A new instrument of anti-economic coercion comes into force this Wednesday in the European Union (EU) with the aim of providing the community bloc with the means to combat economic threats and unfair trade restrictions from third countries, such as China.
In a statement, the community executive reports on the entry into force of this new mechanism, highlighting that the objective is for the EU to “react to economic coercion, thus better defending its interests and those of its Member States on the world stage.”
“The anti-coercion instrument aims, above all, to act as a deterrent to economic coercion. In cases where coercion still exists, the instrument provides a structure that allows you to react in a well-calibrated manner to put an end to coercion,” Brussels highlights.
To respond to these situations, countermeasures can be adopted such as “the imposition of customs duties, restrictions on trade in services and trade-related aspects of intellectual property rights, as well as restrictions on access to foreign direct investment and contracting.” public,” lists The Institution.
This is a regulation, in force as of this Wednesday, that creates a legal framework to respond to coercion and defines the means for the EU to investigate and take decisions, including deadlines and procedures for interested parties affected by coercion to come forward. Contact the European Commission and Consult with interested parties before taking countermeasures.
There is also a framework for the EU to ask a third country to repair the damage caused by its economic coercion.
With the community bloc being the subject of deliberate economic pressures in recent years, the community executive proposed this new instrument in 2021 as part of its new commercial strategy.
Economic coercion occurs when a third country tries to pressure the EU or a Member State to make a certain decision, by applying or threatening to apply measures that affect trade or investment.
The objective of the anti-coercion instrument is to act as a deterrent and allow the community bloc to resolve trade conflicts through negotiations, although countermeasures are foreseen against a non-EU country, such as restrictions related to trade, investment and financing.
An example of this reality were the trade restrictions that China imposed on Lithuania after Vilnius announced in June 2021 an improvement in its trade relations with Taiwan.
Source: TSF
