AEGIS Europe calls for balanced FTAs to ensure fair competition and Industry Competitiveness

Download PDF

Brussels, April 2025. As the European Union is engaging in negotiations for the conclusion of several Free Trade Agreements (FTAs), AEGIS Europe emphasizes the need for an ambitious approach that prioritizes the European Industry’s strategic interests, based on the principles of fairness, transparency, and reciprocity. While FTAs can be valuable tools to foster economic growth and international cooperation, trade openness must be carefully balanced by ensuring the design of agreements that are able to uphold Europe's economic security, sustainability commitments and reciprocity.

The current energy price crisis and massive—subsidized—overcapacities, combined with unfair pricing strategies that have a permanently disruptive impact on the market, cannot be ignored. Fairness, based on the principle of reciprocity, should therefore be the central principle guiding FTA negotiations.

The EU must ensure a tailored tariff liberalization approach distinguishing between sectors where domestic industries face unfair global competition and those where the EU currently lacks adequate domestic capacity. Unwarranted tariff reductions can undermine industries vital to the EU's strategic autonomy, such as ceramics, steel and glass to name few, and generate dangerous dependencies, particularly when it comes to critical raw materials such as aluminium, silicon and base metals. Sectors already injured by increasing unfair imports of foreign goods manufactured with poor social and environmental standards should therefore be excluded from any trade liberalization scope.

With regard to Trade Defence Instruments (TDI), AEGIS Europe has experienced a lack of procedural transparency in third countries’ investigations, including those with whom FTAs have been signed or are currently under negotiations. It is therefore essential to ensure the continued right of the EU to undertake trade defence investigations against unfair trade and to ensure agreement by all third countries on WTO compliance in their investigations.

Additionally, any public procurement chapter in new FTAs must be approached with caution, to avoid undermining the enforcement possibilities under the International Procurement Instrument and the ability to exclude bidders from countries not complying with fair access obligations.

During trade agreement negotiations, it has also come to our attention that the EU may relax its Rules of Origin (RoO). On the contrary, FTAs must include strict RoO designed in collaboration with EU stakeholders, particularly when FTA negotiations involve countries with lower environmental and governance standards than those of the EU or are profiting from neighboring countries state-induced market distortions. The respect of this principle will prevent the circumvention of our standards and boost investments exclusively in sustainable value chains.

Along the same lines, FTAs should incorporate binding commitments on environmental protection, social standards, and climate goals, reflecting the EU's Green Deal objectives. AEGIS Europe advocates for a progressive mirror clause aligned with ILO conventions and environmental targets, upholding European production standards as a benchmark. Sustainability chapters must include clear provisions on child and forced labor, full compliance with the Carbon Border Adjustment Mechanism (CBAM), and adherence to WTO principles.

In the attached Annex I, AEGIS Europe has gathered the comments of its members regarding the ongoing EU-India FTA negotiations, as an example of the many hurdles that must be overcome to ensure a fair and balanced approach.

To conclude, the European Commission must ensure that all future trade agreements are based on the principles of reciprocity, transparency and fairness. The EU cannot afford to compromise on economic security, environmental goals, or fair competition. AEGIS Europe therefore welcomes the various trade recommendations displayed in the Clean Industrial Deal, which overall align with efforts to preserve Europe’s economic security and resilience.

***

AEGIS Europe is an industry alliance that brings together more than 25 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.

Annex I: EU-India Free Trade Agreement

The EU-India FTA exemplifies the challenges of ensuring fair and reciprocal market conditions. While India benefits from significant tariff-free access to the EU market, most European exports to India remain restricted due to high import duties, complex regulatory barriers, untransparent customs procedures, and burdensome certification requirements such as Quality Control Orders (QCOs). The EU must insist on greater transparency and regulatory harmonization to prevent these measures from serving as disguised trade barriers.

From a sustainability dimension, India falls short of European standards, with significant challenges in environmental protection, social welfare, and labour rights. India's reliance on carbon-intensive production methods poses a risk of carbon leakage and weakens the competitiveness of EU firms, which continue to face high energy costs. For instance, Indian metal producers rely almost entirely on coal-fired plants, which generate about 80% of the country's electricity, resulting in significantly higher carbon emissions compared to their European counterparts. Furthermore, as highlighted in the European Commission’s Trade Sustainability Impact Assessment (SIA), India’s excessive water usage, chemical pollution, and labour abuses linked to many of its manufacturing activities cannot be overlooked. Without binding climate provisions and higher sustainability standards, increased access to Indian products will undermine the EU’s decarbonization efforts and the ability of EU producers to compete in the internal market.

Moreover, India’s extensive state subsidies, particularly in the metals, textiles, ceramics and sugar sectors, extend along the whole value-chain and contribute to global trade distortions, requiring stricter scrutiny in the FTA negotiations. According to the OECD, India could add up to 36,4 million tonnes of coal-based steel capacity by 2026. By way of reference, India exported 2,8 million tonnes of finished steel products to the EU in 2023, becoming the second largest source of EU steel imports. Furthermore, India maintains a series of export subsidies and import tariff relief on products such as cast iron products and PET. The European paper and board sector also faces significant trade imbalances, with EU exports to India amounting to just 3% of total EU shipments – half the volume exported to China – despite India’s paper consumption per capita being 15 times lower than in Europe and its market growing by 47% between 2010 and 2021.

India’s aluminium industry is significantly larger than the EU’s, producing 4.1 million tonnes of primary aluminium in 2023 – four times the EU’s output and accounting for 6% of global production. Its largest smelter alone produces nearly twice as much as all eight operational EU smelters combined. Since 2019, EU imports from India have surged by 244%, with the majority consisting of aluminium ingots. Additionally, India’s aluminium industry is expanding both upstream, leveraging competitive access to raw materials, and downstream, leading to a sharp rise in imports of semi finished products.

Similarly, India has quickly become the second largest producer and exporter of ceramic tiles at global level, behind China, as well as the first source of extra-EU imports of ceramic tiles in the Union, with an astonishing 138% increase in imports in five years despite antidumping duties in place since 2023. High overcapacities coupled with low internal demand and ongoing trade defence investigations in several States are likely to boost imports of Indian aluminium and ceramic goods into the EU, which cannot be facilitated further by any trade liberalization.

There is also evidence of dumping in respect to many products originating in India including the dumping of titanium dioxide (TiO2) following the coming into force of anti-dumping measures against China. This is also observed in the case of manhole covers. We urge that India's TDIs be applied in full compliance with WTO rules to ensure a level playing field. Transparency in procedures, access to all non-confidential information, sufficient time to provide comments, and consideration of the public interest are key when conducting investigations.

Finally, India’s reliance on export restrictions for domestic price control, dependence on Russian raw materials and energy supplies, and aggressive use of TDIs – especially anti-dumping measures, making it the top user of such tools at the WTO2 – create further concerns about fair competition and potential abuse of international trade rules. This is further exemplified by India’s behaviour in the India – Tariffs on ICT Goods WTO dispute, and the EU should effectively use the Enforcement Regulation to protect its industries and uphold the rules-based international trade system.

Ensuring that EU exporters have access to transparent procedures and a non-discriminatory trade framework, as well as reciprocity of environmental and social commitments, must be key priorities in the negotiations.

AEGIS Europe statement on U.S. reciprocal tariffs

Download the PDF

Brussels, April 7, 2025. The European Union and the United States maintain the most integrated economic partnership in the world. When considering trade in goods, services, and investment, the transatlantic relationship is unmatched in scale and depth, supporting millions of jobs on both sides of the Atlantic.

On February 13, the White House published a statement announcing the introduction of "reciprocal tariffs" targeting several U.S. trade partners, including the EU. This was swiftly followed by the imposition of duties on European steel and aluminium in March, alongside a sweeping 20 percent tariff on all EU imports, and a further 25 percent global tariff on cars, which entered into force between April 2 and 3. The U.S. administration has indicated it will respond with additional retaliatory measures in case of a European counteraction.

AEGIS Europe is deeply concerned by these developments. We strongly support free and rules-based trade conducted on fair terms. A spiral of retaliatory measures risks triggering a trade war that would have severe consequences for the global economy. Furthermore, U.S. tariffs on a wide range of partners—including China, Canada, Mexico, Japan, and Korea—risk generating trade diversion towards the EU. This is particularly concerning for export-oriented sectors like pulp and paper or ceramics, as well as for industries already facing global overcapacities, such as steel and aluminium, where redirected exports could lead to a surge in imports and drive prices down.

Ultimately, a self destructive trade dispute between the EU and the U.S. would primarily benefit illegally dumped imports and state-subsidized companies from China and other countries contributing to non market overcapacities, when both sides should instead cooperate to rebalance the global market and tackle the root causes of distortions. An escalating trade war between the EU and the U.S. could also affect other sectors like fertilizers and crops, which have already been severely disrupted—first by the pandemic, then by Russia’s war on Ukraine. These two major crises have revealed the vulnerability of the global food system, which cannot sustain higher global food prices. It is therefore essential to avoid placing this system under additional strain through new trade barriers.

In light of these risks, AEGIS Europe encourages the European Commission to act cautiously, maintaining close dialogue with the business community to safeguard European competitiveness and minimize harm to the EU industrial value chains. At the same time, we urge continued engagement in negotiations with the U.S. to de-escalate tensions and maintain the stability of transatlantic supply chains.

However, should negotiations fail and escalation further develop, AEGIS Europe calls on the EU to:

• Respond swiftly, firmly, and proportionately with targeted restrictions on U.S. imports: the aim should be to preserve leverage, deter further escalation, and keep pathways to a negotiated solution open.

• Conduct sector-specific vulnerability assessments: exclude from retaliation lists those products that are essential to EU industries and at risk of supply shortages. The 2018 retaliation list should be reviewed following broad consultations with industry sector representatives, as sectoral trade dynamics have evolved.

• Distribute the burden of retaliatory measures: not only goods but also services—given the substantial U.S. surplus in this area—should be included in the scope of European countermeasures.

• Proactively deploy Trade Defense Instruments (TDIs): monitor trade flows from third countries and be ready to expeditiously activate TDIs to prevent market disruption and protect the EU’s industrial base.

Tariffs would raise costs in the United States and distort trade flows globally. At a time when economic stability is most needed, such measures risk undermining the efficiency and integration of global markets. Maintaining open strategic autonomy as a key objective, while upholding WTO principles, is essential for the European Union to ensure economic resilience and avoid excessive dependence on external actors. A coordinated, measured, and forward-looking response is therefore required to safeguard Europe’s economic interests and support a stable and predictable international trading system.

***

AEGIS Europe is an industry alliance that brings together more than 25 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.

AEGIS Europe’s calls for more decisive action following the Clean Industrial Deal

Download the PDF

Brussels, 27 February 2025. The European Commission released its much-awaited Clean Industrial Deal, honoring the pledge outlined in the Commission’s 2024-2029 Guidelines to introduce a new deal within the first 100 days of President von der Leyen’s second term.

Confronted with soaring energy costs, global overcapacities and unfair trade practices, the European Union must be acting boldly and rapidly to address these pressing issues, as highlighted by the Draghi report. The plan devised by the Commission must ensure that the EU’s industrial competitiveness and quality jobs are not sacrificed while pursuing sustainability goals.

For these reasons, AEGIS Europe highly appreciates the acknowledgement from the European Commission that public procurement policies are a powerful instrument to support jobs and value creation in the EU. For years, the Alliance has been advocating key reforms in the EU public procurement framework to ensure that European public investments and associated tenders widen the application of non-price criteria as well as European value and preference.

It will therefore be key that the revision of the public procurement framework, expected in 2026, enforces these criteria and enshrines provisions on third country bidders as per the ruling of the Court of Justice of the European Union on the Case-652/22 (Kolin case).

Finally, given the aggressive export strategies enacted by certain foreign competitors, we believe that a ‘made-in Europe’ approach, as mentioned by Executive Vice-President Séjourné, should become a cornerstone of the new Commission’s agenda.

AEGIS Europe welcomes the Commission’s commitment to identify viable solutions to support exporters, as part of the comprehensive CBAM review foreseen for Q3 2025. However, the document does not sufficiently recognize the importance of an export adjustment within the mechanism, nor does it outline practical solutions for its design. Evidence suggests that discontinuing Emissions Trading System (ETS) free allowances without a viable export solution will increase carbon costs for EU companies and overall global CO₂ emissions, creating unprecedented risks for jobs and investment, and jeopardizing the goals of the EU Green Deal. AEGIS Europe calls for the introduction of a WTO compatible export adjustment to ensure a level playing field in export markets, safeguard EU competitiveness, and effectively prevent carbon leakage. Industrial policy alone will not suffice to guarantee the success of European industry.

A more assertive application of the EU Trade Defense Instruments (TDIs) is essential to counteract rising industrial overcapacities from foreign competitors—now extending beyond China. AEGIS Europe has been advocating for years the need for an instrument specifically designed to address global overcapacities. Therefore, we fully endorse the Commission’s commitment to sharpening existing trade defence tools, speeding up proceedings and designing additional instruments, including adjusted tariffs to the maximum levels as necessary, relying notably on exceptions for environmental protection. However, these positive steps require additional human resources within the EC and a clear implementation timeline—both absent from the adopted document—raising serious concerns about the Commission’s commitment to concrete action.

Finally, AEGIS Europe calls for a comprehensive EU’s industrial strategy: no sector should be excluded. Supporting energy intensive industries – alongside clean technologies – is a step in the right direction, as the Competitiveness Compass recognized them as the “backbone of the European manufacturing industry.” An inclusive approach in the implementation of the Clean Industrial Deal—combining fair trade policies, decisive external action and a robust industrial strategy across the entire value chain—is essential to securing Europe’s industrial future in an increasingly uneven global playing field.

***

AEGIS Europe is an industry alliance that brings together more than 30 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.

AEGIS Europe New Advocacy Campaign: Top 5 Priorities for #FairTradeNow

Download the PDF

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

AEGIS Europe position on the WTO Trade and Environmental Sustainability Structured Discussions (TESSD) on climate friendly goods

AEGIS Europe position on the WTO Trade and Environmental Sustainability Structured Discussions (TESSD) on climate friendly goods

AEGIS Europe, the umbrella association representing more than 20 key manufacturing industries in the European Union, is closely following the ongoing discussions on trade and environmental sustainability taking place at the WTO within the Trade and Environmental Sustainability Structured Discussions (TESSD). Launched in November 2020 for interested members among them the European Union, to complement the work of the WTO Committee on Trade and Environment, the TESSD deals with topics such as trade and climate change, trade in environmental goods and services, circular economy, and sustainable supply chains. Our membership has been following the progress of the debates held within the TESSD, in particular the ones exploring opportunities for facilitating trade in environmental goods and services (EGS), namely through tariff liberalisation and removal of Non-Tariff Barriers (NTBs). AEGIS Europe is extremely concerned about the turn that the discussions have taken lately.

AEGIS Europe would like therefore to underline some key principles to be considered during the structured discussions to ensure that any liberalisation of trade in climate friendly goods and services occurs in a manner that is truly sustainable and respectful of the need to maintain a level playing field globally:

a. Need to allow measures to maintain a level playing field Discussions about the liberalisation of EGS do not take place in a vacuum. The reality is that due to government-induced distortions and a lack of sufficient local demand, there are major production overcapacities for a number of products in the value chains of climate friendly goods (examples are given below).

These overcapacities, which in many cases continue to grow, in turn have fed waves of dumped and subsidised products in other countries’ markets. At present, the only practical tool to address these consequences of major overcapacities, and unfair trading practices in general, is the trade defence toolbox, and the TESSD should not overlook the critical and positive role that current trade defence measures play in redressing unfair trade practices, including those related to massive government-supported overcapacities. Many goods being considered in the TESSD meetings are subject to trade defence measures in the EU and globally. Those measures are critical to maintaining a level playing field, which in turn is essential not just for avoiding further injury to the industries concerned, but also providing a stable environment that will encourage further local investment in truly sustainable production of goods important for the environment.

Goods produced by AEGIS Europe members and non-members e.g. silicon, biodiesel, electric bicycles, electrical vehicles are subject to trade defence measures or surveillance monitoring in order to ensure a level playing field for the EU producers. AEGIS Europe is also worried by the mention of “inappropriate use of trade remedies” as an example of supply chain bottlenecks. To begin with, there is no indication of what would constitute an “inappropriate use” of trade remedies.

Also, the general principle – as noted above – is that trade remedies are the only practical tool to counter illegal or unfair trade practices, and must by all means remain available. It is true that the EU has seen examples of other countries, primarily China, using trade defence investigations as a means of retaliation and attempted coercion, and that practice is rightfully condemned, but that is not a reason to criticise the use of trade defence measures as a matter of principle.

b. Need to have clarity and consistency with other EU policies With regard to the Statement by the TESSD co-convenors2, issued on the occasion of the 13th WTO Ministerial Conference (February 2024), AEGIS Europe members express several concerns regarding the following:

▪ There is no clear definition of “environmental goods and services”.

▪ The scope of the list of environmental goods, identified by HS codes, is very broad and goes beyond energy-related goods (e.g. agriculture); some of the goods listed have a dual-use which cannot be grasped by the HS classification nor the product description. Therefore, any discussion on trade liberalisation of these goods will go beyond the objectives of the TESSD.

▪European producers are subject to rigorous certification and technical requirements, particularly regarding sustainability criteria, while this is not the case for other third-country producers. Producers need to compete at the same fair level, therefore, no exemptions in sustainability should be accepted: relaxing those rules for third countries would put EU producers in an uncompetitive position and would slow down the achievement of the EU decarbonisation targets.

▪ It is also imperative for the EU to ensure consistency with other EU policies and objectives, such as the Carbon Border Adjustment Mechanism and make sure that no exemptions are granted under the latter since it would ultimately undermine the EU’s Green Deal goals.

▪ Creating exemptions to existing European legislation could create dangerous precedents particularly in the areas of health, environment and safety. This is contrary to the co-decision process involving the European Parliament and the Council in the adoption of European Regulations. In the name of “principles” (in this case: the alleged environment protection) exemptions to other regulations, such as REACH, might be requested precisely to escape any control and thereby jeopardising human health or the environment. This is unacceptable. Moreover, AEGIS Europe has noted that some important topics are not reflected in the document and recommends their inclusion in the discussions, due to their significant relevance in trade related climate discussions:

▪ Massive overcapacities, already anticipated above, combined with aggressive pricing policies are permanently disrupting international markets. This is particularly the case of products 2Statement by the TESSD co-convenors accessible at WT/MIN(24)/11/Add.3 2 made in China and India. The slow development of domestic demand in those countries further pushes their producers to export to large consumer markets like Europe mostly under predatory pricing conditions. Hence the elimination of existing tariffs would jeopardise the European industry, which is operating under stricter standards and rules.

▪ Many emerging economies allow business to be based on lax social and labour standards. Countries like China, India and Pakistan were found by the International Labour Organisation (ILO) to use child and forced labour3. Liberalisation of tariffs should definitely not cover EGS produced in such conditions.

▪ Third countries engaging in illegal subsidisation4 and government support5, as well as export restrictions that disrupt the global level playing field should not be rewarded with any sort of tariff liberalisation.

AEGIS Europe also expresses concern regarding the statement in the Summary of Discussions issued following the TESSD working group meeting of 15-16 April 2024 according to which members agreed to further refine and expand the indicative lists of environmental goods and services and that such list should be guided by environmental objectives. We reiterate that the environmental objectives of such goods cannot be the only factor under consideration. Other key international policies need to be considered as well, such as whether international labour and social standards have been complied with when manufacturing such goods.

Furthermore, in the Summary of Discussions issued following the TESSD working group meeting of 17-18 June 2024, there is a clear statement about the willingness [of the TESSD members] to work towards tangible outcomes and concrete actions by MC14, which is of high concern for the EU industry.

Practical examples

Below several practical cases about the current status of the EU industries whose products have been part of the discussions at the level of the TESSD.

In what concerns the ethanol industry, the current tariffs are already too low8; they have been set in 2000 and have not been revised since. In addition, only big exporters such as Brazil and USA pay duties whilst the rest of the world is exporting duty-free to the EU since they do not reach the quota. This happens in the context that costs of production for EU producers have skyrocketed since 2000, and the existing tariffs are no longer effective in ensuring a level-playing field for the EU industry. The EU ethanol industry is fighting to raise the tariffs to match the economic realities in the EU. Countries like U.S. and Brazil as an example, regularly revise their tariffs for ethanol to meet the economic realities.

Silicon is on the Critical and Strategic raw materials lists part of the Critical Raw Materials Act since it represents a key raw material in the solar PV value chain, needed to produce polysilicon that then is embedded in the PV cells of solar panels. China is the biggest silicon producer in the world, its current capacities exceed the 7Mt, almost twice the worldwide silicon consumption in 2023. China has plans to expand its silicon capacities by another 4.6Mt. Despite such massive overcapacity threat, Europe has only imposed an anti-dumping duty of 16.8% against Chinese silicon which is definitely not sufficient to preserve a level playing field especially bearing in mind that like-minded countries such as the US and Canada have a duty of 139%, respectively 47-235% imposed on the same Chinese product. Silicon is definitively a strong example of massive overcapacities combined with predatory pricing.

Most recently, the EU imposed provisional anti-dumping duties (12.8%-36.4%) on imports of biodiesel from China, after using trade defence instruments also against unfairly traded biodiesel from Argentina, Indonesia and the United States. In addition, the EU biodiesel market is seriously damaged by fraudulent imports of biodiesel, especially from China, made from palm oil (which the EU wants to phase out) that is mislabelled as made from used cooking oil (or UCO, which the EU wants to favour). This is happening because of inherent problems with verification and certification.9 In this context, there can be no question of removing tariffs for ethanol, biodiesel or silicon or of softening the imposition of Non-Tariff Barriers (NTBs) on the importation of such products, as this would simply lead to the disappearance of the industries in Europe and negatively impact Europe’s green transition. d. Conclusion 8The current ethanol tariffs are: 19,2 EUR/hl for undenatured and 10,2 EUR/hl for denatured.

AEGIS Europe is therefore extremely concerned about the direction of the structured discussions and the embedded risk of pushing for measures which would remove the EU’s ability to take actions essential for maintaining a level playing field, in particular for EU industries that have invested considerably in achieving the objectives of the Green Deal. We urge the Commission to consider with the utmost caution the real added value of these discussions and the underlying role they could have in dismantling existing European legislation. The often-cited barriers to trade with Europe are contradicted by the proven increase in imports into Europe. Regarding future discussions at the TESSD, a Communication10 from the United States raises concern to the extent it may result in premature pressure to adopt measures that have not been properly reflected upon. AEGIS Europe urges the European Commission to bear in mind our concerns and to preserve all means for ensuring a level playing field to the benefit of the EU industry.