{"id":33951,"title":"Determined to Deter? The EU\u2019s new Anti-Coercion Instrument","link":"https:\/\/bst-europe.eu\/de\/economy-security-trade\/determined-to-deter-the-eus-new-anti-coercion-instrument\/","date":"9. Januar 2024","date_unix":1704786918,"date_modified_unix":1747997308,"date_iso":"2024-01-09T07:55:18+00:00","content":"

The regulation establishing the EU Anti-Coercion Instrument (ACI) entered into force on December 27, 2023, an important step to protect the EU as trade becomes increasingly weaponised. The ACI is a powerful geoeconomic tool if the EU can signal its determination to retaliate against coercive measures by third countries. As a framework regulation, the ACI needs to be filled with life by aligning its anti-coercion strategy with its de-risking<\/a> plans, managing the Council\u2019s active involvement and using the ACI as an assertive communication instrument. <\/em><\/p>\n

The Anti-Coercion Instrument<\/a> is the newest addition to the EU\u2019s trade toolbox. If third countries use economic pressure to influence policy choices by the EU or a member state, the EU will be able to retaliate with a broad range of trade and investment countermeasures. These measures can be proposed by the Commission at the end of a two-step process defined by the new regulation.<\/a><\/p>\n

First, the Commission determines whether a given situation constitutes economic coercion. This assessment needs to be confirmed by a qualified majority of member states in the Council. The Commission will then engage in consultations with the third country in question to find an amicable solution.<\/p>\n

If consultations fail, as a second step, the Commission then proposes a set of proportional countermeasures, which then have to be confirmed by the Council, again by a qualified majority. These measures are then reassessed periodically and lifted if the coercion ends. Ideally, the prospect of being hit by EU countermeasures should deter third countries from taking hostile actions in the first place.<\/p>\n

Aligning on critical inputs \u2013 de-risking remains crucial<\/strong><\/h2>\n

While it represents a step in the right direction, as a deterrence tool the ACI is no silver bullet to end the risk of economic coercion by third countries. The reasons for this are threefold and only partly under the EU\u2019s influence: First, the ACI is not the economic equivalent of strategic nuclear weapons \u2013 there is no Cold-War-like \u201cbalance of terror\u201d. Under the regulation, measures must be designed according to the principle of proportionality and with a view to limiting damage to EU businesses.<\/p>\n

This is connected to the second reason: Powerful third countries, and especially autocracies, believe the EU to be weak, as its leaders depend on public opinion and its decision-making process is fragmented, involving many veto players. These third countries may take a chance on EU countermeasures \u2013 especially if their ideologies put national grandeur before economic gain.<\/p>\n

Third, economic coercion is increasingly used as a grey zone tactic<\/a> that blurs the line between cooperation and conflict. Companies will find that their customs clearances fail for mysterious reasons or that their products undergo, especially onerous border procedures \u2013 think of China\u2019s coercive measures against Lithuania<\/a> and Norway<\/a>. This grey zone is a challenge to the EU\u2019s law-based approach.<\/p>\n

The ACI is one building block of a broader strategy against third parties\u2019 weaponisation of economic interdependence \u2013 be it in the field of energy (as seen after Russia\u2019s attack on Ukraine), in raw materials or in high technology. De-risking<\/a> the EU\u2019s critical inputs remains urgent, as it reduces the leverage a single third country can exercise.<\/p>\n

Active Council involvement \u2013 the need for political leadership<\/strong><\/h2>\n

For anti-coercion measures to succeed, political ownership must be taken by the Council of the European Union. The ACI sits at the intersection of trade policy, which is an exclusive competence of the EU, and foreign policy, which is a competence of the member states.<\/p>\n

Allowing for the adoption of countermeasures by a qualified majority instead of unanimity enhances the EU\u2019s capacity for decisive action. However, third countries will try to break EU unity by leveraging their bilateral relations. Solidarity among EU members is not a given, especially when a member state faces coercion due to its own contentious policy choices.<\/p>\n

By setting a legal and conceptual framework for these considerations, the ACI depoliticises these debates to a certain extent: There is an agreed definition of what does and does not constitute economic coercion and an understanding of what should be done against it.<\/p>\n

This technical framework, however, only takes us so far: As countermeasures, like trade restrictions, also affect EU businesses, there needs to be strong political will to back them up \u2013 even if they may be unpopular in some member states and even if their effects on coercive third countries may take time to materialise.<\/p>\n

Assertive communication instrument \u2013 making the ACI understood<\/strong><\/h2>\n

This points to a broader point: The ACI\u2019s effectiveness depends on clear and assertive communication, both internally and externally. Deterrence is all about perception<\/a>: The threat of negative consequences can only dissuade the target from unwanted behaviour if the target is aware of these consequences in advance.<\/p>\n

To put it more bluntly, the EU must find a way to make others understand what would await them if they engage in economic coercion against it, and to make these statements credible \u2013 it must show that it is determined to deter.<\/p>\n

Getting this message across, based on a complex legal tool like the ACI, is no easy task \u2013 especially as the idea of peace and prosperity through economic interdependence remains part of the EU\u2019s normative core, and accessible communication is not usually the EU\u2019s strong suit. Making countries, businesses and people understand what the ACI is and what it is not is, therefore, just as crucial as the adoption of the instrument.<\/p>\n

About the author<\/strong><\/p>\n

Etienne H\u00f6ra is a project manager in the \u2018Europe\u2019s Future\u2019 programme at Bertelsmann Stiftung. His focus lies on the EU\u2019s trade policy in this geoeconomic age, as well as the consequences of China\u2019s increasing assertiveness for the EU.<\/p>\n

This topic <\/em><\/a>was discussed at a recent <\/em>EU<\/em> Toolbox Talk<\/em><\/a> – our online event series on existing and upcoming EU instruments aimed at managing critical dependencies and strengthening the EU\u2019s sovereignty. <\/em>\u00a0Sign up for our mailing list<\/em><\/a> to be notified of upcoming events.<\/em><\/p>\n

Read more on the EU in the new geopolitical landscape<\/strong><\/p>\n

Global Gateway: The EU Maps a Different Path Than Belt and Road<\/a><\/p>\n

The EU and China: The Rising Rivalry Next Door<\/a><\/p>\n

Keeping Friends Closer: Why the EU Should Address New Geoeconomic Realities and Deepen Partnerships with its Neighbours<\/a><\/p>\n

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