WORLD TRADE
ORGANIZATIONG/SG/N/6/CHL/5
10 January 2001
(01-0114)
Committee on Safeguards Original:  Spanish
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE
AGREEMENT ON SAFEGUARDS ON INITIATION OF
AN INVESTIGATION AND THE REASONS FOR IT
CHILE
The following communication, dated 21 December 2000, has been received from the
Permanent Mission of Chile.
_______________
Please find attached the notification by Chile, pursuant to Article 12.1(a) of the Agreement on
Safeguards, to the effect that the investigating authority, at its 227th meeting on 6 December 2000,
decided to initiate a safeguards investigation concerning imports of mixtures of oils classified in tariff
heading 1517.9000 of the Chilean Harmonized Tariff.  The investigation was initiated on
19 December 2000, date of publication in the Diario Oficial  (Official Journal) of Chile.G/SG/N/6/CHL/5
Page 2
1. Specify the date when the investigation was initiated.
The investigation was initiated on 19 December 2000, date of publication in the Diario
Oficial (Official Journal) of Chile.
2. Specify the product subject to the investigation.
Mixtures of oils , classified under tariff item 1517.9000 of the Chilean Harmonized Tariff,
which refers to "edible mixtures or preparations of animal or vegetable fats or oils or of
fractions of different fats or oils".
3. Provide the reasons for the initiation of investigation.
(i) The investigation was initiated at the request  of the Sociedad Nacional de
Agricultura  (a private agricultural association) and the company Promosol S.A., representing
the Chilean Edible Oils Extracting Industry.  The National Commission responsible for
investigating the existence of distortions in the price of imported goods decided to open theinvestigation at its meeting on 6 December 2000.
The domestic industry  consists of the oil extracting and refining industry, which produces
like products to those subject to the investigation.
(ii) Evidence on the basis of which the investigation was initiated:
Analysis of imports
In terms of percentage change, in the period January-June 2000, compared with the same
period in the previous year, there was an 84 per cent increase in the volume of imports, and in 1999 a
45 per cent increase (Table 1).
In the period January-June 2000, at least 75 per cent of imports of mixtures of oils consisted
of refined oils, while in 1999 at least 77 per cent of such imports were likewise of refined oils.
According to more recent data, however, in the second half of this year imports consist primarily of
mixtures of crude oils, at the expense of mixtures of refined oils.
Between 1990 and 1996, annual imports of mixtures of oils did not exceed a volume of
650 tonnes.  This pattern changed in 1997, when 25,290 tonnes were imported.
In 1998 imports of mixtures of oils fell by 7,650 tonnes but in 1999 they returned to 1997
levels with a growth of almost 8,000 tonnes, reaching the record level of 25,603 tonnes.  This upward
trend continued in the first half of 2000, with a growth of 11,800 tonnes, thus exceeding the volume of
total imports in the whole of 1999.
The share of imports of mixtures of oils in domestic production of refined oil rose from 12 per
cent in 1998 to 17 per cent in 1999.  Prior to 1997 this share was less than 1 per cent.
The share of imports of mixtures of oils in total imports of edible oils stood at 17 per cent in
1999.  As of June 2000 the figure was above 95 per cent.  Total imports of oils in the period January-
June 2000 were 4 per cent above those recorded in the same period in 1999.
In 1999, Argentina accounted for 66 per cent of the imports of edible oils and Bolivia for
29 per cent (Table 2).G/SG/N/6/CHL/5
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Injury, threat of injury and causal link
The domestic price of oil, measured in Unidades de Fomento1 ("development units") fell by
3.6 per cent in the first half of 2000 compared with the same period in the previous year (Table 3).
In 1999 domestic production of refined oil fell  by 13 per cent compared with the previous
year.
At the end of 1999 employment associated with the domestic oil industry amounted to 2,000
persons, of whom at least 300 had been laid off by October 2000;  this figure could reach 1,500
persons with the closure of various extracting and refining plants over the next few months if the
present entry of mixtures of oils at current import prices were to continue.
Installed capacity of the domestic industry amount s to 120,000 tonnes in extracting plants and
over 300,000 in refining plants, while current utilization of installed capacity in the extracting
industry is about 50 per cent.
In the first half of 2000 compared with the same period in the previous year the average c.i.f.
price of imports of mixtures of oils fell by 17 per cent, while in 1999 there was a 19 per cent drop
compared with 1998.
It is estimated that if this situation were to continue, imports of mixtures of oils would bring
the price payable to farmers down to US$154/ton.  This scenario would lead to wholesale bankruptcy
of producers of rapeseed and closure of the sole extracting plant currently operating in the country,
with the ensuing disappearance of the crop from Ch ile.  This would result in the following economic
injury for the domestic extracting industry:
(a) Loss of fixed capital investment amounting to US$4 million;
(b) dismissal of 75 persons linked to the industry;(c) loss of investment in the form of technology transfer to oilseed producers for
conversion to Canola totalling US$500,000.
4. Other information  (as contained in the notice of the initiation of the investigation published
in the Official Journal):
Period of the investigation:  the final resolution will be adopted within 90 days from the
initiation of the investigation.
Public hearing:  to be held on 1 March 2001 at 9.30 a.m. at Agustinas 853, 12th floor,
Santiago.
Any information which the interested parties may wish to submit and any request for a
hearing before the Commission that they may wish to  put forward should be submitted within 30 days
following the initiation of this investigation to th e Secretaría Técnica (Technical Secretariat), calle
Huérfanos 1175, 4th floor, Central Bank of Chile, tel. 670.2766, fax 671.1881.  Any additional
information may be consulted at the Technical Secretariat.
                                                     
1 A unit of value which incorporates price movements.G/SG/N/6/CHL/5
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Table 1
Imports of Mixtures of Oils (1517.9000)
Period US$000s CIF Tonnes Av. price CIF
1990 36 44 828
1991 0 0 0
1992 14 8 1,701
1993 143 75 1,902
1994 389 278 1,398
1995 877 627 1,399
1996 707 431 1,640
1997 15,573 25,290 616
1998 15,338 17,637 870
1999 18,004 25,603 703
Jan.-June/1999 10,229 14,038 729
Jan.-June/2000 15,598 25,809 604
Percentage change
Period US$000s CIF Tonnes Av. price CIF
1991 -100% -100% -100%
1992
1993 921% 814% 12%
1994 172% 270% -26%
1995 125% 125% 0%
1996 -19% -31% 17%
1997 2,103% 5,768% -62%
1998 -2% -30% 41%
1999 17% 45% -19%
Jan.-June/(99/00) 52% 84% -17%
Source:  Prepared by the Technical Secretariat on the basis of Import DeclarationsG/SG/N/6/CHL/5
Page 5Table 2
Imports of Mixtures of Oils (1517.9000) by origin
Imports (Tonnes) % change
Origin 1998 % share 1999 % shareJan.-
June/1999% shareJan.-
June/2000% share 1999/98Jan.-June
(99/00)
ARGENTINA 17,024 97 16,856 66 13,264 94 13,051 51 -1 -2
BOLIVIA 155 1 7,521 29 413 3 12,508 48 4,738 2,932
PERU 0 0 649 3 0 0 175 1
ECUADOR 190 1 452 2 279 2 0 0 138 -100
MEXICO 131 1 50 0 50 0 0 0 -62 -100
B E L G I U M 2 10 2 40 1 30 1 8 0 1 34 3
FRANCE 8 0 20 0 12 0 9 0 155 -25
SPAIN 16 0 18 0 8 0 12 0 13 48
UNITED STATES 3 0 11 0 0 0 14 0 336 8,973
GERMANY 8 0 1 0 0 0 0 0 -93
P O R T U G A L 8 00 00 00 0 0 - 1 0 0
UNITED KINGDOM 0 0 0 0 0 0 22 0
NETHERLANDS 2 0 0 0 0 0 0 0 -100
TOTAL 17,637 100 25,603 100 14,038 100 25,809 100 45 84G/SG/N/6/CHL/5
Page 6Table 2 (Cont'd)
Value CIF (US$000s) % change
Origin 1998 % share 1999 % shareJan.-
June/1999% shareJan.-
June/2000% share 1999/98Jan.-June
(99/00)
ARGENTINA 14,596 95 11,939 66 9,549 93 6,923 44 -18 -28
BOLIVIA 144 1 5,057 28 306 3 8,406 54 3,412 2,647
PERU 0 0 412 2 0 0 120 1
ECUADOR 183 1 388 2 248 2 0 0 112 -100
MEXICO 160 1 52 0 52 1 0 0 -68 -100
BELGIUM 38 0 40 0 21 0 29 0 5 38
FRANCE 24 0 53 0 36 0 22 0 121 -39
SPAIN 37 0 45 0 15 0 24 0 22 60
UNITED STATES 18 0 18 0 2 0 27 0 0 1,250
GERMANY 16 0 1 0 0 0 0 0 -94
PORTUGAL 121 1 0 0 0 0 0 0 -100
UNITED KINGDOM 0 0 0 0 0 0 47 0
NETHERLANDS 3 0 0 0 0 0 0 0 -100
TOTAL 15,338 100 18,004 100 10,229 100 15,598 100 17 52
Source:  Prepared by the Technical Secret ariat on the basis of Import Declarations.G/SG/N/6/CHL/5
Page 7
Table 3
Domestic prices
Oil:  Normal wholesale price (excluding VAT)
Month Pesos ($) Dollars (US$) Un. Fom
January-97 406,012 958 30.45
February-97 408,174 981 30.47
March-97 418,067 1,010 30.99
April-97 424,567 1,017 31.33
May-97 424,563 1,014 31.24
June-97 427,195 1,023 31.36
July-97 416,875 1,001 30.54
August-97 417,079 1,005 30.41
September-97 424,200 1,022 30.79
October-97 431,395 1,041 31.07
November-97 431,395 1,015 30.73
December-97 434,739 992 30.84
Average 1997 422,022 1,007 30.85
January-98 431,609 952 30.59
February-98 439,614 980 31.00
March-98 447,382 989 31.50
April-98 461,879 1,018 32.44
May-98 463,848 1,023 32.44
June-98 471,113 1,033 32.87
July-98 478,749 1,030 33.31
August-98 489,242 1,038 33.91
September-98 495,631 1,053 34.25
October-98 507,005 1,094 34.88
November-98 540,864 1,168 36.94
December-98 542,123 1,148 36.92
Average 1998 480,755 1,044 33.42
January-99 558,949 1,175 37.92
February-99 544,167 1,103 36.94
March-99 545,674 1,108 37.05
April-99 509,398 1,056 34.43
May-99 511,490 1,055 34.41
June-99 508,080 1,012 34.12
July-99 513,294 993 34.43
August-99 521,538 1,017 34.95
September-99 509,274 971 34.07
October-99 505,545 940 33.75
November-99 515,281 948 34.29
December-99 510,510 949 33.88
Average 1999 521,100 1,027 35.02G/SG/N/6/CHL/5
Page 8
Table 3 (Cont'd)
Month Pesos ($) Dollars ($) Un. Fom
January-00 520,574 1,000 34.46
February-00 520,241 1,014 34.36
March-00 525,927 1,043 34.56
April-00 538,177 1,059 35.14
May-00 522,350 1,001 33.91
June-00 537,486 1,015 34.80
Average 2000 527,459 1,022 34.54
Change 98/97 13.9% 3.7% 8.3%
Change 99/98 8.4% -1.6% 4.8%
Change January-June/(00/99) -0.4% -5.8% -3.6%
Source: Prepared by the Technical Secretariat on the basi s of data provided by the applicant and its own data.
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