5.a. INTA Factfile - iMEP Stockholm 2020

52nd international session of the
MODEL EUROPEAN PARLIAMENT

Stockholm – 7th to 14th March 2020
FACT FILE 5. INTA

Committee Issue:
How should the EU deal with the distributional implications for EU citizens of global trade?
How should the EU deal with social dumping in the union in terms of posted workers and trade
relations with third countries? What remedies should the EU take to safeguard market
competition and sustainable fair international trade?
Brief description of the issue:

As global trade is on the rise, The Committee on International Trade’s (INTA)
responsibility is to address several areas regarding how to ensure fair practices in trade.
Currently, social dumping is a pertinent issue which can be seen in regards to posted
workers and in connection to trade relations with third countries such as China. This is
also where EU citizens are affected by unfair distribution of global trade. In order to
improve the situation, the EU needs to address fair trade policies and (unfair) market
competition.
In order to fully understand this issue it is necessary to have background knowledge on

international trade as well as the functioning of market competition and markets in
general. For further information on this, please consult the preparation module’s
subheading “Basic concepts: An introduction to market competition and distributional
trade”.
Key terms:
- Social dumping: Whilst social dumping does not have a fixed definition due to the
fact that it varies according to the sector and situation, in general, it is used to
describe situations when, for example, a company relocates to a different country
with lower wage costs.
- Posted workers: an employee who is sent by his company to carry out a service
in another EU Member State on a temporary basis.
- Fair trade: Trade between companies in developed countries and producers in

developing countries in which fair prices are paid to the producers.
- (Digital) single market: A group of countries who trade with each other without
any restrictions or tariffs.
- Protectionism: The practise of shielding a country’s domestic industries from
foreign competition by taxing imports
Main stakeholders:
The EU’s agenda on fair trade has its main focus on fair pricing. The EU trade policy
states states the importance of equitable prices in imports through trade regulations as
a defence instrument to protect the single market and EU-producers. However, the EU
has implemented some social elements to its trade operations through strategy papers
(Trade for all, 2015). Furthermore, The EU proclaims that it uses the trade policy to
promote human rights, social and safety standards, respect for the environment and
sustainable development.
There are over 2 million posted workers in the EU, and the number grew by 41.3%
between 2010 and 2015. Posted workers do not occupy a large share of the average
EU-work force with a total of 0.9%. Sector wise, 35.9% of total postings are
concentrated in the construction sector. The EU average of posted workers delivering a
service in another country is less than 4 months. On average, workers tend to be posted
1.9 times per year. However, the average duration of postings from some countries can
be as long as over 8 months.
The concentration of posted workers is especially high in Luxembourg, Belgium and

Austria, from a receiving perspective, and in Luxembourg, Slovenia, Slovakia, Croatia,
Portugal and Poland from a sending perspective. More than 50% of postings take place
between neighbouring countries; the percentage of postings coming from neighbouring

countries can be as high as 80% in some cases.
Measures already in place:
Competition laws: The EU has implemented several laws regarding competition such as
Article 102 TFEU regarding Abuse of dominant market positions, Regulation (EC) No
139/2004 on merger control procedure, Article 107 TFEU on Prohibition on aid for state
participation in undertakings insofar as preferential treatment.
Social dumping:
the European Parliament resolution of 14 September 2016 on social dumping in the
European Union (2015/2255(INI)) has passed. The resolution includes suggestions for
increased social legislation to eliminate unfair trade practices, effectivizing national
control bodies through crossborder work, and the need for a pillar on social rights.
On 4 December 2017, the Council approved new rules to help protect the EU against
unfair trade practices. They will enter into force by 20 December 2017. This new anti-
dumping methodology will identify and redress cases where prices of imported products
are artificially lowered due to state intervention as regulated in (EU) 2016/1036 and
(EU) 2016/1037.
Fair trade:
There are no EU-bodies for fair trade. However, The World Fair Trade Organization-
Europe (WFTO-Europe) is the European branch of WFTO (global), the worldwide
network of Fair Trade organisations exists. The European Fair Trade Association
(EFTA) does also operate in the same area, however without formal connection to the
EU as a body.
Statistical information:
Graph 1: EU-Commission statistics on posted workers per country1
1
http://www.europarl.europa.eu/infographic/posted-workers/index_en.html#overview

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52nd international session of the

MODEL EUROPEAN PARLIAMENT

FACT FILE 5. INTA

Brief description of the issue:

In order to fully understand this issue it is necessary to have background knowledge on

- Fair trade: Trade between companies in developed countries and producers in

The concentration of posted workers is especially high in Luxembourg, Belgium and

between neighbouring countries; the percentage of postings coming from neighbouring

Measures already in place:

Graph 1: EU-Commission statistics on posted workers per country1

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