Comparing safeguard measures in regional and bilateral agreements

The problem with this type of agreement is that its application is very broad and that the agreements are all silent on the manner in which ‘serious injury’ or ‘serious disturbances’ is determined. With the ‘serious injury’ determination, guidelines can be found in the applicable WTO rules and dispute settlement procedures, but the determination of ‘serious disturbances’ is somewhat vague and unclear. What exactly is meant by ‘serious disturbances’ and how would the investigating authorities determine such threshold? No direction in determining the threshold of ‘serious disturbances, or even a definition to assist the petitioners, is provided for in any of the examined agreements. The agreements are further silent on the requirement of a ‘causal link’. Only some of the agreements specifically mention the right to resort to global safeguards.

The EPAs provide for the use of multilateral safeguards including the Special Agriculture Safeguard under Article 5 of the WTO Agreement on Agriculture. However, as some ACP countries are not party to this agreement, they will be unable to use the mechanism. Those ACP countries who did not undertake tariffication during the Uruguay Round are also unable to employ the Special Agriculture Safeguard – despite being parties to the Agreement on Agriculture. In these instances the mechanism will only be available to the EU. The EU does initially exempt the ACP imports from safeguard action, but only for the first five years. This is in contrast to some of the other agreements which provide for the exclusion from safeguard actions under specific conditions.

The EPAs also provide for the suspension of further reduction of the applicable rates or duties as well as an increase in the rate of duty for the concerned product. A similar qualification is maintained as the one in the TDCA – duties may not increase to a level which exceed the duties that are applied to other WTO members. In addition to the typical remedies stated above, the EPAs include tariff quotas to be imposed on the product concerned. No specific rules or guidelines are, however, incorporated to regulate the allocation of quotas between suppliers.

The EPAs also confirm that safeguard measures are only to be taken for such time as may be necessary to prevent or remedy ‘serious injury’ or ‘serious disturbances’. This is, however, more precisely defined as a period not exceeding two years. This can be extended for another two years if the conditions justifying the imposition of the safeguard continue to exist. If the CARIFORUM member states apply the safeguard measure, or where the EU applies a measure limited to the territory of one or more of its outermost regions, the measure may be applied for an initial period of four years, extendable to a maximum of eight years. The TDCA states that a safeguard measure can be applied for a maximum of four years, but this can be extended by the designated authority in exceptional circumstances.

In the case of the EPAs, safeguard measures which exceed one year must progressively be liberalised. The other examined agreements are silent on this point arguably due to the general nature of the procedural obligations. The ‘cooling-off’ period provided for in the EPAs is one year while the period stipulated in other agreements is three years.

Only the EPAs contain slightly more comprehensive provisions that deal with the duration of the provisional measure. The limit is 200 days when measures are taken by the CARIFORUM member states or when measures are taken by the EU concerning the territory of its outermost members. The duration of the provisional action is limited to 180 days when the EU takes the measure. By implication this means that the EU is allowed to impose provisional safeguard measures, even though the EU is prohibited from imposing bilateral safeguard measures.

Link to: http://ictsd.net/downloads/2009/07/safeguardweb.pdf