The Agreement on Safeguards: use of the instrument, problem areas, and proposals for change

The Agreement on Safeguards: use of the instrument, problem areas, and proposals for change

Published Jan 2004

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The WTO Agreement on Safeguards is in need of revision

The use of safeguards has been steadily increasing since the Agreement of Safeguards (ASG) entered into force in 1995. All safeguard measures that to date have been brought before dispute settlement in the WTO have been found to be inconsistent with the ASG. The reasons for this differ, but include:

  • not observing the requirement of parallelism - i.e. including certain countries in determining the increase in imports while excluding the same countries from the actual measure
  • not showing that the increase in imports has been recent, sudden and sharp enoug h so as to cause serious injury
  • not describing what unforeseen developments caused the increase in imports and not verifying the link between imports and injury.

The Appellate Body has to some extent tackled many of these problems and clarified the agreement on several points. Yet, some problem areas remain with the agreement, including the use of discriminatory safeguards, as well as establishing a link between imports and injury. The paper finally offers some suggestions as to how the agreement could be further clarified and improved:

  • include the ASG in the Doha negotiations
  • allow for safeguards only to avoid effects of liberalisation undertaken in the WTO-context
  • allow for RTA/FTA partners only to be excluded from a safeguard measure when the measure is imposed for the regional trade area as a whole, and under no other circumstances
  • remove the possibility to use discriminatory quotas
  • the increase in imports should be the most significant cause of injury
  • the attribution of causes to injury needs to be refined
  • a safeguard measure should only be allowed to the extent needed to remedy the injury caused by imports, and not injury caused by other factors
  • quantitative restrictions should only be allowed if quotas are freely transferable
  • antidumping and countervailing measures against products, which have enjoyed a safeguard should be prohibited for a certain number of years after the safeguard has been withdrawn
  • a limit to the tariff safeguard should be introduced
  • introduce a compulsory public interest test.

[adapted from author]

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