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The future of EU-Trade Defence System

The future of EU-Trade Defence System. 2007 Seoul International Forum on Trade Remedies 27-28 June, 2007 Harald Wenig, EU Commission. Main Subjects of Trade Policy. Reduce Barriers to Trade (tariffs / non tariff barriers) Increase Market Access Investments Increase “Fairness” of Trade

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The future of EU-Trade Defence System

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  1. The future of EU-Trade Defence System 2007 Seoul International Forum on Trade Remedies 27-28 June, 2007 Harald Wenig, EU Commission

  2. Main Subjects of Trade Policy • Reduce Barriers to Trade (tariffs / non tariff barriers) • Increase Market Access • Investments • Increase “Fairness” of Trade • (IPR, TDI) • Acceptance and application of rules and values • Sector issues (steel, textile) • Environment / Social Issues

  3. Trade Defence Instruments –AD/CVD Why do we need TDI? • Lack of international competition law • Within EU/ EEA “four freedoms“ and competition law applies • No international competition rules, no “free movement“ of goods • Therefore: • Possibility of international (third country) cartels • Subsidies in third (exporting) countries • Creation of “national champions“ and “strategic industries“ • Result : Low priced imports to EU which are not due to genuine competitiveness ofexporters • While competitors within EU face strict rules (competition, environmental, social) almost no rules apply to competition from outside EU (except TDI)

  4. Globalisation hits us all • TDI and the new economic reality • Do we have the balance right? • Long supply chains • Producing industry VS Services

  5. Therefore: Change (?) and Trends in TDI New trade pattern: Producer / Importer Competition aspects Environmental / Social aspects Transparency Politisation MES China Trade Policy and Steel / Textiles Green Paper

  6. Producer/importer • Globalisation changed the “front lines” • What is a “producer” ? • R&D in Europe ? • Value of production ? • Investment in exporting country ? • What are the consequences ?

  7. Competition aspects I • No international competition rules • Not allowed internally-why externally? • The sources of AD/AS • State aids is (relatively) clear but • Dual pricing ? • Input subsidies • No specificity

  8. Competition aspects II - The sources of “dumping” • Tariff/Non-tariff barriers • High custom duties • Customs procedures, certifications, standards, norms • Private “cartel agreements” • “Abuses” of a (pre-) dominant position • State interventions

  9. Competition aspects III • Examples of state intervention: • *Unperforming loans by state banks • *Export obligations/incentives • *No inforcement of accounting • *Establishing « Strategic industries » • *No competition law

  10. Environmental / Social aspects • The classic principle: not in TDI • The double whammy argument • The flavour of the day?

  11. Transparency • Access to confidential files? • More judicial procedures • *Hearing officer • *Role of lobbying • *Published deadlines • More assistance to SMEs?

  12. Environmental / Social aspects • The classic principle: not in TDI • The double whammy argument • The flavour of the day?

  13. Politisation • Real problem in EU • *27 Member states • *No homogeneous industrial fabric • *Wide discretion • Not only an EU problem • *Monopolized exporting industry • *Direct links to Government • *Unsufficient legal system • *Good governance: work in progress

  14. MES China • Why not subsidy law? • *Is the US approach a good one? • *Input subsidies/specificities

  15. Green Paper • Conflict of interests between: • producing and • trading companies • Transparency • Politisation • Link with other policies • Procedural questions

  16. Green Paper State of play and main points : • Main points raised by importers • Strengthen the Community Interest Test – give importers more weight • development policy consideration • Reduced duration of measures • Increase thresholds (e.g. standing, de-minimis) • Higher injury standards • Main points raised by producers • Environmental and social considerations in the Community Interest Test (e.g. • Community Interest Test not applied if social and/or environmental dumping • Avoid double whammy • Creation of an independent agency • More effective and rapid imposition and implementation of measures

  17. TDI – The future is bright (?) • Trade liberalisation and Safety valve • Less TDI – More protectionnist pressure • Without competition law, what else? • DG Comp. Int. (??)

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