EU Enforcement Regulation for trade disputes

On February 13 the Regulation 2021/167 (available here) amending Regulation (EU) No 654/2014 (available here) concerning the exercise of the Union’s rights for the application and enforcement of international trade rules entered into force.

The Regulation aims at allowing the European Union (EU) to protect its trade interests despite the paralysis of the multilateral dispute settlement system in the World Trade Organization (WTO).

The initiative concerns an amendment of Regulation (EU) No 654/2014 concerning the exercise of the Union's rights for the application and enforcement of international trade rules and amending Council Regulation (EC) No 3286/94 laying down procedures in the field of the common commercial policy in order to ensure the exercise of the EU's rights under international trade rules, in particular those established under the auspices of the World Trade Organization (WTO).

The objective of the amendment is the protection of the Union’s interests under international trade agreements in situations when third countries adopt illegal measures and simultaneously block a dispute settlement process. The amendment extends the scope of the Enforcement Regulation to allow for action in a situation of dispute settlement procedures that are blocked. This proposal for this Regulation came as a direct reaction to the blockage of the operations of the WTO Appellate Body.

The Commission is required to consult with stakeholders to establish the Union's economic interest and to take their input into account; the requirements of consultation with stakeholders and Member States' public authorities are particularly highlighted as regards measures in the area of trade in services and of trade-related aspects of intellectual property rights where the Commission 'shall take into utmost account' the information gathered, and shall provide an analysis of the measures envisaged before proposing implementing measures to Member States.

The Commission declared that in deploying the enhanced enforcement system, it will pay equal attention to alleged breaches of the trade and sustainable development provisions of EU trade agreements as to alleged breaches of market access systems. The processing of alleged breaches of trade and sustainable provisions will be fully integrated into the system. The Commission will prioritise those cases which are particularly serious in terms of their effect on workers or the environment in a trade context, which have systemic importance and which are legally sound.

The Commission will continue to fully engage in dedicated sessions with the responsible Parliamentary committee to exchange views on trade disputes and enforcement actions, including with regard to impacts on Union industries. In this context, the Commission will continue its reporting practice by providing periodically a state of play on all pending disputes and instant information for major developments in relation to disputes at the same time such information is shared with Member States. This reporting and information sharing will take place through the responsible committees in the Council and in the Parliament.

At the earliest possible opportunity after 13 February 2021, but no later than one year after that date, the Commission shall review the scope of this Regulation, taking into account in particular the commercial policy measures that may be adopted, as well as its implementation, and shall report its findings to the European Parliament and the Council.

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