ITL WTOeguards.PPT

8/22/2019 ITL WTOeguards.PPT

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Trade RemediesTrade Remedies

SafeguardsSafeguards

International Trade Law

Atty. Ever Higuit


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Overview and Purpose of the Safeguard LawOverview and Purpose of the Safeguard Law

Article XIX of GATT 1994 (the "Escape Clause")Article XIX of GATT 1994 (the "Escape Clause")

allows WTO Members to provide temporaryallows WTO Members to provide temporary

protection to domestic industries facingprotection to domestic industries facing

increased import competition.increased import competition.

This temporary protection is known asThis temporary protection is known as

"safeguards"safeguards".".

The Safeguard Agreement sets forth specificThe Safeguard Agreement sets forth specificprocedures for implementing Article XIX.procedures for implementing Article XIX.

http://www.wto.org


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Measures Purpose of SafeguardMeasures Purpose of Safeguard

The purpose of safeguard measures is to prevent anThe purpose of safeguard measures is to prevent an

emergence of injury incurred from increased imports.emergence of injury incurred from increased imports.

Safeguard measures afford domestic companiesSafeguard measures afford domestic companies

time totime to

improve their position relative to the importsimprove their position relative to the imports

shift their resources to other fieldsshift their resources to other fields

http://www.wto.org


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Definition of Domestic IndustryDefinition of Domestic Industry

Domestic industry means:Domestic industry means:

Domestic producers of as a whole of the like or directlyDomestic producers of as a whole of the like or directly

competitive products; orcompetitive products; or

Domestic producers of like or directly competitive products, ofDomestic producers of like or directly competitive products, of

which combined output constitutes a major proportion of the totalwhich combined output constitutes a major proportion of the total

production of the domestic industry.production of the domestic industry.

Like product means:Like product means:

Products which are identical in all respects; orProducts which are identical in all respects; or

Products whose characteristics significantly resemble those ofProducts whose characteristics significantly resemble those of

imported productsimported products..

http://www.wto.org


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Increased ImportsIncreased Imports

Safeguard measures may be applied only when aSafeguard measures may be applied only when aproduct is being imported in such increasedproduct is being imported in such increased

quantities and under such conditions as to cause orquantities and under such conditions as to cause or

threaten to cause serious industry to the domesticthreaten to cause serious industry to the domestic

industry.industry.

The increased quantity warranting a safeguardThe increased quantity warranting a safeguard

measure may be either an absolute increase or anmeasure may be either an absolute increase or an

increase relative to domestic production.increase relative to domestic production.

http://www.wto.org


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Serious Injury or Threat of Serious InjurySerious Injury or Threat of Serious Injury

Serious injury means a significant overall impairmentSerious injury means a significant overall impairment

of the position of a domestic industry.of the position of a domestic industry.

Threat of serious injury means a serious injury that isThreat of serious injury means a serious injury that is

clearly imminent.clearly imminent.

Determinations of the existence of threat must beDeterminations of the existence of threat must be

based on facts and not on conjecture or remotebased on facts and not on conjecture or remote

possibility.possibility.

http://www.wto.org


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Criteria for Assessing Injury and Threat of InjuryCriteria for Assessing Injury and Threat of Injury

All relevant factors of an objective and quantifiableAll relevant factors of an objective and quantifiable

nature must be considered.nature must be considered.

The Safeguard Agreement provides an illustrative listThe Safeguard Agreement provides an illustrative list

of the relevant factors:of the relevant factors:

rate and amount of the increase in imports of therate and amount of the increase in imports of theproduct concerned in absolute or relative terms,product concerned in absolute or relative terms,

share of the domestic market taken by theshare of the domestic market taken by the

increased imports, andincreased imports, and

changes in the level of sales, production,changes in the level of sales, production,productivity, capacity utilization, profits and losses,productivity, capacity utilization, profits and losses,

and employment.and employment.

http://www.wto.org


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CausalityCausality

Safeguard measures are not permitted unlessSafeguard measures are not permitted unless

there is a finding of the existence of a causal linkthere is a finding of the existence of a causal link

between the increased imports of the productbetween the increased imports of the product

concerned and the serious injury of threat thereofconcerned and the serious injury of threat thereof

to the domestic industry.to the domestic industry.

If factors other than the increased imports areIf factors other than the increased imports are

causing simultaneous injury to the domesticcausing simultaneous injury to the domestic

industry, the injury from such other factors mayindustry, the injury from such other factors may

not be attributed to the increased imports.not be attributed to the increased imports.

http://www.wto.org


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Primary Safeguard RemediesPrimary Safeguard Remedies

Two primary safeguard remedies:Two primary safeguard remedies:

Quantitative import restrictions (e.g., importQuantitative import restrictions (e.g., import

quotas), andquotas), and

Increased import duties.Increased import duties.

http://www.wto.org


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Quantitative RestrictionsQuantitative Restrictions

Quantitative import restrictions normally must be limited toQuantitative import restrictions normally must be limited to

restricting only the injurious imports.restricting only the injurious imports.

A measure shall not reduce the quantity of imports belowA measure shall not reduce the quantity of imports below

the level of a recent period which shall be the average ofthe level of a recent period which shall be the average of

imports in the last three representative years.imports in the last three representative years.

If there were no imports during the past three years,If there were no imports during the past three years,

available statistics should be used.available statistics should be used.

This requirement may be ignored only when there is clearThis requirement may be ignored only when there is clear

justification that a different level (i.e., lower than the pre-justification that a different level (i.e., lower than the pre-

import surge level) is necessary to prevent or remedy seriousimport surge level) is necessary to prevent or remedy seriousinjury.injury.

http://www.wto.org


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Import QuotasImport Quotas

Safeguard measures shall be applied to a productSafeguard measures shall be applied to a product

being imported irrespective of its sourcebeing imported irrespective of its source

If achievable, an agreement with all exportingIf achievable, an agreement with all exporting

countries regarding the allocation of shares of thecountries regarding the allocation of shares of the

import quota should be reached.import quota should be reached.

If such an agreement is not reasonable practicable orIf such an agreement is not reasonable practicable or

exporting countries cannot agree to a quotaexporting countries cannot agree to a quota

allocation, the exporting countries should receive aallocation, the exporting countries should receive a

quota share proportional to the total value or volumequota share proportional to the total value or volumeof their shipments during a previous representativeof their shipments during a previous representative

period.period.

http://www.wto.org
http://www.wto.org/http://www.wto.org/


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"Degressivity" Requirement"Degressivity" Requirement

If the expected duration of a safeguard measure isIf the expected duration of a safeguard measure isover one year, the measure shall be liberalizedover one year, the measure shall be liberalized

progressively at regular intervals during the periodprogressively at regular intervals during the period

of application.of application.

If the expected duration of a safeguard measureIf the expected duration of a safeguard measureexceeds three years, the measure must beexceeds three years, the measure must be

reviewed not later than the mid-term of thereviewed not later than the mid-term of the

measure.measure.

If appropriate, the measure should beIf appropriate, the measure should bewithdrawn or the pace of liberalization shouldwithdrawn or the pace of liberalization should

be increased.be increased.

The A reement does not rescribe the extent orThe A reement does not rescribe the extent orhttp://www.wto.org


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Duration of Safeguard MeasuresDuration of Safeguard Measures

Safeguard measures may be imposed onlySafeguard measures may be imposed onlyfor such period as may be necessary.for such period as may be necessary.

The initial period of a safeguard measureThe initial period of a safeguard measure

may not exceed four years.may not exceed four years.

A safeguard measure may be extended ifA safeguard measure may be extended if

such measure continues to be necessarysuch measure continues to be necessary

to prevent or remedy serious injury; andto prevent or remedy serious injury; and

there is evidence that the industry isthere is evidence that the industry is

adjusting.adjusting.http://www.wto.org


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Duration of Safeguard MeasuresDuration of Safeguard Measures

The total period for a safeguard measureThe total period for a safeguard measure

(including the period of any provisional(including the period of any provisional

measure) imposed by non-developingmeasure) imposed by non-developing

country WTO Members shall not exceedcountry WTO Members shall not exceed

eight years.eight years.

The Safeguard Agreement permitsThe Safeguard Agreement permits

developing countries to impose safeguarddeveloping countries to impose safeguard

measures for periods up to ten years.measures for periods up to ten years.

http://www.wto.org


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Limitations on the Reimposition ofLimitations on the Reimposition ofSafeguard MeasuresSafeguard Measures

After a safeguard measure is terminated, a newAfter a safeguard measure is terminated, a newmeasure cannot be imposed again immediately.measure cannot be imposed again immediately.

Generally, a new safeguard measure may beGenerally, a new safeguard measure may be

imposed until a period equal to half of the timeimposed until a period equal to half of the time

period for which the original measure was in effectperiod for which the original measure was in effecthas elapsed and the period of non-application washas elapsed and the period of non-application was

at least two years.at least two years.

Note that for non-developing countries thisNote that for non-developing countries this

period is equal to the time period for which theperiod is equal to the time period for which the

original measure was in effect.original measure was in effect.

http://www.wto.org


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Limitations on the Reimposition ofLimitations on the Reimposition ofSafeguard MeasuresSafeguard Measures

If the original safeguard measure was 180 days orIf the original safeguard measure was 180 days orless, a new safeguard measure may be imposedless, a new safeguard measure may be imposed

if:if:

at leased one year has elapsed since the dateat leased one year has elapsed since the dateof introduction of the safeguard measure; andof introduction of the safeguard measure; and

a safeguard measure has not been applied ona safeguard measure has not been applied on

the same product more than twice in the fivethe same product more than twice in the five

year period immediately preceding the date ofyear period immediately preceding the date ofthe introduction of the measure.the introduction of the measure.

http://www.wto.org


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The Price of Safeguard Measures: CompensationThe Price of Safeguard Measures: Compensation

Unlike antidumping measures or countervailing dutyUnlike antidumping measures or countervailing duty

measures, WTO Members imposing safeguard measuresmeasures, WTO Members imposing safeguard measures

must compensate the affected exporting countries.must compensate the affected exporting countries.

The relevant WTO Members may agree on any adequateThe relevant WTO Members may agree on any adequate

means of trade compensation to compensate for themeans of trade compensation to compensate for the

adverse affects of the safeguard measure.adverse affects of the safeguard measure.

If no agreement is achieved with 30 days of consultations,If no agreement is achieved with 30 days of consultations,

the affected country may unilaterally suspend thethe affected country may unilaterally suspend the

application of substantially equivalent concessions or otherapplication of substantially equivalent concessions or other

WTO obligations with respect to the country imposing theWTO obligations with respect to the country imposing thesafeguard measure to compensate for the adverse affectssafeguard measure to compensate for the adverse affects

of the safeguard measure.of the safeguard measure.

http://www.wto.org


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The Price of Safeguard Measures: CompensationThe Price of Safeguard Measures: Compensation

There is a three year suspension of theThere is a three year suspension of thecollection of compensation or retaliation incollection of compensation or retaliation in

cases where the safeguards are based on ancases where the safeguards are based on an

absolute increase in imports.absolute increase in imports.

Where the safeguards are based on aWhere the safeguards are based on a

relative increase, the affected WTOrelative increase, the affected WTO

Member may seek compensationMember may seek compensation

immediately.immediately.

http://www.wto.org


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ProceduresProcedures

Who may file a petition for safeguardWho may file a petition for safeguard

measures?measures?

http://www.tariffcommission.gov.ph/

Domestic producersDomestic producers

The President, or the House or Senate Committee onThe President, or the House or Senate Committee on

Agriculture, or the House or Senate Committee on TradeAgriculture, or the House or Senate Committee on Trade

and Commerceand Commerce

The DTI or DA Secretary, motu proprioThe DTI or DA Secretary, motu proprio

Any person, whether natural or juridicalAny person, whether natural or juridical

The DA Secretary may, motu proprioThe DA Secretary may, motu proprio


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Who may file a petition for safeguardWho may file a petition for safeguard

measures?measures?


Domestic producersDomestic producers

The President, or the House or Senate Committee onThe President, or the House or Senate Committee on

Agriculture, or the House or Senate Committee on Trade andAgriculture, or the House or Senate Committee on Trade and

CommerceCommerce The DTI or DA Secretary, motu proprioThe DTI or DA Secretary, motu proprio

Any person, whether natural or juridicalAny person, whether natural or juridical

The DA Secretary may, motu proprioThe DA Secretary may, motu proprio


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Philippine Legislation on Safeguard MeasuresPhilippine Legislation on Safeguard Measures

Republic Act No. 8800, otherwise known as theRepublic Act No. 8800, otherwise known as theSafeguard Measures Act provides for:Safeguard Measures Act provides for:

general safeguard measures to relieve domesticgeneral safeguard measures to relieve domestic

industries suffering from serious injury as a result ofindustries suffering from serious injury as a result ofincreased importsincreased imports



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Where to file a petition for safeguardWhere to file a petition for safeguard

measures?measures?


Prima FaciePrima Facie DeterminationDetermination

Preliminary DeterminationPreliminary Determination

Formal InvestigationFormal Investigation

DecisionDecision

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ITL WTOeguards.PPT