DOMINICAN REPUBLIC - SAFEGUARD MEASURES ON IMPORTS OF POLYPROPYLENE BAGS AND TUBULAR FABRIC
Document: Request for the Establishment of a Panel by Costa Rica
Date: 22 December 2010
Document codes: WT/DS415/7
Complainant: Costa Rica
Respondent: Dominican
Third parties: China, Colombia, El Salvador, EU, Guatemala, Honduras, Nicaragua, Panama, Turkey, U.S.
Dispute stage: Panel
Agreements cited: Art. I:1, XIX:1, XIX:2, II: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), 5.1, 6, 8.1, 9.1, 11.1(a), 12.3  Safeguards

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

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 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.

 Costa Rica 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, 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 comp any Fersan S.A. (hereinafter "Fersan"), the
Commission declared the initiation of an investigati on with a view to the application of safeguard
measures on imports from all origins of polyprop ylene 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

1 Commission Resolution CDC-RD-SG-046-2009 of 15 Dece mber 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.

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 an d omissions of the authorities of the Dominican
Republic during the investigation and impositi on of the safeguard measures, including the
methodology, calculations, comparisons, determinations, procedures or general practices.

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 Agreem ent on Safeguards, and Article XIX:1(a) of
the GATT 1994.

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) 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 comp osition and terms of reference of the panel were
agreed upon, as stipulated in Article 12.8 of the DSU.