The Commission presents its 37th Annual Report on the EU's anti-dumping, anti-subsidy and safeguard activities and the use of trade defence instruments by third countries targeting the EU in 2018. This report gives two accounts of the EU’s trade defence activity:

- exceptionally, going beyond the legal obligations, the report specifically takes stock of the major challenges, developments and achievements of the Juncker Commission in the area of trade defence;

- the report describes the EU’s anti-dumping , anti-subsidy and safeguard activities as well as the trade defence activity of third countries against the EU in 2018, in accordance with the requirements of the Anti-Dumping, Anti-Subsidy and basic Safeguard Regulations.

Overview and achievements of the Juncker Commission

The Commission notes that during the 60 years of history of the EU’s trade defence instruments (TDI), there was probably no period that was more challenging than the one between 2014 and 2019. Global overcapacity in steel significantly increased the requests for trade defence measures.

Modernisation of trade defence instruments (TDI ): new global market realities and a rising wave of unfair trade practices made modernisation of the rules a necessity. These entered into force on 8 June 2018 and made the following changes:

introduction of an improved injury margin calculation, which is central to the application of the lesser duty rule, one of the key features of the Union’s TDI. The non-injurious price calculation was updated in order to better reflect current economic realities. This includes a minimum profit of 6% as well as the possibility of reflecting the investments and R&D needs of the Union industry when calculating the injury margin. Moreover, the new rules can take account the existence of raw materials distortions, which more and more plague today's commercial exchanges; adoption of a shorter time-frame for the imposition of provisional measures– these measures must now be adopted normally within seven months, but not later than within eight months (previously the timeframe was nine months); introduction of a pre-warning mechanism on the imposition of provisional anti-dumping and anti-subsidy measures. No other TDI jurisdiction operates such a system. EU SMEs will receive additional support when considering or being affected by TDI measures; for the first time, trade defence law allows the Commission to take into account social and environmental aspects in countries under scrutiny in a number of well-defined circumstances. This applies in particular in relation of the lesser duty rule when it comes to determining the injury margin.

Increased trade defence activity : global overcapacity in steel significantly increased the requests for trade defence measures. The Commission, by imposing 25 new TDI measures on steel during this period, made an important if not essential contribution to the viability and global competitiveness of the European steel industry. Moreover, the EU took a number of steps to better protect the steel industry in the trade defence domain through import surveillance, accelerated investigations, the opening of investigations based on threat of injury (where it was justified), or the application of definitive duties retroactively, where warranted.

In addition:

in the period of November 2014 - December 2018, 170 TDI cases were initiated and 95 measures were applied in order to restore a level playing field. Of the latter, 35 are new measures and the remainder are renewals or extensions of existing measures. EU TDI measures imposed since the beginning of the Commission's mandate effectively preserved more than 124 000 jobs. The steel sector benefited the most, with over 86 000 jobs protected. Overall, the EU measures that were in force at the end of 2018 effectively protected 320 000 direct industrial jobs from unfair competition.

The Commission intervened when third countries intended to impose unwarranted trade defence measures against EU exports . Trade defence activity around the globe has been continuously on the rise since 2014, and reached an all-time high in 2018, when the Commission services intervened in around 70 foreign trade defence investigations.

Safeguard measures

In 2018, the EU initiated three safeguard investigations – one erga omnes on steel products and two bilateral ones against Cambodia and Myanmar on Indica rice, under the rules of the EU’s Generalised Scheme of Preferences.

On the issue of steel products, the report notes that on 23 March 2018, the United States imposed a 25% import duty on steel products. The EU deemed these measures not legally warranted, and in a three-pronged action – in addition to a challenge of the US measures under the WTO dispute settlement system, and the imposition of rebalancing measures – the Commission took trade defence action by initiating a safeguard investigation, the first one since 2002. Indeed, as a result of the US duties, global suppliers started to divert some of their exports from the US to the EU. In order to avoid a further sharp increase of imports that threatened to worsen the already fragile economic condition of EU steel producers (due to global overcapacity), the Commission adopted definitive safeguard measures erga omnes . The measures, in the form of tariff rate quotas will maintain traditional trade flows and the diversity of sources of supply the EU user industry needs, while protecting the EU producing industry against trade deflection.

In the WTO Committee on Safeguards, the EU raised a series of concerns relating to other WTO Members’ safeguard investigations (such as Chile – powdered milk and Gouda cheese, US – solar panels, or Turkey – wallpaper). In addition, the EU responded to questions by other WTO members related to the initiation of its safeguard investigation concerning certain steel products.

The Commission presents a staff working document accompanying its 37th annual report on the EU's anti-dumping, anti-subsidy and safeguard activities and the use of trade defence instruments by third countries targeting the EU in 2018.

The report notes that safeguard measures remain an instrument that the Commission would only apply in truly exceptional circumstances. Indeed, they are only used where it is clear that, applying the highest standards, such measures are necessary and justified because, due to unforeseen circumstances, there has been a surge in imports and this has caused or threatens to cause serious damage to the EU industry.

Details on individual safeguard cases

General safeguard measures on certain steel products

The investigation showed that over the period considered, there had been a sudden, steep and significant increase in imports, in both absolute and relative terms, for the products concerned (+71%). The increase in imports of steel products in the Union was the result of unforeseen developments, including unprecedented steelmaking overcapacity, distortive subsidies and government support measures. The Commission concluded Union industry was under the threat of serious injury if the increasing trend in imports continued with the ensuing price depression below sustainable levels.

The definitive safeguard measure took the form of a tariff-rate quota in order to prevent serious injury, but at the same time preserve as much as possible traditional trade flows. This level of tariff-rate quota was set at the average level of imports over the last three representative years. The Commission will initiate the first review investigation no later than on 1 July 2019.

Definitive measures apply to imports from all origins, except: (i) products under assessment originating in Norway, Iceland, and Liechtenstein; (ii) certain countries with which the Union has signed an Economic Partnership Agreement; (iii) WTO developing countries accounting for less than 3% of EU imports are also excluded. Measures shall be in place from February 2019 until July 2021.

Indica Rice from Cambodia and Myanmar

In March 2018, upon Italy’s request, the Commission initiated a safeguard investigation under the GSP Regulation , regarding imports of Indica rice from

Cambodia and Myanmar. The findings of the investigation confirmed that a significant surge of rice imports from these two countries has caused economic damage to the rice sector in the EU. The Commission decided on 16 January, after consultation with Member States, to reinstate the Common Customs

Tariff applied duties of 175 EUR/ton, with a progressive liberalisation (175 EUR/ton for the first year, 150 EUR/ton for the second year and 125 EUR/ton for the third year).

New legislation on safeguards

In April 2018, the Commission put forward a proposal for a horizontal bilateral safeguard regulation that will allow it use the bilateral safeguard clauses laid down in all future trade agreements. The objective of these safeguard clauses is to temporarily suspend tariff preferences where preferential imports increase to such an extent that they cause or threaten to cause serious injury to a particular EU industry. This horizontal regulation provides standard rules for the implementation of bilateral safeguard clauses, including the conditions and decision-making process. In the past, the EU adopted separate regulations for each individual free trade agreement, which will no longer be necessary. The co-legislators have politically approved the proposed Regulation in December 2018.

In accordance with the provisions of Regulation (EU) 2016/1036 and Regulation (EU) 2016/1037 of the European Parliament and of the Council, the Commission has presented its 35th annual report on the EU's anti-dumping, anti-subsidy and safeguard activities (2016).

Investigations and measures : 2016 saw a slight increase in the number of new investigations opened, against the backdrop of a prolonged crisis caused largely by industrial overcapacities in China , notably in, but not limited to, the steel sector.

In 2016, 15 new investigations were initiated (12 concerned the sector of steel and metals ), while there were 9 re-openings of cases to implement judicial findings.

There was a slight decrease in the number of provisional and definitive measures imposed as well as the number of review investigations opened. At the same time, many of the investigations conducted, notably those in the steel sector, have been very complex and resource-intensive. This was the case for trade defence investigations into hot rolled coils, the expiry review on solar panels and the investigation concerning concrete reinforcing bars and rods.

In 2016, 0.27% of total imports into the EU were affected by anti-dumping or anti-subsidy measures. Although comprehensive data are not available, the expiry review investigations show, in many cases, that the imposition of measures leads to a significant reduction of the imports of the product concerned.

During 2016, there was no safeguard investigations opened or measures imposed by the EU.

Legislative measures : 2016 was marked by the preparation for, and adoption by the Commission of, a legislative proposal to change the EU's trade defence legislation in order to ensure that the EU would be equipped with sufficiently robust instruments to deal with the challenges faced by industry. The main elements of the proposal are:

the introduction of a new anti-dumping methodology to capture market distortions linked to state intervention in third countries; strengthening the anti-subsidy instrument to increase the EU's ability to capture the full magnitude of subsidisation (by making it possible to address also subsidies which were identified only in the course of an investigation).

At the same time, the Commission actively engaged with the Council in relation to the proposal on the modernisation of trade defence instruments. These efforts culminated in the Council reaching a position at the end of 2016, allowing for the ordinary legislative procedure to progress.

Follow-up of measures: follow-up activities concerning measures in force were centred on four main areas: (1) to pre-empt fraud; (2) to monitor trade flows and market developments; (3) to improve the effectiveness with the appropriate instruments and (4) to react to irregular practices. These activities enabled the Commission - in cooperation with Member States - to pro-actively ensure the proper enforcement of trade defence measures in the European Union.

Information and dialogue with third countries : during 2016, the SME Helpdesk continued to deal with requests for information relating to the trade defence instruments.

The Commission organized its yearly training seminar on trade defence for officials from third countries (participants from Egypt, Tunisia, Turkey, Vietnam, Thailand, Japan and the WTO secretariat). In addition, there were a number of other bilateral contacts dedicated to discussing various trade defence topics with a number of third countries including China, Japan, Australia, Brazil, Mexico, Turkey, USA, Russia, Indonesia, Thailand, Canada, India, and Switzerland.

The Commission presents its 33rd Annual Report on the EU's anti-dumping, anti-subsidy and safeguard activities in 2014. These activities are governed by: (i) Council Regulation (EC) No 1225/2009 (‘basic anti-dumping Regulation’), (ii) Council Regulation (EC) No 597/2009 (‘basic anti-subsidy Regulation’) and (iii) Regulation (EU) 2015/478 of the European Parliament and of the Council on common rules for imports.

The main facts regarding trade defence in the EU during 2014 are the following :

Investigations and measures : in relation to 2013, 2014 was characterised by an increase in the opening of new investigations and a reduction in the number of expiry reviews.

It should be recalled that the anti-dumping and anti-subsidy Regulations provide for the expiry of measures after five years, unless an expiry review demonstrates that they should be maintained in their original form.

As in previous years this reflects the type of complaints which were lodged and which were supported by prima facie evidence.

At the end of 2014, the EU had 81 antidumping measures and 13 anti-subsidy measures in force. In 2014, 0.29% of total imports into the EU were affected by such measures.

Most of the cases concluded in 2014 had been initiated in 2013 while many of those initiated in 2014 will come up for decision in 2015.

Continuing the trend of previous years, no safeguard action was taken by the EU.

The follow-up activities concerning measures in force were centred on four main areas: (1) pre-empt fraud; (2) monitor trade flows and market developments; (3) improve the effectiveness with the appropriate instruments and (4) react to irregular practices.

Modernisation of trade defence instruments (TDI): work continued on the proposal for the modernisation of TDI. The Parliament voted a legislative resolution in April 2014 and thus closed its first reading. At that time, the Commission also took note of draft guidelines on four subjects with a view to their adoption once the legislative process was more advanced.

The aim of the modernisation exercise is to render the instruments more efficient and effective. By finding practical solutions to real problems encountered by stakeholders, the TDIs are intended to become more accessible and measures better-targeted responses to certain unfair trading practices exercised by the EU’s trading partners. Other important elements of the project include increased transparency and particular attention to SMEs.

Information and communication activities : the Commission TDI services also continued their information activities targeted at third country officials, the Union industry and importers:

a Helpdesk for SMEs was set in December 2004 in order to help SMEs deal with the complexity involved in TDI investigations. In 2014, the Helpdesk continued to deal with requests for information; there were a number of bilateral contacts dedicated to discussing various trade defence topics with a number of third countries including China, Korea, Japan, Australia, Vietnam and Morocco; there was a seminar in February 2014 which brought together the various stakeholders to discuss aspects of the EU's trade defence policy and practice.

Judicial review : in 2014, the General Court and the Court of Justice rendered 28 judgments in total relating to the areas of anti-dumping or anti-subsidy. 5 of the judgments of the Court of Justice concerned appeals against the General Court decisions and 4 were preliminary rulings.

PURPOSE: to codify Council Regulation (EC) n° 260/2009 on common rules for imports.

LEGISLATIVE ACT: Regulation (EU) 2015/478 of the European Parliament and of the Council on common rules for imports (codification).

CONTENT: the Regulation codifies and repeals Council Regulation (EC) n° 260/2009 which has been substantially amended on several occasions.

The new Regulation establishes the principle of freedom to import from third countries, with safeguard measures in place.

It applies to imports of products originating in third countries, except for: (i) textile products subject to specific import rules under Regulation (EC) No 517/94; (ii) products originating in certain third countries listed in Council Regulation (EC) No 625/2009.

The main points of the Regulation are as follows:

Information and consultation procedure : Member States shall inform the Commission if trends in imports appear to call for surveillance or safeguard measures. The Commission shall examine the terms and conditions under which imports occur, the trend in imports, the various aspects of the economic and trade situations and, where appropriate, the measures to be applied.

Union investigation procedure: an investigation should precede the application of any safeguard measure, subject to the reservation that the Commission be allowed in urgent cases to apply provisional measures. The investigation shall seek to determine whether imports of the product in question are causing or threatening to cause serious injury, meaning a significant overall impairment in the position of Union producers. The Regulation lays down detailed provisions on the opening of investigations, the checks and inspections required, access by exporter countries and interested parties to the information gathered, hearings for the parties involved and the opportunities for those parties to submit their views. It also establishes time limits for the initiation of investigations and for determinations as to whether or not measures are appropriate, with a view to ensuring that such determinations are made quickly.

Surveillance measures : where the trend in imports of a product originating in a third country covered by the Regulation threatens to cause injury to Union producers, and where the interests of the Union so require, import of that product may be subject, as appropriate, to retrospective Union surveillance. The decision to impose surveillance shall be taken by the Commission by means of implementing acts.

Products under prior Union surveillance may be put into free circulation only on production of a surveillance document made out on a form corresponding to the model in Annex I.

Safeguard measures: the Commission shall adopt the safeguard measures required by the interests of the Union, on its own initiative or at the request of a Member State. Safeguard measures against a member of the WTO may be considered only if the product in question is imported into the Union in such greatly increased quantities and on such terms or conditions as to cause, or threaten to cause, serious injury to Union producers of like or directly competing products.

In cases in which safeguard measures take the form of a quota the level of the latter should be set in principle no lower than the average level of imports over a representative period of at least 3 years.

Surveillance or safeguard measures confined to one or more regions of the Union should be authorised only exceptionally and where no alternative exists.

The Regulation determines the maximum duration of safeguard measures and specific provisions regarding extension, progressive liberalisation and reviews of such measures.

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers are conferred on the Commission.

ENTRY INTO FORCE: 16.4.2015.

The European Parliament adopted by 639 votes to 30, with 35 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on common rules for imports (codified text).

Parliament adopted its position at first reading following the ordinary legislative procedure taking over the Commission proposal as adapted to the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission.

According to the Consultative Working Party, the proposal in question contains a straightforward codification of the existing texts without any change in their substance.

The proposed regulation establishes the principle of freedom to import products from third countries, subject to possible safeguard measures.

It shall apply to imports of products originating in third countries, except for: (a) textile products subject to specific import rules under Regulation (EC) No 517/94; (b) products originating in certain third countries listed in Council Regulation (EC) No 625/2009.

The proposal establishes provisions regarding: (i) the Commission's information and consultation procedure regarding the need for surveillance or safeguard measures; (ii) the Union investigation procedure prior to the application of any safeguard measure, (iii) Union surveillance measures; (iv) safeguard measures.

The Committee on Legal Affairs adopted the report by Andrzej DUDA (ECR, PL) on the proposal for a regulation of the European Parliament and of the Council on common rules for imports (codified text).

It recommended the European Parliament to adopt its position at first reading, taking over the Commission proposal as adapted to the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission.

The Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, stated that the proposal in question contains a straightforward codification of the existing texts without any change in their substance.

PURPOSE: codification of Council Regulation (EC) No 260/2009 of 26 February 2009 on the common rules for imports.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: Council Regulation (EC) No 260/2009 has been substantially amended several times. It is recalled that in 1987, the Commission decided to instruct its staff that all acts should be codified after no more than ten amendments, stressing that this is a minimum requirement. The Edinburgh European Council in December 1992 confirmed the importance of codification as it offers certainty as to the law applicable to a given matter at a given time.

The European Parliament, the Council and the Commission agreed, by an interinstitutional agreement dated 20 December 1994, that an accelerated procedure may be used for the fast-track adoption of codification instruments.

CONTENT: in the interests of clarity and transparency of Union law, the purpose of this proposal is to undertake a codification of Council Regulation (EC) No 260/2009 on the common rules for imports.

The new Regulation will supersede the various acts incorporated in it ; it fully preserves the content of the acts being codified and hence does no more than bring them together with only such formal amendments as are required by the codification exercise itself.

This Regulation applies to imports of products originating in third countries , except for: (a) textile products subject to specific import rules under Regulation (EC) No 517/94; (b) the products originating in certain third countries listed in Council Regulation (EC) No 625/2009.

The main elements of the proposed Regulation concern:

Union information and consultation procedure : the Commission should be informed by the Member States of any danger created by trends in imports which might call for Union surveillance or the application of safeguard measures.

In such instances the Commission should examine the terms and conditions under which imports occur, the trend in imports, the various aspects of the economic and trade situations and, where appropriate, the measures to be applied.

Union investigation procedure : an investigation should precede the application of any safeguard measure, subject to the reservation that the Commission be allowed in urgent cases to apply provisional measures. The proposal lays down detailed provisions on the opening of investigations, the checks and inspections required, access by exporter countries and interested parties to the information gathered, hearings for the parties involved and the opportunities for those parties to submit their views. It also establishes time limits for the initiation of investigations and for determinations as to whether or not measures are appropriate, in order to increase legal certainty for the economic operators concerned.

Surveillance measures : where the trend in imports of a product originating in a third country covered by this Regulation threatens to cause injury to Union producers, and where the interests of the Union so require, import of that product may be subject, as appropriate, to retrospective Union surveillance. The decision to impose surveillance shall be taken by the Commission by means of implementing acts.

Safeguard measures : it falls on the Commission to adopt the safeguard measures required by the interests of the Union. Those interests should be considered as a whole and should in particular encompass the interests of Union producers, users and consumers.

Safeguard measures against a member of the WTO may be considered only if the product in question is imported into the Union in such greatly increased quantities and on such terms or conditions as to cause, or threaten to cause, serious injury to Union producers of like or directly competing products. These measures shall take effect immediately.

The proposal determines the maximum duration of safeguard measures and specific provisions regarding extension, progressive liberalisation and reviews of such measures.

The implementation of this Regulation requires uniform conditions for adopting provisional and definitive safeguard measures, and for the imposition of prior surveillance measures. Those measures should be adopted by the Commission in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council.