France and Germany have jointly proposed a new rapid-action tool letting the European Union strike back quickly against countries whose trade practices harm the bloc's economy. The plan targets no specific nation but points at dumping, subsidies and currency restrictions — distortions EU leaders commonly tie to China — and comes ten days before an EU summit on Chinese trade imbalances.
France and Germany want the EU to arm itself with a trade weapon as fast-acting as the United States' Section 301 tariffs or China's own restrictions on critical-mineral exports, German officials said. The proposal, laid out in a joint French-German document published Monday, arrives ten days before EU leaders meet in Brussels to discuss Chinese trade imbalances.
Document cites job losses from market distortions
The paper does not name a target country, but it highlights dumping, widespread subsidies and restrictions on currency convertibility as the kind of market distortions many EU leaders already associate with China. It warns that these "systemic and persistent market distortions" put the European economy and its industrial base at risk, citing widespread job losses. As a result, the two governments say the bloc must deploy its trade defense tools more swiftly and efficiently, with more investigations and a broader approach to cover whole sectors.
Two new instruments proposed
France and Germany want the European Commission to propose two new instruments as soon as possible, both aimed at diversification and economic security. The first, already floated by the Commission, would limit companies' reliance on single sources for certain critical supplies. The second would restrict access to the EU single market for countries that undermine fair market conditions through political or economic means, though the document does not specify what would trigger EU action or what that action would look like.
Faster approval, lower hurdle
Under the proposal, any Commission plan to activate counter-measures against another country would be adopted automatically unless a qualified majority of EU members voted against it — a lower bar than required for some existing trade measures. The paper also said the Commission should be able to activate such new measures swiftly, which German government officials said could mean a matter of days. Still, any new legislation would need approval from both EU governments and the European Parliament before taking effect.
A French presidential adviser called the action urgent, saying trade imbalances with some partners have become unsustainable, and added that France and Germany want the bloc to deploy its existing anti-dumping measures without further delay. According to the adviser: "France and Germany are very keen to put an end to the naivete on trade."
Source: Investing.com (Reuters)
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