Brussels, 10/04/2013 (Agence Europe) - The European Commission has unveiled its plan to review the EU's trade defence instruments. It is a pragmatic and balanced plan, benefitting all stakeholders.
On Wednesday 10 April, the Commission unveiled its proposal to modernise EU rules on fighting against unfair competition from dumped or subsidised imports from a third country. The Commission wants to adapt these rules to the challenges of current trade reality.
The plan is “pragmatic and balanced”, promises European Commissioner for Trade Karel De Gucht. The proposed changes would improve the way EU trade defence works, benefitting all stakeholders - including producers, importers and consumers. The idea is that the instruments should be more effective and their implementation improved - both to protect European producers against the unfair practices of third countries and any risk of retaliation, and to guarantee importers increased predictability as regards changing duty rates.
According to the terms of the legislative proposal, the Commission wants to improve predictability for businesses by informing them about any provisional anti-dumping or anti-subsidy measures two weeks before the duties are imposed. The Commission will offer importers reimbursement of duties collected during an expiry review if the Commission concludes that there is no need to maintain the trade defence measures in place after five years. The Commission also wants to protect the EU industry by initiating investigations on its own (ex officio) without any official request from industry, when a threat of retaliation exists. Lastly, the Commission wants to discourage other EU trading partners from engaging in certain unfair trading practices by imposing higher duties on imports from countries which use unfair subsidies and create structural distortions in their raw material markets. In such cases, the EU would deviate from its general “lesser duty” rule that keeps the additional tariff within the limit of what is strictly necessary to prevent an injury for an EU industry. The legislative proposal - which must be approved by the European Council and European Parliament - would probably not enter into force before 2014.
The Commission is also tabling additional non-legislative proposals to facilitate cooperation with firms and trade associations involved in investigations (by extending certain deadlines during the investigations), to improve the monitoring of trade flows, and to allow the automatic opening of anti-circumventions investigations.
In parallel, DG Trade has developed a working paper setting out draft guidelines in four particularly complex areas of trade defence. Firstly, the expiry review of a trade defence measure, which is an investigation at the end of the usual five-year application of duties to determine if dumping and injury are likely to continue or recur if measures expire. Secondly, the EU interest test - in other words, the way the Commission determines whether a trade defence measure would serve the overall economic interests of the EU (including interests of the European domestic industry concerned, importers, industries that use the imported product and, where relevant, consumers). Thirdly, the calculation of an injury margin, which requires an examination of the volume and prices of dumped imports and their consequent impact on the EU industry. And finally, the choice of an analogue country, which is used to determine the existence of dumping for products coming from a country without market economy status. These draft procedural guidelines will be subject to a consultation with stakeholders, ahead of a final version to make it easier for companies and the general public to understand EU trade defence procedures.
De Gucht will thus try to achieve success in a minefield where his predecessor, Peter Mandelson, failed in 2008. The last review of the trade defence arsenal dates back to 1995. “Lord Mandelson's plan was a recast of the existing legislation. This is not the case with me. I am proposing a number of amendments that better reflect current trade reality. The approach is different too. Lord Mandelson wanted to streamline trade defence instruments - he wanted to liberalise as much as possible. What I'm doing is signing up to the current philosophy of these instruments. I believe it's important to have them, but we need to adapt them”, De Gucht told EUROPE on Wednesday (our translation).
In accordance with WTO rules, the EU's trade defence arsenal comprises three instruments enabling a response to a sudden flood of imports due to unfair practices by third countries - anti-dumping measures, anti-subsidy measures and safeguard measures. At the end of 2012, 102 anti-dumping measures and 10 anti-subsidy measures introduced by the EU were in force, and 19 anti-dumping investigations and 6 anti-subsidy measures of the EU were ongoing. Trade defence measures impact around 0.25% of EU imports. (EH/transl.fl)