Europe's retreading industry has been hard hit by imports of low-cost new truck tyres
Imports of truck tyres into Europe have significantly increased over the past five years and have devoured market share formerly held by local players, particularly European retreaders. Detailed analyses on this phenomenon can be found here and here.
One measure strongly advocated by the European retreading association Bipaver is anti-dumping duties for imports from China, the single largest producer of truck tyres shipped to Europe. Its push for duties hasn’t yet gain traction as, in contrast with the US and a number of other countries, the European Union has often shown itself reluctant to introduce restrictions to free trade. However the association now has reason to be optimistic – last week, the European Commission proposed changes to the EU’s anti-dumping and anti-subsidy legislation.
In a document published on 9 November, the European Commission Directorate-General for Trade wrote that it had “presented a proposal for a new method for calculating dumping on imports from countries where there are significant market distortions, or where the state has a pervasive influence on the economy.” With this proposal, the European Commission hopes to “make sure that Europe has trade defence instruments that are able to deal with current realities – notably overcapacities – in the international trading environment.”
According to the European Commission, the EU needs to “ensure that its trade defence instruments remain effective” in dealing with significant market distortions in certain countries that can lead to industrial overcapacity, and that encourage exporters to dump their products on the EU market. “This causes damage to European industries, which ultimately can result in job losses and factory closures, as has been the case recently in the EU steel sector.”
“Trade is Europe’s best growth lever. But free trade must be fair, and only fair trade can be free,” states Jyrki Katainen, EU Commission vice-president responsible for Jobs, Growth, Investment and Competitiveness. “Today we are presenting a proposal to adapt our trade defence instruments to deal with the new realities of overcapacity and a changing international legal framework. More than 30 million jobs in Europe, including 6 million jobs in SMEs, depend on free and fair trade which remains at the heart of EU strategy for jobs and growth.”
Under current rules, dumping is calculated in normal market circumstances by comparing the export price of a product to the EU with the domestic prices or costs of the product in the exporting country. This approach will be kept and complemented by the new, country-neutral methodology. Several criteria will be considered when determining distortions, such as state policies and influence, the widespread presence of state-owned enterprises, discrimination in favour of domestic companies and the independence of the financial sector. The Commission will draft specific reports for countries or sectors where it will identify distortions.