Paris and Berlin want the European Union to be able to hit back quickly when a trading partner plays dirty. In a joint paper published on Monday, ten days before EU leaders meet in Brussels to discuss trade imbalances with China, the two governments asked for a rapid-response tool suited to a world where trade is increasingly used as a weapon.
German officials said the bloc needs something as forceful as the Section 301 tariffs the United States imposes, or China’s limits on critical mineral exports. The measure would not name any country. The paper does list the practices it has in mind: dumping, widespread subsidies and restrictions on currency convertibility, all distortions that many EU leaders say China engages in.
The document warned that “systemic and persistent market distortions” endanger the European economy, the industrial base above all, and risk widespread job losses. It also called for the EU’s existing trade defences to work faster, with more investigations and a wider approach that covers whole sectors rather than single products.
Two new instruments
France and Germany asked the European Commission to bring forward two new instruments as soon as it can. The first, which the Commission has already mentioned, would limit companies’ dependence on a single source for certain critical supplies. The second would restrict access to the single market for countries that undermine fair conditions by political or economic means. The paper does not say what would trigger a response or what the EU would actually do.
On voting, the two capitals proposed that a Commission proposal to activate counter-measures against another country should go through unless a qualified majority of member states opposed it. That is a lower hurdle than some trade measures face. The Commission, they said, should be able to act swiftly, which German government officials said could mean a matter of days. Any legislation creating the instrument would still need the approval of EU governments and the European Parliament.
A French presidential adviser called action urgent and said imbalances with some trade partners had become unsustainable. Both countries, the adviser said, want existing anti-dumping measures used as soon as possible. “France and Germany are very keen to put an end to the naivete on trade,” the adviser told reporters.
