EU Proposes Tool to Counter Coercive Trade Practices
The European Commission this week proposed a new tool to respond to unfair economic and trade practices, including discriminatory import duties, boycotts and other “coercive practices.” The European Union has increasingly become a “target of deliberate economic pressure in recent years,” the commission said Dec. 8, and the tool could allow it to “better defend itself.”
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“At a time of rising geopolitical tensions, trade is increasingly being weaponized and the EU and its member states [are] becoming targets of economic intimidation,” EU Trade Commissioner Valdis Dombrovskis said. “With this proposal we are sending a clear message that the EU will stand firm in defending its interests.”
If adopted, the EU said it would use the tool to impose countermeasures only “as a last resort.” Those countermeasures include a “broad” range of trade actions, the commission said, including various trade, investment, procurement and funding restrictions. “The new instrument will allow the EU to react swiftly and effectively,” the commission said, “providing a tailor-made and proportional response for each situation from imposing tariffs and restricting imports from the country in question, to restrictions on services or investment or steps to limit the country's access to the EU's internal market.”
The commission said it has received “very positive” feedback from industry, which wants the EU to better deter coercive foreign trade restrictions. “There is a common recognition by stakeholders that economic coercion is increasingly posing a problem for the EU and its member states, which should not be left unaddressed,” the commission said. The European Parliament and the Council of the EU need to approve the proposal.