Title:Emergency Action -- Chapter Eight
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:30583                                     Chapter Eight 
 
                                    Emergency Action 
 
 
            Article 801:   Bilateral Actions 
 
            1.   Subject to paragraphs 2 through 4 and Annex 801.1, and 
            during the transition period only, if a good originating in the 
            territory of a Party, as a result of the reduction or 
            elimination of a duty provided for in this Agreement, is being 
            imported into the territory of another Party in such increased 
            quantities, in absolute terms, and under such conditions that 
            the imports of the good from that Party alone constitute a 
            substantial cause of serious injury, or threat thereof, to a 
            domestic industry producing a like or directly competitive 
            good, the Party into whose territory the good is being imported 
            may, to the minimum extent necessary to remedy or prevent the 
            injury: 
 
                 (a)  suspend the further reduction of any rate of duty 
                      provided for under this Agreement on the good;  
 
                 (b)  increase the rate of duty on the good to a level not 
                      to exceed the lesser of 
 
                      (i)  the most-favored-nation (MFN) applied rate of 
                           duty in effect at the time the action is taken, 
                           and 
 
                      (ii) the MFN applied rate of duty in effect on the 
                           day immediately preceding the date of entry into 
                           force of this Agreement; or 
 
                 (c)  in the case of a duty applied to a good on a seasonal 
                      basis, increase the rate of duty to a level not to 
                      exceed the MFN applied rate of duty that was in 
                      effect on the good for the corresponding season 
                      immediately preceding the date of entry into force of 
                      this Agreement. 
 
            2.   The following conditions and limitations shall apply to a 
            proceeding that may result in emergency action under paragraph 
            1: 
 
                 (a)  a Party shall, without delay, deliver to any Party 
                      that may be affected written notice of, and a request 
                      for consultations regarding, the institution of a 
                      proceeding that could result in emergency action 
                      against a good originating in the territory of a 
                      Party; 
 
 
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                 (b)  any such action shall be initiated no later than one 
                      year after the date of institution of the proceeding; 
 
                 (c)  no action may be maintained 
 
                      (i)  for a period exceeding three years, except where 
                           the good against which the action is taken is 
                           provided for in the items in staging category C+ 
                           of the Schedule to Annex 302.2 (Tariff 
                           Elimination) of the Party taking the action and 
                           that Party determines that the affected industry 
                           has undertaken adjustment and requires an 
                           extension of the period of relief, in which case 
                           the period of relief may be extended for one 
                           year provided that the duty applied during the 
                           initial period of relief is substantially 
                           reduced at the beginning of the extension 
                           period, or 
 
                      (ii) beyond the expiration of the transition period, 
                           except with the consent of the Party against 
                           whose good the action is taken; 
 
                 (d)  no action may be taken by a Party against any 
                      particular good originating in the territory of 
                      another Party more than once during the transition 
                      period; and 
 
                 (e)  on the termination of the action, the rate of duty 
                      shall be the rate that, according to the Party's 
                      Schedule to Annex 302.2 for the staged elimination of 
                      the tariff, would have been in effect one year after 
                      the initiation of the action, and beginning  January 
                      1 of the year following the termination of the 
                      action, at the option of the Party that has taken the 
                      action 
 
                      (i)  the rate of duty shall conform to the applicable 
                           rate set out in its  Schedule to Annex 302.2, or 
 
                      (ii) the tariff shall be eliminated in equal annual 
                           stages ending on the date set out in its 
                           Schedule to Annex 302.2 for the elimination of 
                           the tariff.  
 
            3.   A Party may take a bilateral emergency action after the 
            expiration of the transition period to deal with cases of 
            serious injury, or threat thereof, to a domestic industry 
            arising from the operation of this Agreement only with the 
            consent of the Party against whose good the action would be 
            taken. 
 
 
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            4.   The Party taking an action under this Article shall 
            provide to the Party against whose good the action is taken 
            mutually agreed trade liberalizing compensation in the form of 
            concessions having substantially equivalent trade effects or 
            equivalent to the value of the additional duties expected to 
            result from the action.  If the Parties concerned are unable to 
            agree on compensation, the Party against whose good the action 
            is taken may take tariff action having trade effects 
            substantially equivalent to the action taken under this 
            Article.  The Party taking the tariff action shall apply the 
            action only for the minimum period necessary to achieve the 
            substantially equivalent effects. 
 
            5.   This Article does not apply to emergency actions 
            respecting goods covered by Annex 300-B (Textile and Apparel 
            Goods). 
 
 
            Article 802:   Global Actions 
 
            1.   Each Party retains its rights and obligations under 
            Article XIX of the GATT or any safeguard agreement pursuant 
            thereto except those regarding compensation or retaliation and 
            exclusion from an action to the extent that such rights or 
            obligations are inconsistent with this Article.  Any Party 
            taking an emergency action under Article XIX or any such 
            agreement shall exclude imports of a good from each other Party 
            from the action unless: 
 
                 (a)  imports from a Party, considered individually, 
                      account for a substantial share of total imports; and 
 
                 (b)  imports from a Party, considered individually, or in 
                      exceptional circumstances imports from Parties 
                      considered collectively, contribute importantly to 
                      the serious injury, or threat thereof, caused by 
                      imports. 
 
            2.   In determining whether: 
 
                 (a)  imports from a Party, considered individually, 
                      account for a substantial share of total imports, 
                      those imports normally shall not be considered to 
                      account for a substantial share of total imports if 
                      that Party is not among the top five suppliers of the 
                      good subject to the proceeding, measured in terms of 
                      import share during the most recent three-year 
                      period; and 
 
                 (b)  imports from a Party or Parties contribute 
                      importantly to the serious injury, or threat thereof, 
 
 
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                      the competent investigating authority shall consider 
                      such factors as the change in the import share of 
                      each Party, and the level and change in the level of 
                      imports of each Party.  In this regard, imports from 
                      a Party normally shall not be deemed to contribute 
                      importantly to serious injury, or the threat thereof, 
                      if the growth rate of imports from a Party during the 
                      period in which the injurious surge in imports 
                      occurred is appreciably lower than the growth rate of 
                      total imports from all sources over the same period.  
 
            3.   A Party taking such action, from which a good from another 
            Party or Parties is initially excluded pursuant to paragraph 1, 
            shall have the right subsequently to include that good from the 
            other Party or Parties in the action in the event that the 
            competent investigating authority determines that a surge in 
            imports of such good from the other Party or Parties undermines 
            the effectiveness of the action. 
 
            4.   A Party shall, without delay, deliver written notice to 
            the other Parties of the institution of a proceeding that may 
            result in emergency action under paragraph 1 or 3. 
 
            5.   No Party may impose restrictions on a good in an action 
            under paragraph 1 or 3: 
 
                 (a)  without delivery of prior written notice to the 
                      Commission, and without adequate opportunity for 
                      consultation with the Party or Parties against whose 
                      good the action is proposed to be taken, as far in 
                      advance of taking the action as practicable; and 
 
                 (b)  that would have the effect of reducing imports of 
                      such good from a Party below the trend of imports of 
                      the good from that Party over a recent representative 
                      base period with allowance for reasonable growth. 
 
            6.   The Party taking an action pursuant to this Article shall 
            provide to the Party or Parties against whose good the action 
            is taken mutually agreed trade liberalizing compensation in the 
            form of concessions having substantially equivalent trade 
            effects or equivalent to the value of the additional duties 
            expected to result from the action.  If the Parties concerned 
            are unable to agree on compensation, the Party against whose 
            good the action is taken may take action having trade effects 
            substantially equivalent to the action taken under paragraph 1 
            or 3. 
 
 
 
 
 
 
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            Article 803:   Administration of Emergency Action Proceedings 
 
            1.   Each Party shall ensure the consistent, impartial and 
            reasonable administration of its laws, regulations, decisions 
            and rulings governing all emergency action proceedings. 
 
            2.   Each Party shall entrust determinations of serious injury, 
            or threat thereof, in emergency action proceedings to a 
            competent investigating authority, subject to review by 
            judicial or administrative tribunals, to the extent provided by 
            domestic law.  Negative injury determinations shall not be 
            subject to modification, except by such review.  The competent 
            investigating authority empowered under domestic law to conduct 
            such proceedings should be provided with the necessary 
            resources to enable it to fulfill its duties. 
 
            3.   Each Party shall adopt or maintain equitable, timely, 
            transparent and effective procedures for emergency action 
            proceedings, in accordance with the requirements set out in 
            Annex 803.3. 
 
            4.   This Article does not apply to emergency actions taken 
            under Annex 300-B (Textile and Apparel Goods). 
 
 
            Article 804:   Dispute Settlement in Emergency Action Matters 
 
                 No Party may request the establishment of an arbitral 
            panel under Article 2008 (Request for an Arbitral Panel) 
            regarding any proposed emergency action. 
 
 
            Article 805:   Definitions 
 
            For purposes of this Chapter: 
 
            competent investigating authority means the "competent 
            investigating authority" of a Party as defined in Annex 805; 
 
            contribute importantly means an important cause, but not 
            necessarily the most important cause; 
 
            critical circumstances means circumstances where delay would 
            cause damage that would be difficult to repair; 
 
            domestic industry means the producers as a whole of the like or 
            directly competitive good operating in the territory of a 
            Party; 
 
            emergency action does not include any emergency action pursuant 
            to a proceeding instituted prior to January 1, 1994; 
 
 
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            good originating in the territory of a Party means an 
            originating good, except that in determining the Party in whose 
            territory that good originates, the relevant rules of Annex 
            302.2 shall apply; 
 
            serious injury means a significant overall impairment of a 
            domestic industry; 
 
            surge means a significant increase in imports over the trend 
            for a recent representative base period; 
 
            threat of serious injury means serious injury that, on the 
            basis of facts and not merely on allegation, conjecture or 
            remote possibility, is clearly imminent; and 
 
            transition period means the 10-year period beginning on January 
            1, 1994, except where the good against which the action is 
            taken is provided for in the items in staging category C+ of 
            the Schedule to Annex 302.2 of the Party taking the action, in 
            which case the transition period shall be the period of staged 
            tariff elimination for that good. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                                Annex 801.1                                              
                  ___________ 
 
 
                                      Annex 801.1 
 
                                   Bilateral Actions 
 
 
            1.   Notwithstanding Article 801, bilateral emergency actions 
            between Canada and the United States on goods originating in 
            the territory of either Party, other than goods covered by 
            Annex 300-B (Textile and Apparel Goods), shall be governed in 
            accordance with the terms of Article 1101 of the Canada -                                  
                           ________ 
            United States Free Trade Agreement, which is hereby            
__________________________________ 
            incorporated into and made a part of this Agreement for such 
            purpose. 
 
            2.   For such purposes, "good originating in the territory of 
            one Party" means "good originating in the territory of a Party" 
            as defined in Article 805. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                                Annex 803.3                                              
                  ___________ 
 
 
                                      Annex 803.3 
 
                     Administration of Emergency Action Proceedings 
 
 
            Institution of a Proceeding             ___________________________ 
 
            1.   An emergency action proceeding may be instituted by a 
            petition or complaint by entities specified in domestic law.  
            The entity filing the petition or complaint shall demonstrate 
            that it is representative of the domestic industry producing a 
            good like or directly competitive with the imported good.  
 
            2.   A Party may institute a proceeding on its own motion or 
            request the competent investigating authority to conduct a 
            proceeding. 
 
            Contents of a Petition or Complaint             ___________________________________ 
 
            3.   Where the basis for an investigation is a petition or 
            complaint filed by an entity representative of a domestic 
            industry, the petitioning entity shall, in its petition or 
            complaint, provide the following information to the extent that 
            such information is publicly available from governmental or 
            other sources, or best estimates and the basis therefor if such 
            information is not available: 
 
                 (a)  product description - the name and description of the 
                      imported good concerned, the tariff subheading under 
                      which that good is classified, its current tariff 
                      treatment and the name and description of the like or 
                      directly competitive domestic good concerned;  
 
                 (b)  representativeness - 
 
                      (i)  the names and addresses of the entities filing 
                           the petition or complaint, and the locations of 
                           the establishments in which they produce the 
                           domestic good,  
 
                      (ii) the percentage of domestic production of the 
                           like or directly competitive good that such 
                           entities account for and the basis for claiming 
                           that they are representative of an industry, and 
 
                      (iii)     the names and locations of all other 
                                domestic establishments in which the like 
                                or directly competitive good is produced;  
 
 
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                                                                Annex 803.3                                              
                  ___________ 
 
 
                 (c)  import data - import data for each of the five most 
                      recent full years that form the basis of the claim 
                      that the good concerned is being imported in 
                      increased quantities, either in absolute terms or 
                      relative to domestic production as appropriate; 
 
                 (d)  domestic production data - data on total domestic 
                      production of the like or directly competitive good 
                      for each of the five most recent full years; 
 
                 (e)  data showing injury - quantitative and objective data 
                      indicating the nature and extent of injury to the 
                      concerned industry, such as data showing changes in 
                      the level of sales, prices, production, productivity, 
                      capacity utilization, market share, profits and 
                      losses, and employment; 
 
                 (f)  cause of injury - an enumeration and description of 
                      the alleged causes of the injury, or threat thereof, 
                      and a summary of the basis for the assertion that 
                      increased imports, either actual or relative to 
                      domestic production, of the imported good are causing 
                      or threatening to cause serious injury, supported by 
                      pertinent data; and 
 
                 (g)  criteria for inclusion - quantitative and objective 
                      data indicating the share of imports accounted for by 
                      imports from the territory of each other Party and 
                      the petitioner's views on the extent to which such 
                      imports are contributing importantly to the serious 
                      injury, or threat thereof, caused by imports of that 
                      good. 
              
            4.   Petitions or complaints, except to the extent that they 
            contain confidential business information, shall promptly be 
            made available for public inspection on being filed. 
 
            Notice Requirement             __________________ 
 
            5.   On instituting an emergency action proceeding, the 
            competent investigating authority shall publish notice of the 
            institution of the proceeding in the official journal of the 
            Party.  The notice shall identify the petitioner or other 
            requester, the imported good that is the subject of the 
            proceeding and its tariff subheading, the nature and timing of 
            the determination to be made, the time and place of the public 
            hearing, dates of deadlines for filing briefs, statements and 
            other documents, the place at which the petition and any other 
 
 
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                                                                Annex 803.3                                              
                  ___________ 
 
 
            documents filed in the course of the proceeding may be 
            inspected, and the name, address and telephone number of the 
            office to be contacted for more information.  
 
            6.   With respect to an emergency action proceeding instituted 
            on the basis of a petition or complaint filed by an entity 
            asserting that it is representative of the domestic industry, 
            the competent investigating authority shall not publish the 
            notice required by paragraph 5 without first assessing 
            carefully that the petition or complaint meets the requirements 
            of paragraph 3, including representativeness. 
 
            Public Hearing             ______________ 
 
            7.   In the course of each proceeding, the competent 
            investigating authority shall: 
 
                 (a)  hold a public hearing, after providing reasonable 
                      notice, to allow all interested parties, and any 
                      association whose purpose is to represent the 
                      interests of consumers in the territory of the Party 
                      instituting the proceeding, to appear in person or by 
                      counsel, to present evidence and to be heard on the 
                      questions of serious injury, or threat thereof, and 
                      the appropriate remedy; and 
 
                 (b)  provide an opportunity to all interested parties and 
                      any such association appearing at the hearing to 
                      cross-question interested parties making 
                      presentations at that hearing. 
 
            Confidential Information             ________________________ 
 
            8.   The competent investigating authority shall adopt or 
            maintain procedures for the treatment of confidential 
            information, protected under domestic law, that is provided in 
            the course of a proceeding, including a requirement that 
            interested parties and consumer associations providing such 
            information furnish non-confidential written summaries thereof, 
            or where they indicate that the information cannot be 
            summarized, the reasons why a summary cannot be provided. 
 
            Evidence of Injury and Causation             ________________________________ 
 
            9.   In conducting its proceeding the competent investigating 
            authority shall gather, to the best of its ability, all 
            relevant information appropriate to the determination it must 
            make.  It shall evaluate all relevant factors of an objective 
 
 
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                                                                Annex 803.3                                              
                  ___________ 
 
 
            and quantifiable nature having a bearing on the situation of 
            that industry, including the rate and amount of the increase in 
            imports of the good concerned, in absolute and relative terms 
            as appropriate, the share of the domestic market taken by 
            increased imports, and changes in the level of sales, 
            production, productivity, capacity utilization, profits and 
            losses, and employment.  In making its determination, the 
            competent investigating authority may also consider other 
            economic factors, such as changes in prices and inventories, 
            and the ability of firms in the industry to generate capital. 
 
            10.  The competent investigating authority shall not make an 
            affirmative injury determination unless its investigation 
            demonstrates, on the basis of objective evidence, the existence 
            of a clear causal link between increased imports of the good 
            concerned and serious injury, or threat thereof.  Where 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. 
 
            Deliberation and Report             _______________________ 
 
            11.  Except in critical circumstances and in global actions 
            involving perishable agricultural goods, the competent 
            investigating authority, before making an affirmative 
            determination in an emergency action proceeding, shall allow 
            sufficient time to gather and consider the relevant 
            information, hold a public hearing and provide an opportunity 
            for all interested parties and consumer associations to prepare 
            and submit their views. 
 
            12.  The competent investigating authority shall publish 
            promptly a report, including a summary thereof in the official 
            journal of the Party, setting out its findings and reasoned 
            conclusions on all pertinent issues of law and fact.  The 
            report shall describe the imported good and its tariff item 
            number, the standard applied and the finding made.  The 
            statement of reasons shall set out the basis for the 
            determination, including a description of:   
 
                 (a)  the domestic industry seriously injured or threatened 
                      with serious injury; 
 
                 (b)  information supporting a finding that imports are 
                      increasing, the domestic industry is seriously 
                      injured or threatened with serious injury, and 
                      increasing imports are causing or threatening serious 
                      injury; and 
 
 
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                                                                Annex 803.3                                              
                  ___________ 
 
 
                 (c)  if provided for by domestic law, any finding or 
                      recommendation regarding the appropriate remedy and 
                      the basis therefor.   
 
            13.  In its report, the competent investigating authority shall 
            not disclose any confidential information provided pursuant to 
            any undertaking concerning confidential information that may 
            have been made in the course of the proceedings. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                                  Annex 805                                               
                   _________ 
 
 
                                       Annex 805 
 
                              Country-Specific Definitions 
 
 
            For purposes of this Chapter: 
 
            competent investigating authority means: 
 
                 (a)  in the case of Canada, the Canadian International 
                      Trade Tribunal, or its successor; 
 
                 (b)  in the case of the Mexico, the designated authority 
                      within the Ministry of Trade and Industrial 
                      Development ("Secretar a de Comercio y Fomento 
                      Industrial"), or its successor; and 
 
                 (c)  in the case of the United States, the U.S. 
                      International Trade Commission, or its successor. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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