Stronger and more effective rules enter into force
The changes coming into force tomorrow, aimed at modernising the EU’s trade defence toolbox,enable the EU to impose higher duties in some cases by changing the ‘lesser duty rule’; shorten the investigation period to accelerate the procedure; increase transparency and predictability of the system for EU firms; and reflect the high environmental and social standards applied in the EU. They conclude a major overhaul of the EU’s trade defence instruments, including also a new anti-dumping methodology put in place in December of last year.
President of the European Commission Jean-Claude Juncker said: “The EU believes in open and fair trade but we are not naïve free traders. We have shown our teeth when we had to by adopting anti-dumping and anti-subsidy measures. And now we have new and improved trade defence rules in our arsenal to face down some of today’s challenges in global trade. Make no mistake – we will do whatever it takes to defend European producers and workers when others distort the market or don’t play by the rules.”
Trade Commissioner Cecilia Malmström said: “Finally, this long-awaited reform can be rolled out and put into action. European companies have been looking for a modern set of rules. I am very confident that this provides us with the necessary tools to efficiently defend our industries from unfair trade practices. We believe in open, rules-based trade. Now, we are better equipped to stand up for our companies if other countries don’t stick to the rules.”
The new rules will shorten the current 9 month investigation period to 7 months for the imposition of provisional measures and make the system more transparent. Companies will benefit from an early warning system telling them if provisional duties will be imposed, which will help them adapt to the new situation. The Commission will support smaller and medium-sized companies (SMEs) via its specific “SME helpdesk” to make it easier for them to participate in trade defence proceedings.
Also, as a result of changes to the so-called ‘lesser duty rule’, in some cases, the EU may be able to impose higher duties. This will apply to all anti-subsidy cases, as well as antidumping cases concerning imports produced using raw materials and energy provided at an artificially low price.
As part of its investigations, the Commission will also take into account the costs of compliance with EU social and environmental legislation when calculating the levels of duties it can impose based on economic damage caused to companies. Furthermore, it will also not accept price undertakings, in general, from countries that have a bad record on implementing core International Labour Organisation standards and environmental agreements. For the first time, trade unions will also be able to participate in trade defence investigations.
Together with the new anti-dumping methodology, already in force, this is the first major overhaul of the EU’s anti-dumping and anti-subsidy instruments in 15 years. It is the result of almost five years of work, including broad consultations with multiple stakeholders and negotiations with the European Parliament and the Council.
The Commission first proposed a reform of the EU’s trade defence instruments in 2013. The Council reached a compromise in December of 2016. After a political agreement was found between the EU institutions in December of 2017, the Council endorsed the compromise in April of 2018. Following the final endorsement of the new rules by the European Parliament, the new legislation will now enter into force on 8 June.
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