Meeting in Brussels on Friday 11 November, the trade ministers of the EU took “a step further” towards an agreement on the planned modernisation of the trade defence instruments of the EU, tabled by the European Commission in April 2013 (see EUROPE 10824), the Slovak minister for the economy and President-in-exercise of the Council, Peter Ziga, summed up after the work session, expressing confidence that this agreement will be struck before the December European Council.
“We are very close to a compromise. I think that we achieved the qualified majority today, but we still want to provide an opportunity to explain the outstanding questions”, Ziga said, stating that the discussions would now resume at technical level, within the Council working group on trade questions.
“Our task is to reach an agreement before the European Council of December. Coreper (Ed: the committee of permanent representatives of the member states to the EU) will certainly arrive at a definitive version, to allow the Council to negotiate with the European Parliament (Ed: in trialogue)”, he added.
Although the matter of derogations to the lesser duty rule, which allows the EU to impose far higher rates of customs duty than permitted under the current rules (see EUROPE 11570), is the main sticking point, the lines are starting to move at the Council.
Led by an intransigent UK, which is keen to accommodate China, as it hopes to negotiate a bilateral trade agreement with the country once it has left the EU, a group of ten pro-free trade countries (UK along with Cyprus, Denmark, Estonia, Finland, Ireland, Latvia, Malta, the Czech Republic and Sweden) remains opposed to the derogations to the lesser duty rule. However, they are not enough to constitute a blocking minority.
A group of thirteen countries (led by France and Germany, with Austria, Belgium, Bulgaria, Spain, Greece, Hungary, Lithuania, Luxembourg, Poland, Portugal and Slovenia) is in favour of the derogations to the lesser duty rule under very specific conditions.
This group may be joined by the countries still undecided, such as Croatia, the Netherlands and Romania, which are not ruling out the possibility of giving their agreement, subject to obtaining additional clarifications, both on the Commission’s original proposal and on the proposed compromise tabled by the Slovak Presidency. The Netherlands is in a positive frame of mind, Trade Minister Lilianne Ploumen confirmed.
Finally, Italy, which is keen to protect its industry and therefore finds the Slovak Presidency’s proposals not ambitious enough for its tastes, could play a decisive role in definitively securing the qualified majority in favour of this laborious legislative project, as long as it gains satisfaction.
The forthcoming technical discussions will cover the limits to the derogations to the lesser duty rule, which the Commission has proposed to limit to well-defined circumstances, such as cases of massive over-capacity and/or distortions of raw materials. “Various countries stated which sectors should be covered by cases of over-capacity. Certain countries wish to be sure that steel is covered”, a Community source told us. Ziga confirmed that the question of over-capacity is one of those still outstanding.
It is also worth noting that, on Friday, Germany suggested that the Council agree on the planned modernisation of EU trade defence instruments in the framework of a package including the proposed new anti-dumping calculation methodology tabled by the Commission on 9 November, to resolve the controversial issue of the treatment of China in EU anti-dumping investigations after various provisions of China’s accession protocol to the WTO expire in December of this year (see EUROPE 11664). (Original version in French by Emmanuel Hagry)