WORLD TRADE
ORGANIZATIONG/L/453
G/SG/35
2 July 2001
(01-3290)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.5 OF THE
AGREEMENT ON SAFEGUARDS ON THE
PROPOSED SUSPENSION OF CONCESSIONS
POLAND
The following communication, dated 27 June 2001, has been received from the Permanent
Mission of Poland.
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1. Member proposing suspension of concessions and other obligations
Poland
2. Member against whom the suspension is proposed
Slovakia
3. The WTO document that notified the safeguard measure
G/SG/N/10/SVK/1
4. Proposed measure and the product subject to the measure
Proposed measure has the form of the quantitative restrictions on import of the below
mentioned products originating in Slovakia:
Code Product Level of quota
1517 Margarine, edible mixtures or preparations of animal
or vegetable fats or oils of fractions of different fatsor oils of this chapter, other than edible fats or oils or
their fractions of heading No 15161,980 tonnes
0405 Butter and other fats and oils derived from milk 50 tonnes
The calculation of proposed quota is based on the value of losses incurred by Poland resulting
from the imposition by Slovakia of the safeguard measure against the imports of sugar.  Details of the
calculation are enclosed in the Annex 1 to this notification.
5. Proposed date from which the su spension will come into effect
1 August 2001G/L/453
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The proposed date falls in line with the provisions of the Article 8.2 of the Agreement on
Safeguards, i.e. the suspension shall be established 90 days after the safeguard measure is applied
(May 1) which is July 30 and shall practically come into effect on 1 August.
Simultaneously, it is Poland's view that paragraph 3 of Article 8 of the Agreement on
Safeguards is not applicable here, as the safeguard measure imposed by Slovakia on the imports of
sugar does not conform to the provisions of the SG Agreement.  The most serious violations by
Slovakia of the above-mentioned Agreement are listed in the Annex 2 to this notification.  Suspension
of the concessions and other obligations proposed does not preclude further action by Poland under
the Article 14 of the Agreement on Safeguards.G/L/453
G/SG/35
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Annex 1
to the notification to the Council for Trade in Goods
of proposed suspension of concessions and other obligations
under paragraph 2 of Article 8 of the Agreement on Safeguards.
1. Calculation of the losses incurred as a resu lt of the application by Slovakia of the
quantitative restrictions on imports of Polish sugar
Average volume of Polish exports of sugar to Slovakia (1998-2000) 9,987.9 tonnes
Quota established for Poland 3,500 tonnes
Difference 6,487.9 tonnes
Average value of sugar per tonne (1998-2000) $0.176 th.
Value of the difference $1,142.1 th.
Polish losses  -  $1,142.1 thousands.
2. Calculation of the value of suspensions proposed against Slovakia
Average volume of Slovak exports of  margarine to Poland (1998-2000) 3,772.6 tonnes
Quota proposed for Slovakia 1,980 tonnes
Difference 1,792.6 tonnes
Average value of margarine per tonne (1998-2000) $0.471 th.
Value of the difference $ 844.3 th .
Average volume of Slovak exports of butter to Poland (1998-2000) 259.4 tonnes
Quota proposed for Slovakia 50   tonnes
Difference 209.4 tonnes
Average value of butter per tonne (1998-2000) $1.407 th.
Value of difference $294.6 th.
Value of suspensions - USD 1 138.9 thousandsG/L/453
G/SG/35
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Annex 2
to the notification to the Council for Trade in Goods
of proposed suspension of concessions and other obligations
under paragraph 2 of Article 8 of the Agreement on Safeguards.
The most serious violations by Slovakia of the Agreement on Safeguards while implementing
the quantitative restriction on imports of sugar:
1. Violation of the paragraph 1 of the Article 3.
During the investigation there was no public hearings or other appropriate means in which
interested parties could present their evidence or  their views.  Nor any opportunity was given for
interested parties to respond to the presentations of other parties as no such documents were revealed
to them.
2. Violation of the paragraph 2 (b) of Article 4
No document presented, including the notifications to the SG Committee under Article 12,
contain analyses on the casual link between increased imports and serious injury to the domesticindustry or factors other than imports which might have caused injury (including imports from the
Czech Republic which was excluded from the measure).
3. Violation of the paragraph 2(a) of the Article 5
According to the official data presented by Slovakia in its notifications under Article 12, the
average level of imports in the reference period of 3 years (1997-1999) was above 8 000 tonnes, while
the quantitative restriction was established at the level of 3 900 tonnes.
4. Violation of the paragraph 4 of the Article 7
In the second year of its application the safeguard measure has not been liberalized.  Taking
into account that in the first year of its application the measure will be in the effect only for 7 months
and the level of quota for the full second year is scheduled to be the same as for the 7 months of the
first year, the restriction is effectively strengthened rather than liberalized.
5. Violation of the paragraph 1(b) of Article 12.
No notification of the final findings of the investigation was made prior to the implementation
of the safeguard measure.  Such notification was made after the safeguard measure had come into
effect.
6. Violation of the paragraph 1(c) of the Article 12
No notification on taking a decision to apply a measure was made prior  to the implementation
of the safeguard measure.  Such notification was made after the safeguard measure had come into
effect.G/L/453
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7. Violation of the paragraph 3 of the Article 12.
No opportunity for prior consultations was provided before the application of the safeguard
measure for countries having a substantial interests as exporters of the product concerned. Followingthat, neither has any opportunity been provided to review the information which should have been
presented in the notifications under paragraphs 1(b) and (c) of Article 12 (also because the
notifications themselves were not made on time) nor have the negotiations on concessions under
paragraph 1 of the Article 8 taken place.
Nevertheless, with a view to avoid further restrictions of trade and suspensions under
paragraph 2 of the Article 12, Poland made an attempt to negotiate concessions under paragraph 1 ofthat Article even after a safeguard measure had came into affect.  Detailed Polish proposals of such
concessions as well as the idea of concessions themselves were rejected by the Slovak side.
The points listed above indicate only the clearest violations of the Agreement on Safeguards
with a view to prove that 3 years period of not exer cising the right of suspension is not applicable in
this case. Poland does not preclude that further violations by Slovakia of the SG Agreement can be
found after the detailed examination of the case.
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