European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Instruments to protect trade are used to correct the effects of distortion of trade induced by unfair practices at the international level. From a political and economic point of view, the protection against unfair trade is a fundamental factor to preserve free trade, which is guaranteed, at international level, by the agreements of the World Trade Organization (WTO). Within the Union, instruments to protect trade and access to markets have as their object the protection of European undertakings against importations made under unfair conditions. Therefore, they must both serve the general economic interest of the Union and guarantee compliance with the rules of international trade.

In effect, Article 206 TFEU states that the customs union established between the Member States must contribute to the development of world trade without restrictions on trade and with lowered customs barriers. As a necessary corollary to the customs union, the common commercial policy, which constitutes one of the objectives of the Union, is based, according to Article 207 TFEU, on uniform principles, particularly with regard to changes in tariff rates, tariff and trade agreements, measures of liberalization, export policy and measures to protect trade. Instruments to protect trade group together anti-dumping, anti-subsidy and protection measures. 

Anti-dumping measures constitute the major instrument to protect trade for the Union industry. Dumping is characterized by the import of goods in the European Union at a lesser value than their normal value on their market of origin. Corrective measures taken to put an end to any harm to the Union industry take the form of duties received on products in dispute in order to strictly re-establish the balance that should result from fair competition.

Anti-dumping and anti-subsidy measures fell within the same system  until 1995 where the transposition of the WTO agreements  resulted in the adoption of two different provisions: Regulation No 384/96 on protection against dumped imports from countries not members of the European Community, codified by Regulation No 1225/2009, repealed and replaced by Regulation No 2016/1036 of 8 June 2016  and Regulation No 3284/94 replaced by Regulations No 2026/97 and 597/2009, now repealed and replaced by Regulation No 2016/1037 of 8 June 2016 on protection against subsidized imports from countries not members of the European Union . Common points remain between the systems as to form and substance. The definition of the products or the Union industry, how determining the existence of harm, remain the same. Therefore, only rules specific to anti-dumping measures will be reviewed in detail. 

The two bodies of rules are to be distinguished by the number of initiated proceedings. There are far more anti-dumping proceedings than anti-subsidy proceedings . This difference may be explained by the difficulties encountered to obtain precise information on the subsidies given by non-member countries, by the low level of generally imposed countervailing duties and, above all, the political connotation of anti-subsidy measures sometimes understood not so much as intervention but at least as a criticism of the domestic decisions of non-member countries that might generate retaliation against European undertakings. The Commission carried out a review on the adaptation of trade protection measures to a changing world economy, marked, in particular, by the emergence of India and China . 

Safeguard measures, which are in the form of quantitative restrictions to imports, quotas or supervisory measures, and whose system relies on three main regulations , are rarely subject to litigation.

A trade barrier regulation (TBR) was also adopted in 1994 in order to allow any European undertaking to notify to the Commission the trade barriers restricting its access to the market of a non-member country . That regulation, repealed and codified by Regulation No 2015/1843 , refers to goods, services and intellectual property rights. Since 1996, twenty-five TBR procedures have been initiated, including twelve which resulted in satisfactory action, and some being still followed up .

Trade protection instruments, which should be used to find a fair balance between free trade and fair trade, include however subjectivity. Anti-dumping measures mainly rely on European interest. Measures can be established only if they are not contrary to the Union general interest. Such a criterion is not required by the WTO anti-dumping agreement. Anti-subsidy measures refer to aid granted to their producers by non-member States, which has also as object to protect their national industry. The struggle against unfair competition on international markets therefore goes against the same difficulties as that on the internal market with the control of State aid, where the intrinsic characteristics of the conduct of the State are more taken into account than its anticompetitive effects .

Prior to the repeal of Council Decision No 1999/468 of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission  by Regulation No 182/2011 of 16 February 2011  and the adoption of the new regulations No 2016/1036 and No 2016/1037, the Commission and the Council shared  powers for the adoption of implementing measures in matters of commercial policy . Now only the Commission has implementing powers . It remains however subject to the control of the Member States through a committee composed of representatives of the States and exercises its implementing powers in accordance with one of two procedures, namely the advisory procedure or the examination procedure . 

The European provisions having been adopted to meet the Union's international obligations, the rules set up by the WTO influence rather widely the Commission's decisions , who interpret the European basic regulations in the light of the corresponding provisions of the WTO agreements . The European court may thus base itself expressly on an article of a WTO agreement where the European regulation does not contain sufficiently detailed provisions , or be seized in order to assess the lawfulness of basic regulations in view of the WTO agreements. The European authorities may also have to review their findings in view of a non-binding decision taken by the WTO's Dispute Settlement Body (DSB) whose decisions constitute useful guidelines for interpretation. Lastly, the European legislator has sometimes supplemented the gaps of transposed international provisions. The anti-circumvention device set forth in the anti-dumping regulation, but not included in the 1994 anti-dumping code, is an example thereof.

Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community, OJ L 209 of 2 August 1988, 1; which replaces Council Regulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community, OJ L 201 of 30 July 1984, 1.

Final act of the Uruguay Round of trade negotiations of 1994. The first anti-dumping code of GATT (General Agreement on Tariffs and Trade) was signed during the 1967 Kennedy round.

The control of State aid now appears either as an avatar of the unfair competition theory, or as an instrument of economic policy in the hands of the Commission which therefore substitutes its assessment in the field of aid to that of the Member States: see L. VOGEL, European Competition Law, LawLex/Bruylant, 2015.

In effect, Article 1 of Decision No 1999/468 provided that "Other than in specific and substantiated cases where the basic instrument reserves to the Council the right to exercise directly certain implementing powers itself, such powers shall be conferred on the Commission in accordance with the relevant provisions in the basic instrument [...]", with the previous anti-dumping and anti-subsidiy regulations constitutiing the basic instruments in question providing for the residual powers to be conferred on the Council.

See Regulation No 182/2011 to which Regulation No 2016/1036 and Regulation No 2016/1037 refer which no longer provide for the residual powers of the Council. Recital 31 of Regulation No 2016/1036 specifies that "the implementation of this Regulation requires uniform conditions for the adoption of provisional and definitive duties, and for the termination of an investigation without 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". However, although we will refer from now on to the Commission alone, we will continue to illustrate certain matters with instuments adopted by the Council prior to the regulation insofar as they remain relevant under the new system.

This was also the case in respect of the Council when it had powers in matters relating to anti-dumping. 

The Commission clearly mentions on its website that the rules applicable regarding anti-dumping are those of the anti-dumping regulation supplemented by those of the WTO agreement: http://ec.europa.eu/trade/tackling-unfair-trade/trade-defense/anti-dumping/index_en.htm.

See Case T-45/06 Reliance Industries v Council and Commission [2008] ECR II-2399, LawLex200900001357JBJ, where the solution relies on Article 11(3) of the 1994 anti-dumping agreement.

Regulation No 2016/1036 of 8 June 2016 on protection against subsidized imports from countries not members of the European Union, OJ L 176 of 30 June 2016, 21, repealing and replacing Regulation No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community, OJ L 343, 22.12.2009, which repeals and replaces without changing the law Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community, OJ L 56 of 6 March 1996, 1-20, which replaces Council Regulation (EC) No 3283/94 of 22 December 1994 on protection against dumped imports from countries not members of the Community Union, OJ L 349 of 31 December 1994, 1, which replaces Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community, OJ L 209 of 2 August 1988, 1; which replaces Council Regulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community, OJ L 201 of 30 July 1984, 1.

Regulation No 2016/1037 of 8 June 2016 on protection against subsidized imports from countries not members of the European Union, OJ L 176 of 30 June 2016, 55, repealing and replacing Regulation No 597/2009 of 11 June 2009 on protection against subsidized imports from countries not members of the European Union, OJ L 188 of 18 July 2009, 93, repealing and replacing Regulation No 2026/97 of 6 October 1997, OJ L 288 of 21 October 1997 1-33, replacing Council Regulation No 3284/94 of 22 December 1994, on protection against subsidized imports from countries not members of the European Union, OJ L 349 of 31 December 1994, 22, replacing Council Regulation No 2423/88 of 11 July 1988 on protection against dumped or subsidized imports from countries not members of the European Economic Community, OJ L 209 of 2 August 1988, 1.

134 anti-dumping measures at the end of 2014 as compared to 13 anti-subsidy measures according to the 33rd Annual Report from the Commission to the European Parliament on the Community's anti-dumping, anti-subsidy and safeguard activities of 3 August 2015g.

2006 Green Paper: Communication from the Commission of 6 December 2006, Europe's trade defense instruments in a changing global economy, COM(2006) 763 final.

Regulation No 2015/478 of 11 March 2015 on common rules for imports, OJ L 83 of 27 March 2015; Regulation No 2015/1843 of 29 April 2015  on common rules for imports from certain third countries, OJ L 123 of 19 May 2015, 33, and repealing Council Regulation No 427/2003 of 3 March 2003; Regulation No 2015/936 of 9 June 2015 on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific Union import rules, OJ L 160 of 25 June 2015, 1, repealing Council Regulation No 517/94 of 7 March 1994.  

Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the World Trade Organization (WTO), OJ L 349 of 31 December 1994, 71.

Regulation No 2015/1843 of 6 October 2015 laying down Union procedures in the field of the common commercial policy in order to ensure the exercise of the Union’s rights under international trade rules, in particular those established under the auspices of the World Trade Organization (codification), OJ L 272 of 16 October 2015, 1.

See, for details on these cases: 'Trade Barriers regulation: opening markets for European exporters' European Commission, Directorate General Trade, April 2008 (ISBN 978-92-79-07478-3).

388. Trade defense instruments