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In recent years, the EU member states have become the target of deliberate economic pressures. The EU-wide anti-coercive instrument ACI, which entered into force at the end of 2023, is aimed at establishing a framework of measures in cases of economic coercion. Additionally, a single point of contact is established to assist in the ACI’s application: any stakeholder may confidentially submit relevant information as regards both the incidents of economic coercion and/or the issues of ACI’s application.
Recent rise of geopolitical tensions, weakened international cooperation and an increase in the “weaponisation of trade and investment”, etc. have triggered economic coercion. Coming from a variety of countries, such coercion threatens to undermine the ability of the EU and its member states to take legitimate action in areas of their own sovereignty. Hence, in order to safeguard rights and interests of its member states, the EU needs an appropriate instrument for deterring and counteracting economic coercion.
Standard diplomatic means may not always be sufficiently effective against economic coercion and, moreover, may not have a deterrent effect. A dedicated instrument also signals to international partners that the EU will not tolerate economic coercion, highlighting the EU’s resilience and contributing to the EU’s open strategic autonomy.
The ACI’s history
The European Commission proposed the ACI in 2021 as part of its new international trade strategy and as a specific tool to address economic coercion.
The “economic coercion” refers to a situation where a third country attempts to pressure the EU or its member state into making a particular choice by applying (or threatening to apply) measures affecting trade and/or investment in the EU and/or the states.
The anti-coercive measures are consistent with the EU’s international obligations and fully grounded in the international law. The EU-wide ACIs’ introduction is becoming important tools in strengthening European economic security and that of the member states. It is also a part of the European economic security strategy presented by the European Commission in June 2023.
There are many types of coercive practice: e.g. an EU trading partner from a third country may try to take future legislative initiatives (or dissuade the EU from putting in place a measure) by introducing (or threatening to introduce) extra, discriminatory import duties, intentional delays or refusing (or threatening to refuse) authorisation needed to do business. The third country partner might also impose discriminatory border or safety checks on goods from a EU member state or organise state-sponsored boycotts against goods or investors from that country.
More in: https://policy.trade.ec.europa.eu/enforcement-and-protection/protecting-against-coercion/qa-regarding-anti-coercion-instrument_en
In preparing the ACI, the European Commission took into account all stakeholders’ opinion in considering the instrument’s application; however, in individual cases, businesses are encouraged to come forward with relevant information, as the instrument can be triggered by a wide range of coercive practices. In this regard, a single point of contact is established to assist in the ACI’s application: any stakeholder may confidentially submit relevant information as regards both the incidents of economic coercion and/or the issues of ACI’s application.
The “single entry point” is the point of contact for all EU stakeholders who are facing potential trade barriers in third countries or who find non-compliance with sustainability rules related to Trade and Sustainable Development program and/or the Generalised Scheme of Preferences.
More on the “single point contact” in: https://trade.ec.europa.eu/access-to-markets/en/content/single-entry-point-0.
The coercion economic measures directed against the European Union and/or a member state may affect any policy field and may take the form of legislation or other formal or informal action or inaction. The instrument and the EU’s policy apply irrespective of the source of the coercion and irrespective of the identity of the third country.
Legislative means
The ACI’s regulation provides a legal framework for responding to coercion and sets down the means for the EU to investigate and take decisions. It includes timeframes and procedures for stakeholders affected by coercion to contact the Commission and hold a stakeholder consultation before taking countermeasures. The ACI likewise provides a framework for the EU to request a third country to repair the injury caused by its economic coercion.
The ACI does not target any particular country: it addresses the problem of economic coercion wherever it may come from; it can be applied to any country using economic coercion against the EU or its member states.
The regulation provides for a series of objective criteria for selection and design of the Union’s response measures. The leading criteria deals with the effectiveness of the measures in obtaining the cessation of the coercion and the reparation of the injury, where requested, as well as the avoidance or minimisation of potential negative economic or other effects on the Union and operators, for instance, on the investment environment or the knowledge economy.
In addition, there are a series of requirements for the measures to comply with, such as taking account of the Union general interest, other Union socio-economic policies and objectives, any relevant action pursuant to the Union’s common foreign and security policy, as well as the avoidance of any interference with administrative decisions based on the evaluation of scientific evidence and avoidance of disproportionate administrative complexity and cost.
On the regulation in: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202302675
More on protective measures against coercion in: https://policy.trade.ec.europa.eu/enforcement-and-protection/protecting-against-coercion_en