SAFEGAURD MEASURES UNDER THE WTO REGIME: AN ANALYSIS

OF THE DISPUTE SETTLEMENT BODY’S RESPONSE TO THE

DEBATE OF UNFORSEEN DEVELOPMENTS

[An assignment to be submitted to Himachal Pradesh National Law University, Shimla]

SUBMITTED BY: SUBMITTED TO:

VEER VIKRAM SINGH Dr. Sarita

B.A. LLB (Hons), 7th SEMESTER (Assistant Professor of Law)

1020192061

HIMACHAL PRADESH NATIONAL LAW UNIVERSITY, SHIMLA

16 MILE, SHIMLA-MANDI NATIONAL HIGHWAY, GHANDAL
DISTRICT SHIMLA, HIMACHAL PRADESH-171014
Ph. 0177-2779802, 0177-2779803, Fax: 0177-2779802
Website: http://hpnlu.ac.in
 DECLARATION
I, Veer Vikram Singh, a 4th-year student of Himachal Pradesh National Law University, hereby
declare the originality of my following work to be submitted as an assignment to the university. I have
compiled the following work with the best of intentions to contribute with novelty to the academic
discourse around the assigned topic of the assignment. I hereby, undertake, full responsibility for my
work and expressly consent to face any consequences- copyright infringement or others- arising from
the same.

2|Page
 TABLE OF CONTENTS

REFERNCES & ABBREVIATIONS .............................................................................................. 4

1. DOCTRINAL SOURCES .................................................................................................... 4
1.1 ACTS/INTERNATIONAL LEGAL INSTRUMENTS ................................................... 4
1.2 CASE LAWS ..................................................................................................................... 4
2. NON-DOCTRINAL SOURCES .......................................................................................... 5
2.1 COMMENTARIES ............................................................................................................ 5
2.2 REPORTS.......................................................................................................................... 5
2.3 RESEARCH PAPERS ....................................................................................................... 5
2.4 ARTICLES ........................................................................................................................ 6
3. ABBREVIATIONS ............................................................................................................. 7
RESEARCH METHODOLOGY ..................................................................................................... 8
RESEARCH QUESTIONS.............................................................................................................. 9
ABSTRACT .................................................................................................................................. 10
INTRODUCTION ......................................................................................................................... 10
UNDERSTANDING THE POLITICO-ECONOMIC REALITIES OF SAFEGUARD ACTIONS 13
MOOT QUESTION IN INVOKING SAFEGUARD ACTIONS UNDER THE WTO REGIME ... 15
DEFINING UNFORESEEN DEVELOPMENTS .......................................................................... 17
STATUS OF UNFORESEEN DEVELOPMENTS AFTER THE AGREEMENT ON SAFEGUARDS
...................................................................................................................................................... 19
EFFORTS TO REDUCE THE RIGOUR OF UNFORESEEN DEVELOPMENTS REQUIREMENT
AND THE RESPONSES OF THE WTO ADJUDICATING BODIES........................................... 21
AN ANALYSIS OF THE DSB'S APPROACH FROM THE PERSPECTIVE OF ACADEMIA.... 26
CONCLUSION ............................................................................................................................. 30

3|Page
 REFERNCES & ABBREVIATIONS
1. DOCTRINAL SOURCES
1.1 ACTS/INTERNATIONAL LEGAL INSTRUMENTS
 General Agreement on Tariffs and Trade (GATT) in 1947.
 Agreement on Safeguards 1994.
 Argentina - Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, 14
December 1999.
 Korea - Definitive Safeguard Measures on Imports of Certain Dairy Products,
WT/DS98/AB/R, 14 December 1999.
 Agreement Establishing the World Trade Organization 1994.
 United States - Safeguards Measures on Imports of Fresh, Chilled and Frozen Lamb
Meat from New Zealand and Australia, WT/DS177/AB/R (complainant by Australia)
and WT/DS178/AB/R (complaint by New Zealand), 1 May 2001.
 United States - Definitive Safeguard Measures on Imports of Circular Welded Carbon
Quality Line Pipe from Korea, WT/DS202/R, 29 October 2001.
 Chile - Price Band System and Safeguard Measures Relating to Certain Agricultural
Products, WT/DS207/R, 03 May 2002.
 United States - Definitive Safeguard Measures on Imports of Certain Steel
Products,WT/DS248/AB/R,WT/DS249/AB/R,WT/DS251/AB/R,WT/DS252/AB/R,
WT/DS253/AB/R,WT/DS254/AB/R,WT/DS25 8/ AB/R, WT/DS259/AB/R.
 Dominican Republic - Safeguard Measures on Imports of Polypropylene Bags and
Tubular Fabric, WT/DS415/R, WT/DS416/R, WT/DS417/R, WT/DS418/R,
(complaints by Costa Rica, El Salvador, Guatemala, Honduras) 31 January 2012.
 Ukraine - Definitive Safeguard Measures on Certain Passenger Cars WT/DS468/R, 26
June 2015.

1.2 CASE LAWS

 Hatters 'Fur Case.
 Argentina-Footwear Case.
 Korea-Dairy Case.
 US-Lamb Meat Case.

4|Page
  US-Line Pipe Safeguards Case.
 Chile-Price Band System case.
 US-Steel Safeguards Case.
 Dominican Republic-Safeguard Measures Case.
 Ukraine-Passenger Cars Case.

2. NON-DOCTRINAL SOURCES
2.1 COMMENTARIES
 Koul, A. K., Guide to the WTO and GATT: Economics, Law and Politics, (The Hague:
Kluwer Law International, 2005).
 Jackson, J. H., The World Trading System: Law and Policy of International Economic
Relations, Second edition, (Cambridge: MIT Press, 1997).
 Das, B.L. The World Trade Organization: A Guide to the Framework for International
Trade, (Chennai: Earthworm Books, 1999).
 Sykes, A. 0. The WTO Agreement on Safeguards: A Commentary, (New York: Oxford
University Press, 2006).

2.2 REPORTS
 Report of the Intersessional Working Party on the Complaint of Czechoslovakia
Concerning the Withdrawal by the United States of a Tariff Concession under the
Terms ofArticle XIX of the General Agreement, GATT/CP/106, 27 September 1951.

2.3 RESEARCH PAPERS

 Yong-Shik Lee, 'The Agreement on Safeguards', in Patrick F. J. Macrory, et al, (eds),
The World Trade Organization: Legal, Economic and Political Analysis, (New York:
Springer, 2005).
 Eugenia Karanikolas, 'Safeguards and anti-dumping: Australia's food processing
industry seeks protection', available at Last visited, 6 September 2016.
 Jackson, J. H. World Trade Law and the Law of GATT, (Indianapolis: Bobbs Merrill,
1969).
 Matsushita, M. et al, The World Trade Organization: Law, Practice and Policy,
(Oxford: Oxford University Press, 2006).

5|Page
  Sudhakar and Adithya Reddy, 'Does the Agreement on Safeguards Frustrate its own
Purpose?' in Prasad P. S., (ed.), World Trade: Safeguard Mechanisms, (Hyderabad:
Icfai University Press, 2008).
 Bhala, R, Modern GATTLaw, (London: Sweet & Maxwell, 2005).
 Mavroidis, P.C. et al, The Law and Economics of Contingent Protection in the WTO,
(Cheltenham: Edward Elgar Publishing Ltd., 2008).
 Dam, K.W. The GATT: Law and International Economic Organization, (Chicago:
Chicago Unive rsity Press, 1970) p. 102.
 Alan 0. Sykes, 'The Safeguard Mess: A Critique of WTO Jurisprudence', Chicago John
M. Olin Law & Economics Working Paper No. 187 (2d Series).
 Schick, 'Agreement on Safeguards: Realistic Tools for Protecting Domestic Industry
or Protectionist Measures?' Suffolk Transnational Law Review, Vol.27, No. 1, 2003.
 Chaisse, Chakraborty and Kumar, 'Mastering a Two-Edged Sword: Lessons from the
Rules and Litigation on Safeguards in the World Trade Organization', Richmond
Journal of Global Law Business, Vol. 13, 2014-15.
 MoumitaMandal, 'Relationship between Article XIX of GATT 1994 and Agreement
on Safeguards', Law Mantra Journal, Vol. 4, Issue 2, 2016.

2.4 ARTICLES
 Raychaudhuri, 'The Unforeseen Developments Clause in Safeguards under the WTO:
Confusions in Compliance', Estey Centre Journal of International Law and Trade
Policy, Vol. 11, No. 1, 2010.
 Yong-Shik Lee, 'Not Without a Clue: Commentary on the Persistent Puzzles of
Safeguards', Journal of World Trade, Vol. 40, No. 2, 2006.
 Sykes, 'The Fundamental Deficiencies of the Agreement on Safeguards: A Reply to
Professor Lee', Journal of World Trade, Vol. 40, No. 5, 2006.
 Zheng, 'Reforming Trade Remedies', Michigan Journal of International Law, Vol. 34,
2012.

6|Page
 3. ABBREVIATIONS

GENERAL AGREEMENT ON TARIFFS GATT

AND TRADE
WORLD TRADE ORGANIZATION WTO
DISPUTE SETTLEMENT BODY DSB
ARTICLE Art.
SECTION S.

7|Page
 RESEARCH METHODOLOGY
The following assignment was carried out by means of Doctrinal Research Methodology. The
researcher has attempted to answer the proposed research questions; firstly, by understanding the
doctrinal sources on the point such as Bare Acts, Case Laws etc., following with the understanding of
the of non-doctrinal sources such as commentaries, research papers, articles etc. Combining the legal
intellect with the analysis of the resources read, the researcher has attempted to answer the proposed
research questions to the best of his ability.

8|Page
 RESEARCH QUESTIONS
I. Whether the omission of unforeseen developments in the Agreement on Safeguards is
intentional or accidental?
II. Is there a requirement of GATT Article XIX to be complied along with the Agreement on
Safeguards to impose safeguard measures?
III. Whether the proof of three substantial requirements under Agreement on Safeguards would
automatically result in the proof of unforeseen developments?
IV. Is it safe to conclude that the rigour of Article XIX requirement of establishing unforeseen
developments is diluted down by the Agreement on Safeguards?

9|Page
 ABSTRACT
As a general norm, safeguard actions or escape clause actions under international trade law should
be used sparingly with a high standard of proving the requirements, since they allow fairly traded
imports to be restricted. Article XIX of the General Agreement on Tariffs and Trade has five
major requirements under it for invoking safeguard actions; one among them being the proof of
'unforeseen developments'. However, the subsequent Agreement on Safeguards 1994 mentions
only three essential factors for safeguard actions, most significantly, missing out the requirement
of unforeseen developments. This raises several significant closely interrelated questions of
interpretation of international trade law, which have cropped up before the WTO Dispute
Settlement Bodies (the Panels and Appellate Body of the WTO). The present paper addresses the
key questions which have arisen in disputes and concludes with an analysis of the appropriateness
of the current approach of the WTO Panels and Appellate Body. It is important to understand that
safeguard actions are the offshoots of politico-economic realities of the liberalization of
international trade, which involves compromise on some elements of State sovereignty and the
inherent interests of States to protect the domestic industries. Some States attempted to dilute the
rigour of unforeseen developments through interpretation during disputes, but it has to be
understood that such changes in the requirements for safeguards should be left to the political
process of law-making under the WTO multilateral trade negotiations and should not be changed
through the dispute settlement system.

INTRODUCTION
The liberalization of international trade by removing and reducing trade barriers has been the
cornerstone of the World Trade Organisation (WTO) and the Agreements under it. This novel
objective has been pursued in the past as well as present with more than six decades of effort of the
world community since the negotiation of General Agreement on Tariffs and Trade (GATT) in 1947. 1

1
55 U.N.T.S. 194

10 | P a g e
These efforts culminated into a number of fundamental principles to eliminate the varying obstacles
to international trade, be it tariffs, quotas, internal taxes or any other non-tariff barriers. However, the
principles to eliminate the trade barriers are not absolute, but subject to limitations. One of the major
limitations to such codified principles are the safeguard actions available to the States in certain cases
involving serious prejudice to their domestic industries due to stiff foreign competition.

The safeguard actions include the imposition of temporary tariff, quotas or any other measures to
ensure that national economy and domestic industries do not suffer serious harm from imports and
trade concessions.2 These are more popularly known as the escape clause actions, and as a general
norm, should be used sparingly. In addition, they are available only on temporary basis to meet the
necessary requirements. Quite significantly, safeguard actions are invoked against fairly traded
imports to protect the domestic industry.3 Therefore, the standard applicable in the safeguard action
is not same as that of the one applicable in the cases of imposing import restrictions to counteract
dumping and subsidies, which basically are the cases of remedying the unfair trade or intentional trade
distortions by the exporters. Since the safeguard remedies allow fairly traded imports to be restricted,
the standard of proving the requirements is more than that of other cases. 4

In light of the increased standard of proof, the GATT negotiators incorporated five major requirements
under Article XIX of the GATT for invoking safeguard actions; one among them being the proof of
'unforeseen developments'. However, the subsequently entered Agreement on Safeguards
19945mentions only three essential factors for safeguard actions. Most significantly, it misses out the
requirement of unforeseen developments. Given this reality, several significant closely interrelated
questions have arisen in international trade law. First, whether the omission of unforeseen
developments in the Agreement on Safeguards is intentional or accidental? Second, is there a
requirement of GATT Article XIX to be complied along with the Agreement on Safeguards to impose
safeguard measures? Third, whether the proof of three substantial requirements under Agreement on
Safeguards would automatically result in the proof of unforeseen developments? Finally, is it safe to

2
See Yong-Shik Lee, 'The Agreement on Safeguards', in Patrick F. J. Macrory, et al, (eds), The World Trade Organization:
Legal, Economic and Political Analysis, (New York: Springer, 2005) pp. 749 - 798 at p. 749.
3
See Koul, A. K., Guide to the WTO and GATT: Economics, Law and Politics, (The Hague: Kluwer Law International,
2005) p. 294.
4
Eugenia Karanikolas, 'Safeguards and anti-dumping: Australia's food processing industry seeks protection', available at
Last visited, 6 September 2016.
5
1869 U.N.T.S. 154.

11 | P a g e
conclude that the rigour of Article XIX requirement of establishing unforeseen developments is
diluted down by the Agreement on Safeguards?

All the above questions have cropped up before the WTO Dispute Settlement Body (DSB) over a
period of time. Unfortunately, a satisfactory solution to the questions is yet to emerge in the wake of
unknown political realities of the safeguard actions. The uncertainties surrounding the unforeseen
developments are tempting the States and academicians to argue against its continuation under the
Agreement on Safeguards. The DSB does not seem to accept such arguments, at least in the near
future, which is evidenced by its decisions in a series of recent cases. While such decisions of the DSB
are relevant for our understanding, the dilemma continues in the light of absence of their precedential
value. The present paper addresses the above highlighted questions by referring to the decided cases
and concludes with an analysis on the appropriateness of the DSB's current approach.

12 | P a g e
 UNDERSTANDING THE POLITICO-ECONOMIC REALITIES OF
SAFEGUARD ACTIONS
Safeguard actions are primarily the politico-economic realities of the modern world. Though there is
a requirement of trade liberalization to promote international trade, which of course is within the
knowledge of every State at present, the States are equally concerned of protecting their domestic
industry and in turn, their national economy. Striking a delicate balance between these two conflicting
interests requires the addressing and incorporation of political and economic aspects within the trade
regime. It is this awareness in the United States during the early 1940s, which resulted in the
incorporation of safeguard clauses in its trade agreements with other countries 6. This American root
of safeguard actions has been strong enough to make inroads into to the WTO regime, despite varying
objections from other countries. 7

Apart from the political pressure from the United States, along with the threat of United States
withdrawal from the GATT negotiations, there are several political and economic justifications put
forward for safeguard actions. First, it is argued that free trade may result in general welfare but doesn't
ensure prosperity for all. There may be some who would be hurt by the opening of trade to the stiff
competition by foreign producers, and the public choice theory may compel the States to protect them
from the foreign onslaught.8 In the absence of such a State protection, the wealthy domestic industries
would pressurise the governments with multiple political moves. 9 Second, the availability of safeguard
actions act as a political safety valve for the national policy makers to plan for a long term strategy to
promote trade.10 In the presence of such a protection, the policy makers would be enjoying more
liberty during the trade negotiations, since they can always revert back to safeguard actions, if their
calculations go wrong in the future. Thus, safeguard actions allow the States to take the risk of granting
more and more trade concessions.

6
Beginning of such escape clause can be traced in Article XI of the United States Reciprocal Trade Agreement with
Mexico 1943. Jackson, J. H., The World Trading System: Law and Policy of International Economic Relations, Second
edition, (Cambridge: MIT Press, 1997) p. 179.
7
See generally Jackson, J. H. World Trade Law and the Law of GATT, (Indianapolis: Bobbs Merrill, 1969) pp. 553 - 555.
8
Matsushita, M. et al, The World Trade Organization: Law, Practice and Policy, (Oxford: Oxford University Press, 2006)
pp. 438 - 439.
9
See Sudhakar and Adithya Reddy, 'Does the Agreement on Safeguards Frustrate its own Purpose?' in Prasad P. S., (ed.),
World Trade: Safeguard Mechanisms, (Hyderabad: Icfai University Press, 2008) pp. 1 - 18 at p. 2
10
Supra note 8, p. 439.

13 | P a g e
Third, from the economic perspective, the safeguard relief would provide a breathing space for the
ailing domestic industry as well as to the respective governments. These temporary measures are
capable of restoring the healthy competitive condition between the domestic industry and the foreign
producers in the domestic markets.11 The possibility of uprooting the domestic industry to establish a
foreign producer monopoly would thus be prevented. Finally, safeguard action is also useful in
preventing shock to the factors of production. On the one hand, the vanishing of domestic industry
would hard hit the labourers12 and on the other hand, the producers of raw materials would suffer
heavily in the situation arising out of an excessive influx of foreign products. The safeguard clauses
may be successfully invoked by the States to prevent such evil effects at domestic levels. 13

11
Bhala, R, Modern GATTLaw, (London: Sweet & Maxwell, 2005) p. 944.
12
See, Mavroidis, P.C. et al, The Law and Economics of Contingent Protection in the WTO, (Cheltenham: Edward Elgar
Publishing Ltd., 2008) p. 469.
13
Supra note 11, p. 9 45

14 | P a g e
 MOOT QUESTION IN INVOKING SAFEGUARD ACTIONS UNDER THE
WTO REGIME
Article XIX 1 (a) of the GATT read with the Agreement on Safeguards details out the sphere of
application under the WTO regime, which laid down five requirements for invoking the escape clause
action, is as follows.

If, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party
under this Agreement, including tariff concessions, any product is being imported into the territory of that
contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to
domestic producers in that territory of like or directly competitive products, the contracting party shall be free, in
respect of such product, and to the extent and for such time as may be necessary to prevent or remedy such injury,
to suspend the obligation in whole or in part or to withdraw or modify the concession.

Thus, the five requirements stipulated under the provisions are (i) Unforeseen developments; (ii)
Effect of obligations incurred under GATT; (iii) Increased imports; (iv) Serious injury or threat of
serious injury to the domestic industry; and (v) Causal link between the increased imports and injury
to domestic industry. A glance at these cumbersome requirements clearly indicates the intention of
the drafters to narrow down the scope of application of safeguard measures.

he ever increasing need for extended trade liberalization resulted in the concerted efforts to elaborate
and expand the application of the GATT.14 These efforts not only resulted in bringing in new
agreements in the fields not addressed by the GATT15 but also in supplementing GATT provisions
with a number of supplementary agreements.16 One such supplementary agreement entered during the
Uruguay round of multilateral negotiations is on safeguard actions. 17 Article 2.1 of the Agreement on
Safeguards, while laying down the conditions for invoking safeguard actions, states as follows;

A Member may apply a safeguard measure to a product only if that Member determined, pursuant to provisions
set out below, that such product is being imported into its territory in such increased quantities, absolute or relative

14
There were eight rounds of multilateral trade negotiations under GATT between 1947 and 1994 with a view to achieve
greater degree of trade liberalization. See Supra note 8, p. 6.
15
Two separate agreements were entered in the field of trade in services and trade related intellectual property rights
respectively, which were not addressed under the GATT. In the field of services, General Agreement on Trade in Services
(GATS) 1869 U.N.T.S. 183 was entered, and in the area of intellectual property rights, the Agreement on Trade Related
Aspects of Intellectual Property Rights (TRIPS) 1869 U.N.T.S. 299 was entered during the famous Uruguay round of
multilateral trade negotiations. See Susan Robertson and Antoni Verger, 'GATS, TRIPS and Higher Education: Projects,
Politics and Prospects', available at Last visited, 6 September 2016.
16
There were twelve agreements entered with an effort to supplement and implement various provisions of GATT.
17
1 Agreement on Safeguard 1994, supra note 5.

15 | P a g e
 to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic
industry that produces like or directly competitive products.

Thus, it is evident from the above provision that the Agreement on Safeguards did not reproduce the
provision of Article XIX of GATT, instead went on to cut short the requirements from five to three.
While the last three requirements of Article XIX were retained, the first two were clearly missing
under the provision. Though, in the academic circle it is debated that the reduction of requirements
from five to three reflected the State practices after entering GATT 1947, 18 it is not very clear whether
it is intentional or accidental in the absence of express stipulation. Out of the two missing
requirements, addressing 'effect of obligations incurred under the GATT' might not pose a greater
difficulty, since safeguard actions would necessarily involve the increased imports somehow, directly
or remotely, connected to one or other GATT obligation. However, the requirement of 'unforeseen
developments' is of significant difficulty for consideration in each case, not only because it is not
obvious in every case, but also due to its unclear meaning. Therefore, though the presence or absence
of any express stipulation of 'effect of obligations incurred under the GATT' might not make much of
a difference in the outcome of safeguard investigation, the presence or absence of 'unforeseen
developments' as a requirement effects the outcome of the safeguard investigation. This leads to the
obvious conclusion that the moot question at present in the invocation of safeguard actions under the
WTO regime is whether or not the requirement of 'unforeseen developments' needs to be satisfied.

18
Alan 0. Sykes, 'The Safeguard Mess: A Critique of WTO Jurisprudence', Chicago John M. Olin Law & Economics
Working Paper No. 187 (2d Series) p. 4, available at Last visited, 6 September 2016. See also McGovern, E., International
Trade Regulation, (London: Gobefield, 1986) p. 291.

16 | P a g e
 DEFINING UNFORESEEN DEVELOPMENTS
The question about the meaning of unforeseen developments and its determination arose for the first
time in Hatters 'Fur19 case. In 1950, the United States announced its withdrawal of concessions on the
women's fur felt hats and hat bodies, which it has agreed in the Geneva round of multilateral trade
negotiations in 1947.20 The obvious reason for such withdrawal, as advocated by the United States,
was that the tariff reduction coupled with the change of women's hat styles has resulted in a sharp
increase of imports, which seriously injured the domestic industry. This invocation of the escape
clause action by the United States under Article XIX of the GATT was challenged by Czechoslovakia.
One of the major grounds of challenge was that the change in the hat style of women is not a sufficient
criterion to comply with the requirement of unforeseen developments. The GATT Working Party,
which was established to consider the complaint, had the daunting task of starting from scratch in the
absence of an already established practice for determination of unforeseen developments. It first
defined unforeseen developments in the following words.

... the term "unforeseen development" should be interpreted to mean developments occurring after the negotiation
of the relevant tariff concession which it would not be reasonable to expect that negotiators of the country making
the concession could and should have foreseen at the time when the concession was negotiated.

On the basis of above definition, the Working Party observed that the mere fact of change in the hat
styles of women was not an unforeseen development under Article XIX of GATT, since fashions are
often subject to change and the United States negotiators should have foreseen it. However, according
to the Working Party, the effects of circumstances, particularly the degree to which the competitive
situation is effected by the change in hat styles was not reasonably expected to be foreseen by the
United States negotiators in 1947. Thus, the United States could successfully defend its measures
under Article XIX of GATT. However, this stands as the only case in more than the last sixty years
of the GATT-WTO legacy, wherein the requirement of unforeseen developments is held to be
complied with.

The definition of 'unforeseen development' provided by the Working Party in Hatters' Fur continues
as the guiding norm even today. However, there have been extensive academic debates on the effect

19
Report of the Intersessional Working Party on the Complaint of Czechoslovakia Concerning the Withdrawal by the
United States of a Tariff Concession under the Terms ofArticle XIX of the General Agreement, GATT/CP/106, 27
September 1951.
20
Geneva round is the first among the eight rounds of multilateral trade negotiations under the GATT 1947.

17 | P a g e
of the Working Party's definition. Professor Jackson, for example, is of the view that Hatters 'Fur has
considerably weakened the requirement of unforeseen developments under Article XIX of GATT,
since every substantial increase in imports may fulfil the criterion of unforeseen developments. 21 On
the contrary, Professor Kenneth Dam argues that the unforeseen developments clause as interpreted
in Hatters ' Fur cannot be construed as diluting the rigour of the requirement. The requirement of
unforeseen developments would not be satisfied with every general economic change (like increase
in the imports), but only in the presence of very particular changed circumstances. 22 While this
academic debate and inherent confusions in the unforeseen development clause continues, the WTO
Panels and Appellate Bodies have confronted with the new question about the necessity of unforeseen
development in safeguard actions, after the entry into force of Agreement on Safeguards.

21
Supra note 7, p. 561.
22
Dam, K.W. The GATT: Law and International Economic Organization, (Chicago: Chicago Unive rsity Press, 1970) p.
102.

18 | P a g e
 STATUS OF UNFORESEEN DEVELOPMENTS AFTER THE AGREEMENT
ON SAFEGUARDS
The unforeseen developments as a prerequisite for invoking safeguard actions remained as a dead
letter law for a long period of time under Article XIX of GATT in the absence of specific invocation
by the States in their disputes. While the world community had almost forgotten the requirement of
unforeseen developments, the Argentina-Footwea23 and Korea-Dairy24 cases injected blood into the
dead letter law of unforeseen developments. In Argentina-Footwear, Argentina imposed safeguard
measures on imported footwear following an investigation as to the increased imports causing serious
injury to the domestic producers. European Communities (EC) challenged the measures on several
counts including the failure to satisfy the requirement of unforeseen developments.

EC's argument was that the GATT and Agreement on Safeguards must be read together, since they
form the integral part of the WTO agreements. Therefore, all requirements of both agreements,
including unforeseen developments, must be satisfied to successfully invoke safeguard action.
Argentina countered the EC's contention on the basis that the satisfaction of the three requirements of
Article 2.1 of the Agreement on Safeguards implied the satisfaction of Article XIX of the GATT. It
also relied on the General Interpretative Note to Annex 1 A of the WTO Multilateral Trade
Agreements on Goods, which states that the provisions of multilateral trade agreements must prevail
over the GATT in the event of conflict. Thus, according to Argentina, the omission of the requirement
of unforeseen developments under the Agreement on Safeguards being later in time must get
precedence over the earlier requirement under the GATT.

While the Panel agreed with the contention of Argentina, the Appellate Body reversed the findings of
the Panel. The Appellate Body reaffirmed the continuation of unforeseen developments as a
prerequisite for safeguard actions with the same vigour as it was found to exist before the Agreement
on Safeguards. In holding so, the Appellate Body relied on Article II of the WTO Agreement, 25 which
states that the Annexes 1, 2 and 3 are the integral parts of the WTO Agreement and are equally binding
on the member States. The Appellate Body also did not find any inherent conflict between the two

23
Argentina - Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, 14 December 1999.
24
Korea - Definitive Safeguard Measures on Imports of Certain Dairy Products, WT/DS98/AB/R, 14 December 1999.
25
Agreement Establishing the World Trade Organization 1994, 1867 U.N.T.S. 154.

19 | P a g e
agreements on this aspect,26 since the Agreement on Safeguards is in no way prohibiting the
consideration of unforeseen developments. Hence, both the provisions in question can be read together
on the basis of harmonious interpretation to find place for all the five requirements of safeguard
actions. Moreover, the Appellate Body found that if the drafters of the Agreement on Safeguards
intended to omit the unforeseen developments clause, they could have done it expressly.

The Korea-Dairy case, which was contested in tandem with the Argentina-Footwear, involved the
imposition of safeguard measures by Korea on the import of skimmed milk powder. Once again, EC
challenged the Korean measures on the ground of failure to comply with the requirement of unforeseen
developments. Korea asserted that the Article XIX of GATT and Agreement on Safeguards are in
conflict with each other, and the latter being specific in language prevails over the generic language
of the former. Though the Panel did not agree that there is a formal conflict between the two provisions
in question, it held in favour of Korea on the ground that the unforeseen developments clause does
not create any legal obligation, but merely stand as an explanation of why safeguard measure may be
required.

However, on appeal, the Appellate Body disagreed with the Panel's findings. It referred to Article 11
of the Agreement on Safeguards, which states that "A Member shall not take or seek any emergency
action on imports of particular products as set forth in Article XIX of GATT 1994 unless such action
conforms with the provisions of that Article applied in accordance with this Agreement." Moreover,
Article 1 of the Agreement on Safeguards states that the purpose of the Agreement is to establish
"rules for the application of safeguard measures which shall be understood to mean those measures
provided for in Article XIX of GATT 1994". These provisions, according to the Appellate Body,
reflect the intention of the drafters of Agreement on Safeguards to affirm the continuing vitality of
Article XIX of the GATT. Therefore, Article XIX of the GATT has to be read cumulatively with the
Agreement on Safeguards, and any interpretation of the treaty must give meaning and effect to all the
terms of the treaty and not selectively some parts. The Panel's interpretation was contrary to this norm,
since it made the requirements of Article XIX of the GATT redundant.

26
The 'conflict' is interpreted to mean a situation where adherence to one provision results in the violation of other.
Guatemala-Antidumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R, 02 November 1998.

20 | P a g e
 EFFORTS TO REDUCE THE RIGOUR OF UNFORESEEN
DEVELOPMENTS REQUIREMENT AND THE RESPONSES OF THE WTO
ADJUDICATING BODIES
With the failure to root out unforeseen developments as a prerequisite for invoking safeguard actions,
the States, especially United States, made several attempts to dilute the rigour of the requirement. In
the US-Lamb Meat case,27 the United States imposed safeguard action on the import of lamb meat,
since there was an increase in the import due to the change in the pattern of lamb meat imports.
However, the United States' competent authority, United States International Trade Commission
(ITC), did not explain this fact as an unforeseen development in the process of investigation. When
the United States' action was challenged by Australia and New Zealand, the United States argued that
the competent authority is obligated only to establish a factual basis for the existence of unforeseen
developments. Neither a specific finding nor an explicit conclusion about the unforeseen
developments, according to the United States, is required to be made by the competent authority.

However, the Appellate Body rejected this line of argument. It found that the existence of unforeseen
developments is a "pertinent issue of fact and law" under Article 3.1 of the Agreement on Safeguard.
Since the said provision states that "the competent authorities shall publish a report setting forth their
findings and reasoned conclusions reached on all pertinent issues of fact and law", the published report
of the competent authorities must contain a 'finding' or 'reasoned conclusion' on unforeseen
developments. While stressing on the need for an explicit analysis and finding of unforeseen
developments, the Appellate Body also mentioned 'when' and 'where' this task should be performed.
According to it, the competent authority must make the finding before the safeguard action is taken
and the finding must find a place in the report of competent authority. There shall not be any ex-post
facto effort to extract the facts from the report to analyse the unforeseen developments, since
unforeseen developments is a pre-requisite for the escape clause relief and not the consequence of it.

In the US-Line Pipe Safeguards28 case, the United States imposed safeguard measures on circular
welded carbon quality line pipe after the investigation by ITC. The ITC in its report had made an
observation on collapse of oil and gas prices as a factor causing injury to the domestic industry. It also

27
United States - Safeguards Measures on Imports of Fresh, Chilled and Frozen Lamb Meat from New Zealand and
Australia, WT/DS177/AB/R (complainant by Australia) and WT/DS178/AB/R (complaint by New Zealand), 1 May 2001.
28
United States - Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/R, 29 October 2001.

21 | P a g e
mentioned that "a few producers felt that one reason for the increase in imports was a decrease in
demand in Asia due to the financial crisis there." Korea, being heavily affected by the measure,
challenged it on several grounds including the absence of any indication of ITC addressing the issue
of unforeseen developments. The United States argued that the collapse in oil and gas prices and the
financial crisis in Asia are the unforeseen developments, which are sufficiently pointed out by the
ITC. In addition, it referred to the Korean arguments and pointed out that Korea itself had conceded
the existence of unforeseen developments by referring to the unexpected collapse in oil prices in late
1998 and early 1999. However, the Panel rejected this contention and observed that the crucial element
for the compliance of the requirement of unforeseen developments is the analysis and specific findings
of unforeseen developments in the report of the competent authority. Korea's conceding of unexpected
collapse in oil prices and ITC's mere reference to few producers' opinion regarding the financial crisis
in Asia as a reason for increase in import did not result in the demonstration of the unforeseen
developments by ITC. This position of the Panel was impliedly accepted by both the parties, since
neither of them appealed to the Appellate Body on this count.

Panel's findings in Chile-Price Band System case29 supplement the US-Lamb Meat case especially on
the ex-post facto explanation. In this case, Chile's safeguard measure against the products subjected
to its price band system, which included wheat, wheat flour, sugar and edible vegetable oils, was
challenged by Argentina. On the point of absence of identification or findings on unforeseen
developments before imposing the safeguard measures, Chile contended that its competent authority
had complied with the requirement by making the following observation;

... the increase in imports, and the potential for further substantial increases, has occurred at a time when
international prices of the products investigated have been subject to sizeable and rapid decreases.

However, the Panel again disagreed with Chile on the ground that the specific finding as required
under Article 3.1 of the Agreement on Safeguards is not made in this case. The competent authority
did not discuss or explain why the "sizeable and rapid decreases" in international prices could be
considered as unforeseen developments. Moreover, according to the Panel, there is nothing in the
report of the competent authority that this reference was made in the light of unforeseen developments.

29
Chile - Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/R, 03 May
2002.

22 | P a g e
Thus, the ex-post facto explanation by Chile cannot cure the defect of not making a specific finding
on the unforeseen developments before resorting to escape clause action.

The next significant case to address the issue of unforeseen developments under the WTO regime is
the US-Steel Safeguards. 30 This case has been the most controversial among all for various reasons
with as many as eight States complaining against the United States. Two major developments can be
found on the aspect of unforeseen developments in this case. First, the United States argued that the
analysis of unforeseen developments by ITC in this case complied with the necessary requirement,
since it clearly stated that the Russian crisis, the Asian crisis and the continued strength of the United
States' market together with the persistent appreciation of the US dollar as well as the confluence of
those events actually amounted to unforeseen developments within the meaning of Article XIX: 1(a).
When this argument was countered by the complainants on the ground that the ITC failed to analyze
how the above facts constituted unforeseen developments, the United States pointed out that Article
XIX of GATT does not provide explicit guidance on 'when', 'where' and 'how' the demonstration of
unforeseen developments should be done. Further, it argued that the language of Article 3.1 of the
Agreement on Safeguards does not call for an explicit explanation of unforeseen circumstances, and
the requisite "reasoned conclusion" under it can be reached without a "reasoned and adequate
explanation". However, the Appellate Body disagreed with these contentions and held that in the
absence of "reasoned and adequate explanation", the Panel would not be able to assess the measure
objectively as mandated under Article 11 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes (Dispute Settlement Understanding). 31

The second significant point addressed by the Appellate Body on unforeseen developments in this
case is, whether the aggregate analysis of unforeseen developments on ten different kind of steel
products by the United States is justifiable under the WTO regime? In this regard, the Appellate Body
upholds the Panel's decision that the unforeseen developments analysis should always be on product-

30
United States - Definitive Safeguard Measures on Imports of Certain Steel Products,WT/DS248
/AB/R,WT/DS249/AB/R,WT/DS251/AB/R,WT/DS252/AB/R,WT/DS253/AB/R,WT/DS254/AB/R,WT/DS25 8/ AB/R,
WT/DS259/AB/R (complaints by the European Communities, Japan, Korea, China, Norway, Switzerland, New Zealand
and Brazil) 10 November 2003. Though the Argentina - Definitive Safeguard Measure on Imports of Preserved Peaches,
WT/DS238/R, 14 February 2003 was next in the sequence of cases on unforeseen developments, not much value addition
is done by it to the jurisprudence of unforeseen developments.
31
Art. 11 states that "...a panel should make an objective assessment of the matter before it, including an objective
assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make
such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the
covered agreements."

23 | P a g e
byproduct basis, since both Article XIX of GATT and the Agreement on Safeguards permit the
imposition of safeguard actions on the product only if the requirements are satisfied with respect to
such product.32 Thus, the United States' imposition of safeguard measures is not in consonance with
the WTO requirements.

In Dominican Republic-Safeguard Measures, 33 the Dominican Republic repeated the argument that
the proof of unforeseen developments is not required under the Agreement on Safeguards, and hence,
it is not a binding obligation. But again, the Panel rejected this argument and referred back to the
earlier decisions of Appellate Body emphasizing the obligation to demonstrate unforeseen
developments before invoking safeguard measures. It observed that though the doctrine of precedent
is not applicable in WTO dispute settlement, the decisions of DSB create legitimate expectations
among the members. Hence, departure from the earlier decisions of the Appellate Body may be made
only in case of adequate justifications. In this case, the Panel observed that the Dominican Republic
has not given any convincing argument as to why the Panel should depart from the earlier decisions
of the Appellate Body.

Debate over unforeseen developments further continued in Ukraine-Passenger Cars,34 wherein Japan
contended that Ukraine has failed to demonstrate the existence of unforeseen developments as well as
logical connection between increased imports and unforeseen developments. Ukraine brought forward
an argument that unforeseen developments in Argentina-Footwear case is not established as a
'condition' for imposing safeguard measures, but it is just 'a circumstance which must be demonstrated
as a matter of fact'. Hence, according to Ukraine, establishing unforeseen developments is not a
prerequisite for invoking safeguard actions. While the Panel agreed with the contention that
unforeseen developments are 'circumstances' and not 'conditions' for application of safeguard
measures, it observed that the satisfaction of such circumstances need to be demonstrated by the
competent authorities; (i) through reasoned and adequate explanations, (ii) in the published report,
and (iii) before a safeguard measure is applied. Hence, establishing unforeseen developments is a
prerequisite for invoking safeguard actions.

32
See Art. XIX of the GATT and Art. 2.1 of the Agreement on Safeguards discussed above.
33
Dominican Republic - Safeguard Measures on Imports of Polypropylene Bags and Tubular Fabric, WT/DS415/R,
WT/DS416/R, WT/DS417/R, WT/DS418/R, (complaints by Costa Rica, El Salvador, Guatemala, Honduras) 31 January
2012.
34
Ukraine - Definitive Safeguard Measures on Certain Passenger Cars WT/DS468/R, 26 June 2015.

24 | P a g e
The list of recent cases mentioned above clearly shows that few States led by the United States are
making all efforts to eliminate or at least dilute the rigour of unforeseen developments requirement.
But the DSB is vehemently rebutting any such effort from conceptualizing into reality. Case after the
case, the Appellate Body is restoring the lost glory of unforeseen developments much to the
dissatisfaction of the United States. Thus, as the jurisprudence stands now, the competent authorities
of the States are not only duty bound to identify the existence of the unforeseen developments but also
compelled to demonstrate with the reasoning that there is a direct link between unforeseen
developments, increased imports and injury. Any safeguard measure imposed without proper
sequential analysis of all the requirements, as evidenced by the report of the competent authority, does
not stand before the WTO adjudicating bodies.

25 | P a g e
AN ANALYSIS OF THE DSB'S APPROACH FROM THE PERSPECTIVE OF
ACADEMIA
After analyzing the approach of the DSB on the requirement of unforeseen developments, the author
attempts to answer in this part of the paper the most significant question posed on the appropriateness
of the DSB's approach of retaining the unforeseen developments clause. The academic circle is divided
on this point, with seemingly more number of scholars preferring to criticize the DSB's approach. The
major problem perceived by them in retaining the unforeseen developments clause is the vagueness
associated with it. 35On this count, the critiques are of the view that the safeguard measures within the
framework of the WTO regime would be near impossible to implement, since the member States have
to satisfy the ambiguous language in both the WTO Agreements and the WTO adjudicating bodies'
decisions. 36

The 1950's definition in the Hatters 'Fur case is argued to be of no use in the light of significant
developments that have taken place over the last six decades. The determination of whether the
negotiators could or should have foreseen the developments at the time of negotiations was easy in
the Hatters' Fur, since there was only one negotiating round of 1947 in question. But the situation has
changed with respect to many of the products, since the negotiations to grant concessions on them
might have been several decades old and even the concessions could have been subject to changes in
successive negotiations. Thus, it becomes practically impossible to figure out the crucial point in time
for finding the expectations of negotiators. Even if the crucial point in time is determined, the
determination of the reasonable expectations of the negotiators at such an earlier point in time is
argued to be impracticable, more specifically in the cases of negotiators having passed away by the
time the question of their expectation arises. 37

35
According to Lee, "the clause is too ambiguous to be an objective legal requirement." See YongShik Lee, Safeguard
Measures in the World Trade: The Legal Analysis, Second edition, (The Netherlands: Kluwer Law International, 2005) p.
44.
36
Schick, 'Agreement on Safeguards: Realistic Tools for Protecting Domestic Industry or Protectionist Measures?' Suffolk
Transnational Law Review, Vol.27, No. 1, 2003, pp. 153 - 190 at pp. 153 & 154.
37
As Raj Bhala rightly points out, the Hatters'Fur definition of unforeseen developments is a mixture of objective and
subjective elements. The definition, as mentioned above, speaks about the 'reasonable' expectations of the 'negotiators of
the country making the concession'. The first part of reasonability banks on the objective factor of reasonable man's
perception. However, the second part requires the subjective element of reasonable person stepping into the shoes of the
negotiators from the country concerned and concluding on the basis of their perspective in light of the circumstances
prevailing in the country during the time of negotiation. Supra note 11, p. 956.

26 | P a g e
The change in tariff negotiations with the introduction of Swiss formula is also argued to add on
problems in the determination of unforeseen developments relating to the product in question. 38 This
is because the Swiss formula substitutes the product-byproduct determination of concessions, with the
across the board concessions on several products at one go.39 Adoption of such a formula, which
heavily involves the politico-economic bargaining process, would leave little scope for the negotiators
to analyze the trade trend and future implications of trade concessions on each product subject to
concessions. Therefore, a probe into what is unexpected of the negotiators at the time of making such
concessions on a particular product may end up in searching a lost fish in the ocean.

Critiques go on to supplement the above arguments relating to the practical problems posed by the
unforeseen developments clause by attempting to link them to the intentions of the Uruguay Round
negotiators as well as to the State practices subsequent to the entry into force of GATT 1947. Since
the draft version of the Agreement on Safeguards during the Uruguay Round included the unforeseen
developments clause and it was deleted in the final version, the omission is said to be intentional. Prof.
Lee is of the opinion that

... the introduction of the "unforeseen developments" requirement by the Appellate Body is inconsistent with the
intent of the Uruguay Round negotiators as reflected in the negotiation history, is not supported by the text of the
Agreement on Safeguards, and only adds confusion to the disciplines of safeguards.40

The Preamble's reference to the need for a comprehensive agreement is used to argue that the
Agreement on Safeguards is an independent agreement overriding the GATT provisions. In addition,
the absence of the unforeseen developments clause in the national legislation of most of the States in
the world is argued to depict the State practices to give a natural death to such a vague and
impracticable clause included under Article XIX of the GATT.41 It is also argued that the requirement
of unforeseen developments in safeguard actions has got a self-contradiction: on the one hand,
invoking unforeseen developments require that the trade negotiators must not have foreseen such
developments, and on the other hand, the existence of safeguard actions is the indicator of the fact that

38
See, Raychaudhuri, 'The Unforeseen Developments Clause in Safeguards under the WTO: Confu sions in Compliance',
Estey Centre Journal of International Law and Trade Policy, Vol. 11, No. 1, 2010, pp. 302 - 320 at p. 314.
39
See, Das, B.L. The World Trade Organization: A Guide to the Framework for International Trade, (Chennai: Earthworm
Books, 1999) pp. 60 & 61.
40
Yong-Shik Lee, 'Not Without a Clue: Commentary on the Persistent Puzzles of Safeguards', Journal of World Trade,
Vol. 40, No. 2, 2006, pp. 385 - 404 at p. 390.
41
Sykes, 'The Fundamental Deficiencies of the Agreement on Safeguards: A Reply to Professor Lee', Journal of World
Trade, Vol. 40, No. 5, 2006, pp. 979 - 996 at p. 982.

27 | P a g e
trade negotiators did foresee the possibility of resorting to it in certain situations. 42 On all these counts,
a large majority of publicists argue against the revival of the unforeseen developments clause by the
DSB, terming it as a mistake from the legal viewpoint.43

The above arguments seem to be flawless from the practitioners' point of view. However, in the zeal
to highlight the practical difficulties in the proof of unforeseen developments, the scholars fail to give
due regard to two major aspects. First, safeguards actions are emergency actions to deal with the
situations caused by fair trade. They are exceptions to be sparingly invoked and should always remain
as such to the general norm of free trade. Any attempt to allow easy access to safeguard measures
would result in undoing the good work of more than sixty five years in the field of trade liberalization.
Thus, the safety valve of 'unforeseen developments' is a 'necessary evil' to prevent the 'evil' of arbitrary
safeguard actions.

Second and the most significant aspect to be considered is the overwhelming criticism levied against
the approach of DSB in upholding the continuation of the unforeseen developments clause under the
Agreement on Safeguards. This is completely unwarranted in the light of the fact that the DSB is not
a body to create the new law but to interpret the law as it is. It has been expressly mandated under the
Dispute Settlement Understanding of noninvolvement in the process of adding or diminishing the
rights and obligations under the WTO Agreements. 44 Such an express mandate of DSB read in the
light of Article II of the WTO Agreement's 'single instrument' approach of all the WTO Agreements
compels the DSB to go only for harmonious interpretation to recognise all the five elements of
safeguard actions mentioned under Article XIX of GATT. Thus, the silence of Agreement on
Safeguards on unforeseen developments cannot be construed as the proof of its deletion in the absence
of express exclusion. Undoubtedly, steps to clarify the status of unforeseen developments under the
Agreement on Safeguards are required on the basis of priority to avoid arbitrariness in safeguard
actions.45 Otherwise, the controversy is going to stay until such express clarification, 46 which is

42
Zheng, 'Reforming Trade Remedies', Michigan Journal of International Law, Vol. 34, 2012, pp. 151 - 207 at p. 186.
43
See, Sykes, A. 0. The WTO Agreement on Safeguards: A Commentary, (New York: Oxford University Press, 2006) p.
118; Supra note 35, p. 50; Supra note 38, p. 315.
44
Art. 3.2 of the Dispute Settlement Understanding, while asserting the DSB as a forum for the preservation of rights and
obligations of the members under the WTO Agreements, expressly states that "Recommendations and rulings of the DSB
cannot add to or diminish the rights and obligations provided in the covered agreements."
45
Chaisse, Chakraborty and Kumar, 'Mastering a Two-Edged Sword: Lessons from the Rules and Litigation on Safeguards
in the World Trade Organization', Richmond Journal of Global Law Business, Vol. 13, 2014-15, pp. 563 - 592 at p. 592.
46
MoumitaMandal, 'Relationship between Article XIX of GATT 1994 and Agreement on Safeguards', Law Mantra
Journal, Vol. 4, Issue 2, 2016

28 | P a g e
detrimental to the process of trade liberalization as the States would resort to defensive approaches in
the trade negotiations for reducing the barriers to international trade.

29 | P a g e
 CONCLUSION
Safeguard Actions are the offshoots of politico-economic realities of the liberalization of international
trade. Though the process of trade liberalization involves the compromise on some elements of State
sovereignty and the inherent interest to protect the domestic industries, the leverage cannot lead to the
complete destruction of rights and prerogatives of the States. Therefore, as an exceptional norm to
protect the self interests, the safeguard actions are accepted by the world community to strike a balance
between the trade liberalization and protection of domestic industries. Since it has to perform this
delicate task of balancing competing but equally important interests, the drafters of the GATT have
incorporated cumbersome requirements for invoking safeguard actions. However, as time passed on,
it was witnessed by the States that the cumbersome requirements of safeguard actions have become
so difficult in practical terms to comply with that it is almost near impossible to invoke the safeguard
actions successfully by passing the threshold of all the requirements. The most significant problem in
this regard is found in the form of the unforeseen developments requirement.

With the knowledge of the unforeseen developments as the thorn in the flesh, the States, especially
led by the United States, initiated attempts for the removal or at least for the reduction of the rigor of
the clause. This is evidenced in the series of instances where in the United States invoked or tried to
invoke safeguard actions. Unfortunately for the United States, every time when it attempted to dilute
the rigor of unforeseen developments, the DSB has stepped heavily on it to reinstate the glory of
unforeseen developments.

As argued above, the DSB is right in its approach of interpreting the law as it stands now. It, as a
matter of fact, cannot look into the practical difficulties and other considerations in interpreting the
provisions of the WTO agreements. The DSB, as the interpreter of the WTO laws and not the creator
of new laws, is mandated to interpret the text of the WTO agreements in accordance with the
customary rules of interpretation. It cannot create new law by narrowing down the interpretation of
the express provisions in the WTO agreements. Any change in the WTO law, if required, should be
left to the political process of law making under the WTO multilateral trade negotiations and not to
the willingness of the DSB.

30 | P a g e