The Economics Of Safeguards Under WTO Framework

Beginning with the historical review of world trading system, the paper demonstrates the origin of safeguards and Article XIX of the GATT, analyses the shortcoming of Article X DC and the Grey Area Measures, describes the institutional change of safeguards in the Tokyo Round and the Uruguay Round, and attempt to a New Economic-historical illustration of safeguards. Safeguards are the tool of protection of trade under WTO framework, the influence of safeguards includes the economic effects of tariffs and quantitative restricts on consumer, producer, government and exporting country, the effectives of economic adjustment and competitiveness.According to the demonstration of theoretical analysis of protection of trade, On the basis of Robert Baldwin(1992), the paper constructs one economic frame to explain safeguards, which comprises three components: economic distortion theory, new trade theory and political economy of trade policy. First, the domestic distortions can be attributed to protection of safeguards; second, as the connection of industry policy and trade policy, promoting industry with external economies of scale and monopoly rents, and realize the transfer between countries, also is the new approach of protection of safeguards; third, the increasing demand for protectionist safeguards can be attributed to a series of basic factors, namely: the development of international political economy in which safeguards are defined the interactions between governments, and the escape clauses of free trade of GATT; the ideas and models we are discussing have been recognized as a major advance in the political economy, have been explain the industry character and tool choice of safeguards, have been enforced by empirical studies.Finally, the paper analyses the characters of safeguards during the GATT and since WTO, explains the reasons of safeguards nowadays. Based on the cases American Steel Safeguard and Chinese Steel Safeguard, the paper has evidently demonstrated the theoretical frame by empirical effects. Based on the judgments of influence of safeguards on enterprise, industry and macro-economy, the paper puts forward the basis system and forecasting mechanism of safeguards, and some suggestions to the utilizing safeguards of future China.