DOMINICAN REPUBLIC - SAFEGUARD MEASURES ON IMPORTS OF POLYPROPYLENE BAGS AND TUBULAR FABRIC
Document: Final Report of the Panel
Date: 31 January 2012
Document codes: 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

I. INTRODUCTION
A. R
EQUEST FOR CONSULTATIONS
1.1 On 15 October 2010 Costa Rica and Guatemala, on 18 October Honduras and on 19 October
El Salvador each separately requested consulta tions with the Dominican Republic pursuant to
Article 4 of the Understanding on Rules 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, concerning the provisiona l and final safeguard measures imposed by the
Dominican Republic on imports of polypropylene bags and tubular fabric and the investigation that
led to the imposition of those measures.1
1.2 On 22 October 2010, Panama requested, by separ ate communications, to be joined in the
consultations requested by Costa Rica, Guat emala, Honduras and El Salvador with the
Dominican Republic.2 On 25 October Guatemala, and on 26 October Costa Rica, Honduras and
El Salvador, also each requested to be joined in the consultations requested by each of the other
complainants with the Dominican Republic. 3 The Dominican Republic accepted the requests to join
consultations submitted by Costa Rica, El Salvador, Guatemala, Honduras and Panama.4
1.3 Consultations were held on 16 and 17 November 2010, but the parties failed to reach a
mutually satisfactory solution. On 15 December Costa Rica and Guatemala and on 20 December
Honduras and El Salvador (the complainants) in separate communications requested the Dispute
Settlement Body (DSU) to establish a panel pursuant to Article 6 of the DSU and Article 14 of the
Agreement on Safeguards.
5
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL
1.4 At its meeting on 7 February 2011, the DSB established a single panel pursuant to the
requests of Costa Rica, El Salvador, Guatemala a nd Honduras, in accordance with Article 6 of the
DSU. The Panel's terms of reference are the following:
To examine, in the light of the relevant pr ovisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Costa Rica in
document WT/DS415/7, by El Salvador in document WT/DS418/7, by Guatemala in
document WT/DS416/7 and by Honduras in document WT/DS417/7, and to make

1 Requests for consultations submitted respectiv ely by Costa Rica, Guatemala, Honduras and
El Salvador, documents WT/DS415/1, WT/DS416/1, WT/DS417/1 and WT/DS418/1 (all of 21 October 2010)
(request for consultations).
2 Requests to join consultations, WT/DS415/2, WT/DS416/2, WT/DS417/2 and WT/DS418/2 (all of
27 October 2010).
3 Requests to join consultations, documents WT/DS415/5, WT/DS417/5 and WT/DS418/5;
WT/DS416/3, WT/DS417/3 and WT/DS418/3; WT/DS415/4, WT/DS416/5 and WT/DS418/4; and
WT/DS415/3, WT/DS416/4 and WT/DS417/4 (all of 29 October 2010).
4 Acceptance by the Dominican Republic of the requests to join consultations,
documents WT/DS415/6, WT/DS416/6, WT/DS417/6 and WT/DS418/6 (all of 5 November 2010).
5 Requests for the establishment of a panel, documents WT/DS415/7 (22 December 2010),
WT/DS416/7 (22 December 2010), WT/DS417/7 (6 January 2011) and WT/DS4 18/7 (6 January 2011) (request
for the establishment of the panel).
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

such findings as will assist the DSB in ma king the recommendations or in giving the
rulings provided for in those agreements.
6
1.5 Pursuant to the complainants' joint request and in accordance with Article 8.7 of the DSU, on
11 March 2011 the Director-General composed the Panel as follows:
 Chairman: Mr Pierre Pettigrew

 Members: Ms Enie Neri de Ross
 Ms Gisela Bolívar

C. P
ARTICIPATION OF THIRD PARTIES
1.6 China, Colombia, Costa Rica (concerning disputes WT/DS416, WT/DS417 and WT/DS418),
El Salvador (concerning disputes WT/DS415, WT/DS416 and WT/DS417), the European Union,
Guatemala (concerning disputes WT/DS415, WT/DS417 and WT/DS418), Honduras (concerning
disputes WT/DS415, WT/DS416 and WT/DS418), Nicara gua, Panama, Turkey and the United States
reserved the right to participate as third parties in the panel proceedings.
1.7 On 14 March 2011 Colombia requested the Panel to enhance its third party rights so as also to
enable it to: have access to the written submissi ons, written versions of the oral submissions and
evidence submitted at the second substantive meeting; attend the second substantive meeting of the
Panel with the parties, and to present oral arguments and ask questions at that meeting; and receive
copies of the summary of the arguments in the factual part of the report. Having heard the opinions of
other third parties (the European Union, Nicaragua, Panama and the United States) and the parties, on
5 April the Panel rejected Colombia's request a nd said that it would explain the reasons for its
decision in its report.
1.8 In its decision, the Panel took into consider ation the following aspects: (i) Colombia was
expressly excluded by the Dominican Republic fr om the application of the impugned measures,
together with other developing country Members; (i i) in the Panel's view, Colombia did not make a
case for the existence of any factual circumstance that would place it in a particular position with
respect to the defendant compared with other third pa rties; (iii) in the Panel's view, Colombia also
failed to make a case for the existence of reasons why its rights as a third party under the DSU and the
working procedures adopted by the Panel would not be sufficient to enable it to protect its interests in
the present dispute; (iv) the granting of additional rights could have led in the present case to delays
in the timetable or the imposition of additional bu rdens on the parties to the dispute; (v) when
consulted, none of the parties to the dispute suppor ted Colombia's request for additional rights beyond
those set out in the DSU and working procedures adopted by the Panel; (vi) none of the third parties
expressed support for Colombia's request, other than to ask that if the Panel were to grant additional
rights they should be extended to all third parties; and (vii) the Panel considered it important to avoid
the risk that the granting of additional rights to one or more third parties should unduly blur the
distinction established in the DSU between the rights of the parties and the rights of third parties.7

6 Constitution of the Panel, document WT/DS415 /8, WT/DS416/8, WT/DS417/8 and WT/DS418/8
(14 March 2011).
7 The Panel took into account the earlier decisions of other panels in EC – Export Subsidies on Sugar
(Australia), EC – Export Subsidies on Sugar (Brazil), EC – Export Subsidies on Sugar (Thailand), US – Upland
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

1.9 In accordance with the timetable adopted by the Panel, on 13 and 16 May 2011 it received
written submissions from the following third partie s: Colombia, the European Union, Nicaragua,
Panama, Turkey and the United States. On 16 June the Panel met with the third parties in a closed
session of the substantive meeting with the parties. At that meeting, Colombia, the European Union,
Panama, Turkey and the United States made oral presentations. The Panel addressed questions to the
third parties and received replies from Colombia, th e European Union, Turkey and the United States
on 30 June.
D. P
ANEL PROCEEDINGS
1.10 After consulting the parties, on 25 March 2011 the Panel adopted the working procedures and
timetable for this dispute. At the request of the Dominican Republic, on 5 April the Panel adopted
additional working procedures relating to the prot ection of business confidential information (BCI)
that might be submitted during the procedure. At the request of the parties, the Panel decided that its
proceedings would take place in the Spanish language; third parties had the option to present their
submissions and arguments in any of the working languages of the World Trade Organization (WTO).
1.11 On 20 April 2011 the Dominican Republic requested the Panel to issue a preliminary ruling to
the effect that Article XIX of the GATT 1994 and the Agreement on Safeguards were not applicable
to the present dispute and that the dispute was therefore devoid of purpose. In the same
communication the Dominican Republic requested th e Panel to suspend its 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. Having heard the opinion
of the complainants, on 12 May the Panel informed the parties that it did not consider it appropriate to
issue a preliminary ruling on whether GATT Artic le XIX and the Agreem ent on Safeguards were
applicable to the present dispute. The Panel did not consider it appropriate to suspend the proceedings
and postpone the deadline provided for in the timetabl e. The Panel stated that it would rule on the
issues raised by the Dominican Republic in its fi nal report, and therefore invited the parties and
third parties to develop their arguments on the issues raised by the Dominican Republic.
1.12 In accordance with the timetable adopted by the Panel, the parties presented their first written
submissions on 1 April and 3 May 2011, respectively. The parties presented their second written
submissions on 7 July. The first substantive meetin g of the Panel with the parties was held on 15 and
16 June; the second substantive meeting took place on 26 and 27 July. The Panel put questions to the
parties and received replies from them on 30 J une and 8 August, as well as comments on 15 August
from each of the parties to the replies submitted by the other party. The complainants in turn put
questions, through the Panel, to the Dominican Republic to which the latter replied.
1.13 The Panel submitted the descriptive (factual and ar gument sections) of its final report to the
parties on 19 August 2011. On that same date th e Panel informed Colombia, the European Union,
Nicaragua, Panama, Turkey and the United States th at the descriptive part would contain summaries
of the arguments of each of them. On 31 August and 2 September the Dominican Republic and the
complaining parties, respectively, submitted comme nts and asked for some aspects of the descriptive
part of the report to be revised and clarified.
1.14 The Panel issued its interim report to the pa rties on 19 October 2011. On 2 November the
complainants and the Dominican Republic submitte d written comments and requested that certain

Cotton, EC – Tariff Preferences, US -1916 Act (EC) , US -1916 Act (Japan), EC – Bananas III and US – Large
Civil Aircraft (2nd complaint).
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

aspects of the interim report be revised. Neither of the parties requested a meeting with the Panel on
the issues identified in their comments. On 16 November the parties submitted written comments on
each other's comments.
1.15 The Panel issued its final report to the parties on 23 November 2011.
II. FACTUAL ASPECTS
A. A
PPLICABLE DOMESTIC LEGISLATION IN THE DOMINICAN REPUBLIC
1. Domestic legislation on safeguards
2.1 The Dominican Republic's domestic legislation on safeguards is contained in Law No. 1-02
on unfair trade practices and safeguard measures (Law 1-02)8, and in the Implementing Regulations of
Law No. 1-02 on unfair trade practices and safeguard measures ( Regulations of Law 1-02 ).9 These
instruments constitute the implementation of the Safeguards Agreement and of Article XIX of the
GATT 1994 at national level.10
2.2 In accordance with Law 1-02, the Commission for the Regulation of Unfair Trade Practices
and Safeguard Measures (Commission) is the co mpetent national authority responsible for
investigations and for determining th e application of safeguard measures. 11 The Commission's
Investigation Department (DEI) submits the results of its investigations, together with proposals and
recommendations, to the Commission, and is responsible for the registering, classifying, notifications,
hearings, checking documentation, archiving and controlling of procedures used in each case.12
2.3 Law 1-02 defines "safeguard measures" as measures designed to regulate imports on a
temporary basis, and their objective is to prevent or remedy serious injury to the domestic industry
and to facilitate adjustment for domestic producers. 13 According to Law 1-02, "safeguard measures"
shall be applied when a product, irrespective of its origin, is being imported in such increased
quantities, absolute or relative to domestic produc tion, and under such conditions as to cause or
threaten to cause injury to a domestic industry th at produces like or directly competitive products.
Measures are applied to the product irrespective of its origin. 14 According to the Regulations of
Law 1-02, the term "safeguards", both in the Regulations of Law 1-02 and in Law 1-02, shall have the
same meaning as the term "safeguards" in the WTO Agreement on Safeguards.15
2.4 With respect to the form taken by safe guard measures in the Dominican Republic, Law 1-02
provides that they may consist of tariff increases, tariff quotas or import ceilings.16
2.5 Law 1-02 , establishes the rules governing the ap plication of safeguard measures and
procedures for notification and c onsultations relating to the WTO. 17 The obligation of and procedure

8 Exhibit RDO-11.
9 Exhibit RDO-26.
10 Dominican Republic, reply to Panel questions Nos. 31 and 32.
11 Law 1-02, Article 7, Exhibit RDO-11.
12 Article 4, Regulations of Law 1-02, Exhibit RDO-11.
13 Article 57 of Law 1-02, Exhibit RDO-11.
14 Article 58 of Law 1-02, Exhibit RDO-11.
15 Article 18, subsection xxviii, of the Regulations of Law 1-02, Exhibit RDO-26.
16 Article 73 of Law 1-02, Exhibit RDO-11.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

for notification to the WTO Committee on Safeguards are also set out in the Regulations of
Law 1-02.
18
2.6 Law 1-02 and the Regulations of Law 1-02 provide for the possibility of excluding products
originating in a developing country from the application of safeguard measures where its share of total
imports of the investigated product does not exceed 3 per cent of imports into the
Dominican Republic, provided that the developing countries whose individual shares of imports
account for less than 3 per cent collectively represent not more than 9 per cent of total imports of the
product in question.
19
2. Domestic legislation on tariffs
2.7 The Dominican Republic's domestic legislation on tariffs is contained in Law No. 146-00 on
tariff reform ( Law 146-00 ).20 Law 146-00 amends Law 14-93 of 26 August 1993 adopting the
customs tariff of the Dominican Republic. The description and coding of goods are set out in Annex I
of Law 146-00 . The structure is based on the Nomenclatu re of the Single Spanish Version of the
Commodity Description and Coding System.21 Ad valorem duties payable on goods imported into the
Dominican Republic are set out in Annex I of Law 140-00 .22 In accordance with that Annex, the
most-favoured-nation tariff (MFN tariff) appli cable to tubular fabric, classified under
tariff line 5407.20.20, is 14 per cent ad valorem , while the MFN tariff applicable to polypropylene
bags, classified under tariff line 6305.33.90, is 20 per cent ad valorem.23
2.8 In accordance with Law 146-00, the Tariff Studies Commission of the Ministry of Finance is
responsible for recommending appropriate adjustment s to the duties fixed in the Law to the executive
power. The executive power subsequently sends the relevant recommendations to the National
Congress, which ultimately makes the chang es it considers appropriate in the duties. 24 Law 146-00
provides that "in no case shall taxes be levied on foreign trade by administrative means".25
B. IMPUGNED MEASURES AND PRODUCTS AT ISSUE
2.9 The present dispute concerns the provisional and definitive safeguard measures imposed by
the Dominican Republic on imports of polypropylene bags and tubular fabric and the investigation
that led to the imposition of those measures. More specifically, the impugned measures comprise:
(a) The provisional safeguard adopte d through Commission Resolution
CDC-RD-SG-061-2010 of 16 March 2010 (Preliminary Resolution)26;

17 Title IV (Articles 57 to 81) of Law 1-02, Exhibit RDO-11. See also, Dominican Republic, reply to
Panel questions Nos. 31 and 32.
18 Part IV, Chapter II, of the Regulations of Law 1-02, Exhibit RDO-26.
19 Article 72 of Law 1-02 , Exhibit RDO-11; Article 272 of the Regulations of Law 1-02 ,
Exhibit RDO-26.
20 Law 146-00, Exhibit CEGH-22.
21 Article 1 of Law 146-00, Exhibit CEGH-22.
22 Article 2 of Law 146-00, Exhibit CEGH-22.
23 Fragments of Law 146-00 adopting the Customs Tariff of the Dominican Republic,
Exhibit CEGH-27.
24 Article 5 of Law 146-00, Exhibit CEGH-22.
25 Article 7 of Law 146-00, Exhibit CEGH-22.
26 Preliminary Resolution, Exhibit CEGH-5.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

(b) the definitive safeguard, adopted through Commission Resolution
CDC-RD-SG-089-2010 of 5 October 2010 (Definitive Resolution)
27; and
(c) the investigation carried out by the Commission and the DEI.
2.10 The provisional and definitive measures apply to imports of the following products:
(a) Tubular fabric classified under tariff line 5407.20.20 of the Customs Tariff of the
Dominican Republic, and therein described as "woven fabric of synthetic
polypropylene yarn", which is used for the manufacture of bags; and
(b) polypropylene bags, classified under tariff line 6305.33.90 of the Customs Tariff of
the Dominican Republic, and described there as "bags or sacks for packaging", which
are used for the packaging of food, agro-industrial and industrial products.
2.11 The Dominican Republic has bound the tariffs for the products corresponding to each of these
tariff lines in the WTO at the level of 40 per cent ad valorem .
28 The impugned measures are not
covered by any entry for "other duties or charges" made by the Dominican Republic in column 6 of its
WTO schedule of concessions.29
C. PROCEDURE CARRIED OUT BY THE COMPETENT AUTHORITY
1. Initiation of the investigation
2.12 On 20 July 2009 the company Fertilizantes Sant o Domingo, C. por A. (FERSAN) requested
the Commission to open an investigation for the impos ition of a definitive safeguard of 74.3 per cent
for a period of three years and, on an emergenc y basis as a precautionary measure, the imposition of a
provisional safeguard of 40 per cent on imports of poly propylene bags and tubular fabric under tariff
lines 6305.33.10, 6305.33.90 and 5407.20.20 of the General Customs Tariff of the
Dominican Republic.
30
2.13 On the basis of the DEI's Initial Technical Re port of 20 November 2009 (Initial Technical
Report)31, on 15 December the Commission issued Resolution CDC-RD-SG-046-2009 announcing
that it was initiating an investigation for the a pplication of safeguard measures to imports of
polypropylene bags and tubular fabric under tariff lines 6305.33.10, 6305.33.90 and 5407.20.20 of the
General Customs Tariff of the Dominican Republic, coming from all origins (Initial Resolution). On
17 December, the Commission published a notice of initiation of an investigation.32

27 Definitive Resolution, Exhibit CEGH-9.
28 Dominican Republic, request for a preliminary ruling, paragraph 42.
29 Dominican Republic, reply to Panel question No. 183.
30 Request for the initiation of an investigation submitted by FERSAN and reply to the application form
for producers, WTO General Safeguard Investigation, Exhibit CEGH-12, p. 1.
31 Initial report, Exhibit CEGH-3.
32 Notice, General Safeguard Investigation Concerning Textiles of Synthetic Filament Yarn and Bags
of Polyethylene and Polypropylene (15 December 2009), Exhibit CEGH-4.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

2.14 On 18 December 2009 the Dominican Republic notified the WTO Committee on Safeguards,
pursuant to Article 12.1(a) of the Agreement on Safe guards, that its competent authority had initiated
a safeguards procedure.
33
2.15 The investigation covered the period between the years 2006 to 2009.34
2. Preliminary determination
2.16 On the basis of the Preliminary Technical Repor t issued by the DEI (Preliminary Technical
Report)35, on 16 March 2010 the Commission issued its Preliminary Resolution through which it
decided to continue the investigation a nd impose provisional measures of 38 per cent ad valorem for
200 days on imports of tubular fabric and polypropy lene bags classified under tariff lines 5407.20.20
and 6305.33.90 of the Customs Tariff of the Dominican Republic, while excluding from the
investigation polyethylene bags classified under tariff line 6305.33.10 on the grounds that they were
not manufactured by the domestic producer.
36 In this Preliminary Resolution the Commission
decided, pursuant to Article 9.1 of the Agreemen t on Safeguards, to exclude imports from Colombia,
Indonesia, Mexico and Panama from the applicati on of the provisional safeguard because they were
developing countries which together accounted for 1.21 per cent of the imports under investigation. 37
On 25 March the Commission published the notice of application of the provisional measure
(preliminary public notice).
38
2.17 On 26 March de 2010, pursuant to Articles 6, 9.1, 12.1(b) and 12.1(c) of the Agreement on
Safeguards, the Dominican Republic notified the WTO Committee on Safeguards of the adoption of
the provisional safeguard.39
2.18 On 30 March 2010 the Commission adopted an Addendum to the Preliminary Resolution
specifying that the provisional measure: (i) woul d apply from 1 April to 17 October 2010; and
(ii) would not apply to goods "originating in" (the text of the Preliminary Resolution says "coming
from") Colombia, Indonesia, Mexico and Panama.40
3. Final determination
2.19 On the basis of the DEI's Final Technical Report dated 13 July 2010 (Final Technical
Report)41, on 5 October the Commission issued its Definitive Resolution constituting the final
decision on the investigation for the application of a definitive safeguard measure. Through this
Resolution the Commission definitively adopted a duty of 38 per cent ad valorem on imports of
tubular fabric and polypropylene bags classified under tariff lines 5407.20.20 and 6305.33.90, as from
18 October 2010 until 20 April 2012, subject to a six-monthly reduction timetable. In that Resolution
the Commission decided, in acco rdance with Article 72 of Law 1-02, Article 272.I of the Regulations

33 Notification, document G/SG/N/6/DOM/3 (14 January 2010), Exhibit CEGH-17.
34 Dominican Republic, reply to Panel question No. 173.
35 Preliminary Technical Report, Exhibit CEGH-7.
36 Preliminary Resolution, Exhibit CEGH-5.
37 Preliminary Resolution, Exhibit CEGH-5.
38 Notice, General Safeguard Investigation Concerning Tubular Fabric and Polypropylene
Bags (25 March 2010), Exhibit CEGH-8.
39 Notification, document G/SG/N/7/DOM/1, G/SG /N/8/DOM/1, G/SG/N/11/DOM/1 (6 April 2010),
Exhibit CEGH-18.
40 Addendum to the Preliminary Resolution, Exhibit CEGH-6.
41 Final Technical Report, Exhibit CEGH-10.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

of Law 1-02 , and Article 9.1 of the Agreement on Safegua rds, to exclude imports originating in
Colombia, Indonesia, Mexico and Panama from the a pplication of the definitive safeguard because
they were developing countries which together accounted for 1.21 per cent of the imports under
investigation. According to the Definitive Resolu tion and the additional explanations provided by the
Dominican Republic, the measure would be applied as follows:
42
Date Tariff line Applicable rate Origin
18 Oct 2010
to 18 Apr 2011
5407.20.20 14% Duty applicable to imports from Colombia,
Indonesia, Mexico and Panama
38% Duty applicable to all other origins
6305.33.90 20% Duty applicable to imports from Colombia,
Indonesia, Mexico and Panama
38% Duty applicable to all other origins
19 Apr 2011
to 19 Oct 2011
5407.20.20 14% Duty applicable to imports from Colombia,
Indonesia, Mexico and Panama
28% Duty applicable to all other origins
6305.33.90 20% Duty applicable to imports from Colombia,
Indonesia, Mexico and Panama
28% Duty applicable to all other origins
20 Oct 2011
to 20 Apr 2012
5407.20.20 14% Duty applicable to all origins
6305.33.90 20% Duty applicable to all origins

2.20 As from 21 April 2012, imports of the products in question originating in the member
countries of the Caribbean Common Market (CARICOM) and countries parties to the free trade
agreement between Central America and the Dominican Republic (Central America-
Dominican Republic FTA) and parties to the free trade agreement between the Dominican Republic,
Central America and the United States (DR-CAFTA FTA) would be free of customs duties. In the
case of all other origins, as of that date imports of tubular fabric classified under tariff line 5407.20.20
would be subject to the payment of the MFN tariff equivalent to 14 per cent ad valorem, and imports
of polypropylene bags classified under tariff line 6305.33.90 would be subject to the payment of the
MFN tariff equivalent to 20 per cent ad valorem.
43
2.21 On 6 October 2010 the Commission published the notice of application of the definitive
measure (final public notice).44
2.22 On 8 October 2010, pursuant to Articles 12.4 and 12.1(b) of the Agreement on Safeguards,
the Dominican Republic notified the Definitive Resolution and the adoption of the definitive
safeguard to the WTO Committee on Safeguards.45

42 Definitive Resolution, Exhibit CEGH-9; complainants, reply to Panel questions Nos. 30 and 179;
Dominican Republic, reply to Panel questions Nos. 30 and 179.
43 Definitive Resolution, Exhibit CEGH-9; complainants, reply to Panel questions Nos. 30 and 179;
Dominican Republic, reply to Panel questions Nos. 30 and 179.
44 Notice, General Safeguard Investigation Concerning Tubular Fabric and Polypropylene
Bags (6 October 2010), Exhibit CEGH-11.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

2.23 On 19 April 2011, the Dominican Republic submitted to the Panel a copy of
Resolution CDC-RD-SG-105-2011 of 13 April, in which the Commission indicated that in accordance
with the reduction timetable contained in the Defi nitive Resolution, the safeguard applicable to
imports of tubular fabric and poly propylene bags as of that date and until 19 October 2011 would be
28 per cent ad valorem. Resolution CDC-RD-SG-105-2011 confirms that the next reduction phase
will begin on 20 October 2011 in accordance with the Definitive Resolution.
46
2.24 On 27 October 2011 the Dominican Republic submitted to the Panel a copy of
Resolution CDC-RD-SG-109-2011 of 17 October, through which the Commission decided to
maintain the application of an ad valorem duty of 28 per cent on imports of tubular fabric and
polypropylene bags until 20 April 2012. Resoluti on CDC-RD-SG-109-2011 explains that it is based
on the Commission's faculty to analyse the performance of imports of the products in question and,
prior to each reduction phase in the timetable of progressive liberalization, decide whether the
reduction process should be speeded up or revised.
47 The Dominican Republic explained that,
notwithstanding this revision, the safeguard measure applicable to imports of tubular fabric and
polypropylene bags would expire on 20 April 20 12 and that imports originating in Colombia,
Indonesia, Mexico and Panama would continue to be exempted from the application of the measure. 48
In the light of the revision adopted through R esolution CDC-RD-SG-109-2011, the measure would be
applied as follows:
Date Tariff line Applicable rate Origin
18 Oct 2010 to
18 Apr 2011
5407.20.20
14% Duty applicable to imports from Colombia, Indonesia,
Mexico and Panama
38% Duty applicable to all other origins
6305.33.90
20% Duty applicable to imports from Colombia, Indonesia,
Mexico and Panama
38% Duty applicable to all other origins
19 Apr 2011 to
20 Apr 2012
5407.20.20
14% Duty applicable to imports from Colombia, Indonesia,
Mexico and Panama
28% Duty applicable to all other origins
6305.33.90
20% Duty applicable to imports from Colombia, Indonesia,
Mexico and Panama
28% Duty applicable to all other origins

45 Notification, document G/SG/7/DOM/1/Suppl.1 and G/SG/N/8/DOM/1/Suppl.1 (13 October 2010),
Exhibit CEGH-19. This document was replaced by documents G/SG/N/8/DOM/1/Suppl.2, G/SG/N/10/DOM/1
and G/SG/N/11/DOM/1/Suppl.1 (18 October 2010), Exhibit CEGH-21.
46 Resolution CDC-RD-SG-105-2011 issuing the decision on the six-monthly reduction timetable of
the definitive safeguard established by Resolution No. CDC-RD-SG-089-2010 of 5 October 2010.
47 Resolution CDC-RD-SG-109-2011 issuing the decision on the six-monthly reduction timetable of
the definitive safeguard established by Resolution No. CDC-RD-SG-089-2010 of 5 October 2010.
48 Communication from the Dominican Republic, 1 November 2011.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

III. PARTIES' REQUESTS FOR RULINGS AND RECOMMENDATIONS
A. C
OMPLAINANTS
3.1 The complainants request the Panel to find th at the impugned measures are inconsistent with
the Dominican Republic's obligations under Artic le XIX of the GATT 1994 and the Agreement on
Safeguards.49 More specifically, the complainants claim that:
(a) The domestic industry was defined in a manner that is inconsistent with Articles 3.1,
4.1(c) and 4.2(c) of the Agreement on Safeguards, and therefore the provisional and
definitive measures are inconsistent with Articles 2.1, 4.1(a), 4.1(c), 4.2(a), 4.2(b),
4.2(c), and 6 of the Agreement on Safegua rds (the last-mentioned provision with
respect to the provisional measure) and with Article XIX:1(a) of the GATT 1994;
(b) the preliminary and final determinations do not contain reasoned and adequate
findings regarding unforeseen developments and the effect of the obligations incurred
under the GATT 1994, and are therefore incons istent with Article XIX:1(a) of the
GATT 1994 and with Articles 3.1, last senten ce, 4.2(c) and 11.1(a) of the Agreement
on Safeguards; consequently, the provisional and definitive measures are inconsistent
with Articles 2.1, 4.2, 11.1(a) and 6 of the Agreement on Safeguards (the
last-mentioned provision with respect to the provisional measure) and with
Article XIX:1(a) of the GATT 1994;
(c) the preliminary and definitive determinations with respect to the increase in imports
are inconsistent with Articles 2.1, 3.1, last sentence, 4.2(c) and 6 of the Agreement on
Safeguards (the last-mentioned provision with respect to the provisional measure) and
with Article XIX:1(a) of the GATT 1994, and therefore the provisional and definitive
measures are inconsistent with Articl es 2.1, 4.2 and 6 of the Agreement on
Safeguards (the last-mentioned provision with respect to the provisional measure) and
with Article XIX:1(a) of the GATT 1994;
(d) the preliminary and definitive determinati ons on serious injury to the domestic
industry and critical circumstances (in the case of the provisional measure) are
inconsistent with Articles 2.1, 3.1, last sen tence, 4.1(a), 4.2(a), 4.2(c) and 6 of the
Agreement on Safeguards (the last-menti oned provision with respect of the
provisional measure) and with Article XIX: 1(a) of the GATT 1994, and therefore the
provisional and definitive measures are inconsis tent with Articles 2.1, 3.1, 4.1(a), 4.2
and 6 of the Agreement on Safeguards (the last-mentioned provision with respect to
the provisional measure) and with Article XIX:1(a) of the GATT 1994;
(e) the preliminary and definitive determinati ons with respect to the causal link between
the increase in imports and the serious injury to the domestic industry are inconsistent
with Articles 2.1, 3.1, last sentence, 4.1(a), 4.2(a), 4.2(c) and 6 of the Agreement on
Safeguards (the last-mentioned provision with respect to the provisional measure) and
with Article XIX:1(a) of the GATT 1994, and therefore the provisional and definitive
measures are inconsistent with Articles 2.1, 3.1, last sentence, 4.1(a), 4.2(a), 4.2(b),

49 Complainants, first written submission, paragraph 477; second written submission,
paragraphs 308-309.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

4.2(c), 5.1 and 6 of the Agreement on Safe guards (the last-mentioned provision with
respect to the provisional measure) and with Article XIX:1(a) of the GATT 1994;
(f) the provisional and definitive measures do not comply with the principle of
parallelism and exclude from their application imports that were included in the
preliminary and definitive determinations , and therefore are inconsistent with
Articles 2.1, 2.2, 3.1, 4.2(a), 4.2(b), 4.2( c), 9.1 and 6 of the Agreement on Safeguards
(the last-mentioned provision with respect to the provisional measure); furthermore,
by not excluding all developing parties whose share of imports does not exceed
3 per cent, the provisional and definitive measures are inconsistent with Article 9.1 of
the Agreement on Safeguards; and
(g) by failing to notify the definitive measure in a timely manner, failing to afford an
opportunity for consultations and failing to provide an opportunity to obtain an
adequate means of trade compensation, th e Dominican Republic acted inconsistently
with Article XIX:2 of the GATT 1994 and Artic les 8.1 and 12.3 of the Agreement on
Safeguards.
3.2 In the event that the Panel c onsiders that Article XIX of the GATT 1994 and the Agreement
on Safeguards are not applicable to the present dispute, the complainants request the Panel
alternatively to find as follows:
50
(a) The exclusion of imports from Colombia, Indonesia, Mexico and Panama from the
application of the duties provided for in the provisional and definitive measures is
inconsistent with Article I:1 of the GATT 1994; and
(b) the provisional and definitive measures are duties and charges other than ordinary
customs duties that are contrary to Articles II:1(b), second sentence, and II:1(a) of the
GATT 1994.
3.3 In accordance with Article 19.1 of the DSU, the complainants request the Panel to
recommend that the DSB request the Dominican Repub lic to bring the definitive safeguard measure
into conformity with the relevant provisions of the Agreement on Safeguards and the GATT 1994.
51
The complainants also request the Panel to ma ke suggestions for implementation concerning the
definitive measure, and in particular to suggest to the Dominican Republic that it should not redo the
investigation but rather immediately put an end to the definitive measure.52

50 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraphs 122
and 123; second written submission, paragraph 312.
51 Complainants, first written submission, paragraph 478.
52 Complainants, first written submission, paragraphs 462 and 476; second written submission,
paragraph 313.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

B. D
OMINICAN REPUBLIC
3.4 The Dominican Republic rejects all the cl aims put forward by the complainants. 53 I n
addition, the Dominican Republic raises the following preliminary issues:54
(a) That the present dispute is devoid of purpose, since Article XIX of the GATT 1994
and the Agreement on Safeguards are not applicable to the impugned measures;
(b) that the present dispute concerns alleged violations of agreements that are not covered
agreements, namely free trade agreements signed by the Dominican Republic, over
which the Panel lacks jurisdiction;
(c) that the complainants' claim that the alleged lack of findings of unforeseen
developments affects the determinations on the increase in imports, serious injury and
the causal link does not fall within the Panel's terms of reference because it was not
duly identified in the request for the establishment of the Panel;
(d) that the following claims by the complainants are not covered by the Panel's terms of
reference since, although identified in the re quest for the establishment of the Panel,
they were not identified in the request for consultations between the complainants and
the Dominican Republic: (i) that the determ ination on the causal link is inconsistent
with Article 4.1(a) of the Safeguards Agre ement; (ii) that the alleged lack of
opportunity to obtain an adequate means of trade compensation is inconsistent with
Article 8.1 of the Agreements of Safeguard s; (iii) that the lack of reasoned and
adequate findings and conclusions as to the need for the safeguard measure to
facilitate adjustment of the domestic industry is inconsistent with Articles 3.1, 4.2(c)
and 5.1 of the Agreements on Safeguards; (iv) that the fact that the measures are not
applied to products originating or coming from particular origins is inconsistent with
Article I:1 of the GATT 1994; and (v) that the measures at issue are contrary to
Articles II:1(a), and II:1(b), second sentence, of the GATT 1994; and
(e) that, by failing in their first written submission to develop certain complaints
identified in the request for the establishmen t of the Panel, the complainants have
withdrawn those complaints.
3.5 The Dominican Republic requests the Panel to find that Article XIX of the GATT 1994 and
the Agreement on Safeguards are not applicable to the present dispute or, alternatively, to reject all
the complaining parties' claims and arguments and find that the impugned measures are consistent
with the GATT 1994 and the Agreement on Safeguards.
55

53 Dominican Republic, first written submission, sections 4.2 to 4.10.
54 Dominican Republic, request for a preliminary ruling, paragraphs 1 and 55, and sections 3.4 and 3.5;
first written submission, section 4.1.3, subheadings (A ), (B), (C) and (D); second written submission,
paragraph 128.
55 Dominican Republic, first written submission, p. 189; second written submission, paragraph 128.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties, as set out in the written submissions and oral statements
presented to the Panel, are attached to this Report as an addendum in Annexes A, C, E and F (see List
of Annexes, pages iv-vi above).
V. ARGUMENTS OF THE THIRD PARTIES
5.1 The arguments of the third parties, as set out in the written submissions and oral statements
presented to the Panel, are attached to this Re port as an addendum in Annexes B and D (see above,
List of Annexes, pages iv-vi).
VI. INTERIM REVIEW
6.1 On 19 October 2011 the Panel issued its Interim Report to the parties.
56 On 2 November, in
accordance with the timetable and working procedures adopted by the Panel, the complainants and the
Dominican Republic submitted comments and asked the Panel to revise certain aspects of the
Interim Report. On 16 November, the complainan ts and the Dominican Republic submitted written
comments on each other's comments and requests for revision. Neither of the parties requested a
meeting with the Panel on the issues identified in their comments.
6.2 Where appropriate, the Panel amended specific aspects of its Interim Report in the light of the
comments and requests of the Parties, as explained below. The Panel also made some revisions and
corrections in the interests of greater clarity a nd precision. These changes are summarized in this
section of the Report. Except where otherwise indicated, the numbers of the paragraphs and footnotes
referred to in this section are those of the Final Report.
A. C
HANGES IN THE DESCRIPTION OF THE FACTUAL ASPECTS

6.3 On 27 October 2011, after the Interim Report had been issued, the Dominican Republic
submitted to the Panel a copy of Commission Re solution CDC-RD-SG-109-2011 of 17 October,
through which the Commission decided to maintain the application of a duty of 28 per cent
ad valorem to imports of tubular fabric and po lyethylene bags until 20 April 2012.
Resolution CDC-RD-SG-109-2011 modifies the calenda r for the progressive liberalization of the
impugned measures that had been adopted in th e Definitive Resolution as described in the
Interim Report. The complainants requested that the Panel put this new Resolution on record as an
undisputed fact. The Dominican Republic did not comment on this request. The Panel has included a
reference to Resolution CDC-RD-SG-109-2011 of 17 October, together with a description of the
manner in which the definitive measure would be applied pursuant to this Resolution and the
explanations provided by the Dominican Republic, in the new paragraph 2.24 in the factual aspects
section.
6.4 In view of this new information, the Panel also made changes in the description of the facts in
paragraphs 7.68 and 7.86 of its Report.

56 See also above, paragraph 1.14.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

B. C
HANGES IN THE FINDINGS SECTION
6.5 The Dominican Republic requests that the text of paragraph 7.27 be amended so as to reflect
more clearly and fully the arguments which it presente d. The complainants consider that the changes
requested by the Dominican Republic are unnecessary. In their view, the parties' full arguments are
already reflected in the annexes to the Report; the section in paragraph 7.27 is merely a description of
the main arguments, and does not seek to be exhaustiv e. The complainants add that the Panel is not
obliged to refer to the totality of the arguments presented by the par ties and that, in any case, some of
the arguments to which the Dominican Republic refers are already included in the paragraph. Taking
into account that the amendment requested refl ects the Dominican Republic's written and oral
arguments, the Panel has amended the relevant part of paragraph 7.27.
6.6 The Dominican Republic requests that the text of paragraph 7.31 be amended to reflect more
clearly and fully the arguments which it presented. The complainants did not comment on this
request. The Panel has amended the relevant part of paragraph 7.31.
6.7 The Dominican Republic asserts that the In terim Report does not reproduce any of its
arguments to the effect that the impugned measures ar e not "other duties or charges" and therefore do
not suspend obligations under Article II:1(b), second sentence, of the GATT 1994. The
Dominican Republic therefore requests that a ne w paragraph containing those arguments and a
reference to the relevant sections of its submissi ons and statements be adde d after paragraph 7.31.
The complainants consider that it is unnecess ary to add the paragraph requested by the
Dominican Republic. In their opinion, paragraph 7. 28 of the Report already contains a reference to
the arguments identified by the Dominican Republic and that it would suffice to amend that paragraph
in order to satisfy this request. The Panel does not consider it necessary to include a new paragraph,
since paragraph 7.28 already cited the argument s made by the Dominican Republic as well as
references to the relevant sections of its submissions and statements. Howeve r, in paragraph 7.28 the
Panel has added the additional language suggested by the Dominican Republic insofar as it reflects
arguments contained in its written submissions and statements.
6.8 The Dominican Republic requests that the text of paragraph 7.32 be amended in order to
reflect its arguments more clearly. The complainan ts did not comment on this request. Taking into
account that the requested amendment reflects the ar guments presented by the Dominican Republic in
its written submissions and statements, the Panel has amended paragraph 7.32.
6.9 The Dominican Republic requests that paragra ph 7.61 be amended as so to reflect its
arguments more accurately. The complainants did not comment on this request. Taking into account
the arguments presented by the Dominican Republic in its written submissions and statements, the
Panel has made some changes to paragraph 7.61.
6.10 The Dominican Republic requests that the text of paragraph 7.68 be amended so as to reflect
more correctly the language contained in the De finitive Resolution. The complainants did not
comment on this request. Taking into account the Dominican Republic's request, the Panel has made
some changes in paragraph 7.68 in order to re flect the language contained in the Commission's
preliminary and definitive Resolutions.
6.11 The Dominican Republic requests that it should be made clear in the third sentence of
paragraph 7.69 that the argument mentioned therein is merely one of those which it presented on this
point. The complainants consider that the amen dment requested by the Dominican Republic does not
contribute to greater clarity of the Report and on the contrary could lead to confusion or
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

misunderstanding with respect to the analysis by the Panel. The complainants reiterate that in their
view the Panel is not obliged to refer to the totalit y of the arguments presented by the parties and that,
in any case, the Dominican Republic itself has admitted that some of the arguments to which it refers
are already included elsewhere in the Report. Taking into account that the requested amendment
reflects the Dominican Republic's written and oral statements, the Panel has included the requested
clarification in the third sentence of paragraph 7. 69. The Panel has also included a reference to
paragraph 7.27 in which, as the Dominican Republic indicates, the arguments to which reference is
made are presented.
6.12 The complainants request that in a footnote to paragraph 7.86 reference be made to their
argument whereby the impugned measures were adopted on the basis of the domestic legislation and
multilateral rules on safeguards and not any other rules such as, for example, Law 146-00, which is
the domestic legislation governing the imposition of customs tariffs in the Dominican Republic. The
Dominican Republic considers that this reference would be inappropriate since the paragraph in
question concerns the analysis by the Panel and not the arguments of the parties, and also because this
argument is already reflected in paragraph 7.38 of the Report. The Panel has introduced the requested
reference in its findings, as it reflects facts that were established during the proceedings.
6.13 The Dominican Republic requests that the citati on of a sentence contained in paragraph 7.87
of the Interim Report be deleted. In the opinion of the Dominican Republic, the reference to this
sentence, taken from its opening statement at the firs t meeting of the Panel, is a partial citation and
does not correctly reflect the arguments it presented. The complainants reject this request. In their
opinion, the requested change would undermine the analytical underpinning of the Panel's finding.
They add that the Panel correctly understood the Do minican Republic's statement. They argue that
the Dominican Republic is seeking to adduce argum ents already presented during the proceedings,
which is inconsistent with the purpose of the interim review stage. Taking into account the arguments
presented by the Dominican Republic in its submissi ons and statements, the Panel has made some
changes in paragraph 7.87.
6.14 Again with respect to paragraph 7.87 of the Interim Report, the Dominican Republic requests
that the Panel delete the assertion to the effect that it had stated that the purpose of the impugned
measures is to isolate at least temporarily and partially the domestic market from international prices
of the products. The complainants did not comment on this request. In the view of the Panel, the
wording to which the Dominican Republic objects reflects the manner in which the
Dominican Republic described the situation of the domestic industry, which it sought to remedy
through the imposition of the impugned measures. In accordance with the description contained in
the Dominican Republic's written submissions, part of the injury incurred by the domestic industry
was due to the fact that it could not raise sale pr ices owing to competition from imported products. It
therefore follows that the impugned measures did i ndeed have the purpose of isolating, at least
temporarily and partially, the domestic market from international prices of the products. In any case,
the Dominican Republic's assertion that there is no exp licit statement in its written submissions to the
effect that this was the purpose of the impugned measu res is correct. The Panel has therefore deleted
the phrase to which the Dominican Republic objects.
6.15 The Dominican Republic requests that a text be added following paragraph 7.103 in order to
reflect its arguments more fully. The complainan ts did not comment on this request. Taking into
account that the requested amendment reflects the Dominican Republic's written and oral arguments,
the Panel has included a new paragraph numbered as 7.104.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

6.16 The Dominican Republic requests that a text be added to paragraph 7.164 so as to reflect
more fully its arguments concerning the definition of the domestic industry. The complainants
consider that the amendment requested by the Domi nican Republic is unnecessary. In their view, the
section that includes paragraph 7.164 merely cont ains a description of the main arguments, and
therefore does not seek to be exhaustive. The compla inants add that the Panel is not obliged to refer
to the totality of the arguments presented by the pa rties. Taking this request into account, the Panel
has added two sentences to para graph 7.164 in order to reflect the language contained in the
Dominican Republic's written submissions.
6.17 The Dominican Republic requests that the text of paragraph 7.184 be amended so as to reflect
more accurately the language of the Preliminary Resolution. The complainants consider that the
Dominican Republic's request is groundless and not based on the text of the Preliminary Resolution.
The Panel has made a change in paragraph 7.184 in order to reflect the wording of the Commission's
Preliminary Resolution.
6.18 The Dominican Republic requests that the text of paragraph 7.189 be amended by deleting the
first two sentences of the paragraph on the ground s that they contain incorrect assertions. The
complainants consider that the Dominican Republic 's request is groundless. In their opinion, the
Dominican Republic claims that the Report reflect s a finding which the competent authority did not
make. The complainants add that through its reque st the Dominican Republic is seeking to adduce
arguments already presented during the proceeding as well as new arguments that were not previously
presented, all of which has nothing to do with the pu rpose of the interim review stage. Taking into
account the Dominican Republic's request, and to ensu re that the Report reflects the Panel's findings
more clearly, the first two sentences of paragraph 7.18 9 have been deleted. In the Panel's opinion this
amendment does not alter the substance of the findings contained in the paragraph. In view of the
foregoing, the Panel has also made changes in paragraphs 7.189, 7.190, 7.193 and 7.198.
6.19 The Dominican Republic requests that the text of paragraph 7.250 be amended so as to reflect
its arguments more accurately. The complainants did not comment on this request. Taking into
account that the requested amendment reflects the Dominican Republic's written and oral arguments,
the Panel has made the requested change in paragraph 7.250.
6.20 The complainants request that the text of paragraph 7.310 be amended to reflect more
accurately the findings previously reached by the Panel. The Dominican Republic did not comment
on this request. The Panel has made the requested ch ange in paragraph 7.310 in order to reflect the
findings contained in earlier paragraphs of the Report.
6.21 The complainants request the Panel to make a le gal finding on their claim that the competent
authority acted inconsistently with obligations und er the covered agreements with respect to the
determination of a causal relationship between the incr ease in imports and the serious injury. In their
opinion, such a finding is necessary in order to reach a positive solution to the dispute. The
complainants note that the Panel relie d on the precedent of the report in Argentina – Preserved
Peaches to confine itself to issuing a factual finding on the assessment made by the competent
authority without issuing legal findings. To support their reuest the complain ants cite as precedents
the reports of the Appellate Body in Argentina – Footwear (EC) and the Panel in Chile – Price Band
System. The Dominican Republic rejects this request a nd considers that the Panel acted correctly. In
the Dominican Republic's view, the Panel does not n eed to issue legal findings on the determination
of causality for it to be possible to reach a positive solution to the dispute. The Panel notes that it
indicates in paragraphs 7.327 and 7.328 of its Report that, having concluded that in its determinations
of the existence of serious injury the Dominican Republic acted inc onsistently with its obligations
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

under the covered agreement, it would be impossibl e then to find that the competent authority
demonstrated the existence of a causal link between the increased imports and a serious injury whose
existence had not been demonstrated. Accordingl y, the Panel does not consider it necessary to issue
any finding as to whether the Dominican Republic demonstrated that the increase in imports caused
serious injury to the domestic industry. In so do ing the Panel is adopting the same line of reasoning
as the panel in Argentina – Preserved Peaches , whose report is later than the two precedents cited by
the complainants. The Panel points out, in any case, that both the Appellate Body in Argentina –
Footwear (EC) and the panel in Chile – Price Band System noted that a causal link cannot be shown
to exist if it has previously been demonstrated that substantive requirements such as the demonstration
of the existence of serious injury had not been fulfilled. In Argentina – Footwear (EC) the
Appellate Body also expressed surprise at the pane l's decision to evaluate the existence of a causal
link after having determined that there had been ne ither an increase in import s nor serious injury.
Taking the foregoing into account, the Panel does not see any need to issue the additional finding
requested by the complainants.
C. C
HANGES IN THE CONCLUSIONS AND RECOMMENDATIONS SECTION
6.22 The complainants request the Panel to make additional suggestions for implementation and, in
particular, to suggest that the Dominican Republic immediately withdraw the definitive measure. In
their opinion, the withdrawal of the definitive measu re would be a realistic and viable implementation
option that would not cause the Dominican Republic major difficulties. The Dominican Republic
rejects this request. In the Dominican Republic's opi nion, it is up to the Member concerned to decide
how to implement the DSB's recommendations and, while removal of the definitive measure would be
a realistic and viable implementation option, the co mplainants have not made the case that it is the
only possible option. The Dominican Republic adds th at the violations found by the Panel are neither
fundamental nor of general import and therefore not such as to v itiate the investigation as a whole
ab initio. The Panel notes that in paragraph 8.3 of the Report it recommends to the
Dominican Republic that, in light of the findings cont ained in the Report, it should bring its measures
into conformity with its obligations under the GATT 1994 and the Agreement on Safeguards. Under
Article 19.1 of the DSU, panels have the faculty to "suggest ways in which the Member concerned
could implement the recommendations", when they see fit, but are not obliged to do so. In the present
case, it is true, as the complainants point out, that the findings of inconsistency made by the Panel
refer to fundamental aspects of the determina tions that led to the imposition of the impugned
measures. In these circumstances, the withdrawal of the definitive measure is an obvious way in
which the Dominican Republic could bring its measures into conformity with its obligations under the
GATT 1994 and the Agreement on Safeguards. In an y case, it is for the Dominican Republic in the
first place to determine how it will implement the Pa nel's recommendation. Taking the foregoing into
account, the Panel does not consider it appropriate to suggest to the Dominican Republic the
immediate withdrawal of the definitive measure.
D. MINOR CORRECTIONS AND ADDITIONAL REFERENCES
6.23 As a consequence of the comments by the parti es, minor typographical corrections have been
made in paragraphs 1.1, 1.4, 1.6, 2.1, 3.4(c), 7.1, 7.38, 7.39, 7.66, 7.68, 7.74, 7.113, 7.115, 7.116,
7.275, 7.276, 7.294, 7.299, 7.313, 7.337, 7.341, 7.380, 7.382, 7.385, 7.391, 7.422 and 8.1(g), as well
as in footnote 74 to paragraph 7.10, footnote 186 to paragraph 7.114, footnote 192 to paragraph 7.119,
footnote 301 to paragraph 7.210, footnote 422 to paragraph 7.324 and footnote 516 to
paragraph 7.432.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

6.24 The Panel also made material corrections in paragraphs 1.13, 2.2, 2.3, 2.23, 3.1(f), 3.2, 3.4(d),
7.10, 7.16, 7.17, 7.38, 7.39, 7.106, 7.108, 7.119, 7.138, 7.159, 7.163, 7.171, 7.185, 7.193, 7.219,
7.220, 7.224, 7.225, 7.235, 7.259, 7.267, 7.290, 7.294, 7.300, 7.301, 7.331, 7.347, 7.349, 7.352, 7.357,
7.417 and 7.427, as well as in footnote 12 to paragraph 2.2, footnote 45 to paragraph 2.22, footnote 74
to paragraph 7.10, footnote 104 to paragraph 7.32, footnote 265 to paragraph 7.179, footnote 292 to
paragraph 7.197, footnote 310 to pa ragraph 7.221, footnote 312 to para graph 7.224, footnote 318 to
paragraph 7.230, footnote 319 to paragraph 7.231, footnotes 327 and 330 to paragraph 7.235,
footnote 441 to paragraph 7.338 and footnote 509 to paragraph 7.426.
6.25 The Panel also updated the information in the ta ble of cases cited and the list of abbreviations
used in this Report, as well as in paragraphs 1.14 and 1.15 and footnote 160 to paragraph 7.86.
VII. FINDINGS
A. P
RELIMINARY CONSIDERATIONS
7.1 The matter before this Panel is the consistenc y of the provisional and definitive measures
imposed by the Dominican Republic on imports of tubular fabric and polyp ropylene bags and the
investigation underpinning these measures with va rious provisions of the Agreement on Safeguards
and the GATT 1994. In addition, the complainants challenge specific procedural failings by the
Dominican Republic.57
7.2 Article 11 of the DSU establishes that the function of panels is to assist the DSB in
discharging its responsibilities under the Understanding and the covered agreements. Article 3.4 of
the DSU provides that "recommendations or rulings made by the DSB shall be aimed at achieving a
satisfactory settlement of the matter …".
7.3 Before beginning its assessment of the issues raised in the present dispute, the Panel considers
it worthwhile to describe the legal framework that will apply in this Report with regard to the standard
of review, the interpretation of treaties and the burde n of proof. The Panel will then go on to consider
the Dominican Republic's claim that the impugned me asures are not covered by Article XIX of the
GATT 1994 or by the Agreement on Safeguards and ther efore the dispute raised by the complainants,
at least as concerns the claims put forward under those agreements, is devoid of purpose.
1. Standard of review
7.4 Subject to the reservation that the Panel will c onsider below the questi on of the applicability
of Article XIX of the GATT 1994 and the Agreement on Safeguards to the present dispute, it should
be pointed out that neither the GATT 1994 nor the Agreement on Safeguards contain specific
additional provisions on the applicable standard of re view. It should therefore be recalled that, as the
Appellate Body stated in EC – Hormones , where there is no specific standard of review for the
WTO multilateral trade agreement concerned, the provisions of Article 11 of the DSU are
applicable.58
7.5 Article 11 of the DSU establishes in an overall manner the standard of review to be followed
by WTO panels. Thus, each panel should make "an objective assessment of the matter before it",
including an objective assessment of the facts and the applicability of and the conformity with the

57 Complainants, first written submission, paragraph 28.
58 Appellate Body Report, EC – Hormones, paragraph 116.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

relevant covered agreements. The obligation imposed by Article 11 of the DSU includes the
consideration of all aspects of the matt er, both factual and legal, and implies inter alia that the panel
should consider the issues raised by the parties, without overstepping its terms of reference.
Article 11 further provides that panels should also make such other findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in the covered agreements.
7.6 For the purposes of this dispute, and once again s ubject to the reservation that the Panel will
consider below the question of the applicability of Article XIX of the GATT 1994 and the Agreement
on Safeguards, it should be pointed out that the Appellate Body has analysed the scope of the
standard of review in the specific context of disputes raised under the Agreement on Safeguards.
59 In
US – Cotton Yarn , the Appellate Body summarised the fundame ntal elements of this standard of
review as follows:
Our Reports in these disputes under the Agreement on Safeguards spell out key
elements of a panel's standard of review under Article 11 of the DSU in assessing
whether the competent authorities complied with their obligations in making their
determinations. This standa rd may be summarised as follows: panels must examine
whether the competent authority has evaluated all relevant factors; they must assess
whether the competent authority has examin ed all the pertinent facts and assessed
whether an adequate explanation has been provided as to how those facts support the
determination; and they must also consider whether the competent authority's
explanation addresses fully the nature and co mplexities of the data and responds to
other plausible interpretations of the da ta. However, panels must not conduct a
de novo review of the evidence nor substitute their judgment for that of the competent
authority.60
7.7 As indicated by the Appellate Body, the standa rd of review applicable to panel findings on
determinations by an inves tigating authority is not a de novo review, which would involve repeating
the analysis of the evidence carried ou t by the national authority, nor is it a total deference which
would simply involve following that authority's determination.61 Panels should rather:
examine whether the conclusions reached by the investigating authority are reasoned
and adequate in the light of the evidence on the record a nd other plausible alternative
explanations.62 A panel's examination of an investigating authority's conclusions

59 See, for example, Appellate Body Reports, Argentina – Footwear (EC) ; US – Lamb ; and US –
Wheat Gluten.
60 Appellate Body Report, US – Cotton Yarn, paragraph 74 (italics in the original). Although the US –
Cotton Yarn case did not refer to the Agreement on Safeguards, the Appellate Body's statement is relevant as it
summarises the findings contained in earlier reports concerning the standard of review for panels under the
Agreement on Safeguards.
61 Appellate Body Report, US – Tyres (China), paragraph 123. See also, Appellate Body Reports, EC –
Hormones, paragraph 117; Argentina – Footwear (EC), paragraph 119; and US – Cotton Yarn, paragraph 69.
62 (Footnote from the original) See Appellate Body Report, Argentina – Footwear (EC) ,
paragraphs 119-121; Appellate Body Report, US – Cotton Yarn , paragraphs 74-78; Appellate Body Report,
US – Countervailing Duty Investigation on DRAMS , paragraphs 183 and 186-188; Appellate Body Report,
US – Hot-Rolled Steel , paragraph 55; Appellate Body Report, US – Lamb , paragraphs 101 and 105-108;
Appellate Body Report, US – Steel Safeguards , paragraph 299; Appellate Body Report, US – Wheat Gluten ,
paragraphs 160 and 161; Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) ,
paragraph 93; and Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) ,
paragraph 516.
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must be critical, and be based on the information contained in the record and the
explanations given by the authority in its published report.
63 As the Appellate Body
has explained, what is "adequate" will depe nd on the facts and circumstances of the
particular case and the claims made.64, 65
7.8 The Appellate Body has added that, with rega rd to its obligations under the Agreement on
Safeguards, as well as those established in Artic le XIX of the GATT 1994, the competent authority
must provide a "reasoned and adequate explanati on of how the facts support their determination". 66
This means in practice that the Panel's objective as sessment of the determinations of the competent
authority may have, in principle, two aspects, one formal and the other substantive. The formal aspect
is whether the competent authority has evaluated "a ll relevant factors"; th e substantive aspect is
whether the competent authority has given a reasoned and adequate explanation for its
determination.67 Thus, the fact that a panel must not carry out a de novo review does not mean that it
cannot conclude that the competent authority in a specific case has not provided a reasoned or
adequate explanation for its determination. Su ch a conclusion does not mean that the panel has
engaged in a de novo review, nor that it has substituted its own conclusions for those of the competent
authority.68
7.9 The examination of the reasoned and adequa te explanation provided by the competent
authority should be based on the report published by the authorities. 69 In this connection, Article 3.1,
last sentence, of the Agreement on Safeguards prov ides that "[t]he competent authorities will publish
a report setting forth their findings and reasoned conc lusions reached on all pertinent issues of fact
and law." With respect to this Report, the Appellate Body has indicated that:
Panels have a responsibility in WTO di spute settlement to assess whether a
competent authority has complied with its obligation under Article 3.1 of the
Agreement on Safeguards to "set forth" "findings and reasoned conclusions" for their
determinations. The European Communities and Norway argue that panels could not
fulfil this responsibility if they were left to "deduce for themselves" from the report of
that competent authority the "rationale for the determinations from the facts and data
contained in the report of the competent authority".70
7.10 The Panel notes in this connection that, under the domestic legislation of the
Dominican Republic, the Commission is the competen t authority for carrying out investigations and
determining the application of safeguards. Th e Commission's Initial Resolution initiating the
investigation for the possible application of measure s refers to the Initial Technical Report issued by
the DEI, the published version of which "is an integral part" of the Resolution. 71 The Commission's

63 (Footnote from the original) See Appellate Body Report, US – Lamb, paragraph 106.
64 (Footnote from the original) Appellate Body Report, US – Softwood Lumber VI (Article 21.5 –
Canada), paragraph 93.
65 Appellate Body Report, US – Tyres (China), paragraph 123.
66 Appellate Body Report, US – Steel Safeguards , paragraph 276. See also Appellate Body Reports,
US – Lamb, paragraph 103; and US – Line Pipe, paragraph 217.
67 Appellate Body Report, US – Lamb, paragraph 103. See also, Appellate Body Report, US – Cotton
Yarn, paragraph 72.
68 Appellate Body Report, US – Lamb, paragraph 107.
69 See, for example, Appellate Body Reports, US – Steel Safeguards, paragraphs 289 and 326; and US
– Tyres (China), paragraph 123.
70 Appellate Body Report, US – Steel Safeguards, paragraph 288 (italics in the original).
71 Initial Resolution, Exhibit CEGH-2, pp. 3 and 8.
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Preliminary Resolution imposing the provisional meas ure refers to the Preliminary Technical Report
issued by the DEI, which "is an integral part" of the Resolution.
72 Likewise, the Commission's
Definitive Resolution imposing the definitive measure refers to the Final Technical Report issued by
the DEI, which "is an integral part" of the Resolution. 73 The Panel notes in any case that, under the
domestic legislation of the Dominican Republic , the DEI does not have the power to issue
determinations and its techni cal reports contain only "proposals and recommendations" to the
Commission.74 In view of the foregoing, when examini ng the basis for the determinations of the
Dominican Republic's competent authority, the Panel will in principle base itself on the Commission's
resolutions, supplemented by the findings and conclu sions contained in the DEI's technical reports
which underpin those resolutions.75 These documents taken together constitute the "published report"
of the competent authority to which the Appellate Body has referred.
7.11 In carrying out its objective assessment of the ma tter before it, the Panel will solely address
the claims necessary to resolve the matter at issue between the parties. 76 The Panel will take into
account the arguments presented by the parties and third parties in their various written submissions
and oral statements in the course of the proceedings.
2. Interpretation of the relevant rules of the agreements
7.12 In its objective assessment of the matter before it, the Panel is called upon to clarify the scope
of some provisions of the covered agreements cited by the parties, and in particular of the Agreement
on Safeguards and the GATT 1994. In this connection, Article 3.2 of the DSU provides that panels
should clarify the existing provisions of the covere d agreements "in accordance with customary rules
of interpretation of public international law". As the Appellate Body has noted, these customary rules
of interpretation are part of customary general inte rnational law and are codified in Articles 31 and 32
of the Vienna Convention on the Law of Treaties (Vienna Convention).77
7.13 Article 31.1 of the Vienna Convention provides th at: "a treaty shall be interpreted in good
faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context
and in the light of its object and purpose." In acco rdance with Article 31.2 of the Vienna Convention,
the context for the purposes of the interpretation of a treaty comprises the text of the agreement
concerned, including its preamble and annexes.
7.14 Article 32 of the Vienna Convention provides that recourse may be had to supplementary
means of interpretation, including the preparatory work of the treaty and the circumstances of its
conclusion, in order to confirm the meaning resu lting from the application of Article 31, or to

72 Preliminary Resolution, Exhibit CEGH-5, paragraph 23.
73 Definitive Resolution, Exhibit CEGH-9, paragraph 17.
74 See Article 4 of the Regulations of Law 1-02, Exhibit RDO-11. This is confirmed by the language
used in the technical reports. For example, when examin ing the factors that would demonstrate the existence of
a causal link between the increase in imports and the injury to the domestic industry, the DEI states in its Final
Technical Report that "it analysed [t hese elements] in order to enable th e Plenary of the Commission to decide
whether or not it is appropriate to apply a definitive safeguard measure". Final Technical Report,
Exhibit CEGH-10, p. 91.
75 Panel reports, Argentina – Preserved Peaches , paragraph 7.6; and Argentina – Footwear (EC) ,
paragraph 8.128.
76 Appellate Body Report, US – Wool Shirts and Blouses, pp. 17-20.
77 Appellate Body Report, US – Gasoline , pp. 16-18. See also, for exam ple, Appellate Body Report,
India – Patents (US), paragraph 46.
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determine the meaning when the interpretation acco rding to Article 31 leaves the meaning ambiguous
or obscure, or leads to a result which is manifestly absurd or unreasonable.
7.15 Article XVI of the Marrakesh Agreement Establishing the World Trade Organization
(WTO Agreement) provides that the legal texts of the WTO are equally authentic in the English,
French and Spanish language versions.
78 Accordingly, and in accordance with Article 33 of the
Vienna Convention, in case of discrepancy between th e language contained in the text of each of the
different versions, the Panel must seek the meaning which simultaneously gives effect to all the terms
of the treaty as used in each of the authentic languages.79
3. Burden of proof
7.16 Although the DSU does not contain any express pr ovision governing the burden of proof, by
application of the general principles of law the WTO dispute settlement system has traditionally
recognised that the burden of proof lies with the party asserting a fact, whether that party be the
complainant or the defendant. 80 Accordingly, in a proceeding the burden of proving that the
impugned measure is inconsistent with the relevant provisions of covered agreements initially lies
with the complainant. Once the complainant has made a prima facie case for such inconsistency, the
burden shifts to the defendant, who must in turn rebut the alleged inconsistency.81 A prima facie case
is one which, in the absence of effective refuta tion by the defending party, requires a panel, as a
matter of law, to rule in favour of the complaining party.82 In the words of the Appellate Body:
As a general matter, the burden of proof rests upon the complaining Member. That
Member must make out a prima facie case by presenting sufficient evidence to raise a
presumption in favour of its claim. If the complaining Member succeeds, the
responding Member may then seek to rebut this presumption. Therefore, under the
usual allocation of the burden of proof, a responding Member's measure will be
treated as WTO-consistent, until sufficien t evidence is presented to prove the
contrary.
83
7.17 The Appellate Body has added in this connec tion that precisely how much and precisely what
kind of evidence will be required for the complain ing party to establish its case will necessary vary
from measure to measure, provision to provision, and case to case.84 In any case, it should be borne in
mind that, in the context of the WTO dispute settlement system:
A prima facie case must be based on "evidence and legal argument" put forward by
the complaining party in relation to each of the elements of the claim. A complaining
party may not simply submit evidence and expect the panel to divine from it a claim

78 See also Explanatory Note to paragraph 2(c)(i) of the GATT 1994.
79 See, for example, Appellate Body Reports, Chile – Price Band System , paragraph 271; EC – Bed
Linen (Article 21.5 – India), footnote 153 to paragraph 123; US – Softwood Lumber IV , footnote 50 to
paragraph 59; EC – Tariff Preferences , paragraph 147; and US – Upland Cotton , footnote 510 to
paragraph 424.
80 Appellate Body Report, US – Wool Shirts and Blouses, pp. 12-17.
81 Appellate Body Report, EC – Hormones, paragraph 98.
82 Appellate Body Report, EC – Hormones, paragraph 104.
83 Appellate Body Report, Canada – Dairy (Article 21.5 – New Zealand and US II), paragraph 66
(italics in the original).
84 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
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of WTO-inconsistency. Nor may a compla ining party simply allege facts without
relating them to its legal arguments.
85
7.18 In the matter before us, and by application of the foregoing criteria, it is up to the
complainants to make out a prima facie case for the violations of the provisions of the WTO covered
agreements they have invoked; if the complainants succeed in making a prima facie case for their
claims, it will then be up to the Dominican Republic to rebut them.
4. Provisional measure
7.19 The measures impugned by the complainants incl ude the provisional measure which is no
longer in force at this date. The co mplainants argue that the panel in Chile – Price Band System
stated that Article 19.1 of the DSU allows a panel to make findings regarding an expired provisional
safeguard measure, if such findings are necessary to secu re a positive solution to the dispute. In that
same case, however, the panel concluded that it would not formulate recommendations with regard to
the expired measure. In the complainants' view, in the present dispute the Panel should make findings
on the provisional measure because that will help to secure a positive solution to the dispute within
the meaning of Article 3.7 of the DSU. They note that the Panel's findings on the provisional measure
could serve as a basis for private operators to brin g actions before the Dominican Republic authorities
which could enable them to recover the duties wrongl y paid through the application of the provisional
safeguard.86
7.20 The Dominican Republic argues that, to secure a positive solution to the dispute, there is no
need for the Panel to issue findings on the provision al measure that was retroactively replaced by the
definitive measure.87 The Dominican Republic points out that the panel in Chile – Price Band System
stated that a panel may make findings on an expi red provisional measure only if such findings are
necessary to secure a positive soluti on to the dispute. The Dominican Republic contends that in the
present case it does not understand how making findi ngs on the provisional measure would contribute
to a positive solution to the dispute.88
7.21 The Panel notes that the impugned provisional measure was in force until 17 October 2010.
As from 18 October it was replaced by the definitive me asure. During the period of application of the
provisional measure, the customs authorities of the Dominican Republic required payment of the
38 per cent duty in accordance with the system co mmonly applicable to the collection of customs
duties, without allowing the possibility of posting bonds or other types of guarantee.
89 This means
that the provisional measure was in force when Costa Rica and Guatemala each separately requested
the holding of consultations with the Dominican Re public in the present case (15 October 2010), but
not when Honduras and El Salvador each separatel y requested consultations (on 18 October and
19 October, respectively). The impugned measure w as not in force when Costa Rica and Guatemala
(on 15 December 2010) or when Honduras and El Salvador (on 20 December 2010) each separately

85 Appellate Body Report, US – Gambling , paragraph 140 (italics in the original; footnotes not
reproduced).
86 Complainants, reply to Panel question No. 37.
87 Dominican Republic, first written submission, paragraphs 410, 413-415 and 435.
88 The Dominican Republic points out that the panel in Guatemala – Cement II found that since it had
already made findings that gave rise to a recommendati on concerning the totality of the definitive measure, it
did not consider it necessary to further address claims concerning the provisional measure that could only result
in a ruling concerning only part of the definitive measure. Dominican Republic, reply to Panel question No. 38.
89 Complainants, reply to Panel question No. 188; Dominican Republic, comments on the
complainants' reply to Panel question No. 188.
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requested the DSB to establish a panel to examine the dispute. Nor, therefore, was the impugned
provisional measure in force at the time when the DSB established the Panel and its terms of reference
(7 October 2011).
7.22 The Panel is mindful of the fact that there is nothing in the WTO agreements to prevent a
panel from issuing findings regarding expired provisional safeguard measures insofar as such findings
are necessary to secure a pos itive solution to the dispute.
90 In the present case, the Panel notes that
each of the principal claims put forward by the comp lainants in their request for the establishment of
the panel with respect to the definitive measure w as also put forward with respect to the provisional
measure. In the case of those claims, insofar as the complainants succeed in making the case that the
impugned measures are inconsistent with any of th e provisions of the covered agreements, that
finding would affect both the impugned definitive measu re and the provisional measure. In that case,
it would not in principle be necessary for the Pane l to issue separate findings regarding the expired
provisional measure; any such findings would not be necessary for helping to secure a positive
solution to the dispute for the parties.
B. WHETHER ARTICLE XIX OF THE GATT 1994 AND THE AGREEMENT ON SAFEGUARDS ARE
APPLICABLE TO THE PRESENT DISPUTE
1. Main arguments of the parties
(a) Dominican Republic
7.23 The Dominican Republic affirms that, in the exercise of the functions provided for in
Article 11 of the DSU, the Panel should rule on whether or not the covered agreements which the
complainants claim to have been breached are applicable to the present dispute. 91 In the opinion of
the Dominican Republic, for the Panel to be able to assess the consistency or inconsistency of the
impugned measures with the specific provisions invoke d by the complainants, it must first determine
that the measures in question fall within the scope of the provisions invoked by the complainants.92
7.24 The Dominican Republic argues in this connection that the provisions invoked by the
complainants, more specifically Article XIX of the GATT 1994 and the Agreement on Safeguards,
are not applicable to the present dispute as the impugned measures are not covered by those rules. 93
Accordingly, in its view the dispute raised by the complainants is devoid of purpose, at least insofar as
those rules are concerned. 94 The Dominican Republic adds that the applicability of the provisions
invoked by the complainants depends on objective cr iteria set out in the rules themselves and based
on the content of the measures at issue, and is no t determined by subjective criteria such as the
classification of the measures under domestic law, the name given to the various instruments in the
domestic legislation of each WTO Member, or their form or nomenclature, th e lawmakers' intentions
or the statements made by the Dominican authorities.
95

90 See, for example, panel report, Chile – Price Band System, paragraphs 7.112-7.115.
91 Dominican Republic, request for a preliminary ruling, paragraphs 15-25.
92 Dominican Republic, request for a preliminary ruling, paragraph 24. See also, Dominican Republic,
opening statement at the first meeting of the Panel, paragraph 3.
93 Dominican Republic, request for a preliminary ruling, paragraphs 25 and 35.
94 Dominican Republic, request for a preliminary ruling, paragraphs 1, 14, 26, 27 and 55.
95 Dominican Republic, opening statement at the first meeting of the Pa nel, paragraphs 6-12. See also,
Dominican Republic, reply to Panel questions Nos. 31 and 32; second written submission, paragraph 5.
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7.25 The Dominican Republic asserts that Article XIX:1(a) of the GATT 1994 has two parts. The
first part establishes certain conditions that must be fulfilled for a WTO Member to be able to adopt
the course of action described in the second part. In the view of the Dominican Republic, if a
Member does not take the course of action provided fo r in the second part of Article XIX:1(a) of the
GATT 1994 - that is to say, if it does not suspend in w hole or in part the obligation incurred in respect
of such product or withdraw or modify the conces sion - it is not legally bound to fulfil the conditions
set out in the opening part of the provision, nor to satisfy the disciplines and procedural requirements
contained in the rest of Article XIX of the GATT 1994.
96
7.26 The Dominican Republic also contends that the wo rd "obligation" used in Article XIX of the
GATT 1994 is confined to: (i) the tariff concessions and the obligations relating to such concessions
in accordance with Article II:1 of the GATT 1994; and (ii) the elimination or reduction of
quantitative restrictions pursuant to Article XI of the GATT 1994. Accordingly, in its opinion
Article XIX of the GATT 1994 and the Agreement on Safeguards only cover those measures which
suspend, withdraw or modify tariff concessions or obligations relating to such concessions or which
impose quantitative restrictions.97
7.27 The Dominican Republic adds that, even assu ming that other provisions of the GATT 1994
could be included in the term "obligation" of Article XIX, which it denies, "this could not in any way
include GATT Article I establishing the most-favoured-nation principle (along with
GATT Article XIII)".98 This stems from: (i) the text of Ar ticle 2.2 of the Agreement on Safeguards,
according to which safeguards should be applied in a non-discriminatory manner, so that the
interpretation whereby the term "obligations" in Article XIX, second sentence, could refer to
GATT Article I:1 would lead to a conflict betw een GATT Article XIX and Article 2.2 of the
Agreement on Safeguards, contrary to the principle of harmonious interpretation; (ii) the fact that
Article 9.1 of the Agreement on Safeguards estab lishes a mandatory exemption from the application
of a safeguard measure for certain countries by virt ue of special and differential treatment, but does
not authorize the "suspension" of GATT Article I:1 within the meaning of GATT Article XIX;
(iii) the text of the Ministerial Declaration la unching the Uruguay Round, wh ich would suggest that
the term "obligation" in Article XIX does not re fer to GATT Article I, and the general negotiating
history of Article XIX and the Agreement on Safegua rds, as well as the practice of the Contracting
Parties to the GATT 1947 showing a rejection of discriminatory or selective safeguard measures;
(iv) the fact that the obligation that may be suspended in accordance with the last part of
Article XIX:1(a) of the GATT 1994 refers to the oblig ation which, according to the first part of the
Article, has resulted in the increase in imports which has caused a serious injury, and the
most-favoured-nation principle is not capable of caus ing such an increase; (v) the fact that the
application of Article 9.1 of the Agreement on Safeguards does not qualify a specific measure as a
safeguard measure in accordance with Article 1 of the Agreement on Safeguards, but rather
presupposes the existence of a safeguard; and (vi) that to consider that a safeguard measure within the
meaning of GATT Article XIX may consist in the su spension of GATT Article I:1 would lead to an
absurd result, since by virtue of Articles 2.2 an d 9.1 of the Agreement on Safeguards read together,
the sole content of such a measure would be the exclusion of certain countries from its scope.99

96 Dominican Republic, opening statem ent at the first meeting of the Panel, paragraphs 21-22. See
also, request for a preliminary ruling, paragraph 38; reply to Panel questions Nos. 41, 61 and 172.
97 Dominican Republic, reply to Panel question No. 60.
98 Ibid.
99 Dominican Republic, reply to Panel questions Nos. 60-61; second written submission,
paragraphs 9-13. See also, Dominican Republic, opening statement at the first meeting of the Panel,
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7.28 The Dominican Republic contends that the pr ovisional measure and the definitive measure
consisted in the adoption of a "38 per cent [ ad valorem ] tariff" on imports of tubular fabric and
polypropylene bags, which was progressively reduced. These measures constituted neither a
surcharge, nor a second tariff, nor an additional or alternative tariff, but rather an increase in the
MFN tariff, in accordance with Article 73 of Law 1-02 , replacing the previously applicable
MFN tariff. At no time did these measures violate the Dominican Republic's obligation under
Article II of the GATT 1994, through its schedule of concessions, not to impose tariffs above
40 per cent ad valorem on the products in question; nor did the measures result in duties other than
ordinary customs duties, and therefore they di d not suspend obligations under Article II:1(b),
second sentence, of the GATT 1994. Nor did they result in a restriction of any other kind on imports
of tubular fabric or polypropylene bags, such as qu antitative restrictions, or suspend in whole or in
part any other obligation incurred by the Dominican Republic with respect to those products.
100
7.29 The Dominican Republic affirms that the complainants knew before the adoption of the
impugned measures that they would not exceed the bound tariff and that therefore Article XIX of the
GATT 1994 would not be applicable. A lthough when adopting these measures the
Dominican Republic decided to adhere to the bur densome requirements of Article XIX of the
GATT 1994 and the Agreement on Safeguards, it did not have any obligation to do so.
101
7.30 In the view of the Dominican Republic, the f act that Article XIX of the GATT 1994 is not
applicable to the present dispute also results from the Article's object and purpose, which are to enable
a Member temporarily to rebalance the level of its concessions when faced with specific unforeseen
developments. The impugned measures did not affect the level of tariff concessions accepted by the
Dominican Republic in the WTO. Its proposed interpretation is also supported by other provisions of
the Agreement on Safeguards, such as Articles 11.1(c) and 8.1. The Dominican Republic affirms that
the negotiating history of Article XIX of the GA TT 1994 and the Agreement on Safeguards confirms
that these provisions only apply to measures invol ving the suspension of an obligation under the
GATT 1994 or the withdrawal or modification of a c oncession. It argues that the interpretation put
forward by the complainants would affect the "inherent and essential flexibility of the WTO system of
tariff concessions", under which Members may freely raise their tariffs up to a level below the bound
rate.
102
7.31 The Dominican Republic affirms that the impugned measures "are safeguard measures within
the meaning of Law 1-02" and were adopted in comp liance with this domestic legislation, Article 73
of which authorizes increasing tariffs without re ferring to the suspension of obligations or a
withdrawal or modification of concessions within the meaning of the GATT 1994. In its opinion, "not

paragraphs 50-52; reply to Panel question No. 174; opening statement at the second meeting of the Panel,
paragraphs 16-21.
100 Dominican Republic, request for a preliminary ru ling, paragraphs 30, 41-43 and 46; first written
submission, paragraphs 39-41; opening statement at the first meeting of the Panel, paragraphs 4 and 45-48. See
also, second written submission, paragraphs 15-25; opening statement at the second meeting of the Panel,
paragraphs 22-30; reply to Panel questions Nos. 33 and 180-183; comments on the complainants' reply to the
Panel questions, paragraphs 2-10.
101 Dominican Republic, opening statement at the first meeting of the Panel, paragraphs 16-18 and 54;
closing statement at the first meeting of the Panel, paragraphs 7 and 14-15; reply to Panel questions Nos. 49
and 51.
102 Dominican Republic, request for a preliminary ruling, paragraphs 44 (citing the Appellate Body
Report in Argentina – Footwear (EC) , paragraph 94) and 45; opening stat ement at the first meeting of the
Panel, paragraphs 28-32; closing statement at the second meeting of the Panel, paragraphs 5-7; reply to Panel
questions Nos. 41, 68 and 70.
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every safeguard adopted under Law 1-02, constitut es a safeguard measure within the meaning of
Article XIX of GATT and the Agreement on Safeguards".
103
7.32 From the foregoing the Dominican Republic conc ludes that the course of action that was
adopted through the impugned measures does not constitute any of the actions covered by Article XIX
of the GATT 1994. Given that the impugned measures are not those covered by Article XIX of the
GATT 1994, pursuant to Article 1 of the Agreemen t on Safeguards the rules established in that
Agreement are likewise inapplicable. Lastly, the Dominican Republic adds that the investigation
leading to the adoption of the impugned measures is likewise not subject to Article XIX of the
GATT 1994 or the Agreement on Safeguards.104
(b) Complainants
7.33 The complainants reject the Dominican Republic 's arguments and request the Panel to find
that the impugned measures are indeed subject to examination under Article XIX of the GATT 1994
and the Agreement on Safeguards.105
7.34 The complainants affirm that the impugned m easures should be considered as safeguards on
the basis of a harmonious reading of Article XIX of the GATT 1994 with the Agreement on
Safeguards and on the design, architecture and stru cture of the measures themselves, which claim to
be a response to the need to remedy serious injury and facilitate adjustment.
106
7.35 The complainants assert that the impugned measures suspend obligations of the
Dominican Republic under Articles I:1 and II:1(b), second sentence, of the GATT 1994 relating to the
products in question. The complainants reject th e Dominican Republic's argum ent to the effect that
the term obligation in Article XIX of the GATT 1994 refers solely to obligations relating to tariff
concessions under Article II:1 and the elimination or reduction of quantitative restrictions under
Article XI of the GATT 1994. In their view, the impugned measures involve the suspension of the
most-favoured-nation principle provided for in Article I:1 of the GATT 1994, since they selectively
exclude imports from specific origins (namely, Colombia, Indonesia, Mexico and Panama) under
cover of Article 9.1 of the Agre ement on Safeguards, thus granti ng those imports an advantage,
favour, privilege or immunity not accorded immediately and unconditionally to the imports of the like
product from the other WTO Members. The compla inants affirm that the impugned measures also
suspend the application of Article II:1(b), second sentence, of the GATT 1994 insofar as they impose
a tariff surcharge other than ordinary customs duties that is not recorded in the Dominican Republic's
schedule of concessions.
107

103 Dominican Republic, reply to Panel questions Nos. 31 and 32. See also, second written submission,
paragraph 4; opening statement at the first meeting of the Panel, paragraphs 13-15; closing statement at the
first meeting of the Panel, paragraphs 4 and 6-7; reply to Panel questions Nos. 46, 48, 49, 176 and 186.
104 Dominican Republic, request for a preliminary ruling, paragraphs 39 and 47-48; opening statement
at the first meeting of the Panel, paragraphs 39-44; reply to Panel question No. 62. See also, second written
submission, paragraphs 26-48.
105 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraphs 4
and 7.
106 Complainants, reply to Panel questions Nos. 39, 40, 41, 54, 55 and 172. See also, opening statement
at the second meeting of the Panel, paragraph 9.
107 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraphs 42(v)
and 109-111 and 122-123; opening statement at the first meeting of the Panel, paragraphs 17 and 133-147;
reply to Panel questions Nos. 26, 27, 39, 40, 41, 45 , 55, 72 and 73. See also, second written submission,
WT/DS415/R,
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7.36 The complainants also point out that, in accord ance with Article 11.1(a) of the Agreement on
Safeguards, the coverage of Article XIX of the GATT 1994 and the Agreement on Safeguards
includes not only measures which a Member "takes" but also all actions undertaken by a Member
with a view to the adoption of safeguard measures, regardless of whether such measures are taken in
the form of a suspension of obligations or the withdrawal or modification of tariff concessions.
108
7.37 Alternatively, and even assuming that the im pugned measures do not result in the suspension
of any obligation under the GATT 1994, the complain ants add that they would still be safeguards
within the meaning of Article XIX for the following reasons: 109 (i) given that the purpose of the
WTO safeguard mechanism is to provide an instrume nt for preventing or remedying a serious injury
to the domestic industry in certain circumstances and for facilitating adjustment, any measure that
goes beyond what is necessary for that objective, in extent or temporal scope, infringes Articles 5 and
7 of the Agreement on Safeguards even if the measure is not inconsistent with the general obligations
of the GATT 1994 110; (ii) the use of the words shall be free in Article XIX:1(a) of the GATT 1994
implies that, in the circumstances described in that provision, a Member has the faculty to suspend a
WTO concession or obligation but may also choose to impose a measure to remedy serious injury that
does not suspend a concession or obligation 111; (iii) after having initiated, conducted and concluded a
safeguard investigation in accordance with Ar ticle XIX of the GATT 1994 and the Agreement on
Safeguards, and having adopted measures as a resu lt of that investigation, the Dominican Republic
cannot try to avoid its obligations under those pr ovisions on the grounds that the measures are not
safeguard measures112; (iv) if a safeguard measure had to c onsist in the suspension of a concession or
obligation, at the time when, as a result of its progr essive liberalization in accordance with Article 7.4
of the Agreement on Safeguards, the measure came to be lower than the bound tariff, it would cease
to be a safeguard and the Member applying it could suspend its liberalization or refuse to continue
granting any compensation113; (v) in accordance with Article 3.1 of the Agreement on Safeguards, if
a Member conducts a safeguard investigation, the ensuing measure will have to be considered a
safeguard regardless of whether it is below or above the bound tariff 114; and (vi) if the interpretation

paragraphs 14-33 and 256-307; opening statement at the second meeting of the Panel, paragraphs 11-21 and
77-80; closing statement at the second meeting of the Panel, paragraphs 5-19; reply to Panel questions Nos. 53,
55, 60, 61, 76, 174-175, 180-181 and 185-186; comments on the Dominican Republic's reply to Panel questions
Nos. 174 and 181-182.
108 Complainants, reply to the Dominican Republic's request for a preliminary ruling,
paragraphs 42 (iii) and 84-91. See also, reply to th e Dominican Republic's request for a preliminary ruling,
paragraph 86; second written submission, paragraphs 34-38; reply to Panel question No. 172.
109 Complainants, reply to the Dominican Republic's request for a preliminary ruling,
paragraphs 42 (iv), 92-93 and 108; opening statement at the first meeting of the Panel, paragraphs 10-11; reply
to Panel question No. 41.
110 Complainants, opening statement at the first meeting of the Panel, paragraphs 18-21. See also, reply
to the Dominican Republic's request for a preliminary ru ling, paragraphs 102-104; second written submission,
paragraphs 42-46; reply to Panel question No. 172.
111 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraphs 94-96.
See also, reply to Panel questions Nos. 41 and 74; second written submission, paragraph 41.
112 Complainants, reply to the Dominican Republic's request for a preliminary ruling,
paragraphs 97-104.
113 Complainants, reply to the Dominican Republic's request for a preliminary ruling,
paragraphs 105-106; opening statement at the first meeting of the Panel, paragraph 27.
114 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraph 107.
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proposed by the Dominican Republic were to be adopted, the impugned measures would escape
multilateral control by the WTO.
115
7.38 In the complainants' view, the impugned measures are the result of an investigation that was
initiated, conducted and concluded by the Domi nican Republic under Article XIX of the GATT 1994
and the Agreement on Safeguards and its domestic legislation on safeguards, that is to say, Law 1-02
and the Regulations of Law 1-02 . As is clear from the text itself of the Commission's Initial
Resolution, Preliminary Resolution and Definitive R esolution, in the investigation that led to the
imposition of the impugned measures and in the decisions adopted (such as the decision to exclude
certain countries from the application of the measur es and the establishment of a timetable for their
progressive liberalization), the competent authority of the Dominican Republic invoked as their basis
the multilateral rules and domestic legislation on safeguards and not any other rules, such as for
example Law 146-00 , the domestic legislation governing the imposition of customs tariffs. This is
allegedly confirmed by statements and declarati ons made by the Dominican Republic, such as the
press release issued at the conclusion of the inve stigation and the explanations provided in the
WTO Committee on Safeguards.
116
7.39 The complainants argue that both the impugned measures and other related acts (such as the
initiation of the investigation and the Resolution of April 2011 on the gradual removal of the
definitive measure) were notified by the Domini can Republic to the WTO Committee on Safeguards
under the multilateral procedures provided for safeguard measures applied pursuant to Article XIX of
the GATT 1994 and the Agreement on Safeguards. In none of these notifications did the
Dominican Republic indicate that the notified measures were not safeguards; on the contrary, the
Dominican Republic referred to the notified meas ures respectively as the "provisional safeguard
measure" and the "definitive safeguard measure".
117
7.40 The complainants add that, even if the Panel were to conclude that Article XIX of the
GATT 1994 and the Agreement on Safeguards are not applicable to the impugned measures, it would
still have to consider the claims put forward by the complainants with regard to other aspects, such as
those relating to the investigation in itself, th e notifications to the WTO Committee on Safeguards,
and the lack of consultations under the Agreement on Safeguards, as well as the alternative claims
under Articles I:1 and II:1(b), second sentence, of the GATT 1994.118
2. Main arguments of the third parties
(a) Colombia
7.41 Colombia contends that the use of the words "shall be free" in Article XIX of the GATT 1994
means that Members who are in the circumstances described in that Article have the "faculty" to

115 Complainants, reply to the Dominican Republic's request for a preliminary ruling,
paragraphs 97-101; second written submission, paragraphs 44-46.
116 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraphs 42(i),
43 and 48-73; opening statement at the first meeting of the Panel, paragraphs 13-15; reply to Panel
question No. 40.
117 Complainants, reply to the Dominican Republic's re quest for a preliminary ruling, paragraphs 42(ii)
and 75-83; opening statement at the first meeting of the Panel, paragraph 15. See also, reply to Panel
questions Nos. 45 and 53.
118 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraphs 6 and
112-123; opening statement at the first meeting of the Panel, paragraphs 10-11 and 132. See also, reply to
Panel question No. 56; opening statement at the second meeting of the Panel, paragraphs 22-26.
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suspend in whole or in part a concession incurred with respect to a product, or to withdraw or modify
it. Regardless of whether or not a safeguard i nvestigation ends in the suspension of concessions
granted under Article II of the GATT 1994, the pro cedure will be governed by the provisions of
Article XIX of the GATT 1994 and the Agreement on Safeguards. Colombia also argues that the
preamble to the Agreement on Safeguards reflects the intention of the WTO Members to establish
multilateral control over safeguard measures and to limit the measures that escape such control.
Therefore, if the Member applying a measure it self initially describes it as a safeguard, the WTO and
the other Members have to consider it as such. On this basis, Colombia suggests that Article XIX of
the GATT 1994 and the Agreement on Safeguards are a pplicable to the impugned measures, adding
that the Panel should rule on this point before going any further with its substantive analysis.
119
7.42 Lastly, Colombia suggests that the word "obligation" in Article XIX of the GATT 1994
should be construed as referring to any obligatio n under the GATT 1994 other than those established
in Article I and Article II:1(a).120
(b) United States
7.43 The United States suggests that Article XIX:1(a) of the GATT 1994 does not contain any
definition or description of the word "obligation" ot her than that they are obligations incurred "under
this Agreement" (the GATT 1994). The obligations include tariff concessions under Article II:1 of
the GATT 1994, as well as the obligation relating to qua ntitative restrictions in Article XI:1 of the
GATT 1994. In the view of the United States, the wo rd "obligation" could also include the obligation
under Article I:1 of the GATT 1994, as otherwise Ar ticle 2.2 of the Agreem ent on Safeguards would
be superfluous and would create a conflict between Article 9.1 of the Agreement on Safeguards and
the most-favoured-nation principle in Article I:1 of the GATT 1994.121
7.44 The United States adds that, in the circumst ances of the present dispute, if the impugned
measures did not suspend obligations under the GATT 1994, it is not clear that they would necessarily
be safeguards. In any case, the United States stre sses that the Dominican Republic appears to have
considered the measures to be safeguards, for example when notifying them to the WTO and by
invoking Article 9.1 of the Agreement on Safegua rds to exclude certain countries from their
application. The exclusion of those countries means that the Dominican Republic suspended its
obligations contained in Article I:1 of the GATT 1994.122
(c) Nicaragua
7.45 Nicaragua rejects the Dominican Republic's argument that the impugned measures are not
subject to the obligations of Article XIX of th e GATT 1994 and the Agreement on Safeguards. In
Nicaragua's opinion, this argument is inconsiste nt with those provisions and impairs the rights
accruing to Members under the WTO Agreement.123

119 Colombia, third party written submission, paragraphs 15-22. See also, reply to Panel
question No. 23.
120 Colombia, reply to Panel question No. 2, paragraph 15. See also, Ibid. paragraphs 2-16.
121 United States, reply to Panel question No. 2, paragraphs 6-9.
122 United States, reply to Panel question No. 3. See also, United States, third party statement,
paragraphs 4-6; reply to Panel question No. 25.
123 Nicaragua, third party written submission, paragraphs 7-9.
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(d) European Union
7.46 The European Union contends that the determin ation as to whether a measure is a safeguard
provided for in Article XIX of the GATT 1994 is an objective one that must be made taking into
consideration the structure and design of each measure. The subjective purpose of the Member
applying the measure may offer a useful indication, but will never be dispositive since otherwise the
applicability of the Agreement on Safeguards would be at the discretion of the Member applying the
measure. In the opinion of the European Union, the circumstance that the measures in question are
aimed at preventing or remedying injury caused by an increase in imports is a necessary but not alone
a sufficient condition for determining the applicability of the Agreement on Safeguards.
124
7.47 The European Union suggests that a distinc tion should be drawn between the question of
whether a measure is a safeguard provided for in Article XIX of the GATT 1994 and the question of
whether a measure is consistent with the requirement s imposed by Article XIX. If that distinction is
not made, it would never be possible to determine wh ether a measure is inconsistent with Article XIX
of the GATT 1994. The European Union proposes that a measure may be considered a safeguard of
the kind provided for in Article XIX of the GATT 1994 when it combines the following two features:
(i) it seeks to remedy injury caused by an increase in imports; and (ii) it involves the suspension of an
obligation or the withdrawal or modification of a concession under the GATT 1994. In the view of
the European Union, to deny the relevance of the second of these features would be to fail to
recognize the specific function of Article XIX in th e context of the GATT 1994, namely, to authorize
emergency measures that would otherwise be prohibited by the GATT 1994.125
7.48 The European Union points out that its comments do not necessarily mean that the impugned
measures fall outside the scope of the Agreem ent on Safeguards. Firstly, because, as the
complainants argue, the impugned measures entail the suspension of obligations incurred by the
Dominican Republic under the GATT 1994, insofar as they do not apply to imports of like products
originating in all WTO Members. In this conne ction, the European Union asserts that one may
deduce from the ordinary meaning of the wording of Article XIX:1(a) of the GATT 1994 that the
word obligation is not confined to tariff concessions under Article II:1 nor the provision on
quantitative restrictions under Article XI of the GATT 1994, but also includes the obligations of
Article I:1. 126 Secondly, because as the complainants also maintain, by the application of
Article 11.1(a) of the Agreement on Safeguards, that Agreement is not confined to safeguards which
the Member has adopted but also applies to inv estigations initiated with a view to the possible
imposition of a safeguard, even where subsequently such a measure is not im posed as a consequence
of the investigation. With regard to the second point, however, the European Union adds that if the
Panel were to conclude that the impugned measur es are not covered by the Agreement on Safeguards
(because they do not suspend any obligation unde r the GATT 1994), a finding that any of the
procedural requirements is inconsistent with the Agreement on Safeguards could not lead the Panel to
go on to conclude that the provisional measure or the definitive measure are therefore inconsistent
with the Agreement on Safeguards.127

124 European Union, third party written submission, paragraphs 4 and 7.
125 European Union, third party written submission, para graphs 8-9. See also, reply to Panel questions
Nos. 3 and 6.
126 European Union, third party written submission, paragraph 15; reply to Panel questions Nos. 2
and 7.
127 European Union, third party written submission, paragraphs 13-14; reply to Panel question No. 7.
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7.49 On the other hand, the European Union disagr ees with the complainants' argument that the
impugned measures also entail a suspension of Article II:1(b) of the GATT 1994; in its opinion, the
intention of the Dominican authorities was to increa se the rate of the applicable ordinary customs
duty, and not to apply other duties or charges in addition to the ordinary customs duty.
128
3. Assessment by the Panel
(a) Introductory comment
7.50 The question before this Panel concerning the a pplicability of the covered agreements may be
described as follows: Are the impugned measures in this case measures of the type provided for in
Article XIX of the GATT 1994? If the answer is yes, by application of Article 1 of the Agreement on
Safeguards, whereby "safeguard measures" shall be understood to mean "those measures provided for
in Article XIX of the GATT 1994", the impugned me asures will be considered safeguards for the
purposes of Article XIX of the GATT 1994 and the Agreement on Safeguards. In that case, both
Article XIX of the GATT 1994 and the Agreement on Safeguards will be applicable to the present
dispute.
7.51 Before taking up the substantive analysis of the question, the Panel notes that an unusual
situation arises in the present case.
7.52 Firstly, the main argument cited by the compla inants to support their assertion concerning the
applicability of Article XIX of the GATT 1994 and th e Agreement on Safeguards to this dispute is
that the impugned measures constitute a suspension of obligations of the Dominican Republic under
Articles I:1 and II:1(b), second sentence, of the GATT 1994.
7.53 As reflected in the discussion between the parties and the views given by the third parties, the
Panel notes at the outset that in none of the previ ous disputes raised in the WTO dispute settlement
system have the parties alleged that the im pugned measures described as safeguards suspended
obligations other than those contained in Article II or Article XI of the GATT 1994. This is reflected
in the language used by the Appellate Body in its report in Argentina – Footwear (EC):
[I]t must always be remembered that safeguard measures result in the temporary
suspension of concessions or withdrawal of obligations, such as those in Article II
and Article XI of the GATT 1994, which are fundamental to the WTO Agreement.129
7.54 Recognized authorities in this field also refer to the fact that the safeguards provided for in
GATT Article XIX allow Members to take action whic h would otherwise be incompatible with their
obligations under GATT Articles II and XI, i.e. the levying of tariffs above the bound level and the
imposition of quantitative restrictions.130
7.55 The question of whether the invocation of the clause of GATT Article XIX allows a Member
to escape the most-favoured-nation treatment obligation in GATT Article I, and in particular whether,
under GATT Article XIX, safeguard measures must be applied to imported products in a

128 European Union, third party written submission, paragraph 16.
129 Appellate Body Report, Argentina – Footwear (EC), paragraph 95 (italics in the original).
130 See, for example, P. Van den Bossche, The Law and Policy of the World Trade Organization: Text,
Cases and Materials (Cambridge University Press, 2008), p. 685; O. Long, Law and its Limitations in the
GATT Multilateral Trade System (Martinus Nijhoff Publishers, 1985), pp. 57-58.
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non-discriminatory manner and regardless of their origin or may be applied selectively, has been
extensively discussed by commentators.
131 Much of this work refers to the GATT situation prior to
the entry into force of the Uruguay Round Agreements.
7.56 Secondly, it also appears unusual that a Memb er should refuse that a measure which it has
taken be described as a safeguard despite the fact th at the measure: (i) was taken by the Member with
the stated objective of remedying a situation of ser ious injury to the domestic industry brought about
by an increase in imports; (ii) was the result of a procedure based, inter alia , on the rules and
procedures of Article XIX of the GATT 1994 and the Agreement on Safeguards; and (iii) was
notified as a safeguard measure by the Member taking it to the WTO Committee on Safeguards and
under the procedures provided for in Article XIX of the GATT 1994 and the Agreement on
Safeguards.
7.57 In addition, the Panel notes as a matter of fact that, in the present dispute, even at their highest
the impugned measures were duties equivalent to 38 per cent ad valorem , below the level of
40 per cent ad valorem bound by the Dominican Republic for the two products in its schedule of
concessions. Additionally, the tariff applied by th e Dominican Republic prior to the imposition of the
impugned measures, and which will re-enter into force as from 21 April 2012 when the impugned
definitive measure expires, which is the equivalent respectively of 14 per cent ad valorem for tubular
fabric and 20 per cent ad valorem for polypropylene bags, is significantly lower than the 40 per cent
ad valorem level bound by the Dominican Republic. The circumstance that a Member applies a tariff
lower than the binding in its schedule of concessi ons is not unusual. In the present case, this
circumstance meant that in practice, when adopting measures to remedy a possible situation of serious
injury to the domestic industry caused by an incr ease in imports, the Dominican Republic did not see
fit to withdraw or modify its tariff commitments with respect to the products in question under its
schedule of concessions.
7.58 In any case, the Panel notes that, in the light of Article 11 of the DSU, its functions include
making an objective assessment of the applicability of the provisi ons of the covered agreements
invoked in the dispute. The Panel agrees with the parties that the determination on applicability must
be a prior step to the analysis of whether the impugned measures are consistent with the obligations
contained in the cited provisions.
132
7.59 In order to reach a conclusion on the applicab ility of the covered agre ements invoked, the
Panel's starting point must be the text of the releva nt provisions, in the context of the terms of the
treaty and taking into account the object and purpose of the agreements.
7.60 Having taken the foregoing into account, the Pa nel will consider the complainants' argument
that the impugned measures constitute a suspension of obligations of the Dominican Republic under
Articles I:1 and II:1(b), second sentence, of the GATT 1994. 133 The complainants have stated in this

131 See, for example, the account of the discussion on th is legal issue in J. H. Jackson, W. J. Davey and
A. O. Sykes, Jr., Legal Problems of International Economic Relations (West Publishing Co., 1995). See also,
J. H. Jackson, World Trade and the Law of GATT (The Michie Company, 1969), pp. 564-565, Exhibit RDO-28.
132 See, for example, complainants, reply to the Dominican Republic's request for a preliminary ruling,
paragraph 33; Dominican Republic, request for a preliminary ruling, paragraph 24. See also, for example,
Appellate Body Reports, China – Auto Parts , paragraph 139; Canada – Autos , paragraph 151; and US –
Shrimp, paragraph 119.
133 None of the parties has indicated that the impugne d measures constitute withdrawal or modification
of a tariff concession incurred by the Dominican Republic by virtue of its obligations under Articles II:1(a) and
II:1(b), first sentence, of the GATT 1994.
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connection that if the Panel were to conclude th at the impugned measures are safeguards because they
involve the suspension of obligations of the Dominican Republic under the GATT 1994, they would
not request additional findings concerning the ap plicability of Article XIX of the GATT 1994 and the
Agreement on Safeguards.
134
(b) Whether the impugned measures suspend obliga tions contained in Article I:1 of the
GATT 1994
7.61 The complainants assert that the impugned m easures suspend the most-favoured-nation
treatment obligation in Article I of the GATT 1994, in that they selectively exclude imports from
specific origins (namely, Colombia, Indonesia, Mexi co and Panama), thereby granting those imports
an advantage, favour, privilege or immunity not accorded immediately and unconditionally to imports
of like products from the other WTO Members. The Dominican Republic replies that Article XIX of
the GATT 1994 does not authorize suspending the obligation in Article I of the GATT 1994, but only
permits the suspension of tariff concessions and ob ligations and the obligations relating to such
concessions, under GATT Article II:1, and the prohi bition on imposing quantitative restrictions under
GATT Article XI, so that even if they impugned me asures suspend the obligation contained in Article
I this does not imply that they fall within GATT Article XIX and the Agreement on Safeguards.
7.62 Article I:1 of the GATT 1994 describes the oblig ation of most-favoured-nation treatment as
follows:
With respect to customs duties and charg es of any kind imposed on or in connection
with importation or exportation or imposed on the international transfer of payments
for imports or exports, and with respect to the method of levying such duties and
charges, and with respect to all rules a nd formalities in connection with importation
and exportation, and with respect to all matte rs referred to in pa ragraphs 2 and 4 of
Article III, any advantage, favour, privilege or immunity granted by any contracting
party to any product originating in or destined for any other country shall be accorded
immediately and unconditionally to the like pr oduct originating in or destined for the
territories of all other contracting parties. (Supplementary note to the Article not
reproduced.)
7.63 Article XIX:1(a) of the GATT 1994 provides:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a contracting party under this Agreement, including tariff concessions , any
product is being imported into the territory of that contracting party in such increased
quantities and under such conditions as to cause or threaten serious injury to domestic
producers in that territory of like or directly competitive products, the contracting
party shall be free, in respect of such product , and to the extent and for such time as
may be necessary to prevent or remedy such injury, to suspend the obligation in
whole or in part or to wit hdraw or modify the concession . (Without italics in the
original.)
7.64 Thus, the text of Article XIX:1(a) does not expressly limit the obligations of the GATT 1994
that may be suspended by invoking that provision. The paragraph contains two references to the word
obligation. First, it refers to the obligations incurred by a Member under the GATT 1994, including

134 Complainants, reply to Panel question No. 41.
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tariff concessions, which have had the effect of increasing imports. Second, it refers to the obligation
in respect of the product in question which the Member is authorized to suspend in whole or in part,
including the possibility of withdrawing or modifying the tariff concession. The Panel agrees with the
Dominican Republic that the language of the Article suggests that the words obligation and
concession in the final part of the paragraph (" obligación" and " concesión" in Spanish and
"engagement" and "concession" in French) refer to the words obligations and concessions in the first
part ("obligaciones" and "concesiones arancelarias" in Spanish and "engagements" and "concessions"
in French).
135 This is suggested by the parallelism in the terms and the use of the word the in the final
part of the paragraph in " the obligation" and " the concession". Otherwise, and if there was no link
between the two expressions, the last part of the paragraph could have said "the contracting party shall
be free, in respect of such product … to suspend an obligation in whole or in part or to withdraw or
modify a concession".
7.65 According to one of the first studies publis hed on the GATT legal system, the preparatory
work of the GATT 1947 suggests that the most-f avoured-nation treatment was not among the GATT
obligations that could be suspended by invoking the safeguard clause of Article XIX. The author of
this study, however, also stated that the expr ession "obligation incurred under the GATT" is as broad
as the GATT itself. In the author's words, while the preparatory work of the GATT suggests that the
expression covers both tariff concessions and the prohibition on quantitative restrictions, "the
language seems even broader".136
7.66 Now, with the entry into force of the WTO Agreement the obligations contained in
Article XIX of the GATT 1994 cannot be read in isola tion but rather always together with and in the
context of the provisions of the Agreement on Safe guards. As the Appellate Body has observed,
unlike the earlier GATT system, the WTO Agreemen t constitutes a single instrument that was
accepted by the WTO Members as a " single undertaking"137 (in Spanish, "todo único", and in French,
"engagement unique "). Accordingly, the obligations under the WTO agreements are generally
cumulative and Members must comply with all of them simultaneously. 138 The Appellate Body has
also noted that both the provisions of Article XIX of the GATT 1994 and those of the Agreement on
Safeguards are part of one and the same treaty, the WTO Agreement.
139 As a result of the agreements
reached during the Uruguay Round, both the GATT 1994 and the Agreement on Safeguards are part
of Annex 1 of one and the same agreement (WTO Agreement). Accordingly, Article XIX of the
GATT 1994 and the Agreement on Safeguards are an inseparable package of rights and disciplines
that must be considered simultaneously.140

135 Dominican Republic, reply to Panel question No. 61.
136 J. H. Jackson, World Trade and the Law of GATT (The Michie Company, 1969), p. 559.
137 Appellate Body Report, Brazil – Desiccated Coconut, p. 14.
138 Appellate Body Report, Korea – Dairy, paragraph 74.
139 They entered into force as part of that treaty at the same time. They apply equally and are equally
binding on all WTO Members. … [Yet] a treaty interpreter mu st read all applicable provisions of a treaty in a
way that gives meaning to all of them, harmoniously … an appropriate r eading of this "inseparable package of
rights and disciplines" must, accordingl y, be one that gives meaning to all the relevant provisions of these two
equally binding agreements.

Appellate Body Report, Argentina – Footwear (EC), paragraph 81 (italics in the original).

140 Appellate Body Reports, Brazil – Desiccated Coconut, p. 16 (quoting the Panel Report in Brazil –
Desiccated Coconut, paragraph 227); Korea – Dairy Products, paragraph 74; and Argentina – Footwear (EC),
paragraph 81. The Appellate Body reached simila r conclusions with respect to the Agreement on
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7.67 With regard to whether safeguard measu res must generally comply with the
most-favoured-nation obligation in Article I of the GATT 1994, Article 2.2 of the Agreement on
Safeguards provides that: "Safeguard measures shall be applied to a product being imported
irrespective of its source."
7.68 In any case, it is an undisputed fact that both the provisional measure and the definitive
measure exclude imports originating in Colomb ia, Indonesia, Mexico and Panama from their
application and therefore result in more favourable treatment for those imports. In the case of both
measures, the Commission's Resolutions justify this exclusion on the grounds of Article 9.1 of the
Agreement on Safeguards and Article 72 of Law 1-02 , insofar as the countries mentioned are
developing countries which together represent barely 1.21 per cent of the investigated imports.
141
This means that the impugned measures were not a pplied to the relevant products being imported
"irrespective of their source", but ra ther in fact excluded imports originating in four countries. This
aspect of the measures is inconsistent with the ge neral most-favoured-nation treatment provided for in
Article I:1 of the GATT 1994, in that the Domini can Republic accorded products originating in these
four countries an advantage, favour, privilege or immunity without immediately and unconditionally
extending it to like products originating in the terr itories of all other contracting parties. The Panel
notes in this respect that the Dominican Republic has admitted that the exclusion of imports
originating in Colombia, Indonesia, Mexico and Pana ma from the application of the measure "may be
problematic".142
7.69 The Dominican Republic has not put forward any argument to rebut the fact that the
impugned measures are inconsistent with the general most-favoured-nation treatment of Article I:1 of
the GATT 1994. In its opinion, however, ev en if the measures suspended general
most-favoured-nation treatment, this would not be enough for the Panel to conclude that they
constituted a suspension of obligations within the meaning of Article XIX:1(a) of the GATT 1994.
The Dominican Republic asserts, among other arguments 143, that interpreting the suspension of
obligations in the final part of Article XIX:1(a) of the GATT 1994 as covering a suspension of the
general most-favoured-nation obligation in Article XIX:1 of the GATT 1994 would lead to a conflict
between Article XIX:1(a) of the GATT and the Ag reement on Safeguards, which expressly prohibits
the discriminatory application of safeguards.

Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement)
and GATT Article VI in its Report in US -1916 Act. In this last case the Appellate Body noted:

Article VI of the GATT 1994 and the Anti-Dumping Agreement are part of the same treaty, the
WTO Agreement. As its full title indicates, the Anti-Dumping Agreement is an "Agreement on
implementation of Article VI of the Genera l Agreement on Tariff s and Trade 1994".
Accordingly, Article VI must be read in conjunction with the provisions of the Anti-Dumping
Agreement …

Appellate Body Report, US – 1916 Act, paragraph 114 (italics in the original).

141 Although the preliminary and definitiv e Resolutions refer to Article 82 of Law 1-02, in its written
submissions the Dominican Republic refers to Article 72, which it says is the correct article. In the case of the
definitive Resolution issuing the final decision and imposing the impugned definitive measure, the Commission
also cited the Regulations of Law 1-02. Definitive Resolution, CEGH-9, paragraph 42.
142 Dominican Republic, closing statement at the firs t meeting of the Panel, paragraph 17; reply to
Panel question No. 52.
143 See paragraph 7.27 of this Report.
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7.70 The Panel is not convinced by this argumen t. The Agreement on Safeguards expressly
authorizes certain waivers, particularly under Article 9, of the general most-favoured-nation treatment
and the requirement that safeguard measures shoul d not be applied in a discriminatory manner.
Article 9.1 of the Agreement on Safeguards provides:
Safeguard measures shall not be applied agai nst a product originating 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 the product concerned. (Footnote not reproduced.)
7.71 The Dominican Republic has expressly invoked Ar ticle 9 of the Agreement on Safeguards as
the legal justification under the WTO agreements for excluding imports from Colombia, Indonesia,
Mexico and Panama from the application of the impugned measures.
144
7.72 Taking into account the foregoing, the Panel does not consider it correct to affirm that if
Article XIX:1(a) of the GATT 1994 is interpreted to include the possibility of suspending the general
most-favoured-nation treatment obligation in Artic le I:1 of the GATT 1994, this would necessarily
lead to a conflict between GATT Article XIX:1(a) and the Agreement on Safeguards.
7.73 In conclusion, the Panel considers that the impugned measures have in fact meant a
suspension of the most-favoured-nation treatment in Article I:1 of the GATT 1994 and therefore
represent the suspension of an obligation incu rred by the Dominican Republic under GATT 1991
within the meaning of Article XIX:1(a) of the GATT 1994.
(c) Whether the impugned measures suspend obligations contained in Article II:1(b),
second sentence, of the GATT 1994
7.74 Once the Panel has concluded that the impugned me asures have in fact meant a suspension of
the most-favoured-nation treatment obligation in Ar ticle I:1 of the GATT 1994 with respect to the
products concerned, there is no need to consider further whether those measures also constitute the
suspension of obligations incurred by the Domini can Republic under Article II:1(b), second sentence,
of the GATT 1994. For the fact that, by invoking Article XIX of the GATT 1994 or the Agreement
on Safeguards, the impugned measures suspended in whol e or in part at least one obligation incurred
by the Dominican Republic under the GATT 1994 with respect to the products concerned is
sufficient, in the circumstances of the present case, to establish the applicability of Article XIX of the
GATT 1994 and the Agreement on Safeguards to this dispute.
7.75 Nevertheless, the Panel will al so consider whether the impugne d measures also constitute a
suspension of obligations of the Dominican Repub lic under Article II:1(b), second sentence, of the
GATT 1994.
7.76 The complainants affirm that the impugned measures also suspend the application of
Article II:1(b), second sentence, of the GATT 1994 in th at they impose a tariff surcharge other than
ordinary customs duties that is not recorded in th e Dominican Republic's schedule of concessions. As
mentioned above, the Dominican Republic replies that Article XIX of the GATT 1994 only authorizes
the suspension of tariff concessions and obligations relating to those concessions under Article II:1 of

144 See, for example, Preliminary Resolution, Exhibit CEGH-5, paragraph 51; and Definitive
Resolution, Exhibit CEGH-9, paragraph 42.
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the GATT 1994 and the prohibition on imposing quan titative restrictions under Article XI of the
GATT 1994. The Dominican Republic also conte nds that the impugned provisional measure and
definitive measure consisted in the adoption of an ad valorem tariff of 38 per cent which constituted
an ordinary customs duty not exceeding the Dominican Republic's binding in the WTO and that it did
not suspend obligations under Article II:1(b) of the GATT 1994.
7.77 Article II:1(b) of the GATT 1994 provides as follows:
The products described in Part I of the Sc hedule relating to any contracting party,
which are the products of territories of other contracting parties, shall, on their
importation into the territory to which the Sc hedule relates, and subject to the terms,
conditions or qualifications set forth in that Schedule, be exempt from ordinary
customs duties in excess of those set forth and prov ided therein. Such products shall
also be exempt from all other duties or charges of any kind imposed on or in
connection with the importation in excess of those imposed on the date of this
Agreement or those directly and mandator ily required to be imposed thereafter by
legislation in force in the importing territory on that date. (Without italics in the
original.)
7.78 In other words, Article II:1(b) of the GATT 1994 in principle prohibits: (i) the levying of
ordinary customs duties in excess of the ceilings set forth in the Schedule of the importing Member
concerned (first sentence); and (ii) the levying of other duties or charges of any kind imposed on or in
connection with importation (second sentence), in excess of those imposed on the date of entry into
force of the GATT 1994 or those directly and mandato rily required to be imposed thereafter by
legislation in force in the importing Member on that date. The Understanding on the Interpretation of
Article II:1(b) of the General Agreement on Ta riffs and Trade 1994 provides that the importing
Member had to record in its schedule of concessions the other duties or charges applied on the date of
entry into force of the GATT 1994 or which had to be applied directly and mandatorily under
legislation in force on that date.
145 Article II:2 contains a list of measures which may be imposed on
the importation of any product, irrespective of th e content of Article II:1(b), which include:
(i) charges equivalent to internal taxes levied on like domestic products or in respect of articles from
which the imported product has been manufactured; (ii) anti-dumping or countervailing duties; and
(iii) fees or other charges commensurate with the cost of services rendered.
7.79 The use of the expression " all other duties or charges of any kind imposed on or in
connection with the importation" in Article II:1( b), second sentence, suggests that the prohibition
covers any duty or charge of any kind on or in conn ection with the importation that is not an ordinary
customs duty.
146 In other words, the category of other duties or charges under Article II:1(b),
second sentence, is a residual one covering all du ties or charges on or in connection with the
importation that are not ordinary customs duties 147 and which are not expressly provided for in
Article II:2 of the GATT 1994.

145 See Dominican Republic, reply to Panel question No. 182.
146 Save for certain exceptions, such as duties or charges applied or mandatorily required to be applied
on the date of the agreement. See in this connection the provisions of the Understanding on the Interpretation of
Article II:1(b) of the General Agreement on Tariffs and Trade 1994.
147 Complainants, reply to Panel question No. 181; Dominican Republic, reply to Panel
question No. 181.
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7.80 It is therefore necessary to consider whethe r the impugned measures may be categorized as
"ordinary customs duties" within the meaning of Article II:1 of the GATT 1994 or whether on the
contrary, and as the complainants affirm, they are "other duties or charges".
7.81 The expression "ordinary customs duties" appears in the Spanish text as " derechos de aduana
propiamente dichos " and in French as " droits de douane proprement dits ". Applying the
interpretative rule of Article 33 of the Vienna Conv ention, it must be presumed that the terms of the
agreement have the same meaning in each authentic text (Spanish, E nglish and French). In addition,
if a comparison of the various authentic texts reveal s a difference in meaning, the meaning that best
reconciles the texts, bearing in mind the object and purpose of the agreement, should in principle be
adopted.
7.82 In Spanish, the word " propiamente" used in " propiamente dichos " is related to the word
"propiedad" [property], in the sense of "atributo o cualidad esencial" [essential attribute or quality] of
something.
148 Hence, a " derecho de aduana propiamente dicho " would be a duty that possesses the
essential attributes or qualities of customs duties. " Proprement" in the French expression
"proprement dits " relates to the strict meaning in which an expression is used. 149 In other words,
while a Member may impose various duties at the border, the expressions customs duty " propiamente
dicho" and customs duty " proprement dit " emphasize that the scope of the provision is limited to
customs duties in the strict sense of the term (stricto sensu).
7.83 The expression used in the text in English sugg ests a slightly different shade of meaning.
"Ordinary" is defined as "Belonging to or occurring in regular custom or practice; normal, customary,
usual". The contrary is "Extraordinary". 150 In Spanish, " Ordinario" is defined as " Común, regular y
que sucede habitualmente " [Common, regular and usually occurring]. The contrary would be
"extraordinario" [extraordinary] or " inusual" [unusual]. 151 In French, " Ordinaire" is defined as
"Conforme à l'ordre normal, habituel des choses " [in conformity with the normal, usual order of
things] or "courant, habituel, normal, usuel" [current, customary, normal, usual]. The contrary would
be "anormal" [abnormal], "exceptionnel" [exceptional] or "extraordinaire" [extraordinary].152
7.84 In its report in Chile – Price Band System , the Appellate Body made it clear that what
determines whether "a duty imposed on an import at the border" constitutes an ordinary customs duty
is not the form which that duty takes. 153 Nor is the fact that the duty is calculated on the basis of
exogenous factors, such as the interests of consumers or of domestic producers. 154 T h e
Appellate Body also explained that a Member may pe riodically change the rate at which it applies an
"ordinary customs duty", provided it remains below the rate bound in the Member's schedule. 155 This
change in the applied rate of duty could be made, for example, through an act of the Member's
legislature or executive at any time. However, one essential feature of "ordinary customs duties" is
that any change in them is discontinuous and unrelated to an underlyi ng scheme or formula. 156 The

148 Diccionario de la Lengua Española, 22nd Ed. (Real Academia Española, 2001), p. 1252.
150 Shorter Oxford English Dictionary, 6th Ed. (Oxford University Press, 2007), vol. 2, p. 2021.
151 Diccionario de la Lengua Española , 22 nd Ed. (Real Academia Española, 2001), pp. 695, 878
and 1105.
153 Appellate Body Report, Chile – Price Band System, paragraph 216.
154 Appellate Body Report, Chile – Price Band System, paragraphs 271-278.
155 Appellate Body Report, Chile – Price Band System , paragraph 232 (in which it quotes the
Appellate Body Report, Argentina – Textiles and Apparel, footnote 56 to paragraph 46).
156 Appellate Body Report, Chile – Price Band System, paragraphs 232-233.
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Appellate Body noted that the price band system impugned in that case contained an inherent
variability and had the effect of impeding the tran smission of international price developments to
Chile's market in the way in which ordinary customs duties normally would, also generating in its
application a lack of transparency and predictability with respect to market access conditions.
157
7.85 All in all, using a meaning that seeks to rec oncile the texts of the GATT 1994 in the various
official languages, we could conclude that the expr ession "ordinary customs duties" in Article II:1(b)
of the GATT 1994 refers to duties collected at the border which constitute "customs duties" in the
strict sense of the term (stricto sensu) and that this expression does not cover possible extraordinary or
exceptional duties collected in customs. This woul d be compatible with the object and purpose of the
GATT 1994 which, as the Appellate Body said in Chile – Price Band System, seeks to ensure that the
application of customs duties gives rise to tran sparent and predictable market access conditions and
does not impede the transmission of international pr ice developments to the domestic market of the
importing country. To reach a conclusion in this respect, the Panel must consider the design and
structure of the measures concerned.
7.86 In the present case, while the impugned measures ar e duties levied in customs, considering
their design and structure they are "extraordinary" or "exceptional" and not "ordinary" measures. The
Definitive Resolution whereby the Commission issu ed its final decision and imposed the impugned
definitive measure speaks of a " tariff of the order of thirty-eight per cent (38%) ad-valorem"
(emphasis added) applied "definitively". However, the same Resolution states that the measure shall
be applied only for a period of 18 months, that the duty is subject to a six-monthly reduction process
and that in practice the measure does not at all replace - but rather coexists with - the MFN tariff. In
other words, the impugned measures do not constitute th e ordinary tariff that is normally applicable
nor do they replace that tariff by a new tariff applied under the most-favoured-nation treatment. 158
Instead, the impugned measures replace the ordinary tariff temporarily and only for imports
originating in certain Members. For imports or iginating in other Members (Colombia, Indonesia,
Mexico and Panama) the MFN tariff remains applicable. 159 Moreover, although from the formal
standpoint the measure does not constitute a tariff surcha rge, it is designed in such a way that, at least
for a period, it has resulted de facto in the collection of an additional duty above the MFN tariff
rate.160
7.87 The Dominican Republic has stated that, "as l ong as the increased tariff is in force, the
MFN tariff normally applicable is not in force". 161 In the opinion of the Panel, this confirms that the
measures are something distinct from the normally a pplicable tariff. As they are temporary and
extraordinary measures coexisting with the MFN tariff applicable to imports from certain origins, and
taking into account the fact that they are not any of the measures listed in Article II:2 of the

157 Appellate Body Report, Chile – Price Band System, paragraphs 246-251.
158 Furthermore, as the complainants point out, the impugned measures were adopted on the basis of the
domestic legislation and multilateral rules on safeguards and not of some other rules, such as Law 146-00, which
is the domestic legislation governing tariff matters in the Dominican Republic. See paragraph 7.38 of this
Report.
159 Dominican Republic, reply to Panel question No. 177.
160 As of 16 March 2010 (date of entry into force of the provisional measure) the measures resulted in
duties of between 28 per cent ad valorem and 38 per cent ad valorem, whereas the MFN tariff applicable to
imports originating in Colombia, Indonesia, Mexico and Panama remained 14 per cent ad valorem for tubular
fabric and 20 per cent ad valorem for polypropylene bags.
161 Dominican Republic, opening statem ent at the first meeting of the Panel, paragraph 47. See also,
opening statement at the second meeting of the Panel, paragraph 25.
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GATT 1994, the impugned measures represent a duty or char ge on imports that is distinct from the
"ordinary customs duty".
7.88 Thus, in the light of the current terms used in Article II:1(b) of the GATT 1994, since the
impugned measures are not "ordinary customs duti es" nor any of the measures provided for in
Article II:2 of the GATT 1994, by definition they mu st be other "duties or charges … imposed on or
in connection with the importation". Furthermore, it is undisputed that the impugned measures are
not recorded in the Dominican Republic's schedul e of concessions and do not correspond to duties or
charges that the Dominican Republic applied at the date of entry into force of the GATT 1994 or was
required to apply as a direct and mandatory cons equence of legislation in force on that date.
162
Consequently, since they result in the levying of such duties or charges, the impugned measures have
suspended the obligations of the Dominican Republ ic under Article II:1(b), second sentence, of the
GATT 1994 with respect to the import duties imposed on the imported products concerned.
(d) Conclusion
7.89 For the reasons explained above, the Panel concludes that the complainants have
demonstrated that the impugned measures have resulte d in a suspension of obligations incurred by the
Dominican Republic under the GATT 1994. That bei ng so, and taking into account also that the
impugned measures were taken by the Dominican Republic with the objective of remedying a
situation of serious injury to the domestic industr y brought about by an increase in imports, were the
result of a procedure based, inter alia , on the provisions and procedures of Article XIX of the
GATT 1994 and the Agreement on Safeguards and we re notified by the Dominican Republic as
safeguard measures to the WTO Committee on Safegua rds and under the procedures provided for in
Article XIX of the GATT 1994 and the Agreement on Safeguards, the Panel concludes that the
provisions of Article XIX of the GATT 1994 and th e Agreement on Safeguards are applicable to the
examination it has to make of the claims raised in the present dispute.
7.90 Considering that the impugned measures have suspended obligations of the
Dominican Republic under the GATT 1994, the question as to whether a measure may be considered
a safeguard and examined under Article XIX of the GATT 1994 and the Agreement on Safeguards
even assuming that it did not suspend any obligation under the Agreement or withdraw or modify
concessions, is a purely theoretical issue that is of no practical relevance for resolving the present
dispute. The complainants raised this alternative issue solely in the event that the Panel were to
consider that the impugned measures did not result in a suspension of obligations within the meaning
of Article XIX:1(a) of the GATT 1994.
163 Consequently, the Panel will not take up the analysis of
this point.
7.91 As a final consideration, the Panel notes that the Dominican Republic has affirmed that the
interpretation put forward by the complainants c ould affect the "inherent and essential flexibility of
the WTO system of tariff concessions", whereby Me mbers may freely increase their tariffs to a level
below the bound rate. 164 In the Panel's opinion, the findings gi ven above do not aff ect the flexibility
which WTO Members enjoy under the provisions of the GATT 1994 freely to change their tariffs by

162 The Dominican Republic has confirmed that the impugned measures are not covered by anything
recorded in "other duties or charges" that it applied or had to apply on the date of entry into force of the
GATT 1994. Dominican Republic, reply to Panel question No. 183.
163 Complainants, opening statement at the first meeting of the Panel, paragraphs 10-11; reply to Panel
question No. 41.
164 Dominican Republic, closing statement at the second meeting of the Panel, paragraphs 5-7.
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adopting new ordinary customs duties that rema in under the rate bound in their schedule of
concessions. Nor does it affect the WTO Members' faculty to impose emergency measures on the
importation of specific products, and as a result suspe nd in whole or in part obligations they have
incurred under the GATT 1994 with respect to those products, including the possibility of
withdrawing or modifying concessions, consisten tly with Article XIX of the GATT 1994 and the
Agreement on Safeguards.
C. P
RELIMINARY OBJECTIONS RAISED BY THE DOMINICAN REPUBLIC
1. Jurisdiction of the Panel to settle the dis pute on the basis of agreements that are not
covered agreements
(a) Main arguments of the parties
7.92 In its request for a preliminary ruling, the Dominican Republic asked the Panel to decline
jurisdiction in the present dispute on the ground that, among other things, the complainants challenged
the application by the Dominican Republic of a tariff in excess of the preferential tariff of 0 per cent
ad valorem provided for in two free trade treaties (FTAs) signed with the complainants (the
Central America-Dominican Repub lic FTA and the DR-CAFTA FTA). 165 According to the
Dominican Republic, pursuant to Articles 3.2 and 7. 2 of the DSU, the Panel is not competent to
analyse the infringement of a concession granted outsi de the scope of the WTO (in this specific case,
under two FTAs). The Dominican Republic argues that the complainants are trying to make abusive
and improper use of rights provided by the DSU.166
7.93 For their part the complainants consider that the Dominican Republic's preliminary objection
concerning the Panel's lack of jurisdiction is irrele vant and groundless. They point out that they did
not request, either in the request for the establishmen t of the Panel or in their first written submission,
that the Panel rule on the infringement of internatio nal undertakings other than those contained in the
WTO agreements.167
7.94 In response to a Panel question, each of the par ties stated that in its opinion there were no
limitations under the covered agreements fo r a Member to impugn a measure through the
WTO dispute settlement mechanism if it considered that that measure, as well as being inconsistent
with commitments incurred by another Member under an FTA, was inconsistent with obligations
under the covered agreements. 168 The parties also said that the provisions of the
Central America-Dominican Republic FTA and the DR -CAFTA FTA were not relevant to the present
dispute because they were not part of the covered ag reements, and agreed that the complainants were
not alleging infringement of the provisions of those agreements.169

165 Dominican Republic, request for a preliminary ruling, paragraph 50.
166 To support its argument the Dominican Republic cited as case-law the Appellate Body Report,
México – Taxes on Soft Drinks and the Panel Report, EC and Certain Member States – Large Civil Aircraft .
Dominican Republic, request for a preliminary ruling, paragraphs 51-54.
167 Complainants, reply to the Dominican Republic's request for a preliminary ruling, paragraph 8;
closing statement at the first meeting of the Panel, paragraph 3.
168 Dominican Republic, reply to Panel question No. 78; complainants, reply to Panel question No. 78.
169 Dominican Republic, reply to Panel question No. 80; complainants, reply to Panel question No. 80.
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(b) Main arguments of the third parties
7.95 The United States, Turkey and the European Union submitted comments on this point. All
three considered that there was no restriction under the WTO agreements for a member to be able to
impugn a measure before the WTO dispute settlement m echanism if it consider ed that that measure
was inconsistent with obligations of the WTO cove red agreements as well as being inconsistent with
commitments incurred by another member under an FTA.
170
(c) Assessment of the Panel
7.96 As may be seen from the above arguments, the parties agree that the complainants are not
putting forward claims alleging the inconsistency of the impugned measures with provisions of the
above-mentioned FTAs. Both parties al so agree that the provisions of the
Central America-Dominican Republic FTA and the DR-CAFTA FTA are not relevant for the present
dispute.
7.97 In view of the foregoing, the Panel does not see a need to make any additional comment on
this point. In any case the Panel notes the Dominica n Republic's request that the Panel "confine itself
to making an objective assessment of the matter be fore it on the basis of the relevant covered
agreements alone, in accordance with Article 11 of the DSU, and refrain from making findings that
are not strictly necessary for resolving the present dispute in the light of the covered agreements".
171
7.98 The Dominican Republic has requested the Pane l, in the event that it concludes that
Article XIX of the GATT 1994 and the Agreement on Safeguards are applicable to the present
dispute, to resolve other preliminary issues relating to its terms of reference before considering the
merits of the complainants' claims.172
2. Other preliminary objections put forward by the Dominican Republic
(a) Main arguments of the parties
7.99 The preliminary issues raised by the Dominican Republic concerning the terms of reference
relate to: (i) certain claims developed by the complainants in their first written submission which
were allegedly not identified in the requests for the establishment of the panel; (ii) certain claims
developed by the complainants in their first written submission which allegedly were not identified in
the requests for consultations; and (iii) certain cl aims identified in the re quests for the establishment
of the panel which were not developed in the complainants' first written submission. The
Dominican Republic considers that the Panel's terms of reference do not include consideration of the
merits of these claims.173 These issues are identified below.
7.100 First, with respect to the claim concerni ng unforeseen developments and GATT obligations,
the Dominican Republic states that: (i) the complain ants put forward this claim in their requests for
consultations and the establishment of the panel but in neither of these requests did they indicate that,
as a consequence of the lack of reasoned and ade quate findings on the unforeseen developments and

170 United States, reply to Panel question No. 9; Turkey, reply to Panel questions Nos. 9 and 10;
European Union, reply to Panel questions Nos. 9 and10.
171 Dominican Republic, reply to Panel question No. 187, paragraph 47.
172 Dominican Republic, first written submission, paragraphs 44-91.
173 Dominican Republic, first written submission, paragraphs 50, 51, 53 and 86.
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GATT obligations, the findings on the increase in imports, serious injury and the causal link were also
affected, as the complainants argue in their first writ ten submission; (ii) Article 2.1 of the Agreement
on Safeguards, which the complainants invoke in th eir first written submission, was not included in
the request for the establishment of the panel; and (iii) Article 4.2(b) of the Agreement on
Safeguards, identified in the request for the establishment of the panel, was not included in the request
for consultations. Accordingly, the Dominican Re public considers that these issues are not covered
by the Panel's terms of reference.
174
7.101 Second, with respect to the claim concerning the causal link, the Dominican Republic states
that the complainants do not identify Article 4.1 of the Agreement on Safeguards in the requests for
consultations, although they mention it as a basis for their claim in their requests for the establishment
of the panel and their first written submission. The Dominican Republic therefore considers that
Article 4.1 of the Agreement on Safeguards is not part of the Panel's terms of reference in the context
of the claim concerning the causal link.175
7.102 Third, the Dominican Republic contends that in their requests for consultations the
complainants did not identify the claim that the Dominican Republic had not afforded an opportunity
for an adequate means of trade compensation in accordance with Article 8.1 of the Agreement on
Safeguards. The Dominican Republic therefore co nsiders that Article 8.1 of the Agreement on
Safeguards is not part of the Panel's terms of reference.176
7.103 Fourth, the Dominican Republic states that sp ecific claims identified in the requests for
consultations and in the requests for the establis hment of the panel were not developed in the
complainants' first written submission. The Domi nican Republic therefore considers that the
complainants have withdrawn them. Those claims are: (i) the alleged failure of the Commission to
provide a reasoned and adequate explanation as to why it classified specific information as
confidential and why it did not ask for non-confidenti al summaries of that information, inconsistently
with the obligations in Articles 3.1 and 3.2 of the Ag reement on Safeguards; (ii) the alleged failure of
the Commission to provide reasone d and adequate findings on the necessity of the measures to
facilitate the adjustment of the domestic industry, in consistently with the obligations in Article 3.1,
4.2(c) and 5.1 of the Agreement on Safeguards; (iii) the alleged inconsistency of the impugned
measures with Article I:1 of the GATT 1994; a nd (iv) the alleged inconsistency of the impugned
measures with Articles II:1(a) and II:1(b), second sentence, of the GATT 1994. The
Dominican Republic also states that the last thr ee claims are also outside the Panel's terms of
reference as they were not identified in the requests for consultations.
177
7.104 The Dominican Republic contends that the impair ment of the right of defence would only be
relevant when considering the possible shortcomings of a request for the establishment of a panel in
the light of Article 6.2 of the DSU, but not with resp ect to the lack of consultations. Nevertheless, the
Dominican Republic argues that its right of defence was adversely affected. With regard to the claims
which were included in the request for the establishm ent of the panel but which were not identified in
the request for the holding of consultations, the Dominican Republic points out that the modification
of the essence of the claims is a relevant criterion as regards not only the inclusion of new measures

174 Dominican Republic, first written submission, paragraphs 60-62 and 65-69.
175 Dominican Republic, first written submission, paragraph 73.
176 Dominican Republic, first written submission, paragraphs 74-85.
177 Dominican Republic, first written submission, paragraphs 86-90.
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but also the inclusion of new legal grounds, and assert s that, in the present case, the inclusion of new
claims modified the essence of the complainants' claims.
178
7.105 The complainants reject the preliminary objections put forward by the Dominican Republic.
7.106 On the aspects of the claim concerning unforeseen developments and GATT obligations,
which were allegedly not identified in the re quests for the establishment of the panel, the
complainants argue that both the implications that would stem from non-compliance with the
requirement to demonstrate unforeseen developments as well as the relevance of Article 2.1 of the
Agreement on Safeguards may be deduced from the requests for the establishment of the panel, and in
particular from subparagraphs (e) and (f) of tho se requests, even though they were not raised
independently.179
7.107 With regard to the issues that were allegedly not identified in the requests for consultations
but were identified in the requests for the establishmen t of the panel, the complainants state that this
inclusion did not alter the essence of the claims iden tified in the request for consultations. They also
state that, in accordance with earlier decisions taken by panels and the Appellate Body on this subject,
there does not need to be a precise and exact iden tity between the legal grounds for a request for
consultations and those for a request for the est ablishment of a panel, provided the latter may
reasonably be derived from the former. In addition , they state that the Dominican Republic has not
shown that its right of defence has been affected.180
7.108 On the alleged withdrawal of certain claims that were not developed in their first written
submission, the complainants state that the Domi nican Republic's argument is inappropriate because,
in accordance with earlier decisions taken by panels and the Appellate Body on this subject, there is
no obligation to develop all the claims in the first written submission to the Panel, and the
complaining party has the possibility to develop its arguments in its second written submission. They
also point out that the claims to which the Domi nican Republic objects are contained in the requests
for the establishment of the panel, and therefore form part of the Panel's terms of reference. They
observe that they have withdrawn their claim conc erning the consideration of certain information as
confidential without non-confidential summaries having been requested, inconsistently with
Articles 3.1 and 3.2 of the Agreement on Safeguards. With the exception of this last claim, they state
that they have not withdrawn the other three claims , which they have developed in the course of the
proceedings.181

178 Dominican Republic, reply to Panel questions Nos. 84, 88, 89 and 92; opening statement at the
first meeting of the Panel, paragraphs 2-15.
179 Complainants, reply to Panel question No. 82.
180 Complainants, reply to Panel questions Nos. 82, 85 and 86 (in which they cite the Panel Reports,
Brazil – Aircraft , paragraph 7.10; EC – Fasteners (China) , paragraph 7.24; and US – Poultry (China) ,
paragraph 7.46; and Appellate Body Reports, Mexico – Anti-Dumping Measures on Rice , paragraph 138; and
US – Upland Cotton , paragraph 293). See also, complainants, ope ning statement at the first meeting of the
Panel, paragraph 34; second written submission, paragraphs 49 and 50.
181 Complainants, reply to Panel questions Nos. 82, 85 and 86 (in which they refer to decisions of the
Appellate Body in EC – Bananas III and the Panel in China – Publications and Audiovisual Products ). In
particular, with regard to the claim concerning the necessity of the measure within the meaning of Articles 5.1,
3.1, last sentence, and 4.2 of the Agreement on Safeguards, the complainants state that, having made a
prima facie case that the preliminary and final determ inations are inconsistent with the non-attribution
requirement in Article 4.2(b), second sentence, of the Agreement on Safeguards, they have also established
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(b) Main arguments of the third parties
7.109 None of the third parties made comments on these preliminary objections put forward by the
Dominican Republic.
(c) Assessment of the Panel
7.110 With regard to the complain ants' claim that the impugned measures are inconsistent with
Articles I:1, II:1(a) and II:1(b), second sentence, of the GATT 1994, the Panel observes that this claim
was put forward alternatively, only in the event th at the Panel were to conclude that the impugned
measures are not subject to Article XIX of the GATT 1994 and the Agreement on Safeguards.
182
Since the Panel has concluded that the provisi ons of Article XIX of the GATT 1994 and the
Agreement on Safeguards are applicable to the ex amination of the impugned measures, there is no
need to analyse this alternative claim of the complainants and therefore it is not necessary for the
Panel to rule on the preliminary issue raised by the Dominican Republic with regard to this claim.
7.111 The Panel will analyse the other preliminary issues raised by the Dominican Republic, insofar
as they are relevant, in the corresponding sections of its report.183
D. WHETHER THE PROVISIONAL MEASURE AND THE DEFINITIVE MEASURE ARE INCONSISTENT
WITH ARTICLE XIX OF THE GATT 1994 AND WITH VARIOUS PROVISIONS OF THE
AGREEMENT ON SAFEGUARDS
7.112 The Panel having concluded that Article XIX of the GATT 1994 and the Agreement on
Safeguards are applicable to the present dispute, it will now consider the various claims made by the
complainants under these provisions with respect to the provisional and definitive measures.
1. Whether the competent authority acted inconsistently with obligations under the
covered agreements as regards the determin ation of unforeseen developments and the
effect of GATT obligations
(a) Main arguments of the parties
(i) Complainants
7.113 The complainants claim that, with respect to the provisional and definitive measures, the
competent authority failed to evaluate the unforeseen developments and the effect of the GATT 1994
obligations said to have occasioned the alleged incr ease in imports causing serious injury and that the
Dominican Republic therefore violated Article XIX:1(a) of the GATT 1994 and Articles 3.1,
last sentence, 4.2(c), and 11.1(a) of the Agreemen t on Safeguards. Conse quently, the complainants
assert that the determinations relating to increased imports, serious injury and causality, as well as the
imposition of the provisional and definitive measures, are inconsistent with Article XIX:1(a) of the

prima facie that the measures are no t necessary to prevent or remedy se rious injury and adjustment and are
therefore also inconsistent with Article 5.1. Complainants, reply to Panel questions Nos. 82, 85 and 86.
182 Complainants, second written submission, paragraphs 254-255; opening statement at the
first meeting of the Panel, paragraphs 6 and 39.
183 See paragraphs 7.151, 7.328 and 7.441 of the present Report.
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GATT 1994 and Articles 2.1, 4.2 and 11.1(a) of the Ag reement on Safeguards, and with Article 6 of
the Agreement on Safeguards with respect to the provisional measure.
184
7.114 The complainants note that the question of th e obligation to demonstrate the existence of
unforeseen developments is one that has already been decided by the Appellate Body, so that there
can be "no talk" of the Dominican Republic's in tention to reopen the debate in this respect. 185 They
maintain that the Dominican Republic failed to fulfil this obligation. In particular, they assert that
China's accession to the WTO and its implicatio ns for trade cannot constitute an unforeseen or
unexpected development for the Dominican Republic , since at the time when the WTO Agreement
entered into force for the Dominican Republic (9 March 1995) the negotiations relating to China's
accession were already under way, having begun in 1987. In addition, they point out that there are no
findings in the reports of the competent authority to show that this event would have been unforeseen
for the Dominican Republic, only that it was unforeseen for the domestic industry. The complainants
add that, even assuming that China's acce ssion was an unforeseen development for the
Dominican Republic and that the latter made a reas oned and adequate finding in this respect, the
Dominican Republic failed to establish a logical connection between China's accession and the
alleged increase in imports.
186
7.115 With respect to the tariff reductions resulting fro m the entry into force of the DR-CAFTA and
Central America-Dominican Republic FTAs, the complainants consider that the
Dominican Republic's decision to sign the first of these agreements in 1998 and the second in 2004
could not have been an unforeseen development for the Dominican Republic at the time that it entered
into obligations under the WTO in 1995. In particul ar, they point out that in acceding to the WTO in
1995, the Dominican Republic assumed the rights a nd obligations embodied in the WTO Agreement,
including those in Article XXIV of the GATT 1994, and hence the possibility of signing free trade
agreements in conformity with that article coul d not have been an unforeseen development for the
Dominican Republic. They also assert that, inasmuch as the purpose of free trade areas is to achieve
liberalization more extensive than that available w ithin the framework of the WTO, it is unacceptable
for tariff reductions under such ag reements to be regarded as unforeseen developments. According to

184 Complainants, first written submission, para graphs 195-196 and 235-236; second written
submission, paragraph 169.
185 The complainants also note the statement by the Appellate Body th at "absent cogent reasons, an
adjudicatory body will resolve the same legal question in the same way in a subsequent case" and point out in
this connection that the Dominican Republic has failed to give any cogent reason for departing from the
Appellate Body's view. Complainants, opening statement at the first meeting of the Panel, paragraphs 48-52
(where the Appellate Body Reports Argentina – Footwear (EC) , paragraph 83, and US – Stainless Steel
(Mexico), paragraph 160, are cited).
186 Complainants, first written submission, paragraphs 206 and 223; second written submission,
paragraphs 176-181; opening statement at the second meeting of the Panel, paragraph 42. In this connection,
the complainants point out that the Dominican Republic made ex post reference to an annex to the Final
Technical Report which only contained the value of imports of diverse origins, so that it could not serve as proof
that China's admission to the WTO resulted in an increase in imports. Likewise, they claim that if the said
annex were to prove such a connection, it could also be (groundlessly) asserted that the increase in imports from
the other countries identified therein showed that their membership of th e WTO formed part of unforeseen
developments that gave rise to the increase in imports. Complainants, second written submission,
paragraph 181.
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the complainants, these tariff reductions were not onl y predictable but the very purpose of the trade
agreements freely signed by all the parties, including the Dominican Republic.
187
7.116 At the same time, the complainants add that there are no findings or conclusions based on
these alleged unforeseen developments, while the Initial Technical Report and the Preliminary
Technical Report do no more than describe the arguments put forward by the company FERSAN in
this respect. They also point out that the statement in the final pub lic notice (to the effect that the
tariff reductions of the regional agreements in question "could partially explain the unforeseen
developments") is an ex post explanation, as the notice in ques tion was published one day after the
adoption of the Definitive Resolution, and does not explain which developments the Commission had
in mind, while the expression employed ( could explain ) is not the same as a demonstration of a
logical connection between the tariff reductions and the alleged increase in imports. In fact,
according to the complainants, the statements of the Dominican Republic indicate that it was its
regional commitments, "and not the effect of th e GATT obligations", that gave rise to the
Dominican Republic's concerns about increased imports.188
7.117 Finally, the complainants claim that the Commission did not provide a reasoned and adequate
explanation of how the effect of the GATT obligations impacted on the alleged increase in imports
that caused serious injury to the domestic industry. In this respect, they point out that there are no
findings in which the relevant obligations assu med by the Dominican Republic under the GATT are
identified and where it is explained how these obliga tions could have resulted in the alleged increase
in imports. According to the co mplainants, the references made ex post by the Dominican Republic
do not identify any explicit finding to the effect th at the alleged increase in imports was the result of
obligations incurred by the Dominican Republic under the GATT.
189
(ii) Dominican Republic
7.118 The Dominican Republic maintains that the "unf oreseen developments" clause in Article XIX
of the GATT 1994 does not constitute a binding obliga tion and, consequently, does not have to be
demonstrated in order for a safeguard measure to be invoked.190
7.119 The Dominican Republic notes that the Agre ement on Safeguards makes no reference to
unforeseen developments, and so in this respect waives Article XIX of the GATT 1994. 191 It also

187 Complainants, second written submission, paragraphs 186-188; opening statement at the second
meeting of the Panel, paragraph 43. The complainants add that it would be wrong if these voluntary acts,
subsequent to an international commitment, could later be claimed to be "unforeseen developments", since that
interpretation would mean that merely by signing a trade agreement any Member would automatically fulfil the
unforeseen developments requirement and thus be en titled to impose safeguard measures for any increase in
imports. Complainants, second written submission, paragraph 188.
188 Complainants, first written submission, paragrap hs 207-208, 222 and 224-225; second written
submission, paragraphs 189-190. The complainants also note that the tariff reduction in question applies only to
imports from Central America and the United States and does not explain the increase in imports from other
sources.
189 Complainants, first written submission, paragrap hs 227 and 233-234; second written submission,
paragraphs 191-193; opening statement at the second meeting of the Panel, paragraph 45.
190 Dominican Republic, first written submission, paragraphs 282-283.
191 In particular, the Dominican Republic indicates that the words "applied in accordance with this
Agreement" in Article 11.1(a) mean that the more specific and subsequent provisions of the Agreement on
Safeguards are those that govern the application of safeguard measures and take precedence over contrary
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claims that the negotiating history reveals that the intention of the Uruguay Round negotiators was not
to maintain "unforeseen developments" as a legally binding requirement. In this connection, it argues
that the fact that the negotiators dropped the clause relating to unforeseen developments contained in a
1989 draft of the Agreement on Safeguards, which had made the demonstration of an "unforeseen,
pronounced and substantial increase in the am ount of the product imported" a condition of the
imposition of a safeguard measure, shows that the ne gotiators did not have the intention of including
this factor in the Agreement on Safeguards as an independent and binding requirement.
192 In addition,
it notes that other panels have concluded that the omission of "unforeseen developments" from the
Agreement on Safeguards was intentional and ha ve expressed their disagreement with the
Appellate Body's view that "unforeseen developmen ts" are a requirement for the application of a
safeguard measure.193
7.120 The Dominican Republic adds that its interpretation finds support in the national legislation of
other Members and points out in this respect that th e relevant legislation of the United States and the
European Union does not require the demonstration of "unforeseen developments" for the application
of a safeguard measure. It also claims that prev ious decisions of panels and the Appellate Body
regarding "unforeseen developments" are ambiguous a nd lack guidelines, so that no Member is in a
position to know with certainty what to demonstrate and how to demonstrate it in the light of the rules
in force.194
7.121 Finally, the Dominican Republic maintains th at the text of the Agreement on Safeguards
contains terminology that suggests that it was negotiated as "an exhaustive set of rules for the
application of safeguard measures", and given that the Agreement makes no reference to the
"unforeseen developments" clause, that clause is not re levant within the context of the Agreement. In
particular, it points out that Article 1 of the Agreement on Safeguards "establishes rules for the
application of safeguard measures"; Article 11.1(a) narrows the scope to "action [that] conforms with
the provisions of that Article [Article XIX of the GATT 1994] applied in accordance with this
Agreement"; the preamble refers to "a comprehe nsive agreement"; the applicability of Article 8.3
only requires that the safeguard measure should c onform to the provisions of the Agreement on
Safeguards and makes no reference to GATT Article XIX; and Article 2.1, which lays down the
conditions for the application of a safeguard measur e, exactly repeats the wording of Article XIX of
the GATT 1994 but omits the clause relating to unforeseen developments.195

provisions of Article XIX of the GATT 1994. Dominican Republic, first written submission,
paragraphs 260-262.
192 Dominican Republic, first written submission, paragraphs 265-266. The Dominican Republic also
claims that the fact that Article 8.3 of the Agreement on Safeguards does not refer to other provisions of the
covered agreements or to Article XIX of the GATT implie s that if "unforeseen developments" were regarded as
a requirement for the application of a safeguard measure, the right to suspend measures would be prohibited
even if they were in violation of the covered agreements. The Dominican Republic argues that this confusion
cannot be ascribed to the intentions of the negotiators. Ibid., paragraph 268.
193 Dominican Republic, first written submission, paragraphs 269-270 (where the panel reports in
Korea – Dairy , paragraph 7.42, Argentina – Footwear (EC) , paragraph 8.66, and Argentina – Preserved
Peaches, paragraph 7.24, are cited).
194 Dominican Republic, first written submission, paragraphs 271 and 275-276. For example, the
Dominican Republic suggests that the reports of various panels and of the Appellate Body subsequent to the
latter's reports in Korea – Dairy and Argentina – Footwear (EC) do not offer clear guidance as to how the
existence of "unforeseen developments" can adequately be demonstrated. Ibid., paragraph 275.
195 Dominican Republic, first written submission, paragraphs 277-280.
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7.122 Nevertheless, in the event that the Panel were to decide that the demonstration of unforeseen
developments constitutes a binding obligation, the Dominican Republic claims that it fulfilled that
obligation and that it therefore did not act inconsis tently with Article XIX:1(a) of the GATT 1994 nor
with Articles 3.1, 4.2(c) and 11.1(a) of the Agreem ent on Safeguards. In particular, it points out that
both the Preliminary Technical Report and the Fina l Technical Report offer a reasoned and adequate
explanation with regard to unforeseen developmen ts. Likewise, the Dominican Republic notes that,
as is clear from its schedule of bound tariffs, it h as granted a tariff concession of 40 per cent on the
products corresponding to tariff lines 5407.20.20 a nd 6305.33.90 and that it has therefore
demonstrated, as a matter of fact, that it has incu rred obligations under the GATT with respect to
tubular fabric and polypropylene bags.
196
(b) Main arguments of third parties
(i) Colombia
7.123 Colombia agrees with the Dominican Republic that the standard of application of the concept
of "unforeseeability" is not clear and, in fact, ma kes safeguard measures difficult to use. It also
considers that, in view of the lack of clarity w ith respect to the unforeseen developments rule, 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 th e disputed measure was applied, since otherwise
essential legal principles of due process and substantive justice could potentially be infringed.197
(ii) Panama
7.124 Panama considers that the unforeseen developmen ts referred to in Article XIX of the GATT
must be demonstrated as a matter of fact for it to be possible to apply a safeguard measure. In the
present case, Panama is of the opinion that the Domi nican Republic failed to fulfil this obligation, as
well as to demonstrate the existence of a logical connection between unforeseen developments and the
conditions laid down in Article XIX of the GATT 1994.198
(iii) European Union
7.125 The European Union considers that there is no basis for the position taken by the
Dominican Republic with regard to the non-applicabi lity of the "unforeseen developments" clause. It
points out in this respect that the Appellate Body has determined that the first part of Article XIX:1(a)
of the GATT 1994 "describes certain circumstances which must be demonstrated as a matter of fact in
order for a safeguard measure to be applied", a nd notes that the Dominican Republic has failed to
offer any "convincing reason" why the Panel should de part from the Appellate Body's interpretation.
The European Union is also of the opinion that th e increase in imports due to certain FTAs cannot be
regarded as an "unforeseen development", since that increase was not the "effect" of the obligations
incurred by the Dominican Republic under the GATT, as required by Article XIX:1(a), but rather the
"effect" of obligations incurred by the Dominican Republic under the FTA agreements in question.

196 Dominican Republic, first written submission, paragraphs 284-292. See also, ibid., paragraph 299
(where the Appellate Body Report in Argentina – Footwear (EC), paragraph 91, is cited).
197 Colombia, third party written submission, paragraphs 47-50; third party statement,
paragraphs 20-24; reply to Panel question No. 17.
198 Panama, third party written submission, paragraphs 23-24.
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The European Union therefore considers that this development could not provide a basis for the
imposition of safeguard measures.
199
(c) Assessment of the Panel
7.126 The argument put forward by the complainants raises two questions. Firstly, whether the
findings relating to unforeseen developments were reasoned and adequate and how did this situation
cause the alleged increase in imports. Secondly, whether the findings concerning the relevant
obligations incurred by the Dominican Republic under the GATT 1994 were reasoned and adequate
and how did these obligations result in the alleged increase in imports.
(i) Unforeseen developments
7.127 Article XIX:1(a) of the GATT 1994 reads as follows:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a contracting party under this Agreement, including tariff concessions, any product
is being imported into the territory of that contracting party in such increased
quantities and under such conditions as to cause or threaten serious injury to domestic
producers in that territory of like or directly competitive products, the contracting
party shall be free, in respect of such produc t, and to the extent and for such time as
may be necessary to prevent or remedy such injury, to suspen d the obligation in
whole or in part or to withdraw or modify the concession.
7.128 The Appellate Body has made it clear that Ar ticle XIX of the GATT 1994 and the Agreement
on Safeguards must be applied cumulatively, becau se the "unforeseen developments" condition is one
whose existence must be demonstrated as a matter of fact for a safeguard measure to be applied
consistently with Article XIX.
200 Unforeseen developments must be demonstrated before the
safeguard measure is applied and the demonstrati on must feature in the published report of the
competent authority. This public report must ex amine the reason why the factors mentioned therein
may be regarded as "an unforeseen devel opment" and offer an explanation for it. 201 The public report
must also provide an explanation of how the " unforeseen developments" resulted in the increase in
imports causing the serious injury in question.202
7.129 The dispute settlement system of the WTO do es not establish a system of precedents, and
therefore the reasoning of the Appellate Body in a pa rticular case is not binding on panels set up to
examine other cases. However, the reports adopted by the Dispute Settlement Body create legitimate
expectations among the Members of the WTO. 203 As the Appellate Body has pointed out, "following
the Appellate Body's conclusions in earlier disput es is not only appropriate, but is what would be

199 European Union, third party written submission, paragraphs 26-35; third party statement,
paragraph 9.
200 Appellate Body Report, Korea – Dairy, paragraph 85. This finding was subsequently confirmed by
panels and the Appellate Body. See Appellate Body Reports, Argentina – Footwear (EC) ; and US – Lamb ;
and Panel Reports, US – Line Pipe ; Chile – Price Band System ; US – Lamb ; US – Steel Safeguards ; and
Argentina – Preserved Peaches. See also paragraph 7.66 of the present Report.
201 Appellate Body Report, US – Lamb , paragraphs 72-73. See also, paragraph 7.10 of the present
Report.
202 Appellate Body Report, US – Steel Safeguards, paragraphs 316-323.
203 See, for example, Appellate Body Report, Japan – Alcoholic Beverages II, page 18.
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expected from panels, especially where the issues are the same".
204 In the present dispute, the
Dominican Republic does not offer any convincing arguments why the Panel should depart from the
interpretation adopted by the Appellate Body.
7.130 The Dominican Republic identifies two "unforeseen developments": (i) the entry of China
into the WTO and the effect that this had on international trade; and (ii) the process of tariff reduction
accompanying the entry into force of the DR-C AFTA and Central America-Dominican Republic
FTAs.205 Both parties agree that the time at which th ese developments had to be unforeseen is that at
which the relevant tariff concessions were granted, that is, the time at which the Dominican Republic
acceded to the WTO, i.e. 9 March 1995.206
7.131 The Panel notes that neither the Commission' s Definitive Resolution nor its Preliminary
Resolution make reference to or offer any fi nding or explanation concerning the unforeseen
developments. Paragraph 27 of the Definitiv e Resolution merely transcribes the text of
Article XIX:1(a) of the GATT 1994. 207 The Dominican Republic asserts that the findings and
conclusions with respect to the events that allegedly constituted unf oreseen developments are
contained in the Preliminary Technical Report and th e Final Technical Report of the DEI, which form
part of the Preliminary Resolution and the Definitive Resolution, respectively. 208 H o w e v e r , t h e s e
DEI technical reports do not in fact contain th e findings and reasoned conclusions to which the
Dominican Republic refers.
7.132 The relevant portion of the DEI's Final Technical Report reads as follows:
The DEI believes that China's incursion in to the multilateral trading system and the
effect that had on international trade were undoubtedly something that could not have
been foreseen by the domestic industry wh en the Dominican Republic signed up to
the measures set out in Article XIX of the GATT 1994.209
7.133 This passage simply indicates that China's entr y into the WTO and the effect that had on
international trade were events that "could not have been foreseen by the domestic industry", but does
not show that they were developments unforeseen by the Dominican Republic. 210 Moreover, the

204 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, paragraph 188. See also
Appellate Body Report, US – Stainless Steel (Mexico), paragraph 160.
205 Dominican Republic, reply to Panel question No. 197. Although initially the Dominican Republic
appeared to assert that the financial and economic crisis of 2008 and the increase in the costs of production were
also factors that constituted "unforeseen developments", it later made clear that only the entry of China into the
WTO and its effect on international trade, together with the process of tariff reduction that accompanied the
entry into force of the DR-CAFTA and Central Amer ica-Dominican Republic FTAs, constituted "unforeseen
developments".
206 Dominican Republic, reply to Panel question No. 113; complainants, second written submission,
paragraph 176.
207 Definitive Resolution, Exhibit CEGH-9, paragraph 27.
208 Dominican Republic, first written submission, paragraph 291.
209 Final Technical Report, Exhibit CEGH-10, page 66. We believe that in referring to "China's
incursion into the multilateral trading system", the comp etent authority meant "China's entry into the WTO".
See: Dominican Republic, reply to Panel question No. 197.
210 The Dominican Republic maintains that its negotiators represent the domestic industry in market
access negotiations, so that the two may be regarded as equivalent where the foreseeing of particular
developments is concerned. Dominican Republic, first written submission, paragraph 293. However,
Article XIX:1(a) of the GATT 1994 makes it clear that the question to be answered is whether the development
was unforeseen or unexpected for the importing Member. In this respect, the Appellate Body has pointed out
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Technical Report does not analyse or explain why, at the time that the Dominican Republic acceded to
the WTO in 1995, it could not have foreseen the en try of China into the WTO and its effect on
international trade. Thus, this statement does not de al with the question of why China's entry into the
WTO and its effect on international trade could not have been foreseen by the Dominican Republic at
the time it acceded to the WTO in 1995.
7.134 Furthermore, nowhere in the resolutions or in the reports of the competent authority is it
explained how the increase in imports of polypropyl ene bags and tubular fabric was the result of the
entry of China into the WTO and of the effect that had on international trade. In reply to a question
on this point, the Dominican Republic makes referen ce to Part V of the public version of the Initial
Technical Report and to Statistical Annex II to th e public version of the Final Technical Report.
211
The relevant passage of Part V of the Initial Techni cal Report states that "as indicated by FERSAN in
the application for a safeguard investigation … the increase in imports is determined [ inter alia by]
China's entry into the WTO". 212 This passage is restricted to a description of arguments submitted by
the company applying for the investigation and fa ils to show that the competent authority had
analysed or explained that the increase in imports was a consequence of the unforeseen developments
in question. Likewise, Statistical Annex II to th e Final Technical Report contains the "Value of
imports of tubular fabric and polypropylene bags" from 14 different sources, including China, for the
period 2006-2009213, but does not explain how these imports were a consequence of China's entry into
the WTO and the effect that had on international trade.
7.135 With regard to the tariff reduction process co mmencing with the entry into force of the
DR-CAFTA and Central America-Dominican Republic FTAs, the resolutions of the Commission do
not contain any findings in this respect; howeve r, the Dominican Republic cites certain passages in
the Preliminary Technical Report, in the Final Technical Report and in the final public notice.
214
7.136 The relevant part of the Final Technical Report states:
In the opinion of the DEI, the arguments put forward by FERSAN in the preliminary
stage, particularly in connection with th e process of tariff reduction that followed the
entry into force of the DR-CAFTA and the Agreements with Central America,
[….]. 215
7.137 This passage describes the arguments put fo rward by the company FERSAN and does not
demonstrate the existence of unforeseen developments within the meaning of GATT Article XIX:1(a).

that the text of Article XIX:1(a) of the GATT 1994 es tablishes that an importing Member has the right to
impose a safeguard measure "in situations when, as a result of obligations incurred under the GATT 1994, [that]
importing Member finds itself confronted with developments it ha d not 'foreseen' or 'exp ected' when it incurred
that obligation.". Appellate Body Report, Korea – Dairy, paragraph 86 (italics added).
211 Dominican Republic, reply to question No. 114 from the Panel.
212 Initial Technical Report, Exhibit CEGH-3, pages 20-21 (footnote omitted).
213 Final Technical Report, Exhibit CEGH-10, page 104.
214 Dominican Republic, first written submission, paragraph 291; reply to question No. 114 from the
Panel. See also: Dominican Republic, first written submission, paragraphs 294-295.
215 Final Technical Report, Exhibit CEGH-10, page 64 (original underlining and brackets).
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7.138 As for the Preliminary Technical Report, the relevant part reads as follows:
IV. ANALYSIS OF IMPORTS AND UNFORESEEN DEVELOPMENTS IN
TERMS OF ARTICLE XIX OF THE GATT 1994
…
According to FERSAN, the unusual increase in imports was a consequence of
obligations assumed in the Free Trade Agreement with Central America whose tariff
reduction period had been completely used up by 2004, reducing to zero the tariff of
the countries parties to the Agreement.
…
FERSAN maintains that the unforeseen development was caused [ inter alia] by …
the reduction to zero of the tariff on imports covered by the
Central America-Dominican Republic bilateral FTA …
…
In the opinion […], FERSAN's arguments, pa rticularly those relating to the tariff
reduction process that followed the entry into force of the DR-CAFTA and the
Agreements with Central America, could partially explain the unforeseen
developments, insofar as the products under investigation fell from tariff rates of
20 per cent and 14 per cent, respectively, to a zero (0) tariff rate as a result of being in
Basket A, which carries the obligation to reduce the tariff immediately.
216
7.139 The first two fragments of the citation descr ibe the arguments put forward by FERSAN and
do not constitute a demonstration of the existence of unforeseen developments within the meaning of
Article XIX of the GATT 1994. Likewise, as the complainants point out217, the use of square brackets
in the last paragraph of the passage makes it im possible clearly to discern whether the statement
corresponds to a finding of the competent authority or reflects an argument made by one of the
interested parties.218 In other words, the description of th e arguments put forward by FERSAN in the
Preliminary Technical Report is not accompanied by any finding or reasoned conclusion on the part of
the competent authority.
7.140 Thus, in their public version, the technical re ports cited by the Dominican Republic do not
make it possible to establish the findings and conclu sions of the competent authority concerning the
tariff reduction process that followed the entry into force of the DR-CAFTA and
Central America-Dominican Republic FTAs as an "unforeseen development". The
Dominican Republic has referred in this respect to the confidential version of the Final Technical
Report
219, which is said to contain the finding of the comp etent authority with respect to this event as
an unforeseen development.

216 Preliminary Technical Report, Exhibit CEGH-7, pages 59, 65, 70 and 74 (original emphasis and
brackets, footnotes omitted).
217 Complainants, first written submission, paragraph 210.
218 However, the complainants have not made any cl aim with respect to the treatment of confidential
information.
219 Dominican Republic, first written submission, paragraph 292.
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7.141 Article 3.1 of the Agreement on Safeguards states that the competent authorities "shall
publish a report setting forth their findings and reasoned conclusions reached on all pertinent issues of
fact and law". Moreover, according to Article 4.2(c), the competent authorities shall publish
"promptly, in accordance with the provisions of Article 3, a detailed analysis of the case under
investigation, as well as a demonstration of th e relevance of the factors examined". The
Appellate Body has indicated that "unforeseen developments" is one of the pertinent issues of fact that
must be demonstrated for a safegua rd measure to be validly applied.
220 In view of these provisions, it
is in the published report of the competent author ity that this Panel must examine whether the
Dominican Republic provided findings and reas oned conclusions concerning the existence of
unforeseen developments in accordance with Article XIX:1(a) of the GATT 1994.
7.142 Moreover, Article XIX:1(a) of the GATT 1994 allo ws a safeguard measure to be applied only
if, as a result of obligations incurred under the GATT 1994 , an importing Member is confronted with
an unforeseen development that it did not foresee or expect when it incurred these obligations. In the
present case, the argument put forward by FERSAN a ttributing the alleged increase in imports to
obligations that the Dominican Republic incurred with in the context of regional agreements fails to
explain how these obligations were related with obligations incurred by the Dominican Republic
under the GATT 1994.
7.143 The Dominican Republic has also cited fragments of the final public notice. 221 In this respect,
the complainants argue that the statements contained in the final public notice are ex post
explanations.222 In the final public notice, the Commissi on states that "the tax reduction process that
followed the entry into force of the DR-CAFTA and the Agreements with Central America could
partially explain the unforeseen developments".223 Therefore, even if the statements contained in the
final public notice were taken into account, they do not equate, in the Panel's opinion, to a finding or
reasoned conclusion on the part of the competent au thority that the tariff reduction process following
the entry into force of the DR-CAFTA and Centra l America-Dominican Republic FTAs was regarded
as an unforeseen development. Mo reover, like the arguments of the company FERSAN cited in the
technical reports, the statement contained in the fi nal public notice attributes the alleged increase in
imports to obligations that the Dominican Repub lic incurred under regional agreements and does not
explain how these obligations were related with obligations incurred by the Dominican Republic
under the GATT 1994.224
7.144 To sum up, neither the resolutions nor the technical reports on which they are based nor the
final public notice to which the Dominican Republic has referred contain a reasoned and adequate
explanation by the competent authority of how the entry of China into the WTO and the effect that
had on international trade or the process of tariff reduction that followed the entry into force of the

220 Appellate Body Report, Korea – Dairy, paragraph 85.
221 Dominican Republic, reply to Panel question No. 114. See also, complainants, first written
submission, paragraph 225.
222 Complainants, first written submission, paragraph 225.
223 Notice, General Safeguard Investigation of Tubular Fabric and Polypropylene Bags
(6 October 2010), Exhibit CEGH-11.
224 The Panel also notes that the final public notice cited by the Dominican Republic itself states that its
purpose is to make public certain information contained in the Definitive Resolution. Notice, General Safeguard
Investigation of Tubular Fabric and Polypropylene Bags (6 October 2010), Exhibit CEGH-11. In other words,
there is no reason to believe that the final public notice could contain findings or reasoned conclusions different
from or additional to those contained in the Definitive Resolution. See also, Dominican Republic, replies to
Panel questions Nos. 29 and 34; Law 1-02, Exhibit RDO-11, Article 36; Regulations implementing Law 1-02,
Exhibit RDO-26, Article 271.
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DR-CAFTA and Central America-Dominican Rep ublic FTAs constituted an unforeseen development
within the meaning of Article XIX:1(a) of the GATT 1994.
225
(ii) "Effect of the obligations incurred under the GATT 1994"
7.145 With respect to "the obligations incurred under the GATT", in Argentina – Footwear (EC) the
Appellate Body explained the meaning of the expression "as a result of … the effect of the obligations
incurred by a contracting party under this Agreement, including tariff concessions" as follows:
With respect to the phrase "of the effect of the obligations incurred by a Member
under this Agreement, including tari ff concessions …", we believe that this phrase
simply means that it must be demonstrated , as a matter of fact, that the importing
Member has incurred obligations under th e GATT 1994, including tariff concessions .
Here, we note that the Schedules annexed to the GATT 1994 are made an integral
part of Part I of that Agreement, pursuant to paragraph 7 of Article II of the
GATT 1994. Therefore, any concession or commitment in a Member's Schedule is
subject to the obligations contained in Article II of the GATT 1994.
226
7.146 From the above, in the opinion of the Panel, it is clear that as a matter of fact the importing
Member must have incurred obligations under th e GATT 1994, for example, tariff concessions, with
respect to the product in question. It then falls to the importing Member to identify those obligations
incurred under the GATT 1994 that are linked with the increase in imports causing serious injury to
its domestic industry. These findings and conclusions must be reflected in the report of the competent
authority.
7.147 All the parties agree that, under its bound tari ff schedule, the Dominican Republic granted a
tariff concession of 40 per cent ad valorem on the products of tariff lines 5407.20.20 and 6305.33.90.
There is therefore no doubt that, as a matter of f act, the Dominican Republic incurred obligations
under the GATT 1994 with respect to tubular fabric a nd polypropylene bags. In any event, the Panel
must consider whether the Dominican Republic, in its report, identified these obligations, or other
obligations incurred under the GATT 1994, as obligati ons linked with the increase in imports said to
have caused serious injury to its domestic industry.
7.148 The Definitive Resolution of the Commission does not make reference to this point. The
relevant passage in the Preliminary Technical Report, to which the Dominican Republic refers,
indicates only that the DEI established the following:
Nevertheless, [……] in relation to the fact that the Dominican Republic is not making
efficient use of the MFN rate for tariff lines 6505.33.10 and 6305.33.90 to which a
20 per cent rate is being applied, while th at for subheading 5407.20.20 is 14 per cent,
with a WTO bound rate of 40 per cent, on the basis of which they conclude that this

225 In view of this finding, the Panel does not cons ider it necessary to address the argument of the
complainants that the process of tariff reduction begi nning with the entry into force of the DR-CAFTA and
Central America-Dominican Republic FTAs could not have been a development unforeseen by the
Dominican Republic.
226 Appellate Body Report, Argentina – Footwear (EC), paragraph 91 (original brackets, italics added).
See also, Appellate Body, Korea – Dairy, paragraph 84.
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was a unilateral decision by the Dominican Republic, not to make use of the
WTO bound rate as it was legitimately entitled to do.
227
7.149 It is not clear from this passage that the comp etent authority considered the tariff concession
with respect to the products in question to be the obligation of the Dominican Republic under the
GATT 1994 that caused the alleged increase in the imports in question. This passage does not contain
any finding in this respect.228 Consequently, and in the absence of any indication in the resolutions of
the Commission, or in any other relevant document, it is not possible to conclude that the report of the
competent authority contains a reasoned and adeq uate explanation of how the Dominican Republic
incurred obligations under the GATT with respect to tubular fabric and polypropylene bags, within
the meaning of Article XIX:1(a) of the GATT 1994. In the light of this finding, the Panel does not
consider it appropriate to address the additional argument of the complainants that neither did the
Commission determine whether the alleged increase in imports was a consequence of the relevant
obligations under the GATT 1994.
(iii) Conclusion
7.150 For the reasons set forth above, the Panel conclud es that the complainants have made the case
that the Commission's published report does not contai n any explanation with respect to the existence
of unforeseen developments and the effect of the GATT 1994 obligations, as required by
GATT Article XIX:1(a). In not providing such an explanation, the competent authority has failed to
comply both with the obligation contained in Ar ticle 3.1, last sentence, of the Agreement on
Safeguards - in the sense of setting forth in its pu blished report its findings and reasoned conclusions
reached on all pertinent issues of fact and law - and with the obligation containe d in Article 4.2(c) of
the Agreement on Safeguards, in the sense of accomp anying its published report with a demonstration
of the relevance of the factors examined. Moreove r, in imposing a safeguard measure without having
provided any explanation with respect to the existe nce of unforeseen developments and the effect of
the GATT 1994 obligations, in a manner inconsiste nt with GATT Article XIX:1(a), the competent
authority also failed to comply with the obligation contained in Article 11.1(a) of the Agreement on
Safeguards. Consequently, with respect to the provisional and definitive measures, the
Dominican Republic acted inconsistently with its obligations under Article XIX:1(a) of the
GATT 1994 and Articles 3.1, last sentence, 4.2(c) and 11.1(a) of the Agreement on Safeguards.
7.151 In connection with this claim, the complainants also made certain consequential claims, with
respect to which no specific arguments were set fort h; consequently, even on the assumption that all
these claims were properly brought before it
229, the Panel will refrain from making findings in this
respect.230
7.152 It having been concluded that the Dominican Republic acted in a manner inconsistent with
obligations under the covered ag reements with regard to th e determination of unforeseen
developments and the effect of GATT obligations, in principle it would not be necessary for the Panel

227 Preliminary Technical Report, Exhibit CEGH-7, page 74 (original brackets).
228 The confidential version of this passage confirms that the competent authority did not refer to the
tariff concession with respect to the products in question as an obligation of the Dominican Republic under the
GATT 1994 that produced the alleged increase in the impo rts in question. See: Pr eliminary Technical Report
(confidential version), Exhibit RDO-9, page 86.
229 See paragraphs 7.98-7.111 of the present Report.
230 The Panel notes in this respect that in Chile – Price Band System, the Appellate Body observed that
a panel cannot make findings on matters that are not before it because the complainant has not articulated a
claim or submitted arguments. See: Appellate Body, Chile – Price Band System, paragraph 173.
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to make any finding concerning the other substantiv e claims advanced by the complainants with
respect to the provisional and definitive measures. Nevertheless, taking into account the
circumstances of the present case and with the aim of assisting the parties to arrive at a positive
solution to the dispute, the Panel will consider the claims of the complainants.
2. Whether the competent authority acted inconsistently with obligations under the
covered agreements in defining the domestic industry
(a) Main arguments of the parties
(i) Complainants
7.153 The complainants argue that the Commission defined the domestic industry in a manner
inconsistent with Articles 4.1(c), 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards. They
therefore claim that the determinations of ser ious injury and causality , for the purposes of the
provisional and definitive measures, are inconsistent with Articles 2.1, 4.1(a), 4.1(c), 4.2(a), 4.2(b)
and 4.2(c) of the Agreement on Safeguards and with Article XIX:1(a) of the GATT 1994, as well as
with Article 6 of the Agreement on Safeguards with respect to the provisional measure.
231
7.154 The complainants assert that, in defining th e domestic industry, the Commission made
two basic errors: (i) it failed to establish adequa tely and reasonably that the imported and domestic
products were like or directly competitive; a nd (ii) it improperly excluded producers of domestic
products directly competitive with the product under investigation.232
7.155 With respect to the first aspect of their claim, the complainants make two points. Firstly, the
complainants argue that the Commission did not de fine the product under investigation in a manner
consistent with Articles 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards. 233 M o r e
specifically, they maintain that, d espite the questions and factual in formation put forward by various
interested parties pointing to the fact that tubular fabric and polypropylene bags are separate products,
the Commission persisted in treating them as a single product under investigation. 234 They assert that
the only reason for making this determination was the interpretation of the customs classification
based on Additional Note 2 to Chapter 63 of the Do minican Republic's Customs Tariff. They also
claim that, although the Commission's interpretation would appear to be underlain by the presumption
that a tubular fabric is equivalent to an incomplete or unfinished bag, that presumption is not to be
found in any of the relevant reports or resoluti ons and neither is there any evidence from which it
might be inferred. In addition, they point out th at, despite the fact that the determination of the
competent authorities was questioned by the Directorate-General of Customs, the authorities took
advantage of the statement made by that agency (t hat "[Additional Note 2] being a requirement of the
national legislation, the customs has to proceed acco rdingly, until such time as the competent courts

231 Complainants, first written submission, paragraphs 75-76 and 193-194; second written submission,
paragraphs 70 and 167-168.
232 Complainants, first written submission, paragraph 75; second written submission, paragraph 71.
233 Complainants, first written submission, paragraph 119.
234 The complainants point out that the Commission stated its position without offering an explanation
as to why the questions raised by various interested parties were not relevant or had no basis in fact or law and
without addressing the alternative interpretation that the products were different. The complainants add that
neither was there any detailed analysis of why it was cons idered appropriate to treat the products as the same
product, despite their having different characteristics. Complainants, first written submission, paragraphs 109
and 111.
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or a law dispose otherwise") to treat the products in question as the same product, without producing
any additional item of evidence for determining the identity of the products.
235
7.156 Secondly, the complainants assert that the Commission failed to establish that the imported
and domestic products were directly competitive. In support of this assertion, the complainants
submit five arguments. First, they affirm that the domestic product was improperly defined for the
purposes of determining likeness or direct competitiven ess. They point out that the description of the
domestic product submitted by the applicant FERSAN was adopted and that therefore the domestic
product was confined to that produced starting from a certain phase in the production process ,
without setting out findings or expl anations regarding the suggested limitation. They add that this led
to the exclusion of the domestic product manufactured starting from a phase distinct from the
obtaining of the resin (for example, polypropylen e bags manufactured from tubular fabric, domestic
or imported, produced by so-called "assemblers" or "converters"). According to the complainants, the
purpose of defining the domestic product is to dete rmine likeness or direct competitiveness and that
determination must be based on products and not on production processes linked with the products.236
7.157 Second, the complainants maintain that th e Commission failed to demonstrate that the
imported products and the domestic products were directly compe titive. They argue that the reports
and resolutions contain mere a ffirmations of the alleged comp etitive relationship between the
two products (or descriptions of the relevant inform ation available), without providing a reasoned and
adequate explanation in this respect.237
7.158 Third, the complainants point out that there is an asymmetry in the definition of the domestic
and imported products that makes the comparison of their likeness or direct competitiveness itself
asymmetrical and inadequate: whereas the domestic product comprises tubular fabric and
polypropylene bags produced from virgin resin, the product under investigation comprises tubular
fabric and polypropylene bags regardless of whethe r they were produced from virgin resin or not.
They conclude that, although the Agreement on Safeguards does not require the existence of
symmetry in the strict sense of the word, th ere must at least exist a correspondence of likeness or
direct competitiveness between the product under investiga tion and the domestic product, since
otherwise the domestic industry, the injury, the in crease in imports and the causal relationship could
not be determined.
238
7.159 Fourth, the complainants claim that the Commis sion treated tubular fabric and polypropylene
bags as part of the same domestic industry without having demonstrated that the two products, as an
input and as final goods, respectively, were competitive w ith each other. In this connection, they note

235 Complainants, first written submission, paragraphs 94-119; second written submission,
paragraphs 85, 105, 107-114; reply to Panel question No. 104; opening statement at the first meeting of the
Panel, paragraph 68. The complainants assert that the Directorate-General of Customs never stated that the bags
and the fabric were the same product or that they were like or directly competitive products. Complainants, first
written submission, paragraph 118.
236 Complainants, first written submission, paragraphs 129-132 and 135.
237 See, for example, complainants, first written submission, paragraphs 136-143; second written
submission, paragraphs 148-151.
238 Complainants, first written submission, paragraphs 144-150; second written submission,
paragraphs 153-157.
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that the Appellate Body has found that "inputs can be included in the definition of 'domestic industry'
only if they are 'like' the end-products or 'directly competitive' with them".
239
7.160 Fifth, the complainants claim that the Commission determined the directly competitive
products without following the order of analysis laid down in Article 4.1(c) of the Agreement on
Safeguards, as described by the Appellate Body. In this connection, they point out that in
United States – Lamb , the Appellate Body determined that, be fore the scope of a domestic industry
can be established it is first necessary to identify the products which are like or directly competitive
with the imported product and that only when those products have been identified is it possible then to
identify their producers. In the present case, they assert that the Commission first defined FERSAN
as the domestic industry and then defined the directly competitive product under investigation.
240
7.161 With respect to the second aspect of their claim, the complainants argue that the Commission
wrongly excluded certain producers from the definition of the domestic industry. In particular, they
assert that, in considering the producers on the b asis of their production process, the Commission
excluded specific categories of producers out of hand, namely, assemblers and converters, which
manufacture polypropylene bags from tubular fabr ic. They maintain that the only relevant
consideration for identifying the producers is that the individual or enterprise should manufacture the
"like or directly competitive domestic product", the production processes being irrelevant where the
ordinary meaning of the term producers is concerned. They add that, even under its own
interpretation of the term producers, the Commission wrongly excluded producers that were
producing the domestic product, name ly, Filamentos del Caribe (FIDECA) and Textiles TITÁN. In
this connection, they point out that Article 4.1( c) of the Agreement on Safeguards and its context
make it clear that domestic producers of the like or directly competitive product may not be
excluded.
241
(ii) Dominican Republic
7.162 The Dominican Republic maintains that the definition of the domestic industry adopted by the
competent authority is consistent with Article 4. 1(c) of the Agreement on Safeguards and that the
reports and resolutions of that authority contain the determinations necessary in this respect.242
7.163 The Dominican Republic asserts that the complainan ts have not offered any legal analysis of
the provisions of the Agreement on Safeguards that might prevent it from being concluded that the
tubular fabric and polypropylene bags can be treated as a single product under investigation. It also
points out that similar claims within the context of the Anti-Dumping Agreement have been rejected
by various panels as the Agreement gives no guidance on how to determine the product under
investigation and suggests that the Panel should also conclude that there are no applicable provisions
within the context of safeguard inv estigations. In addition, it asserts that the explanations given by
the Commission concerning the product under investig ation are adequate and reasoned and that, in
this respect, the questions of the parties with an interest in the investigation were given timely
consideration. It points out that the non-adoption of the alternative interpretation proposed by various

239 See, for example, complainants, first written submission, paragraphs 151-154 (citing
Appellate Body Report, US – Lamb, paragraph 90).
240 Complainants, first written submission, paragraphs 155-159; second written submission,
paragraphs 85, 97-98 and 159-165 (where the Appellate Body Report in US – Lamb, paragraph 87, is cited).
241 Complainants, first written submission, paragraphs 160-192; second written submission,
paragraph 85.
242 Dominican Republic, first written submission, paragraph 252.
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interested parties does not affect the validity of th e explanation of the determination, and that the
complainants themselves have not suggested that the likeness of or competitive relationship between
the products that make up the product under investiga tion must be demonstrated. Furthermore, it
asserts that there is no basis in the rules for re quiring a reasoned and adequate explanation "of the
tariff classification considerations on which [to base the] decision to treat the tubular fabric and
polypropylene bags as a single imported product subject to investigation" and points out that, in any
case, the complainants have failed to explain how su ch an obligation might arise out of Articles 3.1
and 4.2(c) of the Agreement on Safeguards.
243
7.164 Moreover, the Dominican Republic states that the like and directly competitive domestic
product was defined as polypropylene bags and tubular fabric. It asser ts that both the reports and the
resolutions contain adequate explanations w ith respect to the likeness of the product under
investigation and the domestic product. Without prejudice to the above, it considers it obvious that
the product under investigation and the domestic product are like products which are therefore
directly competitive, since the definitions of both are identical in scope. It also claims that the
production process did not form part of the definition of the like domestic product: the fact that the
domestic product was defined as tubular fabric and polypropylene bags manufactured from resin only
indicates a physical characteristic that was also app licable to the product under investigation. In its
opinion, the production process played an important ro le in identifying the domestic industry, as a
criterion for excluding certain producers, and not fo r defining the like domestic product. This is
supported by considerations contained in the Fi nal Technical Report from which it may be inferred
that the DEI took into account, for the purposes of determining the domestic industry, the firms which
manufacture polypropylene bags from tubular fabric. It therefore asserts that, contrary to what the
complainants suggest, polypropylene bags manufact ured from tubular fabric were not excluded from
the definition of the domestic product.
244
7.165 At the same time, the Dominican Republic poi nts out that the complainants have not
identified the legal basis for their contention that th ere must be symmetry between the like or directly
competitive product and the product under investigati on and that none of the provisions they invoke
contains this alleged obligation. Likewise, it expresses the opinion that, in US – Lamb , the
Appellate Body did not establish that it had to be demonstrated that the products that make up the
domestic industry are like to each other. Moreove r, the Dominican Republic points out that, as
distinct from that case, in the present case the scope of the domestic product (tubular fabric and
polypropylene bags) is identical to that of th e product under investigation (tubular fabric and
polypropylene bags). The Dominican Republic al so asserts that the Agreement on Safeguards does
not require a particular order or mode of analys is in defining the directly competitive product and
notes that in US – Lamb the Appellate Body only made clear what was the order that would be
followed in that case, without stipulating any obli gatory order of analysis or invalidating other
possible logical orders. It asserts that in an y case the Commission's analysis followed a logical
order.245

243 See, for example, Dominican Republic, first written submission, paragraph 145; second written
submission, paragraphs 54-56; opening statement at the second meeting of the Panel, paragraphs 33-34.
244 See, for example, Dominican Republic, second written submission, paragraphs 57-64; opening
statement at the second meeting of the Panel, paragraphs 37-40.
245 See, for example, Dominican Republic, first written submission, paragraphs 163-182, 193-198,
205-206, 209-210; second written submission, paragraph 68; opening statement at the second meeting of the
Panel, paragraphs 41-42 (where the Appellate Body Report in US – Lamb, paragraphs 87-88, is cited).
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7.166 Finally, the Dominican Republic maintains that the authorities did not exclude a priori any
category of producer of the like or directly comp etitive product, noting that the Commission took as
its starting point all the producers identified by FERSAN in its domestic producer form. With respect
to the company TITÁN, the Dominican Republic st ates that, as its production from resin is minimal
and it mainly converts imported tubular fabric, the Commission excluded it from the domestic
industry under the authority of Article 26 of Law 1-02, which permits (although it does not require)
the exclusion of producers that are importers of the product under consideration. It notes that the fact
that Article 4.1(c) of the Agreement on Safeguard s (as distinct from the Agreement on Subsidies and
Countervailing Measures and the Anti-Dumping Ag reement) does not expressly refer to the
possibility of excluding importers does not have dispositive significance. It also points out that the
context of Article 4.1(c) of the Agreement on Safe guards, particularly Articles 4.2(a) and 4.2(b),
supports the possibility of such an exclusion, since these provisions require an analysis of injury and
causality based on reliable data not obtainable fro m information supplied by companies that both
produce and import the product under consideration. Where the company FIDECA is concerned, the
Dominican Republic points out that the Commission concluded that it did not produce the like
domestic product, as it only converted imported or loca lly purchased tubular fabric into bags. Citing
the Panel Report in EC – Salmon (Norway) , it maintains that the Commission was able to exclude
certain companies whose level of activity was so lo w that they were not managing to "produce" the
like product. It likewise maintains that the exclusion of FIDECA is also consistent with Article 4.1(c)
of the Agreement on Safeguards.
246
(b) Main arguments of the third parties
(i) Colombia
7.167 Colombia rejects the Dominican Republic's ar gument that there are no clear criteria for
defining the "product under investigation". It points out that the second paragraph of the preamble to
the Agreement on Safeguards states that the Agre ement clarifies and reinforces Article XIX of the
GATT entitled "Emergency Action on Imports of Particular Products "247 and that this suggests that
the product it is intended to investigate should be delimited and established using some sort of
criterion. Moreover, it argues that the term product in the singular in Article 2.1 of the Agreement on
Safeguards denotes that the scope of the product under i nvestigation is limited. It also considers that
the product under investigation could be made up of several products, provided that it can be shown
that they are like or directly competitive, since otherwise it would not be possible to make this finding
with respect to the domestic and imported products, as required by Article 4.1(c) of the Agreement on
Safeguards.
248
(ii) United States
7.168 The United States argues that in US – Lamb , the Appellate Body concluded that, while the
focus of the like or directly competitive product in quiry must be on the identification of the product,
the production process may also provide informati on on the like or directly competitive nature
between products. The United States adds that where a question might arise as to whether
two products are separate, it might be relevant to inquire into the production processes for those

246 See, for example, Dominican Republic, second written submission, paragraphs 71-80; opening
statement at the second meeting of the Panel, paragraphs 43-47 (where the panel reports in US – Wheat Gluten,
paragraphs 8.54-8.56, and EC – Salmon (Norway), footnote 289, paragraph 7.115, are cited).
247 Colombia, third party written submission, paragraph 31 (emphasis added by Colombia).
248 Colombia, third party written submission, paragraphs 25-36.
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products. In its opinion, it is possible to envisage a scenario in which the production process is highly
relevant to the determination of the like or directly competitive nature between products, due to the
qualities that the process imparts to the product.
249
(iii) Panama
7.169 In Panama's opinion, in defining both the input (tubular fabric) and the end-product
(polypropylene bag) as a single product, the Dominican Republic failed to prove that the two products
were directly competitive or like products, as establis hed by the Appellate Body, and thus defined the
domestic industry in a manner inc onsistent with Articles 4.1(c) and 2.1 of the Agreement on
Safeguards. It also believes that the Dominican Republic failed to consider the provisions of the
Agreement on Safeguards inasmuch as it excluded from the domestic industry other producers that
qualified at the same level as those assessed in th e investigation and, moreover, included both the
producers of the inputs and the producers of the end-product.250
(iv) European Union
7.170 According to the European Union, the absence of a definition of product under investigation
in the Agreement on Safeguards indicates the intention of the negotiators to leave Members with wide
discretion. At the same time, it considers that, insofar as the parallelism between the product under
investigation and the like or directly competitiv e products (in each case including both inputs and the
final product) is maintained, the definition of domes tic industry will conform to Article 4.1(c) of the
Agreement on Safeguards, without the need to estab lish that both inputs and the final product are like
or directly competitive products. It adds that, in or der to consider whether a particular company is a
producer, the focus should lie on the essential nature of the business activities of that enterprise, such
as manufacturing an article or bringing a thing into existence. Thus, if the company's main activity
consists in production, the sole fact that it imports the relevant product should not lead to its being
excluded from the definition of domestic industry. On the other hand, it is of the opinion that a
company which is merely an importer would not qualify as a producer and could be excluded from
the definition of domestic industry.251
(c) Assessment of the Panel
7.171 The claims of the complainants concerning the definition of the domestic industry, with
respect to the provisional and definitive measures, comprise various related arguments and factual
situations. The relevant provisions under which th e complainants assert the existence of the alleged
infringements are Articles 4.1(c), 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards.
7.172 In this dispute, the product under investigation was defined by the competent authority as
"polypropylene bags of strip or the like and wove n fabric of synthetic filament yarn, manufactured
from strip or the like"; the Commission also decided that it would observe the trends in the
two products in conjunction.252 The domestic product was defined as "polypropylene bags made from

249 United States, third party written submission, paragraphs 7-8.
250 Panama, third party written submission, paragraphs 18-22.
251 European Union, third party written submission, paragraphs 17-25.
252 Initial Resolution, Exhibit CEGH-2, page 5; Initial Technical Report, Exhibit CEGH-3, pages 5-6;
Preliminary Technical Report, Exhib it CEGH-7, page 8. See also, Preliminary Resolution, Exhibit CEGH-5,
paragraph 11. Jumbo sacks, big bags, super sacks and containers and polyethylene bags did not form part of the
definition. Preliminary Resolution, Exhibit CEGH-5, paragraphs 32 and 34; definitive Resolution,
Exhibit CEGH-9, paragraphs 20-23.
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tubular woven fabric manufactured starting from r esin and tubular woven fabr ic made of synthetic
filaments manufactured starting from virgin resin".
253 The Commission determined that the product
under investigation and the like domestic product were directly competitive products. 254 T h e
Commission considered that the domestic industry consisted of a single company, the applicant
FERSAN.255 The Commission did not consider the comp any FIDECA to be part of the domestic
industry due to the fact that, in its opinion, "it does not currently produce the product under
investigation but obtains the bag from impor ted or locally purchased tubular fabric".
256 Nor did the
Commission regard the company Textiles TITÁN as part of the domestic industry, because of its
imports of tubular fabric from which it manufact ured a significant proportion of its output of
polypropylene bags.257
7.173 Article 4.1(c) of the Agreement on Safeguards, which defines the domestic industry for the
purposes of the Agreement, stipulates that:
[I]n determining injury or threat thereof, a "domestic industry" shall be understood to
mean the producers as a whole of the like or directly competitive products operating
within the territory of a Member, or t hose whose collective output of the like or
directly competitive products constitutes a major proportion of the total domestic
production of those products.
7.174 Thus, the text of Article 4.1(c) of the Agreement on Safeguards establishes the elements for
the definition of the domestic industry. Firstly, Article 4.1(c) stipulates that the domestic industry
must be defined with reference to the producers of the like or directly competitive products, so that the
key to defining the domestic industry and, ultimately, the producers of which it is composed, is the
like or directly competitive products.
258 Secondly, Article 4.1(c) states that the domestic industry thus
defined must consist of the producers as a whole of the like or directly competitive product or,
alternatively, of those producers of that product whose collective output constitutes a major
proportion of the total domestic production of the product in question.
7.175 The complainants have argued that the Commi ssion ignored fundamental aspects of the
determination of the like or directly competitive products and thus failed to define the domestic
industry properly. In support of this claim, the co mplainants make two main arguments: (i) that the
Commission did not properly define the product under investigation; and (ii) that the Commission did
not demonstrate that the imported and domestic produc ts were directly competitive. The Panel will
examine each of these arguments in turn.

253 Preliminary Resolution, Exhibit CEGH-5, paragraph 26.
254 Initial Resolution, Exhibit CEGH-2, page 5; Preliminary Resolution, Exhibit CEGH-5,
paragraph 35; definitive Resolution, Exhibit CEGH-9, paragraph 23.
255 Initial Resolution, Exhibit CEGH-2, pages 5 and 8; Preliminary Resolution, Exhibit CEGH-5,
paragraph 13; definitive Resolution, Exhibit CEGH-9, paragraph 18. See also, Initial Technical Report,
Exhibit CEGH-3, pages 13-14; Preliminary Technical Report, Exhibit CEGH-7, page 58; Final Technical
Report, Exhibit CEGH-10, page 46.
256 Preliminary Technical Report, Exhibit CEGH-7, page 58; Final Technical Report, Exhibit
CEGH-10, page 46. See also, Initial Technical Report, Exhibit CEGH-3, page 14.
257 Preliminary Technical Report, Exhibit CEGH-7, pages 54-58; Final Technical Report,
Exhibit CEGH-10, pages 43-47. See also, Initial Technical Report, Exhibit CEGH-3, page 14; definitive
Resolution, Exhibit CEGH-9, paragraph 18.
258 Appellate Body Report, US – Lamb, paragraph 84.
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7.176 With respect to the first argument, the compla inants state that their claim concerning the
product under investigation relates to the lack of adequate and reasoned explanations in the published
report and not to the determination of the product under investigation per se.
259
7.177 As the complainants point out, the Agreement on Safeguards "does not contain guidelines on
how to define the product under investigation". 260 This Agreement refers only in general terms to a
product and stipulates that the safeguard measures must be applied to the "p roduct being imported"
irrespective of its source. 261 There is no provision in the Agreement on Safeguards that governs the
selection, description, analysis or determination of this "product". Although, for the purpose of
determining the scope of an investigation, the competent authority must define the product under
investigation, the Panel does not consider that the Agreement on Safeguards requires a detailed
explanation of that definition.262
7.178 As previously noted, the Initial Resoluti on defines the product under investigation as
"polypropylene bags of strip or the like and wove n fabric of synthetic filament yarn, manufactured
from strip or the like", which enter the Dominican Republic under tariff subheadings: 6305.33.10;
6305.33.90 and 5407.20.20. 263 The same Resolution, like the Initial and Preliminary Technical
Reports, indicates the reasons why it was determin ed that the trends in polypropylene bags and
tubular fabric would be observed "in conjunction". In this respect, the Initial Technical Report points
out that:
According to FERSAN, imports of polypropyl ene tubular fabric are equivalent to
importing polypropylene bags, because the end-product is the same and in accordance
with General Interpretative Rule 2(a) it is cl ear that "any referen ce in a heading to an
article includes a reference to that article incomplete or unfinished, provided that the
latter has the essential character of the comple te or finished article, as well as to an
article treated as complete or finished by virtue of the preceding provisions when
presented disassembled or unassembled". Duri ng this phase of the investigation the
DEI will observe the trends in polypropyle ne bags and tubular fabric taken in
conjunction.264
7.179 In the Preliminary Technical Report, the DEI adds that:
In this connection, several consultations we re held with the Directorate-General of
Customs (DGA), in one of which, on 3 November 2009, the DGA made clear that
"tubular fabrics for bags obtained from polyet hylene or polypropylene mesh are
classified in the same subheadings as specified in the preceding paragraph, by
application of Additional Note 2 to Chapter 63 of the Customs Tariff, Law No. 146-00
and its amendments, even if they are not complete bags".

259 See, for example, complainants, second written submission, paragraphs 72, 104 and 106-107.
260 Complainants, reply to Panel question No. 104.
261 Articles 2.1 and 2.2 of the Agreement on Safeguards.
262 In this connection, the Panel notes that in the context of the Anti-Dumping Agreement, which like
the Agreement on Safeguards does not contain any provision governing the determination of the product under
consideration, several panels have expressed the opinion that although an investigating authority must make a
decision as to the scope of the investigation, and give notice of the product involved, it is not required to make
an elaborated determination in th at regard. See Panel Reports in EC – Salmon (Norway), paragraph 7.57, and
EC – Fasteners (China), paragraph 7.268.
263 See paragraph 1.172 of the present Report.
264 Initial Technical Report, Exhibit CEGH-3, pages 5-6 (footnote omitted).
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Subsequently, in a communication dated 25 November 2009, the DGA reiterated
"…… it being a requirement of the national legislation, the customs has to proceed
accordingly, until such time as the compet ent courts or a law dispose otherwise ". In
the light of all of the above, during this phase of the investigation the trends in
polypropylene bags and tubular fabric will be observed in conjunction.
265
7.180 The DEI also analysed various arguments put forward by interested parties concerning the
definition of the produc t under investigation. 266 With respect to the argum ents advanced by several
parties to the effect that tubular fabric and polypr opylene bags cannot be considered to be the same
product due to their nature, use and end markets, th e DEI referred to considerations of a customs
nature on which it had based the determination to treat the products in conjunction.267
7.181 The complainants claim that the Commission's explanation was not adequate or reasoned.
They base their assertion on the premise that the product under investigation can only include
products that are "like" and point out in this resp ect that the facts of the investigation show that
tubular fabric and polypropylene bags are not the same product. 268 Nevertheless, the complainants
fail to identify the legal impediments that shou ld have prevented the competent authorities from
considering tubular fabric and pol ypropylene bags as part of th e product under investigation and
observing the trends in the two products "in conjunction". The complainants assert that "it has not
been suggested that there must be a comparison of likeness or competitive relationship between the
input and the end-product for the purpose of defi ning the imported product under investigation".
269
However, the premise on which the argument of the complainants is based is that the Commission
was under the obligation to provide an explanation of why two separate products were treated as the
product under investigation in the same proceeding. The Panel cannot find a basis for this premise in
the text of the Agreement on Safeguards. The comp lainants have not identified any provision in the
Agreement that restricts the inclusion of imported pr oducts within the scope of an investigation solely
to those products that are like or directly competitive with each other. As already noted, the
Agreement on Safeguards does not impose specific oblig ations with respect to the definition or the
scope of the product under inves tigation. In these circumstances, the Panel considers that the
complainants have failed to show why the explan ations of the competent authority concerning the
product under investigation were not adequate and reasoned.
7.182 In conclusion, the Panel considers that the complainants have failed to show that, by
including polypropylene bags and tubular fabric in the definition of the product under investigation,
the Commission acted inconsistently with Articles 3.1, last sentence, and 4.2(c) of the Agreement on
Safeguards, or that, consequently, the definitio n of the domestic industry was in this respect
inconsistent with Articles 4.1(c), 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards.
7.183 With respect to the second argument of the co mplainants, namely, that the Commission failed
to show that the imported and domes tic products were directly compe titive, the first question to arise

265 Preliminary Technical Report, Exhibit CEGH-7, page 8 (original italics; footnotes omitted). The
Commission's Initial Resolution and its Preliminary Resolution also mention the consultations held by the
Commission with the Directorate-General of Customs (DGA) in this respect, as well as the relevant
clarifications provided by FERSAN. Initial Resolution, Exhibit CEGH-2, pages 2-5; Preliminary Resolution,
Exhibit CEGH-5, pages 4-5.
266 Final Technical Report, Exhibit CEGH-10, page 42; Preliminary Technical Report, Exhibit
CEGH-7, page 31.
267 Preliminary Technical Report, Exhibit CEGH-7, page 31.
268 See, for example, complainants, first written submission, paragraphs 109-118.
269 Complainants, reply to Panel question No. 94.
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is whether the domestic product was inadequately defined for the purposes of determining likeness or
direct competition. The complainants assert that by restricting the scope of the directly competitive
domestic product to a particular phase in the production process the competent authorities excluded
the domestic product manufactured from an input with a degree of processing different from that of
resin, namely, polypropylene bags manufactured from tubular fabric.
270
7.184 The Panel will first present its conclusions regarding the relevant facts of the determination of
likeness or direct competition between the products in question. As already noted, the product under
investigation was defined as "polypropylene bags of strip or the like and woven fabric of synthetic
filament yarn, manufactured from strip or the like".271 On the basis of the information supplied by the
applicant FERSAN, the Commission's Preliminary R esolution refers to the like domestic product, as
"polypropylene bags made from tubular woven fabr ic manufactured starting from resin and tubular
woven fabric made of synthetic filaments manufactured starting from virgin resin". 272 T h e
Commission considered that the product under inves tigation and the domestic product were "directly
competitive".273 In this connection, during the presen t proceeding, the Dominican Republic has
pointed out that the Final Technical Report and the Definitive Resolution establish that the product
under investigation and the domestic product were like and therefore directly competitive.274
7.185 In its Definitive Resolution, the Commission determined:
Once the description of the product, the ph ysical characteristics, the technical
specifications and the samples provided both by FERSAN and by the importers had
been analysed, the Commission was able to observe that in various cases the imported
product under investigation and the like dom estic product were directly competitive.
In this case, big bags or containers cons titute an exception to the above, as they are
not manufactured by the domestic industry.275
7.186 In its Final Technical Report, the DEI also explained that:
[I]n various cases the imported product under investigation and the like domestic
product are directly competitive, insofar as it is intended to describe the relationship
that exists between the domestic product and the imported product. 57 From the
wording of the expression cited it is clear th at the essence of that relationship is that

270 Complainants, first written submission, paragraphs 129-131. Although the complainants in their
claim refer in general to the exclusion of the "domestic product manufactured starting from another phase
distinct from the obtaining of the resin", the analysis and the conclusions of the Panel in this respect are limited
to the polypropylene bags manufactured from tubular woven fabric with respect to which the complainants
made specific reference and submitted arguments. In the absence of arguments and concrete evidence, the Panel
is unable to make a more general analysis with respect to "domestic products manufactured starting from
another phase distinct from the obtaining of the resin".
271 Initial Resolution, Exhibit CEGH-2, page 5.
272 Preliminary Resolution, Exhibit CEGH-5, para graph 26. See also, Initial Technical Report,
Exhibit CEGH-3, page 10; Preliminary Technical Report, Exhibit CEGH-7, page 48; Final Technical Report,
Exhibit CEGH-10, page 36.
273 Definitive Resolution, Exhibit CEGH-9, paragraph 23.
274 Dominican Republic, reply to question no. 99 from the Panel.
275 Definitive Resolution, Exhibit CEGH-9, paragraph 23.
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the products are in competition and that the context of the competitive relationship is
the marketplace.
276
57 See Korea – Alcoholic Beverages, paragraph 114.
7.187 In the opinion of the Panel, the use of the term like in the passages cited does not make it
possible to conclude that the competent authorities necessarily made a finding of likeness within the
meaning of Article 4.1(c) of the Agreement on Safe guards. Accordingly, the Panel believes that, in
the investigation in question, the competent author ity declared that the domestic product defined and
the product under investigation were directly competitive.277
7.188 The Dominican Republic also asserts that the fact that the domestic product was defined as
tubular fabric and polypropylene bags manufactured from resin indicates only a physical
characteristic shared by the domestic and imported products, so that polypropylene bags manufactured
from tubular fabric were not excluded from the definition of the domestic product.278
7.189 The Dominican Republic suggests that, if the definition of the domestic product had not
included bags manufactured by converting tubular fabric, neither the Commission nor the DEI would
have taken the producers of this product (that is , Textiles TITÁN, FIDECA, Agro-arrocera S.A. and
Fibras Dominicanas C. por A.) into account.279 Nevertheless, the Final Technical Report on which the
Dominican Republic bases its case 280 does not show that the definition of the directly competitive
domestic product would have included polypropylene bags manufactured from tubular fabric and that,
basing itself on this reason, the Commission would have considered these four companies as part of
the domestic industry. All it shows is that the companies were preliminarily considered for the
purpose of determining, on the basis of their r espective production processes, whether they qualified
as converters or as producers of the directly competitive domestic product.
281 This does not constitute
evidence that the competent authorities would have considered that the directly competitive domestic
product included polypropylene bags manufactured from the processing of tubular fabric. At the
same time, both the resolutions of the Commission and the technical reports of the DEI confirm that
the scope of the directly competitive domestic product was limited to tubular fabric and
polypropylene bags manufactured starting from resin.
282 Consequently, the Panel considers that the

276 Final Technical Report, Exhibit CEGH-10, page 42.
277 This interpretation is confirmed by the fact that the passage cited by the Dominican Republic in the
Final Technical Report of the DEI makes reference to paragraph 114 of the Appellate Body Report in Korea –
Alcoholic Beverages (where the Appellate Body interpreted the term "directly competitive or substitutable"), as
well the identification of the domestic product solely as "directly competitive". Both the final public notice and
the preliminary public notice refer to the " directly competitive domestic product " (italics added). Preliminary
public notice, Exhibit CEGH-8, page 2; final public notice, Exhibit CEGH-11, page 4.
278 See, for example, Dominican Republic, reply to Panel question No. 190; opening statement at the
second meeting of the Panel, paragraph 38.
279 See, for example, Dominican Republic, opening statement at the second meeting of the Panel,
paragraph 39.
280 Final Technical Report, Exhibit CEGH-10, pages 43-46.
281 Final Technical Report, Exhibit CEGH-10, pages 43-47. In other words, whether these companies
manufactured polypropylene bags from tubular fabric or whether they carried out all the stages of the production
process for the manufacture of polypropylene bags (from the production of tubular fabric from resin to the
manufacture of the bags).
282 As evidence of this, the Panel notes that the company FIDECA, which manufactures polypropylene
bags starting from tubular fabric, was not considered part of the domestic industry. See below, paragraph 7.192
and following paragraphs. Moreover, the definitive Reso lution of the Commission reveals that, in determining
that the company FERSAN constituted the domestic industry, the Commission established that this company "is
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complainants have demonstrated, as a matter of fact, that the competent authorities did not include
within the scope of the definition of the domest ic product polypropylene bags manufactured starting
from a stage subsequent to the processing of resin.
7.190 On the other hand, the parties agree that the product under investigation on which the
safeguard measures were imposed is tubular fabr ic and polypropylene bags in general, no matter
whether these products were manufactured st arting from a particular stage of production.
283 I n
contrast, as previously noted, the directly co mpetitive product was restricted to the product
manufactured starting from a particular stage of production, namely the processing of virgin resin,
thereby excluding other possible like or directly competitive products, in particular, polypropylene
bags manufactured from tubular fabric.
7.191 The text of Article 4.1(c) of the Agreemen t on Safeguards establishes that the domestic
industry has to be defined by reference to "produc ts" that are "like or directly competitive" with
respect to the imported product. There is nothing in th e text of this provision that allows the domestic
industry to be defined on the basis of a limite d portion of these products. If a product is like or
directly competitive with respect to the imported product, that product must be considered for the
purposes of defining the domestic industry. Support for this interpretation can be gained by reading
Article 4.1(c) of the Agreement on Safeguards within the context of Article 4.1(a). In particular, the
determination of the domestic indus try in terms of a portion of the "like or directly competitive
products" could fail to establish the existence of a determination of significant overall impairment of
the domestic industry as required by Article 4.1(a) of the Agreement on Safeguards. In the present
case, the directly competitive domestic product was defined on the basis of a portion of the "like or
directly competitive products".
7.192 In excluding from the definition of the direc tly competitive domestic product other like or
directly competitive products, the competent aut hority consequently excluded domestic producers of
the like or directly competitive product. This was the case with the company FIDECA, which was
excluded from the definition of the domestic industry.
7.193 The parties all agree that FIDECA was excluded from the domestic industry and that
FERSAN was the only company considered to be part of the domestic industry.
284 Moreover, the data
in the file show that FIDECA produces polypropyl ene bags by converting tubular fabric, either
domestic or imported. Presumably, the reason why this company was excluded from the definition of
the domestic industry is because it does not produce the directly competitive product as defined in the
investigation (i.e., the product manufactured starting from a specific production stage: the processing
of virgin resin). These conclusions are supported by the relevant passages in the DEI's technical
reports. In particular, the Final Technical Re port points out that, in determining the domestic
producers, the DEI first established whether the producers examined were converters or producers of
the directly competitive domestic product. With respect to the company FIDECA, the DEI reached
the following conclusion:

the only domestic company that manufactures 100 per cent of its output of tubular fabric and polypropylene
bags starting from resin". Definitive Resolution, Exhib it CEGH-9, page 4. See also, Final Technical Report,
Exhibit CEGH-10, page 47.
283 According to the Dominican Republic, the only products that were excluded from the tariff lines on
which the safeguard measures were imposed were jumbo sacks, "big bags", and "super sacks or containers".
Dominican Republic, reply to Panel question No. 97.
284 See paragraph 1.172 of the present Report.
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In the case of Filamentos del Caribe (FIDECA) a domestic producer form was also
submitted; at present, this company is not producing the product under investigation,
but obtains the bag from imported or locally purchased tubular fabric
61, as certified by
the Institute of Innovation in Biotechnolog y and Industry (IIBI) in its communication
to FIDECA dated 9 January 2010.

By virtue of the above, during the preliminary phase of the investigation the DEI
assumed that FERSAN was undoubtedly the largest producer of polypropylene bags
from resin in the Dominican Republic ... In this respect … the applicant company,
that is, FERSAN, will be considered as the domestic industry.285
61 Invoices examined during the inspection carried out at FERSAN on 17 February 2010
showed that Fideca is a customer for the tubular fabric produced by FERSAN.
7.194 The Dominican Republic claims that it is consis tent with Article 4.1(c) of the Agreement on
Safeguards to exclude from the domestic industr y producers that do not engage in significant
production operations, as would be the case with converters that only cut and sew the tubular fabric
which they purchase. 286 In support of its position, the Dominican Republic cites the observation of
the panel in EC – Salmon (Norway), which reads as follows:
There may be circumstances in which an enterprise whose product is within the scope
of the like product may be found to have engaged in a level of activity so low as to
justify the conclusion that it did not, in fact, "produce" the like product.
287
7.195 The Dominican Republic also asserts that the ex clusion of particular producers would not be
inconsistent with Article 4.1(c) of the Agreement on Safeguards, since this provision allows producers
that constitute a major proportion of domestic production to be taken into consideration.288
7.196 As the Appellate Body has pointed out, the term "producers" used in Article 4.1(c) of the
Agreement on Safeguards can be taken to mean tho se who "manufacture an article", "those who bring
a thing into existence".289 In this respect, the Panel does not see any reason why, in the circumstances
of the present case, a company that cuts tubular fabric and sews it 290, and consequently causes a
polypropylene bag actually to exist, should not be c onsidered to be a producer under Article 4.1(c) of
the Agreement on Safeguards.

285 Final Technical Report, Exhibit CEGH-10, page 46 (original emphasis and underlining). See also,
Preliminary Technical Report, Exhibit CEGH-7, page 58; Final Technical Report, Exhibit RDO-10, page 52.
286 Dominican Republic, second written submission, paragraphs 74-75; reply to question No. 195 from
the Panel.
287 Panel Report, EC – Salmon (Norway) , footnote 289, paragraph 7.115. See: Dominican Republic,
second written submission, paragraph 74; reply to question No. 109 from the Panel.
288 Dominican Republic, second written submission, paragraph 75. See also: Ibid., second written
submission, paragraphs 69-71; Final Technical Report, Exhibit RDO-10, pages 49-52.
289 Appellate Body Report, US – Lamb , paragraph 84. See also, Panel Report, US – Lamb ,
paragraph 7.69.
290 The technical reports indicate that, in some cases, after cutting and sewing, the bags may undergo an
additional printing process. See, for example, Final Technical Report, Exhibit CEGH-10, pages 32-35.
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7.197 On the other hand, the Dominican Republic does not mention that the observation by the
panel in EC – Salmon (Norway) did not constitute the basis of the determination in that case; in fact,
that panel determined that, in accordance with Ar ticle 4.1 of the Anti-Dumping Agreement, "any
enterprise that produced any form of the like produc t should be considered … a 'producer' of the like
product, and as such, part of the domestic industry".
291 In arriving at this conclusion, the panel
rejected arguments very similar to those put fo rward by the Dominican Republic in this dispute. 292
Moreover, what the panel said in EC – Salmon (Norway) was not that any "level of activity so low"
could justify the exclusion of an enterprise from the scope of the term "producer", but only that level
which indicated that an enterprise "do[es] not ac tually bring … into existence" the product in
question.293
7.198 As already pointed out, the reason cited in th e technical reports for excluding FIDECA from
the definition of the domestic industry was because it did not produce the directly competitive product
starting from a specific stage of production, namely the processing of resin. 294 The published report
of the competent authority does not contain any expl anation that would make it possible to conclude
that the level of activity of FIDECA in the producti on of polypropylene bags was "so low" that it did
not actually bring the bag into existence. Thus, the Panel considers that the statement of the Panel in
EC – Salmon (Norway) does not support the position of the Dominican Republic.
7.199 For these reasons, the Panel considers that, in excluding from the definition of the directly
competitive domestic product certain like or direc tly competitive products and, ultimately, producers
of the like or directly competitive product, the de termination of the domestic industry made by the
competent authorities is inconsistent with the obligat ions contained in Article 4.1(c) of the Agreement
on Safeguards.
7.200 Accordingly, the Panel does not consider it necessary to deal with the remaining arguments of
the complainants relating to the l ack of an adequate and reasoned de termination with respect to the
likeness or relationship of direct competition between the products in question and those relating to
the exclusion of other producers from the domestic industry.
(d) Conclusion
7.201 The Panel concludes that the complainants ha ve demonstrated that, by excluding from the
definition of the directly competitive domestic pr oduct certain like or directly competitive products
and, ultimately, producers of the like or directly competitive product, for the purpose of defining the
domestic industry in its preliminary and definiti ve determinations, the Dominican Republic acted
inconsistently with its obligations under Article 4.1(c) of the Agr eement on Safeguards. By imposing
a safeguard measure on the basis of a definition of the domestic industry that is inconsistent with
Article 4.1(c) of the Agreement on Safeguards, the Dominican Republic also acted inconsistently with

291 Panel Report, EC – Salmon (Norway), paragraph 7.115.
292 In particular, the panel in EC – Salmon (Norway) found that the argument of the
European Communities that "enterprises engaged in fille ting are not 'producers' as fillets do not result from a
process of 'production', but merely transformation of one presentation to another presentation" was difficult to
square with the ordinary meaning of the term "produce" ("bring a thing into existence"). Panel Report, EC –
Salmon (Norway), paragraph 7.114.
293 Panel Report, EC – Salmon (Norway), paragraph 7.120.
294 Despite what the Dominican Republic says, there is no indication that FIDECA was excluded
because the competent authority had decided to consid er a major proportion of the domestic industry. See
paragraph 1.195 of the present Report.
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its obligations under Article 2.1 of the Agreemen t on Safeguards and Article XIX:1(a) of the
GATT 1994.
7.202 In view of this finding, the Panel does not c onsider it necessary to rule on the additional
claims of the complainants relating to Articles 3.1, last sentence, and 4.2(c) of the Agreement on
Safeguards.
7.203 Nor does the Panel consider it necessary to make findings on the complainants' consequential
claims relating to Articles 4.1(a), 4.2(a) and 4.2(b) of the Agreement on Safeguards, or Article 6 of
the Agreement on Safeguards with respect to the provisional measure.
7.204 Having concluded that the Dominican Republic act ed inconsistently with obligations under
the covered agreements as regards the determina tion of unforeseen developments and the effect of
GATT obligations and as regards the definition of the domestic industry, it would not, in principle, be
necessary for the Panel to make any finding concer ning the other substantive claims made by the
complainants with respect to the provisional a nd definitive measures. Nevertheless, taking into
account the circumstances of the present case and with a view to assisting the parties to arrive at a
positive solution to the dispute, the Panel will consider the other claims of the complainants.
3. Whether the competent authority acted inconsistently with obligations under the
covered agreements with regard to the dete rmination of an increase in imports in
absolute and relative terms
(a) Main arguments of the parties
(i) Complainants
7.205 The complainants claim that, with respect to the provisional and definitive measures, the
Commission did not find an increase in imports in ab solute and relative terms in a manner consistent
with Article XIX:1(a) of the GATT 1994 and Articl es 2.1, 3.1, last sentence, and 4.2(c) of the
Agreement on Safeguards and, moreover, with Article 6 of the Agreement on Safeguards with respect
to the preliminary determination. Consequently, given the central importance of these determinations,
the complainants assert that the determinations of serious injury and causality, and by implication the
provisional and definitive measures, are inconsiste nt with Article XIX:1(a) of the GATT 1994 and
Articles 2.1, 4.1(a), 4.2(a) and 4.2(b) of the Agre ement on Safeguards, as well as with Article 6 of the
Agreement on Safeguards with respect to the provisi onal measure. Moreover, with respect to the
increase in imports in absolute terms, the complain ants maintain that the rate of increase was not
analysed, so that Article 4.2(a) of the Agreement on Safeguards was also infringed.
295
7.206 With reference to an increase in imports in ab solute terms that was "recent enough, sudden
enough, sharp enough and significant enough", the complainants also claim that the Commission
concluded that there had been such an increase de spite having determined that there was a "marked
decrease" in imports towards the end of the pe riod and that the Commission did not provide an
adequate and reasoned explanation as to why, despite this decrease, it still c onsidered that there had
been an increase in imports that was sufficiently recent, sudden, sharp and significant. The
complainants assert, in particular , that the reference made by the competent authority to an overall
decrease in imports during the year 2009 is insuffici ent and invalid, given that the investigation ought

295 Complainants, first written submission, paragraphs 238, 249, 255, 274, 276 and 282-284;
second written submission, paragraph 217.
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to have explained specifically how this factor had affected imports of the relevant products.
Furthermore, with respect to the information rela ting to the alleged increase in imports during the
year 2010, the complainants claim that this is an ex post explanation and that the increase was brought
up only with respect to the final determination and, consequently, is not relevant to the preliminary
determination. At the same time, they add that as this information does not correspond to the period
of investigation, it should not be taken into consideration for the purposes of the final determination
and, in any case, they maintain that the informati on was distorted so that it could not serve as a basis
for an objective analysis of the increase in imports.
296
7.207 Likewise, the complainants claim that the author ity did not make findings with respect to the
"pace" of imports, by which they mean their rate of increase (or its acceleration or deceleration) and
not the mere variation of amounts. 297 In particular, the complainan ts assert that neither the DEI nor
the Commission examined the growth trend of impor ts, but only compared absolute levels at the
beginning and end of the investigation period. A ccording to the complainants, if the rate of the
increase in imports had been considered, it would ha ve been concluded that it was decreasing, with an
initial increase and a subsequent cons tant, uninterrupted and drastic deceleration during the rest of the
period, so that the import analysis by the DEI and the Commission cannot be taken to show that there
was a recent, sharp, sudden and significant increas e in imports. The complainants add that the
determination by the competent authority with resp ect to the existence of an absolute increase in
imports is inconsistent with the factual finding th at imports contracted proportionately more than
domestic consumption.298
7.208 In addition, the complainants claim that th e premises on which the determination of an
increase in imports was based were i nvalid. In this respect, they note that the treatment of tubular
fabric and polypropylene bags as a single product affected the determination of the increase in
imports, and that if the Panel were to find that th ere were no adequate and reasoned explanations in
relation to the definition of the product under inves tigation, the determination concerning the increase
in imports should also be declared invalid. The co mplainants also maintain that Article 2.1 of the
Agreement on Safeguards establishes an identity between a product affected by a safeguard measure
and the import analysis concerning that product, so that if a safeguard measure affects two products,
the determination concerning imports would have to be based on each product in particular, since
otherwise the individuality required by Article 2.1 would not be respected. In the present case, they
note that the safeguard measure affected two products, but that the import analysis was based on a
single product. Likewise, the complainants refer to the statement by the Dominican Republic that the
effect of the imports within the context of non-attribution unde r Article 4.2(b) includes the effect of
the domestic production of the companies Filamentos del Caribe (FIDECA) and Textiles TITÁN, and
claim that from this there follows a discrepancy between the premises for the determination of the
increase in imports for the purposes of Article 2.1 and for non-attribution for the purposes of
Article 4.2(b) of the Agreement on Safeguards. Acco rding to the complainants, this inconsistency in
the use of the term imports is inadmissible, and results in either the determination concerning

296 See, complainants, first written submission, para graphs 237, 248 and 256-264; second written
submission, paragraphs 212-214; opening statement at the second meeting of the Panel, paragraph 49.
297 The complainants claim that, otherwise, the distinction between the amount and the rate of the
increase in imports in Article 4.2(a) of the Agreement on Safeguards would be meaningless. Complainants,
second written submission, paragraph 216.
298 Complainants, first written submission, paragraphs 266-269 and 273-274; opening statement at the
first meeting of the Panel, paragraph 82.
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increased imports being inconsistent with Article 2.1 or the determination of non-attribution being
inconsistent with Article 4.2(b) of the Agreement on Safeguards.
299
7.209 Finally, the complainants maintain that the Commission has not demonstrated an increase in
imports in relative terms with respect to the domestic industry. In this connection, they assert that the
Commission determined an increase in imports despite having found that the relative share of imports
in relation to domestic production had fallen steadily and uninterruptedly for most of the period
investigated. Likewise, they point out that th e Commission did not explain the discrepancy between
these findings and its final conclusion that in rela tion to domestic production imports had maintained
"a steady and increasing trend during the investiga tion period" and, consequently, claim that the
analysis by the competent authority does not prov ide a reasoned and adequate explanation of the
performance of imports in relative terms.300
(ii) Dominican Republic
7.210 The Dominican Republic maintains that the Commission established the existence of an
increase in imports in absolute terms that was recent enough, sudden en ough, sharp enough and
significant enough to justify the adoption of a safeguard measure, and that this increase was
demonstrated by a reasoned and adequate explana tion in the preliminary and final determinations. 301
It also argues that the decrease in imports during 2009 did not affect the nature of this increase, since,
as the Commission's findings show, the decrease was temporary and incidental (due to the overall
decrease in the Dominican Republic's imports in 2009) , as well as being insignificant in the light of
the major increase in imports over the whole of the pe riod of investigation. It adds that during the
final phase of the investigation, in its definitiv e findings, the Commission found additional support in
the data for 2010, which confirmed the transitory nature of the decrease.302
7.211 Moreover, the Dominican Republic asserts that the Commission correctly assessed the trend
in imports, by comparing the end points of the peri od investigated, as well as the data for each year
considered individually, taking into account both the rate of increase and the amount, while also
assessing the relevance of the decrease at the end of the period, as well as the data for the year 2010.
At the same time, the Dominican Republic points out that the complainants have not indicated how a

299 Complainants, second written submission, paragraphs 203-208; reply to question No. 192 from the
Panel.
300 Complainants, first written submission, paragraphs 275-282.
301 In particular, the Dominican Republic points out that an increase in imports of more than 60 per cent
in the year 2007, followed by an increase of more than 9 per cent in 2008, is an increase that is not gradual but
sudden; not slow but sharp; and not insignificant but signi ficant; and is recent, considering that the
investigation was started on 15 December 2009 and ended with the completion of the Final Technical Report on
13 July 2010. Dominican Republic, first written submission, paragraph 311.
302 Dominican Republic, first written submission, paragraphs 306, 312, and 317-320; second written
submission, paragraphs 84-86. The Dominican Republic stresses that the conclusion relating to the increase in
imports was reached on the basis of the period of investigation and that the data for the year 2010, although they
provided additional confirmation of the finding already made in the preliminary phase, did not form the basis for
the determinations of the Commission. Moreover, it maintains that the use of data not formally included in the
period of investigation has been confirmed and even encouraged by previous panels and by the Appellate Body.
Dominican Republic, second written submission, paragraphs 88-90; opening statement at the second meeting of
the Panel, paragraph 50 (where the Panel Reports in Argentina – Footwear (EC), paragraph 8.160, and Mexico –
Anti-Dumping Measures on Rice , paragraph 7.64, and the Appellate Body Report in Mexico – Anti-Dumping
Measures on Rice, paragraph 167, are cited).
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contraction in imports that exceeded the cont raction in apparent dom estic consumption would
contradict the Commission's conclusions concerning an absolute increase in imports.
303
7.212 Nor does the Dominican Republic agree with the interpretation of the complainants
concerning Article 2.1 of the Agreement on Safegua rds. According to the Dominican Republic, the
fact that the expression such product in Article 2.1 refers to a product subject to the safeguard
measure simply indicates that the product subject to the measure must correspond to the product under
investigation. In this respect, it notes that in th e present case the product under investigation and the
product subject to the measures are identical. It also points out that the complainants have not
questioned the determination of the product under investigation per se, so that the determination is
valid.
304
7.213 Finally, the Dominican Republic maintains that the Commission provided a reasoned and
adequate explanation of the trend in the imports in relative terms, by analysing each of the periods,
and demonstrated an increase in 2007 and a decr ease in 2008 and 2009, cons idering both the amount
and the rate of the increase, without limiting itsel f to comparing only the end points of the period
investigated. The Dominican Republic adds that, d espite the fact that an increase in imports was
recorded only for the year 2007, it complied with Ar ticle 2.1 of the Agreement on Safeguards, which
requires an increase in absolute or relative terms.305
(b) Main arguments of the third parties
(i) Colombia
7.214 Colombia points out that, in accordance with pr evious decisions made by the Appellate Body,
the determination concerning increased imports s hould be made on a case-by-case basis and should
show that the increase is of a nature such as to cause or threaten to cause serious injury. It adds that
there could be a case in which a decline in im ports 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 had been an abso lute increase in imports, despite their decreasing
towards the end of the period. In the present case, Colombia considers that the conclusion reached by
the Dominican Republic concerning the increase in im ports and its causal link with the alleged injury
is inadequate, inasmuch as the Dominican Repub lic restricted its assessment to the cumulative
increase in imports of tubular fabric and polypropy lene bags, without making it clear whether the
increase related to tubular fabric or polypropylene bags.306
(ii) United States
7.215 The United States considers that the Agre ement on Safeguards does not establish any
particular methodology or analytic framework for evaluating increased imports; in particular, it notes

303 Dominican Republic, first written submission, para graphs 327, 334 and 336 (where the Appellate
Body Report in Argentina – Footwear (EC), paragraph 129, is cited); opening statement at the second meeting
of the Panel, paragraph 51. The Dominican Republic notes that a comparison between the trend in the growth of
imports and the trend in the growth of apparent domestic consumption could give an indication of the increase
in imports relative to domestic production, but says nothing about the absolute increase in imports. Ibid.,
paragraph 335.
304 Dominican Republic, reply to Panel question No. 193; comments on the reply of the complainants
to Panel question No. 192.
305 Dominican Republic, first written submission, paragraphs 338-339.
306 Colombia, third party written submission, paragraphs 55, 58 and 63.
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that Articles 2.1 and 4.2 of the Agreement on Safegu ards make no reference to the end of the period
of investigation, nor do they indicate any special ro le for any particular period of time within the
overall period of investigation. At the same time, the United States points out that in US – Steel
Safeguards 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 inves tigation would necessarily prevent an investigating authority from
finding that, nevertheless, products continue to be imported 'in such increased quantities'".
307
(iii) Panama
7.216 Panama considers that in the present case imports of the products in question fluctuated and
there was no substantiated determination by the co mpetent authority to show that the increase in
imports was recent, sudden, sharp and significant. At the same time, it points out that a determination
of increased imports requires proof that the imports increased steadily or an adequate and reasoned
explanation of the reasons why, despite the increase lacking regularity, it was still considered that the
imports increased recently, suddenly, sharply and significantly. In this dispute, Panama is of the
opinion that the conclusions of the investigating au thority do not indicate of a demonstration that the
increase in imports displayed these characteristics.
308
(c) Assessment of the Panel
7.217 This complaint raises the question of whethe r the determinations of the Commission
concerning an increase in imports, in both absolute and relative terms, are inconsistent with
Articles 2.1, 3.1, last sentence and 4.2(c) of th e Agreement on Safeguards and with Article XIX:1(a)
of the GATT 1994, as well as with Article 4.2(a) of the Agreement on Safeguards, where the increase
in imports in absolute terms is concerned.
7.218 Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 predicate
the existence of an increase in imports, in absolute or in relative terms, as a prerequisite for the
application of a safeguard measure.
7.219 Article 2.1 of the Agreement on Safeguards stipulates that:
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
the domestic industry that produces like or directly competitive products. (Footnote
omitted.)
7.220 The relevant part of Article XIX:1(a) of the GATT 1994 reads as follows:
If … any product is being imported into the te rritory of that contracting party in such
increased quantities and under such conditions as to cause or threaten serious injury
to domestic producers in that territory of like or directly competitive products … .

307 United States, third party written submission, para graphs 10-11 (where the Appellate Body Report
in US – Steel Safeguards, paragraph 367, is cited).
308 Panama, third party written submission, paragraphs 28-30.
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7.221 These provisions do not make reference to any increase in imports. On the contrary, they
state that the product must be imported into the territory of the Member concerned in such quantities
(absolute or relative to domestic pr oduction) as to cause or threaten to cause serious injury. In other
words, as the Appellate Body has pointed out, it follows from both these provisions that the increase
in imports must have been recent enough, sudden e nough, sharp enough, and significant enough, both
quantitatively and qualitatively, to cause or threaten to cause serious injury.
309 This assessment must
be made on a case-by-case basis.310
7.222 The Panel will first address the claim by the co mplainants concerning the increase in imports
in absolute terms, including their claim relating to th e rate of the increase in imports. Next, the Panel
will refer to claim made by the complainants with respect to the increase in imports relative to
domestic production. In this connection, it will examine whether, in its published report, the
competent authority provided a reasoned and adequa te explanation of the way in which the factors
corroborate its determination.
(i) Absolute variation in imports
7.223 The data on absolute levels of imports on wh ich the Commission based its determination are
contained in the Preliminary and Final Technical Re ports of the DEI. The relevant findings can be
found in the respective Resolutions of the Commission.311
7.224 The Commission's Definitive Resolution reads as follows:
31. In its Final Technical Report the DEI notes that the relative increase in
imports of polypropylene bags and tubular fabric has fluctuated; during the period
2006/2007 imports increased by 60.76 per cent, during the period 2007/2008 the
increase was 9.40 per cent, while in 2009 w ith respect to 2008 imports fell by 14.68
per cent. Finally, over the time-frame of th e investigation imports increased by 50.06
per cent.
32. Moreover, the DEI continues by noting that the analysis of the impact of the
provisional safeguard measure adopted by the Commission showed that it did not
have a significant impact on imports during th e months of May and June 2010, due to
the apparent existence of factors favouring a recovery in the imports investigated.
33. In May 2010, as compared with April 2010, imports experienced a recovery
of 42 per cent, while in June of the same year imports increased substantially by 275
per cent, to almost three times the imports recorded in May.
34. Moreover, imports in June 2010 exceeded by 69 per cent the imports
recorded over the same period in 2009.
312

309 Appellate Body Report, Argentina – Footwear (EC), paragraph 131.
310 Appellate Body Report, US – Steel Safeguards, paragraphs 351 and 360.
311 The preliminary and definitive Resolutions of the Commission refer to the respective technical
reports issued by the DEI, which formed an integral part of the resolutions. See paragraph 7.10 of the present
Report.
312 Definitive Resolution, Exhibit CEGH-9, paragraphs 31-34. See also, Preliminary Resolution,
Exhibit CEGH-5, paragraphs 43-44.
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7.225 The Preliminary Resolution also refers to the increase in the value and volume of imports.
The Preliminary Resolution contains the same pe rcentage data as the Definitive Resolution with
respect to the increase in imports of polypropylene bags and tubular fabric, both for the whole of the
period of investigation and year-on-year, and also notes that the increase in imports resulted in an
absolute variation of 956,399.89 kg over the period of investigation.
313
7.226 The relevant part of the Final Technical Report reads as follows314:
Volume of imports of polypropylene bags and tubular fabric
…
As the following table shows, the absolute variation in the volume of imports of
polypropylene bags in 2007 with respect to 2006 was 1,160,748.39 kg; for the
period 2007/2008 the volume of imports remained relatively stable with respect to the
previous year increasing by 288,747.63 kg; in 2009 relative to 2008 there was an
absolute decrease of (493,096.13) kg. Finall y, over the period 2006-2009, there was
an absolute variation of 956,399.89 kg in th e volume of imports of bags and tubular
fabric.
Table 16. Absolute increase in imports of polypropylene bags and tubular fabric

 Volume (kg) Absolute variation
Source: Compiled by the Investigation Department using Directorate-General of Customs data.
The relative increase in imports of polypropyl ene bags and tubular fabric fluctuated:
during the period 2006/2007 imports in creased by 60.76 per cent, during the
period 2007/2008 the increase in imports was 9.40 per cent, and in 2009 imports fell
by 14.68 per cent relative to 2008. Finally, over the time-frame of the investigation
imports increased by 50.06 per cent.

313 Preliminary Resolution, Exhibit CEGH-5, paragraphs 42-44.
314 Final Technical Report, Exhibit CEGH-10, pages 51-52 (original emphasis). The same findings
were recorded in the Preliminary Technical Report, Exhibit CEGH-7, pages 61-62.
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Table 17. Relative increase in imports of polypropylene bags and tubular fabric

 Volume (kg) Relative variation
Source: Compiled by the Investigation Department using Directorate-General of Customs data.
7.227 The DEI's Final Technical Report, referring to the decrease in imports in 2009, states:
[T]his reduction can be attributed to the decrease in the Dominican Republic's overall
imports in 2009. According to the report on the Preliminary Results for the
Dominican Economy January-September 2009, published by the Central Bank, the
slowdown in the economy was reflected in a reduction in the demand for imports, so
that total imports amounted to US$8,743.0 million, equivalent to a fall of
US$3,796.6 million (30.3 per cent) in th e import level as compared with the
corresponding period in the previous year, with a decrease of 32.3 per cent in national
imports. Of these, raw materials fell by 39.4 per cent and c onsumption goods by
29.2 per cent with the remaining 26.3 per cent corresponding to capital goods.
In addition, the DEI agrees with the ruling of the Appellate Body of the WTO, in
which it makes clear that Article 2.1 of the Agreement does not require that imports
need to be increasing at the time of the de termination. The plain meaning of the
phrase "is being imported in such increased quantities" suggests merely that imports
must have increased, and that the relevant products continue "being imported" in
(such) increased quantities. Therefore, a d ecrease in imports at the end of the period
of investigation would not necessarily preven t an investigating authority from finding
that, nevertheless, products continue to be imported "in such increased quantities".
315
7.228 The Preliminary Technical Report contains identical findings.316
7.229 In the Final Technical Report, the DEI also explained:
Furthermore, during the final phase of this investigation the DEI analysed the trend in
imports (in volume and value) of the pr oduct under investigation during the period
January-June 2010, as compared with the corresponding period in 2009. See under
letter C of this chapter.317

315 Final Technical Report, Exhibit CEGH-10, pages 61-62 (citing the Appellate Body in US – Steel
Safeguards, paragraph 367) (original emphasis, footnotes omitted).
316 Preliminary Technical Report, Exhibit CEGH-7, page 68.
317 Final Technical Report, Exhibit CEGH-10, page 62 (original underlining).
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7.230 For its part, letter C, as mentioned in the quot ation from the Final Technical Report contained
in the preceding paragraph, reads as follows:
C. Trends in the volume and price of imports of polypropylene bags and
tubular fabric during the months of January-May 2010 as compared with the
corresponding period in 2009.
On analysing the trend in imports in 2010 relative to 2009, we note that in the months
of February, March and June imports for 2010 exceeded those for 2009.
For the purpose of examining the impact of the provisional safeguard measure
adopted by the Commission, which entered into force on 1 April 2010, we note that
for that month in 2010, as compared with the previous month in the same year,
imports decreased by 47 per cent and by 65 per cent when compared with
April 2009.
66
However, the trend in imports in May 2010 as compared with April 2010 was
characterized by a recovery of 42 per cent, and in June of the same year imports
increased by a staggering 275 per cent, to almo st three times the imports recorded in
May. If we compare the month of June 2010 with the corresponding month in 2009,
we find that imports in 2010 were 69 per cent higher than in 2009.
This trend in imports in the months of May and June 2010 allows us to draw the
preliminary conclusion that the provisional safeguard measure did not have a positive
impact in those months, apparently due to the existence of factors favouring the
recovery of the imports investigated.
318
66 It should be noted that on the eve of the measure (months of February and March) there was
a considerable increase in the volume impo rted, perhaps with the aim of ensuring ample
stocks before the possible application of a provisional measure in the month of April.
7.231 The Panel notes that the Commission's ev aluation took into account the import data
corresponding to each of the years of the period of investigation, as well as the trend in imports over
that period. The Commission found a global increase in imports of 956,399.89 kg (50.06 per cent)
over the period investigated. An increase in imports of 1,160,748.39 kg (60.76 per cent) was
observed at the beginning of the period (2006-2007) and an increase of 288,747.63 kg (9.40 per cent)
during the intermediate period (2007-2008), so that imports increased continuously in two out of
three annual comparisons, including a significant increase between the years 2006 and 2007. It also
identified a decrease in imports of 493,096.13 kg (14.68 per cent) at the end of the
period (2008-2009). In the Preliminary Technical Report it was indicated that the decrease in
question could be attributed to an overall reduction in Dominican Republic imports in 2009. In the
final phase of the investigation, reference was also made to the fact that in th e first half of 2010, in
particular in the months of February, March and June of that year, imports recovered, in some cases
reaching levels higher than those recorded during 2009.319

318 Final Technical Report, Exhibit CEGH-10, pages 55-56 (original underlining, some footnotes
omitted).
319 As in the preliminary phase, th e competent authority referred to the Appellate Body Report in US –
Steel Safeguards (where the Appellate Body stated that Article 2 of the Agreement on Safeguards "does not
require that imports need to be increasing at the time of the determination"). Final technical report,
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7.232 The complainants assert that the explanation refe rring to the overall fall in imports is invalid.
They claim that the overall fall in imports was a m acroeconomic development that affected the entire
tariff universe, so that the possibility of the de mand for certain imported products remaining stable
cannot be ruled out. They add that it does not fo llow from this explanation that the decrease in
imports at the end of the period was a temporary decrease or that the authority characterized it as
such.
320
7.233 The Panel does not consider the arguments of the complainants convincing. The Panel does
not exclude the possibility that the demand for cer tain products could have remained stable and
therefore unaffected by the overall fall in imports. However, the complainants have not argued or put
forward any evidence from which it could be conclude d that this was the case with respect to the
products in question.321 Although the DEI did not explicitly show that the decrease in imports at the
end of the period was temporary, the complainants ha ve not offered any evidence to the contrary. In
particular, the complainants have not demonstrated that the decrease in imports (or the overall
decrease in imports) reflected a permanent or long-term change.
7.234 The complainants also argue that the inform ation relating to the increase in imports during
2010 does not belong to the period of investigation, so that it cannot be taken into consideration for
the purposes of the definitive measure.322 Nevertheless, the complainants have not proposed any legal
basis for their position and indeed acknowledge th at other previous panels have required the
possibility of using information relating to a period subsequent to that investigated. 323 In any event,
the data for 2010 did not constitute the competent au thority's main explanation for finding an absolute
increase in imports, despite the decrease identified at the end of the period. On the contrary, as
pointed out in the preceding paragraphs, the compet ent authority referred to the data corresponding to
the year 2010 in addition to the explanation that it had already given in the preliminary phase of its
investigation, namely, that the decr ease in the imports in question c ould be attributed to the overall
decrease in Dominican imports in 2009. 324 The complainants have not demonstrated that this finding
constitutes an invalid explanation.325
7.235 Nor does the Panel regard as valid the assertion of the complainants to the effect that the
competent authority failed to examine the rate of the increase in imports. According to the
complainants, the rate was decreasing sharply (from 60.76 per cent in 2007, to 9.4 per cent in 2008,
and to -14.68 per cent in 2009), so that it could not be concluded that there had been a recent, sudden

Exhibit CEGH-10, page 62 (which cites the Appellate Body in US – Steel Safeguards, paragraph 367) (original
Appellate Body italics and underlining). See also, Prelim inary Resolution, Exhibit CEGH-5, page 6; definitive
Resolution, Exhibit CEGH-9, pages 5-6.
320 See, for example, complainants, reply to question no. 118 from the Panel; opening statement at the
first meeting of the Panel, paragraphs 77-78.
321 On the contrary, in their first written submission, the complainants assert that "[t]he explanation
given by the DEI indicates that the fall in imports reflected the significant variation in the market for tubular
fabric and polypropylene bags in the Dominican Republic as a result of the slowdown in its economy due to the
financial crisis of 2008". Complainants, first written submission, paragraph 271.
322 Complainants, second written submission, paragraph 213.
323 Complainants, reply to Panel question No. 196 (which refers to the panel report in Argentina –
Footwear (EC)).
324 See paragraph 1.230 of the present Report.
325 For the same reason, the Panel rejects the argu ment of the complainants that the preliminary
determination concerning increased imports lacks a fact ual element explaining the irrelevance of the decrease
towards the end of the period of investigation. Complainants, second written submission, paragraph 212.
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and sharp increase in imports.
326 Nevertheless, as already pointed out, the competent authority
analysed the data relating to imports in each of the years of the period investigated, as well as the
development of the trend in imports over this period. 327 Moreover, it cannot be assumed that an
increase of 9.4 per cent in the intermediate period constituted a decrease in imports, especially when
this increase was calculated on the basis of an abso lute volume of imports that had already increased
significantly in the immediately preceding period. Ther e is nothing in the text of Article XIX:1(a) of
the GATT 1994 or the Agreement on Safeguards to indi cate that the rate of the increase in imports
must accelerate (or be positive) at every moment of the period of investigation or that it is rising and
positive only if every percentage increase is greater than the preceding increase. 328 As the
Appellate Body has pointed out, the determination of whether the product "is being imported in such
increased quantities" is not a "mathema tical or technical" determination 329, but rather an evaluation
that must be made case by case. 330 The Panel therefore considers that the complainants have not
demonstrated that the competent authority did not exam ine the rate of the increase in imports nor that
the increase in imports it found could not have been considered recent, sudden and sharp.
7.236 The complainants also maintain that Article 2.1 of the Agreement on Safeguards establishes
an identity between a product subject to a safeguard measure a nd the analysis of the imports relating
to that product, so that if a safeguard measure affects two products, the import determination must be
made with respect to each product.331 The Panel understands that the point raised by the complainants
is that the determination of the increase in imports is invalid because there was no separate
determination of the increase in imports of tubula r fabric, on the one hand, and polypropylene bags,
on the other. However, as the complainants have not stated an objection to the definition of the
product under investigation per se332, the Panel considers that the de finition adopted by the competent
authority is that which governs the definition of the product under investigation, as well as the way in
which the relevant data should have been analysed in the investigation. Given the undisputed
definition of tubular fabric and polypropylene ba gs as the product under investigation, the Panel does
not regard as valid the argument of the complainan ts that the increase in imports should have been
demonstrated separately with respect to each of these products.
7.237 In any event, the complainants have not demons trated that Article 2.1 of the Agreement on
Safeguards requires the separate consideration of im ports of each product that forms part of a single
product under investigation. Although Article 2.1 states that a saf eguard measure may be applied to
a product, imports of which have increased, this provi sion does not require a disaggregated analysis
for all cases in which the definition of the product under investigation comprises more than
one product. At the same time, neither have the complainants explained how, in the circumstances of
the present case, the joint consideration of tubular fabric and polypropylene bags could have affected
the analysis made by the Commission and resulted in an inadequate determination of the increase in

326 See, for example, complainants, first written submission, paragraphs 265-269; opening statement at
the first meeting of the Panel, paragraph 82.
327 The competent authority determined that the increase in imports had "fluctuated". Specifically, it
indicated that "the absolute variation in the volume of imports … in 2007 with respect to 2006 was
1,160,748.39 kg; for the period 2007/2008 the volume of imports remained relatively stable with respect to the
previous year … in 2009 relative to 2008 there was an absolute decrease … . Finally, over the period
2006-2009, there was an absolute variation of 956,399.89 kg in the volume of imports of bags and tubular
fabric". See, for example, Preliminary Technical Report, Exhibit CEGH-7, pages 61-62 (original emphasis).
328 See Appellate Body Report, Argentina – Footwear (EC), paragraph 131.
329 Appellate Body Report, Argentina – Footwear (EC), paragraph 131.
330 Appellate Body Report, US – Lamb, paragraphs 351 and 360.
331 Complainants, second written submission, paragraphs 205-206; reply to Panel question No. 192.
332 See paragraph 1.176 of the present Report.
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imports during the period of investigation.
333 For these reasons, the Panel considers unfounded, in
this respect, the complainants' argument that the premises on which the determination of increased
imports was based are invalid.
7.238 Likewise, the Panel considers the argument c oncerning the alleged discrepancy between the
premises for the increased imports and non-attri bution determinations to be unjustified. The
complainants appear to be saying that the effe ct of the imports within the context of the
non-attribution analysis included the effect of th e domestic production of the companies FIDECA and
Textiles TITÁN, whereas the analysis of the incr ease in imports did not include any aspect of the
domestic production, so that there is a discrepancy in the use of the term imports in the
investigation.334 However, the complainants have not demonstrated that the competent authority's
non-attribution analysis included the production of the companies FIDECA and Textiles TITÁN and
there is nothing in the file to suggest that this was the case.335
7.239 The Panel therefore considers that the compla inants have failed to make the case that the
published report of the competent authority does no t contain a reasoned and ad equate explanation of
the way in which the relevant factors corroborate th e determination of the existence of an absolute
increase in imports of the products in question.
7.240 In conclusion, the Panel rejects the claim of the complainants that the fi nding of an absolute
increase in imports made by the Dominican Repub lic was inconsistent with Article 2.1 of the
Agreement on Safeguards and with Article XIX:1(a) of the GATT 1994, and that the findings and
explanations provided by the Dominican Republic in this respect, insofar as they relate to the
preliminary and definitive determin ations, were inconsistent with the provisions of Articles 3.1, last
sentence, and 4.2(c) of the Agreement on Safeguards. Likewise, the Panel rejects the claim of the
complainants that the competent authority failed to analyse the rate of the increase in imports and that
the Dominican Republic thereby infringed Article 4.2(a) of the Agreement on Safeguards.
7.241 In relation to the determination of the comp etent authority concerning increased imports, the
complainants also cite Article 11.1(a) of the Agreement on Safeguards and, where the preliminary
determination is concerned, Article 6 of the Agreement on Safeguards. However, with respect to this
latter aspect of their claim, as well as with respect to the claims that they put forward consequentially,
the complainants did not formulate any specific ar guments; consequently, even assuming that all

333 Neither does the Panel consider th at the text of Article XIX:1(a) of the GATT 1994 or the fact that
safeguard measures should be exceptional and extraord inary in nature supports the interpretation of the
complainants. In particular, the complainants have failed to explain how the nature of the measures would
support their interpretation. At the same time, the mere reference to particular products in the title of
Article XIX:1(a) says nothing about the scope of these particular products.
334 Complainants, second written submission, paragraphs 207-208.
335 In view of its previous findings (see paragraph 7.182 of the present Report), the Panel rejects the
additional argument of the complainants that "if the Panel were to find that there were no adequate and reasoned
explanations regarding the definition of the imported pr oduct under investigation, the analysis of increased
imports would also be invalid". Complainants, second written submission, paragraphs 203-204.
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these claims were properly brought before it
336, the Panel will refrain from making findings in this
respect.337
(ii) Relative variation in imports
7.242 The determination of an absolute or relative increase in imports that causes or threatens
serious injury is sufficient to entitle a Member to adopt a safeguard measure. Consequently, given the
previous finding concerning the de termination of the competent author ity with regard to imports in
absolute terms, the Panel does not consider it necessary to make additional findings with respect to the
determination of the behaviour of imports in re lative terms. The possible making of additional
findings with respect to increased imports could not affect the Panel's finding that the complainants
have failed to show that the Dominican Republic infringed the relevant provisions of the Agreement
on Safeguards and Article XIX:1(a) of the GATT 1994 by not demonstrating an increase in imports
within the meaning of those provisions.
4. Whether the competent authority acted inconsistently with obligations under the
covered agreements with regard to the determ ination of serious injury to the domestic
industry
(a) Main arguments of the parties
(i) Complainants
7.243 The complainants claim that, in its determinati on of the existence of serious injury to the
domestic industry, with respect to the provisional and definitive measures, the Commission acted
inconsistently with Articles 2.1, 3.1, last senten ce, 4.1(a), 4.2(a) and 4.2(c) of the Agreement on
Safeguards and with Article XIX:1(a) of the GATT 1994, as well as with Article 6 of the Agreement
on Safeguards as far as the provisional measure is concerned. In support of their complaint
concerning serious injury, the complainants make the following four points.
7.244 First, the complainants argue that the Commis sion acted inconsistently with Articles 4.1(a),
4.2(a), 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards in not having carried out a
disaggregated and complete analysis of the various segments of the domestic industry for the purpose
of determining serious injury. In particular, the complainants argue that the Commission did not carry
out separate analyses of the production of tubular fabric and the production of polypropylene bags and
that it did not consider information relating to the commercial market for tubular fabric. 338 Likewise,
in reply to the arguments put forward by the Domi nican Republic in its defence, the complainants
argue that the evidence provided by the Dominican Republic shows that the Commission based its
analysis on information from FERSAN (Bags Division), which produces not only the like or directly

336 The complainants' consequential claim under Article 4.1(a) of the Agreement on Safeguards was not
identified in the relevant part of their requests for the establishment of a panel and therefore it is not even clear
that it falls within the Panel's terms of reference. In any case, in view of the previous findings, it is not
necessary for the Panel to rule in this respect.
337 In this connection, the Panel notes that in Chile – Price Band System , the Appellate Body observed
that a panel cannot make findings on issues that cannot be considered to have been properly brought before it
because the complaining party has not clearly articulated a claim or submitted arguments. See: Appellate Body
Report, Chile – Price Band System, paragraph 173.
338 Complainants, first written submission, paragraphs 286 and 297-312.
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competitive product but also other products such as mesh bags, cordage and ropes, and improperly
included in its analysis information about FERSAN's exports.
339
7.245 Second, the complainants argue that the Commission acted inconsistently with Articles 4.2(a),
3.1, last sentence, and 4.2(c) of the Agreement on Safeguards in failing to consider in the preliminary
determination all the relevant fact ors of serious injury listed in Article 4.2(a) of the Agreement on
Safeguards. In particular, the complainants argue that the Commission failed to evaluate the
productivity factor and that it is not enough for th e Dominican Republic to suggest that the result of
this factor could be assessed by combining the production and employment indicators.340
7.246 Third, the complainants claim that the Commissi on determined the existence of serious injury
in the preliminary and final resolutions, despite the fact that the indicators showed the contrary or
were inadequately evaluated, acting inconsistently w ith Articles 4.1(a), 4.2(a), 3.1, last sentence, and
4.2(c) of the Agreement on Safeguards. With regard to the Preliminary Resolution, they point out that
the Commission: (i) after finding that productio n was indicating steady growth, came to the
contradictory conclusion that this factor had contr acted; and (ii) failed to give an adequate and
reasoned explanation of why it considered that there had been an increase in inventories and financial
losses. Likewise, they point out that, in the De finitive Resolution, the Commission: (i) failed to
explain how it was that the performance of inventor ies, cash flow and the alleged contraction of
production constituted an indication of the company's fi nancial losses; and (ii) after finding that the
indicators corresponding to production and the domes tic product's share of domestic consumption had
improved, reached the contradictory conclu sion that these indicators had deteriorated. 341 Moreover,
they point out that the Commission found that the performance of the domestic industry with respect
to the other factors (sales, capacity utilization, pr oductivity, employment, wages and production) was
"quite favourable". In their opinion, the overall picture of the domestic industry indicated that it was
growing and not experiencing a situation of significant overall impairment within the meaning of
Article 4.1(a) of the Agreement on Safeguards.342
7.247 Fourth, the complainants assert that the appli cation of the provisional safeguard measure was
inconsistent with Articles 6, 3.1, last sentence, a nd 4.2(c) of the Agreement on Safeguards. In this
respect, they point out that in the Preliminary Resolution the Commission failed to give a reasoned
and adequate explanation of the existence of critical circumstances that would justify the imposition

339 Complainants, opening statement at the first meeting of the Pane l, paragraphs 86-88. Likewise, the
complainants consider that there is no support for the Dominican Republic's ex post explanation that the
production of "other products" did not exceed 15 per cent of the total output of the Bags Division. See
complainants, opening statement at th e second meeting of the Panel, para graphs 52-53. Furthermore, the
complainants point out that Article 3.6 of the Anti-Dump ing Agreement is not applicable to safeguards. The
complainants add that the explanations of the Dominican Republic concerning the company's depreciation and
amortization costs are ex post and that the Commission did not carry out a proportional assessment of these
costs in relation to the production of products different from the like or directly competitive product or the
production intended for export. See, complainants, opening statement at the second meeting of the Panel,
paragraphs 54-56.
340 Complainants, first written submission, paragraphs 286 and 313-320; opening statement at the first
meeting of the Panel, paragraph 95.
341 Complainants, first written submission, paragraphs 321-323. Moreover, the complainants point out
that some of the explanations provided in the present proceedings by the Dominican Republic concerning these
factors are ex post . See complainants, opening statement at the first meeting of the Panel, paragraph 84;
second written submission, paragraphs 223-225.
342 Complainants, first written submission, paragraphs 286 and 367-368.
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of a provisional measure.
343 In their opinion, there is no reason for interpreting the standard of proof
of serious injury differently in a final and in a preliminary determination.344
(ii) Dominican Republic
7.248 The Dominican Republic rejects the claims of the complainants and replies that they are
based on an erroneous interpretation of the facts and the applicable law. 345 In its opinion, the Panel
should reject the claim that the preliminary and definitive determinations of serious injury are
inconsistent with Articles 2.1, 3. 1, last sentence, 4.1(a), 4.2(a), 4.2(c) and 6 of the Agreement on
Safeguards and with Article XIX:1 of the GATT 1994.346
7.249 Concerning the complainants' first argument, th e Dominican Republic claims that neither the
Agreement on Safeguards nor the previous decisions of panels or the Appellate Body oblige the
investigating authorities to undertake a separate anal ysis of each segment of the domestic industry for
its injury determination. 347 Moreover, it points out that in its analysis it considered information on
both bags and tubular fabric, having based its an alysis on the financial statements of the
Bags Division which produces both products. For th e same reason, it asserts that it took account of
sales of tubular fabric to domestic buyers. 348 Likewise, it asserts that, ev en though the Bags Division
also produces other products which were not unde r investigation, the like product constituted more
than 85 per cent of the Division's total output. 349 Moreover, it considers that there is no obligation to
limit the analysis of injury to the production for the domestic market, to the exclusion of the part
exported.350
7.250 With regard to the complainants' second argumen t, the Dominican Republic maintains that in
its preliminary determination the Commission took the productivity factor into account, since it
measured both the trend in the volume and value of production and the trend in the number of
employees during the period of investigation and, on the basis of these data, was able to calculate the
productivity for the period. In its opinion, Article 4.2(a) of the Agreement on Safeguards does not
require that each of the factors relating to injury be formally set out under separate headings; it is
enough to demonstrate that the competent authorities ev aluated each of them. It also considers that

343 Complainants, first written submission, paragraphs 286, 370 and 374-379.
344 Complainants, second written submission, paragraphs 227-228; reply to Panel questions Nos. 143
and 146. Furthermore, the complainants consider th at the Commission did not expl ain why the existence of
significant financial losses ha d jeopardized the sustainability of the domes tic industry. They also consider that
neither did other indicators of serious injury in the Pr eliminary Technical Report (such as the performance of
imports, production and stocks) demonstrate the existence of serious injury which it would be difficult to repair.
See complainants, first written submission, paragraphs 374-378.
345 Dominican Republic, first written submission, paragraphs 344-345.
346 Dominican Republic, first written submission, paragraph 374, 407-408 and 435-436.
347 Dominican Republic, first written submission, paragraphs 348, 351 and 361; second written
submission, paragraph 96.
348 Dominican Republic, first written submission, paragraphs 358-359.
349 In its opinion, by the analogous application of the provisions of Article 3.6 of the Anti-Dumping
Agreement, the competent authority was able to use the information corresponding to the Bags Division, which
is responsible for the production of the more restricted group of products that includes the like product.
350 Dominican Republic, second written submission, paragraphs 98-100.
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Article 6 of the Agreement on Safeguards does not require the analysis of the critical circumstances
indicators for a provisional measure to be as strict as in the definitive phase.
351
7.251 In relation to the complainants' third argum ent, the Dominican Republic asserts that in
examining the injury indicators, the competent authority assessed the overall picture of the domestic
industry to determine whether there had been significant overall impairment . In its opinion, the
analysis of the indicators in the Final Techni cal Report indicated that as from 2007 the domestic
industry had suffered financial losses which had incr eased every year. Likewise, it asserts that the
domestic industry's market share decreased up to 2008 and only in 2009 managed to exceed the share
it had achieved in 2006. According to the Domini can Republic, an investigating authority does not
have to examine the effect of every individual factor and is only required to explain the impact of the
relevant factors on the domestic industry and whether that impact is resulting in an overall significant
impairment of its situation. 352 In its opinion, the findings e xpressed in the resolutions and the
technical reports constitute a reasoned and adequate explanation of its determination.353
7.252 With respect to the complainan ts' fourth argument, the Dominican Republic sees no need for
the Panel to make a finding concerning the provision al measure, which was replaced by the definitive
measure with retroactive effect, in order to achieve a positive solution to the dispute. Nevertheless, it
asserts that the Commission correctly assessed the seri ous injury in the preliminary determination and
adequately established that delay in adopting a pr ovisional measure would ha ve resulted in damage
difficult to repair.354
(b) Main arguments of the third parties
(i) Colombia
7.253 Colombia considers that the dispute between the parties over the provisional measure affords
the Panel a unique opportunity to rule on what should be understood by critical circumstances in
Article 6 of the Agreement on Safeguards. Colomb ia suggests that the Panel should consider, as
factors that make the damage difficult to repair, aspects of the economic reality of the enterprise, such
as its inventories, sales, profit margins and the pri ce of like products, which should be compared with
the most recent (in the last six months) fluctuations in imports, in order to determine whether, if no
provisional measure were imposed, the damage would be difficult to repair. Without taking a position
on the facts of the case, Colombia invites the Panel to rule on the scope of this obligation.355
(ii) United States
7.254 The United States considers that the Panel s hould examine whether the provisional measure
had expired before the consultation procedure began, since in that case the measure would fall outside
its terms of reference. Assuming that the measure falls within the terms of reference, it would be

351 Dominican Republic, first written submission, paragraphs 367-374; reply to Panel
questions Nos. 145-146. The Dominican Republic affirms that Article 6 of the Agreement on Safeguards refers
to "critical circumstances" in which any delay would cause damage difficult to repair.
352 Moreover, the Dominican Republic points out that the overall picture of the domestic industry is
revealed by the injury factor analysis in the Final Technical Report and the financial statements of the
Bags Division.
353 Dominican Republic, first written submission, paragraphs 376-385, 387, 390-396 and 407-408.
354 Dominican Republic, first written submission, paragraphs 410, 413-415, 419-436; reply to Panel
question No. 38.
355 Colombia, third party written submission, paragraphs 66, 69 and 71.
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necessary to examine whether making findings in th is respect would facilitate a positive solution to
the dispute. If not, this might be an appropriate situation for applying procedural economy. With
regard to the standard of proof of injury for th e purposes of the provisional measure, the United States
asserts that, under the terms of Articles 6, 2 and 7 of the Agreement on Safeguards, a Member can
impose a provisional measure only if it has determined that there is clear evidence that increased
imports have caused or are threatening to cause serious injury and that there are "critical
circumstances where delay would cause damage which it would be difficult to repair".
356
(iii) Panama
7.255 Panama considers that the investigating author ity did not carry out a detailed serious injury
analysis, nor did it produce objective and positive ev idence in support of its investigation or the
application of the safeguard measures. It also cons iders that, in view of the investigating authority's
failure to establish a clear and objective defin ition of the domestic industry and unforeseen
developments resulting in serious injury through increased imports, and to demonstrate that the
increase in imports was a decisive factor in the change in the market, the Dominican Republic was not
in a position to conclude that these factors had been properly verified. Therefore, the
Dominican Republic acted inconsistently with Articles 4.2(a) and 2.1 of the Agreement on
Safeguards.357
(iv) European Union
7.256 The European Union observes that if the complainants wanted to challenge the provisional
measure, they should have submitted their request fo r the establishment of a panel before the measure
expired. Concerning the standard of proof of in jury for the purposes of the provisional measure, it
asserts that Articles 4.1(a) and 4.1(b) define serious injury and threat of serious injury for the
purposes of the Agreement on Safeguards without distinguishing between the provisional and
definitive measures. Likewise, ne ither does Article 4.2(a) distinguish between the provisional and
definitive measures. Consequently, the preliminar y determination under Artic le 6 of the Agreement
on Safeguards must be based on clear evidence a nd a reasoned and adequate explanation of the
existence of serious injury.358
(c) Assessment of the Panel
7.257 The Panel will examine the claim advanced by the complainants that the preliminary and
definitive determinations of serious injury to the domestic industry made by the Commission are
inconsistent with Articles 2.1, 3. 1, last sentence, 4.1(a), 4.2(a) and 4.2(c) of the Agreement on
Safeguards and with Article XIX:1(a) of the GATT 1994.
7.258 Of the four questions raised by the complain ants concerning the determination of serious
injury, two deal solely with the preliminary dete rmination (the first relates to the Commission not
having examined the productivity factor in the pre liminary determination of serious injury; the
second to the Commission not having provided a reasone d and adequate explana tion with regard to
the critical circumstances). Taking into account the observations made earlier in this report 359, in this
section the Panel will begin its analysis with the two remaining questions which relate to both the

356 United States, reply to Panel questions Nos. 1 and 18.
357 Panama, third party written submission, paragraphs 32-34.
358 European Union, reply to questions Nos. 1 and 18 from the Panel.
359 See paragraph 7.22 of the present Report.
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preliminary and the definitive determinations: (i ) whether the Commission found serious injury even
though the factors indicated the contrary or being inadequately assessed, thereby acting inconsistently
with Articles 4.1(a), 4.2(a), 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards; and
(ii) whether the Commission failed to carry out a disaggregated and complete analysis of the domestic
industry for the purposes of the serious injury determinations, acting inconsistently with
Articles 4.2(a), 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards.
(i) Whether the Commission concluded that there was serious injury even though the factors
indicated the contrary or were inadequately assessed
7.259 The relevant parts of Article 4 of the Agreement on Safeguards read as follows:
Determination of Serious Injury or Threat Thereof
1. For the purposes of this Agreement:
(a) "Serious injury" shall be understood to mean a significant overall impairment
in the position of a domestic industry;
…
(c) in determining injury or threat thereof, a "domestic industry" shall be
understood to mean the producers as a whole of the like or directly competitive
products operating 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.
2(a) In the investigation to determine whether increased imports have caused or
are threatening to cause serious injury to a domestic industry under the terms of this
Agreement, the competent authorities shall evaluate all relevant factors of an
objective and quantifiable nature having a bear ing on the situation of that industry, in
particular, the rate and the amount of the increase in imports of the product concerned
in absolute and relative terms, the share of the domestic market taken by increased
imports, changes in the level of sales, pr oduction, productivity, capacity utilization,
profits and losses, and employment.
…
2(c) The competent authorities shall publish promptly, in accordance with the
provisions of Article 3, a detailed analysis of the case under investigation, as well as a
demonstration of the relevance of the factors examined.
7.260 The Appellate Body has indicated that the objective evaluation that must be made by a panel
of a claim articulated under Article 4.2(a) of the Agreement on Safeguards consists, in principle, of
two elements (one formal and the other substantive). The formal aspect involves determining whether
the competent authority has evaluated all relevant factors contained in that provision. The substantive
aspect consists in establishing whether the compet ent authority has given a reasoned and adequate
explanation of the way in which the factors corroborate its determination.
360 The Panel has already

360 Appellate Body Report, US – Lamb, paragraph 103.
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indicated that it considers it appropriate to fo llow the standard of review laid down by the
Appellate Body.
361
7.261 In the present case, the complainants raised jointly, with respect to the provisional and
definitive determinations, a question which involv es the substantive aspect of the Panel's serious
injury evaluation and which relates to whether the Commission provided a reasoned and adequate
explanation of its determination when evaluating the factors mentioned in Article 4.2(a) of the
Agreement on Safeguards.362
7.262 The Panel will first examine whether the findings and conclusions of the Commission, with
respect to the factors to which Article 4.2(a) of the Agreement on Safeguards refers, are supported by
the evidence that the Commission had before it. In particular, it will examine the situation relating to
the factors in dispute: inventories, production, cash flow, share of domestic market taken by imports
and financial losses. Then, following the anal ysis suggested by the Appellate Body in Argentina –
Footwear (EC) , it will go on to examine whether the Commission concluded that there had been
serious injury on the basis of the indicators evaluated and taking into account the overall position of
the domestic industry.363
Findings of serious injury made by the Commission
7.263 In its Preliminary Resolution, the Commission established the following:
48. … [I]n accordance with the data cite d in the Preliminary Technical Report, it
can be seen that the domestic industry is in critical circumstances due to a 206 per
cent reduction in its financial performance. In value terms, stocks grew by 199 per
cent, while increasing by 169 per cent in volu me. Likewise, the industry's level of
production contracted sharply, which made it impossible to implement the company's
plans for expansion.
49. For the foregoing reasons and after havi ng evaluated the relevant factors, the
Commission was able to find that the increas e in imports of the product investigated
has caused serious injury to the domes tic industry because it suffered significant
financial losses during the period investigated , jeopardizing the sustainability of this
important domestic industry, so that an y delay would entail damage which it would
be difficult to repair.
364
7.264 From this passage, the Panel notes that the se rious injury factors on which the Commission
based its Preliminary Resolution , apart from increased imports, were as follows: (i) inventories;
(ii) production; and (iii) profits and losses. The Commission did not make reference in this
Resolution to the way in which it considered othe r factors mentioned in Article 4.2(a) of the
Agreement on Safeguards. In particular, the Prelimin ary Resolution is silent on the following factors:
(i) the share of the domestic market taken by increased imports; (ii) changes in the level of sales;
(iii) productivity; (iv) capacity utilization; and (v) employment.

361 See paragraphs 7.4 to 7.10 of the present Report.
362 As previously pointed out, the complainants also put forward an argument that would involve a
formal analysis of the serious injury factors menti oned in Article 4.2(a) of the Agreement on Safeguards
(relating to whether the Commission evaluated the productivity factor). This argument was deployed only with
respect to the provisional determination.
363 Appellate Body Report, Argentina – Footwear (EC), paragraphs 138-139.
364 Preliminary Resolution, Exhibit CEGH-5, paragraphs 48-49.
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7.265 The Preliminary Technical Report , which served as a basis for the findings of the
Commission, indicates that the DEI examined the following indicators: (i) production; (ii) installed
capacity; (iii) utilized capacity; (iv) sales; (v) em ployment; (vi) wages; (vii) level of exports;
(viii) cash flow; (ix) investment; (x) product pr ices; (xi) costs; (xii) profits or losses;
(xiii) inventories; (xiv) domestic market share taken by imports; and (xv) apparent consumption.
365
7.266 Among the factors listed, in its Preliminary Technical Report, the DEI recorded a positive
performance by the domestic industry during the period of investigation in: (i) sales; (ii) installed
and utilized capacity; (iii) employment and wages; (iv) export value; (v) prices of the like domestic
product; and (vi) investment. Moreover, according to the Preliminary Technical Report, the
Commission lacked information rela ting to the cash flow factor and did not examine the productivity
factor. Finally, the factors that the Commissi on found to have followed an adverse trend and on
which it based its determination of injury, apart fro m increased imports, are as follows: (i) costs;
(ii) profits and losses; (iii) inventories; and (iv) production.
366
7.267 At the same time, in the Definitive Resolution the Commission concluded that:
37. The performance of imports in rela tion to domestic production continued to
show an upward and sustained trend during th e period investigated. It is therefore
obvious that the increase in imports has caused injury to the domestic industry
inasmuch as it was verified that the incr ease in the value and volume of the imports
was the cause of a significant drop in the domestic industry's share of apparent
domestic consumption.
38. Moreover, as a result of the incr ease in imports of the product under
investigation, the firm suffered significant financial losses during the period
investigated, which can be seen from the increase in stocks, the reduced cash flow,
and the sharp contraction in its level of production.
…
41. When it visited FERSAN, the Commission was able to confirm that the
company had purchased new machinery as part of its adjustment plan, which was
helping to increase the installed capacity for manufacturing square-bottom and valve
bags, with a production capacity of twice the domestic demand. Moreover, FERSAN
had added a third work shift.
367
7.268 From the this passage, the Panel concludes th at the serious injury factors on which the
Commission based its Definitive Resolution , apart from increased imports, were as follows: (i) the
share of the domestic market taken by imports; (ii) profits and losses; (iii) inventories; (iv) cash
flow; and (v) production. In its Definitive Reso lution the Commission gave no indication of how it
treated other factors mentioned in Article 4.2(a) of the Agreement on Safeguards. In particular, the
Definitive Resolution is silent on the following f actors: (i) changes in the level of sales;
(ii) productivity; and (iii) employment.

365 See Preliminary Technical Report, Exhibit CEGH-7, pages 77-84.
366 Ibid.
367 Definitive Resolution, Exhibit CEGH-9, paragraphs 37-38 and 41.
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7.269 In its Final Technical Report , the DEI examined the following indicators: (i) production;
(ii) installed capacity; (iii) utilized capacity; (iv) productivity; (v) sales; (vi) employment;
(vii) wages; (viii) level of exports; (ix) cash flow; (x) investment; (xi) product prices; (xii) costs;
(xiii) profits and losses; (xiv) inventories; (xv) domestic market share taken by imports; and
(xvi) apparent consumption.
368
7.270 Out of the factors mentioned, in its Final Technical Report the DEI noted a positive trend
during the period of investigation in: (i) installed a nd utilized capacity; (ii) productivity; (iii) sales;
(iv) employment and wages; (v) exports; (vi) investment; and (vii) prices of the like domestic
product. Finally, the factors that the Commission found to have followed an adverse trend and on
which it based its determination of injury, ap art from increased imports, were as follows:
(i) production; (ii) cash flow; (iii) costs; (iv) pr ofits and losses; (v) inventories; and (vi) domestic
market share taken by imports.369
7.271 The complainants claim that, in the prelimin ary and definitive Resolutions, the Commission
concluded that there had been serious injury, despite the fact that the indicators examined (production,
cash flow, costs, profits and losses, inventories, and share of apparent domestic consumption)
indicated the opposite or were inadequately evaluated. The Dominican Republic disagrees and asserts
that, in examining the injury indicators, in both the preliminary and the definitive Resolutions, the
competent authority made an evaluation of the overall picture of the domestic industry.
7.272 Below, the Panel will examine the Commission's eval uation of the factors in dispute. It will
then examine the Commission's assessment of the overall position of the domestic industry.
Analysis of serious injury factors under Article 4.2(a) of the Agreement on Safeguards
Production
7.273 The complainants point out that, in the Prel iminary and Final Technical Reports, the DEI
established that production had increa sed steadily and uninterruptedly 370 and that, nevertheless, in
contradiction of this, in its preliminary and definitive Resolutions the Commission concluded that
production had contracted. 371 For its part, the Dominican Republic admits that in absolute terms
production increased (both in volume and in value); however, it points out that the value decreased
when compared with the volume.372
7.274 As already mentioned, in the preliminary and definitive Resolutions the Commission
concluded that the industry's level of production ha d suffered sharp contractions, which had made it
impossible for FERSAN to implement its plans for expansion.373
7.275 However, with respect to this factor, the DEI indicated, in its preliminary as well as in its
Final Technical Report, that the volume of pro duction had increased by 25 per cent between 2006 and
2007, by 31 per cent between 2007 and 2008, and by 17 per cent between 2008 and 2009. The total

368 See Final Technical Report, Exhibit CEGH-10, pages 72-85.
369 Ibid.
370 The complainants mention that this finding concerning the trend in production is reflected in
Table 20 of the Preliminary Technical Report (p. 78). Complainants, first written submission, paragraph 334.
371 Complainants, first written submission, paragraph 337.
372 Dominican Republic, first written submission, paragraphs 392-393.
373 Preliminary Resolution, Exhibit CEGH-5, paragr aph 48; Definitive Resolution, Exhibit CEGH-9,
paragraph 38. See paragraphs 7.263 and 7.267 of the present Report.
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increase in production by volume over the period 2006 to 2009 was 91 per cent. With respect to the
value of production, the DEI indicated that it ha d increased by 4 per cent between 2006 and 2007, by
41 per cent between 2007 and 2008, and by 11 per cent between 2008 and 2009. The total increase in
production by value over the period 2006 to 2009 was 63 per cent.
374 The DEI reflected this in the
following table:
Table 20. Volume and value of the production of the domestic manufacturer of
polypropylene bags and tubular fabric375

No. Indicator Rate of increase, % Cumulative
increase
 2007/ 2006 2008/ 2007 2009/ 2008 2009/ 2006
1 Production by volume (kg) 25% 31% 17% 91%
2 Production by value (DR$) 4% 41% 11% 63%
3 Installed capacity 58% 0% 0% 58%

7.276 On the basis of the information that can be extracted from the Preliminary and Final
Technical Reports, and as distinct from what is reflected in the conclusions of the Commission,
domestic production of the directly competitive produc t increased steadily in percentage terms, both
in value and in volume. From the table itself in th e Final Technical Report, it follows that, in volume,
domestic production recorded a cumulative increase of 91 per cent while, in terms of value, it
increased by 63 per cent, over the period of investigation.
7.277 At the same time, the explanation that the Dominican Republic provided in the proceedings
before the Panel, namely, that production increased more in terms of volume than of value, is not to
be found either in the resolutions of the Commission or in the technical reports of the DEI and, in any
event, does not alter the fact that the domest ic industry performed well during the period of
investigation.
7.278 Therefore, the Panel finds that, with respect to the production factor, the complainants have
demonstrated that the Commission did not provide, either in its preliminary or in its definitive
determination, a reasoned and ade quate explanation of the performance of that factor during the
period of investigation and its relationship with the finding on serious injury.
Inventories
7.279 The complainants claim that in the Prelimin ary and Final Technical Reports the Commission
confined itself to establishing inventory levels at th e beginning and end of the period of investigation,
but failed to explain the nature of the trend over th e course of the period. In addition, they question
how inventories could have increased when produc tion and sales were increasing and suggest that the
explanation of the increase could be that the invent ories included other products that did not form part
of the investigation.
376 For its part, the Dominican Republic asserts that the total level of inventories
increased during the period of investigation becau se, although sales increased more rapidly than
production in percentage terms, they grew less in absolute terms as they began from a lower base and

374 Preliminary Technical Report, Exhibit CEGH-7, p.77; Final Technical Report, Exhibit CEGH-10,
page 73.
375 Preliminary Technical Report, Exhibit CEGH-7, page 78; Final Technical Report, Exhibit
CEGH-10, page 74.
376 Complainants, first written submission, paragraphs 340-342; reply to questions Nos. 139-140 from
the Panel.
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therefore inventories continued to increase. Likewise, it points out that although the DEI did not
provide figures for inventories year by year, these fi gures are contained in the financial statements of
the Bags Division, which formed the basis for the Commission's determinations.
377
7.280 With respect to this factor, the Commission not ed in the Preliminary Resolution that, during
the period of investigation, inventories increas ed by 169 per cent in volume and 199 per cent in
value.378 In the Definitive Resolution it was men tioned only that inventories had increased. 379 In the
Preliminary and Final Technical Reports, the DEI sa id exactly the same as the Commission in the
Preliminary Resolution.380 Neither the Commission nor the DEI provided any additional explanation
concerning the evaluation of this factor.
7.281 Article 4.2(a) of the Agreement on Safeguards does not require any particular method to be
followed for examining each factor. For its part, Ar ticle 4.2(c) requires the competent authorities to
publish a detailed analysis of the case under investig ation as well as a demonstration of the relevance
of the factors examined. Furthermore, Article 3. 1, last sentence, of the Agreement on Safeguards
stipulates that the report published by the author ities must set forth thei r findings and reasoned
conclusions on all pertinent issues of fact and la w. What these provisions require is that the
competent authorities evaluate all relevant factors of an objective and quantifiable nature and set forth
findings and reasoned conclusions.
7.282 In the present case, as the complainants point out, the Commission only provided information
on the trend in inventories with respect to the end points of the period of investigation (that is, the
beginning and end), without offering any reasoned additional explanation of how this information tied
in with its conclusion. From the information provided by the Commission there is no way of telling
how this factor behaved during the period of inves tigation. The Panel therefore considers that the
explanation provided by the Commission concerning the performance of inventories is neither
adequate nor reasoned.
7.283 Moreover, with regard to the Dominican Republic's assertion that the information
corresponding to this factor can be derived from th e financial statements of the Bags Division, the
Panel considers that it is not enough to cite the evidence that the competent authority had at its
disposal in order adequately to explain this trend, since it is not the task of the Panel to carry out a
de novo examination based on evidence provided by the parties in the internal procedure.
7.284 Therefore, the Panel finds that, with respect to the inventories factor, the complainants have
demonstrated that the Commission did not provide, either in its preliminary or in its definitive
determination, a reasoned and ade quate explanation of the performance of this factor during the
period of investigation and its relationship with the finding on serious injury.
Financial losses
7.285 According to the complainants, the technical reports indicate that the competent authorities
evaluated profits and losses as they related to the company FERSAN. In view of the fact that

377 Dominican Republic, first written submission, paragraphs 394 and 396; reply to question No. 141
from the Panel.
378 Preliminary Resolution, Exhibit CEGH-5, page 48.
379 Definitive Resolution, Exhibit CEGH-9, page 38.
380 Preliminary Technical Report, Exhibit CEGH-7, page 82; Final Technical Report, Exhibit
CEGH-10, page 82.
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FERSAN also makes other products and engages in e xport activities, the complainants consider that
the financial losses at company level do not automati cally explain the losses of the domestic industry
as defined by the Commission. Moreover, they cons ider that the Commission also failed to explain
whether or not the pre-tax profit and loss calcula tion included depreciation costs, as well as indirect
costs.
381 For its part, the Dominican Republic points out that the information on financial losses could
not be ascribed to other products or activities carried out by other divisions of the FERSAN company,
since the analysis was conducted on the basis of financial information for the Bags Division.
Moreover, the Dominican Republic considers that the complainants, in suggesting that the
depreciation costs and indirect costs should not have been included in the cost of production, seek to
ignore the basic principles of accountancy applicable to the calculation of pre-tax profits and losses in
corporate financial statements.
382
7.286 With respect to the profit and loss factor, th e Commission noted, in both its preliminary and
definitive Resolutions, that the domestic industry's fi nancial result had declined by 206 per cent and
that serious injury had been caused to the industr y, since it had suffered significant financial losses
during the period of investigation. 383 In the Definitive Resolution, the Commission added that "the
company had significant financial losses during the period investigated, as ev idenced by the increase
in inventories, the decrease in cash flow, and the sharp contractions in its level of production".384
7.287 For its part, in its technical reports, the DEI indicated that from 2006 to 2007 the company
recorded a decrease in the pre-ta x result for the period of 116 per cent. For the period from 2007 to
2008, pre-tax losses increased by 296 per cent, and in the period from 2008 to 2009 pre-tax losses
increased by 27 per cent. The DEI suggests that this situation appears to have been influenced by a
significant increase in sales costs. Moreover, during the period of investigation the company
increased the amount of its medium and long-term debt by 825 per cent, for the purpose of buying
more modern machinery and improving its productive efficiency. Therefore, overall, during the
period examined pre-tax profits fell by 206 per cent.385
7.288 With respect to the evaluation of this fact or, the Panel considers that, inasmuch as the
Commission provided the Bag Division's percentage increases in pre-tax losses and debts for each
year of the period of investigation, as well as over the complete period of investigation, the
complainants have failed to make the case that it di d not give a reasoned and adequate explanation of
the performance of the factor in question.
7.289 With regard to the complainants' argument con cerning the inclusion of other products that did
not form part of the investigation in the anal ysis of injury, the Panel notes that the Commission
conducted its analysis of injury by considering the Bags Division, the specific division used by
FERSAN to manufacture the directly competitive products. The Bags Division produces other
products, in addition to polypropylene bags. The Dominican Republic has stated that the directly
competitive product accounts for more than 85 per cent of the Bags Division's total output. The
complainants have not submitted any evidence capab le of invalidating this assertion, as a matter of
fact. Therefore, the Panel considers that the complain ants have failed to show that in this respect the

381 Complainants, first written submission, paragraphs 348-349 and 351-352.
382 Dominican Republic, first written submission, paragraphs 400-401; second written submission,
paragraph 103.
383 Preliminary Resolution, Exhibit CEGH-5, paragraphs 48-49.
384 Definitive Resolution, Exhibit CEGH-9, paragraph 38.
385 Preliminary Technical Report, Exhibit CEGH-7, pages 81-82; Final Technical Report,
Exhibit CEGH-10, page 81.
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analysis of injury conducted by the Commission was not based on information that made it possible to
present a reliable and representative overview of th e domestic industry. This argument will be
examined in more detail later in this section.
386
7.290 Moreover, with regard to the consideration of indirect costs and depreciation in the evaluation
of the production costs, the Panel considers that the complainants have failed to show that the
Commission acted in a manner contrary to its oblig ations under Article 4.2(a) of the Agreement on
Safeguards, since these factors also have a bearing on the situation of the domestic industry. As
observed by the panel in United States – Line Pipe, in a finding that was not appealed:
If a competent authority were only to take into account costs incurred specifically in
respect of the product under investigation, it would not comply with the Article 4.2(a)
[of the Agreement on Safeguards] requirement to evaluate all relevant factors "having
a bearing on the situation of" the relevant domestic industry.387
7.291 Therefore, the Panel finds that, with respect to the profit and loss factor, the complainants
have not made the case that the Commission failed to provide, in its preliminary and definitive
determinations, a reasoned a nd adequate explanation of the performan ce of this factor in relation to
the finding on serious injury.
Share of imports and production in apparent domestic consumption
7.292 With respect to this factor, the complainants argue that the Commission's conclusion, namely,
that imports took an increasing share of apparent domestic consumption (ADC) during the period of
investigation while the domestic industry's share decreased, contradicts the DEI's own findings in the
Final Technical Report 388, since as Table 21 "Apparent Consumption" itself shows, whereas from
2007 the domestic product tended steadily and uninte rruptedly to increase its share of the market,
imports displayed the opposite trend.389 For its part, the Dominican Republic denies this and says that
this indicator should be analysed within its contex t, namely, that of a sector which made significant
investments between 2006 and 2009 and which, although it managed to double its sales and
production volumes, did so at the cost of sacrif icing income from sales. Moreover, it took the
domestic industry until 2009 to win back a share of th e market greater than that which it had achieved
in 2006.390
7.293 With respect to this factor, in the Defin itive Resolution the Commission concluded that
relative to domestic production imports had mainta ined a steadily increasing trend within the period
of investigation. It also indicated that the in crease in imports had caused injury to the domestic
industry, insofar as it had been found that the incr ease in the value and volume of imports had caused
the industry to lose a significant proportion of its share of ADC.391
7.294 For its part, in its Preliminary and Final Te chnical Reports, the DEI noted that ADC was
3,145,919 kg of the relevant product in 2006, 4,614,240 kg in 2007, 5,283,539 kg in 2008, and
5,071,361 kg in 2009. On the basis of this info rmation, the DEI estimated rates of increase of 47 per

386 See paragraph 7.325 of the present Report.
387 Panel Report, US – Line Pipe, paragraph 7.227.
388 Complainants, first written submission, paragraph 366.
389 Complainants, first written submission, paragraphs 362-364.
390 Dominican Republic, first written submission, paragraph 405.
391 Definitive Resolution, Exhibit CEGH-9, paragraph 37.
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cent for the period from 2006 to 2007, 15 per cent for the period from 2007 to 2008 and -4 per cent
for the period from 2008 to 2009.
392 Furthermore, it calculated th at the domestic production intended
for the home market represented 39 per cent of ADC in 2006, 33 per cent in 2007, 36 per cent in 2008
and 43 per cent in 2009. At the same time, the DEI estimated that imports, as a percentage of ADC,
had a 61 per cent share in 2006, a 67 per cent share in 2007, a 64 per cent share in 2008, and a 57 per
cent share in 2009.
393
7.295 The DEI presented the information on this indicat or in Table 21 "Apparent consumption" of
its Preliminary and Final Technical Reports394, the relevant data from which are reproduced below:
Variables Share, % (volume)
2006 2007 2008 2009
Production for the home market/ADC 39% 33% 36% 43%
Imports investigated/ADC 61% 67% 64% 57%

7.296 On the basis of this information, the DE I concluded that the domestic production of
polypropylene bags and tubular fabric as a percenta ge of ADC had constantly decreased, falling from
39 per cent in 2006 to 36 per cent in 2008, while th e share of imports as a percentage of ADC had
increased. Concerning the 2009 increas e in the domestic industry's share and the decrease in that of
imports, the DEI suggested that this phenomenon w as a question of a cause-and-effect relationship
basically due to the general trend in total imports into the Dominican Republic.395
7.297 After analysing the information provided by the DEI, the Panel notes that the domestic
industry's share of ADC fell only in 2007 (relative to 2006), while from that year onwards it increased
steadily, even exceeding in 2009 the level it had reached in 2006. Correspondingly, the share of ADC
taken by imports increased only in 2007 with r espect to the level reached in 2006. From 2007
onwards, however, the share of ADC taken by imports fell steadily and in 2009 reached a level lower
than its initial level in 2006.
7.298 Thus, the Panel observes that there is no support for the conclusion reached by the
Commission with respect to this indicator in the De finitive Resolution if the period of investigation is
considered and that the information provided in th e DEI's Final Technical Report indicates that the
trend in this indicator was favourable for the domest ic industry. Domestic production's market share
improved during the period of investigation, while that of imports declined.
7.299 The Panel therefore finds that, with respect to the share of ADC taken by imports and
production, respectively, the complainants have made the case that in its final determination the
Commission failed to provide a reasoned and adequate explanation of the performance of this factor
during the period of investigation and of its relationship with the finding on serious injury.

392 The Preliminary Technical Report refers to a growth rate of ADC of 41 per cent for the
period 2008/2009, a figure that is corrected in the Fi nal Technical Report. Preliminary Technical Report,
Exhibit CEGH-7, page 82; Final Technical Report, Exhibit CEGH_10, page 82.
393 Preliminary Technical Report, Exhibit CEGH-7, pages 82-83; Final Technical Report,
Exhibit CEGH-10, pages 82-83.
394 Preliminary Technical Report, Exhibit CEGH-7, page 83; Final Technical Report, Exhibit
CEGH-10, page 83.
395 See Final Technical Report, Exhibit CEGH-10, page 85.
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Cash flow
7.300 With respect to cash flow, the complainants assert that in the Final Technical Report the
Commission noted that there had been a cumulative reduction in this factor during the period of
investigation, but failed to show its trend or development during that period. Moreover, they point out
that the Commission selectively considered specific in tervals of time that did not coincide with the
period of investigation
396 to demonstrate that there had been significant falls, thereby precluding a
complete and reliable assessment of the factor in ques tion. In addition, they argue that the cash flow
was evaluated at company level, without separa ting out the information corresponding to other
products that did not form part of the investigation. 397 For its part, the Dominican Republic notes that
an analysis was carried out both for separate 12-m onth periods and for the whole of the period from
2006 to 2009 and for this reason c onsiders that the trends during the period were analysed. It also
notes that the cash flow analysis was carried out on the basis of the financial statements for the
Bags Division and not for the entire company, as claimed by the complainants.398
7.301 In its Definitive Resolution, the Commission concluded that, "as a consequence of the imports
of the product under investigation, the compan y [FERSAN] suffered significant financial losses
during the period investigated, as evidenced by the increase in inventories and decrease in cash flow ,
as well as by sharp contractions in its level of production".399
7.302 Furthermore, from the Preliminary Technical Report it appears that the DEI was not able to
analyse this indicator until the final stage of th e investigation, when FERSAN supplied the cash flow
statements for the period from 2006 to 2009. At the same time, from the Final Technical Report it
appears that the information that FERSAN submitt ed embraced the period between July 2006 and
June 2009. On the basis of this information, the DE I reported the data by annu al periods that covered
July to June of each year. According to the DEI, the net cash available or used for operating activities
showed a cumulative reduction for the period of 578 per cent.400 In addition, the DEI pointed out that,
for the period from July 2007 to June 2008, as compared with the period from July 2008 to June 2009,
the net cash for the company's operating activities d ecreased by 121 per cent, continuing the negative
trend for the period from July 2006 to June 2007, as compared with the period from July 2007 to
June 2008, when the net cash for the company's operating activities decreased by 457 per cent.
401
7.303 The most appropriate procedure would have been for the Commission to have carried out its
cash flow analysis by taking into account periods of time that coincided precisely with the annual
intervals of the period of investigation. However, the Panel recognizes that in some circumstances it
can be difficult for national authorities to obtain information from the interested parties in a form that
coincides with this time-frame. Although it was not ideal for the information on cash flow to have left
out the periods from January to June 2006 and from July to December 2009, this of itself does not
mean that the Commission's evaluation was inadequa te, since the Commission at least had before it

396 According to the complainants, the intervals that the Commission considered were: (i) June 2006 to
July 2007; (ii) July 2007 to June 2008; and (iii) Ju ly 2008 to June 2009. As the period of investigation ran
from January 2006 to December 2009, the periods that were not considered in the analysis of this factor were:
(i) January to May 2006; and (ii) July to December 2009.
397 Complainants, first written submission, paragraphs 355-358.
398 Dominican Republic, first written submission, paragraphs 403-404. The Dominican Republic
asserts that this follows clearly from Section 8.B of the Final Technical Report, entitled "Analysis of the
relevant domestic industry economic and financial indicators".
399 Definitive Resolution, Exhibit CEGH-9, paragraph 38 (italics added).
400 Final Technical Report, Exhibit CEGH-10, page 76.
401 Final Technical Report, Exhibit CEGH-10, pages 76-77.
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information on the trend in this factor correspondi ng to annual periods and explained how the factor
had evolved over the time periods with respect to wh ich it did have information. The complainants
have not explained how this aspect would have r esulted in an inadequate determination of the
behaviour of cash flow during the period of investig ation. Therefore, the Panel concludes that the
complainants have not succeeded in demonstrating that the Commission failed to provide, in its
definitive determination, a reasoned and adequate explanation of the performance of cash flow in
relation to the finding on serious injury.
402
Overall position of the domestic industry in the preliminary and final determinations
7.304 According to Article 4.1(a) of the Agreement on Safeguards, serious injury is to be taken to
mean a significant overall impairment in the position of a domestic industry. The Appellate Body has
stated that it is "only when the overall position of the domestic industry is evaluated, in light of all the
relevant factors having a bearing on a situation of that industry, that it can be determined whether
there is 'a significant overall impairment' in the position of that industry".403
7.305 To evaluate the overall position of the domestic industry, the Panel considers it necessary to
analyse the findings of the Commission on all the relevant factors (including the factors in dispute and
the other factors analysed), as well as the findings a nd conclusions contained in the technical reports
of the DEI on which the resolutions are based. On th e basis of this information, it will be able to
examine whether the competent aut hority gave a reasoned and adequate explanation of the existence
of significant overall impairment of the position of the domestic industry, sufficient to demonstrate
the existence of serious injury.
7.306 As previously mentioned, in the Preliminary Resolution the Commission analysed four injury
factors
404 and in the Definitive Resolution six injury factors 405, without referring in either of these
resolutions to other factors mentioned in Article 4.2(a) of the Agreement on Safeguards. In the
Preliminary Resolution, the Commission made no reference to the performance of the following
factors: (i) share of the domestic market taken by increased imports; (ii) changes in the level of sales;
(iii) productivity; (iv) capacity utilization; a nd (v) employment. Likewise, in the Definitive
Resolution, the Commission said nothing about the pe rformance of the following factors: (i) changes
in the level of sales; (ii) productivity; (iii) capacity utilization; and (iv) employment.
7.307 At the same time, the Preliminary Resolution, on the basis of the factors to which the
Commission did make reference, found that the domestic industry was in critical circumstances and,
after the relevant factors had been evaluated, it wa s determined that the increase in imports of the
product under investigation had caused serious inju ry to the domestic industry (inasmuch as during
the period of investigation it had suffered significant losses that had jeopardized its sustainability), so

402 In paragraph 38 of the Definitive Resolution, th e Commission noted that the decrease in cash flow
was part of the evidence for a causa l link between the increase in imports and FERSAN's financial losses. The
Panel wishes to point out that its finding with respect to the cash flow determination in this section only
involves the relationship between this factor and the serious injury determination and does not extend to the
alleged causality mentioned by the Commission. The causal link is analysed later in this report. See section
VII.D.5 of the present Report.
403 Appellate Body Report, Argentina – Footwear (EC), paragraph 139 (original italics).
404 The factors which the Commission expressly cons idered in the Preliminary Resolution are:
(i) increase in imports; (ii) stocks; (iii) production; and (iv) profits and losses.
405 The factors that the Commission expressly consider ed in the Definitive Resolution are: (i) increase
in imports; (ii) stocks; (iii) produc tion; (iv) profits and losses; (v) domestic industry's share of domestic
apparent consumption; and (vi) cash flow.
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that any delay would involve damage which it would be difficult to repair.
406 In the case of the
Definitive Resolution, on the basis of the six factors considered, the Commission found that the
increase in imports had caused the domestic industr y to lose a significant proportion of its share of
ADC, thereby doing it serious injury. Moreover, it i ndicated that, as a consequence of the increase in
imports of the product under investigation, the company had suffered significant financial losses
during the period of investigation, as evidenced by an increase in inventories, a decrease in cash flow
and sharp contractions in its level of production.407
7.308 In addition, in the Definitive Resolution, the Commission noted that FERSAN had purchased
new machinery as part of its adjustment plan, whic h had helped to increase the installed capacity for
manufacturing square-bottom and va lve bags, with a production capacity equal to twice the domestic
demand, and that the company had added a third work shift.408
7.309 On the other hand, the Panel f ound that, in both the prelimin ary and the final phase of the
investigation, the DEI recorded that the following factors had performed favourably during the period
of investigation: (i) sales; (ii) installed capacity and capacity utilization; (iii) employment and
wages; (iv) value of exports; (v) prices of the like domestic product; and (vi) investment.
409 I n
addition, in the Final Technical Report, the DEI noted that the productivity factor had also performed
favourably.
410 It should be pointed out that in the preliminary and definitive Resolutions the
Commission did not provide any explanation of the c onsideration that it gave to these factors in its
serious injury determination.
7.310 Furthermore, among the factors found by the Commission to have performed negatively
during the period of investigation (production, cash flow, costs, profits and losses, inventories and
production's share of apparent domestic consump tion), the Panel has already found that the
Commission's determinations relating to production, and share of imports a nd production in apparent
inventories domestic consumption are not based on a reasoned and adequate explanation.411
7.311 When the above is taken into account, the Commission's considerations in the preliminary and
final determinations do not appear to be duly supported by the facts nor by an adequate evaluation of
the relevant factors. Firstly, the level of domest ic production and its shar e of apparent domestic
consumption performed favourably within the period of investigation. Secondly, the Commission's
inventory evaluation is inadequate for the reas ons already given. Thirdly, according to the
information provided by the DEI, the performance of the factors corresponding to sales, installed
capacity and capacity utilization, productivity, employ ment and wages, value of exports, prices of the
like domestic product and investment was positive. Fourthly, the Commission also found that
FERSAN had purchased new machinery for manufacturing bags with different characteristics, with a
capacity equal to twice the domestic demand, and ha d added a third work shif t within the company,
which represented a favourable aspect for the domes tic industry. Fifthly, the only factors actually

406 Preliminary Resolution, Exhibit CEGH-5, paragraphs 48-49.
407 Definitive Resolution, Exhibit CEGH-9, paragraphs 37-38
408 Definitive Resolution, Exhibit CEGH-9, paragraph 41.
409 See Preliminary Technical Report, Exhibit CEGH-7, pages 77-81; Final Technical Report,
Exhibit CEGH-10, pages 73-85.
410 See Final Technical Report, Exhibit CEGH-10, p.74.
411 See paragraphs 7.278, 7.284 and 7.299 of the present Report.
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shown to have performed unfavourably during the period of investigation are: (i) cash flow;
(ii) costs; (iii) profits and losses; and (iv) inventories.
412
7.312 The Panel recalls that, as pointed out by the Appe llate Body, the standard for the existence of
serious injury under the definition contained in Article 4.1( a) of the Agreement on Safeguards is very
strict and rigorous: "the word 'injury' is qualifie d by the adjective 'serious', which … underscores the
extent and degree of 'significant overall impairment' that the domestic industry must be suffering, or
must be about to suffer, for the standard to be met".413
7.313 Considering that the injury evaluated within the context of the Agreement on Safeguards is
serious injury, the Panel does not believe that the fact that four factors evaluated displayed a negative
trend, as compared with the eviden ce that seven factors (including important elements indicative of
the position of the domestic industry, such as pr oduction, sales, installed capacity and capacity
utilization, and production's shar e of domestic consumption) pe rformed positively, without the
competent authority having provided a sufficient e xplanation, can result in an adequate and reasoned
conclusion with respect to the existence of serious injury.
Conclusions
7.314 For the reasons set out above, the Panel finds th at the complainants have made the case that
the indicators of serious injury mentioned in Ar ticle 4.2(a) of the Agreement on Safeguards were
inadequately evaluated and that the explanati ons provided by the competent authority in the
preliminary and final determina tions do not support the conclusion that the overall position of the
domestic industry indicated significant overall impairment . Consequently, the complainants have
made the case that in its preliminary and final determinations the Commission failed to provide a
reasoned and adequate explanation of the determination of the existence of serious injury.
7.315 The Panel therefore concludes that the complainants have made the case that, in its findings in
the preliminary and final determinations on the ex istence of serious injury, the Dominican Republic
acted inconsistently with its obligations under Articles 3.1, last sentence, 4.1(a), 4.2(a) and 4.2(c) of
the Agreement on Safeguards. In imposing a safeguard measure on the basis of a determination of the
existence of serious injury that is inconsistent with Article 4.1(a) of the Agreement on Safeguards, the
Dominican Republic also acted inconsistently with its obligations under Article 2.1 of the Agreement
on Safeguards and Article XIX:1(a) of the GATT 1994.
(ii) Whether the Commission failed to carry out a disaggregated and complete analysis of the
domestic industry
7.316 Having concluded in the previous section that in its preliminary and final determinations the
Commission failed to provide a reasoned and adequa te explanation of the preliminary and final
determinations of serious injury, there should, in principle, be no need to examine whether the

412 The Panel notes that the Commission found an increase in imports of the product under
investigation in absolute and relative terms. In the co rresponding section of the present Report, the Panel found
that the complainants had failed to demonstrate that the determination concerning increased imports was
inconsistent with obligations under the covered agreements. In any case, the Commission did not make a
separate analysis of this factor in its preliminary and final determinations of the existence of serious injury.
413 Likewise, the Appellate Body has indicated that the standard of serious injury in the Agreement on
Safeguards is a very high one when contrasted with the standard of material injury envisaged under the
Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures and the GATT 1994. See
Appellate Body, US – Lamb, paragraph 124.
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Commission failed to carry out a disaggregated and co mplete analysis of the domestic industry for the
purposes of the injury analysis and whether th at failure resulted in the Commission acting
inconsistently with Articles 4.1(a), 4.2(a), 3.1, last sentence, and 4.2(c) of the Agreement on
Safeguards.
7.317 However, with a view to placing on record a factual analysis of the question raised by the
complainants, the Panel will analyse whether, as a matter of fact: (i) the Commission failed to
consider the production of tubular fabric for the commercial market and therefore carried out an
incomplete analysis of the domestic industry; a nd (ii) the Commission failed to make an adequate
analysis of the domestic industry by considering in its analysis products different from the like or
directly competitive product, as well as exports of the product in question.
Whether the Commission made an incomplete analysis of the domestic industry
7.318 The complainants point out that, in the determinations made by the competent authority,
"there was no indication of disaggregated info rmation being available for the segment producing
tubular fabric and the segment producing polypropyle ne bags, 'assumed to be a single product'".
Moreover, "neither was there any indication of the availability of information concerning the
production of tubular fabric not 'assumed' to be included in finished bag production. That is …
concerning the production of tubular fabric intende d for the commercial market". Therefore, the
complainants consider that in basing itself on the aggregated information of the Bags Division, the
Commission failed to consider the information relating to the commercial market for tubular fabric.414
7.319 The Panel notes that in its preliminary and de finitive Resolutions the Commission concluded
that there had been serious injury to the domest ic industry, meaning the company FERSAN, in its
capacity of producer of tubular fabric and polypro pylene bags. In the Initial Technical Report, the
DEI stated: "It should be pointed out that in submitting information re lating to the production
volumes of the product under investigation the appl icant company assumed it to be a single product,
that is, the finished bag". 415 Moreover, in its Initial Resolution the Commission indicated that the
trends in polypropylene bags and tubular fabric would be examined in conjunction.416
7.320 At the same time, the Initial, Preliminary and Final Technical Reports indicate that, for the
purposes of analysis of the serious injury factors, the DEI took into account the financial statements of
the company FERSAN relating specifically to the Bags Division, the division which produces the
two relevant products, for the years 2006-2009. 417 From the analysis of the financial statements
submitted by the Dominican Republic 418 the Panel notes that the Bags Division "has as its main
objective the production and sale of polypropylene fabric bags, mesh bags, cordage and ropes,
intended for both the local market and the international market".419
7.321 With regard to these financial statements, the Dominican Republic explained before the Panel
that the Bags Division produces both tubular fabric and polypropylene bags and that the financial

414 According to the complainants, it is a fact that th e company FERSAN reserves part of its output for
the commercial market given that the DEI found that FERSAN sells part of the tubular fabric on the commercial
market, for example, to the company FIDECA. Complainants, first written submission, paragraphs 301-302.
415 Initial Technical Report, Exhibit CEGH- 3, page 14.
416 Initial Resolution, Exhibit CEGH-2, page 5.
417 Initial Technical Report, Exhibit CEGH-3, page 22; Preliminary Technical Report, Exhibit
CEGH-7, page 77; Final Technical Report, Exhibit CEGH-10, pages 72-73.
418 Exhibits RDO-13, RDO-14 and RDO-15.
419 Exhibits RDO-13, page 000165; RDO-14, page 000128; and RDO-15, page 000178.
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statements it submitted contain information about both products, including financial information
corresponding to the portion of tubular fabric dest ined for the commercial market. Moreover, it
argued that "[t]o the extent that the bags and the t ubular fabric are produced by the same division, all
the data on production, inventories and sales prep ared for this division necessarily include the
production, sales and inventories relating to both products".
420
7.322 On the basis of the above information, the Panel notes that, in actual fact, the Commission did
not provide in its published report separate info rmation on tubular fabric , on the one hand, and
polypropylene bags, on the other. On the other hand, the complainants have failed to demonstrate, as
a matter of fact, that the financial statements corresponding to the Bags Division, which produces both
tubular fabric and polypropylene ba gs, did not include information on tubular fabric intended for the
commercial market.
Whether the Commission included in its analysis products different from the like or directly
competitive product and exports

7.323 In relation to the above, the complainants point out, in reply to the arguments put forward by
the Dominican Republic in its own defence, that the Bags Division's information also includes the
manufacture of products which are not the like or di rectly competitive product and, moreover, that
this information includes sales for the international market of the like or directly competitive product
(that is, exports).421
7.324 It is not disputed that, in addition to polypropylene bags, the Bags Division produces other
products that did not form part of the investig ation and that information corresponding to these
products was considered in the serious injury anal ysis, since this information was not excluded from
the financial information that formed the basi s of the competent authority's serious injury
determination. The Dominican Republic, however, points out that these other products constitute
only a minor part of the Bags Division's total output, since the directly competitive product's share of
the division's total output amounted to more than 85 per cent during the period.
422
7.325 As already indicated, the Commission conducte d its injury analysis by considering the
specific division of the company that produces the di rectly competitive products. In addition, the
Panel notes that, according to the Dominican Republic , the directly competitive product's share of the
Bags Division's total output amounts to more than 85 per cent. The complainants have not produced
any evidence capable of invalidating this assertion, as a matter of fact.423
7.326 The complainants have argued that the Commiss ion based itself on data that embraced more
products than the directly competitive product, as we ll as on information that included exports of that
product, and that the arguments of the Dominican Republic constitute ex post explanations. 424
Irrespective of whether, in the present case, the comp etent authority may have based its determination

420 Dominican Republic, first written submission, paragraph 359.
421 Complainants, opening statement at the first meeting of the Panel, paragraphs 86-88.
422 Moreover, the Dominican Republic affirms that, by virtue of Article 4.2(a) of the Agreement on
Safeguards and Article 3.6 of the Anti-Dumping Agreemen t, it was possible to use the information supplied by
the Bags Division, which is responsible for the production of the more restricted group of products that includes
the like product. At the same time, the Dominican Republic points out that there is no obligation to limit the
analysis solely to the production intended for the domestic market, by excluding the fraction of the like product
that was exported. Dominican Republic, second written submission, paragraphs 98-100.
423 See paragraph 7.289 of the present Report.
424 Complainants, opening statement at the second meeting of the Panel, paragraphs 52-53.
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on information concerning a group of products broader than the directly competitive product itself, the
complainants have not explained how the method followed by the Commission and, in particular, the
group of products that the Commission considered for the purposes of its analysis could have resulted
in an inadequate explanation of the trend in th e domestic industry indicators during the period of
investigation. Nor have the complainants expl ained how the fact that the Commission may have
included in its analysis information relating to e xports of the like or directly competitive product
could have affected the outcome of the analysis carried out by the Commission and resulted in an
inadequate explanation of the trend in the domestic industry indicators during the period of
investigation.
5. Whether the competent authority acted inconsistently with obligations under the
covered agreements as regards the determinat ion of a causal link between the increase
in imports and the serious injury
7.327 In the previous section of this Report, the Panel concluded that, in its finding of serious injury
in both the preliminary and the final determinati ons, the Dominican Republic acted inconsistently
with its obligations under Articles 2.1, 3.1, last sentence, 4.1(a), 4.2(a) and 4.2(c) of the Agreement on
Safeguards and Article XIX:1(a) of the GATT 1994.
7.328 Having reached these conclusions with regard to the Dominican Republic's assessment
relating to the determinations of serious injury, it w ould not be possible for the Panel to find that the
competent authority had demonstrated the existen ce of a causal link between the increase in imports
and serious injury whose existence had not been proved.
425 It is not necessary, therefore, for the Panel
to issue any finding on whether the Dominican Republic proved that the increase in imports caused
serious injury to the domestic industry.426
7.329 Nevertheless, without going any further, the Pa nel is able issue a factual finding on the
assessment of the causal link by the Dominican Re public's competent authority, which is consonant
with its responsibility to assess the facts in this DSU proceeding.427
(a) Main arguments of the parties
(i) Complainants
7.330 The complainants argue that the Commission inco rrectly determined the existence of a causal
link between the increase in imports and the serious injury in the preliminary and final determinations,
inasmuch as it failed to demonstrate: (i) the lin k between the alleged increase in imports and the
serious injury to the domestic industry, using a relevant analytical method; and (ii) that the harmful
effects caused by factors other than imports were not attributed to the imports under investigation.
Consequently, the preliminary and final determinat ions regarding the causal link were inconsistent
with Articles 2.1, 3.1, last sentence, 4.1(a) and 4.2 of the Agreement on Safeguards, as well as with

425 This statement finds support in the Appellate Body Report Argentina – Footwear (EC) ,
paragraph 145; and in the Panel Reports in Korea – Dairy, paragraph 7.87; Argentina – Preserved Peaches ,
paragraph 7.135; and Chile – Price Band System, paragraph 7.176.
426 Nor is it necessary for the Panel to rule on the preliminary issue raised by the Dominican Republic
with regard to this claim. See paragraphs 7.98-7.111 of the present Report.
427 This approach has been followed by panels in previous cases when it was determined that the
complainant had not succeeded in proving one or more of the elements on which the causal link was assessed in
the terms of Article 4.2(b) of the Agreement on Safeguards. See also the Panel reports, Argentina – Preserved
Peaches, paragraphs 7.135-7.139; and Chile – Price Band System, paragraphs 7.175-7.180.
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Article 6 of the Agreement on Safeguards with regard to the provisional measure, and with
Article XIX:1(a) of the GATT 1994.
428 Moreover, they indicate that, because the
Dominican Republic failed to comply with Article 4.2(b), second sentence, of the Agreement on
Safeguards, the provisional and final measures are also inconsistent with Article 5.1 of the Agreement
on Safeguards.429
7.331 As regards their first argument, the complain ants state that the Commission did not examine
the alleged causation by means of a relevant analytical method. Ac cording to the complainants, the
Commission's causation analysis was limited to: (i) two paragraphs in the Definitive Resolution
(paragraphs 37 and 38); and (ii) the serious injury analyses contained in the Preliminary and Final
Technical Reports.
430 In their opinion, the Commission found that there was a causal link on the basis
of mere assertions in the reports and resolutions th at the increase in imports had caused serious injury
to the domestic industry431; these assertions do not meet the requi rements prescribed in Article 4.2(b)
of the Agreement on Safeguards. The complainants also indicate that the Definitive Resolution
contains a confused finding regarding causation.432
7.332 Concerning their second argument, the complainants assert that neither the reports by the DEI
nor the resolutions of the Commission contain a non-attribution analysis of the harmful effects caused
by factors other than the imports investigated a nd that such an omission is inconsistent with
Articles 4.2(b), second sentence, 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards.
Specifically, according to the complainants, the Dominican Republic did not conduct a non-attribution
analysis of the financial losses, the increase in stocks and the reduced cash flow. Moreover, they state
that during the Panel proceedings the Dominican Republic put forward ex post explanations of the
non-attribution of injury to factors other than the imports, which do not contain references to the
competent authority's reports or resolutions.
433
7.333 In the complainants' view, the finding of the ex istence of financial losses when the domestic
industry's revenue had shown a large increase suggest s that these losses were ca used by factors other
than the imports (for example, production costs, operating costs and financial costs).434

428 Complainants, first written submission, paragraphs 380-381, 404 and 434; opening statement at the
first meeting of the Panel, paragraph 97; second written submission, paragraphs 231-232.
429 Complainants, second written submission, paragraph 235; replies to Panel questions Nos. 39, 82, 85
and 86.
430 Complainants, first written submission, paragraphs 383 and 397; opening statement at the first
meeting of the Panel, paragraph 98.
431 Complainants, first written submission, paragraphs 389-393; opening statement at the first meeting
of the Panel, paragraph 99. According to the complainan ts, these assertions consist of the following: (i) it was
ascertained that the increased imports had caused a significant decline in the domestic industry's share of
apparent domestic consumption; and (ii) as a result of the increased imports, the firm suffered large financial
losses during the period investigated, as could be seen from the increased inventories, reduced cash flow and
sharp contraction in production levels. Complainants, first written submission, paragraph 394.
432 Complainants, first written submission, paragraphs 395 and 396. According to the complainants,
the confusion consists of referring to the increased inve ntories, reduced cash flow and contraction in production
as evidence of financial losses. Apparently, these effect s were not caused by the imports. Nevertheless, the
complainants assert that there was no adequate non-attribution analysis.
433 Complainants, first written submission, paragraphs 405-407, 410-411, 416-418, 423-425 and 428;
opening statement at the first meeting of the Pane l, paragraphs 102-104; second written submission,
paragraph 232; reply to Panel question No.149.
434 Complainants, first written submission, paragraphs 412-416.
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7.334 As to the increase in inventories (even when sal es had risen to a level that exceeded output),
the complainants consider that this could have been caused by factors other than imports and that the
explanations given by the Dominican Republic in this regard cannot be found in either the reports or
the resolutions. They also consider that the information on inventories refers to the Bags Division as
a whole, which produces other goods in addition to the like or directly competitive product (in
particular ropes, cordage and mesh bags) but that the Dominican Republic did not conduct a
non-attribution analysis in respect of the other factors.
435
7.335 Regarding the cash flow, the complainants point out that this factor too was assessed for the
Bags Division and that the Commission did not dis tinguish between the effects attributable to the
production of goods or to activities other than do mestic sales (for example, exports) by this
Division.436 Furthermore, in their view, the effects of f actors other than imports that had an effect on
cash flow were likewise not considered separately.437
7.336 The complainants also state that the Commis sion did not analyse the possible impact on
FERSAN's operations caused by competition from other domestic producers that had been excluded
from the consideration of the domestic industry, in order to distinguish this impact from that of
competition from imports.
438
(ii) Dominican Republic
7.337 The Dominican Republic contends that, contrary to what is alleged by the complainants, the
Commission issued findings and reasoned conclusions on the existence of a causal link in the terms of
Articles 3.1, last sentence, and 4.2(c) of the Agreement on Safeguards. 439 In its view, the evidence of
the existence of a causal link is not limited to th e section on causation in the DEI's Preliminary and
Final Technical Reports cited by the complainants , but also includes the DEI's analysis of the
indicators of injury in addition to the paragr aphs in the Definitive Resolution cited by the
complainants. As stated, the competent authoritie s' conclusions show a direct link between the
increase in imports and the serious injury and, accordingly, are not based on "mere assertions".440
7.338 In addition, the Dominican Republic states that the complainants' assertions regarding the
shares of the domestic industry and of imports in apparent domestic consumption are mistaken 441 and
that the Commission provided an adequate and reasoned explanation of the causation.442

435 Complainants, first written submission, paragraphs 418-423; opening statement at the first meeting
of the Panel, paragraph 107.
436 Complainants, first written submission, paragraph 426; opening statement at the first meeting of the
Panel, paragraphs 108-109.
437 For example, the increase in costs owing to high er fuel and energy prices, the increase in costs
owing to the larger number of employees and a higher wage bill and to the payment of interest and commissions
on loans. Complainants, first written submission, paragraph 427.
438 Complainants, first written submission, paragraphs 429-433; opening statement at the first meeting
of the Panel, paragraphs 110-111.
439 Dominican Republic, first written submission, paragraphs 437-440.
440 Dominican Republic, first written submission, paragraphs 437-440, 442.
441 According to the Dominican Republic, because of the large influx of ch eap imports, the "timid
recovery" in the domestic industry's share was only achie ved by selling "at a loss"; this was the cause of the
financial losses suffered by the domestic industry. As to imports, it indicates that the "slight decrease up to the
end of the period", of an "incidental and temporary nature" did not manage to reverse the significantly upward
WT/DS415/R,
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7.339 The Dominican Republic also contends that in the technical reports the Commission provided
a reasoned and adequate explanation of how the fina ncial losses were attributable to the increase in
imports, so that it cannot be maintained that a non-at tribution analysis should have been conducted in
this regard. Concerning the increase in inventories, the Dominican Republic states that this can be
explained by two factors that emerge from the DEI's technical reports: (i) the increase in FERSAN's
output; and (ii) the impossibility of increasing market share despite prices artificially kept low. By
displacing sales of the domestic product, imports were one of the reasons for the increase in
inventories, both in terms of value and volume. The Commission's explanations regarding attribution
of the increase in inventories to the increase in imports were thus reasoned and adequate.
443
7.340 With regard to the reduced cash flow, the Do minican Republic affirms that the financial
statements used to assess serious injury were ba sed on the FERSAN division that only produces bags
and tubular fabric, so that it could not be clai med that factors other than imports were not
distinguished, for example, increased production cost s, operating costs and higher financial costs.
The Dominican Republic adds that the increase in these costs is related to FERSAN's increased output
and expansion plan, and that the trend in these factor s reflected the firm's decision to keep prices low
and output high, taken in the light of the increase in imports.444
7.341 With regard to the exclusion of certain dom estic producers, the Dominican Republic states
that this was done in conformity with its domestic legislation and that both the legislation and the
exclusion of the producers were consistent w ith the WTO Agreements. The Dominican Republic
adds that the two domestic producers identified by the complainants (FIDECA and Textiles TITÁN)
are assembly firms that add minimum value to the tu bular fabric they make in to bags. Consequently,
any injury suffered by FERSAN as a result of competition from these firms would be directly
attributable to the imports of tubular fabric, which is the product investigated in these proceedings.445
(b) Main arguments of the third parties
(i) United States
7.342 The United States affirms that there is no basis for the complainants' claim that Article 2.1 of
the Agreement on Safeguards requires the competent au thority to conduct a separate analysis of the
volume of imports in order to determine whet her it was "recent enough, sudden enough, sharp
enough, and significant enough" to cause serious injury to the domestic industry before continuing
with the rest of the analysis. In its view, it suffi ces to find that imports have increased, and then, in
the remainder of the analysis, to address the questi on of whether those increased imports have caused
serious injury or threat of serious injury.446
(ii) Panama
7.343 Panama states that the Dominican Republic's i nvestigating authority did not substantiate the
determination of serious injury and causation for an industry that enjoys a favourable situation, and
also failed not only to prove that it is currently be ing affected by the alleged increase in imports but

trend established by the previous in creases in 2007 and 2008. Dominican Republic, first written submission,
paragraphs 443-445.
442 Dominican Republic, first written submission, paragraph 446.
443 Dominican Republic, first written submission, paragraphs 405, 406, 447-452, 454, 456 and 457.
444 Dominican Republic, first written submission, paragraphs 459-461.
445 Dominican Republic, first written submission, paragraphs 464-466.
446 United States, third party written submission, paragraph 4.
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also to identify other factors not directly related to the imports that might have affected the domestic
industry. In light of the foregoing, Panama cons iders that the investigation by the investigating
authority in order to determine the causal link was flawed.
447
(c) Assessment of the facts
7.344 Pursuant to Articles 2.1 and 4.2(b) of the Ag reement on Safeguards, it must be demonstrated
that there is a causal link between increased imports of the product concerned and the serious injury.
When factors other than increased imports are causi ng injury to the domestic industry, such injury
shall not be attributed to increased imports.
7.345 In US – Wheat Gluten, the Appellate Body stated that:
"Article 4.2(b) presupposes, therefore, as a first step in the competent authorities'
examination of causation, that the injurious effects caused to the domestic industry by
increased imports are distinguished from the injurious effects caused by other factors.
The competent authorities can then, as a second st ep in their examination, attribute to
increased imports, on the one hand, and, by im plication, to other relevant factors, on
the other hand, 'injury' caused by all of these different factors, including increased
imports. Through this two stage process, the competent authorities comply with
Article 4.2(b) by ensuring that any injury to the domestic industry that was actually
caused by factors other than increased imports is not 'attributed' to increased imports
and is, therefore, not treated as if it were injury caused by increased imports, when it
is not. In this way, the competent author ities determine, as a final step, whether 'the
causal link' exists between increased imports and serious injury, and whether this
causal link involves a genuine and substa ntial relationship of cause and effect
between these two elements, as required by the Agreement on Safeguards."
448

7.346 Furthermore, the Panel in Argentina – Footwear (EC), in a finding upheld by the Appellate
Body, stated that a proper approach that could be adopted by a Panel in order to evaluate whether a
Member has complied with the provisions of Ar ticle 4.2(a) and 4.2(b) of the Agreement on
Safeguards with regard to a causal link would consis t of examining the following points: (i) whether
an upward trend in imports coincides with downward tr ends in the injury factors, and if not, whether
an adequate, reasoned and reasonabl e explanation is provided as to why, nevertheless, the data show
causation; (ii) whether the analysis of the cond itions of competition between the domestic and the
imported product demonstrate a cau sal link between the imports and the injury; and (iii) whether
other relevant factors have been analysed and wh ether it has been established that injury caused by
factors other than imports has not been attributed to the imports.449
7.347 The Panel notes that the Commission's causation analysis can be found in paragraphs 37 and
38 of the Definitive Resolution and paragraph 49 of the Preliminary Resolution, as well as in the
analyses of serious injury in the Preliminary a nd Final Technical Reports, and in the section on
causation in both technical reports.

447 Panama, third party written submission, paragraphs 36 and 38.
448 Appellate Body Report, US – Wheat Gluten , paragraph 69 (italics in the original). See also the
Appellate Body Report, US – Lamb, paragraphs 167-168.
449 Panel Report, Argentina – Footwear (EC), paragraph 8.229; Appellate Body Report, Argentina –
Footwear (EC), paragraph 145. See also the Panel Report, US – Wheat Gluten, paragraph 8.91.
WT/DS415/R,
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7.348 The Commission concluded the following in its Preliminary Resolution:
"49. For the foregoing reasons and after ha ving evaluated the relevant factors, the
Commission was able to find that the increas e in imports of the product investigated
has caused serious injury to the domes tic industry because it suffered significant
financial losses during the period investigated , jeopardizing the sustainability of this
important domestic industry, so that an y delay would entail damage which it would
be difficult to repair."
450

7.349 Moreover, in its Definitive Resolution, the Commission concluded:
"37. That the performance of imports in relation to domestic production continued
to show an upward and sustained trend during the period investigated. It is therefore
obvious that the increase in imports has caused injury to the domestic industry
inasmuch as it was verified that the incr ease in the value and volume of the imports
was the cause of a significant drop in the domestic industry's share of apparent
domestic consumption.

38. That, moreover, as a result of the incr ease in imports of the product subject to
investigation, the firm suffered significant financial losses during the period
investigated, which can be seen from the increase in inventories, the reduced cash
flow, and the sharp contraction in its level of production."
451

7.350 The Panel also notes that in the section entitled Causation in its Final Technical Report, after
having referred to the legal grounds applicable to the issue and repeating the arguments of the
applicant enterprise, the importing and exporting firms and the countries taking part in the national
investigation, the DEI stated that:
"In order to determine a possible causal link and to substantiate the existence of any
"logical connection" between the increase in imports and the injury to the domestic
industry, in the previous point … the DEI analysed the elements of injury that could
determine the existence of a direct link between the increase in imports of
polypropylene bags and tubular fabric and the commercial situation faced by
FERSAN, so that the plenary meeting of the Commission may decide whether or not
a definitive safeguard measure needs to be imposed."
452

7.351 The DEI's Preliminary Technical Report contains almost identical wording with reference to
the provisional safeguard measure.453
7.352 In other words, the DEI's Preliminary and Fi nal Technical Reports confine themselves to
citing relevant legal provisions, re peating the arguments of the interested parties during the national
investigation procedure, and suggesting that there are elements of injury that " could determine the
existence" of a "direct link" betw een the increased imports of polypr opylene bags and tubular fabric
and the commercial situation facing the domestic indust ry. The DEI's reports do not therefore contain
any finding, but put the decision on whether or not to impose a provisional or definitive safeguard

450 Preliminary Resolution, Exhibit CEGH-5, paragraph 49.
451 Definitive Resolution, Exhibit CEGH-9, paragraphs 37-38.
452 Final Technical Report, Exhibit CEGH-10, page 91.
453 Preliminary Technical Report, Exhibit CEGH-7, page 88.
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measure before the plenary meeting of the Commission . Neither does the injury section in the
technical reports provide any explanation concerning the causation itself.
7.353 None of the parties brought to the Panel's atten tion the existence of other parts of the report
published by the competent authority that could prov ide evidence of additional considerations in the
examination of the existence of a causal link.
7.354 On the basis of the competent authority's findings in the preliminary and definitive
Resolutions and in the Preliminary and Final Techni cal Reports, the Panel notes that the Commission
concluded that there was a causal link between the increased imports and the serious injury without
having analysed the elements to be taken into account in order to reach such a determination. In
particular, the Commission concluded that the co mpany FERSAN suffered significant financial losses
during the period investigated, which in its view was demonstrated by the increase in stocks, the
reduction in cash flow, and the sharp contraction in its level of production. Nevertheless, in its
preliminary and definitive Resolutions the Commiss ion does not provide any explanation of how this
conclusion would justify the determination of th e existence of a causal link between the increased
imports and the injury. Neither does the Commissi on provide any analysis how it was ensured that
the effects of the injury to the do mestic industry caused by other f actors were not attributed to the
increased imports.
E. W
HETHER THE DOMINICAN REPUBLIC ACTED INCONSISTENTLY WITH OBLIGATIONS UNDER
THE COVERED AGREEMENTS AS REGARDS THE APPLICATION OF THE IMPUGNED MEASURES
AND BY FAILING TO COMPLY WITH CERTAIN PROCEDURAL OBLIGATIONS
7.355 The Panel will address below the claims made by the complainants regarding: (i) the
application of the provisional and definitive measures as regards the principle of parallelism and
Article 9.1 of the Agreement on Safeguards; and (ii) compliance with certain procedural obligations.
1. Whether the competent authority acted inconsistently with obligations under the
covered agreements by failing to comply with the principle of parallelism and Article 9.1
of the Agreement on Safeguards
(a) Main arguments of the parties
(i) Complainants
7.356 The complainants ask the Panel to find that th e Dominican Republic acted inconsistently with
Articles 2.1, 2.2, 3.1, 4.2, 6 and 9.1 of the Agre ement on Safeguards by failing to respect the principle
of parallelism between the scope of the provisional and definitive measures and the basis for the
determinations.454 The complainants assert that the Domi nican Republic did not comply with this
principle because: (i) in its analysis of the in crease in imports, serious injury and causation, the
Commission considered all imports that entere d the Dominican Republic between 2006 and 2009,
including those from Colombia, Indonesia, Mexico and Panama; (ii) based on Article 9.1 of the
Agreement on Safeguards, the Commission excluded imports from Colombia, Indonesia, Mexico and
Panama from the application of the provisional and definitive measures; and (iii) the Commission did

454 Complainants, first written submission, paragraphs 436-438.
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not, however, undertake a new analysis of the in crease in imports, serious injury and causation
excluding imports from Colombia, Indonesia, Mexico and Panama.
455
7.357 The complainants contend that the exclusion of certain Members from the scope of the
measure, based on Article 9.1 of the Agreement on Safeguards, does not exempt the
Dominican Republic from complying with the parallelism requirement, as in their interpretation
Article 9.1 provides an exception both to Article 2.1 and Article 2.2 of the said Agreement. Likewise,
the exclusion of certain origins pursuant to Article 9.1 of this Agreement does not exempt the
Dominican Republic from conducting a new investiga tion excluding imports from the origins left
outside the scope of the measure. The complainan ts consider that, inasmuch as the Appellate Body
has established that the principle of parallelism is a general form ula without exceptions, it applies
irrespective of the reasons for which a Member has decided to exclude certain imports from the
application of the measure.
456
7.358 The complainants also state that, pursuant to Article 9.1 of the Agreement on Safeguards, the
Dominican Republic should have ex cluded imports from Thailand from the scope of the measures as
these accounted for 0.32 per cent of total imports dur ing the period investigated and, by not doing so,
the Dominican Republic failed to comply with this provision.457
(ii) Dominican Republic
7.359 The Dominican Republic considers that the theo ry of parallelism, as established in WTO case
law, does not apply to imports excluded from the app lication of a measure pursuant to Article 9.1 of
the Agreement on Safeguards. 458 It considers that, in the present case, the fact that the Agreement on
Safeguards itself provides, and indeed requires, the exclusion of certain Members pursuant to
Article 9.1 is highly relevant and provides support for the view that the principle of parallelism is not
applicable. Accordingly, in its view, Article 9.1 allowed it to exclude imports from Colombia,
Indonesia, Mexico and Panama from the application of the measures because imports from each of
these countries did not exceed 3 per cent and as a whole did not exceed 9 per cent.
459
7.360 In addition, the Dominican Republic points out that, based on the findings of the Panels in
Argentina – Footwear (EC) and US – Wheat Gluten and also of the Appellate Body in the latter case,
Article 9.1 of the Agreement on Safeguards acts as an exception to Article 2.2 but not to Article 2.1 of
the said Agreement.460 This would imply that this provision also acts as an exception to the principle
of parallelism. In its view, the absence of th e parallelism requirement wh en excluding imports under
Article 9.1 of the Agreement on Safeguards does not lead to disproportionate results, as the exception
to Article 9.1 is subject to conditions and imposes de minimis thresholds. Consequently, in this

455 Complainants, first written submission, paragraphs 446-449.
456 Complainants, second written submission, paragraphs 239 and 241; oral statement at the
first meeting of the Panel, paragraph 116; reply to Panel question No. 156.
457 Complainants, first written submission, footnote 387 to paragraph 450; reply to Panel question
No. 156.
458 Dominican Republic, second written submission, paragraphs 107 and 110.
459 The DEI determined that imports from Colombia represented some 0.01 per cent; those from
Indonesia 0.75 per cent; those from Mexico 0.08 per cent; and those from Panama 0.37 per cent; and that
together they accounted for 1.21 per cent of the Dominican Republic 's total imports. Dominican Republic,
first written submission, paragraphs 472-474.
460 Dominican Republic, second written submission, para graphs 113-116 (where there is a reference to
the Panel Report, US – Wheat Gluten, footnote 164 to paragraph 8.171); reply to Panel question No. 155.
WT/DS415/R,
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context it is likewise unnecessary to conduct a new analysis that would exclude imports from
Colombia, Indonesia, Mexico and Panama.
461
7.361 Lastly, regarding imports from Thailand, it ar gues that according to the Appellate Body's
opinion in US – Line Pipe, there is no requirement to indicate a list of countries covered by or
excluded from the application of the measure; it suffices simply to show that the Members in
question are in fact excluded from the application of the measure. Moreover, it indicates that, given
that there were no imports from Thailand in 2009, it did not consider it necessary expressly to exclude
Thailand from the application of the measure.462
(b) Main arguments of the third parties
(i) United States
7.362 The United States points out that Article 9.1 of the Agreement on Safeguards only acts as an
exception to the application of safeguard measures under Article 2.2 and not Article 2.1. It also
considers that, because Article 9.1 of the Agreement on Safeguards uses the word shall in the English
text, it is a mandatory provision. Consequently, if a Member seeks to justify a measure as a
safeguard, this Member must prove that it has complied with the requirements of this provision.
463
(ii) Nicaragua
7.363 Nicaragua observes that the Dominican Republic failed to comply with the principle of
parallelism and that the Commission did not explain the reasons for which it considered that this
principle did not have to be respected.464
(iii) Turkey
7.364 Turkey states that the principle of paralle lism established by the Appellate Body in
Argentina – Footwear (EC) does not apply in the present case because certain countries were
excluded from the application of the measure on the basis of Article 9.1 of the Agreement on
Safeguards. According to Turkey, the word shall in Article 9.1 lays an obligation on Members to give
"special and differential treatment ". It is Turkey's view that, as a developing country, it should be
excluded from application of the measure. It also points out that Articles 9.1 and 2.2 of the
Agreement in question are provisions on the application of measures and that Ar ticle 3.1 contains the
rules applicable to the investigation, but does not in clude any reference to Article 9.1. Accordingly,
in its view, there are no grounds for excluding developing countries that meet the requirements in
Article 9.1 from the safeguards investigation.
465
(iv) European Union
7.365 The European Union considers that there is no rule/exception relationship between
Articles 2.2 and 9.1 of the Agreement on Safeguards as the two provisions contain separate and

461 Dominican Republic, second written submission, pa ragraphs 107 and 121; reply to Panel question
No. 158.
462 Dominican Republic, replies to Panel questions Nos. 157 and 198.
463 United States, third party written submission, paragraph 16; reply to Panel question No. 19.
464 Nicaragua, third party written submission, paragraph 10.
465 Turkey, third party written submission, paragraph 8; third party statement, paragraphs 6 and 7;
reply to question No.19 from the Panel.
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distinct obligations. It is also its view that the reference to Article 9.1 of the Agreement as the reason
for excluding certain imports from th e measure's scope may constitute the reasoned and adequate
explanation as to why imports from developing countries do not have to be excluded from the scope
of the investigation.
466
(c) Assessment of the Panel
7.366 The complainants put forward the following two claims jointly in section VI.F of their
first written submission: (i) that the Dominican Republic failed to comply with the principle of
parallelism under Articles 2.1, 2.2, 3.1, 4.2 and 6 of the Agreement on Safeguards; and (ii) that the
Dominican Republic failed to comply with Article 9.1 of the Agreement on Safeguards by not having
excluded imports from Thailand from the application of the measures. 467 The Panel will analyse each
of these claims separately.
(i) Compliance with the principle of parallelism between the coverage of the measures and the
basis for the determinations
The principle of parallelism in the Agreement on Safeguards

7.367 As pointed out by the Appellate Body in US – Steel Safeguards , the principle of parallelism
emerges from the parallel language used in Article 2.1 and 2.2 of the Agreement on Safeguards. 468
This principle also covers the symmetry that must exist between Articles 2.1 and 4.2 of the
Agreement.469 It implies that the imports considered fo r the purposes of the safeguards investigation
(in the terms of Articles 2.1 and 4.2 of the Agre ement on Safeguards) and th e products to which the
measure is applied (in the terms of Article 2. 2 of the said Agreement) must be the same.
Notwithstanding the foregoing, in certain circumstance a difference in the parallel requirements in
Article 2.1 and 2.2 of the Agreement on Safeguard s may be justified if the Member imposing the
measure establishes explicitly that the imports satisfy the cond itions for the application of the
safeguard measure according to Articles 2.1 and 4.2 of the Agreement.470
7.368 The Spanish text of Article 2.1 of the Agreement on Safeguards uses the term " importaciones
del producto" and Article 2.2 refers to the " producto importado". The French version uses the words
"produit importé" and the English version the expression "product being imported" in both provisions.
Furthermore, the Spanish text of subparagraphs (a) and (b) of Article 4.2 of the Agreement on
Safeguards uses the words " del producto de que se trate ". The English text reads "of the product
concerned" and the French text "du produit considéré".

466 European Union, replies to Panel questions Nos. 19 and 20.
467 When making their claim regarding parallelism, the complainants identified Article 9.1 of the
Agreement on Safeguards, but did not explain why the Dominican Republic had acted inconsistently with its
obligations under this provision. The only argument put forward by the complainants in support of the claim
that the Dominican Republic violated Article 9.1 is that imports from Thailand were not excluded from
application of the measures.
468 Appellate Body Report, US – Steel Safeguards, paragraph 439.
469 Panel Report, US – Wheat Gluten, paragraph 8.168 (finding upheld by the Appellate Body in its
Report on the same case, paragraph 96).
470 Appellate Body Reports, US – Wheat Gluten, paragraph 98; US – Line Pipe, paragraph 181; US –
Steel Safeguards, paragraph 441.
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7.369 The Appellate Body has established that when a Member seeks to exclude certain origins
from the application of a measure, that Member mu st conduct a new analysis that takes into account
only the impact of the origins actually covered by the measure.
471
7.370 The four cases in which the principle of para llelism has been examined so far in the
WTO dispute settlement mechanism (Argentina – Footwear (EC)472, US – Wheat Gluten473, US – Line
Pipe474, and US – Steel Safeguards 475) referred to the exclusion of trading partners under FTAs or
members of customs unions from the application of the safeguard measure. The situation is different
in the present case because the exclusion of certa in imports from developing countries from the
measure's coverage was based on Article 9.1 of th e Agreement on Safeguards. In the light of the
discussion between the parties, the Panel considers it necessary to address, as a prior issue, whether
the principle of parallelism as developed in the case law until now applies to the exclusion of certain
Members on the basis of Article 9.1 of the Agreement on Safeguards.
The principle of parallelism in connection with the exclusion of certain Members pursuant to
Article 9.1 of the Agreement on Safeguards

7.371 In order to determine the scope of Article 9. 1 of the Agreement on Safeguards in relation to
the principle of parallelism, the Panel will exam ine the relationship among the various relevant
provisions.
7.372 Article 9.1 of the Agreement on Safeguards provides the following:
"Developing Country Members
Safeguard measures shall not be applied agai nst a product originating 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 the product concerned.2
2 A Member shall immediately notify an action take n under paragraph 1 of Article 9 to the Committee
on Safeguards."

7.373 Article 9.1 of the Agreement on Safeguards lays down two requirements in order to be able to
exclude products originating from certain deve loping country Members from the coverage of a
safeguard measure, namely: (i) the individual shar e of the developing country Member which it is
sought to exclude from the application of the measure shall not exceed 3 per cent of the imports of the
Member applying the measure; and (ii) the collective share of the developing countries that meet the
first requirement shall not exceed 9 per cent of total imports of the product concerned.

471 Appellate Body Report, US – Steel Safeguards, paragraph 441.
472 In Argentina – Footwear (EC ), the Argentine authorities excluded imports from the Common
Market of the South (MERCOSUR) from application of the measures.
473 In US – Wheat Gluten , the United States excluded imports from Canada, a partner in the
North American Free Trade Agreement (NAFTA), from the scope of application of the measure.
474 In US – Line Pipe, the United States excluded imports from Canada and Mexico (NAFTA partners)
from the scope of application of the measure.
475 In US – Steel Safeguards, the United States excluded imports from Canada and Mexico, as well as
those from Israel and Jordan (all members of free trad e agreements with the Unite d States) from the scope of
application of the measures.
WT/DS415/R,
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7.374 The Panel considers it appropriate to examine the wording of Articles 2.1, 2.2, 3.1, 4.2 and
9.1 of the Agreement on Safeguards in order to co nsider the relationship between the principle of
parallelism and Article 9.1 of the Agreement on Safeguards. The above provisions were cited by the
complainants as the basis for their complaint.
7.375 The Panel shares the view expressed by Turkey as a third party that Articles 9.1 and 2.2 of the
Agreement on Safeguards are provisions on the application of measures. Article 2.2 of the
Agreement on Safeguards lays down as a general principle that "Safeguard measures shall be applied
to a product being imported irrespective of its source. " Article 9.1, on the other hand, provides that
"Safeguard measures shall not be applied against a product originating in a developing country
Member as long as ..." certain conditions set out in th e Article are met. The Panel therefore considers
that Articles 9.1 and 2.2 of the Agreement on Safeguards, read together, impose an obligation to apply
the measures to products of any origin, except tho se origins that meet the requirements set out in
Article 9.1.
7.376 In addition, Article 3.1 of the Agreement on Safeguards imposes the obligation to conduct an
investigation before applying a measure. Articles 2. 1 and 4.2 of the Agreement also provide that a
Member may only apply a safeguard measure after having found that increased imports have caused
or are threatening to cause serious injury to the dom estic industry. The Panel also agrees with Turkey
that Articles 3.1, 2.1 and 4.2 are rules relating to the investigation and analysis which the competent
authority must undertake. None of these three prov isions specifically refers to Article 9.1 of the
Agreement and neither does Article 9.1 contain any indication enabling it to be concluded that these
provisions have to be read together.
7.377 In the case before us, Article 9.1 of the Agre ement on Safeguards invol ves explicit departure
from the obligation in Article 2.2 on the applicati on of safeguard measures; this provision does not
apply to or affect other provisions such as Articl es 2.1, 3.1 or 4.2 of the Agreement concerning the
analysis and the investigation to be conducted by the competent authorities.
7.378 Regarding the relationship between Article 9. 1 of the Agreement on Safeguards and the
principle of parallelism, two criteria are relevant. Firstly, the Panel in Argentina – Footwear (EC)
stated the following:
"… 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 e ffects of those imports from developing
countries."
476

7.379 Secondly, in US – Wheat Gluten the Panel determined that:
"… there is a requirement of symmetry under Articles 2.1 and 4.2 SA between the
scope of the imports subject to a safeguards investigation and the scope of the imports
subject to the application of the measure.
164, 477

164 The only explicit departure from this principle in the Agreement on Safeguards is in Article 9.1 …"

476 Panel Report, Argentina – Footwear (EC), paragraph 8.85 (italics added). See also United States,
third party written submission, paragraph 17.
477 Panel Report, US – Wheat Gluten, paragraph 8.171.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

7.380 It should be noted that, when examining the latter case and after having indicated that
Article 9.1 of the Agreement on Safeguards is an exception to the general rules set out in the
Agreement and applies only to developing countries, the Appellate Body indicated that it did not
consider it of relevance to the appeal.
478
7.381 Taking into account the foregoing points of view and the analysis of the legal provisions cited
above, the Panel considers that Article 9.1 of th e Agreement on Safeguards imposes the obligation to
exclude from the application of the safeguard measure a share of the imports (corresponding to those
from developing country Members that meet the requ irements laid down in the provision) even when
these have been taken into account in the substantive analysis during the investigation.
7.382 In the present case, both the complainants and th e Dominican Republic agree that Article 9.1
of the Agreement on Safeguards is an exception.
7.383 In the Panel's view, when Article 9.1 of th e Agreement on Safeguards is applicable, this
affects the scope of the obligation contained in Article 2.2. Because of the way in which Article 9.1
of the Agreement on Safeguards is worded 479, it contains an obligation to exclude developing country
Members that satisfy the requirements in the provision and is not a discretionary faculty given to a
Member imposing a measure which it may decide to em ploy or not. In other words, when a Member
conducting a safeguards investigation finds, as a result of its examination, that products from certain
origins are covered by the provisions in Article 9. 1 of the Agreement on Safeguards, it is obliged to
grant special and differential treatment to the de veloping countries concerned when imposing the
measure by excluding them from its application. In such cases, in their report the competent
authorities must provide an explanation of the way in which the foregoing was determined.
7.384 The findings of the Panel in US – Wheat Gluten suggest that the principle of parallelism (as
developed until now) seeks to ensure that origins which collectively make a significant contribution to
the injury caused to the domestic industry are not excluded from the application of the measure.
480
Nevertheless, in the present case the exclusion was based on Article 9.1 of the Agreement on
Safeguards, which provides that th e imports excluded must not exceed 9 per cent of the total imports
of the Member imposing the measure, so that the exclusion of developing country Members does not
run the risk of generating the disproportionate effects indicated.

478 Appellate Body Report, US – Wheat Gluten, footnote 96 to paragraph 96.
479 The Spanish text of Article 9.1 of the Ag reement on Safeguards starts with the words " No se
aplicarán medidas de salvaguardias … ". The English text commences "Safeguard measures shall not be
applied …". The French text provides " Des mesures de sauvegarde ne seront pas appliquées … ".
480 The Panel which heard the US – Wheat Gluten case explained this in the following terms:
"An approach that excludes from th e application of the measure imports of certain countries if they do
not account for a 'substantial share' of total imports and do not 'contribute importantly' to the serious injury
caused by imports might also result in a situation where, after multiple minor quantities of imports are excluded
from the application of the measure, which collectively accounted for a major proportion of imports, it would no
longer be clear that any injury remaining that was due to the remaining imports would still achieve the threshold
of 'serious' as that term is defined in Article 4.1(a) of the Agreement on Safeguards. For example, assume that
the imports of five countries, each accounting for approximatel y 10 per cent of total imports, were all deemed
individually not to account for a 'substantial share' of total imports' and not to 'contribute importantly' to serious
injury and on this basis were thus excluded. Collectively, such imports account for 50 per cent of total imports.
There is no demonstration that any injury caused by imports remaining after the exclusion of 50 per cent of total
imports would still reach the threshold of 'serious injury'."
Panel Report, US – Wheat Gluten, paragraph 8.176 (italics in the original).
WT/DS415/R,
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7.385 Accordingly, in cases in which the exclusion is based on Article 9.1 of the Agreement, the
Panel does not consider it necessary to undertake a ne w analysis of the increase in imports, the injury
and causation. In this case, it would be enough for the competent authorities to show in their report
that the excluded Members actually satisfied the re quirements laid down in Article 9.1 itself of the
Agreement on Safeguards. Moreover, the Panel agrees with the Dominican Republic that the fact that
the Agreement on Safeguards itself, in Article 9. 1, imposes the obligation to exclude products from
specific origins from the application of the safegua rd measure results in a departure from the usual
application of the principle of parallelism with regard to such imports.
7.386 As to imports from Members that do not meet the requirements laid down in Article 9.1 of the
Agreement on Safeguards, the safeguard measures have to be applied irrespective of the source of the
imports, in conformity with Article 2.2 of the Agreement.
Analysis in the present case
7.387 In its Preliminary Resolution, the Commission decided "not to apply provisional safeguard
measures to imports from Mexico, Panama, Colombia and Indonesia as they are developing countries
which collectively account for 1.21 per cent of th e imports investigated, in conformity with
Article 9.1 of the WTO Agreement on Safeguards". 481 In its Definitive R esolution, for the same
reasons, the Commission decided not to apply the de finitive safeguard measure to imports from these
origins.482
7.388 The Commission based the above findings on th e Preliminary and Final Technical Reports.
In these technical reports, the DEI indicated that it ha d analysed all the transactions separately. Based
on this, the DEI found that 14 countries had exported the product investigated to the Dominican
Republic during the investigation period.
483 Later, the DEI found that imports from Colombia,
Indonesia, Mexico and Panama each accounted for less than 3 per cent of the Dominican Republic's
total imports of the product investigated dur ing the period 2006-2009 and that these Members
qualified as developing countries, taking into account their trade policy reviews at the WTO. It was
therefore suggested that these imports should be ex cluded from the application of the provisional and
definitive measures as they collectively accounted for 1.21 per cent of the imports investigated.
484
7.389 The Panel notes that imports from Colombia , Indonesia, Mexico and Panama did not
individually exceed 3 per cent of the Dominican Republic's total imports during the period
investigated. These imports therefore meet the fi rst threshold laid down in Article 9.1 of the
Agreement on Safeguards. Furthermore, the total share of the individual imports of

481 Preliminary Resolution, Exhibit-5, page 9. On 30 March 2010, the Commission approved an
Addendum to the Preliminary Resolution, Exhibit-6, in which it is specified that the provisional measure would
not apply to goods ( originating) (the Preliminary Resolution uses the words coming from) in Mexico, Panama,
Colombia and Indonesia.
482 Definitive Resolution, Exhibit-9, page 10.
483 Preliminary Technical Report Exhibit-7, page 60; Final Technical Report, Exhibit CEGH-10,
pages 49-50.
484 Preliminary technical report, Exhibit CEGH-7, pages 60, 61 and 95; Final Technical Report,
Exhibit CEGH-10, pages 49 and 50, 100 and 101; in addition to the foregoing, in both Reports the DEI
included a table entitled "Exclusion of developing countrie s". This table shows the total volume and total share
for each of the 14 Members exporting the product investigated during the investigation period. It also shows the
information corresponding to imports from the four Members excluded: Colombia, Indonesia, Mexico and
Panama. Preliminary Technical Report, Exhibit CEGH-7, page 96; Final Technical Report, Exhibit CEGH-10,
page 102.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

Colombia (0.01 per cent), Indonesia (0.75 per cent) , Mexico (0.08 per cent) and Panama (0.37 per
cent) amounted to 1.21 per cent of the Domi nican Republic's total imports over the period
investigated and so remained below 9 per cent of the Dominican Republic's total imports of the
product concerned. Accordingly, the collective shar e of the excluded Members, also remained below
the second threshold prescribed in Article 9.1 of the Agreement.
7.390 The Panel considers that the Commission, afte r having found that the product investigated
was being imported from developing country Member s which met the thresholds determined in
Article 9.1 of the Agreement on Safeguards, provide d a satisfactory explanation in the preliminary
and definitive Resolutions of the reason why Co lombia, Indonesia, Mexico and Panama were
excluded from the application of the measure.
7.391 The Panel therefore considers that the complainants have not demonstrated that the
Dominican Republic acted inconsistently with its oblig ations under Articles 2.1, 2.2, 3.1, 4.2, 6 and
9.1 of the Agreement on Safeguards as regards complia nce with the principle of parallelism by failing
to conduct a new analysis in order to determine the increase in imports, injury and causal link,
excluding imports from Colombia, Indonesia, Mexico and Panama.
7.392 Nonetheless, the fact that the Dominican Republic did not violate the principle of parallelism
in the case of Colombia, Indonesia, Mexico and Panama by excluding these countries from
application of the measure based on Article 9.1 of the Agreement on Safeguards does not necessarily
imply that the Dominican Republic complied fully w ith the obligation in this provision to exclude
imports from all relevant origins from application of the measure. This question will be examined
below.
(ii) Compliance with Article 9.1 of the Agreement on Safeguards
The obligation in Article 9.1 of the Agreement on Safeguards

7.393 Until now, only one dispute at the WTO ( US – Line Pipe) has examined Article 9.1 of the
Agreement on Safeguards. In that case, Korea clai med that the United States had violated Article 9.1
because it had not determined which developing coun tries would be exempt from application of the
measure and treated all developing count ries in the same way as other suppliers. 485 T h e
Appellate Body found that the available documents revealed no effort by the United States to make
certain that de minimis imports from developing countries were excluded from the application of the
measure.486 On the basis of this approach, the Panel considers that Members which apply safeguard
measures are obliged to adopt all reasonable measures available to them to exclude all developing
countries that meet the requirements in Article 9.1 of the Agreement on Safeguards.
7.394 The complainants argue that the Dominican Republic failed to comply with Article 9.1 of the
Agreement on Safeguards by not excluding imports from Thailand from application of the measure,
which accounted for 0.32 per cent of the Dominican Republic's total imports during the period
investigated. The Dominican Repub lic responds that it was not obliged to include Thailand, or any
other developing country, in a list of Members exclud ed or included, but that it sufficed to show that
this country was in fact excluded from application of the measure.

485 Appellate Body Report, US – Line Pipe, paragraph 121.
486 Appellate Body Report, US – Line Pipe, paragraph 132.
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7.395 In US – Line Pipe, the Appellate Body determined the following:
"We agree with the United States that Article 9.1 does not indicate how a Member
must comply with this obligation. There is nothing, for example, in the text of
Article 9.1 to the effect that countries to which the measure will not apply must be
expressly excluded from the measure. Although the Panel may have a point in saying
that it is 'reasonable to expect' an express exclusion, we see nothing in Article 9.1 that
requires one."
487

7.396 Taking into account the foregoing, although there is no express obligation in Article 9.1 of the
Agreement on Safeguards requiring that a list of Memb ers included in or excluded from coverage of a
measure be drawn up, the Member imposing a safe guard measure must ensure that products from
origins that fall within the provision in Article 9. 1 are excluded. There is a degree of flexibility
regarding the way in which each Me mber may comply with Article 9.1. Irrespective of the way in
which each Member complies with this provision, ho wever, the Member concerned must show that it
has made the efforts it can to exclude all those Memb ers covered by the provision in Article 9.1 of the
Agreement on Safeguards.
7.397 There follows an analysis of whether the Do minican Republic complied with its obligation
under Article 9.1 of the Agreement on Safeguards.
Whether the Dominican Republic complied with the obligation in Article 9.1 of the Agreement on
Safeguards

7.398 Neither the preliminary nor the definitive Reso lution analyse the situation of Thailand.
Nevertheless, the information furnished by the DE I, particularly the table entitled "Exclusion of
developing countries" in the Preliminary and Final Technical Reports 488, shows that imports of the
product concerned from Thailand amounted to 0.32 per cent of the Dominican Republic's total
imports over the period investigated. If the impo rts from Thailand are added to those from the
four Members excluded, imports of the product co ncerned during the investigation period would not
collectively have exceeded 9 per cent as in tota l they represented 1.53 per cent of the imports
investigated. Thailand was not, however, specifica lly excluded from the measure's coverage, even
though it is a developing country Member that sa tisfies the requirement in Article 9.1 of the
Agreement on Safeguards.
7.399 In response to a question from the Panel, the Do minican Republic indicated that it sufficed to
show that in fact imports from Thailand had b een excluded from application of the measure without
there being any obligation to exclude them explicitly and that, as there had been no imports from this
origin in 2009, it did not find it necessary expressly to exclude Thailand. Las tly, it stated that if
Thailand started to export to the Dominican Republic and requested exemption from the measure, the
Dominican Republic would be prepared to grant it.489
7.400 As already mentioned, there is a certain flexibility in the manner of complying with the
obligations under Article 9.1 of the Agreem ent on Safeguards. In the present case, the
Dominican Republic explicitly excluded imports from four origins, some of them in a similar position

487 Ibid., paragraph 127.
488 Preliminary Technical Report, Exhibit CEGH-7, page 96; Final Technical Report, Exhibit
CEGH-10, page 102.
489 Dominican Republic, replies to Panel questions Nos. 158 and 199.
WT/DS415/R,
WT/DS416/R,
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to Thailand (as regards imports during the period investigated). Unlike these countries, however,
Thailand was not specifically mentioned in the list of countries excluded. It should also be noted that
Colombia, Indonesia and Panama did not export to the Dominican Republic either in 2009 and yet
these three Members were included by the competent authority in the list of countries excluded.
7.401 Bearing this in mind, the Panel does not consid er that the Dominican Republic has provided a
convincing explanation of the reason why Thailand was treated differently and was not included
specifically in the list of countries excluded from th e measure's coverage. It is not enough for the
Dominican Republic to state without any further substantiation that imports from Thailand were
de facto excluded from the measure's application becau se there are no grounds for the different
treatment given to imports from Thailand and no pr oof that if Thailand had decided to export the
product investigated to the Dominican Republic, it w ould have been exempt from application of the
measures.
7.402 The Panel therefore concludes that the co mplainants have made the case that the
Dominican Republic did not take all reasonable measures available to it to exclude from application
of the measures contested all developing countries which export less than the de minimis levels
indicated in Article 9.1 of the Agreement on Safegua rds and, in this particular instance, Thailand.
Consequently, as far as the provisional and defi nitive measures are concerned, the Dominican
Republic acted inconsistently with its obligations under Article 9.1 of the Agreement on Safeguards.
2. Whether the Dominican Republic acted inconsistently with obligations under the
covered agreements by failing to comply with certain procedural obligations
7.403 The complainants put forward jointly the fo llowing three claims regarding procedural
obligations: (i) the Dominican Republic imposed the definitive measure without timely notification in
the terms of Article XIX:2 of the GATT 1994; ( ii) the Dominican Republic did not afford Members
having a substantial interest in the products under investigation an opportunity for consultations in the
terms provided in Articles XIX:2 of the GATT 1994 and 12.3 of the Agreement on Safeguards; and
(iii) the Dominican Republic did not give the comp lainants the opportunity to obtain an adequate
means of trade compensation in accordance with Ar ticle 8.1 of the Agreement on Safeguards and
Article XIX:2 of the GATT 1994.
490
(a) Main arguments of the parties
(i) Complainants
7.404 First of all, the complainants contend th at the Dominican Republic did not notify the
safeguard measure prior to its adoption, thereby acting inconsistently with Article XIX:2 of the
GATT 1994. In their view, the Dominican Republic 's interpretation that Article XIX:2 of the
GATT 1994 only requires that the notification should be made prior to application of the measure, on
the basis of the English and French versions of this text, is incorrect. The complainants state that the
text of the GATT is equally authentic in the three la nguages. They also consider that the language in
the last part of the first sentence of Article XIX:2 of the GATT 1994 ("the proposed action") confirms
that, pursuant to this provision, a Member impos ing a safeguard measure must first notify the
proposed measure (before it is adopted) and th en hold consultations with Members having a

490 Complainants, first written submission, paragraph 451.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

substantial interest. The complainants also indi cate that Article 12.1 of the Agreement on Safeguards
is irrelevant for the purposes of their complaint.
491
7.405 Secondly, the complainants argue that, by faili ng to notify the safeguard measure prior to its
adoption, the Dominican Republic did not give expo rting Members affected the opportunity to hold
the consultations provided in Articles XIX:2 of the GATT 1994 and 12.3 of the Agreement on
Safeguards and, therefore, also failed to mainta in a level of concessions and other obligations
substantially equivalent to the level it was obliged to maintain with other exporting Members affected
by the safeguard measure, thereby acting inconsis tently with Article 8.1 of the Agreement on
Safeguards.492 The complainants also point out that the various acts by which the
Dominican Republic seeks to prove that it held cons ultations with interested Members were acts
carried out during the national safeguards investig ation and are not related to the consultations
referred to in Articles XIX:2 of the GATT 1994 and 12.3 of the Agreement on Safeguards.493
(ii) Dominican Republic
7.406 Regarding the claim concerning the alleged l ack of notification, the Dominican Republic
points out that the English and French texts of Article XIX:2 of the GATT 1994 require that
notification has to be made before application of the measure and that Article XIX:2 of the GATT has
to be interpreted in the light of the wording of these versions. In its view, Article 12.1 of the
Agreement on Safeguards and the interpretation of this provision by the Panel and the Appellate Body
in US – Wheat Gluten are relevant when interpreting Article XIX:2 of the GATT 1994 and support its
interpretation that the notification required by th is provision must be made after adoption and not
before.494
7.407 As to the claim concerning the obligation unde r Article 12.3 of the Agreement on Safeguards,
the Dominican Republic states that the complainan ts had opportunities to examine the measure's
probable effects before it came into force and that consultations were held with the complainants on
12 May 2010 at the time of the public hearing in the national investigation.495
7.408 With regard to the claim concerning the allege d failure to comply with Article 8.1 of the
Agreement on Safeguards, the Dominican Republic r ecalls that it lodged a preliminary objection
asserting that this did not form part of the Panel's terms of reference. Nevertheless, even if the Panel
considers that this claim is covered by its terms of reference, the Dominican Republic is of the view
that it did not act inconsistently with its oblig ations under this provision because it did not suspend

491 Complainants, first written submission, paragraphs 458 and 460; second written submission,
paragraph 244; opening oral statement at the first meeting of the Panel, paragraph 122; replies to Panel
questions Nos. 161-163.
492 Complainants, first written submission, paragraphs 458-459; second written submission,
paragraph 245.
493 Complainants, opening statement at the first mee ting of the Panel, paragraph 124; second written
submission, paragraphs 248-250.
494 Dominican Republic, first written submission, para graphs 486, 487 and 490-495; replies to Panel
questions Nos. 163 and 165.
495 Dominican Republic, first written submission, paragraphs 500-501; replies to Panel questions
Nos. 166 and 167.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

any concession (as the provisional and definitive m easures did not exceed the bound tariff of 40 per
cent ad valorem) and so was not in the situation covered by Article 8.1.
496
(b) Main arguments of third parties
(i) Colombia
7.409 Colombia points out that Article XIX:2 of the GATT 1994 determines that the notification
must be made before a party adopts measures under Article XIX:1 of the GATT. Regarding the
opportunity to hold consultations, Co lombia considers that the Panel will have to determine whether
the Dominican Republic gave the complainants an adequate opportunity for these in advance and with
a view to reaching an agreement on a means of trad e compensation, in the terms of Articles 12.3 and
8.1 of the Agreement on Safeguards.497
(ii) United States
7.410 With regard to the claim concerning notification, the United States considers that the last part
of the first sentence of Article XIX:2 of the GATT 1994 498 has to be addressed within the context of
the first part of this sentence. Furthermore, it indicates that there has to be compliance with the
requirement to hold consultations , as provided in Articles XIX:2 of the GATT 1994 and 12.3 of the
Agreement on Safeguards, before application of the safeguard measure.499
(iii) Panama
7.411 Panama considers that the Dominican Republic fa iled to comply with the obligation to give
notice sufficiently in advance because it did not provide Members having a substantial interest with an
opportunity to hold prior consultations, in the terms of Article 12.3 of the Agreement on Safeguards.
In its view, the Panel should rule that the Domi nican Republic did not give the Members concerned
the possibility of obtaining adequate trade compensation.500
(iv) European Union
7.412 The European Union states that the first sentence of Article XIX:2 of the GATT 1994
contains two separate but related obligations. The first part of this Article lays down the obligation to
give notice in writing; the second the obligation to give exporting Members having an interest the
opportunity to hold consultations with the Member wishing to apply the measure. Both obligations
relate to an action that has not been taken. The European Union also consid ers that, in the event of

496 Dominican Republic, first written submission, paragraphs 550-552. See also preliminary
Section 4.1 of the submission.
497 Colombia, third party written submission, paragraphs 79-80.
498 In the English text, the first sentence of Article XIX:2 of the GATT contains the text corresponding
to the first two sentences in the Spanish and French texts; as a result, when the United States refers to the last
part of the first sentence of Article XIX:2 of the GATT it has to be understood that it is referring to the last part
of the second sentence in the Spanish and French texts.
499 United States, replies to Panel questions Nos. 21 and 22.
500 Panama, third party written submission, paragr aphs 13, 14 and 17; third party statement,
paragraph 5.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

any conflict between Article XIX:2 of the GATT 1994 and Article 12.3 of the Agreement on
Safeguards, the latter provision should prevail.
501
(c) Assessment of the Panel
7.413 The Panel takes note of the following facts, which both parties accept: (i) on 5 October 2010,
the Commission adopted the definitiv e safeguard measure; (ii) on 8 October (three days later), the
Dominican Republic notified WTO Members of the measure; (iii) on 18 October, the notification was
circulated to Members of the WTO; and (iv) on the same day, 18 October, the measure came into
force.
7.414 The Panel is called upon to examine the following questions: (i) whether the
Dominican Republic complied with its notifica tion obligation under the applicable provisions
(Articles XIX:2 of the GATT 1994 and 12 of the Agreement on Safeguards); (ii) whether the
Dominican Republic afforded Members having a substan tial interest in the products investigated the
opportunity to hold consultations in the terms of Articles XIX:2 of the GATT 1994 and 12.3 of the
Agreement on Safeguards; and (iii) whether the Dominican Republic gave the complainants the
opportunity to obtain adequate means of trade co mpensation in the terms of Articles 8.1 of the
Agreement on Safeguards and XIX:2 of the GATT 1994.
(i) Notification of the definitive measure under Article XIX:2 of the GATT 1994
Introductory remarks

7.415 With regard to the first question, concerning the notification obligation in Article XIX:2 of
the GATT 1994, the complainants have stated that Article 12.1 of the Agreement on Safeguards does
not apply for the purposes of their claim. A ccordingly, the complain ants contend that the
Dominican Republic did not notify the safeguard me asure before its adoption, in the terms of
Article XIX:2 of the GATT 1994. The Dominican Republic, for its part, states that both provisions
are relevant when examining this complaint and that there are differences in the text of Article XIX:2
of the GATT 1994 in the three official languages, the implication being that the notice must be given
before the measure is applied (and not before it is adopted). It also points out that Article 12.1(c) of
the Agreement on Safeguards, as well as previous d ecisions by Panels and the Appellate Body that
have examined this provision, apply to the analys is of the obligation under Article XIX:2 of the
GATT 1994.
7.416 Until now, the obligation to notify a safeguard measure under Article XIX:2 of the
GATT 1994 has not been interpreted by WTO Panels or by the Appellate Body. This Panel is called
upon to interpret the scope of this provision in the light of the three official versions of the text.
7.417 As a preliminary remark, the Panel observes th at the obligation on Members to notify their
safeguard measures is based both on Article XIX:2 of the GATT 1994 and Article 12 of the
Agreement on Safeguards. A proper assessment of these obligations, when addressing the present
claim, should therefore take into account both provisions.

501 European Union, replies to Panel questions Nos. 21 and 22.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

Principle of a single whole

7.418 We have already noted above that Article XIX of the GATT 1994 and the Agreement on
Safeguards constitute an inseparable set of righ ts and disciplines that have to be addressed
simultaneously.502
7.419 In view of the foregoing, the Panel will have to interpret the notification obligation under
Article XIX:2 of the GATT 1994 in such a way that it gives meaning to all the terms, not only those
in the GATT but also those in the Agreement on Safeguards. The Panel therefore notes that the
Agreement on Safeguards contains a special provi sion (Article 12, entitled "Notification and
Consultation") which includes several notification ob ligations. This provision in the Agreement on
Safeguards is linked to the obligations to no tify and give Members the opportunity to hold
consultations provided by Article XIX of the GATT 1994.
7.420 Accordingly, the question before the Panel is to determine whether the Dominican Republic
complied with the notification requirement under Ar ticle XIX:2 of the GATT 1994, examined in
conjunction with Article 12 of the Agreement on Safeguards.
7.421 Article 3.2 of the DSU requires panels to clarify the prevailing provisions of the covered
agreements "in accordance with customary rules of in terpretation of public inte rnational law". These
rules include the principles set out in Artic les 31, 32 and 33 of the Vienna Convention. 503 According
to Article 31 of the Vienna Convention, a treaty sha ll be interpreted in good faith in accordance with
the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object
and purpose.
504
7.422 When examining the different official versions of the text of Article XIX:2 of the
GATT 1994, the parties have a different interpreta tion of the moment at which the notification
obligation in this provision becomes effective. Acco rding to the customary rules of interpretation of
treaties in Article 33 of the Vienna Convention, in case of discrepancy between various official texts it
is necessary to seek the meaning that gives effect, simultaneously, to all the terms of the treaty, as
they are used in each authentic language. 505 The WTO's legal texts are e qually authentic in English,
French and Spanish.506

502 See paragraph 7.66 of the present Report.
503 Appellate Body Reports, US – Gasoline, pages 16-18; India – Patents (US) , paragraph 45; US –
Shrimp, paragraph 114; Chile – Price Band System , paragraph 271. See also the Panel Report, China – Raw
Materials, paragraph 7.246.
504 Appellate Body Report, US – Gasoline, p. 17.
505 See also Appellate Body Reports, Chile – Price Band System , paragraph 271; EC – Bed Linen
(paragraph 5 of Article 21 – India), footnote 153 to paragraph 123; US – Softwood Lumber IV, footnote 50 to
paragraph 59; EC – Tariff Preferences, paragraph 147; and US – Upland Cotton, footnote 510 to paragraph
424. For the theory, see also B. Condon, El Derecho de la Organización Mundial de Comercio: Tratados,
Jurisprudencia y Práctica (Spanish only) (Cameron May, 2007), p. 53.
506 Article XVI of the Marrakesh Agreement Es tablishing the WTO and Explanatory Note of
paragraph 2(c)(i) of the GATT 1994.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

Articles XIX:2 of the GATT 1994 and 12 of the Agreement on Safeguards

7.423 The Spanish text of Article XIX:2 of the GATT 1994 provides the following:
de productos determinados

proponga adopter …" (italics added).

7.424 The English text of Article XIX:2 of the GATT 1994 reads as follows:
"Emergency Action on Imports of Particular Products

2. Before any contracting party shall ta ke action pursuant to the provisions of
paragraph 1 of this Article, it shall gi ve notice in writing to the CONTRACTING
PARTIES as far in advance as may be practicable and shall afford the
CONTRACTING PARTIES and those contr acting parties having a substantial
interest as exporters of the product concerned an opportunity to consult with it in
respect of the proposed action …" (italics added).

7.425 The French text of Article XIX:2 of the GATT 1994 reads as follows:
"Mesures d'urgence concernant l'importation de produits particuliers

celles-ci, ainsi qu'aux parties contractant es ayant un intérêt substantiel en tant
qu'elle se propose de prendre …" (italics added).

7.426 The first sentence of Article XIX:2 of the GATT 1994 determines an obligation to notify
before a situation arises. This situation is describ ed in the Spanish text of the General Agreement by
the words "adopte medidas"; in the English by the words "take action"; and in the French text by the
words "prenne des mesures". The words " adopte medidas" in Spanish
507 suggest that the moment at
which the obligation arises is the adoption of a measure. The words " prenne des mesures" in French
and "take action" in English, however, are not clear regarding the moment at which the obligation to

507 The word " adoptar" in Spanish means " tomar resoluciones o acuerdos con previo examen o
deliberación" (take decisions or make ag reements after prior consideration or deliberation). Diccionario de la
Lengua Española, 22nd Ed. (Real Academia Española, 2001), page 33. The word " medida" in Spanish means
"disposición, prevención" (provision, arrangement, precaution). Diccionario de la Lengua Española , 22nd Ed.
(Real Academia Española, 2001), page 1001; R. Villa-Real Molina and M. Á. del Arco Torres, Diccionario de
Términos Jurídicos (Editorial Comares, 1999), page 311.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

notify is triggered. The words "take action"
508 translate into Spanish in one of its meanings as
"emprender acciones judiciales, actuar " (take legal action, act) 509, whereas the words " prenne des
mesures" could be translated as " tomar una medida o decisión judicial " (take a measure or legal
decision).510 From neither the French text nor the English text, however, can it be clearly determined
whether the moment at which the obligation is triggered is the moment of the adoption or the
application of the measure.
7.427 Article 12 of the Agreement on Safeguards, for its part, determines the following:
"Notification and Consultation
1. A Member shall immediately notify the Committee on Safeguards upon:
(a) Initiating an investigatory process relati ng to serious injury or threat thereof
and the reasons for it;
(b) making a finding of serious injury or threat thereof caused by increased
imports; and
(c) taking a decision to apply or extend a safeguard measure.
2. In making the notifications referred to in paragraphs 1(b) and 1(c), the
Member proposing to apply or extend a safeguard measure shall provide the
Committee on Safeguards with all pertinent information, which shall include
evidence of serious injury or threat th ereof caused by increased imports, precise
description of the product involved and the proposed measure, proposed date of
introduction, expected duration and timetable for progressive liberalization. In the
case of an extension of a measure, evidence that the industry concerned is adjusting
shall also be provided. The Council for Trade in Goods or the Committee on
Safeguards may request such additional in formation as they may consider necessary
from the Member proposing to apply or extend the measure.
…

508 In English the word "take" means "seize, grasp, catch". Shorter Oxford English Dictionary, 6th Ed.
(Oxford University Press, 2007), vol. 2, page 3166. "Take" translates into Spanish as " tomar… coger ", Collins
Spanish-English English-Spanish Dictionary , 14th Ed. (1985), page 514, or " tomar, llevar", E. Alcaraz Varó
and B. Hughes, Diccionario de Términos Jurídicos (Editorial Ariel, 2002), page 15). In Spanish the word
"action" means "actuación; trámites (jurídicos), medidas (judiciales), resolución, diligencias", E. Alcaraz Varó
and B. Hughes, Diccionario de Términos Jurídicos (Editorial Ariel, 2002), page 15.
509 Alcaraz Varó, Enrique and Brian Hughes, Diccionario de Términos Jurídicos , Ed. Ariel, 2002,
page 15.
510 In French the word "prendre" means "mettre avec soi ou faire sien" (take to one's self or make one's
own), Le Nouveau Petit Robert (Dictionnaires Le Robert, 2000), page 1978. The word "prendre" translates into
Spanish as " tomar, coger", whereas the words " Prendre des mesures " can be translated as " tomar medidas",
Larousse Grand Dictionnaire, Français Espagnol, 2nd Ed. (Larousse, 1998), pages 430 and 537-538. The word
"mesure" in French means " décision (judiciaire ou administrative) " (legal or admini strative decision),
Vocabulaire Juridique Association Henri Capitant 8th Ed. (Presses Universitaires de France, 2000), page 550.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

4. A Member shall make a notificati on to the Committee on Safeguards before
taking a provisional safeguard measure referre d to in Article 6. Consultations shall
be initiated immediately after the measure is taken ...".

7.428 Article 12.1 of the Agreement on Safeguards indicates three moments at which Members
must notify, each of which corresponds to the moment when one of the events specified in each of its
paragraphs occurs. The Article's chapeau pr ovides that notifications must be made " immediately
upon" the occurrence of one of the triggering events (italics added).
511 Article 12.4 of the Agreement
imposes a fourth obligation to notify, which has to be observed before a provisional safeguard
measure is adopted. The Panel is of the view that Article 12 of the Agreement on Safeguards
identifies four obligations to notify the Committee on Safeguards. 512 Article XIX:2 of the
GATT 1994, on the other hand, only determines one oblig ation to notify. Despite this, the Panel has
already indicated that Articles XIX:2 of the GATT 1994 and 12 of the Agreement on Safeguards have
to be interpreted together and giving meaning to the terms in both provisions.
7.429 In order to define the scope of the notifica tion obligation in Article XIX:2 of the GATT 1994
it is appropriate to begin by considering whethe r such an obligation corresponds to any of the
four notification obligations mentioned in Article 12 of the Agreement on Safeguards. The Panel will
commence by analysing the relevance of interpreti ng Article XIX:2 of the GATT in the light of
Article 12.1(c) of the Agreement on Safeguards, as suggested by the Dominican Republic.
7.430 Both Article XIX:2 of the GATT 1994 and Artic le 12.1(c) of the Agreement on Safeguards
determine obligations to notify safeguard measures.
513 As already indicated, Article XIX:2 of the
GATT 1994 provides that "Before any contracting party shall take action514 pursuant to the provisions
of paragraph 1 of this Article, it shall give notice in writing to the CONTRACTING PARTIES as far
in advance as may be practicable" (italics added). The Spanish text of Article 12.1(c) of the
Agreement on Safeguards, on the other hand, provid es that "Todo Miembro hará inmediatamente una
notificación … cuando adopte la decisión de aplicar … una medida de salvaguard ia." (italics added) .
The English text reads "A Me mber shall immediat ely notify the Committee on Safeguards upon …
taking a decision to apply or extend a safeguard measure ." (italics added) and the French provides
proroger une mesure de sauvegarde." (italics added).
7.431 Both provisions (Article XIX:2 of the GATT 1994 and Article 12.1(c) of the Agreement on
Safeguards) refer to the obligation to notify a defi nitive measure. The words "shall take action" in

511 See Appellate Body Report, US – Wheat Gluten, paragraph 102.
512 These obligations, in chronological order, are triggered at the following moments: (i) when
initiating an investigation; (ii) when adopting a provisional safeguard measure under Article 6 of the Agreement
on Safeguards; (iii) when finding that there is serious injury or threat of serious injury caused by the increase in
imports; and (iv) when taking the decision to apply or extend a safeguard measure.
513 Article XIX:2 of the GATT refers to the ob ligation to notify the CONTRACTING PARTIES.
According to paragraph 2(b) of the GATT 1994, the functions assigned to the CONTRACTING PARTIES in
various provisions of the GATT (including Article XIX) , will be assigned to the Ministerial Conference. The
WTO General Council, in the document entitled "Avoida nce of procedural and institutional duplication",
adopted on 31 January 1995 (WT/L/29), indicated that " If a measure is subject to a notification obligation both
under the WTO Agreement and under the GATT 1947 …, the notification of such a measure to a WTO body
shall, unless otherwise indicated in the notification, be deemed to be also a notification of that measure under
the GATT 1947." Article 12.1 of the Agreement on Safeguards determines the obligation to notify the
Committee on Safeguards.
514 Bearing in mind the differences in this term in the various official language versions of the text.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

Article XIX:2 of the GATT are attenuated by the words " de conformidad con la s disposiciones del
párrafo 1 de este artículo " in the Spanish text (in English "pursu ant to the provisions of paragraph 1
article"). Consequently, the measure referred to in Article XIX:2 of the GATT 1994 is the measure
regulated by Article XIX:1. Reading Article XIX:1 of the GATT 1994 suggests that the measure
referred to is the definitive measure. In the case of Article 12.1(c) of the Agreement on Safeguards,
the measure to be notified is also the definitiv e measure as the obligation is triggered once the
decision to apply or extend the measure has been taken.
515
7.432 Furthermore, as the notification under Ar ticle XIX:2 of the GATT 1994 concerns the
definitive measure, this obligation could not corres pond to any of the other notification obligations
mentioned in Article 12 of the Agreement on Safeguards. 516 Only the notifications referred to in
Articles XIX:2 of the GATT 1994 and 12.1(c) of the Agreement on Safeguards concern a definitive
measure.
7.433 Accordingly, as the complainants indicate, Ar ticle 12.1(c) of the Agreement on Safeguards
determines that the obligation is triggered upon taking a decision to apply the measure (in Spanish the
word is aplicar and in French d'appliquer). The words to apply are similar in the three official
language versions of this provisi on. Nevertheless, as mentioned, Article XIX:2 of the GATT 1994,
read simultaneously in the three official language versions, does not clearly determine at which
moment the obligation to notify is triggered. Conseq uently, the Panel considers that the clarity of the
text of Article 12.1(c) of the Agreement on Safeguards in the three official language versions provides
guidance and throws light on the time at which th e obligation in GATT Article XIX:2 has to be
observed. Article XIX:2 of the GATT 1994, therefore, read in conjunction with Article 12.1(c) of the
Agreement on Safeguards, determines the obligation to notify a definitive measure before it is applied
but not necessarily before it is adopted.
7.434 The Panel will now go on to examine whether the complainants succeeded in making the case
that the Dominican Republic acted inconsiste ntly with the notification obligation under
Articles XIX:2 of the GATT 1994 and 12 of the Ag reement on Safeguards by notifying the definitive
measure on 8 October 2010.
Analysis in the present case

7.435 As already mentioned, the definitive safeguard measure was adopted on 5 October 2010 and
was notified on 8 October517, three days after the measure had been adopted. The definitive safeguard
measure came into effect on 18 October 2010 518, ten days after the Committee on Safeguards had
received the notification from the Dominican Republic.

515 Appellate Body Report, US – Wheat Gluten, paragraph 120.
516 Article 12.1(a) of the Agreement on Safeguards de termines the obligation to notify the initiation of
an investigation and Article 12.4 determines the obliga tion to notify before adopting a provisional measure.
Article 12.1(b), on the other hand, determines the obligation to notify a finding of the existence of serious injury
or threat of serious injury. Depe nding on the mechanism used by each Member for the imposition of safeguard
measures, the time of the event referred to in this last notification (finding of the existence of serious injury or
threat of serious injury) may or may not coincide with the moment at which the definitive measure is adopted.
517 Notification, document G/SG/N/7/DOM/1/Suppl.1 and G/SG/N/8/DOM/1/Suppl.1
(13 October 2010), Exhibit CEGH-19. This document was replaced by document G/SG/N/8/DOM/1/Suppl.2,
G/SG/N/10/DOM/1 and G/SG/N/11/DOM/1/Suppl.1 (18 October 2010), Exhibit CEGH-21.
518 Definitive Resolution, Exhibit CEGH-9.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

7.436 The notification of 8 October 2010 is based on Article 12.1(b) and 12.1(c) of the Agreement
on Safeguards. In this notification, the Domi nican Republic provided in formation on its findings
concerning serious injury and an increase in impor ts, the product concerned, the measure envisaged,
the measure's planned date of introduction and dura tion, the timetable for its liberalization and the
main exporters of the product in question to the Dominican Republic.
519
7.437 In US – Wheat Gluten, in relation to notifications under Article 12.1 of the Agreement on
Safeguards, the Appellate Body indicated that th e degree of urgency or immediacy required depends
on a case-by-case assessment, account being taken of the administrative difficulties involved in
preparing the notification, and also of the character of the information supplied. Nevertheless, the
amount of time taken to prepare the notification mu st be kept to a minimum, as the underlying
obligation is to notify immediately.520 In this particular case, the Appellate Body concluded that
notification within five days (following adoption of the measure) was consistent with the requirement
of immediacy contained in Article 12.1(c) of the Agreement on Safeguards.521
7.438 Taking into account the foregoing, the Panel c onsiders that, as it has been shown that the
Dominican Republic notified the definitive me asure to the WTO Committee on Safeguards on
8 October 2010, three days after its adoption (5 Oc tober 2010), the complainants have not made the
case that the Dominican Republic acted inconsistently with its obligations under Articles XIX:2 of the
GATT 1994 and 12.1(c) of the Agreement on Safeguards.
(ii) Requirement to hold consultations and provid e a means of trade compensation before
imposing a definitive measure
7.439 The complainants put forward two other cl aims regarding the requirement to hold
consultations and to provide a means of trade co mpensation before imposing a definitive measure,
pursuant to Articles XIX:2 of the GATT 1994 and 12.3 and 8.1 of the Agreement on Safeguards, as
consequential claims.522 The way in which the complainants put forward these claims means that they
are linked to the Panel's findings on the claim con cerning notification pursuant to Articles XIX:2 of
the GATT 1994 and 12.1(c) of the Agreement on Safeguards.
7.440 Accordingly, having determined that the comp lainants have not made the case that the
Dominican Republic failed to comply with the notif ication obligation pursuant to Articles XIX:2 of
the GATT 1994 and 12.1(c) of the Agreement on Safe guards, the Panel rejects the complainants'
claim that the Dominican Republic did not give them an opportunity to hold consultations in the terms
provided in Articles XIX:2 of the GATT 1994 and 12.3 of the Agreement on Safeguards.
7.441 Moreover, taking into account the finding concerning the obligation prescribed in Article 12.3
of the Agreement on Safeguards and in the light of the explicit link between the obligations in
Articles 12.3 and 8.1 of the Agreement on Safeguards 523, the Panel considers inappropriate the
complainants' claim (on the assumption that this claim was duly brought before it for consideration524)

519 Exhibits CEGH-19 and CEGH-21.
520 Appellate Body Report, US – Wheat Gluten, paragraphs 105-106.
521 Appellate Body Report, US – Wheat Gluten, paragraph 129 (italics added).
522 Complainants, first written submission, paragraphs 456-458; opening oral statement at the
first meeting of the Panel, paragraph 126; opening oral statement at the second meeting of the Panel,
paragraph 74.
523 See the Appellate Body Reports, US – Wheat Gluten, paragraph 146; and US – Line Pipe,
paragraph 119.
524 See paragraphs 7.98-7.110 of the present Report.
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

that the Dominican Republic did not give the comp lainants an opportunity to obtain an adequate
means of trade compensation in the terms of Articles 8.1 of the Agreement on Safeguards and XIX:2
of the GATT 1994.
F. S
PECIAL AND DIFFERENTIAL TREATMENT
7.442 According to Article 12.11 of the DSU:
"Where one or more of the parties is a developing country Member, the panel's report
shall explicitly indicate the form in wh ich account has been taken of relevant
provisions on differential and more-favour able treatment for developing country
Members that form part of the covered ag reements which have been raised by the
developing country Member in the course of the dispute settlement procedures."

7.443 Article 12.10 of the DSU also provides the following:
"… in examining a complaint against a de veloping country Member, the panel shall
accord sufficient time for the developing c ountry Member to prepare and present its
argumentation".

7.444 In the present proceedings, and except for the cl aim concerning Article 9.1 of the Agreement
on Safeguards on which the Panel has already ruled, none of the parties, neither the complainants nor
the defendant, has referred to any provision in the WTO Agreements on special and differential
treatment for developing countries. In any event, the Panel has taken into account the status of the
parties as developing country Members, particularly when preparing the timetable for the proceedings
after having heard their respective views. Ther e are no other provisions on differential and more
favourable treatment for developing country Me mbers that should be the subject of special
consideration by the Panel.
7.445 The Panel also points out that the Dominican Republic has stated that this dispute could affect
the "inherent and essential flexibility of the WT O's tariff concessions mechanism", according to
which Members are free to raise tariffs up to a level that does not exceed the bound rate.
525 In this
connection the Panel has noted that the findings in this Report do not affect the flexibility given to
WTO Members under the provisions in the GATT 1994 freely to modify their tariffs by adopting new
ordinary customs duties that remain within the level bound in the schedule of concessions. Neither do
they affect the right of WTO Members to impose emergency measures on imports of specific products
and, as a result, to suspend, in whole or in pa rt, obligations under the GATT 1994 with respect to
those products, including the possibility of wit hdrawing or modifying concessions in a manner
consistent with Article XIX of the GATT 1994 and the Agreement on Safeguards.
VIII. CONCLUSIONS AND RECOMMENDATIONS
8.1 For the reasons set out above, the Panel concludes the following:
(a) The Panel rejects the request of the Do minican Republic that it find that the
impugned measures are not covered by Article XIX of the GATT 1994 or the
Agreement on Safeguards and that, therefore, the dispute brought by the
complainants, at least as far as these rules are concerned, is devoid of purpose and, on

525 Dominican Republic, closing statement at the second meeting of the Panel, paragraphs 5-7.
WT/DS415/R,
 WT/DS416/R,
 WT/DS417/R,

the contrary, concludes that the provisions of Article XIX of the GATT 1994 and the
Agreement on Safeguards are applicable to th e examination of the claims put forward
in this dispute;
(b) the Panel does not consider it necessary to rule on the request of the
Dominican Republic that the Panel decline jurisdiction in the present dispute on the
grounds that the complainants are contesti ng the Dominican Republic's application of
a tariff higher that the preferential tariff provided for in regional free trade
agreements, in view of the subsequent statements by the parties;
(c) the Dominican Republic acted inconsistently with its obligations under
Article XIX:1(a) of the GATT 1994 and Articles 3.1, last sentence, 4.2(c) and 11.1(a)
of the Agreement on Safeguards with regard to the findings, in the preliminary and
final determinations, on the unforeseen developments and the effect of the
GATT obligations that were claimed to be the cause of the alleged increase in imports
that caused serious injury;
(d) the Dominican Republic acted inconsistently with its obligations under Articles 2.1
and 4.1(c) of the Agreement on Safeguard s and Article XIX:1(a) of the GATT 1994
with regard to the findings, in the prel iminary and final determinations, on the
definition of the domestic industry;
(e) the complainants have not made the case that the Dominican Republic acted
inconsistently with its obligations under Ar ticles 2.1, 3.1, last sentence, 4.2(a) and
4.2(c) of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 with
regard to the findings, in the preliminary and final determinations, on the increase in
imports;
(f) the Dominican Republic acted inconsistently with its obligations under Articles 2.1,
3.1, last sentence, 4.1(a), 4.2(a) and 4.2(c) of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994 with regard to the findings, in the preliminary
and final determinations, on the existence of serious injury;
(g) the complainants have not made the case that the Dominican Republic acted
inconsistently with its obliga tions under Articles 2.1, 2.2, 3.1, 4.2, 6 and 9.1 of the
Agreement on Safeguards by failing to conduct a new analysis in order to determine
the increase in imports, injury and the causal link when excluding imports from
Colombia, Indonesia, Mexico and Panama;
(h) the Dominican Republic acted inconsistently with its obligations under Article 9.1 of
the Agreement on Safeguards by failing to take all reasonable measures available to it
to exclude Thailand from the application of the provisional and definitive safeguards
measures; and
(i) the complainants have not made the case that the Dominican Republic acted
inconsistently with its obligations under Articles XIX:2 of the GATT 1994 and
12.1(c) of the Agreement on Safeguards wh en notifying the definitive measure, or
that the Dominican Republic failed to give them an opportunity for consultations in
the terms provided in Articles XIX:2 of the GATT 1994 and 12.3 of the Agreement
on Safeguards, or that the Dominican Republic failed to give them an opportunity to
WT/DS415/R,
WT/DS416/R,
WT/DS417/R,

obtain an adequate means of trade compensa tion in the terms of Articles 8.1 of the
Agreement on Safeguards and XIX:2 of the GATT 1994.
8.2 Pursuant to Article 3.8 of the DSU, in cases of failure to comply with obligations assumed
under a covered agreement the measu re is considered prima facie to constitute a case of nullification
or impairment of the benefits accruing from that agr eement. Consequently, we find that, to the extent
that it acted inconsistently with certain provisions of the GATT 1994 and the Agreement on
Safeguards, the Dominican Republic nullified or impaired benefits accruing to the complainants under
those Agreements.
8.3 In accordance with Article 19.1 of the DSU a nd having found that the Dominican Republic
acted inconsistently with certain provisions of the GATT 1994 and the Agreement on Safeguards, as
described above, we recommend that the Dominican Republic bring its measures into conformity with
its obligations under those Agreements.