The European Commission’s Trade For All strategy, released in October, contains much to appreciate, especially from the Foreign Trade Association’s perspective, which represents EU importers, retailers and brand-names, writes Christian Ewert.
Christian Ewert is Director General of the Foreign Trade Association.
On page 19 of the strategy, there is one promise with which I am particularly satisfied. I say ‘particularly’ because it concerns an issue on which we have been campaigning for many years; transparency in anti-dumping and anti-subsidy investigations.
Many commentators generally acknowledge that the EU’s anti-dumping and anti-subsidy system is a robust system for countering unfair trade practices from countries overseas, and I would count myself among those. However, it is also criticised – rightly in my opinion – for being non-transparent.
It is true that some transparency exists – “interested parties” who take part in such investigations are not completely in the dark – but the fact remains that the world of anti-dumping is one that lives in a state of perpetual twilight. Access to information collected by the Commission is restricted to the non-confidential file.
Unfortunately, this information is presented in an indexed format or missing entirely. As such, an independent verification of the pertinent data and the decisions taken by the Commission based on that data is essentially impossible.
However, a solution does exist. Since the early 1990s, the US system has operated under an Administrative Protective Order (APO) that permits authorised persons (lawyers, consultants and experts) access to confidential data and decisions taken by the examining authority. Of course this access comes with conditions; the most important being the non-disclosure of information, which is enforced by severe penalties for any breach.
This system works and it works well; there are on average a mere nine breaches (all very minor, with no disclosure of confidential material) from at least 4,500 APOs issued per year. As a consequence, the US system is not only far more transparent, but the results are treated with a much lower degree of scepticism than in the EU.
In my opinion, that scepticism is well placed – and I am not a lone voice in the wilderness. Mistakes do occur in EU investigations, and accusations of manipulation are common. These would likely disappear if the files were open to scrutiny, and confidence in the system would increase.
However, there are dissenting voices to the introduction of a similar system in the EU. These generally concern the fear that confidential material will leak, and costs would increase. To the first, I only need refer you to the US – and I hardly think lawyers and anti-dumping practitioners in the EU are inherently less honourable. To the second, whilst it is true that costs may rise as a result of increased access to an increased amount of data, those costs could be limited by agreeing in advance a budget with the lawyer concerned (in fact, normal practice today).
SMEs could also limit their individual costs by grouping together. Finally, and I admit a certain self-interest, a company could ask an expert based in a trade association to which they belong to act on their behalf – here, the service would be covered by the normal annual membership fee. Consequently, there seems to be little validity to those fears.
The EU system would be greatly improved by the introduction of an “APO-type” system and earlier this year we again issued a comprehensive paper that examines the need for such a system. I am, therefore, pleased to see that Commissioner Malmström has listened to our call as that promise on page 19 clearly points in this direction.
I think that a truly transparent anti-dumping system in the EU will benefit both “sides” of the anti-dumping coin; not just importers, but also EU producers (for whom the idea would seem to gaining support). The Foreign Trade Association will continue to work toward this goal, continue to work in trade defence policy, and of course continue to be involved in individual investigations. I am now more confident than ever that our work in this regard will soon be conducted under clear skies rather than impenetrable fog.