New rules for calculating dumping: the position of the Council of the European Union has been approved

The Council’s negotiating position reflects, to a large extent, the main principles put forward by the European Commission in its proposal presented in November 2016 that suggested a new method for calculating dumping on imports from countries where there are significant market distortions, or where the State has a pervasive influence on the economy. The main objective is to detect and redress distortions to the market resulting from State intervention in other countries. The new methodology for calculating dumping is based on rules established by the World Trade Organisation (WTO).

Under WTO rules, the European Union can impose anti-dumping duties on products from third countries if an investigation shows that these products enter the EU at dumped prices that harm the EU industry. According to standard rules in normal market conditions, dumping is calculated by comparing the export price of a product to the EU with the domestic price, or cost, of the product in the exporting country. However, in some countries, prices and costs are artificially low because of State influence; in these circumstances, domestic prices are not useful as a benchmark to compare export prices.

The new methodology provides for a non-exhaustive list of examples used to identify significant market distortions, including State policies and influence, the widespread presence of State-owned enterprises, discrimination in favor of domestic companies, the lack of independence of the financial sector and an inadequate enforcement of bankruptcy, corporate or property laws.

The Commission will now be able to correct significant distortions recognized in an exporting country by setting a price for the product referring either to the costs of production and sale prices in a country with similar levels of economic development or to the appropriate undistorted international costs and prices.

The proposal or regulation that amends the current regulation on protection against dumped imports is subject to the ordinary legislative procedure; therefore, the Council and the European Parliament need to reach agreement on a final text.


Davide Scavuzzo