Does Safeguards Need Saving? Lessons from the Ukraine-Passenger Cars Dispute

authored by

Arevik Gnutzmann-Mkrtchyan, Simon Lester

Abstract

The Panel Report in Ukraine-Passenger Cars provides an opportunity to revisit an old debate over the role of safeguard measures in the WTO. With regard to the legal findings, the Panel followed the established jurisprudence in this area, and found a number of violations of the Safeguards Agreement. With regard to the economics, we delve more deeply into the economic and political background of the safeguards investigation. Ukraine was hit by the economic crisis shortly after its WTO accession that significantly liberalized import tariffs on passenger cars. Next, we offer a de novo look at the injury and causation issues in this case, and discuss the challenges of an industry reliant on offshored production that sees a safeguard as a mechanism to attract foreign direct investment (FDI) for production. We conclude with an assessment of the operation of the WTO's safeguards regime, along with some tentative suggestions for reform. Overall, our examination of the economic analysis by the investigating authority and the legal review by the WTO Panel raises questions about particular aspects of the domestic and WTO processes, but concludes that the system worked well in this case.

Organisation(s)

Institute of Macroeconomics

External Organisation(s)

Cato Institute

Type

Review article

Journal

World trade review

Volume

16

Pages

227-251

No. of pages

25

ISSN

1474-7456

Publication date

01.04.2017

Publication status

Published

Peer reviewed

Yes

ASJC Scopus subject areas

Economics and Econometrics, Political Science and International Relations, Law

Sustainable Development Goals

SDG 10 - Reduced Inequalities

Electronic version(s)

https://doi.org/10.1017/s1474745616000525 (Access: Closed)