BRUSSELS, Dec 8, Reuters - The European Commission set out plans on Wednesday to retaliate against countries that put economic pressure on EU members to change their policies, while stressing the main purpose was deterrent.
The proposal is intended to counter an increase in geopolitical tensions into trade. The administration of former U.S. president Donald Trump and China accused the EU of using trade as a political tool.
Trade is increasingly being weaponised as the EU and its member states become targets of economic intimidation, as a result of rising geopolitical tensions. The tools needed to respond are what the European Commissioner for Trade Valdis Dombrovskis said in a statement.
With this proposal, we are sending a clear message that the EU will stand firm in defending its interests. The Commission would need to determine whether a third country's economic measure was designed to coerce the EU or one of its members to change policy after hearing a complaint.
After letting Taiwan set up a de facto embassy there, Lithuania is facing economic pressure.
China has downgraded diplomatic relations with the small Baltic state and officials there say Beijing has also imposed blocks https: www.reuters. com world lithuania-urges europe-increase pacific ties-face chinese-coercion - 2021 -- 11 -- 24 on its exports and pressured companies in third countries not to do business with it.
After establishing economic coercion, the Commission would try to negotiate with the third country or seek mediation or cooperation from other partners before taking action.
The Commission would have a wide range of counter-measures at its disposal, including tariffs on goods or services, withholding EU funding or restrictions on access to EU procurement tenders or research programmes.
The counter-measures should be proportionate and designed to lead to the third country halting its initial measures and to cause the least damage to the EU economy.
The proposal needs to be approved by the European Parliament and EU governments, some of whom are skeptical about it: https:www.reuters.com. com business eu-plan anti-coercion trade-measure faces-scepticism -- 2021 -- 12 -- 07 about a measure they see as potentially protectionist and prone to lead the bloc into trade wars.
It would add to an armoury of trade measures that include screening of foreign investment, restrictions on firms benefiting foreign subsidies and curbs on public procurement for businesses in countries that don't open up their markets.