WORLD TRADE
ORGANIZATIONG/SG/N/8/ARG/3
G/SG/N/10/ARG/2
G/SG/N/11/ARG/2
22 June 2001
(01-3121)
Committee on Safeguards Original:  Spanish
NOTIFICACTION UNDER ARTICLE 12.1(b) OF THE
AGREEMENT ON SAFEGUARDS ON FINDING
A SERIOUS INJURY OR THREAT THEREOF
CAUSED BY INCREASED IMPORTS
NOTIFICATIONS PURSUANT TO ARTICLE 12.1(c) AND ARTICLE 9,
FOOTNOTE 2, OF THE AGREEMENT ON SAFEGUARDS
ARGENTINA
The following communication, dated 18 June 2001, has been received from the Permanent
Mission of Argentina.
_______________
Within the framework of the safeguard investigation on imports of mopeds and motorcycles
of up to 100 cc cylinder capacity, excluding quadricycles and so-called all-terrain vehicles, the
Republic of Argentina hereby presents the following notification to the Committee on Safeguards
under Articles 12.1(b) and 12.1(c) and Article 9, footnote 2, of the Agreement on Safeguards.
Argentina would be most grateful if WTO Members having a substantial interest as exporters
of the product under investigation could be invited to hold the consultations provided for in
Article 12.3 of the Agreement on Safeguards.G/SG/N/8/ARG/3
G/SG/N/10/ARG/2
G/SG/N/11/ARG/2
Page 2
Notifications Under Article 12.1(b) and (c)
Notification to the Committee on Safeguards upon making a finding of serious injury or threat thereof
caused by increased imports; notification upon taking a decision to apply or extend a safeguard
measure
The investigation was initiated pursuant to a request by the domestic manufacturer
ZANELLA HNOS. S.A.C.I.F.I., as notified in document G/SG/N/6/ARG/3 of 21 September 2000 andG/SG/N/6/ARG /3/Suppl.1 of 15 September 2000.
The evidence gathered by the implementing auth ority for this investigation is set out below.
1. Evidence of serious injury or threat  thereof caused by increased exports
• The domestic industry showed a decreasing trend throughout the entire period under review,
with the exception of 1997 and the first quarter of the year 2000. A total of 50,309 units were
recorded in 1995, and the figures were lower throughout the rest of the period, with the
exception of an increase in 1997. The decline became significant in 1998 and even more so as
of 1999 when only 29,446 units were recorded.  The first quarter of 2000 saw a slight growthin relation to the same period the previous year, but since this turnaround only concerns a
single quarter in relation to figures that are well below the historical levels for the period
investigated, the implementing authority considers that it does not constitute a reversal of the
negative production trend.
• Taken as a whole, sales of the domestic companies which make up the industry experienced
an unremitting decline from 1997 onwards.  The number of units recorded decreased from44,017 that year to 29,165 in 1999, a fall of 33.8 per cent.  Although there was a slight growth
in sales in the first quarter of 2000, as in the case of production, when taken in the context of
the downward trend of the previous years, th is does not mean that the tide is turning.
Inventories have followed a similar pattern.
• The simple average sale price of the models representative of the companies surveyed fell
7 per cent in 1998 and 9 per cent in 1999, remaining unchanged in the first quarter of 2000.
• Exports have declined constantly throughout the period under review, with the exception of
the first quarter of the year 2000.
• Throughout the period there was a steady fall in the number of persons employed.  Of
particular note were 1998 and 1999 when the three companies together (ZANELLA, JUKIand ROMPAL) showed employment levels lowe r than those of ZANELLA in 1995 and 1996.
This trend is reflected in the figures for both total employment and employment in production.
Employment of production workers showed a very marked decline in 1999 and even in the
first quarter of 2000.  The wage bill paralleled the variations in employment levels throughout
the entire period. The most significant reductions are revealed by comparing the first quarter
of 1999 with the same period in 2000, when both employment and the wage bill for theproduction sector declined by about 45 per cent.
• Utilization of installed capacity, which stood at 26 per cent in 1997, declined steadily over the
rest of the period, reaching 15 per cent in 1999 and 14 per cent in 2000.G/SG/N/8/ARG/3
G/SG/N/10/ARG/2
G/SG/N/11/ARG/2
Page 3
• The production capacity of ZANELLA HNOS. Y CIA. S.A.C.I.F.I. and JUKI S.A.C.I.F.I.A.
remained constant throughout the period at 176,108 units, declining by 19 per cent in the first
quarter of 2000 as a result of the loss of capacity of ZANELLA HNOS. Y CIA. S.A.C.I.F.I.
• Regarding the financial statements, according to  the information received from the two firms
the like product accounted for 100 per cent of ZANELLA HNOS. Y CIA.'s sales, and
between 15 and 35 per cent of JUKI S.A.C.I.F.A.'s sales.
• ZANELLA HNOS. Y CIA. S.A.C.I.F.I. suffered a sharp drop in net equity as a result of net
losses throughout the period.  The situation changed in the year 2000 with a capital decrease
and an increase in retained earnings.  The company experienced a slackening off in general
sales, increasing indebtedness and, at the close of the period, in 2000, a short-term debt ratio
of over 50 per cent and low liquidity.  At the same time, net equity is declining and the
company presented both net losses and operating losses throughout much of the period.
• The general sales of JUKI S.A.C.I.F.I.A. declined towards the end of the period, as did
liabilities, while net equity remained relativ ely stable.  The company sustained operating
losses throughout most of the period, while its net result showed a slight profit.  The short-term debt ratio was over 40 per cent towards the end of the period.
2. Information on whether there is an absolu te increase in exports or an increase in
imports relative to domestic production (see also Article 12.1 for the context)
• Imports have recently experienced an upward trend, both in absolute terms and in relation to
apparent domestic consumption and domestic production.  The high levels of imports in 1999rose yet further in absolute terms in the first quarter of 2000;  in relative terms, imports have
grown steadily since 1996, when they represented 53 per cent of apparent consumption, and
reached 65 per cent in 1999 and 70 per cent in the first quarter of 2000.  Although 1999
imports were down in absolute value on those of 1997 and 1998 (years of strong expansion indomestic demand), the same cannot be said for the market or industry as a whole since, even
in those years, imports enjoyed strong growth in relative terms, climbing from 53 per cent of
apparent domestic consumption in 1996 to 57 per cent in 1997 and 63 per cent in 1998.
Likewise, imports stood at 94 per cent of domestic production in 1996, jumping to 116 per
cent in 1997, 161 per cent in 1998 and 194 per cent in 1999, and reaching a peak in the firstquarter of 2000 at 202 per cent.
• Imports from non-MERCOSUR countries have increased significantly in absolute terms.
Their growth has been even greater when compared to the domestic industry and/or size of thedomestic market. The price terms of imported products have been compatible with market
growth.
• Domestic products suffered the same downward trend in average f.o.b. prices as the imports
under investigation.  Domestic products in subset A declined from an average of Arg$ 1,131
in 1995 to Arg$ 833 in the first quarter of 2000, while those in subset B declined from
Arg$ 1,166 to Arg$ 996 over the same period.  Prices for subset A climbed from a minimum
of Arg$ 772 in 1998 to Arg$ 833 in the first quarter of 2000 and prices for subset B rose fromArg$ 974 to Arg$ 996 in the same period.  Thus , the minimum price of imports of the product
under investigation, which peaked in 1996 at US$ 731, declined steadily reaching US$ 689 in
1999 and US$ 605 in 2000.  Average sales receipts for like or directly competitive productsG/SG/N/8/ARG/3
G/SG/N/10/ARG/2
G/SG/N/11/ARG/2
Page 4
reached a peak in 1995 at Arg$ 1,133, but slipped back to Arg$ 844 in 1999 and Arg$ 858 in
the first quarter of 2000.
3. Description of the product involved
Mopeds and motorcycles of up to 100 cc cylinder capacity, excluding quadricycles and so-
called all-terrain vehicles, by which is meant trial, endurance and motorcross vehicles.
These products are under MERCOSUR tariff headings 8711.10.00 and 8711.20.10.
4. Description of the proposed measure
The definite safeguard measure takes the form of minimum specific duties on imports of
mopeds and motorcycles of up to one hundred cubic centimetres (100 cm3) cylinder capacity,
excluding quadricycles and so-called all-terrain vehicles, by which is meant trial, endurance andmotorcross vehicles which come under MERCOSUR tariff headings 8711.10.00 and 8711.20.10 for a
period of three (3) years, as illustrated in the following table.
CYLINDER
CAPACITYSAFEGUARD
MEASURE
US$/Unit
From 22 June 2001
to 21 June 2002
Less than or equal to 50cc 314
Greater than or equal to
51 cc and less than orequal to 55 cc314
Greater than or equal to
56 cc and less than or
equal to 75 cc297
Greater than or equal to
76 cc and less than or
equal to 100 cc444
5. Proposed date of introduction of the measure
The proposed date of introduction of the measure is 22 June 2001.
6. Expected duration of the measure
The expected duration of the measure is three (3) years.
7. For a measure with a duration of more than three years, provide the proposed date for
the review to be held not later than the mid-term of the measure.
Not applicable.G/SG/N/8/ARG/3
G/SG/N/10/ARG/2
G/SG/N/11/ARG/2
Page 5
8. If the expected duration is over one year , provide the expected timetable for the
progressive liberalization of the measure.
CYLINDER
CAPACITYSAFEGUARD
MEASURE
US$/Unit
From 22 June 2001
to 21 June 2002LIBERALIZATION
TIMETABLE
US$/Unit
   From 22 June 2002           From 22 June 2003
      to 21 June 2003                to 21 June 2004
Less than or equal to50 cc 314 251 219
Greater than or equal to51 cc and less than or
equal to 55 cc314 251 219
Greater than or equal to
56 cc and less than or
equal to 75 cc297 238 208
Greater than or equal to
76 cc and less than orequal to 100 cc444 355 311
20 per cent liberalization for the period 22 June 2002 to 21 June 2003 and 30 per cent for the
period 22 June 2003 to 21 June 2004, the percentages being calculated in relation to the base year.
9. Information to be provided in the event of the duration of the measure having to be
extended
Not applicable.G/SG/N/8/ARG/3
G/SG/N/10/ARG/2
G/SG/N/11/ARG/2
Page 6
Notifications Under Article 9, Footnote 2
Notification to the Committee on Safeguards of non-application of a safeguard measure to developing
countries under Article 9.1 of the Agreement on Safeguards
1. Description of the measure
CYLINDER
CAPACITYSAFEGUARD
MEASURE
US$/Unit
From 22 June 2001
to 21 June 2002LIBERALIZATION
TIMETABLE
US$/Unit
   From 22 June 2002           From 22 June 2003
      to 21 June 2003                to 21 June 2004
Less than or equal to50 cc 314 251 219
Greater than or equal to
51 cc and less than orequal to 55 cc314 251 219
Greater than or equal to
56 cc and less than or
equal to 75 cc297 238 208
Greater than or equal to
76 cc and less than or
equal to 100 cc444 355 311
2. Product subject to the measure
Mopeds and motorcycles of up to 100 cc cylinder capacity, excluding quadricycles and so-
called all-terrain vehicles, by which is meant trial, endurance and motorcross vehicles.
These products are under MERCOSUR tariff headings 8711.10.00 and 8711.20.10.
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