Trade defence Brussels, 16 March 2012
The Commission publishes independent evaluation of trade defence instruments
The European Commission has published the results of an independent evaluation of the EU’s trade defence instruments. These instruments are designed to defend EU production against international trade distortions such as subsidies or dumping.
The evaluation was carried out by BKP Development Research & Consulting GmbH and concluded in February 2012. The evaluation covers:
- a description of current practice in the field of trade defence instruments;
- an economic analysis of the arguments for trade defence instruments and their application in the international legal and economic context;
- a review of the relevant regulations in the light of administrative practice, the judgments of the Court of Justice and the recommendations of the World Trade Organisation's Dispute Settlement Body;
- an assessment of EU policy and practice compared to certain trading partners; and
- an evaluation of the performance, methods, use and effectiveness of the current system in achieving its objectives.
Overall, the independent evaluation found that the EU’s application of trade defence rules constitutes good practice. The evaluation also addressed divergent views in the economic literature on the application of trade defence instruments. Nonetheless, it accepted that at the present time there is no alternative to the pursuit of the current system as agreed at international level in the WTO. In that regard the evaluation represents an invaluable contribution to better understanding of the various effects of trade defence instruments.
The main findings include:
- The evaluation suggested that most of the EU trade methodologies, procedures and practices applied by the Commission were sound.
- The amount of litigation related to the EU's implementation of trade defence instruments was low and there was a high degree of compliance with EU law and WTO obligations.
- EU practice stands out in a number of ways in comparison to the practice of other WTO Members. The regular application of the public interest test and the frequent reduction of duties through application of the lesser duty rule, which have the effect of moderation of trade defence measures, distinguish EU practice from most other countries who do not apply such tests.
In addition, the evaluation made some specific recommendations relating to the substantive and procedural aspects of investigations. The purpose of the recommendations was reported to be to further strengthen and improve an already good system.
The Commission will soon launch a public consultation on the modernisation of the EU's trade defence instruments. The recommendations made by the independent evaluation will also now be examined with a view to feeding into this process and it is expected that the evaluation study will provide important input for the modernisation initiative.