Trade: EU reaches political agreement on updated enforcement regulation

The Council presidency has reached (28 October 2020) an agreement with the European Parliament on a revised enforcement regulation.

The aim of this regulation is to better protect the EU’s trade interests and rights in the context of the current blockage of the World Trade Organization’s (WTO) dispute settlement system.

The regulation also ensures that the EU can enforce its trade rights if one of its partners blocks the normal dispute settlement mechanism under bilateral treaties. Member states still have to approve the agreement by qualified majority.

The revised EU enforcement regulation amends the existing one, which has been in place since 2014 and provides a common legislative framework for the enforcement of the EU’s rights under international trade agreements.

Thanks to these rules, the Commission is able to impose countermeasures at the end of dispute settlement procedures, once it receives authorisation from the WTO.

Given the current paralysis of the WTO Appellate Body, the existing rules needed to be updated to allow the Commission to take action in situations where dispute settlement procedures are blocked.

The main focus of the proposed amendment was to cater for situations where the EU succeeds in obtaining a favourable ruling from a WTO dispute settlement panel but the process is then blocked because the other party appeals a WTO panel report ‘into the void’ and does not agree to interim appeal arbitration under Article 25 of the WTO Dispute Settlement Understanding.