News | 2018

I. EU Retaliates by Targeting US goods

aviationThe European Union has picked up President Donald Trump’s tariffs challenge and is considering responding with trade countermeasures. The WTO rules afford its members the possibility to impose temporary levies as safeguard. At the same time, it allows its members to retaliate proportionately in case the new trade restrictions are not adequately compensated within 90 days.

The European Commission is ready to exercise these retaliatory policies against the announced tariffs by the US administration, namely 25% on steel and 10% on aluminum. Experts estimate that the tariffs to be imposed by President Trump could affect €6bn in steel and aluminum exports. While the EU still hopes to avoid a full-blown trade war, European Commission officials have already presented EU member states with €2.8bn list of more than 100 US products that could be affected.

The retaliation would likely affect a variety of products from sensitive Republican-dominated states, such as cosmetics and clothing, Harley-Davidson motorbikes, orange juice from Florida and bourbon-whiskey from Kentucky. This list is on hold for the time being and it would require the approval by EU member states.

II. EU Towards New Rules on Air-Carriers

aviationAll stakeholders and citizens with an interest in aviation are called to contribute to the recently commenced consultations that will culminate in the reform of the 2008 Regulation on air services. The revised Regulation is aimed on ensuring fair competition among EU air carriers and on protecting workers and consumers from unfair commercial practices by non-EU operators.
Notwithstanding that the need for modernisation of the existing framework is widely acknowledged, the aviation industry is concerned about the ever-increasing costs of compliance as well as the complexity of the overall regulations. The proposed reform is a source for concern for small and medium carriers in the EU, criticised for being overly centralised and disregarding local realities. Additionally, non-EU carriers have already vocalised their opposition to new hurdles erected on their access to the EU market.

The skepticism aroused by the initiative makes sure that the public consultations will be the terrain of intense clash of interests, while all stakeholders will struggle to strike a good deal.

III. EU Eyeing New Restriction on Plastics

Starting from January 2018, China notified the WTO that it will ban the importing of 24 categories of waste, including plastics and mixed papers, on grounds of environmental and public health protection.

The domino effect of the world’s biggest waste processor has already affected China’s biggest client, the European Union, which used to ship approximately 60% of plastics and 13% of paper collected for recycling.

Following the Chinese ban, the EU is now considering several options that include unpopular new taxes, limits on plastic bags and a set of other standards and rules. The new measures will try to encourage the re-use of plastics, ensure that plastics packaging is fully recyclable and make the disposal of plastics economically burdensome. In addition, the European Commission is considering imposing new quality standards via new consumer labeling. Finally, the proposal is set to target water polluting plastics that are increasingly becoming a serious health concern.

IV. More EU Burdens on Household Devices

household deviceOn February 2018, the European Commission has invited all interested parties to submit their views on the energy efficiency and eco-labelling of a series of commonly used electric and electronic devices. The European Commission, welcomes the views of stakeholders and citizens alike on the eco-design of refrigerators, washing machines, dishwashers, household lamps, televisions and computers. The public consultations will inform the ongoing evaluation and will result in the preparation of regulations specific to each product category.

Despite the positive objective to contribute to the energy efficiency and create a level playing field for EU manufacturers of such devices, the new initiative has already shown its dark side. The EU industry is afraid that it will take another hard-financial beating due to increased compliance costs and so are EU consumers. Non-EU manufacturers need to constantly adjust to an ever increasing in complexity matrix of environmental regulations that makes their access to the EU market difficult.

The open consultations will last until May 2018 and the results which will be published shortly after will shape the market of household devices.

V. Germany Bans Diesel Cars

Banning diesel cars from German cities is a legitimate tool to improve air quality and protect public health according to Germany’s Federal Administrative Court. Precisely how many vehicles might be affected by the ban remains unclear, since diesel technology has long been the locomotive of the global automotive industry. Debate on the excessive amount of nitrogen oxides in the air has prevailed for years but the political dimensions of the issue started only recently.
While the ban in Germany will be gradual, it entails tremendous pressure on an industry that has already burned its subsidies options. Additionally, it requires huge effort and resources to enforce the ban from the authorities. The judgment could trigger a domino effect not only in Germany, but throughout the whole Europe, with cities like Rome, Paris, Madrid, London and Athens already heading in this direction.

While everybody is puzzled on how the ban will be enforced, the industry has stepped up its efforts to adapt. Additionally, the European Commission is considering the possibilities of a pan- European approach.

VI. EU Declares War on Piracy

In January 2018, the European Commission signaled the beginning of public consultations aiming on mapping out markets, which thrive by the abuse of intellectual property rights. The initiative is a first step in a series of escalating responses to a form of organised fraud amounting to a 5% of the total imports to the EU and resulting in damages exceeding the 85bn € for EU producers annually. The EU black list will be followed by custom controls and legislative efforts to crack down on pirates as well as consumer awareness campaigns.

The initiative, however, has raised many eyebrows worldwide, amidst rumours related to the targeting of specific competitive to the EU markets. Specifically, manufacturers from China as well as certain Balkan countries feel pinned down by the impending reforms. Furthermore, serious concerns have been raised on the effect that overly restrictive regulations might have on products considered ‘similar’ or ‘substitutes’.

One thing though is certain, that the new rules will affect a considerable part of the global market.