28 Feb 2019
UK Preparing Independent System Ahead of Brexit, to Maintain Anti-dumping and Other Trade Remedy Measures
On 25 February 2019, the International Trade Secretary of the UK published a notice setting out the information about the trade remedies that will continue, and those that will cease, to apply as the UK leaves the European Union and takes control of its own independent trade policy. The notice includes details on the criteria for maintaining or terminating the measures, and relevant information for businesses and traders outside the EU and UK. As trade remedies include anti-dumping and anti-subsidy measures, those targeting goods from the Mainland China are also in the spotlight.
The UK’s Department for International Trade (the “DIT”) is working towards establishing a trade remedies system ahead of Brexit. It is gathering evidence to identify which UK businesses produce goods currently subject to EU trade remedies – anti-dumping, safeguards and anti-subsidy measures – in the UK. In a “no-deal” scenario, the earliest point at which the UK could begin to operate its own independent trade policy will be 29 March 2019.
The DIT seeks to identify which measures should be maintained by the UK. This is being done so as to provide certainty to UK manufacturing industries and avoid exposing them to any injury from known unfair trade practices. The DIT has queried whether companies are producing goods subject to current EU trade remedy measures in the UK. Companies were also requested to state whether they support, are neutral to, or oppose the maintaining of such measures when the UK begins to operate its own independent trade policy.
The DIT has assessed whether the measures should be maintained, based on the following criteria:
1. If the DIT has received an application to maintain measures from UK businesses which produce products subject to trade remedy measures in the UK;
2. If the application is supported by UK businesses which produce a sufficient proportion of those products as required by the WTO Agreements; and
3. If the market share of the UK-based producers of such products is at least 1%.
The decision to maintain existing measures has been based on whether those measures affect UK industry. If an application was not received for an existing EU trade remedy measure to be maintained, or if a measure did not meet the above criteria, it will be terminated. The DIT will further assess whether the measures that will be maintained are in the overall economic interest of the UK. These measures – referred to as “transitioned measures” by the UK – will be maintained at the same level previously set by the European Commission until the Trade Remedies Authority of the UK (the “TRA”) completes a full review based on UK-specific market data. Such reviews will help in deciding whether transitioned measures should continue and, if so, at what level. The reviews will also help in ensuring that any future measures fully reflect the UK market situation.
Although the call for evidence was initially directed to UK businesses which produce like products currently subject to EU measures and ongoing investigations, it also asked for specific information from other businesses with an interest – within the UK and internationally – including downstream consumer and user industries.
In the event of a “deal” scenario – i.e., if the UK ratifies the Withdrawal Agreement – and during the implementation period, which is a transition period of 21 months from 29 March 2019 to 31 December 2020, EU trade remedy rules and regulations will continue to apply. For any new measures which the EU puts in place during such period, the UK will approach any national producers of the products concerned, to understand whether there is an interest in such measures being maintained. Companies are being advised that UK industry should continue to approach the European Commission for the purposes of initiating new investigations, until further notice.
In the event that UK production and market share of the products covered by the measures vary during the so-called implementation period (in a “deal” scenario), then, towards the end of such period, the UK will review its decisions about which measures will be maintained. This would, in turn, be based on updated evidence, in discussion with relevant stakeholders.
The DIT’s final findings reveal that 43 of the existing EU measures meet the relevant criteria (mentioned above). It is intended that these will, therefore, be maintained and reviewed by the UK’s TRA which will, in turn, recommend the appropriate level that the measure should take for the UK market. On the other hand, 66 existing measures did not meet the criteria and will be terminated on the day the UK begins operating its own independent trade policy. Please refer to the DIT’s notice (under “Final findings – listed by name of measure”) for the specific measures that will be maintained and those that will be terminated. Several target products imported from the Mainland China.
Once the UK begins operating its own independent trade policy, it will review additional relevant information specific to each measure such as the duty level, the product scope and the period for which the measures will apply. The UK will continue to monitor any new trade remedy measures introduced before the UK begins operating its own independent trade policy.