Common use of Imposition of a Safeguard Measure Clause in Contracts

Imposition of a Safeguard Measure. 1. A Party may apply a measure described in paragraph 2, during the transition period only, if as a result of the reduction or elimination of a customs duty pursuant to this Agreement, or as a result of unforeseen developments in conjunction with the existence of a preferential tariff under this Agreement, an originating product is being imported into the Party’s territory in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury, or threat thereof, to a domestic industry producing a like or directly competitive product. 2. If the conditions in paragraph 1 are met, a Party may to the extent necessary to prevent or remedy serious injury, or threat thereof, and facilitate adjustment: (a) suspend the further reduction of any rate of duty provided for under this Agreement on the product; or (b) increase the rate of duty on the product to a level not to exceed the lesser of: (i) the most-favoured-nation applied rate of duty in effect at the time the measure is applied; and (ii) the base tariff rate as provided in the schedule to Annex 2 (Tariff Elimination).2