Trade: Council agrees negotiating position on economic anti-coercion rules

F.P. Report

BRUSSELS: Member states agreed today their negotiating position (mandate) on a regulation on the protection of the Union and its member states from economic coercion by third countries (Anti-Coercion Instrument – ACI). This will be a new instrument in the EU’s toolbox of autonomous instruments with the aim of deterring third countries from targeting the EU and its member states with deliberate economic coercion. The instrument will allow the EU to defend itself better on the global stage through a large variety of response measures.

“This new tool will serve as a deterrent and will counteract economic coercion by third countries in a time of rising geopolitical tensions. The EU and its Member States have become in recent years the target of deliberate economic pressure exercised by non-EU countries through measures affecting trade and investment. The EU has the right to defend itself better on the global stage when becoming a target of economic intimidation.”

Jozef Síkela, Minister of Industry and Trade of the Czech Republic

In this mandate, the Council seeks an enhanced involvement in the decision-making process by conferring implementing powers to itself to determine what constitutes economic coercion. The European Commission will retain implementing powers in decisions on the EU’s response measures while ensuring increased involvement of member states in these decisions.

Defence of the EU’s interest

Among the measures that could be applied to the third country as a response to economic coercion are imposition of trade restrictions, for example in the form of increased customs duties, import or export licences, or restrictions in the field of services, public procurement or foreign direct investment. These measures would be applied without a retroactive character and respecting the proportionality with regards to the damage caused.

The anti-coercion instrument is designed to de-escalate and induce discontinuation of specific coercive measures through dialogue as a first step. Any countermeasures taken by the EU would be applied only as a last resort when there is no other way to address economic intimidation.

Background

The European Commission proposed this legislation on 8 December 2021, at the request of the Council and the European Parliament.

The European Parliament’s Committee on International Trade (INTA) adopted amendments to the proposal on 10 October and the plenary confirmed the Parliament’s negotiating mandate on 19 October and requested that negotiations begin ‘immediately’.

Next steps

The regulation now has to be agreed between the Council and the European Parliament under the ordinary legislative procedure. Once the regulation is officially adopted by both institutions, it will enter into force 20 days after its publication in the Official Journal of the EU.