4.4 Safeguards Measures 09-Nov.-2006 1.Introduction 2.Conditions for Invoking Safeguards 3.Domestic Procedures for invoking safeguards 4.Chinese legislation.

4.4 Safeguards Measures09-Nov.-2006

1.Introduction2.Conditions for

Invoking Safeguards3.Domestic Procedures

for invoking safeguards

4.Chinese legislation on Safeguard

Countermeasures by Other Members to Mechanical and Electrical Products Made in China

1. IntroductionDefinition(Art 19 of GATT)

is a tool used by a state to restrain international trade to protect a certain home industry from foreign competition. Emergency means to restrict imports by A WTO member used to prevent serious injury or threaten thereof to domestic industry from a sudden increase of imports.

Categories

WTO 规则允许的进口国政府在特定产品进口大量增加造成国内相关产业损害或损害威胁时所采取的限制进口的紧急措施

Form Tariff measures, eg.tariff increase

Non-tariff measures, eg. quantity restriction and tariff quota

Implementation

Provisional measures

Definitive measures

1. IntroductionFeature

Be Justified under GATT/WTO No requirements of existence of unfair trade (eg. a specific pricing behavior) by exporting countries or industriesRebus sic stantibus is the legal basis

Why justified?

1. Introduction

Tariff concession, elimination of trade-barrier

Trade liberalizatio

n

Sudden increase

in imports

Weaken domestic industries

of a Member

Extensive political

and social confusion

e.g.:bankruptcy,unemployment

Less competitive advantage

Safeguard measures provide a grace period for domestic industries which have lost their competitive advantage, enabling capital and facilities to be shifted into industries which retain this advantages, and the labour force to be retrained

GATT/WTO 在促进贸易自由化的同时，也承认贸易自由化也会使承担义务的成员方面临困难，如，无法适应新的竞争环境，为保证受影响的产业获得适应竞争的时间，其规定了相应的保障措施

1. IntroductionLegal framework

Art 19 of GATT: Emergency Action on imports of particular products ( 对某种产品进口的紧急措施）Agreement on Safeguards (SA) （保障措施协定）

Art19 of GATT,Art2,4 of SA:the substantive requirements for application of safeguard measure

Art 3-9: investigation and the various conditions relating to application of measures

Article 12: sets out obligations of notification and consultation that must be complied with by a WTO Member seeking to take a safeguard measure.

Article 13: establishes multilateral surveillance over the implementation of the agreement by setting up a Committee on Safeguards under the authority of the Council for Trade in Goods.

2.Conditions for Invoking Safeguards

Increased Imports Absolute or relative increase in imports of products (Art 2 of the SA)—— quantity, not value

Unforeseen Developments, etc.

Increased imports as a result of unforeseen development and of the effect of the WTO obligations (Article XIX of the GATT)

Determination of"serious injury" andcasual link

Serious injury found in terms of economic factors such as imports,production, sales, productivity, etc., and causal link between increased imports and injury (Article 4 of the SA)

实施保障措施的条件： 1. 有关产品的进口大量增加 ; 2. 由不可预见的发展和承担总协定义务造成的 ;3. 对国内产业造成严重损害或严重损害威胁 ;4. 进口增加与国内产业损害有因果关系。

Substantive conditions

Procedural conditions——Investigation

Absolute or relative increase

Absolute

2005: 30 thousands in imports2006: 40 thousands in imports

Relative=Import Q’ty / Domestic produced Q’ty

How much increased and over which time span? …the increase in imports must have been recent enough, sudden enough,sharp enough, and significant enough, both quantitatively and qualitatively,to cause or threaten to cause “serious injury”. (Argentina-footwear(EC)

10 thousands increase

2005Import 10 thousands

Domestic 30 thousands

2006Import 10 thousands

Domestic 20 thousands<

Determination of “Unforeseen Developments”

“unforeseen developments” is the prerequisite to invoke safeguard (Korea-Dairy Products, WT/DS98/AB/S)

Working party, US-Hatter’s Fur…the term ~ should be interpreted to mean developments occurring after the negotiation of the relevant tariff concession which it would not be reasonable to expect that the negotiators of the country making the concession could and should have foreseen at the time when the concession was negotiated…

Key points for understanding:Whether the contracting party is reasonable to expect when making concessionFrom a reasonable contracting party’s point of view

在 1950 年捷克诉美国的“皮帽案”对“不可预见的发展”作出解释：“是指在关税减让谈判后出现的情况发展，并且要求作出关税减让的国家的谈判代表在谈判时无法合理的预见到这种情况的发展。

Determination of injury- Article 4 of the SA

Definition of Serious Injury/ Threat of Serious Injury

…serious injury that is clearly imminent (shall be based on facts and not merely on allegation, conjecture or remote possibility)

…a significant overall impairment in the position of a domestic industry;

“ 严重损害”指对国内某一产业的状况造成重大的总体损害。“严重损害威胁”：指对国内某一产业的地位造成的重大总体损害还没有发生，但已迫在眉睫。“国内产业”，指在成员方领土内生产相似产品或直接竞争产品的国内生产者全体，或相似产品或直接竞争产品的总体产量占该成员国内总产量主要部分的生产者。

Injury factors must be concerned

Definition of the Domestic Industrythe producers making products, which are “like” or “directly

competitive” to the imports targeted by the investigation. either the whole of such domestic industry, or to that part thereof

which amounts to a “major proportion”.

Injury Factors (Article 4.2(a)SA)

…the competent authorities shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry,

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

the share of the domestic market taken by increased imports,

changes in the level of sales,

production, productivity,

capacity utilization,

profits and losses,

employment.

进口成员的调查机构必须评估与该产业状况相关的所有客观的和可量化的因素。包括：绝对或相对条件下的有关产品的进口的比例和数量，增加的进口所占有的市场份额，

销售水平、产量、生产率、设备利用率、盈亏及就业状况的变化情况。

Causal link

When factors other than increased imports are causing injury to the domestic industry at the same time, such injury shall not be attributed to increased imports.

如进口增加之外的因素正在同时对国内产业造成损害，则此类损害不得归因于进口增加

3. Domestic Procedures for invoking safeguards

Art 3,6 and 12 of SA

Investigation

Determination

Consultation

Notify the Committee on Safeguards:

Initiating an investigatory process and the reasons for it;

Making a finding of serious injury or threat thereof caused by increased imports

Taking a decision to apply or extend a safeguard measure.

Ob

liga

tion

of N

otific

atio

nProvisional measures

Definitive measures by importing Member

Compensation to exporting Member or suspension of tariff concession by exporting Member

Application of Safeguard Measures

Provisional MeasuresBased on preliminary confirmative determination

Duration: not exceed 200 days

Form: tariff increase

Definitive measuresForm: tariff increase, quantities restrictions and tariff-quota

Duration

Not to exceed four years initially, and may be extended to the maximum of eight years (including the period of provisional measure).

Levels of Quantitative Restrictions

Must, in principle, not fall below the average of imports in the last three representative years (Art 5).

4. Chinese legislation on Safeguard

1.1994 年《对外贸易法》第第44 条、第 45 条和第 46 条是关于保障措施的原则性规定。2. 《保障措施条例》 (2001 年 11 月 26 日颁布； 2004 年 3 月 31 日修订 ) ，共 5 章 34 条，与WTO 《保障措施协定》相符。3. 《保障措施法》已被列入十届人大常委会立法计划。