Brussels, 11/05/2012 (Agence Europe) - Trade Commissioner Karel De Gucht wants to make the EU's arsenal of trade defence measures more effective against unfair competition and the rise of state capitalism in emerging economies, and puts forward a number of suggestions for possible consideration in the public consultation launched in April.
“The world has changed considerably” since the EU last “substantially” updated its trade defence rules in 1995, firstly, with the integration of the global economy - global trade represented 36% of the world's GDP in 2010 - and, secondly, with the “rise in state capitalism”, apparent in China, Russia, Vietnam and other emerging economies, De Gucht said at a conference on 10 May on modernising trade defence instruments in Brussels.
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” when these companies try to export to, or invest in, the countries in question, the commissioner said.
The Commission launched a public consultation on the EU's trade defence strategy that has seen no significant revision for 16 years. De Gucht, who is looking to bring forward his proposals for reform in the autumn, set out a number of avenues to be explored by the debate: - enhancing the transparency and predictability of the system. The Commission could for example, inform interested parties better about its proposals for provisional duties, or bring in some more predictability for traders whose goods are already on their way to Europe when provisional duty proposals are made, the commissioner suggested; - addressing threats of retaliation. The Commission could launch complaints on its own initiative, rather than the companies affected having to do so, in order to offer these companies greater protection. “Under such an ex officio procedure, no government could blame a European company for the launch of the case. The flipside, of course, is that we would need tough rules to oblige reticent companies to cooperate with us”, De Gucht reasoned; - improving effectiveness and enforcement. The EU could apply a higher rate of duty to penalise fraud, circumvention or subsidies, he suggests; - encouraging more companies to cooperate. The Commission could modify the deadlines for industrial consumers of affected products, simplify refund procedures or improve its helpdesk for small and medium sized companies; - improving reviews of anti-dumping or anti-subsidy measures already in place. A way should be found to reduce the costs to exporters of expiry reviews that fail, - ensuring the relevance of long-term anti-dumping duties (lasting 10 or even 15 years), many of which - though not all - may be justified by long-term structural features of the markets involved; - re-focusing the approach to the EU interest test, in an age of complex supply chains.
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)