Safeguards and the Perils of Preferential Trade Agreements: Dominican Republic Safeguard Measures

Abstract

The legal-economic implications of how WTO members apply an import-restricting safeguard measure become more complex in light of the increasing web of trade concessions undertaken through their preferential trade agreements (PTAs) in addition to their WTO commitments. This paper examines a number of complex issues that arose in the WTO litigation between five new PTA partners through the Dominican Republic – Safeguard Measures disputes. First, we highlight the difficulties in assessing the extent to which safeguards imposed following a PTA are the result of PTA concessions relative to developments that pre-date or are otherwise unrelated to the PTA. Second, we analyze the WTO Panel decision through which a number of previously unresolved questions in the WTO’s safeguards jurisprudence arose. Third, we identify how safeguard-related provisions within a PTA may themselves give rise to constraints that subsequently affect how a country may apply safeguards made available under the WTO Agreements, and we describe some implications for PTA design and negotiation. Finally, we examine the broader implications that arise from the interplay of PTAs, safeguards, and dispute settlement in light of the availability of both relatively substitutable policy instruments and dispute resolution forums.