EU agrees move to allow swifter, higher dumping duties

BRUSSELS (Reuters) – The European Union has agreed new rules allowing it to impose duties more rapidly and at a higher level on excessively cheap imports, part of a strategy to shore up its defenses in a new trading relationship with China.

Representatives from the European Commission, the Parliament and the 28 member states agreed on a text late on Tuesday, ending around four years of wrangling.

“Better late than never,” said EU Trade Commissioner Cecilia Malmstrom. “The EU stands for open and rules-based trade, but we must ensure that others do not take advantage of our openness.”

Under the reforms, which could come into force in March after clearance by the parliament and EU member states, the Commission would be able to impose provisional duties after seven or eight months, versus nine at present.

It would also involve a change to the EU’s “lesser duty rule”. The rule means duties are set at a level to remove the injury to EU producers, rather than a higher rate required to push the exporter’s price to what is deemed fair and normal – known as the “dumping margin”.

Duties could in future be set at the full dumping margin rate if a raw material or energy input representing at least 17 percent of the cost of production is distorted, particularly under the influence of the state.

Even if the lesser duty rule is applied, duties would have to reflect a minimum profit margin of 6 percent as well costs related to international labor and environment agreements, such as the Paris climate accord, if they were not observed in the exporting country.

The EU has already agreed on new anti-dumping rules single out China for special attention to limit cheap imports.

In measures set to enter force later this month, the bloc will treat all World Trade Organization members the same when determining if countries are dumping products. However it will make exceptions for market distortions, such as excessive state intervention, an exception expected to cover many Chinese firms.

The Commission has said it will produce reports on major countries where it suspects such distortions prevail. For the time being, it will only produce one report – on China.

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