EUROPE'S system to protect its businesses from unfair trade competition is functioning well, according to an auditors' report published this week.

The European Union has declared itself committed to free trade, on a 'level playing field' – but if European industries suffer as a result of unfair practices by non-EU countries, such as dumping and subsidised imports, it can and will respond with Trade Defence Instruments.

While the main targets of these TDIs have so far been China and Egypt, it may be no coincidence that the EU has chosen to highlight its trade armoury as it prepares for the UK to become a non-EU country.

Looking at this area for the first time, the European Court of Auditors has concluded that the EU has so far been successful in enforcing this trade defence policy, but that there is room to toughen up further, particularly in view of the growing tensions in global trade politics.

Trade defence measures usually take the form of extra duties to compensate for losses suffered by EU industry as a result of unfair practices. In most cases, these defence measures target industrial rather than consumer products.

In general, the auditors recommended that the Commission raise awareness of trade defence instruments, as only a few industries currently use them. Sectors such as steel and chemicals are well acquainted with TDIs, but others – particularly small and medium sized enterprises – are much less familiar with them and may therefore not seek protective measures when experiencing trade distortions.