I INTRODUCTION

Last year's EU trade landscape proved to be a most unruly horse to ride. Exacerbated by the tide of uncertainty spilling over the Atlantic, economic operators not only were faced with the odd trade defence investigation, but also had to worry about more systemic dangers to international supply chains. In fact, a 2019 McKinsey study lists 'uncertainty over trade policy' as the greatest globalisation-related concern to companies operating in international value chains.2 What had two years earlier still been referred to as 'geopolitical complexities'3 has now crystallised into a more tangible problem: unpredictable trade policy as a whole. As will be set out in this chapter, 2018 was an interesting year for trade lawyers in the EU. For only the second time in the history of the Common Commercial Policy, the EU imposed erga omnes safeguard measures, this time arising from a threat of serious injury mainly linked to the existence of trade diversion from the United States' Section 232 measures on certain steel products. On top of that, the general systemic uncertainty surrounding Brexit certainly did no favours for trading and investment conditions in the EU. At the same time, trade defence measures decreased in number from the previous year and important free trade agreements entered into force. The below is a review of those 2018 and early 2019 developments that have most occupied trade lawyers in the EU.

II LEGAL FRAMEWORK

The European Union's anti-dumping and anti-subsidy legal framework was amended and codified in 2016. It currently comprises basic Anti-Dumping Regulation4 and basic Anti-Subsidy Regulation.5 It is important to note that these legislative instruments were overhauled substantially by the adoption of Regulations (EU) 2017/23216 and 2018/825.7 The former introduced a new methodology with regard to normal value calculations, regardless of origin, where domestic prices and costs are established to be significantly distorted because of a state intervention, while the latter modernised the EU's trade defence instruments (TDI) for the first time since 1996. These legislative changes were covered in detail in previous editions of this book.

Erga omnes safeguard measures in the EU are governed by Regulation (EC) 2015/478,8 which concerns the rules on imports from World Trade Organization (WTO) members, and Regulation (EU) 2015/755,9 which applies to imports from non-WTO members. No changes to these regulations resulted from the above legislative developments.

III OVERVIEW OF TRADE DEFENCE INSTRUMENTS

The past year's statistics report 93 definitive anti-dumping measures and 12 countervailing measures in force.10 This is a slight decrease measured against the previous year that saw 97 definitive anti-dumping measures and 13 countervailing measures in force at the end of 2017.

A substantial part of the work of the European Commission (the Commission) continued to be review investigations, with 24 initiated in 2018. These reviews consisted of 17 expiry reviews, three interim reviews, one anti-absorption investigation and three reopenings.11

China remains the main country affected by the measures in 2018, accounting for 50 per cent of the total measures imposed as at 31 May 2019.12 It has been subject to 66 definitive measures, with five anti-dumping investigations and one countervailing investigation pending. China, Russia and the United States are the main countries subject to measures.13

Several noteworthy investigations initiated between 1 August 2018 and 31 May 2019 deserve a mention.

First, it is important to note that for several years now, the Commission has committed itself to supporting the European steel industry in line with its strategy adopted in 2016,14 which is aimed at tackling the challenges of global steel overcapacity. To this end, 52 EU anti-dumping and anti-subsidy measures are presently in place with respect to steel products.

In addition to those measures, on 26 March 2018, the Commission initiated a safeguard investigation into certain steel products.15 This represents the second such investigation commenced on steel products pursuant to the rules set out in Article XIX of the GATT 1994 and the WTO Agreement on Safeguards, as implemented by Regulations (EU) 2015/478 and (EU) 2015/755. Following the imposition of provisional safeguard measures, definitive measures were adopted on 31 January 2019.16 These measures concerned 26 product categories and took the form of an erga omnes tariff-rate quota, so that imports of the product categories concerned above a particular quantitative threshold are subject to a 25 per cent duty (TRQ). In line with its obligations under WTO law, the measures were imposed for three years17 against imports from all countries except for the European Economic Area states (Norway, Iceland and Lichtenstein), as well as Botswana, Cameroon, Fiji, Ghana, Ivory Coast, Lesotho, Mozambique, Namibia, South Africa and Eswatini.18 On 17 May 2019, the Commission commenced its first review of those measures,19 which at the time of drafting is ongoing, and is predicted to be finalised by the end of September 2019. As announced in its Notice of Initiation, in the review, the Commission seeks to assess whether, on the basis of the Union interest, it may have to adjust the level or allocation of the quantitative element of the TRQ in case of changed circumstances during the period of imposition of the measures.20 Among others, the Commission intends to investigate:

  1. the level and allocation of tariff-rate quota for a number of specific product categories;21
  2. crowding out of traditional trade flows;22
  3. potential detrimental effects in achieving the integration objectives pursued with preferential trading partners;23
  4. update the list of developing WTO member countries excluded from the scope of the measures based on their most recent level of imports;24 and
  5. any other changes in circumstance that may require an adjustment of the level or allocation of the tariff-rate quota.25

Separately, the Commission also announced that it is assessing whether the combination of anti-dumping or anti-subsidy measures and safeguard measures on the same product could have an effect greater than that intended in terms of the Union's trade defence policy and objectives.26 As at the time of writing, no final conclusion has been reached.

Against this background, it is worth noting that, during the past year, several countries terminated their investigations into steel products.27 Whether the EU will follow their lead remains to be seen, particularly against the background of ArcelorMittal's recent announcement that it plans to expand steel production cuts in Europe because of 'an unprecedented rise in imports from outside the EU'.28

Second, biodiesel makes a return in the form of anti-subsidy investigations into imports from Argentina and Indonesia. Back in 2012, the Commission first commenced anti-subsidy and anti-dumping investigations against imports of Indonesian biodiesel, made of palm oil, and Argentinian biodiesel, made of soybeans.29 However, the anti-subsidy investigations at the time were terminated,30 whereas anti-dumping duties were imposed.31 The latter measures then led to a number of disputes in Geneva (at the World Trade Organization Dispute Settlement Body (WTO DSB)32) and Luxembourg (at the EU courts33). The present anti-subsidy investigations into imports of biodiesel originating in Argentina resulted in definitive measures on 12 February 2019,34 coupled with an undertaking subject to a quantitative limit for eight Argentinian producers and the Argentinian Chamber of Biofuels.35 The anti-subsidy investigation into imports of biodiesel from Indonesia remains pending.36

Another recently initiated case that is worth mentioning is the anti-subsidy investigation into imports of certain woven or stitched glass fibre fabrics (GFF) from China and Egypt.37 Initiated on 16 May 2019, this investigation follows the earlier initiation of an anti-dumping investigation against the same product.38 The novelty of this case, however, relates to the claim that 'some of the subsidies are directly granted by the Government of Egypt, and some indirectly by the Government of China, but via the Government of Egypt.'39 That is, the evidence presented to the Commission is reported to have shown that the only Egyptian exporting producer situated in the special economic zone at issue (the China-Egypt Suez Economic and Trade Cooperation Zone) is Chinese-owned and benefits from preferential access to loans from Chinese state-owned or state-controlled entities to Egyptian state-owned banks.40 Against the backdrop of similar cooperation programmes under the Belt and Road Initiative, economic operators and governments alike are going to observe this investigation with great interest. Definitive measures, if any, are due on or before 13 June 2020.

Finally, it is worth reporting on first uses of the new anti-dumping methodology targeting significant market distortions. On 2 May 2019, in an expiry review into duties on organic coated steel, the Commission for the first time applied measures based on the new anti-dumping methodology. In so doing, it determined that the product under review was subject to a number of distortions: first, the Commission established the existence of significant economic distortions affecting domestic prices in China in the general economic context, highlighting the effects arising from the 'socialist market economy' system; second, it assessed the effect of state intervention and dominance of state ownership in the steel sector; third, it considered to what extent the Chinese state would be in a position to interfere with prices and costs through state presence in firms; fourth, it analysed to what extent the system of state planning, through government five-year plans and other circulars, would affect the prices on the domestic market; fifth, it considered that Chinese property and bankruptcy laws would result in the maintenance of insolvent firms; and, sixth, that wage costs and access to capital amounted to non-market-conforming distortions of the prices and costs of input materials. Considering all these elements, the Commission concluded that 'prices or costs, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention', which allowed the Commission to proceed to calculate normal value on the basis of Mexico as the representative country. The review ultimately extended the measures concerned.41

Another expiry review worth reporting on concerns the investigation into imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America.42 While definitive findings are still pending, in imposing provisional duties against Russia, the Commission – for the first time – applied a modulation of the lesser-duty rule (by which duties are set against the lower of dumping or injury margin) because of the provisionally determined distortions in raw material (gas) prices in Russia.43

The only Article 5 investigation fully applying the new methodology (regarding steel sheet piles from China) was terminated on 5 July 2019.44

IV LEGAL AND PRACTICAL DEVELOPMENTS

In the area of TDI, no substantial legislative changes occurred in 2018. That is of little surprise: the EU's TDI framework only recently underwent a major overhaul with changes to the basic anti-dumping and anti-subsidy Regulations that were introduced through Regulations (EU) 2017/2321 and (EU) 2018/825. The aim of these changes was to streamline investigations, increase transparency, help SMEs, and establish the possibility to impose appropriate duty levels in investigations where top-down market distortions in the country under investigation sought to impact on the normal value of the product under investigation.

In 2018, and in line with its Communication on Steel of 2016,45 the Commission continued to focus on investigations in respect of steel products. In fact, in the past year, TDI investigations into unfair trading of steel products comprised 44 per cent46 of the Commission's case work, giving new life to the old joke that 'real trade lawyers know at least 10 types of steel'. Definitive safeguard measures were imposed on certain steel products on 31 January 2019. At the same time, anti-dumping and anti-subsidy measures remain in place for some categories covered by the safeguard measure. To tackle this issue and avoid double-counting, the Commission established a mechanism by way of which the relevant anti-dumping and anti-subsidy measures should be amended in accordance with Notice 2019/C 146/0647 to avoid (1) an undesirably onerous burden on certain exporting producers, and (2) greater than necessary effect in terms of the Union's trade defence policy and objectives.

As mentioned above, the majority of the TDI investigations in 2018 (as in previous years) were against China. The Commission has published a report on China's significant market distortions48 in support of its new methodology. It is also working on such a report on Russia.49

In a separate drawer of the Common Commercial Policy, Regulation (EU) 2019/6750 imposed certain safeguard measures with regard to imports of indica rice originating in Cambodia and Myanmar, temporarily withdrawing the preferential access granted to these countries under the Everything But Arms arrangement of the EU's GSP Framework,51 and re-introducing the ordinary Common Customs Tariff duties on imports of those products from the countries concerned. This type of measure is not employed often, but has been made use of in the past, in particular to investigate whether a beneficiary country had been sufficiently complying with the GSP's human rights conditions. The temporary withdrawal arising from Regulation (EU) 2019/67 will remain in place for a period of three years, unless extended in duly justified circumstances.52

Not specifically a TDI measure, but nonetheless of note to the international trade practitioner, is the entry into force of Regulation (EU) 2019/712 on safeguarding competition in air transport.53 This regulation effectively repeals and replaces its never-used 2004 predecessor (Regulation (EC) 868/200454) and tasks the Commission to address unfair practices by third countries in the air transport sector. In a nutshell, mirroring many typical TDI provisions, the Commission is granted the implementing powers to adopt measures (financial duties or the suspension of some services) when air carriers benefit from discriminatory practices or subsidies granted by third countries that result in injury to EU air carriers. It remains to be seen whether the 2019 regulation will be applied.

i EU's trade and economic partnerships

After years of negotiation, and during times of great uncertainty in international trade, on 28 June 2019, the EU and Mercosur, a bloc comprising Argentina, Brazil, Paraguay and Uruguay, reached a political agreement on trade that will cover a population of 780 million and bring the two trade partners politically and economically closer together. This is most needed for the EU export industry, which, following stalemates in negotiation, particularly on agriculture, lost for a short while its long-standing rank as the largest trading partner for Mercosur (excluding Venezuela) to China.55 While the EU–Mercosur Association Agreement will still require approval by the Council and the European Parliament before its entry into force, before the summer recess, the Irish parliament, the Dáil, voted in favour of a largely symbolic motion to reject the trade deal. This may have no implications for its approval process, however, the vote should at least caution those who believe that the die has already been cast on this deal.

Separately, two important free-trade agreements entered into force in the first half of 2019. First, on 1 February 2019, the EU and Japan's Economic Partnership Agreement (EU–Japan EPA) entered into force. Covering one-third of global GDP, the EU–Japan EPA represents not only the biggest bilateral trade partnership ever concluded by the EU, but also the first EU trade agreement locking in the Paris climate deal commitments alongside provisions on minimum standards for workers' rights and consumer protection. Therefore, the agreement creates a Euro-Pacific market space without tariffs and common technical standards in key sectors (e.g., motor vehicles, life science, food products, clothing and ICT), facilitates trade in services, and encourages increased activities across a number of service sectors that account for 90 per cent of Europe's job market.56

Following the same steps, the trade and investment agreements between the EU and Singapore received the approval of the European Parliament on 13 February 2019, with the green light given to the Partnership and Cooperation Agreement.57 Singapore is the EU's largest trading partner in the southeast Asia region, with total bilateral trade in goods and services estimated at €53 billion and €51 billion respectively. Therefore, the significance of these agreements, which will ensure a certain minimum level of investment protection and remove all remaining tariffs on EU products and obstacles to trade besides tariffs in major sectors, should not be underestimated. Further steps to effect entry into force require the finalisation of Singapore's internal administrative procedures and the conclusion of the final formalities by the EU and Singapore. In contrast, the investment protection agreement, which falls under the shared competence of the EU and its Member States after Opinion 2/15 of the Court of Justice58 also needs to be ratified by the EU Member States, following their national procedures.59

Finally, the mechanism for the settlement of disputes in the EU–Canada Comprehensive Economic and Trade Agreement (CETA), which entered into force in 2017, was given its blessing by the Court of Justice in Opinion 2/17 on 30 April 2019. The Court's opinion had been sought by Belgium in 2017, expressing doubts as to the effects of that mechanism on the exclusive jurisdiction of the Court over the definitive interpretation of EU law, and therefore the autonomy of the EU legal order, and certain other matters. With its positive opinion, and subject only to minor prior requirements, the Court clears the way for entry into force of the type of dispute settlement mechanism envisaged by CETA (and, by extension, also of the Multilateral Investment Court – a global dispute settlement body for investment disputes).

ii Brexit

The core legislation comprising the UK's TDI framework is the Trade Bill60 and the Taxation (Cross-border Trade) Act 2018 (TCBTA).61 The Trade Bill was introduced into the House of Commons on 7 November 2017 and is currently progressing through Parliament.62 The aim of the Trade Bill is to ensure continuity of the effects of existing EU free trade agreements and other preferential trading arrangements upon Brexit. While the Trade Bill does not create an underlying trade remedies framework, it sets up the basis for an establishment of the Trade Remedies Authority (TRA). More details on the TRA's function are contained in TCBTA,63 the general provisions of which came into force on 13 September 2018.

The TRA is a public body that, much like the Commission, will be carrying out investigations in the area of anti-dumping, anti-subsidy and safeguards. It will recommend appropriate measures to the Secretary of State, who in turn will either reject or accept these recommendations. That said, the Secretary of State can only reject a recommendation on public interest grounds. To ensure transparency, when the Secretary of State decides not to apply measures on public interest grounds, the reasons for that will have to be explained to the House of Commons.64

In the meantime, before the Trade Bill enters into force and the TRA is fully functional, the Trade Remedies Investigation Directorate (TRID)65 is carrying out an examination of which active EU measures the UK may decide to keep after Brexit. The TRID was set up on 6 March 201966 within the Department for International Trade to ensure that such measures meet the needs of the UK economy and are WTO-compliant. Until the full examination and potential reviews of the EU measures are complete, the UK will keep the EU duty levels set by the existing measures.67

Given that there are more than 10068 measures in place at EU level, considerable work needs to be undertaken by the relevant UK authorities to provide certainty and continuity to UK businesses.

V TRADE DISPUTES BEFORE THE EUROPEAN COURTS

In 2018, the Court of Justice (ECJ) and the General Court (GC) together handed down a total of 26 judgments.69 While this slowly reduces the backlog of pending cases (around 35), the EU continued to face regular court challenges concerning its trade policies and trade defence practice.

Below, we discuss some of the most interesting practical developments in the field of trade defence.

i Access to documents and information not accounted for in the basic Regulations

In the area of trade defence, access to confidential documents and information is subject to strict differentiation as to whether a document or certain information is open for disclosure because it forms part of the 'non-confidential' file, or whether that document is subject to a non-disclosure obligation because that document is confidential by nature, is internal, or has had confidential treatment requested for it (and does not lend itself to indexing or summary). However, the delicate contours of this interplay between the various access to documents provisions of the basic Regulations and the observance of the rights of defence of interested parties had long been unclear.

The recent judgment in Jindal tackles this system for the first time and clarifies what must be provided to interested parties for rights of defence purposes.70 In doing so, the judgment recalls that the basic Regulations provide for a complete system of procedural guarantees seeking, on the one hand, to allow interested parties effectively to defend their interests and, on the other hand, to preserve, when it is necessary, the confidentiality of the information used in the course of that investigation.71 According to the GC, the various provisions on confidentiality and disclosure allow those two requirements to be reconciled.72 That is to say that, for the effective defence of their rights, interested parties need to be given access to the 'non-confidential' file of the investigation during the investigation and receive a complete disclosure of their information used in the investigation. The analogous safeguards on confidentiality circumscribe these access rights.73

However, according to Jindal, those provisions do not cater for 'documents the disclosure of which the applicants could not claim pursuant to the basic regulation'.74 That is because access to any other information 'would be contrary to the respect for the confidentiality of such data'.75 That reasoning is akin to the Technische Glaswerke Ilmenau case law, which, while concerning access to documents under Regulation (EC) 1049/2001,76 seeks to ensure that the dialogue and balancing exercise sought by the EU legislator in investigation procedures not be disturbed.77 In practice, this means that interested parties can no longer rely on a rights of defence claim during the investigation to get access to more detailed information than that which would have been available to them on the 'non-confidential file' or in their individual disclosure. To the Commission, this reasoning may provide some breathing space particularly with regard to vexatious and long lists of claims and 'clarification' questions during the course of the investigation. At the same time, Jindal may shift the Court's attention to greater observance of the disclosure provisions in the basic Regulations, including verification of the up-to-date nature of the 'non-confidential file' and more detailed disclosure documents and verification reports (the latter of which was greatly relied on as evidence in the recent judgment in Changmao).78

ii Cooperation between national courts and EU institutions

Picture the following scenario: you do not have standing for a direct challenge before the GC but still wish to challenge the validity of a trade defence regulation. Under the Foto-Frost case law, a national court can merely confirm the validity of a regulation, but cannot, by itself, invalidate such a regulation. If it has been sufficiently persuaded to have doubts about the validity of the regulation, it must refer the case to the ECJ.79

What to do, however, where raising those doubts requires reliance on confidential information? From Jindal, we know that in trade defence investigations, such information is not easy to come by. In Eurobolt, although the applicant before the Dutch national courts had raised doubts as to compliance with certain essential procedural rules, it could not prove that was the case because to do so it would have had to rely on confidential information not in its possession. That is what prompted the Dutch Supreme Court to refer the case to the ECJ: would the principle of sincere cooperation, coupled with the preliminary reference procedure, entitle national courts to approach the EU institutions that had taken part in drawing up a piece of secondary EU legislation to provide them with certain documents or information to confirm the legislation's validity, and rid themselves of the reasonable doubts raised by the parties before them, without making a reference to the ECJ?

The answer from Luxembourg was a resounding yes. According to the ECJ:

a national court or tribunal is entitled to approach an EU institution, prior to the bringing of proceedings before the Court of Justice, in order to obtain specific information and evidence from that institution which that court or tribunal considers essential in order to dispel all doubts which it may have as regards the validity of the EU act concerned and, thus, avoid making a reference to the Court of Justice for a preliminary ruling for the purpose of assessing validity.80

According to the ECJ, the EU institutions would be under a duty of sincere cooperation with the judicial authorities of the Member States, because those authorities are responsible for ensuring that EU law is correctly applied. That transforms the role of the EU institutions into a quasi-standing amicus curiae, which has to assist the national court with evidence and information in finding the correct determination of the question before it, theoretically establishing a similar role to that which the Commission already plays at ECJ level for preliminary references. Only under the conditions laid down in the long-standing Zwartveld81 case law could those institutions deny the transmission of the evidence or information concerned, thus setting a high barrier to deny such cooperation. This development will greatly assist national litigants in the enforcement of their rights, be that in the field of trade defence or beyond, because not only does the Eurobolt approach bridge the (at times) high psychological hurdle of establishing genuine doubts about the validity of a piece of EU secondary legislation, but it also has the potential of shortening national procedures significantly. At least for the applicant in Eurobolt, a request for the underlying information at first instance could have saved taking the case to the Dutch Supreme Court.

iii Developments of the Rusal Armenal case law

On 16 July 2015, the Grand Chamber of the ECJ handed down its judgment in Case C-21/14 P Rusal Armenal. It laid down that the recitals to the basic anti-dumping Regulation do not reveal sufficient intention on the part of the legislator to implement into EU law the obligations assumed under Article 2 of the WTO Anti-Dumping Agreement.82 Furthermore, according to the ECJ, the WTO Anti-Dumping Agreement 'has no specific rules relating to'83 the determination of market economy status, so that there would effectively be a certain policy space unassumed by public international law, which may be filled by an EU law-specific solution. In that area, the ECJ recognises the EU legislator had wished to express an intention to 'adopt in that sphere an approach specific to the EU legal order'.84

But does Rusal establish a space of 'European exceptionalism' in trade defence law? Last year proved that fear to be unfounded. First, in November 2018, in its judgment in Baby Dan, the ECJ held that because the basic anti-dumping Regulation defines, by way of cross-reference to a different article, the meaning of 'major proportion'85 of the Union industry – a reference that is notably absent in the equivalent provision in the WTO Anti-Dumping Agreement – '[t]hat reference constitutes an additional factor in relation to the definition in Article 4.1 of the Anti-Dumping Agreement'.86 In light of this, 'it must be held that the Anti-Dumping Agreement, as interpreted by the DSB, cannot be relied upon to challenge the legality of the contested regulation.'87 Read in isolation, that conclusion might be worrying to some. However, the ECJ also makes clear reference to the judgment in Philips Lighting, in which the Grand Chamber of the ECJ opined that the additional factor in Article 5(4) of the basic anti-dumping Regulation would not be an obstacle to read that provision in line with Article 4.1 of the WTO Anti-Dumping Agreement.88 And since the industry at issue in Baby Dan was, in addition, highly fragmented, the judgment is also in line with the directions given by the Appellate Body in EC – Fasteners.89

Along similar lines, in March 2019, the GC in Foshan Lihua Ceramic noted that an additional subparagraph to an article in the basic anti-dumping Regulation on new exporter reviews that differed from that contained in the WTO Anti-Dumping Agreement 'is an expression of the EU legislator's intention to adopt an approach in this field that is specific to the EU legal order'.90 And, on that basis 'it cannot be established that it was the EU legislature's intention, by the adoption of Article 11(4) of the Basic Regulation, to implement the particular obligations created by Article 9.5 of the Anti-Dumping Agreement.'91 That is correct: there is no equivalent paragraph addressing sampling in the WTO Anti-Dumping Agreement with regard to new exporter reviews, nor does WTO jurisprudence exist on that issue. So, Foshan Lihua Ceramic concerns a Rusal-ised situation where the EU legislator has filled an existing policy space. That is, however, only until an interpretation on the cross-application of the sampling possibility in Article 6.10 of the WTO Anti-Dumping Agreement is resolved or a narrow meaning is given to Article 9.5 of the WTO Anti-Dumping Agreement, which is when Article 11(4) of the basic anti-dumping Regulation will have to again be interpreted to conform with WTO law.

VI TRADE DISPUTES BEFORE THE WTO DSB

In the past year, there were two major developments before the WTO DSB that concerned the EU.

First, on 7 May 2019, China requested the suspension of the Panel's work in EU – Price Comparison Methodologies. On 14 June 2019, the Panel informed the DSB that it wished to grant China's request and suspend its work. According to Article 12.12 of the WTO's Dispute Settlement Understanding, the Panel may suspend its work at any time at the request of the complaining party for a period not exceeding 12 months. That provision also indicates that if the work of the Panel has been suspended for more than 12 months, the authority for establishment of the Panel lapses.92 China's request comes in the wake of news reports that 'China didn't automatically qualify for market-economy status in 2016.'93 Such reports remain unconfirmed by the EU and the United States.

Second, on 10 August 2018, the Panel released its report in EU – Energy Package. In this proceeding, Russia challenged the EU's Third Energy Package (which consists of two EU directives and two regulations) over the regulation of the natural gas sector in Croatia, Hungary and Lithuania, and the development of certain natural gas infrastructure in those countries. The challenged measures fall into seven different categories, ranging from unbundling (that is, the separation of transmission and distribution of gas providers on the domestic market), to certain public body measures (which, according to Russia, seek to 'exempt' pipeline transport service suppliers owned and controlled by EU Member States from the requirement of unbundling94), to certain infrastructure exemption measures (which, allegedly, led to the Commission and Member State authorities interpreting certain requirements for eligibility for infrastructure exemption differently with regard to EU and Russia-imported natural gas and pipeline transport service suppliers). While the detail of the Panel's conclusions escapes a short summary, it generally concluded that Russia did not demonstrate the inconsistency of most measures. With regard to the measures referred to above, the Panel noted that there was insufficient evidence provided by Russia that: first, the unbundling measure is inconsistent with the GATS (Article II.1 dealing with non-discrimination, XVI:2(a) dealing with market access commitments) or GATT (Articles I:1 and III:4 also dealing with non-discrimination); second, the public body measure would be inconsistent with GATS Article XVII (dealing with national treatment); and third, the infrastructure exemption measures would be inconsistent with GATT Article X:3(a) (which concerns the uniform application of rules). Only with regard to one measure, the TEN-E measure, concerning benefits under the TEN-E Regulation95 for certain 'projects of common interest', did the Panel find a violation of GATT Articles 1:1 and III:4. These findings were appealed by the EU on 21 September 2018, with the Appellate Body report outstanding.

VII OUTLOOK

For trade lawyers at least, Brexit is the gift that keeps on giving. With Brexit preparations continuing, EU trade law is likely to gain renewed interest on both sides of the Channel. Next year's edition of this book will either feature a separate chapter on the United Kingdom or continue in its current format. Uncertainty arising from Brexit remains possibly the biggest threat to trade in the region, with English bookmaker Paddy Power putting the odds at 2/1 that Brexit will not occur before 2020 and at 7/1 that a second Brexit referendum will be held before the end of 2019.

In the area of TDI, the coming year is expected to be equally interesting, albeit slightly more predictable: the outcome of the steel safeguard review will be eagerly awaited by many economic operators in the EU, with the outcome most likely also having an impact on steel safeguard investigations in other jurisdictions. Of further interest will be the definitive determination reached in the anti-subsidy investigation on GFF imports from China and Egypt (part of this investigation includes novel claims concerning alleged subsidies made by Chinese state-owned banks in a free trade zone in Egypt pursuant to an arrangement between the two governments). The entry into force of the Regulation (EU) 2019/113196 (known as the EEZ regulation) and the likely initiation of a number of Article 5 investigations fully clothed in the new MTDI model should provide for an equally interesting change. To ensure that SMEs are not left behind throughout this process, the Commission's latest annual report notes that it seeks to assist SMEs' participation in TDI investigations (within the EU and in third countries), and that part of that process is to raise awareness of the trade investigation process among such companies in general.97

On the legislative front, things are expected to remain quiet – after all, last year's major overhaul of the legislative landscape in TDI requires trial and implementation before any further rule changes are set to see the light of day. That said, commentators are already setting their sights on Germany's turn for the Council's rotating presidency in July 2020 to give fresh impetus to an aging catalogue of trade policy measures. That is so particularly in light of Peter Altmaier's policy paper on Germany's National Industrial Strategy 2030, which advocates an aggressive industrial policy approach towards non-EU Member States, particularly in the area of intellectual property and public procurement, and would open the door to possible 'EU instruments that penalize forced technology transfers and state aid by non-EU governments'.98 In what form these instruments would be presented remains open.


Footnotes

1 Nicolaj Kuplewatzky is a member of the Legal Service of the European Commission and Nia Bagaturiya is an associate at VVGB Advocaten.

2 McKinsey Global Institute, 'Globalization in Transition: the Future of Trade and Value Chains', January 2019, available at: www.mckinsey.com/~/media/mckinsey/featured%20insights/innovation/globalization%20in%20transition%20the%20future%20of%20trade%20and%20value%20chains/mgi-globalization%20in%20transition-the-future-of-trade-and-value-chains-full-report.ashx (last accessed 24 June 2019), page 93.

3 World Government Summit, Navigating the New Realities of Global Trade, December 2017, available: www.mckinsey.com/~/media/McKinsey/Industries/Public%20Sector/Our%20Insights/Navigating%20the%20new%20realities%20of%20global%20trade/Navigating-the-new-realities-of-global-trade.ashx (last accessed 24 June 2019), page 5.

4 Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (codification), OJ L 176, 30 June 2016, p. 21.

5 Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (codification), OJ L 176, 30 June 2016, p. 55.

6 Regulation (EU) 2017/2321 of the European Parliament and of the Council of 12 December 2017 amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, OJ L 338, 19 December 2017, p. 1.

7 Regulation (EU) 2018/825 of the European Parliament and of the Council of 30 May 2018 amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union, OJ L 143, 7 June 2018, p.1.

8 Regulation (EC) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (codification), OJ L 83, 27 March 2015, p.16.

9 Regulation (EC) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (recast), OJ L 123, 19 May 2015, p. 33.

10 37th Annual Report from the Commission to the Council and the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018 (2019), p.12.

11 Commission Staff Working Document accompanying the document the 37th Annual Report from the Commission to the Council and the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018, p. 8.

12 See the WTO's Integrated Trade Intelligence Portal (I-TIP Goods) and limit the direct query search accordingly: http://i-tip.wto.org/goods/Forms/TableView.aspx (last accessed 14 June 2019).

13 See p. 7 of Commission Staff Working Document accompanying 37th Annual Report, n 3.

14 See the Commission's press release of 16 March 2016, 'Steel Industry: Commission takes action to preserve sustainable jobs and growth in Europe': http://europa.eu/rapid/press-release_IP-16-804_en.htm (last accessed 14 June 2019).

15 Notice of initiation of a safeguard investigation concerning imports of steel products, OJ C 111, 26 March 2018, p. 29.

16 Commission Implementing Regulation (EU) 2019/159 of 31 January 2019 imposing definitive safeguard measures against imports of certain steel products, OJ L 31, 1 February 2019, p. 27.

17 Until 30 June 2021.

18 See Article 5 of Regulation (EU) 2019/159, n 8.

19 Notice of initiation concerning the review of the safeguard measures applicable to imports of certain steel products, OJ C 169, 17 May 2019, p. 9.

20 id.

21 ibid, section 3.A.

22 ibid, section 3.B.

23 ibid, Section 3.C.

24 ibid, Section 3.D.

25 ibid, Section 3.E.

26 Notice concerning the potential combined effects of anti-dumping or anti-subsidy measures with the safeguard measures on certain steel products, OJ C 146, 26 April 2019, p. 5.

27 Costa Rica (Steel Concrete Rebar safeguard investigation terminated), Thailand (pre-existing safeguard measures concerning Hot-Rolled Steel Flat Products expired without renewal), Philippines (pre-existing safeguard measures in place against Steel Angle Bars expired without renewal), Indonesia (pre-existing safeguard measures on Flat-Rolled Product of Iron or Non-Alloy Steel terminated), Turkey (safeguard investigation into Iron and Steel terminated with no measures imposed) and Canada (provisional safeguard measures terminated for every kind of steel except two products). See also Gulf Cooperation Council (anti-dumping investigation into Chinese seamless pipes and tubes terminated).

28 See S&P Global Platts, 'ArcelorMittal to extend steel output cuts to France, Germany', available at: http://eurometal.net/arcelormittal-to-extend-steel-output-cuts-to-france-germany/ (last accessed 24 June 2019).

29 See Notice of initiation of an anti-subsidy proceeding concerning imports of biodiesel originating in Argentina and Indonesia, OJ C 342, 10 November 2012, p.12 and Notice of initiation of an anti-dumping proceeding concerning imports of biodiesel originating in Argentina and Indonesia, OJ C 260, 29 August 2012, p. 8.

30 Commission Regulation No 1198/2013 of 25 November 2013 terminating the anti-subsidy proceeding concerning imports of biodiesel originating in Argentina and Indonesia and repealing Regulation (EU) No. 330/2013 making such imports subject to registration, OJ L 315, 26 November 2013, p. 67.

31 Council Implementing Regulation No 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, OJ L 315, 26 November 2013, p. 2.

32 Panel Report, European Union – Anti-Dumping Measures on Biodiesel from Indonesia, WT/DS480/R, adopted on 25 January 2018, Panel Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/R, adopted on 29 March 2016, and Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R, adopted on 6 October 2016.

33 On 15 September 2016, the General Court of the European Union delivered judgments in cases T-80/14, T-111/14 to T-121/14 and T-139/14 annulling Articles 1 and 2 of Council Implementing Regulation (EU) No. 1194/2013 of 19 November 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia to the extent that they apply to the applicants in those cases. On appeal, those cases were withdrawn by the Council and, by order of 16 February 2018, removed from the register (aee Joined Cases C-602/16 P and C-607/16 P to C-609/16 P; EU:C:2018:150; C-603/16 P EU:C:2018:153; Case C-604/16 P, EU:C:2018:154; C-606/16 P, EU:C:2018:156), before an expiry review saw the measures terminated on 18 October 2018. (Commission Implementing Regulation 2018/1570 of 18 October 2018 terminating the proceedings concerning imports of biodiesel originating in Argentina and Indonesia and repealing Implementing Regulation (EU) No. 1194/2013, OJ L 262, 19 October 2018, p. 40.)

34 Commission Implementing Regulation 2019/244 of 11 February 2019 imposing a definitive countervailing duty on imports of biodiesel originating in Argentina, OJ L 40, 12 February 2019, p. 1.

35 Commission Implementing Decision 2019/245 of 11 February 2019 accepting undertaking offers following the imposition of definitive countervailing duties on imports of biodiesel originating in Argentina, , OJ L 40, 12 February 2019, p. 71.

36 Notice of initiation of an anti-subsidy proceeding concerning imports of biodiesel originating in Indonesia, OJ C 439, 6 December 2018, p. 16.

37 Notice of initiation of an anti-subsidy proceeding concerning imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China and Egypt, OJ C 167, 16 May 2019, p. 11.

38 Notice of initiation of an anti-dumping proceeding concerning imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China and Egypt, OJ C 68, 21 February 2019,
p. 29.

39 id.

40 id.

41 Commission Implementing Regulation 2019/688 of 2 May 2019 imposing a definitive countervailing duty on imports of certain organic coated steel products originating in the People's Republic of China following an expiry review pursuant to Article 18 of the Regulation (EU) 2016/1037 of the European Parliament and of the Council, OJ L 116, 3 May 2019, p. 39 and Commission Implementing Regulation 2019/687 of 2 May 2019 imposing a definitive anti-dumping duty on imports of certain organic coated steel products originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council, OJ L 116, 3 May 2019, p. 5.

42 Notice of initiation of an anti-dumping proceeding concerning imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America, OJ C 284, 13 August 2018, p. 9.

43 Commission Implementing Regulation 2019/576 of 10 April 2019 imposing a provisional anti-dumping duty on imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America, OJ L 100, 11 April 2019, p. 7.

44 Notice of initiation of an anti-dumping proceeding concerning imports of hot-rolled steel sheet piles originating in the People's Republic of China, OJ C 177, 24 May 2018, p. 6, as terminated by Commission Implementing Decision (EU) 2019/1146 of 4 July 2019 terminating the anti-dumping proceeding concerning imports of hot-rolled steel sheet piles originating in the People's Republic of China, OJ L 181, 5 July 2019, p. 89.

45 Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank, Steel: Preserving sustainable jobs and growth in Europe, COM(2016) 155 final, at page 14.

46 See 'Report on EU trade defence – effective protection against unfair trade' of 28 March 2019: http://trade.ec.europa.eu/doclib/press/index.cfm?id=2000&title=Report-on-EU-trade-defence-%E2%80%93-effective-protection-against-unfair-trade (last accessed 14 June 2019).

47 Notice concerning the potential combined effects of anti-dumping or anti-subsidy measures with the safeguard measures on certain steel products, OJ C146, 26 April 2019, p. 5.

48 See Commission Staff Working Document of 20 December 2017 on 'Significant distortions in the economy of the People's Republic of China for the purposes of trade defence investigations': http://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156474.pdf (last accessed 14 June 2019).

49 See the Commission's contract notice of 26 April 2018, 'Report on significant distortions in the economy of the Russian Federation for the purpose of trade defence investigations 2018/S 081-180398': http://trade.ec.europa.eu/doclib/docs/2018/april/tradoc_156833.pdf (last accessed 14 June 2019).

50 Commission Implementing Regulation (EU) 2019/67 of 16 January 2019 imposing safeguard measures with regard to imports of indica rice originating in Cambodia and Myanmar, OJ L 15, 17 January 2019, p. 5.

51 Regulation (EU) No. 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No. 732/2008, OJ L 303, 31 October 2012, p. 1.

52 id, recital 79 et seq.

53 Regulation (EU) 2019/712 of the European Parliament and of the Council of 17 April 2019 on safeguarding competition in air transport, and repealing Regulation (EC) No 868/2004, OJ L 123, 10 May 2019, p. 4.

54 Regulation (EC) No. 868/2004 of the European Parliament and of the Council of 21 April 2004 concerning protection against subsidisation and unfair pricing practices causing injury to Community air carriers in the supply of air services from countries not members of the European Community, OJ L 162, 30 April 2004, p. 1.

55 EU Parliament, Legislative Train Schedule, EU-Mercosur Association Agreement, available at:
www.europarl.europa.eu/legislative-train/theme-a-balanced-and-progressive-trade-policy-to-harness-
globalisation/file-eu-mercosur-association-agreement (last accessed 14 July 2019).

56 See the Commission's press release of 31 January 2019, 'EU-Japan trade agreement enters into force': http://europa.eu/rapid/press-release_IP-19-785_en.htm (last accessed 14 June 2019).

57 The EU and Singapore signed the trade and investment agreements on 19 October 2018.

58 Opinion 2/15 of the Court of Justice of 16 May 2017, ECLI:EU:C:2017:376.

59 See the Commission's press release of 13 February 2019, 'Agreement with Singapore set to give a boost to EU-Asia trade': http://trade.ec.europa.eu/doclib/press/index.cfm?id=1980 (last accessed 14 June 2019).

60 See the draft Trade Bill: https://publications.parliament.uk/pa/bills/cbill/2017-2019/0122/18122.pdf (last accessed 14 June 2019).

61 See Taxation (Cross-border Trade) Act 2018: www.legislation.gov.uk/ukpga/2018/22/contents/enacted/data.htm (last accessed 14 June 2019).

63 The Act seeks to replace the current EU Union Customs Code.

64 See Section 13 and Schedules 4 and 5 of the TCBTA.

65 The contingency provisions are envisaged by Section 56 of the TCBTA.

66 See press release of 6 March 2019, 'UK's new trade remedies system comes into force': www.gov.uk/government/news/uks-new-trade-remedies-system-comes-into-force (last accessed 14 June 2019).

67 See guidance of 15 March 2019, 'Trade remedies: investigating dumped or subsidised goods' www.gov.uk/guidance/trade-remedies-investigating-dumped-or-subsidised-goods (last accessed 14 June 2019).

68 At the time of writing there are 133 measures in force by the EU. See the WTO's Integrated Trade Intelligence Portal (I-TIP Goods) and limit the direct query search accordingly: http://i-tip.wto.org/goods/Forms/TableView.aspx (last accessed 14 June 2019).

69 37th Annual Report from the Commission to the Council and the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018 (2019), p.45.

70 Judgment of 10 April 2019, Case T-301/16 Jindal Saw and Jindal Saw Italia v. Commission, EU:T:2019:234.

71 ibid, paragraph 45.

72 ibid, paragraph 49.

73 ibid, paragraph 51.

74 ibid, paragraph 49.

75 ibid, paragraph 51.

76 Regulation (EC) No. 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents, OJ L 145, 31 May 2001, p. 43.

77 See, to that effect, the dialogue procedure established in Article 108 TFEU between the Commission and the Member States, as discussed in Case C-139/07 P Commission v. Technische Glaswerke Ilmenau EU:C:2010:376, paragraphs 57 to 59.

78 Judgment of 28 June 2019, Case T-741/16 Changmao Biochemical Engineering v. Commission, EU:T:2019:454, paragraphs 64, 73, 75.

79 Judgment of 22 October 1987, Case C-314/85 Foto-Frost v. Hauptzollamt Lübeck-Ost, EU:C:1987:452, paragraph 15.

80 Judgment of 3 July 2019, Case C-644/17 Eurobolt, EU:C:2019:955, paragraph 30.

81 Order of 13 July 1990, Zwartveld e.a., C-2/88 IMM, EU:C:1990:315, paragraph 10.

82 Judgment of 16 July 2015, Case C-21/14 P Rusal Armenal v. Commission, EU:C:2015:494, paragraph 59.

83 ibid, paragraph 50.

84 ibid, paragraph 48.

85 Basic Anti-dumping Regulation, Article 4(1) with reference to Article 5(4).

86 Judgment of 15 November 2018, Case C-592/17 Baby Dan, EU:C:2018:913, paragraph 74.

87 ibid, paragraph 75.

88 Judgment of 8 September 2015, Case C-511/13 P Philips Lighting Poland and Philips Lighting v. Council, EU:C:2015:533, paragraph 69.

89 Appellate Body Report, EC – Fasteners, WT/DS/397/AB/R, adopted on 28 July 2011, paragraph 418.

90 Judgment of 20 March 2019, Case T-310/13 Foshan Lihua Ceramic, EU:T:2019:170, paragraph 65.

91 ibid.

92 See World Trade Organization, Communication from the Panel, European Union – Measures related to Price Comparison Methodologies, WT/DS516/13, 17 June 2019 (19-098), page 1.

93 Bloomberg, B Baschuk, 'China Loses Market-Economy Trade Case in Win for EU and U.S., Sources Say', 18 April 2019, available at: www.bloomberg.com/news/articles/2019-04-18/china-is-said-to-lose-market-
economy-trade-case-in-eu-u-s-win (last accessed 16 July 2019).

94 Panel Report, European Union and its Member States – Certain Measures Relating to the Energy Sector (WT/DS476/R), circulated on 10 August 2018, paragraph 7.730.

95 Regulation (EU) No 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure and repealing Decision No. 1364/2006/EC and amending Regulations (EC) No. 713/2009, (EC) No. 714/2009 and (EC) No. 715/2009, OJ L 115, 25 April 2013, p. 39.

96 Commission Implementing Regulation (EU) 2019/1131 of 2 July 2019 establishing a customs tool in order to implement Article 14a of Regulation (EU) 2016/1036 of the European Parliament and of the Council and Article 24a of Regulation (EU) 2016/1037 of the European Parliament and of the Council, OJ L 179, 3 July 2019, p. 12.

97 See p. 43 of Commission Staff Working Document accompanying 37th Annual Report, n 3.

98 Peterson Institute for International Economics, Policy Brief 19-4, Jeroem Zettelmeyer, 'The Return of Economic Nationalism in Germany', available at: https://piie.com/system/files/documents/pb19-4.pdf (last accessed 23 June 2019), page 2.