In a recent post discussing the NAFTA/USMCA provision relating to conditional exclusion of FTA partners from global safeguards under the WTO, I stated that "this type of exclusion is unique to a handful of US FTAs". Count on Amy Porges to catch me in a gross error. Amy pointed me to an excellent 2013 paper written by former WTO colleagues mapping numerous such RTA provisions. Of the 232 FTAs surveyed in that paper, no fewer than 62, or roughly 25%, had some type of provision relating to the possible exclusion of an RTA partner from WTO global safeguards.
Despite the large numbers, I found myself pondering how much real-world impact these provisions (outside NAFTA/USMCA) have had. I suspect the answer is not much, for the following reasons.
First, many of the countries whose FTAs contain exclusion clauses rarely if ever use safeguards. For example, no EFTA country has imposed a safeguard measure since 1995. The same is true for Australia, New Zealand and Singapore, whose FTAs, according to the paper, were, as of 2013, the only ones with automatic exclusion clauses. Other users of such clauses, such as Canada, scarcely use them. There appear to be few such FTA provisions involving the leading safeguards users (India, Indonesia and Turkey). It seems that, outside the United States, the more frequent the user, the less likely it has been to accept such constraints.
Second, the WTO Agreement on Safeguards Article 9.1 requires that small developing country users (less than 3% of imports) be excluded from safeguard measures. It seems likely that many of the smaller countries whose FTAs contain such provisions would be excluded from a safeguard measure on this basis irrespective of any FTA provision. And larger suppliers who exceeded these thresholds might not qualify for exclusion where the FTA exclusion hinges upon the suppliers’ small import share and limited (or no) contribution to the serious injury.
Third, only two of the FTAs examined involve automatic exclusion, while in all remaining FTAs exclusion is conditioned upon small import shares and/or limited (or no) contribution to the serious injury. Of this latter group, 26 of the 60 seem to involve discretionary exclusion (“may” rather than “shall”), even where the relevant conditions for exclusion are met. Interesting to note that more recent US FTAs, such as KORUS, have such general, discretionary language (a Party "may" exclude if the imports are not a "substantial cause" of serious injury). Query how likely a country is to actually exclude in such circumstances, but language I found in an Indian safeguard determination on “single mode optical fibre" (p. 63) suggests that India, at least doe not give the language much weight. .
All this said, there may be situations, outside US FTAs, where such exclusion provisions have actually changed the scope of safeguards measures. If anybody out there is reading this blog, and knows of such situations, I’d love to hear about it!
