The WTO’s safeguards agreement establishes rules for the application of safeguard measures by WTO member countries. A safeguard is a temporary import restriction (e.g., a quota or tariff increase) that a country is allowed to impose on a product if imports of that product are increasing to an extent that causes or threaten to cause serious injury to a domestic industry that produces a similar or directly competitive product. Under the WTO rules, member countries must conduct an investigation before they can apply a safeguard measure, and they must make a formal determination that imports of the product are significantly impairing or threatening to impair a domestic industry. They are only temporary (applied up to four years, with the possibility of an extension for another four) and must be applied on a nondiscriminatory basis and removed as conditions warrant. The WTO encourages countries imposing safeguards to compensate exporting nations by reducing tariffs on other products (Trebilcock and Howse, 2005).
Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.
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