EEC Anti-Dumping Enforcement:

An Overview of Current Problems

Ivo Van Bael ^*1

Introduction

Anti-Dumping enforcement has always been, and it still is, by far the most important instrument Community authorities may use to secure protection against imports. Anti-Dumping actions tend to be favoured over other trade remedies because, unlike safeguard measures, they offer the possibility for a selective approach and it does not entitle the exporting country to any compensation. Furthermore, the methodology used in anti-dumping law can give rise to high dumping margins and duties unrelated to the actual market situation.

The first EEC Anti-Dumping Regulation dates back to 1968.² After more than two decades of EEC anti-dumping enforcement, it may be appropriate to review the situation in order to see what problems remain to be resolved. This is all the more so in view of the fact that the revision of the GATT Anti-Dumping Code is on the agenda of the Uruguay Round negotiations.

During the first ten years of EEC anti-dumping enforcement, relatively few cases were brought and virtually all were settled in the form of price revision undertakings offered by the exporters and accepted by the Community authorities.³ In those days, the Commission perceived its role more as that of an "amiable composer" than of a prosecutor. The Commission aimed at striking a fair balance between the interests of exporters and consumers on the one hand and local industry on the other. This proved to be a convenient solution for all the parties concerned: (1) the complainants obtained relief more quickly; (2) the exporters avoided the payment of duties; and (3) the Commission managed to handle the case load with a very limited staff.

Later, as a result of the economic recession, the number of cases increased substantially. The Commission's anti-dumping division was given more staff and they embarked on a more vigorous enforcement of the Anti-Dumping Regulation, leading more frequently to the imposition of duties than to the acceptance of undertakings. This shift in policy came about at the same time that the Community institutions came to realize that the Anti-Dumping Regulation could be used as a convenient tool of trade and industrial policy, instead of purely as an instrument of commercial defence.⁴

In view of the fact that the EEC Member States traditionally have been wary of transferring effective powers of commercial and industrial policy to the Community authorities, it is rather normal that the EEC Commission has started to assert its powers in these areas, by the back doors so to speak, by relying on the direct powers it holds in the anti-dumping field.

Anti-Dumping proceedings, instead of aiming solely at restoring prices in the market to fair levels, are now being used to give European industry a second chance to get its act together in the face of global competition. By the same token, anti-dumping actions are meant to pressure governments of third countries to adopt measures to reduce their trade surplus and to open their markets to EEC exports. In addition, third country exporters are being induced to set up manufacturing operations inside the EEC, with a rather high "minimum" local content.

Needless to say, in order to maximize the impact of anti-dumping actions as an offensive weapon in the context of the Community's trade and industrial policy, its deterrent effect has to be exploited in full. This may help to explain some of the interpretations made by the Community authorities of certain provisions in the Anti-Dumping Regulation which do not seem to make much sense from an economic point of view.⁵ It may also be the reason why Japanese exporters have tended to be the first victims of such novel interpretations.⁶

Unfortunately, the Court of Justice has thus far refused to interfere with the considerable discretion enjoyed by the Community authorities when interpreting the Anti-Dumping Regulation. Furthermore, the Court of First Instance, which has been installed as of September of last year, has been clipped in its wings from the outset. Trade cases are excluded from its scope of jurisdiction, although the matter may be reconsidered by the Council of Ministers after the first two years of its operation.

In the absence of adequate judicial review in the Community, exporters start voicing their concern in the press.⁷ In addition, exporting countries have started resorting to the GATT dispute settlement process in an attempt to contain what they perceive as an abuse of the anti-dumping laws.⁸ In the meantime, however, some of the more questionable interpretations and practices of the Community authorities under the Anti-Dumping Regulation have been codified in a series of amendments adopted by the Council in July 1988.

The Community's so-called 1992 programme, aiming at the completion of the internal market, has given rise to fears in third countries, notably Japan and the U.S., that outsiders will pay the price for this market integration. However, "Fortress Europe" is not a new phenomenon. It already exists.⁹ The Community's enforcement of its anti-dumping rules is a form of hidden protectionism which deserves to be exposed.

1 ^* Van Bael & Bellis. This article is based on a previous article published in the Journal of World Trade, 24 JWT (1990) 2 and printed here by permission of the publishers of the Journal of World Trade.

2 Regulation No. 459/68, OJ (1968) L 93/1. Currently, Regulation No. 2423/88 applies, published in OJ (1988) L 209/1. For a comprehensive review of the current Regulation see Van Bael & Bellis, EEC Anti-Dumping and Other Trade Protection Laws (2nd. ed. 1989); see also Mr. Bellis' contribution in J. Jackson & E. Vermulst (eds.) Comparative Anti-Dumping Law: Dumping and Anti-Dumping in Australia, Canada, the European Communities and the United States (1989).

3 See Van Bael, `Ten Years of EEC Anti-Dumping Enforcement', Journal of World Trade Law (1979) 395.

4 For example, when the steel crisis broke out in the EEC a number of "fast track" anti-dumping proceedings were launched in order to force exporting countries to sit at the table with the Community authorities and agree on quotas. Similarly, the opening of an anti-dumping investigation against video-cassette recorders from Japan appeared to be nothing but a prelude to the negotiation of a voluntary restraint agreement, OJ (1983) L 86/23. Perhaps the current investigation into semiconductors from Japan could lead to a result similar to the US-Japan Agreement aimed at stabilizing prices and increasing sales of US chips in Japan. More generally, the current flurry of anti-dumping proceedings involving Japanese and Korean products fits into the Community's "get tough" policy aimed at forcing these successful exporting countries to reduce their trade surplus with the EEC.

5 See Hindley, `Dumping and the Far East Trade of the European Community', The World Economy (1988).

6 Id.; see also Bell, `Anti-Dumping Practice of the EEC: The Japanese Dimension', Legal Issues of European Integration (1987).

7 See, e.g., the campaign by EPSON in Financial Times (12 April 1988).

8 For example, Japan has requested the formation of a GATT panel to resolve its dispute with the EEC over the so-called parts amendment, introduced in the EEC Anti-Dumping Regulation to combat circumvention.

9 See, e.g., Hindley, `The Design of Fortress Europe', Financial Times (6 January 1989).

© 1990-2004 European Journal of International Law
All comments and suggestions should be sent to webmaster
This site is part of the Academy of European Law online, a joint partnership of the Jean Monnet Center at NYU School of Law and the Academy of European Law at the European University Institute.
This file was last modified: Thursday, November 11, 1999 12:27PM