EU Trade Policy high on the EU agenda in Brussels
Big hope is placed on EU Trade policy for delivering on growth, jobs and prosperity for the Member States. All eyes are now on the new European Commission, expected to take office in December 2019. While not all EU Commissioners are yet confirmed, Phil Hogan, an Irishman, outgoing Agriculture Commissioner and the EU’s next Trade Commissioner, was one of the first to obtain the European Parliament’s approval. Speaking to the European Parliament in Brussels, he delivered a message that fighting against unfair imports will be a major task during his five-year mandate. The Commission will fight on behalf of the Member States to ensure not only protection for local industry, but also of European values and high environmental standards.
So how companies based in the European Union, big, medium or small, can benefit from EU Trade policy? This article will address specific topic of trade defence instruments (“TDI”).
So what are trade defence instruments?
The World Trade Organisation sets a legal framework for the use of TDI. The multilateral trading system allows three main types of TDI:
- Anti-dumping measures
- Countervailing measures
- Safeguard measures
Each of these instruments is designed to address various import practice. Anti-dumping measures protect the local industry against competing products imported in the Member States at an unfairly low price. Countervailing measures are put in place against imports to offset subsidies granted by a foreign government or a public body to a foreign manufacturer of competing products sold to the EU. Safeguard measures provide a temporarily relief against unforeseen, sharp and sudden increase of competing imports in the form of an EU tariff measure shielding a local industry in difficulty.
Why TDI can be important for the companies based in the European Union?
The use and relevance of TDI instruments will largely depend on whether a company is a manufacturer of products or services. TDI for services are not yet approved by the WTO system, and are currently debated in Brussels. Companies based in the EU can weigh in and join the debate. In any case, it is useful for a company trading in products to be aware of the existing TDI in order to be able to defend its interests:
– EU company exporting its goods to third markets will be able to adapt its commercial strategy to avoid its products being targeted with foreign TDI on access to those markets;
– EU company facing unfair competition in the EU from imported competing products can complain to the European Commission and trigger the use TDI to restore a level-playing field;
– EU importer/buyer negatively affected by TDI will be able to deliver its views to the European Commission, often missing in the process whether or not to impose TDI.
Recently, the EU made anti-dumping rules more effective and accessible, and increased the use of countervailing measures, notably against imports from China. The new Trade Policy also made a commitment to protect high environmental and social standards.
What are the main steps for imposition of TDI in the EU?
EU manufacturers may lodge a complaint to the European Commission requesting to impose measures. The complaint must contain evidence on price dumping or subsidies or, in the case of safeguards, on sudden increase of imports. In addition, the complaint must show harm to EU industry, and a causal link. A complaint can be made about any imported product, whether high-value or low value added. The Commission begins an investigation, which requires active cooperation. Should the investigation confirm the complaint, measures are imposed.
The European Commission has created a dedicated TDI Helpdesk in order to help small and medium sized enterprises have easier access to the instruments (https://ec.europa.eu/trade/policy/accessing-markets/trade-defence/actions-against-imports-into-the-eu/help-for-smes/).
Senior Associate, Brussels
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Maria Krestiyanova is a senior associate in Dentons’ Brussels office. She specialises in advising on international trade, customs law and WTO, with particular emphasis on trade defence instruments. She has vast experience in dealing with anti-dumping, anti-subsidy and safeguard investigations in the EU, Eurasian Economic Union and other jurisdictions worldwide. She assists clients in choosing the best strategy from both a legal and business point of view by analysing and auditing the sales, financial and cost accounting data. She has experience in representing clients in various industry sectors, the main ones being steel and aluminium, but also chemical and automotive. Maria regularly assists various multinational groups with matters pertaining to customs and other related matters. Maria is admitted in the Brussels Bar (A-List) since 2011.
+32 2 552 29 04
Bogdan Evtimov is a partner in Dentons` Brussels office. He has worked extensively in international trade and WTO law in leading global and EU practices in Brussels since 2001. Bogdan is recognised as one of the leading trade lawyers in the EU and worldwide (Chambers Global, Chambers Europe, Legal 500, Who`s Who Legal, Best Lawyers). He has specific knowledge and expertise in the interface between EU law and international trade, specifically competition and trade laws. Bogdan has gained deep knowledge of the WTO agreements through extensive involvement over a number of years in the context of WTO accession negotiations. Bogdan is admitted in Sofia, Bulgaria and in the Brussels Bar (E-List), and is a seasoned EU litigator with solid experience in trade defence litigation.