Trade defence policy audit to examine Commission decisions

trade defence policy audit
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The European Court of Auditors will conduct an audit into the European Commission’s enforcement of EU trade defence policy.

The EU maintains an open, rules-based trading system in accordance with World Trade Organisation principles, sanctioning non-compliant practices such as subsidisation – where a state accords unwarranted support to export products – and dumping, where exports are sold at prices lower than domestically, by deploying trade defence instruments (TDIs). The auditors intend to examine the Commission’s application of TDIs to address issues of unfair competition, with particular focus on:

  • Whether the Commission’s Directorate-General for Trade applies efficiency and due process in implementing TDIs;
  • Whether the Directorate-General makes appropriate and well-reasoned decisions on its application of TDIs;
  • To what degree the Directorate-General makes full use of all the tools at its disposal to ensure TDIs are deployed effectively; and
  • Whether the Directorate-General is appropriately equipped to ensure it can correctly apply TDIs.

The EU applied 142 TDIs against incidences of dumping and subsidisation in the period spanning 2013 and 2017, two thirds of which were issued around China; primarily these concerned industrial metal and chemical products, rather than consumer goods, though electric and standard bicycles were also subject to a high number of TDIs. The TDIs themselves were typically manifested as the enforcement of additional duties imposed on the offending state, in order to compensate for the losses incurred by industry in the EU as a direct result of unfair competitive practices.

Ildikó Gáll-Pelcz, the member of the European Court of Auditors responsible for the audit, said: “Open trade creates opportunities for European companies. But it also needs to have instruments in place to respond to illegal practices. This is the responsibility of the European Commission to effectively protect EU producers against unfair competition.”

The auditors’ full report into the EU’s trade defence policy is scheduled for publication in 2020.

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