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Safeguard measures
08/12/2022 06:35
United States trade remedy laws are commonly understood to address 'unfair' trade practices that violate international rules of conduct. In the context of import trade, United States anti-dumping and countervailing duty laws are typical examples. Nonetheless, United States trade remedy laws also offer a response to fairly traded imports under certain conditions. Such responses, commonly referred to as 'safeguard' measures, can result in significant import restraints, and are offered under a variety of laws. This chapter will focus on the most important of these measures applicable to WTO Members. These measures are authorized under three separate statutes. The oldest of these statutes, Section 201 of the Trade Act of 1974, as amended, provides the authority for imposing global safeguard measures. China-specific authority is found under the two remaining statutes. Section 421 of the Trade Act of 1974, as amended, offers a 'market disruption' remedy for imports from China generally, while Section 204 of the Agriculture Act of 1956, as amended, is the foundation of a regulatory scheme focused on imports of Chinese textiles. These China-specific restrictions were implemented in conjunction with China's accession to WTO.
Measures under each of these trade remedies have been on the rise in recent years. Although Section 201 was considered something of a 'dead letter' for many years, domestic industry interest in filing Section 201 petitions increased in the late 1990s, culminating in a massive Section 201 investigation of steel imports conducted in 2001. With respect to China, no less than five Section 421 investigations were conducted in the first 18 months after China acceded to WTO. In the area of textiles, between 2003 and May 2005, 23 petitions were filed targeting imports from China. Foreign companies therefore need to be aware of these laws, and how they can affect their commercial interests.
