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 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