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FTAA - Free Trade Area of the Americas Draft Agreement Chapter XIV Safeguard Measures CHAPTER XIV Safeguard Measures 1.1. The following definitions shall apply: Agreement on Safeguards means the Agreement on Safeguards, which forms part of the Agreement Establishing the World Trade Organization (WTO); Competent authority means the authority of a Party listed in Annex XX, or those who succeed them; [Critical circumstances means those circumstances in which a delay in the application of the safeguard measure could cause injury difficult to repair;] [Directly competitive good means that which, while not [necessarily] similar to the one that it is compared with, is essentially equivalent for purposes of trade being put to the same use and being interchangeable with the latter. [To establish whether a good is directly competitive, the competent authority shall also consider whether the good makes use of the same distribution channels, is sold in the same market, and is purchased by a similar group of consumers;]] Domestic industry means the producers as a whole of the similar or directly competitive goods operating within the territory of a Party, [or those whose collective output of the like or directly competitive goods constitutes a major proportion of the total domestic production of those goods]; GATT 1994 means the General Agreement on Tariffs and Trade of 1994, which forms part of the Agreement Establishing the World Trade Organization; [Interested [parties] [party] means the petitioner; other [domestic] producers; commercial, trade or business associations in which the majority of the members are producers of the good under investigation; foreign producers; exporters; importers; governments of the exporting or producing Parties [; and consumers or associations representing them];] [Like good means [includes an identical good and] one that, although not the same in all aspects, has similar features and composition, which enables it to perform the same functions and to be commercially interchangeable with the good it is compared with;] [Safeguard measure means [all measures applied in accordance with the provisions of this Chapter. This does not include any safeguard measure derived from a procedure initiated before this Agreement entered into force.] [a hemispheric safeguard measure described in Article 4.2.;]] Serious injury means a significant overall impairment of the situation of a domestic industry; [Substantial cause means a cause which is important and not less than any other cause;] [Substantial supplier means any Party that for the three years preceding an investigation described in Article 6 (Investigation Procedures and Transparency Requirements) was, on average, the territory of origin of at least ten percent (10%), by value, of imports from the Party of the good subject to a safeguard measure;] Threat of serious injury means [the clear imminence of serious injury, determined on the basis of facts and not merely on allegations, conjectures, or remote possibilities.] [serious injury that is clearly imminent. Such a determination shall be made on the basis of facts and not merely on allegation, conjecture, or remote possibility]; and [Transition period means [the ten (10) year period beginning on the date of entry into force of this Agreement.] [the period during which a Party may adopt and maintain safeguard measure that shall cover, for each good, (...)][the period of tariff elimination applicable to each good under this Agreement.]] Section B Substantive Provisions Subsection B.1 [FTAA Safeguards] Article 2. Scope of Application 2.1. A Party may, on the terms set forth in this Chapter, apply an [FTAA]1 safeguard measure, on imports of goods benefiting from the Tariff Elimination Program under this Agreement, [at any time that this Agreement is in force] [only during the transition period.2] [Such a measure [shall] [may] be applied to all imports of such goods originating in the territories of the Parties.] [2.2. A customs union [, notwithstanding the provision set forth in Article 2.1.,] may apply safeguard measures as a single entity or on behalf of one of the State Parties:
[2.3. A Party may [not] [adopt or] maintain an [FTAA] safeguard measure subsequent to the termination of the transition period, provided that the purpose is to deal with cases of serious injury or threat thereof that might arise [derived from a tariff decrease] due to the implementation of this Agreement [and only when the exporting Party expressly authorizes it].] [2.4. Safeguard measures shall not be applied to a good [originating] in a Party when that Party’s share of total imports of the good in question [into the Party taking the measure] does not exceed [...] [five (5)] or [...] percent [on the last twelve (12) months previous to the presentation of the request for which information is available]3 [on the last twelve (12) months of the period analyzed for purposes of determining the existence of serious injury] in the case of [smaller economies and/or economies in different levels of development] [smaller economies].] 2.5. A Party shall not apply an [FTAA] safeguard measure and a global safeguard measure simultaneously on a similar or direct competitive good. Article 3. Conditions for Application 3.1. [A Party may only apply, following an investigation, a safeguard measure to the imports of a good that benefits from the Tariff Elimination Program established in this Agreement, when [as a result of the tariff preferences granted] [under this Agreement] the imports under the preferential tariffs for this good have increased in such an amount, in absolute terms [and] [or] in relation to [the totality of the] [domestic] production [or with the domestic consumption], [and] [or] under conditions such as to [alone][constitute a substantial cause] cause [of] serious injury or threat thereof to the domestic industry producing like or directly competitive goods].] [In determining whether imports have increased, a Party shall cumulatively consider imports from the territories of all other Parties to this Agreement.] [that has determined that they individually represent a substantial share of total imports and that they significantly contribute to the injury caused to the domestic production.] 3.2. A Party shall apply safeguard measures, following an investigation, only to the extent necessary to prevent or remedy serious injury and to facilitate the adjustment of the domestic industry affected. [3.3. Before applying a [definitive] safeguard measure, each Party [shall examine and determine the feasibility of the] [adjustment plan] [presented by the domestic industry]. The Party that applies the measure shall provide the other Parties with a non-confidential summary of the plan.] [3.4. Any decision to adopt provisional or definitive safeguard measures shall not affect imports of goods shipped on or before the date in which that decision was issued.] Article 4. Nature of the Measures 4.1. The safeguard measures shall [only] consist of tariff measures [or may consist of quantitative restrictions]. [Neither tariff rate quotas nor quantitative restrictions shall be a permissible form of safeguard measure.] 4.2. Tariff measures shall consist of:
[4.3. [When the safeguard measure consists of a quantitative restriction] [The preference applicable] [that corresponds to the good according to the Tariff Elimination Program established in this Agreement] at the time the safeguard measure is applied [it] shall remain in place for a certain volume of imports, which shall be defined as the average of imports made over the last [...] [three (3)] immediate representative years [for which statistics are available, unless there is clear justification] [[preceding] the period during which it was determined that there was serious injury or threat thereof, unless [the Parties involved agree that there exists]] [of] the need to set a different [level] [quota] [is justified] so as to prevent or remedy serious injury.] [4.4. On the termination of an [FTAA] safeguard measure, the rate of duty shall be no higher than the rate that, according to the Tariff Elimination Program of this Agreement, would have been in effect [on that date] [one (1) year after the initiation of the measure. Beginning on January 1 of the year following the termination of the measure, the Party that has applied the measure shall, at its option:
Article 5. Period of Application of the Measures [5.1. [Except in certain fully justified circumstances] Safeguard measures may not be applied before [the preference has been in force for] one (1) year [from the beginning of the tariff elimination established in this Agreement, for the good subject to the measure].] 5.2. Safeguard measures may be applied for a maximum period of [...] [one (1)] [three (3)] [four (4)][year[s]] [[and] [or] (…) 4 for the smaller economies [and/or economies in different levels of development]] which shall include [in both cases] any period in which provisional measures had been in force. [[In order to facilitate adjustment in a situation where] [Where] the expected duration of an [FTAA] safeguard measure is over one (1) year, the Party applying the measure shall progressively liberalize it at regular intervals during the period of application of the safeguard.] [If the duration of the measure exceeds (...) years, the Party 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.][5.3. Safeguard measures may be extended for a period of [...] [one (1) year], [once only] [and […]5 [four (4) additional years] for the smaller economies and/or economies in different levels of development], [if its application period has not exceeded three (3) years] when it has been determined that, in accordance with the procedures set out in [the first part of] this Chapter, it continues to be necessary to prevent or remedy serious injury, and that there is evidence that the domestic industry [is adjusting] [has completed the adjustment program].] [Extended measures shall not be more restrictive than the original measures]. [5.4. Any safeguard measure shall enter into effect no later than one (1) year after the date on which the procedures are initiated.] 5.5. [A Party may [not] apply a safeguard measure against the same good more than once during the transition period.] [Safeguard measures may be applied to the importation of a good that has been subject to such a measure, provided that a period equal to that of the previously imposed measure has elapsed.] Subsection B.2 [Procedures and Common Provisions6] [Article 6. Investigation Procedures and Transparency Requirements] [6.1. Each Party shall designate a competent authority to conduct investigations and determine whether increased imports [are] [alone] [a] [substantial] [cause] [of] serious injury or threat thereof. The competent authority shall evaluate, on the basis of objective evidence, all relevant factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry affected, in particular:
[6.2. A Party will apply a safeguard measure only if [it has been shown based on objective evidence the existence of a causal relationship between the increase of the imports and serious injury or threat thereof.] [increased imports of the goods originating in the territories of the Parties are [alone] a substantial cause of serious injury or threat of serious injury].] [If there are [known] factors other than the increased imports of the goods that simultaneously injure or threaten to injure a domestic industry, the injury may not be attributed to imports made under preferential tariffs.] [6.3. The petition to initiate an investigation shall provide a description of the imported good concerned [and such information with respect to each of the factors as is reasonably available to the petitioner.][, information on the petitioner and his/her representation, data on imports, data on domestic output, data demonstrating injury or threat of injury, and cause of the injury or threat of injury [and an adjustment plan proposal].] [6.3. The petition to initiate an investigation shall include the following data:
6.4. A Party may initiate an investigation on [its own motion or on] the basis of a petition filed by [or in representation of] a domestic industry of a like or directly competitive good. [The petition shall be considered to have been made by the domestic industry or on behalf of the industry when it is supported by domestic producers whose combined production represents more than […] [fifty (50)] percent of the total production of the like or directly competitive good.] [A public version of any petition, with any confidential information deleted or summarized in accordance with Article XX of this Chapter, shall promptly be made available for public inspection upon being filed.] [6.5. Each Party shall ensure the consistent, impartial and reasonable administration of its laws, regulations, decisions, and rulings governing all proceedings under this Chapter.] 6.6. During the course of the investigation, the competent authority shall:
[6.7. The Parties shall reform their domestic legislation on safeguards with a view to providing for the following mechanisms:
[6.8. Within (…) days after concluding the investigation, the competent authority shall publish a report that sets out its findings and reasoned conclusions on all the pertinent issues of law and fact. Such report shall be notified to the other affected Parties promptly.] [The statement of reasons shall provide a description of the imported good concerned, the standard applied, and the findings made, including the public information supporting a finding that each of the requirements for imposing an [FTAA] safeguard measure pursuant to Article XX is met.] [6.9. The importing Party shall publish in its official journal:
[The information published in the notice shall contain a summary of the criteria that served as the basis for the corresponding ruling.] 6.10. The Parties shall provide that the decisions of the competent authorities issued in accordance with the stipulations of this Chapter are subject to judicial [or administrative] review, as laid down in their domestic legislation. [Negative rulings on the existence of serious injury or threat thereof may not be modified by the competent authority on its own motion.] [6.11. The period for the investigation shall not be longer than one (1) year after the date on which the procedures are initiated.] [Except in special circumstances, investigations shall be concluded within ninety (90) days after their initiation, and in any case, after one hundred eighty (180) days after their initiation.] [Article 7. Notification and Consultations] [7.1. [The importing Party shall give prompt written notification [to the other Parties] of [its intention to initiate] [the initiation of] a safeguard investigation [under Article XX]. The notification shall [include] [be made in writing by the competent authority [in a period of (…)] [the day following] [[after] [as of] publication] [as of the initiation of the investigation]. It shall contain [the main features of the facts under investigation, such as] [sufficient background information to support the [application of the measures] [opening of the investigation], including to the extent that such information is available at the time of the initiation of the investigation]]:
[7.2. The [ruling by which a decision is made to adopt or extend] [determination to apply] a safeguard measure shall be published [as applicable] and the other [Party] [Parties] shall be notified within a period of (…). The [ruling] [notification] shall contain [the publicly available findings of the investigation and the reasoned conclusions regarding all the pertinent questions of fact and law, including a description of]:
[7.3. The notification of application of a provisional safeguard measure should contain the main characteristics of the non-confidential facts, including evidence that generated the need of the provisional safeguard and the precise description of the good subject to this measure.] [7.4. A Party may not [adopt definitive measures] [apply or extend a safeguard measure under this Chapter] without having afforded an opportunity for consultations, the objective of which shall be a mutual knowledge of the public facts, the exchange of opinions, and reach a mutually satisfactory solution. The time period for such consultations shall be (...).] [7.5. The notification of extension of a safeguard measure shall be made at least (…) days prior to the scheduled expiration date of the measure.] [Article 8. Provisional Safeguards] [8.1. In critical circumstances where delay would cause damage to the domestic industry producing a like or directly competitive good which it would be difficult to repair, a Party may apply a provisional safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports [[and][or] the conditions under which these imports are made] are a result of the reduction or elimination of a duty pursuant to the Tariff Elimination Program of this Agreement and are causing or threatening to cause serious injury.] [8.2. A provisional safeguard measure may only be applied after a period of (…) has elapsed from the [initiation of the investigation] [receipt of the request from the petitioner.]] [8.3. The duration of a provisional safeguard measure shall not exceed […] [two hundred (200) days] [and shall adopt one of the forms provided for in Article 4.2.].] [8.4. If the subsequent investigation shows that the increase in imports under preferential tariffs or the conditions of those imports [have not caused or threatened to cause serious injury] [are not a substantial cause of serious injury or threat thereof] to the domestic industry in question, the investigation shall be closed and the amount received under the temporary measures [including interests] shall be reimbursed promptly or, when such is the case, the bond posted for the purpose shall be released.] [8.5. The Parties shall not apply provisional safeguard measures to goods from smaller economies.] [Article 9. Rights of the Affected Parties] [9.1. A Party applying a safeguard measure shall, following consultation with Parties that are substantial suppliers of the good concerned, provide to such substantial suppliers mutually agreed trade liberalizing compensation in the form of:
9.2. [Consultations shall begin within thirty (30) days of the imposition of the measure. If no agreement is reached within thirty (30) days after these consultations commence, any Party that is a substantial supplier shall be free to suspend the application of substantially equivalent concessions to the trade of the Party applying the safeguard measure.] [9.3. If the Parties are unable to agree on a satisfactory solution, the affected Party or Parties may adopt tariff measures having substantially equivalent trade effects to the measure applied.] [9.4. The obligation to provide compensation and the right of suspension of substantially equivalent concessions shall terminate upon the later of: a) the termination of the safeguard measure, or b) if the Party applying the safeguard measure terminates such measure in accordance with Article XX, the date on which the rate of duty returns to the rate of duty set out in the Tariff Elimination Program.] [9.5. Parties with small economies shall not undertake any obligation under this Chapter to provide compensation as a result of the imposition of a safeguard measure.] [Article 10. Safeguards for Specific Sectors] 11.1. Each Party preserves its rights and obligations pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards. [This Agreement does not confer any additional rights or obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards.] [11.2. The Party that decides to adopt a global safeguard measure may only apply it to the imports of another Party when it determines that said imports, taken individually, represent a substantial share of the total imports and contributes significantly to the serious injury or to the threat of serious injury.] [11.3. In order to make this determination, the following criteria shall be observed:
[11.4. The Party applying the measures and that has initially excluded another Party's good from it shall be entitled to include determines that an increase in the imports of said good from the excluded Party causes or threatens to cause serious injury and as a result reduces the effectiveness of the measure.] Section C Procedures and Institutions [Article 12. Dispute Settlement for matters related to safeguard measures] [12.1. No Party may request the establishment of an arbitral group, pursuant to the provisions in the Chapter on Dispute Settlement, with regard to safeguard measures that have merely been proposed.]
Chapter XIV 1 [The definition of FTAA safeguard is pending.] 2 [The definition of transition period is pending.] 3 [The amount of percentages to be differentiated and their levels, as well as countries benefiting from this treatment, will be determined in the course of the negotiating process, taking into account the differences in the levels of development and sizes of the economies of the Hemisphere, including those of the smaller economies.] 4 The differentiated period would be determined in the course of the negotiations, taking into account the differences in the levels of development and sizes of the economies of the Hemisphere, including those of the smaller economies. 5 [The differentiated period would be determined in the course of the negotiations, taking into account the differences in the levels of development and sizes of the economies of the Hemisphere, including those of the smaller economies.] 6 [The NGMA has not yet defined whether disciplines under this Subsection B.2 [Procedures and Common Provisions] will apply only to FTAA safeguard measures or also to global safeguards.] |
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