Fighting back against unfair competition

The Commission was able to defend the interests of EU producers against bad trade behaviour

Photo: ECA Ildiko Gall-Pelcz.

The Commission has been successful in enforcing trade defence policy, but there is room to improve the policy's effectiveness, particularly in view of the growing tensions in global trade politics, says the European Court of Auditors in its first special report on this area.

The executive can use trade defence instruments (TDIs) to fight back against unfair competitive practices that are not compliant with international rules, such as export sales below domestic prices and unjustified state support for export products.

According to the auditors, the Commission makes active use of the tools at its disposal, properly carrying out investigations, and duly justifying measures when imposed. In most cases, these defence measures target industrial rather than consumer products, electric and standard bicycles being a notable exception.

Open trade creates opportunities for European companies, if the playing field is level, said Ildiko Gall-Pelcz, the member of the European Court of Auditors responsible for the report. She explained that the ECA found that the Commission was able to defend the interests of EU producers against unfair competition.

She also stressed that there is scope for improvements in monitoring and prioritising activities to tackle future challenges in international trade.

the auditors found that TDIs had had a clearly positive impact in the e-bikes sector: production in Europe would probably have ceased without them. Moreover, according to the auditors, TDIs were also an important source of support for the steel industry, although less so for the solar panel industry. However, the latter sector is strongly impacted by political decisions about the environment and climate change.

In general, the auditors recommend that the Commission raise awareness of trade defence instruments, as only a few industries currently use them: sectors such as steel and chemicals are well acquainted with TDIs, but others – particularly small and medium sized enterprises (SMEs) – are much less familiar with them and may therefore not seek protective measures when experiencing trade distortions.

Furthermore, the auditors recommend that the Commission, as the EU’s global trade player, improve the way it monitors the policy’s overall effectiveness and prioritise some actions better, for example in context of the WTO forum.

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