Trade & Customs- European Union There are increasing indications that the scale of review of current EU trade defence policy will not be as wide as first expected. On May 11 2007 the director general for trade addressed the European Parliament's International Trade Committee about the latest trade policy developments. He pointed out that the European Commission will not be in a position to deliver its report on the review of the European Union's trade defence instruments until September or October 2007. The European Parliament is scheduled to discuss the review of the trade defence instruments at a hearing on July 16 2007.
Addressing the European Parliament plenary session on May 22 2007, the EU trade commissioner pointed out that, from time to time, some traders seek to use trade defence instruments due to fear of competition rather than from a desire to engage in competitive practices. In this respect, he stressed that periodic reviews allow the European Union to ensure that public confidence in these trade defence instruments is maintained and that, if necessary, these instruments can change in order to reflect a changing world.
The goal of the public consultation was to look at the use of trade defence instruments within a changing global economy. Given that globalization has resulted in many European companies shifting production outside the European Union, it has become difficult to determine where the European Union's economic interests lie. This effect of globalization on European businesses has been further recognized in an announcement made by the EU trade commissioner of a new strategy to boost European enterprises operating in emerging markets, in which the commissioner highlighted that European businesses are becoming more and more reliant on the opportunities presented by emerging economies.
However, in some countries trade barriers have increased, often taking the form of non-tariff barriers such as standards, limited copyright protection, subsidies and anti-dumping measures. The commission estimates that such barriers result in a loss of earnings of up to ˆ20 billion per year for European companies operating in mainland China. The European Union therefore hopes that its trading partners will reciprocate the European Union's economic liberalism. It also intends to set up specialist teams to identify barriers to trade in order to improve market access by increasing the pressure on the countries concerned. These teams would be composed of members of the commission's delegations, embassies and chambers of commerce in order to maximize the impact of commission resources.
In his speech before the European Parliament, the EU trade commissioner also referred to one suggestion to level the trade playing field proposed by France: the implementation of a carbon tax or an additional duty on products originating from countries which have not yet ratified the Kyoto Convention. According to the commissioner, however, there are many practical as well as legal difficulties in pursuing such a tax. Furthermore, he noted that any climate-friendly policies and instruments that the European Union might develop in future should not become protectionist instruments.
The EU trade commissioner's team is also currently examining the 541 recommendations received in response to the green paper, considering possible ways forward. In particular, the commissioner may decide to present his conclusions to the EU member states as a white paper setting out the targeted proposals for improving the management of trade defence instruments. Alternatively, he may present his suggestions as a new green paper to pursue more ideas and thereby extend the period of reflection.
Significantly for businesses exporting to the European Union, the commissioner has signalled that he intends to suggest ways of improving the use of trade defence instruments. For instance, on April 16 2007 he reportedly told the Chinese Press Agency that he did not expect any "big change" or a "radical departure" from the current system. However, he did seem to anticipate some changes taking place and, in accordance with his liberal approach, it is expected that any changes to the system will likely be to relax EU anti-dumping laws. This may be contrasted with the protectionist position taken recently by the United States in its draft legislation to make it easier to impose countervailing duties on non-market economies such as mainland China. Although there are currently no plans to introduce such a system in the European Union, businesses will be aware that the European Union has previously expressed similar concerns regarding imports from mainland China and that the commission has faced some pressure to impose such countervailing duties.
In Europe, the scaling down of the trade defence review may be due to the initial assessment of the comments on the green paper, which confirmed that there are widely differing views within the European Union on the enforcement of trade defence measures. On one hand, importers, distributors, retailers, companies which have relocated outside the European Union, consumers and liberal EU member states all advocate that the European Union should place stricter limitations on the use of these instruments, as well as increase the requirements to initiate investigations. On the other hand, industrial producers and protectionist EU member states want the current situation to be maintained without substantive changes.
A recent example of these opposing positions was the request by EU steel users on May 8 2007 not to impose punitive duties on imports from mainland China and other Asian countries. Some European steel producers have been expressing increasing concern about a surge in steel imports and have suggested that some action should be taken.
While it is unlikely that the European Commission will suggest radical changes to the current system of trade defence instruments, the EU trade commissioner still hopes to make some progress by providing the European Commission with greater autonomy in the handling of anti-dumping investigations and depoliticizing the procedure.
International Law Office | 
