Table of Contents

Handbook on International Trade Policy

Handbook on International Trade Policy

Elgar original reference

Edited by William A. Kerr and James D. Gaisford

The Handbook on International Trade Policy is an insightful and comprehensive reference tool focusing on trade policy issues in the era of globalization. Each specially commissioned chapter deals with important international trade issues, discusses the current literature on the subject, and explores major controversies. The Handbook also directs the interested reader to further sources of information.

Chapter 35: Safeguard Measures and Impediments to Labour Mobility

Lawrence Leger and James Gaisford

Subjects: economics and finance, international economics

Extract

Lawrence Leger and James Gaisford Introduction The World Trade Organization (WTO) (1999: 275–82) allows countries to implement temporary safeguard measures in the form of import tariffs or quotas if they are confronted by a surge in imports that causes or threatens ‘serious injury’ to the domestic industry.1 Unlike contingency measures such as antidumping duties and countervailing duties, which have been discussed in previous chapters, there is no requirement of unfair trade practices on the part of foreign firms or governments. Rather, the rationale for safeguard measures is that a country may need time, and thus temporary protection, to facilitate orderly ‘structural adjustment’ to a new trading reality. In the absence of unfair foreign trade practices, a country that uses safeguards must offer trade concessions of equivalent value elsewhere, or pay equivalent compensation or, by default, accept equivalent retaliation. Safeguards are normally limited to four years with any extensions requiring evidence of adjustment as well as continued evidence of serious injury. With extensions, there is an eight-year maximum duration for a single action and consecutive actions are not permitted. Developing countries receive some special treatment both if they impose safeguards and if they are subject to safeguards from other countries. The current WTO Agreement on Agriculture also includes ‘special safeguard’ provisions related to import levels sufficiently above the minimum access provisions negotiated in the Uruguay Round (WTO 1999: 36–8). Depending on whether the underlying shift in comparative advantage that gives rise to an import surge is...

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