 
  WORLD TRADE  
ORGANIZATION  G/SG/N/6/ARG/5 
G/SG/N/7/ARG/3 17 September 2004 
 
 
(04-3907) 
Committee on Safeguards Original:   Spanish 
  
 
NOTIFICATION UNDER ARTICLE 12.1(a) OF THE AGREEMENT 
ON SAFEGUARDS ON INITIATION OF AN INVESTIGATION 
AND THE REASONS FOR IT 
 
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON 
SAFEGUARDS BEFORE TAKING A PROVISIONAL SAFEGUARD 
 MEASURE REFERRED TO IN ARTICLE 6 
 
ARGENTINA 
 
 
 The following communication, dated 6 September 2004, is being circulated at the request of the delegation of Argentina.  
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 I have the honour to submit herewith the fo llowing notifications made under the Agreement 
on Safeguards:   - Notification under Article 12.1(a) on the initiation of an investigation concerning 
reception apparatus for colour television. 
  - Notification under Article 12.4 regarding the adoption of a provisional safeguard 
measure referred to in Article 6 on r eception apparatus for colour television. 
 G/SG/N/6/ARG/5 
G/SG/N/7/ARG/3 Page 2 
 
 
 Article 12.1(a)
 
 
1. Specify the date when the investigation was initiated. 
  Ministry of Economy and Production (MEP) Resolution No. 463/2004 of 16 July 2004. 
 
2. Specify the products subject to the investigation. 
 
 Reception apparatus for colour television, including with PIP (Picture in Picture) function, but 
excluding combined apparatus containing, in the same housing, a television receiver and image and/or 
sound recorders or reproducers, as classified under tariff heading 8528.12.90 of the MERCOSUR 
Common Nomenclature (NCM).  
3. Provide the reasons for the initiation  of the investigation, for example: 
 
(i) Was the investigation initiated pursuant to a request from the domestic industry? 
 
 Yes.  The investigation was initiated pursuant to a request from the Association of Argentine 
Electronic Appliance Manufacturers (AFARTE) for th e application of a safeguard measure on exports 
to Argentina of the reception apparatus for colour te levision described in point 2 of this notification. 
 
(ii) Evidence on the basis of which the investigation was initiated. 
 
 The National Foreign Trade Commission (CNCE) carried out a study in response to the 
application submitted by AFARTE in order to dete rmine whether there was serious injury to the 
domestic industry, within the meaning of the Ag reement on Safeguards, in connection with the 
product defined in point 2 of this notification.  The results of the study are recorded in CNCE 
Directive No. 1025 of 5 July 2004.   The analysis shows that the application contai ns sufficient evidence of serious injury to the 
domestic industry caused by imports, thereby meeting th e conditions laid down by the regulations in 
force to implement possible provisional safeguard measures. 
 
(iii) Evidence, if any, of critical circumstances where delay would cause injury that would be 
 difficult to repair. 
  Import analysis requires that consideration be given to whether imports of this product have 
increased in quantity, as measured in terms of or in relation to the domestic industry, and whether they 
have been effected under conditions that cause or threaten to cause serious injury to the domestic 
industry.   The Commission must therefore consider whethe r the trend in imports displays the required 
characteristics. 
 (a) Imported product forming the subject of the application.   As specified by AFARTE, the imported produc t forming the subject of the application is 
"reception apparatus for colour television, including with PIP (Picture in Picture) function, but 
excluding combined apparatus containing, in the same housing, a television receiver and image and/or 
sound recorders or reproducers" importe d from Brazil – Free Zone of Manaos. 
  G/SG/N/6/ARG/5 
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 (b) Absolute quantities imported. 
  The Commission considered, on the basis of origin and the applicability of CMC Decision 8/94, imports of reception apparatus fo r colour television from Brazil – Free Zone of 
Manaos. 
  There were sustained increases in the volum e of such imports - 58 per cent in 2000 and 
196 per cent in 2001.  In 2003 an in crease of 1,052 per cent was recorded. 
 
 Imports from Brazil – Free Zone of Manaos, measu red in terms of US dollars f.o.b., followed 
a trend similar to those measured in volume, although to a different degree.  (c) Imports in relation to domestic production. 
 
 In relation to apparent consumption, imports  from Brazil – Free Zone of Manaos rose from 
1 per cent in 1999 to 12 per cent in 2003 – double th e figure they reached when imports peaked in 
2001.  (d) Conditions affecting imports.  
 In view of the characteristics of the product, the relevant factors to consider are the volume 
imported and the price.   The average f.o.b. price, which for the orig in Brazil – Free Zone of Manaos, represented 
between 21 per cent and 67 per cent of imports, st ood at 132.41 US dollars per unit in 1999 and 
increased to 188.80 US dollars per unit in 2000.  In 2003, the average f.o.b. price was 100.20 
US dollars per unit.  Article 12.4
1 
 
1. Specify the product subject to the proposed provisional safeguard measure. 
 
 Reception apparatus for colour television, including with PIP (Picture in Picture) function, but 
excluding combined apparatus containing, in the same housing, a television receiver and image and/or 
sound recorders or reproducers, as classified under tariff heading 8528.12.90 of the MERCOSUR 
Common Nomenclature (NCM). 
 
2. Specify the proposed safeguard measure.2 
  Ad valorem tariff of 21.5 per cent. 
 
3. Specify the proposed date of introduction of the provisional safeguard measure. 
 
 20 July 2004.  The measure was published in the Official Journal of 19 July 2004. 
 
                                                     
 
1 The measure covered by this notification was adopted in accordance with the regulatory framework 
established by Common Market Council Decision No. 08/1994 (MERCOSUR).  
2 Consists of the elimination of the tariff prefer ence and the introduction of an import tariff equal to 
that applied to imports from other areas. G/SG/N/6/ARG/5 
G/SG/N/7/ARG/3 Page 4 
 
 
 4. Specify the expected duration of the provisional safeguard measure, if any decision on 
the duration of the measure has been made. 
 
 Two hundred (200) days. 
 
5. Provide the basis for: 
 
(i) Making a preliminary determination, as provided for in Article 6, that increased 
imports have caused or are threa tening to cause serious injury. 
 
 The National Foreign Trade Commission (CNCE) carried out a study in response to the 
application submitted by the Association of Argentine Electronic Appliance Manufacturers 
(AFARTE) in order to determine whether there was se rious injury to the domestic industry, within the 
meaning of the Agreement on Safeguards, in connecti on with the product defined in point 1 of this 
notification.  The results of the study are record ed in CNCE Directive No. 1025 of 5 July 2004. 
  The analysis shows that the application contains  sufficient evidence of serious injury to the 
domestic industry caused by imports, thereby meeting th e conditions laid down by the regulations in 
force to implement possible provisional safeguard measures.  
 The above-mentioned conclusion is b ased on the following considerations: 
 
Import trends 
 
 Import analysis requires that consideration be given to whether imports of this product have 
increased in quantity, as measured in terms of or in relation to the domestic industry, and whether they 
have been effected under conditions that cause or threaten to cause serious injury to the domestic 
industry.   The Commission must therefore consider whethe r the trend in imports displays the required 
characteristics. 
 
(a) Absolute quantities imported.   The Commission considered, on the basi s of origin and the applicability of 
CMC Decision 8/94, imports of reception apparatus for colour television from Brazil – Free Zone of 
Manaos. 
  There were sustained increases in the volum e of such imports - 58 per cent in 2000 and 
196 per cent in 2001.  In 2003 an in crease of 1,052 per cent was recorded. 
  Imports from Brazil – Free Zone of Manaos, meas ured in terms of f.o.b. dollars, followed a 
trend similar to those measured in volume, although to a different degree. 
 (b) Imports in relation to domestic production.   In relation to apparent consumption, imports  from Brazil – Free Zone of Manaos rose from 
1 per cent in 1999 to 12 per cent in 2003 – double th e figure they reached when imports peaked in 
2001.   G/SG/N/6/ARG/5 
 G/SG/N/7/ARG/3 
 Page 5 
 
 
 (c) Conditions affecting imports. 
  In view of the characteristics of the product, the relevant factors to consider are the volume 
imported and the price. 
 
 The average f.o.b. price, which for the origin Brazil – Free Zone of Manaos represented between 21 per cent and 67 per cent of imports, st ood at 132.41 US dollars per unit in 1999 and 
increased to 188.80 US dollars per unit in 2000.   In 2003, the average f.o.b. price was 
100.20 US dollars per unit. 
 
Serious injury or threat of serious injury to the domestic industry.  
 
(a) Like or directly competitive products.  
 At this stage and on the basis of existing info rmation, it was concluded that the domestically 
produced product is at least directly  competitive with the imported product. 
 (b) Domestic industry.   The Commission analysed the information submitted by AFARTE and considered it to cover 
a major proportion of the domestic industry. 
 (c) Situation of the domestic industry.   In order to analyse the situation of the domestic industry, the following aspects were 
considered: 
  In 2003, the domestic output of the applicant companies stood at almost 300,000 units and domestic sales at 285,448 units.   Inventories had risen by 17 per cent as at December 2002, and fallen by 71 per cent as at 
December 2003. 
  The production capacity of the companies survey ed fell by 8 per cent in 2002 and 0.5 per cent 
in 2003.  The degree of utilization for the same group of companies stood at 52 per cent in 2001, but declined during the subsequent years considered, reaching 20 per cent in 2003. 
 
 The total number of employees in the area of  production of the companies surveyed fell by 
40 per cent in 2002, with ve ry little change in 2003. 
  A representative cost structure for all the companies analysed, which on average does not 
show a definite trend in constant average unit cost  values, indicates a reduction of 11 per cent in 2003.  
This performance was accompanied by an increase in  average sale prices of 7 per cent and 12 per cent 
for 2002 and 2003 respectively, which led to a price/cost ratio of 1.08 in 2001, 1 in 2002 and 1.27 in 2003.   With regard to the evaluation of the net wo rth and financial situation of the companies 
surveyed, no very significant conclusions could be reached regarding the indicators of profitability, 
operations, liquidity and indebtedness, due to th e fact that some are multi-product companies.  
However, in general, negative profit rates can be observed. 
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G/SG/N/7/ARG/3 Page 6 
 
 
 (d) Opinion on the serious injury or threat of serious injury to the industry caused by imports. 
  At this stage, the Commission considers, on the basis of the analysis of the information 
contained in the file, that imports from the Free Zo ne of Manaos increased in a manner capable of 
causing serious injury to the local industry produc ing "reception apparatus for colour television, 
including with PIP (Picture in Picture) function, but excluding combined apparatus containing, in the 
same housing, a television receiver and image a nd/or sound recorders or reproducers".  This 
conclusion is based on the ci rcumstances described above. 
 (ii) Determining the existence of critical circumstances where delay would cause damage 
which it would be difficult to repair. 
 
 The Commission has examined the application made by AFARTE regarding the imposition of provisional safeguard measures, and considers that given the rise in imports from the Free Zone of 
Manaos – Brazil and their rate of increase, prices, and share in apparent consumption, conditions are 
such as to require the application of provisional safeguard measures in order to prevent irreparable 
damage that could affect the industry if th e current circumstances were to persist. 
 
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