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The Future of Trade Defence Instruments pp 3–16Cite as

The Multilateral and EU Legal Framework on TDIs: An Introduction

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Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

Abstract

As a member of the WTO, the EU is obliged to ensure the conformity of its laws, regulations and administrative procedures with its obligations pursuant to WTO law. In turn, these WTO obligations have been strongly shaped by members with significant past experience with TDI use, amongst them the EU. As several contributions analyse and evaluate the new EU regime on TDIs, the purpose of this paper is to highlight the challenges facing the current crisis of the multilateral trade system: in particular, the paper explores the effects the current U.S. blockade of the Appellate Body and the growing pains of the WTO system following the joining of China as a member.

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Notes

  1. 1.

    For a first overview, see for safeguards, the excellent overview of Piérola (2014); for subsidies, Coppens (2014); for dumping and anti-dumping, Van den Bossche and Zdouc (2017), pp. 696–768.

  2. 2.

    Cf. Article VI GATT.

  3. 3.

    Cf. Article 3 ASCM.

  4. 4.

    Remarks of President Donald J. Trump, Inaugural Address, Washington, D.C., 20 January 2017, https://www.whitehouse.gov/briefings-statements/the-inaugural-address/ (last accessed 30 April 2018).

  5. 5.

    The “language in both Article 2.1 of the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994, (…) requires that the increase in imports must have been recent enough, sudden enough, sharp enough, and significant enough, both quantitatively and qualitatively, to cause or threaten to cause “serious injury”.”, Appellate Body Report, Argentina – Footwear (EC), WT/DS121/AB/R, adopted 14 December 1999, DSR 1999:VII, para. 131.

  6. 6.

    Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 14 December 1999, DSR 1999:VII, para. 131.

  7. 7.

    OJ 2016 L 176/21–54 as amended by OJ 2017 L 228/1–7.

  8. 8.

    OJ 2016 L 176/55–91 as amended by OJ 2017 L 338/1–7.

  9. 9.

    Further references see e.g. Van Bael and Bellis (2011), passim.

  10. 10.

    OJ 2015 L 83/16–32; OJ 2015 L 123/33–49. See Müller (2017), pp. 205–226.

  11. 11.

    See infra, Sect. 3; for more information on the different perspectives of this reform are addressed in Part II of this book.

  12. 12.

    Kennedy (2013), pp. 46 et seq.

  13. 13.

    See World Trade Organization, WTO successfully concludes negotiations on China’s entry, 17 September 2001, https://www.wto.org/english/news_e/pres01_e/pr243_e.htm (last accessed 30 April 2018).

  14. 14.

    World Trade Organization, Ministerial Conference Decision of 10 November 2001 on the Accession of the People’s Republic of China, WT/L/432, 23 November 2001.

  15. 15.

    Espa (2012), pp. 1399–1424.

  16. 16.

    Cf. Section 15 CAP (Price Comparability in Determining Subsidies and Dumping):

    Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping Agreement”) and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with the following:

    1. (a)

      In determining price comparability under Article VI of the GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology that is not based on a strict comparison with domestic prices or costs in China based on the following rules:

      1. (i)

        If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability;

      2. (ii)

        The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product.

    2. (b)

      In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if there are special difficulties in that application, the importing WTO Member may then use methodologies for identifying and measuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China may not always be available as appropriate benchmarks. In applying such methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China.

    3. (c)

      The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures.

    4. (d)

      Once China has established, under the national law of the importing WTO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member’s national law contains market economy criteria as of the date of accession. In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector.

  17. 17.

    Paragraph 16 of the Protocol of Accession; see Appellate Body Report, United States – Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R, adopted 5 September 2011, DSR 2011:IV, paras. 120 and 131 et seq.

  18. 18.

    Vermulst et al. (2016), pp. 212–228; see also Part II of this book, passim.

  19. 19.

    Illustrative: Phillips T, China told to follow the leader Xi Jinping in thought, word and deed. The Guardian, 5 March 2018, https://www.theguardian.com/world/2018/mar/05/china-told-to-follow-the-leader-xi-jinping-in-thought-word-and-deed (last accessed 30 April 2018).

  20. 20.

    Wu (2016), pp. 261–324.

  21. 21.

    Jackson (2003), p. 26.

  22. 22.

    Cf. Article 1.1(a)(1)(iv) ASCM.

  23. 23.

    Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 11 March 2011, DSR 2010:III.

  24. 24.

    Panel Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, adopted 22 October 2010, para. 8.136.

  25. 25.

    Invoking the ILC (International Law Commission) Draft Articles on Responsibility of States for Internationally Wrongful Acts.

  26. 26.

    Cartland et al. (2012), p. 1001.

  27. 27.

    Appellate Body Report, Canada – Measures Relating to the Feed-in Tariff Program, WT/DS412/AB/R and WT/DS426/AB/R, adopted 6 May 2013, DSR 2013:I, paras. 5.106 et seq.

  28. 28.

    The practice of the U.S. to put the value of “zero” on any negative dumping, thus leading to dumping whenever there was some dumping (i.e. a positive dumping margin (e.g. with the value “five”, i.e. the product is sold “five” below the home market price) during, e.g., 6 months, as it cannot be cancelled out by corresponding (or greater) negative dumping margins during the remainder of the year, because negative dumping is valued at “zero”.

  29. 29.

    Appellate Body Report, United States – Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea, WT/DS464/AB/R, adopted 7 September 2016, DSR 2016:II, paras. 5.191 et seq.

  30. 30.

    Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted 6 October 2016, DSR 2016:IV, paras. 6.37 et seq.

  31. 31.

    World Trade Organization, Appellate Body Annual Report for 2016, WT/AB/27, 16 May 2017.

  32. 32.

    World Trade Organization, Appellate Body Annual Report for 2016, WT/AB/27, 16 May 2017, Annex 4.

  33. 33.

    World Trade Organization, Appellate Body Annual Report for 2016, WT/AB/27, 16 May 2017, Annex 4.

  34. 34.

    See also infra, Malashevich and Love.

  35. 35.

    All quotes from Office of the United States Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States on the Trade Agreements Program Office, March 2018, https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2018/2018-trade-policy-agenda-and-2017 (last accessed 30 April 2018), pp. 22–28.

  36. 36.

    Inside U.S. Trade’s World Trade Online, Appellate Body, China NME fights to dominate WTO dispute settlement debate in 2018, 26 December 2017, https://insidetrade.com/daily-news/appellate-body-china-nme-fights-dominate-wto-dispute-settlement-debate-2018 (last accessed 30 April 2018).

  37. 37.

    Economic Report of the President, Together with The Annual Report of the Council of Economic Advisers, Updating American Trade Policy, February 2018, https://insidetrade.com/sites/insidetrade.com/files/documents/2018/feb/wto2018_0082.pdf (last accessed 30 April 2018), p. 277.

  38. 38.

    Office of the United States Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States on the Trade Agreements Program Office, March 2018, https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2018/2018-trade-policy-agenda-and-2017 (last accessed 30 April 2018), pp. 19 et seq.

  39. 39.

    See Inside U.S. Trade’s World Trade Online, China jabs U.S. for using WTO dispute settlement as it complies in poultry fight, 28 February 2018, https://insidetrade.com/daily-news/china-jabs-us-using-wto-dispute-settlement-it-complies-poultry-fight (last accessed 30 April 2018).

  40. 40.

    See Inside U.S. Trade’s World Trade Online, China jabs U.S. for using WTO dispute settlement as it complies in poultry fight, 28 February 2018, https://insidetrade.com/daily-news/china-jabs-us-using-wto-dispute-settlement-it-complies-poultry-fight (last accessed 30 April 2018).

  41. 41.

    Article IX:1 WTO Agreement.

  42. 42.

    See for example the shared EU/U.S. Legal Interpretation—Article VI:1 of the General Agreement on Tariffs and Trade 1994, the Second Note Ad GATT 1994 Article VI:1, the Practice of the GATT Contracting Parties in the Application of GATT 1994 Article VI:1, the Accessions of Poland, Romania, and Hungary to the GATT, Article 2 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, and Section 15 of the Protocol of Accession of China to the WTO, https://ustr.gov/sites/default/files/enforcement/WTO/US.Legal.Interp.Doc.fin.%28public%29.pdf (last accessed 30 April 2018).

  43. 43.

    Under the Slovak Presidency, the Council finally agreed to a position, Council of the European Union, Trade defence instruments: Council, Council agrees negotiating position, 13 December 2017, http://www.consilium.europa.eu/en/press/press-releases/2016/12/13/trade-defence-instruments-general-approach/pdf (last accessed 30 April 2018).

  44. 44.

    Overview at Hoffmeister (2015), pp. 365–376.

  45. 45.

    OJ 2017 L 338/1, pp. 1–7.

  46. 46.

    European Commission, Communication from the Commission to the Council and the European Parliament on Modernisation of Trade Defence Instruments, Adapting trade defence instruments to the current needs of the European Community, 10 April 2013, COM(2013) 191 final.

  47. 47.

    See Council, Trade defence instruments: EU ambassadors confirm the outcome of the final political trilogue with European Parliament, 20 December 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/12/20/trade-defence-instruments-eu-ambassadors-confirm-the-outcome-of-the-final-political-trilogue-with-european-parliament/pdf (last accessed 30 April 2018).

  48. 48.

    Council of the European Union, Trade defence instruments: EU ambassadors confirm the outcome of the final political trilogue with European Parliament, 20 December 2017, http://www.consilium.europa.eu/en/press/press-releases/2017/12/20/trade-defence-instruments-eu-ambassadors-confirm-the-outcome-of-the-final-political-trilogue-with-european-parliament/pdf (last accessed 30 April 2018).

  49. 49.

    See Part II of this book.

  50. 50.

    Corrected version on 20 December 2017: see European Commission, Commission staff working document on significant distortions in the economy of the People’s Republic of China for the purposes of trade defence investigations, 20 December 2017, SWD(2017) 483 final/2, http://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156474.pdf (last accessed 30 April 2018).

  51. 51.

    European Commission, Commission staff working document on significant distortions in the economy of the People’s Republic of China for the purposes of trade defence investigations, 20 December 2017, SWD(2017) 483 final/2, http://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156474.pdf (last accessed 30 April 2018).

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Authors and Affiliations

  1. University of Bern, School of Law, Institute of European and International Economic Law, Bern, Switzerland

    Michael Hahn

  2. World Trade Institute, Bern, Switzerland

    Michael Hahn

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Editors and Affiliations

  1. Faculty of Law, Saarland University, Saarbrücken, Germany

    Marc Bungenberg

  2. Institute of European and International Economic Law, University of Bern, Bern, Switzerland

    Michael Hahn

  3. University of Passau, Passau, Germany

    Christoph Herrmann

  4. Cleary Gottlieb Steen & Hamilton LLP, Brussels, Belgium

    Till Müller-Ibold

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Hahn, M. (2018). The Multilateral and EU Legal Framework on TDIs: An Introduction. In: Bungenberg, M., Hahn, M., Herrmann, C., Müller-Ibold, T. (eds) The Future of Trade Defence Instruments. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-319-95306-9_1

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