NAFTA: Annexes | Page 7

of Appendix 3.1.
2. If a Party considers that non-originating textile and apparel goods, including goods entered under the tariff preference levels (TPLs) set out in Appendix 6.0, are being imported into its territory from a Party in such increased quantities, in absolute terms or relative to the domestic market, so as to cause serious damage or actual threat thereof, to a domestic industry producing a like or directly competitive good in the importing Party, that Party may request consultations with another Party with a view to eliminating the serious damage or actual threat thereof.
3. The Party requesting consultations shall include in its request for consultations the reasons that it considers demonstrate that such serious damage or actual threat to its domestic industry is resulting from the imports of the other Party, including the latest data concerning such damage or threat.
4. In determining serious damage, or actual threat thereof, the Party shall apply the provisions of paragraph 2, Section 4.
5. The concerned Parties shall commence consultations within 60 days following the request for consultations and shall endeavor to agree on a mutually satisfactory level of restraint on exports of the particular good within 90 days of the request, unless the consulting Parties agree to extend this period. In reaching a mutually satisfactory level of export restraint, the consulting Parties shall:
(a) consider the situation in the market in the importing Party;
(b) consider the history of trade in textile and apparel goods between the consulting Parties, including the previous levels of trade; and
(c) ensure that textile and apparel goods imported from the territory of another Party are accorded equitable treatment as compared with treatment granted to other non-Party suppliers of like textile and apparel goods.
6. If the Parties do not agree on a mutually satisfactory level during the 90-day consultation period, the Party requesting consultations may impose annual quantitative restrictions on imports of the good from the territory of the other Party for a period no longer than that provided for in paragraph 9, provided that:
(a) the measure shall not have effect beyond the transition period; and
(b) the quantitative restriction shall not be less than the sum of
(i) the quantity of the good imported into its territory from the Party that would be affected by the restriction, as reported in general import statistics, during the first 12 of the most recent 14 months preceding the month in which the request for consultations was made, and
(ii) an additional 20 percent of such quantity for cotton, man-made fiber and other non-cotton vegetable fiber good categories and six percent for wool good categories.
7. The first term of any quantitative restriction imposed under paragraph 6 shall commence on the day following the request for consultations and terminate at the end of the calendar year in which the quantitative restriction was imposed. Any quantitative restriction that is imposed for a term less than 12 months and the applicable flexibility provisions shall be prorated to correspond to the period of time remaining in the calendar year in which the restriction is imposed.
8. For each successive calendar year that the quantitative restriction imposed under paragraph 6 remains in effect, the Party imposing it shall:
(a) increase by 6 percent restrictions on cotton, man-made fiber and non-cotton vegetable fiber textile and apparel goods and by 2 percent restrictions on wool textile and apparel goods;
(b) accelerate the growth rate for quantitative restrictions on cotton, man-made fiber and non-cotton vegetable fiber textile and apparel goods if required by any successor agreement to the Multifiber Arrangement; and
(c) apply the flexibility provisions set forth in Appendix 3.1, as appropriate.
9. Quantitative restrictions established pursuant to paragraph 6 before July 1 in any given calendar year may remain in place for the initial prorated period in the first calendar year, plus two additional calendar years. Such restrictions established on or after July 1 in any given calendar year may remain in place for the initial prorated period plus three additional calendar years.
10. No Party may take an emergency action under this Section with respect to any textile or apparel non-originating good that is already subject to a quantitative restriction.
11. No party may adopt or maintain a quantitative restriction under this Section on a textile or apparel good if that good has been integrated into the GATT as a result of commitments undertaken by that Party pursuant to any successor agreement to the Multifiber Arrangement.
12. A Party may take a bilateral emergency action after the expiration of the transition period to deal with cases of serious damage to domestic industry arising from the operation of this Agreement only with the consent of the Party against whose good the action would be taken.
Section 6: Special Provisions
A Party shall treat the textile or apparel goods of another Party set out in Appendix 6.0 in accordance with the provisions therein.
Section 7: Review