RESTRICTEDWORLD TRADE
ORGANIZATIONG/SG/M/21
20 June 2003
(03-3313)
Committee on Safeguards
MINUTES OF THE SPECIAL MEETING
HELD ON 5 DECEMBER 2002
Chairman:  Mr. Gustavo Lunazzi (Argentina)
1. The Committee on Safeguards (the "Committee") held a special meeting on
5 December 2002.
2. The following agenda was adopted:
"Adoption of the Committee's report to the Trade Negotiations Committee on
outstanding implementation issue tiret 84."
3. The Chairman referred to a draft report to the Trade Negotiations Committee on outstanding
implementation issue tiret 84, which had been made available to delegations in advance of this
meeting.  The Chairman opened the floor for comments on the draft report.
4. The representative of Colombia recalled that before the formal Committee meeting in
April 2002 Colombia had submitted a document which, besides including certain details fleshing out
its proposal, explained the reasons that had brought Colombia to improve market access through an
improvement in Article 9.1 of the Safeguards Agreement, which was a special provision on special
and differential treatment.
5. Colombia noted that it had gained support for its proposal from a large number of developing
countries.  Colombia highlighted among those comments the emphasis that was placed on the fact that
safeguards was a remedy that was applied on fair trade, and in respect of which developing countriesshould be given more flexibility.  Likewise, emphasis was placed on the appropriateness of this
proposal in the current context of the negotiations  and specifically with regard to the mandate on
industrial goods.
6. Colombia thanked the Committee for the interest in its proposal.  Colombia considered most
valuable the discussions that were held in April and October 2002, in both formal and informalmeetings.  Colombia expressed gratitude for the questions that were raised and that it replied to during
the meetings.  Colombia emphasised some of the replies it provided with regard to the current limits
contained in Article 9.1.  With regard to the reason for proposing increases in the Article 9.1
thresholds, Colombia had stated that the figures th at were currently in the Agreement were low and
that the safeguard mechanism, it believed, could be improved in order to foster better access withoutprejudicing the domestic industry of developed countries.  In replying on the rationale of the limits
proposed, 7 and 15 per cent, Colombia had indicated that those figures had been established taking
account of other factors including inter alia  the concept of "substantial interest" referred to in
Article 12.3.G/SG/M/21
Page 2
7. With regard to the rationale for having esta blished the fact that the increment in the
percentages would be applied solely by developed countries, Colombia had stated that during the
preparatory phase for Doha it had exchanged views with a large number of developing countries.
Those developing countries indicated that they would consider favourably this proposal for
implementation if the increases were confined to the developed world.
8. With regard to the coverage of the proposal, Colombia noted that this was a procedural issue
that was raised by some Members.  Colombia expressed its concern on the amount of time that was
devoted to discussing this type of question, which meant that there was less time devoted to
discussing issues of substance which were in the interest of developing countries.  Colombia viewed
with concern the suggestion that a country does not have a possibility of adjusting proposals to reflect
the results of the implementation process.  Colombia had suggested making its proposal more specific
in this regard at informal consultations prior to  the Doha Ministerial Conference.  The fact that
Colombia's suggestion was not reflected in document Job (01)/152/Rev.1 should not be considered as
an obstacle for considering the concerns of developing countries.
9. With regard to the action to be taken, Colo mbia considered that the Trade Negotiations
Committee should instruct the Safeguards Committee to  revert to the subject insofar as it was raised
by Members.  Elements should be worked on in or der to attain consensus strengthening special and
differential treatment in the Safeguards Agreement.
10. The representative of China expressed full support for Colombia's proposal.  China
considered that developing countries had for a long time been at a disadvantage in respect of basic
infrastructure, production resources and management experiences and therefore their share in the
world trade had been relatively small.  In order to ensure that developing countries secured a share inthe growth in international trade commensurate with  the needs of their economic development, special
and differential treatment for developing countries was provided in various WTO Agreements.
11. According to China, however, with the development of international trade and the enhanced
export of developing countries, the current 3 per cent and 9 per cent exemption as contained in
Article 9.1 of the Agreement on Safeguards no longer reflected the current situation of international
trade and no longer provided meaningful and effective special and differential treatment for
developing countries.  Therefore, as instructed by the Doha Ministerial Declaration, Members should
review this Article with a view to strengthening it and making it more precise, effective and
operational.  China was of the view that the 7 per cent and 15 per cent exemption criteria was a
meaningful and reasonable proposal worthy of cons ideration by Members to fulfill the Doha mandate.
12. The representative of Australia asserted that a country like Australia, which was now totally
dependent on tariffs for protection, needed to rely on WTO instruments such as the Safeguards
Agreement to deal with market disruptions on imports.  To its mind, Colombia's proposal would
undermine the effectiveness of safeguard action.
13. Australia considered that excluding such a substantial level of imports from developing
countries from the application of safeguard measures, particularly where they may have a significant
share of world export trade in the product to be subject to safeguard action, would significantly alterthe balance of rights and obligations under the Safeguards Agreement.
14. The Safeguards Agreement already recognized and provided special and differential treatment
for developing countries.  Further, one had only to look at the countries which were taking safeguard
action, to realize that it would not be fair to say that recourse to such a trade remedy was reserved for
developed countries.  Excluding developing countr y imports from the application of safeguard actions
would seriously undermine recourse to such a trade remedy.G/SG/M/21
Page 3
15. Australia recalled that at the April meeting the European Communities said that Article 9 was
often invoked in favour of developing countries.  Australia shared the EC's concern that the change to
Article 9 would substantially alter the exception for developing countries so that there would be
substantial imports from developing countries causing injury.  Australia agreed with the EC's
assessment that applying Article 9.1 only to developed country measures would create two differentcategories of defence instruments.
16. The representative of Thailand thanked fellow Members for their participation in the process
in a constructive and flexible manner.  Although the basis on which to report may not have been one
which was first-best and the report itself lacked consensus, Thailand believed the discussions were
thought-provoking and useful for exchanging views on the issues.  More importantly, Thailand
particularly commended the Chairman for having recourse to an appropriate and acceptable approach
to reporting.  To Thailand the approach taken by the Chairman was positive and rightful in that it wasclear of doubts that it may have set a bad precedent for future actions.  Thailand was pleased that due
concerns expressed by Members were taken into account.
17. With regard to other issues in connection with the implementation of the Safeguards
Agreement, Thailand urged Members to engage as constructively as they did in the discussions on the
tiret 84 proposal.  Thailand looked forward to part icipating positively in future discussions on these
issues.
18. The representative of Korea shared the concerns of Colombia that the recent rise in the use of
safeguard measures could undermine the results of successive market access negotiations.  Korea also
agreed that developing country Members could be more vulnerable to these measures, and the
proposed increase in the Article 9.1 thresholds had merits the Committee should consider thoroughly.However, Korea was concerned that the proposal would be practically difficult as it required the
amendment of the Agreement, and certain parts of the proposal seemed to be beyond the mandate.
Korea also had some doubts whether the necessary creation of a two-tiered system in the proposal was
desirable.  In addition to that, Korea wanted to point out that a clear explanation was not followed
with regards to the changes in proposed thresholds.
19. The representative of Japan stated that safeguard measures were based on the principle of
non-discrimination set forth in Article 2.2 of the Safeguard Agreement.  Article 9.1 was a form of
exception to the principle of non-discrimination, to guarantee some market access for developing
countries whose volume of imports in relative terms was very small.  If the Article 9.1 thresholds
were raised to the level proposed by Columbia, there was a possibility that even imports from
developing countries which have potential large export ability would be excluded from safeguard
measures, so that the effectiveness of the safeguard measures would be undermined in a way that evenif there were substantial injury or threat of injury to the domestic industry, a significant part of these
imports would be excluded from the safeguard measure.  In addition, there was no legitimate basis for
making a distinction between measures imposed by developing countries and measures imposed by
developed countries, so also for this reason, signif icant rationality could not be identified in the
Colombian proposal.
20. The representative of the United States restated his country's concern that much of the
discussion in this Committee as to tiret 84 had addressed issues concerning Article 9.1 of the
Safeguards Agreement that appear to go beyond tiret 84 and perhaps beyond the Committee's mandate
from the Ministers.  Regardless of these concerns, it had been clear in any event that the Committee
was far from reaching any consensus on tiret 84, and the discussion of possible amendments to tiret84 appeared to make consensus even more unlikely.  Accordingly, the Committee must report to the
TNC the lack of a consensus on this tiret.G/SG/M/21
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21. However, the United States noted that the discussion in the Committee had had the
beneficial effect of making clear that many Members had a number of concerns about Article 9.1
beyond the issues raised by tiret 84.  Given these concerns, this Committee agreed at the October
meeting to place this broader range of Article 9.1 issues on the agenda for discussion at the next
regular meeting in April, with informal consultations beforehand to define the scope of the issues thatMembers wish to have discussed.  The United States welcomed the Committee's decision to discuss
these broader issues as part of its regular work, and looked forward to the discussion at the April 2003
meeting, which the US hoped would shed light on these issues.
22. The representative of Egypt placed on record his country's deep concern regarding any
proposal on Article 9 that could alter rights and obligations under the Safeguards Agreement.
23. The representative of Brazil stated that it become the rule, and not the exception, for Members
to reach the mandated deadlines for analysis of the implementation issues without results.
Unfortunately, the discussions of the proposal by Co lombia, contained in tiret 84, followed the same
pattern. Brazil, from the beginning, supported the idea of Colombia of raising “de minimis” levels in
the case of investigations conducted by developed countries on the exports of developing countries.  If
granted, the proposed special and differential treatment would have provided developing country
exporters with enhanced market access opportunities in the developed countries markets. Given theirstructural difficulties to export, once a developing country exporter was ousted from developed
country markets, it had much more difficulties to recuperate this market.  If Members raised the
“de minimis” levels for developing countries, in the case of investigations by developed countries,
they would be mitigating this effect.  It would be a fair measure and one that would help give some
meaning to the term “Doha Development Round”, in the area of safeguards.  As Members could not
reach a consensus in the Safeguards Committee, they would have to wait for guidance from the TNC
on this matter.
24. Brazil reiterated its comments on one specific issue that was raised in the course of the
discussions: the fact that it was alleged that the proposal before the Committee was not the original
one presented in the run-up to Doha.  Brazil noted that some Members had stated that the proposal, aspresented, did not imply that the increased “de minimis” levels would be applicable only in
investigations conducted by developed countries.  Brazil re-stated that it totally disagreed with this
claim.  As Colombia had stated on previous occasions, it was its declared intention that the proposal
would be applicable only to investigations conducte d by developed countries.  This was a known fact,
and one that was discussed in informal consultations in the pre-Doha phase.  Naturally, when the
implementation “tirets” were compiled, they were presented in a summarized form, otherwise it might
have become unmanageable to deal with all the single aspects of each of the proposals.Unfortunately, in this specific case, this process led to a misinterpretation of the mandate, on the part
of some Members.  Brazil reaffirmed that there was no amendment, whatsoever, to the mandate, but
simply the presentation of the details of the proposal, according to the pre-Doha discussions,
something that the summarized text of the mandate, naturally, did not capture in its entirety.
25. The representative of the European Communities indicated that, despite further reflection on
Colombia's proposal, his delegation's views had not changed significantly on the important proposal
of raising the de minimis levels contained in Article 9.1.  The EC understood that Members were
currently reacting to Colombia's amended proposal, as outlined by Colombia at the Committee's
regular meeting in April.  While the amended proposal only applied to safeguard measures taken by
developed countries, that was not the proposal on which the Committee was formally required toreport on by the end of the year.  The EC did not want to make a procedural point out of this, but just
wanted to be clear about it.  The EC considered that such a change significantly altered the balance of
rights and obligations under the Safeguards Agreement, and such a quantified differentiation of the
levels of importing countries did not seem to the EC to be a development which had obvious
precedent in other trade defence instruments.G/SG/M/21
Page 5
26. The Committee took note of the above statements, and adopted  its report to the Trade
Negotiations Committee on outstanding implementation issue tiret 84 (see document  G/SG/59).
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