Question

Under U.S. commercial policy, which clause allows the temporary modification of a trade liberalization agreement if serious injury occurs to domestic producers?

a) Emergency provision
b) Flexibility clause
c) Trade adjustment act
d) Domestic safeguard provision

Answer 1

The clause that allows for the temporary modification of a trade agreement when domestic producers suffer serious injury is the domestic safeguard provision, as seen in the 2018 safeguard relief for U.S. manufacturers.

Step-by-step explanation:

Under U.S. commercial policy, the clause that allows for the temporary modification of a trade liberalization agreement if serious injury occurs to domestic producers is the domestic safeguard provision. This provision is designed to protect domestic industries from significant damage due to increased imports. It enables the temporary imposition of measures such as tariffs or quotas to shield domestic producers and give them time to adjust to the competition.

The use of the domestic safeguard provision was exemplified when President Trump, in January 2018, provided safeguard relief to U.S. manufacturers of washing machines and solar products due to surging imports that threatened these industries. This action under Section 201 of the Trade Act of 1974 highlighted the flexibility of trade policies to address domestic economic concerns.