Next to his many professional and academic achievements, Horst Günter Krenzler left his foot print also in the political world. He co-founded the European Liberal Democrat Party (ELDR)—renamed in 2012 Alliance of Liberals and Democrats for Europe Party (ALDE)—and the European branch of the German Free Democratic Party (Auslandsgruppe Europa der FDP—AGE) in 1969. Being the latter’s first President since 1975, his advice on European integration matters was sought by the party and often heard. Still a long time after retirement as Director-General in the European Commission, Krenzler attended the Federal Expert Committee on Foreign Policy of the German liberals on behalf of AGE. The present author had the privilege to accompany him for several years at bi-annual meetings in Berlin, as representative of the Brussels-based German liberals. I remember with great admiration the thoughtfulness of his interventions in the Committee: whenever he took the floor, the other members recognised the great insight and logic of his positions, making it hard to contradict or even outvote his proposals. He brought the European political context into the debate and kept his passionate plea for more integration. As long as he was active, Krenzler’s authority guaranteed that the FDP would remain the most Europe-friendly party in Germany.

When he left us in July 2012, I was assigned the impossible task to replace him in the FDP Committee. As the leader of the delegation of German Members of the European Parliament (MEPs), Alexander Graf Lambsdorff, noted in his obituary for the party journal, Krenzler liked to cite Goethe as much as Adam Smith.¹ I am afraid that I cannot live up to this great humanist standard. However, I dare to intervene on matters of European policy in the great tradition of Krenzler. One of the topics, for sure, is the EU’s trade policy, one of his old loves. The field, however, produces in itself a wide array of interesting legal questions.² Hence, for the purpose of this Gedächtnisschrift, I chose to write about a rather specialised sub-set, namely the modernisation of the trade defence instruments. I hope that going at the same time into the politics and the technical details of this topic would have pleased the great European liberal, Horst Günter Krenzler.

When Commissioner De Gucht assumed office as the EU’s Trade Commissioner in February 2010, he received a mission statement from President Barroso. It contained a number of tasks, such as furthering the negotiations in the Doha Round, and bringing about deep and comprehensive free trade agreements (DCFTAs) bilaterally.³ Interestingly, Barroso also expected De Gucht to modernise the EU’s trade defence instruments (TDI). The Belgian liberal looked at this idea with some caution for a variety of reasons. First, the appetite for a TDI reform was not great among industry, trade associations, Member States and the European Parliament. In the January 2010 parliamentary hearing preceding his nomination, De Gucht was certainly not pressed to deliver such a reform early in his mandate. On the relevant question, he replied that the operation of TDI should be reviewed after the conclusion of the Doha Round. Moreover, many stakeholders had strong and mostly negative memories of the Commission Green paper issued in December 2006.⁴ That reform proposal had soon got stuck in the Council as it was conceived as favouring import interests over producing interests.⁵ Second, under the new Article 207 (2) TFEU of the Lisbon Treaty, any legislative change to basic trade rules fell hitherto into the ordinary legislative procedure. Starting one’s work with the Parliament on such a controversial topic would not seem advisable. Third, as in many other policy fields, the gaining of practical experience with the implementation of the existing rules would give a better clue where a modernisation would make sense. Against that backdrop, the Commissioner decided to first build trust with the Parliament and Council through an even-handed application of the present rules. He thus wished to correct the image sometimes attributed to Commission practice under his predecessor Lord Mandelson (not counting the short interval with Lady Ashton and Mrs. Ferrero-Waldner at the helm of DG Trade) that TDI decisions in the European Union had become increasingly politicised.⁶

Accordingly, the years 2010–2013 were characterised by a steady handling of the incoming cases, where the Commissioner followed in almost all cases the proposals from the case-handlers, exercising political scrutiny mostly with respect to some very old cases. Noteworthy was, in this respect, his decision to terminate an expiry review on imports of Chinese lighters—against strong pressure from the French producer, BIC, to carry on the protection despite record profits of the company in the sector. The measures then expired.⁷ De Gucht equally resisted pressure from huge import and downstream industry interests in the solar panel case. Here, despite a large number of opposing Member States led by Germany, he decided to impose provisional anti-dumping duties on Chinese solar panels in early June 2013.⁸ Based on a Chinese offer for an undertaking presented in August, he was then able to lift the duties for those companies who respected a minimum export price within a certain numerical ceiling. That solution was accepted by the Council when imposing definitive measures in December that year.⁹ In addition, there was no generous use of the Union interest test under Article 21 of the Basic Regulation¹⁰ to strike cases down altogether. For example, De Gucht imposed provisional measures on consumer goods such as ceramic tableware¹¹ (the Council also confirmed this at definitive stage with a lower duty based on a revised Commission proposal)¹² even if this meant higher prices for consumers. Only in the Termphos case, concerning the import of white phosphorus from Kazakhstan, did he terminate the case on Union interest grounds.¹³ In that case, an overwhelming majority of Member States had already voted against provisional measures in the Anti-Dumping Committee, because they would have been clearly disproportionate for the users in a number of East European member States, whereas the sole EU producer in the Netherlands had already become bankrupt. Finally, De Gucht was absolutely neutral when it came to judging the origin of the alleged unfair practices. He did away with an informal moratorium not to bring anti-subsidy cases against China. Starting with the coated fine paper case in May 2011,¹⁴ a number of subsidy cases against Beijing were accepted under his reign. Similarly, the United States could not expect special treatment, as witnessed by the decision to countervail US bioethanol exports¹⁵ which was highly criticised on the other side of the Atlantic.

Finally, on the procedural side, Commissioner De Gucht revisited the role of the Hearing Officer in DG Trade. That post had been created in 2007 to facilitate communication between interested parties and Commission services in trade proceedings, and to offer mediation—on procedural issues—between interested parties and Directorate-General for Trade.¹⁶ However, in administrative terms, he had been attached to the Director-General. In order to strengthen his independence and weight, Commissioner De Gucht decided to bring the Hearing Officer under the auspices of his Cabinet.

After roughly 2 years preparatory work, including an evaluation study, a public consultation of stakeholders and an impact assessment of different options, the Commission presented its modernisation package on 10 April 2013. It consisted of a Communication,¹⁷ a legislative proposal to amend the two Basic Regulations,¹⁸ and a DG Trade working paper with a set of four draft guidelines to clarify existing practice with respect to the choice of the analogue country, injury margin, expiry review and length of measures and Union interest.¹⁹

The Communication explained the rationale for modernisation by pointing to a number of economic challenges that have occurred since the last codification of the basic rules roughly 20 years ago. There was a need to respond to the growing practice of State-capitalist countries to distort international trade by way of subsidies, distortion of raw material prices by way of state interferences and the threat of retaliation. At the same time, the foreseeability and legal security for importers could be improved by procedural means. The basic idea behind this was to provide for a pragmatic, modest change of the rules which would be balanced and offer interest for both the EU industry (and Member States with predominant producer interests) and importers (and Member States with predominant trading interests).²⁰

In the legislative proposals, these political ideas were put into draft legal language. As both Basic Regulations have many provisions in common, the proposed changes concerned, as a rule, both instruments. The main elements thereof were grouped under five sections, namely transparency and predictability, fight against retaliation, effectiveness and enforcement, optimising review practice and codification.