Trade Defence Instruments

1
Trade Defence Instruments

• Presentation
• TDI Scheme, Rules and Limits
• Dipl. Ing. Vladimir Jarunek
• General State Counsellor

2
Why we need trade defence instruments?

• WTO member state Rules
• Protect Community industry
• Protect Consumers
• Protect Trade

3
How to protect?

• Anti-dumping proceeding
• Anti-subsidy and Countervailing proceeding
• Safeguards proceeding
• Trade Barriers Regulations
• Injurious pricing instruments

4
Anti-dumping proceeding

• Dumping is often seen to relate to any cheap or
  below-cost imports, but
• the reality is more complicated. The 1996
  Anti-Dumping Regulation
• provides for the imposition of anti-dumping
  duties, but only when the
• following conditions are met
• a finding of dumping the export price at which
  the product is sold on the Community market is
  shown to be lower than the price on the
  producer's home market
• a material injury to Community industry the
  imports have caused or threaten to cause damage
  to a substantial part of the industry within the
  EC, such as loss of market share, reduced prices
  for producers and resulting pressure on
  production, sales, profits, productivity etc.
• the interests of the Community the costs for the
  Community of taking measures must not be
  disproportionate to the benefits.

5
Anti-dumping Legislation

• Basic Regulation - Council Regulation (EC)No
  384/96 of 22 December 1995 on protection against
  dumped imports from countries not members of the
  European Community
• Secondary Legislation Council Regulation (EC)
  No 1972/2002 of 5 November 2002 amending
  Regulation (EC) No 384/96
• Council Regulation (EC) No 1310/2002
  amend.Regulation (EC) No 963/2002
• Council Regulation (EC) No 963/2002 of 3 June
  2002
• Commission Decision No 435/2001 ECSC
  amend.Decision No 2277/96 ECSC
• Council Regulation (EC) No 2238/2000 amending R.
  No 384/96
• Council Regulation (EC) No 905/98 amending
  Regulation (EC) No 384/96
• Council Regulation (EC) No 2331/96 amending
  Regulation (EC) No 384/96
• Commission Decision No
  2277/96/ECSC of 28 November 1996

6
Anti-subsidy proceeding

• WTO ASCM
• The EC regulation only concerns imports from
  outside the EC, providing for imposition of
  countervailing duties on goods which have been
  subsidised by the governments of non-EU countries
  and whose import into the Community causes or
  threatens injury to EC producers of the same
  product. Three conditions must be met before
  countervailing duties can be imposed
• the subsidy must be specific i.e. it must be
  an export subsidy, or a subsidy limited to a
  company, an industry or a group of companies or
  industries
• material injury to Community industry the
  import sales have caused or threaten to cause
  damage to a substantial part of the industry
  within the EC, such as loss of market share,
  reduced prices for producers and resulting
  pressure on production, sales, profits,
  productivity etc.
• the interests of the Community the costs for
  the Community of taking measures must not be
  disproportionate to the benefits.

7
Anti-subsidy Legislation

• Basic Regulation defining the Community's powers
  in this field and the conditions governing the
  exercise of those powers is Council Regulation
  (EC) No 2026/97 on protection against subsidised
  imports from countries not members of the
  European Community (OJ No L 288, 21 October 1997)
  .
• Secondary Legislation
• COUNCIL REGULATION (EC) No 1973/2002 of 5
  November 2002 amending Regulation (EC) No 2026/97
  
• COUNCIL REGULATION (EC) No 1310/2002 of 19 July
  2002 amending Regulation (EC) No 963/2002 (OJ L
  192, 20.7.2002, p. 9)  
• COUNCIL REGULATION (EC) No 963/2002 (OJ L 149,
  7.6.2002, p.3)  
• COMMISSION DECISION No 1889/98/ECSC of 3
  September 1998

8
Safeguards proceeding

• Free importation is the general rule of the
  Community's Common Import Regime which is
  established principally in Regulations (EC)
  3285/94 (for WTO Members) and 519/94 (for non-WTO
  Members).
• Nevertheless, there are three basic exceptions to
  this general rule
• Safeguard measures, which may be applied to
  imports that increase in such quantities and are
  made under such conditions as to cause or
  threaten to cause serious injury to the Community
  industry, provided there is a Community interest
  to do so. At the request of a Member State or at
  the Commission's own initiative, an investigation
  may be initiated on the basis of which measures
  may be applied on a case-by-case basis. Industry
  may not directly request the introduction of
  these measures. These measures must respect the
  WTO Agreement on Safeguards.

9
Safeguards proceeding

• Quotas on imports originating in the Peoples
  Republic of China, which currently concern
  footwear, tableware and ceramics. These quotas
  are in-built in Regulation (EC) 519/94 which
  applies to certain non-WTO members. However, upon
  WTO accession the progressive removal of these
  quantitative restrictions by year 2005 was
  agreed. Council Regulation (EC) No 427/2003 (OJ L
  65, 8.3.2003, p. 1) and Commission Regulation
  (EC) 428/2003 (OJ L 65, 8.3.2003, p.12) implement
  this phase-out plan.
• Surveillance, which is not an import restrictive
  measure, but a system of automatic import
  licensing. Current surveillance measures under
  the common import regime concern mainly steel
  products. Within a WTO framework, surveillance
  measures are covered by the WTO Agreement on
  Import Licensing Procedures.

10
Safeguards Legislation

• Basic Legislation COUNCIL REGULATION (EC) No
  3285/94 of 22 December 1994 on the common rules
  for imports, repealing Regulation (EC) No 518/94
• Council Regulation (EC) No 519/94 of 7 March 1994
  on common rules for imports from certain
  countries and repealing Regulations (EEC) No
  1765/82, 
• Council Regulation (EC) No 520/94 of 7 March
  1994 establishing a Community procedure for
  administering quantitative quotas (OJ L 66,
  10.03.94, p.1, as amended subsequently.)
• Council Regulation (EC) No 2603/69 of 20 December
  1969 establishing common rules for exports (OJ L
  324, 27.12.69, p.25).
• Secondary Legislation
• COUNCIL REGULATION (EC) No 427/2003 of 3
  March 2003 on a product-specific safeguard
  mechanism for imports originating in China

11
Trade Barriers Regulations

• It has become necessary to create trade policy
  instruments aimed not only at protecting
• the EC market but also at opening third country
  markets.
• TBR is a legal instrument that gives the right
  to Community enterprises and industries to lodge
  a complaint, which obliges the Commission to
  investigate and evaluate whether there is
  evidence of violation of international trade
  rules resulting in adverse trade effects. The
  result is that the procedure will lead to either
  a mutually agreed solution to the problem or to
  resort to dispute settlement.
• The TBR is an instrument of commercial offence
  to open third country markets by eliminating
  obstacles to trade for the benefit of Community
  exporters.
• The TBR has a broad scope of application and
  applies not only to goods but also to some extent
  to services and intellectual property rights,
  when the violation of rules concerning these
  rights has an impact on trade between the EC and
  a third country.

12
Target of the TBR instrument obstacles to trade

• Wide range of obstacles to trade or trade
  barriers is covered by the Regulation.
• An obstacle to trade is defined in the Regulation
  as "any trade practice adopted
• or maintained by a third country in respect of
  which international trade rules
• establish a right of action". In this context
  international trade rules are primarily
• those established under the auspices of the WTO
  and laid down in the Annexes
• of the WTO Agreement.
• However this definition also covers other
  international agreements and bilateral
• agreements between the EC and a third country.

13
Who can lodge a complaint?

• Community enterprises One or more individual
  firms or any association acting
• on their behalf can lodge a complaint aimed at
  opening a third country market.
• Community industry A Community industry, or
  association acting on its behalf,
• can complain about trade barriers having an
  effect on the market of the
• Community.
• Member state Any Member State may lodge a
  complaint in respect of any
• obstacle to trade.

14
How to file a complaint?

• The complainant needs to provide
• definition of the goods or services affected
  by the trade barrier
• prima facie evidence of the existence of the
  trade barrier
• prima facie existence of a right of action of
  the Community under international trade
• rules
• prima facie evidence that the trade barrier
  results in adverse trade effects or injury.
• Before a complaint is lodged, the complainant is
  invited to make informal contact with
• the Commission for advice on the relevance of the
  issue and on the best way to submit
• the case. The officials of the Commission can
  provide guidelines for the submission of a
• complaint. Therefore, the procedure does not
  involve any particular costs for the
• complainant.

15
Procedure-course of action

• Lodging of a complaint
• Commission decision on admissibility
• Investigation and report to Member States
• International action

16
The outcome

• The non EC country takes satisfactory steps to
  eliminate the adverse trade effects or injury
  complained of gt procedure suspended and
  implementation monitored by the Commission
• Initiation of international (WTO or other)
  dispute settlement(WTO dispute settlement
  website)
• In certain cases an international agreement
  appears to be necessary gt the procedure is
  suspended to allow negotiations in order to
  conclude an agreement between the non-EC country
  and the EC

17
What are the advantages of the TBR?

• The sole trade policy instrument that can be
  triggered by the private sector and that is not
  confined to the defence of the internal market.
• A right given to Community industries to
  examine the complaint, carry out an investigation
  and take international action if the necessary
  conditions are met.
• The complainant is fully associated at each
  step of the procedure.
• An instrument which provides industry with
  indirect access to WTO rules
• A solution oriented instrument permitting
  flexibility to allow for a negotiated solution at
  each step of the procedure.
• A procedure that will not engage the
  complainant in individual costs.
• Confidentiality any information provided on a
  confidential basis by a party to the examination
  procedure shall not be revealed.

18
TBR Legislation

• Council Regulation (EC) No 356/95 of 20
  February 1995 amending Regulation (EC) No 3286/94
  laying down Community procedures in the field of
  the common commercial policy in order to ensure
  the exercise of the Community's rights under
  international trade rules, in particular those
  established under the auspices of the World Trade
  Organization (WTO)
• COUNCIL REGULATION (EC) No 3286/94 of 22
  December 1994 laying down Community procedures in
  the field of the common commercial policy in
  order to ensure the exercise of the Community's
  rights under international trade rules, in
  particular those established under the auspices
  of the World Trade Organization

19
Injurious pricing instruments

• European Community rules include an instrument
  concerning the sale of newly built ships called
  the Injurious Pricing Regulation. This is similar
  to the anti-dumping Regulation and can lead to
  the imposition of charges on the shipbuilders in
  question based on the level of injurious pricing
  found. If these are not paid, the Community may
  deny those ships loading and unloading facilities
  in its harbours until payment is made.
• As stated earlier, application of this Regulation
  has been suspended pending ratification by the
  USA of the OECD Agreement on shipbuilding and
  ship repairing.

20
Injurious pricing Legislation

• COUNCIL REGULATION (EC) No 385/96 of 29 January
  1996 on protection against injurious pricing of
  vessels

21
List of ADASSFG Cases against Bulgaria

• AD Cases Hot-rolled Coils
• Urea
• Ammonium Nitrate
• SFG Cases Steel products
• Strawberries

22
Discussion

• New EC legislation in opposite to national
  Bulgarian legislation
• Preparing administration officials for
  enlargement concerning increase of trade matters
• Preparing for Advisory Comities
• Others
• E-mail jarunek_at_economy.gov.sk
• Thank you for your attention.