China’s WTO protocol of accession contains a special provision that allows any WTO member to file a safeguard action against any mainland Chinese product through 11 December 2013. The petitioner must show that such a product is being imported in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products. If the WTO member makes an affirmative determination of market disruption it can adopt relief to the extent necessary to prevent or remedy such disruption, generally through the establishment of quotas or additional duties. Such relief may be implemented for a period of up to two years in the case of a relative increase (i.e., when imports from China increase but total imports decline) or a period of up to three years in the case of an absolute increase (i.e., when total imports and imports from China both increase). China may adopt retaliatory measures if such relief remains in place for a longer period.

A WTO member may also request consultations with China in instances where another WTO member imposes a safeguard measure on mainland Chinese products and that action is deemed to cause or threaten to cause significant diversion of trade into its market. Such consultations must be held within 30 days after the request is notified to the WTO Committee on Safeguards and the WTO member involved may adopt relief measures to limit imports from mainland China to the extent necessary to prevent or remedy such diversion.

Many Latin American countries have administrative procedures in place to pursue safeguard actions against mainland Chinese products and there is a possibility that the recent U.S. decision to impose safeguard duties on certain passenger vehicle and light lorry tyres from the mainland could reignite interest in the region to take similar action against a range of products. Perhaps a more likely scenario is the potential utilisation of the trade diversion clause to target mainland Chinese products, especially if a Latin American country or the United States launch additional safeguard proceedings in the near or medium term. However, Latin American countries have favoured antidumping proceedings, global safeguard actions, tariff increases and the establishment of various non-tariff barriers over China product-specific safeguard actions as part of their efforts to restrain imports of mainland Chinese merchandise, and this trend is likely to continue in the years ahead. AD actions are especially popular, in part because they can remain in place for a period of five years and are often renewed beyond their expiration date. Similarly, tariff hikes on an MFN basis and non-tariff barriers, including non-automatic licensing, can be applied rather easily and swiftly and can remain in place almost indefinitely.

Information from the WTO indicates that only two Latin American countries have ever imposed safeguard measures against mainland Chinese products under the transitional product-specific safeguard provisions (Section 16) of China’s WTO protocol of accession. Peru established safeguard duties for a relatively short period of time on imports of certain apparel and textile made-ups from China in December 2003. Colombia adopted provisional safeguard measures against certain mainland Chinese textiles and apparel in 2003 and 2004, involving certain fabrics, textile made-ups and apparel (August 2003), certain hosiery (September 2003) and certain underwear and brassieres (February 2004). Colombia has also applied other safeguard measures on mainland Chinese products in recent years, including temporary quotas on certain apparel and footwear in 2008. Ecuador has conducted several safeguard investigations involving mainland Chinese products but did not adopt any measures, although it did establish comprehensive safeguard duties and quotas on imports from all countries in January 2009 for balance of payment reasons.