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Tuesday, 09 July 2013

EU trade defence measures contradict climate policy

There is a contradiction between the European Union’s (EU) Trade Defence Instruments (TDI) policy and its climate policy, a new report from the Swedish National Board of Trade – the Swedish governmental agency responsible for issues relating to foreign trade and trade policy – indicates.

This appears to be a consequence of a new trend for the EU’s TDI policy to target renewable energy sources, the report, entitled “Targeting the Environment”, shows.

The research has found that in recent years, the TDIs have increasingly been directed towards renewable energy sources, in particular biofuels (biodiesel and bioethanol) and solar panels. The TDI investigations on renewable energy sources affect import values of about EUR 14 billion, representing almost 75% of the import value all of the TDI measures currently in force.

There are three kinds of TDIs: (1) anti-dumping measures, targeting dumped imports; (2) anti-subsidy measures, targeting subsidized imports; and (3) safeguards, targeting sudden increases in imports. Anti-dumping measures and anti-subsidy measures are the most frequently used TDI measures in the EU.
An example of such measures is the 2009 anti-dumping and anti-subsidy measures which were imposed on imports of biodiesel from the US. In 2011, the measures were extended to encompass imports of biodiesel from Canada, in order to avoid alleged circumvention.
The measures may only be imposed if it is not against the interests of the EU as a whole to raise the tariffs, i.e. the ‘Union interest test’.
Environmental concerns are not currently considered in the evaluation of interests that may be harmed by the imposition of TDI measures.

The problem is that the increase in TDIs towards renewable energy could lead to a consequent escalation in the price of imported renewable energy sources, affecting the availability of affordable renewable energy in the EU market to the detriment of the consumers and the environment, the report says. This would contradict EU’s climate policy that recognizes the need to empower the consumers and to increase competition in the EU’s renewable energy market, in order to raise the share of renewable energy sources to 20% by 2020.

From this perspective, it would be recommended that the EU’s trade policy, in particular the EU’s TDI policy, take the EU’s climate policy into account, the research shows. Environmental effects should be considered as part of the ‘Union interest test’ before imposing TDI measures, as for the environmental benefits it does not matter where the renewable energy is produced, the report concludes.

Source: Swedish National Board of Trade