Do we have time to prepare for the introduction of trade defence measures?

The article 'Trade defence instruments: what importers and exporters need to know' written by Enrika Naujoke in September, 2021, expressed the thought that EU importers, especially small and medium-sized enterprises (SMEs), are often unaware of trade defence instruments (TDIs) and face the consequences of newly introduced measures unprepared, thereby incurring unforeseen costs. Is it possible to prepare for this and, therefore, albeit partially, manage the risks associated with the introduction of TDIs?

One means to manage such risks would be regular monitoring of the regulatory environment. Of course, this requires resources, but it is equally important to know the process and deadlines for setting the TDI, as well as why different sizes of measures apply to the same product imported from the same non-EU country and where to find the necessary information. Therefore, this will be discussed in this article.

EU trade defence instruments and their purpose

To ensure fair, free trade procedures and fair competition between domestic and foreign producers, the EU applies TDIs in accordance with World Trade Organization rules, along with a number of extra conditions. The following types of TDIs are applicable: anti-dumping, anti-subsidy, and safeguards. Briefly about each type of instrument.

A non-EU company 'dumps' a product when it exports it to the EU below its normal value. The normal value is either the product's price as sold on the home market of the non-EU company, or a price based on the cost of production and profit. An anti-dumping measure may be imposed on any product imported into the EU where the seller/exporter is found to be selling it into the EU at a dumped price. The purpose of the anti-dumping measure is to eliminate the injury caused or likely to be caused to the EU producers by the dumped imports. Anti-dumping measures are normally in the form of an 'ad valorem' duty, but a fixed or specific duty may be imposed. In some cases, anti-dumping duties may be replaced by a minimum import price where the exporter agrees not to sell products in the EU below a minimum amount. In this case, no anti-dumping duties are collected on those imports. It should be noted that the European Commission is not obliged to accept an offer of an undertaking and, to avoid any restrictions on fairness in competition, the content of such undertakings is not made public.

Continue reading the article ‘Do we have time to prepare for the introduction of trade defence measures?’ by Jovita Dobrovalskienė, Compliance and training manager at UAB 'Muita'. The article was published in the Customs Compliance & Risk Management Journal. Would you like to get access to all the articles published since 2020? Check the pricing here and choose most suitable subscription plan.