RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/Q2/LVA/2
10 December 1999
(99-5413)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(a) OF THE AGREEMENT
ON SAFEGUARDS ON INITIATION OF AN INVESTIGATION
AND THE REASONS FOR IT
AND
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD
MEASURE REFERRED TO IN ARTICLE 6
Replies to Questions Posed by POLAND1
Regarding the Notification of LATVIA2
The following communication, dated 3 December 1999, has been received from the Ministry
of the Economy of the Republic of Latvia.
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Q1. Was the decision on the init iation of the investigation and the decision on the application
of the provisional safeguard measure taken after evaluation by the competent authorities of all
factors enumerated in Article 4.2(a) of the Agreement on Safeguards?
Reply
On 3 June 1999, Latvia notified the WTO of:
(i) the initiation of an investigation and the reasons for it – pursuant to Article 12(1) of
the Agreement on Safeguards;  and
(ii) the adoption of provisional safeguard measures referred to in Article 6 of the
Agreement on Safeguards pursuant to Article 12(4) of that Agreement.
Under the WTO Agreement on Safeguards, the relevant articles which must be addressed
concerning the initiation of an investigation are Article 12(1)(a), Article 12(2) and Article 12(3).
In its decision to initiate an investigation, the Republic of Latvia complied with all of the
above provisions.
Article 4(2)(a) refers to the factors which must be assessed in the course of the investigation,
further to the adoption of provisional measures.  Therefore, the Republic of Latvia respectfully
                                                     
1 G/SG/Q2/LVA/1
2 G/SG/N/6/LVA/1  and G/SG/N/7/LVA/1G/SG/Q2/LVA/2
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submits that in its decision to initiate the investigation, it has complied with the appropriate
requirements as outlined above.  The factors included in Article 4(2)(a) do not constitute a procedural
requirement in case of provisional measures.  The Government of the Republic of Poland will soon
receive detailed disclosure which will include all the essential findings of the investigation, since the
imposition of provisional measures.
The provision which must be addressed by a Member State in the taking of provisional
safeguard measures is Article 12(4).
There is no provision within the Agreement on Safeguards which compels a Member State to
comply with Article 4(2)(a) where, as in this case, that Member State has decided to initiate an
investigation or to apply provisional safeguard measures.  This is due to the fact that Article 4(2)(a)refers to the procedure which must be invoked during the course of an investigation, as opposed to the
initiation of an investigation.  The appropriate procedure for the taking of provisional safeguard
measures is laid down in Article 6.  This provides that in the appropriate circumstances, such
measures may be adopted "pursuant to a preliminary determination that there is clear evidence that
increased imports have caused or are threatening to cause serious injury".
Q2. Please list the factors of an objective a nd quantifiable nature having a bearing on the
situation of domestic industry which were evaluated in the investigation leading to a
preliminary determination that there was clear evidence that increased imports had caused or
were threatening to cause serious injury which is the prerequisite for the application of the
provisional measure pursuant to Article 6 of the Agreement?
Reply
The preliminary determination as outlined in  Article 6 does not come within the terms of
Article 4(2)(a).  Article 6 specifically provides that the procedure within Article 4(2)(a) is applicable
to the "subsequent investigation".  As set out above, the procedure which does apply is that referred to
at Article 12(2).  The Republic of Latvia complied with the terms of this Article within the terms of
the Notice of Initiation, paragraph 2.
Q3. Please provide the figures corresponding to  the factors the competent authorities have
evaluated and most importantly for changes in the level of sales, production and capacityutilization.
Reply
As explained above, the Polish Government will very soon receive disclosure on all these
issues.
Q4. Please explain how the value of losses suffered by the domestic industry was arrived at.
Reply
At paragraph 5 of the notification of the provisional measures to the WTO, the Latvian State
Commission on Safeguards states that it based its findings as regards the value of losses suffered by
the domestic industry on the data submitted by the domestic industry.
This data was submitted in the complaint at paragraph 7.4 and was arrived at by adding the
decreases in sales and profitability recorded by the producers for the period beginning in May 1998 to
April 1999.  These estimated losses were based on the following:G/SG/Q2/LVA/2
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(a) data provided by Regional Departments;
(b) data provided by the Ministry of Agriculture;
(c) calculations based on the level of decreased purchase price per kilogram of live
weight;
(d) data provided by the Agricultural Market Promotion Centre.
Q5. Has the term "domestic producers", which is  used in the sentence indicating the value of
losses, exactly the same meaning as the term "d omestic industry" used in the following sentence
indicating losses in 1999?
Reply
"Domestic Industry" is defined at Article 1, paragraph 5, of the Law on Safeguards as
meaning:
"producers as a whole of the like or directly competitive products within the territory
of the Republic of Latvia or those whose collective output of the like or directlycompetitive products constitutes a major proportion of the total domestic production
of those products."
Thus, domestic industry has the same meaning as domestic producers.
In the present case, domestic producers are defined as above.  However, there exists a very
large number of farmers in Latvia who own a very small number of swine (below 10 per farm).  For
the purposes of the investigation, these farms were found not to constitute commercial exploitation.
The Government of Poland will soon receive detailed disclosure on the methodology for calculating
domestic industry in the present case.
Q6. To what period or which year does the loss of LVL 4.5 million refer?
Reply
As stated at answer 4 above, the period on which the complaint is based is May 1998 to
April 1999.
Q7. Please provide the geographical breakdown of the figures for imports of swine meat
under investigation?
Reply
The investigation period of the proceedings has been determined to be 1 May 1998 to
30 April 1999.  Imports into Latvia of swine meat  of CN ex 0203 was from the following origins
during that period:
Origin Imports CN ex 0203 (kg)
01.05.98-30.04.99% on total imports
01.05.98-30.04.99
EC 1,193,353 24.81
Estonia 2,747,217 57.12
Poland 754,143 15.68
Other 114,696 2.38
Total 4,809,409 100G/SG/Q2/LVA/2
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Q8. Are imports of swine meat from any source en joying a margin of preference within the
framework of any preferential trade arrangements after the application of the provisional
safeguard measure?
Reply
No margin of preference within the framework of any preferential trade arrangements
concluded by Latvia has been granted after the application of the provisional safeguard measure.  As
far as the safeguard measures are concerned, they apply indiscriminately to all Latvia's trade partners.
Latvia, being a Member of the WTO, applies in its international trade relations the principle of most-
favoured-nation as provided for in Article 1 of GATT 1994.  The Government of Poland will verysoon receive a more detailed reply to that question in the disclosure.
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