After three years of stall, an informal agreement between the Parliament and the Council was concluded on the modernization of the trade defence measures

7 December 2017, by Dimana Todorova

 

As a reminder, following a proposal of the European Commission in 2013, the EU is currently updating its 1995 trade defence law to counter unfair trade practices. The European Commission proposal to modernise the EU basic anti-dumping (AD) and anti-subsidy (AS) regulations included mainly the following modifications:

  • enhancing the transparency of the procedure by: (i) a pre-disclosure of the provisional AD/AS duties, including a two weeks in advance of imposition and an advance notice of non-imposition of provisional measures; (ii) duties will not be imposed during the two weeks of pre-disclosure; (iii) the issue of new guidelines on AD/AS procedures including on refund procedures;
  • introducing ex-officio investigations: (i) in the case where EU producers have received threats of retaliation, if they lodge an AD/AS complaint; (ii) in the case of anti-circumvention proceedings; (iii) for ex-officio producers for the imposition of AD/AS duties, the Commission wishes to impose an obligation to cooperate for Union producers;
  • changing the EU “WTO+” measures: the proposal suggests not applying the “lesser duty rule” in case of (i) structural raw material distortions; (ii) AS cases; (iii) anti-circumvention cases; as for the Union interest, the proposal suggests granting longer deadlines to all parties to register as interested parties and answer the questionnaire in order to account for SMEs difficulties in participating;
  • reimbursing duties collected during expiry reviews whenever the review ends with the removal of the duty and introducing systemic reviews whenever the Commission finds that Union producers have engaged in anti-competitive behaviour (such as the creation of cartels) which raises prices and therefore can distort injury findings;
  • introducing changes required by rulings of the CJEU or of the WTO Dispute Settlement Body.

The European Parliament adopted its negotiating mandate already in February 2014 and closed its first reading on 14 April 2014, but discussions on the Commission’s 2013 proposal were stalled for more than three years in the Council. In particular, more “free-trade” oriented EU Member States and/or those fearing possible retaliation have preferred staying with the current application of the legislation.

On 13 December 2016, on the basis of a compromise put together by the Slovak Presidency, Coreper agreed on the Council’s negotiating position giving a mandate to the Presidency to enter into trilogue negotiations with the European Parliament.

In its meeting on 28 February 2017, the European Parliament’s Committee on International Trade (INTA) voted in favour of opening inter-institutional negotiations, with a view to reaching an “early second reading agreement” (first reading in the Council and second reading in the Parliament).

The first trilogue meeting took place on 21 March 2017 when a working method (based on a list of topics rather than article by article) and a tentative timeline were agreed. The first trilogues focused on consensus issues. Future sessions concentrated on more controversial issues such as pre-disclosure and shipping clause.

On the last trilogue meeting on 5 December 2017, an informal agreement was finally concluded by the Parliament’s negotiating team and the EU ministers in Brussels.

The agreed measures target unfair trade practices from non-EU countries and complement the approved on 4 December, and expected to enter into force on 20 December 2017 anti-dumping rules focusing on third countries that interfere heavily in the economy. Thus, the European Commission skillfully circumvented the obstacle on China’s market economy status as the new regulation would use the same anti-dumping methodology for all WTO members, regardless of the fact if a market economy status had been granted or not.

The main aspects of the modernization are:

  • a stricter interpretation of the so-called lesser-duty rule, which allows authorities to impose which allows the authorities to impose more moderate tariffs, based on the injury suffered by the complaining companies rather than on the objective level of dumping if that is deemed sufficient to remove injury caused by unfair imports;
  • a minimum profit target for European businesses would be included into the calculation of duties;
  • costs for EU industry resulting from international and environmental agreements would be reflected in the calculation of the duties;
  • investigations into anti-dumping cases would be significantly shorter;
  • an SMEs help-desk would deal with complaints and investigative proceedings; all products arriving into the EU between an investigation being notified and its actual start would be strictly monitored and registered to avoid stockpiling;
  • continental shelves and economic exclusive zones (sea zones, mainly used for energy production) would from now on be also covered by the European legislation.

The deal needs to be approved by the Parliament’s International Trade Committee and the Parliament itself along with Member States, before it can enter into force.