Brussels, 06/12/2006 (Agence Europe) - Wednesday's adoption of a Green Paper on trade defence instruments aimed at adjusting their use to the new requirements of a globalised economy after consultation with the parties concerned, and the submission of official requests for negotiating briefs on bilateral free trade agreements prove that the new strategy envisaged early October (EUROPE 9278-9279) by Trade Commissioner Peter Mandelson is now well underway.
Adjusting trade defence mechanisms to the requirements of globalisation
On Wednesday, the Commission published its Green Paper on trade defence instruments, the point of departure for far-reaching consultation with stakeholders - consumers, distributors and retailers, industry and Member States - that will have three months in which to take a stance on the way to best use the Community trade defence mechanism. Like all importing economies, the Union has an arsenal (since 1994) of different instruments compatible with WTO rules - antidumping measures, anti-subsidy measures and safeguard measures - that allow it to defend itself against unfair trade practices (dumping and subsidies) and against major trade distortion that harms its economy. Antidumping measures above all make it possible to curb massive price undercutting although “price competition alone does not always justify their use”, Mr Mandelson said. In 2005, the use by the Union of its trade defence instruments accounted for less than 0.5% of the value of Community imports, he noted.
With its Green Paper, the Commission is careful not to question the fundamental value of trade protection instruments, Mr Mandelson states, although the Commission does hope to give guidance as to the best way to use this mechanism. In other terms, in order not to lose the public's confidence and to restore the consensus between the EU25, which were deeply divided over the Chinese and Vietnamese footwear issue, the Commission does not plan to undertake in-depth reform of the Community trade defence mechanism but to consult stakeholders in order to adjust the mechanism to the demands of an ever-changing global economy. Over the past ten years, the European economy and world economy have been subject to major structural changes. Today, there are many European companies that produce goods outside the Union in order to import them back into the Community market later, and there are many who outsource certain stages in the production process or who operate with production chains abroad. “So it has become a very complex matter to determine what constitutes Community production or Community interest,” said Mr Mandelson. The criteria defining Community interest are those which justify triggering trade protection measures. The Commission then is calling for balance in the defence of the interests of the various Community economic players, domestic producers and their employees, producers who have relocated some of their production outside of the EU and their European employees, retailers and their employees and consumers.
Through 32 questions based on six topics for reflection (the role of trade protection instruments in the changing global economy, criteria for launching and conduct of trade protection investigations, weight of the EU's various interests in the investigations, the form and duration of the measures, transparency of the investigations and their institutional structure), the Commission is calling on stakeholders to have their say. It does, however, not shy away from suggesting relaxing the mechanism (for example by reducing the length of application of definitive measures, which currently is 5 years, or putting measures in place gradually) or from wondering about technical issues such as criteria for launching procedures, arrangements for calculating duties and the transparency of procedures. The Commission intends to present a communication with legislative proposals before the end of next year.
Singapore subjects and social and environmental standards on agenda for new generation FTAs
On Wednesday Mr Mandelson also submitted to the Council his requests for negotiating briefs for “new generation” bilateral free trade agreements (FTAs) with India, South Korea and ASEAN on the one hand, and Central America and the Andean Community on the other, through association agreements. As indicated yesterday (EUROPE 9321), Mr Mandelson hopes with these partners to be able to discuss, not only reductions in tariff and non-tariff obstacles, but also the Singapore subjects (investment, competition, public procurement and trade facilitation) along with social and environmental requirements. The 25 Member States will study the Commission's request at the start of 2007. Mr Mandelson, who intends to conclude these FTAs within two years, hopes to obtain the green light from the Council to begin negotiations right at the start of the second half of 2007. (eh)