RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/Q1/EGY/2
30 June 1999
(99-2711)
Committee on Safeguards Original:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLE 12.6 OF THE AGREEMENT
Replies to Questions Posed by the UNITED STATES1
Regarding the Notification of EGYPT2
The following communication, dated 15 June 1999, has been received from the Permanent
Mission of Egypt.
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Introduction
Under Egyptian Law, the WTO Agreements on Anti-Dumping, the Agreement on Subsidies
and Countervailing Measures and the Safeguard Agreement have been adopted in total and are a part
of domestic law in the country.  This is set out in Law No. 161/1998 and its executive regulations.
This has been advised to the WTO.  Under the Egyptian legal system, this law has primacy.  Basically
the said Law and its regulations set out the system of authorities of the persons and administrative
bodies in Egypt who are responsible for carrying out the country's multilateral trade responsibilities
for the three trade remedies Agreements.
These bodies still have to observe the requirements of Law 161/1998.  The replies given
below refer to the regulations issued under Ministerial Decree No. 549/1998, identified in the
notification as "Implementing Regulations of Egyptian Law No. 161".  It would have been possible to
repeat the exact WTO provision incorporated into Egyptian law in reply to the questions raised by
Members.  It must be remembered that this is the position in Egypt, but to help other Members, Egypthas given substantive replies to show that regulations have been framed to carry out the obligations it
has under the WTO Agreements covered by the law and regulations.
In 1994 after the WTO was agreed in Marrakesh, the WTO Agreements were incorporated
into Egyptian Law and are considered as a part of it.  The Ministerial Decree followed parliamentaryapproval of this course of action.  In Regulation 549/1998, Article 94 refers directly to the
Agreements, and states that the provisions of these shall be applied on matters which are not stated in
the regulation.  The regulation (and Law 161) do not repeat all the provisions of the Agreements as
this is unnecessary.  If any provision is not included or is unclear, then the WTO provision applies.
The Egyptian safeguard law refers to an “unjustifiable increase in imports” (Articles 1,
2, 79, and 82), “increased imports” (Article 81), and “imports” (Article 84).
                                                     
1 G/SG/Q1/EGY/1
2 G/SG/N/1/EGY/2G/SG/Q1/EGY/2
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Q1. How does Egypt intend to apply the “increased quantities” standard relating to imports
in Article 2.1 of the WTO Agreement on Safeguards (Safeguards Agreement)?
Reply
The standard is applied by Egypt as a matter of fact.  Before initiating the investigatory
process, the increase in importation of the goods has to be established as well as the evidence of the
effect.  During the inquiry all parties are invited to provide information including information on this
factor.
Q2. How does Egypt define “unjustifiable” a nd in what context will this term be used?
Reply
To be unjustifiable, as set out in the regulation, the imports would have to meet the
requirements of Article 2 of the Safeguards Agreement.  The product has to be imported "… in such
increased quantities, absolute or relative to domestic production and under such conditions as to causeor threaten to cause serious injury to the domestic  industry …".  This requirement is in the Egyptian
Law.  To be "unjustifiable", the imports would have to meet these criteria.  This complies with the
requirements of the Agreement on Safeguards.
Q3. Will the safeguard remedy imposed under Article 84 of the Egyptian law address serious
injury caused by “imports” or serious injury caused by “ increased  imports” (emphasis added)?
Reply
Article 79 states safeguard measures are those applied against "unjustifiable increase of
imports … as to cause … serious injury to the domestic industry".  So the measure has to ensure that
the increase in imports is addressed.  The remedy addresses the serious injury caused by the increase
in imports.  This is in accordance with the requirements of the WTO Agreement on Safeguards.  The
increase is examined in absolute terms, in relati ve terms, and in terms of the rate of increase.
Article 84.1 of the Egyptian law provides for safeguard measures “to the extent
necessary to prevent or remedy serious injury caused to the domestic industry.”  Article 5.1 of
the Safeguards Agreement, on the other hand, states that a WTO Member shall apply safeguard
measures “ only to the extent necessary to p revent or remedy serious injury and to facilitate
adjustment ” (emphasis added).  Thus, Egyptian law on its face appears to allow the Egyptian
Government to apply a measure of any magnitude, so long as it is of sufficient magnitude to
prevent or remedy serious injury.  In addition , Egyptian law does not address the issue of
industry adjustment.
Q4. How does Egypt plan to address the limi tation embodied in the term “only,” and how
does Egypt plan to address the industry adjustment requirement?
Reply
In respect to the facilitation of adjustment to an industry, this matter is covered in Article 94.
As an administrative procedure, the Egyptian auth ority conducting the inquiry specifically seeks from
the industry and the other parties submissions and information on the industry adjustment programme.
In the Notes for the Hearings prepared for any case it is stated that:
"This hearing concerns the application by the Egyptian Industry to have safeguard
measures imposed … .  What is of direct relevance is the time of adjustment of theG/SG/Q1/EGY/2
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local industry.  Egypt regards these measur es as providing a breathing space for the
industry to adjust to international competition."
In the Notice of the Inquiry for a case, the following item is listed as one on which the
Egyptian authority seeks information from the parties:  "On the form and content of an industry
adjustment programme".
The regulation and practices in Egypt are in accordance with the WTO safeguard
requirements by obtaining details of the industry  adjustment programme of the industry and seeking
comment on it from other parties and then addressing this issue on a case-by-case basis when
measures are being considered.
It is at the stage that Egypt considers the term "only to the extent necessary to prevent or
remedy injury" and relates it in tandem to the re quirement for industry to adjust.  The serious injury
test has to be met, but in applying measures may not be the determining factor, especially when the
programme of the proposed measures over the duration of their application is considered.  It is Egypt's
view that the measures are pointless and counterproductive unless the industry uses the period of the
measures to make adjustments to meet internationa l competition.  Accordingly it also has a follow-up
programme to review the industry which carries out the adjustments over the period.  The measures
are decided to encourage progress by the industry to achieve this.
Article 84.2 of the Egyptian law provides that  if a safeguard measure in the form of a
quantitative restriction is used, “the determined quantities for each country shall not be lessthan the average volume of imports for the most recent three years or any period the
investigating authorities may consider necessary  to remove the injury provided that it is
justified.”  Article 5.1 of the Safeguards Agre ement, on the other hand, states that “If a
quantitative restriction is used, such a measure shall not reduce the quantity of imports below
the level of a recent period which shall be the average of imports in the last three representative
years for which statistics are available, unless clear justification  is given that a different level is
necessary to prevent or remedy serious injury.”  Article 5.2(a) addresses the issue of country
allocations.
Q5. Explain how the provision in  Egyptian law relating to the overall “quantity of imports”
is consistent with Article 5.1 of the Safeguards Agreement.
Reply
The restriction in the WTO Safeguards Agreement Article 5.1 referring to prevention or
remedy of serious injury "only" is addressed on a case-by-case basis.  The quantum of injury depends
upon the factors involved, as set out in the WTO Safeguards Agreement Article 4.2 and the nature ofthe evidence, i.e. whether it is objective and quantifiable.  The requirement in Article 84 of the
regulation mirrors the WTO requirements set out in Article 5.1 of the Agreement.  Article 84.2 sets
out the same requirement on any reduction during the most recent three years provided there is no
justification to set a different level to prevent or reduce serious injury.  Please note that the provisions
of Article 94 will also be applicable in these circumstances.  The Egyptian requirements accord withthe WTO rules.G/SG/Q1/EGY/2
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Q6. How does Egypt plan to address the “repre sentative” years requirement in Article 5.1 of
the Safeguards Agreement?
Reply
A "representative" year is first a reference to the availability of import data.  Hence the
additional notation "for which statistics are available" in the WTO Agreement.  Representative years
would be considered where the facts showed that factors other than increased imports have had an
impact on the imports.  The Agreement gives options on the period over which the imports are
considered when quantitative restrictions are contemplated.  The grounds for the use of the options are
not clear in the Agreement, but factors such as  industry breakdown or own imports by an industry
could impact on the volume of imports.  Article 4.2(b) does not appear to acknowledge that the otherfactors can impact on increased imports.  The inquiry is addressing recent growth in imports, and
Egypt understands that the intent of the Agreement is to balance the quota allocation to achieve wider
industry objectives.  See Article 84.
Q7. If Egypt departs from the general rule that the quota allow in at least that quantity
imported during the most recent three representativ e years, on what basis consistent with the
Article 5.1 “clear justification” requirement will Egypt do so?
Reply
The decision would be taken on the basis that the preferred method does not prevent or
remedy serious injury.  This is the same requirement as set out in Article 5.1 of the WTO Agreement.
See Articles 84.1 and 84.2.  Article 84 lists the factors which must be taken into consideration, but is
not an exclusive list.  Other factors may also be taken into account.  For example, the imposition of
measures is not compulsory, and the Minister has the discretion to apply measures or not.  SeeArticle 85.  Such issues are taken into account in the Regulation and the discretion of the Minister is
in accordance with Article 2.1 of the Safeguards Agreement where "A Member may apply a safeguard
measure …".
Q8. Explain how the quota allocation in Articl e 84.3 of the Egyptian law is consistent with
Article 5.2(b) of the Safeguards Agreement.
Reply
Egypt, under Article 84.3 has the flexibility to seek the agreement of all other exporting
members which would be affected by the measure to the allocation of shares of any quotas.  The
Regulation rule includes the phrase "… unless justified reasons for not applying this rule areprovided".  The justification relates to the Members with a substantial trade interest.  Substantial trade
interest would be established on the facts but would not include those without a history of a
significant source of supply over the period.  Depending upon circumstances, the trade history of a
Member may not necessarily be continuous.  The Regulation is in accordance with the WTO
requirements in Article 5.1 of the Agreement.
Q9. Does Egypt intend to make the determination required by Article 7.2 of the WTO
Safeguards Agreement before extending a safeguard measure?
Reply
Egypt's Regulation requires a review before application of any further measures.  Refer to
Articles 79, 81 and 84.  The imposition of measures includes the period of the measures.  No newG/SG/Q1/EGY/2
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measure can be imposed under the Regulation without observing the requirements of the Regulation
on the imposition of measures.
Q10. Will Egypt “progressively liberalize” safeguard measures of more than one year
duration at regular intervals, and conduct mid-term reviews of measures exceeding three yearsduration, as required by Article 7.4 of the Safeguards Agreement?
Reply
Yes, Egypt has a system of reviewing the operation of the safeguard measures, will
progressively liberalize measures, and this is set out in the instrument setting final measures, and
would conduct a review of measures of over three year s' duration.  As stated above, it is Egypt's view
that safeguard measures give the industry time to adjust to international competition, and without this
adjustment, imposition of measures will be counterproductive.  It therefore has an on-going interest in
monitoring industry performance of its plans of adjustment.  This is notified to the industry.
Q11. Has Egypt promulgated any regulations governing the conduct of safeguard
investigations, and have they been notified to the Safeguards Committee?  If not, does Egypt
intend to promulgate regulations, and will they be notified?
Reply
No.  The legal system in Egypt would not re quire the promulgation of further regulations.
The system that has been described in the question is one followed under the British (or American)
system of law making.  The Egyptian system differs but has similar effects in practice.  The
Regulations give the investigating authority the responsibility of implementing the law, and the  WTO
Agreements on Safeguards, Dumping and Subsidy and Countervailing Measures must be applied bythe authority.  Articles 2 and 94 refer, together with the last paragraph in the introduction.  The
manner in which inquiries are conducted is covered by administrative action and is advised to the
known parties in any safeguard case.
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