The UK Trade Remedies Regime: Review of Existing EU Trade Orders ACITA National Meeting 30 April 2019, London Yves Melin, Partner, Steptoe Danyal Arnold, Associate, Steptoe

Introduction The legislative framework of the UK trade remedies regime When will the UK trade remedies regime begin to operate: Withdrawal Agreement vs No Deal The review of existing EU remedies The commencement of new investigations

The Legislative Framework The Trade Remedies Bill – establishes the Trade Remedies Authority (the TRA) (until it is passed the functions of the TRA will be carried out by the SoS/DIT (Reg 1 DSR 2019) Taxation (Cross-Border Trade) Act 2018 (the Customs Act 2018) – lays out the broad powers and functions of the TRA (see s.13 and Schedules 4 and 5) Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019 (the DSR 2019) – supplements the Customs Act 2018; provides more detailed powers and functions and definitions for dumping and subsidy investigations The Trade Remedies (Increase in Imports Causing Serious Injury to UK producers) (EU Exit) Regulations 2019 - supplements the Customs Act 2018; provides more detailed powers and functions and definitions for safeguard investigations [will not cover today]

Withdrawal Agreement vs No Deal When will this legislative framework begin to be used?

Withdrawal Agreement UK will remain subject to the EU’s trade remedy regime until the end of the transition period (end of 2020, possibly extended to end of 2022) Rationale: “Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.”(Article 127 of the Withdrawal Agreement) As there is no express exclusion of the EU’s basic anti-dumping, anti-subsidy and safeguard regulations and the Commission implementing regulations imposing anti- dumping, anti-subsidy, and safeguard measures, the entirety of the EU’s trade remedy environment will remain in place under the withdrawal agreement.

Withdrawal Agreement The EU’s trade remedy regime, and the EU’s trade remedies would continue to apply to the UK even after the end of the transition period if the provisions in the ‘Northern Ireland Backstop’ were to apply. Rationale: ‘The Union's trade defence regime, as well as the Union's Generalised Scheme of Preferences (GSP), shall cover both parts of the single customs territory. The Union shall consult the United Kingdom on any trade defence measures or actions under the GSP regime which it considers taking. At least 6 months before the end of the transition period, the Joint Committee shall set up the procedures for the application of this paragraph.’ Article 4(3) of Annex 2 to the Protocol on Ireland and Northern Ireland

Withdrawal Agreement Conclusion EU trade remedies regime will continue to operate until the end of transition and/or the backstop BUT The TRA/DIT will undertake a review of existing EU trade remedies to determine whether appropriate once transition/backstop come to an end

No Deal Should the UK Brexit on 31 October 2019, then the Customs Act would prevent the Withdrawal Act 2018 from transposing EU customs law into the UK (including the trade remedies orders) under paragraph 1 of Schedule 7. Instead, Regulation 95 of the DSR 2019 would transpose selected EU trade remedies into UK law Conclusion The UK would have left the EU trade remedies regime The TRA/DIT would conduct their reviews of existing EU orders immediately from Brexit date The TRA/DIT would begin operating independently investigating new reviews which relate to the UK from Brexit date

Reviews of EU Orders Call for evidence in November 2017 Which EU remedies should be maintained in the UK and reviewed to decide the appropriate level of duty once the UK is operating its own independent trade remedies framework. Maintain those remedies that met three criteria: the Government has received an application to maintain those measures from UK businesses which produce products in the UK that are subject to EU trade remedies measures; that a sufficient proportion of UK business support the application; and the market share of the UK businesses which produce those products is above a certain level.

Reviews of EU orders In February 2019, the UK Government published a provisional list of the 43 trade remedies it considered had met its criteria and the 66 that had not. https://www.gov.uk/government/consultations/call-for-evidence-to-identify-uk- interest-in-existing-eu-trade-remedy-measures/outcome/final-findings-of-the-call- for-evidence-into-uk-interest-in-existing-eu-trade-remedy-measures

Reviews of EU Orders Part 12 of the DSR 2019 contains the main legal framework under which a review will be conducted. Maintained orders will continue to attract the same rate as the transposed EU order (Reg 95 DSR 2019) The review must consider whether: dumping/subsidisation would continue and injury to the UK industry would occur if the order was removed (Reg 98(7) DSR 2019) Whether it is in the UK’s economic interest (Reg 100(3) DSR 2019) The level and form of the measure is appropriate (Reg 98(8) DSR 2019) TRA/DIT must then determine whether the EU order should be varied or revoked (Reg 100(2) DSR 2019) SoS must accept recommendation unless against public interest or the TRA could not reasonably have made its determination re: economic interest

Process of a Review Notice of Initiation Registration of interest Questionnaires and sampling Deficiency Letter Verification Visits Hearings Analysis of evidence and calculation of the duty Economic Interest Test Statement of essential facts and opportunity to comment Notice of final determination Appeals

Implications for EU Trade Remedies Brexit will impact the EU’s own trade remedies measures as determined on basis of EU-28. In the past, when the EU grew to include new member states, the Commission has permitted interested parties to request reviews of the EU’s measures. It is expected that the same will happen in this reverse situation, when a member state leaves the Union.

Next Steps? If no deal or withdrawal agreement comes into force: Relevant businesses should: register their interest in the case within the time period set out by the TRA once the notice of initiation has been published contact the European Commission, with a view to obtain a recalculation of the duty in the EU if favourable to them Useful guidance: https://www.gov.uk/guidance/trade-remedies-investigating- dumped-or-subsidised-goods

Contact Yves Melin Avocat Danyal Arnold Solicitor +32 2 626 0512 ymelin@steptoe.com Danyal Arnold Solicitor +44 20 4367 8068 darnold@steptoe.com