Page273
AGREEMENT ONSAFEGUARDS
Members,
Having inmindtheoverall objective oftheMembers toimprove andstrengthen theinternational
trading system based onGATT 1994;
Recognizing theneedtoclarify andreinforce thedisciplines ofGATT 1994, andspecifically
thoseofitsArticleXIX(EmergencyActiononImportsofParticularProducts),tore-establishmultilateral
control oversafeguards andeliminate measures thatescape suchcontrol;
Recognizing theimportance ofstructural adjustment andtheneedtoenhance rather thanlimit
competition ininternational markets; and
Recognizing further that,forthese purposes, acomprehensive agreement, applicable toall
Members andbased onthebasic principles ofGATT 1994, iscalled for;
Hereby agree asfollows:
Article 1
General Provision
ThisAgreement establishes rules fortheapplication ofsafeguard measures which shallbe
understood tomean those measures provided forinArticle XIXofGATT 1994.
Article 2
Conditions
1. AMember1mayapply asafeguard measure toaproduct onlyifthatMember hasdetermined,
pursuant totheprovisions setoutbelow, thatsuchproduct isbeing imported intoitsterritory insuch
increased quantities, absolute orrelative todomestic production, andunder suchconditions astocause
orthreaten tocause serious injury tothedomestic industry thatproduces likeordirectly competitive
products.
2. Safeguard measures shallbeapplied toaproduct being imported irrespective ofitssource.
1Acustoms union mayapply asafeguard measure asasingle unitoronbehalf ofamember State. When acustoms
union applies asafeguard measure asasingle unit,alltherequirements forthedetermination ofserious injury orthreat thereof
under thisAgreement shallbebased ontheconditions existing inthecustoms union asawhole. When asafeguard measure
isapplied onbehalf ofamember State, alltherequirements forthedetermination ofserious injury orthreat thereof shall
bebased ontheconditions existing inthatmember State andthemeasure shall belimited tothatmember State. Nothing
inthisAgreement prejudges theinterpretation oftherelationship between Article XIXandparagraph 8ofArticle XXIV
ofGATT 1994.Page274
Article 3
Investigation
1. AMember mayapply asafeguard measure onlyfollowing aninvestigation bythecompetent
authorities ofthatMember pursuant toprocedures previously established andmade public inconsonance
withArticle XofGATT 1994. Thisinvestigation shallinclude reasonable public notice toallinterested
parties andpublic hearings orotherappropriate means inwhich importers, exporters andotherinterested
parties could present evidence andtheirviews, including theopportunity torespond tothepresentations
ofother parties andtosubmit theirviews, interalia,astowhether ornottheapplication ofasafeguard
measure would beinthepublic interest. Thecompetent authorities shallpublish areport setting forth
theirfindings andreasoned conclusions reached onallpertinent issues offactandlaw.
2. Anyinformation which isbynature confidential orwhich isprovided onaconfidential basis
shall, uponcause being shown, betreated assuchbythecompetent authorities. Suchinformation shall
notbedisclosed without permission ofthepartysubmitting it.Parties providing confidential information
mayberequested tofurnish non-confidential summaries thereof or,ifsuchparties indicate thatsuch
information cannot besummarized, thereasons whyasummary cannot beprovided. However, ifthe
competent authorities findthatarequest forconfidentiality isnotwarranted andiftheparty concerned
iseitherunwillingtomaketheinformationpublicortoauthorizeitsdisclosureingeneralizedorsummary
form, theauthorities maydisregard suchinformation unless itcanbedemonstrated totheirsatisfaction
from appropriate sources thattheinformation iscorrect.
Article 4
Determination ofSerious Injury orThreat Thereof
1. Forthepurposes ofthisAgreement:
(a) "serious injury" shallbeunderstood tomean asignificant overall impairment inthe
position ofadomestic industry;
(b) "threat ofserious injury" shallbeunderstood tomean serious injury thatisclearly
imminent, inaccordance withtheprovisions ofparagraph 2.Adetermination ofthe
existence ofathreat ofserious injury shall bebased onfacts andnotmerely on
allegation, conjecture orremote possibility; and
(c) indetermining injury orthreat thereof, a"domestic industry" shallbeunderstood to
mean theproducers asawhole ofthelikeordirectly competitive products operating
within theterritory ofaMember, orthose whose collective output ofthelikeordirectly
competitive products constitutes amajor proportion ofthetotaldomestic production
ofthose products.
2. (a) Intheinvestigation todetermine whether increased imports have caused orare
threatening tocause serious injury toadomestic industry under theterms ofthisAgreement, the
competent authorities shallevaluate allrelevant factors ofanobjective andquantifiable nature having
abearing onthesituation ofthatindustry, inparticular, therateandamount oftheincrease inimports
oftheproduct concerned inabsolute andrelative terms, theshare ofthedomestic market taken by
increased imports, changes inthelevelofsales, production, productivity, capacity utilization, profits
andlosses, andemployment.Page275
(b) Thedetermination referred toinsubparagraph (a)shall notbemade unless this
investigation demonstrates, onthebasisofobjective evidence, theexistence ofthecausal linkbetween
increased imports oftheproduct concerned andserious injury orthreat thereof. When factors other
thanincreased imports arecausing injury tothedomestic industry atthesame time, suchinjury shall
notbeattributed toincreased imports.
(c) Thecompetent authorities shallpublish promptly, inaccordance withtheprovisions
ofArticle 3,adetailed analysis ofthecaseunder investigation aswellasademonstration oftherelevance
ofthefactors examined.
Article 5
Application ofSafeguard Measures
1. AMember shallapply safeguard measures onlytotheextent necessary toprevent orremedy
serious injury andtofacilitate adjustment. Ifaquantitative restriction isused, suchameasure shall
notreduce thequantity ofimports below thelevel ofarecent period which shallbetheaverage of
imports inthelastthreerepresentative years forwhich statistics areavailable, unless clearjustification
isgiven thatadifferent levelisnecessary toprevent orremedy serious injury. Members should choose
measures most suitable fortheachievement ofthese objectives.
2. (a) Incasesinwhich aquota isallocated among supplying countries, theMember applying
therestrictions mayseekagreement withrespect totheallocation ofshares inthequota withallother
Members having asubstantial interest insupplying theproduct concerned. Incasesinwhich thismethod
isnotreasonably practicable, theMember concerned shallallottoMembers having asubstantial interest
insupplying theproduct shares based upontheproportions, supplied bysuchMembers during aprevious
representative period, ofthetotalquantity orvalue ofimports oftheproduct, dueaccount being taken
ofanyspecial factors which mayhaveaffected ormaybeaffecting thetrade intheproduct.
(b) AMembermaydepartfromtheprovisionsinsubparagraph(a)providedthatconsultations
under paragraph 3ofArticle 12areconducted under theauspices oftheCommittee onSafeguards
provided forinparagraph 1ofArticle 13andthatcleardemonstration isprovided totheCommittee
that(i)imports fromcertain Members haveincreased indisproportionate percentage inrelation tothe
totalincrease ofimports oftheproduct concerned intherepresentative period, (ii)thereasons for
thedeparture from theprovisions insubparagraph (a)arejustified, and(iii)theconditions ofsuch
departure areequitable toallsuppliers oftheproduct concerned. Theduration ofanysuchmeasure
shallnotbeextended beyond theinitial period under paragraph 1ofArticle 7.Thedeparture referred
toabove shallnotbepermitted inthecaseofthreat ofserious injury.
Article 6
Provisional Safeguard Measures
Incritical circumstances where delay would cause damage which itwould bedifficult torepair,
aMember maytakeaprovisional safeguard measure pursuant toapreliminary determination thatthere
isclear evidence thatincreased imports havecaused orarethreatening tocause serious injury. The
duration oftheprovisional measure shall notexceed 200days, during which period thepertinent
requirements ofArticles 2through 7and12shallbemet. Such measures should taketheform of
tariff increases tobepromptly refunded ifthesubsequent investigation referred toinparagraph 2of
Article 4doesnotdetermine thatincreased imports havecaused orthreatened tocause serious injuryPage276
toadomestic industry. Theduration ofanysuchprovisional measure shallbecounted asapartof
theinitial period andanyextension referred toinparagraphs 1,2and3ofArticle 7.
Article 7
Duration andReview ofSafeguard Measures
1. AMember shallapply safeguard measures onlyforsuchperiod oftimeasmaybenecessary
toprevent orremedy serious injury andtofacilitate adjustment. Theperiod shallnotexceed fouryears,
unless itisextended under paragraph 2.
2. Theperiod mentioned inparagraph 1maybeextended provided thatthecompetent authorities
oftheimporting Member havedetermined, inconformity withtheprocedures setoutinArticles 2,
3,4and5,thatthesafeguard measure continues tobenecessary toprevent orremedy serious injury
andthatthere isevidence thattheindustry isadjusting, andprovided thatthepertinent provisions
ofArticles 8and12areobserved.
3. Thetotalperiod ofapplication ofasafeguard measure including theperiod ofapplication of
anyprovisional measure, theperiod ofinitial application andanyextension thereof, shallnotexceed
eight years.
4. Inorder tofacilitate adjustment inasituation where theexpected duration ofasafeguard measure
asnotified under theprovisions ofparagraph 1ofArticle 12isoveroneyear, theMember applying
themeasure shallprogressively liberalize itatregular intervals during theperiod ofapplication. If
theduration ofthemeasure exceeds three years, theMember applying suchameasure shallreview
thesituation notlaterthanthemid-term ofthemeasure and,ifappropriate, withdraw itorincrease
thepaceofliberalization. Ameasure extended under paragraph 2shallnotbemore restrictive than
itwasattheendoftheinitial period, andshould continue tobeliberalized.
5. Nosafeguard measure shallbeapplied again totheimport ofaproduct which hasbeensubject
tosuchameasure, taken afterthedateofentry intoforce oftheWTO Agreement, foraperiod of
timeequal tothatduring which suchmeasure hadbeenpreviously applied, provided thattheperiod
ofnon-application isatleasttwoyears.
6. Notwithstanding theprovisions ofparagraph 5,asafeguard measure withaduration of180days
orlessmaybeapplied again totheimport ofaproduct if:
(a) atleastoneyearhaselapsed since thedateofintroduction ofasafeguard measure on
theimport ofthatproduct; and
(b) suchasafeguard measure hasnotbeenapplied onthesame product more thantwice
inthefive-year period immediately preceding thedateofintroduction ofthemeasure.
Article 8
Level ofConcessions andOther Obligations
1. AMember proposing toapply asafeguard measure orseeking anextension ofasafeguard
measure shallendeavour tomaintain asubstantially equivalent levelofconcessions andotherobligations
tothatexisting under GATT 1994 between itandtheexporting Members which would beaffected
bysuchameasure, inaccordance withtheprovisions ofparagraph 3ofArticle 12.Toachieve thisPage277
objective, theMembers concerned mayagree onanyadequate means oftrade compensation forthe
adverse effects ofthemeasure ontheirtrade.
2. Ifnoagreement isreached within 30daysintheconsultations under paragraph 3ofArticle 12,
thentheaffected exporting Members shallbefree,notlaterthan90daysafterthemeasure isapplied,
tosuspend, upon theexpiration of30daysfrom thedayonwhich written notice ofsuchsuspension
isreceived bytheCouncil forTrade inGoods, theapplication ofsubstantially equivalent concessions
orother obligations under GATT 1994, tothetrade oftheMember applying thesafeguard measure,
thesuspension ofwhich theCouncil forTrade inGoods doesnotdisapprove.
3. Theright ofsuspension referred toinparagraph 2shallnotbeexercised forthefirstthree
years thatasafeguard measure isineffect, provided thatthesafeguard measure hasbeentaken asa
result ofanabsolute increase inimports andthatsuchameasure conforms totheprovisions ofthis
Agreement.
Article 9
Developing Country Members
1. Safeguard measures shallnotbeapplied against aproduct originating inadeveloping country
Member aslongasitsshare ofimports oftheproduct concerned intheimporting Member doesnot
exceed 3percent,provided thatdeveloping country Members withlessthan3percentimport share
collectively account fornotmore than9percentoftotalimports oftheproduct concerned.2
2. Adeveloping country Member shallhavetherighttoextend theperiod ofapplication ofa
safeguard measure foraperiod ofuptotwoyears beyond themaximum period provided forin
paragraph 3ofArticle 7.Notwithstanding theprovisions ofparagraph 5ofArticle 7,adeveloping
country Member shallhavetherighttoapply asafeguard measure again totheimport ofaproduct
which hasbeensubject tosuchameasure, taken afterthedateofentryintoforceoftheWTO Agreement,
afteraperiod oftimeequal tohalfthatduring which suchameasure hasbeenpreviously applied,
provided thattheperiod ofnon-application isatleasttwoyears.
Article 10
Pre-existing Article XIXMeasures
Members shallterminate allsafeguard measures taken pursuant toArticle XIXofGATT 1947
thatwereinexistence onthedateofentry intoforce oftheWTO Agreement notlaterthaneightyears
afterthedateonwhich theywere firstapplied orfiveyears afterthedateofentry intoforce ofthe
WTO Agreement, whichever comes later.
2AMember shall immediately notify anaction taken under paragraph 1ofArticle 9totheCommittee onSafeguards.Page278
Article 11
Prohibition andElimination ofCertain Measures
1. (a) AMember shallnottakeorseekanyemergency action onimports ofparticular products
assetforth inArticle XIXofGATT 1994 unless suchaction conforms withtheprovisions ofthat
Article applied inaccordance withthisAgreement.
(b) Furthermore, aMember shallnotseek,takeormaintain anyvoluntary export restraints,
orderly marketing arrangements oranyother similar measures ontheexport ortheimport side.3,4
These include actions taken byasingle Member aswellasactions under agreements, arrangements
andunderstandings entered intobytwoormore Members. Anysuchmeasure ineffect onthedate
ofentry intoforce oftheWTO Agreement shallbebrought intoconformity withthisAgreement or
phased outinaccordance withparagraph 2.
(c) ThisAgreement doesnotapply tomeasures sought, taken ormaintained byaMember
pursuant toprovisions ofGATT 1994 other thanArticle XIX, andMultilateral Trade Agreements in
Annex1AotherthanthisAgreement,orpursuanttoprotocolsandagreementsorarrangementsconcluded
within theframework ofGATT 1994.
2. Thephasing outofmeasures referred toinparagraph 1(b)shallbecarried outaccording to
timetables tobepresented totheCommittee onSafeguards bytheMembers concerned notlaterthan
180daysafterthedateofentry intoforce oftheWTO Agreement. These timetables shallprovide
forallmeasures referred toinparagraph 1tobephased outorbrought intoconformity withthis
Agreement within aperiod notexceeding fouryears after thedateofentry intoforce ofthe
WTO Agreement, subject tonotmore thanonespecific measure perimporting Member5,theduration
ofwhich shallnotextend beyond 31December 1999. Anysuchexception mustbemutually agreed
between theMembers directly concerned andnotified totheCommittee onSafeguards foritsreview
andacceptance within 90daysoftheentry intoforce oftheWTO Agreement. TheAnnex tothis
Agreement indicates ameasure which hasbeenagreed asfalling under thisexception.
3. Members shallnotencourage orsupport theadoption ormaintenance bypublic andprivate
enterprises ofnon-governmental measures equivalent tothose referred toinparagraph 1.
Article 12
Notification andConsultation
1. AMember shallimmediately notify theCommittee onSafeguards upon:
(a) initiating aninvestigatory process relating toserious injury orthreat thereof andthe
reasons forit;
3Animport quota applied asasafeguard measure inconformity withtherelevant provisions ofGATT 1994 andthis
Agreement may, bymutual agreement, beadministered bytheexporting Member.
4Examples ofsimilar measures include export moderation, export-price orimport-price monitoring systems, export or
import surveillance, compulsory import cartels anddiscretionary export orimport licensing schemes, anyofwhich afford
protection.
5Theonlysuchexception towhich theEuropean Communities isentitled isindicated intheAnnex tothisAgreement.Page279
(b) making afinding ofserious injury orthreat thereof caused byincreased imports; and
(c) taking adecision toapply orextend asafeguard measure.
2. Inmaking thenotifications referred toinparagraphs 1(b)and1(c), theMember proposing
toapply orextend asafeguard measure shallprovide theCommittee onSafeguards withallpertinent
information, which shallinclude evidence ofserious injury orthreat thereof caused byincreased imports,
precise description oftheproduct involved andtheproposed measure, proposed dateofintroduction,
expected duration andtimetable forprogressive liberalization. Inthecaseofanextension ofameasure,
evidence thattheindustry concerned isadjusting shallalsobeprovided. TheCouncil forTrade in
Goods ortheCommittee onSafeguards mayrequest suchadditional information astheymayconsider
necessary from theMember proposing toapply orextend themeasure.
3. AMember proposing toapply orextend asafeguard measure shallprovide adequate opportunity
forprior consultations withthose Members having asubstantial interest asexporters oftheproduct
concerned,withaviewto,interalia,reviewingtheinformationprovidedunderparagraph2,exchanging
views onthemeasure andreaching anunderstanding onways toachieve theobjective setoutin
paragraph 1ofArticle 8.
4. AMember shallmake anotification totheCommittee onSafeguards before taking aprovisional
safeguardmeasurereferredtoinArticle6.Consultationsshallbeinitiatedimmediatelyafterthemeasure
istaken.
5. Theresults oftheconsultations referred tointhisArticle, aswellastheresults ofmid-term
reviews referred toinparagraph 4ofArticle 7,anyformofcompensation referred toinparagraph 1
ofArticle 8,andproposed suspensions ofconcessions andother obligations referred toinparagraph 2
ofArticle 8,shallbenotified immediately totheCouncil forTrade inGoods bytheMembers concerned.
6. Members shallnotify promptly theCommittee onSafeguards oftheirlaws, regulations and
administrative procedures relating tosafeguard measures aswellasanymodifications made tothem.
7. Members maintaining measures described inArticle 10andparagraph 1ofArticle 11which
existonthedateofentryintoforceoftheWTO Agreement shallnotify suchmeasures totheCommittee
onSafeguards notlaterthan60daysafterthedateofentry intoforce oftheWTO Agreement.
8. AnyMember maynotify theCommittee onSafeguards ofalllaws, regulations, administrative
procedures andanymeasures oractions dealtwithinthisAgreement thathavenotbeennotified by
other Members thatarerequired bythisAgreement tomake suchnotifications.
9. AnyMember maynotify theCommittee onSafeguards ofanynon-governmental measures
referred toinparagraph 3ofArticle 11.
10. Allnotifications totheCouncil forTrade inGoods referred tointhisAgreement shallnormally
bemade through theCommittee onSafeguards.
11. Theprovisions onnotification inthisAgreement shallnotrequire anyMember todisclose
confidential information thedisclosure ofwhich would impede lawenforcement orotherwise becontrary
tothepublic interest orwould prejudice thelegitimate commercial interests ofparticular enterprises,
public orprivate.Page280
Article 13
Surveillance
1. ACommittee onSafeguards ishereby established, under theauthority oftheCouncil forTrade
inGoods, which shallbeopentotheparticipation ofanyMember indicating itswishtoserve onit.
TheCommittee willhavethefollowing functions:
(a) tomonitor, andreport annually totheCouncil forTrade inGoods on,thegeneral
implementationofthisAgreementandmakerecommendationstowardsitsimprovement;
(b) tofind,uponrequestofanaffectedMember,whetherornottheproceduralrequirements
ofthisAgreement havebeencomplied withinconnection withasafeguard measure,
andreport itsfindings totheCouncil forTrade inGoods;
(c) toassist Members, iftheysorequest, intheirconsultations under theprovisions of
thisAgreement;
(d) toexamine measures covered byArticle 10andparagraph 1ofArticle 11,monitor
thephase-out ofsuchmeasures andreport asappropriate totheCouncil forTrade in
Goods;
(e) toreview, attherequest oftheMember taking asafeguard measure, whether proposals
tosuspend concessions orother obligations are"substantially equivalent", andreport
asappropriate totheCouncil forTrade inGoods;
(f) toreceive andreview allnotifications provided forinthisAgreement andreport as
appropriate totheCouncil forTrade inGoods; and
(g) toperform anyotherfunction connected withthisAgreement thattheCouncil forTrade
inGoods maydetermine.
2. Toassist theCommittee incarrying outitssurveillance function, theSecretariat shallprepare
annually afactual report ontheoperation ofthisAgreement based onnotifications andother reliable
information available toit.
Article 14
Dispute Settlement
Theprovisions ofArticles XXII andXXIII ofGATT 1994 aselaborated andapplied bythe
Dispute Settlement Understanding shallapply toconsultations andthesettlement ofdisputes arising
under thisAgreement.Page281
ANNEX
EXCEPTION REFERRED TOINPARAGRAPH 2OFARTICLE 11
Members concerned Product Termination
EC/Japan Passenger cars, offroad
vehicles, lightcommercial
vehicles, lighttrucks (up
to5tonnes), andthesame
vehicles inwholly
knocked-down form (CKD
sets).31December 1999