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TPD > FTAA > Canada Proposals 2000 > Positions

Canada's Proposals for the FTAA Agreement 
FTAA Negotiating Groups - Canadian Written Submissions 


January 2000


The purpose of this note is to provide background information on a possible transitional safeguard provision in the FTAA. It examines the purpose and basic characteristics of such a provision. 

Safeguard measures are sometimes included in an FTA on a transitional basis to allow a country to take short-term action to protect its industry from increased imports (resulting from tariffs being reduced/eliminated under the FTA) which cause serious injury, or threat thereof. Before taking action under such a provision, the importing country must show that:
  • Imports have increased in absolute terms as a result of the tariff reduction/elimination 

  • The imports are a substantial cause of serious injury, or threat thereof, to domestic producers of like goods 

Limits are placed on the scope and nature of a transitional safeguard action:

  • They are only permitted during the transition period (normally linked to the phase-out period for tariffs) 

  • Their extent is limited to that necessary to remedy or prevent the injury 

  • Their nature is limited to the suspension of tariff reductions or increasing tariffs to their MFN levels; quotas and tariff rate quotas are not usually permitted 

  • The action is of limited duration (e.g., no more than 3 years) 

  • No action can be taken more than once for any particular product 

  • Upon termination of the action, the duty returns to the level it would have been if the action had not been taken 

  • Notification/consultation must take place before an action is imposed 

  • Compensation may be demanded in the form of substantially equivalent concessions; failure to reach agreement on compensation can lead to retaliation 

Regional Trade Agreements do not require a transitional safeguard mechanism as countries maintain their rights and obligations under Article XIX of the GATT 1994 as elaborated in the WTO Agreement on Safeguards (for more on the WTO Safeguard provisions, see ngma/w/80).

Source: Canadian Department of Foreign Affairs and International Trade