Second AEGIS TDI Report on the EU's Trade Defence Instruments
Executive summary
The AEGIS Europe Alliance represents more than 20 EU manufacturing sectors and companies often injured by unfair trade practices. The Alliance therefore has an interest in ensuring that the trade defence instruments work effectively to counter the distortions caused by the dumping, and/or the subsidisation, of imports.
This second AEGIS Europe Report on the Functioning of the Trade Defence Instruments (TDI) argues that the effective use of TDI contributes significantly to the economic security of the Union. The Trade Defence Instruments, if used robustly, remain the best tools to counter, and root out, the damage that unfair trade causes to European jobs and economic well-being. As President von der Leyen told the European Parliament in April 2023:
The second point is becoming bolder and better at using our existing trade defence instruments. We have given ourselves the right tools to deal with security concerns and economic distortions. So, we must be more assertive in using them when we need them.
The EU remains a very modest user of TDIs compared to other OECD economies such as Australia, Canada and the United States. In addition, the EU has a WTO+ policy for anti dumping which makes the instrument less effective than in other countries. By way of example, the EU almost lost its solar panel and magnesium industries because the anti dumping measures put in place at that time were ineffective.
The EU has not made sufficient use of the safeguard instrument. AEGIS Europe calls for more openness to the imposition of safeguards. In addition, there needs to be an “emergency brake mechanism” based on the GATT XXI Security Article. When shocks in the economy happen or when there is unfairness in the market place, a quicker and stronger response is needed.
In the past year, the Commission has acted to address problems related to the calculation of dumping margins where there is high inflation, or subsidies from one country boosting manufacturing in another county. However, much remains to be done. SMEs, the core of the Union’s manufacturing, still have difficulties in using TDI, and the lesser duty rule still applies in most cases to lower anti-dumping duties and makes them less effective and certainly lower than in other countries.
AEGIS Europe calls on the Member States to recognise the damage caused by unfair trade practices and to promote more robust implementation of the anti-dumping, the anti subsidy and the safeguard instruments now more than ever since the industrial base in the EU is shrinking to the detriment of the Union and its values.
Read the full report here.