WORLD TRADE G/SG/N/10/ARG/1
G/SG/N/11/ARG/1
15September 1997ORGANIZATION(97-3650)
Original: Spanish Committee onSafeguards
NOTIFICATION UNDER ARTICLE 12.1(b) OFTHE AGREEMENT ON
SAFEGUARDS ONFINDING ASERIOUS INJURY ORTHREAT
THEREOF CAUSED BYINCREASED IMPORTS
ARGENTINA
Thefollowing communication, dated 1September 1997, hasbeenreceived fromthePermanent
Mission ofArgentina.
_______________
Ihavethepleasure ofaddressing youinorder tonotify theCommittee onSafeguards ofthe
intention oftheArgentine authorities toimpose afinal measure under Article 12.1(c). The
above-mentioned measure isrelated totheinvestigation ofinjury tothenational footwear industry that
hasbeencarried outinmycountry. Itwillbenoted thatthedetermination ofinjury bytheNational
Foreign Trade Commission wasnotified bynotedated 25/7/97 andiscontained indocument
G/SG/N/8/ARG/1.
Ialsoenclose anotification pursuant tofootnote 2ofArticle 9onthenon-application ofthe
measure todeveloping countries, inaccordance withArticle 9.1oftheSafeguards Agreement.
Iwould liketoremind youthatontheoccasion oftheinjury notification (G/SG/N/8/ARG/1)
weoffered consultations either inBuenos Aires ofGeneva tointerested delegations. Asnorequest
wasthenreceived, wearereiterating theofferofconsultations prior totheadoption ofthemeasure,
either inrelation withtheinjury determination ortheplanned measure itself, toanyparty expressing
aninterest indoing so.Forthispurpose adelegation ofArgentine representatives willbeavailable
inGeneva between 8and10ofSeptember.
_______________
I. NOTIFICATION PURSUANT TOARTICLE 12.1(c)
1. Evidence ofserious injury orthreat thereof caused byincreased imports
Theevidence ofserious injury orthreat thereof iscontained intheinjury determination made
bytheNational Foreign Trade Commission thatwasnotified totheCommittee onSafeguards bya
noteof25July1997 circulated indocument G/SG/N/8/ARG/1, andparticularly thecontents of
Section VI,"Condition oftheDomestic Industry", inthatcommunication.
Among other things, thatnotification provides details, intheabove-mentioned Section, onthe
situation of"Production" (point 1),"Sales ofproduction ondomestic market" (point 3),"Inventories"
(point 4),"Costs" (point 5),"Installed Capacity" (point 6),"Level ofEmployment" (point 7),"Domestic
Prices" (point 8),"Economic andFinancial Situation ofEnterprises" (point 9).G/SG/N/10/ARG/1
G/SG/N/11/ARG/1
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2. Information onincreased imports, import trends andtheirrelationship todomestic production
Theexistence ofinjury tothedomestic industry waspreviously notified totheWTO Committee
onSafeguardsbytheabove-mentionednotedated25July1997containedindocumentG/SG/N/8/ARG/1.
ByActNo.338of12June1997, theNational Foreign Trade Commission (CNCE), thebody
responsible formaking thedetermination inquestion, concluded that"increased imports arecausing
serious injury tothedomestic industry andthatthere isafurther threat ofinjury intheabsence of
safeguard measures".
Thisdetermination isbased onanumber ofpreceding conclusions which aresummarized below,
withanindication ineachcaseofthecorresponding section oftheNational Foreign Trade Council 's
Act:
(a) Imports: theincrease inimports, bothinabsolute terms andrelative todomestic
production, isofthekindcovered bytheAgreement onSafeguards. There isan
increase such astocause significant impairment tothedomestic industry. This
conclusion isbased onthefollowing facts:
- Thec.i.f. value ofimports increased by157percentbetween 1991
and1995, andby163percentbetween 1991and1996(Section VII.1).
- Thequantity ofpairsimported increased by70percentbetween 1991
and1995, andby52percentbetween 1991and1996(Section VII.1).
- Thedomestic market share ofimports alsoincreased substantially.
Foralltypesoffootwear,theshareofimportsinapparentconsumption,
measured atcurrent prices (pesos), increased from10percentin1991
to27percentin1995, while measured innumbers ofpairs itrose
from 12percentin1991 to21percentin1995, reaching apeakof
25percentin1997 (Section VIII.1 andVIII.2).
- Thegrowth ofimports wasgreater intheperformance sports shoe
segment thanforother types offootwear (Section VIII.2).
- Owing totheirlower price, imports exerted strong pressure onthe
industry, significantly affecting results (Section XIII.1).
- Theinternational picture shows astrong growth ofimports offootwear
andmajor restructuring processes, together with many cases of
government action torestrict suchimports (Section IX).
Thus, anabsolute growth ofimports between 1991and1995hasbeenfound toexist.
Furthermore, thisincrease hasalsotaken place relative todomestic production and
thedomestic market.
(b) Effects ofimports ondomestic production: increased imports arecausing serious injury
tothedomestic industry andthereisafurther threat ofinjury intheabsence ofsafeguard
measures, according tothefactual findings oftheinvestigation:
- During theperiod under investigation, thevolume ofoutput declined
bothoverall andforthedomestic market. Thedecline wasgreaterG/SG/N/10/ARG/1
G/SG/N/11/ARG/1
Page3
forthesample ofenterprises surveyed thanforestimated totaloutput
based onmacroeconomic statistics (Section VI.1).
- Theperformanceofproductionmeasuredatcurrentpriceswasdifferent
fromthatofproduction inphysical terms, showing agrowth of7.7per
centbetween 1991 and1995. Thisisaccounted forbythefactthat
theindustryshiftedproductiontohigherunit-valueproductsinresponse
todemand factors andtheneedtocompete intheinternational footwear
trade within theconstraints oftheArgentine rules ofthegame
(Section VI.1).
- Thisdecline inoutput wasreplaced byimports, essentially cheap
imports, astheinvestigation shows agrowth inapparent consumption,
bothincurrent pesos andinpairs, withthesoleexception ofthelatter
estimate fortheyear1995, which showed asignificant dropdueto
theeconomic recession (Section XIII.1).
- Production forthedomestic market declined proportionally more than
total output, asexports increased significantly over theperiod
1991-1995 (Section VI.2andVI.3).
- Although theeffect ofthespecial minimum import duties (DIEMs)
began in1994 andincreased between 1995 and1996, theindustry 's
condition hasdeteriorated, with ademonstrated reduction in
employment, rising inventories andworsening oftheeconomic and
financial situation ofcompanies (Section VI).
3. Product affected
Forthepurposes ofitsstudy ofthisproduct, theCNCE grouped types offootwear "thatwere
more orlesshomogeneous from thestandpoint ofcompetitive conditions, thatistosay,forwhich
within eachgroup there wasgreater substitutability bothofsupply andofdemand thanproducts of
between different groups" (G/SG/N/8/ARG/1, page10[Spanish] ofCNCE Act338).
TheCNCE wasaware thatinamarket displaying highproduct heterogeneity, there could be
industry segments withdiffering degrees ofcompetitiveness relative toimports.
ItthereforeconsideredFIVE(5)groupsbasedonthecriterionofhomogeneityfromthestandpoint
ofcompetitiveness, within eachofwhich there washighsubstitutability interms ofbothsupply and
demand factors.
TheCNCE decided toconsider exclusively women 'sfootwear asacategory initself. Inthis
case,bothproducers andimporters recognized thatthistypeoftownfootwear hasitsownmarket forces
thatarehighly influenced byfashion.
Since thedemarcation linebetween men'stown footwear, men'scasual footwear andunisex
footwear ismore blurred, these types offootwear weregrouped inasingle category under theheading
ofmen'sandunisex footwear.
Sports footwear wasdivided intotwogroups: performance shoes andnon-performance shoes.G/SG/N/10/ARG/1
G/SG/N/11/ARG/1
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Thefifthandlastcategory, fortypes offootwear notincluded inother groups, wastitled
"others".
Theanalysis covered thefollowing tariff headings:
6401 WATERPROOF FOOTWEAR OFRUBBER ORPLASTICS
6401.10.00 Footwear incorporating aprotective metal toe-cap
6401.91.00 Other footwear, covering theknee
6401.92.00 Other footwear, covering theankle, butnotcovering theknee
6401.99.00 Other
6402 FOOTWEAR OFRUBBER ORPLASTICS
6402.12.00 Skiandsnowboard boots
6402.19.00 Other (sports)
6402.20.00 Footwear withuppers ofstraps (thongs)
6402.30.00 Other footwear, incorporating aprotective metal toe-cap
6402.91.00 Other, covering theankle
6402.99.00 Other
6403 FOOTWEAR WITH LEATHER UPPERS
6403.12.00 Skiandsnowboard boots
6403.19.00 Other (sports)
6403.20.00 Footwear withouter soles ofleather anduppers ofstraps
6403.30.00 Footwear made onaplatform ofwood
6403.40.00 Other footwear, incorporating aprotective metal toe-cap
6403.51.00 Other footwear covering theankle, withsoles ofleather
6403.59.00 Other, withsoles ofleather
6403.91.00 Other, covering theankle, withouter soles ofrubber orplastics
6403.99.00 Other, withouter soles ofrubber orplastics
6404 FOOTWEAR WITH TEXTILE UPPERS
6404.11.00 Sports footwear withouter soles ofrubber orplastics
6404.19.00 Other, withouter soles ofrubber orplastics
6404.20.00 Footwear withouter soles ofleather
6405 OTHER FOOTWEAR
6405.10 With uppers ofleather
6405.10.10 With soles ofrubber orplastics anduppers ofcomposition leather
6405.10.20 With soles anduppers ofcomposition leather
6405.10.90 Other
6405.20.00 With uppers oftextile material
6405.90.00 OtherG/SG/N/10/ARG/1
G/SG/N/11/ARG/1
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4. Proposed measure
Thesafeguard action tobetaken willconsist insetting minimum specific duties tobeapplied
tothetariff headings listed below:
Provisional Minimum Specific Duties onFootwear Imports
Tariff heading US$perpair
6401.10.00 0.00
6401.91.00 0.00
6401.92.00 2.58
6401.99.00 2.26
6402.12.00 0.00
6402.19.00 7.40
6402.20.00 0.00
6402.30.00 0.00
6402.91.00 7.00
6402.99.00 6.30
6403.12.00 0.00
6403.19.00 12.10
6403.20.00 0.00
6403.30.00 0.00
6403.40.00 14.51
6403.51.00 13.32
6403.59.00 16.09
6403.91.00 10.40
6403.99.00 7.30
6404.11.00 7.00
6404.19.00 2.50
6404.20.00 0.00
6405.10.10 7.30
6405.10.20 7.30
6405.10.90 7.30
6405.20.00* 0.84
6405.90.00 7.30
*Except footwear withsoles anduppers ofwool felt.
5. Proposed dateofintroduction ofthemeasure
13September 1997.
6. Duration ofthemeasure
Themeasure willapply forTHREE (3)years, running from25February 1997, dateofentry
intoforce oftheprovisional measure applied byMinistry oftheEconomy Resolution No.226/97.G/SG/N/10/ARG/1
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7. (Iftheduration ofthemeasure exceeds three years, indicate theproposed dateofthereview
tobecarried out(pursuant toArticle 7.4)notlaterthanthemid-term ofthemeasure, ifthe
dateofsuchreview hasalready beenset)
Does notapply.
8. Planned timetable fortheprogressive liberalization ofthemeasure
Minimum specific import duties onimports offootwear
$USperpair
Tariff heading Safeguard measure Liberalization timetable
13.09.97 1.05.98 16.12.98 1.08.99
6401.10.00 0.00 0.00 0.00 0.00
6401.91.00 0.00 0.00 0.00 0.00
6401.92.00 2.58 2.51 2.44 2.36
6401.99.00 2.26 2.20 2.14 2.07
6402.12.00 0.00 0.00 0.00 0.00
6402.19.00 7.40 7.10 6.40 4.90
6402.20.00 0.00 0.00 0.00 0.00
6402.30.00 0.00 0.00 0.00 0.00
6402.91.00 7.00 6.80 6.40 5.64
6402.99.00 6.30 6.10 5.65 4.45
6403.12.00 0.00 0.00 0.00 0.00
6403.19.00 12.10 11.70 10.60 8.10
6403.20.00 0.00 0.00 0.00 0.00
6403.30.00 0.00 0.00 0.00 0.00
6403.40.00 14.51 14.11 13.71 13.30
6403.51.00 13.32 12.95 12.58 12.21
6403.59.00 16.09 15.64 15.19 14.75
6403.91.00 10.40 10.00 9.15 7.04
6403.99.00 7.30 7.10 6.60 5.39
6404.11.00 7.00 6.80 6.25 4.90
6404.19.00 2.50 2.36 2.14 1.79
6404.20.00 0.00 0.00 0.00 0.00
6405.10.10 7.30 6.91 6.32 5.39
6405.10.20 7.30 6.91 6.32 5.39
6405.10.90 7.30 6.91 6.32 5.39
6405.20.00* 0.84 0.80 0.75 0.68
6405.90.00 7.30 6.91 6.32 5.39
*Except footwear withsoles anduppers ofwool felt.G/SG/N/10/ARG/1
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II. NOTIFICATION PURSUANT TOARTICLE 9.1
1. Measure tobeadopted
Thesafeguard measure tobeadopted willconsist inthesetting ofminimum specific duties
tobeapplied tothefollowing tariff headings:
Minimum specific duties
Heading $USperpair
6401.10.00 0.00
6401.91.00 0.00
6401.92.00 2.58
6401.99.00 2.26
6402.12.00 0.00
6402.19.00 7.40
6402.20.00 0.00
6402.30.00 0.00
6402.91.00 7.00
6402.99.00 6.30
6403.12.00 0.00
6403.19.00 12.10
6403.20.00 0.00
6403.30.00 0.00
6403.40.00 14.51
6403.51.00 13.32
6403.59.00 16.09
6403.91.00 10.40
6403.99.00 7.30
6404.11.00 7.00
6404.19.00 2.50
6404.20.00 0.00
6405.10.10 7.30
6405.10.20 7.30
6405.10.90 7.30
6405.20.00* 0.84
6405.90.00 7.30
*Except footwear withsoles anduppers ofwool felt.
2. Description oftheproduct
Forthepurposes ofitsstudy ofthisproduct, theCNCE grouped oftypes offootwear "that
weremore orlesshomogeneous fromthestandpoint ofcompetitive conditions, thatistosay,forwhich
within eachgroup there wasgreater substitutability bothofsupply andofdemand thanproducts of
between different groups".G/SG/N/10/ARG/1
G/SG/N/11/ARG/1
Page8
TheCNCE wasaware thatinamarket displaying highproduct heterogeneity, there could be
industry segments withdiffering degrees ofcompetitiveness relative toimports.
ItthereforeconsideredFIVE(5)groupsbasedonthecriterionofhomogeneityfromthestandpoint
ofcompetitiveness, within eachofwhich there washighsubstitutability interms ofbothsupply and
demand factors.
TheCNCE decided toconsider exclusively women 'sfootwear asacategory initself. Inthis
case,bothproducers andimporters recognized thatthistypeoftownfootwear hasitsownmarket forces
thatarehighly influenced byfashion.
Since thedemarcation linebetween men'stown footwear, men'scasual footwear andunisex
footwear ismore blurred, these types offootwear weregrouped inasingle category under theheading
ofmen'sandunisex footwear.
Sports footwear wasdivided intotwogroups: performance shoes andnon-performance shoes.
Thefifthandlastcategory, fortypes offootwear notincluded inother groups, wastitled
"others".
Theanalysis covered thefollowing tariff headings:
6401 WATERPROOF FOOTWEAR OFRUBBER ORPLASTICS
6401.10.00 Footwear incorporating aprotective metal toe-cap
6401.91.00 Other footwear, covering theknee
6401.92.00 Other footwear, covering theankle, butnotcovering theknee
6401.99.00 Other
6402 FOOTWEAR OFRUBBER ORPLASTICS
6402.12.00 Skiandsnowboard boots
6402.19.00 Other (sports)
6402.20.00 Footwear withuppers ofstraps (thongs)
6402.30.00 Other footwear, incorporating aprotective metal toe-cap
6402.91.00 Other, covering theankle
6402.99.00 Other
6403 FOOTWEAR WITH LEATHER UPPERS
6403.12.00 Skiandsnowboard boots
6403.19.00 Other (sports)
6403.20.00 Footwear withouter soles ofleather anduppers ofstraps
6403.30.00 Footwear made onaplatform ofwood
6403.40.00 Other footwear, incorporating aprotective metal toe-cap
6403.51.00 Other footwear covering theankle, withsoles ofleather
6403.59.00 Other, withsoles ofleather
6403.91.00 Other, covering theankle, withouter soles ofrubber orplastics
6403.99.00 Other, withouter soles ofrubber orplastics
6404 FOOTWEAR WITH TEXTILE UPPERS
6404.11.00 Sports footwear withouter soles ofrubber orplastics
6404.19.00 Other, withouter soles ofrubber orplastics
6404.20.00 Footwear withouter soles ofleather
6405 OTHER FOOTWEAR
6405.10 With uppers ofleather
6405.10.10 With soles ofrubber orplastics anduppers ofcomposition leather
6405.10.20 With soles anduppers ofcomposition leather
6405.10.90 Other
6405.20.00 With uppers oftextile material
6405.90.00 OtherG/SG/N/10/ARG/1
G/SG/N/11/ARG/1
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3. Developing countries towhich themeasure doesnotapply pursuant toArticle 9.1ofthe
Agreement onSafeguards, andindividual andcollective import shares ofthose countries
Imports originating inWTO developing country Members withlessthan
3%share oftotalimports
(inpairs)
Country oforigin 1996 Share
Republic ofKorea 391,878 2.91
Thailand 238,730 1.77
Philippines 133,824 0.99
Chile 122,923 0.91
Hong Kong 68,440 0.51
Mexico 6,958 0.05
Macau 4,536 0.03
Malaysia 2,138 0.02
India 1,451 0.01
South Africa 670 0.00
Singapore 325 0.00
ElSalvador 234 0.00
Bolivia 204 0.00
Peru 100 0.00
Egypt 81 0.00
Israel 68 0.00
Honduras 48 0.00
Colombia 19 0.00
SriLanka 7 0.00
TOTAL 7.20