Türkiye as a Target for EU Trade Remedy Measures – What Turkish Exporting Producers Should Know
The European Union (EU) actively uses anti-dumping and anti-subsidy (or countervailing duty) investigations to protect the EU manufacturing industry from competition from imports. Imports from Türkiye are a prime target for these investigations: in the past 20 years, imports from Türkiye were targeted in 15 anti-dumping and anti-subsidy investigations. Five of these investigations were initiated in the last three years.
As the Turkish manufacturing industry continues to expand, Turkish exporters and their EU importers should be aware of EU action in the anti dumping and anti-subsidy space, so that they can implement a compliance, prevention, and action strategy.
EU Actions Against Turkish Imports
In anti-dumping investigations, the EU assesses whether Turkish goods are sold on the EU market at a price that is lower than the “normal value” of the goods. In anti-subsidy investigations, the EU checks whether imports from Türkiye benefit from countervailable government subsidies, such as access to low-priced raw materials.
If the EU imposes anti-dumping or anti-subsidy duties, these duties apply for 12 years on average. The duties are set at individual (typically lower) levels for those exporters who cooperate fully in the investigation and at residual (typically higher) levels for exporters who do not cooperate. Duty levels can significantly eat into exporters’ profit margins or even make it economically unfeasible to continue exporting to the EU. For instance, the EU imposed duties of up to 20.9% on Turkish exports of ceramic tiles, and up to 11% on Turkish exports of corrosion resistant steels.
Be Prepared for Anti dumping and Anti-subsidy Investigations
Anti-dumping and anti-subsidy duties typically significantly upset exports to the EU for a considerable period of time, thereby harming sales and profits, and disrupting supply chains. The best way to mitigate the potential impact of anti-dumping and/or anti-subsidy duties is by getting prepared.
- Turkish companies that routinely export products to the EU should monitor and, if need be adjust, their costs and pricing practices, both for domestic sales and exports to the EU.
- Turkish exporters should evaluate their sales structure for sales to the EU, and consider optimizing that structure (if need be) to reduce exposure to anti-dumping and/or anti-subsidy duties.
- Further preparations include playbooks, trainings, and monitoring of macro-economic data.
Exporters that are prepared get markedly better outcomes in anti-dumping and/or anti-subsidy investigations, primarily in the form of a lower duty rate. Obtaining a lower duty rate not only limits the cost of doing business, but can also serve as a competitive advantage compared to Turkish competitors.
How Baker McKenzie Can Help
Baker McKenzie’s uniquely global international trade team is ideally placed to help Turkish exporters prepare for and participate in EU anti-dumping and/or anti-subsidy investigations. Our team members in the EU and Türkiye based lawyers at Esin Attorney Partnership, together with our in-house economist teams, would be pleased to discuss what your company needs to do to mitigate the risk of EU anti-dumping and/or anti-subsidy duties.
More generally, our team consists of professionals in all main jurisdictions for anti-dumping and anti-subsidy matters, including Argentina, Australia, Brazil, Canada, China, the EU, the Gulf, Indonesia, Japan, Kazakhstan, Malaysia, Mexico, Peru, South Africa, Taipei, Thailand, Turkey, Ukraine, the United Kingdom, the United States, Venezuela, and Vietnam, in addition to a Geneva-based team focused on anti-dumping and anti-subsidy issues at the World Trade Organization.