European Commission Proposal Comprises Changes to the EU’s Antidumping and Antisubsidy Legislation

On November 7, 2016, the European Commission put forward a proposal for a new method for calculating dumping on imports from countries where there are significant market distortions, or where the state has a pervasive influence on the economy. The proposal also includes the strengthening of the antisubsidy legislation by introducing changes to the way the EU investigates subsidies provided by third country governments, which give their exporting producers an unfair advantage, causing damage to manufacturers in the EU. Apart from the new methodology, the Commission has also proposed transitional arrangements for already existing trade defense measures and ongoing investigations.

Upon presenting the proposal, EU Commission Vice-President responsible for Jobs, Growth, Investment and Competitiveness, Mr. Jyrki Katainen, highlighted the importance of fair and free trade and explained that this proposal aims to adapt EU’s trade defense instruments to deal with the new realities of over-capacity and a changing international legal framework, while fully respecting the EU’s international obligations in the legal framework of the World Trade Organization (WTO).

According to the new antidumping legislation, the countries would no longer be classified as market economies or non-market economies – the legislation would become ‘country neutral’. Implementation of the new dumping calculation would include a transition period during which all existing antidumping and antisubsidy measures would remain subject to the existing legislation, and ongoing investigations would not be affected.

In determining distortions, several criteria would be considered, such as state policies and influence, the widespread presence of state-owned enterprises, discrimination in favor of domestic companies and the independence of the financial sector. Specific reports for countries or sectors where with identified distortions would be drafted by the Commission. It is left unsaid how the Commission’s proposal would impact EU trade policy towards China.

The proposal adopted by the Commission will follow the EU’s ordinary legislative procedure. Any change to the EU’s antidumping and antisubsidy legislation will only become effective once the European Parliament and the Council of the EU have adopted this proposal.

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