Fifth AEGIS Europe TDI Report
Fifth Report on the Functioning of the EU’s Trade Defence Instruments
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The EU, which has exclusive competence in external commercial policy, is failing to implement properly the trade defence instruments, the main tools against unfair trade practices. The EU does not defend EU manufacturing, adequately, against third country commercial practices, and government policies, which result in unfairly priced products flooding the EU market, killing off healthy and innovative EU based enterprises, enterprises which have often created the market in the first place.
This failure starts with the Council and the Parliament, but it is most pronounced in the European Commission, the guardian, and the administrator, of EU law. The European Commission does not dedicate sufficient financial and human resources to the administration and the implementation of the laws which already exist and could be used to stop the worst consequences of these unfair commercial practices and policies.
DG TRADE, the department in the European Commission responsible for the trade defence instruments, does its best in difficult circumstances. It is handicapped by limited staff. AEGIS Europe estimates that Directorate G in DG TRADE has about 140 persons of which about 100 are trained in TDI. This staffing level allows DG TRADE to initiate, at most, and under great pressure, 30 new cases a year in addition to the other TDI obligations it has. These obligations, i.e. expiry reviews, absorption reviews, circumvention investigations, support for SMEs, reviews of whether the instruments are fit for purpose, are growing. They limit the capacity for new investigations.
AEGIS Europe estimates that there are as many as 70 full applications (Complaints) for new investigations pending with DG TRADE. More applications are being filed all the time. A new application will take, on average, 6 months to prepare. DG TRADE will not even open fully documented new applications for 10 to 12 weeks (on average 3 months) after receipt. It then takes another 6 to 9 months for DG TRADE to accept the application and initiate an 1 investigation (the worst example is 444 days from receipt to opening).1 The investigation will take 7 to 8 months before provisional protection will be put in place, if any, and a further 6 months for definitive measures to address the unfair trade practice. In all, today, an EU manufacturing sector, once it has identified an unfair practice and begun to measure the real injury it suffers, will have to wait at least 3 years before it gets relief.
This is a failure that is killing EU manufacturing, destroying highly skilled jobs, and contributing, in very real terms, to the de-industrialisation of Europe. In addition, the Commission fails to address effectively all forms circumvention and fraudulent practices, which significantly undermines the remedial effect of the trade defence duties imposed. The EU, which has exclusive competence for the common commercial policy, is currently not making full and effective use of its trade defence instruments, which constitute the Union’s main tools for addressing unfair trade practices. As a result, EU manufacturing is not adequately protected against third-country commercial practices and government policies that result in unfairly priced products entering the EU market in very significant and increasing volumes, in almost all industrial sectors.
This places severe pressure on healthy and innovative EU-based enterprises, including companies that have invested substantially in developing the very markets in which they now operate. Addressing this situation requires urgent action from the Council, the European Parliament and, in particular, the European Commission, as guardian of the Treaties and administrator of EU trade defence legislation. A central concern is that insufficient financial and human resources are currently dedicated to the administration and effective implementation of the trade defence instruments already available under EU law, which results in further delaying response to unfair commercial practices and policies. Such delays seriously risk undermining the effectiveness of the EU’s trade defence framework, which is already paralysed and on the verge of collapsing.
For industries exposed to rapidly increasing unfairly priced imports, three years can fundamentally alter market conditions: production capacity can be lost, investment decisions postponed or cancelled, and highly skilled employment permanently affected. At a time when strengthening European competitiveness, economic security and industrial resilience are stated as EU priorities, ensuring that the Union’s trade defence instruments can be deployed rapidly and effectively should therefore be treated as a matter of extreme urgency. Providing DG TRADE, in particular in Directorate G, with the resources necessary to implement existing EU law effectively would be an immediate and concrete contribution to preventing further erosion of Europe’s manufacturing base.