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TRADE BARRIERS REGULATION

TRADE BARRIERS REGULATION. Paolo Garzotti Directorate-General for Trade Directorate D – Co-ordination of WTO and OECD matters Dispute Settlement and Trade Barriers Regulation. What is the TBR?.

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TRADE BARRIERS REGULATION

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  1. TRADE BARRIERS REGULATION Paolo Garzotti Directorate-General for Trade Directorate D – Co-ordination of WTO and OECD matters Dispute Settlement and Trade Barriers Regulation

  2. What is the TBR? • The Trade Barriers Regulation (TBR) is a legal instrument that gives the right to Community enterprises, industries and Member States to submit a complaint to the Commission. • The TBR’s aim is to open third country markets by eliminating obstacles to trade for the benefit of Community exporters.

  3. Scope • The TBR has a broad scope of application and applies not only to goods but also to services and intellectual property rights. • 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”.

  4. Two types of trade barriers STOP! • Article 4 of the TBR: Trade barriers having an effect on the market of a third country and resulting in adverse trade effects for Community enterprises => complaint may be lodged by one or more Community enterprises or a Member State; • Article 3 of the TBR: Trade barriers having an effect on the market of the Community and resulting in a material injury for the Community industry => complaint may be lodged by the Community industry or a Member State.

  5. Community Enterprise • A “Community enterprise” is (Article 2(6) of the TBR) a company or firm formed in accordance with the law of a Member State and having its registered office, central administration or principal place of business within the Community, directly concerned by the production of goods or the provision of services which are the subject of the obstacle to trade. This means for example that a subsidiary can lodge a complaint under the TBR whereas a branch cannot. • A complaint under Article 4 may also be lodged by an association on behalf of one or more of its members.

  6. Community industry • “Community industry” (Article 2(5) of the TBR) means, as a rule, producers accounting for a major proportion of total Community production of identical, similar or directly competing goods or services affected by the trade barrier, or an industry consuming or processing the product or consuming or using the service affected by the trade barrier.

  7. Referral by a Member State • Article 6 of the TBR: A Member State may lodge a complaint in respect of either of the above types of obstacles to trade (never been used so far).

  8. The TBR procedure: the complaint • Submission of a complaint; • The Commission circulates it to the Member States (TBR Committee) for consultation and take decides on its admissibility within 45 days of the lodging of the complaint. • Criteria of admissibility • existence of the measure, • right of action • adverse trade effects or injury • Interest of the Community

  9. The TBR Procedure: Investigation and Report • The Commission gathers and verifies all the relevant information from interested parties, hears their views and starts discussions with the authorities of the third country concerned. The investigation should not last more than five months (seven in complex cases). At the end of the investigation, a confidential report is submitted to the Member States (TBR Committee) • A public version of the report is made available.

  10. After the investigation • Satisfactory steps taken by third country: following the initiation of the TBR procedure, the non-European Community country takes satisfactory steps to eliminate the obstacle to trade. In this case, no action by the Community is required, the procedure may be suspended or terminated.

  11. After the investigation • Formal agreement with third country: After the end of the examination procedure or at any time before, it may appear that the most appropriate means to resolve a dispute arising from an obstacle to trade is the conclusion of an agreement with the third country or countries involved which changes the substantive rights of the Community and of the third country. In this case, the proceedings are suspended to allow negotiations to take place.

  12. After the investigation • Initiation of international (WTO or other) dispute settlement procedure: where it is found that action is necessary and justified in the interest of the Community in order to ensure the exercise of its rights under international trade rules, the case may be brought under the WTO dispute settlement procedure or another appropriate international mechanism.

  13. Commercial policy measures • Commercial policy measures (retaliation): the Commission may seek authorisation of the WTO Dispute Settlement Body and propose to the Council retaliatory measures, which can then be adopted by qualified majority within 30 days from the transmission of the Commission proposal.

  14. Possible improvements • Right for Community enterprises to lodge complaints claiming violations of bilateral agreements? • Time-limits after the issuing of the investigation report? • Possibility for the Commission to start TBR investigations ex-officio? • Other suggestions?

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