The European Union on Tuesday agreed to create a common European instrument aimed at punishing any country that uses economic sanctions to put pressure on one of its members, such as China is currently using against Lithuania.
After more than a year of negotiations, MEPs and the Twenty-Seven have agreed on legislation giving the EU new weapons to respond to economic threats from foreign governments.
Entry into force is expected this autumn after formal approval by the Council of the EU and the European Parliament.
As a deterrent, the EU can use different types of retaliation: freezing access to public markets, blocking market authorizations for certain products, blocking investments, etc.
This will be the last resort after all mediation options have been exhausted, as direct dialogue with the state accused of economic blackmail is preferred.
EU Trade Commissioner Valdis Dombrovskis welcomed “a big step forward for the EU”. This new tool “will allow us to defend our legitimate rights and interests with greater confidence,” he said.
“It is another instrument at the service of our strategy for a less naïve European trade,” said French Foreign Trade Minister Olivier Becht.
These new weapons could be used in a conflict like the current one between Lithuania and China.
The Baltic country has accused Beijing of blocking its exports in protest at the opening of a Taiwanese diplomatic mission in Vilnius in July. China considers Taiwan part of its territory. For the time being, the EU has raised disputes within the World Trade Organization (WTO).
“Above all deterrent effect”
The new European “anti-coercion” tool is a strengthening of EU trade policy, justified by the context of rising geopolitical tensions between the United States on the one hand and China and Russia on the other.
“It’s a new business tool, for a new era (…), above all it will have a deterrent effect (…), it gives us the strength to fight back in extreme cases,” he congratulates Greek MEP Anna -Michelle Asimakopoulou (EPP, right).
Europe, victim of its divisions, still struggles to use its economic clout to assert itself on the world stage. Decision-making about European foreign policy requires unanimity among the 27 member states. This rule limits Europe’s ability to react in the event of a crisis, as each country tends to defend its own interests.
The new instrument will give more powers to the European Commission, while Member States will remain in control of the whole process. This separation of powers was one of the most hotly debated points, with some states reluctant to give up the right to veto the measures.
Specifically, after dealing with a case, the Commission has a maximum of four months to assess whether coercion or not. This decision must be adopted by the Council of the EU within two months by a qualified majority – with the support of at least 55% of the member states. [c’est-à-dire 15 États] representing at least 65% of the EU population – which will make it possible to circumvent the opposition of a minority of countries.
In the case of a green light, an indefinite arbitration phase will then begin, during which the Commission will attempt to persuade the offending state to end the contested measures.
Should no agreement be reached, the Commission will propose the most appropriate countermeasures from its new arsenal. To take action against this, Member States must reach a qualified majority against the proposal.