The WTO Agreement on Safeguards enables member countries to impose temporary import restrictions to safeguard their domestic industries from significant harm caused by increased imports.
About WTO Agreement on Safeguards:
- The WTO Agreement on Safeguards allows member countries to temporarily impose restrictions on imports of a product if they threaten to seriously harm their domestic industry.
- This measure is crucial for protecting local businesses under specific circumstances.
Key Features of the Agreement
- The agreement bans grey-area measures such as voluntary export restraints that are often settled through bilateral negotiations.
- Any safeguard action must be temporary, generally not exceeding four years, but it can be extended up to eight years if necessary.
Safeguard Measures
- These are emergency actions taken to shield domestic industries from significant harm due to increasing imports.
- The measures might include imposing import restrictions or higher duties.
- Unlike anti-dumping or countervailing measures, there is no requirement to prove any ‘unfair’ trading practices.
- The three main types of trade protection under WTO are safeguards, anti-dumping, and countervailing measures.
Guiding Principles for Implementation
- Safeguards can only be imposed when imports are causing or are likely to cause serious injury to the domestic industry.
- ‘Serious injury’ is specifically defined as a considerable degradation in the domestic industry’s position.
- To determine the presence of serious injury, all relevant factors must be evaluated thoroughly.
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