At a virtual meeting of the European Parliament's Committee on International Trade on 25 June, Sabine Weyand, Head of the European Commission's Directorate-General for Trade, gave an overview of the instruments that the Union has at its disposal to combat trade and investment distortions.
The institution is working on several fronts, Weyand said. A level playing field - particularly in the context of the EU's fight against climate change -, reciprocity to ensure that European economic operators have market access conditions equivalent to those allowed by the EU, and finally, trade defence instruments to give the EU “the means to protect ourselves against predatory practices and policies”.
While the Commission's preference is always to beef up international disciplines in the WTO and in free trade agreements, it has to be said that these efforts are not leading to the desired progress. “However, when this is not possible, we have to stand up for our rights more assertively, applying our existing toolbox with determination and creating new tools when necessary”, the Commission said.
A more sophisticated toolbox...
As the first tool, trade defence has been “at the forefront” of support to European industry, in particular for the steel sector (more than a third of the 150 measures), notably thanks to its modernised instruments, which have allowed for faster action, the occasional suspension of the lesser duty rule, the taking into account of social and environmental standards and market distortions induced by subsidies from non-Member States. But the Covid-19 economic crisis has left European companies vulnerable. “We will continue to use our trade defence instruments in a robust fashion to ensure that our economic recovery takes place on a level playing field as far as imports are concerned”, Ms Weyand pledged to the Parliament.
A recent initiative, the procedure launched on 17 June with the publication of the White Paper on foreign subsidies to control Chinese financing on its internal market, also has the ultimate aim of rebalancing the conditions of competition for European companies on the Union market (see EUROPE 12508/1).
Another tool, the trade enforcement regulation, debated the same day in Parliament, must see its revision completed as soon as possible in order to be rapidly operational and to avoid paralysis of the WTO Appellate Body, urged Ms Weyand (see EUROPE 12495/17, 12490/26, 12464/2).
As for the International Procurement Instrument ('IPI'), work has resumed in the EU Council in recent months to identify landing zones (in particular on measures, determination of origin, surveys, consultations and definitions, on the basis of a working document seen by EUROPE), and finally to adopt a common position in the EU Council (see EUROPE 12386/10). The German Presidency could launch interinstitutional negotiations on this subject, Mrs Weyand hopes.
Finally, the time has not yet come to review and consolidate the screening mechanism for foreign investment, replied Ms Weyand to Marie-Pierre Vedrenne (Renew Europe, France). “We have seen a sea of change in the attitude of Member States”, she said, but it is necessary to see how the mechanism works before considering improvements, she added.
Furthermore, in order to resist an increasing recourse to coercive action by certain non-Member States, “these instruments don’t suffice”, admitted Mrs Weyand, for whom “the creation of a dedicated EU legal instrument for dissuading or offsetting such coercive actions could be warranted”. “We stand ready to examine this matter in detail and to come up with a conclusion within a year of the adoption of the current provisions of the enforcement regulation”, she told MEPs (see EUROPE 12495/17).
...that you need to use
MEPs have supported the European Commission in these initiatives, but have at times been sceptical about the Commission's political will to make use of these instruments. “We also need political courage” to use them, urged Kathleen Van Brempt (S&D, Belgium), who was joined by Marco Campomenosi (ID, Italy). (Original version in French by Hermine Donceel)