Dombrovskis “does not want to speculate” about new sanctions against Russia.
(Photo: AP)
Brussels The Vice President of the EU Commission, Valdis Dombrovskis, classifies China’s economic boycott against Lithuania as an attempt at economic coercion. In the future, the EU wants to be able to punish such coercive measures with counter-sanctions. To this end, the Brussels authority proposed a new instrument on Wednesday that would significantly expand its trade policy competencies.
It is about “protecting us when a third country breaks international rules,” said Dombrovskis in an interview with the Handelsblatt and some other European media. At the same time, he emphasized that the EU Commission only wanted to use its power defensively.
The instrument should only be used in certain cases. And further: “We also expect that the instrument will have a deterrent effect.”
In applying the new instrument, the Brussels authority is relying on help from business. In the future, the EU wants to examine “which complaints are made by member states, European trade associations or individual companies against certain actions by other countries,” explained Dombrovskis. One will then decide “on a case-by-case basis” whether an attempt at coercion has been made and whether a counter-attack could be justified.
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Read the full interview here:
Mr Dombrovskis, the EU wants to issue a license to impose retaliatory sanctions. Isn’t there a risk that Europeans will further damage the rules-based world order that they claim to want to protect?
No, because this instrument is there to protect us when a third country breaks international rules. It’s a defensive tool. It gives us the opportunity to react faster and more forcefully – and thus has a deterrent effect on countries that violate international law.
There are already ways to counteract such behavior: in the form of dispute settlement at the World Trade Organization (WTO).
Yes, complaints to the WTO are possible, but we all know the current situation: the dispute settlement bodies are not working. We are therefore now putting into practice what we announced in our trading strategy. That we act multilaterally if we can, but also strengthen our autonomous scope for action in order to react when third countries do not adhere to the rules.
But where do you draw the line? When is the threshold for the economic attempt at coercion exceeded?
We have to differentiate between classic economic disputes and economic blackmail attempts. Classic economic disputes are tariffs, dumping practices or investment barriers. An attempt at blackmail occurs when a country, by interfering with trade and investment flows, aims to force the EU or its member states to make certain political decisions.
Can you give a few examples?
We do not commit ourselves to what forms such economic coercion must take. Our definition is deliberately kept open. A possible example would be extra-territorial sanctions. But there are others too. Lithuania is currently confronted with the situation that China is restricting trade due to certain political decisions with a view to Taiwan. This is a case that would certainly warrant an investigation using the anti-sanctions instrument. Likewise, the interruption of gas supplies, as recently threatened by Belarus, could fall under the new regulations. We will decide on a case-by-case basis.
The EU is also not afraid to impose sanctions in order to enforce its foreign policy interests.
This will remain so. Our proposal does not interfere with the existing sanctions legislation. It’s about adding a defense tool to our trade toolbox.
New sanctions against Russia are currently being negotiated. In your opinion, should these also be directed against the Russian energy sector and the financial system?
I don’t want to speculate about that at this point. The talks are still ongoing.
Back to the defense against sanctions. How exactly does the procedure look to punish blackmail attempts?
As a first step, we would look at the complaints made by Member States, European business associations or individual companies against certain actions of other countries. If we came to the conclusion that there was an attempt at coercion, we would enter into a dialogue with the country concerned. If this dialogue does not lead to any result, countermeasures would be proposed – only then.
The French government has already announced that it supports the Commission’s initiative. Do you expect Paris to put the defense against sanctions on the agenda of the French Presidency, which starts in January?
We are already in contact with the French. They are very supportive of our proposal and want to make it one of their priorities. There is also a clear expectation in the EU Parliament that we will tackle the problem. I therefore hope that we will be able to complete the legislative process very quickly.
However, there is resistance in the European Council from countries like Sweden, which feel particularly committed to free trade.
We therefore also emphasize that our proposal is a defensive instrument that should only be used in certain cases. We also expect the instrument to have a deterrent effect. The aim is not to stir up new trade conflicts, but on the contrary to create a situation in which third countries refrain from trying to blackmail the EU – because they know that we can react quickly and effectively to such a thing.
What about cases like the Nord Stream 2 Baltic Sea pipeline, where the US is threatening sanctions – but also with the declared aim of enforcing compliance with European energy laws by the Russian state-owned company Gazprom.
This is a very complex and still quite theoretical case, so I cannot go into it in detail. But I can say about Nord Stream 2: The pipeline is not in line with the goals of European energy policy.
More: ECJ: Reduction of funding from the EU budget in the event of violations of the rule of law.