One Step Forward and Two Steps Back? Evolution of Bilateral Safeguard Provisions in Preferential Trade Agreements

Abstract

There is an emergence of including bilateral safeguard provisions in Preferential Trade Agreements (PTAs). Most PTAs embed bilateral safeguard provisions to buffer the risk of import surges caused by tariff reductions in the intra-PTA trade. These provisions can be applied only between the PTA members, and they mainly have legal effect during the transitional period of forming a customs union or a free trade area. These provisions are linguistically similar to the multilateral safeguard codes (MSCs), i.e., Article XIX General Agreement on Tariffs and Trade (GATT) and the Agreement on Safeguards (SA), some of them even directly incorporate or copy some of the language from MSCs. This article observes that these bilateral safeguard provisions reveal ‘evolving’ features and can be mapped into three generations. Aside from the great similarity as compared to the MSCs, in the Laissez-faire of PTAs, bilateral safeguard provisions deviate from the WTO rulings: on the one hand, they are more trade-friendly since they primarily limit the form of safeguard measures to tariffs, and the duration is significantly shorter; on the other hand, they deviate from the important value of WTO since the special and differential treatment for the developing countries are hardly addressed in the North-South PTAs, the same applies to the prohibition of ‘grey area’ measure. bilateral safeguard, WTO, preferential trade agreement, ‘grey area’ measure, de minimis provision, special and differential treatment, Committee on Safeguards