JULY 2014
more importance, in particular because they are politically better accepted, especially by those Member States that view anti-dumping duties critically. Safeguards, on the other hand, are irrelevant in practice.
The EU rules and practices regarding the imposition of anti-dumping or countervailing duties correspond to the respective WTO rules, but also contain some so-called “WTO plus” elements. This means that they make the imposition of duties subject to conditions that are not required by the WTO rules. Most importantly, the EU applies a lesser duty rule, meaning that the duty will be less than the dumping or subsidy margin if such lesser duty is sufficient to remove the injury caused by the dumped or subsidised imports. The EU also applies a “Union interest” test and will impose duties only if their imposition is not clearly against the Union interest, including, in particular the interest of consumers or users of the product under investigation. In its report on the Commission’s proposal on a modernisation of the trade remedies, the outgoing European Parliament suggested earlier this year to do away with the lesser duty rule in certain circumstances. I believe this is a bad idea, because the lesser duty rule provides legitimacy to the imposition of the duties. On the other hand, I view the Union interest test rather critically because it opens a Pandora’s box for political arguments. I also think there are no good reasons not to protect an EU industry that suffers from injurious dumping or subsidies, even if such protection may have negative ramifications for other economic operators in the EU.
Earlier this year, the EU introduced important changes to the decision making process for imposing anti-dumping or countervailing duties. Under the old rules, the Member States exercised great influence because the Council formally adopted definitive measures and Members States could block the imposition by a simple majority. Under the new rules, the duties are imposed by the Commission and the influence of the Member States is significantly reduced. I think that this is a good idea because the Commission carries out the investigation and therefore should also be the institution imposing definitive measures. I also hope that under the new rules the entire process will be less political. Indeed, it is an open secret that under the old system some Member States voted regularly on the basis of political considerations rather than the merits of the Commission’s findings. This also resulted in heavy lobbing at the Member State level by both exporters and the governments of the countries under investigation, and the EU industries. I expect that we will see less of that in the future, but there may now be more lobbying at the Commission level, in particular with DGs other than DG Trade.
It will be interesting to see whether, and if yes how, the new Commissioner for Trade (a re- appointment of Mr De Gucht seems unlikely) and the newly elected European Parliament will pick up the Commission’s proposal for a modernisation of the EU trade defence instruments. The amendments that the outgoing Parliament had adopted earlier this year are simply unacceptable for the Commission and the Member States. So we have to see whether the new Parliament will see things differently and how.
How important are inter-country trade agreements to the economic health of the world?
I believe they can make an important contribution to growth and economic well-being in both developed and developing economies. However, as the current debate in many European countries on the TTIP negotiations shows, those who support the agreements must take the concerns of the people seriously. The negotiations must be transparent, and the decision makers must explain, in clear and easy to understand language, the benefits and side effects of the agreements. In particular, I believe that it is not sufficient to simply refer to the likely dollar value of an agreement or the jobs that may be created. One has to explain why the agreement will not result in a lowering of, for example, health and safety standards that people consider important, but instead will eliminate barriers to trade that add only costs but provide no benefit. In particular with TTIP, this will be difficult, and I am not very optimistic that we will see an agreement that will provide for meaningful trade liberalisation and find broad political support. LM
Contact:
Georg M. Berrisch Baker Botts
Square de Meeûs, 23-Box 11 Brussels B-1000 Belgium
Tel: +32.2.891.7340 Fax: +32.2.891.7400
Email:
georg.berrisch@
bakerbotts.com
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