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EU treatment of imports from China in anti-dumping cases: Nothing changes on 11 December 2016

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Belgium

A practical Q&A provided by Laurent Ruessmann, Partner in the Brussels office, who is a well-known expert in trade defence matters

Over the past couple of years, there has been increased attention to the expiration on 11 December 2016 of a particular provision within the part of China's WTO Accession Protocol which deals with how other WTO Members calculate the dumping of imports from China in anti-dumping investigations. 

Following are typical practical questions and answers provided by Laurent Ruessmann, Partner in our Brussels office, who is a well-known expert in trade defence matters :

"What will change on 11 December 2016 with the expiration of subparagraph 15(a)(ii) of China's WTO Accession Protocol?"

Nothing will change.  In the absence of definitive guidance from the WTO, each WTO Member is left to figure out for itself what if anything needs to change in its domestic legislation in the light of the expiration of that one subparagraph.  In the EU, the Commission made a proposal last month for significant legislative changes, and that proposal now needs to be considered carefully, especially given the stakes involved. 

"What happen in the EU to anti-dumping cases between 11 December 2016 and the time when legislative changes will be adopted by Council and Parliament and take effect?"

There is no reason not to continue to apply the existing EU anti-dumping legislation in new cases involving imports from China, until any changes passed by the EU Council and Parliament ultimately take effect. 

"Will the European Commission accept new cases against imports from China after 11 December and before legislative changes take effect?"

There is no reason for the Commission not to accept new cases that meet the prima facie evidence requirements of the EU anti-dumping legislation.  At this point, we have no indication the Commission will not open new cases against imports from China after 11 December and before any changes take effect. 

"If the Commission opens a new case against imports from China after 11 December and before changes take effect, is there not a risk that China will bring a WTO action against any measures that would result?" 

The risk that China will bring a WTO action after 11 December is there in any event, even with the new methodology being proposed by the Commission (since China has already said it does not accept that the new methodology is WTO-compliant). 

Also, in terms of timing, if China wants to bring a WTO action, it must start with an official request for consultations.  Official consultations would need to go for at least 30 days before China could request the establishment of a WTO Panel, and a first panel request can be blocked by the country which is the target.  In sum, a request for a WTO Panel would not be acted on before February or March 2017, and changes to the EU's legislation could be well on their way to adoption by then.

In any event, a WTO decision is only to be applied with prospective effect, meaning that if there were an adverse WTO decision (which is not certain), the EU would need to adapt measures put in place after 11 December, if at all, only for the future. 

"How would you sum up what you see as the primary focus of concern at this point of EU manufacturers who seek to maintain effective anti-dumping measures against dumped imports from China?"

In short, I believe those manufacturers are not so much concerned by what happens between 11 December and the effective date of any changes, as they are that any proposed changes to the current legislation not put in place a system that gives away too much to China and other non-market economy countries which are WTO Members.  That is why industry is most concerned to ensure that the European Parliament and EU Member States take the time needed to reflect carefully on the Commission's proposal and make the amendments necessary to ensure that any changes safeguard the effectiveness of measures.

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