ANTIDUMPING REGIMES IN REGIONAL TRADE AGREEMENTS: THE FUTURE ANTIDUMPING REGIME BETWEEN THE EUROPEAN UNION
AND THE UNITED KINGDOM AFTER BREXIT
Irene de Tovar Hernández
A thesis submitted to the Faculty of Law at the Universiteit van Amsterdam (Department of International Trade Law) in partial fulfilment of the requirements for the Master Degree in International and European Trade and Investment
Amsterdam, The Netherlands 14 June 2019
Supervisor:
Dr. Geraldo Vidigal
Student Email and ID:
12476404
detovar.irene@gmail.com
To my parents, I couldn’t have done this without you. Thank you for all the support along the way.
Acknowledgements
I would like to thank my thesis advisor Geraldo Vidigal of the Faculty of Law at the Universiteit van Amsterdam. The door to Prof. Vidigal office was always open consistently allowing me to develop my ideas and make this thesis my own work, but also steering me in the right direction.
I would also like to acknowledge my gratitude for Mr. Victor Crochet’s support during my Master’s studies and during the writing process of this thesis.
Finally, I must express my very profound gratitude to my parents for providing me with unfailing support and endless encouragement throughout my studies. This accomplishment would not have been possible without you.
Table of Contents
List of Abbreviations Abstract and Keywords Substantive Part
1. INTRODUCTION ... 1
2. REGIONAL ANTIDUMPING REGIMES AND THEIR WTO-CONSISTENCY ... 4
2.1. THE DIFFERENT CATEGORIES OF REGIONAL ANTIDUMPING REGIMES ... 4
2.2. THE WTO-CONSISTENCY OF REGIONAL ANTIDUMPING REGIMES ... 5
2.2.1. Do Category C Antidumping Regimes Violate GATT Article I:1? ... 5
2.2.2. Category B Antidumping Regimes: A Prima Facie Violation of GATT Art. I:1 ... 6
2.2.3. GATT Article XXIV: A Potential Defence? ... 7
A)The First Requirement ... 8
a)Art. XXIV:8(a) of the GATT ... 9
b)Art. XXIV:5(a) of the GATT ... 13
B)The Second Requirement ... 14
2.2.4. Conclusions ... 14
2.3. EUPRACTICES ... 15
2.3.1. The Ukraine-model ... 16
2.3.2. The Norway-model ... 16
2.3.3. The Turkey-model ... 18
3. THE FUTURE EU-UK TRADING RELATIONSHIP ON ANTIDUMPING ... 21
3.1. THE INTERACTION BETWEEN ANTIDUMPING AND COMPETITION LAW ... 24
3.1.1. Substantive arguments ... 26
3.1.2. Procedural rules ... 27
3.2. THE FUTURE ANTIDUMPING REGIME FOR THE EU27–UK:APROPOSAL ... 28
4. CONCLUSIONS ... 32
List of Abbreviations AB ABR ADA Art. /Arts. CU DCFTA Doc. ECJ EEA EFTA EU EU27 FTA GATS GATT GDP MFN ORC ORRC Para./Paras. RTA SAT UK VCLT WTO Appellate Body
Appellate Body Report
WTO Antidumping Agreement Article/Articles
Customs Union
Deep and Comprehensive Free Trade Area Document
European Court of Justice European Economic Area European Free Trade Area European Union
European Union 27 Member States Free Trade Agreement
General Agreement on Trade in Services General Agreement on Trade and Tariffs Gross Domestic Product
Most-Favoured Nation
Other Regulations of Commerce
Other Restrictive Regulations on Commerce Paragraph/Paragraphs
Regional Trade Agreement Substantially all the trade
United kingdom of Great Britain and Northern Ireland
Vienna Convention on the Law of Treaties World Trade Organization
Abstract and keywords
This paper offers a categorization of regional antidumping regimes based on their features as compare to the disciplines embodied in the covered agreements. It also analyses the WTO-consistency of these different regimes and exposes the current EU practices, in an attempt to provide a future antidumping regime between the European Union and the United Kingdom after the latter’s departure from the Union. It touches on the implications of the different available trading models with respect to their antidumping regimes. Finally, this paper proposes an antidumping regime for the new trading relationship between the Union and the United Kingdom based on one of the available EU models but amended to reflect the current economic circumstances. This proposal could also be used as basis for the modernization of the current Customs Union between Turkey and the European Union.
Keywords: Anti-Dumping, Article XXIV of the GATT, Brexit, Competition Law,
Customs Union, EU – Turkey CU, EU27 – UK trading relationship, GATT, Trade remedies, WTO Antidumping Agreement.
Substantive Part 1. Introduction
WTO law recognises the advantages of economic integration and trade liberalization at, both, global and regional level.1 The proliferation of regional trade agreements (“RTAs”) since the early 1990s exemplifies how regional integration allows trading partners to obtain certain degrees of trade liberalization that may be out of reach at global level.2 While the scope of these agreements responds to historical, political and
economic factors between the constituting members, their common feature is that parties to these RTAs offer each other more favourable treatment in trade matters. Nonetheless, some trade aspects also mirror the provisions of the covered agreements. In general, RTAs tend to include chapters on trade in goods and/or services, dispute settlement and trade remedies, among others.
While WTO law should not obstruct the promotion of economic and noneconomic benefits through RTAs, it must also assure a balance between the interests of those countries pursuing a closer economic integration and the interests of WTO Members non-parties to such trade agreements.3 In this regard, Article XXIV of the General Agreement on Tariffs and Trade (“GATT”) was designed to ensure that RTAs do not deviate more trade than they create by setting out several conditions than WTO Members must met in order to benefit from this regional exception.4
The present paper is concerned with the different regional regimes of antidumping in an attempt to propose a model for the future trading relationship between the European Union (“EU”) and the United Kingdom (“UK”) after the latter’s departure from the Union. At WTO level, GATT Art. VI and the WTO Agreement on the Implementation of GATT Article VI (“ADA”) allow the imposition of antidumping measures, provided
1 See World Trade Report 2011, “WTO and Preferential Trade Agreement: From co-existence to
coherence”, 9, available at
https://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report11_e.pdf [last accessed: 16 July 2019].
2 Ibid. See also UNCTAD, “Key Statistics and Trends in Trade Policy 2015: Preferential Trade
Agreements”, 14, available at https://unctad.org/en/PublicationsLibrary/ditctab2015d2_en.pdf [last accessed: 16 July 2019].
3 See Preamble of the Understanding on Article XXIV of the GATT 1994, available at
https://www.wto.org/english/docs_e/legal_e/10-24_e.htm [last accessed: 16 July 2019].
that certain conditions are met. Such measures are available to WTO Members willing to combat dumping that causes injury to their domestic industry.5 This defence mechanism finds its raison d’être in trade policy-makers’ believe that international trade must be or, at least, should be “fair” and that “dumping” constitutes an “unfair” practice.6 Nonetheless, WTO law does not prohibit or regulate dumping but it does contain obligations on measures and actions available to combat it (so-called antidumping measures). The idea underlying antidumping measures is that their imposition offsets the negative effects of dumping in the importing country.
While the imposition of antidumping measures may seem a prima facie violation of a bound tariff, the wording in Art. II:2(b) of the GATT rules out such possibility when establishing that “Nothing in this Article shall prevent any Member from imposing at
any time on the importation of any product (…) any antidumping (…) duty applied consistently with the provisions of GATT Art. VI; (…)”. In line with this article, and
under the umbrella of Art. 9.2 of the ADA, WTO Members have the right to impose anti-dumping duties provided that antidumping investigations have been initiated, dumping has been found, which has or threatens to cause injury to the industry producing the like product in the importing market. There must be established a causal link between the dumping and the injury or threat. In this regard, antidumping measures are applicable only against specific dumped products and are imposed at the discretion of the importing Member.
WTO Members have also incorporated substantial and procedural rules governing antidumping measures on their RTAs. These regimes may raise doubts with regards to their compatibility with the covered agreements, specifically the Most-Favoured Nation
5 See Art. VI of the GATT 1947 annexed to the Final Act adopted at the conclusion of the second session
of the preparatory committee of the United Nations Conference on Trade and Employment (excluding the Protocol of Provisional Application), as rectified, amended or modified by the terms of legal instruments which have entered into force before the date of entry into force of the WTO Agreement. See also Art. 2.1 of the WTO Agreement on the Implementation of Art. VI of the GATT (“ADA”). Note that both provisions are definitional provisions and do not impose independent obligations. See ABR, US – Zeroing, WT/DS294/AB/R, amended by WT/DS294/AB/R, adopted 20 August 2007, para. 140.
6 See Hynes, W.; P. Holden, “What future for the Global Aid for Trade initiative? Towards a fairer
assessment of its achievements and limitations”, IIIS Discussion Paper, No. 421, Institute for International Integration Studies, Trinity College, Dublin, 2013, available at www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp421.pdf [last accessed: 15 July 2019]. See also OECD, “Supporting a fair and equal trading system”, in Development Co-operation Report 2014: Mobilising Resources for Sustainable Development, OECD Publishing, Paris, 2014, available at https://doi.org/10.1787/dcr-2014-25-en [last accessed: 15 July 2019].
Treatment (“MFN”) principle. For the purpose of this paper, regional antidumping regimes have been classified in three different groups: Antidumping regimes falling within Category A mirror or refer to WTO disciplines. Category B contains regional antidumping regimes that eliminate the possibility to impose antidumping duties between RTA-parties. Finally, Category C encompasses antidumping regimes that allow such imposition but provide for different and more favourable treatment to the like products originating in RTAs than to the “dumped” products originating in non-RTA parties.
A preliminary categorization and an analysis of the WTO-consistency of these regional trade regimes is conducted in Section 2. This will delimit the legal regimes available to WTO Members wishing to incorporate provisions on antidumping in their RTAs. With this framework in mind, the present paper also addresses the EU practices with regards to their regional antidumping regimes with third countries. This layout will prove of significant value to further determine the antidumping regime governing the trading relationship of the EU of 27 Member States (“EU27”) and the UK after “Brexit”.7 The
third section of this paper is dedicated to establish a WTO-consistent antidumping regime for the new EU27 – UK trading relationship taking into account previous EU practices. Finally, Section 4 attempts to draw some conclusions.
7 The UK notified on 29 March 2017 its intention to withdraw from the EU based on Article 50 of the
Treaty on European Union. Unless both parties agree on a transition period or a comprehensive free trade agreement, once the UK officially withdraws goods imported from the UK into the EU will be subjected to the EU Common Customs Tariffs and those imported into the UK will be subjected to the UK’s National Customs Tariff. The EU and the UK could mitigate the impact of “Brexit” on the application of tariffs and other restrictive regulations on commerce by agreeing on a preferential trading partnership. Alternatively, trade relations between the EU and the UK will fall back in WTO-terms.
2. Regional Antidumping Regimes and their WTO-consistency
2.1. The Different Categories of Regional Antidumping Regimes
Category A covers regional antidumping regimes that mirror or refer implicitly or explicitly to WTO rules. In essence, the rights and obligations of RTAs parties are not substantially modified since the regime merely reaffirms the rights and obligations under GATT Art. VI and the ADA. RTAs that do not contain any provisions on antidumping are also encompassed within this category. This category of antidumping regimes has no impact on the parties’ obligations and rights concerning the imposing of antidumping duties. In fact, the inclusion of such provisions is unnecessary inasmuch as their non-inclusion will result in a default application of WTO rules.8
Contracting parties to a RTA may also choose to eliminate the possibility to impose antidumping duties among them. This category of antidumping regimes (Category B) reduces the rights of RTA-parties to impose antidumping duties as compared to their rights under WTO law. While RTA-parties may still impose antidumping duties on dumped product originating in RTA-parties, provided that certain conditions are met, the like dumped product originating in RTA-parties could not be subjected to such duties. This regime creates more competitive advantages for products originating in RTA-parties in comparison to like products originating in third countries. Concerns regarding the legality of this category of regimes rise when a RTA member makes the policy choice to have recourse to the option of imposing antidumping duties on importing products originating in a third-country.9
With regards to the last category of antidumping regimes, Category C antidumping regimes allow the imposition of antidumping duties but provides for a more-favourable treatment for RTA-parties. Regimes that provide for the possibility to suspend previously imposed antidumping duties on products originating in RTA-parties will fall
8 Some agreements falling within this category are the EU – Ukraine Association Agreement and the
Comprehensive Economic Trade Agreement (“CETA”) between the EU and Canada.
9 See Section 2.2.2 for further analysis on their WTO-consistency. Some agreements falling within this
within this category. This regime also raises doubts regarding its compatibility with the MFN principle.10
2.2. The WTO-consistency of Regional Antidumping Regimes
While Category A antidumping regimes do not pose any threat on their WTO-consistency, Categories B and C Antidumping regimes may raise concerns in this regard, particularly with MFN principle.11
2.2.1. Do Category C Antidumping Regimes Violate GATT Article I:1?
According to GATT Art. VI, the importing member “may” take antidumping measures if certain conditions are met. The decision to impose antidumping measures is a matter of economic policy, which involves balancing consumer and producers interests. This prerogative is reinforced by the permissive nature embodied in GATT Art. VI, which expressly refers to the “desirability” of antidumping measures. Both, GATT Art. VI and the ADA contain procedural and substantive conditions that must be fulfilled before the importing member can decide to impose antidumping measures. These conditions are bound by the MFN obligation embodied in GATT Art. I:1, but the right to decide on the imposition of antidumping measures is not governed by GATT Art. I:1.
It follows that Category C antidumping regimes do not violate GATT Art. I:1. Article 11.1 of the ADA supports this interpretation when it states that “an antidumping duty
shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury”. In this regard, the competent authorities of the importing
member can freely suspend the imposition of antidumping duties once they find that these combating actions are no longer necessary. Whether a specific criteria to initiate such suspension is previously established in an RTA or an ad hoc determination is performed does not alter this prerogative. Consequently, Category C antidumping regimes do not violate GATT Art. I:1.
10 See Section 2.2.1 for further analysis on their WTO-compatibility. 11 See Preamble of the WTO Agreement and Art. I:1 of the GATT, n 4.
2.2.2. Category B Antidumping Regimes: A Prima Facie Violation of GATT Art. I:1
With regards to the consistency of Category B antidumping regimes with the MFN rule, a further examination of GATT Art. I:1 and its relationship with GATT Art. VI must be carried out. Two recent WTO decisions may contribute to this determination: In EU –
Footwear12, China contested the legality of Art. 9(5) of the EU’s Basic Anti-Dumping Regulation13, which allowed the EU to impose a single country-wide duty on all dumping exporters from China, as a non-market economy. This contradicted ADA Art. 9.2, which requires that exporters are afforded “individual treatment”.
The Panel turned to the text of the GATT Art. I:1 and found that Art. 9(5) of the Basic Antidumping Regulation constituted an example of “rules and formalities in connection with importation” and that the individual treatment afforded to exporters from market-economy countries was an “advantage” not granted to China.14 This led the Panel to conclude that Basic Antidumping Regulation Art. 9(5) was in violation of the MFN rule, irrespectively of whether it constituted a violation of GATT Art. VI.15 The Panel noted that a “member might act inconsistently with GATT Art.I:1 in the application of its antidumping regulations to different members without a specific violation of the ADA”.16
Nonetheless, this Panel report was issued slightly earlier that the Appellate Body’s (“AB”) decision in EU – Fasteners, which was also concerned with Basic Antidumping Regulation Art. 9(5). The AB in EU – Fasteners seemed to imply that GATT Arts. I:1 and VI are in conflict and cannot be applied simultaneously when stating that “a preliminary question to be addressed before determining whether an anti-dumping duty has been imposed inconsistently with Article I:1 of the GATT 1994 is whether the anti-dumping duty had been imposed consistently with Article VI of the GATT 1994”.
12 See WTO Panel Report, EU – Footwear, WT/DS405/R, adopted 28 October 2011, para 1.1. See also
Yuri Rovnov, “The relationship between the MFN principle and antidumping norms of the WTO law revisited”, Journal of World Trade, Vol. 49(1), 2015, pages 173 – 198. See also Hans Mahncke, “Applying the MFN principle to WTO Antidumping Law: An opportunity for curbing the use of antidumping measures”, Legal Issues of Economic Integration, Vol 41(2), 2014, pages 69 – 192.
13 See Council Regulation (EC), No. 1225/2009 of 30 November 2009 on protection against dumped
imports from countries not members of the European Community (“Basic Antidumping Regulation”).
14 See WTO Panel Report, EU – Footwear, n 12, para. 7100. 15 Ibid, para. 7105.
According to this interpretation, an antidumping measure can only be in violation of GATT Art. I:1 if a case of violation of GATT Art. VI has been established.17 Nonetheless, the AB avoided ruling on the issue by arguing that Article VI had not been invoked by China on its original claim. Whether there was a need to separately invoke Article VI is up for discussion. The AB contradicted its previous ruling in US –
Antidumping Act of 1916, where it stated that “Article VI of the GATT 1994 and the Anti-Dumping Agreement are part of the same treaty, the WTO Agreement. As its full
title indicates, the Anti-Dumping Agreement is an “Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994”.18
While both cases are concerned with discrimination in the imposition of antidumping duties once antidumping investigations have been initiated, the issue with the potential MFN-inconsistency of Category B antidumping regimes arises from the impossibility to use antidumping duties on RTA-parties and, therefore, the lack of initiation of any investigation. In this regard, the MFN-compatibility of Category B antidumping regimes is a different legal question. Indeed, the impossibility to impose antidumping duties constitutes an advantage within the meaning of GATT Art. I:1 granted to RTAs of which third countries are deprived inasmuch as antidumping investigations will never be initiated against products originating in RTA-parties and those products will never be subjected to antidumping duties.
2.2.3. GATT Article XXIV: A Potential Defence?
WTO law has carved-out some exceptions to the MFN treatment obligation, which includes RTAs. The legal basis for the constitution of RTAs can be found in three provisions, namely: the Enabling Clause,19 Art. XXIV of the GATT and Art. V of the General Agreement on Trade in Services (“GATS”).
17 See WTO ABR, EU – Fasteners, WT/DS397/AB/R, adopted 15 July 2011, para. 392.
18 See WTO ABR, US-Antidumping Act of 1916, WT/DS136/AB/R, WT/DS132/AB/R, adopted 28
August 2000, para 114.
19 See Decision on Differential and More Favourable treatment, Reciprocity and Fuller Participation of
Developing Countries, World Trade Organization, Decision of 28 November 1979, L/4903 (Nov. 28, 1979), Enabling Clause, available at http://www.wto.org/english/docs_e/legal_e/enabling1979_e.htm [last accessed 17 July 2019]
The exception under Article XXIV of the GATT is only available to CU and Free Trade Areas that meet the requirements set forth in paragraphs 5 to 9 of GATT Art. XXIV regarding their level of internal and external trade liberalization. Indeed, the AB clarified in Turkey – Textiles that GATT Art. XXIV can only be invoked to justify a measure inconsistent with a/some provisions of the GATT that have been introduced upon the formation of a CU or a Free Trade Area, which fully meets the requirement of paragraphs 5 and 8.20
The definition of a CU can be found in subparagraph 8(a)(i), according to which a CU is the substitution of a single customs territory for two or more customs territories so that
“[D]uties and Other Restrictive Regulations of Commerce (“ORRC”) (except, where necessary, those permitted under arts. XI, XII, XIV, XV and XX) are eliminated with respect to substantially all the trade in products originating in such territories”. In this
regard, Article XXIV:8(a)(i) sets forth the level of internal trade liberalization required in RTAs to qualify as a CU.21
The AB in Turkey – Textiles confirmed that Art. XXIV can justify a measure that is inconsistent with certain other GATT provisions22, but also set out a two-tier test for allowing such a justification in the context of a CU.23 The AB confirmed in Peru –
Agricultural Products that the test also applied to Free Trade Areas.24 The first element of the test is that the measure must be introduced upon the formation of a Free Trade Area or a CU that fully meets the requirements of Arts. XXIV:5(a) and 8(a) – or (b) for Free Trade Areas –. The second element is that the formation of such CU – or Free Trade Area – would have been prevented if the introduction of the measure were not allowed.
A) The First Requirement
The first requirement is whether the measure was introduced upon the formation of a CU that fully meets the requirements of GATT Arts. XXIV:5(a) and 8(a). Given that,
20 See WTO ABR, Turkey – Textiles, WT/DS34/ABR/R, adopted 19 November 1999, para. 51 – 52. 21 Regional Trade Agreements identify preferential trade arrangements in general, particularly those
allegedly qualifying as CU. See WTO, Trade Topics, Regional Trade Agreements: Scope of RTAs, available at www.wto.org/english/tratop_e/region_e/scope_rta_e.htm [last accessed 19 April 2019].
22 ABR, Turkey – Textiles, n 20, para. 58. 23 Ibid.
for Category B antidumping regimes, the concerned measure is the impossibility to impose antidumping measures once the CU is formed on products originating in constituent members, the measure is undoubtedly introduced upon its formation. Indeed, the first requirement is met inasmuch as this mechanism is introduced in the agreement constituting the CU. Nonetheless, it must further be examined whether the requirements in Arts. XXIV:5(a) and 8(a) are met.
a) Art. XXIV:8(a) of the GATT
According to paragraph 8(a) of GATT Art. XXIV, RTAs can only justify a WTO-inconsistency under GATT Art. XXIV if their level of internal trade liberalization is such that duties and ORRC are eliminated with respect to substantially all the trade (“SAT”) between the parties to these arrangements. This paragraph also refers to the trade restrictions permitted under Arts. XI, XII,XIII, XIV, XV and XX of the GATT – also known as the list of exceptions –, which are expressly listed as exempted from this rule. The absence of GATT Art. VI, which is concerned with antidumping duties, has created much debate around whether the abolition of trade remedies in CU and Free Trade Areas is simply allowed or is, in fact, a mandate under GATT Art. XXIV.25 Its mandatory nature will render Category B antidumping regimes as the only WTO-compatible antidumping regime for CU and Free Trade Areas.
Despite the fact that no consensus has been reached on the mandatory or permissive nature of the obligation under GATT Art. XXIV:8(a)26, the AB’s ruling in Turkey –
Textiles threw some light on the issue. 27 In Turkey – Textiles, the AB was called to rule on subparagraph 8(a)(i) of GATT Art. XXIV since the RTA at stake was an alleged CU between Turkey and the European Community (“EC”). In line with this Decision, the analysis of the nature of this obligation must depart from the determination of whether antidumping duties are encompassed within the meaning of the term “duties and ORRC”, to further determine the reach of the list of exceptions and finally analyse the term “SAT”.
25 See WTO Negotiating Group on Rules, Compendium of Issues Related to Regional Trade Agreements
– Background Note by the Secretariat, WTO Doc. TN/RL/W/8/Rev.1, 1 August 2002, paras 73-5.
26 See WTO Panel Report, Argentina – Footwear (EC); WT/DS121/R. Adopted 12 January 2000, as
modified by the ABR, WT/DS121/ABR/R, para 8.96. See also WTO Negotiating Group on Rules, Compendium of Issues Related to Regional Trade Agreements – Background Note by the Secretariat (Revision).
The different terminologies used in the English28, Spanish and French29 versions of the GATT and the mandate that all versions of the GATT must be interpreted consistently lead to the conclusion that the term “duties” cannot be interpreted as to include antidumping duties. Nonetheless, antidumping duties are encompassed within the expression “ORRC”. Such interpretation is supported by the term “other regulations of commerce” (“ORC”) used in paragraph 5 and by the Understanding on the Interpretation of Art. XXIV of the GATT (“Understanding on Art. XXIV”). The difference between the wording in paragraph 8 and paragraph 5 is that the former includes the adjective “restrictive” while the later only refers to “ORC”. In this regard, the reference in paragraph 8 constitutes a subcategory of the expression ORC referred to in paragraph 5. The inclusion of the expression “ORRC” in the preamble of the Understanding on Art. XXIV supports the interpretation that its scope is limited to regulations that restrict the cross-border movement of goods between parties to the RTA.30 Accordingly, the term ORRC encompasses antidumping duties inasmuch as
antidumping duties are border measures taking the form of increased duties aiming at restricting imports of certain products.
Before further examining the obligation to eliminate duties and ORRC on SAT, it must be determined whether the exceptions list in Art. XXIV:8 gives coverage to antidumping duties. In other words, whether antidumping duties are exempted from the obligation to eliminate duties and ORRC on SAT.
The AB in Turkey – Textiles stated that the list of exceptions in GATT Art. XXIV:8 indicates the areas where RTA parties may deviate from the general rule authorizing the elimination of duties and ORRC. 31 The AB endorsed the interpretation that the exceptions list is of an exhaustive nature through its reference to the trade restrictions that could be maintained in a CU internal trade as “certain restrictive regulations of
28 See Art. XXIV of the GATT, n 4.
29 See Interpretation Note Ad Article XXIV and Understanding of the Interpretation of Art. XXIV of the
GATT 1994, GATT Doc. L/3665, adopted 29 May 1972, BISD 19S/90,94, at paragraph 14 on the discussion of whether the requirement to eliminate duties in Art. XXIV:8(a)(i) encompassed certain revenue duties having a fiscal and non-discriminatory purpose applying on imports from parties to the RTA at stake.
30 Ibid, preamble, para. 4.
31 See WTO ABR, Turkey – Textiles, at n 20, para. 48. See also Article XXIV:8(a) of the GATT “except,
commerce that are otherwise permitted under Art. XI through XI and under Art. XX”.32
In this regard, the text merely states “except, where necessary, those permitted under Arts. XI, XII, XIII, XIV, XV and XX”. Indeed, the text lacks any expression similar to “measures such as” which leads to the conclusion that the list of exceptions is an exhaustive list.33 Given its exhaustive nature and the absence of GATT Art. VI – which is concerned with antidumping duties –, it must be concluded that antidumping duties are not exempted from the obligation to eliminate duties and ORRC on SAT. A further examination of this term is necessary to determine the reach of this obligation.
In Turkey – Textiles, the AB also noted that the constituent members of a CU enjoy some flexibility when liberalizing international trade under GATT Art. XXIV:8.34 Nonetheless, this degree of flexibility is limited by the requirement that “duties and ORRC” be “eliminated with respect to substantially all” internal trade.35 In this regard, it is necessary to perform a closer examination of the wording of GATT Art. XXIV:8(a) and, in particular, the reach of the expression “SAT”.
In US – Line Pipe, a case concerning safeguards, the United States sustained that GATT Art. XXIV allows parties to a FTA to retain some duties and restrictive regulations of commerce and still achieve the threshold in Art. XXIV.36 The Panel also endorsed this interpretation when stating “we consider that the line pipe measure constitutes a duty or ORRC within the meaning of Article XXIV:8(b). As the exclusion of imports from Canada and Mexico therefore forms part of the elimination of "duties and ORRC" between NAFTA members, it is in principle authorised by Article XXIV:5, provided the relevant conditions are fulfilled”.37
Gary N. Horlick and A. T. Gobbi have argued that, under the precise wording of GATT
Art. XXIV:8, the term “substantially” qualifies “all the trade” and not “eliminated”.38
32 Ibid.
33 Ibid. See also Angela T. Gobbi Estrella; Gary. N. Horlick, “Mandatory Abolition of Anti-dumping,
Countervailing Duties and Safeguards in Customs Unions and Free Trade Areas Constituted between WTO Members: Revisiting a Long-standing Discussion in Light of the Appellate Body’s Turkey – Textiles Ruling”, Regional Trade Agreements and the WTO Legal System, Oxford, 2006, page 139.
34 See WTO ABR, Turkey – Textiles, n 20, para. 48. 35 Ibid.
36 See WTO Panel Report, US – Line Pipe, WT/DS202/R, adopted 8 March 2002, para. 4.260. 37 Ibid, para. 7.141.
According to their interpretation GATT Art. XXIV:8 “requires the complete elimination
of the possibility that duties and ORRC apply to the part of the RTA trade covered by the RTA trade liberalization programme”.39 In this regard, from the part of trade deemed to be liberalized by the constituent parties all duties and ORRC must be eliminated.
This interpretation is not in line with the wording of GATT Art. XXIV:8 which states “duties and ORRC are eliminated (…) with respect to SAT between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories”. In this regard, the term “substantially” must be read in conjunction with “all the trade between the constituent territories of the union or (…) all the trade in products originating in such territories” and not only simply “all the trade”, as the previously mentioned authors have argued since that is the wording employed in Art. XXIV:8. 40
Moreover, the intention of the drafters of GATT Art. XXIV:8 was to establish an obligation to eliminate duties and ORRC with respect to SAT which would be fulfilled if the constituent countries of the CU achieved such level of liberalization with respect to all the trade between them or all the trade in products originating in such territories.41 In this regard, constituent parties may decide not to eliminate certain duties and ORRC if their liberalization level is such as to meet the SAT threshold, which is phenomenally unclear.42 Accordingly, the elimination of the use of antidumping duties could be necessary in order to meet such threshold.
39 See Angela T. Gobbi Estrella; Gary. N. Horlick, “Mandatory Abolition of Anti-dumping,
Countervailing Duties and Safeguards in Customs Unions and Free Trade Areas Constituted between WTO Members: Revisiting a Long-standing Discussion in Light of the Appellate Body’s Turkey – Textiles Ruling”, Regional Trade Agreements and the WTO Legal System, Oxford, 2006, page 140.
40 See Article 31(1) of the Vienna Convention on the Law of Treaties, Vienna on 23 May 1969, which
entered into force on the 27 January 1980. See also WTO ABR, US – Gasoline, WT/DS2/ABR/R, adopted 29 April 1996, para. 17 stating that the general rule of interpretation (as set out in Arts. 31(1) VCLT) has attained status of a rules of customary international law and, thus, form part of the customary rules of interpretation of public international law which direct the AB in their interpretations and clarifications of the covered agreement, as established in Art. 3(2) of the Dispute Settlement Understanding.
41 See “Summary of the Interim Report of the Special Committee on Relaxation of Trade Barriers”, 8
December 1943, and “Report of the Subcommittee on Regional Preferences and Customs Union”, 19 August 1943, RG 59, Records of Harley A. Notter, Box 53. Archival records cited herein appear in the Appendix.
b) Art. XXIV:5(a) of the GATT
In order to fulfil the first requirement, constituent members of a CU must also meet the conditions laid down in paragraph 5(a) of GATT Art. XXIV, which embodies the requirement that duties and ORC applicable after the formation of the CU are not on the whole higher or more trade restrictive than the general incidence of duties and ORC applied before such formation. Paragraph 2 of the Understanding on Art. XXIV has sought to clarify the precise meaning of this requirement.43
With regards to duties, paragraph 2 requires that the evaluation of the “general incidence of the duties” applied before and after the formation of a CU “shall … be based upon an overall assessment of weighted average tariff rates and customs duties collected”.44 Thus, the assessment shall be based on (i) imports statistics from a previous representative period; (ii) tariff-line basis; and (ii) in values and quantities, divided by WTO country of origin.
With respect to ORC, paragraph 2 states “[f]or the purpose of the overall assessment (…) the examination of individual measures, regulations, products covered and trade flows affected may be required”. It recognises the difficulty in assessing whether the general incidence of ORC are on the whole more trade restrictive than before the formation of the CU. It also acknowledges that the assessment of trade-restrictiveness under paragraph 5(a) is an economic test,45 which was confirmed by the AB in Turkey –
Textiles.46
In this regard, it may be the case that a CU-member needs to increase a bound duty. In such scenario, GATT Art. XXIV:6 requires that the concerned member follows the procedure laid down in GATT Art. XXVIII.47 According to paragraph 5 of the Understanding on Art. XXIV, this procedure must be followed with a view to achieve
43 See para. 2 of the Understanding on Art. XXIV. 44 Ibid.
45 See ABR, Turkey – Textiles, at n 20, para. 55.
46 See Panel Report, Turkey – Textiles, para. 9.121 which stated that "What paragraph 5(a) provides, in
short, is that the effects of the resulting trade measures and policies of the new regional agreement shall not be more trade restrictive, overall, than were the constituent countries' previous trade policies and that paragraph 5(a) provided for an '"economic" test' for assessing compatibility”. See also See ABR, Turkey – Textiles, at n 20, para. 55.
mutually satisfactory compensation adjustments. As stated in paragraph 6,48 the assessment of such compensatory adjustment must take due consideration to the compensation already afforded by the reduction in the corresponding duty of the other constituents of the CU. Meaning that, if such reduction were not to be sufficient, the union must offer compensation.49 This means that a series of calculations will have to be performed in order to verify that the economic test has positive results. This is, that duties and ORC are not on the whole higher or more restrictive that they were before the formation of the CU.
B) The Second Requirement
The party invoking GATT Art. XXIV as a defence to a prima facie WTO breach must also demonstrate that the formation of the CU/Free Trade Are would have been prevented if it were not allowed to introduce the measure at issue.50 The Panel in
Argentina – Footwear found that the “letter and spirit of Art. XXIV:8 of the GATT
permit the elimination of the use of safeguard measures within a CU”.51 In addition, the Panel also noted that this elimination does not deprive a CU of its right to impose a safeguard measure as a single unit.52 It is yet to be seen whether a Panel would rule the same way if this elimination were on the use of antidumping measures. The EU practices (i.e. San Marino and Andorra CUs) show that the EU seems to have extrapolated this interpretation to antidumping duties inasmuch as both CUs eliminate the use of antidumping within CU-parties but apply a common antidumping policy (the EU antidumping policy). Anyhow, the elimination of potentially trade-restrictive antidumping duties within CU-parties does not raise barriers to trade to non-CU-parties and is necessary to facilitate trade within the CU and ensure its formation.
2.2.4. Conclusions
Based on the analysis carried out in the previous sub-sections, the possibility to eliminate antidumping duties between regional trading partners (Category B antidumping regimes) regains WTO-consistency through GATT Art. XXIV if:
48 Ibid, para. 6. Note that the GATT does not require a WTO Member which benefits from a reduction of
duties upon the formation of a CU to provide compensatory adjustment.
49 Compensation may take the form of reductions of duties and other tariff lines. 50 See ABR, Turkey – Textiles, at n 20, para. 58.
51 See Panel Report, Argentina – Footwear, n 26, para. 8.99. 52 Ibid.
(i) the parties form a CU which fully meets the requirements of paragraphs 8(a) and 5(a) of Art. XXIV; and
(ii) the formation of the CU would have been prevented without the incorporation of such measure.
This means that the parties must have eliminated duties and restrictive regulations of commerce other than antidumping duties on substantially all the trade between them and that duties and ORC must not be higher or more restrictive that they were before the formation of the CU.
With the exception of Art. XXIV:8(a)(ii), that only applies to CU, and states that substantially the same duties and ORC are applied by each of the constituent members to the trade of territories not included in the Union, Arts. XXIV:5(a), dealing with CUs, and 8(a) and Arts. XXIV:5(b) and 8(b), concerned with Free Trade Areas, embody the same requirements. Thus, the conclusions drawn from the examination of the former also apply for the latter.
2.3. EU Practices
The EU has successfully secured more than 36 trade agreements for its Member States, covering more than 60 third-countries.53 The level of trade liberalization and economic
integration in these trade agreements vary, as well as their antidumping regimes. Based on their trade liberalization and integration level, agreements concluded by the EU can be grouped in three main types, namely: (i) Customs Unions; (ii) Association Agreements, Stabilisation Agreements, (Deep and Comprehensive) Free Trade Agreements and Economic Partnership Agreements; and (iii) Partnership and Cooperation Agreements.54 These types of agreements constituted what is known as EU practices. During its negotiations with the UK with regards to the latter’s departure from the Union, EU leaders have offered different types of agreements as basis for the future EU27 – UK trading relationship.
53See European Commission, “Agreements”, available at
http://ec.europa.eu/trade/policy/countries-and-regions/negotiations-and-agreements/ [last accessed 17 July 2019]. See also European Commission, “Overview of FTA and other trade negotiations of the EU (updated in 2019)” available at http://trade.ec.europa.eu/doclib/docs/2006/december/tradoc_118238.pdf [last accessed 17 July 2019]
While this is not the place to analyse the benefits and downsides of these different models, the future antidumping regime between the EU and the UK highly depends on which model serves as basis for their trading relationship. For instance, Category B antidumping regimes is only available to Free Trade Areas and CU. Moreover, the conclusion of one type of antidumping regime may be subjected to the acceptance of certain conditions. In this regard, antidumping regimes cannot be considered without the inherent features of the trading agreement in which they are embodied.
2.3.1. The Ukraine-model
The Association Agreement between the EU and the Ukraine is one of the available models. The antidumping regimes embodied in this agreements falls within Category A. The Deep and Comprehensive Free Trade Area (“DCFTA”) between the EU and Ukraine55, which is part of the broader Association Agreement, includes rules on antidumping measures that the EU and Ukraine can take against imports from the other party, which cause or threaten to cause injury to the domestic industry. Under Art. 46(1) of the DCFTA the EU and Ukraine confirm their rights and obligations under GATT Art. VI and the ADA 56 and, therefore, allow the imposition of antidumping duties when the requirements established in Art. 9.2 of the ADA are met.57
2.3.2. The Norway-model
The Norway-model is also contained within the available models to base the future EU27 – UK trading relationship. The European Economic Area (“EEA”)58 is a Free Trade Area established in 1994, which resulted in the suspension of some of the provisions in the 1972 FTAs concluded between the EU and the remaining European Free Trade Association (“EFTA”) States, which had not yet acceded to the EU.
The EEA Agreement only governs trade relations between the EU Member States, Iceland, Liechtenstein and Norway. With regards to Switzerland, the results of the national referendum held on 6 December 1992 stopped the Swiss Federal Council from
55 The Association Agreement between the EU and the Ukraine signed in June 2014 included the Deep
and Comprehensive Free Trade Area applied since 1 January 2016.
56 See Art. 46 of the Deep and Comprehensive Free Trade Agreement, n 46. 57 See Section 1.
58 See Agreement on the European Economic Area, signed on 2 May 1992, which entered into force on 1
pursuing its membership in the EEA and in the EU. Consequently, Switzerland has developed its relations with the EU through more over 120 bilateral agreements, including a free trade agreement concluded in 1972 and two major series of sectoral bilateral agreement (Bilateral I and II) signed in 1999 and 2002, respectively, which align a large portion of Swiss law with that of the EU.59
Article 26 of EEA Agreement states that: “Anti-dumping measures ... attributable to
third countries shall not be applied in relations between the Contracting parties, unless otherwise specified in this Agreement”.60 This means that EEA Member States have
eliminated the possibility to impose antidumping measures between them. The imposition of these measures to third countries remains available. In addition, Protocol 13 on the Non-Application of Anti-Dumping and Countervailing Measures clarifies that
“the application of Article 26 of the Agreement is limited to the areas covered by the provisions of the Agreement and in which the Community acquis is fully integrated into the Agreement.”61 In this regard, the impossibility to impose antidumping duties is only
available to products covered by the Agreement. The EU acceptance of this principle62
was conditioned to the correct application of the full enforcement of EEA competition rules in the EFTA Member State against prices leading to injurious dumping on the EU market, the so-called integration of the “acquis communautaire”.63 Consequently, the same competition rules apply to all undertakings throughout the EEA. The rules on competition are identical in the three EEA EFTA States and the EU Member States. These rules cover the four main areas, namely (i) the elimination of agreements that restrict competition and abuse of dominant position; (ii) control of mergers between
59 The EU has initiated antidumping investigations against Switzerland before 2003. See EU Commission
Regulation (EC) No 477/2011, 17 May 2011, initiating an investigation concerning the possible circumvention of anti-dumping measures imposed by Council Implementing Regulation (EU) No 511/2010 on imports of certain molybdenum wires originating in the People’s Republic of China by imports of certain molybdenum wires consigned from Malaysia and Switzerland, whether declared as originating in Malaysia and Switzerland or not, and making such imports subject to registration, L
131/14, R525, available at
https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:131:0014:0017:EN:PDF [last accessed: 20 july 2019]. See also European Commission website, data base, available at http://trade.ec.europa.eu/tdi/completed.cfm [last accessed: 20 July 2019]
60 Ibid, Article 26 of the EEA Agreement.
61 See Protocol 13 on the Non-Application of Anti-Dumping and Countervailing Measures to the EEA
Agreement (“Protocol 13 to the EEA Agreement”).
62 See EU Regulation 5/94 on the Suspension of Anti-dumping Measures against EFTA countries 1994
O.J. (L3) 1.
63 See Protocol 13 to the EEA Agreement, n 52, provides that the application of Art. 26 of the EEA is
limited to the areas covered by the provisions of the EEA in which the Community acquis is fully integrated into the Agreement.
firms; (iii) liberalisation of monopolistic economic sectors; and (iv) prohibition of state aid that would distort competition by favouring certain firms or national sectors.64 According to Arts. 56 and 5765 of the EEA Agreement and Protocols 21 to 25,66 the EU Commission and the EFTA Surveillance Authority (“ESA”) share the jurisdiction to apply competition rules, except for merger cases when the Commission has exclusive jurisdiction.67 According to these provisions, ESA handles cases where there is an effect only on trade between EFTA States. Where trade between EU and EFTA States is affected, the attribution of jurisdiction depends on the importance of the turnover of the undertakings.
2.3.3. The Turkey-model
Another available model is the CU between the EU and Turkey (“EU – Turkey CU”). This model contains an antidumping falling within Category C.
The EU – Turkey CU came into force on 31 December 1995 pursuant to Decision 1/95 of the EC – Turkey Association Council of 22 December 1995 on implementing the phrase of the Customs Union (“Decision 1/95”).68 Article 44(a) of Decision 1/95 contains the rules to trigger the mechanism to suspend previously imposed antidumping duties. This provision states, in its relevant parts, that: “The Association Council shall
review upon the request of either Party the principle of application of trade defence instruments (…) in its relations with the other. During any such review, the Association Council may decide to suspend the application of these instruments provided that Turkey has implemented competition, State aid control and other relevant parts of the
64 See EFTA Secretariat, “Free Movement of Goods”, Brussels, 2014, available at
https://www.efta.int/media/publications/fact-sheets/EEA-factsheets/GoodsFactSheet.pdf [last accessed: 17 July 2019].
65 See Arts. 56 and 57 of the EEA Agreement, n 52.
66 See Protocol 21 on the Implementation of Competition Rules Applicable to Understakings; Protocol 22
concerning the definition of Undertaking and Turnover; Protocol 23 concerning the cooperation between the surveillance authorities; Protocol 24 on Competition in the Field of Control of Concentrations; Protocol 25 on Competition regarding Coal and Steel; and Protocols 26 and 27 concerning State Aid to the EEA Agreement.
67 See EU Council Regulation (EC) No 139/2004 of 20 January 2004 on the Control of Concentrations
between Undertakings (“the EC Merger Regulation”). See also EFTA Surveillance Authority, Anuual Report 2016, available at http://www.eftasurv.int/media/annual-reports/Full-Report-ASM-formatting.pdf [last accessed: 17 July 2019]. See also European Parliament, “The European Economic Area 8EEA), Switzerland and the North”, Fact Sheets on the European Union, 2019, available at http://www.europarl.europa.eu/ftu/pdf/en/FTU_5.5.3.pdf [last accessed: 17 July 2019].
68 See Decision 1/95 of the EC – Turkey Association Council of 22 December 1995 on Implementing the
phrase of the Customs Union, Official Journal L 035, 0047, available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A21996D0213%2801%29 [last accessed: 1 May 2019]
acquis communautaire which are related to internal market and ensured their effective enforcement, so providing a guarantee against unfair competition comparable to that existing inside the internal market”.
Accordingly, both, Turkey and the EU fully retain their prerogatives to impose antidumping duties. Nonetheless, they may request the Association Council to decide on the suspension of imposed antidumping duties provided that certain conditions are met. A couple of particularities must be highlighted in this regard. First of all, the term “shall” indicates that the Association Council – an institution created to ensure the implementation and the progressive development of the association; and the implementation and application of the agreement –69 is only under an obligation to review imposed antidumping duties if such request has been made. Nonetheless, it is not under an obligation to suspend their application. Secondly, the possibility to suspend antidumping duties seems to be conditioned on Turkey’s implementation of competition and other rules related to the internal market, which serve as a guarantee against unfair competition comparable to that existing inside the internal market.
Consequently, antidumping duties may only be suspended if: (i) either the EU or Turkey have applied anti-dumping measures to the other; (ii) either party has requested a review of such application to the Association Council; and (iii) the Association Council finds that Turkey has implemented competition and other rules which provide a guarantee against unfair competition, if such guarantee is comparable to that existing inside the internal market.70
The link provided in this provision between competition laws and antidumping seems to indicate a preference on the legal framework used to tackle “unfair” trade, favouring competition over antidumping. Nonetheless, until this point, none of the parties have made use of this mechanism of suspension. This is, none of the instances where the EU has imposed antidumping duties on products originating in Turkey, or vice versa, have been followed by a request to suspend such imposition. In this respect, it should be
69 See Articles 22 – 25 of the Agreement Establishing an Association Between the European Economic
Community and Turkey (“Ankara Agreement”).
70 See Art. 23 of the Ankara Agreement, n 66, according to which decisions by the Association Council
noted that in Asda Stores, 71 the European Court of Justice (“ECJ”) clarified that Art. 44 of Decision No 1/95 does not have direct effect before national court. It stated that Decision No 1/95 Art. 44 does not allow individual operators to bring a valid case against its infringement to avoid paying due antidumping duties.
The reasons behind the lack of activism from both parties are rather unclear. According to the EU Commission’s 2019 Turkey Report, Turkey has a significant level of preparation in the area of competition policy. While the legislation framework on anti-trust and mergers is broadly aligned with the acquis72, further harmonisation seems necessary. In particular, the introduction of de minimis, commitments and settlement procedures in mergers controls. Moreover, Turkey’s legislation on enforcement of State Aid Control is not in place and it is yet to adopt an action plan for alignment with the
acquis.73 Given that no request has been made to the Association Council the question of whether the current legislation meets the threshold of Decision No 1/95 Art. 44 remains unanswered. It is, nonetheless, worth considering whether a more detailed legal framework may change this lack of activism.
71 Case C-372/06, Asda Stores Ltd. v. Commissioners of Her Majesty’s Revenue and Customs,
EU:C:2007:787, paras 85-87 and 91. See also Van Bael & Bellis, “EU Anti-dumping and Other Trade Defence Instruments”, Sixth Edition, Kluwer Law International B.V, 2009, page 35.
72 See Arts. 101 and 102 of the Treaty on the Functioning of the European Union.
73 See EU Commission Staff Working Document, Turkey 2019 Report, accompanying the document
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 2019 Communication on EU Enlargement Policy, SWD(2019)220 final, Brussels, 29.5.2019, pages 70-71, available at https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/20190529-turkey-report.pdf [last accessed: 17 July 2019].
3. The Future EU-UK Trading Relationship on Antidumping
The EU27 – UK trading relationship has created much debate. The EU has insisted on basing its future relationship with the UK on one of the existing models, namely the Switzerland, Canada, Ukraine, Norway and Turkey models. These models offer different levels of trade liberalization and economic integration, as well as different antidumping regimes.
While, in principle, Categories A and C could be incorporated in any of these models, Category B antidumping regimes are only available to CU and Free Trade Area, as its WTO-consistency is drawn from the exception embodied in GATT Art. XXIV. Consequently, only the Norway and Turkey models could serve as basis for the future EU27 – UK relationship, should they wish to benefit from such type of regime.
In this regard, considering any category of antidumping regimes without the viability of the trading model in which they will be incorporated seems rather misleading. It will be unreasonable to expect regional partners to incorporate Categories B or C without also requiring certain concessions. Consequently, a brief assessment of the viability of this trading models is necessary before proposing a future the EU27 – UK antidumping regime.
With regards to the Switzerland-model, the European Council stated that “while the
present system of bilateral agreements has worked well in the past, the challenge of the coming years will be to go beyond this complex system, which is creating legal uncertainty and has become unwieldy to manage and has clearly reached its limits”.74
In this regard, the EU views the bilateral and sectoral approach to Swiss-EU economic relations as no longer useful and seeks a solution providing for an institutional framework, surveillance of implementation of new EU acquis and a tribunal that can secure homogeneous interpretation and provide legal certainty.75 In short, basing the
74 See EU Council conclusions on EU relations with EFTA countries, 3060th General Affairs Council
meeting, Brussels, 14 December 2010, para. 6, available at https://eeas.europa.eu/sites/eeas/files/council_iceland.pdf [last accessed: 18 July 2019]
75 See Jacques Pelkmans; Philip Böhler, “The EEA Review and Liechtenstein’s Integration Strategy”,
Centre for European Policy Studies (CEPS), Brussels, 2013, pages 70 -74, available at https://www.ceps.eu/system/files/EEA%20Review_Liechtenstein%20Final.pdf [last accessed: 18 July 2019].
EU27 – UK relationship in a model that is perceived as exhausted would be rather inappropriate and counterproductive.
The participation of the UK in the EEA seems rather unlikely. It has been noted above that the EU accepted the non-application or elimination of antidumping measures upon the condition of the full integration of the acquis communitaire in EFTA MS76. This condition seems to contradict the purpose of Brexit77, ruling out the Norway-model as a potential basis for the future EU27 –UK trading relationship.
The formation of a CU could allow the incorporation of, both, Categories B and C antidumping regimes. Nonetheless, current EU practices imply that Category B is only available to CU concluded with third countries with rather small economies. In short, the EU follows a similar approach in its relations with the European countries of “small territorial dimension”, namely, the Principality of Andorra, the Principality of Monaco and Republic of San Marino. EU’s economic relations with Andorra and San Marino are governed by two CUs: the EU – Andorra CU78 and the EU – San Marino CU79,
respectively. For both of these CUs Article 7 requires Andorra and San Marino to
“apply ... the laws, regulations and administrative provisions applicable to customs matters in the Community and necessary for the proper functioning of the Customs Union ... [as well as] the common commercial policy of the [Union]” for those products
covered by the CU. The obligation to adopt the EU common commercial policy – which includes antidumping –80, with regards to the products covered by the agreements,
76 See Section 2.3.1, page 21.
77 See General Secretariat of the Council, United Kingdom notification under Art. 50 TEU, Document XT
20001/17, 29 March 2017, Brussels, available at http://data.consilium.europa.eu/doc/document/XT-20001-2017-INIT/en/pdf [last accessed: 12 June 2019]
78 See EU – Andorra CU, signed on 28 June 1990, in force since 1 July 1991. This CU only covers
industrial products.
79 See EU – San Marino CU Agreement, signed on 16 December 1991, in force since 1 April 2002. The
provisions of this agreement apply to products falling within Chapters 1 to 97of the Common Customs Tariff, which includes live animals, animal products, vegetable products to textiles and textile articles or vehicles, aircraft, vessels and associated transport equipment., except those falling within the scope of the Treaty establishing the European Coal and Steel Community. See also Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariffs (Official Journal L 256, 07/09/198), available at https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31987R2658&from=en [last accessed: 11 June 2019]. See also
Common Customs Tariff available at
https://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp [last accessed: 11 June 2019
results in Andorra and San Marino’s application of the EU antidumping regime vis-à-vis third parties81
The antidumping regime contained in the EU – Turkey CU falls within Category C. This sets the EU – Turkey CU as the only EU CU that does not benefit from the impossibility to impose antidumping duties. As it currently stands, the EU has not concluded a CU with any third countries with a large economy other than Turkey. Whether this single CU can be seen as EU practices is relatively up for discussion. Nonetheless, the fact that the EU has offered the Turkey-model to the UK as basis for their future relationship could be seen as an indicator. Some authors have also suggested that Turkey’s considerably larger economy seems to have resulted in less advantageous provisions, in other areas, as compared to the other two EU CUs.82 Given the economic size of the UK, which according to the International Monetary Fund’s Report in 201883, ranks 5th (with a GDP of 2,828,644 US dollars), the conclusion of a CU with the EU would most likely follow the lines of the Turkey CU.
Finally, the deficiencies of the Switzerland-model and UK’s undesirable participation in the EEA narrow the available options to: (a) a Canada or Ukraine-model which includes Category A antidumping regimes; and (b) a Turkey-model which provides for Category C antidumping regimes. If the EU follows its current practices, the inclusion of Category C antidumping regimes in a Canadian or Ukrainian-based regional trade agreement seems rather unlikely since both models contain antidumping regimes falling within Category A. As mentioned above, Category A antidumping regimes mirror or refer to the multilateral regime on antidumping. In this regard, the inclusion of such
81 College of Europe/European University Institute, Joint Conference on Differentiation in the European
Union: “A new pragmatism or the end of ‘ever closer union’?” (17 November 2016), Position Papers and Summary of Proceedings, available at https://www.coleurope.eu/sites/default/files/uploads/event/coe-eui_conference_on_differentiation. _papers_and_summaries.pdf [Last accessed 20 February 2019].
82 See Maryanne Kamau; Arnoud Willems, “Levelling EU – Turkey Trade: An Assessment of the
Asymmetrical Customs Union between the European Union and Turkey”, Thomson Reuters and Contributors , 2019.
83 International Monetary Found, “World Economic Outlook Database” [Last accessed: 10 April 2019].
The World Bank Report in 2017 also positioned the UK’s economy as the 5th economy in the world with
a GDP of 2,622,434 US dollars. Moreover, the OECD’s latest forecasts, UK’s GDP growth forecasts in 2019 was raised to 1,2%. See World Bank Data, World Development Indicators, “GDP (current US$)”, available at https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?year_high_desc=true [Last accessed 4th May 2019]. See also House of Commons Library, Economic Indicators, May 24 2019,
Number 02784, available at
https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN02784#fullreport [Last accessed: 1 June 2019].
regime will not affect the rights and obligation of regional partners with regards to antidumping. Consequently, the formation of a CU on the lines of the EU – Turkey CU seems more appealing and, as it will be proved in the following sections, beneficial. Given that the global economic situation has shifted since the conclusion of the EU – Turkey CU without corresponding changes to the terms of the CU, some changes will need to be incorporated in the new CU between the EU and the UK.84 The EU Commission also shares the need to modernize the EU – Turkey CU, as shown in its requests to the Council in 2016.85 The following subsection addresses the benefits of an antidumping regime based on the interaction between antidumping and competition law, as does the Turkey – EU CU, to further propose a new and modernized regime based on this interaction for the EU27 – UK.
3.1. The Interaction between Antidumping and Competition Law
Understanding the interaction between antidumping and competition law is essential in the determination of whether the later can substitute the former in its attempt to protect the concerned domestic industry from the negative effects caused by dumped products. While the laws concerning antidumping and competition protection have a common origin,86 they constitute two entirely different categories of legal structures. Indeed, they
both aim at protecting the market from unfair trade practices but proceed on different conceptual tracks, diverging on legal and economic ground.
On the one hand, antidumping is concerned with trade at international level and aims at protecting domestic producers from trade distortions from international producers, as well as achieving distributional fairness.87 On the other hand, competition law tends to
84 Starting with the scope of the CU, which should cover, both, services and agriculture.
85 See EU Commission proposal to modernise the Customs Union with Turkey, available at http://
trade.ec.europa.eu/doclib/press/index.cfm?id=1609 [last accessed: 1 June 2019]
86 See Competition Commission of India, “Study on Antidumping and Competition Law”, Economic
Laws Practice, New Deli, available at
https://www.cci.gov.in/sites/default/files/Antidumping_20090420151657.pdf [last accessed: 11 June 2019]. See also Rishab Khare, “Antidumping Law and Competition Law: A Case of Intersecting Lines”,
Singh & Associates, available at
http://www.mondaq.com/india/x/782654/Antitrust+Competition/Anti+Dumping+Law+And+Competition +Law+A+Case+Of+Intersecting+Lines [last accessed: 11 June 2019]
87 See Martyn Taylor “International Competition Law: A New Dimension for the WTO?” Cambridge,
