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In the technical language of the World Trade Organization
World Trade Organization

The World Trade Organization is an international organization designed to supervise and Free trade international trade. The WTO came into being on 1 January 1995, and is the successor to the General Agreement on Tariffs and Trade , which was created in 1947, and continued to operate for almost five decades as a de facto international org...
 (WTO) system, a safeguard is a tool used by a state to restrain international trade
International trade

International trade is exchange of Capital , goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product ....
 to protect a certain home industry from foreign competition. A member may take a “safeguard” action (i.e., restrict importation of a product temporarily) to protect a specific domestic industry from an increase in imports of any product which is causing, or which is threatening to cause, serious injury to the domestic industry that produces like or directly-competitive products.

Background
Safeguard measures were always available under the General Agreement on Tariffs and Trade
General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade was the outcome of the failure of negotiating governments to create the International Trade Organization ....
 (GATT) (Article XIX).






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In the technical language of the World Trade Organization
World Trade Organization

The World Trade Organization is an international organization designed to supervise and Free trade international trade. The WTO came into being on 1 January 1995, and is the successor to the General Agreement on Tariffs and Trade , which was created in 1947, and continued to operate for almost five decades as a de facto international org...
 (WTO) system, a safeguard is a tool used by a state to restrain international trade
International trade

International trade is exchange of Capital , goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product ....
 to protect a certain home industry from foreign competition. A member may take a “safeguard” action (i.e., restrict importation of a product temporarily) to protect a specific domestic industry from an increase in imports of any product which is causing, or which is threatening to cause, serious injury to the domestic industry that produces like or directly-competitive products.

Background


Safeguard measures were always available under the General Agreement on Tariffs and Trade
General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade was the outcome of the failure of negotiating governments to create the International Trade Organization ....
 (GATT) (Article XIX). However, they were infrequently used, and some governments preferred to protect their industries through “grey area” measures (“voluntary” export restraint arrangements on products such as cars, steel and semiconductors). As part of the WTO deal, members gave up these “grey area” measures and adopted a specific WTO Safeguards Agreement which disciplines the use of safeguard measures.

Safeguards are usually seen as responses to fair trade behaviour, as opposed to unfair trade practices such as

  • Dumping
    Dumping (pricing policy)

    In economics, "dumping" can refer to any kind of predatory pricing. However, the word is now generally used only in the context of international trade law, where dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is b...
  • Subsidy
    Subsidy

    In economics, a subsidy is a form of financial assistance paid to a business or economic sector. A subsidy can be used to support businesses that might otherwise fail, or to encourage activities that would otherwise not take place....


As such they are supposed to be used only in very specific circumstances, with compensation, and on a universal basis, i.e., a member restricting imports for safeguard purposes will have to restrict imports from all other countries. However, exceptions to this non-discriminatory rule are provided for in the Agreement on Safeguards itself as well as in some ad hoc
Ad hoc

Ad hoc is a List of Latin phrases which means "for this [purpose]". It generally signifies a solution designed for a specific problem or task, non-generalisable and which cannot be adapted to other purposes....
 agreements. In this last respect it is worthwhile noting that the People's Republic of China
People's Republic of China

The People's Republic of China , commonly known as China, is the largest country in East Asia and the List of countries by population in the world with over 1.3 billion people, approximately a fifth of the world's population....
 has accepted that discriminatory safeguards may be imposed on its exports to other WTO members until 2013.

Regional trading arrangements have their own rules relating to safeguards. Some safeguard measures can be resorted to in the area of services, as provided for in the General Agreement on Trade in Services
General Agreement on Trade in Services

The General Agreement on Trade in Services is a treaty of the World Trade Organization that entered into force in January 1995 as a result of the Uruguay Round negotiations....
 (GATS).

See also

  • World Trade Organization
    World Trade Organization

    The World Trade Organization is an international organization designed to supervise and Free trade international trade. The WTO came into being on 1 January 1995, and is the successor to the General Agreement on Tariffs and Trade , which was created in 1947, and continued to operate for almost five decades as a de facto international org...
     (WTO)