The WTO Agreement on Safeguards A Commentary

by Sykes, Alan O.

• ISBN13: 9780199277407
• ISBN10: 0199277400
• Format: Hardcover
• Copyright: 2006-11-23
• Publisher: Oxford University Press

Summary

The protection of troubled industries against import surges, called safeguard measures under WTO law, are controversially justified on the basis of economic concerns. This book reviews the economic literature bearing on the soundness of safeguard policies. It also addresses the complex legal issues relating to the constraints on safeguard measures under WTO law, and affords a thorough discussion and critical analysis of the WTO disputes in the area, including the most recent case involving measures protecting the U.S. steel industry.

Author Biography

Alan Sykes received his law degree from Yale University in 1982, and his Ph.D. in economics from Yale in 1987. He was in private practice in Washington, D.C. at the law firm of Arnold in Porter from 1982-86, specializing in international trade matters, including escape clause cases under U.S. law. He joined the University of Chicago faculty in 1986, and became the Frank and Bernice Greenberg Professor in 1996. His principal research interest is international trade, on which he has published numerous books and articles. His books include Product Standards for internationally Integrated Goods Markets (Brookings 1995), and Legal Problems of International Economic Relations (West 2002), co-authored with John H. Jackson and William J. Davey.

Table of Contents

Preface	ix
Table of WTO Panel and AB Reports	xvi
Table of GATT/WTO Documents	xx
Table of Other International Instruments and Legislation	xxv
List of Abbreviations	xxvii
CHAPTER 1: THE EVOLUTION OF SAFEGUARD MEASURES IN THE WTO/GATT SYSTEM: AN OVERVIEW	1	(33)
A The Genesis of the Safeguards Concept in the Pre-GATT Era	2	(3)
B The GATT Agreement	5	(9)
1 Mechanisms for Adjusting the GATT Bargain Over Time	5	(2)
2 The Design of Article XIX	7	(7)
C GATT Practice Under Article XIX and the Rise of Grey-Area Measures	14	(12)
1 Formal Reliance on Article XIX During the GATT Years	14	(1)
2 Safeguards Practice in Context: The GATT Dispute Settlement System	15	(2)
3 Textual Obsolescence: The "Unforeseen Developments" Clause	17	(2)
4 The Causation Conundrum	19	(2)
5 Prelude to the Uruguay Round: Grey-Area Measures and Their Critics	21	(5)
D Introduction to the Safeguards Agreement	26	(4)
E Safeguard Measures to Date in the WTO	30	(4)
1 Notified Legislation and Procedures	31	(1)
2 Provisional or Definitive Measures Undertaken	31	(1)
3 Safeguard Measures in the Dispute Resolution System	32	(2)
CHAPTER 2: ECONOMIC POLICY CONSIDERATIONS	34	(39)
A The Basic Economics of International Trade and Protectionism	35	(12)
B Basic Economics of Safeguard Measures: Efficiency and Distribution	47	(12)
1 The Economic Consequences of Safeguard Measures: A First Cut	47	(3)
2 Conventional Arguments for Safeguard Measures	50	(9)
(a) Restoring Competitiveness	51	(1)
(b) Orderly Contraction and Structural Adjustment	52	(4)
(c) Equity and Redistribution	56	(3)
C Safeguard Measures from a Political Economy Perspective	59	(14)
1 The Domestic Safety Valve Hypothesis	59	(2)
2 Safeguard Measures and "Cheating"	61	(3)
3 The Contractarian Perspective: Ex Ante vs. Ex Post Protection	64	(22)
(a) Some Preliminaries: Basic Lessons from Public Choice Theory	64	(3)
(b) Positive Implications	67	(3)
(c) Normative Implications	70	(3)
CHAPTER 3: PRELIMINARY ISSUES IN WTO SAFEGUARDS DISPUTES: BURDEN OF PROOF, STANDARD OF REVIEW, AND THE "RECORD"	73	(12)
A The Burden of Proof	73	(2)
B The Standard of Review at the Panel Stage: What Degree of Deference to National Authorities?	75	(6)
C The "Record" on Review and Related Issues	81	(3)
D The Standard of Review in the Appellate Body	84	(1)
CHAPTER 4: PROCEDURAL OBLIGATIONS IN THE AGREEMENT ON SAFEGUARDS	85	(16)
A The Committee on Safeguards	85	(1)
B The Procedural Obligations of National Authorities	86	(15)
1 Advance Publication and Notification of Investigative Procedures	87	(1)
2 Notification of Investigations	88	(1)
3 Due Process Requirements for the Conduct of Investigations	89	(1)
4 Publication Requirements Following an Investigation	89	(1)
5 Notification Requirements Following an Investigation or a Decision to Apply a Measure	90	(3)
6 Consultation Requirements Prior to Application of a Measure	93	(3)
7 Miscellaneous Notification and Consultation Requirements	96	(1)
8 The Issue of Confidential Information	97	(4)
CHAPTER 5: "UNFORESEEN DEVELOPMENTS" AND "THE EFFECT OF THE OBLIGATIONS INCURRED"	101	(19)
A The Resurrection of Article XIX(1), First Clause	102	(4)
B Establishing the "Effect of Obligations Incurred"	106	(2)
C Establishing the Link to "Unforeseen Developments"	108	(12)
1 In General	108	(3)
2 Factual Issues in Individual Cases	111	(9)
CHAPTER 6: THE INCREASED QUANTITIES REQUIREMENT	120	(17)
A The Baseline Issue During GATT	121	(2)
B Baselines and "Increased Quantities" in WTO Disputes to Date	123	(11)
C Summary and Critique	134	(3)
CHAPTER 7: SERIOUS INJURY, THREAT AND INDUSTRY DEFINITION	137	(19)
A Defining the "Industry"	138	(10)
1 General Guidance on the Meaning of "Like" and "Directly Competitive"	139	(3)
2 Industry Definition Issues in Safeguard Disputes to Date	142	(25)
(a) Imports and Prior Stages of Processing	143	(3)
(b) Multiproduct Firms	146	(2)
B "Serious Injury"	148	(3)
C Threat of Serious Injury	151	(5)
CHAPTER 8: THE CAUSATION REQUIREMENT AND "NON-ATTRIBUTION"	156	(55)
A The Economics of "Causation"	158	(9)
B The Causation Test Under U.S. Law	167	(7)
1 Determining the "Causal Contribution" of Increased Imports	168	(2)
2 Weighing the Effect of Imports Under the Substantial Cause Test	170	(4)
C The Causation Test in WTO Case Law	174	(16)
1 Korea—Dairy	174	(1)
2 Argentina—Footwear	175	(2)
3 United States—Wheat Gluten	177	(4)
4 United States—Lamb	181	(2)
5 United States—Line Pipe	183	(1)
6 Chile—Agricultural Products	183	(1)
7 United States—Steel	184	(5)
(a) Demonstrating the Causal Link to Imports	184	(4)
(b) Non-Attribution Analysis	188	(1)
8 Summary	189	(1)
D Possible Solutions	190	(21)
1 Sweep the Issues Under the Rug	191	(1)
2 Focus on the Unforeseen Developments	192	(2)
3 Focus on the Import Supply Curve	194	(7)
4 Focus on Hypothetical Quantitative Restrictions	201	(7)
5 Summary and Implications	208	(3)
CHAPTER 9: PERMISSIBLE MEASURES AND THEIR DURATION	211	(34)
A "To the Extent Necessary"	212	(6)
1 Justification for the Measure: The Timing Issue	212	(1)
2 Injury Attributable to "Other Factors"	213	(3)
3 The Adjustment Issue	216	(1)
4 Article 5.1, Sentence Two	217	(1)
B Selectivity	218	(18)
1 Economic Note	218	(2)
2 The Core Obligation: Article 2.2	220	(1)
3 Selective Quantitative Restrictions	221	(5)
4 The Doctrine of Parallelism	226	(6)
5 The Ultimate Question: Article XXIV and Selective Safeguards	232	(4)
C Duration and Review	236	(5)
1 Limits on Duration	237	(1)
2 Progressive Liberalization	238	(1)
3 Previously Protected Industries	239	(2)
D Provisional Measures	241	(1)
E Special Rules for Developing Countries	242	(3)
CHAPTER 10: COMPENSATION, RETALIATION AND THE PROHIBITION OF GREY-AREA MEASURES	245	(7)
A The New Rules on Compensation and Retaliation	245	(4)
B The Prohibition of Grey-Area Measures	249	(3)
Concluding Remarks	252	(2)
References	254	(5)
Appendices:	259	(80)
Appendix 1: General Agreement on Tariffs and Trade, Article XIX	261	(2)
Appendix 2: The WTO Agreement on Safeguards	263	(9)
Appendix 3: US. National Legislation (Sections 201-204 of the Trade Act of 1974, codified as 19 U.S.C. paras 2251-54)	272	(21)
Appendix 4: EC Legislation (Council Regulation (EC) No 3285/94 of 22 December 1994)	293	(16)
Appendix 5: National Legislation Notified to the Committee on Safeguards	309	(4)
Appendix 6: Safeguard Measures Notified to the Committee on Safeguards Since the Inception of the WTO	313	(21)
Appendix 7: Active Safeguard Investigations and Existing Safeguard Measures in Place as of November 3, 2005	334	(5)
Index	339