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First Transition Review Investigation Launched by the UK

On 10 February 2020, the UK’s Secretary of State for International Trade launched the first transition review investigation conducted by the UK as part of its post-Brexit trade defence policy. The investigation seeks to determine if the current application of trade remedies by the EU is necessary and relevant for the UK market.

Brexit is now a reality. However, Hong Kong traders will be aware that a transition period has been set down during which the UK will still be a member of the EU Single Market and Customs Union.

Trade defence investigations (anti-dumping, anti-subsidies and safeguards) will continue to be conducted by the European Commission on behalf of the UK and all existing EU trade remedy measures will continue to be applied at the border of the UK during the transition period.

The following is a recap of the main trade defence investigations that may be conducted by the EU (and eventually by the UK, i.e., after the transition period). Hong Kong traders might recall that a product is considered to be dumped, – i.e. introduced into the commerce of another country at less than its normal value – if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

In addition, the concept of subsidies encompasses a contribution – of a financial nature – by a foreign government or a public body that confers a benefit and which is specific to an enterprise, industry or a group of enterprises or industries. If the aforementioned conditions are met and if the imports of the subsidized product are having a negative effect on the domestic industry as well as being in the importing jurisdiction’s economic interest to impose a measure, the importing jurisdiction could apply anti-subsidy measures (commonly also known as countervailing measures).  

A safeguard measure, which is yet another trade defence instrument, is an additional duty that can be applied in the event that the importing jurisdiction’s domestic industry is negatively affected by an unforeseen, sharp and sudden increase in imports.

Once the transition period is over, the UK will be eligible to apply all these trade defence instruments in respect of imports into its territory, as long as the respective conditions for their application are met.

The UK has announced that it will continue to monitor any new trade defence measures introduced by the EU before the UK begins operating its own independent trade policy. Where there is a known UK producer interested in any new measure, the relevant UK authorities will reach out to the interested parties to assess whether the measure should be transitioned or terminated at the end of the transition period.

Furthermore, the UK has stressed that all anti-dumping, anti-subsidy and safeguard measures that the UK keeps will undergo a UK-wide transition review led by the Trade Remedies Investigations Directorate (“TRID”). Transition reviews will assess whether the current measures are appropriate for the UK market and whether they should be varied, changed or terminated. Further information can be found in the TRID dumping, subsidisation and safeguarding investigations guidance.

By means of the Notice of Initiation Transition Review No. TD0001, the UK initiated the transition review mentioned in the introductory paragraph above, in which it will consider: (i) whether the application of the anti-dumping amount is necessary or sufficient to offset dumping of the relevant products on the UK market; and (ii) whether injury to the UK industry in the relevant product sector would occur if the anti-dumping amounts were no longer applied to such products. The products subject to review are certain steel products, i.e. welded tubes and pipes, of iron or non-alloy steel, of circular cross-section and of an external diameter not exceeding 168.3 mm, excluding line pipe of a kind used for oil or gas pipelines, casing and tubing of a kind used in drilling for oil or gas, precision tubes and tubes and pipes with attached fittings suitable for conducting gases or liquids for use in civil aircraft, originating in Belarus, the Russian Federation and mainland China.

Any overseas exporter of the products subject to the review and any trade or business association of overseas producers or overseas exporters of the products subject to the review, amongst others, may register as interested parties in the review proceeding. Moreover, third parties may register as contributors that are other than interested parties who have notified the UK that they would like to participate in the review.

Anyone interested in taking part in the review is encouraged to contact the TRID by 25 February 2020, registering their interest through the Trade Remedies Service. Once registered, interested parties and contributors can submit comments on any issues relevant to the review through the Trade Remedies Service.

The publication of this notice of initiation by the UK stands as a landmark in the shape-up of its own trade defence policy, which is expected to be enacted on 1 January 2021.

Content provided by Picture: HKTDC Research
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