Communication from the Commission - Global Europe - Europe's trade defence instruments in a changing global economy - A Green Paper for public consultation
Date: 2006-12-06
Institutions: European Commission
Subjects: World Trade Organisation, anti-dumping legislation, anti-subsidy proceeding, common commercial policy, competition law, protective clause, world economy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 6.12.2006 
COM(2006) 763 final 

COMMUNICATION FROM THE COMMISSION 

GLOBAL EUROPE 

Europe's trade defence instruments in a changing global economy  

A Green Paper for public consultation  

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GLOBAL EUROPE 

Europe's trade defence instruments in a changing global economy  

A Green Paper for public consultation  

(Text with EEA relevance) 

Introduction 

The  European  Union,  like  most  other  importing  economies,  operates  a  system  of  trade 
defence  instruments.  These  instruments  –  Anti-Dumping,  Anti-Subsidy  and  Safeguard 
measures  –  allow  the  European  Union  to  defend  its  producers  against  unfairly  traded  or 
subsidised imports and against dramatic shifts in trade flows in so far as these are harmful to 
the EU economy. It is important that we use these instruments effectively and rigorously to 
ensure respect of international trade rules and protect European interests against unfair trade.  

The EU’s use of these instruments is based on rules derived from the WTO agreements that 
establish trade defence instruments and the principles on which they operate as a legitimate 
part of the multilateral system of free trade. Like the urgent work to suppress counterfeiting 
and  intellectual  property  theft,  including  through  the  abuse  of  electronic  communications, 
defending against unfair trade is a politically and economically crucial part of defending free 
trade. It allows us to support the interests of European workers and European competitiveness, 
and  is  therefore  an  important  part  of  helping  Europe  manage  the  consequences  of 
globalisation. 

The  economic  rationale  for  Anti-Dumping  and  Anti-Subsidy  trade  defence  measures 
essentially  follows  from  the  fact  that  the  international  economy  has  no  mechanism  for 
correcting  anti-competitive  practice  similar  to  the  competition  authorities  that  operate  in 
almost  all  national  economies.  Furthermore,  very  few  jurisdictions  have  formal  rules  or 
institutions for subsidy control similar to the European Union’s state aid rules. Trade defence 
instruments have developed in international law as a means of correcting the trade distorting 
effects of uncompetitive practice at the international level. 

European trade defence action over the last decade has eliminated the trade distorting effects 
of dumping in important sectors such as steel, chemicals and microprocessors that threatened 
the continued viability of these industries and their thousands of workers in Europe. 

The EU has gone further than any other WTO member in unilaterally building on WTO rules 
to tighten conditions for use and focus the impact of trade defence action in its own market. 
The EU has produced a system of trade defence instruments that is arguably more open and 
more  balanced  than  any  other  WTO  member.  The  EU  has  also  led  the  debate  on  reforming 
WTO rules on trade defence, which has been an integral part of the Doha Round. The faithful 
application of those internationally agreed rules by all members of the WTO is crucial for the 
functioning  of  the  international  trading  system.  This  insistence  that  all  must  adhere  to  the 
agreed rules in this field must remain a guiding objective for our policy in future. 

Nevertheless,  in  the  decade  since  the  1994  Agreement  on  Anti-Dumping  and  the  last  major 
reform of EU trade defence instruments, there have been far-reaching changes in the global 

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economy and in the structure of the EU economy. These have been an important factor in the 
overall priorities of this Commission in promoting a new growth and competitiveness agenda. 
These priorities are set out in the Commission’s contribution to the Hampton Court European 
Council: European values in a globalised world. 

Many  more  EU  companies  now  produce  goods  outside  the  EU  for  import  into  the  EU,  or 
operate  supply  chains  that  stretch  beyond  the  EU  market.  These  changes  challenge  familiar 
understandings of what constitutes EU production and the EU's economic interests. Because it 
is  precisely  these  things  that  trade  defence  instruments  are  intended  to  defend,  a  periodic 
review  can  help  us  to  ensure  that  the  EU’s  trade  defence  instruments  remain  an  effective 
response  to  unfair  trading  practices.  This  may  also  help  to  maintain  strong  political  support 
behind the use of these necessary instruments across the EU.  

The Commission has recently highlighted a new policy agenda designed to reinforce the EU’s 
capacity  to  compete  in  a  global  economy  marked  by  the  growing  fragmentation  and 
complexity  of  the  process  of  production  and  supply  chains  and  the  growth  of  major  new 
economic  actors,  particularly  in  Asia  (Global  Europe:  Competing  in  the  World).  This 
reflection on the EU’s trade defence instruments is an integral part of that agenda. The Green 
Paper  does  not  question  the  fundamental  value  of  trade  defence  instruments,  but  invites  a 
public  reflection  on  how  the  EU  can  continue  to  use  them  to  best  effect  in  the  European 
interest. 

The  Green  Paper  draws  on  the  European  Commission’s  experience  of  managing  the  use  of 
trade defence instruments as well as on the results of a recent evaluation study of them. It also 
reflects informal contacts with EU Member States and the European Parliament and a series 
of  papers  submitted  to  EU  Trade  Commissioner  Peter  Mandelson  by  experts  in  the  field  of 
trade defence instruments in July 20061. 

The paper groups the issues into six themes;  

(1) 

(2) 

the role of trade defence instruments in a changing global economy;  

the weighting of different EU interests in trade defence investigations;  

(3) 

the launch and conduct of trade defence investigations;  

(4) 

the form, timing and duration of trade defence measures;  

(5) 

the transparency of trade defence investigations and;  

(6) 

the institutional structure of trade defence investigations. 

For each group of issues it raises a series of questions to which participants to the consultation 
are invited to respond. 

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http://ec.europa.eu/trade/issues/respectrules/anti_dumping/legis/index_en.htm#txts. 

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Box 1: Europe's trade defence instruments 

Anti-Dumping.  Anti-Dumping  rules  are  the  European  Union’s  most  used  form  of  trade 
defence  instrument.  Anti-Dumping  measures  address  the  import  of  goods  to  the  European 
Union at less than their normal value in their home market – usually as a result of the lack of 
competition  and/or  state  interference  in  the  production  process  that  allows  an  exporter  to 
artificially  lower  the  cost  of  an  export.  Dumping  harms  both  EU  producers  but  also  other 
producers in third countries that compete for access  to the EU market. Typical examples of 
distortions  leading  to  dumping  include:  significant  tariff  and  non-tariff  barriers,  insufficient 
enforcement  of  competition  rules,  export  tax  breaks;  artificially  low  raw  material  and/or 
energy prices. Where an EU investigation shows that these imports are harming EU producers 
Anti-Dumping  rules  allow  for  remedial  measures  to  correct  the  injury.  Normally  this  is  the 
imposition of a duty on the dumped import. 

Anti-Subsidy.  Anti-subsidy  measures  are  similar  to  Anti-Dumping  measures  except  they 
specifically  correct  the  trade-distorting  effect  of  WTO-actionable  subsidies  to  foreign 
producers, where these subsidies can be shown to be harming EU producers. 

Safeguards.  Safeguard  measures  are  different  in  that  they  do  not  focus  on  whether  trade  is 
fair or not, but on shifts in the volume of trade that are so swift and on such a scale that EU 
producers  cannot  reasonably  be  expected  to  adapt  to  changed  trade  flows.  In  these 
circumstances,  WTO  and  EU  rules  allow  for  short-term  restrictions  on  imports  to  give 
industry  temporary  relief  in  order  to  adapt  to  this  sudden  surge.  This  temporary  breathing 
space goes hand in hand with the clear obligation to restructure. 

Between  January  1996  and  December  2005,  the  EU  imposed  194  definitive  Anti-Dumping 
measures.  The  countries  most  frequently  found  to  be  involved  in  dumping  were  China  (38 
measures) and India (16 measures) during this period. As of 31 October 2006, the EU has 12 
Anti-Subsidy  measures  in  force.  The  EU  has  only  ever  imposed  eight  definitive  safeguard 
measures under WTO rules: only one of these is still in force. In the EU, Anti-Dumping and 
Anti-Subsidy  measures  against  unfair  trade  represent  less  than  0.45%  of  the  value  of  total 
imports. 

In  comparison,  the  US  imposed  201  definitive  measures  and  India  imposed  309  definitive 
measures between 1996 and 2005. In the same period the EU initiated 294 investigations, the 
US 352 and India 419 investigations.  

The  European  Commission  is  responsible  for  the  conduct  of  Anti-Dumping,  Anti-Subsidy 
and  Safeguard  investigations,  including  decisions  on  whether  to  open  investigations  in 
response to industry complaints, and reviews during the life of current measures. It may also 
impose provisional measures and proposes definitive measures to the Council, where these are 
warranted. The Council imposes definitive Anti-Dumping/Anti-Subsidy measures by simple 
majority  while  Safeguard  measures  require  the  support  of  a  qualified  majority  of  Member 
States. 

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PART 1. What is the role of trade defence measures in a global economy? 

The  economic  justification  for  Anti-Dumping  measures  derives  chiefly  from  the  fact  that 
international  markets  are  imperfectly  competitive  –  there  is  no  international  competition 
authority to regulate anti-competitive behaviour between countries. In contrast to an internal 
market  like  the  EU,  there  are  few  rules  that  regulate  business  behaviour  on  international 
markets.  

Anti-Dumping  measures  are  the  only  tool  provided  for  in  international  law  to  address  the 
effects of unfairly traded imports from such markets on EU industry. Similarly Anti-Subsidy 
measures counter unfair subsidisation of producers in third countries in the absence of fully 
developed  international  means  of  limiting  such  intervention.  Safeguard  measures  are 
targeted  against  imports  that  increase  in  such  quantities  as  to  cause  or  threaten  to  cause 
serious injury to the EU industry. 

The EU currently initiates significantly more Anti-Dumping investigations than Anti-Subsidy 
investigations. One reason why companies are reluctant to request Anti-Subsidy cases is that 
they  fear  retaliation  by  the  governments  concerned.  One  solution  to  this  might  be  for  the 
Commission itself to initiate more Anti-Subsidy cases. 

The  economic  justification  for  trade  defence  instruments  remains  controversial  amongst 
economists.  Some  argue  that  trade  defence  instruments  are  needed  in  the  absence  of 
internationally  agreed  competition  rules.  Others  believe  trade  defence  measures  cannot  be 
economically justified from the perspective of the overall welfare of a country. Others argue 
that they could potentially be misused by sectoral interests as a means of obtaining protection 
from  competitive  imports.  Yet  others  argue  that  Anti-Dumping  action  is  only  justified  if  an 
exporter in a third country  benefits from a lack  of, or insufficient  enforcement  of,  domestic 
competition rules.  

Question 1: What is the role of trade defence instruments in the modern global economy? Do 
trade defence instruments remain essential in order to ensure respect for international trade 
rules  and  to  protect  European  interests?  Should  the  EU  consider  how  they  might  be 
improved? 

Question  2:  Should  the  EU  make  greater  use  of  Anti-Subsidy  and  Safeguard  instruments 
alongside its Anti-Dumping actions? Should the Commission, in particular circumstances, be 
ready  to  initiate  more  trade  defence  investigations  on  its  own  initiative  provided  it  is  in 
possession of the required evidence? 

Question 3: Are there alternatives to the use of trade defence instruments in the absence of 
internationally agreed competition rules? 

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PART 2. Weighing different EU interests in trade defence investigations 

Trade defence measures must serve the overall economic interest of the EU, including that of 
producers and workers. EU rules need to continue to address situations in which lower import 
prices are not driven solely by true comparative advantages in labour and production costs in 
third countries, but reflect the fact that those advantages are topped up by unfair competitive 
conditions such as subsidies or other state induced distortions.  

Changes  in  the  structure  of  both  the  global  and  EU  economies  have  made  determining  the 
EU’s economic interests more complex. Globalisation increases the international division of 
labour as transportation and communication costs have substantially decreased. Increasingly, 
European  companies  are  using  production  bases  outside  the  European  Union  whilst 
maintaining significant operations and employment in Europe. From the perspective of trade 
defence instruments, the challenge is to consider whether EU rules take sufficient account of 
the  reality  of  outsourced  production  by  European  businesses,  which  are  then  in  competition 
with EU-based production and might be negatively affected by trade defence measures.  

It is not in the EU’s long-term economic interest to tolerate dumping, even where it benefits 
European  companies  that  have  outsourced  production  to  third  countries.  But  we  do  need  to 
reflect  on  the  fact  that  action  to  limit  the  injury  caused  by  dumping  can  impact  on  the 
employment and viability of EU companies that are operating legitimately through outsourced 
production.  Striking  the  right  balance  between  free  trade  and  fair  trade  is  crucial.  We  need 
clear rules that help us address this situation.  

This part of the paper relates to four key issues related to the Community interest test. 

Box 2: Case study - Anti-dumping measures on leather shoes, August 2006 

In  October  2006  the  European  Union  imposed  duties  of  16.5%  and  10%  on  certain  leather 
shoes imported to the European Union. These duties were the result of an investigation that 
found both dumping of these exports from certain third countries and consequent injury to EU 
producers.  The  application  of  EU  and  WTO  rules  in  this  highly  complex  case  provoked 
divisions among EU economic operators and EU Member States. The case illustrated two of 
the important issues that this Green Paper considers. 

Outsourcing by EU producers. Although many EU companies still produce leather footwear 
in  the  European  Union,  a  significant  number  of  EU  companies  have  outsourced  the 
production of footwear to third countries while keeping other parts of their operations in the 
EU.  Those  EU  companies  that  produce  leather  shoes  in  the  third  countries  concerned  are 
subject  to  the  Anti-Dumping  duty.  Moreover,  under  the  existing  rules  for  Anti-Dumping 
investigations,  only  producers  that  keep  their  production  within  the  EU  were  considered  in 
determining  whether  the  required  proportion  of  Community  industry  for  the  case  to  be 
initiated  was  met.  Yet  the  number  of  EU  companies  that  are  moving  elements  of  their 
production is growing and these companies account for thousands of jobs in the EU. 

Consumer  interest.  The  footwear  case  also  illustrated  another  problem  in  the  context  of 
determining  what  is  in  the  wider  economic  interest  of  the  EU.  In  the  majority  of  cases, 
especially  those  which  do  not  concern  consumer  products,  the  impact  of  Anti-Dumping 
measures on the prices paid by the consumer have typically not been significant. Nonetheless, 
it is important to reflect on the question of whether and how consumer interests can be better 
reflected in Anti-Dumping investigations, and any measures taken. 

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2.1. The Community interest test. The EU is one of the few trade defence users that applies 
a  public  interest  test  in  the  form  of  the  Community  interest  rule  before  applying  Anti-
Dumping  measures.  The  Community  interest  rule  states  that  measures  can  only  be  imposed 
where the Commission determines that imposing them is not against the wider interest of the 
EU  economy.  Such  a  test  is  not  required  by  the  WTO  Anti-Dumping  Agreement  but  it  has 
proved a useful factor in weighing the balance of interests in Anti-Dumping cases.  

However, some argue that the Community interest test is too strongly weighted towards EU 
producers  and  does  not  take  sufficient  account  of  the  impact  of  measures  on  importing 
businesses that have moved some of their production outside the EU. There is also concern 
that  consumer  interests  are  not  adequately  weighted,  especially  when  trade  defence 
instruments  are  applied  to  finished  consumer  products.  While  the  principal  concern  of  the 
EU’s  instruments  is  responding  to  the  effect  of  unfair  competition,  recent  cases  have  also 
raised the question of using the Community interest test to weigh the impact of measures on 
the  overall  coherence  of  EU  policy.  For  example,  the  EU  might  consider  whether  in  some 
cases  Anti-Dumping  measures  reduce  the  effectiveness  of  EU  development  assistance  to  a 
given country.  

Question 4: Should the EU review the current balance of interests between various economic 
operators  in  the  Community  interest  test  in  trade  defence  investigations?  Alongside  the 
interests  of  producers  and  their  employees  in  Europe,  how  should  we  take  into  account  the 
interests of companies which have retained significant operations and employment in Europe, 
even though they have moved some part of their production out of the EU? How should we 
take into account the interests of importers or producers who process affected imports? 

Question 5: Do we need to review the way that consumer interests are taken into account in 
trade  defence  investigations?  Should  the  Commission  be  more  proactive  in  soliciting  input 
from  consumer  associations?  How  could  such  input  be  weighted?  How  could  the  impact  of 
trade defence measures on consumers be assessed and monitored? 

Question  6:  Should  the  EU  include  wider  considerations  in  the  Community  interest 
assessments in trade defence investigations, such as coherence with other EU policies? With 
regard  to  development  policy,  should  the  EU  make  a  formal  distinction  between  least 
developed countries and developing countries in the application of trade defence measures?  

Question 7: What kinds of economic analysis might help in making these assessments? 

2.2. Using the Community interest test to fine-tune trade defence measures. Currently the 
findings  of  the  Community  interest  test  can  only  conclude  that  measures  should  either  go 
ahead  or  not  be  imposed.  In  principle,  this  “either/or”  test  does  not  allow  for  Community 
interest  analysis  to  be  used  as  a  rationale  for  adapting  or  modifying  measures.  However,  it 
may be appropriate to introduce more flexibility in this respect provided that any adjustment 
of measures fully reflects the objective findings of the case. Such flexibility would be limited 
to downward adjustments by the EU’s lesser duty rule which requires that duties be set at the 
injury margin or the dumping margin, whichever is lower. It could also in theory extend to the 
ability to exempt certain products from duties for Community interest reasons. 

Question  8:  Should  it  be  explicitly  foreseen  that  the  level  of  proposed  measures  might  be 
adjusted  downwards  following  the  results  of  the  Community  interest  test  in  trade  defence 
investigations?  Should  the  EU  explicitly  allow  for  exclusion  of  certain  product  types  under 
Community interest considerations? If so, what criteria should be applied? 

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2.3. Deciding when to apply the Community interest test. Currently, a Community interest 
test  is  foreseen  only  following  the  initiation  of  an  investigation  at  the  time  of  determining 
measures.  WTO  rules  prohibiting  the  publicizing  of  anti-dumping  complaints  prior  to 
launching  an  investigation  currently  preclude  the  use  of  the  Community  interest  test  in 
assessing the strength of an initial complaint. However some stakeholders have suggested that 
the EU should press to see these rules changed.  

Question  9:  Should  the  EU  seek  to  have  WTO  rules  changed  to  allow  Community  interest 
tests to be used at the complaints stage in Anti-Dumping and Anti-Subsidy investigations? Are 
there other situations where the community interest test would be appropriate – for example 
before the initiation of expiry reviews? 

2.4.  Viability  assessments.  The  overall  viability  of  the  industry  in  the  EU  is  an  element 
investigated in the Community interest test. Where there are good prospects for the viability 
of a particular sector this is an important factor in assessing whether to impose trade defence 
measures.  

Question 10: Are viability assessments relevant in reaching decisions on using trade defence 
instruments? If so, what criteria should be used in assessing the viability of EU industries in 
trade defence investigations, e.g. level of production, employment, market share?  

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PART 3. The launching and conduct of trade defence investigations 

Stakeholders have identified a number of technical areas related to the launching and conduct 
of  trade  defence  investigations  where  changes  could  further  improve  the  proportionality, 
efficacy and fairness of EU trade defence investigations. Eight of these issues are addressed 
below: 

3.1.  Early  consultations  with  the  exporting  third  countries.  While  WTO  rules  prohibit 
contact  with  companies  that  may  be  investigated  prior  to  the  launch  of  a  case,  some 
stakeholders proposed contacts with exporting third countries' governments prior to launching 
investigations to help to avoid political frictions and discuss the products and practices likely 
to be implicated in an investigation. 

Question  11:  Should  the  EU  consider  consultations  with  exporting  third  countries  after 
receiving complaints and prior to launching Anti-Dumping investigations? 

3.2. The use of the Anti-Subsidy instrument in transition economies. Current practice does 
not  foresee  the  initiation  of  Anti-Subsidy  investigations  in  cases  involving  economies  in 
transition  because  of  the  widespread  nature  of  distortions  of  costs  and  prices  in  such 
economies. However, the use of the Anti-Subsidy instrument could be considered in cases in 
which  individual  companies  in  economies  in  transition  are  awarded  market  economy 
treatment. 

Question 12: Should the EU more specifically foresee the use of the Anti-Subsidy instrument 
in cases involving companies in transition economies that receive market economy treatment? 

3.3.  Standing  requirements.  The  EU  imposes  certain  requirements  that  must  be  met  for  a 
trade defence investigation to be launched. WTO rules require that an investigation normally 
be  initiated  only  when  producers  expressly  supporting  the  complaint  account  for  more  than 
25% of total production of the product implicated in the market concerned. 

Under  current  rules  businesses  that  both  produce  and  import  the  allegedly  dumped  product 
may be excluded from the standing assessment. This has the effect of lowering the number of 
companies required to establish standing in a given case, and excluding companies that may 
object to a complaint. Some stakeholders consider these so-called ‘standing requirements’ too 
low.  

Question  13:  Should  the  EU  review  the  ‘standing  requirements’  for  the  definition  of 
Community industry in Anti-Dumping and Anti-Subsidy cases? Is the level of support needed 
to endorse a complaint and thus launch an investigation appropriate? Should we review the 
possibility of excluding companies which themselves import or are related to exporters from 
standing assessments? 

3.4.  De-minimis  rules  for  dumping,  subsidy  and  injury.  Under  current  rules,  thresholds 
exist  below  which  cases  under  investigation  are  not  considered  of  sufficient  importance  to 
merit  EU  intervention.  EU  Anti-Dumping  law  stipulates  that  an  investigation  shall  be 
terminated if the margin of dumping is less than 2% expressed as a percentage of the export 
price – this is called the ‘de-minimis threshold’. 

A de-minimis threshold is also applicable in the determination of injury from dumped goods. 
Proceedings  are  not  initiated  against  countries  whose  imports  represent  less  than  1%  of  the 

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EU  market.  The  current  de-minimis  thresholds  could  be  higher  or  lower,  depending  on  the 
perceived economic impact of low dumping/subsidy margins and injury thresholds. 

Besides  these  percentage  thresholds,  a  second  "de-minimis  test"  could  be  considered  by 
making the opening of a case dependent on the value of imports in Euro. 

Question  14:  Should  the  EU  change  the  de-minimis  thresholds  (in  percentage  and  absolute 
terms) that currently apply to dumping and injury in trade defence investigations? 

3.5. Dumping margin calculations. An important part of an Anti-Dumping investigation is 
the determination of the production costs and normal value of a product in the home market. 
Some stakeholders have suggested that the EU does not take sufficient account of the extent 
to which low volumes produced and sold at the start-up phase of a product can distort per-unit 
costs  and  might  make  them  appear  unrealistically  high.  This  in  turn  could  possibly  inflate 
dumping margins. 

Question  15:  Should  the  Commission  refine  the  approach  on  "start-up  costs"  for  dumping 
calculations  in  Anti-Dumping  investigations  in  order  to  give  a  longer  "grace  period"  to 
exporters in start-up situations? 

Question  16:  Are  there  other  changes  to  the  dumping  margin  calculation  methodology  in 
Anti-Dumping  investigations  –  for  example  existing  rules  on  the  "ordinary  course  of  trade-
test" – that need to be considered? 

3.6. Treatment of new exporters. Stakeholders have proposed refining the provisions on the 
treatment  of  new  exporters  who  begin  exporting  goods  while  an  investigation  is  underway. 
New exporters raise the problem of basing findings on a very small number of transactions. 
The Commission can also currently only address new exporters that start to operate during the 
investigation through a separate newcomer review. 

Question 17: Should the EU refine the provisions on the treatment of new exporters in Anti-
Dumping and Anti-Subsidy investigations? Should the EU introduce the possibility of dealing 
with  newcomers  that  start  to  operate  during  the  investigation  of  the  main  case  more 
expeditiously? 

3.7. Restructuring plans. Some stakeholders think that EU producers should be required to 
present a restructuring plan before they benefit from Anti-Dumping measures. Others take the 
view  that  where  the  problems  of  an  industry  are  the  direct  consequence  of  unfair  trade 
practices, restructuring is irrelevant. 

Question  18:  Is  evidence  of  restructuring  by  an  EU  industry  in  any  way  relevant  in  Anti-
Dumping and Anti-Subsidy investigations? If yes, in what way, and at what stage? 

3.8. Involvement of SMEs. Many stakeholders think that SMEs have difficulties in launching 
and  participating  in  trade  defence  investigations  because  of  the  complexity  and  high  costs 
involved. 

Question  19:  What  are  the  particular  obstacles  for  SMEs  to  participate  in  trade  defence 
investigations and how could they be addressed?  

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PART 4. The form, timing and duration of trade defence measures 

Stakeholders have identified a number of areas related to the imposition, form, duration and 
expiry  of  trade  defence  measures  that  could  be  reviewed.  We  address  four  issues  in  this 
section. 

4.1.  Timing  of  provisional  measures.  Some  stakeholders  have  raised  the  issue  of  faster 
adoption  of  provisional  Anti-Dumping  measures.  At  present  they  are  adopted  by  the 
Commission between two and nine months after the launch of an investigation, if preliminary 
evidence points to a finding of injurious dumping. 

Question 20: Bearing in mind  that  any shortening  of deadlines could impose limitations on 
the  conduct  and  transparency  of  investigations,  should  the  EU  consider  shortening  the 
deadlines  in  Anti-Dumping  and  Anti-Subsidy  investigations  within  which  it  must  decide 
whether  or  not  to  impose  provisional  measures?  Should  these  deadlines  be  made  more 
flexible? 

4.2.  Form,  timing  and  duration  of  measures.  Many  stakeholders  have  said  that  the  EU 
should have a greater choice of possible measures at its disposal than the standard ad valorem 
duties,  fixed  duties,  minimum  prices  and  price  undertakings.  This  would  give  greater 
flexibility  in  dealing  with  complex  cases  which  involve  important  consumer  products.  For 
example, should the Commission, to the extent that the Community's international obligations 
allow, generally have the possibility to apply a duty that phases in over time or with import 
volume, so as to give the market time to adapt? 

Some stakeholders have also said that measures should take account of the impact on products 
that may have been ordered long before measures have been adopted or that are being shipped 
at the time of adoption. 

Currently  measures  are  normally  in  force  for  five  years  –  the  WTO  maximum.  It  has  been 
suggested that the duration of measures could be shorter, depending, for example, on the type 
of product, the market situation or the characteristics of an industry. The duration of measures 
imposed following expiry reviews could also be shorter. 

Question  21:  Should  the  EU  make  greater  use  of  more  flexible  measures  in  Anti-Dumping 
and Anti-Subsidy investigations? 

Question 22: Do EU measures in Anti-Dumping and Anti-Subsidy investigations need to be 
adapted so as to take better account of products with a long order or shipment time? If yes, 
how? 

Question 23: Should it be made explicitly possible for the duration of definitive measures in 
Anti-Dumping and Anti-Subsidy investigations to be shorter than 5 years? If yes, in what type 
of situations would a shorter duration of measures be justified? 

4.3.  Reimbursement  of  duties  after  expiry  reviews.  Measures  currently  expire  after  five 
years  unless  an  expiry  review  is  initiated  before  that  date.  During  the  ensuing  investigation 
(which can run for up to 15 months beyond the five-year period), measures remain in force. If 
the expiry review concludes that measures should not be maintained, consideration could be 
given to paying back any duties collected beyond the ‘normal’ five year period. An alternative 

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could be to carry out and conclude expiry reviews before the maximum lifetime of measures 
ends. With this approach reimbursement would not be an issue. 

Question  24:  Should  duties  collected  beyond  the  5-year  duration  of  the  measures  in  Anti-
Dumping  and  Anti-Subsidy  investigations  be  reimbursed  if  the  expiry  review  concludes  that 
measures are not to be continued? 

Question  25:  Should  expiry  reviews  in  Anti-Dumping  and  Anti-Subsidy  investigations  be 
timed to end on the fifth anniversary of measures rather than to start on that date? 

4.4.  Higher  thresholds  for  expiry  reviews.  Some  stakeholders  think  that  it  is  too  easy  for 
Anti-Dumping  measures  to  be  renewed.  Under  WTO  and  EU  rules,  industry  needs  to  show 
that there is "likelihood of recurrence of injurious dumping". A higher threshold for industry 
might be a "clearly foreseeable and imminent threat of injury". 

Question  26:  Should  the  EU  increase  thresholds  for  expiry  reviews  in  Anti-Dumping  and 
Anti-Subsidy investigations? For example should the EU consider introducing the "threat of 
injury"- standard instead of the "likelihood of recurrence"? 

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PART 5. Transparency in trade defence investigations 

Effective  transparency  is  vital  to  the  credibility  of  trade  defence  instruments.  EU  rules 
represent a balance between openness in managing investigations and the need to respect the 
confidentiality  of  commercial  information.  The  quality  of  analysis  and  resulting  proposals 
depends  strongly  on  the  quality  of  the  confidential  information  provided  during  an 
investigation.  Stakeholders  have  raised  a  number  of  possible  ways  that  the  European 
Commission  could  nevertheless  improve  the  transparency  of  trade  defence  investigations. 
Four of the aspects related to transparency are addressed below: 

5.1. Hearing officer. Current EU rules foresee the possibility for interested parties to request 
hearings.  Some  parties  have  argued  that  a  hearing  officer  would  be  helpful  to  ensure  that 
parties in trade defence investigations can better exercise their right to be heard and to ensure 
that the rights of the parties are respected.  

Question  27:  The  Commission  is  going  to  create  the  position  of  a  hearing  officer  for  trade 
defence investigations - what precise functions should such a person carry out? 

5.2.  Public  hearings  for  country-wide  Market  Economy  Status  decisions.  Certain 
countries are not considered market economies for the purpose of trade defence investigations 
–  China  and  Vietnam  for  example.  These  countries  can  be  awarded  the  status  of  market 
economy  if  they  fulfil  certain  technical  criteria.  In  view  of  the  importance,  complexity  and 
political sensitivity of decisions to award country-wide Market Economy Status (MES), many 
stakeholders recommend holding public hearings prior to the Commission proposing to grant 
MES to a country. 

Question 28: Should the Commission conduct public hearings in Anti-Dumping investigations 
for decisions to award country-wide Market Economy Status to a country? 

5.3.  A  level  playing  field  for  information.  Stakeholders  have  expressed  concern  about  the 
uncertainty  caused  by  rumours  of  possible  complaints  or  investigations.  The  question  has 
been  raised  whether  the  work  of  the  advisory  Anti-Dumping  Committee  could  be  rendered 
more transparent.  

Question 29: Should there be greater openness regarding the working of the Anti-Dumping 
Committee, e.g. publication of its agenda and/or the minutes of its meetings? 

5.4.  Better  access  to  non-confidential  files.  If  parties  want  to  consult  the  non-confidential 
file of an Anti-Dumping investigation, they currently have to do this in person at the premises 
of  the  European  Commission.  It  would  be  possible  to  provide  access  to  these  materials  on-
line.  However,  some  stakeholders  might  consider  this  an  undesirably  wide  dissemination  of 
non-confidential business facts. 

Question  30:  Would  it  be  desirable  for  the  non-confidential  files  in  trade  defence 
investigations  to  be  accessible  via  the  internet?  Would  intermediary  solutions  be  more 
appropriate – for example the publication of a file index? 

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PART 6. Institutional process 

While the use of trade defence instruments can be politically sensitive, the credibility of those 
instruments  depends  on  their  use  being  transparent,  predictable  and  subject  to  stringent 
review. The decisions which are taken must be based on the results shown by investigations. 
The current institutional structure, as set out by the EU’s Basic Regulations on trade defence 
instruments, divides responsibilities between the Commission and the Council. Decisions are 
subject to review by the European Court of Justice, and must also be compliant with the EU’s 
WTO  obligations.  This  institutional  framework  has  worked  well,  but  some  stakeholders  are 
concerned that it sometimes allows decisions to be influenced by factors not directly linked to 
the facts of the investigation itself. 

Question  31:  Should  current  institutional  arrangements  for  adopting  Anti-Dumping,  Anti-
Subsidy  and  Safeguard  measures  be  maintained?  Are  there  ways  to  improve  the  way  those 
decisions are taken? 

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Contributing to this Green Paper consultation  

Comments  are  invited  from  all  interested  parties,  including  the  European  Parliament  and 
Member  States,  on  the  questions  raised  in  this  Green  Paper.  A  structured  questionnaire  is 
available on-line to assist those responding and the Commission would welcome the views of 
all interested actors, including the views of public authorities in third countries. 

The  Commission  invites  respondents  to  raise  issues  related  to  the  EU’s  trade  defence 
instruments that are not directly addressed in the preceding questions. 

Question 32: Is there any other aspect of the EU’s trade defence instruments that you would 
like to see addressed? 

The consultation response forms can be found at: 

http://ec.europa.eu/trade/issues/respectrules/anti_dumping/comu061206_en.htm 

Replies  to  the  questionnaire  should  reach  the  Commission  by  31  March  2007.  Comments 
received will be made available on-line unless a specific request for confidentiality is made, in 
which  case  only  an  indication  of  the  contributor  will  be  given.  Towards  the  end  of  the 
consultation period the Commission's services intend to organise a seminar with stakeholders. 
Following  this  public  debate,  the  Commission  will  communicate  the  results  of  this 
consultation and consider if further action is appropriate. 

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