Guidance

Determining safeguard measures

Updated 12 April 2024

Legal framework

The guidance reflects the legislation relating to the determination of safeguard measures, as amended most recently by the Finance (No.2) Act 2023 and the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) (Amendment) Regulations 2023. It is produced for explanatory purposes only and is not intended to supplant or modify the application or interpretation of the relevant legislation.

Primary legislation in the Taxation (Cross-border Trade) Act 2018 (the Taxation Act)

Schedule 5 to the Taxation Act describes when an investigation into whether it is appropriate to apply a safeguard measure may be initiated.

Secondary legislation in the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019 (the Safeguard Regs)

Part 2 of the Regulations describes how we determine whether increased quantities of the goods under investigation have been or are being imported into the UK. Part 3 explains how we establish whether increased quantities of the goods are causing or have caused serious injury. Part 4 covers how we determine an adequate safeguard remedy to prevent or remove serious injury. Part 5 of the Regulations describes how we should initiate and carry out safeguard investigations.

World Trade Organization – relevant legislation

The General Agreement on Tariffs and Trade (GATT) provides further guidance on the use of safeguard measures in Article XIX (Emergency Action on Imports of Particular Products), and the Agreement on Safeguards. We must have regard to international arrangements which the UK is a party to and this includes WTO rules.

Assessment of conditions for a safeguard measure

The two main matters to be determined, for the purpose of a safeguard investigation, are whether:

• the goods concerned have been or are being imported into the UK in increased quantities
• the goods concerned have caused or are causing serious injury to UK producers

Furthermore, in order to recommend a definitive safeguarding amount or tariff rate quota, we must be satisfied that there is in place an adjustment plan setting out how UK producers of the relevant goods intend to adjust to increased imports (unless the TRA waives the requirement).

Imports into the UK in increased quantities

We will determine whether the goods concerned have been or are being imported into the UK in increased quantities. We will also determine whether the increase in imports was foreseeable, and whether the increased quantities are significant.

Increased quantities of imports during the period of investigation

We will examine import data over our chosen period of investigation. We will consider the trend in imports during the entire period of investigation, especially the recent past.

More information about how we set a period of investigation can be found in the TRA’s investigation process guidance.

To determine whether the goods concerned are being imported into the UK in increased volumes, we must consider:

• whether there has been an absolute increase in the volume of the goods concerned being imported into the UK, or
• whether there has been a relative increase in volume compared with the total UK production of like goods and directly competitive goods

Unless we exempt specific countries (e.g. in accordance with trade agreements), we must consider imports of the goods concerned from all foreign countries and territories.

Significant increase in the imports of the goods concerned

Once we have determined that there has been an increase in the volume of imports of the goods concerned into the UK, we consider whether the increase is significant. Therefore, we assess the rate and volume of imports of the goods concerned into the UK.

Foreseeability

To decide whether it was possible to foresee the increase in imports, we will establish whether it was a result of unexpected developments. To make this assessment, we may examine:

• changes in patterns of demand for the goods concerned in the period of investigation and for like goods and directly competitive goods which are produced in the UK
• global overcapacity or increases in production capacity of the goods concerned
• economic or political crises
• any other factors we consider relevant

If we find that the increase in imports was foreseeable, we won’t consider it to be significant for the purposes of our analysis.

Serious injury is being or will be suffered by UK producers

If we determine that the goods concerned have been or are being imported into the UK in increased quantities, we will determine whether UK producers of like goods and directly competitive goods have suffered or are suffering ‘serious injury’: this means they must be significantly impaired by the surge of imports, or at imminent risk of being significantly impaired.

Like goods are goods which are like the goods concerned in all respects, or with characteristics closely resembling them. Directly competitive goods are goods which are directly competitive with the goods concerned. Further information on goods can be found in the TRA’s investigation process guidance.

Our injury determination will reflect the data we have gathered relating to UK producers. The number of UK producers in safeguard cases is likely to be more than in a dumping or subsidy case since the investigation takes into consideration producers of directly competitive goods as well as those of like goods.

We will base our assessment of whether there is injury on a number of factors. These will include:

• the rate and volume of increase in the imports of the goods concerned into the UK, in absolute or relative terms;
• the export capacity of the goods concerned in their country or countries of export and the likelihood that this capacity will be exported to the UK;
• the share of the domestic market in the UK taken by the increased quantities of imported goods;
• changes in UK producers’ levels of sales, productivity, production, capacity utilisation, profits and losses, and employment.

Further information about how we assess these factors can also be found in our guidance on determining injury and causation.

Serious injury caused by the goods concerned

We must assess whether the serious injury suffered by UK producers is caused by the importation of the goods concerned in increased quantities. We may consider:

• the volume effects of the increased import of the goods concerned on like goods and directly competitive goods during the period of investigation;
• the effect on prices in the UK market for like goods and directly competitive goods during the period of investigation, including depression and/or suppression of price increases
• any other known factors we think are relevant

We must consider whether any known factors other than the importation of the goods concerned in increased quantities has caused or is causing the serious injury to UK producers. We must not attribute the serious injury to the goods concerned if they are caused by other known factors.

Further information about how we assess causation can also be found in our guidance on determining injury and causation.

Adjustment plans

If we determined that there is a significant increase in imports causing (or threatening to cause) serious injury to UK producers, we may make a recommendation to the Secretary of State if we are satisfied that UK producers have an adjustment plan in place. We will assess how UK producers intend to adjust to the increased imports of the goods concerned.

Adjustment plans may include information relating to:

• potential innovation, research and development initiatives to improve the competitiveness of UK producers;
• changes which UK producers intend to make to improve efficiency, including workforce effectiveness and investing in new or different machinery;
• other relevant information.

We will assess whether the content of an adjustment plan contains sufficient information to enable us to recommend a safeguard measure. Therefore, we may seek additional information from UK producers and take into consideration any factors we consider relevant. However, we do not require an adjustment plan where we have waived the requirement for the application to initiate the investigation to be accompanied by such a plan.

Defining a safeguard measure

If we recommend a safeguard measure, we must determine the type and form as well as the duration of such measure.

Types of safeguard measures

We can calculate a safeguard remedy as either:

• a safeguarding amount, which is an additional amount of import duty on the relevant goods
• a tariff rate quota (TRQ). Goods up to a specified quantity are subject to a lower import duty. Once the quota has been exceeded, a higher import duty will be applied

We will only recommend one of the above on any specific goods. If there are multiple types of goods under the same category, we may recommend a different rate of import duty or tariff rate quota for each category. We will do this for all goods being investigated.

Safeguarding amount

We will determine an additional amount of duty based on an assessment of the minimum increase in average import prices of goods concerned that is necessary to remove the injury. In making this assessment, we will consider (where relevant) the weighted average price of the goods concerned imported into the UK and assess the prices that UK producers of like goods and directly competitive goods could have expected to achieve under normal conditions of competition in the absence of the importation of the goods concerned in increased quantities into the UK.

In cases where we have established that there is a threat of serious injury, we may base our calculations on traditional trade flows, for example during the last three representative years to determine the appropriate amount of additional duty. The duty should be set to restore the domestic price level to the average price level of the last three representative years.

We will seek to liberalise the safeguard amount over time.

Tariff rate quotas

A tariff rate quota sets a limit for the amount of goods that can be imported at a certain tariff rate. Goods imported in excess of this quota are subject to a higher tariff. Our recommendation will include the amount of the quota, how it should be allocated, and the rates of import duty that should be applied to goods subject to the quota. The aim of the tariff rate quota is to provide an equivalent impact on UK prices to a proportional tariff set at the injury margin calculated in the investigation. Where appropriate, we may use econometric modelling to estimate the effect of various quotas and tariff rates on prices.

In cases where injury to domestic industry has not yet occurred, our approach will be to set the tariff rate quota at a level which will prevent future imports which harm the industry. This aims to keep the imports at a ‘normal’ level, which might be no lower than the average of the last three representative years.

We will seek to liberalise the safeguard measure over time. This may be done through increasing the size of the quota, decreasing the additional amount of duty or both.

We will consult with the Secretary of State before making any recommendation on allocating quotas.

Length of a safeguard measure

A safeguard measure will only be applied for the period we are satisfied is necessary to prevent or remedy serious injury to UK producers and to facilitate domestic industry’s adjustment to the surge in imports.

The period when the measure is operational must not exceed four years. However, after an extension review, we can recommend that the measure is extended to a maximum of eight years altogether if:

• the measure is still needed to remedy or prevent serious injury to the domestic industry
• there is evidence demonstrating that the domestic industry is adjusting.

Once an imported product has been subject to a safeguard measure, it cannot be immediately subject to another one.

A new safeguard measure cannot be applied until a period of time has elapsed which is at least as long as the period the previous measure covered. For example, if a safeguard measure was in effect for five years, another measure cannot be applied until five years after the previous measure elapsed.

The minimum period of time that must elapse between safeguard remedies is two years and one day after the last one expired, regardless of the length of time the previous remedy covered. For example, even if a safeguard measure was in place for only 6 months, another safeguard measure cannot be applied until two years and one day have passed.

If a safeguard measure is in place for more than a year, the measure needs to be progressively liberalised – this means reducing at regular intervals its trade-restrictive effect.

Application of a safeguard measure

Non-discriminatory application of safeguard measures

Safeguard measures must be applied on a non-discriminatory basis, also known as the Most-Favoured Nation basis. This means that the safeguard measure is applied to the goods concerned from all countries, subject to limited exceptions.

Exceptions related to developing countries

The UK cannot impose a safeguard measure on products originating from a developing country member of the WTO whose imports account for 3% or less of the total imports of those goods into the UK (low volume exporters). This exception applies providing that the collective volume of all the low volume exporters of the goods concerned is no more than 9% of the total imports into the UK.

When we recommend that a safeguard measure is applied, we will publish a list of developing countries which are low volume exporters to clarify which countries will be excluded from the measure.

Exceptions to non-discriminatory application

Goods from a particular country or territory may be exempted where all of the following apply:

• immediately (the day) before the UK left the European Union (EU), the foreign country or territory from which the goods concerned are imported and the European Union were signatories of a free trade agreement;
• the foreign country or territory from which the goods are imported and the UK are party to a free trade agreement;
• the free trade agreement between the foreign country or territory from which the goods are imported and the UK contains a provision for exempting goods from safeguard measures.

In such circumstances, the goods from that country or territory may be exempted from:

• the scope of a recommendation to apply either a provisional or definitive safeguard remedy;
• our assessment on whether the goods concerned have been or are being imported into the UK in increased quantities;
• our determination on whether the import of the goods concerned in increased quantities to the UK has caused or is causing serious injury to UK producers.