Trade Defence Instruments

Trade Defence Instruments

Trade Defence Instruments on imports into the EU from third countries are applied in accordance with World Trade Organization (WTO) rules. There are three Trade Defence Instruments: the anti-dumping instrument, the anti-subsidy instrument and the safeguard instrument.

Trade defence investigations are initiated either following a complaint by an industry or on the initiative of an investigating authority (the European Commission). The vast majority of cases are initiated following the complaints by the EU producers and their associated business structures. Complainants must represent a significant part of the EU producers.

Anti-dumping

Dumping occurs when producers from a non-EU country sell goods in the EU below the sales prices in their domestic market or below the cost of production.

If the Commission can establish (through an investigation) that this is happening, it may restore fair competition and correct any damage to EU companies by imposing anti-dumping measures.

Typically these are anti-dumping duties on imports of the product from the country in question. Provisional anti-dumping measures can be applied up to 6 months and definitive measures for another 5 years.

Anti-subsidy/countervailing

Subsidisation is when a non-EU government provides financial assistance to their companies to produce or export goods.

After an investigation, the Commission may counteract subsidies that distort the market situation in the EU causing injury to EU companies and impose anti-subsidy duties on subsidized products.

Provisional anti-subsidy measures can be applied up to 4 months and definitive measures for another 5 years.

Safeguard

Unlike anti-dumping and anti-subsidies, safeguards are not taken to address unfair trade practices. They are related to imports of a product that increase so suddenly and sharply that EU producers could not reasonably be expected to adapt to the changed market situation.

In such cases, WTO and EU rules allow for short-term measures to regulate the imports, giving EU companies temporary relief and time to adapt to this unforeseeable surge.

Such measures usually apply to imports of the product from all non-EU countries. Provisional safeguard measures can be applied up to 200 days and definitive measures up to 4 years. Where they exceed 3 years, they must be reviewed at mid-term and can be extended for up to 8 years in total.

EU Trade Defence Instruments – useful information: http://ec.europa.eu/