Provide an example of a recent safeguard measure imposed by a WTO member except USA and explain its purpose within the WTO framework (5 marks)
Question
Provide an example of a recent safeguard measure imposed by a WTO member except USA and explain its purpose within the WTO framework (5 marks)
Solution
One recent example of a safeguard measure imposed by a WTO member, other than the USA, is the safeguard measure imposed by India on imports of solar cells, whether or not assembled in modules or panels. This measure was imposed in July 2018 and is expected to last for a period of four years.
The purpose of this safeguard measure, within the WTO framework, is to protect the domestic industry from serious injury caused by increased imports. According to the WTO Agreement on Safeguards, a member may take a safeguard action, i.e., it may restrict imports of a product temporarily if its domestic industry is seriously injured or threatened with serious injury caused by a surge in imports.
In this case, India imposed a safeguard duty of 25% for the first year, 20% for the first six months of the second year, and 15% for the last six months. The aim was to protect the domestic solar industry from the sudden and significant increase in imports of solar cells.
The WTO framework allows for such measures in order to enable a level playing field for domestic industries. However, it also requires that such measures be gradually liberalized over time, to ensure that domestic industries do not become overly dependent on protection and can eventually compete without the safeguard measures.
In conclusion, the purpose of India's safeguard measure on solar cells within the WTO framework is to protect its domestic industry from serious injury due to a surge in imports, while also ensuring that the measure is temporary and gradually liberalized.
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