Germany and France published a non-paper on Monday 5 October, setting out proposals to strengthen the resilience of European industry and address trade imbalances. These include creating a new instrument that could restrict access to the single market.
The proposals are aimed in particular at tackling unfair competition from China, although the country is never named directly. The document comes amid high-level talks between the European Commission and its Chinese counterparts (see EUROPE 13950/13). The European Parliament is due to debate the issue on Tuesday, ahead of a visit to China by European Commissioner for Trade and Economic Security, Maroš Šefčovič.
“This Franco-German alignment paves the way for major political and legislative action to better withstand the Chinese tsunami”, MEP Pascal Canfin (Renew Europe, French) said on Tuesday. “With the current wave of deindustrialisation, millions of workers are at risk. [...] We must put an end to our vulnerability to China’s unfair practices”, his colleague Madjouline Sbai (the Greens/EFA group, French) told Agence Europe.
France and Germany support creating a new diversification instrument to reduce European dependencies (see EUROPE 13949/33). They also advocate a second instrument to respond when third countries refuse to restore a level playing field despite political or economic pressure.
It should enable “a decisive and systemic reaction (...) regulating access to the single market”. It could include a broad range of corrective trade measures and other tools to “implement tailor-made solutions”, while avoiding any additional administrative burden on EU businesses, the two capitals argue.
Paris and Berlin also call for existing tools to be improved by broadening the approach taken when markets are disrupted. Trade defence instruments currently target specific products. Yet such investigations are “now insufficient in the face of more systemic distortions and the global dominance of third countries on the whole value chain of specific sectors”.
The document also proposes launching ‘ex officio’ measures without waiting for a complaint to be lodged, and calls for more staff and funding to handle cases. Finally, France and Germany call for greater use of existing tools, such as the Anti-Coercion Instrument (ACI), designed to respond to economic pressure exerted for political reasons.
On Monday, the European Commission welcomed the Franco-German non-paper, which “aligns with the work of the European Commission and the President’s clear stance on competitiveness and the approach to trading partners, including China”, said Commission spokesperson, Olof Gill. “The topic will be further discussed” at the European Council meeting on 15 and 16 October, he recalled.
Draft conclusions (https://aeur.eu/f/nrh ) indicate that Member States are expected to invite the Commission to “enhance the EU toolbox to better address these imbalances” at the forthcoming summit. For now, “it is not a proposal for legislation. [The document] could lead either to new legislation or a modernisation of the Anti-Coercion Instrument”, Bernd Lange (S&D, German) told Agence Europe. “But it seems that the Council is now recognising that politics, political pressure and economic development are belonging together”, he concluded.
See the non-paper: https://aeur.eu/f/nrr (Original version in French by Juliette Verdes)