Madagascar

Blankets and Travelling Rugs

Supplement

The following communication, dated and received on 6 October 2025, is being circulated at the request of the delegation of Madagascar.

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Pursuant to Article 12.5 of the Agreement on Safeguards, Madagascar hereby notifies the results of the mid-term review of the safeguard measure concerning imports of blankets and travelling rugs.

1.     Specify the measure and the product subject to the measure for which the mid-term review was conducted, and provide reference to the WTO document that notified the safeguard measure subject to the review.

The mid-term review concerns the safeguard measure applied to imports of blankets and travelling rugs classified under the following headings of the Malagasy customs tariff nomenclature: 63011000, 63012000, 63013000, 63014000, 63019000 and 63090030.

The application of this safeguard measure was notified to the WTO in document _G/SG/N/10/MDG/2/Suppl.1 - _G/SG/N/11/MDG/2/Suppl.3.

2.     Provide the dates of initiation and conclusion of the review.

The review investigation was initiated on 13 March 2025.

3.     Describe the results of the review, providing some detail on the basis for reaching those results.

(a)    Import trends over the safeguard application period

i.     Import trends in absolute terms

Although imports of blankets and travelling rugs remained stable between 2022 and 2023, they more than doubled in 2024, to 235 index points, compared with 2022.

ii.    Import trends in relative terms

Relative to the volume of domestic production, imports of blankets and travelling rugs continue to grow at an alarming rate. The gap between the volume of imports and the volume of domestic production widened steadily throughout the period under review. By 2022, imports already far exceeded local production. The imbalance has since worsened: the import/production ratio increased by 26 points in 2023 compared with the previous year, then shot up by 306 points in 2024 compared with 2022, showing a major imbalance.

(b) Indicators

i.     Domestic consumption

Domestic consumption remained stable in 2023 before increasing substantially in 2024. After a slight decrease of 2 index points in 2023, it jumped by 135 points the following year. Consequently, domestic consumption more than doubled between 2022 and 2024, increasing by 133 index points over the whole period. This suggests that the growth in domestic demand was fully met by imports.

ii.    Market share taken by imports

During the review period, imports held a particularly large market share. Imports largely dominated the local market for blankets and travelling rugs. Over the past three years, they have covered almost all domestic demand, representing on average around 99% of market share, leaving domestic production with a tiny share of around 1%. Its share plummeted by 73 index points between 2022 and 2024.

iii.   Production

Domestic production of blankets and travelling rugs has deteriorated significantly in recent years. In 2023, the production index fell from 100 to 78 compared with 2022, down 22 points. This decline worsened in 2024, with a further drop of 20 points compared with the previous year. In total, domestic production has almost halved. This negative trend has had a significant impact on production costs, indicating an accelerated weakening of industry performance.

iv.   Sales

Despite increasing domestic demand, the sales volume of locally produced blankets and travelling rugs plummeted between 2022 and 2024. Domestic industry sales fell by 31 index points in 2023, followed by a further decline of 5 index points in 2024 compared with the previous year. This amounts to a total drop of 36 index points between 2022 and 2024, confirming the considerable difficulties local producers have in selling their goods on the Malagasy market, despite an apparent market opportunity.

v.    Production capacity utilization rate

Faced with growing domestic demand, the blanket and travelling rug industry has invested in new equipment, increasing production capacity by 60 index points over the past three years. However, despite these investments, production volume has plummeted, leading to a drop in the production capacity utilization rate. The average utilization rate was only 13% during the review period. The production capacity utilization rate fell by 51 index points in 2023, followed by a further 13 points in 2024. This continuing decline is a concern for the survival of the domestic industry.

vi.   Employment

The number of employees declined steadily between 2022 and 2024. In 2023, the workforce shrank by 33 index points. Between 2022 and 2024, the total decrease amounted to 35 index points. A shrinking workforce is indicative of a troubled domestic industry.

vii.  Productivity

The productivity of the blanket and travelling rug industry has fluctuated over the past three years. Although it initially increased by 17 index points, mainly due to a significant reduction in the workforce, this trend did not continue. In 2024, productivity fell by 28 index points compared with the previous year, due to the sharp decline in production volume.

viii. Inventory

Despite the decrease in the volume of domestic production in 2023, the inventory volume rose by 33 index points. In 2024, the inventory recorded a slight decline of 2 index points compared with the previous year. Nonetheless, it remains well above 2022 levels, by 31 index points.

ix.   Profitability

The drop in sales, the build-up of inventory and the low production capacity utilization rate of the domestic blanket and travelling rug industry have had a significant impact on costs and profitability over the past three years. Since 2023, the industry has been unable to cover its costs, and recorded continuous losses in 2024. This is not just a negative shift: it is a sharp deterioration with major losses. This decline considerably weakens the domestic industry's performance and seriously undermines its medium-term viability.

(c)  Conclusion of mid-term review

Analysis of the state of the domestic blanket and travelling rug industry reveals a very critical and persistent situation, marked by a significant and continuous overall deterioration in performance between 2022 and 2024. Most key indicators showed a sharp and persistent decline.

Even after the renewal of the safeguard measure, the outcomes have been largely unsatisfactory. The domestic industry continues to face strong pressure from imports on the domestic market. Accordingly, in order for the domestic industry to continue its recovery, it is essential that the current safeguard measure remain in place, with some adjustments relating to the change in tariff line.

4.     Indicate whether:

i.        the measure has been, or will be, withdrawn as a result of the review. If yes, then indicate the date of withdrawal; and,

The existing safeguard measure concerning imports of blankets and travelling rugs is to remain in place.

ii.       the pace of liberalization has been, or will be, increased as a result of the review. If yes, then indicate the revised timetable for progressive liberalization.

The pace of liberalization has not been modified.

In accordance with Article 9.1 of the Agreement on Safeguards, the measure shall not be applied to imports of blankets and travelling rugs originating in the following developing country Members of the WTO:

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; Democratic 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; India; 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; Nicaragua; Niger; North Macedonia; Oman; 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 Lanka; Suriname; Tajikistan; Tanzania; Thailand; Togo; Tonga; Trinidad and Tobago; Tunisia; Türkiye; Uganda; Ukraine; United Arab Emirates; Uruguay; Vanuatu; Venezuela, Bolivarian Republic of; Viet Nam; Yemen; Zambia; Zimbabwe.

Additional information and comments should be sent to the following address:

Monsieur Le Directeur Général de l'ANMCC

Bâtiment Maison des Produits 67 Ha 101 - ANTANANARIVO – MADAGASCAR

Tel.: (+261) 34 05 441 41

Website: ANMCC

Email: dg.anmcc@gmail.com; dg@anmcc.mg

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