   
  
G/SG/N/8/EGY/9  
G/SG/N/10/EGY/9  
 
11 October 2019 
(19-6590) Page: 1/5 
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER A RTICLE 12.1( B) OF THE AGREEMENT O N  
SAFEGUARDS ON FINDING A SERIOUS  INJURY OR THREAT  
THEREOF CAUSED BY IN CREASED IMPORTS   
 
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE  
EGYPT 
(Semi-finished products of iron or non -alloy steel and steel rebar  
(bars, rods and coils) for construction purposes ) 
The following communication, dated  10 October 2019, is being circulated at the request of the 
delegation of Egypt . 
 
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The Arab Republic of Egypt hereby wishes to notify the Committee on Safeguards pursuant to 
Article s 12.1(b) , and 12.1( c) of the Agreement on Safeguards, upon making findings of serious 
injury or threat thereof caused by the increased imports of certain steel products (Semi -finished 
products of iron or non -alloy steel and Steel rebar (bars, rods and coils) for construction 
purposes) . 
The investigation was initiated on 28 March 2019 pursuant to Article 20 of the Egyptian Regulation 
G/SG/N/6/EGY/14.  
On Apri l 15th2018, Egypt imposed provisional safeguard measures with regard to imports of Semi -
finished products of iron or non -alloy steel and Steel rebar (bars, rods and coils) for construction 
purposes (G/SG/N/7/EGY/11  - G/SG/N/11/EGY/11 ). 
1. Provide evidence, ci ting relevant data and the applicable period of investigation of injury or 
threat thereof caused by increased imports  
The period of investigation is the period of investigation was established as 1 January 2017 until 
31 December  2018 and divided into four equal tranches to allow for analysis of the intervening 
trends.  
2. Provide evidence of serious injury or threat thereof caused by increased imports  
• The injury assessment has been conducted on Semi -finished products of iron or non -alloy 
steel and Steel re bar (bars, rods and coils) for construction purposes (the products 
concerned), The products are classified under the following H.S. tariff item numbers within 
the Egyptian Customs Tariff Schedule. (72 13, 72 14 and 7207). The H.S. tariff item 
numbers are g iven for information purposes only where there 's an increase in imports.  
• The analysis was made with an assessment for the two products. This injury analysis below 
is based on the questionnaire replies submitted by the domestic industry.  
• The analysis showed  that the domestic industry for the two products is suffering from 
serious injury and it is in an extremely vulnerable position.  G/SG/N/8/EGY/9 • G/SG /N/10/EGY/9  
 
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  • The domestic industry is still in an insecure situation and under the threat of serious injury if 
the increasing trend in impor ts continued.  
a) Information on whether there is an absolute increase in imports or an increase in 
imports relative to domestic production  
Imports Volume  (Tons)  
 First half  
of 2017  Second half  
of 2017  First half  
of 2018  Second half  
of 2018  
Imports Volume/Ton  696176  607906  895086  904112  
Index % 100  87  129 130 
Index imports volume  (%) domestic production  100  71 111 112 
• The above table shows a decline in the volume of imports of 13 percent in absolute terms 
during the second half of 2017 compared to the first half of 2017. In the first half of 2018 
the significant increase in imports started and amounted to 29 percent and 30 percent 
during the first half and the second half of 2018 respectively compared to the first half of 
2017 due t o the unforeseen developments.  
• There was thus a significant increase in absolute terms of 30%. This was also true relative 
to domestic production, which led to a loss of market share as further demonstrated in the 
following section. During the second half of 2017 imports declined as compared to domestic 
production by 29 percent compared to the first half of 2017. However, imports started to 
increase as compared to domestic production by 11 percent and 12 percent during the first 
half and second half of 2018  respectively compared to first half of 2017.  
b) Evidence of serious injury or threat thereof caused by increased imports  
In order to make a determination of serious injury to the domestic industry producing the like or 
directly competitive product, an evalua tion of relevant factors on an objective and quantifiable 
basis having a bearing on its situation has been undertaken.  
Domestic Sales  
 First half  
of 2017  Second half  
of 2017  First half  
of 2018  Second half  
of 2018  
Change in Sales Volume  (%) 100 124 107 98 
The sales of the domestic industry increased by 24 %and 7 % during the second half of 2017 and 
the first half of 2018 respectively compared to the first half of 2017. During the second half of 
2018 and coinciding with the increase in imports domestic  sales declined by 2 % compared to the 
first half of 2017.  
Market Share  
 First half  
of 2017  Second half  
of 2017  First half  
of 2018  Second half  
of 2018  
Index of Share of Domestic Industry  (%) 100 106 94 92 
Index of Share of Other Domestic Sales% 
(Rolling Companies ) 100 106 110 108 
Index of Imports Share  (%) 100 74 112 122 
During the first and second halves of 2018 and coinciding with the progressive increase in imports, 
the market share of domestic sales decline by 6 and 8 percent respectively compared to the first 
half of 2017. In spite of the increase in market volume. Du ring the same period, the market share 
of other domestic sales increased by 10 % and 8 % respectively coinciding with the increase in the 
market share of imports of 12 % and 2 2% respectively during the same comparable periods which 
means that the increase in imports had a negative effect on the market share of domestic sales in 
favor of the market share of other domestic sales (the sales of the rerollers).  G/SG/N/8/EGY/9 • G/SG/N/10/EGY/9  
 
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  Production and Capacity  Utilization  
 First half of 
2017  Second half 
of 2017  First half of 
2018  Second hal f 
of 2017  
Index production volume  (%) 100 123 116 116 
Index Capacity Utilization  (%) 100 123 116 116 
• The Above table shows an increase of 23 % in volume of production during the second half of 
2017 compared to the first half of 2017. The volume of production increased by 16 % during 
the first and second halves of 2018 compared to the first half of 2017 albeit its decline 
compared to second half o f 2017.  
• While there was stability in production capacity during the injury analysis period, utilized 
capacity increased during the same period at the same rate of the increase in production. 
Utilized capacity increased by 23 % during the second half of 2017 compared to the first half 
of 2017 and by 16 % during the first and second halves of 2018 compared to the first half of 
2017 albeit its decline compared to the second half of 2017.  
• The Investigating Authority considers that d ue to the nature of the industry the increase in 
production is obligatory. The domestic industry is suffering from serious injury due to its 
inability to stop then re -operate furnaces which causes huge losses to the industry. Such 
increase cannot be consid ered a positive indicator especially with decline in sales and 
increase in inventory. The Investigating Authority found during the verification visit the 
inventory accumulated during the first half of 2019 and that capacity utilization increased 
due to the  obligatory increase in production although the industry could not utilize more 
than third of its available capacity.  
Workers and Worker's Productivity  
• The above table shows that, during the period of investigation, there was an increase of 
labor of 9 %, 8% and 9 % during the second half of 2017, the first half of 2018 and the 
second half of 2018 respectively compa red to the first half of 2017.  
• The above table shows also that productivity per worker increased during the period of 
investigation by 13 %, 7% and 6 % during the second half of 2017, the first half of 2018 and 
the second half of 2018 respectively compared t o the first half of 2017.  
• The IA considers that the increase in productivity was due to the increase in production 
resulting from the inability of the industry to stop furnaces.  
Profit and Loss  
 First half 
of 2017  Second half 
of 2017  First half 
of 2018  Second half 
of 2018  
Change in  profit & Losses  (%) (100)  179 279 (195 )  
• The above table shows that the losses incurred by the industry during the first half of 2017 
turned into profits of 179 % and 279 % during the second half of 2017 and the first half of 
2018 respectively.  
• During the second half of 2018, coinciding with the unforeseen development which led to the 
significant increase in the volume of imports as mentioned in Section 3, the profits of 
domestic industry turned into losses amounting more than those incurred during the first 
half of 2017 by  195%.  First half 
2017  Second half 
2017  First half 
2018  Second 
half 2018  
Labour  Index (%) 100 109 108 109 
Productivity (ton/worker)  100 113 107 106 G/SG/N/8/EGY/9 • G/SG /N/10/EGY/9  
 
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  • The IA considers that the index of profits and losses is reflecting the outcome of the 
performance of the domestic industry and all other factors. S uch index demonstrates the 
serious injury suffered by the domestic industry in general.  
Inventory  
 First half 
of 2017  Second half 
of 2017  First half 
of 2018  Second half 
of 2018  
Change in inventory  (%) 100 119 87 459 
• The above table shows that the volume of inventory increased during the second half of 
2017 by 19 % compared to the first half of 2017 while declined by 13 % during the first half 
of 2018 compared to the first half of 2017. During the second half of 2018 when imports 
increased substantial ly, the volume of inventory increased significantly by 359 % compared 
to the first half of 2017 which confirms the finding of the Investigating Authority that the 
increase in production is not a positive indicator but rather the industry was forced to 
increase production because of its inability to stop furnaces.  
3. Provide precise description of the product involved  
The products under investigation are semi -finished products of iron or non -alloy steel (billets) and 
steel rebar (bars, rods and coils) for constr uction purposes, which is classified under 
H.S Tariff Codes:  72 07, 72 13 and 72 14.  
4. Precise description of the proposed measure  
The Investigating Authority proposed imposing safeguard measure for three years at the rate of 
additional duty 16% of the CIF, value for billets and 25% of CIF value for steel rebar.  
5. Provide proposed date of introduction of the measure  
The definitive meas ures should be introduced starting from 12 October 2019.  
6. Provide expected duration of the measure  
The measures should be in place for a period of three years including the period of imposition of 
the provisional measures.  
7. 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 date 
for the review has already been scheduled  
Not applicable . 
8. Offer of  consultation  
Consistent with artic le 12.3 of the agreement on safeguard. Egypt is prepared to consult on the 
proposed safeguard measure with those members having a substantial interest of the subject 
product.  G/SG/N/8/EGY/9 • G/SG/N/10/EGY/9  
 
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  9. If the expected duration is over one year, provide expected timetable for progres sive 
liberalization of the measure  
The measures should be decreased gradually for each product over the three -year period as 
follows:  
Duration  for six months  for one year   for one year  
Steel Rebar under HS code (72 13, 72 14)  
Value  25% of CIF value – minimum 
limit 125 $ per Ton  21% Of CIF value – minimum 
limit 105 $ per Ton  17% of CIF value – minimum 
limit 85 $ per Ton  
Billet under HS code (72 07)  
Value  16% of CIF value – minimum 
limit 74 $ per Ton  13% of CIF value – minimum 
limit 60 $ per Ton  10 % of CIF value – minimum 
limit 46 $ per Ton  
10. Developing Countries Exempted from the Safeguard Measure  
Imports from developing country Members shall not be subject to the proposed provisional 
safeguard measure as long as each Member's exports individually do not exceed three percent of 
total imports into Egypt.  In addition, the share of the members with le ss than three percent import 
share do not collectively account for more than nine percent of total imports into Egypt.  
The address of the competent authority for correspondence is:  
Ministry of Trade and Industry  
Trade Remedies Sector  
Mr. Ibrahim El Seginy  
El Maleya Towers – Tower No. 6 – 9th floor 
Extension of Ramses St. – Naser City – Cairo 
Tel : (202) 23422479  
Fax : (202) 23420784  
E-mail: itpd@tas.gov.eg  
Website: www.tas.gov.eg  
 
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