WORLD TRADE
ORGANIZATIONG/SG/N/8/HUN/3
G/SG/N/10/HUN/3G/SG/N/11/HUN/3/Suppl.1
28 November 2003
(03-6330)
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
HUNGARY
Certain Sugar Products
The following communication, dated 27 November 2003, is being circulated at the request of
the Delegation of Hungary.
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Pursuant to Articles 12.1(b), 12.1(c) and Article 9, Footnote 2 of the Agreement on
Safeguards and the format for notification adopted by the Committee on Safeguards (G/SG/1),Hungary hereby submits a notification on finding of serious injury or threat thereof caused by
increased imports and on the proposed safeguard measures.
On 21 July 2003, the Republic of Hungary initiated an investigation relating to serious injury
to domestic producers of products like or directly competing with imported sugar products classified
within HS 1701.91.00.00, 1701.99.10.00 and 1701.99.90.00.  The initiation of the investigation hasbeen notified to the Committee on Safeguards as well as the introduction of the provisional measure
in documents G/SG/N/6/HUN/3, G/SG/N/7/HUN/3, G/SG/N/11/HUN/3.
Consistent with Article 12.2 of the Agreement on Safeguards, this notification contains all
pertinent information relating to products classified within HS 1701.91.00.00, 1701.99.10.00 and1701.99.90.00.
1. Evidence of serious injury or threat  thereof caused by increased imports
The Ministry of Economy and Transport, the authority responsible for the investigation,
concluded that certain sugar products specified under item 3 of this notification had been imported
into the Hungarian market in such increased quan tity and under such conditions that caused serious
injury to the domestic industry and that a definitive safeguard measure is necessary to remedy and
prevent further injury.  The investigating authority examined the situation of the domestic and world
markets including capacities, production and consumption trends.  The investigating authorityG/SG/N/8/HUN/3
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evaluated all relevant factors having a bearing on the situation of the domestic industry and concluded
that the injury suffered has been attributable to increased imports.  These conclusions were based on
the factors described below:
After a significant drop in 2000 imports of products classified within HS 1701.91.00.00,
1701.99.90.00 and 1701.99.90.00 basically returned to the level of 1999.  In 2002 however imports
increased by 73.3 per cent.  A further sharp increase was registered in the first ten months of 2003, the
imports reaching a volume of 36,369 tonnes.   
HS Years
heading 1999 2000 2001 2002 2003 I-X
months
1701.91.00.00
1701.99.10.00
1701.99.90.00
Total 12,612 5,937 14,358 24,886 36,369
The price level of imports has been very low:  it was below the domestic price level by 46 per
cent in 1999, by 32 per cent in 2000, by 45 per cent in 2001 and by 53 per cent in 2002.
After a drop in 2000 the share of imports within domestic consumption increased in 2001 to a
level (4.3 per cent) exceeding that of 1999 (3.3 per cent).  In 2002 this ratio increased to 7.7 per cent.
The first ten months of 2003 show a continuation of this trend with an increase to 12.9 per cent.
Comparing the import data to the Hungarian pr oduction the same tendency can be observed.
In the period of 1999-2002 the share of imports were 2.9:  2.2:  3.4:  7.3 per cent respectively and in
the first ten months of 2003 it was 28.3 per cent.
Statistical data of certain sugar products
1999 2000 2001 2002 2003
I-X months
Productiontonnes 432,974 268,238 425,229 341,192 128,505
Importstonnes 12,612 5,937 14,358 24,886 36,369
Exportstonnes 46,664 27,576 7,823 67,769 26,864
Domesticconsumptiontonnes381,740 343,890 332,071 319,504 281,854
Imports/domestic
consumption
%3.3 1.7 4.3 7.7 12.9
Imports/production
% 2.9 2.2 3.4 7.3 28.3
Employment (%)1999=100% 100 84 82 71 67G/SG/N/8/HUN/3
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Following a drop in 2000 production in 2001 was back at the level of 1999 but decreased in
2002 by 19.8 per cent.  The first ten months of 2003 there was a further significant decrease of
production.  Domestic consumption of white sugar has been on a gradual but constant decreasebetween 1999-2002.
The level of capacity utilisation decreased by 7.6 per cent from 2001 to 2002.  Profitability
fell by 17 per cent in 2002 compared to 2001.  For 2003 it is expected that the industry will incur
heavy losses.  The employment level decreased from 1,843 employees in 2001 to 1,585 employees in
2002.
The investigating authority established that the import increased sharply in absolute term and
relative to production and consumption at low prices and these factors are in causal link with the
injury.  The investigating authority did not identify any other factor which could have contributed to
the serious injury.
The sudden appearance of huge quantities of exports well below the production costs of the
exporting countries was considered to be an unforeseen development by the investigating authority.
2. Information on whether there is an absolu te increase in imports or an increase in
imports relative to domestic production
See detailed data under item 1.
3. Precise description of the product involved
HS 1701.91.00.00 Other, containing adde d flavouring or colouring matter
HS 1701.99.10.00 White sugar
HS 1701.99.90.00 Other
4. Description of the proposed measure
The Ministry of Economy and Transport proposed the safeguard measure in the form of an
additional duty of 93 per cent.  Within quantitative limits described in the Annex to this notification a
reduced additional duty rate of 44 per cent is proposed to be applicable.  The quantitative limits are
calculated proportionally on the basis of average quantities imported in the past three years (2000-
2002) increased by ten per cent for 2003 and by fifteen per cent for 2004.
5. Proposed date of introduction of the measure
The proposed date of introduction of the measure is 21 November 2003.
6. Expected duration of the measure
The safeguard measure will be applicable from 21 November 2003 until 30 April 2004.
7. For a measure with a duration of more that  three years, the proposed date for the
review (under Article 7.4) to be held not later than the mid-term of the measure, if sucha date for the review has already been scheduled
Not applicable.G/SG/N/8/HUN/3
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8. Expected timetable for progressive liberalisation of the measure
Not applicable
9. Information relating to the extension of a safeguard measure
Not applicable.G/SG/N/8/HUN/3
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Annex
Proposed customs tariff quotas, quota allocation
and reduced additional duty rate
CountryVolume of quota in
tonnes between
21 November 2003-31
December 2003Volume of quota in
tonnes between
1 January 2004-
30 April 2004Reduced additional
duty rate
%
EU 857 2,369 44
Poland 537 1,484 44
Slovak Republic 349 989 44
Czech Republic 213 590 44
Other 123 341 44G/SG/N/8/HUN/3
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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
The proposed measure consists of an additional duty of 93 per cent.  A reduced additional
duty is applicable within quota limits.  The quantitative limits are calculated proportionally on the
basis of average quantities imported in the past three years (2000-2002) increased by ten per cent for
2003 and by fifteen per cent for 2004.
2. Product subject to the measure
The proposed measure applies to products classified within
HS 1701.91.00.00
HS 1701.99.10.00
HS 1701.99.90.00.
3. Developing countries to which the measure is not applied under Article 9.1 of the
Agreement on Safeguards, and the import shores of these countries individually and
collectively
Imports of the products concerned originating in any of the developing or least developing
countries shall not be subject to the safeguard measure.  These countries are the following:
Afghanistan, Albania, Algeria, Angola, Argent ina, Bahamas, Bangladesh, Barbados, Belize,
Benin, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Burkina Faso, Burundi,
Cambodia, Cameroon, Cape Verde, Central Africa n Republic, Chad, Chile, People’s Republic of
China, Colombia, Comoros, Congo, Costa Rica, Cuba, Democratic People's Republic of Korea,
Democratic Republic of Congo, Djibouti, Dominican Republic, Ecuador, Egypt, Equatorial Guinea,
Eritrea, Ethiopia, Fiji, Gabon, Gambia, Ghana, Gr enada, Guatemala, Guinea, Guinea-Bissau, Guyana,
Haiti, Honduras, India, Indonesia, Iran (Islamic Republic of), Iraq, Ivory Coast, Jamaica, Jordan,
Kenya, Kiribati, Lao People's Democratic Republic, Lebanon, Lesotho, Liberia, Libyan Arab
Jamahiriya, Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mauritius, Mexico,
Mongolia, Morocco, Mozambique, Myanmar, Nepal, Nicaragua, Niger, Nigeria, Oman, Pakistan,
Papua New Guinea, Peru, Philippines, Rwanda, Saint Lucia, Saint Vincent and the Grenadines,Samoa, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Singapore, Solomon Islands,
Somalia, South Africa, Sri Lanka, Sudan, Suriname, Swaziland, Syrian Arab Republic, Thailand,
Togo, Tonga, Trinidad and Tobago, Tunisia, Tuvalu, Uganda, United Republic of Tanzania, Uruguay,
Vanuatu, Venezuela, Viet Nam, Yemen, Zambia, Zimbabwe.
4. Not applicable.
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