On 23 January 2018, the Parliament’s international trade committee (INTA) endorsed the agreement on the modernisation of the EU’s trade defence instruments (TDIs).

The agreement was reached on 5 December 2017 between the Commission, the Council and the European Parliament and, together with the new anti-dumping methodology, it is the first major overhaul of the EU anti-dumping and anti-subsidy instruments since 1995.

Both reforms aim at maintaining and improving the effectiveness of the EU’s trade defence instruments in light of the changes in the global economy, but cover different aspects. The changes agreed in TDI modernisation concern issues relating to how trade defence investigations are conducted, including the duration of the investigations, better rules concerning the calculation of the non-injurious price and support for small and medium enterprises (SMEs), whereas the new methodology to calculate the dumping margin concerns cases where the exporting country engages in distortive practices in its economy.

In particular, amongst the most important changes to the EU’s trade defence instruments there are:

• a shortening of the current 9 month investigation period for the imposition of provisional measures;
• the possibility to impose higher duties in cases targeting imports of unfairly subsidised or dumped products from countries where raw materials and energy prices are distorted;
• an improved injury calculation, so that the new rules concerning calculation of the ‘non-injurious price’, i.e. the price that the industry is expected to have charged under normal circumstances, now better reflect economic reality, taking into account the cost of necessary investments, such as in infrastructure or research and development, but also future expenses related to social and environmental standards, for example under the Emission Trading System;
• the inclusion of social and environmental considerations: for instance, the EU will take into account the costs of compliance by EU industry with higher social and environmental standards. Furthermore, the EU will normally not accept price undertakings from third countries that have a bad record on core International Labour Organisation conventions and multilateral environmental agreements;
• an increased transparency and predictability: an advance warning of 3 weeks will now be given to companies before duties start being collected;
• support to EU SMEs through a specific help desk, in order to make it easier for them to trigger and participate in trade defence proceedings.

The new rules will enter into force once the respective approval procedures within the European Parliament and the Council are finalised. This is foreseen for end of May 2018.

Davide Scavuzzo