EU Seeks to Modernize, Strengthen AD/CV Protections
The European Commission proposed April 10 a number of changes to European Union rules aimed at strengthening trade defense measures in light of “new challenges across the changing economic landscape.” The Commission is also making or considering additional changes to improve the effectiveness of these measures.
Legislative Proposal. A fact sheet on the Commission’s legislative proposal, which must be approved by the Council and the European Parliament and will probably not become law before 2014, indicates that it includes benefits for both producers and importers/users.
For producers, the Commission will be able to self-initiate AD and CV duty investigations without an official complaint by EU industry, which “will be particularly important when the risk of retaliation against companies asking for trade defense instruments is high.” The Commission will also be able to deviate from the “lesser duty rule,” under which AD and CV duties are set at levels sufficient to remove the injury caused to EU industry, to allow the imposition of duties equal to the margin of dumping or subsidization.
Importers and downstream users of products covered by trade defense measures will be afforded greater predictability by being informed of any provisional AD or CV duties two weeks before they are imposed. In addition, importers will be offered refunds of duties collected during an expiry review if that review finds no justification to continue the AD/CV measure at issue.
Non-Legislative Changes. The Commission plans to implement gradually in the coming months non-legislative changes that will extend certain deadlines during AD/CV investigations, improve the monitoring of trade flows and allow self-initiated anti-circumvention investigations.
Procedural Guidelines. The Commission’s Directorate General for Trade has issued a working paper setting out draft procedural guidelines in four “particularly complex areas:” (1) expiry reviews, which are conducted after five years to determine whether AD/CV duties should remain in place; (2) the Union interest test, by which the Commission determines whether a trade defense measure would serve the EU’s overall economic interests, including those of importers and downstream users; (3) the calculation of injury margin; and (4) the choice of an analog country in proceedings involving countries without market economy status. These guidelines will now be subject to a three-month public consultation.
The Commission notes that at the end of 2012 the EU had 102 AD duty orders and 10 CV duty orders in force and that these measures impact around 0.25% of EU imports.