EU passes new anti-dumping rules

The European Parliament passed tougher rules against dumped and subsidized imports from third countries on Wednesday.

The EU MEPs voted for the new regulation in the parliament's plenary session.

The core of the amendments is using the "substantial market distortions," which is stated neither in the anti-dumping nor the anti-subsidy rules of the World Trade Organization (WTO), as a replacement of the "surrogate country approach".

The amendment came against a backdrop of the expiry in December 2016 of the Article 15 of the Protocol on China's accession to the WTO, which allowed the EU to regard China as a Non-Market Economy and use the "surrogate country approach" in its anti-dumping investigations against China.

Under Article 15 of the accession protocol signed when China joined the WTO in 2001, the "surrogate country" approach expired on Dec. 11, 2016.

Some Chinese analysts believe that by adopting the "market distortion" scheme, the EU is trying to kill three birds with one stone: safeguard its reputation as a free trader, fulfill obligations endowed by Article 15 while keeping its trump card -- the surrogate country approach.

The World Trade Organization (WTO) logo is seen at the entrance of the WTO headquarters in Geneva, Switzerland, July 24, 2015.

Prior to Wednesday's vote, China's Ministry of Commerce (MOC) told the EU that its new anti-dumping rules granting separate treatment for imports under "significant market distortions" are not in compliance with WTO obligations.

The concept of "significant market distortions" is not stated in the anti-dumping rules of the WTO, said MOC spokesperson Gao Feng at a press conference in October.

Related story: China urges EU to abide by WTO rules after Brussels' new trade 'exceptions'

Wednesday's green lights marked a major step-forward of EU's long-brewed plan to sharpen its trade defense weapons.

In November 2016, the European Commission proposed a non-exhaustive list of examples to be used to identify significant market distortions, unlocking its campaign to replace its "surrogate country" approach with "market distortion."

Following a discussion on June 20 this year, members of the European Parliament's Trade Committee made several key amendments for the Commission's proposed document, including taking into account an exporting country's fiscal, social, and environmental standards when assessing its trade practices.

The amendments were approved by 33 votes to three, with two abstentions.

In its July plenary session, the European parliament gave the green light to start talks with national governments on the new tougher European Union anti-dumping rules.

In October, the Parliament's negotiating team and the EU ministers in Strasbourg struck an informal agreement on new investigation methods for anti-dumping, and put the agreement to a vote in the international trade committee on Oct. 12.

(ASIA PACIFIC DAILY)