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European Council Approves New Anti-Dumping Rules

Wednesday, December 6, 2017

The European Council has approved a new EU anti-dumping methodology in a bid to identify and redress cases where prices of imported products are artificially lowered due to state intervention.

The rules were adopted by the Council on December 4, and will enter into force by December 20.

The new legal framework will remove the former distinction between market and non-market economies for calculating dumping. The European Commission will now need to prove the existence of a "significant market distortion" between a product's sale price and its production cost.

The Commission will be allowed to set a price for the product by referring, for example, to the price of the good in a country with a similar level of economic development or to relevant undistorted international costs and prices.

Urve Palo, the Estonian minister responsible for trade, said: "Today we are strengthening our anti-dumping toolkit to provide a fair trade environment for EU producers. The new rules will be crucial in ensuring that our trading partners are selling us their products at undistorted prices, and that fair market competition is respected."

On December 5, a political agreement was reached between the European Commission, the Council, and the European Parliament on changes to the anti-dumping and anti-subsidy regulations.

The new rules will shorten the current nine-month investigation period for the imposition of provisional measures. Companies will benefit from an early warning system, to help them adapt to the new situation in case duties are imposed. Small companies will be offered assistance from a specific help desk, to make it easier for them to trigger and participate in trade defence proceedings.

In some cases, the EU will adapt its "lesser duty rule" and may impose higher duties. This will apply to cases targeting imports of unfairly subsidized or dumped products from countries where raw materials and energy prices are distorted.

The agreement was welcomed by the European Commission's President, Jean-Claude Juncker. He said: "Our actions to defend European producers and workers against unfair practices must be bold and efficient and today's agreement will provide us with an additional tool to do just that. We are not naļve 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 political agreement reached on December 5 will enter into force once the Council and the European Parliament have given their final approval.

Dumping occurs when good are sold into a foreign market at below the prevailing market rate in the exporter's domestic market. Countries can respond by levying taxes on imports to prevent unfair competition for their domestic producers, known as anti-dumping duties. To counteract unfair subsidies, countries may also introduce countervailing duties.