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The new trade policy tool is intended to discourage economic pressure. It will also enable the Union to fight and respond to such pressure with its own means.
On Tuesday, Parliament approved a new trade instrument that will allow the Union - as a last resort and in accordance with international law - to react if it or its Member States become the target of economic blackmail by a foreign state seeking to influence its particular policy or position. It was adopted by 578 votes (24 against and 19 abstentions).
Aim instruments against economic pressure is to protect the sovereignty of the EU and its Member States in a geopolitical environment in which trade and investment are increasingly used as weapons by foreign powers.
What is the economic pressure?
Under the new rules, economic pressure occurs when a non-EU country tries to put pressure on the EU or an EU Member State in an attempt to force them to take a certain action. It uses or threatens to use trade or investment measures to do so. Such actions undermine the EU's strategic autonomy. However, the WTO Agreement does not regulate them and the WTO dispute settlement mechanism does not directly cover economic pressure. In order for it to apply to economic pressure, the conduct in question would have to directly violate some of the WTO rules.
Under the new rules, the Commission will have four months to investigate possible coercion. The Council, acting by qualified majority and within eight to ten weeks, will decide whether there is indeed coercion, based on the Commission's findings. In principle, the Union will first seek to engage in dialogue with the authorities of the State concerned and to persuade them to abandon the coercion. If it fails, it will be able to resort to a range of countermeasures. Once pressure has been established and with the agreement of the Member States, the Commission will have six months to prepare an appropriate response, which it will keep Parliament and the Council informed.
Possible countermeasures
MEPs stressed the dissuasive nature of the instrument and included an extensive list of measures that the Union may use in the case. These include restrictions on trade in goods and services, intellectual property rights and foreign direct investment, restrictions on access to the EU public procurement or capital market and restrictions on products subject to chemical and hygiene regulations.
Repairing the damage
Under the new rule, the Union can seek "redress" from a state that has put pressure on it. In addition, the Commission can take other measures to enforce the redress.
Statement by the rapporteur
Bernd Lange (S&D, DE), rapporteur and chairman of the Committee on International Trade, said: "This instrument allows a rapid response against coercive measures and pressure from other countries. We have introduced clear deadlines and definitions of what constitutes coercive measures and how to respond to them. We now have a wide range of countermeasures at our disposal and we have filled our toolbox with defensive tools. This instrument against coercion should act as a deterrent, but at the same time we will be able to take measures to defend the sovereignty of the European Union if necessary."
Next procedure
Once the Regulation is formally adopted by the Council - expected in October - it will take effect twenty days after its publication in the Official Journal.
Background
The Commission proposed this mechanism in December 2021, following a request from the European Parliament and in response to economic pressure from the US during the Trump administration and numerous confrontations between the EU and China. It complements a series of trade defence instruments adopted in recent years. The EU initiative was followed this May by a similar initiative by the G7 leaders, who announced Launching a coordination platform to fight economic pressure.
(EP/US Press Centre)
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