ANTI-COERCION DRAFT REPORT

The Parliament’s trade chair Bernd Lange has finished his draft report on the upcoming anti-coercion instrument,[...].
Remind me? The upcoming trade defense instrument would allow Brussels to retaliate in the case of economic blackmail, such as Beijing’s trade embargo on Lithuania. But the scope of the instrument has already sparked criticism from the more free trading countries in the EU.

Now more needed than ever: As the European Parliament had asked for this instrument, Lange unsurprisingly supports the upcoming tool to “discourage and when necessary respond to economic coercion,” he writes in the report. The war in Ukraine has only increased the awareness of the need for trade defense instruments, Lange told Morning Trade in his office. “Of course, the other big elephant in the room with China is also there, but also regarding this dramatic change in the global world of trade (…) we need to sharpen our weapons.”

Strengthening the instrument: Lange wants to broaden the definition of economic coercion by also including the threat of measures by a third country to ensure deterrence. The EU countermeasures should not only stop the coercion but, if possible, also address the injury caused by the coercion, he argues.

Union interest: Lange warns any measures should take into account the economic and social coherence of the Union. “On the one hand, I wanted to avoid loopholes,” Lange said. “If there’s an unspecified Union interest, this could be an excuse to do nothing. So of course the weakness of the proposal by the Commission was also that the flexibility was totally in the hands of the Commission.” “On the other hand, it’s clear that there might be some aspects geopolitically, but also regarding the socioeconomic coherence inside the European Union, which might lead to not using this instrument.” Lange referred to the current sanctions discussion, as sanctions have to harm Russia more than the EU.

Not all power to the Commission: Lange wants to have more democratic scrutiny in the decision-making. “We had a look at the procedures so that it’s more transparent so that Council and Parliament are more informed and involved,” Lange said.

What’s next? Lange will now start negotiations with the shadow rapporteurs after which he hopes to bring the file to a vote in the Parliament’s trade committee before the summer break and for a vote in plenary after the summer, he said. EU countries have already started discussing the file in Council, but it’s not clear yet whether the French presidency will manage to find an agreement among capitals before the summer.