EUU, Alm.del - 2020-21 - Bilag 599: Notat samt høringssvar vedr. Kommissionens høring om inititiativ til handelsmekanisme der kan afværge og modvirke tredjelandes tvangsforanstaltninger (anti-coersion instrument)

Europaudvalget 2020-21
EUU Alm.del Bilag 599
Offentligt

NOTAT

31 May 2021

2021 - 6561

Danish response to the public consultation initiated by the Commission

on a mechanism to deter and counteract coercive action by non-EU

countries

The Danish government appreciates the opportunity to provide input to the

Commission’s public consultation in order to inform the Commission’s

policy preparation regarding a potential mechanism to deter and counteract

coercive action by non-EU countries (so-called

“anti-coercion” instru-

ment).

We agree with the Commission that there have been examples of third

countries attempting to dissuade and influence EU and EU Member States’

policy decisions through means that violate multilateral trade rules. In this

regard, it is important for the EU to find appropriate ways to tackle this

form of coercive action. The EU needs to have the right tools to respond to

illegal trade measures where third countries have taken or threatened to

take action against the EU and/or EU Member States, in breach of multi-

lateral trade rules and exerts economic pressure on private companies with

the aim of influencing policymaking in the EU or its Member States.

However, it is not inherently given that there is a need for an additional

legal instrument in this regard. A thorough, factual analysis will be neces-

sary to be able to assess the need for a new legal instrument in the field of

trade. The Danish government therefore welcomes the Commission's in-

tention to collect data and evidence of economic coercion through the on-

going consultation. In the same vein, the intention of the Commission to

publish an Impact Assessment alongside a legislative proposal for an in-

strument is welcome and essential for the further deliberations on such an

instrument.

Denmark is a strong supporter of the Commission's agenda to strengthen

the multilateral trading system and fully shares the goal of reforming the

WTO and restoring a fully functioning dispute settlement system. With this

in mind, it essential that a future mechanism in the area of trade to deter

and counteract the coercive measures of third countries does not undermine

EUU, Alm.del - 2020-21 - Bilag 599: Notat samt høringssvar vedr. Kommissionens høring om inititiativ til handelsmekanisme der kan afværge og modvirke tredjelandes tvangsforanstaltninger (anti-coersion instrument)

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the efforts to reform the WTO and that such a mechanism is in full compli-

ance with WTO and international public law in general.

In this regard, it is important that the Commission considers whether there

is indeed a distinction between coercive measures of third countries that

belong within the realm of the WTO dispute settlement system and coer-

cive measures that do not fall within the scope of the WTO, e.g. trade-re-

lated vs. investment-related measures. If there is such a distinction, the

scope of application for an instrument would need to clearly define this.

Countermeasures imposed in line with a new instrument may have signifi-

cant political implications and negative consequences in terms of foreign

relations with third countries. As such, we urge the Commission to care-

fully consider the decision mechanism for such an instrument to take into

account the positions of EU Member States to the fullest extent possible.

Relevant stakeholders should be part of the consultation process and the

decision to impose countermeasures should include a thorough Union in-

terest test.

The Danish government stresses that it will be crucial that the EU continues

to seek to address challenges in bilateral trade relations first and foremost

through political dialogue. It is especially important now with a new US

administration that the EU focuses on seizing the current opportunity to

improve transatlantic relations and trade relations and working with the US

to restore a well-functioning rule-based international trade order.

The Danish government notes that the Commission has not yet taken a po-

sition on whether the instrument could be used to counter extraterritorial

sanctions. It is apparent that the EU's Blocking Statute

(Council

Regulation

(EC) No 2271/96) does not function as intended and therefore cannot be

used to motivate the US to refrain from directing their extraterritorial sanc-

tions and export control measures against companies in the EU. Conse-

quently, there may be grounds for arguing that there is a need for an instru-

ment to deal with the US extraterritorial sanctions, insofar as other existing

EU instruments are unable to. The Danish government would welcome the

Commission’s thoughts in this regard.

Denmark welcomes further clarifications and elaborations in terms of:



The triggers of the instrument, and how the intention of coercion by

a third country can be determined



Concrete examples of economic pressure having been exerted on

EU Member States and/or companies where the regulation would

in the future apply



The compatibility with WTO law and relation to the WTO dispute

settlement process

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

The parallels and potential overlaps to the countermeasures availa-

ble through the Enforcement Regulation

The parallels and links to the Blocking Statute and a possible revi-

sion of the Blocking Statute.

The Danish government looks forward to further deliberations with the

Commission on this possible instrument.