Does Safeguards Need Saving? Lessons from the Ukraine - Passenger Cars Dispute

30 Pages Posted: 17 Oct 2016

See all articles by Arevik Gnutzmann-Mkrtchyan

Arevik Gnutzmann-Mkrtchyan

Leibniz Universit├Ąt Hannover - Faculty of Economics and Management; European University Institute - Economics Department (ECO)

Simon Lester

Cato Institute

Date Written: October 2016

Abstract

The Panel Report in Ukraine - Passenger Cars provides an opportunity to revisit an old debate over the role of safeguard measures in the WTO. With regard to the legal findings, the panel followed the established jurisprudence in this area, and found a number of violations of the Safeguards Agreement. With regard to the economics, we delve more deeply into the economic and political background of the safeguards investigation. Ukraine was hit by the economic crisis shortly after its WTO accession that significantly liberalized import tariffs on passenger cars. Next, we offer a de novo look at the injury and causation issues in this case, and discuss the challenges of an industry reliant on offshored production that sees a safeguard as a mechanism to attract FDI for production. We conclude with an assessment of the operation of the WTO's safeguards regime, along with some tentative suggestions for reform. Overall, our examination of the economic analysis by the investigating authority and the legal review by the WTO panel raises questions about particular aspects of the domestic and WTO processes, but concludes that the system worked well in this case.

Keywords: Safeguards, WTO disputes, Trade remedies, trade protection, Ukraine.

Suggested Citation

Gnutzmann-Mkrtchyan, Arevik and Lester, Simon, Does Safeguards Need Saving? Lessons from the Ukraine - Passenger Cars Dispute (October 2016). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2016/52. Available at SSRN: https://ssrn.com/abstract=2853338 or http://dx.doi.org/10.2139/ssrn.2853338

Arevik Gnutzmann-Mkrtchyan (Contact Author)

Leibniz Universit├Ąt Hannover - Faculty of Economics and Management ( email )

Koenigsworther Platz 1
Hannover, 30167
Germany

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy

Simon Lester

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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