EU Trade Policy published on 18 February 2021: key take-aways

Gide’s international trade and regulations team analysed the published document and identified the following main points of interest for businesses:  

Three EU priorities:

• Trade policy should help transform the EU’s economy in line with the green and digital transitions.

• Trade policy should support social fairness and environmental sustainability.

• The EU should defend itself against unfair trading practices while acting in accordance with its international commitments.

EU actions will focus on:

1. Updating WTO rules and practices to reflect today’s trade realities

• Reform WTO focusing on enhancing the WTO’s contribution to sustainable development and launch negotiations on rules to avoid distortions of competition due to state intervention.

• Give priority to enhancing transatlantic cooperation on WTO reform.

• Work to restore a fully functioning WTO dispute settlement mechanism with a reformed Appellate Body.

• Launch a trade and climate initiative in WTO.

2. Ensuring that there is an ambitious sustainability chapter in all EU bilateral trade and investment agreements

• Base the conclusion of trade and investment agreements with G20 countries on a common ambition to achieve climate neutrality.

• Promote respect for core human rights and other labour rights, as reflected in the UN fundamental conventions of the International Labour Organisation (ILO).

• Review in 2021 the 15-point action plan on the effective implementation and enforcement of Trade and Sustainable Development Chapters (TSDs) in trade agreements.

• Propose a Carbon Border Adjustment Mechanism (CBAM) to avoid that the objectives of EU climate policies be undermined by carbon leakage.

• Implement the new global human rights sanctions regime to ensure compliance with human rights, including on forced labour.

• Promote sustainable and responsible value chains through a proposal on mandatory due diligence, including effective action to ensure that products linked to forced labour are excluded from the value chains of EU companies.

3. Giving a new prominence to digital trade in EU trade policy

• Ensure that the EU continues to be a rule-maker for digital standards and regulatory approaches, in particular as regards data protection.

• Ensure that WTO sets the rules for digital trade,

• Support further multilateral WTO negotiations to liberalise trade in services in sectors going beyond e-commerce.

• Step up bilateral engagement and cooperation on trade-related digital issues with like-minded partners.

4. Developing a more strategic approach to international regulatory cooperation, in particular in relation to the green and digital transitions

• Adopt a proactive stance in standardisation bodies and promote EU regulatory approaches around the world.

• Develop transatlantic partnerships on the green and digital transformation of our economies including through the EU-US Trade and Technology Council.

5. Upgrading the EU’s relations with the Southern Neighbourhood and Africa

• Work to advance Deep and Comprehensive Free Trade Area (DCFTA) negotiations with Morocco and Tunisia.

• Work on the vision of a continent-to-continent trade agreement following the successful implementation of the African Continental Free Trade Area (AfCFTA).

• Propose a new sustainable investment initiative to partners or regions in Africa and the Southern Neighbourhood interested in doing so.

• Deepen and widen its existing trade agreements with African regional economic entities and strengthen their sustainability dimension.

• Enhance synergies between different trade arrangements with African countries, for example through more harmonised rules of origin in trade with the EU.

• Pursue sustainable investment agreements with Africa and the Southern Neighbourhood.

6. Improving the implementation and enforcement of trade agreements, and ensuring a level playing field

• Combine active engagement, both at bilateral and multilateral level, with parallel development and implementation of autonomous instruments necessary to protect the EU’s essential interests and values – in full compliance with its international commitments.

• Address non-compliance through WTO or bilateral dispute settlement mechanisms, where other means fail.

• Updated Enforcement Regulation (allowing the EU to expeditiously suspend concessions – Countermeasures being no longer limited to goods but may now concern services and intellectual property).

• Deploy the EU’s autonomous tools to protect EU businesses and jobs from unfair competition, in particular through the effective use of Trade Defence Instruments.

• Implement the FDI Screening Regulation.

• Propose a new legal instrument to protect the EU from potential coercive actions by third countries.

• Propose a legal instrument to address distortions caused by foreign subsidies on the EU’s internal market.

• Advance the International Procurement Instrument negotiations in the Council.

• Effectively implement the modernised Export Control Regulation on sensitive dual-use goods and technologies to support secured value chains.

• Explore options for an EU strategy for export credits. This will include an EU export credit facility and enhanced coordination of EU financial tools.