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) the most-favored-nation (MFN) applied rate of duty on the good in effect at the time the action is taken, and (ii) the MFN applied rate of duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement.