Union to review its anti-dumping policy

Date: 26/02/1998

By Chris Johnstone

THE bad news for Europe's trading partners is that the EU is the world's second most important user of anti-dumping procedures to protect its manufacturers against cheap imports.

The good news is that it does not appear to want to challenge the United States for first place, despite the disappearance of other protective instruments in its potential armoury.

Fears of a sharp increase in the use of anti-dumping measures in the early Nineties have not been confirmed, according to a World Trade Organisation report on the Union's trade policies between 1992 and 1996.

Those fears were fuelled by the dismantling of voluntary export restraints - deals under which other governments agreed to limit their exports to the Union rather than have the EU do the job itself. The EU-Japan accord restricting Japanese car imports to Europe was the most high-profile example of this.

Although the last two years have witnessed a decline in the number of new anti-dumping cases launched, there has still been an overall increase in the range of measures in force, particularly with regard to textile products, says the WTO.

"Other trade defence instruments available under WTO provisions, such as safeguards and countervailing actions, are being used only marginally," it adds.

In spite of this positive trend in the Union, anti-dumping disputes still have the potential to produce explosive disputes with trade partners.

The EU's use of such duties against Russia provoked a storm of protest from Moscow, which threatened to torpedo the first cooperation talks between the trade partners.

Russia complained that the EU was unfairly treating it as a non-market economy when assessing alleged dumping cases and the measures needed to address the Commission's worries. The simmering row erupted when the Commission targeted Russian imports of steel pipes, with Moscow claiming that the changes demanded failed to recognise that the government had given up control over large swathes of the economy.

China, with a host of anti-dumping disputes with the EU ranging from urea to bicycles, handbags and toys, also came to the conclusion that the Union's trade policies and practices were stuck in the past.

The Commission has proposed a response which should take the sting out of the present situation. The across-the-board categorisation of Russia and China as non-market economies will be abandoned in future, in favour of a case-by-case evaluation of dumping complaints, according to proposals put together by trade officials.

These proposals have still to be approved by national governments, but Trade Commissioner Sir Leon Brittan is upbeat about their likely response.

"I'm not saying we are there yet. There are some people who have their reservations, but people are seeing that things have changed in Russia and China, and they are seeing that what we are proposing doesn't weaken Europe's capacity to defend itself when it comes to a genuine attack in an unfair way," he said.

"We are not labelling them market economies; we are just dropping a rather offensive and anachronistic label. On the substance of it, we are saying let's look at each case as it really is and the onus is on the people who are suspected of dumping to show that they are actually operating in a free market situation."

Apart from fine-tuning its approach to Russia and China, the Commission is due to conduct a wholesale review of anti-dumping policy this year.

The key issue to be addressed is what are 'community interests' in trade matters - a tough question given that one person's dumped product is another's bargain buy.