REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT NINTH REPORT OVERVIEW OF THIRD COUNTRY TRADE DEFENCE ACTIONS AGAINST THE EUROPEAN UNION (STATISTICS UP TO 31 DECEMBER 2011 BUT COMMENTARY ON CASES AND TEXT IS UPDATED TO MARCH 2012)
Date: 2012-06-28
Institutions: European Commission
Subjects: Belarus, Brazil, China, India, Indonesia, Israel, Jordan, Kazakhstan, Russia, Türkiye, Ukraine, United States, anti-dumping measure, export (EU), protectionism, trade dispute

EUROPEAN COMMISSION 

Brussels, 28.6.2012 
COM(2012) 344 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 

NINTH REPORT 

OVERVIEW OF THIRD COUNTRY TRADE DEFENCE ACTIONS 
AGAINST THE EUROPEAN UNION 

(STATISTICS UP TO 31 DECEMBER 2011 BUT COMMENTARY ON CASES AND 
TEXT IS UPDATED TO MARCH 2012) 

{SWD(2012) 184 final} 

EN 

   EN 

 
 
 
  
 
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 

NINTH REPORT 

OVERVIEW OF THIRD COUNTRY TRADE DEFENCE ACTIONS 
AGAINST THE EUROPEAN UNION 

(STATISTICS UP TO 31 DECEMBER 2011 BUT COMMENTARY ON CASES AND 
TEXT IS UPDATED TO MARCH 2012) 

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1. 

INTRODUCTION 

Since the beginning of the global crisis at the end of 2008 the use of trade defence instruments 
against the EU has been quite intense. It was feared that in many of the new investigations the 
relevant rules would not be adequately applied and that the instruments would be abused in 
order to offer protection to national industries and shield them from foreign competition.  

The situation in 2011 has only slightly recovered and, as will be showed below, the use of the 
trade defence instruments against the EU has stabilised. The number of new investigations 
remains however rather high and the complexity of the cases has increased. In some instances, 
despite abundant and vigorous interventions, important issues could not have been solved at 
technical level and WTO dispute settlements could not be avoided.  This has generated a high 
level of activity this year. 

This report describes overall trends, the problems identified and results achieved in 2011. It 
also gives in the annex a detailed analysis of trends and specific cases of the most important 
users of the instrument.     

2.  OVERALL TRENDS 

There were 146 measures in force at the end of 2011, which represents and increase of 23 
measures as compared to last year's. This is the highest figure since 2008. Since then the 
number of measures followed a decreasing trend. 

The vast majority of these measures are from the area of anti-dumping (94 in 2011 as 
compared to 89 in 2010), but the proportion of safeguards is ever increasing (46 as compared 
to 30). This is the main reason for the high number of measures this year. Countervailing 
measures only represent a minor portion. 

The USA remains the country with the most measures in place (23), followed by China and 
India (each 15), Turkey (13) and Brazil (12). It should also be noted that Indonesia makes a 
remarkable move from 2 to 8 measures, all of them being safeguards. 

In total, 36 new measures have been imposed in 2011. This is much more than the 15 
impositions in 2010. While the number of anti-dumping measures imposed was not 
insignificant (13 in 2011 as compared to 8 previously), the development in terms of 
safeguards was remarkable. Indeed, not less than 22 safeguard measures were imposed in 
2011. This figure should however be nuanced with the fact that 8 of these measures only 
consisted of the extension of Russian measures to the territory of Belarus and Kazakhstan 
following their newly constituted Customs Union. In addition, this figure also includes 6 
measures which were imposed by Indonesia but concern products which are hardly exported 
from the EU. The impact of this expansion of safeguard measures is thus relatively limited for 
EU firms. 

The number of new investigations is the best indicator of third countries' TDI activity. Indeed, 
while not all investigations result in measures – and would thus not be reflected in the above 
statistics – each new proceeding normally affects trade flows during the time of the 
investigation and requires significant efforts for exporters in order to defend their interests. In 

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this respect, the number of new investigation has significantly increased since the end of 2008, 
i.e. the beginning of the global crisis, and has remained important since then. This year, 33 
new investigations have been initiated as compared to 40 in 2010. It should however be 
noted that this figure includes a number of investigations limited to the possible extension of 
Russian measures to the territory of the new Customs Union, as well as two investigations 
covering the territory of the Customs Union but counted as individual investigations for each 
country. 

The vast majority of these new investigations concern safeguards (20), the remaining being 
exclusively anti-dumping investigations.  Some of these new investigations would possibly 
affect significant trade flows and therefore require careful monitoring as well as numerous 
interventions at various level. Other cases, of less important economic interest, are also very 
important because of the systemic nature of the problems identified and also require specific 
vigilance.        

3.  ONGOING PROBLEMS 

During the last years the Commission has intensified its interventions in order to solve the 
problems identified in individual cases. These issues are also addressed bi-laterally in the 
framework of either ad-hoc or regular meetings with the authorities of third countries. These 
meetings have been successful to some extent as we have seen some improvement in the 
practice of certain third countries. For example, some countries have now improved 
transparency when they disclose the results of their investigations by giving an indexation of 
confidential data rather than disclosing no figures at all. This is a positive development. 

Unfortunately, the problems identified in the past still exist despite the fact that these have 
been raised numerous times at various levels. The Commission therefore continued its efforts 
to do whatever is necessary and possible – including recourse to WTO dispute settlement – in 
order to ensure that basic WTO rules are strictly applied and that trade defence instruments 
are not abused. 

The main persisting problems are the following:  

3.1. 

Inappropriate use of the instruments 

Since a couple of years there have been obvious indications that TDI cases were initiated in 
reaction to measures imposed by the EU rather than based on justified grounds supported by a 
duly documented application made by the domestic industry concerned.  

As mentioned in last year's annual report, the EU has been confronted with a countervailing 
investigation and another investigation based on threat of injury shortly after having used the 
same instrument/criteria against the country that had initiated these two investigations. There 
had also been cases against the EU concerning products similar to those which were 
previously targeted by EU investigation. In all these cases, it is very difficult to believe in a 
pure coincidence. 

This trend has unfortunately continued in 2011. Indeed, the investigations mentioned above 
have materialised with the imposition of definitive duties despite some evident weaknesses, 
and another 'mirror investigation' has been initiated in 2011. These are not isolated cases as 
other WTO members have been confronted with the same issues. Recently, there have been 
threats of further similar action.  

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Such a use of the instrument is inadequate and not acceptable. The Commission addressed 
this issue at both political and technical level (including in WTO fora) and will not hesitate to 
have recourse to WTO dispute settlement when the cases lack any substance. Indeed, the 
pattern of these cases is often very similar with weak standards of initiation (often also 
lacking transparency by abusing the rules on confidentiality) and no evidence of injury. 

3.2.  Lack of transparency 

Transparency is one of the key factors in Trade Defence investigations. Trade defence 
measures are only acceptable if they are used within the strict limitations of the WTO rules. 
Transparency and meaningful disclosures are essential in this process, because this is the only 
way to ensure that parties are fairly treated and can adequately defend their interest. 

Even though there are specific rules to disclose the results of an investigation while still 
protecting the confidential nature of the data submitted by parties co-operating to the 
investigations, i.e. requirement to furnish a meaningful non-confidential summary, some 
investigating authorities still decide to simply blank out crucial data. 

In addition, some investigating authorities do not disclose sufficient detailed data to the 
exporters participating in anti-dumping proceedings, and it is basically impossible for them to 
know exactly how the dumping margin has been calculated. 

When faced with these problems, the Commission intervenes in individual cases and, if 
justified by the cases and to the extent there is no better option, also has recourse to the WTO 
dispute settlement mechanism. The Commission also uses bi-lateral technical meetings 
established with some countries to address these problems.  

3.3. 

Improper use of safeguards 

The above statistics show that safeguards continue to be used very frequently, and by some 
countries in particular. While this instrument is of course available to any country, its 
application should remain exceptional because it affects increased imports from all countries 
of origin and without requiring the existence of any unfair element (such as dumping or 
subsidy). The WTO jurisprudence has also established very strict criteria for its application. 

Unfortunately, some countries continue to make an excessive use of the instrument despite the 
fact the problems very often consist of cheap imports from very specific country(ies). In these 
cases the Commission always advocates for the use of a country specific instrument in order 
to avoid “co-lateral damages” given the erga-omnes nature of the instrument. 

Furthermore, it appears that in various cases the investigations were initiated on weak grounds. 
In these cases, even when they are terminated without measures, the investigations had a 
negative effect on trade because of the uncertainty of their outcome. Obviously the fact that 
no measures are imposed ultimately is a positive development, but it is considered that third 
country should be much more careful when deciding to initiate the investigation in order to 
avoid these negative consequences. 

Finally, in 2011, some measures have again been prolonged beyond their initial 3 year period 
of application despite the fact that the industry had either recovered or the situation had not 
change, most likely because the measures originally taken were not adequate. This seems to 
have been almost systematically the case for the measures extended by the same country, and 
based on evident procedural flaws.  

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4.  MAIN ACHIEVMENTS 

The Commission's role in relation to third country cases includes monitoring of investigations 
but also providing advice and assistance to European exporters concerned.  

Over the years, the systematic interventions of the Commission in investigations initiated by 
third countries had a general positive impact as we have seen some countries improving the 
quality of their investigations. The Commission is a well respected investigating authority 
worldwide and its interventions are always well perceived and carefully considered. The main 
reason being that in its own investigations the Commission applies very high standards.  

As mentioned above, some important issues however persist and not all the problems could be 
solved. In a number of individual cases the Commission could however either avoid measures 
or decrease their negative impact. Some important systemic issues could also be solved, and 
this affects a number of past and future measures.  

Even if positive results could not be achieved in all cases, the Commission has provided 
assistance to many industries, exporters and Member States administration, and the 
Commission had a very good feedback showing that this support was greatly appreciated by 
the various stakeholders. 

Below is a list of some of the individual positive results achieved during the year 2011. 

US Zeroing – a major step forward 

On 6 February 2012, the US and the EU reached an understanding (roadmap) to settle the 
zeroing disputes. The US had already abolished zeroing in new investigations in 2007 and the 
roadmap now extends this removal of the use of zeroing to reviews.  

This comes after several years of legal dispute, WTO rulings in favour of the EU in two 
different cases and US failure to comply with the said rulings.  

It is recalled that zeroing is a practice whereby non-dumped transactions are disregarded in 
the calculation of the dumping margin, often resulting in artificially inflated duties. As a result 
of our efforts, the US revoked a number of anti-dumping orders and revised the current rates 
of anti-dumping duty without zeroing for all EU exporters subject to measures. Some more 
reviews to revise current duty rates will have to be concluded by the beginning of June, at 
which time we will have a "level playing field" with the US on this aspect of dumping 
calculation. Nevertheless, the Commission will have to carefully monitor the application by 
the US of its new methodology in order to ensure that zeroing is consistently eliminated from 
dumping calculations in all future reviews.  

More detailed can be found in the annex. 

Russia-Belarus-Kazakhstan – measures not extended 

In the new Customs Union, measures imposed by individual countries are extended to the 
territory to the Customs Union if, following a review investigation, it is found that the 
national production represented more than 25% of the Customs Union wide production on 
average during the last three years. In this context, the analysis of the fibreglass mesh case 
revealed that Belarus had proposed to extend measures when in fact the domestic production 
reached more than 25% only during the last year under review. The Commission drew the 

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attention the Belarusian authorities to the fact that the threshold was not met on average  for 
the last three years and, as a result, it was decided not the extend them to the overall customs 
union. 

No imposition of safeguard measures in Ukraine 
In the last years Ukraine has initiated a relatively high number of safeguard investigations: 2 
in 2009, 3 in 2010 and 4 in 2011. The Commission has actively intervened in these 
investigations, in particular those cases that would affect significant EU trade flows if 
measures were taken, in order to highlight the weaknesses of the cases and ensure the best 
outcome for the EU exporters. The Commission's interventions were successful in 2011. Two 
investigations have been terminated without the imposition of measures: the fridge case 
(around €45 million exports per year) and the  petroleum product case (around €750 million 
per year). 

Even if this is a positive development, the frequent initiations of safeguard investigations 
remain a problem, as mentioned in the previous section. 

Israel – measures avoided 

Over the last years Israel has become a relatively important user of the anti-dumping 
instrument against the EU (7 investigations initiated since 2009). Several WTO 
inconsistencies were found, including very important and basic ones. Given the systemic 
nature of the problems identified, the Commission intervened in all these cases and in 2011 
two investigations were terminated without measures. This included one for which the 
investigating authorities even proposed the imposition of definitive measures. Strict 
monitoring, however, remains necessary because there are still on-going investigations and 
unfortunately the same problems are still present. 

Jordan – early termination of measures 

Jordan initiated a safeguard investigation against imports of tiles in 2008. This was the third 
investigation in a period of six years. While measures could be avoided in the two previous 
cases, in this case Jordan imposed definitive duties in September 2010, for a period of two 
years. The Commission actively intervened given the 'history' of the case and the weaknesses 
identified. Unfortunately, measures could not be avoided, but Jordan decided in December 
2011 to terminate the measures one year before their normal period of application.  

5.  CONCLUSION 

The monitoring activity and Commission's interventions in 2011 once more proved to be 
necessary in order to limit an abusive use of the instruments and protectionist practices. 
TDI activity has stabilised as compared to the period 2008-2010, but the Commission's 
involvement nevertheless remained important given the economic interest at stake and the 
increasing complexity of the investigations. 

The Commission's interventions are usually carefully considered abroad. The Commission is 
an internationally recognized investigating authority given its expertise, but also due to the 
fact that it applies high standards in its own proceedings.  

A number of positive results were achieved this year. Measures could be avoided in some 
cases or their negative impact reduced. Also some important systemic issues could be solved 

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to the benefit of EU exporters. This was done through intensive monitoring, bi-lateral contacts 
with third countries. Sometimes, the result of WTO panel procedures also helped. 

Most of the time those achievements are also the result of a good cooperation with the EU 
Member States, the European associations of producers, and the companies concerned. Co-
ordinated joint actions significantly increases the chances of success. 
Unfortunately, important problems still persist. Further and even more intensive interventions 
will be necessary to solve them, including at WTO level if necessary. 

The Commission will also continue to strengthen exchanges with other investigating 
authorities in order to increase standards, transparency and predictability in the use of trade 
defence measures. This is indeed crucial in order to anticipate and avoid problems rather than 
try to solve them in on-going investigations, which often proves to be very difficult. 

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