Modernisation of trade defence instruments

The new EU trade defence rules, e.i. anti-dumping and anti-subsidy instruments, entered into force on 8 June. They include provisions on raw materials, which enable to increase the duties imposed on certain products in case of “significant” distortions.

As evidenced by past and recent WTO Dispute Settlement cases, market distortions with regard to chemical feedstock are the key dominant factors to cause dumping. The Modernisation of Trade Defence Instruments (MTDI) dossier – an attempt to revamp the EU’s anti-dumping and anti-subsidy instrument – goes back four years to 2013, when the Commission first submitted its proposal to the Council and the Parliament. The proposal remained blocked in the Council until end 2016.

The text agreed by the EU institutions contains the provisions on raw materials, as advocated by Cefic, but with a nuance. The raw material distortions should be ‘significant’ in order to be able to waive the EU ‘Lesser-Duty-Rule’ – allowing higher anti-dumping duties. This ‘significance’ will be measured by the share of the distorted raw materials in the total cost of production – distorted raw materials should account for more than 17% of the full production cost.

Other significant changes are the shortening of the investigation period to 14 months, and the consideration of the costs for EU industry of compliance with environmental and social standards.

Petrochemicals Europe together with Cefic advocate for the liberalization of trade in chemicals and for the enforcement of existing rules by all countries.

For further information, please read the press release of the European Commission.

Contact: Charlotte Delvaux, Cefic industrial policy department (cde@cefic.be)