BRUSSELS, Dec 7, Reuters - The European Commission will propose a new trade defence measure that will combat non-European Union countries, which have too much pressure on any of the bloc's members, but the plan already faces scepticism in Brussels.
If in force today, the new measure could be deployed in the form of trade or investment restrictions on China over the pressure that it is exerting on Lithuania after it allowed Taiwan to open a de facto embassy there, according to diplomats familiar with the proposal.
China downgraded diplomatic relations with Lithuania and officials in Vilnius say Beijing has also imposed blocks https: www.reuters. com world lithuania-urges europe-increased indo-pacific ties-face chinese-coercion -- 2021 -- 11 -- 24 on its exports and pressured companies in third countries not to do business with the small Baltic state.
Greens lawmakers Reinhard Buetikofer said that if proof was needed to prove that the EU needed an effective instrument to protect itself against economic coercion from third countries, China's blackmailing pressure on Lithuania has now provided it.
Buetikofer, who is currently subject to Chinese sanctions, said that for the Commission proposal to be effective, it must not allow only one EU country to block action, pointing out Hungary's closer ties with Beijing and previous use of a veto.
The proposal, which will need to be approved by the European Parliament and the group of EU countries called the Council, has already sparked concerns among some member states.
"We can expect intensive discussions," a EU diplomat said.
France, which will hold the rotating EU presidency in the first half of 2022, supports the measure, but more free market-oriented states, such as Sweden and the Czech Republic, regard it as potentially protectionist and liable to draw the EU into trade wars.
Economic coercion should be defined very clearly, and measures should only be taken if it is in the EU's interest to act.
Some EU member states say they will need to have a say in the deployment of such measures, rather than leave decisions to the EU executive. In foreign policy, governments have a veto power.
One EU diplomat said that we need to be very attentive to how broad the measure is.
When the proposal becomes law, it would add to an arsenal of EU measures that include screening foreign investment, limits on firms benefiting from foreign subsidies, and restrictions on public procurement for businesses in countries that don't open up their markets.