Some industrial policy advocates argue that these seen and unseen costs are...
2021-07-07 2 ENGLISH REPORTS
This procedure does not come without legal complexities and potential political obstacles but, with sufficient coordination, it could be a highly effective tool for countering coercive measures. And, even if the procedure at the EU level fails for some reason, the close consultation with, and specific recommendation to, member states might, after all, still incentivise a smaller group of member states to impose export controls on a national level, as part of a coalition of the willing. This could still be a credible and highly effective countermeasure. Likewise, the same procedure could be envisaged for proposing sectoral sanctions for divestment. After an initial investigation under the ACI, the EU could propose such sanctions to the foreign affairs council, which could adopt them by unanimity or where member states form a coalition of the willing.
That said, the latter option would break with a key EU tradition of adopting sanctions jointlySuch EU countermeasures will likely impose costs on European entities, even if the options are well designed. But the whole point of an ACI is to make it less costly overall for the EU to impose them. Still, countermeasures, including those that are cross-sector, could have collateral effects on businesses in sectors or member states that are not concerned by the original third-country coercion, or where the political mood does not accord with the anti-coercion action taken by the Commission. The EU could consider offering compensation (financial or non-financial) to European economic sectors asymmetrically hit by its countermeasures. Because the EU would not be able to provide anywhere near full compensation for losses, it should focus on those cases that are particularly grave. But just the symbolism of such possibilities would go a long way towards fostering the kind of EU solidarity that is needed for collective action in the face of economic coercion by other players.
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