New rules for EU anti-dumping measures

NEWS Published

OPINION The EU Commission has proposed a new method for calculating whether, and to what extent, imported goods have been dumped. While this issue is technical, it is highly important – for importers and third country exporters.

Olof Erixon - 003

How to counter dumping in geographic markets? This issue has recently been raised with the EU Commission. Current rules for determining the dumping margin are claimed to be insufficient by certain stakeholders, including the European steel industry, in particular. The dumping margin is what establishes the level of anti-dumping duties imposed on a product that is found to be sold at a lower price than the cost of its production, transport and sales. The Commission currently must prove that these costs are greater than the sales price of the product in the EU. This presents great difficulty in situations where the market and cost levels in the country of origin are not transparent. This situation has become acute in the EU since it will no longer be possible for the European Comission to assess products from China using a special measure after 11 December this year. This special measure, as applied to China (and other countries considered non-market economies), permits using data from a third country for comparison when making this assessment. This method will now be phased out in relation to China, which leaves the European steel industry feeling threatened. This is namely due to China's gigantic overcapacity of steel production.

The EU Commission proposes that state subsidies and similar in the country of origin may be weighed in when calculating the dumping margin. It is well established that China heavily subsidizes several industries. This is done with soft loans, low or minimal land acquisition costs, export restrictions on certain products, and more. The Commission proposal also would involve eliminating the distinction between market and non-market economies. To replace this, the Commission would distinguish between WTO (World Trade Organisation) and non-WTO members. The snag with this is that the EU has already partly tested the new method in a WTO case brought against Argentina, but which was rejected. In the event the EU uses the proposed new method, but it is rejected by the WTO, the the union will face a difficult dilemma. In such a case, the ‘affected’ country could, within the scope of WTO rules, impose countermeasures, and the situation could easily spiral into a trade conflict.

We see anti-dumping duties as a heavy-handed tool that unnecessarily restricts trade. However, in limited cases such duties on dumped products may be a necessary evil, but these should not be used as a political weapon or to express pure protectionism. Unfortunately, the EU has, indeed, imposed anti-dumping duties on products in cases where the country of origin simply had comparative advantages. The most important considerations in any system for imposing such duties is having reliable calculation methods as well as providing importers with sufficient notice of planned measures so they can implement necessary adjustments accordingly. Transparency is absolutely critical! We also contend the EU should concentrate more on state subsidies in third countries when considering what trade defence instruments to utilize. To this extent the EU Commission proposal is welcome. In this case, we can only wait to see if is adopted, applied, and then that it actually works.

Olof Erixon, trade policy expert

News

NEWS Published:

Industry the solution to climate issues

The 2016 Climate Change Conference in Marrakech has come to a close. Given the proper prerequisites for innovation and development, the industry will have a critical role in meeting the climate challenges we face writes Maria Sunér Fleming, Climate and Energy Advisor at the Confederation of Swedish Enterprise, from the conference.
NEWS Published:

Labour migration discussed in the European Parliament

A hearing about the revised EU Blue Card Directive was held on November 7 at the European Parliament. The Directive aims at making the EU more attractive for highly qualified third-country nationals, that is, those from countries beyond the EU/EES area. Hearing participants included representatives from the OECD, the EU Commission, the European Parliament and the Confederation of Swedish Enterprise. The hearing was valuable because critical assessments of the proposed Directive was discussed, and the participants’ conclusion was that the revised EU Blue Card Directive has a bright future if it allows parallel national systems for labour migration.
NEWS Published:

New rules for EU anti-dumping measures

OPINION The EU Commission has proposed a new method for calculating whether, and to what extent, imported goods have been dumped. While this issue is technical, it is highly important – for importers and third country exporters.
NEWS Published:

Swedish Enterprise visits the Slovak presidency of the EU

The Confederation of Swedish Enterprise’s Brussels office visited the Slovak Presidency of the EU in Bratislava on October 3-5. Meetings with the State Secretary of the Economy, the EU department on the Ministry of Labor, the Slovak Employers’ federation and the Swedish Embassy responsible for bilateral relations with Slovakia was on the agenda for the visit. The purpose was to deepen the understanding of the presidency’s interest in the Confederation’s key issues; trade, labor market, digitalization, better regulation and internal market with Slovak stakeholders.
NEWS Published:

New rules for posted workers - Better protection of workers or the end of posting?

RULES Free movement of people and services is crucial for the internal market to function well. On March 8th, the European Commission presented its targeted revision of the posting of workers directive. The proposal is already one of the most controversial to be handled by the European legislators during 2016. 
NEWS Published:

TTIP – what’s really in it for businesses?

FREE TRADE The Transatlantic Trade and Investment Partnership (TTIP) is one of the biggest political decisions of this European political term. A free trade agreement between the world’s two largest economies has the potential to provide clear positive effects to the world economy. Beyond political discussions, businesses of all sizes will face both opportunities and challenges in their day-to-day activities and operations.
NEWS Published:

Growing power demand jeopardised by short-sighted policies.

ENERGY Swedish households and companies consume large amounts of electrical power, and nothing indicates this will decrease. On the contrary, with its fast population growth, and ambitious climate targets, Sweden will need to increase electrical power consumption to maintain its leading edge business sector. But, despite greater demand for electricity, policies currently in place are harmful for the country's power plants. This has to change, writes Maria Sunér Fleming, Head of Energy and Climate Policy.
NEWS Published:

Looming energy crisis caused by government policy

DEBATE The high special tax on nuclear power, combined with the lowest electricity prices in 15 years, are knocking out carbon free nuclear power. This situation is serious. Shutting down significant portions of Swedish power generation would threaten both climate targets and long-term competitiveness.
NEWS Published:

Towards the circular economy – opportunities and barriers

CIRCULAR ECONOMY In December 2015 the European Commission launched the Circular Economy package. The ambitious package aims at stimulating Europe's transition towards a circular economy, boost global competitiveness, foster sustainable economic growth and generate new jobs. But will this vision be successful and what will it take to achieve the ambitions? In order to discuss this topic, the Swedish Society for Business and Politics, SPN, organised a seminar in Brussels, in the premises of the permanent representation of Sweden.
NEWS Published:

Facts and Research ignored

OPINION Redistribution of wealth is a cornerstone to welfare policies in the Social Democratic-Green Party government. But the minority coalition government, either purposely or unwittingly, ignores facts and research in shaping their policies. This debases the necessary conditions for effective, equal, and fair welfare distribution, writes Mikael Witterblad, Head of Welfare Policy, and Ann Öberg, Chief Economist at the Confederation of Swedish Enterprise.
NEWS Published:

Welfare policies not supported by facts

WELFARE Sweden's school choice reform, allowing parents greater freedom in choosing which schools their children attend, has not resulted in inequalities among schools. Nor has similar reforms to healthcare resulted in inequalities in the treatment of patients. These are conclusions from recent research, which were the focus of a conference hosted by the Confederation of Swedish Enterprise.
NEWS Published:

Refugee crisis not over

OPINION New this autumn was dominated by the extreme inflow of refugees. It’s high time to discuss the long-term effects of the refugee crisis, say Economists Ann Öberg and Jonas Frycklund.
NEWS Published:

Agency ruling partial win for business

OPINION The Swedish Competition Authority issued their ruling on Malmö Municipality's implementation of the so-called ‘White-job model’. The ruling includes the finding that the model gives union inspectors excessively far-reaching authority. The Confederation of Swedish Enterprise sees pros and cons with the ruling, writes Procurement expert Ellen Hausel Heldahl.
NEWS Published:

The Collaborative Economy – what does it mean?

Legislation on consumer protection, taxation, social security and employment need to be rethought and the understanding of a new and more complex market and its rapid transformation needs to be enhanced by decision-makers, businesses and consumers.
NEWS Published:

European Commission proposes using cannons to kill flies

OPINION The European Commission has proposed a regulatory framework for disputes involving companies whose assets are unfairly seized by national governments. The proposals will worsen the climate for companies, who already are strongly disadvantaged, for using investment protection regulations for reasons of cost, contends Olof Erixon, International Trade Policy Expert.
NEWS Published:

One-sided arguments in new EU General Data Protection Regulation

PERSONAL DATA The proposed EU General Data Protection Regulation is causing businesses to sound warning bells. Rene Summer, of Telecoms giant Ericsson, fears that new ways of handling personal data will complicate investment in data driven innovation.
NEWS Published:

Transatlantic trade – what’s in it for workers and employers?

TTIP The EU-US Free Trade Agreement or the Transatlantic Trade and Investment Partnership, TTIP, is currently being negotiated between EU and the US. Its approval will become the biggest political decision of the current EU legislature. Given its importance, both business and workers are at the heart of the policy discussions. In order to discuss TTIP the Swedish Society for Business and Politics, SPN, organised a seminar in the European Parliament.
NEWS Published:

Government Lets Job Creators Down

AUTUMN BUDGET The recently introduced budget is a failure. The governing coalition of Social Democrats and Greens raise costs for businesses, but do little to promote jobs,” asserts Carola Lemne General Director of the Confederation of Swedish Enterprise. 
NEWS Published:

A Swedish Free-For-All

OPINION The Swedish wage negotiations are heating up. The current round has the Swedish Municipal Workers’ Union threatening to break the established coordination policy of the Swedish Trade Union Confederation. The Municipal Workers demand that nurse assistants receive higher wage rises than all other employee classes. But they are not the alone in causing a free-for-all.
NEWS Published:

Trade Barriers block Swedish Export Success

FREE TRADE The world's best head protection gear for bicyclists is a unique Swedish invention that has a global innovation protection and saves lives. But the gear cannot be sold to consumers in the US. A free trade agreement would increase exports explosively.