Reform to counter unfair trade

Source: A.C. (Cecilia) Malmström i, published on Wednesday, July 20 2016.

Today, the College held an orientation debate on reforming our trade defences to make sure we keep protecting Europe's industry from unfair trading practices.

We focused on the overall challenges facing our trade defences: how do we make sure that Europe has the anti-dumping and anti-subsidy instruments necessary to deal with the current reality in the international trading environment, namely with important market distortions in certain countries, where the State continues to have a pervasive influence in the economy. Watch my press conference with Commission Vice-President Jyrki Katainen following the debate here.

The issue is on the table because some provisions of China's Protocol of Accession to the World Trade Organisation (WTO) that influence the way dumping is calculated will expire in December. We must respect our obligations under WTO.

Today's discussion follows up on a first debate held by the College in January. Since then, an in-depth impact assessment was conducted to measure the consequences of possible changes.

A public consultation was also carried out, which delivered more than 5.000 replies. Member States, industry representatives, trade unions and different stakeholders took an active role in these sometimes passionatediscussions during the last months. The European parliament adopted on 12 May a resolution calling on the Commission to take action.

Taking all this into account and as a result of today's discussion, the Commission will act: the College has agreed to propose changes to the EU's anti-dumping and anti-subsidy legislation with the introduction of a new anti-dumping methodology to capture market distortions, linked to state intervention in third countries.

Today, EU legislation singles out China, and a few other countries, as "non-market economies" and that means that we automatically use prices in analogue countries as comparison when we calculate anti-dumping duties.

We now propose to delete that list and stop calling China a non-market economy. But this does not mean that it is a market economy. China clearly is far from functioning as a market economy.

By deleting the list we make our legislationcountry-neutral, applying equally to all WTO countries.

With this proposal, we create an additionalnew non-standard methodology that takes into account distortions provoked by State intervention, in a given country or sector. The new methodology would lead toapproximately the same level of anti-dumping duties as today.

The future proposal will include a transition period during which all of the existing anti-dumping and anti-subsidy measures would be kept in place, and ongoing investigations would be carried out according to the rules under which they were launched(grandfathering).

When it comes to the anti-subsidy part of our legislation, the Commission also intends to propose a further strengthening so that in future cases, any new subsidies revealed in the course of an investigation can also be included in the final duties imposed.

Our proposal is the option most likely to both safeguard our economic interest and protect European jobs. It is the best option, allowing us to maintain the current level of protection, keep a strong trade defence system and fulfil our WTO commitments.

I expect our proposal to be well received by EU Member States, the European Parliament and also among industry and workers.

In the meantime, I take the opportunity to also call on Member States to move swiftly in the adoption of the proposal table by the Commission in 2013 to modernise and strengthen the EU's trade defence instruments.It would complement the new methodology,speed up anti-dumping and anti-subsidy procedures and would allow us to imposehigher duties in certain circumstances.

International trade allows us to seize the opportunities the global economy offers to create jobs and pursue further economic growth. But trade must be fair and respect the rules. Where it is not fair, it must be dealt with. This is why the European Commission is committed to protect EU industries and jobs exposed to unfair trading practices, like dumping and illegal subsidies.

Today's agreement in College will now be translated into a legislative proposal with a view of its adoption by the Commission and will then be transmitted to the European Parliament and the Council as part of the ordinary legislation procedure.