First WTO Case on Transitional Product-Safeguard Measure under Section 16 of the Protocol of China’s Accession to the WTO: Affirming Discriminatory Safeguard Measure by the WTO?

Abstract

On 5 September 2011, the WTO issued the Appellate Body report for the first WTO case on a transitional product-specific safeguard measure, United States - Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China (U.S. - Tyres). Transitional product-specific safeguard measures (TSMs) are controversial primarily on two grounds. First, unlike a general safeguard measure (GSM) which must be applied non-discriminatorily to all imports regardless of their source, a TSM is applicable only to the imports from a single country, China. Second, a TSM is applicable under more relaxed conditions than those stipulated for a GSM, subjecting imports from China to a more vulnerable condition against the protectionist pressure from competing domestic producers of the importing countries. The core principle of the WTO disciplines, including those for safeguard measures, is the most-favored-nation (MFN) principle which stipulates the requirement of non-discrimination among nations, and the inherently discriminatory nature of TSM undermines this core principle. This article examines the TSM provisions in comparison to the general safeguard provisions and discusses the implications of the first WTO case, U.S. -Tyres, for the TSM regime.