he EU’s economy thrives on free trade, but sometimes it can be undermined by countries imposing unfair tariffs on its products or selling their goods at abnormally low prices. However, the EU can defend itself in variety of ways. Read on to find out how and to discover examples of recent trade conflicts.
Calling in arbitration - the role of the WTO
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.
Since the WTO’s creation in 1995, the EU has been involved in 181 cases: 97 as a complainant and 84 as a defendant.
Tackling unfairly cheap imports
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.
The EU can respond by imposing anti-dumping duties. Last year MEPs voted in favour of updating the rules that regulate when and how those duties can be imposed. These new rules will be complemented by additional measures against unfair imports are expected to be voted in the May plenary.
From steel to olives - current disputes
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 will debate the EU’s response with EU trade Commissioner Cecilia Malmström during the plenary session in Strasbourg on 14 March.
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. A representative from the European Commission will be questioned about it on Wednesday 14 March.
Going bananas - examples of previous trade conflicts
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.
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