Safeguard is one of the component that exists in international organization, specially on the oganization who is dealing with trade, commerce, investment, finance and etc. The definition of safeguard it self is a If we are talking about the safeguard clauses that regulates in World Trade Organization. this clause can be found since the GATT, in article 19,The duration of a measure may not exceed four years but the country can extended up to eight years.
The developing countries Members receive special and differential treatment with respect to other Members' safeguard measures, and with respect to applying their own such measures. A safeguard measure shall not be applied to low volume imports from developing countries Members, that is where a single developing country Member's products account for no more than 3 percent of the total subject imports, as long as products originating in those low-import-share developing country Members collectively do not exceed 9 percent of imports.
In applying safeguard measures, developing country Members may extend the application of a safeguard measure for an extra two years beyond that normally permitted. In addition, the rules for re-applying safeguard measures with respect to a given product are relaxed for developing country Members.
It is also important to distinct or understand the difference between safeguard, dumpling, subsidies and countervail measures.
1. dumpling is the action taken by foreign investor or company that sale their product more cheaper in the certain imports countries in comparison to the other countries or in their own country. the purpose of the dumpling mostly is to killed the rival or to undertake the market in the certain countries,
2. subsidies and countervail measures, means a donor or financial contribution, eliminate some fiscal, or give privilege by the government or public body for the local industries, it can be for domestic market or for export industry as well. for recuperate the state can charge extra tax which is call countervail duty.
In order to asking for safeguard, doesn't need the prove of unfairness business activity nevertheless based on the economic of the member states, in another side, subsidies and dumpling, should be prove of illness activities, in order to prove that. in case of dumpling, usually requires difference price, the sale price is much cheaper around 20% etc. in the case of subsidies, based on article 3 of the Agreement on Subsidies and Countervailing Measures, except as it regulated in the agreement on agriculture, subsidies are prohibited.
As it state above, the world trade organization regulates protection for unfairness activities that may occurred, but some states members are preferring to resolve the problem by direct or bilateral negotiation with other states or the states which cause the harm. This have been a practice for some time between the member of world trade organization. although this does not cover in any WTO agreement, to make it clear, WTO now prohibits the bilateral or direct approaches and the states members are forced to using the measures that available or regulate in the WTO body. as states in the WTO website "The agreement says members must not seek, take or maintain any voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side. The bilateral measures that were not modified to conform with the agreement were phased out at the end of 1998. Countries were allowed to keep one of these measures an extra year (until the end of 1999), but only the European Union — for restrictions on imports of cars from Japan — made use of this provision."
In my opinion, the prohibition of grey area is a wise decision, as regard of WTO as a place for resolving problem between the members, in addition for implementation of the agreements that bind the members states and also to protect the developing countries from any disadvantages negotiation that may rise.