   
  
G/SG /N/6/MDG/5  
G/SG/N/7/MDG/5  
G/SG/N/11/MDG/5  
 
28 August 2019  
(19-5534) Page: 1/6 
Committee on Safeguards  Original: French  
 
  
NOTIFICATION UNDER ARTICLE 12.1(A ) OF THE AGREEMENT O N 
SAFEGUARDS ON INITIA TION OF AN INVESTIGA TION  
AND THE REASONS FOR IT 
NOTIFICATION UNDER ARTICLE 12.4 O F THE AGREEMENT ON S AFEGUARDS  
BEFORE TAKING A PROV ISIONAL SAFEGUARD ME ASURE  
REFERRED TO IN ARTIC LE 6 
NOTIFICATION UNDER ARTICLE 9, FOO TNOTE 2,  
OF THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
(Soap) 
The following communication, dated 27 August  2019, is being circulated at the request of the 
delegation of Madagascar . 
 
_______________  
 
 
In accordance with Articles 12.1 (a) and 12.4 of the Agreement on Safeguards, Madagascar is 
notifying the Committee on Safeguards of the initiation of an investigation and before taking a 
provisional safeguard measure referred to in Article 6 of the Agreement , in respect of imports of 
soap. Madagascar also wishes to notify the Committee, under Article 9, footnote 2, of the Agreement, 
of its decision not to apply the proposed safeguard measure to imports from developing countr y 
Members of the WTO.  
 
A. NOTIFICATION  UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON SAFEGUARDS ON 
INITIATION OF AN INVESTIGATION AND THE REASONS FOR IT  
1. Date of initiation  
The investigation was initiated on 1 4 August 2019, the date on which the notice of initiation was 
published in two national newspapers authorized to receive legal notices . 
2. Product under consideration  
Soap classified under Madagascar customs tariff codes 34011110, 34011190, 34011911, 34011919, 
34011990, 34012010, 34 012090  and 34013000.  
3. Exporting countries  
The main countries exporting soap to Madagascar are Indon esia, Malaysia  and Pakistan.  
4. Reasons justifying the initiation of the investigatio n 
As a result of unforeseen developments , soap has been imported in such increased quantities that 
the increase has caused or threatens to cause serious injury to the domestic industry producing the 
product that is like or directly competitive with the product under investigation . G/SG/N/6/MDG/5 • G/SG/N/7/MDG/5 • G/SG/N/11/MDG/5  
 
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  5. Duration of the inve stigation  
The investigation will be conducted over a  period of 9 months  and may be extended , but will last no 
longer than  12 months . 
6. Further information  
Interested parties must make themselves known to the ANMCC, the investigating authority, within 
30 days  following  the initiation of the investigation . 
Replies to questionnaires, comments and any relevant information to be relayed to the ANMCC must 
be sent by 30 Septemb er 2019  at the latest . 
If information requested from interested parties in connection with  the investigation is not provided 
within the specified time -frame, decisions will be based on the best information available. This will 
also be the case if information is erroneous or incomplete.  
7. Public hearings  
The ANMCC may organize public hearings, either at the request of interested parties or ex officio , 
so as to enable interested parties to defend their interests . 
B. NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON SAFEGUARDS BEFORE 
TAKING A PROVISIONAL SAFE GUARD MEASURE REFERRED TO IN ARTICLE 6 
1. Specify the product subject to the proposed provisional safeguard measure  
Soap classified under Madagascar customs tariff codes 34011110, 34011190, 34011911, 34011919, 
34011990, 34012010, 34012090  and 34013000.  
2. Specif y the proposed provisional safeguard measure  
The provisional safeguard measure will take the form of an additional duty to the ad valorem  customs 
duty, charged at a rate of 3 4% (thirty -four per cent ) of the c.i.f. value . 
3. Specify the proposed date of introd uction of the proposed provisional safeguard 
measure  
The provisional safeguard measure will enter into force on 1 September 2019 . 
4. Specify the expected duration of the provisional safeguard measure  
The provisional safeguard measure will be applied for 200 days from the date of its entry into force . 
5. Provide the basis for : 
5.1 Making a preliminary determination, as provided for in Article 6 of the 
Agreement on Safeguards, that increased imports have caused or are 
threatening to cause serious injury . 
I. INCREASE IN IMPORT S 
I.1- Evolution of imports in absolute terms  
Year 2014  2015  2016  2017  2018  Jan-June 18 Jan-June 19 
Import s (tonne s) 10,191 16,630 22,263 25,729 27,131 15,386 17,520 
Evolution ( Index) 100 163 218 252 266 100 114 
The above table shows an increase of 166 index points in 2018 in relat ion to the base year (2014). 
For the first half of 2019, an increase of 14 index points was recorded vis-à-vis the first half of 2018. 
The volume of imports therefore more than doubled in 2018 in relati on to 2014 . G/SG/N/6/MDG/5 • G/SG/N/7/MDG/5 • G/SG/N/11/MDG/5  
 
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  I.2- Evolution of imports in relative terms  
Year 2014  2015  2016  2017  2018  
Imports/ Domestic production  (Index ) 100 190 280 314 421 
A very significant increase was recorded in respect of the ratio of imports to domestic production . 
The year 2018 saw an increase of 321 points on the base year . Each year of the investigation period 
shows a considerable increase, ranging from 90 points in 2015 to 214 points in 2017 . 
II. SERIOUS INJURY  
The ANMCC made a preliminary determination of serious injury to the domestic industry producing 
the like or directly competitive product after evaluating, on an objective and quantifiable basis, all 
relevant factors having a bearing on the situation of the domestic industry . 
i. Rate of increase in imports   
As indicated  above, imports of soap increased suddenly, recently , significantly and steadily  between 
2014 and 2018.  
ii. Production v olume  
Year 2014  2015  2016  2017  2018  
Production (Index) 100 86 78 80 63 
In general terms , the domestic industry's production volume decreased during the period under 
review . A drop of 14 index points was recorded in 201 5, while 2016 saw a reduction of 22 points in 
relation to 2014. In 2017, this decline slowed down, but production remained  20 points lower than 
the base index . Despite t his slight improvement , the situation took a catastrophic turn in 2018, when 
production fell by 37 index points . 
iii. Domestic market sales  
Year 2014  2015  2016  2017  2018  
Sales volume  (Index ) 100 88 75 82 66 
As shown in the  table above, domestic industries saw a very significant reduction in their sales 
volume during the four years under review. In 2015, their sales  volume fell by 12 index points. It 
subsequently experienced an even more damaging drop of 25 index points in 2 016. While the sales 
volume improved in 2017 in relation to 2016, it remained 18 points lower than in the base year. The 
sales situation in 2018 was, however , the most critical, with a drop of 34 index points in relation to 
2014. 
iv. Turnover  
Year 2014  2015  2016 2017  2018  
Turnover  (Index) 100 98 90 101 88 
Turnover fell by 12 index points during the period under review.  It dropped by two points in 2015 in 
relation to 2014, then by 9 points in 2016 in relation to 2015. It rose by 12 points in 2017 in relation 
to 2016, then fell by 13 points in 2018 in relation to 2017 . This most recent fall in turnover is the 
most significant to have occurred during the investigation period . 
v. Market sh are 
Year 2014  2015  2016  2017  2018  
Market share  (Index) 100 72 54 52 43 
The industry 's market share fell by 31 percentage points during the review period, i.e. a reduction 
in market share of 57 index points between 2014 and 2018 . G/SG/N/6/MDG/5 • G/SG/N/7/MDG/5 • G/SG/N/11/MDG/5  
 
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  vi. Profits and losses  
Year 2014  2015  2016  2017  2018  
Net results  (Index base 100 in 2015)  -28 100 139 211 101 
The industry's results showed a deficit in 2014 and a surplus  for the rest of the years in the period  
under review. The domestic industry's results rose steadily from 2014 to 2017, but experienced a 
sharp and significant decline in 2018 .  
vii. Emplo yment   
Year 2014  2015  2016  2017  2018  
Workforce  (Index)  100 90 90 92 86 
Employment in the domestic industry contracted during the review period, with a loss of  14 index 
points between 2014 and 2018 . 
viii. Productivit y 
Year 2014  2015  2016  2017  2018  
Productivi ty (Index) 100 72 61 67 56 
A fall in productivity of  44 index points was recorded during the review period. Productivity dropped 
by 28 index points in 2015 in relation to 2014, then by 15% in 2016 in relation to 2015. In 2017, 
productivity improved, rising by 10% in relation to 2016. At the end of the review period, productivity 
fell once again, this time by 16% in relation to 2017 . 
ix. Production capacity utilization  
Year 2014  2015  2016  2017  2018  
Production capacity utilization rate (Index) 100 86 78 80 44 
The domestic industry's production capacity utilization rate has remained at a very low level since 
2014, with the highest level not exceeding 25%. This indicator deteriorated by 56 index points during 
the review period. It rose by  1 percentage point in 2017 in relation to 2016, before deteriorating 
once again in 2018 , this time losing 8 percentage points in relation to the previous year . 
III. CAUSAL LINK  
i. Effect of increased imports  
Imports of soap rose steadily and significantly, in absolute and relative terms, throughout the entire 
review period. This significant increase had an adverse effect on the production , sales and turnover 
of the domestic industry. Records show that the volume of imports more t han doubled between  2014 
and 2018, while the domestic industry's market share fell by more than half during the same period. 
This increase in imports has supressed sales  of domestically manufactured products, which have 
fallen steadily. Other indicators, s uch as employment, production capacity utilization rate, 
productivity and profits, have also deteriorated . 
ii. Other causal factors  
− Contraction in demand  
While domestic demand  rose considerably – by 58% – between 2014 and 2018, this increase was 
not profitable for the domestic industry , as its market share continued to fall steadily. Madagascar 
has therefore never experienced a contraction in the domestic demand for soap . G/SG/N/6/MDG/5 • G/SG/N/7/MDG/5 • G/SG/N/11/MDG/5  
 
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  − Technology used  
The domestic indus try makes soap from crude or refined soap fats  using technology that makes it 
possible to obtain household soap, toilet soap and other forms of soap that are like , and directly 
competitive  with, imported soap. According to the petitioners, the soap production units are similar 
to those used by the producers/exporters. Technological development cannot therefore be 
considered a cause of the injury  suffered . 
− Competition between domestic producers  
Given that the market share of the domestic industry is minimal in relation to that held by  imports 
and that  the seven soap companies market their products in different geographical areas, 
competition between them is virtually non -existent . Competition betwe en domestic producers cannot 
therefore be considered a cause of the injury  suffered . 
− Export performance  
According to the petitioners , all soap manufactured domestically  is intended for the domestic market. 
None of the petitioning producers export their pro duct. Export performance cannot therefore be 
considered a cause of the serious injury  suffered by the domestic industry . 
The results of this analysis in dicate that the other factors mentioned above  do not contribute in any 
significant manner to the injury suffered by the domestic industry producing the product that is like, 
or directly competitive with, the product subject to the investigation . 
5.2 Determining the existence of critical circumstances where delay would cause 
damage which would be difficult to repair  
A preliminary determination has been made that critical circumstances exist in which delay would 
cause damage that would be difficult to repair.  According to the analysis of the domestic industry's 
indicators , the survival of soap produc ers in Madagascar would be threatened if the conditions of 
competition in respect of imports continue d without any emergency action  being taken . 
6. Offer of consultations under Article 12. 4 
In accordance with Article 12.4 of the Agreement on Safeguards, Ma dagascar is prepared to hold 
consultations on the provisional safeguard measure with those Members having a substantial interest 
as exporters of the products concerned . 
7. Further information  
Requests for further information and correspondence regarding th e investigation must be sent to : 
 
Monsieur Le Directeur Général de l 'ANMCC  
Enceinte Ex -Conquête Antanimena, Antananarivo 101 - Madagascar  
Email: dg.anmcc@gmail.com   
C. NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2, OF THE AGREEMENT ON 
SAFEGUARDS OF THE DECISION NOT TO APPLY THE SAFEGUARD  
Below is the list of developing countries to which the provisional measure will not apply, as their 
exports individually represent less than 3% of Madagascar's total imports of soap and do not 
collectively account for 9%  or more  (≥9%):  
Afghanistan; Albania; Angola; Antigua and Barbuda; Argentina; Armenia; Bahrain; Bangladesh; 
Barbados; Belize; Benin; Bolivia, Plurinational State of; Botswana; Brazil; Brunei Darussalam; 
Burkina Faso; Buru ndi; 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; El Salvador; Eswatini; Fiji; Gabon; Gambia; Geo rgia; 
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; Maldives; Mali; Mauritania; Mexico; Mol dova; Mongolia; Montenegro; G/SG/N/6/MDG/5 • G/SG/N/7/MDG/5 • G/SG/N/11/MDG/5  
 
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  Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; Oman; Panama; 
Papua  New Guinea; Paraguay; Peru; Philippines; Qatar; Rwanda; Saint Kitts and Nevis; Saint Lucia; 
Saint Vincent and the Grenadines; Samoa; Saudi Arabi a; Senegal; Seychelles; Sierra Leone; 
Solomon Islands; South Africa; Sri Lanka; Suriname; Tajikistan; Tanzania; Thailand; 
The former  Yugoslav Republic of Macedonia; Togo; Tonga; Trinidad and Tobago; Tunisia; Turkey; 
Uganda; Ukraine; United Arab Emirates; U ruguay; Vanuatu; Venezuela, Bolivarian Republic of; 
Viet Nam; Yemen; Zambia; Zimbabwe . 
__________  