A Study on Safeguards Agreement of the WTO

This article examines the Agreement on Safeguards sets forth the rules for the application of safeguard measures pursuant to Article XIX of GATT 1994. Safeguard measures are defined as “emergency” actions with respect to increased imports of particular products, where such imports have caused or threaten to cause serious injury to the importing Member's domestic industry. Safeguard measures, which in broad terms take the form of suspension of concessions or obligations, can consist of quantitative import restrictions or of duty increases to higher than bound rates. The main guiding principles of Safeguard Agreement with respect to safeguarding measures are that such measures must be temporary; that they may be imposed only when imports are found to cause or threaten serious injury to a competing domestic industry; that they be applied on a nonselective (i.e., or “MFN”, basis); that they be progressively liberalized while in effect; and that the Member imposing them must pay compensation to the Members whose trade is affected. The Safeguard Agreement was negotiated in large part because GATT Contracting Parties increasingly had been applying a variety of socalled “grey area” measures (bilateral voluntary export restraints, orderly marketing agreements, and similar measures) to limit imports of certain products. These measures were not imposed pursuant to Article XIX, and thus were not subject to multilateral discipline through the GATT, and the legality of such measures under the GATT was doubtful. The Agreement now clearly prohibits such measures and has specific provisions for eliminating those that were in place at the time the WTO Agreement entered into force. Safeguard Agreement explicitly applies equally to all Members, aims to: (1) clarify and reinforce GATT disciplines, particularly those of Article XIX; (2) re-establish multilateral control over safeguards and eliminate measures that escape such control; and (3) encourage structural adjustment on the part of industries adversely affected by increased imports, thereby enhancing competition in international markets