The Safeguards Agreement is one of three World Trade Organisation (WTO) principal trade defence agreements. The UK and the European Community (EC) are party to all the agreements, which are and can be applied across all European Union member states.
This agreement differs from the other two as countries are entitled to take action in cases of unfair foreign competition arising from either anti-dumping, anti-subsidy, or both. The European Commission uses an independent mediator to guarantee fairness and the right of defence in trade proceedings.
Safeguards do not cover traders' allegations that the competition is unfair. They allow a WTO member to temporarily restrict imports of a product to protect a specific domestic industry. This could occur because unforeseen surges in imports cause or threaten to cause serious damage to that particular industry.
Measures can be applied under the Safeguards Agreement providing that all the following conditions prevail and apply during the term of the measures:
- They only apply for a temporary period.
- They are only imposed when the imports are found to cause or threaten serious injury to a competing domestic industry.
- They are applied to imports from all sources on a non-selective basis.
- The measures are progressively liberalised while in effect. The member imposing the safeguards may be required to compensate the members whose trade is affected.
For more information on the other two trade defence measures that the EC uses to protect its domestic industries from unfair competition from third countries, see: anti-dumping duty measures and anti-subsidies and countervailing measures.