Common use of Application of Safeguard Measures Clause in Contracts

Application of Safeguard Measures. If, as a result of the reduction or elimination of a Customs duty pursuant to this Agreement, an originating product of a Party is being imported into the other Party’s territory in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive products, the other Party may, to the extent necessary to prevent or remedy serious injury and facilitate adjustment, apply a safeguard measure consisting of: (a) the suspension of the further reduction of any rate of Customs duty provided for under this Agreement on the originating product from the date on which the action to apply the safeguard measure is taken; or (b) an increase of the rate of Customs duty on the originating product to a level not to exceed the lesser of: (i) the Most Favoured Nation (“MFN”) applied rate of Customs duty in effect on the date on which the action to apply the safeguard measure is taken; (ii) the MFN applied rate of Customs duty in effect on the day immediately preceding the date of entry into force of this Agreement; or (iii) for a new safeguard measure applied from 2016, the preferential tariff rate in effect under this Agreement on the day three years preceding the date on which the action to apply the safeguard measure is taken.