1What is safeguard under WTO regime?
Under the WTO multilateral Trading System, a member country has the right to protect its domestic industry if it is found that imports of a specific product has increased substantially in absolute terms or relative to domestic production in the recent period. If these increased imports are causing injury to the domestic industry, this can be remedied by imposing an appropriate measure/duty. This is called safeguard measure/duty under the WTO agreement on safeguards.
2Is this provision available to Pakistani industry also?
Yes, Pakistan, being Member of WTO, has promulgated Safeguard Measures Ordinance 2002 to provide protection to the domestic industry from surge in imports of any specific product. The National Tariff Commission (NTC) Islamabad is responsible to process the application for imposing safeguard measures/ duty.back to top
3What are basic requirements to seek protection under the Safeguard Measures Ordinance 2002?
The applicant industry has to show that there is surge in imports because of certain unforeseen developments, which cannot be remedied due to WTO obligations assumed by Pakistan, and certain unforeseen developments;
- There is surge in imports of a specific product
- There is injury to the domestic industry producing like product
- There is causal link between the surge in imports and the injury to the domestic industry.back to top
4What are the basic conditions for a safeguard action?
The following are basic conditions for a safeguard action to be taken.
- There is sudden increase in imports
- Which cannot otherwise, be remedied because of WTO obligations assumed by the Pakistan
- There is some unforeseen development for increase imports;
- There is serious injury to the domestic industry caused by increased imports.
5What is unforeseen development?
Any expected event or development, which was not foresee able at the time of making commitments under the WTO Agreement are deemed to be unforeseen developments.back to top
6What are obligations assumed under WTO?
- The WTO obligations assumed include mainly tariff bindings given by any country and the elimination of quotas.
- For details of tariff bindings are available on websites of NTC and WTO.
7Can safeguard action be taken for protection of industry below bound rates?
The countries have liberty to increase the duties up to bound rates under WTO obligations; therefore, there is no need to take a safeguard action.
8How does NTC process an application for safeguard measures?
On receipt of a properly documented and complete application, NTC issues notice of initiation of an investigation in this regard in the newspapers. In order to solicit views/ comments of interested parties a public hearing can also be held. After having collected all relevant evidences, NTC carries out necessary analysis and prepares its recommendation for imposing an appropriate safeguard measure against the specific product. This recommendation is forwarded to the Federal Government for consideration and imposition.
9Is NTC’s recommendation final and binding on Government?
No, the recommendation of NTC is not binding on the government. It is prerogative of the government to implement NTC’s recommendations wholly or partially or not at all.
10Why in case of safeguard, the government is final authority?
Because, in case of safeguard, the federal government is supposed to negotiate with the countries, which are expected to be affected adversely from the safeguard measure/ duty, recommended by NTC.
11Is safeguard measure imposed against a specific country?
No, the safeguard measure is imposed against the specific product across the board on an MFN basis i.e. measure is imposed on the specific product coming from any source.
12How can indigenous industry apply for imposition of a safeguard measure?
The prescribed application forms are available with National Tariff Commission Islamabad. The applicant industry may obtain this application form and get it duly filled in supported by relevant evidences and fee (Rs. 75,000/- in the form demand draft) to the Secretary NTC. The application form and relevant law, rules etc are also available on NTC website.
13How an appeal against the imposition of safeguard measure/ duty can be made?
Once a definite safeguard duty is imposed, it can be appealed through the Dispute Settlement Mechanism of the WTO by any affected country.