Title

Beggar-Thy-Neighbor? Why the WTO Appellate Body’s Enforcement of a Rigorous “Parallelism Requirement” Limits the Exemption of Regional Trade Agreement Partners from the Application of Safeguard Measures

Abstract

The recent WTO Appellate Body decision in U.S. – Steel Safeguards provided a new wrinkle in the AB’s treatment of Regional Trade Agreement members who seek to exempt each other from the application of safeguard measures. Previously, the AB had supported a rigorous “parallelism requirement” compelling Members to equate the scope of the countries investigated with the scope of the countries upon which the safeguard measures would be applied before it would consider whether Article XXIV provided an affirmative defense permitting the exclusion of RTA partners from the application of such measures. Where there was an impermissible “gap” as between the scope of the investigation and ultimate application, the AB would refuse to rule on whether an Article XXIV defense was permissible. In U.S. – Steel Safeguards, however, the AB went a step further and announced that even where RTA partners are excluded from the injury and causation investigation all together, the Member seeking to impose safeguard measures must still take into account imports from RTA partners as “other factors” under the non-attribution principle in order to exempt its RTA partners. This ruling is, in fact, a new additional obligation and is contrary previous AB decisions as it finds the requirements of Article XIX and the Agreement on Safeguards to be more important than the requirements under Article XXIV.

Disciplines

International Law | International Trade Law

Date of this Version

January 2004