( ) Page: 1/8 NOTIFICATION PURSUANT TO ARTICLE 12.1(C) OF THE AGREEMENT ON SAFEGUARDS

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1 G/SG/N/8/THA/3 G/SG/N/10/THA/3 G/SG/N/11/THA/4 15 January 2015 ( ) Page: 1/8 Committee on Safeguards Original: English NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON SAFEGUARDS ON FINDING 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 THAILAND (Non Alloy Hot Rolled Steel Flat Products in Coils and Not in Coils) The following communication, dated 13 January 2015, is being circulated at the request of the Delegation of Thailand. Pursuant to Article 12.1(b), 12.1(c) and 9, footnote 2 of the Agreement on Safeguards, Thailand hereby submits notification to the Committee on Safeguards on findings of serious injury or threat thereof caused by increased imports, on taking the decision to apply definitive safeguard measure, and on taking the decision not to apply the measure to products originating in developing countries. The initiation of the investigation, the imposition of provisional safeguard measures as well as the decision not to apply provisional safeguard measures to non alloy hot rolled steel flat products in coils and not in coils (hereinafter refer to as "the products concerned") originating in or exported from certain developing countries have been notified to the Committee on Safeguards in G/SG/N/6/THA/4 (3 February 2014), G/SG/N/7/THA/3-G/SG/N/11/THA/3 (28 May 2014), G/SG/N/7/THA/3/Suppl.1-G/SG/N/11/THA/3/Suppl.1 (25 September 2014). Consistent with Article 12.2 of the Agreement on Safeguards, this notification contains all pertinent information relating to the decision to apply the definitive safeguard measure on product concerned and the definitive safeguard measure applied. 1 EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED IMPORTS During the period of investigation commencing from 1 January 2010 to 31 December 2013, import volume of the products concerned into Thailand increased significantly both in absolute and relative terms. An evaluation of the overall position of the domestic industry, in the light of almost all the relevant factors, having a bearing on the situation of the Thai domestic industry, shows a significant overall impairment. It was thus concluded that the domestic industry has suffered serious injury in terms of shrinking market share; declining production and domestic sales; underutilizing production capacity and decreasing employment level.

2 - 2-2 INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN IMPORTS OR AN INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION During the period of investigation, the imports of the products concerned into Thailand increased sharply from year to year, in both absolute and relative terms. Absolute Term: Unit: Metric Ton Year Total Import (MT) Change % Change , ,717 43, , , , , In absolute terms, the volume of imports amount of the products concerned increased rapidly throughout the investigation period from 69,489 metric ton in 2010 to 942,291 metric ton in Particularly from 2012 to 2013, the imports increased steeply by %. Relative Term: Unit: Metric Ton Year Total Import (MT) Domestic Production (MT) Import in relation to Domestic Production (%) ,489 3,736, ,717 3,199, ,749 2,874, ,291 2,842, While the imports of the products concerned rose sharply during the investigation period, the domestic production, on the contrary, has shown a steady decline. The table above shows that in relation to the production of domestic industry, the imports of the products concerned rose rapidly from 1.86% in 2010 to 33.15% in EVIDENCE OF SERIOUS INJURY AND THREAT THEREOF A substantive evaluation of the effect of all the relevant factors having a bearing on the situation of the domestic industry has been conducted. It was concluded that the increased imports of the products concerned into Thailand have caused serious injury to the domestic producers as reflected by the following parameters: a. Market Share of Imports Market Share of Imports (%) The market share of imports continuously rose from 1.48% in 2010 to 16.58% in Especially, from 2012 to 2013, it substantially increased from 5% to 16.58%.

3 - 3 - b. Domestic Sales Index form Domestic Sales The sales of domestic industry continuously declined over the period of investigation. In comparison with the sales of 2010, the sales of the domestic industry significantly decreased by 20.6% in 2013, despite the increasing in domestic demand. c. Domestic Production Index form Domestic Production The domestic production has shown a sign of downward trend over the investigation period. It decreased by 24% in 2013 when compared with 2010 as the base year. d. Productivity Index form Productivity (%) There was no significant change in the level of productivity of the domestic industry, but remained relatively stable over the investigation period. e. Capacity Utilization Index form Capacity Utilization (%) Despite high demand of the product concerned in the domestic market, the overall capacity utilization of the domestic industry was relatively low. In comparison with 2010, the capacity utilization continuously decreased to the lowest at 76.6% in 2012 and f. Profit/Loss Index Form Profit/Loss (100) (28) (64) (31) The domestic industry has faced extensive loss over the period of investigation as they were unable to improve capacity utilization as domestic sales continued to decline due to significant increase in imports.

4 - 4 - g. Employment Index Form Employment The level of employment has shown a negative trend over the investigation period. It decreased to 98%, 93% and 88%, respectively, when compared with employment level in h. Inventory ITEM Index Form Inventory Compared with 2010, the level of inventory substantially decreased in 2012 and 2013 as the domestic industry reduced inventory levels corresponding with the decline in production and domestic sales. i. Unforeseen Developments The increase of imports was sudden, sharp and significant in the recent past. Particularly from 2012 to 2013, the import increased steeply by %. This significant increase of imports was attributed to the adverse effect of global economic slowdown resulting from the Euro-Zone crisis and the recession in the United States causing the oversupply of steel products in the countries of major steel producers. Hence, the major steel producers needed to export their products to other possible markets, including Thailand, to absorb the oversupply products available in their home countries and to utilize their excessive capacities. In addition, the significant increase of imports was attributed to the trade diversion due to the imposition of trade remedies measures in various importing countries against several major exporting producers/countries such as India, Chinese Taipei, Russia, Japan and Korea. The shift of product concerned exporting to the markets without such measures was a consequence. This situation can be regarded as an unforeseen development resulting in increase in imports causing serious injury to the domestic industry. 4 PRECISE DESCRIPTION OF THE PRODUCTS CONCERNED The products concerned are non alloy hot rolled steel flat products in coils and not in coils, of a thickness of mm. and a width of ,048.0 mm. The products concerned are currently classified under the Thai Customs Tariff Code at subheadings: , , , , , , , , , , , , , , , , , , , , , , , , , , originating in or exported from various countries. 5 PRECISE DESCRIPTION OF THE PROPOSED MEASURE The definitive safeguard measure is applied in relation to increased imports in order to remedy or prevent the serious injury suffered by the domestic industry. The Committee on Safeguard Measures of Thailand, the competent authority, has recommended imposing the safeguard duty for a period of three years starting from 7 June 2014, i.e., the date when the provisional measure took effect, until 6 June In accordance with the relevant provisions of the Thai Safeguard Measures on Increased Imports Act B.E.2550 (2007), which refer to Thailand's obligations under Article XIX of the GATT and the WTO Agreement on Safeguards, the measure shall be progressively liberalized during the period of their validity as follows:

5 - 5 - Duration Definitive Safeguard Duty 24 December June % of C.I.F. price 7 June June % of C.I.F. price 7 June June % of C.I.F. price The definitive measure will not be applied against the products concerned originating in or exported from any developing country as long as its share of imports of the products concerned into Thailand does not exceed 3%. The list of developing countries excluded from the definitive measure is attached herewith. In addition, the exemptions of the imposition of definitive safeguard measure are granted for i) imports of products classified as special grade steels; ii) imports for the production of spiral pipe products; and iii) imports for export, i.e., imports of products that are intended to be manufactured, further processed or incorporated into a finished product that will be exported from Thailand under the Industrial Estate Authority of Thailand Act; or, the Investment Promotion Act; or, the Customs Act. 6 THE MAJOR EXPORTING MEMBERS OF IMPORTS OF THE PRODUCT INVOLVED The products concerned are mainly imported from Republic of India, Russian Federation, Australia, and Republic of Korea, with the share of imports in 2013 of 33.5%, 15.2%, 13.2% and 12.9% respectively. 7 FURTHER INFORMATION The Final Findings was published in the Thai Government Gazette of Thailand on 22 December 2014.

6 - 6 - ANNEX LIST OF DEVELOPING COUNTRIES AND SEPARATE CUSTOMS TERRITORIES EXCLUDED FROM THE IMPOSITION OF DEFINITIVE SAFEGUARD MEASURE ON NON ALLOY HOT ROLLED STEEL FLAT PRODUCTS IN COILS AND NOT IN COILS No. COUNTRY No. COUNTRY Afghanistan Albania Algeria American Samoa Angola Anguilla Antigua and Barbuda Argentina Armenia Aruba Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belize Benin Bhutan Bolivia (Plurinational State of) Bonaire, Sint Eustatius and Saba Bosnia and Herzegovina Botswana British Virgin Islands Brunei Darussalam Burkina Faso Burundi Cambodia Cameroon Cape Verde Cayman Islands Central African Republic Chad Chile China Colombia Comoros Congo Cook Islands Costa Rica Cote d'ivoire Croatia Cuba Curacao Democratic People's Republic of Korea Democratic Republic of the Congo Djibouti Dominica Dominican Republic Ecuador Egypt El Salvador Equatorial Guinea Eritrea Ethiopia Falkland Islands (Malvinas) Fiji French Polynesia Gabon Gambia Georgia Ghana Grenada Guam Guatemala Guinea Guinea-Bissau Guyana Haiti Honduras Hong Kong, Special Administrative Region of China Indonesia

7 - 7 - No. COUNTRY No. COUNTRY Iraq Iran (Islamic Republic of) Jamaica Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Lao People's Democratic Republic Lebanon Lesotho Liberia Libya Macao, Special Administrative Region of China Madagascar Malawi Malaysia Maldives Mali Marshall Islands Mauritania Mauritius Mexico Micronesia (Federated States of) Mongolia Montenegro Montserrat Morocco Mozambique Myanmar Namibia Nauru Nepal New Caledonia Nicaragua Niger Nigeria Niue Northern Mariana Islands Oman Pakistan Palau Panama Papua New Guinea Paraguay Peru Philippines Qatar Republic of Moldova Rwanda Saint Helena Saint Kitts and Nevis Saint Lucia Saint Vincent and the Grenadines Samoa Sao Tome and Principe Saudi Arabia Senegal Serbia Seychelles Sierra Leone Singapore Sint Maarten (Dutch part) Solomon Islands Somalia South Africa South Sudan Sri Lanka State of Palestine Sudan Suriname Swaziland Syrian Arab Republic Tajikistan The former Yugoslav Republic of Macedonia Timor-Leste Togo Tokelau Tonga

8 - 8 - No. COUNTRY No. COUNTRY Trinidad and Tobago Tunisia Turkmenistan Turks and Caicos Islands Tuvalu Uganda Ukraine United Arab Emirates United Republic of Tanzania Uruguay Uzbekistan Vanuatu Venezuela (Bolivarian Republic of) Viet Nam Wallis and Futuna Islands Western Sahara Yemen Zambia Zimbabwe