EU unveils trade sanctions plan to tackle foreign coercion :: WRAL.com

– The European Union decided on Wednesday to put in place a system of swift trade sanctions that it could impose on any foreign power, such as China, which it accuses of trying to coerce the bloc of 27 countries for economic purposes or policies.

The executive branch of the EU, the European Commission, manages trade with the outside world on behalf of the member countries. He asks for their permission to react without needing the approval of the 27 when a person, company or country tries to strengthen the bloc. He could face a refusal from some EU countries to give too much power to the commission.

The commission said it might be possible to use such a system in China’s feud with Lithuania, whose ties to Taiwan have prompted Beijing to degrade diplomatic relations with the EU member. Lithuania says its commercial shipments are no longer cleared by Chinese customs.

China and Taiwan split in a civil war in 1949, and Beijing threatens to use force to bring the island under its control.

“China is restricting trade with Lithuania,” Executive Vice President Valdis Dombrovskis said when unveiling the plan. “Obviously, there might be a reason to assess whether this constitutes economic coercion and, therefore, whether this instrument would be applicable. “

“Unity and solidarity within the EU remain essential to defend our interests and values,” Dombrovskis told reporters. “The EU is ready to stand up against all types of political pressure and coercive measures applied against any member state. “

The new system would give the commission the power to impose punitive tariffs, quotas or even limit access to EU markets to deter countries from trying to restrict trade or investment to force a change in market. EU policy.

The commission said it needed additional powers to protect EU interests because “the recent rise in geopolitical tensions, weakening international cooperation and increasingly armed trade and investment have triggered increased use of economic coercion “.

He argues that without such capacity, the EU will fall back on its usual use of diplomatic pressure, which is much slower and requires the agreement of the 27 member countries.

As part of the plan, Brussels would investigate whether a trade or economic act constitutes coercion, contact the country exercising the coercion to try to resolve the problem, and then take countermeasures if no solution is found. Such an action would probably still take months, rather than weeks.

Commission officials are reluctant to say what could trigger the ‘anti-coercion instrument’, but say it would not be used for something like the Trump administration’s 2018 decision to impose tariffs on steel and aluminum to the EU because its products were considered a threat to US national security.

The commission believes it had sufficient recourse to the World Trade Organization and was able to impose counter duties on motorcycles, bourbon, peanut butter and jeans made in the United States, among others.

The system is likely to take months to be approved, if at all. EU member countries, some of which – like Hungary and Poland – have complained about the committee’s overpowering, and the European Parliament must now formulate its positions and negotiate with the committee.

The chairman of the European Assembly’s trade committee, Bernd Lange, welcomed the plan.

“The EU faces geopolitical realities: the last few months and years have illustrated how trade policy is increasingly used as a political weapon. There is a gap in our toolbox that others can exploit, ”he warned.

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