EU seals powerful trade tool to tackle economic bullying, with China in mind

Name: Taiwanese supporters queue up to buy Lithuanian rum held up by mainland China
Uploaded: 2023-03-28T14:00:10.000Z
Duration: 1 min 48 s
Description: Taiwanese supporters queue up to buy Lithuanian rum held up by mainland China

Instrument expected to be in place before the year-end, as European lawmakers and diplomats iron out differences in marathon talks

Move involving tariffs, export controls, quotas or market entry freezes gained popular support after China’s unofficial boycott of Lithuanian goods

Reading Time:3 minutes

Why you can trust SCMP

The anti-coercion tool is seen as the most geopolitical of a suite of trade defence measures being framed by the EU and decried by Beijing as “protectionist”. Image: Shutterstock

Finbarr Berminghamin Brussels

Published: 10:00pm, 28 Mar 2023Updated: 12:29am, 29 Mar 2023

A powerful trade tool aimed at tackling economic bullying moved closer to reality on Tuesday, after European Union negotiators reached a deal on exactly how it should work.

Representatives from the EU parliament and the European Council, the body made up of diplomats from member states, ironed out their final differences in marathon overnight talks that wrapped up at 4am.

The anti-coercion instrument, which was designed partly with China in mind, is now expected to be in place before the end of the year.

Once adopted, Brussels can slap countries with tariffs, export controls, quotas or market entry freezes if they “interfere in the legitimate sovereign choices” of the EU or its member states “by applying or threatening to apply measures affecting trade or investment”.

The tool was initially conceived as a response to former US president Donald Trump’s section 301 trade tariffs. But after an initial lukewarm response from EU nations, it gained popular support following China’s unofficial boycott of Lithuanian goods beginning in 2021.

01:48

Taiwanese supporters queue up to buy Lithuanian rum held up by mainland China

The move from Beijing came in response to the opening of a “Taiwanese Representative Office” in Lithuanian capital Vilnius. All other official Taiwanese premises in the EU are named after “Taipei”, in deference to Beijing’s view of Taiwan as breakaway territory with no right to build official ties with other governments.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x