A Study Of Emergency Safeguard Measures In Trade In Services

Safeguard measures are among the ways designed by WTO to protect trade in services in case of emergency, and they have long since been considered great in importance in trade in goods. In the case of trade in services, article X of GATS stipulates that agreements be reached on a non-discriminating basis, and that the terms agreed on take effect no later than three years. However, to date, WTO members haven't reached a consensus as to the desirability and feasibility of ESM, thus still the on-going negotiation among them.This dissertation tries to prove the desirability of ESM in trade in services since (1) services and trade in services involve more special features than trade in goods that need the ESM mechanism; (2) the exceptional rules and regulations available in GATS don't include such aims and functions about public policy that can be good enough to substitute for ESM; (3) greater degree of liberalization of trade in services cannot be ensured without ESM; (4) a better legal system for GATS also calls for its establishment.In bilateral agreements and other various kinds of regional trade arrangement (RTA), there are already rules and regulations concerning ESM, which is not only a proof of its desirability but also a demonstration of a feasible legalization. For specific legalization technicalities, lessons drawn from developing ESM for RTA can be borrowed for the development of ESM for GATS.An array of problems does arise in the process of developing ESM for GATS. Problem one may relate to how to give the domestic industry a temporary protection, perform a restructuring of its industries, promote the liberalization of trade in services and greater involvement from developing countries, such being the chief aims or purposes of ESM when emergencies about unpredicted development or commitment of the terms offered do occur. Problem two is concerned with the choices of methods. The desirable approach may be a borrowing of the legal system employed for safeguard measures in trade in goods, with some modifications made about their definitions. For instance, "foreign service supply or increase in consumption" can be better replaced by "increase in imports", "domestic industry" by "national industry", so as to set up an ESM mechanism applicable to all the four service supply models. ESM mechanism can come into operation when a WTO member finds the service supply or consumption from another member increasing disproportionately in relation to, and also posing threats to the like and directly competitive domestic counterparts. The measures include terminating or withdrawing the specific commitments made in article XVI, XVII, XVIII, of GATS. In case of an ESM operation, some important points must be kept in mind. There must be no discrimination involved, with some necessary limit imposed; it must also be temporary, well-informed, and can be made amends for. It should also insure aspecial treatment to the developing countries, and an effective adoption of suchprocedures as notification, negotiation and supervision.For the development of an ESM mechanism, some inter-relationships must becarefully observed. How ESM is related to economic need test (ENT)? What is therelationship between ESM for GATS and that for RTA? And what might be theinfluence of safeguard measures in trade in goods upon ESM?China has made some worthwhile attempts in initiating a legal system about ESMthrough adopting a domestic law and practicing RTA. She also takes an active part inthe negotiations about ESM sponsored by WTO. Needless to say, there are still roomsfor improvement, particularly in the way of the approaches taken.