   
  
G/SG/N/8/MDG/3  
G/SG/N/10/MDG/3  
G/SG/N/11/MDG/3/Suppl.2  
 
1 July  2019 
(19-4378) Page: 1/8 
Committee on Safeguards  Original: French  
 
  
NOTIFICATION UNDER ARTICLE  12.1(B)  OF THE AGREEMENT ON  
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT  
THEREOF CAUSED BY INCREASED IMPORTS  
NOTIFICATION UNDER ARTICLE  12.1(C)  
OF THE AGREEMENT ON SAFEGUARDS  
(NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE)  
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE  2, 
OF THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
(Detergent Powder)  
The following communication, dated 25 June 2019, is being circulated at the request of the 
delegation of Madagascar.  
 
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On 31 December 2018, the National Trade Remedies Authority (ANMCC) published 
Notice  No. 009-ANMCC/Av.18 on the initiation of a safeguard investigation and the imposition of a 
provisional safeguard measure on detergent powder imported into Madagascar. The initiation of the 
investigation and the imposition of the provisional measure were notified to the WTO Committee on 
Safeguards in document G/SG/N/6/MDG/3 of 7 January 2019.  
On 20 February 2019, the Committee on Safeguards was notified (in d ocument 
G/SG/N/7/MDG/3/Suppl.1) that the date of entry into force of the provisional measure had changed 
and would be the date of publication of the Interministerial Order on the procedures for collecting 
additional duties in the context of  trade remedies.  
Consistent with Article 12.3 of the Agreement on Safeguards, Madagascar is prepared to consult 
with those Members having a substantial interest as exporters of the product concerned.  
  G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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  1  NOTIFICATION UNDER A RTICLE 12.1(B) AND ( C)  
1.1  Provide evidence of serious injury or threat thereof caused by increased imports  
SERIOUS INJURY  
To establish serious injury to the domestic industry producing a product like or directly competitive 
with the  investigated product, an evaluation of all relevant factors of an objective and quantifiable 
nature having a bearing on the situation of that industry has been undertaken . 
For reasons of confidentiality, the data are presented in the form of an index , with 20 13 taken as  
the reference year . 
i. Rate of increase in imports  
Throughout the investigation period, detergent powder imports increased in such a way  that the 
domestic industry had no respite . There was a continuous and significant increase  over the period , 
amounting to  650 points in absolute terms and 1,277 points relative to domestic production . This 
means that imports rose at the expense of domestic production, taking a larger share of the market 
each year . 
ii. Share of domestic market taken by imports  
 2013  2014  2015  2016  2017  2018  
Market share of the domestic industry  
(index base 100 in 2013)  100 28 29 15 10 9 
Market share of imports  
(index base 100 in 2013)  100 110 109 111 112 112 
Source : Data prepared from General Customs Directorate  statistics and domestic industry data verified by the 
ANMCC . 
The domestic detergent pow der industry has seen its market share dwindle  since 2013. In 2018, 
imports took almost all market share, as shown in the table above . 
Starting from an already min iscule  market share in 2013,  the domestic industry saw its share 
deteriorate each year. From 2013 to  2018, the market share of domestic producers declined 91 index 
points. The most dramatic decrease occurred in 2014, when it fell 72 index points . 2016 and 2017 
were also marked by large declines in the domestic industry 's market share . Conversely , the market 
share held by imports rose 12 index points from 2013 to 2018.  
iii. Domestic production  
 2013  2014  2015  2016  2017  2018  2018  
% change in domestic production  - -64% 44% -3% 20% -10% -10% 
Domestic production (index base 100 in 2013)  100 36 52 51 61 54 54 
Source:  Domestic industry data verified by the ANMCC . 
The data  appearing  in this table show that domestic production declined considerabl y during the 
period analysed . It fell 64% from 2013 to  2014. The domestic industry 's efforts to  recover resulted 
in increased production in 2015 and 2017, but it was still far from its 2013 level. With t he invasion 
of imports in 2016 , the efforts undertaken became  futile. Domestic production dipped again by 10% 
in 2018. In April 2017, owing to the imported products flooding the market , one of the two firms in 
the domestic industry was forced to cease its  detergent powder  operations . G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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  iv. Sales and inventory  
 2013  2014  2015  2016  2017  2018  
Domestic industry sales  
(index base 100 in 2013)  100 41 47 59 62 57 
Total inventory  
(index base 100 in 2013)  100 16 206 18 57 16 
Source: Domestic industry data verified by the ANMCC . 
Domestic industry sales fell considerably from 2013 to 201 4, slipping 59 index points. Despite a 
slight improvement from 2015 to 2017, the situation deteriorated again in 2018. Annual sales 
volumes remained considerably below the 2013 level throughout the period analysed and lost 
43 index points overall . Moreover, there was a significant accumulation of inventory in 2015, 
coincid ing with a rise in consumption and domestic production th e same year . The increased 
domestic consumption of detergent powder did not , therefore, benefit the domestic industry but 
rather imports .  
v. Sales turnover  
 2013  2014  2015  2016  2017  2018  
Sales t urnover ( MGA) 
(index base 100 in 2013)  100 42 48 62 63 61 
Source : Domestic industry data verified by the ANMCC . 
Like the trend in sales, the domestic industry's sales turnover deteriorated from 2013. It dropped 
39 index points from 2013 to 2018. The worst decline came  in 2014, when it fell 58 index points. 
Despite a slight improvement in 2016, sales turnover  stagnated in 2017 and resumed its downward 
trend in 2018, its value stay ing significantly below its 2013 level during the entire period analysed.  
vi. Employment and productivity  
 
2013  2014  2015  2016  2017  2018  
Domestic industry jobs  
(index base 100 in 2013)  100 75 50 71 46 33 
Productivity  
(index base 100 in 2013)  100 48 105 72 132 163 
Source:  Domestic industry data verified by the ANMCC . 
Employment in the domestic industry decreased 67 index points over the period  analysed . Despite 
the effort made by domestic producers in 2016, the difficulties that they encountered forced them 
to reduce the  size of the ir workforce  in 2015, 2017 and 2018. Although  productivity  improved 
63 index points from 2013 to 2018, the annual trend shows a sign ificant drop in productivity each 
year there was a more pronounced increase in imports , particularly 2014 and 2016.  
vii. Production capacity utilization  
 
2013  2014  2015  2016  2017  2018  
Production capacity 
utilization rate  
(base 100 in 2013)  100 36 52 51 61 54 
Source:  Domestic industry data verified by the ANMCC . 
From 2014, the domestic industry was unable to use even a quarter of its production capacity. While 
its production capacity utilization rate in respect of  detergent powder was already low  in 2013, it 
fell 64 index points  in 2014. Despite a slight improvement in 2015 and 2017, the rate was far from 
its 2013 level. On top of this, there were declines in 2016 and, particularly , in 2018. In sum, the 
production capacity utilization rate deteriorated by 46 index points over the investigation period . G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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  viii. Costs, selling  price  and earnings  
 
2013  2014  2015  2016  2017  2018  
Average import price per 
unit (MGA/unit of  30g)*  91 75 79 70 66 66 
Average p roduction cost  
per unit  (index base 100 
in 2013)  100 110 109 115 123 140 
Average s elling price 
(index base 100 in 2013)  100 103 102 105 102 108 
Earnings  (loss) (index 
base 1 00 in 2013) 100 4 21 50 210 177 
Source:  Data prepared from General Customs Directorate statistics and domestic industry data verified by the 
ANMCC . 
The average import price per unit of  detergent powder decline d continuously  over the period 
analysed  and was MGA 25 lower in 2018 than in 2013. To remain competitive on the ma rket, 
domestic producers have to align their selling prices with those of imports, despite the increase s in 
production costs . The largest decreases in the price of imported detergent powder occurred  in 2014 
and 2016.  
The production costs of domestically ma nufactured products  increased 40 index points from 2013 to 
2018, while domestic producers ' selling prices increased only 8 index points over the same period . 
The d omestic industry was forced  to maintain or decrease its prices because the price s of imported 
products w ere too low. Because  prices were blocked in this way, domestic producers incurred losses 
year after year . It should be stressed that the selling prices of domestically manufacture d products 
declined in the same years (2015 and 2017) that the domestic industry succeeded in  increas ing its 
sales. This co incidence once again confirms both that consumers are much more influenced by price 
than by quality and  that prices are blocked , to the detriment of  domestic producers . 
CAUSAL LINK  
In order to examine the existence of a causal link between the increase d imports and the serious 
injury, and in order to ensure that serious injury caused by other factors is not attributed to the 
increase d imports, the effects of the following factors were analysed : 
i. Analysis of causation  factors  
a. Effect of increase d imports  
There has been a continuous, substantial, sharp  and recent increase in i mports of detergent powder 
to Madagascar. By 2014, imports had already increased by half from 2013.  The most significant rise 
came in 2016 when imports surpassed the threshold of 10,000 tonnes. This situation led to imports 
taking a larger and larger share  of the market . They occupied almost the entire market in 2018.  
Domestic industry indicators, on the other hand, experienced a significant, generalized deterioration 
during the investigation period, particularly in 2014, 2016 and 2018.  
According to the 201 5 and 2017 annual reports of the Central Bank of Madagascar, the rate of 
inflation accelerated year by year during the period analysed, which explains the increase in domestic 
producers ' production costs.  However, data from the General Customs Directorate shows a decrease 
in the price of imported detergent powder over this period. Th is was an abnormal situation , as the 
depreciation of the domestic currency ( MGA) should have resulted in  higher  import prices. This 
indicates that it is importers who impos e their prices on the domestic market , forcing domestic 
producers to align their prices with the imports in order  to make sales . G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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2013  2014  2015  2016  2017  2018  
Average production cost per unit 
(index base 100 in 2013)  100 110 109 115 123 140 
Average import price per unit 
(MGA/unit of 30g)  91 75 79 70 66 66 
Consumer price index, year on 
year (CPI as %)  5.8 6.1 7.6 6 9 - 
Source:  Data prepared from General Customs Directorate  statistics , domestic industry data verified by the 
ANMCC and the 2015 and 2017 annual reports of the Central Bank of Madagascar . 
The pressure exerted by imports led to a deterioration in domestic industry performa nce indicators, 
including decreases in production volume, market share, sales, sales turnover, employment, 
productivity and production capacity utilization . Financial losses were incurred year after year and 
led one of the companies in the industry to halt detergent powder production . 
In light of the above analysis, it is concluded that imports rose at the expense of domestic 
production. The increase in imports and the deterioration in the economic indicators of the domestic 
industry  coincide d throughout  the entire investigation period . 
b. Coincid ing trends  
It is important to highlight that the increase in imports and the deterioration in domestic industry 
indicators  coincided to an increasing degree  from 2013. This was true in 2014 when, at the same 
time that detergent powder imports were rising  considerably, all domestic industry performance 
indicators declined significantly, including market share, production volume, sales, sales turnover, 
employment, productivity, production capacity utilization and so on . A similar situation was also 
observed in 2016 and 2018 although  the indicators were stable in 2017.  
It should be noted that the biggest declines in the price of detergent powder imports were recorded 
in 2014 and 2016, when the deterioration in domestic ind ustry indicators was the most significant . 
Lastly, there was a significant accumulation of inventory in 2015, coinciding with an increase in 
consumption and domestic production that same year . 
This coincidence in time is a key factor and attests to the existence of a causal link between the 
increase in imports and the serious injury to the domestic detergent powder industry.   
ii. Effect of other factors that could cause  injury  
a. Contraction in demand or change in the pattern of consumption  
 2013  2014  2015  2016  2017  2018  
Domestic industry sales (index base 100 in 2013)  100 41 47 59 62 57 
Domestic consumption*  (index base 100 in 2013)  100 146 160 409 609 669 
Source:  Data prepared from General Customs Directorate statistics and domestic industry data verified by the 
ANMCC . 
* Domestic consumption  = Imports + Domestic industry sales . 
The deterioration in domestic industry sales was not due to a decline in domestic demand . Rather,  
the domestic indu stry's customers  were being turned  towards imports . During  the period analysed , 
domestic consumption and imports of detergent powder increased steadily. Sales declined in 2014 
without the cause being a decrease in consumption . The following years, although sales improved 
slightly, the ir rate of increase was slower than that of domestic consumption . The decline in domestic 
industry sales is due not to a contraction in domestic demand but to the choices of the domestic 
industry's  customers  being direc ted towards imports , choices that are significantly influenced by 
price. G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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  iii. Competition between domestic producers  
The two applicant companies constituting  the domestic industry are the only detergent powder 
producers in Madagascar. Their production is significantly lower than domestic demand , each 
company 's performance indicators declined without those of the other improving , and after one of 
them halted production in April 2017, the injury to the remaining  domestic company continued  and 
even worsened . It can thus be concluded that competition between domestic producers cannot be a 
factor in the injury to the domestic industry.  
iv. Technolog y used  
The verificati on of the domestic companies' production processes revealed that they had  technology 
that was in line with international standards for the production of  detergent powder and with the 
relevant domestic technical regulations. Moreover , the quality of domestically manufactured 
detergent powder was confirmed by domestic  firms and consumer protection groups . Furthermore , 
new product lines have been developed a nd placed on the domestic market in recent years. 
Consequently, the technology used by the domestic industry does not play a part in the serious 
injury it faces . 
Conclusion on causation  
After considering  all relevant factors, it was concluded that there is  a substantial causal link between 
the increase d imports and the serious injury to the domestic detergent powder industry in 
Madagascar . 
1.2  Provide information on whether there is an absolute increase in imports or an 
increase in imports relative to domestic production  
The existence of an increase in imports  in absolute and relative terms  is demonstrated  below . 
i. Unforeseen developments  
The inc rease in environmental measures , including  awareness -raising, standards, regulations and 
so on , on detergent powder in developed countries, particularly the European Union, constitutes an 
unforeseen development under A rticle XIX of the General Agreement on  Tariffs and Trade (GATT). 
It has led to a contraction in demand and imports in those countries and has favour ed an increase 
in detergent powder imports to Madagascar . 
ii. Absolute i ncrease in imports  
 2013  2014  2015  2016  2017  2018  
Imports (kg)  1,823,324  2,907,832  3,184,523  8,293,444  12,425,898  13,674,783  
Change in imports (%)  - 59 10 160 50 10 
Imports (index base 100 in 2013)  100 159 175 455 681 750 
Source:  Data prepared from General Customs Directorate statistics . 
There was a significant, sudden, sharp and recent increase in d etergent powder imports to 
Madagascar, w hich rose  650 index points  from 2013 to 2018 . In 2014 and in 2017, imports increased 
by up to half the preceding year 's level. 2016 marked a turning point in the trend because  the 
increases changed scale and grew increasingly large . G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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  iii. Increase in imports relative to domestic production  
 2013  2014  2015  2016  2017  2018  
Imports (kg)  1,823,324  2,907,832  3,184,523  8,293,444  12,425,898  13,674,783  
Domestic production (kg) 
(index base 100 in 2013)  100 36 52 51 61 54 
Change in imports/domestic 
production (%)  - 339 -24 169 25 23 
Imports/Production (index 
base 100 in 2013)  100 439 333 897 1,123 1,377 
Source:  Data prepared from General Customs Directorate statistics and domestic industry data verified by the 
ANMCC . 
The increase in imports of detergent powder to M adagascar relative to domestic production was 
quite striking  during the investigation period . From 2013 to  2018, the ratio of imports to domestic 
production increased 1,277 index points. In 2014, it was 339% of its 2013 level. As with the absolute 
increase, the relative rise in imports was at its highest in 2016. It was no less considerable  during  
the last two years . A recent, sudden, sharp and significant increase in imports of detergent powder 
to Madagascar can also be seen  in relative terms . 
iv. Adjustment plan  
The domestic industry prepared an adjustment plan  that is  based on improving its production policy, 
product quality and its marketing strategy . 
v. Provide a precise description of the product involved  
The product involved is detergent powder for household or industrial use based on organic 
surface -active ag ents intended for washing preparations, auxiliary washing preparations and 
cleaning preparations, whether or not put up for retail sale , classified under tariff line 34022000 . 
vi. Provide a precise description of the proposed measure  
The proposed  definitive safeguard measure consists of an additional specific duty on top of the 
customs duty of MGA 1,000 per kg (equal to MGA 30 per 30 -gram packet) of detergent powder 
imported under HS code 34022000 for a period of four (4) years . 
vii. Provide proposed d ate of introduction of the measure  
The definitive safeguard measure will enter into force on the date of publication of the related notice.  
viii. Provide expected duration of the measure  
The definitive safeguard measure will remain in force for a period of four years, including the period 
of application of the provisional measure.  
ix. 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 dat e for the review has already been scheduled  
Not applicable  
x. If the expected duration is over one year, provide expected timetable for 
progressive liberalization of the measure  
The timetable for liberalization is as follows:  
Period of application of 
the safe guard measure  3 June to 
31 December 2019  2020  2021  2022  1 January to 
2 June 2023  
Amount  of safeguard 
measure  MGA 1,000/kg  MGA 
950/kg  MGA 
900/kg  MGA 
850/kg  MGA 800/kg  G/SG/N/8/MDG/3 • G/SG/N/10/MDG/3 • G/SG/N/11/MDG/3/Suppl.2  
 
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  xi. Date of prior consultation with those Members having a substantial interest 
as exporters  of goods  
Members having a substantial interest as exporters of the investigated product and wishing to 
consult  with Madagascar under A rticle 12.3 of the Agreement on Safeguards may send a request to 
the Director General of the ANMCC at the follow ing email address : dg.anmcc@gmail.com / 
dg@anmcc.gov.mg . 
The consultations will take place no later than 5 July 2019 . 
2  NOTIFICATION UNDER  ARTICLE 9, FOOTNOTE  2  
2.1  Specify the measure  
The definitive safeguard measure consists  of an additional specific duty on top of the customs duty 
of MGA 1,000 per kg (equal to MGA 30 per 30 -gram packet) of detergent powder imported under 
HS code 34022000 for a period of four (4) years . 
2.2  Specify the product subject to the measure  
The product concerned is detergent powder for household or industrial use based on organic 
surface -active agents intended for washing preparations, auxiliary washing prepar ations and 
cleaning preparations, whether or not put up for retail sale , classified  under tariff line 34022000.  
2.3  Specify the developing countries to which the measure is not applied under Article  9.1 
of the Agreement on Safeguards, and the import shares of these countries individually 
and collectively  
The list of countries excluded from the definitive safeguard measure is as follows : 
Afghanistan; Albania; Angola; Antigua and Barbuda; Argentina; Armenia; Bahrain; Bangladesh 
Barbados; Belize; Benin; Bolivia, Plurinational State of; Botswana; Brazil; Brunei  Darussalam; 
Burkina  Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Central African Republic; Chad; Chile; 
Colombia; Congo; Costa Rica; Côte d'Ivoire; Cuba; Democratic Republic of the Congo; Djibouti ; 
Dominica; Dominican Republic; Ecuador; Egypt; El Salvador; Eswatini; Fiji; Gabon; The Gambia; 
Georgia; Ghana; Grenada; Guatemala; Guinea; Guinea -Bissau; Guyana; Haiti; Honduras; India; 
Israel; Jamaica; Jordan; Kazakhstan; Kenya; Kuwait; Kyrgyz Republic; Lao People's 
Democratic  Republic; Lesotho; Liberia; Malawi; Malaysia; Maldives; Mali; Marshall  Islands; 
Mauritania; Mauritius; Mexico; Moldova; Mongolia; Montenegro; Morocco; Mozambique; Myanmar; 
Namibia; Nepal; Nicaragua; Niger; Oman; Pakistan; Panama; Pa pua New Guinea; Paraguay; Peru; 
Philippines; Qatar; Rwanda; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; 
Samoa; Saudi Arabia; Senegal; Seychelles; Sierra Leone; Solomon Islands; South Africa; Sri  Lanka; 
Suriname; Tajikistan; Tanzan ia; Thailand; The former Yugoslav Republic of Macedonia; Togo; 
Tonga; Trinidad and Tobago; Tunisia; Turkey; Uganda; Ukraine; United Arab Emirates; Uruguay; 
Vanuatu; Venezuela, Bolivarian Republic of; Viet Nam; Yemen; Zambia; Zimbabwe.  
2.4  Further information  
Information on the decision to apply the definitive safeguard measure to the products concerned 
may be obtained from:  
Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex conquête Antanimena - BP: 7653  
Tel.: +261 34 05 441 41  
Website: www.anmcc.gov.mg  
Email: dg.anmcc@gmail.com  ; dg@anmcc.gov.mg  
101 – ANTANANARIVO – MADAGASCAR  
 
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