ABSTRACT
Commencing in 1971, the long awaited Generalized System of Preferences was introduced by a number of industrial nations including Australia, Austria, Canada, the European Community, Finland, Japan, New Zealand, Norway, Sweden, Switzerland, and the United States. In addition to the restricted product coverage, the developed countries included a safeguard system to protect themselves against a potential flood of imports from the developing countries. In addition to the restricted product coverage, the developed countries included a safeguard system to protect themselves against a potential flood of imports from the developing countries. The basic formula for calculating the ceilings—base year imports from the beneficiaries plus a growth factor related to the level of imports from third countries—seems reasonable. In order to safeguard injured sectors without unduly limiting preferential trade, a more flexible safeguard based on a causal tie between injury and increased preferential trade is needed.
