Changes (?) and Trends Changes (?) and Trends in EU-Trade in EU-Trade DefenceDefence System System

10th Anniversary of China’s Anti-10th Anniversary of China’s Anti-Dumping practiceDumping practice

24-26th June, 2007 24-26th June, 2007

in Beijingin Beijing

Harald Wenig, EU CommissionHarald Wenig, EU Commission

What’s new in Brussels?What’s new in Brussels?

New trade pattern: New trade pattern: Producer / ImporterProducer / ImporterCompetition aspectsCompetition aspectsEnvironmental / Social aspectsEnvironmental / Social aspectsTransparencyTransparencyPolitisationPolitisationMES ChinaMES ChinaTrade Policy and Steel / TextilesTrade Policy and Steel / TextilesGreen PaperGreen Paper

New trade patternNew trade patternProducer / ImporterProducer / Importer

• Globalisation changed the “front lines”Globalisation changed the “front lines”• What is a “producer” ?What is a “producer” ?

R&D in Europe ?R&D in Europe ?Value of production ?Value of production ?Investment in exporting country ?Investment in exporting country ?

• What are the consequences ?What are the consequences ?Importers/producers can oppose Importers/producers can oppose Injury determination will be changedInjury determination will be changed

Competition aspects ICompetition aspects I

• No international competition rulesNo international competition rules• Distortions not allowed internally - Distortions not allowed internally -

Why externally?Why externally?• The sources of AD/ASThe sources of AD/AS• State aids is (relatively) clear but:State aids is (relatively) clear but:

Dual pricing?Dual pricing? Input subsidiesInput subsidies No specificityNo specificity

Competition aspects II - Competition aspects II - The sources of “dumping”The sources of “dumping”

• Tariff/Non-tariff barriersTariff/Non-tariff barriers High custom dutiesHigh custom duties Customs Customs proceduresprocedures, certifications, standards, , certifications, standards, normsnorms

• Private “cartel agreements”Private “cartel agreements”

• ““Abuses” of a (pre-) dominant positionAbuses” of a (pre-) dominant position

• State interventions in economic State interventions in economic operationsoperations

Competition aspects IIICompetition aspects III

• Examples of state intervention:Examples of state intervention: **Un-performingUn-performing loans by state banks loans by state banks **Export obligations/Export obligations/incentivesincentives **Import/export restrictionsImport/export restrictions **No No enforcementenforcement of accounting of accounting **Establishing « Strategic industries »Establishing « Strategic industries » **No competition lawNo competition law

EnvironmentalEnvironmental / Social / Social aspectsaspects

• Cost/Cost/CompetitiveCompetitive advantages of no or low standards advantages of no or low standards • The classic principle: not in TDIThe classic principle: not in TDI• The « The « double whammy »double whammy » argument argument• The flavour of the day?The flavour of the day?• Arguments on Public Interest TestArguments on Public Interest Test

TransparencyTransparency

• The big issue in EUThe big issue in EU• Access to confidential files?Access to confidential files?• TDI as more judicial procedure TDI as more judicial procedure

**Hearing officerHearing officer **Role of lobbyingRole of lobbying **Published deadlinesPublished deadlines **Published minutesPublished minutes

• More assistance to SMEs?More assistance to SMEs? **Established practice for EU companiesEstablished practice for EU companies **No discrimination for exporters?No discrimination for exporters?

PolitisationPolitisation

• Real problem in EUReal problem in EU **27 Member states27 Member states **No homogeneous industrial fabricNo homogeneous industrial fabric **Large discretion in certain areas Large discretion in certain areas

• Not only an EU problemNot only an EU problem **Monopolized exporting industryMonopolized exporting industry **Direct links to GovernmentDirect links to Government **Insufficient legal system Insufficient legal system **Good governance: work in progressGood governance: work in progress

MES China MES China

• Is it political or technical?Is it political or technical?

• Is there light at the end of tunnel?Is there light at the end of tunnel?

• MES and competitive distortionsMES and competitive distortions **Free access to state budget?Free access to state budget? **Policy considerations VS Economic rationale Policy considerations VS Economic rationale

• Why not subsidy law? Why not subsidy law? **Is the US approach a good one?Is the US approach a good one? **Input subsidies/specificityInput subsidies/specificity

Trade Policy and Steel / Trade Policy and Steel / TextilesTextiles

• Textile quotas disappear end of 2007Textile quotas disappear end of 2007• China Textiles / Steel: China Textiles / Steel:

Excess capacityExcess capacity State supportState support Market economy?Market economy?

• Remedies:Remedies: Negotiations, export taxNegotiations, export tax Double licence systemDouble licence system TDI?TDI? Market access ?Market access ?

Green PaperGreen Paper

• Conflict of interests between: Conflict of interests between: producing andproducing andtrading companiestrading companies

• TransparencyTransparency• PolitisationPolitisation• Link with other policiesLink with other policies• Procedural questionsProcedural questions

State of play and main points :State of play and main points :

• Main points raised by importersMain points raised by importers Strengthen the Community Interest Test – give Strengthen the Community Interest Test – give

importers more weight importers more weight development policy considerationdevelopment policy consideration Reduced duration of measuresReduced duration of measures Increase thresholds (e.g. standing, Increase thresholds (e.g. standing, de-minimisde-minimis)) Higher injury standardsHigher injury standards

• Main points raised by producersMain points raised by producers Environmental and social considerations in the Environmental and social considerations in the

Community Interest Test (e.g.Community Interest Test (e.g. Community Interest Test not applied if social and/or Community Interest Test not applied if social and/or

environmental dumpingenvironmental dumping Avoid double whammyAvoid double whammy Creation of an independent agencyCreation of an independent agency More effective and rapid imposition and More effective and rapid imposition and

implementation of measuresimplementation of measures

Green PaperGreen Paper

TDI – The future is bright (?)TDI – The future is bright (?)

• Trade liberalisation and Safety valveTrade liberalisation and Safety valve

• Less TDI – More protectionist Less TDI – More protectionist pressurepressure

• Without competition law, what else?Without competition law, what else?

• DG Comp. Int. (??)DG Comp. Int. (??)