The Agreement on Safeguards took effect with establishment of
the World Trade Organization on January 1, 1995. It builds on the
1947 General Agreement on Tariffs and Trade (GATT), which allows
members to impose temporary border control measures called
safeguards if a surge of imports causes or threatens to cause
serious injury to a domestic industry. An import surge justifying
safeguard action can be a real increase in imports
(anabsoluteincrease); or it can be an increase in the imports'
share of a shrinking market, even if the import quantity has not
increased (relativeincrease).
The Agreement on Safeguards sets out criteria for assessing
whether "serious injury" is caused or threatened, as well as the
factors to 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 to adjust. Where quantitative
restrictions (quotas) are imposed, they normally should not reduce
the quantities of imports below the annual average for the last 3
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, safeguards are meant to apply to all suppliers,
although the special and differential treatment provisions of the
Safeguards Agreement exempt actions against developing countries
with market shares of less than 3 percent, unless the cumulative
shares of developing countries is greater than 9 percent. In the
case of quotas, the agreement describes how they 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 4 years, although
this can be extended up to 8 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 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
enforcing the safeguard measure. In some circumstances, the
exporting country has to wait for 3 years after the safeguard
measure is introduced before it can retaliate in this way-i.e., if
the measure conformed with the provisions of the agreement and if
it was taken as a result of an absolute increase in the quantity of
imports from the exporting country.
Safeguard investigations of agricultural trade have been fairly
rare in the post-Uruguay Round period, 1995-2010. Over half
of all investigations occurred during the four year period between
1999 and 2002, with less than two per year occurring during the
last five years of the period.
Safeguard investigations by product type