#Brexit: UK votes against trade defence instruments it will have to apply during transitional period

The Council adopted on 16 April its position on the regulation modernizing the EU's trade defence instruments (TDIs), following the political agreement reached with the European Parliament in December 2017. The Council's position was adopted by a qualified majority, with Ireland abstaining and Sweden and UK voting against. This step clears the way for the final adoption of the text by the Parliament, writes Catherine Feore.  

When first introducing the reforms President Jean-Claude Juncker (pictured) said: "Our actions to defend European producers and workers against unfair trading practices must be bold and efficient and today's agreement will provide us with an additional tool to do just that. We are not naïve free traders and the set of changes agreed today confirms that once again. Europe will continue to stand for open markets and rules-based trade but we will not hesitate to resort to our trade defence toolbox to ensure a level playing field for our companies and workers."

The regulation amends the existing legal framework which allows  higher tariffs to be imposed on dumped or subsidized imports in order to improve the protection of EU producers from damage caused by unfair competition.  The Council says that the new regulation makes EU trade defence instruments more predictable, transparent and accessible, in particular for small- and medium-sized enterprises (SMEs).

Emil Karanikolov, the minister responsible for trade matters of Bulgaria, which currently holds the Council presidency, said: “The adoption of these new trade defence instruments is particularly timely. In the face of protectionist pressures and growing threats to the values and principles of the rules-based trading system, it is all the more important for the EU to have  the right tools, whilst at the same time supporting free and fair trade."

The measures reinforce the EU's ability to insist on a level-playing field with all third countries. After 2021 that will - naturally - include the United Kingdom. The EU could make use the new TDIs should the UK decide to use state subsidies or other measures to protect domestic markets. The UK shouldn't doubt the willingness of the EU to use these measures even EEA/EFTA countries have been subject to the current rules in areas outside their agreement (fishing and agriculture), for example, the EU imposed anti-dumping duties on Norway following a complaint by the Scotland's salmon producers, a minimum import price has been in place since 2006.

The proposed regulation will:

• Increase the transparency and predictability of provisional anti-dumping and anti-subsidy measures. This includes a pre-disclosure period of three weeksafter the information is made public during which provisional duties will not be applied, as well as additional safety nets related to stockpiling.
• Enable investigations to be launched without an official request from industry when there is a threat of retaliation by third countries.
• Enable trade unions to submit complaints together with industry and to become interested parties in the proceedings.
• Reduce the normal investigation period to a period of 7 months, with a maximum period of 8 months. Definitive duties will have to be imposed within 14 months.
• Enable higher duties to be imposed where there are raw material distortions and where these raw materials, including energy, account individually for more than 17% of receipts. This would allow for the level of duties imposed under the "lesser duty rule" to be adapted if it is in the interest of the EU. The imposition of higher duties will include a target profit set at a minimum of 6%.
• Enable importers to be reimbursed of duties collected during an expiry review investigation in cases where trade defence measures not being upheld.
• Take into account social and environmental standards when assessing the acceptability of an undertaking and when establishing the injury elimination margin.

  The formal signature of the regulation is expected in late May.

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