Will a new dispute mechanism help break barriers to trade in the EU?

Industry News | | MIC Customs Solutions |

The EU is stepping up its focus on enforcing trade agreements with a new mechanism for reporting breaches.

The EU has this month unveiled a new mechanism that will aim to streamline the filing and resolution of disputes related to trade within the bloc.

A new complaints system will aim to better address issues such as barriers to trade and breaches of the Trade and Sustainable Development commitments set out in the EU's trade agreements.

EU toughening up on trade enforcement

This marks the latest step in the EU's efforts to boost the enforcement of trading rules, which has been a priority for the group in recent years. It follows on from the appointment of the bloc's first chief trade enforcement officer (CTEO) Denis Redonnet in July 2020 and the introduction of new regulations in October that will empower the EU to protect its trade interests outside of the dispute systems offered by the World Trade Organization (WTO).

Over the last few years, the EU has seen significant success in removing barriers to trade faced by companies within the bloc. This resulted in the generation of at least €8 billion worth of additional exports in 2019.

Speaking in October, European Commission executive vice-president and commissioner for trade Vladis Dombrovskis said these moves send "a strong political signal that the European Union will take action to defend and protect our companies, workers and consumers whenever our partners do not play by the rules".

What will the new mechanism offer?

The new complaints process will offer a more centralized system, which will see complaints handled through a single entry point within the Directorate-General for Trade. This aims to result in a more responsive, focused and structured process for settling disputes that will lead to faster enforcement decisions for any breaches of trading rules.

Mr Dombrovskis said: "Under this new system, complaints relating to sustainable development commitments will be given the same level of focus and attention as market access barriers. 

"It is a real step forward because stakeholders now will play a direct role in ensuring that EU trade policy delivers both on trade opportunities and on raising labor and environmental standards."

How will the process work?

Member states, individual companies, business and trade associations, civil society organisations and citizens from the EU will all be able to submit complaints via the new process using one of two online forms - one for reporting market access barriers and one for claiming violations of sustainable development commitments.

As part of this step, complainants will be required to provide a detailed factual description of the issue at stake, as well as list any actions that have already been taken to solve the dispute. 

Complainants alleging market access issues will need to describe the potential economic impact and harm they are suffering as a result of the alleged barrier. Meanwhile, for sustainable development issues, the complainant must give details of the impact and seriousness of the alleged breach.

Once a dispute has been launched, the European Commission will form an action plan to identify the most suitable steps to remedy any issues and indicate possible timelines for specific actions.

This should give complainants more clarity about the status of their dispute and whether it is likely to lead to enforcement action. Overall, the new system is expected to lead to more assertive measures that safeguard European firms from unfair trade practices and lead to quicker resolutions.

The process will be overseen by the office of the CTEO, who is also set to regularly report back to the European Parliament and Council on any developments in trade disputes within the EU.

Commenting on the appointment of Mr Redonnet as CTEO earlier this year, EU trade commissioner Phil Hogan said: "As well as ensuring that our partners deliver fully on their commitments, the CTEO will be crucially important in relation to ensuring that our SMEs, which are the backbone of the European economy, get maximum value from our trade deals."