Essays in Honor of Mordechai Kreinin
Edited by Michael G. Plummer
Chapter 9: The WTO Agreement on Safeguards: An Empirical Analysis of Discriminatory Impact
Chad P. Bown and Rachel McCulloch 1. INTRODUCTION The Uruguay Round Agreement on Safeguards (AS) represents an effort to improve the safeguards process and thereby encourage countries to choose this option over anti-dumping and ‘gray-area’ measures such as bilaterally negotiated export restraints. In contrast to anti-dumping, which is designed to protect domestic firms from injury due to ‘unfair’ trade, safeguards provide temporary relief to domestic industries that suffer ‘serious injury’ due to fairly traded imports. In contrast to anti-dumping and gray-area measures, safeguards are intended to limit imports across the board rather than from particular exporters, and the AS explicitly reaffirms the principle of most-favored-nation (MFN) treatment in application of safeguards. However, the AS also authorizes explicit discrimination among exporters in specified circumstances. Moreover, implementation of safeguards (SG) according to the procedures laid out in the AS may entail implicit discrimination among exporters to the SG-protected market. This chapter offers a first empirical analysis of the way safeguards initiated under the AS have been implemented in practice. The non-discriminatory treatment of trading partners, known as mostfavored-nation treatment, was a fundamental principle of the original GATT system (Article I) and has been carried over into the World Trade Organization. Its continuing appeal reflects both political and economic-efficiency considerations. Yet exceptions to treatment profoundly affect trade among members of the WTO. GATT Article XXIV permits the formation of preferential, that is, discriminatory, trading arrangements among groups of countries, and such arrangements now constitute an important feature of national trade policy. ‘Special and...
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