The Law and Economics of Contingent Protection in the WTO
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The Law and Economics of Contingent Protection in the WTO

  • Elgar International Economic Law series

Petros C. Mavroidis, Patrick A. Messerlin and Jasper M. Wauters

In this important book, three of the leading authors in the field of international economic law discuss the law and economics of the three most frequently used contingent protection instruments: anti-dumping, countervailing measures, and safeguards. When discussing countervailing measures, the authors also discuss legal challenges against prohibited and/or actionable subsidies. The authors’ choice is mandated by the fact that the effects of a subsidy cannot always be confined to the market of the WTO Member wishing to react against it. Assuming there are effects outside its market, an injured WTO Member can challenge the scheme as such before a WTO Panel. Taking the three agreements for granted as a starting point, the book provides comprehensive discussion of both the original contracts, and the case law that has substantially contributed to the understanding of these agreements.
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Chapter 16: Conclusions

Petros C. Mavroidis, Patrick A. Messerlin and Jasper M. Wauters

Extract

15. The regulation of safeguards in the WTO A A TYPOLOGY OF SAFEGUARD MEASURES A list of all possible forms of safeguard measures is not explicitly reflected in the WTO SG Agreement or Article XIX GATT 1994.1 The latter simply provides that under certain circumstances a Member may be free ‘to suspend the obligation in whole or in part or to withdraw or modify the concession’. Thus, tariff increases above the bound rate may clearly be used as a safeguard measure. Actually, Article 7 SG provides that provisional safeguard measures should take the form of such tariff increases. But definitive safeguard measures could take the form of quantitative restrictions or any type of quota system as well, as becomes evident from Article 5 SG. Art. 5.1 SG states, inter alia: ‘. . . if a quantitative restriction is used’ (emphasis added) and Article 5.2 deals with ‘cases in which a quota is allocated among supplying countries’. Article 5.1 in fine states that Members should choose measures most suitable for the achievement of the objectives, that is, to prevent or remedy serious injury and to facilitate adjustment. Actually, based on the notifications by WTO Members to the Safeguards Committee, it appears that ad valorem tariff increases are the most widely used safeguards instrument. Almost as popular are tariff rate quotas (TRQ) whereby Members reserve a favourable tax rate for a small initial quantity imported. Specific tariff increases are third on the ranking. Quantitative restrictions with some quota system are a distant fourth only.2 In...

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