Background note - FOREIGN AFFAIRS (TRADE) Council meeting

Council of the European Union
Brussels, 19 November 2014
Friday 21 November in Brussels
The Council will discuss a proposed regulation updating the EU's trade defence instruments. It will
also discuss a proposal aimed at improving the conditions under which EU businesses can
compete for public procurement contracts in third countries.
The Council will take stock of negotiations on a transatlantic trade and investment partnership with
the United States.
It is expected to adopt conclusions on the priorities of the EU’s trade agenda.
The Council will take stock of free trade negotiations with Japan and Vietnam, and of post-Bali
negotiations under the WTO's Doha Development Agenda.
Over lunch, ministers will hold an exchange of views with Bernd Lange, the chairman of the
European Parliament's committee on international trade.
The Council meeting will start at 10.00. A presidency press conference will be held at the end of
the meeting (lunchtime).
Press conferences and public events by video streaming:
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Protection against dumped and subsidised imports
The Council will debate a draft regulation aimed at updating EU instruments for tackling unfair
competition from dumped and subsidised imports.
The EU's trade defence instruments have remained largely unchanged since 1995. Anti-dumping
and anti-subsidy duties are used to shield EU producers from damage caused by foreign
companies' unfair trade practices.
The proposal seeks to make the EU's trade defence instruments work better for all EU
stakeholders – producers, importers and users (doc. 8495/13).
Specifically, it sets out to:
enhance transparency and predictability as concerns the imposition of provisional antidumping and anti-subsidy measures;
enable importers to be reimbursed duties collected during an expiry review in the event of
trade defence measures not being maintained after five years;
when a threat of retaliation exists, enable investigations to be initiated ex officio, i.e. without
an official request from industry;
in raw material markets, enable higher duties to be imposed on imports from countries that
use unfair subsidies and create structural distortions. In such cases, the EU would deviate
from its "lesser duty rule" whereby duties must not be higher than what is necessary to
prevent injury for an EU industry.
The proposal was presented by the Commission in April 2013 in the light of an evaluation of the
EU's existing trade defence instruments2 and following a public consultation.
According to the Commission, anti-dumping and anti-subsidy measures impact around 0.25% of
EU imports. At the end of 2012, the EU had 102 anti-dumping and 10 anti-subsidy measures in
The regulation requires a qualified majority for adoption by the Council, in agreement with the
European Parliament (article 207(2) of the Treaty on the Functioning of the EU). The Parliament
adopted its position at first reading in April 2014.
Public procurement
The Council will debate a proposal for a regulation aimed at improving the conditions under which
EU businesses can compete for public contracts in third countries.
The proposal seeks to strengthen the EU's position when negotiating the terms of access to public
procurement markets in third countries, whilst clarifying the legal situation of foreign bidders in the
EU (doc. 8257/12).
Public procurement represents a substantial share of world trade, amounting to €1 000 billion per
year according to the Commission. Within the EU, it takes up 19% of GDP.
The Commission considers that while the EU's procurement markets are traditionally very open,
this is not matched to a similar degree by its trading partners. Only a quarter of the world
procurement market is open for international competition. Restrictions affect sectors where the EU
is highly competitive, such as construction, public transport, medical devices, power generation
and pharmaceuticals.
Under the proposal:
the Commission could authorise EU contracting authorities, for contracts above €5 million,
to exclude tenders with a significant foreign element where these are not covered by
international agreements;
in the event of repeated and serious discrimination against EU suppliers, the Commission
could restrict access to EU markets if the third country concerned does not engage in
negotiations to address the problem;
transparency is increased on abnormally low offers in order to stop unfair competition by
third country suppliers on EU markets.
The proposal was presented by the Commission in March 2012 following a public consultation. It
complements a recent reform of public tendering within the EU3, given that EU directives generally
do not cater for part-foreign bids on EU markets.
The regulation requires a qualified majority for adoption by the Council, in agreement with the
European Parliament (article 207 of the Treaty on the Functioning of the EU). The Parliament
agreed its negotiating stance in November 2013.
Doha Development Agenda
The Council will discuss negotiations under the WTO's Doha Development Agenda (DDA)
following a breakthrough reached between India and the United States on food security issues.
This could potentially lead to full implementation of the so-called Bali package, including a trade
facilitation agreement, and pave the way towards concluding the DDA.
Agreement was reached at the WTO's 9th ministerial conference in Bali in December 2013 on a
package of measures covering trade facilitation, development/least developed countries
(preferential rules of origin for least-developed countries, LDCs, operationalization of LDCs
services waiver, duty-free and quota-free market access for LDCs, monitoring mechanism on
special and differential treatment) and agricultural issues (general services, food security, tariff-rate
quota administration, export competition, cotton).
The trade facilitation agreement will be a legally binding multilateral deal and is one of the biggest
reforms of the WTO since its establishment. Its objectives are to speed up customs procedures;
make trade easier, faster and cheaper; provide clarity, efficiency and transparency; reduce
bureaucracy and corruption, and use technological advances. It has provisions on goods in transit,
of importance to landlocked countries seeking to trade through ports in neighbouring countries. It
also involves assistance for developing and least developed countries to update their
infrastructure, train customs officials, or for any other cost associated with implementing the
The text of the trade facilitation agreement was due to be adopted by 31 July 2014, after
finalisation. But despite consultations held by WTO Director-General Roberto Azevêdo at the end
of July, the WTO was not able to adopt the agreement within the agreed deadline. In particular, no
solution was found to the link established by India with implementation of a permanent solution for
food security.
Two candidatures have been submitted as venues for the 10th WTO ministerial conference:
Turkey and Kenya.
Press release 6337/14.
EU-US trade and investment negotiations
The Council will take stock of ongoing negotiations on a comprehensive trade and investment
agreement with the United States, the "transatlantic trade and investment partnership" (TTIP).
It is expected to highlight the potential of an ambitious agreement, and the opportunities it would
provide for households and companies in both the EU and the US. The Council may adopt
Seven negotiating rounds have now been held, the latest in Washington from 29 September to
3 October 2014. It is expected that the TTIP will be made up of three components: market access,
regulatory issues and non-tariff barriers; and rules.
The Commission is leading the negotiations on behalf of the EU and its member states, on the
basis of a mandate agreed by the Council in June 2013. The Council decided in October 2014 to
make public its negotiating directives.
Throughout the negotiation, the Commission is required to keep the Council's Trade Policy
Committee and the European Parliament regularly informed. The final agreement will be concluded
by the Council and the member states after having obtained the 'consent' of the European
In June 2014, the European Council called for the negotiations to be completed, "in a spirit of
mutual an reciprocal benefit and transparency", by 2015.
When negotiations are completed, the TTIP will be the biggest bilateral trade agreement ever
negotiated. According to the Commission, it could add around 0.5% to the EU's annual economic
The EU and the US account together for almost half of global GDP and one-third of total world
trade. The EU is the US's largest trading partner, whilst the US is the EU's second-largest trading
partner. They had 17.6 % and 13.9 % respectively of each other's trade in goods in 2011.
Trade policy
The Council will adopt conclusions on the priorities of the EU's trade agenda.
It is expected to reiterate the EU's determination to promote free, fair and open trade in a spirit of
reciprocity and mutual benefit.
The Council is expected to express the EU's commitment to further strengthening the multilateral
trading system, while continuing to focus on the development of its bilateral trade relations.
It will note that trade in goods, services and investment can make a significant contribution to
promoting sustainable growth and increased investment, and create more and better jobs.
Trade negotiations with Japan and Vietnam
The Council will take stock of ongoing free trade negotiations with Japan and Vietnam. It will be
briefed by the Commission on progress made in the negotiations and on the prospects for
concluding them in 2015.
Negotiations with Japan were launched in March 2013. When the Council in November 2012
approved a mandate for the Commission to negotiate, it included a review clause specifying that
one year after the beginning of the negotiations, the Commission would report on implementation
by Japan of commitments on the elimination of non-tariff barriers (NTBs) and government
The one-year review was completed in October 2014. There was broad agreement that Japan had
formally complied with a significant share of commitments on NTBs.
As regards railway procurement, the Council on 21 October 2014 agreed to the delisting of three
Japanese railway companies under the WTO agreement on government procurement. The
Commission has notified the WTO's GPA committee about the withdrawal of the EU's objections to
the delisting of the companies.
The latest (7th) negotiating round took place in the week of 20 October 2014. The next is
scheduled for the week of 8 December 2014, with further rounds provisionally slated for March and
June 2015. The aim is to conclude the negotiations by the end of 2015 or spring 2016.
Initial tariff and services offers were exchanged in March and July 2014, respectively.
The Council's negotiating directives foresee a free trade agreement providing for the progressive
and reciprocal liberalisation of trade in goods and services and investment, as well as rules on
trade-related issues and the elimination of non-tariff barriers.
Japan is the EU's seventh-largest trading partner while the EU is Japan's third-largest trading
partner, with 3.6 % and 11 % respectively of each other's trade in goods in 2011.
Negotiations with Vietnam were launched in June 2012. The latest negotiating round took place in
October 2014, prior to a visit by Vietnam's Prime Minister Nguyen Tan Dung to Brussels on
13 October. On this occasion, the prime minister issued a joint statement with President Jose
Manuel Barroso in which they "agreed on the direction to resolve the remaining issues with a view
to concluding the negotiations in the next few months".
Outstanding issues include agricultural market access, export duties, rules of origin, public
procurement, intellectual property rights including geographical indications, state-owned
enterprises and subsidies.
The next negotiating round is scheduled for January 2015, when the EU is expected to submit a
revised tariff offer.
The EU is negotiating free trade agreements with Vietnam and other ASEAN whilst preserving the
aim of an agreement with ASEAN as a whole. In 2007, the Council agreed to launch negotiations
on a region-to-region free trade agreement, but these were put on hold in 2009.