. /.WORLD TRADE
ORGANIZATIONG/SG/39
17 January 2002
(02-0239)
Committee on Safeguards Original:  English
PROVISIONAL SAFEGUARD MEASURE IMPOSED BY THE CZECH REPUBLIC
ON IMPORTS OF COCOA POWDER CONTAINING 80 PER CENT OR MORE
BY WEIGHT OF SUCROSE (INCLUDING INVERT SUGAR EXPRESSED AS
SUCROSE) OR ISOGLUCOSE EXPRESSED AS SUCROSE
Request for Consultations under Article 12.4
of the Agreement on Safeguards
POLAND
The following communication, dated 16 January 2002, has been received from the Permanent
Mission of Poland.
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On 16 November 2001, the Czech Republic notified the WTO (document G/SG/N/6/CZE/4)
of the initiation of the safeguard investigation as regards imports of cocoa powder.  On
27 November 2001, the Czech Republic notified its intention to apply a safeguard measure (document
G/SG/N/7/CZE/3) and on 30 November 2001 imposed the provisional safeguard measure on imports
of cocoa powder in the form of a tariff increase by the introduction of the additional import duty at the
level of 113 per cent to the product in question.
Poland is of the opinion that this measure is inconsistent with Article XIX of the GATT and
the Agreement on Safeguards and considers that the requirements contained in the Agreement on
Safeguards for the adoption of a provisional safeguard measure have not been met.  According to
notification No. G/SG/N/6/CZE/4 of 23 November 2001 the product subject to investigation is cocoapowder containing 80 per cent or more by weight of sucrose (including invert sugar expressed as
sucrose) or isoglucose expressed as sucrose (HS item 1806 10 90) and defined as a product
substituting or limiting usage of sugar produced in the Czech Republic.
Poland is of the view that cocoa powder is not "the like or directly competitive product"
according to Article 4.1(c) and has doubts that imported cocoa powder competes directly with
domestic sugar, in particular given that they have to a large extent different physical and chemical
characteristics, applications and end users.
Furthermore, the WTO Agreement on Safeguards requires that the existence of the causal link
between increased imports of the product concerned and serious injury is demonstrated.  No causal
link was indicated in the notification and taking into account that the share of imported cocoa powder
(recounted to the volume of sugar) in domestic sugar production amounted only to 2.6 per cent
(1 January-31 October 2001) and in domestic sugar consumption 3.1 per cent, it is difficult to believe
that imports can cause any injury to domestic sugar production.G/SG/39
Page 2
In addition, in accordance with Article 6 of the Agreement on Safeguards, the Czech Republic
should have proved the existence of critical circumstances, before adopting provisional safeguard
measures, which the Czech Republic has failed to do.
Considering that the consultations, under the Agreement on Safeguards, should be initiated
immediately after the measure has been taken, Poland formally requests holding of consultations
under Article 12.4 with the aim to review the information provided and obtain additional information
as necessary.
Poland requests the Czech Republic not to take any measures until consultations have taken
place.  It is proposed that consultations be held forthwith at a mutually agreed date and place.  Poland
reserves all its rights under the Agreement on Safeguards as well as under the Dispute SettlementUnderstanding.
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