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The European Commission has published a detailed proposal aimed at updating the EU’s trade defence instruments – the rules for dealing with alleged unfair competition from dumped and subsidised imports.
The proposed changes follow eighteen months “reflection” and a public consultation. The Commission says they would make the EU trade defence work better for all stakeholders, including both EU producers and importers. “Anti-dumping and anti-subsidy instruments will be more efficient and better enforced to shield EU producers from unfair practices of foreign firms and from any risk of retaliation. At the same time, importers will enjoy greater predictability in terms of changing duty rates, which will make their business planning easier. The entire system will become more transparent and user-friendly.”
“This is a balanced package with real improvements for all stakeholders affected by trade defence duties – producers, importers and users,” said EU Trade Commissioner Karel De Gucht. “We want to equip EU businesses better to tackle unfair trade practices abroad, while not negatively affecting EU consumers or companies that rely on imports.”
According to the legislative proposal the Commission will:
• Improve the predictability for businesses by informing them about any provisional anti-dumping or anti-subsidy measures two weeks before the duties are imposed.
• Offer importers reimbursement of duties collected during an expiry review if it concludes that there is no need to maintain the trade defence measures in place after five years.
• Protect the EU industry by initiating investigations on its own (“ex officio”), without an official request from industry, when a threat of retaliation exists.
• Discourage other 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 must be approved by the Council and the European Parliament and will probably not become law before 2014.
Additional non-legislative proposals will:
• Facilitate cooperation with firms and trade associations involved in investigations by extending certain deadlines during the investigations.
• Improve monitoring of trade flows.
• Allow ex-officio anti-circumvention investigations to ensure faster action against illegal evasion of measures.
In parallel, a DG Trade working paper sets out ‘draft guidelines’ in four particularly complex areas:
• 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.
• 'The Union interest test', i.e. the way the Commission determines whether a trade defence measure would serve the overall economic interests in the EU – including interests of the domestic industry concerned, importers, industries that use the imported product and, where relevant, consumers.
• Calculation of 'injury margin', which requires an examination of the volume and prices of dumped imports and their consequent impact on the EU industry.
• Choice of an 'analogue country', which is used to determine existence of dumping for products coming from a country without “market economy status”.
The draft procedural guidelines will be subject to a three-month public consultation ending 31st July 2013. Afterwards, the Commission says it will analyse received comments and adopt the final version to make it easier for EU companies and the general public to understand EU trade defence procedures.