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European Union may soon harden anti-dumping rules

November 7, 2016

The European Commission is asking Member States to support its efforts to provide the European Union (EU) with updated, strengthened and more robust trade defence instruments.

Despite the fact that the Commission is using the available trade defence instruments toolbox to its full extent, these have proven insufficient to deal with the huge overcapacities that result in dumped exports on the EU market.

The current EU legislation caps the levels of anti-dumping duties, hampering the Commission's efforts to address the challenges facing industries - such as the steel sector - which are suffering as a result of huge increases in import volume of dumped products.

This is due to the systematic application of the so called Lesser Duty Rule (LDR). To impose anti-dumping measures, there needs to be proven dumping from a third country and proven injury for EU industry with a causal link between them. The level of anti-dumping duties is then imposed at the level of the dumping margin or the level that removes injury, whichever is lower (the 'lesser duty').

In practical terms, this means that on comparable dumped products originating from China, like certain cold rolled flat steel products, the average EU anti-dumping duty was 21,1%, while in the US, where the LDR is not applied, the average anti-dumping duty was 265,8%.

In response to new challenges and transitions in some world economies, the Commission intends to propose amendments to the EU Trade Defence legislation and urges member countries to promptly approve them.

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