The future of EU-Trade Defence System 2007 Seoul International Forum on Trade Remedies 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  (IPR, TDI)  Acceptance and application of rules and values  Sector issues (steel, textile)  Environment / Social Issues

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 of exporters  While competitors within EU face strict rules (competition, environmental, social) almost no rules apply to competition from outside EU (except TDI) Trade Defence Instruments – AD/CVD

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

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

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

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

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

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

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

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

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

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

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

Green Paper  Conflict of interests between:  producing and  trading companies  Transparency  Politisation  Link with other policies  Procedural questions

State of play and main points : Main points raised by importers 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 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 Green Paper

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