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By Philip Blenkinsop

BRUSSELS, Dec. 8 (Reuters) – The European Commission on Wednesday presented plans to retaliate against countries that put economic pressure on EU members to change their policies, while stressing that the main objective was deterrence.

The proposal is designed to counter an increased spillover of geopolitical tensions in trade. European Union member states have accused the administration of former US President Donald Trump and China of using trade as a political tool.

“In a time of growing geopolitical tensions, trade is increasingly militarized and the EU and its member states are becoming the target of economic intimidation. We need the right tools to respond,” said EU Trade Commissioner Valdis Dombrovskis in a press release.

“With this proposal, we send a clear message that the EU will stand firm in defending its interests.”

When hearing a complaint, the Commission would have to determine whether the economic measure of a third country was intended to force the EU or one of its members to change policies.

A current concern is the economic pressure Lithuania faces after allowing Taiwan to set up a de facto embassy there.

China has downgraded diplomatic ties with the tiny Baltic state and officials say Beijing has also imposed lockdowns https://www.reuters.com/world/lithuania-urges-europe-increase-indo-pacific-ties-face -chinese-coercion- 2021-11-24 on its exports and pressured companies in third countries not to do business with it.

After having established economic coercion, the Commission would seek to negotiate with the third country or seek the mediation or cooperation of other partners before acting.

The Commission would then have a wide range of countermeasures at its disposal, including tariffs on goods or services, suspension of EU funding or restrictions on access to EU tenders or services. research programs.

Countermeasures should be proportionate and designed both to cause the third country to suspend its initial measures and to cause the least damage to the EU economy.

The proposal has yet to be approved by the European Parliament and EU governments, some of whom are skeptical https://www.reuters.com/business/eu-plan-anti-coercion-trade-measure-faces-scepticism- 2021-12-07 on a measure they see as potentially protectionist and likely to lead the bloc into tit-for-tat trade wars.

This would be in addition to a panoply of trade measures that include the screening of foreign investment, limits on companies receiving foreign subsidies and restrictions on public procurement for companies from countries that do not open their markets. (Additional report by John Chalmers; Editing by Kevin Liffey)

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