The Thai Safeguard Measure on Increased Imports Act B.E 2550 (2007) ("Act") was announced on 7 January 2008 and came into force on 6 April 2008. Safeguard measures are imposed as a means of restricting imports of certain products which are deemed threatening to the business of the local industry or manufacturers of the same or similar products. The Act was proposed by the Ministry of Commerce to amend and improve the law on safeguard measures which had been inactive since its first implementation in 1999.
As a member of the World Trade Organisation ("WTO") since 1 January 1995, Thailand has the right to apply safeguard measures to protect its economy and domestic industries. Thus, subject to the rules of the WTO (Article XIX of GATT 1994 and the Safeguard Agreement), it can use trade remedies to take remedial actions against imported products which could cause present or future serious injury to its national industries or even economy. Examples of such remedies can be divided broadly into the following 3 classifications:
- Anti-dumping actions;
- Countervailing duty measures; and
- Safeguard measures.
The above measures are applied to different but specific situations and circumstances.
Safeguard measures are "emergency" actions which may be applied when imports of specific products cause or threaten serious injury to the importing country's domestic industry.
This measure is applied to imports of a product, irrespective of its source, if the following three basic requirements are met:
1. An absolute or relative increase in import quantities as compared to domestic production of like products.
2. Serious injury or a threat of serious injury to the domestic industry.
3. A causal link between Item 1 and 2.
To determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry, relevant factors such as the rate and amount of the increase in the importation of the product into the domestic market and changes in level of sales, production, capacity and utilisation, profits and losses, employment, etc. will be considered.
There are three methods to apply safeguard measures against offending exporting countries, and these are as follows:
(i) Quantitative restrictions of imported products;
(ii) Imposition of additional tariffs on imported products; and
(iii) Tariff-rate quotas.
The safeguard measures shall only apply for such time as may be deemed necessary. An initial application shall not exceed four years and any extension shall not exceed eight years.
Prior to the Act, safeguard measures were governed by the Ministerial Notifications on Safeguard issued in 1999 and 2005 under the Act regarding Export and Import of Goods into Thailand B.E. 2522 (1979). These Ministerial Regulations are deemed too general and insufficient. The Act was promulgated to supplement these Ministerial Notifications and to strengthen the prescribed safeguard measures therein.
Under the Act, the Ministry of Commerce is authorised to enact rules and procedures to clarify and implement the Act. The Ministry of Commerce is expected to set out two Ministerial Regulations and four Ministerial Notifications in the future.
In the age of trade liberalisation and Free Trade Agreement, trade measures have become a necessity for many countries, including Thailand. Safeguard measures are favoured by business and industry leaders and government officials in Thailand as a means of assisting domestic industries. Safeguard measures provides a reprieve from foreign imports, thus giving domestic industries time to become competitive and to provide much needed employment.
Thailand's exporters and importers stand to benefit from up-to-date knowledge of relevant laws pertaining to cross border transactions such as this Act. This knowledge will prove especially useful when one gets involuntarily entangled in a trade remedies dispute. If Thailand's exporters and importers perceive that their businesses are in danger, and they desire to use this measure to remedy their problems and to protect their business interests, they can submit a request to initiate a safeguard investigation with sufficient supportive information and evidence to the Department of Foreign Trade.