Malmstroem – Katainen- Photo EC
(BRUSSELS) – The Commission proposed Wednesday changes to the EU’s anti-dumping and anti-subsidy legislation to deal with over-capacity and a changing international legal framework.
The proposal is for a new method for calculating dumping on imports from countries where there are significant market distortions, or where the state has a pervasive influence on the economy.
Its purpose, says the EU executive, is to make sure that Europe has trade defence instruments that are able to deal with current realities notably overcapacities in the international trading environment, while fully respecting the EU’s international obligations in the legal framework of the World Trade Organisation (WTO).
Market distortions in certain countries can lead to industrial overcapacity, encouraging exporters to dump their products on the EU market. This causes damage to European industries, says the Commission, which ultimately can result in job losses and factory closures, as has been the case recently in the EU steel sector.
The EU wants to ensure that its trade defence instruments (TDIs) remain effective in dealing with the distortions.
Brussels’ new anti-dumping methodology would apply to cases initiated once the amended rules are in force. The proposal also includes a transition period during which all anti-dumping measures currently in place as well as ongoing investigations would remain subject to the existing legislation.
The Commission has also proposed a strengthening of the EU anti-subsidy legislation so that in future cases, any new subsidies revealed in the course of an investigation can also be investigated and included in the final duties imposed.
“More than 30 million jobs in Europe, including 6 million jobs in SMEs, depend on free and fair trade which remains at the heart of EU strategy for jobs and growth,” said Competitiveness Commissioner Jyrki Katainen.
Trade Commissioner Cecilia Malmstroem said the proposal was important because it means that the EU is living up to its WTO commitments: “This method is country neutral and does not grant ‘market economy status’ to any country”, she said. “The proposal, once adopted by the European Parliament and the Council, will ensure that the EU’s Trade Defence Instruments are adapted to face new challenges as well as our legal and economic realities. We also maintain an equivalent level of protection.”
Under current rules, in normal market circumstances dumping is calculated by comparing the export price of a product to the EU with the domestic prices or costs of the product in the exporting country. This approach will be kept and complemented by the new methodology that will be country-neutral. It will apply the same way to all WTO members and will take into account significant distortions in certain countries, due to state influence in the economy. WTO members will no longer be part of a list of countries subject to the so called “analogue country” methodology. This approach will be reserved for non-market economy countries that are not members of the WTO.
In determining distortions, several criteria will be considered, such as state policies and influence, the widespread presence of state-owned enterprises, discrimination in favour of domestic companies and the independence of the financial sector. The Commission says it will draft specific reports for countries or sectors where it will identify distortions. As is the case today, it will be for the EU industry to file complaints, but they can rely on such reports by the Commission to make their case.
Factsheet: Commission proposes changes to the EU’s anti-dumping and anti-subsidy legislation
