Law Essays Sample Paper on The world trade organization’s safeguard measures

The world trade organization’s safeguard measures

Introduction

On December 20 2013, the Australian productivity commission established that for the products under reference, the definitive safeguard measures were unwarranted. The said products were the imported citrus, pears, peaches, apricots, mixtures and other fruits (Harris and Barratt 5). These products came from the WTO’s countries, and under the agreement on safeguard measures, Australia did not have the mandate to restrict the importation of these products unreasonably.[1] Consequently, the Australian government mandated the productivity commission with establishing whether the government had the right to warrant the definitive safeguard measures of the WTO or not. Upon conducting the exercise, the commission established that the definitive safeguard measures were unwarranted (Harris and Barratt 19). This essay evaluates my understanding for this principle as well as the applicable cases of the agreement on safeguard measures.              

My understanding for the principle

My understanding for this principle is that the Australian government did not have the right to restrict the importation of the products under reference. This means that despite the fact that the Australian fruit industry was suffering injuries; the Australian government did not have the right to impose the definitive safeguard measures to protect its domestic fruit industry (Macrory, Arthur and Michael 751). In other words, even if the world trade organization (WTO) gives its member countries the rights to impose some safeguard measures to protect their domestic markets, the condition in Australia did not warrant the imposition of those measures. From another perspective, my understanding is that any time the surge in import threatens or injures the domestic market or industry of a member country of the WTO, the member country can restrict importation temporarily (Bossche 637). However, this should take place under certain conditions established by the WTO.[2]  

In relation to this case, the WTO has established certain measures under which the member countries can impose the safeguard measures, and they are as it follows.[3] First, the increase in imports to the member countries should be high such that it causes injuries to the domestic markets or industries. If the increase does not cause any injury to the domestic market, then the member country should not impose the definitive safeguard measures. Second, the increase in import and its injuries to the domestic market should meet the criteria for imposing the safeguard measures. If not, then the safeguard measures do not apply. Therefore, in order for the member countries to impose the safeguard measures, the member countries should prove beyond doubt that the prevailing conditions in their domestic markets warrant the imposition of the measures (Alexander and Mads 132). Otherwise, the member countries cannot apply those measures. It is in this relation the Australian government mandated the productivity commission with the task of ascertaining whether the government had the right to impose the measures or not.   

The first relevant agreement on safety that led to the commission’s conclusion that the definitive safety measures were unwarranted was the non-interference of the recent surge in import with the domestic market. Under this measure, the commission had the mandate to determine whether the importation of the products under reference caused any injury to the Australian domestic market or not. In case, the importation of the said products caused any injury to the domestic market, then the importation of such products would warrant the imposition of the definitive safety measures. On the contrary, if the importation of such products did not cause any injury to the domestic market, then the importation of those products would not warrant the imposition of the safety measures. With respect to this measure, the commission found that the domestic fruit industry was suffering serious injuries, but the recent surge in imports for the products under reference did not cause the injuries. The most affected company in this case was the Coca-Cola Amatil Company that wrote off some of its SPC Ardmona’s assets valued at $146 million.[4] In addition, the company’s sales and profit declined within the five years the commission conducted its investigation (Harris and Barratt 11).

However, on a closer examination of the case as the safety measures required, the commission established that the importation of the products under reference did not cause the injury. In this case, the commission established that even if one category of the products under reference increased its imports in both relative and absolute terms, other products did not increase their imports in both relative and absolute terms. The commission further established that even if this was the case, the increase in import for the mixture did not cause injury to the domestic market and industry. In this case, the commission established that the increase in imports for the said products did not cause price pressure in the domestic market (Rao and Manjula 153). The commission argued that the importation for the products under reference could only cause injury in the domestic market if it reduced the market prices for the products, but it did not reduce it. As a result, the commission established that other factors other than the ones related to the products under reference caused the injuries in the domestic market. In this case, the commission established that the domestic market suffered the serious injuries from the decrease in demand for the processed fruits; thus, this had nothing to do with the imports. The commission also established that the Australian market suffered from the reduced export volumes of the processed fruits other than the importation of the products under reference. With regard to this aspect, the commission showed that domestic production depended heavily on the exports that had reduced lately.  The commission also attributed the serious injuries in the domestic market to the rising costs of production that Australian companies experienced in the production of the processed fruits. For example, the commission showed that the profit for the SPC Ardmona, one of the most affected companies in the fruit industry, resulted from the rising costs of production. The other factors that the commission attributed to the serious injuries were the strategies in labeling fruit products in supermarkets and the usage of imports in enhancing supply reliability (Harris and Barratt 16). Based on these reasons, the commission showed that the recent surge in imports for the products under reference did not cause the injuries in the Australian fruit industry. Consequently, the commission concluded that the definitive safety measures were unwarranted.                   

The second relevant agreement that led to the commission’s conclusion that the definitive safety measures were unwarranted was the fact that there was no increase in the imports for the products under reference. Again, in this case, the commission had the mandate to determine whether there was an increase on the imports for the products under reference or not. If the increase of the said products threatened the domestic market, then it would justify the introduction of the security measures. On the contrary, if there were no increase in the importation of the products under reference, then there would be no warrant for the imposition of the definitive safety measures. In order to determine whether there was an increase of the same or not, the commission considered the trend of the imports for the products under reference for the last five years (Harris and Barratt 7). The commission also extended this timeframe beyond the five years to have a clear picture of what was happening, and on conducting the investigation; the commission established that there was no increase in the import for the said products and for the ones that increased, they did not cause injury to the domestic market. With respect to this finding, the commission concluded that the definitive safety measures were unwarranted because the import of the said products did not cause injuries to the domestic market.   

The third relevant agreement that led to the commission’s conclusion that the definitive safety measures were unwarranted was the fact that the prevailing conditions in Australia did not warrant the imposition of the safeguard measures. For the definitive safeguard measures to be warranted, the prevailing condition in Australia should have demonstrated the need to warrant the measures. However, the commission established that majority of the conditions that necessitated the imposition of the safeguard measures were not met; thus, the commission concluded that the definitive safety measures were unwarranted (Harris and Barratt 17).  

Conclusion

This essay highlights my understanding for the principle that led to the commission’s conclusion that the definitive safety measures were unwarranted for the products under reference. The essay outlines what I understand from the principle as well as the applicable cases that led to the commission’s conclusion.

Work cited

Alexander, Kern, and Mads Andenaes. The World Trade Organization and Trade in Services. Leiden: Martinus Nijhoff Publishers, 2008. Print.

Arup, Christopher. The New World Trade Organization Agreements: Globalizing Law Through Services and Intellectual Property. Oakleigh, Vic: Cambridge University Press, 2000. Print.

Bossche, Peter . The Law and Policy of the World Trade Organization: Text, Cases, and Materials. , 2005. Print.

Davey, William. Non-discrimination in the World Trade Organization: The Rules and Exceptions. The Hague: Hague Academy of International Law, 2012. Print.

Harris, Peter, and Barratt Paul. Safeguards inquiry into the import of processed fruit products. http://www.pc.gov.au/__data/assets/pdf_file/0019/131194/fruit-safeguards.pdf  

Macrory, Patrick, Arthur Appleton, and Michael Plummer. The World Trade Organization: Legal, Economic and Political Analysis. New York: Springer, 2005. Internet resource.

Rao, M., and Manjula Guru. Wto and International Trade. New Delhi: Vikas Publishing House, 2003. Print.


[1] Arup, Christopher. The New World Trade Organization Agreements: Globalizing Law Through Services and Intellectual Property. Oakleigh, Vic: Cambridge University Press, 2000. Print. [the agreement allows the member countries to impose regulatory measures that are consistent with the WTO]

[2] Alexander, Kern, and Mads Andenaes. The World Trade Organization and Trade in Services. Leiden: Martinus Nijhoff Publishers, 2008. Print.

[3] Davey, William. Non-discrimination in the World Trade Organization: The Rules and Exceptions. The Hague: Hague Academy of International Law, 2012. Print. [The WTO agreement contains agreements that relate to trade goods among member countries].

[4] Harris, Peter, and Barratt Paul. Safeguards inquiry into the import of processed fruit products. [SPC Ardmona company had experienced challenges in its profit and sale; thus, had formally conveyed its concerns to the Australian government. The Australian government, on the other hand, mandated its productivity commission to undertake an inquiry into the matter].