The complainants were quick to state that the Dominican Republic`s allegations were unfounded. They found that their claims were exclusively related to the WTO agreements – in particular the GATT and the safeguards agreement – and that they had not asked the body to rule on a violation of CAFTA-DR. Footnote 77 Following an agreement between the parties, the panel declined to comment further and exercised its jurisdiction. Footnote 78 First, these disputes are, in good conscience, the first time that a WTO member has argued that the effects of China`s accession to the WTO can serve as an unforeseen development that requires the imposition of comprehensive WTO protection. The panel rejected the Dominican Republic`s arguments and found that the investigation report did not specify how the increase in imports was due to China`s accession to the WTO and its impact on international trade, or why these events were not foreseeable. Footnote 48 The provisions for the application of protection to obtain a temporary lifting of the cafta-DR obligation are defined in Chapter 8 of the agreement, which sets out CAFTA-DR-specific rules for trade remedies. Article 8.1 specifies: 59 Note that Article 2.1 of the Safeguards Agreement takes into account the requirements that the WTO member must meet in its investigation of a petition of protection, including an analysis of the increase in imports, harm and causation. Article 2.2 of the Safeguards Convention deals with the application of safeguard measures. Another alternative is to turn to an extraordinary safeguard clause, that is, a clause that is not placed under the auspices of Article XIX of the GATT or the safeguards agreement. The China-specific transitional guarantee, presented in China`s accession protocol, is an example. Footnote 73 Given that a significant portion of the increase in imports of the affected products comes from China, this alternative is important in this litigation (although we recognize that this would not always be the case for other PTA-related security disputes).
This article examines how WTO disputes over the Dominican Republic and safeguards raise a new set of questions about the intersection of EDPs and safeguards. The cases presented by four Central American countries, Costa Rica (DS 415), Guatemala (DS 416), Honduras (DS 417) and El Salvador (DS 418) – are unique in two respects. First, litigation is one of the few instances where a country has used WTO dispute settlement to challenge one of its PTA trading partners for applying safeguards against its imports. In the second footnote 2, these disputes represent the first time that the WTO has considered whether a policy measure constitutes illegal protection when the applied law does not exceed the rate of duty bound in the WTO member`s timetable (and thus its quota obligations and other quantitative restrictions). While it is unusual for a legal case to occur in such circumstances, we argue that the interaction between multilateral commitments and the Dominican Republic`s EPZ commitments likely contributed to the protection applied and that the WTO panel rightly stated that it was problematic. The granting of specific protection to China assumes that a WTO member meets certain conditions set out in point 16 of China`s accession protocol. Footnote 79 A brief examination of the facts of this case suggests that these conditions could have been easily met.