ARTICLE 9.6
Form of bilateral safeguard measures
For goods other than vehicles classified under HS headings 8703 and 8704, bilateral safeguard measures adopted pursuant to this Chapter shall consist of:
(a) a temporary suspension of Annex 2-A for the product concerned as provided for under this Agreement; or
(b) a temporary reduction of the tariff preference for the product concerned so that the rate of customs duty does not exceed the lesser of:
(i) the most-favoured-nation applied rate of customs duty on the product in effect at the time the measure is taken; and
(ii) the base rate of customs duty on the product referred to in Annex 2-A.
ARTICLE 9.7
Margin of preference
Upon termination of the bilateral safeguard measure, the margin of preference shall be the one that would be applied to the product in the absence of the measure under Annex 2-A.
ARTICLE 9.8
Duration of bilateral safeguard measures
Bilateral safeguard measures shall be applied only for the period necessary to prevent or remedy the serious injury and to facilitate adjustment of the domestic industry. That period, including the period of application of any provisional measure, shall not exceed 2 (two) years.
ARTICLE 9.9
Extension of bilateral safeguard measures
1. Bilateral safeguard measures may be extended once for a maximum period equal to the initially foreseen period of application, if it has been determined, in accordance with the procedures set out in this Chapter, that the measure continues to be necessary to prevent or remedy serious injury and if the domestic industry provides evidence that it is adjusting. The extended measure shall not be more restrictive than it was at the end of the initial period.
2. No safeguard measure shall be applied again to the import of a product under Annex 2-A which has been subject to such a measure, unless a period of time equal to half of the total duration of the previous safeguard measure has elapsed.
SECTION E
INVESTIGATION AND TRANSPARENCY PROCEDURES
ARTICLE 9.10
Investigation
1. In conducting the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry as referred to in Article 9.3, the competent investigating authority 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; and changes in the level of sales, including prices, production, productivity, capacity utilisation, profits and losses, and employment.
2. The competent investigating authority shall demonstrate, on the basis of objective evidence, the existence of a causal link between increased imports of the product concerned and serious injury or the threat of serious injury. The competent investigating authority shall also evaluate all known factors other than increased imports under preferential terms of this Agreement that might be at the same time causing injury to the domestic industry. The effects of an increase in imports of the products concerned from other countries shall not be attributed to the imports under preferential terms.
3. In conducting an injury investigation as referred to in paragraph 1, a competent investigating authority should collect data over a period of at least 36 (thirty-six) months ending as close to the date of the presentation of a request to initiate an investigation as is practicable.
ARTICLE 9.11
Initiation of an investigation
1. If there is sufficient prima facie evidence to justify such initiation, a bilateral safeguard investigation may be initiated upon request of:
(a) the domestic industry or a trade and business association acting on behalf of domestic producers of the like or directly competitive products in the importing Party; or
(b) one or more importing Member States of the European Union or Signatory MERCOSUR States.
2. The request to initiate an investigation shall contain at least the following information:
(a) the name and description of the imported product concerned, its tariff heading and the tariff treatment in force, as well as the name and description of the like or directly competitive product;
(b) the names and addresses of the producers or association that submit the request, if applicable;
(c) if reasonably available, a list of all known producers of the like or directly competitive product; and
(d) evidence that the conditions for imposing the safeguard measure set out in Article 9.3(1) are met.
For the purposes of point (d) of this paragraph, the request to initiate an investigation shall contain the following information:
(i) the production volume of producers submitting or represented in the application and an estimation of the production of other known producers of the like or directly competitive product;
(ii) the rate and amount of the increase in total and bilateral imports of the product concerned in absolute and relative terms, for at least over the 36 (thirty-six) months prior to the date of the presentation of a request to initiate an investigation, for which information is available;
(iii) the level of import prices during the same period; and
(iv) if information is available, objective and quantifiable data regarding the like or directly competitive product, on the volume of total production and of total sales in the internal market, inventories, prices for the internal market, productivity, capacity utilisation, employment, profits and losses, and market share of the requesting firms or of those represented in the request, for at least the last 36 (thirty-six) months previous to the presentation of the request, for which information is available.
ARTICLE 9.12
Confidential information
1. The competent investigating authorities shall, upon cause being shown, treat any information which is by nature confidential or which is provided on a confidential basis, as such. Such information shall not be disclosed without the permission of the interested party submitting it. An interested party providing confidential information may be requested to furnish non-confidential summaries thereof or, if such interested party indicates that such information cannot be summarised, the reasons why a summary cannot be provided.
2. Notwithstanding paragraph 1, if the competent authorities find that a request for confidentiality is not warranted and if the interested party is either unwilling to make the information public or to authorise its disclosure in generalised 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.
3. If information regarding production, production capacity, employment, wages, volume and value of domestic sales or average price is presented on a confidential basis, the competent investigating authorities shall ensure that meaningful non-confidential summaries disclosing at least aggregated data or, in cases in which the disclosure of aggregated data would endanger the confidentiality of the company's data, indexes for each period of 12 (twelve) months under investigation are submitted, so as to ensure the appropriate right of defence of the interested parties. In this regard, requests for confidentiality should be considered in situations in which particular market or domestic industry structures so justify it. This provision does not prevent the presentation of more detailed non-confidential summaries.
4. Requests for confidentiality shall not be warranted in respect of information regarding basic technical and quality standards or uses of the product concerned. Requests for confidentiality in respect of information regarding the identity of the applicants and other known manufacturing companies not part of the petition shall be warranted only in exceptional circumstances, which shall be duly justified by the competent investigating authorities. In this regard, mere allegations shall not suffice for justifying confidentiality requests. If the identity of the applicants cannot be disclosed, competent investigating authorities shall disclose the total number of producers included in the domestic industry and the proportion of the production that the applicants represent in relation to the total production of the domestic industry.
ARTICLE 9.13
Timeframe for the investigation
The period between the date of publication of the decision to initiate the investigation and the publication of the final decision should not exceed 1 (one) year. Under exceptional circumstances this period may be extended, but, in any case, shall not exceed 18 (eighteen) months. A Party shall not apply safeguard measures if this timeframe has not been observed by the competent investigating authorities.
ARTICLE 9.14
Transparency
Each Party shall establish or maintain transparent, effective and equitable procedures for the impartial and reasonable application of safeguard measures, in accordance with this Chapter.
SECTION F
PROVISIONAL SAFEGUARD MEASURES
ARTICLE 9.15
Provisional safeguard measures
1. In critical circumstances where delay may cause damage which would be difficult to repair, a Party, after due notification, may take a provisional safeguard measure pursuant to a preliminary determination that there is clear evidence that imports under preferential terms have increased and that such imports have caused or are threatening to cause serious injury. The duration of the provisional measure shall not exceed 200 (two hundred) days, during which period the requirements of this Chapter shall be met. If the final determination concludes that there was no serious injury or threat to the domestic industry caused by imports under preferential terms, the increased tariff or provisional guarantee, if collected or imposed under provisional measures, shall be promptly refunded, in accordance with the domestic regulation of the relevant Party.
2. Provisional safeguard measures shall not be taken against Paraguay, unless the result of the preliminary determination pursuant to paragraph 1 demonstrates that the existence of serious injury or the threat of serious injury is also being caused by imports of products from Paraguay under preferential terms.
SECTION G
PUBLIC NOTICE
ARTICLE 9.16
Public notice on the initiation of an investigation
The public notice of the initiation of a safeguard investigation shall include the following information:
(a) the name of the applicant;
(b) the complete description of the imported product under investigation and its classification under the Harmonized System;
(c) the deadline for the request for hearings;
(d) the deadlines to register as an interested party and for the submission of information, statements and other documents;
(e) the address where the application and other documents related to the investigation can be examined;
(f) the name, address and email address or telephone or fax number of the institution which can provide further information; and
(g) a summary of the facts on which the initiation of the investigation was based, including data on imports that have allegedly increased in absolute or relative terms to total production and an analysis of the domestic industry situation based on all the elements conveyed in the application.
ARTICLE 9.17
Public notice on the application of bilateral safeguard measures
The public notice of the decision to apply a provisional safeguard measure and to apply or not apply a definitive safeguard measure shall include the following information:
(a) the complete description of the products subject to the safeguard measure and their tariff classification under the Harmonized System;
(b) information and evidence leading to the decision, such as:
(i) the increasing or increased preferential imports, where applicable;
(ii) the situation of the domestic industry;
(iii) the existence of a causal link between the increased preferential imports of the products concerned and the serious injury or threat of serious injury to the domestic industry, where applicable; and
(iv) in the case of preliminary determination, the existence of critical circumstances;
(c) other reasoned findings and conclusions on all relevant issues of fact and law;
(d) a description of the measure to be adopted, where applicable; and
(e) the date of entry into force of the measure and its duration, where applicable.
SECTION H
NOTIFICATIONS AND CONSULTATIONS
ARTICLE 9.18
Notifications
1. The importing Party shall notify the exporting Party in writing of the decision to:
(a) initiate the investigation under this Chapter;
(b) apply a provisional safeguard measure; and
(c) apply or not apply a definitive safeguard measure.
2. The decision shall be notified by the importing Party no later than 10 (ten) days after its publication and shall be accompanied by the appropriate public notice. In the case of a decision to initiate an investigation, a copy of the request to initiate the investigation shall be included in the notification.
ARTICLE 9.19
Consultations
1. If a Party determines that the conditions to impose a definitive measure are met, it shall notify in writing and at the same time invite the other Party for consultations.
2. The notification and the invitation for consultations referred to in paragraph 1 shall be made at least 30 (thirty) days before a definitive measure is expected to enter into force. A Party shall not apply a definitive measure in the absence of such notification.
3. The notification referred to in paragraph 1 shall include:
(a) the data and objective information demonstrating the existence of serious injury or the threat of serious injury to the domestic industry caused by the increased imports under preferential terms;
(b) a complete description of the imported product subject to the measure and its classification under the Harmonized System;
(c) a description of the measure proposed;
(d) the date of entry into force of the measure and its duration; and
(e) the invitation for consultations.
4. The objective of the consultations referred to in paragraph 1 shall be to acquire a mutual understanding of the publicly known facts and to exchange opinions, with a view to reaching a mutually satisfactory solution. If no satisfactory solution is reached within 30 (thirty) days of the notification referred to in paragraph 1, the Party may apply the measure at the end of the period of 30 (thirty) days.
5. At any stage of the investigation, the notified Party may request consultations with the other Party or any additional information that it considers necessary.
SECTION I
OUTERMOST REGIONS OF THE EUROPEAN UNION 26
ARTICLE 9.20
Outermost Regions of the European Union
1. Notwithstanding Article 9.3, if a product originating in one or more Signatory MERCOSUR States is imported under preferential terms into the territory of one or several of the European Union's outermost regions in such increased quantities and under such conditions as to cause or threaten to cause serious deterioration in the economic situation of the European Union's outermost region(s), the European Union may exceptionally take safeguard measures limited to the territory of the region(s) concerned, unless a mutually satisfactory solution is reached.
2. Without prejudice to paragraph 1, other rules laid down in this Chapter applicable to bilateral safeguards also apply to any safeguard adopted under this Article.
3. For the purposes of paragraph 1, serious deterioration means major difficulties in a sector of the economy producing like or directly competitive products. The determination of serious deterioration shall be based on objective factors, including the following elements:
(a) the increase in the volume of imports in absolute or relative terms to domestic production and to imports from other countries; and
(b) the effect of such imports on the situation of the relevant industry or the economic sector concerned, including on the level of sales, production, financial situation and employment.
Chapter 10. TRADE IN SERVICES AND ESTABLISHMENT
Section A. GENERAL PROVISIONS
Article 10.1. Objective and Scope
1. The Parties, reaffirming their respective commitments under the WTO Agreement, hereby lay down the necessary arrangements for the liberalisation of trade in services and establishment.
2. Nothing in this Chapter shall be construed as requiring the privatisation of public services or imposing any obligation with respect to government procurement.
3. The provisions of this Chapter shall not apply to subsidies granted or grants provided by a Party, including government-supported loans, guarantees and insurance.
4. Consistent with the provisions of this Chapter, each Party retains the right to regulate, to introduce new regulations or to supply services to meet its policy objectives.
5. The provisions of this Chapter shall not apply to each Party's social security systems.
6. The provisions of this Chapter do not apply to services supplied or activities carried out in the exercise of governmental authority, namely any service which is supplied or any activity which is carried out neither on a commercial basis, nor in competition with one or more service suppliers or investors.
7. This Chapter applies to measures of each Party affecting trade in services and establishment, with the exception of:
(a) national maritime cabotage (1);
(b) domestic and international air transport services, whether scheduled or non-scheduled, and services directly related to the exercise of traffic rights, other than:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system (CRS) services; and
(iv) ground handling services;
(c) inland navigation; and
(d) audio-visual services.
Article 10.2. Definitions
For the purposes of this Chapter:
(a) "consumption abroad" means the supply of a service in the territory of a Party to the service consumer of the other Party (mode 2);
(b) "cross-border supply of services" means the supply of a service from the territory of a Party into the territory of the other Party (mode 1);
(c) "economic activity" includes any activity of an economic nature, irrespective of whether it is related to services or non-services sectors, subject to the provisions of Article 10.1;
(d) "enterprise" means a juridical person of a Party, or a branch or a representative office of such juridical person of a Party, set up through establishment, as defined pursuant to this Article;
(e) "temporary entry and stay of natural persons" means the entry and temporary stay of key personnel, graduate trainees, business sellers, contractual service suppliers and independent professionals of a Party in the territory of the other Party, in accordance with Section B of this Chapter;
(f) "establishment" means:
(i) the constitution, acquisition or maintenance of a juridical person (1); or
(ii) the creation or maintenance of a branch or representative office of a juridical person, within the territory of a Party for the purpose of performing an economic activity;
(g) "investor" of a Party means any person that seeks to perform or performs an economic activity through establishment in the territory of the other Party (1);
(h) "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(i) a juridical person is:
(i) "owned" by natural or juridical persons of a Party if more than 50 % of the equity interest in it is beneficially owned by natural or juridical persons of that Party; and
(ii) "controlled" by natural or juridical persons of a Party if those natural or juridical persons have the power to name a majority of its directors or to legally direct its actions;
(j) "juridical person of a Party" means a juridical person which is either:
(i) constituted or otherwise organised under the law of that Party, and is engaged in substantive business operations in the territory of that Party or the other Party; or
(ii) in the case of establishment, owned or controlled by: