 WORLD TRADE  
ORGANIZATION  G/SG/N/6/ECU/6 
16 December 2003  
 
(03-6609) 
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 
 
ECUADOR 
 
(Paper and Paperboard
) 
 
  The following communication, dated 10 December  2003, is circulated at the request of the 
delegation of Ecuador.  
_______________ 
 
 1. Pursuant to Article 12.1(a) of the Agreemen t on Safeguards, I hereby notify the Committee on 
Safeguards of the initiation of an investigation process relating to serious injury or threat thereof and 
the reasons for it in relation to paper and paperboard classified under NANDINA 
subheadings 4804.11.00, 4805.60.90, 4805.70.90, 4805.80.90, 4805.11.00, 4805.19.00, 4805.24.00 
and 4805.25.00. 
2. This notification is made in accordance with the suggested format for notifications under the 
Agreement on Safeguards, as set forth in document G/SG/W/1 of 23 February 1995. 
1. Specify the date when the investigation was initiated. 
 31 October 2003. 
 
2. Specify the products subject to the investigation. 
 Paper and paperboard classified under NANDI NA subheadings 4804. 11.00, 4805.60.90, 
4805.70.90, 4805.80.90, 4805.11.00, 4805.19.00, 4805.24.00 and 4805.25.00 of the national import tariff.  
3. Provide the reasons for the initiation of the investigation. 
(i) Was the investigation pursuant to a petition from the domestic industry?  
 
 The request was made by the company Papelera Nacional S.A., which represents more than 60 per cent of the domestic indus try for paper and paperboard. 
 
(ii) Evidence on the basis of which the investigation was initiated. 
 
 The company Papelera Nacional S.A. demonstrated  that there had been a decline in sales and 
a progressive loss by the domestic industry of its share in apparent domestic consumption.  The 
significant increase in imports of the above-mentione d products was causing a deterioration in the 
company's economic situation as reflect ed by a number of developments, inter alia  a decline in profits 
and profitability indices;  an increase in the share of imports in the domestic market for the products G/SG/N/6/ECU/6 
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under investigation and the consequent loss of market  share by domestic production;  and a decrease 
in the utilization of the company's installed capac ity, negatively affecting the competitiveness of the 
domestic products.  Moreover, th e general situation of the company prevented it from implementing 
any investment plans to increase its production capacity.  (iii) Evidence, if any, of critical circumstances where delay would cause injury that would be 
difficult to repair.  
 
 In the face of a rapid increase in imports , the company Papelera Nacional S.A. has 
experienced a dramatic deteriora tion in its economic indicators.  During the period under analysis, the 
increase in imports led to a loss of the domestic  industry's share in the domestic market which is 
reflected in a decline in sales.  As  a result, the company has had to lay off employees, and the value of 
its assets has declined.  These fact ors support the existence of critical circumstances causing damage 
that would be difficult to repair to the domestic industry for the said product.  
OFFICIAL REGISTER NO. 202 
FRIDAY, 31 OCTOBER 2003 
No. 03 052 
 
THE UNDER-SECRETARY FOR FOREIGN TRADE AND INTEGRATION OF THE MINISTRY 
OF FOREIGN TRADE, INDUSTRY, FISHERIES AND COMPETITIVENESS 
 
Whereas: 
 
 In communications dated 5 June and 31 July 2003, Mr Mariano González P., as President of 
the company Papelera Nacional S.A., calle Elizalde  No. 114 y Pichincha, Guayaquil, Ecuador, and 
Mr Andrés Jiménez Vásconez, as Commercial Manager,  requested the initiation of an investigation 
with a view to imposing a safeguard measure, as pr ovided for under the rules and regulations of the 
World Trade Organization and the Andean Community, for a period of four years, in the form of a 
15 per cent ad valorem  levy on imports of paper and paperboard classified under NANDINA 
subheadings 4803.00.10, 4804.11.00, 4804.19.00, 4804.29.00, 4804.31.00, 4804.39.00, 4804.41.10, 
4804.41.90, 4804.42.00, 4804.49.00, 4804.51.00, 4805.10.00, 4805.11.00, 4805.19.00, 4805.24.00, 
4805.25.00, 4805.29.90, 4805.60.90, 4805.70.90, 4805.80.90, and 4805.91.90; 
  Under Article XIX of the General Agreement on Tariffs and Trade, the WTO Agreement on 
Safeguards and the provisions of Titles XVII and XV III of the Consolidated Legal Text of the 
Ministry of Foreign Trade, Industry, Fisheries and Competitiveness (MICIP) as reflected in Executive 
Decree No. 3497, which was published in the Offici al Register No. 744 of 14 January 2003, and 
Article 97 of the Cartagena Agreement, which est ablish the rules and procedures to prevent and 
counteract the effects of unfair trade practices and of increased imports under such conditions as to 
cause or threaten to cause serious injury to th e domestic industry that produces like or directly 
competitive products, countries may impose safeguard measures;  
 Empresa Papelera Nacional S.A. represents more  than 60 per cent of the domestic paper and 
paperboard industry;   The analysis conducted by the investigating authority of the Ministry of Foreign Trade, Industry, Fisheries and Competitiveness revealed that  products classified under the following tariff 
subheadings were not being imported into the lo cal market in significant quantities:  4803.00.10, 
4804.19.00, 4804.29.00, 4804.31.00, 4804.39.00, 4804.41.10, 4804.11.90, 4804.42.00, 4804.49.00, 4804.51.00, 4805.10.00, 4805.29.00 and 4805.91.90;   According to the data supplied by the Ce ntral Bank of Ecuador and the information 
documentation supplied by the company Papelera Na cional S.A., imports of products classified under  G/SG/N/6/ECU/6 
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the following subheadings were producing disruptions , damage and threat of serious damage to the 
domestic paper and paperboard industry:  4804 .11.00, 4805.60.90, 4805.70.90, 4805.80.90, 
4805.11.00, 4805.19.00, 4805.24.00 and 4805.25.00;   Pursuant to Executive Decree No. 3497, publ ished in Official Register No. 744 of 
14 January 2003, it is the responsibility of the Unde r-Secretariat for Foreign Trade and Integration of 
the Ministry of Foreign Trade, Industry, Fisheri es and Competitiveness, to decide on and declare the 
initiation of the investigation;   According to the information supplied by the Central Bank of Ecuador, the countries 
exporting the products classified under NANDINA subheadings 4804.11.00, 4805.60.90, 4805.70.90, 
4805.80.90, 4805.11.00, 4805.19.00, 4805.24.00 and 4805.25.00 are the United States, Venezuela, Canada, Chile, Brazil, China, Belgium, Bolivia , Colombia, Norway, Chinese Taipei, Germany, 
France, Spain, Peru, Mexico, Italy, the Neth erlands, Finland, Japan, and the Holy See; 
 
 According to the records of the Central Ba nk of Ecuador, the following natural and legal 
persons have been identified as impor ters in Ecuador:  Barba Ramírez, Joaquín Eduardo;  BJ Services 
S.A.;  Cartonera Andina S.A.;  Cartorama C.A.;  Cia. Gral. de Comercio y Mandato S.A.;  Cia. 
Recubridora de Papel, Repalco;  Cimersa, Cia;   Exportadora Mercantil S.A.;  Conversa Convertidora 
de Papel S.A.;  Corporación de Promoción Universitari a;  Corporación Ecuatoriana de Aluminio S.A.;  
Cedal;  Corrugadora Nacional, Cransa S.A.;  Dybimagen S.A.;  Exportaciones Durexporta S.A.;  
Federico Milch Cia. Ltda.;  Fernel S.A.;  Fibran Cia. Ltda.;  Fosforera Ecuatoriana S.A.;  González 
Vélez Luis Fernando;  Grupasa, Grupo Papelero S. A.;  Icaro S.A.;  Importadora Candylan S.A.;  
Industrial La Reforma;  Industrial Pargráficos Cia. Ltda.;  Industrias Gráficas Rocafuerte, Ingraroca;  
Industrias Omega C.A.;  Industrias Unidas Cia. Ltda.;   Intermediaria de Ventas "Super Bahía" Subahi 
S.A.;  Juan Marcet Cia. Ltda.;  Kimberly Clark Ecuador S.A.;  Lan Chile Cargo;  Las fragancias Cia. 
Ltda.;  Maldonado Agreda Anastacia;  Mediterrán ea de Fragancias S.A.;  Mundo Mágico, Juguetería 
Magic S.A.;  Ofikores S.A.;  Organización Comercial Victor H. Caicedo;  Pino Nieto Gonzalo Eduardo;  Pinturas Marinas Hempel del Ec.;  Plásticos del Litoral, Plastlit S.A.;  Productos Familia Sandela del Ecuador S.A.;  Prov eedora Andina de Papel Andipape l;  Rendón Arias Mónica Aída de 
los Ángeles;  Royaltex S.A.;  Sintecucro S.A.;  Textiles Nacionales S.A.;  Tenasa;  Universidad Tecnológica Equinoccial;  Vernaza Grafic Cia. Ltda.;  Xerox del Ecuador S.A.; 
 
 On the basis of the information supplied by th e requesting company, massive imports of paper 
and paperboard are considered to be taking ove r a considerable share of the domestic market; 
  The company Papelera Nacional S. A., in conformity with Article 4.2(a) of the WTO Agreement 
on Safeguards and Article 302 of Exec utive Decree No. 3497, published in  Official Regi ster No. 744 of 
14 January 2003, submitted information relating to the volume of sales, production, productivity, 
capacity utilization, profits and losses and employ ment which shows that th e massive increase in 
imports of paper and paperboard cl assified under NANDINA subheadings 4 804.11.00, 4805.60.90, 
4805.70.90, 4805.80.90, 4805.11.00, 4805.19.00, 4805.24.00 and 4805.25.00 of the import tariff are causing serious injury to domestic production; 
 
 The request submitted by Papelera Nacional S. A. meets the requirements set out in the 
legislation currently in force;   The investigating authority has sufficient evidence to justify the initiation of an investigation; 
 
 In exercise of its powers,  G/SG/N/6/ECU/6 
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Decides: 
 
 Article 1.   To accept and initiate the investigati on requested by Papelera Nacional S.A., a 
legal person of Ecuadorian nationality, to determine whether the massive increase in imports of paper 
and paperboard classified under NANDINA subhead ings 4804.11.00, 4805.60.90, 4805.70.90, 
4805.80.90, 4805.11.00, 4805.19.00, 4805.24.00 and 4805.25.00 of the import tariff are causing 
serious injury to domestic production.   Article 2.   That the products subject to this inv estigation are paper and paperboard classified 
under subheadings NANDINA 4804.11.00, 4805.60.90, 4805.70.90, 4805.80.90, 4805.11.00, 
4805.19.00, 4805.24.00 and 4805.25.00 of the import ta riff, that are like or directly competitive with 
the products manufactured by the domestic industry.   Article 3.   That pursuant to Article 310 of Executive Decree No. 3497, published in Official 
Register No. 744 of 14 January 2003,  the investigation process shall take place over a period of three 
months from the date of publication of this resoluti on in the Official Register.  This period will be 
extendable in exceptional circumstances in order to allow for the procedures established in Article 3 
of the WTO Agreement on Safeguards with regard to  providing public notice to all interested parties 
and arranging public hearings or other appropriate means in whic h importers, exporters and other 
interested parties can present evidence and their vi ews, including the opportunity to respond to the 
presentations of other parties and to their submit their views, inter alia , as to whether or not the 
application of a safeguard measure would be in the public interest. 
  Article 4.   That the investigation period shall cover the years 2000, 2001, 2002, and the year 
of 2003 to date.  
 Article 5.   That the interested parties shall have a period of 30 calendar days starting from the 
notification of this Resolution to present additio nal documentation or information as they deem 
relevant within the investigation process.   Article 6.   To treat as confidential any informatio n supplied by Papelera Nacional S.A. as 
such. 
 
 Article 7.   That pursuant to Article 12.1(a) of the WTO Agreement on Safeguards and 
Article 331 of Executive Decree No. 3497, published in  Official Register No. 744 of 14 January 2003, 
the investigating authority shall notify the WTO Committee on Safeguards and the interested parties 
concerning the initiation of the investigation. 
 
 Article 8.   In accordance with Article 330 of Executive Decree No. 3497, published in 
Official Register No. 744 of 14 January 2003, to ensure  that this resolution is published in the Official 
Register as well as in a widely circulated newspaper in Ecuador.   Done in Quito on 16 October 2003. 
 
(f) Dr Cristian Espinosa, Under-Secretary for Foreign Trade and Integration.  
__________ 
  