Safeguard Measures under World Trade Organization (WTO)

About Safeguard Measures:

• Safeguard measures are measures introduced by a country that qualify as “emergency” actions under the WTO Agreement on Safeguards.
• A WTO member may take a “safeguard” action (i.e., restrict imports of a product temporarily) under the WTO Agreement on Safeguards to protect a specific domestic industry from an increase in imports of any product which is causing, or which is threatening to cause, serious injury to the domestic industry.
• Such measures, which in broad terms take the form of suspension of concessions or obligations, can consist of quantitative import restrictions or duty increases to higher than bound rates.
• They are one of three types of contingent trade protection measures, along with anti-dumping and countervailing measures, available to WTO members.
• The guiding principles of the agreement with respect to safeguard 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 (generally) be applied on a non-selective (i.e., most-favoured-nation, or “MFN”) basis;
  • that they be progressively liberalized while in effect;
  • and that the member imposing them (generally) must pay compensation to the members whose trade is affected.
• Thus, safeguard measures, unlike anti-dumping and countervailing measures, do not require a finding of an “unfair” practice.
• The agreement defines “serious injury” as a significant overall impairment in the position of a domestic industry.
  • In determining whether serious injury is present, investigating authorities are to evaluate all relevant factors having a bearing on the condition of the industry.