As part of the agreement, the Commission committed to developing the EU’s anti-coercion mechanism swiftly.
The changes agreed will empower the European Union to protect its trade interests despite the paralysis of the multilateral dispute settlement system in the World Trade Organization (WTO). The Commission will also be able to act if similar problems arise in bilateral agreements.
The final agreement between the co-legislators also expands the scope of the regulation and of possible trade policy measures to services and certain trade-related aspects of intellectual property rights (IPR). This will further strengthen the Union's arsenal in enforcing its rights by allowing it to adopt countermeasures in a broader range of fields.
Commission Executive Vice President and Commissioner for Trade, Valdis Dombrovskis, said: "This agreement sends a strong political signal that the European Union will take action to defend and protect our companies, workers and consumers whenever our partners do not play by the rules. This is a key commitment of our European trade agenda, on which we are now delivering. The agreement expands the EU's ability to defend its interests when a trade dispute is blocked under the WTO or one of our bilateral trade agreements. In addition, it permits countermeasures not just on goods but also on services and certain aspects of Intellectual Property Rights. Our overarching priority to tackle these issues remains a reformed and well-functioning multilateral rulebook with a two stage Dispute Settlement System at its core, but we cannot afford being defenceless in the meantime.”
Further to this political agreement, the European Parliament and the Council will formally adopt the amended regulation with a view to its entry into force as soon as possible.
In line with the Political Guidelines of President von der Leyen, the Commission is further reinforcing the Union's tools to focus on compliance and enforcement of the EU's trade agreements.
Ensuring the respect of the commitments agreed with other trade partners is a key priority of President von der Leyen. The EU is therefore increasing the focus on enforcing its partners' commitments in multilateral, regional and bilateral trade agreements. In so doing the Union will rely on a suite of instruments.
The proposal to amend the existing Enforcement Regulation came as a reaction to the blockage of the operations of the WTO Appellate Body. The current regulation – a basis under EU law for adopting trade countermeasures – requires that a dispute go all the way through the WTO procedures, including the appeal stage, before the Union can react. The lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations and escape a binding ruling by simply appealing a panel report.
The revised Regulation will enable the EU to react even if the WTO has not delivered a final ruling because the other WTO member blocks the dispute procedure by appealing to the non-functioning Appellate Body and by not agreeing to an alternative arbitration under WTO Dispute Settlement Agreement.
This new mechanism will also apply to the dispute settlement provisions included in regional or bilateral trade agreements to which the EU is party if a comparable blockage arises. The EU must be able to respond resolutely in case trade partners hinder effective dispute settlement resolution, for instance, by blocking the composition of panels.
As part of the agreement, the Commission committed to developing the EU's anti-coercion mechanism swiftly. As announced in the Letter of Intent of the President of the European Commission to the President of the European Parliament and President in office of the Council of 16 September 2020 the Commission shall adopt the proposal on the anti-coercion mechanism no later than the end of 2021. The anti-coercion mechanism is also included in the European Commission's 2021 Work Programme.
To further increase the focus on compliance and enforcement of the EU's trade agreements, the Commission has also appointed its first Chief Trade Enforcement Officer in July this year.
For More Information
- Publication date
- 28 October 2020
- Directorate-General for Trade
- Trade topics
- Enforcement and protection