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Members,
Having
in mind the overall objective of the Members to improve and strengthen
the international trading system based on GATT 1994;
Recognizing
the need to clarify and reinforce the disciplines of GATT 1994, and
specifically those of its Article XIX (Emergency Action on
Imports of Particular Products), to re-establish multilateral control
over safeguards and eliminate measures that escape such control;
Recognizing
the importance of structural adjustment and the need to enhance rather
than limit competition in international markets; and
Recognizing
further that, for these purposes, a comprehensive agreement,
applicable to all Members and based on the basic principles of GATT
1994, is called for;
Hereby agree as follows:
Article
1: General Provision back to top
This Agreement establishes rules for the application of safeguard
measures which shall be understood to mean those measures provided for
in Article XIX of GATT 1994.
1.
A Member(1) may apply a safeguard measure
to a product only if that Member has determined, pursuant to the
provisions set out below, that such product is being imported into its
territory in such increased quantities, absolute or relative to
domestic production, and under such conditions as to cause or threaten
to cause serious injury to the domestic industry that produces like or
directly competitive products.
2.
Safeguard measures shall be applied to a product being imported
irrespective of its source.
Article
3: Investigation back to top
1.
A Member may apply a safeguard measure only following an investigation
by the competent authorities of that Member pursuant to procedures
previously established and made public in consonance with
Article X of GATT 1994. This investigation shall include
reasonable public notice to all interested parties and public hearings
or other appropriate means in which importers, exporters and other
interested parties could present evidence and their views, including
the opportunity to respond to the presentations of other parties and
to submit their views, inter alia, as to whether or not
the application of a safeguard measure would be in the public
interest. The competent authorities shall publish a report setting
forth their findings and reasoned conclusions reached on all pertinent
issues of fact and law.
2.
Any information which is by nature confidential or which is provided
on a confidential basis shall, upon cause being shown, be treated as
such by the competent authorities. Such information shall not be
disclosed without permission of the party submitting it. Parties
providing confidential information may be requested to furnish
non-confidential summaries thereof or, if such parties indicate that
such information cannot be summarized, the reasons why a summary
cannot be provided. However, if the competent authorities find that a
request for confidentiality is not warranted and if the party
concerned is either unwilling to make the information public or to
authorize its disclosure in generalized or summary form, the
authorities may disregard such information unless it can be
demonstrated to their satisfaction from appropriate sources that the
information is correct.
Article
4: Determination of Serious Injury or Threat Thereof back to top
1.
For the purposes of this Agreement:
(a)
“serious injury” shall be understood to mean a significant overall
impairment in the position of a domestic industry;
(b)
“threat of serious injury” shall be understood to mean serious
injury that is clearly imminent, in accordance with the provisions of
paragraph 2. A determination of the existence of a threat of
serious injury shall be based on facts and not merely on allegation,
conjecture or remote possibility; and
(c)
in determining injury or threat thereof, a “domestic industry”
shall be understood to mean the producers as a whole of the like or
directly competitive products operating within the territory of a
Member, or those whose collective output of the like or directly
competitive products constitutes a major proportion of the total
domestic production of those products.
2.
(a) In the
investigation to determine whether increased imports have caused or
are threatening to cause serious injury to a domestic industry under
the terms of this Agreement, the competent authorities shall evaluate
all relevant factors of an objective and quantifiable nature having a
bearing on the situation of that industry, in particular, the rate and
amount of the increase in imports of the product concerned in absolute
and relative terms, the share of the domestic market taken by
increased imports, changes in the level of sales, production,
productivity, capacity utilization, profits and losses, and
employment.
(b) The
determination referred to in subparagraph (a) shall not be made
unless this investigation demonstrates, on the basis of objective
evidence, the existence of the causal link between increased imports
of the product concerned and serious injury or threat thereof. When
factors other than increased imports are causing injury to the
domestic industry at the same time, such injury shall not be
attributed to increased imports.
(c) The
competent authorities shall publish promptly, in accordance with the
provisions of Article 3, a detailed analysis of the case under
investigation as well as a demonstration of the relevance of the
factors examined.
Article
5: Application of Safeguard Measures back to top
1.
A Member shall apply safeguard measures only to the extent necessary
to prevent or remedy serious injury and to facilitate adjustment. If a
quantitative restriction is used, such a measure shall not reduce the
quantity of imports below the level of a recent period which shall be
the average of imports in the last three representative years for
which statistics are available, unless clear justification is given
that a different level is necessary to prevent or remedy serious
injury. Members should choose measures most suitable for the
achievement of these objectives.
2.
(a) In cases in which a
quota is allocated among supplying countries, the Member applying the
restrictions may seek agreement with respect to the allocation of
shares in the quota with all other Members having a substantial
interest in supplying the product concerned. In cases in which this
method is not reasonably practicable, the Member concerned shall allot
to Members having a substantial interest in supplying the product
shares based upon the proportions, supplied by such Members during a
previous representative period, of the total quantity or value of
imports of the product, due account being taken of any special factors
which may have affected or may be affecting the trade in the product.
(b)
A Member may depart from the provisions in subparagraph (a) provided
that consultations under paragraph 3 of Article 12 are
conducted under the auspices of the Committee on Safeguards provided
for in paragraph 1 of Article 13 and that clear
demonstration is provided to the Committee that (i) imports
from certain Members have increased in disproportionate percentage in
relation to the total increase of imports of the product concerned in
the representative period, (ii) the reasons for the departure
from the provisions in subparagraph (a) are justified, and (iii)
the conditions of such departure are equitable to all suppliers of the
product concerned. The duration of any such measure shall not be
extended beyond the initial period under paragraph 1 of
Article 7. The departure referred to above shall not be permitted
in the case of threat of serious injury.
Article
6: Provisional Safeguard Measures back to top
In critical circumstances where delay would cause damage which it
would be difficult to repair, a Member may take a provisional
safeguard measure pursuant to a preliminary determination that there
is clear evidence that increased imports have caused or are
threatening to cause serious injury. The duration of the provisional
measure shall not exceed 200 days, during which period the
pertinent requirements of Articles 2 through 7 and 12 shall be
met. Such measures should take the form of tariff increases to be
promptly refunded if the subsequent investigation referred to in
paragraph 2 of Article 4 does not determine that increased
imports have caused or threatened to cause serious injury to a
domestic industry. The duration of any such provisional measure shall
be counted as a part of the initial period and any extension referred
to in paragraphs 1, 2 and 3 of Article 7.
Article
7: Duration and Review of Safeguard Measures back to top
1.
A Member shall apply safeguard measures only for such period of time
as may be necessary to prevent or remedy serious injury and to
facilitate adjustment. The period shall not exceed four years, unless
it is extended under paragraph 2.
2.
The period mentioned in paragraph 1 may be extended provided that
the competent authorities of the importing Member have determined, in
conformity with the procedures set out in Articles 2, 3, 4
and 5, that the safeguard measure continues to be necessary to
prevent or remedy serious injury and that there is evidence that the
industry is adjusting, and provided that the pertinent provisions of
Articles 8 and 12 are observed.
3.
The total period of application of a safeguard measure including the
period of application of any provisional measure, the period of
initial application and any extension thereof, shall not exceed eight
years.
4.
In order to facilitate adjustment in a situation where the expected
duration of a safeguard measure as notified under the provisions of
paragraph 1 of Article 12 is over one year, the Member
applying the measure shall progressively liberalize it at regular
intervals during the period of application. If the duration of the
measure exceeds three years, the Member applying such a measure shall
review the situation not later than the mid-term of the measure and,
if appropriate, withdraw it or increase the pace of liberalization. A
measure extended under paragraph 2 shall not be more restrictive
than it was at the end of the initial period, and should continue to
be liberalized.
5.
No safeguard measure shall be applied again to the import of a product
which has been subject to such a measure, taken after the date of
entry into force of the WTO Agreement, for a period of time equal
to that during which such measure had been previously applied,
provided that the period of non-application is at least two years.
6.
Notwithstanding the provisions of paragraph 5, a safeguard
measure with a duration of 180 days or less may be applied again
to the import of a product if:
(a)
at least one year has elapsed since the date of introduction of a
safeguard measure on the import of that product; and
(b)
such a safeguard measure has not been applied on the same product more
than twice in the five-year period immediately preceding the date of
introduction of the measure.
Article
8: Level of Concessions and Other Obligations back to top
1.
A Member proposing to apply a safeguard measure or seeking an
extension of a safeguard measure shall endeavour to maintain a
substantially equivalent level of concessions and other obligations to
that existing under GATT 1994 between it and the exporting Members
which would be affected by such a measure, in accordance with the
provisions of paragraph 3 of Article 12. To achieve this
objective, the Members concerned may agree on any adequate means of
trade compensation for the adverse effects of the measure on their
trade.
2.
If no agreement is reached within 30 days in the consultations
under paragraph 3 of Article 12, then the affected exporting
Members shall be free, not later than 90 days after the measure
is applied, to suspend, upon the expiration of 30 days from the
day on which written notice of such suspension is received by the
Council for Trade in Goods, the application of substantially
equivalent concessions or other obligations under GATT 1994, to the
trade of the Member applying the safeguard measure, the suspension of
which the Council for Trade in Goods does not disapprove.
3.
The right of suspension referred to in paragraph 2 shall not be
exercised for the first three years that a safeguard measure is in
effect, provided that the safeguard measure has been taken as a result
of an absolute increase in imports and that such a measure conforms to
the provisions of this Agreement.
Article
9: Developing Country Members back to top
1.
Safeguard measures shall not be applied against a product originating
in a developing country Member as long as its share of imports of the
product concerned in the importing Member does not exceed
3 per cent, provided that developing country Members with
less than 3 per cent import share collectively account for
not more than 9 per cent of total imports of the product
concerned.(2)
2.
A developing country Member shall have the right to extend the period
of application of a safeguard measure for a period of up to two years
beyond the maximum period provided for in paragraph 3 of
Article 7. Notwithstanding the provisions of paragraph 5 of
Article 7, a developing country Member shall have the right to
apply a safeguard measure again to the import of a product which has
been subject to such a measure, taken after the date of entry into
force of the WTO Agreement, after a period of time equal to half
that during which such a measure has been previously applied, provided
that the period of non-application is at least two years.
Article
10: Pre-existing Article XIX Measures back to top
Members shall terminate all safeguard measures taken pursuant to
Article XIX of GATT 1947 that were in existence on the date
of entry into force of the WTO Agreement not later than eight
years after the date on which they were first applied or five years
after the date of entry into force of the WTO Agreement,
whichever comes later.
Article
11: Prohibition and Elimination of Certain Measures back to top
1.
(a) A Member shall not take
or seek any emergency action on imports of particular products as set
forth in Article XIX of GATT 1994 unless such action conforms
with the provisions of that Article applied in accordance with
this Agreement.
(b)
Furthermore, a Member shall not seek, take or maintain any voluntary
export restraints, orderly marketing arrangements or any other similar
measures on the export or the import side.(3),(4)
These include actions taken by a single Member as well as actions
under agreements, arrangements and understandings entered into by two
or more Members. Any such measure in effect on the date of entry into
force of the WTO Agreement shall be brought into conformity with
this Agreement or phased out in accordance with paragraph 2.
(c)
This Agreement does not apply to measures sought, taken or maintained
by a Member pursuant to provisions of GATT 1994 other than
Article XIX, and Multilateral Trade Agreements in Annex 1A
other than this Agreement, or pursuant to protocols and agreements or
arrangements concluded within the framework of GATT 1994.
2.
The phasing out of measures referred to in paragraph 1(b) shall
be carried out according to timetables to be presented to the
Committee on Safeguards by the Members concerned not later than
180 days after the date of entry into force of the WTO Agreement.
These timetables shall provide for all measures referred to in
paragraph 1 to be phased out or brought into conformity with this
Agreement within a period not exceeding four years after the date of
entry into force of the WTO Agreement, subject to not more than
one specific measure per importing Member,(5)
the duration of which shall not extend beyond 31 December 1999.
Any such exception must be mutually agreed between the Members
directly concerned and notified to the Committee on Safeguards for its
review and acceptance within 90 days of the entry into force of
the WTO Agreement. The Annex to this Agreement indicates a
measure which has been agreed as falling under this exception.
3.
Members shall not encourage or support the adoption or maintenance by
public and private enterprises of non-governmental measures equivalent
to those referred to in paragraph 1.
Article
12: Notification and Consultation back to top
1.
A Member shall immediately notify the Committee on Safeguards upon:
(a)
initiating an investigatory process relating to serious injury or
threat thereof and the reasons for it;
(b)
making a finding of serious injury or threat thereof caused by
increased imports; and
(c)
taking a decision to apply or extend a safeguard measure.
2.
In making the notifications referred to in paragraphs 1(b)
and 1(c), the Member proposing to apply or extend a safeguard
measure shall provide the Committee on Safeguards with all pertinent
information, which shall include evidence of serious injury or threat
thereof caused by increased imports, precise description of the
product involved and the proposed measure, proposed date of
introduction, expected duration and timetable for progressive
liberalization. In the case of an extension of a measure, evidence
that the industry concerned is adjusting shall also be provided. The
Council for Trade in Goods or the Committee on Safeguards may request
such additional information as they may consider necessary from the
Member proposing to apply or extend the measure.
3.
A Member proposing to apply or extend a safeguard measure shall
provide adequate opportunity for prior consultations with those
Members having a substantial interest as exporters of the product
concerned, with a view to, inter alia, reviewing the
information provided under paragraph 2, exchanging views on the
measure and reaching an understanding on ways to achieve the objective
set out in paragraph 1 of Article 8.
4.
A Member shall make a notification to the Committee on Safeguards
before taking a provisional safeguard measure referred to in
Article 6. Consultations shall be initiated immediately after the
measure is taken.
5.
The results of the consultations referred to in this Article, as well
as the results of mid-term reviews referred to in paragraph 4 of
Article 7, any form of compensation referred to in
paragraph 1 of Article 8, and proposed suspensions of concessions
and other obligations referred to in paragraph 2 of
Article 8, shall be notified immediately to the Council for Trade
in Goods by the Members concerned.
6.
Members shall notify promptly the Committee on Safeguards of their
laws, regulations and administrative procedures relating to safeguard
measures as well as any modifications made to them.
7.
Members maintaining measures described in Article 10 and
paragraph 1 of Article 11 which exist on the date of entry
into force of the WTO Agreement shall notify such measures to the
Committee on Safeguards not later than 60 days after the date of
entry into force of the WTO Agreement.
8.
Any Member may notify the Committee on Safeguards of all laws,
regulations, administrative procedures and any measures or actions
dealt with in this Agreement that have not been notified by other
Members that are required by this Agreement to make such
notifications.
9.
Any Member may notify the Committee on Safeguards of any
non-governmental measures referred to in paragraph 3 of
Article 11.
10.
All notifications to the Council for Trade in Goods referred to in
this Agreement shall normally be made through the Committee on
Safeguards.
11.
The provisions on notification in this Agreement shall not require any
Member to disclose confidential information the disclosure of which
would impede law enforcement or otherwise be contrary to the public
interest or would prejudice the legitimate commercial interests of
particular enterprises, public or private.
Article
13: Surveillance back to top
1.
A Committee on Safeguards is hereby established, under the authority
of the Council for Trade in Goods, which shall be open to the
participation of any Member indicating its wish to serve on it. The
Committee will have the following functions:
(a)
to monitor, and report annually to the Council for Trade in Goods on,
the general implementation of this Agreement and make recommendations
towards its improvement;
(b)
to find, upon request of an affected Member, whether or not the
procedural requirements of this Agreement have been complied with in
connection with a safeguard measure, and report its findings to the
Council for Trade in Goods;
(c)
to assist Members, if they so request, in their consultations under
the provisions of this Agreement;
(d)
to examine measures covered by Article 10 and paragraph 1 of
Article 11, monitor the phase-out of such measures and report as
appropriate to the Council for Trade in Goods;
(e)
to review, at the request of the Member taking a safeguard measure,
whether proposals to suspend concessions or other obligations are “substantially
equivalent”, and report as appropriate to the Council for Trade in
Goods;
(f)
to receive and review all notifications provided for in this Agreement
and report as appropriate to the Council for Trade in Goods; and
(g)
to perform any other function connected with this Agreement that the
Council for Trade in Goods may determine.
2.
To assist the Committee in carrying out its surveillance function, the
Secretariat shall prepare annually a factual report on the operation
of this Agreement based on notifications and other reliable
information available to it.
Article 14: Dispute Settlement back to top
The provisions of Articles XXII and XXIII of GATT 1994 as
elaborated and applied by the Dispute Settlement Understanding shall
apply to consultations and the settlement of disputes arising under
this Agreement.
Annex:
Exception Referred to in Paragraph 2 of Article 11 back to top
| Members concerned |
Product |
Termination |
EC/Japan |
Passenger cars, off road vehicles, light commercial vehicles, light trucks (up to 5 tonnes), and the same vehicles in wholly knocked-down form (CKD sets). |
31 December 1999 |
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