Investigative Requirements
New safeguard measures may be applied only following an investigationconducted by competent authorities pursuant to previously published procedures. Although the Agreement does not contain detailed procedural requirements, it does require reasonable public notice of the investigation, and that interested parties (importers, exporters, producers, etc.) be given the opportunity to present their views and to respond to the views of others. Among the topics on which views are to be sought is whether or not a safeguard measure would be in the public interest. The relevant authorities are obligated to publish a report presenting and explaining their findings on all pertinent issues, including a demonstration of the relevance of the factors examined. The Agreement also contains specific rules for the handling of confidential information in the context of an investigation.
Factual Basis for Determination of Serious Injury or Threat Thereof
The Agreement defines “serious injury” as significant impairment in the position of a domestic industry. “Threat of serious injury” is threat that is clearly imminent as shown by facts, and not based on mere allegation, conjecture or remote possibility. A “domestic industry” is defined as theproducers as a whole of the like or directly competitive productsoperating within the territory of a Member, or producers who collectively account for a major proportion of the total domestic production of those products.
In determining whether serious injury or threat is present, investigating authorities are to evaluate all relevant factors having a bearing on the condition of the industry, and are not to attribute to imports injury caused by other factors. Factors that must be analyzed are the absolute and relative rate and amount of increase in imports, the market share taken by the increased imports, and changes in level of sales, production, productivity, capacity utilization, profits and losses, and employment of the domestic industry.
Application of Measures
Safeguard measures may only be applied to the extent necessary to remedy or prevent serious injury and to facilitate adjustment, within certain limits. If the measure takes the form of a quantitative restriction, the level must not be below the actual import level of the most recent three representative years, unless there is clear justification for doing otherwise. Rules also apply as to how quota shares are to be allocated among supplier countries, as to compensation to Members whose trade is affected, and as to consultations with affected Members.
The maximum duration of any safeguard measure is four years, unless it is extended consistent with the Agreement's provisions. In particular, a measure may be extended only if its continuation is found to be necessary to prevent or remedy serious injury, and only if evidence shows that theindustry is adjusting.
The initial period of application plus any extension normally cannot exceed eight years. In addition, safeguard measures in place for longer than one year must be progressively liberalized at regular intervals during the period of application. If a measure is extended beyond the initial period of application, it can be no more restrictive during this period than it was at the end of the initial period, and it should continue to be liberalized.
Any measure of more than three years duration must be reviewed at mid-term. If appropriate based on that review, the Member applying the measure must withdraw it or increase the pace of its liberalization.
Under critical circumstances, defined as circumstances where delay would cause damage that would be difficult to repair, provisional measures may be imposed. Such measures may be in the form of tariff increases only, and may be kept in place for a maximum of 200 days. In addition, the period of application of any provisional measure must be included in the total period of application of a safeguard measure.
Repeated application of safeguards with respect to a given product is limited by the Agreement. Ordinarily, a safeguard may not be applied again to a product until a period equal to the duration of the original safeguard has elapsed, so long as the period of non-application is at least two years.
Nonetheless, if a new safeguard measure has a duration of 180 days or less, it may be applied so long as one year has elapsed since the date the original safeguard measure was introduced, and so long as no more than two safeguard measures have been applied on the product during the five years immediately preceding the date of introduction of the new safeguard measure.
Concessions and Other Obligations
In applying a safeguard measure, the Member must maintain a substantially equivalent level of concessions and other obligations with respect to affected exporting Members. To do so, any adequate means of trade compensation may be agreed with the affected Members. Absent such agreement, the affected exporting Members individually may suspend substantially equivalent concessions and other obligations. This latter right cannot be exercised during the first three years of application of a safeguard measure if the measure is taken based on an absolute increase in imports, and otherwise conforms to the provisions of the Agreement.
Developing Country Members
Developing country Members receive special and differential treatment with respect to other Members' safeguard measures, and with respect to applying their own such measures. A safeguard measure shall not be applied to low volume imports from developing country Members, that is, where a single developing country Member's products account for no more than 3 percent of the total subject imports, as long as products originating in those low-import-share developing country Members collectively do not exceed 9 percent of imports.
In applying safeguard measures, developing country Members may extend the application of a safeguard measure for an extra two years beyond that normally permitted. In addition, the rules for re-applying safeguard measures with respect to a given product are relaxed for developing country Members.
Rules governing pre-existing measures (applied before the WTO's entry into force) Back to top
Pre-existing measures imposed pursuant to GATT Article XIX that were in effect at the time of the WTO Agreement's entry into force are to be terminated no later than eight years after they were first applied, or five years after the entry into force of the WTO Agreement, whichever comes later.
Pre-existing “grey area” measures that were in effect at the time of the WTO's entry into force are to be brought into conformity with the SG Agreement or phased out — pursuant to timetables to have been presented to the SG Committee by 30 June 1995 — within four years of the WTO's entry into force (i.e., by December 31, 1998). Although all Members had the right to an exception with respect to a single specific measure, whereby they would have had until December 31, 1999 for the required phase-out, no Member other than the EC (whose single exception is contained in the Annex to the Agreement itself) exercised this option.
Multilateral surveillance and institutions Back to top
Multilateral oversight of the use of safeguard measures is conducted through notification requirements, as well as through the creation of aCommittee on Safeguards charged with reviewing safeguard notifications, among other duties.
Members are required to notify the Committee of initiations of investigations into the existence of serious injury or threat and the reasons therefore; findings of serious injury or threat caused by increased imports; and decisions to apply or extend safeguard measures. Such notifications are required to contain the relevant information on which the decisions are based.
Members are required, before applying or extending a safeguard measure, to provide an adequate opportunity for consultations with Members who have substantial interests as exporters of the product. The aims of such consultations shall include review of information as to the facts of the situation, exchanging views on the proposed measures, and reaching an understanding as to maintaining a substantially equivalent level of concessions and obligations.
Provisional measures must be notified before being applied, andconsultations must be initiated immediately after such measures are applied.
The results of consultations, mid-term reviews of measures taken, compensation, and/or suspension of concessions, must be notified immediately to the Council for Trade in Goods through the Safeguards Committee by the Member concerned.
Members are obligated to notify their own laws, regulations and administrative procedures to the Committee, as well as their own pre-existing Article XIX and grey area measures. Members also are entitled to counternotify other Members' relevant laws and regulations, actions, or measures in force. Members are not obligated to disclose confidential information in their notifications.
The Committee's role generally is to monitor (and report to the Council for Trade in Goods on) the implementation and operation of the Agreement, toreview Members' notifications, and to make findings as to Members' compliance with respect to the procedural provisions of the Agreement for the application of safeguard measures, to assist with consultations, and toreview proposed retaliation.
Consultations and disputes arising under the Agreement are to be conducted in accordance with Articles XXII and XXIII of GATT 1994 as elaborated by the Dispute Settlement Understanding.
Safeguard
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For other uses of "Safeguard", see Safeguard (disambiguation).
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In the technical language of the World Trade Organization (WTO) system, a safeguard is used to restrain international trade in order to protect a certain home industry from foreign competition. A member may take a “safeguard” action (e.g. restrict importation of a product temporarily) 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 that produces like or directly competitive products.
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[edit]Background
Safeguard measures were always available under the General Agreement on Tariffs and Trade (GATT) (Article XIX). However, they were infrequently used, and some governments preferred to protect their industries through “grey area” measures (“voluntary” export restraint arrangements on products such as cars, steel and semiconductors). As part of the WTO deal, members gave up these “grey area” measures and adopted a specific WTO Safeguards Agreement [1] which disciplines the use of safeguard measures.
Safeguards are usually seen as responses to fair trade behaviour, as opposed to unfair trade practices such as
Dumping
Subsidy
As such they are supposed to be used only in very specific circumstances, with compensation, and on a universal basis, i.e., a member restricting imports for safeguard purposes will have to restrict imports from all other countries. However, exceptions to this non-discriminatory rule are provided for in the Agreement on Safeguards itself as well as in some ad hoc agreements. In this last respect it is worthwhile noting that the People's Republic of China has accepted that discriminatory safeguards may be imposed on its exports to other WTO members until 2013.
Regional trading arrangements have their own rules relating to safeguards. Some safeguard measures can be resorted to in the area of services, as provided for in the General Agreement on Trade in Services (GATS).
Anti-dumping, subsidies, safeguards: contingencies, etc
Binding tariffs, and applying them equally to all trading partners (most-favoured-nation treatment, or MFN) are key to the smooth flow of trade in goods. The WTO agreements uphold the principles, but they also allow exceptions — in some circumstances. Three of these issues are:
actions taken against dumping (selling at an unfairly low price)
subsidies and special “countervailing” duties to offset the subsidies
emergency measures to limit imports temporarily, designed to “safeguard” domestic industries.
Click the + to open an item.
Understanding the WTO
Basics
Agreements
Settling disputes
Cross-cutting and new issues
The Doha agenda
Developing countries
The organization
Abbreviations
More introductory information
> The WTO in Brief
> 10 benefits
> 10 misunderstandings
Anti-dumping actions back to top
If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. Is this unfair competition? Opinions differ, but many governments take action against dumping in order to defend their domestic industries. The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping — it disciplines anti-dumping actions, and it is often called the “Anti-Dumping Agreement”. (This focus only on the reaction to dumping contrasts with the approach of the Subsidies and Countervailing Measures Agreement.)
The legal definitions are more precise, but broadly speaking the WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter’s home market price), and show that the dumping is causing injury or threatening to do so.
GATT (Article 6) allows countries to take action against dumping. The Anti-Dumping Agreement clarifies and expands Article 6, and the two operate together. They allow countries to act in a way that would normally break the GATT principles of binding a tariff and not discriminating between trading partners — typically anti-dumping action means charging extra import duty on the particular product from the particular exporting country in order to bring its price closer to the “normal value” or to remove the injury to domestic industry in the importing country.
There are many different ways of calculating whether a particular product is being dumped heavily or only lightly. The agreement narrows down the range of possible options. It provides three methods to calculate a product’s “normal value”. The main one is based on the price in the exporter’s domestic market. When this cannot be used, two alternatives are available — the price charged by the exporter in another country, or a calculation based on the combination of the exporter’s production costs, other expenses and normal profit margins. And the agreement also specifies how a fair comparison can be made between the export price and what would be a normal price.
Calculating the extent of dumping on a product is not enough. Anti-dumping measures can only be applied if the dumping is hurting the industry in the importing country. Therefore, a detailed investigation has to be conducted according to specified rules first. The investigation must evaluate all relevant economic factors that have a bearing on the state of the industry in question. If the investigation shows dumping is taking place and domestic industry is being hurt, the exporting company can undertake to raise its price to an agreed level in order to avoid anti-dumping import duty.
Detailed procedures are set out on how anti-dumping cases are to be initiated, how the investigations are to be conducted, and the conditions for ensuring that all interested parties are given an opportunity to present evidence. Anti-dumping measures must expire five years after the date of imposition, unless an investigation shows that ending the measure would lead to injury.
Anti-dumping investigations are to end immediately in cases where the authorities determine that the margin of dumping is insignificantly small (defined as less than 2% of the export price of the product). Other conditions are also set. For example, the investigations also have to end if the volume of dumped imports is negligible (i.e. if the volume from one country is less than 3% of total imports of that product — although investigations can proceed if several countries, each supplying less than 3% of the imports, together account for 7% or more of total imports).
The agreement says member countries must inform the Committee on Anti-Dumping Practices about all preliminary and final anti-dumping actions, promptly and in detail. They must also report on all investigations twice a year. When differences arise, members are encouraged to consult each other. They can also use the WTO’s dispute settlement procedure.
> more on anti-dumping
> See also Doha Agenda negotiations
What is this agreement called?
Agreement on the implementation of Article VI [i.e 6]of the General Agreement on Tariffs and Trade 1994
Subsidies and countervailing measures back to top
This agreement does two things: it disciplines the use of subsidies, and it regulates the actions countries can take to counter the effects of subsidies. It says a country can use the WTO’s dispute settlement procedure to seek the withdrawal of the subsidy or the removal of its adverse effects. Or the country can launch its own investigation and ultimately charge extra duty (known as “countervailing duty”) on subsidized imports that are found to be hurting domestic producers.
The agreement contains a definition of subsidy. It also introduces the concept of a “specific” subsidy — i.e. a subsidy available only to an enterprise, industry, group of enterprises, or group of industries in the country (or state, etc) that gives the subsidy. The disciplines set out in the agreement only apply to specific subsidies. They can be domestic or export subsidies.
The agreement defines two categories of subsidies: prohibited and actionable. It originally contained a third category: non-actionable subsidies. This category existed for five years, ending on 31 December 1999, and was not extended. The agreement applies to agricultural goods as well as industrial products, except when the subsidies are exempt under the Agriculture Agreement’s “peace clause”, due to expire at the end of 2003.
Prohibited subsidies: subsidies that require recipients to meet certain export targets, or to use domestic goods instead of imported goods. They are prohibited because they are specifically designed to distort international trade, and are therefore likely to hurt other countries’ trade. They can be challenged in the WTO dispute settlement procedure where they are handled under an accelerated timetable. If the dispute settlement procedure confirms that the subsidy is prohibited, it must be withdrawn immediately. Otherwise, the complaining country can take counter measures. If domestic producers are hurt by imports of subsidized products, countervailing duty can be imposed.
Actionable subsidies: in this category the complaining country has to show that the subsidy has an adverse effect on its interests. Otherwise the subsidy is permitted. The agreement defines three types of damage they can cause. One country’s subsidies can hurt a domestic industry in an importing country. They can hurt rival exporters from another country when the two compete in third markets. And domestic subsidies in one country can hurt exporters trying to compete in the subsidizing country’s domestic market. If the Dispute Settlement Body rules that the subsidy does have an adverse effect, the subsidy must be withdrawn or its adverse effect must be removed. Again, if domestic producers are hurt by imports of subsidized products, countervailing duty can be imposed.
Some of the disciplines are similar to those of the Anti-Dumping Agreement. Countervailing duty (the parallel of anti-dumping duty) can only be charged after the importing country has conducted a detailed investigation similar to that required for anti-dumping action. There are detailed rules for deciding whether a product is being subsidized (not always an easy calculation), criteria for determining whether imports of subsidized products are hurting (“causing injury to”) domestic industry, procedures for initiating and conducting investigations, and rules on the implementation and duration (normally five years) of countervailing measures. The subsidized exporter can also agree to raise its export prices as an alternative to its exports being charged countervailing duty.
Subsidies may play an important role in developing countries and in the transformation of centrally-planned economies to market economies. Least-developed countries and developing countries with less than $1,000 per capita GNP are exempted from disciplines on prohibited export subsidies. Other developing countries are given until 2003 to get rid of their export subsidies. Least-developed countries must eliminate import-substitution subsidies (i.e. subsidies designed to help domestic production and avoid importing) by 2003 — for other developing countries the deadline was 2000. Developing countries also receive preferential treatment if their exports are subject to countervailing duty investigations. For transition economies, prohibited subsidies had to be phased out by 2002.
> more on subsidies and countervailing measures
> See also Doha Agenda negotiations
Safeguards: emergency protection from imports back to top
A WTO member may restrict imports of a product temporarily (take “safeguard” actions) if its domestic industry is injured or threatened with injury caused by a surge in imports. Here, the injury has to be serious. Safeguard measures were always available under GATT (Article 19). However, they were infrequently used, some governments preferring to protect their domestic industries through “grey area” measures — using bilateral negotiations outside GATT’s auspices, they persuaded exporting countries to restrain exports “voluntarily” or to agree to other means of sharing markets. Agreements of this kind were reached for a wide range of products: automobiles, steel, and semiconductors, for example.
The WTO agreement broke new ground. It prohibits “grey-area” measures, and it sets time limits (a “sunset clause”) on all safeguard actions. The agreement says members must not seek, take or maintain any voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side. The bilateral measures that were not modified to conform with the agreement were phased out at the end of 1998. Countries were allowed to keep one of these measures an extra year (until the end of 1999), but only the European Union — for restrictions on imports of cars from Japan — made use of this provision.
An import “surge” justifying safeguard action can be a real increase in imports (an absolute increase); or it can be an increase in the imports’ share of a shrinking market, even if the import quantity has not increased (relative increase).
Industries or companies may request safeguard action by their government. The WTO agreement sets out requirements for safeguard investigations by national authorities. The emphasis is on transparency and on following established rules and practices — avoiding arbitrary methods. The authorities conducting investigations have to announce publicly when hearings are to take place and provide other appropriate means for interested parties to present evidence. The evidence must include arguments on whether a measure is in the public interest.
The agreement sets out criteria for assessing whether “serious injury” is being caused or threatened, and the factors which must be considered in determining the impact of imports on the domestic industry. When imposed, a safeguard measure should be applied only to the extent necessary to prevent or remedy serious injury and to help the industry concerned to adjust. Where quantitative restrictions (quotas) are imposed, they normally should not reduce the quantities of imports below the annual average for the last three representative years for which statistics are available, unless clear justification is given that a different level is necessary to prevent or remedy serious injury.
In principle, safeguard measures cannot be targeted at imports from a particular country. However, the agreement does describe how quotas can be allocated among supplying countries, including in the exceptional circumstance where imports from certain countries have increased disproportionately quickly. A safeguard measure should not last more than four years, although this can be extended up to eight years, subject to a determination by competent national authorities that the measure is needed and that there is evidence the industry is adjusting. Measures imposed for more than a year must be progressively liberalized.
When a country restricts imports in order to safeguard its domestic producers, in principle it must give something in return. The agreement says the exporting country (or exporting countries) can seek compensation through consultations. If no agreement is reached the exporting country can retaliate by taking equivalent action — for instance, it can raise tariffs on exports from the country that is enforcing the safeguard measure. In some circumstances, the exporting country has to wait for three years after the safeguard measure was introduced before it can retaliate in this way — i.e. if the measure conforms with the provisions of the agreement and if it is taken as a result of an increase in the quantity of imports from the exporting country.
To some extent developing countries’ exports are shielded from safeguard actions. An importing country can only apply a safeguard measure to a product from a developing country if the developing country is supplying more than 3% of the imports of that product, or if developing country members with less than 3% import share collectively account for more than 9% of total imports of the product concerned.
The WTO’s Safeguards Committee oversees the operation of the agreement and is responsible for the surveillance of members’ commitments. Governments have to report each phase of a safeguard investigation and related decision-making, and the committee reviews these reports.
> more on safeguards
What is this agreement called?
Agreement on Subsidies and Countervailing Measures
‘AD-CVD’?
People sometimes refer to the two together — “AD-CVD” — but there are fundamental differences
Dumping and subsidies — together with anti-dumping (AD) measures and countervailing duties (CVD) — share a number of similarities. Many countries handle the two under a single law, apply a similar process to deal with them and give a single authority responsibility for investigations. Occasionally, the two WTO committees responsible for these issues meet jointly.
The reaction to dumping and subsidies is often a special offsetting import tax (countervailing duty in the case of a subsidy). This is charged on products from specific countries and therefore it breaks the GATT principles of binding a tariff and treating trading partners equally (MFN). The agreements provide an escape clause, but they both also say that before imposing a duty, the importing country must conduct a detailed investigation that shows properly that domestic industry is hurt.
But there are also fundamental differences, and these are reflected in the agreements.
Dumping is an action by a company. With subsidies, it is the government or a government agency that acts, either by paying out subsidies directly or by requiring companies to subsidize certain customers.
But the WTO is an organization of countries and their governments. The WTO does not deal with companies and cannot regulate companies’ actions such as dumping. Therefore the Anti-Dumping Agreement only concerns the actions governments may take against dumping. With subsidies, governments act on both sides: they subsidize and they act against each others’ subsidies. Therefore the subsidies agreement disciplines both the subsidies and the reactions.
What is this agreement called?
Agreement o
General principles back to top
The Agreement on Safeguards (“SG Agreement”) sets forth the rules for application of safeguard measures pursuant to Article XIX of GATT 1994. Safeguard measures are defined as “emergency" actions with respect to increased imports of particular products, where such imports have caused or threaten to cause serious injury to the importing Member's domestic industry (Article 2). Such measures, which in broad terms take the form of suspension of concessions or obligations, can consist of quantitative import restrictions or of 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, (generally) must be applied on an MFN basis (See: Special and Differential Treatment (1), and (generally) must be “paid for” by the Member applying them (See: Application of definitive safeguard measures.)
Historical background back to top
Under GATT 1947, safeguards were regulated only by Article XIX, and it was the Uruguay Round that created the SG Agreement, which adds clarity and introduces certain changes. The SG Agreement was negotiated in large part because GATT Contracting Parties had been increasingly applying a variety of so-called “grey area” measures (bilateral voluntary export restraints, orderly marketing agreements, and similar measures) to limit imports of certain products. These measures were not imposed pursuant to Article XIX, and thus were not subject to multilateral discipline through the GATT, and the legality of such measures under the GATT was doubtful. The Agreement now clearly prohibits such measures, and has specific provisions for eliminating those that were in place at the time the WTO Agreement entered into force.
Aims of Agreement back to top
In its own words, the SG Agreement, which explicitly applies equally to all Members, aims to: (i) clarify and reinforce GATT disciplines, particularly those of Article XIX; (ii) re-establish multilateral control over safeguards and eliminate measures that escape such control; and (iii) encourage structural adjustment on the part of the industries adversely affected by increased imports, thereby enhancing competition in international markets.
Structure back to top
The Agreement consists of fourteen articles and one annex. In general terms, it has four main components: (1) general provisions (Articles 1 and 2); (2) rules governing Members' application of new safeguard measures (i.e., those applied after entry into force of WTO Agreement (Articles 3-9)); (3) rules pertaining to pre-existing measures that were applied before the WTO entry into force (Articles 10 and 11); and (4) multilateral obligations and institutions regarding application of safeguard measures (Articles 12-14).
Coverage back to top
Article 1 establishes that the SG Agreement is the vehicle through which measures may be applied pursuant to Article XIX of GATT 1994. That is, any measure for which the coverage of Article XIX (which allows suspension of GATT concessions and obligations under the defined "emergency" circumstances) is invoked, must be taken in accordance with the provisions of the SG Agreement. The Agreement explicitly does not apply to measures taken pursuant to other provisions of GATT 1994, to other Annex 1A Multilateral Trade Agreements, or to protocols and agreements or arrangements concluded within the framework of GATT 1994 (Article 11.1 (c)).
Conditions for application of safeguard measures back to top
Article 2 sets forth the conditions under which safeguard measures may be applied. These conditions are: (i) increased imports and (ii) serious injury or threat thereof caused by such increased imports It also contains the requirement that such measures be applied on an MFN basis.
Increased quantity of imports back to top
The determination of increased quantity of imports that a Member must make before it may apply a safeguard measure can be of either an absolute increase or an increase relative to domestic production.
Injury: Two possibilities back to top
Serious injury
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. Factors that must be analyzed are the absolute and relative rate and amount of increase in imports, the market share taken by the increased imports, as well as changes in level of sales, production, productivity, capacity, utilization, profits and losses, and employment of the domestic industry.
Threat of serious injury
“Threat of serious injury” is threat that is clearly imminent as shown by facts, and not based on mere allegation, conjecture or remote possibility. If present serious injury is not found, a safeguard measure nevertheless can be applied if a threat of serious injury is found.
Domestic industry back to top
A “domestic industry” is defined as the producers as a whole of the like or directly competitive products operating within the territory of a Member, or producers who collectively account for a major proportion of the total domestic production of those products. This definition allows a broader consideration of effects than in anti-dumping or countervail cases.
Causation back to top
A determination of serious injury cannot be made unless there is objective evidence of the existence of a causal link between increased imports of the product concerned and serious injury. Further, when factors other than increased imports are causing injury to the domestic industry at the same time, such injury must not be attributed to increased imports. The criterion of a causal link falls short, however, of proposals made during the Uruguay Round that would have required imports to be the “principal cause” of injury.
Need for investigation back to top
New safeguard measures may be applied only following an investigation conducted by competent authorities in accordance with established procedures. Under Article XIX of GATT 1947, there was no explicit requirement for an investigation.
Procedural transparency back to top
Investigation procedures must be established and published prior to being used. Although the Agreement does not contain detailed procedural requirements, it does require reasonable public notice of the investigation. The relevant authorities are obligated to publish a detailed analysis of the case in the form of a report presenting and explaining their findings on all pertinent issues, including a demonstration of the relevance of the factors examined.
Participation by interested parties back to top
Investigating authorities are required to hold public hearings or provide other appropriate means for interested parties (importer, exporters, producers, etc.) to present their views and to respond to the views of others with respect to the matters being investigated. Among the topics on which parties' views are required to be sought is whether or not a safeguard measure would be in the public interest.
Confidential information back to top
The Agreement also contains specific rules for the handling of confidential information in the context of an investigation. In general, information for which confidential treatment is requested must be accompanied by a public summary thereof, or an explanation why no such summary is possible. If confidentiality is found not to be warranted, and the party submitting the information is unwilling to summarize it or authorize its disclosure, the authorities may disregard the information, unless through other sources it is demonstrated that the information is correct.