Monday

3rd Aug 2020

EU delays decision on trade defence

  • The EU plans to suspend a rule on low tariffs in “some justified cases” to stop dumping, especially in the steel sector. (Photo: Andre Skibinski)

EU trade ministers postponed an agreement on Friday (11 November) on how to upgrade the bloc's trade defences.

Seventeen countries, led by France and Germany, agreed to suspend the lesser duty rule - which keeps tariffs at the lowest possible level - in “some justified cases” to combat dumping, especially in the steel sector.

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But seven others, led by Sweden and the UK, argued that increasing the level of duties has not proven efficient against dumping and that Europe should not put barriers to trade.

Three countries, including Italy, said that they needed more time before taking a position on the plan.

Tabled by the Slovak presidency of the EU, the trade agreement is aimed at brokering a compromise between member states, who have been unable to agree on the issue since 2013.

EU leaders at their last summit last month said that it should be settled before the end of the year.

The compromise between countries that push for an increase of duties and countries opposing it "narrowly defines the situations when LDRs would not be applied," a presidency source said.

According to the plan, only "state induced distortions on raw materials and energy" would trigger a suspension of the lesser duty rule.

Overcapacity in a sector, such as steel in China, would not be included, despite some countries demanding it.

Despite a qualified majority in favour of the plan, ministers sent discussions back to a technical working group, leaving ambassadors to close the deal.

Slovak economy minister, Petr Ziga, who chaired the meeting, said he hoped an agreement would be found in the first half of December.

"I don't understand why the decision was not taken today," a diplomat added, saying "the British were devastated" that a qualified majority supported the plan.

But EU sources say that details still need to be clarified on how the EU will suspend the lesser duty rule, before a final decision is taken.

Ministers also discussed a new method, presented by the European Commission on Wednesday, to calculate dumping .

The method allows the EU to open anti-dumping case against countries where the state has a strong influence in the economy, distorting the market. The measure mainly targeting China and its steel exports.

Although the reform of the lesser duty rule and the new methodology are two different measures, Wednesday's proposal will be seen as part of the same package to strengthen EU trade defence and will be taken into account in the decision on duties.

TTIP in the freezer

Trade minister also discussed the future of TTIP, the EU-US trade deal, three days after the election of Donald Trump.

Although Ziga said there was no reason to review the European Commission's mandate, trade commissioner Cecilia Malmstrom noted she had "no idea" of when talks, put on hold due to American administration change, would start again.

She noted that Trump "didn't mention TTIP a single time" during his campaign.

"For quite some time, TTIP will probably be in the freezer. What happens when it's defrosted, we need to wait and see," she told journalists.

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