Procedure : 2010/0032(COD)
Document stages in plenary
Document selected : A7-0210/2010

Texts tabled :

A7-0210/2010

Debates :

PV 06/09/2010 - 16
CRE 06/09/2010 - 16

Votes :

PV 07/09/2010 - 6.11
CRE 07/09/2010 - 6.11
Explanations of votes
Explanations of votes
PV 17/02/2011 - 6.1
Explanations of votes
Explanations of votes

Texts adopted :

P7_TA(2010)0301
P7_TA(2011)0061

REPORT     ***I
PDF 592kWORD 418k
25.6.2010
PE 441.080v04-00 A7-0210/2010

on the proposal for a regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU-Korea Free Trade Agreement

(COM(2010)0049 – C7‑0025/2010 – 2010/0032(COD))

Committee on International Trade

Rapporteur: Pablo Zalba Bidegain

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council implementing the bilateral safeguard clause of the EU-Korea Free Trade Agreement

(COM(2010)0049 – C7‑0025/2010 – 2010/0032(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2010)0049),

–   having regard to Article 294 and Article 207(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7‑0025/2010),

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on International Trade (A7‑0210/2010),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment  1

Proposal for a regulation

Recital 3 a (new)

Text proposed by the Commission

Amendment

 

(3a) Trade barriers in the home market of a trading partner tend to support exports from that market abroad and if it is to the EU they might thereby generate conditions for the application of the safeguard clause.

Amendment  2

Proposal for a regulation

Recital 5

Text proposed by the Commission

Amendment

(5) Safeguard measures may be considered only if the product in question is imported into the Union in such increased quantities and under such conditions as to cause, or threaten to cause, serious injury to the Unions producers of like or directly competing products as laid down in Article 3.1. Chapter 3 of the Agreement;

(5) Safeguard measures may be considered only if the product in question is imported into the Union in such increased quantities or the economic activity in question is increased in such a measure, and under such conditions as to cause, or threaten to cause, serious injury to the Unions producers of like or directly competing products or economic activities as laid down in Article 3.1. Chapter 3 of the Agreement;

Amendment  3

Proposal for a regulation

Recital 5 a (new)

Text proposed by the Commission

Amendment

 

(5a) Serious injury or the threat of serious injury to Union producers may also be caused by the non-fulfilment of specific obligations under Chapter 13 of the Agreement – particularly in respect of the social and environmental standards laid down therein – thus necessitating the imposition of safeguard measures.

Justification

The Commission must be in a position to respond with safeguard measures to unfair competitive advantages enjoyed by the Republic of Korea.

Amendment  4

Proposal for a regulation

Recital 5 b (new)

Text proposed by the Commission

Amendment

 

(5b) Whether there is serious injury or the threat of serious injury to producers or specific sectors of the economy in the Union also depends on whether the Agreement’s rules on non-tariff barriers to trade are observed. This consideration could necessitate the imposition of safeguard measures.

Justification

The Commission must be in a position to respond with safeguard measures to unfair competitive advantages enjoyed by the Republic of Korea.

Amendment  5

Proposal for a regulation

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) The tasks of following up and reviewing the Agreement and, if necessary, imposing safeguard measures should be carried out in the most transparent manner possible and with the involvement of civil society. To that end, the Domestic Advisory Group and the Civil Society Forum need to be included at every stage of the process.

Justification

It is important to involve civil-society groups in order to obtain information about the effects of the Agreement. To enable the Domestic Advisory Group and the Civil Society Forum to participate, the greatest possible degree of transparency should be ensured.

Amendment  6

Proposal for a regulation

Recital 6 b (new)

Text proposed by the Commission

Amendment

 

(6b) The Commission should submit a report once a year on the application and implementation of the Agreement and the application of the safeguard measures. Should it become apparent that the safeguard measures are insufficient, the Commission should submit a comprehensive proposal for more far-reaching safeguard measures, such as limits on quantities, quotas, import authorisation arrangements or other corrective measures.

Justification

The intention is that the Commission will review the implementation and effectiveness of the regulation’s provisions on an annual basis. Should it become apparent that the regulation is not affording sufficient protection to Union producers, the Commission will be called upon to submit a proposal for new legislation.

Amendment  7

Proposal for a regulation

Recital 7 a (new)

Text proposed by the Commission

Amendment

 

(7a) The reliability of statistics on all imports from Korea to the EU is therefore crucial to determine the existence of a threat of serious injury to Union industry as a whole or its different sectors from the day of entry into force of the Agreement.

Justification

The reliability of statistics is essential for the due implementation of safeguard measures.

Amendment  8

Proposal for a regulation

Recital 13 a (new)

Text proposed by the Commission

Amendment

 

(13a) Close monitoring and regular assessments will facilitate and shorten the initiation of proceedings and the investigation phase. Therefore the Commission should regularly monitor import and export statistics and assess the impact of the Agreement on different sectors from the day of its entry into force.

Justification

This recital establishes a reference to the Monitoring and Surveillance Procedure.

Amendment  9

Proposal for a regulation

Recital 13 b (new)

Text proposed by the Commission

Amendment

 

(13b) The Commission, the Member States and the Union producers should monitor and evaluate, on an ongoing basis, the import and export statistics on sensitive product lines covered by the Agreement from the day that it comes into force, so that any serious injury or threat of serious injury to Union producers can be identified in good time.

Justification

It is essential that the import and export statistics for all product lines be monitored, so that safeguard measures can be imposed in good time. The comprehensive monitoring of the statistics should be a Community task, incumbent on the Commission, the Member States and the Union producers.

Amendment  10

Proposal for a regulation

Recital 13 c (new)

Text proposed by the Commission

Amendment

 

(13c) It is necessary to lay down certain procedures relating to the application of Article 14 (Drawback of, or exemption from, customs duties) of the Protocol concerning the definition of 'originating products' and methods of administrative co-operation of the Agreement (hereinafter the "Rules of Origin Protocol") in order to ensure the effective operation of the mechanisms provided for therein and to provide for a comprehensive exchange of information with relevant stakeholders.

Justification

This recital establishes a reference to the specific provision of the Regulation with regard to the consideration and application of Article 14 of the Agreement’s Rules of Origin Protocol.

Amendment  11

Proposal for a regulation

Recitals 13 d and e (new)

Text proposed by the Commission

Amendment

 

(13d) Because it will not be possible to limit customs duty drawback until five years after the Agreement comes into force, it may be necessary, on the basis of this Regulation, to impose safeguard measures in response to a serious injury or threat of serious injury to Union producers that is caused by duty drawback or exemption from duty. Therefore, from the day of the Agreement’s entry into force, the Commission should monitor particularly closely, in particular in sensitive sectors, the rate of inclusion in products imported from the Republic of Korea of components or materials from third countries, any changes in that rate and the impact of such changes on the market situation.

 

(13e) Therefore the Commission should monitor Korean and third party statistics and list the range of products potentially affected by duty drawback from the day of entry into force of the Agreement.

Amendment  12

Proposal for a regulation

Recital 13 f

Text proposed by the Commission

Amendment

(13f) If a Commission's investigation concludes that damage occured in the Union's industry as a result of the EU-Korea FTA, then only for the purposes of the Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on establishing the European Globalisation Adjustment Fund1 ("EGAF Regulation"), it shall be understood that:

 

(a)"major structural changes in world trade patterns due to globalisation", as used in Article 1(1) of the EGAF Regulation shall include an increase in Korean imports to Europe, or failure to increase EU exports to Korea;

 

(b) redundancies in the automotive industry:

 

– have "significant adverse impact on the regional or local economy," and "serious impact on employment and the local economy", as used in, respectively, Articles 1(1) and 2(c) of the EGAF Regulation; and

 

– are "exceptional circumstances" as used in Article 2(c) of the EGAF Regulation.

______

1 OJ L 406, 30.12.2006, p.1.

Amendment  13

Proposal for a regulation

Recital 13 g (new)

Text proposed by the Commission

Amendment

 

(13g) In order to prevent serious injury or the threat of serious injury to producers or sectors of the economy in the Union, the Commission should closely monitor production capacities in those third countries in which components or materials which are included in products covered by the Agreement are manufactured, as well as the observance in those countries of ILO and UN standards in relation to social and working conditions and environmental standards.

Justification

Distortions of competition caused by social dumping must be prevented.

Amendment  14

Proposal for a regulation

Recitals 13 h-j (new)

Text proposed by the Commission

Amendment

 

(13h) Article 11.1(2) of Chapter Eleven of the Agreement establishes a requirement that the Parties maintain in their respective territories comprehensive competition laws which effectively address restrictive agreements, concerted practices and abuse of dominance by one or more enterprises.

 

(13i) Article 11.6(2) of Chapter Eleven establishes an obligation on the Parties to co-operate in relation to their respective enforcement policies and in the enforcement of their respective competition laws, including through enforcement cooperation, notification, consultation and exchange of non-confidential information based on the Agreement between the European Community and the Government of the Republic of Korea concerning cooperation on anti-competitive activities signed on 23 May 2009 (the "Cooperation Agreement").

 

(13j) The purpose of the Cooperation Agreement is to contribute to the effective enforcement of the competition laws of each Party through promoting cooperation and coordination between the competition authorities of the Parties.

Justification

This amendment would require the Commission to make the request the KFTC to take appropriate enforcement activities where it believes that anticompetitive activities carried out in Korea affect the interests of the Community, where the Commission believes that such anticompetitive activities are hindering European access to the Korean automotive market.

Amendment  15

Proposal for a regulation

Recital 14

Text proposed by the Commission

Amendment

(14) The measures necessary for the implementation of this Regulation should be adopted in accordance with Council decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission.

(14) The implementation of the bilateral safeguard clause of the Agreement requires that uniform conditions for the adoption of provisional and definitive safeguard measures, for the imposition of surveillance measures, and for the termination of an investigation and a proceeding without measures, should be adopted by the Commission. According to Article 291 of the Treaty on the Functioning of the European Union, rules and general principles concerning mechanisms for the control by Member States of the Commission's exercise of implementing powers shall be laid down in advance by a regulation adopted in accordance with the ordinary legislative procedure. Pending the adoption of that new regulation, Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission continues to apply, with the exception of the regulatory procedure with scrutiny, which is not applicable.

Justification

This recital establishes a reference to the necessary alignment of the decision making procedures after the entry into force of the Regulation on laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers.

Amendment  16

Proposal for a regulation

Recital 14 a (new)

Text proposed by the Commission

Amendment

 

(14a) This regulation should extend only to goods produced in the European Union and in the Republic of Korea. It should not cover products, parts or components the production of which is contracted out to manufacturing zones such as Kaesong. Before the scope of this Regulation can be extended to include products contracted out to external manufacturing zones, it should be amended in accordance with the ordinary legislative procedure. In any extension of the regulation’s scope, it should be ensured that obligations under Chapter 13 of the Agreement are also met in external manufacturing zones.

Justification

Extension of the Agreement to cover foreign manufacturing zones – which will require comprehensive analysis of the observance there of international, social, work-related and environmental standards – must be subject to the ordinary legislative procedure.

Amendment  17

Proposal for a regulation

Article 1 – point a

Text proposed by the Commission

Amendment

(a) "Union industry" means the Union producers as a whole of the like or directly competitive products operating within the territory of the Union, or those Union producers whose collective output of the like or directly competitive products constitutes a major proportion of the total Union production of those products;

(a) "Union industry" means the Union producers as a whole of the like or directly competitive products operating within the territory of the Union, or those Union producers whose collective output of the like or directly competitive products constitutes a major proportion of the total Union production of those products. In cases where the like or directly competitive product is only one of several products that are made by the producers who constitute the Union industry, the industry shall be defined as the specific operations that are involved in the production of the like or directly competitive product;

Justification

It is likely that safeguard actions will be brought against specific classes of products, such as automobiles with engine displacements that are less than a certain amount. This amendment seeks to ensure that the Commission has the authority to interpret “industry” narrowly, as the producers that specific class of product.

Amendment  18

Proposal for a regulation

Article 1 – point c

Text proposed by the Commission

Amendment

(c) "threat of serious injury" means serious injury that is clearly imminent; a determination of the existence of a threat of serious injury shall be based on facts and not merely on allegation, conjecture or remote possibility;

(c) "threat of serious injury" means serious injury that is clearly imminent; a determination of the existence of a threat of serious injury shall be based on verifiable facts and not merely on allegation, conjecture or remote possibility; forecasts, estimations and analyses made on the basis of factors laid down in Article 4(5), should inter alia, be taken into account to determine the existence of a threat of serious injury;

Amendment  19

Proposal for a regulation

Article 1 – point e a (new)

Text proposed by the Commission

Amendment

 

(ea) "interested parties" means parties affected by the imports of the product in question.

Justification

This amendment establishes a clarification on the meaning of “interested parties”.

Amendment  20

Proposal for a regulation

Article 1 - point e b (new)

Text proposed by the Commission

Amendment

 

(eb) “products” means goods produced in the European Union and the Republic of Korea. It does not include goods or components the production of which is contracted out to external manufacturing zones. Before the regulation’s scope can be extended to include products contracted out to external manufacturing zones, it shall be amended in accordance with the ordinary legislative procedure.

Justification

Extension of the Agreement to cover foreign manufacturing zones – which will require comprehensive analysis of the observance there of international, social, work-related and environmental standards – must be subject to codecision by Parliament and the Council under the ordinary legislative procedure.

Amendment 21

Proposal for a regulation

Article 1 - point e c (new)

Text proposed by the Commission

Amendment

 

(ec) “such conditions as to cause or threaten to cause” includes such factors as the production capacity, utilisation rates, currency practices and labour conditions of a third country with regard to the manufacturing of components and materials incorporated into the product concerned.

Justification

The duty-drawback provisions of the agreement create incentives for Korea to shift an ever larger portion of its production to nearby countries with low-cost labour conditions. In effect, these other countries will enjoy significant benefits under the agreement viz. the European Union without making any corresponding concessions. The amendment seeks to address the effects of the duty-drawback provisions of the agreement, by expanding the focus of safeguard measures to include factors in the third-party countries that benefit from the duty-drawback provisions.

Amendment  22

Proposal for a regulation

Article 1 - point e d (new)

Text proposed by the Commission

Amendment

 

(ed) "Region(s)" means one or more Member States in the Union.

Amendment   23

Proposal for a regulation

Article 2 - paragraph 1

Text proposed by the Commission

Amendment

1. A safeguard measure may be imposed in accordance with the provisions set out in this Regulation where a product originating in Korea is, as a result of the reduction or the elimination of the customs duties on that product, being imported in the Union in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the Union industry producing a like or directly competitive product.

1. A safeguard measure may be imposed in accordance with the provisions set out in this Regulation where a product or an economic activity originating in Korea is, as a result of the reduction or the elimination of the customs duties on that product or activity being imported in the Union in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the Union industry producing a like or directly competitive product or activity.

Amendment  24

Proposal for a regulation

Article 2 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Where it emerges, primarily on the basis of the factors referred to in Article 4(5), that the conditions laid down for the adoption of measures pursuant to Article 2(1) are met in one or more regions of the Union, the Commission, after having examined alternative solutions, may exceptionally authorise the application of surveillance or safeguard measures limited to the region(s) concerned if it considers that such measures applied at that level are more appropriate than measures applied throughout the Union.

 

These measures must be temporary and must disrupt the operation of the internal market as little as possible. They shall be adopted in accordance with the provisions laid down in Article 2(2).

Justification

This article establishes a "Regional Clause" in accordance with Article 18 of the General Safeguard (REGULATION (EC) No 260/2009).

Amendment 25

Proposal for a regulation

Article 2 - paragraphs 3 a and b (new)

Text proposed by the Commission

Amendment

 

3a. For safeguard measures to be used effectively, the Commission (Eurostat) shall present an annual monitoring report to the European Parliament and the Council on updated statistics on imports from Korea impacting sensitive sectors in the EU as a result of the Agreement.

 

3b. In case of a proven threat of injury reported to the Commission by the Union industry, the Commission may consider broadening the scope of the monitoring for other impacted sectors (interested parties).

Amendment  26

Proposal for a regulation

Article 2 a (new)

Text proposed by the Commission

Amendment

 

Article 2a

 

Monitoring

 

The Commission shall monitor the evolution of import and export statistics of Korean products, and shall cooperate and exchange data on a regular basis with Member States and the Union industry. The Commission shall ensure that Member States provide adequate and good quality statistical data diligently.

 

The Commission shall closely monitor Korean and third party statistics and forecasts for the range of products potentially affected by duty drawback from the day of entry into force of the Agreement.

Justification

This Article establishes a proper Monitoring scheme.

Amendment  27

Proposal for a regulation

Article 3 – paragraph 1

Text proposed by the Commission

Amendment

1. An investigation shall be initiated upon request by a Member State or on the Commission’s own initiative if it is apparent to the Commission that there is sufficient evidence to justify such initiation.

1. An investigation shall be initiated upon request by a Member State, the European Parliament, the Domestic Advisory Group, by any legal person or any association not having legal personality, acting on behalf of the Union industry and representing at least 25% of it or on the Commission’s own initiative if it is apparent to the Commission that there is sufficient prima facie evidence as determined on the basis of factors laid down in Article 4(5), to justify such initiation.

Justification

This amendment establishes a clarification about the enabled actors for the initiation of proceedings as well as about the conditions to be met for initiating a proceeding.

Amendment  28

Proposal for a regulation

Article 3 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The request to initiate an investigation shall contain evidence of the meeting of the conditions for imposing the safeguard measure within the meaning of Article 2(1). The request shall generally contain the following information: the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilisation, profits and losses and employment.

Justification

It must be made clearer which information has to be presented for the Commission to initiate an investigation.

Amendment  29

Proposal for a regulation

Article 3 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1b. In applying the first paragraph of this article, and for a period of five years after the Agreement’s entry into force, the Commission shall pay particular attention to finished products from the Republic of Korea being imported into the European Union at an increased rate where such an increase is attributable to increased use in the finished products of parts or components imported into the Republic of Korea from third countries which have not concluded a free trade agreement with the European Union and which are covered by the provisions for customs duty drawback or exemption from customs duty.

Justification

The Republic of Korea’s use of customs duty drawback or exemption arrangements for parts or components imported from third countries and included in products traded between the Republic of Korea and the European Union under the Free Trade Agreement needs to be monitored extremely closely.

Amendment  30

Proposal for a regulation

Article 3 – paragraph 2

Text proposed by the Commission

Amendment

2. The Member States shall inform the Commission should trends in imports from the Republic of Korea appear to call for safeguard measures. That information shall include the evidence available as determined on the basis of factors laid down in Article 4. The Commission shall pass that information on to all Member States within three working days.

2. The Member States, or the Union industry shall inform the Commission should trends in imports from the Republic of Korea appear to call for safeguard measures. That information shall include the evidence available as determined on the basis of factors laid down in Article 4(5). The Commission shall, within three working days, upload that information on to the online-platform referred to in Article 9 (the Online-Platform), and shall send an upload notification to all Member States, the Union industry, and the European Parliament.

Justification

The information process should be based on a transparent procedure to inform Member States, Union industry, and the European Parliament about the possible initiation of a proceeding.

Amendment  31

Proposal for a regulation

Article 3 - paragraph 3

Text proposed by the Commission

Amendment

3. Consultation with the Member States shall take place within eight working days of the Commission’s sending the information to Member States as provided for in paragraph 2 within the Committee referred to in Article 10 on the basis of the procedure referred to in Article 11.1. Where, after consultation, it is apparent that there is sufficient evidence to justify the initiation of a proceeding the Commission shall publish a notice in the Official Journal of the European Union. Initiation shall take place within one month of the receipt of information from a Member State.

3. Consultation with the Member States shall take place within eight working days of the Commission’s sending the information as provided for in paragraph 2 within the Committee referred to in Article 10 on the basis of the procedure referred to in Article 11(1). Where, after consultation, it is apparent that there is sufficient evidence determined on the basis of factors laid down in Article 4(5) to justify the initiation of a proceeding the Commission shall publish a notice in the Online-Platform and in the Official Journal of the European Union. Initiation shall take place within one month of the request by a Member State, the European Parliament, or by the Union industry.

Amendment  32

Proposal for a regulation

Article 3 - paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. Evidence collected for the purpose of initiating proceedings in accordance with Article 14(2) of the Rules of Origin Protocol annexed to the Agreement (Drawback of, or exemption from, customs duties) may also be used for investigations with a view to the imposition of safeguard measures where the conditions stipulated in this article are met.

Justification

Drawback of, or exemption from, customs duties can result in injury to European producers. It therefore makes sense to include a reference to the Rules of Origin Protocol. Findings concerning the damaging effects of duty drawback must also constitute grounds for imposing safeguard measures.

Amendment  33

Proposal for a regulation

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

1. Following the initiation of the proceeding, the Commission shall commence an investigation.

1. Following the initiation of the proceeding, the Commission shall commence an investigation. The investigation period as set in Article 4(3) shall start on the day the decision to initiate the investigation is published in the Official Journal.

Amendment  34

Proposal for a regulation

Article 4 – paragraph 2

Text proposed by the Commission

Amendment

2. The Commission may request Member States to supply information and Member States shall take whatever steps are necessary in order to give effect to any such request. Where that information is of general interest or where its transmission was requested by a Member State, the Commission shall forward it to all Member States provided it is not confidential. If the information is confidential the Commission shall forward a non-confidential summary.

2. The Commission may request Member States to supply information and Member States shall take whatever steps are necessary in order to give effect to any such request. Where that information is of general interest or where its transmission was requested by a Member State, the European Parliament or the Union industry, the Commission shall upload the information onto the Online-Platform provided it is not confidential. If the information is confidential the Commission shall upload a non-confidential summary.

Justification

Clarification on the procedure for transmitting and sharing information.

Amendment  35

Proposal for a regulation

Article 4 – paragraph 3

Text proposed by the Commission

Amendment

3. The investigation shall, whenever possible, be concluded within six months of the initiation of the investigation. In exceptional circumstances duly justified by the Commission, that time limit may be extended by a further period of three months.

3. The investigation shall be concluded within 200 days of the initiation of the investigation.

Justification

A suggestion to streamline the period. Instead of X + X months or days, we propose a maximum number of 200 days. Unlike the EPA Safeguard that runs on a rather long time schedule, the Korea Safeguard is to deal with one country only. Therefore, it is reasonable to introduce a shorter period for a faster procedure.

Amendment  36

Proposal for a regulation

Article 4 – paragraph 5

Text proposed by the Commission

Amendment

5. In the investigation the Commission shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of the Union industry, in particular, the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment.

5. In the investigation the Commission shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of the Union industry, in particular, the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment. This list is not exhaustive and other relevant factors may also be taken into consideration by the Commission for its injury determination, such as stocks, prices, return on capital employed, cash flow, and other factors which are causing or may have caused serious injury, or threaten to cause serious injury. In the event that third-country content commonly accounts for a significant amount of the manufacturing cost of the product concerned, the Commission should also evaluate, as bearing on the situation of the Union industry, the production capacity, utilisation rates, currency practices and labour conditions of the third countries concerned.

Amendment  37

Proposal for a regulation

Article 4 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

 

5a. Moreover, in the investigation, the Commission shall evaluate, the observance by the Republic of Korea of the social and environmental standards laid down in Chapter 13 of the Agreement and any consequent effects on price building or unfair competitive advantages potentially leading to serious injury or the threat of serious injury to producers or specific sectors of the economy in the European Union.

Justification

The Commission must be in a position to respond with safeguard measures to unfair competitive advantages enjoyed by the Republic of Korea.

Amendment  38

Proposal for a regulation

Article 4 – paragraph 5 b (new)

Text proposed by the Commission

Amendment

 

5b. In the investigation, the Commission shall also evaluate observance of the Agreement’s rules on non-tariff barriers to trade and any serious injury to producers or individual sectors of the economy in the European Union that may result therefrom.

Justification

The Commission must be in a position to respond with safeguard measures to unfair competitive advantages enjoyed by the Republic of Korea.

Amendment  39

Proposal for a regulation

Article 4 – paragraph 6

Text proposed by the Commission

Amendment

6. Interested parties which have come forward pursuant to Article 3 (4) (b) and representatives of the Republic of Korea may, upon written request, inspect all information made available to the Commission in connection with the investigation other than internal documents prepared by the authorities of the Union or its Member States, provided that that information is relevant to the presentation of their case and not confidential within the meaning of Article 9 and that it is used by the Commission in the investigation. Interested parties which have come forward may communicate their views on the information in question to the Commission. Those views may be taken into consideration where they are backed by sufficient evidence.

6. Interested parties which have come forward pursuant to Article 3 (4) (b) and representatives of the Republic of Korea may, upon written request, inspect all information made available to the Commission in connection with the investigation other than internal documents prepared by the authorities of the Union or its Member States, provided that that information is relevant to the presentation of their case and not confidential within the meaning of Article 9 and that it is used by the Commission in the investigation. Interested parties which have come forward may communicate their views on the information in question to the Commission. Those views shall be taken into consideration where they are backed by sufficient evidence.

Justification

Clarification on wording.

Amendment  40

Proposal for a regulation

Article 4 – paragraph 7

Text proposed by the Commission

Amendment

7. The Commission may hear the interested parties. Such parties shall be heard where they have made a written application within the period laid down in the notice published in the Official Journal of the European Union, showing that they are actually likely to be affected by the outcome of the investigation and that there are special reasons for them to be heard orally.

7. The Commission shall hear interested parties. Such parties shall be heard where they have made a written application within the period laid down in the notice published in the Official Journal of the European Union, showing that they are actually likely to be affected by the outcome of the investigation and that there are reasons for them to be heard orally.

 

The Commission shall hear such parties on further occasions if there are special reasons for them to be heard again.

Justification

Clarification on wording. Moreover, the new subparagraph would clarify that parties have the right to be heard at least once and that there must be special reasons for them to be heard again.

Amendment  41

Proposal for a regulation

Article 4 a (new)

Text proposed by the Commission

Amendment

 

Article 4a

 

Surveillance measures

 

1. Where the trend in imports of a product originating in the Republic of Korea is such that they could lead to one of the situations referred to in Article 2, imports of that product may be subject to prior European Union surveillance.

 

2. The decision to impose surveillance shall be taken by the Commission on the basis of the procedure referred to in Article 11(1).

 

3. Surveillance measures shall have a limited period of validity. Unless otherwise provided, they shall cease to be valid at the end of the second six-month period following the first six months after the measures were introduced.

 

4. Surveillance measures may be restricted to the territory of one or more regions of the Union where necessary.

Justification

This Article would allow for a proper surveillance mechanism on the basis of the General Safeguard (REGULATION (EC) No 260/2009).

Amendment  42

Proposal for a regulation

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

1. Provisional safeguard measures shall be applied in critical circumstances where a delay would cause damage which it would be difficult to repair, pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the Republic of Korea have increased as the result of the reduction or elimination of a customs duty under the Agreement, and such imports cause serious injury, or threat thereof, to the domestic industry. Provisional measures shall be taken on the basis of the procedure referred to in Article 11.1.

1. Provisional safeguard measures shall be applied in critical circumstances where a delay would cause damage which it would be difficult to repair, pursuant to a preliminary determination on the basis of the factors laid down in Article 4(5) that there is sufficient evidence that imports of an originating good from the Republic of Korea have increased as the result of the reduction or elimination of a customs duty under the Agreement, and such imports cause serious injury, or threat thereof, to the domestic industry. Provisional measures shall be taken on the basis of the procedure referred to in Article 11(1).

Amendment  43

Proposal for a regulation

Article 5 – paragraph 2

Text proposed by the Commission

Amendment

2. Where a Member State requests immediate intervention by the Commission and where the conditions in paragraph 1 are met, the Commission shall take a decision within five working days of receiving the request.

2. Where a Member State, the European Parliament, or the Union industry requests immediate intervention by the Commission and where the conditions in paragraph 1 are met, the Commission shall take a decision within five working days of receiving the request. The investigation period as set in Article 4(3) shall start on the day the decision to apply provisional safeguard measures is taken.

Justification

Clarification on the actors concerned and on the exact timing.

Amendment  44

Proposal for a regulation

Article 5 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. The measures referred to in this Article shall apply to every product which is put into free circulation after their entry into force. However, such measures shall not prevent the release for free circulation of products already on their way to the Union provided that the destination of such products cannot be changed.

Justification

Introduction of a Shipping clause like in Article 16(5) of the General Safeguard (REGULATION (EC) No 260/2009).

Amendment  45

Proposal for a regulation

Article 6

Text proposed by the Commission

Amendment

1. Where bilateral safeguard measures are deemed unnecessary the investigation and proceeding shall be terminated on the basis of the procedure referred to in Article 11.2.

1. Where bilateral safeguard measures do not meet the requirements of this Regulation, the investigation and proceeding shall be terminated on the basis of the procedure referred to in Article 11(1).

 

2. Without prejudice to paragraph 1, if the European Parliament expresses an objection to the draft decision not to impose bilateral safeguard measures, on the grounds that this decision would negate the intention of the legislator, the Commission shall re-examine the draft decision. Taking the reasons for the objection into account and within the time-limits of the procedure underway, the Commission may submit a new draft decision to the committee or submit a proposal to the European Parliament and the Council in accordance with the Treaty. The Commission shall inform the European Parliament, the Council and the committee of the action which it intends to take and of its reasons for doing so.

 

3. The Commission shall publish a report setting forth its findings and reasoned conclusions reached on all pertinent issues of fact and law with due regard to the protection of confidential information within the meaning of Article 9.

Justification

Reintroduction of the Advisory Procedure according to the Comitology Decision as well as the Advisory Procedure (Article 4) proposed in the Commission proposal for a Regulation of the European Parliament and the Council laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (COM(2010)0083), and introduction of a new paragraph to underline the transparency of the procedure.

Amendment  46

Proposal for a regulation

Article 7

Text proposed by the Commission

Amendment

Where the facts as finally established show that the circumstances set out in Article 2.1 are met, a decision to impose definitive bilateral safeguard measures shall be taken in accordance with the procedure referred to in Article 11.2.

Where the facts as finally established show that the circumstances set out in Article 2.1 are met, a decision to impose definitive bilateral safeguard measures shall be taken in accordance with the procedure referred to in Article 11(1).

 

The Commission shall make public, with due regard to the protection of confidential information within the meaning of Article 9, a report with a summary of the material facts and considerations relevant to the determination.

Justification

Reintroduction of the Advisory Procedure according to the Comitology Decision as well as the Advisory Procedure (Article 4) proposed in the Commission proposal for a Regulation of the European Parliament and the Council laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (COM(2010)0051), and introduction of a paragraph to underline the transparency of the procedure.

Amendment  47

Proposal for a regulation

Article 8 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. A safeguard measure shall remain in force, pending the outcome of the review, during any extension period.

Justification

The regulation fails to specify whether measures remain in force (i.e. whether duties are to be collected) during reviews carried out prior to the measures' expiry. In line with standard EU practice in connection with trade protection measures, the measures should remain in force throughout the review period.

Amendment  48

Proposal for a regulation

Article 9 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The Commission shall ensure that all data and statistics which are required for the investigation are available, comprehensible, transparent and verifiable. The Commission shall undertake, as soon as the necessary technical framework is in place, to set up a password-protected online portal, which it shall manage and through which all relevant, non-confidential information within the meaning of this Article shall be disseminated. Member States, registered Union industry, the Domestic Advisory Group, and the European Parliament must be granted access to this Online-Platform on request. The information includes statistical information relevant for determining if evidence fulfils the requirements as stated in Article 2(1), as well as all further information relevant in connection with an investigation.

 

Information received though this Online-Platform shall be used only for the purpose for which it was requested. Any information of a confidential nature or any information provided on a confidential basis received pursuant to this Regulation shall not be disclosed without specific permission from the supplier of such information.

Justification

With this provision, rules for the creation, operation and use of the online-platform are to be established.

Amendment  49

Proposal for a regulation

Article 10

Text proposed by the Commission

Amendment

The Commission shall be assisted by the Committee provided for in Article 4(1) of Council Regulation (EC) No 260/2009 on the common rules for imports. Article 4 of Council Regulation (EC) No 260/2009 shall apply mutatis mutandis.

The Commission shall be assisted by the Committee provided for in Article 4(1) of Council Regulation (EC) No 260/2009 on the common rules for imports.

Justification

The procedural provisions for the Committee are described in Article 11. A reference to Article 4 of Regulation 260/2009 could create misunderstandings.

Amendment  50

Proposal for a regulation

Article 10 a (new)

Text proposed by the Commission

Amendment

 

Article 10a

Report

 

1. The Commission shall make public an annual report on the application and implementation of the Agreement. The report shall include information about the activities of the various bodies responsible for monitoring the implementation of the Agreement and fulfilment of the obligations arising therefrom, including obligations concerning barriers to trade.

 

2. Special sections of the report shall deal with the fulfilment of obligations under Chapter 13 of the Agreement and with the activities of the Domestic Advisory Group and the Civil Society Forum.

 

3. The report shall also present a summary of the statistics and the evolution of trade with Korea. Specific mention shall be made of the results of the monitoring of duty drawback.

 

4. The European Parliament or the Council may, within one month, invite the Commission to an ad hoc meeting of the competent committee of Parliament or of the Council to present and explain any issues related to implementation of the Agreement.

Justification

A report on implementation of the Free Trade Agreement between the EU and the Republic Korea, in its entirety, and on the observance of all its provisions – including in relation to trade barriers and social and environmental standards –must be made public annually.

Amendment  51

Proposal for a regulation

Article 11 – paragraph 2

Text proposed by the Commission

Amendment

2. When reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

deleted

Justification

Given that the Common Commercial Policy falls under the exclusive competencies of the Union, there is no need to establish a procedure, whereby Member States could vote by qualified majority against a Commission’s draft measure. The imposition of Safeguard measures is determined after an examination of the conditions referred to in the Regulation, which is essentially an economic assessment. When these conditions are met, there should be no room for discretion or for political choice, and thereby no need for a Member States’ decision against the Commission’s draft.

Amendment  52

Proposal for a regulation

Article 11 – paragraph 3

Text proposed by the Commission

Amendment

3. The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at one month.

deleted

Justification

No need to refer to Article 4(3) of the Decision 1999/468/EC (the reference made to Article 5(6) is a clerical error in the Commission’s proposal.

Amendment  53

Proposal for a regulation

Article 11 a (new)

Text proposed by the Commission

Amendment

 

Article 11a

 

Reporting

 

1. The Commission shall make public an annual report on the application and functioning of the safeguard clause. The report shall include a summary of the requests to initiate proceedings, investigations and its results, termination of investigations and proceedings without measures, imposition of provisional safeguard measures or definitive measures, and the justification for each decision on these issues accompanied by a summary of the relevant information and facts.

 

2. The report shall also present a summary of the statistics and the evolution of trade with Korea. Specific mention shall be made of the results of the monitoring of the duty drawback.

 

3. The European Parliament or the Council may convene the Commission within one month for an ad hoc meeting of the competent committee of the European Parliament or of the Council to present and explain any issue related to the application of the safeguard clause, the duty drawback, or the Agreement in general.

Justification

With this provision, the Regulation would establish a clear duty on the Commission to report on the application of the Regulation.

Amendment  54

Proposal for a regulation

Article 11 b (new)

Text proposed by the Commission

Amendment

 

Article 11b

 

Procedure for the application of Article 14 of the Rules of Origin Protocol

 

1. For the purpose of applying Article 14 (Drawback of, or exemption from, customs duties) of the Protocol concerning the definition of 'originating products' and methods of administrative co-operation of the Agreement (hereinafter the "Rules of Origin Protocol"), the Commission shall monitor closely the evolution of relevant import and export statistics both in value and as appropriate in quantities and regularly share these data with, and report its findings, to the European Parliament, the Council and the Union industries concerned. Monitoring shall start from the time of provisional application and data shall be shared on a bimonthly basis.

 

In addition to the tariff lines included in Article 14(1) of the Agreement, the Commission shall draw up, in cooperation with the Union industry, a list of key tariff lines that are not specific for automotive, but important for car manufacturing and other related sectors. A specific monitoring shall be carried out as laid down in Article 14(1) of the Agreement.

 

2. Upon request of a Member State or on its own initiative the Commission shall immediately examine whether the conditions for invoking Article 14 of the Rules of Origin Protocol are met and report its findings within 10 working days of a request. Following consultations in the framework of the special committee to which Article 207(3), subparagraph 3 of the Treaty on the Functioning of the European Union refers to, the Commission shall request consultations with Korea whenever the conditions of Article 14 of the Protocol of Rules of Origin are met. The Commission shall consider that the conditions are met, inter alia, when the thresholds mentioned in paragraph 3 are reached.

 

3. A difference of 10 percentage points shall be considered as "significant" for the purposes of application of paragraph 2.1(a) of Article 14 of the Rules of Origin Protocol when assessing the increased rate of imports of parts or components to/into Korea as compared with the increased rate of exports from Korea to the EU of finished products. An increase of 10% shall be considered as "significant" for the purposes of application of paragraph 2.1(b) of Article 14 of the Rules of Origin Protocol when assessing the increase of exports from Korea to the EU of finished products in absolute terms, or relative to domestic production. Increases below these thresholds may also be considered as "significant" on a case-by-case basis.

Justification

With this provision, the Regulation would meet the concerns raised by many representative organisations of the Union’s civil society, as well as its industry and trade unions. It would establish a specific provision to the application of Article 14 of the Rules of Origin Protocol.


EXPLANATORY STATEMENT

On 23 April 2007 the Council authorised the Commission to open negotiations with the Republic of Korea with a view to concluding an EU-Korea Free Trade Agreement. The agreement was initialled on 15 October 2009.

The agreement incorporates a bilateral safeguard clause that provides for the possibility of re-imposing the most-favoured-nation (MFN) rate when, as a result of trade liberalisation, imports increase to such an extent – in absolute terms or in relation to domestic production – and take place under such conditions as to cause, or threaten to cause, serious injury to the EU industry producing a similar or directly competing product.

For such measures to become operational, the safeguard clause must be incorporated into EU law, not least because the procedural aspects of the imposition of safeguard measures, as well as the rights of interested parties, need to be specified. The proposal for a regulation of the European Parliament and of the Council that is before us constitutes the legal instrument required for implementation of the safeguard clause in the EU-Korea Free Trade Agreement.

The rapporteur would stress that legislative work on this regulation should be confined to issues relating to its implementation, without unilaterally altering fundamental provisions of the agreement and adopting measures that go against its spirit. For instance, no changes should be made to the type of safeguard measures applicable, to the length of time for which they may apply or to the period during which the safeguard clause may be brought to bear.

It is the rapporteur's intention to ensure that the clause is both effective and genuinely applicable. The clause must provide a genuinely enforceable means of preventing serious injury from being caused to EU industry and enabling it to adjust to the new situation. To this end, the rapporteur believes that the following proposals should be made:

Timing and deadlines

The investigation process must be concluded within no more than 200 days, in line with the maximum period for the application of provisional measures, so as to ensure that industry is not left unprotected while an investigation is in progress. This period is more than long enough to enable an investigation to be carried out, given that it will focus on the situation in only one country.

A number of amendments seek to clarify exactly when the investigation process is deemed to have started. The investigation period will be deemed to have started on the day the decision to initiate an investigation is taken or the day on which provisional safeguard measures are adopted.

'Regional' safeguard measures

The rapporteur is proposing that there should be the option of applying safeguard measures at regional level in exceptional cases; any such measures must cause the least possible disruption to the internal market. The aim is to take due account of the major differences between the specific circumstances obtaining in each Member States and the fact that the FTA with South Korea may have a very different impact on the industry in each. Accordingly, where industries in one or more Member States are particularly severely affected, it should be possible for 'regional' safeguard measures to be brought to bear in order to enable them to adjust to the new situation.

Such measures are in keeping with the aims of the safeguard clause and are proportionate, given the huge market that is being opened up to Korean exports and the fact that use may be made of the clause during only a limited period of time, i.e. 10 years after the removal of tariffs.

Involvement of industry and Parliament

The rapporteur is proposing that industry and Parliament should be able to request that an investigation be opened and provisional measures be applied, and should be afforded access to information relating to the investigation process. It is proposed that an online platform be set up, on which all non-confidential information supplied to the Commission will be shared. The information must be kept up to date, so as to ensure that the latest information on safeguard proceeding investigations is available.

Evidence

The type of evidence required in order for a proceeding to be initiated needs to be clearly defined, in order to place industries that may be affected in a more secure position. The rapporteur is proposing that the adequacy of the evidence supplied should be determined on the basis of the factors that the regulation lays down for the investigation phase. The range of factors should be extended to include others that could be relevant when determining whether serious injury is being caused or there is a threat of it being caused.

Monitoring and surveillance measures

The Commission should, from the day on which the agreement comes in to force, rigorously monitor trends in exports and imports between Korea and the European Union, paying particular attention to the sectors likely to be most affected.

Furthermore, appropriate arrangements need to be made for the imposition of surveillance measures in situations that could result in serious injury being caused to EU industry.

Reporting

The rapporteur is proposing that the Commission should duly substantiate decisions to terminate proceedings without imposing safeguard measures or to impose measures.

He is also proposing that it should publish an annual report providing an overview of the requests to initiate investigations that have been submitted, the investigations conducted and their outcome, and decisions to impose provisional or definitive measures, together with statistics showing the trends in trade with Korea, with specific reference being made to duty drawback data.

Parliament or the Council may, within one month, summon the Commission to appear before the competent committee of Parliament or of the Council to present and explain any issue related to the application of the safeguard clause, the duty drawback or the FTA in general.

Duty drawback

The rapporteur has noted the concerns voiced by representatives of civil society, industry and the trade union movement, among others, as to the implications of the duty drawback arrangements, and believes that a number of criteria relating to the implementation of Article 14 of the Rules of Origin Protocol need to be laid down in order to ensure that its provisions are properly applied and that there is close cooperation and effective information sharing with stakeholders.

Comitology

The regulation was submitted to the Council and Parliament before the review of instruments relating to the implementing powers deriving from Article 291(2) of the Treaty on the Functioning of the European Union had commenced. The decision-making procedures will need to be in keeping with the provisions finally adopted in this respect. Given that the common commercial policy comes within the EU's exclusive sphere of competence and that the imposition of safeguard measures is to be based on an economic assessment, there should be no scope for Member States to take decisions that go against Commission decisions in this area.


PROCEDURE

Title

Bilateral safeguard clause in the EU-Korea free trade agreement

References

COM(2010)0049 – C7-0025/2010 – 2010/0032(COD)

Date submitted to Parliament

9.2.2010

Committee responsible

       Date announced in plenary

INTA

25.2.2010

Rapporteur(s)

       Date appointed

Pablo Zalba Bidegain

17.3.2010

 

 

Discussed in committee

17.3.2010

28.4.2010

1.6.2010

 

Date adopted

23.6.2010

 

 

 

Result of final vote

+:

–:

0:

27

0

1

Members present for the final vote

Laima Liucija Andrikienė, Kader Arif, David Campbell Bannerman, Daniel Caspary, William (The Earl of) Dartmouth, Marielle De Sarnez, Christofer Fjellner, Joe Higgins, Yannick Jadot, Metin Kazak, Bernd Lange, David Martin, Emilio Menéndez del Valle, Vital Moreira, Cristiana Muscardini, Niccolò Rinaldi, Tokia Saïfi, Helmut Scholz, Peter Šťastný, Robert Sturdy, Gianluca Susta, Keith Taylor, Iuliu Winkler, Jan Zahradil, Pablo Zalba Bidegain, Paweł Zalewski

Substitute(s) present for the final vote

George Sabin Cutaş, Małgorzata Handzlik, Salvatore Iacolino, Elisabeth Köstinger, Miloslav Ransdorf, Jarosław Leszek Wałęsa

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