A New Tool Comes into Force Allowing the EU to Resist Economic Coercion

A new Regulation has come into effect, providing the EU with means to deter and counter economic coercion, thus better protecting its own interests and those of its member states on the global stage.
This tool is primarily designed to act as a deterrent against economic coercion. However, when coercion does occur, the tool provides a basis for a well-balanced response to stop the coercion. When a country refuses to lift the coercion, the tool provides the EU with a wide range of possible countermeasures. These include imposing tariffs, restrictions on trade in services and trade-related aspects of intellectual property rights, as well as restrictions on access to foreign direct investments and public procurement.
The Regulation provides a legal framework for addressing coercion and defines the means for the EU to investigate and make decisions. It includes timelines and procedures for interested parties affected by coercion to communicate with the Commission and participate in relevant consultations before countermeasures are taken. Additionally, the Regulation includes a framework for the EU to request third countries to compensate for the damage caused by their economic coercion.
The EU will continue to work with like-minded partners and allies to address economic coercion, and this Regulation is an important addition to international efforts in this area.
The EU and its member states have become targets of deliberate economic pressures in recent years. The European Commission proposed this Regulation in 2021 as a specific tool to address economic coercion within the framework of its new trade strategy. Economic coercion is defined as a situation where a third country attempts to pressure the EU or a member state to make a specific choice by applying or threatening to apply measures that negatively affect the EU’s or a member state’s trade or investments. A wide range of coercive practices can trigger this tool.
When considering whether to activate this tool, the European Commission will take into account observations from interested parties or appropriate countermeasures in individual cases, while businesses are encouraged to submit relevant information. Furthermore, a single point of contact has been created to contribute to the operation of this specific tool. Any interested party can confidentially submit information related to cases of economic coercion or the general application of the Regulation using the single point of contact.
The Regulation and any action that may be taken must be consistent with the EU’s international obligations and the international law. In addition to this tool, various other tools are being established to strengthen the