Brussels, 11 January 2018 - 2017 saw the conclusion of two important trade defence files, with the EU institutions reaching a political agreement on the modernisation of the Trade Defence Instruments on December 5th, and, earlier, on the new anti-dumping methodology. Throughout both files, Cefic successfully advocated for its key ask: to have adequate provisions that tackle raw material price distortions – such as export restrictions or export duties.As evidenced by past and recent WTO Dispute Settlement cases, market distortions with regard to chemical feedstock are a key factor to causing dumping.Modernisation of Trade Defence Instruments (MTDI)The MTDI dossier – an attempt to revamp the EU’s anti-dumping and anti-subsidy instrument – goes back four years to 2013, when the Commission first submitted its proposal to the Council and the Parliament. The proposal remained blocked in the Council until end 2016.The agreed text contains provisions on raw materials, as advocated by Cefic, but with a nuance. The raw material distortions should be ‘significant’ in order to be able to waive the EU ‘Lesser-Duty-Rule’. This ‘significance’ will be measured by the share of the distorted raw materials in the total cost of production – distorted raw materials should account for more than 17% of the cost of production in total.The agreement will enter into force once the Council and the European Parliament give their final green light, early 2018.New anti-dumping methodologyThe Commission’s proposal on a new anti-dumping methodology (November 2016) – an attempt to comply with WTO rules – proposes to disregard domestic prices and costs when calculating the dumping margin, if ‘significant’ domestic market distortions are found.The agreement reached by the EU institutions early October includes a reference to raw material price distortions, which Cefic welcomed.As the current EU anti-dumping methodology is being challenged by China in WTO, the EU Commission aimed to have the new anti-dumping methodology in place as soon as possible. The methodology entered into force on December 20. The WTO Dispute Settlement Body’s panel is expected to publish its report in the second half of 2018.