The European Parliament voted by an overwhelming majority in Strasbourg on Wednesday 15 November to approve the new EU methodology for calculating anti-dumping duties, which is based on an assessment of market distortions in third countries where state interference in the economy is significant.
Parliament voted by 554 to 48, with 80 abstentions, to approve the inter-institutional agreement reached on 3 October between its negotiators, led by rapporteur Salvatore Cicu (EPP, Italy), and those of the Estonian Presidency of the Council of the EU and the European Commission (see EUROPE 11875).
The new methodology is neutral towards third countries and fully complies with the EU’s obligations towards the WTO by removing the previous distinction made between market economies and non-market economies in anti-dumping calculations – it seeks in particular to resolve the question of how to treat China in EU anti-dumping investigations following the expiry, in December 2016, of provisions on this issue contained in China’s WTO accession protocol (see EUROPE 11780).
The Commission, rather, will have to prove that there is a significant market distortion between the sales price of a product and its production costs. On that basis, it will be permitted to set a price for the product through reference, for example, to the product price in a country with a similar level of economic development or relevant non-distorted international costs and prices.
The Commission will also draft country and sector specific reports detailing the distortions. In line with current practice, EU companies will have to lodge complaints but they will be able to use the Commission reports to substantiate their claims.
The new EU anti-dumping legislation will be the very first to take account of international labour and environment standards. In addition, Parliament has ensured that European companies will not have to bear any additional burden of proof in anti-dumping cases and that trade unions will be able to have an input.
The new rules will come into force after they are formally adopted by the Council and published in the Official Journal of the EU.
Effectiveness blunted without complete TDI overhaul. Beyond the general satisfaction of the adoption of this new methodology which, as Cicu noted, “will offer better protection for EU jobs and industry against subsidised, dumped products and allow Europe to shape globalisation and not the other way around”, MEPs felt that it will only be fully effective if the EU modernises its trade defence instruments (TDIs).
Expressing his pleasure that the Parliament’s demands (shifting the burden of proof onto Chinese operators, a broad definition of dumping taking account of wage distortions, social and environmental standards) having been taken into account, Emmanuel Maurel (S&D, France) suggested that “the positive impact of this text for industry on the ground will be linked to a breakthrough” on TDI modernisation plans, proposed in 2013, but on which inter-institutional talks are making little headway (see EUROPE 11900) because of countries like “Sweden, the Netherlands and Finland which are dragging the EU into a position of powerlessness”.
“This new methodology will help to better protect the EU economy by ensuring that European businesses do not have to suffer any additional burden. We need a new methodology, one that is robust with regard to WTO obligations, to assess the distortions in the third countries. But modernising TDIs is a job that remains to be done and one that will require broader updates”, also warned Marietje Schaake (ALDE, Netherlands). (Original version in French by Emmanuel Hagry)