Common use of Transitional Safeguard Measures Clause in Contracts

Transitional Safeguard Measures. 1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any product originating in a Party is being imported into the territory of another Party 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 the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take transitional safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to paragraphs 2 to 9. 2. Transitional safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in the WTO Agreement on Safeguards. 3. If the conditions set out in paragraph 1 are met, the importing Party may take measures consisting in increasing the rate of customs duty for the product to a level not to exceed the lesser of: (a) the MFN rate of duty applied at the time the transitional safeguard measure is taken; or (b) the MFN rate of duty applied on the day immediately preceding the date of the entry into force of this Agreement. 4. Transitional safeguard measures shall be taken for a period not exceeding one year. In very exceptional circumstances, the importing Party may extend the measures up to a total maximum period of three years. The exporting Parties that are affected by the extended transitional safeguard measure shall be offered compensation in the form of substantially equivalent trade liberalisation. No transitional safeguard measures shall be applied to the import of a product, which has previously been subject to such a measure. 5. The Party intending to take or extend a transitional safeguard measure under this Article shall immediately, and in any case before taking or extending a measure, notify the other Parties. The notification shall contain all pertinent information, including evidence of serious injury or threat thereof caused by increased imports, a precise description of the product concerned, and the proposed measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the measure. In case of extension of the measure pursuant to paragraph 4, the notification shall also specify the intended compensation. 6. The Joint Committee shall, within 30 days from the receipt of the notification, examine the information provided under paragraph 5 in order to facilitate a mutually acceptable solution. In the absence of such solution, the importing Party may adopt or extend a transitional safeguard measure pursuant to paragraph 3 to remedy the problem. In the absence of mutually agreed compensation pursuant to paragraph 4, the Party against whose product the transitional safeguard measure is taken may take compensatory action. The transitional safeguard measure and the compensatory action shall be immediately notified to the other Parties. In the selection of the transitional safeguard measure and the compensatory action, priority must be given to the action or measure which least disturbs the functioning of this Agreement. The Party taking compensatory action shall apply the action only for the minimum period necessary to achieve the substantially equivalent trade effects and in any event, only during the extension of the transitional safeguard measure. 7. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may take a provisional transitional safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. The Party intending to take such a measure shall immediately notify the other Parties thereof. Within 30 days from the receipt of the notification, the procedures set out in this Article shall be initiated. 8. Any provisional transitional safeguard measure shall be terminated within 200 days at the latest. The period of application of any such provisional transitional safeguard measure shall be counted as part of the duration, and any extension thereof, of the transitional safeguard measure, set out in paragraphs 3 and 4 respectively. Any tariff increases shall be promptly refunded if the investigation described in paragraph 2 does not result in a finding that the conditions of paragraph 1 are met. 9. A transitional safeguard measure may be applied no later than five years from the entry into force of this Agreement.