New EU trade defense rules brought into effect

Legislation | | MIC Customs Solutions |

New trade defense legislation has entered into force in the EU as a means of tackling state-induced market distortions.

The European Union has confirmed that its new trade defense rules - which aim to address state-induced market distortion by cracking down on dumped and subsidised imports - have now come into effect.

The purpose of the new laws is to tackle the issues caused by state-induced distortions, which frequently lead to market overcapacities in the international trading environment, while remaining compliant with World Trade Organization rules.

Currently, dumping is calculated by comparing export prices with domestic prices, or costs in the exporting country. Under the new rules, in cases where state intervention in the economy has distorted domestic prices, the European Commission will disregard them when calculating value and will instead use other, more accurate benchmarks of production and sale.

The new laws will be supported by country reports that will serve as evidence to request the use of the new methodology in anti-dumping investigations, with the first such report targeting China, as the bulk of the EU's anti-dumping activity pertains to Chinese imports. The next report will examine Russia.

Social and environmental standards can also factor into the new methodology where relevant, while anti-subsidy measures are also being introduced to ensure that any new subsidies revealed in the course of an investigation can be included in the final duties imposed.

European Commission president Jean-Claude Juncker said: "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 modernized 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."