Trade and Security: The EU’s Unilateral Approach to Economic Statecraft

Summary:

The European Union (EU) is developing new legal instruments to respond to, and provide remedies against, trade policies of third states which harm the EU internal market. While China is the main threat to EU trade security the measures will be applicable to all third states, especially Russia, the United States (US) and the United Kingdom (UK). The proposals give the European Commission a central role in the investigation and enforcement of trade remedies but will have significant consequences for business.

The proposals have less than transparent criteria for their application. This gives the European Commission wide discretion but may also entail further guidance, using soft law, if the European Commission wants to avoid legal challenges to the exercise of its new powers. The Anti-Coercion Instrument attempts to bypass the slow procedures of the WTO and this raises questions as to whether the measure is compatible with WTO and international law. The use of unilateral measures for trade security is a new form of statecraft for the EU, but it may undermine the EU’s pledge to maintain a rules-based global trading order.

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