The safeguards mess: a critique of WTO jurisprudence

Abstract

The creation of the WTO revived the use of ‘safeguard’ measures to protect troubled industries against surges in import competition. Many of these measures have now been challenged in the WTO dispute resolution process, and in each case the process has found the challenged measure to be a violation of WTO law. This paper examines the WTO rules on safeguards from an economic perspective. Among other things, it argues that the textual preconditions for the use of safeguards in the treaty text are incoherent, and that the Appellate Body has compounded the problem through a series of dubious and unhelpful rulings. The result is a situation in which nations cannot use safeguards without facing a near certainty that they will be found invalid. Those who believe that safeguard measures are wasteful protectionism may welcome these developments, but it is by no means clear that the trading system will benefit in the long run.

Free Trade Agreements and Governance of the Global Trading System

“…23 This is interesting since it implies that parties believe that their agreements are consistent with their rights and obligations under the WTO. There should, in principle, be no conflict 20 For a critique of the language of the GATT and WTO rules and the uncertainties to which they give rise, see Sykes (2003). For a summary in the context of Dispute Settlement Body rulings, see Brown and Stern (2009).…”

Making Sense of Safeguards

“…However, Irwin (2003) and Durling and McCullough (2005) have argued that noncompliance by the USA is frequent regarding this stipulation. Given the impossibility of establishing causality through inferential statistics for the short time horizon utilized in ASG investigations, the weakening of the statutory requirements regarding the importance of imports in inducing injury (Jackson, 1997), the absence of a consensus regarding the use of computer simulations in investigations (Durling and McCullough, 2005), and the lack of guidance from the WTO regarding a method of ascertaining causality (Sykes, 2003), I do not consider nonattribution to be an effective discipline.…”

Countersuits and the Politics of Abandoned WTO Trade Disputes

“…One major trade barrier disputed at the WTO, antidumping duties, may simply be a clever form of protectionism instead of a way to counter dumping activity (Lindsey and Ikenson 2003;Prusa 2005;Blonigen 2006). Safeguards and subsidies are also clearly aimed at protecting domestic industries, and while some of the definitions are somewhat problematic (Sykes 2003a,b), there is extensive WTO jurisprudence 1 that explains why these measures don't hold up well at the WTO (Sykes 2003b). As such, if these duties are often improperly invoked for protectionist purposes, and challenges to these duties through the WTO DSM are often successful, countries willing to challenge trade barriers at the WTO have every incentive to follow through with their disputes, as they are likely to win.…”