Safeguard Measures under World Trade Organization (WTO)

April 23, 2024

India and some other nations have criticized the EU for deciding against terminating its safeguard measure on imports of certain steel products after carrying out a review.

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.