./.WORLD TRADE
ORGANIZATIONG/SG/25
7 November 2000
(00-4695)
Committee on Safeguards Original:  English
PROVISIONAL SAFEGUARD MEASURE IMPOSED BY CHILE
ON POWDERED MILK AND LIQUID UHT MILK
Request for Consultations under Article 12.4
of the Agreement on Safeguards
The following communication, dated 3 November 2000, has been received from the
Permanent Delegation of the European Commission.
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On 30 June 2000, Chile notified the WTO (G/SG/N/6/CHL/4) that it had initiated an
investigation on powdered milk and liquid UHT milk.  On 3 July 2000, Chile notified its intention of
applying a safeguard measure (G /SG/N/7/CHL/3).  On 12 July 2000, under Ministry of Finance
Decree No. 231, Chile imposed the provisional safe guard measure on imports of powdered milk and
liquid UHT milk (G/SG/N/7/CHL/3/Suppl.1), which consists of establishing an ad valorem  tariff
surcharge of 16 per cent on imports of these products.
The European Commission is seriously concerned about the consistency of this measure with
the Article XIX GATT and the Agreement on Safeguards.  From the scant information available so
far, it considers that the requirements laid down in the Agreement on Safeguards for the adoption of a
provisional safeguard measure have not been satisfied.
The available facts do not justify the conclusion that there has been an increase in imports in
absolute terms or relative to domestic production, nor does there appear to be any clear evidence that
the increase in imports has caused serious injury or threat of serious injury, in particular given thevery moderate market share attributable to imports.  Serious doubts can also be expressed concerning
the causal link between imports and the serious injury, and the impact of other factors.
Furthermore, Chile has not proved the existence of critical circumstances such as to justify the
adoption of a provisional measure as provided by Article 6 of the Agreement on Safeguards.  Neither
has the duration of the measure been specifically notified.
Furthermore, the notification and publication obligations laid down in the Agreement do not
appear to have been complied with, and the expedited procedure casts some doubts on whether the
investigation has been carried out with the necessary degree of diligence.
In these circumstances, and since the consultations which, under the Agreement on
Safeguards, should commence immediately, have not  taken place, the European Commission formally
requests the holding of consultations under Article 12.4 with the objective of reviewing the
information provided and obtaining further information concerning the safeguard measure, and
requests Chile not to take any new measures until consultations have taken place.G/SG/25
Page 2
Accordingly, it is proposed that consultations be held forthwith at a mutually agreed date and
place.
In the meantime, the European Commission re quest the Chilean authorities to suspend
immediately the provisional safeguard measure and to bring their action in conformity with thediscipline of the WTO Agreement on Safeguards.
The European Commission reserves all its rights under the Agreement on Safeguards, in
particular Article 14, as well as under the Dispute Settlement Understanding.
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