REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 37th Annual Report from the Commission to the Council and the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018
Date: 2019-03-27
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: anti-dumping measure, anti-subsidy proceeding, countervailing charge, import (EU), import restriction, originating product, surveillance concerning imports, third country, trade dispute

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 27.3.2019  COM(2019) 158 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 37th Annual Report from the Commission to the Council and the European Parliament  on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018 {SWD(2019) 141 final}  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

37th Annual Report from the Commission to the Council and the European Parliament  
on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade 
defence instruments by Third Countries targeting the EU in 2018 

EXECUTIVE SUMMARY 

This  37th  Report  gives  two  accounts  of  the  European  Union’s  (EU)  trade  defence  activity. 
First,  and  exceptionally  going  beyond  the  legal  obligations,  this  Report  specifically  takes 
stock  of  the  major  challenges,  developments  as  well  as  achievements  of  the  Juncker 
Commission  in  the  area  of  trade  defence.  During  the  60  years  of  history  of  the  EU’s  trade 
defence instruments (TDI), there was probably no period that was more challenging than the 
one between 2014 and 2019. Global overcapacity in steel significantly increased the requests 
for  trade  defence  measures.  The  Commission,  by  imposing  25  new  TDI  measures  on  steel 
during this period, made an important if not essential contribution to the viability and global 
competitiveness  of  the  European  steel  industry.  Moreover,  for  the  first  time  since  1994,  the 
EU  trade  defence  rulebook  was  updated  through  two  major  legislative  changes.  Those 
amendments  helped  to  ensure  that  EU  TDI  could  adequately  address  rampant  and  injurious 
dumping  and  subsidisation  more  effectively  and  efficiently.  The  Commission,  for  the  first 
time since 2002, initiated a safeguard investigation into steel products and imposed measures 
respectively.  As this  Report shows, the Commission's efficient,  firm  and balanced approach 
permitted the protection of EU jobs. It also sent a strong response to increasingly protectionist 
stances  by  some  trading  partners,  while  in  parallel  reforming  its  own  TDI  system  to  work 
even more effectively in the future.  

Second, this Report describes the EU’s anti-dumping (AD), anti-subsidy (AS) and safeguard 
activities as well as the trade defence activity of third countries against the EU in 2018. This 
part of the Report has been prepared pursuant to the updated provisions of Article 23 of the 
basic AD Regulation1 and Article 34 of the basic AS Regulation,2 as well as of Article 23 of 
the  basic  safeguards  Regulation.3  This  Report  is  accompanied,  as  in  previous  years,  by  a 

1  

2  

3  

Regulation  (EU)  2016/1036  of  the  European  Parliament  and  of  the  Council  on  protection  against 
dumped imports from countries not members of the European Union, OJ L 176, 30.6.2016, p.21. 
Regulation  (EU)  2016/1037  of  the  European  Parliament  and  of  the  Council  on  protection  against 
subsidised imports from countries not members of the European Union, OJ L 176, 30.6.2016, p.55. 
Regulation (EU) 2015/478 of the European Parliament and of the Council on common rules for imports, 
OJ L 83, 27.3.2015, p.16. 

1 

 
 
 
 
 
 
                                                 
Commission  Staff  Working  Document,  together  with  annexes,  providing  more  detailed 
information and statistics.  

In 2018, casework remained important with the imposition of measures in six new cases, the 
non-imposition of measures in eight new cases, and with an equally intensive activity in the 
review of existing measures as compared to 2017.  

Moreover,  2018  was  also  exceptional  in  that  depending  on  the  date  of  initiation  of  an 
investigation, a different TDI rule could  apply, which meant  the application of three sets  of 
rules in parallel.4  

This  Report  and  accompanying  Staff  Working  Document  are  publically  available  at: 
http://ec.europa.eu/trade/issues/respectrules/anti_dumping/legis/index_en.htm. 

4  

In  cases  initiated  from  8  June  2018,  both  the  rules  relating  the  new  calculation  methodology  and 
modernisation  (inter  alia  implying  a  shorter  investigation  period)  apply.  In  new  cases  and  expiry 
reviews  initiated  between  20  December  2017  and  7  June  2018,  the  rules  on  the  new  calculation 
methodology apply. For all other cases, the ‘old’ rules remained applicable. 

2 

 
 
                                                 
I. 

THE ACHIEVEMENTS OF THE JUNCKER COMMISSION 

I.1 

AN EU TDI SYSTEM APPLIED EFFECTIVELY - WITH VIGOUR AND MEASURE  

To  be  free,  trade  must  be  fair.  EU  trade  defence  is  the  cornerstone  of  the  EU's  action  to 
preserve fair trade conditions. At the same time, modern TDI ought to be adapted to economic 
realities  and  their  use  limited  to  what  is  necessary  to  remove  the  effects  of  injurious  and 
unfairly  traded  imports.  It  is  in  that  spirit  that  the  Commission's  "Trade  for  All" 
Communication5 has set out the priority goal of making TDI more effective and efficient.  

This  was  all  the  more  important,  as  throughout  its  mandate,  the  Juncker  Commission  dealt 
with  a  very  high  number  of  cases  of  unfair  imports,  many  of  which  were  critical  for  the 
European economy. In the period of November 2014 – December 2018, 170 TDI cases were 
initiated and 95 measures were applied in order to restore a level playing field. Of the latter, 
35 are new measures and the remainder are renewals or extensions of existing measures. 

The EU's TDI protect jobs and have thus a direct positive effect on the EU industrial fabric 
and  the  economy:  EU  TDI  measures  imposed  since  the  beginning  of  the  Commission's 
mandate effectively preserved more than 124.000 jobs.6 The steel sector benefited the most, 
with over 86.000 jobs protected. Overall, the EU measures which were in force at the end of 
2018 effectively protected 320.000 direct industrial jobs from unfair competition.  

The EU’s TDI bring relief to the EU industry at the least economic cost. Indeed, duty levels 
applied by the EU were lower than those imposed by other trade partners. For instance, duties 
on steel currently range on average from 29% to 45%, while the corresponding duty averages 
applied by the United States (US) is  54%  – 87%.7 One of the main reasons for these lower 
average  duties  in  the  EU  is  the  ‘lesser  duty  rule’  (LDR),  which  commands  that  either  the 
source  of  unfair  competition  (dumping  margin)  or  its  effect  (injury  margin)  -  whatever  is 
lower - should be remedied.8 Furthermore, the Commission only initiates investigations when 
they  are  necessary.  It  also  assesses  whether  TDI  measures  are  against  the  EU's  overall 
economic interest before imposing corrective measures. 

EU  TDI  measures  have  a  strong  remedial  effect:  in  most  cases,  already  during  the 
investigation,  but  certainly  after  imposition  of  measures,  dumped  or  subsidised  imports 
decrease considerably. The table below contains a sample of EU measures in force, showing 
their impact:  

5  

6  
7  
8  

Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions of 14 October 2015, Trade for All, 
Towards a more responsible trade and investment policy, COM/2015/0497 final. 
Source: EU regulations and formal industry complaints or review requests. 
Source: EU regulations and WTO.  
There are specific rules of calculating the injury margin in case of a distortion of raw materials prices, 
which  constitute  at  least  17%  of  the  cost  of  production  of  the  good.  In  the  case  of  subsidisation,  the 
LDR normally does not apply. 

3 

 
 
 
                                                 
Product under measures 

Origin 

Aluminium radiators 

Aluminium road wheels 

P.R. China 

P.R. China 

Ceramic tableware and kitchenware 

P.R. China 

Ceramic tiles 

Coated fine paper 

New and retreaded tyres for buses or 
lorries 

P.R. China 

P.R. China 

P.R. China 

Steel products (all measures) 

Various countries 

Steel products (cases initiated under 
the Juncker Commission) 

Various countries 

Sweetcorn in kernels 

Thermal paper 

     Source: Comext, EU regulations 

Thailand 

Rep. of Korea 

Decrease of dumped or subsidised 
imports from the origins concerned  
after imposition of measures  
(most recent imports data compared 
to imports in original IP)9 

-98% 

-38% 

-28% 

-84% 

-99% 

-81% 

-70%  

-89% 

-62% 

-91% 

Another example of the effectiveness of the EU’s TDI measures can be found in the Union’s 
response to the steel crisis, as detailed in section I.3 below.  

In  the  period  of  November  2014  –  November  2018,  the  EU  collected,  as  a  result  of  the 
imposition of measures, more than 1,5 billion EUR in anti-dumping or countervailing duties 
(CVD), which were all transferred to the EU budget. 

AD and AS measures must be reviewed five years after they have been put in place, if the EU 
industry wants to keep such measures beyond that period. From November 2014 to December 
2018,  the  Commission  initiated  52  expiry  reviews  of  EU  measures.  Such  expiry  reviews 
allow to compare the situation of the EU industry at the time of imposition of the measures 
and five years later.  The Commission can maintain measures if it finds in an expiry review 
that there would be a likelihood of a continuation or recurrence of dumping/subsidisation and 
injury  should  the  measures  be  repealed.  The  EU  industry  requests  expiry  reviews  in  about 
75% of cases.10  

9  

10  

Data  on  imports  in  the  original  IP  (investigation  period)  is  compared  to  imports  between  November 
2017  and  October  2018.  In  the  case  of  ‘Tyres’,  the  data  available  after  imposition  of  measures  (six 
months)  was  extrapolated  for  the  comparison.  See  Commission  Implementing  Regulation  (EU) 
2018/1579 of 18 October 2018 (OJ L 263, 22.10.2018, p.3). 
Commission’s own data 

4 

 
 
     
 
 
 
                                                 
Chosen examples of expiry reviews as a measure of TDI efficiency 
The  expiry  review  of  measures  on  ceramic  tiles11  is  one  of  the  many  cases  illustrating  how  EU 
measures  have  been  effective  in  securing  the  long-term  viability  of  the  EU  industry.  Before 
measures were imposed to put an end to Chinese dumping practices, Chinese imports threatened the 
very  survival  of  the  EU  ceramic  industry:  profits  went  down  to  just  break-even  point,  and 
investments and employment declined equally considerably. The imposition of measures improved 
the  situation:  the  EU  industry  went  back  to  profitability;  productivity  and  investments  increased 
considerably. In a sector constituted in majority by SMEs, such trend in investments is key to permit 
EU businesses to thrive, as they are in constant need to modernise their equipment in order to follow 
market  trends.  Thanks  to  the  measures,  employment  also  stabilized  at  a  significant  number  of  ca 
60.000  employees  (even  if  this  was  lower  than  before  dumping  started).  That  said,  despite  these 
positive developments, measures had to be maintained because of the massive spare capacities and 
aggressive pricing of Chinese exporters. The review found that, without measures, there would have 
been a sizeable risk that the Chinese unfair export practices would have restarted with a consequent 
negative impact on the EU industry.  

Measures on bicycles from China are another notable example of TDI effectiveness. Measures were 
first imposed in 1993 and a series of subsequent expiry and interim reviews concluded each time that 
these measures were still necessary in order to fend off Chinese injurious dumping. It can reasonably 
be  argued  that  today  the  EU  bicycle  industry  would  not  have  existed  absent  the  AD  measures.  In 
other countries, where measures were not imposed or lapsed, Chinese exporters had taken over the 
quasi-totality of the domestic market. Investigations have repeatedly found that the Chinese excess 
capacity  is  very  important  –  the  latest  investigation  established  a  spare  capacity  25%  higher  than 
total  EU  consumption  and China  had  seemingly  attempted  to  make  full  use  of  this  capacity.  As  a 
result, the EU had to stop in 2013 a large-scale circumvention scheme of the AD duties imposed on 
Chinese  bicycles  imports  via  Indonesia,  Malaysia,  Sri  Lanka  and  Tunisia.  This  allowed  the  EU 
industry to return to modest yet sustained profits, as shown in the request for an expiry review that is 
currently ongoing.  

The  continued  existence  of  the  EU  bicycle  industry  has  structural  effects  on  the  EU  economy. 
Without a functioning EU bicycle industry, the EU bicycle parts industry would not exist. Nor could 
Europe  have  developed  an  important  new  market,  i.e.  the  electric  bicycle  industry  that  still  has  a 
significant growth potential. In the EU, 11.000 jobs are directly related to bicycle production, 16.000 
jobs  to  the  production  of  bicycle  parts  and  3.600  jobs  to  electric  bicycles.  In  January  2019,  the 
Commission  imposed  definitive  AD  and  AS  measures  against  imports  of  electric  bicycles  from 
China. It was found, that the Chinese electric bicycle exporters benefitted from massive subsidies. 
Prior to the TDI measures on aluminium road wheels from China,12 the situation of the EU industry 
had  deteriorated  due  to  dumped  Chinese  imports,  as  evidenced  for  instance  by  a  decrease  in 
production and sales volumes and heavy loss-making situation. Five years after the imposition of the 
AD duties, the situation had improved considerably. The EU industry was able to recover and show 
good  profits,  growing  in  line  with  the  market.  Chinese  imports  decreased and the  market  share of 
Chinese imports went down nearly 75%. The measures maintained a healthy competition in the EU 
market, as the market share of third countries suppliers recovered, thus allowing for a broader supply 
of products, not unfairly priced. The EU industry increased its sales and production by 28% and 25% 
respectively  and  had  created  1.200  new  jobs  (an  increase  of  10%).  It  increased  its  production 
capacities to meet the growing demand and to upgrade its product range. However, the measures still 
needed to be maintained, as otherwise Chinese exporters would have returned on the Union market 
with large quantities at low and dumped prices: the downward cycle would have started again for the 
EU industry. 

11  

12  

Commission Implementing Regulation (EU) 2017/2179 of 22 November 2017 (OJ L 307, 23.11.2017, 
p.25). 
Commission Implementing Regulation (EU) 2017/109 of 23 January 2017 (OJ L 18, 24.1.2017, p.1). 

5 

 
 
 
 
                                                 
Globalisation of trade has led to greater possibilities for circumventing or otherwise reducing 
the  effectiveness  of  TDI  measures.  For  that  reason,  the  Commission  has  been  constantly 
monitoring  import  statistics  in  order  to  detect  possible  circumvention  of  measures13  or  duty 
absorption.14  To  remedy  such  situations,  between  November  2014  and  December  2018,  the 
investigations,  and 
Commission  opened  14  anti-circumvention  or  anti-absorption 
consequently  extended  existing  measures  in  14  cases  to  other  countries  or  products  to 
preserve the measures' desired effect. 

Finally yet importantly, in order to judge on how the TDI measures fulfilled their goals, the 
Commission  remained  in  constant  contact  with  all  key  stakeholder  organisations  affected 
by  trade  defence  measures  in  order  to  assess  their  effect.  Regular  meetings  were  held  with 
business  representatives  and  other  stakeholders,  including  to  inform  and  to  discuss  the  TDI 
legislative reforms, feeding in as much as possible various stakeholders’ concerns. 

I.2 

A SYSTEM RESHAPED FOR EVEN MORE EFFECTIVENESS AND CERTAINTY 

Modernisation 

The core of the EU’s TDI rulebook dates  from the end of the Uruguay Round negotiations. 
Attempts  to  modernise  the  basic  Regulations  were  as  early  as  in  2008.  Yet  it  is  under  the 
current  Commission  that  the  necessary  modernisation  changes  were  eventually  brought  to  a 
successful  end.  It  was  not  least  because  new  global  market  realities  and  a  rising  wave  of 
unfair  trade  practices  clearly  demonstrated  the  urgent  need  for  additional  effectiveness  and 
certainty.  After  the  Council  and  the  European  Parliament  reached  an  agreement  on  the 
Commission's  proposal  on  5  December  2017,  the  modernised  rules  entered  into  force  on  8 
June  2018.  This  major  step  forward  has  made  the  EU's  trade  defence  instruments  more 
effective, transparent  and more adapted to face the challenges of the global economy, while 
responding to the needs of the full range of stakeholders, namely interests of EU producers, 
importers and downstream users.  

The modernised EU legislation provides for many changes. It introduced an improved injury 
margin calculation, which is central to the application of the LDR, one of the key features of 
the  Union’s  TDI.  The  non-injurious  price  calculation  was  updated  in  order  to  better  reflect 
current economic realities. This includes a minimum profit of 6% as well as the possibility to 
reflect  the  investments  and  R&D  needs  of  the  Union  industry  when  calculating  the  injury 
margin. Moreover, the new rules can take account the existence of raw materials distortions, 
which more and more plague today's commercial exchanges.  

For  the  purpose  of  higher  efficiency,  a  shorter  timeframe  for  the  imposition  of  provisional 
measures was adopted – these measures must now be adopted normally within seven months, 
but  not  later  than  within  eight  months,  while  it  took  previously  nine  months.  Thus,  the 

13  

14  

Circumvention is defined as a change in the pattern of trade between third countries and the EU which 
stems  from  a  practice,  process  or  work  for  which  there  is  insufficient  due  cause  or  economic 
justification other than the imposition of the antidumping or counterveiling duty. 
Absorption  might  occur  when,  after  the  original  investigation  period  and  prior  to  or  following  the 
imposition  of  measures,  export  prices  have  decreased  or  that  there  has  been  no  or  insufficient 
movement in the resale prices or subsequent selling prices of the imported product in the EU. 

6 

 
 
                                                 
European industry will get quicker relief from unfair competition. Also, in order to go further 
in ensuring transparency in proceedings, and to allow economic operators to adapt earlier to 
measures, the EU introduced a pre-warning mechanism on the imposition of provisional AD 
and AS measures. No other TDI jurisdiction operates such a system.  

Another key element that the Commission sought to achieve was bringing TDI closer to the 
needs of smaller companies: in line with this, EU SMEs will receive additional support when 
considering or being affected by TDI measures.  

Finally, for the first time, trade defence law allows the Commission to take into account social 
and  environmental  aspects  in  countries  under  scrutiny  in  a  number  of  well-defined 
circumstances. This applies in particular in relation of the LDR when it comes to determining 
the  injury  margin.  This  new  approach  responds  to  a  widespread  concern  held  by  many 
institutional stakeholders and large parts of the public that an open trade policy can only be 
built on sustainable trade that respects a minimum number of shared values. 

New dumping calculation methodology and strengthened AS instrument 

On  20  December  2017,  the  EU's  basic  Regulations  were  amended,  on  a  proposal  from  the 
Commission,  to  better  tackle  new  economic  realities.  This  legislative  change  is  a  major 
overhaul of the EU’s TDI. First, the amendment introduced a new methodology to calculate 
the normal value of goods subject to investigation,  in case of significant distortions induced 
by the authorities of the exporting country. Such distortions can exist in a country as a whole 
or in a given sector: the new rules are without prejudice to the treatment of any country as a 
market  or  non-market  economy.  To  allow  stakeholders  to  make  their  case  concerning 
countries where distortions exist, the Commission can publish reports on identified country or 
sectoral distortions. The first such report concerned China,15 as it has been so far the country 
most subject to the EU's trade defence activity. The Commission also announced that the next 
country report would concern Russia.16 

Second,  new  amendments  have  also  strengthened  the  AS  instrument.  It  allows  the 
Commission to better capture the full magnitude of subsidisation by making it possible to also 
address  subsidies identified only in  the  course of an investigation.  This  change is  important 
because foreign governments increasingly provide subsidies in a non-transparent manner and 
in violation of the World Trade Organization (WTO) rules on the notification of subsidies. 

I.3 

A SYSTEM EFFECTIVELY TACKLING EMERGING GLOBAL CHALLENGES 

Over the last few years, the importance of TDI has been growing as these instruments proved 
essential in addressing global trade challenges. 

Due  to  the  trade  spillovers  of  Chinese  overcapacity,  the  European  steel  industry  suffered 
severe losses over the period 2013 – 2016. The policy response was swift and comprehensive, 

15  

16  

Commission  Staff  Working  Document,  On  Significant  Distortions  in  the  Economy  of  the  People’s 
Republic of China for the Purposes of Trade Defence Investigations, 20 December 2017, SWD(2017) 
483 final/2. 
At the time of publication of this Report, the country report on Russia was still in preparation. 

7 

 
 
                                                 
with  a  Communication  issued  in  March  201617  laying  out  a  wide  swathe  of  measures, 
encompassing – crucially – trade policy.  

In terms of TDI, the response was twofold. In the years 2014-2018, the EU imposed 25 new 
measures  covering steel  products  (out of all 35 new TDI measures) with  the aim to  remove 
the  injurious  effects  of  dumped  and  subsidised  imports  and  restore  fair  trading  conditions, 
thus contributing to the recovery of the sector. Moreover, the EU took a number of steps to 
better  protect  the  steel  industry  in  the  trade  defence  domain  through  import  surveillance, 
accelerated  investigations,  the  opening  of  investigations  based  on  threat  of  injury  (where  it 
was justified), or the application of definitive duties retroactively, where warranted.  

These steps had a significant impact: steel imports of products covered by measures adopted 
in  the  years  2014  -  2017  decreased  by  more  than  95%  on  average  when  compared  to  the 
volume  of  imports  before  the  measures  were  imposed.  Imports  were  no  longer  competitive 
once the unfair element of these imports, i.e. dumped or subsidized prices, was neutralised by 
TDI measures. In critical steel products, where the EU user industry depends on imports, such 
as  hot  rolled  coils,  the  dumped  or  subsidised  imports  were  replaced  by  imports  from  other 
sources,  for  which  there  was  no  evidence  of  unfair  pricing  at  the  time.  By  neutralising 
dumped or subsidised imports, the TDI measures restored a level playing field, not just for the 
EU producing industry, but also for other third country suppliers, thus allowing EU users to 
continue enjoying diversified sources of supply. 

2017 brought first tangible signs of a recovery for the steel sector, and this was in part due to 
the  imposition  of  TDI  measures  by  the  Commission.  However,  the  EU  steel  industry 
continued to be vulnerable and injured by dumped and/or subsidised imports. This is caused 
notably by the global overcapacity in steel.   

In that context, the year 2018 brought further challenges in the trade area  that required a 
swift but measured response by the Commission. On 23 March 2018, the US imposed a 25% 
import  duty  on  steel  products.  The  EU  deemed  these  measures  not  legally  warranted,  and 
responded resolutely to these trade-disrupting moves. In a three-pronged action – in addition 
to  a  challenge  of  the  US  measures  under  the  WTO  dispute  settlement  system,  and  the 
imposition of rebalancing measures – the Commission took trade defence action by initiating 
a safeguard investigation, the first one since 2002. Indeed, as a result of the US duties, global 
suppliers started to  divert  some of their exports from  the US  to  the EU.  In order to  avoid  a 
further  sharp  increase  of  imports  that  threatened  to  worsen  the  already  fragile  economic 
condition  of  EU  steel  producers  (due  to  global  overcapacity),  the  Commission  adopted 
definitive  safeguard  measures  erga  omnes.18  The  measures,  in  the  form  of  tariff  rate  quotas 
will  maintain  traditional  trade  flows  and  the  diversity  of  sources  of  supply  the  EU  user 
industry needs, while protecting the EU producing industry against trade deflection. 

The  Commission  also  stepped  up  its  fight  against  trade-distorting  subsidies  by  third 
countries. In particular, subsidies contributing to overcapacity can prove highly distortive and 

17  

18  

Communication from the Commission to the European Parliament, the European Council, the Council, 
the  European  Economic  and  Social  Committee,  the  Committee  of  the  Regions  and  the  European 
Investment  Bank  of  16  March  2016,  Steel:  Preserving  sustainable  jobs  and  growth  in  Europe, 
COM(2016) 155 final. 
Commission Implementing Regulation (EU) 2019/159 of 31 January 2019 (OJ L 31, 1.2.2019, p.27). 

8 

 
 
                                                 
often result in spillovers of excess production onto export markets. Such subsidisation often 
has de facto effects that are similar to export subsidies, the latter being prohibited under WTO 
rules.  Between  November  2014  and  December  2018,  the  Commission  opened  25  AS 
investigations  and  imposed  newly,  extended  or  prolonged  12  AS  measures.  In  many  cases, 
investigation findings  pointed to  relatively high levels  of subsidisation, which were a  rather 
rare  occurrence  in  previous  periods.  To  name  but  a  few,  CVD  of  significant  amounts  were 
imposed  on  hot  rolled  flat  steel  products  from  China  (CVD  of  up  to  35,9%)  or  tyres  from 
China (CVD of up to 51,08%). Due to the increasing importance of tackling the problem of 
subsidisation by third countries, the Commission released a special subsidies database aimed 
at  providing  more  transparency  about  foreign  subsidies  schemes.  The  database  is  now 
published  on  the  Commission's  website19  and  updated  regularly.  In  that  respect,  it  must  be 
noted that WTO Members are legally obliged to notify their subsidies to the WTO. However, 
many WTO Members do not  comply or comply only partially with  this obligation. The EU 
has  been  systematically  taking-up  these  instances  of  non-compliance  in  the  WTO  Anti-
Subsidy  Committee.  Moreover,  it  has  commissioned  studies  that  examine  subsidisation  by 
foreign  governments,  notably China. Those studies will be made publicly available  so as to 
compensate for the lack of transparency of foreign subsidies schemes. 

I.4 

A STRONG ENGAGEMENT TO DEAL WITH THIRD COUNTRY ACTIONS 

As part of the Commission’s efforts to ensure fair trade conditions for European industry, 
the Commission  also  intervened when third  countries intended to  impose unwarranted trade 
defence measures  against  EU exports. The trade defence activity  around the globe has been 
continuously  on  the  rise  since  2014,  and  reached  an  all-time  high  in  2018,  when  the 
Commission  services  intervened  in  around  70  foreign  trade  defence  investigations.  These 
interventions consisted of written submissions and participation in hearings at technical level 
in  the  context  of  on-going  investigations.  Where  necessary,  the  Commission  also  made 
political interventions.  

The  objective  of  such  steps  is  to  make  sure  rules  are  respected  and  abusive  use  of  TDI  is 
avoided.  In  this  way,  the  Commission’s  actions  prevented  many  unwarranted  measures. 
Notable examples include the following:  

(1) The US opened investigations against imports of large civil aircrafts from Canada. This 
case  indirectly  affected  the  EU  as  it  involved  an  EU  company  producing  wings  for  the 
Canadian  aircraft.  Any  measures  could  have  directly  endangered  ca.  4.000  EU  jobs.  The 
Commission made several interventions during the US investigation pointing to the clear 
WTO inconsistencies of the case. In particular, it focused on the lack of injury of the US 
industry. That argument led to the termination of the US investigation in January 2018.  

(2)  The  Commission  successfully  intervened  in  the  Turkish  safeguard  investigation  on 
tyres,  potentially  affecting  EU  yearly  exports  of  450  million  EUR:  the  Commission 
intervened persuasively and measures were avoided.  

(3)  The  Commission’s  action  was  also  successful  in  the  AD  investigation  regarding 
imports of coated paper conducted by  India (export value around 110 million EUR). The 

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http://trade.ec.europa.eu/doclib/html/157607.htm  

9 

 
 
                                                 
Commission intervened numerous times, with the involvement of the EU Delegation, and 
ultimately a direct intervention by Commissioner Malmström with the Indian government. 
The case was terminated without imposition of measures. 

(4) The Australian AD investigation concerning imports of canned tomatoes from Italy, a 
case on which the Commission was active for several years (initial measures were imposed 
in 2014 and 2016, on exports worth then ca. 60 million EUR) saw a positive development 
in 2018. The Australian review panel confirmed that any direct support measures provided 
to  Italian  tomato  growers  did  not  have  any  distortive  effects  and  no  “particular  market 
situation” existed in the Italian tomato market, closing the case definitively.  

(5)  The  Commission  intervened  in  the  AD  review  investigation  conducted  by  the  US, 
regarding imports of uncoated paper from Portugal (export value of ca. 140 million EUR). 
After  the  Commission’s  intervention,  the  final  duty  of  37%  was  reduced  to  1,75% 
(similarly to another intervention in 2016, with a reduction from 29% to 7%). 

(6)  The  Commission  intervened  in  the  AD  investigation  by  Colombia  into  frozen  fries 
from the EU. As a result, the number of companies impacted by the duties was reduced and 
the duty levels decreased. However, the measures remain problematic and the Commission 
is  considering  further  steps  in  order  to  remove  the  measures,  such  as  further  bilateral 
interventions, or a possible action in the WTO. 

The Commission has also resorted in many cases to WTO dispute settlement procedures in 
order  to  obtain  the  removal  of  unwarranted  measures.  Such  was  the  case  for  Russian  AD 
duties  on  light  commercial  vehicles  from  Germany  and  Italy,  where  eventually  Russia  was 
found  to  violate  its  obligations  under  WTO  rules,  and  consequently  did  not  prolong  the 
measures.  

During  the  Commission’s  mandate,  the  negotiations  of  free  trade  agreements  provided  an 
opportunity to agree with our partners on common disciplines in trade defence proceedings. 
The latter included increased transparency when conducting investigations and guaranteeing a 
balanced approach in the application of duties. This was achieved, for example, by promoting 
the  application  of  the  LDR,  where  possible,  and  by  taking  into  account  the  interests  of 
importers and downstream users. Such provisions are now part of our agreements with Korea 
and Japan and are under negotiation with other partners. 

I.5 

A MORE TRANSPARENT SYSTEM 

While  the  WTO  rules  only  establish  minimum  requirements,  this  Commission  has  taken  a 
number  of  transparency  initiatives  to  make  the  TDI  system  more  effective,  inclusive  and 
informative for those concerned. As a result, the Commission operates now a dedicated web 
platform  (TRON)  that  allows  for  better  and  easier  information  exchanges  with  interested 
parties.  It  gives parties uninterrupted access  to  the non-confidential  investigation files, for a 
more effective defence of their rights. With regard to transparency towards the general public, 
since  May  2016,  the  Commission  systematically  publishes  on  its  website  non-confidential 
executive summaries of all complaints or requests for review. In addition, going beyond the 
Commission’s  own  commitments  set  out  in  the  “Trade  for  All”  Communication,  since  1 
August 2017, TDI services provide each interested party subject to a verification visit with a 
report  of  the  visit.  A  non-confidential  version  of  such  report  is  also  included  in  the  file, 
accessible to other interested parties. The outcome of the verification visits can prove critical 

10 

 
 
for  the  findings  in  relation  to  certain  companies,  and  such  move  can  contribute  to  avoid 
unnecessary litigation.  

The Commission is also finalising the implementation of yet another element facilitating the 
public's insight into trade defence proceedings, by enabling the publication on its website of 
information about companies' requests for refunds and the related investigations. 

11 

 
 
II. 

TDI ACTIVITY IN 2018 

II.1 

INVESTIGATIVE ACTIVITY  

II.1.1  General overview 

At the end of 2018, the EU had 93 definitive AD measures and 12 countervailing measures in 
force.20 This constitutes a slight decrease as compared to the previous year. 

Investigative work remained at a high level, reaching nearly that of 2017. The work consisted 
mainly  of  new  investigations  under  new  sets  of  TDI  rules,  as  well  as  of  a  still  significant 
number of reviews. At the end of 2018, 45 investigations were ongoing, as well as six refund 
investigations covering 99 refund requests. 

A more detailed overview of the TDI legislation and information on annual activity is given in 
the Staff Working Document and its relevant annexes accompanying this report. 

II.1.2  AD and AS investigations (see Annexes A through I) 

In  2018,  10  new  investigations  were  initiated.  Provisional  duties  were  imposed  in  two 
proceedings. Four cases were concluded with the imposition of definitive duties, while eight 
investigations were concluded without measures.  

Review investigations  continued to  represent  a substantial  part of the casework.  In 2018, as 
many  as  17  expiry  review  investigations  were  initiated  and  seven  expiry  reviews  were 
concluded  with  a  confirmation  of  the  duty.  No  expiry  review  was  concluded  by  the 
termination of measures. During 2018, four measures expired automatically. 

Three interim reviews were initiated. Four interim reviews were terminated without amending 
the measures, and two were concluded with an amendment.  

Finally,  in  2018,  three  reinvestigations,  which  usually  concern  the  implementation  of  court 
rulings, were initiated. Five such reviews were concluded. 

II.1.3  Safeguard investigations (see Annex L) 

In 2018, the EU initiated  three safeguard investigations – one  erga  omnes  on steel  products 
and two bilateral ones against Cambodia and Myanmar on Indica rice, under the rules of the 
EU’s Generalised Scheme of Preferences.  

II.1.4  Verification activities  

In the course of its investigations, the Commission carries out visits to examine the records of 
companies  or  associations  with  the  aim  to  verify  the  information  provided  during  the 
proceedings. During 2018, EU TDI services made 167 such visits, which amounted to 1978 
man/days of verification work.  

20 

The measures are counted per product and country concerned, without extensions. 

12 

 
 
                                                 
II.2 

ENFORCEMENT OF MEASURES (see Annexes J, K, M, Q) 

As stated above, it is paramount to ensure the effective implementation of measures imposed. 
One of the key activities to ensure that measures are not evaded through duty absorption  or 
circumvention. In 2018, one anti-absorption review was initiated but was still on-going at the 
end of the  year.  No other anti-absorption review  was concluded.  In addition, while no  anti-
circumvention  investigation  was  initiated,  two  such  investigations  opened  in  2017  were 
concluded in 2018 without the extension of duty. 

Monitoring of undertakings also forms part of the enforcement activities. At the beginning of 
2018,  three  company  undertakings  were  in  force.  No  new  undertaking  was  accepted  during 
the year. Therefore, three undertakings remained in force at the end of 2018.  

Finally,  with  regard  to  the  implementation  of  measures,  the  Commission  works  in  close 
cooperation  with  OLAF.  As  usual,  in  2018,  the  Commission  provided  OLAF  with  all 
information and evidence relating to any illegal activity related to TDI.  

II.3 

SMALL AND MEDIUM SIZED ENTERPRISES (SMES)  

During 2018, in the context of TDI modernisation, the Commission launched an initiative to 
help SMEs affected by TDI, both within the EU and in third countries. A dedicated webpage 
was set up. It brought together in one place advice for companies, sample questionnaires as 
well  as  a  comprehensive  guide  on  how  to  manage  the  process  of  investigations.  This  is 
complementary  to  the  SME  Helpdesk,  which  continues  to  help  SMEs  seeking  information 
regarding the trade defence instruments. Queries to the helpdesk during the year ranged from 
general  information  requests  regarding  the  nature  of  trade  defence  instruments  to  more 
targeted case-related queries. 

II.4 

 SOCIAL AND ENVIRONMENTAL STANDARDS 

When the new methodology of normal value calculation applies, the Commission chooses an 
appropriate representative country to construct the normal value of a product. It should then 
base its choice on an assessment of the adequate level of social and environmental protection 
in the countries at stake when there is more than one such country. The Commission would 
therefore check, in new investigations and expiry reviews initiated after 20 December 2017, in 
particular whether relevant international conventions have been ratified. 

A description of how social and environmental protection standards are considered and taken 
into account  in  TDI investigations  can only be  referenced in  the future annual  reports, after 
investigations  have  reached  provisional  or  final  conclusions.  None  of  the  on-going 
investigations  using  the  new  methodology  has  yet  reached  that  stage  –  results  will  only  be 
available in the next annual report. 

Moreover,  since  the  entry  into  force  of  modernized  TDI  rules,  when  the  Commission 
calculates the target price of a product, it also reflects actual or future costs of production of 
EU  companies,  which  result  or  would  result  from  the  application  of  multilateral 
environmental  agreements  (and  their  protocols),  as  well  as  of  certain  International  Labour 
Organisation conventions. Since 8 June 2018, the Commission has therefore started to apply 

13 

 
 
the  latter  rule  in  its  investigations.  In  this  case,  too,  given  that  none  of  the  on-going 
investigations where this would be an issue reached the provisional or final stage yet, the next 
annual report will consequently refer to such cases. 

II.5 

JUDICIAL REVIEW BY EU COURTS  

In 2018, the General Court (GC) and the Court of Justice (CJ) rendered 26 judgments in the 
TDI area: the GC handed down ten judgments and the CJ decided on 12 appeals and rendered 
four preliminary rulings. Pertinent judgments are described in Annex S. 

Fifteen new cases were lodged in 2018 in relation to TDI (compared to 20 in 2017).  

II.6 

 THIRD COUNTRY ACTIVITIES TARGETING THE EU 

Total TDI measures in force, affecting EU exports, amounted to 174 in 2018 (as compared to 
162  in  2017).  This  trend  is  expected  to  continue  over  the  next  years,  also  given  the  high 
number of new and on-going investigations in 2018 (35 as compared to 31 in 2017), which 
may lead to the imposition of measures in 2019.  

The  US  accounted  for  the  largest  part  of  TDI  instruments  against  EU  exports,  with  33 
measures in force (26 in 2017). Compared to 2015 (18 measures), this represents an increase 
of 89%. It also indirectly contributed to the global increase of measures since countries such 
as  Turkey  or  Canada  initiated  safeguard  investigations  regarding  certain  steel  products  as  a 
response  to  the  US  Section  232  measures  on  steel.  However,  AD  remains  the  most  used 
instrument globally, with 133 measures in force out of the 174.  

India  is  the  second  biggest  user  of  TDI  against  the  EU,  with  21  measures  in  force  (21  in 
2017), followed by China, with 18 measures in force in 2018 (20 in 2017). 

In terms of new investigations in 2018, the US initiated three, India four and China two new 
investigations.  Next  to  these  regular  users,  some  less  frequent  users  of  TDI  have  also 
contributed  to  the  upward  trend.  This  was  in  particular  the  case  of  Australia  and  Argentina 
who initiated three new investigations each in 2018. Furthermore, other users appeared on the 
scene,  such  as  the  Gulf  Cooperation  Council  (GCC),  with  three  ongoing  investigations, 
Madagascar with two new safeguard investigations, or Colombia, which initiated in 2018 an 
investigation concerning frozen fries, the first in five years. 

As to measures imposed, the US leads with ten new measures imposed in 2018, followed by 
Australia,  with  four  new  measures,  as  well  as  India  and  Turkey,  with  three  new  measures 
imposed each. China imposed one new measure in 2018.  

When looking at sectors, steel was again the sector most targeted, with 12 initiations out of 
37,  and  13  new  measures  out  of  32.  Steel  products  also  held  the  highest  share  in  total 
measures  in  force  in  2018  -  67  out  of  174.  Chemicals  continued  to  represent  an  important 
share with eight new investigations initiated. 

While the Commission intervenes in most cases targeted against the EU, it especially focuses 
on systemic issues and cases for which industry has specifically requested assistance. In 2018, 

14 

 
 
the Commission intervened, for example, in the safeguard investigation concerning imports of 
milk powder and cheese by Chile and the AD review investigation regarding canned tomatoes 
by  Australia.  The  duties  imposed  by  Colombia  on  imports  of  frozen  fries  represent  a 
particular trade irritant since it appears that dumping margins were artificially inflated by the 
use of deficient methodologies.  

In 2018, the paper industry was also particularly targeted in investigations by India, the GCC 
and Australia. The Commission intervened in cooperation with the EU industry and continues 
to closely monitor these investigations. 

II.7 

ACTIVITIES IN THE FRAMEWORK OF THE WTO 

The  EU  remained  fully  committed  and  active  in  pushing  a  subsidies-related  agenda  in  the 
WTO.  In  the  course  of  2018,  intensive  negotiations  on  subsidies  to  the  fisheries  sector 
continued in Geneva. While only limited progress was made, an ambitious work programme 
for 2019 was adopted that should allow WTO Members to conclude the negotiations by the 
end of 2019.  

In 2018, the EU participated in the work of the relevant WTO Committees on TDI, which are 
held in April and October. In the WTO Anti-Dumping Committee, the EU responded notably 
to many questions on the reform of the EU’s TDI legislation. In addition, the EU raised issues 
of concern in investigations taken by third countries against the EU or Member States.   

The  EU  also  participated  in  both  sessions  of  the  WTO  Anti-dumping  Working  Group  on 
Implementation.  The  topics  discussed  were,  e.g.  the  calculation  of  dumping  margins,  or  the 
methodologies  to  determine  the  likelihood  of  continuation  or  recurrence  of  dumping  and 
injury in sunset reviews. 

In  the  WTO  Special  Committee  of  the  Subsidies  and  Countervailing  Committee  (SCC), the 
EU’s  2017  subsidy  notification  was  reviewed.  In  the  regular  SCC,  in  addition,  discussions 
continued  on  the  role  of  subsidies  as  a  contributor  to  excess  capacity  in  various  sectors  of 
economic activity, with the co-sponsorship of the EU, the US, Canada and Japan. The EU also 
repeatedly  called  for  improved  transparency  by  other  members  urging  them  to  notify  their 
subsidies to the WTO. 

In  the  WTO  Committee  on  Safeguards,  the  EU  raised  a  series  of  concerns  relating  to  other 
WTO Members’ safeguard investigations (such as Chile – powdered milk and Gouda cheese, 
US  –  solar  panels,  or  Turkey  –  wallpaper).  In  addition,  the  EU  responded  to  questions  by 
other WTO members related to the initiation of its safeguard investigation concerning certain 
steel products.  

II.8 

  ACTIVITIES OF THE HEARING OFFICER 

In  2018,  the  Hearing  Officer  received  altogether  27  intervention  requests  and  held  eight 
hearings. In a number of cases, the request for an intervention was submitted simultaneously 
with a request for a hearing with the services responsible for the investigation. The Hearing 
Officer  took  the  view  that  the  interested  party  should  first  address  their  concerns  to  the 
services and only when a solution could not be reached, the Hearing Officer would intervene. 

15 

 
 
As a result, interested parties seeking an intervention were able to find a solution directly with 
the investigation teams in most of the cases. 

In 2018, only few investigations led to intervention requests. These were either requests from 
several  interested  parties  or  a  number  of  intervention  requests  from  the  same  party.  The 
interested  parties  mostly  challenged  the  determinations,  facts  and  conclusions  of  the 
investigation  and  in  all  cases  the  services  agreed  to  provide  clarifications  or  additional 
disclosures. In a noteworthy case, the interested party challenged the Commission’s policy of 
protection  of  personal  data  within  the  framework  of  the  investigation  –  the  case  had  to  be 
referred  further  to  European  Data  Protection  Office.  During  all  interventions  in  2018,  the 
Hearing Officer found that the procedural rights of the interested parties had been respected. 

The  role  of  the  Hearing  Officer,  following  the  legislative  changes,  is  now  expressly 
recognised in the basic AD and AS Regulations. In this context, the Hearing Officer therefore 
also contributed to the procedures to be applied by the Commission to increase transparency 
and guarantee the procedural rights of the parties. 

16