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EU strengthens its defence against unfair trading

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EU strengthens its defence against unfair trading

Benxi Steel Industries - Photo by Andreas Habich

(BRUSSELS) - European Union states agreed Tuesday on a proposal to modernise the EU's trade defence instruments, with a view to shielding EU producers from damage caused by unfair competition.

The proposed regulation amends current anti-dumping and anti-subsidies regulations to better respond to unfair trade practices, and furnishes Europe's trade defence instruments with more transparency, faster procedures and more effective enforcement.

In exceptional cases such as in the presence of distortions in the cost of raw materials, it will enable the EU to impose higher duties through the limited suspension of the so-called lesser duty rule.

"This is a major breakthrough," said Slovakia's Trade Minister Peter Ziga, for the EU presidency. He said Europe could not be naïve and needed to to defend its interests, especially in case of dumping: "Our trade defence instruments have remained largely the same for over 15 years but the situation on world markets has changed dramatically."

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.

The agreement was welcomed by the European Commission, whose Trade Commissioner Cecilia Malmstroem said: "The EU stands for free, rules-based trade and we must be able to address unfair subsidies and dumping with determination.

This is the first fundamental review of the EU's trade defence instruments since 1995.

Commission Communication 'Towards a robust trade policy for the EU in the interest of jobs and growth'

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