EUROPEAN COMMUNITIES – DEFINITIVE SAFEGUARD MEASURE ON SALMON
Document: Request for Consultations by Chile
Date: 14 February 2005
Document codes: WT/DS326/1; G/L/728; G/SG/D32/1
Complainant: Chile
Respondent: EU
Dispute stage: Consultation
Agreements cited: Art. XIX:1  GATT 1994Art. 2, 4, 5  Safeguards

EUROPEAN COMMUNITIES – DEFINITIVE SAFEGUARD MEASURE
ON SALMON

Request for Consultations by Chile

 The following communication, dated 8 February 2005, from the delegation of Chile to the
delegation of the European Communities and to the Chairperson of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.

 I have been instructed by my Government to contact you in order to request consultations
with the European Communities pursuant to Artic le XXII:1 of the GATT 1994, Article 4 of the
Understanding on Rules and Procedur es Governing the Settlement of Disputes (DSU) and Article 14
of the Agreement on Safeguards. This request is related to the definitive safeguard measure applied
by the European Communities to imports of farmed salmon, whether or not filleted, fresh, chilled or
frozen (CN ex 0302 12 00, ex 0303 11 00, ex 0303 19 00, ex 0303 222 00, ex 0304 10 13 and
ex 0304 20 13).

 On 5 February 2005, Commission Regulation (EC) No. 206/2005 of 4 February 2005
imposing a definitive safeguard measure against imports of farmed salmon was published in the
Official Journal of the European Union . The regulation took effect on 6 February 2005 and will
remain in force until 13 August 2008. The measur e consists of (a) a system of tariff quotas
established on the basis of traditional volumes of ex ports to the EU, beyond which an additional duty,
specified in the regulation, will be applied to the pr oducts in question; (b) a minimum import price,
which applies to imports both within and beyond the tariff quota; and (c) a deposit payable by
importers as a security for payment of the actual import price.

 On 10 January 2005, the European Communities notified to the WTO a finding of serious
injury and a decision to apply a definitive saf eguard measure (8/EEC/3, G/SG/N/10/EEC/3
and G/SG/N/11/EEC/3/Suppl.1). Pursuant to Ar ticle 12.3 of the Agreement on Safeguards, Chile
requested consultations, which were held in Brussels on 20 January last.

 Chile considers this definitive safeguard measu re to be inconsistent with the WTO rules for
the reasons set out below, among others. The meas ure is having serious adverse effects on Chile's
exports of the product in question to the European market.

• The product to which the measure applies and the like and directly competitive
products were not correctly defined, fro zen farmed salmon being a different product
from the fresh salmon produced by the EC industry.

• There were no "unforeseen developments" as a result of which imports increased, as
required by Article XIX of the GATT 1994.

• There was no increase in imports that w as sufficiently recent, sudden, sharp and
significant, as required by Article XIX of the GATT 1994 and Article 2.1 of the
Agreement on Safeguards, and that occu rred under such conditions as to cause or
threaten to cause serious injury to the domestic industry. Nor was there an increase in
imports relative to domestic production.

• There is no serious injury or threat of injury to the domestic industry and the
determination of injury carried out by the investigation authority was based on
allegations by the domestic industry and on conjecture and remote possibility. The
investigating authority did not evaluate or c onsider all relevant factors of an objective
and quantifiable nature having a bearing on the situation of the domestic industry. In
fact, the factors evaluated do not show injury to the industry. Furthermore, it is not
clear that the injury analysis covered the whole industry, since the authority
acknowledges that some factors were analy sed with respect only to the cooperating
companies. What is more, the indicators th at did cover the whole industry show that
the industry has not suffered injury. Under "other factors", in which the cooperating
companies were included, the financial data relate to the companies' production as a
whole and not to salmon production specifically. Indeed, the Commission's report
recommending the measure notes that this information is "less meaningful". The
foregoing is inconsistent with Article 4.2(a) of the Agreement on Safeguards.

• In the absence of injury or th reat of injury attributable to the increase in imports, the
safeguard measure is inconsistent with Article 4.2(b) of the Agreement on
Safeguards. And in any event, any injury or threat of injury is due to other factors,
which the investigation authority did not analyse (such as the absence of economies
of scale among the Scottish and Irish producer s and exchange rate fluctuations).
Instead, it attributed the injury to the increase in imports.

• Lastly, the safeguard measure on imports of salmon is applied beyond the extent
necessary to prevent or remedy serious inju ry and to facilitate adjustment, in breach
of Article 5 of the Agreement on Safeguards.

In the light of the above considerations, Ch ile considers the definitive safeguard measure
imposed on imports of farmed salmon, whether or not filleted, fresh, chilled or frozen to be
inconsistent with various WTO provisions, includ ing Articles 2, 4 and 5 of the Agreement on
Safeguards and Article XIX:1 of the GATT 1994.

I await your reply to this request for consulta tions in order to establish a mutually convenient
date for holding them.