European Council adopts its position on a new legal framework against unfair trade competition

The European Council adopted yesterday, April 16, its position on the regulation modernising the EU’s trade defence instruments, following the political agreement reached with the EP in December 2017. This step clears the way for the final adoption of the text by the Parliament in the coming weeks.

The regulation amends the existing legal framework which allows higher tariffs to be imposed on dumped or subsidised imports in order to improve the protection of EU producers from damage caused by unfair competition. The new regulation makes EU trade defence instruments more predictable, transparent and accessible, in particular for small and medium-sized enterprises (SMEs).

“The adoption of these new trade defence instruments is particularly timely. In the face of protectionist pressures and growing threats to the values and principles of the rules-based trading system, it is all the more important for the EU to have the right tools, whilst at the same time supporting free and fair trade.” said Emil Karanikolov, the minister responsible for trade matters of Bulgaria, which currently holds the Council presidency

Objectives

The proposed regulation will:

– Increase the transparency and predictability of provisional anti-dumping and anti-subsidy measures. This includes a pre-disclosure period of three weeks after the information is made public during which provisional duties will not be applied, as well as additional safety nets related to stockpiling.

– Enable investigations to be launched without an official request from industry when there is a threat of retaliation by third countries.

– Enable trade unions to submit complaints together with industry and to become interested parties in the proceedings.

– Reduce the normal investigation period to a period of 7 months, with a maximum period of 8 months. Definitive duties will have to be imposed within 14 months.

– Enable higher duties to be imposed where there are raw material distortions and where these raw materials, including energy, account individually for more than 17% of receipts. This would allow for the level of duties imposed under the “lesser duty rule” to be adapted if it is in the interest of the EU. The imposition of higher duties will include a target profit set at a minimum of 6%.

– Enable importers to be reimbursed of duties collected during an expiry review investigation in cases where trade defence measures not being upheld.

– Take into account social and environmental standards when assessing the acceptability of an undertaking and when establishing the injury elimination margin.

The Council’s position was adopted by a qualified majority, with Ireland abstaining and Sweden and UK voting against. The European Parliament is now expected to vote in plenary on the final text of the regulation, thereby completing the legislative procedure in second reading. The formal signature of the regulation is foreseen in Strasbourg in late May. The regulation should be published in the Official Journal shortly thereafter.

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