Common use of Application of a Safeguard Measure Clause in Contracts

Application of a Safeguard Measure. If, as a result of the reduction or elimination of a customs duty under this Agreement, an originating good of the other Party is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions that the imports of such originating good from the other Party constitute a substantial cause of serious injury, or threat thereof, to a domestic industry producing a like or directly competitive good, the Party may: (a) suspend the further reduction of any rate of customs duty on the good provided for under this Agreement; or (b) increase the rate of customs duty on the good to a level not to exceed the lesser of: (i) MFN applied rate of duty on the good in effect at the time the measure is applied; and (ii) the base rate as specified in the Schedule to Annex 2-A (Elimination of Customs Duties).