EU to Retaliate with Compensation for 'Third Country Trade Threats' Starting Next Month

Ursula von der Leyen, President of the European Commission.
[Photo by Yonhap News]

The European Union (EU) plans to actively respond from next month if a third country is deemed to pose so-called 'trade threats,' by imposing restrictions on investments within the bloc or demanding compensation.

According to the EU website on the 24th (local time), the EU Council finalized the approval of the 'Anti-Coercion Instrument (ACI)' the day before. All legislative procedures were completed two years after the executive body, the European Commission, proposed the draft in 2021.

The EU intends to hold the final signing ceremony next month and will fully implement the ACI after its publication in the Official Journal. The ACI aims to swiftly activate countermeasures against economic threats from third countries targeting the EU and its member states.

Once the law is enforced, the Commission can conduct ex officio investigations if a third country imposes unfair trade measures against EU member states. Subsequently, the EU Council, representing 27 countries, will decide whether to respond through a qualified majority vote. Depending on the case, restrictions on direct investments within the bloc and public procurement markets may follow. The EU may also demand compensation from the third country.