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The week ahead in EU trade: 27 February – 3 March 2017

 

The reform and modernisation of the European Union’s trade defence instruments will be central in discussions among member states and in the European Parliament this week.

 

Informal trade Council in Malta: TDI and joint response to Trump

 

On Thursday and Friday (2-3 March), member states will examine the Commission’s proposal on a new antidumping methodology during an informal trade minister’s meeting. The Maltese EU presidency aims for a joint member state position in the spring. At this stage, Malta is “looking for political feedback and impetus from Ministers”.

The politically highly charged decision by the Commission on the extension of solar panel duties on imports from China (our latest article on this topic is here) will be taken after the Council meeting.

The European Union is faced with the threat of a legal dispute with China at the World Trade Organisation on its continued use of the so-called analogue country methodology in trade defence cases against Chinese imports. Consultations are currently ongoing, a panel should be established in the next weeks.

Ministers will also exchange views on the future of the EU’s trade policy and on the effects of Donald Trump’s vision on the multilateral trading system. Malta intends to press ministers to consider scenarios for a joint European response.

Member states will also discuss the EU’s proposed multilateral investment court: the Commission will update the ministers on progress made in gaining support of third countries for its project.

Member states will also host a dinner with WTO chief Roberto Azevêdo and the chairman of the European Parliament’s  trade committee Bernd Lange. On the menu: the 11th WTO ministerial conference in Buenos Aires to be held in December. The Maltese Presidency wishes for the conference to address new issues not comprised in the Doha Development Agenda, such as a longer term vision for the WTO.

 

Trade defence instruments debated at the European Parliament

 

The Council meeting will be preceded by a few intense trade days in parliament.

Trade defence will also be on the agenda of the INTA committee, which is meeting on Monday and Tuesday (27 & 28 February). The two European Commission proposals to reform the EU’s trade defence instruments will be debated on Tuesday. On the same day, a vote will take place to nominate the new parliament team for the inter-institutional ‘trilogue’ negotiations on the 2013 trade defence regulation proposal. The new team expects to initiate trilogue talks on 21 March 2017.

MEPs will adopt an opinion to feed into a report on sustainability in garment trade and supply chains from the committee on development. The draft opinion argues that sustainability will be achieved inter alia by integrating traceability and transparency, and recommends that special attention be paid to small and medium sized enterprises.

 

Turkey customs union

 

INTA will also examine a report on trade talks to upgrade the EU customs union with Turkey. The discussion comes at a particularly tricky time, with political tensions between the two sides running high as President Erdogan tightens his grip on the Turkish political system. This context will probably taint the debate and complicate the procedure. European Parliament sources told Borderlex that the INTA vote on the report is scheduled for 21 March but that it could be postponed by one month.

Last December, the Commission had asked the Council for a negotiating mandate. The European Parliament wants a say in setting the mandate too. In a letter to the member states, Bernd Lange has asked that his committee’s recommendations on Turkey should feed into the mandate text, say Parliament sources.

 

Also on the Parliament’s agenda: CE-marked fertilisers, ASEAN FTAs, wildlife trafficking

 

Phosphate rock is a key element for fertiliser producers, but it also contains a highly toxic heavy metal, cadmium. A Commission proposal intends to reduce the cadmium limit in CE-marked phosphate fertilisers. But phosphorus is a ‘critical raw material’ for the EU, which is highly dependent on imports of phosphate rocks. Limiting cadmium content means de facto reducing the range of available imports. The EU fertiliser industry will have to turn to substitutes or import higher quality phosphate rocks, which are mainly available from Russia and Morocco.

During this Monday’s debate MEPs will say whether they believe the EU proposal is sensible in that it gives the EU fertiliser industry enough time and alternative, affordable options to adjust to these revised cadmium limits. Rapporteur MEP Jarosław Wałęsa’s (EPP, Poland) opinion show that he disagrees.

On the same day, the INTA meeting will also see an exchange of views with the Commission on the ASEAN free trade agreements, in particular Malaysia.

 

Mini plenary

 

During a “mini” European Parliament plenary session held on Wednesday and Thursday MEPs will vote on a draft own-initiative report on trade and wildlife trafficking.

 

Meanwhile in Brexit Britain

 

The House of Lords will be looking to add amendments to the government’s two-line ‘Brexit bill’. The Lords are seeking to guarantee the right of EU citizens already living in the EU and to secure a veto over final deal clinched by the government with the EU, and possibly add a few other amendments, something the House of Commons had failed to do. The government intends to notify the EU of its intention to withdraw from the bloc in early March. Should the House of Lords initiate a lengthy political battle and several backs and forths with the Commons, the notification date could be delayed. The government is fighting hard against the prospect.