Agreement on Safeguards of WTO: An Overview
The World Trade Organization (WTO) has an agreement on safeguards, which is a protectionist measure that can be used by its member countries when their domestic industries are threatened by sudden surges in imports. The agreement is intended to provide a legal framework for the use of safeguard measures, which are temporary and transitional in nature.
The agreement defines a safeguard measure as an action taken to address increased imports that are causing or threatening to cause serious injury to the domestic industry concerned. The measure could take the form of a tariff increase, a quantitative restriction, or any other measure that would effectively limit the quantity or value of imports.
The agreement sets out the conditions under which a safeguard measure can be taken, including the requirement that the increased imports must be a result of unforeseen developments and that they must be causing serious injury to the domestic industry. The measure must be taken in a non-discriminatory manner and must not be used as a means of arbitrary or unjustified discrimination.
The agreement also provides for the procedures that must be followed when a safeguard measure is imposed. These include notification to the WTO and consultations with affected member countries. The measure must also be transparent and subject to review at regular intervals.
The agreement states that safeguard measures should be temporary and that they should be removed as soon as the conditions that gave rise to them no longer exist. The measure should also be phased out gradually to allow the affected industry to adjust to the increased competition.
The agreement on safeguards is an important part of the rules-based system of international trade that the WTO promotes. It allows member countries to take measures to protect their domestic industries when necessary, while ensuring that these measures are subject to certain conditions and procedures that promote transparency and non-discrimination.
In conclusion, the agreement on safeguards of WTO is an essential tool for member countries when they face a sudden surge in imports that threatens their domestic industry. The agreement provides a legal framework for the use of safeguard measures that are temporary and transitional in nature. The conditions and procedures set out in the agreement promote transparency and non-discrimination, while ensuring that the measures are subject to review and phased out gradually.