The EU seeks to
make the most out of globalisation
and its economy thrives because of free trade. However, sometimes it
can be undermined by countries imposing unfair tariffs on its products
or selling their goods at abnormally low prices. There is also the risk
of conflicts over trade escalating into a trade war, which is when both
parties keep on increasing tariffs or create other barriers, which can
make products more expensive and complicate things for companies. The EU
can use a variety of trade defence instruments in these situations.
Read on to find out how and to discover examples of recent trade
conflicts.
The EU and its member states are among the 164 members of the
World Trade Organisation
(WTO), which exists to guarantee a rule-based international trading
system. It has the power to rule on trade disputes and enforce
decisions. In the past this has helped to prevent trade disputes
escalating.
On the basis of pre-defined rules, any WTO member can lodge a complaint over breaches of WTO rules and seek reparations.
Being a member of the WTO does not stop the EU from drawing up
legislation to counter products that have dumped for abnormally low
prices in Europe, harming local producers. This could be because of a
lack of competition in the country where the product was made, heavy
state interference in the production process or even because the company
in question disregarded international labour and environmental
standards.
Since the WTO’s creation in 1995, the
EU has been involved in 181 cases: 97 as a complainant and 84 as a defendant.
The EU can respond by imposing
anti-dumping duties
as a trade defence instrument. In 2017 MEPs voted in favour of updating
the rules that regulate when and how those duties can be imposed. MEPs
approved additional
rules allowing the EU to impose higher tariffs on dumped or subsidised imports in May 2018.
US President Donald Trump recently announced he was going to impose additional import duties on steel and aluminium imports.
MEPs called the move unacceptable
and incompatible with WTO rules. MEPs debated the EU’s response with EU
trade Commissioner Cecilia Malmström during the plenary session in
Strasbourg on 14 March.
Check out the press release on the debate.
MEPs are also concerned about US customs duties on
Spanish olives,
imposed in January after the US deemed they were being imported at
below market price. Cecilia Malmström, the European commissioner for
trade, was questioned about it on
Wednesday 14 March.
The US and the EU have clashed over trade before, for example over
duties on bananas, which made it easier for some countries in Africa,
Caribbean and the Pacific to export to the EU at the expense of Latin
American countries.
The EU has also been at odds with the US and
Canada over beef treated with hormones, which it considered a potential
health hazard. This was only resolved in 2012 when the EU agreed to
increase imports of hormone-free beef from the two countries.
Read more: Trade wars: what are the EU's trade defence instruments? | News | European Parli
