Deflection of Trade upon Enlargement of the European Union

Nicolaj Kuplewatzky

Journal of International Economic Law, 2015, vol. 18, issue 2, 433-447

Abstract: Enlarging the European Union (EU) permits traders to avoid the exposure to any contingent trade-protection measure without violating the letter of the law under which the protective measure is established. This practice is also known as the ‘deflection of trade’. Not just since the solar panels investigations in 2013, but certainly with heightened attention to the issue, the deflection of trade is yet to be addressed by the European institutions. However, this practice is not solely confined to enlargement of the EU, and, in fact, is likely to resurface before enlargement of any customs union committed to a free circulation of goods and the removal of internal frontiers. In light of this obvious exploitation of the enlargement process, the guiding question for this article will be whether the deflection of trade is a necessary evil for such trade blocs. Looking at both EU and WTO law, this article will analyse whether the necessary tools to tackle the deflection of trade are already present. Ultimately, the author concludes that the EU law doctrine on the abuse of rights is the most appropriate tool to tackle this practice.

Date: 2015
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