Safeguard Measures under World Trade Organization (WTO)

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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 industry.
These actions are intended to prevent or mitigate serious injury to the member state’s 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 injuryto a competing domestic industry;
- That they (generally) beapplied 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.

Q1: What is Anti-Dumping Duty?

Anti-dumping duty is a tariff imposed on imports manufactured in foreign countries that are priced below the fair market value of similar goods in the domestic market. The government imposes anti-dumping duty on foreign imports when it believes that the goods are being “dumped” – through the low pricing – in the domestic market. Anti-dumping duty is imposed to protect local businesses and markets from unfair competition by foreign imports. The use of anti-dumping measures as an instrument of fair competition is permitted by the World Trade Organization (WTO).

Source: India, other WTO members criticise EU, UK on steel safeguard measures