Safeguard measures of US and China in spotlight at WTO meeting
New safeguard actions by the United States and China were in the spotlight at a 23 October meeting of the WTO’s Committee on Safeguards. Delegations reviewed two dozen notifications of safeguard actions submitted by WTO members over the past six months. More than half the actions targeted imports of iron or steel products.
Five members questioned the United States regarding new safeguard actions affecting imports of large residential washers and crystalline silicon photovoltaic cells, with some expressing concerns about the US use of a trade remedy measure it had used infrequently in the past. China was quizzed by two members regarding its safeguard duties on sugar imports, only the second safeguard investigation initiated since China joined the WTO in 2001. The committee, chaired by Mr Kensuke Tsunoda of Japan, also reviewed national safeguard legislation of Afghanistan, Cameroon and El Salvador.
Japan, Korea, Australia, Canada, China, Chinese Taipei and the European Union all expressed continued concern about the high level of safeguard actions taken by WTO members. The number of new safeguard actions notified to the WTO and addressed at the 23 October committee meeting rose to 24 compared to 16 at the last meeting in April.
Japan repeated that much of the increased safeguard activity was a result of oversupply in steel and other key sectors and mainly caused by emerging economies expanding capacity beyond what was economically rational. Korea said that given the substantial chilling effect a safeguard can have on trade, members should proceed with prudence in resorting to such measures. Australia, Canada, Chinese Taipei and the EU all voiced concern about the rise in such measures and the need to ensure any safeguard action is carried out in strict accordance with the WTO’s Safeguards Agreement.
China also expressed concerns about the rising use of safeguards and the need to ensure they are used in strict accordance with WTO requirements. However, China said it was inappropriate to link safeguards with the so-called overcapacity issue, and that this committee was not the appropriate forum to discuss overcapacity. The United States once again expressed its concerns about members failing to notify their safeguards legislation to the committee, something it said members already do through the trade policy review process.
Under the WTO’s Safeguards Agreement, a member may restrict imports of a product temporarily (take “safeguard” actions) through higher tariffs or other measures if its domestic industry is seriously injured, or threatened with serious injury, due to an unforeseen surge in imports.
In principle, safeguard measures apply to all imports and not just those from a particular country (developing countries accounting for less than 3% of exports are excluded from a measure). Because safeguards target “fair” trade, an exporting country can seek compensation for lost trade through consultations or, if no agreement is reached, it can raise tariffs on exports from the country that is enforcing the safeguard measure.
Source: wto.org
