L’UE met en place de nouvelles règles en matière de défense commerciale.
Today the EU’s new trade defence legislation, an integral part of President Juncker’s agenda on A Europe That Protects, enters into force. It will change the way the EU tackles dumped and subsidised imports from countries with significant state-induced market distortions.
The Commission has also published its first country report on such state-induced distortions.
Following its publication in the EU’s Official Journal, the revised legislation enters into force just over a year after being proposed by the Commission. It introduces a new way of calculating whether dumping has occurred in imports into the EU from countries where the economy is distorted owing to state interference.
The purpose of this new legislation is to make sure that Europe has trade defence instruments that are able to deal with current realities – notably state-induced distortions which too often lead to overcapacities – in the international trading environment, while fully respecting the EU’s international obligations in the legal framework of the World Trade Organisation (WTO).
President Jean-Claude Juncker said : "The EU is and will remain one of the most open markets in the world. We are and will remain in the first line defending open, fair and rules-based trade. This, however, should not be mistaken as naivety. Our unshakable and facts-based conviction that trade brings prosperity will not prevent us from defending our workers and companies with all legitimate tools when others do not play by the rules. With this new legislation and a new set of modernised tools that will be soon in place, Europe will be able to keep pace and deal more effectively with the ever changing realities of the international trading environment."
Commissioner for Trade, Cecilia Malmström, said : "Today we welcome the entry into force of the EU’s new anti-dumping and anti-subsidy legislation. This is an important time in our trade defence policy. It signals the EU’s commitment to strong and effective trade defence instruments. The EU is open for business. But we must also protect our industry from unfair competition from imports, particularly from countries whose economies are significantly distorted owing to state interference. The publication of country reports will help us to put the new methodology into practice. It will also give the EU industry a basis on which to make its case concerning countries where distortions exist."
The standard way of calculating dumping is to compare export prices with domestic prices or costs in the exporting country. If, due to state intervention in the economy, domestic prices or costs are distorted, the Commission will disregard these when calculating domestic value. Instead, it will use other benchmarks reflecting undistorted costs of production and sale.
The new methodology can apply to any WTO member. Before applying the new methodology, it will be necessary to show that significant distortions exist in the economy of the exporting country as a result of state interference. To do this the Commission will examine all the evidence presented in the course of an investigation, including by the EU industry. The Commission may also prepare reports describing the economies of certain countries or sectors in this context.
In parallel with the publication of changes to the EU’s anti-dumping legislation, the Commission has today released the first country report envisaged by the new legislation. The Commission selected China for the first report because the bulk of the EU’s anti-dumping activity concerns imports from that country.
The report published today describes factually certain aspects of the Chinese economy, focusing on the country’s macro-economy ; the main production factors used in all manufacturing processes (e.g. labour, energy) ; and certain sectors of the economy, including steel and ceramics.
Other reports will be prepared on the basis of the same criteria : their relative importance in the EU’s anti-dumping activity, as well as indications that there may be distortions related to government interventions in the economy. The next country report will concern Russia.
The EU industry may rely on the country reports as evidence to request the use of the new methodology in anti-dumping investigations. In the course of each investigation, the Commission will examine if the use of the new methodology should be applied based on all the evidence in the file. All parties concerned by an investigation, including the government of the country concerned as well as exporting producers, will have the opportunity to comment on and disprove any findings made in the reports in the course of the relevant investigations.
Social and environmental standards can play a role under the new methodology. When selecting the appropriate representative third country for the purpose of replacing costs, besides the per capita gross national income or other relevant economic indicators, the Commission would also take into account the level of social and environmental protection in the representative source country.
The new methodology will also strengthen the EU anti-subsidy legislation so that, in future cases, any new subsidies revealed in the course of an investigation can be investigated and included in the final duties imposed.
On 9 November 2016 the European Commission presented a proposal for a new method for calculating dumping on imports from countries where there are significant market distortions. The European Parliament and the Council reached agreement with the Commission’s proposal after three-way negotiations on 3 October 2017.
Questions and Answers
Today, the EU implemented important changes to its anti-dumping and anti-subsidy legislation and the European Commission published a report on state induced distortions existing in China.
The main change to the anti-dumping legislation is the new way of calculating the dumping margin in anti-dumping investigations on imports from World Trade Organisation (WTO) members whose prices and costs are distorted because of state intervention. The changes apply to all countries that are part of the WTO.
Before applying the new methodology, it will be necessary to show that significant distortions exist in the economy of the exporting country as a result of state interference. To do this the Commission will examine all the evidence presented in the course of an investigation, including by the EU industry. In this context, the Commission may also prepare reports describing the economies of certain countries or sectors. Following today’s report on China, other country and/or sector reports will follow.
What is the new methodology for calculating dumping margins ?
For WTO members, the standard way of calculating the dumping margin is by comparing the domestic prices in the exporting country and export prices for the product under investigation. This will not change under the amended legislation.
However, domestic prices and costs can be distorted owing to state interference in the economy. In this case, they do not provide a proper basis to determine the comparison with the export price. The new dumping methodology will be used when it is not appropriate to use domestic prices or costs due to significant distortions resulting from state intervention. In such instances other benchmarks reflecting undistorted costs of production and sale will be used. These could include benchmarks, or corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country.
This new methodology will allow the Commission to establish the actual magnitude of dumping where distortions exist.
What countries will be affected ?
There is no list of countries to which the new methodology applies – it will be used in dumping cases concerning WTO member countries if significant distortions are found in the exporting country concerned which impact on prices and costs.
What are the significant distortions which the amended regulation will allow to tackle ?
These are distortions which occur when reported prices or costs, including the costs of raw materials and energy, are not the result of free market forces as they are affected by substantial government intervention.
What state interference affects the prices and costs in an exporting country ?
State interference can occur, for instance, when a market contains a large number of firms operating under the ownership, control or guidance of the authorities of the exporting country.
It could also occur where there is a state presence in firms allowing for interference in prices or costs or pursuing policy objectives.
Other examples are public policies discriminating in favour of domestic suppliers, or exporters’ access to financing pursuing public policy objectives.
How would the Commission decide if the economy of a country is distorted ?
The Commission will examine whether distortions exist in each and every case based on its own merits. To that effect, the Commission may rely on any information regarding distortions brought by industry or indeed which comes to light in the context of an investigation. In addition, the Commission may prepare and issue reports describing the specific circumstances of the market in any given country or sector. Any information which supports a finding that distortions exist in an exporting country, justifying the use of the alternative methodology, will be part of the evidence on file in the anti-dumping investigation concerned.
What is the purpose of the reports prepared by the Commission ?
These reports are one of the means of describing distortions in a given country/sector.
The reports, along with any other information regarding distortions, would become part of any anti-dumping investigation into that country or sector, and would be publicly available. The EU industry could also use information from these reports when lodging a complaint or a request for review.
They contain technical assessments, which will be placed on the case file in every investigation. They would therefore form a piece of evidence and be open to challenge by parties concerned by an investigation.
Any reports will be updated regularly to reflect any changes to the level of state interference in the economy.
If the changes to the legislation are country neutral, why was China selected for the first country report ?
The fact that the Commission has chosen China as a first country on which to prepare a report merely reflects the fact that investigations and measures against China account for the largest proportion of the EU’s anti-dumping investigations and trade defence measures.
When will the next reports follow and which countries will they concern ?
Other reports will be prepared and countries will be selected on the basis of the same criteria as used in the selection of China. That is their relative importance in the EU’s anti-dumping activity, as well as indications that there may be distortions related to government interventions in the economy. On that basis the next country report will concern Russia.
What does the report on China contain ?
The report is a fact-based source of information to be used only in the context of anti-dumping investigations.
The report is divided in three parts. The first section is a macro-economic description of the Chinese economy, the second section discusses the main production factors used in all manufacturing processes (e.g. labour, energy) while the third section deals with certain sectors of the Chinese economy including steel and ceramics.
Does the report on China represent the Commission’s opinion on the political and social system in China ?
The report is a technical document, a so-called Commission Staff Working document, which will be used only in the context of trade defence investigations. It does not express any political views, preferences or judgements and is purely descriptive.
The information contained in the report is drawn from a number of sources. Primary among them is the official information provided by various Ministries and official organisations in China, for example, the relevant five year plans of decision of the State Council. Other information contained in the report comes from international organisations such as the IMF and OECD.
Does the existence of the report on China mean the new methodology will be automatically used in anti-dumping cases concerning that country ?
The application of the alternative methodology is not automatic for any country.
The first report on China simply reflects the fact that this is the country on which the majority of the EU’s trade defence activity occurs. Whether the new methodology will be applied in any given case will depend on the specifics of the case at hand.
How will the reports be updated and transparency ensured ?
The frequency with which the reports would be updated depends on a number of factors, in particular the economic developments in a third country for which a report exists.
The reports will be made available to the EU industry which will be able to rely on them for using out of country benchmarks when filing applications. Given that the reports will become part of the file on any ongoing proceedings, parties will be in a position to comment on the information contained therein in the context of investigations.
For the purposes of replacing costs how will the appropriate representative third countries be selected ?
The selection will be made so as to respect the requirement of a similar level of economic development.
The data from the third country have to be readily available. Therefore, they need to be public, recent and specific to the inputs under investigation.
In this context the Commission would be taking into account the level of social and environmental protection in cases where more than one appropriate third country would be available.
How exactly will poor social and environmental standards be taken into account in the new methodology ?
Social and environmental standards can play a role under the new methodology. Notably, where the Commission has a choice between a number of appropriate representative countries with a similar level of economic development as the exporting country under investigation, the level of social and environmental protection in the representative source country will be taken into account in the selection.
Under the new methodology can costs in the exporting country be used to calculate dumping ?
Domestic costs in the exporting country are used where they are undistorted by state interference. The legislation ensures that there is no ambiguity : distorted costs will not be used in the new methodology. This is one of the primary objectives of the new legislation – that dumping calculations address the situations where costs are distorted.
Do the changes apply to all cases, even ongoing ones ?
The new methodology will only apply to cases initiated as of today. Any ongoing anti-dumping investigations will remain governed by the existing rules.
In reviews of existing trade defence measures in place, the new methodology will only be applied as from the time of the next scheduled expiry review of those measures. In addition, the legislation makes clear that without other changes in circumstances, existing measures should not be reviewed just because a new calculation methodology is adopted.
How can EU industry familiarise itself with the new rules ?
The EU industry has been closely following the developments in relation to the new anti-dumping methodology throughout the legislative process. Nevertheless, the Commission services are ready to help any potential complainants to understand how the new system will work in practice and the implications for drafting complaints. In this context the tradedefence services have also updated the ’Guide to complainants’. In addition, any industry seeking further information is invited to contact the Complaints office at the following address : firstname.lastname@example.org.
What are the changes in the EU’s anti-subsidy legislation ?
Experience has shown that the actual magnitude of subsidies is not always clear when anti-subsidy investigations are launched. Exporters are often found to benefit from subsidies that could not have been known before carrying out the investigation. Yet, those subsidies clearly provide an unfair benefit, which allows exporters to sell products at prices that damage EU industry. Up to now only those subsidies alledged in the request for action are normally investigated. The changes will now allow for additional subsidies found during the investigation to be properly reflected in the calculation of the anti-subsidy measure.