Trade Defence Modernisation: One step forward, two steps back

05-Feb-2014 @ 13:0

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Anthea McIntyre Anthea McIntyre

Anthea McIntyre Anthea McIntyre

Trade Defence Modernisation: One step forward, two steps back

The European Parliament today cast a partial vote on the most controversial part of trade policy: Trade Defence Instruments (TDI). Three-way negotiations between the Parliament, EU Council and Commission will now take place in an attempt to reach a final deal before the end of the current legislature.

The TDIs are designed to offset the injury caused to EU industry when subsidised or dumped products from third countries are imported to the EU single market, by imposing duties on these imports.

The Parliament took some positive steps forward on about 80 per cent of the modernisation package introducing increased transparency, more assistance for SMEs and a more-efficient timeline for the procedure. However, on the two most controversial issues and perhaps most important issues, the Lesser Duty Rule and the Shipping Clause, the Parliament took steps backward.

The Lesser Duty Rule is currently applied in all anti-dumping and anti-subsidy cases that the EU undertakes. It serves to calculate the level of import duties to be imposed based on how much injury there is to EU producers. Taking away this rule, as the Parliament did in cases of raw material distortion, research, social dumping, environmental dumping and many other cases, allows the import duties go beyond the injury level to a punitive level.

The Parliament also voted to remove the Shipping Clause proposed by the Commission, which would give interested parties some advance notice about the imposition of duties, allowing them time to change suppliers or cancel shipments if necessary.

Robert Sturdy, UK Spokesman for international trade said: “If we are unable to reach a more balanced proposal in negotiations with the Council we risk sending a dangerous protectionist message to our trading partners.

"Removing the Lesser Duty Rule in so many cases will also cause imports to become much more expensive and could impact other industries relying on imports. What will happen is that for example while we are trying to help the steel industry, we could be hurting the car industry.

I can only hope that in negotiations with the Council we will achieve a better outcome, creating a level playing field, but not going to excess and punishing our trading partners.”

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