Japan-Ukraine Spar over Auto Safeguards

Japan’s dispute with Ukraine against the latter’s safeguard measures on imported passenger cars has advanced to the panel stage, after Tokyo presented its second panel request at the WTO dispute settlement body on Wednesday. (DS468)

Safeguard rules allow countries to increase duties or quotas on certain products beyond agreed limits when an increase in imports caused by unforeseen events threatens to cause serious injury to domestic producers.

The Ukrainian safeguards at issue took effect last April, and are scheduled to last for a period of three years. These additional duties - which range between 6.46 percent and nearly 13 percent - cost the Japanese auto industry as much as 1.94 billion yen, or US$19 billion, according to estimates released by the Japanese Ministry of Economy, Trade and Industry last month.

Japan first lodged the complaint last October, arguing that the level of these safeguards is higher than what is needed to counter “serious injury,” and citing concerns over the investigation procedures. Tokyo had filed its first panel request in February, which Kiev blocked.

Kiev is one of the global trade body’s newest members, having joined in 2008. The dispute is the second that Ukraine has faced during that time.