Escape Clause

Escape clause in Global Commerce Policy

In this regard, escape clause is: a provision in trade agreements which permits a party to suspend its obligations when imports cause or threaten to cause serious harm to the domestic producers of similar goods. GATT Article XIX contains the escape clause for trade in goods used by WTO members. The entries on trade policy are here. It allows a member to supend its obligations or to modify liberalizing commitments if there are unforeseen circumstances and if any product is imported in such increased quantities likely to cause or causing harm to domestic producers. The Article is supplemented by the detailed rules of the Agreement on Safeguards. The GATS does not yet have an escape clause, though Article X establishes the mandate for this. Two main reasons are usually given for the inclusion of safeguard provisions in agreements. First, they encourage greater liberalization since countries making liberalizing commitments will have the opportunity to step back from them if they have unwittingly provoked a surge in imports clearly harming domestic industry. Second, they increase the flexibility of the multilateral trading system by promoting its longer-term stability. The immediate reason for including an escape clause in the GATT was United States Executive Order 9832 of February 1947 which made it mandatory for American trade negotiators to include in all future trade agreements an escape clause similar to that contained in the United States-Mexico Trade Agreement of December 1942. See also safeguards and Section 201.[1]

Escape clausein the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Escape clause” entry (OAS)

See Also