EU Agrees on Anti-Coercion Instrument

The European Commission and European Parliament’s Committee on International Trade have agreed on an anti-coercion instrument (ACI) which will enable public procurement measures, import tariffs and trade restrictions to be placed against third countries who apply economic pressure or bidding coercion on member states.

The legislation was first proposed in December 2021 by the European Commission after clashes with China over trade sanctions placed against Lithuania and sanctions placed against EU academics and researchers. The US too had threatened punitive tariffs if the EU implemented a proposed digital tax that would impact large US corporations, threats they later withdrew.

The European Parliament’s Committee on International Trade (INTA) adopted amendments to the proposal on 10 October 2022 and have now reached a provisional political agreement on the anti-coercion instrument.

The European Commission would make the determination of coercion, however the Commission, EU member states, and the European Parliament would then agree on a set of countermeasures to take against the country.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People and Commissioner for Trade, said: “Today the EU is taking a step closer to deterring economic coercion against the EU and its Member States. Progress on the Anti-Coercion Instrument is key to reinforce our trade agenda, giving the EU the tools to preserve open trade and address risks in a targeted way. I am looking forward to sealing the deal at the final trialogue, so we can have this instrument in place as quickly as possible.”

To find our more about the instrument you can read the Commission’s proposal and the European Parliament’s negotiation position.

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