The European Parliament and the Council have today reached a final political agreement on the Anti-Coercion Instrument (ACI). This new tool will enable the EU to respond to economic coercion, and therefore to better defend its interests and those of its Member States on the global stage.
The ACI is first and foremost designed to act as a deterrent against any potential economic coercion. If economic coercion nevertheless takes place, the ACI provides a structure to get the third country to stop the coercive measures, through dialogue and engagement. However, if engagement fails, it also gives the EU access to a wide range of possible countermeasures against a coercing country. These include the imposition of tariffs, restrictions on trade in services, and restrictions on access to foreign direct investment or public procurement.
The agreement reached today includes a legal framework for the EU to request that the third country repair the injury caused by its economic coercion. It also covers decision-making arrangements, in particular the Council‘s role in determining whether the EU or a Member State is the target of economic coercion, as well as timeframes for EU action under the instrument.
The EU will continue to cooperate with like-minded partners and allies to address economic coercion, and the ACI is a significant addition to international efforts in this domain.
The European Parliament and the Council will have to complete the procedures for approval of the new Regulation before it can enter into force.Entry into force is expected in the autumn of this year.
The EU and its Member States have become the target of deliberate economic pressure in recent years. The European Commission proposed the ACI in 2021 as part of its new trade strategy, as a new dedicated tool to address economic coercion – defined as a situation where a third country attempts to pressure the EU or a Member State into making a particular choice by applying, or threatening to apply, measures affecting trade or investment against the EU or a Member State. The instrument can be triggered by a wide range of coercive practices.
The European Commission will rely on input from stakeholders when considering the activation of the instrument, and businesses are encouraged to come forward with relevant information.
The ACI and any actions which can be taken under the instrument are consistent with the EU‘s international obligations and fully grounded in international law. The European Commission will soon present the European economic security strategy, envisaged for 20 June 2023.