Although the document did not specifically name China, it referred to Beijing by insisting that “some of the main trading partners of the European Union (EU) are disrupting this international system by imposing new trade barriers or contributing to the systemic and structural overcapacity of industries.”
The non-paper’s signatories, which include all of the EU’s largest economies except Germany, urged the Commission to “regularly consider the possibility of opening a safeguard investigation in the event of a sector-wide trade disruption.” The countries also called on the bloc to “be more proactive” in bringing trade violations before the World Trade Organization, and to allocate more human resources to its investigative units.
In what appears to be a push to make trade enforcement more geopolitical, the five countries also called for increasing “economic security” among the criteria evaluated when deciding to open a trade protection investigation that could lead to tariffs and other trade restrictions.
“This approach would help preserve the Union’s remaining productive capacity in strategic sectors and value chains, thereby protecting the Community’s industrial base,” they wrote in the document, first reported by the Financial Times.
Other proposals include technical amendments to existing legislation to ensure that foreign companies cannot evade EU trade investigations, and a move to allow the Commission to exercise anti-subsidy duties directly on companies. Currently, those duties can only be applied to countries and products.
The group also offered the idea of a so-called “resilience tool” – a “cross-sectoral trade protection tool” that can be activated when no other trade protection tool is in use – and the idea of additional duties or tariff rates “to protect European producers.”
On Friday, French President Emmanuel Macron he called on the EU to gain inspiration from the United States on trade measures aimed at protecting strategic industries. Tackling “global imbalances” – including China flooding the rest of the world with its exports – is also a priority identified by France for the summit of G7 leaders that will be hosted in Evian-les-Bains on June 15.
