 
  WORLD TRADE  
ORGANIZATION  G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 
G/SG/N/11/JAM/1 
23 April 2004 
 (04-1836) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON  
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT  
THEREOF CAUSED BY INCREASED IMPORTS  
 
NOTIFICATION PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2  
OF THE AGREEMENT ON SAFEGUARDS  
 
JAMAICA 
 
(Ordinary Portland Grey Cement
) 
  The following communication, dated 20 April 2003,  is being circulated at the request of the 
Delegation of Jamaica. 
 
______________  
 
  In light of the agreed format for notificati ons (G/SG/1, 24 February 1995), Jamaica provides 
notification to the Committee on Safeguards of findings of serious injury or threat thereof caused by 
increased imports of Ordinary Portland Grey Ce ment, the proposed safeguard measures and the non-
application of safeguard measure s to developing countries. 
  On 16 October 2003, the Anti-Dumping and Subsidies Commission (the Commission) 
initiated an investigation relating to serious injury  or threat thereof to the domestic producers of 
products like or directly competing with the importe d product.  Following a preliminary investigation 
the Commission reported to the Government of Jamai ca that Ordinary Portland Grey Cement is being 
imported into Jamaica in such in creased quantities and under such conditions as to be causing serious 
injury to the domestic producer of like or di rectly competitive goods and recommended that 
provisional measures be imposed against impor ts under sections 17 and 20 of the Safeguard 
Act, 2001. 
  The initiation of the investigation of the i nvestigation, the imposition of the provisional 
measures have been notified to the Committee on Safeguards (see WTO documents G/SG/N/6/JAM/1 
and G/SG/N/7/JAM/1). 
 
 Consistent with Article 12.3 of the Agreement on Safeguards, Jamaica is prepared to consult 
with those Members having substantial interest as expor ters of the product concerned, with a view on 
the measure proposed, reaching an understanding on ways to achieve the objective set out in 
Article 8.1 of the Agreement.  
 The evidence gathered by the im plementing authority for this investigation is set out below. G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 G/SG/N/11/JAM/1 
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1. Evidence of serious injury or threa t thereof caused by increased exports 
 On 15 December 2003 the reasons substantiating the determinations made by the Commission 
was published in the Statement of Reasons and presente d to all interested parties for their comment.  
The following is the determination by the Commis sion on the matter of serious injury or threat 
thereof:   With respect to the question of serious injury  to the Applicant, the Commission has observed 
from the data provided loss in market share, marg inal price undercutting, a period of price depression 
in 2002 corrected by price increases, and marginal  price suppression.  In addition, the Commission 
found that the significant increases in imported cement had a negative effect on the domestic 
industry’s volumes of production, sales (from its  own production) and clinker inventory.   
 
A. EFFECT ON MARKET SHARE 
  The Applicant’s production of cement h as grown marginally between 1999 and 2002 
compared to a 31 per cent growth in the market for the same period.  In 1999 locally produced cement 
controlled a significant portion of the domestic market, rising by 6 per cent in 2001, but was reduced to less than the 1999 figure by July 2003.  When the additional cement produced  from local clinker is 
taken into consideration, the local industry’s mark et share remained stable from 1999 to 2002, but is 
down by 4 per cent in 2003.  With the advent of ARC Systems as an importer of cement, combined with imports by Mainland, the Applicant’s market sh are has declined by 12 per cent in the nine seven 
months leading up to September 2003 compared to the corresponding period in 2002.  
B. PRICE EFFECTS 
  Price effects refer to changes in the level of prices in absolute and relative terms that are the 
direct result of increased imports into the Jamaican  market.  Price effects can be evaluated based on 
changes relative to previous price levels, the comp etition’s price or the domestic industry’s unit costs 
of production.  Price effects were analysed in te rms of price depression, price undercutting and price 
suppression. 
  1. Price Depression
 
 
 Price depression is usually the result of dow nward pressure on prices as a result of increased 
supply in the market or a deliberate lowering of pri ces to retain market share.   This can be assessed on 
the basis of percentage changes in prices or trends  in the levels of prices before and during the period 
when imports increased in the market.  In this regard, the Commission has looked at the net selling 
prices of the Applicant over the POI to take account  of discounts, rebates and credit charges offered 
by the Applicant.  The Commissi on notes that the Applicant maintains that its gross selling prices are 
set independently of market forces such as the increa se in supply or the need to maintain its market 
share.  The Applicant maintains that its prices are set on the basis of increases in the cost of 
production and changes in exchange rates.    The Commission observed some price depression in late 2000 to mid 2001, which was subsequently corrected by a price increase in June  2001.  An analysis of the Applicant’s average 
monthly net selling prices shows a price depression of 3 per cent in August 2003, but its net selling 
prices for September 2003 shows recovery from the price depression in August 2003.    G/SG/N/8/JAM/1 
 G/SG/N/10/JAM/1 
 G/SG/N/11/JAM/1 
 Page 3 
  
 2. Price Undercutting
 
 
 Price undercutting refers to instances where th e goods under consideration are sold for prices 
below the domestic like good.  In order to assess the ex tent of any price undercutting, the prices of the 
imported product and the domestic  product must be compared at the same level of trade. 
  Information provided in its 1 September 2003 submission shows a trend where the 
competitors maintain prices equivalent to 1 to 7 per cent below those of the Applicant at the retail 
level.  
  The Commission finds, on a comparison of the ex-factory warehouse prices of the Applicant, 
Mainland and Arc Systems for 2003, price undercutti ng by Mainland of 7 per cent and 5 per cent by 
Arc Systems.  A comparison of average retail prices also shows price undercutting by Mainland and 
Arc of 6 per cent and 4 per cent respectively.  
 3. Price Suppression
 
  Price suppression is experienced when the domest ic industry’s margin between unit cost and 
selling price cannot be maintained.  
 
 The Applicant’s net selling prices trende d marginally downwards between 1999 and 
July 2003.  However, its margin over the period h as shown a gradual increase.  A closer comparative 
look at the half-year periods for 2002 and 2003 shows a slight reduction in margin when compared to 2002.  
 
C. VOLUME EFFECTS   Volume effects refer to changes in the pattern  of imports of the investigated product and its 
absolute and relative effect on the domestic i ndustry’s production, carrying inventory, sales and 
consumption quantities. 
 
1. Production
 
 
 With the advent of imported cement in 199 9, the Applicant’s production levels declined 
relative to its 1998 production levels, and it w as not until 2001 that production surpassed the 1998 
levels.  The Applicant’s 2002 production levels show a 3 per cent growth over the 2001 period, but its 
production for the first nine months of 2003 shows a 3 per cent decline compared to the same period in 2002.  However, the Commission is of the view that  a further review of the data at a later date is 
required for a conclusive finding on the effect of  the increase in imports on the production levels of 
the Applicant.  This is because a comparison of  prior nine -month periods  of 2002 and 2001 shows a 
4 per cent reduction in domestic production in 2002 compared to the similar period in 2001, although 
actual production in 2002 increased above the 2001 levels.  2. Inventory
 
 
 The Applicant alleges that its inventory leve ls have risen as a result of the imports.  The 
evidence provided by the Applicant shows that its inve ntory levels of clinker in the first half of 2003 
increased by an average of 50 per cent of inventory le vels for the entire 2001 period.  In addition, the 
applicant’s carrying clinker inventory for July 2003 represented a 107 per cent increase over its 
average monthly inventory levels for the 2001 peri od.  The Commission is of the view that with G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 G/SG/N/11/JAM/1 
Page 4 
  
 increased imports the Applicant has no t been able to dispose of the level of cement it had expected 
resulting in the holding of large quantities of clinker.  
3. Sales
 
  The evidence provided by the Applicant shows that the sale of imported cement grew by 
111 per cent in the nine months up to September 2003 when compared to the similar period in 2002, while sales of local cement fell by 4 per cent in terms of volume.  
 
D. ECONOMIC IMPACT  1. Profitability
 
 
 Profitability refers to an excess of revenues over the cost of generating those revenues.  This 
is usually taken to be the normative indicator of injury, as it reflects the viability of a going concern.  
  The Commission’s determination of injury al ong the lines of profitability is based on the 
overall historical profitability along with the imp act in the first nine months of 2003.  The 
Commission finds that while the Applicant’s sales in the local market for the nine months to 
September 2003 declined by 6 per cent, its revenue  from these reduced quantities grew by 6 per cent 
above the similar period of 2002.  The Commission also finds that the Applicant’s prices in 2003 in response to the devaluation in the Jamaican dollar was more than was required to offset the effects of 
increased costs, although it should be noted that th e Applicant’s price increases in May 2003 were 
reduced 2 days later with the further reduction in its price in July 2003 resulting in its price being 
maintained at levels below the increase in May 2003.  
  The Commission finds that operating profits be fore finance charges grew by 10 per cent in 
2003, of which 68 per cent represents increased expor ts.  Profits expressed as a percentage of sales 
shows a marginal increase over the two previous  periods; up to 29 per cent in 2003 from 28 per cent 
in 2002, and 26 per cent in 2001.  The changes in operating profits mirror the changes in the 
profitability of the Applicant.  The profitability, wh ich is normally expressed in terms of its profits as 
a percentage of assets or capital employed or return  on investments, will vary with the level of its 
profits as there was no significant capital investment  in 2003.  While the Applicant is not satisfied 
with its current return on investment it continu es to improve its profits against the background of 
reduced sales volumes.  
 
2. Cash Flow
 
  The Commission has found that the current ra tio, which expresses the Applicant’s ability to 
meet short- term financial requirements, c ontinues to show improvements in 2003, improving 
marginally from 83 per cent at the end of 2002 to almost 1:1 at 93 per cent at the end of 
September 2003.  Although this is not significant, one of the main reasons for the improved current 
ratio is the holding of local trade receivables for the first time since 2003.  The Commission is of the 
view that because the Applicant did not suffer any lo ss in profits or the need for forced short term 
spending while improving its current ratio, the Appl icant has not suffered any negative effect on its 
cash flow or access to short term funds.   
 
3. Ability to Raise Capital
 
 
 Share prices reflect the market’s valuation of  a company, as well as investors’ confidence in 
the ability of an organisation to maintain a certain level of stability and profitability.  Share prices for  G/SG/N/8/JAM/1 
 G/SG/N/10/JAM/1 
 G/SG/N/11/JAM/1 
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 the Applicant have fallen from a high of J$2.70 in  January 2001 to $2.50 as at July 2003, this 
compares with J$3.00 in January 2003.  While shar e prices on the listed market can be used to show 
how investors view the strength of the company it is  not a sufficient tool to determine the company’s 
ability to raise capital.   
 
THREAT OF INJURY 
 
 In accordance with Section 2(2) of the Regula tion to the Act, a determination of whether 
increased imports have threatened to cause serious injury to a domestic industry shall be based on 
evidence that indicates that serious injury is clear ly imminent.  The factors on which a determination 
of threat of serious injury is to be based are liste d in section 2(2) of the Regulations.  These factors are 
objective criteria, the meeting of which demonstrates the presence of a threat of serious injury to the 
domestic industry as a result of an increase in imports is present.  While all pertinent factors including 
those identified above must be considered, all factors need not be present for the making of a 
determination of threat of serious injury.    The factors examined cover issues relating no t only to the ability to supply the Jamaican 
market, but the factors that underlie the demand by importers for imported cement, to assess the 
likelihood of increased imports, since both have to be  present.  In addition economic indicators of the 
present state of the domestic industry are examined to see if their situation could potentially worsen. 
In analysing a threat of serious injury to a domestic industry the WTO appellate body has indicated that, “[D]ata relating to the most recent past will provide competent authorities with an essential, and, usually, the most reliable, basis for a determination of  threat of serious injury.  The likely state of the 
domestic industry in the very near future can best  be gauged from data from the most recent past”.
1 
 
A. RATE OF INCREASE OF IMPORTS   Owing to issues regarding the timing and ava ilability of accurate da ta, the commission has 
relied on information on cement imports for the th ird party importers, based on customs documents 
and various submissions from the parties
2, verified against each other.  The same was done for CCCL 
imports. 
  The data shows that in the most recent pe riod, January to Sept ember 2003 imports have 
increased significantly in absolute terms when comp ared with the same period in 2002  (111 per cent 
increase with the additional 18700 MT to ARC and 90.60 per cent without).  Care has to be taken 
when drafting the SOR that this difference in repor ted percentage changes is identified or a decision 
has to be made on whether to use the figures with the additional 18, 700 MT or without.  The decision was taken not to use the additional amount since neither Customs nor Fiscal Services was able to 
verify the amounts at the time of the Preliminary Determination.  Although the Applicant has tended 
to report accurate import volumes, reliance was not placed on the data provided by them.  
 Additionally, average annual imports over the period 1999 to 2002 were approximately 
77,262 MT and third pa rty imports for the first nine months of  2003 were at least over two times this 
amount.  
                                                     
 
1 AB Report US-Lamb, para. 137. 
2 See section on increased imports for more detail. G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 G/SG/N/11/JAM/1 
Page 6 
  
  Total imports moved from being approximately 21 per cent of Applicant’s sales
3 and 
production in 2002 to being approximately 41 pe r cent in the same period of 2003 and 45 per cent 
when the additional 18,700 MT is  taken into consideration. 
 
 When examined without the inclusion of App licant’s imports (third party imports), imports 
have moved from being approximately 18 per cent of the Applicant’s sales and production for the 
period January to September 2002 to being approximat ely 41 per cent of sales and production, in the 
same period of 2003, (45 per cent with the additiona l 18700 MT).  This represents the largest year on 
year increase over the entire period of investigation.     
 B. ACTUAL AND POTENTIAL EXPORT CAPACITY   To examine the actual and potential export cap acity, the Commission looked specifically at 
Egypt, Indonesia, Russia, Argentina, Thailand, an d China, the countries of origin of third party 
imports since 1999.  The Commission examined da ta relating to their actual export performance, 
changes in inventory as well as changes in the le vel of domestic demand and the excess of production 
over domestic demand.   The existence and extent of this capacity is used to show the ability to increase the supply of 
exports to Jamaica to meet what ever demand arises.  In the case of dumping, the WTO jurisprudence 
indicates that it is not sufficient to show that this ca pacity exists but that it is likely that it will be 
exported to Jamaica.  The Commission has elected to rely on this threshold.  This therefore is only 
one element of the significance of capacity on the an alysis.  Further, in the analysis the Commission 
examines the factors that influence the demand of importers for imported cement, but also the 
motivation of exporters to sell to these importers. 
 1. China
 
  Imports from China first entered Jamaica in 2000 and have been increasing ever since.  Since 
1985 China has been the world’s leading producer of cement, and today produces over one third
4 of 
total global output.5  
 
 China is the second leading exporter of cement  in the world, accounting for about 17 per cent 
of total world cement trade.6  China’s exports of cement have been  growing steadily since 1999.  With 
the move to modernize the Chinese Cement industry7 even in the face of projected increased domestic 
demand there will be significant excess to channel into overseas markets.  It is projected that with the 
changes coming on stream cement output will increase by 3.4 per cent annually during the 2001 to 
                                                      
3 CCCL sales refers to CCCL total sales less import sales. 
4 This figure is projected to incr ease to about 40 per cent by 2010. 
5 Toward a Sustainable Cement Industry, Trends Challenges, and Opportunities in China’s Cement 
Industry (March 2002) an independent study Commissioned by the World Business Council  for Sustainable 
Development, p. v. 
6 China’s largest customer is the United States (42 per cent of all exports). The other major markets for 
Chinese cement are Chinese Taipei (37. 64 per cent of all exports), and Hong Kong, China (1.38 per cent of all 
exports). 
7 CCCL September 1, 2003 Submission, Volume I of I, Appendix D. and Toward a Sustainable Cement 
Industry, Trends Challenges, and Opportunities in China’s Cement Industry (March 2002) an independent study 
Commissioned by the World Business Council for Sustainable Development.  G/SG/N/8/JAM/1 
 G/SG/N/10/JAM/1 
 G/SG/N/11/JAM/1 
 Page 7 
  
 2005 five year plan and 2.9 per cent annually during the 2006 to 2010 five year plan.
8 In fact, the data 
shows specific plans of certain Chinese exporters to continue penetrating the Jamaican market 
between 2004 and 2006.  
 
 Owing to over capacity in the Chinese cement  industry and increased competition, cement 
prices are extremely low.  The Commission is satisfi ed that developments in  the Chinese markets and 
industry, including the significant excess capacity and low prices as well as its selling arrangements make it an attractive source for those wishing to source cement from overseas.  
 
2. Indonesia
 
  Currently imports of cement into Jamaica from th is source are not a significant threat against 
the domestic industry, at least until the expiry of antidumping measures that have been put in place. 
There is, however, a high level of pressure to expor t and since the financial crisis in 1997 Indonesian 
firms have been aggressively pursuing export-or iented strategies.  Also, Indonesia remains a net 
exporter of cement and has not imported cement significantly since 1998.  In addition, domestic 
production has continued to outpace domestic demand.  The changes in inventory coupled with the 
absence of imports indicate that Indonesia has reser ves available to draw down when global demand 
dictates. 
 
3. Russia
 
  Russian cement exports have not shown any signi ficant growth since 2000.  Part of the reason 
for this is the imposition by the Ukraine of a speci al duty.  Russian companies exported most cement 
to Kazakhstan, Azerbaijan, Ukraine, and Belarus.  Ce ment exports were less th an 0.2 per cent of total 
production against previous years and had little impa ct on the Russian market.  However, Russia has 
production levels in excess of domestic demand.  While Russia is not at the moment experiencing 
significant export growth, it is noteworthy that it is giving the world’s largest producer China, fierce 
competition in the US market.  Russia has not signi ficantly increased its capac ity in recent years and 
there is significant under utilisation.  Russia however, has the potential to be a significant exporter. 
 
4. Thailand
 
  As of 1997 Thailand has become a net exporte r of cement, as domestic demand fell off due to 
the financial crisis.  Currently, Jamaica has dum ping measures in place against cement from Thailand.  
The Commission is of the view that imports of cement from Thailand do not pose a significant threat 
to the Jamaican industry at this time as long as antidumping measures are in place.  
 5. Egypt
 
  Egypt has experienced significant increases in its capacity in recent times.  This, coupled with 
a relatively flat domestic market, points to a signi ficant incentive to export.  In fact, with steady 
increases in its production, Egypt has moved from bei ng a net importer of cement to a net exporter as 
of 2002 and is likely to be an ongoing source of imported cement, in the absence of measures.   
                                                     
 
8 Toward a Sustainable Cement Industry, Trends Challenges, and Opportunities in China’s Cement 
Industry (March 2002) an independent study Commissioned by the World Business Council for Sustainable 
Development, p.9. G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 G/SG/N/11/JAM/1 
Page 8 
  
 6. Argentina
 
  Argentina produces around 7.2 million tonnes
9, with a clinker production capacity of about 
11 million tonnes.  Cement production comes fro m Cementos Avellaneda, Grupo Minetti, Loma 
Negra C.I.A. S.A., and Petroquímica Comodoro.  Lo ma Negra was the leading producer with about 
60 per cent of the country's clinker capacity.  This is the producer that is currently supplying the Jamaican Market.  The company held a 50 per cent share of Argentina's domestic market 
(International Cement Review, 2001, p. 52-54).  In May 2000, Loma Negra completed the 
construction of a new distribution center in Vicente Casares near Buenos Aires at a cost of 
$36 million (International Cement Review, 2001, p. 52-54) .  The silo has a capacity of 18,000 tonnes, 
and the mixer can produce 250 metric tons per hour of cement.  The mixer can produce different types 
of cement and can change from one to another in  30 minutes, thereby exemplifying the plant’s 
product shifting ability.  In addition, the Commiss ion is aware of pendi ng orders for additional 
shipments of cement from this source.   
 
SUMMARY 
 
 These countries have significant capacity and ar e net exporters of the product and can meet 
demand from anywhere in the world, especia lly from a market the size of Jamaica. 
 
C. BUILD-UP OF INVENTORIES IN JAMAICA AND IN THE COUNTRIES OF EXPORT   The availability of inventories of the goods under consideration indicates an ability to erode 
to some degree the domestic industry’s market share.  This is likely because of the importers’ 
presence in the market.  Generally, when a shipment of cement has been imported the market does not 
absorb all the goods in the same day or month.    The inventory levels of the exporting countri es are evaluated using both actual data on 
inventory as well as unused finished cement produc tion capacity (UFCPC).  The Commission finds 
that inventory levels in the countries of export ar e significant based on actual inventory levels and the 
unused finished cement capacity. 
 D. EVIDENCE OF THE POSSIBILITY OF A FURTHER INCREASE IN IMPORTS   The Applicant has submitted ev idence indicating that there is a strong possibility of a further 
increase of cement from these sources based on low prices, the possibility of product shifting to 
additional production facilities in a relatively short period of time in some countries such as 
Argentina, existing excess capacity, and the expect ed significant increase in global cement capacity 
that will prompt major producers to expand into markets around the world.  E. TRADE RESTRICTIVE MEASURES OF OTHER COUNTRIES 
 
 The relevance of considering trade restrictive measures in other countries is to determine the 
extent to which trade diversion might become a source of a likely increase in imports into the Jamaican market.  The Commission has not found th ere to be any definitive Safeguard Measures 
imposed on imports from Thailand, Indonesia, Russia,  China, Egypt or Argentina.  Currently, only 
Russia seems to have had anti dumping measures imposed on its cement imports into Lithuania. 
 
                                                     
 
9 2000 estimates.  G/SG/N/8/JAM/1 
 G/SG/N/10/JAM/1 
 G/SG/N/11/JAM/1 
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 F. THE POTENTIAL IMPACT OF INCREASED IMPORTS OF THE INVESTIGATED 
PRODUCT ON THE DOMESTIC INDUSTRY 
 
 With respect to the potential impact of in creased imports of OPC cement on the domestic 
industry, the Applicant has provided information that  supports the view that the imports have had an 
impact on their sales for the first seven months of 2003 compared to 2002.  This impact is unprecedented when the Applicant’s sales for the first seven months of 2003 are compared to similar 
seven-month periods between 1999 and 2003.  The Appli cant’s market sh are has also b een affected 
because, notwithstanding Applicant’s marginal incr ease of sales from its domestic production, this 
marginal growth in sales was below the growth in the market.  The Commission is of the view that 
this trend is likely to continue given the incr eased volumes of  cement on the Jamaican market. 
Ultimately this will have an impact on the App licant’s revenue, profitabilit y, and other financial 
indicators 
 
G. OTHER FACTORS  Business Ambitions of Cement Importers
 
  Another factor to consider is the strong in centive for third party importers to continue 
importing cement and at competitive prices to estab lish a customer base.  In addition Mainland 
indicates its intention to set up production faciliti es in Jamaica, and until these operations come on 
stream, have indicated the intention to continue importing to meet the needs of their customers.  
 Change in Market Dynamics
 
 
 There is an increase in the number of supplie rs in the market, and with the availability of 
substitutes the demand for Applicant’s products is more  elastic.  With marginal price differences, each 
supplier can significantly affect its competitor to the extent of its own supply.  Also, growth in the 
market has been fuelled by incr eased activity in the construction sect or, both in terms of residential 
construction and specific projects.  This is, however , against a background of sluggish growth in the 
economy so that in the absence of these underlyi ng influences, the impact of price competition on 
market share could be greater.   The Commission has pointed to, in previous dete rminations, the issue of threat of injury, the 
likelihood of increased imports, especially with im porters’ ability to switch sources of supply.  The 
Commission has drawn attention to the vulnerability of  the domestic industry to the threat of injury 
resulting from the ability of importers to switch sources of supply.    Therefore, the Commission is of the view that the situation of the domestic industry could potentially worsen because of the impact of increase d volumes of cement on the market.  In addition, 
in a context where growth in the market itself has not been the result of a more buoyant economy, the 
supply pressures in the Jamaican market and globall y, might exert pressures on prices thereby having 
an impact on the Applicant’s viability.    In considering a threat of injury it is not su fficient simply to show that the current level of 
imports will continue, but that there is the strong pos sibility that they will in crease in the near future. 
In addition, the pattern of importation over the peri od of investigation must support the view of the 
strong possibility that imports will increase in the near future, together with the ability of importers to 
shift from one source of supply to the next, as well as, various incentives to continue importing.  In 
the context where the Jamaican economy itself is not growing significantly, increased volumes of G/SG/N/8/JAM/1 
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Page 10 
  
 imported cement and their impact presently provide th e strongest evidence of threat of serious injury 
to the domestic industry.   CAUSATION 
 
  Both the Act and the WTO agreement require that there be a demonstration of a causal link between any serious injury or threat of serious inju ry and increased imports.  First, there must be the 
demonstration of the existence of a causal li nk between increased imports of the goods under 
consideration and the injury or threat, and second,  injury caused by factors other than increased 
imports must not be attributed to the increased imports.  . A. THE EXISTENCE OF A CAUSAL LINK  
 To establish causation it is not necessary to show that increased imports are the sole cause of 
injury or threat.  The Commission therefore sought  to identify if any correlation exists between 
absolute and relative changes in imports (on the ba sis of third party imports) and the injury factors 
examined.    The data clearly shows that movements in impor ts, relative or absolute can explain some of 
the variation in the injury factors examined, and ther efore are a cause of serious injury or threat of 
serious injury.  The Commission noted that while the level of correlation with the other factors 
examined point to other potential influences, cha nges in market share are mostly the result of the 
changes in imports and this relationship holds true whether the increase is re lative or absolute.  The 
rationale for using the injury factors specified is that changes in volume is a significant factor which 
along with price effects have an impact on the domes tic industry and may materialize in the financial 
indicators as well.  The link between the price of the increased imports and adverse price effects is 
also clear from the evidence as it relates to price undercutting.    The evidence shows there is a significant nega tive relationship between the decline in market 
share and the change in relative import volumes.  That  is, there is a significant amount of variation in 
market share that is explained by changes in re lative import volumes.  Notably the other variables 
examined exhibit a less significant and positive correla tion with the relative increase in imports.  The 
fact that the correlation between these other variabl es and imports is significantly lower indicated that 
there may not be as direct a relationship between them .  This is not surprising given that more than 
one factor at any one- time influences the variables examined.  Inventory levels indicate a positive and 
marginally significant relationship with the relative in crease in imports.  The trend in correlation with 
the absolute change in imports is similar to that  exhibited against a relative increase in imports.   
   The Commission’s analysis of the volume effe cts, namely changes in, production, sales from 
local production, clinker inventory, and market share can be directly linked to the presence of 
increased imports in the market.  Price effects also can be directly linked to the presence of increased 
imports in the market, as well as with the incr ease in the number of suppliers undercutting the 
domestic industry through sales of increased imports.
10   
  While the negative volume and price effects observed are not obvious in their impact on the domestic industry’s economic indicators such as prof itability, cash flow, and ability to raise capital, 
and therefore a negative relationship with the increas ed imports is not readily apparent, this seeming 
lack of a relationship is due largely to strategi es adopted by the domestic industry, such as price 
                                                     
 
10 It is of note that the applicant has been forced to offer an increased level of discounts and rebates to 
maintain its customer base.  G/SG/N/8/JAM/1 
 G/SG/N/10/JAM/1 
 G/SG/N/11/JAM/1 
 Page 11 
  
 increases and the offering of favourable terms to main tain its customer base, as well as improvements 
in production, in order to mitigate the effects.  Th erefore, the majority of indicators of injury and 
threat examined can be linked to  the presence of increased imports. 
 
B. NON-ATTRIBUTION   The Commission examined the other factors that over the period of investigation had or may have had a negative effect on Applicant’s performan ce.  The WTO Appellate Body has indicated as 
follows:  
 
“ In a situation where several factors are causing injury “at the same time,” a final 
determination about the injurious effects caused by increased imports can only be made if the injurious effects caused by di fferent causal factors are distinguished and 
separated.  Otherwise, any conclusion based  exclusively on an assessment of only one 
of the causal factors - increased imports - rests on an uncertain foundation.”
11  
 Where possible, the Commission separated and distinguished factors other than the dumped 
imports that could be exerting an influence on th e domestic industry, so as to assess their bearing, 
influence, or effect on the domestic industry as distinct from the impact of increased imports.   
Macroeconomic Influences
.  Factors such as changes in the exch ange rate, increases in fuel prices 
and adverse weather conditions have historically had an impact on the domestic industry, primarily 
through its cost of production and lower demand.   The Commission was persuaded however, that 
some of these influences also have an impact on im porters in the same way.  While they exerted a 
negative impact on the domestic industry, the industry undertook corrective measures.  These 
mitigating measures minimized the negative impact of  exchange rate depreciation, for example.   
 
Discretionary Policy Changes .  There were no discretionary policy changes or changes in tariff or 
other tax rates identified to or by the Commissi on that would have had a negative impact on the 
cement industry.  
 
Developments in Technology .  The Applicant does not identify, nor were any technological changes 
identified by the Commission that were a factor in its difficulties.   
 
Contraction in Demand/Changes in Pattern of Consumption .  Total cement consumption has been 
increasing, hindered in some periods by weather c onditions throughout the pe riod of investigation. 
Therefore demand is not currently a factor, which has a negative impact on the domestic industry.   
 
Production Difficulties .  The Commission found no reason to di scredit the assertion of the Applicant 
that its past operational problems which had an im pact on production in the 1999 to 2000 period, such 
as equipment failures and the need for upgrades, did not  continue to have an impact on its operations 
beyond that time, as it instituted changes that redu ced its unit cost of production and allowed it to 
expand production.  In the latter part of the pe riod of investigation, the Commission finds that 
production difficulties have not been a factor that  had a negative impact on the domestic industry. 
 
Difficulty in Obtaining Raw Material .  There is no information at this time to suggest that difficulty 
in obtaining raw material is a factor that h as had a negative impact on the domestic industry’s 
production.  
 
                                                      
11 ABR US Lamb. G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 G/SG/N/11/JAM/1 
Page 12 
  
  On the basis of the information provided in th e application together with other information of 
which the Commission is aware, the Commission is of the view that there is a causal link between the increase in imports and the injury factors examined .  Some relationships exhibit a correlation that 
would indicate damage to the domestic industry (tha t is, as imports increase inventories increase, as 
imports increase market share dec lines).   The Commission found that for those other relationships 
that currently do not exhibit a negative relationship there are strong indications they may threaten to 
do so.  
 A further Statement of Reasons will be made available to the interested parties having a 
substantial interest in the proceedings.  The Commission will also make recommendations to the 
Government on the appropriate remedies.  Jamaic a will provide a copy of this report, excluding 
confidential business information, to the Committee shortly after it is  submitted to the Government. 
 
2. Information on whether there is an abso lute increase in exports or an increase in 
imports relative to domestic production  (see also Article 12.1 for the context) 
 
 The standard to be met for a sufficient finding of an increase in imports is that the increase in 
imports must have been recent enough, sudden eno ugh, sharp enough, and significant enough, both 
quantitatively and qualitatively, to cause or  threaten to cause serious injury.
12  The increase in imports 
can be analysed in both absolute and relative terms. 
  In analysing the data relating to increase in imports the Commission took account of the following trends: the growth in imports over the entir e POI, the growth in imports over the last three 
years of the POI, the growth in imports over the last  two years of the POI, and the growth in imports 
over the most recent period compared to the sa me period in previous years in the POI.  
  The Commission notes that, historically, there has always been a shortfall between domestic production and market demand, which has been supplemented by imports, first by the domestic producer and additionally by other importers since 1999.  Evidence provided by the Applicant and verified by other sources shows a 100 per cent in crease in imports in 1999 compared to 1998, 
representing an 11 per cent increase of the share of th e domestic market when compared to 1998.   
Imports for the first nine months of 2003, the mo st recent period, were 111 per cent higher than the 
corresponding period in 2002, when additional impor ts totalling 18,700 MT post initiation are taken 
into consideration.
13  Without these imports in that period the increase is nevertheless significant at 
91 per cent when compared to the similar period in 2002.  Additionally, imports for the first nine 
months of 2003 are significantly above the level that obtained for the twelve months 2002.  For the 
first nine months of 2003 imports as a percenta ge of CCCL’s production we re approximately 45 per 
cent compared to 21 per cent for the corresponding period in 2002.   
                                                      
 12 The standard has been stated in the WTO Appellate Body decision in Argentina – Footwear  in the 
following terms: 
 “In our view the determination of whether the requirement of imports ‘in such increased quantities’ is 
met is not a merely mathematical or technical determination. In other words it is not enough for an 
investigation to show simply that imports of the prod uct this year were more than last year - or five 
years ago. Again, it bear s repeating, not just any increased quantities of im ports will suffice. There 
must be “such increased quantities” as to cause or threaten to cause serious injury to the domestic 
industry in order to fulfil this requirement for applying a safeguard measure.  And this language in both Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, we believe 
requires that the increase in imports must have b een recent enough, sudden enough, sharp enough, and 
significant enough, both quantitatively and qualitatively, to cause or threaten to cause ‘serious injury.’” 
13 The Applicant reported these volumes in its su bmissions and the Commission  received verification 
from Jamaica Customs.  G/SG/N/8/JAM/1 
 G/SG/N/10/JAM/1 
 G/SG/N/11/JAM/1 
 Page 13 
  
  
3. Description of the product involved 
 
 O
RDINARY PORTLAND GREY CEMENT USED FOR BUILDING OR CONSTRUCTION PURPOSES 
ORIGINATING IN OR EXPORTED FROM ALL SOURCES .  
 
 The narrative definition is covered under separ ate sub-headings of the Tariff Schedule and 
represents the scope of the investigation, notwith standing the tariff classifications below, which are 
provided for Customs’ purposes. 
 
2523.20   Portland Cement 
 2523.2910.0  Building Cement (grey)  2523.29   Other 
 
4-8. Description of the proposed measure 
 
 Jamaica has not yet proposed a final measure in relation to the Commission’s determinations 
of serious injury or threat thereof.  The Co mmission is now considering recommendation as to the 
appropriate measures, which the Gove rnment will consider after the recei pt of the report referred to in 
paragraph 1.  The current measure is a provisional measure in the form of a tariff. 
 
9. Information to be provided in the event of the duration of the measure having to be 
extended 
  Not applicable. 
 G/SG/N/8/JAM/1 
G/SG/N/10/JAM/1 G/SG/N/11/JAM/1 
Page 14 
  
 NOTIFICATION UNDER ARTICLE 9.1, FOOTNOTE 2 ON THE AGREEMENT 
ON SAFEGUARDS OF THE NON-APPLICATION OF A SAFEGUARD  
MEASURE TO DEVELOPING COUNTRIES 
 
1. Description of the measure 
 
 Jamaica has not yet proposed a final measure in relation to the Commission’s determinations 
of serious injury or threat thereof.  The Co mmission is now considering recommendation as to the 
appropriate measures, which the Gove rnment will consider after the recei pt of the report referred to in 
paragraph 1.  The current measure is a provisional measure in the form of a tariff. 
 
2. Product subject to the measure  
 O
RDINARY PORTLAND GREY CEMENT USED FOR BUILDING OR CONSTRUCTION PURPOSES 
ORIGINATING IN OR EXPORTED FROM ALL SOURCES .  
 
 The narrative definition is covered under separ ate sub-headings of the Tariff Schedule and 
represents the scope of the investigation, notwith standing the tariff classifications below, which are 
provided for Customs’ purposes. 
 
 2523.21  Portland Cement  2523.2910.0 Building Cement (grey)  2523.29  Other  3. Specify the developing countries to which th e measure is not applied under Article 9.1 of 
the Agreement on Safeguards, and the import  shares of these countries individually and 
collectively 
 
 The Commission has not yet recommended a final measure in relation to the determination of 
serious injury or threat thereof.  Jamaica has in vited parties with a substantial interest to the 
proceedings and the Commission is now consideri ng recommendation as to the appropriate measures, 
which the Government will consider after the receipt  of the report referred to in paragraph 1.  As a 
result Jamaica has not yet determined the list of deve loping countries to be exempt from the safeguard 
measure.  4. If there is a change in the list of deve loping countries exempted from the safeguard 
measure pursuant to Article 9.1, please notify 
 
 Not applicable. 
  
__________ 
 
 