WORLD TRADE
ORGANIZATIONG/SG/N/8/CZE/5
G/SG/N/10/CZE/5G/SG/N/11/CZE/6
28 February 2003
(03-1189)
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
CZECH REPUBLIC
The following notification, dated 24 February 2003, has been received from the Permanent
Mission of the Czech Republic.
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Pursuant to Articles 12.1(b), 12.1(c) and Article 9, Footnote 2 of the Agreement on
Safeguards, the Czech Republic submits a notification on finding serious injury or threat thereof, to
the domestic industry producing certain welded tubes and pipes, of iron or non-alloy steel and a
notification on proposed safeguard measure. This notification contains all pertinent informationrelating to the proposed safeguard measure in accordance with Article 12.2 of the Agreement on
Safeguards.G/SG/N/8/CZE/5
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NOTIFICATION UNDER ARTICLE 12.1(B) AND 12.1(C) OF THE AGREEMENT ON
SAFEGUARDS
In light of the agreed format for notifications (G/SG/W/1, 23 February 1995), the Czech
Republic provides notification to the Committee on Safeguards of findings of serious injury or threat
thereof caused by increased imports and notification of proposed safeguard measures.
On 6 March 2002, the Czech Republic initiated an investigation relating to serious injury to
domestic producers of products like or directly competing with imported welded tubes and pipes
(under CN codes 7306 30 21, 7306 30 29, 7306 30 59, 7306 30 71, 7306 30 78, 7306 60 31 and 730660 39 of the Customs Tariff).  The initiation of the investigation has been notified to the Committee
on Safeguards in G/SG/N/6/CZE/7 (11 March 2002).
Consistent with Article 12.2 of the Agreement on Safeguards, this notification contains all
pertinent information relating to the five products on which definitive safeguard measure areproposed.  This notification includes all the elements of information specified in Article 12.2 of the
Agreement on Safeguards.
1. Provide evidence of serious injury or th reat thereof caused by increased imports
The Ministry of Industry and Trade, the body responsible for conducting the investigation,
concluded that welded tubes and pipes (HS 7306 30 21, 7306 30 29, 7306 30 78, 7306 60 31, 7306 60
39) are being imported into the Czech Republic in such increased quantities and under such conditions
as to cause serious injury or threat thereof to the domestic industry.  This conclusion is based on a
number of factors as described below.
In tonnes
1999 2000 2001
Total import of products in question (HS 7306 30 21,
7306 30 29, 7306 30 78, 7306 60 31, 7306 60 39) 99 649 127 798 141 562
The import of products in question increased to 141 562 tonnes in 2001, which represents an
increase of 42 per cent and average unit price of imported products declined by 3,3 per cent,compared with 1999.  By contrast, for the same period of time the domestic sales dropped to 50 747
tonnes, a level representing 68,8 per cent of the volume sold in 1999, domestic production of products
in question has declined by 26 per cent and capacity utilisation fall to the level of 31,3 per cent in
2001.
It was determined that the significant decline of domestic sales resulted in growth of stocks of
the products in question with serious effects on profitability of their production that turned to become
negative.  This development resulted in reduction of 201 jobs and further aggravated the situation in
the region.
The table below contains all relevant indicators concerning the injury to the domestic
industry.G/SG/N/8/CZE/5
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Situation of domestic producers in relation to  products in question
 1999 2000 2001
 Utilisation rate of capacity (in %) 42,4 41,7 31,3
production
7306 30 21 9 160 8 424 9 709
7306 30 29 2 417 2 339 2 492
7306 30 78 29 697 26 172 17 906
7306 60 31 37 331 37 077 28 395
7306 60 39 26 604 29 282 19 056
Total production (in tonnes) 105 209 103 294 77 558
Rate of decrease (in %) 100 98 74
Domestic Sales
7306 30 21 6 780 6 530 7 010
7306 30 29 1 900 1 825 1 884
7306 30 78 18 201 16 789 9 760
7306 60 31 26 666 31 182 19 088
7306 60 39 20 120 25 857 13 005
 Sales volume in the domestic market (in tonnes) 73 667 82 183 50 747
 Market share (in %) 42,5 39,1 26,4
Net profit/loss on domestic market sales (in %)  
7306 30 21 -3,81 -2,28 -2,83
7306 30 29 -1,37 -8,51 -6,30
7306 30 78 6,88 11,06 1,27
7306 60 31 17,56 13,83 1,42
7306 60 39 9,24 4,80 -0,31
 Employment (end of the year) 684 603 483
 Productivity (tonne/employee) 154 171 161
It was determined that significant increase in imports deteriorated basic economic indicators,
in particular production, capacity utilisation, domestic sales, profitability, share on domestic market
and employment.  On the basis of these results it was found, that the imports of products in question
caused and still threaten to cause serious injury of the domestic industry.
The Ministry of Industry and Trade examined also other factors, which might have effect on
the existing injury to the domestic industry. The situation on the world market, production and
capacities in exporting represent furt her threat to the domestic market.   Products in question are
subject to the surveillance system and increased num ber of requests for the automatic licence signals
threat of further increase of imports.G/SG/N/8/CZE/5
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It is considered that there is a causal link between increased volume of imports and a serious
injury caused to the domestic industry.  This is demonstrated by the coincidence in time between the
recent increase in imports and the rapid deterioration of the injury indicators.
The safeguard measures adopted by number of countries in 2002 caused distortions on the
world market , in particular in their traditiona l business flows and caused unforeseen development.
Increased imports of products under CN codes 7306 30 21, 7306 30 29, 7306 30 78, 7306 60 31 and
7306 60 39 caused and still threaten to cause injury to the domestic industry of like or directly
competitive products.
2. Provide information on whether there is an absolute increase in imports or an increase
in imports relative to domestic production (please see also Article 2.1 for the context)
In the table below, there are shown data of consumption and volume and development of
imports
Consumption
1999 2000 2001
Consumption (in tonnes) 173 316 209 981 192 309
Ratio between imports and
 consumption (in %) (Market share) 57,5 60,9 73,6
Import data
1999 2000 2001
7306 30 21 12 936 20 296 20 755
7306 30 29 7 610 10 463 9 603
7306 30 78 9 069 10 930 15 004
7306 60 31 19 042 23 408 25 361
7306 60 39 50 993 62 701 70 840
Total imports (in tonnes) 99 649 127 798 141 562
Rate of increase (in %) 100 128 142
Ratio between imports and total
production (in %) 95 124 183
Ratio between imports and production
sold (in %) 94 123 186
3. Provide precise description of the product involved
The products in question are some welded tubes classified under CN codes:
7306 30 21 Precision tubes, with a wall thickness; Not exceeding 2 mm
7306 30 29 Precision tubes, with a wall thickness; Exceeding 2 mm
7306 30 78 Other, of an external di ameter Not exceeding 168,3 mm; Other
7306 60 31 Other, of rectangular (including square) cross-section, with a wall thickness;
Not exceeding 2 mmG/SG/N/8/CZE/5
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7306 60 39 Other, of rectangular (including square) cross-section, with a wall thickness;
Exceeding 2 mm
4. Provide precise description of the proposed measure
The Ministry of Industry and Trade proposed the safeguard measure in the form of tariff
quotas, calculated as an average of imports during the last three years plus 10 per cent in excess of
which an additional duty will have to be paid.  The tariff quotas will be allocated territorially. In
accordance with the relevant provisions of the Act No. 62/2000 Coll. and the WTO Agreement on
Safeguards, the measure will be liberalized progressively during the period of its validity.
In course of the investigation the Ministry of Industry and Trade has determined that
regarding imports of products classified under HS codes 7306 30 59 and 7306 30 71 not all conditions
set forth in Article 2 of the Agreement on Safeguards have been met and, proposed safeguard measure
will not be applied with respect to these products.
Suggested customs tariff quotas and their allocation, including additional duty rate
Volume of tariff quota
(tonnes)Volume of tariff quota
(tonnes)
(a) ProductDesignation of the
productCountry From
1.3.2003 to
31.12.2003Additional
duty rateFrom
1.1.2004 to
31.12.2004Additional
duty rate
EU 13 177 16 603
CEFTA 2 520 3 175
Others 799 1 0077306 30 21 Precision tubes, with a
wall thickness; Not
exceeding 2 mm
Total 16 49620,3 %
20 78518,3 %
EU 6 193 7 802
CEFTA 1 816 2 288
Others 438 5537306 30 29 Precision tubes, with a
wall thickness;
Exceeding 2 mm
Total 8 45713,5 %
10 65512,2 %
EU 8 407 10 593
CEFTA 1 198 1 510
Others 1 090 1 3737306 30 78 Other, of an external
diameter Not exceeding
168,3 mm; Other
Total 10 69522,4 %
13 47620,2 %
EU 11 216 14 132
CEFTA 7 043 8 875
Others 2 461 3 1007306 60 31 Other of rectangular
(including square) cross-section, with a wall
thickness; Not exceeding
2 mm Total20 72017,3 %
26 10715,6 %
EU 40 323 50 807
CEFTA 14 168 17 851
Others 1 894 2 3867306 60 39 Other of rectangular
(including square) cross-
section, with a wall
thickness; Exceeding 2mm Total56 38420,3 %
71 04418,3 %
5. Provide proposed date of introduction of the measure
The proposed date of introduction of the proposed measures is 1 March 2003.G/SG/N/8/CZE/5
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6. Provide expected duration of the measure
The safeguard measure will be applied for the maximum period not exceeding
31 December 2004.
7. For a measure with a duration of more than three years, provide the proposed date for
the review (under Article 7.4) to be held not later than the mid-term of the measure, if such a
date for the review has already been scheduled
Not applicable.
8. If the expected duration is over one year, provide expected timetable for progressive
liberalisation of the measure
As noted above in item 4, each of the proposed measures provides for progressive
liberalisation.  The terms of the liberalisation are indicated in item 4.
9. Provide information relating to the extension of a safeguard measure
Not applicable.G/SG/N/8/CZE/5
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NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2, ON THE NON-APPLICATION OF
SAFEGUARD MEASURE TO DEVELOPING COUNTRIES UNDER ARTICLE 9.1
1. Specify the measure
See response to question 4 above.
2. Specify the product subject to the measure
See response to question 4 above.
3. Specify the developing countries to which the measure is not applicable under Article 9.1 of
the Agreement on Safeguards, and the import shares of these countries individually and
collectively
The developing countries to which the measure is not applied under Article 9.1 of the
Agreement on Safeguards are the members of the WTO listed in Annex of the Government
Regulation No. 534/2002, issuing the Customs Tariff and establishing rates of import tariffs on goods
origination in developing countries and least developed countries and the terms for their application.
A list of these countries is attached to this notification.
4. Subsequently, if there is a change in the list of developing countries exempted form the
safeguard measure pursuant to Article 9.1, please notify
(i) the reference to the WTO document that no tified the Members about the initial action
under footnote 2 to Article 9.1;
(ii) if applicable, names of the countries which are dropped from the list of developing
countries to which the safeguard measure does not apply pursuant to Article 9.1, the
countries remaining on the list, the individual and collective import shares of the
developing countries remaining on the list, and the date on which the safeguard
measure applies to the countries dropped from the list;
(iii) if applicable, names of the countries which are added to the list of developing
countries to which the safeguard measure does not apply pursuant to Article 9.1, the
list of all the countries on the list, the individual and collective import shares of the
developing countries on the list, and the date from which the safeguard measure doesnot apply to the countries which are added to the list.
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ANNEX
AL Albania LS Lesotho
AO Angola MG Madagascar
AG Antigua and Barbuda MY Malaysia
AR Argentina MW Malawi
BH Kingdom of Bahrain MV Maldives
BD Bangladesh ML Mali
BB Barbados MR Mauritania
BZ Belize MU Mauritius
BJ Benin MX Mexico
BO Bolivia MD Moldova
BW Botswana MN Mongolia
BR Brazil MA Morocco
BN Brunei Darussalam MZ Mozambique
BF Burkina Faso MM Myanmar
BI Burundi NA Namibia
CM Cameroon NI Nicaragua
CF Central African Republic NE Niger
TD Chad NG Nigeria
CL Chile OM Oman
CN China PK Pakistan
CO Colombia PA Panama
CG Congo PG Papua New Guinea
CR Costa Rica PY Paraguay
CI Côte d’Ivoire PE Peru
CU Cuba PH Philippines
CD Democratic Republic of the Congo QA Qatar
DJ Djibouti RW Rwanda
DM Dominica LC Saint Lucia
DO Dominican Republic VC Saint Vincent and the Grenadines
EC Ecuador SN Senegal
EG Egypt SL Sierra Leone
SV El Salvador SB Solomon Islands
FJ Fiji ZA South Africa
GA Gabon LK Sri Lanka
GM Gambia SR SurinameG/SG/N/8/CZE/5
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GE Georgia SZ Swaziland
GH Ghana TZ Tanzania
GD Grenada TH Thailand
GT Guatemala TG Togo
GN Guinea TT Trinidad and Tobago
GW Guinea-Bissau TN Tunisia
GY Guyana UG Uganda
HT Haiti AE United Arab Emirates
HN Honduras UY Uruguay
IN India VE Venezuela
ID Indonesia ZM Zambia
JM Jamaica ZW Zimbabwe
JO Jordan
KE Kenya
KW Kuwait
KG Kyrgyz Republic
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