International trade & customs Trade defence instruments: Council agrees negotiating position

On 13 December 2016, the Permanent Representatives Committee (Coreper) agreed on the Council’s negotiating position on a proposal to modernise the EU’s trade defence instruments.

“This is a major breakthrough,” said Peter Žiga, Slovakia’s minister in charge of trade and President of the Council. “Our trade defence instruments have remained largely the same for over 15 years but the situation on world markets has changed dramatically. Europe cannot be naïve and has to defend its interests, especially in case of dumping. This is a crucial step towards a solid solution that would help EU producers cope with unfair competition and practices.”

The proposed regulation amends current anti-dumping and anti-subsidies regulations to better respond to unfair trade practices. The purpose is to shield EU producers from damage caused by unfair competition, ensuring free and fair trade.

In particular, the proposed regulation sets out to:

• Increase transparency and predictability as concerns the imposition of provisional anti-dumping and anti-subsidy measures. This includes a period of four weeks after the information is made public in which provisional duties will not yet be applied.
• Enable investigations to be initiated without an official request from industry, when a threat of retaliation by third countries exists.
• Shorten the investigation period
• Enable higher duties to be imposed in cases where there are raw material distortions and these raw materials, including energy, account for more than 27% of the cost of production in total and more than 7% taken individually. This would allow for limited deviations from the EU “lesser duty rule” whereby duties must not be higher than what is necessary to prevent injury for an EU industry. The imposition of higher duties will based on a target profit and also be subject to a Union interest test.
• Enable importers to be reimbursed duties collected during an expiry review in the event of trade defence measures not being maintained.

This is the first fundamental review of the EU’s trade defence instruments since 1995. In April 2013, the Commission presented a proposal to modernise the existing instruments and make them work better for EU producers, importers and users. At its meeting on 20-21 October 2016, the European Council called for a balanced agreement on the Council position by the end of 2016.