Applying Safeguard Measures in the Context of Arab Free Trade Agreements with the U.S bashar malkawi

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The U.S. has concluded trade agreements with selected Arab countries. First, the U.S. concluded an FTA with Jordan in 2001.Then, the U.S. has launched a 10-year effort to form a US-Middle East free trade area.The purpose of all these FTAs with Arab countries is, among other things, to liberalize trade and increase market access. Mindful that requiring trade liberalization could result in damaging consequences among the participating countries that are at different levels of economic development, the U.S.-Arab FTAs include exceptions. These FTAs permits countries to depart "temporarily" from their obligations of liberalizing trade and apply safeguard measures.

Submitted: June 09, 2011

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Submitted: June 09, 2011



bashar malkawi

It is to be noticed that the only import relief mechanisms available under the U.S.-Arab countries FTAs are safeguard measures. These FTAs do not include provisions on antidumping or countervailing duties.[1] The inclusion of a safeguard measures under the U.S.-Arab countries FTAs reflects the U.S. requirement that all trade agreements must have, at minimum, a provision for safeguard measures.[2] Thus, the US-Arab countries FTAs leave domestic antidumping and countervailing duty laws untouched.
The article consists of an analysis of the safeguard measures incorporated in the U.S.-Arab countries FTAs. Specifically, the article will outline the standards-injury and causation- used to apply safeguard measures. Furthermore, the article illustrates remedies available for domestic industries and duration of these remedies. The article also presents the issue of global safeguard measures and the exclusion of imports of parties in the FTAs from global safeguard actions. Finally, the article will address special safeguard measures for selected sectors namely textile and agriculture. The article ends with a set of conclusions.
Before indulging into the discussions, a point of order and style must be stated. Since the U.S.-Arab countries FTAs are treaties, the starting point for the analysis is to consult the relevant rules of the Vienna Convention on the Law of Treaties.[3] These FTAs should not be read in clinical isolation from other international sources such as WTO and its dispute settlement cases concerning the treatment of safeguard measures.[4] The terms of U.S.-Arab countries FTAs are interpreted in good faith and in accordance with the ordinary meaning given to such terms in light of their context, object, and purpose.[5] An interpreter of the U.S.-Arab countries FTAs should analyze the texts in honesty, fairness and reasonableness, adopting a literal or textual interpretation of the FTAs' words, and in light of the intentions of the FTAs' drafters.[6]
Three kinds of safeguard measures are incorporated in U.S.-Arab countries FTAs, including bilateral safeguards, global safeguards, and special safeguards.[1]

[1] See U.S-Jordan Free Trade Agreement, supra note 1; United States-Morocco Free Trade Agreement, supra note 5; United States-Bahrain Free Trade Agreement, supra note 5; and United States-Oman Free Trade Agreement, supra note 5.

[1] Countervailing duty and anti-dumping laws are tools for nullifying distortions in international trade. Dumping occurs when a manufacturer sells its merchandise at a lower price in one national market than another. In comparison, countervailing law seeks to eliminate the competitive advantage in international trade that manufacturers gain from illegal subsidization. See Garrett E. Lynam, Using WTO Countervailing Duty law to Combat Illegally Subsidized Chinese Enterprises Operating in a Non-market Economy: Deciphering the Writing on the Wall, 42 Case W. Res. J. Int'l L. 739, 744 (2010).
[2] Following World War II, the U.S. president continued this policy by issuing an executive order requiring the presence of an escape clause in all future trade agreements. See Paul C. Rosenthal & Robin H. Gilbert, The 1988 Amendments to Section 201: It is not Just for Import Relief Anymore, 20 Law & Policy Intl. Bus. 403, 406 (1989).
 [3] The terms "agreement" and "treaty" are used here in the manner defined and described in article 2 of the Vienna Convention on the Law of Treaties. See Vienna Convention on the Law of Treaties (May 23, 1969), 1155 U.N.T.S. 331. 
[4] This approach is similar to that followed by the WTO panels and Appellate Body. The Appellate Body in the United States-Reformulated Gasoline case stated regarding article 3.2 of the DSU that "that direction reflects a measure of recognition that the General Agreement is not to be read in "clinical isolation" from public international law". See United States-Standards for Reformulated and Conventional Gasoline, Apr. 29, 1996, WTO Doc. No. WT/DS2/AB/R, at 17. 
[5] The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended. Moreover, article 32 is related to the supplementary means of interpretation. It states that recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.
 See Vienna Convention on the Law of Treaties, supra note 9, art. 31.
[6]An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility. See Appellate Body, Japan-Taxes on Alcoholic Beverages, WT/DS8/AB/R, at 12 (Oct. 4, 1996). The principle of effective interpretation will be followed, effet utile, by giving the terms their full meanings. Additionally, little attention will be paid to preparatory work or negotiating history of the FTA because of lack of records and the possibility of conflicting negotiating statements by parties. Moreover, where necessary, reference will be made to decisions of the WTO panels and Appellate Body especially that some articles of the U.S.-Arab countries FTAs refer directly to WTO agreements or indirectly to WTO panel and Appellate Body decisions.

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