First AEGIS TDI Report on the EU's Trade Defence Instruments

EXECUTIVE SUMMARY

The AEGIS Europe Alliance represents more than 20 EU manufacturing sectors injured by unfair trade practices. The Alliance therefore has an interest in ensuring that the trade defence instruments effectively counter the distortions caused by the dumping, and/or the subsidisation, of imports.

This is the first AEGIS Europe Report reviewing the functioning of the European Union Trade Defence Instruments (TDI). It’s starting point is the 2017 and 2018 reforms and a re-look at what those reforms sought to achieve. AEGIS Europe seeks to contribute to the debate between the EU institutions and EU manufacturing on the better functioning of the trade defence instruments.

The trade defence instruments must not be left out in the cold in the drive to improve the EU’s toolbox on trade. The new instruments to address anti-coercion, foreign subsidies and the international instrument on public procurement are all welcome and AEGIS Europe looks forward to their early adoption and implementation. But they complement rather than replace existing tools.

The notable improvements since the 2017/2018 reforms are:

• The new methodology for determining normal value (the market price equivalent) in markets where prices are distorted has generally worked well and normally allows for the imposition of effective measures against distorted economies particularly China;

• The Commission has adapted existing rules to successfully counter subsidies from the government of one country to an enterprise in another country (cross-country subsidisation), even if duties to counter subsidies remain frustratingly low;

• The evolving practice of correcting errors in dumping, subsidy and injury calculations identified by the EU Courts in annulment proceedings and the application of the corrected duties from the date of the original measure ensures that measures remain effective.

In other areas, success in achieving the objectives of the 2018 reforms is less obvious:

• The Lesser Duty Rule was changed so as to allow higher duties where there are distortions in raw material costs. This new rule has only been applied once despite numerous requests from Union producers;

• Changes to encourage greater use of the trade defence instruments by small and medium sized enterprises need re-examination as problems remain;

• TDI can be made more effective by earlier imposition of provisional measures and the registration of imports as a matter of course in all investigations;

• Circumvention of measures remains a significant problem.

AEGIS Europe makes 23 specific recommendations for improvement. The Alliance welcomes a debate on these recommendations.

Read the full report here.