A group of EU Member States—including Spain, Italy, France, the Netherlands, and Lithuania—has put forward a set of proposals to reform the European Union’s trade defence instruments (TDIs)[1]. The initiative responds to mounting concerns over unfair trade practices, global overcapacity, and the erosion of Europe’s industrial base.
While the EU continues to favour an open, rules-based trading system, the paper highlights increasing imbalances and the need to reinforce the Union’s ability to respond swiftly and effectively to distortive practices.
The central policy objective is to restore a level playing field while maintaining the benefits of open markets and competitive supply chains. Current trade defence instruments’ limitations include, among others, long delays for industry to benefit form a protective measure, narrow products scopes that hamper the EU’s ability to react to sector-wide disruptions, and the ease with which measures can be circumvented (compared with the enduring and long process to implement anti-circumvention measures).
Where the first two propositions focus on improvements to the TDI toolbox as such, the third set of rpoposals goes into possibilities beyond the current legal framework.
Short-term measures (no legislative change required)
The paper identifies three immediate operational improvements:
(1) Increased resources and case prioritisation
The European Commission is urged to allocate more staff and resources to DG Trade to address the growing backlog of anti-dumping and anti-subsidy cases. A shift away from a “first come, first served” model toward strategic prioritisation of sectors—particularly those relevant to economic security—is also proposed.
(2) Greater use of safeguard measures
Safeguards, historically underused, could play a more prominent role in addressing sector-wide disruptions caused by global overcapacity. The proposals encourage:
(3) Broader product definitions (across value chains)
- Faster deployment, including provisional safeguards;
- Complementarity with existing anti-dumping (AD) and countervailing duties (CVD).
(4) More assertive WTO litigation
The EU is encouraged to systematically challenge non-compliant measures at the WTO Dispute Settlement Body. Even initiating consultations could strengthen the EU’s legal position and support coordinated responses with like-minded partners.
Medium-term reforms (targeted legal adjustments)
The proposals call for “surgical” changes to improve effectiveness:
(1) Strengthening anti-circumvention rules
Circumvention of EU measures is a growing concern, particularly through third-country routing or minimal processing within the EU. Proposed changes include:
- Lowering the threshold for parts originating from the targeted country (from 60% to 50%);
- Increasing the required added value threshold (from 25% to 40%) in line with EU origin rules on industrial products[2];
- Limiting these thresholds strictly to genuine assembly operations (following the judgement of the General Court in case Çolakoğlu Metalurji v Commission[3]).
These adjustments aim to close loopholes exploited by vertically integrated companies and complex global supply chains.
(2) Revisiting the “Lesser Duty Rule”
The EU may consider removing or relaxing the lesser duty rule—under which duties are capped at the level needed to remove injury—in cases involving non-reciprocal trading partners. Additional innovations include:
- Use of tariff-rate quotas (TRQs) to protect downstream industries[4];
- Introduction of minimum import prices in certain cases.
(3) Integration of economic security considerations
A notable development is the proposal to formally incorporate economic security into the “Union interest” test. This would:
- Prioritise strategic sectors;
- Consider supply chain dependencies;
- Support industrial resilience in critical industries.
Long-term structural reforms
The paper also outlines more ambitious reforms:
(1) Addressing transnational production shifts
Companies subject to EU trade measures increasingly relocate production to third countries to avoid duties. The EU may:
- Adjust methodologies for calculating dumping margins to account for imported distortions;
- Explore WTO-compatible expansions of its current legal framework.
(2) Company-level countervailing duties
The EU could consider applying subsidies disciplines at the company level, rather than by country, to address benefits that flow across multinational corporate structures.
(3) New cross-sector trade defence tool
A potential “resilience instrument” could be introduced to address systemic distortions not captured by existing tools. This may include:
- Measures triggered by excessive supply concentration;
- Use of national security exceptions to justify trade restrictions.
The proposed reforms are broadly favourable for EU industry and signal a clear policy shift toward stronger defence of the internal market:
- Quicker access to protection: Enhanced resources and prioritisation should enable faster response to unfair trade practices.
- More effective and durable measures: Strengthened anti-circumvention rules and more robust remedies are likely to improve the real impact of trade defence actions.
- Better coverage of value chains: Broader scopes and complementary tools will help ensure that entire industrial ecosystems—not just isolated product segments—are protected.
- Support for strategic sectors: The integration of economic security considerations points to greater protection for industries critical to EU resilience and autonomy.
- Stronger EU positioning globally: A more assertive stance at the WTO and closer coordination with partners should reinforce the EU’s influence in shaping fair trade conditions.
These proposals mark a shift towards a more proactive, strategic and industry-focused trade defence policy. Although still at an early stage, they reflect a welcome return to economic realism and a strong political will to better protect European industry, which is under pressure on all fronts.
It is never too late!
[1] The paper is available on the following link : https://table.media/assets/documents/non-paper-tdi-reform-proposition.pdf
[2] Which generally require a change of tariff heading or a minimum share of added value originating in the third country of round 45-50 %.
[3] For more information, see our client alert of 25 March 2026: https://fendlersalva.com/insights/the-general-court-provides-important-clarifications-on-the-notions-of-assembly-and-completion-operations-in-the-context-of-anti-dumping-circumvention/
[4] See also the recent Fused alumina case and our client alert of 19 January 2026: https://fendlersalva.com/insights/a-novel-solution-the-assessment-of-the-unions-interest-and-the-mitigation-of-negative-effects-on-users-through-tariff-quotas-in-the-anti-dumping-investigation-on-fused-alumina/