Provide an example of a recent safeguard measure imposed by a WTO member and explain its purpose within the WTO framework (5 marks)
Question
Provide an example of a recent safeguard measure imposed by a WTO member and explain its purpose within the WTO framework (5 marks)
Solution
One recent example of a safeguard measure imposed by a WTO member is the United States' imposition of tariffs on steel and aluminum imports in 2018.
Step 1: Identifying the measure In March 2018, the United States imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports. This was done under Section 232 of the Trade Expansion Act of 1962, which allows the President to adjust imports if they threaten to impair national security.
Step 2: Purpose of the measure The purpose of this measure was to protect the domestic steel and aluminum industries in the United States. The U.S. government argued that these industries were critical to national security, and that they were being threatened by cheap imports, particularly from China.
Step 3: Relation to the WTO framework Under the WTO framework, members are generally not allowed to impose tariffs or other restrictions on imports for the purpose of protecting domestic industries. However, there are exceptions to this rule. One of these exceptions is the "safeguard" provision, which allows a member to take action to protect a domestic industry from serious injury caused by increased imports.
Step 4: Justification under the safeguard provision In order to justify this measure under the safeguard provision, the United States would have to demonstrate that the increased imports of steel and aluminum were causing or threatening to cause serious injury to the domestic industries. The U.S. government argued that this was the case, citing a decline in domestic production and employment in these industries.
Step 5: Controversy and dispute This measure was controversial and led to disputes at the WTO. Other members, including China and the European Union, argued that the United States had not met the requirements for the safeguard provision and that the tariffs were therefore in violation of WTO rules. These disputes are still ongoing.
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