Brussels, 6 June 2023
The European Parliament and the Council have today reached a final political agreement on the Anti-Coercion Instrument (ACI). This new tool will enable the EU to respond to economic coercion, and therefore to better defend its interests and those of its Member States on the global stage.
The ACI is first and foremost designed to act as a deterrent against any potential economic coercion. If economic coercion nevertheless takes place, the ACI provides a structure to get the third country to stop the coercive measures, through dialogue and engagement. However, if engagement fails, it also gives the EU access to a wide range of possible countermeasures against a coercing country. These include the imposition of tariffs, restrictions on trade in services, and restrictions on access to foreign direct investment or public procurement.
The agreement reached today includes a legal framework for the EU to request that the third country repair the injury caused by its economic coercion. It also covers decision-making arrangements, in particular the Council’s role in determining whether the EU or a Member State is the target of economic coercion, as well as timeframes for EU action under the instrument.
The EU will continue to cooperate with like-minded partners and allies to address economic coercion, and the ACI is a significant addition to international efforts in this domain.
Next Steps
The European Parliament and the Council will have to complete the procedures for approval of the new Regulation before it can enter into force. Entry into force is expected in the autumn of this year.
Background
The EU and its Member States have become the target of deliberate economic pressure in recent years. The European Commission proposed the ACI in 2021 as part of its new trade strategy, as a new dedicated tool to address economic coercion – defined as a situation where a third country attempts to pressure the EU or a Member State into making a particular choice by applying, or threatening to apply, measures affecting trade or investment against the EU or a Member State. The instrument can be triggered by a wide range of coercive practices.
The European Commission will rely on input from stakeholders when considering the activation of the instrument, and businesses are encouraged to come forward with relevant information.
The ACI and any actions which can be taken under the instrument are consistent with the EU’s international obligations and fully grounded in international law. The European Commission will soon present the European economic security strategy, envisaged for 20 June 2023.
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Quote(s)
This final agreement on our new Anti-Coercion Instrument is truly a major step forward for the EU. It sends a clear signal to our global partners that we reject all forms of economic coercion by third countries. It will allow us to be more assertive in defending our legitimate rights and interests. The ACI provides an important building block for the EU’s economic security and its Member States. We will only use it when we need to ensure that our policy decisions remain free from interference by third countries. I am delighted that we will soon have this crucial tool in place.
Source – EU Commission
Anti-coercion: deal on new trade tool to protect EU from economic blackmail
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Negotiation breakthrough achieved at previous trilogue now confirmed and deal finalised
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MEPs ensure deterrence effect and flexibility for the EU response
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Reparation of injury caused by coercion now covered
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Timelines added to ensure legal certainty and swift response
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Democratic scrutiny strengthened at all stages
MEPs and Council negotiators agree on setting up a new tool to safeguard the EU’s interests and respond to countries seeking to coerce the Union or member states.
During the fourth and final trilogue with EU governments and the Commission on the proposed anti-coercion instrument, EP negotiators on Tuesday morning confirmed with Council their improvements to the new draft law. They managed to strengthen its deterrent nature by having a full list of possible responses in the Annex. In addition, timelines for the whole procedure and, in particular, for adopting a response to a non-EU country’s attempt to coerce, were added upon request of the EP to ensure that the instrument is applied in a swift manner.
Bernd Lange (S&D, DE), rapporteur and Chair of the Committee on International Trade, said after the final trilogue: “This is a big step forward for the EU, to stand up against economic blackmail. We do not know exactly what future coercion will look like, but we know how the EU can respond: swiftly, seriously, and speaking with one voice. Taking countermeasures is a last resort, but if necessary we are ready to assert European sovereignty from a full arsenal of measures. It is now time for this regulation to enter into force and the EU to continue taking the lead globally with like-minded partners.”
Uphold the European Union’s interest
The new tool is designed to protect the EU’s strategic and economic interests. It will enable the EU to respond, in line with international law, if it or a member state experiences economic blackmail by a non-EU country trying to influence a particular policy choice or stance, such as parliamentary resolutions. The primary goal of the new instrument is to dissuade non-EU countries from attempting to coerce or to get them to halt coercion, including threats, and avoid escalating the conflict. Recently, G7 leaders announced the launch of a coordination platform against economic coercion, echoing the EU’s initiative and confirming its necessity.
MEPs accepted that the Council will decide formally about the existence of coercion based on Commission’s findings, since the exceptional nature of this new instrument justifies it. However, democratic controls were introduced by the EP at every stage, on the content and on the process. The EP also managed to keep a broad list of possible EU responses as part of the new tool, stressing that its use must be a last resort, without excluding other avenues, including direct negotiations with the coercing country and cooperation with other countries coerced.
Repair the injury
Parliament’s negotiators obtained an extension to the scope of the proposed legislation to include measures to repair the injury caused by coercion, where so requested.
Binding deadlines
MEPs also introduced deadlines for determining whether coercion has occurred and for adopting a response to it, to make sure the procedure is nimble enough to avoid administrative delays and to ensure legal certainly for operators.
Democratic scrutiny
Parliament also strengthened the democratic scrutiny of the new tool’s application, ensuring that MEPs will be kept informed together with the Council at all relevant stages, from the examination of a case to the continuous review of the EU measures. A contact point in the Commission will ensure coordination and transparency and the new concepts introduced by this instrument have been defined.
Next steps
With the final text now endorsed by the negotiators from both sides, the informal agreement will have to be formally approved by Parliament and Council (member states) before it can enter into force. The vote is foreseen in INTA at its next meeting at the end of June.
Background
The Commission published its proposal about the anti-coercion instrument on 8 December 2021, upon the request of the Parliament and the Council. The new deterrent fills a gap in the EU toolkit to deal with countries trying to restrict trade or investment in order to force a change in various EU policies.
Parliament denounced in several resolutions the People’s Republic of China’s economic coercion of Lithuania in response to a Lithuanian policy decision, among others, in January, February and September 2022.
Further information