Alarmed by China’s blockade of Lithuania over the Baltic member country’s deepening ties with Taiwan, Brussels wants to get tougher with Beijing over an economic and trading relationship that it says has become increasingly unbalanced. Looking for strong measures, is there any credible option on the table?
Namechecking this week’s political agreement to create a so-called anti-coercion instrument in a speech in Brussels on Thursday, Commission President von der Leyen reportedly said: “We now need the unity at EU level for a bolder and faster use of those instruments when they are required and a more assertive approach to enforcement“.
According to Politico, the new rules will empower the Commission to investigate whether coercion has happened and to propose countermeasures, handing the executive competence in the making of foreign policy. Countermeasures that the Commission could deploy include increased customs duties, intellectual property restrictions, or export controls, under a time-bound procedure lasting no more than a year.
The anti-coercion tool was originally inspired by former U.S. President Donald Trump’s imposition in 2018 of steel tariffs against the EU on national security grounds, which pushed Brussels to raise its game and seek to strengthen its own trade defenses.
As European leaders debated their response, France and others pushed to go beyond empowering the EU to impose retaliatory tariffs, paving the way for the anti-coercion instrument. This first led to an upgrade of the EU’s so-called enforcement regulation, making it possible to retaliate with tariffs when a member of the WTO is uncooperative when a case is brought against them.
Powers “are no longer thinking in WTO time, they are thinking geopolitical time. And therefore in geopolitical time, what they’re doing is each of them is protecting their own interests by adopting measures that it seems they see as fit“, said Geraldo Vidigal, a former WTO lawyer and an international trade law lecturer at the University of Amsterdam.
The crux of the matter is that the anti-coercion instrument should be credible enough never to have to be used. Its greatest power is its deterrent effect.