WORLD TRADE
ORGANIZATIONG/SG/64
28 July 2003
(03-4013)
Committee on Safeguards
REPORT TO THE GENERAL COUNCIL CONCERNING THE REVIEW BY THE
SAFEGUARDS COMMITTEE OF THE AFRICAN GROUP'S S&D PROPOSAL ON
ARTICLE 9 OF THE SAFEGUARDS AGREEMENT
1. Background
1. On 15 May 2003, the General Council instructed the Safeguards Committee (the
"Committee") to consider a proposal from the African Group concerning paragraphs 1 and 2 of
Article 9 of the Safeguards Agreement (see doc ument WT/GC/M/80, section 2).  The proposal, set
forth in document TN/CTD/W/3/Rev.2, provides that:
It is understood that paragraphs 1 and 2 of Article 9 of the Agreement
are respectively:
(i) a binding prohibition against taking safeguard measures
against products from developing country Members that do not
exceed 3 per cent of imports of a Member; and
(ii) a binding right for developing country Members to extend
safeguard measures for an additional two years and to take freshsafeguard measures against products previously the subject of
safeguard measures.
2. The Committee was required to consider the above proposal as soon as possible, and on the
basis of a specifically drawn-up time schedule of work.  The Committee was further required to report
to the last meeting of the General Council before the Cancún Ministerial Conference, on the status of
the proposals and the progress made in this regard.  Accordingly, the Safeguards Committee held
informal consultations on the African Group's proposal on 27 June, and on 10 and 18 July.  TheCommittee also met formally in special session to adopt its report to the General Council on 24 July.
2. Introduction of the proposal
3. During the abovementioned informal consultations, the African Group indicated that the
proposal was designed to simplify the operation of  Article 9, clarify developing country Members'
rights under that provision, and facilitate development by developing country Members.  The AfricanGroup stated that the proposal was not intended to amend Article 9, but should instead constitute an
interpretation of that provision within the meaning of Article IX.2 of the Agreement Establishing the
WTO.  The African Group confirmed that the first part of its proposal would result in the non-
application of the Article 9.1 cumulation provision, and that the second part of its proposal would
make the extension of safeguard measures taken by developing country Members "almost automatic".The African Group's comments prompted an exchange  of written questions and answers (see Annexes
A and B respectively).G/SG/64
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3. Discussion on part (i) of the proposal
4. Some delegations supported the first part of the proposal, on the condition that it would
benefit all developing country Members, and not merely African Group Members.  One Member
suggested an amendment to the proposal, to clarify that part (i) of the proposal referred to three per
cent of imports of the product concerned by the investigation, rather than three per cent of total
imports.
5. Some delegations suggested that the non-application of the Article 9.1 cumulation provision
could undermine the effectiveness of safeguard measures in cases where developing country Members
individually accounting for less than three per cent of relevant imports collectively account for a
significant proportion of total imports.  However, one delegation indicated that such a situation would
only arise in very limited circumstances.  The African Group stated that Members should focus on the
impact of safeguard measures on exporting Members, rather than focusing on the concerns of theimporting Member taking the safeguard measure.  The African Group also indicated that the
application of the Article 9.1 cumulation provision resulted in uncertainty, since exporters in a
developing country Member accounting for less than three per cent of the relevant imports did not
know whether their exports would be included in or excluded from a safeguard measure until the
results of the cumulation exercise were made available.
6. Some Members expressed concern that the non-application of the Article 9.1 cumulation
provision could undermine the effectiveness of safeguard measures taken by developing country
Members in particular, since a much larger percentage of imports would be excluded from such
measures.  The African Group stated that the non-application of the cumulation provision would have
less impact in respect of safeguard measures imposed by developing country Members (thansafeguard measures imposed by developed country Members) since the volume of south/south trade is
less than the volume of north/south trade.  One delegation asserted that safeguard measures were
product-specific, so the impact of a safeguard meas ure on south/south trade could not be ascertained
by looking at general trade flows.  Depending on the product under investigation, the volume of
south/south trade, and therefore the impact of the first part of the proposal on that trade, might besignificant.
7. One delegation queried the need for the first part of the proposal, given its understanding that
least developed countries were in practice excluded from the scope of safeguard measures under the
current provisions of Article 9.  The African Gro up stated that Members should not be bound by past
experience concerning the application of Article 9.1.
4. Discussion on part (ii) of the proposal
8. There was no explicit support for the second part of the proposal.  Some delegations
expressed concern that unrestricted extensions of safeguard measures by developing country Members
could adversely affect exports from other develo ping country Members.  One delegation asked what
was wrong with the operation of the extension and re-application provisions of Article 9.2 in their
present form.
9. One delegation queried the relationship between the words "binding" and "right".
5. Conclusion
10. The informal consultations indicate that there is no consensus in the Committee on the
African Group's proposal.G/SG/64
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ANNEX A
WTO Committee on Safeguards
Proposal by the African Group   -TN/CTD/W/3/Rev.2
Questions presented by various delegations
Proposal
The proposal by the African Informal Group of Countries, provides that:
It is understood that paragraphs 1 and 2 of Article 9 of the Agreement are respectively:(i)  a binding prohibition against taking safegu ard measures against products from developing
country Members that do not exceed 3 per cent of imports of a Member; and
(ii)  a binding right for developing country Members to extend safeguard measures for an
additional two years and to take fresh safeguard measures against products previously the
subject of safeguard measures.
Questions
• Do the proponents contend  that under Article 9.1, there should be “a binding prohibition
against taking safeguard measures against prod ucts from developing country Members that do
not exceed 3 percent of imports of a Member,” regardless of whether the last clause of
Article 9.1 is satisfied (“provided that developing country Members with less than 3 per cent
import share collectively account for not more than 9 per cent of the total imports of the
product concerned”)?
• Do the proponents intend for their proposal to mean “do not exceed 3 per cent of total imports
of a Member of the product concerned?”
• Do proponents seek to make this “cumulation” provision of Article 9.1 inapplicable?• Couldn’t such a change result in making safeguard measures applied by other developing
countries much less effective, given that a much larger percentage of imports would beexcluded from such a measure?
Article 9.2 of the Safeguards Agreement already provides that “a developing country Member shall
have the right to extend the period of application of a safeguard measure for a period of up to two
years beyond the maximum provided for in paragraph 3 of Article 7.”
• In proposing “a binding right for developing county Members to extend safeguard measures
for an additional two years”, do the proponents contend that developing country Members
should have such a binding right regardless of whether the requirements of Article 7 of the
Agreement (including Articles 7.1, 7.2 and 7.4) for an extension are satisfied?
• If these requirements no longer applied, coul dn’t exporters from developing countries be
adversely affected if other developing countries extended safeguard measures even whereG/SG/64
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those measures were no longer necessary to prevent or remedy serious injury and to facilitate
adjustment?
The second sentence of Article 9.2 provides that “notwithstanding the provisions of paragraph 5 of
Article 7, a developing country Member shall have the right to apply a safeguard measure again to theimport of a product which has been subject to such a measure, taken after the date of entry into force
of the WTO agreement, after a period of time equal to half that during which such a measure has
been previously applied , provided that the period of non-application is at least two years .” (emphasis
added).
• In proposing a “binding right” for developing countries to “take fresh safeguard measures
against products previously the subject of safeguard measures”, do the proponents contendthat the conditions in Article 9.2, including the specified minimum period of non-application,
should no longer apply?
• Do the proponents contend that there should be a binding right to apply such a fresh safeguard
measure regardless of whether the requirements of Article 2.1 of the Safeguards Agreementfor a safeguard measure are satisfied?
• Do the proponents envision the possibility of more than one two-year extension?• Couldn’t exporters from other developing coun tries be adversely affected where a developing
country Member applies a fresh safeguard measure on the same product without being required to
comply with the other provisions of the Agreement?G/SG/64
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ANNEX B
RESPONSES TO QUESTIONS PRESENTED BY VARIOUS DELEGATIONS TO THE PROPOSAL BY THE
AFRICAN GROUP (TN/CD/W/3/R EV.2) IN RELATION TO ART. 9.1 AND 2 OF THE WTO
SAFEGUARDS AGREEMENT
QUESTIONS RELATING TO ART. 9.1
Question Response
Do the proponents contend that
under Article 9.1, there should be“a binding prohibition againsttaking safeguard measures againstproducts from developing country
Members that do not exceed 3
percent of imports of a Member,”regardless of whether the lastclause of Article 9.1 is satisfied?The last clause of Art. 9.1 may limit the extent of S&D benefits that
developing country Members may derive from the provision. Art. 9.1is an S&D provision that essentially seeks to ensure that the marketaccess opportunities made available to developing countries in theproduct concerned are made secure from any safeguard measures,
subject to the 3% import share limitation. The proposal, hence,
focuses on the essential S&D element in Art. 9.1, with the objective ofensuring that such element, in particular, is made effective, clear, andoperational.
Do the proponents intend for their
proposal to mean “do not exceed
3 percent of total imports of aMember of the productconcerned”?Yes
Do proponents seek to make this
“cumulation” provision of Article
9.1 inapplicable?The proponents note that the “cumulation” provision referred to may,
in actual application, prove restrictive in terms of ensuring the full and
effective implementation of the S&D intent of Art. 9.1 in favor ofdeveloping country Members. That is, Members that meet the 3%import share parameter may still be unable to enjoy the protection ofArt. 9.1 due to the application of the “cumulation” provision in thelast clause thereof. For example, the US safeguard action on imports
of steel wire rod did not exclude developing countries from the scope
of the safeguard measure because imports of steel wire rod fromdeveloping countries exceeded the 9% cumulative threshold level (seepara 67, G/SG/M/15).
Flexibility should hence be provided  in terms of the applicability, or
the conditions for such applicability, of the “cumulation” provision todeveloping country Members.  Such kind of flexibility in the
application of the “cumulation” provision was shown by the EuropeanCommunities when it excluded most imports of steel products fromdeveloping countries from the scope of its safeguard action on steel
imports (see G/SG/N/6/EEC/1, G/ SG/N/7/EEC/1, G/SG/N/11/EEC/1)
“even if taken together imports under 3 per cent represented morethan 9 per cent of total imports” (para. 46, G/SG/M/19). However,
such flexibility must not be made dependent on the unilateral decisionof the Member adopting the safeguard action, but rather should bemade an integral part of the S& D right accorded to developing
countries under Art. 9.1.
Couldn’t such a change result in
making safeguard measures
applied by other developingAny impacts on safeguard measures applied by other developing
countries are more likely to affect imports from developed countries
rather than imports from other developing countries due to theG/SG/64
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countries much less effective,
given that a much largerpercentage of imports would be
excluded from such a measure?predominance of developed countries in global trade flows. While
such a change may make safeguard measures applied by otherdeveloping countries possibly less effective vis-à-vis imports from
other developing countries, this most likely will not be the case given
than imports from developing countr ies, especially African countries,
are less likely to meet the 3% threshold than are imports fromdeveloped countries. In most cases, developing countries applysafeguard measures to combat sudden surges of imports from
developed countries and thus prevent or remedy serious injury to, or
to facilitate adjustment of, their domestic industries.
This is clearly shown in the fact that of the 102 safeguard
investigations initiated between 01/01/1995 and 28/10/ 2003, 69 were
initiated by developing countries, resulting in the imposition by them
of 40 out of the 56 preliminary or definitive safeguard measures
applied during the same period. However, more than half (around55%) of the Art. 9.1 notifications received during the same period by
the WTO Committee on Safeguards were submitted by developingcountries, thereby excluding imports from other developing countries(with some case-by-case exceptions) from the scope of application of
the safeguard measure.
Safeguard measures applied by other developing countries would,
therefore, still be as effective.
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