COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the modernisation of trade defence instruments
Date: 2013-04-10
Institutions: European Commission
Subjects: anti-dumping duty, anti-dumping measure, anti-subsidy proceeding, import (EU), originating product, third country

EUROPEAN 
COMMISSION 

Brussels, 10.4.2013  
SWD(2013) 105 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the modernisation of trade defence instruments  

{COM(2013) 192 final} 
{SWD(2013) 106 final} 

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COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the modernisation of trade defence instruments  

1. 

INTRODUCTION 

1.1. 

1.2. 

1.3. 

Trade defence 

The EU's trade defence instruments 

Evolution of EU's Trade Defence Instruments 

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

2.1. 

2.2. 

2.3. 

2.4. 

Evaluation study 

Consultations with stakeholders and member states 

The Impact Assessment Steering Group 

The Impact Assessment Board 

3. 

PROBLEM DEFINITION 

3.1. 

3.2. 

3.3. 

Efficiency 

Effectiveness 

Subsidiarity principle 

4. 

OBJECTIVES 

4.1. 

4.2. 

4.3. 

General objectives 

Specific Objectives 

Operational objectives 

5. 

POLICY OPTIONS 

5.1. 

5.2. 

Identifying the policy options 

Description of the policy options 

6. 

ANALYSIS OF IMPACT 

6.2. 

6.3. 

6.4. 

7. 

8. 

Impacts of Policy Option 1 – no change 

Impact of the individual proposals under policy Option 2 

Impact of Policy Option 3 

COMPARING THE OPTIONS 

MONITORING AND EVALUATION 

ANNEX 1:  STATISTICS 

ANNEX 2:  FLOW CHART 

ANNEX 3:  OMNIBUS 

ANNEX 4:  EVALUATION STUDY 

ANNEX 5: SUMMARY REPORT PUBLIC CONSULTATION 

ANNEX 6: MINUTES IASG MEETING 

ANNEX 7: CODIFICATION 

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1. 

INTRODUCTION 

1.1. 

Trade defence 

The EU's commitment to the liberalisation  of international trade depends on  a level playing 
field between domestic and foreign producers based on genuine competitive advantages. The 
European  Commission's  role  in  achieving  open  and  fair  trade  includes  the  defence  of 
European production against international trade distortions such as subsidisation or dumping, 
by applying trade defence instruments ('TDI') in compliance with EU law and WTO rules. 

The EU trade defence system operates under the WTO legal framework.  WTO rules allow 
importing countries to protect their industries against dumped or subsidised imports, provided 
that  certain  well-defined  conditions  are  met.  Article  VI  of  GATT  1994  and  the  WTO  Anti-
Dumping (ADA) and Anti-Subsidy Agreements (ASCM) give WTO Members the possibility 
to  adopt  trade  defence  measures.  All  major  WTO  Members  including  the  EU  use  trade 
defence instruments.  

The WTO sets mandatory minimum standards for the application of TDIs which must be 
respected  in  all  cases.  TD  measures  can  only  be  imposed  if  the  relevant  investigation 
concludes that  imported  products are  dumped in the importing country or benefiting from a 
subsidy;  and  that  these  imports  are  causing  material  injury,  or  threaten  to  cause  material 
injury, to the domestic industry of the importing country. Moreover, measures imposed must 
not exceed the level of the dumping or subsidy margin.  

1.2. 

The EU's trade defence instruments 

TDI only affect a small trade volume as compared to the EU's total trade activity, i.e. less than 
0.5% in 2011. However, for a specific sector or industry concerned by an investigation, the 
impact  can  be  significant  in  terms  of  its  financial  or  employment  situation  (please  refer  to 
annex 1 for TDI statistics that illustrate the overall context of TDI).  

TDIs consist of anti-dumping, anti-subsidy and safeguards. The first is the most frequently 
used trade defence instrument. It addresses imports into the EU of products from a non-EU 
country which are sold at prices lower than normal value1, in circumstances where they are 
injuring competing EU producers. The anti-subsidy instrument deals with subsidised2 imports 
which likewise cause injury.  

The anti-dumping and anti-subsidy instruments are very similar in terms of procedure. The 
EU  industry  affected  by  dumped  or  subsidised  imports  can  lodge  a  complaint  with  the 
European  Commission,  providing  evidence  of  the  dumped  or  subsidized  imports  and  of  the 
injury  they  have  caused.  If  the  complaint  contains  sufficient  evidence  an  investigation  is 
opened  (which  lasts  for  around  15  months  in  case  of  dumping  and  13  months  in  case  of 
subsidisation);  and  in  which  all  parties  concerned  (Union  producers,  exporters,  importers, 
users of the product and consumer organisations) are invited to participate. If the investigation 

1  

2  

The  normal  value  is  usually  based  on  the  prices  paid  or  payable,  in  the  ordinary  course  of  trade,  by 
independent  costumers  in  the  exporting  country  or  on  the  full  cost  of  production  plus  a  reasonable 
profit. (Article 2 ADA). 
Subsidies are financial contributions by a government or a government body that confer a benefit to a 
recipient (Article 1 ASCM). 

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confirms  the  allegations  in  the  complaint,  an  anti-dumping  or  anti-subsidy  duty  will  be 
imposed.  Measures remain in force normally for 5 years but they can be reviewed during this 
period.  There  is  also  a  possibility  to  renew  them  for  another  five  years  if  an  expiry  review 
confirms the need for such renewal.  

The safeguard instrument is the third trade defence instrument. The criteria and procedure to 
impose safeguard measures are different from the anti-dumping and anti-subsidy instruments. 
Safeguard measures can be imposed as a result of a sudden surge of imports without the need 
to  provide  evidence  of  unfair  practice.  Measures  can  also  be  imposed  much  faster,  i.e. 
provisional measures can be imposed at the same time as the initiation of an investigation and 
measures apply equally to all sources of the imports concerned.  The safeguard instrument is 
thus the most restrictive instrument and the EU has only very rarely used it. Therefore, and 
because of the different nature of the instrument and the different procedure, as compared to 
anti-dumping and anti-subsidy, the safeguard instrument is not part of this exercise. 

While  the  EU's  trade  defence  system  is  constructed  on  the  rules  of  the  World  Trade 
Organisation,  the  EU  applies  higher  standards  in  the  application  of  the  TDI  than  those 
required  by  the  WTO  agreements.  In  order  to  balance  the  needs  of  European  industry  to 
receive  relief  from  unfairly  traded  imports  against  the  interests  of  user  industries  and  of 
consumers,  the  EU  has  incorporated  'WTO+'  features  into  its  TDIs:  in  particular  the  "lesser 
duty  rule"  and  the  "Union  interest  test".    None  of  the  other  WTO  Members  applies  "WTO 
pluses" in such a comprehensive manner as the EU.  

The lesser duty rule provides that a duty set at a lower level than the margin of dumping or 
subsidy  is  imposed  in  cases  where  such  lower  duty  is  sufficient  to  remove  the  injury  to  the 
Union industry. In practical terms, after the calculation of both, the dumping/subsidy margin 
and the injury margin, the two margins are compared and the lower margin is used as a basis 
for the level of duty to be applied.  

Furthermore,  antidumping  and  anti-subsidy  measures  may  not  be  imposed  if  they  conflict 
with the Union interest. The Union interest test ensures that the overall economic interests of 
the EU are considered before measures are imposed – taking into account the interests of the 
domestic  industry  producing  the  product  concerned,  importing  companies,  Union  industries 
that  use  the  imported  product,  and,  where  relevant  the  final  consumers  of  the  product 
concerned. In cases where the imposition of the duty would have a disproportionate negative 
effect  on  users  and  consumers  of  the  product,  as  compared  to  the  benefit  that  the  Union 
industry  would  derive  from  the  measures,  the  duties  are  not  imposed,  even  though  the 
existence of injurious dumping/subsidisation has been established.   

These "WTO pluses" provide the necessary tools to assess the situation of the internal market 
and to ensure proportionality and balance in the application of the instruments. But they also 
lead to cases where the EU does not impose measures, in circumstances where the domestic 
industry in other jurisdictions would have obtained relief from dumped or subsidised imports. 

Both the anti-dumping and the anti-subsidy instrument are based on rather long and technical 
proceedings,  involving  many  different  steps  and  complex  procedures  and  calculations.    The 
flow chart in annex 2 describes a typical anti-dumping investigation.  

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Even  though  the  EU  applies  very  high  standards  and  its  TD  system  serves  as  a 
benchmark for many other users of TDI, the practice over time has shown that certain 
improvements have become necessary, as explained in section three, in order to ensure 
its continued efficiency and effectiveness.  

1.3. 

Evolution of EU's Trade Defence Instruments  

The  EU's  trade  defence  policy  started  in  1968  when  the  Community  signed  the  first  GATT 
Anti-dumping  Code.  Until  1994,  a  single  basic  regulation  included  provisions  on  both  anti-
dumping  and  anti-subsidy.  The  current  TDIs  (in  the  form  of  separate  anti-dumping,  anti-
subsidy and safeguard basic regulations) were enacted in December 1994 in the course of the 
implementation  of  the  results  of  the  Uruguay  round  on  multilateral  trade  negotiations.  This 
was the last major revision of the EU's trade defence instruments.   

In  2006/2007,  a  reform  exercise  was  launched  in  the  form  of  a  green  paper.  The  green 
paper  proposed  –  among  many  other  issues  –  to  enlarge  the  legal  definition  of  a  Union 
producer so as to include companies which have outsourced production outside the EU, but 
which  have  retained  significant  operations  and  employment  in  Europe  (e.g.  product  design, 
distribution).  It  also  proposed  to  strengthen  the  Union  interest  test  by  taking  into  account  a 
broader set of interests, and by allowing measures to be fine-tuned downwards following the 
results  of  the  Union  interest  test.  The  green  paper  process  failed  for  a  number  of  reasons. 
There  was  no  convergence  of  views  among  stakeholders  and  it  was  impossible  to  find 
political  support  for  the  most  controversial  issues  e.g.  changing  the  definition  of  the  Union 
industry and changing the scope of the Union interest test. The reason for this lack of support 
was  that  many  stakeholders  felt  that  the  green  paper  proposal  would  only  increase  the  gap 
between EU practice and that of other WTO members. Because of this deadlock other more 
practical issues could not be addressed either.   

TDIs  will  be  subject  in  the  future  to  new  decision-making  rules  once  the  'Omnibus' 
regulation3  is  adopted  (please  see  annex  3).  The  on-going  work  on  the  adoption  of  the 
Omnibus regulation is a separate exercise from the present initiative and it cannot address any 
issues  specifically  related  to  the  efficiency  or  effectiveness  of  the  TDIs.  However,  the 
conclusion of  the  two will lead to  a new and more modern system of rules, procedures  and 
decision-making which can take these instruments forward for the coming decades.  

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

The evidence that supports this initiative has been drawn from the Commission services' own 
extensive experience with the application of TDI and a number of other sources, including a 
comprehensive  evaluation  prepared  by  outside  consultants,  informal  contacts  with  key 

3  

The  "Omnibus  Regulation"  will  implement  the  new  Comitology  rules  as  provided  for  in  the  Lisbon 
Treaty and as contained in Regulation (EU) No 182/2011 (OJ L 55, 28.2.2011, p. 13). The implications 
for TDI proceedings will be significant as it changes the decision making process and also impacts on 
the deadlines and overall length of a TDI proceeding. Under the current system, measures are imposed 
by  a  Council Regulation  (following  a  Commission proposal).  The  members  of  the  anti-dumping/anti-
subsidy committee vote on the basis of simply majority. Under the Omnibus Regulation, also definitive 
TD measures will be imposed by a Commission Regulation. Member States will have the possibility to 
ask for amendments or appeal against the Commission proposal in an appeal committee, which can only 
overturn the COM with a qualified majority. 

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stakeholders  at  the  beginning  of  the  process,  a  high  level  conference,  and  a  public 
consultation. 

2.1. 

Evaluation study 

In  2010  an  external  consultant  (BKP  Development  Research  &  Consulting  GmbH)  was 
commissioned  to  evaluate  the  EU's  TDIs.  The  objectives  of  the  study  were  mainly:    to 
describe  the  current  practice  in  the  field  of  TDIs;  to  carry  out  an  economic  analysis  of  the 
arguments relating to trade defence instruments and their application in the international legal 
and economic context: and to assess the performance, methods, use and effectiveness of the 
current system in achieving its objectives. The evaluation was published in March 20124, and 
provided important input to the modernisation process (please refer to annex 4 for a summary 
of the evaluation study). 

2.2. 

Consultations with stakeholders and member states 

The  initiative  on  the  modernisation  of  TDIs  was  formally  launched  in  October  2011.  To 
complement  the  evaluation  and  to  prepare  the  next  steps,  DG  Trade  also  conducted 
preliminary informal consultations with experts5 in the use of TDIs in November 2011. 

A  public  consultation  on  the  modernisation  of TDIs  was  then  undertaken  from  3  April  to  3 
July  2012.  The  online  questionnaire  was  published  in  all  EU  languages  on  DG  Trade's 
website, and DG Trade participated in a number of different meetings in order to publicize the 
consultation, to explain the initiative in greater detail, and to clarify the process. From April to 
June  DG  Trade  participated  in  around  20  meetings  and  conferences  organized  by  business 
associations grouping all the main stakeholders of the EU's trade defence system. 

On  10  May  2012  DG  Trade  organised  a  conference  on  the  modernisation  of  TDIs.  The 
purpose  of  the  conference  was  to  present  and  discuss  the  modernisation  process  and  the 
evaluation  of  the  EU's  TDIs.  Around  200  stakeholders  participated  and  a  number  of  them 
provided preliminary feedback on the ideas identified in the public consultation.  

By the closing date DG Trade had received a total of 310 replies to the online questionnaire. 
A  wide  variety  of  stakeholders  participated  in  the  survey,  e.g.  business  associations  at 
European  and  national  levels,  European  industry,  importers,  governmental  authorities,  etc. 
The  views  expressed  on  the  various  issues  addressed  in  the  public  consultation  were  often 
divergent between Union producers and importers; i.e. issues supported by Union producers 
were rejected by importers and vice versa.  The largest number of responses -- more than two 
thirds – was received from Union producers and associations representing Union producers, 
which  shows  how  important  and  sensitive  the  subject  is  for  them  (for  more  detailed 
information on the public consultation results see annex 5). Nevertheless, the replies received 
from importers' associations represent a very high number of importing companies.  

Since  the  beginning  of  the  process,  member  states  have  been  kept  informed  regularly  via 
different interventions in the Council working party on trade questions and the Trade Policy 
Committee. DG Trade has also participated in different conferences organised by the member 

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5  

http://ec.europa.eu/trade/analysis/policy-evaluation/ 
The  experts  consulted  represented  industry  and  trade  association,  importers  associations,  lawyers  and 
economists experts in trade defence. 

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states  in  order  to  present  the  initiative  to  national  stakeholders  (e.g.  Portugal,  U.K.,  France 
and Germany). 

2.3. 

The Impact Assessment Steering Group 

In order to prepare the public consultation and to draft the impact assessment for the initiative, 
an impact assessment steering group (IASG) was set up by DG Trade in February 2012. All 
relevant services were invited to participate, and representatives from 11 Directorates General 
regularly participated in the meetings6. The IASG met 4 times and discussed all parts of this 
impact  assessment.  The  minutes  of  the  last  meeting  of  the  IASG  are  attached  to  the  IA  as 
annex 6. The IA was submitted to the impact assessment board (IAB) on 7 November. 

2.4. 

The Impact Assessment Board 

The  impact  assessment  was  presented  to  the  board  on  5  December  2012.  Its  comments  and 
recommendations for improvements of the report have been incorporated in this revised text.   

In particular, the introduction has been modified in order to better explain the functioning of 
the trade defence instruments and the specific features of the EU system as compared to the 
WTO  minimum  requirements.  The  problem  definition  has  been  streamlined  and  the  impact 
analysis  was  refocused  in  order  to  first  analyse  the  impact  of  individual  measures  before 
analysing a package option. For illustration several annexes have been added. 

3. 

PROBLEM DEFINITION 

The problems and the underlying drivers  

In its day to day use of the instruments, Commission services have encountered and identified 
various  areas  in  the  current  TDI  system  that  call  for  improvement  in  order  to  increase 
efficiency  and  effectiveness  of  the  instruments.  The  evaluation  study  and  stakeholder 
consultation indicated that a further improvement of the system is desirable in order to cope 
with the changing trading environment. The following sections highlight the main problems, 
as well as their specific underlying drivers. 

3.1. 

Efficiency 

3.1.1. 

Suboptimal  transparency  regarding  investigation  procedures  before  provisional 
measures 

Suboptimal  transparency  at  certain  steps  of  a  TDI  proceeding  negatively  impacts  on 
efficiency. However, one of the major challenges is to find the right degree of transparency in 
order  to  allow  for  a  more  efficient  investigation  but  without  divulging  confidential 
information.  

Currently, importers and exporting producers in the third country(ies) concerned  do not have 
access to the confidential file of the investigation and thus they cannot check the calculations 

6  

DG  Enterprise,  DG  Sanco,  Secretariat  General,  Legal  Service,  DG  Ecfin,  DG  Env,  DG  Agri,  DG 
Devco, DG Empl, DG Taxud, DG Comp. 

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made by the Commission services. They do not receive a disclosure about the investigation 
prior to the Commission's decision whether or not to impose provisional anti-dumping or anti-
subsidy duties. This can in certain cases lead to errors that can have an impact on the level of 
the provisional duty.7  

In  the  public  consultation  42%  of  stakeholders  identified  a  need  for  advance  notice  and 
limited pre-disclosure in order to remedy the information void prior to provisional measures.  

3.1.2. 

Suboptimal transparency about the work of the Anti-dumping/ Anti-subsidy Advisory 
Committee 

The  Anti-dumping/Anti-subsidy  Advisory  Committee  (ADC/ASC)  established  under  the 
basic regulations consists of representatives of each of the Member States and meets roughly 
every 4 to 6 weeks.  At present, stakeholders do not receive any information about proposed 
measures  before  the  meeting  of  the  ADC/ASC8.  This  is  especially  a  concern  in  relation  to 
provisional  measures.  If  provisional  measures  are  adopted  by  the  Commission  after 
consultation of the ADC/ASC, they become effective immediately – which creates particular 
difficulties  for  shipments  already  in  transit  at the  time  of  imposition.  In  practical  terms,  the 
costs  of  a  product  could  sometimes  increase  significantly  as  a  result  of  the  imposition  of 
duties.  A  shipment  may  have  left  an  overseas  port  before  the  imposition  of  a  TD  duty,  but 
may reach a port in the Union only after the date the duty entered into force and will thus have 
to pay the duty.9  Likewise, and also in order to reduce lengthy and unnecessary uncertainty, 
interested parties would like to receive prior information in cases where provisional measures 
are not imposed.   

In this context, mechanisms for communication and dissemination of information also play a 
role in TDIs, and have led to certain inequalities in the system: for example, associations and 
companies  that  are  represented  by  specialised  lawyers,  or  that  have  signed  up  to  certain 
information  networks,  often  have  access  to  information  much  faster  than  other  companies 
which  do  not  avail  themselves  of  such  possibilities.  This  imbalance  can  lead  to  clear 
advantages  for  those  who  are  aware  about  whether  or  not  provisional  measures  will  be 
imposed and at what level, and who can thus take their business decisions accordingly; while 
others, less well informed, cannot.   

3.1.3. 

Suboptimal  transparency  with  regard  to  the  Commission  services'  procedures  for 
choosing analogue countries  

The  need  for  improved  transparency  is  also  evident  in  investigations  where  the  exporting 
country is considered to be either a non-market economy or an economy in transition. In such 
cases information from an analogue country is normally used to establish normal value. The 
choice of analogue country can be difficult and controversial since it can have a direct effect 
on the level of the final duty imposed10.  

7  

8  
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10  

The  evaluation  pointed  out  that  among  peer  countries  only  USA  and  Canada  give  parties  to  TD 
proceedings access to the confidential file (Evaluation Study, Volume 1, Section 4.4.4.  
See Final Evaluation Study, Volume 2 Appendices, Section 3.2.3. 
See Final Evaluation Study, Volume 2 Appendices, Section 4.6.4. 
Case C-340/10 – Grünwald Logistics Service GmbH (judgment of 15 March 2012).  

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Currently, it seems that insufficient information is made public by the Commission services 
about the methods used for choosing analogue countries, and about possible cost adjustments 
required  for  the  determination  of  normal  value  taken  from  an  analogue  country.11  This  can 
lead to additional requests from parties for explanations which is time consuming and impacts 
negatively on the efficiency of the proceedings.  

3.1.4. 

Suboptimal transparency regarding the determination of "target profit" levels for use 
in injury margin calculations  

The  determination  of  the  Union  industry's  target  profit12  (for  the  purposes  of  the 
determination of the injury margin and the application of the lesser-duty-rule) is a contentious 
issue. Problems have arisen because of doubts about the adequacy of the information that is 
currently disclosed in relation to "target profit" levels and the calculation of injury margins. 

As a result, some stakeholders allege that the calculation of the profit margin was in certain 
specific  cases  subjective,  and  resulted  in  unjustifiably  high  levels  of  injury  margins.  By 
contrast,  some  EU  producer  associations  claim  that  they  do  not  understand  why  in  certain 
cases  a  profit  margin  has  been  selected  that  is  not  in  line  with  typical  margins  for  the 
industrial sector in question. In their view this could result in an ineffective level of measures 
being imposed13. The injury margin calculation is of particular importance since the EU TDI 
system has the lesser duty rule as an obligatory feature (a WTO+ element, please see point 1.2 
above).  

The evaluation study showed that in the period 2005 to 2010 (the evaluation period) the lesser 
duty rule had led in 26 out of 47 AD cases to duties based on the injury margin. The average 
reduction  of  the  duty  due  to  the  injury  margin  being  lower  than  the  dumping  margin  was 
about 9,3 percentage points or 28% over the period14.  

11  

12  

13  

14  

See Evaluation Study, Volume 1 Section 4.5.4, (table 35 provides a comparison of peer countries' and 
how  they  deal  with non-market  economy  countries,  MES  (market  economy  status)  and  MET  (market 
economy  treatment) requests and the choice of analogue country, and Volume 2 Appendices, Section 
4.2.1. 
The  "target  profit"  is  the  profit  which  the  Union  industry  could  expect  to  achieve  in  the  absence  of 
dumped imports. 
In  case  T-210/95  (EFMA  v.  Council),  EFMA  (European  Fertiliser  Manufacturers  Association) 
challenged  the  Council's  use  of  a  profit  margin  lower  than  that  claimed  by  them  in  establishing  the 
injury margin. The court found in favour of the Council that the profit level should be that which could 
be  achieved  in  the  absence  of  dumped  imports  and  not  necessarily  that  claimed  as  necessary  by  the 
industry. 
See Final Evaluation Study, Volume 1, Section 2.3.2.  

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Table 1: Effect of the lesser duty rule on the duty level    

2005 –  2010 

HS chapter and description 

20 Vegetable, fruit, nut, etc. food preparations 

28 Inorganic chemicals, precious metal compound, isotope 

29 Organic chemicals 

39 Plastics and articles thereof 

41 Raw hides and skins (other than fur-skins) and leather 

44 Wood and articles of wood, wood charcoal 

54 Manmade filaments 

64 Footwear, gaiters and the like, parts thereof 

72 Iron and steel 

73 Articles of iron and steel 

76 Aluminium and articles thereof 

81 Other base metals, cermets,  articles thereof 

83 Miscellaneous articles of base metal 

84 Nuclear reactors, boilers, machinery, etc. 

85 Electrical, electronic equipment 

87 Vehicles other than railway, tramway 

90 Optical, photo, technical, medical, etc. apparatus 

95 Toys, games, sports requisites 

Total average 

Source: evaluation study, volume 1, section 2.3.2.1 

Ave. def. dumping 
margin  
9,05 

35,32 

29,49 

12,75 

69,80 

25,18 

7,10 

39,90 

30,36 

45,46 

33,21 

64,62 

27,10 

41,84 

47,33 

32,57 

38,80 

5,80 

33,63 

Ave. def. duty 

7,95 

22,76 

21,89 

12,75 

58,90 

25,18 

7,10 

9,85 

20,12 

36,53 

17,86 

29,30 

27,10 

41,84 

27,84 

16,87 

34,00 

5,80 

24,30 

Regarding  AS  cases,  the  impact  of  the  lesser  duty  rule  has  not  been  significant  in  past 
investigations,  since  in  many  cases  the  subsidy  margins  have  been  lower  than  the  injury 
margins. However, recent cases have shown that subsidy programs result in greater distortions 
and higher subsidy margins, e.g.:  

Investigation 

PET, Iran 
Graphite  electrode  systems, 
India 

Subsidy 
margin 
51,8% 
14,9% 

Injury 
margin 
16,7% 
7,0% 

3.1.5. 

Suboptimal transparency regarding the Union interest analysis 

The  Union  interest  test  (UIT)  is  an  important  feature  of  the  EU's  TDI  system  (see 
explanation under 1.2 above). There have been a number of cases in which the investigation 
showed  that  imposition  of  measures  would  be  against  the  Union  interest  and  accordingly, 
measures were not imposed (e.g. 3 CD-Rs cases, 3 DVD-Rs cases, or polyester staple fibres). 
In certain cases UIT considerations can also have an impact on the form of the measures, i.e. a 
minimum import price instead of an ad valorem duty (melamine case). 

However,  experience  in  investigations  shows  that  the  Commission’s  practice  during  the 
Union interest analysis is not well understood, in particular, by less experienced stakeholders 
who have fewer contacts with the Commission’s TD services. This can lead to inefficiencies 
and frustrations in the proceedings and unnecessary delays.  

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Partly  as  a  result  of  the  alleged  lack  of  clarity  about  the  Commission’s  procedures  for 
conducting  this  analysis,  some  stakeholders  claim  that  the  UIT  is  subjective  and  does  not 
weigh adequately the interests of the different stakeholder groups.15 (For other issues related 
to the UIT please refer to chapter 3.2.5. and 3.2.10 below).   

3.1.6. 

Suboptimal transparency about how the Commission services conduct expiry reviews 

Expiry  reviews  are  investigations  conducted  at  the  end  of  the  five  year  period  of  TD  
measures  upon  request  of  the  industry,  in  order  to  examine  whether  measures  should  be 
renewed for another five years.  

to  analyse  both:  whether 

Expiry  review  investigations  are  more  complex  than  the  original  investigations,  which  are 
exclusively  based  on  data  relating  to  a  period  in  the  past.  In  particular,  they  involve  a  so-
called  likelihood  analysis,  which  is  a  reasoned  and  fact-based  look  into  the  future.  The 
investigation  has 
there  has  been  continuation  of 
dumping/subsidisation  and  injury;  and  whether  the  repeal  of  measures  would  be  likely  to 
result  in  a  recurrence  of  dumping/subsidisation  and  injury  (prospective  analysis).    The 
practice  is  thus  highly  technical,  and  sometimes  stakeholders  have  doubts  about  how  the 
likelihood analysis is conducted, as well as about precisely what information is needed from 
them.  This  again  leads  to  inefficiencies  in  the  proceedings  (e.g.  increased  workload  for  all 
parties involved). Some stakeholders also claim that owing to insufficient information about 
how  Commission services conduct expiry reviews, unnecessary controversy has occurred in 
some past cases.  

3.1.7.  Uncertainty about whether or not trade defence measures will expire is considered to 

be prolonged unnecessarily 

As a rule, measures expire after 5 years unless the EU industry concerned lodges a request for 
an expiry review, at the latest 3 months prior to the end of the 5 year period. However, since 
the  Commission  does  not  immediately  announce  whether  it  has  or  has  not  received  such  a 
request, uncertainty about whether measures will expire or not exists and may have a negative 
impact on importers' business strategies. However, WTO law does not allow any publicising 
of  the  application  for  the  initiation  of  an  investigation,  unless  a  decision  has  been  made  to 
initiate (article 5.5 of the anti-dumping agreement and article 11.5 of the subsidy agreement). 
Therefore, this idea will not be further pursued under this exercise. 

In this context, the table below indicates the number of expiry reviews, initiated over the last 
decade and the number of terminations and continuations of  measures. The 10 year average 
shows  that  around  two-thirds  of  expiry  review  investigations  end  with  the  continuation  of 
measures (in this context please also refer to the duration of TDI measures in chapter 3.2.12). 

15  

See Final Evaluation Study, Volume 2 Appendices, Section 4.5. 

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Table 2: Number of expiry reviews initiated and on-going 

EXPIRY 
REVIEWS 
initiated 
still on-going 
continuation 
of measures 
termination 
rate of 
continuation 
of measures  

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

12 
 0 

6 

6 

13 
 0 

2 

11 

5
 0

5

0

6
 0

6

0

23
 0

16

7

12
 0

5

7

11
 0

10

1

7 
 0 

7 

0 

11 
 0 

10 

1 

14
 0

9

5

8
2

3

3

50% 

15%  100%  100% 70% 42% 91% 100% 

91% 

64% 38%

Source: DG TRADE, Unit H1 

3.1.8. 

Suboptimal non-confidential versions of complaints and submissions 

Under the current provisions interested parties do not have access to the confidential file of an 
investigation. Some stakeholders claim that the content and quality of information included in 
non-confidential versions of complaints and submissions is in certain cases insufficient and of 
poor  quality. Introducing  an APO  (Administrative  Protective  Order)  system  –  by  which  the 
legal  representatives  of  parties  would  be  granted  access  to  the  confidential  files  –  could 
greatly increase transparency, and would be welcomed by some stakeholders.  

However, Union producers and also importers fear the increased costs of such a system, since 
it would make the need to hire a lawyer almost unavoidable in order to file a TDI complaint 
or  cooperate  in  a  TDI  proceeding.  Furthermore,  and  perhaps  even  more  importantly,  due  to 
the  different  legal  systems  in  the  different  EU  member  states,  it  might  be  very  difficult  to 
handle16.  

Thus,  it  seems  that  any  benefits  resulting  from  an  APO  system  for  a  few  stakeholders  (e.g. 
trade  defence  lawyers)  would  be  largely  outweighed  by  the  disadvantages  for  many  others 
(e.g. Union producers, importers, exporters and EU institutions), without any overall gains in 
efficiency. This particular idea will therefore not be pursued.   

3.1.9. 

Suboptimal  transparency  regarding  refund  procedures  and  about  how  to  apply  for 
refund of duties paid  

Under the provisions of the Basic AD and AS Regulation, importers may claim a refund of all 
or part of the duties paid if certain conditions are met. In order to cooperate successfully in 
refund  procedures,  parties  involved  have  to  invest  resources.  Moreover,  it  is  claimed  that 
Commission services provide insufficient information  for importers about how  and  when to 
apply for a refund of duties.  

Finally,  decisions  regarding  refund  applications  are  currently  not  published  in  the  Official 
Journal  (in  contrast  to  provisional  or  definitive  duty  regulations).  There  is  an  increasing 
number of refund claims over recent years, and therefore the need to facilitate and streamline 
such claims has become rather urgent in order for the Commission services to be able to deal 

16  

For example, proceedings against lawyers that failed to respect their confidentiality obligations might 
need  to  be  instituted  under  their  domestic  law,  and  would  depend  on  the  precise  provisions  in  the 
relevant domestic laws; Union-wide rules regarding the level of damages might need to be put in place; 
etc. 

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with the increased work load, with limited resources, and without lowering the quality of the 
analysis of the claims received.  

Table 3: Number of refund applications 

2000-2003 
19 

2004-2007 
52 

2008-2011 
120 

Number of importers 
applying for a refund 

           Source: DG TRADE, Unit H4 

3.2. 

Effectiveness 

3.2.1. 

Increasing risk of retaliation against actual or potential TD complainants 

In recent years, the threat of direct or indirect retaliation against EU producers who use TDIs 
has become a growing concern. Instances of direct retaliation have been identified after EU 
producers  lodged  a  complaint  with  the  Commission  to  start  an  anti-dumping  or  an  anti-
subsidy investigation. Such retaliation can take the form of direct threats from governments of 
the  third  country  concerned  against  the  company  or  companies  filing  a  TDI  complaint,  or 
even against member states.  

In a number of instances, the authorities of the targeted country initiated proceedings against 
EU  firms  producing  the  same  group  of  products,  as  a  reaction  to  the  EU's  TDI  action 
(examples  include  the  cargo  scanners  and  carbon  steel  fasteners  TDI  cases).  In  certain 
instances, the initiation of a specific type of case, (i.e. a threat of injury case or a subsidy case) 
against a third country was mirrored by the initiation of the same type of cases by the third 
country against EU exporters. The analysis of such cases showed that they were initiated on 
purely political grounds, without any sound legal basis under WTO rules. In other instances, 
companies  that  were  considering  filing  TD  complaints  have  been  warned  that  such  a  move 
might endanger their investments in the third country concerned, (for example, the possibility 
that planned factory expansions would be refused)17.  

3.2.2.  Related increasing risk that EU companies will not co-operate in TD investigations  

In  its  current  practice,  the  Commission  encourages  EU  producers  faced  with  the  threat  of 
retaliation to file complaints by keeping the identity of complainants confidential. However, 
EU  industry  still  fears  "tit  for  tat"  strategies  from  targeted  exporting  countries,  and  is  often 
reticent to file complaints or to cooperate in any subsequent investigation. Since no obligation 
to cooperate exists under current rules, companies that feel threatened by retaliation may also 
decide to withdraw from a case after initiation. In cases where the withdrawal of one or more 
producers leaves the Commission with insufficient information at its disposal to continue the 
investigation, the whole proceeding may be jeopardised and injurious dumping/subsidisation 
may be left unaddressed. 18  

The problems for TD users arise in the first place because the current TD framework provides 
insufficient protection for actual or potential complainants. 

17  
18  

See Final Evaluation Study, Volume 1 Main Report, Section 2.2.5. 
See Final Evaluation Study, Volume 1 Main Report, Section 4.3. 

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According to the replies received in the public consultation, 31% of respondents claim to have 
already  been  subject  to  retaliatory  behaviour  in  the  form  of  threats  or  of  unwarranted  TD 
measures  being  imposed.  Many  respondents  reported  that  governments  of  third  countries 
imposed countermeasures on the same or different products than the ones targeted by the EU 
investigations  (see  above).  In  many  cases  parties  reported  that  they  have  been  subject  to 
aggressive  behaviour  on  behalf  of  exporters  or  of  their  own  customers;  and  in  certain 
instances, they have also been exposed to more direct approaches (such as personal blackmail 
of a CEO of a company), or to approaches made directly to the EU association.  

3.2.3.  Growing  threat  of  circumvention  of  TD  measures,  and  of  other  types  of  fraudulent 

behaviour in the context of TD investigations 

A  growing  problem  that  occurs  after  definitive  measures  have  been  imposed  relates  to  the 
circumvention  of  measures:  exporting  producers  and/or  importers  find  ways  and  means  to 
import a product subject to an AD or AS duty, without actually paying the duty.  

The  most  frequent  forms  of  circumvention  identified  in  the  public  consultation  are  mis-
declaration  of  origin  (11%),  mis-declaration  of  customs  classification  (11%)  and  slight 
product  modification  (8%).  Relocation  of  production  to,  or  re-packaging  in,  third  countries 
which are not subject to the TDI measures, have also been identified as ways to circumvent 
AD  or  AS  duties.    Another,  rather  recent  development,  involves  so-called  rogue  traders. 
Rogue traders are temporary business set-ups that go bankrupt at the “right” moment, and thus 
become  unable  to  honour  any  duty  claims.  Obviously,  such  circumvention  practices  aim  at 
avoiding AD or AS duties which are often significantly higher than ordinary customs duties.19  

Such  practices  can  considerably  reduce  the  effectiveness  of  measures  for  the  complaining 
industry and unduly penalise importers that play by the rules and pay the additional duties. 

Various  other  types  of  fraudulent  behaviour  by  exporters  have  been  encountered  by  the 
Commission  services'  investigators  in  the  course  of  investigations.  These  include  practices 
such as preparing a second specific set of accounts for the purpose of the TD investigation; or 
submitting  an  incomplete  company  structure  in  order  to  channel  exports  through  exporters 
with a lower or no duty. This type of behaviour is aimed at getting a lower duty rate or even a 
zero rate.  

Under  the  current  system,  the  Commission  services  carry  out  circumvention  investigations 
from time to time, and the basic regulations already provide for the possibility to initiate such 
investigations ex officio. Overall, however, the existing TDI framework provides insufficient 
deterrent  to  circumvention  and  other  types  of  fraudulent  behaviour;  and  the  existing 
Commission services' practice for monitoring of trade flows are not optimal for consistently 
detecting circumvention and other types of TD-related fraud. 

Table 4: Number of anti-circumvention investigations initiated 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

2012 
(Sep) 

3 

2 

4 

1 

1 

6 

3 

7 

Circumvention 
investigations initiated 

Source: DG Trade, Unit H1 

19  

See Final Evaluation Study, Volume 2 Appendices, Section 4.6.7. 

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3.2.4.  Remedies  for  EU  industry  against  third  country  subsidisation  and  structural  raw 

material distortions of exports are insufficient to restrain the practice  

Subsidisation by  third  country  governments is an  increasing  concern.      Subsidisation  means 
direct  intervention  in  the  market  by  governments  by  way  of  financial  contributions  to  their 
companies.  Such  subsidisation  is  considered  to  be  more  distortive  than  dumping.  Although 
dumping  may  in  some  cases  be  at  least  partly  the  result  of  government  intervention  (for 
example, when it occurs as a consequence of high import duties on products in the exporting 
country), dumping remains primarily an unfair practice or strategy by individual firms.  

However, the current EU TD system does not provide any means of dissuading third country 
governments from providing such subsidies to their companies.  On the contrary, as a result of 
the  lesser  duty  rule  applied  by  the  EU20  (in  AS  cases  as  well  as  in  AD  cases),  the  same 
product under investigation in several countries may end up with much higher duties in other 
third countries than in the EU, which encourages exports to be deflected to the EU. While the 
latter problem can also occur in AD cases, the impact is amplified when the third country has 
carried  out  a  combined  AD/AS  case.  As  a  result,  in  the  vast  majority  of  cases  such  trade 
distortive  subsidisation  does  not  lead  to  any  disadvantages  for  the  governments  and 
companies involved. Consequently, the number of AS cases is much lower than the number of 
AD cases and according to statistics21 the level of AS duties is generally lower than the level 
of AD duties.  

Concern  has  also  been  raised  with  regard  to  structural  raw  material  distortions.  These 
distortions can take the form of a subsidy (e.g. provision of cheap energy by the government). 
However,  often  they  are  not  countervailable  and  need  to  be  addressed  in  an  anti-dumping 
context,  e.g.  various  forms  of  export  restrictions,  or  trading  of  raw  materials  on  specialised 
exchanges which are under state influence and to which access of companies is restricted.  

Table 5: Number of anti-dumping and anti-subsidy investigations 

2005-2010 

Anti-dumping investigations 

Anti-subsidy investigations 

Cases initiated 
Duties applied 
Average duty 

116 
5,4% to 90,6% 
33% 

14 
4,3% to 53,1% 
22,7% 

Source: Evaluation study, volume 1, section 2.2.1 and 2.3.2 

3.2.5.  The level of participation by EU importers and downstream users/consumers in TD 

investigations, and the quality of their submissions, is often low 

In  a  TDI  investigation,  findings  are  mainly  based  on  information  provided  by  interested 
parties.  Cooperation  from  all  interested  parties  is  therefore  very  important  in  order  for  the 
Commission  services  to  arrive  at  well-founded  decisions.  Interested  parties  cooperate  by 
completing a detailed questionnaire in a timely manner and by accepting a verification visit at 
their premises, carried out by Commission investigators, in order to check the veracity of the 
questionnaire reply.  

20  

21  

The lesser duty rule provides for a lower duty than the dumping/subsidy margin to be applied, if such 
lower duty is sufficient to offset injury (article 9.4 of the Basic Anti-dumping Regulation, article 15.1 of 
the Basic Anti-subsidy Regulation) please also see section 1.2 above).  
For  more  information  on  the  countries  and  products  targeted  see  Final  Evaluation  Study,  Volume  1 
Main Report, Section 2.2.1 and Section 2.3.2.   

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However, problems arise because the time allowed for replying to questionnaires is short; and 
because  the  questionnaires  are  deemed  to  be  complicated.  Replying  to  a  questionnaire  can 
thus be a very burdensome and time consuming exercise. 

Typically, the level of cooperation received from importers and users of the subject products 
is lower than that from exporters to the EU or from Union producers.  

Data from importers and users is particularly relevant for the Union interest test (please also 
refer to chapter 3.1.5 above). The difficulties are even greater for SMEs, which often lack the 
necessary time and resources to complete the questionnaire within the deadlines. By failing to 
submit their questionnaire responses in time, users and importers deprive themselves of their 
right to make submissions in the context of the Union interest analysis and the Commission's 
Union interest analysis may not show the full extent of possible problems resulting from the 
imposition of TD measures.  

These concerns are supported by the majority of importers and users who contributed to the 
evaluation;  they  stressed  the  need  for  longer  time  limits  to  provide  responses,  due  to  the 
complexity of information demanded in the questionnaire.22  

3.2.6.  EU  SMEs  may  be  denied  protection  from  dumped  or  subsidised imports  due  to  the 

cost and complexity of TD procedures 

The technical nature of TDIs means that companies often find it difficult to submit complaints 
either because of a lack of data available or the associated high costs.  

This  particular  problem  is  most  frequently  encountered  in  fragmented  sectors  that  are 
composed  of  a  large  number  of  SMEs23.  They  face  fundamental  barriers  such  as  high 
organisation  costs,  and  limited  resources  for  gathering  the  necessary  evidence  to  prepare  a 
complaint, i.e. they cannot provide the prima facie evidence for dumping, injury and causality 
that  is  necessary  to  file  a  TDI  complaint.  As  a  consequence  many  SMEs  do  not  have  the 
possibility to seek protection against unfair trade.24  

The  particular  difficulties  faced  by  SMEs  were  noted  in  an  earlier  evaluation  (2005)  of  the 
EU's  trade  defence  activities;  and  the  SME  helpdesk  was  created  in  order  to  try  to  address 
some  of  the  problems.  Nevertheless,  since  the  creation  of  the  SME  helpdesk,  some 
stakeholders  have  been  complaining  that  it  was  understaffed  and  that  difficulties  of 
communication,  mainly  due  to  language  problems,  needed  to  be  remedied.  The  public 
consultation showed that 72% of stakeholders saw a need to upgrade the helpdesk. 

In  this  context  it  should  be  mentioned  that  micro  companies  are  not  excluded  from  this 
initiative. Although micro companies with producing interests are rarely actively involved in 
TDI  proceedings  (because  of  their  complexity,  and  the  considerable  need  for  resources,  but 
also  because  they  are  usually  less  active  internationally  than  larger  companies),  any  TDI 
measures  imposed  also  benefit  micro  companies  which  produce  the  product  concerned. 
Equally, micro companies with importing interests will also be subject to any TDI measures 

22  
23  

24  

See Final Evaluation Study, Volume 2 Appendices, Section 3.2.2. 
Based  on  the  EU  recommendation  2003/361/EC  of  6  May  2003,  small  and  medium  enterprises  are 
enterprises with   fewer than 250 employees, an annual turnover  not exceeding 50 mill € and an annual 
balance  sheet  total  not  exceeding  43  mill  €;  small  enterprises  ar e  enterprises  with  fewer  than  50 
employees  and  an  annual  turnover  and/or  balance  sheet    exceeding  10  mill  €;  micro  enterprises  are 
enterprises  with  fewer  than  10  employees  and  annual  turnover  and/or  annual  balance  sheet  not 
exceeding 2 mill €.     
See Final Evaluation Study, Volume 2 Appendices, Section 3.2.2 and Section 3.4.2. 

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imposed. Micro importers can defend their interests  by  cooperating  in a TDI proceeding on 
the basis of a simplified questionnaire.  

3.2.7.  Varying the level of duties following an expiry review 

Due  to  their  legal  scope,  expiry  reviews  do  not  always  fully  take  into  account  market 
developments  that  have  occurred  after  the  imposition  of  definitive  measures  in  the  original 
investigation.  Expiry  reviews  are  initiated  at  the  end  of  the  normal  5  year  duration  for  TD 
measures and as a result, measures can either be maintained at the same level or repealed, but 
not modified.  The choice between maintaining and repealing measures is normally adequate 
because such reviews examine whether dumping/subsidisation and injury would be likely to 
continue or recur if the measures were repealed.  

However,  the  choice  can  become  problematic  particularly  in  the  case  of  a  second  or  third 
expiry review, where 10 or more years will have lapsed since the original investigation and 
many  changes  may  have  occurred  in  the  underlying  market,  (e.g.,  emergence  of  new 
producers, changes in consumption patterns, technological developments, or simply a change 
in the level of dumping/subsidisation and/or injury). Such changes may warrant a change in 
the  level  of  measures  applied,  rather  than  either  maintaining  or  repealing  them.  However, 
current  TDI  procedures  do  not  permit  the  level  of  duty  imposed  to  be  varied  following  an 
expiry review.25  (Please also refer to chapters 3.1.6 above and 3.2.7 below). 

3.2.8.  No  reimbursement  of  duties  in  cases  where  measures  are  repealed  after  an  expiry 

review 

Expiry review investigations usually take around one year and measures remain in force while 
the review investigation is on-going.  Under current rules, the duties collected during an on-
going expiry review cannot be reimbursed even in cases where it is decided that the measures 
should be repealed.  

Importers  in  particular  may  view  the  collection  of  duty  in  these  circumstances  as  unfair, 
because  it  leads  to  increased  costs  for  them  and  possibly  to  higher  prices  for  the  final 
consumer.  On  the  other  hand,  some  producers  argue  –  both  in  the  public  consultation  and 
more  generally  –  that  such  extended  protection  only  serves  to  compensate  for  the  injury 
suffered by the industry before measures are first imposed (which can take up to 2.5 years).26  

3.2.9.  Unjustified  benefit  from  TD  measures  for  EU  industry  involved  in  anticompetitive 

behaviour 

Normally, a complaint is filed by an industry and if the investigation shows the existence of 
dumping/subsidisation,  injury  and  a  causal  link  between  the  dumping/subsidisation  and  the 
injury  suffered  by  the  industry,  TD  measures  are  imposed.  Yet,  it  may  happen  that 
subsequently  the  same  industry  is  found  by  DG  COMP  to  have  been  involved  in  anti-
competitive  practices  such  as  cartel  behaviour  or  taking  advantage  of  a  dominant  market 
position. Such anti-competitive behaviour cannot easily be detected in a TD investigation, but 
might  be  the  subject  of  a  separate  investigation  by  DG  COMP.  In  such  circumstances,  any 
price  injury  previously  found  in  the  TD  investigation  may  then  be  due  to  artificially  high 

25  
26  

See Final Evaluation Study, Volume 2 Appendices, Section 3.3. 
See previous footnote.  

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prices  following  anti-competitive  behaviour  and  the  industry  concerned  may  unduly  benefit 
from the TD measures.  

3.2.10.  EU firms that choose to outsource the final stage of production may be targeted by 

TD measures  

Nowadays products are often "made in the world" with different stages of production located 
in different parts of the world, and also incorporating components from a number of countries. 
However, it is often considered that the current TDI framework does not adequately take into 
account  this  increasing  global  fragmentation  of  production,  with  more  and  more  companies 
depending on outsourcing strategies. 

Economists  argue  that  trade  defence  was  originally  conceived  in  order  to  protect  national 
production  systems,  and  as  a  result,  EU  firms  which  outsource  intermediate  stages  of  their 
production  process  are  well  protected  by  TDI;  whereas  EU  firms  which  outsource  the  final 
stage of production to a third country may become subject to an anti-dumping or anti-subsidy 
duty when importing the final product into the EU.  

The current provisions of the EU legislation, as well as the parallel WTO provisions, provide 
that "domestic industry" should be defined on the basis of where the physical production takes 
place,  i.e.  effectively  the  last  stage  of  production  where  the  product  is  brought  into  being. 
Economists often raise this as a problem insofar as companies which have outsourced a part 
of  their  production  may  not  be  regarded  as  a  part  of  the  "domestic  industry".27  As  a  result, 
such companies may not have their voice heard as a "domestic (Union) producer".  
However, the latter companies will have their case examined under the Union interest test28 
which  takes  into  account  positive  and  negative  consequences  for  all  stakeholders  when 
imposing  measures,  including  companies  which  have  outsourced  part  of  the  production 
process.  In this context it is recalled that changing the current definition of the Union industry 
by including producers who have outsourced production was one of the main issues, besides 
changing the scope of the Union interest test that led, to the failure of the green paper exercise 
in 2007.29 

3.2.11.  Time taken from onset of injury to imposition of measures   

The time required to impose measures and protect EU industry from unfair trade is relatively 
long.  Among  peer  countries  which  use  TDIs,  the  EU  takes  the  longest  time  to  impose 
provisional measures: 9 months from the date of initiation, whereas Canada, Australia, USA 
and  India  normally  impose  provisional  measures  within  5  months  or  even  earlier.30  EU 
producers claim that the long wait before provisional measures are imposed, together with the 
complexity of the investigations, lead to a low deterrent effect of TDI.  Moreover, it takes a 
certain amount of time for the industry to prepare a complaint. The implication, therefore, is 
that  the  existing  standards  for  accepting  a  TD  complaint  and  for  the  conduct  of  a  TD 
investigation are too demanding.   

27  
28  
29   
30  

See Final Evaluation Study, Volume 1 Main Report, Section 2.1.3.4 and Section 2.3.4. 
Note that the Union interest test is a WTO+ feature of the EU's TDI. 
See above section 1.3. 
See Final Evaluation Study, Volume 1 Main Report, Section 5.2.1. 

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Graph 1: Time taken to prepare a complaint 

  -
    Source: Evaluation study, volume 1, section 5.2.1.3 

In  the  public  consultation  opinions  were  voiced  in  favour  of  shortening  investigations,  e.g. 
maximum  12  months  (6  months  for  the  provisional  phase),  and  faster  imposition  of 
provisional measures.  

3.2.12.  TD measures could remain in force too long 

The  period  for  which  TDI  measures  are  actually in force – normally 5 years – is subject to 
diverging views.  

them 

to  make 

investments 

Current  TD  regulations  provide  no  time-limits  for  the  duration  of  TD  measures,  and  EU 
producers are generally satisfied with the current practice. Some claim that this duration has 
allowed 
the  effects  of 
dumping/subsidisation  practices  even  after  the  removal  of  duties.  Importers,  on  the  other 
hand,  complain  that  duties  are  often  in  place  for  long  periods  of  time  without  proper 
justification. They are also critical of the renewal of measures as a result of expiry reviews. 
They claim that the threshold for initiation is too low31 and that it is too easy to file an expiry 
review  request.32  As  a  result,  they  argue,  measures  in  some  sectors  (fertilizers,  organic 
chemicals  or  salts)  have  been  in  place  for  ten  or  even  more  years33.  Some  believe  that 
protection by TDI becomes nearly permanent.34    

to  counteract 

to  be  able 

However, actual case statistics show that less than 10% of measures remain in force for more 
than 15 years.    

 Table 6: Number of measures in force 

No of measures in force end 2011 
For more than 15 years 

Source: DG TRADE, unit H1 

AD 

120 
9 

AS 

10 
0 

Total 

130 
9 

% 

6,9% 

31  
32  
33  
34  

See Final Evaluation Study, Volume 1, Main Report Section 4.11. 
See Final Evaluation Study, Volume 2, Appendices, Section 4.6.3. 
See Final Evaluation Study, Volume 1 Main Report Section 4.11.4. 
For more details regarding modern heterogeneous firm theory and empirics see Final Evaluation Study, 
Volume 1 Main Report Section 2.1.3.3. 

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3.2.13.  Interests of workforce, and EU employment, can be poorly protected in cases where 

management chooses not to file an AD or AS complaint  

In the current EU TDI system, investigations are normally initiated following a complaint by 
or on behalf of the Union industry.  Under the current system trade unions cannot file a TD 
complaint. In order to ensure access to TDI in situations where the interests of EU producers 
and  their  workforce  diverge  (notably,  for  example,  because  of  fears  of  retaliation),  the 
evaluation  study  recommended  that  labour  representatives  should  also  have  the  right  to 
submit complaints35.  

However,  due  the  specific  nature  of  the  information  required  to  file  a  complaint,  it  seems 
technically  unfeasible  for  trade  unions  to  file  a  complaint  without  the  cooperation  of  their 
management.  Regarding  the  issue  of  retaliation,  it  has  already  been  identified  as  a  separate 
problem  (chapter  3.2.1  above)  and  is  being  tackled  under  option  3.  Furthermore,  this  issue 
was  not  identified  as  a  priority  for  stakeholders.  It  will  therefore  not  be  pursued  further 
under this initiative. 

3.2.14.  Some  stakeholders  claim  that  the  EU's  duty  collection  system  provides  insufficient 

disincentives against dumping or subsidisation of exports to EU 

Current TD regulations in the EU stipulate that a prospective duty collection system must be 
used. This means that duty rates are determined and collected using historical data, i.e. based 
on the data established during the investigation.  

By  contrast,  under  the  retrospective  system  applied  by  the  US,  a  duty  is  collected  upon 
importation as a deposit only. The final amount will be determined later, based on the actual 
dumping/subsidisation  during  the  period  of  the  import  transactions  in  question.  In  the 
evaluation,  some  EU  producers  requested  a  change  from  a  prospective  to  a  retrospective 
system. The reasons are that under a retrospective system, foreign firms that are engaged in 
unfair practices (i.e. dumping or subsidisation) have a higher incentive to dump less or to seek 
a  reduced  level  of  subsidy,  so  that  they  can  benefit  from  a  recalculation  of  the  dumping 
margin.36  

However,  since  the  exact  amount  to  be  paid  is  not  known  until  at  least  one  year  after 
importation,  the  financial  liability  for  imports  subject  to  anti-dumping  or  anti-subsidy 
measures is extremely difficult to predict; and fear of this uncertainty seems to prevail among 
stakeholders. Such a system would also entail an enormous increase of administrative burden 
for stakeholders and the institutions due to yearly reviews.  

Under the current basic regulations, parties can request a refund in situations where they can 
show that the actual dumping/subsidisation is lower than the duty in force. The evaluation did 
not recommend a change in the system and only a small number of stakeholders raised this 
issue in the public consultation. This particular idea will therefore not be pursued further.  

3.2.15.  Codification of the basic regulations with regard to WTO and ECJ jurisprudence 

The current basic regulations were enacted at the end of 1994. Since then, a large number of 
WTO  dispute  settlement  rulings  have  been  handed  down  which  –  even  if  they  did  not 
necessarily  involve  the  EU  –  nevertheless  have  implications  for  the  EU's  practice,  since 

35  
36  

See Final Evaluation Study, Volume 2, Appendices, Section 3.1.5. 
See Final Evaluation Study, Volume 2, Appendices, Section 4.6.5. 

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normally such rulings are followed in subsequent disputes. In some instances, the text of the 
basic regulations has been made obsolete. Moreover, daily application of the basic regulations 
has  also  shown  that  a  number  of  other  provisions  of  a  very  technical  nature  should  be 
clarified. In particular the following issues have become problematic in this context: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

Exporters  with  a  dumping  margin  of  less  than  2%  should  not  be  re-investigated  as 
part of a subsequent review while the text of the law provides that they could. 

The meaning in law of a "major proportion … of the total Union production" needs 
to be clarified. 

There  is  currently  no  explicit  legal  mechanism  to  exempt  related  companies  from 
duties imposed following a circumvention investigation. 

Wording of the EU's basic regulations in respect of sampling provisions needs to be 
clarified in relation to WTO law. 

Provisions  in  the  EU's  basic  regulations  on  who  may  submit  information  for  the 
Union interest test do not correspond to current Commission practice.  

Provisions in the EU's basic regulations on registration of imports are not sufficiently 
clear. 

Current TD regulations do not authorise the Commission services to apply different 
investigation  methods  in  review  or  refund  investigations  from  those  used  in  the 
original investigation. 

These  issues  are  not  controversial  and  the  Commission  is  legally  required  to  address  them. 
Please find detailed explanations on each item in annex 7. 

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EN 

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3.3. 

Subsidiarity principle 

Under  Article  5(3)  TEU,  the  subsidiarity  principle  does  not  apply  in  areas  of  exclusive  EU 
competence.  According  to  Article  3.1(e)  of  the  Treaty  on  the  Functioning  of  the  European 
Union (TFEU), the common commercial policy is an exclusive competence of the EU. Article 
207 TFEU further states that "measures to protect trade such as those to be taken in the event 
of dumping or subsidies" shall be based on the uniform principles of the common commercial 
policy. The subsidiarity principle therefore does not apply to the present initiative 

4. 

OBJECTIVES 

4.1. 

General objectives 

As provided for in the Treaty on the European Union, in its relations with the wider world the 
Union shall contribute to free and fair trade (G1). 37 

Trade is also a key element in the EU's efforts to overcome the present economic crisis, as it 
is a major contributor to jobs and growth. Trade has been identified as a core component of 
the  2020  strategy  with  triple  benefits  from  trade  opening:  economic  growth,  consumer 
benefits  and  labour  effects  (G2).  As  elaborated  in  the  communication  "Trade,  Growth  and 
World Affairs, Trade Policy as a Core Component of the EU's 2020 Strategy" of November 
2010,  the globalised economy provides greatly increased opportunities for trade, but is also 
prone to unfair trading behaviour. 

The  objectives  of  EU  TDI  policy  are  to  address  the  distortions  in  trade  brought  about  by 
dumped or subsidized exports by restoring fair conditions (G3) for EU industries affected by 
goods imported at less than fair value or which benefited from actionable/prohibited subsidies 
according to WTO rules. TDI's focus is on increasing EU competitiveness and the creation or 
preservation of employment in sectors adversely affected by unfair imports.  

In order to achieve these general objectives a balanced approach is required in order to gain 
the  necessary  support  from  stakeholders  and  ultimately  from  Member  States  and  the 
Parliament. The specific objectives outlined below should contribute to this goal. 

37   

Article 3.5 of the Treaty on the European Union: "In its relations with the wider world, the Union shall 
uphold  and  promote  its  values  and  interests  and  contribute  to  the  protection  of  its  citizens.  It  shall 
contribute to peace, security, the sustainable development of the Earth, solidarity and mutual respect 
among  peoples,  free  and  fair  trade,  eradication  of  poverty  and  the  protection  of  human  rights,  in 
particular  the  rights  of  the  child,  as  well  as  to  the  strict  observance  and  the  development  of 
international law, including respect for the principles of the United Nations Charter". 
Article 206 of the Treaty on the functioning of the European Union: "By establishing a customs union 
in  accordance  with  articles  28  to  32,  the  Union  shall  contribute,  in  the  common  interest,  to  the 
harmonious development of world trade, the progressive abolition of restrictions on international trade 
and on foreign investment, and the lowering of customs and other barriers". 
Article 207 (1) of the Treaty on the functioning of the European Union: "[…] The common commercial 
policy shall be conducted in the context of the principles and objectives of the Union's external action". 

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4.2. 

Specific Objectives 

– 

– 

– 

– 

– 

Create  a  trading  environment  in  which  EU  industries  (and  by  implication  their 
workers)  are  able  to  compete  on  the  basis  of  their  genuine  competitive  advantages 
and make sure that they can make full use of the instruments legally at their disposal 
to restore a level playing field. (S1). 

Allow users and consumers to benefit from imports based on the genuine competitive 
advantages of foreign suppliers (S2). 

Increase confidence and awareness in the EU's TDI system among all stakeholders, 
including among small and medium enterprises (S3). 

Improve  the  level  of  cooperation  of  all  stakeholders  concerned  in  TDI  proceedings 
(S4).   

Preserve the existing balance of interests between producing and importing interests 
(S5).   

4.3. 

Operational objectives 

4.3.1. 

Increased transparency and predictability (O1) 

– 

– 

– 

– 

Provide  stakeholders  with  a  summarised  and  non-confidential  disclosure  of  the 
activities of the anti-dumping/anti-subsidy committees, so as to increase transparency 
with respect to the decision-making process in trade defence proceedings. 

Provide a prior notification, either that Commission services do not intend to impose 
measures;  or  else,  about  the  type  of  measures  that  will  be  imposed,  and  when;  in 
order to improve transparency and increase predictability for stakeholders. 

Provide a limited prior  disclosure  to  exporters and Union producers that have been 
individually examined covering calculations and brief summary of the main facts of 
the  case,  in  order  to  improve  transparency  and  increase  predictability  for 
stakeholders in terms of expected results as well as to help them exercise their rights 
of defence.  

Improve  transparency  regarding  certain  complex  elements  of  an  investigation 
including  injury  margin,  choice  of  analogue  country,  expiry  reviews  or  Union 
interest  test,  by  providing  detailed  explanations  and  by  describing  the  various 
methodologies.  

4.3.2.  Fight against retaliation (O2)  

– 

– 

– 

Increase the level of protection for potential complainants from threat of retaliation.  

Clarify  the  circumstances  under  which  the  Commission  would  initiate  such 
investigations on its own initiative, and 

Strengthen the possibilities for the Commission to initiate such investigations on its 
own  initiative  by  increasing  the  incentives  for  EU  producers  to  cooperate  in  TD 
investigations,  so  as  to  ensure  that  Commission  services  have  access  to  the  data 
necessary to conduct investigations in particular in cases where these are launched ex 
officio.  

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24 

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4.3.3. 

Improve the effectiveness and enforcement of TD measures (O3) 

– 

– 

– 

Provide closer monitoring of trade flows in order to detect circumvention activities, 
and take action against those detected as soon as possible. 

Put  in  place  stronger  mechanisms  to  deter  market  operators  from  engaging  in 
circumvention  practices,  structural  raw  material  distortions  and/or  fraudulent 
behaviour. 

Enhance  the  effectiveness  of  the  AS  instrument  so  as  to  reduce  the  incentives  for 
market operators to accept trade distortive subsidisation.  

4.3.4.  Facilitate cooperation (O4) 

– 

– 

– 

Provide all stakeholders, but in particular importers and users, with longer deadlines 
during investigations both for registering as an interested party and for submission of 
questionnaires, in order to improve the information available to Commission services 
when establishing findings in trade defence proceedings. 

Provide  better  information  about,  and  streamline  access  to,  refund  proceedings  in 
order to reduce the administrative burden for stakeholders and the institutions.  

Increase  the  support  given  to  SMEs  so  as  to  help  them  overcome  the  problems  of 
cost  and  complexity,  and  thus  to  facilitate  their  access  to  the  trade  defence 
instruments. 

4.3.5.  Optimizing review practice (O5) 

– 

– 

Ensure that measures do not remain in force longer than is necessary to offset injury 
caused by unfair trading practices; and in cases where measures are terminated, that 
the duties collected during the review investigation are reimbursed. 

Ensure  that  the  level  of  measures  following  an  expiry  review  can  be  adapted  to 
current market conditions, whenever appropriate.   

4.3.6. 

Improve legal certainty (O6) 

– 

– 

38  

Ensure that current best practice is fully reflected in the legal basis.   

Ensure  that  the  latest  WTO  and  ECJ  jurisprudence  is  fully  reflected  in  the  basic 
regulations38.  

In  order  to  ensure  that  the  instruments  are  in  line  with,  inter  alia,  WTO  obligations,  the  Council  and 
Parliament adopted an amendment to the Basic Anti-Dumping Regulation in September 2012 following 
a  ruling of  the WTO Appellate  Body  in  2011.  That ruling  had found  that  the provisions  of  the  Basic 
Regulation  concerning  the  issue  of  individual  treatment  of  exporting  producers  in  non-market 
economies  was  in  breach  of  the  WTO  Anti-Dumping  Agreement.  That  amendment  was  adopted  as  a 
matter of urgency given the need to respect the reasonable period of time allowed for implementing the 
necessary change. 

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5. 

POLICY OPTIONS 

5.1. 

Identifying the policy options  

Several  areas  have  been  identified  in  which  the  efficiency  and  effectiveness  of  the  current 
trade defence system can be significantly improved for the benefit of the parties involved. The 
analysis  of  problems  has  highlighted  various  specific  issues,  largely  independent  from  each 
other, where specific actions may bring about the desired improvements. However, due to the 
nature of the individual problems, in most cases, the choice of options is limited to non-action 
or action, without many alternatives. Therefore, the different policy options identified are:  

(1)  Policy Option 1 - no change: the first option would be to continue with the current 

state of affairs, and leave current legislation and practice unchanged. 

(2)  Policy  Option  2:  option  two  consists  of  specific  proposed  interventions  for  each 
individual problem identified (and retained), with alternative solutions in a limited 
number of cases. 

(3)  Policy Option 3: the third option consists of a package of precisely those specific 
interventions examined under Option 2 where the overall impact is expected to be 
positive,  and  which  do  not  change  the  balance  between  producing  and  importing 
interests39.  

5.2. 

Description of the policy options 

Option 1 - No change 

The  first  policy  option  entails  taking  no  further  action  at  EU  level.  As  mentioned  in  the 
previous  chapters  of  this  impact  assessment,  trade  defence  instruments  consist  of  three 
different EU regulations (anti-dumping, anti-subsidies and safeguard) which implement WTO 
trade  defence  rules  in  the  European  Union  legal  system,  and  which  go  further  on  some 
specific aspects.  

Taking  no  action  would  mean  maintaining  the  existing  balance  of  interests  between  the 
various stakeholder groups –  and the strengths and weaknesses  of the existing framework – 
exactly as they are now. 

However,  in  practice  option  1  must  be  considered  as  a  purely  analytical  construct  for  the 
reasons set out below in section 6. 

39   A package including all individual interventions would significantly change the underlying principles of the 
EU's current TDIs and also change the balance between producing and importing interests and is therefore 
not analysed further.  

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Option 2 – specific interventions for each individual problem identified 

• 

• 

• 

• 

• 

• 

'Codification' of the basic regulations in order to address WTO decisions, judgments 
of  the  EU  courts,  or  existing  Commission  practice.  In  particular,  the  text  of  the  basic 
regulations  will  be  brought  more  clearly  into  line  with  two  recent  WTO  dispute 
settlement rulings. Most of these modifications are already applied in practice, but they 
also need to be spelled out in the basic regulations.  

A  pre-disclosure  to  interested  parties  around  three  weeks  before  the  imposition  of 
provisional measures (i.e. shortly after documents are sent to the ADC/ASC)  consisting 
of:  (i) a summary of the proposed measures for information purposes only; and (ii) the 
relevant  calculations  and  adjustments  for  each  cooperating  exporter  and  the  Union 
industry.  Provisional  measures  would  normally  not  be  imposed  within  3  weeks  after 
sending  the  pre-disclosure.  To  further  increase  predictability,  in  cases  where 
Commission services do not propose to impose provisional measures, interested parties 
would  be  informed  of  that  fact  in  good  time  prior  to  the  9  months  deadline  via  an 
advance notice. 

Related to the pre-disclosure is the "three weeks shipping clause". In practical terms 
stakeholders  would  have  the  legal  certainty  that  no  provisional  measures  will  be 
imposed within 3 weeks after sending the pre-disclosure. 

o  Alternative:  "six  weeks  shipping  clause":  stakeholders  would  have  the  legal 
certainty  that  no  provisional  measures  will  be  imposed  within  6  weeks  after 
sending the pre-disclosure. 

In  order  to  tackle  the  other  issues  identified  on  transparency  and  predictability,  the 
Commission  would  publish  guidelines  on  specific  key  concepts  (i.e.  on  the  Union 
interest  test,  the  choice  of  the  analogue  country,  the  calculation  of  the  injury  margin, 
and expiry reviews). Such guidelines would be based on past cases, and would aim at 
clarifying the Commission's best practice in particular regarding issues where the basic 
regulations provide only very little guidance. This would help users to better understand 
the  applied  methodology  and  would  also  re-enforce  the  predictability  of  decisions,  as 
the Commission is under the general administrative duty to treat similar cases similarly.  

Ex officio initiations in order to combat threats of retaliation against TD investigations 
or measures. Normally, TD investigations are initiated by Commission services on the 
basis of a complaint lodged by the EU industry. In order not to expose EU companies to 
threats of retaliation by third countries, the Commission would initiate investigations ex 
officio, i.e. on its own initiative without divulging the identity  of the  EU company/ies 
lodging  or  cooperating  in  an  investigation.      According  to  the  basic  regulations,  ex 
officio initiations are permitted in "exceptional circumstances". The current texts would 
be  modified  in  order  to  clearly  identify  threat  of  retaliation  as  an  "exceptional 
circumstance".  

In  order  to  make  ex  officio  initiations  a  more  effective  tool  against  retaliation,  and  in 
order to ensure that Commission services have access to the data necessary to properly 
conduct an investigation, the basic regulations would stipulate that EU companies have 
an  obligation  to  cooperate  in  ex  officio  investigations.  Moreover,  in  order  to  provide 
Commission services with the means to obtain the necessary data from the companies 
concerned, procedures would be put in place so that cooperating companies can provide 
data to Commission services in confidence and can remain anonymous throughout the 

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proceeding (e.g. clarify rules on anonymity, explore possibility of enhanced security in 
electronic submissions of documents, etc.).  

Normally, in investigations initiated on the basis of a complaint by the EU industry, EU 
companies can choose whether or not to support the complaint, and whether or not to 
cooperate  in  the  investigation.  The  obligation  to  cooperate  for  Union  producers  in  ex- 
officio  investigations  is  primarily  intended  to  cover  companies  vis-à-vis  threats  of 
retaliation  from  third  countries.  Companies  facing  such  threats  could  invoke  the 
obligation  to  cooperate  with  the  Commission,  and  thus  such  threats  may  become  less 
effective.  In  deciding  whether  or  not  to  go  ahead  with  an  ex  officio  investigation, 
Commission services would decide on the basis of the merits of the evidence available 
on  injurious  dumping/subsidisation.  In  addition,  the  Commission  would  also  take  into 
account  available  evidence  as  to  whether  any  measures  would  have  disproportionate 
economic  consequences  for  the  Union  as  whole,  should  the  investigation  confirm  the 
existence  of  injurious  dumping/subsidisation.  Opinions  expressed  by  economic 
operators  concerned  as  to  whether  or  not  the  case  should  go  ahead  will  in  no  way  be 
decisive.  It  is  underlined  that  such  ex  officio  initiations,  and  the  related  obligation  to 
cooperate, would be strictly limited to cases where a threat of retaliation is at issue. 

o  Alternative:  sanctions  in  case  of  non-cooperation:  the  Commission  services 
would introduce sanctions for EU producers who refuse to cooperate in ex-officio 
investigations. Such sanctions could take the form of fines or obliging companies 
to grant access to the Commission services to their premises in order to obtain the 
data needed for the investigation.  

Ex officio investigations in cases of circumvention40. The Commission services would 
take a more pro-active approach and open anti-circumvention investigations as soon as a 
change is detected when monitoring trade flows.  

In  addition,  the  current  basic  regulations  would  be  changed  so  as  to  make  the  lesser 
duty  rule  inapplicable  in  cases  of  structural  raw  material  distortions  or 
subsidisation  by  the  exporting  country  concerned.  In  cases  of  third  country 
subsidisation  and  structural  raw  material  distortions  the  non-application  of  the  lesser 
duty rule would be applied country wide.  
In  order  to  facilitate  cooperation  in  investigations41,  longer  time-limits  would  be 
granted to certain interested parties, i.e. users for registering as an interested party (29 
days instead of 15 days), and for replying to questionnaires (51 days instead of 37 days). 
This would help increase the quantity and quality of information that serves as the basis 
for  decisions,  and  particularly  for  the  Union  interest  test  analysis.  Moreover,  the 
Commission services would help users and consumers to better contribute to the Union 
interest analysis by identifying a focal point for those interest groups as well.   

o  Alternative:  further  extending  time  limits,  e.g.  45  days  for  registering  as  an 

interested party and 60 days to reply to the questionnaire.  

Simplification  of  refund  proceedings42  by  providing  refund  request  forms  and  by 
publishing refund decisions on the Trade website.  

See problem definition para 3.2.3 and 3.2.4. 
See problem definition para 3.2.5. 
See problem definition para 3.1.9. 

• 

• 

• 

• 

40  
41  
42  

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• 

• 

• 

• 

• 

• 

Facilitate SMEs' access to the EU's trade defence activity43. The SME helpdesk would 
be  upgraded,  and  information  regarding  TDI  would  be  more  widely  disseminated 
through specialised work-shops and seminars specifically targeted at SMEs and offered 
throughout the Union.  
The  automatic  combination  of  the  2nd  and  any  further  expiry  review  with  an  interim 
review would allow Commission services to examine in one and the same investigation, 
not only whether measures should be renewed or repealed, but also whether the level of 
the duty imposed should also be varied.  

o  Alternative:  the  notice  of  impending  expiry,  which  is  published  in  the  Official 
Journal of the EU around 6 months before the expiration of measures, would be 
adapted in order to remind exporters and producers of the possibility to request an 
interim  review  which  could  then  be  carried  out  in  combination  with  the  expiry 
review. 

Reimbursement of duties collected during expiry review investigations, in cases where 
the latter are terminated without prolongation of measures.  

Ex officio interim reviews in cases of cartel behaviour. The Commission would open 
an ex officio interim review, in cases where DG COMP has confirmed that companies 
were  involved  in  price  fixing  /  abuse  of  a  dominant  position  and  might  thus  have 
unjustly benefited from a TD measure.  

Taking  into  account  the  interests  of  EU  producers  who  have  outsourced 
production  to  a  third  country.  The  current  provisions  relating  to  the  Union  interest 
test44  would  be  changed  in  order  to  privilege  the  interests  of  companies  that  have 
outsourced  their  production  outside  the  EU,  but  which  have  retained  significant 
operations and employment in the EU. 
Introduce a limit to the duration of measures45 (of 10 or 15 years).  

•  Modify  current  law  and  practice  by  introducing  lower  standards  for  initiation. 
Standards  would  also  be  lowered  for  the  conduct  of  an  investigation  in  order  to 
provide  earlier  protection46.    The  intention  would  be  to  impose  provisional  measures 
much earlier than after 9 months, as happens under current practice. 

Option  3  -  a  package  of  specific  interventions  with  an  overall  positive  impact 

43  
44  
45  
46  

See problem definition para 3.2.6. 
See problem definiton para 3.2.10. 
See problem definiton para 3.2.12. 
See problem definition para 3.2.11. 

EN 

29 

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Of all the possible single intervention options identified under option 2, a package has been 
created  from  precisely  those  proposals  where  the  impact  is  expected  to  be  positive  (please 
refer to table 7 below).  

Option  3  is  considered  to  provide  a  major  contribution  in  achieving  the  objectives  without 
changing the balance between producing and importing interests.  

6. 

ANALYSIS OF IMPACT 

A  thorough  analysis  was  conducted  to  assess  the  impact  of  the  different  single  intervention 
options  identified.  Then,  option  3,  the  package  of  the  proposals  considered  most  suitable  to 
achieve the objectives, was compared to option 1 – the baseline. The assessment is based to a 
large extent on Commission services' own analysis and practical experience, on the results of 
the public consultation of stakeholders, and on the independent evaluation study.  

TD measures affect only a small share of imports (less than 0,5% of total trade was effected 
by TD measures in 2011). Thus the overall economic impact of any of the analysed proposals, 
as  compared  to  the  total  economic  activity  in  the  EU  is  very  limited.  The  social  and 
environmental impact is also in most cases very small.  The impact analysis below therefore 
focuses on the impact that any of the proposals identified under option 2 would have for the 
stakeholders concerned and in particular on EU producers and importers. Under option 2, the 
impact of the various proposals is analysed individually and then as a package under option 3. 

However,  although  the  impact  of  TDI  on  overall  economic  activity  is  very  small,  the 
existence  of  the  instruments  and  their  application  are  very  important  for  the  stakeholders 
concerned. For a specific industry or sector concerned by a TD investigation, whether or not 
TD  measures  are  imposed  can  have  a  significant  impact  on  its  financial  and  employment 
situation. In certain cases it can even determine the survival or not of a particular industry in 
the  EU.  Moreover,  the  very  existence  of  these  instruments  has  a  certain  influence  on 
economic operators, as some of them will anticipate the possible application of these rules in 
their economic behaviour. 

6.1. 

Overview of the policy options analysed 

In  order  to  best  achieve  the  objectives  identified,  legislative  changes  and/or  soft  law  are 
required. The table below gives an overview of the various options and indicates whether a 
legislative change 'L', soft law 'S' (communications, notices) or a mere change in practice 'P' 
are required.  

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30 

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Table 7: Overview of policy options analysed 

Option 1: 

Option 2: 

Option 3: 

EFFICIENCY 

Suboptimal  

transparency  

pre-disclosure L 

advance notice L 

before provisional measures 

activities of the ADC L  

Suboptimal transparency regarding the methodologies 
used in an investigation 

Clarification of the BRs with regard to WTO and ECJ 
jurisprudence 

EFFECTIVENESS  

Retaliation 

Circumvention 

Trade distortive subsidisation and raw material 
distortions 

Lack of cooperation 

No reimbursement of duties when measures are 
repealed after an expiry review  

Varying duty levels following expiry reviews

Unjustified benefit from TD measures for EU 
producers involved in  uncompetitive behaviour 

Interests of EU producers who have outsourced 
production are not taken into account 

TD measures remain in force too long 

shipping clause 3 weeks L 

alternative: 6 weeks shipping clause L 

guidelines S 

codification of the current practice and jurisprudence and 
improvement of transparency L 

ex-officio initiations of new investigations L 

obligation to cooperate in ex officio initiations to address 
retaliation  L 

alternative: obligation to cooperate combined with 
sanctions in case of non-cooperation L 

improved monitoring  and ex-officio anti-circumvention 
investigations P 

no lesser duty rule in cases of  subsidisation, raw material 
distortions L 

extend time limits for parties for Union interest purposes 
by 14 days P 

alternative: further extension of time limits 

upgrading SME help desk P 

facilitate refund procedures S 

reimbursement of duties in expiry reviews leading to a 
repeal of measures L 

automatic combination of expiry and interim reviews 

alternative: invite parties to request expiry reviews with 
interim reviews P 

ex-officio interim reviews P 

take into account interests of EU producers who have 
outsourced production L  

limiting duration of measures L   

lower standards for initiations P 

Time taken from onset of injury to imposition of 
measures is too long  

lower standards for the conduct of investigations in order 
to impose measures earlier P 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

(cid:57) 

EN 

31 

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6.2. 

Impacts of Policy Option 1 – no change 

It  may  be  argued  that  the  EU's  TDI  as  currently  applied  function  rather  well  and  thus  that 
there  is  no  need  for  a  review  of  the  TDI  instruments.  Furthermore,  the  failure  of  the  last 
attempt  (the  green  paper  exercise  of  2006/2007)  –  due  to  a  lack  of  consensus  among 
stakeholders  –  could  be  seen  as  further  proof  that  a  majority  of  stakeholders  does  not  want 
any change and would prefer the status quo.  

However, if no action is taken, all problems identified in the problem definition earlier will 
remain unsolved while some will even become worse.  

Economic impact for the stakeholders concerned 

Non-action would have some negative economic impacts as it would likely lead to increased 
administrative  burden  and  legal  uncertainty,  which  in  turn  would  negatively  impact  on  the 
efficiency of the system.   

No action with regard to further improving transparency and predictability will most likely 
negatively  impact  on  the  investigation  process  itself.  In  particular,  an  increasing  number  of 
requests under access to documents provisions, further increasing interventions by the hearing 
officer, etc. would be likely. Such requests are resource intensive and often difficult to deal 
with due to the already very tight investigation schedule. Moreover, smooth procedures will 
be even more important in view of the upcoming "omnibus" regulation, i.e., TDI proceedings 
will become more time-consuming (due to the revised consultation process that omnibus will 
entail47), and it is essential to introduce changes that can contribute to saving time during the 
investigation.  

Table 8: Activity of the hearing officer 

Hearing officer 

2008 

2009 

2010 

2011 

Interventions 
proceedings concerned 
Hearings held 

19 
11 
16 

30 
24 
14 

55 
29 
24 

81 
35 
26 

Source: Hearing officers annual reports 

The  lack  of  guidelines  increases  the  risk  that  Commission  services'  work  will  be  delayed, 
through  e.g.  increasing  deficiencies  in  questionnaire  replies  necessitating  lengthy  deficiency 
letters, interventions by the Hearing Officer, access to documents requests etc. and even the 
risk of additional and avoidable legal challenges.   

With  regard  to  the  dissemination  of  information  and  certain  inequalities  as  to  the  level  of 
information  available  to  parties  in  respect  of  the  activities  of  the  anti-dumping/anti-subsidy 
committee,  non-action  would  mean  being  aware  of  these  inequalities  and  allowing  clear 
advantages for some stakeholders – and clear disadvantages for others – to continue or even 
increase. In order to cooperate in a TDI proceeding and be able to fully exercise one’s rights 
of  defence,  timely  information  regarding  imposition  of  provisional  and  definitive  measures 
and  other  deadlines  is  key.  Moreover,  parties  with  a  better  level  of  information  have  better 
chances  to  achieve  the  best  possible  results  for  their  company  in  a  TDI  proceeding,  e.g. 
informed importers can better plan their orders and shipments.   

47  

This is due to the extended possibility to have recourse to the appeal procedure pursuant to Article 6 of 
Regulation (EU) No 182/2011 ("the Comitology Regulation"). 

EN 

32 

   EN 

 
 
 
 
 
 
                                                 
As pointed out above, the current legislation also needs to be amended in order to reflect court 
rulings of  recent  years (the  specific  issues of compliance with ECJ and WTO jurisprudence 
are analysed under 3.2.15. above), for transparency purposes. Non-action in this regard could 
lead  to  uncertainty  for  stakeholders  about  their  rights  in  cases  where  the  existing  basic 
regulations do not fully reflect WTO or ECJ decisions and current TDI practice.  

As pointed out in the evaluation study the number of TDI cases brought before the EU courts 
has continuously increased between 2005 and 2010 (the period analysed by the study). Non-
action may lead to a further increase of this trend. 

Table 9: Breakdown of EU court cases by type of applicant  

Applicant 
Exporter 
Importer 
Union producer 
Total 

2005 

1 
3 
4 

2006 
4 
1 

2007 
1 
1 

2008 
5 
2 

2009 
8 

5 

2 

7 

8 

2010 
5 
3 
1 
9 

2005-2010 
23 
8 
4 
35 

Source: Evaluation study, volume 1, section 3.1.1, page 93 

Table 10: Breakdown of EU court decisions on main legal issues (year of decision) 

Decision 
Dismissed 
Granted 
Total 

2005 
1 
3 
4 

2006 
6 
1 
7 

2007 
3 
4 
7 

2008 
12 
3 
15 

2009 
16 
5 
21 

2010 
28 

28 

2005-2010 
66 
16 
82 

Source: Evaluation study, volume 1, section 3.1.1, page 93 

Stakeholders  have  also  been  confronted  by  a  new  threat  in  recent  years:  retaliation. 
Retaliation from third countries is having an impact on the opening of new investigations. A 
failure to address retaliatory behaviour of this kind may ultimately lead to fewer companies 
exercising their rights under the WTO and EU law to seek relief from unfair trade; with the 
consequent  impacts  on  growth,  EU  employment  and,  in  the  worst  case,  the  viability  of  the 
competing EU producers. 

Regarding  effectiveness  and  enforcement,  certain  developments  over  the  past  years  require 
adaptation  of  the  current  rules  and  practice.  In  particular,  non-action  with  regard  to 
subsidisation, structural raw material distortions, circumvention and fraud by parties in third 
countries  is  likely  to  lead  to  a  further  increase  of  such  practices.  Due  to  the  mandatory 
application of the lesser duty rule in all cases in the EU system, there is often no appropriate 
sanction  for  such  practices  (please  see  section  3.1.4  above  for  a  detailed  explanation  of  the 
lesser  duty  rule),  and  EU  producers  will  suffer  disproportionately  when  compared  to  their 
counterparts  in  other  third  countries.  In  instances  where  also  other  countries  have  imposed 
trade defence measures, increasing deflection of imports to the EU could result from a lenient 
approach  towards  illegal  and  trade  distortive  practices  in  combination  with  the  lesser-duty 
rule.  

EN 

33 

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This is illustrated by a comparison of dumping margins by HS chapter found in the EU and 
the US cases below:    

Table 11: AD duties applied by HS chapter 2005-2010 (in %) 

HS chapter 

20 

28 

29 

36 

37 

38 

39 

40 

41 

44 

48 

54 

55 

58 

59 

63 

64 

68 

69 

72 

73 

74 

76 

81 

82 

83 

84 

85 

87 

90 

94 

95 

96 

Total average 

Same sector average 

             Source: Evaluation study, volume 1, section 2.3.1 

US 

30,6 

84,8 

95,2 

66,1 

47,2 

83,4 

41,0 

12,6 

72,6 

4,4 

124,1 

131,2 

96,0 

136,7 

136,7 

16,0 

42,5 

34 

129,3 

21,6 

68,8 

107,8 

113,7 

154,7 

77,1 

68,4 

EU 

8,0 

19,0 

21,9 

12,7 

58,9 

25,2 

7,1 

9,9 

20,1 

36,5 

17,9 

29,3 

27,1 

37,2 

27,8 

16,9 

34,0 

5,8 

23,1 

23,6 

Regarding trade flows, the impact of non-action is expected to be minimal. 

EN 

34 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other impacts 

The  social  and  environmental  impacts  of  non-action  are  also  expected  to  be  minimal. 
However,  although  impossible  to  quantify,  in  the  long-term  non-action  may  lead  to  certain 
negative consequences for the Union industry which may also have a negative impact on the 
job situation in the EU and on the environment.     

In view of the above, non-action is not recommended. Indeed, besides the negative economic 
impact  and  the  possible  negative  consequences  in  the  long-term  regarding  social  and 
environmental aspects, it may also lead to a certain unfairness in the system, and an increasing 
number of legal challenges.  

6.3. 

 Impact of the individual proposals under policy Option 2   

• 

Advance  notice,  pre-disclosure  and  information  about  the  activities  of  the  ADC 
will have a certain positive economic impact on importers. It would allow them to better 
plan  their  imports,  which  is  particularly  important  for  goods  already  in  transit.  Costs 
would not increase unexpectedly.  

Impact on EU producers could in theory be negative due to an increase in stock piling, 
but would in practice be very small. An advance notice does not give full legal certainty 
to  importers;  and  they  would  thus  neither  be  able,  nor  have  an  incentive,  to  place 
additional orders. Stock piling is therefore not expected to increase much as compared 
to  today.  Moreover,  a  large  percentage  of  TD  measures  are  in  the  areas  of  steel  and 
chemicals.  While  advance  notice  might  allow  for  additional  shipments  of  some  small 
lightweight  items  by  air  (e.g.  DRAMs  in  the  past)  this  would  be  exceptional.  So, 
although there may be instances where imports increase because of the advance notice, 
the overall effect is expected to be limited.  

• 

The so-called "three weeks shipping clause" would give legal certainty that measures 
would  normally  not  be  imposed  for  3  weeks  after  sending  the  pre-disclosure.    Thus 
there would be an additional small positive economic impact for importers as compared 
to the advance notice since importers would have the legal certainty that for 3 weeks no 
measures would be imposed. 

By contrast the negative impact for EU producers would be similarly small as with an 
advance notice, since the only difference between the pre-disclosure 3 weeks before the 
imposition of provisional measures and the 3 weeks shipping clause, is legal certainty. 
The  timeframe  however  remains  the  same  and  practically  no  additional  stockpiling  is 
expected.  In  the  public  consultation  a  slight  majority  of  respondents  was  in  favour  of 
disseminating  the  information  sent  to  the  AD/ASC,  i.e.  49%  in  favour,  45%  against; 
65% of respondents were against the 3 weeks shipping clause, and 53% of respondents 
were  against  a  pre-disclosure/advance  notice.  Some  respondents  also  feared  that  such 
dissemination of information may lead to pressure on member states through lobbying. 
However, lobbying is already taking place today.  

Given  the  clearly  identified  need  to  improve  transparency  and  predictability  in 
proceedings (operational objective 1), and that any impact on stakeholders, i.e. positive 
for importers, or negative for producers would be very small, it was decided to pursue 
this proposal.  

o  Alternative:  A  shipping  clause  with  a  duration  of  6  weeks  would  have  a 
significant  positive  economic  impact  for  importers.  Being  informed  about 

EN 

35 

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• 

• 

• 

impending measures 6 weeks before they were to be imposed would not only allow 
for all goods already in transit to enter the EU without paying the duty, but would 
also  enable  importers  in  many  instances  to  place  new  orders,  to  ship  them  and 
have  them  cleared  through  customs  before  the  duties  entered  into  force.  A 
significant  increase  of  imports  prior  to  the  imposition  of  measures,  as  well  as 
significant  stockpiling,  could  be  expected  as  a  consequence.  For  the  Union 
industry  the  effect  would  be  negative  since  the  remedial  effect  of  the  measures 
would be both diluted and significantly delayed. Thus, this proposal would have a 
significant impact on the balance of interests in favour of importers. Furthermore, 
in the public consultation a majority of 65% of respondents was against a shipping 
clause of even 3 weeks and hence 6 weeks would be even more impossible for them 
to accept. This alternative proposal will therefore not be pursued further.  

The  publication  of  guidelines  will  also  improve  predictability  and  legal  certainty  for 
stakeholders In  the  public  consultation  a  majority  of  respondents  was  in  favour  of  the 
publication  of  guidelines:  64%  in  favour  of  a  guidelines  on  injury  margin,  69%  in 
favour  of  a  guidelines  on  choice  of  analogue country, 57% in favour of guidelines on 
Union interest test and 65% in favour of guidelines on expiry reviews.  

Clarifying practice and bringing the EU texts in line with jurisprudence of the EU 
courts  and  WTO  rulings  will  ensure  increased  legal  certainty  or  transparency  for 
stakeholders and limit the EU's exposure to the risk of legal action in the future.  

The proposals for combating threats of retaliation, i.e. ex officio initiations and an 
obligation  to  cooperate  in  such  proceedings  for  Union  producers,  should  improve 
Union producers' ability to seek protection under the EU's trade defence system against 
unfairly traded imports, when the relevant criteria are met. To the extent they are better 
shielded  from  retaliation  threats,  they  would  not  suffer  increased  losses  as  a  result  of 
continued dumped/subsidised imports for want of protection. Even though it may seem 
at  first  sight  that  an  obligation  to  cooperate  without  any  sanctions  in  case  of  non-
cooperation may not be effective, the procedures to be put in place in order to facilitate 
cooperation  and  guarantee  confidentiality  and  anonymity,  should  entice  companies  to 
fully benefit from the possibility of such ex officio initiations. In the public consultation 
76%  of  stakeholders  were  in  favour  of  ex  officio  initiations  in  cases  of  retaliation  or 
threat of retaliation.  

The overall negative economic impact of retaliation is very difficult to quantify, because 
due  to  such  threats  a  number  of  TD  cases  are  never  initiated  and  the  lost  sales  and 
decreasing profits of the EU producers concerned, due to the continued and uninhibited 
dumped/subsidised imports are not known.  

As  pointed  out  above  (under  3.2.1),  another  form  of  retaliation  is  third  countries 
initiating TD cases against EU exporters simply as a reaction to the EU’s own TD cases 
in order to dissuade either EU companies or the EU as such from using the instruments. 
In  such  cases  average  duty  levels  in  the  range  of  12%  to  35%  have  been  imposed  by 
third countries, thus considerably limiting the export possibilities of the EU companies 
concerned to those countries. The proposed actions against retaliation can help only to a 
limited extent with regard to this type of retaliation. Other actions in this respect consist 
of  taking  such  unwarranted  cases  up  bilaterally  and  eventually  requesting  dispute 
settlement under WTO.  

o  Alternative: possible sanctions in cases of non-cooperation would most likely not 
much  increase  the  effectiveness  of  this  proposal  as  regards  further  limiting  the 

EN 

36 

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threats  of  retaliation.  However,  some  Union  producers  may  perceive  such 
sanctions  as  an  additional  penalty  imposed  on  them  by  the  Commission  in  an 
already difficult situation. Therefore, this alternative solution will not be further 
pursued.  

• 

Improved monitoring and ex officio anti-circumvention investigations would increase 
the  effectiveness  of  the  instruments.  Circumvention  could  be  detected  faster  and  anti-
circumvention investigations initiated quicker. Thus, the period of circumvention and the 
volume of imports entering by means of circumvention could be reduced.  SMEs as much 
as larger companies would be able to benefit from these proposals. 

•  Non-application  of  the  lesser  duty  rule:  In  cases  of  distortive  subsidisation  and 
structural raw material distortions the lesser duty rule would not be applied on a country-
wide basis.  Thus the competitive advantage provided by the third country government to 
its exporters could be significantly reduced due to a higher AD or AS duty. In any event, 
the non-application of the lesser duty rule would in a number of cases lead to higher duties 
and would also have an impact on costs for importers, and possibly ultimately on prices 
for users and consumers of the imported product. However, the possibility of such higher 
duties  should  discourage  third  country  governments  and  exporters  from  engaging  in 
unfair/illegal trading practices.  A higher duty applied on a country-wide basis may have a 
significant negative impact on the overall export volume of the product from that country. 
The impact would be amplified in cases involving other third countries who benefit from 
the lesser duty rule. The imposition of higher duties would give some breathing space to 
EU  producers  affected  by  such  unfair  practices  (please  refer  to  3.1.4  for  details).  In  the 
public  consultation  76%  of  stakeholders  were  in  favour  of  not  applying  the  lesser  duty 
rule  in  cases  of  subsidisation,  circumvention  and  fraud.  In  regard  to  fraud  and 
circumvention, sufficient deterrents exist under current legislation, e.g. best facts available 
can  be  applied  to  companies  who  engage  in  such  behaviour.    Structural  raw  material 
distortions  were  raised  as  a  major  concern  by  many  stakeholders  in  the  public 
consultation.  

•  Longer  time  limits  for    users  (by  15  days)  will  have  practically  no  economic  impact 
since this proposal aims mainly at improving the quality of data available at the moment 
of  taking  a  decision  for  the  imposition  of provisional  or  definitive  measures.  Although, 
this proposal was not favourably received in the public consultation (63% against), it is 
proposed  to  go  forward  with  this  proposal.  The  proposal  is  important  in  the  interest  of 
fairness and improving effectiveness.   

o  Alternative:  further  extending  time  limits.  Although  this  proposal  has  merit 
regarding  facilitating  cooperation  for  stakeholders  and  in  particular  for  SME's, 
extending  deadlines  beyond  the  proposed  29  and  51  days  would  make  it  almost 
impossible  to  complete  an  investigation  within  the  mandatory  deadlines.  This 
alternative will therefore not be pursued further.  

• 

The  proposal  to  re-enforce  the  SME  helpdesk  will  help  reducing  the  administrative 
burden for SMEs, i.e. it will help them to find information regarding TDIs quicker and 
will  also  provide  useful  guidance  when  cooperating  in  an  investigation.  At  present, 
many SMEs are not even aware of TDI, although they are often the first businesses to 
suffer  from  unfair  imports.  Improving  their  awareness  of  TDIs  will  enable  them  to 
defend  themselves  against  unfair  trading  practices  –  a  right  which  at  present  can  be 

EN 

37 

   EN 

 
  
 
• 

• 

• 

• 

more easily exercised by large, mature enterprises. SMEs will also benefit from many 
other proposals, e.g. longer time limits for users or facilitating refund procedures. 

Facilitating refund procedures will have a positive impact in particular for importers 
since procedures will be become somewhat simpler and less time consuming. Improving 
the efficiency of refund procedures will also help to decrease the administrative burden 
of the institutions.  

No  negative  impact  for  Union  producers  is  expected  from  the  implementation  of  the 
proposal  to  reimburse  duties  collected  in  on-going  expiry  reviews,  in  cases  where  a 
review concludes that measures should be terminated due to no likelihood of injurious 
dumping/subsidisation and as a result, the measures are repealed. The measures remain 
in force during the review investigation; the outcome of the review, and whether or not 
duties  will  be  reimbursed  will  be  made  known  only  at  the  end  of  the  expiry  review 
investigation (which typically takes between 12 and 15 months to complete). Therefore, 
it is unlikely that importers would change their import strategy during the period of the 
on-going  expiry  review  and  risk  not  being  reimbursed  in  case  of  a  prolongation  of 
measures. It is also highlighted that the reimbursement of duties represents a significant 
increase of administrative burden for the national customs authorities. 

In  the  public  consultation  56%  of  respondents  were  against  reimbursing  the  duties  in 
case of termination of expiry reviews without prolongation of measures. It was argued 
that the duties should be kept as a compensation for the injurious dumping/subsidisation 
that  took  place  before  the  imposition  of  measures.  This  is  however  a  misperception. 
According  to  WTO  law  a  TD  duty  should  remain  in  force  only  as  long  as  and  to  the 
extent  necessary  to  counteract  injurious  dumping/subsidisation.  Moreover,  since  the 
positive  impact  on  importers  is  not  accompanied  by  any  negative  impact  on  Union 
producers it is proposed to go forward with this proposal. It is important to pursue this 
issue also in the interest of fairness, i.e. it is only fair to reimburse duties in cases where 
the review investigation shows that measures should be terminated. 
The  automatic  combination  of  the  2nd  and  any  subsequent  expiry  review  with  an 
interim  review  may  have  a  negative  impact  on  stakeholders.  Since  such  combination 
would  not  be  warranted  in  all  cases,  it  would  thus  only  serve  to  create  unnecessary 
additional workload. In the public consultation 57% of stakeholders were against such 
automatic combination.  

o  Alternative:  The  possibility  for  exporters  to  request  an  interim  review  in 
combination  with  the  2nd  expiry  review  is  not  expected  to  have  a  significant 
negative  impact  since  first,  the  burden  of  showing  that  the  relevant  criteria  are 
fulfilled remains with the applicant requesting the interim review; and second, the 
standards of initiation and investigation for the interim review remain unchanged. 
This adapted proposal should address the concerns expressed by stakeholders who 
were against the automatic combination and thus this alternative will be further 
pursued in this exercise.  

The  proposal  regarding  ex  officio  interim  reviews  in  cases  of  anti-competitive 
(cartel) behaviour will also have a very limited economic impact since these cases are 
extremely rare (the Commission services are aware of a single case in the past). In the 
public consultation slightly more respondents were against (44%) than in favour (40%) 
of  this  proposal.  However,  this  was  most  probably  due  to  a  misinterpretation  of  the 
question,  and  it  is  therefore  proposed  to  pursue  this  issue,  in  the  interest  of  good 
administration.  

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• 

Changing  the  definition  of  EU  producers  by  also  including  EU  companies  that  have 
outsourced the final stages of production would constitute an important departure not 
only  from  the  current  EU  TDI  system,  but  also  from  the  WTO  definition  of  domestic 
industry48.  It  would  also  have  a  direct  impact  on  the  number  of  AD  investigations 
initiated since a complaint must be supported by a major proportion of Union producers. 
However,  companies  that  have  outsourced  production  would  not  support  such  a 
complaint.  This  would  mean  that  EU  producers  who  meet  the  current  definition  for 
Union  industry  and  are  faced  with  dumped  and/or  subsidised  imports  would  have  no 
means  to  seek  a  remedy.  The  economic  consequences  for  these  producers  would  be 
significant  in  terms  of  declining  profits  and  the  threat  of  job  losses  and  possible 
company closures. Ultimately, the industry could be significantly weakened or, in cases 
of predation, even disappear. 

It  may  be  argued  that  certain  industries  producing  in  the  EU  are  inefficient  and  the 
economic  benefit  derived  from  TD  duties  for  EU  producers  does  not  justify  the 
increased costs for users and consumers. In this context it should be highlighted that the 
Union interest test, which is a specific feature of the EU's TDI system – and not a WTO 
requirement – takes account of outsourced production. According to the Union interest 
test,  measures  may  not  be  imposed  in  cases  where  despite  the  existence  of 
dumping/subsidisation, injury and a causal link, such measures would be clearly against 
the  interests  of  the  EU.  Thus,  the  additional  costs  of  a  duty  for  users  of  the  imported 
product as an input, or for consumers, are weighed against the benefits that the industry 
would  derive  from  the  imposition  of  a  duty.    In  cases  where  such  additional  costs  for 
users and consumers are clearly disproportionate, duties may not be imposed.  

Given the important negative economic impact for the Union industry and the fact that 
interests  of  EU  producers  that  have  outsourced  production  are  already  taken  into 
account in the Union interest test, this proposal will not be pursued further.  

• 

Limiting  the  duration  of  measures  to  a  maximum  of  10  or  15  years  is  also  not 
foreseen in the relevant WTO agreements. Potentially unlimited TD protection is held 
by some to allow uncompetitive firms/industries to continue to trade at the expense of 
the  consumer,  delaying  or  preventing  restructuring  and  the  reallocation  of  capital  and 
resources. Proponents of this view argue that limiting AD/AS duties in time would force 
such uncompetitive businesses either to restructure or to liquidate.  

However, since AD/AS measures are only prolonged in cases where an expiry review 
investigation  has  shown  that  the  injurious  dumping/subsidisation  persists,  limiting  the 
duration  of  TD  measures  would  have  significant  negative  consequences  for  EU 
producers: they would be left without any remedy against unfair and injurious trading 
behaviour  such  as  continued  distortive  subsidisation,  or  structural  dumping.  Importers 
on the other hand would have the certainty that after a certain period, measures would 
be terminated and imports could resume without any duty being paid. This would also 
give an incentive to third countries that engage in such practices – namely, that if they 
continue the unfair trade practice long enough, they will prevail.  

Given the important negative consequences for the Union industry and that this proposal 
would clearly go against general objective 3, i.e. to restore fair trading conditions, this 
proposal will not be further pursued.  

48 Further guidance on the definition of the Union industry was given in the WTO Panel: Farmed Salmon from 

Norway, WT/DS337/R of 16.11.2007(paras. 7.107 to 7.122). 

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• 

Lowering standards for initiation and investigations would at first sight seem to be 
favourable  for  EU  industry  since  it  would  facilitate  an  increase  in  the  number  of  TDI 
investigations and potentially, of measures also.  At the same time, lowering standards 
for initiation would in many cases create untenable expectations among producers. Such 
cases,  even  if  they  passed  the  initiation  stage,  would  in  many  instances  need  to  be 
terminated without the imposition of measures, since WTO minimum standards must be 
complied  with.  It  should  be  noted  that  under  the  current  system  around  50%  of 
complaints do not meet the threshold for initiation (and are thus rejected); and around 
40% of investigations which are opened are terminated without imposition of measures. 
Thus,  lowering  the  standards  might  serve  only  to  create  an  unnecessary  additional 
burden  for  stakeholders  and  for  the  EU  institutions  (preparing,  filing  a  complaint,  co-
operating  and  conducting  a  costly  investigation)  without  any  satisfactory  result.  
Persevering with low quality cases would most likely lead only to an increase of court 
and WTO challenges. In addition, lowering standards would be perceived by our trading 
partners as a move towards protectionism at a time when the EU is pushing its partners 
away from protectionist moves. For these reasons, this proposal will not be further 
pursued.  

6.4. 

Impact of Policy Option 3 

Out of all the proposals analysed individually under option 2, the proposals that are beneficial 
to all stakeholders, or are beneficial to one group of stakeholders without either undermining 
the effectiveness of the TDIs or having a disproportionate negative effect on another group of 
stakeholders, were selected and are put forward as a package in option 3. Thus the proposals 
selected  for  option  3  represent  a  balanced  solution  for  most  of  the  problems  identified  and 
best contribute to achieving the objectives.   

Economic impact 

Increased  transparency,  predictability  and  legal  certainty,  will  improve  the efficiency  of  the 
EU’s TDIs. Cooperation in investigations will become somewhat less resource intensive and 
less costly for stakeholders. This is beneficial to all stakeholders and of particular importance 
for  SMEs.  Irrespective  of  whether  they  are  affected  as  producers,  importers  or  users  of 
products subject to investigation, they will be better equipped to make their own judgements 
about  a  number  of  TD  issues  (for  example,  about  whether  or  not  to  intervene  in  the  Union 
interest test analysis) instead of relying on costly specialized advice. 

Furthermore,  option  3  focuses  not  only  on  improving  the  effectiveness  of  the  existing  
remedies against unfair trade but also includes means to prevent such unfair trade, such as ex 
officio initiations in cases of threats of retaliation, ex officio anti-circumvention investigations 
or the non-application of the lesser duty rule in specific cases. While restoring a level playing 
field  following  unfair  trading  practices  is  the  main  goal  of  TDI,  preventing  such  unfair 
practices  in  the  first  place  would  have  an  even  more  positive  impact,  since  it  would  avoid 
damage to European industry. The chances to retain or even create jobs in the EU would be 
enhanced. 

However, overall, policy option 3 would not significantly change the current TDI activity and 
therefore its impact on overall trade flows would only be marginal.  

Other impacts 

Since TD affects only a small part of trade overall, the overall social impact will also be very 
small.  However,  for  a  specific  sector  or  industry  concerned,  the  impact  may  be  significant 

EN 

40 

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(please  refer  to  annex  1  for  employment  data).  Option  3  would  thus,  in  certain  cases 
contribute to limiting job losses for Union industry. Any negative impact on the job situation 
of  importers  would  be  clearly  outweighed  by  the  positive  impact  on  jobs  for  the  Union 
industry since in most cases trading is less labour incentive than producing. 

 Furthermore,  in  the  majority  of  TDI  cases  the  impact  of  the  duty  on  the  costs  of  the  final 
product is very small and is often dealt with by adjusting the importers' or users' margin. Even 
for  consumer  products  such  as  shoes,  the  average  duty  was  1,60  €  per  pair  which  had  a 
minimal negative effect on importers and consumers, but helped protect thousands of jobs in 
the EU shoe industry. In any event, due to the Union interest analysis, measures will not be 
imposed if they are against the overall Union interest, i.e. if they will have disproportionate 
effects  on  importers,  users  and/or  final  consumers.  While  the  imposition  of  AD  duties  may 
have  a  negative  impact  on  the  employment  situation  in  the  exporting  country  concerned,  it 
must also be considered that selling at dumped prices is not sustainable in the long term for 
any  business,  and  sooner  or  later  results  in  job  losses  in  any  event.  In  cases  of  predatory 
dumping,  the  majority  of  competitors  exit  the  market,  so  that  the  surviving  exporting 
producers can thrive on high monopoly prices with the consequent negative impact for users 
and consumers.   

Regarding the environment, again, since the overall impact of TD measures is very small any 
impact on the environment is expected to be marginal as well.  

7. 

COMPARING THE OPTIONS  

Policy option 1  

Policy  option  1  is  the  "no  change"  option,  meaning  that  none  of  the  problems  would  be 
addressed  and  the  status  quo  would  remain.  However,  some  of  the  issues,  if  not  addressed, 
may  in  the  long-term  get  worse  and  result  in  negative  consequences.  In  order  to  show  the 
changes that option 3 would bring it is compared to this no change option. 

Policy option 2 

To the extent it addresses individual problems identified, policy option 2 would meet certain 
of  the  operational  objectives  and  partially  meet  some  of  the  specific  objectives.  However, 
since it lacks coherence, it would not make a significant contribution to achieving the general 
objectives.  Such  individual  approach  also  bears  the  risk  of  creating  imbalance  between 
producing and importing interests.  

Policy option 3 

Objective G 1: Contribute to free and fair trade in the world 

This  option  addresses  all  operational  objectives  and  contributes  significantly  to  all  specific 
objectives. It is therefore well placed to also fully or partially meet some or all of the general 
objectives. In particular the proposals which aim at discouraging third country governments 
from  applying  trade  distortive  subsidies  and  refrain  from  retaliation  would  contribute  to 
furthering free and fair trade in the world.  

EN 

41 

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Objective  G  2:  Improve  trade's  contribution  to  economic  growth,  consumer  benefits  and 
labour effects.  

Since option 3 includes proposals benefitting importers and ultimately consumers, and other 
proposals  benefiting  EU  industry,  it  contributes  to  improving  consumer  benefits  as  well  as 
having a positive effect on labour.  It therefore also addresses the related specific objectives 
S1 and S2 and in particular S6 since it keeps a balance of interests among stakeholders. Thus 
it would contribute to overall economic growth in the EU without favouring either importing 
or  producing  interests.  Based  on  the  premise  that  economic  growth  builds  on  free  but  fair 
trade,  option  3  is  also  well  placed  to  contribute  to  economic  growth  in  the  EU  and  in  the 
world.    

Objective G 3: Restore fair trading conditions 

Besides the proposals mentioned under G1, option 3 also contains other proposals that would 
help to restore fair trading conditions e.g. non-application of the lesser duty rule in cases of 
subsidisation or structural raw material distortions, which contribute significantly to making 
sure that stakeholders can make full use of the instruments that are legally at their disposal to 
restore a level playing field (S1).  

Overall, option 3 contributes significantly to all specific objectives and is well placed to also 
achieve a great deal with regard to the general objectives.   

In terms of economic impact, since the trade volume affected by TD measures is small any 
overall  economic  impact  of  this  initiative  would  be  equally  small.  However,  the  economic 
impact  of  option  3  for  a  specific  sector  or  industry  concerned  may  be  significant.  It  would 
have some impact on trade flows, on consumer benefits and also on labour. It is highlighted 
that  option  3  is  designed  to  keep  a  balance  among  importing  and  producing  interests.  Any 
social  and  environmental  impact,  though  limited,  would  be  positive.  Moreover,  option  3 
would  also  increase  fairness  in  terms  of  a  more  equitable  information  distribution, 
reimbursement of unwarranted duties etc. 

8. 

MONITORING 

AND 

EVALUATION 

The  effectiveness  of  the  changes  introduced  to  the  TDI  system  by  this  initiative  should  be 
subject to monitoring and evaluation. In order to be effective, the period of evaluation should 
cover  a  minimum  of  3  years  after  the  relevant amendments have been introduced. The year 
2013 would be used as the benchmark year. 

The table below gives an overview of the operational objectives tackled and a set of indicators 
to  monitor  the  effectiveness  of  the  proposed  changes.  They  may  be  supplemented  by  other 
indicators found suitable for monitoring the changes introduced. 

Table 12: Monitoring- objectives and indicators 

Objectives 

Indicators 

Sources of 
information 

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42 

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Pre-disclosure/ 
notice 

advance 

Transparency 
and 
Predictability 

- interventions by the hearing officer 
- change in number of requests of corrections 
between provisional and definitive measures 
-  comparison  between  the  cases  before  and 
after  the  regulation  amendment,  looking  in 
particular  at  the  trade  pattern  linked  to  the 
advance 
of 
before 
provisional measures  

imposition 

notice 

-  DG  TAXUD 
(surveillance) 
- Eurostat 
- 14.6 data base 

Fight against 
retaliation 

Ex-officio 
new investigations 

initiations  of 

-  increase  in  number  of    initiations  of  ex 
officio cases 

- DG TRADE 

Effectiveness 
and 
enforcement 

Ex-officio 
circumvention 
investigations 

anti- 

No lesser duty rule in cases 
of raw material distortions  
or subsidization 

-  comparison  of  the  time  taken  to  assess  a 
case of circumvention lodged by the industry 
before,  and  ex-  officio  initiations  after  the 
enforcement of the regulation 
- comparison of level of duties imposed with 
and without LDR 
-  change  in  trade  flow  following  withdrawal 
of  LDR  in  cases  of  raw  material  distortions/ 
subsidisation 

limits 

for 

time 

Longer 
users 
SME helpdesk 

Facilitate 
procedures 

refund 

Facilitate 
cooperation 

Optimizing 
review 
practice 

Combined  expiry  /  interim 
reviews 
Reimbursement  of  duties 
in expiry reviews 

Codification 

<2% 
dumping  margin 
companies  are  excluded 
from a proceeding 
Possibility 
methodologies in review/ 
refund investigations 

change 

to 

for 

filing 

requests 

in  number  of 

-  number  of  users  cooperating  before  and 
after the introduction of the regulation 
-  change 
in  number  of  SMEs 
complaints 
-  change 
information by SMEs 
- number  of applicants 
- number of applications 
- amounts claimed 
- amounts granted 
-  increase  of  number  of  interim  reviews 
linked to expiry reviews 
-analysis  of  the  trade  pattern  during  the 
review  period,  compared  to  the  previous  5 
year period of imposition  measures  
-  number  of    cases  opened  for  companies 
previously excluded from a proceeding 

- number of review/refund investigations with 
a changed methodology applied 

- DG TRADE 

- DG TRADE 

-DG TRADE 
-Eurostat,  

- DG TRADE 

- DG TRADE 

- DG TRADE 

- DG TRADE 

- DG TRADE 

- DG TRADE 

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ANNEX 1 

Quantitative Statistics on relevant aspects of TDI activities both in the EU and in WTO. 

Period considered 2007-2012  

1) Number of cases initiated both by EU (initiation and follow up) and WTO 

EN 

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2) Figures about Employment 

The here outlined decisions are only those which have precise figures regarding the employment in the Union industry published. For the considered period, 
there are also 14 cases, which for confidentiality do not display the actual numbers and which are not reported here. 

Decisions 2010 

Type of decision 

Complainant 

Product (originating country) 

Period 

Employees during RIP 

Decision 

number 

404/2010 

512/2010 

478/2010 
472/2010 

(473/2010) 

Provisional  

Definitive 

Provisional  

Provisional (AS) 

812/2010 

Provisional  

1030/2010  

Definitive  

1035/2010 

Provisional  

1042/2010 

Provisional  

1036/2010 

Provisional  

1186/2010 
(1185/2010) 
1261/2010 

Definitive (AS) 

Provisional AS 

1242/2010 

Definitive  

EUWA49 

EFMA50 

CIRFS51 

Aluminium wheels (PRC) 

Ammonium nitrate (UKR) 

High tenacity yarn polyesters (PRC) 

2006 - 2008 

2005 - 2008 

2005 -2008 

Polyethylene Terephthalate Committee of Plastics 
Europe 

Polyethylene terephthalate (Iran –UAE) 

2006 – 2008 

APFE52 

Continuous filament glass fibre (PRC) 

Polyethylene  Terephthtalate  Committee  of  Plastics 
Europe  

Polyethylene terephthalate (PRC) 

Borealis Agrolinz Melamine GmbH, Dsm Melamine BV, 
Zaklady Asotowe Pulawy 

Melamine (PRC) 

CEPIFINE53 

Coated fine paper (PRC) 

2006 - 2008 

2006 - 2008 

2006 - 2008 

2006 - 2008 

Industrias  Quimicas  del  Ebro  SA,  MAL  Magyar 
Aluminium,  PQ  Silicas  BV,  Silkem  d.o.o.,  Zeolite  Mira 
Srl Unipersonale 

Graftech  International,  SGL  Carbon  GmbH,  Tokai 
Erftcarbon GmbH 
Eurofer54 

Eurocord55 

Zeolite A powder (BH) 

2005 - 2008 

Graphite electrode systems (India) 

Stainless steel bars (India) 

Synthetic fibre ropes (India) 

2006 - 2008 

2007 - 2009 

2006 - 2008 

Total 2010 

13000 

3400 

1300 

2000 

3300 

2000 

600 

6200 

200 

1800 

900 

600 

35300 

49 Association of Eurpean wheel manufacturers 
50 European Fertilizer Manufacturers Association 
51 European Manmade Fibres Association 
52 European glass Fiber Producers Association  
53 European association of fine paper manufacturers 
54 European Federation of Iron and Steel industries  
55 Liaison Committee of the EU Twine, Cordage and Netting Industries 

EN 

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EN 

 
  
                                                 
 
 
 
 
Decisions 2011 

Decision 

number 

82/2011 

Type of decision 

Complainant 

Product (originating country) 

Period 

Employees during RIP 

Definitive/  terminating  partial  interim 
review 

FEIC56 

Saint-Gobain Vertex s.r.o.,  

Okoume' plywood (PRC) 

2006 2008 

1000 

Tolnatex  Fonalfeldolgozo 
Valmieras ‘Stikla Skiedra’ AS  

es  Muszakiszovetgyarto, 

Open mesh fabrics of glass fibres (PRC) 

2006 2009 

138/2011 

Provisional 

258/2011 

Provisional 

Definitive  
Definitive 

248/2011 
287/2011 

451/2011 

452/2011 
990/2011 

Definitive (both AS AD) 

Definitive 

CEPIFINE 

EBMA59 

Vitrulan Technical Textiles GmbH 
CET57 

APFE58 (now GlassFibreEurope) 
Eurometaux 

Ceramic tiles (PRC) 

Continuous filament glass fibre (PRC) 
Tungsten carbide (PRC) 

Coated fine paper (PRC) 

Bicycles (PRC) 

2007 2009 

2006 2008 
2006 2008 

2006 - 2008 

2007 2009 

Total 2011 

1200 

75000 

3300 
600 

6200 

13700 

101000 

56 European Federation of the Plywood Industry 
57 European Ceramic Tiles Manufacturers 
58 European Glass Fibre Association 
59 European Bicycles Manufacturers Association 

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Decisions 2012 

Decision 

number 

Type of decision 

Complainant 

Product (originating country) 

Period 

Employees during RIP 

2/2012 

Definitive 

115/2012 

Provisional 

102/2012 

Definitive 

163/2012 

(Com decision) termination 

349/2012 

Definitive 

EIFI60 

EIFI 

EWRIS61 

EIFI 

Stainless steel fasteners (PRC-India) 

Stainless steel fasteners (India) 

Steel ropes and cables (PRC – UKR) 

Stainless steel fasteners (India) 

Distillerie  Bonollo  SpA,  Industria  Chimica  Valenzana 
SpA,  Distillerie  Mazzari  SpA,  Caviro  Distillerie  SRL, 
Comercial Quimica Sarasa SL 

Tartaric acid (PRC) 

402/2012 

Provisional 

AIRAL Scrl62 

585/2012 

Definitive  

Defence Committee of the Seamless Steel Tubes 

699/2012 

Provisional 

833/2012 

Provisional 

796/2012 

Definitive 

845/2012 

Provisional 

924/2012 

Amendment definitive 91/09 

Defence committee of the Stell Butt/Welding Fittings 
Industry 

Eurometaux 

LAMMA63 

Eurofer 

DSB 

1072/2012 

Provisional 

EU producers (>30%) 

Aluminium radiators (PRC) 

Seamless pipes and tubes of iron and steel 
(Russia – Ukr) 

Tube  and  pipe  fittings  of  iron  or  steel 
(Russia – Turkey) 

Aluminium foils in rolls (PRC) 

Lever arch mechanisms (PRC) 

Organic coated steel products (PRC) 

Iron or steel fasteners (PRC) 

Ceramic 
(PRC) 

table  ware  and  kitchenware 

2007 – 2009 

2008 - 2010 

2007 – 2009 

2008 - 2010 

2007 – 2009 

2008 – 2010 

2008 - 2010 

2008 - 2010 

2008 - 2010 

2008 - 2010 

2008 - 2010 

2003 - 2006 

2008 – 2010 

Total 2012 

900 

800 

2700 

800 

200 

1600 

13400 

800 

300 

600 

5500 

8600 

25100 

61300 

60 European Industrial Fasteners Institute 
61 Liaison committee of European Union Wire Rope Industries 
62 International Association of Aluminium radiator Manufacturers Limited Liability consortium 
63 Lever arch mechanism manufacturers association 

EN 

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3) Initiations by Sector 

EN 

48 

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4) Initiations by Country64 

64 the second pie chart comprises all actions against third party countries. Circumvention cases are counted to the 
country  which  actually  is  the  source  of  the  exported  good  and  not  to  the  one  through  which  the 
circumvention is perpetrated. 

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5) Duties Collected by EU MS 

6) Trade affected (Imports under measures/total imports)  

EN 

50 

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ANNEX 2 

Flow chart of a typical anti-dumping investigation 

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51 

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ANNEX 3 

Updating trade legislation procedures: the Omnibus I proposal 
The Commission today took the first step to update the way decisions on trade policy are adopted in 
the EU. This follows changes brought about in the Lisbon Treaty and the adoption of the so-called 
“Comitology Regulation” that entered into force on 1 March. 

What legislation will the Omnibus I proposal affect? 

The proposal covers 24 regulations in total and includes 

-  all trade defence instruments, 

-  the Regulation establishing the EU's Generalised System of Preferences, 

-  the Economic Partnership Agreement Market Access Regulation, 

-  the Trade Barriers Regulation, 

-  the Blocking statute responding to legislation with extra-territorial effect, and, 

-    a  number  of  regulations  implementing  safeguard  clauses  and  managing  the  implementation  of 
   bilateral agreements. 

The Commission proposes to modify the procedures for the adoption of acts in these regulations and 
make  certain  adjustments  related  to  decision-making  procedures  but  does  not  propose  to  amend  the 
substance of these regulations. 

What does it mean for decisions taken before this new legislation 

enters into force? 

All decisions taken between now and the entry into force of the new procedures 

remain valid. 

What does this mean for the European Parliament and the Council? 

The European Parliament, the Council and the Commission agreed that trade policy would be subject 
to the standard procedures for the control of the Commission's implementing acts and delegated acts 
where  appropriate.  This  was  part  of  the  agreement  on  Regulation  182/2011  governing  the 
Commission's exercise of implementing powers. 

The Parliament will be informed of the Commission's draft measures taken under implementing acts 
(and could challenge those decisions if it considers that the Commission has exceeded its powers). The 
Parliament has an equal say with the Council in the adoption of delegated acts. 

Member States will remain involved in decision-making procedures for implementing acts in a similar 
way as under the existing systems. The Commission will continue to work closely with the Member 
States in  a committee and the Member states will be asked to vote on draft  measures. For  example, 
they will be able to decide, by qualified majority, to reject a Commission draft measure. A qualified 
majority  in  favour  will  be  required  for  multilateral  safeguards,  and  the  adoption  of  definitive  anti-
dumping and countervailing duties will move from a simple majority to reject to a qualified majority 
to reject as of 1 September 2012. 

What are the next steps? 

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This  proposal  will  now  be  discussed  with  the  Council  and  the  European  Parliament  and  adopted 
according to the co-decision procedure. 

A  second  proposal,  known  as  Omnibus  II,  will  follow  by  the  summer,  which  will  review  whether 
procedures  currently  based  on  the  1999  comitology  decision  should  be  converted  into  delegated 
powers.  Delegated  powers  are  granted  to  the  Commission  to  supplement  or  amend  legislation.  The 
delegation may be revoked by the Council or Parliament and the Council or Parliament may reject the 
exercise  of  the  delegated  power  in  specific  circumstances.  This  proposal  will  concern  legislation 
dealing  with  textiles  and  steel  as  well  as  certain  elements  of  the  EU's  Generalised  System  of 
Preferences  and  the  Economic  Partnership  Agreement  Market  Access  Regulation.  Why  does  this 
legislation only affect trade? 

This proposal is a compilation of legal modifications that update a range of trade policy regulations. 
Omnibus  I  only  concerns  trade  policy  because,  together  with  competition  policy,  trade  policy  has 
largely been excluded from the existing comitology decision. Almost all other areas of EU policy were 
previously  subject  to  comitology.  Omnibus  II  is  part  of  a  broader  exercise  to  review  all  legislation 
containing comitology in the light of the entry into force of the Treaty of Lisbon. Similar legislative 
proposals are being prepared across a number of different policy areas. 

For further information 

Regulation governing the Commission's exercise of implementing powers ("Comitology Regulation") 

http://eurlex. 

europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:055:0013:0018:EN:PDF 

Factsheet on the entry into force of the new comitology rules 

http://www.consilium.europa.eu//uedocs/cms_data/docs/pressdata/EN/genaff/11951 

6.pdf 

Contact 

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ANNEX 4 

EVALUATION 
OF THE 
EUROPEAN 
UNION’S 
TRADE 
DEFENCE 
INSTRUMENTS 
Contract No. SI2.581682 

FINAL 
EVALUATION 
STUDY 
27 February 2012 

Executive Summary 

Trade  is  a  cornerstone  of  the  European  Union’s  (EU’s)  economic  prosperity.  For  EU 
consumers,  trade  provides  access  to  a  wider  variety  of  goods  at  lower  prices  than  could  be 
produced domestically. For EU businesses, it provides larger markets and access to essential 
production  inputs,  including  technology  developed  abroad.  For  EU  workers,  it  creates  the 
basis for higher paying jobs as the EU specialises in doing what it does best. And for trading 
partners abroad, access to the large and dynamic EU market provides reciprocal benefits.  

International  trade  takes  place  within  a  framework  of  rules  developed  through  negotiations, 
refined  through  practice,  and  clarified  through  litigation  before  the  national  courts  and 

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international  trade  dispute  settlement  mechanisms  under  the  World  Trade  Organisation 
(WTO).  These  rules  are  designed  to  ensure  that  trade  works  to  the  mutual  benefit  of  the 
trading partners and is based on genuine competitive advantages.  

The rules-based international trade system provides remedies against unfair trade practices. It 
allows for the imposition of anti-dumping measures if imported goods are sold at less than fair 
market  value  (“dumping”),  and  for  countervailing  measures  if  the  imported  goods  benefit 
from  subsidies  provided  by  foreign  governments,  provided  that  the  dumped  or  subsidised 
imports  cause  or  threaten  to  cause  injury  to  the  domestic  industry  in  the  importing  country. 
The EU’s (and other WTO members’) use of these trade defence instruments (TDI) is based 
on  the  relevant  rules  and  procedures  set  out  in  the  WTO  Agreements  on  anti-dumping  and 
subsidies and countervailing measures. 

This report evaluates the EU’s use of TDI. The review is timely on several grounds. Firstly, 
there  have  been  profound  changes  in  the  global  division  of  labour  and  organisation  of 
production over the last decade. This has led the WTO to coin the term “made in the world” to 
describe  how  products  are  made  today.  Secondly,  macroeconomic  stress  in  the  context  of 
economic crisis has led countries to resort to extraordinary policy measures with significant 
implications  for  global  trade  flows.  Finally,  the  increased  use  of  TDI  by  the  EU’s  trading 
partners,  in  particular  by  emerging  economies,  has  led  to  an  increasing  risk  of  retaliation 
against EU producers requesting the application of TDI. These changes in the global trading 
environment raise fundamental questions – not only for the EU but for all countries using TDI 
– as to the ability of trade defence to deliver its intended results. This report takes up these 
questions, focussing on the issues of relevance for the EU. 

Scope of the Evaluation 

This  evaluation  is  made  pursuant  to  the  EU  regulatory  requirement  that  policies  be 
evaluated regularly and systematically. In line with the Terms of Reference for the evaluation, 
this report has five inter-related objectives, namely to provide: 

Section 1.3

1)  a concise description of the EU’s TD system and practice; 
2)  a  balanced  economic  analysis  of  the  EU’s  use  of  TDI  in  the  context  of  the  current 

international legal and regulatory framework and in light of economic realities; 

3)  a  review  of  the  EU  basic  Anti-dumping  and  Anti-subsidy  Regulations  in  light  of  the 
administrative practice of the EU institutions, the judgments of the Court of Justice of the 
European Union and the recommendations of the WTO Dispute Settlement Body (DSB); 
4)  a comparison of EU policy and practice to that of a selected group of EU trading partners, 

i.e. Australia, Canada, China, India, New Zealand, South Africa and the USA; and 

5)  in  light  of  the  foregoing,  an  evaluation  of  the  performance,  methods,  utilisation  and 

effectiveness of the present TDI scheme in achieving its trade policy objectives. 

The  evaluation  period  is  2005-2010.  This  period  was  chosen  in  view  of  the  fact  that  the 
previous evaluation of EU TDI was undertaken in 2005 and covered practice until the end of 
2004. The evaluation does not cover the rarely used safeguards instrument. 

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Evaluation methodology and sources of information 

The evaluation applied a three-dimensional methodology, combining an economic analysis 
of causes and effects of TDI with a cross-country evaluation of TD policies and procedures 
and a legal review of the two basic Regulations. The documentary sources for the evaluation 
were:  

Section 1.4

(cid:131)  a review of documents: official EU documents (notices of initiation, regulations), reports 

(cid:131) 

and guidelines, secondary literature;  
interviews  and  written  consultations  of  65  stakeholders,  including  the  European 
Commission,  other  EU  institutions  and  Member  States,  Union  industry  representatives, 
exporters/ importers/users and other stakeholders (consumers, trade unions, trade lawyers, 
etc.); and 

(cid:131)  an  online  survey  among  EU  firms  with  245  responses,  to  collect  their  views  on,  and 

experience with, the EU’s use of TDI.  

How the EU uses TDI 

The  EU’s  use  of  TD  measures  is  driven  by  complaints  from  industry  alleging  dumping 
and/or  subsidisation  of  imports  and  providing  evidence  of  injury  or  threat  of  injury.  The 
European Commission investigates the claims, determines whether they are substantiated, 
calculates  the  level  of  duties  necessary  to  remedy  the  injurious  effects,  and  determines 
whether  imposition  of  measures  would  be  in  the  interests  of  the  Union.  If  measures  are 
imposed, they normally remain in place for five years, unless removed earlier pursuant to an 
interim review, or extended for an additional term pursuant to an expiry review. 

See appendix I1 for 
a description of EU 
TDI 

While the EU is the third most frequent user of TDI after India and the USA, its use of 
TDI  is  moderate  in  relation  to  its  share  in  world  trade:  the  EU  accounted  for  17.8%  of 
world imports (excluding intra-EU trade) during the evaluation period, but only for 10.7% of 
all  TD  investigations  and  9.4%  of  all  measures  imposed.  The  amount  of  EU  imports 
affected  is  also  quite  small:  in-force  measures  affect  about  0.6%  of  EU  imports. 
Measured  this  way,  on  the  basis  of  available  evidence,  the  EU’s  use  of  TDI  is  moderate, 
covering  a  greater  share  of  imports  than  Australia,  Canada  and  South  Africa  but  a  smaller 
share than China, India and the United States. 

Section 1.2

In the evaluation period 2005-2010, the European Commission initiated 68 anti-dumping and 
10 anti-subsidy investigations. 80 new measures were imposed. 79 expiry reviews led to the 
extension  of  measures  in  54  cases.  At  the  same  time,  the  European  Commission  terminated 
measures  pursuant  to  interim  and  expiry  reviews  in  28  cases;  an  additional  75  measures 
expired under the sunset provisions. The stock of in-force measures (excl. undertakings and 
measures  extended  following  anti-circumvention  investigations)  decreased  from  140  at  the 
beginning of the evaluation period to 117 at the end. 

TD  measures  were  taken  in  a  wide  range  of  agricultural  and  industrial  sectors  in  the 
evaluation  period.  However,  there  was  a  heavy  concentration  of  cases  in  the  chemicals  and 

Section 2.2.1

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metal  products  sectors,  with  lesser  spikes  in  the  plastics  and  machinery  and  equipment 
sectors.  

In terms of exporting countries, 130 countries were named in the new 78 investigations; most 
of  these  were  developing  economies,  with  China  accounting  for  over  one-third  of  all 
individual investigations. 

The majority of the TD cases opened in the evaluation period concerned fairly basic industrial 
goods  that  compete  largely  on  price.  Such  goods  are  therefore  likely  to  attract  competition 
from emerging market exporters. Exporters from these countries were involved in 83% of the 
investigations initiated in the evaluation period. 

EU TD investigations, by Major Industrial Sector, 2005-2010 (number of cases) 

Source: Authors’ calculations based on DG Trade investigations database 

Countries Named in EU TD investigations, 2005-2010 

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Source: Authors’ calculations based on DG Trade investigations database 

Findings  

The economics of the EU’s TD practice 

The observed effect of TD measures is to raise the price and reduce the volume of imports of 
the subject goods. This is simply the effect of tariffs and thus indistinguishable from ordinary 
trade  protection:  domestic  producers  benefit  but  consumers  or  downstream  industries  are 
negatively affected. Since standard economic analysis indicates that the costs to consumers or 
downstream  industries  of  the  higher  prices  induced  by  tariffs  are  normally  larger  than  the 
benefits to domestic producers, the economic rationale for TD depends crucially on whether 
the practices addressed by trade defence measures are anti-competitive or market-distorting, 
or entail excessive adjustment costs by the EU industry. 

Section 2.1

The  economic  analysis  in  chapter  2  demonstrates  that  trade  defence  is  not  ordinary 
protection: it is targeted, contingent and (in the normal course) temporary. All three features 
are  important.  TDI  target  practices,  such  as  forms  of  price  discrimination  by  firms  and 
subsidies  provided  by  government,  which  imply  a  transfer  of  economic  welfare  from  the 
origin country to the EU. In a global perspective, such transfers of welfare are largely neutral 
as  they  net  out  each  other.  By  the  same  token,  the  reversal  of  such  practice  through  trade 
defence  measures  is  also  largely  neutral.  At  the  same  time,  the  remedy  of  injury  to  the 
importing country producers can make the intervention globally welfare-improving. Finally, 
in  a  multilateral  trading  system,  with  many  sources  of  imports  and  many  export  markets, 
imposing  trade  defence  measures  on  one  or  a  few  bilateral  flows  has  limited  effects  on 
welfare  because  trade  flows  mostly  rearrange  (trade  diversion  and  deflection)  rather  than 
disappear. 

The review of the motives for TDI confirmed the general view in the economic literature 
that  the  stated  rationale  for  EU  TDI,  i.e.  countering  unfair  trading  practices,  finds  little 
support based on the actual pattern of use. Only a handful of the TDI cases examined involved 
pricing practices (on the part of the foreign firms) which would be likely to prompt domestic 
competition  authorities  to  intervene,  if  similar  pricing  behaviour  had  occurred  within  the 
domestic  market.  It  would  therefore  appear  that  TDI  are  not  usually  countering  anti-
competitive  predatory  dumping.  That  being  said,  in  a  certain  number  of  cases,  primarily 
those in which measures have been in place for an extended period of time, usually involving 
countries  in  transition  to  market  economies,  the  circumstances  suggest  TD  measures  are 
countering large and persistent distortions in the global economy. 

Section 2.2.2

If the EU’s TD practice does not appear to act for the most part as the international trade 
analogue  of  domestic  competition  policy,  it  is  legitimate  to  ask  what  it  does  do.  The 
evaluation therefore examined the following potential roles of TDI:  

Sections 2.2.3-2.2.8

(cid:131)  as a macroeconomic buffer; 
(cid:131)  as a tool of industrial policy; 

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(cid:131)  as a retaliatory mechanism to protect domestic exporter interests; 
(cid:131)  as  the  policy  tool  of  choice  to  deliver  insurance  against  excessive  trade  pressures 

stemming from trade liberalisation; or 

(cid:131)  as protection for communities vulnerable to disruptive change stemming from trade (e.g., 
relatively  isolated  communities  heavily  dependent  on  particular  plants  for  local 
employment). 

Section 2.2.6 

Most of these motivations appear to be present, in varying degrees, in the EU’s use of TDI 
in the evaluation period. However, the most important function of TDI appears to have been 
to  safeguard  the  EU’s  economic  interests  in  the  wake  of  the  integration  of  major  emerging 
markets  such  as  China  into  the  global  economy.  The  EU,  in  liberalising  emerging  markets’ 
access to its market, has de facto retained the right to use TDI as a form of insurance policy. 
This  perspective  on  TDI  reconciles  trade  liberalisation  with  the  simultaneous  occasional 
recourse  to  protection.  The  fact  that  anti-dumping  has  been  the  main  instrument  of  this 
insurance  policy,  rather  than  the  provisions  in  the  WTO  intended  for  the  purpose 
(safeguards  and  renegotiation  of  commitments),  appears  to  reflect  weaknesses  in  the 
design  of  these  latter  instruments.  At  the  same  time,  in  a  “second  best”  sense,  it  can  be 
considered as a legitimate use of TDI. 

This systemic benefit of TDI comes with certain systemic costs. First, TDI have been shown 
to  have  a  “chilling”  effect  on  firms’  international  business  decisions,  both  as  importers  of 
intermediate inputs, as exporters and as participants in global value chains. This has negative 
impacts  on  their  longer-term  productivity  and  innovation  performance.  Second,  when  firms 
respond to TDI duties by re-arranging their global market presence, there is an implied write-
off of assets associated with the sunk costs of market entry; these costs are not measured but 
could be significant. Third, TDI may at times increase the scope for anti-competitive collusive 
practices by domestic firms. Finally, there are administrative costs of applying TDI. 

As in all public policy areas, it is important to assess whether the implementation of TDI 
achieved its objectives and whether the benefits of the instrument outweighed the costs. In the 
present evaluation, it could not be confirmed, as stated above, that TDI generally achieve the 
stated objective of restoring competitive conditions. The question then is whether TDI fulfil 
the implicit objective as suggested by the observed pattern of use: that is, whether they deliver 
the  protection  that  the  insurance  role  implies  –  i.e.,  is  trade  defence  an  effective  insurance 
policy? 

Section 2.2.8

The  level  of  protection  that  the  EU  provided  to  industry  through  TDI  in  the  evaluation 
period was moderate in international comparison. Anti-dumping duties applied by the EU in 
the  evaluation  period  ranged  from  5.4%  to  90.6%  with  a  simple  average  of  about  33%. 
Countervailing  duties  ranged  from  4.3%  to  53.1%  with  a  simple  average  of  22.7%.  This  is 
high  compared  to  the  EU’s  average  applied  most-favoured  nation  duty  in  2011  which  was 
6.4%.  However,  compared  to  duties  imposed  on  the  same  sectors  by  the  USA,  the  most 
comparable  jurisdiction  to  the  EU,  the  evaluation  shows  that  US  duties  were  three  times  as 
high as those of the EU on average. The “lesser duty rule” that the EU applies (which results 
in  duties  sufficient  only  to  offset  injury,  not  necessarily  the  full  amount  of  dumping  or 
subsidisation found) contributed to this outcome, but only moderately: the average reduction 

Section 2.3.2

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of  the  EU  duty  rates  as  a  result  of  the  lesser  duty  rule  was  about  9.3  percentage  points, 
resulting  in  duties  28%  lower  than  they  would  have  been  without  the  lesser  duty  rule.  This 
means that even without the application of the lesser duty rule EU TDI duties would have still 
been lower than US duties. 

Nonetheless, the available evidence suggests that the level of protection provided is more 
than sufficient to offset injury: 

Section 2.3.3

(cid:131) 

industries  applying  for  protection  tend  to  have  below  average  price  mark-ups  prior  to 
protection; 

(cid:131)  protection allows them to increase mark-ups; 
(cid:131) 

the  increase  in  mark-ups  more  than  compensates  for  the  under-performance  in  the  pre-
protection period compared to peer industries; and 
the higher mark-ups persist after protection is terminated. 

(cid:131) 

While trade defence thus appears to be effective in a static sense, questions have been raised 
concerning its dynamic effects. Firm-level studies suggest that firm exit rates are reduced in 
protected  industries  relative  to  comparable  unprotected  industries.  Accordingly,  protection 
slows the normal pace of renewal of the industry and the transfer of market share from low-
productivity  to  high-productivity  firms,  apparently  weakening  productivity  growth  at  the 
industry  level.  At  the  same  time,  the  evidence  suggests  that  lower-productivity  firms  invest 
and  make  structural  adjustments  to  improve  their  competitiveness  during  the  period  of 
protection.  The  evaluation  raises  a  caveat  concerning  this  finding:  the  literature  on  capital 
investment  shows  that  young  firms  investing  heavily  in  new  technology  and  still  gaining 
experience with the new technology are less profitable than older firms that are investing less 
but are extracting returns from their prior investments and experience capital. However, the 
extent to which this consideration affects the dynamic effects of TDI would require further in-
depth  analysis  based  on  firm-level  data.  Accordingly,  only  a  provisional  conclusion  is 
possible  here,  namely  that  trade  defence  measures  deployed  to  protect  industries  with 
many young firms and in which the pace of process innovation is rapid will likely have 
more positive welfare effects than TDI in other sectors.  

Section 2.3.2.2

Trade defence measures might in principle be enforced indefinitely if the conditions 
that  gave  rise  to  injury  do  not  change  (e.g.,  if  foreign  government  subsidy  policies 
remain  in  place).  However,  the  EU  extends  only  a  minority  of  measures.  52%  of  EU 
trade defence measures are revoked during the initial five-year period or expire at the 
end of it without an expiry review, and an additional 14% are terminated following the 
expiry review. Another 13% of measures are in force for between ten and 15 years and 
only 4% of measures were in place for 15 and more years. Most measures which are in 
place  for  long  periods  (more  than  ten  years)  are  in  the  chemical  sector  (fertilisers, 
organic  chemicals  and  salts).  In  terms  of  countries  affected  by  long-term  measures, 
China  and  Russia  are  over-represented.  Accordingly,  TDI  protection  in  EU  practice  is 
typically  temporary  in  nature.  This  is  important  from  a  systemic  perspective  since  the 
provision of protection implicitly comes with the likelihood of trade liberalisation in due 
course, which firms must take into account. 

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In summary, the evidence assembled in the study suggests that the protection given by EU 
TDI is on the whole effective and reasonably well calibrated, although the protection is 
moderately  greater  than  what  would  be  required  to  offset  injury,  even  with  the 
application of the lesser duty rule. 

Section 2.3.4

In a forward-looking sense, three main concerns are raised by the review. First, TDI rules 
were  developed  with  national  production  systems  rather  than  global  value  chains  in  mind. 
Effectively,  measures  are  designed  so  as  to  protect  the  last  stage  of  value  creation,  i.e.  the 
stage which gives a good its definitive character for customs valuation purposes (e.g., a tariff 
classification).  Thus,  EU  firms  that  choose  to  outsource  intermediate  stages  of  productions 
can be protected by TDI. However, EU firms that outsource the final stage of transformation 
may be targeted by TDI, even though this strategy may add more value to the EU economy. In 
the  evaluation  period,  the  complications  for  policy  posed  by  this  issue  arose  only  in  few 
instances. This reflects the fact that global value chains in which EU firms participate feature 
predominantly north-north, intra-firm trade, much of it in business services. EU TD measures, 
by  contrast,  targeted  predominantly  north-south  trade  in  goods.  However,  in  some  cases 
identified in the evaluation period, problems did arise. Moreover, in the future, growing use of 
global  production  systems  can  only  work  to  further  complicate  matters  for  TDI 
administration. 

Second,  the  study  finds  that  the  EU  TD  system  is  comparatively  slow  and  somewhat 
costly for industry to use: on average, it takes almost 2.5 years from the onset of injury to 
the implementation of measures. The cost to a complainant of participating in an investigation 
is  typically  around  EUR  200,000  but  can  be  as  high  as  EUR  1  million.  In  international 
comparison,  the  EU  system  fares  worse  in  terms  of  duration  of  investigations  (several 
peer countries take considerably less time to complete investigations) but better on costs: 
in the USA, the typical cost for a complainant may easily exceed EUR 700,000 to EUR 1.1 
million.  While  the  relatively  lengthy  process  and  the  associated  costs  serve  as  a  discipline 
against  overuse,  for  small  and  medium-sized  enterprises,  this  compounds  the  problems  of 
obtaining TDI relief where it might be warranted. 

Section 2.3.2.3 
and 4.8 

Third, the growing threat of retaliation against EU producers – mainly from emerging markets 
–  and  the  perceived  problem  of  circumvention  by  foreign  exporters  of  TD  measures,  are 
contributing to making TDI a less attractive solution for EU industry. 

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To  summarise,  in  a  larger  policy  framework,  in  which  it  is  recognised  that  trade 
liberalisation  is  facilitated  by  contingent  protection,  the  EU’s  TDI  use  in  the  evaluation 
period can be shown to be welfare enhancing. Given the importance of an open trading 
regime to domestic competitiveness, TDI can therefore be argued to be competitiveness-
enhancing. At the same time, it is not appropriately designed for the actual function it 
fulfils;  moreover,  basic  design  features  make  it  increasingly  inappropriate  for  the 
emerging world of globally fragmented production systems. 

Section 2.4

The consistency of EU TD practice with EU regulations and WTO obligations 

Over  the  evaluation  period,  there  were  35  judgments  on  EU  Court  cases  related  to  anti-
dumping  and  anti-subsidy  instruments  (i.e.  on  average  six  cases  per  year).  This  is  only  a 
fraction  of  the  number  of  TDI  court  cases  in  the  USA,  which  has  a  similar  number  of  TD 
measures in force. However, the number of cases decided per year rose more or less steadily 
over the period 2005 to 2010. Also, cases tended to become more complex and to cover more 
legal issues. Thus, the total number of main legal issues addressed in the 35 cases reviewed 
amounted to 82, i.e. an average of 2.3 per case, rising from 1.0 in 2005 to 3.1 in 2010.  

Section 3.1

The “success rate” of EU institutions in EU Court cases, i.e. the share of claims dismissed by 
the Courts, stands at 80.5% over the six-year period (66 out of 82 claims), with an increasing 
trend over time. In 2010 Court decisions, all claims were dismissed (i.e. the success rate was 
100%).  Compliance  of  the  EU  institutions  with  the  basic  Regulations  is  very  high  and  the 
interpretation of the Regulations by the Commission during investigations and determination 
of measures is usually confirmed by the Courts to be in compliance with the spirit of the law. 

As regards the compliance of EU TDI with WTO rules, since 1995 the EU has experienced 
fewer challenges than its share in global trade defence measures. Thus, while the EU imposed 
11.1%  of  all  anti-dumping  measures  over  the  period  1995-2010,  it  was  involved  as  a 
respondent  in  only  9.5%  of  WTO  disputes  on  anti-dumping.  The  corresponding  shares  for 
countervailing measures were 17.5% (EU share in measures) and 12.6% (EU share in disputes 
on  countervailing  measures).  In  the  evaluation  period,  in  the  three  cases  against  the  EU 
brought forward by China, South Korea and Norway, the EU’s success rate, as measured by 
the  share  of  rejected  claims  was  over  50%.  It  is  concluded  that,  despite  recent  findings  of 
violation  of  specific  WTO  rules  by  EU  TDI  (such  as  individual  treatment),  the  degree  of 
compliance of EU TDI law and practice with WTO rules is satisfactory. 

Section 3.2

Overall, the degree of compliance of EU TD practice with the two basic Regulations and 
WTO rules is satisfactory; the number of legal challenges (in EU Courts or at the WTO) 
is comparatively low, and the EU’s success rate is high. Accordingly, only a limited number 
of  amendments  to  the  two  basic  Regulations  that  implement  the  EU’s  TD  system  are 
recommended in response to decisions handed down by the EU Courts or by the WTO Dispute 
Settlement Body. At the same time, performance trends during the evaluation period (increased 
number of legal challenges, rising number of issues disputed, and only an average success rate in 

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WTO disputes) show that a certain degree of alertness is warranted. It is understood that the 
Commission  is  aware  of  these  trends,  and  part  of  the  objectives  of  its  internal  management 
programme  is  to  ensure  that  trade  defence  practice  is  in  line  with  the  provisions  of  the  basic 
Regulations and WTO rules. 

EU TD practice in international comparison 

The international comparison in chapter 4 provides a structured examination of international 
TD practice. This analysis focuses on a number of contentious issues bearing on the efficiency 
and  perceived  fairness  of  practice,  drawing  on  more  complete  reviews  of  the  peer  country 
systems assembled in the course of evaluation. 

Institutional  structure  of  TDI  and  the  question  of  independence  from  political  influence: 
Different countries have adopted different institutional structures to administer TDI. A central 
question  concerns  the  objectivity  of  the  system  and  whether  decisions  are  rules-based  or 
subject to political influence. Several countries (including Australia and New Zealand) rely on 
the  established  and  institutionalised  neutrality  of  their  civil  service  to  deliver  objective 
decisions  consistent  with  the  rules  and  principles  of  the  WTO  rules-based  system;  others 
(including  Canada,  South  Africa  and  the  USA)  have  established  independent  investigating 
authorities to distance TDI proceedings from overt political influence.  

Section 4.1 

In  the  EU  framework,  by  contrast,  the  investigating  authority  is  a  Directorate  within  the 
Commission,  and  definitive  decisions  are  taken  by  a  political  body  (the  Council). 
Notwithstanding  the  direct  involvement  of  political  bodies  in  the  EU’s  decision-making 
process,  there  is  only  anecdotal  evidence  in  the  context  of  particularly  contentious  cases 
regarding  politicisation  of  decisions;  the  evaluation  team  could  find  no  systematic  evidence 
for such interference. In terms of decisions rendered, the EU TD system does not appear to 
be  more  politicised  than  that  of  most  peer  countries,  an  interpretation  supported  by  the 
degree to which decisions have withstood legal challenge. 

The  implications  of  globalisation  of  production  for  the  ability  to  benefit  from  TDI 
protection:  The  emergence  of  global  value  chains  calls  into  question  the  established 
understanding  of  what  constitutes  the  “domestic  industry”  under  TD  practice.  With  inward 
and outward FDI, and various business outsourcing and offshoring strategies, a divergence in 
interests within the domestic industry can emerge, depending on the business strategy chosen 
by  different  firms,  thus  making  it  more  difficult  to  meet  standing  requirements  for  the 
initiation of investigations. As well, a divergence between the interests of mobile capital and 
immobile  labour  emerges  which  raises  the  question  of  whether  TDI  will  be  effective  in 
protecting domestic value-added in the emerging global framework.  

Section 4.2 and 4.3

In this context, the question has emerged for the EU of whether labour unions should have the 
right to bring cases and/or whether the Commission should initiate cases ex officio. 

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International practice varies in both regards. Australia and the USA provide for labour union-
initiated complaints; New Zealand and South Africa do as well, but only in cooperation with 
industry; the EU, along with Canada, China and India do not allow such proceedings. Clearly, 
given  the  importance  of  confidential  business  information  to  investigations,  such  an 
innovation  would  have  far-reaching  procedural  implications,  including  the  possible  need  to 
impose  obligations  on  industry  to  cooperate,  a  power  which  the  Commission  does  not 
presently have. Nonetheless,  although it is not a panacea for all of the  situations mentioned 
where  domestic  producers  might  refrain  from  submitting  or  supporting  a  complaint,  it  is 
recommended  that  the  right  to  submit  complaints  and  have  standing  be  extended  to  labour 
representatives.  Regarding  conflicts  between  employees  and  management  of  domestic 
producers, guidance could be taken from US rules. 

The  main  alternative  is  for  the  TDI  authorities  to  step  in  with  ex  officio  investigations, 
particularly in respect of subsidies, given that subsidy investigations directly target a foreign 
government’s policies and firms might be reticent to take such steps because of the possibility 
of retaliation or pressure on their business interests in that country. Most peer countries (New 
Zealand being the exception) provide for ex officio investigations but seldom use it. The EU 
system also provides for this option but the authorities have not made use of in the past 
except for reviews; the Commission has indicated that it is willing to consider ex officio 
cases  against  subsidies  in  some  cases.  The  evaluation  team  recommends  that  the  EU 
continue to use ex officio initiations of new investigations only in special circumstances where 
the business interests of some EU firms in the country of export might militate against their 
joining a specific complaint and thus compromise the ability of the industry to gain standing 
for a complaint. 

Transparency and confidentiality: WTO rules require that non-confidential information be 
made available to interested parties but allow members the discretion of whether to provide 
access  to  confidential  information  and  the  design  of  the  system  of  controls  regarding  such 
access.  Countries  have  used  the  policy  space  afforded  by  WTO  rules  to  develop  different 
systems  with  differing  implications  for  cost  and  transparency.  The  USA  through  its 
Administrative Protective Order (APO) system, and Canada through individual confidentiality 
agreements, provide legal counsel for the parties access on a controlled basis, with sanctions 
for  unauthorised  disclosure.  Other  peer  countries  and  the  EU  do  not  allow  access  to 
confidential information, although the EU does provide access to confidential information to 
the courts. 

Section 4.4

The evaluation team notes that an alternative to an APO system such as the one in the USA is 
to  provide  for  the  possibility  of  having  the  Hearing  Officer  check,  upon  request  by 
interested parties, that confidential information has been taken into account correctly by 
the Commission in the investigations. This option has in fact already been selected by the 
Commission and awaits full implementation. The introduction of a system to provide access 
to  confidential  information  (such  as  the  APO  system)  is  therefore  not  recommended  at  this 
stage.  However,  it  is  recommended  that  a  review  be  undertaken  once  some  experience  has 
been  gained  with  the  Hearing  Officer’s  role  of  verifying  that  confidential  information  has 
been duly considered in an investigation. 

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Section 4.5

Treatment  of  non-market  economies  (NMEs):  Although  the  WTO  Anti-dumping 
Agreement does not specifically refer to NMEs, in the case of a country which has a complete 
or substantially complete monopoly of its trade and where all domestic prices are fixed by the 
State, or in which a “particular market situation” exists, WTO rules provide for TD authorities 
to  determine  normal  value  on  a  basis  other  than  the  normal  domestic  selling  prices  in  the 
exporting  country.  Significant  trading  countries  for  which  NME  status  is  an  issue 
internationally  include  China,  Vietnam,  Russia,  the  Ukraine  and  other  former  Soviet 
Republics (notably, the EU treats Russia and the Ukraine as market economies whereas some 
of  the  peer  countries  do  not).  However,  international  practice  varies  in  terms  of  how  the 
latitude for NME status is used, ranging from the absence of the concept of NME (in China), a 
case-by-case assessment (most peer countries), to fixed  lists of NMEs (India, USA, and  the 
EU). Likewise, the modalities for a country being granted market economy status (MES) or 
market economy treatment (MET) for exporters from NMEs vary considerably. 

In  the  EU,  NME  countries  are  listed  in  the  ADR.  By  contrast,  in  some  peer  countries,  the 
determination  of  whether  non-market  conditions  exist  is  determined  by  the  administrative 
authorities  on  the  basis  of  the  factual  context  of  the  industry  and  country  concerned.  The 
establishment  of  MES  by  the  EU tends  inherently  to  be  a  long  process  and  so  far  has  been 
completed only by two countries. Regarding the treatment of NMEs at the country level, the 
EU system provides less flexibility than others that are presently in use. On the other hand, 
requests  for  MET,  which  is  treated  on  an  enterprise  level  (rather  than  on  a  sector/industry 
level as in Canada or the USA), are frequent.  

Changes in TD practice will be required with the expiry of China’s NME status in 2016, and 
Vietnam’s  in  2019.  Moreover,  recent  WTO  DSB  decisions  will  require  EU  practice 
regarding  Individual  Treatment  to  be  changed  or  abolished.  The  practices  of  Australia, 
which has granted China market economy status and utilises the “particular market situation” 
provisions  to  address  cases  where  domestic  Chinese  prices  may  be  distorted,  and  Canada, 
which  applies  market  treatment  as  the  default  but  has  used  the  latitude  in  its  system  to 
successfully  apply  non-market  treatment  where  warranted,  are  worth  examining  as  the  EU 
considers its next steps. 

Section 4.6

Lesser  duty  rule:  The  WTO  rules  urge  countries  to  consider  applying  lesser  duties  than 
those indicated by the dumping or subsidy margin, if that would suffice to eliminate injury. 
The  method  of  calculation  of  an  injury  margin  is  not  however  specified.  Practice 
internationally  varies  and  no  approach  grounded  in  economic  theory  has  so  far  been 
developed.  Practice  in  Australia  and  New  Zealand  is  most  comparable  to  that  in  the  EU, 
which applies the lesser duty rule in each case. Both countries apply a “non-injurious price”, 
although  different  calculation  methods  are  used.  The  concept  of  the  non-injurious  price  is 
based on levelling import prices with what domestic industry prices would be in the absence 
of dumping or subsidisation (i.e., a price that the domestic industry could have charged absent 
the price suppression caused by dumping or subsidisation, and thus sometimes referred to as 
an  “unsuppressed  selling  price”  or  a  “pre-injury  price”).  The  USA  does  not  apply  lesser 
duties, while Canada only rarely does pursuant to a public interest test and with no established 
methodology.  In  none  of  the  countries  reviewed  is  the  effect  of  the  lesser  duty  rule  on  the 
number of measures affected and the reduction in the level of measures comparable to the EU. 

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In  view  of  the  findings  in  the  economic  evaluation  part,  the  EU  approach  is  considered 
preferable to that practiced in the peer countries. 

Public  Interest  test:  WTO  rules  require  that  countries  provide  opportunities  for  parties 
adversely affected by duties (industrial users or consumer organisations) to be heard, and urge 
countries to make the imposition of duties voluntary, rather than mandatory. However, there 
is otherwise no detailed provision for a public interest test. International practice varies. The 
USA has no provision for a public interest test. Australia, New Zealand and South Africa have 
no  formal  provisions  but  the  Minister  responsible  for  TDI  can  exercise  discretion  as  to 
whether  to  apply  duties  or  not.  India  and  China  mention  public  interest  in  their  legislative 
framework but no evidence of application was found. Only Canada among the peer countries 
has provisions for a public interest inquiry and case history of use. However, whereas the EU 
applies  the  test  in  every  case,  Canada  rarely  does  and  only  in  a  separate  procedure  after 
measures have been imposed. EU practice thus clearly stands out. 

Section 4.7

As  regards  its  impact,  although  the  number  of  cases  terminated  based  on  public  interest 
considerations is limited, a more comprehensive assessment suggests that the role of the test 
in  the  EU’s  TD  system  should  not  be  underestimated.  At  the  same  time,  the  EU’s 
methodology remains underdeveloped, opening up the test to criticisms of discretionary 
application and limiting the predictability of the system.  

The  WTO  Agreements  provide  both  for  the  prospective  and  retrospective  collection  of 
anti-dumping  or  countervailing  duties.  In  a  prospective  system,  the  level  of  the  duty  is 
determined  during  the  investigations  then  applied  at  this  level  for  the  duration  of  its 
application, unless reviewed at an earlier stage. Conversely, under a retrospective system, the 
duty rate established in investigations is for deposit purposes only; the final level of duties due 
is determined only after products have been imported, and then based on the actual level of 
dumping or subsidisation. Moreover, duties can be applied on an ad valorem basis, as specific 
duties,  or  based  on  reference  prices  (which  involves  applying  duties  equal  to  the  difference 
between the amount at which imports are priced and the reference price indicated). Based on 
the analysis of peer country experience, reference price based systems are used often; as well, 
there is a tendency towards greater use of ad valorem duties (see, for example, Australia and 
New Zealand). 

Sections 4.9 and 
4.10 

The  various  approaches  to  applying  duties  have  their  advantages  and  disadvantages.  In 
principle, the retrospective method is more accurate as parties only definitively pay whatever 
duties were in fact due, i.e. if the export price increases subsequent to the imposition of duties 
lower  duties  will  be  collected,  while  higher  duties  will  be  collected  if  the  export  prices 
decreases subsequent to the imposition of the duties. This negates the requirement for refund 
proceedings  and  also  negates  the  possibility  of  absorption  of  the  duty.  However,  since  the 
definitive  level  of  a  duty  collected  retrospectively  can  only  be  determined  after  the 
importation has already taken place (and, in most instances, after the imported products have 
been sold) and as the importer has no control over domestic price movements in the exporting 
country,  this  adds  uncertainty  to  the  market,  which  may  have  a  dampening  effect  on  trade. 
Prospective reference price systems induce exporters to raise their price to avoid duties, which 
also  means  that  the  economic  benefits  to  the  importing  country  from  TDI  are  reduced. 

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Meanwhile, prospective ad valorem duty systems, such as the one used in the EU, are simpler 
to administer but have a built-in bias against fair exporters (the higher the price charged, the 
higher  will  be  the  duty).  One  way  for  exporters  to  remedy  this  is  by  requesting  a  partial 
interim review of their dumping. This has been done in a number of cases during the review 
period. However, it is contingent upon the finding of a lasting nature of the alleged changes 
and  only  has  an  effect  on  future  duties,  while  not  addressing  past  duty  payments.  For  this, 
refunds are the only option. 

Complex  systems  such  as  the  retrospective  system  used  by  the  USA  or  the  prospective 
reference price systems applied by Canada and Australia would be difficult to implement in 
the EU, given that 27 different customs authorities would need to apply these measures in the 
same way. In view of these considerations, and given that no system is clearly superior in all 
respects, the EU need not consider a change in its duty collection system.  

The  WTO  Agreements  provide  that  trade  defence  measures  may  only  remain  in  place  to 
the  extent  and  for  the  duration  required  to  counter  the  injurious  effects  of  dumping  and 
subsidised  exports.  No  duty  may  remain  in  place  for  a  period  of  more  than  five  years  from 
imposition or the last substantive review thereof. The two agreements provide for a variety of 
reviews, including expiry reviews, interim reviews and new exporter reviews.  

Section 4.11

The  comparative  review  shows  that  there  are  few  differences  in  the  policies  on  reviews 
among  peer  countries.  Apart  from  the  relatively  long  duration  of  reviews,  the  use  of  and 
methodology  for  reviews  in  the  EU  is  in  line  with  international  practice.  Regarding  the 
duration  of  measures,  EU  TD  measures  have  a  low  degree  of  institutionalisation,  with 
long-standing measures being concentrated in few sectors. The EU policy on the duration 
of measures can thus be considered good international practice. One area where a change in 
practice  could  be  warranted  is  the  limited  use  of  (full)  interim  reviews.  The  relatively  high 
degree of measures expiring automatically without an expiry review is an indication that such 
measures have actually been in force longer than necessary. At the same time, the practice in 
peer countries in this regard is not significantly different from the EU practice. 

The  effectiveness  of  anti-dumping  or  countervailing  measures  may  be  jeopardised  by 
various practices aimed at circumventing them in order to avoid payment of duties. Although 
the  evaluation  team  found  no  evidence  that  there  has  been  a  systematic  increase  in 
circumvention, the issue has received increasing attention from policymakers internationally. 
However, only a minority of countries – among the peer countries, only South Africa and the 
USA  –  has  designed  special  anti-circumvention  instruments. The  EU’s  anti-circumvention 
instrument is comparatively well developed and counters circumvention to a certain extent.  

Section 4.12

Anti-absorption  tools  are  even  less  common  internationally.  In  the  EU,  anti-absorption 
reinvestigations  aim  at  providing  an  early,  “accelerated”  and  simplified  alternative  to  an 
interim review of the level of dumping or subsidisation. However, their practical importance 
is  negligible  –  in  only  one  case  in  the  evaluation  period  (of  three  anti-absorption 
reinvestigations undertaken) have measures been revised upwards. 

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Recommendations 

Based on the analysis, the evaluation team has proposed a number of recommendations. These 
are  grouped  into  three  categories:  those  that  concern  issues  which  require  multilateral 
attention; those that concern the EU’s policy regarding the use of TDI; and those that address 
narrower issues regarding the framing of the two basic Regulations or specific administrative 
practices in implementing them. 

Recommendations concerning issues to be dealt with at the multilateral level 
The  evaluation  team  reached  major  conclusions  in  respect  of  the  rationale  for  and  the 
relevance  of  TDI.  These  conclusions  relate  to  the  nature  of  TDI  and  not  to  their 
implementation  by  the  EU.  As  a  result,  most  recommendations  following  from  these 
conclusions  would  not  have  to  be  addressed  by  the  EU  (or  any  other  WTO  member) 
unilaterally  but  in  the  context  of  multilateral  discussions  and  approaches,  as  unilateral 
approaches  might  introduce  distortions  into  the  international  trading  system  and  lead  to 
unintended  negative  consequences.  The  evaluation  team  is  aware  of  the  fact  that  the 
likelihood of a multilateral agreement on these issues (or even an agreement about the need to 
discuss these issues) is limited; nevertheless such discussion is considered desirable in order 
to ensure that TDI remain a relevant trade policy instrument in the medium and longer term. 

Section 6.2.1 

The issues identified for such a multilateral approach include: 

(cid:131)  The  de  facto  role  of  the  AD  instrument  in  particular  as  a  substitute  for  grey  area 
measures and safeguards: The main benefits that can be attributed to TDI as practiced 
have been ascribed in the present evaluation report to its stand-in role for deficient trade 
liberalisation insurance instruments, i.e. the majority of TD measures do not protect  EU 
producers against unfair trade practices but rather against import surges. It is important to 
recognise  in  this  context  that  the  Uruguay  Round  reforms,  which  abolished  informal 
diplomatic  tools  to  manage  the  kind  of  pressures  posed  by  the  integration  of  major 
emerging markets into the global division of labour, failed to replace them with effective 
formal tools. An improved safeguards instrument (or a new instrument) would be required 
which, given the analysis here, should be framed in insurance terms with no connotation 
of “unfairness” concerning the disruptive changes caused by trade liberalisation. 

(cid:131)  The  treatment  of  NME  countries:  Differences  in  treatment  of  NMEs  across  WTO 
members’ AD systems introduce inconsistencies in the international trading system which 
should  be  avoided.  A  harmonisation  of  NME  concepts  at  the  multilateral  level  would 
therefore be desirable. Conceptual changes are likely to be required not least in response 
to the changes in status of China and Vietnam, the two major economies with significant 
NME  characteristics,  in  2016  and  2019,  respectively.  In  this  context,  the  evaluation 
showed that flexible systems that do not rely on lists of countries established by regulation 
have  not  apparently  impaired  the  application  of  NME  status  to  countries/sectors  where 
such treatment is warranted. These considerations suggest that a flexible system of NME 
treatment  such  as  practiced  in  some  peer  countries  could  be  more  appropriate  than  the 
current system applied by the EU, in particular with regard to the lists of NMEs and the 
granting of country-wide MES. The practices of Australia, which has granted China MES 
and utilises the “particular market situation” provisions to address cases where domestic 

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Chinese  prices  may  be  distorted,  and  Canada,  which  applies  market  treatment  as  the 
default but has used the latitude in its system to successfully apply non-market treatment 
where warranted, are worth examining as the EU considers its next steps. 

(cid:131)  The application and calculation of lesser duties: Current international practice regarding 
the  application  of  the  lesser  duty  rule  varies  and  is  largely  not  grounded  in  economic 
theory. As mentioned, the EU’s consistent application of the lesser duty rule is however 
consonant with an understanding of TDI as a remedial instrument, and must therefore be 
considered best international practice. Still, the evidence adduced in this evaluation report 
concerning  the  higher  profitability  of  EU  firms  in  protected  sectors  than  in  comparable 
non-protected  sectors  indicates  a  trade  deterrent  effect  of  TDI  that  is  stronger  than 
required  to  simply  offset  injury,  even  with  the  application  of  lesser  duties  as  presently 
calculated.  Given  the  high  proportion  of  cases  which  target  industrial  inputs,  the  further 
implication  is  that,  even  with  the  lesser  duty  rule,  the  costs  imposed  on  downstream 
industries, including firms participating in global value chains, are greater than necessary. 
Based  on  these  findings  it  would  be  desirable  if  the  WTO  members,  first,  made  the 
application  of  the  lesser  duty  rule  compulsory  internationally  and,  second,  agreed  on 
certain minimum standards for the calculation of lesser duties. 

(cid:131)  The  alignment  of  TDI  with  patterns  of  trade  in  global  value  chains:  trade  defence 
measures at present systematically favour domestic firms that outsource their intermediate 
inputs  over  firms  that  outsource  the  final  stage  of  manufacturing,  without  regard  to  the 
domestic  value-added  in  the  two  business  strategies.  In  other  words,  trade  defence 
measures  are  designed  to  protect  the  last  stage  of  value  creation,  not  the  domestic 
contribution to the overall value of the good. Goods are increasingly “made in the world”, 
but TDI has no metrics at the moment to address this. While in the EU the public interest 
test  provides  the  necessary  flexibility  to  address  value  chain  issues,  a  better  –  and 
internationally shared – conceptual integration of global value chain issues in TDI would 
be desirable. 

(cid:131)  Reflecting heterogeneous firm theory and empirics in TDI rules: When the WTO rules 
for  TDI  were  developed  the  economics  profession  worked  in  terms  of  a  “representative 
firm”  model  –  in  theory,  industries  were  assumed  to  be  homogenous  in  technology  and 
thus in costs. Modern heterogeneous firm theory and empirics show that firms are highly 
skewed in terms of all performance factors. This is one area where trade defence practices 
have not kept up with the empirical evidence on firms in international trade. For example, 
the  practice,  in  cases  where  sampling  is  used,  of  selecting  the  largest  firms  of  the 
population, may distort the investigation findings if the characteristics of large firms are 
different from SMEs. While the economic impacts of trade defence measures have been 
addressed in a growing number of studies using firm-level data, a systematic assessment 
of  the  implications  of  firm  heterogeneity  for  TDI  rules  and  procedures  (e.g.,  sampling 
methodologies),  has  not,  to  the  knowledge  of  the  evaluation  team,  been  done.  This  is  a 
major undertaking that should be done at the multilateral level. 

(cid:131)  Finally,  policy  coherence  between  industrial  policy  and  trade  defence:  Economic 
theory indicates that, if subsidies are structured to address local market failures, they are 

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not market distorting. However, in current TD practice, all direct countervailable subsidies 
are  assumed  to  pass-through  entirely  to  export prices  and  thus  to  distort  markets.  Given 
the  widespread  reconsideration  of  industrial  policies  to  address  market  failures  and 
economic development needs, there is potential for increased frictions with trade defence. 
One  way  to  establish  the  basis  for  policy  coherence  between  industrial  policy  and  trade 
defence  would  be  to  introduce  a  pass-through  analysis  into  subsidy  investigations.  This 
step would introduce greater internal consistency of WTO rules while also providing for 
more discriminating application of TDI. 

Recommendations concerning EU policy choices 
An  officially-accepted intervention  logic  for  the  EU’s  use  of  AD  and  AS  instruments  does 
not currently exist. However, in communications materials, TDI is justified by the absence of 
a  competition  policy  regime  in  the  multilateral  trading  system  and  the  divergence  of 
conditions under which international trade takes place from the conditions prevailing in intra-
EU  commerce,  where  the  “four  freedoms”  are  ensured  by  the  EU  economic  regulatory 
framework.  The  mission  statement  sets  the  overall objective for TDI  policy to contribute to 
the competitiveness of EU industry and to the welfare of EU consumers. 

Section 6.2.2

Recommendation 1 

In order to provide better guidance for the implementation of EU TDI and 
in order to facilitate future evaluation of TDI, it is recommended that DG 
Trade’s  mission  statement  be  complemented  by  an  officially  accepted 
intervention logic.  

See report section(s) 

1.4.1 Development of 
intervention logic 

The report also presents ideas (in section Error! Reference source not found.) which could 
serve as an input for the development of such intervention logic. 

Initiation  of 
investigations  and  treatment  of  non-cooperation:  Global  economic 
developments  in  recent  years  have  raised  doubts  that  current  rules  for  and  practice  of  the 
initiation  of  proceedings  continue  to  be  effective.  In  particular,  the  emergence  of  global 
production  patterns  has  resulted  in  differences  of  interests  among  domestic  producers, 
depending  on  the  business  strategy  chosen.  A  similar  divergence  of  interests  regarding 
dumped or subsidised imports may occur in the relationship between EU producers and their 
employees.  Finally,  increasing  international  exposure  makes  EU  firms  susceptible  to 
retaliation  and  threats  thereof.  In  the  view  of  the  evaluation  team,  reforms  are  required  to 
ensure continued effective access to TD for EU industry where it is warranted. 

Recommendation 2 

It  is  recommended  that  the  Commission  use  its  capacity  to  initiate  new 
investigations ex officio in circumstances where the business interests of 
some EU firms in the country of export might militate against their joining 
a  specific  complaint  and  thus  compromise  the  ability  of  the  industry  to 
gain standing for a complaint. Examples of such circumstances include: 

(cid:131)  There  is  a  history  of  firms  requesting  anonymity  in  respect  of  TDI 

See report section(s) 

4.2 Policy choices 
regarding the initiation of 
proceedings 

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actions in respect of the country concerned. 

(cid:131)  There  is  prima  facie  evidence  of  tit-for-tat  retaliatory  behaviour  by 
the  country  concerned  (e.g.,  a  pattern  of  launching  of  reciprocal 
investigations  immediately  following  decisions  to  apply  measures 
against  that  country  either  in  the  same  product  group  or  on  an 
equivalent amount of exports). 

(cid:131)  The producer has significant investments in the country concerned or 

exports a significant portion of its production to that country. 

(cid:131)  The  structure  of  the  industry  and  circumstances  of  the  case  do  not 
allow  the  retaliation  threat  to  be  addressed  by  maintaining  the 
identity of the complainant confidential, an approach the Commission 
has successfully used in the past. 

It  is  also  recommended  that  the  right  to  submit  complaints,  and  have 
standing,  be extended  to  labour  representatives,  in order  to  ensure  that 
access to TDI is also guaranteed in situations where interests between EU 
producers  and  their  interests  diverge  (notably  in  situations  of  fear  of 
retaliation). 

A  logical  consequence  of  recommending  that  labour  submit  complaints  is  that  options  for 
compelling  interested  parties  to  cooperate  need  to  be  considered.  Furthermore,  obligatory 
cooperation  in  investigations  would  also  enable  EU  companies  to  better  handle  pressure 
which  may  be  exerted  by  allegedly  dumping  exporters  or  subsidising  governments.  At  the 
same time, ensuring that interested parties (both those based in the EU and exporters) provide 
accurate information is important. 

Recommendation 3 

In  order  to  ensure  that  investigations  initiated  in  line  with  the  previous 
recommendations  can  be  based  on  sufficiently  detailed  and  accurate 
information,  it  is  recommended  that  DG  Trade  be  provided  with 
instruments  to  ensure  the  cooperation  of  interested  parties  (both  those 
based  in  the  EU  and  exporters)  in  TD  investigations.  These  instruments 
should  be  comparable  to  those  which  DG  Competition  has  as  part  of  its 
investigating  powers.  In  this  regard,  sanctioning  mechanisms  (such  as 
fines) for the provision of false information should also be introduced. 

See report section(s) 

4.3 Obligation to 
cooperate 

5.2.2.2  Investigation 
instruments 

Changes in the Union interest test: The growing complexity of the trading environment due 
to fragmentation of production across borders raises new challenges for applying TDI. In the 
longer  run,  these  changes  may  necessitate  fundamental  reforms  to  TD  practice  at  the 
multilateral level, as outlined above. For the immediate future, the EU is well positioned to 
address these issues due to the routine application of the Union interest test. 

Recommendation 4 

See report section(s) 

The  evaluation  team  recommends  that  the  Commission  take  into 
consideration  out-sourcing  strategies  (domestic  and  international)  of 

2.1.3.4 Systemic Effects: 
TDI and Fragmented 

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businesses in its public interest evaluations. In the first instance, following 
past  practice,  the  Commission  could  request  documentation  of  EU  value 
added from complainants and from exporters. 

Production Systems 

6.1.1.7 Competitiveness 
impacts on the EU 
economy in the 
evaluation period 

5.1.6.3  Methods applied 
in determining the Union 
interest 

It  is  also  recommended  that,  in  addition  to  the  assessment  of  potential 
effects of measures as currently undertaken, the following considerations 
be applied in evaluating the Union interest in any individual case: 

(cid:131)  Where the Union industry’s market share is low, the welfare impacts 

of TDI are likely to be negative. 

(cid:131)  Where  concentrated  impacts  on  particular  communities  can  be 
expected  from  not  applying  TDI,  the  welfare  case  for  TDI  is 
strengthened. 

(cid:131)  Where  the  goods  in  question  are  intermediate  products  used  by 
downstream industries, the larger the share of production costs, the 
greater  the  likelihood  that  TDI  could  have  adverse  effects  on  EU 
industry as a whole. 

(cid:131)  Conversely,  where  the  inputs  for  the  like  products  produced  by  the 
Union industry constitute a large share of the EU upstream industries’ 
output, the welfare case for TDI is strengthened. 

(cid:131)  The  Commission  could  also  consider  excluding  those  products  which 
are not produced by the EU industry from the product definition. 

Furthermore, the role of interested parties should be clarified: in line with 
the practice in other parts of the investigations, their main role should be 
to  provide  information  and  comment  on  the  Commission’s  findings,  but 
the  actual  analysis  of  public  interest  should  be  reserved  for  the 
Commission. In consequence, this would require collection of information 
on  Union  interest  issues  (e.g.  through  questionnaires)  at  the  same  time 
as information for the dumping/ subsidisation and injury analysis. Basing 
the  Union  interest  test  on  representative  information  would  help  the 
Commission to arrive at more robust findings. 

While these suggested changes are likely to enhance the robustness and 
validity  of  the  Union  interest  test  findings,  they  would  also  require 
additional resources. 

Shortening  the  process  for  provisional  determinations:  Although  substantially  reducing 
the overall duration of EU trade defence investigations seems infeasible given the procedural 
requirements of the EU system, a realistic option, in the view of the evaluation team, would 
be for the Commission to focus on threat determination in the initial phase of its investigation 
and impose provisional measures earlier. Emphasis also needs to be placed on existing WTO 
rules that provide for short-term responses in cases of “massive importation” in the form of 
retroactive provisional duties. 

Recommendation 5 

See report section(s) 

It  is  recommended  that  the  Commission  address  stakeholders’  concerns 
regarding  the  length  of  the  period  until  protection  is  granted  by 
shortening the investigation up to the imposition of provisional measures, 

2.3.2.3 Timeliness of 
measures 

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including by taking decisions on provisional duties prior to verifications.  

The  evaluation  team  recognises  that  this  would  be  contingent  on  the 
ability to impose disciplines (including the use of sanctions) to ensure full 
and accurate reporting by interested parties (including exporters) prior to 
verification  processes  (see  recommendation  3  above).  It  is  also  noted 
that  an  earlier  imposition  of  provisional  measures  would  reduce  the 
overall  duration  of an  investigation  due  to  the  limited  time  during  which 
provisional  measures  may 
this 
remain 
recommendation  may  require  additional  resources  which  allow  speedier 
investigations. 

in  place.  Accordingly, 

4.8 Duration of 
Investigations and Use of 
Provisional Measures 

5.2.2.1  Duration of 
investigations 

Provision  of  access  to  confidential  information:  The  evaluation  team  has  concluded  that 
further improvement in the transparency of proceedings is recommendable, with the provision 
of access to confidential information being a key element. The EU approach of appointing a 
Hearing  Officer  is  one  that  addresses  transparency  concerns  without  raising  the  cost  of 
accessing  the  TD  system  for  EU  industry,  especially  small  and  medium-sized  firms.  At  the 
same time, the team recognises that the full possibilities of the Hearing Officer model that has 
only recently been introduced by the EU have not yet been fully explored. 

Recommendation 6 

The evaluation team recommends that the Commission actively promote 
the  role  of  the  Hearing  Officer  within  the  stakeholder  community  to 
ensure  that  the  potential  effectiveness  of  the  model  is  demonstrated  in 
practice.  The  introduction  of  a  system  to  provide  access  to  confidential 
information 
is 
recommended  that  a  review  be  undertaken  once  some  experience  has 
been  gained  with  the  Hearing  Officer’s  role  of  verifying  that  confidential 
information has been duly considered in an investigation. 

is  not  recommended  at  this  stage.  However, 

it 

See report section(s) 

4.4 Transparency and 
confidentiality 

5.2.3 Transparency and 
Confidentiality of 
Proceedings 

Duration of measures and dynamic impacts of TDI: Given the highly particular nature of 
TD cases, there can be no objective foundation for generalisations concerning the appropriate 
duration  of  measures.  EU  performance  in  terms  of  limiting  the  length  of  term  of  measures 
stands  up  well  in  international  comparison.  Nevertheless,  two  modest  policy  adjustments 
could  ensure  further  that  the  duration  of  measures  corresponds  to  the  practice  addressed; 
thereby  strengthening  incentives  for  firms  in  protected  sectors  to  prepare  for  the  trade 
liberalisation  implied  by  the  expiry  of  TDI,  rather  than  counting  on  the  extension  of 
protection. 

Recommendation 7 

It  is  recommended  that  the  Commission  reduce  the  threshold  for prima 
regarding 
changed 
facie 
dumping/subsidisation  or  injury  to  be  submitted  in  requests  for  interim 
reviews by interested parties. 

circumstances 

evidence 

for 

See report section(s) 

2.3.2.2  Duration of 
measures 

4.11 Policy of Reviews 

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In  expiry  reviews,  the  Commission  could  raise  the  threshold  level  for  a 
positive  finding  of  likelihood  of  recurrence  of  dumping/subsidisation  or 
injury that must be demonstrated to warrant extension of measures. Also, 
it  could  be  envisaged  to  extend  measures,  given  a  positive  finding  of 
continuation  or  likelihood  of  recurrence  of  dumping/subsidisation  and 
injury,  by  five  years  as  a  general  rule  (except  for  Union  interest 
considerations)  and  balance  this  with  a  more  active  use  of  (full)  interim 
reviews. 

and the Duration of 
Measures 

5.3 Review mechanisms 
and procedures 

Other recommendations 
Based  on  the  detailed  evaluation  of  the  EU’s  implementation  of  TDI,  a  number  of 
recommendations  regarding  certain  specific  substantive  and  procedural  issues  are 
made.  Also  based  on  analysis  of  EU  court  judgments  and  WTO  rulings,  the  present 
evaluation  concludes  that  a  number  of  specific  amendments  to  one  or  both  of  the  two 
basic  Regulations  are  warranted.  Last  but  not  least,  the  evaluation  team  noted  that  the 
Commission  is  already  in  the  process  of  change  with  regard  to  a  number  of  issues  also 
addressed in this report. The last group of recommendations reinforces these processes of 
change. 

Conclusion 

Section 6.2.3 

Section 6.2.4 

Section 6.2.5 

The evaluation conducted in this report of the European Union’s policy and practice in respect 
of TDI, namely anti-dumping and countervailing measures, took place against a background 
of: 

(cid:131)  Divided views among Member States as to the efficacy of the instruments. 
(cid:131)  An assessment by practitioners that the instruments were procedurally burdensome to use.  
(cid:131)  Virtually unbridled hostility towards the use of TDI in the professional literature. 
(cid:131)  And a growing sense in the policy community that the instruments were out of step with 

the times as the global organisation of production evolved. 

In  short,  the  prevailing  perspective  on  TDI  that  confronted  the  evaluation  team  may  be 
summarised  as  follows.  On  the  one  hand,  it  is  seen  by  some  as  a  costly,  cumbersome,  and 
possibly  counterproductive  instrument  constructed  for  a  system  of  nation-based  production 
that has been in good measure superseded by one in which goods are “made in the world”. On 
the other hand, it is seen by others as an indispensable tool to ensure a level playing field for 
EU  firms  by  addressing  unfair  pricing  by  foreign  firms  and  market-distorting  subsidies  by 
foreign  governments  in  the  context  of  an  incomplete  system  of  market  regulation  and 
disciplines in the international domain. 

The  evaluation  identified  a  number  of  considerations  that  greatly  mitigate  the  perceived 
negative  economic  effects  of  TDI,  and  indeed,  depending  on  what  function  TDI  are 
understood to serve, that suggest a positive welfare impact. However, it also confirmed that 
TDI,  as  established  under  current  WTO  rules,  are  not  designed  to  function  effectively  in  a 
world  of  domestically  and  globally fragmented production chains  or  webs.  This  emphasises 
the  importance  of  the  EU’s  regular  application  of  the  public  interest  which  leaves  it  better 
placed than the other countries reviewed in terms of having established procedures to address 

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the emerging issues flexibly. The review of EU practice shows a high degree of compliance 
with EU law and WTO obligations and validated most of the methodologies and procedures 
applied by the Commission, while also highlighting certain areas where EU TD practice may 
benefit  from  drawing  on  peer  countries’  experience.  In  conclusion,  the  evaluation  team 
considers  that  the  EU’s  application  of  TDI  as  framed  under  the  two  WTO  Agreements 
constitutes good practice in many respects. The purpose of the recommendations which have 
been made throughout this report, the main ones of which are summarised above, is to further 
strengthen and improve an already good system. 

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Summary of contributions to the European Commission's public 
consultation on "Initiative on Modernisation of trade Defence Instruments" 

ANNEX 5 

1. 

INTRODUCTION 

While  the  economic  environment  has  changed  significantly  over  the  last  decade  and  keeps 
changing  continuously,  the  rules  of  the  European  Union's  trade  defence  instruments  (TDI)  have 
remained largely unchanged for more than 15 years. Trade defence instruments are often the only 
means that companies have in order to react to unfair international trading practices. At the same 
time, the application of trade defence instruments can have an impact on users and consumers. In 
October  2011,  taking  into  account  the  difficult  economic  environment  that  companies  face,  the 
EU Trade Commissioner Karel De Gucht launched a review to examine in a transparent, balanced 
and constructive way how to modernise the EU's trade defence instruments.   

In this context, the European Commission launched a broad public consultation to gather views 
from  interested  stakeholders  regarding  the  future  of  the  EU's  Trade  Defence  Instruments.  
Respondents  provided  the  European  Commission  with  information,  suggestions  and  opinions 
regarding the current use of the TDI instruments and the future of these instruments.  

2. 

THE PUBLIC CONSULTATION AND THE QUESTIONNAIRE 

The public consultation ran from 3 April to 3 July 2012.   

An  on-line  questionnaire  was  open  to  all  stakeholders  interested.  The  questionnaire  had  31 
questions  covering  six  main  topics:  increased  transparency  and  predictability,  fight  against 
retaliation,  effectiveness  and  enforcement,  facilitate  cooperation,  optimizing  review  practice 
and  codification.      Stakeholders  were  also  invited  to  offer  suggestions  regarding  any  other 
aspects  of  the  EU's  rules  or  practice  in  the  area  of  TDI  which  they  considered  should  be 
updated.   

There  were  310  replies  received  from  a  wide  range  of  respondents.    Nearly  one  third  of 
respondents requested that their replies are treated confidentially.    

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Importers and 
trade 
associations 
representing 
Union 
producers
10%

Others
14%

Large business 
associations 
representing 
Union 
producers, 
users and 
employers…

Government 
institutions 
2%

Union 
producers and 
trade 
associations 
representing 
Union 
d

Almost 70% of respondents represented union producers and 10% represented importers.  5% 
of  the  respondents  were  large  business  associations  representing  union  producers,  users  and 
employers and 2% were responses from Government institutions within the EU. The category 
others  represented  14%  and  included  law  or  consultancy  firms,  trade  Unions,  1  user  and 
respondents from third countries.   

3. 

EXECUTIVE SUMMARY  

The public consultation process highlighted the many diverging interests which exist among 
the various stakeholders affected by the EU's Trade Defence Instruments. 

Regarding Transparency and Predictability, there was strong support among respondents in 
favour  of  improving  transparency  in  trade  defence  investigations  in  general  terms.    In  this 
context,  the  drafting  of  guidelines  on  various  TDI  issues  including  the  injury  margin,  the 
analogue country and reviews was seen, by almost two thirds of respondents, as a welcome 
proposal. While there were differing opinions as to the content of any guidelines it was clear 
that  stakeholders  wanted  to  be  involved  and  contribute  in  any  drafting  process.  Other 
proposals  aimed  at  improving  transparency  were  met  with  varying  levels  of  support 
depending  on  the  perception  by  respondents  as  to  which  stakeholders  might  benefit.    Over 
half  of  the  respondents  welcomed  the  proposal  to  inform  stakeholders  in  good  time  where 
provisional  measures  would  not  be  imposed.  On  the  other  hand,  respondents  were  less  in 
favour  of  providing  a  limited  pre-disclosure  around  three  weeks  before  the  imposition  of 
provisional  measures.  Even  more  respondents  opposed  the  notion  of  creating  a  shipping 
clause  expressing  fears  that  such  a  proposal  would  undermine  the  effectiveness  of  the 
instruments.   

The proposals regarding the fight against retaliation, particularly the suggestions regarding 
ex-officio initiation of investigations and confidentiality were well supported by respondents.  
Close  to  a  third  of  respondents  had  been  subject  to  retaliation  in  the  past  and  the  public 
consultation showed that it is a matter of serious concern for many stakeholders.  While many 
respondents considered that the Commission should encourage cooperation in investigations 

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there was only little support for the idea that this could be achieved through the imposition of 
fines or mandatory verification visits.  

 Under  the  topic  Effectiveness  and  Enforcement  almost  two  thirds  of  respondents 
considered that, while the EU’s trade defence system is effective, there is, nevertheless room 
for improvement.  Proposals aimed at strengthening the EUs powers to tackle circumvention 
of  trade  defence  measures  provoked  strong  support  such  as  ex-officio  initiation  of  anti-
circumvention  investigations.  While  lengthening  verification  visits  was  seen  by  some 
respondents  (40%)  as  a  means  of  improving  the  overall  quality  of  investigations,  concerns 
were also expressed that this proposal might impact on the legal deadlines and also create an 
additional burden for stakeholders.  

In the context of the subject Facilitate cooperation, over 50% of respondents stated that they 
did not experience difficulties in cooperating in trade defence investigations.   While almost 
two  thirds  of  respondents  stated  that  the  Commission  should  not  extend  the  deadlines  for 
users to participate in the process, almost three quarters agreed that the SME helpdesk should 
be upgraded.  

Under  Optimizing  review  practice,  over  half  of  respondents  were  opposed  to  reimbursing 
duties where measures are not prolonged after a review, some stating that such a move was 
tantamount to double remedies for importers as in most cases the duties would have already 
been passed on to customers. As expected, all importers were in favour of such a move. More 
than half of the respondents also rejected the proposal to automatically combine second and 
subsequent expiry reviews with interim reviews. Many respondents highlighted the fact that 
the  possibility  to  request  interim  reviews  in  this  context  already  existed.  There  was  mixed 
reaction  to  the  proposal  that  the  Commission  should  systematically  initiate  interim  reviews 
where  anti-competitive  behaviour  has  been  identified  with  around  40%  in  favour  and  44% 
against.   

There were various reactions to the proposals under the heading Codification.  In general the 
proposals regarding;  the registration of imports ex-officio; exporting producers with zero or 
de  minimis  dumping  margin  not  being  subject  to  a  review  as  well  as  the  possibility  for 
exemption  of  related  parties  if  they  are  not  involved  in  circumvention  practices  were 
supported by the majority of respondents.  Regarding the proposed deletion of Articles 11(9) 
and 22(4) of  the  AD and AS regulations respectively, it was clear that respondents prefer a 
modification of these provisions. The majority of respondents were opposed to the notion that 
sampling provisions should refer to Union producers and not to complainants, except for the 
standing  test.    As  regards  moves  to  clarify  that  the  Union  interest  tests  covers  all  Union 
producers and not only complainants this was unpopular with the majority of respondents.  

The public consultation also invited parties to make proposals to update any other areas of 
TDI of interest to them. This generated many varied suggestions including; the introduction of 
greater  support  mechanisms  for  SMEs  in  TDI;  improving  the  possibilities  to  address 
circumvention/fraudulent practices; the need to tackle distortions such a dual pricing policies 
and export bans on raw materials; clarification of the rules of origin in the context of TDIs; 
the  Union  interest  test  should  cover  wider  policy  issues  e.g.  environmental  issues  and  the 
creation of a guide on how to participate in investigations.  

4. 

OVERVIEW OF RESPONSES TO THE QUESTIONNAIRE 

The summary of the responses covers the six main areas covered by the public consultation 
and, for ease of reference, follows the numbering used in the questionnaire.  

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I. Increased Transparency and predictability 

Q 2.1.1.  
trade defence investigations? 

In  your  view,  should  the  Commission  further  improve  transparency  in 

Q.2.1.2.  
Just  over  78%  of  respondents  said  that  this  proposal  would  have  an 
impact  on  their  activities,  while  almost  6%  stated  it  would  not.  The  remainder  either  didn't 
answer or did not know.  

Q 2.1.3.  
this issue: 

If yes, please explain how. You may also provide additional comments on 

An overwhelming majority of respondents, regardless of the organisation they represent, is in 
favour  of  improved  transparency  in  trade  defence  investigations  in  general  terms.      In  their 
replies, they did not always explain how improved transparency can have an impact on their 
activities but suggested that it is necessary to enhance predictability and understanding of the 
instruments' particularly complex rules, which is beneficial to all interested parties, including 
SMEs.   

Many importers and Union producers, or their associations, stressed that the instruments are 
not  only  balanced  and  adequate  as  they  are  now,  ensuring  that  industry  can  operate  under 
conditions of "fair competition", but also that they have improved over time.   Although they 
noted that even more transparency could be helpful, it should certainly not serve to weaken 
the instruments.  They also warned against a loss of the instruments' effectiveness in the form 
of  more  burdensome,  politicised  or  longer  procedures  if  more  transparency-related 
mechanisms were to be adopted.   

A few respondents considered that transparency should be increased to benefit all interested 
parties  alike.  Furthermore,  a  small  number  of  respondents  noted  specifically  that  albeit 

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desirable,  enhanced  transparency  should  not  be  seen  as  a  top  priority  since  the  current 
standards are already very high and comply with WTO rules, favouring open and fair trade.  

Several respondents pointed to specific benefits of increased transparency, such as improved 
and  more  widely  accepted  results  of  investigations,  as  well  as  increased  predictability 
concerning their outcome.  They noted that more transparency can improve decision-making 
processes as it helps reduce uncertainties.  

A  few  other  parties  were  in  favour  of  improving  transparency  through  the  publication  of 
documents relating to the AD/AS Committee's proceedings.  

Other  respondents  provided  suggestions  of  areas  in  the  current  procedures  in  which  greater 
transparency  could  be  particularly  useful:  in  Union  Interest  testing,  injury  margin 
assessments,  in  the  determination  of  causal  links,  in  determining  undertakings,  publishing 
refund  proceedings  and  in  (earlier)  disclosure  in  cases  where  no  provisional  measures  are 
imposed.  They also pointed out to the need for more transparent non-confidential files.  

Q 2.1.1  

Predisclosure/ Advance notice 

Q 2.1.1.1. Should the Commission provide a limited pre-disclosure to interested parties 
around three weeks before the imposition of provisional measures?   

Q 2.1.1.2. 79% of respondents said that this proposal would have an impact on their activities, 
while just over 5% stated it would not. The remainder either didn't answer or did not know.  

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Q 2.1.1.3. If yes, please explain how. You may also provide additional comments on this 
issue: 

Over  40%  of  respondents  noted  that  pre-disclosure  would  enhance  transparency  and 
predictability,  which  they  consider  to  be  positive  attributes  of  trade  defence  instruments.  
Among  the  benefits  of  pre-disclosure  cited  by  a  significant  number  of  parties  would  be  the 
possibilities  of  challenging  calculations  and  adjustments  ahead  of  the  imposition  of 
provisional measures allowing for the timely correction of errors.   

Several  importers  and/or  their  associations  considered  that  such  a  mechanism  could  help 
minimise  potential  problems  concerning  goods  in  transit,  as  they  would  not  be  faced  with 
unexpected duties at the last moment.  They noted the complexities, costs and work involved 
in  establishing  their  supply  chains,  therefore  welcoming  advance  notice  of  new  measures.  
Several  of  these  respondents  nonetheless  signalled  that  three  weeks  would  still  be  too  short 
considering their lead times to import. 

However,  a  very  significant  number  of  respondents  also  pointed  to  this  proposal’s 
shortcomings. A majority of Union producers and their industry associations, as well as a few 
other  parties,  cautioned  against  a  number  of  negative  effects  which  could  derive  from  pre-
disclosure.  An  increased  risk  of  politicisation  and  AD/AS  Committee  lobbying  stood  out 
prominently  in  the  replies  as  having  a  potentially  negative  impact  on  the  decision-making 
process.  An accrued risk of stockpiling, circumvention practices or price distortions resulting 
from  early  disclosure  were  other  possible  impacts  mentioned  by  a  large  number  of 
respondents.  

A  variety  of  opinions  were  given  concerning  the  most  suitable  timing  for  pre-disclosure.  
Many parties advocated a maximum of 5 days advance notice, to prevent a surge in imports 
just  before  measures  are  imposed.    Several  parties  noted  that  the  current  practice,  and  the 
surprise effect conferred by the lack of advance notice of imposition of measures, dissuades 
importers from market-distorting practices, such as the channelling of exports with low or no 
duties.  Others commented that a 3-week period would not be suitable to address errors, which 
could, in any event, be rectified prior to the definitive imposition of measures and noted that 
pre-disclosure could only serve to “formalise” information leaks. 

Some  parties  commented  that  the  implementation  of  the  proposal  could  hamper  the  overall 
procedures,  if  the  Commission  and  Member  States  were  faced  with  “expensive  legal 
challenges.”    

2.1.2 Advance notice of the non-imposition of provisional measures 

Q 2.1.2.1 
 Should  the  Commission  inform  interested  parties  in  good  time  prior  to 
the  expiry  of  the  9-month  deadline,  in  cases  where  the  imposition  of  provisional 
measures is not envisaged? 

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Q 2.1.2.2  80% of respondents said that this proposal would have an impact on their activities, 
while just fewer than 4% stated it would not. The remainder either didn't answer or did not 
know.  

Q  2.1.2.3  If  yes,  please  explain  how.    You  may  provide  additional  comments  on  this 
issue: 

A  number  of  governmental  bodies  did  not  understand  the  advantages  of  disseminating  such 
information before the 9-month deadline and noted that in any event, it is not common for the 
Commission  not  to  propose  provisional  measures.  Other  bodies  indicated  that  selective 
dissemination  of  this  information,  i.e.  only  to  registered  interested  parties,  would  be 
discriminatory,  as  many  other  actors,  not  registered  as  interested  parties,  would  equally  be 
affected  but  would  have  no  information  about  it.  It  was  proposed  therefore  that,  should  the 
Commission decide to implement such a proposal, this information should be more generally 
disseminated, e.g. publish in the OJ.  

Certain  governmental  bodies  considered  that  this  initiative  will  increase  transparency  and 
predictability  and  invited  the  Commission  to  publish,  at  the  same  time,  the  deadline  for  the 
imposition  of  definitive  measures.  Other  respondents  supported  this  proposal  as  it  would 
increase  transparency  in  the  market  and  suggested  receiving  this  information  as  early  as 
possible. 

A  significant  number  of  respondents  invited  the  Commission  to  specify  how  many  days 
before  the  9–month  deadline  would  the  mentioned  expression  "in  good  time"  mean,  while 
others  proposed  periods  ranging  from  60  days  to  5  days  as  a  reasonable  time  before  the 

EN 

82 

   EN 

 
 
 
 
 
 
 
 
deadline.  A  number  of  them  indicated  that  such  a  publication  should  only  take  place  after 
consulting the ADC. 

A number of respondents agreed that receiving this information promptly is advantageous for 
their  planning  and  managing  of  their  suppliers,  capital  investment  in  stocks  and  storage 
requirements,  while  some  parties  even  argued  that  the  Commission  should  publicise  in 
advance its intention to impose provisional duties as well.  

Many  respondents  disagreed  with  the  proposal  and  considered  that  the  notification  of  non-
imposition of provisional measures in advance could lead to increased imports, a development 
which would affect negatively their activities and to an additional procedural step which they 
deem  not  to  be  necessary.  Some  also  argued  that  publicising  this  information  may  send 
incomplete information to stakeholders because they would not be informed of the facts of the 
investigation  and  would  therefore  not  increase  transparency.  Some  also  argued  that  the 
publication of  this information  significantly earlier  that the  legal deadline,  may  increase  the 
risk of politicization of the proceeding. 

2.1.3 Activities of the Anti-dumping/Anti-Subsidy Advisory Committee 

Q  2.1.3.1.  Should  the  DG  TRADE  send  a  summary  document  about  the  proposed 
measures  to  interested  parties,  at  the  same  time  as  the  documents  for  consultation  on 
provisional  and  definitive  anti-dumping/  countervailing  duty  measures  are  sent  to  the 
ADC/ASC? 

Q 2.1.3.2. 84% of respondents said that this proposal would have an impact on their activities, 
while just over 4% stated it would not. The remainder either didn't answer or did not know. 

Q2.1.3.3. If yes, please explain how. You may also provide additional comments on this 
issue: 

EN 

83 

   EN 

 
 
 
 
 
The  majority  of  respondents  commented  on  the  enhanced  transparency  and  predictability 
which  would  be  conferred  by  allowing  parties  to  have  access  to  information  that  the 
Commission would send to the ADC/ASC.    

Many  parties'  suggestions  went  beyond  the  provision  of  summary  documents  to  interested 
parties, highlighting the need for even further transparency by proposing that DG Trade could 
also make other documents publicly available and online.  Several respondents with importing 
interests  supported  the  idea  on  the  basis  that  their  forward  planning  and  decision-making 
could be improved.  They suggested that agendas, minutes of the meetings, contact details of 
committee members and any other information which could not be considered confidential by 
nature be disclosed also.  Some of these respondents noted that such a practice would result in 
smoother consultations between parties and the improved quality of measures.    

However, all categories of respondents, from government institution representatives, business 
associations,  Union  importers,  users,  to  producers  and  their  associations  commented  on  the 
impact  this  proposal  would  have  in  terms  of  an  increased  politicisation  of  the  process  and 
lobbying of MS delegates.  They argued that the current principles of confidentiality should 
be allowed to prevail and that decision-making on the basis of objective legal and economic 
considerations  inherent  to  the  instruments  should  not  be  undermined.    A  few  parties  also 
considered  that  it  would  be  best  to  wait  for  the  implementation  of  the  new  rules  on 
comitology  before  determining  whether  such  a  proposal should  be adopted.   Several  parties 
also  considered  that  the  initiative  to  enhance  transparency  on  committee  proceedings  could 
lead to an increased risk of retaliation.   

A few respondents commented on certain timing aspects.  Some proposed that the information 
provided to interested parties should be limited to a 5-day advance notice of new measures, 
but  that  provisional  measures  should  be  imposed  within  shorter  time  frames  and  that 
retroactive measures should be the norm.  Others commented that the proposal should not be 
implemented  if  there  is  a  risk  of  delay  in  adopting  or  implementing  measures.    Some 
respondents  also  considered  that  it  would  be  best  if  interested  parties  were  informed  of 
preliminary findings and calculations as early as possible.  

2.1.4 

 Shipping Clause 

Q 2.1.4.1 
It  could  be  foreseen  to  make  a  commitment  not  to  impose  provisional 
measures within a period of around three weeks after the sending of the pre-disclosure? 

EN 

84 

   EN 

 
 
 
 
 
 
Q 2.1.4.2  Just over 76% of respondents said that this proposal would have an impact on their 
activities, while almost 6% stated it would not. The remainder either didn't answer or did not 
know. 

Q 2.1.4.3. If yes, please explain how. You may also provide additional comments on this 
issue:  

Almost 65% of respondents were negative regarding the proposal not to impose provisional 
measures within a period of around three weeks after the sending of the pre-disclosure.   Just 
over a quarter of respondents (26.10%) were in favour of the proposal.  

Those  opposed  considered  that  it  would  only  weaken  the  anti-dumping  and  anti-subsidy 
instruments  by  facilitating  more  imports  of  unfairly  traded  products.  Many  respondents 
against the proposal argued that the timetable of investigations was well known and once an 
investigation  was  initiated,  parties  were  aware  that,  in  general,  provisional  measures  are 
imposed after nine-months. This period, they considered, was sufficient to facilitate planning 
by importers and exporters.  Many expressed the view that such a delay would simply add to 
the dumping already taking place and, in turn, increase the injury to the EU producers.   Fears 
were  also  expressed  that  this  period  could  be  used  to  stockpile  the  product  in  question.  
Several  expressed  the  view  that  trade  defence  instruments  were  not  intended  to  favour 
importers and that this proposal represented de facto a concession to exporters. 

Those  in  favour  of  the  proposal  considered  that  it  would  improve  transparency,  remove 
uncertainty, and reduce financial risk while creating a better balance in taking into account the 
interests of importers and users.   However, many stated that the three weeks proposed was 
not  sufficient  in  view  of  shipping  times  particularly  from  Asia  and  that  this  should  be 
increased to six weeks.  A number of respondents said that this proposal would help SME's as 
on-going anti-dumping and anti-subsidy investigations often were a surprise to them.  

Q 2.1.5 Injury Margin 

EN 

85 

   EN 

 
 
 
 
  
 
 
Q 2.1.5.1 Should the Commission envisage drafting and publishing guidelines regarding 
the calculation of the injury margin? 

Q 2.1.5.2 Just over 72% of respondents said that this proposal would have an impact on their 
activities, while almost 9% stated it would not. The remainder either didn't answer or did not 
know. 

Q 2.1.5.3. If yes, please explain how. You may also provide additional comments on this 
issue: 

Almost two thirds (64.41%) of respondents considered that the Commission should envisage 
drafting  and  publishing  guidelines  regarding  the  calculation  of  the  injury  margin.    Many  of 
these  respondents  considered  that  such  guidelines  would  further  improve  transparency, 
increase  confidence  in  the  impartiality  and  accuracy  of  investigations,  generate  greater 
feedback  from  stakeholders  and  facilitate  better  decision  making.    In  addition,  several 
respondents  stated  that  it  would  help  stakeholders  to  better  assess  the  situation  and  prevent 
speculation in cases. A number of parties also expressed the view that increased transparency 
may lead to a reduction in the number of judicial processes.   

However, among the majority of those respondents in favour of having guidelines, there was a 
clear  message  that  any  such  guidelines  should  simply  codify  existing  practice  and  not 
introduce any changes to the current practice regarding the calculation of the injury margin.  

A number of respondents, in favour of publishing guidelines, considered that these should go 
further than describing current practice. They believe they should include rules regarding the 
profit level to be used in calculating the injury margin, particularly in view of the EU's use of 

EN 

86 

   EN 

 
 
 
 
  
 
 
   
the lesser duty rule.   A number of respondents cited specific cases where they considered the 
profit margins used were too high. One respondent stated that, simply publishing guidelines 
on existing practice only would perpetuate this problem. Many proposed the publication of an 
objective set of criteria for setting the profit margin for various sectors.  Several parties stated 
that the profit gained in the non-injurious period should be used to establish the profit rate. 

A  number  of  parties  also  proposed  that  guidelines  should  not  only  deal  with  all  factors 
relevant  for  the  determination  of  injury  but  also  deal  with  the  examination  of  factors  not 
attributed  to  the  dumped  imports.  In  this  context  they  state  that  these  factors  should  be 
quantified and analysed separately.    

Almost 29% of respondents stated that the Commission should not publish guidelines on the 
calculation  of  the  injury  margin.  Many  of  these  respondents  questioned  the  purpose  of 
drafting  such  guidelines  i.e.  a  codification  of  the  current  practice  or the  means  to  introduce 
changes to the system. Several respondents stated that their introduction could be dangerous 
depending on the content and orientation.   They also raised the question as to how guidelines 
would be updated while expressing the fear that the publication of such guidelines may lead to 
more decisions being challenged in the Courts.  

Several  respondents  raised  concerns  regarding  the  legal  status  of  any  guidelines.      In  this 
regard  a  number  of  parties  suggested  that  any  guidelines  should  remain  descriptive  and  not 
achieve  legal  status.  They  expressed  concerns  that  binding  rules  would  reduce  the 
discretionary  powers  of  the  Commission.  Several  respondents  stated  that  the  danger  with 
binding  rules  was  that  such  rigidity  would  not  allow  for  the  specificities  and  complexities 
arising  in  various  cases  to  be  addressed.  A  number  of  parties  proposed  that  describing 
examples rather than guidelines would be preferable.  One party raised the issue regarding the 
management of changes in any guidelines involving policy choices and preferences.  

Many stakeholders expressed the wish to be involved in the drafting of any such guidelines 
with a small number stating that such a process should be subject to public consultation.      

Q 2.1.6 Analogue Country 

Q 2.1.6.1  
regarding the choice of analogue country?  

Should  the  Commission  envisage  drafting  and  publishing  guidelines 

EN 

87 

   EN 

 
 
  
 
     
 
 
Q 2.1.6.2 76% of respondents said that this proposal would have an impact on their activities, 
while just over 8% stated it would not. The remainder either didn't answer or did not know. 

Q 2.1.6.3. If yes, please explain how. You may also provide additional comments on this 
issue: 

The  choice  of  analogue  country  is  seen  by  the  majority  of  respondents  as  a  very  important 
issue in investigations given its impact on the outcome of measures.  

Almost  70%  respondents  considered  that  the  Commission  should  envisage  drafting  and 
publishing guidelines regarding the choice of analogue country.  The overall opinion among 
the respondents was that this would improve transparency, thereby increasing confidence and 
predictability in the investigation process.  A number of parties also expressed the view that 
increased transparency could lead to a reduction in the number of judicial processes. 

However,  it  is  clear  that  the  majority  of  those  in  favour  of  having  guidelines  want  to  see 
simply  an  explanation  of  the  practice  up  to  now  and  not  an  introduction  of  changes  to  the 
current method of selecting the analogue country.     

Almost  a  quarter  of  respondents  (23.39%)  are  of  the  view  that  the  Commission  should  not 
publish  guidelines  on  the  selection  of  the  analogue  country.  Many  of  these  respondents 
expressed  concerns  as  to  the  purpose  of  publishing  such  guidelines  i.e.  whether  it  was 
intended to simply codify current practice or to introduce major changes.  One party raised the 
issue  regarding  the  management  of  changes  in  any  guidelines  involving  policy  choices  and 
preferences.  Several  replies  expressed  concerns  that  publishing  guidelines  would  have  the 
effect  of  'watering  down'  the  criteria  in  the  legislation,  making  the  process  less  predictable 
while increasing the risk of more decisions being challenged in the Courts.  

EN 

88 

   EN 

 
 
 
 
 
 
     
 
 
Some respondents were concerned that guidelines would be binding on the Commission and 
thus reduce their ability to take into account the different factors and market conditions which 
arise on a case-by-case basis.  On the other hand one respondent was of the view that unless 
guidelines were binding on the Commission they would be of limited value. 

Several  respondents  pointed  out  that  the  impact  of  the  selection  of  the  analogue  country  is 
enormous with a wrong choice leading to distorted results.  A number of respondents stated 
that the main problem was not one of guidelines.  The main problem, according to them, was 
the Commission's preference for using the analogue country in determining normal value in 
cases involving non-market economy (NME) countries in favour of the normal value of firms 
in NME country which had been granted market economy treatment.  The current system was 
further  criticised  by  a  number  of  respondents  who  allege  that  the  selection  of  the  analogue 
country was often driven by the willingness of producers in a particular country to co-operate.  
A  number  of  respondents  stated  that  the  Commission  should  endeavour  to  ensure  that  the 
economic data of the reference country closely resembles those of the home country and take 
into account all relevant factors, including access to raw materials, productions methods and 
unit  labour  costs.    A  number  of  respondents  also  asked  that  any  guidelines  include 
information regarding the criteria applied where the selection of analogue country is changed 
during the course of an investigation.   

Many stakeholders expressed the wish to be involved in the drafting of any such guidelines 
with a small number stating that such a process should be subject to public consultation.    

Q 2.1.7 Union Interest Test 

Q 2.1.7.1 Should the Commission envisage drafting and publishing guidelines regarding 
the Union interest test? 

EN 

89 

   EN 

 
  
 
 
 
 
 
 
Q 2.1.7.2  67% of respondents said that this proposal would have an impact on their activities, 
while almost 10% stated it would not. The remainder either didn't answer or did not know. 

Q 2.1.7.3. If yes, please explain how. You may also provide additional comments on this 
issue: 

Over half the respondents (57.29%) considered that the Commission should envisage drafting 
and  publishing  guidelines  regarding  the  Union  interest  test.    Several  of  these  respondents 
consider  that  such  guidelines  would  increase  transparency  by  helping  stakeholders  to 
understand how the EU conducts the Union interest test, increase confidence in the manner in 
which investigations are conducted and would generate greater input from stakeholders thus 
leading to better decision making.  

However  many  of  these  respondents  expressed  concerns  that  drafting  guidelines  would  be 
used  to  instigate  changes  to  the  current  methodology  and  stressed  their  clear  preference  for 
guidelines which would codify existing practice only.  

On  the  other  hand  a  number  of  other  respondents,  in  favour  of  publishing  guidelines, 
considered that these should go further than simply describing current practice and suggested 
that this opportunity be used to publish more comprehensive guidelines.  One respondent said 
they  would  expect  impact  assessments  and  cost-benefit  analysis  to  be  part  of  any 
methodology.    One  respondent  said  that  the  test  must  be  designed  in  a  way  which  reflects 
modern global supply chains.  Other respondents suggest that the Commission be more active 
in  identifying  users  and  consumers  of  products  in  order  to  have  their  views  assessed  in  the 
Union  interest  test  while  another  stated  that  silence  by  these  parties  should  not  be  seen  as 
approval.  One respondent argued that users are often SMEs and are not well organised which 
makes  it  difficult  for  them  to  argue  effectively  regarding  the  impact  of  measures  on  their 
business. One party raised the issue regarding the management of changes in any guidelines 
involving policy choices and preferences.   

Just over a quarter of respondents stated that the Commission should not publish guidelines 
on  the  Union  interest  test  expressing  concerns  that  these  could  introduce  changes  to  the 
current  practice  thereby  weakening  the  instrument  and  possibly  giving  rise  to  increased 
number of challenges in the Courts. They consider that the Union interest test, as it stands, is 
appropriate. Many respondents expressed the view that, given the Union interest test is unique 
to the EU and is a WTO+, it should not change in any way which would put EU producers at 
a disadvantage vis-à-vis their competitors.  Several respondents stressed that the purpose of 
the AD and AS legislation is to combat unfair trade and, once such practices are found, action 
should be taken to restore fair trade.   In this context many expressed the view that placing the 
burden  of  proof  on  users  and  consumers  regarding  Union  interest  was  correct.  Another 
respondent expressed the view that it would be difficult to develop guidelines for what they 
consider  to  be  largely  a  qualitative  issue.    Several  respondents  stated  that  the  danger  with 
binding rules was that it would introduce rigidity which would not allow for the different and 
diverging views of stakeholders to be taken into account.  

EN 

90 

   EN 

 
 
 
  
     
 
    
Many stakeholders expressed the view that they should be involved in the drafting of any such 
guidelines.    

2.1.8   Expiry Reviews 

Q 2.1.8.1  
regarding expiry review investigations? 

Should  the  Commission  envisage  drafting  and  publishing  guidelines 

Q 2.1.8.2   Just under 70% of respondents said that this proposal would have an impact on 
their activities, while 10% stated it would not. The remainder either didn't answer or did not 
know. 

Q2.1.8.3. If yes, please explain how. You may also provide additional comments on this 
issue: 

Nearly two thirds (64.75%) of respondents considered that the Commission should envisage 
drafting  and  publishing  guidelines  regarding  expiry  review  investigations.    Some  of  the 
replies, in welcoming these guidelines, highlighted the fact that the nature of expiry reviews 
implies documenting  the future which is  challenging.    A  large  number  of  these  respondents 
considered  that  such  guidelines  would  add  to  overall  transparency  in  expiry  review 
investigations,  increase  confidence  in  the  quality  of  investigations,  facilitate  greater 
engagement in the decision making process and help improve business planning by removing 
some uncertainty and ensuring a more predictable business environment.  

EN 

91 

   EN 

 
 
 
 
 
 
 
 
 
 
There were, however, two very clear messages from the majority of respondents. Firstly, any 
guidelines should only codify existing practice and be based on existing and established case 
law and not be used to introduce changes. Secondly, many respondents asked to be consulted 
on the drafting of any such guidelines.  

A  few  respondents  suggested  that  it  would  be  useful  if  guidelines  included  instructions  on 
how to draft a request for an expiry review.  Two respondents stated that the main problem 
with expiry reviews was the fact that the measures cannot be altered.  They stated this could 
not  be  alleviated  by  publishing  guidelines  on  existing  practice  only.  They  suggested  that  a 
progressive liberalisation of any measures would enable the Commission to better assess the 
likelihood of recurrence of injury.  They also stated that a major problem, in their view, is the 
absence of a Union interest test when initiating expiry reviews.   

Almost  a  quarter  (22.37%)  of  respondents  stated  that  the  Commission  should  not  publish 
guidelines  on  expiry  review  investigations.  Several  respondents  feared  that  the  drafting  of 
guidelines  would  introduce  changes  to  the  current  system  which  they  felt  unnecessary.     
They also considered that this could open up possibilities for more decisions being challenged 
in the Courts.  A number of respondents expressed concerns that guidelines would restrict the 
Commission  addressing  the  many  various  issues  which  arise  from  case  to  case.    One  party 
raised  the  issue  regarding  the  management  of  changes  in  any  guidelines  involving  policy 
choices and preferences.    

Q 2.1.4  
guidelines in any other areas? 

In order to increase transparency, do you think it would be useful to draft 

The replies to this question were evenly split with 50% of respondents stating there was no 
need for further guidelines to be drafted in any other areas and 50% of respondents proposing 
subjects for which they would like to see guidelines.  

Amongst those who did not propose further guidelines, a number expressed the view that the 
drafting  and  publishing  of  guidelines  would  lead  to  more  legal  challenges  and  reduce  the 
effectiveness  of  what  is  a  legal  procedure.    Questions  were  raised  by  a  few  respondents 
regarding the binding nature of any guidelines and the fact that this could limit flexibility in 
dealing  with  different  cases.  Some  others  expressed  the  view  that  the  drafting  of  guidelines 
would not improve transparency while one respondent stated that it was not necessary as the 
EU was a model for other countries in the application of TDI. 

A  number  of  those  in  favour  of  drafting  guidelines  did  not  offer  any  possible  subjects  for 
consideration, but expressed general support for such an initiative as they consider it would 
improve transparency and help stakeholders to better understand the process of investigations. 
Some  respondents  suggested  that  guidelines  should  be  prepared  on  all  issues  which  were  a 
pre-requisite for measures including all calculations, judgements and assumptions.  

EN 

92 

   EN 

 
 
 
    
 
  
 
  
Amongst  the  specific  subjects  proposed  for  guidelines  the  most  frequently  mentioned  was 
undertakings  and  how  they  are  constructed,  how  the  EU  industry  could  be  involved  in  the 
process as well as how breaches of undertakings are dealt with and how the re-imposition of 
measures are handled. 

Many respondents also suggested guidelines on the confidentiality of submissions covering all 
stages  from  complaint  to  the  end  of  an  investigation.    One  respondent  suggested  that  such 
guidelines should also cover how to prepare non-confidential submissions.  

Several respondents would like to see guidelines on the procedural rules for the suspension of 
measures,  the  practical  implementation  of  the  'single  economic  entity'  concept  and  thirdly 
market economy treatment in investigations. Other subjects mentioned by a few respondents 
included  circumvention,  guidelines  on  the  definition  of  relevant  product,  geographical 
markets  and  Union  producer,  guidelines  on  inspections  by  EU  officials,  sampling  of  EU 
producers, refunds, causal link, normal value and how the Commission assesses dumping.   

Finally  one  respondent  suggested  that  this  opportunity  should  be  used  to  review  the 
Commission's approach on various subjects, in light of developments over the last decade or 
so.  They  also  proposed  that  a  clear  process  for  updating  guidelines  be  put  in  place  to  take 
account of developments in specific cases or jurisprudence.  They also proposed that more is 
done to alert industry to new investigations, results and decisions taken.   They consider an 
alert to be particularly important where products are subject to registration.   

Many respondents requested that they be included/consulted in the drafting of any guidelines. 

II 

Fight against retaliation 

Q.2.1  Has your business already been subject to retaliation in the past? 

EN 

93 

   EN 

 
 
 
 
 
 
 
 
 
 
Q 2.2.2 
this issue: 

If yes, please explain how. You may also provide additional comments on 

While  nearly  half  of  the  respondents  replied  that  they  had  not  been  subject  to  retaliatory 
measures, a third of the respondents reported that they had indeed been subject to retaliatory 
measures in the past, the latter being mostly Union producers and their associations, but also 
including several importers as well. 

Certain governmental bodies recognise that the threat of retaliation is a concern that must be 
addressed,  while  others  while  they  understand  the  concerns,  they  were  not  convinced  that 
resorting to ex-officio investigations would be an effective solution. 

In terms of the form that such retaliatory measures may take, many respondents reported that 
governments  of  third  countries  imposed  countermeasures  on  the  same  or  different  products 
than the ones targeted by the EU investigations. In many cases, parties reported that they have 
been subject to aggressive behaviour on behalf of exporters or of their own customers and in 
certain instances, they reported more direct approaches like personal blackmail of a CEO of a 
company or to the EU association directly (EUROALLIAGES). It has also been reported that 
the retaliation can target the operations of EU companies in China. 

As a result of the above, a considerable number of respondents were not willing to participate 
in or support the lodging of a complaint and asked the Commission to implement methods to 
protect  their  identities.  In  certain  cases,  complainants  had  to  withdraw  their  complaint 
partially  or  completely.  Moreover,  certain  parties  considered  that  although  their  industries 
were  not  behind  TDI  complaints,  they  felt  that  the  Commission  should  take  measures  to 
protect  them  in  case  they  would  be  threatened  with  retaliation  simply  because  they  are 
European companies. 

A number  of respondents reported  that they had not been victims of retaliatory measures in 
the past, but that they do understand the risk. Others, while recognising that retaliation may be 
an  issue,  they  considered  that  the  depoliticised  decision-making  in  TDI  proceedings  based 
only on technical facts would suffice to alleviate the problem. 

EN 

94 

   EN 

 
 
 
 
2.2.1  Ex-officio AD and CVD investigations 

Q 2.2.1.1 
where there is threat of retaliation? 

Should  the  Commission  initiate  ex-officio  investigations  in  situations 

Q 2.2.1.2 
activities, while 7% stated it would not. The remainder either didn't answer or did not know. 

66%  of  respondents  said  that  this  proposal  would  have  an  impact  on  their 

Q 2.2.1.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

While a number of governmental bodies consider that this proposal would impact favourably 
on  the  operations  of  EU  companies,  particularly  SMEs  that  are  more  easily  intimidated  by 
retaliatory  threats,  others  remain  either  sceptical  of  its  usefulness  given  the  wider  industrial 
interests.  They  consider  that  such  actions  should  be  targeting  specific cases  where  threat  of 
retaliation  is  clear.  One  respondent  questioned  the  possibility  provided  by  the  Basic 
Regulations for the Commission to initiate ex-officio investigations. 

Certain  parties  argued  that  such  a  possibility  would  infer  additional,  counter-productive 
powers on the Commission, while others consider that businesses could take advantage of this 
possibility  and  indicate  "fear  of  retaliation"  as  a  factor  when  it  may  not  be  so.  Other 
respondents consider that such a proposal would not prevent retaliation, but on the contrary, 
might be interpreted as a politicisation of instruments which are quasi legal and technical in 
nature.  Such  a  perception  by  third  countries  trade  partners  may  trigger  retaliatory  actions 
against  wider  EU  interests  not  limited  to  the  sector  concerned.  It  was  also  argued  that  if 
countries  are  prepared  to  retaliate,  the  ex-officio  initiation  of  investigations  will  not  change 
their decision to do so. It must be left to the industry therefore to weigh its interest and act 
accordingly.  

Some  respondents  also  indicated  that  Article  17  of  the  WTO  ADA  provides  for  a  dispute 
settlement procedure that could serve the purpose of resolving such threats. They also argued 
that, in order for the Commission to obtain cooperation from Union producers that are afraid 
of retaliatory practices, it may have to threaten these Union producers with sanctions, which is 
a very questionable outcome.  

EN 

95 

   EN 

 
 
 
 
A significant number of respondents indicated that the Commission already has the power to 
initiate ex-officio investigations. While many of them indicated that more frequent use of this 
power  would  be  welcome  particularly  in  anti-subsidy  investigations  where  the  risk  of 
retaliation is higher, many considered that when the number of Union producers is small, their 
identity would eventually be known to parties involved in the proceeding and therefore, the 
retaliatory  threats  would  not  be  avoided.  In  addition  they  mention  the  possibility  that 
transparency of information in such investigations would be weakened.  

A significant number of parties consider that this proposal would tackle the fear of retaliation 
and encourage companies to utilise TDIs. However, many of them specified that it should be 
used  only  in  special  circumstances  and  some  proposed  that  the  Commission  should  act  ex-
officio only if the interested industry agrees with or even requests such a move. 

2.2.2 

Obligation to cooperate in ex-officio investigations 

Q 2.2.2.1 
investigations, to allow parties to communicate relevant information in confidence? 

Should the Commission establish procedures for the purposes of ex-officio 

Q 2.2.2.2 

What should be the appropriate sanction in cases of non-cooperation? 

Many respondents thought that the Commission should encourage cooperation. Most were of 
the  view  that  this  could  be  achieved  by  a  possibility  to  communicate  information  in 
confidence  to  the  Commission  (i.e.  keep  the  identity  of  the  supplier  of  information 
confidential).  Some  rare  replies  were  against  such  a  possibility.  Some  responses  elaborated 
further  by  saying  that  a  deadline  should  be  set  for  receiving  data  and  information  from  the 
Union industry and in cases where there is a of lack of cooperation, the investigation should 
be automatically terminated.  Some others said that an investigation should only be initiated if 
cooperation is forthcoming. However, the vast majority of respondents did not think fines or 
mandatory on spot checks were a good idea. Only a very small number of respondents agreed 
to fines and only one agreed to mandatory on-spot verifications. Some thought that it could be 
an  appropriate  sanction  (and  thus  a  sufficient  incentive  to  secure  cooperation)  if  the 
Commission refused to open in future any ex officio case if cooperation was not forthcoming.  

EN 

96 

   EN 

 
 
 
 
 
Q  2.2.2.3    Just  under  60%  of  respondents  said  that  this  proposal  would  have  an  impact  on 
their activities, while almost 10% stated it would not. The remainder either didn't answer or 
did not know. 

Q2.2.2.4 
this issue: 

If yes, please explain how. You may also provide additional comments on 

Most  of  the  replies  to  this  question  did  not  really  answer  the  question,  i.e.  whether  the 
introduction of procedures for the purposes of ex officio investigations etc. has an impact on 
their  activity.  The  replies  given  would  normally  be  more  appropriately  listed  under  2.2.2.2. 
e.g.  many  say  that  they  are  against  sanctions.  Many  statements  also  discuss  whether  or  not 
cooperation  in  ex  officio  investigations  should  be  mandatory.  Some  replies  are  in  favour  of 
mandatory  cooperation,  while  a  number  are  against  mandatory  cooperation.  Some 
respondents seem only be opposed to sanctions in case of non-cooperation, but not explicitly 
against a mandatory cooperation. The reasons for such opposition vary: lack of resources (in 
particular  for  SMEs),  companies  would  face  a  difficult  choice  between  retaliation  by  3rd 
country and sanction by EU, insistence that cooperation should be a discretionary decision of 
each  company.  Some  replies  also  try  to  develop  other  modalities  to  make  ex-officio 
investigations workable. They suggest that Member States and/or European or national sector 
associations should play a more active role in this respect. Two trade associations claim that 
in case of ex-officio initiations, importers, users and consumers should be given a possibility 
to prepare their case against possible measures. 

III Effectiveness and Enforcement 

Q 2.3.1 In your view, is the EU trade defence system effective? 

Q 2.3.2 The majority of respondents (63%) considered that the EU's trade defence system is 
effective. Most of these considered however that there was room for improvement. 

A significant number of parties commented that it takes too long to have measures imposed 
and  that  ways  should  be  found  to  accelerate  this.  Some  added  that  the  huge  volume  of 
information  that  needs  to  be  provided  in  trade  defence  investigations  caused  problems 
particularly  for  SMEs.  Indeed,  some  parties  stated  that  the  EU  trade  defence  system  is  less 

EN 

97 

   EN 

 
 
 
 
 
effective when applied in sectors where SMEs represent a high proportion of production. This 
should be addressed through changes in the TDI procedure and the introduction of additional 
support mechanisms for SMEs. 

Some  respondents  expressed  concerns  about  the  decision  making  process.  Some  stated  that 
the Union interest test should not be used as a means to modulate the level of measures. 

A  number  of  parties  considered  that  raw  material  distortions  in  third  countries  need  to  be 
addressed in any reform of the TDIs. Some suggested that the lesser duty rule not be applied 
where  such  distortions  were  found  or  that  exporting  producers  be  refused  market  economy 
treatment.  On  the  other  hand,  a  number  of  parties  called  for  the  abolition  of  the  lesser  duty 
rule more generally. Some stated that duties in the EU are often lower than in other countries 
because  of  the  lesser  duty  rule  and  the  low  target  profits  used  in  establishing  the  injury 
margins.  

Parties also commented on the fact that, in their opinion, anti-circumvention action takes too 
long  and  consequently  better  means  to  tackle  the  circumvention  of  trade  defence  measures 
need to be found. 

Some parties considered that as the EU's trade defence system is very advanced in comparison 
with the EU's main  global  partners,  further unilateral changes should be avoided until other 
partners  liberalise  their  TDI  systems.  Efforts  should  be  made  to  export  the  EU's  existing 
WTO+ elements to other WTO members. 

One  party  considered  that  there  was  no  proof  that  anti-dumping  measures  had  made  an 
efficient  contribution  to  strengthening  the  competitiveness  of  EU  industrial  sectors.  Indeed, 
some  other  parties  claimed  that  trade  defence  measures  are  mainly  helping  third  country 
producers. A number of respondents with importing interests acknowledged the need for trade 
defence instruments to tackle unfair trade but considered that they were often used to protect 
inefficient Union industries. 

One party considered that to make the trade defence system more effective, greater account 
needs  to  be  taken  of  the  impact  of  measures  on  all  stakeholders  concerned.  This  party  also 
considered that better account should be given to the impact of TDI on global supply chains, 
ensuring that EU companies are in fact not being damaged by measures. 

2.3.1   Ex-officio anti-circumvention investigations. 

Q 2.3.1.1 Which circumvention practices have you experienced, if any? 

EN 

98 

   EN 

 
Q 2.3.1.2 

There were no other practical examples of circumvention practices highlighted.  

Q 2.3.1.3 
investigations, if it has sufficient evidence at its disposal?  

the  Commission 

Should 

initiate 

ex-officio 

anti-circumvention 

Q2.3.1.4  73% of respondents said that this proposal would have an impact on their activities, 
while almost 6% stated it would not. The remainder either didn't answer or did not know. 

Q 2.3.1.5 
this issue: 

If yes, please explain how. You may also provide additional comments on 

EN 

99 

   EN 

 
 
 
 
 
 
A number of governmental bodies agree that if the Commission has sufficient information at 
its  disposal,  it  should  initiate  ex-officio  anti-circumvention  investigations.  It  was  noted 
though,  that  increased  customs  controls,  combined  with  appropriate  sanctions,  could  make 
such practices less attractive. 

Certain  parties  indicated  that  circumvention  practices,  mainly  in  the  form  of  customs  mis-
declaration  confer  unfair  advantages  to  certain  operators  and  should  therefore  be  prevented 
and  sanctioned,  while  other  respondents  indicated  that  sometimes  it  is  the  exporting  parties 
that  mis-declare  the  goods  without  the  Union  importers  being  aware  of  it  until  the  customs 
controls reveal the reality.  

Some  respondents  mentioned  that  circumvention  investigations  effectively  block  trade  with 
the  targeted  country  and  discourage  continuation  of  imports  from  this  country,  even  if  the 
exporting partners were genuine producers, because it takes too long for them to be granted 
the necessary exemption from the duties. 

Certain respondents expressed their scepticism regarding the proposal and indicated that the 
Commission  should  initiate  anti-circumvention  investigations  only  in  absolutely  justified 
cases and only on the basis of a reasoned request by the Union industry, while some invited 
the  Commission  to  share  detailed  statistical  data  (TARIC  level)  with  the  Union  industry  in 
order to improve the efficiency of this proposal. 

Many  respondents  consider  that  all  market  players  should  abide  by  the  rules  and  therefore 
agree  in  principle  with  the  proposal  for  the  Commission  to  initiate  ex-officio  anti-
circumvention  investigations,  but  only  if  there  is  sufficient  evidence  to  do  so  and  the 
transparency of the proceeding is assured and provided that such investigations do not create 
excessive additional administrative burden to companies that operate legitimately. 

A  significant  number  of  replies  indicate  that  circumvention  practices  are  illegal,  distort  the 
level playing field in the market, increase the injury suffered already by the Union producers, 
have  a  negative  impact  on  the  Union's  customs  revenue  and  undermine  the  effectiveness  of 
the measures. They urge the Commission to use the statistical data at its disposal, be vigilant 
and in cooperation with OLAF (the European anti-fraud office), national customs authorities 
and the industry concerned, stop such practices as soon as possible or even prevent them from 
occurring by properly training customs officials. 

2.3.2 Verification visits 

Q 2.3.2.1. Would it be useful for DG TRADE to increase, where appropriate, the length 
of investigation visits to four or five days per company? 

EN 

100 

   EN 

 
 
Q 2.3.2.2  Almost 44% of respondents said that this proposal would have an impact on their 
activities, while over 16% stated it would not. The remainder either didn't answer or did not 
know. 

Q 2.3.2.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

40%  of  respondents  agreed  that  longer  investigation  visits  would  most  likely  contribute  to 
enhancing the quality of the investigations if done in the least disruptive way possible. Among 
the  supporters,  many  expressed  the  opinion  that  currently  verification  visits  do  not  allow  to 
sufficiently address problems concerning business activities of the industry concerned. Other 
replies suggested that the efficiency of the verification visits could be improved, rather than 
increasing their length which should only be done in exceptional cases. Some replies agreed 
with  an  extension  within  the  existing  legal  framework  under  the  condition  that  they  do  not 
jeopardize the overall time limits of investigations. Moreover it was suggested that the length 
of  visits  should  depend  on  the  complexity  of  a  case,  product  type,  countries  concerned  and 
size  of  visiting  companies.  Some  respondents  thought  that  since  investigation  visits  are 
disturbing to the companies' activities they should be well prepared and not take more than 2 
days. They were of the view that longer verification visits could impose an additional burden 
on  cooperating  companies.  They  underlined  that  already  now  many  companies  (especially 
SMEs) refrain from cooperation in investigations due to too high costs and time-consuming 
procedures.  

2.3.3  Lesser duty rule 

EN 

101 

   EN 

 
 
  
 
 
 
 
 
 
 
 
Q  2.3.3.1  Should  the  Commission  not  apply  the  lesser  duty  rule  in  cases  of  fraud, 
circumvention or subsidisation? 

Q 2.3.3.2 Almost 69% of respondents said that this proposal would have an impact on their 
activities,  while  over  6%  stated  it  would  not.  The  remainder  either  didn't  answer  or  did  not 
know. 

Q 2.3.3.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

Most comments were of a rather general nature. Some clearly supported the approach, while a 
number of parties went beyond the proposal, calling for the abolition of the lesser duty rule as 
such, independently from the type of investigation. They explained that duties in the EU are 
often lower than in other countries because of the lesser duty rule. On the other hand, a great 
number of respondents stated that the lesser duty rule is an example of good practice in the 
EU  anti-dumping  system  and  has  an  important  role  to  play  in  ensuring  a  right  balance 
between  different  interests  of  parties  concerned,  thus  it  should  be  maintained.    On  a  more 
general  basis,  these  parties  also  pointed  out  that,  anti-dumping  duties  should  be  used  as 
measures of a purely remedial character and should not be transformed into punitive measures 
against practises such as fraud and circumventions.  

EN 

102 

   EN 

 
  
 
 
 
 
IV 

Facilitate cooperation 

Q  2.4.1  Has  your  business  experienced  difficulties  in  cooperating  in  trade  defence 
investigations? 

Q 2.4.2 
this issue: 

If yes, please explain how. You may also provide additional comments on 

Most respondents did not experience difficulties in cooperating in trade defence investigations 
but they nevertheless stated that the cooperation could be further facilitated and that Member 
States authorities could be more involved in improving the level of cooperation. Some replies 
indicated  common  problems  encountered  as  follows: 
too  complex 
questionnaires,  too  high  workload,  too  burdensome,  and    too  costly  procedure,  too  short 
deadlines given the availability of data and the format in which such data is requested by the 
Commission.  Several  replies  suggested  a  disproportion  between  high  cost  and  workload 
invested  by  the  companies  and  very  poor  outcome  of  the  investigation,  i.e.  low  level  of 
adopted  measures.  A  number  of  respondents  indicated  increasing  difficulties  in  lodging  a 
complaint/request, especially for expiry reviews. They all agreed that due to high technicality 
and complexity of procedures many companies (especially SMEs) refrain from cooperation. 

long  and 

too 

2.4.1. Time-limits: longer time limits for users to register as interested party and to reply to 
the questionnaire 

Q 2.4.1.1 
known to the Commission and to submit questionnaire replies?  

Should the Commission extend the deadlines for users to make themselves 

EN 

103 

   EN 

 
 
 
 
 
 
 
Q 2.4.1.2  68% of respondents said that this proposal would have an impact on their activities, 
while almost 12% stated it would not. The remainder either didn't answer or did not know. 

Q 2.4.1.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

The majority of respondents (63%) considered that there is no need to extend the deadlines for 
users  to  make  themselves  known  to  the  Commission  and  to  submit  questionnaire  replies. 
Almost  all  of  these  respondents  against  an  extension  of  the  deadlines  were  categorised  as 
Union  producers  and  associations  representing  Union  producers,  whereas  most  of  the 
respondents who were in favour of an extension consisted of importers and their associations. 
users and employers. Overall, the majority of the respondents agreed that an extension of such 
deadlines would have an impact on their activities. 

The opinions of the government institutions that replied were divided. Whereas some believe 
that  such  an  extension  can  only  help  users  in  general  and  SME's  in  particular,  others  are 
concerned  that  such  an  extension  could  prevent  completing  the  investigation  on  time  and 
could be seen as discriminatory as it is not covering all interested parties. 

Most  importers  and  trade  associations  representing  importers  as  well  as  large  business 
associations  representing  Union  producers,  users  and  employers  argued  that  it  takes  often 
several days to circulate the information to the members and that therefore longer deadlines 
would allow for better planning of time and better quality of data. A few trade associations 
also  suggested  that  to increase  the  involvement  and  participation  of  stakeholders,  especially 
SME's, the Commission could consider accepting contributions in other formats. They claim 
that  in  many  EU  regulatory  policies,  specific  provisions  for  SME's  are  created  and  that 
therefore  anti-dumping  policy  should  not  remain  an  exception.  Furthermore,  a  single  trade 
association  representing  importers  suggested  that  the  Commission  could  send  automatically 
copies of the non-confidential version of the complaint to the interested parties. 

EN 

104 

   EN 

 
 
 
 
 
 
 
 
 
Many of the Union producers and trade associations representing Union producers argued that 
the  adoption  of  an  extension  of  the  deadline  for  users  only  would  be  selective  and 
discriminatory.  In  their  view,  the  same  treatment  should  be  granted  to  all  interested  parties.  
Moreover, some of them fear that an extension of the deadline for users would risk delaying 
the investigations.  In addition, some state that users are already provided with an exceptional 
opportunity to be heard and that allocating them more time would not be justified. 

2.4.2  Simplification of refund procedures 

Q.4.2.1  
facilitate such requests and to make such decisions more easily accessible to the public?  

Should  the  handling  of  refund  applications  be  reviewed  with  a  view  to 

Q 2.4.2.2  55% of respondents said that this proposal would have an impact on their activities, 
while almost 14% stated it would not. The remainder either didn't answer or did not know. 

Q 2.4.2.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

Nearly  half  of  respondents  (46%)  considered  that  there  is  a  need  to  review  the  handling  of 
refund applications with a view to facilitate such requests and to make such decisions more 
easily  accessible  to  the  public.  34%  of  the  respondents  were  of  the  opinion  that  there  is  no 
need for such a review. Union producers and their associations were divided whereby half of 
the  respondents  were  in  favour  of  such  a  review  and  half  of  them  against  it.  Overall,  the 
majority  of  the  respondents  agreed  that  a  review  of  the  refund  procedures  would  have  an 
impact on their activities. 

Most  of  the  government  institutions  that  responded  argued  that  it  would  be  useful  to  give 
further  clarification  on  the  refund  procedure.    However,  they  also  stated  that  the  burden  of 
proof  should  rest  upon  the  applicant's  side.  One  government  institution  suggested  that  the 

EN 

105 

   EN 

 
 
 
 
 
 
 
 
 
 
Regulation should be revised to provide a degree of discretion to the Commission in terms of 
evidence  required  and  in  granting  refunds.  Another  government  institution  suggested  that 
refunds  could  be  more  automatic  and  that  the  Commission  could  inform  the  affected 
companies more proactively. 

Most  respondents  argued  that  a  simplification  of  the  process  would  make  refund  decisions 
more  accessible  to  the  public  (more  transparency)  and  encourage  more  members  to  claim  a 
refund. A few trade associations also suggested to the Commission to publish on its website a 
more  user-friendly  format  of  specific  related  documents  (such  as  reimbursement  forms)  as 
well as the contact details of the authorities dealing with the reimbursement.  Furthermore, a 
single  large  business  association  representing  Union  producers,  users  and  employers 
suggested  that  the  Commission  could  set  up  package  guidelines  related  to  duty  collection 
systems, forms of duties and refunds (whereby the guidelines would explain the methodology, 
actors and timeframes). 

As  far  as  the  Union  producers  and  their  associations  are  concerned,  half  of  the  respondents 
called upon the Commission,  in  the light  of  transparency, to simplify  the procedures and to 
make applications for refund public. The other half of the respondents that were categorised 
as Union producers and their associations argued that facilitating the refund procedure should 
be  addressed  only  to  interested  parties  and  not  to  parties  not  directly  concerned  by  the 
investigation.  

2.4.3  Small and Medium Sized Enterprises (SMEs) 

Q.4.3.1 Should DG TRADE upgrade the SME helpdesk? 

EN 

106 

   EN 

 
 
 
 
 
 
 
 
Q 2.4.3.2  57% of respondents said that this proposal would have an impact on their activities, 
while almost 16% stated it would not. The remainder either didn't answer or did not know  

Q 2.4.3.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

The  majority  of  respondents  (72%)  considered  that  it  would  be  a  good  idea  to  upgrade  the 
SME helpdesk. Almost all of the respondents that were categorised as government institutions 
and  large  business  associations  representing  Union  producers,  users  and  employers  were  in 
favour  of  such  an  upgrade.  Out  of  the  respondents  categorised  as  importers  and  trade 
associations representing importers as well as the Union producers and their associations, the 
majority  was  also  in  favour  of  such  an  upgrade.  Overall,  the  majority  of  the  respondents 
agreed that an upgrade of the SME helpdesk would have an impact on their activities. 

Nearly  all  of  the  government  institutions  that  responded  would  welcome  an  upgrade  of  the 
SME helpdesk. Many argued that drafting a new complaint is a real obstacle for SME's and 
that a simplification of the questionnaires as well as the ability to submit complaints in their 
own  languages  would  be  very  important  for  SME's.    In  addition,  the  SME  helpdesk  could 
support  further  SME's  and  associations  in  gathering  data.    Moreover,  some  government 
institutions  suggested  that  the  Commission  could  initiate  investigations  in  cases  where  the 
majority of the parties affected are SME's. 

The importers and their trade associations and large business associations representing Union 
producers,  users  and  employers  argued  that  an  upgrade  of  the  SME  helpdesk  could  make  a 
difference to SME's who often cannot bear monetary costs of qualified technical assistance in 
the preparation of a complaint. They are in favour of strengthening the helpdesk in a way that 
more and better information, more support (including legal support and assistance in filling in 
the  questionnaires),  and  a  guaranteed  reply  within  3-4  days  and  translation  services  would 
become  available  to  SME's.  A  few  trade  associations  also  suggested  that  the  upgraded 
helpdesk  could  make  available  information  regarding  the  deadlines;  the  possibilities,  ways 
and means to participate and the state of play in the decision-making process. 

Some  respondents  stated  however  that  an  upgrade  of  the  helpdesk  is  unlikely  to  bring  any 
further benefit to the SME's as they already receive technical assistance at the complaint and 
investigation stages. It was also mentioned that seminars could be a tool for improving SME's 
knowledge on the functioning of trade defence instruments. 

V 

Optimizing review practice 

2.5.1. Expiry reviews: reimbursement of duties paid if the investigation is terminated without 
renewal of measures 

EN 

107 

   EN 

 
 
 
 
 
 
 
 
 
 
Q  2.5.1.1  Should  consideration  be  given  to  reimbursing  the  duties  that  had  been 
collected since the opening of the review investigation in cases where, after investigation, 
the measures are not prolonged? 

Q 2.5.1.2 59% of respondents said that this proposal would have an impact on their activities, 
while almost 13% stated it would not. The remainder either didn't answer or did not know.  

Q 2.5.1.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

Among the 9 government institutions that responded to the question some were favourable to 
this idea with the additional comment that if the expiry review were to be concluded before 
the end of the 5-year duration of the definitive duties, this question would never arise. Other 
government  institutions  expressed  a  negative  view  referring  to  the  fact  that  provisional 
measures are not imposed retroactively to the detriment of the injured Community producers. 

The  importers  were  unanimous  in  their  support  for  reimbursement  of  duties,  proposing 
automatic refunds or transparent, fast and straightforward procedures to obtain such refunds.  
One  stakeholder  proposed  that  information  on  whether  a  request  for  an  expiry  review  has 
been received by the Commission services should be announced so as to assist importers in 
their  planning.  Another  importer  emphasized  that  it  would  be  more  willing  to  cooperate 
during  review  investigations  if  the  duties  could  be  refunded  should  the  proceeding  be 
terminated. 

Union  producers  and  their  associations  which  constituted  some  80  %  of  all  replies  were 
overall negative to the fact that provisional measures are not imposed retroactively and that 

EN 

108 

   EN 

 
 
 
 
 
 
 
 
Union producers have suffered from injurious dumping for a period prior to the imposition of 
provisional measures without financial compensation.  

Moreover,  there  were  claims  that  the  duty  had  in  most  cases  already  been  passed  on  to 
customers by the importers and therefore a refund would be tantamount to double remedies 
for importers. A few Union producers had an opposite view stating that duties that are found 
to  be  unwarranted  should  be  refunded.  Some  producers  refer  to  the  need  for  parallelism  in 
(WTO+) rules applied by our trading partners. 

2.5.2. Expiry reviews combined with interim reviews 

Q  2.5.2.1  Should  the  second  and  any  further  expiry  review  of  measures  be  combined 
with  an  interim  review,  in  order  to  allow  for  the  level  of  the  duty  to  be  changed  if 
appropriate? 

Q 2.5.2.2  Almost 68% of respondents said that this proposal would have an impact on their 
activities, 6% stated it would not. The remainder either didn't answer or did not know. 

Q 2.5.2.3 
this issue: 

If yes, please explain how. You may also provide additional comments on 

 Among  the  9  government  institutions  that  responded  to  the  question,  some  supported 
adjustment  of  the  level  of  duties  after  a  given  period  (after  1  or  2  extensions  of  measures).  
Other  government  institutions  were  more  sceptical  and  referred  to  the  already  existing 
possibility  for  interested  parties  to  submit  applications  for  interim  reviews,  or  for  the 
Commission to ex officio launch such an interim review.  

EN 

109 

   EN 

 
 
 
 
 
 
 
 
 
Importers were overall positive towards combining expiry review with interim reviews. Some 
suggested that this ought to be done ex officio as part of price monitoring, as duties in some 
cases did not serve their purpose or were exaggerated in times of volatile commodity prices. 
Alternatively, interim reviews should be introduced already after the first 5-year-period. 

Business  Associations  from  some  countries  believed  that  continuously  changing  market 
conditions called for regular updates of the measures, whereas others believed that it was up 
to the stakeholders to request interim reviews whenever warranted. 

Union producers and their organisations, constituting some 80 % of all replies, were overall 
negative  to  such  a  proposal  and  referred  to  the  already  existing  possibility  for  interested 
parties to submit applications for interim reviews, or for the Commission to ex officio launch 
such an interim review. Some saw this as a way to weakening the current system and that any 
such move should be done only if agreed as part of a reform of the WTO Agreements or in the 
context  of  bilateral  trade  agreements.  A  few  followed  the  reasoning  of  the  importers,  i.e. 
duties should be adjusted so as to serve their purpose. 

2.5.3 Ex-officio interim reviews 

Q  2.5.3.1  Should  the  Commission  systematically  initiate  interim  reviews  of  measures 
when relevant anti-competitive behaviour has been identified? 

Q 2.5.3.2 Almost 50% of respondents said that this proposal would have an impact on their 
activities, 20% stated it would not. The remainder either didn't answer or did not know. 

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2.5.3.3 If  yes,  please  explain  how.  You  may  also  provide  additional  comments  on  this 
issue: 

All 7 government institutions that responded to this question were more or less positive to the 
initiative.  However  only  under  clear  conditions  and  with  various  degrees  of  involvement  of 
DG Competition should this, from a formal competence point of view, be appropriate.   

Importers  were  positive  towards  the  Commission  opening  ex  officio  interim  reviews  of 
measures when anti-competitive behaviour has been identified.  One party suggested that the 
Commission  also  could  open  expiry  reviews  ex  officio  if  Union  interest  calls  for  more 
competition in the market. 

The  Business  Associations  representing  Union  producers,  users  and  employers  differed  in 
their  opinion.  Some  stressed  that  the  ex-officio  reviews  should  only  be  opened  very 
exceptionally as a matter of principle.  Others stated that anti-competitive behaviour per se is 
illegal  and  should  be  addressed,  and  such  markets  should  not  be  protected  from  foreign 
competition in the first place. Overall, a very careful position to such initiative was identified. 

Union producers and their organisations, constituting some 80 % of all replies were hesitantly 
sceptical  towards  such  ex  officio  interim  reviews.  They  stressed  that  the  purpose  and  legal 
basis  of  TDI  and  EU  Competition  Law  are  different  and  serve  different  purposes  (and 
jurisdictions).  In  any  event,  anti-competitive  behaviour  can  be  addressed  under  the  Union 
interest test. Some claimed that if the outcome of such a review would be that measures would 
be  repealed  despite  findings  of  dumping,  one  anti-competitive  type  of  behaviour  would 
simply be replaced by another.  

Some  stressed  the  sequencing  of  the  Commission  combined  actions;  a  decision  on  the 
existence of a cartel must precede any ex officio interim review.  In any event, many thought 
that  ex  officio  interim  reviews  triggered  by  anti-competitive  behaviour  are  already  provided 
for in the Basic Regulations. One party asked for symmetry and reciprocity in this respect, i.e. 
a  decision  on  anti-competitive  behaviour  by  competition  authorities  in  third  countries  could 
trigger an ex officio interim review by the European Commission.  

VI  Codification 

Q 2.6.1 Registration of imports ex officio 

The vast majority of respondents support the proposal that registration of imports should also 
be possible on the initiative of the Commission ('ex officio'). 

Many respondents argue that registration and related threat of retroactive collection of duties 
help to fight circumvention and serve as a deterrent against exporters flooding the market with 
imports  in  anticipation  of  future  duties.  Some  responses  go  as  far  as  asking  for  mandatory 
registration of all imports of products under AD/AS investigations as of the day of opening 

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such investigations. They also reason that early registration of imports could help to improve 
the quality of import data during the investigation and contribute to more precise assessment 
of  the  market.  Some  argue  that  registration  of  imports  on  the  initiative  of  the  Commission 
would alleviate the bureaucratic burden put on the Union industry to ask for it, which is an 
improvement of particular importance for industries consisting of SMEs. Several respondents 
ask  for  more  clarification  on  practical  implications  of  the  proposal,  while  others  express 
conditional  support  making  it  clear  that  the  scope  of  registrations  on  the  initiative  of  the 
Commission should remain limited to new exporter reviews and anti-circumvention reviews. 

Only  a  small  number  of  respondents  oppose  the  proposal  and  maintain  that  it  would  create 
additional bureaucracy. Some of them propose to completely remove the possibility to register 
imports in  the context of an  investigation. Others argue that since the Union industry is the 
main beneficiary of measures, it is normal that in each case they should take the initiative by 
asking for the registration in line with the current text of the basic regulations. 

Q 2.6.2 Delete article 11(9) of the basic AD regulation and article 22(4) of the basic AS 
regulation 

Most  respondents  either  reject  the  proposal  to  delete  these  articles  or  express  the  need  to 
amend them rather than to delete them completely. 

Those  respondents  opposing  a  complete  deletion  of  the  articles  maintain  that  the  deletion 
would  decrease  transparency  and  predictability  in  the  use  of  different  methodologies  by  the 
Commission, thus adversely impacting legal certainty for interested parties. 

However, those respondents that support the deletion argue that it is precisely the current text 
that creates legal uncertainty, that the deletion would clarify the matters and allow the use of 
methodology most appropriate to assess actual market situation at the time of an investigation. 
These  two  opinions  go  in  line  with  a  major  proportion  of  responses  indicating  the  need  for 
further detailed reflection and discussion of the matter. 

Whereas many respondents point out that where there is a relevant change in circumstances, 
the  current  legislation  already  allows  a  change  to  the  methodology  in  subsequent 
investigations, many others suggest amending the legislation by defining, in a precise manner, 
those situations where the change of the methodology would be warranted. Many responses 
suggesting  amendments  include  a  proposal  that  in  review  or  refund  investigations  the 
Commission should use the methodology used in the initial investigation, unless, on a case-
by-case basis, it can be proved in a transparent manner that such a methodology has become 
inappropriate. 

Q 2.6.3 Ensure that exporting producers with a zero or de minimis dumping margin in 
an original investigation (as opposed to a review investigation) will not be subject to any 
review 

The majority of respondents agree with the proposal to modify article 9(3) of the basic Anti-
Dumping Regulation on the grounds that it is already de facto practice of the Commission as 
well  as  that  it    is  unquestionable  that  EU  should  follow  the  rulings  of  the  WTO  Appellate 
Body.  Some  add  that  changes  should  nevertheless  be  strictly  limited  to  those  necessary  to 
bring  the  basic  AD  regulation  in  compliance  with  the  ruling,  but  no  more.  Only  one 

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respondent  argued  that  the  changes  should  go  further  and  exclude  from  subsequent  reviews 
also  those  exporters  that  obtain  a  zero  or  de  minimis  dumping  margin  in  a  review 
investigation. 

However,  there  is  also  a  significant  number  of  respondents  opposing  the  proposal  because 
they are concerned that the exclusion of some exporters from reviews would encourage fraud 
and circumvention of AD measures. Some elaborate further that for certain third countries it is 
quite  common  that  when  AD  measures  are  imposed  on  some  exporters,  but  not  on  other 
exporters,  exporters  subject  to  AD  measures  try  to  circumvent  them  by  exporting  via 
exporters  that  are  exempt  from  AD  measures.  Knowing  that  they  would  not  be  subject  to 
subsequent reviews could encourage exporters exempt from AD measures to engage in such 
practices.  Even  respondents  who  generally  support  the  proposal  frequently  mention  that  the 
Commission  should  thoroughly  enforce  the  measures  by  not  allowing  such  circumvention 
practices and fraud to happen. 

Many  opponents  of  the  proposal  also  argue  that  all  exporters  should  be  subject  to  a  review 
investigation,  so  that  the  investigation  could  check  if  companies  with  a  dumping  margin  of 
less than 2% in the original investigation have not subsequently increased their dumping. A 
few responses suggest differentiating between exporters with a zero dumping, which should 
be excluded from subsequent reviews, and exporters with a dumping margin of less than 2%, 
which should remain subject to subsequent reviews.  

Q  2.6.4  Provide  the  possibility  for  exemption  also  to  related  parties  if  they  are  not 
involved in circumvention practices 

The vast majority of respondents support the proposal and deem it fair and justified. However, 
many of them also stress that first there must be proof beyond doubt that exporting producers 
and related companies in question are not involved in circumvention practices before they are 
exempted. Some of  them  add that the change of legislation should not create any loopholes 
for circumvention. 

Fears  of  possible  circumvention  are  the  main  reason  why  a  few  respondents  object  to  the 
proposal.  Many  respondents  refrained  from  making  any  comments  before  being  presented 
with the text of the proposed amendment.  

Q 2.6.5. Clarify the definition of "a major proportion" of the Union industry 

There were very diverse views on the proposal.  A few responses simply gave their support to 
the  proposal.    Others  supported  the  proposal  and  justified  it  in  order  to  clarify  and  sort  out 
grey areas of interpretation, ensure EU's laws compliance with WTO rules (proposing even to 
use the wording of the WTO agreement).  

Many parties argued that there is no reason to delete the reference to Article 5(4) of the basic 
Anti-Dumping Regulation, but rather a need to clarify what  is  meant  by  "major proportion" 
within Article 4(1). Some responses asked for a higher threshold, (30%, < 33%, or even 40%, 
were proposed). Other times the proposal was accepted under the condition that the relevant 
major proportion of the Union industry would not be lowered, and that the "major proportion" 

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could  not  remain  undefined.  It  was  also  proposed  to  clarify  the  percentage,  if  it  refers  to 
volume,  turnover  or  the  number  of  firms.  Other  times  it  was  proposed  that  the  threshold 
should  depend  on  the  type  of  market,  and  the  reference  to  Article  5(4)  in  Article  4(1)  be 
deleted and replaced by more comprehensive criteria (geography, raw materials used, share in 
employment, etc.). 

Other  respondents  expressed  the  view  that  the  25%  threshold  of  Union  production  should 
stay. It was proposed that Article 4(1) of the basic AD regulation and Article 9(1) of the basic 
AS regulation explicitly state that a 25% threshold has to be reached, and that the percentage 
used  for  the  definition  of  the  major  proportion,  should  be  the  one  considered  sufficient  to 
initiate the proceeding. 

Many respondents were, however, of the opinion that the minimum possible threshold should 
apply with regard to the ability to initiate complaints, given that all EU producers should have 
the right to defend themselves against injurious dumping and subsidisation. Other respondents 
were of the opinion that the percentage should be lowered to around 5%, that there should be 
no minimum percentage at all, or that it should be judged on a case-by-case basis. However, it 
was also argued that deletion of the threshold would make the case less transparent and clear. 

Many respondents argued that any modification should not lead to set a higher threshold but it 
should simply clarify what a "major proportion" is in compliance with the WTO report, and 
that, in any case, the Commission should provide stakeholders with the text of the proposed 
amendment. 

Finally, many respondents disagreed with the proposal. They considered it dangerous since it 
might lead to consider non-EU subsidiaries as part of the EU standing, or the dominance of 
producers having more importers' than producers' interests. In such cases, the reasoning went 
on,  the  EU  industry  could  easily  be  taken  hostage  by  the  related  companies  (representing 
exporting  interests  to  the  EU  and  imposing  their  own  economic  interests  derived  from 
dumped or subsidised exported products to the EU) and hence the investigation would risk to 
be biased. 

Q 2.6.6. Sampling provisions should refer to Union producers and not to complainants, 
except for the standing test 

A number of responses were received in favour of the proposal. These were justified on the 
basis that it would add clarity to the legislation, that there is no reason to treat EU producers 
differently, and that it would add statistical representativeness and reduce the risk of selection 
of samples skewed towards finding injury. 

Secondly,  another  response  widely  repeated  (the  most  repeated  similar  response)  was  in 
favour  of  the  suggestion,  but  only  in  case  the  reference  would  be  made  with  respect  to 
supporting and/or neutral Union producers, and never to Union producers who are against the 
investigation. One of these respondents argued that these would be considered in any case in 
the Union interest test. 

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However,  the  majority  of  the  respondents  were  against  the  proposal  or  expressed  that  the 
proposal would not lead to any substantial improvement in the perspective of modernizing the 
current  TDI  regime,  since  the  practise  already  applies  de  facto.  The  reason  argued  that  the 
reason  that  the  sampling  provisions  should  refer  only  to  the  complainants  is  mainly  the 
possibility to have companies that, not being complainants,  might not cooperate properly in 
the investigation, and might therefore delay it unduly. Some rare answers also argued that the 
sample should be representative of the country of reference that is suffering the dumping, and 
therefore, the complainants should only be represented in the sample.  

2.6.7. Clarify that the investigation of Union interest covers all Union producers and not 
only complainants 

Many responses were received in favour of the proposal. The justifications were that it would 
add  clarity,  it  would  sort  out  grey  areas  of  interpretation,  and  it  would  enhance 
representativeness and ensure cooperation when collecting evidence and data.  

Some  of  the  respondents  expressed  an  agreement  conditional  on  the  producers  being  100% 
EU  based  companies,  companies  that  physically  manufacture  the  like  product  within  the 
Union, not EU-based companies manufacturing elsewhere.  

However, the majority of the responses were against the proposed change. The reasons were 
mainly that since the Commission's practise already applies de facto, it would not lead to any 
substantial improvement in the modernisation of the current TDI's regime, and therefore there 
is no need to amend the Basic Regulations. The respondents explained that the principal party 
to the proceedings is the complainant industry and due regard must be made to this throughout 
the  proceedings  including  in  the  context  of  the  Union  interest.  Finally,  other  respondents 
argued that a reference to all Union producers would create a number of additional difficulties 
such as to investigate the reasons why certain manufacturers did not join the applicants or the 
relationship  of  the  non-complainants  with  related  exporters.  A  few  comments  were  also 
received in favour of repealing  the Union interest test as a  whole,  and  maintaining only the 
standard WTO requirements.  

VII  Any other areas where EU's rules or practice should be updated 

There was a clear consensus for the need to have easier proceedings for SMEs, and to support 
them, with proposals such as to allow national and European Associations to lodge complaints 
on behalf of their associates and to supply information on their behalf, even without formal 
written authorisation of the associate, and to support SMEs to lodge a complaint and to allow 
them  to  submit  it  in  their  own  language.  It  was  also  proposed  that  the  Commission  could 
initiate more ex-officio investigations in fragmented sectors comprised mostly of SMEs.  

Regarding  initiation,  some  associations  of  importers  suggested  that  consultations  with 
exporting  third  countries  at  an  early  stage  could  avoid  the  introduction  of  anti-dumping  or 
countervailing  measures.  It  was  also  argued  that  the  Commission  should  initiate  more  ex-

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officio investigations, particularly in respect of subsidies. Finally, some parties claimed that 
standing and de minimis thresholds should be increased.  

Different  views  were  reported  on  the  definition  on  the  Union  industry.  According  to  some 
opinions,  the  definition  of  the  Union  industry  and  Union  producers  is  too  narrow  in  the 
current Commission practise and it should consider other economic agents and producers that 
outsource and have global value chains. Other respondents, however, stated that TDI should 
uphold only our EU-based industry, defending EU producers' interests and SME's needs, and 
that  those  EU  companies  that  undertake  a  range  of  ancillary  functions  such  as  R&D  and 
design,  but  that  produce  elsewhere,  should  have  their  interests  reflected  only  in  the  Union 
interest test.  

Many opinions were received in favour of shortening investigations, for example, maximum 
12  months  (6  months  for  the  provisional  phase),  and  faster  imposition  of  provisional 
measures.  Many  responses  supported  the  retroactive  imposition  of  measures  and  that 
retroactivity should be addressed to allow more flexibility. It was also argued that the duration 
of anti-dumping measures should be aligned with the duration of anti-subsidy measures and 
when both are to be pursued they should be initiated in parallel.  

Many respondents argued that it is necessary to tackle distortions which underlie the dumping 
found, such as dual pricing policies and export bans on raw materials. Parties also argued that 
the  Commission  should  integrate  its  growing  intelligence  on  raw  materials  and  input  cost 
distortions, to try to identify them, and to use special rules, such as different profit margins 
per  sector,  not  applying  the  lesser  duty  rule,  product  scope  actions,  etc.  Other  times,  it  was 
requested to apply the same standards, as applied to EU producers. 

It also argued that no lesser duty rule should be applied in cases of non-cooperation, or when 
the minimum standards (environmental, social, etc.) are not met, and if the state influence is 
strong.  Some  parties,  however,  complained  about  the  lack  of  information  to  companies  in 
cases of non-cooperation, given how difficult it is sometimes for companies to cooperate. 

Many  parties  asked  also  for  more  clarity  on  the  rules  of  origin  applicable  to  TDI  practice. 
However,  views  differed  on  whether  to  use,  for  example,  the  same  approach  as  that  of  DG 
TAXUD for the non-preferential origins within the TDI legislation.  

It  was  also  argued  that  the  Union  interest  test  should  cover  wider  policy  issues.  One 
respondent argued that environmental costs should be considered when calculating dumping 
and injury margin and another one that there should be a discussion with DG Environment to 
assess impact on their sustainability initiatives. An association asked for consideration of not 
only  economic  dumping,  but  also  social  and  environmental  dumping,  and  even  dumping  in 
the services sector. Another association argued that the Commission should identify relevant 
user  associations  and  systematically  invite  them  to  participate  in  TDI  procedures  and  that 
users should have more time to assess investigations. Finally, another association claimed that 
questionnaires needed to be improved to ensure that all kinds of companies could participate. 

Many ways of making the process more clear and predictable for the parties were suggested. 
Some  parties  asked  the  Commission  to  draft  a  guide  on  how  to  take  part  in  a  TDI 
importers,  retailers  and 
informing  and  educating  unrelated 
investigation,  aimed  at 
associations. Other guidelines were suggested regarding sampling and investigation of Union 
producers.  The  latest  would  clearly  layout  the  legal  rights  of  the  Union  producers,  and  the 
information that can be requested during a verification visit. 

In circumvention cases where importers have no knowledge of the practice, a time scale of 10 
weeks was suggested when applying duties from announcement date unless it could be proven 

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that  the  importer  knew  or  could  have  reasonably  known  about  the  circumvention,  it.  Some 
associations of importers argued that such cases the backdating of duties seems unfair and that 
it should be limited to 2 months after the start of the investigation.  

Other means to increase transparency were also proposed, such as eliminating the possibility 
to accept confidential information or using an Administrative Protective Order (APO) system 
such  as  that  existing  in  the  US,  and  reporting  of  the  activities  of  the  ADC  to  the  interested 
parties.  One  party,  however,  claimed  that  the  confidentiality  treatment  in  practise  remains 
weak in some cases. Many parties insisted on making statistics available to all parties, even at 
10  digit  level,  and  not  to  oblige  the  complainants  to  estimate  them.  Other  parties  asked  for 
making  data  on  importers  subject  to  duties  transparently  available  in  Eurostat.  Improved 
transparency on price undertakings was also requested. 

There  were  other  suggestions  to  improve  the  proceeding.  An  association  argued  that  the 
method to determine a suitable "analogue country" in order to establish normal value in the 
case  of  non-market  economies  should  be  improved  and  that  the  10  days  currently  given  to 
parties to comment on the choice are insufficient. It argued also that the Commission should 
address  the  comments  received  after  imposition  of  provisional  measures  when  they  are 
received, and not in the definitive regulation, as it does now, when parties do not have time to 
react. The 10 days deadline for comments on a definitive disclosure is insufficient, according 
to this association, especially when disclosure is sent on a Friday. This deadline should be 20 
days, failing which, or in addition to, the deadline should start to count on the first working 
day  following  its  delivery  by  registered  mail.  Another  association  submitted  that  importers 
should be entitled to submit information for limiting the CN codes unnecessarily affected by 
investigations.  

Many parties argued that much stronger measures are necessary to detect/prevent fraud, and 
that the current anti-circumvention processes need to be improved. Parties also claimed that 
severity  and  swiftness  in  addressing  fraudulent  behaviour  or  circumvention  of  measures 
should be applied, for example, by imposing fines. It was also argued that there is a need to 
increase  the  human  and  budgetary  resources  needed  by  DG  Trade  H,  in  order  to  tackle  the 
growing complexities of cases. 

More  generally,  some  parties  argued  that  TDI  work  reasonably  well,  and  that  it  is  the  only 
means  to  ensure  fair  competition  in  the  absence  of  international  competition  laws  and  that 
they  will  be  even  more  necessary  in  the  future  because  of  the  accelerating  pace  of 
globalisation.  It  was  also  claimed  that  the  EU  should  take  into  account  the  poor  standards 
applied by other countries, in order to act in consequence. It was generally argued that there is 
a  need  to  improve  transparency  and  compliance  with  WTO  rules,  without  distorting  TDI's 
purpose,  and  that  the  process  should  be  impartially  run  and  its  outcome  debated  with  MS. 
Parties also claimed that the reform of "comitology" should not extend the length of AD/AS 
investigations nor provide further possibilities for political influence. For some parties, WTO 
negotiation's standstill and the increasing use of TDI worldwide should also be considered.   

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ANNEX 6 

Impact assessment steering group  
on the modernization of TDI  
draft minutes of the 4th meeting, 26 October 2012 

Participants:  Wolfgang  Mueller  'WM',  Eva-Maria  Sanchez,  Richard  James  'RJ',  Delphine 
Sallard  (TRADE),  Magdalena  Ruda  (EMPL),  Dimitros  Vardakis,  Andre'  van  Aken 
(TAXUD),  Hubert  van  Vliet,  Miguel  Franca  (LS),  Malgorzata  Galar  (ECFIN),  Dominique 
Lambert  (ENTR),  Eva  Valle,  Giovanni  Wang  (COMP),  Klaus  Blank  (AGRI),  Ana-Maria 
Petrescu, Daniele Westig (stagiaires)  

Introduction: 

The IASG met in order to discuss chapters 7 and 8 and the problem tree to be inserted before 
subchapter  3.2.  The  agenda  envisaged  also  the  discussion  of  comments  handed  in 
electronically  by  ENTR  and  EMPL  regarding  previous  chapters  and  the  point  on 
reimbursement  raised  by  DG  TAXUD.  The  floor  was  also  open  for  possible  changes  in  the 
previous chapters of the IA. 

Presentation of the Chapters 7 and 8 of the IA 

WM  presented  the  draft  of  the  two  chapters  and  participants  made  comments  as  he  went 
along. 

Chapter 7 – Impact assessment 

EMPL and RJ suggested including in the table at the beginning of the chapter also a column 
for  Option  1  to  better  highlight  the  possible  negative  consequences  of  the  of  'no  action' 
scenario  in  the  long  term.  The  paragraph  regarding  Option  1  should  also  be  amended 
accordingly.  

In the line concerning General Objective 2, in the column for Option 4, EMPL suggested to 
add a minus sign to show that there will be a negative social impact if this option is followed. 

The question was asked if Option 4 really merits a triple negative sign in the second line of 
the  'Impact'  box.  WM  explained    that  indeed  certain  proposals  in  this  option  such  as  the  6 
weeks  shipping  clause  or  taking  into  account  producers  who  have  outsourced  production 
when  defining  the  Union  industry,  would    significantly  change  the  balance  of  interests  in 
favour of importers and thus against Union producers.  

Chapter 8 – Monitoring and Evaluation 

TAXUD  confirmed  the  availability  of  weekly  data  under  their  import  surveillance,  which 
would be useful for the transparency and predictability indicator. 

In the last paragraph at the beginning of the third sentence "The year 2013 would be used as 
the benchmark year" was inserted. 

Problem tree 

Some drafting changes were suggested: 

•  Second  column  first  box  and  following:  the  wording  "lack  of  transparency"  is 

substituted by "suboptimal". 

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•  Box 3.1.6 "may be" was added before "denied". 

•  Box 3.1.14 was deleted (and its corresponding boxes on the right)  

•  Box 3.1.8.4 "incompatible" was substituted by "need to be clarified". 

• 

In the last column of boxes, in the first, the third, the fourth, the fifth the sixth and in 
the ninth box "claimed to be / is argued to be" was inserted in front of "insufficient". 

• 

In the box corresponding to box 3.1.1.7, "guidelines" was replaced by "guidance". 

•  The text in the box in the last column corresponding to box 3.1.6 was substituted by 

"There are too many obstacles for SMEs to initiate a proceeding". 

•  The  text  in  the  second  box  in  the  last  column  corresponding  to  box  3.1.5  was 

substituted by "The questionnaires are claimed to be too complicated".  

• 

In the box in the last column corresponding to box 3.1.12, "overall" was added after 
"no". 

Other comments 

First the comments submitted in writing by ENTR have been addressed: 
Sub-chapter 2.2.2: Redrafting of the 4th paragraph was accepted as suggested.  
 Regarding  subchapter  3.1.1.1,  4th  paragraph,  ENTR  evoked  that  the  information  from  the 
public consultation, as used here, was misleading since it did not give the complete picture. 
TRADE suggested to include a fuller explanation under chapter 6.2, 2nd paragraph.  

The title of sub-chapter 3.1.12 has been modified by substituting "can" to "could". 

Further  to  a  question  from  ENTRE,  WM  explained  that  regarding  subchapter  4.3.2  the 
wording  "in  particular"  was  used  to  show  that  not  only  Operational  objective  4.3.2.  "Fight 
against  retaliation"  aims  at  improving  cooperation  but  also  Operational  objective  4.3.4 
"Facilitating cooperation".   

Some of the changes proposed for subchapter 4.3.5 have been accepted. 
6th  paragraph  of  sub-chapter  6.1  will  be  redrafted  i.e.  no  more  mention  of  "Union 
producers…" 

Regarding sub-chapter 6.3, ENTR wondered whether it was helpful to state that the impact of 
TD  measures  is  small.    WM  explained  that  indeed  the  overall  economic  impact  of  TD 
measures is small since they affect only a small share of imports. However the existence and 
legal functioning of these instruments is important for stakeholders. An appropriate paragraph 
will be inserted at the beginning of chapter 6. 

The group then examined the written proposals made by EMPL. 

EMPL  underlined  the  importance  of  introducing  also  in  the  description  of  Option  1  a 
statement that, due to the shortcomings of the present day status, there may be negative social 
impacts in the future. 

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EMPL  pointed  out  an  inconsistency  regarding  the  description  of  Option  4,  which  at  the 
beginning  envisaged  two  sub-options,  but  which  were  not  reflected  in  the  subsequent  text. 
The text was changed as suggested by EMPL.  

EMPL  requested  also  a  clarification  regarding  the  possibility  for  trade  unions  to  lodge 
complaints, which has been added in the problem definition under 3.1.9. 

LS proposed several changes throughout the text in order not to give the impression that the 
present system is illegal or lacks legal justification.  

Finally, the concern expressed in writing by TAXUD was addressed. TAXUD re-iterated that 
in Option 3 regarding expiry reviews, they preferred the status quo. It was agreed that the text 
should be changed to reflect the administrative burden associated with reimbursement.  

Conclusive remarks 

With  this  meeting  the  IASG  has  concluded  its  work.  None  of  the  participants,  whom  WM 
thanked  for  their  constructive  and  precious  collaboration,  expressed  a  wish  for  further 
discussion. As this was the last meeting of the IASG, these minutes will be attached to the IA 
which will be sent to the IAB on 7th November.  

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ANNEX 7 

Codification of the basic regulations with regard to WTO and ECJ jurisprudence 

Annex  7  explains  the  details  of  the  proposed  targeted  legislative  changes  to  the  basic 
regulations as mentioned in the problem definition under 3.2.15. 

1.  Exporters with a dumping margin of less than 2% should not be re-investigated as part of 

a subsequent review 

According to the EU’s basic AD regulation, producers with a dumping margin of less than 2% 
in the original investigation are made subject to a duty rate of 0%; but they remain subject to 
the  proceedings,  and  may  be  re-investigated  in  any  subsequent  review  investigation. 
However, following a WTO dispute settlement ruling65, producers with a dumping margin of 
less than 2% may not be subject to any review investigation.66 

2.  The meaning in law of a "major proportion … of the total Union production" needs to be 

clarified 

An  AD  or  AS  investigation  may  not  be  initiated  unless  complainants  represent  a  "major 
proportion" of Union producers: producers must represent at least 25% of the total production 
of the product concerned in the EU.  

The basic regulations provide for maintaining the same threshold also for the injury analysis.  
However,  following  a  WTO  dispute  settlement  ruling  of  201167,  for  the  purposes  of 
demonstrating  injury,  a  "major  proportion"  during  the  investigation  does  not  automatically 
mean the 25% threshold used during initiation of a complaint.68  

65  

66  

67  

68  

Appellate Body Report WT/DS295/AB/R of 29.11.2005, Mexico – Definitive anti-dumping measures 
on beef and rice –complaint with respect to rice.  
Article 9(3) of the basic AD regulation requires that individual exporting producers that have a dumping 
margin of less than 2% will not be subject to any duties due to the "de  minimis" rule but "they shall 
remain subject to the proceeding and may be reinvestigated in any subsequent review carried out for the 
country concerned pursuant to Article 11." Following the WTO dispute settlement case between USA 
and Mexico, the WTO Appellate Body ruled that exporters that have a "de minimis" dumping margin in 
an original AD investigation should not be subject to any subsequent review investigations. The reason 
invoked by the WTO Appellate Body is that such a practice represents a violation of Article 5.8 of the 
WTO  Agreement  on  Implementation  of  Article  VI  of  the  General  Agreement  on  Tariffs  and  Trade 
1994. The basic AS Regulation contains similar provisions. 
DS397 of 15 July 2011 in European Communities – Definitive Anti-Dumping Measures on Certain Iron 
or Steel Fasteners from China.  
Investigations based on an industry complaint cannot be initiated if complainants do not meet the 25% 
threshold  of  initiation  (see  Article  5(4)  of  the  basic  AD  Regulation  and  10(6)  of  the  Basic  AS 
Regulation:  No  investigation  will  be  initiated  when  "Union  producers  expressly  supporting  the 
complaint  account  for  less  than  25%  of  total  production  of  the  like  product  produced  by  the  Union 
industry").  Article  4(1)  of  the  basic  AD  regulation  further  stipulates:  "For  the  purposes  of  this 
Regulation, the term 'Union industry' shall be interpreted as referring to the Union producers as a whole 
of  the  like  product  or  to  those  of  them  whose  collective  output  of  the  product  constitutes  a  major 
proportion, as defined in Article 5(4), of the total Union production of those products (…)" (emphasis 
added). Article 9(1) of the Basic AS Regulation contains similar text. However, the Appellate Body in 
DS397 of 15 July 2011 in European Communities – Definitive Anti-Dumping Measures on Certain Iron 
or Steel Fasteners from China ruled that the reference to a major proportion in Article 4(1) of the basic 
AD regulation in the context of the investigation, cannot automatically be equated with the minimum 
threshold of 25% set in Article 5(4) of the Basic AD Regulation, which refers to the initiation of a case. 

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3.  There is currently no explicit legal mechanism to exempt related companies from duties 

imposed following a circumvention investigation 

According  to  the  basic  regulations,  companies  that  can  prove  that  they  are  not  engaged  in 
circumvention practices will be exempted from any duties imposed following a circumvention 
investigation  –  unless  they  are  related  to  an  exporter  which  was  subject  to  the  initial 
investigation.  
In a recent case69 the Commission services had to deal with cooperating exporters who were 
bona  fide  producers  that  were  related  to  exporting  producers  in  the  country  subject  to  the 
initial  investigation,  but  who  had  clearly  not  been  circumventing  the  anti-dumping  duties 
themselves.  It  is  difficult  to  justify  an  exemption  of  a  related  exporter  from  the  anti-
circumvention duty even though he is not circumventing, when it is not explicitly provided for 
in the basic regulations.  70 

4.  Wording of the EU's basic regulations in respect of sampling provisions needs to be 

clarified in relation to WTO law 

In  cases  where  a  large  number  of  producers,  exporters  or  importers  cooperate  in  an 
investigation sampling may be applied. The current practice of DG Trade – which is also that 
required under WTO law – is to select a sample from all cooperating Union producers, and 
not just from complainants (which is what is in fact stated in the basic regulations71).  

69  

70  

71  

Thus, the Appellate Body rejected the linkage between both articles. The same applies by implication 
for Articles 9(1) and 10(6) of the basic AS Regulation. 
Implementing Regulation of the Council (EU) No 400/2010 of 26 April 2010 extending the definitive 
anti-dumping  duty  imposed  by  Regulation  (EC)  No 1858/2005  on  imports  of  steel  ropes  and  cables 
originating, inter alia, in the People’s Republic of China to imports of steel ropes and cables consigned 
from  the  Republic  of  Korea,  whether  declared  as  originating  in  the  Republic  of  Korea  or  not,  and 
terminating the investigation in respect of imports consigned from Malaysia, recitals 80 and 81. 
Article 13(4) of the basic AD regulation and Article 23(6) of the basic AS regulation have the role of 
ensuring  that  companies  which  are  investigated  in  anti-circumvention  procedures  and  can  prove  that 
they  are  not  engaged  in  circumvention  practices  will  be  exempted  from  any  imposition  of  AD/AS 
duties. The article in the Basic AD Regulation stipulates: "Where the circumventing practice, process or 
work  takes  place  outside  the  Community,  exemptions  may  be  granted  to  producers  of  the  product 
concerned that can show that they are not related to any producer subject to the measures and that are 
found not to be engaged in circumvention practices as defined in Article 13(1) and 13(2)." However, 
the provision does not fully reach its objective and does not fully correspond to the current practice of 
the Commission services. For the sake of illustration, let us consider two countries A and B with two 
related exporting firms. The firm in country A is subject to a measure. An anti-circumvention procedure 
is opened in order to find out whether the measure against country A is circumvented via imports from 
neighbouring  country  B.  The  related  company  in  country  B  is  investigated  in  this  anti-circumvention 
procedure. If the firm in country B is a genuine producer and not engaged in circumvention practices, 
the firm in country B should not be subject to any anti-circumvention measure.  
Article 17 of the basic AD Regulation and Article 27 of the basic AS Regulation allow the possibility to 
apply sampling in AD investigations.. Both regulations stipulate that sampling is carried out "[i]n cases 
where  the  number  of  complainants,  exporters  or  importers,  types  of  product  or  transactions  is  large 
(…)" (emphasis added).   

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5.  Provisions in the EU's basic regulations on who may submit information for the Union 

interest test do not correspond to current Commission practice  

Although the basic regulations specifically refer only to "complainants", information for the 
purposes of the Union interest test is in practice accepted not only from complainants but also 
from other Union producers.72 

6.  Provisions in the EU's basic regulations on registration of imports are not sufficiently 

clear 

According  to  the  basic  regulations,  registration  of  imports  normally  requires  a  request  from 
the Union industry. However, in cases of ex officio initiations by the Commission services and 
initiations of investigations for new exporters, the provisions for registration of imports need 
further clarification73.  

7.  Current TD regulations do not authorise the Commission services to apply different 

investigation methods in review or refund investigations from those used in the original 
investigation 

The basic regulations provide that the methodology used in the original investigation should 
also  be  used  in  review  or  refund  investigations.  In  certain  instances  this  has  led  to  the 
maintenance  of  old,  superseded  methodologies,  sometimes  involving  the  same  product  but 
different  countries.  This  may  lead  to  inadequate  treatment  between  companies  in  different 
countries,  and  creates  uncertainty  among  stakeholders  regarding  the  consistency  of  the 
institution's practice.74     

72 Information for the purposes of the Union interest test is accepted not only from complainants but also from 
other Union producers. However, Article 21(2) of the Basic AD Regulation and Article 31(2) of the Basic AS 
Regulation stipulate the following: "In order to provide a sound basis on which the authorities can take account 
of all views and information in the decision as to whether or not the imposition of measures is in the Community 
interest, the complainants, importers and their respective associations, representative users and representative 
consumer  organisations  may  (…)  make  themselves  known  and  provide  information  to  the  Commission.  …" 
(emphasis added). The provisions quoted above do not reflect the current practice of DG-Trade, as they would 
leave unaddressed the situation of producers in the Union that are not part of the complainants.  
73  Article  14(5)  of  the  Basic  AD  Regulation  and  article  24(5)  of  the  Basic  AS  Regulation  explain  that  the 
Commission services can "direct the customs authorities to take the appropriate steps to register imports, so that 
measures  may  subsequently  be  applied  against  those  imports  from  the  date  of  such  registration".  Thus, 
registration  of  imports  is  done  with  the  purpose  of  applying  measures  retroactively,  where  necessary.  This 
possibility is used only in limited circumstances like new exporter reviews or anti-circumvention investigations. 
According to the text of the Basic Regulations, the registration of imports should normally require a request by 
the  Union  industry.  The  current  regulations  leave  room  for  interpretation  in  ex-officio  anti-circumvention 
investigations,  i.e.  where  the  Commission  services  do  not  initiate  based  on  a  complaint  lodged  by  the  Union 
industry but on its own initiative and also in case of initiation of investigations of new exporters.  
74 In reviews and refund investigations the provisions of Article 11(9) of the Basic AD Regulation and Article 
22(4)  of  the  Basic  AS  Regulation  state  that,  "provided  that  the  circumstances  have  not  changed"  the 
Commission services will "apply the same methodology as in the investigation which led to the duty". However, 
the application of this provision has raised concerns and created uncertainties with respect to the interpretation of 
a relevant change in circumstances and the consistency of the practice of the Institutions. The aforementioned 
provisions  require  that  old  superseded  methodologies  continue  to  be  used  in  review  proceedings  when  such 
methods  are  no  longer  used  in  current  new  investigations,  possibly  concerning  the  same  product  but  new 
countries and accordingly creating discriminatory treatment between companies in different countries exporting 
the same product (please also refer to Evaluation study, volume 1, section 3.3.1). 

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8.  Procedures to be followed in cases where the EU courts overturn a TD regulation need to 

be clarified 

In certain cases, the EU courts find that a trade defence regulation was flawed  and must be 
annulled, although the flaw actually identified does not entail that no measures at all should 
have  been  imposed.  E.g.,  if  the  correct  methodology  had  been  used  by  the  institutions,  the 
case  might  still  have  led  to  the  imposition  of  an  antidumping  duty,  but  at  a  different  level 
from that which was actually imposed.  

Sometimes,  the  courts  explicitly  limit  the  extent  to  which  duties  imposed  must  be  reduced 
because of a flawed decision – if they can do so in a simple manner in the operative part of 
the judgment. However, this is not always possible, and then the court will simply state that 
the duty is annulled.  
In  such  a  situation,  fully  reimbursing  the  duty75  may  be  perceived  as  unjustified;  it  can  be 
argued, in particular, that it leads to insufficient protection of EU industry, unjust enrichment 
of the relevant importers, and inappropriate budgetary effects. Although the court has already 
ruled that an anti-dumping investigation can be resumed from the point at which an illegality 
occurred76, it might be useful to clarify the rules applicable in such a situation (this is already 
the case in some areas of Union law)77. 

75  

76  

77  

Even though the reimbursement will be limited to those importers who made their claims in accordance 
with applicable customs legislation, including the relevant deadlines. 
Judgement of the ECJ of 3.10.2000 in Case C-458/98 P, Industrie des Poudres Sphériques v Council, 
ECR [2000] I-08147, point 39. 
Council  Regulation  (EC)  No  139/2004  of  20  January  2004  on  the  control  of  concentrations  between 
undertakings (the EC Merger Regulation, Official Journal L 24, 29.01.2004, p. 1-22 , Article 10(5)). 

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