Safeguard Measures

What a safeguard measure is

A safeguard measure restricts imports that have increased sharply and are causing serious injury to the domestic industry. It is governed by the Safeguard Measures Ordinance, 2002 and the Safeguard Measures Rules, 2003.

It differs from anti-dumping and countervailing duties in three ways that matter commercially.

It does not require unfair trade

There is no allegation of dumping or subsidisation. The question is whether imports have surged and whether that surge is causing serious injury. Exporters trading entirely fairly can be caught.

It applies to everyone

Safeguard measures are applied on a non-discriminatory basis to imports from all sources, subject to the exemption for developing countries whose share falls below the thresholds in section 29 of the Ordinance. An exporter cannot escape a safeguard measure by demonstrating good conduct; it can only escape by falling within an exemption or by defeating the measure itself.

The injury standard is higher

Anti-dumping requires material injury. Safeguards require serious injury — a significant overall impairment of the domestic industry's position. That is a demanding threshold, and it is where safeguard cases are most often won and lost.

The features that create leverage

The domestic industry must submit an adjustment plan — a programme for adapting to import competition. The measure is meant to be temporary relief while the industry adjusts, not permanent protection. The credibility of that plan is examinable, and where the measure runs beyond one year the Rules require a timetable for its progressive liberalisation. Both are pressure points for a party opposing the measure, and both are obligations the applicant must actually discharge.

Provisional safeguard duties may be considered in the preliminary phase where delay would cause damage difficult to repair. Participating interested parties may submit written arguments concerning the preliminary phase, and the Rules set that deadline at not later than twenty-one days before the date proposed for the provisional determination — a short window that opens and closes early in the case.

Interested parties who wish to be heard must inform the Commission in writing by the date specified in the initiation notice, and the notice sets out the proposed schedule for the whole investigation. As with anti-dumping, participation is what creates the record, and the record is what any later challenge is decided on.

How we act

For domestic industries in assessing whether a safeguard application is the right instrument — and, often as importantly, whether an anti-dumping or countervailing route would be more effective — in preparing applications and adjustment plans, and in supporting them through investigation; for importers and exporters in opposing measures, in establishing developing-country exemption, and on liberalisation and duration; and in challenges to safeguard determinations.