WORLD TRADE
ORGANIZATIONG/SG/N/8/PHL/2/Suppl.1
G/SG/N/10/PHL/1G/SG/N/11/PHL/1
17 April 2002
(02-2112)
Committee on Safeguards Original:  English
NOTIFICATION UNDER ARTICLE 12.1(b) OF THE
AGREEMENT ON SAFEGUARDS ON FINDING
A SERIOUS INJURY OR THREAT THEREOF
CAUSED BY INCREASED IMPORTS
NOTIFICATION PURSUANT TO ARTICLE 12.1(c)
OF THE AGREEMENT ON SAFEGUARDS
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2
OF THE AGREEMENT ON SAFEGUARDS
PHILIPPINES
The following communication, dated 12 April 2002, has been received from the Permanent
Mission of the Philippines.
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Further to the Philippine Notification  G/SG/N/7/PHL/2-G/SG/N/8/PHL/2 circulated on
30 November 2001 and pursuant to Article 12 of the Agreement on Safeguards, the Government of
the Philippines has the honour to notify the Committee on Safeguards of an Order of the Philippines’Department of Trade and Industry on Safeguard Case No. 01-2001, dated 11 April 2002, making after
preliminary determination, an affirmative finding that increased imports of ceramic floor and wall
tiles have caused serious injury to the domestic industry, and imposing a definitive safeguard duty in
the amount of Philippine pesos 5.40/kg for the first year, Philippine pesos 4.30/kg for the second year
and Philippine pesos 3.50/kg for the third year  on imported ceramic floor and wall tiles from variouscountries.G/SG/N/8/PHL/2/Suppl.1
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IN THE MATTER OF THE APPLICATION FOR GENERAL
SAFEGUARD MEASURES AGAINST THE IMPORTATION OF
CERAMIC FLOOR AND WALL TILES FROMVARIOUS COUNTRIES
(SAFEGUARD CASE NO. 01-2001)
Ceramic Tiles Manufacturers Association
Protestant
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DECISION
On 22 May 2001, the Department of Trade and Industry (DTI) accepted a properly
documented application from the Philippine ceramic tile industry alleging that ceramic tiles is being
imported into the Philippines in such increased quantities as to be a substantial cause of serious injuryor threat thereof to the domestic industry within the meaning of Re public Act (R.A.) 8800, otherwise
known as the “Safeguard Measures Act”.  The application sought the imposition of provisional and
definitive general safeguard measures on imports of ceramic floor and wall tiles, glazed or unglazed,
classified under HS Codes 6907.9000 and 6908.9000 of the Tariff and Customs Code, respectively.
The DTI made a positive preliminary determination on the application and in accordance with
Section 8 of RA 8800, found that “critical circumstances” existed which justified the imposition of
provisional measures equivalent to P
5.40/kg. not exceeding 200 days from the date of issuance by the
Bureau of Customs (BOC) of the implementin g Customs Memorandum Order (CMO).  The BOC
issued CMO No. 4-2002 on 4 January 2002 to implement the said DTI Order.  The DTI’s report was
forwarded to the Tariff Commission as required by Section 7 for formal investigation.
On 27 March 2002, DTI received the Tariff Commission’s Formal Investigation Report on
the said application.  The Tariff Commission found that:
1. The circumstances provided in Article XIX of GATT 1994 need not be demonstrated
since the product under consideration (ceramic tiles) is not the subject of any Philippine
obligation or tariff concession under the WTO Agreement.  Nonetheless, such enquiry is
governed by the national legislation (RA 8800) and the terms and conditions of theAgreement on Safeguards.
2. The collective output of the two (2) applicant companies constitutes a major proportion of
the total domestic production of ceramic tiles.
3. Locally produced ceramic tile is deemed "like product" to imported ceramic tile.
4. Ceramic tiles are being imported into the Ph ilippines in increased quantities, both in
absolute terms and relative to domestic production, starting in 2000.  The increase in
volume of imports is recent, sharp and significant as to cause serious injury to the
domestic industry.
5. The industry suffered and is suffering significant overall impairment in its condition in
terms of loss of market share; inability to increase production and sales volume despite
the increase in demand; decline in employment; underutilization of capacity; and huge
losses in operations.G/SG/N/8/PHL/2/Suppl.1
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6. While there are other factors which contributed to the overall impairment in the position
of the domestic industry, the Commission considers that cheap imports in increased
quantities were the dominant cause of serious injury to the domestic ceramic tile industry.
The existence of a causal link between the increased imports of ceramic floor and wall tiles
and serious injury to the domestic industry having been established, the Commission recommended
the imposition of definitive general safeguard measures in the form of a tariff-rate quota and a specific
duty on imported ceramic floor and wall tiles.
Section 5 of RA 8800 states:
"The Secretary shall apply a general safeguard measure upon a positive final
determination of the Commission that a product is being imported into the
country in increased quantities, whether absolute or relative to the domestic
production, as to be a substantial cause of serious injury or threat thereof tothe domestic industry; however, in the case of non-agricultural products, the
Secretary shall first establish that the application of such safeguard measures
will be in the public interest."
Accordingly. The DTI has reviewed the Commission's findings and recommendations and has
established that the application of safeguard measures shall be in the public interest.
IN VIEW THEREOF , and in accordance with Section 13 of RA 8800, the following is
hereby issued:
1. A definitive safeguard duty in the amount of P
5.40/kg for the first year, P  4.30/kg for the second
year and P  3.50/kg for the third year shall be imposed on imported ceramic floor and wall tiles
from various countries.  The first year of implementation of the definitive safeguard measure
shall include the period in which the provisional safeguard duty took effect i.e. 9 January 2002,
the date of the issuance of Customs Memorandum Order No. 4-2002.
2. The ceramic tiles, however, from Japan and the member states of the European Union, which
cannot be considered "like product or directly competitive product" as defined in Section 4 of RA
8800, are excluded from the imposition of general safeguard duty.
3.  Pursuant to Section 13 of RA 8800 and Rule 13.1.d of its IRR, "a general safeguard measure
shall not be applied to a product originating from a developing country if its share to total
Philippine imports of the said product is less  than three per cent (3%):  Provided, however,
that developing countries with less than thre e per cent (3%) share collectively account for
not more than nine per cent (9%) of the total Philippine imports of the product concerned",
the following countries listed below are also  excluded from the imposition of the general
safeguard duty on ceramic floor and wall tiles:G/SG/N/8/PHL/2/Suppl.1
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East & Southern Africa West Africa North Africa South Asia
Angola
BotswanaBurundi
Comoros
Congo. Dem. Rep.DjiboutiEritreaEthiopiaKenya
Lesotho
MadagascarMalawiMauritiusMozambique
Namibia
ReunionRwandaSeychellesSomaliaSouth Africa
Sudan
SwazilandTanzaniaUgandaZambiaZimbabweBenin
Burkina FasoCameroon
Cape Verde
Central African Rep.ChadCongo, Rep.Cote d' IvoireEquatorial Guinea
Gabon
Gambia, TheGhanaGuineaGuinea-Bissau
Liberia
MaliMauritaniaNigerNigeriaSao Tome & Principe
Senegal
Sierra LeoneTogoAlgeria
Egypt, Arab Rep.Libya
Morocco
TunisiaAfghanistan
BangladeshBhutan
British Indian Ocean Territory
East TimorIndiaMaldivesNepalPakistan
Sri LankaG/SG/N/8/PHL/2/Suppl.1
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Europe & Central Asia Middle East Americas East Asia & Pacific
Albania
ArmeniaAzerbaijanBelarus
Bosnia & Herzegovina
BulgariaCroatiaCyprusCzech RepublicEstonia
Georgia
GreenlandHungaryKazakhstanKyrgyz RepublicLatvia
Lithuania
Macedonia, FYRMaltaMoldovaPoland
Romania
Russian FederationSlovakiaSloveniaTajikistanTurkey
Turkmenistan
UkraineUzbekistanYugoslavia, Fed. Rep.Bahrain
Iran, Islamic Rep.IraqIsrael
Jordan
KuwaitLebanonOmanQatarSaudi Arabia
Syrian Arab Rep.
United Arab EmiratesWest Bank & GazaYemen, Rep.Anguilla
Antigua and BarbudaArgentinaAruba
Bahamas
BarbadosBelizeBermudaBoliviaBrazil
British Virgin Is.
Cayman IslandsChileColombiaCosta RicaCuba
Dominica
Dominican Rep.EcuadorEl SalvadorFalkland Islands (Malvinas)
French Guiana
GranadaGuadeloupeGuatemalaGuyanaHaiti
Honduras
JamaicaMartiniqueMexicoMontserratNetherland Antilles
Nicaragua
Norfolk Is.PanamaParaguayPeruPuerto Rico
St. Helena
St. Kitts & NevisSt. LuciaSt. Pierre & MiquelonSt. Vincent & the
     Grenadines
SurinameTrinidad & TobagoTurks & Caicos Is.UruguayUS Virgin Island
VenezuelaAmerican Samoa
Brunei DarussalamCambodiaChristmas Is.
Cocos (Keeling) Is.
Cook Is.FijiFrench PolynesiaGuamJohnston Is.
Kiribati
Korea, Dem. Rep.Korea, Rep.Lao PDRMacauMarshall Islands
Micronesia, Fed. Sts.
Midway Is.MongoliaMyanmarNauru
New Caledonia
NiueNorthern Marianas IslandPalauPapua New GuineaPitcairn Is.
Samoa
SingaporeSolomon IslandsThailandTokelauTonga
Tuvalu
VanuatuVietnamWake Is.Wallis and Futuna Is.G/SG/N/8/PHL/2/Suppl.1
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All cash bonds that may have been imposed on sh ipments originating from countries listed above
which entered in or are withdrawn from warehouses in the Philippines  for consumption starting
9 January 2002, the date of the effectivity of CMO 4-2002, shall be immediately returned to theconcerned importer.
The notification and consultation requirements of Article 12 of the WTO Safeguards
Agreement and Section 17 of RA 8800 and its IRR shall be complied with.
Imports originating from ASEAN Member states shall be governed by the provisions of
Articles 6 and 8 of the Agreement on the CEPT Scheme.
The application of the definitive general safeguard measure shall be monitored and reviewed
in accordance with Rules 15 and 16 of RA 8800.
Let this Decision be published in two (2) newspapers of general circulation.
SO ORDERED.11 April 2002
MAR ROXAS
 Secretary
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