   
  
G/SG/N/8/MDG/10  
G/SG/N/10/MDG/10  
G/SG/N/11/MDG/10/Suppl.1  
 
26 October 2023  
(23-7222) Page: 1/5 
Committee on Safeguards  Original: French  
 
  
NOTIFICATION UNDER ARTICLE 12.1 (A) OF THE AGREEMENT ON SAFEGUARDS  
ON INITIATION OF AN INVESTIGATION AND THE REASONS FOR IT  
NOTIFICATION UNDER ARTICLE 12.4 OF THE AGREEMENT ON SAFEGUARDS  
BEFORE TAKING A PROVISIONAL SAFEGUARD MEASURE  
REFERRED TO IN ARTICLE  6 
NOTIFICATION UNDER ARTICLE 9, FOOTNOTE 2, OF  
THE AGREEMENT ON SAFEGUARDS  
MADAGASCAR  
Flour 
The following communication, dated and received on 24 October 2023, is being circulated at the 
request of the delegation of Madagascar.  
 
_______________  
 
 
In accordance with Articles 12.1(b) and 12.1(c) of the Agreement on Safeguards, Madagascar hereby 
notifies the Committee on Safegu ards of a finding of serious injury or threat thereof caused by 
increased imports, and of the decision to apply a safeguard measure on imports of flour. Madagascar 
also wishes to notify the Committee, under Article  9, footnote  2, of the Agreement, of the d ecision 
not to apply the proposed safeguard measure to imports from developing countries.  
1. NOTIFICATION, UNDER ARTICLES 12.1(B) AND 12.1(C) OF THE AGREEMENT ON 
SAFEGUARDS, OF A FINDING OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY 
INCREASED IMPORTS, AND OF THE DECISION TO APPLY A SAFEGUARD MEASURE  
1.1. Evidence of serious injury or threat thereof caused by increased imports  
A. INCREASE IN IMPORTS  
i. Unforeseen developments  
The disruption of international trade in wheat flour as a result of the war in Ukraine, a situation that 
has become profitable for some exporting countries, is an unforeseen circumstance that has helped 
to increase wheat flour imports to Madagascar. Moreover, the increase in flour imports to 
Madagascar is also explained by the export  promotion of some exporting countries, including India 
and Egypt. That approach allows producers in those countries to take advantage of different forms 
of support that make them more competitive. In addition, the surge in world wheat prices led Indian 
farmers to increase the acreage planted with high yield varieties.  G/SG/N/8/MDG/10 • G/SG/N/10/MDG/10 • G/SG/N/11/MDG/10/Suppl.1  
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  ii. Absolute change in imports  
In absolute terms, flour imports increased significantly during the period under investigation. A 
considerable 25 -point rise was recorded last year.  
iii. Change in impor ts relative to domestic production  
Between 2021 and 2022, imports increased by 17 index points relative to domestic production.  
B. SERIOUS INJURY  
The determination of serious injury caused by the increase in imports was based on an objective 
and quantifiable examination of all relevant factors having a bearing on the situation of the domestic 
industry producing like or directly competing products. On the basis of the data available to the 
Investigating Authority, it was determined that the domesti c industry had suffered serious injury, 
which is detailed below.  
i. Rate of increase in imports  
Flour imports into Madagascar increased both in absolute terms and relative to domestic production, 
particularly in 2022 when they topped more than 185,000 tonnes.  This rise has had a negative 
impact on the performance indicators of the domestic industry.  
 
ii. Share of the domestic market taken by imports  
Imports have a large share of the market. On average, during the investigation period, they 
accounted for more than 70% of total consumption. Meanwhile, the market share of local producers 
corresponded to well below half of domestic consumption.  
 
iii. Domestic production  
Although it is starting to pick up again, the domestic industry is finding it difficult to increase its 
production volume. Following an improvement in 2021, the recovery in imports led to a year -on-
year drop of 68 index points in 2022.  
iv. Changes in the level of sales  
The sales volume trend followed that of production. However, the decline in the sales volume w as 
much sharper in 2022, as it fell 75 index points compared to the previous year.  
 
v. Production capacity utilization rate  
The domestic industry's production capacity has remained constant over the last three years. 
However, the utilization rate of that capacity has followed the variations in production. It is far from 
optimal as it has not been able to top 45%. The rate was down 68 index points in 2022 compared 
to 2021.  
 
vi. Employment  
Domestic industry's workforce rose from 100 to 181 index points between 2020 and 2021. 
Nevertheless, it fell by 8 index points in 2022 compared to 2021.  
 
vii. Productivity  
The domestic industry's productivity increased 47 index points during the period under investigation. 
It rose by 79 index points in 2021, but saw a year -on-year decrease of 32 index points in 2022.  
 G/SG/N/8/MDG/10 • G/SG/N/10/MDG/10 • G/SG/N/11/MDG/10/Suppl.1  
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  viii. Inventory  
The inventory accumulated by the domestic industry points to its difficulties in disposing of its 
production. The flour inventory volume at the end of 2022 was well over double that of 2020. 
Compared to the previous year, the inventory volume climbed 95 index points in 2022, against 69 
points in 2021.  
ix. Profitability  
The influx of imports had a significant impact on the domestic industry's financial performance. It 
fell by 40 index points over the period  between 2020 and 2022, while the sales volume rose by 165 
index points. Between 2021 and 2022, the domestic industry lost 57 index points in terms of 
profitability.  
C. CAUSAL LINK  
i. Effects of increased imports  
YEARS  2020  2021  2022  
Imports  100 87 112 
Domestic consumption  100 126 136 
Production  100 323 255 
Sales  100 340 265 
Production capacity utilization rate  100 323 255 
Imports' market share  100 69 83 
Domestic industry's market share  100 270 196 
Inventory  100 169 264 
Performance  100 117 60 
The increase in flour imports led to importers cornering the market to the detriment of the domestic 
industry. The market share of imports grew by 14 index points, while that of the domestic industry 
shrank by 74 index points. Contrary to the growth in imp orts, the indicators for the domestic industry 
show a significant and widespread deterioration thus constituting serious injury. Local producers did 
not have any opportunity to take advantage of the surge in domestic demand between 2021 and 
2022. Domestic consumption rose by 16 index points in 2022 compared to the previous year. 
Meanwhile, production and sales fell by 68 and 75 index points, respectively. In the face of greater 
imports, local flour producers struggled to position themselves in the domestic market. As a result, 
there has been an accumulation of inventory which has generated significant additional costs for 
local industries and cut their profit margin. Therefore, the Investigating Authority concluded that 
there was a coincidence in time betwee n the increase in imports and the deterioration in the domestic 
industry's indicators.  
ii. Other causal factors  
 
- Contraction in demand or changes in consumption patterns  
Since flour consumption or use patterns changed significantly during the investigation period, the 
change in consumption patterns cannot be considered a cause of the injury suffered by the domestic 
industry.  
Domestic flour consumption saw steady growth of 36 index points. In increased by 26 index points 
in 2021 and 10 index poi nts in 2022. Hence, contraction in domestic demand cannot be considered 
a source of the injury suffered by the domestic industry either.  
 G/SG/N/8/MDG/10 • G/SG/N/10/MDG/10 • G/SG/N/11/MDG/10/Suppl.1  
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  - Competition among domestic producers  
The two flour production units are located in two geographically distant locations. Moreover, 
domestic production accounts for a lot less than half of domestic demand. Internal competition is 
therefore in no way the cause of the injury suffered by local producers.  
 
- Technological developments  
The domestic industry has effective machinery capable of producing good quality flour in accordance 
with the current level of flour production technology. Furthermore, the second production unit is 
completely new, equipped with the latest technology. Hence, lagging behind in terms of technol ogy 
cannot be considered a source of the injury suffered by the domestic industry.  
 
- Export performance  
Locally produced wheat flour is destined entirely for the domestic market. Poor export performance 
therefore cannot be considered a cause of the injury s uffered by the domestic industry.  
 
1.2. Precise description of the product involved  
The product subject to the safeguard measure is flour, imported under the Harmonized System code 
1101000, entitled "Wheat or meslin flour" of Madagascar's customs tariff.  
1.3. Precise description of the proposed measure  
The definitive safeguard measure will take the form of an additional ad valorem  duty of 12% of the 
c.i.f. value.  
1.4. Proposed date of introduction of the measure  
The definitive safeguard measure will enter i nto force on 24 October 2023, the date of publication 
of the public notice in two newspapers, TARATRA  and La Vérité . 
1.5. Expected duration of the measure  
The duration of the definitive safeguard measure is four years, including the period of application o f 
the provisional measure since 1  March  2023.  
1.6. Proposed date for the review (under Article  7.4) 
The review, under Article 7.4 of the Agreement on Safeguards, will be held not later than the mid -
term of the definitive measure.  
1.7. Expected timetable fo r progressive liberalization of the measure  
Period  Additional duty  
1 March 2023 - 31 December 2023  12% 
2024 11.5%  
2025 11% 
1 January 2026 - 28 February 2027  10.5%  
1.8. Adjustment plan  
The domestic industry has submitted an adjustment plan, outlining the actions it intends to take to 
improve its competitiveness in the face of competition from imports. Its adjustment plan is based 
on: increasing production capacity utilization with a view to boosting production volumes; making 
new investments in order to expand its current production capacity; continuing to improve product 
quality; diversifying its sources of raw materials; strengthening its workforce; and continuing to 
integrate new technology.  G/SG/N/8/MDG/10 • G/SG/N/10/MDG/10 • G/SG/N/11/MDG/10/Suppl.1  
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  1.9. Date of prior consultation with those Member s having a substantial interest as 
exporters of the goods  
In accordance with Article 12.3 of the WTO Agreement on Safeguards, Madagascar is prepared to 
hold consultations with those Members having a substantial interest as exporters of the product 
concerne d. 
Requests for consultations should be sent to the Director -General of the ANMCC at the following 
email address: dg.anmcc@gmail.com ; dg@anmcc.mg . 
 
2. NOTIFICATION, UNDER ARTICLE  9, FOOTNOTE  2, OF THE AGREEMENT ON 
SAFEGUARDS, OF NON -APPLICATION OF A SAFEGUARD MEASURE TO DEVELOPING 
COUNTRIES  
2.1. Description of the measure  
The definitive safeguard measure will take the form of an additional ad valorem  duty of 12% of the 
c.i.f. value.  
2.2. Products subject to the measure  
The product subject to the safeguard measure is flour, imported under the Harmonized System code 
1101000,  entitled  "Wheat or meslin flour" of Madagascar's customs tariff.  
2.3. Developing countries to which the measure is not applied under Article 9.1 of the 
Agreement on Safeguards  
Afghanistan; Albania; Angola; Antigua and Barbuda; Argentina, Armenia; Bahrain ; Bangladesh; 
Barbados; Belize; Benin; Bolivia, Plurinational State of; Botswana; Brazil; Brunei Darussalam; 
Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Central African Republic; Chad; Chile; 
Colombia; Congo; Costa Rica; Côte d'Ivoire; Cuba; Dem ocratic Republic of the Congo; Djibouti; 
Dominica; Dominican Republic; Ecuador; El Salvador; Eswatini; Fiji; Gabon; Gambia; Georgia; 
Ghana; Grenada; Guatemala; Guinea; Guinea -Bissau; Guyana; Haiti; Honduras; Indonesia; Israel; 
Jamaica; Jordan; Kazakhstan; Kenya; Kuwait; Kyrgyz Republic; Lao People's Democratic Republic; 
Lesotho; Liberia; Malawi; Malaysia; Maldives; Mali; Mauritania; Mauritius; Mexico; Moldova; 
Mongolia; Montenegro; Morocco; Mozambique; Myanmar; Namibia; Nepal; North Macedonia; 
Nicaragua; Ni ger; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; Philippines; 
Qatar; Rwanda; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Samoa; 
Saudi  Arabia; Senegal; Seychelles; Sierra Leone; Solomon Islands; South Africa; Sri Lank a; 
Suriname; Tajikistan; Tanzania; Thailand; Togo; Tonga; Trinidad and Tobago; Tunisia; Uganda; 
Ukraine; United Arab Emirates; Uruguay; Vanuatu; Venezuela, Bolivarian Republic of; Viet Nam; 
Yemen; Zambia; Zimbabwe.  
2.4. Further information  
Information on the decision to apply the definitive safeguard measure to the products concerned 
may be obtained from:  
Monsieur Le Directeur Général de l'ANMCC  
Enceinte Ex -Conquête Antanimena, Antananarivo 101, Madagascar  
Tel.: +261 34 05  441 41  
Email:  dg.anmcc@gmail.com  / dg@anmcc.mg  
Website:  www.anmcc.mg  
 
__________  