AEGIS Europe New Advocacy Campaign: Top 5 Priorities for #FairTradeNow
/In a fiercely competitive global market, Europe’s manufacturing sectors face growing pressure from unfair trade practices. Overcapacities in many sectors and in many countries, as well as imports that disregard EU environmental and social standards, create an uneven playing field, leaving European industries at a disadvantage.
The Draghi Report has highlighted the urgent need for a resilient and competitive European industry that aligns with Europe’s strategic interests. The Report highlighted the gaps in the EU’s current trade defence mechanisms that need to be addressed. We need flesh on the Draghi bones. Market performance indicators reveal a decline in competitiveness in 2023 compared to 2012. This is evident in reduced production across sectors such as steel, silicon, ferroalloys, aluminium, and paper & board.
Additionally, exports have dropped significantly in sectors like finished steel, man-made fibres, and paper & board. Increased energy prices also play a role, but the real problem is the dumping of excess capacities on the open EU market and the need for new approaches to deal with industrial subsidies in addressing these overcapacities. Fairness in access to public procurement markets and in the imports of procured goods into the EU should also be enhanced. For EU public procurement, this includes enforcing best value award criteria, fostering EU content and restricting participation and access to EU funds when it comes to foreign bidders with which the EU has no agreement on procurement.
We are losing manufacturing jobs at an alarming rate. In AEGIS Europe sectors alone, approximately 34,000 direct jobs have been lost compared to the pre-COVID period. Considering that each direct job loss triggers 3-4 indirect job losses, this amounts to around 100,000 total jobs lost. Since the 2008-2009 financial crisis, the situation has worsened, with 2.5 million industrial jobs disappearing and numerous plants across Europe shutting down.
A new wave of closures rolls out on the EU, mainly in the automotive sector and the energy intensive industries, but also in the green tech sector like batteries. These closures are situated in all parts of the EU. AEGIS Europe strongly believes that effective trade defence is needed to ensure the future of the EU manufacturing. Unfair trade must be stopped to allow the EU to remain open to fair trade and create and maintain a skilled and dynamic workforce.
We have five actionable priorities to strengthen the EU’s trade defence toolbox. These priorities call for a more assertive trade defence stance, effective anti-circumvention measures, and policies that ensure support for all segments of European industry, including small and medium enterprises (SMEs).
Stronger Use of Trade Defence Tools to Protect EU Manufacturing The EU is a modest user of trade defence when adjusted for the size of our economy. The anti dumping and anti-subsidy measures we impose are way below other OECD countries (mainly but not exclusively US). For example, in 2023, the EU’s anti-dumping duty on Chinese silicon was set at 16.8%, while the US imposed a 139% duty, and Canada set a duty ranging from 47%-235%. This difference makes our trade defence ineffective.
EU duties can be higher within the existing rules ·Environmental and Social Costs: Duties should incorporate differences in environmental and social standards; otherwise, imports that fail to meet EU standards gain an unfair advantage. Re-evaluate the Lesser Duty Rule (LDR): Currently, the EU often applies a “lesser duty” rather than the full anti-dumping duty to reduce consumer impact. However, in many cases, these reduced duties don’t adequately protect EU industries, particularly when large import volumes are involved. Since 2016, the LDR has only been waived twice out of 13 requests from industry, even though full duties are often needed to address injury to EU manufacturers. This rule should only apply when it genuinely benefits EU interests. Consider Import Volume in Injury Calculations: Import volumes should be factored into the injury margin calculations to fully capture the scale of market impact, particularly as EU manufacturers face increased competition from overcapacities abroad.
Enhanced Anti-Circumvention Measures Where duties are bypassed through circumvention methods like re-routing, re-formulating and switching manufacturing, trade defence measures are undermined. Strengthening monitoring, increasing transparency, and enabling data-sharing between EU agencies (such as DG Trade, OLAF and the EPPO) should help identify and counter these practices effectively.
Support for SMEs in Trade Defence Participation SMEs face substantial barriers in engaging in trade investigations due to complex reporting requirements and deadlines. Simplified procedures and flexible timelines would enable them to participate more effectively, making it easier for them to defend against unfair trade practices.
Ensure Trade Agreements Support Europe’s Strategic Raw Materials Needs The EU’s Free Trade Agreements (FTAs) should prioritise Europe’s critical raw materials supply chain, in line with the goals of the Critical Raw Materials Act. Current FTA negotiations must carefully balance the need for reliable supply with the protection of EU industries already facing unfair competition. This means: Tailoring Tariff Liberalisation: Avoid unnecessary tariff reductions for critical raw materials, like aluminium, where EU industries are vulnerable to overcapacity and unsustainable production practices in exporting countries. Promoting Fair Competition and High Standards: FTAs should enforce strict Rules of Origin and include sustainability clauses that align with EU standards. This ensures fair conditions for EU companies and helps meet Europe’s environmental and social commitments