On February 18, 2021, the European Commission unveiled its new trade strategy. The strategy aims to address the economic fallout from the coronavirus, climate change, and growing international tensions, while also reaffirming support for a rules-based multilateral trading system. The proposed measures range from WTO reform and digital trade initiatives, to tackling forced labor by developing enforcement mechanisms and requiring companies to monitor supply chains.

Valdis Dombrovskis, Executive Vice President of the European Commission, stated that the EU is “pursuing a course that is open, strategic and assertive, emphasizing the EU’s ability to make its own choices and shape the world around it through leadership and engagement, reflecting our strategic interests and values.”

The announcement comes in the context of China’s economic rise and on the heels of the December, 2020 agreement in principle between the EU and China on negotiations for a Comprehensive Agreement on Investment (CAI). In 2020, China overtook the U.S. as the EU’s top trade in goods partner at $710 billion. An outcome spurred, in part, by China’s ability to recover from the economic impacts of COVID-19 more quickly than other major trading partners.

The ambitions new strategy highlights the EU’s appetite to take on a leadership role in a post-COVID trading system while offering an opportunity for increased transatlantic engagement with respect to China.

An outline of the strategy is provided below:

WTO REFORM

The Commission will:

  1. Seek the adoption of a first set of reforms of the WTO focusing on enhancing the WTO’s contribution to sustainable development, and launch negotiations on reinforced rules to avoid distortions of competition due to state intervention. It will give priority to enhancing transatlantic cooperation on WTO reform.
  2. Work to restore a fully-functioning WTO dispute settlement with a reformed Appellate Body.

SUPPORTING THE GREEN TRANSITION AND PROMOTE RESPONSIBLE AND SUSTAINABLE VALUE CHAINS

The Commission will:

  1. Take forward initiatives and actions that promote climate and sustainability considerations in the WTO.
  2. Seek commitments from G20 partners on climate neutrality, strengthen cooperation on other aspects of the green deal such as biodiversity, sustainable food policy, pollution and the circular economy, and propose to make the respect of the Paris agreement an essential element in all future agreements.
  3. Improve the effective implementation and enforcement of sustainable development chapters in trade agreements through the early review in 2021 of the 15-point Action Plan. The outcome of the review will feed into ongoing and future negotiations.
  4. Promote sustainable and responsible value chains through a proposal on mandatory due diligence, including effective action and enforcement mechanisms to ensure that forced labor does not find a place in the value chains of EU companies. Bridging the time towards binding provisions, the Commission will provide guidance to assist EU business in taking the appropriate measures already now in line with international due diligence guidelines and principles.

SUPPORTING THE DIGITAL TRANSITION AND TRADE IN SERVICES

The Commission will:

  1. Seek the rapid conclusion of an ambitious and comprehensive WTO agreement on digital trade, including rules on data flows, in full compliance with the EU’s data protection framework, and provisions on enhancing consumer trust ensuring a high level of consumer protection.
  2. Explore the possibility of closer regulatory cooperation with like-minded partners on issues of relevance for digital trade.

STRENGTHENING THE EU’S REGULATORY IMPACT

The Commission will:

  1. Enhance regulatory dialogues with like-minded partners in strategic areas for EU competitiveness. This will require early identification of priority areas for regulatory cooperation and closer dialogue with EU and international standard organizations.
  2. Develop a closer transatlantic partnership on the green and digital transformation of our economies including through the EU-US Trade and Technology Council.

STRENGTHENING THE EU’S PARTNERSHIPS WITH NEIGHBORING, ENLARGEMENT COUNTRIES AND AFRICA

The Commission will:

  1. Deepen trade and economic relations with other countries in Europe, including the Western Balkans and countries that have concluded DCFTAs with the EU, focusing in particular on closer regulatory cooperation in support of the green and digital transitions. It will modernize its trade and investment relations with those countries in the Southern Neighborhood interested in fostering closer integration with the European Union.
  2. Reinforce its engagement with African countries by:
  3. enhancing political dialogue and cooperation with the African Union and its Members and the smooth implementation of AfCFTA, including engagement with the private sector and promoting common standards in Africa to enhance regional and continental integration.
  4. deepening and widening its existing trade agreements with African regional economic communities and strengthen their sustainability dimension.
  5. exploring further the possibility of enhancing links and synergies between different trade arrangements with African countries, for example through more harmonized rules of origin in trade with the EU.
  6. pursuing sustainable investment agreements with Africa and the Southern Neighborhood.

STRENGTHENING THE EU’S FOCUS ON IMPLEMENTATION AND ENFORCEMENT OF TRADE AGREEMENTS, AND ENSURE A LEVEL PLAYING FIELD

The Commission will:

  1. Seek to consolidate the EU’s partnerships with key growth regions – in the Asia Pacific and Latin America – by creating the conditions to conclude negotiations and ratify outstanding bilateral agreements.
  2. Make full use of the Chief Trade Enforcement Officer’s (CTEO) role to maximize benefits of negotiated outcomes for companies, in particular SMEs and farmers, and to eliminate hurdles that impair on the potential of the agreements to deliver, including on sustainable development.
  3. Further strengthen the EU’s tools to confront new challenges and to protect European companies and citizens from unfair trading practices, including via the preparation of an anti-coercion instrument. In addition, the Commission will explore options for an EU strategy for export credits.
  4. Develop new online tools to support EU businesses, in particular SMEs.

For more information please see our previous posts below or reach out to John Brew, Jeffrey Snyder, Frances Hadfield, or Clayton Kaier

European Union (EU) Archives | International Trade Law (cmtradelaw.com)

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Photo of John Brew John Brew

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations…

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations on matters involving customs administration, enforcement, compliance, litigation, legislation and policy.

John represents clients in proceedings at the administrative and judicial levels, as well as before Congress and the international bureaucracies that handle customs and trade matters. He advises clients on all substantive import regulatory issues handled by U.S. Customs and Border Protection and Immigration and Customs Enforcement, such as classification, valuation, origin, marking, tariff preference programs, other agency regulations, admissibility, import restrictions, quotas, drawback, audits, prior disclosures, penalties, investigations, Importer Self Assessment and Customs-Trade Partnership Against Terrorism programs, importations under bond, the Jones Act, vessel repairs, and foreign trade zone matters.

Photo of Frances P. Hadfield Frances P. Hadfield

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving…

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving customs compliance, audits, customs enforcement, as well as import penalties.

Frances represents clients before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, as well as in proceedings at the administrative level. She advises corporations on both substantive federal and state regulatory issues that involve U.S. Customs and Border Protection, the Federal Trade Commission, Food and Drug Administration, and U.S. Fish & Wildlife in matters pertaining to product admissibility, audits, classification, import restrictions, investigations, marking, licenses, origin, penalties, and tariff preference programs.