INDONESIA – SAFEGUARD ON CERTAIN IRON OR STEEL PRODUCTS REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 18 August 2017
Document codes: WT/DS490/R; WT/DS496/R
Complainant: Taiwan
Respondent: Indonesia
Third parties: Australia, China, EU, India, Japan, Russia, Ukraine, Vietnam, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. XIX:1  GATT 1994Art. 3.1, 2.1, 4.2(a), 4.2(c), 4.2(b)  SafeguardsArt. I:1  GATT 1994Art. 12.2  SafeguardsArt. XIX:2  GATT 1994Art. 12.3  Safeguards

INDONESIA – SAFEGUARD ON CERTAIN IRON OR STEEL PRODUCTS
REPORT OF THE PANEL
 •

LIST OF ANNEXES
ANNEX A
INTERIM REVIEW AND WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel A-2
Annex A-2 Additional Working Procedures of the Panel concerning Business Confidential
Information
A-7
Annex A-3 Interim Review A-9
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of the complainants B-2
Annex B-2 Integrated executive summary of the arguments of Indonesia B-25
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Australia C-2
Annex C-2 Integrated executive summary of the arguments of the European Union C-4
Annex C-3 Integrated executive summary of the arguments of Japan C-7
Annex C-4 Integrated executive summary of the arguments of Ukraine C-10
Annex C-5 Integrated executive summary of the arguments of the United States C-12
 •

CASES CITED IN THIS REPORT
Short title Full case title and citation
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear, , adopted 12 January 2000, DSR 2000:I, p. 515
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear,
, adopted 12 January 2000, as modified by Appellate Body
Report , DSR 2000:II, p. 575
Argentina – Preserved Peaches Panel Report, Argentina – Definitive Safeguard Measure on Imports of
Preserved Peaches, , adopted 15 April 2003, DSR 2003:III,
p. 1037
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive
Industry, , , adopted 19 June 2000,
DSR 2000:VI, p. 2985
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to
Certain Agricultural Products, WT/DS207/R, adopted 23 October 2002, as
modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile
Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted
12 January 2009, DSR 2009:I, p. 3
Dominican Republic –
Safeguard Measures
Panel Report, Dominican Republic – Safeguard Measures on Imports of
Polypropylene Bags and Tubular Fabric, WT/DS415/R, WT/DS416/R,
WT/DS417/R, WT/DS418/R, and Add.1, adopted 22 February 2012,
DSR 2012:XIII, p. 6775
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, p. 135
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of
Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000,
DSR 2000:I, p. 3
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain
Dairy Products, WT/DS98/R and Corr.1, adopted 12 January 2000, as
modified by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, p. 49
Turkey – Textiles Appellate Body Report, Turkey – Restrictions on Imports of Textile and
Clothing Products, WT/DS34/AB/R, adopted 19 November 1999,
DSR 1999:VI, p. 2345
Ukraine – Passenger Cars Panel Report, Ukraine – Definitive Safeguard Measures on Certain Passenger
Cars, WT/DS468/R and Add.1, adopted 20 July 2015
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on
Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted
5 November 2001, DSR 2001:XII, p. 6027
US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of
Gambling and Betting Services, WT/DS285/R, adopted 20 April 2005, as
modified by Appellate Body Report WT/DS285/AB/R, DSR 2005:XII, p. 5797
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and
Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I,
p. 3
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051
US – Lamb Panel Report, United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/R,
WT/DS178/R, adopted 16 May 2001, as modified by Appellate Body Report
WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, p. 4107
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
WT/DS490/R • WT/DS496/R

Short title Full case title and citation
US – Line Pipe Panel Report, United States – Definitive Safeguard Measures on Imports of
Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/R, adopted
8 March 2002, as modified by Appellate Body Report WT/DS202/AB/,
DSR 2002:IV, p. 1473
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp
and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998,
DSR 1998:VII, p. 2755
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003,
DSR 2003:VII, p. 3117
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports of
Certain Steel Products, WT/DS248/R and Corr.1 / WT/DS249/R and Corr.1 /
WT/DS251/R and Corr.1 / WT/DS252/R and Corr.1 / WT/DS253/R and
Corr.1 / WT/DS254/R and Corr.1 / WT/DS258/R and Corr.1 / WT/DS259/R
and Corr.1, adopted 10 December 2003, as modified by Appellate Body
Report WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R,
WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R,
WT/DS259/AB/R, DSR 2003:VIII, p. 3273
US – Tyres (China) Appellate Body Report, United States – Measures Affecting Imports of
Certain Passenger Vehicle and Light Truck Tyres from China,
WT/DS399/AB/R, adopted 5 October 2011, DSR 2011:IX, p. 4811
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Wheat Gluten from the European Communities, WT/DS166/AB/R,
adopted 19 January 2001, DSR 2001:II, p. 717
US – Wheat Gluten Panel Report, United States – Definitive Safeguard Measures on Imports of
Wheat Gluten from the European Communities, WT/DS166/R, adopted
19 January 2001, as modified by Appellate Body Report WT/DS166/AB/R,
DSR 2001:III, p. 779
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997,
and Corr.1, DSR 1997:I, p. 323
WT/DS490/R • WT/DS496/R

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
ASEAN Association of Southeast Asian Nations
BEP Break Even Point
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
FTA Free trade agreement
GATT 1994 General Agreement on Tariffs and Trade 1994
HS Harmonized System
KPPI Komite Pengamanan Perdagangan Indonesia
MFN most-favoured-nation
POI Period of investigation
Rp Indonesian Rupiah
RTA Regional trade agreement
S&D Special and differential treatment
Vienna Convention Vienna Convention on the Law of Treaties, Do ne at Vienna, 23 May 1969,
1155 UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization
WT/DS490/R • WT/DS496/R

1 INTRODUCTION
1.1 Complaints by Chinese Taipei and Viet Nam
1.1. On 12 February 2015, the Separate Customs Territory of Taiwan, Penghu, Kinmen , and
Matsu (Chinese Taipei) requested consultations with Indonesia pursuant to Articles 1 and 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.1 On 1 June 2015, Viet Nam requested consultations with Indonesia pursuant to the
same provisions.2
1.2. In both complaints, the measures subject to consultations were described as the following3:
a. The specific duty imposed by Indonesia as a safeguard measure on imports of flat -rolled
product of iron or non-alloy steel, of a width of 600 mm or more, clad, plated , or coated
with aluminium -zinc alloys, containing by weight less than 0.6% of carbon, with a
thickness not exceeding 1.2mm, under Harmonized System (HS) code 7210.61.11.00.
b. Indonesia's notification to the WTO Committee on Safeguards of the finding of threat of
serious injury caused by increased imports and of a proposal to impose a safegua rd
measure.
c. Indonesia's failure to provide an opportunity for consultations on relevant information
related to the safeguard measure, including on the proposed measure and its date of
introduction prior to the actual imposition of the measure.
1.3. Consultations were held between Chinese Taipei and Indonesia on 16 April 2015, and
between Viet Nam and Indonesia on 28 July 2015. The consultations failed to resolve the disputes.
1.2 Panel establishment and composition
1.4. Chinese Taipei and Viet Nam each requested, respec tively on 20 August 2015 and
15 September 2015, the establishment of a panel pursuant to Articles 4.7 and 6 of the DSU,
Article 14 of the Agreement on Safeguards, and Article XXIII of the GATT 1994.4
1.5. At its meeting on 28 September 2015, the Dispute Settleme nt Body (DSB) established a
panel pursuant to Chinese Taipei's request in document WT/DS490/2, in accordance with Article 6
of the DSU. 5 At its meeting on 28 October 2015, the DSB established another panel pursuant to
Viet Nam's request in WT/DS496/3, in accordance with Article 6 of the DSU. At the same meeting,
the DSB decided that the panel established at its meeting of 28 September 2015 in WT/DS490
would also examine the dispute in WT/DS496, in accordance with Article 9.1 of the DSU.6
1.6. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the disputes, the matter referred to the DSB by the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu in docum ent WT/DS490/2 and
Viet Nam in document WT/DS496/3, and to make such findings as will assist the DSB

1 Chinese Taipei's request for consultations, WT/DS490/1 (Chinese Taipei's consultations request).
2 Viet Nam's request for consultations, WT/DS496/1 (Viet Nam's consultations request).
3 Chinese Taipei's consultations request, para. 5; and Viet Nam's consultations request, para. 5.
4 Chinese Taipei's request for the establishment of a panel, WT/DS490/2 (Chinese Taipei's panel
request); and Viet Nam's request for the establishment of a panel, WT/DS496/3 (Viet Nam's panel request).
5 DSB, Minutes of the meeting held in the Centre William Rappard on 28 September 2015 (circulated
23 November 2015), WT/DSB/M/368.
6 DSB, Minutes of the meeting held in the Centre William Rappard on 28 October 2015 (circulated
20 January 2016), WT/DSB/M/369.
WT/DS490/R • WT/DS496/R

in making the recommendations or in giving the rulings provided for in those
agreements.7
1.7. On 1 December 2015, Chinese Taipei and Viet Nam requested the Dir ector-General to
determine the composition of the Panel, pursuant to Article 8.7 of the DSU. On 9 December 2015,
the Director-General composed the Panel as follows:
Chairperson: Ms Luz Elena Reyes de la Torre
Members: Mr José Pérez Gabilondo
 Mr Guillermo Valles
1.8. Australia, Chile, China, the European Union, India, Japan, Korea, the Russian Federation,
Ukraine, and the United States reserved their rights to participate in the Panel proceedings as
third parties. In addition, Chinese Taipei reserved its right to participate in the Panel proceedings
of DS496 as a third party, and Viet Nam reserved its right to participate in the Panel proceedings
of DS490 as a third party.8
1.3 Panel proceedings
1.3.1 General
1.9. The Panel began its work on this case later than it would have wished due to staff constraints
in the WTO Secretariat. 9 After consultation with the parties, the Panel adopted its Working
Procedures10 and timetable on 1 July 2016 , and additional procedures for the protection of
Business Confidential Information (BCI) on 22 July 2016 .11 The Pa nel revised its timetable on
22 July and 19 December 2016, and again on 1 May 2017.
1.10. The Panel met with the parties on 5 -6 October 2016 and 16 December 2016, and with the
third parties on 6 October 2016.
1.11. The Panel submitted its interim report to the parties on 5 April 2017 and submitted its final
report to the parties on 18 May 2017.
2 FACTUAL ASPECTS
2.1 The measures at issue
2.1. This dispute concerns the specific duty applied by Indonesia on imports of g alvalume defined
as, flat-rolled products of iron or non -alloy steel, of a width of 600 mm or more, clad, plated , or
coated with aluminium-zinc alloys, containing by weight less than 0.6% of carbon, with a thickness
not exceeding 0.7mm, under HS code 7210.61.11.00. The specific duty was imposed following an
investigation initiated and conducted under Indonesia's domestic safeguards legislation by
Indonesia's competent authority (Komite Pengamanan Perdagangan Indonesia, or KPPI).
2.2. The specific duty was adopted for a period of three years pursuant to
Regulation No. 137.1/PMK.011/2014 of the Minister of Finance of the Republic of Indonesia, which
entered into force on 22 July 2014. 12 Indonesia applies the specific duty to imports of galvalume
from all sources, with the exception of 120 allegedly deve loping countries listed in Indonesia's

7 Indonesia – Safeguard on Certain Iron or Steel Products, constitution note of the Panel, WT/DS490/3
WTDS496/4, para. 2.
8 Indonesia – Safeguard on Certain Iron or Steel Products, constitution note of the Panel, WT/DS490/3
WTDS496/4, para. 5.
9 Communication from the Panel (circulated 13 June 2016), WT/DS490/4 WT/DS496/5.
10 See the Panel's Working Procedures in Annex A-1.
11 See the Panel's Additional Working Procedures on Business Confidential Information in Annex A-2.
12 Regulation of the Minister of Finance of the Republic of Indonesia No. 137.1/PMK.011/2014 on
imposition of safeguarding duty against the import of flat-rolled products of iron or non-alloy steel
(22 July 2014), (Exhibits IDN-20 (translated version) and VNM/TPKM-4 (both original and translated
versions)).
WT/DS490/R • WT/DS496/R

notification to the WTO Committee on Safeguards under Article 9.1 of the Agreement on
Safeguards.13 The following table sets out the precise amounts and the timetable of application of
the specific duty that was notified to the WTO Committee on Safeguards.
Table 1: Timetable of the Safeguard Duty
Period Duty
22 July 2014 - 21 July 2015 Rp 4,998,784 per ton
22 July 2015 - 21 July 2016 Rp 4,314,161 per ton
22 July 2016 - 21 July 2017 Rp 3,629,538 per ton
 Source: Committee on Safeguards, Notification Under Articles 9, 12.1(b), and 12.1(c) of the
Agreement on Safeguards (28 July 2014), G/SG/N/8/IDN/16/Suppl.1,
G/SG/N/10/IDN/16/Suppl.1, G/SG/N/11/IDN/14, (Exhibit TPKM/VNM-5), p. 2
2.3. Indonesia has no binding tariff obligation with respect to galvalume inscribed into its
Schedule of Concessions for the purpose of Article II of the GATT 1994. At the time of the request
for consultations, the duty rate applied by Indonesia on imports of galvalume on a
most-favoured-nation (MFN) basis was 12.5%. This MFN -rate was increased to 20% in
May 2015.14 Indonesia applies duty rates ranging from 0% to 12.5% on imports of galvalume from
its trading partners under four separate regional trade agreements (RTAs) – the As sociation of
Southeast Asian Nations (ASEAN) -China Free Trade Agreement (12.5%), the ASEAN -Korea Free
Trade Agreement (10%), the ASEAN Trade in Goods Agreement (0%) and the Indonesia -Japan
Economic Partnership Agreement (12.5%).15 The specific duty that is at issue in this proceeding is
applied in addition to the existing MFN and preferential duty rates.16
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 Chinese Taipei and Viet Nam ("Complainants")17
3.1. The complainants request the Panel to find as follows:
a. That the specific duty is a safeguard measure within the meaning of Article 1 of the
Agreement on Safeguards, which Indonesia adopted and applied inconsistently with the
following obligations:
i. Article XIX:1(a) of the GATT 1994 and Article 3.1 of the Agreement on Safeguards
because KPPI failed to demonstrate the existence of "unforeseen developments" ,
"the effect of the [GATT] obligations" and the "logical connection " between these
two elements and the increase in imports that allegedly caused serious injury;
ii. Article XIX:1(a) of the GATT 1994 and Articles 2.1 and 3.1 of the Agreement on
Safeguards (and, consequently, Articles 4.2(a) and 4.2(c) of the Agreement on
Safeguards) because KPPI's determination of increased imports was not based on an
increase in imports that is "recent enough";
iii. Article XIX:1(a) of the GATT 1994 and Articles 2.1, 3.1, 4.2(a) , and 4.2(c) of the
Agreement on Safeguards because KPPI failed to provide a reasoned and adequate

13 Committee on Safeguards, Notification Under Articles 9, 12.1(b), and 12.1(c) of the Agreement on
Safeguards (28 July 2014), G/SG/N/8/IDN/16/Suppl.1, G/SG/N/10/IDN/16/Suppl.1, G/SG/N/11/IDN/14,
(Exhibit TPKM/VNM-5), pp. 2 and 3.
14 Regulation of the Minister of Finance of the Republic of Indonesia No. 97/PMK.010/2015,
(Exhibit TPKM/VNM-40).
15 Final Disclosure Report concerning the importation of flat-rolled products of iron or non-alloy under
HS code 7210.61.11.00 (Final Disclosure Report), (Exhibits IDN-8 (both original and translated versions) and
VNM/TPKM-1 (translated version)), Table 3 and para. 30.
16 Indonesia's response to Panel question No. 53; complainants' comments on Indonesia's response to
Panel question No. 53.
17 Throughout the proceeding, Chinese Taipei and Viet Nam have advanced almost identical claims, and
made common submissions, oral statements, and answers to Panel questions. In this Report, claims not
advanced by both complainants are identified.
WT/DS490/R • WT/DS496/R

explanation of how the facts support the determination of threat of serious injury,
including the evaluation of all relevant serious injury indicators;
iv. Article 4.1(b) of the Agreement on Safeguards (Viet Nam only) because KPPI's
finding of threat of serious injury is inconsistent with the definition of "threat of
serious injury" under that provision;
v. Article XIX:1(a) of the GATT 1994 and Articles 2.1, 3.1, 4.2(b), and 4.2(c) of the
Agreement on Safeguards because KPPI failed to establish a causal link and to
conduct a proper non-attribution analysis in accordance with these provisions;
vi. Articles 2.1, 3.1, 4.2(a) , and 4.2(b) of the Agreement on Safeguards because KPPI
failed to observe the required "parallelism" by applying the specific duty to a product
that is different from the product that was the subject of its investi gation, and failed
to provide a reasoned and adequate explanation thereof;
vii. Article I:1 of the GATT 1994 because KPPI excluded from the application of the
specific duty products originating in the countries li sted in the Annex to
Regulation No. 137.1/PMK.011/2014, and not according that exemption immediately
and unconditionally to like products originating in the territory of some Members,
including the complainants;
viii. Article 12.2 of the Agreement on Safeguards because Indonesia failed to provide "all
pertinent information" in the notification s of the finding of threat of serious injury
and the proposal to impose a safeguard measure to the WTO Committee on
Safeguards; and
ix. Article XIX:2 of the GATT 1994 and Article 12.3 of the Agreement on Safeguards
because I ndonesia failed to provide a reasonable opportunity to hold prior
consultations.
b. That, were the Panel to find that the specific duty is not a safeguard measure within the
meaning of Article 1 of the Agreement on Safeguards, the specific duty is, in any case,
inconsistent with Indonesia's obligations under Article I:1 of the GATT 1994 to the extent
it is applied in a manner that discriminates between sources of imports of galvalume.
3.2. Accordingly, the complainants request the Panel to recommend that Indonesia bring its
measures into conformity with the above-cited provisions of the GATT 1994 and the Agreement on
Safeguards and, furthermore, that the Panel exercise its discretion under Article 19 of the DSU and
suggest that Indonesia do so by withdrawing the specific duty.
3.2 Indonesia
3.3. Indonesia requests the Panel to find that the specific duty is a safeguard measure within the
meaning of Article 1 of the Agreement on Safeguards, which Indonesia adopted and applied
consistently with its obligations under the GATT 1994 and the Agreement on Safeguards.
3.4. To the extent that the Panel may find that the specific duty is not a safeguard measure within
the meaning of Article 1 of the Agreement on Safeguards, Indonesia requests that the Panel
dismiss the entirety of the complainants' claims under the Agreement on Safeguards.
3.5. Finally, in the event that the Panel were to find that Indonesia has failed to comply with its
obligations under the GATT 1994 and/or the Agreement on Safeguards, Indonesia asks t he Panel
to reject the co mplainants' request for the Panel to suggest that the only manner in which
Indonesia may bring its measures into conformity with its obligations is by immediately
withdrawing the specific duty, leaving Indonesia the discretion to choose the means by which to
implement the Panel's recommendation.
WT/DS490/R • WT/DS496/R

4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties, as described in the executive summaries of the submissions
made throughout the course of this proceeding , are attached to this Report as annexes (see
Annexes B-1 and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of the third parties, as described in the executive summaries of their
submissions, are attached to this Report as annexes (see Annexes C -1 to C-5). Third parties that
filed third -party submissions w ere the European Union, Japan, and Ukraine. Third parties that
made oral statements at the meeting with the Panel were Australia, the European Union, Japan,
Ukraine, and the United States.
6 INTERIM REVIEW
6.1. On 5 April 2017, the Panel issued its Interim Repor t to the parties. On 13 April 2017, the
complainants and Indonesia each submitted written requests for the Panel to review precise
aspects of the Interim Report. Neither party requested an inte rim review meeting. On
27 April 2017, both parties submitted comments on the other party's requests for review.
6.2. The parties' requests made at the interim review stage as well as the Panel's discussion and
disposition of those requests are set out in Annex A-3.
7 FINDINGS
7.1 Standard of review, treaty interpretation, and burden of proof
7.1.1 Standard of review
7.1. The Agreement on Safeguards is silent as to the standard of review to be applied by panels in
reviewing the WTO -consistency of safeguard measures . However, it is well established that the
general standard of review contain ed in Article 11 of the DSU is applicable to disputes involving
claims of violation of the Agreement on Safeguards and Article XIX of the GATT 1994.18
7.2. Article 11 of the DSU specifies that a panel must make an objective assessment of the matter
before it, in cluding an objective assessment of the facts of the case and the applicability of and
conformity with the relevant covered agreements.19 As applied in disputes involving complaints
brought under the Agreement on Safeguards, this standard has been interpreted to mean that:
[P]anels must examine whether the competent authority has evaluated all relevant
factors; they must assess whether the competent authority has examined 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 complexities of
the data and responds to other plausible interpretations of the data. However, panels
must not conduct a de novo review of the evidence nor substitute their judgement for
that of the competent authority.20

18 See, e.g. Appellate Body Reports, Argentina – Footwear (EC), para. 120; and US – Lamb,
paras. 100-102; and Panel Report, Dominican Republic – Safeguard Measures, para. 7.4.
19 Article 11 of the DSU provides in relevant part that: "[t]he function of panels is to assist the DSB in
discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel
should make an objective assessment of the matter before it, including an objective assessment of the facts of
the case and the applicability of and conformity with the relevant covered agreements, and make such other
findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the
covered agreements".
20 Appellate Body Report, US – Cotton Yarn, para. 74 (referring at paras. 71-73 to Appellate Body
WT/DS490/R • WT/DS496/R

7.3. Thus, a panel's examina tion of a competent authority's determination in a safeguard
proceeding must involve neither a de novo review nor "total deference" to the competent
authority's determination.21 Rather, a panel is required to assess whether the competent authority
has examined all relevant facts and provided a reasoned and adequate explanation as to how the
facts support its determination.22 A panel can make this assessment:
[O]nly if the panel critically examines that explanation, in depth, and in the light of
the facts before the panel. Panels must, therefore, review whether the competent
authorities' explanation fully addresses the nature, and, especially, the complexities,
of the data, and responds to other plausible interpretations of that data. A panel must
find, in particular, that an explanation is not reasoned, or is not adequate, if some
alternative explanation of the facts is plausible, and if the competent
authorities' explanation does not seem adequate in the light of that alternative
explanation.23
7.4. Article 3.1, last sentence, requires competent authorities to publish a report setting forth
their findings and reasoned conclu sions reached on all pertinent issues of fact and law. Similarly,
Article 4.2(c) requires competent authorities to publish promptly, in accordance with the provisions
of Article 3, a detailed analysis of the case under investigation as well as a demonstrat ion of the
relevance of the factors examined.
It is precisely by "setting forth findings and reasoned conclusions on all pertinent
issues of fact and law ", under Article 3.1, and by providing "a detailed analysis of the
case under investigation as well as a demonstration of the relevance of the factors
examined", under Article 4.2(c), that competent authorities provide panels with the
basis to "make an objective assessment of the matter before it " in accordance with
Article 11. … [A] panel may not conduct a de novo review of the evidence or
substitute its judgement for that of the competent authorities. Therefore, t he
"reasoned conclusions" and "detailed analysis" as well as "a demonstration of the
relevance of the factors examined" that are contained in th e report of a competent
authority, are the only bases on which a panel may assess whether a competent
authority has complied with its obligations under the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994.24
7.5. Thus, a panel's assessment of whether a competent authority's determinations are consistent
with the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994 must be based on the
relevant report published by that authority.25
7.6. Panels should not be "left to 'deduce for themselves' from th e report of that competent
authority the 'rationale for the determinations from the facts and data contained in the report of
the competent authority'". 26 The explanations contained in a competent authority's published
report must be "explicit", "clear and unambiguous", and must not "merely imply or suggest an
explanation".27
7.7. Where there is no reasoned and adequate explanation apparent in the published report to
support a competent authority's determinations, "the panel has no option but to find that the
competent authority has not performed the analysis correctly". 28 This implies that reasoning,
analysis and demonstrations provided after publication of the report – i.e. ex post explanations –

21 Appellate Body Reports, US – Lamb, para. 101; US – Tyres (China), para. 123; US – Cotton Yarn,
22 Appellate Body Reports, US – Lamb, para. 103; US – Line Pipe, para. 217; and US – Steel
Safeguards, paras. 296 and 297.
23 Appellate Body Report, US – Lamb, para. 106 (emphasis original). See also Appellate Body Report,
US – Steel Safeguards, para. 276.
24 Appellate Body Report, US – Steel Safeguards, para. 299. (fn omitted)
25 See, e.g. Appellate Body Reports, US – Steel Safeguards, para. 299; and US – Lamb, para. 105; and
Panel Report, Dominican Republic – Safeguard Measures, para. 7.9.
26 Appellate Body Report, US – Steel Safeguards, para. 288.
27 Appellate Body Reports, US – Steel Safeguards, paras. 296 and 297; and US – Line Pipe, para. 217.
28 Appellate Body Report, US – Steel Safeguards, para. 303.
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are irrelevant and cannot be relied upon to remedy any deficiencies of the competent
authorities' determinations.
7.1.2 Treaty interpretation
7.8. Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of
interpretation of public international law". It is generally accepted that the principles codified in
Articles 31 and 32 of the Vienna Convention are such customary rules.29
7.1.3 Burden of proof
7.9. The general principles applicable to the allocation of the burden of proof in WT O dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim. 30 Therefore, in this dispute, Chinese Taipei and Viet Nam bear the burden of
demonstrating that the challenged measures are inconsistent with Indonesia's obligations under
the relevant WTO coverage agreements . A complaining party will satisfy its burden when it
establishes a prima facie case, namely a case which, in the absence of effective refutation by the
defending party, requires a panel, as a matter of law, to rule in favour of the complaining party. 31
It is generally for each party asserting a fact to provide proof thereof.32
7.2 Introduction
7.10. A fundamental question that arises in this disput e is whether the specific duty applied by
Indonesia on imports of galvalume pursuant to Regulation No. 137.1/PMK.011/2014 is a
"safeguard measure" within the meaning of Article 1 of the Agreement on Safeguards. Although
both sides maintain, albeit for somewhat different reaso ns, that the challeng ed measure is a
safeguard measure within the scope of the Agreement on Safeguards, their arguments have led us
to conclude, in discharging our duty to undertake "an objective assessment of the matter" 33, that
we must examine this issue for ourselves, rather than simply proceeding on the basis of the
parties' concurring positions. Having done so, we have come to the conclusion that the s pecific
duty at issue in this dispute is not a "safeguard measure" within the meaning of Article 1 of the
Agreement on Safeguards. We explain the reasons for arriving at this conclusion in the section that
follows, before evaluating the mer its of the complainants' alternative claim that Indonesia's
application of the specific duty, as a stand -alone measure, is inconsistent with Article I:1 of the
GATT 1994.
7.11. While we do not take a position with respect to the merits of the complainants' claims
against the specific duty, as a safeguard measure , we address their specific allegations of
inconsistency with the Agreement on Safeguard s and Articles XIX:1(a) and XIX:2 of the
GATT 1994 in the final section of our findings , where we identify facts relevant to an evaluation of
their claims as they pertain to KPPI's findings, the conduct of KPPI's investigation and Indonesia's
decision to impose the specific duty. However, in the light of our conclusion that the specific duty
is not a safeguard measure, we do not go on to consider the legal merits of those claims.34

29 Appellate Body Report, US – Gasoline, pp. 16-18.
30 Appellate Body Report, US – Wool Shirts and Blouses, p. 16.
31 Appellate Body Report, EC – Hormones, para. 104.
32 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
33 We note, in particular, that our duty under Article 11 of the DSU includes the obligation to make an
objective assessment of the applicability of the covered agreements invoked in this dispute. Indeed, "the
'fundamental structure and logic' of a covered agreement may require panels to determine whether a measure
falls within the scope of a particular provision or covered agreement before proceeding to assess the
consistency of the measure with the substantive obligations imposed under that provision or covered
agreement". (Appellate Body Report, China – Auto Parts, para. 139). See, further, e.g. Panel Reports,
Dominican Republic – Safeguard Measures, para. 7.58; and US – Gambling, para. 6.250; and Appellate Body
34 See further below, paras. 7.45-7.47.
WT/DS490/R • WT/DS496/R

7.3 Whether the specific duty on imports of galvalume constitute s a "safeguard
measure" within the meaning of Article 1 of the Agreement on Safeguards
7.3.1 Definition of a safeguard measure
7.12. Article 1 of the Agreement on Safeguards specifies that "safeguard measures" "shall be
understood to mean those measures provided for in Article XIX o f GATT 1994". The text of
Article XIX:1(a), which is the relevant subparagraph of Article XIX in this context, reads as follows:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a contracting party under this Agre ement, 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 withdraw or modify the concession.35
7.13. It is apparent from this language that the "measures provided for" in Article XIX:1(a) are
measures that suspend a GATT obligation and/or withdraw or modify a GATT concession , in
situations where, as a result of a Member's WTO commitment s and developments that were
"unforeseen" at the time that it undertook those commitments, a product "is being imported" into
a Member's territory in "such increased quantities and under such conditions as to cause or
threaten serious injury to domestic pr oducers of like or directly competitive products". 36 The text
of Article XIX:1(a) also makes clear that such measures must result in the suspension, withdrawal,
or modification of a GATT obligation or concession for a particular purpose – that is, they must
operate "to the extent and for such a time as may be necessary to prevent or remedy such injury".
7.14. Thus, not any measure suspending, withdrawing or modifying a GATT obligation or
concession will fall within the scope of Article XIX:1(a). Rather, it is onl y measures suspending,
withdrawing, or modifying a GATT obligation or concession that a Member finds it must be
temporarily released from in order to pursue a course of action necessary to prevent or remedy
serious injury that will constitute "safeguard me asures". For example, where all of the conditions
for the imposition of a "safeguard measure" have been satisfied, a Member may choose to suspend
its obligations under Article XI of the GATT 1994 for a period of time and restrict the volume of
imports to a level that prevents or remedies serious injury to its domestic industry in a way that
would otherwise be inconsistent with the prohibition on the application of quantitative restrictions
in that Article. The suspension of the imposing Member's obligations under Article XI in this
manner would allow it to "re -adjust temporarily the balance in the level of concessions between
that Member and other exporting Members" 37 to prevent or remedy serious injury. In the absence
of an obligation preventing a Member's remedial action, there would be obviously no need for that
Member to be released from a WTO commitment and, therefore, nothing to "re-adjust
temporarily".
7.15. It follows, therefore, that one of the defining features of the "measures provided for" in
Article XIX:1(a) (i.e. safeguard measures) is the suspension, withdrawal, or modification of a GATT
obligation or concession that precludes a Member from imposing a measure to the extent
necessary to prevent or remedy serious injury , in a situation where all of the conditions for the
imposition of a safeguard measure are satisfied.
7.16. We note that certain findings of the panel in Dominican Republic – Safeguard Measures
suggest that the "measures provided for" in Article XIX:1(a) may be defined by an additional
characteristic. In particular, the panel in that dispute found that the words "obligation" and
"concession" in the last part of Article XIX:1(a) refer to the "obligations" and "concessions" in the
first part of Article XIX:1(a) 38, implying that Article XIX:1(a) con templates the suspension of a

35 Emphasis added.
36 Appellate Body Reports, Argentina – Footwear (EC), paras. 93 and 94; and Korea – Dairy,
paras. 86 and 87.
37 Appellate Body Reports, Argentina – Footwear (EC), para. 94; and Korea – Dairy, para. 87.
38 Panel Report, Dominican Republic – Safeguard Measures, para. 7.64.
WT/DS490/R • WT/DS496/R

GATT obligation or concession the effect of which has in some way resulted in the increased
imports causing or threatening to cause serious injury. The complainants agree with this
implication, stating that "under Article XIX: 1(a), a WTO Member may suspend a GATT obligation,
provided that it has demonstrated that the effect of this obligation resulted in an increase in
imports that caused or threatened to cause serious injury to its domestic industry". 39 Indonesia,
however, argues that the GATT obligation an importing Member chooses to suspend "might not"
always have to be the same obligation that results in increased imports.40
7.17. We do not believe it is necessary for us to make a finding on this interpretative issue in
order to re solve this dispute. We are satisfied that our analysis of the merits of the
parties' arguments can proceed on the basis of the understanding of the term "safeguard
measures" we have set out above – that is, that one of the defining features of a safeguard
measure is the suspension, withdrawal , or modification of a GATT obligation or concession that
precludes a Member from imposing a measure to the extent necessary to prevent or remedy
serious injury, in a situation where all of the conditions for the imposi tion of a safeguard measure
are satisfied.
7.3.2 The specific duty at issue does not suspend, withdraw, or modify a relevant GATT
obligation for the purpose of remedying or preventing serious injury
7.3.2.1 No binding WTO tariff obligation with respect to imports of galvalume
7.18. As described above41, Indonesia has no binding tariff obligation with respect to galvalume in
its WTO Schedule of Concessions. This means that, as far as its oblig ations under Article II of
GATT 1994 are concerned, Indonesia is free to impose any am ount of duty it deems appropriate
on imports of galvalum e, including the specific duty applied thro ugh the operation of
Regulation No. 137.1/PMK.011/2014. Indonesia recognizes this fact, noting repeatedly that the
absence of a binding tariff obligation mea ns that Indonesia is "free to impose, increase, [or]
reduce any tariff towards the product concerned at any time for any period of time". 42 Indeed,
after the imposition of the specific duty at issue, Indonesia unilaterally raised the MFN ad valorem
duty rat e on imports of galvalume from 12.5% to 20%. 43 Thus, Indonesia's obligations under
Article II of the GATT 1994 did not preclude the ap plication of the specific duty on imports of
galvalume, implying that the specific duty did not suspend, withdraw , or modif y Indonesia's
obligations under Article II of the GATT 1994.
7.19. Following the second substantive meeting, Indonesia asserted that tariff obligations it
incurred under the ASEAN -Korea (10%) and the ASEAN Trade in Goods (0%) RTAs prevented it
from "increase[ing] its tariff" on imports of galvalume.44 According to Indonesia, "the application of
the preferential tariffs under Indonesia FTAs pursuant to Article XXIV of the GATT 1994 results in
Indonesia's inability to counter [the] increased imports". 45 Thus, Indones ia argues that the
imposition of the specific duty on imports of galvalume originating in countries including its RTA
partners means that the "GATT obligation being suspended … is t he GATT exception under
Article XXIV of the GATT 1994".46

39 Complainants' response to Panel question No. 48, para. 1.7.
40 Indonesia's response to Panel question Nos. 47 and 48.
41 See above, para. 2.3.
42 Indonesia's comments on paragraphs 40 and 41 of Indonesia's second written submission, para. 7;
closing statement at the second meeting of the Panel, para. 2.
43 Regulation of the Minister of Finance of the Republic of Indonesia No. 97/PMK.010/2015
(25 May 2015), (Exhibit TPKM/VNM-40). We recall that the specific duty that is at issue in this dispute is
applied in addition to the existing MFN and preferential duty rates on imports of galvalume. (See above,
para. 2.3).
44 Indonesia's response to Panel question No. 48, para. 18.
45 Indonesia's general comments on complainants' responses to Panel questions following the
second meeting with the Panel, para. 8.
46 Indonesia's general comments on complainants' responses to Panel questions following the
second meeting with the Panel, para. 10.
WT/DS490/R • WT/DS496/R

7.20. We are of the vie w that Article XXIV of the GATT 1994 does not impose an obligation on
Indonesia to apply a particular duty rate on imports of galvalume from its RTA partners. 47
Article XXIV of the GATT 1994 is a permissive provision, allowing Members to depart from their
obligations under the GATT to establish a customs union and/or free trade area, in accordance with
specified procedures.48 Article XXIV does not impose any positive obligation on Indonesia either to
enter into free trade agreements (FTAs) or to provide a cer tain level of market access to its FTA
partners through bound tariffs. Indonesia's obligation to impose a tariff of 0% on imports of
galvalume from its ASEAN trading partners is established in the ASEAN Trade in Goods Agreement,
not in Article XXIV. Simila rly, the establishment of a maximum tariff of 10% on imports of
galvalume from Korea is found in the ASEAN-Korea Free Trade Agreement, not in Article XXIV.49 In
other word s, Indonesia's 0% and 10% tariff commitments are obligations assumed under the
respective FTAs, not the WTO Agreement. There is, therefore, no basis for Indonesia's assertion
that Article XXIV of the GATT 1994 precluded its authorities from raising tariffs on imports of
galvalume and that the specific dut y, thereby, "suspended" "t he GATT ex ception under
Article XXIV" for the purpose of Article XIX:1(a).
7.3.2.2 No other relevant GATT obligations preclude the adoption of the specific duty
7.21. Indonesia argues that the imposition of the specific dut y also suspended its obligations
under Article I:1 of the GATT 1994. In particular, Indonesia submits that the specific dut y at issue
suspended Indonesia's obligation to provide MFN -treatment under Article I:1 of the GATT 1994
because it is applied on a discriminatory basis (i.e. to all but the 120 countries lis ted in
Regulation 137.1/PMK.011/2014) in order to comply with the special and differential treatment
(S&D) requirements of Article 9.1 of the Agreement on Safeguards.50
7.22. We note, however, that Indonesia does not argue that the specific dut y suspended its MFN
obligations under Article I:1 because the S&D afforded in order to comply with Article 9.1 was
necessary to remedy or prevent serious injury. Indeed, Indonesia acknowledges that the exclusion
of imports from qualifying developing country Members pursuant to Article 9.1 is neither intended
nor designed for this purpose. 51 Rather, according to Indonesia, the exclusion of imports from
developing country Members pursuant to Article 9.1 suspends Indonesia's MFN obligations under
Article I:1 because such discrimi nation is a legal "prerequisite"52 to the imposition of the specific
duty, which is itself intended to prevent or remedy serious injury. 53 In other words, Indonesia
argues that the specific duty imposed on imports of galvalume suspended its MFN obligations
under Article I:1 of the GATT 1994 because the MFN principle would otherwise prohibit the
discriminatory application of that duty in the way that is legally required under Article 9.1 of the
Agreement on Safeguards.
7.23. Although the complainants contest Indones ia's assertions regarding the consistency of the
exclusion of 120 countries from the application of the specific dut y with Article 9.1 54, the
complainants share Indonesia's view that the specific dut y suspends Indonesia's MFN obligations
under Article I:1 o f the GATT 1994. In particular, the complainant s argue that the specific duty
suspends those obligations because it is applied "on a selective basis, excluding imports from

47 The complainants also take this view. (Complainants' comments on Indonesia's response to Panel
question Nos. 47 and 48).
48 Appellate Body Report, Turkey – Textiles, para. 45.
49 Complainants' comments on Indonesia's response to Panel question No. 48, para. 1.16.
50 Indonesia's first written submission, para. 212; comments on paragraphs 40 and 41 of Indonesia's
second written submission, para. 8; and general comments on complainants' responses to Panel questions
following the second meeting with the Panel, para. 7.
51 Indonesia's response to Panel question Nos. 51 and 52; general comments on
complainants' responses to Panel questions following the second meeting with the Panel, para. 10; and
comments on complainants' response to Panel question Nos. 50 and 51.
52 Indonesia's general comments on complainants' responses to Panel questions following the
second meeting with the Panel, para. 24.
53 Indonesia's response to Panel question Nos. 51 and 52.
54 The complainants claim that six allegedly developed country Members of the WTO (Bulgaria, Croatia,
Hungary, Lithuania, Poland, and Romania) were included in the list of 120 countries excluded from the
application of the specific duty. (Complainants' second written submission, paras. 2.132-2.137; opening
statement at the second meeting of the Panel, paras. 7.1-7.5).
WT/DS490/R • WT/DS496/R

certain countries (including developing and developed countries)" 55 "with a view to address[ing]
the threat of serious injury 'suffered' by the domestic industry" .56 Thus, the complainants maintain
that the specific duty suspends Indonesia's MFN obligation because it is applied on a discriminatory
basis (whether consistently or inconsistently with Article 9.1) and is intended to remedy the threat
of serious injury found to exist in the underlying investigation.57
7.24. We do not agree with the parties. In our view, the parties' arguments are based on a
misconceived understanding of Article 9.1 and its relationship with Article XIX:1(a). Article 9.1
reads as follows:
Developing Country Members
1. Safeguard measures shall not be applied against 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.[*]
[*fn original]2 A Member shall immediately notify an action taken under paragraph 1 of Article 9
to the Committee on Safeguards.
7.25. Article 9.1 imposes an obligation on an importing Member to exclude imports of developing
country Members from the scope of application of a safeguard measure in order to provide S&D,
provided that certain conditions are satisfied. 58 Thus, by its express terms, Article 9.1 is legally
premised on an importing Member's intention to apply a safeguard measure.
7.26. We recall that we have found that the specific d uty on galvalume imports does not suspend
Indonesia's obligations under Article II of the GATT 1994. We have also rejected Indonesia's
contention that the specific duty should be considered to have "suspended" "the GATT exception
under Article XXIV" for th e purpose of Article XIX:1(a) . The consequence of these find ings is that
the specific duty does not constitute a "safeguard measure" within the meaning of Article 1 of the
Agreement on Safeguards. Thus, the fundamental prerequisite for the application of A rticle 9.1
does not exist, and there is, therefore, no basis for Indonesia's assertion that it was legally
required to apply the specific duty in the manner required by Article 9.1.
7.27. In any case, even where a Member is proposing to apply a safeguard measure 59, it does
not, in our view, follow from the fact that Article 9.1 imposes an obligation to apply a safeguard
measure in a discriminatory manner in favour of qualifying imports from developing country
Members, that the very same safeguard measure, because of that discrimination , suspends the
obligation in Article I:1 to provide MFN -treatment for the p urpose of Article XIX:1(a).
Two considerations lead us to this conclusion.
7.28. First, the discrimination that is called for by Article 9.1 (which would otherwise be
inconsistent with Article I:1 of the GATT 1994) is not intended to prevent or remedy serious injury.
Rather, that discrimination is intended to leave producers from qualifying developing country
Members with essentially the same access to the importing country market as existed prior to the
imposition of a safeguard measure. We fail to see how a course of action that dilutes the protective
impact of a safeguard measure in order to provide S&D could result in the suspension of a
Member's MFN obligations u nder Article I:1 for the purpose of Article XIX:1(a), given that the

55 Complainants' comments on paragraphs 40 and 41 of Indonesia's second written submission,
para. 1.6.
56 Complainants' comments on paragraphs 40 and 41 of Indonesia's second written submission,
para. 1.7.
57 Complainants' comments on paragraphs 40 and 41 of Indonesia's second written submission,
paras. 1.5-1.7; response to Panel question Nos. 49, 51, and 52.
58 Panel Report, US – Line Pipe, para. 7.175; and Appellate Body Report, US – Line Pipe, para. 129.
59 We recall here, to avoid confusion, that we have already found that the specific duty does not
constitute a safeguard measure falling within the scope of the obligation in Article 9.1.
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fundamental objective of Article XIX:1(a) is to allow Members to "escape" their GATT obligations to
the extent necessary to prevent or remedy serious injury to a domestic industry.60
7.29. Secondly, we recall that the General Interpretative Note to Annex 1A of the WTO Agreement
states that in the event of a conflict between a provision of the GATT 1994 and a provision of
another covered agreement, the provision of the covered agreement shall pre vail to the extent of
the conflict. In our view, the effect of this rule is that the discriminatory application of a safeguard
measure that is required by Article 9.1, to the extent it is inconsistent with the principle of
MFN-treatment, is permissible without having to suspend the opera tion of Article I:1 of the
GATT 1994. Indeed, the question of suspension simply does not arise in this context, because the
obligation in Article 9.1 to exclude the qualifying imports of developing country Members from the
scope of a safeguard measure prevails as a matter of law over the MFN obligation in Article I:1.
There is, therefore, no legal basis for the assertion that the discriminatory application of a
safeguard measure in accordance with Article 9.1 constitutes a suspension of Article I:1, within the
meaning of Article XIX:1(a). The authority to exclude qualifying imports of developing country
Members from the scope of application of a safeguard mea sure in accordance with Article 9.1
derives from the fact that the ob ligation to afford S&D in this manner under the Agreement on
Safeguards prevails over the obligation to afford MFN -treatment under Article I:1 of the
GATT 1994. It does not derive from Article XIX:1(a).
7.30. We recognize that our views in this re spect depart from certain statements and findings of
the panel in Dominican Republic – Safeguard Measures. In that dispute, the panel found that the
discriminatory application of a safeguard measure in accordance with Article 9.1 of the Agreement
on Safeguards resulted i n the suspension of the importing Member' s MFN obligations under
Article I:1 of the GATT 1994.61 The parties in the present dispute have relied upon these findings
to support their respective positions. 62 We have carefully considered the panel's findings and , to
the extent those findings would suggest a different outcome in this case, we respectfully disagree.
In our view, and for the reasons explained in the preceding paragraphs 63, the discriminatory
application of a safeguard measure for the purpose of affor ding S&D pursuant to Article 9.1 does
not result in a suspension of a Member's obligations under Article I:1 , within the meaning of
Article XIX:1(a) of the GATT 1994.
7.31. We would come to the same overall conclusion even if we were to find, as the complainants
request, that Indonesia included in the list of countries excluded from the application of the
specific dut y six developed country Members not entitled to S&D treatment under the terms of
Article 9.1.64 While the exclusion of imports of developed country Members from the application of
a safeguard measure would be inconsistent with Article 9.1, it is clear from the findings we have
made above that the specific duty is not a "safeguard measure" with respect to which Indonesia

60 In articulating this view, we express no opinion on the extent to which Article XIX:1(a) may or may
not authorize an importing Member to apply a measure on a discriminatory basis (that would otherwise be
inconsistent with Article I:1 of the GATT 1994), were such discrimination considered by an importing Member
to be necessary to prevent or remedy serious injury. Our views are strictly limited to the discriminatory
application of a safeguard measure that may result from compliance with Article 9.1, which is explicitly
intended to afford S&D to qualifying developing country Members.
61 Panel Report, Dominican Republic – Safeguard Measures, paras. 7.70-7.73. We note that the facts in
Dominican Republic – Safeguard Measures were different to the present controversy in several important
respects, including because the measures at issue in that proceeding were found to suspend the obligations of
the Dominican Republic under not only Article I:1 of the GATT 1994, but also Article II:1(b) of the GATT 1994.
Thus, unlike the present dispute, the panel in Dominican Republic – Safeguard Measures was not called upon
to determine whether compliance with Article 9.1 could be the sole basis to find that a particular measure (that
did not already meet the definition of a "safeguard measure" on a separate and independent basis) could be
characterized as such, simply because of the discrimination that results from the provision of S&D.
62 Indonesia's first written submission, paras. 209 and 210; Indonesia's comments on paragraphs 40
and 41 of Indonesia's second written submission, para. 8; complainants' second written submission,
para. 2.132; and complainants' opening statement at the second meeting of the panel, para. 7.2.
63 See above, paras. 7.27-7.29. As explained in paragraph 7.27, this part of our analysis is premised on
the existence of a safeguard measure falling within the scope of Article 9.1. We recall, however, that we have
already found that the specific duty does not constitute a safeguard measure, and that Indonesia was,
therefore, under no obligation to comply with the S&D requirements of Article 9.1 in its application of the
specific duty. (See above, paras. 7.24-7.26).
64 We emphasize that we make no finding on the merits of the complainants' assertions concerning the
alleged developed country status of the six countries at issue, namely, Bulgaria, Croatia, Hungary, Lithuania,
Poland, and Romania.
WT/DS490/R • WT/DS496/R

had an obligation to comply with Article 9.1. Thus, the discriminatory ap plication of the specific
duty resulted from Indonesia's erroneous view that it was legally required to comply with
Article 9.1. In other words, Indonesia excluded imports of the six countries at issue from the
application of the specific duty because it was of the view that they were developing country
Members that qualified for S&D.65
7.32. It follows that the conduct the complainants maintain would otherwise be precluded by
Article I:1 (and, therefore, result in the sus pension of Indonesia's MFN obligations for the purpose
of Article XIX:1(a)) was not undertaken for the purpose of preventing or remedying serious injury.
Indonesia did not dec ide to apply the specific duty to a limited number of exporting countries
because Indonesia considered it was necessary to discriminate between sources of imports of
galvalume in order to prevent or remedy serious injury to its domestic industry. Rather, the
discrimination resulting from the exclusion of the six countries was pursued f or the sole purpose of
providing them with continued access to the Indonesian galvalume market une ncumbered by the
specific duty, as a consequence of Indonesia's erroneous view that it was required to comply with
Article 9.1. Again, we cannot see how the application of the specific duty to imports originating in
all but six countries, specifically excluded in order to maintain a pre-existing level of market access
for the purpose of affording those countries with S&D, falls within the scope of the types of actions
that may be authorized under Article XIX:1(a). Thus, even assuming, arguendo, that Indonesia
did, in fact, exclude six developed country Members from the ap plication of the specific duty, the
resulting discrimination does not mean that the specific duty should be properly characterized as a
"safeguard measure" within the meaning of Article 1 of the Agreement on Safeguards.
7.3.3 Consequences of the fact that the specific dut y was adopted following an
investigation conducted by Indonesia's competent autho rity pursuant to Indonesia's
safeguards legislation with a view to complying with the Agreement on Safeguards
7.33. The specific duty that is the subject of this dispute was imposed at the conclusion of an
investigation initiated by Indonesia's competent authori ty in charge of the imposition of safeguard
measures, and conducted pursuant to Indonesia's domestic safeguards legislation. The wording of
the legal instrument adopting the specific duty, Regulation 137.1/PMK.011/2014 , describes the
measure as a "safeguar d duty". Indonesia notified the investigation and its findings to the
Committee on Safeguards pursuant to Articles 12.1(a), (b) , and (c) of the Agreement on
Safeguards. According to the complainants, these facts , when considered in the context of their
submission that the specific duty suspends Indonesia's obligation s under Article I:1 of the
GATT 199466, all point in the direction of a finding that the specific duty is a "safeguard measure"
within the meaning of Article 1 of the Agreement on Safeguards.67
7.34. As we see it, the fact that a Member initiated and conducted an investigation under its
domestic safeguards legislation does not necessarily mean that the measures imposed on the
investigated product at the end of that process are "safeguard measures" within the meaning of
Article XIX of the GATT 1994 and the Agreement on Safeguards. Although it would normally be
expected that a measure adopted to prevent or remedy serious injury at the conclusion of a
safeguard investigation would be a "safeguard measure", particularly where the domestic
implementing instrument described the adopted measure as a "safeguard measure", this would not
be because of the existence of an underlying investigation under the Member's domestic
safeguards legislation, or the description of the measure by the imposing Member as a safeguard
measure. Rather, it would be because of the expectation that the relevant measure is one of the
"measures provided for" in Article XIX:1(a) of the GATT 1994, which as discussed above, is a

65 Final Disclosure Report, (Exhibit IDN-8), para. 66; Regulation of the Minister of Finance of the
Republic of Indonesia No. 137.1/PMK.011/2014 on imposition of safeguarding duty against the import of
flat-rolled products of iron or non-alloy steel (22 July 2014), (Exhibit IDN-20), p. 4 and the appendix; and
Committee on Safeguards, Notification Under Articles 9, 12.1(b), and 12.1(c), and Footnote 2 of the
Agreement on Safeguards (28 July 2014), G/SG/N/8/IDN/16/Suppl.1, G/SG/N/10/IDN/16/Suppl.1,
G/SG/N/11/IDN/14, (Exhibit TPKM/VNM-5).
66 We recall that we have previously dismissed the complainants' submission. (See above,
paras. 7.23-7.32
67 Complainants' comments on paragraphs 40 and 41 of Indonesia's second written submission,
paras. 1.7 and 1.8; response to Panel question No. 49. Although appearing to initially share the
complainants' view, Indonesia ultimately disagrees with the complainants on this point. (Indonesia's comments
on complainants' response to Panel question Nos. 50 and 51, paras. 22 and 23).
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measure that s uspends, withdraws, or modifies a GATT obligation or concession that precludes a
Member from imposing a measure to the extent necessary to prevent or remedy serious injury , in
a situation where all of the conditions for the imposition of a safeguard measure are satisfied.
7.35. An importing Member that undertakes an investigation to determine whether to impose a
safeguard measure on imports of a particular product will not know at the beginning of its
investigation, whether or the extent to which, it may need to suspend, withdraw, or modify a GATT
obligation or concession in order to address the serious injury that is allegedly caused by increased
imports. It is clear, however, that as long as the potential to respond to alleged serious injury to
the domestic ind ustry through the imposition of a "safeguard measure" exists, the importing
Member would have to initiate and conduct an investigation in accordance with the Agreement on
Safeguards, as a WTO -consistent safeguard investigation is a necessary prerequisite t o the
imposition of a WTO-consistent safeguard measure.
7.36. Thus, an importing Member may initiate a safeguard investigation and find, at the end of
that process, that the conditions for imposition of a safeguard measure are satisfied. At that point,
the importing Member will have to determine whether it will impose a measure, and if so, what
form and level that measure should take. The i mporting Member will have
three choices: (a) impose a measure suspending, withdrawing, or modifying a GATT obligation or
concession to the extent necessary to prevent or remedy the serious injury established in the
underlying investigation and facilitate adjustment (that is, impose a safeguard measure); (b) take
some other WTO -consistent action to otherwise address the serious i njury established in the
underlying investigation; or ( c) take no action and impose no measure at all, despite having
established the right to do so.
7.37. It is to be expected that an importing Member, having established that the conditions to
impose a safeguard measure exist, will typically exercise its right to impose a safeguard measure.
However, an importing Member in that situation might also decide, in the light of the findings
made in the underlying investigation and/or other considerations 68, not to suspend, withdraw, or
modify a GATT obligation in order to prevent or remedy serious injury.
7.38. In this connection, we note that Indonesia explained its decisi on to impose the specific duty
by resorting to a process that involved conducting an investigation under its safeguards legislation,
as follows:
Although Indonesia fully understands that it has the right to modify the applied tariff
unilaterally, however, Indonesia is of the view that rationalization and proper
procedures to increase or reduce tariffs to cert ain products are necessary as the basis
of government policy. This is why Indonesia opted for the safeguard proceeding.69
We understand this explanation to mean that Indonesia decided to conduct an investigation under
its safeguards legislation and the Agre ement on Safeguards not because Indonesia considered it
was legally bound by its international obligations to do so in or der to apply the specific duty on
imports of galvalume, but because of other reasons related to "government policy". Recalling that
one of the defining features of a safeguard measure is the suspension, withdrawal , or modification
of a GATT obligation or concession that precludes a Member from imposing a measure to the
extent necessary to prevent or remedy serious injury, and in the light of our previous finding that
the specific duty does not possess this important characteristic, Indonesia's statement is, in our
view, clear recognition that the specific dut y challenged in this dispute do es not constitute a
safeguard measure within the me aning of Article 1 of the Agreement on Safeguards,
notwithstanding the fact that it was imposed following an investigation conducted under
Indonesia's safeguard legislation with a view to complying with the Agreement on Safeguards and
described as a safeguard measure in the implementing regulation.
7.39. It follows from the above that while a WTO -consistent investigation is a necessary
prerequisite for the application of a WTO -consistent safeguard measure, the fact that an importing
Member may have conducted an i nvestigation in accordance with the Agreement on Safeguards

68 For instance, considerations of public interest, which are mentioned in Article 3(1) of the Agreement
on Safeguards, may lead a Member to decide not to impose a safeguard measure, despite having established
the right to do so.
69 Indonesia's comments on paragraphs 40 and 41 of Indonesia's second written submission, para. 7.
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does not mean that any measures adopted as a result of the conclusions in that investigation
suspend, modify, or withdraw any GATT obligation or concession and, therefore, constitute
"safeguard measures" within the meaning of Article 1 of the Agreement on Safeguards. Because a
Member is free to choose not to apply a safeguard measure, even when all of the conditions for
application are satisfied, the mere fact that it has undertaken a WTO -consistent safeguard
investigation and made all necessary notifications to the WTO Committee on Safeguards does not
render that Member's consequent actions a "safeguard measure" for the purpose of WTO law.
Ultimately, we do not understand the complainants to disagr ee with this proposition, as they have
themselves explained that their position is not that the specific duty is a safeguard measure solely
because it was described as such in the implementing regulation and adopted following a domestic
safeguards investig ation that was notified to the WTO Committee on Safeguards. Rather, the
complainants have made clear that they consider these facts to lend support to the view that the
specific duty is a safeguard measure when considered in the light of their submission t hat
Indonesia's discriminatory application of the specific duty, for the purpose of providing S&D in
accordance with Article 9.1 of the Agreement on Safeguards, suspended Indonesia's obligations
under Article I:1 of the GATT 199470, a submission, which we recall once again, we have rejected.
7.3.4 Conclusion
7.40. In summary, we have found that one of the defining features of a safeguard measure is the
suspension, withdrawal , or modification of a GATT obligation or concession that precludes a
Member from imposing a meas ure to the extent necessary to prevent or remedy serious injury , in
a situation where all of the conditions for the imposition of a safeguard measure are satisfied 71,
and that the specific duty applied by Indonesia on imports of galvalume does not constitute such a
measure for the following reasons:
a. the specific d uty does not suspend, withdraw , or modify the operation of Indonesia's
obligations under Article II of the GATT 1994 for the purpose of Article XIX:1(a)72;
b. there is no basis for Indonesia to assert that Article XXIV of the GATT 1994 precluded its
authorities from raising tariffs on imports of galvalume and that, for this reason, the
specific duty "suspended" "the GATT exception under Article XXIV" for the purpose of
Article XIX:1(a)73;
c. the discriminatory application of the specific duty in order to afford S&D treatment to
120 Members , which Indonesia (rightly or wrongly) considered to be developing
countries, does not suspend Indonesia's obligation to provide MFN -treatment under
Article I:1 of the GATT for the purpose of Article XIX:1(a)74; and
d. the fact that the specific duty was described as a safeguard measure in the
implementing regulation and imposed following a n investigation conducted pursuant to
Indonesia's domestic safeguards legislation, with a view to complying with the disciplines
of the Agreement on Safeguards (including notification requirements), doe s not render
the specific duty a "safeguard measure" within the meaning of Article 1 of the
Agreement on Safeguards.75
7.41. In coming to this concl usion, we wish to emphasize that contrary to what Indonesia
suggests76, our finding that the specific duty is not a "safeguard measure" does not mean that
Members are precluded from applying "safeguard measures" on imports for which their tariffs are
"unbound". Any WTO Member faced with such a situation would be entitled to exercise its rights
under the Agreement on Safeguards to prevent or remedy serious injury to its domestic industry,
provided that the chosen remedial course of action suspends, withdraws , or modifies a relevant
GATT obligation or concession for that purpose. A Member whose tariff is "unbound" with respect
to a product that is facing competition from imports that are allegedly causing serious injury, may,

70 Complainants' request for interim review, paras. 2.11 and 2.12.
71 See above, paras. 7.12-7.17.
72 See above, para. 7.18.
73 See above, paras. 7.19 and 7.20.
74 See above, paras. 7.21-7.32.
75 See above, paras. 7.33-7.39.
76 Indonesia's comments on paragraphs 40 and 41 of Indonesia's second written submission,
paras. 2, 6, and 9.
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for example, impose a safeguard mea sure in the form of an appropriate import quota, thereby
suspending its obligations under Article XI of the GATT 1994. Of course, such a measure would
have to be based on a WTO -consistent investigation and conclusions. However, the mere fact of
having conducted such an investigation does not mean that an otherwise permitted action, such as
an increase in an unbound tariff, becomes a safeguard measure subject to review under the
Agreement on Safeguards. Indonesia in this case did not undertake any course of action that
suspended, withdrew, or modified any GATT obligation or concession. Accordingly, for all of the
above reasons, we find that the specific duty applied by Indonesia on imports of galvalume
pursuant to Regulation No. 137.1/PMK.011/2014 does not constitute a "safeguard measure",
within the meaning of Article 1 of the Agreement on Safeguards.
7.4 Whether the exclusion of 120 countries from the application of the specific dut y
imposed pursuant to Regulation No. 137.1/PMK.011/2014 is inconsistent with
Indonesia's obligation to afford MFN-treatment under Article I:1 of the GATT
7.42. The complainants claim that the application of t he specific duty on imports of galvalume
originating in all but the 120 countries listed in Regulation No. 137.1/PMK.011/2014 is inconsistent
with Indonesia's obligations under Article I:1 of the GATT 1994. According to the complainants, the
exclusion of galvalume originating in those 120 countries from the scope of the specific duty is an
advantage, favour, or privilege provided in conne ction with the application of customs duties that
Indonesia failed to accord immediately and unconditionally to like products originating in all WTO
Members.77 Although the complainants pursue this claim primarily as part of their complaint
against the specific duty as a safeguard measure78, they also make the same claim on the basis of
the same arguments against the specific duty as a stand-alone measure.79
7.43. Indonesia has not contested the complainants' Article I:1 c laim against the specific duty as
a stand-alone measure. Moreover, in responding to the complainants' Article I:1 claim against the
specific duty as a safeguard measure , Indonesia's only response has been to argue that the
discriminatory application of the duty is: (a) authorized by Article XIX:1(a ) of the GATT (to the
extent that this provision entitles Indonesia to suspend its obligati ons under Article I:1);
and (b) legally required under the terms of Article 9.1 of the Agreement on Safeguards (which
prevails over Article I:1 to the extent of any conflict).80 Thus, Indonesia's sole justification for the
exclusion of imports of galvalume originating in 120 countries from the ap plication of the specific
duty is premised on t he view that the specific duty is a measure which, by definition, would be
inconsistent with Article I:1 of the GATT, were it not considered to be a safeguard measure within
the meaning of Article 1 of the Agreement on Safeguards . We have previously co ncluded that the
specific duty does not constitute a safeguard measure.81
7.44. Article I:1 of the GATT requires that "any advantage, favour, privilege or immunity" granted
by a Member in relation to the application of inter alia "customs duties and charges" on the
importation of "any product originating in … any other country shall be accorde d immediately and
unconditionally to the like product originating in … the territories" of all Members. The
complainants argue, and we agree, that the specific duty is a "customs duty " within the meaning
of Article I:1. We also share the complainants' view that the exclusion of imports of galvalume
from the 120 countries listed in Regulation No. 137.1/PMK.011/2014 constitutes an "advantage"
granted to "like products" that is not "immediately and unconditionally accorded" to imports of

77 Complainants' first written submission, paras. 5.142-5.150; Chinese Taipei's panel request,
para. II.a.6, p. 3; and Viet Nam's panel request, para. 1.7.a.vi, p. 3.
78 In particular, the complainants argue that Indonesia's application of the specific duty, as a safeguard
measure, is inconsistent with Article I:1 of the GATT because the exclusion of the 120 countries listed in
Regulation No. 137.1/PMK.011/2014 cannot be justified by Article 9.1 of the Agreement on Safeguards due to
the fact that six of those countries are European Union member States and, therefore, according to the
complainants, not developing countries. (Complainants' first written submission, paras. 5.142-5.150; response
to Panel question No. 42; second written submission, paras. 2.128, 2.132, and 2.136; opening statement at
the first meeting of the Panel, paras. 7.1 and 7.2; and opening statement at the second meeting of the Panel,
para. 7.2).
79 Complainants' comments on paragraphs 40 and 41 of Indonesia's second written submission,
para. 2.2; response to Panel question No. 51.
80 Indonesia's first written submission, paras. 210-212; opening statement at the first meeting of the
Panel, paras. 63 and 64; comments on paragraphs 40 and 41 of Indonesia's second written submission,
para. 8; and opening statement at the second meeting of the Panel, para. 72.
81 See above, para. 7.40.
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galvalume from all WTO Members. Accordingly, we find that the ap plication of the specific duty on
imports of galvalume originating in all but the 120 countries listed in
Regulation No. 137.1/PMK.011/2014 is inconsistent with Indonesia's obligat ion to afford
MFN-treatment under Article I:1 of the GATT 1994.
7.5 The complainants' claims under the Agreement on Safeguards and Articles XIX:1(a)
and XIX:2 of the GATT 1994
7.45. Indonesia submits that the consequence of a finding that the specific duty does not
constitute a safeguard measure should be the rejection of the entirety of the complainants' claims
under the Agreement on Safeguards. 82 The complainants do not refute this implication, but
nevertheless ask that the merits of their claims under the Agreement on Safeguards be fully
resolved in order to "secure a positive solution" to this dispute.83
7.46. Having concluded that the specific duty is not a safeguard measure within the meaning of
Article 1 of the Agreement on Safeguards, it is evident to us that there is no legal basis for the
complainants' claims under the Agreement on Safeguards (as well as Articles XIX:1(a) and XIX:2
of the GATT 1994). Accordingly, we dismiss the entirety of those claims. In our view, the findings
and conclusions we have made in the preceding section of this report a re an appropriate and
sufficient basis to resolve the matters at issue in this dispute consistent with our terms of
reference and Article 11 of the DSU. In this light, we see no need to make any alternative findings
on the legal merits of the complainants' claims under the Agreement on Safeguards and
Articles XIX:1(a) and XIX:2 of the GATT 1994.
7.47. Nevertheless, in the light of the unique circumstances of this case 84, we have decided to
proceed to address the complainants' claims, but only to the extent of iden tifying facts relevant to
an evaluation of the allegations pertaining to KPPI's findings, the conduct of its investigation , and
Indonesia's decision to impose the specific duty. Given our conclusions above, we do not go on to
consider the legal merits of the complainants' claims. Thus, in the sub-sections that follow, and for
each of the sets of issues raised by the complainants 85, we firstly describe the parties' arguments
and summarize the relevant applicable law (without making any findings on questions o f legal
interpretation arising from those arguments), before turning to identify the relevant facts.
7.5.1 Unforeseen developments and the effect of GATT 1994 obligations
7.5.1.1 Parties' arguments
7.48. The complainants claim that KPPI's determination is inconsistent with Article XIX:1(a) of the
GATT 1994 and Article 3.1 of the Agreement on Safeguards because KPPI erroneously concluded
that the "surge of imports" qualified as an unforeseen development and because, in any case, KPPI
failed to: (a) provide a reasoned and adequa te explanation of what the unforeseen developments
were; (b) explain why those developments were unforeseen at the relevant time; (c) identify any
GATT 1994 obligation whose effect(s) led to increased imports ; and (d) properly establish a logical

82 Indonesia's second written submission, para. 41.
83 Complainants' comments on paragraphs 40 and 41 of Indonesia's second written submission,
para. 2.2
84 We recall that: (a) Indonesia conducted the investigation at issue with a view to complying with its
obligations under the Agreement on Safeguards and imposed the specific duty in the light of the outcome of
that investigation, despite knowing that it was entitled to raise its applied MFN duty rate on imports of
galvalume at any time and to any level, given that it has no tariff bindings on that product under Article II of
the GATT 1994; and (b) all three parties have consistently argued from the very beginning of this proceeding
that the specific duty is a safeguard measure. This is the first time that a WTO dispute settlement Panel has
been called upon to rule upon the merits of claims of violation of the Agreement on Safeguards in such a
situation.
85 Having found Indonesia's application of the specific duty, as a stand-alone measure, to be
inconsistent with its obligations under Article I:1 of the GATT 1994 (above paras. 7.42-7.44), we believe it is
not necessary for the purpose of resolving this dispute to identify facts that might be relevant to the legal
analysis of the complainants' alternative Article I:1 claim (above para. 7.42).
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connection between the alleged unforeseen developments and the effect(s) of the GATT 1994
obligation(s) and the increase in imports of galvalume.86
7.49. Indonesia denies the complainants' allegations, submitting that the standard KPPI had to
satisfy in making its findings is not as rigorous as the complainants claim, emphasizing that KPPI's
conclusion on unforeseen developments must be considered in the light of the totality of KPPI's
findings and that the Panel should not be overly focused only on the conclusion. I n any case,
according to Indonesia, the complainants understood that the unforeseen development was the
2008 global financial crisis. Indonesia also argues that it follows from the simplicity of the facts at
issue in the underlying investigation and Indonesia's developing country status that KPPI was not
required to support its determination of unforeseen developments with sophisticated economic
analyses in order to satisfy Indonesia's obligations .87 Furthermore, in responding to the
complainants' claims concerning the effect of a GATT 1994 obligation, Indonesia points to the MFN
and preferential duty rates applied by Indonesia on imports of galvalume, which were identified in
KPPI's Final Disclosure Report.88
7.5.1.2 Relevant law
7.50. Article XIX:1(a) of the GATT 1994 provides 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 s uch 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 a nd for
such time as may be necessary to prevent or remedy such injury, to suspend the
obligation in whole or in part or to withdraw or modify the concession.
Both clauses of Article XIX:1(a) must be satisfied before a Member may impose a safeguard
measure. The first clause sets out two circumstances whose existence must be factually
demonstrated before any safeguard may be applied: ( a) the existence of unforeseen
developments; and ( b) the existence of one or several obligation(s) under the GATT 1994. 89
Demonstration of these two factual pre -requisites must be in the competent authority's published
report.90 The second clause sets out the "independent conditions" that must also be established in
order to impose a safeguard measure. These include an increase in imports in such quantities and
under such conditions as to cause or threaten to cause serious injury to domestic producers of like
or directly competitive products. A competent authority must demonstrate the existence of a
"logical connection" between, on the one hand, the existence of unforeseen developments and the
obligations assumed under the GATT 1994 and, on the other hand, the increase in imports of the
subject product that is causing or threatening to cause serious injury to the domestic industry of
the importing Member. 91 It is not for a Panel to identify linkages that the competent authority
failed to make in its published report.92

7.51. The expression "unforeseen developments" is understood to mean developments that were
"unexpected" at the time the imp orting Member incurred the relevant GATT obligation. 93 A
competent authority's published report must demonstrate how these developments were

86 Complainants' first written submission, paras. 5.17-5.30; opening statement at the first meeting of
the Panel, paras. 2.1-2.3; response to Panel question Nos. 1-3; and second written submission,
paras. 2.4-2.28.
87 Indonesia's first written submission, paras. 53-65; response to Panel question Nos. 8 and 9; and
second written submission, paras. 24-39.
88 Indonesia's response to Panel question No. 6, paras. 3-6.
89 Appellate Body Reports, Argentina – Footwear (EC), para. 91; and Korea – Dairy, para. 84; and Panel
90 Panel Report, Ukraine – Passenger Cars, para. 7.56.
91 Appellate Body Reports, Argentina – Footwear (EC), para. 92; Korea – Dairy, para. 85; US – Lamb,
para. 72; and US – Steel Safeguards, paras. 31 5-319; and Panel Report, Ukraine – Passenger Cars ,
paras. 7.83 and 7.96.
92 Appellate Body Report, US – Steel Safeguards, para. 322.
93 Appellate Body Reports, Argentina – Footwear (EC), para. 93; and Korea – Dairy, para. 86.
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unexpected.94 A " mere phrase in a conclusion, without supporting analysis of the existence of
unforeseen developments, is not a substitute for a demonstration of fact". 95 Moreover, because a
competent authority must establish that the increase in imports is a result of the unforeseen
developments, an increase in imports cannot, by definition, constitute an unforeseen development
within the meaning of Article XIX:1(a).96
7.52. The expression "the effect of the obligations incurred by a Member under this Agreement"
requires a competent authority to factually demonstrate "that the importing Member has incurred
obligations under the GATT 1994, including tariff concessions".97
7.53. Article 3.1 of the Agreement on Safeguards provides in relevant part that:
The competent authorities shall publish a report setting forth their findings and
reasoned conclusions reached on all pertinent issues of fact and law.
To comply with this obligation, a competent authority must, with respect to all pertinent issues of
law and fact, set out in sufficient detail its findings and its reasoned conclusions in a published
report.98 A competent authority's findings and conclusions must be expressed in a logical form or
have resulted from a logical examination of a matter. 99 The existence of unforeseen developments
qualifies as a "pertinent issue of fact and law" for the purpose s of applying Article 3.1.100
Therefore, Article 3.1 places an obligation on a Member's competent authority to include in its
published report a "'reasoned conclusion' on 'unforeseen developments'".101

7.5.1.3 Relevant facts
7.54. KPPI's findings with respect to unforeseen developments are set out in three parag raphs of
the Final Disclosure Report. KPPI concludes that the "surge of imports" of galvalume constitutes an
"unforeseen development ", after describing the alleged impact of the following two events on
international trade in galvalume: (a) the 2008 global financial crisis ; and (b) a change in
Indonesian raw material preferences from wood to light steel.102
7.55. The Final Disclosure Report states that the 2008 global financial crisis caused demand for
imports of galvalume outside of Indonesia to decrease, resulting in a diversion of trade from other
import markets to the Indonesian market because of above -global-average economic growth in
Indonesia.103 It also states that a change in domestic market preferences for raw materials (from
wood to light steel) had the eff ect of increasing Indonesian demand for imports of galvalume "in
line with the growth of roll forming industry" .104 On the basis of these considerations, KPPI
concludes in the final paragraph of its analysis that the "surge of imports during the period of
investigation … is considered as unforeseen development".105
7.56. Although there is no dispute between the parties about whether the 2008 global financial
crisis actually took place, the 2008 global financial crisis is neither described in any detail nor
explicitly identified in the Final Disclosure Report as an unforeseen development. Rather, as
already noted, KPPI stated that the "surge of imports" was the "unforeseen development". KPPI's
findings in the relevant paragraphs of the Final Disclosure Report make no s pecific reference to
any data, statistics, submissions , or underlying studies to support the various statements made
about: (a) the alleged consequences of the 2008 global financial crisis on international trade in

94 Appellate Body Report , US – Lamb, para s. 71 -73; and Panel Report, Chile – Price Band System ,
para. 7.134.
95 Panel Report, Argentina – Preserved Peaches, para. 7.33.
96 Panel Report, Ukraine – Passenger Cars, para. 7.83.
97 Appellate Body Reports, Argentina – Footwear (EC), para. 91; and Korea – Dairy, para. 84.
98 Appellate Body Report, US – Steel Safeguards, para. 287.
99 Appellate Body Report, US – Steel Safeguards, para. 287.
100 Appellate Body Reports, US – Lamb, para. 76; and US – Steel Safeguards, paras. 290 and 326; and
Panel Report, Chile – Price Band System, para. 7.137.
101 Appellate Body Report, US – Lamb, para. 76.
102 Final Disclosure Report, (Exhibit IDN-8), paras. 52-54.
103 Final Disclosure Report, (Exhibit IDN-8), para. 52.
104 Final Disclosure Report, (Exhibit IDN-8), para. 53.
105 Final Disclosure Report, (Exhibit IDN-8), para. 54.
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galvalume; (b) Indonesia's above -global-average economic growth; or (c) the change in the raw
materials preferences. To this extent, KPPI's finding of the existence of unforeseen developments
rests on unsubstantiated assertions.
7.57. Turning to the identification of Indonesia's obligations under the G ATT 1994, we note that
the MFN and preferential duty rates in force with respect to imports of galvalume during the period
of investigation (POI) are set out in Table 3 of the Final Disclosure Report. The fact that Indonesia
has no binding WTO tariff oblig ation with respect to galvalume is not mentioned. There is,
furthermore, no record of any specific consideration of any of Indonesia's obligations under the
GATT 1994 in the Final Disclosure Report.
7.5.2 Increased imports
7.5.2.1 Parties' arguments
7.58. The complainants c laim that Indonesia acted inconsistently with its obligations under
Article XIX:1(a) of the GATT 1994 and Articles 2.1 and 3.1 of the Agreement on Safeguards by
failing to make a proper determination of whether galvalume "is being imported" in such increased
quantities as to cause or threaten to cause serious injury (KPPI's determination of "increased
imports"), and by subsequently imposing the challenged safeguard measure on the basis of the
same determination of "increased imports".106
7.59. The complainants sub mit that the facts and circumstances surrounding the challenged
galvalume investigation demonstrate that Indonesia acted inconsistently with its obligations under
these provisions for essentially two reasons. First, because KPPI's finding of "increased imp orts"
was based on import data from a POI that ended 15 months before its substantive determination,
without any explanation as to why data from such an allegedly remote POI constituted an
appropriate basis to make that finding ; and secondly, because t he s ame finding of "increased
imports" was relied upon to justify the imposition of the challenged safeguard measure
approximately 19 months after the end of the POI, without any explanation as to why the data
from such an allegedly remote POI constituted an appropriate basis for that decision.107
7.60. Indonesia submits that the Agreement on Safeguards does not set a "specific numerical
threshold" for the time-gap between, on the one hand, the end of a POI and, on the other hand,
the dates on which a Member makes a substantive determination of increased imports in a
safeguard investigation or decides to impose a safeguard measure. Moreover, Indonesia points out
that, unlike the Anti -Dumping Agreem ent and the Agreement on Subsidies and Countervailing
Measures, the Agree ment on Safeguards is silent about the maximum duration of a safeguard
investigation, leaving Members with a degree of flexibility to decide exactly when to apply a
safeguard measure after the issuance of the results of a safeguards investigation.108
7.61. Indonesia also argues that the complainants' suggestion to take into account the data of the
first half of 2013 would be contradictory to the goal of expediting the investigation because by
taking into account new data, KPPI would have to update and verify not o nly its increased imports
analysis, but also other relevant requirements. Therefore, Indonesia submits that the
implementation of the complainants' suggestion would undoubtedly result in a longer, if not the
same, time required to complete the investigatio n. Moreover, Indonesia draws a parallel between
the facts of the galvalume investigation and the facts at issue in Ukraine – Passenger Cars, where
the panel found that a 16 -month time gap between the end of the POI and the date of the
competent authority's substantive determination was sufficient to establish that the increased
imports were recent enough. In contrast, Indonesia asserts that the time-gap between the end of
the POI and the date of the substantive determination in the galvalume investigation was only
15 months, which Indonesia argues should be acceptable given the following circumstances:

106 Complainants' first written submission, paras. 5.35 -5.55. Separately, Viet Nam claims that as a
consequence of the alleged violations of Article XIX:1(a) of the GATT and Articles 2.1 and 3.1 of the Agreement
on S afeguards, Indonesia also acted inconsistently with Articles 4.2(a) and 4.2(c) of the Agreement on
Safeguards. (Complainants' first written submission, para. 5.56).
107 Complainants' opening statement at the first meeting of the Panel, paras. 3.1-3.6; second written
submission, paras. 2.33-2.46; and opening statement at the second meeting of the Panel, paras. 3.1-3.10.
108 Indonesia's first written submission, paras. 86-88 and 92.
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(a) Indonesia's status as a developing country; ( b) the fact that KPPI was in charge of
ten safeguard investigations between 2013 and 2014; ( c) the fact that KPPI's chairperson and the
Minister of Trade were replaced during the relevant period; (d) the fact that no interested party
ever requested KPPI to update the import data; and (e) that, in any case, official import data for
2013 only became available on 4 August 2014.109 According to Indonesia, the delay between the
date of KPPI's substantive determination and the date of the Indonesian Minister of Trade's
decision to apply the safeguard measure can also be objectively justified by the various domestic
procedures that had to be followed before the decision to apply the safeguard measure could be
adopted by the Minister of Trade.110
7.62. In the complainants' view, however, Indonesia relies erroneously on the panel's findings
because the facts of that dispute are very different from the facts in the present dispute. In
particular, the complainants argue that, in Ukraine – Passenger Cars, the panel found that Japan
had not put forward specific arguments to suggest that the investigation took longer than needed;
and it also highlighted the fact that "the competent authorities were actively engaged [with Japan]
right up to the end of the investigation", and "published a notice specifically on the extension of
the investigation".111 In contrast, t he complainants argue that, in the present dispute, "the time
gaps at issue were 'abnormal' due to several bureaucratic factors that delayed the issuance of the
Final Disclosure Report"; "KPPI had access to data on the volume of imports for, at least, the first
half of 2013, which were ignored"; "Indonesia did not issue any notice as to the possible delay and
extension of the investigation"; and Indonesia did not "engage actively with exporting countries in
the course of the investigation".112
7.5.2.2 Relevant law
7.63. Article 2.1 of the Agreement on Safeguards provides 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
to the domestic industry that produces like or directly competitive products.113
The underlined text in Article 2.1 (and the parallel language that appe ars in Article XIX:1(a) of the
GATT 1994) has been interpreted to mean that the increase in imports observed in a
determination giving rise to the right to apply a safeguard measure must be "recent enough,
sudden enough, sharp enough, and significant enoug h, both quantitatively and qualitatively, to
cause or threaten to cause 'serious injury'". 114 Moreover, the phrase "is being imported", which is
also found in both Article XIX:1(a) and Article 2.1, conveys the need to select a POI "that is
sufficiently recen t to provide a reasonable indication of current trends in imports". 115 Thus, the
consideration of an increase in imports that is the focus of a safeguards investigation must be
based on data from a POI that ends in the very recent past and is sufficiently re presentative of
current import movements.116
7.64. There are no absolute or abstract standards for determining whether a competent
authority's analysis has complied with this requirement. An assessment must be made on a
case-by-case basis , considering the relevant facts and circumstances concerning, inter alia , the

109 Indonesia's first written submission, paras. 90 and 93-95; opening statement at the first meeting of
the Panel, paras. 29 and 30; second written submission, paras. 44, 53, and 56 -59; opening statement at the
second meeting of the Panel, paras. 31 -35, 37, and 38; response to Panel question No s. 57 and 59 ; and
comments to complainants' response to Panel question Nos. 60 and 61.
110 Indonesia's first written submission , para. 99; opening statement at the first meeting of the Panel,
para. 31; and response to Panel question No. 59.
111 Complainants' opening statement at the second meeting of the Panel, para. 3.7 (citing Panel Report,
Ukraine – Passenger Cars, para. 7.176).
112 Complainants' opening statement at the second meeting of the Panel, para. 3.8.
113 Fn omitted; emphasis added.
114 Appellate Body Report, Argentina – Footwear (EC), para. 131.
115 Appellate Body Report, US – Tyres (China), para. 147.
116 Appellate Body Reports, Argentina – Footwear (EC), fn 130; and US – Tyres (China), para. 146.
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market and the product .117 Furthermore, the increase in imports must be "recent enough " in
relation to not only the substantive determination made by the competent authority in an
underlying investigation but also a Member's decision to apply a safeguard measure.118
7.5.2.3 Relevant facts
7.65. Indonesia initiated the safeguards investigation on 19 December 2012. 119 KPPI's analysis of
increased imports was based on import volume data from a five -year POI ending on
31 December 2012. It concluded the investigation approximat ely 15 months later on
31 March 2014120, and the specific duty was imposed by the Minister pursuant to
Regulation 137.1/PMK.011/2014 four months later, on 22 July 2014, approximately 19 months
after the end of the POI.121 The Chairperson of KPPI changed during the course of the investigation
on 25 June 2013.122
7.66. KPPI's determination of increased imports was based on official import volume data from a
POI ending on 31 December 2012, produced by the Indonesian Statist ics Bureau. Import volume
data for the final calendar -year of the POI (2012) were officially released by the Indonesian
Statistics Bureau on 2 August 2013 123, about seven months before the issuance of KPPI's Final
Disclosure Report. Import volume data for ca lendar-year 2013 were published by the Indonesian
Statistics Bureau on 4 August 2014.124 The import data relied upon in the petition for the initiation
of the safeguards investigation includes data for the first half of calendar-year 2012, explicitly
naming the Indonesian Statistics Bureau as the source. 125 However, Indonesia asserts that the
Indonesian Statistics Bureau does not officially publish half-yearly import statistics by country.126
7.67. No interested party requested KPPI to extend the POI during the course of the investigation.
However, the last interaction between KPPI and the exporters from Chinese Taipei and Viet Nam
prior to the Final Disclosure Report was at a public hearing on 23 April 2013 127, almost one full
year before the completion of the investigat ion on 31 March 2014. The Viet namese exporter, the
Hoa Sen Group, was orally informed by KPPI of the outcome of the investigation around
22 April 2014, and on the same date requested to see a non -confidential version of the Final
Disclosure Report. 128 A copy of the non -confidential version of th e Final Disclosure Report was
e-mailed by KPPI to the Hoa Sen Group on 20 May 2014.129 The Hoa Sen Group provided KPPI with
its comments on the Final Disclosure Document on 3 June 2014. Those comments did not
challenge the POI in the underlying investigation.130
7.68. Indonesian law establishes an internal decision -making process for the imposition of a
safeguard after the KPPI has finished its investigation and made a recommendation to the Minister

117 Appellate Body Report, US – Steel Safeguards, paras. 358-360.
118 Panel Report, Ukraine – Passenger Cars, paras. 7.172 and 7.173.
119 WTO, Committee on Safeguards, Notification Under Article 12.1(a) of the Agreement on Safeguards
on initiation of an investigation and the reasons for it, G/SG/N/6/IDN/22, (Exhibit TPKM/VNM-2), p. 1.
120 Indonesia's first written submission, para. 94; and Final Disclosure Report, (Exhibit IDN-8), p. 30.
121 Regulation of the Minister of Finance of the Republic of Indonesia No. 137.1/PMK.011/2014 on
imposition of safeguarding duty against the import of flat-rolled products of iron or non-alloy steel
(22 July 2014), (Exhibit IDN-20), p. 6. Regulation 137.1/PMK.011/2014 was "stipulated" by the Minister of
Finance of the Republic of Indonesia on 7 July 2014; "promulgated" by the Minister of Justice and Human
Rights of the Republic of Indonesia on 15 July 2014; and entered into legal effect on 22 July 2014.
122 Indonesia's response to Panel question No. 59, para. 38.
123 Indonesia's response to Panel question No. 15, para. 24; and Indonesia's Official Import Statistics
for 2012, (Exhibit IDN-40).
124 Indonesia's second written submission, para. 54; and Publication date of 2013 Import Data
Statistics, (Exhibit IDN-43).
125 Request for Application of Safeguard Measure (Non -confidential Summary) , 12 December 2012 ,
(Exhibit TPKM/VNM-11), section E.
126 Indonesia's response to Panel question No. 57, para. 36.
127 Indonesia's first written submission, para. 94; and complainants' response to Panel question No. 11.
128 Complainants' response to Panel question No. 11; and Letter dated 22 April 2014 from
Hoa Sen Group's counsel to KPPI, (Exhibit TPKM/VNM-16).
129 Complainants' response to Panel question No. 11; and Email dated 20 May 2014 from KPPI to
Hoa Sen Group's counsel, (Exhibit TPKM/VNM-18).
130 Indonesia's second written submission, para. 51; and Letter dated 3 June 2014 from Hoa Sen's Legal
Counsel Submitting Comments on KPPI's Final Disclosure Report, (Exhibit IDN-42).
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of Trade. This process requires the Minister of Trade to inform the Minister of Finance of a decision
to impose a safeguard duty within 30 working days of the receipt of the letter of recommendation
from KPPI. 131 However, before doing so, the Minister of Trade must forward KPPI's
recommendation to various Indonesian government Ministries for the purpose of considering
whether the imposition of a safeguard duty would be in the national interest. Under Indonesian
law, the consulted Ministries are required to provide their "considerations" t o the Minister of Trade
within 14 working days 132, failing which, the relevant Ministries "shall be deemed" to have agreed
with KPPI's recommendation. 133 The Minister of Finance has 30 working days from the receipt of
the letter from the Minister of Trade to i ssue a decree for the purpose of applying the proposed
safeguard measure.
7.69. Following the issuance of the Final Disclosure Report on 31 March 2014, KPPI sent a letter
to the Minister of Trade on 10 April 2014 recommending the imposition of the specific duty in
accordance with the results of the underlying investigation. This letter initiated the internal
decision-making process contemplated under Indonesian law, which would ultimately result in the
imposition of the specific duty. The Minister of Trade forwa rded KPPI's recommendations to the
relevant Ministries on 21 April 2014. 134 A meeting to consider the "national interest" was held on
12 May 2014 between the Coordinating Ministry of Economic Affairs, the State Ministry of National
Development Planning, the Ministry of Finance, the Ministry of Industrial Affairs, the Ministry of
Trade, and KPPI. 135 Following this meeting, the Minister of Trade sent a letter to the Minister
Finance on 26 May 2014 concerning the proposed safeguard measure. 136 Two "technical" meetings
of the "Tariff Team" were held on 20 and 24 June 2014 among officials of the Ministry of Trade,
Ministry of Finance , and Ministry of Industry. 137 Regulation 137.1/PMK.011/2014 was "stipulated"
by the Minister of Finance of the Republic of Indonesia on 7 J uly 2014; "promulgated" by the
Minister of Justice and Human Rights of the Republic of Indonesia on 15 July 2014; and entered
into legal effect on 22 July 2014.138
7.5.3 Threat of serious injury
7.5.3.1 Parties' arguments
7.70. The complainants claim that KPPI's serious injury analysis and threat of serious injury
determination are inconsistent with Articles 3.1, 4.1(a), 4.1(b), 4.2(a), and 4.2(c) of the
Agreement on Safeguards and, consequently, with Article 2.1 of the Agreement on Safeguards and
Article XIX:1(a) of the GATT 1994. In essence, the complainants advance the following three lines
of argument to support their claims : first, the Final Disclosure Report contains no analysis or
finding of whether serious injury was "clearly imminent" 139 in order to establish that the dom estic
industry was suffering from a threat of serious injury ; second, KPPI failed to examine the rate and
amount of the increase in imports relative to domestic production 140; and third, KPPI failed to
provide a reasoned and adequate explanation of its findi ngs because it failed to properly analyze a

131 Government Regulation No. 34 of 2011 Concerning Anti-dumping Measure, Countervailing Measure,
and Safeguard Measure, Article 84(5), GR 34/2011, (Exhibit IDN-6).
132 Government Regulation No. 34 of 2011 Concerning Anti-dumping Measure, Countervailing Measure,
and Safeguard Measure, GR 34/2011, (Exhibit IDN-6), Article 84(2).
133 Government Regulation No. 34 of 2011 Concerning Anti-dumping Measure, Countervailing Measure,
and Safeguard Measure, GR 34/2011, (Exhibit IDN-6), Article 84(3).
134 Indonesia's first written submission, Table 1, para. 30.
135 Indonesia's first written submission, Table 1, para. 30.
136 Indonesia's first written submission, Table 1, para. 30.
137 Indonesia's first written submission, Table 1, para. 30.
138 Regulation of the Minister of Finance of the Republic of Indonesia No. 137.1/PMK.011/2014 on
imposition of safeguarding duty against the import of flat-rolled products of iron or non-alloy steel
(22 July 2014), (Exhibit IDN-20).
139 Complainants' first written submission, paras. 5.57, 5.88-5.90, and 5.92; second written submission,
paras. 2.74 and 2.75.
140 Complainants' first written submission, paras. 5.70-5.75; second written submission,
paras. 2.50-2.59; and response to Panel question Nos. 18 and 19. According to the complainants, the
evaluation of increased imports in "relative terms" that is called for in Article 4.2(a) of the Agreement on
Safeguards should be understood, in the context of Article 2.1, to mean that a competent authority's serious
injury analysis must involve a consideration of the extent to which imports increased "relative to domestic
production".
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number of factors individually and collectively, including trends in market shares, capacity
utilization, captive production, inventories, production, productivity, and employment.141
7.71. Indonesia rejects the complain ants' criticisms of KPPI's threat of serious injury
determination. While not pointing to any explicit analysis or finding in the Final Disclosure Report
regarding whether serious injury was "clearly imminent", Indonesia maintains that it was clear on
the b asis of KPPI's findings that "serious injury was on the verge of occurring if not for the
implementation of this safeguard measure". 142 Moreover, Indonesia contends that the Final
Disclosure Report shows that KPPI reviewed all mandatory injury factors in con formity with
Article 4.2(a), including the rate and amount of the increase in imports of the product concerned
relative to domestic consumption . According to Indonesia, KPPI was not required to examine the
rate and amount of the increase in imports relative to production .143 Indonesia argues that, in
order to make sense of the textual difference between Article 2.1 (which is focused on an increase
in imports that is " relative to domestic production ") and Article 4.2(a) (which requires the
investigating author ity to evaluate increased imports in "relative terms", without defining the
notion of "relative terms") , the expression "relative terms" in Article 4.2(a) should not be
construed as limiting the comparison of increased imports to domestic production .144 Indonesia
also submits that the Final Disclosure Report contains a reasoned and adequate explanation of how
all of the various injury factors supported KPPI's overall conclusion that the increased imports of
galvalume threatened to cause serious injury to the domestic industry.145
7.5.3.2 Relevant law
7.72. Serious injury and threat of serious injury are defined in Article 4.1 of the Safeguard
Agreement as follows:
(a) "serious injury" shall be understood to mean a significant overall impairment in
the position of a domestic industry;
(b) "threat of serious injury" shall be understood to mean serious injury that is
clearly imminent, in accordance with the provisions of paragraph 2. A determination of
the existence of a threat of serious injury shall be based on facts and not m erely on
allegation, conjecture or remote possibility.
7.73. The plain language of Articles 4.1(a) and (b) establishes that a determination of threat of
serious injury must be based on a finding that serious injury, i.e. a significant overall impairment
in the position of the domestic industry, is clearly imminent. Serious injury has been interpreted to
mean a "very high standard" of injury, "much higher" than the standard of material injury
contemplated under the AD and SCM Agreements. 146 The difference between a finding of "serious
injury" and a "threat of serious injury" is not in terms of the degree or significance of injury itself,
but rather whether injury is already occurring or, although not presently occurring, will occur soon.
In other words, w hereas a fi nding of "serious injury" implies that a significant overall impairment
in the position of the domestic industry has already materialized, a determination of "threat of
serious injury" means that such a situation has yet to occur, but is "clearly imminent".147

141 Complainants' first written submission, paras. 5.77-5.87; second written submission,
paras. 2.60-2.73; response to Panel question Nos. 16, 17, and 70; and comments on Indonesia's response to
Panel question Nos. 64, 65, and 67.
142 Indonesia's first written submission, para. 139; response to Panel question No. 22; and second
written submission, paras. 71-75.
143 Indonesia's first written submission, paras. 124 and 125; response to Panel question Nos. 26 and 27.
Indonesia argues, inter alia, that the absence of any textual reference to "domestic production" in the
requirement in Article 4.2(a) to evaluate increased imports "in relative terms" means that a competent
authority is left with a discretion to determine whether to examine imports relative to domestic production
and/or consumption in any given investigation.
144 Indonesia's first written submission, paras. 128, 130, and 131; opening statement at the second
145 Indonesia's first written submission, paras. 134-138; second written submission, paras. 81-84; and
response to Panel question Nos. 64-68.
146 Appellate Body Report, US – Lamb, paras. 124-126.
147 Appellate Body Report, US – Lamb, para. 125.
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7.74. In making a determination of a threat of serious injury , a competent authority must
demonstrate, on the basis of facts rather than allegations, conjecture or remote possibility , that
serious injury is highly likely to occur in the very near future. Article 4.2(a) identifies a number of
factors that must be evaluated for this purpose. This provision reads:
In the investigation to determine whether increased imports have caused or are
threatening to cause serious injury to a domestic industry under the ter ms of this
Agreement, the competent authorities shall evaluate all relevant factors of an
objective and quantifiable nature having a bearing on the situation of that industry, in
particular, the rate and amount of the increase in imports of the product con cerned in
absolute and relative terms, the share of the domestic market taken by increased
imports, changes in the level of sales, production, productivity, capacity utilization,
profits and losses, and employment.
7.75. In the context of a determination of threat of serious injury, the fact -based evaluation that
is called for in Article 4.2(a) "must provide the basis for a projection that there is a high degree of
likelihood of serious injury to the domestic industry in the very near future". 148 Data pertaining to
the end of the POI will provide "an essential and, usually, the most reliable basis" 149 for making
such a determination. Simply comparing end points will not suffice, particularly when evaluating
the rate and amount of the increase in imports in absolute an d relative terms. 150 However, any
short-term trend associated with the most recent data must be reviewed in the context of the
longer-term trends of the entire POI. 151 Thus, a competent authority's threat of serious injury
determination must be based on an evaluation that considers and gives proper weight to data from
the entire POI.
7.76. Similarly, while Article 4.2(a) requires that the existence of injury be determined on the
basis of an examination of at least all of the listed factors 152, each one does not necess arily have
to show negative development. It follows from the definition of serious injury that, ultimately,
what must be shown is that the overall position of the domestic industry has been significantly
impaired, not simply that certain relevant factors a re showing declines. 153 Thus, where a
competent authority's evaluation of injury factors reveals both negative and positive performance,
a reasoned and adequate explanation must be provided of why the totality of the factors
demonstrates that the overall position of the domestic industry is significantly impaired.154
7.5.3.3 Relevant facts
7.77. KPPI's injury and price effects analyses are set out in paragraphs 40 -51 of the Final
Disclosure Report155, where a number of factors are examined , including the rate of increase in
imports in absolute terms, the domestic market shares held by the petitioner s and imports, and
changes in the petitioner s' levels of stocks, sales, production, production capacity, production
costs, selling prices, productivity, profits, and employment. KPPI's injury determination contains no
findings with respect to the amount or rate of increase in imports relative to domestic production.
However, KPPI discussed the rate of increase in imports relative to domestic consumption.156
7.78. KPPI's determination identifies a number of indicators showing positive trends over the POI.
These include the finding that the "trend" in national consumption was an increase of 34%
between 2008 and 2012, with the "trends" in the petitioners' production, sales and employment

148 Appellate Body Report, US – Lamb, para. 136.
149 Appellate Body Report, US – Lamb, para. 137.
150 Appellate Body Report, Argentina – Footwear (EC), para. 129.
151 Appellate Body Report, US – Lamb, para. 138.
152 Appellate Body Report, Argentina – Footwear (EC), paras. 136 and 137.
153 Appellate Body Reports, Argentina – Footwear (EC), para. 139; and US – Lamb, fn 86.
154 Panel Report, Dominican Republic – Safeguard Measures, paras. 7.304-7.314.
155 The introductory section of the Final Disclosure Report reveals that KPPI defined the domestic
industry investigated for the purpose of the serious injury analysis by reference to the two petitioners, which it
found to account for 77% of total domestic production of the like product. (Final Disclosure Report,
(Exhibit IDN-8), para. 8).
156 Final Disclosure Report, (Exhibit IDN-8), para. 41.
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levels being increases of , respectively, 32%, 29% , and 16% over the same period .157 The
petitioners' installed capacity "increased significantly" due to "the beginning of effective operation"
of one of the petitioner companies in 2011 and the addition of capacity by the other petitioner
company, in both cases to "anticipate the increase of national consumption" .158 Profits were
achieved in two of the five years of the POI – 2010 and 2011, while losses were reported in the
other three years.159
7.79. KPPI's determination also identifies a number indicators of performance which showed
negative trends. These include the "trend" in the petitioners' stocks, which increased 75%, and the
"trend" in the petitioners' selling prices, which declined 4.5% over the POI 160, with import prices
undercutting the petitioner s' sales prices in all years except in 2008. 161 As noted, l osses were
incurred in three years of the POI 162, and employment fell between 2011 and 2012. 163 The Final
Disclosure Report also reveals that the petitioners were operating be low 100% capacity utilization
and consistently below the levels of production they had targeted to achieve in each of the years
of the POI.164
7.80. In terms of market shares, the Final Disclosure Report states that the "trend" in the share of
domestic consumption held by the petitioner s fell by 4% over the POI , while the "trend" in the
share of domestic consumption held by imports grew by 6% over the same period. Evidence
submitted by the complainants derived from information in the Fina l Disclosure Report and
Exhibit IDN-41 shows that between 2010 and 2012, the petitioners experienced the highest
market share increase relative to imports and other domestic producers. 165 In other words, the
petitioners' market share grew at a faster rate than those of imports and other domestic producers
at the end of the POI. The same evidence also shows that the petitioners' market share between
2010 and 2012 was below their market share in 2008 and 2009. Moreover, the market share held
by imports increased in all years with the exception of 2008-2009.
7.81. Indonesia denies the accuracy of the complainants' evidence, asserting that it does not
reflect the actual figures used in KPPI's confidential analysis. 166 Indonesia has not, however,
revealed the actual figures used by KPPI, and in its submissions refers only to the indexed,
non-confidential, numbers identified in the Final Disclosure Report. In the light of the information
contained in Exhibit IDN-41 and the complainants' explanation of their calculation methodology 167,
we understand the evidence submitted by the complainants' in Exhibit TPKM/VN M-35 (BCI) to
accurately reflect figures that, mathematically, appear to have been the basis of the indexed
numbers used in KPPI's non-confidential analysis.
7.82. During the investigation, an association of importers of galvalume submitted that one of the
petitioner companies (PT. NS Bluescope Indonesia) produced galvalume mainly for its own captive
production of painted galvalume, and that this caused a deficit in domestic supply of the
investigated product.168 KPPI responded by confirming that Bluescope produced both "bare" and
"painted" galvalume. However, KPPI noted that "those products were produced based on different
manufacturing order and production plan" and that the "production process for those products

157 Final Disclosure Report, (Exhibit IDN-8), Tables 8, 9, and 14, and paras. 43-44 and 49. The
percentage values are labelled as "trends" in the relevant tables, but described in the associated paragraphs as
"increases", "decreases", or "declines" without being identified as "trends". Indonesia has explained that the
POI "trend" values were determined using the LOGEST function in Excel. (Indonesia's response to Panel
question No. 23).
158 Final Disclosure Report, (Exhibit IDN-8), para. 44.
159 Final Disclosure Report, (Exhibit IDN-8), Table 13.
160 Final Disclosure Report, (Exhibit IDN-8), Tables 12 and 15, and paras. 47 and 50. (The percentage
values are labelled as "trends" in the relevant tables, but described in the associated paragraphs as
"increases", "decreases", or "declines" without being identified as "trends").
161 Final Disclosure Report, (Exhibit IDN-8), para. 50.
162 Final Disclosure Report, (Exhibit IDN-8), para. 48.
163 Final Disclosure Report, (Exhibit IDN-8), para. 49.
164 Final Disclosure Report, (Exhibit IDN-8), Table 11 and para. 46.
165 Recalculation of sale volumes and market shares of imports and of the petitioners' products,
(Exhibit TPKM/VNM-35) (BCI), Tables 2 and 3.
166 Indonesia's response to Panel question No. 64, para. 39; comments on complainants' response to
Panel question No. 69, para. 44.
167 Complainants' response to Panel question No. 69.
168 Final Disclosure Report, (Exhibit IDN-8) para. 25.b.
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were also different". 169 There is no further discussion of the extent to which the petitioners
produced bare galvalume for their own captive production of painted galvalume in the Final
Disclosure Report.
7.83. The complainants accept that bare galvalume cannot be used to produce painted galvalume
once it has been "treated with anti -finger resin". 170 Indonesia notes that in order to produce
painted galvalume, bare galvalume "needs to go through a 'skin pass mill' to create a rough
surface, which is not requi red in the production of bare galvalume". 171 The Final Disclosure Report
describes the production process of the investigated product to involve the following two forms of
"surface treatment":
Skin Pass Mill to repair the surface, specifically for painting products.
Anti Finger Print to cover the goods with resin to have the Anti Finger Print function so
it does not leave any marks when the goods was touched and it can be utilized as
lubricant during the forming process, which can be utilized as aesthetics if it is added
with color pigments.172
7.84. Finally, although KPPI's "causal link" analysis states that the petitioners "suffered serious
injury" as a result of the surge in imports 173, it is apparent from the concluding paragraphs of the
Final Disclosure Report that KPPI's ultimate injury finding is that the "Petitioner[] is suffering from
the threat of serious injury".174 Indonesia's notification to the WTO confirms that the basis for the
safeguard measure is a finding of threat of serious injury. However, the Final Disclosure Report
does not discuss the extent to which the findings with respect to the injury factors, or any other
considerations, demonstrate that "serious injury" was " clearly imminent ". Indeed, no explicit
finding that "serious injury" was "clearly imminent" is set out in the Final Disclosure Report.
7.5.4 Causation
7.5.4.1 Parties' arguments
7.85. The complainants claim that KPPI's determination of causation was inconsistent with
Article XIX:1(a) of the GATT 1994 and Articles 2.1, 3.1, 4.2(b), and 4.2(c) of the Agreemen t on
Safeguards because KPPI failed to provide a reasoned and adequate explanation of its findings in
relation to: (a) the coincidence in time between the increased imports of galvalume and the threat
of serious injury, in light of the conditions of compet ition in the Indonesian market; and ( b) the
impact of factors other than imports of galvalume on the situation of the domestic industry. 175 In
particular, according to the complainants, KPPI's causation finding rests entirely on an
unsubstantiated assertion about the coincidence in time between an alleged decrease in market
share of the domestic industry relative to imports – an assertion the complainants maintain is, in
any case, contradicted by the data from the POI. The complainants further argue that KPPI failed
to properly analyse and explain how factors other than imports of galvalum e (such as competition
from other domestic producers, capacity investments, anti -dumping duties and the entry of a new
domestic producer in 2011) contributed to serious injury, and how the effects of such factors were
not attributed to the imports of galvalume.176
7.86. Indonesia argues that KPPI properly demonstrated the existence of a causal link between
the increased imports of galvalume and the threat of serious injury. Indonesia submits that the
data relied upon in the Final Disclosure Report demonstrate a temporal coincidence between, on
the one hand, the increased market share of imports and, on the other hand, the

169 Final Disclosure Report, (Exhibit IDN-8), para. 26.b.
170 Complainants' response to Panel question No. 70, para. 1.61.
171 Indonesia's opening statement at the second meeting with the Panel, para. 45.
172 Final Disclosure Report, (Exhibit IDN-8), para. 34.
173 Final Disclosure Report, (Exhibit IDN-8), para. 62
174 Final Disclosure Report, (Exhibit IDN-8), paras. 63-65.(emphasis added)
175 Complainants' first written submission, paras. 5.94, 5.105-5.110, and 5.114; opening statement at
the first meeting of the Panel, paras. 5.1-5.4.
176 Complainants' response to Panel question Nos. 28 and 30; second written submission,
paras. 2.95-2.104; opening statement at the second meeting of the Panel, paras. 5.1-5.5; and comments on
Indonesia's response to Panel question No. 71, para. 1.38, and No. 72, para. 1.39.
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petitioners' decreased market share, increased inventories, and losses, thereby justifying KPPI's
causation findings. 177 Indonesia rejects the complainants' criticisms of KPPI's non -attribution
analysis, arguing that while KPPI did not take into account all relevant factors (which Indonesia
accepts "might" have included those identified by the complainants), KPPI did, according to
Indonesia, consider "the most relevant factors", thereby fulfilling the requirements of Article 4.2(b)
of the Agreement on Safeguards. 178 In any case, Indonesia submits that certain findings made by
KPPI demonstrate that the non-attribution factors identified by the complainants did not cause any
injury to the petitioners.179
7.5.4.2 Relevant law
7.87. Article 4.2(b) of the Agreement on Safeguards provides as follows:
The determination referred to in subparagraph (a) [of Article 4.2] shall not be made
unless this investigation demonstrates, on the basis of objective evidence, the
existence of the causal link between increased imports of the product concerned and
serious injury or threat thereof. When factors other than increased imports are
causing injury to the domestic industry at the same time, such injury shall not be
attributed to increased imports.
7.88. Under the first sentence of Article 4.2(b), competent authorities are required to establish a
"genuine and substa ntial relationship of cause and effect" between the increased imports and
serious injury 180 – that is, "a relationship of cause and effect such that increased imports
contribute to 'bringing about', 'producing' or 'inducing' the serious injury". 181 The Agreement on
Safeguards does not prescribe any particular method or analytical tool for making this
determination.182 However, it is recognized that consideration of the temporal relationship between
"movements" in the volume and market share of imports and "moveme nts" in the injury factors
will be central to a causation analysis and determination. 183 Thus, in previous disputes under the
Agreement on Safeguards, panels called upon to examine the merits of a competent authority's
causation findings have examined whethe r upward trends in imports coincided with downward
(i.e. worsening) trends in the injury factors, and if not, whether an adequate explanation was
provided as to why the data nevertheless show causation.184
7.89. The second sentence of Article 4.2(b) sets out the requirement to ensure that injury caused
to the domestic industry by factors other than increased imports is not attributed to the increased
imports. It is well established that in order to comply with this requirement, a competent authority
must separate and distinguish the injurious effects of the increased imports from the injurious
effects of other factors causing injury to the domestic industry at the same time. 185 Competent
authorities must not only "identify" the nature and extent of the injurious effe cts of the known
factors other than increased imports, but they must also "explain" satisfactorily the nature and
extent of the injurious effects of those other factors as distinguished from the injurious effects of
increased imports. 186 However, the need to separate and distinguish the effects caused by
increased imports and the effects caused by other factors " does not necessarily imply … that
increased imports on their own must be capable of causing serious injury, nor that injury caused
by other factors m ust be excluded from the determination of serious injur y".187 The causation

177 Indonesia's first written submission, para. 162; opening statement at the first meeting of the Panel,
para. 52; and opening statement at the second meeting of the Panel, para. 54.
178 Indonesia's first written submission, paras. 163-165; second written submission, paras. 93-97.
179 Indonesia's first written submission, paras. 163-167; opening statement at the first meeting of the
Panel, para. 54; response to Panel question Nos. 32, 33, and 71-73; second written submission, paras. 94-97;
and opening statement at the second meeting of the Panel, paras. 56-59.
180 Appellate Body Reports, US – Lamb, para. 179; and US – Steel Safeguards, para. 488.
181 Appellate Body Report, US – Line Pipe, para. 209 (referring to Appellate Body Report, US – Wheat
Gluten, paras. 67 and 68).
182 Panel Reports, US – Steel Safeguards, paras. 10.294 and 10.296; and Korea – Dairy, para. 7.96.
183 Appellate Body Report, Argentina – Footwear (EC), para. 144.
184 See, e.g. Panel Reports, US – Wheat Gluten, paras. 8.95-8.102; and Argentina – Footwear (EC),
para. 8.237-8.246.
185 Appellate Body Reports, US – Wheat Gluten, para. 68; US – Lamb, para. 179; and US – Line Pipe,
para. 215.
186 Appellate Body Report, US – Line Pipe, para. 215.
187 Appellate Body Report, US – Wheat Gluten, para. 70. (emphasis original)
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requirement in Article 4.2(b) "can be met where the serious injury is caused by the interplay of
increased imports and other factors".188
7.90. A competent authority's non -attribution analy sis must establish explicitly, through a
reasoned and adequate explanation, that injury caused by other factors is not attributed to
increased imports. Such "explanation must be clear and unambiguous. It must not merely imply or
suggest an explanation. It must be a straightforward explanation in express terms". 189 Moreover,
in cases involving a threat of serious injury , a competent authority's analysis must "include a
forward-looking assessment of whether other factors currently causing injury to the domestic
industry will continue to do so in the very near future".190
7.91. Finally, a competent authority's causation determination must analyze the conditions of
competition between the imported and domestic products in the context of determining the
existence of a cau sal link between the increased imports and serious injury to the domestic
industry.191 The factors to be considered in the requisite analysis may include not only those
mentioned in Article 4.2(a), but also factors such as price, physical product characteristics, quality,
service, delivery, technological developments, consumer tastes, and other supply and demand
factors in the market.192
7.5.4.3 Relevant facts
7.92. KPPI's non -attribution and causation analyses are set out in Sections D and F of the
Final Disclosure Report, as well as in KPPI's specific responses to various submissions made by
interested parties. Section D, which is headed "other factors", examines the impact of three factors
"other than the surge of imports" of galvalume on the situation of the domestic indu stry. Section F
is headed "causal link" and contains KPPI's analysis and final determination that the "surge in
imports" caused a threat of serious injury.
7.5.4.3.1 "Other Factors"
7.93. The first "other factor" examined in Section D is the evolution of the domestic indu stry's
production capacity over the POI relative to national consumption. During the course of the
investigation, a number of interested parties had argued to KPPI that the domestic industry could
not satisfy domestic demand. 193 The indexed data presented in Table 17 reveal that the installed
production capacity of the domestic industry stayed the same in the first two years of the POI, but
then increased more than five -fold in the last three years of the POI. At the same time, national
consumption of galvalume decreased between 2008 and 2009, but thereafter increased in the last
three years of the POI. On the basis of the indexed data presented in Table 17, KPPI concluded
that: (a) "the domestic industry was able to meet … national demand"; (b) the "increase in
production capacity by domestic industry was in line with the increase of national consumption,
and thus production capacity was not a factor that caused injury to the Petitioners"; and (c) "the
surge of imports was not caused by the domestic industry's inability to meet national
consumption".194
7.94. The second "other factor" examined in Section D is the evolution of the petitioners' sales
over the POI. The indexed data presented in Table 18 show that PT. NS Bluescope made fewer
sales in 2009 and 2010 compare d with 2008, but that its sales increased in each of the remaining
two years of the POI and in 2012 were 70% above the 2008 level. The data also show that the
second petitioner, PT. NS Sunrise Steel , made its first sales only in 2011 and that its sales mor e

188 Appellate Body Reports, US – Wheat Gluten, paras. 67 and 68; and US – Line Pipe, para. 209.
189 Appellate Body Report, US – Line Pipe, para. 217.
190 Panel Report, Ukraine – Passenger Cars, para. 7.319. (emphasis added)
191 Panel Reports, Argentina – Footwear (EC), paras. 8.229 and 8.250; US – Wheat Gluten, paras. 8.91
and 8.108; US – Lamb, para. 7.232; and US – Steel Safeguards, paras. 10.313-10.321; and Appellate Body
Reports, Argentina – Footwear (EC), para. 145; and US – Wheat Gluten, paras. 76-78.
192 Panel Report, US – Steel Safeguards, paras. 10.318-10.320 (referring to Appellate Body Report,
US – Wheat Gluten, para. 73; and Panel Reports, Argentina – Footwear (EC), para. 8.251; and Korea – Dairy,
para. 7.51).
193 Final Disclosure Report, (Exhibit IDN-8), paras. 19e (Hoa Sen Group), 25a (importers' association),
and 27a (importers' association).
194 Final Disclosure Report, (Exhibit IDN-8), Table 17 and para. 55.
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than doubled in the following year. After noting that the sales of both petitioners increased
between 2011 and 2012, KPPI states that the data shows "that there is no competition between
Petitioners since each of the Petitioners' sales increased". Thus, KPPI concludes that "competition
between the Petitioners was not the factor that caused the threat of serious injury".195
7.95. The final "other factor" discussed in Section D is the fact that the petitioners produced
galvalume in accordance with "standardization" "based on SNI and International Organization for
Standardization (ISO)". KPPI concludes from this fact that "domestic product was able to compete
with imports".196 During the investigation, Viet Nam argued that "representative of the association
stated that Galvalum from Vietnam has better quality and already obtained the SNI certificate".197
7.96. In the final paragraph of Section D, KPPI states that it "did not find any other factors
causing serious injury to the petitioner, other than the surge of imports" of galvalume.
7.97. KPPI's examination of "other factors" does not specifically address any of the four "other
factors" which the complainants submit should have been considered. First, the
complainants' argue that KPPI should have examined the impact of competition f rom domestic
producers other than the petitioners . In this respect, we note that the data presented by the
complainants in Exhibit TPKM/VN M-35 (BCI) reveals that during the only two years when the
market share of the petitioners' declined (2009 and 2010), the market share of Indonesian
producers other than the petitioners doubled, while the market share of imports declined in 2009
before returning in 2010 to approximately the same level as reported for 2008. However, the
market share of Indonesian producers other than the petitioners fell in the last two years of the
POI, dropping below the 2008 level in 2012, while the market share of imports and the petitioners
both increased in the last two years of the POI. One of the exporters, the Hoa Sen Group, argued
to KPPI that the injury suffered by the domestic industry was caused by factors other than the
increased imports, including "domestic competition".198 KPPI responded by referring to the analysis
of "other factors" in Section D of the Final Disclosure Report 199, which as described above focused
on the issue of competition between the petitioners , and not between the petitioners and other
domestic producers.
7.98. Second, according to the complainants, KPPI's examination of installed capacity should have
involved more than simply assessing whether there was sufficient domestic production capacity to
satisfy total domestic demand. For the complainants, KPPI's analysis should have also determined
the extent to which losses could have been attributed to the expansion of the installed capacity.200
The data presented in Exhibit TPKM/VN M-35 (BCI) reveal that there was a notable market
presence of imports in each of the five years of the POI, ranging from 35% in 2009 (the lowest
point) to 52% in 2012 (the highest), with values of around 45% in 2008, 2010, and 2011.
Moreover, according to the indexed figures presented in Table 17 of the Final Disclosure Report,
the domestic industry's installed capacity grew five -fold over the course of the POI, exceeding the
level needed to sati sfy the entirety of national consumption in both 2011 and 2012. During the
course of the investigation, an association of importers of galvalume argued that "[e]xpansion
from PT. NS Bluescope Indonesia has affected their cash flow significantly". 201 KPPI responded by
stating that "PT. NS Bluescope Indonesia expanded in 2006. However, the performance of PT NS
Bluescope Indonesia that supposedly increased, in fact declined due to the surge of imports …". 202
One of the exporters, the Hoa Sen Group, argued that the injury suffered by the domestic industry
was caused by factors other than the increased imports, including "expansion, addition in
production capacity".203 KPPI responded to this submission by referring to the analysis of "other
factors" in Section D of the Final Disclosure Report.204

195 Final Disclosure Report, (Exhibit IDN-8), Table 18 and para. 56.
196 Final Disclosure Report, (Exhibit IDN-8), para. 57.
197 Final Disclosure Report, (Exhibit IDN-8), para. 19m.
198 Final Disclosure Report, (Exhibit IDN-8), para. 19k.
199 Final Disclosure Report, (Exhibit IDN-8), para. 14d.
201 Final Disclosure Report, (Exhibit IDN-8), para. 25f.
202 Final Disclosure Report, (Exhibit IDN-8), para. 26f.
203 Final Disclosure Report, (Exhibit IDN-8), para. 19k.
204 Final Disclosure Report, (Exhibit IDN-8), para. 14d.
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7.99. Third, the complainants submit that KPPI's non -attribution analysis should have considered
the impact on the costs of the domestic industry of the anti -dumping duties applied by Indonesia
on imports of certain raw materials used in the production of galvalume. We note that this
particular issue was raised before KPPI by the Indonesian Iron and Steel Association, which
supported the investigation. In particular, the Indonesian Iron and Steel Association stated that it
was "the impo sition of anti -dumping measure (BMAD) on the imported CRC, which was the main
raw materials to produce Galvalum, that caused the increase of price and lower the competition
level, and has slowly and adversely affected the domestic industry".205 KPPI did not respond to this
submission, nor otherwise explicitly address the impact of the anti -dumping duties on the
performance of the domestic industry in the Final Disclosure Report.
7.100. Fourth, according to the complainants, KPPI's non -attribution analysis should hav e
considered the impact of the fact that o ne of the two petitioners was a new entrant that started
making sales only in 2011. During the investigation, an association of importers of galvalume
argued that "PT. Sunrise Steel only started to operate in 2010 and thus has not obtained the
optimal result, and has not even reach Break Even Point (BEP). Rendering the current safeguards
investigation will be more irrelevant". 206 KPPI responded to this submission by noting that "the
surge in imports … reached the high est increase in 2011 and 2012" and that the "effect of imports
also suffered by PT. Sunrise Steel, which can't obtain the optimal result and reach BEP". 207 There
is no other discussion or analysis of the impact of this fact on the petitioners' combined
performance statistics anywhere in the Final Disclosure Report.
7.5.4.3.2 "Causal link"
7.101. Section F of the Final Disclosure Report sets out KPPI's causation analysis and conclusions
in five sentences contained in paragraphs 60 to 63 . KPPI's discussion begins by noting that
"national consumption" increased during the POI, but that "it could not be optimized by the
Petitioners". KPPI then goes on to find that the "trend" in the petitioners' market share decreased
"because it was absorbed by import market shares … where there is [a] surge of import[s] … in
absolute terms", and that this "has caused their stock to increase and also caused them to suffer
loss".208 In this light, and recalling its injury and non -attribution findings, KPPI concludes that the
"surge of imports of Galvalum was the cause of threat of serious injury suffered by Petitioners".209
7.102. The indexed data presented in Table 7 reveal that the "trend" in the petitioners' market
share over the POI was a decrease of 4 percentage points, while the "trend" in the market share of
imports was an increase of 6 percentage points. 210 The uni ndexed data reported in
Exhibit TPKM/VNM-35 (BCI) shows that during the most recent part of the POI, 2011 and 2012,
the petitioners' market share actually increased by almost twice as many percentage points as the
market share of imports. 211 The same unindexed data also shows that the petitioners' market
share between 2010 and 2012 was below their market share in 2008 and 2009. Moreover, the
market share held by imports increased in all years with the exception of 2008-2009.
7.103. The complainants submit that KPPI's causation analysis should have explored the extent to
which the introduction in 2009 of a new technical standard by Indonesia's National Standardization
Agency impacted competition on the dome stic market. This factor had been raised by an
association of steel manufacturers from Chinese Taipei , which had argued that the new standard
created a "monopolistic" position for the domestic industry, improving their ability to raise
prices.212 The Final Disclosure Report neither reports nor addresses the exporters' allegation.

205 Final Disclosure Report, (Exhibit IDN-8), para. 12b.
206 Final Disclosure Report, (Exhibit IDN-8), para. 25f.
207 Final Disclosure Report, (Exhibit IDN-8), para. 26f.
208 Final Disclosure Report, (Exhibit IDN-8), paras. 60 and 61.
209 Final Disclosure Report, (Exhibit IDN-8), para. 63.
210 Final Disclosure Report, (Exhibit IDN-8), Table 7 and para. 41.
211 Recalculation of sale volumes and market shares of imports and of the petitioners' products,
(Exhibit TPKM/VNM-35) (BCI), Table 2.
212 Complainants' response to Panel question 30; second written submission, para. 2.93; and Comments
on the Petition and Information Submitted by Taiwan Steel & Iron Industry Association, March 2013,
(Exhibit TPKM/VNM-31), pp. 10 and 11.
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7.5.5 Application of the specific duty
7.5.5.1 Parties' arguments
7.104. The complainants claim that Indonesia acted inconsistently with its obligations under
Articles 2.1, 3.1, 4.2(a), and 4.2(b) of the Agreement on Safeguards by deciding, on the grounds
of national interest, to apply the safeguard measure on a narrower range of types of galvalum e
(i.e. galvalume not exceeding 0.7mm in thickness) compared with the types investigated by KPPI
(i.e. galvalume not exceeding 1.2mm in thickness), in the absence of any reasoned and adequate
explanation by the competent authority of how the narrowing down of the final safeguard
measure's product scope satisfied the increased imports, serious injury and causality
requirements.
7.105. The complainants argue that the narrowing of the product scope in the application of the
specific duty in the absence of adequate explanation was inconsistent with Articles 2.1, 4.2(a), and
4.2(b) of the Agreement on Safeguards because Indonesia failed to ensure symmetry between the
investigated product and the product subject to the applied safeguard measure and thus
disregarded the principle of parallelism.213 For the complainants, the principle of parallelism covers
both the situation in whi ch imports from certain Members are being excluded from the geographic
scope of the final safeguard measure as well as the situation in which certain products investigated
by the competent authority in the course of the safeguard investigation are being ex cluded from
the product scope of the final safeguard measure. 214 In the complainants' view, any discrepancy
between the product scope of the safeguard investigation and the product scope of the final
safeguard measure must be properly reasoned consistently w ith Articles 3.1 and Article 4.2(c) of
the Agreement on Safeguards.215
7.106. Indonesia submits that the principle of "parallelism" was developed in the context of WTO
disputes involving the Agreement on Safeguards in relation to exclusions based on the source of
imports, and that this principle cannot be extended to the present set of facts. 216 According to
Indonesia, were the Panel to accept the complainants' view, it would "open a 'Pandora's box'
where the principle of parallelism could be broadened even more in the future, especially in light of
similar languages or terms … found throughout the Agreement on Safeguards". 217 In any case,
Indonesia argues that its decision to narrow the scope of the products subject to the safeguard
measure for reasons of national inte rest is justified by the requirement in Article 5.1 of the
Agreement on Safeguards to apply a safeguard measure "only to the extent necessary to prevent
or remedy serious injury … and to facilitate adjustment".218
7.5.5.2 Relevant law
7.107. We understand the parties' argu ments to raise the following threshold legal questions
about the substance of, and relationship between, the obligations in Articles 2.1 and 5.1 of the
Agreement on Safeguards, which have never before been addressed in WTO dispute settlement:
a. Does the right granted in Article 2.1 to "apply a safeguard measure to a product" when it
has been demonstrated that " such product " is being imported in such increased
quantities and under such conditions as to cause serious injury , mean that a safeguard
measure must be applied on exactly the same product (and range of product types )
examined and found to satisfy the conditions for imposing a safeguard measure in the
underlying investigation?

213 Complainants' first written submission, paras. 5.115, 5.119, 5.126, 5.127, 5.130, 5.131, and 5.132;
response to Panel question No. 36; and second written submission, para. 2.116.
214 Complainants' response to Panel question No. 36.
215 Complainants' first written submission, paras. 5.126, 5.130, and 5.132; response to Panel
question No. 36; and second written submission, para. 2.115.
216 Indonesia's second written submission, paras. 102 and 103; opening statement at the
second meeting of the Panel, paras. 61-64.
217 Indonesia's second written submission, paras. 104-106; opening statement at the second meeting of
the Panel, paras. 65-67.
218 Indonesia's second written submission, paras. 108-113; opening statement at the second meeting of
the Panel, paras. 68-70.
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b. To what extent does Article 5.1 justify the application of a safeguard measure on a range
of product types narrower than the product types examined in the underlying
investigation and found to satisfy the conditions for the imposition of a safeguard
measure? Does Article 5.1 permit the application of a safeguard measure on a narrower
range of product types relative to the investigated product types , in the absence of any
finding that the narrower range of products itself satisfies the conditions for the
imposition of a safeguard measure?
7.108. Having decided that it is not necessary to ma ke any findings on the legal merits of the
complainants' claims under the Agreement on Safeguards in order to resolve this dispute, we
consider that we are equally not required to express any views with respect to these legal
questions. Nonetheless, as above, we will proceed to identify facts relevant to an evaluation of the
merits of the complainants' claims under the Agreement on Safeguards.
7.5.5.3 Relevant facts
7.109. The Final Disclosure Report reveals that KPPI's safeguard investigation covered imports of
"Galvalum", defined as "Flat-rolled products of iron or non-alloy steel … with t hickness not
exceeding 1,2 mm , under HS Code of 7210.61.11.00" .219 KPPI recommended that a safeguard
measure in the form of a duty be imposed on imports of galvalume defined in this mann er.220 The
analyses and findings in the Final Disclosure Report were focused on the defined product as a
whole, and did not include any consideration of a narrower range of product types.
7.110. The safeguard measure adopted pursuant to Regulation 137.1/PMK.011/2014 was applied
to a narrower range of products than those identified in KPPI's recommendation – specifically, to
"flat-rolled products of iron or non-alloy steel … with the t hickness up to 0,7 mm" falling under
HS code ex 7210.61.11.00.221 The decision to apply the safeguard measure to the narrower range
of product followed the completion of the national interest process described above. 222 Indonesia's
tariff classification system does not list a separate HS sub-heading for flat-rolled iron or non -alloy
steel products with a thickness of up to 0.7mm, making the availability of official import data for
this narrower range of product "virtually (almost) impossible".223
7.5.6 Notification
7.5.6.1 Parties' arguments
7.111. The complainants claim that Indonesia's notification to the Comm ittee on Safeguards of
26 May 2014 under Article 12.1(b) of the Agreement on Safeguards is the only relevant
notification for the purpose of assessing Indonesia's compliance with its obligations under Article
12.2, as this was the only notification made be fore the entry into force of the measure. The
complainants claim that this notification is inconsistent with Article 12.2 because it fails to provide
"all pertinent information", as required by that provision.224
7.112. Indonesia acknowledges that its notification of 26 May 2014 did not satisfy the
requirements of Article 12.2 in that it did not contain a precise description of the proposed
measure, its proposed date of introduction, and the expected duration and timetable for
progressive liberalization.225 However, according to Indonesia, information about these elements

219 Final Disclosure Report, (Exhibit IDN-8), para. 29.
220 Final Disclosure Report, (Exhibit IDN-8), paras. 64-66.
221 Regulation of the Minister of Finance of the Republic of Indonesia No. 137.1/PMK.011/2014 on
imposition of safeguarding duty against the import of flat-rolled products of iron or non-alloy steel
(22 July 2014), (Exhibit IDN-20), pp. 3 and 4. See also, Committee on Safeguards, Notification Under
Articles 9, 12.1(b), and 12.1(c), and Footnote 2 of the Agreement on Safeguards (28 July 2014),
G/SG/N/8/IDN/16/Suppl.1, G/SG/N/10/IDN/16/Suppl.1, G/SG/N/11/IDN/14, (Exhibit TPKM/VNM-5), p. 1.
222 Paras. 7.68 and 7.69.
223 Indonesia's first written submission, para. 192.
224 Complainants' first written submission, paras. 5.160-5.164; opening statement at the first meeting
of the Panel, paras. 8.1-8.3; second written submission, para. 2.138; and opening statement at the
second meeting of the Panel, para. 8.1.
225 Indonesia's first written submission, para. 241; opening statement at the first meeting of the Panel,
para. 70.
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did not exist until the Minister of Finance promulgated the implementing regulation on
15 July 2014 – that is, at the time that the final decision to apply the safeguard measure was
actually made. 226 Indonesia notes in this regard that, in such cases, the Technical Cooperation
Handbook on Notification Requirements issued by the WTO Committee on Safeguards states that
the notifying Member must indicate that such information is "not available" for the rel evant time.
Indonesia maintains that its notification of 26 May 2014 followed this guidance. 227 In any case,
Indonesia argues that to the extent that its notification of 26 May 2014 lacked "pertinent
information", its second Article 12.1(b) notification , dated 23 July 2014 , remedied that
deficiency.228 Moreover, Indonesia asserts that the timing of such notifications falls within the
purview of Article 12.1, and that the complainants have neither challenged the timing of
Indonesia's Article 12.1(b) notification nor questioned its timeliness. 229 In this connection, and
referring to the Appellate Body report in US – Wheat Gluten, Indonesia submits that Article 12.2
does not contain any obligation with respect to the timing of Article 12.1(b) notifications, which is
regulated by Article 12.1(b) itself.230
7.113. The complainants argue that Indonesia's notification of 23 July 2014 cannot rectify the
deficiencies in its notification of 26 May 2014 because it was made after the challenged safeguard
measure entered into force, an d according to the complainants, it follows from the specific
language of Article 12.2 and the related context of Articles 8.1 and 12.3 of the Agreement on
Safeguards, that all "pertinent information" required to be provided under Article 12.2 must be
provided prior to the entry into force of the safeguard measure. 231 Moreover, the complainants
submit that the Technical Cooperation Handbook on Notification Requirements does not support
Indonesia's position because it does not constitute a binding legal instru ment, a legal
interpretation of the notification obligations, or the context or purpose for the interpretation of the
provisions of the Agreement on Safeguards. In addition, the complainants argue that the parts
cited by Indonesia are drafted in general te rms and do not address the specific question of
whether Members may submit all pertinent information after the entry into force of the
measure.232 The complainants also submit that Indonesia's reliance on the Appellate Body report in
US – Wheat Gluten is misplaced because, in their view, the Appellate Body did not address the
question of whether, pursuant to Article 12.2, a Member is entitled to notify "all pertinent
information", or rectify deficiencies in its notification of a finding of serious injury unde r
Article 12.1(b) after it had already applied the safeguard measure. Instead, the Appellate Body
addressed a narrower question of whether a Member can submit its notification under
Article 12.1(c) after having decided to apply a safeguard measure. In the complainants' view, even
though the Appellate Body answered the latter question in the affirmative, this does not mean that
a Member is released from its obligation under Article 12.2 to submit all pertinent information prior
to the entry into force of the measure. A Member can comply with this obligation, for example, by
notifying all pertinent information under Article 12.1(b).233
7.5.6.2 Relevant law
7.114. Article 12.1 of the Agreement on Safeguards requires Members to "immediately notify" the
WTO Committee on Safeguar ds upon the occurrence of the following three
"events"234: (a) initiating an investigatory process relating to serious injury or threat thereof
(Article 12.1(a)); ( b) making a finding of serious injury or threat thereof ( Article 12.1(b));
and (c) taking a decision to apply or extend a safeguard measure (Article 12.1(c)).

226 Indonesia's first written submission, paras. 240 and 241.
227 Indonesia's first written submission, paras. 241 and 242; opening statement at the first meeting of
the Panel, paras. 70 and 71.
228 Indonesia's first written submission, para. 234; opening statement at the first meeting of the Panel,
para. 68; second written submission, para. 132; and opening statement at the second meeting of the Panel,
para. 77.
229 Indonesia's second written submission, para. 132.
230 Indonesia's opening statement at the first meeting of the Panel, paras. 67-69; second written
submission, paras. 130 and 131.
231 Complainants' first written submission, paras. 5.165-5.168; opening statement at the first meeting
of the Panel, paras. 8.4-8.7; response to Panel question No. 43; second written submission,
paras. 2.141-2.146; and opening statement at the second meeting of the Panel, para. 8.1.
233 Complainants' response to Panel question No. 44; second written submission, para. 2.150.
234 Appellate Body Report, US – Wheat Gluten, para 102.
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7.115. Article 12.2 sets out the required content of the notifications that must be made pursuant
to Articles 12.1(b) or 12.1(c). This provision reads, in relevant part, as follows:
In making the no tifications 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 thereof caus ed by increased imports, precise description of the
product involved and the proposed measure, proposed date of introduction, expected
duration and timetable for progressive liberalization.
7.116. Notifications made for purposes of Articles 12.1(b) and 12.1(c) must disclose "all pertinent
information", which includes evidence of serious injury or threat thereof caused by increased
imports, a precise description of the product involved and the proposed measure, the proposed
date of introduction, the expected durat ion of the measure and a timetable for progressive
liberalization. These items are "mandatory components " of such notifications, constituting the
minimum requirements that must be satisfied if a notification is to comply with Article 12.2.235
7.117. The "evidence of serious injury" that must be included in an Article 12.1(b) or 12.1(c)
notification has been interpreted to refer, " at a minimum, to the injury factors required to be
evaluated under Article 4.2(a)".236 Thus, "so far as evidence of serious injury or threat thereof
caused by increased imports is concerned, the relevant notification must include information about
each of the eight factors listed in Article 4.2 that are required to be evaluated", including the rate
and amount of the increase in imports of the product concerned in absolute and relative terms.237
7.118. Prior panels have interpreted Article 12.2 to impose an obligation to notify "all pertinent
information" before the associated safeguard measure enters into force so that affected Members
may consult on i t before it takes effect. 238 However, in US – Wheat Gluten, the Appellate Body
stated that Article 12.2 did not prescribe "when notifications [under Article 12.1(c)] must be
made", but rather, only " what detailed information must be contained in the notifica tions under
Article 12.1(b) and 12.1(c)" .239 According to the Appellate Body , "timeliness under 12.1(c) is
determined by whether a decision to apply or extend a safeguard measure is notified
'immediately'".240 Thus, for the Appellate Body, whether an Article 12.1(b) or 12.1(c) notification
satisfies the content requirements in Article 12.2 is a "separate question" which must be answered
by examining whether the notification contains "all pertinent information" that is "specifically
enumerated in Article 12.2".241
7.5.6.3 Relevant facts
7.119. Indonesia submitted three notifications to the WTO Committee on Safeguards in relation to
the challenged safeguard measure.
7.120. First, on 20 December 2012, Indonesia notified the initiation of the safeguard investigation
into imports of galvalume pursuant to Article 12.1(a) of the Agreement on Safeguards . This
notification was circulated to WTO Members on 8 January 2013.242
7.121. Second, on 26 May 2014, Indonesia notified , pursuant to Article 12.1(b), that it had made
a finding of serious injury or th reat of serious injury caused by increased imports of galvalume
("notification of 26 May 2014"). This notification did not contain a precise description of the
proposed measure, its proposed date of introduction, the expected duration and timetable for
progressive liberalization, or information about the rate and amount of the increase in imports of

235 Appellate Body Report, Korea – Dairy, para. 107.
236 Appellate Body Report, Korea – Dairy, para. 108.
237 Panel Report, Ukraine – Passenger Cars, para. 7.509.
238 Panel Reports, Ukraine – Passenger Cars, para. 7.521; Korea – Dairy, para. 7.120; and US – Wheat
Gluten, paras. 8.202, 8.205, and 8.206.
239 Appellate Body Report, US – Wheat Gluten, para. 123. (emphasis original)
240 Appellate Body Report, US – Wheat Gluten, para. 123.
241 Appellate Body Report, US – Wheat Gluten, para. 123.
242 WTO, Committee on Safeguards, Notification Under Article 12.1(a) of the Agreement on Safeguards
on initiation of an investigation and the reasons for it, G/SG/N/6/IDN/22, (Exhibit TPKM/VNM-2). There are no
issues in this dispute regarding this notification.
WT/DS490/R • WT/DS496/R

the subject product relative to domestic production. The notification did provide information with
respect to the rate and amount of the increase in imports of the subject product relative to
national consumption. The notification was circulated to WTO Members on 27 May 2014.243
7.122. Third, on 23 July 2014 (one day after the safeguard measure entered into legal effect) ,
Indonesia submitted one document intended to serv e as the following three separate and distinct
notifications: ( a) a supplementary notification to Indonesia's Article 12.1(b) notification of
26 May 2014; (b) a notification pursuant to Article 12.1(c) disclosing that Indonesia had taken a
decision to appl y a safeguard measure; and ( c) a notification pursuant to footnote 2 of Article 9
concerning the exemption of developing countries from the scope of the safeguard measure in
accordance with Article 9.1. One document constituting a ll three notifications w as circulated to
WTO Members on 28 July 2014. 244 This document reproduced the document submitted by
Indonesia, and contained a precise description of the proposed measure, its proposed date of
introduction, and information about the expected duration and timet able for progressive
liberalization. It did not provide information with respect to the rate and amount of the increase in
imports of the subject product relative to domestic production.
7.123. The Technical Cooperation Handbook on Notification Requirements issu ed by the WTO
Committee on Safeguards envisages that where not all of the information required under
Article 12.2 is available at the time of a "finding of serious injury or threat thereof" , a Member
making an Article 12.1(b) notification should indicate that the relevant information is "not
available".245 A Note on the cover page of the Handbook explicitly states that it "does not
constitute a legal interpretation of the notification obligations under the respective
Agreement(s)".246 Indonesia's notification of 26 May 2014 did not include such language or any
other explanation concerning the absence of the required information.
7.5.7 Consultations
7.5.7.1 Parties' arguments
7.124. The complainants claim that Indonesia acted inconsistently with Article XIX:2 of the
GATT 1994 and Article 12.3 of the Agreement on Safeguards by failing to provide them with an
adequate opportunity for consultations prior to the entry into force of the safeguard measure .
According to the complainants, Indonesia failed to satisfy its obligations under both provisions
because: (a) Indonesia did not respond to Chinese Taipei's reque sts for consultations;
(b) Indonesia did not respond quickly enough to Viet Nam's requests for consultations and, when it
did, the consultation dates proposed were after the "stip ulation" date of the safeguard measure;
and (c) Indonesia failed to disclose to both Viet Nam and Chinese Taipei all of the information
necessary to hold meaningful consultations under the terms of Article 12.3.247 In addition, the
complainants argue that In donesia's allegation that "critical circumstances" exist is not
substantiated by any evidence, and that no consultations were held immediately after the entry
into force of the measure.248
7.125. Indonesia argues that the facts demonstrate that the complainants wer e given an
adequate opportunity to hold consultations within the meaning of Article 12.3. First, Indonesia
recalls that all qualifying WTO Members were provided with an opportunity to hold consultations
when it explicitly invited all such Members to consul tations in its notification to the WTO
Committee on Safeguards of 26 May 2014, 56 days before the safeguard measure entered into

243 Committee on Safeguards, Notification Under Article 12.1(b) of the Agreement on Safeguards on
finding a serious injury or threat thereof caused by increased imports, G/SG/N/8/IDN/16,
(Exhibit TPKM/VNM-3).
244 Committee on Safeguards, Notification Under Articles 9, 12.1(b), and 12.1(c), and Footnote 2 of the
Agreement on Safeguards (28 July 2014), G/SG/N/8/IDN/16/Suppl.1, G/SG/N/10/IDN/16/Suppl.1,
G/SG/N/11/IDN/14, (Exhibit TPKM/VNM-5).
245 Technical Cooperation Handbook on Notification Requirements, Agreement on Safeguards,
WT/TC/NOTIF/SG/1, 15 October 1996 (Technical Cooperation Handbook), part III – G/SG/1, p. 2.
246 Technical Cooperation Handbook.
247 Complainants' first written submission, paras. 5.183-5.187; opening statement at the first meeting
of the Panel, para. 8.7; second written submission, paras. 2.162-2.174; and opening statement at the
second meeting of the Panel, paras. 9.1-9.5.
248 Complainants' opening statement at the second meeting of the Panel, para. 9.3.
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force. Second, Indonesia asserts that KPPI responded to Viet Nam's requests to hold consultations
in a timely manner, inviting its representatives to Jakarta on 8 and 10 July 2014. According to
Indonesia, consultations could not be held on these dates and had to be postponed to 20 August
and 27 October 2014 only because of Viet Nam's own internal administrative procedures.
Indonesia states that it could not have postponed the implementation of the measure while it
waited for Viet Nam to avail itself of the opportunity to consult, because of the "critical
circumstances and the urgency of the safeguard measure". 249 Indeed, according to Indonesia,
under Article XIX:2 of the GATT 1994, the alleged "critical circumstances" entitled it to impose a
provisional measure without prior consultation, provided that consultations were held immediately
afterwards.250 Third, Indonesia argues that in th e present situation, the only requests for
consultations that were relevant for the purpose of Article 12.3 were those made after KPPI's
determination of serious injury 251, noting furthermore that in the case of Chinese Taipei, the only
relevant request f or consultations was made on 24 October 2014 , long after the measure had
actually entered into force.252
7.126. Finally, Indonesia argu es that its notification satisfied the standards of Article 12.2 and
therefore rejects the complainants' assertion that it was impos sible to hold meaningful
consultations because of a lack of "pertinent information" in its Article 12.1(b) notification. In any
case, Indonesia submits that consultations may be adequate even in circumstances where prior
notifications are incomplete becaus e the purpose of consultations is to review the content of such
notifications.253
7.5.7.2 Relevant law
7.127. Article XIX:2 of the GATT 1994 reads, in relevant part, as follows:
Before any contracting party shall take action 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 and shall afford the CONTRACTING PARTIES and those
contracting parties having a substantial interest as exporters of the product concerned
an oppo rtunity to consult with it in respect of the proposed action. … In critical
circumstances, where delay would cause damage which it would be difficult to repair,
action under paragraph 1 of this Article may be taken provisionally without prior
consultation, on the condition that consultation shall be effected immediately after
taking such action.
Article 12.3 of the Agreement on Safeguards provides:

A Member proposing to apply or extend a safeguard measure shall provide adequate
opportunity for prior consul tations with those Members having a substantial interest
as exporters of the product concerned, with a view to, inter alia , reviewing the
information provided under paragraph 2, exchanging views on the measure and
reaching an understanding on ways to achie ve the objective set out in paragraph 1 of
Article 8.
7.128. Article 12.3 requires a Member proposing to apply a safeguard measure to provide
exporting Members with : (a) sufficient information ; and (b) time to allow for the possibility,
through consultations, for holding ( c) a meaningful exchange on the issues identified .254

249 Indonesia's first written submission, paras. 256-260; opening statement at the first meeting of the
Panel, paras. 74 and 75; second written submission, paras. 137 and 138; and opening statement at the
second meeting of the Panel, paras. 84-89.
250 Indonesia's first written submission, para. 267; second written submission, para. 139; and opening
statement at the second meeting of the Panel, para. 92.
251 Indonesia's opening statement at the second meeting of the Panel, para. 86.
252 Indonesia's first written submission, para. 257; opening statement at the first meeting of the Panel,
para. 76; and opening statement at the second meeting of the Panel, para. 89.
253 Indonesia's first written submission, paras. 262 and 263 (referring to Panel Report, Korea – Dairy,
para. 7.150); opening statement at the first meeting of the panel, paras. 78 and 79; and opening statement at
the second meeting of the Panel, para. 92.
254 Appellate Body Report, US – Wheat Gluten, para. 136.
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Information on the "proposed measure must be provided in advance of the consultations, so that
the consultations can adequately address that measure".255
7.129. The information that is needed to enable meaningful consultations to occur under
Article 12.3 is set out in the list of "mandatory components" identified in Article 12.2.256 An
exporting Member will not have been provided with an "adequate opportunity" to hold
consultations under Article 12.3 unles s, prior to those consultations, it has obtained, inter alia ,
sufficiently detailed information on the form of the proposed measure, including the nature of the
remedy.257
7.130. The requirement to provide sufficient time to allow for the possibility of a meaningf ul
exchange has been interpreted to mean that exporting Members should obtain the relevant
information sufficiently in advance to permit analysis of the measure, and consider the likely
consequences of the measure before it takes effect.258 An importing Member's failure to provide
relevant information sufficiently in advance of a safeguard measure taking effect is not excused by
the fact that the exporting Member may not have requested consultations during that inadequate
time-period.259 Moreover, the "prior co nsultations" envisaged by Article 12.3 need not be with
respect to a proposed measure that is identical, in every respect, to the one that is eventually
applied.260
7.131. The meaningful exchange that is called for under Article 12.3 "assumes that the importing
Member will enter into consultations in good faith and will take the time appropriate to give due
consideration to any comments received from exporting Members before implementing the
measure".261
7.132. Finally, Article 6 of the Agreement on Safeguards provides that in "critical circumstances
where delay would cause damage which it would be difficult to repair", a Member may impose a
"provisional" safeguard measure , which must be based on a preliminary determination that
increased imports have caused or are threatenin g to cause serious injury . A provisional safeguard
measure may only take the form of a tariff increase, and may not last more than 200 days. During
the duration of the provisional safeguard measure, the importing Member must comply with the
relevant requir ements set out in Articles 2 to 7 and 12 of the Agreement on Safeguards.
Article XIX:2 of the GATT 1994 exempts an importing Member from the need to hold prior
consultations before applying a provisional safeguard measure whilst requiring it to hold such
consultations immediately after imposing it.
7.5.7.3 Relevant facts
7.133. The challenged safeguard investigation was initiated on 19 December 2012. A public
hearing was held on 23 April 2013. During the entire investigation, the only document that KPPI
sent to the expor ters of Chinese Taipei and Viet Nam was the non -confidential version of the
Petition.262
7.134. Viet Nam sent a letter dated 24 April 2014 to KPPI , recalling Indonesia's notification
obligations under Articles 12.1 and 12.2 and requesting KPPI to disclose "the pertinent information
… once [KPPI's] findings have been made prior to any final determination during the course of the
investigation".263 The same letter also reminded KPPI of its obligation under Article 12.3 to hold
"pre-consultation[s] with … the Vietnam Government prior to the final determination of KPPI with a

255 Appellate Body Report, US – Wheat Gluten, para. 136. (emphasis original)
256 Appellate Body Report, US – Wheat Gluten, para. 136.
257 Appellate Body Report, US – Wheat Gluten, para. 137.
258 Appellate Body Report, US – Line Pipe, para. 108; and Panel Report, Ukraine – Passenger Cars,
para. 7.534.
259 Appellate Body Report, US – Line Pipe, para. 112.
260 Appellate Body Report, US – Line Pipe, para. 104.
261 Appellate Body Report, US – Line Pipe, para. 110. (fn omitted)
262 Request for Application of Safeguard Measure (Non-confidential Summary), 12 December 2012,
(Exhibit TPKM/VNM-11).
263 Letter dated 24 April 2014 from Viet Nam to KPPI, (Exhibit TPKM/VNM-6).
WT/DS490/R • WT/DS496/R

view to, inter alia, reviewing the information provided under [Article 12.2, and] exchanging views
on the measure".264
7.135. In its Article 12.1(b) notification of 26 May 2014, Indonesia indicated that it wa s "prepared
to consult with those Members having a substantial interest as exporters of the products
concerned".265 At the time, Viet Nam possessed a copy of the Final Disclosu re Report, which it had
received from the Hoa Sen Group on 23 May 2014. 266 The Hoa S en Group obtained the Final
Disclosure Report on 20 May 2014267, some two months after it had been issued, in response to its
request of 22 April 2014 for the "disclosure of non-confidential information".268
7.136. Viet Nam sent two letters to KPPI on 16 and 30 June 2014, which stated that Viet Nam
was ready to communicate with KPPI in relation to the safeguard investigation and explicitly
requested consultations under Article 12.3.269 Indonesia responded to Viet Nam's letters on
4 July 2014, inviting Viet Nam to Jakar ta to hold consultations on 8 July 2014. 270 However,
Viet Nam could not attend consultations on "such short notice" due to "strict internal procedures
for approval".271 By letter of 7 July 2014, Viet Nam requested that an alternative date be agreed
and that it was "looking forward to receiving a formal and original confirmation letter" from
KPPI.272
7.137. On the same day, Indonesia replied proposing a meeting on 10 July 2014. 273 Viet Nam
responded on 8 July 2014 specifying that it could not meet on 10 July for the same reasons as
before. Viet Nam explained that "our strict procedures for approval of overseas trip" requires "a
formal and original letter" from KPPI via post. 274 KPPI responded by letter of 10 July in which it
stated that "we sent you the official invitation letters by fax and e-mail".275
7.138. Viet Nam sent KPPI another letter on 17 July 2014 requesting that consultations be held on
31 July 2014, recalling Indonesia's obligations under Article 12.3.276 Six days later, on
23 July 2014, Viet Nam sent another letter to KP PI protesting about the lack of response to its
latest request for consultations, noting that the safeguard measure had already come into force
and that the Minister for Finance had "stipulated" the regulation imposing the safeguard measure
on 7 July – i.e. one day before th e date originally suggested by KPPI to hold consultations with
Viet Nam.277 Viet Nam claimed that Indonesia's conduct violated Article 12.3.
7.139. Indonesia responded to Viet Nam's 23 July letter on 25 July, revealing that it had not
received Viet Nam's letter of 17 July requesting consultations until the same day that it received
the letter of 23 July. Indonesia informed Viet Nam that due to Eid Mubarak holidays government
offices would be closed on 31 July, and proposed that consultat ions could be held instead on
4 August 2014.278 Viet Nam responded by letter of 4 August 2014, in which it requested that
consultations be held on 20 August 2014. 279 Indonesia confirmed this proposed date on
7 August 2014.280 Consultations were held on 20 August 2014 , and a second round of
consultations took place between KPPI and Viet Nam on 27 October 2014.281

264 Letter dated 24 April 2014 from Viet Nam to KPPI, (Exhibit TPKM/VNM-6).
265 Committee on Safeguards, Notification Under Article 12.1(b) of the Agreement on Safeguards on
finding a serious injury or threat thereof caused by increased imports, G/SG/N/8/IDN/16,
(Exhibit TPKM/VNM-3), section H, para. 3.
266 Complainants' response to Panel question No. 45.
267 Email dated 20 May 2014 from KPPI to Hoa Sen Group's counsel, (Exhibit TPKM/VNM-18).
268 Letter dated 22 April 2014 from Hoa Sen Group's counsel to KPPI, (Exhibit TPKM/VNM-16).
269 Letter dated 16 June 2014 from Viet Nam to KPPI, (Exhibit TPKM/VNM-7); and Letter dated
30 June 2014 from Viet Nam to KPPI, (Exhibit TPKM/VNM-8).
270 Letter dated 4 July 2014 from KPPI to Viet Nam, (Exhibit IDN-15).
271 Letter dated 7 July 2014 from Viet Nam to KPPI, (Exhibit IDN-16).
272 Letter dated 7 July 2014 from Viet Nam to KPPI, (Exhibit IDN-16).
273 Letter dated 7 July 2014 from KPPI to Viet Nam, (Exhibit IDN-17).
274 Letter dated 8 July 2014 from Viet Nam to KPPI, (Exhibit IDN-18).
275 Letter dated 10 July 2014 from KPPI to Viet Nam, (Exhibit IDN-19).
276 Letter dated 17 July 2014 from Viet Nam to KPPI, (Exhibit IDN-21).
277 Letter dated 23 July 2014 from Viet Nam to KPPI, (Exhibit IDN-23).
278 Letter dated 25 July 2014 from KPPI to Viet Nam, (Exhibit IDN-24).
279 Letter dated 4 August 2014 from Viet Nam to KPPI, (Exhibit IDN-25).
280 Letter dated 7 August 2014 from KPPI to Viet Nam, (Exhibit IDN-26).
281 Indonesia's first written submission, para. 255.
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7.140. Chinese Taipei requested Article 12.3 consultations on 30 April 2013, during the course of
KPPI's investigation 282, after having reminded KPPI of its "pre -consultations" obligations under
Article 12.3 on 11 January 2013.283 Chinese Taipei also requested Article 12.3 consultations at a
meeting of the Committee on Safeguards of 22 October 2013. 284 KPPI did not specifically contact
Chinese Taipei following its requests for con sultations, and Chinese Taipei did not subsequently
approach KPPI or any other Indonesian government entity again after 22 October 2013 to request
consultations. Chinese Taipei obtained the Final Disclosure Report on 7 October 2014 after
requesting it on 6 October 2014, more than six months after it had been issued.285
7.141. There is no evidence that KPPI adopted a "provisional safeguard" within the meaning of
Article XIX:2 of the GATT 1994 or Article 6 of the Agreement on Safeguards, or that such a
measure, assuming arguendo that it ever actually existed, was justified on the basis of "critical
circumstances".
8 CONCLUSIONS AND RECOMMENDATIONS
8.1. For the reasons set out in this Report, we conclude as follows:
a. the specific duty applied by Indonesia on imports of galval ume by means of Regulation
No. 137.1/PMK.011/2014 does not constitute a safeguard measure within the meaning
of Article 1 of the Agreement on Safeguards; and
b. the application of the specific duty on imports of galvalume originating in all but the
120 countries listed in Regulation No. 137.1/PMK.011/2014 is inconsistent with
Indonesia's obligation to afford MFN-treatment under Article I:1 of the GATT 1994.
8.2. Having concluded that the specific duty does not constitute a safeguard measure within the
meaning of Ar ticle 1 of the Agreement on Safeguards, there is no legal basis to support the
complainants' claims under the Agreement on Safeguards and the GATT 1994 with respect to the
specific duty as a safeguard measure. Accordingly, we dismiss the entirety of those claims.
8.3. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. Thus, to the extent that we have found the measures at issue to be
inconsistent with Article I:1 of the GATT 1994 , they have nullified or impaired benefits accruing to
Chinese Taipei and Viet Nam under that agreement.
8.4. The complainants have requested that were we to confirm the full extent of their complaint
against the specific duty as a safeguard measure , we should go on to exercise the discretion
accorded to panels under Article 19.1 of the DSU and suggest that Indonesia bring its safeguard
measure into conformity with its WTO obligation s by immediately withdrawing it. 286 Having found
that there is no legal basis to support the complainants' claims against the specific duty as a
safeguard measure, there is no need to consider the complainants' request. Accordingly, in the
light of our findi ng that the application of the specific duty is inconsistent with Indonesia's
obligations under Article I:1 of the GATT 1994, we recommend , pursuant to Article 19.1 of the
DSU, that Indonesia bring its measure into conformity with its obligations under the GATT 1994.