Members' Research Service By / March 14, 2022

Proposed anti-coercion instrument [EU Legislation in Progress]

The Commission defines economic coercion as: ‘interfering with the legitimate sovereign choices of the Union or a Member State by seeking to prevent or obtain the cessation, modification or adoption of a particular act by the Union or a Member State – by applying or threatening to apply measures affecting trade or investment’.

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Written by Marcin Szczepański.

It is widely held that geopolitical tensions in the world are on the rise. One of the clear indicators of this phenomenon is the increasing use of economic tools for the pursuit of strategic and geopolitical aims. This can take the form of coercion exerted by one country on another through trade or investment restrictions to interfere with their sovereign choices. In response to the EU and its Member States becoming the target of deliberate economic coercion in recent years, on 8 December 2021 the Commission published a proposal for the adoption of an anti-coercion instrument (ACI) that would allow the EU to better respond to such challenges on a global scale.

While the new framework is primarily designed to deter economic coercive action through dialogue and engagement, it also allows – as a last resort – to retaliate with countermeasures comprising a wide range of trade, investment and funding restrictions. While there is broad support for creating a legislative tool to address the growing problem of economic coercion, opinions are divided as regards the severity of countermeasures and the manner of establishing when they should kick in.

Within the European Parliament, the file has been assigned to the Committee on International Trade (INTA). A draft report is expected to be published in April.

Versions

Proposal for a Regulation of the European Parliament and of the Council on the protection of the Union and its Member States from economic coercion by third countries
Committee responsible:International Trade (INTA)COM(2021) 775
8.12.2021
Rapporteur:Bernd Lange (S&D, Germany)2021/0406(COD)
Shadow rapporteurs:Anna-Michelle Asimakopoulou (EPP, Greece); Marie-Pierre Vedrenne (Renew, France); Reinhard Bütikofer (Greens/EFA, Germany); Roman Haider (ID, Germany);
Michiel Hoogeveen (ERC, Belgium);
Helmut Scholz (The Left, Germany).
Ordinary legislative procedure (COD)
(Parliament and Council on equal footing – formerly ‘co-decision’)
Next steps expected: Publication of draft report

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