EU Warns Exporters Over Inspections Hampered by Pandemic

(Bloomberg) --

The global trading system was under serious political strain well before coronavirus brought the world economy to a standstill. Now the health crisis is delivering a blow to efforts by the system’s biggest champion to maintain fairness and punish rule breakers.

The European Union said the pandemic may complicate probes into whether exporters to the bloc engage in unfair trade. That’s because the European Commission, the 27-nation EU’s executive arm, has suspended all non-essential travel to — and postponed all face-to-face meetings with people visiting from — areas affected by the Covid-19 outbreak.

The restrictions are a problem for commission inquiries into whether foreign manufacturers sell their products in the EU below cost — a practice known as dumping — or receive trade-distorting subsidies. The Brussels-based commission this week urged businesses facing such investigations to pay “particular attention” to the information they submit because European trade inspectors may no longer be able to carry out on-site verifications.

“The utmost cooperation will be required from interested parties, in particular in providing information which is sufficiently detailed, can be crosschecked from independent and verifiable sources and is fully and properly certified,” the commission said in the bloc’s Official Journal.

Import duties to counter alleged dumping and subsidies are a major tool in the EU’s trade-policy arsenal, affecting billions of euros of goods ranging from bicycles to biofuels. Most such European levies are imposed against China, where the virus emerged late last year before spreading to more than 100 countries.

Europe was facing plenty of trade-policy challenges well before the pandemic struck. The EU has spent the past three years fighting to prevent U.S. President Donald Trump’s “America First” approach to international commerce and China’s aggressive export strategy from sinking the World Trade Organization, imploring both countries to work within the rules-based global order.

In its notice this week, the commission signaled a readiness to grant exporters that face EU dumping or subsidy inquiries and that are located in areas affected by the coronavirus a possible seven-day extension to the deadlines for submitting information.

Charting the Trade Turmoil

Investor confidence in the German economy plummeted to levels last seen during the European debt crisis as the rapid spread of the coronavirus pandemic halts economic activity.

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