failed to establish adequa tely and reasonably that the imported
products were like or directly competitive products
10. The Regulatory Commission on Unfair Trade Practices and Safeguard Measures (the
"Commission") held that the imported product und er investigation was a single product jointly
comprising tubular fabric and polypropylene bags. However, the Commission and its Investigations
Department (DEI) made a number of basic errors in arriving at this definition:
 Despite the fact that the interested par ties put forward a variety of questions and
factual information concerning the defin ition of the imported product, neither the
Commission nor the DEI gave an adequate and reasoned explanation in response to
those objections. The questions concerned pointed to the fact that tubular fabric and
polypropylene bags are distinct products and cannot be considered to be the same
product.
 The only reason for considering tubular fabr ic and polypropylene bags as the same
product was the classification based on Note 2 in Chapter 63 of the
Dominican Republic's Customs Tariff.
13 What would appear to underlie the
interpretation given to Note 2 by FERSAN, the DEI and the Commission (to the
effect that heading 6305 covers tubular fabric) is the presumption that a tubular fabric
is equivalent to an incomplete or unfinis hed bag. However, that presumption is not
explained in any of the relevant reports or resolutions. Moreover, according to the
Directorate of Customs of the Dominican Repub lic, this Note is inconsistent with the
Harmonized System Convention.
14
11. In the absence of reasoned findings and conc lusions on the definition of the product under
investigation, the Commission defined the product inv estigated inconsistently with Articles 3.1, last
sentence, and 4.2(c) of the AS and, in consequen ce, defined the domestic industry inconsistently with
Articles 4.1(c), 3.1, last sentence, and 4.2(c) of the AS.
12. In addition, the Commission failed to make a valid determination that the domestic products
were directly competitive with the imported pr oducts under investiga tion. The Commission
considered the production of tubular fabric and pol ypropylene bags as the same domestic industry,
without having demonstrated that both products, as an input and as final goods, respectively, are

12 Ibid., paragraph 299.
13 According to Note 2, as described by the Commi ssion in its preliminary resolution, "heading 6305
(corresponding to bags and sacks for packaging) also covers tubular fabric for bags, in accordance with
interpretative rule 2(a), (preliminary resolution, paragraph 31).
14 Communication from the Directorate-General of Customs (DGA) dated 25 November 2009,
folio 000089 in the file, Exhibit CEGH-13.

directly competitive with each other. Further, th e Commission failed to make a determination with
regard to the directly competitive domestic produc t having the same scope as the imported product,
since the Commission considered tubular fabric and polypropylene bags manufactured from resin
(excluding bags manufactured from tubular fabric) as the domestic product and, at the same time,
considered tubular fabric and pol ypropylene bags in general (regard less of whether the latter were
produced from resin) as the imported product. Fi nally, the Commission determined the directly
competitive products without following the order of analysis established by the Appellate Body for
that purpose
15, inasmuch as the Commission first defined the status of FERSAN as that of the
domestic industry, and subsequently defined the directly competitive products.16
13. The Commission could not have validly iden tified the domestic producers constituting the
domestic industry, and this therefore entails a violation of Articles 4.1(c), 3.1, last sentence, and 4.2(c)
of the AS.
2. The Commission improperly excluded produc ers of directly competitive domestic
products
14. The Commission considered that the domestic industry is the industry producing tubular
fabric and polypropylene bags made from resin 17 and that that status fell to the applicant, FERSAN. 18
However, the Commission reached that conclusion despite making two fundamental errors:
 It excluded out of hand specific categories of producers of the directly competitive
domestic product on the basis of an erroneous interpretation of the term "producers"
in Article 4.1(c) of the AS. The requirement of being a "producer" of tubular fabric
and polypropylene bags made from resin makes the status of producer conditional on
a specific production process. The Commission's interpretation is contrary to the
interpretation given to the term "producer s" in the context of the Anti-Dumping
Agreement and the Agreement on Subsidies and Countervailing Measures.
19
 Even under their own interpretation of the term "producers" based on production from
resin, the DEI and the Commission excluded domestic producers producing the
domestic product from resin, such as the companies FIDECA and TITAN.
15. For these reasons, the Commission failed to define the domestic industry in a manner
consistent with Articles 4.1(c), 3.1, last sentence, and 4.2(c) of the AS.

15 Appellate Body Report, US – Lamb paragraph 87.
16 Initial resolution, page 4: preliminary resolution, paragraphs 13 and 14 and 26-36; definitive
resolution, paragraphs 18-23.
17 Preliminary resolution, paragraph 13; preliminary report, pages 55-58; final resolution, paragraph
18; final report, pages 43-46.
18 Ibid.
19 Panel Report, US – Lamb , paragraph 7.69. See also, with re gard to countervailing measures, the
Panel Report in Mexico – Olive Oil , paragraph 7.192; and with regard to anti-dumping measures, the
Panel Report in EU – Salmon, paragraph 7.114.

B. T
HE ABSENCE OF DETERMINATIONS ON UNFORESEEN DEVELOPMENTS AND THE EFFECT OF
THE OBLIGATIONS INCURRED UNDER THE GATT IS INCONSISTENT WITH ARTICLE XIX:1(a)
OF THE GATT AND ARTICLES 3.1, 4.2(c) AND 11.1(a) OF THE AS
1. The Commission failed to demonstrate that there were unforeseen developments
16. The Commission produced no reasoned finding or conclusion to demonstrate the existence of
unforeseen developments, as well as the logical co nnection between those developments and the
increased imports alleged to have caused serious injury to the domestic industry.
17. In the initial report, the DEI transcribed the arguments of FERSAN to the effect that there had
been unforeseen developments caused by the oblig ations assumed in the DR-Central America
Agreement for which the total reduction period was ascertained from 2004.20
18. In the preliminary report, the DEI stated th at FERSAN added to its claim further unforeseen
developments such as: (i) the international econo mic crisis of 2008 and its repercussions on the
regional economy, and (ii) the introduction of goods produced under regimes allegedly incompatible
with the DR-Central America Agreement, for whic h reason a bilateral violation of that agreement
would qualify as unforeseen developments.21 The DEI also mentioned FERSAN's argument that, with
regard to the economic/financial crisis of 2008, the DEI simply confined itself to affirming that this
"had a significant impact on the economy of the region which has not spared the Dominican industry".
Moreover, the DEI itself disregarded the relevance of the alleged violation of the 1998 bilateral
agreement as an event brought about by unforeseen developments.
19. Lastly, in the final report, the DEI added a ne w aspect relating to China's accession to the
WTO.22 Moreover, no opinion was given as to wh ether that fact was not foreseen by the
Dominican Republic in its capacity as a WTO Member , at the time of entering into its obligations
under the GATT (of 1994).
20. The descriptive and scattered references to unforeseen developments in the initial,
preliminary and final determinations fail to satisfy the standard of factual demonstration required by
Article XIX:1(a) of the GATT in relation to Articl es 3.1, last sentence, and 4.2(c) of the AS.
Consequently, the DEI and the Commission acted inconsistently with those provisions.
2. The Commission failed to explain how th e GATT obligations caused the increased
imports of tubular fabric and polypropylene bags
21. The DEI and the Commission recognized the ob ligation under Article XIX:1(a) of the GATT
to demonstrate the unforeseen developments and th e effect of the obligations incurred under the
GATT which resulted in increased imports. 23 The Appellate Body has confirmed that, in order to
demonstrate the effect of obligations assumed under the GATT, it is necessary to demonstrate that
specific obligations have been assumed.24

20 Initial report, page 15.
21 Preliminary report, pages 70-71.
22 Final report, page 66. We take it that the refere nce to "China's incursion into the multilateral trading
system" refers to China's accession to the WTO.
23 Preliminary report, page 69; final resolution, paragraph 27; final report, pages 63-65.
24 Appellate Body Report, Argentina – Footwear , paragraph 91; Appellate Body Report, Korea –
Dairy, paragraph 84.

22. There is no finding in the reports or resolutions that identifies the GATT obligations alleged
to have caused the increased imports, or that indi cates how those obligations would have resulted in
an increase in the imports concerned. This is in consistent with Article XIX:1(a) of the GATT and
Articles 3.1, last sentence, 4.2(c) and 11.1(a) of the AS.
C. T
HE DETERMINATIONS REGARDING INCREASED IMPORTS ARE INCONSISTENT
WITH ARTICLE XIX:1(a) OF THE GATT AND ARTICLES 2.1, 3.1 AND 4.2(c) AND 6 OF THE AS
1. The Commission failed to demonstrate an increase in imports in absolute terms that was
"recent enough, sudden enough, sharp enough, and significant enough"
23. The Commission reached the conclusion that the imports increased in absolute terms, causing
serious injury to the domestic industry25, despite having found that there was a "marked decrease" 26 in
imports in absolute terms towards the end of the period. Nor did the Commission provide an adequate
and reasoned explanation as to why, despite the ab solute decrease towards the end of the period, it
still considered that there had been an increase in imports. It was not demonstrated, therefore, that
there had been an increase in imports that was su fficiently sudden, recent, sharp and significant to
support the contention of an absolute increase in im ports, in line with the interpretation given by the
Appellate Body in Argentina – Footwear.27
24. Likewise, neither the DEI nor the Commission co mplied with the obligation to examine the
upward trend of imports during the period investigat ed, since they only referred to a comparison of
the absolute levels at the beginning and end of the period of investigation.28
25. Consequently, the DEI and the Commission failed to establish a reasoned conclusion
regarding the increased imports in a manner consis tent with Article XIX:1(a) of the GATT and
Articles 2.1, 3.1, last sentence, 4.2(c), 11.1(a) and, in addition, Article 6 of the AS with respect to the
preliminary determination.
2. The Commission failed to demonstrate an in crease in imports relative to domestic
production
26. The Commission reached the conclusion that im ports increased in relative terms, causing
serious injury to the domestic industry. 29 However, the Commission reached this conclusion despite
having found that the relative share of imports in relation to domestic produ ction fell steadily and
uninterruptedly for most of the period of investigation.
27. The Commission's final conclusion is not explained in the light of the factual findings of the
DEI. From 2007, imports clearly showed a steady and uninterrupted downward trend in relation to
domestic production.
28. Consequently, the Commission's determination that there had been an increase in imports in
absolute terms was inconsistent with Article XI X:1(a) of the GATT and Articles 2.1, 3.1, last

25 Preliminary resolution, first article; final resolution, paragraph 31 and first article.
26 Preliminary report, page 68; final report, page 61.
27 Appellate Body Report, Argentina – Footwear, paragraph 131.
28 Appellate Body Report, US – Steel, paragraph 354.
29 Preliminary resolution, first article; final resolution, paragraph 31 and first article.

sentence, 4.2(c), 11.1(a) and, in addition, Article 6 of the AS with respect to the preliminary
determination.
D. T
HE DETERMINATIONS REGARDING SERIOUS INJURY, AND THE DEMONSTRATION OF
CRITICAL CIRCUMSTANCES (WITH REGARD TO THE PROVISIONAL MEASURE) ARE
INCONSISTENT WITH ARTICLE XIX:1(a) OF THE GATT AND ARTICLES 2.1, 3.1, 4.1(a), 4.2(a),
4.2(c) AND 6 OF THE AS
29. In both the preliminary and the final determina tion, the Commission concluded that there was
serious injury despite having committed numerous errors:
 It failed to carry out a disaggregated a nd complete analysis regarding the many
segments of the domestic industry, as required by the Appellate Body. 30 Therefore,
no separate analysis was provided regarding the production of tubular fabric and
regarding the production of polypropylene bags.
 In the preliminary determination, the Co mmission failed to evaluate all relevant
factors listed in Article 4.2(a) of the AS, since it omitted from its analysis the factor
relating to the productivity of the domestic industry.
 In the preliminary and final determinations, the Commission concluded that there was
serious injury despite the fact that the relevant indicators showed the contrary or were
inadequately evaluated.
 Neither the DEI nor the Commission provide d an adequate and reasoned explanation
of the "critical" nature of the circumstan ces that allegedly justified the provisional
measure in accordance with Article 6 of the AS.
30. The Commission's determination of serious injury to the domestic industry was therefore
inconsistent with Articles 2.1, 3.1, last sentence, 4.1( a), 4.2(a), 4.2(c) and 5 of the AS, as well as with
Article XIX:1(a) of the GATT.
E. T
HE CAUSATION DETERMINATIONS ARE INCONSISTENT WITH ARTICLE XIX:1(a) OF THE
GATT AND ARTICLES 2.1, 3.1, LAST SENTENCE, 4.2(a), 4.2(c) AND 6 OF THE AS
31. The Commission imposed the provisional and definitive measures on the basis of its
conclusion that imports had increased, "causing" serious injury to the domestic industry of fabrics and
bags.31 In reaching this conclusion, the Commission was guilty of two serious omissions:
 It failed to demonstrate by means of a relevant analytical method the causal
relationship between the alleged increase in imports and the alleged serious injury to
the domestic industry. The Commission confined itself to making assertions with

30 Appellate Body Report, US – Hot-Rolled Steel , paragraphs 195, 213, 214; Appellate Body Report,
Mexico – Rice, paragraphs 180-187.
31 Preliminary resolution, first article; final resolution, first article.

regard to causation
32, but it failed to provide an ade quate and reasoned explanation in
this respect.
 It failed to carry out the non-attribution anal ysis required by Article 4.2(b) of the AS.
In violating this obligation, the Commission failed to show that the harmful effects
caused by factors other than imports woul d not be attributed to the imports under
investigation.
32. As a result, the Commission determined the cau sal link between the imports and the serious
injury to the domestic industry inconsistently with Ar ticles 2.1, 3.1, last sentence, 4.1(a), and 4.2 of
the AS and Article XIX:1(a) of the GATT, as well as with Article 6 of the AS, with regard to the
provisional measure.
F. THE MEASURES AT ISSUE VIOLATED THE REQUIREMENT OF PARALLELISM AND ARE
INCONSISTENT WITH ARTICLES 2.1, 2.2, 3.1, 4.2, 6 AND 9.1 OF THE AS
33. In accordance with the requirement of parallelis m, if a Member decides to exclude certain
imports from the scope of a measure, the investiga ting authorities must satisfy themselves that those
imports are also excluded from the evaluations relati ng to substantive aspects in which they were the
subject of analysis.33
34. In the analysis of imports, the Commission considered all imports that entered the
Dominican Republic between 2006 and 2009. 34 Thus, in the preliminary and final resolutions, the
Commission decided to apply the provisional and final measures, respectively, to all imports of
tubular fabric and polypropylene bags under headings 5407.20.20 and 6305.33.90 of the
Dominican Republic's Customs Tariff. 35 Nevertheless, in the same resolutions, the Commission
decided to exclude imports from Mexico, Panama , Colombia and Indonesia from the scope of both
measures, on the ground that they collectively accounted for 1.21 per cent of the imports
investigated.
36
35. As a result, the Commission decided to apply the provisional and definitive measures
inconsistently with Articles 2.1, 2.2, 3.1, last sentence, 4.2(a), 4.2(b), 4.2(c), 6 and 9.137 of the AS (the
latter provision in relation to the provisional measure).

32 Preliminary resolution, paragraph 47; preliminary report, page 88; final resolution, paragraphs 37
and 38.
33 Appellate Body Report, US – Steel , paragraph 441. Appellate Body Report, US – Tubular Goods ,
paragraph 181, with citation from US – Lamb, paragraph 103.
34 Preliminary report, Annexes I and II: final report, Annexes I and II.
35 Preliminary resolution, second article, as amended by the amending preliminary resolution: final
resolution, second article.
36 Preliminary resolution, fourth article, as amended by the amending preliminary resolution; final
resolution, fourth article.
37 According to the statistics on imports, imports from Thailand amounted to 0.32 per cent of total
imports during the period under investigation, and thus constituted less than 3 per cent of imports. It was
therefore necessary to excl ude imports from Thailand from the scope of the measures at issue, in accordance
with Article 9.1 of the AS. However, the resolutions do not exclude Thailand from the scope of the measures at
issue.

G. T
HE DOMINICAN REPUBLIC ACTED INCONSISTENTLY WITH ARTICLE XIX:2 OF THE GATT
AND ARTICLES 8.1 AND 12.3 OF THE AS
36. The Commission imposed the definitive measure without timely notification and without
affording Members with a substantial interest in the products under investigation an opportunity for
consultations as provided in Article 12.3 of the AS and Article XIX:2 of the GATT. Nor did the
Commission provide an opportunity to obtain an adequate means of trade compensation in accordance
with Article 8.1 of the AS and Article XIX:2 of the GATT.
VI. REASONS FOR REQUESTING SUGGESTIONS CONCERNING
IMPLEMENTATION OF POSSIBLE RULINGS AND RECOMMENDATIONS BY
THE PANEL
37. The complainants request the Panel, on the basis of Article XIX:1 of the DSU, to suggest that
the Dominican Republic immediately put an end to the definitive measure. This request is also based
on the previous practice followed by other panels.
38
38. The magnitude and number of the errors co mmitted by the DEI and the Commission in
carrying out their investigation lead to a situati on analogous to that obtained in the above-mentioned
cases, so that the only way in which the Dominican Republic could properly apply the possible rulings
and recommendations of the Panel would be thro ugh the immediate revocation of the definitive
safeguard measure.
VII. REQUEST FOR RULINGS AND RECOMMENDATIONS
39. On the basis of the foregoing, the complainan ts request the Panel to issue the following
findings and rulings: (i) the provisional measure an d the definitive measure are inconsistent with
Article XIX:I(a) of the GATT and Articles 2.1, 2.2, 3.1, 4.1(a), 4.1(c), 4.2(a), 4.2(b), 4.2(c), 6 and
11.1(a) of the AS; and (ii) the Dominican Republic acted inconsistently with Article XIX:2 of the
GATT and Articles 8.1 and 12.3 of the AS.
40. Pursuant to the provisions of the second sentence of Article 19.1 of the DSU, the
complainants request the Panel to make sugges tions for the application of its rulings and
recommendations with regard to the definitive measure.

38 Panel Report, Argentina – Poultry , paragraph 8.7; Panel Report, Guatemala – Cement II ,
paragraph 9.6; Panel Report, Mexico – Steel Pipes and Tubes, paragraph 8.12.

ANNEX A-2

EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF
THE DOMINICAN REPUBLIC

1. This dispute concerns the Dominican Republic's imposition of a 38 per cent tariff on imports
of polypropylene bags and tubular fabric by mean s of a provisional measure and, subsequently, a
definitive measure. These measure s are contested by Costa Rica, El Salvador, Guatemala and
Honduras ("the complainants") in the light of Artic le XIX of the General Agreement on Tariffs and
Trade 1994 ("GATT") and various provisions in the Agreement on Safeguards ("AS").
2. As the course of action followed by the Dominican Republic did not, however, result in
suspension of the obligations undertaken with respect to these products, or withdrawal or modification
of concessions, neither Article XIX nor the AS ar e applicable to the measures contested by the
complainants. Consequently, there are no grounds for this dispute and the present procedure before
the Panel cannot continue.
3. If the Panel does decide that Article XIX of the GATT and the AS do apply to the measures
contested, the Dominican Republic affirms, as a pr eliminary, that several claims are adequately
identified in terms of Article 6.2 of the Unde rstanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and are not covered by the Panel's terms of reference, or that the
complainants have not been able to make a prima fa cie case for any violation. This is the case for the
complaint based on the alleged omission of determin ations of unforeseen developments and the effect
of GATT obligations, an omission which, in the view of the complainants, resulted in inconsistency in
the determinations of the increase in imports, serious injury and the causal link.
4. Likewise, the Panel's terms of re ference do not include Article 4. 1(a) of the AS as the legal
basis for the complaint concerning the causal li nk, which was not included in the request for
consultations. For the same reason, the complaint concerning the obligation to reach agreement on a
means of trade compensation, based on Article 8.1 of the AS, does not fall within the Panel's terms of
reference. Lastly, the complainants failed to el aborate on some complaints in their first written
submission, and it is therefore the Dominican Republic's understanding that they have been
withdrawn. This is the case for the complaints in points (h), (i), (l) and (m) of the request for the
establishment of a panel submitted by the complainants.
1 The last three complaints (points (i), (l) and
(m)) are not included in the Panel's terms of reference either.
5. If the Panel should decide to consider the measu res at issue in the light of the GATT and the
AS, the Dominican Republic affirms that, contra ry to what is asserted by the complainants, the
measures at issue fully comply with the GATT and the AS, particularly as regards the following:
 The definition of the domestic industry;
 determinations of the existence of unfor eseen developments and the effect of the
obligations incurred under the GATT;
 determinations of the increase in imports, the serious injury, the critical circumstances
and the causal link;

1 WT/DS415/7, WT/DS416/7, WT/DS417/7 and WT/DS418/7.

 the parallelism requirement; and
 notice of the measure and the holding of consultations.
6. Contrary to the contention by the complainan ts, the definition of the domestic industry is
based on valid determinations of the imported product under investigation and the directly
competitive domestic product. As to the imported product under investigatio n, the complainants
question the treatment of tubular fabric and polypropyle ne bags as a single product to be investigated.
The previous reports on which the complainants base their case, however, provide little, if any,
guidance. The paragraphs mentione d in the Appellate Body Report on US – Lamb refer to the
inclusion of certain actors in the domestic indus try, without dealing with determination of the
imported product under inv estigation or the likeness of the lamb meat produced in the United States
and that imported. The facts and the products und er consideration are, moreover, very unlike each
other.
7. The other Appellate Body Report mentioned, Chile – Price Band System , only mentions in
this connection US – Lamb and, what is more, relates to a s ituation in which the Chilean authorities
had only made an implicit affirmation of liken ess or direct competition, simply providing an
ex post facto explanation. This is in direct contrast to the present case, where there are many and
detailed findings about the product under consideration and the direc tly competitive product in the
initial report and resolution, the public notice of init iation, the preliminary report and resolution, as
well as the final report and resolution of the Regul atory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic ("th e Commission"). It is difficult to claim,
therefore, that the considerations of the Appellate Body in that case are relevant to the present case.
The reports and resolutions cited also show that, cont rary to what is asserted by the complainants, the
Commission and the Investigation Department (DEI) took into account comments by certain
importers, exporters, and government authorities, even when they did not respond to them.
8. The complainants' analysis provides no conclusi ve legal grounds based on Article XIX of the
GATT or on the AS to indicate that treating tubular fabric and polypropylene bags as a single product
for the purposes of the investigation is inconsistent with the covered agreements. Prior Reports by
Panels in US – Softwood Lumber V , EC – Salmon (Norway) or Korea – Certain Paper found that the
Anti-Dumping Agreement did not provide any guidance on the way in which the product under
consideration had to be determined, reasoning that also applies to the AS.
9. As regards the determination of the directly competitive domestic product , it is clear that
it was based on what FERSAN, the petitioner in the procedure before the Commission, stated in its
request for initiation of the investigation. It is necessary to emphasize, however, that the
Commission's reports and resolutions show that nume rous factors were evaluated affirming that the
domestic product and the product unde r consideration were directly competitive. The complainants
also contend that there must be symmetry between the definition of the product under consideration
and the definition of the domestic product. This symmetry would be lacking as the product has been
defined as "produced from resin". The technical re ports and the resolutions show, however, that the
criterion "produced from resin" was not a priori imposed when defining the directly competitive
product, but is the logical result of the exclusion fro m the definition of the domestic industry of those
manufacturers which import the product under considera tion. Furthermore, the complainants do not
indicate the legal basis from which the alleged ob ligation to respect symmetry in the definition of
products that are in direct competition derives.

10. The complainants also put forward an order fo r the analysis which the Dominican authorities
should have followed in their reports, based solely on a finding by the Appellate Body in its Report in
US – Lamb , without indicating how such an obligation could be derived from Article 3.1,
last sentence, or Article 4.2(c) of the AS. Even though the Dominican Republic questions the
existence of such an obligation, it should be note d that the logical sequence of the preliminary and
definitive reports that are an integral part of the re spective resolutions are consistent with the order of
analysis put forward by the complainants.
11. In definitive, the Dominican authorities defined the product under consideration as
"polypropylene bags and tubular fabric" a nd the directly competitive domestic product as
"polypropylene bags and tubular fabric"; the direct competition relationship is obvious and,
furthermore, similar practices in anti-dumping in vestigations have been approved in a manner
consistent with the Reports of the various Panels, as is the case for US – Softwood Lumber V, Korea –
Certain Paper or EC – Salmon (Norway) . As the definitions of the product under consideration and
the directly competitive domestic product are valid, they constitute an appropriate basis for the
Dominican authorities' determination of the domestic industry.
12. With regard to the determination of the domestic industry , the Dominican authorities
pointed out that three producers declar ed themselves to be interested parties, in two of which most of
the output used imported tubular fabric, in other words, the product under consideration. Those
manufacturers which import the product under consider ation were excluded, in accordance with Law
No.1-02, whose consistency with the AS was not questioned by the complainants, following an
adequate and reasoned explanati on. Consequently, there was no a priori exclusion of certain
categories of producer, and the procedure was not b ased on an erroneous interpretation of the word
"producers", there is no violation of Article 4.1(c) or other provisions of the AS in this sense, and the
selection of FERSAN as the only component of the domestic industry is valid. Moreover,
independently of the exclusion of certain manufact urers in the present case, the Dominican Republic
points out that it reserves the right to require a mi nimum level of processing or value added before an
economic actor can be deemed to be a "producer" with in the meaning of Article 4.1(c) of the AS, so
the idea that whoever cuts and sews tubular fabric is considered to be a "producer" of polypropylene
bags is highly questionable.
13. With regard to unforeseen developments pur suant to Article XIX of the GATT, the
Dominican Republic considers that their determin ation does not constitute a binding obligation as a
prerequisite for the application of a safeguard meas ure. This understanding is based on the fact that
the AS does not contain such an obligation and therefore derogates from Article XIX in this sense.
This interpretation is corroborated by the intention of the States which negotiated the Uruguay Round,
by the text, and the exhaustive nature of the AS , the legislation of other WTO Members, and by
ambiguous declarations and the absence of clear guidelines in this respect on the part of the
WTO's decision-making bodies. For these reasons, the Dominican Republic also expresses its
disagreement with the prior Reports of the Appellate Body in Argentina – Footwear and Korea –
Dairy, which require proof of the unforeseen developments that resulted in increased imports.
14. Despite the foregoing, if the Panel decides that proof of unforeseen developments constitutes
a binding obligation, both the Preliminary Technical Report and the Final Technical Report contain
detailed findings and conclusions in this regard, mentioning the tariff reduction process with the entry
into force of the DR-CAFTA and the DR-Central America Treaty. Reference is also made to the form
submitted by FERSAN, in which the rising cost of pr oducing polypropylene bags and tubular fabric is
addressed, as well as the increase in energy costs, which harmed its competitive position and opened
the way to use of less costly imports. The Do minican authorities therefore provided a reasoned and

adequate explanation of the unforeseen developm ents whose effect was an increase in imports,
complying with Article XIX.1(a) of the GATT and Ar ticles 3.1, last sentence, 4.2(c) and 11.1(a) of
the AS.
15. Regarding the effect of GATT obligations, the Dominican Republic gave a 40 per cent tariff
concession for products classified under subheadi ngs 5407.20.20 and 6 305.33.90, concerning
polypropylene bags and tubular fabric. The Do minican Republic therefore complied with this
requirement in Article XIX of the GATT to the effect that it must be demonstrated, as a matter of fact,
that the importing Member has incurred obligati ons, including tariff concessions, in accordance with
the words of the Appellate Body in its Report on Argentina – Footwear.
16. Concerning the increase in imports, the Commission's findings indicated a recent enough,
sudden enough, sharp enough and significant en ough increase, both in qualitative terms and
qualitatively, to cause serious injury. Despite the existence of this increase, there was a 14.68 per cent
drop recorded in the last year of the investigation period, whereas the increase was 50.06 per cent over
the whole period investigated, also taking into acc ount the aforementioned drop. According to the
findings of the Dominican authorities, this decreas e towards the end of the investigation period was
more of an incidental and temporary nature as it w as caused by the lower rate of economic growth in
the Dominican Republic in 2009, which saw a de crease of 30.03 per cent in total imports, while
during this period, imports of the product under consideration fell by a lesser amount. In addition, the
Commission determined that there was a recovery in imports of tubular fabric and polypropylene bags
in early 2010.
17. Moreover, contrary to what is asserted by th e complainants, the Dominican Republic did not
limit itself to comparing the end points in the investigation period but undertook a point-by-point
analysis for each period separately, taking into account both the rate and the volume of the increase.
It thus fully complied with the obligation to analyse the trend in imports, as specified by the
Appellate Body in Argentina – Footwear. The Commission also conducted an analysis of the relative
increase in imports, finding an increase in 2007 alon e. Nevertheless, having previously proven the
existence of an increase in absolute terms, it comp lied with Article 2.1 of the AS, which requires an
increase in absolute terms or relative to dom estic production, compliance with one of these
requirements being sufficient. The claims by the complainants that there was no increase in imports
or that its existence was not determined in accord ance with Articles 3.1, last sentence, 4.2(c) and
11(a) of the AS should therefore be rejected.
18. With regard to the determination of serious injury, the claim that the Commission did not
undertake a separate and comprehensive analysis of the numerous segments of the domestic industry
should be rejected as there is no positive obligati on in the AS requiring that serious injury be
evaluated by segment or separately. It clearly emerges from the reports, moreover, that there was a
joint analysis of the polypropylene bags and tubular fabric segments, and that the analysis was not
limited to the production of bags alone, as contended by the complainants. Both the wording of the
technical reports and the figures provided by the dom estic industry (which are expressly mentioned in
the reports) show that the investigating authorit y proceeded on the basis of aggregate data for
polypropylene bags and tubular fabric.
19. Regarding the alleged failure to evaluate th e "productivity" indicator in the preliminary
determination, the Dominican Republic affirms that a finding by the Panel in this regard would clearly
not be necessary in order to ensure a positive settle ment of the dispute inasmuch as the measure is no
longer in effect and has been replaced retroactiv ely by the final determination, about which the
complainants have not made the same claim. In addition, the trend in this indicator compares

production in volume and value terms with the numbe r of employees, and both indicators are to be
found in the preliminary report. When the compla inants require that productivity be evaluated under
a specific heading in the preliminary report, they are adopting a purely formalist approach, which is
obviously inappropriate for a preliminary determina tion. In fact, Article 6 of the AS, concerning
provisional measures, indicates that Article 4.2 of th e AS applies to the investigation subsequent to
the provisional measure and not to the prelimin ary determination, inasmuch as the obligation to
evaluate all indicators of injury concerns the "s ubsequent investigation" after the adoption of a
preliminary measure.
20. With regard to proof of serious injury, the Dominican authorities found conclusive indications
of significant overall impairment, based on consiste nt and growing losses suffered by the domestic
industry, the negative impact on increases in inventor ies, the relative contraction in the value of
production, negative cash flow and the problems en countered by the domestic industry in gaining a
larger market share despite its large investment and loss-making selling prices. In definitive, the
investigating authority gave an ad equate and reasoned explanation of the serious injury suffered by
the domestic industry, so the Dominican Republic fu lly complied with Article XIX.1(a) of the GATT
and Articles 2.1, 3.1, last sentence, 4.1(a), 4.2(a), 4.2(c) and 6 of the AS.
21. Concerning the alleged failure to prove the critical nature of the circumstances that justified
the imposition of the provisional measure, the Do minican Republic sees no need to reach findings
regarding the provisional measure, which has expire d and been replaced by the definitive measure.
Even so, the investigating authority proved the exis tence of injury difficult to repair in terms of
Article 6 of the AS if no provisional measure was ad opted. The investigating authority noted, among
other indicators, a 206 per cent decline in fina ncial performance and a 199 per cent increase in
inventories.
22. Regarding the claims relating to the alleged fa ilure to determine a causal link, many of the
complainants' claims are biased. They mention that the domestic industry's share of domestic
apparent consumption showed a sharp rise, whereas in fact it only exceeded its 2006 share in 2009,
but remained below it in 2007 and 2008. The same applies to their interpretation of the share of
imports, which only from 2009 onwards and by selli ng at a loss on the part of FERSAN, managed to
fall below the 2006 levels. The same also applies to the alleged downward trend in imports, whereas
they increased steadily from 2006 to 2008, with only an incidental and temporary drop in 2009.
23. The complainants also allege that the DEI a nd the Commission did not act consistently with
the AS in attributing the financia l losses to the imports, although it is shown in the preliminary and
final reports that, if it had not been for the flow of imports, the domestic i ndustry could have coped
with the loans it contracted through economies of scale resulting from its investment without suffering
financial losses. Likewise, the technical reports, by showing how imports replaced sales of domestic
products, indicated how the increase in inventories is attributable to the increased imports. As regards
cash flows, the decrease follows FERSAN's strategic decision to keep its prices low and its production
levels high, precisely because of the pressure exercise d by imports, so the negative trend in this factor
as well has to be attributed to the imports, contrary to what is contended by the complainants.
24. The argument that injury caused by compe tition from the domestic producers excluded was
wrongly attributed to the imports should be rejected as well. The reason why these producers were
excluded was, precisely, because they imported the product under consideration, so the injury
resulting from competition on their part was directly caused by the imports. It should, therefore, be
found that the investigating authority conducted an a ppropriate analysis of the causal link between the
increased imports and the serious injury to the domestic industry.

25. Regarding the parallelism requirement, the Do minican Republic points out that the final
resolution provides for the application of a 38 per cent tariff, whereas the DEI had found that a tariff
of 40 per cent was justified. Bearing in mind also that the imports not excluded from the investigation
only represent 1.21 per cent of total imports, the Do minican Republic maintains that the findings in
the technical reports did not vary, given this infinitesimal share.
26. Concerning the notice of the measure in accordan ce with Article XIX:2 of the GATT, this
provision requires that the safeguard measure be notified to the Committee on Safeguards
immediately after and not before its adoption, so the notice of the measure to the Committee only
three days after the decision to impose it should be considered as immediate notice in conformity with
Article XIX:2 of the GATT and Article 12 of the AS.
27. It also emerges clearly from the final report that the Dominican authorities gave adequate
opportunity for consultations pursuant to Article 12.3 of the AS. The final technical report contains
evidence of a large number of communications and notifications between the Commission and the
complainants, as well as the holding of a public hearing on 12 May 2010. It cannot, therefore, be
validly claimed that adequate opportunities for co nsultations were not given to Members having a
substantial interest.
28. As regards the complainants' claim concerning Article 8.1 of the AS, which requires the
maintenance of a substantially equivalent level of concessions and other obligations to that existing, it
simply cannot be asserted that such a level was not maintained as, even after the imposition of the
measure, the tariffs were lower than the bound tariffs, which set a ceiling of 40 per cent.

ANNEX B

SUBMISSIONS OF THE THIRD PARTIES OR EXECUTIVE SUMMARIES THEREOF

Contents Page
B-1 Executive summary of the submission of Colombia B-2
B-2 Executive summary of the submission of the United States B-10
B-3 Submission of Nicaragua B-15
B-4 Executive summary of the submission of Panama B-18
B-5 Submission of Turkey B-21
B-6 Executive summary of the submission of the European Union B-23

ANNEX B-1

EXECUTIVE SUMMARY OF THE SUBMISSION OF COLOMBIA

I. INTRODUCTION
1. Colombia is participating in this dispute because of its systemic interest in the application of
Article XIX of the General Agreement on Tari ffs and Trade (GATT 1994) and the Agreement on
Safeguards (AS) and in the belief that safeguards are vital tools for the management of a country's
trade policy and that, in practice, their use should no t be prohibited but allowed, in conformity with
Members' obligations under the aforementioned agreements.
2. In this statement, Colombia expresses its views on the six points set out below.
II. APPLICABILITY OF ARTICLE XIX OF THE GATT 1994 AND OF THE AS TO
THE PRESENT DISPUTE
3. In a request for a preliminary ruling the Dominican Republic asked the Panel to rule on the
non-applicability of Article XIX of the GATT 1994 a nd of the AS with respect to the measures at
issue in this dispute. The complainants responded to this request by rejecting the claims of the
Dominican Republic. On 12 May 2011, the Panel se nt the parties and third parties a communication
stating that it considered it inappropriate to decide this point by means of a preliminary ruling and that
it would pay special attention to the arguments of the third parties. In the light of the above and
without prejudice to the decision already taken by the Panel concerning the timing of its ruling on the
applicability of Article XIX of the GATT and the AS to the present dispute, Colombia is taking this
opportunity to comment on certain aspects of the Dominican Republic's request for a preliminary
ruling.
4. Specifically, the Dominican Republic suggests that Article XIX of the GATT 1994 and the
AS are not applicable to the measures challenged by the complainants. Colombia believes that the
main reason put forward by this Member is that the 38 per cent tariff surcharge does not exceed its
bound tariff of 40 per cent for tariff headings 5407.20 .20 and 6305.33.90, and that consequently there
is no suspension, in whole or in part, of tari ff concessions, as indicated in Article XIX of the
GATT 1994.
1
5. With respect to the possibility of pleading th e non-applicability of certain provisions within
the context of a preliminary ruling, the Domi nican Republic argues that paragraph 15 of the
Panel's working procedures in this case establishes th e possibility of requesting preliminary rulings, at
the latest, with the respondent's first written submission. 2 The Dominican Republic then connects this
procedure with the provisions of Articles 7.1, 7.2 and 11 of the DSU. 3 The Dominican Republic
develops its arguments on the basis of a panel's obligation to make an objective assessment of the
facts of the case, the applicability of the covered ag reements and the conformity of the former with
the latter, and asserts that it would be more useful to settle this question of the applicability of

1 Dominican Republic, Request for a preliminary ruling, Section 3.4, paragraphs 37-46.
2 Paragraph 15 of the Panel's working procedures.
3 Dominican Republic, Request for a preliminary ruling, Section 3.1.

Article XIX of the GATT 1994 and of the AS by m eans of a preliminary ruling, this being a
preliminary and global matter.
4
6. Colombia notes, in particular, two arguments ma de by the complainants in response to the
request for a preliminary ruling: (i) Article XIX of the GATT 1994 and the AS are applicable to the
measures in question, considering that the latter were the result of an investigation initiated,
conducted and concluded under their provisions and t hose of the national safeguards legislation;
moreover, the measures were notified in conformi ty with the procedures laid down for safeguard
measures5; and (ii) preliminary rulings deal with procedural issues and not matters of substance.6
7. The parties to this dispute disagree about what issues can form the subject of a preliminary
ruling. Colombia notes that preliminary rulings arose out of a practice among Members which has
been endorsed by panels and the Appellate Body
7; however, there is no provision in the DSU that
regulates this practice. On the other hand, Articles 11, 12, 13, 14, 15 and 16 of the DSU contain
specific provisions regarding panel reports. In this connection, Colombia notes that the general rule is
to issue a panel report and exceptionally a preliminar y ruling. Colombia also notes the relevance to
the analysis of this case of certain rules identified by panels and the Appellate Body. In particular, it
wishes to draw attention to the panel report in Canada – Aircraft in which, in relation to a discussion
over jurisdiction, the panel declined to give an advance ruling, as requested by one of the
parties (Canada), considering that there was no re quirement in the DSU or any established practice
that indicated an obligation to rule on a pr eliminary issue in advance of the panel report. 8 Moreover,
neither does paragraph 15 of the Panel's working procedures specify when the Panel should rule on
preliminary issues.
8. For Colombia, the rules that can be extracted from certain panel and Appellate Body reports
show that it is incumbent on whoever raises the pr eliminary question to demonstrate that the issuing
of a ruling in advance of the final report is justified. 9 In this connection, it should be borne in mind
that the general rule is for rulings to be made in the final report.
9. In Colombia's opinion, if a Member has stated that it is implementing a procedure aimed at
applying a safeguard measure and its actions thro ughout the investigation and notification process
have been consistent with the application of a me asure of this kind, then it would seem that to
maintain, during the course of panel proceedings, that its measure was not really a safeguard measure
would be inconsistent with its previous course of action. Within this context, it is relevant to consider
the application of Article 3.10 of the DSU and in par ticular the reference to the spirit of good faith in
which the parties should engage in the proceedings.

4 Dominican Republic, Request for a preliminary ruling, Section 3.2.
5 Objection of the complainants to the request for a preliminary ruling, Section III.B.3 and 4,
paragraphs 90, 124, etc.
6 Objection of the complainants to the request for a preliminary ruling, Section III.A.1 and 3,
paragraphs 14 to 21, 24 to 34.
7 The complainants acknowledge this in paragraph 14 of their written objection to the request for a
preliminary ruling and the Dominican Republic does so in paragraphs 13 and 27 of its request for a preliminary
ruling.
8 Panel Report in Canada – Aircraft, paragraph 9.15.
9 Considering that the argument used in this case is that of the usefulness of the preliminary ruling for
settling the present dispute, it is clear that this us efulness must actually be specifically identified and
demonstrated, not just mentioned. This conclusion is reinforced by the Appellate Body ruling in EC –
Hormones (paragraph 152), where an objection raised by a pa rty had to be sufficiently specific to enable the
Panel to address it.

III. THE DETERMINATION OF THE PRODUCT BEING IMPORTED AND THE
DOMESTIC PRODUCT IN THE AS
10. The complainant claims that the Dominican Repub lic: (i) failed to establish correctly that the
products imported and the domestic products were like or directly competitive
10 and (ii) wrongly
interpreted the term "producers" as used in the AS, with the result that domestic producers of directly
competitive products were excluded.11 Thus, the complainant concludes that the concept of "domestic
industry" in Article 4.1(c) of the AS was not properly established.
11. Colombia notes that the legal problem facing this Panel is specifically centred on determining
whether the inclusion of tubular fabric and polypropy lene bags in a single cat egory of products under
investigation is consistent with the Dominican Re public's obligations under the AS, especially with
respect to the concept of "domestic industry".
12. A fundamental element used in defining the dom estic industry is the determination of the
product under investigation, from the outset of the i nvestigation, since the scope given to this term
defines the context for determining where the "lik e or directly competitive products" are to be
situated, while also forming the basis for id entifying the domestic producers that make up the
domestic industry and the data needed to analyse the injury. An incorrect identification of the
products under analysis would necessarily lead to an inappropriate definition of the domestic industry.
Furthermore, according to the findings of the Appellate Body in US – Lamb, the identification of the
products which are like or directly competitive is the first step in determining the scope of the
"domestic industry".12
13. Like the complainants, Colombia is of the opi nion that this particular order of analysis
established in cases of anti-dumping investigations 13 should be applied to safeguard cases
mutatis mutandis, since it is the rational order for any safegua rd investigation, insofar as both its main
purpose and its scope revolve around the product under investigation.
14. Colombia agrees with the observations made by the Dominican Republic in paragraph 138 of
its first written submission, where it points out that there are no previous determinations concerning
how the product under investigati on should be defined under the AS and that there are no express
rules on this point. However, it does not agree w ith the Dominican Republic that this question is
completely unregulated by the AS and that there are therefore no clear criteria for defining how this
finding should be made.
15. Colombia suggests that a systemic interpretation of the AS under Article 31 of the
1969 Vienna Convention on the Law of Treaties (Vienna Convention) would yield sufficient evidence
to establish the meaning of "product under investiga tion" and how that product should be identified in
a safeguard investigation. The second paragraph of the preamble to the AS expressly states that the
Agreement clarifies and reinforces Article XI X of the GATT 1994 entitled "Emergency Action on

10 First written submission of the complainants, paragraphs 77-80.
11 First written submission of the complainants, paragraphs 160-163.
12 Appellate Body Report in US – Lamb, paragraph 87.
13 Footnote 89 of the first written submission of the complainants reads as follows:
"We note that in disputes concerning anti-dumping duties at least two panels have confirmed
that the starting point in the analysis of likeness is the definition of the imported product under
investigation, so that this product can be compared with the domestic product. See Panel
Reports in US – Softwood Lumber V , paragraphs 7.152 and 7.153, and EC – Salmon ,
paragraph 7.51."

Imports of Particular Products" (emphasis added), which suggests that the product it is intended to
investigate should be delimited and established using some sort of criterion. Likewise, Article 2.1 of
the AS specifies that "a Member may apply a safeguard measure to a product only if that Member has
determined, pursuant to the provisions set out belo w, that such product is being imported into its
territory in such increased quantiti es […]" (emphasis added). This Article is even more emphatic in
stipulating that the scope of the product on which th e safeguard measure is imposed (which should be
taken to mean the product under investigation itsel f) is fairly limited, inasmuch as it uses the
term product in the singular and not in the plural, as in other parts of the AS. If an exegetical
interpretation of the ordinary meaning of the words is applied, in accordance with the rule envisaged
in paragraph 1 of Article 31 of th e Vienna Convention, Article 2.1 of the AS would appear to indicate
that the product under investigati on could only be a single product and could not comprise multiple
products. However, Colombia considers that, in fact, the product under investigation can be made up
of several products, provided that it can be shown th at they are like or directly competitive. This
conclusion follows from the systemic interpretation of the AS.
16. Colombia considers that the rule in Article 4.1( c) of the AS also applies to the determination
of the product under investigation because of the close relationship between the definition of the
domestic industry and the product investigated. If it were not accepted that the products investigated
ought to be, at least, like or directly competitive, it would not be possible to make this finding with
respect to domestic products since it would be impossible to compare di ssimilar categories of
products. The present case involves precisely this si tuation: although it might perhaps be said that
the imported tubular fabric competes with or is like the domestic product, the same cannot be said
about the imported tubular fabric and domestic polypropylene bags. 14 Insofar as the standard of
Article 4.1(c) requires the domestic and imported products to be like or directly competitive, if the
"product investigated" contained products which in themselves were not, it would be impossible to
prove the existence of such likeness or direct comp etitiveness. Thus, if the definition of the product
investigated grouped together products which were not like or directly competitive, it would not be
possible to determine the domestic industry for the purposes of the investigation.
17. Colombia notes that the Dominican Republic h as not specified any criterion for establishing
how several products, i.e. tubular fabric and polypropy lene bags, can be included in a single category.
Apparently, this finding is based solely on considerations of a customs nature, as follows from
Section 3 et seq. of the final report of the Inves tigations Directorate of the Dominican Republic's
Regulatory Commission on Unfair Trade Practices and Safeguard Measures. 15 Acceptance of this
interpretation would run contrary to the principle of effectiveness in the interpretation of treaties
derived from Article 31 of the Vienna Convention16, inasmuch as it would enable products of virtually
any kind to be included as a single product in an i nvestigation, whatever the relationship between
them. Under this interpretation products as different as alcoholic beverages and dairy products could
be included in a single investigation since, accord ing to the Dominican Republic, there are no rules
that can be applied, a result that is manifestly absurd and contrary to the AS.

14 As will be explained later, Colo mbia considers that the argument according to which inputs are part
of a production chain is not sufficient to demonstrate a relationship of likeness or direct competitiveness.
15 Final Technical Report of the DEI, dated 13 July 2010.
16 In the following cases the Appellate Body referred to the application of the principle of effectiveness
in the interpretation of treaties in the cour se of settling disputes relating to the AS: Korea – Dairy ,
paragraphs 80-82, and Argentina – Footwear, paragraph 81.

18. In Colombia's opinion, the Panel should reject the Dominican Republic's argument according
to which, for reasons of a customs nature, the two products should be treated as the same product
investigated.
17
19. Colombia concludes that the grouping together of tubular fabric and polypropylene bags in a
single category of products under investigation, without making an analysis of likeness or direct
competitiveness between the products in question, is inconsistent with Articles 4.1(c), 3.1,
last sentence, and 4.2(c) of the AS.
IV. THE "UNFORESEEN DEVELOPMENTS AND EFFECT OF THE OBLIGATIONS"
REQUIREMENT UNDER ARTICLE XIX:1(a) OF THE GATT 1994 AND THE AS
20. With respect to this point, according to the complainants, the Dominican Republic was unable
to demonstrate the existence of unforeseen devel opments, insofar as it failed to give a reasoned
explanation of how (i) the entry into force of DR-C AFTA, (ii) the global financial crisis, and (iii) the
entry of China into the WTO constitute unforeseen de velopments that would justify the imposition of
a safeguard. For the complainants, the Dominican au thorities' explanations of why these events were
unforeseen developments are inadequate.
18
21. In Colombia's opinion, the Panel should take into account the fact that although there are
certain requirements which any Member of the WTO mu st satisfy in order to prove this element, the
standard cannot be construed in such a way as to preclude the application of the said developments
de facto by establishing requirements that are difficult to satisfy in practice.
22. In this connection, Colombia considers it re levant to clarify the concept of unforeseen
developments in such a way as to permit a clear a nd workable application of the concept, for the
purpose of enabling the application of safegua rd measures under the conditions envisaged in
Article XIX of the GATT 1994 and the AS.
V. ASSESSMENT OF THE INCREASE IN IMPORTS UNDER ARTICLE XIX OF THE
GATT 1994 AND THE AS
23. The complainants and the Dominican Republic are at one in accepting that the requirements
that must be met in determining the nature of the increase in imports for the purposes of
Articles XIX:1(a) of the GATT 1994 and 2.1 of the AS are those outlined by the Appellate Body in its
report in Argentina – Footwear.19 Moreover, they also agree that, as decided by the Appellate Body20,

17 See footnote 35.
18 Paragraph 197 of the first written submission of the complainants reads as follows:
"The Commission recognized the obligation incurred under Article XIX:1(a) of the GATT to
the effect that, in order to apply a safeguar d measure, it is necessa ry to show that the
unforeseen developments and the effect of the obligations incurred under the GATT are giving
rise to increased imports which are causing serious injury to the domestic industry. However,
the Commission did not establish any finding or well-founded conclusion that would
demonstrate the existence of unforeseen developments, or a logical connection between those
developments and the increased imports said to have caused serious injury to the domestic
industry. This omission by the Commission is therefore incompatible with Article XIX:1(a)
of the GATT and Articles 3.1, last sentence, 4.2(c) and 11.1(a) of the AS."
19 First written submission of the complainants, pa ragraph 241, and first written submission of the
Dominican Republic, paragraph 309.

in evaluating the increase the authorities should take the trend in imports during the period of
investigation into account rather than concentrate on one or more points.
21
24. Nevertheless, the complainants consider that the Dominican Republic's assessment of the
behaviour of imports during the period of inves tigation does not satisfy the above-mentioned legal
requirements and is therefore at odds with Articles XIX:1(a) of the GATT 1994 and 2.1, 3.1, 4.2(c)
and 6 (solely with respect to the preliminary determination) of the AS. 22 For its part, the
Dominican Republic claims to have made a proper assessment of the increase in imports, which
showed that that increase was sudden, sharp, significant and recent.23
25. Colombia considers that certain additional elemen ts could help to clarify how, in this specific
case, the increased imports criteria should be taken in to account. Colombia therefore wishes to draw
attention to the following aspects mentioned in panel and Appellate Body reports: (i) the increase in
imports should be assessed on a case-by-case basis 24; (ii) the analysis of the increase in imports
should be conducted with a view to establishing whet her it is such as "to cause or threaten to cause
serious injury to the domestic industry", that is to say, the increase in imports should be analysed in
the light of all the actions of the investigating au thority, in the same way as the determination of
injury and the causal link between the increased imports and the said injury25; (iii) the increase should
be assessed over a specific period of time and, rather than a comparison of the end points, should
involve consideration of the trends in imports over the period investigated.
26 Moreover, special
emphasis should be placed on analysing the data from the end of the period of investigation.27
26. Within this context, Colombia disagrees with the complainants' contention that there is a
general rule according to which a decrease towards the end of the period of investigation indicates
that there has not been an absolute increase in imports. 28 As the analysis should be made on a
case-by-case basis, there could be a case in which a decline in imports towards the end of the period
might not be significant and from a consideration of the whole of the increase during the period of
investigation it might be concluded that there was in fact an absolute increase in imports, despite their
decreasing towards the end of the period.29
27. Colombia considers that in examining whet her the Dominican Republic made a proper and
reasoned assessment of the increase in imports, the Panel should take into c onsideration the general
assessment criteria described above.

20 Appellate Body Report in Argentina – Footwear , paragraphs 129 and 130, and US – Steel
Safeguards, paragraph 354.
21 First written submission of the complainants, pa ragraph 243, and first written submission of the
Dominican Republic, paragraph 326.
22 First written submission of the complainants, paragraphs 27-284.
23 First written submission of the Dominican Republic, paragraphs 302-343.
24 Appellate Body Report in US – Steel Safeguards, paragraph 360.
25 Appellate Body Report in US – Steel Safeguards, paragraphs 345 and 346.
26 Appellate Body Reports in Argentina – Footwear , paragraph 129, and US – Steel Safeguards ,
paragraph 354.
27 Appellate Body Reports in US – Lamb , footnote 88 to paragraph 138, and US – Steel Safeguards ,
paragraph 370.
28 First written submission of the complainants, paragraph 247.
29 This was the analysis made by the Panel in US – Steel Safeguards with respect to increased imports
of rebar, paragraphs 10.224-10.225.

28. In addition, although in the light of the findi ngs of an increase in imports and the reasons
given by the Dominican Republic in the Final Te chnical Report it might be concluded that the
Dominican Republic made a reasoned assessment of that increase
30, Colombia has doubts about
whether the analysis was properly conducted, si nce following the determination of the product
investigated, the Dominican Republic restricted its assessment to the cumulative increase in imports
of tubular fabric and polypropylene bags.31 That is to say, it did not specify which of the two products
it was whose imports accounted for the increase reve aled in the above-mentioned trends. Therefore,
following the line of reasoning in Section III c oncerning the close relationship between the
determination of the product unde r investigation and its treatment in the AS, the conclusion
concerning the increase in imports and its causal link w ith the alleged injury is inadequate inasmuch
as it is not made clear which imports increased: impo rts of tubular fabric or imports of polypropylene
bags.
29. As this analysis is linked with that described in Section III, Colombia considers that if the
Panel were to conclude that the conditions describ ed in that section for two products to be grouped
together in a single category and under the same safeguard investigation were satisfied, the conclusion
with respect to this point should be consistent with that determination concerning the definition of the
product investigated. In Colombia's opinion, the Panel could make the AS much clearer by taking the
rule incorporated in Article 3.6 of the Anti-Du mping Agreement into account in the cumulative
analysis.
VI. DEFINITION OF THE CONCEPT OF "CRITICAL CIRCUMSTANCES" IN
ARTICLE 6 OF THE AS
30. The complainants consider that the Dominica n Republic has failed to show the "critical"
nature of the circumstances invoked in justifica tion of the imposition of the provisional measure.
32
For its part, the Dominican Republic considers that a finding concerning this measure would not help
to achieve a positive settlement of the dispute a nd that in any case it has explained the critical
circumstances and assessments required to establish the need for the provisional measure.33 Colombia
considers that the debate between the parties affo rds a unique opportunity for the Panel to rule on a
question which has not yet formed the subject of panel or Appellate Body rulings, namely: what
should be understood by "critical circumstances" in Article 6 of the AS.
31. In Colombia's opinion, based on a systemic interpretation of Article 6 of the AS 34, the Panel
could take into consideration as factors that make the damage "difficult to repair" aspects of the
economic reality of the enterprise such as: its stoc ks, its sales, its profit margins and the price of like
products, which should be compared with the most recent fluctuations (in the last six months) in
imports, in order to determine whether, if no provisional measure were imposed, the damage would be
difficult to repair.

30 Regulatory Commission on Unfair Trade Practices and Safeguard Measures, Final Technical Report,
viewed at: http://www.cdc.gob.do/docweb/informes/Informe%20Tecnico%20Final%20-Publico-.%20Caso%
20SG%20Tejido%20Tubular%20y%20Sacos%20de%20Polipropileno.pdf.
31 First written submission of the Dominican Republic, paragraph 307.
32 First written submission of the complainants, paragraphs 370-379.
33 First written submission of the Dominican Republic, paragraph 409.
34 That is to say, taking into account the fact that the purpose of safeguard measures is to counteract the
serious injury or threat of serious injury that increased imports may cause to domestic producers of like or
directly competitive products. Article XIX:1(a) of the GATT 1994.

VII. NOTIFICATION AND CONSULTATION REQUIREMENTS WITH RESPECT TO
SAFEGUARD MEASURES IN THE AS
32. According to the complainants, the Domini can Republic imposed the definitive measure
without making timely notification or providing Memb ers having a substantial interest in the products
investigated with an opportunity to hold the cons ultations mentioned in Article 12.3 of the AS and
Article XIX:2 of the GATT 1994. Likewise accordi ng to the complainants, the Dominican Republic
failed to afford an opportunity to obtain adequate means of trade compensation under Article 8.1 of
the AS and the Article XIX:2 of the GATT 1994.
35
33. Colombia considers that the failure of a Member to hold adequate prior consultations before
imposing a safeguard measure is a violation of the procedure laid down in Article 12.3 of the AS.
Moreover, the non-notification of a safeguard me asure before it is imposed is contrary to
Article XIX:2 of the GATT 1994.
VIII. CONCLUSION
34. Colombia considers that the present case ra ises important questions concerning the
application of Article XIX of the GATT 1994 and the AS. Although not taking a final position on all
aspects of the substance of the dispute, Colombia re quests the Panel carefully to review the scope of
the claims of the parties in the light of the observa tions made in this submission. Colombia reserves
the right to make additional comments in the section of the first hearing with the parties and the Panel
in which third parties are allowed to participate.

35 First written submission of the complainants, paragraphs 46-460.

ANNEX B-2

EXECUTIVE SUMMARY OF THE SUBMISSION OF
THE UNITED STATES

I. THE COMPLAINANTS PROPOSE THE WRONG APPROACH FOR
DETERMINING CAUSATION OF SERIOUS INJURY
1. Article 2.1 of the Safeguards Agreement states that a Member may apply a safeguard measure
only if the Member finds that the product in question is being imported "in such increased
quantities ... as to cause or threaten to cause serious in jury to the domestic industry". In their first
written submission, Costa Rica, El Salvador, Gu atemala, and Honduras (collectively "complaining
parties") argue that, under Article 2.1, the increase in imports of the product in question must be
"recent enough, sudden enough, shar p enough, and significant enough" to cause serious injury to the
domestic industry.
1 The complaining parties rely up on the Appellate Body's report in Argentina –
Footwear (EC) in support of their interpretation of Article 2.1. 2 As shown below, and contrary to the
complaining parties' assertion, the Safeguards Ag reement does not require such an approach to
determine the causation of serious injury under Article 2.1.
2. In United States – Steel Safeguards (AB) , the Appellate Body referenced the same passage
from Argentina – Footwear (EC) that the complaining parties rely upon in their first written
submission. The Appellate Body clarified that the statement in question was about "the entire
investigative responsibility of the competent aut horities under the Safeguards Agreement" and that
"whether an increase in imports is recent, sudden, sharp and significant enough to cause or threaten
serious injury are questions that are answered as the competent authorities proceed with the remainder
of their analysis (i.e. their consideration of serious injury/threat and causation)".3
3. Consequently, there is no basis for the complaining parties' assertion that Article 2.1 of the
Safeguards Agreement requires the competent authorities to conduct a separate analysis of the volume
of imports to determine whether it is "recent e nough, sudden enough, sharp enough, and significant
enough" to cause serious injury to the domestic industr y before proceeding to the rest of the analysis.
It is sufficient to find that they have increased, and then address through the remainder of the analysis
whether those increased imports cause serious injury or threat of serious injury.
II. THE METHOD OF PRODUCTION CAN BE RELEVANT FOR DETERMINING
THE LIKE OR DIRECTLY COMPETITIVE PRODUCT
4. Article 4.1(c) of the Safeguards Agreement de fines the "domestic industry" for purposes of
the injury analysis as the "producers ... of the like or directly competitive products". The complaining
parties argue that the Dominican Republic incorrectly defined the like or directly competitive product
under Article 4.1(c) in the course of its investigation. They argue that the competent authority for the
Dominican Republic, the Department of Investiga tions of the Regulatory Commission for Unfair

1 Complaining Parties' First Written Submission, paragraphs 239-248.
2 Complaining Parties' First Written Submission, paragraph 241.
3 Report of the Appellate Body, United States – Definitive Safeguard Measures on Imports of Certain
Steel Products , WT/DS248/AB/R; WT/DS249/AB/R; WT/DS251/AB/R; WT/DS252/AB/R;
WT/DS253/AB/R; WT/DS254/AB/R; WT/DS258/AB/R; WT/DS259/AB/R, adopted 10 December 2003,
paragraph 346 ("United States – Steel Safeguards (AB)").

Trade Practices and Protection Measures of the Do minican Republic ("DEI"), defined the like or
directly competitive product based, in part, on th e production process used - i.e. tubular fabric and
polypropylene sacks made from virgin resin.
4 According to the complaining parties, DEI did not treat
polypropylene sacks made from a different production process (e.g. polypropylene sacks made from
tubular fabric rather than virgin resin) as a like or directly competitive product. The complaining
parties contend that the exclusion of producers who did not use virgin resin from the domestic
industry is inconsistent with Article 4.1(c) of the Safeguards Agreement.
5. The United States takes no position regarding th e adequacy of the Dominican Republic's
approach to this issue in the challenged investigation, especially in light of the fact-intensive nature of
the analysis. It is helpful, however, to consider certain observations regard ing the determination of
like or directly competitive products under the Safeguards Agreement.
6. In United States – Lamb Meat (AB), the Appellate Body concluded that while the focus of the
like or directly competitive product inqui ry must be on the identification of the product , the
production process may provide information on the like or directly competitive nature between
products.
5 The Appellate Body further observed that "{w}e can ... envisage that in certain cases a
question may arise as to whether two articles are separate products. In that event, it may be relevant
to inquire into the production processes for those products".6
7. Indeed, one can envisage a scenar io in which the production process is highly relevant to the
like or directly competitive nature between two products due to the qualities the process imparts on
the product. For example, customers may dema nd items produced via a certain method because only
that method guarantees the requisite level of quality or adherence to a given tolerance level. Under
this scenario, products manufactured according to a different process may not be like or directly
competitive.
III. THERE IS NO GENERAL RULE REGARDING THE IMPACT OF DECREASES IN
IMPORTS TOWARD THE END OF THE PERIOD OF INVESTIGATION
8. Under Article 2.1 of the Safeguards Agreement, the competent authority must determine that
there are increased quantities of imports, either absolute or relative to domestic production, in order to
apply a safeguard measure. In paragraph 247 of their first written submission, the complaining parties
argue that, as a general rule, a decrease toward the e nd of the period of investigation is an indication
that there has been no ab solute increase in imports.7 According to the complaining parties, where the
record shows a decline in imports toward the end of the period of investigation, only exceptional
circumstances justify a finding by the competen t authority of increased absolute imports under
Article 2.1. The complaining parties purport to base their argument on the Appellate Body's report in
United States – Steel Safeguards (AB) . But United States – Steel Safeguards (AB) does not support
the complaining parties' proposed approach, and their position is otherwi se unsupportable under the
Safeguards Agreement.

4 Complaining Parties' First Written Submission, paragraph 129.
5 Report of the Appellate Body, United States – Safeguard Measures on Imports of Fresh, Chilled and
Frozen Lamb Meat from New Zealand and Australia , WT/DS177/AB/R, WT/D S178/AB/R, adopted
16 May 2001, paragraph 94, footnote 55 ("United States – Lamb Meat (AB)").
6 United States – Lamb Meat (AB), fn. 55.
7 Complaining Parties' First Written Submission, paragraph 129.

9. The Safeguards Agreement does not establish any particular methodology or analytic
framework for evaluating increased imports, nor does it place special emphasis on the level of imports
at the end of the period of investigation. Ar ticle 2.1 states that the competent authority must
determine "pursuant to" the other provisions of the Safeguards Agreement th at imports are taking
place "in such increased quantities, absolute or relative to domestic production ... as to cause or
threaten to cause serious injury to the domestic industry". Article 4.2(a), in turn, states that competent
authorities shall evaluate all relevant factors of an "objective and quantifiable nature" having a bearing
on the situation of the industry, including "the ra te and amount of increase in imports of the product
concerned in absolute and relative terms." Neither article provides any reference to the period of time
near the end of the period of investigation, nor othe rwise indicates any special role for any particular
period of time within the overall period of investigati on. Accordingly, there is no textual basis in the
Safeguards Agreement for the complaining parties' position.
10. Moreover, in United States – Steel Safeguards (AB) , the Appellate Body has explicitly
rejected the argument on decreased imports toward the end of the period of investigation now made
by the complaining parties. In that dispute, the Appellate Body stated that "Article 2.1 does not
require that imports need to be increasing at the time of the determination" and that it did " not believe
that a decrease in imports at the end of the period of investigation would necessarily prevent an
investigating authority from finding that, neverthe less, products continue to be imported 'in such
increased quantities'".
8 Indeed, for a number of the products in question in United States – Steel
Safeguards (Panel), the Panel found that the investigating authority's determination of imports in such
increased quantities was consistent with Article 2.1 notwithstanding a decline in imports toward the
end of the period of investigation.9
11. In sum, the Appellate Body did not establish in United States – Steel Safeguards (AB) a
general rule regarding decreases in imports toward the end of the period of investigation. The
Appellate Body found, rather, that given the magnitude of the decrease in imports toward the end of
the period of investigation for certain (but not all) products in that particular dispute, the competent
authority had not provided a reasoned and adequa te explanation of how the facts supported its
determination that the product was "being imported in … such increased quantities".
10
12. Accordingly, the complaining parties' assertion that there is a general rule regarding the
impact of decreases in imports toward the end of the period of investigation is erroneous.
IV. IMPORTS EXEMPTED FROM APPLICAT ION OF THE SAFEGUARD MEASURE
UNDER ARTICLE 9.1 ARE NOT EXEMPTED FROM THE INJURY AND
CAUSATION DETERMINATIONS UNDER ARTICLE 2.1
13. In their first written submission. the complaining parties also allege that the
Dominican Republic violated the requirements of "parallelism" under Articles 2.1 and 2.2 of the

8 United States – Steel Safeguards (AB), paragraph 367.
9 Report of the Panel, United States – Definitive Safeguard Measures on Imports of Certain Steel
Products, WT/DS248/R; WT/DS249/R; WT/DS251/R; WT/DS252/R; WT/DS253/R; WT/DS254/R;
WT/DS258/R; WT/DS259/R, adopted 10 December 2003, as modified by the Appellate Body Report,
WT/DS248/AB/R; WT/DS249/AB/R; WT/DS251/A B/R; WT/DS252/AB/R; WT/DS253/AB/R;
WT/DS254/AB/R; WT/DS258/AB/R; WT/DS259/AB/R, paragraph 10.224 (rebar), paragraph 10.233 (welded
pipe), and paragraph 10.253 (stainless steel bar) (" United States – Steel Safeguards (Panel) "). The
Appellate Body did not review the section of the Panel's report regarding increased imports of rebar, welded
pipe, and stainless steel bar.
10 United States – Steel Safeguards (AB), paragraph 368.

Safeguards Agreement.
11 The principle of parallelism deri ves from the use of the same text -
"product ... being imported" - to describe both the investigation conducted by the competent
authorities under Article 2.1 of the Safeguards Agre ement and the authority to impose a safeguard
measure under Article 2.2. The Ap pellate Body explained that "{i}n view of the identity of the
language in the two provisions, and in the absence of any contrary indication in the context, we
believe that it is appropriate to ascribe the same meaning to this phrase in Articles 2.1 and 2.2."12
14. The complaining parties assert that (1) the DEI exempted imports from developing country
Members (i.e. Mexico, Panama, Colombia, and Indon esia) from application of the safeguard measure
under Article 9.1 of the Safeguards Agreement 13, but that (2) the DEI included imports from these
countries in its analysis of injury and causation under Article 2.1. 14 According to the complaining
parties, the fact that imports from these four c ountries were exempted from the application of the
safeguard measure, but included in the injury and causation analysis, violates the requirements of
parallelism between analysis of injury and applica tion of the safeguard measure. The complaining
parties' argument is fatally flawed, however, because it compares Article 2.1 of the Safeguards
Agreement with Article 9.1, which is not included in the parallelism requirement.
15. Article 9.1 of the Safeguards Agreem ent states that "{s}afeguard measures shall not be
applied against a product originating in a developing c ountry Member as long as its share of imports
of the product concerned in the importing Memb er does not exceed 3 per cent, provided that
developing country Members with less than 3 per cent import share collectively account for not more
than 9 per cent of total imports of the product concerned".
15 Thus, while Article 9.1 acts as an
exception to the obligation under Article 2.2 of the Safeguards Agreement to apply safeguard
measures to "a product being imported regardless of its source", it does not create an exception from
the obligation under Article 2.1 to reach a determinati on with regard to all of the product. Assuming
that the Dominican Republic found that each of the four countries accounts for less than 3 per cent of
total imports and that it also found that the four countries collectively (and any other developing
countries that individually account for less than 3 per cent of total imports) do not account for more
than 9 per cent of total imports, there is no suppor t in the text of the Safeguards Agreement for the
complaining parties' argument that exemption from application of the safeguard measure for imports
from developing countries under Article 9.1 also n ecessitates exclusion from the injury and causation
analysis under Article 2.1.
16. Indeed, the Panel in Argentina – Footwear (Panel) affirmed that an exemption from
application of the measure pursuant to Article 9.1 of the Safeguards Agreement does not mandate
exclusion from the analysis under Article 2.1. The Pa nel observed that "Article 9 exempts, subject to
certain thresholds and limitations, imports from developing country Members from the imposition of
safeguard measures where the injury and causation fully reflect the effects of those imports from
developing countries".
16 In deciding not to extend the exemption from application of the safeguard
measure to the injury and causation anal ysis, the Panel reasoned "that where the

11 Complaining Parties' First Written Submission, paragraph 449.
12 Report of the Appellate Body, United States – Definitive Safeguard Measures on Imports of Wheat
Gluten from the European Communities , WT/DS166/AB/R, adopted 19 January 2001, paragraph 96
("United States – Wheat Gluten (AB)").
13 See Complaining Parties' First Written Submission, paragraph 54.
14 Complaining Parties' First Written Submission, paragraph 446.
15 Emphasis added.
16 Report of the Panel, Argentina – Safeguard Measures on Imports of Footwear , WT/DS121/R,
adopted 12 January 2000, as modified by the Appellate Body Report, WT/DS121, paragraph 8.85 (" Argentina –
Footwear (Panel)") (emphasis added).

Safeguards Agreement provides for an exception it does so in clear and explicit terms" and that no
such exemption was provided for in Article 2.1.
17. Accordingly, there is no basis for the complaining parties' assertion that the requirements of
parallelism under Articles 2.1 and 2. 2 of the Safeguards Agreement apply to imports exempted from
application of the safeguard measure by operation of Article 9.1.

ANNEX B-3

SUBMISSION OF NICARAGUA

I. INTRODUCTION
1. Nicaragua welcomes the opportunity to present its views in the proceedings initiated by
Costa Rica, El Salvador, Guatemala and Hondur as ("the complainants") with respect to the
consistency of the provisional safeguard measure and the definitive safeguard measure imposed by the
Dominican Republic on imports of polypropyle ne bags and tubular fabric, classified under
subheadings 5407.20.20 and 6305.33.90 of the Do minican Republic Tariff, with the General
Agreement on Tariffs and Trade 1994 ("GATT") and the Agreement on Safeguards ("AS").
2. Nicaragua has decided to participate as a third party in this dispute because of its systemic
interest in the correct interpretation of the provisions of the GATT 1994 and the Agreement on
Safeguards, as well as in the correct application of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU").
3. As a general matter, Nicaragua is of the view that the safeguard mechanism should only be
relied upon in exceptional circumstances and thus in emergency situations only, as is made clear by
the title of Article XIX of the GATT 1994. In the A ppellate Body's words, "Article XIX is clearly,
and in every way, an extraordinary remedy".
1 It should only be invoked when all of the strict
requirements set out in WTO law have been fulfille d, in particular because reliance on the safeguard
mechanism interferes with the fair conduct of trade performed by competitive exporters.
4. Nicaragua will limit its submission to the Domi nican Republic's request for a preliminary
ruling by the Panel ("Request") and to the issue of failure to comply with the requirement of
parallelism of the measures at issue, and reserves its right to comment at the third party session on
other issues of legal interpretation which it considers to be of particular interest.
II. REQUEST BY THE DOMINICAN REPUBLIC FOR A PRELIMINARY RULING ON
THE NON-APPLICABILITY OF ARTI CLE XIX OF THE GATT 1994 AND THE
AGREEMENT ON SAFEGUARDS
5. The Dominican Republic has requested the Pa nel to issue a preliminary ruling on the
non-applicability of Article XIX of the Genera l Agreement on Tariffs and Trade 1994 ("GATT") and
the Agreement on Safeguards ("AS") with respect to the measures at issue in this dispute.

1 Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy
Products, AB-1999-8, WT/DS98/AB/R, 14 December 1999, paragraph 86 (" Korea – Dairy"); Appellate Body
Report, Argentina – Safeguard Measures on Imports of Footwear , AB-1999-7, WT/DS121/AB/R,
14 December 1999, paragraph 93 ("Argentina – Footwear").

6. In support of its Request, the Dominican Republic relies, inter alia, on the following claims
and assertions:
 Paragraphs 37 and 38, in which it claims th at the legal provision in GATT Article XIX:

"is worded conditionally and consists of two parts: a first part establishing a series of
conditions ("If ... any product is being im ported ... in such increased quantities...")
that must be met in order that a WTO Member may take the course of action
described in the second part (the ... part y shall be free ..."). The remainder of
Article XIX sets forth a series of procedural requirements and disciplines that must be
observed in the event that such a measure is adopted. In other words, if the
conditions in the first part are satisfied, the WTO Member is authorized under the
preceding provision to adopt the course of action outlined in the second part,
provided that it complies with the disciplines and procedural requirements contained
in the remainder of Article XIX. If the firs t part is not fulfilled, no such authorization
will exist.
Conversely, if the course of action described in the second part of Article XIX:1(a) of
the GATT is not adopted, there is no need to meet the conditions set out at the
beginning of this provision or to comply with the disciplines and procedural
requirements in the remainder of Article XIX. The course of action which may, or
may not, be authorized is to suspend the oblig ation, in whole or in part, in respect of
the product, or to withdraw or modify the concession."
 Paragraphs 39 and 40, in which it asserts that:

"The course of action adopted by the Dominican Republic through the measures at
issue clearly does not constitute any of th e actions that may be authorized under
Article XIX of the GATT, because neither of the two measures, preliminary or
definitive, nor the underlying investigation involved a suspension, in whole or in part,
of the obligations in respect of such pr oduct. Nor was there any modification or
withdrawal of the concession."
"Given that the measures challenged by the complainants make no use of the
authorization established in the last pa rt of Article XIX:1(a), the conditions,
disciplines and procedural requirements established in the Article do not apply to the
measures in question."
 Paragraph 46, in which it c oncludes with the assertion that:

"the Dominican Republic has not suspended an obligation, in whole or in part, nor
has it modified or withdrawn a concessi on through the measures challenged by the
complainants. Hence, Article XIX of the GATT does not apply to the measures
challenged by the complainants."

 Paragraphs 47 and 48, in whic h it claims and concludes that:

"As stated in Article I of the AS:
"This Agreement establishes rules for the a pplication of safeguard measures which
shall be understood to mean those meas ures provided for in Article XIX of
GATT 1994.
Given that the measures at issue did not consist of any of those envisaged in
Article XIX of the GATT, as explained above in the light of the ordinary meaning of
the terms of Article XIX and its object and purpose, the rules established in the AS do
not apply."
7. In order to justify the above, the Dominican Re public applies the definitive measure as an
alternative duty to the MFN tariff, and this is not a measure that would have been provided for in the
country's Schedule of Concessions, presumably in order to circumvent its WTO obligations.
8. Nicaragua submits that the Request of the Dominican Republic does not find support in, and
is rather contrary to, Article XIX of the General Ag reement on Tariffs and Trade 1994 and the
Agreement on Safeguards and unduly impairs the rights conferred upon Members by the
WTO Agreement. Accordingly, it respectfully requests that the Panel reject the Dominican Republic's
request.
9. Moreover, we consider that the sui generis application of the definitive safeguard measure by
the Dominican Republic undermines the security and pr edictability of the multilateral trading system
and that these should be assured by the WTO dispute settlement system.
III. FAILURE TO COMPLY WITH THE REQUIREMENT OF PARALLELISM OF THE
MEASURES AT ISSUE
10. Nicaragua agrees with the complainants th at, although Mexico, Panama, Colombia and
Indonesia are excluded from the scope of the provisi onal and definitive safegua rd measures imposed
by the Dominican Republic on imports of polypropyle ne bags and tubular fabric, classified under
subheadings 5407.20.20, 6305.33.10 and 6305.33.90 of the Tariff of the Dominican Republic, the
investigating authority of the Dominican Republic , i.e. the Regulatory Commission on Unfair Trade
Practices and Safeguard Measures of the Dominica n Republic, failed to conduct a new analysis of
increased imports, the alleged serious injury and causality. Neither the reports nor the preliminary
and final resolutions gave any r easons as to why it was not necessary to observe parallelism between
the scope of the provisional and definitive measures and the scope of the imports under investigation.
11. We consider that the Appellate Body's statement in US – Line Pipe applies in this regard:
... "establish[ing] explicitly" implies that the competent authorities must provide a " reasoned and
adequate explanation of how the facts support their determination".
1 "… To be explicit, a statement
must express distinctly all that is meant; it must leave nothing merely implied or suggested; it must
be clear and unambiguous."
2

1 Appellate Body Report, US – Line Pipe (WT/DS202/AB/R), paragraph 181.
2 Ibid., paragraph 194.

ANNEX B-4

EXECUTIVE SUMMARY OF THE SUBMISSION OF PANAMA

I. INTRODUCTION
1. Panama intervenes in this dispute because it considers that the definitive safeguard measure of
the order of thirty-eight per cent (38%) ad valorem imposed by the Dominican Republic on imports of
tubular fabric and polypropylene bags, classified under subheadings 5407.20.20 and 6305.33.90 of the
Fourth Amendment to the Dominican Republic's Cust oms Tariff, is inconsistent with the Agreement
on Safeguards (AS) of the World Trade Organization (WTO).
2. The Dominican Republic failed to consider importa nt elements of procedure set forth in the
AS; the obligation stipulated in Articles 12.3 of the AS and XIX:2 of the GATT to give timely notice
and hold prior consultati ons with Members having a substantial interest in the measure was not
fulfilled, nor were opportunities provided to obtai n adequate means of trade compensation, as
established in Articles 8.1 of the AS and XIX:2 of the GATT.
3. Panama also considers that ther e are flaws in the investigation conducted by the Investigating
Authority of the Dominican Republic, particular ly in the approaches to the following:
(i) determination of the domestic industry; (ii) establishment of the existence of unforeseen
developments that may have caused injury to the dom estic industry; (iii) determination of increased
imports; (iv) determination of injury; and (v) cau sal link between the imports and injury, as will be
discussed below.
II. NO OPPORTUNITIES WERE PROVIDED FOR PRIOR CONSULTATIONS AND
REACHING AN UNDERSTANDING ON TRADE COMPENSATION
4. The Dominican Republic initiated a safeguard s procedure, which was notified to the
Committee on Safeguards pursuant to Article 12.1(a) of the AS
1, without any opportunity being
provided for prior consultations, as stipulated in Ar ticle 12.3 of the AS, with a view to reaching an
agreement on trade compensation as required by Article 8.1.
5. The Dominican Republic failed to meet the ob ligation to notify the definitive safeguard
measure in a timely fashion so as to allow Members ha ving a substantial interest in the matter to hold
prior consultations, as provided for in Article 12.3 of the AS.
III. INCONSISTENCY IN THE DEFINITION OF DOMESTIC INDUSTRY
6. The Dominican Republic defined the product as bot h the input (tubular fabric) and the final
product (polypropylene bag), indicating that both are of the same nature and that they should be
considered as a single product. In so doing, the Investigating Authority failed to prove in its
investigation that the input and the final product are directly competitive or like products, as
established by the Appellate Body in United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia . The Dominican Republic thus
defined the domestic industry in a manner inconsistent with Articles 4.1(c) and 2.1 of the AS.

1 G/SG/N/6/DOM/3 of 14 January 2010.

7. As regards the domestic industry, in defining producers the Investigating Authority of the
Dominican Republic failed to consider the provisions of the AS inasmuch as it: (a) excluded from the
domestic industry other producers that qualified at the same level as those assessed in the
investigation; and (b) for the purposes of applying the safeguard measure, it included the producers of
the inputs (tubular fabric) and the producers of the final product (polypropylene bags) without
distinguishing between the two.
IV. FAILURE TO DEMONSTRATE UNFORESEEN DEVELOPMENTS RESULTING IN
INCREASED IMPORTS SUCH AS TO CAUSE SERIOUS INJURY
8. There was no indication that the Investigating Authority of the Dominican Republic
demonstrated conclusively and with sufficient evidence that unforeseen developments directly
affecting the domestic industry had occurred, nor did it successfully demonstrate a logical connection
between the conditions set forth in Article XIX of the GATT and those unforeseen developments.
V. LACK OF DEMONSTRATION OF A RECENT, SUDDEN, SHARP AND
SIGNIFICANT INCREASE IN IMPORTS
9. There is no supporting determination in the inv estigation to show that the imports underwent
a recent, sudden, sharp and significant increase.
10. There is no indication, in the conclusions r eached by the Investiga ting Authority of the
Dominican Republic at the end of the import investigation, of a demonstration that the increase in
imports displayed the characteristics of being sudden, sharp, recent and significant, as required under
the AS for the purposes of substantiation. Therefore the measures imposed are, in our view,
inconsistent with Articles XIX of the GATT and 2.1, 4.2(c), 6 and 11.1(a) of the AS.
VI. LACK OF PREMISES FOR THE DETERMINATION OF SERIOUS INJURY
11. Panama considers that the Investigating Aut hority of the Dominican Republic did not carry
out a detailed analysis for purposes of determini ng the serious injury sustained by the domestic
industry, nor did it produce objective and positive evidence in support of its investigation or the
application of the safeguard measures adopted.
12. The lack of substantiation by the Dominican Republic of the factors corroborating serious
injury is inconsistent with Articles 4.2(a) and 2.1 of the AS.
VII. LACK OF JUSTIFICATION OF CAUSATION
13. The Investigating Authority of the Dominica n Republic provided no justification for the
determination of serious injury and causation in respect of a domestic industry that enjoys a
favourable position; moreover, it provided no sup porting evidence to show that the industry is
currently being affected by the alleged increase in imports, nor did it identify other factors that might
have affected the domestic industry and that bear no direct relation to the imports.
14. Panama considers that in the investigation c onducted by the Investigating Authority of the
Dominican Republic there were flaws in establishing the causal link between the allegedly unforeseen
increase in imports and the alleged injury to the dom estic industry, since it was not demonstrated that
the imports were a sufficient and necessary cause fo r the alleged serious injury sustained by the

domestic industry, particularly with respect to th e financial losses and alleged decline in production
and consumption of the domestic product.
VIII. CONCLUSION
15. The Panel is requested to examine the acti ons of the Investigating Authority of the
Dominican Republic as regards compliance with the pr ocedures set forth in the AS and in particular
the consultation procedure established in Article 12.3 in conjunction with Article 8.1 of the
Agreement; and to review the Dominican Republic's failure to comply with the provisions of the
GATT and the AS, as shown in this document.

ANNEX B-5

SUBMISSION OF TURKEY

I. INTRODUCTION
1. Turkey thanks the Panel for giving the opportuni ty to present its views in the proceedings of
the dispute. Turkey is participating in this case because of its systemic interest in the interpretation
and implementation of the Agreemen t on Safeguards. Turkey would like to highlight the importance
of imposing such measures in conformity with WTO obligations and its basic principles.
2. In this submission, Turkey is not in the inte ntion to present an opinion on the specific factual
context of this dispute and takes no position whatsoever as to the defence and allegations presented by
the parties on whether the specific measure at issue is inconsistent with the subject provisions of the
WTO Agreements. Turkey wishes to contribute by expressing its opinion on some systemic issues
regarding the interpretation of the provisions of the Agreement on Safeguards.
3. Therefore, with this submission, Turkey ai ms to contribute to the Panel's analysis by
interpreting the relationship between two provision s of the Agreement on Safeguards; Article 2.2
which determines the general rule as to how safegua rd measures are to be applied and Article 9.1
which encloses special and differential rules to be applied to developing countries.
II. APPLICATION OF SAFEGUARD MEASURES TO DEVELOPING COUNTRIES
4. As is known, Article 2 of the Agreement on Safeguards determines the conditions for a
WTO Member country to apply safeguard measures. While paragraph 1 of this provision stipulates
the general conditions for a member to apply a saf eguard measure, paragraph 2 of this provision
determines that the measure to be taken shall be appl ied to all products being imported to the territory
of that country irrespective of their source.
 "Article 2: Conditions

1. A Member may apply a safeguard measure to a product only if that Member
has determined, pursuant to the provisions set out below, that such product is being
imported into its territory in such increased quantities, absolute or relative to domestic
production, and under such conditions as to cause or threaten to cause serious injury
to the domestic industry that produces like or directly competitive products.
2. Safeguard measures shall be applied to a product being imported irrespective
of its source."
5. Article 2.2 sets forth an important obligati on that a safeguard measure be imposed on the
imported product "irrespective of its source". In other words, safeguard measures are in principle
imposed on an MFN basis. In this regard, safegua rd measures have to be taken in reaction to an
increase in imports, from whatever source and not imports from a particular country.

6. On the other hand, Article 9.1 of the Agreemen t on Safeguards offers special and differential
treatment to developing countries. Article 9.1 of the Agreement reads as follows:
 "Article 9: Developing Country Members

1. Safeguard measures shall not be appl ied against a product originating in a
developing country Member as long as its sh are of imports of the product concerned
in the importing Member does not exceed 3 per cent, provided that developing
country Members with less than 3 per cent import share collectively account for not
more than 9 per cent of total imports of the product concerned."
7. According to the wording of Article 9.1 of the Agreement on Safeguards, safeguard measures
shall not be applied to a developing country Member on the account that two conditions exist. These
are (i) the share of imports of a certain product originating from the developing country shall not
exceed 3 per cent among the imports of that product by the country applying the safeguards measure
and (ii) the amount of imports from developing count ry Members which meet the first condition shall
account for less than 9 per cent of the total amount of imports of that certain product by the country
applying the safeguard measure.
8. On the basis of this interpretation, Article 9. 1 provides a mandatory "special and differential
treatment" in favour of developing countries. Tu rkey would like to emphasize that the term "shall"
which is enclosed in Article 9.1 of the Agreem ent on Safeguards provides an obligation for Members
to apply "special and differential treatment" to all developing countries that meet the conditions
provided above. Therefore, Turkey believes that safeguard measure shall not be applied to all
developing countries, whose total export to that country is below the threshold level of 3 per cent. In
this respect, pursuant to the Article 9.1 of the WTO Safeguard Agreement; Turkey, as a developing
country, shall be excluded from this measure.
III. CONCLUSION
9. Turkey appreciates this opportunity to present its views to the Panel. Turkey requests the
Panel to review the comments stated in this submission, in interpreting the Agreement on Safeguards.

ANNEX B-6

EXECUTIVE SUMMARY OF THE SUBMISSION OF
THE EUROPEAN UNION

I. APPLICABILITY OF THE AGREEMENT ON SAFEGUARDS
1. The Complainants appear to argue, among other things, that the Agreement on Safeguards
applies with regard to any measures which are aime d at preventing or remedying injury caused by an
increase in imports. For the reasons set out below, th e European Union considers that this is indeed a
necessary condition for the application of the Agreement on Safeguards, but not a sufficient condition
in itself.
2. The Dominican Republic's request must be ex amined in the light of Article 1 of the
Agreement on Safeguards . Article 1 makes it clear that the Agreement on Safeguards is concerned
only with the application of measures of the type "provided for in Article XIX of GATT 1994", to the
exclusion of any other safeguard measures.
3. In the European Union's view, the determin ation of whether a measure belongs to the
category of safeguard measures "provided for in Article XIX of GATT 1994" is an objective
determination, to be made having regard to each measure's structure and design. The subjective intent
of the Member applying the measure may provide a useful indication, but can never be dispositive.
Otherwise, the applicability of the Agreement on Safeguards would be left to the applying Member's
own discretion.
4. The European Union considers that a safeguard measure is of the type "provided for in
Article XIX of GATT 1994" where it has the following two characteristics: (1) it purports to remedy
injury caused by an increase in im ports; and (2) it involves the suspension of an obligation or the
withdrawal or modification of a concession under the GATT 1994. By denying the relevance of the
second of the above-mentioned characteristics, th e Complainants fail to recognize the specific
function of Article XIX within the GATT 1994 , which, as made clear by the last part of
Article XIX:1(a), is to authorise emergency ac tion that would be otherwise prohibited by the
GATT 1994.
5. Should the Complainants' views prevail in this dispute, any Member would ever consider in
its interest to subject itself to the strictures of the Agreement on Safeguards in order to take measures
which it could, in any event, adopt without the requirements of that agreement, simply by refraining
from characterizing those measures as a response to an increase in injurious imports.
6. Furthermore, the European Union is concerne d about the possible unintended consequences
of the Complainants' interpretation. For example, the trade laws of many WTO Members, including
the European Union, provide for the possibility of suspending the tariff preferences accorded under a
Free Trade Area ("FTA") Agreement or unilaterally as part of a GSP scheme in response to injury
caused by an increase in the preferential imports con cerned. Those measures are often referred to as
"safeguard measures" under the relevant FTA agreem ents or applicable domestic laws. But it is
generally understood that they fall outside the scope of Article XIX of GATT 1994 because they do
not involve the suspension of any obligation or th e withdrawal or modification of any concessions
under the GATT 1994.

7. First, in addressing the Dominican Republican's request it is relevant to consider also
Article 11.1(a) of the Agreement on Safeguards . The terms "shall not take or seek" indicate that the
applicability of the obligations provided in the Agreement on Safeguards is not conditional upon a
Member having effectively taken a safeguard measur e of the type "provided for in Article XIX of
GATT 1994". The Agreement on Safeguards governs the conduct of i nvestigations opened with a
view to the possible imposition of a safeguard measure of the type provided for in Article XIX of
GATT 1994, even if no such measure is eventually imposed as a result of the investigation.
8. Second, the measures at issue do involve the su spension of certain GATT obligations of the
Dominican Republic in so far as they do not a pply with regard to all imports of like products
originating in all WTO Members. The Dominican Republic has exempted from their application
certain developing countries whose imports do not exceed the thresholds set out in Article 9.1 of the
Agreement on Safeguards . This exemption involves a manifest "suspension" of the
Dominican Republic's obligations under Article I:1 of the GATT 1994.
9. On the other hand, the European Union does not see merit in the Complainants' allegation that
the measures at issue also amount to a suspensi on of the Dominican Republic's obligations under
Article II:1(b) of the GATT 1994. Clearly, the intention of the Do minican authorities was to increase
the rate of the applicable "ordinary customs duty", rather than applying "other charges or duties" on
top of the ordinary customs duty. Contrary to what the Complainants appear to argue, the fact that the
measures in dispute apply in place of the pre-ex isting MFN ordinary duty, rather than cumulatively
with that duty, does not support, but rather undermines their claim under Article II:1(b); and the same
is true of their argument based on the fact that th e measures in dispute are applied in parallel with the
pre-existing duty rate, which continues to be applicab le to imports originating in developing countries
excluded from the scope of the measures in dispute.
II. DEFINITIONS OF PRODUCT UNDER CONSIDERATION AND DOMESTIC
INDUSTRY
10. Whilst not entering into the reasons provided by the investigating authority to treat both the
final product (i.e. polypropylene bags) and the inpu t (i.e. tubular fabric) as one single product under
investigation, the European Union c onsiders that Article 4.1(c) of the Agreement on Safeguards does
not require an assessment of likeness or dir ect competition when defining the product under
investigation.
11. The Agreement on Safeguards does not contain a definition of product under investigation or
product concerned. It addresses the application of safeguard measures to "a product" in general and
"irrespective of its source". The absence of a defi nition indicates the intention of the negotiators to
leave Members with a wide discretion when defining the product concerned.
12. The definition of the product concerned serves as the basis for determining which products
and producers should be taken into account as the relevant output for the purposes of defining the
domestic industry. In this respect, Article 4.1(c) requires that "domestic industry" is composed of
producers of the like or directly competitive domest ic products. The concept of likeness or direct
competition is relevant to maintain the paralle lism between the product under investigation and the
like or directly competitive domestic products.
13. The European Union considers that in US – Lamb the Appellate Body did not conclude that
there are limits in the definition of the product con cerned. In that case the Appellate Body noted that,
under Article 4.1(c) of the Agreement on Safeguards, input products can only be included in defining

the "domestic industry" if they are "like or direc tly competitive" with the end-products. In this
respect, the European Union agrees that the para llelism between the product concerned and the like or
directly competitive domestic products that conform to the domestic industry is broken if inputs are
not like or in direct competition with the product concerned. However, in a case where the product
concerned is composed of both inputs and the final product, the European Union does not see any
obstacle in the Agreement on Safeguards to include both inputs and the final products as the like or
directly competitive domestic products for the purpose of defining domestic industry.
14. Consequently, the European Union considers that insofar as the parallelism between the
product under investigation (including both inputs a nd the final product) and the like or directly
competitive domestic products (including both inputs and the final product) is maintained, the
definition of domestic industry will conform to Article 4.1(c) of the Agreement on Safeguards ,
without the need to establish that both inputs an d the final product are like or directly competitive
products.
15. In the present case it would appear that there was no parallelism if the domestic products were
limited to tubular fabric and polypropylene bags made out of raw resin, whereas the product under
investigation covered tubular fabric and polypropylene bags regardless of whether they were made out
of raw resin. Indeed, if the final products are iden tical or directly competitive regardless of their
production process, then producers of those produc ts cannot be excluded from the definition of
domestic industry.
16. Moreover, the European Union observes that several domestic producers were excluded from
the definition of domestic industry because they were themselves importers of the product under
investigation (i.e. the input, tubular fabric). It would appear that under Article 4.1(c) of the
Agreement on Safeguards , in order to consider whether a company is a "producer" of the like or
directly competitive product which should be incl uded in the definition of domestic industry, the
focus lies on the essential nature of the business activ ities of a given enterprise, as manufacturing an
article or bringing a thing into existence. If th e company concerned is merely an importer of the
product under investigation, it would not qualify as a "producer" and then it can be excluded from the
definition of domestic industry. In any event, in a situation where the company imports 100 per cent
of the input covered by the definition of the pr oduct under investigation but then produces the final
product covered by the same definition, it would app ear difficult to conclude that such a company is
not a producer of the like or directly competitive product.
III. UNFORESEEN DEVELOPMENTS
17. Contrary to the suggestions made by the Dominican Republic, the Appellate Body has spoken
unambiguously on this issue. In both Argentina – Footwear Safeguard and Korea – Dairy Safeguard
the Appellate Body reversed the panel's findings to the effect that the "unforeseen developments"
clause in Article XIX:1(a) of the GATT 1994 imposes no additional obligations upon Members. In US
– Lamb the Appellate Body confirmed the above findi ngs and went out to rule that that the
demonstration of "unforeseen developments" must be made before imposing the safeguard measures.
18. The Appellate Body has clarified that, alt hough its reports are not binding, except with
respect to resolving the particular dispute between the parties, subsequent panels "are not free to
disregard the legal interpretations and the ratio decidendi contained in previous Appellate Body
reports that have been adopted by the DSB".

19. The Dominican Republic has not invoked any "c ogent reason" why the Panel should depart
from the legal interpretations made by the Appellate Body in the re ports cited above. Rather, the
Dominican Republic bases its contention that the "unforeseen developments" clause is not legally
binding on the allegation that the Agreement on Safeguard "constitutes an exhaustive agreement" and
does not provide for such an obligation. In view of this, the European Union considers that the Panel
need not engage in a detailed examination of this argument, which could be summarily dismissed by
referring to the existing case law of the Appellate Body.
20. The European Union notes that one of the " unforeseen developments" now mentioned by the
Dominican Republic is the increase in duty free imports under certain FTA agreements with other
Central American and North American countries. However, even assuming that such an increase
could be regarded as a genuine "unforeseeable deve lopment", it is plain that it would not be the
"effect" of the obligations incurred by the Dominican Republic under the GATT 1994, as required by
Article XIX:1(a). Rather, it would be the "effect" of obligations incurred by the Dominican Republic
under the FTA agreements in question. Therefore, that development could not provide a basis for the
imposition of safeguard measur es under Article XIX of the GATT 1994 and the Agreement on
Safeguards. Instead, that development should have b een addressed by the imposition of bilateral
safeguard measures withdrawing the preferential dut y-free treatment in accordance with the relevant
provisions of each FTA agreement concerned.
IV. CONCLUSIONS
21. While not taking a final position on the merits of the case, the European Union requests this
Panel to carefully review the scope of the claims in light of the observations made in this submission.

ANNEX C

ORAL STATEMENTS OF THE PARTIES AT THE FIRST SUBSTANTIVE
MEETING OR EXECUTIVE SUMMARIES THEREOF

Contents Page
C-1 Executive summary of the opening oral statement of the
complainants
C-2
C-2 Executive Summary of the opening oral statement of the
Dominican Republic
C-11
C-3 Closing oral statement of the complainants C-17
C-4 Closing oral statement of the Dominican Republic C-19

ANNEX C-1

EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF
THE COMPLAINANTS

I. APPLICABILITY OF ARTICLE XIX OF THE GATT AND THE AS
1. The Dominican Republic argues that Article XIX of the GATT and the AS are not applicable
to the measures at issue since they are applied at a level belo w the bound tariff for the tariff headings
concerned.
2. The Dominican Republic's defence relates only to the provisional and definitive safeguard
measures that were imposed. It does not touch on the investigation and the acts preceding application
of the measure, nor does it affect the applicability of the AS and of Article XIX to the claims
concerning notification, the conduct of consultations and the offer of means of trade compensation, as
provided for in Articles 8 and 12 of the AS.
3. The Dominican Republic seeks to ignore the f act that it initiated and carried out an
investigation procedure under the AS and Article XIX, as well as under its own domestic legislation
on trade remedies, with a view to imposing safegua rd measures within the meaning of Article XIX
and the AS. This was affirmed by the Dominican Republic itself.
1
4. The Dominican Republic justified the exclusi on of certain imports from the scope of the
measure on the basis of Article 9.1 of the AS; it notified the WTO Committee on Safeguards of the
opening of the investigation, the adoption of the provisional measure and the adoption of the
definitive measure and ordered notification of the first stage in the phasing out of the measure; it
replied to Colombia that the inves tigation and the measures at issue we re subject to the provisions of
Article XIX and the AS; and lastly, by means of a press release it publicly explained that the
investigation and the imposition of provisional and definitive measures were carried out on the basis
of the AS and Article XIX, as well as domestic legislation on trade remedies.
2
5. Although the measures at issue do not exceed the bound tariff of 40 per cent ad valorem, they
consist of duties and charges other than ordina ry customs duties and they are applied in a
discriminatory manner on imports of certain Members. The safeguard measures therefore effectively
suspend the Dominican Republic's obligations unde r Articles II:1(a) and II:1(b), second sentence, as
well as under Article I:1 of the GATT regarding the MFN principle, respectively.3
6. Any measure that exceeds what is "necessary", in magnitude or time-scale, stands in violation
of Articles 5.1 and 7.1 of the AS, even if the measu res are not inconsistent with general obligations
under the GATT or are higher or lower than the bound tariff. Otherwise, if this level of
"proportionality" between serious injury and the trad e remedy were not maintained, "legitimate" trade

1 Initial report, pages 4 and 5; preliminary report, pages 5 and 6.
2 Exhibits CEGH-17, 18, 32, RDO-1 and CEGH 24 and 25, respectively.
3 Reply of Costa Rica, El Salvador, Guatemala and Honduras to the request for a preliminary ruling of
the Dominican Republic, submitted on 3 May 2011, paragraphs 109-111.

would be affected and "competition in international markets" would be limited rather than enhanced,
which is in all respects at variance with the object and purpose of the AS.
4
7. The action taken by other panels and by the Appellate Body in two safeguard disputes,
Argentina – Footwear and Korea – Dairy , implicitly confirms that the applicability of Article XIX
and of the AS does not depend on whether the safe guards are higher or lower than the respective
bound tariffs.
II. PRELIMINARY OBJECTIONS CONCERNING THE TERMS OF REFERENCE
8. Set out below are our replies to the objections to the complaints relating to Articles I:1, II:1(a)
and II:1(b) of the GATT. Our second written subm ission will give a detailed reply to the other
preliminary objections.
(i) Alleged withdrawal of certain complaints

9. The Dominican Republic contends that the comp laining parties have decided to withdraw
various complaints, including those relating to Article I:1 of the GATT and Articles II:1(a) and II:1(b)
of the GATT, since, in its opinion, these were not developed in the first submission of the
complainants.
5
10. The Dominican Republic's request is invalid since the complaints it challenges were set out in
our first written submission and they were subsequent ly developed in greater detail in our reply to the
Dominican Republic's request for a preliminary ruling. The Appellate Body has indicated that there is
no obligation to set out all claims in the first written submission to the Panel.6
(ii) Objection concerning complaints not co ntained in the request for consultations

11. The Dominican Republic also argues that certain complaints contained in our request for the
establishment of a Panel should remain outside the terms of reference of the Panel, being "new
complaints" because they are not included in the request for consultations.7
12. The Appellate Body has firmly upheld the view that the legal basis for the request for
consultations and the basis of the panel request s hould not necessarily be identical, provided that the
latter can reasonably be inferred from the basis for the request for consultations. 8 The Panel in China
– Audiovisual Products concluded that it is important to analyse the relationship between the
obligations imposed by the provisions cited in the request for consultations and those cited in the
panel request.9

4 Preamble of the AS, third paragraph.
5 First written submission of the Dominican Republic, paragraph 86.
6 Appellate Body Report, EC – Bananas , paragraph 145; see also Panel Report, China – Audiovisual
Products.
7 First written submission of the Dominican Republic, paragraphs 87-89.
8 Appellate Body Report, Mexico – Rice , paragraph 138; Appellate Body Report, Brazil – Aircraft ,
paragraph 132; Appellate Body Report, US – Cotton , paragraph 293; Panel Report, China – Audiovisual
Products, paragraph 7.121; Panel Report, US – Poultry , paragraph 7.46; Panel Report, EC – Fasteners ,
paragraph 7.24.
9 Panel Report, China – Audiovisual Products, paragraph 7.121.

13. In view of the possibility that the Dominican Re public might seek to argue in its defence that
the measure is not a safeguard measure, the complain ants made clear in their request for consultations
their intention to reserve the right to raise other claims under the GATT. This emerges from the
penultimate paragraph of the request for consultations.
10 It is appropriate to point out that, during the
consultations, there was an exchange of inform ation on the discriminatory exclusion of certain
imports from the scope of application of the measur es, as well as on the nature of the measures in the
context of the legal system in force in the Dominican Republic.
14. The complaint relating to the most-favoured-na tion obligation is based on Article I:1 of the
GATT, which is closely linked to Article 2.2 of the AS inasmuch as both articles deal with the
most-favoured-nation principle. Article 2.2 of the AS is expressly included in the request for
consultations.
11 The complaints concerning the nature of the duties adopted as import charges are
based on Articles II:1(a) and II:1(b) of the GATT, which are linked to Article XIX itself of the GATT.
The tariff concessions referred to in Article XIX are subject "to the obligations contained in Article II
of the GATT 1994".12
15. In addition, the precedent from US – Poultry is applicable 13, given that, inasmuch as the
request for consultations contains a clear reserva tion regarding the right to raise other matters under
the GATT 1994 and on the basis of the discussions he ld during the consultations, the complainants
reworded their complaints and included in their pa nel request arguments under Articles I and II of the
GATT.
16. By reason of the foregoing, this Panel should conc lude that the complaints under Articles I:1,
II:1(a) and II:1(b) of the GATT fall within the terms of reference of this dispute.
III. CLAIM RELATING TO UNFORESEEN DEVELOPMENTS AND THE EFFECT OF
THE OBLIGATIONS INCURRED UNDER THE GATT
17. The Dominican Republic failed to issue ade quate or reasoned findings, conclusions or
explanations to demonstrate unforeseen developments. 14 In response to this claim, the
Dominican Republic questions the binding nature of Article XIX:1(a) with regard to unforeseen
developments.
18. The obligation to consider unforeseen developmen ts is an issue that was decided by the
Appellate Body, in conclusive and unequivocal terms, in 1999 in the Argentina – Footwear and Korea
– Dairy disputes. The Dominican Republic has presente d no compelling reason to justify deviating
from the Appellate Body's viewpoint.15
19. The Dominican Republic's investigating authority its elf, in its technical reports, stated that it
agreed with the Appellate Body's juri sprudence on this specific legal point. 16 More important is the
recognition of the mandatory nature of the unforeseen developments criterion, which is set out in the
Dominican Republic's legislation, and more specifi cally in Articles 239 and 247 of the Regulation to
Law No. 1-02.

10 Documents WT/DS415/1, WT/DS416/1, WT/DS417/1, WT/DS418/1.
11 See paragraph "(g)" of the legal basis of the request for consultations.
12 Appellate Body Report, Argentina – Footwear, paragraph 91.
13 Panel Report, US – Poultry, paragraph 7.46.
14 First written submission of the complainants, paragraphs 207 to 226.
15 Appellate Body Report, US – Stainless Steel (Mexico), paragraph 160.
16 Final Report, page 65; Preliminary Report, page 69.

20. In its first written submission, the Domini can Republic cites various passages from the
preliminary and final technical reports which a llegedly contain the Commission's conclusions on
unforeseen developments.
17 However, these passages merely constitute references to the arguments
of FERSAN on events that could constitute unforeseen developments . They are not reasoned and
adequate conclusions issued by the investigating auth ority. In addition, the explanations put forward
by the Dominican Republic in its first written submission are clearly ex post explanations which
cannot cure the lack of findings in the corresponding determinations or reports.18
IV. CLAIM RELATING TO THE DOMESTIC INDUSTRY
21. In its submission, the Dominican Republic conf ined itself to confirming that there were
various questions concerning the consideration of fabric and bags as the same product, and that it even
had doubts itself on that subject and addressed a letter to Customs, and the latter confirmed that they
are two different products. However, it misrepresents our claim and argues that there is no
substantive obligation governing the definition of the product under investigation.
22. What we have claimed in the context of the definition of the domestic industry is that no
paragraph in the reports or resolutions reflects the adequate and reasoned findings and conclusions
required under Articles 3.1 and 4.2(c) on a subject as fundamental, important and relevant as the
definition of the product under i nvestigation for purposes of defini ng the domestic industry, in the
light of the various factual questions raised in the investigation, which were even taken up by the DEI
and the Commission in the public reports.
23. The Dominican Republic arbitrarily defined like or directly competitive domestic products as
products produced from resin, without giving an objective reason for so doing. However, the product
under investigation included fabric and bags, irrespective of the way in which they were produced,
whether from resin or from fabric or from some ot her phase of the production process. Nor is there
any justification for excluding domestic producer s of the like or directly competitive domestic
product, such as the firms FIDECA and TITAN.
24. In short, the domestic industry was defined in a manner such as to be adapted solely and
exclusively to the profile of the applicant, FER SAN, so that the latter is the only enterprise
constituting the domestic industry. This was done through the use of arbitrary or inadequate
definitions and criteria which do not conform to the requirements of Articles 2.1, 4.1(c), 3.1,
last sentence, and 4.2(c) of the AS.
V. CLAIM RELATING TO THE ALLEGED INCREASE IN IMPORTS
25. The Dominican Republic acknowledges that there was no finding with regard to a relative
increase in imports compared with domestic produc tion, despite the fact that the final resolution
determined that imports had increased "in absolute and relative terms".19
26. Regarding the absolute increase in impor ts, the complainants note that the
Dominican Republic's defence, which seeks to play down the importance of the drop in imports
towards the end of the period of investigation, applies only to the final determination, but not to the

17 First written submission of the Dominican Republic, paragraphs 285-295.
18 Panel Report, Chile – Price Bands, paragraph 7.147 and footnote 705. Appellate Body Report, US –
Lamb, paragraph 72.
19 Definitive resolution, first article.

preliminary determination. The Dominican Repub lic cannot, therefore, argue that this alleged
increase was taken into consideration in order to justify the conclusion concerning increased imports
in the preliminary determination.
27. As regards the final determination, the Domini can Republic claims that it explained that the
decrease in imports towards the end of the period of investigation was transitory and incidental. The
Dominican Republic acknowledges that the decrease towards the end of the period of investigation
would have been due to the overa ll slowdown in the Dominican economy.
20 However, it does not
follow from this assertion that the decrease in impor ts was characterized as transitory and incidental
or that there was an explanation of the reasons for considering that the decrease in imports had those
characteristics, as is now argued ex post.
28. Finally, the Dominican Republic acknowledges that the evaluation of the rate of increase in
imports consisted of an "end to end" analysis of the period of investigation, and was based on figures
showing the percentage variation of imports from year to year. 21 As can be seen from the
determinations, there are no findings regarding th e rate of imports. The "rate" is a specific
requirement of Article 4.2(a) of the AS.
VI. CLAIM RELATING TO THE ALLEGED SERIOUS INJURY
29. The preliminary and final determinations of serious injury go beyond the definitions and basic
criteria contained in Article XIX and the AS. Leav ing aside the erroneous de finition of the domestic
industry, there are fundamental errors of methodology.
30. For example, the determinations are based on information about "the volumes of production
of the product investigated, assuming it to be a single product, i.e. finished bags". 22 Despite the fact
that the like or directly competitive product was de fined as tubular fabric and polypropylene bags, the
Dominican Republic evaluated only production perf ormance for finished bags, and no analogous
evaluation was carried out on production performance, in volume terms, in the other segment making
up the domestic industry, i.e. the production of tubular fabric.
31. There are two different segments: produc tion of tubular fabric and production of
polypropylene bags. The evidence shows that not all tubular fabric production was destined for the
production of finished bags. Alt hough part of this production was "assumed" to be an input for
finished bags, another part was destined for th e commercial market (e.g. sales to FIDECA) and a
further part went into increasing FERSAN's stocks . The production outcomes for one or the other
product are not therefore necessarily the same.
32. The Dominican Republic presents evidence to est ablish that it conducted a joint analysis of
the indicators relating to tubular fabric and polyp ropylene bags because it evaluated aggregate
information from the Bags Division of FERSAN.23 However, the information from the Bags Division
includes the production of other products which are not like or directly competitive products (bags
made of netting, rope or string), and which are d estined for both the domestic and the international
market.24 Moreover, with regard to stocks, the inform ation covers raw material and inputs which do

20 First written submission of the Dominican Republic, paragraph 318.
21 First written submission of the Dominican Republic, paragraph 328.
22 Initial report, page 14.
23 First written submission of the Dominican Republic, paragraph 358.
24 Exhibits RDO-13, RDO-14, RDO-15.

not form part of the like or directly competitiv e product. This erroneous methodological basis
invalidates the evaluation that was made of ear nings and losses, stocks, cash flows and production
value.
33. As regards the discrepancy between the factual findings relating to production and the
conclusions of the DEI and the Commissi on, the Dominican Republic provides an ex post explanation
of the way in which the fall in production is to be understood.
VI. CLAIM RELATING TO THE ALLEGED CAUSAL LINK
34. Causation: The complainants contend th at the Commission determined the causal link
between imports and serious injury to the domestic industry inconsistently with Article 4.2(b), among
other provisions of the AS, and Article XIX:1(a) of the GATT.25
35. The replies provided by the Dominican Republic in its first written submission indicate, in
summary, that the causation analysis is composed of two elements: (i) two paragraphs of the final
resolution (more specifically, paragraphs 37 and 38) 26; and (ii) the serious injury analyses contained
in the preliminary and definitive technical reports.27
36. Regarding the first element, the two paragraphs of the final resolution are not sufficient to
establish a causal relationship, since they consist of new assertions lacking analytical substantiation in
the technical reports. 28 Regarding the second element, the existence of serious injury is only a
necessary premise for the causation analysis, but it is not sufficient to establish a causal link.
37. Non-attribution: The complainants also cont end that the Dominican Republic failed to carry
out the non-attribution analysis required by Article 4. 2(b) of the AS, which consists in separating the
harmful effects of factors other than increased inputs which are the cause of serious injury.29
38. In reply, the Dominican Republic puts forward ex post explanations and offers arguments
regarding those factors other than increased imports which, in the complainants' opinion, should have
been taken into account on examining the causes of financial losses, increased stocks and reduced
cash flows, as well as the in jury caused by domestic competitors. Even these ex post arguments are
insufficient to justify the lack of a non-attribution analysis.
VII. CLAIM RELATING TO THE LACK OF PARALLELISM
39. The Dominican Republic failed to respect the requirement of parallelism since, despite having
excluded imports from certain countries from the appli cation of the measures, those imports were in
fact included in the evaluation of increased imports, serious injury and causation.30
40. The Dominican Republic states that the ex clusion of imports from Mexico, Panama,
Colombia and Indonesia from the application of the measures was in conformity with Article 9.1 of
the AS, which permits the exclusion of developing countries with less than 3 per cent import share. 31

25 First written submission of the complainants, paragraphs 380-404.
26 First written submission of the Dominican Republic, paragraph 441.
27 First written submission of the Dominican Republic, paragraphs 439 and 442 and footnote 341.
28 First written submission of the complainants, paragraph 395.
29 First written submission of the complainants, paragraphs 410-433.
30 First written submission of the complainants, paragraphs 436-450.
31 First written submission of the Dominican Republic, paragraphs 472-474.

The parallelism obligation is enforceable irrespective of the reasons why the Member applying the
safeguard has decided to exclude such imports. Th e Dominican Republic also submits that "[e]ven if
an investigation excluding imports from Mexico, Panama, Columbia and I ndonesia were conducted,
the conclusions concerning increased imports woul d not change, given the negligible share of
1.2 per cent [of those imports] during the period of investigation".
32 This line of argument has already
been presented and rejected in US – Steel.33
VIII. INCONSISTENCY WITH ARTICLES XIX: 2 OF THE GATT AND ARTICLES 8.1
AND 12.3 OF THE AS
41. The Dominican Republic accepts that its notification was in fact made three days after the
adoption of the measure 34 and seeks to justify this action by referring to the English and
French versions of the GATT, which indicate that the notification must be made prior to the
application of the measure, and not prior to its adoption, as stated in the Spanish version. We
observe, however, that the explanatory note c ontained in paragraph 2(c)(i) of the GATT 1994
explicitly provides that "[t]he text of GATT 1994 shall be authentic in English, French and Spanish".
42. Even on the interpretation of the Dominican Republic regarding the obligation under
Article XIX:2 of the GATT, the complainants submit that the Dominican Republic acted
inconsistently with that provision, since the WTO Members were notified on 18 October 2010, i.e. on
the same day as the entry into force of the measure. Moreover, the Dominican Republic claims to
treat (i) the participation of the complaining coun tries as interested parties in the context of the
safeguard investigation under the national jurisdiction of the Dominican Republic on the same basis
as (ii) the conduct of multilateral consultations as provided for by Article 12.3 of the AS.
IX. CLAIMS UNDER THE GATT
43. In the event that it is determined that the provisional and definitive measures are not subject
to Article XIX and to the AS, the Panel should fi nd that the provisional and definitive measures are
border measures subject to the basic disciplines of Articles I:1, II:1(a) and II:2(b) of the GATT, and
that they are inconsistent with those provisions.
44. Claims under Article I:1 of the GATT: Accord ing to the most-favoured-nation clause, any
measure that qualifies as an advantage, favour, priv ilege or immunity granted to imports of specific
origin shall also be granted to imports of like pr oducts from the other WTO Members. In this case,
the exclusion of imports from Colombia, Indon esia, Mexico and Panama from the scope of
application of the measures constitutes an advantage, favour, privilege or immunity granted to imports
of those origins.
45. The criterion for the granting of this advantag e, favour, privilege or immunity is also
discriminatory, even where there is compliance with the criterion that imports should not exceed
3 per cent, by individual origin, of total imports a nd nine per cent collectively of that total, in the

32 First written submission of the Dominican Republic, paragraph 479.
33 Panel report, US – Steel, paragraph 10.607.
34 First written submission of the Dominican Republic, paragraphs 493 and 495.

period of investigation.
35 For example, that criterion was not applied for the purpose of excluding
imports from Thailand, which are less than three per cent.36
46. Claims under Articles II:1(a) and II:1(b), second sentence, of the GATT: the provisional and
definitive measures consist of duties or charges other than ordinary customs duties that are applied to
imports of polypropylene fabric and bags.
47. Article II:1(b) prohibits the imposition of im port duties and charges other than ordinary
customs duties. Pursuant to the Understanding on the Interpretation of Article II:1(b) of the General
Agreement on Tariffs and Trade 1994 , a surcharge other than an ordinary customs duty shall be
inconsistent with Article II:1(b), second senten ce, of the GATT unless that surcharge had been
recorded by 15 April 1994 at the latest.
48. In the preliminary and final reports, the DEI undertook an evaluation of the most effective
alternatives for the imposition of the measure at issu e, in which the DEI explicitly affirmed that the
purpose was to establish a "second tariff" in addition to the applicable tariff. 37 This intention to
establish a duty different and distinguishable from the ordinary customs duty was confirmed at the
time of establishment of the measures and their tim e-frame. In the final resolution, the Commission
stated that, for those countries subject to "an MFN tariff higher than the percentage of the definitive
safeguard measure … the said MFN tariff shall apply" . The MFN tariff in the Dominican Republic is
the ordinary customs duty applicable to imports that do not benefit from tariff preferences 38, while
under the final resolution, the surcharge constitutes an alternative duty to the MFN tariff, and either
the surcharge or the ordinary customs duty is applie d, whichever is higher. As can be seen from the
Customs Tariff of the Dominican Republic, that c ountry does not maintain an ordinary customs duty
possessing the modal quality of an alternative duty. It follows from this that the provisional and
definitive measures impose a duty of a nature distin ct from the ordinary customs duty applicable in
the Dominican Republic.39
49. Pursuant to Articles 5, 6 and 7 of Tari ff Reform Law No. 146-00 (which governs the
application of tariffs in the Dominican Republic), ordinary customs duties or tariffs can only be
modified by a legislative act, but not by administrative means. 40 Inasmuch as the provisional and
definitive measures were not imposed in acco rdance with the procedure provided for in
Dominican legislation for the imposition of ordinary customs duties, the provisional and definitive
measures do not qualify as ordinary customs duties.
50. For all of the above reasons, the provisional a nd definitive measures qualify as other duties or
charges within the meaning of Article II:1(b), sec ond sentence, of the GATT. It should be mentioned
additionally that the Dominican Republic did not r ecord in its Schedule of Concessions the possibility
of applying measures of this nature. Conseque ntly, the provisional and definitive measures are
inconsistent with Article II:1(b), second senten ce, of the GATT and, by implication, with
Article II:1(a) of the GATT.

35 Preliminary Resolution, paragraphs 50 and 51; Final Resolution, paragraphs 42 and 43.
36 Preliminary Report, Annex I; Final Report, Annex I.
37 Final Technical Report, page 97.
38 Customs Tariff of the Dominican Republic, Exhibit CEGH-27.
39 Preliminary Report, page 93; Final Report, page 97.
40 Tariff Reform Law No. 146-00, Exhibit CEGH-22.

X. CONCLUSIONS AND REQUEST FOR RECOMMENDATIONS AND
SUGGESTIONS
51. In addition to the request for findings and ru lings contained in our first written submission
41,
the complainants request the Panel to issue the following findings and rulings:
 The application of the provisional and de finitive measures excluding imports from
specific origins is inconsistent with Article I:1 of the GATT.
 The provisional and definitive measures c onstitute other duties and charges distinct
from ordinary customs duties within the m eaning of Article II:1(b), second sentence,
of the GATT and grant less favourable tr eatment than that provided for in the
Dominican Republic's Schedule of Concessions within the meaning of Article II:1(a)
of the GATT, for which reason both measures are inconsistent with the provisions of
the GATT.
52. Despite the fact that the comp laints concerning Articles I and II of the GATT have been
submitted as alternatives, the applicants request the Pa nel to rule on them even if it concludes that the
measures at issue are safeguard measures. This is important given the possibility of an appeal for
which the Appellate Body would need to have fact ual findings for the purpose of completing the legal
analysis relevant to the case.

41 First written submission of the complainants, paragraph 477.

ANNEX C-2

EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF
THE DOMINICAN REPUBLIC

1. The Dominican Republic affirms that Article XI X of the GATT and the AS, in other words,
all the rules duly cited by the complainants in the request to hold consultations
1, in the request for the
establishment of a panel 2 and in their first written submission, do not apply to the measures at issue.
This makes it impossible to evaluate the consiste ncy of the measures contested with the disciplines
cited.
2. The Dominican Republic wishes to reaffirm the reasons why the rules cited by the
complainants do not apply on the basis of five argume nts. Firstly, the applicability of Article XIX of
the GATT and the AS depends on objective criteria that cannot be replaced by statements made by the
Dominican authorities. Secondly, the measures at issue are not covered by the objective applicability
criteria in Article XIX of the GATT and the AS. Thirdly, Article 11.1(a) of the AS does not cover
action prior to the adoption of the measures contested. Fourthly, the measures at issue did not lead to
suspension of Article 1:1. Fifthly, the measur es at issue do not constitute suspension of the
second sentence of Article II:1(b) of the GATT.
1. The applicability of Article XIX of the GATT and the AS is not defined on the basis of
statements by Members
3. A large part of the arguments put forward by the complainants concerning the applicability of
Article XIX of the GATT and the AS consisted of indicating that the measures at issue are the result
of an investigation initiated, conducted and conc luded by the Dominican Republic on the basis of
Law No. 1-02
3 with the Dominican authorities having cited Article XIX of the GATT and several
provisions of the AS.4 The complaining parties also attach cons iderable weight to notifications to the
WTO Committee on Safeguards.5
4. Nevertheless, as stated by the Appellate Body, an examination of applicability is an objective
analysis of the content of the measures at issue, rather than on the basis of nominal aspects such as the
statements made by the Dominican authorities. 6 If it is considered that the classification of a measure
in national law or the intention of the author ities are decisive for the purposes of classifying a
measure, as underlined by the European Union, this would mean that WTO Members could impose
measures that comply with their obligations by describing them in a particular way.7
5. The legal basis for the measures at issue, Law No.1-02, provides in Article 73 that safeguard
measures may consist of an increase in ta riffs, in tariff quotas or maximum rates 8, making

1 WT/DS415/1, WT/DS416/1, WT/DS417/1 and WT/DS418/1.
2 WT/DS415/7, WT/DS416/7, WT/DS417/7 and WT/DS418/7.
3 Exhibit RDO-11.
4 Idem. paragraphs 43-74.
5 Idem. paragraphs 75-82.
6 Appellate Body Report, US – Shrimp (Thailand) , paragraph 241; Appellate Body Report,
US – Softwood Lumber IV , paragraph 65; Appellate Body Report, US – Corrosion-Resistant Steel Sunset
Review, footnote 87 to paragraph 87.
7 See paragraph 10 of the Third Party Written Submission of the European Union.
8 Above, note 23.

no reference to a suspension of obligations or th e withdrawal or modification of concessions, which
are the objective criteria for application of Article XIX of the GATT and the AS. Consequently, a
safeguard adopted under Law No. 1-02 does not n ecessarily constitute a safeguard in terms of the
GATT or the AS.
6. In the present case, as the Dominican Republic granted a tariff concession of 40 per cent for
the products in question, it is free to impose a lower tariff, pursuant to Article II:1(a) of the GATT, as
confirmed by the Appellate Body.
9 By adopting a safeguard measure pursuant to Law No. 1-02 that
increased the tariff to 38 per cent, in GATT term s the measure consisted of an increase in the
MFN tariff to below the bound level, a measure whic h the Dominican Republic was free to adopt. In
definitive, the fact that the Dominican Republic's authorities adapted their conduct to the AS and to
Article XIX of the GATT does not imply that the co mplainants can call the measures at issue into
question in the light of those provisions.
7. Essentially, the Dominican Republic complied w ith a more onerous procedure than that
imposed by the GATT. The complainants were aw are of the nature of the measures and expressed
doubts about the applicability of Article XIX of th e GATT prior to the adoption of the provisional
measure.10 Nevertheless, they insisted on questioning th e measures in the light of Article XIX of the
GATT and the AS.
2. The measures issue do not fall within the scope of Article XIX of the GATT and the AS
8. The scope of the AS is defined in Article 1 thereof, which provides that this Agreement
establishes rules for the application of safeguard measures "which shall be understood to mean those
measures provided for in Article XIX of GATT …". 11 The material scope of Article XIX of the
GATT is set out in paragraph 1(a) thereof. 12 The form of this paragraph is conditional, the first part
describing a series of conditions that must be verified to enable the WTO Member in question to make
use of the authorization defined in the last part of the paragraph, which provides that the Member
"shall be free, …, and to the extent and for such tim e as may be necessary to prevent or remedy such
injury, to suspend the obligation in whole or in part or to withdraw or modify the concession" . If the
course of action defined in the last part of Article XIX:1 of the GATT is not followed, there is no need
to meet the conditions set out at the beginning of th is provision, or to comply with the disciplines and
procedural requirements in the remainder of Article XIX of the GATT.13
9. Article XIX:1(a) of the GATT may authorize the total or partial suspension of an obligation
undertaken or the withdrawal or modification of a concession. The measures contested are based on
Law No. 1-02 and consist of an increase in the MF N tariff up to a level lower than that bound. In
other words, there was no suspension of any obligation or withdrawal or modification of any
concession, so Article XIX of the GATT and the AS do not apply.
10. The context of Article XIX confirms the st atement above. The Dominican Republic was
entitled to adopt the measures at issue pursuant to Ar ticle II:1(a) of the GATT, so no obligation was
suspended and there was no withdrawal or modificat ion of any concession. If it is found that there

9 Appellate Body Report, Argentina – Textiles and Apparel, paragraph 46.
10 Regulatory Commission on Unfair Trade Practices and Safeguard Measures, Preliminary Technical
Report, page 85. Exhibit RDO-9.
11 AS, Article 1.
12 Request by the Dominican Republic for a preliminary ruling, paragraph 37.
13 Idem. paragraph 38.

must be compliance with the provisions in Article XIX of the GATT and the AS even if
no concession is withdrawn or modified, and no oblig ation is suspended, Article XIX of the GATT
and the AS would be distinct from the series of rights and disciplines laid down in the
WTO Agreement, contrary to the criteri a determined by the Appellate Body.
14 Considering a tariff
increase up to a level that does not exceed the bound le vel to be a safeguard measure would make the
GATT provisions that serve as basis meaningless.
11. Another relevant provision in this regard, Article 11.1(c) of the AS, provides that the
Agreement does not apply to measures which a Me mber seeks to adopt, adopts or maintains in
accordance with other provisions in the GATT 1994, other than Article XIX, and the multilateral trade
agreements contained in Annex 1A, other than the AS, or in conformity with protocols, agreements or
conventions concluded within the framework of the GATT 1994. This provision reaffirms the
non-applicability of Article XIX of the GATT and the AS to the measures at issue, which are in
accordance with Article II:1(a) of the GATT.
12. Moreover, Article 8.1 of the AS provides the following:
"A Member proposing to apply a safeguard measure or seeking an extension of a
safeguard measure [...] to maintain a subs tantially equivalent level of concessions
and other obligations to that existing under GATT 1994 […]. To achieve this
objective, the Members concerned ma y agree on adequate means of trade
compensation ...".
13. If no agreement is reached, Article 8.2 of the AS allows the exporting Members affected to
suspend the application of concessions or other equi valent obligations under the GATT to the trade of
the Member applying the safeguard. This once again confirms that only a measure that involves
withdrawal, modification or suspension of an obligation or concession must comply with the
disciplines imposed by Article XIX of the GATT and the AS. If this is not the case, WTO Members
may have the right to compensation for action that may be freely adopted.
14. The object and purpose of Article XIX of the GATT and the AS, which have been described
by the Appellate Body as "to allow a Member to re -adjust temporarily the balance in the level of
concessions between that Member and other exporting Members"
15, also confirm this interpretation.
The object and purpose have been confirmed by the history of the Uruguay Round negotiations,
where the function of safeguard clauses was described as " offering certain possibilities for easing
contracted obligations, they encourage importing c ountries to enter into commitments which would
otherwise be of unconditional rigidity".16
15. The history of negotiations reaffirms the inte rpretation described. For illustrative purposes,
statements such as the following can be taken into account: " GATT safeguard clauses permit the
application […] of measures not ot herwise permitted under the rules "17 or " the scope of the issue to
be negotiated in the Negotiating Group on Safeguar ds […] should be confined to the rules and
disciplines applicable for the withdrawal of GATT concessions " and " Since safeguard measures

14 Appellate Body Report, Argentina – Footwear (EC), paragraph 81.
15 Appellate Body Report, Argentina – Footwear (EC), paragraph 94.
16 Submission by Switzerland to the Negotiating Group on Safeguards, 14 July 1988,
MTN/GNG/NG9/W/20.
17 Note by the Secretariat of the Negotia ting Group on Safeguards, 7 April 1987,
MTN/GNG/NG9/W/1.

invariably imply the withdrawal of GATT concessions ... ".
18 Moreover, the Secretariat, when
explaining the history behind the drafting of Article XIX and its role in the GATT, indicated that
"Article XIX is one of a number of safeguard prov isions in the General Agreement which permit
contracting parties, subject to specific conditions, to re-impose trade barriers otherwise prohibited by
the Agreement. It permits the imposition of tariffs and quantitative restrictions otherwise prohibited
by the provisions of Articles II and XI … ".19
16. In the light of the above, the Dominican Re public also expresses its disagreement with the
complainants' argument that the use of the word "podrá" in the Spanish text of Article XIX:1(a) of the
GATT ("shall be free" in the English text) implie s that in the terms of the GATT or the AS a
safeguard measure may consist of a measure th at does not suspend a concession or obligation. 20 In
addition to contradicting the context, object a nd purpose and the history of the negotiations and
drafting of Article XIX of the GATT and the AS, it also relies on an incorrect reading of the text,
ignoring the conditional structure of Article XI X:1(a) of the GATT, making the disciplines and
conditions set out therein subject to the adop tion of a measure consisting of a suspension,
modification or withdrawal of an obligation or concession.
17. This can be confirmed in the light of the Panel Report in Chile – Price Band System . The
measures at issue were specific duties which, depending on the circumstances, exceeded
Chile's bound tariff. Chile claimed that, as the price band system exceeded the bound tariff, it
constituted a safeguard. Consequently, the duty applied was considered to be a safeguard in the terms
of Article XIX of the GATT solely to the extent that it exceeded the bound rate.21
3. The applicability of Article XIX of the GATT and the AS to the investigation prior to
the adoption of the measures at issue
18. According to the complainants, the formula " tratar de adoptar medidas " in the Spanish text
of Article 11.1(a) of the AS ("seek any … action" in the English text) incl udes the intention or the
steps taken towards the specific act of adopting meas ures such as those in Article XIX of the GATT.
The investigation prior to the adoption of the provisional and definitive measures would constitute
such an act and therefore Article XIX of the GATT and the AS would be applicable.22
19. The complainants propose applying the AS to an investigation, even when the ensuing
measures do not fall within the scope of these provi sions, without making this possibility subject to
any criterion. A more logical interpretation woul d be to limit the time-frame for application of
Article 11.1(a) and not to apply it when it is clear that the Member concerned did not adopt or seek to
adopt a safeguard measure in accordance with Article XIX of the GATT. In fact, although it might be
considered that in the first stages of the investigation the Dominican Republic sought to adopt a
safeguard measure in accordance with the provisions in Article XIX of the GATT, such a statement is
no longer possible after the adoption of the definitive measure in October 2010.

18 Communication by the Nordic Countries to the Negotiating Group on Safeguards, 30 May 1988,
MTN/GNG/NG9/W/16.
19 Background note by the Secretariat of the Negotiating Group on Safeguards, 16 September 1987,
MTN/GNG/NG9/W/17.
20 Response by Costa Rica, El Salvador, Guatem ala and Honduras to the request by the
Dominican Republic for a preliminary ruling, 3 May 2011, paragraph 95.
21 Panel Report, Chile – Price Band System, paragraph 7.109.
22 Response by Costa Rica, El Salvador, Guatem ala and Honduras to the request by the
Dominican Republic for a preliminary ruling, 3 May 2011, paragraphs 86-91.

20. Furthermore, Article 11.1(a) of the AS has to be read in conjunction with Article 11.1(c),
whose relevant text provides that: " This Agreement does not apply to measures sought, taken or
maintained by a Member pursuant to provisions of GATT 1994 other than Article XIX … ". The use of
the conjunction "or" means the AS does not apply to measures adopted pursuant to another provision
of the GATT, namely, Article II:1(a).
21. If the line of reasoning put forward by the co mplainants is followed, the only plausible
interpretation in order to avoid th e contradictions that arise from removing from the investigation the
measures adopted as a result of it, would be to iden tify the obligations in the AS which specifically
apply to the investigation. The complainants, howev er, have not indicated what these obligations are,
which they cite with reference to the stage of the investigation, and have simply indicated that they
"also question the way in which the notification and consultation procedure were conducted …".
23
4. The alleged suspension of Article II:1(b) of the GATT
22. The complainants contend that the measures su spend the second sentence of Article II:1(b) of
the GATT as the tariff constitutes a duty other th an ordinary customs duty. The measures would
therefore result in a safeguard measure with in the meaning of Article XIX of the GATT. 24 According
to Dominican legislation, however, a safeguard may be in the form of three possible measures: an
increase in tariffs, tariff quotas, or maximum rates. 25 By providing for an increase in already-existing
tariffs, the measure constitutes an increase in ordinary customs duty and not a separate duty.
23. Furthermore, the measures at issue replace th e MFN tariff normally applicable. If the duty
was distinct from ordinary customs duty, there would be no such replacement but, as is the case for
anti-dumping duties or countervailing measures, it woul d be applied in addition to the duty normally
applicable. The following statement by the Appellate Body in India – Additional Import Duties is
relevant: " Irrespective of the underlying objective, tar iffs are permissible under Article II:1(b) so
long as they do not exceed a Member's bound rates".26 (emphasis added)
5. The alleged suspension of Article I:1 of the GATT
24. The complainants stated that the exclusion of Mexico, Panama, Colombia and Indonesia from
the measures at issue represents suspension of Article I:1 of the GATT, which the
Dominican Republic justified by citing Article 9:1 of the AS.
27 This would mean that the measures at
issue constitute safeguards in terms of Article XIX of the GATT and the AS.
25. This argument has two flaws. Firstly, safeguard measures in terms of Article XIX of the
GATT do not allow suspension of Article I:1 of the GA TT. This can be confirmed by Article 2.2 of
the AS. The history of negotiations contradicts the interpretation that a safeguard measure may

23 Response by Costa Rica, El Salvador, Guatem ala and Honduras to the request by the
Dominican Republic for a preliminary ruling, 3 May 2011, paragraph 91.
24 Response by Costa Rica, El Salvador, Guatem ala and Honduras to the request by the
Dominican Republic for a preliminary ruling, 3 May 2011, paragraph 111.
25 Law No. 1-02 on Unfair Trade Practices and Safeguard Measures, Article 73.
26 Appellate Body Report, India – Additional Import Duties, paragraph 159.
27 Response by Costa Rica, El Salvador, Guatem ala and Honduras to the request by the
Dominican Republic for a preliminary ruling, 3 May 2011, paragraph 110.

consist of the suspension of Article I:1 of the GATT. During the Uruguay Round, it was decided to
incorporate Article 2.2 in order to prevent the selective application of safeguards.
28
26. Secondly, Article 9.1 does not constitute a ge neric exception clause to Article I:1 of the
GATT but provides a discipline for the applicati on of a safeguard measure as an exception to
Article 2.2 of the AS. An exception to Article 2:2 of the AS can only logically be cited when a
safeguard measure in terms of Article 1 of this Agreement actually exists, which is not the case.

28 See Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade
Negotiations, MTN.TNC/W/FA, 20 December 1991, section M, paragraphs 5 and 9.

ANNEX C-3

CLOSING ORAL STATEMENT OF THE COMPLAINANTS

Members of the Panel, members of the Secretariat, representatives of the Dominican Republic:

1. Our closing statement will be very brief. Ou r complaints and arguments are clear, and we
merely wish to make four very specific comment s on subjects that were addressed during the last
two days of our discussions.
2. Firstly, on the issue of the interpretation of th e "obligations" in Article XIX:1(a) of the
GATT, it is important to note that the last phrase draws a distinction between "to suspend the
obligation in whole or in part" in respect of such product, and "to withdraw or modify the
concession". The term "obligation" clearly m eans something different from "concession", and
consequently, the Dominican Republic's argument that the "obligation" involves only that relating to
"tariff concessions" is without foundation. In fact, the Dominican Republic's interpretation would
render the term "obligation" as it appears in th e last phrase of Article XIX:1(a) of the GATT
redundant and meaningless. Our understanding, which is shared by some of the third parties to this
dispute, is that the scope of the term oblig ation goes beyond the concept of "concession".
Furthermore, the Dominican Republic's interpretation is contrary to the principle of effectiveness in
the interpretation of treaties.
3. Secondly, the complainants would also like to make it clear that they are not claiming
violation of any regional trade agreement. As indicated in our request for the establishment of a
panel, our complaints concern only violations of covered agreements.
4. As we have stated since the beginning of this dispute and as understood by the
Dominican Republic up until it submitted its statem ent of preliminary objections, our position has
been, and continues to be, that the measures at i ssue are safeguard measures within the meaning of
Article XIX of the GATT and the AS.
5. Thirdly, the Dominican Republic stated yesterda y that the measures at issue were simply a
"tariff increase". It also stated that its author ities had taken the more difficult path in adopting the
alleged tariff increase, since they could have done so without conducting an inv estigation. The truth,
as we see it, is that the only reasonable explanati on why the Dominican Republic decided, at the time,
to apply safeguard measures under Article XIX of th e GATT and the AS rather than a simple tariff
increase, was that a simple tariff increase would not have enabled it to exclude the
Central American countries from the scope of applica tion of those measures in view of the existence
of bilateral preferential obligations. We trust that this clarification will dispel any doubt with respect
to the Dominican Republic.
6. Although the Dominican Republic could have adopted a tariff increase without conducting a
safeguard investigation, the fact remains that this is not the option that it chose. Instead, it took the
decision to initiate an investigation and adopt saf eguard measures. The Dominican Republic cannot
rid itself of the general obligations laid down in th e AS and Article XIX while at the same time using
Article 9.1 of the AS to justify the discriminatory application of those safeguards.
7. Indeed, if the Dominican Republic had opted fo r a simple tariff increase that did not exceed
the WTO bound rate, we would not be here today in these WTO dispute settlement proceedings. As

we have repeatedly argued, the Dominican Repub lic is denying the obvious: that it conducted a
safeguard investigation, following which it imposed a safeguard measure. To accept that a Member
can impose safeguard measures and then describe th em as something different for the purposes of a
dispute settlement procedure would have serious syst emic implications for the WTO. This is yet
another reason why the Dominican Republic cannot be allowed at this point to deny its obligations
under Article XIX and the AS.
8. Finally, we would like to note that in para graph 47 of its First Oral Statement, the
Dominican Republic confirmed that the safeguard measure was a measure other than ordinary
customs duties: "as long as the increase d tariff is in force, the MFN tariff normally applied is not in
force" (emphasis added). To quote a legal proverb, "Where the party confesses, no proof is needed".
 Thank you.

ANNEX C-4

CLOSING ORAL STATEMENT OF THE DOMINICAN REPUBLIC

Mr Chair, members of the Panel:

1. The Dominican Republic welcomes your efforts and questions yesterday and today at this
first substantive meeting, in the hope that they will lead to a positive settlement of this dispute.
2. The Dominican Republic wishes to take the opportunity of this meeting to clarify certain
aspects of the safeguard measures adopted on the basis of Law No. 1-02, as a consequence of previous
exchanges of views.
3. The Dominican Republic's tariffs are defined in Law No. 146-00, which specifies that tariffs
may only be determined through legislative channe ls. The measures that are the subject of this
dispute were adopted on the basis of Law No. 1-02 on Unfair Trade Practices and Safeguard
Measures.
1 In Title IV on "Safeguard measures", this Law defines safeguard measures in Article 57
as "those intended to regulate imports temporarily … [with] the objective of preventing or remedying
serious injury to a domestic industry and facilitating adjustment for domestic producers". Pursuant to
Article 73, the measures in question may consist of a temporary increase in tariffs.
4. From the foregoing statement, it follows that, on the one hand, tariffs must have a legal basis
in a law, in this particular case Law No. 146-00. On the other hand, Law No. 1-02 allows a temporary
increase in the tariffs determined therein subject to the adoption of a safeguard measure, as defined in
the Law.
5. In Dominican law, therefore, the same rul es apply to any tariff increase resulting from a
procedure conducted pursuant to Law No. 1-02. In other words, there is no distinction between the
way in which a domestic safeguard measure that does not lower the bound tariff is adopted and the
adoption of a measure that exceeds this tariff a nd can be considered a safeguard in terms of
Article XIX of the GATT and the Agreement on Safeguards.
6. The fact of following the procedure defined in Law No. 1-02 and citing the provisions of the
Agreement on Safeguards in no way implies any inte ntion on the Dominican Republic's part to make
measures that do not lower the bound tariff subject to Article XIX of the GATT and the Agreement on
Safeguards. In fact, it would be unnecessarily comp licated to follow different procedures depending
on the type of safeguard in question.
7. The measures at issue consist of the adoption of a safeguard pursuant to Law No. 1-02. As
this measure does not consist of an increase a bove the Dominican Republic's bound tariff in the WTO
however, as has been shown, the measure does not suspend any obligation, or modify or withdraw any
concession in terms of Article XIX. Certainly, according to WTO law, the Dominican Republic could
have adopted the measures at issue without comply ing with the onerous obligations imposed by the
Agreement on Safeguards. But by adopting the me asures at issue pursuant to Law No. 1-02 and as
this domestic Law reflects the Agreement on Sa feguards, the adoption procedure followed the
Agreement on Safeguards. As the Dominican Repub lic has already stated, this does not imply that

1 Exhibit RDO-11.

the domestic safeguard measures are subject to th e disciplines of Article XIX of the GATT and the
Agreement on Safeguards.
8. To summarize, the complainants contend that, so lely for the reason that the measures at issue
have the title "safeguard" and that the procedure in Law No. 1-02 was followed, they can question
these safeguard measures before the WTO Dispute Settlement Body.
9. This position is not acceptable. The Dominican Republic notes that many free trade
agreements have ad hoc safeguard mechanisms. The complainants' position would mean that any
bilateral safeguard would be subject to examination by the WTO Dispute Settlement Body in the light
of Article XIX of the GATT and the Agreement on Safeguards.
10. To give just one example, the second paragraph of Article 8.02(2) of the
Dominican Republic-Central America Free Trade Agreement provides that:
For the application of bilateral safeguard measures, the competent authorities shall
conform to the provisions in this chapter and, supplementarily, to Article XIX of the
GATT 1994, the Agreement on Safeguards of the World Trade Organization and the
respective domestic legislation.
11. How can it be found, in the light of this pr ovision, that any bilateral safeguard adopted
pursuant to the Dominican Republic-Central Amer ica Free Trade Agreement would be subject to
examination by the Dispute Settlement Body in the light of Article XIX of the GATT and the
Agreement on Safeguards? A reply in the affirmativ e would be absurd. Nevertheless, this is the
conclusion reached using the logic put forward by the complainants in their response to the request by
the Dominican Republic for a preliminary ruling and in their oral statement made at this first
substantive meeting.
12. The complainants have indicated that a dopting a safeguard measure under Law No. 1-02
when such a measure does not lower the tariff in th e WTO schedule of bindings would be contrary to
the principle of good faith and could have harmful systemic implications.
13. The Dominican Republic does not understand why th e complainants consider it reprehensible
to increase a tariff temporarily under a safeguard procedure in its domestic law when the same
increase could be effected under a simpler pro cedure and with fewer guarantees for the parties
involved. The guarantees afforded are obvious from the broad participation of the complainants in the
procedure prior to the adoption of the measure, when they were informed in detail of all aspects of the
proposed measure, including the fact that it did not exceed the bound tariff. It cannot, therefore, be
considered that the Dominican Republic's conduct w as unexpected or inconsistent with the principle
of good faith.
14. The Dominican Republic thinks it relevant to re fer to the record of the hearing held at the
headquarters of the Regulatory Commission on Unfa ir Trade Practices and Safeguard Measures on
12 May 2010. At this hearing, the representative of the Government of Honduras took the floor to
indicate that:
"[T]he amount of the provisional measure adopted is 38.5 per cent ad valorem, while
the Dominican Republic's bound rate for th e products in question is 40 per cent

ad valorem, so it cannot be claimed that there is any reason to turn to a safeguard
measure …" 2 (emphasis added)
15. This observation was preceded by other comments prior to the adoption of the provisional
measure.3 In other words, not only were the complainants informed that the measure would not
exceed the bound tariff, but the complainants them selves in their statements expressed serious doubts
about the applicability of Article XIX of the GATT. Today, however, the complainants insist on a
point of view that is contrary to these statements made throughout the procedure for adoption of the
measures which they are now questioning in the light of rules which they them selves declared to be
irrelevant.
16. With regard to the question of whether a safe guard measure in terms of Article XIX of the
GATT may consist of suspension of Article I:1 of the GATT, the Dominican Republic would like to
refer to paragraphs 51 and 52 of its oral statement at the beginning of this first substantive meeting.
"51. … [T]he safeguard measures in terms of Article XIX of the GATT do not allow
suspension of Article I:1 of the GATT c an be confirmed by Article 2.2 of the
Agreement on Safeguards, which provides: 'S afeguard measures shall be applied to
a product being imported irrespective of its source.'.
52. … Article 9.1 does not constitute a gen eric exception clause to Article I:1 of the
GATT but provides a discipline for the applic ation of a safeguard measure. More
accurately, it constitutes an exception to Ar ticle 2.2 of the Agreement on Safeguards.
An exception to Article 2.2 of the Agr eement on Safeguards can only logically be
cited when a safeguard measure in terms of Article 1 of this Agreement actually
exists …"
17. Mr Chair, members of the Panel, before c oncluding this oral statement, the Dominican
Republic would like to refer to one aspect that has ar isen during this substantive meeting. Article 72
of Law No. 1-02 provides for the exemption of developing countries from safeguard measures
adopted pursuant to the Law, thereby reflecting th e provision in Article 9.1 of the Agreement on
Safeguards. As has become appare nt during this meeting, however, the definition in Article XIX of
the GATT does not correspond to the possible forms wh ich a safeguard measure may take in the light
of Article 73 of Law No. 1-02. It is thus possi ble that situations may arise in which certain
WTO Members are exempt from a safeguard measure adopted pursuant to Law No. 1-02, even though
such exemption may not be based on Article 9.1 of the Agreement on Safeguards because the
safeguard measure is not one of the measures covered by Article XIX of the GATT. The
Dominican Republic is aware that exempting developing countries from a domestic safeguard
measure may be problematic in specific cases in which the measure adopted does not constitute a
safeguard measure in the terms of Article XIX of the GATT.

2 Regulatory Commission on Unfair Trade Practices and Safeguard Measures, Final Technical Report,
Exhibit RDO-10, page 179.
3 See, for example, Regulatory Commission on Unfa ir Trade Practices and Safeguard Measures,
Preliminary Technical Report, Exhibit RDO-9, page 85.

18. In this connection, it might be desirable to do away with the granting of an exemption when
the domestic safeguard measure is not covered by Ar ticle XIX of the GATT. This is not a question
that can be resolved in the present dispute, however , inasmuch as Article I:1 of the GATT is not part
of the Panel's terms of reference.
19. Mr Chair, members of the Panel, I thus conclude my oral statement. The
Dominican Republic remains at your disposal to respond to any questions that might arise.

ANNEX D

ORAL STATEMENTS OF THE THIRD PARTIES AT THE SPECIAL SESSION
OF THE FIRST SUBSTANTIVE MEETING

Contents Page
D-1 Executive summary of the oral statement of Colombia D-2
D-2 Oral statement of the United States D-6
D-3 Oral statement of Panama D-8
D-4 Oral statement of Turkey D-10
D-5 Oral statement of the European Union D-11

ANNEX D-1

EXECUTIVE SUMMARY OF THE ORAL STATEMENT OF
COLOMBIA

I. THE DETERMINATION OF THE IMPOR TED PRODUCT AND THE DOMESTIC
PRODUCT IN THE AGREEMENT ON SAFEGUARDS
1. The present case has given rise to a discussion of the rules that should be applied in
determining the product investigated in a safeguard process, taking into account the relevance of that
determination to the national authority's anal ysis, under the Agreement on Safeguards, of the
similarity between the imported product and the lik e or directly competitive product manufactured by
the domestic industry.
2. In its first written submission, the complainant argues that the Dominican Republic: (i) failed
to determine correctly that the imported products and the domestic products were like or directly
competitive
1; and (ii) wrongly interpreted the concept of "producers" in the Agreement on
Safeguards, leading to the exclusion of domestic producers of directly competitive products. 2 Thus,
the complainant concludes that the concept of "domes tic industry" in Article 4.1(c) of the Agreement
on Safeguards was not properly established.
3. Colombia proposes to comment on the discussion concerning whether the inclusion of tubular
fabric and polypropylene bags in a single category of products under investiga tion is consistent with
the obligations of the Dominican Republic unde r the Agreement on Safeguards, especially with
respect to the concept of "domestic industry" and the means of identifying it.
4. Colombia agrees with the statement by the Do minican Republic that there are no precedents
in panel or Appellate Body proceedings con cerning how the product under investigation in a
safeguards investigation should be defined and that there are no express rules relating to this matter.
However, it does not agree that this is a question unrelated to the provisions of the Agreement on
Safeguards and that, consequently, there are no clea r criteria for determini ng how this finding should
be made.
5. The determination of the product under consideration or investigation is a fundamental part of
the process of properly identifying the domestic industry in a safeguards investigation. This decision
establishes the context for determining where the " like or directly competitive products" are to be
situated, while forming the basis of the analysis for identifying the domestic producers that make up
the domestic industry and the data that will be needed for the analysis of injury.
6. Colombia proposes that, despite the term "pr oduct investigated" not being used in the
Agreement on Safeguards, a systematic interpreta tion of the Agreement under Article 31 of the
Vienna Convention yields sufficient evidence to establish what product under investigation should be
taken to mean and how that product should be identified in a safeguards investigation.
7. In this respect, an exegetical reading of the second paragraph of the preamble and Article 2.1
of the Agreement on Safeguards, consistent with Ar ticle 31 of the Vienna Convention, would suggest

1 First written submission of the complainants, paragraphs 77-80.
2 First written submission of the complainants, paragraphs 160-163.

that an investigation can only be conducted into "a product" and not several. However, Colombia
believes that it can be argued that the product un der investigation may be composed of several
products, provided that it can be shown that they ar e like or directly competitive. This conclusion
follows from the provisions of Article 4.1(c) of the Agreement on Safeguards.
8. Article 4.1(c) of the Agreement on Safeguards, which defines domestic industry, reads as
follows:
"[…] a 'domestic industry' shall be understood to mean the producers as a whole of
the like or directly competitive products ope rating within the territory of a Member,
or those whose collective output of the like or directly competitive products
constitutes a major proportion of the total domestic production of those products".
(emphasis added)
9. Although the Article in question relates to the determination of the domestic industry and to
how the imported products should be compared vis-à-vis the domestic products, for Colombia this
rule also applies to the determination of the product under investigation, because of the close
relationship between the definition of domestic industry and the product investigated. If it is not
accepted that the products investigated should be, at least, like or directly competitive, this finding
could not be made with respect to domestic pr oducts, since it would be impossible to compare
dissimilar categories of products.
10. Insofar as the standard of Article 4.1(c) of the Agreement on Safeguards requires that the
domestic and imported products be like or direc tly competitive, if the "product investigated"
contained products which in themse lves were not, or was composed of several individual products
which needed to be considered individually, it would be impossible to prove that there was a
parameter for defining such likeness or direct comp etitiveness. Thus, if the definition of the product
investigated grouped together products which were not like or directly competitive, it would not be
possible to determine the domestic industry within the investigation.
11. A similar argument was upheld in an analogous situation by the Panel in United States – Steel
Safeguards, when the relationship between a suitable definition of the imported products and the
causal link envisaged in Article 4.2(b) of the Agreement on Safeguards was analysed. In this
connection, the panel stated that:
"In our view, the imported product and the lik e or directly competitive products must
be defined in such a way that the causal link analysis required by Article 4.2(b) can
be undertaken. More particularly, they must be defined in such a way that, for
example, a coincidence or a conditions of competition analysis may be undertaken."
3
12. Colombia considers that this reasoning is also applicable to Article 4.1(c) of the Agreement
on Safeguards inasmuch as the definition of the product investigated could prevent the proper
identification of the domestic industry, a situation which would necessarily lead to a violation of the
above-mentioned Article.
13. For this reason, the criterion for establishing wh ether two different products can be regarded
as a single product investigated means that there must , at least, be a relationship of likeness or direct

3 Panel Report in United States – Steel Safeguards, paragraph 10.416.

competitiveness between them. Otherwise it would be impossible to comply with the requirement for
the determination of the domestic industry in Article 4.1(c) of the Agreement on Safeguards.
14. Colombia notes that the Dominican Republic do es not mention any criterion for establishing
how several products, in this case tubular fabric and polypropylene bags, could be included in a single
category. Apparently, this finding was based solely on considerations of a customs nature, which, in
Colombia's opinion, is not a reasonable and sufficien t basis for making such a determination. In the
words of the last sentence of Article 3.1 of th e Agreement on Safeguards, the identification of the
product investigated by the Dominican Republic would not be a finding or reasoned conclusion.
15. To accept that products investigated can be groupe d together without any justification of their
likeness or competitiveness would be contrary to the pr inciple of effectiveness in the interpretation of
treaties derived from Article 31 of the Vienna Convention
4, insofar as it would allow virtually any
kind of products to be included as a single whole in a safeguard investigation, regardless of the
relationship between them. Under this interpretation, products as different as alcoholic beverages and
dairy products could be included in a single investigation since, according to the Dominican Republic,
there are no rules applicable to this situation, a co nclusion that is manifestly absurd and contrary to
the Agreement on Safeguards.
16. Colombia therefore concludes that the grouping of tubular fabric and polypropylene bags in a
single category of products under investigation is inconsistent with the obligations under
Articles 4.1(c), 3.1, last sentence, and 4.2(c) of the AS.
II. THE REQUIREMENT OF "UNFORESEEN DEVELOPMENTS" UNDER
ARTICLE XIX:1(A) OF THE GATT 1994 AND THE AGREEMENT ON
SAFEGUARDS
17. On this point, the complainants allege that the Dominican Republic has not demonstrated the
existence of unforeseen developments insofar as it has not given a reasonable explanation of how
(i) the entry into force of DR-CAFTA, (ii) the globa l financial crisis and (iii) China's accession to the
WTO constitute unforeseen developments that would justify the imposition of a safeguard. For the
complainants, the reasons given by the Dominican Republic's authorities for treating these events as
unforeseen developments are inadequate.
18. In Colombia's opinion, the Panel should take into account the fact that, although there are
certain requirements that every Member of the WTO must meet to prove this element, the standard
cannot be construed in such a way as to make it de facto impossible to recognize these developments,
by laying down requirements that are difficult to meet in practice.
19. Colombia agrees with the statement by the Domini can Republic to the effect that the rule for
the application of the concept of "unforeseeability" is not clear and, on the contrary, makes it difficult
for any Member of the WTO to use the safeguard measures for which the Agreement on Safeguards
provides. In Argentina – Footwear , the Appellate Body defined the concept of unforeseen
developments as "unexpected" or "unforeseeable".
5 Likewise, the Panel in Argentina – Preserved
Peaches stated that: " The text of Article XIX:1(a) cannot support an interpretation that would equate

4 In the following cases the Appellate Body has referred to the application of the principle of
effectiveness in the interpretation of treatie s in settling disputes relating to the AS: Korea – Dairy ,
paragraphs 80-82, and Argentina – Footwear, paragraph 81.
5 Appellate Body Report in Argentina – Footwear, paragraph 91.

increased quantities of imports w ith unforeseen developments."
6 However, later in its report the same
Panel considered that "a statement that the increase in imports , or the way in which they were being
imported, was unforeseen does not constitute a demonstr ation as a matter of fact of the existence of
unforeseen developments".7
20. In recent years, the Appellate Body has ru led on several occasions on how the standard
relating to the existence of unforeseen developments should be met. Both these decisions and those
already mentioned have created some uncertainty as to how States should demonstrate the existence
of this situation.
21. In this connection, Colombia considers it re levant to clarify the concept of unforeseen
developments in such a way as to enable it to be applied clearly and effectively, with a view to
allowing the application of safeguard measures under the conditions envisaged in Article XIX of the
GATT and the Agreement on Safeguards. In Colomb ia's view, as long as this standard on unforeseen
developments perpetuates the uncertainty with regard to its application, it will be very difficult to
show that situations such as those submitted by the Dominican Republic can be regarded as meeting
the aforementioned requirement.
22. In Colombia's opinion, given the lack of clarity in this respect, the Panel's examination cannot
be de novo or involve a judgment that goes beyond the elements reasonably available to the Member
at the time the disputed measure was applied. Colombia takes the view that there is simply no support
in either the Agreement on Safeguards or Article XIX of the GATT for the opposite course of action
which, moreover, could potentially infringe essentia l legal principles of due process and substantive
justice.
23. These comments are without prejudice to Colombia's arguments as set out in its submission to
the Panel.

6 Appellate Body Report in Argentina – Preserved Peaches, paragraph 7.18.
7 Ibid., paragraph 7.24.

ANNEX D-2

ORAL STATEMENT OF THE UNITED STATES

1. Mr Chairman and members of the Panel, it is a pleasure to appear before you today to present
the views of the United States as a third party in these proceedings. The written submission of the
United States addressed the submissions of the comp laining parties, and we will not repeat those
points here. Today, the United States will addr ess the Dominican Republic's written submissions,
including its request for a pre liminary ruling as to whether the Agreement on
Safeguards ("Safeguards Agreement") and Article XIX of the General Agreement on Tariffs and
Trade 1994 ("GATT 1994") apply to the measures at issue in this proceeding.
Whether the Safeguards Agreement Is Applicable

2. The first issue we would like to discuss today is the applicability of the
Safeguards Agreement to the measures at issue.
3. Specifically, the Dominican Republic argues th at the Safeguards Agreement does not apply
because the increased tariff rates asso ciated with the measures do not exceed the relevant tariff
bindings of the Dominican Republic for the product or products in question – i.e. polypropylene bags
and tubular fabric.
1
4. Although the United States takes no position on the consistency of the measures at issue with
the WTO, it may be relevant to the question of th e applicability of the Safeguards Agreement that the
Dominican Republic apparently considered that th e measures were safeguards when it imposed them,
including notifying them as safeguard measures to the Committee on Safeguards. 2 It would also
appear as a general matter that it would be relevant as to exactly what the me asures at issue entail.
For example, the Dominican Republic represented that it relied on at least one of the provisions of the
Safeguards Agreement in structuring its measure s - it relied on Article 9.1 of the Safeguards
Agreement as a basis for not applying the increased duties to certain Members.
5. As a result, the Dominican Republic apparently relied on the measures as safeguards to justify
not applying its duties on the products at issue in a most-favoured-nation manner pursuant to
Article I:1 of the GATT 1994 when it exempted imports from certain developing countries
(i.e. Mexico, Panama, Colombia, and Indonesia) from the application of the me asures. As a result,
imports of polypropylene bags and tubular fabric from these countries are treated more favourably
than imports from other Members.
6. Accordingly, the question of whether the Domi nican Republic needed to suspend its tariff
concessions on the products at issue in order to im pose the measures at issue is only part of the
relevant legal analysis.
Definition of "Producers" Under Article 4.1(c) of the Safeguards Agreement

7. In addition, the United States would like to address the Dominican Republic's "reservation" of
the "right" to apply a minimum transformation or value-added test (at paragraph 251) to define

1 Dominican Republic's request for a preliminary ruling (18 April 2011).
2 G/SG/N/8/DOM/1/Suppl.2, G/SG/N/10/DOM/1, G/SG/N/11/DOM/1/Suppl.1 (18 October 2010).

producers for purposes of Article 4.1(c) of th e Safeguards Agreement. According to the
Dominican Republic, it reserves the right to excl ude entities, such as downs tream companies that
provide low value-added finishing services, from the universe of producers of like or directly
competitive products and, therefore, from the domestic industry.
8. It does not appear that the Dominican Republic applied a minimum transformation or
value-added test in determining producers for purpo ses of the measures at issue in this proceeding.
As a legal matter, the Panel shoul d not reach hypothetical issues that do not arise from the actual
determination of the competent authority that is at is sue in a dispute. Such issues would not form part
of the "matter" the Dispute Settlement Body h as charged the Panel with examining and would
therefore be outside the Panel's terms of reference under Article 7 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes.
9. In any event, the United States notes that ther e is nothing in the Safeguards Agreement that
prohibits the application of a minimum transforma tion or value-added test for purposes of defining
producers under Article 4.1(c) of the Safeguards Agreement.
Conclusion

10. This concludes our statement. Thank you again for this opportunity to express our views.

ANNEX D-3

ORAL STATEMENT OF PANAMA

Mr Chairman, members of the Panel:

1. As a third party, Panama welcomes this opportuni ty to give the reasons why it considers the
safeguard measures adopted by the Dominican Rep ublic, which are the subject of these proceedings,
to be inconsistent with GATT Article XIX and the WTO Agreement on Safeguards (AS).
2. Panama is of the view that this Panel will reach the same conclusion when it analyses the
Dominican Republic's actions within the context of the national investigation procedure and the
multilateral notification and consu ltation procedures established in Ar ticles 8.1, 12.1 and 12.3 of the
AS.
3. Panama believes that the investigation underlying the measures adopted by the
Dominican Republic's Investigating Authority was fl awed in its determinations with regard to:
(i) determination of the domestic industry; (ii) establishment of the existence of unforeseen
developments that may have caused injury to the dom estic industry; (iii) de termination regarding the
increase in imports; (iv) determination of injury; and (v) the causal link between imports and injury.
These determinations are not based on adequate and reasoned findings or on a detailed analysis of the
case, in accordance with Articles 3.1 and 4.2(c) and the substantive rules of the AS.
4. The lack of substantiation for these elements, wh ich are vital for an action under the AS, has
been argued extensively in these pr oceedings by the complaining parties and now by at least one of
the third parties. We recall, for instance, the ar guments put forward by the complainants in their
first written submission (see paragraphs 73 et seq .). Therefore, as you requested, Mr Chairman, and
to save time, we will refer to only three points con cerning the Dominican Republic's violations within
the framework of the AS and GATT Article XIX.
5. First, Panama reiterates its view that the Do minican Republic did not give timely notice or
hold prior consultations with those Members having a substantial interest in the measure, as provided
for in Article 12.3 of the AS and Article XIX:2 of the GATT; nor did it provide opportunities to
obtain an adequate means of trade compensation for those Members, as established in Article 8.1 of
the AS and Article XIX:2 of the GATT. We elabor ate on this point in our first written submission,
but feel it is important to reiterate it orally (see First Submission of Panama, paragraph 14).
6. Second, the Dominican Republic claims th at GATT Article XIX and the AS are not
applicable to the provisional and definitive measures adopted (see First written submission of the
Dominican Republic, paragraph 90 ). In Panama's view, it is clear that the Investigating Authority of
the Dominican Republic conducted the investiga tion and adopted the measures at issue under
Article XIX of the GATT and the AS. This is show n by the fact that, when it excluded imports from
Panama from the scope of the measure, the Domi nican Republic cited Article 9.1 of the AS (see
Preliminary Resolution, fourth article, as ame nded by Preliminary Amending Resolution; Final
Resolution, fourth article; CEGH-5 and 6 ). Panama agrees with the Dominican Republic that
Article 9.1 of the AS provides justification under WTO law for having excluded imports from Panama
from the application of this measure.

7. Moreover, the Dominican Republic notified the investigation and the provisional and
definitive measures to the WTO under Article 12 of th e AS. It is therefor e Panama's understanding
that GATT Article XIX and the AS do indeed appl y to the present proceedings, as affirmed by the
Dominican Republic in its own stat ements in support of its action ( see notifications of the measure by
the Dominican Republic, CEGH-18 to 21).
8. Third, and lastly, Panama disagrees with th e Dominican Republic's preliminary objection to
this Panel's terms of reference. We understa nd that the Dominican Republic objects to the
complainants having questioned the provisiona l and definitive measures in the light of
GATT Article XIX, the AS, GATT Articles I: 1 and II:1(a) and the second sentence of
GATT Article II:1(b), and other issues relating to the investigation, notification and consultations in
respect of the case ( First Written Submission of the Domi nican Republic, pa ragraphs 86 and 87 ).
Panama participated as an associated third party in the consultation meeting and, while safeguarding
the confidentiality of these consultations, believes that all the measures or complaints set forth in the
requests for the establishment of the Panel reasonabl y reflect the requests for consultations and the
developments that took place at the consultation meeting.
9. Panama understands that the Members of this Or ganization have the right to adopt measures
to safeguard their domestic industry. These measur es must, however, adhere to the legal principles
and processes embodied in the agreements signed by th e Members, as in the case of the AS, which is
our current focus. Panama is concerned that the safeguard measure adopted by the
Dominican Republic is inconsistent with the provis ions and procedures established in the AS and the
GATT. We trust that the Panel will reach the same conclusion, and that it will recommend that the
Dominican Republic withdraw the measures immediately.

ANNEX D-4

ORAL STATEMENT OF TURKEY

Mr Chairman and members of the Panel:

1. Turkey welcomes this opportunity to present its views in this proceeding. I will summarize
Turkey's position on the subject, to the extent possi ble, by refraining from repeating details presented
in our written submission.
2. Although the dispute covers many issues, Turkey would like to focus on some major subjects
and it is not the intention to present an opinion on th e specific factual context of this dispute and takes
no position whatsoever as to the defence and alle gations presented by the parties on whether the
specific measure at issue is inconsistent with the subject provisions of the WTO Agreements.
3. Turkey hereby wishes to contribute by expressing its opinion on some systemic issues
regarding the interpretation of the provisions of the Agreement on Safeguards.
4. As it is known, Article 2 of the Agreemen t on Safeguards determines the conditions for a
WTO Member country to apply safeguard measures. While paragraph 1 of this provision stipulates
the general conditions for a Member to apply a saf eguard measure, paragraph 2 of this provision
determines that the measure to be taken shall be appl ied to all products being imported to the territory
of that country irrespective of their source. In other words, safeguard measures are in principle
imposed on an MFN basis. In this regard, safegua rd measures have to be taken in reaction to an
increase in imports, from whatever source and not imports from a particular country.
5. On the other hand, Article 9.1 of the Agreem ent on Safeguards sets forth that the safeguard
measures shall not be applied against a product orig inating in a developing country Member as long
as its share of imports of the product concerned in the importing Member does not exceed 3 per cent,
provided that developing country Members with less than 3 per cent import share collectively account
for not more than 9 per cent of total imports of th e product concerned. Turkey's "developing country
status" has been recognized by Member States, including the Dominican Republic, and export
products from Turkey have been excluded from measures in safeguard investigations.
6. Turkey considers that the term "shall" which is enclosed in Article 9.1 of the Agreement on
Safeguards provides an obligation for Members to a pply the special and differential treatment to all
developing countries that meet the conditions.
7. In Turkey's view, in the case where a developing country's export of the product at issue to
the country applying the measure is 0 per cent, the applicatory country carries the obligation to
include that developing country in the list of c ountries exempt from the scope of the safeguard
measure. In this context, having in mind the fact that Turkey has no share in the
Dominican Republic's imports in question; the list of the developing countries, which are exempted
from the imposition of the safeguard measure in this case, should include Turkey, as well.
8. Turkey wishes to thank the Panel for this opportuni ty to submit its views during this hearing.
Turkey looks forward to answering any questions that Panel may have.
 Thank you, Mr Chairman.

ANNEX D-5

ORAL STATEMENT OF THE EUROPEAN UNION

Mr Chairman, distinguished members of the Panel:

I. INTRODUCTION
1. The EU makes this third party oral statement b ecause of its systemic interest in the correct
interpretation of Article XIX of the GATT 1994 and the Agreement on Safeguards . The EU
respectfully requests this Panel to take into account the observations already made in our Third Party
Written Submission when making findings in this case. Today, while not repeating those
observations, the EU will recall some of them and w ill make some additional remarks in view of the
comments made by other third parties.
II. APPLICABILITY OF THE AGREEMENT ON SAFEGUARDS
2. The first issue the EU would like to recall is the applicability of the Agreement on Safeguards
in the present case.
3. In the EU's view, Article 1 of the Agreement on Safeguards defines its scope by reference to
the measures "provided for in Article XIX of the GATT 1994". Article XIX of the GATT 1994
authorizes WTO Members to suspend the obligatio ns incurred under that agreement provided that
certain conditions are met. In this respect, it a ppears that the nature of a safeguard measure under
Article XIX of the GATT 1994 is of a derogation to obligations or commitments entered into by
WTO Members. If a measure, defined as a tariff in crease or a quantitative restriction, adopted by a
WTO Member does not amount to such a derogation, it will not be considered as a safeguard measure
pursuant to Article XIX of the GATT 1994 and, consequently, will not fall under the Agreement on
Safeguards.
4. Indeed, the EU observes that several provisions of the Agreement on Safeguards
1 make
reference to the need to maintain a "substan tially equivalent level of concessions and other
obligations" once the safeguard measure has been adopt ed precisely because of its inherent nature of
derogation to those concessions. This reference would not make se nse if a safeguard measure would
not lead to a suspension of obligations or concessi on since, in that case, there would be nothing to
compensate for.
5. In any event, as noted in our written submission, this does not necessarily imply that the tariff
measure at issue in this dispute falls entirely outside the scope of the Agreement on Safeguards. Such
a measure also comprises a set of actions taken by the Dominican Republic which can be examined in
view of the obligations contained in the Agreement on Safeguards . In the EU's view, actions when
initiating and conducting the investigation are governed by the Agreement on Safeguards even if the
investigation is terminated and no such measure is even tually imposed as a result of the investigation.
Thus, a fortiori in cases where the investigation shows that "the extent necessary to prevent or remedy
serious injury and … facilitate adjustment" 2 does not require going beyond the tariff binding, the EU

1 Agreement on Safeguards, Articles 7.2, 8.1 and 12.3.
2 Agreement on Safeguards, Article 5.1.

considers that the set of actions taken by the i nvestigating authority should still comply with the
Agreement on Safeguards.
3
III. DEFINITIONS OF PRODUCT UNDER CONSIDERATION AND DOMESTIC
INDUSTRY
6. The EU would also like to address some of the comments raised by Third Parties as regards
the need for an assessment of li keness or direct competition when defining the product under
investigation.4 As explained in our written submission, Article 4.1(c) of the Agreement on Safeguards
does not require such an assessment. Thus, WTO Members are not limited when determining the
product under investigation.
7. However, several obligations follow from that dete rmination. In particular, the definition of
the product concerned serves as the basis for dete rmining which products a nd producers should be
taken into account as the relevant output for the pur poses of defining the domestic industry. Insofar
as the parallelism between the prod uct under investigation and the like or directly competitive
domestic products is maintained, the definition of do mestic industry will conform to Article 4.1(c) of
the Agreement on Safeguards, without the need to establish that both inputs and the final product are
like or directly competitive products.
8. Furthermore, the EU notes that in US – Lamb the Appellate Body did not impose the
requirement to only include like or directly competitive pr oducts in the definition of product under
investigation. And certainly it did not say that inputs can only be included as part of the same product
under investigation if they are like or directly comp etitive with the finished product. This issue was
simply not addressed by the Appellate Body. Rather , in that case the Appellate Body questioned the
definition of the domestic industry which included inputs (i.e. live lambs) and the final product
(i.e. lamb meat) while the product under investigation was only the final product (i.e. lamb meat). In
other words, the Appellate Body questioned the l ack of parallelism between the product concerned
and the like or directly competitive domestic products.
IV. UNFORESEEN DEVELOPMENTS
9. The EU also recalls its position that the demons tration of "unforeseen developments" must be
made before imposing the safeguard measures. 5 This has been confirmed by the Appellate Body on
numerous occasions. The Dominican Republic bases its contention that the "unforeseen
developments" clause is not legally binding on argumen ts that have been explicitly rejected by the
Appellate Body. Thus, the Panel should follow previously adopted Appellate Body reports addressing
the same issues. 6 This does not mean that the Panel can disagree with previously adopted
Appellate Body reports and state so in its repor t. However, in order to ensure security and
predictability of the system 7, it should not depart from the Appellat e Body's consistent interpretation

3 Colombia's Third Participant Written Submission, paragraphs 18-22; Nicaragua's Third Party Written
Submission, paragraphs 5-9.
4 Colombia's Third Participant Written Submission, paragraphs 25-37.
5 Colombia's Third Participant Written Submission, paragraphs 47-50.
6 Appellate Body Report, US – Stainless Steel (Mexico), paragraph 161.
7 DSU, Article 3.7.

of the covered agreements, and thus leave the dissenting WTO Member the possibility of invoking
"cogent reasons" before the Appellate Body.
8
V. PARALLELISM AND ARTICLE 9.1 OF THE AGREEMENT ON SAFEGUARDS
10. Finally, the EU would like to add that the exclusion of certain developing countries from the
scope of application of the safeguard measure pur suant to the application of Article 9.1 of the
Agreement on Safeguards does not affect the parallelism under Articles 2.1 and 2.2. 9 Unlike other
situations, such as the inclusion of members of a free-trade area 10, the exception of developing
countries whose import share collectively does not exceed 9 per cent of the total imports of the
product concerned is explicitly provided for in the Agreement on Safeguards . Absent any
cross-reference to Article 2 or any clarification in Article 9 that those imports should also be excluded
for the relevant analysis under Article 2.1, the logi cal conclusion is that the negotiators did not intend
to require parallelism also with respect to an explicit exception to Article 2.2.
VI. CONCLUSIONS
11. To conclude, while not taking a final position on the merits of the case, the EU requests the
Panel to carefully review the scope of the claims in light of these observations.
 Mr Chairman, distinguished Members of th e Panel, thank you for your kind attention.

US – Stainless Steel (Mexico), paragraph 162; and Panel Report, US – Continued Zeroing, paragraphs 7.181 and
7.182 ("As discussed above, we share a number of concerns raised by the Panel in US – Stainless Steel
(Mexico), particularly with regard to the US mathematical equivalence argument. We recognize, however, that
the Appellate Body in its report reversed the Panel's findings and this report gained legal effect through adoption
by the DSB. We note that this continues a series of consistent recommendations made by the DSB over the past
several years following reports that addressed the same issues based largely on the same arguments. Given the
consistent adopted jurisprudence on the legal issues that are before us with respect to simple zeroing in periodic
reviews, we consider that providing prompt resolution to this dispute in this manner will best serve the multiple
goals of the DSU, and, on balance, is furthered by fo llowing the Appellate Body's adopted findings in this
case").
9 US Third Participant Written Submission, paragr aphs 14-17; Nicaragua's Third Party Written
Submission, paragraphs 10-11.
10 Appellate Body Report, US – Line Pipes , paragraph 197; Appellate Body Report, US – Wheat
Gluten, paragraph 96; and Appellate Body Report, US – Steel Safeguards, paragraph 441.

ANNEX E

EXECUTIVE SUMMARIES OF THE SECOND WRITTEN SUBMISSIONS OF
THE PARTIES

Contents Page
E-1 Executive summary of the second written submission of the
complainants
E-2
E-2 Executive summary of the second written submission of the
Dominican Republic
E-11

ANNEX E-1

EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF
THE COMPLAINANTS

I. INTRODUCTION
1. In this second written submission, Costa Rica, El Salvador, Guatemala and Honduras ("the
complainants") will refute the arguments put forwar d by the Dominican Republic in the request for a
preliminary ruling contained in its first written submission, as well as in its oral statements and its
replies to the Panel's questions.
II. THE APPLICABILITY OF ARTICLE XIX OF THE GATT AND THE AS
2. First of all, as is clear from the design, structure and architecture of the provisional and
definitive measures
1, the latter impose "other duties or charges" within the meaning of Article II:1(b),
second sentence, of the GATT, given the following attributes of an objective nature, which distinguish
them from ordinary customs duties: (a) the proces s of formulation of the measures (administrative
process compared with the legislative process which characterizes ordinary customs duties) 2; (b) the
intention of the authority which gave rise to the measure ("second tariff") 3; (c) its actual wording
(alternative duty to the ordinary customs duty)4; (d) its actual administration (treatment different from
ordinary customs duties)5; and (e) the express admission by the Dominican Republic that the measure
replaces the ordinary customs duty ("as long as the increased tariff applies, the ordinary MFN tariff
shall not apply").6
3. Secondly, the Dominican Republic argues that Article XIX:1(a) excludes the possibility of
imposing safeguard measures that imply a suspension of Article I:1 of the GATT, suggesting that it is
not legally feasible to suspend the obligation under this provision in the context of a safeguard action.
For that purpose, it cites various views of individu als or relevant historical background concerning
Article XIX. 7 However, the underlying issue is the fact that the text of Article XIX:1(a) does not
make the distinction referred to by the Dominican Re public. The term "obligation" is not subject to
any qualification. As mentioned by the EU, a not e to the analogous provision to Article XIX in the
Havana Charter (the predecessor to the GATT 1947) imposed the obligation of non-discrimination
against imports from any member country. However, that note was deleted and does not appear in the
text of the GATT. 8 The negotiating history plays a secondary role in the interpretation of an

1 Replies of the complainants to questions 26 and 27.
2 Exhibit CEGH-23. Reply of the Dominican Republic to questions 31 and 32. Response to the
preliminary request, paragraph 123; opening statement of the complainants, paragraphs 143 and 144.
3 Exhibits CEGH-7 (page 93) and CEGH-10 (page 97). Response to the preliminary request,
paragraph 123; opening statement of the complainants, paragraph 121.
4 Exhibit CEGH-9 (pages 8 and 9 - second article). Response to the preliminary request,
paragraph 123; opening statement of the complainants, paragraph 142.
5 Exhibits CEGH-30 and CDGH-31. Reply of the complainants to question 26.
6 Opening statement of the Dominican Republic, paragraph 47.
7 Reply of the Dominican Republic to question 60 from the Panel.
8 Reply of the EU to question 2 from the Panel.

international agreement. The complainants' view th at the term "obligation" covers all obligations
under the GATT is shared by the United States
9 and the EU.10
4. Thirdly, the Dominican Republic argues that the AS covers only measures that involve a
suspension of obligations, but no other actions relati ng to a safeguard investigation, because Article 1
of the AS requires that the AS shall apply only to measures provided for in Article XIX of the GATT.
Conversely, if a measure other than one of those pr ovided for in Article XIX of the GATT is taken, it
is not applicable. 11 The complainants contend that the me asures at issue imply a suspension of
obligations under Articles I:1, I:2(a) and II:1(b) of the GATT, for which reason, even under the
Dominican Republic's interpretation, these measures are safeguard measures. Notwithstanding, even
if it is considered that the measures do not imply a suspension of obligations within the meaning of
Article XIX of the GATT, the complainants cont end that the measures and all aspects of the
investigation are covered by the AS and by Article XIX.
5. In the complainants' view, the reference to "measures provided for in Article XIX of
GATT 1994" in Article 1 of the AS does not mean th at any safeguard measure necessarily implies the
suspension of obligations or the withdrawal or modification of concessions. If that were the case,
Article 11.1(a) of the AS would be deprived of any meaning. The approach suggested by the
Dominican Republic would imply that a safeguard i nvestigation, including the determination of the
right to apply safeguard measures, could not be challenged until the adoption of a measure had been
verified.
6. Through its interpretation, the Dominican Re public would appear to be suggesting the
introduction of a rule analogous to Article 17.4 of the Anti-Dumping Agreement with regard to the
scope of safeguard measures, via the interpretation of the Panel. Article 17.4 of the Anti-Dumping
Agreement establishes an effective limit on the righ t to submit an anti-dumping dispute to a panel,
unless an anti-dumping measure at least exists. However, in the matter of safeguards, there is no
provision analogous to Article 17.4 of the Anti-Dump ing Agreement that could be contained in the
AS. Nor is it foreseen in Appendix 2 of the DSU th at safeguard disputes should be subject to special
or additional provisions as indeed provided for under Article 17.4 in respect of anti-dumping disputes.
7. Accordingly, the complainants consider that the "measures provided for in Article XIX of
GATT 1994" in Article 1 of the AS refers to any t ype of measure available to an importing Member
that has established the right to apply a safeguard measure in accordance with the first part of
Article XIX:1(a) and the AS; that is to say, a measure responding to the serious injury caused by
increased imports as a result of unforeseen developmen ts and the effect of the obligations incurred
under the GATT, including tariff concessions.
8. The term "shall be free" in the last part of Ar ticle XIX:1(a) of the GATT means that, prior to
verification of the circumstances and conditions provid ed for in the first part of Article XIX:1(a), a
Member is entitled to suspend an obligation, or to withdraw or modify concessions. However, this
entitlement does not mean that the action taken by the Member in response to the serious injury
should necessarily involve a suspension of obligations or the withdrawal/modification of a
concession. The purpose of the AS and of Article XIX of the GATT is to provide a mechanism to
prevent or remedy serious injury to the domestic industry caused by increased imports as a result of
unforeseen developments and the effect of obligatio ns under the GATT, and to facilitate adjustment.

9 Reply of the United States to question 2 from the Panel.
10 Reply of the EU to question 2 from the Panel.
11 Reply of the Dominican Republic to questions 62 and 77 from the Panel.

Articles 5 and 7 of the AS require that a safeguard measure be applied solely and exclusively to the
extent and during the period "necessary" to preven t or remedy serious injury and to facilitate
adjustment. Any measure that goes beyond what is "necessary" either in magnitude or time-scale is in
violation of these provisions of the AS, even if th e measures fall within the scope of bound measures
or are not inconsistent with general GATT obligations.
9. The Dominican Republic's interpretation could lead to a circumvention of other trade policy
instruments such as anti-dumping duties and counterva iling duties. Under that interpretation, if a
Member that initiates and carries forward an anti-dumping investigation (in accordance with
Article VI of the GATT and with the Anti-Dumping Agreement) observes flaws in the investigation,
that Member could evade questions under those in struments by terminating the investigation in
question without applying an anti-dumping duty, and subsequently increase the tariff up to the level
that would have corresponded to the anti-dumping dut y, but below the bound level in order to be able
to affirm that no anti-dumping measure has been im posed and that, at the same time, there is no
violation of the bound tariff. Clearly, this interp retation would be contrary to the spirit of the
WTO Agreement. The complainants trust that this Panel will not set a precedent that renders
inoperative these trade policy instruments which are of fundamental importance in multilateral trade
relations.
III. THE PRELIMINARY OBJECTIONS CONCERNING THE TERMS OF
REFERENCE OF THE PANEL
10. The Dominican Republic argues that the alle ged inconsistency between the request for
consultations and the panel request has changed the essence of the complaints.
12 The complainants
note that the change in the essence of a complaint is a criterion that has been used in objections to the
inclusion of additional measures but not in objections to the inclusion of additional legal bases 13,
which are the kind of objections raised by the Domi nican Republic in this dispute. In addition, the
essence of the complaints has not changed inasmuch as the measures, the products at issue and the
covered agreements relied upon have always been the same.
11. As part of another preliminary objection, the Dominican Republic also states that the
complaints under Articles I and II of the GATT are ne w complaints since they were not included in
the request for consultations 14 and "bear no relationship whatsoever to the submissions contained in
the request for consultations". 15 As was explained above, these claims come within the Panel's terms
of reference by virtue of the express reservati on contained in the request for consultations. 16 Contrary
to the contention of the Dominican Republic, the r eservation in question cannot be characterized as
"very full" since it refers only to the right of the complainants to raise additional matters in
accordance with the AS and the GATT 1994, and in the context of concerns relating to provisional and
definitive measures, as well as the related proceedings.

12 First written submission of the Dominican Republic, paragraphs 67, 82, 84 and 89. Replies of the
Dominican Republic to the questions from the Panel at the first substantive meeting, pages 62-65.
13 Panel Report, EC – IT Products , paragraph 7.182; Panel Report, Dominican Republic – Cigarettes ,
paragraph 7.19; Appellate Body Report, US – Zeroing (EC) (21.5), paragraph 383; Appellate Body Report,
Brazil – Aircraft, paragraph 132.
14 First written submission of the Dominican Republic, paragraph 89.
15 Replies of the Dominican Republic to the questions from the Panel, page 64.
16 Initial oral statement of the complainants at the first substantive meeting, paragraphs 34-45; replies
of the complainants to the questions from the Panel at the first substantive meeting, paragraphs 152-160.

IV. THE DEFINITION OF THE DOMESTIC INDUSTRY
12. The claim concerning the domestic industry is a compound claim which subsumes various
related complaints. The complaint relating to the definition of the imported product under
investigation refers to the lack of "adequate and reasoned explanations" in the light of the
requirements of Articles 3.1, last sentence, and 4.2(c) of the AS.
17 The complainants observe that in
section 4.2.4, the Dominican Republic bases its ar gument on the mistaken idea that the claims
concerning the imported product under investigation refer to the alleged existence of guidelines for
their definition; this is not the case, as is clear from the first written submission, the opening
statement at the first meeting with the Panel, th e replies to the Panel's questions and this second
written submission.18
13. It is clear that the Dominican Republic failed to demonstrate that its investigating authority
had given an adequate and reas oned explanation concerning the various questions and factual
information provided by the numerous interested pa rties which called into question the definition of
the product under investigation, and that it also faile d to demonstrate that it had provided an adequate
and reasoned explanation of the reasons for tariff classification on which it had based its decision to
consider tubular fabric and polypropylene bags as a single product under investigation.
14. Regarding the Dominican Republic's argument th at "there are no Panel or Appellate Body
determinations which explicitly in terpret the terms "like product" or "directly competitive product" in
the context of determinations covered by the AS"19 the complainants fail to see the significance of that
argument and observe that the Dominican Republic ignores the recent settled case law of the
Appellate Body in the EC – Civil Aircraft case. The absence of determinations explicitly interpreting
the terms "like product" and "directly competitiv e product" does not exempt the investigating
authorities from making explicit findings and providing adequate and reasoned explanations in respect
of both definitions. Nor does it exempt the i nvestigating authorities from following a mandatory
order of analysis in order to define the domestic industry.
15. Consequently, there are no grounds for rejecting the arguments relating to the inconsistency
of the determination regarding the imported product under investigation. In particular, it is clear that
the Dominican Republic failed to demonstrate that its investigating authority had provided an
adequate and reasoned explana tion concerning the various ques tions and factual information
submitted by the numerous interested parties, whic h called into question the definition of the product
under investigation, and that it also failed to demo nstrate that it had given an adequate and reasoned
explanation of the reasons for tariff classificati on on which it had based its decision to consider
tubular fabric and polypropylene bags as a single product under investigation.

17 First written submission of the complainants, paragraph 94. Opening oral statement by the
complainants, paragraphs 63 to 65.
18 First written submission of the complainants, paragraph 94. Opening oral statement by the
complainants, paragraphs 63 to 65. Second written submission of the complainants, paragraph 85.
19 First written submission of the Dominican Republic, paragraph 191.

V. UNFORESEEN DEVELOPMENTS AND THE EFFECT OF OBLIGATIONS
INCURRED UNDER THE GATT
16. The Dominican Republic has explained that the following events were considered as
unforeseen developments: (i) China's accession to the WTO; and (ii) the tariff cuts resulting from
free trade agreements.
20
17. As a factual matter, from the beginning of the process of China's accession to the WTO and at
the time when the WTO Agreement entered into force for the Dominican Republic (i.e. on
9 March 1995), the negotiations regarding China's accession were already under way, having begun in
1987. Hence, China's accession to the WTO in 2001 does not constitute a development that was
unforeseen or unexpected for the Dominican Republic when the WTO Agreement entered into force
in 1995. On the contrary, in 1995 it was foreseen that at some point in the future China would join the
WTO once negotiations with the various Members of this Organization were completed.
18. The Dominican Republic also makes the ex post argument that the tariff cuts under the
Central America-DR Agreement and DR-CA FTA constitute unforeseen developments. 21 The initial
provisions of these free trade agreements indicat e that both were entered into pursuant to
Article XXIV of the GATT, which, following th e establishment of the GATT 1947, stipulated the
possibility for Members of the GATT/WTO system to form free trade areas or customs unions. 22
Upon joining the WTO, the Dominican Republic assumed the rights and obligations contained in the
WTO Agreement, including the provisions of Article XXIV of the GATT. 23 This implies that, for the
Dominican Republic as a WTO Member, the possib ility of signing free trade agreements under
Article XXIV of the GATT was not an unforeseen event.
19. Even assuming, quod non , that China's accession and the tariff cuts pursuant to the
above-mentioned agreements had constituted unforeseen developmen ts for the Dominican Republic
and that the latter had made the relevant adequate and reasoned finding in its technical reports (or
resolutions), it is clear that no logical connectio n whatsoever was establishe d between these events
and the alleged increase in imports of polypropylene bags and tubular fabric.
VI. THE ALLEGED INCREASE IN IMPORTS
20. In response to question 96, the Dominican Republic acknowledges that the treatment of
tubular fabric and polypropylene bags as a single product affected the determination of increased
imports, since the data relating to imports of both products were analysed in conjunction.24 Given this
explicit acknowledgement, the compla inants consider that, if the Panel finds that there were

20 Replies of the Dominican Republic to the questions from the Panel at the first substantive meeting,
page 93.
21 Replies of the Dominican Republic to the questions from the Panel at the first substantive meeting,
page 93.
22 Central America-DR Agreement, Article 1.01 ("The Parties estab lish a free trade area in accordance
with the provisions of Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the
General Agreement on Trade in Services (GATS) of the WTO Agreement"), Exhibit CEGH-37; DR-CAFTA,
Article 1.01 ("The Parties to this Agreement, purs uant to the provisions of Article XXIV of the General
Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, establish a
free trade area"), Exhibit CEGH-38.
23 The Enabling Clause is another instrument that provides for the possibility of regional trade
arrangements.
24 Reply of the Dominican Republic to question 96 from the Panel.

no adequate and reasoned explana tions regarding the definition of the imported product subject to
investigation, the analysis of increased imports would also be invalid, since the investigating authority
used in that analysis the same definition of the im ported product subject to inve stigation, which is not
supported by the provisions of the AS. In other wo rds, an element that is inconsistent with the
provisions of the AS (in this case the definition of the imported product subject to investigation under
Articles 3.1, last sentence, and 4.2(c)) and which is used as a basis for another analysis required by the
AS, such as the determination of the increase in import s, cannot lead to an evaluation of that increase
that is consistent with the AS. For this reason alone, the determination of increased imports should be
declared inconsistent with Article XIX:1(a) and Articles 2.1, 3.1, last sentence, and 4.2(c) of the AS.
21. With regard to the final determination, speci fically, the Dominican Republic uses information
from outside the period of investigation in an attemp t to explain the decrease in imports up to the end
of the period of investigation. As this informati on lies outside the period of investigation, it is not
appropriate to take it into consideration.
VII. THE ALLEGED SERIOUS INJURY
22. The Dominican Republic asserts that there was no need to carry out a separate analysis of
certain sectors because it evaluated fabric and polypr opylene bags as a whole and did not conduct an
analysis by sector or segment.
25 The problem with this assertion is that, in actual fact, the
Dominican Republic did conduct an analysis by sector with regard to production by volume - that of
finished bags - as was acknowledged by its own investigating authority, since that was the only
information which was available on that aspect.26
23. Thus, the investigating authority assumed that the finished bags sector comprised the total
output of tubular fabric and polypropylene bags. However, the information from the
Dominican Republic's own reports also shows that there was production of tubular fabric, beyond that
used captively by FERSAN, which was destined for th e commercial market (sales of tubular fabric to
FIDECA), which could not therefore be considered as being included within the volume production of
finished bags.
24. With regard to the market share of impor ts as a percentage of consumption, the
Dominican Republic again puts forward an ex post explanation which has no basis in its
determinations. This explanation should also be rejected. Nevertheless, even if it were taken into
consideration, what the Dominican Republic is asserting is that, on account of the investments
undertaken, FERSAN deserved to have a greater share of the market than that which it obtained at the
end of the period.27 The Dominican Republic leaves aside the objective figures which show precisely
the opposite: that FERSAN was gaining market shar e at the expense of imports. Not even on an
ex post basis does the Dominican Republic provide an explanation as to how investments in
technology by FERSAN could justify an "adjustmen t" of market share beyond the objective figures
found in the DEI reports.
25. Concerning the assessment in respect of stocks , the Dominican Republic admits that it made
an end-to-end assessment without consid ering the trends in this indicator. 28 It is clear, therefore, that
the evaluation required by Articles 4.2(a), 3.1 and 4.2( c) of the AS was not carried out. This point is

25 Reply of the Dominican Republic to question 127 from the Panel.
26 Initial report page 14.
27 Reply of the Dominican Republic to question 127 from the Panel.
28 Reply of the Dominican Republic to question 141 from the Panel.

supplementary to the other objections raised with re gard to the valuation of inventories, which we
have mentioned in our previous written submissions.
29
26. Regarding the injury evaluation criterion in re lation to the preliminary determination, the
Dominican Republic presents an interpretation which would have the effect of lowering the standard
of proof, by even eliminating the evaluation of the indicators referred to in Article 4.2(a) of the AS for
this type of determination. The complainants strongly disagree with this approach. As the
complainants mentioned in their reply to question 14 6, there is no reason to consider that the concept
of serious injury or threat of serious injury is different in Articles 4 and 6 of the AS, especially since
Article 4.1 defines both concepts "for the purposes" of the AS.
VIII. THE ALLEGED CAUSAL LINK
27. We note that the Dominican Republic has offere d no defence arguments in addition to those
put forward in its first written submission in connection with our complaints concerning causation and
non-attribution. The complainants have alread y responded to the Dominican Republic's defence
concerning these two complaints, as set out in our initial oral statement at the first substantive
meeting.30
IX. PARALLELISM BETWEEN THE SCOPE OF APPLICATION OF THE MEASURE
AND THE SCOPE OF THE INVESTIGATION
28. As was noted previously by the complainants, the obligation with regard to parallelism is
enforceable irrespective of the reasons why a Member decides to exclude imports from certain origins
from the application of the measure. 31 The complainants do not agree with the Dominican Republic's
interpretation to the effect that Article 9.1 of the AS constitutes an exception to the parallelism
requirement since: (i) the AS contains no textual basi s for such an interpretation; (ii) the parallelism
obligation has been defined in general terms by th e Appellate Body, without providing for exceptions
to its fulfilment.
29. Nor is the parallelism obligation limited to situa tions of exclusion of imports from countries
that are trading partners under an FTA. Alt hough the Appellate Body defined the parallelism
obligation when examining safeguard measures that excluded imports from free trade areas, this does
not imply that the obligation itself is limited to that context.
X. NOTIFICATION, LACK OF CONSULTATIONS AND OF MEANS OF TRADE
COMPENSATION
30. The complainants reiterate their view that th e proceedings and hearings carried out in the
safeguard investigation under the jurisdiction of the Dominican Republic cannot be treated as
equivalent to consultations at multilateral level as prescribed by Article 12.3 of the AS. The conduct
of an investigation which provides adequate opportunity for the interested parties to put forward their
arguments constitutes compliance with the obligation set out in Article 3.1, but no reference is made
to the prior consultations provided for in Article 12.3. Accordingly, the Dominican Republic's
interpretation would make Article 12.3 redundant, since it would mean that the conduct of the

29 First written submission of the complainants, paragraphs 218-223; opening statement,
paragraphs 89-90.
30 Initial oral statement of the complainants at the first substantive meeting, paragraphs 99-115.
31 Initial oral statement of the complainants at the first substantive meeting, paragraph 118.

investigation required by Article 3.1 would automatically imply compliance with Article 12.3. This
proposition should be rejected as it would be contra ry to the principle of effectiveness in the
interpretation of treaties.
32
XI. THE VIOLATIONS OF ARTICLES I:1, II:1(A), AND II:1(B) OF THE GATT
A. COMPLAINTS UNDER ARTICLE I:1 OF THE GATT
31. Both the provisional measure and the definitive m easure are inconsistent with Article I:1 of
the GATT, inasmuch as the exclusion of imports from Colombia, Indonesia, Mexico and Panama
from the scope of those measures constitutes an advant age, favour, privilege or immunity granted to
imports from those origins and is not granted "immediately and unconditionally" to any "like product"
originating in the territories of all the other WTO Members.
32. Furthermore, the criterion for the granting of such an advantage, favour, privilege or
immunity is discriminatory even where there is co mpliance with the principle that imports should not
individually, by origin, exceed 3 per cent of tota l imports, or collectively account for more than
9 per cent of that total during the period under investigation. 33 For example, that criterion was not
applied to exclude imports from Thailand, which are less than 3 per cent.34
33. The complainants note that the Dominican Re public shares this view. In its reply to
question 2 from the complainants, the Dominican Republic stated that it "understands, as indicated in
its final statement at the first substantive meeting of the Panel, that the exclusion of certain countries
under this provision raises problems in situati ons where the safeguard measures adopted in
accordance with this law do not c onstitute safeguard measures under th e terms of Article XIX of the
GATT and the Agreement on Safeguards".
35
B. COMPLAINTS UNDER ARTICLE II:1(a) AND II:1(b) OF THE GATT
34. Article II:1(b) prohibits the application of import duties and charges other than ordinary
customs duties. By way of exception to this prohib ition, a Member may maintain a duty or charge of
this nature which existed at "the date" of the GATT [1994] or which was enforceable under
mandatory legislation in the territory of the Memb er before that date. Another exception is where
other import duties and charges distinct from ordina ry customs duties have been recorded in the
Schedule of Concessions of the Member concerned. Both the provisional and the definitive measure
imposed by the Dominican Republic are "tariff surc harges" or, in general terms, import charges or
duties other than "ordinary customs duties", which are applied to imports of polypropylene fabrics and
bags. The Dominican Republic's regulations do not describe them in this way. However, the
complainants chose the term "tariff surcharges" because they represent rates different from the
"normally applicable MFN tariff" 36; different, that is, from an ordinary customs duty under
Dominican legislation.37

32 Appellate Body Report, US – Gasoline, page 25: see also Appellate Body Report, Japan – Alcoholic
Beverages, page 12; Appellate Body Report, Korea – Dairy, paragraphs 81-82.
33 Preliminary resolution, paragraphs 50 and 51; final resolution, paragraphs 42 and 43.
34 Preliminary report, Annex I; final report, Annex I.
35 Reply of the Dominican Republic to question 2 from the complainants; final statement of the
Dominican Republic at the meeting with the Panel, paragraph 17.
36 Opening statement of the Dominican Republic, paragraph 47.
37 Exhibit CEGH-27.

35. It is important to emphasize that the tariff surcharge was designed by the investigating
authority of the Dominican Republic as a "second tariff"
38 and that the definitive measure operates as
an alternative to the MFN tariff, so that either th e surcharge or the ordinary customs duty is applied,
whichever is higher. 39 Moreover, in accordance with Tariff Reform Law No. 146-00 of
11 December 2000, ordinary customs duties or tariffs can only be amended by a legislative act.40
36. It should also be mentioned that the Dominican Republic failed to record in its Schedule of
Concessions the possibility of applying other duti es or charges of any kind imposed on or in
connection with the importation in excess of those imposed on the date of the GATT 1994. 41 This
excludes the possibility of justifying the measures at issue under Article II:1(a) of the GATT.
37. Consequently, the provisional and definitive meas ures are inconsistent with Article II:1(b),
second sentence, of the GATT and by implication, with Article II:2(a) of the GATT.

38 Exhibit CEGH-7, page 93. Exhibit CEGH-10, page 97.
39 Exhibit CEGH-9, pages 8 and 9, second article.
40 Articles 5, 6 and 7 of Tariff Reform Law No. 146-00, Exhibit CEGH-22.
41 See Exhibit CEGH-27.

ANNEX E-2

EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF
THE DOMINICAN REPUBLIC

1. The Dominican Republic affirms that Article XIX of the GATT and the Agreement on
Safeguards ("AS") do not apply to the measures at i ssue. This makes it impossible to evaluate the
consistency of these measures with the disciplines cite d. In addition, the Dominican Republic affirms
that, even if these provisions were applicable, the measures at issue are fully consistent with them.
1. ARTICLE XIX OF THE GATT AND THE AGREEMENT ON SAFEGUARDS DO
NOT APPLY TO THE PRESENT DISPUTE
2. The applicability of these provisions depends on obj ective criteria (namely, the fact that the
measures imply the suspension of an obligation or the withdrawal or modification of a concession),
without decisive subjective criteria such as statements by the national authorities.
1.1 Even if it is considered that the measures at issue constitute suspension of Article I:1 of
the GATT, they do not fall within the scope of Article XIX of the GATT and the
Agreement on Safeguards

3. Article I:1 of the GATT is not one of the "obl igations" that may be suspended according to
Article XIX:1(a). Consequently, even if it is conclu ded that the measures at issue suspend Article I:1,
this does not mean that they constitute safeguards. There are five reasons for this.
4. Firstly, safeguards must be applied without discrimination (according to Article 2.2 of the
AS), with Article 9.1 of the AS being an excepti on to this non-discriminatory application. To
consider that Article XIX of the GATT allows the suspension of Article I:1 would amount to a
contradiction between the WTO Agreements. Sec ondly, this is confirmed by the history of the
Uruguay Round negotiations, which led to the inclusion of Article 2.2 of the AS. Thirdly, Article I:1
of the GATT is not the obligation whose effect is in creased imports that cause serious injury in the
terms of the first sentence of Article XIX:1(a) of the GATT and, hence, is not the obligation that can
be suspended in the terms of the second sentence of Ar ticle XIX:1(a). Fourthly, Article 9.1 of the AS
requires the previous existence of a safeguard measure in order to apply, so it is illogical to claim that
reference to Article 9.1 of the AS is in itself indica tive of the existence of a safeguard in the terms of
Article XIX of the GATT. Fifthly, and finally , the Dominican Republic draws attention to the
illogical interpretation put forward by the co mplainants: imposing a safeguard measure ( erga omnes,
as required by Article 2.2 of the AS) consisting of the suspension of Article I:1 of the GATT, which
could only result from the exemption provided in Ar ticle 9.1 of the AS, would mean that the only
content of the safeguard measure would be the exemption of certain countries from its scope; it
would be a safeguard measure that would only provide for its non-application.
1.2 The measures at issue do not suspend Articl e II:1(b) of the Agreement on Safeguards as
they cannot be classified as "other duties or charges"

5. The complainants contend that the objective of the measures was to create a "second tariff" to
be applied in addition to the common tariff appli cable (MFN). These measures, however, in fact
replace this tariff, as recognized by the complainan ts, contradicting themselves, so they constitute

"ordinary customs duties"; if they were other ta riffs, they could not replace the tariff previously
applicable but only be added to it.
6. Mere modification of the tariff rate is not equi valent to the imposition of "other duties and
charges", and this cannot be concluded either from th e fact that the tariff wa s adopted as the result of
an investigation initiated at the request of the dom estic industry (as the Appellate Body indicated in
Chile – Price Band System). As the measures did not affect the tariff in any other way, they cannot be
termed "other duties or charges", and consequently the tariff resulting from the measures, as indicated
in India – Additional Import Duties, naturally constitutes an ordinary customs duty.
7. The complainants also contend that, as Law No . 146-00 provides that existing customs duties
can only be modified by means of a legislative act , the measures at issue are not ordinary customs
duties but "other duties or charges" because they we re established by means of an administrative act.
This statement overlooks Law No. 1-02, which allows a temporary increase in the tariff determined by
means of an administrative act, and also that the type of act created by the Members in the dispute is
irrelevant from the point of view of WTO law.
8. Lastly, the fact that the duties applied by a Member do not appear in its schedule does not
prevent such duties from being ordinary customs du ties. As the measures at issue are not "other
duties and charges", they come under the category of "ordinary customs duties" and as they apply at a
rate lower than the pre-existing ordinary MFN tariff, they are consistent with the first sentence of
Article II:1(b) and do not constitute safeguards.
1.3 The Agreement on Safeguards does not apply to the investigation prior to the adoption
of the measures at issue

9. The complainants contend that Article XIX of the GATT and the AS apply to the
investigation that preceded the adoption of the meas ures at issue, even though these do not constitute
safeguard measures. The Dominican Republic consid ers that dissociating the investigation from the
measures is an artificial distinction and is meaningless.
10. This is shown by the relevant provisions of the AS. Firstly, according to Article 1, the
applicability of AS rules presupposes the application of a safeguard measure. Secondly, Article 3.1
does not impose any investigation obligation prior to the adoption of measures that are not safeguards.
Lastly, this is confirmed by Article 11.1(a) because it is when the investigation is concluded that it
becomes certain whether or not a safeguard measure is to be adopted, so it makes no sense to subject
investigations that do not result in the adoption of such a measure to the disciplines in Article XIX.
The contrary interpretation of this Article put forward by the complainants is contradicted by
Article 11.1(c), which specifically excludes the ap plication of the AS to measures, such as the
measures at issue, that are consistent with the GATT.
11. The Dominican Republic affirms that it is not a question of "seek to adopt" a safeguard
measure in the terms of Article 11.1(a) of the AS, as confirmed by the facts: at a very early stage in
the investigation it became clear that the measure would not be an increase above the ceiling bound
rate, as the complainants themselves mentioned prio r to the adoption of the provisional measure. In
any event, the investigation is exempt according to Article 11.1(c).
12. Be that as it may, the Panel should abstain from reaching findings regarding the claims
concerning the investigation stage, as this is not required in order to ensure a positive settlement of
this dispute, in conformity with Article 3.7 of the DSU.

13. The Dominican Republic also notes that the complainants request a recommendation on
abstention from applying safeguard measures, whereas such a solution is not a possibility afforded by
the WTO dispute settlement mechanism.
2. THE MEASURES AT ISSUE IN THE LIGHT OF ARTICLE XIX OF THE GATT
AND THE AGREEMENT ON SAFEGUARDS
2.1 The definition of the domestic industry is fully consistent with the requirements in the
Agreement on Safeguards

14. In the first place, the determination of the product under investigation was clear and
unequivocal, sufficient and reasoned, consistent with the AS, contrary to what is asserted by the
complainants. As the parties agreed that ther e was no need to prove likeness or a competitive
relationship between the articles comprising the prod uct under investigation (as the complainants did
not claim this) and having taken into account the questions posed by certain participants, the
complainants' assertions regarding this determination do not stand up.
15. Secondly, the determination of the like a nd directly competitive domestic product was
reached by the Commission after extensive considera tion, even bearing in mind that it is obvious that
the product under investigation and the like domest ic product are directly competitive inasmuch as
they are identical.
16. Contrary to the complainants' interpretation, the production process was not a decisive factor
in defining the like domestic product, but was one of the criteria used to identify the domestic
industry.
17. The Dominican Republic emphasizes that the like domestic product does not include flat
tubular fabric, contrary to what the complainants appear to contend.
1
18. Thirdly, in order to determine the domestic industry, it was not necessary to make a
determination of likeness or direct competition between the input and the finished product, contrary to
what is asserted by the complainan ts, because the determination of the domestic product used a basis
for determining the domestic industry is identical to the product under investigation.
19. Article 4.1 itself of the AS specifically envisages the possibility that the domestic industry
does not cover all producers of the like product, as confirmed by WTO case law. 2 In order to define
the domestic industry, the Commission considered all the producers mentioned by FERSAN in its
domestic producer form 3 and then excluded, by means of reasoned arguments, those producers that
showed no interest in taking part in the proce dure, those that were not producers (according to
Article 4.1(c) of the AS and WTO case law4) and Textiles Titán.
20. Textiles Titán was excluded because productio n of the product under consideration
represented only a very small percentage of its ac tivities compared to import and conversion. The

1 Replies by the complainants to questions by the Panel after the first substantive meeting,
paragraphs 222 and 223.
2 Panel Report, US – Wheat Gluten , paragraph 8.54, and Panel Report, Argentina – Poultry
Anti-Dumping Duties, paragraph 7.341.
3 Final Technical Report, pages 49-52. Exhibit RDO-10.
4 Panel Report, EC – Salmon (Norway), paragraph 7.115, footnote 289.

omission of such an exclusion possibility in Article 4.1(c) of the AS, unlike the
Anti-Dumping Agreement, should not be seen in a dispositive sense. This is reaffirmed by
Article 4.2(a) and (b) of the AS, which require an evaluation of injury and causal link based on
reliable data that cannot be obtained from the aggr egate data for enterprises which both produce and
import the product under consideration.
2.2 The Dominican Republic correctly evaluate d the increase in imports and made reasoned
determinations in this respect

21. Contrary to what is asserted by the compla inants, the Dominican Republic made a reasoned
and adequate determination of the increase in imports based on data for the investigation
period (2006-2009). The decrease in imports in 20 09 did not prevent a finding of an increase in
imports because it was incidental and cyclical, as stated by the Commission, in accordance with
Article 2.1 of the AS.
22. The Commission encountered further support for this position in the data for 2010, but did not
base itself on these, contrary to what is claimed by the complainants; this position had already been
reached at the preliminary stage when the data for 2010 were not yet available. This quest for further
confirmation of the findings using the most recent data is supported by WTO case law.
5
23. The aforementioned findings sufficed for complianc e with Article 2.1 of the AS, contrary to
what is claimed by the complainants , not having been substantiated by ex post explanations (the
2010 data, according to the complainants); on the one hand, the reference to the 2010 data was
included in the final determination ( ex ante ) and, on the other, these data were not used for
substantiation purposes but for confirmation.
2.3 The determination of serious injury is consistent with the Dominican Republic's
obligations under Article XIX of the GATT and the Agreement on Safeguards

24. Firstly, the complainants' assertion that the Co mmission based itself solely on the "bags"
segment when evaluating the indicators of injury is not substantiated; the evaluation was made in
respect of the like domestic product as a whole. 6 Moreover, the Commission was neither obliged to
make separate evaluations for each segment of the industry 7, nor to include only identical or similar
products in the definition of the product under investigation.8
25. Secondly, the Dominican Republic was entitled to base its determination of serious injury on
the data concerning the "bags division" in its en tirety, which it did because it was the smallest group
of products for which there was audited informatio n, and includes the domestic like product. This
method is consistent with Article 4.2(a) of the AS, which requires that the factors evaluated be
objective and quantifiable, and is envisaged in Article 3.6 of the Anti-Dumping Agreement.

5 Panel Report, Argentina – Footwear (EC) , paragraph 8.160, confirmed by the Appellate Body,
Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paragraph 7.64.
6 Final Technical Report, page 69. Exhibit RDO-10.
7 Appellate Body Report, US – Hot-Rolled Steel , paragraphs 190 and 204; first written submission of
the Dominican Republic, paragraphs 350 to 354.
8 Panel Report, US – Softwood Lumber V , paragraph 7.157; see also Panel Report, EC – Salmon
(Norway), paragraphs 7.45 and 7.68.

26. Contrary to what is asserted by the complainants, not only is there no obligation to restrict the
evaluation solely to the product intended for the dom estic market, excluding the exported product, but
such an exclusion is not even permitted.
9
27. Thirdly, and finally, the depreciation costs were correctly included in the production cost used
to evaluate profitability. Although the comp lainants assert that costs should be ascribed pro rata, in
accounting (and according to WTO case law 10) the costs used to evaluate profitability are all those
associated with the production and sale of the product in question, not only tho se of direct benefit.
The "bags division's" audited profit and loss stat ements, on which the Commission based itself when
evaluating profitability11, show that the depreciation costs were correctly ascribed.
2.4 The "parallelism" theory does not appl y when imports from developing country
Members are excluded, in accordance with Article 9.1 of the Agreement on Safeguards

28. The scope of the "parallelism" theory is limite d to the context of customs unions and does not
apply in general, as has been attested by WTO case law.
12 Unlike what occurred in previous disputes,
the exclusion of imports from application of the safe guard measure is based on Article 9.1 of the AS,
an explicit exemption from the scope of application of a safeguard measure (Article 2.2 of the AS)
but not from the scope of the safeguards investigation (Article 2.1 of the AS). Accordingly, the
reference to the "product … imported" in Article 2.2 of the AS includes all imports, except those
covered by Article 9.1, whereas the "product … impo rted" in Article 2.1 of the AS does not include
exemptions; when the exemption in Article 9.1 of the AS is applied, the requirements concerning the
investigation (and all the evaluations and determinations it involves) must be fulfilled for all imports,
irrespective of whether or not some of them ar e subsequently excluded from application of the
measure in accordance with Article 9.1 of the AS.
29. This position does not lead to unjus tified results, prevented by the de minimis thresholds
imposed by Article 9.1 of the AS, which require that the impact of the imports exempted may not be
significant or distort the determinations of the increase in imports and serious injury.
30. Concerning the non-attribution requirement, whic h requires that the correct attribution of
injury take into account the effects of the in crease in imports and not "other factors", the
Dominican Republic points out that imports from deve loping countries are not factors "other than the
imports", on the basis of Article 2.1 of the AS, notwithstanding their subsequent exemption from
application of the measure.
3. CONCLUSION
31. Based on the foregoing, the Dominican Republic re quests the Panel to find that the measures
at issue are not covered by the scope of Article XIX of the GATT and the Agreement on Safeguards
or, alternatively, that they are consistent with these provisions, and to reject all the claims made by the
complainants.

ANNEX F

ORAL STATEMENTS OF THE PARTIES AT THE SECOND SUBSTANTIVE
MEETING OR EXECUTIVE SUMMARIES THEREOF

Contents Page
F-1 Executive summary of the opening oral statement of the
Dominican Republic
F-2
F-2 Executive summary of the opening oral statement of the
complainants
F-9
F-3 Closing oral statement of the Dominican Republic F-19
F-4 Closing oral statement of the complainants F-21

ANNEX F-1

EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF
THE DOMINICAN REPUBLIC

I. PRELIMINARY OBJECTIONS TO THE CLAIMS RELATING TO THE NEED FOR
THE MEASURES, ARTICLE I.1 OF THE GATT AND ARTICLE II.1 OF THE GATT
1. The Dominican Republic notes that among the clai ms not covered by the Panel's terms of
reference because they were not the subject of cons ultations are those containe d in subparagraphs (i),
(l) and (m) of the request for the establishment of a panel.
2. With regard to these claims, the complainants contend that the Dominican Republic did not
prove that its right of defence was affected.
1 The Dominican Republic points out that the effect on
this right is a criterion followed when it is consid ered that a request for the establishment of a panel
may be insufficient, in the light of Articl e 6.2 of the Dispute Settlement Understanding 2, and that it
did not claim that the request for the establishment of a panel was insufficient but rather that
no consultations on these claims were held pur suant to Article 4 of the Dispute Settlement
Understanding. The failure to hold consultations excludes these claims from the Panel's terms of
reference, irrespective of whether or not the Dominican Republic's right of defence is affected.3
3. Secondly, the complainants assert that the cr iterion of a change in the essence would not
apply to this dispute as it has been used fo r objections to the inclusion of additional measures in the
request for the establishment of a panel, but not for objections to the inclusion of additional legal
bases.4 Their arguments, however, disregard Appellate Body case law in Mexico – Anti-Dumping
Measures on Rice5 and the Panel in China – Publications and Audiovisual Products.6
4. Thirdly, the claimants contend that, even if the test of a change in the essence did apply, it
was not used because the claims concerning Articles I.1, II.1(a) and II.1(b) of the GATT and
Article 5.2 of the Agreement on Safeguards reasona bly arose from the legal bases of the request for
the holding of consultations.
5. As to the claim concerning the most-favoured-n ation obligation based on Article I.1 of the
GATT, the complainants contend that it arises from their claim concerning Article 2.2 of the
Agreement on Safeguards, as set out in the claim in subparagraph (g) of the request for consultations.
7
This claim was, however, included solely in case th e measures at issue did not constitute safeguard
measures according to the terms of Article XIX of the GATT. 8 In fact, the aforementioned

1 Second written submission of the complainants, paragraphs 47-50, 64 and 68.
2 Ibid., see footnotes 32 and 33.
3 First written submission of the Dominican Republic, paragraphs 51-58.
4 Second written submission of the complainants, paragraph 52.
5 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , paragraphs 137 and 138. The
Panel Report on EC – Fasteners (China) , paragraphs 7.507 and 7.508, applied this criterion of a change in the
essence when considering that Article 6.9 of the Anti-Dumping Agreement was not included in the Panel's terms
of reference as it had not been the subject of consultations.
6 Panel Report, China – Publications and Audiovisual Products, paragraph 7.115.
7 Replies of the complainants to the questions from the Panel, paragraph 158.
8 Oral statement of Costa Rica, El Salvador, Guatem ala and Honduras at the first substantive meeting
of the Panel, paragraph 37.

subparagraph (g) in no way relates to the claim conc erning Article I.1 of the GATT in the request for
the establishment of a panel but only refers to the non-exemption of certain developing countries
pursuant to Article 9.1 of the Agreement on Safeguards.
6. The complainants also argue that the claim relating to Article II.1(a) and II.1(b) of the GATT
is based on Article XIX of the GATT because the increase in imports must be a result of the effect of
the tariff concessions subject to Article II of the GATT.
9 They do not, however, specifically indicate
to which claim in the request for consultations they are referring. 10 Moreover, the complainants have
not indicated how this legal basis could arise fro m Article XIX as the specific legal basis for any
claim contained in the request for consultations.
7. It is obvious that the claim concerning the a lleged omission of findings and conclusions on
the need for measures was not the subject of cons ultations pursuant to Article 4.4 of the Dispute
Settlement Understanding and does not stem from any legal basis contained in the request for
consultations. Although Article 5.1 of the Ag reement on Safeguards is indeed cited in
subparagraph (g) of the request for consultations, the claim only refers to the alleged failure to comply
with the "parallelism" requirement.
8. The complainants indicate that the claims concerning Articles I and II of the GATT are based
on the reservation clause in the request for consultations. 11 Nevertheless, the fact that the measures at
issue do not constitute safeguard measures under Article XIX of the GATT is not information
obtained during the consultations, as required by WTO case law 12 and the reservation clause
mentioned by the complainants because the latter were already well aware of the nature of the
measures in question before the consultations.13
9. In the light of the foregoing, the Dominican Republic argues that the claims included in
subparagraphs (i), (l) and (m) of the request for the establishment of a panel are not included within
the Panel's terms of reference.
II. ADDITIONAL REASONS WHY A SAFEGUARD MEASURE MAY NOT CONSIST
OF THE SUSPENSION OF ARTICLE I.1 OF THE GATT
10. In the complainants' view, a safeguard measure could imply the suspension of Article I.1 of
the GATT.14 This statement is not supported by Article 2.2 of the Agreement on Safeguards or any
other provision.
11. In addition to the reasons already explained 15, it is relevant to quote the interpretative note to
Article 40 of the Havana Charter concerning Emer gency Action on Imports of Particular Products,
which provides the following: " It is understood that any suspension, withdrawal or modification

9 Ibid., paragraph 159.
10 Ibid., footnote 89.
11 Second written submission of the complainants, paragraph 58.
12 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , paragraphs 137 and 138;
Panel Report, China – Publications and Audiovisual Products, paragraph 7.115.
13 Oral statement of the Dominican Republic at the first substantive meeting of the Panel, 15 June 2011,
paragraph 17; closing statement of the Dominican Republic at the first substantive meeting of the Panel,
16 June 2011, paragraph 16; replies of the Dominican Republic to questions from the Panel, question 51.
14 Reply of the complainants to the questions from the Panel, paragraph 77.
15 Second written submission of the Dominican Republic, paragraphs 8-14.

under paragraphs 1 (a), 1(b) and 3(b) must not discriminate against imports from any
Member country … ".
16
12. The foregoing logic has applied to Article XIX of the GATT since the very first days it came
into force. When addressing Japan's request for accession, the Ad Hoc Committee on Agenda and
Intersessional Business rejected the possible extensi on of this Article to constitute suspension of
Article I.1.17
13. This was also supported by John H. Jackson already in 1969: " Although nowhere expressly
mentioned in the language, the preparatory work and subsequent GATT practice make it clear that
the withdrawal or suspension shall be on a non-discriminatory MFN basis."18
14. Consequently, Article XIX of the GATT never envisaged the possibility of suspension of
Article I.1 of the GATT.
III. THE ALLEGED NATURE OF "OTHER IMPORT DUTIES AND CHARGES" IN
THE MEASURES AT ISSUE
15. The complainants use four arguments to claim th at the measures at issue are inconsistent with
Article II.1(a) and II.1(b) of the GATT as they co nstitute "other duties and charges" within the
meaning of Article II.1(b), second sentence, of the GATT and the Dominican Republic had not
included them in the relevant column in its Schedule of Tariff Concessions.
16. First of all, the complainants contend that, as they constitute a tax other than ordinary customs
duty, the measures in question are "other duties an d charges". This premise does not, however, mean
that these are "other duties or charg es". Quite the contrary, it indicates that the increased tariff is an
ordinary customs duty because it replaces the tariff no rmally applicable: the only duty paid currently
on imports of polypropylene bags and tubular fabr ic is the 28 per cent duty, in other words, the
MFN tariff increased on the basis of the measures at issue.
17. Secondly, the complainants state that the fact that the duty imposed on the basis of the
measures at issue applies as an alternative shows th at the measures resulted in the application of other
duties or charges. On the contrary, as underlined by the European Union in its written submission, the
fact that the measures apply in place of and not cumulatively with the MFN tariff normally applicable
is proof that these are not "other duties and charges".19
18. Thirdly, the complainants cite the Tariff Re form Law No.146-00, which provides that tariffs
can only be amended by means of a legislative act, and from this infer that, as the measures at issue
were established through an administrative act, they are "other duties and charges". The complainants
disregard Article 73 of Law No.1-02, which allows temporary increases in the tariff established by the
law through application of a safeguard measure.
20

16 United Nations Conference on Trade and Employment, held in Havana, Cuba, Final Act and related
documents, page 113. http://www.wto.org/english/docs_e/legal_e/havana_e.pdf.
17 Ad Hoc Committee on Agenda and Intersessional Business, Report on the Accession of Japan,
13 February 1953, L/76, Exhibit RDO-27, paragraphs 6 and 7.
18 John H. Jackson, World Trade and the Law of GATT , The Michie Company Law Publishers,
Charlottesville, Virginia, 1969, page 564. Exhibit RDO-28.
19 Third party submission by the European Union, 16 May 2011, paragraph 16.
20 Exhibit RDO-11.

19. Lastly, the complainants cite some communi cations from which they infer that these are
"other duties and charges".
21 These communications do not, howeve r, lead to the conclusion that
these are "other duties and charges", and the complainants have not indicated how they reached such a
conclusion.
20. It would appear that the complainants ar e equating the safeguard measures with trade
remedies (anti-dumping and counter vailing measures). In fact, such a comparison is wrong because
safeguard measures suspend obligations and do not lead to the imposition of other additional duties -
as is the case for anti-dumping duties or counterv ailing measures. This emerges clearly from a
comparison of Articles VI.2 and XIX.1(a) of the GA TT. It is also the reason why safeguards are not
listed in Article II.2(b) of the GATT together with anti-dumping and countervailing duties.
IV. CLAIMS RELATING TO THE DEFINITION OF THE DOMESTIC INDUSTRY
21. First of all, the complainants question the expl anation of the definition of the product subject
to investigation. They do not, however, make any claim regarding the determ ination of the imported
product subject to investigation 22; that is to say, the determination would be valid but not its
explanation. The Dominican Republic would also lik e to clarify that neither in case law nor in the
Agreement on Safeguards are there any groun ds supporting the complainants' statement 23 that the
Panel should only base itself on the published reports on the case.24
22. The Dominican Republic argues that the explanations given by the Commission on
determination of the product subject to investiga tion are sufficient and comply with Articles 3.1 and
4.2(c) of the Agreement on Safeguards, that there ar e no legal grounds for re quiring an "adequate and
reasoned explanation of the reasons for the tariff classification" 25, and that the complainants have not
explained how such an obligation arises from the aforementioned Articles. Likewise, it is not clear
why Articles 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards would require that the
proposal by the participating parties not to deal with tubular fabric and polypropylene bags as a
single product would have to be addressed.
23. The complainants quote the Appellate Body report in EC – Civil Aircraft to claim that the
Panel was obliged to review the definition of the pro duct subject to investigation. This finding is not
relevant, however, as the Appellate Body differe ntiated between definitions under Part III of the
Agreement on Subsidies and Countervailing Measures and the definition of the product investigated
in accordance with Part V of the same Agreement and the Anti-Dumping Agreement. In other words,
the case law does not relate to the definition of a product subject to investigation in a national
safeguards procedure.
26
24. Secondly, the complainants allege that determ ination of the likeness relationship between the
domestic product and the imported pr oduct subject to investigation was composed of an implicit
assertion of such a relationship. The Dominican Republic draws attention to paragraphs 163 to 181 of
its first written submission and to the Commission's Preliminary Technical Report, page 58, where the

21 Second written submission of the complainants, paragraphs 303 and 304.
22 Ibid., paragraphs 85 and 106.
23 Replies of the complainants to questions from the Panel, paragraph 18.
24 See the Panel Reports in US – Wheat Gluten, paragraphs 8.19 and 8.21; and Argentina – Preserved
Peaches, paragraph 7.6.
25 Ibid., paragraph 85.
26 Appellate Body Report, EC and certain member States – Large Civil Aircraft, paragraph 1133.

determination of the like domestic product is reached, inter alia, on the basis of physical and chemical
characteristics, tariff headings, and the production process.
25. It should be pointed out that the fact that th e domestic product was defined as tubular fabric
and polypropylene bags manufactured from resin onl y indicates a physical characteristic that also
applies to the product subject to investigation. Although the production process plays an important
role in the definition of the domestic industry, it was not preponderant when determining the like
domestic product, where it was one of several criteri a examined. The fact that the Commission, when
defining the domestic industry, based itself on a series of producers that included Textiles Titán S.A.,
Filamentos del Caribe S.A., Agro-arro cera S.A. and Fibras Dominicanas CxA.
27, shows that the
definition of the like domestic product includes bags obtained from tubular fabric.
26. Given the identical scope of the definitions of th e product subject to investigation and the like
domestic product (tubular fabric a nd polypropylene bags), the Dominican Republic considers that the
fact that they are like products, and so are directly competitive, is obvious.
27. Thirdly, the complainants contend that the Commission failed to follow a logical order of
analysis when determining the domestic industry, disregarding Appellate Body case law by claiming
that the Agreement on Safeguards does not require any particular order when examining reports.
28
What the Appellate Body stated 29, however, only clarified the logical path to be followed when
examining an issue before one, without seeking to stipulate that there is a mandatory order for
analysis by national investigating authorities. Furthermore, there is a logical order in the
Commission's analysis when defining the product subject to investigation, the like product and the
domestic industry.
30
28. The complainants also question the fact that the Commission considered tubular fabric and
polypropylene bags to be part of the same do mestic industry without proving that they were
effectively competitors 31, basing themselves on the aforementioned Appellate Body Report.
Nevertheless, in this Report the Appellate Body did not contend th at it had to be proven that the
products composing the domestic industry are like products.32
29. Fourthly, the complainants claim that certa in categories of producers of the directly
competitive domestic product were a priori excluded, based on an erroneous interpretation of the word
"producers" in Article 4.1(c) of the Agreement on Safeguards. 33 The Dominican Republic recalls that
Agroarrocera and Fibras Dominicanas did not ta ke part in the procedure, that FIDECA did not
produce the like domestic product (given that it only transformed imported or locally purchased
tubular fabric bags)34 and that Textiles Titán mostly transformed imported tubular fabric. It should be
pointed out that Textiles Titán was excluded from the definition of the domestic industry using the
provision in Article 26 of Law No. 1-02.

27 Preliminary Technical Report, page 68. Exhibit RDO-9.
28 Second written submission of the complainants, paragraph 159.
29 Appellate Body Report, US – Lamb, paragraph 87. See also the reply by the Dominican Republic to
question 102 from the Panel.
30 First written submission of the Dominican Republic, paragraph 210.
31 Second written submission of the complainants, paragraph 98.
32 Appellate Body Report, US – Lamb, paragraphs 87 and 88.
33 Second written submission of the complainants, paragraph 85.
34 Final Technical Report, pages 51 and 52. Exhibit RDO-10.

30. The exclusion of Textiles Titán is justified acco rding to the current meaning of the provisions
in Article 4.1(c) of the Agreement on Safeguard s and the context and case law in the WTO, which
confirm that it is consistent with the Agreement on Safeguards to consider as "domestic industry" a
major proportion thereof.
35 Moreover, Article 4.2(a) and (b) provide that investigating authorities
must base themselves on reliable data. Where the main activity of an enterprise included in the
definition of the domestic industry is to import a nd resell the product subject to investigation, the
investigating authority may find it impossible to sep arate the data relating to the products produced
from those imported when evaluating the indicators of injury or making the determination of the
causal link.36
V. CLAIMS RELATING TO THE DETERMINATION OF THE INCREASE IN
IMPORTS
31. The complainants consider that the Dominica n Republic did not prove that there was an
increase in imports, as required by Article XIX.1(a) of the GATT and Articles 2.1 and 4.2(c) of the
Agreement on Safeguards because "if … there were no adequate and reasoned explanations regarding
the definition of the imported product subject to investigation, the analysis of increased imports would
also be invalid, since the investigating authority used in that analysis the same definition of the
imported product subject to investigation". 37 The complainants did not, however, claim that the
determination of the product subject to investigation was inconsistent per se and the
Dominican Republic considers that it constitutes valid grounds for determining the increase in
imports.
32. The statement that the Dominican Republic "fa iled to demonstrate that there were adequate
and reasoned explanations for an increase in imports in absolute terms that w as recent, sudden, sharp,
and significant"38 is also wrong inasmuch as the Commission:
- Determined that, despite a 14.6 per cent decrease in 2009, overall during the
investigation period imports increased by 50.06 per cent.39
- Indicated that the decline in imports in 2009 was explained by the reduced growth in
the economy, which led to a 30.3 per cent decrease in imports in comparison with
2008.
40
- Without extending the investigation period, confirmed the temporary nature of the
decline in 2009 in the light of the figures for 2010 in the final report, showing that

35 Panel Report, US – Wheat Gluten, paragraphs 8.54-8.56.
36 See the reply by the Dominican Republic to question 91 from the Panel.
37 Second written submission of the complainants, paragraph 203.
38 Ibid., paragraph 210.
39 Preliminary Technical Report, page 74, Exhibit RDO-9; Final Technical Report, page 58,
Exhibit RDO-10.
40 Preliminary Technical Report, page 80; Final Technical Report, page 68. Also: Central Bank of the
Dominican Republic, Resultados Preliminares de la Economía Dominicana , January-September 2009, page 12.
Exhibit RDO-12.

imports were increasing once again. It should be noted that the use of data not
included in the investigation period has been confirmed by case law.
41
33. The complainants' statement that the Dominican Republic failed to make findings regarding
the rate of imports is also wrong as the percenta ge ratio of growth for each year and for the
investigation period can be found in the Preliminary and Final Technical Reports.42

41 Panel Report, Argentina – Footwear (EC) , paragraph 8.160; Appellate Body Report,
Mexico – Anti-Dumping Measures on Rice , paragraph 167. Also: second written submission of the
Dominican Republic, paragraph 88 to 90.
42 Preliminary Technical Report, page 74 and Final Technical Report, page 58.

ANNEX F-2

EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT
OF THE COMPLAINANTS

I. INTRODUCTION
1. The central tenet of the Dominican Republic's defence is its claim that the provisional and
definitive measures are not safeguard measures inasmu ch as the 40 per cent tariff was not raised. To
us, the reasons why the Dominican Republic ad opted these measures and is today following a
complex line of argument are quite obvious: the Do minican Republic sought to protect a particular
company by means of measures intended to give th e appearance of being consistent with (i) its
regional free trade agreements (FTAs); and (ii) the WTO disciplines.
2. The only option was to apply a WTO safeguard measure, which is permitted both by the
WTO disciplines and the regional agreements.
3. The problem arose when the Dominican Republic decided to state in this dispute that the
measures are not safeguard measures but a straight forward tariff increase within the limits bound in
the WTO. By closing the door to our complaints under the AS, the Dominican Republic opened up
another door with equally serious legal implications. Basically, the statement that the measures
contested are not safeguards immediately involves violation of Articles I and II of the GATT.
Likewise, if the measures are considered not to be safeguards consistent with the WTO, the
Dominican Republic would have to explain on wh at regional legal basis it applies an alleged
38 per cent tariff ad valorem on imports that should be subject to zero tariff under the regional
agreements. We are explaining this as background and as evidence of the existence of safeguard
measures in the WTO context. As we have explaine d, this procedure concerns neither violations of
FTAs nor safeguards of a regional nature.
II. THE APPLICABILITY OF THE AS AND ARTICLE XIX
4. We do not think that the opinions expressed by the Dominican Republic solely for the
purposes of this procedure are supported by the various objective elements indicating that the
provisional and definitive measures are safeguard measures such as those provided by Article XIX
and the AS: (a) these opinions of the Dominican Republic disregard the design, structure and
architecture of the measures
1; (b) they are not consistent either with the prior actions of the
Dominican Republic; and (c) the Dominican Republic is trying to sidestep the fact that, even
according to its restrictive interpretation based on an individualistic reading of Article XIX.1(a), the
provisional and definitive measures imply the suspensi on of obligations under Articles I.1, II.1(a) and
II.1(b).
A. SUSPENSION OF ARTICLE I.1 OF THE GATT
5. The Dominican Republic firstly indicates that the suspension itself which constitutes the
safeguard measure, and is referred to in Article XIX.1(a) of the GATT, cannot refer to Article I.1 of
the GATT. 2 The Dominican Republic does not, however, explain why, if this is the case,

1 Second written submission of the complainants, paragraphs 14-22.
2 Second written submission of the Dominican Republic, paragraph 9.

Article XIX.1(a) itself uses the generic term "obligations" and "o bligation" and does not explicitly
exclude Article I.1 of the GATT from its applica tion. The Dominican Republic's reference to
Articles 2.2 and 9.1 of the AS in connection with th is discussion is not very clear and does not enable
it to be determined what it is claiming.
3 The word "obligation" in Article XIX.1(a) is not qualified by
the words unless otherwise provided in Article I.1 of the GATT , as the Dominican Republic suggests.
To paraphrase the Appellate Body, this interpreta tion would imply "read[ing] into the text words
which are simply not there", which has been prohibited by the Appellate Body. 4 L i k e t h e
complainants, the European Union 5 and the United States 6 consider that the word "obligation" in
Article XIX.1(a) includes the obligation in Article I.1 of the GATT.
6. Secondly, the Dominican Republic's argument is based on semantics when it indicates that the
discussion on the possibility of applying a selective safeguard has been concluded. 7 The application
of a safeguard measure that excludes imports from particular trading partners is a selective way of
applying safeguard measures - the measure is app lied to certain origins and not to others.
Nevertheless, Members have not been prohibite d from making such exemptions, and even the
Appellate Body itself has recognized that the po ssibility of excluding specific imports from the
application of a safeguard measure is open so there is no need to issue a ruling.8
7. Thirdly, the Dominican Republic argues that the words "obligations" and "obligation" in the
first and second part of Article XIX.1(a) refer to th e same thing and therefore "this term cannot refer
to the most-favoured-nation principle in Article I.1 of the GATT, and cannot be the cause of an
increase in imports". 9 The Dominican Republic does not, however, explain why the increase in
MFN trade could not involve an increase in imports within the meaning of Article XIX.1(a) of the
GATT and Article 2.1 of the AS.
8. Fourthly, the Dominican Republic states that Ar ticle 9.1 implies an obligatory exclusion of
imports only after a measure has been qualified a saf eguard measure. Consequently, in its opinion, a
safeguard measure consisting of the suspension of obligations under Article I.1 of the GATT could
not exist. It is clear that the obligation to exempt imports from developing countries pursuant to
Article 9.1 of the AS does not imply that the word "obligation" in Article XIX of the GATT has to be
read in the narrow sense, excluding Article I.1 of the GATT. It appears rather that the
Dominican Republic is contradicting its argument that the measures in question are not safeguard
measures.
9. Fifthly, the Dominican Republic indicates that suspension of Article I.1, together with
application of Article 2.2 and the exemption mandate in Article 9.1, would imply that the only content
of a safeguard measure would be the exem ption of certain countries from its scope. 10 The obligation
in Article 2.2 implies that there can be no discrim ination when applying a safeguard measure with
regard to all the imports subject to investigati on. This provision does not, however, mention the
possibility that a safeguard measure allows the exemption of certain imports. The Appellate Body has
also deliberately been silent in this regard. Consequently, the Dominican Republic's argument that

3 Idem.
4 Appellate Body Report, India – Quantitative Restrictions, paragraph 94.
5 Reply by the EU to question 2 from the Panel, paragraphs 9 and 10.
6 Reply to the United States to question 2 from the Panel, paragraphs 7 to 9.
7 Second written submission of the Dominican Republic, paragraph 10.
8 Appellate Body Report, Argentina – Footwear (EC), paragraph 114.
9 Second written submission of the Dominican Republic, paragraph 11.
10 Ibid., paragraph 12.

Article 2.2 would cease to apply to any safeguard that implies suspension of Article I.1 lacks
substance.
B. S
USPENSION OF ARTICLE II.1(a) AND II.1(b), SECOND SENTENCE, OF THE GATT
10. The Dominican Republic now indicates that the provisional and definitive measures replace
the pre-existing ordinary MFN tariff; in other wo rds, they replace what in Spanish is called the
"derecho de aduana propiamente dicho " (in English, the "ordinary customs duty") and the
complainants wrongly consider that this is rather a "second tariff". 11 The Dominican Republic has
explained that these measures are not the same and do not have the same characteristics as the
ordinary MFN tariff or ordinary customs duty.
C. THE APPLICABILITY OF THE AS AND ARTICLE XIX TO THE INVESTIGATION AND
PRELIMINARY AND DEFINITIVE DETERMINATIONS
11. The Dominican Republic affirms that a safeguards investigation can only be subject to certain
requirements if it actually leads to the adoption of a safeguard measure. 12 The Dominican Republic
disregards the Appellate Body's statement to th e effect that there are two main factors when
interpreting the AS: (i) the determination of the ri ght to apply a safeguard measure, and (ii) the way
in which the safeguard measure is applied. 13 Failure to impose a safeguard measure does not
invalidate the determination a Member may make re garding the right to impose a safeguard measure,
which may be exercised at any time.
12. The Dominican Republic contends that it fails to understand how reaching findings regarding
the claims related to the investigation that did not lead to the adoption of measures would help in
reaching a positive settlement of this dispute.14 This is a new request by the Dominican Republic, that
the Panel should abstain from reaching findings on th is matter. We do not consider that such a
request is admissible.
13. As found by the Appellate Body in US – Corrosion-Resistant Steel Sunset Review , "… any
act or omission attributable to a WTO Member can be a measure of that Member for purposes of
dispute settlement proceedings".
15 Accordingly, if the measures in question include the investigation
and the specific determinations cited in this Panel's terms of reference, and there are specific claims
about the way in which the investigation was conduc ted and these determinations were reached, there
is then no reason why the Panel should abstain from reaching the relevant findings.
III. THE PRELIMINARY OBJECTIONS OF THE DOMINICAN REPUBLIC
14. The complainants responded in full to the pre liminary objections at the first substantive
meeting16 and once again in their replies to the questions from the Panel.17
15. With regard to the objections against the claims relating to Articles I.1, II.1(a) and II.1(b) of
the GATT, it is pertinent to repeat that these are not new claims, as argued by the

11 Idem.
12 Ibid., paragraph 27.
13 Appellate Body Report, US – Line Pipe, paragraph 84.
14 Second written submission of the Dominican Republic, paragraph 44.
15 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, paragraph 81.
16 Opening oral statement by the complainants at the first substantive meeting, paragraphs 29-45.
17 Replies by the complainants to questions 82, 85 and 86.

Dominican Republic.
18 The complainants included in the requ est for consultations a reservation that
clearly allowed subsequent inclusion in the request for the establishment of a panel of claims relating
to the GATT 1994, as was in fact done. Based on this reservation and on the discussions during the
consultations, the complainants reformulated their arguments and included in the request for a panel
alternative claims in conformity with the GATT 1994 relating to the most-favoured-nation principle
and import charges other than customs duty. As confirmed by Panama, the issues relating to
Articles I.1, II.1(a) and II.1(b) of the GATT were indeed discussed during the consultations.
16. The Dominican Republic has failed to prove how the alleged procedural defects have affected
its right of defence. 19 The complainants have also rebu tted the Dominican Republic's statement
regarding the supposed change in the essence of the claims caused by the alleged inconsistency
between the request for consultations and the request for the establishment of a panel.20
IV. THE DEFINITION OF THE DOMESTIC INDUSTRY
17. The Dominican Republic has not so far identified the paragraphs in its resolutions or reports
in which the adequate and reasoned findings and conclusions on the definition of the imported product
subject to investigation are to be found. On the c ontrary, it simply falls back on mere statements that
do not reflect the reasoning or value judgement on the issue.21
18. The Dominican Republic asserts that the production process does not form part of the
definition of the like domestic product, but was a d ecisive criterion when identifying the domestic
industry.22 With this statement, the Dominican Repub lic is recognizing that when it defined the
domestic industry it based itself on criteria other th an the nature of the domestic and imported
products and the nature of like or directly competitive products. Already in US – Lamb , the
Appellate Body considered that this criteri on was not acceptable when defining the domestic
industry.23
19. The Dominican Republic also mentions that Article 4.1(c) of the AS provides for the
possibility of not taking into account all the domestic producers but only a major proportion. 24
Although Article 4.1(c) does allow for this possib ility, what is certain is that in this case the
Dominican Republic decided a priori to exclude cer tain "transformers" which it considered did not
produce a domestic product.25
20. Moreover, the Dominican Republic excluded a producer which was at the same time an
importer, even though Article 4.1(c) does not cover the eventuality of such exemption. 26 As can be
seen, the Dominican Republic seeks to read into Article 4.1(c) rights that do not exist. Unlike the
Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing Measures,
Article 4.1(c) of the AS does not allow for the possi bility of a priori exemption of certain types of
producers if these producers produce the like or directly competitive product. Nevertheless, only once

18 First written submission by the Dominican Republic, paragraph 88.
19 Second written submission of the complainants, paragraphs 47-50.
20 Ibid., paragraphs 51-60.
21 Second written submission of the Dominican Republic, paragraphs 58-60.
22 Ibid., paragraphs 62 and 63.
23 Appellate Body Report, US – Lamb, paragraphs 90 and 94.
24 Second written submission of the Dominican Republic, paragraph 69.
25 Ibid., paragraph 73.
26 Ibid., paragraph 77.

all the producers producing the like or directly competitive product have been taken into consideration
does Article 4.1(c) allow consideration of a major proportion rather than all of them.
21. Lastly, the Dominican Republic argues that the c ontext of Article 4.1(c) of the AS endorses
the possibility of basing oneself solely on a major proportion of the domestic industry inasmuch as the
investigating authority must base itself on relia ble data and collecting information from producers
involved in other activities such as import and resal e would raise problems in separating out the data
concerning economic activities that are not rela ted to the products produced by the producers.
27 The
Dominican Republic's argument is no justification for excluding certain producers from consideration
of the domestic industry. The investigating author ity is obliged to process and separate information
relevant to the purposes of the inv estigation. Using the same argument, it could be argued that any
enterprise engaged in activities parallel to productio n of the like or directly competitive product could
be excluded from the investigating authority's examination. This interpretation cannot be sustained.
V. UNFORESEEN DEVELOPMENTS AND THE EFFECT OF OBLIGATIONS
INCURRED UNDER THE GATT
22. The Dominican Republic mentions that the clause on unforeseen developments in
Article XIX(a) does not constitute a binding obligation. 28 The complainants have extensively rejected
this defence based on Appellate Body case law.29
23. As a second line of defence, the Dominican Republic asserts that, even if the unforeseen
developments clause is binding, its investigating authority complied with it. The Dominican Republic
originally claimed before the Panel that the unf oreseen developments comprised four elements:
(i) China's accession to the WTO; (ii) tariff cuts resulting from free trade agreements; (iii) the 2008
economic and financial crisis; and (iv) the increase in production costs. 30 In its replies to the
questions from the Panel, the Dominican Republic r ecently confirmed that only the first two of these
elements constituted the alleged unforeseen developments.31
24. China's accession to the WTO cannot be cons idered an unforeseen development for the
Dominican Republic. 32 At the time when the WTO Agr eement entered into force for the
Dominican Republic (i.e. on 9 March 1995), the ne gotiations regarding China's accession were
already under way, having begun in 1987.
25. The complainants also explained why the tari ff cuts under free trade agreements are not an
unforeseen development.33 As the purpose of free trade areas is to achieve deeper liberalization than
that within the WTO framework, it is not accepta ble for the Dominican Republic to argue that its
voluntary decision to implement tariff cuts under such agreements is an unforeseen development.

27 Ibid., paragraph 79.
28 First written submission of the Dominican Republic, paragraphs 258-293.
29 Opening oral statement.
30 First written submission of the Dominican Republic, paragraphs 287-289.
31 Reply by the Dominican Republic to question 114 from the Panel.
32 Second written submission of the complainants, paragraphs 176-184.
33 Ibid., paragraphs 185-190.

26. In addition, in the relevant reports and reso lutions there is no mention whatsoever of the
logical connection which, according to the Appellate Body, must exist between the two events and the
alleged increase in imports of polypropylene bags and tubular fabric.
34
27. The complainants also contend that the Domi nican Republic did not identify the relevant
obligations incurred under the GATT and did not explain how those obligations resulted in the alleged
increase in imports, as required by Article XIX.1(a). 35 In response to a question from the Panel, the
Dominican Republic indicated that page 86 of the preliminary report supposedly contained
identification of the corresponding tariff concessions. 36 We reiterate that nowhere in this paragraph
does the investigating authority e xplicitly indicate that the alleged increase in imports was the result
of obligations incurred under the GATT.37
VI. THE ALLEGED INCREASE IN IMPORTS
28. The investigating authority established that th ere was a "marked decline" in the trend in
imports38, but did not explain sufficiently and adequately why, despite a decline of such magnitude up
to the end of the investigation period, here was an increase in imports in the form described by the
Appellate Body.
29. The Dominican Republic claims that its conclusion regarding increased imports is valid
because its technical reports clarify that the dec line in imports was caused by the decrease in the
country's total imports during 2009. 39 Subsequently, the Dominican Republic indicated that this
decrease in imports was "incidental and temporary".40
30. As we have previously stated, the investiga ting authority's explanation is insufficient and
invalid because the overall decline in the Domi nican Republic's imports is a macroeconomic
occurrence that affected imports in the whole of the tariff universe for goods.41
VII. THE ALLEGED SERIOUS INJURY
31. When defining a like or directly competitiv e product as one product, the investigating
authority had to assume all the con sequences of such a definition, fo r example, the need to make a
separate analysis for each relevant segment. Th e Dominican Republic cannot take advantage of a
broad definition of the domestic industry and at th e same time absolve itsel f of the responsibilities
inherent in opting for this definition.
32. As to the inclusion of information on products that are not those investigated, the
Dominican Republic subsequently explains that these products account for around 15 per cent of
domestic production. 42 It presents no further substantiati on than its mere affirmation. The

34 Ibid., paragraphs 180-184 and 189. See also the Appellate Body Report, Argentina – Footwear
(EC), paragraph 92; Appellate Body Report, Korea – Dairy, paragraph 85.
35 First written submission of the complainants, paragraphs 227-234; opening oral statement by the
complainants at the first substantive meeting, paragraph 58.
36 Reply by the Dominican Republic to question 115 from the Panel.
37 Second written submission of the complainants, paragraphs 192-194.
38 Preliminary report, page 68; final report, page 61.
39 First written submission of the Dominican Republic, paragraphs 313-324.
40 Ibid., paragraph 320.
41 Reply by the complainants to question 118 from the Panel.
42 Second written submission of the Dominican Republic, paragraph 99.

Dominican Republic's ex post explanation does not indicate whether the figure of 15 per cent of total
output refers to the volume or total value of production.
33. Regarding the inclusion of information on expor t activities, it is meaningless to take into
account this type of information for the purpos es of the investigation. The purpose of the
investigation is to examine the situation of th e domestic industry producing the like product or the
product directly competing with the imported product, in accordance with Article 4.1(c) of the AS.
Obviously, the product intended for export does not compete with the imported product that is the
subject of investigation.
34. Concerning depreciation and amortization costs, the Dominican Republic's explanation is
ex post. The explanation now put forward cannot be found in any part of the technical reports or the
resolutions. Furthermore, the Dominican Repub lic now acknowledges that the production of other
products in the bags division accounts for around 15 per cent of domestic production, and that the
bags division produces for export. On this basis, it is then necessary to make a pro rata calculation at
least in proportion to this level of production for th e product that is not a like or directly competitive
product or is not sold on the Dominican market. As this explanation and pro rata calculation do not
appear in the investigating authority's technical reports and resolutions, this confirms that the
evaluation of losses and gains and cash flows based on the financial statements of the bags division
was not a precise, sufficient and appropriate evaluation.
VIII. THE ALLEGED CAUSAL LINK
35. On previous occasions, the complainants fu lly responded to the Dominican Republic's
arguments regarding the shortcomings in the dete rmination of the causal link and the lack of a
non-attribution examination.43 We should like to point out that the Dominican Republic has presented
no arguments in defence other than those to be found in its first written submission.
36. Consequently, for the purposes of this statem ent, the complainants reaffirm the claims
mentioned and emphasize that the prima facie case already proven has not been effectively rebutted
by the Dominican Republic.
IX. THE LACK OF PARALLELISM
37. The complainants reiterate their position th at the parallelism obligation is mandatory
irrespective of whether the imports excluded are impo rted from a free trade area or customs union, or
are imports from developing countries under Article 9.1 of the AS.44
38. As the imports from Mexico, Panama, Colombia and Indonesia were exempt from application
of the safeguard, logically, they should then ha ve been exempt from the investigation. The
Dominican Republic, however, did not do this and now argues that this basic concept of symmetry
allows exceptions. The complainants reject this interpretation.
39. Precedents in the Panel and the Appellate Body Reports in US – Wheat Gluten do not support
the Dominican Republic's position. First of all, th e Appellate Body clarified that the United States

43 Opening oral statement of the complainants at the first substantive meeting, paragraphs 99-115.
44 Ibid., paragraph 118; second written submission of the complainants, paragraph 239.

was the one arguing that Article 9.1 is an exception to the parallelism rule.
45 Nevertheless, the
Appellate Body never stated that it shared th e United States' interpretation. Secondly, the
Appellate Body then stated that Article 9.1 "is an exception to the general rules set out in the
Agreement on Safeguards that applies only to developing country Members". 46 This statement does
not mean that imports from developing countries s hould be exempt from application of the measure
but not the underlying investigation. In mentioning that the exception to Article 9.1 concerns the
general rules in the AS, the Appellate Body referred to the exceptional circumstance of excluding
certain imports from the scope of the measure, hence without prejudice to also excluding these
imports from the investigation. In fact, it is precisely the exceptional circumstances such as
application of Article 9.1 or the exemption for im ports from a free trade area or customs union which
give rise to the parallelism obligation.
X. LACK OF NOTIFICATION, CONSULTATIONS AND MEANS OF TRADE
COMPENSATION
40. In this connection, the Dominican Republic states that the hearings held during the safeguards
investigation conducted by its inves tigating authority constitute the pr ior consultations referred to in
Article 12.3 of the AS. 47 The Dominican Republic claims that "the consultations referred to in
Article 12.3 of the Agreement on Safeguards were held on 12 May on the occasion of the public
hearing" in the safeguards investigation.48
41. We reiterate that the hearings in the safeguard s investigation conducted by the investigating
authority cannot be cannot be treated as equivalent to consultations at the multilateral level as
prescribed by Article 12.3 of the AS.49
42. In essence, the Dominican Republic argues that, by fulfilling Article 3.1 of the AS, there is
automatically compliance with Article 12.3 of the AS. This goes against the principle of effectiveness
in the interpretation of treaties as the Dominican Republic's interpretation would make Article 12.3
redundant.50
XI. VIOLATION OF ARTICLES I.1 AND II.1(A) AND II.1(B) OF THE GATT
43. If this Panel accepts that these measures are not safeguard measures within the meaning of
Article XIX and the AS, the provisional and defin itive measures are inconsistent with Articles I.1,
II.1(a) and II.1(b) of the GATT.
A. VIOLATION OF ARTICLE I.1 OF THE GATT: THE MOST-FAVOURED-NATION PRINCIPLE
44. According to Article I.1 of the GATT, any adva ntage, favour, privilege or immunity granted
to products of a particular country must be accorded immediately and unconditionally to the like

45 Appellate Body Report, US – Wheat Gluten, footnote 96, first sentence ("The United States relies on
Article 9.1 of the Agreement on Safeguards in support of its argument that the scope of the serious injury
investigation need not correspond exactly to the scope of application of a safeguard measure.").
46 Ibid., footnote 96, second sentence.
47 First written submission of the Dominican Republic, paragraphs 502-549.
48 Reply by the Dominican Republic to question 167 from the Panel.
49 Second written submission of the complainants, paragraphs 248-251.
50 Appellate Body Report, US – Gasoline, page 25; see also Appellate Body Report, Japan – Alcoholic
Beverages, page 12; Appellate Body Report, Korea – Dairy, paragraphs 81 and 82.

product of other WTO Members. A violation of Artic le I.1 implies proof of various elements, which
were set out in our second written submission
51 and which are summarized below:
 The decision not to apply the tariff surc harge to imports from Mexico, Panama,
Colombia and Indonesia constitutes an a dvantage, favour, privilege or immunity
related to import duties;
 this advantage, favour, privilege or immun ity granted by the Dominican Republic to
Mexico, Panama, Colombia and Indonesia is not extended to other WTO Members,
because exemption from the measure only benefits these four countries.
45. The Dominican Republic has acknowledged on a number of occasions that, if the measures
contested are not deemed to be safeguards, exem pting certain countries from the measure becomes
"problematic".52 The Dominican Republic does not seek to justify this violation under any provision
of the GATT. Accordingly, it is obvious that the Dominican Republic acted in a manner inconsistent
with Article I.1 of the GATT by not applying the tariff surcharge on a most-favoured-nation basis.
B. VIOLATION OF THE PROHIBITION ON IMPOSING DUTIES AND CHARGES OTHER THAN
ORDINARY CUSTOMS DUTY
46. The complainants have also contended throu ghout the procedure that the provisional and
definitive measures are contrary to Article II.1(a) and II.1(b), second sentence, of the GATT. The
Dominican Republic has not presented any better defen ce against these claims than the statement that
these measures simply constitute a tariff increase a nd has put forward this statement only in the
context of the applicability of the AS and Article XIX.53
47. We have already dealt with these arguments in regard to the appli cability of the AS and
Article XIX. In our view, the Dominican Republic has not submitted sufficient factual elements to
refute those cited by the complainants. 54 We consider that this is the case because it is difficult to
explain how a measure whose characteristics are not the same as a tariff, and which even the
Dominican Republic recognizes is applied in replace ment of the ordinary customs duty, could be
termed a tariff. In addition, we reaffirm that the Dominican Republic has not registered any duty or
charge other than the ordinary customs duty in it s Schedule of Concessions. Consequently, the Panel
will have to determine whether the complainants have proved that the provisional and definitive
measures constitute duties and charges other than ordinary customs duty and that, accordingly, they
are inconsistent with Article II.1(a) and II.1(b), second sentence, of the GATT.
XII. CONCLUSION
48. Based on the foregoing, the complainants request the Panel to confirm that the AS and
Article XIX apply to the provisional and definitive measures and to find that the measures, and the
investigation and substantive dete rminations contested, are inconsis tent with Article XIX and the

51 Second written submission of the complainants, paragraphs 256-282.
52 Closing statement by the Dominican Republic at the first substantive meeting, paragraph 17; reply
by the Dominican Republic to question 52 from the Panel; reply by the Dominican Republic to question 2 from
the complainants.
53 Second written submission of the Dominican Republic, paragraphs 15-25.
54 See the complainants' response to the request fo r a preliminary resolution, paragraph 123; opening
oral statement by the complainants at the first substantive meeting, paragraphs 136-145; reply of the
complainants to questions 26 and 27.

various provisions of the AS cited. Likewise, the co mplainants request the Panel to find that the lack
of notification, consultations and adequate means of compensation are inconsistent with Articles 8.1
and 12.3 of the AS and XIX.2 of the GATT.
49. Alternatively, the complainants request the Panel to find that the selective exemption of
imports from the provisional and definitive measures is inconsistent with Article I.1 and that both
measures are also inconsistent with Article II.1(a) and II.1(b), second sentence, of the GATT.
50. Lastly, in view of the serious and numerous anomalies in the investigation, and in the
application of the provisional and definitive measures, the complainants consider that the Panel would
be justified in exercising its authority, pursuant to Article 19.1 of the DSU, to make suggestions
regarding implementation. In this connection, the complainants request the Panel to suggest that the
Dominican Republic withdraw the definitive measure with immediate effect.

ANNEX F-3

CLOSING ORAL STATEMENT OF THE DOMINICAN REPUBLIC

Mr Chairman, members of the Panel:

1. The Dominican Republic thanks you for your efforts and questions yesterday and today at this
second substantive meeting of the Panel. As this meeting draws to a close, the Dominican Republic
would merely like to make a few general remarks that it would ask the Panel to bear in mind when
reaching its conclusions and findings.
2. It has become clear that the measures at issue before the Panel do not suspend any obligations
or modify or withdraw a concession within the meaning of Article XIX:1(a) of the GATT. The
complainants nevertheless maintain that GATT Article XIX and the Agre ement on Safeguards apply
to the measures in dispute.
3. To support their arguments, the complainants ha ve resorted to interpretations according to
which the essential function of a safeguard measure is to prevent or remedy serious injury to a
domestic industry by adopting measures as a "saf eguard" duty that is different from a simple
MFN tariff increase. According to this interpre tation, the idea of suspending an obligation or
withdrawing or modifying a concession is not essential to the notion of safeguard in WTO law.
1
According to the complainants, the suspension of an obligation or the modification or withdrawal of a
concession would only be necessary when the "safegua rd duty" results in an increase that exceeds the
bound rate. Thus, an additional duty below the bound level would constitu te a "safeguard" duty
although it does not involve the suspension, withdr awal or modification of an obligation or
concession. This interpretation introduces an artif icial distinction between the first and second parts
of Article XIX:1(a) of the GATT in which th e second part provides for cases in which such a
safeguard measure is inconsistent with other GATT obligations.
4. Essentially, it became clear as the proceedings went forward that the complainants were
trying to create a sort of sui generis trade remedy that is not provided for in the WTO Agreements.
This remedy would cover any measure whose function c onsists of resolving injury or threat of serious
injury situations without taking account of the objec tive conditions that define the notion of safeguard
and the scope of application of GATT Article XIX and the Agreement on Safeguards. The
Dominican Republic urges the Panel not to adopt th is novel interpretation of Article XIX of the
GATT, which would be tantamount to creating a new trade remedy and applying disciplines to
measures that would otherwise be authorized under the GATT.
5. The interpretation of the complainants should no t be adopted lightly: to apply disciplines to
certain measures that can normally be freely adopt ed, as in the case of a tariff increase to a level
below the bound rate, would be to undermine the flexibility that is inherent and essential to the
WTO's system of tariff concessions, i.e. the marg in for manoeuvre represented by the difference
between the bound rate and the applied tariff.
6. For WTO Members, this margin of flexibility provided by the difference between the applied
tariff and the bound rate is essential. Moreover, several of the complainants joined the
Dominican Republic in defending this margin in recent non-agricultural market access negotiations,

1 Reply of the complainants to question 58 of the Panel.

stressing that "[t]ariffs serve multiple purposes in small, vulnerable economies, the most important of
which are to ensure the viability of vulnerable domestic industries …".
2 The Dominican Republic
asks the Panel not to create a precedent that would undermine th e incentives for Members to apply
tariffs at a rate significantly below the bound rate, as this would affect one of the cornerstones of the
GATT, namely the system of tariff concessions as a ceiling below which Members are given ample
freedom of action.
7. The Dominican Republic trusts that the Panel w ill not adopt an interpretation that turns the
notion of safeguard into a trade defence instrume nt similar to an anti-dumping procedure. The
purpose of imposing a safeguard measure is the su spension, modification or withdrawal of an
obligation or concession. This is why Article XIX is known as an escape clause. It would be
counter-productive to impose the disciplines of th e Safeguards Agreement on tariff increases within
the margin of flexibility between the bound rate a nd the applied tariff. Such an increase does not
require recourse to any escape clause, considering that there is no obligation being suspended or
concession being modified.
8. Mr Chairman, members of the Panel, I thus conclude my oral statement. The
Dominican Republic would like to thank you and the Secretariat once again for your efforts in this
dispute.

2 Market Access for Non-Agricultural Products: Tr eatment of Small, Vulnerable Economies in the
NAMA Negotiations; Communication from Antigua and Barbuda, Barbados, Bolivia, Dominica,
Dominican Republic, El Salvador, Fiji, Grenad a, Guatemala, Honduras, Mongolia, Nicaragua,
Papua New Guinea, Paraguay, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines and
Trinidad and Tobago, 10 November 2005, TN/MA/W/66, paragraph 4.

ANNEX F-4

CLOSING ORAL STATEMENT OF THE COMPLAINANTS

Mr Chairman, members of the Panel:

1. In this last statement, the complainants present some reactions to the opening statement by the
Dominican Republic yesterday.
2. With regard to the preliminary objections that seek to exclude certain claims from the Panel's
terms of reference, during this second hearing we have not heard an y additional substantive argument
from the Dominican Republic in support of its positi on. The Dominican Republic still fails to explain
how its right of defence was specifically affect ed. It has not shown either how the alleged
inconsistency between the request for consultations and the request for the establishment of a panel
changed the essence of the claims.
3. The arguments concerning Articles I.1, II.1(a) and II.1(b) of the GATT fall fully within the
terms of reference for this dispute because of the reservation contained in the request for consultations
that enabled the complainants to bring up i ssues in conformity with the GATT during the
consultations, and also because of the fact that these issues were in fact discussed during the
consultations. Moreover, these arguments are clearly included in the request for the establishment of
a panel. The Dominican Republic nevertheless conti nues to seek ways of depriving these facts of any
substance; for example, by stating that the i ssues concerning Articles I and II of the GATT were not
discussed during the consultations. In this connecti on, we repeat that Panama, being the only country
which participated in the consultations as an associate member, clarified that these issues were
effectively addressed in the consultations. Consequently, this discussion has already concluded.
4. We also note that the Dominican Republic has not put forward any formal defence concerning
the claims relating to Articles I.1, II.1(a) and II.1(b) of the GATT. It simply addressed these issues in
connection with the discussion on the applicability of Article XIX and the AS to the provisional and
definitive measures.
5. Regarding the applicability of the AS and Ar ticle XIX, the Dominican Republic finds it
pertinent to cite the interpretative note to Article 40 of the Havana Charter concerning Emergency
Action on Imports of Particular Products, which indicates that any suspension, withdrawal or
modification under what today would be Article XIX. 1(a) must not discriminate against imports from
any Member country. It then states that this logic has applied since the very first days Article XIX
came into force.
1
6. The complainants consider that the interpreta tive note referred to by the Dominican Republic
does not form part of the ordinary meaning, context, object and purpose of the GATT, in particular,
Article XIX, so it plays no role in the task of interpreting Article XIX.1(a). Article XIX has no
interpretative notes and the meaning of the words " obligations" and "obligation" in its context is
unequivocal and is not qualified.

1 Opening oral statement of the Dominican Republic at the second meeting of the Panel, paragraphs 17
and 18.

7. Furthermore, even if this note played any inte rpretative role, the compla inants consider that
its import does not support the Dominican Republic 's position, but rather supports what the
complainants contend to the effect that it indi cates that the GATT Contracting Parties decided to
exclude this limitation from the scope of Ar ticle XIX of the GATT. Accordingly, the
Dominican Republic failed to explain what happened to this interpretative note.
8. This interpretative note was included in the te xt of the Havana Charter in relation to
Article 40 (now Article XIX). Unlike other provi sions and interpretative notes, however, including
Article 40 itself (i.e. Article XIX), it did not surv ive the transition from the Havana Charter to the
GATT 1947 and was not incorporated into the text of the GATT 1947.
9. As can be seen from the document we are att aching as exhibit CEGH-39, the Havana Charter
contains several provisions that are today included in the GATT. Article 40 almost literally reflects
what we now know as Article XIX of the GA TT. Moreover, the Havana Charter included
interpretative notes on various of its substantiv e provisions. Many of these interpretative notes
survived the transition from the Havana Charter to the GATT 1947. This was the case, for example,
with the note concerning Article 18 of the Havana Charter, which is now the interpretative note to
Article III.2 of the GATT concerning internal taxes. Other notes, however, were not incorporated into
the GATT. This was the case for th e note concerning Article 40 of the Havana Charter, cited by the
Dominican Republic in its oral statement yesterday.
10. What does this omission signify? In our view, that the Contracting Parties to the GATT 1947
clearly rejected the limitation on the scope of Artic le XIX.1(a), which it was sought to establish by
means of the interpretative note referred to by the Dominican Republic.
11. It should also be pointed out that the Dominican Republic did not quote the interpretative note
to Article 40 of the Havana Charter in full. The text in full reads as follows:
It is understood that any suspension, withdrawal or modification under
paragraphs 1(a), 1(b) and 3(b) must not discriminate against imports from any
Member country, and that such action shoul d avoid, to the fullest extent possible,
injury to other supplying Member countries.
2
12. It should be noted that the last part of this note qualifies the measure in such a way that the
action to be avoided, to the fullest extent possible, is causing injury to other Members suppliers of the
product in question. These words cast doubt on the abso lute nature of the "non-discrimination" which
it is sought to establish in the first part of the interpretative note.
13. Consequently, the Dominican Republic only relate d part of the story, leaving out a detail
which in fact backs up the position of the complainants in the sense that Article XIX.1(a) applies to all
the GATT provisions, including Article I.1.
14. This position is supported by another fact th at the Dominican Republic also omitted to
mention concerning the early days of the GATT 1947. As can be seen from the document attached as
Exhibit CEGH-40, page 13, in connection with the revision of the GATT in 1955, there was an
attempt on the part of delegations of certain Sca ndinavian countries to reintroduce the interpretative
note to Article 40 of the Havana Charter by means of a new provision. The proposal was submitted to

2 Exhibit CEGH-39.

the sub-committee revising the GATT, which rejected it. There was no general agreement on it. In
the end, it had to be withdrawn.
15. Contrary what is stated by the Dominican Repub lic, this shows that in the early years of the
GATT the interpretative note to the Havana Ch arter did not have the effect which the
Dominican Republic is now seeking to give it. More over, it also shows that, since the early days of
the GATT 1947, the GATT Contracting Parties were not prepared to accept a limitation on the scope
of Article XIX.1(a) of the GATT.
16. In addition, the Dominican Republic cites a report by the Ad Hoc Committee on the accession
of Japan to the GATT 1947
3 in support of its statement that Ar ticle XIX.1 does not allow suspension
of Article I.1 of the GATT. What the Dominican Republic does not indicate is that this report was
situated in a context in which several Contracti ng Parties were concerned about Japan's accession to
the GATT and wondered whether it would not perhaps be appropriate to apply a safeguard focusing
on Japan with a view to remedying serious injury , not just for a specific producer but for various
production sectors.
4
17. It was in this context that some members of the Committee expressed the view that the
measures adopted pursuant to Article XIX could not be discriminatory. 5 This was the limited opinion
of some members of the Committee. It did not reflect a consensual or general opinion of the
Committee, still less of the Contracting Parties to the GATT 1947. Accordingly, this position of some
parties during negotiations has to be viewed in the light of its due and limited scope in the context of
those negotiations.
18. The Dominican Republic states that in Japan's accession procedure the possible extension of
Article XIX also to constitute susp ension of Article I.1 was rejected. 6 What was in fact rejected,
however, was extension of Article XIX to include c onditions in addition to those provided in the first
part of Article XIX.1(a) concerning imports from one Contracting Party in particular. 7 Perhaps this
rejection was attributable to the opinion mentione d by the Dominican Republic, but it might also be
attributable to the view that there was no need to extend Article XIX.1(a), either because the
additional conditions sought were already covered by Article XXIII of the GATT 8, or because some
of the Committee's members considered that Article XIX.1(a) allowed for the possibility of applying
safeguards to imports from specific countries. Th e report cited by the Dominican Republic does not
enable a conclusion to be reached either way, so it does not constitute el ucidatory and relevant
information.
19. For the foregoing reasons, the complainants do not consider that the additional elements
presented by the Dominican Republic provide confirma tion that Article XIX.1(a) excludes Article I.1
of the GATT from its application.
20. With regard to the definition of the domestic industry, the Dominican Republic indicates that
the complainants argue that the Panel was obliged to revise the definition of the product subject to
investigation in the light of the report of the Appellate Body in EC – Aircraft . The reason why the

3 Exhibit RDO-27.
4 Ibid., paragraphs 3-6.
5 Ibid., paragraph 6.
6 Opening statement of the Dominican Republic at the second meeting of the Panel, paragraph 18.
7 Exhibit RDO-27, paragraph 7.
8 Idem.

Dominican Republic considers that this report is irre levant is that the definition of subsidized product
in a complaint of serious injury is submitted by a WTO Member and refers to the relevant market,
whereas the definition of the product subject to inv estigation in a domestic procedure is made by the
investigating authority.
9 This reason does not appear valid to us. The fact that the evaluation by a
panel (in the case of serious injury) by compar ison with a domestic authority (in the case of
safeguards) does not have any consequences, it does not lessen the duty of objectiveness, impartiality
and neutrality that must be the feature of inv estigations, whether by a panel or by a domestic
investigating authority in the case of safeguards.
21. Moreover, a claim of serious injury concerns tr ade that is distorted by recurrent or unlawful
subsidies, whereas a safeguards investigation concerns trade that is conducted lawfully along the lines
to be expected in trade relations among Members. This fundamental distinction indicates even more
clearly that the principles which govern determination of the product investigated in a claim of serious
injury must be respected in an investigation relati ng to safeguard measures, and confirm to this Panel
that the considerations taken into account by the Dominican Republic in order not to provide adequate
and reasoned explanations of the product subject to investigation when defining the domestic industry
are insufficient.
22. As to the alleged increase in imports, the Do minican Republic repeats its arguments that
"overall during the investigation period imports increased by 50.06 per cent". 10 This spontaneous and
abrupt statement by the Dominican Republic re flects its underlying assumption, namely, for it the
criterion followed first and foremost to determine the increase in imports was increases at each
extremity of the period.
23. Subsequently, concerning the decrease in 2009, the Dominican Republic indicated that this
can be explained by the reduced growth in the Do minican economy and that the temporary nature of
this decline was confirmed by the import figures for 2010. 11 The complainants ask themselves where,
in the respective reports, it is determined that the decline was "incidental" and "temporary" in the light
of these considerations? Reading these reports does not lead to such conclusions or to an explanation
of how a macroeconomic occurrence that affects the economy in general (and hence questionably
"incidental") or an increase based on imports distor ted by the conduct of the investigation and the
imposition of the provisional measure (and hence ques tionably proof of their "temporary" nature) can
lead to the conclusion that the decline in impor ts up to the end of the investigation period was
irrelevant.
24. Lastly, the complainants would like to emphasize the systematic repercussions of this dispute
at three levels: at the level of consideration of safeguards within the WTO, at the level of trade
remedies, and at the level of regional and multilateral trade policy.
25. As to the consideration of safeguards with in the WTO, if the Dominican Republic's
interpretation that the measures in question are not safeguard measures in the WTO context is
accepted, this would allow investigating authorities to initiate investigation procedures in order to
apply safeguard measures, involving several interested parties and governments of exporting countries
(with high costs for participation, legal representation, trade uncertainties, and political manoeuvring),
and subsequently avoid multilateral control . In other words, it would encourage the initiation of
supposedly "harmless" investigation procedures and th ere would be no form of control even if they

9 Opening statement of the Dominican Republic at the second meeting of the Panel, paragraph 35.
10 Ibid., paragraph 50.
11 Idem.

would undoubtedly have the effect of disguised barri ers to trade and international competition. Such
an outcome would be directly contrary to the object and purpose of the AS, as set out in its preamble,
and would raise serious doubts about the feasibility of contesting such measures through the dispute
settlement mechanism.
26. With regard to trade remedies, if the Dominican Republic's interpretation that the measures in
question are not safeguard measures in the WT O context is accepted, in anti-dumping or
countervailing procedures investigating authorities could use this interpretation as a perverse incentive
to avoid obligations under the anti-dumping and s ubsidies and countervailing measures agreements.
An investigating authority following this line co uld then decide to initiate an anti-dumping or
countervailing duty investigation into imports from sev eral origins, collect the necessary information,
evaluate whether there are "unfair practices", injury and a causal link, and if this evaluation did not
yield the expected results, it could terminate the investigation and then impose a "tariff increase",
even though this increase might exceed the margin of dumping or subsidization, as may be the case.
Even if it was determined that there was an unfair practice, injury and a causal link, an investigating
authority might deem it appropriate not to impose an anti-dumping or countervailing duty and replace
it with a straightforward tariff increase in order to a void the expiry period of five years applicable to
such measures. It would also be a dangerous incentive that could place WTO Members in the
situation prior to the existence of the GATT 1947: soon, there could be a proliferation of measures
that were not only obstacles to international tr ade but, quite simply, escaped from any multilateral
control.
27. Lastly, as regards regional and multilateral policy, if the Dominican Republic's interpretation
that the measures in question are not safeguard measures in the WTO context is accepted, there would
be inconsistency between the re gional provisions on safeguard measures and the WTO provisions.
Many WTO Members have managed to negotiate a harmonious balance between these provisions by
retaining the rights and obligations of Article XIX a nd the AS at the regional level in order to apply
the so-called global safeguards. This ba lance has been reached not only between the
Dominican Republic and the complainants in the DR-CAFTA and Central America-DR agreements, it
is a common mechanism in several regional agreemen ts and is desirable because it makes safeguards
disciplines at the regional level and those envisaged at the multilateral level consistent.
28. This harmonious balance, however, could be distorted if, in order to abstain from compliance
with its regional commitments, a party to these regi onal agreements makes use of and benefits from
the WTO provisions and then, when facing questi ons in the WTO and in order to abstain from
compliance with its WTO commitments, this party go es back on itself and contends that the measure
from which it benefited is not a safeguard measure in WTO terms. The result of the foregoing would
be that, in order to contest the measures in question, a complainant would first have to do so using the
dispute settlement mechanism in th e regional agreement in question; wait for the argument of the
defence that it is a WTO safeguards measure; and only after this has been accepted, may it bring the
matter up at the WTO, where the defendant still has the possibility of arguing that it is not a safeguard
measure in accordance with the AS because it does not involve suspension of obligations or
concessions.
29. In the light of the foregoing, as a matter of trade policy, it would not be acceptable to allow a
country to benefit in two ways from acts that are unrelated, particularly if these acts are committed at
the expense of the interests and expectations in good faith on the part of other trading partners.

30. For all the reasons explained during this pro cedure, we hope that the Panel will objectively
evaluate this dispute and find that the provisional and definitive measures are inconsistent with
Article XIX and the AS (or alternatively with Articl es I.1, II.1(a) and II.1(b) of the GATT) and that
the other measures at issue are also inconsistent with Article XIX and the AS.

ANNEX G

REQUEST FOR THE ESTABLISHMENT OF A PANEL

Contents Page
G-1 Request for the establishment of a panel by Costa Rica, WT/DS415/7
(22 December 2010)
G-2
G-2 Request for the establishment of a panel by Guatemala, WT/DS416/7
(22 December 2010)
G-7
G-3 Request for the establishment of a panel by Honduras, WT/DS417/7
(6 January 2011)
G-12
G-4 Request for the establishment of a panel by El Salvador,
WT/DS418/7 (6 January 2011)
G-17

ANNEX G-1

REQUEST FOR THE ESTABLISHMENT OF A PANEL BY COSTA RICA

22 December 2010

(10-6862)
 Original: Spanish

Request for the Establishment of a Panel by Costa Rica

 The following communication, dated 15 December 2010, from the delegation of Costa Rica to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 15 October 2010, Costa Rica requested c onsultations with the Dominican Republic
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994),
and Article 14 of the Agreement on Safeguards co ncerning the provisional and definitive safeguard
measures imposed by the Dominican Republic on impor ts of polypropylene bags and tubular fabric
and the investigation that led to the imposition of those measures.

 Costa Rica and the Dominican Republic held consultations on 16 a nd 17 November 2010.
Unfortunately, these consultations failed to settle the di spute. Accordingly, pursuant to Article 6 of
the DSU and Article 14 of the Agreement on Safeguards, Costa Rica requests that at its next meeting,
scheduled for 25 January 2011, the Dispute Settlement Body establish a panel with the standard terms
of reference as set out in Article 7.1 of the DSU to examine this matter and the claims set forth below.

A. B
ACKGROUND AND MEASURES AT ISSUE
 The measures at issue were imposed pursuant to an investigation conducted by the Regulatory
Commission on Unfair Trade Practices and Safe guard Measures of the Dominican Republic
(hereinafter "the Commission").

1. Initiation of the safeguard investigation
 On 15 December 2009, at the request of the company FERSAN S.A. (hereinafter
"FERSAN"), the Commission declared the initiation of an investigation with a view to the application
of safeguard measures on imports from all origins of polypropylene bags and tubular fabric classified
under subheadings 5407.20.20, 6305.33.10 and 6305.33.90 of the Tariff of the Dominican Republic
(hereinafter "the initiating resolution").
1 On 17 December 2009, the Commission published a notice
of initiation of an investigation.2

2. Preliminary determination
 On 16 March 2010, the Commission decided to impose a provisional safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic. It was also decided to exclude from the
application of the measure imports from Mexi co, Panama, Colombia and Indonesia pursuant to
Article 9.1 of the Agreement on Safeguards. 3 On 25 March 2010, the Commission published a notice
of application of provisional measures on impor ts of polypropylene bags and tubular fabric. 4 T h e
duration of the provisional safeguard measure was 200 days.

3. Final determination
 On 5 October 2010, the Commission decided to impose a definitive safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic.
5 The Commission then issued a notice of
application of the definitive measures on impor ts of polypropylene bags and tubular fabric. 6 In that
notice and in the final resolution, the Commission pointed out that pursuant to Article 9.1 of the
Agreement on Safeguards, the definitive safeguard measure would not apply to imports from Mexico,
Panama, Colombia and Indonesia. The measure is being applied for 18 months starting on
18 October 2010.

 Thus, for Costa Rica the measures at issue cover all of the resolutions, technical reports and
notices mentioned above as regards the actions and omissions of the authorities of the
Dominican Republic during the investigation and im position of the safeguard measures, including the
methodology, calculations, comparisons, determinations, procedures or general practices.

1 Commission Resolution CDC-RD-SG-046-2009 of 15 December 2009; initial technical report of the
Commission dated 20 November 2009.
2 Notice, general safeguard investigation concerning textiles of man-made filament yarn and bags of
polyethylene and polypropylene, dated 15 December 2009.
3 Resolution CDC-RD-SG-061-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 16 March 2010 ("Preliminary Resolution"). Addendum
to Resolution CDC-RD-SG-061-2010 dated 16 March 2010 deciding on the application of the provisional
measures requested by Fertilizantes Sant o Domingo, C. Por A. (FERSAN) in the Polypropylene Bags and
Tubular Fabric case, dated 30 March 2010; Preliminary Technical Report of the Commission (without date).
4 Notice, general safeguard investigation concer ning tubular fabric and polypropylene bags,
25 March 2010.
5 Resolution CDC-RD-SG-089-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 5 October 2010 ("Final Resolution"); Final Technical
Report of the Commission, dated 13 July 2010.
6 Notice, general safeguard investigation concerning tubular fabric and polypropylene bags, dated
6 October 2010.

B. L
EGAL BASIS FOR THE COMPLAINT
 Costa Rica notes that according to Article 11.1( a) of the Agreement on Safeguards, a Member
shall not take or seek a safeguard action unless su ch action conforms with the provisions of
Article XIX of the GATT 1994 applied in accordance with the Agreement on Safeguards. In this
connection, Costa Rica considers that:

(a) The Commission's preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with resp ect to the various relevant factual and
legal aspects of the determin ations relating to the produc t under investigation, the
domestic like product, and the domestic industr y, and this affects the determinations
of increased imports, serious injury a nd causality that stem from those prior
determinations. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a),
4.1(c), 4.2(a), 4.2(b), 4.2(c) and 6 of the Agreement on Safeguards, and
Article XIX:1(a) of the GATT 1994.
(b) The preliminary and final determinations do not contain reasoned and adequate
findings and conclusions regarding the a lleged unforeseen developments and to
explain how those developments resulted in increased imports of the specific products
covered by the safeguard measure. These omissions are inconsistent with
Articles 3.1, 4.2(a), 4.2(b), 4.2(c), 6 and 11.1(a) of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994.
(c) Moreover, the preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with respect to the alleged effect of the obligations
incurred under the GATT 1994, and how that effect would have resulted in increased
imports of the specific products covered by the safeguard measure. These omissions
are inconsistent with Articles 3.1, 4.2( a), 4.2(b), 4.2(c), 6 and 11.1(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(d) Nor do the preliminary and final determin ations contain reasoned and adequate
findings and conclusions with respect to the alleged increase in imports of the specific
products under investigation, in absolute terms or relative to domestic production.
These omissions are contrary to Articles 2.1, 3.1, 4.2(a), 4.2(b), 4.2(c), and 6 of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(e) Furthermore, although the state of the domes tic industry was found to be favourable,
the preliminary and final determinations do not contain reasoned and adequate
findings and conclusions as to the existence of the alleged serious injury, understood
as significant overall impairment of the domestic industry. Nor does the preliminary
determination contain any reasoned and ad equate findings and conclusions with
regard to the critical circumstances to justif y the provisional measure, or with regard
to all of the factors that are required to be examined for the determination of serious
injury. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(f) Nor, at the same time, do the preliminary and final determinations contain reasoned
and adequate findings and c onclusions regarding the causal link between the alleged

increase in imports and the serious injury to the domestic industry. In particular,
these determinations do not contain the anal ysis substantiating the causal relationship
between the alleged increased imports and the alleged serious injury to the domestic
injury. Nor is it explained how the injury to the domestic industry caused by factors
other than imports was not attributed to the imports of the products under
investigation. These omissions are contrary to Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(g) The measures at issue do not exempt all of the developing countries whose share of
imports does not exceed 3 per cent. More over, the required parallelism between the
substantive evaluation of the determinations of increased imports, serious injury and
causal link on the one hand, and the coverage of the measures at issue as regards
origin on the other, was not respected. These omissions are inconsistent with
Articles 2.1, 2.2, 4.2(a), 4.2(b), 4.2(c), 5.1, 6 and 9.1 of the Agreement on Safeguards,
and Article XIX:1(a) of the GATT 1994.
(h) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the reasons wh y certain information was considered to
be confidential without requiring non-confidential summaries or why that information
could not be summarized in a non-confidential manner. These omissions are contrary
to Articles 3.1 and 3.2 of the Agreement on Safeguards.
(i) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the need for the safeguard measure to facilitate
adjustment of the domestic industry. This omission is inconsistent with Articles 3.1,
4.2(c), and 5.1 of the Agreement on Safeguards.
(j) The resolutions and reports made public concerning the preliminary and final
determinations do not contain the reasoned and adequate findings and conclusions on
all issues of fact and law supporting the impos ition of the measures in question. This
omission is inconsistent with Articles 3.1 and 4.2(c) of the Agreement on Safeguards.
(k) Finally, the Dominican Republic failed to provide the Members having a substantial
interest as exporters of the products con cerned adequate opportunity for consultations
prior to the adoption of the definitive measure. Nor did the Dominican Republic seek
to agree on any adequate means of trade co mpensation for the adverse effects of the
measures on the trade of other Members. This omission is inconsistent with
Articles 8.1 and 12.3 of the Agreement on Safeguards and Article XIX:2 of the
GATT 1994.
 In any case, Costa Rica considers that:

(l) The measures at issue are inconsistent with Article I:1 of the GATT 1994 in that they
are measures that are not applied to pr oducts originating in or consigned from
particular origins, and this constitutes an advantage that has not been accorded
immediately and unconditionally to other WTO Members.

(m) Moreover, the measures at issue are duties and charges other than ordinary customs
duties that are contrary to Article II:1(a) and the second sentence of Article II:1(b) of
the GATT 1994.
 In view of the foregoing, Costa Rica request s the Dispute Settlement Body to establish a
panel with the standard terms of reference as set out in Article 7.1 of the DSU to examine this matter
and the above-mentioned claims.

 In view of the 18-month period of validity of the definitive safeguard measure and to ensure
that the dispute settlement system provides an effectiv e solution to this dispute, Costa Rica hopes that
the Panel will issue the final report to the parties as soon as possible, and in any case not later than the
period of six months from the date that the com position and terms of refere nce of the Panel were
agreed upon, as stipulated in Article 12.8 of the DSU.

ANNEX G-2

REQUEST FOR THE ESTABLISHMENT OF A PANEL BY GUATEMALA

22 December 2010

(10-6864)
 Original: Spanish

Request for the Establishment of a Panel by Guatemala

 The following communication, dated 15 Decemb er 2010, from the delegation of Guatemala to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 15 October 2010, Guatemala requested c onsultations with the Dominican Republic
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994),
and Article 14 of the Agreement on Safeguards co ncerning the provisional and definitive safeguard
measures imposed by the Dominican Republic on impor ts of polypropylene bags and tubular fabric
and the investigation that led to the imposition of those measures.

 Guatemala and the Dominican Republic held consultations on 16 and 17 November 2010.
Unfortunately, these consultations failed to settle the di spute. Accordingly, pursuant to Article 6 of
the DSU and Article 14 of the Agreement on Safeguard s, Guatemala requests that at its next meeting,
scheduled for 25 January 2011, the Dispute Settlement Body establish a panel with the standard terms
of reference as set out in Article 7.1 of the DSU to examine this matter and the claims set forth below.

A. B
ACKGROUND AND MEASURES AT ISSUE
 The measures at issue were imposed pursuant to an investigation conducted by the Regulatory
Commission on Unfair Trade Practices and Safe guard Measures of the Dominican Republic
(hereinafter "the Commission").

1. Initiation of the safeguard investigation
 On 15 December 2009, at the request of the company FERSAN S.A. (hereinafter
"FERSAN"), the Commission declared the initiation of an investigation with a view to the application

of safeguard measures on imports from all origins of polypropylene bags and tubular fabric classified
under subheadings 5407.20.20, 6305.33.10 and 6305.33.90 of the Tariff of the Dominican Republic
(hereinafter "the initiating resolution").
1 On 17 December 2009, the Commission published a notice
of initiation of an investigation.2

2. Preliminary determination
 On 16 March 2010, the Commission decided to impose a provisional safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic. It was also decided to exclude from the
application of the measure imports from Mexi co, Panama, Colombia and Indonesia pursuant to
Article 9.1 of the Agreement on Safeguards.
3 On 25 March 2010, the Commission published a notice
of application of provisional measures on impor ts of polypropylene bags and tubular fabric. 4 T h e
duration of the provisional safeguard measure was 200 days.

3. Final determination
 On 5 October 2010, the Commission decided to impose a definitive safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic. 5 The Commission then issued a notice of
application of the definitive measures on impor ts of polypropylene bags and tubular fabric. 6 In that
notice and in the final resolution, the Commission pointed out that pursuant to Article 9.1 of the
Agreement on Safeguards, the definitive safeguard measure would not apply to imports from Mexico,
Panama, Colombia and Indonesia. The measure is being applied for 18 months starting on
18 October 2010.

 Thus, the measures at issue cover all of th e resolutions, technical reports and notices
mentioned above as regards the actions and omissi ons of the authorities of the Dominican Republic
during the investigation and imposition of the safeguard measures, including the methodology,
calculations, comparisons, determinations, procedures or general practices.

1 Commission Resolution CDC-RD-SG-046-2009 of 15 December 2009; initial technical report of the
Commission dated 20 November 2009.
2 Notice, general safeguard investigation concerning textiles of man-made filament yarn and bags of
polyethylene and polypropylene, dated 15 December 2009.
3 Resolution CDC-RD-SG-061-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 16 March 2010 ("Preliminary Resolution"). Addendum
to Resolution CDC-RD-SG-061-2010 dated 16 March 2010 deciding on the application of the provisional
measures requested by Fertilizantes Sant o Domingo, C. Por A. (FERSAN) in the Polypropylene Bags and
Tubular Fabric case, dated 30 March 2010; Preliminary Technical Report of the Commission (without date).
4 Notice, general safeguard investigation concer ning tubular fabric and polypropylene bags,
25 March 2010.
5 Resolution CDC-RD-SG-089-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 5 October 2010 ("Final Resolution"); Final Technical
Report of the Commission, dated 13 July 2010.
6 Notice, general safeguard investigation concerning tubular fabric and polypropylene bags, dated
6 October 2010.

B. L
EGAL BASIS FOR THE COMPLAINT
 Guatemala notes that according to Article 11.1(a) of the Agreement on Safeguards, a Member
shall not take or seek a safeguard action unless su ch action conforms with the provisions of
Article XIX of the GATT 1994 applied in accordance with the Agreement on Safeguards. In this
connection, Guatemala considers that:

(a) The preliminary and final determinations do not contain reasoned and adequate
findings and conclusions with respect to the various relevant factual and legal aspects
of the determinations relating to the pr oduct under investigation, the domestic like
product, and the domestic industry, and this affects the determinations of increased
imports, serious injury and causality that stem from those prior determinations.
These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a), 4.1(c), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards, and Article XIX:1(a) of the
GATT 1994.
(b) The preliminary and final determinations do not contain reasoned and adequate
findings and conclusions regarding the a lleged unforeseen developments and to
explain how those developments resulted in increased imports of the specific products
covered by the safeguard measure. These omissions are inconsistent with
Articles 3.1, 4.2(a), 4.2(b), 4.2(c), 6 and 11.1(a) of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994.
(c) Moreover, the preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with respect to the alleged effect of the obligations
incurred under the GATT 1994, and how that effect would have resulted in increased
imports of the specific products covered by the safeguard measure. These omissions
are inconsistent with Articles 3.1, 4.2( a), 4.2(b), 4.2(c), 6 and 11.1(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(d) Nor do the preliminary and final determin ations contain reasoned and adequate
findings and conclusions with respect to the alleged increase in imports of the specific
products under investigation, in absolute terms or relative to domestic production.
These omissions are contrary to Articles 2.1, 3.1, 4.2(a), 4.2(b), 4.2(c), and 6 of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(e) Furthermore, although the state of the domes tic industry was found to be favourable,
the preliminary and final determinations do not contain reasoned and adequate
findings and conclusions as to the existence of the alleged serious injury, understood
as significant overall impairment of the domestic industry. Nor does the preliminary
determination contain any reasoned and ad equate findings and conclusions with
regard to the critical circumstances to justif y the provisional measure, or with regard
to all of the factors that are required to be examined for the determination of serious
injury. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(f) Nor, at the same time, do the preliminary and final determinations contain reasoned
and adequate findings and c onclusions regarding the causal link between the alleged
increase in imports and the serious injury to the domestic industry. In particular,

these determinations do not contain the anal ysis substantiating the causal relationship
between the alleged increased imports and the alleged serious injury to the domestic
injury. Nor is it explained how the injury to the domestic industry caused by factors
other than imports was not attributed to the imports of the products under
investigation. These omissions are contrary to Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(g) The measures at issue do not exempt all of the developing countries whose share of
imports does not exceed 3 per cent. More over, the required parallelism between the
substantive evaluation of the determinations of increased imports, serious injury and
causal link on the one hand, and the coverage of the measures at issue as regards
origin on the other, was not respected. These omissions are inconsistent with
Articles 2.1, 2.2, 4.2(a), 4.2(b), 4.2(c), 5.1, 6 and 9.1 of the Agreement on Safeguards,
and Article XIX:1(a) of the GATT 1994.
(h) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the reasons wh y certain information was considered to
be confidential without requiring non-confidential summaries or why that information
could not be summarized in a non-confidential manner. These omissions are contrary
to Articles 3.1 and 3.2 of the Agreement on Safeguards.
(i) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the need for the safeguard measure to facilitate
adjustment of the domestic industry. This omission is inconsistent with Articles 3.1,
4.2(c), and 5.1 of the Agreement on Safeguards.
(j) The resolutions and reports made public concerning the preliminary and final
determinations do not contain the reasoned and adequate findings and conclusions on
all issues of fact and law supporting the impos ition of the measures in question. This
omission is inconsistent with Articles 3.1 and 4.2(c) of the Agreement on Safeguards.
(k) Finally, the Dominican Republic failed to provide the Members having a substantial
interest as exporters of the products con cerned adequate opportunity for consultations
prior to the adoption of the definitive measure. Nor did the Dominican Republic seek
to agree on any adequate means of trade co mpensation for the adverse effects of the
measures on the trade of other Members. This omission is inconsistent with
Articles 8.1 and 12.3 of the Agreement on Safeguards and Article XIX:2 of the
GATT 1994.
 In any case, Guatemala considers that:

(l) The measures at issue are inconsistent with Article I:1 of the GATT 1994 in that they
are measures that are not applied to pr oducts originating in or consigned from
particular origins, and this constitutes an advantage that has not been accorded
immediately and unconditionally to other WTO Members.
(m) Moreover, the measures at issue are duties and charges other than ordinary customs
duties that are contrary to Article II:1(a) and the second sentence of Article II:1(b) of
the GATT 1994.

 In view of the foregoing, Guatemala requests th e Dispute Settlement Body to establish a panel
with the standard terms of reference as set out in Article 7.1 of the DSU to examine this matter and
the above-mentioned claims.
 In view of the 18-month period of validity of the definitive safeguard measure and to ensure
that the dispute settlement system provides an effective solution to th is dispute, Guatemala hopes that
the Panel will issue the final report to the parties as soon as possible, and in any case not later than the
period of six months from the date that the com position and terms of refere nce of the Panel were
agreed upon, as stipulated in Article 12.8 of the DSU.

ANNEX G-3

REQUEST FOR THE ESTABLISHMENT OF A PANEL BY HONDURAS

6 January 2011

(11-0013)
 Original: Spanish

Request for the Establishment of a Panel by Honduras

 The following communication, dated 20 December 2010, from the delegation of Honduras to
the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 18 October 2010, Honduras requested cons ultations with the Dominican Republic
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994),
and Article 14 of the Agreement on Safeguards co ncerning the provisional and definitive safeguard
measures imposed by the Dominican Republic on impor ts of polypropylene bags and tubular fabric
and the investigation that led to the imposition of those measures.

 Honduras and the Dominican Republic held c onsultations on 16 and 17 November 2010.
Unfortunately, these consultations failed to settle the di spute. Accordingly, pursuant to Article 6 of
the DSU and Article 14 of the Agreement on Safeguar ds, Honduras requests that at its next meeting,
scheduled for 25 January 2011, the Dispute Settlement Body establish a panel with the standard terms
of reference as set out in Article 7.1 of the DSU to examine this matter and the claims set forth below.

A. B
ACKGROUND AND MEASURES AT ISSUE
 The measures at issue were imposed pursuant to an investigation conducted by the Regulatory
Commission on Unfair Trade Practices and Safe guard Measures of the Dominican Republic
(hereinafter "the Commission").

1. Initiation of the safeguard investigation
 On 15 December 2009, at the request of the company FERSAN S.A. (hereinafter
"FERSAN"), the Commission declared the initiation of an investigation with a view to the application

of safeguard measures on imports from all origins of polypropylene bags and tubular fabric classified
under subheadings 5407.20.20, 6305.33.10 and 6305.33.90 of the Tariff of the Dominican Republic
(hereinafter "the initiating resolution").
1 On 17 December 2009, the Commission published a notice
of initiation of an investigation.2

2. Preliminary determination
 On 16 March 2010, the Commission decided to impose a provisional safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic. It was also decided to exclude from the
application of the measure imports from Mexi co, Panama, Colombia and Indonesia pursuant to
Article 9.1 of the Agreement on Safeguards.
3 The duration of the provisional safeguard measure was
200 days. On 25 March 2010, the Commission pub lished a notice of application of provisional
measures on imports of polypropylene bags and tubular fabric.4

3. Final determination
 On 5 October 2010, the Commission decided to impose a definitive safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic. 5 The Commission then issued a notice of
application of the definitive measures on impor ts of polypropylene bags and tubular fabric. 6 In that
notice and in the final resolution, the Commission pointed out that pursuant to Article 9.1 of the
Agreement on Safeguards, the definitive safeguard measure would not apply to imports from Mexico,
Panama, Colombia and Indonesia. The measure is being applied for 18 months starting on
18 October 2010.

 Thus, for Honduras, the measures at issue cover all of the resolutions, technical reports and
notices mentioned above as regards the actions and omissions of the authorities of the
Dominican Republic during the investigation and im position of the safeguard measures, including the
methodology, calculations, comparisons, determinations, procedures or general practices.

1 Commission Resolution CDC-RD-SG-046-2009 of 15 December 2009; initial technical report of the
Commission dated 20 November 2009.
2 Notice, general safeguard investigation concerning textiles of man-made filament yarn and bags of
polyethylene and polypropylene, dated 15 December 2009.
3 Resolution CDC-RD-SG-061-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 16 March 2010 ("Preliminary Resolution"). Addendum
to Resolution CDC-RD-SG-061-2010 dated 16 March 2010 deciding on the application of the provisional
measures requested by Fertilizantes Sant o Domingo, C. Por A. (FERSAN) in the Polypropylene Bags and
Tubular Fabric case, dated 30 March 2010; Preliminary Technical Report of the Commission (without date).
4 Notice, general safeguard investigation concer ning tubular fabric and polypropylene bags,
25 March 2010.
5 Resolution CDC-RD-SG-089-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 5 October 2010 ("Final Resolution"); Final Technical
Report of the Commission, dated 13 July 2010.
6 Notice, general safeguard investigation concerning tubular fabric and polypropylene bags, dated
6 October 2010.

B. L
EGAL BASIS FOR THE COMPLAINT
 Honduras notes that according to Article 11.1(a) of the Agreement on Safeguards, a Member
shall not take or seek a safeguard action unless su ch action conforms with the provisions of
Article XIX of the GATT 1994 applied in accordance with the Agreement on Safeguards. In this
connection, Honduras considers that:

(a) The Commission's preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with resp ect to the various relevant factual and
legal aspects of the determin ations relating to the produc t under investigation, the
domestic like product, and the domestic industr y, and this affects the determinations
of increased imports, serious injury a nd causality that stem from those prior
determinations. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a),
4.1(c), 4.2(a), 4.2(b), 4.2(c) and 6 of the Agreement on Safeguards, and
Article XIX:1(a) of the GATT 1994.
(b) The preliminary and final determinations do not contain reasoned and adequate
findings and conclusions regarding the a lleged unforeseen developments and to
explain how those developments resulted in increased imports of the specific products
covered by the safeguard measure. These omissions are inconsistent with
Articles 3.1, 4.2(a), 4.2(b), 4.2(c), 6 and 11.1(a) of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994.
(c) Moreover, the preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with respect to the alleged effect of the obligations
incurred under the GATT 1994, and how that effect would have resulted in increased
imports of the specific products covered by the safeguard measure. These omissions
are inconsistent with Articles 3.1, 4.2( a), 4.2(b), 4.2(c), 6 and 11.1(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(d) Nor do the preliminary and final determin ations contain reasoned and adequate
findings and conclusions with respect to the alleged increase in imports of the specific
products under investigation, in absolute terms or relative to domestic production.
These omissions are contrary to Articles 2.1, 3.1, 4.2(a), 4.2(b), 4.2(c), and 6 of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(e) Furthermore, although the state of the domes tic industry was found to be favourable,
the preliminary and final determinations do not contain reasoned and adequate
findings and conclusions as to the existence of the alleged serious injury, understood
as significant overall impairment of the domestic industry. Nor does the preliminary
determination contain any reasoned and ad equate findings and conclusions with
regard to the critical circumstances to justif y the provisional measure, or with regard
to all of the factors that are required to be examined for the determination of serious
injury. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(f) Nor, at the same time, do the preliminary and final determinations contain reasoned
and adequate findings and c onclusions regarding the causal link between the alleged
increase in imports and the serious injury to the domestic industry. In particular,

these determinations do not contain the anal ysis substantiating the causal relationship
between the alleged increased imports and the alleged serious injury to the domestic
injury. Nor is it explained how the injury to the domestic industry caused by factors
other than imports was not attributed to the imports of the products under
investigation. These omissions are contrary to Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(g) The measures at issue do not exempt all of the developing countries whose share of
imports does not exceed 3 per cent. More over, the required parallelism between the
substantive evaluation of the determinations of increased imports, serious injury and
causal link on the one hand, and the coverage of the measures at issue as regards
origin on the other, was not respected. These omissions are inconsistent with
Articles 2.1, 2.2, 4.2(a), 4.2(b), 4.2(c), 5.1, 6 and 9.1 of the Agreement on Safeguards,
and Article XIX:1(a) of the GATT 1994.
(h) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the reasons wh y certain information was considered to
be confidential without requiring non-confidential summaries or why that information
could not be summarized in a non-confidential manner. These omissions are contrary
to Articles 3.1 and 3.2 of the Agreement on Safeguards.
(i) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the need for the safeguard measure to facilitate
adjustment of the domestic industry. This omission is inconsistent with Articles 3.1,
4.2(c), and 5.1 of the Agreement on Safeguards.
(j) The resolutions and reports made public concerning the preliminary and final
determinations do not contain the reasoned and adequate findings and conclusions on
all issues of fact and law supporting the impos ition of the measures in question. This
omission is inconsistent with Articles 3.1 and 4.2(c) of the Agreement on Safeguards.
(k) Finally, the Dominican Republic failed to provide the Members having a substantial
interest as exporters of the products con cerned adequate opportunity for consultations
prior to the adoption of the definitive measure. Nor did the Dominican Republic seek
to agree on any adequate means of trade co mpensation for the adverse effects of the
measures on the trade of other Members. This omission is inconsistent with
Articles 8.1 and 12.3 of the Agreement on Safeguards and Article XIX:2 of the
GATT 1994.
 In any case, Honduras considers that:

(l) The measures at issue are inconsistent with Article I:1 of the GATT 1994 in that they
are measures that are not applied to pr oducts originating in or consigned from
particular origins, and this constitutes an advantage that has not been accorded
immediately and unconditionally to other WTO Members.
(m) Moreover, the measures at issue are duties and charges other than ordinary customs
duties that are contrary to Article II:1(a) and the second sentence of Article II:1(b) of
the GATT 1994.

 In view of the foregoing, Honduras requests th e Dispute Settlement Body to establish a panel
with the standard terms of reference as set out in Article 7.1 of the DSU to examine this matter and
the above-mentioned claims.

 In view of the 18-month period of validity of the definitive safeguard measure and to ensure
that the dispute settlement system provides an eff ective solution to this di spute, Honduras hopes that
the Panel will issue the final report to the parties as soon as possible, and in any case not later than the
period of six months from the date that the com position and terms of refere nce of the Panel were
agreed upon, as stipulated in Article 12.8 of the DSU.

ANNEX G-4

REQUEST FOR THE ESTABLISHMENT OF A PANEL BY EL SALVADOR

6 January 2011

(11-0014)
 Original: Spanish

Request for the Establishment of a Panel by El Salvador

 The following communication, dated 20 Decemb er 2010, from the delegation of El Salvador
to the Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 19 October 2010, El Salvador requested consultations with the Dominican Republic
pursuant to Article 4 of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994),
and Article 14 of the Agreement on Safeguards co ncerning the provisional and definitive safeguard
measures imposed by the Dominican Republic on impor ts of polypropylene bags and tubular fabric
and the investigation that led to the imposition of those measures.

 El Salvador and the Dominican Republic held consultations on 16 and 17 November 2010.
Unfortunately, these consultations failed to settle the di spute. Accordingly, pursuant to Article 6 of
the DSU and Article 14 of the Agreement on Safeguards, El Salvador requests that at its next meeting,
scheduled for 25 January 2011, the Dispute Settlement Body establish a panel with the standard terms
of reference as set out in Article 7.1 of the DSU to examine this matter and the claims set forth below.

A. B
ACKGROUND AND MEASURES AT ISSUE
 The measures at issue were imposed pursuant to an investigation conducted by the Regulatory
Commission on Unfair Trade Practices and Safe guard Measures of the Dominican Republic
(hereinafter "the Commission").

1. Initiation of the safeguard investigation
 On 15 December 2009, at the request of the company FERSAN S.A. (hereinafter
"FERSAN"), the Commission declared the initiation of an investigation with a view to the application
of safeguard measures on imports from all origins of polypropylene bags and tubular fabric classified
under subheadings 5407.20.20, 6305.33.10 and 6305.33.90 of the Tariff of the Dominican Republic
(hereinafter "the initiating resolution").
1 On 17 December 2009, the Commission published a notice
of initiation of an investigation.2

2. Preliminary determination
 On 16 March 2010, the Commission decided to impose a provisional safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic. It was also decided to exclude from the
application of the measure imports from Mexi co, Panama, Colombia and Indonesia pursuant to
Article 9.1 of the Agreement on Safeguards. 3 On 25 March 2010, the Commission published a notice
of application of provisional measures on impor ts of polypropylene bags and tubular fabric. 4 T h e
duration of the provisional safeguard measure was 200 days.

3. Final determination
 On 5 October 2010, the Commission decided to impose a definitive safeguard of 38 per cent
on imports of polypropylene bags and tubular fa bric classified under subheadings 5407.20.20 and
6305.33.90 of the Tariff of the Dominican Republic.
5 The Commission then issued a notice of
application of the definitive measures on impor ts of polypropylene bags and tubular fabric. 6 In that
notice and in the final resolution, the Commission pointed out that pursuant to Article 9.1 of the
Agreement on Safeguards, the definitive safeguard measure would not apply to imports from Mexico,
Panama, Colombia and Indonesia. The measure is being applied for 18 months starting on
18 October 2010.

 Thus, for El Salvador, the measures at issue c over all of the resolutions, technical reports and
notices mentioned above as regards the actions and omissions of the authorities of the
Dominican Republic during the investigation and im position of the safeguard measures, including the
methodology, calculations, comparisons, determinations, procedures or general practices.

1 Commission Resolution CDC-RD-SG-046-2009 of 15 December 2009; initial technical report of the
Commission dated 20 November 2009.
2 Notice, general safeguard investigation concerning textiles of man-made filament yarn and bags of
polyethylene and polypropylene, dated 15 December 2009.
3 Resolution CDC-RD-SG-061-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 16 March 2010 ("Preliminary Resolution"). Addendum
to Resolution CDC-RD-SG-061-2010 dated 16 March 2010 deciding on the application of the provisional
measures requested by Fertilizantes Sant o Domingo, C. Por A. (FERSAN) in the Polypropylene Bags and
Tubular Fabric case, dated 30 March 2010; Preliminary Technical Report of the Commission (without date).
4 Notice, general safeguard investigation concer ning tubular fabric and polypropylene bags,
25 March 2010.
5 Resolution CDC-RD-SG-089-2010 of the Regulatory Commission on Unfair Trade Practices and
Safeguard Measures of the Dominican Republic, dated 5 October 2010 ("Final Resolution"); Final Technical
Report of the Commission, dated 13 July 2010.
6 Notice, general safeguard investigation concerning tubular fabric and polypropylene bags, dated
6 October 2010.

B. L
EGAL BASIS FOR THE COMPLAINT
 El Salvador notes that according to Article 11.1(a) of the Agreement on Safeguards, a
Member shall not take or seek a safeguard action unless such action conforms with the provisions of
Article XIX of the GATT 1994 applied in accordance with the Agreement on Safeguards. In this

(a) The Commission's preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with resp ect to the various relevant factual and
legal aspects of the determin ations relating to the produc t under investigation, the
domestic like product, and the domestic industr y, and this affects the determinations
of increased imports, serious injury a nd causality that stem from those prior
determinations. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a),
4.1(c), 4.2(a), 4.2(b), 4.2(c) and 6 of the Agreement on Safeguards, and
Article XIX:1(a) of the GATT 1994.
(b) The preliminary and final determinations do not contain reasoned and adequate
findings and conclusions regarding the a lleged unforeseen developments and to
explain how those developments resulted in increased imports of the specific products
covered by the safeguard measure. These omissions are inconsistent with
Articles 3.1, 4.2(a), 4.2(b), 4.2(c), 6 and 11.1(a) of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994.
(c) Moreover, the preliminary and final dete rminations do not contain reasoned and
adequate findings and conclusions with respect to the alleged effect of the obligations
incurred under the GATT 1994, and how that effect would have resulted in increased
imports of the specific products covered by the safeguard measure. These omissions
are inconsistent with Articles 3.1, 4.2( a), 4.2(b), 4.2(c), 6 and 11.1(a) of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(d) Nor do the preliminary and final determin ations contain reasoned and adequate
findings and conclusions with respect to the alleged increase in imports of the specific
products under investigation, in absolute terms or relative to domestic production.
These omissions are contrary to Articles 2.1, 3.1, 4.2(a), 4.2(b), 4.2(c), and 6 of the
Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.
(e) Furthermore, although the state of the domes tic industry was found to be favourable,
the preliminary and final determinations do not contain reasoned and adequate
findings and conclusions as to the existence of the alleged serious injury, understood
as significant overall impairment of the domestic industry. Nor does the preliminary
determination contain any reasoned and ad equate findings and conclusions with
regard to the critical circumstances to justif y the provisional measure, or with regard
to all of the factors that are required to be examined for the determination of serious
injury. These omissions are inconsistent with Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(f) Nor, at the same time, do the preliminary and final determinations contain reasoned
and adequate findings and c onclusions regarding the causal link between the alleged

increase in imports and the serious injury to the domestic industry. In particular,
these determinations do not contain the anal ysis substantiating the causal relationship
between the alleged increased imports and the alleged serious injury to the domestic
injury. Nor is it explained how the injury to the domestic industry caused by factors
other than imports was not attributed to the imports of the products under
investigation. These omissions are contrary to Articles 2.1, 3.1, 4.1(a), 4.2(a), 4.2(b),
4.2(c) and 6 of the Agreement on Safe guards and Article XIX:1(a) of the
GATT 1994.
(g) The measures at issue do not exempt all of the developing countries whose share of
imports does not exceed 3 per cent. More over, the required parallelism between the
substantive evaluation of the determinations of increased imports, serious injury and
causal link on the one hand, and the coverage of the measures at issue as regards
origin on the other, was not respected. These omissions are inconsistent with Articles
2.1, 2.2, 4.2(a), 4.2(b), 4.2(c), 5.1, 6 and 9.1 of the Agreement on Safeguards, and
Article XIX:1(a) of the GATT 1994.
(h) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the reasons wh y certain information was considered to
be confidential without requiring non-confidential summaries or why that information
could not be summarized in a non-confidential manner. These omissions are contrary
to Articles 3.1 and 3.2 of the Agreement on Safeguards.
(i) The preliminary and final determinations do not contain any reasoned and adequate
findings and conclusions as to the need for the safeguard measure to facilitate
adjustment of the domestic industry. This omission is inconsistent with Articles 3.1,
4.2(c), and 5.1 of the Agreement on Safeguards.
(j) The resolutions and reports made public concerning the preliminary and final
determinations do not contain the reasoned and adequate findings and conclusions on
all issues of fact and law supporting the impos ition of the measures in question. This
omission is inconsistent with Articles 3.1 and 4.2(c) of the Agreement on Safeguards.
(k) Finally, the Dominican Republic failed to provide the Members having a substantial
interest as exporters of the products con cerned adequate opportunity for consultations
prior to the adoption of the definitive measure. Nor did the Dominican Republic seek
to agree on any adequate means of trade co mpensation for the adverse effects of the
measures on the trade of other Members. This omission is inconsistent with
Articles 8.1 and 12.3 of the Agreement on Safeguards and Article XIX:2 of the
GATT 1994.
 In any case, El Salvador considers that:

(l) The measures at issue are inconsistent with Article I:1 of the GATT 1994 in that they
are measures that are not applied to pr oducts originating in or consigned from
particular origins, and this constitutes an advantage that has not been accorded
immediately and unconditionally to other WTO Members.

(m) Moreover, the measures at issue are duties and charges other than ordinary customs
duties that are contrary to Article II:1(a) and the second sentence of Article II:1(b) of
the GATT 1994.
 In view of the foregoing, El Salvador requ ests the Dispute Settlement Body to establish a
panel with the standard terms of reference as set out in Article 7.1 of the DSU to examine this matter
and the above-mentioned claims.

 In view of the 18-month period of validity of the definitive safeguard measure and to ensure
that the dispute settlement system provides an effective solution to this dispute, El Salvador hopes that
the Panel will issue the final report to the parties as soon as possible, and in any case not later than the
period of six months from the date that the com position and terms of refere nce of the Panel were
agreed upon, as stipulated in Article 12.8 of the DSU.

ANNEX H

COMMUNICATION FROM THE PANEL

Contents Page
H Communication from the Panel in response to the request by the
Dominican Republic for a preliminary ruling (12 May 2011)
H-2

ANNEX H

COMMUNICATION FROM THE PANEL IN RESPONSE TO THE REQUEST BY
THE DOMINICAN REPUBLIC FOR A PRELIMINARY RULING

(12 May 2011)

 On 18 April 2011, the Dominican Republic, as the responding party in the dispute, requested
the Panel to issue a preliminary ruling determin ing that GATT Article XIX and the Agreement on
Safeguards were not applicable to the present disput e and that this dispute was therefore devoid of
purpose. The Dominican Republic also requested the Panel to suspend the present proceedings until it
had issued its preliminary ruling and to postpone the deadlines provided for in the timetable, including
the deadline for the Dominican Republic to present its first written submission.

 On 21 April 2011, the Panel invited the comp laining parties to respond in writing to the
Dominican Republic's request and informed the parties that, for the time being, the deadlines provided
for in the timetable would be maintained, incl uding those for the Dominican Republic and the
third parties to present their written submissions. On 21 April and 3 May 2011, the complaining
parties submitted their response to the Dominican Republic's request for a preliminary ruling.

 Having considered the written submissions of the Dominican Republic and the complaining
parties, the Panel considers it inappropriate to make a preliminary ruling on whether
GATT Article XIX and the Agreement on Safeguards are applicable to the present dispute. The Panel
thus considers it inappropriate to suspend the pro ceedings and postpone the deadlines provided for in
the timetable.

 The Panel also notes the argument put forward by the Dominican Republic concerning the
Panel's alleged lack of jurisdiction to rule in a dispute that relates to the violation of concessions
granted outside the WTO sphere. The Panel notes the response of the complainants in this respect.
Since the Dominican Republic did not request a preliminary ruling on this argument, the Panel
considers it unnecessary to refer to it at the present time.

 The Panel invites the parties to develop their arguments on the issues raised by the
Dominican Republic. It will also consider with inte rest any arguments put forward by third parties in
relation to these issues. The Panel reserves the right to submit questions to the parties and
third parties on the issues raised by the Dominican Republic.

 The Panel will rule on the issues raised by the Dominican Republic in its final report.