Brussels, 10/05/2012 (Agence Europe) - Trade Commissioner Karel De Gucht wants to stiffen the EU's ability to respond to unfair competition and the rise of state capitalism in emerging economies.
“The world has changed considerably” since the EU last “substantially” updated its trade defence rules in 1995, with the “rise in state capitalism”, apparent in China, Russia, Vietnam and other emerging economies, De Gucht said at a conference on modernising trade defence instruments in Brussels on Thursday 10 May.
The impact of the increase in the state capitalism of emerging countries is twofold for EU trade defence: on the one hand it implies that governmental policies could be used to give an unwarranted competitive advantage to a national company - from cheap finance to cheap raw materials; and on the other, it raises the issue of “retaliation”. “It is undeniable that many European companies are unwilling to come forward and make justified trade defence complaints due to fear of consequences for their business”, the commissioner said, stating that “the consequences can be serious for companies that export to or invest in the country in question”. De Gucht also suggested that the Commission could step in and “launch cases on its own initiative” instead of the companies affected in order to protect them. He remained cautious, nevertheless, arguing that trade defence must not “fall into the trap” of protectionism.
In April, the European Commission launched a consultation on the EU's 16-year old trade defence strategy. With his proposals in 2012, De Gucht will try successfully to negotiate the minefield where his predecessor Peter Mandelson failed in 2008. The Commission plans to unveil its reform proposals in the autumn.
In line with WTO rules, the EU trade defence arsenal comprises three instruments allowing action to be taken on a sudden increase in imports resulting from unfair competition by third countries: antidumping measures, anti-subsidy measures and safeguard measures. (EH/transl.rt)