THE European Commission proposed Dec. 18 a new mechanism to make sure Europe's trading partners are respecting international agreements and the rights these accords offer to firms in the European Union.
"The EU's membership in the World Trade Organization and bilateral trade agreements help the EU economy. Those agreements must be respected for them to deliver results. When international trade disputes prove that other countries haven't played by the rules, the EU needs to be able to react efficiently and swiftly to defend its interests," EU Trade Commissioner Karel De Gucht said.
De Gucht said the new proposal gives European governments the tools needed to enforce EU trading rights in dealings with other countries.
The commission said its proposed new regulation would permit the EU to respond to trade problems "in a more streamlined, efficient manner in order to encourage the offending country to remove the illegal measures."
The proposal would allow the European Commission to act when European trade interests are involved rather than waiting for individual cases to develop.
"The commission is proposing a regulation to establish a clear and predictable framework for adopting implementing acts following international trade disputes that have a negative economic impact on the EU. In cases of last resort, trade sanctions can be put in place to encourage the offending country to remove illegal measures," the commission explained.
Under the new rule, the EU would be able, in exceptional cases, to offer compensation for import restrictions imposed on EU products through mechanisms like safeguard measures. It also would allow the EU to act when a country arbitrarily changes its trade regime through such things as increasing import tariffs without offering compensation to European firms.
In response to these acts, the new regulation would enable the EU to boost import tariffs or import quotas.
EU trade ministers and the European Parliament will now debate the proposed regulation.