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Trade Remedies

SAFEGUARDS
Reporters:
John Mark Sunga
Reo Daguman
SAFEGUARD MEASURES
Agreement on Safeguards
Republic Act No. 8800
Agreement on Safeguards
Permits importing countries to restrict
imports of a product for a temporary period
by either increasing tariffs or imposing
quantitative restrictions.

It afford affected industry time to adjust to
the increased competition that it will have to
face after the restrictions are removed.
WTO Agreement on Safeguards (GATT Article XIX)
Safeguard measures are
defined as:


Emergency actions with respect to
increased imports of particular products,

where such imports have caused or threaten
to cause serious injury to the importing
Member's domestic industry.

Such measures, which in broad terms take
the form of suspension of concessions or
obligations, can consist of quantitative import
restrictions or of duty increases to higher
than bound rates.
Major guiding principles in the
application of Safeguard
Measures:


such measures must be temporary;
that they may be imposed only when imports are
found to cause or threaten serious injury to a
competing domestic industry;
that they be progressively liberalized while in
effect; and
that the Member imposing them must pay
compensation to the Members whose trade is
affected.
That they be applied on a non-selective basis
(i.e. Most Favored Nation)
Features:
It has four main components:

General provisions
Rules governing Members' application of new
safeguard measures (i.e., those applied after entry
into force of WTO Agreement
Rules pertaining to pre-existing measures that were
applied before the WTO's entry into force; and
Multilateral surveillance and institutions
Rules Governing New Safeguard
measures (applied after entry
into force of WTO Agreement)
Investigative Requirements- agreement does not contain
detailed procedural requirements, it does however, require
public notice of the investigation and that interested parties
be given the opportunity to present their views and to respond
to views of others.
Among the topics on which views are to be sought is
whether or not a safeguard measure would be in the public
interest.
Relevant Authorities are obligated to publish a report
presenting and explaining their findings on all pertinent
issues
Agreement also contains specific rules for handling
confidential information in the context of an investigation.
Conditions for Application:
1) Increased Imports

Either an absolute increase or an increase relative to
domestic production.

domestic industry is defined as the producers as a
whole of the like or directly competitive products
operating within the territory of a Member, or producers
who collectively account for a major proportion of the
total domestic production of those products

A safeguard measure shall not be applied to low volume
from developing country Members.
where imports from a single developing country Member account
for no more than 3% of the total imports of the product concerned,
and
provided that the developing country Members below this threshold
do not collectively account for more than 9% of those imports.
2) Serious injury or threat thereof caused by
such increased imports
serious injury as a significant overall impairment
in the position of a domestic industry.
Factors that must be analyzed are the absolute and
relative rate and amount of increase in imports, the market
share taken by the increased imports, as well as changes
in level of sales, production, productivity, capacity,
utilization, profits and losses, and employment of the
domestic industry.
Threat of serious injury is threat that is clearly
imminent as shown by facts, and not based on
mere allegation, conjecture or remote possibility

3) Existence of a causal link between
increased imports of the product concerned
and serious injury

Republic Act No. 8800
Safeguard Measure Act
Signed into law on July 19, 2000 and took effect on
August 9, 2000
Conditions for the Application:
Increased imports
Serious injury of threat of serious injury
Causal link
Product comparability (like or directly competitive
product)
Forms of Measure
Provisional Measure
Applied in critical circumstances where delay may cause damage
that is difficult to repair.
Tariff increase (200 days pursuant to a preliminary determination)
DTI/BIS conducts preliminary determination in the case of industrial
goods and DA in case of agricultural products.

Definitive Safeguard measure

Requires formal investigation by the Tariff Commission.
The Commission shall conclude its investigation and submit a report
of its findings to the DTI Secretary within 120 calendar days from
receipt of the request.
Tariff increase or Quantitative restrictions
Maximum initial period for the application of Safeguard measure is 4
years (can be extended up to 8 years)(10 years for developing
countries)
Judicial Review Court of Tax Appeals Petition for Review

Special Safeguards
Additional duty not exceeding 1/3 of the level of the ordinary customs
duty in effect during the year in which the action is taken.
Shall only be maintained until the end of the year in which it has been
applied
Injury is not an element in the imposition of safeguard measure
Volume of imports exceeds a base trigger level
Import price falls below a trigger price level
No provisional application

Concessions and Other Obligations

In applying a safeguard measure, the Member
must maintain a substantially equivalent level
of concessions and other obligations with
respect to affected exporting Members.
To do so, any adequate means of trade compensation
may be agreed with the affected Members.
Absent such agreement, the affected exporting Members
individually may suspend substantially equivalent
concessions and other obligations.
This latter right cannot be exercised during the first three
years of application of a safeguard measure if the measure
is taken based on an absolute increase in imports, and
otherwise conforms to the provisions of the Agreement.
Practical Applications
Formal investigation reports on
Philippine Angle Steel Bar industrys
safeguard measure against imports
FORMAL INVESTIGATION REPORT
on Ceramic Tiles Industry:
Extension of Safeguard Action Against
Imports