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Vol. I: Issue 10  |  July 24, 2006  |  www.crowell.com


ANTI-DUMPING IN THE SPOTLIGHT: COMPARISON OF THE EU AND U.S. ANTI-DUMPING MODELS

A Common Question Asked, Especially by Multilateral Companies, is “What are the Key Differences Between the U.S. and EU Systems for Imposing Anti-Dumping Duties?” In this section, some of the main answers are given.

Questions about the differences between the EU and U.S. models for imposing anti-dumping duties arise because the two systems are viewed as being at the opposite ends of permitted systems allowed under the WTO rules. One takes a strict, inflexible and rigorous approach to applying anti-dumping duties while the other contains more liberal rules designed to reduce the excessive harshness that can be caused by a strict approach.

As more and more countries enact and apply antidumping legislation, their structures frequently break down into two general categories, depending on whether they follow the “EU Model” or the “U.S. Model.” To help manufacturers and resellers caught up in dumping cases around the world decipher the nature of these programs, here is a short list of the key differences between those two regimes.

1. Establishing the Need for Duties – the “EU Interest” Rule

Both EU and U.S. antidumping laws require three elements in order for a petitioner or complainant to be granted relief in the form of anti-dumping duties – under both laws, the petitioner must be able to demonstrate that (1) the merchandise in question is being dumped into the U.S. or EU; (2) the U.S. or EU industry is suffering injury; and (3) the injury is caused by the dumped merchandise.

The EU law, however, adds a fourth element – petitioners or complainants must also demonstrate that adoption of antidumping duties is in the overall “EU interest.” Where the European Commission finds that adoption of the antidumping duties is not in the EU's interest, the duties will not be levied, notwithstanding that petitioners have shown dumping, injury and causation. When determining whether the imposition of duties is in the EU's interest as a whole, the Commission must assess all the various interests involved, including the interests of the domestic industry and users and consumers. Other factors such as the interests of maintaining competition on the EU market, as well as maintaining and developing crucial technologies in the EU, are also considered. Finally, political considerations are sometimes taken into account.

2. Quantifying the Duty – the “Lesser Duty” Rule

Both the U.S. and EU models involve a calculation of company-specific dumping “margins” during antidumping investigations. That margin is usually the difference between the home market price (or normal value) on the one hand and the export market price of the goods, adjusted for shipping costs and other transactional differences, on the other. In cases where the respondent companies are selling below the cost of production this calculation may change.

In the U.S., assuming the regulatory authorities make affirmative findings as to both dumping and injury, these company-specific margins become the dumping duty rates applied to merchandise manufactured by those companies; those rates may only be changed via annual reviews (see Item 3 below). In the EU, however, the company-specific dumping margins act only as a “cap” on the duty rates. In other words, anti-dumping duties cannot be higher than the dumping margins, but the Commission can – and is required to – apply lower duties if it finds that such lower duties will eliminate the injury caused by the dumping. The actual numbers are calculated by reference to the levels of price undercutting and/or underselling that occurs.

This “lesser duty rule” is an important aspect of EU anti-dumping law. In around half of the EU's antidumping cases, the lesser duty is applied leading to lower duty levels. In turn, as a result of the lesser duty rule, dumping duties on average tend to be considerably lower in the EU than in the U.S.

3. Adjusting the Margins – Periodic Reviews

The U.S. and EU models differ significantly in the nature and frequency of periodic reviews of the antidumping duty order issued by the regulatory authorities. In the U.S., by law the Department of Commerce (“Commerce”) must publish a notice of opportunity to request a review each year during the anniversary month of the antidumping duty order. In response to that notice, respondent companies may request that their sales to the U.S. during that period be reviewed, and petitioner companies may also request reviews of particular sellers. The threat of such requests by petitioners is thought to discourage respondents from dumping to a larger extent after the imposition of antidumping duties. If no such requests are made, no review is conducted.

However, if a review of any respondent(s) is requested, by itself or a petitioner, Commerce conducts what amounts to a re-investigation of the dumping for that review period, and recalculates the dumping margin for that respondent(s). If the margin increases, the respondent is required to pay the additional duties associated with its entries, plus interest. If the margin decreases, Commerce and U.S. Customs and Border Protection will issue refunds of the difference, likewise with interest.

In the EU, there is no mandatory annual review procedure. Instead, EU law includes a procedure known as an “interim review” – under this procedure, an importer may, at any time after a certain time period has lapsed subsequent to the measures being imposed, submit an application to the Commission arguing that the dumping margin has been reduced or eliminated and providing relevant supporting evidence. If the application is accepted and an interim review conducted, the Commission can decide whether and to what extent the duties should be adjusted.

An EU importer may also request reimbursement of duties collected where it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or reduced to a level which is below the level of the duty in force. This is known as the EU “refund procedure” and is a system which allows millions of Euros in unjustified anti-dumping duty payments to be reclaimed by EU importers.

* * *

These are a few of the major distinctions between the U.S. and EU antidumping systems, but there is a host of additional differences and quirks as well. For more information on U.S. and EU antidumping laws and procedures, please contact Robert MacLean in our Brussels office at rmaclean@crowell.com or Alex Schaefer in our Washington, DC office at aschaefer@crowell.com.

ANTI-DUMPING IN THE SPOTLIGHT: EU ANTI-DUMPING

Spreading the Costs and Impact of Imposing EU Anti-Dumping Measures. A Closer Look at the Suggested EU Anti-Dumping “Delayed Duty System” in the Leather Shoes Investigation.

The European Commission's investigation into alleged dumping of leather shoes by Vietnam and China is entering its final stage. The preliminary investigation apparently showed the existence of injurious dumping by Chinese and Vietnamese exporters. Since April 2006, the EU has therefore applied provisional anti-dumping duties on leather footwear of 19.4% for China and 16.8% for Vietnam. The preliminary findings of dumping, injury and causation could be confirmed in the final determination to be issued in October.

Ahead of the final determination, the Commission has, however, recognized that the case of leather shoes is special, given that Chinese-made shoes were subject to quantitative restrictions imposed by the EU until January 2005. The injury that was allegedly sustained by the EU industry was therefore greater during the latter part of the investigation period, which ended in March 2005. To take account of this factor, the Commission has proposed, for the first time in an EU anti-dumping investigation, a so-called ‘Deferred Duty System' (DDS).

The DDS would permit a certain quota of Chinese and Vietnamese-made shoes to enter the European market without the imposition of an anti-dumping duty. Imports beyond that quota would be subjected to anti-dumping duties. The DDS process will operate under a license-based system for imports. These licenses would be granted by the EU Member States concerned, in order to assure an equitable distribution of the goods which are free of anti-dumping duties.

EU shoe importers, while remaining generally opposed to the imposition of anti-dumping measures on shoes, have announced that they are willing to consider the DDS under certain conditions, stating that at least such a system is predictable and affects all market participants in an equitable fashion.

The duty proposed by the Commission for “over-quota” imports is higher than provisionally established, namely 23% for Chinese shoes and 29.5% for Vietnamese shoes. The thresholds set by the Commission before any anti-dumping duties will apply amount to 140 million pairs from China and 95 million pairs from Vietnam, which respectively amounts to 80% and 92% of the 2005 import levels of these countries.

For more information, please contact Margareta Djordjevic in our Brussels office at mdjordjevic@crowell.com.

ANTI-DUMPING IN THE SPOTLIGHT: U.S. ANTI-DUMPING

More Trouble for the “Byrd Act” at Home. The Byrd Amendment (formally known as “The Continued Dumping and Subsidy Offset Act of 2000”), which distributes collected U.S. antidumping duties to petitioners and supporters of anti-dumping complaints, has suffered yet another setback.

First, a WTO dispute settlement panel found that Byrd violated certain WTO-agreed international standards for applying anti-dumping duties. The U.S. Congress subsequently repealed it but deferred immediate repeal. Then the U.S. Court of International Trade (CIT) ruled that NAFTA prohibited the application of the Byrd Act to imports from Mexico and Canada. Now, in a decision dated July 13, 2006, the CIT in PS Chez Sidney, L.L.C. v. U.S. Int'l Trade Comm'n, slip opinion 06-103, has found that the Byrd Act violates the First Amendment of the U.S. Constitution.

The plaintiff in Chez Sidney is a Louisiana seafood producer. During the investigation of the antidumping petition concerning freshwater crawfish tail meat from the People's Republic of China, the plaintiff checked the box showing “Support” for the petition during the preliminary investigative phase, but then answered “Take No Position” during the final investigative phase. As a result, when the U.S. Government published a list of persons eligible to claim Byrd distributions collected as a result of the petition, the plaintiff was not on the list. The plaintiff appealed, asserting along with amici “that the support requirement amounts to compelled speech burdened by unconstitutional conditions, involves imposition of a viewpoint-based eligibility requirement for a government subsidy, and is an over-broad burden on speech in a limited public forum.”

The Chez Sidney court found that the U.S. Government may legitimately reward or penalize protected speech. Nonetheless, after examining applicable precedents, the court found that Byrd had to satisfy a high “strict scrutiny standard,” where it “must show that the burden it imposes is ‘necessary to serve a compelling state interest,' and that it is ‘narrowly drawn to achieve that end.'” The court concluded that the Byrd “support” requirement did not meet this standard: “Where, as here, the respondent is required by law to provide an honest answer regarding support or non-support for the petition, and the Government is required to seek it; where the response is burdened for opposing, or not supporting the ‘correct' side of a public policy question, and where a narrower and more accurate alternative exists, the strict scrutiny test is simply not met.” As a result, because the Byrd distribution was based on “the answer to what is inherently a political question,” it violated the First Amendment.

The impact of Chez Sidney on what remains of Byrd's life is uncertain, especially since the court indicated there was no reason to delay an appeal. Still, it is unlikely that Chez Sidney will halt Byrd distributions prematurely as the court found that it was the way the Government limited those distributions that violated the First Amendment, not the distributions themselves. Indeed, the court suggests, in its opinion, that there is a compelling government interest to distribute collected duties just to those members of the domestic industry harmed by the dumping. It thus appears from the opinion that if the U.S. Government found a fact-oriented method to identify those members, distributions based on fact likely would not fail the strict scrutiny required by the First Amendment.

For more information, please contact Matthew P. Jaffe in our Washington, DC office at mjaffe@crowell.com.

THE WTO IN THE SPOTLIGHT: WTO D-G PASCAL LAMY MAKES PLEA TO G-8 TO SAVE THE DDA

The Director-General of the WTO, Pascal Lamy, has warned leaders at the G-8 meeting in St. Petersburg, Russia, that the DDA multilateral round will fail without their intervention.

Addressing the G-8 leaders directly, D-G Lamy said that the chief political responsibility for the success or failure of the negotiations lies with the G-8 members, which collectively represent 85 per cent of the world's GNP and 75 per cent of world trade.

The message transmitted was simple and brief and boiled down to two points:

  • At this stage, the current deadlock will lead to failure very soon if ministers are not given further room for negotiation;

  • Domestic political problems have given rise to challenges. However, the risk of a failure is now considerable.

On the face of it, the differences that separate the opposing parties do not seem insurmountable: a few billion dollars of trade-distorting agricultural subsidies, and that would have to be eliminated or transformed within a few years; a few billion in supplementary agricultural exports for some, and hence supplementary imports for the others, and a similar order of magnitude for industrial products. In other words, a few percentage points in addition to the concessions already proposed.

But the problems, according to Lamy are not technical, but political. What is at issue is how public opinion views these few extra percentage points in terms of benefits obtained. In his view, the price set for these concessions is too high. Failure would mean scrapping the results that have been accumulated at the negotiating table over the past five years, results that would make this round the most ambitious of all the rounds concluded over the past 50 years, whether in terms of opening up trade in agriculture, industry or services, or strengthening disciplines in the areas of subsidies or trade regulation. In fact, these negotiations are already potentially worth two to three times more than the preceding ones.

Finally, failure would send out a strong negative signal for the future of the world economy and the danger of a resurgence of protectionism at a time when the pace of globalization is weighing heavily on the social and economic fabric of many countries and when geopolitical instability is on the rise.

For more information, please contact Robert MacLean in our Brussels office at rmaclean@crowell.com.

THE WTO IN THE SPOTLIGHT: REVIEW SYSTEM ADOPTED FOR APPROVING REGIONAL TRADE AGREEMENTS

The WTO's Negotiating Group on Rules has given formal approval of a new transparency mechanism for assessing all future regional trade agreements (RTAs) and their compatibility with the WTO rules.

This decision is intended to break the current deadlock inside the WTO for the approval of regional trade agreements. It is often forgotten that all bilateral free trade agreements must be submitted to the WTO for review for compatibility with Article XXIV of the GATT 1994. Approval means that, overall, the proposed bilateral agreements liberalizes trade more than it obstructs it. Differences between members on how to interpret the criteria for assessing the consistency of RTAs with WTO rules have created a lengthening backlog of uncompleted reports in the Committee.

The new transparency mechanism provides for early announcement of any RTA and notification to the WTO. Members will consider the notified RTAs on the basis of a factual presentation by the WTO Secretariat. The Committee on Regional Trade Agreements will conduct the review of RTAs falling under Article XXIV of General Agreement on Tariffs and Trade (GATT) and Article V of the General Agreement on Trade in Services (GATS).The Committee on Trade and Development will conduct the review of RTAs falling under the Enabling Clause (trade arrangements between developing countries).

RTAs, which includes bilateral free trade agreements between countries that are not in the same region, have become widespread. It is estimated that more than half of world trade is now conducted under RTAs. Some 197 such agreements in force have been notified to the GATT/WTO.

The transparency mechanism is to be implemented on a provisional basis. The Negotiating Group on Rules has forwarded the decision to the Trade Negotiations Committee. Members are to review, and if necessary modify, the decision, and replace it by a permanent mechanism adopted as part of the overall results of the Doha Round.

For more information, please contact Robert MacLean in our Brussels office at rmaclean@crowell.com.

THE WTO IN THE SPOTLIGHT: VIETNAM SET TO BECOME 150th MEMBER OF THE WTO

The chairperson of Vietnam's membership negotiations announces final agreement on accession to be put before the WTO General Council meeting in October.

With Vietnam's last bilateral market access negotiations completed in May (with the United States and Mexico), work is now focusing on translating those bilateral deals into the lengthy detailed commitments (or “schedules”) that Vietnam would apply to trade with the entire WTO membership. It is also focusing on completing a multilateral report that includes Vietnam 's commitment to make its laws, rules and regulations comply with WTO agreements and to satisfy its future fellow-members.

Delegations in the working party of over forty WTO members (counting the EU as one) echoed Vietnam 's desire to join the WTO by the time Vietnam hosts the Asia-Pacific Economic Cooperation summit in November. This means that accession would be approved at the next WTO General Council meeting scheduled for October this year.

For more information, please contact Robert MacLean in our Brussels office at rmaclean@crowell.com.

Russia Within Striking Distance of Joining the World Trade Organization as the U.S. and Russia Gets Close to Reaching a Deal on Russia's Accession.

Despite reassurances from both Russian and U.S. negotiators during the last G8 summit that the two countries were about to reach a deal on Russia's accession to the World Trade Organization (WTO), the news came shortly thereafter that the negotiators were unable to go all the way and conclude the agreement. Both sides did however stress that the bilateral accession talks between the U.S. and Russia had come near to the end.

Under WTO rules, terms and conditions for accession to the WTO must be negotiated separately with each WTO member on a bilateral basis. The candidate country must consequently reach an agreement with concessions for non-discriminatory market access for goods and services with around 150 countries before it can accede to the WTO. The concessions made towards one country are, however, automatically extended to all other Members of the WTO when the candidate country finally accedes. In reality, agreements with the U.S. and the EU are the most important ones that will bring the candidate country a long way in its accession talks.

Russia has already been negotiating its WTO accession for twelve years. The U.S. deal is the last major obstacle in becoming a fully fledged member. The EU and Russia concluded their part of the talks already in May 2004. The EU deal has however been criticized for being too lenient towards the Russians.

U.S. concerns have centered on issues such as access to Russian financial markets (the permission for foreign banks to open branches in Russia and for non-residents to work on the insurance market), civil aviation, agriculture (agricultural imports quotas and subsidies to the agricultural sector), phytosanitary control and intellectual property rights protection. After the last talks, U.S. officials said that the remaining issues have now been boiled down to the application of veterinary standards to U.S. beef and pork imports. Important issues such as the one regarding financial services had been worked out. This is good news, since the EU deal with Russia failed precisely on this point.

It remains to be seen, however, how the U.S. will address the related issue of energy supply. Although strictly not part of the WTO framework, the EU reached an agreement with the Russians to the effect that Russia committed to gradually increase its prices on gas to double the current level by 2010, while maintaining the Gazprom monopoly for gas exports abroad. Russia also agreed to ensure that the Siberian over-flight charges are entirely cost-based, transparent and non-discriminatory by 2013.

Russia has long been hoping to join the WTO in 2007. Despite the recent failure to conclude the U.S.-Russia talks, the prospects for this being realized are still bright. U.S. negotiators expect that a final deal can be reached already in November this year.

Once Russia becomes a member of the club of nations supporting free trade, it will be granted the same non-discriminatory market access treatment as all other WTO members vis-à-vis its WTO trading partners. At the same time, exporters of goods and services to Russia will benefit from increased predictability in their trading relations.

For more information, please contact Margareta Djordjevic in our Brussels office at mdjordjevic@crowell.com.

Note: This report has been revised since the original publication on July 24, 2006 to reflect the observations of an alert reader who identified the limited impact of the rescission with regards to the ITAR. The ITAR continues to proscribe imports and exports of defense articles to Libya. C&M appreciates and encourages all comments, questions, and reactions on any aspect of the ITB. Thank you.

The State Department has rescinded the 1979 designation of Libya as a state sponsor of terrorism in a notice published in the Federal Register on July 13, 2006. Despite this recission, Libya will remain a proscribed destination for exports and imports of defense articles and services under the International Traffic in Arms Regulations until publication in the Federal Register of a separate notice under the ITAR.

The rescission of Libya's designation as a state sponsor of terrorism means that Libya is no longer subject to the Terrorism List Government Sanctions Regulations, which prohibit certain financial transactions with designated state sponsors of terrorism. Additionally, restrictions against the provision of U.S. financial assistance that were applicable to Libya under the Foreign Assistance Act have been lifted. It is expected that the Department of Commerce will remove or ease its prohibitions against exports to Libya of items on the Commerce Control List that are controlled for anti-terrorism reasons, although certain restrictions will remain in force for other reasons.

As these changes are implemented, companies wishing to conduct business with or in Libya should monitor the relevant regulations to remain alert as to which restrictions and controls the implementing agencies will retain for policy reasons.

For more information, please contact Jeff Snyder or Carrie Fletcher in our Washington, DC office at jsnyder@crowell.com or cfletcher@crowell.com.

U.S. and Cambodia Sign Trade and Investment Framework Agreement. U.S. exports to Cambodia have been increasing since Cambodia joined the WTO in the 2004 and were nearly $70 million last year, while Cambodia exported $1.7 billion to the United States. Major U.S. exports to Cambodia include automobiles, machinery, textile articles, and fats and oils.

On July 14 the United States and Cambodia signed a Trade and Investment Agreement, under which the two countries will work to expand trade and investment further and provide a forum to address bilateral trade issues, including U.S. industry concerns.

Trade and Investment Agreements (TIFA) create frameworks and set up councils made up of officials from both countries to discuss ways to promote trade and investment. Under the U.S.-Cambodia TIFA, the two countries will also discuss outstanding trade issues such as the protection and enforcement of intellectual property rights, trade facilitation and customs issues, and implementation of Cambodia 's WTO commitments.

The U.S.-Cambodia TIFA is part of President Bush's Enterprise for Association of Southeast Asian Nations (ASEAN) Initiative to strengthen U.S. economic and trade ties with the commercially and strategically vital Southeast Asian region. The United States has TIFAs with Brunei, Indonesia, and the Philippines and is negotiating a TIFA with ASEAN. In addition, the United States has a Free Trade Agreement (FTA) with Singapore and is currently negotiating FTAs in the region with Malaysia and Thailand.

For more information, please contact Brian Peck in our California office at bpeck@crowell.com.

The U.S. and Japan Release Deregulation Report Highlighting New Opportunities for U.S. Industry.

The United States and Japan recently released the fifth annual “Report to the Leaders” reflecting progress made in the past year under the U.S.-Japan Regulatory Reform and Competition Policy Initiative, which addresses regulatory barriers in several product and service sectors. This most recent report cites deregulation measures which Japan has agreed to undertake that would create new opportunities and gains for U.S. industry in such sectors as medical devices, telecom and financial services.

Under the regulatory reform initiative, the United States and Japan exchange reform recommendations each year in key sectors such as telecommunications, information technology, intellectual property rights, medical devices and pharmaceuticals, financial services, agriculture, competition policy, transparency, legal reform, commercial law, and distribution. These recommendations are discussed through working and high-level meetings after which, the two governments prepare a joint report on the results of the work under the Initiative. This year's Report cites a range of measures being taken by Japan to help improve market access, enhance transparency, lower barriers to business, speed regulatory decisions, and strengthen the competitive environment. For example, Japan has agreed to implement measures and provide more resources and staff to speed up the approval process for new medical devices, a process that has been cumbersome and frustrating for medical device manufacturers in the past.

In the financial services sector, Japan has committed to complete liberalization of the bank sales channel for insurance products by the end of 2007. Last month, Japan also enacted the Financial Instruments and Exchange Law, under which investment advisors, investment trust management companies, and securities companies will be supervised as financial firms under one unified cross-sectoral law. In addition, Japan has committed to introducing measures to help level the playing field between commercial insurance providers and a large category of previously unregulated insurance cooperatives.

In telecom, Japan has committed to reduce fees that NTT East and West charge competitors for access to its fixed network; and to completing a mutual recognition agreement with the United States for telecommunications, which would harmonize standards between the two countries and promote greater market access for telecom equipment.

Several measures have either been recently implemented or are scheduled to be implemented over the next year.

For more information, please contact Brian Peck in our California office at bpeck@crowell.com.

Airlines Studying Proposed New U.S. Rule Mandating Pre-Departure Submission of Passenger Data.

Sharing of passenger data between airlines and the U.S. government was in the news again last week as the Department of Homeland Security's Bureau of Customs and Border Protection (“CBP”) issued a proposed rule requiring pre-departure submission of passenger manifests for commercial aircraft arriving in and departing from the United States. Most U.S. and foreign airlines are still studying the rule, which is designed to prevent boarding of high-risk passengers, and cautioning that the devil will be in the rule's details. Already, however, some industry groups have predicted the proposed changes will inevitably cause flight delays. The proposed changes to the existing Advance Passenger Information System (“APIS”) have also generated renewed calls from the aviation industry for harmonization of domestic and international passenger prescreening and data collection.

U.S. and foreign airlines now must transmit electronically to CBP arrival and departure passenger manifests at least 15 minutes after departure of a flight en route to or from the U.S. Manifests for crew members on passenger and all-cargo flights and non-crew members on all-cargo flights must be electronically transmitted to CBP at least 60 minutes before departure of any covered flight to, continuing within or over-flying the U.S., and 60 minutes before the departure of any covered flight from the U.S. CBP's new rule would give airlines a choice between:

  1. transmitting complete manifests in a batch, all passenger names and associated data at once, no later than 60-minutes prior to departure of the aircraft (the “APIS 60” option); or,
  2. transmitting manifest information on passengers as each passenger checks in for the flight, up to but no later than 15 minutes prior to departure of the aircraft (the “APIS Quick Query” or “AQQ” option). CBP would have to clear each name before the passenger could board. The rule would also change the definition of “departure” to mean the moment the aircraft is pushed back from the gate (not “wheels up”, as under the existing rule).

CBP expects that airlines with pre-existing reservations control systems would select the AQQ option, while smaller or charter airlines would select the APIS 60 option. A subset of airlines (seasonal charters, air taxis and air ambulances) will be unable to use either option. CBP will manually communicate vetting results to those airlines, but they would still have to submit all manifest data no later than 60 minutes before departure under the proposal. AQQ would be the least expensive model but could still cost airlines up to $189 million in the first year and more than $600 million through 2015. At the high end of the costs projected, CBP estimates that 15% of passengers will have to arrive at the airport at least 15 minutes earlier to make their flights, and up to 2% of connecting passengers on large international airlines could miss connecting flights to the U.S. and have to be rerouted.

Interested parties have until August 14 to review and submit comments on the new APIS requirements.

For more information, please contact Lorry Halloway in our Washington, DC office at lhalloway@crowell.com.

Signaling a growing frustration with the multilateral trade negotiation processes, currently moving at a snail's pace under the increasingly inappropriately named “Doha Development Round”, the EU begins putting in place the building blocks for a new wave of bilateral trade agreements.

Without actually saying that the DDA negotiations are destined to be a spectacular failure, EU Commissioner for External Trade, Peter Mandelson, has circulated a discussion paper among the 25 member states of the EU suggesting that greater efforts, resources and emphasis be placed on the negotiation of bilateral agreements with strategic third countries as a means of pursuing greater market access for EU companies. Clearly, an ambitious trade liberalization package is no longer viable and, in its place, the EU Commissioner is proposing a move away from the cumbersome and unproductive multilateral processes towards more nimble instruments for improving market access.

The key message contained in the discussion paper is that the motivations for concluding such agreements should no longer be geopolitical but instead simple economics. While the U.S. has been focusing its efforts on securing free trade agreements with large Far East Asian countries, the EUin contrasthas been laboring to secure similar kinds of agreements with the Mercosur countries without any tangible success. In this way, the EU expects to make the greatest gains in improved market access for its businesses with the resources available to it.

It seems logical that this change in policy emphasis does reflect an increasingly pessimistic view of the DDA negotiations from a European perspective. Since it is less likely that the national interests of a very small minority of EU Member States, especially France, can compromise bilateral negotiations in the same way that has happened in the multilateral ones, this may also be a way of circumventing these obstacles. This approach is heavily favored by EU industries and trade associations.

For more information, please contact Robert MacLean in our Brussels office at rmaclean@crowell.com.

Crowell & Moring International Trade Group to release updated version of its Guide to EU Anti-Dumping Law.

For more information, or to request an electronic version of the Guide, please contact Haiya Wo in our Brussels office at hwo@crowell.com.

 

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