Trade Defence Instruments

PresentationBefore and after Enlargement experience

Dipl. Ing. Vladimir Jarunek

General State Counsellor

Common Trade Policy Participation Impact

Impact on new member state: The new Member States no longer apply trade defence action on a national

basis. All measures taken by the new Member States disappear. On-going investigations by the new Member States are not continued.

None of the 25 Members States can use trade defence instruments against each other. All trade defence measures that the current EU Member States have against imports from any of the new Member States drop automatically, a. Equally, measures among the new Member States also disappear.

Common Trade Policy Participation Impact

Impact on new member state: The single set of laws and measures currently applicable in the current 25

Member States will be automatically applicable in the new Member States. The EU investigations that are on-going will continue to be pursued, except for those related to the exports from the new Member States.

The need to engage in trade defence action is assessed by the Commission and the Council on the basis of the entire enlarged EU. In certain cases, action may be taken to counteract dumping or subsidised imports in particular regions of

the internal market, but such regional cases are likely to be exceptional.

Impact on producers

• 1. TRADE DEFENCE MEASURES PROTECT EU PRODUCERS OF GOODS FROM IMPORTS MADE AT UNFAIR CONDITIONS

Some goods imported into the EU are dumped or subsidised. These practices are considered unfair by international trade law. Imports of such goods may harm EU producers, because they face unfair

competition in the EU market.

Impact on producers

• 2. WHAT HAPPENS TO CURRENT TRADE DEFENCE MEASURES IN THE EU-25 AND THE NEW MEMBER STATES?Measures applicable in the EU-25 will be extended automatically to the new Member State… Upon enlargement, the measures in force in EU-25 will automatically be extended to all new Member States. They will be applicable on an EU-25 level. In practical terms, this means that producers in the new Member State will benefit from the remedial effects of all the trade defence measures that are in force in the EU-25 upon enlargement.

Impact on producers Existing measures in the new Member State will disappear.

If you are a producer in the new Member State, you should bear in mind

that measures which are in force in your country against third country imports

(including other new Member States and EU-25) will automatically disappear

upon enlargement. Instead, measures currently in force in EU-25 will be

applicable at an EU-28 level (see above). Of course, some products which are

under trade defence measures in the ten new Member States today, might also be

subject to trade defence measures in EU-28. In such a case you, as a producer,

might not notice a big change. Still, the measure might be of a different kind (e.g.

anti-dumping instead of safeguard), at a different level (higher or lower) or

take a different form (e.g. duty instead of quota) than the measure you benefit

from today in your own country.

Impact on producers

For producers in EU-25, trade defence measures against new Member

States will disappear.

It is not possible to apply trade defence measures among Member States because the EU constitutes one single market. Therefore, all EU-25 measures vis-à-vis the new Member State will disappear upon enlargement. If you are a producer in EU-28, this means that you will not any longer, after enlargement, benefit from the remedial effects of the measures which the EU-25 apply against exports from any of the new Member State.

Impact on producers

3. DEFENDING YOUR INTERESTS AGAINST UNFAIR TRADE IN AN ENLARGED EU

If you are suffering from the effects of unfair trade, this is how you can applyfor a measure.

You can apply for a measure via a complaint to the Commission. In such a complaint you would have to show that you suffer injury from unfair trade practices by a third country. The Commission will analyse the complaint and open an investigation if it considers that there are sufficient grounds to do so. An investigation takes up to 15 months.It is the Council (composed by one representative from each Member State)

which takes the final decision to impose a definitive measure. A provisional measure may also be imposed during the investigation.

Impact on producers

The Commission can only accept a complaint which is supported by producers accounting for a major proportion (at least 25%) of the total EU production. In order to ensure sufficient support for complaints after enlargement, producers in EU-25 and the new Member States should act together. However, confidential business data should not be shared among producers who are also competitors. This is why many industries choose an independent body to collect such data (e.g. industrial associations, legal advisers or consultants). In practice this means that, as a producer in EU-28, you should not rely only on your counterparts in the other Member States of EU-25. You will have to act on an EU-25 basis and you might

therefore need support from producers in the new Member States as well. The same is of course true for producers in one of the new Member States: you will have to get used to acting at an EU-25 level, i.e. together with producers in EU-25 and in the other new Member States.

Impact on producers

Some existing measures may be too low to offset the effects of unfair

trade after enlargement, but they can be reviewed.

You should know that the EU legislation foresees a number of possibilities to

modify existing measures to ensure that producers are rightly protected from

imports at unfair trade conditions. If, for example, you notice upon enlargement

that an existing measure has become too low to effectively counter unfair trade

practice in third countries, you can request a modification of the measure through

an interim review. Upon accession, you will also have the option to request an

enlargement-specific re-examination. In addition, you should know that there are

several other reviews at hand: expiry reviews, absorption reviews and anti –

circumvention reviews.

Impact on producers

• 4. HOW ABOUT IF YOU ARE THE TARGET OF TRADE DEFENCE ACTION BY NON-EU COUNTRIES?

The Commission helps all EU-25 producers defend themselves against trade

defence measures by third countries.

Upon enlargement, the Commission will be there to help all EU-25 exporters defend

themselves where trade defence action is taken against them by third countries.

When a third country initiates a new investigation or opens a review of an existing

measure, the exporters concerned have certain rights and obligations.

The Commission will help you as an exporter in EU-25 to fully exercise those rights

and fulfil those obligations. Please consult the information regarding measures in

force in third countries against EU-25 and its Member States.

Impact on producers5. GETTING READY FOR THE ENLARGEMENT: DO NOT WAIT UNTIL

IT HAS HAPPENED, START PREPARING NOW!

A check list: Do not wait to act until enlargement as this might cause irreparable

damage to you as a producer. You may suffer injury from dumped or subsidised

imports or from a sudden increase of imports from third countries after enlargement.

Therefore, make sure that you can act swiftly already on the first day of

enlargement. You do this by:

• establishing contact with the other producers in EU-25 and the new Member States (easiest through industry associations) already today.

• getting informed about which changes you will face with regard to trade defence measures after enlargement - e.g. are there any measures which concern you today that will disappear upon enlargement

Impact on producers

• getting acquainted with the procedures to follow when lodging a complaint or requesting a review. If you intend to lodge a complaint or a review immediately upon enlargement, start preparing your complaint/review request well in advance. Do not forget that a complaint which is lodged after enlargement must be supported by producers accounting for a major proportion (at least 25%) of the total EU-25 production (see above).

Impact on importers, users, suppliers and consumers

Trade defence action simply opposite to importers and suppliers interests, mainly import of goods from third countries can be changed.

Trade defence action increase quality of goods and protect customers.

Communication

- Between Member State and COM

- Between Third Country institution and COM

- Between Member State Institution and Associations (Importers, Consumers, Exporters)

- Open and prepare quick channels

Identifying of national interest

• COM proposal• Open a quick channels to associations• Check the statistical data• Listen the arguments in the frame of AD+AS+SFG• National interest may be different from the

Community interest

AD Investigation Theory

Day Proceeding

0 Publication of Initiation in OJ

1 COM sends Questionnaires

41 Deadline for answering

60-255 COM Examines replies, ver. visits

255-250 COM draft examination report

255-270 COM informs interested parties

270 Publication of prov. measure in OJ

AD imposition definitive measures

Day Proceeding

25 Publication of Initiation in OJ

25-120 COM sends Questionnaires

120 Deadline for answering

140 COM Examines replies, ver. visits

250 COM draft examination report

250-170 CQG, Coreper, Council of

Ministers, Decision

180Publication of final Reg. in OJ

Practice- AD Case - Hot Coils

• Complaint send to COM on 21. 11. 2001• Initiation 19. 12. 2001 – publication OJ• 20. 9. 2002 – 9 month period ended – no

provisional measures imposed• Ongoing communication• 18. 3. 2003 – Council Decision on imposing

final Regulation ...Bulgaria complaints about

discrimination...discussion...revision of AD Case

again

Practise on Comunity Industry

• Any case – support of Comunity Industry

50 % above, however lower rate when not higher rate against.

• Join the European Associations on increase protection against serious injury

• Win new market in EC

Guideline - to draft complaint• Where?

European CommissionOffice of Complaints, TDI Service {office:J-79 06/33}

Rue de la Loi 200,B-1049 Brussels, Belgium

Phone: +32-2-298 78 73 Fax: +32-2-295 65 05E-mail: TRADE-Defence-Complaints@cec.eu.int

• How?1. General Information: A. Complainant: 1/ The complainant

2/ Representativenees3/ Other producers in the EC

B. Product concerned: 1/ Definition 2/ Description 3/ Customs duties and other trade measures

Guideline - to draft complaint

How?2. Dumping: A. Product types

B. Normal value: 1/ Choose of analogue country {if non/market or transition economy}

2/ Normal Value CalculationC. Export price calculationD. Price comparisonE. Dumping margin

3. Injury: A. Consumption in the ECB. Volume and market share of dumped or subsidized importsC. Price of dumped or subsidized importsD. Price undercuttingE. Production, capacity and utilisation of capacity of

the complainants

Guideline - to draft complaint

How?3. Injury: F. EC sales, market share and export of the complainant

G. EC sales price of the complainant

H. Cost of goods sold by the complainants in the EC

I. Profitability of the complainants

J. Employments of the complainants

K. Investments of the complainants

L. Stocks variations

M. Other injury elements of the complainants

N. Other injury factors

O. Threat of injury

P. Material retardation

Guideline - to draft complaint

How?

4. Causality

5. Conclusion

Annexes: Examples: List of known exporters

List of known importers

Brochures of product concerned

List of known producers

List of known users, their associations

Technical information about product type

etc.

Guideline - to draft complaint

How?3. Injury: F. EC sales, market share and export of the complainant

G. EC sales price of the complainant

H. Cost of goods sold by the complainants in the EC

I. Profitability of the complainants

J. Employments of the complainants

K. Investments of the complainants

L. Stocks variations

M. Other injury elements of the complainants

N. Other injury factors

O. Threat of injury

P. Material retardation

Discussion

- Some transition problems concerning new market

- Creating associations

- Creating communication channels

- Others

Thank you for your attention.