EU Trade Defence Instruments and Free Trade Agreements: Is Past Experience an Indication for the Future? Implications for Brexit?

Abstract

This article considers the question of whether the European Union’s regional trade agreements (RTA, free trade areas or customs unions) can provide for limitations to the use of anti-dumping and countervailing measures (TDIs). It finds, first, that the selective application of such measures is possible vis-a-vis WTO Members, provided that the RTA addresses the underlying causes for the difficulties created by dumping or subsidisation. Second, the practice of the European Union has been to rarely agree on the elimination of anti-dumping and countervailing measures. Such elimination required that market access, competition and the State aid (subsidisation) rules were fully aligned with those applicable in the Union and an effective independent enforcement mechanism was in place. Anti-dumping and countervailing measures have been subjected to certain (mainly procedural) restrictions, if market access, competition and State aid rules were largely harmonised (but not always fully aligned) and if there was some (but not sufficiently independent and effective) enforcement mechanism. It concludes that, to the extent history is a guide, there is a significant risk that once the UK is no longer a Member State, TDIs will reappear in the bilateral relationship unless (1) the full substantive alignment of the rules is maintained and (2) an enforcement mechanism for such rules can be found, which will be considered sufficiently “effective” and independent from the UK.